About
Community
Bad Ideas
Drugs
Ego
Erotica
Fringe
Society
Politics
Anarchism
Central Intelligence Agency (CIA)
Corporatarchy - Rule by the Corporations
Economic Documents
Federal Bureau of Investigation (FBI)
Foreign Military & Intelligence Agencies
Green Planet
International Banking / Money Laundering
Libertarianism
National Security Agency (NSA)
Police State
Political Documents
Political Spew
Right to Keep and Bear Arms
Terrorists and Freedom Fighters
The Nixon Project
The World Beyond the U.S.A.
U.S. Military
Technology
register | bbs | search | rss | faq | about
meet up | add to del.icio.us | digg it

The complete text of the Uruguay round of the GATT



MTN/FA
15 December 1993
Special Distribution

(UR-93-0246)







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



Note:

This Final Act embodies all the results of the Uruguay Round of
Multilateral Trade Negotiations.
By signing this Final Act at the Marrakech Ministerial Meeting, the
participants will establish the texts set out in the Annexes, in
accordance with international treaty practice. Schedules are
authentic and definitive only for those participants who are
contracting parties to the GATT 1947 as of the date of the Marrakech
Meeting.

Article 10 of the Vienna Convention on the Law of Treaties establishes
that:

"The text of a treaty is established as authentic and definitive:

(a) by such procedure as may be provided for in the text or agreed
upon by the States participating in its drawing up; or

(b) failing such procedure, by the signature, signature ad referendum
or initialling by the representatives of those States of the text
of the treaty or of the Final Act of a conference incorporating
the text."

MOST COMMONLY-USED ABBREVIATIONS

BOP: Balance-of-Payments
DS: Dispute Settlement
DSU: Understanding on Rules and Procedures Governing the Settlement
of Disputes
GATS: General Agreement on Trade in Services
GATT: General Agreement on Tariffs and Trade
GDP: Government Procurement
ISO: International Standards Organization
ISO/IEC: ISO/International Electrotechnical Commission
LLDCS: Least-Developed Countries
MTO: Multilateral Trade Organization
PSI: Preshipment Inspection
SCM: Subsidies and Countervailing Measures
SPS: Sanitary and Phytosanitary Measures
TBT: Technical Barriers to Trade
TRIMS: Trade-Related Investment Measures
TRIPS: Trade-Related Aspects of Intellectual Property Rights,
Including Trade in Counterfeit Goods
TPRM: Trade Policy Review Mechanism

TABLE OF CONTENTS

Pages *
(* DUE TO PAGESIZE CONVERSION FROM A4, PAGE NUMBERING MAY NOT MATCH THE
TABLE OF CONTENTS.)
I FINAL ACT........................................................1

II AGREEMENT ESTABLISHING THE MULTILATERAL
TRADE ORGANIZATION ...........................................1-14
ANNEX 1A: AGREEMENTS ON TRADE IN GOODS
l General Agreement on Tariffs and Trade 1994
(a) Understanding on the Interpretation of Article II:l(b)....1
(b) Understanding on the Interpretation of Article XVII.....1-2
© Understanding on Balance-of-Payments Provisions.........1-3
(d) Understanding on the Interpretation of Article XXIV.....1-3
(e) Understanding on the Interpretation of Article XXV........1
(f) Understanding on the Interpretation of Article XXVIII...1-2
(g) Understanding on the Interpretation of Article XXXV.......1
2 Uruguay Round Protocol GATT 1994..............................7
3 Agreement on Agriculture...................................1-25
4 Agreement on Sanitary and Phytosanitary Measures...........1-14
5 Agreement on Textiles and Clothing.........................1-32
6 Agreement on Technical Barriers to Trade ..................1-22
7 Agreement on Trade-Related Investment Measures .............1-4
8 Agreement on Implementation of Article VI..................1-25
9 Agreement on Implementation of Article VII.................1-28
10 Agreement on Preshipment Inspection.........................1-9
11 Agreement on Rules of Origin...............................1-11
12 Agreement on Import Licensing Procedures....................1-8
13 Agreement on Subsidies and Countervailing Measures.........1-43
14 Agreement on Safeguards.....................................1-9
ANNEX 1B: General Agreement on Trade in Services and Annexes.....1-38
ANNEX 1C: Agreement on Trade-Related Aspects of Intellectual Property
Rights,
Including Trade in Counterfeit Goods...................1-31
ANNEX 2: Understanding on Rules and Procedures Governing the Settlement
of Disputes............................................1-25
ANNEX 3: Trade Policy Review Mechanism...........................1-3
ANNEX 4: Plurilateral Trade Agreements..........................1
ANNEX 4(a)Agreement on Trade in Civil Aircraft...................1
ANNEX 4(b)Agreement on Government Procurement....................1
ANNEX 4©International Dairy Arrangement........................1
ANNEX 4(d)Arrangement Regarding Bovine Meat......................1
SIGNATURES ..................................................1-5

IIIMINISTERIAL DECISIONS AND DECLARATIONS...........................1
1 Decision on Measures in Favour of Least-Developed Countries ...1-2
2 Declaration on the Contribution of the MTO to Achieving
Greater Coherence in Global Economic Policymaking................1
3 Decision on Notification Procedures............................1-3
4 Customs Valuation:
(a)Decision Regarding Cases where Customs Administrations have Reasons
to Doubt
the Truth or Accurancy of the Declared Value..................1
(b)Texts Relating to Minimum Values and Imports by Sole Agents, Sole
Distributors
and Sole Concessionaires .....................................1
5 Technical Barriers to Trade:
(a)Proposed Understanding on MTO-ISO Standards Information System1
(b)Decision on Review of the ISO/IEC Information Centre Publication1
6 Decision on Measures Concerning the Possible Negative Effects of the
Reform Programme on Least-Developed and Net Food-Importing
Developing Countries.............................................1
7. General Agreement on Trade in Services:
(a)Decision on Institutional Arrangements for the General Agreement on
Trade
in Services...................................................1
(b)Decision on Certain Dispute Settlement Procedures for the General
Agreement
on Trade in Services..........................................1
©Decision concerning Paragraph (b) of Article XIV..............1
(d)Decision on Negotiations on Basic Telecommunications ........ 1
(e)Understanding on Commitments in Financial Services..........1-4
(f)Decision on Financial Services.............................1
(g)Decision concerning Professional Services.....................1
(h)Decision on Movement of Natural Persons....................1
8 Decision on Implementation of Article XXIV:2 of the Agreement on
Government Procurement...........................................1
9 Decision on the Application and Review of the Understanding on Rules
and
Procedures Governing the Settlement of Disputes..................1
10 Decision on Improvements to the GATT Dispute Settlement Rules and
Procedures.............................................................1
11 Agreement on Implementation of Article VI of GATT 1994
(a)Decision on Anti-Circumvention................................1
(b)Decision on Standard of Review for Dispute Settlement Panels..1
12 Decision on Dispute Settlement pursuant to the Agreement on
Implementation of Article VI of GATT 1994 or Part V of the
Agreement on Subsidies and Countervailing Measures 1994..........1
PART I

FINAL ACT


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

1. Having met in order to conclude the Uruguay Round of Multilateral
Trade Negotiations, the representatives of the Governments and of the
European Communities, members of the Trade Negotiations Committee
(hereinafter referred to as "participants"), agree that the Agreement
Establishing the Multilateral Trade Organization and the Ministerial
Declarations and Decisions, as set out in the annexes attached hereto
(hereinafter referred to as "instruments"), embody the results of their
negotiations and form an integral part of this Final Act.

2. By adopting the present Final Act, participants agree

(a) to adopt the Ministerial Declarations and Decisions; and

(b) to submit, as appropriate, the Agreement Establishing the
Multilateral Trade Organization for the consideration of their
respective competent authorities with a view to seeking approval
of this Agreement in accordance with appropriate procedures of
the participant concerned.

3. Participants agree on the desirability of acceptance of the Agreement
Establishing the Multilateral Trade Organization by all participants with a
view to its entry into force as early as possible and not later than [1 July
1995]. Not later than [early 1995], Ministers will meet, in accordance with
the final paragraph of the Punta del Este Ministerial Declaration, to decide
on the international implementation of the results including the timing of
their entry into force.

4. Participants agree that the Agreement Establishing the Multilateral
Trade Organization shall be open for acceptance as a whole, by signature or
otherwise, by all participants in the Uruguay Round of Multilateral Trade
Negotiations pursuant to Article XIV of the Agreement Establishing the
Multilateral Trade Organization. The acceptance and entry into force of a
Plurilateral Trade Agreement, included in Annex 4 of the Agreement
Establishing the Multilateral Trade Organization, shall be governed by the
provisions of that Agreement.

5. Before accepting the Agreement Establishing the Multilateral Trade
Organization, participants who are not contracting parties to the GATT 1947
must first have concluded negotiations for their accession to the GATT 1947
and become contracting parties thereto. For participants who are not
contracting parties to the GATT 1947 as of the date of the Final Act, the
Schedules are not definitive and shall be subsequently completed for the
purpose of their accession to GATT 1947 and acceptance of the Agreement
establishing the MTO.

6. This Final Act and the texts of the instruments set out in the Annexes
shall be deposited with the Director-General to the CONTRACTING PARTIES to
the General Agreement on Tariffs and Trade who shall promptly furnish to
each participant in the Uruguay Round of Multilateral Trade Negotiations a
certified copy thereof.

DONE at [.........] this [.........] day of [.....] one thousand nine
hundred and ninety-four in a single copy, in the English, French and Spanish
languages, each text being authentic. PART II

AGREEMENT ESTABLISHING THE MULTILATERAL TRADE ORGANIZATION


AGREEMENT ESTABLISHING THE
MULTILATERAL TRADE ORGANIZATION

The Parties to this Agreement,

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

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

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

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

Determined to preserve the basic principles and to further the
objectives underlying this multilateral trading system,

Agree as follows:

Article I
Establishment of the Organization

The Multilateral Trade Organization (hereinafter referred to as "the
MTO") is hereby established.

Article II
Scope of the MTO

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

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

3. The agreements and associated legal instruments included in Annex 4
(hereinafter referred to as "Plurilateral Trade Agreements") are also part
of this Agreement for those Members that have accepted them, and are binding
on those Members. The Plurilateral Trade Agreements do not create either
obligations or rights for Members that have not accepted them.

4. The General Agreement on Tariffs and Trade in Annex 1A (hereinafter
referred to as "GATT 1994") is legally distinct from the General Agreement
on Tariffs and Trade, dated 30 October 1947, as subsequently rectified,
amended or modified (hereinafter referred to as "GATT 1947").

Article III
Functions of the MTO

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

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

3. The MTO shall administer the Understanding on Rules and Procedures
Governing the Settlement of Disputes in Annex 2 to this Agreement.

4. The MTO shall administer the Trade Policy Review Mechanism provided
for in Annex 3 to this Agreement.

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

Article IV
Structure of the MTO

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

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

3. The General Council shall convene as appropriate to discharge the
responsibilities of the Dispute Settlement Body provided for in the
Understanding on Rules and Procedures Governing the Settlement of Disputes
in Annex 2. The Dispute Settlement Body may have its own chairman and shall
establish such rules of procedure as it deems necessary for the fulfilment
of those responsibilities.

4. The General Council shall convene as appropriate to discharge the
responsibilities of the Trade Policy Review Body provided for in the Trade
Policy Review Mechanism in Annex 3. The Trade Policy Review Body may have
its own chairman and shall establish such rules of procedure as it deems
necessary for the fulfilment of those responsibilities.

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

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

7. The Ministerial Conference shall establish a Committee on Trade and
Development, a Committee on Balance-of-Payments Restrictions and a Committee
on Budget, Finance and Administration, which shall carry out the functions
assigned to them by this Agreement and by the Multilateral Trade Agreements,
and any additional functions assigned to them by the General Council, and
may establish such additional Committees with such functions as it may deem
appropriate. As part of its functions, the Committee on Trade and
Development shall periodically review the special provisions in the
Multilateral Trade Agreements in favour of the least-developed countries
Members and report to the General Council for appropriate action.
Membership in these Committees shall be open to representatives of all
Members.
8. The bodies provided for under the Plurilateral Trade Agreements shall
carry out the functions assigned to them under those Agreements and shall
operate within the institutional framework of the MTO. These bodies shall
keep the General Council informed of their activities on a regular basis.

Article V
Relations with other Organizations

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

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

Article VI
The Secretariat

1. There is established a Secretariat of the MTO headed by a
Director-General.

2. The Ministerial Conference shall appoint the Director-General and
adopt regulations setting out the powers, duties, conditions of service and
terms of office of the Director-General.

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

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

Article VII
Budget and Contributions

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

2. The Committee on Budget, Finance and Administration shall propose to
the General Council financial regulations which shall include provisions
setting out:

(a) the scale of contributions apportioning the expenses of the MTO
among its Members; and

(b) the measures to be taken in respect of Members in arrears.

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

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

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

Article VIII
Status of the MTO

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

2. The MTO shall be accorded by each of its Members such privileges and
immunities as are necessary for the exercise of its functions.

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

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

5. The MTO may conclude a headquarters agreement.

Article IX
Decision-Making

1. The MTO shall continue the practice of decision-making by consensus
followed under the GATT 1947.[1] Except as otherwise provided, where a
decision cannot be arrived at by consensus, the matter at issue shall be
decided by voting. At meetings of the Ministerial Conference and the
General Council, each Member of the MTO shall have one vote. Where the
European Communities exercise their right to vote, they shall have a number
of votes equal to the number of their Member States[2] which are Members of
the MTO. Decisions of the Ministerial Conference and the General Council
shall be taken by a majority of the votes cast, unless otherwise provided in
this Agreement or the Multilateral Trade Agreements.[3]

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

3. In exceptional circumstances, the Ministerial Conference[4] may decide
to waive an obligation imposed on a Member by this Agreement or any of the
Multilateral Trade Agreements; provided that any such decision shall be
approved by three-fourths[5] of the Members.

(i) A request for a waiver concerning this Agreement shall be
submitted to the Ministerial Conference for consideration pursuant to the
practice of decision-making by consensus. The Ministerial Conference shall
establish a time-period which shall not exceed ninety days to consider the
request. If consensus is not reached during the time-period, any decision
to grant a waiver shall be taken by three-fourths5 of the Members.

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

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

5. Decisions under a Plurilateral Trade Agreement, including any
decisions on interpretations and waivers, shall be governed by the
provisions of that Agreement.

Article X
Amendments

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

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

Article IX of this Agreement;
Articles I and II of the GATT 1994, in Annex 1A;
Article II:1 of the General Agreement on Trade in Services, in Annex
1B;
Article 4 of the Agreement on Trade-Related Aspects of Intellectual
Property Rights, including
Trade in Counterfeit Goods, in Annex 1C.

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

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

5. Except as provided in paragraph 2 above, amendments to Parts I, II and
III of the General Agreement on Trade in Services, in Annex 1B, and the
respective annexes shall take effect for the Members that have accepted them
upon acceptance by two-thirds of the Members and thereafter for each Member
upon acceptance by it. The Ministerial Conference may decide by a
three-fourths majority of the Members that any amendment made effective
under the preceding provision is of such a nature that any Member which has
not accepted it within a period specified by the Ministerial Conference in
each case shall be free to withdraw from the MTO or to remain a Member with
the consent of the Ministerial Conference. Amendments to Parts IV, V and VI
of the General Agreement on Trade in Services, in Annex 1B, and the
respective annexes shall take effect for all Members upon acceptance by
two-thirds of the Members.

6. Notwithstanding the other provisions of this Article, amendments to
the Agreement on Trade-Related Aspects of Intellectual Property Rights,
including Trade in Counterfeit Goods, in Annex 1C, meeting the requirements
of Article 71, paragraph 2, of that Agreement may be adopted by the
Ministerial Conference without further formal acceptance process.

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

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

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

10. Amendments to a Plurilateral Trade Agreement in Annex 4 shall be
governed by the provisions of that Agreement.

Article XI
Original Membership

1. The contracting parties to the GATT 1947 as of the date of entry into
force of this Agreement and the European Communities which accept this
Agreement and the Multilateral Trade Agreements and for which Schedules of
Concessions and Commitments are annexed to the GATT 1994 and for which
Schedules of Specific Commitments are annexed to the General Agreement on
Trade in Services in Annex 1B shall become original Members of the MTO.

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

Article XII
Accession

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

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

3. Accession to a Plurilateral Trade Agreement shall be governed by the
provisions of that Agreement.

Article XIII
Non-Application of Multilateral Trade Agreements
between Particular Members

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

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

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

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

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

Article XIV
Acceptance, Entry into Force and Deposit

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

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

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

4. The acceptance and entry into force of a Plurilateral Trade Agreement
shall be governed by the provisions of that Agreement. Such Agreements
shall be deposited with the Director-General of the MTO.

Article XV
Withdrawal

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

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

Article XVI
Miscellaneous Provisions

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

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

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

4. Each Member shall ensure the conformity of its laws, regulations and
administrative procedures with its obligations as provided in the annexed
Agreements.

5. No reservations may be made in respect of any provisions of this
Agreement. Reservations in respect of any of the provisions of the
Multilateral Trade Agreements may only be made in accordance with the
provisions set out in those Agreements. Reservations in respect of a
provision of a Plurilateral Trade Agreement shall be governed by the
provisions of that Agreement.

6. This Agreement shall be registered in accordance with the provisions
of Article 102 of the Charter of the United Nations.

Done at --- this -- day of --- one thousand nine hundred and
ninety---, in a single copy, in the English, French and Spanish languages,
each text being authentic.

Explanatory Notes:

The terms "country" or "countries" as used in this Agreement and the
Multilateral Trade Agreements are to be understood to include any separate
customs territory Member of the MTO.

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

Annex 1A

General interpretative note to Annex 1A:

In the event of conflict between a provision of the General Agreement
on Tariffs and Trade 1994 and a provision of another agreement in Annex 1A,
the provision of the other agreement shall take precedence to the extent of
the conflict.

1. General Agreement on Tariffs and Trade 1994

The General Agreement on Tariffs and Trade 1994 (hereinafter referred
to as GATT 1994) consisting of:

a. The provisions in the General Agreement on Tariffs and Trade
dated 30 October 1947 annexed to the Final Act of the second session
of the Preparatory Committee of the United Nations Conference on
Trade and Employment (excluding the Protocol of Provisional
Application), as rectified, amended or otherwise modified by the terms
of legal instruments which have entered into force before the date of
entry into force of the Agreement Establishing the Multilateral Trade
Organization Agreement are hereby made an integral part of this Annex.

b. The provisions of the legal instruments that have entered into
force under the GATT 1947 before the date of entry into force of the
Agreement Establishing the MTO, as set forth below:

i. protocols and certifications relating to tariff
concessions;

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

iii. waivers granted under Article XXV of the GATT 1947 and
still in force on the date of entry into force of the
Agreement Establishing the MTO[7]; and

iv. other decisions of the CONTRACTING PARTIES to the GATT
1947.

c. The Understandings set out in sub-paragraphs i through vii below
shall be deemed to be an integral part of the GATT 1994.

i. Understanding on the Interpretation of Article II:l(b) of
the General Agreement on Tariffs and Trade (text)

ii. Understanding on the Interpretation of Article XVII of the
General Agreement on Tariffs and Trade (text)

iii. Understanding on Balance-of-Payments Provisions of the
General Agreement on Tariffs and Trade (text)

iv. Understanding on the Interpretation of Article XXIV of the
General Agreement on Tariffs and Trade (text)

v. Understanding in respect of waivers of obligations under
the General Agreement on Tariffs and Trade (text)

vi. Understanding on the Interpretation of Article XXVIII of
the General Agreement on Tariffs and Trade (text)

vii. Understanding on the Interpretation of Article XXXV of the
General Agreement on Tariffs and Trade (text).

d. Explanatory Notes:

i. The references to "contracting party" in the provisions of
the GATT 1994 shall be deemed to read "Member". The references
to "less-developed contracting party" and "developed contracting
party" shall be deemed to read "developing country Member" and
"developed country Member". The references to "Executive
Secretary" shall be deemed to read "Director-General of the MTO".

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

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

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

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

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

v. This exemption is without prejudice to solutions concerning
specific aspects of the legislation covered by this exemption
negotiated in sectoral agreements or in other fora.

2. The Uruguay Round Protocol to the General Agreement on Tariffs and
Trade 1994 shall also be deemed to be an integral part of the GATT
1994 (text)

3. Agreement on Agriculture (text)

4. Agreement on Sanitary and Phytosanitary Measures (text)

5. Agreement on Textiles and Clothing (text)

6. Agreement on Technical Barriers to Trade (text)

7. Agreement on Trade-Related Aspects of Investment Measures (text)

8. Agreement on Implementation of Article VI of the General Agreement on
Tariffs and Trade (text)

9. Agreement on Implementation of Article VII of the General Agreement on
Tariffs and Trade
(text)

10. Agreement on Preshipment Inspection (text)

11. Agreement on Rules of Origin (text)

12. Agreement on Import Licensing Procedures (text)

13. Agreement on Subsidies and Countervailing Measures (text)

14. Agreement on Safeguards (text)

Annex 1B

General Agreement on Trade in Services (text)

Annex 1C

Agreement on Trade-Related Aspects of Intellectual Property Rights,
Including Trade in Counterfeit Goods (text)

Annex 2

Understanding on Rules and Procedures Governing the Settlement of
Disputes (text)

Annex 3

Trade Policy Review Mechanism (text)

Annex 4

Agreement on Trade in Civil Aircraft (text)
Agreement on Government Procurement (text)
International Dairy Arrangement (text)
Arrangement Regarding Bovine Meat (text)

1. The body concerned shall be deemed to have decided by consensus on a
matter submitted for its consideration, if no Member, present at the meeting
where the decision is taken, formally objects to the proposed decision.

2. The number of votes of the European Communities and their Member States
shall in no case exceed the number of the Member States of the European
Communities.

3. Decisions by the General Council when convened as the Dispute Settlement
Body shall be made only in accordance with the provisions of paragraph 2.4
of the Understanding on Rules and Procedures Governing the Settlement of
Disputes.

4. References to the Ministerial Conference include the General Council.

5. A decision to grant a waiver in respect of any obligation subject to a
transition period or a period for staged implementation that the requesting
Member has not performed by the end of the relevant period, shall be made
only by consensus.

6. References to the Ministerial Conference include the General Council.

7. Waivers covered by this provision are the following: 1. Argentina
(Establishment of a new Schedule LXIV, L/7271, 31.12.93); 2. Australia
(Base dates under Article I:4, BISD 9S/46, no time-limit); 3. Australia
(Treatment of Products of Papua New Guinea, BISD 8S/28, no time-limit); 4.
Australia (Tariff preference for less developed countries, BISD 14S/23, no
time-limit); 5. Bangladesh (Establishment of a new Schedule LXX, L/7272,
31.12.93); 6. Bolivia (Renegotiation of Schedule LXXXIV, L/7151, 31.12.93);
7. Brazil (Establishment of a new Schedule III, L/7273, 31.12.93); 8.
Canada (CARIBCAN, BISD 33S/97, 15.6.98); 9. Chile (Establishment of a new
Schedule VII, L/7274, 31.12.93); 10. Cuba (Provisions of Article XV:6 BISD
13S/23, no time-limit); 11. Egypt (Renegotiation of Schedule LXIII; L/7281,
31.12.93); 12. European Coal and Steel Community (Waiver granted in
connection with the ECSC, BISD 1S/17, no time-limit); 13. European
Communities (Transitional measures to take account of the external economic
impact of German unification, L/7246, 31.12.93); 14. France (Trading
Arrangements with Morocco, BISD 9S/39, no time-limit); 15. Israel
(Establishment of a new Schedule XLII, L/7275, 31.12.93); 16. Jamaica
(Margins of preference, BISD 18S/33, no time-limit); 17. Jamaica
(Establishment of a new Schedule LXVI, L/7291, 31.7.94); 18. Malawi (Base
dates under Article I:4, BISD 9S/46, no time-limit); 19. Malawi
(Renegotiation of Schedule LVIII, L/7152, 31.12.93); 20. Mexico
(Establishment of a new Schedule LXXVII, L/7276, 31.12.93); 21. Morocco
(Establishment of a new Schedule LXXXI, L/7277, 31.12.93); 22. Pakistan
(Establishment of a new Schedule XV, L/7278, 31.12.93); 23. Peru
(Establishment of a new Schedule XXXV, L/7245, 31.12.93); 24. Senegal
(Renegotiation of Schedule XLIX, L/7282, 31.12.93); 25. South Africa (Base
dates under Article I:4, BISD 9S/46, no time-limit; 26. Sri Lanka
(Establishment of a new Schedule VI, L/7279, 31.12.93); 27. Trinidad and
Tobago (Establishment of a new Schedule LXVII, L/7290, 31.7.94); 28. United
Kingdom (Items traditionally admitted free of duty from countries of the
Commonwealth, BISD 3S/25, no time-limit); 29. United Kingdom (Special
problems of dependent overseas territories, BISD 3S/21, no time-limit); 30.
United States (Waiver in respect of products of the Trust Territory of
Pacific Islands, BISD Vol.II, page 9, no time-limit); 31. United States
(Imports of Automotive Products, BISD 14S/37, no time-limit); 32. United
States (Caribbean Basin Economic Recovery Act, BISD31S/20, 30.9.95); 33.
United States (Andean Trade Preference Act, L/6961, 4.12.2001); 34.
Uruguay (Renegotiation of Schedule XXXI, L/7280, 31.12.93); 35. Venezuela
(Establishment of a new Schedule LXXXVI, L/7316, 30.6.94); 36. Zaire
(Renegotiation of Schedule LXVIII, L/7283, 31.12.93); 37. Zambia
(Renegotiation of Schedule LXXVIII, L/7329, 30.11.95); 38. Zimbabwe
(Customs treatment for products of United Kingdom territories, BISD 9S/47,
no time-limit); 39. Zimbabwe (Base dates under Article I:4, BISD 9S/46, no
time-limit). This list will be modified to take into account waivers
granted under the GATT 1947 up to the date of entry into force of this
Agreement and waivers hereby listed which will have expired by that time.


URUGUAY ROUND AGREEMENTS ON TRADE IN GOODS (Annex IA)

The following Agreements, Understandings, Decisions, the texts of
which are set out below, are an integral part of the Uruguay Round
Agreements.
UNDERSTANDING ON THE INTERPRETATION OF ARTICLE II:1(b) OF THE GENERAL
AGREEMENT ON TARIFFS AND TRADE 1994

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

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

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

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

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

6. For the purposes of this Understanding, the provisions of Articles
XXII and XXIII of the GATT 1994 as elaborated and applied by the
Understanding on Rules and Procedures Governing the Settlement of Disputes
will apply.

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

8. The decision in paragraph 2 above regarding the date applicable to
each concession for the purposes of Article II:1(b) supersedes the decision
regarding the applicable date taken by the GATT 1947 Council on 26 March
1980 (BISD 27S/22). UNDERSTANDING ON THE INTERPRETATION OF ARTICLE XVII OF THE
GENERAL AGREEMENT ON TARIFFS AND TRADE 1994

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

Noting further that Members are subject to their GATT 1994 obligations
in respect of those governmental measures affecting state trading
enterprises;.

Recognizing that this Understanding is without prejudice to the
substantive disciplines prescribed in Article XVII;

1. It is agreed that in order to ensure the transparency of the
activities of state trading enterprises, such enterprises shall be notified
to the Council for Trade in Goods, for review by the working party to be set
up under paragraph 5 below, in accordance with the following working
definition:

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

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

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

3. Notifications shall be made in accordance with the 1960 questionnaire
on State trading (BISD, 9S/184), it being understood that Members shall
notify the enterprises referred to in paragraph 1 above whether or not
imports or exports have in fact taken place.

4. Any Member which has reason to believe that another Member has not
adequately met its notification obligation may raise the matter with the
Member concerned. If the matter is not satisfactorily resolved it may make
a counter-notification to the Council for Trade in Goods, for consideration
by the working party set up under paragraph 5 below, simultaneously
informing the Member concerned.
5. A working party shall be set up, on behalf of the Council for Trade in
Goods, to review notifications and counter-notifications. In the light of
this review and without prejudice to Article XVII:4©, the Council for
Trade in Goods may make recommendations with regard to the adequacy of
notifications and the need for further information. The working party shall
also review, in the light of the notifications received, the adequacy of the
1960 questionnaire on state trading and the coverage of state trading
enterprises notified under paragraph 1 above. It shall also develop an
illustrative list showing the kinds of relationships between governments and
enterprises, and the kinds of activities, engaged in by these enterprises,
which may be relevant for the purposes of Article XVII. It is understood
that the MTO Secretariat will provide a general background paper for the
working party on the operations of state trading enterprises as they relate
to international trade. Membership of the working party shall be open to
all Members indicating their wish to serve on it. It shall meet within a
year of the entry into force of the Agreement Establishing the MTO and
thereafter at least once a year. It shall report annually to the Council
for Trade in Goods.[1]


1. The activities of this working party shall be co-ordinated with those of
the working group provided for in section III of the Ministerial Decision on
Notification Procedures.


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

Members,

Recognizing the provisions of Articles XII, XVIII:B of the GATT 1994
and of the 1979 Declaration on Trade Measures taken for Balance-of-Payments
Purposes (hereafter referred to as the "1979 Declaration") and in order to
clarify such provisions[1];

Hereby agree as follows:

Application of Measures

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

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

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

4. Members confirm that restrictive import measures taken for
balance-of-payments reasons may only be applied to control the general level
of imports and may not exceed what is necessary to address the
balance-of-payments situation. In order to minimise any incidental
protective effects, restrictions shall be administered in a transparent
manner. The authorities of the importing Member shall provide adequate
justification as to the criteria used to determine which products are
subject to restriction. As provided in Articles XII:3 and XVIII:B:10,
Members may, in the case of certain essential products, exclude or limit the
application of surcharges applied across the board or other measures applied
for balance-of-payments reasons. The term essential products shall be
understood to mean products which meet basic consumption needs or which
contribute to the Member's effort to improve its balance-of-payments
situation, such as capital goods or inputs needed for production. In the
administration of quantitative restrictions, discretionary licensing shall
be used only when unavoidable and be progressively phased out. Appropriate
justification shall be provided as to the criteria used to determine
allowable import quantities or values.

Procedures for Balance-of-Payments Consultations

5. The Committee on Balance-of-Payments Restrictions (hereafter referred
to as "Committee") shall carry out consultations in order to review all
restrictive import measures taken for balance-of-payments purposes. The
membership of the Committee is open to all Members indicating their wish to
serve in it. The Committee shall follow the procedures for consultations on
balance-of-payments restrictions approved by the GATT 1947 Council on 28
April 1970 and set out in BISD, Eighteenth Supplement, pages 48-53
(hereafter referred to as "Full consultation Procedures"), subject to the
provisions set out below.

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

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

8. Consultations may be held under simplified procedures in the case of
least-developed country Members or in the case of developing country Members
which are pursuing liberalisation efforts in conformity with the schedule
presented to the Committee in previous consultations. Simplified
consultations may also be held when the Trade Policy Review of a developing
country Member is scheduled for the same calendar year as the date fixed for
the consultations. In such cases the decision as to whether a full
consultation should be held will be made on the basis of the factors
enumerated in paragraph 8 of the 1979 Declaration. Except in the case of
least-developed country Members, no more than two successive consultations
may be held under simplified procedures.

Notification and Documentation

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

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

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

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

Conclusions of Balance-of-Payments Consultations

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

1. Nothing in this Understanding is intended to modify the rights and
obligations of Members under Articles XII or XVIII:B of the GATT 1994. The
provisions of Articles XXII and XXIII of the GATT 1994 as elaborated and
applied by the Understanding on Rules and Procedures Governing the
Settlement of Disputes may be invoked with respect to any matters arising
from the application of restrictive import measures taken for
balance-of-payments reasons.


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

Members,

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

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

Recognizing the contribution to the expansion of world trade that may
be made by closer integration between the economies of the parties to such
agreements;

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

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

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

Recognizing the need for a common understanding of the obligations of
Members under Article XXIV:12;

Hereby agree as follows:

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

Article XXIV:5

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

3. The "reasonable length of time" referred to in Article XXIV:5©
should exceed ten years only in exceptional cases. In cases where Members
believe that ten years would be insufficient they shall provide a full
explanation to the Council for Trade in Goods of the need for a longer
period.

Article XXIV:6

4. Paragraph 6 of Article XXIV establishes the procedure to be followed
when a Member forming a customs union proposes to increase a bound rate of
duty. In this regard it is reaffirmed that the procedure set forth in
Article XXVIII, as elaborated in the guidelines adopted by the GATT 1947
CONTRACTING PARTIES on 10 November 1980 (27S/26) and in the Understanding on
the Interpretation of Article XXVIII of the General Agreement on Tariffs and
Trade 1994, must be commenced before tariff concessions are modified or
withdrawn upon the formation of a customs union or an interim agreement
leading to the formation of a customs union.

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

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

Review of Customs Unions and Free Trade Areas

7. All notifications made under Article XXIV:7(a) shall be examined by a
working party in the light of the relevant provisions of the GATT 1994 and
of paragraph 1 of this Understanding. The working party shall submit a
report to the Council for Trade in Goods on its findings in this regard. The
Council for Trade in Goods may make such recommendations to Members as it
deems appropriate.

8. In regard to interim agreements, the working party may in its report
make appropriate recommendations on the proposed timeframe and on measures
required to complete the formation of the customs union or free trade area.
It may if necessary provide for further review of the agreement.

9. Substantial changes in the plan and schedule included in an interim
agreement shall be notified, and shall be examined by the Council for Trade
in Goods if so requested.

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

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

Dispute Settlement

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

Article XXIV:12

13. Each Member is fully responsible under the GATT 1994 for the
observance of all provisions of the GATT 1994, and shall take such
reasonable measures as may be available to it to ensure such observance by
regional and local governments and authorities within its territory.

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

15. Each Member undertakes to accord sympathetic consideration to and
afford adequate opportunity for consultation regarding any representations
made by another Member concerning measures affecting the operation of the
GATT 1994 taken within the territory of the former.
UNDERSTANDING IN RESPECT OF WAIVERS OF OBLIGATIONS UNDER
THE GENERAL AGREEMENT ON TARIFFS AND TRADE 1994

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

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

3. Any Member considering that a benefit accruing to it under the GATT
1994 is being nullified or impaired as a result of

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

(b) the application of a measure consistent with the terms and
conditions of the waiver

may invoke the provisions of Article XXIII of the GATT 1994 as
elaborated and applied by the Understanding on Rules and Procedures
Governing the Settlement of Disputes. UNDERSTANDING ON THE INTERPRETATION OF ARTICLE XXVIF THE
GENERAL AGREEMENT ON TARIFFS AND TRADE 1994

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

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

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

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

5. Where a Member considers that it has a principal supplying or a
substantial interest in terms of paragraph 4 above, it should communicate
its claim in writing, with supporting evidence, to the Member proposing to
modify or withdraw a concession, and at the same time inform the MTO
Secretariat. Paragraph 4 of the "Procedures for Negotiations under Article
XXVIII" (BISD 27S/26) shall apply in these cases.

6. When an unlimited tariff concession is replaced by a tariff rate
quota, the amount of compensation provided should exceed the amount of the
trade actually affected by the modification of the concession. The basis
for the calculation of compensation should be the amount by which future
trade prospects exceed the level of the quota. It is understood that the
calculation of future trade prospects should be based on the greater of:

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

(ii) trade in the most recent year increased by ten per cent.

In no case shall the liability for compensation exceed that which would be
entailed by complete withdrawal of the concession.

7. Any Member having a principal supplying interest, whether as provided
for in paragraph 1 above or in Article XXVIII:1, in a concession which is
modified or withdrawn shall be accorded an initial negotiating right in the
compensatory concessions, unless another form of compensation is agreed by
the Members concerned. UNDERSTANDING ON THE INTERPRETATION OF ARTICLE XXXV
OF THE GENERAL AGREEMENT ON TARIFFS AND TRADE 1947


The CONTRACTING PARTIES,

Having regard to the interlinked provisions of paragraph 1 of Article
XXXV of the General Agreement on Tariffs and Trade 1947;

Noting that by invoking Article XXXV a contracting party on the one
hand, or a government acceding to GATT 1947 on the other, declines to apply
GATT 1947, or alternatively Article II of that Agreement, to the other
party;

Desiring to ensure that tariff negotiations between contracting
parties and a government acceding to GATT 1947 are not inhibited by
unwillingness to accept an obligation to apply GATT 1947 as a consequence of
entry into such negotiations;

Agree as follows:

A contracting party and a government acceding to GATT 1947 may engage
in negotiations relating to the establishment of a GATT schedule of
concessions by the acceding government without prejudice to the right of
either to invoke Article XXXV in respect of the other. URUGUAY ROUND PROTOCOL TO THE
GENERAL AGREEMENT ON TARIFFS AND TRADE 1994

Members,

Having carried out negotiations within the framework of the General
Agreement on Tariffs and Trade 1947, pursuant to the Ministerial Declaration
on the Uruguay Round,

Hereby agree as follows:

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

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

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

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

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

(b) For the purpose of the reference in Article II:6(a) of the GATT
1994 to the date of that Agreement, the applicable date in
respect of a schedule of concessions annexed to this Protocol
shall be the date of this Protocol.

6. In cases of modification or withdrawal of concessions relating to
non-tariff measures as contained in Part III of the schedules, the
provisions of Article XXVIII of the GATT 1994 and the Procedures for
Negotiations under Article XXVIII (BISD 27S/26) shall apply. This would be
without prejudice to the rights and obligations of Members under the GATT
1994.

7. In each case in which a schedule annexed to this Protocol results for
any product in treatment less favourable than was provided for such product
in the Schedules of the General Agreement 1947 prior to the entry into force
of this Protocol, the Member to whom the schedule relates shall be deemed to
have taken appropriate action as would have been otherwise necessary under
the relevant provisions of Article XXVIII of the GATT 1947 or 1994. The
provisions of this paragraph shall apply to the Schedules of Members listed
by agreement in the Annex to this Protocol.

8. The Schedules annexed hereto are authentic in the English, French and
Spanish language as specified in each Schedule.

9. The date of this Protocol shall be the date of the adoption of the
Final Act Embodying the Results of the Uruguay Round Multilateral Trade
Negotiations.
Appendix I

SCHEDULE ... (Name of Member)
This schedule is authentic only in the [English] [French] [Spanish] language
PART I MOST-FAVOURED-NATION TARIFF
SECTION I Agricultural Products
SECTION I - A Tariffs


Tariff item numberDescription of productsBase rate of dutyBound rate of
dutyImplementation period
from/to Special
safeguard









l














g






t






r







s



d









s

1 2 3 4 5 6

7

8

PART I (continued)

SECTION I - B Tariff Quotas

Description of ProductsTariff item number(s)Initial quota quantity and
in-quota tariff rateFinal quota quantity and
in-quota tariff
rateImplementati
on period
from/to









l














g






t






r






s



d













s

1 2 3 4 5

6

7




Appendix II

SCHEDULE ... - (Name of Member)

This schedule is authentic only in the [English] [French] [Spanish] language.

PART I - MOST-FAVOURED-NATION TARIFF

SECTION II - Other Products


Tariff item
number Description of productsBase rate of duty (U/B)Bound rate
of duty
Init
ial
nego
tiat
ing
righ
t






r







s



d









s

1 2 3 4 5
6

00.00.00
(at appropriate level)Manufactured etc. ...24% [U] [B]12% CA

Appendix III

SCHEDULE ... - (Name of Member)

PART II - PREFERENTIAL TARIFF

(If applicable)

Appendix IV

SCHEDULE . . . - (Name of Member)

PART III - NON-TARIFF CONCESSIONS


Tariff item number Description of products
Conc
essi
ons



Appendix V
SCHEDULE ... (Name of Member)
This schedule is authentic only in the [English] [French] [Spanish] language
PART IV: AGRICULTURE PRODUCTS: COMMITMENTS LIMITING SUBSIDIZATION
(Article 3 of the Agreement on Agriculture)
SECTION I - Domestic Support: Total AMS Commitments

BASE TOTAL AMS Annual and final bound commitment levels
199X - 200Y
Rele
vant
Supp
orti
ng
Tabl
es
and
docu
ment
refe
renc
e

1 2 3
PART IV (continued)SECTION II:
Export Subsidies: Budgetary Outlay and Quantity Reduction Commitments

Description of products and tariff item numbers at HS six digit levelBase
outlay levelCalendar/other year appliedAnnual and final
outlay commitment levels 199X -
200YBase
quantityCale
dar/other
year applied







l



d






l










y













t







s










t













g







s



d










t











e

1 2 3 4 5 6

7

8
PART IV (Continued)SECTION III: Commitments Limiting the Scope of Export
Subsidies


Description of products Nature of commitments

1 2 AGREEMENT ON AGRICULTURE

Members,

Having decided to establish a basis for initiating a process of reform
of trade in agriculture in line with the objectives of the
negotiations as set out in the Punta del Este Declaration;

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

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

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

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

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

Hereby agree, as follows:

Part I

Article 1 - Definition of Terms

In this Agreement, unless the context otherwise requires:

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

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

(ii) with respect to support provided during any year of the
implementation period and thereafter, calculated in
accordance with the provisions of Annex 3 of this Agreement
and taking into account the constituent data and
methodology used in the tables of supporting material
incorporated by reference in Part IV of the Member's
Schedule;

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

© "budgetary outlays" or "outlays" include revenue foregone;

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

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

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

(e) "export subsidies" refer to subsidies contingent upon export
performance including the export subsidies listed in Article 9 of
this Agreement;

(f) "implementation period" means the six-year period commencing in
the year 1995, except that, for the purposes of Article 13, it
means the nine-year period commencing in 1995;

(g) "market access concessions" include all market access commitments
undertaken pursuant to this Agreement;

(h) "Total Aggregate Measurement of Support" and "Total AMS" mean the
sum of all domestic support provided in favour of agricultural
producers, calculated as the sum of all aggregate measurements of
support for basic agricultural products, all non-product-specific
aggregate measurements of support and all equivalent measurements
of support for agricultural products, and which is:

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

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

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

Article 2 - Product Coverage

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


Part II

Article 3 - Incorporation of Concessions and Commitments

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

2. Subject to the provisions of Article 6 of this Agreement, a Member
shall not provide support in favour of domestic producers in excess of the
commitment levels specified in Section I of Part IV of its Schedule.

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


Part III

Article 4 - Market Access

1. Market access concessions contained in Schedules relate to bindings
and reductions of tariffs, and to other market access commitments as
specified therein.

2. Members shall not maintain, resort to, or revert to any measures of
the kind which have been required to be converted into ordinary customs
duties[1], except as otherwise provided for in Article 5 and Annex 5 hereof.

Article 5 - Special Safeguard Provisions

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

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

(ii) the price at which imports of that product may enter the customs
territory of the Member granting the concession, as determined on
the basis of the c.i.f. import price of the shipment concerned
expressed in terms of its domestic currency, falls below a
trigger price equal to the average 1986 to 1988 reference
price[2] for the product concerned.

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

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

4. Any additional duty imposed under sub-paragraph 1(i) above shall only
be maintained until the end of the year in which it has been imposed, and
may only be levied at a level which shall not exceed one-third of the level
of the ordinary customs duty in effect in the year in which the action is
taken. The trigger level shall be set according to the following schedule
based on market access opportunities defined as imports as a percentage of
the corresponding domestic consumption[3] during the three preceding years
for which data are available:

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

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

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

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

5. The additional duty imposed under sub-paragraph 1(ii) above shall be
set according to the following schedule:

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

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

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

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

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

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

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

8. Where measures are taken in conformity with paragraphs 1 through 7
above, Members undertake not to have recourse, in respect of such measures,
to the provisions of Article XIX:1(a) and XIX:3 of the GATT 1994 or
paragraph 17 of the Agreement on Safeguards.

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


Part IV

Article 6 - Domestic Support Commitments

1. The domestic support reduction commitments of each Member contained in
Part IV of its Schedule shall apply to all of its domestic support measures
in favour of agricultural producers with the exception of domestic measures
which are not subject to reduction in terms of the criteria set out in this
Article and in Annex 2 to this Agreement. The commitments are expressed in
terms of Total Aggregate Measurement of Support and "Annual and Final Bound
Commitment Levels".

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

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

4. (a) A Member shall not be required to include in the calculation of
its Current Total AMS and shall not be required to reduce:

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

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

(b) For developing country Members, the de minimis percentage under
this paragraph shall be 10 per cent.

5. (a) Direct payments under production-limiting programmes shall not be
subject to the commitment to reduce domestic support if :

(i) such payments are based on fixed area and yields; or

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

(iii) livestock payments are made on a fixed number of head.

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


Article 7 - General Disciplines on Domestic Support

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

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

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


Part V

Article 8 - Export Competition Commitments

Each Member undertakes not to provide export subsidies otherwise than
in conformity with this Agreement and with the commitments as specified in
that Member's Schedule.


Article 9 - Export Subsidy Commitments

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

(a) The provision by governments or their agencies of direct
subsidies, including payments-in-kind, to a firm, to an industry,
to producers of an agricultural product, to a co-operative or
other association of such producers, or to a marketing board,
contingent on export performance.

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

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

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

(e) Internal transport and freight charges on export shipments,
provided or mandated by governments, on terms more favourable
than for domestic shipments.

(f) Subsidies on agricultural products contingent on their
incorporation in exported products.

2. (a) Except as provided in sub-paragraph (b), the export subsidy
commitment levels for each year of the implementation period, as
specified in a Member's Schedule, represent with respect to the
export subsidies listed in paragraph 1 of this Article:

(i) in the case of budgetary outlay reduction commitments, the
maximum level of expenditure for such subsidies that may be
allocated or incurred in that year; and

(ii) in the case of export quantity reduction commitments, the
maximum quantity of an agricultural product, or group of
such products, in respect of which such export subsidies
may be granted in that year.

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

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

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

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

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

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

4 During the implementation period developing country Members shall not
be required to undertake commitments in respect of the export subsidies
listed in sub-paragraphs (d) and (e) of paragraph 1 above provided that
these are not applied in a manner that would circumvent reduction
commitments.


Article 10 - Prevention of Circumvention of Export Subsidy Commitments

1. Export subsidies not listed in Article 9(1) of this Agreement shall
not be applied in a manner which results in, or which threatens to lead to,
circumvention of export subsidy commitments; nor shall non-commercial
transactions be used to circumvent such commitments.

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

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

4. Members donors of international food aid shall ensure:

(a) that the provision of international food aid is not tied directly
or indirectly to commercial exports of agricultural products to
recipient countries;

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

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


Article 11 - Incorporated Products

In no case may the per unit subsidy paid on an incorporated
agricultural primary product exceed the per unit export subsidy that would
be payable on exports of the primary product as such.


Part VI

Article 12 - Disciplines on Export Prohibitions and Restrictions

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

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

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

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

Part VII

Article 13 - Due Restraint

During the implementation period, notwithstanding the provisions of
the GATT 1994 and the Agreement on Subsidies and Countervailing Measures
("Subsidies Agreement"):

1. Domestic support measures that conform fully to the provisions of
Annex 2 to this Agreement shall be:

(a) non-actionable subsidies for purposes of countervailing
duties[4];

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

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

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

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

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

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

3. Export subsidies that conform fully to the provisions of Part V of
this Agreement, as reflected in each Member's Schedule of Commitments, shall
be:

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

(b) exempt from actions based on Article XVI of the GATT 1994 or
Articles 3, 5 and 6 of the Subsidies Agreement.

Part VIII

Article 14 - Sanitary and Phytosanitary Measures

Members agree to give effect to the Agreement on Sanitary and
Phytosanitary Measures.


Part IX

Article 15 - Special and Differential Treatment

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

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

Part X

Article 16 - Least-developed and Net Food-Importing Developing Countries

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

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

Part XI

Article 17 - Committee on Agriculture

A Committee on Agriculture shall be established.


Article 18 - Review of the Implementation of Commitments

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

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

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

4. In the review process Members shall give due consideration to the
influence of excessive rates of inflation on the ability of any Member to
abide by its domestic support commitments.

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

6. The review process shall provide an opportunity for Members to raise
any matter relevant to the implementation of commitments under the reform
programme as set out in this Agreement.

7. Any Member may bring to the attention of the Committee on Agriculture
any measure which it considers ought to have been notified by another
Member.

Article 19 - Consultation and Dispute Settlement

The provisions of Articles XXII and XXIII of the GATT 1994, as
elaborated and applied by the Understanding on Rules and Procedures
Governing the Settlement of Disputes, shall apply to consultations and the
settlement of disputes under this Agreement.


Part XII

Article 20 - Continuation of the Reform Process

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

- the experience to that date from implementing the reduction
commitments;

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

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

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

Part XIII

Article 21 - Final Provisions

1. The provisions of the GATT 1994 and of other Multilateral Trade
Agreements in Annex 1A to the MTO shall apply subject to the provisions of
this Agreement.

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

ANNEX 1
PRODUCT COVERAGE

1. This Agreement shall cover the following products:


(i) HS Chapters 1 to 24 less fish and fish products, plus

(ii) HS Code 29.05.43 (mannitol)

HS Code 29.05.44 (sorbitol)

HS Heading 33.01 (essential oils)

HS Headings 35.01 to 35.05 (albuminoidal substances,
modified starches, glues)

HS Code 38.09.10 (finishing agents)

HS Code 38.23.60 (sorbitol n.e.p.)

HS Headings 41.01 to 41.03 (hides and skins)

HS Heading 43.01 (raw furskins)

HS Headings 50.01 to 50.03 (raw silk and silk waste)

HS Headings 51.01 to 51.03 (wool and animal hair)

HS Headings 52.01 to 52.03 (raw cotton, waste and cotton
carded or combed)

HS Heading 53.01 (raw flax)

HS Heading 53.02 (raw hemp)

2. The foregoing shall not limit the product coverage of the Agreement on
Sanitary and Phytosanitary Measures.

ANNEX 2

DOMESTIC SUPPORT: THE BASIS FOR EXEMPTION FROM
THE REDUCTION COMMITMENTS

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

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

(ii) the support in question shall not have the effect of providing
price support to producers;

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

Government Service Programmes

2. General services

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

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

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

(iii)training services, including both general and specialist training
facilities;

(iv) extension and advisory services, including the provision of means
to facilitate the transfer of information and the results of
research to producers and consumers;

(v) inspection services, including general inspection services and
the inspection of particular products for health, safety, grading
or standardization purposes;

(vi) marketing and promotion services, including market information,
advice and promotion relating to particular products but
excluding expenditure for unspecified purposes that could be used
by sellers to reduce their selling price or confer a direct
economic benefit to purchasers; and

(vii)infrastructural services, including: electricity reticulation,
roads and other means of transport, market and port facilities,
water supply facilities, dams and drainage schemes, and
infrastructural works associated with environmental programmes.
In all cases the expenditure shall be directed to the provision
or construction of capital works only, and shall exclude the
subsidized provision of on-farm facilities other than for the
reticulation of generally-available public utilities. It shall
not include subsidies to inputs or operating costs, or
preferential user charges.

3. Public stockholding for food security purposes[5]

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

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

4. Domestic food aid[6]

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

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

5. Direct payments to producers

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

6. Decoupled income support

(i) Eligibility for such payments shall be determined by
clearly-defined criteria such as income, status as a producer or
landowner, factor use or production level in a defined and fixed
base period.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

9. Structural adjustment assistance provided through producer retirement
programmes

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

(ii) Payments shall be conditional upon the total and permanent
retirement of the recipients from marketable agricultural
production.

10. Structural adjustment assistance provided through resource retirement
programmes

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

(ii) Payments shall be conditional upon the retirement of land from
marketable agricultural production for a minimum of 3 years, and
in the case of livestock on its slaughter or definitive permanent
disposal.

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

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

11. Structural adjustment assistance provided through investment aids

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

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

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

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

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

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

12. Payments under environmental programmes

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

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

13. Payments under regional assistance programmes

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

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

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

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

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

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

ANNEX 3

DOMESTIC SUPPORT: CALCULATION OF AGGREGATE MEASUREMENT OF SUPPORT

1. Subject to the provisions of Article 6, an Aggregate Measurement of
Support (AMS) shall be calculated on a product-specific basis for each basic
product (defined as the product as close as practicable to the point of
first sale) receiving market price support, non-exempt direct payments, or
any other subsidy not exempted from the reduction commitment ("other
non-exempt policies"). Support which is non-product specific shall be
totalled into one non-product-specific AMS in total monetary terms.
2. Subsidies under paragraph 1 shall include both budgetary outlays and
revenue foregone by governments or their agents.

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

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

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

6. For each basic product, a specific AMS shall be established, expressed
in total monetary value terms.

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

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

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

10. Non-exempt direct payments: non-exempt direct payments which are
dependent on a price gap shall be calculated either using the gap between
the fixed reference price and the applied administered price multiplied by
the quantity of production eligible to receive the administered price, or
using budgetary outlays.

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

12. Non-exempt direct payments which are based on factors other than price
shall be measured using budgetary outlays.

13. Other non-exempt policies, including input subsidies and other
policies such as marketing cost reduction measures: the value of such
policies shall be measured using government budgetary outlays or, where the
use of budgetary outlays does not reflect the full extent of the subsidy
concerned, the basis for calculating the subsidy shall be the gap between
the price of the subsidised good or service and a representative market
price for a similar good or service multiplied by the quantity of the good
or service.


ANNEX 4

DOMESTIC SUPPORT: CALCULATION OF EQUIVALENT MEASUREMENT OF SUPPORT

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

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

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

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


ANNEX 5

SPECIAL TREATMENT UNDER ARTICLE 4:2

Section A

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

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

(b) no export subsidies have been provided since the beginning of the
base period for the designated products;

© effective production restricting measures are applied to the
primary agricultural product;

(d) such products are designated with the symbol "ST-Annex 5" in
Section IB of Part I of a Member's Schedule annexed to the
Uruguay Round (1994) Protocol as being subject to special
treatment reflecting factors of non-trade concerns, such as food
security and environmental protection; and

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

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

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

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

5. Where the special treatment is not to be continued at the end of the
implementation period, the Member concerned shall implement the provisions
of paragraph 6 below. In such a case, after the end of the implementation
period the minimum access opportunities for the designated products shall be
maintained at the level of 8 per cent of corresponding domestic consumption
in the base period in the Schedule of the Member concerned.

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

Section B

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

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

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

8. Any negotiation on the question of whether there can be a continuation
of the special treatment as set out in paragraph 7 above after the end of
the tenth year following the beginning of the implementation period shall be
initiated and completed within the time-frame of the tenth year itself
following the beginning of the implementation period.

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

10. In the event that special treatment under paragraph 7 above is not to
be continued beyond the tenth year following the beginning of the
implementation period, the products concerned shall be subject to ordinary
customs duties, established on the basis of a tariff equivalent to be
calculated in accordance with the guidelines prescribed in the attachment
hereto, which shall be bound in the Schedule of the Member concerned. In
other respects, the provisions of paragraph 6 above shall apply as modified
by the relevant special and differential treatment accorded to developing
country Members under this Agreement.
Attachment to Annex 5

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


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

(i) shall primarily be established at the four-digit level of the HS;

(ii) shall be established at the six-digit or a more detailed level of
the HS wherever appropriate;

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

2. External prices shall be, in general, actual average c.i.f. unit
values for the importing country. Where average c.i.f. unit values are not
available or appropriate, external prices shall be either:

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

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

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

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

5. The initial tariff equivalents may be adjusted, where necessary, to
take account of differences in quality or variety using an appropriate
coefficient.

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

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

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

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

3. Where domestic consumption is not taken into account, the base trigger
level under (a) below shall apply.

4."Countervailing duties" where referred to in this Article are those
covered by Article VI of the GATT 1994 and Part V of the Agreement on
Subsidies and Countervailing Duties.

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

5 & 6For the purposes of paragraphs 3 and 4 of this Annex, the provision of
foodstuffs at subsidized prices with the objective of meeting food
requirements of urban and rural poor in developing countries on a regular
basis at reasonable prices shall be considered to be in conformity with the
provisions of this paragraph.


AGREEMENT ON THE APPLICATION OF
SANITARY AND PHYTOSANITARY MEASURES

Members,

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

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

Noting that sanitary and phytosanitary measures are often applied on
the basis of bilateral agreements or protocols;

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

Recognizing the important contribution that international standards,
guidelines and recommendations can make in this regard;

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

Recognizing that developing country Members may encounter special
difficulties in complying with the sanitary or phytosanitary measures
of importing Members, and as a consequence, in access to markets, and
also in the formulation and application of sanitary or phytosanitary
measures in their own territories, and desiring to assist them in
their endeavours in this regard;
Desiring therefore to elaborate rules for the application of the
provisions of the GATT 1994 which relate to the use of sanitary or
phytosanitary measures, in particular the provisions of Article
XX(b)[1];

Agree as follows:

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

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

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

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

Basic Rights and Obligations

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

6. Members shall ensure that any sanitary or phytosanitary measure is
applied only to the extent necessary to protect human, animal or plant life
or health, is based on scientific principles and is not maintained without
sufficient scientific evidence, except as provided for in paragraph 22.

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

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

Harmonization

9. To harmonize sanitary and phytosanitary measures on as wide a basis as
possible, Members shall base their sanitary or phytosanitary measures on
international standards, guidelines or recommendations, where they exist,
except as otherwise provided for in this Agreement, and in particular in
paragraph 11.

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

11. Members may introduce or maintain sanitary or phytosanitary measures
which result in a higher level of sanitary or phytosanitary protection than
would be achieved by measures based on the relevant international standards,
guidelines or recommendations, if there is a scientific justification, or as
a consequence of the level of protection a Member determines to be
appropriate in accordance with the relevant provisions of paragraphs 16
through 23.[2] Notwithstanding the above, all measures which result in a
level of sanitary or phytosanitary protection different from that which
would be achieved by measures based on international standards, guidelines
or recommendations shall not be inconsistent with any other provision of
this Agreement.

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

13. The Committee on Sanitary and Phytosanitary Measures, as provided for
in paragraphs 38 and 41, shall develop a procedure to monitor the process of
international harmonization and coordinate efforts in this regard with the
relevant international organizations.

Equivalence

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

15. Members shall, upon request, enter into consultations with the aim of
achieving bilateral and multilateral agreements on recognition of the
equivalence of specified sanitary or phytosanitary measures.
Assessment of Risk and Determination of the Appropriate Level of Sanitary or
Phytosanitary Protection

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

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

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

19. Members should, when determining the appropriate level of sanitary or
phytosanitary protection, take into account the objective of minimizing
negative trade effects.

20. With the objective of achieving consistency in the application of the
concept of appropriate level of sanitary and phytosanitary protection
against risks to human life or health, or to animal and plant life or
health, each Member shall avoid arbitrary or unjustifiable distinctions in
the levels it considers to be appropriate in different situations, if such
distinctions result in discrimination or a disguised restriction on
international trade. Members shall co-operate in the Committee on Sanitary
and Phytosanitary Measures in accordance with paragraphs 38, 39 and 40 of
this Agreement to develop guidelines to further the practical implementation
of this provision. In developing the guidelines the Committee shall take
into account all relevant factors, including the exceptional character of
human health risks to which people voluntarily expose themselves.

21. Without prejudice to paragraph 10, when establishing or maintaining
sanitary or phytosanitary measures to achieve the appropriate level of
sanitary or phytosanitary protection, Members shall ensure that such
measures are not more trade restrictive than required to achieve their
appropriate level of protection, taking into account technical and economic
feasibility.[3]

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

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

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

24. Members shall ensure that their sanitary or phytosanitary measures are
adapted to the sanitary or phytosanitary characteristics of the area -
whether a country, part of a country, or areas of several countries -from
which the product originated and to which the product is destined. In
assessing the sanitary or phytosanitary characteristics of a region, Members
shall take into account, inter alia, the level of prevalence of specific
diseases or pests, the existence of eradication or control programmes, and
appropriate criteria or guidelines which may be developed by the relevant
international organizations.
25. Members shall, in particular, recognize the concepts of pest- or
disease-free areas and areas of low pest or disease prevalence.
Determination of such areas shall be based on factors such as geography,
ecosystems, epidemiological surveillance, and the effectiveness of sanitary
or phytosanitary controls.

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

Transparency

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

Control, Inspection and Approval Procedures

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

Technical Assistance

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

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

Special and Differential Treatment

31. In the preparation and application of sanitary or phytosanitary
measures, Members shall take account of the special needs of developing
country Members, and in particular of the least-developed ones.

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

33. With a view to ensuring that developing country Members are able to
comply with the provisions of this Agreement, the Committee on Sanitary and
Phytosanitary Measures, provided for below, is enabled to grant to such
countries, upon request, specified, time-limited exceptions in whole or in
part from obligations under this Agreement, taking into account their
financial, trade and development needs.

34. Members should encourage and facilitate the active participation of
developing country Members in the relevant international organizations.

Consultations and Dispute Settlement

35. The provisions of Articles XXII and XXIII of the GATT 1994 as
elaborated and applied by the MTO Understanding on Rules and Procedures
Governing the Settlement of Disputes shall apply to consultations and the
settlement of disputes under this Agreement, except as otherwise
specifically provided herein.

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

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

Administration

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

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

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

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

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

43. The Committee may, on the basis of an initiative from one of the
Members, through appropriate channels invite the relevant international
organizations or their subsidiary bodies to examine specific matters with
respect to a particular standard, guideline or recommendation, including the
basis of explanations for non-use given according to paragraph 41 above.

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

Implementation

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

Final Provisions

46. The least developed country Members may delay application of the
provisions of this Agreement for a period of 5 years following the date of
entry into force of the MTO with respect to their sanitary or phytosanitary
measures affecting importation or imported products. Other developing
country Members may delay application of the provisions of this Agreement,
other than paragraphs 23 and 27, for 2 years following the date of entry
into force of the Agreement establishing the MTO with respect to their
existing sanitary or phytosanitary measures affecting importation or
imported products where such application is prevented by a lack of technical
expertise, technical infrastructure or resources.

ANNEX A

DEFINITIONS[4]

For the purposes of this Agreement, the following definitions shall
apply:

1. Sanitary or phytosanitary measure - Any measure applied:

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

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

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

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

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

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

3. International standards, guidelines and recommendations

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

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

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

- for matters not covered by the above organizations, appropriate
standards, guidelines and recommendations promulgated by other
relevant international organizations open for Membership to all
Members, as identified by the Committee on Sanitary and
Phytosanitary Measures.

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

5. Appropriate Level of Sanitary or Phytosanitary Protection - The level
of protection deemed appropriate by the Member establishing a sanitary or
phytosanitary measure to protect human, animal or plant life or health
within its territory.

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

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

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

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

ANNEX B

TRANSPARENCY OF SANITARY AND PHYTOSANITARY REGULATIONS

1. Publication of regulations

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

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

2. Enquiry points

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

(a) any sanitary or phytosanitary regulations adopted or proposed
within its territory;

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

© risk assessment procedures, factors taken into consideration, as
well as the determination of the appropriate level of sanitary
and phytosanitary protection;

(d) the Membership and participation of the Member, or of relevant
bodies within its territory, in international and regional
sanitary and phytosanitary organizations and systems, as well as
in bilateral and multilateral agreements and arrangements within
the scope of this Agreement, and the texts of such agreements and
arrangements.

2.2 Members shall ensure that where copies of documents are requested by
interested Members, they are supplied at the same price (if any), apart from
the cost of delivery, as to the nationals[6] of the Member concerned.

3. Notification procedures

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

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

(b) notify other Members, through the MTO Secretariat, of the
products to be covered by the regulation together with a brief
indication of the objective and rationale of the proposed
regulation. Such notifications shall take place at an early
stage, when amendments can still be introduced and comments taken
into account;

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

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

3.2 However, where urgent problems of health protection arise or threaten
to arise for a Member, that Member may omit such of the steps enumerated in
paragraph 3.1 of this Annex as it finds necessary, provided that the Member:

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

(b) provides upon request to other Members copies of the regulation;

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

3.3 Notifications to the MTO Secretariat shall be in English, French or
Spanish.

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

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

3.6 Members shall designate one single central government authority as
responsible for the implementation, on the national level, of the provisions
concerning notification procedures according to paragraphs 3.1, 3.2, 3.3 and
3.4 of this Annex.

4. General reservations

4.1 Nothing in this Agreement shall be construed as requiring:

(a) the provision of particulars or copies of drafts or the
publication of texts other than in the language of the Member
except as stated in paragraph 3.4 of this Annex; or

(b) Members to disclose confidential information which would impede
enforcement of sanitary or phytosanitary legislation or which
would prejudice the legitimate commercial interests of particular
enterprises.
ANNEX C

CONTROL, INSPECTION AND APPROVAL PROCEDURES[7]

1. Members shall ensure, with respect to any procedure to check and
ensure the fulfilment of sanitary or phytosanitary measures, that:

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

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

© information requirements are limited to what is necessary for
appropriate control, inspection and approval procedures,
including for approval of the use of additives or for the
establishment of tolerances;

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

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

(f) any fees imposed for the procedures on imported products are
equitable in relation to any fees charged on like domestic
products or products originating in any other Member and should
be no higher than the actual cost of the service;

(g) the same criteria should be used in the siting of facilities used
in the procedures and the selection of samples of imported
products as for domestic products so as to minimize the
inconvenience to applicants, importers, exporters or their
agents;

(h) whenever specifications of a product are changed subsequent to
its control and inspection in light of the applicable
regulations, the procedure for the modified product is limited to
what is necessary to determine whether adequate confidence exists
that the product still meets the regulations concerned; and

(i) a procedure exists to review complaints concerning the operation
of such procedures and to take corrective action when a complaint
is justified.

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

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

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

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

2. For the purposes of paragraph 11, there is a scientific justification if,
on the basis of an examination and evaluation of available scientific
information in conformity with the relevant provisions of this Agreement, a
Member determines that the relevant international standards, guidelines or
recommendations are not sufficient to achieve its appropriate level of
protection.

3. For purposes of paragraph 21, a measure is not more trade restrictive
than required unless there is another measure, reasonably available taking
into account technical and economic feasibility, that achieves the
appropriate level of protection and is significantly less restrictive to
trade.

4. For the purpose of these definitions "animal" includes fish and wild
fauna; "plant" includes forests and wild flora; "pests" include weeds;
and "contaminants" include pesticide and veterinary drug residues and
extraneous matter.

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

6. When "nationals" are referred to in this Agreement, they shall be deemed,
in the case of a separate customs territory Member of the MTO, to mean
persons, natural or legal, who are domiciled or who have a real and
effective commercial establishment in that customs territory.

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


AGREEMENT ON TEXTILES AND CLOTHING

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

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

Recalling further that it was agreed that special treatment should be
accorded to the least-developed country Members;

Members hereby agree as follows:

Article 1

1. This Agreement sets out provisions to be applied by Members during a
transition period for the integration of the textiles and clothing
sector into the GATT 1994.
2. Members agree to use the provisions of paragraph 18 of Article 2 and
paragraph 6(b) of Article 6 of this Agreement in such a way as to
permit meaningful increases in access possibilities for small
suppliers and the development of commercially significant trading
opportunities for new entrants in the field of textiles and clothing
trade.[1]

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

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

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

6. Unless otherwise provided in this Agreement, its provisions shall not
affect the rights and obligations of Members under the provisions of
the Agreement Establishing the MTO and the multilateral trade
agreements annexed thereto.

7. The textile and clothing products to which this Agreement applies are
set out in the Annex to this Agreement (hereafter referred to as the
Annex).

Article 2

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

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

3. When the twelve-month period of restrictions to be notified under
paragraph 1 above does not coincide with the 12-month period
immediately preceding the entry into force of this Agreement, the
Members concerned should mutually agree on arrangements to bring the
period of restrictions into line with the agreement year[2], and to
establish notional base levels of such restrictions in order to
implement the provisions of this Article. Concerned Members agree to
enter consultations promptly upon request with a view to reaching such
mutual agreement. Any such arrangements shall take into account,
inter alia, seasonal patterns of shipments in recent years. The
results of these consultations shall be notified to the TMB which
shall make such recommendations as it deems appropriate to the Members
concerned.

4. The restrictions notified under paragraph 1 above shall be deemed to
constitute the totality of such restrictions applied by the respective
Members on the day before the entry into force of this Agreement. No
new restrictions in terms of products or Members shall be introduced
except under the provisions of this Agreement or relevant GATT 1994
provisions.[3] Restrictions not notified within 60 days of the entry
into force of this Agreement shall be terminated forthwith.

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

6. On the date of entry into force of this Agreement, each Member shall
integrate into GATT 1994 products which, in 1990, accounted for not
less than 16 per cent of the total volume of imports in 1990 of the
products in the Annex, in terms of HS lines or categories. The
products to be integrated shall encompass products from each of the
following four groups: tops and yarns, fabrics, made-up textile
products, and clothing.

7. Full details of the actions to be taken pursuant to paragraph 6 above
shall be notified by the Members concerned according to the following:

- Members maintaining restrictions falling under paragraph 1 above
undertake, notwithstanding the date of the entry into force of
this Agreement, to notify such details to the GATT Secretariat
not later than (1 July 1992).[4] The GATT Secretariat shall
promptly circulate these notifications to the other Members for
information. These notifications will be made available to the
TMB, when established, for the purposes of paragraph 21 below;

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

8. The remaining products, i.e., the products not integrated into GATT
1994 under paragraph 6 above, shall be integrated, in terms of HS
lines or categories, in three stages, as follows:

A. On the first day of the 37th month that this Agreement is in
effect, products which, in 1990, accounted for not less than 17
per cent of the total volume of 1990 imports of the products in
the Annex. The products to be integrated by the Members shall
encompass products from each of the following four groups: tops
and yarns, fabrics, made-up textile products, and clothing.

B. On the first day of the 85th month that this Agreement is in
effect, products which, in 1990, accounted for not less than 18
per cent of the total volume of 1990 imports of the products in
the Annex. The products to be integrated by the Members shall
encompass products from each of the following four groups: tops
and yarns, fabrics, made-up textile products, and clothing.

C. On the first day of the 121st month that the Agreement
Establishing the MTO is in effect, the textiles and clothing
sector shall stand integrated into GATT 1994, all restrictions
under this Agreement having been eliminated.

9. Members which have notified, pursuant to paragraph 1 of Article 6,
their intention not to retain the right to use the provisions of
Article 6 shall, for the purposes of this Agreement, be deemed to have
integrated their textiles and clothing products into the GATT 1994.
Such Members shall, therefore, be exempted from complying with the
provisions of paragraphs 6 to 8 above and 11 below.

10. Nothing in this Agreement shall prevent a Member which has submitted
an integration programme pursuant to paragraph 6 or 8 above from
integrating products into the GATT 1994 earlier than provided for in
such a programme. However, any such integration of products shall
take effect at the beginning of an agreement year, and details shall
be notified to the TMB at least three months prior thereto for
circulation to all Members.

11. The respective programmes of integration, in pursuance of paragraph 8
above, shall be notified in detail to the TMB at least 12 months
before their coming into effect and circulated by the TMB to all
Members.

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

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

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

(i) for Stage 2 (from the 37th to the 84th month that this Agreement
is in effect, inclusive), the growth rate for the respective
restrictions during Stage 1, increased by 25 per cent;

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

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

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

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

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

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

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

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

Article 3

1. Within 60 days following the entry into force of this Agreement,
Members maintaining restrictions[5] on textile and clothing products
(other than restrictions maintained under the MFA and covered by the
provisions of Article 2), whether consistent with GATT 1994 or not,
shall (a) notify them in detail to the TMB, or (b) provide to the TMB
notifications with respect to them which have been submitted to any
other MTO body. The notifications should, wherever applicable,
provide information with respect to any GATT 1994 justification for
the restrictions, including GATT 1994 provisions on which they are
based.

2. All restrictions falling under paragraph 1 above, except those
justified under a GATT 1994 provision, shall be either:

(a) brought into conformity with the GATT 1994 within one year
following the entry into force of this Agreement, and be notified
to the TMB for its information; or

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

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

4. It shall be open to any Member to make reverse notifications to the
TMB, for its information, in regard to the GATT 1994 justification, or
in regard to any restrictions that may not have been notified under
the provisions of this Article. Actions with respect to such
notifications may be pursued by any Member under relevant GATT 1994
provisions or procedures in the appropriate MTO body.

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

Article 4

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

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

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

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

Article 5

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

2. Should any Member believe that this Agreement is being circumvented by
transshipment, re-routing, false declaration concerning country or
place of origin, or falsification of official documents, and that no,
or inadequate, measures are being applied to address or to take action
against such circumvention, that Member should consult with the Member
or Members concerned with a view to seeking a mutually satisfactory
solution. Such consultations should be held promptly, and within 30
days when possible. If a mutually satisfactory solution is not
reached, the matter may be referred by any Member involved to the TMB
for recommendations.

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

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

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

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

Article 6

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

2. Safeguard action may be taken under this Article when, on the basis of
a determination by a Member[6], it is demonstrated that a particular
product is being imported into its territory in such increased
quantities as to cause serious damage, or actual threat thereof, to
the domestic industry producing like and/or directly competitive
products. Serious damage or actual threat thereof must demonstrably
be caused by such increased quantities in total imports of that
product and not by such other factors as technological changes or
changes in consumer preference.

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

4. Any measure invoked pursuant to the provisions of this Article shall
be applied on a Member-by-Member basis. The Member or Members to whom
serious damage, or actual threat thereof, referred to in paragraphs 2
and 3 above, is attributed, shall be determined on the basis of a
sharp and substantial increase in imports, actual or imminent[7], from
such a Member or Members individually, and on the basis of the level
of imports as compared with imports from other sources, market share,
and import and domestic prices at a comparable stage of commercial
transaction; none of these factors, either alone or combined with
other factors, can necessarily give decisive guidance. Such safeguard
measure shall not be applied to the exports of any Member whose
exports of the particular product are already under restraint under
this Agreement.

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

6. In the application of the transitional safeguard, particular account
shall be taken of the interests of exporting Members as set out below:

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

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

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

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

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

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

9. Details of the agreed restraint measure shall be communicated to the
TMB within 60 days from the date of conclusion of the agreement. The
TMB shall determine whether the agreement is justified in accordance
with the provisions of this Article. In order to make its
determination, the TMB shall have available to it the factual data
provided to the Chairman of the TMB, referred to in paragraph 7 above,
as well as any other relevant information provided by the Members
concerned. The TMB may make such recommendations as it deems
appropriate to the Members concerned.

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

11. In highly unusual and critical circumstances, where delay would cause
damage which would be difficult to repair, action under paragraph 10
above may be taken provisionally on the condition that the request for
consultations and notification to the TMB shall be effected within no
more than 5 working days after taking the action. In the case that
consultations do not produce agreement, the TMB shall be notified at
the conclusion of consultations, but in any case no later than 60 days
from the date of the implementation of the action. The TMB shall
promptly conduct an examination of the matter, and make appropriate
recommendations to the Members concerned within 30 days. In the case
that consultations do produce agreement, Members shall notify the TMB
upon conclusion but, in any case, no later than 90 days from the date
of the implementation of the action. The TMB may make such
recommendations as it deems appropriate to the Members concerned.

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

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

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

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

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

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

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

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

Article 7

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

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

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

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

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

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

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

Article 8

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

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

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

4. Members shall afford to each other adequate opportunity for
consultations with respect to any matters affecting the operation of
this Agreement.

5. In the absence of any mutually agreed solution in the bilateral
consultations provided for in this Agreement, the TMB shall, at the
request of either Member, and following a thorough and prompt
consideration of the matter, make recommendations to the Members
concerned.

6. At the request of any Member, the TMB shall review promptly any
particular matter which that Member considers to be detrimental to its
interests under this Agreement and where consultations between it and
the Member or Members concerned have failed to produce a mutually
satisfactory solution. On such matters, the TMB may make such
observations as it deems appropriate to the Members concerned and for
the purposes of the review provided for in paragraph 11 below.

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

8. Whenever the TMB is called upon to make recommendations or findings,
it shall do so, preferably within a period of 30 days, unless a
different time period is specified in this Agreement. All such
recommendations or findings shall be communicated to the Members
directly concerned. All such recommendations or findings shall also
be communicated to the Council for Trade in Goods for its information.

9. The Members shall endeavour to accept in full the recommendations of
the TMB, which shall exercise proper surveillance of the
implementation of such recommendations.

10. If a Member considers itself unable to conform with the
recommendations of the TMB, it shall provide the TMB with the reasons
therefor not later than one month after receipt of such
recommendations. Following thorough consideration of the reasons
given, the TMB shall issue any further recommendations it considers
appropriate forthwith. If, after such further recommendations, the
matter remains unresolved, either Member may bring the matter before
the Dispute Settlement Body and invoke paragraph 2 of Article XXIII of
GATT 1994 and the relevant provisions of the Understanding on Rules
and Procedures Governing the Settlement of Disputes.

11. In order to oversee the implementation of the Agreement, the Council
for Trade in Goods shall conduct a major review before the end of each
stage of the integration process. To assist in this review, the TMB
shall, at least five months before the end of each stage, transmit to
the Council for Trade in Goods a comprehensive report on the
implementation of this Agreement during the stage under review, in
particular in matters with regard to the integration process, the
application of the transitional safeguard mechanism, and relating to
the application of GATT 1994 rules and disciplines as defined in
Articles 2, 3, 6 and 7 of this Agreement, respectively. The TMB's
comprehensive report may include any recommendation as deemed
appropriate by the TMB to the Council for Trade in Goods.

12. In the light of its review the Council for Trade in Goods shall by
consensus take such decisions as it deems appropriate to ensure that
the balance of rights and obligations embodied in this Agreement is
not being impaired. For the resolution of any disputes that may arise
with respect to matters referred to in Article 7 of this Agreement,
the Dispute Settlement Body may authorize, without prejudice to the
final dates set out under Article 9 of this Agreement, an adjustment
to paragraph 14 of Article 2, for the stage subsequent to the review,
with respect to any Member found not to be complying with its
obligations under this Agreement.

Article 9

1. This Agreement and all restrictions thereunder shall stand terminated
on the first day of the 121st month that the Agreement Establishing
the MTO is in effect, on which date the textiles and clothing sector
shall be fully integrated into the GATT 1994. There shall be no
extension of this Agreement.


ANNEX

LIST OF PRODUCTS COVERED BY THIS AGREEMENT

1. This Annex lists textile and clothing products identified by
Harmonised Commodity Description and Coding System (HS) codes at the
six digit level.

2. Actions under the safeguard provisions in Article 6 will be taken on
particular textile and clothing products and not on the basis of the
HS lines per se.


Note:

Actions under the safeguard provisions in Article 6 of this Agreement shall
not apply to:

1. developing Members' exports of handloom fabrics of the cottage
industry, or hand-made cottage industry products made of such handloom
fabrics, or traditional folklore handicraft textile and clothing
products, provided that such products are properly certified under
arrangements established between the Members concerned;

2. historically traded textile products which were internationally traded
in commercially significant quantities prior to 1982, such as bags,
sacks, carpetbacking, cordage, luggage, mats, mattings and carpets
typically made from fibres such as jute, coir, sisal, abaca, maguey
and henequen;

3. products made of pure silk.

For such products, the provisions of Article XIX of the GATT 1994, as
interpreted by the Agreement on Safeguards, shall be applicable.



HS No. Product description

Section 11

Ch. 50 Silk.
5004 00 Silk yarn (other than yarn spun from silk waste) not put up for
retail sale
5005 00 Yarn spun from silk waste, not put up for retail sale
5006 00 Silk yarn&yarn spun from silk waste, put up f retail sale;
silk-worm gut
5007 10 Woven fabrics of noil silk
5007 20 Woven fabrics of silk/silk waste, other than noil silk, 85%/more of
such fibres
5007 90 Woven fabrics of silk, nes

Ch. 51 Wool, fine/coarse animal hair, horsehair yarn & fabric.
5105 10 Carded wool
5105 21 Combed wool in fragments
5105 29 Wool tops and other combed wool, other than combed wool in
fragments
5105 30 Fine animal hair, carded or combed
5106 10 Yarn of carded wool,>/=85% by weight of wool, nt put up for retail
sale
5106 20 Yarn of carded, wool,<85% by weight of wool, not put up for retail
sale
5107 10 Yarn of combed wool,>/=85% by weight of wool, not put up for retail
sale
5107 20 Yarn of combed wool,<85% by weight of wool, not put up for retail
sale
5108 10 Yarn of carded fine animal hair, not put up for retail sale
5108 20 Yarn of combed fine animal hair, not put up for retail sale
5109 10 Yarn of wool/of fine animal hair,>/=85% by weight of such fibres,
put up
5109 90 Yarn of wool/of fine animal hair,<85% by weight of such fibres, put
up
5110 00 Yarn of coarse animal hair or of horsehair
5111 11 Woven fabrics of carded wool/fine animal hair,>/=85% by
weight,</=300 g/m2
5111 19 Woven fabrics of carded wool/fine animal hair,>/=85% by weight,>300
g/m2
5111 20 Woven fabric of carded wool/fine animal hair,>/=85% by wt, mixd w
m-m fi
5111 30 Woven fabric of carded wool/fine animal hair,>/=85% by wt, mixd w
m-m fib
5111 90 Woven fabrics of carded wool/fine animal hair,>/= 85% by weight,
nes
5112 11 Woven fabric of combed wool/fine animal hair,>/=85% by
weight,</=200 g/m2
5112 19 Woven fabrics of combed wool/fine animal hair,>/=85% by weight,>200
g/m2
5112 20 Woven fabrics of combed wool/fine animal hair,<85% by wt, mixd w
m-m fil
5112 30 Woven fabrics of combed wool/fine animal hair,<85% by wt, mixd w
m-m fib
5112 90 Woven fabrics of combed wool/fine animal hair, <85% by weight, nes
5113 00 Woven fabrics of coarse animal hair or of horsehair

Ch. 52 Cotton.
5204 11 Cotton sewing thread >/=85% by weight of cotton, not put up for
retail sale
5204 19 Cotton sewing thread,<85% by weight of cotton, not put up for
retail sale
5204 20 Cotton sewing thread, put up for retail sale
5205 11 Cotton yarn,>/=85%,single, uncombed,>/=714.29 dtex, nt put up
5205 12 Cotton yarn,>/=85%,single, uncombed, 714.29 >dtex>/=232.56, not put
up
5205 13 Cotton yarn,>/=85%,single, uncombed, 232.56>dtex>/=192.31, not put
up
5205 14 Cotton yarn,>/=85%,single, uncombed, 192.31 >dtex>/=125, not put up
5205 15 Cotton yarn,>/=85%,single, uncombed,<125 dtex, nt put up f retail
sale
HS No. Product description

5205 21 Cotton yarn,>/=85%, single, combed,>/=714.29, not put up
5205 22 Cotton yarn,>/=85%,single, combed, 714.29 >dtex>/=232.56, not put
up
5205 23 Cotton yarn,>/=85%, single, combed, 232.56 >dtex>/=192.31, not put
up
5205 24 Cotton yarn,>/=85%, single, combed, 192.31 >dtex>/=125, not put up
5205 25 Cotton yarn,>/=85%,single, combed,<125 dtex, not put up for retail
sale
5205 31 Cotton yarn,>/=85%, multi, uncombed,>/=714.29 dtex, not put up, nes
5205 32 Cotton yarn,>/=85%,multi, uncombed, 714.29 >dtex>/=232.56, not put
up, nes
5205 33 Cotton yarn,>/=85%,multi, uncombed, 232.56 >dtex>/=192.31, not put
up, nes
5205 34 Cotton yarn,>/=85%,multi, uncombed, 192.31 >dtex>/=125, nt put up,
nes
5205 35 Cotton yarn,>/=85%,multi, uncombed, <125 dtex, not put up, nes
5205 41 Cotton yarn,>/=85%, multiple, combed,>/=714.29 dtex, not put up,
nes
5205 42 Cotton yarn,>/=85%,multi, combed, 714.29 >dtex>/=232.56, nt put up,
nes
5205 43 Cotton yarn,>/=85%,multi, combed, 232.56 >dtex>/=192.31, nt put up,
nes
5205 44 Cotton yarn,>/=85%,multiple, combed, 192.31 >dtex>/=125, not put
up, nes
5205 45 Cotton yarn,>/=85%, multiple, combed, <125 dtex, not put up, nes
5206 11 Cotton yarn, <85%, single, uncombed,>/=714.29, not put up
5206 12 Cotton yarn, <85%, single, uncombed, 714.29 >dtex>/=232.56, nt put
up
5206 13 Cotton yarn, <85%, single, uncombed, 232.56 >dtex>/=192.31, not put
up
5206 14 Cotton yarn, <85%, single, uncombed, 192.31 >dtex>/=125, nt put up
5206 15 Cotton yarn,<85%,single, uncombed,<125 dtex, not put up for retail
sale
5206 21 Cotton yarn, <85%, single, combed,>/=714.29 dtex, nt put up
5206 22 Cotton yarn, <85%, single, combed, 714.29 >dtex>/=232.56, not put
up
5206 23 Cotton yarn, <85%, single, combed, 232.56 >dtex>/=192.31, not put
up
5206 24 Cotton yarn, <85%, single, combed, 192.31 >dtex>/=125, not put up
5206 25 Cotton yarn,<85%,single, combed,<125 dtex, not put up for retail
sale
5206 31 Cotton yarn, <85%, multiple, uncombed,>/=714.29, not put up, nes
5206 32 Cotton yarn,<85%,multiple, uncombed, 714.29 >dtex>/=232.56, nt put
up, nes
5206 33 Cotton yarn,<85%,multiple, uncombed, 232.56 >dex>/=192.31, nt put
up, nes
5206 34 Cotton yarn,<85%,multiple, uncombed, 192.31 >dtex>/=125, nt put up,
nes
5206 35 Cotton yarn, <85%, multiple, uncombed, <125 dtex, not put up, nes
5206 41 Cotton yarn, <85%, multiple, combed,>/=714.29, nt put up, nes
5206 42 Cotton yarn,<85%,multiple, combed, 714.29 >dtex>/=232.56, nt put
up, nes
5206 43 Cotton yarn,<85%,multiple, combed, 232.56 >dtex>/=192.31, nt put
up, nes
5206 44 Cotton yarn,<85%,multiple, combed, 192.31 >dtex>/=125, nt put up,
nes
5206 45 Cotton yarn, <85%, multiple, combed, <125 dtex, not put up, nes
5207 10 Cotton yarn (other than sewing thread)>/=85% by weight of cotton,
put up
5207 90 Cotton yarn (other than sewg thread) <85% by wt of cotton, put up f
retl sale
5208 11 Plain weave cotton fabric,>/=85%, not more than 100 g/m2,
unbleached
5208 12 Plain weave cotton fabric,>/=85%, >100 g/m2 to 200 g/m2, unbleached
5208 13 Twill weave cotton fabric,>/=85%, not more than 200 g/m2,
unbleached
5208 19 Woven fabrics of cotton,>/=85%, not more than 200 g/m2, unbleached,
nes
5208 21 Plain weave cotton fabrics,>/=85%, not more than 100 g/m2, bleached
5208 22 Plain weave cotton fabric,>/=85%, >100 g/m2 to 200 g/m2, bleached
5208 23 Twill weave cotton fabric,>/=85%, not more than 200 g/m2, bleached
5208 29 Woven fabrics of cotton,>/=85%, nt more than 200 g/m2, bleached,
nes
5208 31 Plain weave cotton fabric,>/=85%, not more than 100 g/m2, dyed
5208 32 Plain weave cotton fabric,>/=85%,>100g/m= to 200g/m=, dyed
5208 33 Twill weave cotton fabrics,>/=85%, not more than 200 g/m2, dyed
5208 39 Woven fabrics of cotton,>/=85%, not more than 200 g/m2, dyed, nes
5208 41 Plain weave cotton fabric,>/=85%, not more than 100 g/m2, yarn dyed

HS No. Product description

5208 42 Plain weave cotton fabrics,>/=85%, >100 g/m2 to 200 g/m2, yarn dyed
5208 43 Twill weave cotton fabric,>/=85%, not more than 200 g/m2, yarn dyed
5208 49 Woven fabrics of cotton,>/=85%,nt more than 200 g/m2, yarn dyed,
nes
5208 51 Plain weave cotton fabrics,>/=85%, not more than 100 g/m2, printed
5208 52 Plain weave cotton fabric,>/=85%, >100 g/m2 to 200 g/m2, printed
5208 53 Twill weave cotton fabric,>/=85%, not more than 200 g/m2, printed
5208 59 Woven fabrics of cotton,>/=85%, not more than 200 g/m2, printed,
nes
5209 11 Plain weave cotton fabric,>/=85%, more than 200 g/m2, unbleached
5209 12 Twill weave cotton fabric,>/=85%, more than 200 g/m2, unbleached
5209 19 Woven fabrics of cotton,>/=85%,more than 200 g/m2, unbleached, nes
5209 21 Plain weave cotton fabric,>/=85%, more than 200 g/m2, bleached
5209 22 Twill weave cotton fabrics,>/=85%, more than 200 g/m2, bleached
5209 29 Woven fabrics of cotton,>/=85%, more than 200 g/m2, bleached, nes
5209 31 Plain weave cotton fabrics,>/=85%, more than 200 g/m2, dyed
5209 32 Twill weave cotton fabrics,>/=85%, more than 200 g/m2, dyed
5209 39 Woven fabrics of cotton,>/=85%, more than 200 g/m2, dyed, nes
5209 41 Plain weave cotton fabrics,>/=85%, more than 200 g/m2, yarn dyed
5209 42 Denim fabrics of cotton,>/=85%, more than 200 g/m2
5209 43 Twill weave cotton fab, other than denim,>/=85%,more than 200 g/m2,
yarn dyed
5209 49 Woven fabrics of cotton,>/=85%, more than 200 g/m2, yarn dyed, nes
5209 51 Plain weave cotton fabrics,>/=85%, more than 200 g/m2, printed
5209 52 Twill weave cotton fabrics,>/=85%, more than 200 g/m2, printed
5209 59 Woven fabrics of cotton,>/=85%, more than 200 g/m2, printed, nes
5210 11 Plain weave cotton fab,<85% mixd w m-m fib, not more than 200 g/m2,
unbl
5210 12 Twill weave cotton fab,<85% mixd w m-m fib, not more than 200 g/m2,
unbl
5210 19 Woven fab of cotton,<85% mixd with m-m fib,</=200 g/m2, unbl, nes
5210 21 Plain weave cotton fab,<85% mixd w m-m fib, not more than 200 g/m2,
bl
5210 22 Twill weave cotton fab,<85% mixd w m-m fib, not more than 200 g/m2,
bl
5210 29 Woven fabrics of cotton,<85% mixd with m-m fib,</=200 g/m2, bl, nes
5210 31 Plain weave cotton fab,<85% mixd w m-m fib, not more than 200 g/m2,
dyd
5210 32 Twill weave cotton fab,<85% mixd w m-m fib, not more than 200 g/m2,
dyd
5210 39 Woven fabrics of cotton,<85% mixd with m-m fib,</=200 g/m2, dyed,
nes
5210 41 Plain weave cotton fab,<85% mixd w m-m fib, nt mor thn 200g/m2,
yarn dyd
5210 42 Twill weave cotton fab,<85% mixd w m-m fib, nt mor thn 200g/m2,
yarn dyd
5210 49 Woven fabrics of cotton,<85% mixed w m-m fib,</=200g/m2, yarn dyed,
nes
5210 51 Plain weave cotton fab,<85% mixd w m-m fib, nt more thn 200 g/m2,
printd
5210 52 Twill weave cotton fab,<85% mixd w m-m fib, nt more thn 200g/m2,
printd
5210 59 Woven fabrics of cotton,<85% mixed with m-m fib,</=200g/m2,
printed, nes
5211 11 Plain weave cotton fab,<85% mixd w m-m fib, more thn 200 g/m2,
unbleachd
5211 12 Twill weave cotton fab,<85% mixed with m-m fib, more than 200 g/m2,
unbl
5211 19 Woven fabrics of cotton,<85% mixd w m-m fib, more thn 200g/m2,
unbl, nes
5211 21 Plain weave cotton fab,<85% mixd w m-m fib, more than 200 g/m2,
bleachd
5211 22 Twill weave cotton fab,<85% mixd w m-m fib, more than 200 g/m2,
bleachd
5211 29 Woven fabrics of cotton,<85% mixd w m-m fib, more than 200 g/m2,
bl, nes
5211 31 Plain weave cotton fab,<85% mixed with m-m fib, more than 200 g/m2,
dyed
5211 32 Twill weave cotton fab,<85% mixed with m-m fib, more than 200 g/m2,
dyed
5211 39 Woven fabrics of cotton,<85% mixd w m-m fib, more than 200 g/m2,
dyd, nes
5211 41 Plain weave cotton fab,<85% mixd w m-m fib, more than 200 g/m2,
yarn dyd

HS No. Product description

5211 42 Denim fabrics of cotton, <85% mixed with m-m fib, more than 200
g/m2
5211 43 Twill weave cotton fab, other than denim,<85% mixd w m-m
fib,>200g/m2, yarn dyd
5211 49 Woven fabrics of cotton,<85% mixd with m-m fib,>200 g/m2, yarn
dyed, nes
5211 51 Plain weave cotton fab,<85% mixd w m-m fib, more than 200 g/m2,
printd
5211 52 Twill weave cotton fab,<85% mixd w m-m fib, more than 200 g/m2,
printd
5211 59 Woven fabrics of cotton,<85% mixd w m-m fib, mor thn 200g/m2,
printd, nes
5212 11 Woven fabrics of cotton, weighing not more than 200 g/m2,
unbleached, nes
5212 12 Woven fabrics of cotton, weighing not more than 200 g/m2, bleached,
nes
5212 13 Woven fabrics of cotton, weighing not more than 200 g/m2, dyed, nes
5212 14 Woven fabrics of cotton,</=200g/m2, of yarns of different colours,
nes
5212 15 Woven fabrics of cotton, weighing not more than 200 g/m2, printed,
nes
5212 21 Woven fabrics of cotton, weighing more than 200 g/m2, unbleached,
nes
5212 22 Woven fabrics of cotton, weighing more than 200 g/m2, bleached, nes
5212 23 Woven fabrics of cotton, weighing more than 200 g/m2, dyed, nes
5212 24 Woven fabrics of cotton, >200 g/m2, of yarns of different colours,
nes
5212 25 Woven fabrics of cotton, weighing more than 200 g/m2, printed, nes

Ch. 53 Other vegetable textile fibres; paper yarn & woven fab.
5306 10 Flax yarn, single
5306 20 Flax yarn, multile (folded) or cabled
5307 10 Yarn of jute or of other textile bast fibres, single
5307 20 Yarn of jute or of oth textile bast fibres, multiple (folded) or
cabled
5308 20 True hemp yarn
5308 90 Yarn of other vegetable textile fibres
5309 11 Woven fabrics, containg 85% or more by weight of flax, unbleached
or bl
5309 19 Woven fabrics, containing 85% or more by weight of flax, other than
unbl or bl
5309 21 Woven fabrics of flax, containg <85% by weight of flax, unbleached
or bl
5309 29 Woven fabrics of flax, containing <85% by weight of flax, other
than unbl or bl
5310 10 Woven fabrics of jute or of other textile bast fibres, unbleached
5310 90 Woven fabrics of jute or of other textile bast fibres, other than
unbleached
5311 00 Woven fabrics of oth vegetable textile fibres; woven fab of paper
yarn

Ch. 54 Man-made filaments.
5401 10 Sewing thread of synthetic filaments
5401 20 Sewing thread of artificial filaments
5402 10 High tenacity yarn (other than sewg thread),nylon/oth polyamides
fi, nt put up
5402 20 High tenacity yarn (other than sewg thread),of polyester filaments,
not put up
5402 31 Texturd yarn nes, of nylon/oth polyamides fi,</=50tex/s.y.,not put
up
5402 32 Texturd yarn nes, of nylon/oth polyamides fi,>50 tex/s.y.,not put
up
5402 33 Textured yarn nes, of polyester filaments, not put up for retail
sale
5402 39 Textured yarn of synthetic filaments, nes, not put up
5402 41 Yarn of nylon or other polyamides fi, single, untwisted, nes, not
put up
5402 42 Yarn of polyester filaments, partially oriented, single, nes, not
put up
5402 43 Yarn of polyester filaments, single, untwisted, nes, not put up
5402 49 Yarn of synthetic filaments, single, untwisted, nes, not put up
5402 51 Yarn of nylon or other polyamides fi, single, >50 turns/m, not put
up
5402 52 Yarn of polyester filaments, single, >50 turns per metre, not put
up
5402 59 Yarn of synthetic filaments, single,>50 turns per metre, nes, not
put up

HS No. Product description

5402 61 Yarn of nylon or other polyamides fi, multiple, nes, not put up
5402 62 Yarn of polyester filaments, multiple, nes, not put up
5402 69 Yarn of synthetic filaments, multiple, nes, not put up
5403 10 High tenacity yarn (other than sewg thread),of viscose rayon
filamt, nt put up
5403 20 Textured yarn nes, of artificial filaments, not put up for retail
sale
5403 31 Yarn of viscose rayon filaments, single, untwisted, nes, not put up
5403 32 Yarn of viscose rayon filaments, single,>120 turns per m, nes, nt
put up
5403 33 Yarn of cellulose acetate filaments, single, nes, not put up
5403 39 Yarn of artificial filaments, single, nes, not put up
5403 41 Yarn of viscose rayon filaments, multiple, nes, not put up
5403 42 Yarn of cellulose acetate filaments, multiple, nes, not put up
5403 49 Yarn of artificial filaments, multiple, nes, not put up
5404 10 Synthetic mono,>/=67dtex, no cross sectional dimension exceeds 1 mm
5404 90 Strip&the like of syn tex material of an apparent width nt exceedg
5mm
5405 00 Artificial mono, 67 dtex, cross-sect >1mm; strip of arti tex mat w
</=5mm
5406 10 Yarn of synthetic filament (other than sewing thread), put up for
retail sale
5406 20 Yarn of artificial filament (other than sewing thread),put up for
retail sale
5407 10 Woven fab of high tenacity fi yarns of nylon oth
polyamides/polyesters
5407 20 Woven fab obtaind from strip/the like of synthetic textile
materials
5407 30 Fabrics specif in Note 9 Section XI (layers of parallel syn tex
yarn)
5407 41 Woven fab,>/=85% of nylon/other polyamides filaments, unbl or bl,
nes
5407 42 Woven fabrics,>/=85% of nylon/other polyamides filaments, dyed, nes
5407 43 Woven fab,>/=85% of nylon/other polyamides filaments, yarn dyed,
nes
5407 44 Woven fabrics,>/=85% of nylon/other polyamides filaments, printed,
nes
5407 51 Woven fabrics,>/=85% of textured polyester filaments, unbl or bl,
nes
5407 52 Woven fabrics,>/=85% of textured polyester filaments, dyed, nes
5407 53 Woven fabrics,>/=85% of textured polyester filaments, yarn dyed,
nes
5407 54 Woven fabrics,>/=85% of textured polyester filaments, printed, nes
5407 60 Woven fabrics,>/=85% of non-textured polyester filaments, nes
5407 71 Woven fab,>/=85% of synthetic filaments, unbleached or bleached,
nes
5407 72 Woven fabrics,>/=85% of synthetic filaments, dyed, nes
5407 73 Woven fabrics,>/=85% of synthetic filaments, yarn dyed, nes
5407 74 Woven fabrics,>/=85% of synthetic filaments, printed, nes
5407 81 Woven fabrics of synthetic filaments,<85% mixd w cotton, unbl o bl,
nes
5407 82 Woven fabrics of synthetic filaments,<85% mixed with cotton, dyed,
nes
5407 83 Woven fabrics of synthetic filaments,<85% mixd w cotton, yarn dyd,
nes
5407 84 Woven fabrics of synthetic filaments,<85% mixd with cotton,
printed, nes
5407 91 Woven fabrics of synthetic filaments, unbleached or bleached, nes
5407 92 Woven fabrics of synthetic filaments, dyed, nes
5407 93 Woven fabrics of synthetic filaments, yarn dyed, nes
5407 94 Woven fabrics of synthetic filaments, printed, nes
5408 10 Woven fabrics of high tenacity filament yarns of viscose rayon
5408 21 Woven fab,>/=85% of artificial fi o strip of art tex mat, unbl/bl,
nes
5408 22 Woven fab,>/=85% of artificial fi or strip of art tex mat, dyed,
nes
5408 23 Woven fab,>/=85% of artificial fi or strip of art tex mat, y dyed,
nes
5408 24 Woven fab,>/=85% of artificial fi or strip of art tex mat, printd,
nes
5408 31 Woven fabrics of artificial filaments, unbleached or bleached, nes
5408 32 Woven fabrics of artificial filaments, dyed, nes

HS No. Product description

5408 33 Woven fabrics of artificial filaments, yarn dyed, nes
5408 34 Woven fabrics of artificial filaments, printed, nes

Ch. 55 Man-made staple fibres.
5501 10 Filament tow of nylon or other polyamides
5501 20 Filament tow of polyesters
5501 30 Filament tow of acrylic or modacrylic
5501 90 Synthetic filament tow, nes
5502 00 Artificial filament tow
5503 10 Staple fibres of nylon or other polyamides, not carded or combed
5503 20 Staple fibres of polyesters, not carded or combed
5503 30 Staple fibres of acrylic or modacrylic, not carded or combed
5503 40 Staple fibres of polypropylene, not carded or combed
5503 90 Synthetic staple fibres, not carded or combed, nes
5504 10 Staple fibres of viscose, not carded or combed
5504 90 Artificial staple fibres, other than viscose, not carded or combed
5505 10 Waste of synthetic fibres
5505 20 Waste of artificial fibres
5506 10 Staple fibres of nylon or other polyamides, carded or combed
5506 20 Staple fibres of polyesters, carded or combed
5506 30 Staple fibres of acrylic or modacrylic, carded or combed
5506 90 Synthetic staple fibres, carded or combed, nes
5507 00 Artificial staple fibres, carded or combed
5508 10 Sewing thread of synthetic staple fibres
5508 20 Sewing thread of artificial staple fibres
5509 11 Yarn,>/=85% nylon or other polyamides staple fibres, single, not
put up
5509 12 Yarn,>/=85% nylon o oth polyamides staple fibres, multi, not put
up, nes
5509 21 Yarn,>/=85% of polyester staple fibres, single, not put up
5509 22 Yarn,>/=85% of polyester staple fibres, multiple, not put up, nes
5509 31 Yarn,>/=85% of acrylic or modacrylic staple fibres, single, not put
up
5509 32 Yarn,>/=85% acrylic/modacrylic staple fibres, multiple, not put up,
nes
5509 41 Yarn,>/=85% of other synthetic staple fibres, single, not put up
5509 42 Yarn,>/=85% of other synthetic staple fibres, multiple, not put up,
nes
5509 51 Yarn of polyester staple fibres mixd w/ arti staple fib, not put
up, nes
5509 52 Yarn of polyester staple fib mixd w wool/fine animal hair, nt put
up, nes
5509 53 Yarn of polyester staple fibres mixed with cotton, not put up, nes
5509 59 Yarn of polyester staple fibres, not put up, nes
5509 61 Yarn of acrylic staple fib mixd w wool/fine animal hair, not put
up, nes
5509 62 Yarn of acrylic staple fibres mixed with cotton, not put up, nes
5509 69 Yarn of acrylic staple fibres, not put up, nes
5509 91 Yarn of oth synthetic staple fibres mixed w/wool/fine animal hair,
nes
5509 92 Yarn of other synthetic staple fibres mixed with cotton, not put
up, nes
5509 99 Yarn of other synthetic staple fibres, not put up, nes
5510 11 Yarn,>/=85% of artificial staple fibres, single, not put up
5510 12 Yarn,>/=85% of artificial staple fibres, multiple, not put up, nes
5510 20 Yarn of artificl staple fib mixd w wool/fine animal hair, not put
up, nes
5510 30 Yarn of artificial staple fibres mixed with cotton, not put up, nes
5510 90 Yarn of artificial staple fibres, not put up, nes
5511 10 Yarn,>/=85% of synthetic staple fibres, other than sewing thread,
put up

HS No. Product description

5511 20 Yarn, <85% of synthetic staple fibres, put up for retail sale, nes
5511 30 Yarn of artificial fibres (other than sewing thread), put up for
retail sale
5512 11 Woven fabrics, containing>/=85% of polyester staple fibres, unbl or
bl
5512 19 Woven fabrics, containg>/=85% of polyester staple fibres, other
than unbl or bl
5512 21 Woven fabrics, containg>/=85% of acrylic staple fibres, unbleached
or bl
5512 29 Woven fabrics, containing>/=85% of acrylic staple fibres, other
than unbl or bl
5512 91 Woven fabrics, containing>/=85% of oth synthetic staple fibres,
unbl/bl
5512 99 Woven fabrics, containg>/=85% of other synthetic staple fib, other
than unbl/bl
5513 11 Plain weave polyest stapl fib fab,<85%,mixd w/cottn,</=170g/m2,
unbl/bl
5513 12 Twill weave polyest stapl fib fab,<85%,mixd w/cottn,</=170g/m2,
unbl/bl
5513 13 Woven fab of polyest staple fib,<85% mixd w/cot,</=170g/m2,
unbl/bl, nes
5513 19 Woven fabrics of oth syn staple fib,<85%,mixd w/cot,</=170g/m2,
unbl/bl
5513 21 Plain weave polyester staple fib fab,<85%,mixd w/cotton,</=170g/m2,
dyd
5513 22 Twill weave polyest staple fib fab,<85%,mixd w/cotton,</=170g/m2,
dyd
5513 23 Woven fab of polyester staple fib,<85%,mixd w/cot,</=170 g/m2, dyd,
nes
5513 29 Woven fabrics of oth syn staple fib,<85% mixd w/cotton,</=170g/m2,
dyed
5513 31 Plain weave polyest stapl fib fab,<85% mixd w/cot,</=170g/m2, yarn
dyd
5513 32 Twill weave polyest stapl fib fab,<85% mixd w/cot,</=170g/m2, yarn
dyd
5513 33 Woven fab of polyest staple fib,<85% mixd w/cot,</=170 g/m2, dyd
nes
5513 39 Woven fab of oth syn staple fib,<85% mixd w/cot,</=170g/m2, yarn
dyd
5513 41 Plain weave polyester stapl fib fab,<85%,mixd w/cot,</=170g/m2,
printd
5513 42 Twill weave polyest staple fib fab,<85%,mixd w/cot,<=/170g/m2,
printd
5513 43 Woven fab of polyester staple fib,<85%,mixd w/cot,</=170g/m2, ptd,
nes
5513 49 Woven fab of oth syn staple fib,<85%,mixed w/cot,</=170g/m2,
printed
5514 11 Plain weave polyest staple fib fab,<85%,mixd w/cotton,>170g/m2,
unbl/bl
5514 12 Twill weave polyest stapl fib fab,<85%,mixd w/cotton,>170g/m2,
unbl/bl
5514 13 Woven fab of polyester staple fib,<85% mixd w/cot,>170g/m2,
unbl/bl, nes
5514 19 Woven fabrics of oth syn staple fib,<85%,mixed w/cot,>170 g/m2,
unbl/bl
5514 21 Plain weave polyester staple fibre fab,<85%,mixd w/cotton,>170g/m2,
dyd
5514 22 Twill weave polyester staple fibre fab,<85%,mixd w/cotton,>170g/m2,
dyd
5514 23 Woven fabrics of polyester staple fib,<85%,mixed w/cot,>170 g/m2,
dyed
5514 29 Woven fabrics of oth synthetic staple fib,<85%,mixd w/cot,>170g/m2,
dyd
5514 31 Plain weave polyester staple fib fab,<85% mixd w/cot,>170g/m2, yarn
dyd
5514 32 Twill weave polyester staple fib fab,<85% mixd w/cot,>170g/m2, yarn
dyd
5514 33 Woven fab of polyester stapl fib,<85% mixd w/cot,>170g/m2, yarn dyd
nes
5514 39 Woven fabrics of oth syn staple fib,<85% mixd w/cot,>170 g/m2, yarn
dyd
5514 41 Plain weave polyester staple fibre fab,<85%,mixd w/cot,>170g/m2,
printd
5514 42 Twill weave polyester staple fibre fab,<85%,mixd w/cot,>170g/m2,
printd
5514 43 Woven fab of polyester staple fibres <85%,mixd w/cot,>170g/m2, ptd,
nes
5514 49 Woven fabrics of oth syn staple fib,<85%,mixed w/cot,>170 g/m2,
printed
5515 11 Woven fab of polyester staple fib mixd w viscose rayon staple fib,
nes
5515 12 Woven fabrics of polyester staple fibres mixd w man-made filaments,
nes
5515 13 Woven fab of polyester staple fibres mixd w/wool/fine animal hair,
nes
5515 19 Woven fabrics of polyester staple fibres, nes
5515 21 Woven fabrics of acrylic staple fibres, mixd w man-made filaments,
nes
5515 22 Woven fab of acrylic staple fibres, mixd w/wool/fine animal hair,
nes
5515 29 Woven fabrics of acrylic or modacrylic staple fibres, nes
5515 91 Woven fabrics of oth syn staple fib, mixed with man-made filaments,
nes

HS No. Product description

5515 92 Woven fabrics of oth syn staple fib, mixd w/wool o fine animal
hair, nes
5515 99 Woven fabrics of synthetic staple fibres, nes
5516 11 Woven fabrics, containg>/=85% of artificial staple fibres,
unbleached/bl
5516 12 Woven fabrics, containing>/=85% of artificial staple fibres, dyed
5516 13 Woven fabrics, containing>/=85% of artificial staple fib, yarn dyed
5516 14 Woven fabrics, containing>/=85% of artificial staple fibres,
printed
5516 21 Woven fabrics of artificial staple fib,<85%,mixd w man-made fi,
unbl/bl
5516 22 Woven fabrics of artificial staple fib,<85%,mixd with man-made fi,
dyd
5516 23 Woven fabrics of artificial staple fib,<85%,mixd with m-m fi, yarn
dyd
5516 24 Woven fabrics of artificial staple fib,<85%,mixd w man-made fi,
printd
5516 31 Woven fab of arti staple fib,<85% mixd w/wool/fine animal hair,
unbl/bl
5516 32 Woven fabrics of arti staple fib,<85% mixd w/wool/fine animal hair,
dyd
5516 33 Woven fab of arti staple fib,<85% mixd w/wool/fine animal hair,
yarn dyd
5516 34 Woven fab of arti staple fib,<85% mixd w/wool/fine animal hair,
printd
5516 41 Woven fabrics of artificial staple fib,<85% mixd with cotton, unbl
o bl
5516 42 Woven fabrics of artificial staple fib, <85% mixed with cotton,
dyed
5516 43 Woven fabrics of artificial staple fib,<85% mixd with cotton, yarn
dyd
5516 44 Woven fabrics of artificial staple fib,<85% mixed with cotton,
printed
5516 91 Woven fabrics of artificial staple fibres, unbleached or bleached,
nes
5516 92 Woven fabrics of artificial staple fibres, dyed, nes
5516 93 Woven fabrics of artificial staple fibres, yarn dyed, nes
5516 94 Woven fabrics of artificial staple fibres, printed, nes

Ch. 56 Wadding, felt & nonwoven; yarns; twine, cordage, etc.
5601 10 Sanitary articles of waddg of textile mat i.e. sanitary towels,
tampons
5601 21 Wadding of cotton and articles thereof, other than sanitary
articles
5601 22 Wadding of man-made fibres and articles thereof, other than
sanitary articles
5601 29 Waddg of oth textile materials&articles thereof, other than
sanitary articles
5601 30 Textile flock and dust and mill neps
5602 10 Needleloom felt and stitch-bonded fibre fabrics
5602 21 Felt other than needleloom, of wool or fine animal hair, not
impreg, ctd, cov etc
5602 29 Felt other than needleloom, of other textile materials, not impreg,
ctd, cov etc
5602 90 Felt of textile materials, nes
5603 00 Nonwovens, whether or not impregnated, coated, covered or laminated
5604 10 Rubber thread and cord, textile covered
5604 20 High tenacity yarn of polyest, nylon oth polyamid, viscose rayon,
ctd etc
5604 90 Textile yarn, strips&the like, impreg ctd/cov with rubber o
plastics, nes
5605 00 Metallisd yarn, beg textile yarn combind w metal thread,
strip/powder
5606 00 Gimped yarn nes; chenille yarn; loop wale-yarn
5607 10 Twine, cordage, ropes and cables, of jute or other textile bast
fibres
5607 21 Binder o baler twine, of sisal o oth textile fibres of the genus
Agave
5607 29 Twine nes, cordage, ropes and cables, of sisal textile fibres
5607 30 Twine, cordage, ropes and cables, of abaca or other hard (leaf)
fibres
5607 41 Binder or baler twine, of polyethylene or polypropylene
5607 49 Twine nes, cordage, ropes and cables, of polyethylene or
polypropylene
5607 50 Twine, cordage, ropes and cables, of other synthetic fibres
5607 90 Twine, cordage, ropes and cables, of other materials
5608 11 Made up fishing nets, of man-made textile materials
5608 19 Knottd nettg of twine/cordage/rope, and oth made up nets of m-m tex
mat
5608 90 Knottd nettg of twine/cordage/rope, nes, and made up nets of oth
tex mat
HS No. Product description

5609 00 Articles of yarn, strip, twine, cordage, rope and cables, nes

Ch. 57 Carpets and other textile floor coverings.
5701 10 Carpets of wool or fine animal hair, knotted
5701 90 Carpets of other textile materials, knotted
5702 10 Kelem, Schumacks, Karamanie and similar textile hand-woven rugs
5702 20 Floor coverings of coconut fibres (coir)
5702 31 Carpets of wool/fine animl hair, of wovn pile constructn, nt made
up nes
5702 32 Carpets of man-made textile mat, of wovn pile construct, nt made
up, nes
5702 39 Carpets of oth textile mat, of woven pile constructn, nt made up,
nes
5702 41 Carpets of wool/fine animal hair, of wovn pile construction, made
up, nes
5702 42 Carpets of man-made textile mat, of woven pile construction, made
up, nes
5702 49 Carpets of oth textile materials, of wovn pile construction, made
up, nes
5702 51 Carpets of wool or fine animal hair, woven, not made up, nes
5702 52 Carpets of man-made textile materials, woven, not made up, nes
5702 59 Carpets of other textile materials, woven, not made up, nes
5702 91 Carpets of wool or fine animal hair, woven, made up, nes
5702 92 Carpets of man-made textile materials, woven, made up, nes
5702 99 Carpets of other textile materials, woven, made up, nes
5703 10 Carpets of wool or fine animal hair, tufted
5703 20 Carpets of nylon or other polyamides, tufted
5703 30 Carpets of other man-made textile materials, tufted
5703 90 Carpets of other textile materials, tufted
5704 10 Tiles of felt of textile materials, havg a max surface area of 0.3
m2
5704 90 Carpets of felt of textile materials, nes
5705 00 Carpets and other textile floor coverings, nes

Ch. 58 Special woven fab; tufted tex fab; lace; tapestries etc
5801 10 Woven pile fabrics of wool/fine animal hair, other than
terry&narrow fabrics
5801 21 Woven uncut weft pile fabrics of cotton, other than terry and
narrow fabrics
5801 22 Cut corduroy fabrics of cotton, other than narrow fabrics
5801 23 Woven weft pile fabrics of cotton, nes
5801 24 Woven warp pile fab of cotton, pingl (uncut),other than
terry&narrow fab
5801 25 Woven warp pile fabrics of cotton, cut, other than terry and narrow
fabrics
5801 26 Chenille fabrics of cotton, other than narrow fabrics
5801 31 Woven uncut weft pile fabrics of manmade fibres, other than
terry&narrow fab.
5801 32 Cut corduroy fabrics of man-made fibres, other than narrow fabrics
5801 33 Woven weft pile fabrics of man-made fibres, nes
5801 34 Woven warp pile fab of man-made fib, pingl (uncut),other than
terry&nar fab
5801 35 Woven warp pile fabrics of man-made fib, cut, other than terry &
narrow fabrics
5801 36 Chenille fabrics of man-made fibres, other than narrow fabrics
5801 90 Woven pile fab&chenille fab of other tex mat, other than
terry&narrow fabrics
5802 11 Terry towellg & similar woven terry fab of cotton, other than
narrow fab, unbl
5802 19 Terry towellg&similar woven terry fab of cotton, other than
unbl&other than nar fab
5802 20 Terry towellg&sim woven terry fab of oth tex mat, other than narrow
fabrics
5802 30 Tufted textile fabrics, other than products of heading No 57.03
5803 10 Gauze of cotton, other than narrow fabrics
5803 90 Gauze of other textile material, other than narrow fabrics
5804 10 Tulles & other net fabrics, not incl woven, knitted or crocheted
fabrics
5804 21 Mechanically made lace of man-made fib, in the piece, in
strips/motifs

HS No. Product description

5804 29 Mechanically made lace of oth tex mat, in the piece, in strips/in
motifs
5804 30 Hand-made lace, in the piece, in strips or in motifs
5805 00 Hand-woven tapestries&needle-worked tapestries, whether or not made
up
5806 10 Narrow woven pile fabrics and narrow chenille fabrics
5806 20 Narrow woven fab, cntg by wt>/=5% elastomeric yarn/rubber thread
nes
5806 31 Narrow woven fabrics of cotton, nes
5806 32 Narrow woven fabrics of man-made fibres, nes
5806 39 Narrow woven fabrics of other textile materials, nes
5806 40 Fabrics consisting of warp w/o weft assembled by means of an
adhesive
5807 10 Labels, badges and similar woven articles of textile materials
5807 90 Labels, badges and similar articles, not woven, of textile
materials, nes
5808 10 Braids in the piece
5808 90 Ornamental trimmings in the piece, other than knit; tassels,
pompons&similar art
5809 00 Woven fabrics of metal thread/of metallisd yarn, for apparel, etc,
nes
5810 10 Embroidery without visible ground, in the piece, in strips or in
motifs
5810 91 Embroidery of cotton, in the piece, in strips or in motifs, nes
5810 92 Embroidery of man-made fibres, in the piece, in strips or in
motifs, nes
5810 99 Embroidery of oth textile materials, in the piece, in
strips/motifs, nes
5811 00 Quilted textile products in the piece

Ch. 59 Impregnated, coated, cover/laminated textile fabric etc.
5901 10 Textile fabrics coatd with gum, of a kind usd for outer covers of
books
5901 90 Tracg cloth; prepared paintg canvas; stiffened textile fab; for
hats etc
5902 10 Tire cord fabric made of nylon or other polyamides high tenacity
yarns
5902 20 Tire cord fabric made of polyester high tenacity yarns
5902 90 Tire cord fabric made of viscose rayon high tenacity yarns
5903 10 Textile fab impregnatd, ctd, cov, or laminatd w polyvinyl chloride,
nes
5903 20 Textile fabrics impregnated, ctd, cov, or laminated with
polyurethane, nes
5903 90 Textile fabrics impregnated, ctd, cov, or laminated with plastics,
nes
5904 10 Lineoleum, whether or not cut to shape
5904 91 Floor coverings, other than linoleum, with a base of needleloom
felt/nonwovens
5904 92 Floor coverings, other than linoleum, with other textile base
5905 00 Textile wall coverings
5906 10 Rubberised textile adhesive tape of a width not exceeding 20 cm
5906 91 Rubberised textile knitted or crocheted fabrics, nes
5906 99 Rubberised textile fabrics, nes
5907 00 Textile fab impreg, ctd, cov nes; paintd canvas (e.g.threatrical
scenery)
5908 00 Textile wicks f lamps, stoves, etc; gas mantles&knittd gas mantle
fabric
5909 00 Textile hosepiping and similar textile tubing
5910 00 Transmission or conveyor belts or belting of textile material
5911 10 Textile fabrics usd f card clothing, and sim fabric f technical
uses
5911 20 Textile bolting cloth, whether or not made up
5911 31 Textile fabrics used in paper-making or similar machines, <650 g/m2
5911 32 Textile fabrics usd in paper-makg or similar mach, weighg >/=650
g/m2
5911 40 Textile straing cloth usd in oil presses o the like, incl of human
hair
5911 90 Textile products and articles for technical uses, nes

Ch. 60 Knitted or crocheted fabrics.
6001 10 Long pile knitted or crocheted textile fabrics
6001 21 Looped pile knitted or crocheted fabrics, of cotton
HS No. Product description

6001 22 Looped pile knitted or crocheted fabrics, of man-made fibres
6001 29 Looped pile knitted or crocheted fabrics, of other textile
materials
6001 91 Pile knitted or crocheted fabrics, of cotton, nes
6001 92 Pile knitted or crocheted fabrics, of man-made fibres, nes
6001 99 Pile knitted or crocheted fabrics, of other textile materials, nes
6002 10 Knittd or crochetd tex fab, w</=30 cm,>/=5% of elastomeric/rubber,
nes
6002 20 Knitted or crocheted textile fabrics, of a width not exceedg 30 cm,
nes
6002 30 Knittd/crochetd tex fab, width > 30 cm,>/=5% of elastomeric/rubber,
nes
6002 41 Warp knitted fabrics, of wool or fine animal hair, nes
6002 42 Warp knitted fabrics, of cotton, nes
6002 43 Warp knitted fabrics, of man-made fibres, nes
6002 49 Warp knitted fabrics, of other materials, nes
6002 91 Knitted or crocheted fabrics, of wool or of fine animal hair, nes
6002 92 Knitted or crocheted fabrics, of cotton, nes
6002 93 Knitted or crocheted fabrics, of manmade fibres, nes
6002 99 Knitted or crocheted fabrics, of other materials, nes

Ch. 61 Art of apparel & clothing access, knitted or crocheted.
6101 10 Mens/boys overcoats, anoraks etc, of wool or fine animal hair,
knitted
6101 20 Mens/boys overcoats, anoraks etc, of cotton, knitted
6101 30 Mens/boys overcoats, anoraks etc, of man-made fibres, knitted
6101 90 Mens/boys overcoats, anoraks etc, of other textile materials,
knitted
6102 10 Womens/girls overcoats, anoraks etc, of wool or fine animal hair,
knitted
6102 20 Womens/girls overcoats, anoraks etc, of cotton, knitted
6102 30 Womens/girls overcoats, anoraks etc, of man-made fibres, knitted
6102 90 Womens/girls overcoats, anoraks etc, of other textile materials,
knitted
6103 11 Mens/boys suits, of wool or fine animal hair, knitted
6103 12 Mens/boys suits, of synthetic fibres, knitted
6103 19 Mens/boys suits, of other textile materials, knitted
6103 21 Mens/boys ensembles, of wool or fine animal hair, knitted
6103 22 Mens/boys ensembles, of cotton, knitted
6103 23 Mens/boys ensembles, of synthetic fibres, knitted
6103 29 Mens/boys ensembles, of other textile materials, knitted
6103 31 Mens/boys jackets and blazers, of wool or fine animal hair, knitted
6103 32 Mens/boys jackets and blazers, of cotton, knitted
6103 33 Mens/boys jackets and blazers, of synthetic fibres, knitted
6103 39 Mens/boys jackets and blazers, of other textile materials, knitted
6103 41 Mens/boys trousers and shorts, of wool or fine animal hair, knitted
6103 42 Mens/boys trousers and shorts, of cotton, knitted
6103 43 Mens/boys trousers and shorts, of synthetic fibres, knitted
6103 49 Mens/boys trousers and shorts, of other textile materials, knitted
6104 11 Womens/girls suits, of wool or fine animal hair, knitted
6104 12 Womens/girls suits, of cotton, knitted
6104 13 Womens/girls suits, of synthetic fibres, knitted
6104 19 Womens/girls suits, of other textile materials, knitted
6104 21 Womens/girls ensembles, of wool or fine animal hair, knitted
6104 22 Womens/girls ensembles, of cotton, knitted
6104 23 Womens/girls ensembles, of synthetic fibres, knitted
6104 29 Womens/girls ensembles, of other textile materials, knitted
6104 31 Womens/girls jackets, of wool or fine animal hair, knitted
HS No. Product description

6104 32 Womens/girls jackets, of cotton, knitted
6104 33 Womens/girls jackets, of synthetic fibres, knitted
6104 39 Womens/girls jackets, of other textile materials, knitted
6104 41 Womens/girls dresses, of wool or fine animal hair, knitted
6104 42 Womens/girls dresses, of cotton, knitted
6104 43 Womens/girls dresses, of synthetic fibres, knitted
6104 44 Womens/girls dresses, of artificial fibres, knitted
6104 49 Womens/girls dresses, of other textile materials, knitted
6104 51 Womens/girls skirts, of wool or fine animal hair, knitted
6104 52 Womens/girls skirts, of cotton, knitted
6104 53 Womens/girls skirts, of synthetic fibres, knitted
6104 59 Womens/girls skirts, of other textile materials, knitted
6104 61 Womens/girls trousers and shorts, of wool or fine animal hair,
knitted
6104 62 Womens/girls trousers and shorts, of cotton, knitted
6104 63 Womens/girls trousers and shorts, of synthetic fibres, knitted
6104 69 Womens/girls trousers and shorts, of other textile materials,
knitted
6105 10 Mens/boys shirts, of cotton, knitted
6105 20 Mens/boys shirts, of man-made fibres, knitted
6105 90 Mens/boys shirts, of other textile materials, knitted
6106 10 Womens/girls blouses and shirts, of cotton, knitted
6106 20 Womens/girls blouses and shirts, of man-made fibres, knitted
6106 90 Womens/girls blouses and shirts, of other materials, knitted
6107 11 Mens/boys underpants and briefs, of cotton, knitted
6107 12 Mens/boys underpants and briefs, of man-made fibres, knitted
6107 19 Mens/boys underpants and briefs, of other textile materials,
knitted
6107 21 Mens/boys nightshirts and pyjamas, of cotton, knitted
6107 22 Mens/boys nightshirts and pyjamas, of man-made fibres, knitted
6107 29 Mens/boys nightshirts and pyjamas, of other textile materials,
knitted
6107 91 Mens/boys bathrobes, dressing gowns etc of cotton, knitted
6107 92 Mens/boys bathrobes, dressing gowns, etc of man-made fibres,
knitted
6107 99 Mens/boys bathrobes, dressg gowns, etc of oth textile materials,
knitted
6108 11 Womens/girls slips and petticoats, of man-made fibres, knitted
6108 19 Womens/girls slips and petticoats, of other textile materials,
knitted
6108 21 Womens/girls briefs and panties, of cotton, knitted
6108 22 Womens/girls briefs and panties, of man-made fibres, knitted
6108 29 Womens/girls briefs and panties, of other textile materials,
knitted
6108 31 Womens/girls nightdresses and pyjamas, of cotton, knitted
6108 32 Womens/girls nightdresses and pyjamas, of man-made fibres, knitted
6108 39 Womens/girls nightdresses & pyjamas, of other textile materials,
knitted
6108 91 Womens/girls bathrobes, dressing gowns, etc, of cotton, knitted
6108 92 Womens/girls bathrobes, dressing gowns, etc, of man-made fibres,
knitted
6108 99 Women/girls bathrobes, dressg gowns, etc, of oth textile materials,
knittd
6109 10 T-shirts, singlets and other vests, of cotton, knitted
6109 90 T-shirts, singlets and other vests, of other textile materials,
knitted
6110 10 Pullovers, cardigans&similar article of wool or fine animal hair,
knittd
6110 20 Pullovers, cardigans and similar articles of cotton, knitted
6110 30 Pullovers, cardigans and similar articles of man-made fibres,
knitted
6110 90 Pullovers, cardigans&similar articles of oth textile materials,
knittd
6111 10 Babies garments&clothg accessories of wool or fine animal hair,
knitted
6111 20 Babies garments and clothing accessories of cotton, knitted
HS No. Product description

6111 30 Babies garments and clothing accessories of synthetic fibres,
knitted
6111 90 Babies garments&clothg accessories of other textile materials,
knitted
6112 11 Track suits, of cotton, knitted
6112 12 Track suits, of synthetic fibres, knitted
6112 19 Track suits, of other textile materials, knitted
6112 20 Ski suits, of textile materials, knitted
6112 31 Mens/boys swimwear, of synthetic fibres, knitted
6112 39 Mens/boys swimwear, of other textile materials, knitted
6112 41 Womens/girls swimwear, of synthetic fibres, knitted
6112 49 Womens/girls swimwear, of other textile materials, knitted
6113 00 Garments made up of impreg, coatd, coverd or laminatd textile
knittd fab
6114 10 Garments nes, of wool or fine animal hair, knitted
6114 20 Garments nes, of cotton, knitted
6114 30 Garments nes, of man-made fibres, knitted
6114 90 Garments nes, of other textile materials, knitted
6115 11 Panty hose&tights, of synthetic fibre yarns <67 dtex/single yarn
knittd
6115 12 Panty hose&tights, of synthetic fib yarns >/=67 dtex/single yarn
knittd
6115 19 Panty hose and tights, of other textile materials, knitted
6115 20 Women full-l/knee-l hosiery, of textile yarn<67 dtex/single yarn
knittd
6115 91 Hosiery nes, of wool or fine animal hair, knitted
6115 92 Hosiery nes, of cotton, knitted
6115 93 Hosiery nes, of synthetic fibres, knitted
6115 99 Hosiery nes, of other textile materials, knitted
6116 10 Gloves impregnated, coated or covered with plastics or rubber,
knitted
6116 91 Gloves, mittens and mitts, nes, of wool or fine animal hair,
knitted
6116 92 Gloves, mittens and mitts, nes, of cotton, knitted
6116 93 Gloves, mittens and mitts, nes, of synthetic fibres, knitted
6116 99 Gloves, mittens and mitts, nes, of other textile materials, knitted
6117 10 Shawls, scarves, veils and the like, of textile materials, knitted
6117 20 Ties, bow ties and cravats, of textile materials, knitted
6117 80 Clothing accessories nes, of textile materials, knitted
6117 90 Parts of garments/of clothg accessories, of textile materials,
knittd

Ch. 62 Art of apparel & clothing access, not knitted/crocheted.
6201 11 Mens/boys overcoats&similar articles of wool/fine animal hair, not
knit
6201 12 Mens/boys overcoats and similar articles of cotton, not knitted
6201 13 Mens/boys overcoats & similar articles of man-made fibres, not
knitted
6201 19 Mens/boys overcoats&sim articles of oth textile materials, not
knittd
6201 91 Mens/boys anoraks&similar articles, of wool/fine animal hair, not
knittd
6201 92 Mens/boys anoraks and similar articles, of cotton, not knitted
6201 93 Mens/boys anoraks and similar articles, of man-made fibres, not
knitted
6201 99 Mens/boys anoraks&similar articles, of oth textile materials, not
knittd
6202 11 Womens/girls overcoats&sim articles of wool/fine animal hair nt
knit
6202 12 Womens/girls overcoats and similar articles of cotton, not knitted
6202 13 Womens/girls overcoats&sim articles of man-made fibres, not knittd
6202 19 Womens/girls overcoats&similar articles of other textile mat, not
knit
6202 91 Womens/girls anoraks&similar article of wool/fine animal hair, not
knit
6202 92 Womens/girls anoraks and similar article of cotton, not knitted
6202 93 Womens/girls anoraks & similar article of man-made fibres, not
knitted
6202 99 Womens/girls anoraks&similar article of oth textile materials, not
knit
HS No. Product description

6203 11 Mens/boys suits, of wool or fine animal hair, not knitted
6203 12 Mens/boys suits, of synthetic fibres, not knitted
6203 19 Mens/boys suits, of other textile materials, not knitted
6203 21 Mens/boys ensembles, of wool or fine animal hair, not knitted
6203 22 Mens/boys ensembles, of cotton, not knitted
6203 23 Mens/boys ensembles, of synthetic fibres, not knitted
6203 29 Mens/boys ensembles, of other textile materials, not knitted
6203 31 Mens/boys jackets and blazers, of wool or fine animal hair, not
knitted
6203 32 Mens/boys jackets and blazers, of cotton, not knitted
6203 33 Mens/boys jackets and blazers, of synthetic fibres, not knitted
6203 39 Mens/boys jackets and blazers, of other textile materials, not
knitted
6203 41 Mens/boys trousers and shorts, of wool or fine animal hair, not
knitted
6203 42 Mens/boys trousers and shorts, of cotton, not knitted
6203 43 Mens/boys trousers and shorts, of synthetic fibres, not knitted
6203 49 Mens/boys trousers and shorts, of other textile materials, not
knitted
6204 11 Womens/girls suits, of wool or fine animal hair, not knitted
6204 12 Womens/girls suits, of cotton, not knitted
6204 13 Womens/girls suits, of synthetic fibres, not knitted
6204 19 Womens/girls suits, of other textile materials, not knitted
6204 21 Womens/girls ensembles, of wool or fine animal hair, not knitted
6204 22 Womens/girls ensembles, of cotton, not knitted
6204 23 Womens/girls ensembles, of synthetic fibres, not knitted
6204 29 Womens/girls ensembles, of other textile materials, not knitted
6204 31 Womens/girls jackets, of wool or fine animal hair, not knitted
6204 32 Womens/girls jackets, of cotton, not knitted
6204 33 Womens/girls jackets, of synthetic fibres, not knitted
6204 39 Womens/girls jackets, of other textile materials, not knitted
6204 41 Womens/girls dresses, of wool or fine animal hair, not knitted
6204 42 Womens/girls dresses, of cotton, not knitted
6204 43 Womens/girls dresses, of synthetic fibres, not knitted
6204 44 Womens/girls dresses, of artificial fibres, not knitted
6204 49 Womens/girls dresses, of other textile materials, not knitted
6204 51 Womens/girls skirts, of wool or fine animal hair, not knitted
6204 52 Womens/girls skirts, of cotton, not knitted
6204 53 Womens/girls skirts, of synthetic fibres, not knitted
6204 59 Womens/girls skirts, of other textile materials, not knitted
6204 61 Womens/girls trousers & shorts, of wool or fine animal hair, not
knitted
6204 62 Womens/girls trousers and shorts, of cotton, not knitted
6204 63 Womens/girls trousers and shorts, of synthetic fibres, not knitted
6204 69 Womens/girls trousers & shorts, of other textile materials, not
knitted
6205 10 Mens/boys shirts, of wool or fine animal hair, not knitted
6205 20 Mens/boys shirts, of cotton, not knitted
6205 30 Mens/boys shirts, of man-made fibres, not knitted
6205 90 Mens/boys shirts, of other textile materials, not knitted
6206 10 Womens/girls blouses and shirts, of silk or silk waste, not knitted
6206 20 Womens/girls blouses & shirts, of wool or fine animal hair, not
knitted
6206 30 Womens/girls blouses and shirts, of cotton, not knitted
6206 40 Womens/girls blouses and shirts, of man-made fibres, not knitted
6206 90 Womens/girls blouses and shirts, of other textile materials, not
knitted
6207 11 Mens/boys underpants and briefs, of cotton, not knitted
HS No. Product description

6207 19 Mens/boys underpants and briefs, of other textile materials, not
knitted
6207 21 Mens/boys nightshirts and pyjamas, of cotton, not knitted
6207 22 Mens/boys nightshirts and pyjamas, of man-made fibres, not knitted
6207 29 Mens/boys nightshirts & pyjamas, of other textile materials, not
knitted
6207 91 Mens/boys bathrobes, dressing gowns, etc of cotton, not knitted
6207 92 Mens/boys bathrobes, dressing gowns, etc of man-made fibres, not
knitted
6207 99 Mens/boys bathrobes, dressg gowns, etc of oth textile materials,
not knit
6208 11 Womens/girls slips and petticoats, of man-made fibres, not knitted
6208 19 Womens/girls slips & petticoats, of other textile materials, not
knitted
6208 21 Womens/girls nightdresses and pyjamas, of cotton, not knitted
6208 22 Womens/girls nightdresses and pyjamas, of man-made fibres, not
knitted
6208 29 Womens/girls nightdresses&pyjamas, of oth textile materials, not
knitted
6208 91 Womens/girls panties, bathrobes, etc, of cotton, not knitted
6208 92 Womens/girls panties, bathrobes, etc, of man-made fibres, not
knitted
6208 99 Womens/girls panties, bathrobes, etc, of oth textile materials, not
knittd
6209 10 Babies garments&clothg accessories of wool o fine animal hair, not
knit
6209 20 Babies garments and clothing accessories of cotton, not knitted
6209 30 Babies garments & clothing accessories of synthetic fibres, not
knitted
6209 90 Babies garments&clothg accessories of oth textile materials, not
knittd
6210 10 Garments made up of textile felts and of nonwoven textile fabrics
6210 20 Mens/boys overcoats&similar articles of impreg, ctd, cov etc, tex
wov fab
6210 30 Womens/girls overcoats&sim articles, of impreg, ctd, etc, tex wov
fab
6210 40 Mens/boys garments nes, made up of impreg, ctd, cov, etc, textile
woven fab
6210 50 Womens/girls garments nes, of impregnatd, ctd, cov, etc, textile
woven fab
6211 11 Mens/boys swimwear, of textile materials not knitted
6211 12 Womens/girls swimwear, of textile materials, not knitted
6211 20 Ski suits, of textile materials, not knitted
6211 31 Mens/boys garments nes, of wool or fine animal hair, not knitted
6211 32 Mens/boys garments nes, of cotton, not knitted
6211 33 Mens/boys garments nes, of man-made fibres, not knitted
6211 39 Mens/boys garments nes, of other textile materials, not knitted
6211 41 Womens/girls garments nes, of wool or fine animal hair, not knitted
6211 42 Womens/girls garments nes, of cotton, not knitted
6211 43 Womens/girls garments nes, of man-made fibres, not knitted
6211 49 Womens/girls garments nes, of other textile materials, not knitted
6212 10 Brassieres and parts thereof, of textile materials
6212 20 Girdles, panty girdles and parts thereof, of textile materials
6212 30 Corselettes and parts thereof, of textile materials
6212 90 Corsets, braces & similar articles & parts thereof, of textile
materials
6213 10 Handkerchiefs, of silk or silk waste, not knitted
6213 20 Handkerchiefs, of cotton, not knitted
6213 90 Handkerchiefs, of other textile materials, not knitted
6214 10 Shawls, scarves, veils and the like, of silk or silk waste, not
knitted
6214 20 Shawls, scarves, veils&the like, of wool or fine animal hair, not
knitted
6214 30 Shawls, scarves, veils and the like, of synthetic fibres, not
knitted
6214 40 Shawls, scarves, veils and the like, of artificial fibres, not
knitted
6214 90 Shawls, scarves, veils & the like, of other textile materials, not
knitted
6215 10 Ties, bow ties and cravats, of silk or silk waste, not knitted
HS No. Product description

6215 20 Ties, bow ties and cravats, of man-made fibres, not knitted
6215 90 Ties, bow ties and cravats, of other textile materials, not knitted
6216 00 Gloves, mittens and mitts, of textile materials, not knitted
6217 10 Clothing accessories nes, of textile materials, not knitted
6217 90 Parts of garments or of clothg accessories nes, of tex mat, not
knittd

Ch. 63 Other made up textile articles; sets; worn clothing etc
6301 10 Electric blankets, of textile materials
6301 20 Blankets (other than electric) & travelling rugs, of wool or fine
animal hair
6301 30 Blankets (other than electric) and travelling rugs, of cotton
6301 40 Blankets (other than electric) and travelling rugs, of synthetic
fibres
6301 90 Blankets (other than electric) and travelling rugs, of other
textile materials
6302 10 Bed linen, of textile knitted or crocheted materials
6302 21 Bed linen, of cotton, printed, not knitted
6302 22 Bed linen, of man-made fibres, printed, not knitted
6302 29 Bed linen, of other textile materials, printed, not knitted
6302 31 Bed linen, of cotton, nes
6302 32 Bed linen, of man-made fibres, nes
6302 39 Bed linen, of other textile materials, nes
6302 40 Table linen, of textile knitted or crocheted materials
6302 51 Table linen, of cotton, not knitted
6302 52 Table linen, of flax, not knitted
6302 53 Table linen, of man-made fibres, not knitted
6302 59 Table linen, of other textile materials, not knitted
6302 60 Toilet&kitchen linen, of terry towellg or similar terry fab, of
cotton
6302 91 Toilet and kitchen linen, of cotton, nes
6302 92 Toilet and kitchen linen, of flax
6302 93 Toilet and kitchen linen, of man-made fibres
6302 99 Toilet and kitchen linen, of other textile materials
6303 11 Curtains, drapes, interior blinds&curtain or bed valances, of
cotton, knit
6303 12 Curtains, drapes, interior blinds&curtain/bd valances, of syn fib,
knittd
6303 19 Curtains, drapes, interior blinds&curtain/bd valances, oth tex mat,
knit
6303 91 Curtains/drapes/interior blinds&curtain/bd valances, of cotton, not
knit
6303 92 Curtains/drapes/interior blinds curtain/bd valances, of syn fib, nt
knit
6303 99 Curtain/drape/interior blind curtain/bd valance, of oth tex mat, nt
knit
6304 11 Bedspreads of textile materials, nes, knitted or crocheted
6304 19 Bedspreads of textile materials, nes, not knitted or crocheted
6304 91 Furnishing articles nes, of textile materials, knitted or crocheted
6304 92 Furnishing articles nes, of cotton, not knitted or crocheted
6304 93 Furnishing articles nes, of synthetic fibres, not knitted or
crocheted
6304 99 Furnishg articles nes, of oth textile materials, not knittd o
crochetd
6305 10 Sacks&bags, for packg of goods, of jute or of other textile bast
fibres
6305 20 Sacks and bags, for packing of goods, of cotton
6305 31 Sacks&bags, for packg of goods, of polyethylene or polypropylene
strips
6305 39 Sacks & bags, for packing of goods, of other man-made textile
materials
6305 90 Sacks and bags, for packing of goods, of other textile materials
6306 11 Tarpaulins, awnings and sunblinds, of cotton
6306 12 Tarpaulins, awnings and sunblinds, of synthetic fibres
6306 19 Tarpaulins, awnings and sunblinds, of other textile materials
6306 21 Tents, of cotton
HS No. Product description

6306 22 Tents, of synthetic fibres
6306 29 Tents, of other textile materials
6306 31 Sails, of synthetic fibres
6306 39 Sails, of other textile materials
6306 41 Pneumatic mattresses, of cotton
6306 49 Pneumatic mattresses, of other textile materials
6306 91 Camping goods nes, of cotton
6306 99 Camping goods nes, of other textile materials
6307 10 Floor-cloths, dish-cloths, dusters & similar cleaning cloths, of
tex mat
6307 20 Life jackets and life belts, of textile materials
6307 90 Made up articles, of textile materials, nes, including dress
patterns
6308 00 Sets consistg of woven fab & yarn, for makg up into rugs,
tapestries etc
6309 00 Worn clothing and other worn articles

Textile and clothing products in Chapters 30-49, 64-96

3005 90 Wadding, gauze, bandages and the like
ex 3921 12 )
ex 3921 13( Woven, knitted or non-woven fabrics coated, covered or laminated
with plastics
ex 3921 90 )
ex 4202 12 )
ex 4202 22( Luggage, handbags and flatgoods with an outer surface
predominantly of textile
materials
ex 4202 32 )
ex 4202 92 )
ex 6405 20Footwear with soles and uppers of wool felt
ex 6406 10Footwear uppers of which 50% or more of the external surface area
is textile
material
ex 6406 99Leg warmers and gaiters of textile material
6501 00 Hat-forms, hat bodies and hoods of felt; plateaux and manchons of
felt
6502 00 Hat-shapes, plaited or made by assembling strips of any material
6503 00 Felt hats and other felt headgear
6504 00 Hats & other headgear, plaited or made by assembling strips of any
material
6505 90 Hats & other headgear, knitted or made up from lace, or other
textile material
6601 10 Umbrellas and sun umbrellas, garden type
6601 91 Other umbrella types, telescopic shaft
6601 99 Other umbrellas
ex 7019 10Yarns of fibre glass
ex 7019 20Woven fabrics of fibre glass
8708 21 Safety seat belts for motor vehicles
8804 00 Parachutes; their parts and accessories
9113 90 Watch straps, bands and bracelets of textile materials
ex 9404 90Pillow and cushions of cotton; quilts; eiderdowns; comforters and
similar articles of textile materials
9502 91 Garments for dolls
ex 9612 10Woven ribbons, of man-made fibres, other than those measuring less
than
30 mm in width and permanently put up in cartridges

1. To the extent possible, exports from a least-developed country may also
benefit from this provision.

2. The agreement year is defined to mean a 12-month period beginning from
the date of entry into force of this Agreement and at the subsequent
12-month intervals.

3. The relevant GATT 1994 provisions shall not include Article XIX in
respect of products not yet integrated into GATT 1994, except as
specifically provided in the Note to the Annex.

4. Participants agreed to examine, in the first quarter of 1994, the date
and the technical and administrative aspects related to the implementation
of this provision.

5. Restrictions denote all unilateral quantitative restrictions, bilateral
arrangements and other measures having a similar effect.

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

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


AGREEMENT ON TECHNICAL BARRIERS TO TRADE

Having regard to the Multilateral Trade Negotiations,

Desiring to further the objectives of the GATT 1994;

Recognizing the important contribution that international standards
and conformity assessment systems can make in this regard by improving
efficiency of production and facilitating the conduct of international
trade;

Desiring therefore to encourage the development of such international
standards and conformity assessment systems;

Desiring however to ensure that technical regulations and standards,
including packaging, marking and labelling requirements, and procedures for
assessment of conformity with technical regulations and standards do not
create unnecessary obstacles to international trade;

Recognizing that no country should be prevented from taking measures
necessary to ensure the quality of its exports, or for the protection of
human, animal or plant life or health, of the environment, or for the
prevention of deceptive practices, at the levels it considers appropriate,
subject to the requirement that they are not applied in a manner which would
constitute a means of arbitrary or unjustifiable discrimination between
countries where the same conditions prevail or a disguised restriction on
international trade, and are otherwise in accordance with the provisions of
this Agreement.

Recognizing that no country should be prevented from taking measures
necessary for the protection of its essential security interest;

Recognizing the contribution which international standardization can
make to the transfer of technology from developed to developing countries;

Recognizing that developing countries may encounter special
difficulties in the formulation and application of technical regulations and
standards and procedures for assessment of conformity with technical
regulations and standards, and desiring to assist them in their endeavours
in this regard;

Members hereby agree as follows:

Article 1

General Provisions

1.1 General terms for standardization and procedures for assessment of
conformity shall normally have the meaning given to them by definitions
adopted within the United Nations system and by international standardizing
bodies taking into account their context and in the light of the object and
purpose of this Agreement.

1.2 However, for the purposes of this Agreement the meaning of the terms
given in Annex 1 applies.

1.3 All products, including industrial and agricultural products, shall be
subject to the provisions of this Agreement.
1.4 Purchasing specifications prepared by governmental bodies for
production or consumption requirements of governmental bodies are not
subject to the provisions of this Agreement but are addressed in the
Agreement on Government Procurement, according to its coverage.

1.5 The provisions of this Agreement do not apply to sanitary and
phytosanitary measures as defined in Annex A of the Agreement on Sanitary
and Phytosanitary Measures.

1.6 All references in this Agreement to technical regulations, standards
and conformity assessment procedures shall be construed to include any
amendments thereto and any additions to the rules or the product coverage
thereof, except amendments and additions of an insignificant nature.

TECHNICAL REGULATIONS AND STANDARDS

Article 2

Preparation, Adoption and Application of Technical Regulations
by Central Government Bodies

With respect to their central government bodies:

2.1 Members shall ensure that in respect of technical regulations,
products imported from the territory of any Member shall be accorded
treatment no less favourable than that accorded to like products of national
origin and to like products originating in any other country.

2.2 Members shall ensure that technical regulations are not prepared,
adopted or applied with a view to or with the effect of creating unnecessary
obstacles to international trade. For this purpose, technical regulations
shall not be more trade-restrictive than necessary to fulfil a legitimate
objective, taking account of the risks non-fulfilment would create. Such
legitimate objectives are, inter alia, national security requirements; the
prevention of deceptive practices; protection of human health or safety,
animal or plant life or health, or the environment. In assessing such
risks, relevant elements of consideration are, inter alia, available
scientific and technical information, related processing technology or
intended end uses of products.

2.3 Technical regulations shall not be maintained if the circumstances or
objectives giving rise to their adoption no longer exist or if the changed
circumstances or objectives can be addressed in a less trade-restrictive
manner.

2.4 Where technical regulations are required and relevant international
standards exist or their completion is imminent, Members shall use them, or
the relevant parts of them, as a basis for their technical regulations
except when such international standards or relevant parts would be an
ineffective or inappropriate means for the fulfilment of the legitimate
objectives pursued, for instance because of fundamental climatic or
geographical factors or fundamental technological problems.

2.5 A Member preparing, adopting or applying a technical regulation which
may have a significant effect on trade of other Members shall, upon the
request of another Member, explain the justification for that technical
regulation in terms of the provisions of paragraphs 2 to 4 of Article 2.
Whenever a technical regulation is prepared, adopted or applied for one of
the legitimate objectives explicitly mentioned in paragraph 2 of Article 2,
and is in accordance with relevant international standards, it shall be
rebuttably presumed not to create an unnecessary obstacle to international
trade.

2.6 With a view to harmonizing technical regulations on as wide a basis as
possible, Members shall play a full part, within the limits of their
resources, in the preparation by appropriate international standardizing
bodies of international standards for products for which they either have
adopted, or expect to adopt, technical regulations.

2.7 Members shall give positive consideration to accepting as equivalent
technical regulations of other Members, even if these regulations differ
from their own, provided they are satisfied that these regulations
adequately fulfil the objectives of their own regulations.

2.8 Wherever appropriate, Members shall specify technical regulations
based on product requirements in terms of performance rather than design or
descriptive characteristics.

2.9 Whenever a relevant international standard does not exist or the
technical content of a proposed technical regulation is not in accordance
with the technical content of relevant international standards, and if the
technical regulation may have a significant effect on trade of other
Members, Members shall:
2.9.1publish a notice in a publication at an early appropriate stage,
in such a manner as to enable interested parties in other Members
to become acquainted with it, that they propose to introduce a
particular technical regulation;

2.9.2notify other Members through the MTO Secretariat of the products
to be covered by the proposed technical regulation, together with
a brief indication of its objective and rationale; such
notifications shall take place at an early appropriate stage,
when amendments can still be introduced and comments taken into
account;

2.9.3upon request, provide to other Members, particulars or copies of
the proposed technical regulation and, whenever possible,
identify the parts which in substance deviate from relevant
international standards;

2.9.4without discrimination, allow reasonable time for other Members
to make comments in writing, discuss these comments upon request,
and take these written comments and the results of these
discussions into account.

2.10 Subject to the provisions in the lead-in to Article 2, paragraph 9,
where urgent problems of safety, health, environmental protection or
national security arise or threaten to arise for a Member, that Member may
omit such of the steps enumerated in Article 2, paragraph 9, as it finds
necessary provided that the Member, upon adoption of a technical regulation,
shall:

2.10.1notify immediately other Members through the MTO Secretariat of
the particular technical regulation and the products covered,
with a brief indication of the objective and the rationale of the
technical regulation, including the nature of the urgent
problems;
2.10.2upon request, provide other Members with copies of the technical
regulation;

2.10.3without discrimination, allow other Members to present their
comments in writing, discuss these comments upon request, and
take these written comments and the results of these discussions
into account.

2.11 Members shall ensure that all technical regulations which have been
adopted are published promptly or otherwise made available in such a manner
as to enable interested parties in other Members to become acquainted with
them.

2.12 Except in those urgent circumstances referred to in Article 2,
paragraph 10, Members shall allow a reasonable interval between the
publication of a technical regulation and its entry into force in order to
allow time for producers in exporting Members, and particularly in
developing country Members, to adapt their products or methods of production
to the requirements of the importing Member.

Article 3

Preparation, Adoption and Application of Technical Regulations
by Local Government Bodies and Non-Governmental Bodies

With respect to their local government and non-governmental bodies
within their territories:

3.1 Members shall take such reasonable measures as may be available to
them to ensure compliance by such bodies with the provisions of Article 2,
with the exception of the obligation to notify as referred to in paragraphs
9.2 and 10.1 of Article 2.

3.2 Members shall ensure that the technical regulations of local
governments on the level directly below that of the central government in
Members are notified in accordance with the provisions of Article 2,
paragraphs 9.2 and 10.1, noting that notification shall not be required for
technical regulations the technical content of which is substantially the
same as that of previously notified technical regulations of central
government bodies of the Member concerned.

3.3 Members may require contact with other Members, including the
notifications, provision of information, comments and discussions referred
to in paragraphs 9 and 10 of Article 2, to take place through the central
government.

3.4 Members shall not take measures which require or encourage local
government bodies or non-governmental bodies within their territories to act
in a manner inconsistent with the provisions of Article 2.

3.5 Members are fully responsible under this Agreement for the observance
of all provisions of Article 2. Members shall formulate and implement
positive measures and mechanisms in support of the observance of the
provisions of Article 2 by other than central government bodies.


Article 4

Preparation, Adoption and Application
of Standards

4.1 Members shall ensure that their central government standardizing
bodies accept and comply with the Code of good practice for the preparation,
adoption and application of standards in Annex 3 to this Agreement. They
shall take such reasonable measures as may be available to them to ensure
that local government and non-governmental standardizing bodies within their
territories as well as regional standardizing bodies of which they or one or
more bodies within their territories are members, accept and comply with
this Code of good practice. In addition, Members shall not take measures
which have the effect of, directly or indirectly, requiring or encouraging
such standardizing bodies to act in a manner inconsistent with the Code of
good practice in Annex 3. The obligations of Members with respect to
compliance of standardizing bodies with the provisions of the Code of good
practice shall apply irrespective of whether or not a standardizing body has
accepted the Code of good practice.

4.2 Standardizing bodies that have accepted and are complying with the
Code of good practice in Annex 3 shall be acknowledged by the Members as
complying with the principles of this Agreement.

CONFORMITY WITH TECHNICAL REGULATIONS AND STANDARDS

Article 5

Procedures for Assessment of Conformity by Central Government Bodies

5.1 Members shall ensure that, in cases where a positive assurance of
conformity with technical regulations or standards is required, their
central government bodies apply the following provisions to products
originating in the territories of other Members:

5.1.1conformity assessment procedures are prepared, adopted and
applied so as to grant access for suppliers of like products
originating in the territories of other Members under conditions
no less favourable than those accorded to suppliers of like
products of national origin or originating in any other country,
in a comparable situation; access entails suppliers' right to an
assessment of conformity under the rules of the procedure,
including, when foreseen by this procedure, the possibility to
have conformity assessment activities undertaken at the site of
facilities and to receive the mark of the system;

5.1.2conformity assessment procedures are not prepared, adopted or
applied with a view to or with the effect of creating unnecessary
obstacles to international trade. This means, inter alia, that
conformity assessment procedures shall not be more strict or be
applied more strictly than is necessary to give the importing
Member adequate confidence that products conform with the
applicable technical regulations or standards, taking account of
the risks non-conformity would create.

5.2 When implementing the provisions of paragraph 1 of Article 5, Members
shall ensure that:

5.2.1conformity assessment procedures are undertaken and completed as
expeditiously as possible and in a no less favourable order for
products originating in the territories of other Members than for
like domestic products;

5.2.2the standard processing period of each conformity assessment
procedure is published or that the anticipated processing period
is communicated to the applicant upon request; when receiving an
application, the competent body promptly examines the
completeness of the documentation and informs the applicant in a
precise and complete manner of all deficiencies; the competent
body transmits as soon as possible the results of the assessment
in a precise and complete manner to the applicant so that
corrective action may be taken if necessary; even when the
application has deficiencies, the competent body proceeds as far
as practicable with the conformity assessment if the applicant so
requests; and that, upon request, the applicant is informed of
the stage of the procedure, with any delay being explained;

5.2.3information requirements are limited to what is necessary to
assess conformity and determine fees;

5.2.4the confidentiality of information about products originating in
the territories of other Members arising from or supplied in
connection with such conformity assessment procedures is
respected in the same way as for domestic products and in such a
manner that legitimate commercial interests are protected;

5.2.5any fees imposed for assessing the conformity of products
originating in the territories of other Members are equitable in
relation to any fees chargeable for assessing the conformity of
like products of national origin or originating in any other
country, taking into account communication, transportation and
other costs arising from differences between location of
facilities of the applicant and the conformity assessment body;

5.2.6the siting of facilities used in conformity assessment procedures
and the selection of samples are not such as to cause unnecessary
inconvenience to applicants or their agents;

5.2.7whenever specifications of a product are changed subsequent to
its determination of conformity to the applicable technical
regulations or standards, the conformity assessment procedure for
the modified product is limited to what is necessary to determine
whether adequate confidence exists that the product still meets
the technical regulations or standards concerned;

5.2.8a procedure exists to review complaints concerning the operation
of a conformity assessment procedure and to take corrective
action when a complaint is justified.

5.3 Nothing in paragraphs 1 and 2 of Article 5 shall prevent Members from
carrying out reasonable spot checks within their territories.

5.4 In cases where a positive assurance is required that products conform
with technical regulations or standards, and relevant guides or
recommendations issued by international standardizing bodies exist or their
completion is imminent, Members shall ensure that central government bodies
use them, or the relevant parts of them, as a basis for their conformity
assessment procedures, except where, as duly explained upon request, such
guides or recommendations or relevant parts are inappropriate for the
Members concerned, for, inter alia, such reasons as national security
requirements; the prevention of deceptive practices; protection of human
health or safety, animal or plant life or health, or the environment;
fundamental climatic or other geographical factors; fundamental
technological or infrastructural problems.

5.5 With a view to harmonizing conformity assessment procedures on as wide
a basis as possible, Members shall play a full part within the limits of
their resources in the preparation by appropriate international
standardizing bodies of guides and recommendations for conformity assessment
procedures.

5.6 Whenever a relevant guide or recommendation issued by an international
standardizing body does not exist or the technical content of a proposed
conformity assessment procedure is not in accordance with relevant guides
and recommendations issued by international standardizing bodies, and if the
conformity assessment procedure may have a significant effect on trade of
other Members, Members shall:

5.6.1publish a notice in a publication at an early appropriate stage,
in such a manner as to enable interested parties in other Members
to become acquainted with it, that they propose to introduce a
particular conformity assessment procedure;

5.6.2notify other Members through the MTO Secretariat of the products
to be covered by the proposed conformity assessment procedure,
together with a brief indication of its objective and rationale.
Such notifications shall take place at an early appropriate
stage, when amendments can still be introduced and comments taken
into account;

5.6.3upon request, provide to other Members particulars or copies of
the proposed procedure and, whenever possible, identify the parts
which in substance deviate from relevant guides or
recommendations issued by international standardizing bodies;

5.6.4without discrimination, allow reasonable time for other Members
to make comments in writing, discuss these comments upon request,
and take these written comments and the results of these
discussions into account.

5.7 Where urgent problems of safety, health, environmental protection or
national security arise or threaten to arise for a Member, that Member may
omit such of the steps enumerated in paragraph 6 of Article 5 as it finds
necessary provided that the Member, upon adoption of the procedure, shall:

5.7.1notify immediately other Members through the MTO Secretariat of
the particular procedure and the products covered, with a brief
indication of the objective and the rationale of the procedure,
including the nature of the urgent problems;

5.7.2upon request, provide other Members with copies of the rules of
the procedure;

5.7.3without discrimination, allow other Members to present their
comments in writing, discuss these comments upon request, and
take these written comments and the results of these discussions
into account.

5.8 Members shall ensure that all conformity assessment procedures which
have been adopted are published promptly or otherwise made available in such
a manner as to enable interested parties in other Members to become
acquainted with them.

5.9 Except in those urgent circumstances referred to in paragraph 7 of
Article 5, Members shall allow a reasonable interval between the publication
of requirements concerning conformity assessment procedures and their entry
into force in order to allow time for producers in exporting Members, and
particularly in developing country Members, to adapt their products or
methods of production to the requirements of the importing Member.

Article 6

Recognition of Conformity Assessment by Central Government Bodies

With respect to their central government bodies:

6.1 Without prejudice to the provisions of Article 6, paragraphs 3 and 4,
Members shall ensure, whenever possible, that results of conformity
assessment procedures in other Members are accepted, even when those
procedures differ from their own, provided they are satisfied that those
procedures offer an assurance of conformity with applicable technical
regulations or standards equivalent to their own procedures. It is
recognized that prior consultations may be necessary in order to arrive at a
mutually satisfactory understanding regarding, in particular:

(a) adequate and enduring technical competence of the relevant
conformity assessment bodies in the exporting Member, so that
confidence in the continued reliability of their conformity
assessment results can exist; in this regard, verified
compliance, for instance through accreditation, with relevant
guides or recommendations issued by international standardizing
bodies shall be taken into account as an indication of adequate
technical competence;

(b) limitation of the acceptance of conformity assessment results to
those produced by designated bodies in the exporting Member.

6.2 Members shall ensure that their conformity assessment procedures
permit, as far as practicable, the implementation of the provisions in
paragraph 1 of Article 6.

6.3 Members are encouraged, at the request of other Members, to be willing
to enter into negotiations for the conclusion of agreements for the mutual
recognition of results of each other's conformity assessment procedures.
Members may require that such agreements fulfil the criteria of Article 6,
paragraph 1, and give mutual satisfaction regarding their potential for
facilitating trade in the products concerned.

6.4 Members are encouraged to permit participation of conformity
assessment bodies located in the territories of other Members in their
conformity assessment procedures under conditions no less favourable than
those accorded to bodies located within their territory or the territory of
any other country.


Article 7

Procedures for Assessment of Conformity by Local Government Bodies

With respect to their local government bodies within their
territories:

7.1 Members shall take such reasonable measures as may be available to
them to ensure compliance by such bodies with the provisions of Articles 5
and 6, with the exception of the obligation to notify as referred to in
paragraphs 6.2 and 7.1 of Article 5.

7.2 Members shall ensure that the conformity assessment procedures of
local governments on the level directly below that of the central government
in Members are notified in accordance with the provisions of paragraphs 6.2
and 7.1 of Article 5, noting that notifications shall not be required for
conformity assessment procedures the technical content of which is
substantially the same as that of previously notified conformity assessment
procedures of central government bodies of the Members concerned.

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

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

7.5 Members are fully responsible under this Agreement for the observance
of all provisions of Articles 5 and 6. Members shall formulate and
implement positive measures and mechanisms in support of the observance of
the provisions of Articles 5 and 6 by other than central government bodies.

Article 8

Procedures for Assessment of Conformity by Non-Governmental Bodies

8.1 Members shall take such reasonable measures as may be available to
them to ensure that non-governmental bodies within their territories which
operate conformity assessment procedures comply with the provisions of
Articles 5 and 6, with the exception of the obligation to notify proposed
conformity assessment procedures. In addition, Members shall not take
measures which have the effect of, directly or indirectly, requiring or
encouraging such bodies to act in a manner inconsistent with the provisions
of Articles 5 and 6.

8.2 Members shall ensure that their central government bodies rely on
conformity assessment procedures operated by non-governmental bodies only if
these latter bodies comply with the provisions of Articles 5 and 6, with the
exception of the obligation to notify proposed conformity assessment
procedures.


Article 9

International and Regional Systems

9.1 Where a positive assurance of conformity with a technical regulation
or standard is required, Members shall, wherever practicable, formulate and
adopt international systems for conformity assessment and become members
thereof or participate therein.

9.2 Members shall take such reasonable measures as may be available to
them to ensure that international and regional systems for conformity
assessment, in which relevant bodies within their territories are members or
participants, comply with the provisions of Articles 5 and 6. In addition,
Members shall not take any measures which have the effect of, directly or
indirectly, requiring or encouraging such systems to act in a manner
inconsistent with any of the provisions of Articles 5 and 6.

9.3 Members shall ensure that their central government bodies rely on
international or regional conformity assessment systems only to the extent
that these systems comply with the provisions of Articles 5 and 6, as
applicable.

INFORMATION AND ASSISTANCE

Article 10

Information About Technical Regulations, Standards and
Conformity Assessment Procedures

10.1 Each Member shall ensure that an enquiry point exists which is able to
answer all reasonable enquiries from other Members and interested parties in
other Members as well as to provide the relevant documents regarding:

10.1.1any technical regulations adopted or proposed within its
territory by central or local government bodies, by
non-governmental bodies which have legal power to enforce a
technical regulation, or by regional standardizing bodies of
which such bodies are members or participants;

10.1.2any standards adopted or proposed within its territory by
central or local government bodies, or by regional standardizing
bodies of which such bodies are members or participants;

10.1.3any conformity assessment procedures, or proposed conformity
assessment procedures, which are operated within its territory by
central or local government bodies, or by non-governmental bodies
which have legal power to enforce a technical regulation, or by
regional bodies of which such bodies are members or participants;

10.1.4the membership and participation of the Member, or of relevant
central or local government bodies within its territory, in
international and regional standardizing bodies and conformity
assessment systems, as well as in bilateral and multilateral
arrangements within the scope of this Agreement; they shall also
be able to provide reasonable information on the provisions of
such systems and arrangements;

10.1.5the location of notices published pursuant to this Agreement, or
the provision of information as to where such information can be
obtained; and

10.1.6the location of the enquiry points mentioned in paragraph 3 of
Article 10.

10.2 If, however, for legal or administrative reasons more than one enquiry
point is established by a Member, that Member shall provide to the other
Members complete and unambiguous information on the scope of responsibility
of each of these enquiry points. In addition, that Member shall ensure that
any enquiries addressed to an incorrect enquiry point shall promptly be
conveyed to the correct enquiry point.

10.3 Each Member shall take such reasonable measures as may be available to
it to ensure that one or more enquiry points exist which are able to answer
all reasonable enquiries from other Members and interested parties in other
Members as well as to provide the relevant documents or information as to
where they can be obtained regarding:

10.3.1any standards adopted or proposed within its territory by
non-governmental standardizing bodies, or by regional
standardizing bodies of which such bodies are members or
participants; and

10.3.2any conformity assessment procedures, or proposed conformity
assessment procedures, which are operated within its territory by
non-governmental bodies, or by regional bodies of which such
bodies are members or participants;

10.3.3the membership and participation of relevant non-governmental
bodies within its territory in international and regional
standardizing bodies and conformity assessment systems, as well
as in bilateral and multilateral arrangements within the scope of
this Agreement; they shall also be able to provide reasonable
information on the provisions of such systems and arrangements.

10.4 Members shall take such reasonable measures as may be available to
them to ensure that where copies of documents are requested by other Members
or by interested parties in other Members, in accordance with the provisions
of this Agreement, they are supplied at an equitable price (if any) which
shall, apart from the real cost of delivery, be the same for the
nationals[1] of the Member concerned or of any other Member.

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

10.6 The MTO Secretariat will, when it receives notifications in accordance
with the provisions of this Agreement, circulate copies of the notifications
to all Members and interested international standardizing and conformity
assessment bodies, and draw the attention of developing country Members to
any notifications relating to products of particular interest to them.

10.7 Whenever a Member has reached an agreement with any other country or
countries on issues related to technical regulations, standards or
conformity assessment procedures which may have a significant effect on
trade, at least one Member to the agreement shall notify other Members
through the MTO Secretariat of the products to be covered by the agreement
and include a brief description of the agreement. Members concerned are
encouraged to enter, upon request, into consultations with other Members for
the purposes of concluding similar agreements or of arranging for their
participation in such agreements.

10.8 Nothing in this Agreement shall be construed as requiring:

10.8.1the publication of texts other than in the language of the
Member;

10.8.2the provision of particulars or copies of drafts other than in
the language of the Member except as stated in paragraph 5 of
Article 10; or

10.8.3Members to furnish any information, the disclosure of which they
consider contrary to their essential security interests.

10.9 Notifications to the MTO Secretariat shall be in English, French or
Spanish.

10.10 Members shall designate a single central government authority that is
responsible for the implementation on the national level of the provisions
concerning notification procedures under this Agreement except those
included in Annex 3.

10.11 If, however, for legal or administrative reasons the responsibility
for notification procedures is divided among two or more central government
authorities, the Member concerned shall provide to the other Members
complete and unambiguous information on the scope of responsibility of each
of these authorities.

Article 11

Technical Assistance to Other Members

11.1 Members shall, if requested, advise other Members, especially the
developing country Members, on the preparation of technical regulations.

11.2 Members shall, if requested, advise other Members, especially the
developing country Members and shall grant them technical assistance on
mutually agreed terms and conditions regarding the establishment of national
standardizing bodies, and participation in the international standardizing
bodies, and shall encourage their national standardizing bodies to do
likewise.

11.3 Members shall, if requested, take such reasonable measures as may be
available to them to arrange for the regulatory bodies within their
territories to advise other Members, especially the developing country
Members, and shall grant them technical assistance on mutually agreed terms
and conditions regarding:

11.3.1the establishment of regulatory bodies, or bodies for the
assessment of conformity with technical regulations; and

11.3.2the methods by which their technical regulations can best be
met.

11.4 Members shall, if requested, take such reasonable measures as may be
available to them to arrange for advice to be given to other Members,
especially the developing country Members, and shall grant them technical
assistance, on mutually agreed terms and conditions, regarding the
establishment of bodies for the assessment of conformity with standards
adopted within the territory of the requesting Member.

11.5 Members shall, if requested, advise other Members, especially the
developing country Members, and shall grant them technical assistance, on
mutually agreed terms and conditions, regarding the steps that should be
taken by their producers if they wish to have access to systems for
conformity assessment operated by governmental or non-governmental bodies
within the territory of the Member receiving the request.

11.6 Members which are members or participants of international or regional
systems for conformity assessment shall, if requested, advise other Members,
especially the developing country Members, and shall grant them technical
assistance, on mutually agreed terms and conditions, regarding the
establishment of the institutions and legal framework which would enable
them to fulfil the obligations of membership or participation in such
systems.

11.7 Members shall, if so requested, encourage bodies within their
territories which are members or participants of international or regional
systems for conformity assessment to advise other Members, especially the
developing country Members, and should consider requests for technical
assistance from them regarding the establishment of the institutions which
would enable the relevant bodies within their territories to fulfil the
obligations of membership or participation.

11.8 In providing advice and technical assistance to other Members in terms
of Article 11, paragraphs 1 to 7, Members shall give priority to the needs
of the least-developed country Members.

Article 12

Special and Differential Treatment of Developing Country Members

12.1 Members shall provide differential and more favourable treatment to
developing country Members to this Agreement, through the following
provisions as well as through the relevant provisions of other Articles of
this Agreement.

12.2 Members shall give particular attention to the provisions of this
Agreement concerning developing country Members' rights and obligations and
shall take into account the special development, financial and trade needs
of developing country Members in the implementation of this Agreement, both
nationally and in the operation of this Agreement's institutional
arrangements.

12.3 Members shall, in the preparation and application of technical
regulations, standards and conformity assessment procedures, take account of
the special development, financial and trade needs of developing country
Members, with a view to ensuring that such technical regulations, standards
and conformity assessment procedures do not create unnecessary obstacles to
exports from developing country Members.

12.4 Members recognize that, although international standards, guides or
recommendations may exist, in their particular technological and
socio-economic conditions, developing country Members adopt certain
technical regulations, standards or conformity assessment procedures aimed
at preserving indigenous technology and production methods and processes
compatible with their development needs. Members therefore recognize that
developing country Members should not be expected to use international
standards as a basis for their technical regulations or standards, including
test methods, which are not appropriate to their development, financial and
trade needs.

12.5 Members shall take such reasonable measures as may be available to
them to ensure that international standardizing bodies and international
systems for conformity assessment are organized and operated in a way which
facilitates active and representative participation of relevant bodies in
all Members, taking into account the special problems of developing country
Members.

12.6 Members shall take such reasonable measures as may be available to
them to ensure that international standardizing bodies, upon request of
developing country Members, examine the possibility of, and, if practicable,
prepare international standards concerning products of special interest to
developing country Members.

12.7 Members shall, in accordance with the provisions of Article 11,
provide technical assistance to developing country Members to ensure that
the preparation and application of technical regulations, standards and
conformity assessment procedures do not create unnecessary obstacles to the
expansion and diversification of exports from developing country Members. In
determining the terms and conditions of the technical assistance, account
shall be taken of the stage of development of the requesting Members and in
particular of the least-developed country Members.

12.8 It is recognized that developing country Members may face special
problems, including institutional and infrastructural problems, in the field
of preparation and application of technical regulations, standards and
conformity assessment procedures. It is further recognized that the special
development and trade needs of developing country Members, as well as their
stage of technological development, may hinder their ability to discharge
fully their obligations under this Agreement. Members, therefore, shall
take this fact fully into account. Accordingly, with a view to ensuring
that developing country Members are able to comply with this Agreement, the
Committee is enabled to grant, upon request, specified, time-limited
exceptions in whole or in part from obligations under this Agreement. When
considering such requests the Committee shall take into account the special
problems, in the field of preparation and application of technical
regulations, standards and conformity assessment procedures, and the special
development and trade needs of the developing country Member, as well as its
stage of technological development, which may hinder its ability to
discharge fully its obligations under this Agreement. The Committee shall,
in particular, take into account the special problems of the least-developed
country Members.

12.9 During consultations, developed country Members shall bear in mind the
special difficulties experienced by developing country Members in
formulating and implementing standards and technical regulations and
conformity assessment procedures, and in their desire to assist developing
country Members with their efforts in this direction, developed country
Members shall take account of the special needs of the former in regard to
financing, trade and development.

12.10 The Committee shall examine periodically the special and differential
treatment, as laid down in this Agreement, granted to developing country
Members on national and international levels.

INSTITUTIONS, CONSULTATION AND DISPUTE SETTLEMENT

Article 13

The Committee on Technical Barriers to Trade

There shall be established under this Agreement:

13.1 A Committee on Technical Barriers to Trade composed of representatives
from each of the Members (hereinafter referred to as "the Committee"). The
Committee shall elect its own Chairman and shall meet as necessary, but no
less than once a year for the purpose of affording Members the opportunity
of consulting on any matters relating to the operation of this Agreement or
the furtherance of its objectives, and shall carry out such responsibilities
as assigned to it under this Agreement or by the Members.

13.2 Working parties or other bodies as may be appropriate, which shall
carry out such responsibilities as may be assigned to them by the Committee
in accordance with the relevant provisions of this Agreement.

13.3 It is understood that unnecessary duplication should be avoided
between the work under this Agreement and that of governments in other
technical bodies. The Committee shall examine this problem with a view to
minimizing such duplication.

Article 14

Consultation and Dispute Settlement

14.1 Consultations and the settlement of disputes with respect to any
matter affecting the operation of this Agreement shall take place under the
auspices of the Dispute Settlement Body and shall follow, mutatis mutandis,
the provisions of Articles XXII and XXIII of the GATT 1994, as elaborated
and applied by the Understanding Governing the Rules and Procedures for
Settlement of Disputes

14.2 At the request of a party to a dispute, or at its own initiative, a
panel may establish a technical expert group to assist in questions of a
technical nature, requiring detailed consideration by experts.

14.3 Technical expert groups shall be governed by the procedures of Annex
2.

14.4 The dispute settlement provisions set out above can be invoked in
cases where a Member considers that another Member has not achieved
satisfactory results under Articles 3, 4, 7, 8 and 9 and its trade interests
are significantly affected. In this respect, such results shall be
equivalent to those as if the body in question were a Member.


FINAL PROVISIONS

Article 15

Final Provisions

Reservations

15.1 Reservations may not be entered in respect of any of the provisions of
this Agreement without the consent of the other Members.

Review

15.2 Each Member shall, promptly after the date on which the Agreement
Establishing the MTO enters into force for it, inform the Committee of
measures in existence or taken to ensure the implementation and
administration of this Agreement. Any changes of such measures thereafter
shall also be notified to the Committee.

15.3 The Committee shall review annually the implementation and operation
of this Agreement taking into account the objectives thereof.

15.4 Not later than the end of the third year from the entry into force of
the Agreement Establishing the MTO and at the end of each three-year period
thereafter, the Committee shall review the operation and implementation of
this Agreement, including the provisions relating to transparency, with a
view to recommending an adjustment of the rights and obligations of this
Agreement where necessary to ensure mutual economic advantage and balance of
rights and obligations, without prejudice to the provisions of Article 12.
Having regard, inter alia, to the experience gained in the implementation of
the Agreement, the Committee shall, where appropriate, submit proposals for
amendments to the text of this Agreement to the Council for Trade in Goods.

Annexes

15.5 The annexes to this Agreement constitute an integral part thereof.
ANNEX 1

TERMS AND THEIR DEFINITIONS FOR THE
PURPOSE OF THIS AGREEMENT

The terms presented in the sixth edition of the ISO/IEC Guide 2:
1991, General Terms and Their Definitions Concerning Standardization and
Related Activities, shall, when used in this Agreement, have the same
meaning as given in the definitions in the said Guide taking into account
that services are excluded from the coverage of this Agreement.

For the purpose of this Agreement, however, the following definitions
shall apply:

1. Technical regulation

Document which lays down product characteristics or their related
processes and production methods, including the applicable administrative
provisions, with which compliance is mandatory. It may also include or deal
exclusively with terminology, symbols, packaging, marking or labelling
requirements as they apply to a product, process or production method.

Explanatory note

The definition in ISO/IEC Guide 2 is not self-contained, but based on
the so-called "building block" system.

2. Standard

For the term "Standard" the following definition shall apply:

Document approved by a recognized body, that provides, for common and
repeated use, rules, guidelines or characteristics for products or related
processes and production methods, with which compliance is not mandatory.
It may also include or deal exclusively with terminology, symbols,
packaging, marking or labelling requirements as they apply to a product,
process or production method.

Explanatory note

The terms as defined in ISO/IEC Guide 2 cover products, processes and
services. This agreement deals only with technical regulations,
standards and conformity assessment procedures related to products or
processes and production methods. Standards as defined by ISO/IEC
Guide 2 may be mandatory or voluntary. For the purpose of this
Agreement standards are defined as voluntary and technical regulations
as mandatory documents. Standards prepared by the international
standardization community are based on consensus. This Agreement
covers also documents that are not based on consensus.

3. Conformity assessment procedures

Any procedure used, directly or indirectly, to determine that relevant
requirements in technical regulations or standards are fulfilled.

Explanatory note: Conformity assessment procedures include, inter
alia, procedures for sampling, testing and inspection; evaluation,
verification and assurance of conformity; registration, accreditation
and approval as well as their combinations.

4. International body or system

Body or system whose membership is open to the relevant bodies of at
least all Members.

5. Regional body or system

Body or system whose membership is open to the relevant bodies of only
some of the Members.

6. Central government body

Central government, its ministries and departments or any body subject
to the control of the central government in respect of the activity in
question.

Explanatory note:

In the case of the European Communities the provisions governing
central government bodies apply. However, regional bodies or
conformity assessment systems may be established within the European
Communities, and in such cases would be subject to the provisions of
this Agreement on regional bodies or conformity assessment systems.

7. Local government body

Government other than a central government (e.g. states, provinces,
L?nder, cantons, municipalities, etc.), its ministries or departments or any
body subject to the control of such a government in respect of the activity
in question.

8. Non-governmental body

Body other than a central government body or a local government body,
including a non-governmental body which has legal power to enforce a
technical regulation.

ANNEX 2

TECHNICAL EXPERT GROUPS

The following procedures shall apply to technical expert groups
established in accordance with the provisions of Article 14.

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

2. Participation in technical expert groups shall be restricted to
persons of professional standing and experience in the field in question.

3. Citizens of parties to the dispute shall not serve on a technical
expert group without the joint agreement of the parties to the dispute,
except in exceptional circumstances when the panel considers that the need
for specialized scientific expertise cannot be fulfilled otherwise.
Government officials of parties to the dispute shall not serve on a
technical expert group. Members of technical expert groups shall serve in
their individual capacities and not as government representatives, nor as
representatives of any organization. Governments or organizations shall
therefore not give them instructions with regard to matters before a
technical expert group.

4. Technical expert groups may consult and seek information and technical
advice from any source they deem appropriate. Before a technical expert
group seeks such information or advice from a source within the jurisdiction
of a Member, it shall inform the government of that Member. Any Member
shall respond promptly and fully to any request by a technical expert group
for such information as the technical expert group considers necessary and
appropriate.

5. The parties to a dispute shall have access to all relevant information
provided to a technical expert group, unless it is of a confidential nature.
Confidential information provided to the technical expert group shall not be
released without formal authorization from the government, organization or
person providing the information. Where such information is requested from
the technical expert group but release of such information by the technical
expert group is not authorized, a non-confidential summary of the
information will be provided by the government, organization or person
supplying the information.

6. The technical expert group shall submit a draft report to the Members
concerned with a view to obtaining their comments, and taking them into
account, as appropriate, in the final report, which shall also be circulated
to the Members concerned when it is submitted to the panel.

ANNEX 3

CODE OF GOOD PRACTICE FOR THE PREPARATION, ADOPTION AND
APPLICATION OF STANDARDS

General Provisions

A. For the purposes of this Code the definitions in Annex 1 of this
Agreement shall apply.

B. This Code is open to acceptance by any standardizing body within the
territory of a Member of the MTO, whether a central government body, a local
government body, or a non-governmental body; to any governmental regional
standardizing body one or more members of which are Member of the MTO; and
to any non-governmental regional standardizing body one or more members of
which are situated within the territory of a Member of the MTO (hereafter
collectively called "standardizing bodies" and individually "the
standardizing body").

C. Standardizing bodies that have accepted or withdrawn from this Code
shall notify this fact to the ISO/IEC Information Centre in Geneva. The
notification shall include the name and address of the body concerned and
the scope of its current and expected standardization activities. The
notification may be sent either directly to the ISO/IEC Information Centre,
or through the national member body of ISO/IEC or, preferably, through the
relevant national member or international affiliate of ISONET, as
appropriate.

SUBSTANTIVE PROVISIONS

D. In respect of standards, the standardizing body shall accord treatment
to products originating in the territory of any other Member of the MTO no
less favourable than that accorded to like products of national origin and
to like products originating in any other country.

E. The standardizing body shall ensure that standards are not prepared,
adopted or applied with a view to, or with the effect of, creating
unnecessary obstacles to international trade.

F. Where international standards exist or their completion is imminent,
the standardizing body shall use them, or the relevant parts of them, as a
basis for the standards it develops, except where such international
standards or relevant parts would be ineffective or inappropriate, for
instance, because of an insufficient level of protection or fundamental
climatic or geographical factors or fundamental technological problems.

G. With a view to harmonizing standards on as wide a basis as possible,
the standardizing body shall, in an appropriate way, play a full part within
the limits of its resources in the preparation by relevant international
standardizing bodies of international standards regarding subject matter for
which it either has adopted, or expects to adopt, standards. For
standardizing bodies within the territory of a Member, participation in a
particular international standardization activity shall, whenever possible,
take place through one delegation representing all standardizing bodies in
the territory that have adopted, or expect to adopt, standards for the
subject matter to which the international standardization activity relates.

H. The standardizing body within the territory of a Member shall make
every effort to avoid duplication of, or overlap with, the work of other
standardizing bodies in the national territory or with the work of relevant
international or regional standardizing bodies. They shall also make every
effort to achieve a national consensus on the standards they develop.
Likewise the regional standardizing body shall make every effort to avoid
duplication of, or overlap with, the work of relevant international
standardizing bodies.

I. Wherever appropriate, the standardizing body shall specify standards
based on product requirements in terms of performance rather than design or
descriptive characteristics.

J. At least once every six months, the standardizing body shall publish a
work programme containing its name and address, the standards it is
currently preparing and the standards which it has adopted in the preceding
period. A standard is under preparation from the moment a decision has been
taken to develop a standard until that standard has been adopted. The
titles of specific draft standards shall, upon request, be provided in
English, French or Spanish. A notice of the existence of the work programme
shall be published in a national or, as the case may be, regional
publication of standardization activities.

The work programme shall for each standard indicate, in accordance
with any ISONET rules, the classification relevant to the subject matter,
the stage attained in the standard's development, and the references of any
international standards taken as a basis. No later than at the time of
publication of its work programme, the standardizing body shall notify the
existence thereof to the ISO/IEC Information Centre in Geneva.

The notification shall contain the name and address of the
standardizing body, the name and issue of the publication in which the work
programme is published, the period to which the work programme applies, its
price (if any), and how and where it can be obtained. The notification may
be sent directly to the ISO/IEC Information Centre, or, preferably, through
the relevant national member or international affiliate of ISONET, as
appropriate.

K. The national member of ISO/IEC shall make every effort to become a
member of ISONET or to appoint another body to become a member as well as to
acquire the most advanced membership type possible for the ISONET member.
Other standardizing bodies shall make every effort to associate themselves
with the ISONET member.

L. Before adopting a standard, the standardizing body shall allow a
period of at least sixty days for the submission of comments on the draft
standard by interested parties within the territory of a Member of the MTO.
This period may, however, be shortened in cases where urgent problems of
safety, health or environment arise or threaten to arise. No later than at
the start of the comment period, the standardizing body shall publish a
notice announcing the period for commenting in the publication referred to
in paragraph J. Such notification shall include, as far as practicable,
whether the draft standard deviates from relevant international standards.

M. On the request of any interested party within the territory of a
Member of the MTO, the standardizing body shall promptly provide, or arrange
to provide, a copy of a draft standard which it has submitted for comments.
Any fees charged for this service shall, apart from the real cost of
delivery, be the same for domestic and foreign parties.

N. The standardizing body shall take into account, in the further
processing of the standard, the comments received during the period for
commenting. Comments received through standardizing bodies that have
accepted this Code of good practice shall, if so requested, be replied to as
promptly as possible. The reply shall include an explanation why a
deviation from relevant international standards is necessary.

O. Once the standard has been adopted, it shall be promptly published.

P. On the request of any interested party within the territory of a
Member of the MTO, the standardizing body shall promptly provide or arrange
to provide a copy of its most recent work programme or of a standard which
it produced. Any fees charged for this service shall, apart from the real
costs of delivery, be the same for foreign and domestic parties.

Q. The standardizing body shall afford sympathetic consideration to, and
adequate opportunity for, consultation regarding representations with
respect to the operation of this Code presented by standardizing bodies that
have accepted this Code of good practice. It shall make an objective effort
to solve any complaints.


1.'Nationals' here shall be deemed, in the case of a separate customs
territory Member of the MTO, to mean persons, natural or legal, who are
domiciled or who have a real and effective industrial or commercial
establishment in that customs territory.



AGREEMENT ON TRADE-RELATED INVESTMENT MEASURES

Members,

Considering that Ministers agreed in the Punta del Este Declaration
that "Following an examination of the operation of GATT Articles related to
the trade restrictive and distorting effects of investment measures,
negotiations should elaborate, as appropriate, further provisions that may
be necessary to avoid such adverse effects on trade";

Desiring to promote the expansion and progressive liberalisation of
world trade and to facilitate investment across international frontiers so
as to increase the economic growth of all trading partners, and particularly
developing country Members while ensuring free competition;

Taking into account the particular trade, development and financial
needs of developing country Members, particularly those of the
least-developed country Members;

Recognizing that certain investment measures can cause trade
restrictive and distorting effects;

Hereby agree as follows:

Article 1
Coverage

This Agreement applies to investment measures related to trade in
goods only (hereafter referred to as "TRIMs").

Article 2
National Treatment and Quantitative Restrictions

1. Without prejudice to other rights and obligations under the GATT 1994,
no Member shall apply any TRIM that is inconsistent with the provisions of
Article III or Article XI of the GATT 1994.

2. An illustrative list of TRIMs that are inconsistent with the
obligation of national treatment provided for in Article III:4 of the GATT
1994 and the obligation of the general elimination of quantitative
restrictions provided for in Article XI:1 of the GATT 1994 is contained in
the Annex to this Agreement.

Article 3
Exceptions

All exceptions under the GATT 1994 shall apply, as appropriate, to the
provisions of this Agreement.

Article 4Developing Country Members

A developing country Member shall be free to deviate temporarily from
the provisions of Article 2 above to the extent and in such a manner as
Article XVIII of the GATT 1994, the Understanding on the Balance-of-Payments
Provisions of the General Agreement on Tariffs and Trade 1994, and the 1979
Declaration on Trade Measures Taken for Balance-of-Payments Purposes permit
the Member to deviate from the provisions of Articles III and XI of the GATT
1994.

Article 5
Notification and Transitional Arrangements

1. Members, within ninety days of the entry into force of the Agreement
Establishing the MTO, shall notify the Council for Trade in Goods of all
TRIMs they are applying that are not in conformity with the provisions of
this Agreement. Such TRIMs of general or specific application shall be
notified, along with their principal features.[1]

2. Each Member shall eliminate all TRIMs which are notified under
paragraph 1 above within two years of the date of entry into force of the
Agreement Establishing the MTO in the case of a developed country Member,
within five years in the case of a developing country Member, and within
seven years in the case of a least-developed country Member.

3. On request, the Council for Trade in Goods may extend the transition
period for the elimination of TRIMs notified under paragraph 1 above for a
developing country Member, including a least-developed country Member, which
demonstrates particular difficulties in implementing the provisions of this
Agreement. In considering such a request, the Council for Trade in Goods
shall take into account the individual development, financial and trade
needs of the Member in question.

4. During the transition period, a Member shall not modify the terms of
any TRIM which it notifies under paragraph 1 above from those prevailing at
the date of entry into force of the Agreement Establishing the MTO so as to
increase the degree of inconsistency with the provisions of Article 2 above.
TRIMs introduced less than 180 days before the entry into force of the
Agreement Establishing the MTO shall not benefit from the transitional
arrangements provided in paragraph 2 above.

5. Notwithstanding the provisions of Article 2 above, a Member, in order
not to disadvantage established enterprises which are subject to a TRIM
notified under paragraph 1 above, may apply during the transition period the
same TRIM to a new investment (i) where the products of such investment are
like products to those of the established enterprises, and (ii) where
necessary to avoid distorting the conditions of competition between the new
investment and the established enterprises. Any TRIM so applied to a new
investment shall be notified to the Council for Trade in Goods. The terms
of such a TRIM shall be equivalent in their competitive effect to those
applicable to the established enterprises, and it shall be terminated at the
same time.

Article 6
Transparency

1. Members reaffirm, with respect to TRIMs, their commitment to
obligations on transparency and notification in Article X of the GATT 1994,
in the undertaking on "Notification" contained in the 1979 Understanding
Regarding Notification, Consultation, Dispute Settlement and Surveillance
and in the Ministerial Decision on Notification Procedures.

2. Each Member shall notify the MTO Secretariat of the publications in
which TRIMs may be found, including those applied by regional and local
governments and authorities within their territories.
3. Each Member shall accord sympathetic consideration to requests for
information, and afford adequate opportunity for consultation, on any matter
arising from this Agreement raised by another Member. In conformity with
Article X of the GATT 1994 no Member is required to disclose information the
disclosure of which would impede law enforcement or otherwise be contrary to
the public interest or would prejudice the legitimate commercial interests
of particular enterprises, public or private.

Article 7
Committee on TRIMs

1. A Committee on Trade-Related Investment Measures shall be established,
open to all Members of the MTO. The Committee shall elect its own Chairman
and Vice-Chairman, and shall meet not less than once a year and otherwise at
the request of any Member.

2. The Committee shall carry out responsibilities assigned to it by the
Council for Trade in Goods and shall afford Members the opportunity to
consult on any matters relating to the operation and implementation of this
Agreement.

3. The Committee shall monitor the operation and implementation of this
Agreement and shall report thereon annually to the Council for Trade in
Goods.

Article 8
Consultation and Dispute Settlement

The provisions of Articles XXII and XXIII of the GATT 1994, as
elaborated and applied by the Understanding on Rules and Procedures
Governing the Settlement of Disputes, shall apply to consultations and the
settlement of disputes under this Agreement.

Article 9
Review by the Council for Trade in Goods

Not later than five years after the date of entry into force of the
Agreement Establishing the MTO, the Council for Trade in Goods shall review
the operation of this Agreement and, as appropriate, propose to the
Ministerial Conference amendments to its text. In the course of this
review, the Council for Trade in Goods shall consider whether it should be
complemented with provisions on investment policy and competition policy.

ANNEX

Illustrative List

1. TRIMs that are inconsistent with the obligation of national treatment
provided for in Article III:4 of the GATT 1994 include those which are
mandatory or enforceable under domestic law or under administrative rulings,
or compliance with which is necessary to obtain an advantage, and which
require:

(a) the purchase or use by an enterprise of products of domestic
origin or from any domestic source, whether specified in terms of
particular products, in terms of volume or value of products, or
in terms of a proportion of volume or value of its local
production; or

(b) that an enterprise's purchases or use of imported products be
limited to an amount related to the volume or value of local
products that it exports.

2. TRIMs that are inconsistent with the obligation of the general
elimination of quantitative restrictions provided for in Article XI:1 of the
GATT 1994 include those which are mandatory or enforceable under domestic
law or under administrative rulings, or compliance with which is necessary
to obtain an advantage, and which restrict:

(a) the importation by an enterprise of products used in or related
to its local production, generally or to an amount related to the
volume or value of local production that it exports;

(b) the importation by an enterprise of products used in or related
to its local production by restricting its access to foreign
exchange to an amount related to the foreign exchange inflows
attributable to the enterprise; or

© the exportation or sale for export by an enterprise of products,
whether specified in terms of particular products, in terms of
volume or value of products, or in terms of a proportion of
volume or value of its local production.

1. In the case of TRIMs applied under discretionary authority each specific
application shall be notified. Information that would prejudice the
legitimate commercial interests of particular enterprises need not be
disclosed.


AGREEMENT ON IMPLEMENTATION OF
ARTICLE VI OF GATT 1994

PART I

Article 1

Principles

An anti-dumping measure shall be applied only under the circumstances
provided for in Article VI of the GATT 1994 and pursuant to investigations
initiated[1] and conducted in accordance with the provisions of this
Agreement. The following provisions govern the application of Article VI of
the GATT 1994 in so far as action is taken under anti-dumping legislation or
regulations.

Article 2

Determination of Dumping

2.1 For the purpose of this Agreement a product is to be considered as
being dumped, i.e., introduced into the commerce of another country at less
than its normal value, if the export price of the product exported from one
country to another is less than the comparable price, in the ordinary course
of trade, for the like product when destined for consumption in the
exporting country.

2.2 When there are no sales of the like product in the ordinary course of
trade in the domestic market of the exporting country or when, because of
the particular market situation or the low volume of the sales in the
domestic market of the exporting country[2], such sales do not permit a
proper comparison, the margin of dumping shall be determined by comparison
with a comparable price of the like product when exported to an appropriate
third country provided that this price is representative, or with the cost
of production in the country of origin plus a reasonable amount for
administrative, selling and any other costs and for profits.

2.2.1Sales of the like product in the domestic market of the exporting
country or sales to a third country at prices below per unit
(fixed and variable) costs of production plus selling, general
and administrative costs may be treated as not being in the
ordinary course of trade by reason of price and may be
disregarded in determining normal value only if the
authorities[3] determine that such sales are made within an
extended period of time[4] in substantial quantities[5] and are
at prices which do not provide for the recovery of all costs
within a reasonable period of time. If prices which are below
costs at the time of sale are above weighted average costs for
the period of investigation, such prices shall be considered to
provide for recovery of costs within a reasonable period of time.

2.2.1.1 For the purpose of paragraph 2 of this Article, costs
shall normally be calculated on the basis of records
kept by the exporter or producer under investigation,
provided that such records are in accordance with the
generally accepted accounting principles of the
exporting country and reasonably reflect the costs
associated with the production and sale of the product
under consideration. Authorities shall consider all
available evidence on the proper allocation of costs,
including that which is made available by the exporter
or producer in the course of the investigation
provided that such allocations have been historically
utilized by the exporter or producer, in particular
in relation to establishing appropriate amortization
and depreciation periods and allowances for capital
expenditures and other development costs. Unless
already reflected in the cost allocations under this
sub-paragraph, costs shall be adjusted appropriately
for those non-recurring items of cost which benefit
future and/or current production, or for circumstances
in which costs during the period of investigation are
affected by start-up operations.[6]

2.2.2For the purpose of paragraph 2 of this Article, the amounts for
administrative selling and any other costs and for profits shall
be based on actual data pertaining to production and sales in the
ordinary course of trade of the like product by the exporter or
producer under investigation. When such amounts cannot be
determined on this basis, the amounts may be determined on the
basis of:

(i) the actual amounts incurred and realized by the exporter or
producer in question in respect of production and sales in
the domestic market of the country of origin of the same
general category of products;

(ii) the weighted average of the actual amounts incurred and
realized by other exporters or producers subject to
investigation in respect of production and sales of the
like product in the domestic market of the country of
origin;

(iii) any other reasonable method, provided that the amount for
profit so established shall not exceed the profit normally
realized by other exporters or producers on sales of
products of the same general category in the domestic
market of the country of origin.

2.3 In cases where there is no export price or where it appears to the
authorities concerned that the export price is unreliable because of
association or a compensatory arrangement between the exporter and the
importer or a third party, the export price may be constructed on the basis
of the price at which the imported products are first resold to an
independent buyer, or if the products are not resold to an independent
buyer, or not resold in the condition as imported, on such reasonable basis
as the authorities may determine.

2.4 A fair comparison shall be made between the export price and the
normal value. This comparison shall be made at the same level of trade,
normally at the ex-factory level, and in respect of sales made at as nearly
as possible the same time. Due allowance shall be made in each case, on its
merits, for differences which affect price comparability, including
differences in conditions and terms of sale, taxation, levels of trade,
quantities, physical characteristics, and any other differences which are
also demonstrated to affect price comparability.[7] In the cases referred
to in paragraph 3 of Article 2, allowances for costs, including duties and
taxes, incurred between importation and resale, and for profits accruing,
should also be made. If in these cases, price comparability has been
affected, the authorities shall establish the normal value at a level of
trade equivalent to the level of trade of the constructed export price, or
make due allowance as warranted under this paragraph. The authorities shall
indicate to the parties in question what information is necessary to ensure
a fair comparison and shall not impose an unreasonable burden of proof on
those parties.

2.4.1When the price comparison under this paragraph requires a
conversion of currencies, such conversion should be made using
the rate of exchange on the date of sale[8], provided that when a
sale of foreign currency on forward markets is directly linked to
the export sale involved, the rate of exchange in the forward
sale shall be used. Fluctuations in exchange rates shall be
ignored and, in an investigation the authorities shall allow
exporters at least 60 days to have adjusted their export prices
to reflect sustained movements during the period of
investigation.

2.4.2Subject to the provisions governing fair comparison in paragraph
4 of this Article, the existence of margins of dumping during the
investigation phase shall normally be established on the basis of
a comparison of a weighted average normal value with a weighted
average of prices of all comparable export transactions or by a
comparison of normal value and export prices on a transaction to
transaction basis. A normal value established on a weighted
average basis may be compared to prices of individual export
transactions if the authorities find a pattern of export prices
which differ significantly among different purchasers, regions or
time periods and if an explanation is provided why such
differences cannot be taken into account appropriately by the use
of a weighted average-to-weighted average or
transaction-to-transaction comparison.

2.5 In the case where products are not imported directly from the country
of origin but are exported to the country of importation from an
intermediate country, the price at which the products are sold from the
country of export to the country of importation shall normally be compared
with the comparable price in the country of export. However, comparison may
be made with the price in the country of origin, if, for example, the
products are merely trans-shipped through the country of export, or such
products are not produced in the country of export, or there is no
comparable price for them in the country of export.

2.6 Throughout this Agreement the term "like product" ("produit
similaire") shall be interpreted to mean a product which is identical, i.e.,
alike in all respects to the product under consideration, or in the absence
of such a product, another product which although not alike in all respects,
has characteristics closely resembling those of the product under
consideration.

2.7 This Article is without prejudice to the second Supplementary
Provision to paragraph 1 of Article VI in Annex I to the GATT 1994.

Article 3

Determination of Injury[9]

3.1 A determination of injury for purposes of Article VI of the GATT 1994
shall be based on positive evidence and involve an objective examination of
both (a) the volume of the dumped imports and the effect of the dumped
imports on prices in the domestic market for like products, and (b) the
consequent impact of these imports on domestic producers of such products.

3.2 With regard to the volume of the dumped imports, the investigating
authorities shall consider whether there has been a significant increase in
dumped imports, either in absolute terms or relative to production or
consumption in the importing country. With regard to the effect of the
dumped imports on prices, the investigating authorities shall consider
whether there has been a significant price undercutting by the dumped
imports as compared with the price of a like product of the importing
country, or whether the effect of such imports is otherwise to depress
prices to a significant degree or prevent price increases, which otherwise
would have occurred, to a significant degree. No one or several of these
factors can necessarily give decisive guidance.

3.3 Where imports of a product from more than one country are
simultaneously subject to anti-dumping investigations, the investigating
authorities may cumulatively assess effects of such imports only if they
determine that (1) the margin of dumping established in relation to the
imports from each country is more than de minimis as defined in paragraph 8
of Article 5 and that the volume of imports from each country is not
negligible and (2) a cumulative assessment of the effects of the imports is
appropriate in light of the conditions of competition between imported
products and the conditions of competition between the imported products and
the like domestic product.

3.4 The examination of the impact of the dumped imports on the domestic
industry concerned shall include an evaluation of all relevant economic
factors and indices having a bearing on the state of the industry, including
actual and potential decline in sales, profits, output, market share,
productivity, return on investments, or utilization of capacity; factors
affecting domestic prices; the magnitude of the margin of dumping; actual
and potential negative effects on cash flow, inventories, employment, wages,
growth, ability to raise capital or investments. This list is not
exhaustive, nor can one or several of these factors necessarily give
decisive guidance.

3.5 It must be demonstrated that the dumped imports are, through the
effects of dumping, as set forth in paragraphs 2 and 4 of this Article,
causing injury within the meaning of this Agreement. The demonstration of a
causal relationship between the dumped imports and the injury to the
domestic industry shall be based on an examination of all relevant evidence
before the authorities. The authorities shall also examine any known
factors other than the dumped imports which at the same time are injuring
the domestic industry, and the injuries caused by these other factors must
not be attributed to the dumped imports. Factors which may be relevant in
this respect include, inter alia, the volume and prices of imports not sold
at dumping prices, contraction in demand or changes in the patterns of
consumption, trade restrictive practices of and competition between the
foreign and domestic producers, developments in technology and the export
performance and productivity of the domestic industry.

3.6 The effect of the dumped imports shall be assessed in relation to the
domestic production of the like product when available data permit the
separate identification of that production on the basis of such criteria as
the production process, producers' sales and profits. If such separate
identification of that production is not possible, the effects of the dumped
imports shall be assessed by the examination of the production of the
narrowest group or range of products, which includes the like product, for
which the necessary information can be provided.

3.7 A determination of a threat of material injury shall be based on facts
and not merely on allegation, conjecture or remote possibility. The change
in circumstances which would create a situation in which the dumping would
cause injury must be clearly foreseen and imminent.[10] In making a
determination regarding the existence of a threat of material injury, the
authorities should consider, inter alia, such factors as:

(i) a significant rate of increase of dumped imports into the
domestic market indicating the likelihood of substantially
increased importations;

(ii) sufficient freely disposable or an imminent, substantial increase
in capacity of the exporter indicating the likelihood of
substantially increased dumped exports to the importing country's
market, taking into account the availability of other export
markets to absorb any additional exports;

(iii)whether imports are entering at prices that will have a
significant depressing or suppressing effect on domestic prices,
and would likely increase demand for further imports; and

(iv) inventories of the product being investigated.

No one of these factors by itself can necessarily give decisive guidance but
the totality of the factors considered must lead to the conclusion that
further dumped exports are imminent and that, unless protective action is
taken, material injury would occur.

3.8 With respect to cases where injury is threatened by dumped imports,
the application of anti-dumping measures shall be considered and decided
with special care.

Article 4

Definition of Domestic Industry

4.1 For the purposes of this Agreement, the term "domestic industry" shall
be interpreted as referring to the domestic producers as a whole of the like
products or to those of them whose collective output of the products
constitutes a major proportion of the total domestic production of those
products, except that
(i) when producers are related[11] to the exporters or importers or
are themselves importers of the allegedly dumped product, the
term "domestic industry" may be interpreted as referring to the
rest of the producers;

(ii) in exceptional circumstances the territory of a Member may, for
the production in question, be divided into two or more
competitive markets and the producers within each market may be
regarded as a separate industry if (a) the producers within such
market sell all or almost all of their production of the product
in question in that market, and (b) the demand in that market is
not to any substantial degree supplied by producers of the
product in question located elsewhere in the territory. In such
circumstances, injury may be found to exist even where a major
portion of the total domestic industry is not injured, provided
there is a concentration of dumped imports into such an isolated
market and provided further that the dumped imports are causing
injury to the producers of all or almost all of the production
within such market.

4.2 When the domestic industry has been interpreted as referring to the
producers in a certain area, i.e., a market as defined in paragraph 1(ii),
anti-dumping duties shall be levied[12] only on the products in question
consigned for final consumption to that area. When the constitutional law
of the importing country does not permit the levying of anti-dumping duties
on such a basis, the importing Member may levy the anti-dumping duties
without limitation only if (1) the exporters shall have been given an
opportunity to cease exporting at dumped prices to the area concerned or
otherwise give assurances pursuant to Article 8 of this Agreement, and
adequate assurances in this regard have not been promptly given, and (2)
such duties cannot be levied only on products of specific producers which
supply the area in question.

4.3 Where two or more countries have reached under the provisions of
paragraph 8(a) of Article XXIV of the GATT 1994 such a level of integration
that they have the characteristics of a single, unified market, the industry
in the entire area of integration shall be taken to be the domestic industry
referred to in paragraph 1 above.

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

Article 5

Initiation and Subsequent Investigation

5.1 Except as provided for in paragraph 6 of Article 5, an investigation
to determine the existence, degree and effect of any alleged dumping shall
be initiated upon a written application by or on behalf of the domestic
industry.

5.2 An application under paragraph 1 shall include evidence of (a)
dumping, (b) injury within the meaning of Article VI of the GATT 1994 as
interpreted by this Agreement and © a causal link between the dumped
imports and the alleged injury. Simple assertion, unsubstantiated by
relevant evidence, cannot be considered sufficient to meet the requirements
of this paragraph. The application shall contain such information as is
reasonably available to the applicant on the following:

(i) identity of the applicant and a description of the volume and
value of the domestic production of the like product by the
applicant. Where a written application is made on behalf of the
domestic industry, the application shall identify the industry on
behalf of which the application is made by a list of all known
domestic producers of the like product (or associations of
domestic producers of the like product) and, to the extent
possible, a description of the volume and value of domestic
production of the like product accounted for by such producers;

(ii) a complete description of the allegedly dumped product, the names
of the country or countries of origin or export in question, the
identity of each known exporter or foreign producer and a list of
known persons importing the product in question;

(iii)information on prices at which the product in question is sold
when destined for consumption in the domestic markets of the
country or countries of origin or export (or, where appropriate,
information on the prices at which the product is sold from the
country or countries of origin or export to a third country or
countries or on the constructed value of the product) and
information on export prices or, where appropriate, on the prices
at which the product is first resold to an independent buyer in
the importing country;

(iv) information on the evolution of the volume of the allegedly
dumped imports, the effect of these imports on prices of the like
product in the domestic market and the consequent impact of the
imports on the domestic industry, as demonstrated by relevant
factors and indices having a bearing on the state of the domestic
industry, such as those listed in paragraphs 2 and 4 of Article
3.

5.3 The authorities shall examine the accuracy and adequacy of the
evidence provided in the application to determine whether there is
sufficient evidence to justify the initiation of an investigation.

5.4 An investigation shall not be initiated pursuant to paragraph 1 unless
the authorities have determined, on the basis of an examination of the
degree of support for, or opposition to, the application expressed[13] by
domestic producers of the like product, that the application has been made
by or on behalf of the domestic industry.[14] The application shall be
considered to have been made "by or on behalf of the domestic industry" if
it is supported by those domestic producers whose collective output
constitutes more than 50 per cent of the total production of the like
product produced by that portion of the domestic industry expressing either
support for or opposition to the application. However, no investigation
shall be initiated when domestic producers expressly supporting the
application account for less than 25 per cent of total production of the
like product produced by the domestic industry.

5.5 The authorities shall avoid, unless a decision has been made to
initiate an investigation, any publicizing of the application for the
initiation of an investigation. However, after receipt of a properly
documented application and before proceeding to initiate an investigation,
the authorities shall notify the government of the exporting country
concerned.

5.6 If in special circumstances, the authorities concerned decide to
initiate an investigation without having received a written application by
or on behalf of a domestic industry for the initiation of such
investigation, they shall proceed only if they have sufficient evidence of
dumping, injury and a causal link, as described in paragraph 2, to justify
the initiation of an investigation.

5.7 The evidence of both dumping and injury shall be considered
simultaneously (a) in the decision whether or not to initiate an
investigation, and (b) thereafter, during the course of the investigation,
starting on a date not later than the earliest date on which in accordance
with the provisions of this Agreement provisional measures may be applied.

5.8 An application under paragraph 1 shall be rejected and an
investigation shall be terminated promptly as soon as the authorities
concerned are satisfied that there is not sufficient evidence of either
dumping or of injury to justify proceeding with the case. There shall be
immediate termination in cases where the authorities determine that the
margin of dumping is de minimis, or that the volume of dumped imports,
actual or potential, or the injury, is negligible. The margin of dumping
shall be considered to be de minimis if this margin is less than 2 per cent,
expressed as a percentage of the export price. The volume of dumped imports
shall normally be regarded as negligible if the volume of dumped imports
from a particular country is found to account for less than 3 per cent of
imports of the like product in the importing country unless countries which
individually account for less than 3 per cent of the imports of the like
product in the importing country collectively account for more than 7 per
cent of imports of the like product in the importing country.

5.9 An anti-dumping proceeding shall not hinder the procedures of customs
clearance.

5.10 Investigations shall, except in special circumstances, be concluded
within one year after their initiation, and in no case more than 18 months.

Article 6

Evidence

6.1 All interested parties in an anti-dumping investigation shall be given
notice of the information which the authorities require and ample
opportunity to present in writing all evidence which they consider relevant
in respect of the investigation in question.

6.1.1Exporters or foreign producers receiving questionnaires used in
an anti-dumping investigation shall be given at least thirty days
for reply.[15] Due consideration should be given to any request
for an extension of the thirty day period and, upon cause shown,
such an extension should be granted whenever practicable.

6.1.2Subject to the requirement to protect confidential information,
evidence presented in writing by one interested party shall be
made available promptly to other interested parties participating
in the investigation.

6.1.3As soon as an investigation has been initiated, the authorities
shall provide the full text of the written application received
under paragraph 1 of Article 5 to the known exporters[16] and to
the authorities of the exporting country and make it available,
upon request, to other interested parties involved. Due regard
shall be paid to the requirement for the protection of
confidential information as provided for in paragraph 5 below.

6.2 Throughout the anti-dumping investigation all interested parties shall
have a full opportunity for the defence of their interests. To this end,
the authorities shall, on request, provide opportunities for all interested
parties to meet those parties with adverse interests, so that opposing views
may be presented and rebuttal arguments offered. Provision of such
opportunities must take account of the need to preserve confidentiality and
of the convenience to the parties. There shall be no obligation on any
party to attend a meeting, and failure to do so shall not be prejudicial to
that party's case. Interested parties shall also have the right, on
justification, to present other information orally.

6.3 Oral information provided under paragraph 2 shall be taken into
account by the authorities only insofar as it is subsequently reproduced in
writing and made available to other interested parties, as provided for in
sub-paragraph 1.2.

6.4 The authorities shall whenever practicable provide timely
opportunities for all interested parties to see all information that is
relevant to the presentation of their cases, that is not confidential as
defined in paragraph 5 and that is used by the authorities in an
anti-dumping investigation, and to prepare presentations on the basis of
this information.

6.5 Any information which is by nature confidential, (for example, because
its disclosure would be of significant competitive advantage to a competitor
or because its disclosure would have a significantly adverse effect upon a
person supplying the information or upon a person from whom he acquired the
information) or which is provided on a confidential basis by parties to an
investigation shall, upon good cause shown, be treated as such by the
authorities. Such information shall not be disclosed without specific
permission of the party submitting it.[17]

6.5.1The authorities shall require interested parties providing
confidential information to furnish non-confidential summaries
thereof. These summaries shall be in sufficient detail to permit
a reasonable understanding of the substance of the information
submitted in confidence. In exceptional circumstances, such
parties may indicate that such information is not susceptible of
summary. In such exceptional circumstances, a statement of the
reasons why summarization is not possible must be provided.

6.5.2If the authorities find that a request for confidentiality is not
warranted and if the supplier of the information is either
unwilling to make the information public or to authorize its
disclosure in generalized or summary form, the authorities may
disregard such information unless it can be demonstrated to their
satisfaction from appropriate sources that the information is
correct.[18]

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

6.7 In order to verify information provided or to obtain further details,
the authorities may carry out investigations in other countries as required,
provided they obtain the agreement of the firms concerned and provided they
notify the representatives of the government of the country in question and
unless the latter object to the investigation. The procedures described in
Annex I shall apply to verifications carried out in exporting countries.
The authorities shall, subject to the requirement to protect confidential
information, make the results of any verifications available or provide
disclosure thereof pursuant to paragraph 9, to the firms to which they
pertain and may make such results available to the applicants.

6.8 In cases in which any interested party refuses access to, or otherwise
does not provide, necessary information within a reasonable period or
significantly impedes the investigation, preliminary and final
determinations, affirmative or negative, may be made on the basis of the
facts available. The provisions of Annex II shall be observed in the
application of this paragraph.

6.9 The authorities shall, before a final determination is made, inform
all interested parties of the essential facts under consideration which form
the basis for the decision whether to apply definitive measures. Such
disclosure should take place in sufficient time for the parties to defend
their interests.

6.10 The authorities shall, as a rule, determine an individual margin of
dumping for each known exporter or producer concerned of the product under
investigation. In cases where the number of exporters, producers, importers
or types of products involved is so large as to make such a determination
impracticable, the authorities may limit their examination either to a
reasonable number of interested parties or products by using samples which
are statistically valid on the basis of information available to the
authorities at the time of the selection, or to the largest percentage of
the volume of the exports from the country in question which can reasonably
be investigated.

6.10.1Any selection of exporters, producers, importers or types of
products made under this paragraph shall preferably be chosen in
consultation with and with the consent of the exporters,
producers or importers concerned.

6.10.2In cases where the authorities have limited their examination,
as provided for in this paragraph, they shall nevertheless
determine an individual margin of dumping for any exporter or
producer not initially selected who submits the necessary
information in time for that information to be considered during
the course of the investigation, except where the number of
exporters or producers is so large that individual examinations
would be unduly burdensome to the authorities and prevent the
timely completion of the investigation. Voluntary responses
shall not be discouraged.

6.11 For the purposes of this Agreement, "interested parties" shall
include:

(i) an exporter or foreign producer or the importer of a product
subject to investigation, or a trade or business association a
majority of the members of which are producers, exporters or
importers of such product;

(ii) the government of the exporting country; and

(iii)a producer of the like product in the importing country or a
trade and business association a majority of the members of which
produce the like product in the importing country.

This list shall not preclude Members from allowing domestic or foreign
parties other than those mentioned above to be included as interested
parties.

6.12 The authorities shall provide opportunities for industrial users of
the product under investigation, and for representative consumer
organizations in cases where the product is commonly sold at the retail
level, to provide information which is relevant to the investigation
regarding dumping, injury and causality.

6.13 The authorities shall take due account of any difficulties experienced
by interested parties, in particular small companies, in supplying
information requested and provide any assistance practicable.

6.14 The procedures set out above are not intended to prevent the
authorities of a Member from proceeding expeditiously with regard to
initiating an investigation, reaching preliminary or final determinations,
whether affirmative or negative, or from applying provisional or final
measures, in accordance with relevant provisions of this Agreement.

Article 7

Provisional Measures

7.1 Provisional measures may be applied only if:

(i) an investigation has been initiated in accordance with the
provisions of Article 5, a public notice has been given to that
effect and interested parties have been given adequate
opportunities to submit information and make comments;

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

(iii)the authorities concerned judge such measures necessary to
prevent injury being caused during the investigation.

7.2 Provisional measures may take the form of a provisional duty or,
preferably, a security - by cash deposit or bond - equal to the amount of
the anti-dumping duty provisionally estimated, being not greater than the
provisionally estimated margin of dumping. Withholding of appraisement is
an appropriate provisional measure, provided that the normal duty and the
estimated amount of the anti-dumping duty be indicated and as long as the
withholding of appraisement is subject to the same conditions as other
provisional measures.

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

7.4 The application of provisional measures shall be limited to as short a
period as possible, not exceeding four months or, on decision of the
authorities concerned, upon request by exporters representing a significant
percentage of the trade involved, to a period not exceeding six months.
When authorities, in the course of an investigation, examine whether a duty
lower than the margin of dumping would be sufficient to remove injury, these
periods may be six and nine months, respectively.

7.5 The relevant provisions of Article 9 shall be followed in the
application of provisional measures.

Article 8

Price Undertakings

8.1 Proceedings may[19] be suspended or terminated without the imposition
of provisional measures or anti-dumping duties upon receipt of satisfactory
voluntary undertakings from any exporter to revise its prices or to cease
exports to the area in question at dumped prices so that the authorities are
satisfied that the injurious effect of the dumping is eliminated. Price
increases under such undertakings shall not be higher than necessary to
eliminate the margin of dumping. It is desirable that the price increases
be less than the margin of dumping if such increases would be adequate to
remove the injury to the domestic industry.

8.2 Price undertakings shall not be sought or accepted from exporters
unless the authorities of the importing country have made a preliminary
affirmative determination of dumping and injury caused by such dumping.

8.3 Undertakings offered need not be accepted if the authorities consider
their acceptance impractical, for example, if the number of actual or
potential exporters is too great, or for other reasons, including reasons of
general policy. Should the case arise and where practicable, the
authorities shall provide to the exporter the reasons which have led them to
consider acceptance of an undertaking as inappropriate, and shall, to the
extent possible, give the exporter an opportunity to make comments thereon.

8.4 If the undertakings are accepted, the investigation of dumping and
injury shall nevertheless be completed if the exporter so desires or the
authorities so decide. In such a case, if a negative determination of
dumping or injury is made, the undertaking shall automatically lapse except
in cases where such a determination is due in large part to the existence of
a price undertaking. In such cases the authorities may require that an
undertaking be maintained for a reasonable period consistent with the
provisions of this Agreement. In the event that an affirmative
determination of dumping and injury is made, the undertaking shall continue
consistent with its terms and the provisions of this Agreement.

8.5 Price undertakings may be suggested by the authorities of the
importing country, but no exporter shall be forced to enter into such an
undertaking. The fact that exporters do not offer such undertakings, or do
not accept an invitation to do so, shall in no way prejudice the
consideration of the case. However, the authorities are free to determine
that a threat of injury is more likely to be realized if the dumped imports
continue.

8.6 Authorities of an importing country may require any exporter from whom
undertakings have been accepted to provide periodically information relevant
to the fulfilment of such undertakings, and to permit verification of
pertinent data. In case of violation of undertakings, the authorities of
the importing country may take, under this Agreement in conformity with its
provisions, expeditious actions which may constitute immediate application
of provisional measures using the best information available. In such cases
definitive duties may be levied in accordance with this Agreement on goods
entered for consumption not more than ninety days before the application of
such provisional measures, except that any such retroactive assessment shall
not apply to imports entered before the violation of the undertaking.

Article 9

Imposition and Collection of Anti-Dumping Duties

9.1 The decision whether or not to impose an anti-dumping duty in cases
where all requirements for the imposition have been fulfilled and the
decision whether the amount of the anti-dumping duty to be imposed shall be
the full margin of dumping or less, are decisions to be made by the
authorities of the importing country or customs territory. It is desirable
that the imposition be permissive in all countries or customs territories
Members, and that the duty be less than the margin, if such lesser duty
would be adequate to remove the injury to the domestic industry.

9.2 When an anti-dumping duty is imposed in respect of any product, such
anti-dumping duty shall be collected in the appropriate amounts in each
case, on a non-discriminatory basis on imports of such product from all
sources found to be dumped and causing injury, except as to imports from
those sources from which price undertakings under the terms of this
Agreement have been accepted. The authorities shall name the supplier or
suppliers of the product concerned. If, however, several suppliers from the
same country are involved, and it is impracticable to name all these
suppliers, the authorities may name the supplying country concerned. If
several suppliers from more than one country are involved, the authorities
may name either all the suppliers involved, or, if this is impracticable,
all the supplying countries involved.

9.3 The amount of the anti-dumping duty shall not exceed the margin of
dumping as established under Article 2.

9.3.1When the amount of the anti-dumping duty is assessed on a
retrospective basis, the determination of the final liability for
payment of anti-dumping duties shall take place as soon as
possible, normally within 12 months, and in no case more than 18
months, after the date on which a request for a final assessment
of the amount of anti-dumping duty has been made.[20] Any refund
shall be made promptly and normally in not more than 90 days
following the determination of final liability made pursuant to
this sub-paragraph. In any case, where a refund is not made
within 90 days the authorities shall provide an explanation if so
requested.

9.3.2When the amount of the anti-dumping duty is assessed on a
prospective basis, provision shall be made for a prompt refund,
upon request, of any duty paid in excess of the margin of
dumping. A refund of any such duty paid in excess of the actual
margin of dumping shall normally take place within 12 months, and
in no case more than 18 months, after the date on which a request
for a refund, duly supported by evidence, has been made by an
importer of the product subject to the anti-dumping duty. The
refund authorized should normally be made within 90 days of the
above-noted decision.

9.3.3In determining whether and to what extent a reimbursement should
be made when the export price is constructed in accordance with
paragraph 3 of Article 2, authorities should take account of any
change in normal value, any change of costs incurred between
importation and resale, and any movement in the resale price
which is duly reflected in subsequent selling prices, and should
calculate the export price with no deduction for the amount of
anti-dumping duties paid when conclusive evidence of the above is
provided.

9.4 When the authorities have limited their examination in accordance with
the second sentence of paragraph 10 of Article 6, any anti-dumping duty
applied to imports from exporters or producers not included in the
examination shall not exceed:

(a) the weighted average margin of dumping established with respect
to the selected exporters or producers or,

(b) where the liability for payment of anti-dumping duties is
calculated on the basis of a prospective normal value, the
difference between the weighted average normal value of the
selected exporters or producers and the export prices of
exporters or producers not individually examined,

provided that the authorities shall disregard for the purpose of this
paragraph any zero and de minimis margins and margins established under the
circumstances referred to in paragraph 8 of Article 6. The authorities
shall apply individual duties or normal values to imports from any exporter
or producer not included in the examination who has provided the necessary
information during the course of the investigation, as provided for in
sub-paragraph 10.2 of Article 6.

9.5 If a product is subject to anti-dumping duties in an importing Member,
the authorities shall promptly carry out a review for the purpose of
determining individual margins of dumping for any exporters or producers in
the exporting country in question who have not exported the product to the
importing Member during the period of investigation provided that these
exporters or producers can show that they are not related to any of the
exporters or producers in the exporting country who are subject to the
anti-dumping duties on the product. Such a review shall be initiated and
carried out on an accelerated basis, compared to normal duty assessment and
review proceedings in the importing country. No anti-dumping duties shall
be levied on imports from such exporters or producers while the review is
being carried out. The authorities may, however, withhold appraisement
and/or request guarantees to ensure that, should such a review result in a
determination of dumping in respect of such producers or exporters,
anti-dumping duties can be levied retroactively to the date of the
initiation of the review.

Article 10

Retroactivity

10.1 Provisional measures and anti-dumping duties shall only be applied to
products which enter for consumption after the time when the decision taken
under paragraph 1 of Article 7 and paragraph 1 of Article 9, respectively,
enters into force, subject to the exceptions set out in this Article.

10.2 Where a final determination of injury (but not of a threat thereof or
of a material retardation of the establishment of an industry) is made or,
in the case of a final determination of a threat of injury, where the effect
of the dumped imports would, in the absence of the provisional measures,
have led to a determination of injury, anti-dumping duties may be levied
retroactively for the period for which provisional measures, if any, have
been applied.

10.3 If the definitive anti-dumping duty is higher than the provisional
duty paid or payable, or the amount estimated for the purpose of the
security, the difference shall not be collected. If the definitive duty is
lower than the provisional duty paid or payable, or the amount estimated for
the purpose of the security, the difference shall be reimbursed or the duty
recalculated, as the case may be.

10.4 Except as provided in paragraph 2 above, where a determination of
threat of injury or material retardation is made (but no injury has yet
occurred) a definitive anti-dumping duty may be imposed only from the date
of the determination of threat of injury or material retardation and any
cash deposit made during the period of the application of provisional
measures shall be refunded and any bonds released in an expeditious manner.

10.5 Where a final determination is negative, any cash deposit made during
the period of the application of provisional measures shall be refunded and
any bonds released in an expeditious manner.

10.6 A definitive anti-dumping duty may be levied on products which were
entered for consumption not more than 90 days prior to the date of
application of provisional measures, when the authorities determine for the
dumped product in question that:

(i) there is a history of dumping which caused injury or that the
importer was, or should have been, aware that the exporter
practises dumping and that such dumping would cause injury, and

(ii) the injury is caused by massive dumped imports of a product in a
relatively short time which in light of the timing and the volume
of the dumped imports and other circumstances (such as a rapid
build-up of inventories of the imported product) is likely to
seriously undermine the remedial effect of the definitive
anti-dumping duty to be applied, provided that the importers
concerned have been given an opportunity to comment.

10.7 The authorities may, after initiating an investigation, take such
measures as the withholding of appraisement or assessment as may be
necessary to collect anti-dumping duties retroactively as provided for in
paragraph 6, once they have sufficient evidence that the conditions set
forth in that paragraph are satisfied.

10.8 No duties shall be levied retroactively pursuant to paragraph 6, on
products entered for consumption prior to the date of initiation of the
investigation.

Article 11

Duration and Review of Anti-Dumping Duties and

Price Undertakings

11.1 An anti-dumping duty shall remain in force only as long as and to the
extent necessary to counteract dumping which is causing injury.

11.2 The authorities shall review the need for the continued imposition of
the duty, where warranted, on their own initiative or, provided that a
reasonable period of time has elapsed since the imposition of the definitive
anti-dumping duty, upon request by any interested party which submits
positive information substantiating the need for a review.[21] Interested
parties shall have the right to request the authorities to examine whether
the continued imposition of the duty is necessary to offset dumping, whether
the injury would be likely to continue or recur if the duty were removed or
varied, or both. If, as a result of the review under this paragraph, the
authorities determine that the anti-dumping duty is no longer warranted, it
shall be terminated immediately.

11.3 Notwithstanding the provisions of paragraphs 1 and 2, any definitive
anti-dumping duty shall be terminated on a date not later than five years
from its imposition (or from the date of the most recent review under
paragraph 2 if that review has covered both dumping and injury, or under
this paragraph), unless the authorities determine, in a review initiated
before that date on their own initiative or upon a duly substantiated
request made by or on behalf of the domestic industry within a reasonable
period of time prior to that date, that the expiry of the duty would be
likely to lead to continuation or recurrence of dumping and injury.[22] The
duty may remain in force pending the outcome of such a review.

11.4 The provisions of Article 6 regarding evidence and procedure shall
apply to any review carried out under this Article. Any such review shall
be carried out expeditiously and shall normally be concluded within twelve
months of the date of initiation of the review.

11.5 The provisions of this Article shall mutatis mutandis apply to price
undertakings accepted under Article 8.

Article 12

Public Notice and Explanation of Determinations

12.1 When the authorities are satisfied that there is sufficient evidence
to justify the initiation of an anti-dumping investigation pursuant to
Article 5, the Member or Members the products of which are subject to such
investigation and other interested parties known to the investigating
authorities to have an interest therein shall be notified and a public
notice shall be given.

12.1.1A public notice of the initiation of an investigation shall contain or
otherwise make available through a separate report[23]adequate
information on the following:

(i) the name of the exporting country or countries and the product
involved;

(ii) the date of initiation of the investigation;

(iii)the basis on which dumping is alleged in the application;

(iv) a summary of the factors on which the allegation of injury is
based;

(v) the address to which representations by interested parties should
be directed;

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

12.2 Public notice shall be given of any preliminary or final
determination, whether affirmative or negative, of any decision to accept an
undertaking pursuant to Article 8, of the termination of such an
undertaking, and of the revocation of a determination. Each such notice
shall set forth or otherwise make available through a separate report in
sufficient detail the findings and conclusions reached on all issues of fact
and law considered material by the investigating authorities. All such
notices and reports shall be forwarded to the Member or Members the products
of which are subject to such determination or undertaking and to other
interested parties known to have an interest therein.

12.2.1A public notice of the imposition of provisional measures shall
set forth or otherwise make available through a separate report
sufficiently detailed explanations for the preliminary
determinations on dumping and injury and shall refer to the
matters of fact and law which have led to arguments being
accepted or rejected. Such a notice or report shall, due regard
being paid to the requirement for the protection of confidential
information, contain in particular:

(i) the names of the suppliers, or when this is impracticable,
the supplying countries involved;

(ii) a description of the product which is sufficient for
customs purposes;

(iii) the margins of dumping established and a full explanation
of the reasons for the methodology used in the
establishment and comparison of the export price and the
normal value under Article 2;

(iv) considerations relevant to the injury determination as set
out in Article 3;

(v) the main reasons leading to the determination.

12.2.2A public notice of conclusion or suspension of an investigation
in the case of an affirmative determination providing for the
imposition of a definitive duty or the acceptance of a price
undertaking shall contain or otherwise make available through a
separate report all relevant information on the matters of fact
and law and reasons which have led to the imposition of final
measures or the acceptance of a price undertaking, due regard
being paid to the requirement for the protection of confidential
information. The notice or report shall in particular contain
the information described .in sub-paragraph 2.1 of Article 12, as
well as the reasons for the acceptance or rejection of relevant
arguments or claims made by the exporters and importers, and the
basis for any decision made under sub-paragraph 10.2 of Article
6.

12.2.3A public notice of the termination or suspension of an
investigation following the acceptance of an undertaking pursuant
to Article 8 shall include or otherwise make available through a
separate report the non-confidential part of this undertaking.

12.3 The provisions of this Article shall apply mutatis mutandis to the
initiation and completion of reviews pursuant to Article 11 and to decisions
under Article 10 to apply duties retroactively.

Article 13

Judicial Review

Each Member, whose national legislation contains provisions on
anti-dumping measures, shall maintain judicial, arbitral or administrative
tribunals or procedures for the purpose, inter alia, of the prompt review of
administrative actions relating to final determinations and reviews of
determinations within the meaning of Article 11 of this Agreement. Such
tribunals or procedures shall be independent of the authorities responsible
for the determination or review in question.

Article 14

Anti-dumping action on behalf of a third country

14.1 An application for anti-dumping action on behalf of a third country
shall be made by the authorities of the third country requesting action.

14.2 Such an application shall be supported by price information to show
that the imports are being dumped and by detailed information to show that
the alleged dumping is causing injury to the domestic industry concerned in
the third country. The government of the third country shall afford all
assistance to the authorities of the importing country to obtain any further
information which the latter may require.

14.3 The authorities of the importing country in considering such an
application shall consider the effects of the alleged dumping on the
industry concerned as a whole in the third country; that is to say the
injury shall not be assessed in relation only to the effect of the alleged
dumping on the industry's export to the importing country or even on the
industry's total exports.

14.4 The decision whether or not to proceed with a case shall rest with the
importing country. If the importing country decides that it is prepared to
take action, the initiation of the approach to the Council for Trade in
Goods seeking its approval for such action shall rest with the importing
country.

Article 15

Developing country Members

It is recognized that special regard must be given by developed
country Members to the special situation of developing country Members when
considering the application of anti-dumping measures under this Agreement.
Possibilities of constructive remedies provided for by this Agreement shall
be explored before applying anti-dumping duties where they would affect the
essential interests of developing country Members.

PART II

Article 16

Committee on Anti-Dumping Practices

16.1 There shall be established under this Agreement a Committee on
Anti-Dumping Practices (hereinafter referred to as the "Committee") composed
of representatives from each of the Members. The Committee shall elect its
own Chairman and shall meet not less than twice a year and otherwise as
envisaged by relevant provisions of this Agreement at the request of any
Member. The Committee shall carry out responsibilities as assigned to it
under this Agreement or by the Members and it shall afford Members the
opportunity of consulting on any matters relating to the operation of the
Agreement or the furtherance of its objectives. The MTO Secretariat shall
act as the secretariat to the Committee.

16.2 The Committee may set up subsidiary bodies as appropriate.

16.3 In carrying out their functions, the Committee and any subsidiary
bodies may consult with and seek information from any source they deem
appropriate. However, before the Committee or a subsidiary body seeks such
information from a source within the jurisdiction of a Member, it shall
inform the Member involved. It shall obtain the consent of the Member and
any firm to be consulted.

16.4 Members shall report without delay to the Committee all preliminary or
final anti-dumping actions taken. Such report will be available in the MTO
Secretariat for inspection by government representatives. The Members shall
also submit, on a semi-annual basis, reports of any anti-dumping actions
taken within the preceding six months.

16.5 Each Member shall notify the Committee (a) which of its authorities
are competent to initiate and conduct investigations referred to in Article
5 and (b) its domestic procedures governing the initiation and conduct of
such investigations.

Article 17

Consultation and Dispute Settlement

17.1 Except as otherwise provided herein, the Understanding on Rules and
Procedures Governing the Settlement of Disputes is applicable to
consultations and the settlement of disputes under this Agreement.

17.2 Each Member shall afford sympathetic consideration to, and shall
afford adequate opportunity for consultation regarding, representations made
by another Member with respect to any matter affecting the operation of this
Agreement.

17.3 If any Member considers that any benefit accruing to it, directly or
indirectly, under this Agreement is being nullified or impaired, or that the
achievement of any objective is being impeded, by another Member or Members,
it may, with a view to reaching a mutually satisfactory resolution of the
matter, request in writing consultations with the Member or Members in
question. Each Member shall afford sympathetic consideration to any request
from another Member for consultation.

17.4 If the Member that requested consultations considers that the
consultations pursuant to paragraph 3 of Article 17 have failed to achieve a
mutually agreed solution and final action has been taken by the
administering authorities of the importing Member to levy definitive
anti-dumping duties or to accept price undertakings, it may refer the matter
to the Dispute Settlement Body (DSB). When a provisional measure has a
significant impact and the Member considers the measure was taken contrary
to the provisions of paragraph 1 of Article 7 of this Agreement, that Member
may also refer such matter to the DSB.

17.5 The DSB shall, at the request of the complaining party, establish a
panel to examine the matter based upon:

(a) a written statement of the Member making the request indicating
how a benefit accruing to it, directly or indirectly, under this
Agreement has been nullified or impaired, or that the achieving
of the objectives of the Agreement is being impeded, and

(b) the facts made available in conformity with appropriate domestic
procedures to the authorities of the importing Member.

17.6 In examining the matter in paragraph 5:

(i) in its assessment of the facts of the matter, the panel shall
determine whether the authorities' establishment of the facts was
proper and whether their evaluation of those facts was unbiased
and objective. If the establishment of the facts was proper and
the evaluation was unbiased and objective, even though the panel
might have reached a different conclusion, the evaluation shall
not be overturned;

(ii) the panel shall interpret the relevant provisions of the
Agreement in accordance with customary rules of interpretation of
public international law. Where the panel finds that a relevant
provision of the Agreement admits of more than one permissible
interpretation, the panel shall find the authorities' measure to
be in conformity with the Agreement if it rests upon one of those
permissible interpretations.

17.7 Confidential information provided to the panel shall not be disclosed
without formal authorization from the person, body or authority providing
such information. Where such information is requested from the panel but
release of such information by the panel is not authorized, a
non-confidential summary of the information, authorized by the person, body
or authority providing the information, shall be provided.

PART III

Article 18

Final Provisions

18.1 No specific action against dumping of exports from another Member can
be taken except in accordance with the provisions of the GATT 1994, as
interpreted by this Agreement.[26]

18.2 Reservations may not be entered in respect of any of the provisions of
this Agreement without the consent of the other Members.

18.3 Subject to sub-paragraphs 1 and 2, the provisions of this Agreement
shall apply to investigations, and reviews of existing measures, initiated
pursuant to applications which have been made on or after the date of entry
into force for a Member of the Agreement Establishing the MTO.

18.3.1With respect to the calculation of margins of dumping in refund
procedures under Article 9.3, the rules used in the most recent
determination or review of dumping shall apply.

18.3.2 For the purposes of paragraph 3 of Article 11, existing
anti-dumping measures shall be deemed to be imposed on a date not
later than the date of entry into force for a Member of the Agreement
Establishing the MTO, except in cases in which the domestic
legislation of a Member in force at that date already included a
clause of the type provided for in that paragraph.

18.4 (a) Each government accepting or acceding to the MTO shall take all
necessary steps, of a general or particular character, to ensure,
not later than the date of entry into force of the Agreement
Establishing the MTO for it, the conformity of its laws,
regulations and administrative procedures with the provisions of
this Agreement as they may apply for the Member in question.

(b) Each Member shall inform the Committee of any changes in its laws
and regulations relevant to this Agreement and in the
administration of such laws and regulations.

18.5 The Committee shall review annually the implementation and operation
of this Agreement taking into account the objectives thereof. The Committee
shall annually inform the Council for Trade in Goods of developments during
the period covered by such reviews.

18.6 The Annexes to this Agreement constitute an integral part thereof.

ANNEX I

Procedures for On-The-Spot Investigations Pursuant
to paragraph 7 of Article 6

1. Upon initiation of an investigation, the authorities of the exporting
country and the firms known to be concerned should be informed of the
intention to carry out on-the-spot investigations.

2. If in exceptional circumstances it is intended to include
non-governmental experts in the investigating team, the firms and the
authorities of the exporting country should be so informed. Such
non-governmental experts should be subject to effective sanctions for
breach of confidentiality requirements.

3. It should be standard practice to obtain explicit agreement of the
firms concerned in the exporting country before the visit is finally
scheduled.

4. As soon as the agreement of the firms concerned has been obtained the
investigating authorities should notify the authorities of the
exporting country of the names and addresses of the firms to be
visited and the dates agreed.

5. Sufficient advance notice should be given to the firms in question
before the visit is made.

6. Visits to explain the questionnaire should only be made at the request
of an exporting firm. Such a visit may only be made if the
authorities of the importing country notify the representatives of the
government of the country in question and unless the latter do not
object to the visit.

7. As the main purpose of the on-the-spot investigation is to verify
information provided or to obtain further details, it should be
carried out after the response to the questionnaire has been received
unless the firm agrees to the contrary and the government of the
exporting country is informed by the investigating authorities of the
anticipated visit and does not object to it; further, it should be
standard practice prior to the visit to advise the firms concerned f
the general nature of the information to be verified and of any
further information which needs to be provided, though this should not
preclude requests to be made on the spot for further details to be
provided in the light of information obtained.

8. Enquiries or questions put by the authorities or firms of the
exporting countries and essential to a successful on-the-spot
investigation should, whenever possible, be answered before the visit
is made.

ANNEX II

Best Information Available in Terms of paragraph 8 of Article 6

1. As soon as possible after the initiation of the investigation, the
investigating authorities should specify in detail the information
required from any interested party, and the way in which that
information should be structured by the interested party in its
response. The authorities should also ensure that the party is aware
that if information is not supplied within a reasonable time, the
authorities will be free to make determinations on the basis of the
facts available, including those contained in the request for the
initiation of the investigation by the domestic industry.

2. The authorities may also request that an interested party provide its
response in a particular medium (e.g., computer tape) or computer
language. Where such a request is made, the authorities should
consider the reasonable ability of the interested party to respond in
the preferred medium or computer language, and should not request the
company to use for its response a computer system other than that used
by the firm. The authority should not maintain a request for a
computerized response, if the interested party does not maintain
computerized accounts and if presenting the response as requested
would result in an unreasonable extra burden on the interested party,
e.g., it would entail unreasonable additional cost and trouble. The
authorities should not maintain a request for a response in a
particular medium or computer language if the interested party does
not maintain its computerized accounts in such medium or computer
language and if presenting the response as requested would result in
an unreasonable extra burden on the interested party, e.g., it would
entail unreasonable additional cost and trouble.

3. All information which is verifiable, which is appropriately submitted
so that it can be used in the investigation without undue difficulties
and which is supplied in a timely fashion, and, where applicable,
supplied in a medium or computer language requested by the
authorities, should be taken into account when determinations are
made. If a party does not respond in the preferred medium or computer
language but the authorities find that the circumstances set out in
paragraph 2 have been satisfied, this should not be considered to
significantly impede the investigation.

4. Where the authorities do not have the ability to process information
if provided in a particular medium (e.g., computer tape) the
information should be supplied in the form of written material or any
other form acceptable to the authorities.

5. Even though the information provided may not be ideal in all respects,
this should not justify the authorities from disregarding it provided
the interested party has acted to the best of its ability.

6. If evidence or information is not accepted, the supplying party should
be informed forthwith of the reasons thereof and have an opportunity
to provide further explanations within a reasonable period, due
account being taken of the time-limits of the investigation. If the
explanations are considered by the authorities as not being
satisfactory, the reasons for rejection of such evidence or
information should be given in any published findings.

7. If the authorities have to base their determinations, including those
with respect to normal value, on information from a secondary source,
including the information supplied in the request for the initiation
of the investigation, they should do so with special circumspection.
In such cases, the authorities should, where practicable, check the
information from other independent sources at their disposal, such as
published price lists, official import statistics and customs returns,
and from the information obtained from other interested parties during
the investigation. It is clear, however, that if an interested party
does not co-operate and thus relevant information is being withheld
from the authorities, this situation could lead to a result which is
less favourable to the party than if the party did co-operate.

1. The term "initiated" as used hereinafter means the procedural action by
which a Member formally commences an investigation as provided in Article 5.

2. Sales of the like product destined for consumption in the domestic market
of the exporting country shall normally be considered a sufficient quantity
for the determination of the normal value if such sales constitute 5 per
cent or more of the sales of the product under consideration to the
importing country, provided that a lower ratio should be acceptable where
the evidence demonstrates that domestic sales at such lower ratio are
nonetheless of sufficient magnitude to provide for a proper comparison.

3. When in this Agreement the term "authorities" is used, it shall be
interpreted as meaning authorities at an appropriate senior level.

4. The extended period of time should normally be one year but shall in no
case be less than six months.

5. Sales below per unit cost are made in substantial quantities when the
authorities establish that the weighted average selling price of the
transactions under consideration for the determination of the normal value
is below the weighted average unit cost or that the volume of sales below
per unit costs represents not less than 20 per cent of the volume sold in
transactions under consideration for the determination of the normal value.

6. The adjustment made for start-up operations shall reflect the costs at
the end of the start-up period or, if that period extends beyond the period
of investigation, the most recent costs which can reasonably be taken into
account by the authorities during the investigation.

7. It is understood that some of the above factors may overlap, and
authorities shall ensure that they do not duplicate adjustments that have
been already made under this provision.

8. Normally, the date of sale would be the date of contract, purchase order,
order confirmation, or invoice, whichever establishes the material terms of
sale.

9. Under this Agreement the term "injury" shall, unless otherwise specified,
be taken to mean material injury to a domestic industry, threat of material
injury to a domestic industry or material retardation of the establishment
of such an industry and shall be interpreted in accordance with the
provisions of this Article.

10. One example, though not an exclusive one, is that there is convincing
reason to believe that there will be, in the near future, substantially
increased importations of the product at dumped prices.

11. For the purpose of this paragraph, producers shall be deemed to be
related to exporters or importers only if (a) one of them directly or
indirectly controls the other; or (b) both of them are directly or
indirectly controlled by a third person; or © together they directly or
indirectly control a third person, provided that there are grounds for
believing or suspecting that the effect of the relationship is such as to
cause the producer concerned to behave differently from non-related
producers. For the purpose of this paragraph, one shall be deemed to
control another when the former is legally or operationally in a position to
exercise restraint or direction over the latter.

12. As used in this Agreement "levy" shall mean the definitive or final
legal assessment or collection of a duty or tax.

13. In the case of fragmented industries involving an exceptionally large
number of producers, authorities may determine support and opposition by
using statistically valid sampling techniques.

14. Members are aware that in the territory of certain Members, employees of
domestic producers of the like product or representatives of those
employees, may make or support an application for an investigation under
paragraph 1.

15. As a general rule, the time-limit for exporters shall be counted from
the date of receipt of the questionnaire, which for this purpose shall be
deemed to have been received one week from the day on which it was sent to
the respondent or transmitted to the appropriate diplomatic representative
of the exporting country or in the case of a separate customs territory
Member of the MTO, an official representative of the exporting territory.

16. It being understood that, where the number of exporters involved is
particularly high, the full text of the written application should instead
be provided only to the authorities of the exporting country or to the
relevant trade association.

17. Members are aware that in the territory of certain Members disclosure
pursuant to a narrowly-drawn protective order may be required.

18. Members agree that requests for confidentiality should not be
arbitrarily rejected.

19. The word "may" shall not be interpreted to allow the simultaneous
continuation of proceedings with the implementation of price undertakings
except as provided in paragraph 4.

20. It is understood that the observance of the time-limits mentioned in
this sub-paragraph and in sub-paragraph 2 may not be possible where the
product in question is subject to judicial review proceedings.

21. A determination of final liability for payment of anti-dumping duties as
provided for in paragraph 3 of Article 9 does not by itself constitute a
review within the meaning of this Article.

22. When the amount of the anti-dumping duty is assessed on a retrospective
basis, a finding in the most recent assessment proceeding under
sub-paragraph 3.1 of Article 9 that no duty is to be levied shall not by
itself require the authorities to terminate the definitive duty.

23. Where authorities provide information and explanations under the
provisions of this Article in a separate report, they shall ensure that such
report is readily available to the public.

26. This is not intended to preclude action under other relevant provisions
of the GATT 1994, as appropriate.


AGREEMENT ON IMPLEMENTATION OF ARTICLE VII
OF THE GENERAL AGREEMENT ON TARIFFS AND TRADE 1994

GENERAL INTRODUCTORY COMMENTARY

1. The primary basis for customs value under this Agreement is
"transaction value" as defined in Article 1. Article 1 is to be read
together with Article 8 which provides, inter alia, for adjustments to the
price actually paid or payable in cases where certain specific elements
which are considered to form a part of the value for customs purposes are
incurred by the buyer but are not included in the price actually paid or
payable for the imported goods. Article 8 also provides for the inclusion
in the transaction value of certain considerations which may pass from the
buyer to the seller in the form of specified goods or services rather than
in the form of money. Articles 2 to 7, inclusive, provide methods of
determining the customs value whenever it cannot be determined under the
provisions of Article 1.

2. Where the customs value cannot be determined under the provisions of
Article 1 there should normally be a process of consultation between the
customs administration and importer with a view to arriving at a basis of
value under the provisions of Articles 2 or 3. It may occur, for example,
that the importer has information about the customs value of identical or
similar imported goods which is not immediately available to the customs
administration in the port of importation. On the other hand, the customs
administration may have information about the customs value of identical or
similar imported goods which is not readily available to the importer. A
process of consultation between the two parties will enable information to
be exchanged, subject to the requirements of commercial confidentiality,
with a view to determining a proper basis of value for customs purposes.

3. Articles 5 and 6 provide two bases for determining the customs value
where it cannot be determined on the basis of the transaction value of the
imported goods or of identical or similar imported goods. Under paragraph 1
of Article 5 the customs value is determined on the basis of the price at
which the goods are sold in the condition as imported to an unrelated buyer
in the country of importation. The importer also has the right to have
goods which are further processed after importation valued under the
provisions of Article 5 if he so requests. Under Article 6 the customs
value is determined on the basis of the computed value. Both these methods
present certain difficulties and because of this the importer is given the
right, under the provisions of Article 4, to choose the order of application
of the two methods.

4. Article 7 sets out how to determine the customs value in cases where
it cannot be determined under the provisions of any of the preceding
Articles.

Members,

Having regard to the Multilateral Trade Negotiations,

Desiring to further the objectives of the GATT 1994 and to secure
additional benefits for the international trade of developing countries;

Recognizing the importance of the provisions of Article VII of the
GATT 1994 and desiring to elaborate rules for their application in order to
provide greater uniformity and certainty in their implementation;

Recognizing the need for a fair, uniform and neutral system for the
valuation of goods for customs purposes that precludes the use of arbitrary
or fictitious customs values;

Recognizing that the basis for valuation of goods for customs purposes
should, to the greatest extent possible, be the transaction value of the
goods being valued;

Recognizing that customs value should be based on simple and equitable
criteria consistent with commercial practices and that valuation procedures
should be of general application without distinction between sources of
supply;

Recognizing that valuation procedures should not be used to combat
dumping;

Hereby agree as follows:

PART I

RULES ON CUSTOMS VALUATION

Article 1

1. The customs value of imported goods shall be the transaction value,
that is the price actually paid or payable for the goods when sold for
export to the country of importation adjusted in accordance with the
provisions of Article 8, provided:

(a) that there are no restrictions as to the disposition or use of
the goods by the buyer other than restrictions which:

(i) are imposed or required by law or by the public authorities
in the country of importation;

(ii) limit the geographical area in which the goods may be
resold; or

(iii) do not substantially affect the value of the goods;

(b) that the sale or price is not subject to some condition or
consideration for which a value cannot be determined with respect
to the goods being valued;

© that no part of the proceeds of any subsequent resale, disposal
or use of the goods by the buyer will accrue directly or
indirectly to the seller, unless an appropriate adjustment can be
made in accordance with the provisions of Article 8; and

(d) that the buyer and seller are not related, or where the buyer and
seller are related, that the transaction value is acceptable for
customs purposes under the provisions of paragraph 2 of this
Article.

2. (a) In determining whether the transaction value is acceptable for
the purposes of paragraph 1 of this Article, the fact that the
buyer and the seller are related within the meaning of Article 15
shall not in itself be grounds for regarding the transaction
value as unacceptable. In such case the circumstances
surrounding the sale shall be examined and the transaction value
shall be accepted provided that the relationship did not
influence the price. If, in the light of information provided by
the importer or otherwise, the customs administration has grounds
for considering that the relationship influenced the price, it
shall communicate its grounds to the importer and he shall be
given a reasonable opportunity to respond. If the importer so
requests, the communication of the grounds shall be in writing.

(b) In a sale between related persons, the transaction value shall be
accepted and the goods valued in accordance with the provisions
of paragraph 1 of this Article whenever the importer demonstrates
that such value closely approximates to one of the following
occurring at or about the same time:

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

(ii) the customs value of identical or similar goods as
determined under the provisions of Article 5;

(iii) the customs value of identical or similar goods as
determined under the provisions of Article 6;

In applying the foregoing tests, due account shall be taken
of demonstrated differences in commercial levels, quantity
levels, the elements enumerated in Article 8 and costs incurred
by the seller in sales in which he and the buyer are not related
that are not incurred by the seller in sales in which he and the
buyer are related.

© The tests set forth in paragraph 2(b) of this Article are to be
used at the initiative of the importer and only for comparison
purposes. Substitute values may not be established under the
provisions of paragraph 2(b) of this Article.

Article 2

1. (a) If the customs value of the imported goods cannot be determined
under the provisions of Article 1, the customs value shall be the
transaction value of identical goods sold for export to the same
country of importation and exported at or about the same time as
the goods being valued.

(b) In applying this Article, the transaction value of identical
goods in a sale at the same commercial level and in substantially
the same quantity as the goods being valued shall be used to
determine the customs value. Where no such sale is found, the
transaction value of identical goods sold at a different
commercial level and/or in different quantities, adjusted to take
account of differences attributable to commercial level and/or to
quantity, shall be used, provided that such adjustments can be
made on the basis of demonstrated evidence which clearly
establishes the reasonableness and accuracy of the adjustment,
whether the adjustment leads to an increase or a decrease in the
value.

2. Where the costs and charges referred to in paragraph 2 of Article 8
are included in the transaction value, an adjustment shall be made to take
account of significant differences in such costs and charges between the
imported goods and the identical goods in question arising from differences
in distances and modes of transport.

3. If, in applying this Article, more than one transaction value of
identical goods is found, the lowest such value shall be used to determine
the customs value of the imported goods.

Article 3

1. (a) If the customs value of the imported goods cannot be determined
under the provisions of Articles 1 and 2, the customs value shall
be the transaction value of similar goods sold for export to the
same country of importation and exported at or about the same
time as the goods being valued.

(b) In applying this Article, the transaction value of similar goods
in a sale at the same commercial level and in substantially the
same quantity as the goods being valued shall be used to
determine the customs value. Where no such sale is found, the
transaction value of similar goods sold at a different commercial
level and/or in different quantities, adjusted to take account of
differences attributable to commercial level and/or to quantity,
shall be used, provided that such adjustments can be made on the
basis of demonstrated evidence which clearly establishes the
reasonableness and accuracy of the adjustment, whether the
adjustment leads to an increase or a decrease in the value.

2. Where the costs and charges referred to in paragraph 2 of Article 8
are included in the transaction value, an adjustment shall be made to take
account of significant differences in such costs and charges between the
imported goods and the similar goods in question arising from differences in
distances and modes of transport.

3. If, in applying this Article, more than one transaction value of
similar goods is found, the lowest such value shall be used to determine the
customs value of the imported goods.

Article 4

If the customs value of the imported goods cannot be determined under
the provisions of Articles 1, 2 and 3 the customs value shall be determined
under the provisions of Article 5 or, when the customs value cannot be
determined under that Article, under the provisions of Article 6 except
that, at the request of the importer, the order of application of Articles 5
and 6 shall be reversed.

Article 5

1. (a) If the imported goods or identical or similar imported goods are
sold in the country of importation in the condition as imported,
the customs value of the imported goods under the provisions of
this Article shall be based on the unit price at which the
imported goods or identical or similar imported goods are so sold
in the greatest aggregate quantity, at or about the time of the
importation of the goods being valued, to persons who are not
related to the persons from whom they buy such goods, subject to
deductions for the following:

(i) either the commissions usually paid or agreed to be paid or
the additions usually made for profit and general expenses
in connection with sales in such country of imported goods
of the same class or kind;

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

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

(iv) the customs duties and other national taxes payable in the
country of importation by reason of the importation or sale
of the goods.

(b) If neither the imported goods nor identical nor similar imported
goods are sold at or about the time of importation of the goods
being valued, the customs value shall, subject otherwise to the
provisions of paragraph 1(a) of this Article, be based on the
unit price at which the imported goods or identical or similar
imported goods are sold in the country of importation in the
condition as imported at the earliest date after the importation
of the goods being valued but before the expiration of ninety
days after such importation.

2. If neither the imported goods nor identical nor similar imported goods
are sold in the country of importation in the condition as imported, then,
if the importer so requests, the customs value shall be based on the unit
price at which the imported goods, after further processing, are sold in the
greatest aggregate quantity to persons in the country of importation who are
not related to the persons from whom they buy such goods, due allowance
being made for the value added by such processing and the deductions
provided for in paragraph 1(a) of this Article.

Article 6

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

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

(b) an amount for profit and general expenses equal to that usually
reflected in sales of goods of the same class or kind as the
goods being valued which are made by producers in the country of
exportation for export to the country of importation;

© the cost or value of all other expenses necessary to reflect the
valuation option chosen by the Member under paragraph 2 of
Article 8.

2. No Member may require or compel any person not resident in its own
territory to produce for examination, or to allow access to, any account or
other record for the purposes of determining a computed value. However,
information supplied by the producer of the goods for the purposes of
determining the customs value under the provisions of this Article may be
verified in another country by the authorities of the country of importation
with the agreement of the producer and provided they give sufficient advance
notice to the government of the country in question and the latter does not
object to the investigation.

Article 7

1. If the customs value of the imported goods cannot be determined under
the provisions of Articles 1 to 6, inclusive, the customs value shall be
determined using reasonable means consistent with the principles and general
provisions of this Agreement and of Article VII of the GATT 1994 and on the
basis of data available in the country of importation.

2. No customs value shall be determined under the provisions of this
Article on the basis of:

(a) the selling price in the country of importation of goods produced
in such country;

(b) a system which provides for the acceptance for customs purposes
of the higher of two alternative values;

© the price of goods on the domestic market of the country of
exportation;

(d) the cost of production other than computed values which have been
determined for identical or similar goods in accordance with the
provisions of Article 6;

(e) the price of the goods for export to a country other than the
country of importation;

(f) minimum customs values; or

(g) arbitrary or fictitious values.

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

Article 8

1. In determining the customs value under the provisions of Article 1,
there shall be added to the price actually paid or payable for the imported
goods:

(a) the following, to the extent that they are incurred by the buyer
but are not included in the price actually paid or payable for
the goods:

(i) commissions and brokerage, except buying commissions;

(ii) the cost of containers which are treated as being one for
customs purposes with the goods in question;

(iii) the cost of packing whether for labour or materials;

(b) the value, apportioned as appropriate, of the following goods and
services where supplied directly or indirectly by the buyer free
of charge or at reduced cost for use in connection with the
production and sale for export of the imported goods, to the
extent that such value has not been included in the price
actually paid or payable:

(i) materials, components, parts and similar items incorporated
in the imported goods;

(ii) tools, dies, moulds and similar items used in the
production of the imported goods;

(iii) materials consumed in the production of the imported goods;

(iv) engineering, development, artwork, design work, and plans
and sketches undertaken elsewhere than in the country of
importation and necessary for the production of the
imported goods;

© royalties and licence fees related to the goods being valued that
the buyer must pay, either directly or indirectly, as a condition
of sale of the goods being valued, to the extent that such
royalties and fees are not included in the price actually paid or
payable;

(d) the value of any part of the proceeds of any subsequent resale,
disposal or use of the imported goods that accrues directly or
indirectly to the seller.

2. In framing its legislation, each Member shall provide for the
inclusion in or the exclusion from the customs value, in whole or in part,
of the following:

(a) the cost of transport of the imported goods to the port or place
of importation;

(b) loading, unloading and handling charges associated with the
transport of the imported goods to the port or place of
importation; and

© the cost of insurance.

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

4. No additions shall be made to the price actually paid or payable in
determining the customs value except as provided in this Article.

Article 9

1. Where the conversion of currency is necessary for the determination of
the customs value, the rate of exchange to be used shall be that duly
published by the competent authorities of the country of importation
concerned and shall reflect as effectively as possible, in respect of the
period covered by each such document of publication, the current value of
such currency in commercial transactions in terms of the currency of the
country of importation.

2. The conversion rate to be used shall be that in effect at the time of
exportation or the time of importation, as provided by each Member.

Article 10

All information which is by nature confidential or which is provided
on a confidential basis for the purposes of customs valuation shall be
treated as strictly confidential by the authorities concerned who shall not
disclose it without the specific permission of the person or government
providing such information, except to the extent that it may be required to
be disclosed in the context of judicial proceedings.

Article 11

1. The legislation of each Member shall provide in regard to a
determination of customs value for the right of appeal, without penalty, by
the importer or any other person liable for the payment of the duty.

2. An initial right of appeal without penalty may be to an authority
within the customs administration or to an independent body, but the
legislation of each Member shall provide for the right of appeal without
penalty to a judicial authority.

3. Notice of the decision on appeal shall be given to the appellant and
the reasons for such decision shall be provided in writing. He shall also
be informed of his rights of any further appeal.

Article 12

Laws, regulations, judicial decisions and administrative rulings of
general application giving effect to this Agreement shall be published in
conformity with Article X of the GATT 1994 by the country of importation
concerned.

Article 13

If, in the course of determining the customs value of imported goods,
it becomes necessary to delay the final determination of such customs value,
the importer shall nevertheless be able to withdraw his goods from customs
if, where so required, he provides sufficient guarantee in the form of a
surety, a deposit or some other appropriate instrument, covering the
ultimate payment of customs duties for which the goods may be liable. The
legislation of each Member shall make provisions for such circumstances.

Article 14

The notes at Annex I to this Agreement form an integral part of this
Agreement and the Articles of this Agreement are to be read and applied in
conjunction with their respective notes. Annexes II and III also form an
integral part of this Agreement.

Article 15

1. In this Agreement:

(a) "customs value of imported goods" means the value of goods for
the purposes of levying ad valorem duties of customs on imported
goods;

(b) "country of importation" means country or customs territory of
importation; and

© "produced" includes grown, manufactured and mined.

2. (a) In this Agreement "identical goods" means goods which are the
same in all respects, including physical characteristics, quality
and reputation. Minor differences in appearance would not
preclude goods otherwise conforming to the definition from being
regarded as identical.

(b) In this Agreement "similar goods" means goods which, although not
alike in all respects, have like characteristics and like
component materials which enable them to perform the same
functions and to be commercially interchangeable. The quality of
the goods, their reputation and the existence of a trademark are
among the factors to be considered in determining whether goods
are similar.

© The terms "identical goods" and "similar goods" do not include,
as the case may be, goods which incorporate or reflect
engineering, development, artwork, design work, and plans and
sketches for which no adjustment has been made under paragraph
1(b)(iv) of Article 8 because such elements were undertaken in
the country of importation.

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

(e) Goods produced by a different person shall be taken into account
only when there are no identical goods or similar goods, as the
case may be, produced by the same person as the goods being
valued.

3. In this Agreement "goods of the same class or kind" means goods which
fall within a group or range of goods produced by a particular industry or
industry sector, and includes identical or similar goods.

4. For the purposes of this Agreement, persons shall be deemed to be
related only if:

(a) they are officers or directors of one another's businesses;

(b) they are legally recognized partners in business;

© they are employer and employee;

(d) any person directly or indirectly owns, controls or holds 5 per
cent or more of the outstanding voting stock or shares of both of
them;

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

(f) both of them are directly or indirectly controlled by a third
person;

(g) together they directly or indirectly control a third person; or

(h) they are members of the same family.

5. Persons who are associated in business with one another in that one is
the sole agent, sole distributor or sole concessionaire, however described,
of the other shall be deemed to be related for the purposes of this
Agreement if they fall within the criteria of paragraph 4 of this Article.

Article 16

Upon written request, the importer shall have the right to an
explanation in writing from the customs administration of the country of
importation as to how the customs value of his imported goods was
determined.

Article 17

Nothing in this Agreement shall be construed as restricting or calling
into question the rights of customs administrations to satisfy themselves as
to the truth or accuracy of any statement, document or declaration presented
for customs valuation purposes.

PART II

ADMINISTRATION, CONSULTATIONS AND DISPUTE SETTLEMENT

Article 18

Institutions

There shall be established under this Agreement:

1. A Committee on Customs Valuation (hereinafter referred to as "the
Committee") composed of representatives from each of the Members. The
Committee shall elect its own Chairman and shall normally meet once a year,
or as is otherwise envisaged by the relevant provisions of this Agreement,
for the purpose of affording Members the opportunity to consult on matters
relating to the administration of the customs valuation system by any Member
as it might affect the operation of this Agreement or the furtherance of its
objectives and carrying out such other responsibilities as may be assigned
to it by the Members. The MTO Secretariat shall act as the secretariat to
the Committee.

2. A Technical Committee on Customs Valuation (hereinafter referred to as
"the Technical Committee") under the auspices of the Customs Co-operation
Council (hereinafter referred to as "the CCC"), which shall carry out the
responsibilities described in Annex II to this Agreement and shall operate
in accordance with the rules of procedure contained therein.

Article 19

Consultations and Dispute Settlement

1. Except as otherwise provided herein, the Understanding on Rules and
Procedures Governing the Settlement of Disputes is applicable to
consultations and the settlement of disputes under this Agreement.

2. If any Member considers that any benefit accruing to it, directly or
indirectly, under this Agreement is being nullified or impaired, or that the
achievement of any objective of this Agreement is being impeded, as a result
of the actions of another Member or of other Members, it may, with a view to
reaching a mutually satisfactory solution of this matter, request
consultations with the Member or Members in question. Each Member shall
afford sympathetic consideration to any request from another Member for
consultations.

3. The Technical Committee shall provide, upon request, advice and
assistance to Members engaged in consultations.

4. At the request of a party to the dispute, or on its own initiative, a
panel established to examine a dispute relating to the provisions of this
Agreement may request the Technical Committee to carry out an examination of
any questions requiring technical consideration. The panel shall determine
the terms of reference of the Technical Committee for the particular dispute
and set a time period for receipt of the report of the Technical Committee.
The panel shall take into consideration the report of the Technical
Committee. In the event that the Technical Committee is unable to reach
consensus on a matter referred to it pursuant to this paragraph, the panel
should afford the parties to the dispute with an opportunity to present
their views on the matter to the panel.

5. Confidential information provided to the panel shall not be disclosed
without formal authorization from the person, body or authority providing
such information. Where such information is requested from the panel but
release of such information by the panel is not authorized, a
non-confidential summary of this information, authorized by the person, body
or authority providing the information, shall be provided.

PART III

SPECIAL AND DIFFERENTIAL TREATMENT

Article 20

1. Developing country Members, not party to the Agreement (1979) on
Implementation of Article VII of the General Agreement on Tariffs and Trade,
may delay application of the provisions of this Agreement for a period not
exceeding five years from the date of entry into force of the Agreement
Establishing the MTO for such Members. Developing country Members who
choose to delay application of this Agreement shall notify the
Director-General of the MTO accordingly.

2. In addition to paragraph 1 above, developing country Members, not
party to the Agreement (1979) on Implementation of Article VII of the
General Agreement on Tariffs and Trade, may delay application of paragraph
2(b)(iii) of Article 1 and Article 6 for a period not exceeding three years
following their application of all other provisions of this Agreement.
Developing country Members that choose to delay application of the
provisions specified in this paragraph shall notify the Director-General of
the MTO accordingly.

3. Developed country Members shall furnish, on mutually agreed terms,
technical assistance to developing country Members that so request. On this
basis developed country Members shall draw up programmes of technical
assistance which may include, inter alia, training of personnel, assistance
in preparing implementation measures, access to sources of information
regarding customs valuation methodology, and advice on the application of
the provisions of this Agreement.

PART IV

FINAL PROVISIONS

Article 21

Reservations

Reservations may not be entered in respect of any of the provisions of
this Agreement without the consent of the other Members.

Article 22

National Legislation

1. Each Member shall ensure, not later than the date of application of
the provisions of this Agreement for it, the conformity of its laws,
regulations and administrative procedures with the provisions of this
Agreement.

2. Each Member shall inform the Committee of any changes in its laws and
regulations relevant to this Agreement and in the administration of such
laws and regulations.

Article 23

Review

The Committee shall review annually the implementation and operation
of this Agreement taking into account the objectives thereof. The Committee
shall annually inform the Council for Trade in Goods of developments during
the period covered by such reviews.

Article 24

Secretariat

This Agreement shall be serviced by the MTO Secretariat except in
regard to those responsibilities specifically assigned to the Technical
Committee, which will be serviced by the Secretariat of the CCC.







ANNEX I

INTERPRETATIVE NOTES

General Note

Sequential Application of Valuation Methods

1. Articles 1 to 7, inclusive, define how the customs value of imported
goods is to be determined under the provisions of this Agreement. The
methods of valuation are set out in a sequential order of application. The
primary method for customs valuation is defined in Article 1 and imported
goods are to be valued in accordance with the provisions of this Article
whenever the conditions prescribed therein are fulfilled.

2. Where the customs value cannot be determined under the provisions of
Article 1, it is to be determined by proceeding sequentially through the
succeeding Articles to the first such Article under which the customs value
can be determined. Except as provided in Article 4, it is only when the
customs value cannot be determined under the provisions of a particular
Article that the provisions of the next Article in the sequence can be used.

3. If the importer does not request that the order of Articles 5 and 6 be
reversed, the normal order of the sequence is to be followed. If the
importer does so request but it then proves impossible to determine the
customs value under the provisions of Article 6, the customs value is to be
determined under the provisions of Article 5, if it can be so determined.

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

Use of Generally Accepted Accounting Principles

1. "Generally accepted accounting principles" refers to the recognized
consensus or substantial authoritative support within a country at a
particular time as to which economic resources and obligations should be
recorded as assets and liabilities, which changes in assets and liabilities
should be recorded, how the assets and liabilities and changes in them
should be measured, what information should be disclosed and how it should
be disclosed, and which financial statements should be prepared. These
standards may be broad guidelines of general application as well as detailed
practices and procedures.

2. For the purposes of this Agreement, the customs administration of
each Member shall utilize information prepared in a manner consistent with
generally accepted accounting principles in the country which is appropriate
for the Article in question. For example, the determination of usual profit
and general expenses under the provisions of Article 5 would be carried out
utilizing information prepared in a manner consistent with generally
accepted accounting principles of the country of importation. On the other
hand, the determination of usual profit and general expenses under the
provisions of Article
6 would be carried out utilizing information prepared in a manner consistent
with generally accepted accounting principles of the country of production.
As a further example, the determination of an element provided for in
paragraph 1(b)(ii) of Article 8 undertaken in the country of importation
would be carried out utilizing information in a manner consistent with the
generally accepted accounting principles of that country.

Note to Article 1

Price Actually Paid or Payable

The price actually paid or payable is the total payment made or to be
made by the buyer to or for the benefit of the seller for the imported
goods. The payment need not necessarily take the form of a transfer of
money. Payment may be made by way of letters of credit or negotiable
instruments. Payment may be made directly or indirectly. An example of an
indirect payment would be the settlement by the buyer, whether in whole or
in part, of a debt owed by the seller.

Activities undertaken by the buyer on his own account, other than
those for which an adjustment is provided in Article 8, are not considered
to be an indirect payment to the seller, even though they might be regarded
as of benefit to the seller. The costs of such activities shall not,
therefore, be added to the price actually paid or payable in determining the
customs value.

The customs value shall not include the following charges or costs,
provided that they are distinguished from the price actually paid or payable
for the imported goods:

(a) charges for construction, erection, assembly, maintenance or
technical assistance, undertaken after importation on imported
goods such as industrial plant, machinery or equipment;

(b) the cost of transport after importation;

© duties and taxes of the country of importation.

The price actually paid or payable refers to the price for the
imported goods. Thus the flow of dividends or other payments from the buyer
to the seller that do not relate to the imported goods are not part of the
customs value.

Paragraph 1(a)(iii)

Among restrictions which would not render a price actually paid or
payable unacceptable are restrictions which do not substantially affect the
value of the goods. An example of such restrictions would be the case where
a seller requires a buyer of automobiles not to sell or exhibit them prior
to a fixed date which represents the beginning of a model year.

Paragraph 1(b)

If the sale or price is subject to some condition or consideration for
which a value cannot be determined with respect to the goods being valued,
the transaction value shall not be acceptable for customs purposes. Some
examples of this include:

(a) the seller establishes the price of the imported goods on
condition that the buyer will also buy other goods in specified
quantities;

(b) the price of the imported goods is dependent upon the price or
prices at which the buyer of the imported goods sells other goods
to the seller of the imported goods;

© the price is established on the basis of a form of payment
extraneous to the imported goods, such as where the imported
goods are semi-finished goods which have been provided by the
seller on condition that he will receive a specified quantity of
the finished goods.

However, conditions or considerations relating to the production or
marketing of the imported goods shall not result in rejection of the
transaction value. For example, the fact that the buyer furnishes the
seller with engineering and plans undertaken in the country of importation
shall not result in rejection of the transaction value for the purposes of
Article 1. Likewise, if the buyer undertakes on his own account, even
though by agreement with the seller, activities relating to the marketing of
the imported goods, the value of these activities is not part of the customs
value nor shall such activities result in rejection of the transaction
value.

Paragraph 2

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

2. Paragraph 2(a) provides that where the buyer and the seller are
related, the circumstances surrounding the sale shall be examined and the
transaction value shall be accepted as the customs value provided that the
relationship did not influence the price. It is not intended that there
should be an examination of the circumstances in all cases where the buyer
and the seller are related. Such examination will only be required where
there are doubts about the acceptability of the price. Where the customs
administration have no doubts about the acceptability of the price, it
should be accepted without requesting further information from the importer.
For example, the customs administration may have previously examined the
relationship, or it may already have detailed information concerning the
buyer and the seller, and may already be satisfied from such examination or
information that the relationship did not influence the price.

3. Where the customs administration is unable to accept the transaction
value without further inquiry, it should give the importer an opportunity to
supply such further detailed information as may be necessary to enable it to
examine the circumstances surrounding the sale. In this context, the
customs administration should be prepared to examine relevant aspects of the
transaction, including the way in which the buyer and seller organize their
commercial relations and the way in which the price in question was arrived
at, in order to determine whether the relationship influenced the price.
Where it can be shown that the buyer and seller, although related under the
provisions of Article 15, buy from and sell to each other as if they were
not related, this would demonstrate that the price had not been influenced
by the relationship. As an example of this, if the price had been settled
in a manner consistent with the normal pricing practices of the industry in
question or with the way the seller settles prices for sales to buyers who
are not related to him, this would demonstrate that the price had not been
influenced by the relationship. As a further example, where it is shown
that the price is adequate to ensure recovery of all costs plus a profit
which is representative of the firm's overall profit realized over a
representative period of time (e.g. on an annual basis) in sales of goods of
the same class or kind, this would demonstrate that the price had not been
influenced.

4. Paragraph 2(b) provides an opportunity for the importer to demonstrate
that the transaction value closely approximates to a "test" value previously
accepted by the customs administration and is therefore acceptable under the
provisions of Article 1. Where a test under paragraph 2(b) is met, it is
not necessary to examine the question of influence under paragraph 2(a). If
the customs administration has already sufficient information to be
satisfied, without further detailed inquiries, that one of the tests
provided in paragraph 2(b) has been met, there is no reason for it to
require the importer to demonstrate that the test can be met. In paragraph
2(b) the term "unrelated buyers" means buyers who are not related to the
seller in any particular case.

Paragraph 2(b)

A number of factors must be taken into consideration in determining
whether one value "closely approximates" to another value. These factors
include the nature of the imported goods, the nature of the industry itself,
the season in which the goods are imported, and, whether the difference in
values is commercially significant. Since these factors may vary from case
to case, it would be impossible to apply a uniform standard such as a fixed
percentage, in each case. For example, a small difference in value in a
case involving one type of goods could be unacceptable while a large
difference in a case involving another type of goods might be acceptable in
determining whether the transaction value closely approximates to the "test"
values set forth in paragraph 2(b) of Article 1.

Note to Article 2

1. In applying Article 2, the customs administration shall, wherever
possible, use a sale of identical goods at the same commercial level and in
substantially the same quantities as the goods being valued. Where no such
sale is found, a sale of identical goods that takes place under any one of
the following three conditions may be used:

(a) a sale at the same commercial level but in different quantities;

(b) a sale at a different commercial level but in substantially the
same quantities; or

© a sale at a different commercial level and in different
quantities.

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

(a) quantity factors only;

(b) commercial level factors only; or

© both commercial level and quantity factors.

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

4. For the purposes of Article 2, the transaction value of identical
imported goods means a customs value, adjusted as provided for in paragraphs
1(b) and 2 of this Article, which has already been accepted under Article 1.

5. A condition for adjustment because of different commercial levels or
different quantities is that such adjustment, whether it leads to an
increase or a decrease in the value, be made only on the basis of
demonstrated evidence that clearly establishes the reasonableness and
accuracy of the adjustments, e.g. valid price lists containing prices
referring to different levels or different quantities. As an example of
this, if the imported goods being valued consist of a shipment of 10 units
and the only identical imported goods for which a transaction value exists
involved a sale of 500 units, and it is recognized that the seller grants
quantity discounts, the required adjustment may be accomplished by resorting
to the seller's price list and using that price applicable to a sale of 10
units. This does not require that a sale had to have been made in
quantities of 10 as long as the price list has been established as being
bona fide through sales at other quantities. In the absence of such an
objective measure, however, the determination of a customs value under the
provisions of Article 2 is not appropriate.

Note to Article 3

1. In applying Article 3, the customs administration shall, wherever
possible, use a sale of similar goods at the same commercial level and in
substantially the same quantities as the goods being valued. Where no such
sale is found, a sale of similar goods that takes place under any one of the
following three conditions may be used:

(a) a sale at the same commercial level but in different quantities;

(b) a sale at a different commercial level but in substantially the
same quantities; or

© a sale at a different commercial level and in different
quantities.

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

(a) quantity factors only;

(b) commercial level factors only; or

© both commercial level and quantity factors.

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

4. For the purpose of Article 3, the transaction value of similar
imported goods means a customs value, adjusted as provided for in paragraphs
1(b) and 2 of this Article, which has already been accepted under Article 1.

5. A condition for adjustment because of different commercial levels or
different quantities is that such adjustment, whether it leads to an
increase or a decrease in the value, be made only on the basis of
demonstrated evidence that clearly establishes the reasonableness and
accuracy of the adjustment, e.g. valid price lists containing prices
referring to different levels or different quantities. As an example of
this, if the imported goods being valued consist of a shipment of 10 units
and the only similar imported goods for which a transaction value exists
involved a sale of 500 units, and it is recognized that the seller grants
quantity discounts, the required adjustment may be accomplished by resorting
to the seller's price list and using that price applicable to a sale of 10
units. This does not require that a sale had to have been made in
quantities of 10 as long as the price list has been established as being
bona fide through sales at other quantities. In the absence of such an
objective measure, however, the determination of a customs value under the
provisions of Article 3 is not appropriate.

Note to Article 5

1. The term "unit price at which ... goods are sold in the greatest
aggregate quantity" means the price at which the greatest number of units is
sold in sales to persons who are not related to the persons from whom they
buy such goods at the first commercial level after importation at which such
sales take place.

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



Sale quantity
Unit price

Number of sales Total quantity
sold at each price

1-10 units 100 10 sales of 5 units
5 sales of 3 units65

11-25 units95 5 sales of 11 units55

over 25 units90 1 sale of 30 units
1 sale of 50 units80
The greatest number of units sold at a price is 80; therefore, the
unit price in the greatest aggregate quantity is 90.

3. As another example of this, two sales occur. In the first sale 500
units are sold at a price of 95 currency units each. In the second sale 400
units are sold at a price of 90 currency units each. In this example, the
greatest number of units sold at a particular price is 500; therefore, the
unit price in the greatest aggregate quantity is 95.

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


(a) Sales

Sale quantity Unit price

40 units 100

30 units 90

15 units 100

50 units 95

25 units 105

35 units 90

5 units 100

(b) Totals

Total quantity soldUnit price

65 90

50 95

60 100

25 105
In this example, the greatest number of units sold at a particular
price is 65; therefore, the unit price in the greatest aggregate quantity
is 90.

5. Any sale in the importing country, as described in paragraph 1 above,
to a person who supplies directly or indirectly free of charge or at reduced
cost for use in connection with the production and sale for export of the
imported goods any of the elements specified in paragraph 1(b) of Article 8,
should not be taken into account in establishing the unit price for the
purposes of Article 5.

6. It should be noted that "profit and general expenses" referred to in
paragraph 1 of Article 5 should be taken as a whole. The figure for the
purposes of this deduction should be determined on the basis of information
supplied by or on behalf of the importer unless his figures are inconsistent
with those obtained in sales in the country of importation of imported goods
of the same class or kind. Where the importer's figures are inconsistent
with such figures, the amount for profit and general expenses may be based
upon relevant information other than that supplied by or on behalf of the
importer.

7. The "general expenses" include the direct and indirect costs of
marketing the goods in question.

8. Local taxes payable by reason of the sale of the goods for which a
deduction is not made under the provisions of paragraph 1(a)(iv) of Article
5 shall be deducted under the provisions of paragraph 1(a)(i) of Article 5.

9. In determining either the commissions or the usual profits and general
expenses under the provisions of paragraph 1 of Article 5, the question
whether certain goods are "of the same class or kind" as other goods must be
determined on a case-by-case basis by reference to the circumstances
involved. Sales in the country of importation of the narrowest group or
range of imported goods of the same class or kind, which includes the goods
being valued, for which the necessary information can be provided, should be
examined. For the purposes of Article 5, "goods of the same class or kind"
includes goods imported from the same country as the goods being valued as
well as goods imported from other countries.

10. For the purposes of paragraph 1(b) of Article 5, the "earliest date"
shall be the date by which sales of the imported goods or of identical or
similar imported goods are made in sufficient quantity to establish the unit
price.

11. Where the method in paragraph 2 of Article 5 is used, deductions made
for the value added by further processing shall be based on objective and
quantifiable data relating to the cost of such work. Accepted industry
formulas, recipes, methods of construction, and other industry practices
would form the basis of the calculations.

12. It is recognized that the method of valuation provided for in
paragraph 2 of Article 5 would normally not be applicable when, as a result
of the further processing, the imported goods lose their identity. However,
there can be instances where, although the identity of the imported goods is
lost, the value added by the processing can be determined accurately without
unreasonable difficulty. On the other hand, there can also be instances
where the imported goods maintain their identity but form such a minor
element in the goods sold in the country of importation that the use of this
valuation method would be unjustified. In view of the above, each situation
of this type must be considered on a case-by-case basis.

Note to Article 6

1. As a general rule, customs value is determined under this Agreement on
the basis of information readily available in the country of importation.
In order to determine a computed value, however, it may be necessary to
examine the costs of producing the goods being valued and other information
which has to be obtained from outside the country of importation.
Furthermore, in most cases the producer of the goods will be outside the
jurisdiction of the authorities of the country of importation. The use of
the computed value method will generally be limited to those cases where the
buyer and seller are related, and the producer is prepared to supply to the
authorities of the country of importation the necessary costings and to
provide facilities for any subsequent verification which may be necessary.

2. The "cost or value" referred to in paragraph 1(a) of Article 6 is to
be determined on the basis of information relating to the production of the
goods being valued supplied by or on behalf of the producer. It is to be
based upon the commercial accounts of the producer, provided that such
accounts are consistent with the generally accepted accounting principles
applied in the country where the goods are produced.

3. The "cost or value" shall include the cost of elements specified in
paragraphs 1(a)(ii) and (iii) of Article 8. It shall also include the
value, apportioned as appropriate under the provisions of the relevant note
to Article 8, of any element specified in paragraph 1(b) of Article 8 which
has been supplied directly or indirectly by the buyer for use in connection
with the production of the imported goods. The value of the elements
specified in paragraph 1(b)(iv) of Article 8 which are undertaken in the
country of importation shall be included only to the extent that such
elements are charged to the producer. It is to be understood that no cost
or value of the elements referred to in this paragraph shall be counted
twice in determining the computed value.

4. The "amount for profit and general expenses" referred to in paragraph
1(b) of Article 6 is to be determined on the basis of information supplied
by or on behalf of the producer unless his figures are inconsistent with
those usually reflected in sales of goods of the same class or kind as the
goods being valued which are made by producers in the country of exportation
for export to the country of importation.

5. It should be noted in this context that the "amount for profit and
general expenses" has to be taken as a whole. It follows that if, in any
particular case, the producer's profit figure is low and his general
expenses are high, his profit and general expenses taken together may
nevertheless be consistent with that usually reflected in sales of goods of
the same class or kind. Such a situation might occur, for example, if a
product were being launched in the country of importation and the producer
accepted a nil or low profit to offset high general expenses associated with
the launch. Where the producer can demonstrate that he is taking a low
profit on his sales of the imported goods because of particular commercial
circumstances, his actual profit figures should be taken into account
provided that he has valid commercial reasons to justify them and his
pricing policy reflects usual pricing policies in the branch of industry
concerned. Such a situation might occur, for example, where producers have
been forced to lower prices temporarily because of an unforeseeable drop in
demand, or where they sell goods to complement a range of goods being
produced in the country of importation and accept a low profit to maintain
competitivity. Where the producer's own figures for profit and general
expenses are not consistent with those usually reflected in sales of goods
of the same class or kind as the goods being valued which are made by
producers in the country of exportation for export to the country of
importation, the amount for profit and general expenses may be based upon
relevant information other than that supplied by or on behalf of the
producer of the goods.

6. Where information other than that supplied by or on behalf of the
producer is used for the purposes of determining a computed value, the
authorities of the importing country shall inform the importer, if the
latter so requests, of the source of such information, the data used and the
calculations based upon such data, subject to the provisions of Article 10.

7. The "general expenses" referred to in paragraph 1(b) of Article 6
covers the direct and indirect costs of producing and selling the goods for
export which are not included under paragraph 1(a) of Article 6.

8. Whether certain goods are "of the same class or kind" as other goods
must be determined on a case-by-case basis with reference to the
circumstances involved. In determining the usual profits and general
expenses under the provisions of Article 6, sales for export to the country
of importation of the narrowest group or range of goods, which includes the
goods being valued, for which the necessary information can be provided,
should be examined. For the purposes of Article 6, "goods of the same class
or kind" must be from the same country as the goods being valued.

Note to Article 7

1. Customs values determined under the provisions of Article 7 should, to
the greatest extent possible, be based on previously determined customs
values.

2. The methods of valuation to be employed under Article 7 should be
those laid down in Articles 1 to 6, inclusive, but a reasonable flexibility
in the application of such methods would be in conformity with the aims and
provisions of Article 7.

3. Some examples of reasonable flexibility are as follows:

(a) Identical goods - the requirement that the identical goods should
be exported at or about the same time as the goods being valued
could be flexibly interpreted; identical imported goods produced
in a country other than the country of exportation of the goods
being valued could be the basis for customs valuation; customs
values of identical imported goods already determined under the
provisions of Articles 5 and 6 could be used.

(b) Similar goods - the requirement that the similar goods should be
exported at or about the same time as the goods being valued
could be flexibly interpreted; similar imported goods produced
in a country other than the country of exportation of the goods
being valued could be the basis for customs valuation; customs
values of similar imported goods already determined under the
provisions of Articles 5 and 6 could be used.

© Deductive method - the requirement that the goods shall have been
sold in the "condition as imported" in paragraph 1(a) of Article
5 could be flexibly interpreted; the "ninety days" requirement
could be administered flexibly.

Note to Article 8

Paragraph 1(a)(i)

The term "buying commissions" means fees paid by an importer to his
agent for the service of representing him abroad in the purchase of the
goods being valued.

Paragraph 1(b)(ii)

1. There are two factors involved in the apportionment of the elements
specified in paragraph 1(b)(ii) of Article 8 to the imported goods - the
value of the element itself and the way in which that value is to be
apportioned to the imported goods. The apportionment of these elements
should be made in a reasonable manner appropriate to the circumstances and
in accordance with generally accepted accounting principles.

2. Concerning the value of the element, if the importer acquires the
element from a seller not related to him at a given cost, the value of the
element is that cost. If the element was produced by the importer or by a
person related to him, its value would be the cost of producing it. If the
element had been previously used by the importer, regardless of whether it
had been acquired or produced by such importer, the original cost of
acquisition or production would have to be adjusted downward to reflect its
use in order to arrive at the value of the element.

3. Once a value has been determined for the element, it is necessary to
apportion that value to the imported goods. Various possibilities exist.
For example, the value might be apportioned to the first shipment if the
importer wishes to pay duty on the entire value at one time. As another
example, the importer may request that the value be apportioned over the
number of units produced up to the time of the first shipment. As a further
example, he may request that the value be apportioned over the entire
anticipated production where contracts or firm commitments exist for that
production. The method of apportionment used will depend upon the
documentation provided by the importer.

4. As an illustration of the above, an importer provides the producer
with a mould to be used in the production of the imported goods and
contracts with him to buy 10,000 units. By the time of arrival of the first
shipment of 1,000 units, the producer has already produced 4,000 units. The
importer may request the customs administration to apportion the value of
the mould over 1,000 units, 4,000 units or 10,000 units.

Paragraph 1(b)(iv)

1. Additions for the elements specified in paragraph 1(b)(iv) of Article
8 should be based on objective and quantifiable data. In order to minimize
the burden for both the importer and customs administration in determining
the values to be added, data readily available in the buyer's commercial
record system should be used in so far as possible.

2. For those elements supplied by the buyer which were purchased or
leased by the buyer, the addition would be the cost of the purchase or the
lease. No addition shall be made for those elements available in the public
domain, other than the cost of obtaining copies of them.

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

4. For example, it is possible that a firm which imports a variety of
products from several countries maintains the records of its design centre
outside the country of importation in such a way as to show accurately the
costs attributable to a given product. In such cases, a direct adjustment
may appropriately be made under the provisions of Article 8.

5. In another case, a firm may carry the cost of the design centre
outside the country of importation as a general overhead expense without
allocation to specific products. In this instance, an appropriate
adjustment could be made under the provisions of Article 8 with respect to
the imported goods by apportioning total design centre costs over total
production benefiting from the design centre and adding such apportioned
cost on a unit basis to imports.

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

7. In cases where the production of the element in question involves a
number of countries and over a period of time, the adjustment should be
limited to the value actually added to that element outside the country of
importation.

Paragraph 1©

1. The royalties and licence fees referred to in paragraph 1© of
Article 8 may include, among other things, payments in respect to patents,
trade marks and copyrights. However, the charges for the right to reproduce
the imported goods in the country of importation shall not be added to the
price actually paid or payable for the imported goods in determining the
customs value.

2. Payments made by the buyer for the right to distribute or resell the
imported goods shall not be added to the price actually paid or payable for
the imported goods if such payments are not a condition of the sale for
export to the country of importation of the imported goods.

Paragraph 3

Where objective and quantifiable data do not exist with regard to the
additions required to be made under the provisions of Article 8, the
transaction value cannot be determined under the provisions of Article 1.
As an illustration of this, a royalty is paid on the basis of the price in a
sale in the importing country of a litre of a particular product that was
imported by the kilogram and made up into a solution after importation. If
the royalty is based partially on the imported goods and partially on other
factors which have nothing to do with the imported goods (such as when the
imported goods are mixed with domestic ingredients and are no longer
separately identifiable, or when the royalty cannot be distinguished from
special financial arrangements between the buyer and the seller), it would
be inappropriate to attempt to make an addition for the royalty. However,
if the amount of this royalty is based only on the imported goods and can be
readily quantified, an addition to the price actually paid or payable can be
made.

Note to Article 9

For the purposes of Article 9, "time of importation" may include the
time of entry for customs purposes.
Note to Article 11

1. Article 11 provides the importer with the right to appeal against a
valuation determination made by the customs administration for the goods
being valued. Appeal may first be to a higher level in the customs
administration, but the importer shall have the right in the final instance
to appeal to the judiciary.

2. "Without penalty" means that the importer shall not be subject to a
fine or threat of fine merely because he chose to exercise his right of
appeal. Payment of normal court costs and lawyers' fees shall not be
considered to be a fine.

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

Note to Article 15

Paragraph 4

For the purposes of this Article, the term "persons" includes legal
person, where appropriate.

Paragraph 4(e)

For the purposes of this Agreement, one person shall be deemed to
control another when the former is legally or operationally in a position to
exercise restraint or direction over the latter.





ANNEX II

TECHNICAL COMMITTEE ON CUSTOMS VALUATION

1. In accordance with Article 18 of this Agreement, the Technical
Committee shall be established under the auspices of the CCC with a view, at
the technical level, towards uniformity in interpretation and application of
this Agreement.

2. The responsibilities of the Technical Committee shall include the
following:

(a) to examine specific technical problems arising in the day-to-day
administration of the customs valuation system of Members and to
give advisory opinions on appropriate solutions based upon the
facts presented;

(b) to study, as requested, valuation laws, procedures and practices
as they relate to this Agreement and to prepare reports on the
results of such studies;

© to prepare and circulate annual reports on the technical aspects
of the operation and status of this Agreement;

(d) to furnish such information and advice on any matters concerning
the valuation of imported goods for customs purposes as may be
requested by any Member or the Committee. Such information and
advice may take the form of advisory opinions, commentaries or
explanatory notes;

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

(f) to carry out an examination of a matter referred to it by a panel
under Article 19 of this Agreement; and

(g) to exercise such other responsibilities as the Committee may
assign to it.

General

3. The Technical Committee shall attempt to conclude its work on specific
matters, especially those referred to it by Members, the Committee or a
panel, in a reasonably short period of time. As provided in paragraph 4 of
Article 19, a panel shall set a specific time period for receipt of a report
of the Technical Committee and the Technical Committee shall provide its
report within that period.

4. The Technical Committee shall be assisted as appropriate in its
activities by the Secretariat of the CCC.

Representation

5. Each Member shall have the right to be represented on the Technical
Committee. Each Member may nominate one delegate and one or more alternates
to be its representatives on the Technical Committee. Such a Member so
represented on the Technical Committee is hereinafter referred to as a
member of the Technical Committee. Representatives of members of the
Technical Committee may be assisted by advisers. The MTO Secretariat may
also attend such meetings with observer status.

6. Members of the CCC who are not Members of the MTO may be represented
at meetings of the Technical Committee by one delegate and one or more
alternates. Such representatives shall attend meetings of the Technical
Committee as observers.

7. Subject to the approval of the Chairman of the Technical Committee,
the Secretary-General of the CCC (hereinafter referred to as "the
Secretary-General") may invite representatives of governments which are
neither Members of the MTO nor members of the CCC and representatives of
international governmental and trade organizations to attend meetings of the
Technical Committee as observers.

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

Technical Committee Meetings

9. The Technical Committee shall meet as necessary but at least two times
a year. The date of each meeting shall be fixed by the Technical Committee
at its preceding session. The date of the meeting may be varied either at
the request of any member of the Technical Committee concurred in by a
simple majority of the members of the Technical Committee or, in cases
requiring urgent attention, at the request of the Chairman.
Notwithstanding the provisions in sentence 1 of this paragraph, the
Technical Committee shall meet as necessary to consider matters referred to
it by a panel under the provisions of Article 19 of this Agreement.

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

11. The Secretary-General shall inform all members of the Technical
Committee and those included under paragraphs 6 and 7 at least thirty days
in advance, except in urgent cases, of the opening date of each session of
the Technical Committee.

Agenda

12. A provisional agenda for each session shall be drawn up by the
Secretary-General and circulated to the members of the Technical Committee
and to those included under paragraphs 6 and 7 at least thirty days in
advance of the session, except in urgent cases. This agenda shall comprise
all items whose inclusion has been approved by the Technical Committee
during its preceding session, all items included by the Chairman on his own
initiative, and all items whose inclusion has been requested by the
Secretary-General, by the Committee or by any member of the Technical
Committee.

13. The Technical Committee shall determine its agenda at the opening of
each session. During the session the agenda may be altered at any time by
the Technical Committee.

Officers and Conduct of Business

14. The Technical Committee shall elect from among the delegates of its
members a Chairman and one or more Vice-Chairmen. The Chairman and
Vice-Chairmen shall each hold office for a period of one year. The retiring
Chairman and Vice-Chairmen are eligible for re-election. A Chairman or
Vice-Chairman who ceases to represent a member of the Technical Committee
shall automatically lose his mandate.

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

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

17. In addition to exercising the powers conferred upon him elsewhere by
these rules, the Chairman shall declare the opening and closing of each
meeting, direct the discussion, accord the right to speak, and, pursuant to
these rules, have control of the proceedings. The Chairman may also call a
speaker to order if his remarks are not relevant.

18. During discussion of any matter a delegation may raise a point of
order. In this event, the Chairman shall immediately state his ruling. If
this ruling is challenged, the Chairman shall submit it to the meeting for
decision and it shall stand unless overruled.

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

Quorum and Voting

20. Representatives of a simple majority of the members of the Technical
Committee shall constitute a quorum.

21. Each member of the Technical Committee shall have one vote. A
decision of the Technical Committee shall be taken by a majority comprising
at least two thirds of the members present. Regardless of the outcome of
the vote on a particular matter, the Technical Committee shall be free to
make a full report to the Committee and to the CCC on that matter indicating
the different views expressed in the relevant discussions. Notwithstanding
the above provisions of this paragraph, on matters referred to it by a
panel, the Technical Committee shall take decisions by consensus. Where no
agreement is reached in the Technical Committee on the question referred to
it by a panel, the Technical Committee shall provide a report detailing the
facts of the matter and indicating the views of the members.

Languages and Records

22. The official languages of the Technical Committee shall be English,
French and Spanish. Speeches or statements made in any of these three
languages shall be immediately translated into the other official languages
unless all delegations agree to dispense with translation. Speeches or
statements made in any other language shall be translated into English,
French and Spanish, subject to the same conditions, but in that event the
delegation concerned shall provide the translation into English, French or
Spanish. Only English, French and Spanish shall be used for the official
documents of the Technical Committee. Memoranda and correspondence for the
consideration of the Technical Committee must be presented in one of the
official languages.

23. The Technical Committee shall draw up a report of all its sessions
and, if the Chairman considers it necessary, minutes or summary records of
its meetings. The Chairman or his designee shall report on the work of the
Technical Committee at each meeting of the Committee and at each meeting of
the CCC.


ANNEX III

1. The five-year delay in the application of the provisions of the
Agreement by developing country Members provided for in paragraph 1 of
Article 20 may, in practice, be insufficient for certain developing country
Members. In such cases a developing country Member may request before the
end of the period referred to in paragraph 1 of Article 20 an extension of
such period, it being understood that the Members will give sympathetic
consideration to such a request in cases where the developing country Member
in question can show good cause.

2. Developing countries which currently value goods on the basis of
officially established minimum values may wish to make a reservation to
enable them to retain such values on a limited and transitional basis under
such terms and conditions as may be agreed to by the Members.

3. Developing countries which consider that the reversal of the
sequential order at the request of the importer provided for in Article 4 of
the Agreement may give rise to real difficulties for them may wish to make a
reservation to Article 4 in the following terms:

"The Government of ............. reserves the right to provide that
the relevant provision of Article 4 of the Agreement shall apply only
when the customs authorities agree to the request to reverse the order
of Articles 5 and 6."

If developing countries make such a reservation, the Members shall
consent to it under Article 21 of the Agreement.

4. Developing countries may wish to make a reservation with respect to
paragraph 2 of Article 5 of the Agreement in the following terms:

"The Government of ............ reserves the right to provide that
paragraph 2 of Article 5 of the Agreement shall be applied in
accordance with the provisions of the relevant note thereto whether or
not the importer so requests."

If developing countries make such a reservation, the Members shall
consent to it under Article 21 of the Agreement.

5. Certain developing country Members have expressed concern that there
may be problems in the implementation of Article 1 of the Agreement insofar
as it relates to importations into their countries by sole agents, sole
distributors and sole concessionaires. If such problems arise in practice
in developing country Members applying the Agreement, a study of this
question shall be made, at the request of such Members, with a view to
finding appropriate solutions.

6. Article 17 recognizes that in applying the Agreement, customs
administrations may need to make enquiries concerning the truth or accuracy
of any statement, document or declaration presented to them for customs
valuation purposes. The Article thus acknowledges that enquiries may be
made which are, for example, aimed at verifying that the elements of value
declared or presented to customs in connection with a determination of
customs value are complete and correct. Members, subject to their national
laws and procedures, have the right to expect the full co-operation of
importers in these enquiries.

7. The price actually paid or payable includes all payments actually made
or to be made as a condition of sale of the imported goods, by the buyer to
the seller, or by the buyer to a third party to satisfy an obligation of the
seller. AGREEMENT ON PRESHIPMENT INSPECTION

Members,

Noting that Ministers on 20 September 1986 agreed that "the Uruguay
Round of Multilateral Trade Negotiations shall aim to bring about further
liberalization and expansion of world trade, strengthen the role of GATT and
increase the responsiveness of the GATT system to the evolving international
economic environment";

Noting that a number of developing country Members have recourse to
preshipment inspection;

Recognizing the need of developing countries to do so for as long and
insofar as it is necessary to verify the quality, quantity or price of
imported goods;

Mindful that such programmes must be carried out without giving rise
to unnecessary delays or unequal treatment;

Noting that this inspection is by definition carried out on the
territory of exporter Members;

Recognizing the need to establish an agreed international framework of
rights and obligations of both user Members and exporter Members;

Recognizing that the principles and obligations of the GATT 1994 apply
to those activities of preshipment inspection entities that are mandated by
governments that are Members of the MTO;

Recognizing that it is desirable to provide transparency of the
operation of preshipment inspection entities and of laws and regulations
relating to preshipment inspection;

Desiring to provide for the speedy, effective and equitable resolution
of disputes between exporters and preshipment inspection entities arising
under this Agreement;

Hereby agree as follows:

Article 1

Coverage - Definitions

1. This Agreement shall apply to all preshipment inspection activities
carried out on the territory of Members, whether such activities are
contracted or mandated by the government, or any government body, of a
Member (hereinafter referred to as "user Member").

2. Preshipment inspection activities are all activities relating to the
verification of the quality, the quantity, the price, including currency
exchange rate and financial terms, and/or the customs classification of
goods to be exported to the territory of the user Member.

3. The term "preshipment inspection entity" is any entity contracted or
mandated by a Member to carry out preshipment inspection activities.[1]

Article 2

Obligations of User Members

Non-discrimination

1. User Members shall ensure that preshipment inspection activities are
carried out in a non-discriminatory manner, that the procedures and criteria
employed in the conduct of these activities are objective and are applied on
an equal basis to all exporters affected by such activities. They shall
ensure uniform performance of inspection by all the inspectors of the
preshipment inspection entities contracted or mandated by them.

Governmental Requirements

2. User Members shall ensure that in the course of preshipment inspection
activities relating to their laws, regulations and requirements, the
provisions of Article III:4 of the GATT 1994 are respected to the extent
that these are relevant.

Site of Inspection

3. User Members shall ensure that all preshipment inspection activities,
including the issuance of a Clean Report of Findings or a note of
non-issuance, are performed in the customs territory from which the goods
are exported or, if the inspection cannot be carried out in that customs
territory given the complex nature of the products involved, or if both
parties agree, in the customs territory in which the goods are manufactured.

Standards

4. User Members shall ensure that quantity and quality inspections are
performed in accordance with the standards defined by the seller and the
buyer in the purchase agreement and that, in the absence of such standards,
relevant international standards[2] apply.

Transparency

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

6. User Members shall ensure that, when initially contacted by exporters,
preshipment inspection entities provide to the exporters a list of all the
information which is necessary for the exporters to comply with inspection
requirements. The preshipment inspection entities shall provide the actual
information when so requested by exporters. This information shall include
a reference to the laws and regulations of the user Members relating to
preshipment inspection activities, and shall also include the procedures and
criteria used for inspection and for price and currency exchange rate
verification purposes, the exporters' rights vis-?-vis the inspection
entities, and the appeals procedures set up under paragraph 21 of this
Article. Additional procedural requirements or changes in existing
procedures shall not be applied to a shipment unless the exporter concerned
is informed of these changes at the time the inspection date is arranged.
However, in emergency situations of the types addressed by Articles XX and
XXI of the GATT 1994, such additional requirements or changes may be applied
to a shipment before the exporter has been informed. This assistance shall
not, however, relieve exporters from their obligations in respect of
compliance with the import regulations of the user Members.

7. User Members shall ensure that the information referred to in
paragraph 6 of this Article is made available to exporters in a convenient
manner, and that the preshipment inspection offices maintained by
preshipment inspection entities serve as information points where this
information is available.

8. User Members shall publish promptly all applicable laws and
regulations relating to preshipment inspection activities in such a manner
as to enable other governments and traders to become acquainted with them.

Protection of Confidential Business Information

9. User Members shall ensure that preshipment inspection entities treat
all information received in the course of the preshipment inspection as
business confidential to the extent that such information is not already
published, generally available to third parties, or otherwise in the public
domain. User Members shall ensure that preshipment inspection entities
maintain procedures to this end.

10. User Members shall provide information to Members on request on the
measures they are taking to give effect to paragraph 9 of this Article. The
provisions of this paragraph shall not require any Member to disclose
confidential information the disclosure of which would jeopardize the
effectiveness of the preshipment inspection programmes or would prejudice
the legitimate commercial interest of particular enterprises, public or
private.

11. User Members shall ensure that preshipment inspection entities do not
divulge confidential business information to any third party, except that
preshipment inspection entities may share this information with the
government entities that have contracted or mandated them. User Members
shall ensure that confidential business information which they receive from
preshipment inspection entities contracted or mandated by them is adequately
safeguarded. Preshipment inspection entities shall share confidential
business information with the governments contracting or mandating them only
to the extent that such information is customarily required for letters of
credit or other forms of payment or for customs, import licensing or
exchange control purposes.

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

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

(b) unpublished technical data other than data necessary to
demonstrate compliance with technical regulations or standards;

© internal pricing, including manufacturing costs;

(d) profit levels;

(e) the terms of contracts between exporters and their suppliers
unless it is not otherwise possible for the entity to conduct the
inspection in question. In such cases, the entity shall only
request the information necessary for this purpose.

13. The information referred to in paragraph 12 of this Article, which
preshipment inspection entities shall not otherwise request, may be released
voluntarily by the exporter to illustrate a specific case.

Conflicts of Interest

14. User Members shall ensure that preshipment inspection entities,
bearing in mind also the provisions on protection of confidential business
information in paragraphs 9-13 of this Article, maintain procedures to avoid
conflicts of interest:

(a) between preshipment inspection entities and any related entities
of the preshipment inspection entities in question, including any
entities in which the latter have a financial or commercial
interest or any entities which have a financial interest in the
preshipment inspection entities in question, and whose shipments
the preshipment inspection entities are to inspect;

(b) between preshipment inspection entities and any other entities,
including other entities subject to preshipment inspection, with
the exception of the government entities contracting or mandating
the inspections;

© with divisions of preshipment inspection entities engaged in
activities other than those required to carry out the inspection
process.

Delays

15. User Members shall ensure that preshipment inspection entities avoid
unreasonable delays in inspection of shipments. User Members shall ensure
that, once a preshipment inspection entity and an exporter agree on an
inspection date, the preshipment inspection entity conducts the inspection
on that date unless it is rescheduled on a mutually-agreed basis between the
exporter and the preshipment inspection entity, or the preshipment
inspection entity is prevented from doing so by the exporter or by force
majeure[3].

16. User Members shall ensure that, following receipt of the final
documents and completion of the inspection, preshipment inspection entities,
within five working days, either issue a Clean Report of Findings or provide
a detailed written explanation specifying the reasons for non-issuance.
User Members shall ensure that, in the latter case, preshipment inspection
entities give exporters the opportunity to present their views in writing
and, if exporters so request, arrange for re-inspection at the earliest
mutually convenient date.

17. User Members shall ensure that, whenever so requested by the
exporters, preshipment inspection entities undertake, prior to the date of
physical inspection, a preliminary verification of price and, where
applicable, of currency exchange rate, on the basis of the contract between
exporter and importer, the pro forma invoice and, where applicable, the
application for import authorization. User Members shall ensure that a
price or currency exchange rate that has been accepted by a preshipment
inspection entity on the basis of such preliminary verification is not
withdrawn, providing the goods conform to the import documentation and/or
import licence. They shall ensure that, after a preliminary verification
has taken place, preshipment inspection entities immediately inform
exporters in writing either of their acceptance or of their detailed reasons
for non-acceptance of the price and/or currency exchange rate.

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

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

Price Verification

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

(a) preshipment inspection entities shall only reject a contract
price agreed between an exporter and an importer if they can
demonstrate that their findings of an unsatisfactory price are
based on a verification process which is in conformity with the
criteria set out in (b)-(e) below;

(b) the preshipment inspection entity shall base its price comparison
for the verification of the export price on the price(s) of
identical or similar goods offered for export from the same
country of exportation at or about the same time, under
competitive and comparable conditions of sale, in conformity with
customary commercial practices and net of any applicable standard
discounts. Such comparison shall be based on the following:

- only prices providing a valid basis of comparison shall be
used, taking into account the relevant economic factors
pertaining to the country of importation and a country or
countries used for price comparison;
- the preshipment inspection entity shall not rely upon the
price of goods offered for export to different countries of
importation to arbitrarily impose the lowest price upon the
shipment;
- the preshipment inspection entity shall take into account
the specific elements listed in paragraph 20© of this
Article;
- at any stage in the process described above, the
preshipment inspection entity shall provide the exporter
with an opportunity to explain his price;

© when conducting price verification, preshipment inspection
entities shall make appropriate allowances for the terms of the
sales contract and generally applicable adjusting factors
pertaining to the transaction; these factors shall include but
not be limited to the commercial level and quantity of the sale,
delivery periods and conditions, price escalation clauses,
quality specifications, special design features, special shipping
or packing specifications, order size, spot sales, seasonal
influences, licence or other intellectual property fees, and
services rendered as part of the contract if these are not
customarily invoiced separately; they shall also include certain
elements relating to the exporter's price, such as the
contractual relationship between the exporter and importer;

(d) the verification of transportation charges shall relate only to
the agreed price of the mode of transport in the country of
exportation as indicated in the sales contract;

(e) the following shall not be used for price verification purposes:

(i) the selling price in the country of importation of goods
produced in such country;

(ii) the price of goods for export from a country other than the
country of exportation;

(iii) the cost of production;

(iv) arbitrary or fictitious prices or values.

Appeals Procedures

21. User Members shall ensure that preshipment inspection entities
establish procedures to receive, consider and render decisions concerning
grievances raised by exporters, and that information concerning such
procedures is made available to exporters in accordance with the provisions
of paragraphs 6-7 of this Article. User Members shall ensure that the
procedures are developed and maintained in accordance with the following
guidelines:

(a) preshipment inspection entities shall designate one or more
officials who shall be available during normal business hours in
each city or port in which they maintain a preshipment inspection
administrative office to receive, consider and render decisions
on exporters' appeals or grievances;

(b) exporters shall provide in writing to the designated official(s)
the facts concerning the specific transaction in question, the
nature of the grievance and a suggested solution;

© the designated official(s) shall afford sympathetic consideration
to exporters' grievances and shall render a decision as soon as
possible after receipt of the documentation referred to in (b)
above.

Derogation

22. By derogation to the provisions of Article 2, user Members shall
provide that, with the exception of part shipments, shipments whose value is
less than a minimum value applicable to such shipments as defined by the
user Member shall not be inspected, except in exceptional circumstances.
This minimum value shall form part of the information furnished to exporters
under the provisions of paragraph 6 of this Article.

Article 3

Obligations of Exporter Members

Non-discrimination

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

Transparency

2. Exporter Members shall publish promptly all applicable laws and
regulations relating to preshipment inspection activities in such a manner
as to enable other governments and traders to become acquainted with them.

Technical Assistance

3. Exporter Members shall offer to provide to user Members, if requested,
technical assistance directed towards the achievement of the objectives of
this Agreement on mutually agreed terms.[5]

Article 4

Independent Review Procedures

Members shall encourage preshipment inspection entities and exporters
mutually to resolve their disputes. However, two working days after
submission of the grievance in accordance with the provisions of paragraph
21 of Article 2, either party may refer the dispute to independent review.
Members shall take such reasonable measures as may be available to them to
ensure that the following procedures are established and maintained to this
end:

(a) these procedures shall be administered by an independent entity
constituted jointly by an organization representing preshipment
inspection entities and an organization representing exporters
for the purposes of this Agreement;

(b) the independent entity referred to in sub-paragraph (a) of this
Article shall establish a list of experts as follows:

(i) a section of members nominated by an organization
representing preshipment inspection entities;

(ii) a section of members nominated by an organization
representing exporters;

(iii) a section of independent trade experts, nominated by the
independent entity referred to in sub-paragraph (a) of this
Article.

The geographical distribution of the experts on this list shall
be such as to enable any disputes raised under these procedures
to be dealt with expeditiously. This list shall be drawn up
within two months of the entry into force of the Agreement
Establishing the MTO and shall be updated annually. The list
shall be publicly available. It shall be notified to the MTO
Secretariat and circulated to all Members;

© an exporter or preshipment inspection entity wishing to raise a
dispute shall contact the independent entity referred to in
sub-paragraph (a) of this Article and request the formation of a
panel. The independent entity shall be responsible for
establishing a panel. This panel shall consist of three members.
The members of the panel shall be chosen so as to avoid
unnecessary costs and delays. The first member shall be chosen
from section (i) of the above list by the preshipment inspection
entity concerned, provided that this member is not affiliated to
that entity. The second member shall be chosen from section (ii)
of the above list by the exporter concerned, provided that this
member is not affiliated to that exporter. The third member
shall be chosen from section (iii) of the above list by the
independent entity referred to in sub-paragraph (a) of this
Article. No objections shall be made to any independent trade
expert drawn from section (iii) of the above list;

(d) the independent trade expert drawn from section (iii) of the
above list shall serve as the chairman of the panel. He shall
take the necessary decisions to ensure an expeditious settlement
of the dispute by the panel, for instance, whether the facts of
the case require the panelists to meet and, if so, where such a
meeting shall take place, taking into account the site of the
inspection in question;

(e) if the parties to the dispute so agree, one independent trade
expert could be selected from section (iii) of the above list by
the independent entity referred to in sub-paragraph (a) of this
Article to review the dispute in question. This expert shall
take the necessary decisions to ensure an expeditious settlement
of the dispute, for instance taking into account the site of the
inspection in question;

(f) the object of the review shall be to establish whether, in the
course of the inspection in dispute, the parties to the dispute
have complied with the provisions of this Agreement. The
procedures shall be expeditious and provide the opportunity for
both parties to present their views in person or in writing;

(g) decisions by a three-member panel shall be taken by majority
vote. The decision on the dispute shall be rendered within eight
working days of the request for independent review and be
communicated to the parties to the dispute. This time-limit
could be extended upon agreement by the parties to the dispute.
The panel or independent trade expert shall apportion the costs,
based on the merits of the case;

(h) the decision of the panel shall be binding upon the preshipment
inspection entity and the exporter which are parties to the
dispute.

Article 5

Notification

Members shall submit to the MTO Secretariat copies of their laws and
regulations by which they put this Agreement into force, as well as copies
of any other laws and regulations relating to preshipment inspection when
the Agreement comes into force for the Member concerned. No changes in the
laws and regulations relating to preshipment inspection shall be enforced
before such changes have been officially published. They shall be notified
to the MTO Secretariat immediately after their publication. The MTO
Secretariat shall inform the Members of the availability of this
information.


Article 6

Review

At the end of the second year from the entry into force of the
Agreement Establishing the MTO and every three years thereafter, the
Ministerial Conference shall review the provisions, implementation and
operation of this Agreement, taking into account the objectives thereof and
experience gained in its operation. As a result of such review, the
Ministerial Conference may amend the provisions of the Agreement.

Article 7

Consultation

Members shall consult with other Members upon request with respect to
any matter affecting the operation of this Agreement. In such cases, the
provisions of Article XXII of the GATT 1994, as elaborated and applied by
the Understanding on Rules and Procedures Governing the Settlement of
Disputes, are applicable to this Agreement.

Article 8

Dispute Settlement

Any disputes among Members regarding the operation of this Agreement
shall be subject to the provisions of Article XXIII of the GATT 1994, as
elaborated and applied by the Understanding on Rules and Procedures
Governing the Settlement of Disputes.

Article 9

Final Provisions

1. Members shall take the necessary measures for the implementation of
the present Agreement.

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

1. It is understood that this provision does not obligate Members to allow
government entities of other Members to conduct preshipment inspection
activities on their territory.

2. An international standard is a standard adopted by a governmental or
non-governmental body whose membership is open to all Members, one of whose
recognized activities is in the field of standardization.

3. It is understood that, for the purposes of this Agreement, force majeure
shall mean "irresistible compulsion or coercion, unforeseeable course of
events excusing from fulfilment of contract".

4. The obligations of user Members with respect to the services of
preshipment inspection entities in connection with customs valuation shall
be the obligations which they have accepted in the GATT 1994 and the other
Multilateral Trade Agreements included in Annex 1A of the Agreement
Establishing the Multilateral Trade Organization.

5. It is understood that such technical assistance may be given on a
bilateral, plurilateral or multilateral basis.


AGREEMENT ON RULES OF ORIGIN

Members,

Noting that Ministers on 20 September 1986 agreed that "the Uruguay
Round of Multilateral Trade Negotiations shall aim to bring about further
liberalization and expansion of world trade, strengthen the role of the GATT
and increase the responsiveness of the GATT system to the evolving
international economic environment";

Desiring to further the objectives of the GATT 1994;

Recognizing that clear and predictable rules of origin and their
application facilitate the flow of international trade;

Desiring to ensure that rules of origin themselves do not create
unnecessary obstacles to trade;

Desiring to ensure that rules of origin do not nullify or impair the
rights of Members under the GATT 1994;

Recognizing that it is desirable to provide transparency of laws,
regulations, and practices regarding rules of origin;

Desiring to ensure that rules of origin are prepared and applied in an
impartial, transparent, predictable, consistent and neutral manner;

Recognizing the availability of a consultation mechanism and
procedures for the speedy, effective and equitable resolution of disputes
arising under this Agreement;

Desiring to harmonize and clarify rules of origin;

Hereby agree as follows:

PART I

DEFINITIONS AND COVERAGE

Article 1

Rules of Origin

1. For the purposes of Parts I to IV of this Agreement, rules of origin
shall be defined as those laws, regulations and administrative
determinations of general application applied by any Member to determine the
country of origin of goods provided such rules of origin are not related to
contractual or autonomous trade r?gimes leading to the granting of tariff
preferences going beyond the application of Article I:1 of the GATT 1994.

2. Rules of origin referred to in paragraph 1 shall include all rules of
origin used in non-preferential commercial policy instruments, such as in
the application of: most-favoured-nation treatment under Articles I, II,
III, XI and XIII of the GATT 1994; anti-dumping and countervailing duties
under Article VI of the GATT 1994; safeguard measures under Article XIX of
the GATT 1994; origin marking requirements under Article IX of the GATT
1994; and any discriminatory quantitative restrictions or tariff quotas.
They shall also include rules of origin used for government procurement and
trade statistics.[1]

PART II

DISCIPLINES TO GOVERN THE APPLICATION OF RULES OF ORIGIN

Article 2

Disciplines During the Transition Period

Until the work programme for the harmonization of rules of origin set
out in Part IV below is completed, Members shall ensure that:

(a) when they issue administrative determinations of general
application, the requirements to be fulfilled are clearly
defined. In particular:

- in cases where the criterion of change of tariff
classification is applied, such a rule of origin, and any
exceptions to the rule, must clearly specify the
sub-headings or headings within the tariff nomenclature
that are addressed by the rule;
- in cases where the ad valorem percentage criterion is
applied, the method for calculating this percentage shall
also be indicated in the rules of origin;
- in cases where the criterion of manufacturing or processing
operation is prescribed, the operation that confers origin
on the good concerned shall be precisely specified;

(b) notwithstanding the measure or instrument of commercial policy to
which they are linked, their rules of origin are not used as
instruments to pursue trade objectives directly or indirectly;

© rules of origin shall not themselves create restrictive,
distorting, or disruptive effects on international trade. They
shall not pose unduly strict requirements or require the
fulfilment of a certain condition not related to manufacturing or
processing, as a prerequisite for the determination of the
country of origin. However, costs not directly related to
manufacturing or processing may be included for the purposes of
the application of an ad valorem percentage criterion consistent
with sub-paragraph (a) above;

(d) the rules of origin that they apply to imports and exports are
not more stringent than the rules of origin they apply to
determine whether or not a good is domestic and shall not
discriminate between other Members, irrespective of the
affiliation of the manufacturers of the good concerned;[2]

(e) their rules of origin are administered in a consistent, uniform,
impartial and reasonable manner;

(f) their rules of origin are based on a positive standard. Rules of
origin that state what does not confer origin (negative standard)
are permissible as part of a clarification of a positive standard
or in individual cases where a positive determination of origin
is not necessary;

(g) their laws, regulations, judicial and administrative rulings of
general application relating to rules of origin are published as
if they were subject to, and in accordance with, the provisions
of Article X:1 of the GATT 1994;

(h) upon the request of an exporter, importer or any person with a
justifiable cause, assessments of the origin they would accord to
a good are issued as soon as possible but no later than 150
days[3] after a request for such an assessment provided that all
necessary elements have been submitted. Requests for such
assessments shall be accepted before trade in the good concerned
begins and may be accepted at any later point in time. Such
assessments shall remain valid for three years provided that the
facts and conditions, including the rules of origin, under which
they have been made remain comparable. Provided that the parties
concerned are informed in advance, such assessments will no
longer be valid when a decision contrary to the assessment is
made in a review as referred to in sub-paragraph (j) below. Such
assessments shall be made publicly available subject to the
provisions of sub-paragraph (k) below;

(i) when introducing changes to their rules of origin or new rules of
origin, they shall not apply such changes retroactively as
defined in, and without prejudice to, their laws or regulations;

(j) any administrative action which they take in relation to the
determination of origin is reviewable promptly by judicial,
arbitral or administrative tribunals or procedures, independent
of the authority issuing the determination, which can effect the
modification or reversal of the determination;

(k) all information that is by nature confidential or that is
provided on a confidential basis for the purpose of the
application of rules of origin is treated as strictly
confidential by the authorities concerned, which shall not
disclose it without the specific permission of the person or
government providing such information, except to the extent that
it may be required to be disclosed in the context of judicial
proceedings.


Article 3

Disciplines after the Transition Period

Taking into account the aim of all Members to achieve as a result of
the harmonization work programme set out in Part IV below, the establishment
of harmonized rules of origin, the Members shall ensure, upon the
implementation of the results of the harmonization work programme that:

(a) they apply rules of origin equally for all purposes as set out in
Article 1 above;

(b) under their rules of origin, the country to be determined as the
origin of a particular good is either the country where the good
has been wholly obtained or, when more than one country is
concerned in the production of the good, the country where the
last substantial transformation has been carried out;

© the rules of origin that they apply to imports and exports are
not more stringent than the rules of origin they apply to
determine whether or not a good is domestic and shall not
discriminate between other Members, irrespective of the
affiliation of the manufacturers of the good concerned;

(d) the rules of origin are administered in a consistent, uniform,
impartial and reasonable manner;

(e) their laws, regulations, judicial and administrative rulings of
general application relating to rules of origin are published as
if they were subject to, and in accordance with, the provisions
of Article X:1 of the GATT 1994;

(f) upon the request of an exporter, importer or any person with a
justifiable cause, assessments of the origin they would accord to
a good are issued as soon as possible but no later than 150 days
after a request for such an assessment provided that all
necessary elements have been submitted. Requests for such
assessments shall be accepted before trade in the good concerned
begins and may be accepted at any later point in time. Such
assessments shall remain valid for three years provided that the
facts and conditions, including the rules of origin, under which
they have been made remain comparable. Provided that the parties
concerned are informed in advance, such assessments will no
longer be valid when a decision contrary to the assessment is
made in a review as referred to in sub-paragraph (h) below. Such
assessments shall be made publicly available subject to the
provisions of sub-paragraph (i) below;

(g) when introducing changes to their rules of origin or new rules of
origin, they shall not apply such changes retroactively as
defined in, and without prejudice to, their laws or regulations;

(h) any administrative action which they take in relation to the
determination of origin is reviewable promptly by judicial,
arbitral or administrative tribunals or procedures, independent
of the authority issuing the determination, which can effect the
modification or reversal of the determination;

(i) all information which is by nature confidential or which is
provided on a confidential basis for the purpose of the
application of rules of origin is treated as strictly
confidential by the authorities concerned, which shall not
disclose it without the specific permission of the person or
government providing such information, except to the extent that
it may be required to be disclosed in the context of judicial
proceedings.


PART III

PROCEDURAL ARRANGEMENTS ON NOTIFICATION, REVIEW,
CONSULTATION AND DISPUTE SETTLEMENT

Article 4

Institutions

There shall be established under this Agreement:

1. a Committee on Rules of Origin (hereinafter referred to as "the
Committee") composed of the representatives from each of the Members. The
Committee shall elect its own Chairman and shall meet as necessary, but not
less than once a year, for the purpose of affording Members the opportunity
to consult on matters relating to the operation of Parts I, II, III and IV
of the Agreement or the furtherance of the objectives set out in these Parts
and to carry out such other responsibilities assigned to it under this
Agreement or by the Council for Trade in Goods. Where appropriate, the
Committee shall request information and advice from the Technical Committee
(referred to in paragraph 2 below) on matters related to this Agreement.
The Committee may also request such other work from the Technical Committee
as it considers appropriate for the furtherance of the above-mentioned
objectives of this Agreement. The MTO Secretariat shall act as the
Secretariat to the Committee;

2. a Technical Committee on Rules of Origin (hereinafter referred to as
"the Technical Committee") under the auspices of the Customs Co-operation
Council (CCC) as set out in Annex I of this Agreement. The Technical
Committee shall carry out the technical work called for in Part IV and
prescribed in Annex I of this Agreement. Where appropriate, the Technical
Committee shall request information and advice from the Committee on matters
related to this Agreement. The Technical Committee may also request such
other work from the Committee as it considers appropriate for the
furtherance of the above-mentioned objectives of the Agreement. The CCC
secretariat shall act as the secretariat to the Technical Committee.

Article 5

Information and Procedures for Modification
and Introduction of New Rules of Origin

1. Upon entry into force of the Agreement Establishing the MTO, each
Member shall provide to the MTO Secretariat within 90 days its rules of
origin, judicial decisions, and administrative rulings of general
application relating to rules of origin in effect on the date of entry into
force of the Agreement Establishing the MTO. If by inadvertence a rule of
origin has not been provided, the Member concerned shall provide it
immediately after this fact becomes known. Lists of information received
and available with the MTO Secretariat shall be circulated to the Members by
the MTO Secretariat.

2. During the period referred to in Article 2 above, Members introducing
modifications, other than de minimis modifications, to their rules of origin
or introducing new rules of origin, which, for the purpose of this Article,
shall include any rule of origin referred to in paragraph 1 above and not
provided to the MTO Secretariat, shall publish a notice to that effect at
least 60 days before the entry into force of the modified or new rule in
such a manner as to enable interested parties to become acquainted with the
intention to modify a rule of origin or to introduce a new rule of origin,
unless exceptional circumstances arise or threaten to arise for a Member.
In these exceptional cases, the Member shall publish the modified or new
rule as soon as possible.

Article 6

Review

1. The Committee shall review annually the implementation and operation
of Parts II and III of this Agreement having regard to its objectives. The
Committee shall annually inform the Council for Trade in Goods of
developments during the period covered by such reviews.

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

3. The Committee, in cooperation with the Technical Committee, shall set
up a mechanism to consider and propose amendments to the results of the
harmonization work programme, taking into account the objectives and
principles set out in Article 9. This may include instances where the rules
need to be made more operational or need to be updated to take into account
new production processes as affected by any technological change.

Article 7

Consultation

The provisions of Article XXII of the GATT 1994, as elaborated and
applied by the Understanding on Rules and Procedures Governing the
Settlement of Disputes, are applicable to this Agreement.

Article 8

Dispute Settlement

The provisions of Article XXIII of the GATT 1994, as elaborated and
applied by the Understanding on Rules and Procedures Governing the
Settlement of Disputes, are applicable to this Agreement.

PART IV

HARMONIZATION OF RULES OF ORIGIN

Article 9

Objectives and Principles

1. With the objectives of harmonizing rules of origin and, inter alia,
providing more certainty in the conduct of world trade, the Ministerial
Conference shall undertake the work programme set out below in conjunction
with the CCC, on the basis of the following principles:

(a) rules of origin should be applied equally for all purposes as set
out in Article 1 above;

(b) rules of origin should provide for the country to be determined
as the origin of a particular good to be either the country where
the good has been wholly obtained or, when more than one country
is concerned in the production of the good, the country where the
last substantial transformation has been carried out;

© rules of origin should be objective, understandable and
predictable;

(d) notwithstanding the measure or instrument to which they may be
linked, rules of origin should not be used as instruments to
pursue trade objectives directly or indirectly. They should not
themselves create restrictive, distorting or disruptive effects
on international trade. They should not pose unduly strict
requirements or require the fulfilment of a certain condition not
relating to manufacturing or processing as a prerequisite for the
determination of the country of origin. However, costs not
directly related to manufacturing or processing may be included
for purposes of the application of an ad valorem percentage
criterion;

(e) rules of origin should be administrable in a consistent, uniform,
impartial and reasonable manner;

(f) rules of origin should be coherent;

(g) rules of origin should be based on a positive standard. Negative
standards may be used to clarify a positive standard.

Work Programme

2. (a) The work programme shall be initiated as soon after the entry
into force of the Agreement Establishing the MTO as possible and
will be completed within three years of initiation.

(b) The Committee and the Technical Committee provided for in Article
4 of this Agreement shall be the appropriate bodies to conduct
this work.

© To provide for detailed input by the CCC, the Committee shall
request the Technical Committee to provide its interpretations
and opinions resulting from the work described below on the basis
of the principles listed in paragraph 1 of this Article. To
ensure timely completion of the work programme for harmonization,
such work shall be conducted on a product sector basis, as
represented by various chapters or sections of the Harmonized
System (HS) nomenclature.

(i) Wholly Obtained and Minimal Operations or Processes

The Technical Committee shall develop harmonized definitions of:

- the goods that are to be considered as being wholly
obtained in one country. This work shall be as detailed as
possible;
- minimal operations or processes that do not by themselves
confer origin to a good.

The results of this work shall be submitted to the Committee
within three months of receipt of the request from the Committee.

(ii) Substantial Transformation - Change in Tariff
Classification

- The Technical Committee shall consider and elaborate upon,
on the basis of the criterion of substantial
transformation, the use of change in tariff subheading or
heading when developing rules of origin for particular
products or a product sector and, if appropriate, the
minimum change within the nomenclature that meets this
criterion.
- The Technical Committee shall divide the above work on a
product basis taking into account the chapters or sections
of the HS nomenclature, so as to submit results of its work
to the Committee at least on a quarterly basis. The
Technical Committee shall complete the above work within
one year and three months from receipt of the request of
the Committee.

(iii) Substantial Transformation - Supplementary Criteria

Upon completion of the work under (ii) for each product sector or
individual product category where the exclusive use of the HS
nomenclature does not allow for the expression of substantial
transformation, the Technical Committee:

- shall consider and elaborate upon, on the basis of the
criterion of substantial transformation, the use, in a
supplementary or exclusive manner, of other requirements,
including ad valorem percentages[4] and/or manufacturing or
processing operations[5], when developing rules of origin
for particular products or a product sector;
- may provide explanations for its proposals;
- shall divide the above work on a product basis taking into
account the chapters or sections of the HS nomenclature, so
as to submit results of its work to the Committee at least
on a quarterly basis. The Technical Committee shall
complete the above work within two years and three months
of receipt of the request from the Committee.

R?le of the Committee

3. On the basis of the principles listed in paragraph 1 of this Article:

(a) the Committee shall consider the interpretations and opinions of
the Technical Committee periodically in accordance with the
time-frames provided in (i), (ii) and (iii) above with a view to
endorsing such interpretations and opinions. The Committee may
request the Technical Committee to refine or elaborate its work
and/or to develop new approaches. To assist the Technical
Committee, the Committee should provide its reasons for requests
for additional work and, as appropriate, suggest alternative
approaches;

(b) upon completion of all the work identified in (i), (ii) and (iii)
above, the Committee shall consider the results in terms of their
overall coherence.

Results of the Harmonization Work Programme and Subsequent Work

4. The Ministerial Conference shall establish the results of the
harmonization work programme in an annex as an integral part of this
Agreement.[6] The Ministerial Conference shall establish a time-frame for
the entry into force of this annex.


ANNEX I

TECHNICAL COMMITTEE ON RULES OF ORIGIN

Responsibilities

1. The on-going responsibilities of the Technical Committee shall include
the following:

(a) at the request of any member of the Technical Committee, to
examine specific technical problems arising in the day-to-day
administration of the rules of origin of Members and to give
advisory opinions on appropriate solutions based upon the facts
presented;

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

© to prepare and circulate periodic reports on the technical
aspects of the operation and status of this Agreement; and

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

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

3. The Technical Committee shall attempt to conclude its work on specific
matters, especially those referred to it by Members or the Committee, in a
reasonably short period of time.

Representation

4. Each Member shall have the right to be represented on the Technical
Committee. Each Member may nominate one delegate and one or more alternates
to be its representatives on the Technical Committee. Such a Member so
represented on the Technical Committee is hereinafter referred to as a
"member" of the Technical Committee. Representatives of members of the
Technical Committee may be assisted by advisers at meetings of the Technical
Committee. The MTO Secretariat may also attend such meetings with observer
status.

5. Members of the CCC who are not MTO Members may be represented at
meetings of the Technical Committee by one delegate and one or more
alternates. Such representatives shall attend meetings of the Technical
Committee as observers.

6. Subject to the approval of the Chairman of the Technical Committee,
the Secretary-General of the CCC (hereinafter referred to as "the
Secretary-General") may invite representatives of governments which are
neither MTO Members nor members of the CCC and representatives of
international governmental and trade organizations to attend meetings of the
Technical Committee as observers.

7. Nominations of delegates, alternates and advisers to meetings of the
Technical Committee shall be made to the Secretary-General.

Meetings

8. The Technical Committee shall meet as necessary, but not less than
once a year.

Procedures

9. The Technical Committee shall elect its own Chairman and shall
establish its own procedures.


ANNEX II

COMMON DECLARATION WITH REGARD TO PREFERENTIAL RULES OF ORIGIN

1. Recognizing that some Members apply preferential rules of origin,
distinct from non-preferential rules of origin, the Members hereby agree as
follows.

2. For the purposes of this Common Declaration, preferential rules of
origin shall be defined as those laws, regulations and administrative
determinations of general application applied by any Member to determine
whether goods qualify for preferential treatment under contractual or
autonomous trade r?gimes leading to the granting of tariff preferences going
beyond the application of Article I:1 of the GATT 1994.

3. The Members agree to ensure that:

(a) when they issue administrative determinations of general
application, the requirements to be fulfilled are clearly
defined. In particular:

- in cases where the criterion of change of tariff
classification is applied, such a preferential rule of
origin, and any exceptions to the rule, must clearly
specify the sub-headings or headings within the tariff
nomenclature that are addressed by the rule;
- in cases where the ad valorem percentage criterion is
applied, the method for calculating this percentage shall
also be indicated in the preferential rules of origin;
- in cases where the criterion of manufacturing or processing
operation is prescribed, the operation that confers
preferential origin shall be precisely specified;

(b) their preferential rules of origin are based on a positive
standard. Preferential rules of origin that state what does not
confer preferential origin (negative standard) are permissible as
part of a clarification of a positive standard or in individual
cases where a positive determination of preferential origin is
not necessary;

© their laws, regulations, judicial and administrative rulings of
general application relating to preferential rules of origin are
published as if they were subject to, and in accordance with, the
provisions of Article X:1 of the GATT 1994;

(d) upon request of an exporter, importer or any person with a
justifiable cause, assessments of the preferential origin they
would accord to a good are issued as soon as possible but no
later than 150 days[7] after a request for such an assessment
provided that all necessary elements have been submitted.
Requests for such assessments shall be accepted before trade in
the good concerned begins and may be accepted at any later point
in time. Such assessments shall remain valid for three years
provided that the facts and conditions, including the
preferential rules of origin, under which they have been made
remain comparable. Provided that the parties concerned are
informed in advance, such assessments will no longer be valid
when a decision contrary to the assessment is made in a review as
referred to in sub-paragraph (f) below. Such assessments shall
be made publicly available subject to the provisions of
sub-paragraph (g) below;

(e) when introducing changes to their preferential rules of origin or
new preferential rules of origin, they shall not apply such
changes retroactively as defined in, and without prejudice to,
their laws or regulations;

(f) any administrative action which they take in relation to the
determination of preferential origin is reviewable promptly by
judicial, arbitral or administrative tribunals or procedures,
independent of the authority issuing the determination, which can
effect the modification or reversal of the determination;

(g) all information that is by nature confidential or that is
provided on a confidential basis for the purpose of the
application of preferential rules of origin is treated as
strictly confidential by the authorities concerned, which shall
not disclose it without the specific permission of the person or
government providing such information, except to the extent that
it may be required to be disclosed in the context of judicial
proceedings.

4. The Members agree to provide to the MTO Secretariat promptly their
preferential rules of origin, including a listing of the preferential
arrangements to which they apply, judicial decisions, and administrative
rulings of general application relating to their preferential rules of
origin in effect on the date of entry into force of this Common Declaration.
Furthermore, Members agree to provide any modifications to their
preferential rules of origin or new preferential rules of origin as soon as
possible to the MTO Secretariat. Lists of information received and
available with the MTO Secretariat shall be circulated to the Members by the
MTO Secretariat.

1. It is understood that this provision is without prejudice to those
determinations made for purposes of defining "domestic industry" or "like
products of domestic industry" or similar terms wherever they apply.

2. With respect to rules of origin applied for the purposes of government
procurement, this provision shall not create obligations additional to those
already assumed by Members under the GATT 1994.

3. In respect of requests made during the first year from entry into force
of the Agreement Establishing the MTO, Members shall only be required to
issue these assessments as soon as possible.

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

5. If the criterion of manufacturing or processing operation is prescribed,
the operation that confers origin on the product concerned shall be
precisely specified.

6. At the same time, consideration shall be given to arrangements concerning
the settlement of disputes relating to customs classification.

7. In respect of requests made during the first year from entry into force
of the Agreement Establishing the MTO, Members shall only be required to
issue these assessments as soon as possible.


AGREEMENT ON IMPORT LICENSING PROCEDURES

Members,

Having regard to the Multilateral Trade Negotiations;

Desiring to further the objectives of the GATT 1994;

Taking into account the particular trade, development and financial
needs of developing country Members;

Recognizing the usefulness of automatic import licensing for certain
purposes and that such licensing should not be used to restrict trade;

Recognizing that import licensing may be employed to administer
measures such as those adopted pursuant to the relevant provisions of the
GATT 1994;

Recognizing the provisions of the GATT 1994 as they apply to import
licensing procedures;

Desiring to ensure that import licensing procedures are not utilized
in a manner contrary to the principles and obligations of the GATT 1994;

Recognizing that the flow of international trade could be impeded by
the inappropriate use of import licensing procedures;

Convinced that import licensing, particularly non-automatic import
licensing, should be implemented in a transparent and predictable manner;

Recognizing that non-automatic licensing procedures should be no more
administratively burdensome than absolutely necessary to administer the
relevant measure;

Desiring to simplify, and bring transparency to, the administrative
procedures and practices used in international trade, and to ensure the fair
and equitable application and administration of such procedures and
practices;

Desiring to provide for a consultative mechanism and the speedy,
effective and equitable resolution of disputes arising under this Agreement;

Hereby agree as follows:

Article 1

General Provisions

1. For the purpose of this Agreement, import licensing is defined as
administrative procedures[1] used for the operation of import licensing
r?gimes requiring the submission of an application or other documentation
(other than that required for customs purposes) to the relevant
administrative body as a prior condition for importation into the customs
territory of the importing Member.

2. Members shall ensure that the administrative procedures used to
implement import licensing r?gimes are in conformity with the relevant
provisions of the GATT 1994 including its annexes and protocols, as
interpreted by this Agreement, with a view to preventing trade distortions
that may arise from an inappropriate operation of those procedures, taking
into account the economic development purposes and financial and trade needs
of developing country Members.[2]

3. The rules for import licensing procedures shall be neutral in
application and administered in a fair and equitable manner.

4. (a) The rules and all information concerning procedures for the
submission of applications, including the eligibility of persons, firms and
institutions to make such applications, the administrative body(ies) to be
approached, and the lists of products subject to the licensing requirement
shall be published in the sources notified to the Committee established
under Article 4, in such a manner as to enable governments[3] and traders to
become acquainted with them. Such publication shall take place, whenever
practicable, twenty-one days prior to the effective date of the requirement
but in all events not later than such effective date. Any exception,
derogations or changes in or from the rules concerning licensing procedures
or the list of products subject to import licensing shall also be published
in the same manner and within the same time periods as specified above.
Copies of these publications shall also be made available to the MTO
Secretariat.

(b) Members who wish to make comments in writing shall be provided
the opportunity to discuss these comments upon request. The concerned
Member shall give due consideration to these comments and results of
discussion.

5. Application forms and, where applicable, renewal forms shall be as
simple as possible. Such documents and information as are considered
strictly necessary for the proper functioning of the licensing r?gime may be
required on application.

6. Application procedures and, where applicable, renewal procedures shall
be as simple as possible. Applicants shall be allowed a reasonable period
for the submission of licence applications. Where there is a closing date,
this period should be at least twenty-one days with provision for extension
in circumstances where insufficient applications have been received within
this period. Applicants shall have to approach only one administrative body
in connection with an application. Where it is strictly indispensable to
approach more than one administrative body, applicants shall not need to
approach more than three administrative bodies.

7. No application shall be refused for minor documentation errors which
do not alter basic data contained therein. No penalty greater than
necessary to serve merely as a warning shall be imposed in respect of any
omission or mistake in documentation or procedures which is obviously made
without fraudulent intent or gross negligence.

8. Licensed imports shall not be refused for minor variations in value,
quantity or weight from the amount designated on the licence due to
differences occurring during shipment, differences incidental to bulk
loading and other minor differences consistent with normal commercial
practice.

9. The foreign exchange necessary to pay for licensed imports shall be
made available to licence holders on the same basis as to importers of goods
not requiring import licences.

10. With regard to security exceptions, the provisions of Article XXI of
the GATT 1994 apply.

11. The provisions of this Agreement shall not require any Member to
disclose confidential information which would impede law enforcement or
otherwise be contrary to the public interest or would prejudice the
legitimate commercial interests of particular enterprises, public or
private.


Article 2

Automatic Import Licensing[4]

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

2. The following provisions,[5] in addition to those in paragraphs 1 to
11 of Article 1 and paragraph 1 of the present Article, shall apply to
automatic import licensing procedures:

(a) automatic licensing procedures shall not be administered in such
a manner as to have restricting effects on imports subject to
automatic licensing. Automatic licensing procedures shall be
deemed to have trade restricting effects unless, inter alia:

(i) any person, firm or institution which fulfils the legal
requirements of the importing Member for engaging in import
operations involving products subject to automatic
licensing is equally eligible to apply for and to obtain
import licences;

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

(iii) applications for licences when submitted in appropriate and
complete form are approved immediately on receipt, to the
extent administratively feasible, but within a maximum of
ten working days;

(b) Members recognize that automatic import licensing may be
necessary whenever other appropriate procedures are not
available. Automatic import licensing may be maintained as long
as the circumstances which gave rise to its introduction prevail
and as long as its underlying administrative purposes cannot be
achieved in a more appropriate way.

Article 3

Non-automatic Import Licensing

1. The following provisions, in addition to those in paragraphs 1 to 11
of Article 1, shall apply to non-automatic import licensing procedures.
Non-automatic import licensing procedures are defined as import licensing
not falling within the definition contained in paragraph 1 of Article 2.

2. Non-automatic licensing shall not have trade restrictive or distortive
effects on imports additional to those caused by the imposition of the
restriction. Non-automatic licensing procedures shall correspond in scope
and duration to the measure they are used to implement, and shall be no more
administratively burdensome than absolutely necessary to administer the
measure.

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

4. Where a Member provides the possibility for persons, firms or
institutions to request exceptions or derogations from a licensing
requirement, it shall include this fact in the information published under
paragraph 4 of Article 1 as well as information on how to make such a
request and, to the extent possible, an indication of the circumstances
under which requests would be considered.

5. (a) Members shall provide, upon the request of any Member having an
interest in the trade in the product concerned, all relevant
information concerning:

(i) the administration of the restrictions;

(ii) the import licences granted over a recent period;

(iii) the distribution of such licences among supplying
countries;

(iv) where practicable, import statistics (i.e. value and/or
volume) with respect to the products subject to import
licensing. Developing country Members would not be
expected to take additional administrative or financial
burdens on this account;

(b) Members administering quotas by means of licensing shall publish
the overall amount of quotas to be applied by quantity and/or
value, the opening and closing dates of quotas, and any change
thereof, within the time periods specified in paragraph 4 of
Article 1 and in such a manner as to enable governments and
traders to become acquainted with them;

© in the case of quotas allocated among supplying countries, the
Member applying the restrictions shall promptly inform all other
Members having an interest in supplying the product concerned of
the shares in the quota currently allocated, by quantity or
value, to the various supplying countries and shall publish this
information within the time periods specified in paragraph 4 of
Article 1 and in such a manner as to enable governments and
traders to become acquainted with them;

(d) where situations arise which make it necessary to provide for an
early opening date of quotas, the information referred to in
paragraph 4 of Article 1 should be published within the time
periods specified in paragraph 4 of Article 1 and in such a
manner as to enable governments and traders to become acquainted
with them;

(e) any person, firm or institution which fulfils the legal and
administrative requirements of the importing Member shall be
equally eligible to apply and to be considered for a licence. If
the licence application is not approved, the applicant shall, on
request, be given the reason therefor and shall have a right of
appeal or review in accordance with the domestic legislation or
procedures of the importing Member;

(f) the period for processing applications shall, except when not
possible for reasons outside the control of the Member, not be
longer than thirty days if applications are considered as and
when received, i.e. on a first-come first-served basis, and no
longer than sixty days if all applications are considered
simultaneously. In the latter case, the period for processing
applications shall be considered to begin on the day following
the closing date of the announced application period;

(g) the period of licence validity shall be of reasonable duration
and not be so short as to preclude imports. The period of
licence validity shall not preclude imports from distant sources,
except in special cases where imports are necessary to meet
unforeseen short-term requirements;

(h) when administering quotas, Members shall not prevent importation
from being effected in accordance with the issued licences, and
shall not discourage the full utilization of quotas;

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

(j) in allocating licences, the Member should consider the import
performance of the applicant. In this regard, consideration
should be given as to whether licences issued to applicants in
the past have been fully utilized during a recent representative
period. In cases where licences have not been fully utilized,
the Member shall examine the reasons for this and take these
reasons into consideration when allocating new licences.
Consideration shall also be given to ensuring a reasonable
distribution of licences to new importers, taking into account
the desirability of issuing licences for products in economic
quantities. In this regard, special consideration should be
given to those importers importing products originating in
developing country Members and, in particular, the
least-developed country Members;

(k) in the case of quotas administered through licences which are not
allocated among supplying countries, licence holders[6] shall be
free to choose the sources of imports. In the case of quotas
allocated among supplying countries, the licence shall clearly
stipulate the country or countries;

(l) in applying paragraph 8 of Article 1, compensating adjustments
may be made in future licence allocations where imports exceeded
a previous licence level.

Article 4

Institutions

There shall be established under this Agreement a Committee on Import
Licensing composed of representatives from each of the Members (referred to
in this Agreement as "the Committee"). The Committee shall elect its own
Chairman and Vice-Chairman and shall meet as necessary for the purpose of
affording Members the opportunity of consulting on any matters relating to
the operation of this Agreement or the furtherance of its objectives.

Article 5

Notification

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

2. Notifications of the institution of import licensing procedures shall
include the following information:

(a) list of products subject to licensing procedures;

(b) contact point for information on eligibility;

© administrative body(ies) for submission of applications;

(d) date and name of publication where licensing procedures are
published;

(e) indication of whether the licensing procedure is automatic or
non-automatic according to definitions contained in Articles 2
and 3;

(f) in the case of automatic import licensing procedures, their
administrative purpose;

(g) in the case of non-automatic import licensing procedures,
indication of the measure being implemented through the licensing
procedure; and

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

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

4. Members shall notify the Committee of the publication(s) in which the
information required in paragraph 4 of Article 1 will be published.

5. Any interested Member which considers that another Member has not
notified the institution of a licensing procedure or changes therein in
accordance with the provisions of paragraphs 1 to 3 of this Article may
bring the matter to the attention of such other Member. If notification is
not made promptly thereafter, such Member may itself notify the licensing
procedure or changes therein, including all relevant and available
information.

Article 6

Consultation and Dispute Settlement

Consultations and the settlement of disputes with respect to any
matter affecting the operation of this Agreement shall be subject to the
provisions of Articles XXII and XXIII of the GATT 1994, as elaborated and
applied by the Understanding on Rules and Procedures Governing the
Settlement of Disputes.

Article 7

Review

1. The Committee shall review as necessary, but at least once every two
years, the implementation and operation of this Agreement, taking into
account the objectives thereof, and the rights and obligations contained
therein.

2. As a basis for the Committee review, the MTO Secretariat shall prepare
a factual report based on information provided under Article 5, responses to
the annual questionnaire on import licensing procedures[7] and other
relevant reliable information which is available to it. This report shall
provide a synopsis of the aforementioned information, in particular
indicating any changes or developments during the period under review, and
including any other information as agreed by the Committee.

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

4. The Committee shall inform the Council for Trade in Goods of
developments during the period covered by such reviews.

Article 8

Final Provisions

Reservations

1. Reservations may not be entered in respect of any of the provisions of
this Agreement without the consent of the other Members.

Domestic Legislation

2. (a) Each Member shall ensure, not later than the date of entry into
force of the Agreement Establishing the MTO for it, the
conformity of its laws, regulations and administrative procedures
with the provisions of this Agreement.

(b) Each Member shall inform the Committee of any changes in its
laws and regulations relevant to this Agreement and in the
administration of such laws and regulations.

1. Those procedures referred to as "licensing" as well as other similar
administrative procedures.

2. Nothing in this Agreement shall be taken as implying that the basis,
scope or duration of a measure being implemented by a licensing procedure is
subject to question under this Agreement.

3. For the purpose of this Agreement, the term "governments" is deemed to
include the competent authorities of the European Communities.

4. Those import licensing procedures requiring a security which have no
restrictive effects on imports are to be considered as falling within the
scope of paragraphs 1 and 2 of this Article.

5. A developing country Member, other than a developing country Member which
was a Party to the Agreement on Import Licensing Procedures 1979, which has
specific difficulties with the requirements of sub-paragraphs (a)(ii) and
(a)(iii) may, upon notification to the Committee referred to in Article 4,
delay the application of these sub-paragraphs by not more than two years
from the date of entry into force of the Agreement Establishing the MTO for
such Member.

6. Sometimes referred to as "quota holders".

7. Originally circulated as GATT 1947 document L/3515 of 23 March 1971.


AGREEMENT ON SUBSIDIES AND COUNTERVAILING MEASURES

PART I: GENERAL

Article 1

Definition of a Subsidy

1.1 For the purpose of this Agreement, a subsidy shall be deemed to exist
if:

(a)(1)there is a financial contribution by a government or any public
body within the territory of a Member (hereinafter referred to as
"government"), i.e., where:

(i) Government practice involves a direct transfer of funds
(e.g., grants, loans, and equity infusion), potential
direct transfers of funds or liabilities (e.g., loan
guarantees);

(ii) government revenue that is otherwise due, is foregone or
not collected (e.g., fiscal incentives such as tax
credits)[1];

(iii) a government provides goods or services other than general
infrastructure, or purchases goods;

(iv) a government makes payments to a funding mechanism, or
entrusts or directs a private body to carry out one or more
of the type of functions illustrated in (i) to (iii) above
which would normally be vested in the government and the
practice, in no real sense, differs from practices normally
followed by governments;

or

(a)(2)there is any form of income or price support in the sense of
Article XVI of the GATT 1994;

and

(b) a benefit is thereby conferred.

1.2 A subsidy as defined in paragraph 1 above shall be subject to the
provisions of Part II or shall be subject to the provisions of Part III or V
of this Agreement only if such a subsidy is specific in accordance with the
provisions of Article 2 below.





Article 2

Specificity

2.1 In order to determine whether a subsidy, as defined in paragraph 1 of
Article 1 above is specific to an enterprise or industry or group of
enterprises or industries (hereinafter referred to as "certain enterprises")
within the jurisdiction of the granting authority, the following principles
shall apply:

(a) Where the granting authority, or the legislation pursuant to
which the granting authority operates, explicitly limits access
to a subsidy to certain enterprises, such subsidy shall be
specific.

(b) Where the granting authority, or the legislation pursuant to
which the granting authority operates, establishes objective
criteria or conditions[2] governing the eligibility for, and the
amount of, a subsidy, specificity shall not exist, provided that
the eligibility is automatic and that such criteria and
conditions are strictly adhered to. The criteria or conditions
must be clearly spelled out in law, regulation, or other official
document, so as to be capable of verification.

© If, notwithstanding any appearance of non-specificity resulting
from the application of the principles laid down in subparagraphs
(a) and (b) above, there are reasons to believe that the subsidy
may in fact be specific, other factors may be considered. Such
factors are: use of a subsidy programme by a limited number of
certain enterprises, predominant use by certain enterprises, the
granting of disproportionately large amounts of subsidy to
certain enterprises, and the manner in which discretion has been
exercised by the granting authority in the decision to grant a
subsidy.[3] In applying this subparagraph, account shall be
taken of the extent of diversification of economic activities
within the jurisdiction of the granting authority, as well as of
the length of time during which the subsidy programme has been in
operation.

2.2 A subsidy which is limited to certain enterprises located within a
designated geographical region within the jurisdiction of the granting
authority will be specific. It is understood that the setting or change of
generally applicable tax rates by all levels of government entitled to do so
shall not be deemed to be a specific subsidy for the purposes of this
Agreement.

2.3 Any subsidy falling under the provisions of Article 3 shall be deemed
to be specific.

2.4 Any determination of specificity under the provisions of this Article
shall be clearly substantiated on the basis of positive evidence.

PART II: PROHIBITED SUBSIDIES

Article 3

Prohibition

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

(a) subsidies contingent, in law or in fact[4], whether solely or as
one of several other conditions, upon export performance,
including those illustrated in Annex I;[5]

(b) subsidies contingent, whether solely or as one of several other
conditions, upon the use of domestic over imported goods.

3.2 Members shall not grant nor maintain subsidies referred to in
paragraph 1.

Article 4

Remedies

4.1 Whenever a Member has reason to believe that a prohibited subsidy is
being granted or maintained by another Member, such Member may request
consultations with such other Member.

4.2 A request for consultations under paragraph 1 above shall include a
statement of available evidence with regard to the existence and nature of
the subsidy in question.

4.3 Upon request for consultations under paragraph 1 above, the Member
believed to be granting or maintaining the subsidy in question shall enter
into such consultations as quickly as possible. The purpose of the
consultations shall be to clarify the facts of the situation and to arrive
at a mutually acceptable solution.

4.4 If no mutually acceptable solution has been reached within thirty
days[6] of the request for consultations, any Member party to such
consultations may refer the matter to the Dispute Settlement Body[7] (the
DSB) for the immediate establishment of a Panel, unless the DSB decides by
consensus not to establish a panel.

4.5 Upon its establishment, the Panel may request the assistance of the
Permanent Group of Experts (hereinafter referred to as "PGE") with regard to
whether the measure in question is a prohibited subsidy. If so requested,
the PGE shall immediately review the evidence with regard to the existence
and nature of the measure in question and shall provide an opportunity for
the Member granting or maintaining the measure to demonstrate that the
measure in question is not a prohibited subsidy. The PGE shall report its
conclusions to the Panel within a time limit determined by the Panel. The
PGE's conclusions on the issue of whether or not the measure in question is
a prohibited subsidy shall be accepted by the Panel without modification.

4.6 The Panel, established pursuant to paragraph 4 above, shall submit its
final report to the Members party to the dispute. The report shall be
circulated to all Members within ninety days of the date of the composition
and the establishment of the Panel's terms of reference.

4.7 If the measure in question is found to be a prohibited subsidy, the
Panel shall recommend that the subsidizing Member withdraw the subsidy
without delay. In this regard, the Panel shall specify in its
recommendation the time period within which the measure must be withdrawn.

4.8 Within thirty days of the issuance of the Panel's report to all
Members, the report shall be adopted by the DSB unless one of the parties to
the dispute formally notifies the DSB of its decision to appeal or the DSB
decides by consensus not to adopt the report.

4.9 Where a panel report is appealed, the Appellate Body shall issue its
decision within thirty days from the date when the party to the dispute
formally notifies its intention to appeal. When the Appellate Body
considers that it cannot provide its report within thirty days, it shall
inform the DSB in writing of the reasons for the delay together with an
estimate of the period within which it will submit its report. In no case
shall the proceedings exceed sixty days. The appellate report shall be
adopted by the DSB and unconditionally accepted by the parties to the
dispute unless the DSB decides by consensus not to adopt the appellate
report within twenty days following its issuance to the Members.[8]

4.10 In the event the recommendation of the DSB is not followed within the
time period specified by the Panel, which shall commence from the date of
adoption of the Panel's report or the Appellate Body's report, the DSB shall
grant authorization to the complaining Member to take appropriate[9]
countermeasures, unless the DSB decides by consensus to reject the request.

4.11 In the event a party to the dispute requests arbitration under
paragraph 22.6 of the Understanding on Rules and Procedures Governing the
Settlement of Disputes (the DSU), the arbitrator shall determine whether the
countermeasures are appropriate.[10]

4.12 For purposes of disputes conducted pursuant to this Article, except
for time periods specifically prescribed in this Article, time periods
applicable under the DSU for the conduct of such disputes shall be half the
time prescribed therein.

PART III: ACTIONABLE SUBSIDIES

Article 5

Trade Effects

5.1 No Member should cause, through the use of any subsidy referred to in
paragraphs 1 and 2 of Article 1 above, adverse effects to the interests of
other Members, i.e,:

(a) injury to the domestic industry of another Member;[11]

(b) nullification or impairment of benefits accruing directly or
indirectly to other Members under the GATT 1994 in particular the
benefits of concessions bound under Article II of the GATT
1994;[12]

© serious prejudice to the interests of another Member.[13]

This Article does not apply to subsidies maintained on agricultural products
as provided in Article 13 of the Agreement on Agriculture.

Article 6

Serious Prejudice

6.1 Serious prejudice in the sense of Article 5© shall be deemed to
exist in the case of:

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

(b) subsidies to cover operating losses sustained by an industry;

© subsidies to cover operating losses sustained by an enterprise,
other than one-time measures which are non-recurrent and cannot
be repeated for that enterprise and which are given merely to
provide time for the development of long-term solutions and to
avoid acute social problems;

(d) direct forgiveness of debt, i.e., forgiveness of government-held
debt, and grants to cover debt repayment.[16]

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

6.3 Serious prejudice in the sense of Article 5© may arise in any case
where one or several of the following apply:

(a) the effect of the subsidy is to displace or impede the imports of
like product into the market of the subsidizing Member;

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

© the effect of the subsidy is a significant price undercutting by
the subsidized products as compared with the price of a like
product of another Member in the same market or significant price
suppression, price depression or lost sales in the same market;

(d) the effect of the subsidy is an increase in the world market
share of the subsidizing Member in a particular subsidized
primary product or commodity[17] as compared to the average share
it had during the previous period of 3 years and this increase
must follow a consistent trend over a period when subsidies have
been granted.

6.4 For the purpose of paragraph 3(b) above, displacing or impeding
exports shall include any case in which, subject to the provisions of
paragraph 7 below, it has been demonstrated to the Committee that there has
been a change in relative shares of the market to the disadvantage of the
non-subsidized like product (over an appropriately representative period of,
in normal circumstances, at least one year, sufficient to demonstrate clear
trends in the development of the market for the product concerned). "Change
in relative shares of the market" shall include any of the following
situations: (i) there is an increase in the market share of the subsidized
product; (ii) the market share of the subsidized product remains constant
in circumstances in which, in the absence of the subsidy, it would have
declined; (iii) the market share of the subsidized product declines, but at
a slower rate than would have been the case in the absence of the subsidy.

6.5 For the purpose of paragraph 3© above, price undercutting shall
include any case in which it has been demonstrated to the Committee through
comparing prices of the subsidized product with prices of non-subsidized
like products supplied to the same market. The comparison shall be made at
the same level of trade and at comparable times, due account being taken of
any other factor affecting price comparability. However, if such a direct
comparison is not possible, the existence of price undercutting may be
demonstrated on the basis of export unit values.

6.6 Each Member, in the market of which serious prejudice is alleged to
have arisen, shall, subject to the provisions of paragraph 3 of Annex V,
make available to the parties to a dispute and to the Committee all relevant
information that can be obtained as to the changes in market shares of the
disputing parties as well as concerning prices of the products involved.

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

(a) prohibition or restriction on exports of the like product from
the complaining Member or on imports from the complaining Member
into the third market concerned;

(b) decision by an importing government operating a monopoly of trade
or state trading in the product concerned to shift, for
non-commercial reasons, imports from the complaining Member to
another country or countries;

© natural disasters, strikes, transport disruptions or other force
majeure substantially affecting production, qualities, quantities
or prices of the product available for exports from the
complaining Member;

(d) existence of arrangements limiting exports from the complaining
Member;

(e) voluntary decrease in the availability for export of the product
concerned from the complaining Member (including, inter alia, a
situation where firms in the complaining Member have been
autonomously reallocating exports of this product to new
markets);

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

6.8 In the absence of circumstances referred to in paragraph 7 above, the
existence of serious prejudice should be determined on the basis of the
information submitted in accordance with the provisions of Annex V.

6.9 This Article does not apply to subsidies maintained on agricultural
products as provided in Article 13 of the Agreement on Agriculture.

Article 7

Remedies

7.1 Except as provided in Article 13 of the Agreement on Agriculture,
whenever a Member has reason to believe that any subsidy referred to in
Article 1, granted or maintained by another Member, results in injury to its
domestic industry, nullification or impairment or serious prejudice, such
Member may request consultations with such other Member.

7.2 A request for consultations under paragraph 1 above shall include a
statement of available evidence with regard to (a) the existence and nature
of the subsidy in question, and (b) the injury caused to the domestic
industry, or the nullification or impairment, or serious prejudice[19]
caused to the interests of the Member requesting consultations.

7.3 Upon request for consultations under paragraph 1 above, the Member
believed to be granting or maintaining the subsidy practice in question
shall enter into such consultations as quickly as possible. The purpose of
the consultations shall be to clarify the facts of the situation and to
arrive at a mutually acceptable solution.

7.4 If consultations do not result in a mutually acceptable solution
within sixty days[20], any Member party to such consultations may refer the
matter to the Dispute Settlement Body for the establishment of a Panel,
unless the DSB decides by consensus not to establish a panel. The
composition of the Panel and its terms of reference shall be established
within fifteen days from the date when it is established.

7.5 The Panel, established pursuant to paragraph 4 above, shall review the
matter and shall submit its final report to the Members party to the
dispute. The report shall be circulated to all Members within 120 days of
the date of the composition and establishment of the Panel's terms of
reference.

7.6 Within thirty days of the issuance of the Panel's report to all
Members, the report shall be adopted by the DSB[21] unless one of the
parties to the dispute formally notifies the DSB of its decision to appeal
or the DSB decides by consensus not to adopt the report.

7.7 Where a panel report is appealed, the Appellate Body shall issue its
decision within sixty days from the date when the party to the dispute
formally notifies its intention to appeal. When the Appellate Body
considers that it cannot provide its report within sixty days, it shall
inform the DSB in writing of the reasons for the delay together with an
estimate of the period within which it will submit its report. In no case
shall the proceedings exceed ninety days. The appellate report shall be
adopted by the DSB and unconditionally accepted by the parties to the
dispute unless the DSB decides by consensus not to adopt the appellate
report within twenty days following its issuance to the Members.[22]

7.8 Where a panel report or an Appellate Body report is adopted, in which
it is determined that any subsidy has resulted in adverse effects to the
interests of another Member within the meaning of Article 5 of this
Agreement, the Member granting or maintaining such subsidy shall take
appropriate steps to remove the adverse effects or shall withdraw the
subsidy.

7.9 In the event the Member has not taken appropriate steps to remove the
adverse effects of the subsidy or withdraw the subsidy within six months
from the date when the DSB adopts the panel report or the Appellate Body
report, and in the absence of agreement on compensation, the DSB shall grant
authorization to the complaining Member to take countermeasures,
commensurate with the degree and nature of the adverse effects determined to
exist, unless the DSB decides by consensus to reject the request.

7.10 In the event that a party to the dispute requests arbitration under
paragraph 22.6 of the DSU, the arbitrator shall determine whether the
countermeasures are commensurate with the degree and nature of the adverse
effects determined to exist.



PART IV: NON-ACTIONABLE SUBSIDIES

Article 8

Identification of Non-Actionable Subsidies

8.1 The following subsidies shall be considered as non-actionable:

(a) subsidies which are not specific, within the meaning of paragraph
1 of Article 2 above;

(b) subsidies which are specific within the meaning of Article 2
above but which meet all of the conditions provided for in
paragraphs 2(a) or 2(b) below.

8.2 Notwithstanding the provisions of Parts III and V of this Agreement,
the following subsidies shall be non-actionable[23]:

(a) assistance for research activities conducted by firms or by
higher education or research establishments on a contract basis
with firms if:[24], [25], [26]

the assistance covers not more than 75 per cent of the costs of
industrial research[27] or 50 per cent of the costs of
pre-competitive development activity;[28]

and provided that such assistance is limited exclusively to:

(i) personnel costs (researchers, technicians and other
supporting staff employed exclusively in the research
activity);

(ii) costs of instruments, equipment, land and buildings used
exclusively and permanently (except when disposed of on a
commercial basis) for the research activity;

(iii) costs of consultancy and equivalent services used
exclusively for the research activity, including bought-in
research, technical knowledge, patents, etc.;

(iv) additional overhead costs incurred directly as a result of
the research activity;

(v) other running costs (such as those of materials, supplies
and the like), incurred directly as a result of the
research activity.

(b) assistance to disadvantaged regions within the territory of a
Member given pursuant to a general framework of regional
development[29] and non-specific (within the meaning of paragraph
1 of Article 2 above) within eligible regions provided that:

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

(ii) the region is considered as disadvantaged on the basis of
neutral and objective criteria[30], indicating that the
region's difficulties arise out of more than temporary
circumstances; such criteria must be clearly spelled out
in law, regulation, or other official document, so as to be
capable of verification;

(iii) the criteria shall include a measurement of economic
development which shall be based on at least one of the
following factors:

- one of either income per capita or household income
per capita, or GDP per capita, which must not be above
85 per cent of the average for the territory
concerned;

- unemployment rate, which must be at least 110 per cent
of the average for the territory concerned;

as measured over a three-year period: such measurement,
however, may be a composite one and may include other
factors.

© assistance to promote adaptation of existing facilities[31] to
new environmental requirements imposed by law and/or regulations
which result in greater constraints and financial burden on
firms, provided that the assistance:

(i) is a one-time non-recurring measure; and

(ii) is limited to 20 per cent of the cost of adaptation; and

(iii) does not cover the cost of replacing and operating the
assisted investment, which must be fully borne by firms;
and

(iv) is directly linked to and proportionate to a firm's planned
reduction of nuisances and pollution, and does not cover
any manufacturing cost savings which may be achieved; and

(v) is available to all firms which can adopt the new equipment
and/or production processes.

8.3 A subsidy programme for which the provisions of paragraph 2 above are
invoked shall be notified in advance of its implementation to the Committee
in accordance with the provisions of Part VII of this Agreement. Any such
notification shall be sufficiently precise to enable other Members to
evaluate the consistency of the programme with the conditions and criteria
provided for in the relevant provisions of paragraph 2 above. Members shall
also provide the Committee with yearly updating of such notifications, in
particular by supplying information on global expenditure for each
programme, and about any modification of the programme since the previous
update. Other Members shall have the right to request information about
individual cases of subsidization under a notified programme.[32]

8.4 Upon request of a Member, the MTO Secretariat shall review a
notification made pursuant to paragraph 3 above and, where necessary, may
require additional information from the subsidizing Member concerning the
notified programme under review. The Secretariat shall report its finding
to the Committee. The Committee shall then, upon request, promptly review
the findings of the Secretariat (or, if a review by the Secretariat has not
been requested, the notification itself), with a view to determining whether
the conditions and criteria laid down in paragraph 2 above have not been
met. The procedure provided for in this paragraph shall be completed at the
latest at the first regular meeting of the Committee following the
notification of a subsidy programme, provided that at least two months have
elapsed between such notification and the regular meeting of the Committee.
The review procedure described in this paragraph shall also apply, upon
request, to substantial modifications of a programme notified in the yearly
updates referred to in paragraph 3 above.

8.5 Upon the request of a Member, the determination by the Committee
referred to in paragraph 4 above, or a failure by the Committee to make such
a determination, as well as the violation, in individual cases, of the
conditions set out in a notified programme, shall be submitted to binding
arbitration. The arbitration body shall present its conclusions to the
Members within 120 days from the date when the matter was referred to the
arbitration body. Except as otherwise provided in this paragraph, the DSU
shall apply to arbitrations conducted under this paragraph.

Article 9

Consultations and Authorized Remedies

9.1 If, in the course of implementation of a programme referred to in
paragraph 2 of Article 8 above, notwithstanding the fact that the programme
is consistent with the criteria laid down in paragraph 2 of Article 8, a
Member has reasons to believe that this programme has resulted in serious
adverse effects to the domestic industry of that Member, such as to cause
damage which would be difficult to repair, such Member may request
consultations with the Member granting the subsidy.

9.2 Upon request for consultations under paragraph 1 above, the Member
maintaining the subsidy programme in question shall enter into such
consultations as quickly as possible. The purpose of the consultations
shall be to clarify the facts of the situation and to arrive at a mutually
acceptable solution.

9.3 If no mutually acceptable solution has been reached in consultations
under paragraph 2 within 60 days of the request for such consultations, the
requesting Member may refer the matter to the Committee.

9.4 Where a matter is referred to the Committee, the Committee shall
immediately review the facts involved and the evidence of the effects
referred to in paragraph 1 above. If the Committee determines that such
effects exist, it may recommend to the subsidizing Member to modify this
programme in such a way as to remove these effects. The Committee shall
present its conclusions within 120 days from the date when the matter is
referred to it under this provision. In the event the recommendation is not
followed within 6 months, the Committee shall authorize the requesting
Member to take appropriate countermeasures commensurate with the nature and
degree of the effects determined to exist.

PART V: COUNTERVAILING MEASURES

Article 10

Application of Article VI of the GATT 1994[33]

Members shall take all necessary steps to ensure that the imposition
of a countervailing duty[34] on any product of the territory of any Member
imported into the territory of another Member is in accordance with the
provisions of Article VI of the GATT 1994 and the terms of this Agreement.
Countervailing duties may only be imposed pursuant to investigations
initiated[35] and conducted in accordance with the provisions of this
Agreement and the Agreement on Agriculture.

Article 11

Initiation and Subsequent Investigation

11.1 Except as provided in paragraph 6 of Article 11, an investigation to
determine the existence, degree and effect of any alleged subsidy shall be
initiated upon a written application by or on behalf of the domestic
industry.

11.2 An application under paragraph 1 shall include sufficient evidence of
the existence of (a) a subsidy and, if possible, its amount, (b) injury
within the meaning of Article VI of the GATT 1994 as interpreted by this
Agreement, and © a causal link between the subsidized imports and the
alleged injury. Simple assertion, unsubstantiated by relevant evidence,
cannot be considered sufficient to meet the requirements of this paragraph.
The application shall contain such information as is reasonably available to
the applicant on the following:

(i) identity of the applicant and a description of the volume and
value of the domestic production of the like product by the
applicant. Where a written application is made on behalf of the
domestic industry, the application shall identify the industry on
behalf of which the application is made by a list of all known
domestic producers of the like product (or associations of
domestic producers of the like product) and, to the extent
possible, a description of the volume and value of domestic
production of the like product accounted for by such producers;

(ii) a complete description of the allegedly subsidized product, the
names of the country or countries of origin or export in
question, the identity of each known exporter or foreign producer
and a list of known persons importing the product in question;

(iii)evidence with regard to the existence, amount and nature of the
subsidy in question;

(iv) evidence that alleged material injury to a domestic industry is
caused by subsidized imports through the effects of the
subsidies; this evidence includes information on the evolution
of the volume of the allegedly subsidized imports, the effect of
these imports on prices of the like product in the domestic
market and the consequent impact of the imports on the domestic
industry, as demonstrated by relevant factors and indices having
a bearing on the state of the domestic industry, such as those
listed in paragraphs 2 and 4 of Article 15.

11.3 The authorities shall review the accuracy and adequacy of the evidence
provided in the application to determine whether the evidence is sufficient
to justify the opening of an investigation.

11.4 An investigation shall not be initiated pursuant to paragraph 1 unless
the authorities have determined, on the basis of an examination of the
degree of support for, or opposition to, the application expressed[36] by
domestic producers of the like product, that the application has been made
by or on behalf of the domestic industry.[37] The application shall be
considered to have been made "by or on behalf of the domestic industry" if
it is supported by those domestic producers whose collective output
constitutes more than 50 per cent of the total production of the like
product produced by that portion of the domestic industry expressing either
support for or opposition to the application. However, no investigation
shall be initiated when domestic producers expressly supporting the
application account for less than 25 per cent of total production of the
like product produced by the domestic industry.

11.5 The authorities shall avoid, unless a decision has been made to
initiate an investigation, any publicizing of the application for the
initiation of an investigation.

11.6 If in special circumstances, the authorities concerned decide to
initiate an investigation without having received a written application by
or on behalf of a domestic industry for the initiation of such
investigation, they shall proceed only if they have sufficient evidence of
the existence of a subsidy, injury and causal link, as described in
paragraph 2, to justify the initiation of an investigation.

11.7 The evidence of both subsidy and injury shall be considered
simultaneously (a) in the decision whether or not to initiate an
investigation and (b) thereafter during the course of the investigation,
starting on a date not later than the earliest date on which in accordance
with the provisions of this Agreement provisional measures may be applied.

11.8 In cases where products are not imported directly from the country of
origin but are exported to the country of importation from an intermediate
country, the provisions of this Agreement shall be fully applicable and the
transaction or transactions shall, for the purposes of this Agreement, be
regarded as having taken place between the country of origin and the country
of importation.

11.9 An application under paragraph 1 shall be rejected and an
investigation shall be terminated promptly as soon as the authorities
concerned are satisfied that there is not sufficient evidence of either
subsidization or of injury to justify proceeding with the case. There shall
be immediate termination in cases where the amount of a subsidy is de
minimis, or where the volume of subsidized imports, actual or potential, or
the injury, is negligible. For the purpose of this paragraph, the amount of
the subsidy shall be considered to be de minimis if the subsidy is less than
1 per cent ad valorem.

11.10 An investigation shall not hinder the procedures of customs clearance.

11.11 Investigations shall, except in special circumstances, be concluded
within one year after their initiation, and in no case more than 18 months.


Article 12

Evidence

12.1 Interested Members and all interested parties in a countervailing duty
investigation shall be given notice of the information which the authorities
require and ample opportunity to present in writing all evidence which they
consider relevant in respect of the investigation in question.

12.1.1 Exporters, foreign producers or interested Members receiving
questionnaires used in a countervailing duty investigation shall be
given at least thirty days for reply.[38] Due consideration should be
given to any request for an extension of the thirty day period and,
upon cause shown, such an extension should be granted whenever
practicable.

12.1.2 Subject to the requirement to protect confidential
information, evidence presented in writing by one interested Member or
interested party shall be made available promptly to other interested
Members or interested parties participating in the investigation.

12.1.3 As soon as an investigation has been initiated, the
authorities shall provide the full text of the written application
received under paragraph 1 of Article 11 to the known exporters[39]
and to the authorities of the exporting country and make it available,
upon request, to other interested parties involved. Due regard shall
be paid to the protection of confidential information as provided for
in paragraph 4 below.

12.2 Interested Members and interested parties also shall have the right,
upon justification, to present information orally. Where such information
is provided orally, the interested parties subsequently shall be required to
reduce such submissions to writing. Any decision of the investigating
authorities can only be based on such information and arguments as were on
the written record of this authority and which were available to interested
Members and interested parties participating in the investigation, due
account having been given to the need to protect confidential information.

12.3 The authorities shall whenever practicable provide timely
opportunities for all interested Members and interested parties to see all
information that is relevant to the presentation of their cases, that is not
confidential as defined in paragraph 4 and that is used by the authorities
in a countervailing duty investigation, and to prepare presentations on the
basis of this information.

12.4 Any information which is by nature confidential, (for example, because
its disclosure would be of significant competitive advantage to a competitor
or because its disclosure would have a significantly adverse effect upon a
person supplying the information or upon a person from whom the supplier
acquired the information) or which is provided on a confidential basis by
parties to an investigation shall, upon good cause shown, be treated as such
by the authorities. Such information shall not be disclosed without
specific permission of the party submitting it.[40]

12.4.1 The authorities shall require interested Members or interested
parties providing confidential information to furnish non-confidential
summaries thereof. These summaries shall be in sufficient detail to
permit a reasonable understanding of the substance of the information
submitted in confidence. In exceptional circumstances, such Members
or parties may indicate that such information is not susceptible of
summary. In such exceptional circumstances, a statement of the
reasons why summarization is not possible must be provided.

12.4.2 If the authorities find that a request for confidentiality is
not warranted and if the supplier of the information is either
unwilling to make the information public or to authorize its
disclosure in generalized or summary form, the authorities may
disregard such information unless it can be demonstrated to their
satisfaction from appropriate sources that the information is
correct.[41]

12.5 Except in circumstances provided for in paragraph 7, the authorities
shall during the course of an investigation satisfy themselves as to the
accuracy of the information supplied by interested parties or interested
Members upon which their findings are based.

12.6 The investigating authorities may carry out investigations in the
territory of other Members as required, provided that they have notified in
good time the Member in question and unless the latter objects to the
investigation. Further, the investigating authorities may carry out
investigations on the premises of a firm and may examine the records of a
firm if (a) the firm so agrees and (b) the Member in question is notified
and does not object. The procedures set forth in Annex VI to this
Agreement shall apply to investigations on the premises of a firm. The
authorities shall, subject to the requirement to protect confidential
information, make the results of any verifications available or provide
disclosure thereof pursuant to paragraph 8, to the firms to which they
pertain and may make such results available to the applicants.

12.7 In cases in which any interested party or Member refuses access to, or
otherwise does not provide, necessary information within a reasonable period
or significantly impedes the investigation, preliminary and final
determinations, affirmative or negative, may be made on the basis of the
facts available.

12.8 The authorities shall, before a final determination is made, inform
all interested Members or interested parties of the essential facts under
consideration which form the basis for the decision whether to apply
definitive measures. Such disclosure should take place in sufficient time
for the parties to defend their interests.

12.9 For the purposes of this Agreement, "interested parties" shall
include:

(i) an exporter or foreign producer or the importer of a product
subject to investigation, or a trade or business association a
majority of the members of which are producers, exporters or
importers of such product; and

(ii) a producer of the like product in the importing country or a
trade and business association a majority of the members of which
produce the like product in the importing country.

This list shall not preclude Members from allowing domestic or foreign
parties other than those mentioned above to be included as interested
parties.

12.10 The authorities shall provide opportunities for industrial users of
the product under investigation, and for representative consumer
organizations in cases where the product is commonly sold at the retail
level, to provide information which is relevant to the investigation
regarding subsidization, injury and causality.

12.11 The authorities shall take due account of any difficulties experienced
by interested parties, in particular small companies, in supplying
information requested and provide any assistance practicable.

12.12 The procedures set out above are not intended to prevent the
authorities of a Member from proceeding expeditiously with regard to
initiating an investigation, reaching preliminary or final determinations,
whether affirmative or negative, or from applying provisional or final
measures, in accordance with relevant provisions of this Agreement.

Article 13

Consultations

13.1 As soon as possible after an application under Article 11 is accepted,
and in any event before the initiation of any investigation, Members the
products of which may be subject to such investigation shall be invited for
consultations with the aim of clarifying the situation as to the matters
referred to in Article 11:1 above and arriving at a mutually agreed
solution.

13.2 Furthermore, throughout the period of investigation, Members the
products of which are the subject of the investigation shall be afforded a
reasonable opportunity to continue consultations, with a view to clarifying
the factual situation and to arriving at a mutually agreed solution.[42]

13.3 Without prejudice to the obligation to afford reasonable opportunity
for consultation, these provisions regarding consultations are not intended
to prevent the authorities of a Member from proceeding expeditiously with
regard to initiating the investigation, reaching preliminary or final
determinations, whether affirmative or negative, or from applying
provisional or final measures, in accordance with the provisions of this
Agreement.

13.4 The Member which intends to initiate any investigation or is
conducting such an investigation shall permit, upon request, the Member or
Members the products of which are subject to such investigation access to
non-confidential evidence including the non-confidential summary of
confidential data being used for initiating or conducting the investigation.

Article 14

Calculation of the Amount of a Subsidy in Terms
of the Benefit to the Recipient

For the purpose of Part V of this Agreement, any method used by the
investigating authority to calculate the benefit to the recipient conferred
pursuant to paragraph 1 of Article 1 above shall be provided for in the
national legislation or implementing regulations of the Member concerned and
its application to each particular case shall be transparent and adequately
explained. Furthermore any such method shall be consistent with the
following guidelines:

(a) Government provision of equity capital shall not be considered as
conferring a benefit, unless the investment decision can be
regarded as inconsistent with the usual investment practice
(including for the provision of risk capital) of private
investors in the territory of that Member;

(b) A loan by a government shall not be considered as conferring a
benefit, unless there is a difference between the amount that the
firm receiving the loan pays on the government loan and a
comparable commercial loan which the firm could actually obtain
on the market. In this case the benefit shall be the difference
between these two amounts;

© A loan guarantee by a government shall not be considered as
conferring a benefit, unless there is a difference between the
amount that the firm receiving the guarantee pays on a loan
guaranteed by the government and the amount that the firm would
pay for a comparable commercial loan absent the government
guarantee. In this case the benefit shall be the difference
between these two amounts adjusted for any differences in fees;

(d) The provision of goods or services or purchase of goods by a
government shall not be considered as conferring a benefit unless
the provision is made for less than adequate remuneration, or the
purchase is made for more than adequate remuneration. The
adequacy of remuneration shall be determined in relation to
prevailing market conditions for the good or service in question
in the country of provision or purchase (including price,
quality, availability, marketability, transportation and other
conditions of purchase or sale).

Article 15

Determination of Injury[43]

15.1 A determination of injury for purposes of Article VI of the GATT 1994
shall be based on positive evidence and involve an objective examination of
both (a) the volume of the subsidized imports and the effect of the
subsidized imports on prices in the domestic market for like products[44]
and (b) the consequent impact of these imports on the domestic producers of
such products.

15.2 With regard to the volume of the subsidized imports, the investigating
authorities shall consider whether there has been a significant increase in
subsidized imports, either in absolute terms or relative to production or
consumption in the importing Member. With regard to the effect of the
subsidized imports on prices, the investigating authorities shall consider
whether there has been a significant price undercutting by the subsidized
imports as compared with the price of a like product of the importing
Member, or whether the effect of such imports is otherwise to depress prices
to a significant degree or to prevent price increases, which otherwise would
have occurred, to a significant degree. No one or several of these factors
can necessarily give decisive guidance.

15.3 Where imports of a product from more than one country are
simultaneously subject to countervailing duty investigations, the
investigating authorities may cumulatively assess effects of such imports
only if they determine that (1) the amount of subsidization established in
relation to the imports from each country is more than de minimis as defined
in paragraph 9 of Article 11 and that the volume of imports from each
country is not negligible and (2) a cumulative assessment of the effects of
the imports is appropriate in light of the conditions of competition between
imported products and the conditions of competition between the imported
products and the like domestic product.

15.4 The examination of the impact of the subsidized imports on the
domestic industry shall include an evaluation of all relevant economic
factors and indices having a bearing on the state of the industry, including
actual and potential decline in output, sales, market share, profits,
productivity, return on investments, or utilization of capacity; factors
affecting domestic prices; actual and potential negative effects on cash
flow, inventories, employment, wages, growth, ability to raise capital or
investments and, in the case of agriculture, whether there has been an
increased burden on Government support programmes. This list is not
exhaustive, nor can one or several of these factors necessarily give
decisive guidance.

15.5 It must be demonstrated that the subsidized imports are, through the
effects[45] of subsidies, causing injury within the meaning of this
Agreement. The demonstration of a causal relationship between the
subsidized imports and the injury to the domestic industry shall be based on
an examination of all relevant evidence before the authorities. The
authorities shall also examine any known factors other than the subsidized
imports which at the same time are injuring the domestic industry, and the
injuries caused by these other factors must not be attributed to the
subsidized imports. Factors which may be relevant in this respect include,
inter alia, the volumes and prices of non-subsidized imports of the product
in question, contraction in demand or changes in the patterns of
consumption, trade restrictive practices of and competition between the
foreign and domestic producers, developments in technology and the export
performance and productivity of the domestic industry.

15.6 The effect of the subsidized imports shall be assessed in relation to
the domestic production of the like product when available data permit the
separate identification of that production on the basis of such criteria as
the production process, producers' sales and profits. If such separate
identification of that production is not possible, the effects of the
subsidized imports shall be assessed by the examination of the production of
the narrowest group or range of products, which includes the like product,
for which the necessary information can be provided.

15.7 A determination of a threat of material injury shall be based on facts
and not merely on allegation, conjecture or remote possibility. The change
in circumstances which would create a situation in which the subsidy would
cause injury must be clearly foreseen and imminent. In making a
determination regarding the existence of a threat of material injury, the
investigating authorities should consider, inter alia, such factors as:

(i) nature of the subsidy or subsidies in question and the trade
effects likely to arise therefrom;

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

(iii)sufficient freely disposable or an imminent, substantial increase
in capacity of the exporter indicating the likelihood of
substantially increased subsidized exports to the importing
country's market, taking into account the availability of other
export markets to absorb any additional exports;

(iv) whether imports are entering at prices that will have a
significant depressing or suppressing effect on domestic prices,
and would likely increase demand for further imports;

(v) inventories of the product being investigated.

No one of these factors by itself can necessarily give decisive guidance but
the totality of the factors considered must lead to the conclusion that
further subsidized exports are imminent and that, unless protective action
is taken, material injury would occur.

15.8 With respect to cases where injury is threatened by subsidized
imports, the application of countervailing measures shall be considered and
decided with special care.


Article 16

Definition of Domestic Industry

16.1 For the purposes of this Agreement, the term "domestic industry"
shall, except as provided in paragraph 2 below, be interpreted as referring
to the domestic producers as a whole of the like products or to those of
them whose collective output of the products constitutes a major proportion
of the total domestic production of those products, except that when
producers are related[46] to the exporters or importers or are themselves
importers of the allegedly subsidized product or a like product from other
countries, the term "domestic industry" may be interpreted as referring to
the rest of the producers.

16.2 In exceptional circumstances, the territory of a Member may, for the
production in question, be divided into two or more competitive markets and
the producers within each market may be regarded as a separate industry if
(a) the producers within such market sell all or almost all of their
production of the product in question in that market, and (b) the demand in
that market is not to any substantial degree supplied by producers of the
product in question located elsewhere in the territory. In such
circumstances, injury may be found to exist even where a major portion of
the total domestic industry is not injured, provided there is a
concentration of subsidized imports into such an isolated market and
provided further that the subsidized imports are causing injury to the
producers of all or almost all of the production within such market.

16.3 When the domestic industry has been interpreted as referring to the
producers in a certain area, i.e. a market as defined in paragraph 2 above,
countervailing duties shall be levied only on the products in question
consigned for final consumption to that area. When the constitutional law
of the importing Member does not permit the levying of countervailing duties
on such a basis, the importing Member may levy the countervailing duties
without limitation only if (a) the exporters shall have been given an
opportunity to cease exporting at subsidized prices to the area concerned or
otherwise give assurances pursuant to Article 18 of this Agreement, and
adequate assurances in this regard have not been promptly given, and (b)
such duties cannot be levied only on products of specific producers which
supply the area in question.

16.4 Where two or more countries have reached under the provisions of
paragraph 8(a) of Article XXIV of the GATT 1994 such a level of integration
that they have the characteristics of a single, unified market, the industry
in the entire area of integration shall be taken to be the domestic industry
referred to in paragraphs 1 and 2 above.

16.5 The provisions of paragraph 6 of Article 15 shall be applicable to
this Article.

Article 17

Provisional Measures

17.1 Provisional measures may be applied only if:

(a) an investigation has been initiated in accordance with the
provisions of Article 11, a public notice has been given to that
effect and interested Members and interested parties have been
given adequate opportunities to submit information and make
comments;

(b) a preliminary affirmative determination has been made that a
subsidy exists and that there is material injury or threat
thereof to a domestic industry caused by subsidized imports; and

© the authorities concerned judge such measures necessary to
prevent injury being caused during the investigation.

17.2 Provisional measures may take the form of provisional countervailing
duties guaranteed by cash deposits or bonds equal to the amount of the
provisionally calculated amount of subsidization.

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

17.4 The application of provisional measures shall be limited to as short a
period as possible, not exceeding four months.

17.5 The relevant provisions of Article 19 shall be followed in the
application of provisional measures.

Article 18

Undertakings

18.1 Proceedings may[47] be suspended or terminated without the imposition
of provisional measures or countervailing duties upon receipt of
satisfactory voluntary undertakings under which:

(i) the government of the exporting country agrees to eliminate
or limit the subsidy or take other measures concerning its
effects; or

(ii) the exporter agrees to revise its prices so that the
investigating authorities are satisfied that the injurious
effect of the subsidy is eliminated. Price increases
under such undertakings shall not be higher than necessary
to eliminate the amount of the subsidy. It is desirable
that the price increases be less than the amount of the
subsidy if such increases would be adequate to remove the
injury to the domestic industry.

18.2 Undertakings shall not be sought or accepted unless the authorities of
the importing country have made a preliminary affirmative determination of
subsidization and injury caused by such subsidization and, in case of
undertakings from exporters, have obtained the consent of the exporting
Member.

18.3 Undertakings offered need not be accepted if the authorities of the
importing Member consider their acceptance impractical, for example if the
number of actual or potential exporters is too great, or for other reasons,
including reasons of general policy. Should the case arise and where
practicable, the authorities shall provide to the exporter the reasons which
have led them to consider acceptance of an undertaking as inappropriate, and
shall, to the extent possible, give the exporter an opportunity to make
comments thereon.

18.4 If the undertakings are accepted, the investigation of subsidization
and injury shall nevertheless be completed if the exporting Member so
desires or the importing Member so decides. In such a case, if a negative
determination of subsidization or injury or threat thereof is made, the
undertaking shall automatically lapse, except in cases where such a
determination is due in large part to the existence of an undertaking. In
such cases the authorities concerned may require that an undertaking be
maintained for a reasonable period consistent with the provisions of this
Agreement. In the event that an affirmative determination of subsidization
and injury is made, the undertaking shall continue consistent with its terms
and the provisions of this Agreement.

18.5 Price undertakings may be suggested by the authorities of the
importing Member, but no exporter shall be forced to enter into such an
undertaking. The fact that governments or exporters do not offer such
undertakings, or do not accept an invitation to do so, shall in no way
prejudice the consideration of the case. However, the authorities are free
to determine that a threat of injury is more likely to be realized if the
subsidized imports continue.

18.6 Authorities of an importing Member may require any government or
exporter from whom undertakings have been accepted to provide periodically
information relevant to the fulfilment of such undertakings, and to permit
verification of pertinent data. In case of violation of undertakings, the
authorities of the importing Member may take, under this Agreement in
conformity with its provisions, expeditious actions which may constitute
immediate application of provisional measures using the best information
available. In such cases definitive duties may be levied in accordance
with this Agreement on goods entered for consumption not more than ninety
days before the application of such provisional measures, except that any
such retroactive assessment shall not apply to imports entered before the
violation of the undertaking.

Article 19

Imposition and Collection of Countervailing Duties

19.1 If, after reasonable efforts have been made to complete consultations,
a Member makes a final determination of the existence and amount of the
subsidy and that, through the effects of the subsidy, the subsidized imports
are causing injury, it may impose a countervailing duty in accordance with
the provisions of this section unless the subsidy or subsidies are
withdrawn.

19.2 The decision whether or not to impose a countervailing duty in cases
where all requirements for the imposition have been fulfilled and the
decision whether the amount of the countervailing duty to be imposed shall
be the full amount of the subsidy or less, are decisions to be made by the
authorities of the importing Member. It is desirable that the imposition
should be permissive in the territory of all Members, that the duty should
be less than the total amount of the subsidy if such lesser duty would be
adequate to remove the injury to the domestic industry, and that procedures
should be established which would allow the authorities concerned to take
due account of representations made by domestic interested parties[48] whose
interests might be adversely affected by the imposition of a countervailing
duty.

19.3 When a countervailing duty is imposed in respect of any product, such
countervailing duty shall be levied, in the appropriate amounts in each
case, on a non-discriminatory basis on imports of such product from all
sources found to be subsidized and causing injury, except as to imports from
those sources which have renounced any subsidies in question or from which
undertakings under the terms of this Agreement have been accepted. Any
exporter whose exports are subject to a definitive countervailing duty but
who was not actually investigated for reasons other than a refusal to
co-operate, shall be entitled to an expedited review in order that the
investigating authorities promptly establish an individual countervailing
duty rate for that exporter.

19.4 No countervailing duty shall be levied[49] on any imported product in
excess of the amount of the subsidy found to exist, calculated in terms of
subsidization per unit of the subsidized and exported product.

Article 20

Retroactivity

20.1 Provisional measures and countervailing duties shall only be applied
to products which enter for consumption after the time when the decision
under paragraph 1 of Article 17 and paragraph 1 of Article 19, respectively,
enters into force, subject to the exceptions set out below.

20.2 Where a final determination of injury (but not of a threat thereof or
of a material retardation of the establishment of an industry) is made or,
in the case of a final determination of a threat of injury, where the effect
of the subsidized imports would, in the absence of the provisional measures,
have led to a determination of injury, countervailing duties may be levied
retroactively for the period for which provisional measures, if any, have
been applied.

20.3 If the definitive countervailing duty is higher than the amount
guaranteed by the cash deposit or bond, the difference shall not be
collected. If the definitive duty is less than the amount guaranteed by
the cash deposit or bond, the excess amount shall be reimbursed or the bond
released in an expeditious manner.

20.4 Except as provided in paragraph 2 above, where a determination of
threat of injury or material retardation is made (but no injury has yet
occurred) a definitive countervailing duty may be imposed only from the date
of the determination of threat of injury or material retardation and any
cash deposit made during the period of the application of provisional
measures shall be refunded and any bonds released in an expeditious manner.

20.5 Where a final determination is negative, any cash deposit made during
the period of the application of provisional measures shall be refunded and
any bonds released in an expeditious manner.

20.6 In critical circumstances where for the subsidized product in question
the authorities find that injury which is difficult to repair is caused by
massive imports in a relatively short period of a product benefiting from
subsidies paid or bestowed inconsistently with the provisions of the GATT
1994 and of this Agreement and where it is deemed necessary, in order to
preclude the recurrence of such injury, to assess countervailing duties
retroactively on those imports, the definitive countervailing duties may be
assessed on imports which were entered for consumption not more than ninety
days prior to the date of application of provisional measures.

Article 21

Duration and Review of Countervailing Duties and Undertakings

21.1 A countervailing duty shall remain in force only as long as and to the
extent necessary to counteract subsidization which is causing injury.

21.2 The authorities shall review the need for the continued imposition of
the duty, where warranted, on their own initiative or, provided that a
reasonable period of time has elapsed since the imposition of the definitive
countervailing duty, upon request by any interested party which submits
positive information substantiating the need for a review. Interested
parties shall have the right to request the authorities to examine whether
the continued imposition of the duty is necessary to offset subsidization,
whether the injury would be likely to continue or recur if the duty were
removed or varied, or both. If, as a result of the review under this
paragraph, the authorities determine that the countervailing duty is no
longer warranted, it shall be terminated immediately.

21.3 Notwithstanding the provisions of paragraphs 1 and 2, any definitive
countervailing duty shall be terminated on a date not later than five years
from its imposition (or from the date of the most recent review under
paragraph 2 if that review has covered both subsidization and injury, or
under this paragraph), unless the authorities determine, in a review
initiated before that date on their own initiative or upon a duly
substantiated request made by or on behalf of the domestic industry within a
reasonable period of time prior to that date, that the expiry of the duty
would be likely to lead to continuation or recurrence of subsidization and
injury.[50] The duty may remain in force pending the outcome of such a
review.

21.4 The provisions of Article 12 regarding evidence and procedure shall
apply to any review carried out under this Article. Any such review shall
be carried out expeditiously and shall normally be concluded within twelve
months of the date of initiation of the review.

21.5 The provisions of this Article shall mutatis mutandis apply to
undertakings accepted under Article 18.

Article 22

Public Notice and Explanation of
Determinations

22.1 When the authorities are satisfied that there is sufficient evidence
to justify the initiation of an investigation pursuant to Article 11, the
Member or Members, the products of which are subject to such investigation
and other interested parties known to the investigating authorities to have
an interest therein shall be notified and a public notice shall be given.

22.2 A public notice of the initiation of an investigation shall contain or
otherwise make available through a separate report[51] adequate information
on the following: (i) the name of the exporting country or countries and
the product involved; (ii) the date of initiation of the investigation;
(iii) a description of the subsidy practice or practices to be investigated;
(iv) a summary of the factors on which the allegation of injury is based;
(v) the address to which representations by interested parties should be
directed; and (vi) the time-limits allowed to interested parties for making
their views known.

22.3 Public notice shall be given of any preliminary or final
determination, whether affirmative or negative, of any decision to accept an
undertaking pursuant to Article 18, of the termination of such an
undertaking, and of the revocation of a determination. Each such notice
shall set forth or otherwise make available through a separate report in
sufficient detail the findings and conclusions reached on all issues of fact
and law considered material by the investigating authorities. All such
notices and reports shall be forwarded to the Member or Members the
products of which are subject to such determination or undertaking and to
other interested parties known to have an interest therein.

22.4 A public notice of the imposition of provisional measures shall set
forth or otherwise make available through a separate report sufficiently
detailed explanations for the preliminary determinations on the existence of
a subsidy and injury and shall refer to the matters of fact and law which
have led to arguments being accepted or rejected. Such a notice or report
shall, due regard being paid to the requirement for the protection of
confidential information, contain in particular: (i) the names of the
suppliers or when this is impracticable, the supplying countries involved;
(ii) a description of the product which is sufficient for customs purposes;
(iii) the amount of subsidy established and the basis on which the existence
of a subsidy has been determined; (iv) considerations relevant to the
injury determinations as set out in Article 15; (v) the main reasons
leading to the determination.

22.5 A public notice of conclusion or suspension of an investigation in
the case of an affirmative determination providing for the imposition of a
definitive duty or the acceptance of an undertaking shall contain or
otherwise make available through a separate report all relevant information
on the matters of fact and law and reasons which have led to the imposition
of final measures or the acceptance of an undertaking, due regard being paid
to the requirement for the protection of confidential information. The
notice or report shall in particular contain the information described in
paragraph 4 above as well as the reasons for the acceptance or rejection of
relevant arguments or claims made by the exporters and importers.

22.6 A public notice of the termination or suspension of an investigation
following the acceptance of an undertaking pursuant to Article 18 shall
include or otherwise make available through a separate report the
non-confidential part of this undertaking.

22.7 The provisions of this Article shall apply mutatis mutandis to the
initiation and completion of reviews pursuant to Article 21 and to decisions
under Article 20 to apply duties retroactively.

Article 23

Judicial Review

Each Member, whose national legislation contains provisions on
countervailing duty measures, shall maintain judicial, arbitral or
administrative tribunals or procedures for the purpose, inter alia, of the
prompt review of administrative actions relating to final determinations and
reviews of determinations within the meaning of Article 21 of this
Agreement. Such tribunals or procedures shall be independent of the
authorities responsible for the determination or review in question, and
shall provide all interested parties who participated in the administrative
proceeding and are directly and individually affected by the administrative
actions with access to review.

PART VI: INSTITUTIONS

Article 24

Committee on Subsidies and Countervailing Measures
and other Subsidiary Bodies

24.1 There shall be established under this Agreement a Committee on
Subsidies and Countervailing Measures composed of representatives from each
of the Members. The Committee shall elect its own Chairman and shall meet
not less than twice a year and otherwise as envisaged by relevant provisions
of this Agreement at the request of any Member. The Committee shall carry
out responsibilities as assigned to it under this Agreement or by the
Members and it shall afford Members the opportunity of consulting on any
matter relating to the operation of the Agreement or the furtherance of its
objectives. The MTO Secretariat shall act as the secretariat to the
Committee.

24.2 The Committee may set up subsidiary bodies as appropriate.

24.3 The Committee shall establish a Permanent Group of Experts composed of
five independent persons, highly qualified in the fields of subsidies and
trade relations. The experts will be elected by the Committee and one of
them will serve in rotation every year. The Committee may request the Group
of Experts to prepare a proposed conclusion on the existence of a prohibited
subsidy, as provided for in paragraph 5 of Article 4 above. The Committee
may also seek an advisory opinion on the existence and nature of any
subsidy.

24.4 The Group of Experts may be consulted by any Member and give advisory
opinions on the nature of any subsidy proposed to be introduced or currently
maintained by that Member. Such advisory opinions will be confidential and
may not be invoked in proceedings under Article 7 of this Agreement.

24.5 In carrying out their functions, the Committee and any subsidiary
bodies may consult with and seek information from any source they deem
appropriate. However, before the Committee or a subsidiary body seeks such
information from a source within the jurisdiction of a Member, it shall
inform the Member involved.

PART VII: NOTIFICATION AND SURVEILLANCE

Article 25

Notifications

25.1 Members agree that, without prejudice to the provisions of paragraph 1
of Article XVI of the GATT 1994, their notifications of subsidies shall be
submitted not later than 30 June of each year and shall conform to the
provisions of paragraphs 2 through 6 below.

25.2 Members shall notify any subsidy as defined in paragraphs 1 and 2 of
Article 1 above, granted or maintained within their territory.

25.3 The content of notifications should be sufficiently specific to enable
other Members to evaluate the trade effects and to understand the operation
of notified subsidy programmes. In this connection and without prejudice
to the contents and form of the questionnaire on subsidies[52], Members
shall ensure that their notifications contain the following information:

(i) form of a subsidy (i.e., grant, loan, tax concession, etc.);

(ii) subsidy per unit or, in cases where it is not possible, the total
amount or the annual amount budgeted for that subsidy
(indicating, if possible, the average subsidy per unit in the
previous year);

(iii)policy objective and/or purpose of a subsidy;

(iv) duration of a subsidy and/or any other time-limits attached to
it;

(v) statistical data permitting an assessment of the trade effects of
a subsidy.

25.4 Where specific points in paragraph 3 above have not been addressed in
a notification, an explanation shall be provided in the notification itself.

25.5 If subsidies are granted to specific products or sectors, the
notifications should be organized by product or sectors.

25.6 Members which consider that there are not measures or schemes in their
countries requiring notification under paragraph 1 of Article XVI of the
GATT 1994 and this Agreement shall so inform the MTO Secretariat in
writing.

25.7 Members recognize that notification of a measure does not prejudge
either its legal status under the GATT 1994 and this Agreement, the effects
under this Agreement, or the nature of the measure itself.

25.8 Any Member may, at any time, make a written request for information on
the nature and extent of any subsidy granted or maintained by another Member
(including any subsidy referred to in Part IV above), or for explanation of
the reasons for which a specific measure has been considered as not
notifiable.

25.9 Members so requested shall provide such information as quickly as
possible and in a comprehensive manner, and shall be ready, upon request, to
provide additional information to the requesting Member. In particular they
shall provide sufficient details to enable the other Member to assess their
compliance with the terms of this Agreement. Any Member which considers
that such information has not been provided may bring the matter to the
attention of the Committee.

25.10 Any interested Member which considers that any practice of another
Member having the effects of a subsidy has not been notified in accordance
with the provisions of paragraph 1 of Article XVI of the GATT 1994 and this
Article may bring the matter to the attention of such other Member. If the
alleged subsidy is not thereafter notified promptly, such Member may itself
bring the alleged subsidy in question to the notice of the Committee.

25.11 Members shall report without delay to the Committee all preliminary or
final actions taken with respect to countervailing duties. Such reports
will be available in the MTO Secretariat for inspection by government
representatives. The Members shall also submit, on a semi-annual basis,
reports on any countervailing duty actions taken within the preceding six
months.

25.12 Each Member shall notify the Committee (a) which of its authorities
are competent to initiate and conduct investigations referred to in Article
11 and (b) its domestic procedures governing the initiation and conduct of
such investigations.

Article 26

Surveillance

26.1 The Committee shall examine new and full notifications submitted under
paragraph 1 of Article XVI of the GATT 1994 and paragraph 1 of Article 25 of
this Agreement at special sessions held every third year. Notifications
submitted in the intervening years (updating notifications) shall be
examined at each regular meeting of the Committee.

26.2 The Committee shall examine reports submitted under paragraph 11 of
Article 25 above at each regular meeting of the Committee. The semi-annual
reports shall be submitted on an agreed standard form.

PART VIII: DEVELOPING COUNTRY MEMBERS

Article 27

Special and Differential Treatment for Developing Country Members

27.1 Members recognize that subsidies may play an important r?le in
economic development programmes of developing country Members.

27.2 The prohibition of paragraph 1(a) of Article 3 shall not apply to:

(a) developing country Members referred to in Annex VII.

(b) other developing country Members for eight years from the date of
entry into force of the Agreement Establishing the MTO subject to
compliance with the provisions in paragraph 3 below.

27.2bis The prohibition of paragraph 1(b) of Article 3 shall not apply to
developing countries for a period of five years, and shall not apply to
least developed countries for a period of eight years, from the date of
entry into force of the Agreement Establishing the MTO.

27.3 Any developing country Member referred to in paragraph 2(b) above
shall phase out its export subsidies within the eight year period,
preferably in a progressive manner. However, a developing country Member
shall not increase the level of its export subsidies[53], and shall
eliminate them within a period shorter than that provided for in this
provision when the use of such export subsidies is inconsistent with its
development needs. If a developing country Member deems it necessary to
apply such subsidies beyond the eight year period, it shall not later than
one year before the expiry of this period enter into consultation with the
Committee, which will determine whether an extension of this period is
justified, after examining all the relevant economic, financial and
development needs of the Member in question. If the Committee determines
that the extension is justified, the developing country Member concerned
shall hold annual consultations with the Committee to determine the
necessity of maintaining the subsidies. If no such determination is made by
the Committee, the developing country Member shall phase out the remaining
export subsidies within two years from the end of the last authorized
period.

27.4 A developing country Member that has reached export competitiveness in
any given product shall phase out its export subsidies for such product(s),
over a period of two years. However, for a country which is referred to in
Annex VII and which has reached export competitiveness in one or more
products, export subsidies on such products shall be gradually phased out
over a period of 8 years.
27.5 Export competitiveness in a product exists if a country's exports of
that product have reached a share of at least 3.25 per cent in world trade
of that product for two consecutive calendar years. Export competitiveness
shall exist either (a) on the basis of notification by the country having
reached export competitiveness, or (b) on the basis of a computation
undertaken by the MTO Secretariat at the request of any Member. For the
purpose of this paragraph a product is defined as a section heading of the
Harmonized System Nomenclature. Members agree that the Committee shall
review the operation of this provision 5 years from the date of the entry
into force of the Agreement Establishing the MTO.

27.6 Provisions of Article 4 shall not apply to a developing country Member
in the case of export subsidies which are in conformity with the provisions
of paragraphs 2 through 4 above. The relevant provisions in such a case
shall be those of Article 7.

27.7 There shall be no presumption in terms of paragraph 1 of Article 6
that a subsidy granted by a developing country Member results in serious
prejudice, as defined in this Agreement. Such serious prejudice where
applicable under the terms of paragraph 8 below, shall be demonstrated by
positive evidence, in accordance with the provisions of paragraphs 3 through
8 of Article 6.

27.8 Regarding actionable subsidies other than those referred to in
paragraph 1 of Article 6, action may not be authorized or taken under
Article 7 of this Agreement unless nullification or impairment of tariff
concessions or other obligations under the GATT 1994 is found to exist as a
result of such a subsidy, in such a way as to displace or impede imports of
like products into the market of the subsidizing country or unless injury to
domestic industry in the importing market of a Member occurs in terms of
Article 15 of this Agreement.

27.9 Any countervailing duty investigation of a product originating in a
developing Member shall be terminated as soon as the authorities concerned
determine that:

(a) the overall level of subsidies granted upon the product in
question does not exceed 2 per cent of its value/calculated on a
per unit basis; or

(b) the volume of the subsidized imports represents less than 4 per
cent of the total imports for the like product in the importing
Member, unless imports from developing country Members whose
individual shares of total import represent less than 4 per cent
collectively account for more than 9 per cent of the total
imports for the like product in the importing country.

27.10 For those Members within the scope of paragraph 2(b) of Article 27
which have eliminated export subsidies prior to the expiry of the period of
8 years from the entry into force of the Agreement Establishing the MTO and
those in Annex VII, the number in paragraph 9(a) shall be 3 per cent rather
than 2 per cent. This provision shall apply from the date that this
elimination of export subsidies is notified to the Committee for so long as
export subsidies are not granted by the notifying Member. This provision
shall expire 8 years from the date of entry into force of the Agreement
Establishing the MTO.

27.11 The provisions of paragraphs 9 and 10 shall govern any determination
of de minimis under paragraph 3 of Article 15 of this Agreement.

27.12 The provisions of Part III of this Agreement shall not be applicable
to direct forgiveness of debts, subsidies to cover social costs, in whatever
form, including relinquishment of government revenue and other transfer of
liabilities when such subsidies are granted within and directly linked to a
privatization programme of a developing country Member provided that both
such programme and the subsidies involved are granted for a limited period
and notified to the Committee and that the programme results in eventual
privatization of the enterprise concerned.

27.13 The Committee shall, upon request by an interested Member, undertake a
review of a specific export subsidy practice of a developing country Member
to examine whether the practice is in conformity with its development needs.

27.14 The Committee shall, upon request by an interested developing country
Member, undertake a review of a specific countervailing measure to examine
whether it is consistent with the provisions of paragraphs 9 and 10 above as
applicable to the developing country Member in question.

PART IX: TRANSITIONAL ARRANGEMENTS

Article 28

Existing Programmes

28.1 Subsidy programmes that have been established within the territory of
any Member before the date on which such a Member signed the Agreement
Establishing the MTO and which are inconsistent with the provisions of this
Agreement shall be:

(i) notified to the Committee not later than 90 days after the entry
into force of the Agreement Establishing the MTO for such Member;

(ii) brought into conformity with the provisions of this Agreement
within 3 years of the date of entry into force of the Agreement
Establishing the MTO for such Member and until then shall not be
subject to Part II of this Agreement.

28.2 No Member shall extend the scope of any such programme, nor shall such
a programme be renewed upon its expiration.

Article 29

Transformation into a Market Economy

29.1 Members in the process of transformation from a centrally-planned into
a market, free enterprise economy, may apply programmes and measures
necessary for such a transformation.

29.2 For such Members, subsidy programmes falling within the scope of
Article 3, and notified according to paragraph 3 below, shall be phased out
or brought into conformity with Article 3 within a period of 7 years from
the date of entry into force of the Agreement Establishing the MTO. In such
a case, Article 4 shall not apply. In addition during the same period:

- Subsidy programmes falling within the scope of paragraph 1(d) of
Article 6 shall not be actionable under Article 7;

- With respect to other actionable subsidies, provisions of
paragraph 8 of Article 27 shall apply.

29.3 Subsidy programmes falling within the scope of Article 3 shall be
notified to the Committee by the earliest practicable date after entry into
force of the Agreement Establishing the MTO. Further notifications of such
subsidies may be made up to two years after entry into force of the
Agreement Establishing the MTO.

29.4 In exceptional circumstances Members may be given departures from
their notified programmes and measures and their time-frame by the Committee
if such departures are deemed necessary for the process of transformation.

PART X: DISPUTE SETTLEMENT

Article 30

The provisions of Articles XXII and XXIII of the GATT 1994 as
elaborated and applied by the Understanding on Rules and Procedures
Governing the Settlement of Disputes shall apply to consultations and the
settlement of disputes under this Agreement, except as otherwise
specifically provided herein.

PART XI: FINAL PROVISIONS

Article 31

Provisional Application

The provisions of paragraph 1 of Article 6, and the provisions of
Article 8 and Article 9 shall apply for a period of 5 years, beginning with
the date of entry into force of the Agreement Establishing the MTO. Not
later than 180 days before the end of this period, the Committee shall
review the operation of those provisions, with a view to determining whether
to extend their application, either as presently drafted or in a modified
form, for a further period.

Article 32

Other Final Provisions

32.1 No specific action against a subsidy of another Member can be taken
except in accordance with the provisions of the GATT 1994, as
interpreted by this Agreement.[54]

32.2 Reservations may not be entered in respect of any of the provisions of
this Agreement without the consent of the other Members.

32.3 Subject to sub-paragraph 1, the provisions of this Agreement shall
apply to investigations, and reviews of existing measures, initiated
pursuant to applications which have been made on or after the date of entry
into force for a Member of the Agreement Establishing the MTO.

32.3.1 For the purposes of paragraph 3 of Article 21, existing
countervailing measures shall be deemed to be imposed on a date not
later than the date of entry into force for a Member of the Agreement
Establishing the MTO, except in cases in which the domestic
legislation of a Member in force at that date already included a
clause of the type provided for in that paragraph.

32.4 (a) Each government accepting or acceding to the MTO shall take all
necessary steps, of a general or particular character, to ensure,
not later than the date of entry into force of the Agreement
Establishing the MTO for it, the conformity of its laws,
regulations and administrative procedures with the provisions of
this Agreement as they may apply to the Member in question.

(b) Each Member shall inform the Committee of any changes in its laws
and regulations relevant to this Agreement and in the
administration of such laws and regulations.

32.5 The Committee shall review annually the implementation and operation
of this Agreement taking into account the objectives thereof. The Committee
shall annually inform the Council for Trade in Goods of developments during
the period covered by such reviews.

32.6 The Annexes to this Agreement constitute an integral part thereof.
ANNEX I

ILLUSTRATIVE LIST OF EXPORT SUBSIDIES

(a) The provision by governments of direct subsidies to a firm or an
industry contingent upon export performance.

(b) Currency retention schemes or any similar practices which involve a
bonus on exports.

© Internal transport and freight charges on export shipments, provided
or mandated by governments, on terms more favourable than for domestic
shipments.

(d) The provision by governments or their agencies either directly or
indirectly through government-mandated schemes, of imported or
domestic products or services for use in the production of exported
goods, on terms or conditions more favourable than for provision of
like or directly competitive products or services for use in the
production of goods for domestic consumption, if (in the case of
products) such terms or conditions are more favourable than those
commercially available[55] on world markets to their exporters.

(e) The full or partial exemption, remission, or deferral specifically
related to exports, of direct taxes[56] or social welfare charges paid
or payable by industrial or commercial enterprises.[57]

(f) The allowance of special deductions directly related to exports or
export performance, over and above those granted in respect to
production for domestic consumption, in the calculation of the base on
which direct taxes are charged.

(g) The exemption or remission in respect of the production and
distribution of exported products, of indirect taxes56 in excess of
those levied in respect of the production and distribution of like
products when sold for domestic consumption.

(h) The exemption, remission or deferral of prior stage cumulative
indirect taxes56 on goods or services used in the production of
exported products in excess of the exemption, remission or deferral of
like prior stage cumulative indirect taxes on goods or services used
in the production of like products when sold for domestic consumption;
provided, however, that prior stage cumulative indirect taxes may be
exempted, remitted or deferred on exported products even when not
exempted, remitted or deferred on like products when sold for domestic
consumption, if the prior stage cumulative indirect taxes are levied
on inputs that are consumed in the production of the exported product
(making normal allowance for waste).[58] This item shall be
interpreted in accordance with the guidelines on consumption of inputs
in the production process contained in Annex II.

(i) The remission or drawback of import charges56 in excess of those
levied on imported inputs that are consumed in the production of the
exported product (making normal allowance for waste); provided,
however, that in particular cases a firm may use a quantity of home
market inputs equal to, and having the same quality and
characteristics as, the imported inputs as a substitute for them in
order to benefit from this provision if the import and the
corresponding export operations both occur within a reasonable time
period, not to exceed two years. This item shall be interpreted in
accordance with the guidelines on consumption of inputs in the
production process contained in Annex II and the guidelines in the
determination of substitution drawback systems as export subsidies
contained in Annex III.

(j) The provision by governments (or special institutions controlled by
governments) of export credit guarantee or insurance programmes, of
insurance or guarantee programmes against increases in the cost of
exported products or of exchange risk programmes, at premium rates
which are inadequate to cover the long-term operating costs and losses
of the programmes.

(k) The grant by governments (or special institutions controlled by and/or
acting under the authority of governments) of export credits at rates
below those which they actually have to pay for the funds so employed
(or would have to pay if they borrowed on international capital
markets in order to obtain funds of the same maturity and other credit
terms and denominated in the same currency as the export credit), or
the payment by them of all or part of the costs incurred by exporters
or financial institutions in obtaining credits, in so far as they are
used to secure a material advantage in the field of export credit
terms.

Provided, however, that if a Member is a party to an international
undertaking on official export credits to which at least twelve
original Members to this Agreement are parties as of 1 January 1979
(or a successor undertaking which has been adopted by those original
Members), or if in practice a Member applies the interest rates
provisions of the relevant undertaking, an export credit practice
which is in conformity with those provisions shall not be considered
an export subsidy prohibited by this Agreement.

(l) Any other charge on the public account constituting an export subsidy
in the sense of Article XVI of the GATT 1994.

ANNEX II

GUIDELINES ON CONSUMPTION OF INPUTS IN THE PRODUCTION PROCESS[59]

I

1. Indirect tax rebate schemes can allow for exemption, remission or
deferral of prior stage cumulative indirect taxes levied on inputs that are
consumed in the production of the exported product (making normal allowance
for waste). Similarly, drawback schemes can allow for the remission or
drawback of import charges levied on inputs that are consumed in the
production of the exported product (making normal allowance for waste).

2. The Illustrative List of Export Subsidies in Annex I of this Agreement
makes reference to the term "inputs that are consumed in the production of
the exported product" in paragraphs (h) and (i). Pursuant to paragraph (h),
indirect tax rebate schemes can constitute an export subsidy to the extent
that they result in exemption, remission or deferral of prior stage
cumulative indirect taxes in excess of the amount of such taxes actually
levied on inputs that are consumed in the production of the exported
product. Pursuant to paragraph (i), drawback schemes can constitute an
export subsidy to the extent that they result in a remission or drawback of
import charges in excess of those actually levied on inputs that are
consumed in the production of the exported product. Both paragraphs
stipulate that normal allowance for waste must be made in findings regarding
consumption of inputs in the production of the exported product. Paragraph
(i) also provides for substitution, where appropriate.

II

In examining whether inputs are consumed in the production of the
exported product, as part of a countervailing duty investigation pursuant to
this Agreement, investigating authorities should proceed on the following
basis:

1. Where it is alleged that an indirect tax rebate scheme, or a drawback
scheme, conveys a subsidy by reason of over-rebate or excess drawback of
indirect taxes or import charges on inputs consumed in the production of the
exported product, the investigating authorities should first determine
whether the government of the exporting country has in place and applies a
system or procedure to confirm which inputs are consumed in the production
of the exported product and in what amounts. Where such a system or
procedure is determined to be applied, the investigating authorities should
then examine the system or procedure to see whether it is reasonable,
effective for the purpose intended, and based on generally accepted
commercial practices in the country of export. The investigating
authorities may deem it necessary to carry out, in accordance with paragraph
6 of Article 12 of this Agreement, certain practical tests in order to
verify information or to satisfy themselves that the system or procedure is
being effectively applied.

2. Where there is no such system or procedure, where it is not
reasonable, or where it is instituted and considered reasonable but is found
not to be applied or not to be applied effectively, a further examination by
the exporting country based on the actual inputs involved would need to be
carried out in the context of determining whether an excess payment
occurred. If the importing country deemed it necessary, a further
examination would be carried out in accordance with paragraph 1 above.

3. Investigating authorities should treat inputs as physically
incorporated if such inputs are used in the production process and are
physically present in the product exported. The Members note that an input
need not be present in the final product in the same form in which it
entered the production process.

4. In determining the amount of a particular input that is consumed in
the production of the exported product, a "normal allowance for waste"
should be taken into account, and such waste should be treated as consumed
in the production of the exported product. The term "waste" refers to that
portion of a given input which does not serve an independent function in the
production process, is not consumed in the production of the exported
product (for reasons such as inefficiencies) and is not recovered, used nor
sold by the same manufacturer.

5. The investigating authority's determination of whether the claimed
allowance for waste is "normal" should take into account the production
process, the average experience of the industry in the country of export,
and other technical factors, as appropriate. The investigating authority
should bear in mind that an important question is whether the authorities in
the exporting country have reasonably calculated the amount of waste, when
such an amount is intended to be included in the tax or duty rebate or
remission.


ANNEX III

Guidelines in the Determination of Substitution
Drawback Systems as Export Subsidies

I

Drawback systems can allow for the refund or drawback of import
charges on inputs which are consumed in the production process of another
product and where the export of this latter product contains domestic inputs
having the same quality and characteristics as those substituted for the
imported inputs. Pursuant to paragraph (i) of the Illustrative List of
Export Subsidies in Annex I of this Agreement substitution drawback systems
can constitute an export subsidy to the extent that they result in an excess
drawback of the import charges levied initially on the imported inputs for
which drawback is being claimed.

II

In examining any substitution drawback system as part of a
countervailing duty investigation pursuant to this Agreement, investigating
authorities should proceed on the following basis:

1. Paragraph (i) of the Illustrative List stipulates that home market
inputs may be substituted for imported inputs in the production of a product
for export provided such inputs are equal in quantity to, and have the same
quality and characteristics as, the imported inputs being substituted. The
existence of a verification system or procedure is important because it
enables the government of the exporting country to ensure and demonstrate
that the quantity of inputs for which drawback is claimed does not exceed
the quantity of similar products exported, in whatever form, and that there
is not drawback of import charges in excess of those originally levied on
the imported inputs in question.

2. Where it is alleged that a substitution drawback system conveys a
subsidy, the investigating authorities should first proceed to determine
whether the government of the exporting country has in place and applies a
verification system or procedure. Where such a system or procedure is
determined to be applied, the investigating authorities should then examine
the verification procedures to see whether they are reasonable, effective
for the purpose intended, and based on generally accepted commercial
practices in the country of export. To the extent that the procedures are
determined to meet this test and are effectively applied, no subsidy should
be presumed to exist. It may be deemed necessary by the investigating
authorities to carry out, in accordance with paragraph 6 of Article 12 of
this Agreement, certain practical tests in order to verify information or to
satisfy themselves that the verification procedures are being effectively
applied.

3. Where there are no verification procedures, where they are not
reasonable, or where such procedures are instituted and considered
reasonable but are found not to be actually applied or not applied
effectively, there may be a subsidy. In such cases a further examination
by the exporting country based on the actual transactions involved would
need to be carried out to determine whether an excess payment occurred. If
the importing country deemed it necessary a further examination would be
carried out in accordance with paragraph 2 above.

4. The existence of a substitution drawback provision under which
exporters are allowed to select particular import shipments on which
drawback is claimed should not of itself be considered to convey a subsidy.

5. An excess drawback of import charges in the sense of paragraph (i)
would be deemed to exist where governments paid interest on any monies
refunded under their drawback schemes, to the extent of the interest
actually paid or payable.

ANNEX IV

Calculation of the Total Ad Valorem Subsidization
(paragraph 1(a) of Article 6)[60]

1. Any calculation of the amount of a subsidy for the purpose of
paragraph 1 of Article 6 above shall be done in terms of the cost to the
granting government.

2. Except as provided in paragraphs 3-5, in determining whether the
overall rate of subsidization exceeds 5 per cent of the value of the
product, the value of the product shall be calculated as the total value of
the recipient firm's[61] sales in the most recent twelve-month period, for
which sales data is available, preceding the period in which the subsidy is
granted.[62]

3. Where the subsidy is tied to the production or sale of a given
product, the value of the product shall be calculated as the total value of
the recipient firm's sales of that product in the most recent twelve-month
period, for which sales data is available, preceding the period in which the
subsidy is granted.

4. Where the recipient firm is in a start-up situation, the overall rate
of subsidization shall not exceed 15 per cent of the total funds invested.
For purposes of this paragrapha start-up period will not extend beyond the
first year of production.[63]

5. Where the recipient firm is located in an inflationary economy
country, the value of the product shall be calculated as the recipient
firm's total sales (or sales of the relevant product, if the subsidy is
tied) in the preceding calendar year indexed by the rate of inflation
experienced in the twelve months preceding the month in which the subsidy is
to be given.

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

7. Subsidies granted prior to the entry into force of the Agreement
Establishing the MTO, the benefits of which are allocated to future
production, shall be included in the overall rate of subsidization.

8. Subsidies which are non-actionable under relevant provisions of this
Agreement shall not be included in the calculation of the amount of a
subsidy for the purpose of paragraph 1 of Article 6 above.


ANNEX V

Procedures for Developing Information Concerning Serious Prejudice

1. Every Member shall co-operate in the development of evidence to be
examined by the Committee or its subsidiary bodies in procedures under
Article 7 above, paragraphs 4 through 6. The parties to the dispute and any
third-country Member concerned shall notify the Committee, as soon as the
provisions of paragraph 4 of Article 7 have been invoked, the organization
responsible for administration of this provision within its territory and
the procedures to be used to comply with requests for information.

2. In cases where matters are referred to in the Committee under
paragraph 4 of Article 7, the Committee shall upon request, initiate the
procedure to obtain such information from the government of the subsidizing
Member as necessary to establish the existence and amount of subsidizations,
the value of total sales of the subsidized firms, as well as information
necessary to analyze the adverse effects caused by the subsidized
product.[64] This process may include, where appropriate, presentation of
questions to the government of the subsidizing country and of the
complaining country to collect information, as well as to clarify and obtain
elaboration of information available to the parties to a dispute through the
notification procedures set forth in Part VII above.[65]

3. In the case of effects in third-country markets, a Member party to a
dispute may collect information, including through the use of questions to
the government of the third-country, necessary to analyze adverse effects,
which is not otherwise reasonably available from the complaining Member or
the subsidizing Member. This requirement should be administered in such a
way as not to impose an unreasonable burden on the third-country Member.
In particular, such a Member is not expected to make a market or price
analysis specially for that purpose. The information to be supplied is
that which is already available or can be readily obtained by this Member
(e.g., most recent statistics which have already been gathered by relevant
statistical services but which have not yet been published, customs data
concerning imports and declared values of the products concerned, etc.).
However, if a Member party to a dispute undertakes a detailed market
analysis at its own expense, the task of the person or firm conducting such
an analysis shall be facilitated by the authorities of the third-country
Member and such a person or firm shall be given access to all information
which is not normally maintained confidential by the government.

4. The Committee shall designate a representative to serve the function
of facilitating the information-gathering process. The sole purpose of the
representative shall be to ensure the timely development of the information
necessary to facilitate expeditious subsequent multilateral review of the
dispute. In particular, the representative may suggest ways to most
efficiently solicit necessary information as well as encourage the
co-operation of the parties.

5. The information-gathering process outlined in paragraphs 2-4 above
shall be completed within 60 days of the date on which the matter has been
referred to the Committee under paragraph 4 of Article 7 above. The
information obtained during this process shall be submitted to the Committee
or to a panel established by the Committee in accordance with the provisions
of Part X above. This information should include, inter alia, data
concerning the amount of the subsidy in question (and, where appropriate,
the value of total sales of the subsidized firms), prices of the subsidized
product, prices of the non-subsidized product, prices of other suppliers to
the market, changes in the supply of the subsidized product to the market in
question and changes in market shares. It should also include rebuttal
evidence, as well as such supplemental information as the Committee or the
panel deems relevant in the course of reaching its conclusions.

6. If the subsidizing and/or third-country Member fail to co-operate in
the information-gathering process, the complaining Member will present its
case of serious prejudice, based on evidence available to it, together with
facts and circumstances of the non co-operation of the subsidizing and/or
third-country Member. Where information is unavailable due to non
co-operation by the subsidizing and/or third-country Member, the Committee
or the panel may complete the record as necessary relying on best
information otherwise available.

7. In making its determination, the Committee or the panel should draw
adverse inferences from instances of non co-operation by any party involved
in the information-gathering process.

8. In making a determination to use either best information available or
adverse inferences, the Committee or the panel shall consider the advice of
the Committee representative nominated under paragraph 4 above as to the
reasonableness of any requests for information and the efforts made by
parties to comply with these requests in a co-operative and timely manner.

9. Nothing in the information-gathering process shall limit the ability
of the Committee or the panel to seek such additional information it deems
essential to a proper resolution to the dispute, and which was not
adequately sought or developed during that process. However, ordinarily
the panel should not request additional information to complete the record
where the information would support a particular party's position and the
absence of that information in the record is the result of unreasonable non
co-operation by that party in the information-gathering process.

ANNEX VI

Procedures for On-The-Spot Investigations Pursuant to
Paragraph 6 of Article 12

(a) Upon initiation of an investigation, the authorities of the exporting
country and the firms known to be concerned should be informed of the
intention to carry out on-the-spot investigations.

(b) If in exceptional circumstances it is intended to include
non-governmental experts in the investigating team, the firms and the
authorities of the exporting country should be so informed. Such
non-governmental experts should be subject to effective sanctions for
breach of confidentiality requirements.

© It should be standard practice to obtain explicit agreement of the
firms concerned in the exporting country before the visit is finally
scheduled.

(d) As soon as the agreement of the firms concerned has been obtained the
investigating authorities should notify the authorities of the
exporting country of the names and addresses of the firms to be
visited and the dates agreed.

(e) Sufficient advance notice should be given to the firms in question
before the visit is made.

(f) Visits to explain the questionnaire should only be made at the request
of an exporting firm. In case of such a request the investigating
authorities may place themselves at the disposal of the firm; such a
visit may only be made, provided the authorities of the importing
country notify the representatives of the government of the country in
question and unless the latter do not object to the visit.

(g) As the main purpose of the on-the-spot investigation is to verify
information provided or to obtain further details, it should be
carried out after the response to the questionnaire has been received
unless the firm agrees to the contrary and the government of the
exporting country is informed by the investigating authorities of the
anticipated visit and does not object to it; further, it should be
standard practice prior to the visit to advise the firms concerned of
the general nature of the information to be verified and of any
further information which needs to be provided, though this should not
preclude requests to be made on the spot for further details to be
provided in the light of information obtained.

(h) Enquiries or questions put by the authorities or firms of the
exporting countries and essential to a successful on-the-spot
investigation should, whenever possible, be answered before the visit
is made.

ANNEX VII

Developing Country Members Referred to
in Paragraph 2(a) of Article 27

The developing country Member not subject to the provisions of
paragraph 1(a) of Article 3 under the terms of paragraph 2(a) of Article 27
are:

(a) Least-developed countries designated as such by the United Nations
that are Members of the MTO.

(b) Each of the following developing country Members shall be subject to
the provisions which are applicable to other developing country
Members according to paragraph 2(b) of Article 27 when GNP per capita
has reached $1,000 per annum: Bolivia, Cameroon, Congo, C?te
d'Ivoire, Dominican Republic, Egypt, Ghana, Guatemala, Guyana, India,
Indonesia, Kenya, Morocco, Nicaragua, Nigeria, Pakistan, Philippines,
Senegal, Sri Lanka and Zimbabwe.

Note: The inclusion of countries in the list in (b) is based on the most
recent data from the World Bank on GNP per capita.


1. In accordance with the provisions of Article XVI of the GATT 1994 (Note
to Article XVI) and the provisions of Annexes I through III of this
Agreement, the exemption of an exported producted from duties or taxes borne
by the like product when destined for domestic consumption, or the remission
of such duties or taxes in amount not in excess of those which have accrued,
shall not be deemed to be a subsidy.

2. Objective criteria or conditions, as used herein, mean criteria or
conditions which are neutral, which do not favour certain enterprises over
others, and which are economic in nature and horizontal in application such
as number of employees or size of enterprise.

3. In this regard, information on the frequency with which applications for
a subsidy are refused or approved and the reasons for such decisions shall,
in particular, be considered.

4. This standard is met when the facts demonstrate that the granting of a
subsidy, without having been made legally contingent upon export
performance, is in fact tied to actual or anticipated exportation or export
earnings. The mere fact that a subsidy is accorded to enterprises which
export shall not for that reason alone be considered to be an export subsidy
within the meaning of this provision.

5. Measures referred to in Annex I as not constituting export subsidies
shall not be prohibited under this or any other provision of this Agreement.

6. Any time periods mentioned in this Article may be extended by mutual
agreement.

7. As established in the Agreement Establishing the MTO and hereinafter
referred to as the DSB.

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

9. This expression is not meant to allow countermeasures that are
disproportionate in light of the fact that the subsidies dealt with under
these provisions are prohibited.

10. This expression is not meant to allow countermeasures that are
disproportionate in light of the fact that the subsidies dealt with under
these provisions are prohibited.

11. Injury to the domestic industry is used here in the same sense as it is
used in Part V of this Agreement.

12. Nullification or impairment is used in this Agreement in the same sense
as it is used in the relevant provisions of the GATT 1994, and the
existence of such nullification or impairment shall be established in
accordance with the practice of application of these provisions.

13. Serious prejudice to the interests of another Member is used in this
Agreement in the same sense as it is used in Article XVI:1 of the GATT 1994,
and includes threat of serious prejudice.

14. The total ad valorem subsidization shall be calculated in accordance
with the provisions of Annex IV.

15. Since it is anticipated that civil aircraft will be subject to specific
multilateral rules, the threshold in this sub-paragraph does not apply to
civil aircraft.

16. Members recognize that, where royalty-based financing for a civil
aircraft programme is not being fully repaid due to the level of actual
sales falling below the level of forecast sales, this does not in itself
constitute serious prejudice for the purposes of this sub-paragraph.

17. Unless other multilaterally agreed specific rules apply to the trade in
the product or commodity in question.

18. The fact that certain circumstances are referred to in this paragraph
does not, in itself, confer upon them any legal status in terms of either
the GATT 1994 or this Agreement. These circumstances must not be isolated,
sporadic or otherwise insignificant.

19. In the event that the request relates to a subsidy deemed to result in
serious prejudice in terms of Article 6.1 above, the available evidence of
serious prejudice may be limited to the available evidence as to whether the
conditions of Article 6.1 have been met or not.

20. Any time periods mentioned in this Article may be extended by mutual
agreement.

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

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

23. It is recognized that government assistance for various purposes is
widely provided by Members and the mere fact that such assistance may not
qualify for non-actionable treatment under the provisions of this Article
does not in itself restrict the ability of Members to provide such
assistance.

24. Since it is anticipated that civil aircraft will be subject to specific
multilateral rules, the provisions of this sub-paragraph do not apply to
that product. Not later than 18 months after the date of entry into force
of the Agreement Establishing the MTO the Committee shall review the
operation of the provisions of this sub-paragraph with a view to making all
necessary modifications to improve the operation of these provisions. In
its consideration of possible modifications, the Committee shall carefully
review the definitions of the categories set forth in this sub-paragraph in
the light of the experience of Members in the operation of research
programmes and the work in other relevant international institutions. The
provisions of this Agreement do not apply to fundamental research activities
independently conducted by higher education or research establishments. The
term "fundamental research" means an enlargement of general scientific and
technical knowledge not linked to industrial or commercial objectives.

25. In the case of programmes which span "industrial research" and
"pre-competitive development activity", the allowable level of
non-actionable assistance shall not exceed the simple average of the
allowable levels of non-actionable assistance applicable to the above two
categories, calculated on the basis of all eligible costs as set forth in
items (i)-(v) of this sub-paragraph.

26. The allowable levels of non-actionable assistance referred to in this
sub-paragraph shall be established by reference to the total eligible costs
incurred over the duration of an individual project.

27. The term "industrial research" means planned search or critical
investigation aimed at discovery of new knowledge, with the objective that
such knowledge may be useful in developing new products, processes or
services, or in bringing about a significant improvement to existing
products, processes or services.

28. The term "pre-competitive development activity" means the translation
of industrial research findings into a plan, blueprint or design for new,
modified or improved products, processes or services whether intended for
sale or use, including the creation of a first prototype which would not be
capable of commercial use. It may further include the conceptual
formulation and design of products, processes or services alternatives and
initial demonstration or pilot projects, provided that these same projects
cannot be converted or used for industrial application or commercial
exploitation. It does not include routine or periodic alterations to
existing products, production lines, manufacturing processes, services, and
other on-going operations even though those alterations may represent
improvements.

29. A "general framework of regional development" means that regional
subsidy programmes are part of an internally consistent and generally
applicable regional development policy and that regional development
subsidies are not granted in isolated geographical points having no, or
virtually no influence on the development of a region.

30."Neutral and objective criteria" means criteria which do not favour
certain regions beyond what is appropriate for the elimination or reduction
of regional disparities within the framework of the regional development
policy. In this regard, regional subsidy programmes shall include ceilings
on the amount of assistance which can be granted to each subsidized project.
Such ceilings must be differentiated according to the different levels of
development of assisted regions and must be expressed in terms of investment
costs or cost of job creation. Within such ceilings, the distribution of
assistance shall be sufficiently broad and even to avoid the predominant use
of a subsidy by, or the granting of disproportionately large amounts of
subsidy to, certain enterprises as provided for in Article 2 of this
Agreement.

31. The term "existing facilities" means facilities having been in operation
for at least two years at the time when new environmental requirements are
imposed.

32. It is recognized that nothing in this notification provision requires
the provision of confidential information, including confidential business
information.

33. The provisions of Parts II or III may be invoked in parallel with the
provisions of Part V of this Agreement; however, with regard to the effects
of a particular subsidy in the domestic market of the importing country,
only one form of relief (either a countervailing duty, if other requirements
of Part V are met, or a countermeasure under Articles 4 or 7 of this
Agreement) shall be available. The provisions of Parts III and V shall not
be invoked regarding measures considered non-actionable in accordance with
the provisions of Part IV of this Agreement. However, measures referred to
in Article 8.1(a) above may be investigated in order to determine whether or
not they are specific within the meaning of Article 2 above. In addition,
in the case of a subsidy referred to in paragraph 2 of Article 8 conferred
pursuant to a programme which has not been notified in accordance with
paragraph 3 of Article 8, the provisions of Parts III or V may be invoked,
but such subsidy shall be treated as non-actionable if it is found to
conform to the standards set forth in paragraph 2 of Article 8.

34. The term "countervailing duty" shall be understood to mean a special
duty levied for the purpose of off-setting any subsidy bestowed directly or
indirectly upon the manufacture, production or export of any merchandise, as
provided for in Article VI:3 of the GATT 1994.

35. The term "initiated" as used hereinafter means procedural action by
which a Member formally commences an investigation as provided in Article
11.

36. In the case of fragmented industries involving an exceptionally large
number of producers, authorities may determine support and opposition by
using statistically valid sampling techniques.

37. Members are aware that in the territory of certain Members, employees of
domestic producers of the like product or representatives of those
employees, may make or support an application for an investigation under
paragraph 1.

38. As a general rule, the time limit for exporters shall be counted from
the date of receipt of the questionnaire, which for this purpose shall be
deemed to have been received one week from the day on which it was sent to
the respondent or transmitted to the appropriate diplomatic representatives
of the exporting country or in the case of a separate customs territory
Member of the MTO, an official representative of the exporting territory.

39. It being understood that where the number of exporters involved is
particularly high, the full text of the application should instead be
provided only to the authorities of the exporting country or to the
relevant trade association who then should forward copies to the exporters
concerned.

40. Members are aware that in the territory of certain Members disclosure
pursuant to a narrowly-drawn protective order may be required.

41. Members agree that requests for confidentiality should not be
arbitrarily rejected. Members further agree that the investigating
authority may request the waiving of confidentiality only regarding
information relevant to the proceedings.

42. It is particularly important, in accordance with the provisions of this
paragraph, that no affirmative determination whether preliminary or final be
made without reasonable opportunity for consultations having been given.
Such consultations may establish the basis for proceeding under the
provisions of Parts II, III and X of this Agreement.

43. Under this Agreement the term "injury" shall, unless otherwise
specified, be taken to mean material injury to a domestic industry, threat
of material injury to a domestic industry or material retardation of the
establishment of such an industry and shall be interpreted in accordance
with the provisions of this Article.

44. Throughout this Agreement the term "like product" ("produit similaire")
shall be interpreted to mean a product which is identical, i.e., alike in
all respects to the product under consideration, or in the absence of such a
product, another product which although not alike in all respects, has
characteristics closely resembling those of the product under consideration.

45. As set forth in paragraphs 2 and 4 of this Article.

46. For the purpose of this paragraph, producers shall be deemed to be
related to exporters or importers only if (a) one of them directly or
indirectly controls the other; or (b) both of them are directly or
indirectly controlled by a third person; or © together they directly or
indirectly control a third person, provided that there are grounds for
believing or suspecting that the effect of the relationship is such as to
cause the producer concerned to behave differently from non-related
producers. For the purpose of this paragraph, one shall be deemed to
control another when the former is legally or operationally in a position to
exercise restraint or direction over the latter.

47. The word "may" shall not be interpreted to allow the simultaneous
continuation of proceedings with the implementation of undertakings, except
as provided in paragraph 4 of this Article.

48. For the purpose of this paragraph, the term "domestic interested
parties" shall include consumers and industrial users of the imported
product subject to investigation.

49. As used in this Agreement "levy" shall mean the definitive or final
legal assessment or collection of a duty or tax.

50. When the amount of the countervailing duty is assessed on a
retrospective basis, a finding in the most recent assessment proceeding that
no duty is to be levied shall not by itself require the authorities to
terminate the definitive duty.

51. Where authorities provide information and explanations under the
provisions of this Article in a separate report, they shall ensure that such
report is readily available to the public.

52. The Committee shall establish a Working Party to review the contents and
form of the questionnaire as contained in BISD, 9S/193-194.

53. For countries not granting export subsidies as of the day of entry into
force of the Agreement establishing the MTO, this provision shall apply on
the basis of the level of export subsidies granted in 1986.

54. This paragraph is not intended to preclude action under other relevant
provisions of the GATT 1994, where appropriate.

55. The term "commercially available" means that the choice between domestic
and imported products is unrestricted and depends only on commercial
considerations.

56. For the purpose of this Agreement:
The term "direct taxes" shall mean taxes on wages, profits, interests,
rents, royalties, and all other forms of income, and taxes on the ownership
of real property;
The term "import charges" shall mean tariffs, duties, and other fiscal
charges not elsewhere enumerated in this note that are levied on imports;
The term "indirect taxes" shall mean sales, excise, turnover, value
added, franchise, stamp, transfer, inventory and equipment taxes, border
taxes and all taxes other than direct taxes and import charges;
"Prior stage" indirect taxes are those levied on goods or services
used directly or indirectly in making the product;
"Cumulative" indirect taxes are multi-staged taxes levied where there
is no mechanism for subsequent crediting of the tax if the goods or services
subject to tax at one stage of production are used in a succeeding stage of
production;
"Remission" of taxes includes the refund or rebate of taxes;
"Remission or drawback" includes the full or partial exemption or
deferral of import charges.

57. The Members recognize that deferral need not amount to an export subsidy
where, for example, appropriate interest charges are collected. The Members
reaffirm the principle that prices for goods in transactions between
exporting enterprises and foreign buyers under their or under the same
control should for tax purposes be the prices which would be charged between
independent enterprises acting at arm's length. Any Member may draw the
attention of another Member to administrative or other practices which may
contravene this principle and which result in a significant saving of direct
taxes in export transactions. In such circumstances the Members shall
normally attempt to resolve their differences using the facilities of
existing bilateral tax treaties or other specific international mechanisms,
without prejudice to the rights and obligations of Members under the GATT
1994, including the right of consultation created in the preceding sentence.
Paragraph (e) is not intended to limit a Member from taking measures
to avoid the double taxation of foreign source income earned by its
enterprises or the enterprises of another Member.

58. Paragraph (h) does not apply to value-added tax systems and border-tax
adjustment in lieu thereof; the problem of the excessive remission of
value-added taxes is exclusively covered by paragraph (g).

59. Inputs consumed in the production process are inputs physically
incorporated, energy, fuels and oil used in the production process and
catalysts which are consumed in the course of their use to obtain the
exported product.

60. An understanding among Members should be developed, as necessary, on
matters which are not specified in this Annex or which need further
clarification for the purposes of paragraph 1(a) of Article 6.

61. The recipient firm is a firm in the subsidizing country.

62. In the case of tax related subsidies the value of the product shall be
calculated as the total value of the recipient firm's sales in the fiscal
year in which the tax related measure was earned.

63. Start-up situations include instances where financial commitments for
product development or construction of facilities to manufacture products
benefiting from the subsidy have been made, even though production has not
begun.

64. In cases where the existence of serious prejudice has to be
demonstrated.

65. The information gathering process by the Committee shall take into
account the need to protect information which is by nature confidential or
which is provided on a confidential basis by any Member involved in this
process.


AGREEMENT ON SAFEGUARDS

Members,

Having in mind the overall objective of the Members to improve and
strengthen the international trading system based on the GATT 1994;

Recognizing the need to clarify and reinforce the disciplines of the
GATT 1994, and specifically those of its Article XIX (Emergency Action on
Imports of Particular Products), to re-establish multilateral control over
safeguards and eliminate measures that escape such control;

Recognizing the importance of structural adjustment and the need to
enhance rather than limit competition in international markets; and

Recognizing further that, for these purposes, a comprehensive
agreement, applicable to all Members and based on the basic principles of
the GATT 1994, is called for;

Hereby agree as follows:

SECTION I

General

1. This Agreement establishes rules for the application of safeguard
measures which shall be understood to mean those measures provided for in
Article XIX of the GATT 1994.

SECTION II

Conditions

2. A Member[1] may apply a safeguard measure to a product only if that
Member has determined, pursuant to the provisions set out below, that such
product is being imported into its territory in such increased quantities,
absolute or relative to domestic production, and under such conditions as to
cause or threaten to cause serious injury to the domestic industry that
produces like or directly competitive products.

3. (a) A Member may apply a safeguard measure only following an
investigation by the competent authorities of that Member
pursuant to procedures previously established and made public in
consonance with Article X of the GATT 1994. This investigation
shall include reasonable public notice to all interested parties
and public hearings or other appropriate means in which
importers, exporters and other interested parties could present
evidence and their views, including the opportunity to respond to
the presentations of other parties and to submit their views,
inter alia, as to whether or not the application of a safeguard
measure would be in the public interest. The competent
authorities shall publish a report setting forth their findings
and reasoned conclusions reached on all pertinent issues of fact
and law.

(b) Any information which is by nature confidential or which is
provided on a confidential basis shall, upon cause being shown,
be treated as such by the competent authorities. Such
information shall not be disclosed without permission of the
party submitting it. Parties providing confidential information
may be requested to furnish non-confidential summaries thereof
or, if such parties indicate that such information cannot be
summarized, the reasons why a summary cannot be provided.
However, if the competent authorities find that a request for
confidentiality is not warranted and if the party concerned is
either unwilling to make the information public or to authorize
its disclosure in generalized or summary form, the authorities
would be free to disregard such information unless it can be
demonstrated to their satisfaction from appropriate sources that
the information is correct.

4. In critical circumstances where delay would cause damage which it
would be difficult to repair, a provisional safeguard measure may be taken
pursuant to a preliminary determination that there is clear evidence that
increased imports have caused or are threatening to cause serious injury.
The duration of the provisional measure shall not exceed 200 days, during
which period the pertinent requirements of this Section and Section VII
shall be met. Such measures should take the form of tariff increases to be
promptly refunded if the subsequent investigation referred to in paragraph 7
below does not determine that increased imports have caused or threatened to
cause serious injury to a domestic industry. The duration of any such
provisional measure shall be counted as a part of the initial period and any
extension referred to in paragraphs 10, 11 and 12 below.

5. Safeguard measures shall be applied to a product being imported
irrespective of its source.

6. For the purposes of this Agreement:

(a) serious injury shall be understood to mean a significant overall
impairment in the position of a domestic industry;

(b) threat of serious injury shall be understood to mean serious
injury that is clearly imminent, in accordance with the
provisions of paragraph 7 below. A determination of the
existence of a threat of serious injury shall be based on facts
and not merely on allegation, conjecture or remote possibility;
and

© in determining injury or threat thereof, a domestic industry
shall be understood to mean the producers as a whole of the like
or directly competitive products operating within the territory
of a Member, or those whose collective output of the like or
directly competitive products constitutes a major proportion of
the total domestic production of those products.

7. (a) In the investigation to determine whether increased imports have
caused or are threatening to cause serious injury to a domestic
industry under the terms of this Agreement, the competent
authorities shall evaluate all relevant factors of an objective
and quantifiable nature having a bearing on the situation of that
industry, in particular, the rate and amount of the increase in
imports of the product concerned in absolute and relative terms,
the share of the domestic market taken by increased imports,
changes in the level of sales, production, productivity, capacity
utilization, profits and losses, and employment.

(b) The determination referred to in sub-paragraph 7(a) shall not be
made unless this investigation demonstrates, on the basis of
objective evidence, the existence of the causal link between
increased imports of the product concerned and serious injury or
threat thereof. When factors other than increased imports are
causing injury to the domestic industry at the same time, such
injury shall not be attributed to increased imports.

© The competent authorities shall publish promptly, in accordance
with the provisions of paragraph 3 above, a detailed analysis of
the case under investigation as well as a demonstration of the
relevance of the factors examined.

8. Safeguard measures shall be applied only to the extent as may be
necessary to prevent or remedy serious injury and to facilitate adjustment.
If a quantitative restriction is used, such a measure shall not reduce the
quantity of imports below the level of a recent period which shall be the
average of imports in the last three representative years for which
statistics are available, unless clear justification is given that a
different level is necessary to prevent or remedy serious injury. Members
should choose measures most suitable for the achievement of these
objectives.

9. (a) In cases in which a quota is allocated among supplying countries,
the Member applying the restrictions may seek agreement with
respect to the allocation of shares in the quota with all other
Members having a substantial interest in supplying the product
concerned. In cases in which this method is not reasonably
practicable, the Member concerned shall allot to Members having a
substantial interest in supplying the product shares based upon
the proportions, supplied by such Members during a previous
representative period, of the total quantity or value of imports
of the product, due account being taken of any special factors
which may have affected or may be affecting the trade in the
product.

(b) A Member may depart from the provisions in (a) above provided
that consultations under paragraph 27 are conducted under the
auspices of the Committee on Safeguards established in paragraph
36 of this Agreement and that clear demonstration is provided to
the Committee that (i) imports from certain Members have
increased in disproportionate percentage in relation to the total
increase of imports of the product concerned in the
representative period, (ii) the reasons for the departure from
the provisions in (a) above are justified, and (iii) the
conditions of such departure are equitable to all suppliers of
the product concerned. The duration of any such measure shall
not be extended beyond the initial period under paragraph 10
below. The departure referred to above shall not be permitted in
the case of threat of serious injury.

10. Safeguard measures shall be applied only for a period of time as may
be necessary to prevent or remedy serious injury and to facilitate
adjustment. The period shall not exceed four years, unless it is extended
under paragraph 11 below.

11. The period mentioned in paragraph 10 above may be extended provided
that the competent authorities of the importing Member have determined, in
conformity with the procedures set out in this Section, that the safeguard
measure continues to be necessary to prevent or remedy serious injury; that
there is evidence that the industry is adjusting; and provided that the
pertinent provisions of Sections III and VII below are observed.

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

13. In order to facilitate adjustment, if the expected duration of a
safeguard measure as notified under the provisions of paragraph 25 is over
one year, it shall be progressively liberalized at regular intervals during
the period of application. If the duration of the measure exceeds three
years, the Member applying such a measure shall review the situation not
later than the mid-term of the measure and, if appropriate, withdraw it or
increase the pace of liberalization. A measure extended under paragraph 11
above shall not be more restrictive than it was at the end of the initial
period, and should continue to be liberalized.

14. No safeguard measure shall be applied again to the import of a product
which has been subject to such a measure, taken after the date of entry into
force of the Agreement Establishing the MTO, for a period of time equal to
that during which such measure had been previously applied, provided that
the period of non-application is at least two years.

15. Notwithstanding the provisions of paragraph 14 above, a safeguard
measure with a duration of 180 days or less may be applied again to the
import of a product if:

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

(b) such a safeguard measure has not been applied on the same product
more than twice in the five-year period immediately preceding the
date of introduction of the measure.

SECTION III

Level of concessions and other obligations

16. A Member proposing to apply a safeguard measure or seeking an
extension of a safeguard measure shall endeavour to maintain a substantially
equivalent level of concessions and other obligations to that existing
between it and the exporting Members which would be affected by such a
measure under the GATT 1994, in accordance with the provisions of paragraph
27 below. To achieve this objective, the Members concerned may agree on any
adequate means of trade compensation for the adverse effects of the measure
on their trade.

17. If no agreement is reached within 30 days in the consultations under
paragraph 27 below, then the affected exporting Members are free, not later
than 90 days after the measure is applied, to suspend, upon the expiration
of 30 days from the day on which written notice of such suspension is
received by the Council for Trade in Goods, the application of substantially
equivalent concessions or other obligations under the GATT 1994, to the
trade of the Member applying the safeguard measure, the suspension of which
the Council for Trade in Goods does not disapprove.

18. The right of suspension referred to in paragraph 17 above shall not be
exercised for the first three years that a safeguard measure is in effect,
provided that the safeguard measure has been taken as a result of an
absolute increase in imports and that such a measure conforms to the
provisions of this Agreement.

SECTION IV

Developing country members

19. Safeguard measures shall not be applied against a product originating
in a developing country Member as long as its share of imports of the
product concerned in the importing Member does not exceed 3 per cent,
provided that, developing country Members with less than 3 per cent import
share collectively account for not more than 9 per cent of total imports of
the product concerned.[2]

20. A developing country Member shall have the right to extend the period
of application of a safeguard measure for a period of up to two years beyond
the maximum period provided for in paragraph 12 above. Notwithstanding the
provisions of paragraph 14 above, a developing country Member shall have the
right to apply a safeguard measure again to the import of a product which
has been subject to such a measure, taken after the date of entry into force
of the Agreement Establishing the MTO, after a period of time equal to half
that during which such a measure has been previously applied, provided that
the period of non-application is at least two years.

SECTION V

Pre-existing Article XIX measures

21. Members shall terminate all safeguard measures taken pursuant to
Article XIX of the GATT 1947 that were in existence at the date of entry
into force of the Agreement Establishing the MTO not later than eight years
after the date on which they were first applied or five years after the date
of entry into force of the Agreement Establishing the MTO, whichever comes
later.

SECTION VI

Prohibition and elimination of certain measures

22. (a) A Member shall not take or seek any emergency action on imports
of particular products as set forth in Article XIX of the GATT
1994 unless such action conforms with the provisions of that
Article applied in accordance with this Agreement.

(b) Furthermore, a Member shall not seek, take or maintain any
voluntary export restraints, orderly marketing arrangements or
any other similar measures on the export or the import
side.[3],[4] These include actions taken by a single Member as
well as actions under agreements, arrangements and understandings
entered into by two or more Members. Any such measure in effect
at the time of entry into force of the Agreement Establishing the
MTO shall be brought into conformity with this Agreement or
phased out in accordance with paragraph 23 below.

© This Agreement does not apply to measures sought, taken or
maintained by a Member pursuant to provisions of the GATT 1994
other than Article XIX, and Multilateral Trade Agreements in
Annex 1A other than this Agreement, or pursuant to protocols and
agreements or arrangements concluded within the framework of the
GATT 1994.

23. The phasing out of measures referred to in paragraph 22(b) above shall
be carried out according to timetables to be presented to the Committee on
Safeguards by the Members concerned not later than 180 days after the date
of entry into force of the Agreement Establishing the MTO. These timetables
shall provide for all measures referred to in paragraph 22 above to be
phased out or brought into conformity with this Agreement within a period
not exceeding four years after the date of entry into force of the Agreement
Establishing the MTO, subject to not more than one specific measure per
importing Member[5], the duration of which shall not extend beyond December
31, 1999. Any such exception must be mutually agreed between the Members
directly concerned and notified to the Committee on Safeguards for its
review and acceptance within 90 days of the coming into force of the
Agreement Establishing the MTO. The Annex to this Agreement indicates a
measure which has been agreed as falling under this exception.

24. Members shall not encourage or support the adoption or maintenance by
public and private enterprises of non-governmental measures equivalent to
those referred to in paragraph 22 above.

SECTION VII

Notification and consultation

25. A Member shall immediately notify the Committee on Safeguards upon:

(a) initiating an investigatory process relating to serious injury or
threat thereof and the reasons for it;

(b) making a finding of serious injury or threat thereof caused by
increased imports; and

© taking a decision to apply or extend a safeguard measure.

26. In making the notifications referred to in sub-paragraphs 25(b) and
© above, the Member proposing to apply or extend a safeguard measure shall
provide the Committee on Safeguards with all pertinent information, which
shall include evidence of serious injury or threat thereof caused by
increased imports, precise description of the product involved and the
proposed measure, proposed date of introduction, expected duration and
timetable for progressive liberalization. In the case of an extension of a
measure, evidence that the industry concerned is adjusting shall also be
provided. The Council for Trade in Goods or the Committee on Safeguards may
request such additional information as they may consider necessary from the
Member proposing to apply or extend the measure.

27. A Member proposing to apply or extend a safeguard measure shall
provide adequate opportunity for prior consultations with those Members
having a substantial interest as exporters of the product concerned, with a
view to, inter alia, reviewing the information provided under paragraph 26
above, exchanging views on the measure and reaching an understanding on ways
to achieve the objective set out in Paragraph 16 above.

28. A Member shall make a notification before taking a provisional
safeguard measure referred to in paragraph 4 above. Consultations shall be
initiated immediately after the measure is taken.

29. The results of the consultations referred to in this Section, as well
as the results of mid-term reviews referred to in paragraph 13, any form of
compensation referred to in paragraph 16, and proposed suspensions of
concessions and other obligations referred to in paragraph 17, shall be
notified immediately to the Council for Trade in Goods by the Members
concerned.

30. Members shall notify promptly the Committee on Safeguards of their
laws, regulations and administrative procedures relating to safeguard
measures as well as any modifications made to them.

31. Members maintaining measures described in paragraphs 21 and 22 above
which exist at the date on which the Agreement Establishing the MTO enters
into force shall notify such measures to the Committee on Safeguards, not
later than 60 days after the entry into force of the Agreement Establishing
the MTO.

32. Any Member may notify the Committee on Safeguards of all laws,
regulations, administrative procedures and any measures or actions dealt
with in this Agreement that have not been notified by other Members that are
required by this Agreement to make such notifications.

33. Any Member may notify the Committee on Safeguards of any
non-governmental measures referred to in paragraph 24 above.

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

35. The provisions on notification in this Agreement shall not require any
Member to disclose confidential information the disclosure of which would
impede law enforcement or otherwise be contrary to the public interest or
would prejudice the legitimate commercial interests of particular
enterprises, public or private.

SECTION VIII

Surveillance

36. There shall be a Committee on Safeguards under the authority of the
Council for Trade in Goods, which shall be open to the participation of any
Member indicating its wish to serve on it. The Committee will have the
following functions:

(a) to monitor, and report annually to the Council for Trade in Goods
on, the general implementation of this Agreement and make
recommendations towards its improvement;

(b) to find, upon request of an affected Member, whether or not the
procedural requirements of this Agreement have been complied with
in connection with a safeguard measure, and report its findings
to the Council for Trade in Goods;

© to assist Members, if they so request, in their consultations
under the provisions of this Agreement;

(d) to examine measures covered by paragraphs 21 and 22, monitor the
phase-out of such measures and report as appropriate to the
Council for Trade in Goods;

(e) to review, at the request of the Member taking a safeguard
measure, whether proposals to suspend concessions or other
obligations are "substantially equivalent", and report as
appropriate to the Council for Trade in Goods;

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

(g) to perform any other function connected with this Agreement that
the Council for Trade in Goods may determine.

37. To assist the Committee in carrying out its surveillance function, the
MTO Secretariat shall prepare annually a factual report on the operation of
the Agreement based on notifications and other reliable information
available to it.

SECTION IX

Dispute settlement

38. The provisions of Articles XXII and XXIII of the GATT 1994 as
elaborated and applied by the Understanding on Rules and Procedures
Governing the Settlement of Disputes shall apply to consultations and the
settlement of disputes arising under this Agreement.

ANNEX

Exception Referred to in Paragraph 23



Members concerned Product Termination

EC/Japan Passenger cars, off road vehicles, light commercial
vehicles, light trucks (up to 5 tonnes), and the same
vehicles in wholly knocked-down form (CKD sets).31
December, 1999

1. A customs union may apply a safeguard measure as a single unit or on
behalf of a member state. When a customs union applies a safeguard measure
as a single unit, all the requirements for the determination of serious
injury or threat thereof under this Agreement shall be based on the
conditions existing in the customs union as a whole. When a safeguard
measure is applied on behalf of a member state, all the requirements for
the determination of serious injury or threat thereof shall be based on the
conditions existing in that member state and the measure shall be limited to
that member state. Nothing in this Agreement prejudges the interpretation
of the relationship between Article XIX and Article XXIV:8 of GATT 1994.

2. A Member shall immediately notify an action taken under paragraph 19 to
the Committee on Safeguards.

3. An import quota applied as a safeguard measure in conformity with the
relevant provisions of the GATT 1994 and this Agreement may, by mutual
agreement, be administered by the exporting Member.

4. Examples of similar measures include export moderation, export-price or
import-price monitoring systems, export or import surveillance, compulsory
import cartels and discretionary export or import licensing schemes, any of
which afford protection.

5. The only such exception to which the European Communities is entitled is
indicated in the Annex to this Agreement.


GENERAL AGREEMENT ON TRADE IN SERVICES

PREAMBLE

PART I SCOPE AND DEFINITION
Article I Scope and Definition

PART II GENERAL OBLIGATIONS AND DISCIPLINES
Article II Most-Favoured-Nation Treatment
Article III Transparency
Article III bisDisclosure of Confidential Information
Article IV Increasing Participation of
Developing Countries
Article V Economic Integration
Article V bisLabour Markets Integration Agreements
Article VI Domestic Regulation
Article VII Recognition
Article VIIIMonopolies and Exclusive Service
Suppliers
Article IX Business Practices
Article X Emergency Safeguard Measures
Article XI Payments and Transfers
Article XII Restrictions to Safeguard the Balance
of Payments
Article XIIIGovernment Procurement
Article XIV General Exceptions
Article XIV bisSecurity Exceptions
Article XV Subsidies

PART III SPECIFIC COMMITMENTS

Article XVI Market Access
Article XVIINational Treatment
Article XVIIIAdditional Commitments

PART IV PROGRESSIVE LIBERALIZATION
Article XIX Negotiation of Specific Commitments
Article XX Schedules of Specific Commitments
Article XXI Modification of Schedules

PART V INSTITUTIONAL PROVISIONS
Article XXIIConsultation
Article XXIIIDispute Settlement and Enforcement
Article XXIVCouncil for Trade in Services
Article XXV Technical Cooperation
Article XXVIRelationship with Other International
Organizations

PART VI FINAL PROVISIONS
Article XXVIIDenial of Benefits
Article XXVIIIDefinitions
Article XXIXAnnexes

Annex on Article II Exemptions
Annex on Movement of Natural Persons supplying Services under the Agreement
Annex on Financial Services
Annex on Telecommunications
Annex on Air Transport Services
Annex on Negotiations on Basic Telecommunications


GENERAL AGREEMENT ON TRADE IN SERVICES

Members,

Recognizing the growing importance of trade in services for the growth
and development of the world economy;

Wishing to establish a multilateral framework of principles and rules
for trade in services with a view to the expansion of such trade under
conditions of transparency and progressive liberalization and as a means of
promoting the economic growth of all trading partners and the development of
developing countries;

Desiring the early achievement of progressively higher levels of
liberalization of trade in services through successive rounds of
multilateral negotiations aimed at promoting the interests of all
participants on a mutually advantageous basis and at securing an overall
balance of rights and obligations, while giving due respect to national
policy objectives;

Recognizing the right of Members to regulate, and to introduce new
regulations, on the supply of services within their territories in order to
meet national policy objectives and, given asymmetries existing with respect
to the degree of development of services regulations in different countries,
the particular need of developing countries to exercise this right;

Desiring to facilitate the increasing participation of developing
countries in trade in services and the expansion of their service exports
including, inter alia, through the strengthening of their domestic services
capacity and its efficiency and competitiveness;

Taking particular account of the serious difficulty of the least
developed countries in view of their special economic situation and their
development, trade and financial needs;

Hereby agree as follows:


PART I

SCOPE AND DEFINITION

Article I

Scope and Definition

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

2. For the purposes of this Agreement, trade in services is defined as
the supply of a service:

(a) from the territory of one Member into the territory of any other
Member;

(b) in the territory of one Member to the service consumer of any
other Member;

© by a service supplier of one Member, through commercial presence
in the territory of any other Member;

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

3. For the purposes of this Agreement:

(a) "measures by Members" means measures taken by:

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

(ii) non-governmental bodies in the exercise of powers
delegated by central, regional or local governments or
authorities;

In fulfilling its obligations and commitments under the
Agreement, each Member shall take such reasonable measures as may
be available to it to ensure their observance by regional and
local governments and authorities and non-governmental bodies
within its territory.

(b) "services" includes any service in any sector except services
supplied in the exercise of governmental authority.

© A service supplied in the exercise of governmental authority
means any service which is supplied neither on a commercial
basis, nor in competition with one or more service suppliers.


PART II

GENERAL OBLIGATIONS AND DISCIPLINES

Article II

Most-Favoured-Nation Treatment

1. With respect to any measure covered by this Agreement, each Member
shall accord immediately and unconditionally to services and service
suppliers of any other Member, treatment no less favourable than that it
accords to like services and service suppliers of any other country.

2. A Member may maintain a measure inconsistent with paragraph 1 provided
that such a measure is listed in, and meets the conditions of, the Annex on
Article II Exemptions.

3. The provisions of this Agreement shall not be so construed as to
prevent any Member from conferring or according advantages to adjacent
countries in order to facilitate exchanges limited to contiguous frontier
zones of services that are both locally produced and consumed.

Article III

Transparency

1. Each Member shall publish promptly and, except in emergency
situations, at the latest by the time of their entry into force, all
relevant measures of general application, which pertain to or affect the
operation of this Agreement. International agreements pertaining to or
affecting trade in services to which a Member is a signatory shall also be
published.

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

3. Each Member shall promptly and at least annually inform the Council
for Trade in Services of the introduction of any new, or any changes to
existing, laws, regulations or administrative guidelines which significantly
affect trade in services covered by its specific commitments under this
Agreement.

4. Each Member shall respond promptly to all requests for specific
information, by any other Member, on any of its measures of general
application or international agreements within the meaning of paragraph 1.
Each Member shall also establish one or more enquiry points to provide
specific information to other Members, upon request, on all such matters as
well as those subject to the notification requirement in paragraph 3. Such
enquiry points shall be established within two years from the entry into
force of the Agreement Establishing the MTO. Appropriate flexibility with
respect to the time-limit within which such enquiry points are to be
established may be agreed upon for individual developing countries. Enquiry
points need not be depositories of laws and regulations.

5. Any Member may notify to the Council for Trade in Services any
measure, taken by any other Member, which it considers affects the
operation of this Agreement.

Article III bis

Disclosure of Confidential Information

Nothing in this Agreement shall require any Member to provide
confidential information, the disclosure of which would impede law
enforcement, or otherwise be contrary to the public interest, or which would
prejudice legitimate commercial interests of particular enterprises, public
or private.

Article IV

Increasing Participation of Developing Countries

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

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

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

© the liberalization of market access in sectors and modes of
supply of export interest to them.

2. Developed country Members, and to the extent possible other Members,
shall establish contact points within two years from the entry into force of
the Agreement Establishing the MTO to facilitate the access of developing
countries' service suppliers to information, related to their respective
markets, concerning:

(a) commercial and technical aspects of the supply of services;

(b) registration, recognition and obtaining of professional
qualifications; and

© the availability of services technology.

3. Special priority shall be given to the least developed countries in
the implementation of paragraphs 1 and 2 above. Particular account shall be
taken of the serious difficulty of the least-developed countries in
accepting negotiated specific commitments in view of their special economic
situation and their development, trade and financial needs.

Article V

Economic Integration

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

(a) has substantial sectoral coverage[1], and

(b) provides for the absence or elimination of substantially all
discrimination, in the sense of Article XVII, between or among
the parties, in the sectors covered under sub-paragraph (a),
through:

(i) elimination of existing discriminatory measures, and/or

(ii) prohibition of new or more discriminatory measures,

either at the entry into force of that agreement or on the basis
of a reasonable time-frame, except for measures permitted under
Articles XI, XII, XIV and XIV bis.

2. In evaluating whether the conditions under paragraph 1(b) are met,
consideration may be given to the relationship of the agreement to a
wider process of economic integration or trade liberalization among
the countries concerned.

3. (a) Where developing countries are parties to an agreement of the
type referred to in paragraph 1, flexibility shall be provided
for regarding the conditions set out in paragraph 1, in
particular sub-paragraph (b), in accordance with the level of
development of the countries concerned, both overall and in
individual sectors and sub-sectors.

(b) Notwithstanding paragraph 6 below, in the case of an agreement of
the type referred to in paragraph 1 involving only developing
countries, more favourable treatment may be granted to juridical
persons owned or controlled by natural persons of the parties to
such an agreement.

4. Any agreement referred to in paragraph 1 shall be designed to
facilitate trade between the parties to the agreement and shall not in
respect of any Member outside the agreement raise the overall level of
barriers to trade in services within the respective sectors or
sub-sectors compared to the level applicable prior to such an
agreement.

5. If, in the conclusion, enlargement or any significant modification of
any agreement under paragraph 1, a Member intends to withdraw or
modify a specific commitment inconsistently with the terms and
conditions set out in its schedule, it shall provide at least 90 days
advance notice of such modification or withdrawal and the procedure
set forth in paragraphs 2-4 of Article XXI shall apply.

6. A service supplier of any other Member that is a juridical person
constituted under the laws of a party to an agreement referred to in
paragraph 1 shall be entitled to treatment granted under such
agreement, provided that it engages in substantive business operations
in the territory of the parties to such agreement.

7. (a) Members which are parties to any agreement referred to in
paragraph 1 shall promptly notify any such agreement and any
enlargement or any significant modification thereto the Council
for Trade in Services. They shall also make available to the
Council such relevant information as may be requested by it. The
Council may establish a working party to examine such an
agreement or enlargement or modification thereto and to report to
the Council on its consistency with this Article.

(b) Members which are parties to any agreement referred to in
paragraph 1 which is implemented on the basis of a time-frame
shall report periodically to the Council for Trade in Services on
its implementation. The Council may establish a working party to
examine such reports if it deems it necessary.

© Based on the reports of the working parties referred to in
paragraphs (a) and (b), the Council may make recommendations to
the parties as it deems appropriate.

8. A Member which is a party to any agreement referred to in paragraph 1
may not seek compensation for trade benefits that may accrue to any other
Member from such agreement.

Article V bis

Labour Markets Integration Agreements

This Agreement shall not prevent any of its Members from being a party
to an agreement establishing full integration[2] of the labour markets
between or among the parties to such an agreement, provided that such an
agreement:

(a) exempts citizens of parties to the agreement from requirements
concerning residency and work permits;

(b) is notified to the Council for Trade in Services.

Article VI

Domestic Regulation

1. In sectors where specific commitments are undertaken, each Member
shall ensure that all measures of general application affecting trade in
services are administered in a reasonable, objective and impartial manner.

2. (a) Each Member shall maintain or institute as soon as practicable
judicial, arbitral or administrative tribunals or procedures
which provide, at the request of an affected service supplier,
for the prompt review of, and where justified, appropriate
remedies for, administrative decisions affecting trade in
services. Where such procedures are not independent of the
agency entrusted with the administrative decision concerned, the
Member shall ensure that they do in fact provide for an objective
and impartial review.

(b) The provisions of sub-paragraph (a) shall not be construed to
require a Member to institute such tribunals or procedures where
this would be inconsistent with its constitutional structure or
the nature of its legal system.

3. Where authorization is required for the supply of a service on which a
specific commitment has been made, the competent authorities of a Member
shall, within a reasonable period of time after the submission of an
application considered complete under domestic laws and regulations, inform
the applicant of the decision concerning the application. At the request of
the applicant, the competent authorities of the Member shall provide,
without undue delay, information concerning the status of the application.

4. With a view to ensuring that measures relating to qualification
requirements and procedures, technical standards and licensing requirements
do not constitute unnecessary barriers to trade in services, the Council for
Trade in Services shall, through appropriate bodies it may establish,
develop any necessary disciplines. Such disciplines shall aim to ensure
that such requirements are, inter alia:

(a) based on objective and transparent criteria, such as competence
and the ability to supply the service;

(b) not more burdensome than necessary to ensure the quality of the
service;

© in the case of licensing procedures, not in themselves a
restriction on the supply of the service.

5. (a) In sectors in which a Member has undertaken specific commitments,
pending the entry into force of disciplines developed in these
sectors pursuant to paragraph 4, the Member shall not apply
licensing and qualification requirements and technical standards
that nullify or impair such specific commitments in a manner
which:

(i) does not comply with the criteria outlined in
sub-paragraphs 4(a), (b) or ©; and

(ii) could not reasonably have been expected of that Member at
the time the specific commitments in those sectors were
made.

(b) In determining whether a Member is in conformity with the
obligation under paragraph 5(a) above, account shall be taken of
international standards of relevant international
organizations[3] applied by that Member.

6. In sectors where specific commitments regarding professional services
are undertaken, each Member shall provide for adequate procedures to verify
the competence of professionals of any other Member.

Article VII

Recognition

1. For the purposes of the fulfilment, in whole or in part, of its
standards or criteria for the authorization, licensing or certification of
services suppliers, and subject to the requirements of paragraph 3 below, a
Member may recognize the education or experience obtained, requirements met,
or licenses or certifications granted in a particular country. Such
recognition, which may be achieved through harmonization or otherwise, may
be based upon an agreement or arrangement with the country concerned or may
be accorded autonomously.

2. A Member that is a party to an agreement or arrangement referred to in
paragraph 1, whether existing or future, shall afford adequate opportunity
for other interested Members to negotiate their accession to such an
agreement or arrangement or to negotiate comparable ones with it. Where a
Member accords recognition autonomously, it shall afford adequate
opportunity for any other Member to demonstrate that education, experience,
licenses, or certifications obtained or requirements met in its territory
should be recognized.

3. A Member shall not accord recognition in a manner which would
constitute a means of discrimination between countries in the application of
its standards or criteria for the authorization, licensing or certification
of services suppliers, or a disguised restriction on trade in services.

4. Each Member shall:

(a) within 12 months from the date on which the Agreement
Establishing the MTO takes effect for it, inform the Council for
Trade in Services of its existing recognition measures and state
whether such measures are based on agreements or arrangements of
the type referred to in paragraph 1;

(b) promptly inform the Council for Trade in Services as far in
advance as possible of the opening of negotiations on an
agreement or arrangement referred to in paragraph 1 in order to
provide adequate opportunity to any other Member to indicate
their interest in participating in the negotiations before they
enter a substantive phase;

© promptly inform the Council for Trade in Services when it adopts
new recognition measures or significantly modifies existing ones
and state whether the measures are based on an agreement or
arrangement referred to in paragraph 1.

5. Wherever appropriate, recognition should be based on multilaterally
agreed criteria. In appropriate cases, Members shall work in co-operation
with relevant intergovernmental and non-governmental organizations towards
the establishment and adoption of common international standards and
criteria for recognition and common international standards for the practice
of relevant services trades and professions.

Article VIII

Monopolies and Exclusive Service Suppliers

1. Each Member shall ensure that any monopoly supplier of a service in
its territory does not, in the supply of the monopoly service in the
relevant market, act in a manner inconsistent with that Member's obligations
under Article II and specific commitments.

2. Where a Member's monopoly supplier competes, either directly or
through an affiliated company, in the supply of a service outside the scope
of its monopoly rights and which is subject to that Member's specific
commitments, the Member shall ensure that such a supplier does not abuse its
monopoly position to act in its territory in a manner inconsistent with such
commitments.

3. The Council for Trade in Services may, at the request of a Member
which has a reason to believe that a monopoly supplier of a service of any
other Member is acting in a manner inconsistent with paragraph 1 or 2 above,
request the Member establishing, maintaining or authorizing such supplier to
provide specific information concerning the relevant operations.

4. If, after the entry into force of the Agreement Establishing the MTO,
a Member grants monopoly rights regarding the supply of a service covered by
its specific commitments, that Member shall make such notification to the
Council for Trade in Services no later than three months before the intended
implementation of the grant of monopoly rights and the provisions of
paragraphs 2, 3 and 4 of Article XXI shall apply.

5. The provisions of this Article shall also apply to cases of exclusive
service suppliers, where a Member, formally or in effect, (a) authorizes or
establishes a small number of service suppliers and (b) substantially
prevents competition among those suppliers in its territory.

Article IX

Business Practices

1. Members recognize that certain business practices of service
suppliers, other than those falling under Article VIII, may restrain
competition and thereby restrict trade in services.

2. Each Member shall, at the request of any other Member, enter into
consultations with a view to eliminating practices referred to in paragraph
1. The Member addressed shall accord full and sympathetic consideration to
such a request and shall cooperate through the supply of publicly available
non-confidential information of relevance to the matter in question. The
Member addressed shall also provide other information available to the
requesting Member, subject to its domestic law and to the conclusion of
satisfactory agreement concerning the safeguarding of its confidentiality by
the requesting Member.

Article X

Emergency Safeguards Measures

1. There shall be multilateral negotiations on the question of emergency
safeguard measures based on the principle of non-discrimination. The
results of such negotiations shall enter into effect on a date not later
than three years from the entry into force of the Agreement Establishing the
MTO.

2. In the period before the entry into effect of the results of the
negotiations referred to in paragraph 1, any Member may, notwithstanding the
provisions of paragraph 1 of Article XXI, notify the Council on Trade in
Services of its intention to modify or withdraw a specific commitment after
a period of one year from the date on which the commitment enters into
force; provided that the Member shows cause to the Council that the
modification or withdrawal cannot await the lapse of the three-year period
provided for in paragraph 1 of Article XXI.

3. The provisions of paragraph 2 shall cease to apply three years after
the entry into force of the Agreement Establishing the MTO.

Article XI

Payments and Transfers

1. Except under the circumstances envisaged in Article XII, a Member
shall not apply restrictions on international transfers and payments for
current transactions relating to its specific commitments.

2. Nothing in this Agreement shall affect the rights and obligations of
the members of the International Monetary Fund under the Articles of
Agreement of the Fund, including the use of exchange actions which are in
conformity with the Articles of Agreement, provided that a Member shall not
impose restrictions on any capital transactions inconsistently with its
specific commitments regarding such transactions, except under Article XII
or at the request of the Fund.


Article XII

Restrictions to Safeguard the Balance of Payments

1. In the event of serious balance-of-payments and external financial
difficulties or threat thereof, a Member may adopt or maintain restrictions
on trade in services on which it has undertaken specific commitments,
including on payments or transfers for transactions related to such
commitments. It is recognized that particular pressures on the balance of
payments of a Member in the process of economic development or economic
transition may necessitate the use of restrictions to ensure, inter alia,
the maintenance of a level of financial reserves adequate for the
implementation of its programme of economic development or economic
transition.

2. The restrictions referred to in paragraph 1 above:

(a) shall not discriminate among Members;

(b) shall be consistent with the Articles of Agreement of the
International Monetary Fund;

© shall avoid unnecessary damage to the commercial, economic and
financial interests of any other Member;

(d) shall not exceed those necessary to deal with the circumstances
described in paragraph 1;

(e) shall be temporary and be phased out progressively as the
situation specified in paragraph 1 improves.

3. In determining the incidence of such restrictions, Members may give
priority to the supply of services which are more essential to their
economic or development programmes. However, such restrictions shall not be
adopted or maintained for the purpose of protecting a particular service
sector.

4. Any restrictions adopted or maintained under paragraph 1 of this
Article, or any changes therein, shall be promptly notified to the General
Council.

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

(b) The Ministerial Conference shall establish procedures[4] for
periodic consultations with the objective of enabling such
recommendations to be made to the Member concerned as it may deem
appropriate.

© Such consultations shall assess the balance-of-payment situation
of the Member concerned and the restrictions adopted or
maintained under this Article, taking into account, inter alia,
such factors as:

(i) the nature and extent of the balance-of-payments and the
external financial difficulties;

(ii) the external economic and trading environment of the
consulting Member;

(iii) alternative corrective measures which may be available.

(d) The consultations shall address the compliance of any
restrictions with paragraph 2, in particular the progressive
phase out of restrictions in accordance with paragraph 2(e).

(e) In such consultations, all findings of statistical and other
facts presented by the International Monetary Fund relating to
foreign exchange, monetary reserves and balance of payments,
shall be accepted and conclusions shall be based on the
assessment by the Fund of the balance-of-payments and the
external financial situation of the consulting Member.

6. If a Member which is not a member of the International Monetary Fund
wishes to apply the provisions of this Article, the Ministerial Conference
shall establish review and any other procedures necessary.

Article XIII

Government Procurement

1. Articles II, XVI and XVII shall not apply to laws, regulations or
requirements governing the procurement by governmental agencies of services
purchased for governmental purposes and not with a view to commercial resale
or with a view to use in the supply of services for commercial sale.

2. There shall be multilateral negotiations on government procurement in
services under this Agreement within two years from the entry into force of
the Agreement Establishing the MTO.


Article XIV

General Exceptions

Subject to the requirement that such measures are not applied in a
manner which would constitute a means of arbitrary or unjustifiable
discrimination between countries where like conditions prevail, or a
disguised restriction on trade in services, nothing in this Agreement shall
be construed to prevent the adoption or enforcement by any Member of
measures:

(a) necessary to protect public morals or to maintain public
order;[5]

(b) necessary to protect human, animal or plant life or health;

© necessary to secure compliance with laws or regulations which are
not inconsistent with the provisions of this Agreement including
those relating to:

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

(ii) the protection of the privacy of individuals in relation
to the processing and dissemination of personal data and
the protection of confidentiality of individual records
and accounts;

(iii) safety;

(d) inconsistent with Article XVII, provided that the difference in
treatment is aimed at ensuring the equitable or effective[6]
imposition or collection of direct taxes[7] in respect of
services or service suppliers of other Members;

(e) inconsistent with Article II, provided that the difference in
treatment is the result of an agreement on the avoidance of
double taxation or provisions on the avoidance of double taxation
in any other international agreement or arrangement by which the
Member is bound.

Article XIV bis

Security Exceptions

1. Nothing in this Agreement shall be construed:

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

(b) to prevent any Member from taking any action which it considers
necessary for the protection of its essential security interests:

(i) relating to the supply of services as carried out directly
or indirectly for the purpose of provisioning a military
establishment;

(ii) relating to fissionable and fusionable materials or the
materials from which they are derived;

(iii) taken in time of war or other emergency in international
relations; or

© to prevent any Member from taking any action in pursuance of its
obligations under the United Nations Charter for the maintenance
of international peace and security.

2. The Council for Trade in Services shall be informed to the fullest
extent possible of measures taken under paragraphs 1(b) and © and of their
termination.

Article XV

Subsidies

1. Members recognize that, in certain circumstances, subsidies may have
distortive effects on trade in services. Members shall enter into
negotiations with a view to developing the necessary multilateral
disciplines to avoid such trade distortive effects.[8] The negotiations
shall also address the appropriateness of countervailing procedures. Such
negotiations shall recognize the role of subsidies in relation to the
development programmes of developing countries and take into account the
needs of Members, particularly developing country Members, for flexibility
in this area. For the purpose of such negotiations, Members shall exchange
information concerning all subsidies related to trade in services that they
provide to their domestic service suppliers.

2. Any Member which considers that it is adversely affected by a subsidy
of another Member may request consultations with that Member on such
matters. Such requests shall be accorded sympathetic consideration.
PART III

SPECIFIC COMMITMENTS

Article XVI

Market Access

1. With respect to market access through the modes of supply identified
in Article I, each Member shall accord services and service suppliers of any
other Member treatment no less favourable than that provided for under the
terms, limitations and conditions agreed and specified in its schedule.[9]

2. In sectors where market access commitments are undertaken, the
measures which a Member shall not maintain or adopt either on the basis of a
regional subdivision or on the basis of its entire territory, unless
otherwise specified in its schedule, are defined as:

(a) limitations on the number of service suppliers whether in the
form of numerical quotas, monopolies, exclusive service suppliers
or the requirements of an economic needs test;

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

© limitations on the total number of service operations or on the
total quantity of service output expressed in terms of designated
numerical units in the form of quotas or the requirement of an
economic needs test;[10]

(d) limitations on the total number of natural persons that may be
employed in a particular service sector or that a service
supplier may employ and who are necessary for, and directly
related to, the supply of a specific service in the form of
numerical quotas or the requirement of an economic needs test;

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

(f) limitations on the participation of foreign capital in terms of
maximum percentage limit on foreign shareholding or the total
value of individual or aggregate foreign investment.


Article XVII

National Treatment

1. In the sectors inscribed in its schedule, and subject to any
conditions and qualifications set out therein, each Member shall accord to
services and service suppliers of any other Member, in respect of all
measures affecting the supply of services, treatment no less favourable than
that it accords to its own like services and service suppliers.[11]

2. A Member may meet the requirement of paragraph 1 by according to
services and service suppliers of any other Member, either formally
identical treatment or formally different treatment to that it accords to
its own like services and service suppliers.

3. Formally identical or formally different treatment shall be considered
to be less favourable if it modifies the conditions of competition in favour
of services or service suppliers of the Member compared to like services or
service suppliers of any other Member.

Article XVIII

Additional Commitments

Members may negotiate commitments with respect to measures affecting
trade in services not subject to scheduling under Articles XVI or XVII,
including those regarding qualifications, standards or licensing matters.
Such commitments shall be inscribed in a Member's schedule.


PART IV

PROGRESSIVE LIBERALIZATION

Article XIX

Negotiation of Specific Commitments

1. In pursuance of the objectives of this Agreement, Members shall enter
into successive rounds of negotiations, beginning not later than five years
from the date of entry into force of the Agreement Establishing the MTO and
periodically thereafter, with a view to achieving a progressively higher
level of liberalization. Such negotiations shall be directed to the
reduction or elimination of the adverse effects on trade in services of
measures as a means of providing effective market access. This process
shall take place with a view to promoting the interests of all participants
on a mutually advantageous basis and to securing an overall balance of
rights and obligations.

2. The process of liberalization shall take place with due respect for
national policy objectives and the level of development of individual
Members, both overall and in individual sectors. There shall be appropriate
flexibility for individual developing countries for opening fewer sectors,
liberalizing fewer types of transactions, progressively extending market
access in line with their development situation and, when making access to
their markets available to foreign service suppliers, attaching to it
conditions aimed at achieving the objectives referred to in Article IV.

3. For each round, negotiating guidelines and procedures shall be
established. For the purposes of establishing such guidelines, the Council
for Trade in Services shall carry out an assessment of trade in services in
overall terms and on a sectoral basis with reference to the objectives of
the Agreement, including those set out in paragraph 1 of Article IV.
Negotiating guidelines shall establish modalities for the treatment of
liberalization undertaken autonomously by Members since previous
negotiations, as well as for the special treatment of the least-developed
countries under the provisions of paragraph 3 of Article IV.

4. The process of progressive liberalization shall be advanced in each
such round through bilateral, plurilateral or multilateral negotiations
directed towards increasing the general level of specific commitments
undertaken by Members under this Agreement.

Article XX

Schedules of Specific Commitments

1. Each Member shall set out in a schedule the specific commitments it
undertakes under Part III of this Agreement. With respect to sectors where
such commitments are undertaken, each schedule shall specify:

(a) terms, limitations and conditions on market access;

(b) conditions and qualifications on national treatment;

© undertakings relating to additional commitments;

(d) where appropriate the time-frame for implementation of such
commitments; and

(e) date of entry into force of such commitments.

2. Measures inconsistent with both Articles XVI and XVII shall be
inscribed in the column relating to Article XVI. In this case the
inscription will be considered to provide a condition or qualification to
Article XVII as well.

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


Article XXI

Modification of Schedules

1. (a) A Member (hereafter in this Article referred to as the "modifying
Member") may modify or withdraw any commitment in its schedule,
at any time after three years have elapsed from the date on which
that commitment entered into force, in accordance with the
provisions of this Article.

(b) A modifying Member shall notify its intent to modify or withdraw
a commitment pursuant to this Article to the Council for Trade in
Services no later than three months before the intended date of
implementation of the modification or withdrawal.

2. (a) At the request of any Member whose benefits under this Agreement
may be affected (hereafter "an affected Member") by a proposed
modification or withdrawal notified under paragraph 1(b), the
modifying Member shall enter into negotiations with a view to
reaching agreement on any necessary compensatory adjustment. In
such negotiations and agreement, the Members concerned shall
endeavour to maintain a general level of mutually advantageous
commitments not less favourable to trade than that provided for
in schedules of specific commitments prior to such negotiations.

(b) Compensatory adjustments shall be made on a most-favoured-nation
basis.

3. (a) If agreement is not reached between the modifying Member and any
affected Member before the end of the period provided for
negotiations, such affected Member may refer the matter to
arbitration. Any affected Member that wishes to enforce a right
that it may have to compensation must participate in the
arbitration.

(b) If no affected Member has requested arbitration, the modifying
Member shall be free to implement the proposed modification or
withdrawal.

4. (a) The modifying Member may not modify or withdraw its commitment
until it has made compensatory adjustments in conformity with the
findings of the arbitration.

(b) If the modifying Member implements its proposed modification or
withdrawal and does not comply with the findings 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.

5. The Council for Trade in Services shall establish procedures for
rectification or modification of schedules of commitments. Any Member which
has modified or withdrawn scheduled commitments under this Article shall
modify its schedule according to such procedures.



PART V

INSTITUTIONAL PROVISIONS

Article XXII

Consultation

1. Each Member shall accord sympathetic consideration to, and shall
afford adequate opportunity for, consultation regarding such representations
as may be made by any other Member with respect to any matter affecting the
operation of this Agreement. The Understanding on Rules and Procedures
Governing the Settlement of Disputes shall apply to such consultations.

2. The Council for Trade in Services or the Dispute Settlement Body (DSB)
may, at the request of a Member, consult with any Member or Members in
respect of any matter for which it has not been possible to find a
satisfactory solution through consultation under paragraph 1.

3. A Member may not invoke Article XVII, either under this Article or
Article XXIII, with respect to a measure of another Member that falls within
the scope of an international agreement between them relating to the
avoidance of double taxation. In case of disagreement between Members as to
whether a measure falls within the scope of such an agreement between them,
it shall be open to either Member to bring this matter before the Council
for Trade in Services.[12] The Council shall refer the matter to
arbitration. The decision of the arbitrator shall be final and binding on
the Members.

Article XXIII

Dispute Settlement and Enforcement

1. If any Member should consider that any other Member fails to carry out
its obligations or specific commitments under this Agreement, it may with a
view to reaching a mutually satisfactory resolution of the matter, have
recourse to the Understanding on Rules and Procedures Governing the
Settlement of Disputes.

2. If the DSB considers that the circumstances are serious enough to
justify such action, it may authorize a Member or Members to suspend the
application to any other Member or Members of such obligations and specific
commitments in accordance with Section 22 (Compensation and the Suspension
of Concessions) of the Understanding on Rules and Procedures Governing the
Settlement of Disputes.

3. If any Member considers that any benefit it could reasonably have
expected to accrue to it under a specific commitment of another Member under
Part III of this Agreement is being nullified or impaired as a result of the
application of any measure which does not conflict with the provisions of
this Agreement, it may have recourse to the Understanding on Rules and
Procedures Governing the Settlement of Disputes. If the measure is
determined by the DSB to have nullified or impaired such a benefit, the
Member affected shall be entitled to a mutually satisfactory adjustment on
the basis of paragraph 2 of Article XXI, which may include the modification
or withdrawal of the measure. In the event an agreement cannot be reached
between the Members concerned, Section 22 (Compensation and the Suspension
of Concessions) of the Understanding on Rules and Procedures Governing the
Settlement of Disputes shall apply.



Article XXIV

Council for Trade in Services

1. The Council for Trade in Services shall carry out such functions as
may be assigned to it to facilitate the operation of this Agreement and
further its objectives. The Council may establish such subsidiary bodies as
it considers appropriate for the effective discharge of its functions.

2. The Council and, unless the Council decides otherwise, its subsidiary
bodies shall be open to participation by representatives of all Members.

3. The Chairman of the Council shall be elected by the Members. The
Council shall establish its own rules of procedure.

Article XXV

Technical Cooperation

1. Service suppliers of Members which are in need of such assistance
shall have access to the services of contact points referred to in paragraph
2 of Article IV.

2. Technical assistance to developing countries shall be provided at the
multilateral level by the MTO Secretariat and shall be decided upon by the
Council for Trade in Services.

Article XXVI

Relationship with Other International Organizations

The General Council shall make appropriate arrangements for
consultation and cooperation with the United Nations and its specialized
agencies as well as with other intergovernmental organizations concerned
with services.


PART VI

FINAL PROVISIONS

Article XXVII

Denial of Benefits

A Member may deny the benefits of this Agreement:

(a) to the supply of a service, if it establishes that the service is
supplied from the territory of a non-Member, or in the territory
of a Member to which the denying Member does not apply this
Agreement;

(b) in the case of the supply of a maritime transport service, if it
establishes that the service is supplied:

(i) by a vessel registered under the laws of a non-Member or
of a Member to which the denying Member does not apply
this Agreement, and

(ii) by a person which operates and/or uses the vessel in whole
or in part but which is of a non-Member or of a Member to
which the denying Member does not apply this Agreement;

© to a service supplier that is a juridical person, if it
establishes that it is not a service supplier of another Member,
or that it is a service supplier of a Member to which the denying
Member does not apply this Agreement.


Article XXVIII

Definitions

For the purpose of this Agreement:

(a) "measure" means any measure by a Member, whether in the form of a
law, regulation, rule, procedure, decision, administrative
action, or any other form;

(b) "supply of a service" includes the production, distribution,
marketing, sale and delivery of a service;

© "measures by Members affecting trade in services" include
measures in respect of

(i) the purchase, payment or use of a service,

(ii) the access to and use of, in connection with the supply of
a service, services which are required by those Members to
be offered to the public generally;

(iii) the presence, including commercial presence, of persons of
a Member for the supply of a service in the territory of
another Member;

(d) "commercial presence" means any type of business or professional
establishment, including through

(i) the constitution, acquisition or maintenance of a
juridical person, or

(ii) the creation or maintenance of a branch or a
representative office,

within the territory of a Member for the purpose of supplying a
service.

(e) "sector" of a service means,

(i) with reference to a specific commitment, one or more, or
all, sub-sectors of that service, as specified in a
Member's schedule,

(ii) otherwise, the whole of that service sector, including all
of its sub-sectors;

(f) "service of another Member" means a service which is supplied,

(i) from or in the territory of that other Member, or in the
case of maritime transport, by a vessel registered under
the laws of that other Member, or by a person of that
other Member which supplies the service through the
operation of a vessel and/or its use in whole or in part,
or

(ii) in the case of the supply of a service through commercial
presence or through the presence of natural persons, by a
service supplier of that other Member;

(g) "service supplier" means any person that supplies a service;[13]

(h) "monopoly supplier of a service" means any person, public or
private, which in the relevant market of the territory of a
Member is authorized or established formally or in effect by that
Member as the sole supplier of that service;

(i) "service consumer" means any person that receives or uses a
service;

(j) "person" means either a natural person or a juridical person;

(k) "natural person of another Member" means a natural person who
resides in the territory of that other Member or any other
Member, and who under the law of that other Member.

(i) is a national of that other Member, or

(ii) has the right of permanent residence in that other Member,
in the case of a Member which

1. does not have nationals, or

2. accords substantially the same treatment to its
permanent residents as it does to its nationals in
respect of measures affecting trade in services, as
notified in its acceptance or accession to this
Agreement, provided that no Member is obligated to
accord to such permanent residents treatment more
favourable than would be accorded by that other
Member to such permanent residents. Such notification
shall include the assurance to assume, with respect
to those permanent residents, in accordance with its
laws and regulations, the same responsibilities that
other Member bears with respect to its nationals.

(l) "juridical person" means any legal entity duly constituted or
otherwise organized under applicable law, whether for profit or
otherwise, and whether privately-owned or governmentally-owned,
including any corporation, trust, partnership, joint venture,
sole proprietorship or association;

(m) "juridical person of another Member" means a juridical person
which is either

(i) constituted or otherwise organized under the law of that
other Member, and is engaged in substantive business
operations in the territory of that Member or any other
Member; or

(ii) in the case of the supply of a service through commercial
presence, owned or controlled by

1. natural persons of that Member, or

2. juridical persons of that other Member identified
under sub-paragraph (i);

(n) A juridical person is

(i) "owned" by persons of a Member if more than 50 per cent of
the equity interest in it is beneficially owned by persons
of that Member;

(ii) "controlled" by persons of a Member if such persons have
the power to name a majority of its directors or otherwise
to legally direct its actions;

(iii) "affiliated" with another person when it controls, or is
controlled by, that other person; or when it and the
other person are both controlled by the same person.


Article XXIX

Annexes

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

ANNEX ON ARTICLE II EXEMPTIONS

Scope

1. This Annex specifies the conditions under which a Member, at the entry
into force of this Agreement, is exempted from its obligations under
paragraph 1 of Article II.

2. Any new exemptions applied for after the entry into force of the
Agreement Establishing the MTO shall be dealt with under paragraph 3 of
Article IX of that Agreement.

Review

3. The Council for Trade in Services shall review all exemptions granted
for a period of more than 5 years. The first such review shall take place
no more than 5 years after the entry into force of the Agreement
Establishing the MTO.

4. The Council for Trade in Services in a review shall:

(a) examine whether the conditions which created the need for the
exemption still prevail; and

(b) determine the date of any further review.

Termination

5. The exemption of a Member from its obligations under paragraph 1 of
Article II of the Agreement with respect to a particular measure terminates
on the date provided for in the exemption.

6. In principle, such exemptions should not exceed the period of 10
years. In any event, they shall be subject to negotiation in subsequent
trade liberalizing rounds.

7. A Member shall notify the Council for Trade in Services at the
termination of the exemption period that the inconsistent measure has been
brought into conformity with paragraph 1 of Article II of the Agreement.


ANNEX ON MOVEMENT OF NATURAL PERSONS
SUPPLYING SERVICES UNDER THE AGREEMENT

1. The Annex applies to measures affecting natural persons who are
service suppliers of a Member, and to natural persons of a Member who are
employed by a service supplier of a Member, in respect of the supply of a
service for which specific commitments relating to entry and temporary stay
of such natural persons have been undertaken.

2. The Agreement shall not apply to measures affecting natural persons
seeking access to the employment market of a Member, nor shall it apply to
measures regarding citizenship, residence or employment on a permanent
basis.

3. In accordance with Parts III and IV of the Agreement, Members may
negotiate specific commitments applying to the movement of all categories
of natural persons supplying services under the Agreement. Natural persons
covered by a specific commitment shall be allowed to supply the service in
accordance with the terms of that commitment.

4. The Agreement shall not prevent a Member from applying measures to
regulate the entry of natural persons into, or their temporary stay in, its
territory, including those necessary to protect the integrity of, and to
ensure the orderly movement of natural persons across, its borders, provided
that such measures are not applied in such a manner as to nullify or impair
the benefits accruing to any Member under the terms of a specific
commitment.[14]

ANNEX ON FINANCIAL SERVICES

1. Scope and Definition

1.1 This annex applies to measures affecting the supply of financial
services. Reference to the supply of a financial service in the Annex shall
mean the supply of a service as defined in paragraph 2 of Article I of the
Agreement.

1.2 For the purposes of paragraph 3(b) of Article I of the Agreement,
"services supplied in the exercise of governmental authority" means the
following:

1.2.1activities conducted by a central bank or monetary authority or
by any other public entity in pursuit of monetary or exchange
rate policies;

1.2.2activities forming part of a statutory system of social security
or public retirement plans; and

1.2.3other activities conducted by a public entity for the account or
with the guarantee or using the financial resources of the
Government.

1.3 For the purposes of paragraph 3(b) Article I of the Agreement, if a
Member allows any of the activities referred to in paragraph 1.2.2 or 1.2.3
to be conducted by its financial service suppliers in competition with a
public entity or a financial service supplier, "services" shall include such
activities.

1.4 Article I:3© of the Agreement shall not apply to services covered by
this Annex.

2. Domestic Regulation

2.1 Notwithstanding any other provisions of the Agreement, a Member shall
not be prevented from taking measures for prudential reasons, including for
the protection of investors, depositors, policy holders or persons to whom a
fiduciary duty is owed by a financial service supplier, or to ensure the
integrity and stability of the financial system. Where such measures do not
conform with the provisions of the Agreement, they shall not be used as a
means of avoiding the Member's commitments or obligations under the
Agreement.

2.2 Nothing in the Agreement shall be construed to require a Member to
disclose information relating to the affairs and accounts of individual
customers or any confidential or proprietary information in the possession
of public entities.

3. Recognition

3.1 A Member may recognize prudential measures of any other country in
determining how the Member's measures relating to financial services shall
be applied. Such recognition, which may be achieved through harmonization
or otherwise, may be based upon an agreement or arrangement with the country
concerned or may be accorded autonomously.

3.2 A Member that is a party to such an agreement or arrangement referred
to in paragraph 3.1, whether future or existing, shall afford adequate
opportunity for other interested Members to negotiate their accession to
such agreements or arrangements, or to negotiate comparable ones with it,
under circumstances in which there would be equivalent regulation,
oversight, implementation of such regulation, and, if appropriate,
procedures concerning the sharing of information between the parties to the
agreement or arrangement. Where a Member accords recognition autonomously,
it shall afford adequate opportunity for any other Member to demonstrate
that such circumstances exist.

3.3 Where a Member is contemplating according recognition to prudential
measures of any other country, paragraph 4(b) of Article VII of the
Agreement shall not apply.

4. Dispute Settlement

4.1 Panels for disputes on prudential issues and other financial matters
shall have the necessary expertise relevant to the specific financial
service under dispute.

5. Definitions

For the purposes of this Annex:

5.1 A financial service is any service of a financial nature offered by a
financial service supplier of a Member. Financial services include all
insurance and insurance-related services, and all banking and other
financial services (excluding insurance). Financial services include the
following activities:

Insurance and insurance-related services

(a) Direct insurance (including co-insurance):

(i) life

(ii) non-life

(b) Reinsurance and retrocession;

© Insurance intermediation, such as brokerage and agency;

(d) Services auxiliary to insurance, such as consultancy, actuarial,
risk assessment and claim settlement services.

Banking and other financial services (excluding insurance)

(e) Acceptance of deposits and other repayable funds from the public;

(f) Lending of all types, including consumer credit, mortgage,
credit, factoring and financing of commercial transaction;

(g) Financial leasing;

(h) All payment and money transmission services, including credit,
charge and debit cards, travellers cheques and bankers drafts;

(i) Guarantees and commitments;

(j) Trading for own account or for account of customers, whether on
an exchange, in an over-the-counter market or otherwise, the
following:

(i) money market instruments (including cheques, bills,
certificates of deposits);

(ii) foreign exchange;

(iii) derivative products including, but not limited to, futures
and options;

(iv) exchange rate and interest rate instruments, including
products such as swaps, forward rate agreements;

(v) transferable securities;

(vi) other negotiable instruments and financial assets,
including bullion.

(k) Participation in issues of all kinds of securities, including
underwriting and placement as agent (whether publicly or
privately) and provision of services related to such issues;

(l) Money broking;

(m) Asset management, such as cash or portfolio management, all forms
of collective investment management, pension fund management,
custodial, depository and trust services;

(n) Settlement and clearing services for financial assets, including
securities, derivative products, and other negotiable
instruments;

(o) Provision and transfer of financial information, and financial
data processing and related software by suppliers of other
financial services;

(p) Advisory, intermediation and other auxiliary financial services
on all the activities listed in sub-paragraphs (e) to (o),
including credit reference and analysis, investment and portfolio
research and advice, advice on acquisitions and on corporate
restructuring and strategy.

5.2 A financial service supplier means any natural or juridical person of
a Member wishing to supply or supplying financial services but the term
"financial service supplier" does not include a public entity.

5.3 "Public entity" means:

5.3.1a government, a central bank or a monetary authority, of a
Member, or an entity owned or controlled by a Member, that is
principally engaged in carrying out governmental functions or
activities for governmental purposes, not including an entity
principally engaged in supplying financial services on commercial
terms; or

5.3.2a private entity, performing functions normally performed by a
central bank or monetary authority, when exercising those
functions.

5.4 "Agreement" means the Articles of the General Agreement on Trade in
Services, this Sectoral Annex on Financial Services and the schedule of each
Party with respect to financial services.

SECOND ANNEX ON FINANCIAL SERVICES

1. Notwithstanding Article II of the General Agreement on Trade in
Services and paragraphs 1 and 2 of the Annex on Article II Exemptions, a
Member may, during a period of 60 days beginning four months after the date
of entry into force of the Agreement Establishing the MTO, list in that
Annex measures relating to Financial Services which are inconsistent with
paragraph 1 of Article II of the Agreement.

2. Notwithstanding Article XXI of the General Agreement on Trade in
Services, a Member may, during a period of 60 days beginning four months
after the date of entry into force of the Agreement Establishing the MTO,
improve, modify or withdraw all or part of the commitments on Financial
Services inscribed in its schedule.

3. The Council for Trade in Services shall establish any procedures
necessary for the application of paragraphs 1 and 2.
ANNEX ON TELECOMMUNICATIONS

1. Objectives

1.1 Recognizing the specificities of the telecommunications services
sector and, in particular, its dual role as a distinct sector of economic
activity and as the underlying transport means for other economic
activities, the Members have agreed to the following Annex with the
objective of elaborating upon the provisions of the Agreement with respect
to measures affecting access to and use of public telecommunications
transport networks and services. Accordingly, this Annex provides notes and
supplementary provisions to the Agreement.

2. Scope

2.1 This Annex shall apply to all measures of a Member that affect access
to and use of public telecommunications transport networks and services.[15]

2.2 This Annex shall not apply to measures affecting the cable or
broadcast distribution of radio or television programming.

2.3 Nothing in this Annex shall be construed:

2.3.1to require a Member to authorize a service supplier of any other
Member to establish, construct, acquire, lease, operate, or
supply telecommunications transport networks or services, other
than as provided for in its schedule; or

2.3.2to require a Member (or to require a Member to oblige service
suppliers under its jurisdiction) to establish, construct,
acquire, lease, operate or supply telecommunications transport
networks or services not offered to the public generally.

3. Definitions

For the purposes of this Annex:

3.1 Telecommunications means the transmission and reception of signals by
any electromagnetic means.

3.2 Public telecommunications transport service means any
telecommunications transport service required, explicitly or in effect, by a
Member to be offered to the public generally. Such services may include,
inter alia, telegraph, telephone, telex, and data transmission typically
involving the real-time transmission of customer-supplied information
between two or more points without any end-to-end change in the form or
content of the customer's information.

3.3 Public telecommunications transport network means the public
telecommunications infrastructure which permits telecommunications between
and among defined network termination points.

3.4 Intra-corporate communications means telecommunications through which
a company communicates within the company or with or among its subsidiaries,
branches and, subject to a Member's domestic laws and regulations,
affiliates. For these purposes, "subsidiaries", "branches" and, where
applicable, "affiliates" shall be as defined by each Party Member.
"Intra-corporate communications" in this Annex excludes commercial or
non-commercial services that are supplied to companies that are not related
subsidiaries, branches or affiliates, or that are offered to customers or
potential customers.

3.5 Any reference to a paragraph or subparagraph of this Annex includes
all subdivisions thereof.

4. Transparency

4.1 In the application of Article III of the Agreement, each Member shall
ensure that relevant information on conditions affecting access to and use
of public telecommunications transport networks and services is publicly
available, including: tariffs and other terms and conditions of service;
specifications of technical interfaces with such networks and services;
information on bodies responsible for the preparation and adoption of
standards affecting such access and use; conditions applying to attachment
of terminal or other equipment; and notifications, registration or licensing
requirements, if any.

5. Access to and use of Public Telecommunications Transport Networks and
Services

5.1 Each Member shall ensure that any service supplier of any other Member
is accorded access to and use of public telecommunications transport
networks and services on reasonable and non-discriminatory terms and
conditions, for the supply of a service included in its schedule. This
obligation shall be applied, inter alia, through paragraphs 5.2 through 5.6
below.[16]

5.2 Each Member shall ensure that service suppliers of any other Member
have access to and use of any public telecommunications transport network or
service offered within or across the border of that Member, including
private leased circuits, and to this end shall ensure, subject to paragraphs
5.5 and 5.6, that such suppliers are permitted:

5.2.1to purchase or lease and attach terminal or other equipment which
interfaces with the network and which is necessary to supply a
supplier's services;

5.2.2to interconnect private leased or owned circuits with public
telecommunications transport networks and services or with
circuits leased or owned by another service supplier; and

5.2.3to use operating protocols of the service supplier's choice in
the supply of any service, other than as necessary to ensure the
availability of telecommunications transport networks and
services to the public generally.

5.3 Each Member shall ensure that service suppliers of any other Member
may use public telecommunications transport networks and services for the
movement of information within and across borders, including for
intra-corporate communications of such service suppliers, and for access to
information contained in data bases or otherwise stored in machine-readable
form in the territory of any Member. Any new or amended measures of a
Member significantly affecting such use shall be notified and shall be
subject to consultation, in accordance with relevant provisions of the
Agreement.

5.4 Notwithstanding the preceding paragraph, a Member may take such
measures as are necessary to ensure the security and confidentiality of
messages, subject to the requirement that such measures are not applied in a
manner which would constitute a means of arbitrary or unjustifiable
discrimination or a disguised restriction on trade in services.

5.5 Each Member shall ensure that no condition is imposed on access to and
use of public telecommunications transport networks and services other than
as necessary:

5.5.1to safeguard the public service responsibilities of suppliers of
public telecommunications transport networks and services, in
particular their ability to make their networks or services
available to the public generally;

5.5.2to protect the technical integrity of public telecommunications
transport networks or services; or

5.5.3to ensure that service suppliers of any other Member do not
supply services unless permitted pursuant to commitments in a
Member's schedule.

5.6 Provided that they satisfy the criteria set out in paragraph 5.5,
conditions for access to and use of public telecommunications transport
networks and services may include:

5.6.1restrictions on resale or shared use of such services;

5.6.2a requirement to use specified technical interfaces, including
interface protocols, for inter-connection with such networks and
services;

5.6.3requirements, where necessary, for the inter-operability of such
services and to encourage the achievement of the goals set out in
paragraph 7.1;

5.6.4type approval of terminal or other equipment which interfaces
with the network and technical requirements relating to the
attachment of such equipment to such networks;

5.6.5restrictions on inter-connection of private leased or owned
circuits with such networks or services or with circuits leased
or owned by another service supplier; or

5.6.6notification, registration and licensing.

5.7 Notwithstanding the preceding paragraphs of this section, a developing
Member may, consistent with its level of development, place reasonable
conditions on access to and use of public telecommunications transport
networks and services necessary to strengthen its domestic
telecommunications infrastructure and service capacity and to increase its
participation in international trade in telecommunications services. Such
conditions shall be specified in the Member's schedule.

6. Technical Co-operation

6.1 Members recognize that an efficient, advanced telecommunications
infrastructure in countries, particularly developing countries, is essential
to the expansion of their trade in services. To this end, Members endorse
and encourage the participation, to the fullest extent practicable, of
developed and developing countries and their suppliers of public
telecommunications transport networks and services and other entities in the
development programmes of international and regional organizations,
including the International Telecommunication Union, the United Nations
Development Programme, and the International Bank for Reconstruction and
Development.

6.2 Members shall encourage and support telecommunications co-operation
among developing countries at the international, regional and sub-regional
levels.

6.3 In co-operation with relevant international organizations, Members
shall make available, where practicable, to developing countries information
with respect to telecommunications services and developments in
telecommunications and information technology to assist in strengthening
their domestic telecommunications services sector.

6.4 Members shall give special consideration to opportunities for the
least developed countries to encourage foreign suppliers of
telecommunications services to assist in the transfer of technology,
training and other activities that support the development of their
telecommunications infrastructure and expansion of their telecommunications
services trade.

7. Relation to International Organizations and Agreements

7.1 Members recognize the importance of international standards for global
compatibility and inter-operability of telecommunication networks and
services and undertake to promote such standards through the work of
relevant international bodies, including the International Telecommunication
Union and the International Organization for Standardization.

7.2 Members recognize the role played by intergovernmental and
non-governmental organizations and agreements in ensuring the efficient
operation of domestic and global telecommunications services, in particular
the International Telecommunication Union. Members shall make appropriate
arrangements, where relevant, for consultation with such organizations on
matters arising from the implementation of this Annex.





ANNEX ON AIR TRANSPORT SERVICES

1. This Annex applies to measures affecting trade in air transport
services, whether scheduled or non-scheduled, and ancillary services. It is
confirmed that any specific commitment made or obligation assumed under this
Agreement shall not reduce or affect a Member's obligations under bilateral
or multilateral agreements that are in effect at the entry into force of the
Agreement Establishing the MTO.

2. The Agreement, including its dispute settlement procedures, shall not
apply to measures affecting:

(a) traffic rights, however granted; or

(b) services directly related to the exercise of traffic rights,

except as provided in paragraph 3 of this Annex.

3. The Agreement shall apply to measures affecting:

(a) aircraft repair and maintenance services;

(b) the selling and marketing of air transport services;

© computer reservation system (CRS) services.

4. The dispute settlement procedures of the Agreement may be invoked only
where obligations or commitments have been assumed by the concerned Members
and where dispute settlement procedures in bilateral and other multilateral
arrangements have been exhausted.

5. The Council for Trade in Services shall review periodically, and at
least every five years, developments in the air transport sector and the
operation of this Annex with a view to considering the possible further
application of the Agreement in this sector.

6. Definitions:

(a) "aircraft repair and maintenance services" mean such activities
when undertaken on an aircraft or a part thereof while it is
withdrawn from service and do not include so-called line
maintenance.

(b) "selling and marketing of air transport services" mean
opportunities for the air carrier concerned to sell and market
freely its air transport services including all aspects of
marketing such as market research, advertising and distribution.
These activities do not include the pricing of air transport
services nor the applicable conditions.

© "computer reservation system (CRS) services" mean services
provided by computerised systems that contain information about
air carriers' schedules, availability, fares and fare rules,
through which reservations can be made or tickets may be issued.

(d) "traffic rights" mean the right for scheduled and non-scheduled
services to operate and/or to carry passengers, cargo and mail
for remuneration or hire from, to, within, or over the territory
of a Member, including points to be served, routes to be
operated, types of traffic to be carried, capacity to be
provided, tariffs to be charged and their conditions, and
criteria for designation of airlines, including such criteria as
number, ownership, and control.
ANNEX ON NEGOTIATIONS ON BASIC TELECOMMUNICATIONS

1. Notwithstanding paragraph 1 of Article II of the GATS and paragraph 2
of the Annex on Article II Exemptions, Article II and the Annex on Article
II Exemptions, including the requirement to list in the Annex any measure
inconsistent with most-favoured-nation treatment that a Member will
maintain, shall enter into force for basic telecommunications only on:

(a) the date of implementation of the results of the negotiations
mandated by the Ministerial Decision on Negotiations on Basic
Telecommunications; or,

(b) should the negotiations not succeed, on the date of the final
report of the Negotiating Group on Basic Telecommunications.

2. Paragraph 1 above shall not apply to any specific commitment on basic
telecommunications which is inscribed in a Member's schedule.

3. References to the dates cited under paragraphs 1(a) and (b) above are
contained in paragraph 5 of the Ministerial Decision on Negotiations on
Basic Telecommunications.

1. This condition is understood in terms of number of sectors, volume of
trade affected and modes of supply. In order to meet this condition,
agreements should not provide for the a priori exclusion of any mode of
supply.

2. Typically, such integration provides citizens of the parties concerned
with a right of free entry to the employment markets of the parties and
includes measures concerning conditions of pay, other conditions of
employment and social benefits.

3. The term "relevant international organizations" refers to international
bodies whose membership is open to the relevant bodies of at least all
Members of the MTO.

4. It is understood that the procedures under paragraph 5 shall be the same
as the GATT 1994 procedures.

5. The public order exception may be invoked only where a genuine and
sufficiently serious threat is posed to one of the fundamental interests of
society.

6. Measures that are aimed at ensuring the equitable or effective imposition
or collection of direct taxes include measures taken by a Member under its
taxation system which:

- apply to non-resident service suppliers in recognition of the
fact that the tax obligation of non-residents is determined with
respect to taxable items sourced or located in the Member's
territory; or

- apply to non-residents in order to ensure the imposition or
collection of taxes in the Member's territory; or

- apply to non-residents or residents in order to prevent the
avoidance or evasion of taxes, including compliance measures; or

- apply to consumers of services supplied in or from the territory
of another Member in order to ensure the imposition or collection
of taxes on such consumers derived from sources in the Member's
territory; or

- distinguish service suppliers subject to tax on worldwide taxable
items from other service suppliers, in recognition of the
difference in the nature of the tax base between them; or

- determine, allocate or apportion income, profit, gain, loss,
deduction or credit of resident persons or branches, or between
related persons or branches of the same person, in order to
safeguard the Member's tax base.

Tax terms or concepts in Article XIV(d) and in this footnote are
determined according to tax definitions and concepts, or equivalent or
similar definitions and concepts, under the domestic law of the Member
taking the measure.

7. For the purpose of this Agreement "direct taxes" comprise all taxes on
total income, on total capital or on elements of income or of capital,
including taxes on gains from the alienation of property, taxes on estates,
inheritances and gifts, and taxes on the total amounts of wages or salaries
paid by enterprises, as well as taxes on capital appreciation.

8. A future work programme shall determine how and in what time-frame
negotiations on the multilateral disciplines will be conducted.

9. If a Member undertakes a market access commitment in relation to the
supply of a service through the mode of supply referred to in paragraph 2(a)
of Article I and if the cross-border movement of capital is an essential
part of the service itself, that Member is thereby committed to allow such
movement of capital. If a Member undertakes a market access commitment in
relation to the supply of a service through the mode of supply referred to
in paragraph 2© of Article I, it is thereby committed to allow related
transfers of capital into its territory.

10. Sub-paragraph 2© does not cover measures of a Member which limit
inputs for the supply of services.

11. Specific commitments assumed under this Article shall not be construed
to require any Member to compensate for any inherent competitive
disadvantages which result from the foreign character of the relevant
services or service suppliers.

12. With respect to agreements on the avoidance of double taxation which
exist at the time of entry into force of the Agreement Establishing the MTO,
such a matter may be brought before the Council for Trade in Services only
with the consent of both parties to the agreement.

13. Where the service is not supplied directly by a juridical person but
through other forms of commercial presence such as a branch or a
representative office, the service supplier (i.e. the juridical person)
shall, nonetheless, through such presence be accorded the treatment provided
for service suppliers under the Agreement. Such treatment shall be extended
to the presence through which the service is supplied and need not be
extended to any other parts of the supplier located outside the territory
where the service is supplied.

14. Interpretative Note: The sole fact of requiring a visa for natural
persons of certain Members and not for those of others shall not be regarded
as nullifying or impairing benefits under a specific commitment.

15. This paragraph is understood to mean that each Member shall ensure that
the obligations of this Annex are applied with respect to suppliers of
public telecommunications transport networks and services by whatever
measures are necessary.

16. The term "non-discriminatory" is understood to refer to
most-favoured-nation and national treatment as defined in the Agreement, as
well as to reflect sector-specific usage of the term to mean "terms and
conditions no less favourable than those accorded to any other user of like
public telecommunications transport networks or services under like
circumstances".


AGREEMENT ON TRADE-RELATED ASPECTS OF INTELLECTUAL PROPERTY
RIGHTS, INCLUDING TRADE IN COUNTERFEIT GOODS


TABLE OF CONTENTS


Part I: General Provisions and Basic Principles

Part II: Standards Concerning the Availability, Scope and Use of
Intellectual Property Rights

1. Copyright and Related Rights
2. Trademarks
3. Geographical Indications
4. Industrial Designs
5. Patents
6. Layout-Designs (Topographies) of Integrated Circuits
7. Protection of Undisclosed Information
8. Control of Anti-Competitive Practices in Contractual
Licences

Part III: Enforcement of Intellectual Property Rights

1. General Obligations
2. Civil and Administrative Procedures and Remedies
3. Provisional Measures
4. Special Requirements Related to Border Measures
5. Criminal Procedures

Part IV: Acquisition and Maintenance of Intellectual Property Rights and
Related Inter-Partes Procedures

Part V: Dispute Prevention and Settlement

Part VI: Transitional Arrangements

Part VII: Institutional Arrangements; Final Provisions

AGREEMENT ON TRADE-RELATED ASPECTS OF INTELLECTUAL PROPERTY
RIGHTS, INCLUDING TRADE IN COUNTERFEIT GOODS

Members,

Desiring to reduce distortions and impediments to international trade,
and taking into account the need to promote effective and adequate
protection of intellectual property rights, and to ensure that measures and
procedures to enforce intellectual property rights do not themselves become
barriers to legitimate trade;

Recognizing, to this end, the need for new rules and disciplines
concerning:

(a) the applicability of the basic principles of the GATT 1994 and of
relevant international intellectual property agreements or
conventions;

(b) the provision of adequate standards and principles concerning the
availability, scope and use of trade-related intellectual
property rights;

© the provision of effective and appropriate means for the
enforcement of trade-related intellectual property rights, taking
into account differences in national legal systems;

(d) the provision of effective and expeditious procedures for the
multilateral prevention and settlement of disputes between
governments; and

(e) transitional arrangements aiming at the fullest participation in
the results of the negotiations;

Recognizing the need for a multilateral framework of principles, rules
and disciplines dealing with international trade in counterfeit goods;

Recognizing that intellectual property rights are private rights;

Recognizing the underlying public policy objectives of national
systems for the protection of intellectual property, including developmental
and technological objectives;

Recognizing also the special needs of the least-developed country
Members in respect of maximum flexibility in the domestic implementation of
laws and regulations in order to enable them to create a sound and viable
technological base;

Emphasizing the importance of reducing tensions by reaching
strengthened commitments to resolve disputes on trade-related intellectual
property issues through multilateral procedures;

Desiring to establish a mutually supportive relationship between the
MTO and the World Intellectual Property Organization (WIPO) as well as other
relevant international organisations;

Hereby agree as follows:




PART I: GENERAL PROVISIONS AND BASIC PRINCIPLES

Article 1
Nature and Scope of Obligations

1. Members shall give effect to the provisions of this Agreement.
Members may, but shall not be obliged to, implement in their domestic law
more extensive protection than is required by this Agreement, provided that
such protection does not contravene the provisions of this Agreement.
Members shall be free to determine the appropriate method of implementing
the provisions of this Agreement within their own legal system and practice.

2. For the purposes of this Agreement, the term "intellectual property"
refers to all categories of intellectual property that are the subject of
Sections 1 to 7 of Part II.

3. Members shall accord the treatment provided for in this Agreement to
the nationals of other Members.[1] In respect of the relevant intellectual
property right, the nationals of other Members shall be understood as those
natural or legal persons that would meet the criteria for eligibility for
protection provided for in the Paris Convention (1967), the Berne Convention
(1971), the Rome Convention and the Treaty on Intellectual Property in
Respect of Integrated Circuits, were all Members of the MTO members of those
conventions.[2] Any Member availing itself of the possibilities provided in
paragraph 3 of Article 5 or paragraph 2 of Article 6 of the Rome Convention
shall make a notification as foreseen in those provisions to the Council for
Trade-Related Aspects of Intellectual Property Rights.

Article 2
Intellectual Property Conventions

1. In respect of Parts II, III and IV of this Agreement, Members shall
comply with Articles 1-12 and 19 of the Paris Convention (1967).

2. Nothing in Parts I to IV of this Agreement shall derogate from
existing obligations that Members may have to each other under the Paris
Convention, the Berne Convention, the Rome Convention and the Treaty on
Intellectual Property in Respect of Integrated Circuits.

Article 3
National Treatment

1. Each Member shall accord to the nationals of other Members treatment
no less favourable than that it accords to its own nationals with regard to
the protection[3] of intellectual property, subject to the exceptions
already provided in, respectively, the Paris Convention (1967), the Berne
Convention (1971), the Rome Convention and the Treaty on Intellectual
Property in Respect of Integrated Circuits. In respect of performers,
producers of phonograms and broadcasting organizations, this obligation only
applies in respect of the rights provided under this Agreement. Any Member
availing itself of the possibilities provided in Article 6 of the Berne
Convention and paragraph 1(b) of Article 16 of the Rome Convention shall
make a notification as foreseen in those provisions to the Council for
Trade-Related Aspects of Intellectual Property Rights.

2. Members may avail themselves of the exceptions permitted under
paragraph 1 above in relation to judicial and administrative procedures,
including the designation of an address for service or the appointment of an
agent within the jurisdiction of a Member, only where such exceptions are
necessary to secure compliance with laws and regulations which are not
inconsistent with the provisions of this Agreement and where such practices
are not applied in a manner which would constitute a disguised restriction
on trade.

Article 4
Most-Favoured-Nation Treatment

With regard to the protection of intellectual property, any advantage,
favour, privilege or immunity granted by a Member to the nationals of any
other country shall be accorded immediately and unconditionally to the
nationals of all other Members. Exempted from this obligation are any
advantage, favour, privilege or immunity accorded by a Member:

(a) deriving from international agreements on judicial assistance and
law enforcement of a general nature and not particularly confined
to the protection of intellectual property;

(b) granted in accordance with the provisions of the Berne Convention
(1971) or the Rome Convention authorizing that the treatment
accorded be a function not of national treatment but of the
treatment accorded in another country;

© in respect of the rights of performers, producers of phonograms
and broadcasting organizations not provided under this Agreement;

(d) deriving from international agreements related to the protection
of intellectual property which entered into force prior to the
entry into force of the Agreement Establishing the MTO, provided
that such agreements are notified to the Council for
Trade-Related Aspects of Intellectual Property Rights and do not
constitute an arbitrary or unjustifiable discrimination against
nationals of other Members.

Article 5
Multilateral Agreements on Acquisition or
Maintenance of Protection

The obligations under Articles 3 and 4 above do not apply to
procedures provided in multilateral agreements concluded under the auspices
of the World Intellectual Property Organization relating to the acquisition
or maintenance of intellectual property rights.

Article 6
Exhaustion

For the purposes of dispute settlement under this Agreement, subject
to the provisions of Articles 3 and 4 above nothing in this Agreement shall
be used to address the issue of the exhaustion of intellectual property
rights.

Article 7
Objectives

The protection and enforcement of intellectual property rights should
contribute to the promotion of technological innovation and to the transfer
and dissemination of technology, to the mutual advantage of producers and
users of technological knowledge and in a manner conducive to social and
economic welfare, and to a balance of rights and obligations.

Article 8
Principles

1. Members may, in formulating or amending their national laws and
regulations, adopt measures necessary to protect public health and
nutrition, and to promote the public interest in sectors of vital importance
to their socio-economic and technological development, provided that such
measures are consistent with the provisions of this Agreement.

2. Appropriate measures, provided that they are consistent with the
provisions of this Agreement, may be needed to prevent the abuse of
intellectual property rights by right holders or the resort to practices
which unreasonably restrain trade or adversely affect the international
transfer of technology.


PART II: STANDARDS CONCERNING THE AVAILABILITY, SCOPE
AND USE OF INTELLECTUAL PROPERTY RIGHTS

SECTION 1: COPYRIGHT AND RELATED RIGHTS

Article 9
Relation to Berne Convention

1. Members shall comply with Articles 1-21 and the Appendix of the Berne
Convention (1971). However, Members shall not have rights or obligations
under this Agreement in respect of the rights conferred under Article 6bis
of that Convention or of the rights derived therefrom.

2. Copyright protection shall extend to expressions and not to ideas,
procedures, methods of operation or mathematical concepts as such.

Article 10
Computer Programs and Compilations of Data

1. Computer programs, whether in source or object code, shall be
protected as literary works under the Berne Convention (1971).

2. Compilations of data or other material, whether in machine readable or
other form, which by reason of the selection or arrangement of their
contents constitute intellectual creations shall be protected as such. Such
protection, which shall not extend to the data or material itself, shall be
without prejudice to any copyright subsisting in the data or material
itself.

Article 11
Rental Rights

In respect of at least computer programs and cinematographic works, a
Member shall provide authors and their successors in title the right to
authorize or to prohibit the commercial rental to the public of originals or
copies of their copyright works. A Member shall be excepted from this
obligation in respect of cinematographic works unless such rental has led to
widespread copying of such works which is materially impairing the exclusive
right of reproduction conferred in that Member on authors and their
successors in title. In respect of computer programs, this obligation does
not apply to rentals where the program itself is not the essential object of
the rental.

Article 12
Term of Protection

Whenever the term of protection of a work, other than a photographic
work or a work of applied art, is calculated on a basis other than the life
of a natural person, such term shall be no less than fifty years from the
end of the calendar year of authorized publication, or, failing such
authorised publication within fifty years from the making of the work, fifty
years from the end of the calendar year of making.

Article 13
Limitations and Exceptions

Members shall confine limitations or exceptions to exclusive rights to
certain special cases which do not conflict with a normal exploitation of
the work and do not unreasonably prejudice the legitimate interests of the
right holder.

Article 14
Protection of Performers, Producers of Phonograms
(Sound Recordings) and Broadcasting Organizations

1. In respect of a fixation of their performance on a phonogram,
performers shall have the possibility of preventing the following acts when
undertaken without their authorization: the fixation of their unfixed
performance and the reproduction of such fixation. Performers shall also
have the possibility of preventing the following acts when undertaken
without their authorization: the broadcasting by wireless means and the
communication to the public of their live performance.

2. Producers of phonograms shall enjoy the right to authorize or prohibit
the direct or indirect reproduction of their phonograms.

3. Broadcasting organizations shall have the right to prohibit the
following acts when undertaken without their authorization: the fixation,
the reproduction of fixations, and the rebroadcasting by wireless means of
broadcasts, as well as the communication to the public of television
broadcasts of the same. Where Members do not grant such rights to
broadcasting organizations, they shall provide owners of copyright in the
subject matter of broadcasts with the possibility of preventing the above
acts, subject to the provisions of the Berne Convention (1971).

4. The provisions of Article 11 in respect of computer programs shall
apply mutatis mutandis to producers of phonograms and any other right
holders in phonograms as determined in domestic law. If, on the date of the
Ministerial Meeting concluding the Uruguay Round of Multilateral Trade
Negotiations, a Member has in force a system of equitable remuneration of
right holders in respect of the rental of phonograms, it may maintain such
system provided that the commercial rental of phonograms is not giving rise
to the material impairment of the exclusive rights of reproduction of right
holders.

5. The term of the protection available under this Agreement to
performers and producers of phonograms shall last at least until the end of
a period of fifty years computed from the end of the calendar year in which
the fixation was made or the performance took place. The term of
protection granted pursuant to paragraph 3 above shall last for at least
twenty years from the end of the calendar year in which the broadcast took
place.

6. Any Member may, in relation to the rights conferred under paragraphs
1-3 above, provide for conditions, limitations, exceptions and reservations
to the extent permitted by the Rome Convention. However, the provisions of
Article 18 of the Berne Convention (1971) shall also apply, mutatis
mutandis, to the rights of performers and producers of phonograms in
phonograms.

SECTION 2: TRADEMARKS

Article 15
Protectable Subject Matter

1. Any sign, or any combination of signs, capable of distinguishing the
goods or services of one undertaking from those of other undertakings, shall
be capable of constituting a trademark. Such signs, in particular words
including personal names, letters, numerals, figurative elements and
combinations of colours as well as any combination of such signs, shall be
eligible for registration as trademarks. Where signs are not inherently
capable of distinguishing the relevant goods or services, Members may make
registrability depend on distinctiveness acquired through use. Members may
require, as a condition of registration, that signs be visually perceptible.

2. Paragraph 1 above shall not be understood to prevent a Member from
denying registration of a trademark on other grounds, provided that they do
not derogate from the provisions of the Paris Convention (1967).

3. Members may make registrability depend on use. However, actual use of
a trademark shall not be a condition for filing an application for
registration. An application shall not be refused solely on the ground
that intended use has not taken place before the expiry of a period of three
years from the date of application.

4. The nature of the goods or services to which a trademark is to be
applied shall in no case form an obstacle to registration of the trademark.

5. Members shall publish each trademark either before it is registered or
promptly after it is registered and shall afford a reasonable opportunity
for petitions to cancel the registration. In addition, Members may afford
an opportunity for the registration of a trademark to be opposed.

Article 16
Rights Conferred

1. The owner of a registered trademark shall have the exclusive right to
prevent all third parties not having his consent from using in the course of
trade identical or similar signs for goods or services which are identical
or similar to those in respect of which the trademark is registered where
such use would result in a likelihood of confusion. In case of the use of
an identical sign for identical goods or services, a likelihood of confusion
shall be presumed. The rights described above shall not prejudice any
existing prior rights, nor shall they affect the possibility of Members
making rights available on the basis of use.

2. Article 6bis of the Paris Convention (1967) shall apply, mutatis
mutandis, to services. In determining whether a trademark is well-known,
account shall be taken of the knowledge of the trademark in the relevant
sector of the public, including knowledge in that Member obtained as a
result of the promotion of the trademark.

3. Article 6bis of the Paris Convention (1967) shall apply, mutatis
mutandis, to goods or services which are not similar to those in respect of
which a trademark is registered, provided that use of that trademark in
relation to those goods or services would indicate a connection between
those goods or services and the owner of the registered trademark and
provided that the interests of the owner of the registered trademark are
likely to be damaged by such use.

Article 17
Exceptions

Members may provide limited exceptions to the rights conferred by a
trademark, such as fair use of descriptive terms, provided that such
exceptions take account of the legitimate interests of the owner of the
trademark and of third parties.

Article 18
Term of Protection

Initial registration, and each renewal of registration, of a trademark
shall be for a term of no less than seven years. The registration of a
trademark shall be renewable indefinitely.


Article 19
Requirement of Use

1. If use is required to maintain a registration, the registration may be
cancelled only after an uninterrupted period of at least three years of
non-use, unless valid reasons based on the existence of obstacles to such
use are shown by the trademark owner. Circumstances arising independently
of the will of the owner of the trademark which constitute an obstacle to
the use of the trademark, such as import restrictions on or other government
requirements for goods or services protected by the trademark, shall be
recognized as valid reasons for non-use.

2. When subject to the control of its owner, use of a trademark by
another person shall be recognized as use of the trademark for the purpose
of maintaining the registration.

Article 20
Other Requirements

The use of a trademark in the course of trade shall not be
unjustifiably encumbered by special requirements, such as use with another
trademark, use in a special form or use in a manner detrimental to its
capability to distinguish the goods or services of one undertaking from
those of other undertakings. This will not preclude a requirement
prescribing the use of the trademark identifying the undertaking producing
the goods or services along with, but without linking it to, the trademark
distinguishing the specific goods or services in question of that
undertaking.

Article 21
Licensing and Assignment

Members may determine conditions on the licensing and assignment of
trademarks, it being understood that the compulsory licensing of trademarks
shall not be permitted and that the owner of a registered trademark shall
have the right to assign his trademark with or without the transfer of the
business to which the trademark belongs.

SECTION 3: GEOGRAPHICAL INDICATIONS

Article 22
Protection of Geographical Indications

1. Geographical indications are, for the purposes of this Agreement,
indications which identify a good as originating in the territory of a
Member, or a region or locality in that territory, where a given quality,
reputation or other characteristic of the good is essentially attributable
to its geographical origin.

2. In respect of geographical indications, Members shall provide the
legal means for interested parties to prevent:

(a) the use of any means in the designation or presentation of a good
that indicates or suggests that the good in question originates
in a geographical area other than the true place of origin in a
manner which misleads the public as to the geographical origin of
the good;

(b) any use which constitutes an act of unfair competition within the
meaning of Article 10bis of the Paris Convention (1967).

3. A Member shall, ex officio if its legislation so permits or at the
request of an interested party, refuse or invalidate the registration of a
trademark which contains or consists of a geographical indication with
respect to goods not originating in the territory indicated, if use of the
indication in the trademark for such goods in that Member is of such a
nature as to mislead the public as to the true place of origin.
4. The provisions of the preceding paragraphs of this Article shall apply
to a geographical indication which, although literally true as to the
territory, region or locality in which the goods originate, falsely
represents to the public that the goods originate in another territory.

Article 23
Additional Protection for Geographical Indications
for Wines and Spirits

1. Each Member shall provide the legal means for interested parties to
prevent use of a geographical indication identifying wines for wines not
originating in the place indicated by the geographical indication in
question or identifying spirits for spirits not originating in the place
indicated by the geographical indication in question, even where the true
origin of the goods is indicated or the geographical indication is used in
translation or accompanied by expressions such as "kind", "type", "style",
"imitation" or the like.[4]

2. The registration of a trademark for wines which contains or consists
of a geographical indication identifying wines or for spirits which contains
or consists of a geographical indication identifying spirits shall be
refused or invalidated, ex officio if domestic legislation so permits or at
the request of an interested party, with respect to such wines or spirits
not having this origin.

3. In the case of homonymous geographical indications for wines,
protection shall be accorded to each indication, subject to the provisions
of paragraph 4 of Article 22 above. Each Member shall determine the
practical conditions under which the homonymous indications in question will
be differentiated from each other, taking into account the need to ensure
equitable treatment of the producers concerned and that consumers are not
misled.

4. In order to facilitate the protection of geographical indications for
wines, negotiations shall be undertaken in the Council for Trade-Related
Aspects of Intellectual Property Rights concerning the establishment of a
multilateral system of notification and registration of geographical
indications for wines eligible for protection in those Members participating
in the system.

Article 24
International Negotiations; Exceptions

1. Members agree to enter into negotiations aimed at increasing the
protection of individual geographical indications under Article 23. The
provisions of paragraphs 4-8 below shall not be used by a Member to refuse
to conduct negotiations or to conclude bilateral or multilateral agreements.
In the context of such negotiations, Members shall be willing to consider
the continued applicability of these provisions to individual geographical
indications whose use was the subject of such negotiations.

2. The Council for Trade-Related Aspects of Intellectual Property Rights
shall keep under review the application of the provisions of this Section;
the first such review shall take place within two years of the entry into
force of the Agreement Establishing the MTO. Any matter affecting the
compliance with the obligations under these provisions may be drawn to the
attention of the Council, which, at the request of a Member, shall consult
with any Member or Members in respect of such matter in respect of which it
has not been possible to find a satisfactory solution through bilateral or
plurilateral consultations between the Members concerned. The Council shall
take such action as may be agreed to facilitate the operation and further
the objectives of this Section.

3. In implementing this Section, a Member shall not diminish the
protection of geographical indications that existed in that Member
immediately prior to the date of entry into force of the Agreement
Establishing the MTO.

4. Nothing in this Section shall require a Member to prevent continued
and similar use of a particular geographical indication of another Member
identifying wines or spirits in connection with goods or services by any of
its nationals or domiciliaries who have used that geographical indication in
a continuous manner with regard to the same or related goods or services in
the territory of that Member either (a) for at least ten years preceding the
date of the Ministerial Meeting concluding the Uruguay Round of Multilateral
Trade Negotiations or (b) in good faith preceding that date.

5. Where a trademark has been applied for or registered in good faith, or
where rights to a trademark have been acquired through use in good faith
either:

(a) before the date of application of these provisions in that Member
as defined in Part VI below; or

(b) before the geographical indication is protected in its country of
origin;

measures adopted to implement this Section shall not prejudice eligibility
for or the validity of the registration of a trademark, or the right to use
a trademark, on the basis that such a trademark is identical with, or
similar to, a geographical indication.

6. Nothing in this Section shall require a Member to apply its provisions
in respect of a geographical indication of any other Member with respect to
goods or services for which the relevant indication is identical with the
term customary in common language as the common name for such goods or
services in the territory of that Member. Nothing in this Section shall
require a Member to apply its provisions in respect of a geographical
indication of any other Member with respect to products of the vine for
which the relevant indication is identical with the customary name of a
grape variety existing in the territory of that Member as of the date of
entry into force of the Agreement Establishing the MTO.

7. A Member may provide that any request made under this Section in
connection with the use or registration of a trademark must be presented
within five years after the adverse use of the protected indication has
become generally known in that Member or after the date of registration of
the trademark in that Member provided that the trademark has been published
by that date, if such date is earlier than the date on which the adverse use
became generally known in that Member, provided that the geographical
indication is not used or registered in bad faith.

8. The provisions of this Section shall in no way prejudice the right of
any person to use, in the course of trade, his name or the name of his
predecessor in business, except where such name is used in such a manner as
to mislead the public.

9. There shall be no obligation under this Agreement to protect
geographical indications which are not or cease to be protected in their
country of origin, or which have fallen into disuse in that country.

SECTION 4: INDUSTRIAL DESIGNS

Article 25
Requirements for Protection

1. Members shall provide for the protection of independently created
industrial designs that are new or original. Members may provide that
designs are not new or original if they do not significantly differ from
known designs or combinations of known design features. Members may provide
that such protection shall not extend to designs dictated essentially by
technical or functional considerations.

2. Each Member shall ensure that requirements for securing protection for
textile designs, in particular in regard to any cost, examination or
publication, do not unreasonably impair the opportunity to seek and obtain
such protection. Members shall be free to meet this obligation through
industrial design law or through copyright law.

Article 26
Protection

1. The owner of a protected industrial design shall have the right to
prevent third parties not having his consent from making, selling or
importing articles bearing or embodying a design which is a copy, or
substantially a copy, of the protected design, when such acts are undertaken
for commercial purposes.

2. Members may provide limited exceptions to the protection of industrial
designs, provided that such exceptions do not unreasonably conflict with the
normal exploitation of protected industrial designs and do not unreasonably
prejudice the legitimate interests of the owner of the protected design,
taking account of the legitimate interests of third parties.

3. The duration of protection available shall amount to at least ten
years.

SECTION 5: PATENTS

Article 27
Patentable Subject Matter

1. Subject to the provisions of paragraphs 2 and 3 below, patents shall
be available for any inventions, whether products or processes, in all
fields of technology, provided that they are new, involve an inventive step
and are capable of industrial application.[5] Subject to paragraph 4 of
Article 65, paragraph 8 of Article 70 and paragraph 3 of this Article,
patents shall be available and patent rights enjoyable without
discrimination as to the place of invention, the field of technology and
whether products are imported or locally produced.

2. Members may exclude from patentability inventions, the prevention
within their territory of the commercial exploitation of which is necessary
to protect ordre public or morality, including to protect human, animal or
plant life or health or to avoid serious prejudice to the environment,
provided that such exclusion is not made merely because the exploitation is
prohibited by domestic law.

3. Members may also exclude from patentability:

(a) diagnostic, therapeutic and surgical methods for the treatment of
humans or animals;

(b) plants and animals other than microorganisms, and essentially
biological processes for the production of plants or animals
other than non-biological and microbiological processes.
However, Members shall provide for the protection of plant
varieties either by patents or by an effective sui generis system
or by any combination thereof. The provisions of this
sub-paragraph shall be reviewed four years after the entry into
force of the Agreement Establishing the MTO.

Article 28
Rights Conferred

1. A patent shall confer on its owner the following exclusive rights:

(a) where the subject matter of a patent is a product, to prevent
third parties not having his consent from the acts of: making,
using, offering for sale, selling, or importing[6] for these
purposes that product;

(b) where the subject matter of a patent is a process, to prevent
third parties not having his consent from the act of using the
process, and from the acts of: using, offering for sale,
selling, or importing for these purposes at least the product
obtained directly by that process.

2. Patent owners shall also have the right to assign, or transfer by
succession, the patent and to conclude licensing contracts.

Article 29
Conditions on Patent Applicants

1. Members shall require that an applicant for a patent shall disclose
the invention in a manner sufficiently clear and complete for the invention
to be carried out by a person skilled in the art and may require the
applicant to indicate the best mode for carrying out the invention known to
the inventor at the filing date or, where priority is claimed, at the
priority date of the application.

2. Members may require an applicant for a patent to provide information
concerning his corresponding foreign applications and grants.

Article 30
Exceptions to Rights Conferred

Members may provide limited exceptions to the exclusive rights
conferred by a patent, provided that such exceptions do not unreasonably
conflict with a normal exploitation of the patent and do not unreasonably
prejudice the legitimate interests of the patent owner, taking account of
the legitimate interests of third parties.

Article 31
Other Use Without Authorization of the Right Holder

Where the law of a Member allows for other use[7] of the subject
matter of a patent without the authorization of the right holder, including
use by the government or third parties authorized by the government, the
following provisions shall be respected:

(a) authorization of such use shall be considered on its individual
merits;

(b) such use may only be permitted if, prior to such use, the
proposed user has made efforts to obtain authorization from the
right holder on reasonable commercial terms and conditions and
that such efforts have not been successful within a reasonable
period of time. This requirement may be waived by a Member in
the case of a national emergency or other circumstances of
extreme urgency or in cases of public non-commercial use. In
situations of national emergency or other circumstances of
extreme urgency, the right holder shall, nevertheless, be
notified as soon as reasonably practicable. In the case of
public non-commercial use, where the government or contractor,
without making a patent search, knows or has demonstrable grounds
to know that a valid patent is or will be used by or for the
government, the right holder shall be informed promptly;

© the scope and duration of such use shall be limited to the
purpose for which it was authorized, and in the case of
semi-conductor technology shall only be for public non-commercial
use or to remedy a practice determined after judicial or
administrative process to be anti-competitive.

(d) such use shall be non-exclusive;

(e) such use shall be non-assignable, except with that part of the
enterprise or goodwill which enjoys such use;

(f) any such use shall be authorized predominantly for the supply of
the domestic market of the Member authorizing such use;

(g) authorization for such use shall be liable, subject to adequate
protection of the legitimate interests of the persons so
authorized, to be terminated if and when the circumstances which
led to it cease to exist and are unlikely to recur. The
competent authority shall have the authority to review, upon
motivated request, the continued existence of these
circumstances;

(h) the right holder shall be paid adequate remuneration in the
circumstances of each case, taking into account the economic
value of the authorization;

(i) the legal validity of any decision relating to the authorization
of such use shall be subject to judicial review or other
independent review by a distinct higher authority in that Member;

(j) any decision relating to the remuneration provided in respect of
such use shall be subject to judicial review or other independent
review by a distinct higher authority in that Member;

(k) Members are not obliged to apply the conditions set forth in
sub-paragraphs (b) and (f) above where such use is permitted to
remedy a practice determined after judicial or administrative
process to be anti-competitive. The need to correct
anti-competitive practices may be taken into account in
determining the amount of remuneration in such cases. Competent
authorities shall have the authority to refuse termination of
authorization if and when the conditions which led to such
authorization are likely to recur;

(l) where such use is authorized to permit the exploitation of a
patent ("the second patent") which cannot be exploited without
infringing another patent ("the first patent"), the following
additional conditions shall apply:

(i) the invention claimed in the second patent shall involve an
important technical advance of considerable economic
significance in relation to the invention claimed in the
first patent;

(ii) the owner of the first patent shall be entitled to a
cross-licence on reasonable terms to use the invention
claimed in the second patent; and

(iii) the use authorized in respect of the first patent shall be
non-assignable except with the assignment of the second
patent.

Article 32
Revocation/Forfeiture

An opportunity for judicial review of any decision to revoke or
forfeit a patent shall be available.

Article 33
Term of Protection

The term of protection available shall not end before the expiration
of a period of twenty years counted from the filing date.[8]

Article 34
Process Patents: Burden of Proof

1. For the purposes of civil proceedings in respect of the infringement
of the rights of the owner referred to in paragraph 1(b) of Article 28
above, if the subject matter of a patent is a process for obtaining a
product, the judicial authorities shall have the authority to order the
defendant to prove that the process to obtain an identical product is
different from the patented process. Therefore, Members shall provide, in
at least one of the following circumstances, that any identical product when
produced without the consent of the patent owner shall, in the absence of
proof to the contrary, be deemed to have been obtained by the patented
process:

(a) if the product obtained by the patented process is new;

(b) if there is a substantial likelihood that the identical product
was made by the process and the owner of the patent has been
unable through reasonable efforts to determine the process
actually used.

2. Any Member shall be free to provide that the burden of proof indicated
in paragraph 1 shall be on the alleged infringer only if the condition
referred to in sub-paragraph (a) is fulfilled or only if the condition
referred to in sub-paragraph (b) is fulfilled.

3. In the adduction of proof to the contrary, the legitimate interests of
the defendant in protecting his manufacturing and business secrets shall be
taken into account.

SECTION 6: LAYOUT-DESIGNS (TOPOGRAPHIES) OF INTEGRATED CIRCUITS

Article 35
Relation to IPIC Treaty

Members agree to provide protection to the layout-designs
(topographies) of integrated circuits (hereinafter referred to as
"layout-designs") in accordance with Articles 2-7 (other than paragraph 3 of
Article 6), Article 12 and paragraph 3 of Article 16 of the Treaty on
Intellectual Property in Respect of Integrated Circuits and, in addition, to
comply with the following provisions.

Article 36
Scope of the Protection

Subject to the provisions of paragraph 1 of Article 37 below, Members
shall consider unlawful the following acts if performed without the
authorization of the right holder:[9] importing, selling, or otherwise
distributing for commercial purposes a protected layout-design, an
integrated circuit in which a protected layout-design is incorporated, or an
article incorporating such an integrated circuit only insofar as it
continues to contain an unlawfully reproduced layout-design.

Article 37
Acts not Requiring the Authorization of the Right Holder

1. Notwithstanding Article 36 above, no Member shall consider unlawful
the performance of any of the acts referred to in that Article in respect of
an integrated circuit incorporating an unlawfully reproduced layout-design
or any article incorporating such an integrated circuit where the person
performing or ordering such acts did not know and had no reasonable ground
to know, when acquiring the integrated circuit or article incorporating such
an integrated circuit, that it incorporated an unlawfully reproduced
layout-design. Members shall provide that, after the time that such person
has received sufficient notice that the layout-design was unlawfully
reproduced, he may perform any of the acts with respect to the stock on hand
or ordered before such time, but shall be liable to pay to the right holder
a sum equivalent to a reasonable royalty such as would be payable under a
freely negotiated licence in respect of such a layout-design.

2. The conditions set out in sub-paragraphs (a)-(k) of Article 31 above
shall apply mutatis mutandis in the event of any non-voluntary licensing of
a layout-design or of its use by or for the government without the
authorization of the right holder.

Article 38
Term of Protection

1. In Members requiring registration as a condition of protection, the
term of protection of layout-designs shall not end before the expiration of
a period of ten years counted from the date of filing an application for
registration or from the first commercial exploitation wherever in the world
it occurs.

2. In Members not requiring registration as a condition for protection,
layout-designs shall be protected for a term of no less than ten years from
the date of the first commercial exploitation wherever in the world it
occurs.

3. Notwithstanding paragraphs 1 and 2 above, a Member may provide that
protection shall lapse fifteen years after the creation of the
layout-design.

SECTION 7: PROTECTION OF UNDISCLOSED INFORMATION

Article 39

1. In the course of ensuring effective protection against unfair
competition as provided in Article 10bis of the Paris Convention (1967),
Members shall protect undisclosed information in accordance with paragraph 2
below and data submitted to governments or governmental agencies in
accordance with paragraph 3 below.

2. Natural and legal persons shall have the possibility of preventing
information lawfully within their control from being disclosed to, acquired
by, or used by others without their consent in a manner contrary to honest
commercial practices[10] so long as such information:

- is secret in the sense that it is not, as a body or in the precise
configuration and assembly of its components, generally known among or
readily accessible to persons within the circles that normally deal
with the kind of information in question;

- has commercial value because it is secret; and

- has been subject to reasonable steps under the circumstances, by the
person lawfully in control of the information, to keep it secret.

3. Members, when requiring, as a condition of approving the marketing of
pharmaceutical or of agricultural chemical products which utilize new
chemical entities, the submission of undisclosed test or other data, the
origination of which involves a considerable effort, shall protect such data
against unfair commercial use. In addition, Members shall protect such data
against disclosure, except where necessary to protect the public, or unless
steps are taken to ensure that the data are protected against unfair
commercial use.

SECTION 8: CONTROL OF ANTI-COMPETITIVE PRACTICES
IN CONTRACTUAL LICENCES

Article 40

1. Members agree that some licensing practices or conditions pertaining
to intellectual property rights which restrain competition may have adverse
effects on trade and may impede the transfer and dissemination of
technology.

2. Nothing in this Agreement shall prevent Members from specifying in
their national legislation licensing practices or conditions that may in
particular cases constitute an abuse of intellectual property rights having
an adverse effect on competition in the relevant market. As provided above,
a Member may adopt, consistently with the other provisions of this
Agreement, appropriate measures to prevent or control such practices, which
may include for example exclusive grantback conditions, conditions
preventing challenges to validity and coercive package licensing, in the
light of the relevant laws and regulations of that Member.

3. Each Member shall enter, upon request, into consultations with any
other Member which has cause to believe that an intellectual property right
owner that is a national or domiciliary of the Member to which the request
for consultations has been addressed is undertaking practices in violation
of the requesting Member's laws and regulations on the subject matter of
this Section, and which wishes to secure compliance with such legislation,
without prejudice to any action under the law and to the full freedom of an
ultimate decision of either Member. The Member addressed shall accord full
and sympathetic consideration to, and shall afford adequate opportunity for,
consultations with the requesting Member, and shall co-operate through
supply of publicly available non-confidential information of relevance to
the matter in question and of other information available to the Member,
subject to domestic law and to the conclusion of mutually satisfactory
agreements concerning the safeguarding of its confidentiality by the
requesting Member.

4. A Member whose nationals or domiciliaries are subject to proceedings
in another Member concerning alleged violation of that other Member's laws
and regulations on the subject matter of this Section shall, upon request,
be granted an opportunity for consultations by the other Member under the
same conditions as those foreseen in paragraph 3 above.

PART III: ENFORCEMENT OF INTELLECTUAL PROPERTY RIGHTS

SECTION 1: GENERAL OBLIGATIONS

Article 41

1. Members shall ensure that enforcement procedures as specified in this
Part are available under their national laws so as to permit effective
action against any act of infringement of intellectual property rights
covered by this Agreement, including expeditious remedies to prevent
infringements and remedies which constitute a deterrent to further
infringements. These procedures shall be applied in such a manner as to
avoid the creation of barriers to legitimate trade and to provide for
safeguards against their abuse.

2. Procedures concerning the enforcement of intellectual property rights
shall be fair and equitable. They shall not be unnecessarily complicated or
costly, or entail unreasonable time-limits or unwarranted delays.

3. Decisions on the merits of a case shall preferably be in writing and
reasoned. They shall be made available at least to the parties to the
proceeding without undue delay. Decisions on the merits of a case shall be
based only on evidence in respect of which parties were offered the
opportunity to be heard.

4. Parties to a proceeding shall have an opportunity for review by a
judicial authority of final administrative decisions and, subject to
jurisdictional provisions in national laws concerning the importance of a
case, of at least the legal aspects of initial judicial decisions on the
merits of a case. However, there shall be no obligation to provide an
opportunity for review of acquittals in criminal cases.

5. It is understood that this Part does not create any obligation to put
in place a judicial system for the enforcement of intellectual property
rights distinct from that for the enforcement of laws in general, nor does
it affect the capacity of Members to enforce their laws in general. Nothing
in this Part creates any obligation with respect to the distribution of
resources as between enforcement of intellectual property rights and the
enforcement of laws in general.

SECTION 2: CIVIL AND ADMINISTRATIVE PROCEDURES AND REMEDIES

Article 42
Fair and Equitable Procedures

Members shall make available to right holders[11] civil judicial
procedures concerning the enforcement of any intellectual property right
covered by this Agreement. Defendants shall have the right to written
notice which is timely and contains sufficient detail, including the basis
of the claims. Parties shall be allowed to be represented by independent
legal counsel, and procedures shall not impose overly burdensome
requirements concerning mandatory personal appearances. All parties to such
procedures shall be duly entitled to substantiate their claims and to
present all relevant evidence. The procedure shall provide a means to
identify and protect confidential information, unless this would be contrary
to existing constitutional requirements.

Article 43
Evidence of Proof

1. The judicial authorities shall have the authority, where a party has
presented reasonably available evidence sufficient to support its claims and
has specified evidence relevant to substantiation of its claims which lies
in the control of the opposing party, to order that this evidence be
produced by the opposing party, subject in appropriate cases to conditions
which ensure the protection of confidential information.

2. In cases in which a party to a proceeding voluntarily and without good
reason refuses access to, or otherwise does not provide necessary
information within a reasonable period, or significantly impedes a procedure
relating to an enforcement action, a Member may accord judicial authorities
the authority to make preliminary and final determinations, affirmative or
negative, on the basis of the information presented to them, including the
complaint or the allegation presented by the party adversely affected by the
denial of access to information, subject to providing the parties an
opportunity to be heard on the allegations or evidence.

Article 44
Injunctions

1. The judicial authorities shall have the authority to order a party to
desist from an infringement, inter alia to prevent the entry into the
channels of commerce in their jurisdiction of imported goods that involve
the infringement of an intellectual property right, immediately after
customs clearance of such goods. Members are not obliged to accord such
authority in respect of protected subject matter acquired or ordered by a
person prior to knowing or having reasonable grounds to know that dealing in
such subject matter would entail the infringement of an intellectual
property right.

2. Notwithstanding the other provisions of this Part and provided that
the provisions of Part II specifically addressing use by governments, or by
third parties authorized by a government, without the authorization of the
right holder are complied with, Members may limit the remedies available
against such use to payment of remuneration in accordance with sub-paragraph
(h) of Article 31 above. In other cases, the remedies under this Part shall
apply or, where these remedies are inconsistent with national law,
declaratory judgments and adequate compensation shall be available.

Article 45
Damages

1. The judicial authorities shall have the authority to order the
infringer to pay the right holder damages adequate to compensate for the
injury the right holder has suffered because of an infringement of his
intellectual property right by an infringer who knew or had reasonable
grounds to know that he was engaged in infringing activity.

2. The judicial authorities shall also have the authority to order the
infringer to pay the right holder expenses, which may include appropriate
attorney's fees. In appropriate cases, Members may authorize the judicial
authorities to order recovery of profits and/or payment of pre-established
damages even where the infringer did not know or had no reasonable grounds
to know that he was engaged in infringing activity.

Article 46
Other Remedies

In order to create an effective deterrent to infringement, the
judicial authorities shall have the authority to order that goods that they
have found to be infringing be, without compensation of any sort, disposed
of outside the channels of commerce in such a manner as to avoid any harm
caused to the right holder, or, unless this would be contrary to existing
constitutional requirements, destroyed. The judicial authorities shall also
have the authority to order that materials and implements the predominant
use of which has been in the creation of the infringing goods be, without
compensation of any sort, disposed of outside the channels of commerce in
such a manner as to minimize the risks of further infringements. In
considering such requests, the need for proportionality between the
seriousness of the infringement and the remedies ordered as well as the
interests of third parties shall be taken into account. In regard to
counterfeit trademark goods, the simple removal of the trademark unlawfully
affixed shall not be sufficient, other than in exceptional cases, to permit
release of the goods into the channels of commerce.

Article 47
Right of Information

Members may provide that the judicial authorities shall have the
authority, unless this would be out of proportion to the seriousness of the
infringement, to order the infringer to inform the right holder of the
identity of third persons involved in the production and distribution of the
infringing goods or services and of their channels of distribution.

Article 48
Indemnification of the Defendant

1. The judicial authorities shall have the authority to order a party at
whose request measures were taken and who has abused enforcement procedures
to provide to a party wrongfully enjoined or restrained adequate
compensation for the injury suffered because of such abuse. The judicial
authorities shall also have the authority to order the applicant to pay the
defendant expenses, which may include appropriate attorney's fees.

2. In respect of the administration of any law pertaining to the
protection or enforcement of intellectual property rights, Members shall
only exempt both public authorities and officials from liability to
appropriate remedial measures where actions are taken or intended in good
faith in the course of the administration of such laws.

Article 49
Administrative Procedures

To the extent that any civil remedy can be ordered as a result of
administrative procedures on the merits of a case, such procedures shall
conform to principles equivalent in substance to those set forth in this
Section.

SECTION 3: PROVISIONAL MEASURES

Article 50

1. The judicial authorities shall have the authority to order prompt and
effective provisional measures:

(a) to prevent an infringement of any intellectual property right
from occurring, and in particular to prevent the entry into the
channels of commerce in their jurisdiction of goods, including
imported goods immediately after customs clearance;

(b) to preserve relevant evidence in regard to the alleged
infringement.

2. The judicial authorities shall have the authority to adopt provisional
measures inaudita altera parte where appropriate, in particular where any
delay is likely to cause irreparable harm to the right holder, or where
there is a demonstrable risk of evidence being destroyed.

3. The judicial authorities shall have the authority to require the
applicant to provide any reasonably available evidence in order to satisfy
themselves with a sufficient degree of certainty that the applicant is the
right holder and that his right is being infringed or that such infringement
is imminent, and to order the applicant to provide a security or equivalent
assurance sufficient to protect the defendant and to prevent abuse.

4. Where provisional measures have been adopted inaudita altera parte,
the parties affected shall be given notice, without delay after the
execution of the measures at the latest. A review, including a right to be
heard, shall take place upon request of the defendant with a view to
deciding, within a reasonable period after the notification of the measures,
whether these measures shall be modified, revoked or confirmed.

5. The applicant may be required to supply other information necessary
for the identification of the goods concerned by the authority that will
execute the provisional measures.

6. Without prejudice to paragraph 4 above, provisional measures taken on
the basis of paragraphs 1 and 2 above shall, upon request by the defendant,
be revoked or otherwise cease to have effect, if proceedings leading to a
decision on the merits of the case are not initiated within a reasonable
period, to be determined by the judicial authority ordering the measures
where national law so permits or, in the absence of such a determination,
not to exceed twenty working days or thirty-one calendar days, whichever is
the longer.

7. Where the provisional measures are revoked or where they lapse due to
any act or omission by the applicant, or where it is subsequently found that
there has been no infringement or threat of infringement of an intellectual
property right, the judicial authorities shall have the authority to order
the applicant, upon request of the defendant, to provide the defendant
appropriate compensation for any injury caused by these measures.

8. To the extent that any provisional measure can be ordered as a result
of administrative procedures, such procedures shall conform to principles
equivalent in substance to those set forth in this Section.

SECTION 4: SPECIAL REQUIREMENTS RELATED TO BORDER MEASURES[12]

Article 51
Suspension of Release by Customs Authorities

Members shall, in conformity with the provisions set out below, adopt
procedures[13] to enable a right holder, who has valid grounds for
suspecting that the importation of counterfeit trademark or pirated
copyright goods[14] may take place, to lodge an application in writing with
competent authorities, administrative or judicial, for the suspension by the
customs authorities of the release into free circulation of such goods.
Members may enable such an application to be made in respect of goods which
involve other infringements of intellectual property rights, provided that
the requirements of this Section are met. Members may also provide for
corresponding procedures concerning the suspension by the customs
authorities of the release of infringing goods destined for exportation from
their territories.

Article 52
Application

Any right holder initiating the procedures under Article 51 above
shall be required to provide adequate evidence to satisfy the competent
authorities that, under the laws of the country of importation, there is
prima facie an infringement of his intellectual property right and to supply
a sufficiently detailed description of the goods to make them readily
recognizable by the customs authorities. The competent authorities shall
inform the applicant within a reasonable period whether they have accepted
the application and, where determined by the competent authorities, the
period for which the customs authorities will take action.

Article 53
Security or Equivalent Assurance

1. The competent authorities shall have the authority to require an
applicant to provide a security or equivalent assurance sufficient to
protect the defendant and the competent authorities and to prevent abuse.
Such security or equivalent assurance shall not unreasonably deter recourse
to these procedures.

2. Where pursuant to an application under this Section the release of
goods involving industrial designs, patents, layout-designs or undisclosed
information into free circulation has been suspended by customs authorities
on the basis of a decision other than by a judicial or other independent
authority, and the period provided for in Article 55 has expired without the
granting of provisional relief by the duly empowered authority, and provided
that all other conditions for importation have been complied with, the
owner, importer, or consignee of such goods shall be entitled to their
release on the posting of a security in an amount sufficient to protect the
right holder for any infringement. Payment of such security shall not
prejudice any other remedy available to the right holder, it being
understood that the security shall be released if the right holder fails to
pursue his right of action within a reasonable period of time.

Article 54
Notice of Suspension

The importer and the applicant shall be promptly notified of the
suspension of the release of goods according to Article 51 above.

Article 55
Duration of Suspension

If, within a period not exceeding ten working days after the applicant
has been served notice of the suspension, the customs authorities have not
been informed that proceedings leading to a decision on the merits of the
case have been initiated by a party other than the defendant, or that the
duly empowered authority has taken provisional measures prolonging the
suspension of the release of the goods, the goods shall be released,
provided that all other conditions for importation or exportation have been
complied with; in appropriate cases, this time-limit may be extended by
another ten working days. If proceedings leading to a decision on the
merits of the case have been initiated, a review, including a right to be
heard, shall take place upon request of the defendant with a view to
deciding, within a reasonable period, whether these measures shall be
modified, revoked or confirmed. Notwithstanding the above, where the
suspension of the release of goods is carried out or continued in accordance
with a provisional judicial measure, the provisions of Article 50, paragraph
6 above shall apply.

Article 56
Indemnification of the Importer
and of the Owner of the Goods

Relevant authorities shall have the authority to order the applicant
to pay the importer, the consignee and the owner of the goods appropriate
compensation for any injury caused to them through the wrongful detention of
goods or through the detention of goods released pursuant to Article 55
above.

Article 57
Right of Inspection and Information

Without prejudice to the protection of confidential information,
Members shall provide the competent authorities the authority to give the
right holder sufficient opportunity to have any product detained by the
customs authorities inspected in order to substantiate his claims. The
competent authorities shall also have authority to give the importer an
equivalent opportunity to have any such product inspected. Where a positive
determination has been made on the merits of a case, Members may provide the
competent authorities the authority to inform the right holder of the names
and addresses of the consignor, the importer and the consignee and of the
quantity of the goods in question.

Article 58
Ex Officio Action

Where Members require competent authorities to act upon their own
initiative and to suspend the release of goods in respect of which they have
acquired prima facie evidence that an intellectual property right is being
infringed:

(a) the competent authorities may at any time seek from the right
holder any information that may assist them to exercise these
powers;

(b) the importer and the right holder shall be promptly notified of
the suspension. Where the importer has lodged an appeal against
the suspension with the competent authorities, the suspension
shall be subject to the conditions, mutatis mutandis, set out at
Article 55 above;

© Members shall only exempt both public authorities and officials
from liability to appropriate remedial measures where actions are
taken or intended in good faith.

Article 59
Remedies

Without prejudice to other rights of action open to the right holder
and subject to the right of the defendant to seek review by a judicial
authority, competent authorities shall have the authority to order the
destruction or disposal of infringing goods in accordance with the
principles set out in Article 46 above. In regard to counterfeit trademark
goods, the authorities shall not allow the re-exportation of the infringing
goods in an unaltered state or subject them to a different customs
procedure, other than in exceptional circumstances.

Article 60
De Minimis Imports

Members may exclude from the application of the above provisions small
quantities of goods of a non-commercial nature contained in travellers'
personal luggage or sent in small consignments.

SECTION 5: CRIMINAL PROCEDURES

Article 61

Members shall provide for criminal procedures and penalties to be
applied at least in cases of wilful trademark counterfeiting or copyright
piracy on a commercial scale. Remedies available shall include imprisonment
and/or monetary fines sufficient to provide a deterrent, consistently with
the level of penalties applied for crimes of a corresponding gravity. In
appropriate cases, remedies available shall also include the seizure,
forfeiture and destruction of the infringing goods and of any materials and
implements the predominant use of which has been in the commission of the
offence. Members may provide for criminal procedures and penalties to be
applied in other cases of infringement of intellectual property rights, in
particular where they are committed wilfully and on a commercial scale.


PART IV: ACQUISITION AND MAINTENANCE OF INTELLECTUAL PROPERTY
RIGHTS AND RELATED INTER-PARTES PROCEDURES

Article 62

1. Members may require, as a condition of the acquisition or maintenance
of the intellectual property rights provided for under Sections 2-6 of Part
II of this Agreement, compliance with reasonable procedures and formalities.
Such procedures and formalities shall be consistent with the provisions of
this Agreement.

2. Where the acquisition of an intellectual property right is subject to
the right being granted or registered, Members shall ensure that the
procedures for grant or registration, subject to compliance with the
substantive conditions for acquisition of the right, permit the granting or
registration of the right within a reasonable period of time so as to avoid
unwarranted curtailment of the period of protection.

3. Article 4 of the Paris Convention (1967) shall apply mutatis mutandis
to service marks.

4. Procedures concerning the acquisition or maintenance of intellectual
property rights and, where the national law provides for such procedures,
administrative revocation and inter partes procedures such as opposition,
revocation and cancellation, shall be governed by the general principles set
out in paragraphs 2 and 3 of Article 41.

5. Final administrative decisions in any of the procedures referred to
under paragraph 4 above shall be subject to review by a judicial or
quasi-judicial authority. However, there shall be no obligation to provide
an opportunity for such review of decisions in cases of unsuccessful
opposition or administrative revocation, provided that the grounds for such
procedures can be the subject of invalidation procedures.


PART V: DISPUTE PREVENTION AND SETTLEMENT

Article 63
Transparency

1. Laws and regulations, and final judicial decisions and administrative
rulings of general application, made effective by any Member pertaining to
the subject matter of this Agreement (the availability, scope, acquisition,
enforcement and prevention of the abuse of intellectual property rights)
shall be published, or where such publication is not practicable made
publicly available, in a national language, in such a manner as to enable
governments and right holders to become acquainted with them. Agreements
concerning the subject matter of this Agreement which are in force between
the government or a governmental agency of any Member and the government or
a governmental agency of any other Member shall also be published.

2. Members shall notify the laws and regulations referred to in paragraph
1 above to the Council for Trade-Related Aspects of Intellectual Property
Rights in order to assist that Council in its review of the operation of
this Agreement. The Council shall attempt to minimize the burden on Members
in carrying out this obligation and may decide to waive the obligation to
notify such laws and regulations directly to the Council if consultations
with the World Intellectual Property Organization on the establishment of a
common register containing these laws and regulations are successful. The
Council shall also consider in this connection any action required regarding
notifications pursuant to the obligations under this Agreement stemming from
the provisions of Article 6ter of the Paris Convention (1967).

3. Each Member shall be prepared to supply, in response to a written
request from another Member, information of the sort referred to in
paragraph 1 above. A Member, having reason to believe that a specific
judicial decision or administrative ruling or bilateral agreement in the
area of intellectual property rights affects its rights under this
Agreement, may also request in writing to be given access to or be informed
in sufficient detail of such specific judicial decisions or administrative
rulings or bilateral agreements.

4. Nothing in paragraphs 1 to 3 above shall require Members to disclose
confidential information which would impede law enforcement or otherwise be
contrary to the public interest or would prejudice the legitimate commercial
interests of particular enterprises, public or private.

Article 64
Dispute Settlement

1. The provisions of Articles XXII and XXIII of the General Agreement on
Tariffs and Trade 1994 as elaborated and applied by the Understanding on
Rules and Procedures Governing the Settlement of Disputes shall apply to
consultations and the settlement of disputes under this Agreement except as
otherwise specifically provided herein.

2. Sub-paragraphs XXIII:1(b) and XXIII:1© of the General Agreement on
Tariffs and Trade 1994 shall not apply to the settlement of disputes under
this Agreement for a period of five years from the entry into force of the
Agreement establishing the Multilateral Trade Organization.

3. During the time period referred to in paragraph 2, the TRIPS Council
shall examine the scope and modalities for Article XXIII:1(b) and Article
XXIII:1©-type complaints made pursuant to this Agreement, and submit its
recommendations to the Ministerial Conference for approval. Any decision of
the Ministerial Conference to approve such recommendations or to extend the
period in paragraph 2 shall be made only by consensus, and approved
recommendations shall be effective for all Members without further formal
acceptance process.

PART VI: TRANSITIONAL ARRANGEMENTS

Article 65
Transitional Arrangements

1. Subject to the provisions of paragraphs 2, 3 and 4 below, no Member
shall be obliged to apply the provisions of this Agreement before the expiry
of a general period of one year following the date of entry into force of
the Agreement Establishing the MTO.

2. Any developing country Member is entitled to delay for a further
period of four years the date of application, as defined in paragraph 1
above, of the provisions of this Agreement other than Articles 3, 4 and 5 of
Part I.

3. Any other Member which is in the process of transformation from a
centrally-planned into a market, free-enterprise economy and which is
undertaking structural reform of its intellectual property system and facing
special problems in the preparation and implementation of intellectual
property laws, may also benefit from a period of delay as foreseen in
paragraph 2 above.

4. To the extent that a developing country Member is obliged by this
Agreement to extend product patent protection to areas of technology not so
protectable in its territory on the general date of application of this
Agreement for that Member, as defined in paragraph 2 above, it may delay the
application of the provisions on product patents of Section 5 of Part II of
this Agreement to such areas of technology for an additional period of five
years.

5. Any Member availing itself of a transitional period under paragraphs
1, 2, 3 or 4 above shall ensure that any changes in its domestic laws,
regulations and practice made during that period do not result in a lesser
degree of consistency with the provisions of this Agreement.

Article 66
Least-Developed Country Members

1. In view of their special needs and requirements, their economic,
financial and administrative constraints, and their need for flexibility to
create a viable technological base, least-developed country Members shall
not be required to apply the provisions of this Agreement, other than
Articles 3, 4 and 5, for a period of 10 years from the date of application
as defined under paragraph 1 of Article 65 above. The Council shall, upon
duly motivated request by a least-developed country Member, accord
extensions of this period.

2. Developed country Members shall provide incentives to enterprises and
institutions in their territories for the purpose of promoting and
encouraging technology transfer to least-developed country Members in order
to enable them to create a sound and viable technological base.

Article 67
Technical Cooperation

In order to facilitate the implementation of this Agreement, developed
country Members shall provide, on request and on mutually agreed terms and
conditions, technical and financial cooperation in favour of developing and
least-developed country Members. Such cooperation shall include assistance
in the preparation of domestic legislation on the protection and enforcement
of intellectual property rights as well as on the prevention of their abuse,
and shall include support regarding the establishment or reinforcement of
domestic offices and agencies relevant to these matters, including the
training of personnel.


PART VII: INSTITUTIONAL ARRANGEMENTS; FINAL PROVISIONS

Article 68
Council for Trade-Related Aspects of
Intellectual Property Rights

The Council for Trade-Related Aspects of Intellectual Property Rights
shall monitor the operation of this Agreement and, in particular, Members'
compliance with their obligations hereunder, and shall afford Members the
opportunity of consulting on matters relating to the trade-related aspects
of intellectual property rights. It shall carry out such other
responsibilities as assigned to it by the Members, and it shall, in
particular, provide any assistance requested by them in the context of
dispute settlement procedures. In carrying out its functions, the Council
may consult with and seek information from any source it deems appropriate.
In consultation with the World Intellectual Property Organization, the
Council shall seek to establish, within one year of its first meeting,
appropriate arrangements for cooperation with bodies of that Organization.

Article 69
International Cooperation

Members agree to cooperate with each other with a view to eliminating
international trade in goods infringing intellectual property rights. For
this purpose, they shall establish and notify contact points in their
national administrations and be ready to exchange information on trade in
infringing goods. They shall, in particular, promote the exchange of
information and cooperation between customs authorities with regard to trade
in counterfeit trademark goods and pirated copyright goods.

Article 70
Protection of Existing Subject Matter

1. This Agreement does not give rise to obligations in respect of acts
which occurred before the date of application of the Agreement for the
Member in question.

2. Except as otherwise provided for in this Agreement, this Agreement
gives rise to obligations in respect of all subject matter existing at the
date of application of this Agreement for the Member in question, and which
is protected in that Member on the said date, or which meets or comes
subsequently to meet the criteria for protection under the terms of this
Agreement. In respect of this paragraph and paragraphs 3 and 4 below,
copyright obligations with respect to existing works shall be solely
determined under Article 18 of the Berne Convention (1971), and obligations
with respect to the rights of producers of phonograms and performers in
existing phonograms shall be determined solely under Article 18 of the Berne
Convention (1971) as made applicable under paragraph 6 of Article 14 of this
Agreement.

3. There shall be no obligation to restore protection to subject matter
which on the date of application of this Agreement for the Member in
question has fallen into the public domain.

4. In respect of any acts in respect of specific objects embodying
protected subject matter which become infringing under the terms of
legislation in conformity with this Agreement, and which were commenced, or
in respect of which a significant investment was made, before the date of
acceptance of the Agreement Establishing the MTO by that Member, any Member
may provide for a limitation of the remedies available to the right holder
as to the continued performance of such acts after the date of application
of the Agreement for that Member. In such cases the Member shall, however,
at least provide for the payment of equitable remuneration.

5. A Member is not obliged to apply the provisions of Article 11 and of
paragraph 4 of Article 14 with respect to originals or copies purchased
prior to the date of application of this Agreement for that Member.

6. Members shall not be required to apply Article 31, or the requirement
in paragraph 1 of Article 27 that patent rights shall be enjoyable without
discrimination as to the field of technology, to use without the
authorization of the right holder where authorization for such use was
granted by the government before the date this Agreement became known.

7. In the case of intellectual property rights for which protection is
conditional upon registration, applications for protection which are pending
on the date of application of this Agreement for the Member in question
shall be permitted to be amended to claim any enhanced protection provided
under the provisions of this Agreement. Such amendments shall not include
new matter.

8. Where a Member does not make available as of the date of entry into
force of the Agreement Establishing the MTO patent protection for
pharmaceutical and agricultural chemical products commensurate with its
obligations under Article 27, that Member shall:

(i) notwithstanding the provisions of Part VI above, provide as from
the date of entry into force of the Agreement Establishing the
MTO a means by which applications for patents for such inventions
can be filed;

(ii) apply to these applications, as of the date of application of
this Agreement, the criteria for patentability as laid down in
this Agreement as if those criteria were being applied on the
date of filing in that Member or, where priority is available and
claimed, the priority date of the application;

(iii)provide patent protection in accordance with this Agreement as
from the grant of the patent and for the remainder of the patent
term, counted from the filing date in accordance with Article 33
of this Agreement, for those of these applications that meet the
criteria for protection referred to in sub-paragraph (ii) above.

9. Where a product is the subject of a patent application in a Member in
accordance with paragraph 8(i) above, exclusive marketing rights shall be
granted, notwithstanding the provisions of Part VI above, for a period of
five years after obtaining market approval in that Member or until a product
patent is granted or rejected in that Member, whichever period is shorter,
provided that, subsequent to the entry into force of the Agreement
Establishing the MTO, a patent application has been filed and a patent
granted for that product in another Member and marketing approval obtained
in such other Member.

Article 71
Review and Amendment

1. The Council for Trade-Related Aspects of Intellectual Property Rights
shall review the implementation of this Agreement after the expiration of
the transitional period referred to in paragraph 2 of Article 65 above. The
Council shall, having regard to the experience gained in its implementation,
review it two years after that date, and at identical intervals thereafter.
The Council may also undertake reviews in the light of any relevant new
developments which might warrant modification or amendment of this
Agreement.

2. Amendments merely serving the purpose of adjusting to higher levels of
protection of intellectual property rights achieved, and in force, in other
multilateral agreements and accepted under those agreements by all Members
of the MTO may be referred to the Ministerial Conference for action in
accordance with Article X, paragraph 6, of the Agreement Establishing the
MTO on the basis of a consensus proposal from the Council for Trade-Related
Aspects of Intellectual Property Rights.

Article 72
Reservations

Reservations may not be entered in respect of any of the provisions of
this Agreement without the consent of the other Members.

Article 73
Security Exceptions

Nothing in this Agreement shall be construed:

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

(b) to prevent any Member from taking any action which it considers
necessary for the protection of its essential security interests;

(i) relating to fissionable materials or the materials from
which they are derived;

(ii) relating to the traffic in arms, ammunition and implements
of war and to such traffic in other goods and materials as
is carried on directly or indirectly for the purpose of
supplying a military establishment;

(iii) taken in time of war or other emergency in international
relations; or

© to prevent any Member from taking any action in pursuance of its
obligations under the United Nations Charter for the maintenance
of international peace and security.

1. When "nationals" are referred to in this Agreement, they shall be deemed,
in the case of a separate customs territory Member of the MTO, to mean
persons, natural or legal, who are domiciled or who have a real and
effective industrial or commercial establishment in that customs territory.

2. In this Agreement, "Paris Convention" refers to the Paris Convention for
the Protection of Industrial Property; "Paris Convention (1967)" refers to
the Stockholm Act of this Convention of 14 July 1967. "Berne Convention"
refers to the Berne Convention for the Protection of Literary and Artistic
Works; "Berne Convention (1971)" refers to the Paris Act of this Convention
of 24 July 1971. "Rome Convention" refers to the International Convention
for the Protection of Performers, Producers of Phonograms and Broadcasting
Organisations, adopted at Rome on 26 October 1961. "Treaty on Intellectual
Property in Respect of Integrated Circuits" (IPIC Treaty) refers to the
Treaty on Intellectual Property in Respect of Integrated Circuits, adopted
at Washington on 26 May 1989.

3. For the purposes of Articles 3 and 4 of this Agreement, protection shall
include matters affecting the availability, acquisition, scope, maintenance
and enforcement of intellectual property rights as well as those matters
affecting the use of intellectual property rights specifically addressed in
this Agreement.

4. Notwithstanding the first sentence of Article 42, Members may, with
respect to these obligations, instead provide for enforcement by
administrative action.

5. For the purposes of this Article, the terms "inventive step" and "capable
of industrial application" may be deemed by a Member to be synonymous with
the terms "non-obvious" and "useful" respectively.

6. This right, like all other rights conferred under this Agreement in
respect of the use, sale, importation or other distribution of goods, is
subject to the provisions of Article 6 above.

7."Other use" refers to use other than that allowed under Article 30.

8. It is understood that those Members which do not have a system of
original grant may provide that the term of protection shall be computed
from the filing date in the system of original grant.

9. The term "right holder" in this Section shall be understood as having the
same meaning as the term "holder of the right" in the IPIC Treaty.

10. For the purpose of this provision, "a manner contrary to honest
commercial practices" shall mean at least practices such as breach of
contract, breach of confidence and inducement to breach, and includes the
acquisition of undisclosed information by third parties who knew, or were
grossly negligent in failing to know, that such practices were involved in
the acquisition.

11. For the purpose of this Part, the term "right holder" includes
federations and associations having legal standing to assert such rights.

12. Where a Member has dismantled substantially all controls over movement
of goods across its border with another Member with which it forms part of a
customs union, it shall not be required to apply the provisions of this
Section at that border.

13. It is understood that there shall be no obligation to apply such
procedures to imports of goods put on the market in another country by or
with the consent of the right holder, or to goods in transit.

14. For the purposes of this Agreement:

- counterfeit trademark goods shall mean any goods, including
packaging, bearing without authorization a trademark which is
identical to the trademark validly registered in respect of such
goods, or which cannot be distinguished in its essential aspects
from such a trademark, and which thereby infringes the rights of
the owner of the trademark in question under the law of the
country of importation;

- pirated copyright goods shall mean any goods which are copies
made without the consent of the right holder or person duly
authorized by him in the country of production and which are made
directly or indirectly from an article where the making of that
copy would have constituted an infringement of a copyright or a
related right under the law of the country of importation.


UNDERSTANDING ON RULES AND PROCEDURES
GOVERNING THE SETTLEMENT OF DISPUTES

1. Coverage and Application

1.1 The rules and procedures of this Understanding shall apply to disputes
brought pursuant to the consultation and dispute settlement rules and
procedures of the agreements listed in Appendix 1 to this Understanding,
hereinafter referred to as the "covered agreements." The rules and
procedures of this Understanding shall also apply to consultations and the
settlement of disputes between Members concerning their rights and
obligations under the provisions of the Agreement Establishing the
Multilateral Trade Organization (MTO) and of this Understanding taken in
isolation or in combination with any other covered agreement.

1.2 These rules and procedures shall apply subject to such special or
additional rules and procedures on dispute settlement contained in the
covered agreements as are identified in Appendix 2 to this Understanding.
To the extent that there is a difference between the rules and procedures of
this Understanding and the special or additional rules and procedures set
forth in Appendix 2, the special or additional rules and procedures in
Appendix 2 shall prevail. In disputes involving rules and procedures under
more than one covered Agreement, if there is a conflict between special or
additional rules and procedures of such Agreements under review, and where
the parties to the dispute cannot agree on rules and procedures within
twenty days of the establishment of the panel, the Chairman of the Dispute
Settlement Body, in consultation with the parties to the dispute, shall
determine the rules and procedures to be followed within ten days after a
request by either Member. The Chairman of the Dispute Settlement Body shall
be guided by the principle that special or additional rules and procedures
should be used where possible, and the rules and procedures set out in this
Understanding should be used to the extent necessary to avoid conflict.

2. Administration

2.1 The Dispute Settlement Body (DSB) established pursuant to the
Agreement Establishing the MTO shall administer these rules and procedures
and, except as otherwise provided in a covered agreement, the consultation
and dispute settlement provisions of the covered agreements. Accordingly,
the DSB shall have the authority to establish panels, adopt panel and
Appellate Body reports, maintain surveillance of implementation of rulings
and recommendations, and authorize suspension of concessions and other
obligations under the covered agreements. With respect to disputes arising
under covered agreements contained in Annex 4 to the MTO Agreement, the term
"Member" as used herein shall refer only to those Members that are parties
to the relevant Annex 4 Agreements. Where the DSB administers the dispute
settlement provisions of a covered agreement contained in Annex 4, only
those Members that are parties to that agreement may participate in
decisions or actions taken by the DSB with respect to that dispute.

2.2 The DSB shall inform the relevant MTO councils and committees of any
developments in disputes related to provisions of the respective covered
agreements.

2.3 The DSB shall meet as often as necessary to carry out its functions
within the time-frames provided in this Understanding.

2.4 Where the rules and procedures of this Understanding provide for the
DSB to take a decision, it shall do so by consensus[1].

3. General Provisions

3.1 The members of the MTO (hereinafter referred to as "Members") affirm
their adherence to the principles for the management of disputes heretofore
applied under Articles XXII and XXIII of the GATT 1947, as further
elaborated and modified herein.

3.2 The dispute settlement system of the MTO is a central element in
providing security and predictability to the multilateral trading system.
The Members of the MTO recognize that it serves to preserve the rights and
obligations of Members under the covered agreements, and to clarify the
existing provisions of those agreements in accordance with customary rules
of interpretation of public international law. Recommendations and rulings
of the DSB cannot add to or diminish the rights and obligations provided in
the covered agreements.

3.3 The prompt settlement of situations in which a Member considers that
any benefits accruing to it directly or indirectly under the covered
agreements are being impaired by measures taken by another Member is
essential to the effective functioning of the MTO and the maintenance of a
proper balance between the rights and obligations of Members.

3.4 Recommendations or rulings made by the DSB shall be aimed at achieving
a satisfactory settlement of the matter in accordance with the rights and
obligations under this Understanding and under the covered agreements.

3.5 All solutions to matters formally raised under the consultation and
dispute settlement rules and procedures of the covered agreements, including
arbitration awards, shall be consistent with those agreements and shall not
nullify or impair benefits accruing to any Member under those agreements,
nor impede the attainment of any objective of those agreements.

3.6 Mutually agreed solutions to matters formally raised under the
consultation and dispute settlement provisions of the covered agreements
shall be notified to the DSB and the relevant councils and committees, where
any Member may raise any point relating thereto.

3.7 Before bringing a case, a Member shall exercise its judgement as to
whether action under these procedures would be fruitful. The aim of the
dispute settlement mechanism is to secure a positive solution to a dispute.
A solution mutually acceptable to the parties to a dispute and consistent
with the covered agreements is clearly to be preferred. In the absence of a
mutually agreed solution, the first objective of the dispute settlement
mechanism is usually to secure the withdrawal of the measures concerned if
these are found to be inconsistent with the provisions of any of the covered
agreements. The provision of compensation should be resorted to only if the
immediate withdrawal of the measure is impracticable and as a temporary
measure pending the withdrawal of the measure which is inconsistent with a
covered agreement. The last resort which this Understanding provides to the
Member invoking the dispute settlement procedures is the possibility of
suspending the application of concessions or other obligations under the
covered agreements on a discriminatory basis vis-?-vis the other Member,
subject to authorization by the DSB of such measures.

3.8 In cases where there is an infringement of the obligations assumed
under a covered agreement, the action is considered prima facie to
constitute a case of nullification or impairment. This means that there is
normally a presumption that a breach of the rules has an adverse impact on
other Members parties to that covered agreement, and in such cases, it shall
be up to the Member against whom the complaint has been brought to rebut the
charge.

3.9 The provisions of this Understanding are without prejudice to the
rights of Members to seek authoritative interpretation of provisions of a
covered agreement through decision making under the Agreement Establishing
the MTO or a covered agreement.

3.10 It is understood that requests for conciliation and the use of the
dispute settlement procedures should not be intended or considered as
contentious acts and that, if disputes arise, all Members will engage in
these procedures in good faith in an effort to resolve the disputes. It is
also understood that complaints and counter-complaints in regard to distinct
matters should not be linked.

3.11 This Understanding shall be applied only with respect to new requests
for consultations under the consultation provisions of the covered
agreements made on or after the date of entry into force of this
Understanding. With respect to disputes for which the request for
consultations was made under the GATT 1947 or under any other predecessor
agreement to the covered agreements before the date of entry into force of
this Understanding, the relevant dispute settlement rules and procedures in
effect immediately prior to the date of entry into force of this
Understanding shall continue to apply.[2]

3.12 Notwithstanding paragraph 3.11 above, if a complaint based on any of
the Agreements covered by this Understanding is brought by a developing
country Member against a developed country Member, the complaining party
shall have the rights to invoke, as an alternative to the provisions
contained in paragraphs 4, 5, 6 and 12 of this Understanding, the
corresponding provisions of the Decision of CONTRACTING PARTIES of 5 April
1966 (BISD 14S/18), except that where the Panel considers that the time
frame provided for in paragraph 7 of that decision is insufficient to
provide its report and with the agreement of the complaining party, that
time frame may be extended. To the extent that there is a difference
between the rules and procedures of those paragraphs and the corresponding
rules and procedures of the Decision, the latter shall prevail.

4. Consultations

4.1 The Members affirm their resolve to strengthen and improve the
effectiveness of the consultation procedures employed by Members.

4.2 Each Member undertakes to accord sympathetic consideration to and
afford adequate opportunity for consultation regarding any representations
made by another Member concerning measures affecting the operation of the
covered agreements taken within the territory of the former.[3]

4.3 If a request for consultations is made pursuant to a covered
agreement, the Member to which the request is made shall, unless otherwise
mutually agreed, reply to the request within ten days after its receipt and
shall enter into consultations in good faith within a period of no more than
thirty days from the date of the request, with a view to reaching a mutually
satisfactory solution. If the Member does not respond within ten days, or
does not enter into consultations within a period of no more than thirty
days, or a period otherwise mutually agreed, from the date of the request,
then the Member that requested the holding of consultations may proceed
directly to request the establishment of a panel.
4.4 All such requests for consultations shall be notified to the DSB and
the relevant Councils and Committees by the Member which requests
consultations. Any request for consultations shall be submitted in writing
and shall give the reasons for the request, including identification of the
measures at issue and an indication of the legal basis for the complaint.

4.5 In the course of consultations in accordance with the provisions of a
covered agreement, before resorting to further action under this
Understanding, Members should attempt to obtain satisfactory adjustment of
the matter.

4.6 Consultations shall be confidential, and without prejudice to the
rights of either Member in any further proceedings.

4.7 If the consultations fail to settle a dispute within sixty days after
the request for consultations, the complaining party may request the
establishment of a panel. The complaining party may request a panel during
the sixty-day period if the consulting parties jointly consider that
consultations have failed to settle the dispute.

4.8 In cases of urgency, including those which concern perishable goods,
Members shall enter into consultations within a period of no more than ten
days from the date of the request. If the consultations have failed to
settle the dispute within a period of twenty days after the request, the
complaining party may request the establishment of a panel.

4.9 In cases of urgency, including those which concern perishable goods,
the parties to the dispute, panels and the appellate body shall make every
effort to accelerate the proceedings to the greatest extent possible.

4.10 During consultations Members should give special attention to the
particular problems and interests of developing country Members.

4.11 Whenever a Member other than the consulting Members considers that it
has a substantial trade interest in consultations being held pursuant to
Article XXII:1 of the GATT, Article XXII:1 of the GATS Agreement or the
corresponding provisions in other covered agreements,[4] such Member may
notify the consulting Members and the DSB, within ten days of the
circulation of the request for consultations under said Article, of its
desire to be joined in the consultations. Such Member shall be joined in
the consultations, provided that the Member to which the request for
consultations was addressed agrees that the claim of substantial interest is
well-founded. In that event they shall so inform the DSB. If the request
to be joined in the consultations is not accepted, the applicant Member
shall be free to request consultations under Article XXII:1 or XXIII:1 of
the GATT, Article XXII:1 or XXIII:1 of the GATS Agreement or the
corresponding provisions in other covered agreements.

5. Good Offices, Conciliation and Mediation

5.1 Good offices, conciliation and mediation are procedures that are
undertaken voluntarily if the parties to the dispute so agree.

5.2 Proceedings involving good offices, conciliation and mediation, and in
particular positions taken by the parties to the dispute during these
proceedings, shall be confidential, and without prejudice to the rights of
either party in any further proceedings under these procedures.

5.3 Good offices, conciliation and mediation may be requested at any time
by any party to a dispute. They may begin at any time and be terminated at
any time. Once terminated, the complaining party can then proceed with a
request for the establishment of a panel.

5.4 When good offices, conciliation or mediation are entered into within
sixty days of a request for consultations, the complaining party must allow
a period of sixty days from the date of the request for consultations before
requesting the establishment of a panel. The complaining party may request a
panel during the sixty days if the parties to the dispute jointly consider
that the good offices, conciliation or mediation process has failed to
settle the dispute.

5.5 If the parties to a dispute agree, procedures for good offices,
conciliation or mediation may continue while the panel process proceeds.

5.6 The Director-General may, acting in an ex officio capacity, offer good
offices, conciliation or mediation with the view to assisting Members to
settle a dispute.

6. Establishment of Panels

6.1 If the complaining party so requests, a panel shall be established at
the latest at the DSB meeting following that at which the request first
appears as an item on the DSB's agenda, unless at that meeting the DSB
decides by consensus not to establish a panel.[5]

6.2 The request for the establishment of a panel shall be made in writing.
It shall indicate whether consultations were held, identify the specific
measures at issue and provide a brief summary of the legal basis of the
complaint sufficient to present the problem clearly. In case the applicant
requests the establishment of a panel with other than standard terms of
reference, the written request shall include the proposed text of special
terms of reference.

7. Terms of Reference of Panels

7.1 Panels shall have the following terms of reference unless the parties
to the dispute agree otherwise within twenty days from the establishment of
the panel:

"To examine, in the light of the relevant provisions in (name of the
covered agreement/s cited by the parties to the dispute), the matter
referred to the DSB by (name of party) in document DS/... and to make such
findings as will assist the DSB in making the recommendations or in giving
the rulings provided for in that/those agreement/s."

7.2 Panels shall address the relevant provisions in any covered
agreement/s cited by the parties to the dispute.

7.3 In establishing a panel, the DSB may authorize its Chairman to draw up
the terms of reference of the panel in consultation with the parties to the
dispute subject to the provisions of paragraph 7.1 above. The terms of
reference thus drawn up shall be circulated to all Members. If other than
standard terms of reference are agreed upon, any Member may raise any point
relating thereto in the DSB.

8. Composition of Panels

8.1 Panels shall be composed of well-qualified governmental and/or
non-governmental individuals, including persons who have served on or
presented a case to a panel, served as a representative of an MTO Member or
of a contracting party to the GATT 1947 or as a representative to a council
or committee of any covered agreement or its predecessor agreement, or in
the Secretariat, taught or published on international trade law or policy,
or served as a senior trade policy official of a Member.

8.2 Panel members should be selected with a view to ensuring the
independence of the members, a sufficiently diverse background and a wide
spectrum of experience.

8.3 Citizens of Members whose governments[6] are parties to the dispute
or third parties as defined in paragraph 10.2 shall not serve on a panel
concerned with that dispute, unless the parties to the dispute agree
otherwise.

8.4 To assist in the selection of panelists, the Secretariat shall
maintain an indicative list of governmental and non-governmental individuals
possessing the qualifications outlined in paragraph 1 above, from which
panelists may be drawn as appropriate. That list shall include the roster
of non-governmental panelists that was established by the GATT CONTRACTING
PARTIES on 30 November 1984 (BISD 31S/9), and other rosters and indicative
lists established under any of the covered agreements, and shall retain the
names of persons on those rosters and indicative lists at the time of entry
into force of this Understanding. Members may periodically suggest names of
governmental and non-governmental individuals for inclusion on the
indicative list, providing relevant information on their knowledge of
international trade and of the sectors or subject matter of the covered
agreements, and those names shall be added to the list upon approval by the
DSB. For each of the individuals on the list, the list shall indicate
specific areas of experience or expertise of the individuals in the sectors
or subject matter of the covered agreements.

8.5 Panels shall be composed of three panelists unless the parties to the
dispute agree, within ten days from the establishment of the panel, to a
panel composed of five panelists. Members shall be informed promptly of the
composition of the Panel.

8.6 The Secretariat shall propose nominations for the panel to the parties
to the dispute. The parties to the dispute shall not oppose nominations
except for compelling reasons.

8.7 If there is no agreement on the panelists within twenty days from the
establishment of a panel, at the request of either party, the
Director-General in consultation with the Chairman of the DSB, and the
Chairman of the relevant committee or council, shall form the panel by
appointing the panelists whom he or she considers most appropriate in
accordance with any relevant special or additional procedure of the covered
agreement, after consulting with the parties to the dispute. The Chairman
of the DSB shall inform the Members of the composition of the panel thus
formed no later than ten days from the date he or she receives such a
request.

8.8 Members shall undertake, as a general rule, to permit their officials
to serve as panelists.

8.9 Panelists shall serve in their individual capacities and not as
government representatives, nor as representatives of any organization.
Governments shall therefore not give them instructions nor seek to influence
them as individuals with regard to matters before a panel.

8.10 When a dispute is between a developing country Member and a developed
country Member the panel shall, if the developing country Member so
requests, include at least one panelist from a developing country Member.

8.11 Panelists' expenses, including travel and subsistence allowance,
shall be met from the MTO budget in accordance with criteria to be adopted
by the General Council of the MTO, based on recommendations of the Committee
on Budget, Finance and Administration.

9. Procedures for Multiple Complainants

9.1 Where more than one Member requests the establishment of a panel
related to the same matter, a single panel may be established to examine
these complaints taking into account the rights of all Members concerned. A
single panel should be established to examine such complaints whenever
feasible.

9.2 The single panel will organize its examination and present its
findings to the DSB so that the rights which the parties to the dispute
would have enjoyed had separate panels examined the complaints are in no way
impaired. If one of the parties to the dispute so requests, the panel will
submit separate reports on the dispute concerned. The written submissions by
each of the complainants will be made available to the other complainants,
and each complainant will have the right to be present when one of the other
complainants presents its view to the panel.

9.3 If more than one panel is established to examine the complaints
related to the same matter, to the greatest extent possible the same persons
shall serve as panelists on each of the separate panels and the timetable
for the panel process in such disputes shall be harmonized.

10. Third Parties

10.1 The interests of the parties to a dispute and those of other
Members[7] of a covered agreement at issue in the dispute shall be fully
taken into account during the panel process.

10.2 Any Member, of a covered agreement at issue in a dispute, having a
substantial interest in a matter before a panel and having notified its
interest to the DSB, (hereinafter referred to as a "third party") shall have
an opportunity to be heard by the panel and to make written submissions to
the panel. These submissions shall also be given to the parties to the
dispute and shall be reflected in the panel report.

10.3 Such third parties shall receive submissions of the parties to the
dispute for the first meeting of the panel.

10.4 If a third party considers a measure already the subject of a panel
proceeding nullifies or impairs benefits accruing to it under any covered
agreement, that Member may have recourse to normal dispute settlement
procedures under this Understanding. Such a dispute shall be referred to the
original panel wherever possible.

11. Function of Panels

11.1 The function of panels is to assist the DSB in discharging its
responsibilities under this Understanding and the covered agreements.
Accordingly, a panel should make an objective assessment of the matter
before it, including an objective assessment of the facts of the case and
the applicability of and conformity with the relevant covered agreements,
and make such other findings as will assist the DSB in making the
recommendations or in giving the rulings provided for in the covered
agreements. Panels should consult regularly with the parties to the dispute
and give them adequate opportunity to develop a mutually satisfactory
solution.

12. Panel Procedures

12.1 Panels shall follow the Working Procedures appended hereto unless the
panel decides otherwise after consulting the parties to the dispute.

12.2 Panel procedures should provide sufficient flexibility so as to ensure
high-quality panel reports, while not unduly delaying the panel process.

12.3 After consulting the parties to the dispute, the panelists shall, as
soon as practicable and whenever possible within one week after the
composition and terms of reference of the panel have been agreed upon, fix
the timetable for the panel process, taking into account the provisions of
paragraph 4.9, if relevant.

12.4 In determining the timetable for the panel process, the panel shall
provide sufficient time for the parties to the dispute to prepare their
submissions.

12.5 Panels should set precise deadlines for written submissions by the
parties and the parties should respect those deadlines.

12.6 Each party to the dispute shall deposit its written submissions with
the Secretariat for immediate transmission to the panel and to the other
party or parties to the dispute. The complaining party shall submit its
first submission in advance of the responding party's first submission
unless the panel decides, in fixing the timetable referred to in paragraph
12.3 above and after consultations with the parties to the dispute, that the
parties should submit their first submissions simultaneously. When there
are sequential arrangements for the deposit of first submissions, the panel
shall establish a firm time period for receipt of the responding party's
submission. Any subsequent written submissions shall be submitted
simultaneously.

12.7 Where the parties to the dispute have failed to develop a mutually
satisfactory solution, the panel shall submit its findings in a written
form. In such cases, the report of a panel shall set out the findings of
fact, the applicability of relevant provisions and the basic rationale
behind any findings and recommendations that it makes. Where a settlement of
the matter among the parties to the dispute has been found, the report of
the panel shall be confined to a brief description of the case and to
reporting that a solution has been reached.

12.8 In order to make the procedures more efficient, the period in which
the panel shall conduct its examination, from the time the composition and
terms of reference of the panel have been agreed upon to the time when the
final report is provided to the parties to the dispute, shall, as a general
rule, not exceed six months. In cases of urgency, including those relating
to perishable goods, the panel shall aim to provide its report to the
parties to the dispute within three months.

12.9 When the panel considers that it cannot provide its report within six
months, or within three months in cases of urgency, it shall inform the DSB
in writing of the reasons for the delay together with an estimate of the
period within which it will submit its report. In no case should the period
from the establishment of the panel to the submission of the report to the
Members exceed nine months.

12.10 In the context of consultations involving a measure taken by a
developing country Member, the parties may agree to extend the periods
established in paragraphs 4.7 and 4.8. If, after the relevant period has
elapsed, the consulting parties cannot agree that the consultations have
concluded, the Chairman of the DSB shall decide, after consultation with the
parties, whether to extend the relevant period and, if so, for how long. In
addition, in examining a complaint against a developing country Member, the
panel shall accord sufficient time for the developing country Member to
prepare and present its argumentation. The provisions of paragraphs 20.1 and
21.4 are not affected by any action pursuant to this paragraph.

12.11 Where one or more of the parties is a developing country Member, the
panel's report shall explicitly indicate the form in which account has been
taken of relevant provisions on differential and more-favourable treatment
for developing country Members that form part of the covered agreements
which have been raised by the developing country Member in the course of the
dispute settlement procedures.

12.12 The panel may suspend its work at any time at the request of the
complaining party for a period not to exceed twelve months. In the event of
such a suspension, the time frames set out in paragraphs 12.8, 12.9, 20.1
and 21.4 shall be extended by the amount of time that the work was
suspended. If the work of the panel has been suspended for more than twelve
months, the authority for establishment of the panel shall lapse.

13. Right to Seek Information

13.1 Each panel shall have the right to seek information and technical
advice from any individual or body which it deems appropriate. However,
before a panel seeks such information or advice from any individual or body
within the jurisdiction of a Member it shall inform the authorities of that
Member. A Member should respond promptly and fully to any request by a
panel for such information as the panel considers necessary and appropriate.
Confidential information which is provided shall not be revealed without
formal authorization from the individual, body, or authorities of the
Member providing the information.

13.2 Panels may seek information from any relevant source and may consult
experts to obtain their opinion on certain aspects of the matter. With
respect to a factual issue concerning a scientific or other technical matter
raised by a party to a dispute, a panel may request an advisory report in
writing from an expert review group. Rules for the establishment of such a
group and its procedures are set forth in Appendix 4.

14. Confidentiality

14.1 Panel deliberations shall be confidential.

14.2 The reports of panels shall be drafted without the presence of the
parties to the dispute in the light of the information provided and the
statements made.

14.3 Opinions expressed in the panel report by individual panelists shall
be anonymous.

15. Interim Review Stage

15.1 Following the consideration of rebuttal submissions and oral
arguments, the panel shall submit the descriptive (factual and argument)
sections of its draft report to the parties. Within a period of time set by
the panel, the parties shall submit their comments in writing.

15.2 Following the deadline for receipt of comments from the parties, the
panel shall issue an interim report to the parties, including both the
descriptive sections and the panel's findings and conclusions. Within a
period of time set by the panel, a party may submit a written request for
the panel to review precise aspects of the interim report prior to
circulation of the final report to the Members. At the request of a party,
the panel shall hold a further meeting with the parties on the issues
identified in the written comments. If no comments are received from any
party within the comment period, the interim report shall be considered the
final panel report and circulated promptly to the Members.

15.3 The findings of the final panel report shall include a discussion of
the arguments made at the interim review stage. The interim review stage
shall be conducted within the time period set out in paragraph 12.8.

16. Adoption of Panel Reports

16.1 In order to provide sufficient time for the Members of the DSB to
consider panel reports, the reports shall not be considered for adoption by
the DSB until twenty days after they have been issued to the Members.

16.2 Members having objections to panel reports shall give written reasons
to explain their objections for circulation at least ten days prior to the
DSB meeting at which the panel report will be considered.

16.3 The parties to a dispute shall have the right to participate fully in
the consideration of the panel report by the DSB, and their views shall be
fully recorded.

16.4 Within sixty days of the issuance of a panel report to the Members,
the report shall be adopted at a DSB meeting[8] unless one of the parties to
the dispute formally notifies the DSB of its decision to appeal or the DSB
decides by consensus not to adopt the report. If a party has notified its
intention to appeal, the report by the panel shall not be considered for
adoption by the DSB until after completion of the appeal. This adoption
procedure is without prejudice to the right of Members to express their
views on a panel report.

17. Appellate Review

Standing Appellate Body

17.1 A standing Appellate Body shall be established by the DSB. The
Appellate Body shall hear appeals from panel cases. It shall be composed of
seven persons, three of whom shall serve on any one case. Persons serving
on of the Appellate Body shall serve in rotation. Such rotation shall be
determined in the working procedures of the Appellate Body.

17.2 The DSB shall appoint persons to serve on the Appellate Body for a
four-year term, and each person may be reappointed once. However, the terms
of three of the seven persons appointed immediately after the entry into
force of this Understanding shall expire at the end of two years, to be
determined by lot. Vacancies shall be filled as they arise. A person
appointed to replace a person whose term of office has not expired shall
hold office for the remainder of his or her predecessor's term.

17.3 The Appellate Body shall be comprised of persons of recognized
authority, with demonstrated expertise in law, international trade and the
subject matter of the covered agreements generally. They shall be
unaffiliated with any government. The Appellate Body membership shall be
broadly representative of membership in the MTO. All persons serving on the
Appellate Body shall be available at all times and on short notice, and
shall stay abreast of dispute settlement activities and other relevant
activities of the MTO. They shall not participate in the consideration of
any disputes that would create a direct or indirect conflict of interest.

17.4 Only parties to the dispute, not third parties, may appeal a panel
decision. Third parties which have notified the DSB of a substantial
interest in the matter pursuant to paragraph 10.2 may make written
submissions to, and be given an opportunity to be heard by, the Appellate
Body.

17.5 As a general rule, the proceedings shall not exceed sixty days from
the date a party to the dispute formally notifies its intent to appeal to
the date the Appellate Body issues its decision. In fixing its timetable
the Appellate Body shall take into account the provisions of paragraph 4.9,
if relevant. When the Appellate Body considers that it cannot provide its
report within sixty days, it shall inform the DSB in writing of the reasons
for the delay together with an estimate of the period within which it will
submit its report. In no case shall the proceedings exceed ninety days.

17.6 An appeal shall be limited to issues of law covered in the panel
report and legal interpretation developed by the panel.

17.7 The Appellate Body shall be provided with appropriate administrative
and legal support as it requires.

17.8 The expenses of persons serving on the Appellate Body, including
travel and subsistence allowance, shall be met from the MTO budget in
accordance with criteria to be adopted by the General Council of the MTO,
based on recommendations of the Committee on Budget, Finance and
Administration.

Procedures for Appellate Review

17.9 Working procedures shall be drawn up by the Appellate Body in
consultation with the Chairman of the DSB and the Director-General, and
communicated to the Members for their information.

17.10 The proceedings of the Appellate Body shall be confidential. The
reports of the Appellate Body shall be drafted without the presence of the
parties to the dispute and in the light of the information provided and the
statements made.

17.11 Opinions expressed in the Appellate Body report by individuals
serving on the Appellate Body shall be anonymous.

17.12 The Appellate Body shall address each of the issues raised in
accordance with paragraph 17.6 during the appellate proceeding.

17.13 The Appellate Body may uphold, modify or reverse the legal findings
and conclusions of the panel.

Adoption of Appellate Reports

17.14 An appellate report shall be adopted by the DSB and unconditionally
accepted by the parties to the dispute unless the DSB decides by consensus
not to adopt the appellate report within thirty days following its issuance
to the Members.[9] This adoption procedure is without prejudice to the right
of Members to express their views on an appellate report.

18. Communications with the panel or Appellate Body

18.1 There shall be no ex parte communications with the panel or Appellate
Body concerning matters under consideration by the panel or Appellate Body.

18.2 Written submissions to the panel or the Appellate Body shall be
treated as confidential, but shall be made available to the parties to the
dispute. Nothing in this Understanding shall preclude a party to a dispute
from disclosing statement of its own positions to the public. Members shall
treat as confidential, information submitted by another Member to the panel
or the Appellate Body which that Member has designated as confidential. A
party to a dispute shall also, upon request of a Member, provide a
non-confidential summary of the information contained in its written
submissions that could be disclosed to the public.

19. Panel and Appellate Body Recommendations

19.1 Where a panel or the Appellate Body concludes that a measure is
inconsistent with a covered agreement, it shall recommend that the Member
concerned[10] bring the measure into conformity with that Agreement. [11] In
addition to its recommendations, the panel or Appellate Body may suggest
ways in which the Member concerned could implement the recommendations.

19.2 In accordance with paragraph 3.2 above, in their findings and
recommendations, the panel and Appellate Body cannot add to or diminish the
rights and obligations provided in the covered agreements.

20. Time-Frame for DSB Decisions

20.1 Unless otherwise agreed to by the parties to the dispute, the period
from the establishment of the Panel by the DSB until the DSB considers the
panel or appellate report for adoption shall not as a general rule exceed
nine months where the report is not appealed or twelve months where the
report is appealed. Where either the panel or the Appellate Body has acted,
pursuant to paragraph 12.9 or 17.5, to extend the time of providing its
report, the additional time taken shall be added to the above periods.

21. Surveillance of Implementation of Recommendations and Rulings

21.1 Prompt compliance with recommendations or rulings of the DSB is
essential in order to ensure effective resolution of disputes to the benefit
of all Members.

21.2 Particular attention should be paid to matters affecting the interests
of developing country Members with respect to measures which have been
subject to dispute settlement.

21.3 At a DSB meeting held within thirty days[12] of the adoption of the
panel or Appellate Body report, the Member concerned shall inform the DSB of
its intentions in respect of implementation of the recommendations and
rulings of the DSB. If it is impracticable to comply immediately with the
recommendations and rulings, the Member concerned shall have a reasonable
period of time in which to do so. The reasonable period of time shall be:

(a) the period of time proposed by the Member concerned, provided
that such period is approved by the DSB; or, in the absence of
such approval,

(b) a period of time mutually agreed by the parties to the dispute
within forty-five days following adoption of the recommendations
and rulings; or, in the absence of such agreement,

© a period of time determined through binding arbitration within
ninety days following adoption of the recommendations and
rulings. [13] In such arbitration, a guideline for the
arbitrator[14] should be that the reasonable period of time to
implement panel or Appellate Body recommendations should not
exceed fifteen months from the adoption of a panel or Appellate
Body report. However, that time may be shorter or longer,
depending upon the particular circumstances.

21.4 Except where the panel or the Appellate Body has extended, pursuant to
paragraph 12.9 or 17.5, the time of providing its report, the period from
the date of establishment of the panel by the DSB until the determination of
the reasonable period of time shall not exceed fifteen months unless the
parties to the dispute agree otherwise. Where either the panel or the
Appellate Body has acted to extend the time of providing its report, the
additional time taken shall be added to the fifteen-month period; provided
that unless the parties to the dispute agree that there are exceptional
circumstances, the total time shall not exceed eighteen months.

21.5 Where there is disagreement as to the existence or consistency with a
covered agreement of measures taken to comply with the recommendations and
rulings such dispute shall be decided through recourse to these dispute
settlement procedures, involving resort to the original panel wherever
possible. The panel shall issue its decision within ninety days of referral
of the matter to it. When the panel considers that it cannot provide its
report within this time frame, it shall inform the DSB in writing of the
reasons for the delay together with an estimate of the period within which
it will submit its report.

21.6 The DSB shall keep under surveillance the implementation of adopted
recommendations or rulings. The issue of implementation of the
recommendations or rulings may be raised at the DSB by any Member at any
time following their adoption. Unless the DSB decides otherwise, the issue
of implementation of the recommendations or rulings shall be on the agenda
of the DSB meeting after six months following the establishment of the
reasonable period of time pursuant to paragraph 21.3 and shall remain on the
DSB's agenda until the issue is resolved. At least ten days prior to each
such DSB meeting, the Member concerned shall provide the DSB with a status
report in writing of its progress in the implementation of the
recommendations or rulings.

21.7 If the matter is one which has been raised by a developing country
Member the DSB shall consider what further action it might take which would
be appropriate to the circumstances.

21.8 If the case is one brought by a developing country Member, in
considering what appropriate action might be taken, the DSB shall take into
account not only the trade coverage of measures complained of, but also
their impact on the economy of developing country Members concerned.

22. Compensation and the Suspension of Concessions

22.1 Compensation and the suspension of concessions or other obligations
are temporary measures available in the event that the recommendations and
rulings are not implemented within a reasonable period of time. However,
neither compensation nor the suspension of concessions or other obligations
is preferred to full implementation of a recommendation to bring a measure
into conformity with the covered agreements. Compensation is voluntary and,
if granted, shall be consistent with the covered agreements.

22.2 If the Member concerned fails to bring the measure found to be
inconsistent with a covered agreement into compliance therewith or otherwise
comply with the recommendations and rulings within the reasonable period of
time determined pursuant to paragraph 21.3 above, such Member shall, if so
requested, and no later than the expiry of the reasonable period of time,
enter into negotiations with any party having invoked the dispute settlement
procedures, with a view to developing mutually acceptable compensation. If
no satisfactory compensation has been agreed within twenty days after the
expiry of the reasonable period of time, any party having invoked the
dispute settlement procedures may request authorization from the DSB to
suspend the application to the Member concerned of concessions or other
obligations under the covered agreements.

22.3 In considering what concessions or other obligations to suspend, the
complaining party shall apply the following principles and procedures:

(a) The general principle is that the complaining party should first
seek to suspend concessions or other obligations with respect to
the same sector(s) as that in which the panel or Appellate Body
has found a violation or other nullification or impairment.

(b) If that party considers that it is not practicable or effective
to suspend concessions or other obligations with respect to the
same sectors, it may seek to suspend concessions or other
obligations in other sectors under the same agreement.

© If that party considers that it is not practicable or effective
to suspend concessions or other obligations with respect to
other sectors under the same agreement, and that the
circumstances are serious enough, it may seek to suspend
concessions or other obligations under another covered agreement.

(d) In applying the above principles, that party shall take into
account:

(i) the trade in the sector or under the agreement under which
the panel or Appellate Body has found a violation or other
nullification or impairment, and the importance of such
trade to that party;

(ii) the broader economic elements related to the nullification
or impairment and the broader economic consequences of the
suspension of concessions or other obligations.

(e) If that party decides to request authorization to suspend
concessions or other obligations pursuant to (b) or © above, it
shall state the reasons therefor in its request. At the same
time as the request is forwarded to the DSB, it also shall be
forwarded to the relevant Councils and also, in the case of a
request pursuant to (b), the relevant sectoral bodies.

(f) For purposes of this paragraph, "sector" means:

- With respect to goods, all goods;

- With respect to services, a principal sector as identified
in the current "Services Sectoral Classification List"
which identifies such sectors;[15]

- With respect to trade-related intellectual property rights,
each of the categories of intellectual property rights
covered in Section 1, or Section 2, or Section 3, or
Section 4, or Section 5, or Section 6, or Section 7 of
Part II, or the obligations under Part III, or Part IV of
the Agreement on Trade-Related Aspects of Intellectual
Property Rights, including Trade in Counterfeit Goods
("Agreement on TRIPS").

(g) For purposes of this paragraph, "agreement" means:

- With respect to goods, the agreements listed in Annex 1A of
the MTO Agreement, taken as a whole as well as the
agreements listed in Annex 4 of the MTO Agreement in so far
as the relevant parties to the dispute are parties to these
agreements;

- With respect to services, the GATS;

- With respect to intellectual property rights, the Agreement
on TRIPS.

22.4 The level of the suspension of concessions or other obligations
authorized by the DSB shall be equivalent to the level of the nullification
or impairment.

22.5 The Dispute Settlement Body shall not authorize suspension of
concessions or other obligations if a covered agreement prohibits such
suspension.

22.6 When the situation described in paragraph 22.2 above occurs, the DSB,
upon request, shall grant authorization to suspend concessions or other
obligations within thirty days of the expiry of the reasonable period of
time unless the DSB decides by consensus to reject the request. However, if
the Member concerned objects to the level of suspension proposed, or claims
that the principles and procedures set forth in paragraph 22.3 above have
not been followed where a complaining party has requested authorization to
suspend concessions or other obligations pursuant to paragraph 22.3(b) or
© above, the matter shall be referred to arbitration. Such arbitration
shall be carried out by the original panel, if members are available, or by
an arbitrator[16] appointed by the Director-General and shall be completed
within sixty days of the expiry of the reasonable period of time.
Concessions or other obligations shall not be suspended during the course of
the arbitration.

22.7 The arbitrator[17] acting pursuant to paragraph 22.6 above shall not
examine the nature of the concessions or other obligations to be suspended
but shall determine whether the level of such suspension is equivalent to
the level of nullification or impairment. The arbitrator may also determine
if the proposed suspension of concessions or other obligations is allowed
under the covered agreement.* However, if the matter referred to
arbitration includes a claim that the principles and procedures set forth in
paragraph 22.3 above have not been followed, the arbitrator shall examine
that claim. In the event the arbitrator determines that those principles
and procedures have not been followed, the complaining party shall apply
them consistent with paragraph 22.3 above. The parties shall accept the
arbitrator's decision as final and the parties concerned shall not seek a
second arbitration. The DSB shall be informed promptly of the decision of
the arbitrator and shall upon request, grant authorization to suspend
concessions or other obligations where the request is consistent with the
decision of the arbitrator, unless the DSB decides by consensus to reject
the request.

22.8 The suspension of concessions or other obligations shall be temporary
and shall only be applied until such time as the measure found to be
inconsistent with a covered agreement has been removed, or the Member that
must implement recommendations or rulings provides a solution to the
nullification or impairment of benefits, or a mutually satisfactory solution
is reached. In accordance with paragraph 21.6 above, the DSB shall continue
to keep under surveillance the implementation of adopted recommendations or
rulings, including those cases where compensation has been provided or
concessions or other obligations have been suspended but the recommendations
to bring a measure into conformity with the covered agreements have not been
implemented.

22.9 The dispute settlement provisions of the covered agreements may be
invoked in respect of measures affecting their observance taken by regional
or local governments or authorities within the territory of a Member. When
the DSB has ruled that a provision of a covered agreement has not been
observed, the responsible Member shall take such reasonable measures as may
be available to it to ensure its observance. The provisions of the covered
agreements and this Understanding relating to compensation and suspension of
concessions or other obligations apply in cases where it has not been
possible to secure such observance.[18]

23. Strengthening of the Multilateral System

23.1 When Members seek the redress of a violation of obligations or other
nullification or impairment of benefits under the covered agreements or an
impediment to the attainment of any objective of the covered agreements,
they shall have recourse to, and abide by, the rules and procedures of this
Understanding.

23.2 In such cases, Members shall:

(a) not make a determination to the effect that a violation has
occurred, that benefits have been nullified or impaired or that
the attainment of any objective of the covered agreements has
been impeded, except through recourse to dispute settlement in
accordance with the rules and procedures of this Understanding,
and shall make any such determination consistent with the
findings contained in the panel or Appellate Body report adopted
by the DSB or an arbitration award rendered under this
Understanding;

(b) follow the procedures set forth in Section 21 of this
Understanding to determine the reasonable period of time for the
Member concerned to implement the recommendations and rulings;
and

© follow the procedures set forth in Section 22 of the
Understanding to determine the level of suspension of concessions
or other obligations and obtain DSB authorization in accordance
with those procedures before suspending concessions or other
obligations under the covered agreements in response to the
failure of the Member concerned to implement the recommendations
and rulings within that reasonable period of time.

24. Special Procedures involving Least-Developed Country Members

24.1 At all stages of the determination of the causes of a dispute and of
dispute settlement procedures involving a least-developed country Member,
particular consideration shall be given to the special situation of
least-developed country Members. In this regard, Members shall exercise due
restraint in raising matters under these procedures involving a least
developed country Member. If nullification or impairment is found to result
from a measure taken by a least developed country Member, complaining
parties shall exercise due restraint in asking for compensation or seeking
authorization to suspend the application of concessions or other obligations
pursuant to these procedures.

24.2 In dispute settlement cases involving a least-developed country Member
where a satisfactory solution has not been found in the course of
consultations the Director-General or the Chairman of the DSB shall, upon
request by a least-developed country Member offer their good offices,
conciliation and mediation with a view to assisting the parties to settle
the dispute, before a request for a panel is made. The Director-General or
the Chairman of the DSB, in providing the above assistance, may consult any
source which they deem appropriate.

25. Arbitration

25.1 Expeditious arbitration within the MTO as an alternative means of
dispute settlement can facilitate the solution of certain disputes that
concern issues that are clearly defined by both parties.

25.2 Except as otherwise provided in this Understanding, resort to
arbitration shall be subject to mutual agreement of the parties which shall
agree on the procedures to be followed. Agreements to resort to arbitration
shall be notified to all Members sufficiently in advance of the actual
commencement of the arbitration process.

25.3 Other Members may become party to an arbitration proceeding only upon
the agreement of the parties which have agreed to have recourse to
arbitration. The parties to the proceeding shall agree to abide by the
arbitration award. Arbitration awards shall be notified to the DSB and the
council or committee of any relevant agreement where any Member may raise
any point relating thereto.

25.4 Sections 21 and 22 of this Understanding shall apply mutatis mutandis
to arbitration awards.

26. Non-Violation

26.1 Complaints of the Type Described in Article XXIII:1(b) of GATT 1994

Where the provisions of Article XXIII:1(b) of the GATT 1994 are
applicable to a covered agreement, a panel or the Appellate Body may only
make rulings and recommendations where a party
to the dispute considers that any benefit accruing to it directly or
indirectly under the relevant covered agreement is being nullified or
impaired or the attainment of any objective of that Agreement is being
impeded as a result of the application by a Member of any measure, whether
or not it conflicts with the provisions of that Agreement. Where and to the
extent that such party considers and a panel or the Appellate Body
determines that a case concerns a measure that does not conflict with the
provisions of a covered agreement to which the provisions of Article
XXIII:1(b) of GATT 1994 are applicable, the procedures in this Understanding
shall apply, subject to the following:

(a) The complaining party shall present a detailed justification in
support of any complaint relating to a measure which does not
conflict with the relevant covered agreement.

(b) Where a measure has been found to nullify or impair benefits
under, or impede the attainment of objectives, of the relevant
covered agreement without violation thereof, there is no
obligation to withdraw the measure. However, in such cases, the
panel or the Appellate Body shall recommend that the Member
concerned make a mutually satisfactory adjustment.

© Notwithstanding the provisions of paragraph 21, the arbitration
provided for in paragraph 21.3, upon request of either party, may
include a determination of the level of benefits which have been
nullified or impaired, and may also suggest ways and means of
reaching a mutually satisfactory adjustment; such suggestions
shall not be binding upon the parties.

(d) Notwithstanding the provisions of paragraph 22.1, compensation
may be part of a mutually satisfactory adjustment as final
settlement of the dispute.

26.2 Complaints of the Type Described in Article XXIII:1© of GATT 1994

Where the provisions of Article XXIII:1© of the GATT 1994 are
applicable to a covered agreement, a panel may only make rulings and
recommendations where a party considers that any benefit accruing to it
directly or indirectly under the relevant covered agreement is being
nullified or impaired or the attainment of any objective of that Agreement
is being impeded as a result of the existence of any situation other than
those to which the provisions of Article XXIII:1(a) and (b) of GATT 1994 are
applicable. Where and to the extent that such party considers and a panel
determines that the matter is covered by this paragraph, the procedures of
this Understanding shall apply only up to and including the point in the
proceedings where the panel report has been issued to the Members. The
dispute settlement rules and procedures contained in the Decision of the
GATT Council of Representatives of 12 April 1989 (BISD 36S/61) shall apply
to consideration for adoption, and surveillance and implemation of
recommendations and rulings. The following shall also apply:

(a) The complaining party shall present a detailed justification in
support of any argument made with respect to issues covered under
this paragraph.

(b) In cases involving matters covered by this paragraph, if a panel
finds that cases also involve dispute settlement matters other
than those covered by this paragraph, the panel shall issue a
report addressing any such matters and a separate report on
matters falling under this paragraph.


27. Responsibilities of the Secretariat

27.1 The MTO Secretariat shall have the responsibility of assisting the
panels, especially on the legal, historical and procedural aspects of the
matters dealt with, and of providing secretarial and technical support.

27.2 While the Secretariat assists Members in respect of dispute settlement
at their request, there may also be a need to provide additional legal
advice and assistance in respect of dispute settlement to developing
country Members. To this end, the Secretariat shall make available a
qualified legal expert from the MTO technical co-operation services to any
developing country Member which so requests. This expert shall assist the
developing country Member in a manner ensuring the continued impartiality of
the Secretariat.

27.3 The Secretariat shall conduct special training courses for interested
Members concerning these dispute settlement procedures and practices so as
to enable Members' experts to be better informed in this regard.

APPENDIX 1

AGREEMENTS COVERED BY THE UNDERSTANDING


A) Agreement Establishing the Multilateral Trade Organization

B) Annex 1A: Agreements on trade in goods
Annex 1B: General Agreement on Trade in Services
Annex 1C: Agreement on Trade-Related Aspects of Intellectual Property
Rights, including Trade in Counterfeit Goods

Annex 2: Understanding on Rules and Procedures Governing the
Settlement of Disputes

C) Annex 4: Agreement on Trade in Civil Aircraft
Agreement on Government Procurement
International Dairy Arrangement
Arrangement Regarding Bovine Meat

The applicability of this Understanding to Annex 4 Agreements shall be
subject to the adoption of a decision by the Signatories of each Agreement
setting out the terms for the application of the Understanding to the
individual agreement, including any special or additional rules or
procedures for inclusion in Appendix 2, as notified to the Dispute
Settlement Body.


















APPENDIX 2

SPECIAL OR ADDITIONAL RULES AND PROCEDURES

CONTAINED IN THE COVERED AGREEMENTS


Agreement Rules and Procedures

Anti-Dumping 17.4 to 17.7

Technical Barriers to Trade 14.2 to 14.4, Annex 2

Subsidies and Countervailing Measures 4.2 to 4.12, 6.6, 7.2 to 7.10, 8.5,
footnote 33, 25.3 to 25.4, 28.6,
Annex V

Customs Valuation 19.3 to 19.5, Annex II.2(f), 3, 9, 21

Sanitary and Phytosanitary Regulations 36

Textiles 2.14, 2.21, 4.4, 5.2, 5.4, 5.6, 6.9,
6.10, 6.11, 8.1 to 8.12

General Agreement on Trade in Services XXII:3, XXIII:3
Financial Services 4.1
Air Transport Services 4
Minsterial Decision on Services Disputes1 to 5

The list of rules and procedures in this Appendix includes provisions where
only a part of the provision may be relevant in this context.

Any special or additional rules or procedures in ANNEX 4 Agreements as
determined by the competent bodies of each Agreement and as notified to the
DSB.




APPENDIX 3

WORKING PROCEDURES

l. In its proceedings the panel will follow the relevant provisions of the
Understanding on Rules and Procedures Governing the Settlement of Disputes.
In addition, the following working procedures will apply.

2. The panel will meet in closed session. The parties to the dispute, or
other interested parties, will be present at the meetings only when invited
by the panel to appear before it.

3. The deliberations of the panel and the documents submitted to it will
be kept confidential. Nothing in this Understanding shall preclude a party
to a dispute from disclosing statements of its own positions to the public.
Members shall treat as confidential, information submitted by another Member
to the panel which that Member has designated as confidential. Where a
party to a dispute submits a confidential version of its written submissions
to the panel, it shall also, upon request of a Member, provide a
non-confidential summary of the information contained in its submissions
that could be disclosed to the public.

4. Before the first substantive meeting of the panel with the parties,
both parties to the dispute shall transmit to the panel written submissions
in which they present the facts of the case and their arguments.

5. At its first substantive meeting with the parties, the panel will ask
the party which has brought the complaint to present its case.
Subsequently, and still at the same meeting, the party against which the
complaint has been brought will be asked to present its point of view.

6. All third parties which have notified their interest in the dispute to
the DSB shall be invited in writing to present their views during a session
of the first substantive meeting of the panel set aside for that purpose.
All such third parties may be present during the entirety of this session.

7. Formal rebuttals will be made at a second substantive meeting of the
panel. The party complained against will have the right to take the floor
first to be followed by the complaining party. Both parties shall submit,
prior to that meeting, written rebuttals to the panel.

8. The panel may at any time put questions to the parties and ask them for
explanations either in the course of a meeting with the parties or in
writing.

9. The parties to the dispute and any third party invited to present its
views in accordance with Section 8 of the Understanding shall make available
to the panel a written version of their oral statements.

10. In the interest of full transparency, the presentations, rebuttals and
statements referred to in paragraphs 5 to 9 above will be made in the
presence of both parties. Moreover, each party's written submissions,
including any comments on the descriptive part of the report and responses
to questions put by the panel, will be made available to the other party.

11. Any additional procedures specific to the panel.

12. The panel proposes the following timetable for its work:

(a) Receipt of first written
submissions of the Parties:

(l) complaining Party:_______ 3-6 weeks
(2) Party complained
against:_______ 2-3 weeks

(b) Date, time and place of
first substantive meeting
with the Parties; Third
Party session:_______ 1-2 weeks

© Receipt of written rebuttals
of the Parties:_______ 2-3 weeks

(d) Date, time and place of
second substantive meeting
with the Parties:_______ 1-2 weeks

(e) Submission of descriptive
part of the report to the
Parties: _______ 2-4 weeks

(f) Receipt of comments by the
Parties on the descriptive
part of the report:_______ 2 weeks

(g) Submission of the interim
report, including the find-
ings and conclusions, to
the Parties: _______ 2-4 weeks

(h) Deadline for Party to request
review of part(s) of report:_______ 1 week

(i) Period of review by panel,
including possible additional
meeting with Parties:_______ 2 weeks

(j) Submission of final report
to Parties to dispute:_______ 2 weeks

(k) Circulation of the final report
to the Members:_______ 3 weeks

The above calendar may be changed in the light of unforeseen
developments. Additional meetings with the Parties will be scheduled if
required.

APPENDIX 4

EXPERT REVIEW GROUPS

The following rules and procedures shall apply to expert review groups
established in accordance with the provisions of Article 13.2.

1. Expert review groups are under the panel's authority. Their terms of
reference and detailed working procedures shall be decided by the panel, and
they shall report to the panel.

2. Participation in expert review groups shall be restricted to persons of
professional standing and experience in the field in question.

3. Citizens of parties to the dispute shall not serve on an expert review
group without the joint agreement of the parties to the dispute, except in
exceptional circumstances when the panel considers that the need for
specialized scientific expertise cannot be fulfilled otherwise. Government
officials of parties to the dispute shall not serve on an expert review
group. Members of expert review groups shall serve in their individual
capacities and not as government representatives, nor as representatives of
any organization. Governments or organizations shall therefore not give
them instructions with regard to matters before an expert review group.

4. Expert review groups may consult and seek information and technical
advice from any source they deem appropriate. Before an expert review group
seeks such information or advice from a source within the jurisdiction of a
Member, it shall inform the government of that Member. Any Member shall
respond promptly and fully to any request by an expert review group for such
information as the expert review group considers necessary and appropriate.

5. The parties to a dispute shall have access to all relevant information
provided to an expert review group, unless it is of a confidential nature.
Confidential information provided to the expert review group shall not be
released without formal authorization from the government, organization or
person providing the information. Where such information is requested from
the expert review group but release of such information by the expert review
group is not authorized, a non-confidential summary of the information will
be provided by the government, organization or person supplying the
information.

6. The expert review group shall submit a draft report to the parties to
the dispute with a view to obtaining their comments, and taking them into
account, as appropriate, in the final report, which shall also be circulated
to the parties to the dispute when it is submitted to the panel. The final
report of the expert review group shall be advisory only.

1. The Dispute Settlement Body shall be deemed to have decided by consensus
on a matter submitted for its consideration, if no Member, present at the
meeting of the Dispute Settlement Body when the decision is taken, formally
objects to the proposed decision.

2. This paragraph shall also be applied to disputes on which panel reports
have not been adopted or fully implemented.

3. Where the provisions of any other covered agreement concerning measures
taken by regional or local governments or authorities within the territory
of a Member contain provisions different from the provisions of this
paragraph, the provisions of such other covered agreement shall prevail.

4. The corresponding consultations provisions in the covered agreements are
listed hereunder: Agreement on Rules of Origin, Article 7; Agreement on
Preshipment Inspection, Article 7; Agreement on Implementation of Article
VI of the GATT, Article 18.6; Agreement on Technical Barriers to Trade,
Article 14.1; Agreement on Import Licensing Procedures, Article 6;
Agreement on Subsidies and Countervailing Measures, Articles 13 and 30;
Agreement on Agriculture, Article 18.1, and Part C, Agreement on Sanitary
and Phytosanitary Measures, paragraph 35; Trade-Related Aspects of
Investment Measures, Article 8; Agreement on Textiles and Clothing Article
8.4; Agreement on Trade-Related Aspects of Intellectual Property Rights,
including Trade in Counterfeit Goods, Article 64; Agreement on Trade in
Civil Aircraft Article 8.8; Agreement on Government Procurement, Article
VII:3; International Diary Arrangement, Article VIII:7; Arrangement
Regarding Bovine Meat, Article VI:6.

5. If the complaining party so requests, a meeting of the Dispute Settlement
Body shall be convened for this purpose within fifteen days of the request,
provided that at least ten days' advance notice of the meeting is given.

6. In the case where customs unions or common markets are parties to a
dispute, this provision applies to citizens of all member countries of the
customs unions or common markets.

7. With respect to disputes arising under covered agreements contained in
Annex 4 to the MTO Agreement, the term "Member" as used herein shall refer
only to those Members that are parties to the relevant Annex 4 Agreements.
Where the DSB administers the dispute settlement provisions of a covered
agreement contained in Annex 4, only those Members that are parties to that
agreement may participate in decisions or actions taken by the DSB with
respect to that dispute.

8. If a meeting of the DSB is not scheduled within this period at a time
that enables the requirements of paragraphs 16.1 and 16.4 to be met, a
meeting of the DSB shall be held for this purpose.

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

10. The "Member concerned" is the party to the dispute to which the panel or
Appellate Body recommendations are directed.

11. With respect to recommendations in cases not involving a violation of
the GATT and any other covered agreement, see section 26.

12. If a meeting of the DSB in not scheduled during this period, such a
meeting of the DSB shall be held for this purpose.

13. If the parties cannot agree on an arbitrator within ten days after
referring the matter to arbitration, the arbitrator shall be appointed by
the Director-General within ten days, after consulting the parties.

14. The expression "arbitrator" shall be interpreted as referring either to
an individual or a group.

15. The list in document MTN.GNS/W/120 identifies eleven sectors.

16. The expression"arbitrator" shall be interpreted as referring either to
an individual or a group.

17. The expression "arbitrator" shall be interpreted as referring either to
an individual or a group or to the members of the original panel when
serving in the capacity of arbitrator.

18. Where the provisions of any covered agreement concerning measures taken
by regional or local governments or authorities within the territory of a
Member contain provisions different from the provisions of this paragraph,
the provisions of such covered agreement shall prevail.


TRADE POLICY REVIEW MECHANISM

A. Objectives

(i) The purpose of the Trade Policy Review Mechanism is to contribute
to 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 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 review
mechanism will enable the regular collective appreciation and
evaluation by the Ministerial Conference of the full range of
individual Members' trade policies and practices and their impact
on the functioning of the multilateral trading system. It is
not, however, intended to serve as a basis for the enforcement of
specific obligations under the Agreements or for dispute
settlement procedures, or to impose new policy commitments on
Members.

(ii) The assessment to be carried out under the review mechanism will,
to the extent relevant, take place against the background of the
wider economic and developmental needs, policies and objectives
of the Member concerned, as well as of its external environment.
However, the function of the review mechanism is to examine the
impact of a Member's trade policies and practices on the
multilateral trading system.

B. Domestic transparency

Members recognize the inherent value of domestic transparency of
government decision-making on trade policy matters for both Members'
economies and the multilateral trading system, and agree to encourage and
promote greater transparency within their own systems, acknowledging that
the implementation of domestic transparency must be on a voluntary basis and
take account of each Member's legal and political systems.

C. Procedures for review

(i) Trade policy reviews will be carried out by the Trade Policy
Review Body (TPRB).

(ii) The trade policies and practices of all Members will be subject
to periodic review. The impact of individual Members on the
functioning of the multilateral trading system, defined in terms
of their share of world trade in a recent representative period,
will be the determining factor in deciding on the frequency of
reviews. The first four trading entities so identified (counting
the European Communities as one) will be subject to review every
two years. The next sixteen will be reviewed every four years.
Other Members will be reviewed every six years, except that a
longer period may be fixed for least-developed country Members.
It is understood that the review of entities having a common
external policy covering more than one Member shall cover all
components of policy affecting trade including relevant policies
and practices of the individual Members. Exceptionally, in the
event of changes in a Member's trade policies or practices which
may have a significant impact on its trading partners, the Member
concerned may be requested by the TPRB, after consultation, to
bring forward its next review.

(iii)In the light of the objectives set out in A above, discussions in
the meeting of the TPRB will, to the extent relevant, take place
against the background of the wider economic and developmental
needs, policies and objectives of the Member concerned, as well
as of its external environment. The focus of these discussions
will be on the Member's trade policies and practices which are
the subject of the assessment under the review mechanism.
(iv) The TPRB will establish a basic plan for the conduct of the
reviews. It may also discuss and take note of update reports
from Members. The TPRB will establish a programme of reviews for
each year in consultation with the Members directly concerned.
In consultation with the Member or Members under review, the
Chairman may choose discussants who, in their personal capacity,
will introduce the discussions in the TPRB.

(v) The TPRB will base its work on the following documentation:

(a) A full report, referred to in paragraph D(i) below,
supplied by the Member or Members under review.

(b) A report, to be drawn up by the Secretariat on its own
responsibility, based on the information available to it
and that provided by the Member or Members concerned. The
Secretariat should seek clarification from the Member or
Members concerned of their trade policies and practices.

(vi) The reports by the Member under review and by the Secretariat,
together with the minutes of the respective meeting of the TPRB,
will be published promptly after the review.

(vii)These documents will be forwarded to the Ministerial Conference,
which will take note of them.

D. Reporting

(i) In order to achieve the fullest possible degree of transparency,
each Member shall report regularly to the TPRB. Full reports
will describe the trade policies and practices pursued by the
Member or Members concerned, based on an agreed format to be
decided upon by the TPRB. This format initially shall be based
on the Outline Format for Country Reports established by the
Decision of the GATT 1947 CONTRACTING PARTIES of 19 July 1989,
amended as necessary to extend the coverage of reports to all
aspects of trade policies covered by the Multilateral Trade
Agreements in Annex 1 and, where applicable, the Plurilateral
Trade Agreements. This format may be revised by the TPRB in the
light of experience. Between reviews, Members will provide brief
reports when there are any significant changes in their trade
policies; an annual update of statistical information will be
provided according to the agreed format. Particular account will
be taken of difficulties presented to least-developed country
Members in compiling their reports. The Secretariat shall make
available technical assistance on request to developing country
Members, and in particular to the least-developed country
Members. Information contained in reports should to the greatest
extent possible be coordinated with notifications made under
provisions of the Multilateral Trade Agreements and, where
applicable, the Plurilateral Trade Agreements.

E. Relationship with the balance-of-payments provisions of the GATT 1994
and the GATS

Members recognize the need to minimize the burden for governments also
subject to full consultations under the balance-of-payments provisions of
the GATT 1994 or the GATS. To this end, the Chairman of the TPRB shall, in
consultation with the Member or Members concerned, and with the Chairman of
the Committee on Balance-of-Payments Restrictions, devise administrative
arrangements which would harmonize the normal rhythm of the trade policy
reviews with the time-table for balance-of-payments consultations but would
not postpone the trade policy review by more than twelve months.

F. Appraisal of the Mechanism

The TPRB will undertake an appraisal of the operation of the TPRM not
more than five years after the entry into force of the Agreement
Establishing the MTO. The results of the appraisal will be presented to the
Ministerial Conference. It may subsequently undertake appraisals of the
TPRM at intervals to be determined by it or as requested by the Ministerial
Conference.

G. Overview of Developments in the International Trading Environment

An annual overview of developments in the international trading
environment which are having an impact on the multilateral trading system
will also be undertaken by the TPRB. It will be assisted by an annual
report by the Director-General setting out major activities of the MTO and
highlighting significant policy issues affecting the trading system.


ANNEX 4

PLURILATERAL TRADE AGREEMENTS
ANNEX 4(a)

AGREEMENT ON TRADE IN CIVIL AIRCRAFT

The text of this Agreement is reproduced in BISD 26S/162 and later
amendments. A revision of this text is under negotiation.

ANNEX 4(b)

AGREEMENT ON GOVERNMENT PROCUREMENT

The text in force is contained in BISD 26S/33. A revised text,
expected to enter into force on 1 January 1996, is contained in document
GPR/Spec/77, dated 15 December 1993.

ANNEX 4©

INTERNATIONAL DAIRY ARRANGEMENT

The text of this Agreement is reproduced in BISD 26S/91.

ANNEX 4(d)

ARRANGEMENT REGARDING BOVINE MEAT

The text of this Agreement is reproduced in BISD 26S/84.

For the People's Democratic Republic of Algeria:

For Antigua and Barbuda:

For the Argentine Republic:

For Australia:

For the Republic of Austria:

For the State of Bahrain:

For the People's Republic of Bangladesh:

For Barbados:

For the Kingdom of Belgium:

For Belize:

For the Republic of Benin:

For the Republic of Bolivia:

For the Republic of Botswana:

For the Federative Republic of Brazil:

For Brunei Darussalam:

For Burkina Faso:

For the Republic of Burundi:

For the Republic of Cameroon:

For Canada:

For the Central African Republic:

For the Republic of Chad:

For the Republic of Chile:

For the People's Republic of China:

For the Republic of Colombia:

For the Republic of the Congo:

For the Republic of Costa Rica:

For the Republic of C?te d'Ivoire:

For the Republic of Cuba:

For the Republic of Cyprus:

For the Czech Republic:

For the Kingdom of Denmark:

For the Commonwealth of Dominica:

For the Dominican Republic:

For the Arab Republic of Egypt:

For the Republic of El Salvador:

For the Republic of Fiji:

For the Republic of Finland:

For the French Republic:

For the Gabonese Republic:

For the Republic of the Gambia:

For the Federal Republic of Germany:

For the Republic of Ghana:

For the Hellenic Republic:

For the Republic of Guatemala:

For the Republic of Guyana:

For the Republic of Haiti:

For the Republic of Honduras:

For Hong Kong:

For the Republic of Hungary:

For the Republic of Iceland:

For the Republic of India:

For the Republic of Indonesia:

For Ireland:

For the State of Israel:

For the Italian Republic:

For Jamaica:

For Japan:

For the Republic of Kenya:

For the Republic of Korea:

For the State of Kuwait:

For the Kingdom of Lesotho:

For the Grand Duchy of Luxembourg:

For Macau:

For the Republic of Madagascar:

For the Republic of Malawi:

For Malaysia:

For the Republic of Maldives:

For the Republic of Mali:

For the Republic of Malta:

For the Islamic Republic of Mauritania:

For the Republic of Mauritius:

For the United Mexican States:

For the Kingdom of Morocco:

For the Republic of Mozambique:

For the Union of Myanmar:

For Republic of Namibia:

For the Kingdom of the Netherlands:

For New Zealand:

For the Republic of Nicaragua:

For the Republic of the Niger:

For the Federal Republic of Nigeria:

For the Kingdom of Norway:

For the Islamic Republic of Pakistan:

For the Republic of Paraguay:

For the Republic of Peru:

For the Republic of the Philippines:

For the Republic of Poland:

For the Portuguese Republic:

For Romania:

For the Rwandese Republic:

For Saint Lucia:

For Saint Vincent and the Grenadines:

For the Republic of Senegal:

For the Republic of Sierra Leone:

For the Republic of Singapore:

For the Slovak Republic:

For the Republic of South Africa:

For the Kingdom of Spain:

For the Democratic Socialist Republic of Sri Lanka:

For the Republic of Suriname:

For the Kingdom of Swaziland:

For the Kingdom of Sweden:

For the Swiss Confederation:

For the United Republic of Tanzania:

For the Kingdom of Thailand:

For the Togolese Republic:

For the Republic of Trinidad and Tobago:

For the Republic of Tunisia:

For the Republic of Turkey:

For the Republic of Uganda:

For the United Kingdom of Great Britain and Northern Ireland:

For the United States of America:

For the Eastern Republic of Uruguay:

For the Republic of Venezuela:

For the Republic of Zaire:

For the Republic of Zambia:

For the Republic of Zimbabwe:

For the European Communities:
DECISION ON MEASURES IN FAVOUR OF LEAST-DEVELOPED COUNTRIES

Ministers,

Recognizing the plight of the least-developed countries and the need
to ensure their effective participation in the world trading system, and to
take further measures to improve their trading opportunities;

Recognizing the specific needs of the least-developed countries in the
area of market access where continued preferential access remains an
essential means for improving their trading opportunities;

Reaffirming their commitment to implement fully the provisions
concerning the least-developed countries contained in paragraphs 2(d), 6 and
8 of the Decision of the CONTRACTING PARTIES of 28 November 1979 on
Differential and More Favourable Treatment, Reciprocity and Fuller
Participation of Developing Countries;

Having regard to the commitment of the participants as set out in
Section B (vii) of Part I of the Punta del Este Declaration;

1. Decide that, if not already provided for in the instruments negotiated
in the course of the Uruguay Round, notwithstanding their acceptance of
these instruments, the least-developed countries, and for so long as they
remain in that category, while complying with the general rules set out in
the aforesaid instruments, will only be required to undertake commitments
and concessions to the extent consistent with their individual development,
financial and trade needs, or their administrative and institutional
capabilities. The least-developed countries shall be given additional time
of one year from the date of the Special Ministerial Session concluding the
Uruguay Round of Multilateral Trade Negotiations to submit their schedules
as required in Article XI of the Agreement Establishing the Multilateral
Trade Organization.

2. Agree that:

(i) Expeditious implementation of all special and differential
measures taken in favour of least-developed countries including
those taken within the context of the Uruguay Round shall be
ensured through, inter alia, regular reviews.

(ii) To the extent possible, MFN concessions on tariff and non-tariff
measures agreed in the Uruguay Round on products of export
interest to the least-developed countries may be implemented
autonomously, in advance and without staging. Consideration
shall be given to further improve GSP and other schemes for
products of particular export interest to least-developed
countries.

(iii)The rules set out in the various agreements and instruments and
the transitional provisions in the Uruguay Round should be
applied in a flexible and supportive manner for the
least-developed countries. To this effect, sympathetic
consideration shall be given to specific and motivated concerns
raised by the least-developed countries in the appropriate
Committees and Councils.

(iv) In the application of import relief measures and other measures
referred to in Article XXXVII:3© of GATT 1947 (and the
corresponding Article of GATT 1994), special consideration shall
be given to the export interests of least-developed countries.

(v) Least-developed countries shall be accorded substantially
increased technical assistance in the development, strengthening
and diversification of their production and export bases
including those of services, as well as in trade promotion, to
enable them to maximize the benefits from liberalized access to
markets.

Agree to keep under review the specific needs of the least-developed
countries and to continue to seek the adoption of positive measures which
facilitate the expansion of trading opportunities in favour of these
countries.
DECLARATION ON THE CONTRIBUTION OF THE MTO
TO ACHIEVING GREATER COHERENCE IN GLOBAL ECONOMIC POLICYMAKING

1. Ministers recognize that the globalization of the world economy has
led to ever-growing interactions between the economic policies pursued by
individual countries, including interactions between the structural,
macroeconomic, trade, financial and development aspects of economic
policymaking. The task of achieving harmony between these policies falls
primarily on governments at the national level, but their coherence
internationally is an important and valuable element in increasing the
effectiveness of these policies at national level. The Agreements reached
in the Uruguay Round show that all the participating governments recognize
the contribution that liberal trading policies can make to the healthy
growth and development of their own economies and of the world economy as a
whole.

2. Successful cooperation in each area of economic policy contributes to
progress in other areas. Greater exchange rate stability, based on more
orderly underlying economic and financial conditions, should contribute
towards the expansion of trade, sustainable growth and development, and the
correction of external imbalances. There is also a need for an adequate and
timely flow of concessional and non-concessional financial and real
investment resources to developing countries and for further efforts to
address debt problems, to help ensure economic growth and development.
Trade liberalization forms an increasingly important component in the
success of the adjustment programmes that many countries are undertaking,
often involving significant transitional social costs. In this connection,
Ministers note the r?le of the World Bank and the IMF in supporting
adjustment to trade liberalization, including support to net food-importing
developing countries facing short-term costs arising from agricultural trade
reforms.

3. The positive outcome of the Uruguay Round is a major contribution
towards more coherent and complementary international economic policies.
The results of the Uruguay Round ensure an expansion of market access to the
benefit of all countries, as well as a framework of strengthened
multilateral disciplines for trade. They also guarantee that trade policy
will be conducted in a more transparent manner and with greater awareness of
the benefits for domestic competitiveness of an open trading environment.
The strengthened multilateral trading system emerging from the Round has the
capacity to provide an improved forum for liberalization, to contribute to
more effective surveillance, and to ensure strict observance of
multilaterally agreed rules and disciplines. These improvements mean that
trade policy can in future play a more substantial r?le in ensuring the
coherence of global economic policymaking.

4. Ministers recognize, however, that difficulties whose origins lie
outside the trade field cannot be redressed through measures taken in the
trade field alone. This underscores the importance of efforts to improve
other elements of global economic policymaking to complement the effective
implementation of the results achieved in the Uruguay Round.

5. The interlinkages between the different aspects of economic policy
require that the international institutions with responsibilities in each of
these areas follow consistent and mutually supportive policies. The MTO
should therefore pursue and develop cooperation with the international
organizations responsible for monetary and financial matters, while
respecting the mandate, the confidentiality requirements and the necessary
autonomy in decision-making procedures of each institution, and avoiding the
imposition on governments of cross-conditionality or additional conditions.
Ministers further invite the Director-General of the MTO to review with the
Managing Director of the International Monetary Fund and the President of
the World Bank, the implications of the MTO's responsibilities for its
cooperation with the Bretton Woods institutions, as well as the forms such
cooperation might take, with a view to achieving greater coherence in global
economic policymaking.
DECISION ON NOTIFICATION PROCEDURES

Ministers recommend approval by the Ministerial Conference of the
improvement and review of notification procedures as set out below.

Members,

Desiring to improve the operation of notification procedures under the
MTO, and thereby to contribute to the transparency of Members' trade
policies and to the effectiveness of surveillance arrangements established
to that end,

Recalling obligations under the MTO to publish and notify, including
obligations assumed under the terms of specific Protocols of Accession,
waivers, and other agreements entered into by Members,

Agree as follows:

I. General obligation to notify

Members affirm their commitment to obligations under the Multilateral
Trade Agreements and, where applicable, the Plurilateral Trade Agreements,
regarding publication and notification.

Members recall their undertakings set out in the Understanding
Regarding Notification, Consultation, Dispute Settlement and Surveillance
adopted by the CONTRACTING PARTIES to the GATT 1947 on 28 November 1979.
With regard to their undertaking therein to notify, to the maximum extend
possible, their adoption of trade measures affecting the operation of the
GATT 1994, such notification itself being without prejudice to views on the
consistency of measures with or their relevance to rights and obligations
under the Multilateral Trade Agreements and, where applicable, the
Plurilateral Trade Agreements, Members agree to be guided, as appropriate,
by the annexed list of measures. Members therefore agree that the
introduction or modification of such measures is subject to the notification
requirements of the 1979 Understanding.

II. Central registry of notifications

A central registry of notifications shall be established under the
responsibility of the MTO Secretariat. While Members will continue to
follow existing notification procedures, the Secretariat shall ensure that
the registry records such elements of the information provided on the
measure by the Member as its purpose, its trade coverage, and the
requirement under which it has been notified. The registry shall
cross-reference its records of notifications by Member and obligation.

The central registry shall inform each Member annually of the regular
notification obligations to which that Member will be expected to respond in
the course of the following year.

The central registry shall draw the attention of individual Members to
regular notification requirements which remain unfulfilled.

Information in the central registry regarding individual notifications
shall be made available on request to any Member entitled to receive the
notification concerned.

III. Review of notification obligations and procedures

The Council for Trade in Goods will undertake a review of notification
obligations and procedures under the Agreements in Annex 1A. The review
will be carried out by a working group, membership in which will be open to
all Members. The group will be established immediately after the entry into
force of the Agreement Establishing the MTO.

The terms of reference of the working group will be:

- to undertake a thorough review of all existing notification
obligations of Members established under the Agreements in Annex
1A, with a view to simplifying, standardizing and consolidating
these obligations to the greatest extent practicable, as well as
to improving compliance with these obligations, bearing in mind
the overall objective of improving the transparency of the trade
policies of Members and the effectiveness of surveillance
arrangements established to this end, and also bearing in mind
the possible need of some developing Members for assistance in
meeting their notification obligations;

- to make recommendations to the Council for Trade in Goods not
later than two years after the entry into force of the Agreement
Establishing the MTO.
ANNEX

INDICATIVE LIST[1] OF NOTIFIABLE MEASURES

Tariffs (including range and scope of bindings, GSP provisions, rates
applied to members of free-trade areas/customs unions, other preferences)

Tariff quotas and surcharges

Quantitative restrictions, including voluntary export restraints and orderly
marketing arrangements affecting imports

Other non-tariff measures such as licensing and mixing requirements;
variable levies

Customs valuation

Rules of origin

Government Procurement

Technical barriers

Safeguard actions

Anti-dumping actions

Countervailing actions

Export taxes

Export subsidies, tax exemptions and concessionary export financing

Free-trade zones, including in-bond manufacturing

Export restrictions, including voluntary export restraints and orderly
marketing arrangements

Other government assistance, including subsidies, tax exemptions

R?le of State-trading enterprises

Foreign exchange controls related to imports and exports

Government-mandated countertrade

Any other measure covered by the Multilateral Trade Agreements in Annex 1A
to the Agreement Establishing the MTO

1. This list does not alter existing notification requirements in the
Multilateral Trade Agreements in Annex 1A to the Agreement Establishing the
MTO.


DECISION REGARDING CASES WHERE CUSTOMS
ADMINISTRATIONS HAVE REASONS TO DOUBT THE TRUTH
OR ACCURACY OF THE DECLARED VALUE

Ministers invite the Committee on Customs Valuation to take the
following decision:

Reaffirming that the transaction value is the primary basis of
valuation under the Agreement on Implementation of Article VII of the GATT
1994 (the Agreement);

Recognizing that the customs administration may have to address cases
where it has reason to doubt the truth or accuracy of the particulars or of
documents produced by traders in support of a declared value;

Emphasizing that in so doing the customs administration should not
prejudice the legitimate commercial interests of traders;

Taking into account Article 17 of the Agreement, paragraph 6 of Annex
III to the Agreement, and the relevant decisions of the Technical Committee
on Customs Valuation;

The Committee on Customs Valuation decides as follows:

1. When a declaration has been presented and where the customs
administration has reason to doubt the truth or accuracy of the particulars
or of documents produced in support of this declaration, the customs
administration may ask the importer to provide further explanation,
including documents or other evidence, that the declared value represents
the total amount actually paid or payable for the imported goods, adjusted
in accordance with the provisions of Article 8. If, after receiving further
information, or in the absence of a response, customs still has reasonable
doubts about the truth or accuracy of the declared value, it may, bearing in
mind the provisions of Article 11, be deemed that the customs value of the
imported goods cannot be determined under the provisions of Article 1.
Before taking a final decision, the customs administration shall communicate
to the importer, in writing if requested, its grounds for doubting the truth
or accuracy of the particulars or documents produced and the importer shall
be given a reasonable opportunity to respond. When a final decision is
made, the customs administration shall communicate to the importer in
writing its decision and the grounds therefor.

2. It is entirely appropriate in applying the Agreement for one Member to
assist another Member on mutually agreed terms.

TEXTS RELATING TO MINIMUM VALUES AND IMPORTS BY SOLE AGENTS,
SOLE DISTRIBUTORS AND SOLE CONCESSIONAIRES

Ministers refer the following texts to the Committee on Customs
Valuation for adoption:

* * *

Where a developing country Member makes a reservation to retain
officially established minimum values within the terms of paragraph 2 of
Annex III and shows good cause, the Committee shall give the request for the
reservation sympathetic consideration.

Where a reservation is consented to, the terms and conditions referred
to in paragraph 2 of Annex III shall take full account of the development,
financial and trade needs of the Member concerned.

* * *

A number of developing countries considering accession to the
Agreement have expressed concern that problems may exist in the valuation of
imports by sole agents, sole distributors and sole concessionaires. Under
paragraph 1 of Article 20, developing country Members have a period of delay
of up to five years prior to the application of the Agreement. In this
context, Members availing themselves of this provision could use the period
to conduct appropriate studies and to take such other actions as are
necessary to facilitate application.

In consideration of this, the Committee recommends that the Customs
Co-operation Council assist developing country Members, in accordance with
the provisions of Annex II, to formulate and conduct studies in areas
identified as being of potential concern, including those relating to
importations by sole agents, sole distributors and sole concessionaires.
PROPOSED UNDERSTANDING ON MTO-ISO STANDARDS INFORMATION SYSTEM

Ministers recommend that the MTO Secretariat reach an understanding
with the ISO to establish an information system under which:

1. ISONET members shall transmit to the ISO/IEC Information Centre
in Geneva the notifications referred to in paragraphs C and J of
the Code of good practice for the preparation, adoption and
application of standards in Annex 3 to the Agreement on Technical
Barriers to Trade, in the manner indicated there;

2. the following (alpha)numeric classification systems shall be used
in the work programmes mentioned above:

(a) a standards classification system which would allow
standardizing bodies to give for each standard mentioned in
the work programme an (alpha)numeric indication of the
subject matter;

(b) a stage code system which would allow standardizing bodies
to give for each standard mentioned in the work programme
in paragraph J of Annex 3 an (alpha)numeric indication of
the stage of development of the standard; for this
purpose, at least five stages of development should be
distinguished: (1) the stage at which the decision to
develop a standard has been taken, but technical work has
not yet begun; (2) the stage at which technical work has
begun, but the period for the submission of comments has
not yet started; (3) the stage at which the period for the
submission of comments has started, but has not yet been
completed; (4) the stage at which the period for the
submission of comments has been completed, but the standard
has not yet been adopted; and (5) the stage at which the
standard has been adopted;

© an identification system covering all international
standards which would allow standardizing bodies to give
for each standard mentioned in the work programme an
(alpha)numeric indication of the international standard(s)
used as a basis;

3. the ISO/IEC Information Centre shall promptly convey to the MTO
Secretariat copies of any notifications referred to in paragraph
C of the Code of good practice;

4. the ISO/IEC Information Centre shall regularly publish the
information received in the notifications made to it under
paragraphs C and J of the Code of good practice; this
publication, for which a reasonable fee may be charged, shall be
available to ISONET members and through the MTO Secretariat, to
the Members of the MTO.
DECISION ON REVIEW OF THE ISO/IEC
INFORMATION CENTRE PUBLICATION

Ministers decide that in conformity with paragraph 1 of Article 13,
the Committee on Technical Barriers to Trade shall, without prejudice to
provisions on consultation and dispute settlement, at least once a year
review the publication provided by the ISO/IEC Information Centre on
information received according to the Code of good practice in Annex 3 of
the Agreement, for the purpose of affording Members opportunity of
discussing any matters relating to the operation of that Code.

In order to facilitate this discussion, the MTO Secretariat is
requested to provide a list by Member of all standardizing bodies that have
accepted the Code of good practice, as well as a list of those standardizing
bodies that have accepted or withdrawn from the Code since the previous
review.

The MTO Secretariat is also requested to distribute promptly to the
Members copies of the notifications it receives from the ISO/IEC Information
Centre.

DECISION ON MEASURES CONCERNING
THE POSSIBLE NEGATIVE EFFECTS OF THE
REFORM PROGRAMME ON LEAST-DEVELOPED AND
NET FOOD-IMPORTING DEVELOPING COUNTRIES

1. Ministers recognize that the progressive implementation of the results
of the Uruguay Round as a whole will generate increasing opportunities for
trade expansion and economic growth to the benefit of all participants.

2. Ministers recognize that during the reform programme leading to
greater liberalization of trade in agriculture least developed and net
food-importing developing countries may experience negative effects in terms
of the availability of adequate supplies of basic foodstuffs from external
sources on reasonable terms and conditions, including short-term
difficulties in financing normal levels of commercial imports of basic
foodstuffs.

3. Ministers accordingly agree to establish appropriate mechanisms to
ensure that the implementation of the results of the Uruguay Round on trade
in agriculture does not adversely affect the availability of food aid at a
level which is sufficient to continue to provide assistance in meeting the
food needs of developing countries, especially least developed and net
food-importing developing countries. To this end Ministers agree:

(i) to review the level of food aid established periodically by the
Committee on Food Aid under the Food Aid Convention and to
initiate negotiations in the appropriate forum to establish a
level of food aid commitments sufficient to meet the legitimate
needs of developing countries during the reform programme;

(ii) to adopt guidelines to ensure that an increasing proportion of
basic foodstuffs is provided to least developed and net
food-importing developing countries in fully grant form and/or on
appropriate concessional terms in line with Article IV of the
Food Aid Convention;

(iii)to give full consideration in the context of their aid programmes
to requests for the provision of technical and financial
assistance to least developed and net food-importing developing
countries to improve their agricultural productivity and
infrastructure.

4. Ministers further agree to ensure that any agreement relating to
agricultural export credits makes appropriate provision for differential
treatment in favour of least developed and net food-importing developing
countries.

5. Ministers recognize that as a result of the Uruguay Round certain
developing countries may experience short-term difficulties in financing
normal levels of commercial imports and that these countries may be eligible
to draw on the resources of international financial institutions under
existing facilities, or such facilities as may be established, in the
context of adjustment programmes, in order to address such financing
difficulties. In this regard Ministers take note of paragraph 37 of the
report of the Director-General of the GATT (MTN.GNG/NG14/W/35) on his
consultations with the Managing Director of the International Monetary Fund
and the President of the World Bank.

6. The provisions of this Decision will be subject to regular review by
the Ministerial Conference, and the follow-up to this Decision shall be
monitored, as appropriate, by the Committee on Agriculture.
DECISION ON INSTITUTIONAL ARRANGEMENTS
FOR THE GENERAL AGREEMENT ON TRADE IN SERVICES

Ministers recommend that the Council for Trade in Services at its
first meeting shall adopt the decision on subsidiary bodies set out below.

INSTITUTIONAL ARRANGEMENTS FOR
THE GENERAL AGREEMENT ON TRADE IN SERVICES

The Council for Trade in Services, acting pursuant to Article XXIV
with a view to facilitating the operation and furthering the objectives of
the General Agreement on Trade in Services,

Decides as follows:

1. Any subsidiary bodies, that the Council may establish shall report to
the Council annually or more often as necessary. Each such body shall
establish its own rules of procedure, and may set up its own subsidiary
bodies as appropriate.

2. Any sectoral committee shall carry out responsibilities as assigned to
it by the Council, and shall afford Members the opportunity to consult on
any matters relating to trade in services in the sector concerned and the
operation of the sectoral annex to which it may pertain. Such
responsibilities shall include:

(a) to keep under continuous review and surveillance the application
of the Agreement with respect to the sector concerned;

(b) to formulate proposals or recommendations for consideration by
the Council in connection with any matter relating to trade in
the sector concerned;

© if there is an annex pertaining to the sector, to consider
proposals for amendment of that sectoral annex, and to make
appropriate recommendations to the Council;

(d) to provide a forum for technical discussions, to conduct studies
on measures of Members and to conduct examinations of any other
technical matters affecting trade in services in the sector
concerned;

(e) to provide technical assistance to developing country Members and
developing countries negotiating accession to the Agreement
Establishing the MTO in respect of the application of obligations
or other matters affecting trade in services in the sector
concerned; and

(f) to cooperate with any other subsidiary bodies established under
this Agreement or any international organizations active in any
sector concerned.

3. There is hereby established a Committee on Trade in Financial Services
which will have the responsibilities listed in paragraph 2 above. DECISION ON CERTDISPUTE SETTLEMENT
PROCEDURES FOR THE GENERAL AGREEMENT ON TRADE IN SERVICES

Ministers recommend that the Council for Trade in Services at its
first meeting shall adopt the decision set out below.

DISPUTE SETTLEMENT PANELS

The Council for Trade in Services,

Taking into account the specific nature of the obligations and
specific commitments of the Agreement and of trade in services with respect
to dispute settlement under Articles XXII and XXIII,

Decides as follows:

1. A roster of panelists shall be established to assist in the selection
of panelists.

2. To this end, Members may suggest names of individuals possessing the
qualifications referred to in paragraph 3 below for inclusion on the roster,
and shall provide a curriculum vitae of their qualifications including, if
applicable, indication of sector-specific expertise.

3. Panels shall be composed of well-qualified governmental and/or
non-governmental individuals who have experience in issues related to the
General Agreement on Trade in Services and/or trade in services, including
associated regulatory matters. Panelists shall serve in their individual
capacities and not as representatives of any government or organisation.

4. Panels for disputes regarding sectoral matters shall have the
necessary expertise relevant to the specific services sectors which the
dispute concerns.

5. The MTO Secretariat shall maintain the roster and shall develop
procedures for its administration in consultation with the Chairman of the
Council.
DECISION CONCERNING PARAGRAPH (b) OF ARTICLE XIV
OF THE GENERAL AGREEMENT ON TRADE IN SERVICES

Ministers recommend that the Council for Trade in Services at its
first meeting shall adopt the decision set out below.

WORKING PARTY ON TRADE IN SERVICES AND THE ENVIRONMENT

The Council for Trade in Services,

Acknowledging that measures necessary to protect the environment may
conflict with the provisions of the Agreement, and

Noting that since measures necessary to protect the environment
typically have as their objective the protection of human, animal or plant
life or health, it is not clear that there is a need to provide for more
than is contained in paragraph (b) of Article XIV.

Decides as follows:

1. In order to determine whether any modification of Article XIV of the
Agreement is required to take account of such measures, a Working Party
shall be established and shall examine and report, with recommendations if
any, on the relationship between services trade and the environment
including the issue of sustainable development. The Working Party shall
also examine the relevance of inter-governmental agreements on the
environment and their relationship to the Agreement.

2. The Working Party shall report the results of its work within three
years of the entry into force of the Agreement Establishing the MTO. DECISION ON NEGOTIATIONS OSIC TELECOMMUNICATIONS

Ministers, meeting on the occasion of the conclusion of the Uruguay
Round,

Decide as follows:

1. Negotiations shall be entered into on a voluntary basis with a view to
the progressive liberalization of trade in telecommunications transport
networks and services (hereinafter called "basic telecommunications") within
the framework of the General Agreement on Trade in Services.

2. Without prejudice to their outcome, the negotiations shall be
comprehensive in scope, with no basic telecommunications excluded a priori.

3. A Negotiating Group on Basic Telecommunications (NGBT) is established
to carry out this mandate. The NGBT shall report periodically on the
progress of these negotiations.

4. The negotiations in the NGBT shall be open to all governments and the
European Community signing the Final Act of the Uruguay Round which announce
their intention to participate. To date, the following governments have
announced their intention to take part in the negotiations:

Australia, Canada, Finland, Hungary, Japan, Korea, Mexico, New
Zealand, Norway, Sweden, Switzerland, United States.

Further notifications of intention to participate shall be addressed to the
depositary of the Agreement Establishing the MTO.

5. The NGBT shall hold its first negotiating session no later than one
month from the date of this Decision. It shall conclude these negotiations
and make a final report no later than 30 April 1996. The final report of
the NGBT shall include a date for the implementation of results of these
negotiations.

6. Any commitments resulting from the negotiations, including the date of
their entry into force, shall be inscribed in the schedules annexed to the
General Agreement on Trade in Services and be subject to all the provisions
of the Agreement.

7. Commencing immediately and continuing until the date (referred to in
paragraph 5 above) of implementation of the results of these negotiations,
it is understood that no participant shall apply any measure affecting trade
in basic telecommunications in such a manner as would improve its
negotiating position and leverage. It is understood that this provision
shall not prevent the pursuit of commercial and governmental arrangements
regarding the provision of basic telecommunications services.

8. The implementation of paragraph 7 above shall be subject to
surveillance in the NGBT. Any participant may bring to the attention of the
NGBT any action or omission which it believes to be relevant to the
fulfilment of paragraph 7. Such notifications shall be deemed to have been
submitted to the NGBT upon their receipt by the Secretariat. UNDERSTANDING ON COMMITMENTS INANCIAL SERVICES

Participants in the Uruguay Round have been enabled to take on
specific commitments with respect to Financial Services under the General
Agreement on Trade in Services on the basis of an alternative approach to
that covered by the provisions of Part III of the Agreement. It was agreed
that this approach could be applied subject to the following understanding:

- it does not conflict with the provisions of the Agreement;

- it does not prejudice the right of any Member to schedule its
specific commitments in accordance with the approach under Part
III of the Agreement;

- resulting specific commitments shall apply on a
most-favoured-nation basis;

- no presumption has been created as to the degree of
liberalization to which a Member is committing itself under the
Agreement.

Interested Members, on the basis of negotiations, and subject to
conditions and qualifications where specified, have inscribed in their
schedule specific commitments conforming to the approach set out below.

Standstill

Any conditions, limitations and qualifications to the commitments
noted below shall be limited to existing non-conforming measures.

Market Access

Monopoly Rights

1. In addition to Article VIII of the Agreement, the following shall
apply:

Each Member shall list in its schedule pertaining to financial
services existing monopoly rights and shall endeavour to eliminate
them or reduce their scope. Notwithstanding paragraph 1.2 of the
Annex on Financial Services, this paragraph applies to the activities
referred to in sub-paragraph 1.2.3 of the Annex.

Financial Services purchased by Public Entities

2. Notwithstanding Article XIII of the Agreement, each Member shall
ensure that financial service suppliers of any other Member established in
its territory are accorded most-favoured-nation treatment and national
treatment as regards the purchase or acquisition of financial services by
public entities of the Member in its territory.

Cross-border Trade

3. Each Member shall permit non-resident suppliers of financial services
to supply, as a principal, through an intermediary or as an intermediary,
and under terms and conditions that accord national treatment, the following
services:

(a) insurance of risks relating to:

(i) maritime shipping and commercial aviation and space
launching and freight (including satellites), with such
insurance to cover any or all of the following: the goods
being transported, the vehicle transporting the goods and
any liability arising therefrom; and

(ii) goods in international transit;

(b) reinsurance and retrocession and the services auxiliary to
insurance as referred to in sub-paragraph 5.1(d) of the Annex;

© provision and transfer of financial information and financial
data processing as referred to in sub-paragraph 5.1(o) of the
Annex and advisory and other auxiliary services, excluding
intermediation, relating to banking and other financial services
as referred to in sub-paragraph 5.1(p) of the Annex.

4. Each Member shall permit its residents to purchase in the territory of
any other Member the financial services indicated in:

(a) sub-paragraph 3(a);

(b) sub-paragraph 3(b); and

© sub-paragraphs 5.1(e) to (p) of the Annex.

Commercial Presence

5. Each Member shall grant financial service suppliers of any other
Member the right to establish or expand within its territory, including
through the acquisition of existing enterprises, a commercial presence.

6. A Member may impose terms, conditions and procedures for authorization
of the establishment and expansion of a commercial presence in so far as
they do not circumvent the Member's obligation under paragraph 5 and they
are consistent with the other obligations of this Agreement.

New Financial Services

7. A Member shall permit financial service suppliers of any other Member
established in its territory to offer in its territory any new financial
service.

Transfers of Information and Processing of Information

8. No Member shall take measures that prevent transfers of information or
the processing of financial information, including transfers of data by
electronic means, or that, subject to importation rules consistent with
international agreements, prevent transfers of equipment, where such
transfers of information, processing of financial information or transfers
of equipment are necessary for the conduct of the ordinary business of a
financial service supplier. Nothing in this paragraph restricts the right
of a Member to protect personal data, personal privacy and the
confidentiality of individual records and accounts so long as such right is
not used to circumvent the provisions of the Agreement.

Temporary Entry of Personnel

9. (a) Each Member shall permit temporary entry into its territory of
the following personnel of a financial service supplier of any
other Member that is establishing or has established a commercial
presence in the territory of the Member:

(i) senior managerial personnel possessing proprietary
information essential to the establishment, control and
operation of the services of the financial service
supplier; and

(ii) specialists in the operation of the financial service
supplier.

(b) Each Member shall permit, subject to the availability of
qualified personnel in its territory, temporary entry into its
territory of the following personnel associated with a commercial
presence of a financial service supplier of any other Member:

(i) specialists in computer services, telecommunication
services and accounts of the financial service supplier;
and

(ii) actuarial and legal specialists.

Non-discriminatory Measures

10. Each Member shall endeavour to remove or to limit any significant
adverse effects on financial service suppliers of any other Member of:

(a) non-discriminatory measures that prevent financial service
suppliers from offering in the Member's territory, in the form
determined by the Member, all the financial services permitted by
the Member;

(b) non-discriminatory measures that limit the expansion of the
activities of financial service suppliers into the entire
territory of the Member;

© measures of a Member, when such a Member applies the same
measures to the supply of both banking and securities services,
and a financial service supplier of any other Member concentrates
its activities in the provision of securities services; and

(d) other measures that, although respecting the provisions of this
Agreement, affect adversely the ability of financial service
suppliers of any other Member to operate, compete or enter the
Member's market;

provided that any action taken under this paragraph would not unfairly
discriminate against financial service suppliers of the Member taking
such action.

11. With respect to the non-discriminatory measures referred to in
sub-paragraphs 10(a) and (b), a Member shall endeavour not to limit or
restrict the present degree of market opportunities nor the benefits already
enjoyed by financial service suppliers of all other Members as a class in
the territory of the Member, provided that this commitment does not result
in unfair discrimination against financial service suppliers of the Member
applying such measures.


National Treatment

1. Under terms and conditions that accord national treatment, each Member
shall grant to financial service suppliers of any other Member established
in its territory access to payment and clearing systems operated by public
entities, and to official funding and refinancing facilities available in
the normal course of ordinary business. This paragraph is not intended to
confer access to the Member's lender of last resort facilities.

2. When membership or participation in, or access to, any self-regulatory
body, securities or futures exchange or market, clearing agency, or any
other organization or association, is required by a Member in order for
financial service suppliers of any other Member to supply financial services
on an equal basis with financial service suppliers of the Member, or when
the Member provides directly or indirectly such entities, privileges or
advantages in supplying financial services, the Member shall ensure that
such entities accord national treatment to financial service suppliers of
any other Member resident in the territory of the Member.

Definitions

For the purposes of this approach:

1. A non-resident supplier of financial services is a financial service
supplier of a Member which supplies a financial service into the territory
of another Member from an establishment located in the territory of another
Member, regardless of whether such a financial service supplier has or has
not a commercial presence in the territory of the Member in which the
financial service is supplied.

2. "Commercial presence" means an enterprise within a Member's territory
for the supply of financial services and includes wholly- or partly-owned
subsidiaries, joint ventures, partnerships, sole proprietorships,
franchising operations, branches, agencies, representative offices or other
organizations.

3. A new financial service is a service of a financial nature, including
services related to existing and new products or the manner in which a
product is delivered, that is not supplied by any financial service supplier
in the territory of a particular Member but which is supplied in the
territory of another Member.
DECISION ON FINANCIAL SERVICES

Ministers, meeting on the occasion of the conclusion of the Uruguay
Round.

Noting that commitments scheduled by participants on Financial
Services at the conclusion of the Uruguay Round, shall enter into force on
an m.f.n. basis at the same time as the General Agreement on Trade in
Services.

Decide as follows:

1. At the conclusion of a period ending no later than six months after
the entry into force of the Agreement Establishing the MTO, without offering
compensation, Members shall be free to improve, modify or withdraw all or
part of their commitments in this sector without offering compensation,
notwithstanding the provisions of Article XXI of the GATS. At the same time
Members shall finalize their positions relating to m.f.n. exemptions in
these sectors, notwithstanding the provisions of the Annex on Article II
Exemptions. From the date of entry into force of the Agreement and until
the end of the period referred to above, exemptions listed in the Annex on
Article II Exemptions which are conditional upon the level of commitments
undertaken by other participants or upon exemptions by other participants
will not be applied.

2. The Committee on Trade in Financial Services shall monitor the
progress of any negotiations undertaken under the terms of this Decision and
shall report thereon to the Council for Trade in Services no later than four
months after the entry into force of the Agreement. DECISION CONCERNING PROFESSIONAL ICES

Ministers recommend that the Council for Trade in Services at its
first meeting shall adopt the decision set out below.

WORKING PARTY ON PROFESSIONAL SERVICES

The Council for Trade in Services,

Recognizing the impact of regulatory measures relating to professional
qualifications, technical standards and licensing on the expansion of trade
in professional services,

Desiring to establish multilateral disciplines with a view to ensuring
that, when specific commitments are undertaken, such regulatory measures do
not constitute unnecessary barriers to the supply of professional services,

Decides as follows:

1. The work programme foreseen in Article VI, paragraph 4 on domestic
Regulations should be put into effect immediately. To this end, a Working
Party shall be established to examine and report, with recommendations, on
the disciplines necessary to ensure that measures relating to qualification
requirements and procedures, technical standards and licensing requirements
in the field of professional services do not constitute unnecessary barriers
to trade.

2. As a matter of priority, the Working Party shall make recommendations
for the elaboration of multilateral disciplines in the accountancy sector,
so as to give operational effect to specific commitments. In making these
recommendations, the Working Party shall concentrate on:

- developing multilateral disciplines relating to market access so
as to ensure that domestic regulatory requirements are: (a)
based on objective and transparent criteria, such as competence
and the ability to supply the service; (b) not more burdensome
than necessary to ensure the quality of the service, thereby
facilitating the effective liberalization of accountancy
services;

- the use of international standards and, in doing so, it shall
encourage the cooperation with the relevant international
organizations as defined under Article VI, paragraph 5(b), so as
to give fully effect to Article VI, paragraph 5;

- facilitating the effective application of Article VI, paragraph
6, of the Agreement by establishing guidelines for the
recognition of qualifications.

In elaborating these disciplines, the Working Party shall take account
of the importance of the governmental and non-governmental bodies
regulating professional services. DECISION ON MOVEMENT OF NATURAL PERSONS

Ministers meeting on the occasion of the conclusion of the Uruguay
Round,

Noting the commitments resulting from the Uruguay Round negotiations
on the movement of natural persons for the purpose of supplying services.

Mindful of the objectives of the General Agreement on Trade in
Services including, inter alia, the increasing participation of developing
countries in trade in services and the expansion of their service exports.

Recognizing the importance of achieving higher levels of commitments
on the movement of natural persons, in order to provide for a balance of
benefits under the General Agreement on Trade in Services.

Decide as follows:

1. Negotiations on further liberalization of movement of natural persons
for the purpose of supplying services shall continue beyond the conclusion
of the Uruguay Round, with a view to allowing the achievement of higher
levels of commitments by participants under the General Agreement on Trade
in Services.

2. A negotiating group on movement of natural persons is established to
carry out the negotiations. The group shall establish its own procedures
and shall report periodically to the Council on Trade in Services.

3. The negotiating group shall hold its first negotiating session no
later than one month from the date of this Decision. It shall conclude
these negotiations and produce a final report no later than six months after
the entry into force of the Agreement establishing the MTO.

4. Commitments resulting from these negotiating shall be inscribed in
Members' schedules of specific commitments.DECISION ON IMPLEMENTATION OF ARTICLE XXIV:2 OF
THE AGREEMENT ON GOVERNMENT PROCUREMENT

1. Ministers invite the Committee on Government Procurement to clarify
that:

(i) a Member interested in accession according to Article XXIV:2
would communicate its interest to the Director-General,
submitting relevant information, including an offer by way of a
list of entities having regard to the relevant provisions of the
Agreement, in particular Article I and, where appropriate,
Article V;

(ii) the communication would be circulated to Parties to the
Agreement;

(iii)the Member interested in accession would hold consultations with
the Parties on the terms for its accession to the Agreement;

(iv) with a view to facilitating accession, the Committee would
establish a working party if the Member in question, or any of
the Parties to the Agreement, so requests. The working party
should examine: (a) the offer made by the applicant Member;
and (b) relevant information pertaining to export opportunities
in the markets of the Parties, taking into account the existing
and potential export capabilities of the applicant Member and
export opportunities for the Parties in the market of the
applicant Member;

(v) upon a decision by the Committee agreeing to the terms of
accession including the list of entities, the acceding Member
would deposit with the Director-General of the MTO an instrument
of accession which states the terms so agreed. Until the entry
into force of the Agreement Establishing the MTO, the instrument
would be deposited with the Director-General to the CONTRACTING
PARTIES to the GATT. The text of the acceding Member's list of
entities in English, French and Spanish would be annexed to the
Agreement.

2. It is noted that the Committee decisions are arrived at on the basis
of consensus. It is also noted that the non-application clause of Article
XXIV:11 is available to any Party.

DECISION ON THE APPLICATION AND REVIEW OF THE UNDERSTANDING
ON RULES AND PROCEDURES GOVERNING THE SETTLEMENT OF DISPUTES

The Ministers,

Agree that existing rules and procedures of the GATT 1947 in the field
of dispute settlement shall remain in effect until the date of entry into
force of the Understanding on Rules and Procedures Governing the Settlement
of Disputes under the Multilateral Trade Organization. It is further agreed
that in respect of disputes for which the request for consultation was made
before the date of entry into force of the said Understanding, the relevant
Councils or Committees shall remain in operation for the purpose of dealing
with those disputes.

Agree that a full review of dispute settlement rules and procedures
under the Multilateral Trade Organization, as set out in the said
Understanding, shall be completed within four years after its entry into
force, and a decision shall be taken on the occasion of the first meeting at
Ministerial level after the completion of the review, whether to continue,
modify or terminate such dispute settlement rules and procedures.



DECISION ON IMPROVEMENTS TO THE GATT DISPUTE SETTLEMENT
RULES AND PROCEDURES

The Ministers,

Recalling the CONTRACTING PARTIES' Decision of 12 April 1989,

Noting that the improvements to the GATT dispute settlement rules and
procedures are being applied on a trial basis until the end of the Uruguay
Round and that a decision on their adoption should be taken before the end
of the Round,

Considering that the continuation of the improved rules and procedures
is necessary for the effectiveness of the dispute settlement mechanism,

Decide,

To invite the CONTRACTING PARTIES to keep the above-mentioned
improvements in effect until the entry into force of the Understanding on
Rules and Procedures Governing the Settlement of Disputes contained in Annex
2 of the Agreement Establishing the Multilateral Trade Organization.

AGREEMENT ON IMPLEMENTATION OF ARTICLE VI OF GATT 1994

STATEMENT ON ANTI-CIRCUMVENTION

"The problem of circumvention of anti-dumping duty measures formed
part of the negotiations which preceded this Agreement. Negotiators were,
however, unable to agree on specific text, and, given the desirability of
the applicability of uniform rules in this area as soon as possible, the
matter is referred to the Committee on Anti-Dumping Practices for
resolution."
AGREEMENT ON IMPLEMENTATION OF ARTICLE VI OF GATT 1994

STATEMENT ON STANDARD OF REVIEW FOR DISPUTE SETTLEMENT PANELS

"The standard of review in Article 17.6 of the Agreement will be
reviewed after a period of three years with a view to considering the
question of whether it is capable of general application."
STATEMENT ON DISPUTE SETTLEMENT PURSUANT TO THE AGREEMENT ON
IMPLEMENTATION OF ARTICLE VI 1994 OR PART V OF THE AGREEMENT
ON SUBSIDIES AND COUNTERVAILING MEASURES 1994

With respect to dispute settlement pursuant to the Agreement on
Implementation of Article VI of GATT 1994 or Part V of the Agreement on
Subsidies and Countervailing Measures 1994, Ministers recognize the need for
the consistent resolution of disputes arising from anti-dumping and
countervailing duty measures.
 
To the best of our knowledge, the text on this page may be freely reproduced and distributed.
If you have any questions about this, please check out our Copyright Policy.

 

totse.com certificate signatures
 
 
About | Advertise | Bad Ideas | Community | Contact Us | Copyright Policy | Drugs | Ego | Erotica
FAQ | Fringe | Link to totse.com | Search | Society | Submissions | Technology
Hot Topics
george galloway what do you think of him?
Hinchey Amendment
why UK accepts US subjugation and infiltration?
George galloway suspended from HP
Why Marxism IS Economically Exploitive...
Situation in Turkey
Putin not playing nicely
So, I hear they have Mcdonalds in China...
 
Sponsored Links
 
Ads presented by the
AdBrite Ad Network

 

TSHIRT HELL T-SHIRTS