Definition back to top
Import licensing can be defined as administrative procedures
requiring the submission of an application or other documentation (other than those
required for customs purposes) to the relevant administrative body as a prior condition
for importation of goods.
Basic obligations back to top
GATT Article VIII
Article VIII of GATT (entitled Fees and Formalities Connected
with Importation and Exportation) deals with import licensing procedures in a non-specific
Paragraph 1(c) establishes a general obligation concerning formalities whereby Members
recognize the need for minimizing the incidence and complexity of import and export
formalities and for decreasing and simplifying import and export documentation
Paragraph 2 requires each Member to review the operation of its laws and
regulations in the light of the provisions of this Article upon request by another
Paragraph 3 prohibits Members from imposing substantial penalties for minor
breaches of customs regulations or procedural requirements.
GATT Article X
Article X requires Members to publish promptly laws,
regulations, judicial decisions and administrative rulings of general application,
including those pertaining to requirements on imports or exports and to administer them in
a uniform, impartial and reasonable manner.
From the Tokyo Round Code to the Uruguay Round Agreement
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The Tokyo Round Import Licensing Code was one of the agreements
covering non-tariff measures concluded during the multilateral trade negotiations held
between 1973 and 1979. It entered into force on 1 January 1980 with the objective of
preventing import licensing procedures from unnecessarily hindering international trade.
As a standalone agreement, it obligated only those countries which had signed and
ratified it. During the Uruguay Round, it was revised to strengthen the disciplines on
transparency and notifications. The revised Agreement entered into force on 1 January 1995. It is binding on all WTO Members.
Main objectives back to top
The main objectives of the Agreement are to simplify, and bring
transparency to, import licensing procedures, to ensure their fair and equitable
application and administration, and to prevent procedures applied for granting import
licences for having in themselves, restrictive or distortive effects on imports.
General provisions back to top
Neutral application, fair and equitable administration
Members are to apply import licensing procedures neutrally, and
administer them in a fair and equitable manner (Article 1.3). Applications are not to be
refused for minor documentation errors, not to be penalized heavily for any omissions or
mistakes in documentation or procedures obviously made without fraudulent intent or gross
negligence (Article 1.7). Licensed imports are to not be refused for minor variations in
value, quantity or weight from the amount shown on the licence for reasons consistent with
normal commercial practices (Article 1.8).
Publication of rules and procedures
Rules and all information concerning procedures for the
submission of applications, including the eligibility criteria for applicants, the
administrative bodies to be approached and lists of products subject to import licensing
are to be published, whenever practicable, 21 days prior to the effective date of the
requirement but in all events not later than the effective date (Article 1.4 (a)).
Simple forms and procedures
Applications forms and renewal forms are to be simple (Article 1.5). Application procedures and renewal procedures are to be simple. Applicants are to be
allowed a reasonable period to submit licence applications. Where there is a closing date
for applications, this period should be at least 21 days. The number of administrative
bodies which an applicant has to approach in connection with an applications is not to
exceed to a maximum of three (Article 1.6).
Foreign exchange for licensed imports is to be allocated on
the same basis as for goods not requiring import licences (Article 1.9).
The security exception provisions of Article XXI of GATT 1994 apply (Article 1.10).
Members are not required to disclose confidential information contrary to the public
interest or which would prejudice the legitimate commercial interests of particular
enterprises (Article 1.11).
Automatic import licensing
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Automatic import licensing (licensing maintained to collect
statistical and other factual information on imports) is defined as import licensing where
the approval of the application is granted in all cases (Article 2.1).
Conditions back to top
Automatic licensing procedures are not to be administered in
such a way as to have restrictive effects on imports; there should be no discrimination
among those applying for automatic licenses. Any person fulfilling the legal requirements
should be equally eligible to apply for and obtain import licenses.
Main provision for automatic import licensing back to top
Approval of application within 10 working days
Licence applications may be submitted on any working day before
customs clearance; they shall be approved immediately on receipt but in any case within 10
working days (Article 2.2 (a)). Developing country Members which were not a Party to the
Tokyo Round Code may, upon notification to the Committee, delay the application of those
two requirements for two years from their date of WTO Membership (footnote 5 to Article 2.2).
Automatic import licensing may be necessary whenever other
appropriate procedures are not available. It is to be removed as soon as the circumstances
which have given rise to its introduction no longer prevail (Article 2.2 (b)).
Non-automatic import licensing
Definition back to top
Non-automatic import licensing is defined as licensing not
falling within the definition of automatic import licensing (Article 3.1).
Non-automatic licensing is used to administer trade restrictions such as quantitative
restrictions which are justified within the WTO legal framework.
Main provisions applicable to non-automatic import licensing
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No additional restrictive or distortive effects
Non-automatic import licensing must not have restrictive or
distortive effects on imports additional to those caused by the imposition of the
restriction, and is to correspond in scope and duration to the measure it is used to
implement (Article 3.2).
All relevant information to be published
Members are to publish all relevant information, including
purposes other than the implementation of quantitative restrictions, exceptions or
derogations, quota amounts, opening and closing dates of quotas and country-specific quota
allocations. Whenever practicable, the information should be published 21 days prior to
the effective date of the requirement, and in all events should be published not later
than the effective date (Articles 3.3, 3.4, 3.5 (b) (d)).
No discrimination among applicants
There may be no discrimination among applicants. If a licence is
refused, the applicant, on request, shall be given the reason for refusal, and shall have
a right of appeal or review of the decision (Article 3.5 (e)).
Time limits for processing applications
The period for processing applications shall not be longer than
30 days if applications are considered as and when received, and not longer than 60 days
if applications are considered simultaneously (Article 3.5 (f)).
Validity of a licence
The validity of a licence is to be of reasonable duration and
not be so short as to preclude imports, including those from distant sources (Article 3.5
(g)). Full utilization of quotas is not to be discouraged (Article 3.5 (h)). Licences are
to be issued in economic quantities (Article 3.5 (i)).
Members are to provide, upon the request of any Member having
an interest in the trade in the product concerned, all relevant information (Article 3.5
In allocating licences, Members should consider the import performance of an applicant
and are to ensure a reasonable distribution of licences to new importers, particularly to
those importers importing products originating in developing and least-developed country
Members (Article 3.5 (j)).
If quotas are not allocated by country, licence holders are to be free to choose the
sources of imports; if they are allocated among supplying countries, the licence must
clearly stipulate the countries (Article 3.5 (k)).
Compensating adjustments may be made in future licence allocations,
under Article 1.8, where imports exceeded a previous licence level (Article 3.5 (l)).
Notifications back to top
Copies of publications and full text of laws and regulations
Members are required to submit copies of publications containing
information on import licensing procedures and the full text of relevant laws and
regulations (Articles 1.4 (a) and 8.2 (b)). In cases where the publications and
legislation are not in a WTO official language, such notifications should be accompanied
by a summary in one of the WTO official languages (G/LIC/3).
Notification of changes
Members which institute licensing procedures or changes in these
procedures are required to notify the Committee of them within 60 days of publication.
Such notifications should include information on: products subject to licensing; contact
point for information on eligibility; administrative bodies for submission of
applications; date and name of publications where licensing procedures are published,
together with copies of such publications; whether licensing is automatic or
non-automatic; the administrative purpose of automatic import licensing procedures;
measure implemented through non-automatic import licensing procedure; and expected
duration of the licensing procedures (Articles 5.1-5.4).
Members have the possibility of making reverse notifications of
non-notified import licensing procedures maintained by other Members (Article 5.5).
Annual questionnaire (by 30 September each year)
Members are to complete the Questionnaire on Import Licensing
Procedures by 30 September each year (Article 7.3, and appendix).
Committee on Import Licensing back to top
The Committee on Import Licensing, open to all Members, has been
established under Article 4. It meets as necessary to consult on matters relating to the
operation of the Agreement or the furtherance of its objectives.