Agreements and Arrangements

At the meeting of the Negotiating Group held on 31 January- 2 February 1990, an informal group, open to all interested countries, was established with the task of clarifying and exchanging views on the proposals under consideration (MTN.GNG/NG8/15, item B). This group held its initial meeting on 28 February 1990.

In pursuance of the Decision of the NG8 at its meeting on 21-22 March 1990 (MTN.GNG/NG8/16, para. 14) and following the second meeting of the informal group on 4 May 1990, attached hereto is an informal side-by-side text produced by the secretariat. It gives the status of work

prior to the next informal meeting to be held on 11 June 1990.

Technical Barriers to Trade Division

1 June 1990

Agreement on Import Licensing

Procedures

PRESENT CODE PROPOSAL BY THE UNITED COMMENTS^*

STATES AND HONG KONG

Preamble Preamble Preamble

Having regard to the No change. No comments.

Multilateral Trade

Negotiations, the Parties to

this Agreement on Import

Licensing Procedures

(hereinafter referred to as

"Parties" and "this

Agreement");

Desiring to further the No change. One delegation suggested to

objectives of the General include a reference to the

Agreement on Tariffs and recognition and reaffirmation

Trade (hereinafter referred of the GATT principles here

to as "General Agreement" or rather than mention Article XI

"GATT"); below.

Taking into account the No change. No comments.

particular trade, development

and financial needs of

developing countries;

_______________

*_{This column summarizes main comments made, as, in the Secretariat's judgement, they seem to appear after the meetings of the Informal Group on 28 February and 4 May 1990. Earlier comments on the revised proposal (NG8/W/53/Rev.1), made at the November 1989 meeting, are summarized in MTN.GNG/NG8/14, paragraphs 57-75. Apart from particular comments on individual proposed provisions the point has been made that the whole text has to be considered in a comprehensive and balanced manner.}

Agreement on Import Licensing Procedures

PRESENT CODE PROPOSAL BY THE UNITED COMMENTS

STATES AND HONG KONG

Recognizing the usefulness of No change. No comments.

automatic import licensing for

certain purposes and that such

licensing should not be used to

restrict trade;

Desiring to ensure that import Some delegations suggested the

licensing is not utilized in a deletion of this provision

manner contrary to GATT because it was not the purpose

principles and obligations; of the Code to ensure

Agreement on Import Licensing Procedures

PRESENT CODE PROPOSAL BY THE UNITED COMMENTS

STATES AND HONG KONG

Recognizing that import Recognizing and reaffirming the One comment was to delete this

licensing may be employed to provisions of Article XI of the reference because Article XI

administer measures such as General Agreement as they was not the only GATT Article

those adopted pursuant to the apply to import licensing; which might be relevant. It

relevant provisions of the was also suggested to delete

GATT; the reference to Art. XI since

this was a provision of

substance. One suggestion was

to add the word "procedures"

at the end. The sponsors

argued that Article XI was the

principle GATT provision that

gave rise to licensing

Recognizing also that the Recognizing that the Two delegations believed the

inappropriate use of import inappropriate or excessive word "excessive" did not add

licensing procedures may use of import licensing to clarity or to the operational

impede the flow of procedures constitutes a nature of the Code and would be

international trade; particular impediment to difficult to measure. One

the flow of international trade; delegation suggested inserting

the words "could constitute

further" instead of

"constitutes a particular

impediment" to show there was

Agreement on Import Licensing Procedures

PRESENT CODE PROPOSAL BY THE UNITED COMMENTS

STATES AND HONG KONG

Convinced that import No comments.

licensing, particularly

non-automatic import

licensing, should be

implemented in a transparent

and predictable manner;

Recognizing that non-automatic No comments.

licensing procedures should be

no more administratively

burdensome than absolutely

necessary to administer the

relevant measure;

Desiring to simplify, and bring No change. No comments.

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 No change. No comments.

consultative mechanism and the

speedy, effective and equitable

resolution of disputes arising

under this Agreement;

Agreement on Import Licensing Procedures

PRESENT CODE PROPOSAL BY THE UNITED COMMENTS

STATES AND HONG KONG

Hereby agree as follows: In a general comment, one

delegation said that what was

added in the Preamble was in

line with the purpose and scope

of the Code. It was therefore

prepared to amend the Code in

all regards which were in line

with the Preamble.

Article 1: General Provisions Article 1: General Provisions Article 1: General Provisions

Article 1.1

For the purpose of this No change. No comments.

Agreement, import licensing is

defined as administrative

procedures¹ used for the

operation of import licensing

regimes 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 country.

_______________

1_{Those procedures referred to as "licensing" as well as other similar administrative}

procedures.

Agreement on Import Licensing Procedures

PRESENT CODE PROPOSAL BY THE UNITED COMMENTS

STATES AND HONG KONG

Article 1.2

The Parties shall ensure that No change. No comments.

the administrative procedures

used to implement import

licensing regimes are in

conformity with the relevant

provisions of the GATT

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 countries.

Article 1.3

The rules for import licensing No change. No comments.

procedures shall be neutral in

application and administered in

a fair and equitable manner.

Agreement on Import Licensing Procedures

PRESENT CODE PROPOSAL BY THE UNITED COMMENTS

STATES AND HONG KONG

Article 1.4 Article 1.4 (Based on Article 1.4

Committee Recommendation)

The rules and all information The rules and all information Some delegations have noted

concerning procedures for the concerning procedures for the that they did not have specific

submission of applications, submission of applications, opening dates for the

including the eligibility of including the eligibility of submission of applications. One

persons, firms and institutions persons, firms, and delegation, using a tender

to make such applications, and institutions to make such system, said that the word

the lists of products subject to applications, and the lists of "consideration" instead of

the licensing requirement shall products subject to the "submission" would meet this

be published promptly in such a licensing requirement shall be point. Another delegation has

manner as to enable published in the sources argued that time limits might

governments and traders to notified to the create impediments to trading

become acquainted with them. secretariat at least and that the 21 day period had

Any changes in either the rules twenty-one days prior to to do with a quota system,

concerning licensing the specific opening date which its authorities did not

procedures or the list of for the submission of follow. One delegation said

products subject to import applications, and in such a that Article 1.4 should be made

licensing shall also be promptly manner as to enable more generic and applicable to

published in the same manner. governments and traders to all systems. The drafters

Copies of these publications become acquainted with them. agreed.

shall also be made available to Any changes in either the rules

the GATT Secretariat. concerning licensing Recommendation adopted by the

procedures or the list of Committee on Import Licensing

products subject to import Procedures on 19 May 1987:

licensing shall be published in "The rules and all information

the same manner, at least concerning procedures for the

twenty-one days before submission of applications

the effective date of the referred to in Article 1.4 and

change. the lists of products subject to

the licensing requirement, as

well as any changes in either

Agreement on Import Licensing Procedures

PRESENT CODE PROPOSAL BY THE UNITED COMMENTS

STATES AND HONG KONG

During this twenty-one-day One delegation, supported by

period, Parties shall be another, said that the political

make comments in writing and its country did not permit

to discuss these comments consultations with other

upon request. The concerned governments before making

Agreement on Import Licensing Procedures

PRESENT CODE PROPOSAL BY THE UNITED COMMENTS

STATES AND HONG KONG

Agreement on Import Licensing Procedures

PRESENT CODE PROPOSAL BY THE UNITED COMMENTS

STATES AND HONG KONG

situations arise which make it expressed concern that the

absolutely necessary to word "situations" might permit

provide for an early opening systematic use of this

date for the submission of paragraph. Although there was

licensing applications, the a Committee Recommendation

information referred to in (see Recommendation in Article

sub-paragraph 1 shall be 3.5(e)), this paragraph might

published and notified to the have to be re-evaluated. The

GATT secretariat immediately sponsors have replied that the

and in no case later than seven Committee Recommendation

days after the announcement of had been carefully reflected

the quota or other measure upon. This paragraph was a

involving an import licensing response to concerns voiced

Agreement on Import Licensing Procedures

PRESENT CODE PROPOSAL BY THE UNITED COMMENTS

STATES AND HONG KONG

Article 1.5 Article 1.5 Article 1.5

Application forms and, where No change. No comments.

applicable, renewal forms shall

be as simple as possible. Such

documents and information as

are considered strictly

necessary for the proper

functioning of the licensing

régime may be required on

application,

Article 1.6 Article 1.6 (Based on Article 1.6

Application procedures and, Application procedures and, Committee Recommendation of

where applicable, renewal where applicable, renewal 19 May 1987; "When there is

procedures shall be as simple procedures shall be as simple a closing date for the

as possible. Applicants shall as possible. Where there is submission of licensing

have to approach only one a closing date for the applications, applicants should

administrative body previously submission of licensing be allowed at least 21 days for

specified in the rules referred applications, applicants making such submissions.

to in paragraph 4 above in should be allowed at least However, this provision should

connection with an application twenty-one days for not be interpreted as

and shall be allowed a making such submissions. derogating from Article 3(a),

reasonable period therefor. In However, this provision particularly in cases where

cases where it is strictly should not be interpreted insufficient amounts of

indispensable that more than as derogating from applications have been received

one administrative body is to Article 3(5)(a), within the 21 days."

be approached in connection particularly in cases

with an application, these shall where insufficient One delegation visualized

be kept to the minimum number amounts of applications possible misuse as there could

possible. have been received within be a great rush for applications

Agreement on Import Licensing Procedures

PRESENT CODE PROPOSAL BY THE UNITED COMMENTS

STATES AND HONG KONG

this stipulated period. with such advance notices of

Applicants shall have to closing dates. The sponsors

approach only one replied that unlike Art.1.4

administrative body previously which dealt with notification in

specified in the rules referred advance, this proposal dealt

to in paragraph 1 of with how much time should be

Article 1.4 above in allowed for submission of

connection with an application applications. Stating 21 days

and shall be allowed a would give predictability to

reasonable period therefor. traders who would not have to

rush to get applications in.

Questions were also raised

regarding the intention of the

cross reference to Article

3(5)(a).

In cases where it is strictly Committee Recommendation of

indispensable that more than 19 May 1987: "In cases

one administrative body is to where it is strictly

be approached in connection indispensable that more than

with an application, one administrative body is to

applicants shall not need be approached in connection

to approach more than with an application, applicants

two administrative should not need to approach

bodies. more than two administrative

Agreement on Import Licensing Procedures

PRESENT CODE PROPOSAL BY THE UNITED COMMENTS

STATES AND HONG KONG

Agreement on Import Licensing Procedures

PRESENT CODE PROPOSAL BY THE UNITED COMMENTS

STATES AND HONG KONG

Article 1.7 Article 1.7 Article 1.7

No application shall be refused No change. No comments.

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.

Article 1.8 Article 1.8 Article 1.8

Licensed imports shall not be No change. No comments.

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.

Agreement on Import Licensing Procedures

PRESENT CODE PROPOSAL BY THE UNITED COMMENTS

STATES AND HONG KONG

Article 1.9 Article 1.9 Article 1.9

The foreign exchange No change. No comments.

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.

Article 1.10 Article 1.10 Article 1.10

With regard to security No change. No comments.

exceptions, the provisions of

Article XXI of the GATT apply.

Article 1.11 Article 1.11 Article 1.11

The provisions of this No change. No comments.

Agreement shall not require

any Party 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.

Agreement on Import Licensing Procedures

PRESENT CODE PROPOSAL BY THE UNITED COMMENTS

STATES AND HONG KONG

Article 2: Automatic import Article 2: Automatic import Article 2: Automatic import

licensing² licensing licensing

Article 2.1 Revised Article 2.1 Revised Article 2.1

Automatic import licensing is Automatic import licensing is One delegation considered that

defined as import licensing defined as import licensing the amendments proposed

where approval of the where approval of the originally might lead to

application is freely granted. application is freely granted in confusion and that it was

all cases in accordance with superfluous to refer to the

the requirements of Article legal consequences found in

2.2. particularly within the Art. 2.2 in this definition of the

time limits established in automatic licence itself. The

Article 2.2(e), sponsors replied that their

main concern was about Art.

2.2(e), stated that they would

be amenable to the following:

"where, in all cases,

approval of the application is

freely granted within a

maximum of [7] [10]

working days".

_______________

_{2Those 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 Article 2 below.}

Agreement on Import Licensing Procedures

PRESENT CODE PROPOSAL BY THE UNITED COMMENTS

STATES AND HONG KONG

Article 2.2 Article 2.2 Article 2.2

The following provisions,³ in No change. No comments.

addition to those in paragraphs

1 to 11 of Article 1 and

paragraph 1 of Article 2

above, shall apply to automatic

import licensing procedures:

(a) Automatic licensing No change. No comments.

procedures shall not be

administered in a manner so as

to have restricting effects on

imports subject to automatic

licensing;

(b) Parties recognize that (b) Parties recognize that

automatic import licensing may automatic import licensing may

be necessary whenever other be necessary whenever other

appropriate procedures are not appropriate procedures are not

available. Automatic import available. Automatic import

licensing may be maintained as licensing may be maintained as

long as the circumstances long as the circumstances

which gave rise to its which gave rise to its

introduction prevail or as long introduction prevail and as

as its underlying long as its underlying

administrative purposes cannot administrative purposes cannot

be achieved in a more be achieved in a more

appropriate way; appropriate way;

_______________

3_{A developing country Party, which has specific difficulties with the requirements of sub-}

paragraphs (d) and (e) below may, upon notification to the Committee referred to in paragraph 1 of Article 4, delay the application of these sub-paragraphs by not more than two years from the date of entry into force of this Agreement for such Party.

Agreement on Import Licensing Procedures

PRESENT CODE PROPOSAL BY THE UNITED COMMENTS

STATES AND HONG KONG

(c) Any person, firm or No change. No comments.

institution which fulfils the

legal requirements of the

importing country for engaging

in import operations involving

products subject to automatic

licensing shall be equally

eligible to apply for and to

obtain import licences;

d) Applications for licences No change. No comments.

may be submitted on any

working day prior to the

customs clearance of the

goods;

(e) Applications for licences No change. One delegation suggested

when submitted in appropriate setting the limit at seven days.

and complete form shall be

approved immediately on

receipt, to the extent

administratively feasible, but

within a maximum of ten

working days.

Agreement on Import Licensing Procedures

PRESENT CODE PROPOSAL BY THE UNITED COMMENTS

STATES AND HONG KONG

Article 3: Non-automatic Article 3: Non-automatic Article 3: Non-automatic

import licensing import licensing import licensing

New Article 3.1 New Article 3.1

The following provisions, in Non-automatic import licensing One delegation believed that

addition to those in paragraphs is defined as import licensing this paragraph should make

1 to 11 of Article 1 above, not falling within the definition reference to Art. 2.1

shall apply to non-automatic contained in Article 2 above. specifically, not Art. 2 in

import licensing procedures, general. The sponsors replied

that is, import licensing that Art. 2 was referred to

procedures not falling under here because of the cross-

paragraphs 1 and 2 of Article 2 reference to Art. 2.2 in Art.

above: 2.1. They were open to

Non-automatic licensing The sponsors referred to this

procedures shall correspond in proposal as modest, stipulating

scope and duration to the nothing more nor less than that

measure they are used to an import licensing procedure

implement, and shall be no should not extend beyond the

more administratively measure it implemented. They

burdensome than absolutely have agreed with a comment by

necessary to administer the one delegation that Art.3.2

measure. should follow Art. 3.5(a)

Agreement on Import Licensing Procedures

PRESENT CODE PROPOSAL BY THE UNITED COMMENTS

STATES AND HONG KONG

New Article 3.3 New Article 3.3

Given that certain types of One delegation believed this

non-automatic licensing, was preambular rather than

including licensing used to operative language; it was not

administer small quotas which precise enough to show what

fluctuate in size, or general kind of licences the drafters

Parties shall take particular licensing requirements used to

Agreement on Import Licensing Procedures

PRESENT CODE PROPOSAL BY THE UNITED COMMENTS

STATES AND HONG KONG

Agreement on Import Licensing Procedures

PRESENT CODE PROPOSAL BY THE UNITED COMMENTS

STATES AND HONG KONG

may be granted to licensing exceptions the drafters had in

requirements, such exceptions mind. If what was meant was a

shall be granted in a manner special provision for

that is fair and equitable to all exceptions to the rule, this

traders. Parties shall publish might implicitly recognize

the criteria and/or them. Exceptions to a rule was

exceptions may be granted. dealt with in Article 1.4. The

Notice of any exceptions proposed new Article 3.4 was

granted shall be published as therefore superfluous. The

soon as possible to allow drafters noted that

sufficient time for "exceptions" would cover both

become familiar with them. In requirement per se and

exceptional circumstances exceptions to any requirement

when prior publication is not in the procedure for obtaining a

possible, Parties shall publish licence. The problem was that

and notify exceptions within governments sometimes

fourteen days of granting them. treated exceptions as

Notifications shall include an something that need not be

explanation as to why prior provided for in the rules but

publication was not possible. could be dealt with on an ad hoc