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GATT2_1B.TXT
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1994-01-11
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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(c), 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.