                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 
rgimes 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 rgimes 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 rgime 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;

      (c)  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;

      (c)  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.



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