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).