Copyright 1995 NLCIFT
Title:AGREEMENT ON IMPORT LICENSING PROCEDURES
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 used for the operation of
import licensing r‚gimes 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 r‚gimes 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.
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 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 r‚gime 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
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, 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 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 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.