1. There shall be multilateral
negotiations on the question of emergency safeguard measures based
on the principle of non-discrimination. The results of such negotiations
shall enter into effect on a date not later than three years from
the date of entry into force of the WTO Agreement.
2. In the period before
the entry into effect of the results of the negotiations referred
to in paragraph 1, any Member may, notwithstanding the provisions
of paragraph 1 of
notify the Council on Trade in Services of its intention to modify
or withdraw a specific commitment after a period of one year from
the date on which the commitment enters into force; provided that
the Member shows cause to the Council that the modification or withdrawal
cannot await the lapse of the three-year period provided for in paragraph
3. The provisions of paragraph
2 shall cease to apply three years after the date of entry into force
of the WTO Agreement.
1. Except under the circumstances
Article XII, a Member
shall not apply restrictions on international transfers and payments
for current transactions relating to its specific commitments.
2. Nothing in this Agreement
shall affect the rights and obligations of the members of the International
Monetary Fund under the Articles of Agreement of the Fund, including
the use of exchange actions which are in conformity with the Articles
of Agreement, provided that a Member shall not impose restrictions
on any capital transactions inconsistently with its specific commitments
regarding such transactions, except under
XII or at the request of the Fund.
to Safeguard the Balance of Payments
1. In the event of serious
balance-of-payments and external financial difficulties or threat
thereof, a Member may adopt or maintain restrictions on trade in services
on which it has undertaken specific commitments, including on payments
or transfers for transactions related to such commitments. It is recognized
that particular pressures on the balance of payments of a Member in
the process of economic development or economic transition may necessitate
the use of restrictions to ensure, inter alia, the maintenance
of a level of financial reserves adequate for the implementation of
its programme of economic development or economic transition.
2. The restrictions referred
to in paragraph 1:
(a) shall not discriminate among Members;
(b) shall be consistent with the Articles of Agreement of the International Monetary Fund;
(c) shall avoid unnecessary damage to the commercial, economic and financial interests of any other Member;
(d) shall not exceed those necessary to deal with the circumstances described in paragraph 1;
(e) shall be temporary and be phased out progressively as the situation specified in paragraph 1 improves.
3. In determining the
incidence of such restrictions, Members may give priority to the supply
of services which are more essential to their economic or development
programmes. However, such restrictions shall not be adopted or maintained
for the purpose of protecting a particular service sector.
4. Any restrictions adopted
or maintained under paragraph 1, or any changes therein, shall be
promptly notified to the General Council.
Members applying the provisions of this Article shall consult
promptly with the Committee on Balance-of-Payments Restrictions on
restrictions adopted under this Article.
(b) The Ministerial Conference shall establish procedures for periodic consultations with the objective of enabling such recommendations to be made to the Member concerned as it may deem appropriate.
(c) Such consultations shall assess the balance-of-payment situation of the Member concerned and the restrictions adopted or maintained under this Article, taking into account, inter alia, such factors as:
(i) the nature and extent of the balance-of-payments and the external financial difficulties;
(ii) the external economic and trading environment of the consulting Member;
(iii) alternative corrective measures which may be available.
(d) The consultations shall address the compliance of any restrictions with paragraph 2, in particular the progressive phaseout of restrictions in accordance with paragraph 2(e).
(e) In such consultations, all findings of statistical and other facts presented by the International Monetary Fund relating to foreign exchange, monetary reserves and balance of payments, shall be accepted and conclusions shall be based on the assessment by the Fund of the balance-of-payments and the external financial situation of the consulting Member.
6. If a Member which is
not a member of the International Monetary Fund wishes to apply the
provisions of this Article, the Ministerial Conference shall establish
a review procedure and any other procedures necessary.
shall not apply to laws, regulations or requirements governing the
procurement by governmental agencies of services purchased for governmental
purposes and not with a view to commercial resale or with a view to
use in the supply of services for commercial sale.
2. There shall be multilateral
negotiations on government procurement in services under this Agreement
within two years from the date of entry into force of the WTO Agreement.
Subject to the requirement that such measures are not applied
in a manner which would constitute a means of arbitrary or unjustifiable
discrimination between countries where like conditions prevail, or
a disguised restriction on trade in services, nothing in this Agreement
shall be construed to prevent the adoption or enforcement by any Member
(a) necessary to protect public morals or to maintain public order;
(b) necessary to protect human, animal or plant life or health;
(c) necessary to secure compliance with laws or regulations which are not inconsistent with the provisions of this Agreement including those relating to:
(i) the prevention of deceptive and fraudulent practices or to deal with the effects of a default on services contracts;
(ii) the protection of the privacy of individuals in relation to the processing and dissemination of personal data and the protection of confidentiality of individual records and accounts;
(d) inconsistent with Article XVII, provided that the difference in treatment is aimed at ensuring the equitable or effective imposition or collection of direct taxes in respect of services or service suppliers of other Members;
(e) inconsistent with Article II, provided that the difference in treatment is the result of an agreement on the avoidance of double taxation or provisions on the avoidance of double taxation in any other international agreement or arrangement by which the Member is bound.
1. Nothing in this Agreement
shall be construed:
(a) to require any Member to furnish any information, the disclosure of which it considers contrary to its essential security interests; or
(b) to prevent any Member from taking any action which it considers necessary for the protection of its essential security interests:
(i) relating to the supply of services as carried out directly or indirectly for the purpose of provisioning a military establishment;
(ii) relating to fissionable and fusionable materials or the materials from which they are derived;
(iii) taken in time of war or other emergency in international relations; or
(c) to prevent any Member from taking any action in pursuance of its obligations under the United Nations Charter for the maintenance of international peace and security.
2. The Council for Trade
in Services shall be informed to the fullest extent possible of measures
taken under paragraphs 1(b) and (c) and of their termination.
1. Members recognize that,
in certain circumstances, subsidies may have distortive effects on
trade in services. Members shall enter into negotiations with a view
to developing the necessary multilateral disciplines to avoid such
The negotiations shall also address the appropriateness of countervailing
procedures. Such negotiations shall recognize the role of subsidies
in relation to the development programmes of developing countries
and take into account the needs of Members, particularly developing
country Members, for flexibility in this area. For the purpose of
such negotiations, Members shall exchange information concerning all
subsidies related to trade in services that they provide to their
domestic service suppliers.
2. Any Member which considers
that it is adversely affected by a subsidy of another Member may request
consultations with that Member on such matters. Such requests shall
be accorded sympathetic consideration.
1. With respect to market
access through the modes of supply identified in
I, each Member shall accord services and service suppliers of
any other Member treatment no less favourable than that provided for
under the terms, limitations and conditions agreed and specified in
2. In sectors where market-access
commitments are undertaken, the measures which a Member shall not
maintain or adopt either on the basis of a regional subdivision or
on the basis of its entire territory, unless otherwise specified in
its Schedule, are defined as:
(a) limitations on the number of service suppliers whether in the form of numerical quotas, monopolies, exclusive service suppliers or the requirements of an economic needs test;
(b) limitations on the total value of service transactions or assets in the form of numerical quotas or the requirement of an economic needs test;
(c) limitations on the total number of service operations or on the total quantity of service output expressed in terms of designated numerical units in the form of quotas or the requirement of an economic needs test;
(d) limitations on the total number of natural persons that may be employed in a particular service sector or that a service supplier may employ and who are necessary for, and directly related to, the supply of a specific service in the form of numerical quotas or the requirement of an economic needs test;
(e) measures which restrict or require specific types of legal entity or joint venture through which a service supplier may supply a service; and
(f) limitations on the participation of foreign capital in terms of maximum percentage limit on foreign shareholding or the total value of individual or aggregate foreign investment.
1. In the sectors inscribed
in its Schedule, and subject to any conditions and qualifications
set out therein, each Member shall accord to services and service
suppliers of any other Member, in respect of all measures affecting
the supply of services, treatment no less favourable than that it
accords to its own like services and service suppliers.
2. A Member may meet the
requirement of paragraph 1 by according to services and service suppliers
of any other Member, either formally identical treatment or formally
different treatment to that it accords to its own like services and
3. Formally identical
or formally different treatment shall be considered to be less favourable
if it modifies the conditions of competition in favour of services
or service suppliers of the Member compared to like services or service
suppliers of any other Member.
Members may negotiate commitments with respect to measures
affecting trade in services not subject to scheduling under Articles
including those regarding qualifications, standards or licensing matters.
Such commitments shall be inscribed in a Member’s Schedule.
of Specific Commitments
1. In pursuance of the
objectives of this Agreement, Members shall enter into successive
rounds of negotiations, beginning not later than five years from the
date of entry into force of the WTO Agreement and periodically thereafter,
with a view to achieving a progressively higher level of liberalization.
Such negotiations shall be directed to the reduction or elimination
of the adverse effects on trade in services of measures as a means
of providing effective market access. This process shall take place
with a view to promoting the interests of all participants on a mutually
advantageous basis and to securing an overall balance of rights and
process of liberalization shall take place with due respect for national
policy objectives and the level of development of individual Members,
both overall and in individual sectors. There shall be appropriate
flexibility for individual developing country Members for opening
fewer sectors, liberalizing fewer types of transactions, progressively
extending market access in line with their development situation and,
when making access to their markets available to foreign service suppliers,
attaching to such access conditions aimed at achieving the objectives
referred to in
3. For each round, negotiating guidelines and procedures shall
be established. For the purposes of establishing such guidelines,
the Council for Trade in Services shall carry out an assessment of
trade in services in overall terms and on a sectoral basis with reference
to the objectives of this Agreement, including those set out in paragraph
Article IV. Negotiating guidelines
shall establish modalities for the treatment of liberalization undertaken
autonomously by Members since previous negotiations, as well as for
the special treatment for least-developed country Members under the
provisions of paragraph 3 of
4. The process of progressive
liberalization shall be advanced in each such round through bilateral,
plurilateral or multilateral negotiations directed towards increasing
the general level of specific commitments undertaken by Members under
of Specific Commitments
1. Each Member shall set
out in a schedule the specific commitments it undertakes under Part
III of this Agreement. With respect to sectors where such commitments
are undertaken, each Schedule shall specify:
(a) terms, limitations and conditions on market access;
(b) conditions and qualifications on national treatment;
(c) undertakings relating to additional commitments;
(d) where appropriate the time-frame for implementation of such commitments; and
(e) the date of entry into force of such commitments.
2. Measures inconsistent
with both Articles
shall be inscribed in the column relating to Article XVI. In this
case the inscription will be considered to provide a condition or
3. Schedules of specific
commitments shall be annexed to this Agreement and shall form an integral
A Member (referred to in this Article as the “modifying Member”)
may modify or withdraw any commitment in its Schedule, at any time
after three years have elapsed from the date on which that commitment
entered into force, in accordance with the provisions of this Article.
(b) A modifying Member shall notify its intent to modify or withdraw a commitment pursuant to this Article to the Council for Trade in Services no later than three months before the intended date of implementation of the modification or withdrawal.
At the request of any Member the benefits of which under this
Agreement may be affected (referred to in this Article as an “affected
Member”) by a proposed modification or withdrawal notified under subparagraph
1(b), the modifying Member shall enter into negotiations with a view
to reaching agreement on any necessary compensatory adjustment. In
such negotiations and agreement, the Members concerned shall endeavour
to maintain a general level of mutually advantageous commitments not
less favourable to trade than that provided for in Schedules of specific
commitments prior to such negotiations.
(b) Compensatory adjustments shall be made on a most-favoured-nation basis.
If agreement is not reached between the modifying Member and
any affected Member before the end of the period provided for negotiations,
such affected Member may refer the matter to arbitration. Any affected
Member that wishes to enforce a right that it may have to compensation
must participate in the arbitration.
(b) If no affected Member has requested arbitration, the modifying Member shall be free to implement the proposed modification or withdrawal.
The modifying Member may not modify or withdraw its commitment
until it has made compensatory adjustments in conformity with the
findings of the arbitration.
(b) If the modifying Member implements its proposed modification or withdrawal and does not comply with the findings of the arbitration, any affected Member that participated in the arbitration may modify or withdraw substantially equivalent benefits in conformity with those findings. Notwithstanding Article II, such a modification or withdrawal may be implemented solely with respect to the modifying Member.
5. The Council for Trade
in Services shall establish procedures for rectification or modification
of Schedules. Any Member which has modified or withdrawn scheduled
commitments under this Article shall modify its Schedule according
to such procedures.
1. Each Member shall accord
sympathetic consideration to, and shall afford adequate opportunity
for, consultation regarding such representations as may be made by
any other Member with respect to any matter affecting the operation
of this Agreement. The
Dispute Settlement Understanding
(DSU) shall apply to such consultations.
2. The Council for Trade
in Services or the Dispute Settlement Body (DSB) may, at the request
of a Member, consult with any Member or Members in respect of any
matter for which it has not been possible to find a satisfactory solution
through consultation under paragraph 1.
3. A Member may not invoke
Article XVII, either under this
Article XXIII, with
respect to a measure of another Member that falls within the scope
of an international agreement between them relating to the avoidance
of double taxation. In case of disagreement between Members as to
whether a measure falls within the scope of such an agreement between
them, it shall be open to either Member to bring this matter before
the Council for Trade in Services.
The Council shall refer the matter to arbitration. The decision of
the arbitrator shall be final and binding on the Members.
Settlement and Enforcement
1. If any Member should
consider that any other Member fails to carry out its obligations
or specific commitments under this Agreement, it may with a view to
reaching a mutually satisfactory resolution of the matter have recourse
to the DSU.
2. If the DSB considers
that the circumstances are serious enough to justify such action,
it may authorize a Member or Members to suspend the application to
any other Member or Members of obligations and specific commitments
in accordance with
Article 22 of the
3. If any Member considers
that any benefit it could reasonably have expected to accrue to it
under a specific commitment of another Member under Part III of this
Agreement is being nullified or impaired as a result of the application
of any measure which does not conflict with the provisions of this
Agreement, it may have recourse to the DSU. If the measure is determined
by the DSB to have nullified or impaired such a benefit, the Member
affected shall be entitled to a mutually satisfactory adjustment on
the basis of paragraph 2 of
XXI, which may include the modification or withdrawal of the measure.
In the event an agreement cannot be reached between the Members concerned,
Article 22 of the DSU shall apply.
for Trade in Services
1. The Council for Trade in Services shall carry out such functions as may be assigned to it to facilitate the operation of this Agreement and further its objectives. The Council may establish such subsidiary bodies as it considers appropriate for the effective discharge of its functions.
2. The Council and, unless
the Council decides otherwise, its subsidiary bodies shall be open
to participation by representatives of all Members.
3. The Chairman of the
Council shall be elected by the Members.
1. Service suppliers of
Members which are in need of such assistance shall have access to
the services of contact points referred to in paragraph 2 of
with Other International Organizations
The General Council shall make appropriate arrangements for
consultation and cooperation with the United Nations and its specialized
agencies as well as with other intergovernmental organizations concerned
A Member may deny the benefits of this Agreement:
(a) to the supply of a service, if it establishes that the service is supplied from or in the territory of a non-Member or of a Member to which the denying Member does not apply the WTO Agreement;
(b) in the case of the supply of a maritime transport service, if it establishes that the service is supplied:
(i) by a vessel registered under the laws of a non-Member or of a Member to which the denying Member does not apply the WTO Agreement, and
(ii) by a person which operates and/or uses the vessel in whole or in part but which is of a non-Member or of a Member to which the denying Member does not apply the WTO Agreement;
(c) to a service supplier that is a juridical person, if it establishes that it is not a service supplier of another Member, or that it is a service supplier of a Member to which the denying Member does not apply the WTO Agreement.
For the purpose of this Agreement:
(b) “supply of a service” includes the production, distribution, marketing, sale and delivery of a service;
(c) “measures by Members affecting trade in services” include measures in respect of
(i) the purchase, payment or use of a service;
(ii) the access to and use of, in connection with the supply of a service, services which are required by those Members to be offered to the public generally;
(iii) the presence, including commercial presence, of persons of a Member for the supply of a service in the territory of another Member;
(d) “commercial presence” means any type of business or professional establishment, including through
(i) the constitution, acquisition or maintenance of a juridical person, or
(ii) the creation or maintenance of a branch or a representative office,
within the territory of a Member for the purpose of supplying a service;
(e) “sector” of a service means,
(i) with reference to a specific commitment, one or more, or all, subsectors of that service, as specified in a Member’s Schedule,
(ii) otherwise, the whole of that service sector, including all of its subsectors;
(f) “service of another Member” means a service which is supplied,
(i) from or in the territory of that other Member, or in the case of maritime transport, by a vessel registered under the laws of that other Member, or by a person of that other Member which supplies the service through the operation of a vessel and/or its use in whole or in part; or
(ii) in the case of the supply of a service through commercial presence or through the presence of natural persons, by a service supplier of that other Member;
(g) “service supplier” means any person that supplies a service;
(h) “monopoly supplier of a service” means any person, public or private, which in the relevant market of the territory of a Member is authorized or established formally or in effect by that Member as the sole supplier of that service;
(i) “service consumer” means any person that receives or uses a service;
(j) “person” means either a natural person or a juridical person;
(k) “natural person of another Member” means a natural person who resides in the territory of that other Member or any other Member, and who under the law of that other Member:
(i) is a national of that other Member; or
(ii) has the right of permanent residence in that other Member, in the case of a Member which:
1. does not have nationals; or
2. accords substantially the same treatment to its permanent residents as it does to its nationals in respect of measures affecting trade in services, as notified in its acceptance of or accession to the WTO Agreement, provided that no Member is obligated to accord to such permanent residents treatment more favourable than would be accorded by that other Member to such permanent residents. Such notification shall include the assurance to assume, with respect to those permanent residents, in accordance with its laws and regulations, the same responsibilities that other Member bears with respect to its nationals;
(l) “juridical person” means any legal entity duly constituted or otherwise organized under applicable law, whether for profit or otherwise, and whether privately-owned or governmentally-owned, including any corporation, trust, partnership, joint venture, sole proprietorship or association;
(m) “juridical person of another Member” means a juridical person which is either:
(i) constituted or otherwise organized under the law of that other Member, and is engaged in substantive business operations in the territory of that Member or any other Member; or
(ii) in the case of the supply of a service through commercial presence, owned or controlled by:
1. natural persons of that Member; or
2. juridical persons of that other Member identified under subparagraph (i);
(n) a juridical person is:
(i) “owned” by persons of a Member if more than 50 per cent of the equity interest in it is beneficially owned by persons of that Member;
(ii) “controlled” by persons of a Member if such persons have the power to name a majority of its directors or otherwise to legally direct its actions;
(iii) “affiliated” with another person when it controls, or is controlled by, that other person; or when it and the other person are both controlled by the same person;
(o) “direct taxes” comprise all taxes on total income, on total capital or on elements of income or of capital, including taxes on gains from the alienation of property, taxes on estates, inheritances and gifts, and taxes on the total amounts of wages or salaries paid by enterprises, as well as taxes on capital appreciation.
The Annexes to this Agreement are
an integral part of this Agreement.
Measures that are aimed at ensuring the equitable or effective imposition or collection of direct taxes include measures taken by a Member under its taxation system which:
(i) apply to non-resident service suppliers in recognition of the fact that the tax obligation of non-residents is determined with respect to taxable items sourced or located in the Member’s territory; or
(ii) apply to non-residents in order to ensure the imposition or collection of taxes in the Member’s territory; or(iii) apply to non-residents or residents in order to prevent the avoidance or evasion of taxes, including compliance measures; or(iv) apply to consumers of services supplied in or from the territory of another Member in order to ensure the imposition or collection of taxes on such consumers derived from sources in the Member’s territory; or
(v) distinguish service suppliers subject to tax on worldwide taxable items from other service suppliers, in recognition of the difference in the nature of the tax base between them; or(vi) determine, allocate or apportion income, profit, gain, loss, deduction or credit of resident persons or branches, or between related persons or branches of the same person, in order to safeguard the Member’s tax base.