Presentation on the Agreement on Import Licensing Procedures

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Presentation on the Agreement on Import Licensing
Procedures
By Shashank Priya, Director, Department of
Commerce
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Import Licensing

• Definition Administrative procedures used for
  operation of import licensing regimes requiring
  submission of an application or other
  documentation to the relevant administrative body
  as a prior condition to importation.
• Important points to remember Basis, scope or
  duration of a measure being implemented by a
  licensing procedure is not subject to question
  under this Agreement.

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Background

• GATT Article VIII on fees and formalities
  connected with importation and exportation deals
  with import licensing procedures in a
  non-specific manner such as
• A recognition by Members for the need to minimize
  the incidence and complexity of import and export
  formalities and decrease and simplify import and
  export documentation requirements (para 1 c)

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Background (contd.)

• Requirement to review the operation of laws and
  regulation of Members upon request by another
  Member (para 2)
• Prohibition on imposing substantial penalties for
  minor breaches of Customs regulations or
  procedural requirements
• GATT Article X requires Members to publish
  promptly laws and regulations of general
  application pertaining to requirements of imports
  and exports.

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Historical Backdrop

• Tokyo Round negotiations (1973-79) addressed some
  non tariff measures
• Import licensing was one of them- entered into
  force on 1 January 1980
• Main objective was that import licensing
  procedures should not hinder international trade.
• In Uruguay Round, disciplines on transparency and
  notifications were strengthened.
• Entered into force on 1 January 1995 as part of
  single undertaking
• Tokyo Round Code terminated on 1 January 1996

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Objectives

• Simplify, and bring transparency to, import
  licensing procedures.
• Ensure their fair and equitable application and
  administration
• Procedures applied for granting import licenses
  should not by themselves have restrictive or
  distortive effects on imports

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General Requirements (Art.1)

• The rules and information concerning procedures
  for submission of applications shall be
  published Should cover subjects like eligibility
  of persons, firms, institutions to make such
  applications administrative bodies to be
  approached list of products subject to licensing
  requirements. Such publication, wherever
  practicable, should be 21 days in advance of the
  effective date.

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General Requirements (Art.1)

• Application forms should be simple.
• Only documents and information considered
  strictly necessary may be required on
  application.
• Application/renewal procedures shall be simple.
• Minimum 21 days be given for submitting license
  applications.
• Normally, only one administrative body to be
  approached maximum 3.

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General Requirements (Art.1)

• Application not be refused for minor
  documentation errors.
• No excessive penalty for minor documentation
  errors.
• Licensed imports not to be refused for minor
  variations in value, quantity or weight than that
  appearing on the license on account of normal
  commercial practice.

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Additional Requirements for Automatic Import
Licensing

• Def Automatic import licensing import licensing
  where approval of the application is granted in
  all cases.
• Procedures Automatic import licensing procedures
  shall not have restrictive effects on imports.
  This can be achieved by
• Equal eligibility for all persons/institutions/fir
  ms to apply and obtain import licenses.
• Application be submitted on any working day prior
  to customs clearance of goods.
• (iii) Application for licenses be approved within
  a maximum of 10 working days.

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Non-Automatic Import Licensing

• Def Import Licensing not falling within the
  definition of Automatic Import Licensing.
• Requirements
• Should not have restrictive or distortive effects
  on imports additional to those caused by the
  imposition of the restriction
• In scope and duration, it should correspond to
  the measure to be implemented
• No more administratively burdensome than
  absolutely necessary
• Publish sufficient information regarding the
  basis for granting and/or allocating licenses
  like quota amounts, opening and closing dates of
  quotas and country specific quota allocations

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Non-Automatic Import Licensing

• (iv) Where quota administered by licensing
  overall amount of quota (by quantity and/or
  value) be published at least 21 days in advance
• Transparency in quota allocation- there should be
  no discrimination among applicants if license is
  refused, on request, reason for refusal be given
  in writing and there should be a right of appeal
• Period for processing applications shall not be
  longer than 30 days if applications are
  considered as and when received, and not longer
  than 60 days if applications are considered
  simultaneously

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Non-Automatic Import Licensing (contd.)

• (vi) While allocating licenses, Members should
  consider import performance of the applicant.
  Whether licenses issued in the past fully
  utilized. Reasonable distribution of licenses to
  new importers. Special consideration be given to
  those importers importing products originating in
  DCs and in particular, LDCs.
• (vii) Validity of a license should be of
  reasonable duration and not be so short as to
  preclude imports, including from distant sources.

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Non-Automatic Import Licensing (contd.)

• (viii) Licenses should be issued in economic
  quantities
• (ix) Members are to provide, upon request of any
  Member having an interest in the trade in the
  product concerned, all relevant informations.

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Notifications

• Members to submit copies of publications
  containing information on import licensing
  procedures and the full text of relevant laws and
  regulations
• Where publications and legislations are not in a
  WTO official language, such notifications should
  be accompanied by a summary in one of the WTO
  official languages (Article 1.4a and 8.2 b)

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Notification of Changes

• Members which institute licensing procedures or
  introduce changes in these procedures are
  required to notify the Committee on Import
  Licensing within 60 days of publication
• Such notification should include information on
  products subject to licensing contact point for
  information on eligibility administrative bodies
  for submission of applications date and name of
  publications where licensing procedures are
  published along with their copies whether
  licensing is automatic or non-automatic
  administrative purpose of automatic import
  licensing procedures measures implemented
  through non automatic import licensing
  procedures expected duration of the licensing
  procedures (Articles 5.1-5.4)

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Reverse Notification

• A Member which considers that another Member has
  not notified a licensing procedure or changes
  therein, may bring the matter to the attention of
  such other Member.
• If the other Member still does not make a prompt
  notification, such Member may itself notify the
  licensing procedures or the changes therein
  (Article 5.5)
• This provision has not yet been used.
• Members to complete an annual questionnaire on
  import licensing procedures by 30 September of
  each year (Article 7.3)

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• Thank You.