RESTRICTED
WORLD TRADE G/STR/W/31
17September 1996
ORGANIZATION(96-3647)
Original: English Working Party onState Trading Enterprises
DRAFT ILLUSTRATIVE LIST
TheRelationships between Governments andState Trading
Enterprises andState Trading Activities
Thefollowing submission, dated 16September 1996, hasbeenreceived fromthePermanent
Mission ofNewZealand withtherequest thatitbecirculated toallMembers.
_______________
I. Preliminary Guidance
1. Pursuant totheUruguay Round Understanding ontheInterpretation ofArticle XVII ofthe
General Agreement onTariffs andTrade 1994, theWorking Party onStateTrading Enterprises was
mandated todevelop anIllustrative Listshowing thekinds ofrelationships which exist between
governments andstatetrading enterprises andthekinds ofactivities engaged inbysuchenterprises,
which mayberelevant forthepurposes ofArticle XVII.
2. Itwasagreed byMembers thatthefollowing Illustrative Listdoesnotrepresent adefinition(s)
ofwhatconstitutes astatetrading enterprise (STE). ItwasnotthetaskoftheWorking Party tofurther
refine orinterpret thedefinitions ofaSTEprovided inArticle XVII andtheUnderstanding. Instead,
theIllustrative Listisintended toprovide guidance tomembers when deciding whether enterprises
withintheirjurisdictionsmightberegardedasfallingwithintheagreeddefinitionsofaSTEandtherefore
would benotifiable totheWTO.
3. TheListthereforeprovidesachecklistofpossiblerelationshipswithgovernmentandoperational
activities which mayprovide anindication ofwhether aMember should assess theenterprise inquestion
against thesubstantive criteria ofArticle XVII andtheUnderstanding.
4. Although theListisascomprehensive aspossible, itisnotconsidered tobeexhaustive. There
maybeother relationships oractivities thatmight alsogiveanindication ofpossible STEstatus.
Conversely,noneoftheelementslistednecessarilyidentifyaSTE.Certainrelationshipswithgovernment
mightnot,uponclosescrutiny,revealtheexistenceofexclusiveorspecialrightsorprivileges.Similarly,
certain oftheoperational activities setoutbelow could wellbeengaged inbynon-STEs. Itremains
theprerogative ofeachMember todecide whether enterprises under theirjurisdiction fallwithin the
WTO definitions. Equally, other Members havetherighttocounter-notify anyenterprises thatthey
believe should besodetermined, asspeltoutinparagraph 4oftheUnderstanding onArticle XVII.
II. Relationships withGovernment
Thefollowingtypesofrelationshipsbetweentheenterpriseandgovernmentshouldbeconsidered
aspossible indications oftheexistence ofaSTE:G/STR/W/31
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(a) Theenterprise isabranch ofgovernment orastate-owned (orpartially owned) enterprise which
hasasitsprimaryresponsibility,eitherdirectlyorindirectlythroughthirdpartiesundercontract:
(i) theconduct ofimport and/or export operations withrespect toaproduct orgroup of
products; and/or
(ii) thecontrol ofdomestic production and/or distribution withrespect tosuchproducts;
and/or
(iii) thedistribution ofimports withrespect tosuchproducts.
(b) Theenterprise isanentity separate from government (i.e.itisneither abranch of
government norisowned orpartially owned bythegovernment) and
(i) itwasestablished andismaintained forthepurpose ofcarrying outa
government-determinedprogramme(includingpricestabilisation,domesticsupport
scheme, marketing scheme); and/or
(ii) thelegislation under which itwasestablished andismaintained provides forsome
degree ofgovernment control overitsactivities; and/or
(iii) allorpartofitsactivities aresupported bygovernment inoneormore ofthe
following ways:
budget allocations;
interest rate/tax concessions;
guarantees (egforloans oragainst business failure);
revenue from thecollection oftariffs;
anyoff-budget support orassistance thatwould notbeavailable toother private
sector entities; or
(iv) itisfinanced andcontrolled bytheproducers oftheproduct overwhich ithas
marketing authority, andalthough established andmaintained under legislation,
there isnogovernment control overitsactivities.
III. Activities Engaged inbyState Trading Enterprises
5. Thefollowing activities areofthekindwhich might beengaged inbySTEs. Thelisting
isdrawn fromareview ofprevious GATT andWTO notifications. Anenterprise might engage
inoneormore oftheactivities. Asmentioned above, none ofthese activities inthemselves
necessarily candetermine whether anenterprise meets theWTO definition ofanSTE.
Activities directly related toimports/exports ortothetrade regime
(a) Imports and/or exports (including, interalia,import and/or export controls toadminister
globalorbilaterallyagreedtariffquotas/quotas,phytosanitaryregulationsorotherrestraint
arrangements);G/STR/W/31
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(b) Enforcesthestatutoryrequirementsofanagriculturalmarketingschemeand/orstabilization
arrangement;
(c) Authorizes and/or manages domestic distribution ofimports;
(d) Effects purchases andsalesofdomestic production based onpre-determined floor and
ceiling prices (intervention purchases/sales);
(e) Issues credit guarantees forprocessors/exporters;
(f) Engages inexport-and support-related activities suchasstorage, shipping, processing,
packaging andinsuring;
(g) Maintains emergency stocks ofcertain strategic and/or agricultural goods;
Domestic production-related activities -relevant depending onmarket dominance
(h) Authorizes and/or manages domestic production;
(i) Authorizes and/or manages processing ofdomestic production;
(j) Authorizes and/or manages domestic distribution ofproduction;
(k) Determines thepurchase price and/or salesprice ofdomestic production;
Subsidiary activities
(l) Issues permits forimportation orexportation;
(m) Exercises quality control functions forexports;
(n) Engagesinmarketingandpromotionalactivitiesforexportsand/ordomesticconsumption;
(o) Negotiates and/or administers long-term bilateral contracts forexports and/or imports;
(p) Undertakes activities necessary tofulfil contractual obligations entered intobythe
government.