RESTRICTED
WORLD TRADE S/WPPS/W/10
13September 1996
ORGANIZATION
(96-3604)
Working Party onProfessional Services
MUTUAL RECOGNITION AGREEMENTS INTHE ACCOUNTANCY SECTOR
Note bytheSecretariat
1. Attheinformal meeting heldon12July,theWorking Party onProfessional Services discussed
thequestion ofmutual recognition ofqualifications, inthelightoftheinformal papers dealing with
thisquestion which hadbeensubmitted byanumber ofdelegations. TheSecretariat thenundertook
toprepare asynthesis oftheviews expressed, whether onpaper orinthediscussion, taking account
ofthefactthatafurther written contribution would shortly besubmitted bytheEuropean Union.
2. Since thenacommunication from theEuropean Community anditsMember States hasbeen
received; itwascirculated on5August. Though thepaper setsoutthecurrent ideasoftheCommunity,
itcovers thegreat majority ofthepoints raised inpapers byother delegations andtakes account of
thediscussion of12July. Toalargeextent, therefore, itfulfils thepurpose ofasynthesis oftheviews
expressed sofarandithasthefurther advantage ofpresentation intheformofdraftguidelines. This
being so,itwould seemunhelpful andsuperfluous fortheSecretariat toputforward afurther synthesis;
theWPPS would probably progress more quickly onthebasisoftheexisting submissions. Thepresent
notetherefore, simply draws attention tothecontributions made sofarbydelegations andothers and
tothemain differences between them. Ingeneral, however, itcanbesaidthatthere isagood deal
ofcommon ground among thesubmissions, bothastocontent andthebasicapproach, andthissupports
thewidely heldviewthatthedevelopment ofguidelines formutual recognition agreements isanarea
where theWorking Party could make quick progress.
3. Thefollowing members havesubmitted informal papers dealing atleastinpart,withrecognition
ofqualifications: Australia (15March 1996), Canada (13March 1996), EU(17October 1995 and
5August 1996), NZ(10July1996) andUSA (15March 1996). Inaddition, theletter from the
Chairman, Mrs.Saurel, dated 6May1996, contained abriefanalysis ofsome ofthepoints addressed
inMembers 'submissions. Finally intheseminar organized on19October 1995onissues andmeasures
affectingaccountancyservices,IFACintroducedandsubmittedastatementonRecognitionofProfessional
Accountancy Qualifications.
4. Themost comprehensive submissions, interms ofthenumber ofelements oftheguidelines
which theydealwith, arethose oftheUSandtheEU.Thelogic oftheapproach taken inbothpapers
isverysimilar, andisbased ontwosteps: theconduct ofnegotiations andinternational obligations,
(dealing inparticular withnotification obligations) andtheformandcontent ofthemutual recognition
agreement. Bothpropose thattheguidelines should cover thefollowing points (notnecessarily using
thisterminology). Other submissions havedealtwithsome ofthese points, asindicated.
- Thenegotiating process andtheobligations resulting from theGATS
- Parties toMRA (IFAC)
- Purpose ofMRA (Australia, NewZealand, IFAC)
- Scope ofMRA (IFAC)
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- Assessment offoreign qualification (Australia, NewZealand, IFAC)
- Supplementary requirements (Australia, NewZealand, IFAC)
- Recognition process (Australia, NewZealand, IFAC)
- Implementation ofMRA (New Zealand)
Additional points notraised byothers, weretheexchange ofinformation (EUandNewZealand)
andbarriers unrelated toqualification (IFAC).
5. There areofcourse differences incontent andemphasis inthetreatment ofthese points. On
thepurpose ofMRAs, where theUSandEUdefinitions areverysimilar, theEUaddsareference
toreciprocity oftreatment. Australia alsorefers toenhancement oftheability ofprofessionals and
theprotection ofconsumers, andtoequity andtransparency indealing withapplications byforeign
professionals. NewZealand 'sapproach isbasically similar, andalsocontained areference forthe
needformaximum cost-effectiveness intheprocess.
6. Onthescope ofMRAs, theUSdealtwiththeidentification ofprofessional titles, activities
andlicensing bodies benefitting fromtheagreement, while theEUandIFAC focus more specifically
onaccountancy. TheEUalsoraises thequestion whether theMRA isbased onacasebycaseapproach
oronrecognition ofaforeign licence, andthusofallprofessionals holding it.
7. Theassessment offoreign qualifications isthecruxofeachpaper andtheareashowing most
divergence ofapproach. TheUSspecifies detailed conditions foreligibility forlicensing inthehost
country while Australia andNew Zealand proposes competency-based assessment oftheactual
competence ofapplicants topractice agiven activity. TheEUstresses theimportance ofminimal
threshold interms ofeducation andexperience, andAustralia interms oflevels ofcompetence. IFAC,
focusing onthespecificities ofaccountancy, would require anequivalence ofeducation, examinations
andexperience, withsome limited flexibility.
8. There isalsosome divergence onthematter ofsupplementary requirements. Alldelegations
seeaneedforthem, butthenature ofthesupplementary requirements theythink necessary varies
according totheirviews ontheclosely related matter oftheassessment offoreign qualifications. The
EUsubmission makes thepointthatanyadditional qualifications required should beessential forpractice
inthehostcountry, orjustified bythedifferences inthescope oflicensed practice.
9. Allsubmissionsaddressedtosomeextenttheprocessofrecognition,thoughtheircontentvaried.
TheUSandtheEUprovided themostdetailed indication ofpoints tobeaddressed inMRAs interms
ofprocedure, containing similar elements toIFAC 'ssection onthismatter. TheEU,likeNewZealand
andIFAC, provides foradialogue between theauthorities ofeachparty, while theUSenvisages the
possibility ofaccelerated procedures incertain cases. TheEUandNewZealand alsoenvisage ex-post
surveillance whereby practitioners registered inthejurisdiction ofoneMember would bedeemed to
becompetent topractice inanother unless itcould beshown tobeotherwise. NewZealand alsostresses
theneedformutual confidence inthedecision-making processes ofeachparty, andproposes the
establishment ofarebuttable presumption ofequivalence between foreign andlocalprofessionals.
10. Theimplementation ofMRAs isaddressed byNewZealand, theEUandtheUS,thetwolatter
providing alistofpossible commitments which would speed uptherecognition process andmake it
more user-friendly forapplicants.
11. Other points made byNewZealand, theEUandtheUSraises thepossibility ofappeal against
refusal ofalicence andtheharmonization ofstandards. Finally itshould berecalled thatinits
submissionof13March1996,CanadamadeavailabletheAgreementonmutualrecognitionofengineers
between Canada, Mexico andtheUS.