RESTRICTED
WORLD TRADE WT/ACC/SAU/29
24September 1997
ORGANIZATION(97-3966)
Working Party ontheAccession Original: English
oftheKingdom ofSaudi Arabia
ACCESSION OFTHE KINGDOM OFSAUDI ARABIA
Additional Questions andReplies
TheMinistry ofCommerce oftheKingdom ofSaudi Arabia hassubmitted additional replies
toquestions raised afterthethird meeting oftheWorking Party heldon29and30May1997 with
therequest thattheybecirculated tomembers oftheWorking Party. Thequestions andreplies are
reproduced hereunder. TheAnnexes listed areavailable intheSecretariat (Accessions Division,
Room 1126) forconsultation.
_______________
TABLE OFCONTENTS
Page Question
Import Licensing Procedures 2 1-58
Petroleum 15 59-66
Agriculture 16 67-113
Tariff 30 114-130
Customs Valuation 34 131-138
State-trading 40 139-147
SPS 42 148-206
Standards 60 207-216
Privatization 62 217-218
Anti-dumping 63 219-223
Services 65 224-232
Miscellaneous 67 233-240
Rules ofOrigin 70 241-243
TRIPS 71 244-253
TRIMS 76 254-258
Attachment 1:Quarterly Bulletin forAnimal andPoultry Quarantine
Diseases andtheCountries They Exist In78
Annex I:References Used forEvaluation ofShelf LifeofFood Products
Annex II:Examples ofEach Food Product Specifying theApproved Shelf Life, Required
Storage Conditions andReferences Used toAssess Shelf Life
Annex III:ListofSaudi Standards Adopted asGULF Standards (1997)
Annex IV:General Outline oftheMeasures forDrafting Saudi StandardsWT/ACC/SAU/29
Page2
IMPORT LICENSING PROCEDURES
Question 1
Wehave heard reports thatquantitative restrictions onusedautos maybeimplemented.
Could Saudi Arabia confirm whether ornotsuchmeasures areunder consideration, andifso,
bywhom?
Reply
Nosuchmeasures areunder consideration.
Question 2
Ifthese measures arebeing contemplated, could Saudi Arabia provide anoutline ofthesystem
being proposed foruseautos andhowsuchmeasures would fitwithWTO obligations?
Reply
Nosuchmeasures areunder consideration.
Question 3
Please provide thecriteria thatmust bemetineachMinistry andthedocumentation requirements
forobtaining licenses.
Reply
Theprocedures anddocumentation requirements ofeachMinistry aredescribed indetail in
theattached Paper onImport Licensing Procedures. (WT/ACC/SAU/30)
Question 4
Please provide details onavenues forappeals ofdecisions toreject licensing requests.
Reply
Thefirstlevel ofappeal against adecision toreject licensing requests istotheMinister of
theconcerned Ministry ortotheheadoftheAgency concerned. Appeal against thedecision ofthe
Minister/Agency Head liestotheBoard ofGrievances.
Question 5
Please provide clarifications andmore information concerning thepurpose ofthemeasures and
additional refinement oftheproduct coverage intheAppendix, i.e.,noteitems orcategories
excluded from thebroad tariff headings listed.WT/ACC/SAU/29
Page3
Reply
Appendix hasbeenrevised andsubmitted toWTO Secretariat.
Question 6
Pleaseindicatehowcustomsofficialsareinformedoftherequirementforadditionaldocumentation,
i.e.,thelicense. Isthere alistoftariff items provided, orjustbroad descriptions?
Reply
Aprecise listofitems onthebasisofHStariffheading isprovided totheCustoms Department.
Question 7
Please confirm thatthefollowing agencies haveresponsibility forlicense approval forcertain goods:
Ministry ofAgriculture, Ministry ofCommerce, Chivalry Club, Ministry ofHealth, Ministry
ofInformation, Ministry ofInterior, Ministry ofIndustry andElectricity, andMinistry of
Petroleum andNatural Resources.
Arethere anyadditional Ministries involved? Isanadditional license necessary from theMinistry
ofCommerce after theoriginal Ministerial permit issecured?
Reply
Inaddition totheMinistries listed inthequestion, otherMinistries aretheMinistry ofEducation
(DepartmentofMuseumsandArchaeology)forantiques,MinistryofPTT,andtheNationalCommission
forWild LifeConservation andDevelopment (NCWCD) forimport ofwildlife.
Noadditional license isnecessary from theMinistry ofCommerce.
Question 8
Thedocumentation (WT/ACC/SAU/4/Add. 1)states onlythattheapplicant must supply aletter
withpersonal data.
Itisunclear howthispersonal dataisusedtodetermine whether aproduct meets health, safety,
morality orsecurity requirements. Isanyfurther information required? Ifso,itshould be
included intheresponse toAnnex 3.
Reply
Theprocedures andrequirements foreachMinistry aredescribed indetail intheattached Paper
onImport Licensing Procedures. (WT/ACC/SAU/30)
Question 9
Howdothese agencies determine whether aproduct meets therequirements toreceive animport
license? Isitsolely onthebasis ofaletter from theimporter?WT/ACC/SAU/29
Page4
Reply
Please refertotheattached Paper onimport licensing. (WT/ACC/SAU/30)
Question 10
Ifso,howdoesthepersonal information from animporter relate toenforcement ofhealth, safety
andsecurity standards?
Reply
Please refertotheattached Paper onimport licensing. (WT/ACC/SAU/30)
Question 11
Ifnot,what other information isusedtoassess compliance withSaudi Arabia ’srequirements?
Reply
Please refertotheattached Paper onimport licensing. (WT/ACC/SAU/30)
Question 12
How canatrader findoutabout these requirements?
Reply
Theinformation canbeobtained fromtheconcerned department ordivision oftheMinistry orfrom
theInformation Center oftheMinistry. Theinformation canalsobeobtained from theChamber of
Commerce andIndustry.
Question 13
Elsewhere intheWTO documentation Saudi Arabia states thatlicenses canbedenied iftheproduct
doesnotsatisfy thestandards andrequirements. However, thesection ondocumentation only
saysthattheimporter must supply aletter withpersonal datasuch asname andregistration
number.
Itisdifficult tounderstand howthislimited documentation isusedtodetermine whether aproduct
meets health andsafety standards, i.e.,ifanapplicant doesnothave tosubmit anydocuments
todemonstrate compliance withSaudi Arabia ’stechnical requirements, thenhowiscompliance
determined?
Reply
Theprocedures anddocumentation requirements forissuance ofalicense aredescribed indetail
intheattached Paper onImport Licensing Procedures. (WT/ACC/SAU/30)
Question 14
Ifcompliance isdetermined inthebasis ofadditional documentation, thenitwould beuseful to
clarify what sortofdocumentation isrequired withtheimport license application.WT/ACC/SAU/29
Page5
Reply
Please refertotheattached Paper onimport licensing. (WT/ACC/SAU/30)
Question 15
Webelieve thatitwould helpWorking Party members better appreciate theprocess ifthese points
could beclarified, e.g.,ifSaudi Arabia could identify exactly what procedures anddocuments
areusedtodetermine compliance withstandards andrequirements andinclude thisinformation
intherevised Annex 3.
Reply
Please refertotheattached Paper. (WT/ACC/SAU/30) Revised Annex 3willbesubmitted
totheWTO Secretariat.
Question 16
Could Saudi Arabia provide details ontheavenues available forappeals?
Reply
Thefirstlevel ofappeal against adecision toreject licensing requests istotheMinister of
theconcerned Ministry ortotheheadoftheAgency concerned. Appeal against thedecision ofthe
Minister/Agency Head liestotheBoard ofGrievances.
Question 17
Please indicate what entities/persons areeligible toapply foranimport license. Istheright to
import limited, orisitguaranteed forallforeign andnational firms andindividuals?
Reply
Anyonehaving aCommercial Registration (i.e.registration todobusiness), whether an
individual oranentity, canapply forimport license.
Question 18
PleaseconfirmthattherearenosubstantiverequirementstoregisterwiththeMinistryofCommerce
inorder toimport.
Reply
No,there arenorequirements toregister forimports. However, there isarequirement to
getCommercial Registration fordoing anybusiness, whether manufacturing, retailing, trading,
professional etc.Onceanindividual oranentity hasaCommercial Registration, noseparate registration
orpermission isrequired forimports.WT/ACC/SAU/29
Page6
Question 19
Please elaborate onandgivedetails concerning thescope oftheright toimport offirms (a)overall;
(b)withregards totheir registered scope ofbusiness; and(c)withregards totheir ownership
status. Please indicate ineachcasehowthissituation compares withafirms rights concerning
purchases ofdomestic output.
Reply
Asexplained inReply 18above, allbusinesses havetoobtain Commercial Registration. The
Commercial Registration ofacompany specifies thetypeofbusiness thatitwillbeengaged in.Saudi
companies andforeign companies dulyestablished inSaudi Arabia areeligible togetCommercial
Registration. Companies, whether Saudi orforeign, canengage onlyinthose businesses covered in
theirCommercial Registration.
Acompany, Saudi orforeign, which hasacommercial registration forimport trade either in
general orforparticular products canimport goods from abroad without theneedtogetanyfurther
permission orauthorization, except foritems which require animport license.
Asforrights concerning domestic goods, companies canpurchase anddobusiness onlyfor
those goods which arewithin thescope oftheirRegistration.
Question 20
InAnnex 3Saudi Arabia indicates that"fake diamonds" arebanned "forsecurity reasons".
However, imitation diamonds ofmany materials areinlegitimate demand byconsumers and
retailers foruseincostume jewellery andinprecious metal jewellery. Inaddition, jewellers have
instruments which candetect fakediamonds aswellaslowquality diamonds.
Does Saudi Arabia allow theimport ofartificial diamonds forlegitimate commercial use?
Reply
There arenorestrictions ontheimportation ofartificial diamonds.
Question 21
Thelisting ofallproducts inchapter 29-29 isverybroad. Ifthescope ofthelicensing onlyincludes
specific chemicals which poseathreat tohealth andsafety (such asradioactive chemicals or
chemicals fornarcotics), could Saudi Arabia please revise theAppendix inWT/ACC/SAU/4/Add.1,
Annex 3toreflect thespecific lineitems subject tolicensing.
Reply
Please refertotheattached Paper onImport Licensing Procedures which provides adetailed
explanation (WT/ACC/SAU/30).
Question 22
Could Saudi Arabia confirm whether petroleum andnatural asphalt arestillsubject toimport
licensing?WT/ACC/SAU/29
Page7
Reply
Thereference topetroleum andasphalt inearlier documentation reflect alongstanding
arrangement. Theneedforthecontrols isunder review. Saudi Arabia willensure inregard tothis
issue that,bythetimeofaccession, itwillbeinconformity withWTO obligations.
Question 23
Ifanimport license isstillrequired forthese products, could Saudi Arabia please givetheWTO
justification forthisprovision?
Reply
Please refertoReply tothepreceding question.
Question 24
Dospecific criteria orrequirements existinaform thattraders canaccess stating theconditions
under which imports ofchemicals mayoccur? Ifso,please provide them totheWorking Party.
Reply
Please refertotheattached Paper onImport Licensing Procedures, inparticular thesections
forMinistries ofCommerce, Industry andInterior. (WT/ACC/SAU/30)
Question 25
Arethere anynorms other thanthediscretion oftheresponsible authorities forgranting import
licenses forchemicals?
Reply
These areexplained indetail intheattached Paper onimport licensing. (WT/ACC/SAU/30)
Question 26
Could Saudi Arabia confirm thatpetrochemicals arenotsubject tolicensing?
Reply
No,petrochemicals arealsosubject tolicensing.
Question 27
DoMODA, MOI, Frontier Guards, andMOI, Telecom Dept. approve imports ofthese goods
forcommercial purposes? How cananimporter findoutabout therequirements toobtain an
import license forcommercial useofthese items?
Reply
Yes.AnimportercangettheinformationfromtheInformationCentreoftheMinistryconcerned
orfrom theChamber ofCommerce.WT/ACC/SAU/29
Page8
Question 28
Inreference toquestion 11inWT/ACC/SAU/13/Add.1, itwasasked attheWorking Party meeting
what industries might beentitled toincreased tariff protection. Although Saudi Arabia stated
thatitisnotconsidering anyindustries nowforprotection, weareinterested inlearning what
sectors might befuture candidates.
Could Saudi Arabia provide alistofsectors itmayfindtheneedtoprotect andunder what specific
conditions? What kinds andlevels ofprotection arebeing contemplated?
Reply
Thisisthesubject ofmarket access negotiations. Anindication ofourapproach maybeobtained
from theinitial offer ofSaudi Arabia. (WT/ACC/SPEC/SAU/2)
Question 29
Inregard toQuestion 31inWT/ACC/SAU/13/Add.1, Saudi Arabia discussed restrictions onseed
imports. Phasing outinput subsidies forseeds would reduce theneed torestrict imports.
Arethere anyfurther restrictions beyond inspecting imported seeds fordisease?
How aretheseeds inspected andatwhat cost?
How willthe“protection ”policy beapplied toimported products to“safeguard thenational
agricultural sector? ”
Reply
Please refertotheattached paper onimport licensing. (WT/ACC/SAU/30)
Question 30
Could Saudi Arabia please clarify therequirements forimport ofagricultural items?
Reply
Please refertotheattached Paper onImport Licensing. (WT/ACC/SAU/30)
Question 31
Under what conditions could arequest bedenied toimport anyoftheagricultural products?
Reply
Please refertotheattached Paper onimport licensing. (WT/ACC/SAU/30)
Question 32
Could Saudi Arabia outline itscriteria fordetermining seedquality anddiscuss howitdetermines
andenforces seeduseforplanting orfood?WT/ACC/SAU/29
Page9
Reply
Please refertotheattached Paper onImport Licensing. (WT/ACC/SAU/30)
Question 33
Could Saudi Arabia explain howthecurrent system forlicensing ofagricultural equipment works?
Reply
Please refertotheattached Paper onImport Licensing ofAgriculture. (WT/ACC/SAU/30)
Question 34
Iflicensing isusedtoprevent re-export ofsubsidized machinery, whycan’tother measures meet
thesame objective?
Reply
There areotherconsiderations alsowhich areexplained indetail intheattached Paper onImport
Licensing. (WT/ACC/SAU/30)
Question 35
Ifaperson orentity wants toimport agricultural equipment without receiving thestatesubsidy,
dotheystillhave toapply foranimport license?
Reply
Yes,Ifaperson orentity wants toimport agricultural equipment without receiving thestate
subsidy, itstillhastoapply foranimport license.
Question 36
Dothe"Requirements forImport andMarketing ofAgricultural Equipment being imported for
thefirsttimeintotheKingdom" (WT/ACC/SAU/14/Add.1) apply onlytoimports seeking the
state subsidy ortoallimports ofagricultural equipment?
Reply
RequirementsforimportandmarketingofAgricultural.equipmentsarethesameforallimported
items.
Question 37
DoesSaudi Arabia intend toremove existing bansontheexports ofdateseedlings, breeding horses,
wheat andwheat flour upon acceding totheWTO? Ifitdoesnotintend toremove these bans,
howcanthisbereconciled withWTO principles?WT/ACC/SAU/29
Page10
Reply
There arenoexisting bansontheexport ofwheat andwheat flour, except forsubsidized wheat
andwheat flour.
Saudi Arabia banstheexport ofdateseedlings andbreeding horses because thelocalbreeds
andvarieties ofthese twoitems arepureandrare. Upon accession totheWTO, Saudi Arabia will
dowhatever isrequired under theWTO rules.
Question 38
Does Saudi Arabia intend toliberalize itsexports ofproducts (date seedlings, breeding horses)
under export banupon acceding totheWTO, given thatexport bansthatcannot bejustified under
WTO provisions areprohibited?
Reply
Please refertoreply 37above.
Question 39
7102Fake diamonds. Weseekanexplanation ofwhytheprevention ofdeceptive practices cannot
beachieved byalesstrade restrictive means thanabanonimports ofdiamonds.
Reply
There isnorestriction. Import ofartificial diamonds ispermissible.
Question 40
8313 Preparations andcharges forfireextinguishers. What arethesecurity reasons forthe
measures?
Reply
Theimportoffireextinguishersisnotbanned.ItrequiresalicensefromtheMinistryofInterior.
Position isexplained intheattached Paper onImport Licensing Procedure (re.Section onMinistry
ofInterior).
Question 41
8472.10.00 High quality photocopiers. Weseekanexplanation ofwhytheprevention ofdeceptive
practices cannot beachieved byalesstrade restrictive means thanabanonimports.
Reply
High quality photocopiers concern thepublic Security Department ofForgery. They have
anextreme ability onphotocopying documents, itreaches alevelof99percentoftheoriginal copy
which make ithardtodifferentiate between theoriginal andthephotocopy. Alsoithastheability
todistinguish colours. Thedanger liesinusing hightechnology tofalsify paper currency andofficial
documents, certificates, passports, maps andstamps.WT/ACC/SAU/29
Page11
Question 42
8531.10.00 Burglar orfirealarms. What arethesecurity reasons forthemeasure?
Reply
Asforburglar orfirealarms, theyarenotprohibited toentertheKingdom buttherearesome
security measures beentaken based onthepossibility ofmisusing thembycriminals orterrorists. For
thisreason import license isgiven togovernment enterprises, public enterprises andfirms orindividuals
whohasacontract withthegovernment tosupply suchsecurity devices from inside theKingdom or
abroad. Infact,there aremany reasons forthese measures andtheyareasfollows:
Anexpert oranyonewithlittleknowledge onexplosives canmake anexplosive material out
ofthese alarm devices, byadding awire, atimeindicator orafuse.
Using aremote control, onecanclose adoororawindow ofahouse oracarafterinserting
some connecting wires andexplode them.
Using aremote control, onecanstartacar,ahorn, oranalarm devices orputonthelight
andaftersome simple wiring ,acarcanbeexploded byparking itonanyplace.
Question 43
8901-8907 Ships, boats, etc.What arethesecurity reasons forthemeasure?
Reply
There isnorestriction ontheimportation ofShips andboats.
Question 44
9005.10.10 Binoculars. What arethesecurity reasons forthemeasure?
Reply
Notallbinoculars areprohibited. Import ofonlythose binoculars isprohibited which can
beusedfornight vision. Thisisforsecurity reasons.
Question 45
9006.40.00-9006.59.00 Cameras. What arethesecurity reasons forthemeasure?
Reply
Import ofallcameras isnotrestricted. Only import ofTVmonitoring cameras isrestricted:
itrequires alicense from theMinistry ofInterior.
Question 46
9004.90.90 Spectacles, goggles andthelike. What arethesecurity reasons forthemeasure?WT/ACC/SAU/29
Page12
Reply
Import ofnight-vision spectacles isprohibited forsecurity reasons. Import ofallother goggles
andspectacles isunrestricted.
Question 47
Wewould appreciate further details relating tothebansoncontrols ofsome products onthelist
ofrestricted items attheappendix totheaddendum updating Saudi Arabia ’smemorandum
(pages 6-14ofWT/ACC/SAU/4/Add.1). Some ofthese restrictions areforclearly understandable
reasons. However, inanumber ofcases wewould likeafurther explanation tosupport theclaim
forWTO justification (anoutline ofthecircumstances inwhich entry oftheproduct intoSaudi
Arabia would berefused, anexplanation ofhowtherestriction would serve itsdesignated purpose
andwhytheaimcannot beachieved byalesstrade restrictive means). Forexample:
0401.00.00 Long lifepasteurized milkinpacking exceeding 1litre,Weseekanexplanation
ofwhytheprevention ofdeceptive practices cannot beachieved byalesstrade restrictive
means thantheimposition ofanimport ban.
Reply
TheKingdom ofSaudi Arabia willconsider toremove thebanonlongpasteurized milkupon
itsaccession totheWTO. Thebanmaybereplaced bytariffs.
Question 48
0801.00.00 Dates. Theimport banondates hasnoWTO justification. Arethere plans toremove
thisrestriction?
Reply
Thebanondates willberemoved, andconverted totariffs.
Question 49
Saudi Arabia wasasked toprovide thespecific GATT/WTO justification forprohibiting, or
otherwise restricting, theexportation ofcertain agricultural products (including livestock, horses,
baby milk, datepalm saplings, barley, corn, maize, soyabeans). Intheevent thatcertification
wasrequired forexport, Saudi wasasked toindicate thecriteria thatareapplied when certificates
aregranted, andhowthe"licensing" system wasoperated inatransparent andnon-discriminatory
fashion. Saudi Arabia didnotanswer thequestion butrather indicated thatrestrictions are
maintained toensure thatexports repay anysubsidies before exporting, andthattherestrictions
appear toconform totheprovisions ofArticle XX(d) oftheGATT. Could Saudi provide the
specific GATT/WTO justifications forprohibiting orotherwise restricting theexportation ofeach
iteminReply 61ofWTO/ACC/SAU/6? What arethecriteria forawarding certificates ifthey
arerequired? How isthelicensing system transparent andnon-discriminatory? How andwhy
doesSaudi believe thattherestrictions conform toArticle XX(d) oftheGATT? Doesthelicensing
system apply tobothprivate traders andtogovernmental agencies which export?WT/ACC/SAU/29
Page13
Reply
Exportation isneither prohibited norrestricted. However, exportation ofsuchsubsidized items
isconditional ontherepay ofsubsidies intended forsupport ofdomestic production. Thelicensing
system istransparent andnon-discriminatory since itisavailable forevery exporter.
Question 50
Please provide details oftheproportion ofSaudi imports subject tolicensing.
Reply
Nostatistics arecollected andmaintained onthisbasis.
Question 51
Saudi Arabia ’sanswer toQuestion 26(a) ofWT/ACC/SAU/13/Add.1 states that"Import licensing
isnotemployed tolimit quantities ofimports". However, itispossible thatimport licensing
requirements dohaveanimport limiting effect, evenifthatisnottheirintention. Doanyproducts
fitthiscategory?
Reply
No.
Question 52
Initsresponse toQuestion 28ofWT/ACC/SAU/13/Add.1, itisexplained thattheChivalry Club
isnotagovernment entity. Itseems, however, tobetheonlyentity thatregulates theimportation
ofbreeding horses, thereby exercising governmental power. Could Saudi Arabia explain inmore
details howtheregulations work? Isimportation ofhorses, other thantheArabian horse strain,
permitted? Ifso,please
Reply
TheChivalry Club isagovernment body responsible forregulating theKingdom ’sbreeding
andracing programs, controlling imports toensure itsobjectives particularly inmaintaining apure
Arabstrain. Importation ofother thanArabian horse strain ispermitted, providing alicense isobtained
from theChivalry Club accompanied onarrival withahealth certificate andacertificate oforigin.
Question 53
Inthereply toQuestion 29ofWT/ACC/SAU/13/Add.1, Saudi Arabia states that"prohibited"
items maybeimported for"legitimate use". Please specify what constitutes legitimate use,and
whether suchimports constitute state trading.
Reply
Usedbygovernmentalagencies,fortheirownuseandnotforcommercialsale,willbeconsidered
aslegitimate use. Thiswould notconstitute statetrading.WT/ACC/SAU/29
Page14
Question 54
Please provide more information ontheuseofagencies forimport licensing.
Reply
Please refertotheattached Paper onImport Licensing Procedures which gives thenecessary
information. (WT/ACC/SAU/30)
Question 55
Weunderstand from thereply toQuestion 43ofWT/ACC/SAU/13 thatprivate traders arenow
allowed toexport wheat which hasnotbeen subsidized. Can Saudi Arabia confirm our
understanding thatprivate traders canalsoimport wheat freely, aslongasthewheat iscoloured
toavoid abuse ofguaranteed producer prices? Ifthewheat isimported byprivate traders, we
understand thattheycansellitontheSaudi market under normal market forces, incompetition
withtheartificial lowprice setbytheGSFMO. Isthisunderstanding correct?
Reply
Yes, private traders canimport wheat solongasitiscoloured. There isnorestriction on
theirselling itontheSaudi market under normal market conditions
Question 56
Inreply toQuestion 31ofWT/ACC/SAU/13/Add.1, itissaidthat"licenses areissued forseed
thatmeets quality requirements". Could Saudi Arabia specify what quality requirements are
needed?
Reply
Please refertotheattached Paper onimport licensing. (WT/ACC/SAU/30)
Question 57
Question 37,WT/ACC/SAU/13/Add.1. Areanyagricultural machines prohibited from import?
Ifso,please givedetails.
Reply
Agricultural machinery isnotprohibited provided itmeets Saudi standards. Only animport
license isrequired from theMinistry ofAgriculture.
Question 58
Inresponse toquestion 121(WT/ACC/SAU/13/Add.1) Saudi Arabia noted thatnowheat exports
have been made byGSFMO inrecent years.
Have private traders made anyexports, andifso,didtheyreceive subsidies from theSaudi Arabian
Agricultural Bank oranygovernment institutions?WT/ACC/SAU/29
Page15
Reply
Yes,private traders canexport wheat without receiving subsidies from anysource. In1995,
adecree prohibited GSFMO from exporting wheat. Noexports were made byprivate traders.
PETROLEUM
Question 59
Would Saudi Arabia please confirm thattheexport price ofpropane, butane andnatural gasoline
from Saudi Arabia issetconsistent withinternational gasindustry practice, i.e.,onanf.o.b.
(Saudi Arabian plant orport) basis?
Reply
Theexport prices ofNGL's,Propane, Butane andNatural Gasoline from Saudi Arabia are
setonf.o.b. theSaudi portofRasTanura inaccordance withinternational industry practice.
Question 60
Isthe30percentdiscount applied totheprice ofdomestic feedstocks inagiven quarter applied
totheminimum export price reported inthatquarter, tothelastquarter, tothelasttwoquarters,
tothelastthree quarters, tothelastyear, toprojected orcontracted prices forfuture quarters,
ortosome other price?
Reply
The30percentdiscount inaquarter isapplied totheminimum export price reported inthat
quarter.
Question 61
How doesSaudi Arabia verify andconfirm thattheminimum export price isabona-fide arm’s
length price?
Reply
The30percentNGL'sprice discount wasnegotiated between theprovider ofNGLs, 'Saudi
Aramco, andthepotential locallifters represented bytheMinistry ofIndustry. Since Saudi Aramco
isStateowned, aCouncil ofMinister resolution wasneeded toimplement thearm’slength agreement.
Question 62
Would theSaudi Arabian Government please confirm thatlong-term contract salesdonotaccount
foranyexports from Saudi Arabia ofpropane, butane ornatural gasoline? Would theSaudi
Arabian Government please confirm thatspotsalesdonotaccount foranydomestic Saudi Arabian
sales ofpropane, butane, ornatural gasoline?
Reply
Saudi Arabia confirms thatlong-term contract salesdonotaccount foranyexports ofSaudi
Arabia ’sNGLs andspotsalesdonotaccount foranydomestic salesofNGLs inSaudi Arabia.WT/ACC/SAU/29
Page16
Question 63
InWT/ACC/SAU/3 (inthestatement byDeputy Prime Minister ofPetroleum andMineral
Resources regarding feedstock pricing), theSaudi Government states thatallenterprises (whether
wholly Saudi owned, partly Saudi owned orwholly foreign owned) are"...entitled totheprices
andsupplies ofthose rawmaterials upon availability." Inthetimes ofshortages, howissupply
allocated among buyers?
Reply
Intimeofshortages, andaccording tothepractice oftheindustry, theallocation ofsupply
would beaccording tocommitments made. Since domestic supply commitments areoflongtermnature,
theywould havepriority intheallocation mechanism.
Question 64
CantheSaudi Arabian Government confirm thattheprice ofmethane andethane remains at
US$0.50 perMBTU? Ifnot,please indicate thecurrent price?
Reply
Thereply willfollow later.
Question 65
Dothelicensing requirements onlyapply tochemicals eligible fortariff exemptions?
Reply
No,therequirements apply toallchemicals.
Question 66
DoesSaudi Arabia consider thistariff exemption aninput subsidy which should benotified under
theAgreement onSubsidies andCountervailing Measures?
Reply
Please refertoreply 59inWT/ACC/SAU/8.
AGRICULTURE
Question 67
Could Saudi Arabia provide detailed information ontheroleoftheSaudi Agricultural Bank,
inparticular intheareaofitsmandate withregard toproviding agricultural loans andsubsidies?WT/ACC/SAU/29
Page17
Reply
TheSaudi Arabian Agricultural Bank wasfounded bytheRoyal Decree No.58issued on
3/12/1382 Hasagovernment financial institution specialized infunding thevarious fields ofagricultural
activities inalltheregions ofthekingdom inorder toassist inthedevelopment ofagriculture, and
improve agricultural productivity through thedeployment ofstateoftheartscientific andtechnical
methods.
Thebankcommenced itsactivities in1384Hbyproviding loans. Thebankgrants loans through
13branches, with57offices through outthekingdom inorder tofacilitate provision ofservices to
farmers intheirregions. Thebankgrants farmers, agricultural projects, fishermen, beekeepers and
farmcooperatives twotypes ofagricultural loans freeofinterest :
Short termagricultural loans withmaturity ofoneyeararebeing granted forseasonal crop
farming andmarketing andtherefore include costs ofseasonal production suchasseeds, fertilizers
ploughing andcultivation.
Mid-term loans ofuptotenyears maturity tofundfixed costs suchasbuildings andother
installations aswellasfarmequipments suchasengines, irrigation pumps andagricultural machineries,
inaddition tothefunding tospecialized agricultural projects.
Thefollowing tableshows thetotalnumber ofloans andtheirvalues granted bythebankduring
theperiod 1992-1995
Year Short term loans Medium term Total loans
No amount
(thousand SRls)No amount
(thousand SRls)No amount
(thousand SRls)
1992 213 2168 4161 772982 4374 775150
1993 158 1589 4271 928972 4429 930561
1994 145 758 3677 669798 3822 670556
1995 71 575 2571 412014 2642 412589
Source: Saudi Arabian Agricultural Bank, Thirty Second Annual Report 1415/1416 H,1995
US$1 =SRls 3.75
TheBank wastasked since thefiscal year1393/1394 Hwiththeresponsibility todisburse a
package ofagricultural subsidies incurred bythegovernment towards reduction ofagricultural
expenditures inorder toincrease theaverage return onagricultural production.
These subsidies include: engines, irrigation pumps, agricultural machinery, poultry equipments,
dairy production equipment, inaddition topayment oftransport costs ofhighbreed cows imported
tothekingdom from thecountries oforigin.
Thefollowing tableshows intototheagricultural subsidies disbursed through thebankduring
theperiod 1992-1995 :WT/ACC/SAU/29
Page18
Year Total subsidies
(Thousand SRls)
1992 677902
1993 248624
1994 355434
1995 ----
Source: Saudi Arabian Agricultural Bank, Thirty second Annual Report, 1415-1416 H,1995
US$1 =SRls 3.75
Question 68
Wewould alsoappreciate detailed information onthetypes, terms ofloans andtype of
subsidies provided.
Reply
Please refertoreply 67above.
Question 69
Regarding agricultural support, hasthenewproject encouraging farmers touserenewable water,
byproviding itbelow cost, andthepolicy ofproviding agricultural equipment (likepumps) at
below market prices beenincluded intheAMS calculation? Ifthere isasubsidy, what isitsvalue?
Reply
There isnosubsidy forirrigation water. Thesubsidies forirrigation engines andpumps are
50percentofthepricefixed bytheMinistry ofAgriculture andWater. Theamount ofthesesubsidies
areincluded intheAMS calculations among theitems ofagricultural subsidies (supporting table DS:9,
WT/ACC/SPEC/SAU/1/Rev.1).Itisnotattainabletosingleoutpump’ssubsidiesfromothercomponents
ofagricultural subsidies.
Question 70
How willSaudi Arabia reconcile itsincentives fordiversifying agricultural production withthe
optimal useofresources andcomparative advantage? Because suchproduction should notrequire
incentives inmostcases, what isthevalue ofthese incentives andwilltheybegreen boxsupports?
Reply
SaudiArabiawillreconcileitsincentivesfordiversifyingagriculturalproductionwiththeoptimal
useofresources andcomparative advantage through thefollowing programs:
Land willbedistributed inareas where large quantities ofrenewable water resources are
available.
Investment willbeencouraged inlarge agricultural projects thatdepend onrenewable water
resources, using modern irrigation systems thatconsume lowquantities ofwater.
Increase domestic production ofvegetables andfruits ingreen- houses andexpanding fishing
industry using advanced technology.WT/ACC/SAU/29
Page19
Gradualreductionofwheatproduction,frommorethan4milliontonsbefore1994,to2.8million
tonsin1994, 2million tonsin1995 and1.3million tonsin1996.
Reducing theproduction ofbarley from 2million tonsin1994, 1995 toonemillion tonsin
1996.
Thesame program ofthepresent subsidies willbecontinued during theSixth Planperiod in
agriculture sector topromote orencourage implementation oftheprevious programs.
These incentives (orsubsidies) areincluded intheAMS calculations, except theitems related
togreen box supports (please refer totable DS:1 inthenew WT/ACC/4 tables,
WT/ACC/SPEC/SAU/1/Rev.1).
Question 71
How aretheopportunity costs foragricultural loans calculated? What isthe"average interest
rate" proxy usedinlieuoftheSaudi Agricultural Bank’sinterest charges onloans?
Reply
Theopportunity costs foragricultural loans areequal totheaverage ratesofmedium term
commercial loans during theperiod 1993-1995 because theSaudi Agricultural bankdoesnotcharge
anyinterest onitsloans (zero interest rate,tableDS:9:A, WT/ACC/SPEC/SAU/1/Rev.1).
Question 72
Incalculating thetotal value forbadagricultural debts, what istherationale forusing "due
balances carried forward forseveral financial years divided byten". Ifthemaximum term of
aloanistenyears, howcanthisbetheaverage term ofallmedium term loans (unless allsuch
loans arefortenyears). How many years are"several"?
Reply
TheAgriculturalBankprovidesmedium-termloansforten-yearperiods.Iftheborrowerdefaults
onpayments foranygiven year, theunpaid amount willbedivided bytheremaining period ofthe
contract. If,however, theborrower defaults onthewhole amount, theloanwillbedivided byten.
Question 73
Inresponse tothequestion onpoultry feedbased oninformation provided insupporting table
DS:7 (WT/ACC/SPEC/SAU/1/Corr.1), Saudi Arabia stated thatallcorn andsoya bean cake
currently subsidized isimported. Wewould appreciate aclarification ofthisstatement.
Specifically, what isthenature ofthesubsidy andwhat aretheeligibility requirements toreceive
thissubsidy?
Reply
Thesubsidy forpoultry feedduring theperiod 1993-1995 isafixed amount ofUS$53.33
(SRls 200)pertonpaidoncornandsoyabeancakeusedbypoultry producers. Themain source for
these twoitems isimports because there isnolocalproduction .WT/ACC/SAU/29
Page20
Question 74
Indetermining eligible production foruseintheAMS calculation, Saudi Arabia excludes a
5percentZakat and5percentimpurities from totalproduction. What istherationale forthis
method (e.g.Why isthevalue ofataxexcluded andwhyarethe5percentfigures used)? Why
wasa5percentZakat usedasopposed tothenormal applicable rateof2.5percent. Also, does
theGSFMO purchase allwheat produced domestically witha5percentdiscount forpotentially
unusable wheat (i.e., theassumed 5percentimpurities)?
Reply
5percentimpurities from totalproduction represents ageneral average forthese impurities
based onsamples analysis drawn randomly from thewheat andbarley received byGSFMO.
Theratioof5percentZakat isdetermined according toIslamic rules. TheZakat iscomputed
afterexcluding the5percentimpurities.
Question 75
Inthedocument (section II)providing responses toquestions previously posed, itisnotclear how
Saudi Arabia calculated theprice gapforbarley thatarepurchased byGSFMO andresold to
livestock producers. Could Saudi Arabia explain whyitused afixed external reference price
asopposed totheprice theGSFMO paidbarley producers?
Reply
Thetotalamount ofsubsidy pertonondomestic barley isthedifference between theguaranteed
producer priceandthepricepaidbythedomestic livestock producers. However, inallocating thetotal
subsidy between grain andlivestock producers itwould seemlogical toattribute tolivestock producers
onlythatamount between theexternal reference price andtheuserprice charged byGSFMO andthe
amount above theexternal reference pricebeing asubsidy tothedomestic barley growers .Forlivestock
producers thesubsidy isthesame ifeither domestic orimported barley isinvolved.
Forexample tableDS:5 computes thesubsidy which received bybarley producers asfollows:
(A-B)xC sothat
A=applied administered price which equals theprice paidbyGSFMO tofarmers.
B=world price C.I.F Jeddah.
C=Eligible production which equals tototalproduction -5percentimpurities -5percentZakat
Butthesubsidy paidtolivestock producers orinput subsidy (table DS:7) wascomputed for
bothdomestic andimported barley using thefollowing basic:
External reference price (=world price C.I.F Jeddah) -Applied administered price (equals
theprice paidbylivestock producers) x[ThesumofEligible production andimports].
Question 76
Insupporting table DS:9, Saudi Arabia includes product-specific import subsidies suchasimport
subsidies forlivestock, andforpalm treeandpotato seed. Why arethese product-specific import
subsidies included inthetable reflecting non-specific AMS.WT/ACC/SAU/29
Page21
Reply
Agricultural subsidies which areincluded intableDS:9 areoffered toallagricultural projects.
Question 77
Inresponse tothequestion requesting explanation ofthepolicy onbaddebts foragricultural loans
(b-2),SaudiArabianotedthattheloanrepresentsduebalancescarriedforwardforseveralfinancial
years divided byten. Could Saudi explain itsmethodology behind thisapproach andprovide
detailed information onthenature oftheloanandtowhom itwasdue? Wewould alsoappreciate
information regarding whether theloanrepresents revenue forgone.
Reply
TheAgriculturalBankprovidesmedium-termloansforten-yearperiods.Iftheborrowerdefaults
onpayments foranygiven year, theunpaid amount willbedivided bytheremaining period ofthe
contract. If,however, theborrower defaults onthewhole amount, theloanwillbedivided byten.
Question 78
Wewould appreciate anyadditional information regarding theopportunity costs foragricultural
loans. Specifically, what interest rateorrates areusedtodetermine thecostofcapital? Isit
based oncommercial lending rates?
Reply
Theopportunity costs foragricultural loans arebased oncommercial lending ratesbecause
theSaudi Agricultural bankdoesnotcharge interest onloans orzerointerest rate,tableDS:9.
Question 79
Insupporting table DS:1, under General Services, itisreported thatsupport isprovided forFish
Resources Research centres. Since fishandfishproducts arenotincluded intheproduct coverage
oftheAgreement onAgriculture, webelieve thatthesupport provided forfishresearch activities
should notbeincluded inthetable.
Reply
Thishasbeentaken careofinthenewWT/ACC/4 tables. (WT/ACC/SPEC/SAU/1/Rev.1)
Question 80
Could Saudi Arabia describe thenature andscope oftheprograms provided forpestanddisease
control (supporting table DS:1). Specifically, what programs areprovided, whoqualifies to
participate, andwhat aretheeligibility requirements?
Reply
Theprograms arelisted inthenewWT/ACC/4 tables. (WT/ACC/SPEC/SAU/1/Rev.1) All
farmers quality toparticipate intheprograms. There arenoeligibility requirements.WT/ACC/SAU/29
Page22
Question 81
With respect tosupport fortraining activities (supporting table DS:1), could Saudi Arabia provide
more detailed information onthenature andactivities oftheSaudi-American andSaudi-Chinese
cooperation, aswellastheFAO agreement training center.
Reply
These arebilateral technical cooperation programs covering training andtechnical assistance
toagricultural sector inSaudi Arabia, including plantandanimal protection, water resources, research
andextension.
Question 82
Could Saudi Arabia explain whyitsAMS calculations areinUSdollars rather thaninnational
currency?
Reply
AMS calculations areinUSdollars togivefullunderstanding byallmembers. Theexchange
rateusedisUS$1 =SRls3.75, which hasremained atthislevelsince 1986.
Question 83
Table 1:Total Aggregate Measurement ofSupport
Itisnotclear from table 1whether dairy isincluded inSaudi Arabia ’sAMS calculations. It
maybethecasethatSaudi Arabia provided support tothedairy sector previously (reflected in
theearlier table ofsupport inthe1986-88 period). Or,itmayindicate thatsupport fordairy
isdeminimis, inwhich casewewould expect Saudi Arabia toinclude thetypeandlevelofsupport
withazerofigure inthetotalAMS column (column 4).
Reply
There isnosupport fordairy. Itwasaninadvertent error intheearlier tables 1986-88.
Question 84
WenotethatSaudi Arabia hasremoved "feed (com andsoyabeans)" and"other products" from
itsAMS table. Com andsoya beans arenowreflected as"input subsidies" forpoultry in
Supporting Table DS:7.
Reply
Thisisonlyastatement.WT/ACC/SAU/29
Page23
Question 85
Supporting Table DS:4
Saudi Arabia needs topresent thecalculation ofthetotalAMS sothatitshows the(average) totals
incolumn 2foreach product andnon-product-specific support. Column 4should alsoreflect
theaverage ofthethree yearperiod.
Reply
Please refertorevised WT/ACC/4 tables. (WT/ACC/SPEC/SAU/1/Rev.1)
Question 86
Interms ofestablishing deminimis levels, Saudi Arabia appears tohave incorporated its
product-specific support withitsnon-product specific support. Saudi Arabia should calculate
itsproduct-specific support inrelation tothetotal value ofproduction ofthatbasic product,
whereas non-product specific isinrelation tothevalue ofthetotalagricultural production.
Reply
Please refertorevised WT/ACC/4 tables. (WT/ACC/SPEC/SAU/1/Rev.1)
Question 87
Supporting Table DS:7
Weseekclarification ofthedifference between thebarley input subsidies andthepoultry (com/soya
bean) input subsidies (theformer appears incolumn 4,andthelatter incolumn 5).
Reply
Please refertorevised WT/ACC/4 tables. (WT/ACC/SPEC/SAU/1/Rev.1)
Question 89
Saudi Arabia hasnotprovide thecalculation details forthepoultry input subsides (paragraph
13ofAnnex 3oftheAgriculture Agreement outlines therequirements inthisregard).
Reply
Please refertorevised WT/ACC/4 tables. (WT/ACC/SPEC/SAU/1/Rev.1)
Question 90
Supporting Table DS:9
Wewillrequire further information onthenature ofthesubsidy paidforagricultural equipment.
Reply
Please refertorevised WT/ACC/4 tables. (WT/ACC/SPEC/SAU/1/Rev.1)WT/ACC/SAU/29
Page24
Question 91
Saudi Arabia hasmoved theinvestment subsidies from Supporting Table DS:2 (Special and
DifferentialTreatment-DevelopmentProgrammes)toSupportingTableDS:9(Non-Product-Specific
Aggregate Measurements ofSupport). Weareinterested inthenature anddetails ofthissupport.
Reply
Please refertothenewWT/ACC/4 tables. (WT/ACC/SPEC/SAU/1/Rev.1)
Question 92
Wenotethatthe"baddebts foragricultural loans" isanaverage forthepasttenyears. Wewould
suggest thatSaudi Arabia indicate levels fortheyears 1992-94 andprovide further clarification
ontheoperation andnature ofthissupport.
Reply
Please refertorevised WT/ACC/4 tables. (WT/ACC/SPEC/SAU/1/Rev.1)
Question 93
Wearepleased thatSaudi Arabia hasindicated thatitdoesnotmaintain export subsidies asdefined
inArticle 9.1oftheAgriculture Agreement. Saudi Arabia willneed toprovide astatement in
itsagriculture tables thatitwillbinditsexport subsidy commitments atzero.
Reply
Please refertonewWT/ACC/4 tables. (WT/ACC/SPEC/SAU/1/Rev.1)
Question 94
Table 1:Total Aggregate Measurement ofSupport
Wearepleased toseethatSaudi Arabia provided aspace fordairy AMS. However, thespace
fordairy AMS isblank. Could Saudi Arabia confirm thatthere isindeed nosupport fordairy?
Reply
Itisconfirmed thatthere isnospecific support fordairy.
Question 95
Supporting Table DS:1 (i.e., "green" programs)
Thispresentation compresses allgeneral services intoonelineitem. Inorder toallow assessment
oftheextent towhich these programs are"green" according tothecriteria inAnnex 2ofthe
Agreement onAgriculture andtofacilitate thefuture monitoring, theWorking Party would need
forSaudi Arabia tolistwhat theprograms are,andtheamounts ofexpenditure given toeach
using theseparate categories ofAnnex 2,paragraph 2(a)to(g).WT/ACC/SAU/29
Page25
Reply
Please refertorevised WT/ACC/4 tables. (WT/ACC/SPEC/SAU/1/Rev.1)
Question 96
Annex 2,paragraph 3oftheAgreement onAgriculture allows public stockholding forfoodsecurity
purposes tobeexcluded from reduction commitments. Could Saudi Arabia provide theprices
ofstock heldofbarley and/or wheat andsome information onhowtheproducts inquestion are
bought andsold?
Reply
Onlywheat isstocked forfoodsecurity purposes. Itispurchased atadministered prices, which
arethemarket prices inSaudi Arabia.
Wheat isbought from farmers whovoluntarily sellit,andissoldintheform ofwheat flour
tointerested buyers atmarket prices inSaudi Arabia.
Question 97
Supporting Table DS:5 (i.e., market price support)
Wetakenotethatthefigures provided onwheat andbarley, asprovided bySaudi Arabia, is
from 10to20percentlower than, forexample, FAO production datainmostcases. Could Saudi
Arabia shedsome lightonhowtheeligible production differs from totalproduction?
Reply
Production figures ofwheat andbarley provided inthetable DS:5 aretheaccurate figures,
however theeligible production equals:
totalproduction -(5percentZakat [Almsgiving] +5percentimpurities).
Question 98
Reference prices forwheat andbarley arehelpfully referred toasFOBorCIF. Arethese observed
prices onaparticular date, oraverage forsome period, oraretheyexport (import) unitvalues?
How dothese prices compare todomestic applies administered prices? What grade orquality
ofbarley andwheat dothese prices apply to?Webelieve thatclarification ofthese issues will
allow members oftheWorking Party tocompare likeproducts based onprice andquality.
Reply
Itisanaverage price. They apply tointernational specifications ofwheat andbarley.WT/ACC/SAU/29
Page26
Question 99
Supporting Table DS:7 (i.e., other product-specific AMS)
AsforTable 1,wenotice thatthelivestock andpoultry feedsubsidies didnotshow upinthe
earlier DStables [WT/ACC/SAU/6 30September 1996], possibly because thatnotification referred
toanearlier period.
Space isprovided fordairy AMS, butnoamount isprovided. Could Saudi Arabia confirm that
there wasnosupport?
Reply
Itisconfirmed thatthere isnospecific support fordairy.
Question 100
Supporting Table DS:9 (i.e., non-product-specific AMS)
Wearenotsureweunderstand howistheOpportunity CostforAgricultural Loans iscalculated.
MaytheDelegation from Saudi Arabia provide anexample?
Reply
Please refertonewWT/ACC/4 tables. (WT/ACC/SPEC/SAU/1/Rev.1)
Question 101
Wenotice thatnosupport isshown fortheprovision ofirrigation water forcropproduction and
wewonder ifperhaps thisisentered aspartofthesubsidies for"engines, pumps, equipment".
Could Saudi delegation confirm this? Could theyalsoindicate whether there areanysubsidies
directly associated withrunning irrigation equipment, suchastheprovision ofelectricity ortreated
water atbelow cost?
Reply
Theprovision ofirrigation water forcropproduction isdonebyprivate farmers, andnotby
theGovernment. There isnosubsidy associated withrunning irrigation equipment.
Question 102
Could Saudi Arabia provide theoperating costs orbenefits given toproducers incomparison
totheprice ofrunning anirrigation system without subsidies, soastodetermine the"price gap"
between operating costswithasubsidy andoperating costswithout asubsidy assetoutinAnnex 3,
paragraph 13oftheAgreement onAgriculture. Paragraph 13requires that"where theuseof
budgetary outlays doesnotreflect thefullextent ofthesubsidy concerned, thebasis forcalculating
thesubsidy shallbethegapbetween theprice ofthesubsidized goodorservice andarepresentative
market price forasimilar good orservice multiplied bythequantity ofthegood orservice".
Reply
Please refertoreply 101above.WT/ACC/SAU/29
Page27
Question 103
Wenotice thattherowcalled "Investment subsidies generally available toagriculture" isblank,
Does thismean thatthere arenosuchsubsidies? Orarethere suchsubsidies buttheyhave not
been shown inthese tables? Ifso,whynot?
Reply
There arenoinvestment subsidies generally available toagriculture.
Question 104
(Question 39,WT/ACC/SAU/13 )Saudi Arabia wasasked toclarify theroleoftheGrains, Silos,
Flour Milling Organization (GSFMO), andtoconfirm thattheGSFMO didnotgrant anexport
subsidy onwheat. TheKSA wasalsoasked toclarify itsdomestic andexport programmes for
wheat. Saudi replied thattheGSFMO nolonger exports wheat andhasbeeninstructed toavoid
further export sales. Ifnoted thatquantities exported in1992-1994 werecombined withdomestic
quantities andincluded intheoverall AMS (WT/ACC/4). Finally, Saudi replied thatthegrain
marketing system wasnotrecorded asanexport subsidy forwheat inWT/ACC/4.
There have been several questions andreplies onthisissue andwewould wish tosecure our
understanding ofthesituation. CantheDelegation ofSaudi Arabia confirm when andwhythe
GSFMO stopexporting wheat? Cantheytelluswhether there anywheat exports atthepresent
time, andifso,which agency/agencies orprivate firms replaced theGSFMO? Also, ifSaudi
Arabia doesnotprovide export subsidies towheat, could Saudi Arabia provide theWorking Party
witha"nil" supporting table inWT/ACC/4 format.
Reply
GSFMO doesnotexport wheat orbarley. Export controls aremaintained forsubsidized wheat
andbarley through export licenses.
Question 105
(Question 40,WT/ACC/SAU/13) Saudi Arabia wasasked whether theactual levels ofsubsides
provided under thegovernment ’ssystem ofsupport fortheagriculture sector isstillinexcess
ofbudgeted levels. Saudi referred toitsreply 68ofWT/ACC/SAU/6, inwhich itstated thatSaudi
Arabia doesnothaveaseparate/specific section ofitsgovernmental budget fordomestic subsidies,
andtherefore didnotpossess anyrecords toanswer thequestion. Inlightofthisinformation,
wewould liketoknow howtheAMS levels setoutinWT/ACC/4 werecalculated iftheKSA does
notdesignate aspecific section ofitsgovernmental budget fordomestic subsidies, howwasitable
tocalculate theAMS levels setoutinWT/ACC/4? Wewould alsorequest toknow what data
WT/ACC/4 wasbased upon.
Reply
ThedatainWT/ACC/4 tables isbased onactuals.WT/ACC/SAU/29
Page28
Question 106
(Question 41,WT/ACC/SAU/13) Saudi Arabia wasasked whether theSaudi Agricultural Bank’s
interest freeloans constituted adomestic subsidy. Saudi confirmed thattheloans were indeed
adomestic subsidy, andnoted thatitcomputed "theopportunity costforthemedium termloans"
asaniteminthetotal AMS level inWT/ACC/4. Could Saudi Arabia explains what itmeans
bythe"opportunity costs" forshort andlongterm loans accounted forinthetotal AMS level
aswell? Ifyes,how, andifno,whynot?
Reply
Theopportunity costforthemedium termloans isthebasis forthecalculation ofrevenue
forgone, which constitutes support toagriculture incomparison toother sectors oftheeconomy.
Question 107
(Question 42,WT/ACC/SAU/13) Saudi Arabia wasquestioned about itsresponse toQuestion 61
(WT/ACC/SAU/6), inwhich itindicated thatexports ofcertain agricultural products (livestock,
horses, baby milk, medicines, date palm saplings, barley, corn, maize, andsoybeans) are
prohibited. TheKSA replied thatcorn, maize, andsoya beans arenotproduced locally toa
significant degree. Saudi alsoindicated thatthere arenorestrictions ontheexportation ofbarley
bytheprivate sector. Wewould askwhydidSaudi Arabia onlyindicate thattheprivate sector
isunable toexport barley? Arethere anypublicly owned and/or state-run enterprises thatare
abletoexport barley? Ifyes,which onesandhowdotheyoperate?
Reply
There arenorestrictions ontheexportation ofbarley except forsubsidized barley.
There isnoState-trading enterprise which exports barley.
Question 108
(Question 44,WT/ACC/SAU/13) Saudi Arabia wasasked whether itmaintains export controls
onbarley, wheat, andwheat flour. Saudi replied bystating, "no,except forsubsidized wheat
andbarley". Wewould request information onhowexport controls aremaintained forsubsidized
wheat andbarley andwhether thecontrols arequantitative restrictions, export licenses, or
something else.
Reply
GSFMO doesnotexport wheat orbarley. Export controls aremaintained forsubsidized wheat
andbarley through export licenses.
Question 109
(Question 50,WT/ACC/SAU/13) TheKingdom wasasked toclarify howitadministers themarket
price support forimported barley, andforeligibility requirements forparticipating intheprogram,
itreplied thatthere-sale prices ofimported barley areequal totheconsumer prices ofdomestic
barley. Wewould kindly request what theeligibility requirements areforparticipating inthe
market price support program forimported barley.WT/ACC/SAU/29
Page29
Reply
GSFMO imports barley under governmental subsidy program todistribute ittonomads and
Bedouins intheremote areas covering thewhole country.
Question 110
Supporting Table DS:1on"Green box"measures includes global amounts for"Public stockholding
forfoodsecurity purposes". Saudi Arabia iskindly requested tospecify theprices andtheproducts
thatarecovered under thiscategory.
Reply
Please refertoreply 96above.
Question 111
Supporting Table DS:5onMarket Price Support shows anexternal reference price forwheat
based on"f.o.b. Jeddah". WasSaudi Arabia anetexporting country forwheat inthebaseperiod
1992-94? Ifthiswasnotthecase, webelieve thattheexternal reference price should bebased
onthecorresponding c.i.f. price, according toAnnex 3paragraph 9oftheWTO Agreement on
Agriculture.
Reply
Yes,Saudi Arabia wasanetwheat exporter in1992-94.
Question 112
Supporting Table DS:9onnon-product specific ALSincludes datafor"Bad Debts forAgricultural
Loans", based onaten-year average. Saudi Arabia isrequested toprovide dataforeachofthe
three baseyears 1992, 1993 and1994.
Reply
TheAgriculturalBankprovidesmedium-termloansforten-yearperiods.Iftheborrowerdefaults
onpayments foranygiven year, theunpaid amount willbedivided bytheremaining period ofthe
contract. If,however, theborrower defaults onthewhole amount, theloanwillbedivided byten.
Question 113
IntheintroductiontothedocumentWT/ACC/SPEC/SAU/1,SaudiArabiasaysthatithassubmitted
responses totheSecretariat ’snoteon"Information tobeprovided onDomestic Support andExport
Subsidies inAgriculture". However, notable onExport Subsidies isattached toourversion of
thedocument. AsSaudi Arabia hasalready indicated thatitdoesnotmaintain Export Subsidies,
wewould liketoknow whether there isanyparticular reason fornothaving included thetable
inquestion, orifitisjustasimple oversight?
Reply
Please refertonewWT/ACC/4 tables.WT/ACC/SAU/29
Page30
TARIFF
Question 114
Could Saudi Arabia provide alistofsectors itmayfeelaneedtoprotect andunder what specific
conditions itwould seeaneed toprotect domestic producers?
Reply
Anindication canbehadfrom theinitial offer ofSaudi Arabia.
Question 115
InWT/ACC/SAU/6, reply 17,dated September 1996, Saudi Arabia states thatitplans "tomove
totheHS96system inthenexttwoyears". HasSaudi Arabia made thisconversion yet?
Reply
Theamendments oftheHS1996edition havebeenincorporated intoourCustoms Tariff (Arabic
version) which isnowbeing printed. Approximately 30percentofithasbeenprinted, andefforts
arebeing made tocomplete thejobassoonaspossible.
Question 116
Itwould greatly simplify market access negotiations andeliminate theneedforadditional work
toconvert tariffs attheendofthenegotiations ifnegotiations could beconducted using HS96.
Reply
Yes,thenegotiations willbeonthebasis ofHS96.
Question 117
Saudi Arabia hasindicated aninterest inconducting market access negotiations using electronic
media.
Wesupport thisapproach andrequests anelectronic version ofSaudi Arabia ’scurrent applied
tariffs inoneofthefollowing formats: spreadsheet format (Excel, Lotus, orQuatroPro) or
database format (FoxPro orParadox).
Reply
Thisisbeing supplied.
Question 118
Could Saudi Arabia provide more detail information onhowtointends todetermine tariffs for
dates andlong-validity pasteurized milkincontainers ofmore thanonelitre? What general level
oftariff iscontemplated?WT/ACC/SAU/29
Page31
Reply
Please refertotheinitial offer oftheKingdom ofSaudi Arabia. (WT/ACC/SPEC/SAU/2)
Question 119
Saudi Arabia wasasked whatportion ofimports areexempted form tariffs. Saudi Arabia recalled
Reply 67ofWT/ACC/SAU/4, andindicated that18.4percentofimports in1994weretariff free.
Could thedelegation form Saudi Arabia apprise usofwhether theportion oftariff-free imports
hadchanged since 1994, andifso,bywhat percentage?
Saudi Arabia wasasked toclarify how"certain agencies" wereauthorized totrade in"prohibited
items", andwhether such trade would beconsidered state trading. Saudi Arabia replied that
"certain prohibited items maybepermitted entry beauthorized government agencies forlegitimate
use". Could theKingdom listwhich prohibited items (sixdigitHScodes) maybepermitted entry?
Andindicate which authorized government agencies areabletodoso?Wewould alsorequest
some detail onwhat ismeant by"legitimate use"?
Reply
Thefigures forproportion ofduty-free imports after1994 arenotyetavailable. However,
ourestimate isthatthefigure would bearound 18percent.
There isnolistofprohibited items which maybepermitted entry. Entry ofsome prohibited
itemsmaybeallowed,onacase-by-casebasis,forusebygovernmentalagencies,andnotforcommercial
sale. Forexample, whereas theimport ofarms isprohibited, buttheirimport maybeallowed for
usebythePolice orbyother security agencies. Usebygovernmental agencies islegitimate use.
Question 120
Saudi Arabia wasasked about thefunction ofthetechnical committee noted inReply 14of
WT/ACC/SAU/6 (e.g., whether itcould recommend tariff changes). Saudi Arabia relied that
thetechnical committee isatemporary inter-Ministerial committee thatprovides technical support
toapermanent committee (alsodescribed inReply 14ofWT/ACC/SAU/6). Could theKingdom
clarify whether thetechnical committee itwasreferring toisabletorecommend tariff changes?
Ifyes,areitsrecommendations binding? Who aretherecommendations made to?
Reply
TheCommittee described inReply 14ofWT/ACC/SAU/6 isanInter-Ministerial Committee
whichhasnoauthoritytoimposecustomsprotection.Itsauthorityisrestrictedtoreviewingtheindustrial
applications forcustoms protection, andiftheconditions ofthemarket (market share, import price,
availability oflocalmaterials, etc.)warrant it,itrecommends thecustoms protection required. But
itsrecommendations mayormaynotbeapproved. Theauthority toimpose customs protection rests
solely withtheCouncil ofMinisters.
Itisclear, therefore, thatthesaidcommittee hasnoauthority toimpose safeguard or
anti-dumping actions andReply (2)inWT/ACC/SAU/13 stillstands.WT/ACC/SAU/29
Page32
Question 121
Saudi Arabia wasasked forfurther clarification about itsstatement thattariffs maybeapplied
inthefuture toprotect domestic industries (Reply 18ofWT/ACC/SAU/6). Specifically, Saudi
wasasked whyitpreferred tousetariffs instead ofArticle XIIandXIXsafeguards. Saudi was
alsoasked forinformation about which industries might beconsidered foradditional protective
measures. Saudi replied thatitmight provides increased tariff protection tocertain industries
topromote investment, andthatArticle XIIandXIXsafeguards werenotappropriate measures.
Could theSaudi Delegation provide theWorking Party withalistofindustries thatSaudi Arabia
might protect withincreased tariffs topromote investment? Also, could thedelegation indicate
ifthepromoting investment would betheonlyreason thatSaudi Arabia might invoke inresorting
toincreased tariffs?
Reply
Thequestion appears tobeofacademic interest. TheKingdom ofSaudi Arabia would soon
besubmitting aninitial offerongoods, anduponaccession willhaveaschedule ofbound tariffs. After
accession totheWTO, anyincrease intariffs willbeinaccordance withtherelevant WTO rulesand
procedures.
Question 122
Saudi wasasked about itsintention toincrease import duties ontobacco andtobacco products
by10percentinJanuary, 1997 (Reply 20ofWT/ACC/SAU/6), andabout itsplans tocontinue
increasing tariffs until theimport dutyfortobacco/products was100percentSaudi responded
bystating thattheminimum tariff ratefortobacco products willberaised from 50percentto
70percenton1July1997, andthatthetariff ratewillbeincreased again by2000. Wewould
liketheSaudi Delegation toindicate whether other products willalsobethesubject ofsimilar
tariff increases? Ifyes,wewould request alistatthe6-digit HScodelevel andanindication
ofwhen each increase istotakeeffect. Could Saudi Arabia confirm thatthere isnolocal
production oftobacco products. Wewould alsolike,forthebenefit oftheWorking Party, to
invite theDelegation from Saudi Arabia toreconciliate these tariff increases withtheconcept
of"standstill" which stipulate thatmarket access conditions arenotbeworsen during theaccession
process.
Reply
TheKingdom ofSaudi Arabia hasnoplans toincrease tariffs onother products.
Question 123
Inresponse toQuestion 11ofWT/ACC/SAU/13/Add.1, Saudi Arabia saysthatitmaywish to
raise tariffs toafford infant industry protection. Will Saudi Arabia elaborate under what
circumstances itwould wishtousesuchtariff protection?
Reply
Please refertoreply 19inWT/ACC/SAU/6WT/ACC/SAU/29
Page33
Question 124
Saudi Arabia ’sanswer toQuestion 17ofWT/ACC/SAU/13/Add.1 doesnotgivedetails ofhow
feesforwarehouse costs etc.relate tothecostoftheservices provided, inlinewithArticle VIII
oftheGATT. WillSaudi Arabia please provide suchdetails?
Reply
Elaborate details have already been provided inReply toQuestion 29indocument
WT/ACC/SAU/8. Thatreply clearly shows thatthefeesandcharges arerelated tocostofservices
rendered.
Question 125
Precisely which products arecovered byexport duties?
Reply
Only untanned hides andskins.
Question 126
What isthejustification forthese duties?
Reply
These areforrevenue purposes.
Question 127
Does Saudi Arabia have anyintention toeliminate these duties upon accession totheWTO?
Reply
No.
Question 128
Could Saudi Arabia provide further details ofitssystem ofexport duties onrawhides?
Reply
Please refertoparagraph 91ofdocument WT/ACC/SAU/4.
Question 129
Inresponse toQuestion 44ofWT/ACC/SAU/13/Add. 1,Saudi Arabia commits toadminister
theLawfortheProtection andEncouragement ofNational Industry inamanner thatconforms
toWTO obligations. IftheLawisincompatible withWTO obligations, whynotchange orrepeal
it?WT/ACC/SAU/29
Page34
Reply
TheLawfortheProtection andEncouragement ofNational Industry, including Article 7,will
bereviewed andrevised ifnecessary toensure itsconsistency withWTO commitments ofSaudi Arabia.
Incidentally, webelieve some WTO member countries havelawsincompatible withWTO obligations,
which theyhavenotchanged orrepealed.
Question 130
Under theGulfCooperation Council (GCC) ofwhich theKingdom ofSaudi Arabia isamember,
isitpermissible foranymember todeviate from thespecified common external tariff range?
Ifso,under what circumstances?
Reply
Negotiations oncommon external tariffhavenotyetbeencompleted. Thequestion ispremature
atthisstage.
CUSTOMS VALUATION
Question 131
Thesystem ofvaluation described doesnotmeetWTO norms, andmustbeelaborated inanumber
ofareas tocome intoconformity withtheWTO Agreement onImplementation ofArticle VII
oftheGATT 1994, itsInterpretive Notes, andrelevant decisions anddeclarations.
Ifthere arethere anyadditional regulations, circulars, decrees, etc.,other than theCustoms
Regulations andtheRules forImplementation thataddress these aspects oftheAgreement, please
provide them forthereview oftheWorking Party.
Reply
No,there arenoadditional regulations, circulars, decrees, etc.
Question 132
While some aspects ofthecurrent regime match theprocedures oftheAgreement, itisnot
sufficiently transparency orpredictability.
Atitscore, Saudi Arabia ’svaluation system relies onthe"nearest equivalent value" asan
alternative totransaction value. Thishasthepotential tocreate asituation inwhich customs
officials have wide discretion infinding areplacement valuation andcould arbitrarily select an
alternative price from sources prohibited bytheAgreement.
Thedrawbacks ofthissystem areoutlined inthereplies toquestions 93-100 inL/7645/Add. 1
andinAnnex 4ofWT/ACC/SAU/4.
Ingeneral, theregime asitnowstands doesnotprovide certainty toanimporter astohisright
toknow howthevaluation ofhisgoods willbedetermined.WT/ACC/SAU/29
Page35
Reply
When thevalue declared intheinvoice isnotacceptable totheCustoms Department. dueto
itsbeing low,theCustom Department refers tothevalues ofidentical orsimilar goods imported
previously. Although Saudi Arabia currently doesnotusethevalues oftheidentical orsimilar goods
inthesame order specified intheAgreement, thisdoesnotmean thattheprice isselected arbitrarily.
Althoughthevaluationsystemcurrentlyinusedoesnotprovidetotheimportercertainknowledge
ofhowthevaluation ofhisgoods isdetermined, inmostinstances thesystem relies onthetransaction
value mentioned intheinvoice.
Sofarastheother valuation methods areconcerned, theimporter maynothavethecertain
knowledge ofhowthevaluation ofhisgoods isdetermined.
Saudi Arabia willbring itsvaluation system inlinewiththeAgreement onCustoms Valuation,
butafterthetransitional period.
Question 133
Thefollowing provisions oftheAgreement donotappear tobereflected inthecurrent Saudi
regime:
- Articles 1:1(a)-(d) andArticle 1:2: Useoftransaction value, especially withregard to
related party transactions;
Reply
Inregard toArticles 1:1(a)-(d) andArticle 1:2:Useoftransaction value, especially withregard
torelated party transactions. Weagree thatthepresent system doesnotcontain suchprovisions.
- Articles 2-7:Methods ofvaluation alternative totransaction value, e.g.,useofprice lists
forautomobile imports, apparent routine useofafixed percentage ofvalue asasurrogate
forinsurance costs, andsome minimum import valuations;
Reply
Inconnection withArticles 2-7:Methods ofvaluation alternative totransaction value .....etc.,
there arenosimilar provisions, ingeneral.
Methods ofvaluation alternative totransaction value, e.g.useofprice listsforautomobile imports.
Thecustoms value fornewvehicles istheprice paidorpayable asshown ontheinvoices. However,
thecustoms value ofusedvehicles isderived fromapplying aschedule ofdepreciation totheoriginal
newprice. Webelieve thatitisnotconsidered aPrice List. However, itisaDepreciation Table. There
arecertain countries whoaremembers oftheWTO thatareusing thePrice Listsforcertain agricultural
products.
Regarding thestatement thatacertain percentage ofthevalue istaken asanalternative tothe
insurance cost,thisisonlywhen theinsurance policy isnotenclosed. Iftheinsurance policy isenclosed
ortheprice isCIFbased, thenitisoutright taken.WT/ACC/SAU/29
Page36
- Article 8:Specification ofpermissible additions totheprice paidorpayable;
Reply
InconnectionwithArticles8(specificationsofpermissibleadditionstothepricepaidorpayable)
and14(incorporation oftheInterpretative Notes oftheAgreement indomestic legislation) and
Decision 3.1(concerning thetreatment ofinterest charges) andDecision 4.1(concerning thevaluation
ofcarrier media bearing software), weagree thatSaudi Arabia ’svaluation system doesnothave
provisions similar totheAgreement.
- Article 10:Confidential treatment ofinformation;
Reply
AlthoughCustomsRegulationsandRulesofImplementationdonotcontainaprovisionregarding
maintaining confidentiality ofinformation, acomparable provision iscontained in12/H ofChapter 2
oftheCivil Service Lawissued byRoyal Decree 49dated 10/7/1397H. Thisrequires agovernment
employee, wholearns ofconfidential information inhisjob,nottodisclose thatinformation, even
afterheleaves government service. This, ofcourse, includes theCustoms Department employees.
- Article 11:Right ofappeal toajudicial authority;
Reply
Appeal rights forarelevant person before anindependent judicial body (i.etheBoard of
Grievances) isguaranteed byRoyal Decree 190dated 16DhuAl-Hujah 1409H. Although thisisnot
aspecific customs laworregulation, itapplies totheCustoms Department andshould berecognized
asachieving thesame result.
- Article 12:Publication oflaws, regulations, anddecisions;
Reply
Although thecustoms lawsandregulations donotspecifically provide forpublication ofrulings
andother documents, publication ofthecustoms lawsandamendments arerequired byprovision 65
inRoyal Decree No.425dated 5/3/1372H tobepublished intheofficial newspaper UmAl-Khorah
along withallother government notices suchaschanges inratesofduty.
- Article 14:Incorporation oftheInterpretive Notes oftheAgreement indomestic legislation;
and
- Acceptance ofDecision 3.1concerning thetreatment ofinterest charges andDecision 4.1
concerning thevaluation ofcarrier media bearing software.
Reply
Since Saudi Arabia isnotpresently applying theAgreement onCustoms Valuation, ithasno
provisions corresponding toArticle 14andtoDecisions 3.1and4.1.These willbeincorporated in
Saudi lawoncustoms valuation when Saudi Arabia willimplement theAgreement.WT/ACC/SAU/29
Page37
Question 134
With thecompletion oftheUruguay Round attheendof1993andtheadoption oftheWTO and
itsannexes attheMarakesh Ministerial April 1994, ithasbeenclear thatacceding countries would
berequired toadopt theprovisions oftheAgreement.
Reply
Saudi Arabia hasstated several times thatitwants toadopt theprovisions oftheAgreement,
butduetopractical reasons, Saudi Arabia asked foranextension oftimeinwhich toimplement.
Article 20oftheAgreement onCustoms Valuation, provides foranoption forthedeveloping countries
todelay theapplication foraperiod notexceeding fiveyears fromthedateofentry intoforce ofthe
WTO Agreement forsuchmembers.
Question 135
Weappreciate Saudi Arabia ’sacknowledgment oftheneedtorevise itcurrent valuation system.
Unfortunately, Saudi Arabia hasnotmade itclear initspresentations totheWorking Party on
thisissue what means itintends tousetobring itsregime intoWTO conformity.
Reply
Saudi Arabia wants toadopt theprovisions oftheAgreement onCustoms Valuation andto
incorporate them intotheCustoms Rules andRegulations assoonaspossible. However, thisisnot
aneasytask.Wehavealready begun areview ofthedifferences between ourrules andregulations
andtheprovisions oftheAgreement inorder tobeabletoidentify theshortcomings inourpresent
system andtoincorporate thenecessary changes. Thistaskrequires anenormous effort andgood
preparation from us.Wealready haveaplanbeing followed byusintheprocess ofadopting the
provisions oftheAgreement onCustoms Valuation andtoincorporate them intotheCustoms Rules
andRegulations. Themain milestones oftheplanareasfollows:
Phase I:
A. Obtain alldocumentation andpublications andtranslate them intotheArabic language.
B. Depute concerned officials totheWCO inorder todiscuss withtheexperts there theaspects
thatmustbeamended inorder tobring thepresent lawsandregulations intoconformity with
theWTO customs valuation system, andtoidentify thetechnical support thatcanbeobtained
inthisregard.
C. Communicate withcertain countries thatarealready applying thisAgreement, inorder tobenefit
from theirexperience inimplementation.
BytheendofthePhase Iwewillhavecompleted thevalidation ofourrequirements, preparation for
training ofthecustoms staffworking attheland, airandseacustoms entry points, andtheschedules
laiddown fortheimplementation period.
Phase II:
- Provide training onthevaluation methods according totheAgreement onValuation, in
collaboration withtheWCO, toapproximately 3000 customs employees at35customs entry
points, plustheimporters andcustoms brokers.WT/ACC/SAU/29
Page38
- Prepare anewdraftlegislation andregulations forcustoms valuation andforward themtothe
WTO forreview before implementation.
Phase III:
- Re-organize Customs structure andintroduce certain necessary sections required forapplying
theAgreement onValuation during theactual implementation phase.
- Complete theautomation oftheremaining customs portsofentry andinstall databasesoftware
containing thevalues ofidentical andsimilar goods.
Question 136
Wecontinue toseekSaudi Arabia ’srapid adoption oftheprovisions oftheAgreement initscustoms
regime, andimplementation oftheAgreement from thedateofAccession.
Reply
Please refertoReply 135above.
Question 137
Saudi Arabia should begin immediately toidentify thenecessary changes andtoincorporate them
intonational lawandpractice.
Reply
Please refertoReply 135above.
Question 138
Wewelcome thetransitional proposal onCustoms Valuation tabled bySaudi Arabia indocument
WT/ACC/SAU/18 andthepreparatory steps inKingdom hasidentified before itcanimplement
theAgreement ontheImplementation ofArticle VII. Inorder tofacilitate thedeliberations of
theWorking Group ontheSaudi proposal, wewould kindly request more information onthe
Kingdom ’splans andtimetable forthetraining andpreparation ofitsCustoms authority. We
would wish, inter alia,anindication of:
- thenumber ofCustoms units andofCustoms officials thatwillrequire training;
- theWTO documents thatwillneed tobetranslated andthetimeframe involved todo
so;
- thenumber oftrainers thatwillhave tobeprepared;
- theareas forwhich Saudi Arabia willdevelop prospective programs andplans;
- therelevantautomationsoftwarethatwillrequireupdatingandtheamountoftimerequired
forthatpurpose;
- theproposedcalendartodevelopthelegislationauthorizingSaudiCustomstoaccessrecords
ofimporters toverify declared values; and
- thedatebywhich Saudi Arabia willhave developed andputintoservice adatabase on
thevalues ofimported goods.WT/ACC/SAU/29
Page39
Reply
Thenumber oftheofficials whoshallbeprepared forassuming thejoboftraining, is16
candidates.
Thedocuments required tobetranslated intoArabic, areasfollowing:
1. Agreement onImplementation ofArticle VIIoftheGATT 1994, andtheInterpretative Notes
2. Valuation Training Course
3. Measures toCombat Valuation Fraud
4. Compendium issued bytheWCO (formerly CCC) which contains thefollowing:
(i) Index ofValuation Ruling Conclusions
(ii) Decisions taken bytheCommittee onCustoms Valuation
(iii) Texts oftheTechnical Committee
(iv) Advisory Opinions
(v) Commentaries
(vi) Explanatory Notes
(vii) Case Studies
Saudi Arabia wants toadopt theprovisions oftheAgreement onCustoms Valuation andto
incorporate them intotheCustoms Rules andRegulations assoonaspossible. However, thisisnot
aneasytask.Wehavealready begun areview ofthedifferences between ourrules andregulations
andtheprovisions oftheAgreement inorder tobeabletoidentify theshortcomings inourpresent
system andincorporate thenecessary amendments therein. Thistaskrequires anenormous effort and
good preparation from us.Wealready haveaplanbeing followed byusintheprocess ofadopting
theprovisions oftheAgreement onCustoms Valuation andtoincorporate themintotheCustoms Rules
andRegulations. Themain milestones oftheplanareasfollowing:
Phase I:
A. Obtain alldocumentations andpublications, andrender intotheArabic language.
B. Depute concerned officials totheWTO inorder todiscuss withtheexperts there theaspects
thatmustbeamended inorder tobring thepresent regulation inconformity totheWTO customs
valuation system, andtoidentify thetechnical support thatcanbeobtained inthisregard.
C. Coordinate withcertain countries thatarealready applying thisAgreement, inorder tobenefit
fromtheirexperience inimplementation. BytheendofthePhase I,wewould havecompleted
requirement validation, programs preparation fortraining ofthestaffworking attheland, air
andseaportcustoms.
D. Prepare schedule fortheimplementation phase.
Phase II:
- Provide training onthevaluation methods according totheAgreement onValuation, in
collaboration withtheWTO, toaround 3000 customs employees at35customs entrances,
plusthecustoms brokers andimporters.
- Prepare anewlegislation draftforthecustoms valuation andforward ittotheWTO forreview
before implementation.WT/ACC/SAU/29
Page40
Phase III:
- Re-organize Customs structure andintroduce certain necessary sections required forapplying
theAgreement onValuation during theactual implementation phase.
- Complete theautomation ofremaining customs entrances, andinstall databasesoftware for
thegoods withanobjective tobenefit fromitinvaluation oftheidentical andsimilar goods.
STATE TRADING
Question 139
Could Saudi Arabia provide thetimeperiod during which itintends tocomplete privatizing the
Grain Silos andFlour Mills Organization (GSFMO)?
Reply
Presently, there isnotimetableforprivatization ofGSFMO.
Question 140
Saudi Arabia hasindicated inWT/ACC/SAU/4, Annex 6,thattheGrain Silos andFlour Mills
Organization (GSFMO) isastate trading organization. Isthere atimetable inplace yetfor
privatizing theGSFMO and,ifso,willithave anyofitsprevious functions orfunding?
Reply
Atthepresent, there isnotime- tablefortheprivatization ofGSFMO .
Question 141
Wewould appreciate aresponse toourearlier question regarding theactivities oftheGSFMO.
Thegrain-purchasing activities oftheGSFMO asdescribed inWT/ACC/SAU/6 donotappear
tomeet thecriteria ofparagraph 3ofAnnex 2(public stockholding forfoodsecurity purposes).
TheGSFMO payshigher thanmarket prices forcommodities (asnoted intable DS:5), andthen
subsidizes thecostoftheendproduct toconsumers. Thispractice doesnotappear tobeconsistent
withtheparagraph 3criteria which states thatfoodpurchases made bythegovernment shall
bemade atcurrent market prices andsales from foodsecurity stocks shall bemade atnoless
thanthecurrent domestic market price fortheproduct andquality inquestion.
Reply
Theguaranteed production price towheat producers canbeconsidered asa"market" price
forprocuring grainfromdomestic producers. Similarly theconsumer/user priceestablished byGSFMO
canbeconsidered theeffective domestic market saleprice. Forthese tworeasons theactivities ofthe
GSFMO metthecriteria ofparagraph 3ofAnnex 2(Public stockholding forfoodsecurity purposes).WT/ACC/SAU/29
Page41
Question 142
Saudi Arabia wasasked tolistallfirms owned bytheGovernment ofSaudi Arabia, orinwhich
itheldasignificant financial interest. Saudi provided alistof19companies thatparticipate in
theSaudi Public Investment Fund (SPIF). Whywerestate-trading organizations suchastheSaudi
ArabianOilCompany(SaudiAramco)andtheGrainsSilosandFlourMillsOrganization(GSFMO)
notincluded inthelistofcompanies within theSPIF? Isthere adifference between
government-owned firms andthose companies thatparticipate intheSPIF? Perhaps theSaudi
Delegation could revise thelistofgovernment owned firms forclarification forclarification
purposes.
Reply
Thelistwillbesupplied.
Question 143
Saudi Arabia wasasked toclarify seemingly contradictory statements about whether theGSFMO
wasengaged intheexportation ofwheat orother commodities tointernational markets. Saudi
replied thatarecently introduced decree prohibits theGSFMO form exporting wheat. Does the
GSFMO export anyother commodities tointernational markets? Have anyother governmental
agencies assumed theroleofexporting wheat, nowthattheGSFMO isprohibited from doing
so?
Reply
No,GSFMO doesnotexport anycommodities. Noother Government agencies haveassumed
theroleofexporting wheat.
Question 144
Saudi Arabia wasasked whether international wheat sales were made byprivate traders orthe
GSFMO after 1995. Saudi replied thatnowheat exports were made bytheGSFMO. Could
Saudi Arabia provide information toconfirm howsales were made andbywhom after 1995.
Ifwheat sales were notmade bytheGSFMO, were theymade byother governmental agencies
and/or private traders?
Reply
Nosaleswere made byGSFMO, neither other government agencies norbyprivate traders.
Question 145
(Questions 47and49,WT/ACC/SAU/13) Saudi Arabia wasasked toelaborate ontheoperation
oftheGSFMO (e.g., howitcreates market stability forgrains inorder tosafeguard farmers
from price fluctuations). TheKSA referred toprevious replies (Reply 138ofWT/ACC/SAU/6
andReply 131ofL/7645/Add.1) inwhich itgaveageneral overview ofthemandate oftheGSFMO.
Wewould request thattheSaudi Delegation clarify theroleoftheGSFMO andprovide a
description ofthedifferent mechanisms usedbytheGSFMO achieves itsobjectives ofcreating
market stability forgrains inorder tosafeguard Saudi farmers from price fluctuations?WT/ACC/SAU/29
Page42
Reply
Theroles ofGSFMO areasfollows:
- toestablish silosprojects inthemidst ofproduction areas, helpfarmers inmarketing theircorps
andfacilitate transporting theircrops todifferent markets;
- tocreate astable market withfixed prices announced inadvance inorder tosafeguard farmers
interests from price fluctuations.
Question 146
(Question 48,WT/ACC/SAU/13) Saudi Arabia wasasked forfurther clarification about the
GSFMO ’sdomestic programmes fortheproduction andexportation ofwheat andbarley.
Specifically, Saudi wasasked toexplain howtheGSFMO isabletosellwheat andbarley onthe
world market without subsidies when theinternal support price generally exceeds theworld price.
Saudi replied thattheGSFMO usedtoengage insuchexports, butnolonger does. Isthiscorrect?
And, iftheGSFMO nolonger export wheat and/or barley, arethere other government agencies
thatdo?
Reply
GSFMO orother government Agencies areneither exporting wheat norbarley.
Question 147
Saudi Arabia wasasked tomake acommitment thattheGSFMO willnotexport anywheat in
thefuture. Saudi replied thattheGSFMO hasnoplans toexport wheat inthefuture, andis
barred from exporting bydecree. Arethere anyother governmental organizations orstate-trading
enterprises thathave assumed thetaskofexporting wheat? Ifyes,could Saudi Arabia provide
adetailed description ofthem?
Reply
Noothergovernmental agencies orstate-trading enterprises haveassumed thetaskofexporting
wheat.
SPS
Question 148
Council ofMinisters Resolution No.207(26.1.1396H). "Agricultural Quarantine Regulations.":
Article 6:Indicates thatconsignments must befreeofallweed seeds. Thisdoesnotappear to
account forwhether suchweed seeds are"quarantine significant", inaccordance withrelevant
international guidelines. Ifso,thisrequirement maybeinconsistent withArticles 2and5ofthe
SPSAgreement andother WTO obligations.
Reply
Upon accession, theKingdom ofSaudi Arabia willcomply withWTO obligations.WT/ACC/SAU/29
Page43
Question 149
Article 15:Authorizes additions tothelistofquarantine pests. Arethere regulations outlining
theprocedures tobefollowed?
Reply
There arenospecific regulations.
Question 150
Annex 1:These regulations appear tocover alltypes ofagricultural products, including seeds.
Isthislistcomprehensive anduptodate?
Reply
Yes.
Question 151
HowdoesthelistintheAnnex relate tothelistofplant diseases insection 5ofregulations entitled
"Specification ofSeeds", issued bytheMinistry ofAgriculture andWater, Agricultural Research
Department, Plant Production Division, Field Crop Research Office?
Reply
Toanswer thequestion, please provide theAnnex Reference.
Question 152
Council ofMinisters Decree No.208(26.1.1396H). "The Statutory Instrument oftheVeterinary
Quarantine". Article 3:States that: "Noanimal maybeadmitted ...from anycountry that
isinfected withanyepidemic disease ...". Thisappears inconsistent withArticle 6oftheSPS
Agreement.
Reply
Upon accession, Saudi Arabia willcomply withtheWTO rules.
Question 153
Article 8:Requires that theVeterinary Health Certificate beauthenticated by"Saudi
representatives". Thisrequirement, which isrepeated inother Saudi SPSregulations, doesnot
appear toprovide anyadditional health protection andmaybeanunnecessary restriction ontrade.
Reply
Thisrequirement istoavoid malpractices.WT/ACC/SAU/29
Page44
Question 154
Council ofMinisters Resolution No.50(17/3/1410). Relating toControls onPesticides, Animal
Diseases andFood Additives. Article 3(a):States that"meat shallnotbeimported from countries
sufferinganimalepidemicdiseases".ThisappearsinconsistentwithArticle6oftheSPSAgreement.
Reply
Upon accession, theKSA would examine thecompatibility ofthiswithWTO rules.
Question 155
Article 4(a): Requires thatauthorities "ensure thatfood isfreeofhormones andauxines".
Documents submitted totheWorking Party indicate thatSaudi Arabia usesCodex standards
forthese substances. Does thisprovision relate onlytoexternally administered substances?
Reply
No.
Question 156
Annex: Indicates thatCertificate ofOrigin andSanitary Certificate must beauthenticated by
Saudi diplomatic missions. Thisrequirement, which isrepeated inother Saudi SPSregulations,
doesnotappear toprovide anyadditional health protection andmaybeanunnecessary restriction
ontrade.
Reply
Please refertoreply 153above.
Question 157
Annex: Thisdocument indicates thatallveterinary drugs andvaccines, animal feedadditives,
andpesticides must beregistered before being imported. Arethere regulations providing details
onregistration procedures?
Reply
Yes.
Question 158
Does Saudi Arabia publish anupdated listofallproducts thathave been registered?
Reply
TheKSAisintheprocess ofupdating thelistofregistered products, which willbepublished.WT/ACC/SAU/29
Page45
Question 159
Once products areregistered, doindividual shipments continue tobesubject toregistration
procedures?
Reply
No.
Question 160
Ifaproduct isregistered byoneproducer, areother producers ofthesame product alsorequired
toregister?
Reply
Yes.
Question 161
Department ofAgricultural Research, MOAW, Regulations forImporting Seedlings, Seeds and
Fertilizers. Article 1.1requires theimporter tohaveabusiness license forengaging inagriculture.
Article 1.2forbids farmers fromre-selling these products. Article 1.3requires importers toprovide
commercial information, suchassources andquantities ofimported products, toMOAW. These
requirements donotappear torelate tothehealth andsafety ofimported products.
Reply
These requirements aretoregulate internal trade forsafety reasons.
Question 162
Since aHealth Certificate isalsorequired, what additional protection dothese requirements
provide?
Reply
Please refertoReply 161above.
Question 163
Articles 3.2and3.3require thatalfalfa andbroad bean seeds befreeofweed seeds. Does this
apply toallweed seeds, regardless ofquarantine significance?
Reply
Itapplies toseeds ofquarantine significance.WT/ACC/SAU/29
Page46
Question 164
MOAW, Agricultural Research Department, Agricultural Engineering Decision No.012273
(2.3.1407H). Regulations onImporting Agricultural Machinery. These regulations require the
provision ofextensive commercial information andimpose other conditions which donotappear
torelate toanyhealth orsafety concerns. They appear toconstitute asignificant non-tariff barrier
totrade. Examples ofspecific provisions which raise serious concerns with respect toWTO
obligations include (butarenotlimited to):
- Article 1:Foreign suppliers arerequired tohave anapproved Saudi agent.
- Article 2:Agents arerequired toprovide MOAW withinformation oncosts, theproduction
capacity oftheforeign factory, andtheuseofcovered equipment inthecountry oforigin.
- Article 3:Importers mayonlybelicensed toimport fiveunits.
- Article 4:TheSaudi end-user must be"well known" bytheAgricultural Bank.
- Article 5:TheSaudi end-user must be"introduced" toMOAW.
Reply
These regulations willbereviewed.
Question 165
Ministry ofAgriculture andWater, "Specifications ofSeeds". Inthesection "Cases ofRejecting
SeedShipments orSeedLots", item2(D)states: "Proportion ofbarley seeds: 5barley seeds per
2kilograms ofwheat seeds, ifwheat seeds areimported". Isthere adifferent standard, ifwheat
seeds aresupplied domestically? Ifso,theregulations would appear tobeinconsistent withthe
principle ofnational treatment.
Reply
There arenodifferent standards forwheat seeds which aresupplied domestically.
Question 166
Form letters over thesignature oftheDirector General, Agricultural Research Department.
"Approval ofImporting Alfalfa andVegetable Seeds from Non-Arab Countries", and"Approval
ofImporting Flower andForage Crop Seeds from Non-Arab Countries". Thetitles ofthese
documents indicate thattheyonlyapply to"non-Arab" countries. Arethere different requirements
forArab countries? Thisraises potential concerns withtheconsistency ofthese regulations with
theprinciple ofmost-favoured-nation treatment.
Reply
Thisregulation willbereviewed.
Question 167
Please specify theexceptions Saudi Arabia envisions, anddescribe theaspect ofthecurrent regime
thatSaudi Arabia hasidentified asnotinconformity withtheAgreement andthatcannot be
addressed satisfactorily prior toSaudi Arabia ’saccession.WT/ACC/SAU/29
Page47
Reply
Please refertoReply 175below.
Question 168
Arefinal regulations established bythese twoministries published inanyofficial journal that
isreadily available tothegeneral public?
Reply
Yes,these arepublished.
Question 169
Dothese twoministries publish draft regulations andprovide theopportunity forpublic comment?
What arethespecific procedures? Isthesame three-month period forpublic comment provided
asisthecaseforstandards developed bySASO?
Reply
These draftregulations aremade available totheChamber ofCommerce andinterested parties
andtheircomments aretaken intoaccount before finalizing these.
Question 170
Inresponse toquestion 74ofWT/ACC/SAU/13/Add. 1,Saudi Arabia indicated thattheMinistry
ofAgriculture circulates "tothelocal importing community" alistofanimal diseases andthe
regions inwhich theyoccur. Saudi Arabia didnotrespond totherequest toprovide thatlist
totheWorking Party. Wewould liketorepeat thatrequest.
Reply
Thelistisattached. (Attachment 1)
Question 171
Inresponse toquestion 67ofWT/ACC/SAU/13/Add.1, Saudi Arabia indicated thatitwould be
providing documentation relating tothestepsithastaken torecognize theequivalency ofitstrading
partners ’sanitary andphytosanitary controls. Thisdocumentation doesnotappear tobeprovided
inWT/ACC/SAU/14. Please provide therequested documentation orindicate which elements
ofthedocuments already provided apply.
Reply
Thisdocumentation willbeprovided.WT/ACC/SAU/29
Page48
Question 172
Saudi Arabia requires authentication by"Saudi representatives" foranumber ofdocuments
required forimportation. Please explain whyauthentication isrequired forveterinary health
certificates, phytosanitary certificates andother official certification documents which attest to
thecontrols established toprotect against agiven riskandoften issued byaregulatory official
oftheforeign government.
Reply
Please refertoReply 153above.
Question 173
Please explain thepurpose forauthentication ofimport documents. Specifically inlightofthe
factthatthisprocess isoften unnecessary andwould notprovide anyadditional assurance ofhealth
protection (i.e.phytosanitary certificates).
Reply
Please refertoReply 153above.
Question 174
Foreachproblem identified, please indicate thedatebywhich Saudi Arabia believes itwillbe
abletoresolve theproblem, i.e.,willbeinfullconformity withtheSPSAgreement?
Reply
Please refertoReply 175below.
Question 175
Inresponse toQuestion 34inWT/ACC/SAU/13, Saudi Arabia stated thatitreserves theright
tospecified exemptions from obligations under theSPSAgreement. What exemptions are
envisioned andwhydoesSaudi Arabia needafive-year phase-in period forfullconformity with
theSPSAgreement?
Reply
SaudiArabia’sreplytoQuestion34inWT/ACC/SAU/13statedthattodate,ithasnotdiscovered
anyinconsistency between itsSPSregime andtherequirements oftheSPSAgreement. Until such
inconsistency isidentified, itisnotpossible toassess thetimeandresources thatwould benecessary
tomake therequired rectification(s). Consequently, Saudi Arabia isnotabletopresent acasetothe
WTO Working Party atthistimeseeking timelimited exceptions from certain obligations under the
SPSAgreement, andreserves itsrighttoraisethisissue anytimeduring theaccession negotiations.
Meanwhile, Saudi Arabia ’sreview ofitsSPSregime isalready inprogress guided bythecomments
oftheWorking Party Members.WT/ACC/SAU/29
Page49
Question 176
Thebackgroundpaperonsanitaryandphytosanitarymeasuresgivesabriefoverviewoftheregime.
However, there isinsufficient detail provided astohowtheregime operates inpractice. Weseek
confirmation thatmeasures arebased onriskassessments carried outinaccordance withArticle 5
oftheSPSAgreement. Weseekabrief description. Howistheobjective (Article 5.4oftheSPS
Agreement) ofminimizing trade effects factored intothese decisions.
Reply
Thebackground paper onSPSMeasures confirms thatSaudi Arabia ’sSPSMeasures conform
toallstandards guidelines orrecommendations issued bytheinternational bodies specifically designated
bytheSPSAgreement i.e.Codex Alimentarius Commission, International Office ofEpizootics and
International PlantProtection Conventions (N.B. Saudi Arabia isaMember ofallthreeorganizations).
Consequently, inaccordance withArticle 3.2oftheSPSAgreement, these SPSMeasures are
fullyconsistent withtheSPSAgreement. ForSPSMeasures related toriskassessment notcovered
bytheabove three international bodies (such asmicrobiological risksandshelflifeoffoodproducts),
Saudi Arabia relies mainly onscientific studies, guidelines andrecommendations either carried out
byitself (limited cases) orbyspecialized internationally accepted research institutes, universities or
scientific references, "asappropriate tothecircumstances" affecting theprobability andseverity of
these risks. Examples ofsuch"circumstances" arethesubject ofthestudy conducted bySaudi Arabia
entitled "Proceedings ofSymposium ontheTransportation, Handling andStoring ofFood Products
intheKingdom, 26-28 February 1989".
Theappropriate levelofprotection adopted bySaudi Arabia isconsistent withtheguidelines
andrecommendations issued bythese internationally recognized bodies andisthusdeemed tohave
"taken intoaccount theobjective ofminimizing negative trade effects".
Consequently, Saudi Arabia confirms thatitsSPSMeasures arebased onriskassessment in
accordance withArticle 5oftheSPSAgreement.
Question 177
Saudi Arabia wasasked howtheMinistry ofAgriculture determines which diseases totestfor
itsmeat inspection system. Itreplied thattheMinistry ofAgriculture bases itstestsoninformation
from international bodies (e.g., WHO, FAO, OIE). Could Saudi Arabia bemore precise about
theinternational and/or domestic standards itbases itstestsonforitsmeat inspection system?
Reply
Thetestisbased onthedomestic Saudi standards, ifexisting or,intheabsence ofaSaudi
standard, oninternational standards.
Question 178
Saudi Arabia wasasked whether riskassessments must beconducted todetermine ifimport
regulation isrequired. Itresponded thattheMinistry ofAgriculture isstrongly guided by
international riskassessments, butmayconduct itsownriskassessments thataccount forlocal
conditions. Could Saudi Arabia elaborate onitsownriskassessments? How dodomestic risk
assessments account forlocalconditions? What ismeant by"local conditions?" Howfrequently
doestheMinistry ofAgriculture useitsownriskassessments instead ofinternational procedures?WT/ACC/SAU/29
Page50
Reply
SaudiArabia’sSPSmeasuresarebasedonriskassessmentdevelopedbytherelevantInternational
organizations designated bytheSPSAgreement.
Saudi Arabia hashardly everdeviated from thispractice, nevertheless, Saudi Arabia cannot
preclude thepossibility ofsetting itsownappropriate levelofSPSprotection against specific ensuing
hazards inaccordance withArticle 3.3oftheSPSAgreement, subsequent toqualitative orquantitative
riskassessment carried outbySaudi Arabia (orother countries) "asappropriate tothecircumstances"
i.e.taking intoaccount local conditions suchastheeffect ofSaudi Arabia ’sclimatic conditions on
theprobability orseverity oftherelevant hazard orthehigher susceptibility ofanative animal orcrop
tothedetrimental effects ofthehazard.
Inallsuchcases, Saudi Arabia willcomply fullywiththeprovisions ofArticle 5oftheSPS
Agreement.
Question 179
Saudi Arabia wasasked toprovide theWorking Party withalistofanimal diseases andregions
inwhich theyexist. Saudi explained thatthelistisavailable through theChambers ofCommerce.
Wewould kindly request thatthelistbedirectly provided totheWorking Party, along witha
listofanimal diseases andregions inwhich theyexist.
Reply
Thelistisattached. (Attachment 1)
Question 180
Saudi Arabia wasasked whether anyriskassessments have been conducted toidentify specific
health concerns associated with hormones, growth induces, antibiotics, andanycancerous
substances. Saudi Arabia replied thattheMinistry ofAgriculture isstrongly guided by
international riskassessments, butmayconduct itsownriskassessments thataccount forlocal
conditions. Could Saudi Arabia elaborate onitsownriskassessments? How dodomestic risk
assessments account forlocalconditions? What ismeant by"local conditions?" Howfrequently
doestheMinistry ofAgriculture useitsownriskassessments instead ofinternational procedures?
Reply
Refer toReply 178. Thisapplies aswelltohealth concerns withhormones, growth inducers,
antibiotics andcancerous substances.
Question 181
Saudi Arabia wasasked about theprocedures used thedetermine whether asubstance is
"cancerous". Itprovided reassurance thatSaudi Arabian authorities follow international norms.
Could Saudi Arabia bemore specific about theprocedures usedtodetermine whether asubstance
is"cancerous?" Wewould alsorequest alistoftheinternational norms thatareadhered to?
Reply
Refer toReply 178andReply 180.WT/ACC/SAU/29
Page51
Question 182
Weunderstand from Saudi replies thatthere hasbeenanevolution intheinterpretation ofwhether
theprovisions oftheICCP relating totheinspection offood, other agricultural products, and
pesticides aresanitary andphytosanitary (SPS) measures. Inthelightofthisevolution, wewould
firstliketheDelegation ofSaudi Arabia toconfirm thattheprovisions oftheICCP relating to
theinspection offood, other agricultural products, andpesticides areindeed considered sanitary
andphytosanitary measures under theGATT.
Inasecond time, wewould liketothank Saudi Arabia foritsindication thatitwill,upon becoming
amember oftheWTO, review itsSPSmeasures andseektoobtain the"specified time-limited
exception" ofArticle 10.3oftheSPSAgreement when amending itsregime. Wewould invite
theGovernment ofSaudi Arabia toundertake itsreview ofSPSmeasures sooner thanstated in
question 34,andtopresent itstransitional soonthereafter, asthe"specified time-limited exception"
ofArticle 10.3oftheSPSAgreement issubject tonegotiation during accessions.
Reply
Confirmation hasalready beenprovided intheprevious reply tothisquestion.
SaudiArabia’sreplytoQuestion34inWT/ACC/SAU/13statedthattodate,ithasnotdiscovered
anyinconsistency between itsSPSregime andtherequirements oftheSPSAgreement. Until such
inconsistency isidentified, itisnotpossible toassess thetimeandresources thatwould benecessary
tomake therequired rectification(s). Consequently, Saudi Arabia isnotabletopresent acasetothe
WTO Working Party atthistimeseeking timelimited exceptions from certain obligations under the
SPSAgreement, andreserves itsrighttoraisethisissue anytimeduring theaccession negotiations.
Meanwhile, Saudi Arabia ’sreview ofitsSPSregime isalready inprogress guided bythecomments
oftheWTO Working Party inthisrespect.
Question 183
Saudi Arabia wasasked toprovide copies ofthelawsandregulations which explain thepurposes
ofitslabelling requirements. Itnoted thatsome ofthestandards areStandards No.573/1994
andNo.1/1995. Inaddition, Saudi Arabia explained thatspecific labelling requirements are
alsoindicated intheapplicable standards. Arethere anyother lawsand/or regulations inaddition
toSaudi Standards No.573/1994 andNo.1/1995 thatexplain thepurposes ofitslabelling
requirements? Could Saudi Arabia provide more detailed information about thespecific labelling
requirements intheapplicable standards? Aclarification ofwhatismeant byapplicable standards"
would beappreciated.
Reply
SSA1/1995 "Labelling ofPrepackaged Foods" includes general requirements common toall
foodproducts. However certain foodproducts might necessitate additional declaration requirements
concerning safety andquality, suchasthepercentage offatinsome milkproducts orthepercentage
ofnatural concentrate infruitjuicedrinks ortheclassification andgrading ordeclaration ofadditives
insome foodproducts. The"applicable standards" referred tointheprevious reply arethestandards
fortheparticular foodproducts inquestion.WT/ACC/SAU/29
Page52
Question 184
Saudi Arabia wasasked toprovide acomplete list(by6digit HStariff line) ofallproducts
requiring theHalal Certificate, theHealth Certificate, andtheCertificate ofOrigin. Saudi Arabia
provided averygeneral answer. Itstated thatthethree types ofCertificates arerequired for
products inHSChapter 2.Saudi Arabia alsoexplained thattheHalal Certificates were ensure
thatanimals were slaughtered according toreligious laws, andthattheHealth Certificates were
toensure thesafety oftheproduct forhuman consumption. Could Saudi Arabia provide more
detailed information (by6digitHStariff line)forallproducts requiring theHalal Certificate,
theHealth Certificate, andtheCertificate ofOrigin? Could Saudi Arabia provide amore detailed
explanation ofthepurpose ofthethree types ofCertificates, andtherelevant riskassessments
thatareconducted before theyareawarded?
Reply
Allfoodproductsshouldbeaccompaniedbyacertificateoforigin,whichdeterminesthecountry
ofexport, protecting theconsumer fromimported products fromcountries withoutbreaks ofepidemics
orradiological contamination, inaddition totheprevention ofdeceptive practices.
Allmeatproducts should beaccompanied by:
- health certificates toensure thatthemeatisexamined before andafter slaughtering byofficial
veterinaries andthatitisfitforhuman consumption andfreefrom epidemics andinfectious
diseases;
- Certificate ofIslamic Slaughtering toensure thattheslaughtering iscarried outinaccordance
withthelawsofIslamic Sharia.
International standards were adopted forriskassessment related tothese certificates:
- Official International DESEpizootics (OEI) 1971
- EEC(771991)No.L26/85CouncilDirectiveof21December1976–HealthProblemsaffecting
Intra–Community Trade inMeat Products.
Question 185
Saudi Arabia wasasked whether meat inspection regulations allow forrecognition ofdisease-free
regions within WTO Member economies. Saudi Arabia replied inthenegative, andstated that
"allregions ofaparticular country receive thesame treatment". Arethere some countries or
regions oftheworld thatareexempt from meat inspection requirements because they are
"disease-free zones?" Ifso,what arethey?
Reply
No.
Question 186
Inresponse toQuestion 75ofWT/ACC/SAU/13/Add.1, Saudi Arabia explains therequirement
forzerosalmonella tolerance inrawmeat andpoultry. CanSaudi Arabia confirm thatthis
requirement alsoapplies todomestic meat andpoultry?WT/ACC/SAU/29
Page53
Reply
Please beinformed that:
- SSA116/1979 "Beef andBuffalo Mea,t Fresh Chilled andFrozen" clause 4.1.18 states that
[thecarcass meatshallbefreefrom pathogenic microorganisms andtheirsecretion].
- SSA117/1979 "Frozen Chicken" states that[Salmonella testsshallbecarried outonthelots.
Iftheresult ispositive inmore thanonesample from fivesamples, thelotshallberejected
andiftheresult ispositive inonesample orless,thelotshallbeconsidered acceptable].
- Saudi Standards areapplied todomestic andimported foodproducts onanon-discriminatory
basis.
Question 187
According toreply toQuestion 156ofWT/ACC/SAU/13/Add.1, "Saudi Arabia willnothave
problems inimplementing theSPS Agreement". Inresponse toQuestion 34of
WT/ACC/SAU/13/Rev.1 alsoconcerning SPS. Saudi Arabia stated "should itprove necessary,
SaudiArabiawillseek"specifiedtime-limitedexception"fromobligationsundertheSPSAgreement
along thelinesofArticle 10.3ofthatAgreement". CanSaudi Arabia clarify itsposition onthe
necessity foratransition period?
Reply
Please refertoReply toQuestion 175above.
Question 188
Saudi Arabia ’sintention toabide byitsWTO SPSobligations based oninternational standards
andscientific evidence iswelcome (reply toQuestion 34,WT/ACC/SAU/13/Rev.1). Saudi Arabia
currently hasabanontheimportation ofmilkanddairy products from certain WTO members.
Saudi Arabia justifies thebanonhealth grounds, despite reports fromfourexpert groups, including
theWorld Health Organization, thatthese products aresafe. What steps willSaudi Arabia be
taking toliftthisbanandthereby comply withtheSPSAgreement?
Reply
Saudi Arabia would dowhatever isnecessary under WTO rules, when itaccedes.
SHELF LIFE
Question 189
Inresponse toquestion 74(a) ofWT/ACC/SAU/13/Add. 1,Saudi Arabia states that"tofacilitate
administration ofcontrols, allregions ofaparticular country receive thesame treatment". This
positionappearsinconsistentwiththeSPSAgreement’srequirementthat,inapplyingSPSmeasures,
WTO members recognize "regional conditions" affecting human, animal andplant health risks.
IsSaudi Arabia prepared tocomply withthisrequirement? What steps hasSaudi Arabia taken,
orwillSaudi Arabia take, toalign itsSPSregime withthisobligation?
Reply
Thiswillbereviewed.WT/ACC/SAU/29
Page54
Question 190
Would Saudi Arabia explain what factors itdoesconsider when assessing regulated foodproducts
quality deterioration factors against foodsafety concerns and/or risks?
Reply
Onassessing thefactors behind thedeterioration ofthequality offoodproducts, thereareseveral
factors among which are:themaincomponents oftheproduct, methods ofpackaging, transport and
storage. These arefactors ofsafety mainly themaincomponents ofquality suchaswater activity and
microbiological requirements.
Question 191
HasSaudi Arabia initiated anyadditional studies tojustify interms ofsound-science itsshelf-life
requirements? Ifso,what istheir status?
Reply
Theresearches thathavebeenconducted intheKingdom ofSaudi Arabia in1989.
Question 192
HasSaudi Arabia established ascientific justification foritsshelf-life standards foralleleven
foodproducts categories listed under Group 1oftheICCP? Please provide copies ofanyscientific
evidence orriskassessment studies prepared bySaudi Arabia which wererelied upon inadopting
itsshelf-life policies foreachproduct category.
Reply
There arethree products notincluded under theitemofthedetermination oftheshelf-life of
theICCP/s eleven foodstuff list.They arerice,teaandsugar.
Question 193
Specifically, wewould liketoreview firstalldocumentation pertaining totheshelf-life requirements
forbaby food, canned foodandshelleggs. Additional questions maybeforthcoming following
ourreview ofthese materials.
Reply
Please findattached alistofreferences usedtospecify theshelf-life ofthebaby foods, the
packed foods andtheshelleggs. (Annex II)
Question 194
Since thedeclared shelf-life normally indicates thattheproduct willbe"fitforconsumption" for
theentire duration ofthatshelf-life, would Saudi Arabia explain what additional health protection
isprovided byrequiring thathalfremain atthetimeofimportation?WT/ACC/SAU/29
Page55
Reply
Thecriteria offoodproduct quality areaffected bytime. Consequently, theelapse ofhalf
theexpiry period indicates deterioration oftheproduct butdoesnotaffect ithygienically, given that
theremaining period formarketing theproduct inside Saudi Arabia isshort.
Question 195
Would Saudi Arabia please explain what ismeant byscientific assessment ofhealth riskinthe
context ofthisresponse, ifmicrobiological orfactors likerancidity andmoisture arenotconsidered
asimportant factors?
Reply
Themeaning of"Scientific Assessment ofHealth Risk" istospecify thecriteria ofbiological,
physical andchemical quality ofthefoodproduct inthelightofvarious international scientific researches
conducted inthisrespect (specified inthereply toQuestion 25).
Question 196
Initsresponse toquestion 75ofWT/ACC/SAU/13/Add. 1,Saudi Arabia states thatithasadopted
a"zero tolerance" standard forsalmonella inmeat products. Webelieve thatthisisatoddswith
thecurrent practice forimports which reflects thefactthatitisimpossible toachieve such a
standard. E.g., other sources indicate thatSaudi Arabia isapplying astandard thatcould require
rejection oftheproduct ifatestreveals onepositive sample infive. Itisunclear which standard
Saudi Arabia intends toenforce.
Reply
SSA116/1979 "Beef andBuffalo Meat Fresh, Chilled andFrozen", item4.1.18: Thecarcass
meatshallbefreefrom pathogenic microorganisms andtheirsecretion.
SSA117/1979 "Frozen Chickens", item4.1.13: Salmonella testsshallbecarried outonthe
lots. Iftheresult ispositive inmore thanonesample fromfivesamples, thelotshallberejected and
iftheresult ispositive inonesample orless,thelotshallbeconsidered acceptable.
Question 197
Thisismore realistic. Astrict "zero tolerance" standard isunenforceable, since thousands of
salmonella strains areubiquitous worldwide.
Reply
SSA116/1979 "Beef andBuffalo Meat Fresh, Chilled andFrozen", item4.1.18: Thecarcass
meatshallbefreefrom pathogenic microorganisms andtheirsecretion.
SSA117/1979 "Frozen Chickens", item4.1.13: Salmonella testsshallbecarried outonthe
lots. Iftheresult ispositive inmore thanonesample fromfivesamples, thelotshallberejected and
iftheresult ispositive inonesample orless,thelotshallbeconsidered acceptable.WT/ACC/SAU/29
Page56
Question 198
Anyattempt toenforce suchastandard would raise national treatment concerns, since itwould
notbepossible toachieve thesame standard indomestic production. Itisstillunclear touswhat
standard Saudi Arabia intends toapply withrespect tosalmonella inpoultry andother meat
products. Please provide copies oftheapplicable regulations. Wemayhave further questions
after reviewing these documents.
Reply
SSA116/1979 "Beef andBuffalo Meat Fresh, Chilled andFrozen", item4.1.18: Thecarcass
meatshallbefreefrom pathogenic microorganisms andtheirsecretion.
SSA117/1979 "Frozen Chickens", item4.1.13: Salmonella testsshallbecarried outonthe
lots. Iftheresult ispositive inmore thanonesample fromfivesamples, thelotshallberejected and
iftheresult ispositive inonesample orless,thelotshallbeconsidered acceptable.
Question 199
Wenotethat,from atechnical standpoint, a"zero tolerance" standard forallstrains ofsalmonella
isimpossible toattain. Theimposition ofsuchastandard onimported product would raiseserious
national treatment concerns, because ofthelikelihood thatstandard could notbeachieved in
domestic production.
Reply
SSA116/1979 "Beef andBuffalo Meat Fresh, Chilled andFrozen", item4.1.18: Thecarcass
meatshallbefreefrom pathogenic microorganisms andtheirsecretion.
SSA117/1979 "Frozen Chickens", item4.1.13: Salmonella testsshallbecarried outonthe
lots. Iftheresult ispositive inmore thanonesample fromfivesamples, thelotshallberejected and
iftheresult ispositive inonesample orless,thelotshallbeconsidered acceptable.
Question 200
InQuestion 65inWT/ACC/SAU/13/Add. 1,Saudi Arabia stated thattherationale fortheshelf-life
requirement isthatitensures foodproducts willbefitforhuman consumption andthattheywill
be"acceptable totheconsumer". How doesSaudi Arabia define thisinpractical terms? What
specific international standards doesitusetodetermine fitness forhuman consumption?
Reply
Saudi Arabia hadpreviously explained inreply toQuestion 28ofWT/ACC/SAU/13/Rev.1
thatshelflifedeterminations arebased onquality standards andSPSmeasures. TheSPSAgreement
identifies Codex asthereference body forinternational standards, guidelines andrecommendations
relating tofoodproducts. However, theonlyvalidity period prescribed byCodex (andadopted by
Saudi Arabia) isforfrozen fish.Apart from that,Codex onlyspecifies therequirements fordisplay
ofmarking information anddefines shelf-life "Use-by-Date" as:thedatewhich signifies theendof
theestimated period under anystated storage condition afterwhich theproduct probably willnothave
thequality attributes normally expected bytheconsumers. After thisdate, thefoodshould notbe
regarded asmarketable. Theterm"unacceptable totheconsumer" and"unfit forhuman consumption"
respectively correspond to,andareselfevident from theabove definition.WT/ACC/SAU/29
Page57
AllofSaudi Arabia ’sshelflifedeterminations arescientifically based. Alimited number of
relevant studies andinvestigations arecarried outbySaudi Arabia itself. However, Saudi Arabia
researches, evaluates andrelies heavily oninternational andothercountries ’national standards, scientific
studies andreports conducted/issued byspecialized internationally reputable research institutes and
universities, andoninternational scientific references.
Final determination ofshelf lifeismade based onthestudies forwhich "thestated storage
conditions" mostclosely resemble Saudi Arabian conditions. These conditions andtheireffect onthe
parameters ofstorage temperature, temperature fluctuations andrelative humidity havebeenthoroughly
investigated andsurveyed bySaudi Arabia inthereport entitled "Proceedings ofSymposium onthe
Transportation, handling &Storing ofFood Products intheKingdom, PartIandIIdated 26-28
February, 1989". Acopy ofthisreport andalistofscientific references usedbySaudi Arabia are
attached.
Question 201
Could Saudi Arabia bespecific about thescientific basis forrequiring thatimported foodproducts
enter thecountry withone-half oftheir shelf liferemaining?
Reply
Thehalfshelflifeminimum validity ruleisarequirement forthemarketing offoodproducts
thatSaudi Arabia isentitled toregulate inaccordance withGATT Article XIb.
Therulestrikes anequitable balance between:
- exporters ontheonehandallowing them reasonable spare shelflifeexpiry prior toshipment
plusadequate timeforshipping (maximum ofonemonth forseafreight), and;
- importers ontheother hand tofacilitate distribution andmarketing ofeconomical import
quantitiesoftheproduct,takingintoaccountaccessibilitytoallregionsoftheKingdomincluding
remote villages.
Question 202
Saudi Arabia wasasked foradetailed explanation oftheprocess usedindetermining theproper
shelf lifeperiod forparticular product. TheReply indicated thatalldeterminations ofSaudi
shelf lifestandards arescientifically based. Saudi Arabia alsoreferred tofactors andspecific
studies noted inReply 116ofL/7645/Add. 1andReply 81ofWT/ACC/SAU/8. Could Saudi Arabia
indicate precisely which international standards areusedtodetermine proper shelflifestandards?
Reply
AllSaudiArabia’sshelflifedeterminationsarescientificallybased.Alimitednumberofrelevant
studies andinvestigations arecarried outbySaudi Arabia itself. However, Saudi Arabia researches,
evaluates andrelies heavily oninternational andother countries ’national standards, scientific studies
andreports conducted/issued byspecialized internationally reputable research institutes anduniversities,
andinternational scientific references.
Final determination ofshelf lifeismade based onthestudies forwhich "thestated storage
conditions" mostclosely resemble Saudi Arabian conditions. These conditions havebeenthoroughly
investigated andsurveyed bySaudi Arabia inthereport entitled "Proceedings ofSymposium onthe
Transportation, handling &Storing ofFood Products intheKingdom, PartIandIIdated
26-28 February 1989". Alistofabout 50scientific references isattached. SeeAnnex (I)WT/ACC/SAU/29
Page58
Question 203
Saudi Arabia wasasked howitdetermines whether products have become "unacceptable tothe
consumer". Thereply indicated thatfoodbecomes "unacceptable" when itis"unfit forhuman
consumption" based onscientific assessments ofhealth risks. Wewould request more information
onthestandards ormethods thatareusedindetermining health risks.
Reply
TheSaudi Arabian standard forshelflifeoffoodproducts isSSA702/1993 "Expiration Periods
ofFood Products" (same asGulfStandard GS150/1993). Thestandard allows manufacturers touse
oneofthefollowing datemarking options defined byCODEX STAN 1-1985 (Rev1-1991):
"Sell-by-Date", "Date ofMinimum Durability" ("best before"), or"Use-by Date" (Recommended
lastconsumption, expiration date).
Codex defines "Use-by-Date" as"thedatewhich signifies theendoftheestimated period under
anystated storage condition afterwhich theproduct probably willnothavethequality attributes normally
expected bytheconsumers. After thisdate,thefoodshould notberegarded asmarketable". Theterm
"unacceptable totheconsumer" and"unfit forhuman consumption" respectively correspond to,and
areselfevident fromtheabove definition. Saudi Arabia hadpreviously explained inreplytoQuestion 27
ofWT/ACC/SAU/13 thatshelflifedeterminations arebased onquality standards andSPSmeasures.
Thespecific studies thatSaudi Arabia haseither conducted itself orusedasreference takeallthese
factors intoaccount.
Question 204
Saudi Arabia wasasked toexplain howshelf lifedatemarking isemployed toensure product
safety and/or quality during processing, handling, storage, anddistribution. Saudi Arabia
explained what ismeant by"shelf life"andstated thatimported foods have ashorter shelf life
thandomestic foods tocompensate fortravel times. However, Saudi Arabia didnotdirectly answer
thequestion andexplain howshelf lifedatemarking isemployed. Wewould request from the
Saudi Delegation thatitclarifies forushowshelf lifedatemarking isapplied forbothdomestic
andforeign goods?
Reply
Identicalshelflifeexpiryperiodsandmarkingrequirementsareappliedfordomesticandimported
foodproducts onanon-discriminatory basis. However, item4.3ofSSA702requires thathalfthe
shelfliferemain valid ontheproduct attimeofitsentry intothecountry. ThisisnotanSPSissue,
butrather arequirement forthemarketing offoodproducts thatSaudi Arabia isentitled toregulate
inaccordance withGATT Article XI.b.
Thehalfshelflifevalidity rulestrikes anequitable balance between:
- exporters ontheonehandallowing them reasonable spare shelflifeexpiry prior toshipment
plusadequate timeforshipping (maximum ofonemonth forseafreight), and;
- importers ontheother hand tofacilitate distribution andmarketing ofeconomical import
quantitiesoftheproduct,takingintoaccountaccessibilitytoallregionsoftheKingdomincluding
remote villages.WT/ACC/SAU/29
Page59
Question 205
SaudiArabiawasaskedwhetheritintendstoadopttheinternationallyrecognizedCODEXstandard
"best ifusedby". Saudi Arabia referred toReply 125ofL7645/Add. 1.Reply 125noted that
Saudi Arabia isamember oftheCodex Alimentarius Commission. Itcould beassumed, therefore,
thatSaudialreadyusestheinternationallyrecognizedCODEXstandard.CanSaudiArabiaprovide
evidence thatitusestheCODEX standard fordatemarking (i.e., "best ifusedby")? Reply 125
ofL7645/Add. 1explained thatSaudi ’sharsh climate often requires "especially strict standards".
What kindof"especially strict standards" doesSaudi Arabia use,andhowdotheycomply with
CODEX standards?
Reply
Theonlyvalidity period prescribed byCodex (andadopted bySaudi Arabia) isforfrozen fish.
Apart from that,Codex onlydefines shelf-life andspecifies therequirements fordisplay ofmarking
information, (adopted bySaudi Arabia aswell, refertoreply 26above).
TheCodex definition of"Use-by Date" makes provisions for"stated storage conditions". The
study indicated inreply 25above outlines theeffect ofSaudi Arabia ’sharsh handling, storage, and
transportation conditions ontheparameters ofstorage temperature, temperature fluctuations andrelative
humidity critical inthedetermination ofshelflife.Assuch, Saudi Arabia isincompliance withCodex.
Question 206
Inreply toQuestion 29ofWT/ACC/SAU/13/Rev.1, Saudi Arabia hassaidthat"Assessment of
therisks ofencountering distant countries oforigin offoodproducts resulted inconsideration
ofthelongtimeittakes before itiscleared foradmission inSaudi Arabia. Consequently, the
requirement thathalfoftheshelf life". Weunderstand thistomean thattheshelf lifeofagiven
exported product willbehalved inallcases, irrespective ofhowmany months shelflifewasforeseen
bytheproducer oftheproduct originally. Would Saudi Arabia accept toreconsider thismatter
andintroduce alessarbitrary system?
Reply
From yourenquiry itisshown thatthere ismisunderstanding oftherequirement ofhalfshelf
life.Toclearthismisunderstanding,wequotehereinafterclause3.4oftheSaudiStandardSSA702/1993
"Expiration Periods ofFood Products -Part1"which states:
"Without prejudice towhatisstated inSaudi standards foreachfoodproduct, nofoodproducts
shallbereleased ifmore thanhalfoftheirexpiration period forhuman consumption calculated
fromdateofproduction, hasbeenspent before theirarrival totheentry portintheimporting
country."
Thismeans thattheremaining shelf lifeoftheproduct should notbelessthanhalftheoriginal full
shelflifeasaminimum requirement. Inmany cases where afoodproduct isshipped during theearly
stages ofitsshelflife,theremaining shelflifeontheproduct could substantially exceed halftheoriginal
shelflifereaching ashighas90percent.WT/ACC/SAU/29
Page60
STANDARDS
Question 207
Therecent exemption ofGCC members ’from theICCP anditsimplied recognition ofequivalency
ofallGCC members inspection, enforcement, andcompliance torelevant elements ofGCC and/or
SASO standards raise additional questions under Article 4oftheSPSagreement andthe
transparency provisions oftheWTO. Please provide detailed information ontheGCC trade
agreement inrelation totheadoption ofstandards. Specifically, arethemember states obligated
toadopt theGCC standards infullorinpart. Under what circumstances would amember state
choose nottoadopt aGCC standard?
Reply
GCC Members arenotexempted from theICCP.
Article5.4ofregulationsofthe"Standardization&MetrologyOrganizationforGCCCountries"
stipulate thatmandatory GulfStandards areadopted consensus ofallmembers, while voluntary or
guideline standards areadopted bymajority.
Question 208
Inorder toevaluate thelevelofalignment oftheGCC members ’standards tothose established
bySASO, wewould appreciate alistofmember countries whohave officially adopted and
incorporated SASO developed standards, byproduct category, (infullorinpart) intotheirnational
standards.
Reply
AlistofSASO standards which havebeenadopted asGulfStandards andthereby incorporated
asnational standards inother GCC Countries isattached. SeeAnnex III.
Question 209
Please provide specific information ontheevaluation criteria usedtodetermine equivalency in
theinspection, certification andenforcement practices ofeachoftheGCC member countries in
support oftheir ICCP exemption.
Reply
Please seereply 207above.
Question 210
Howcannon-GCC products obtain a"special exemption" from theICCP? HowwillSaudi Arabia
recognize thestandards ofnon-GCC countries asequivalent toSASO established standards?
Reply
Seereply207.Regardingtheequivalencyofstandards,refertoitem7(d)"ApplicableStandards"
ofWT/ACC/SAU/21.WT/ACC/SAU/29
Page61
Question 211
CanSaudi Arabia provide acomparative index ofSASO established standards which relates to
applicable international andforeign country standards found tobeequivalent. Ifyes,please
provide theworking group acopy.
Reply
Seereply 210.Asthedata-base ofequivalency ofstandards issubstantially developed through
Registration, acomparative index willbeprovided bySASO.
Question 212
Wewould urgeSaudi Arabia topublish suchdraft standards inasingle official journal orother
publication thatisavailable tothegeneral public, including interested parties ofwhich theSaudi
authorities maynotbeaware.
Reply
Thiswould bedone.
Question 213
Inwhich circumstances arestandards developed bySASO staffandinwhich circumstances are
theydeveloped bySASO-led "technical committees". Please provide anyrelevant laws, regulations
oradministrative guidelines.
Reply
Inthepast,standards which wereconsidered tobevitalforthelegitimate objectives ofsafety,
health, …etc.andwhich areofconcern toawidespectrum ofinterested parties andeconomic sectors
were referred to"technical committees". However, therecent policy within SASO istorefermost
standards totechnical committees irrespectively.
Acopyofprocedures forthedevelopment ofSASO standards isattached. SeeAnnex IV.
Question 214
Inresponse toQuestion 72ofWT/ACC/SAU/8, Saudi Arabia indicated that, forstandards
developed bya"technical committee", onlyonedraft iscirculated forcomment. Why isthis
procedure different from thatusedwhen thedrafts aredeveloped bySASO staff?
Reply
Allparties concerned withthesubject matter ofthedraftstandard arenormally represented
ontherelevant"technicalcommittees"asactivemembers;theyincludepertinentgovernmental,academic,
industry andtrade sectors. Forthisreason, onlyonedraftcirculation period isnecessary toprovide
adequate opportunity forcomments byotherinterested parties. Incaseofdevelopment ofdraftstandards
bySASO ’stechnical staff, thefirstdraftcirculation period provides theopportunity forcomments
raised byallconcerned parties tobetaken intoconsideration inthepreparation ofthesecond draft.WT/ACC/SAU/29
Page62
Question 215
Arethedrafts developed by"technical committees" published andcirculated inthesame manner
asdrafts thataredeveloped independently bySASO staff? Istheperiod forpublic comment
thesame forbothapproaches?
Reply
Procedures forpublishing andcirculation ofdraftstandards isidentical inbothcases. The
circulation period fordraftstandards developed by"technical committee" isaonetimethree months
period, while fordraftstandards developed bySASO staffisathree months period forfirstdraftplus
aonemonth period forsecond draft.
Question 216
Saudi Arabia wasasked whether itprovides notices totrading partners forradiation examinations.
Itgaveageneral answer thatreferred tostandard drafts issued bytheSASO. IstheSASO legally
obligated tonotify trading partners ofradiation examinations? Could Saudi Arabia provide a
more detailed explanation ofitsradiation methodologies andstandards?
Reply
Legislation asregards themethods fordetecting radiation isstillatthedraftstage. Asforthe
maximum limits ofradiation levels permitted infoodstuffs, regulations setbytheMinisters ofHealth
ofallGulfCountrieshasbeenadoptedbySaudiArabiaasbindinglegislation.TheMinistryofCommerce
assumes theresponsibility fordetecting radiation infoodproducts.
PRIVATIZATION
Question 217
Saudi Arabia wasasked whether certain sectors willbeprivatized, andwhether foreign companies
maybeabletoparticipate inthose privatized sectors onanon-discriminatory basis. Saudi referred
toreplies 5-7,9-11ofWT/ACC/SAU/8, inwhich itgave verygeneral information about the
possibility ofprivatization. Could theSaudi Delegation apprise theWorking Party ofhowplans
forprivatization areprogressing inorder togenerate economic growth andtoensure future
development? Istheparticipation offoreign companies conceivable inthisprivatization? Ifso,
arethere plans toafford foreign companies withthesame treatment granted national companies?
Question 218
Inresponse toQuestion 1ofWT/ACC/SAU/13/Add.1, Saudi Arabia states that,asyetnospecific
privatisation decisions have been taken. When willspecific plans beannounced?
Reply
OnAugust 41997theCouncil ofMinisters issued aResolution stating thegoals ofprivatization
intheKingdom asfollows:
(i) topromote private investments, ensure effective private participation intheeconomy, and
increase private sector share intheGDP;
(ii) expansion ofcitizens share inproductive assets;WT/ACC/SAU/29
Page63
(iii) promotion oflocalandforeign investments;
(iv) creation ofmore jobopportunities forSaudis;
(v) strengtheningthenationaleconomytofacethechallengesaswellastheregionalandinternational
competition resulting from joining theWorld Trade Organization (WTO);
(vi) rationalization ofpublic spending andreduction ofGovernment budget allocations, providing
chances totheprivate sector tofinance andoperate some services;
(vii) increase Government revenues through returns fromitsshare intheoperations transferred to
theprivate sector, thereturns from special rights andselling partofitsshares.
AMinisterial Committee wasestablished todesign astrategic planforprivatization inthe
Kingdom andtoprepare aworking program fortheplanincluding policies related totheparticipation
offoreign companies inprivatization.
TheCommittee isworking ondetails forprivatization ofthefollowing sectors:
- telecommunications;
- utility "power sector";
- ports services.
However, details havenotyetbeenfinalized.
Other sectors potential candidates:
- Saudi Arabian Airlines (SAUDIA);
- water treatment;
- grain silos.
ANTI-DUMPING
Question 219
Saudi Arabia wasasked toelaborate ontheoutcome ofthereview ofthecompatibility ofWTO
obligations andtheLawfortheProtection andEncouragement ofNational Industry. Saudi replied
thatcertain measures ofArticle 7conflict withWTO rules. However, itsuggested thatArticle 7
allows theGovernment thediscretion todetermine thenature ofanyprotective measures, and
committedthegovernmentto"administertheLawinamannerthatconformstoWTOobligations".
Wewould liketorequest clarification asthisappears contradictory tous.Could theKingdom
clarify howtheGovernment ofSaudi Arabia candetermine thenature ofprotective measures,
andadminister theLawinaWTO consistent manner atthesame time? Also, maywegetmore
details onhowtheSaudi Government willensure thatArticle 7ofthelawisadministered ina
WTO consistent manner andifanychanges tothelawareanticipated?
Reply
Asstated inreply toearlier questions, Saudi Arabia willtakeactions onlyinaccordance with
therespective WTO Agreements. Forthatpurpose, itwillenact newlawsoramend existing laws
asappropriate.WT/ACC/SAU/29
Page64
Question 220
Initsreply, Saudi Arabia indicates thatitcould nottakeanti-dumping, countervail, orsafeguard
actions under current legislation. InReply 14ofWT/ACC/SAU/6, Saudi haddescribed a
Committee thatmayprovide customs protection (toamaximum of20percent) intheevent that
adomestic producer isthreatened by"unjust foreign competition duetothelower prices ofthe
foreign products which aresoldinSaudi Arabia". Wewould understand thistypeofaction to
potentially be,ineffect, ananti-dumping orsafeguard measure. Wewould liketoknow thelaw
form which thisCommittee draw itsauthority tolevythiskindofimport relief? Wewould also
seekclarification astowhySaudi Arabia doesnotconsider thistypeofaction tobeananti-dumping
orsafeguard action ascontemplated bytheWTO Agreement onAnti-dumping orSafeguards?
Reply
TheCommittee described inReply 14ofWT/ACC/SAU/6 isaninter-Ministerial Committee
which hasnoauthority toimpose customs protection. Itsauthority isrestricted toreviewing applications
forcustoms protection andtomake recommendations totheCouncil ofMinisters. Itsrecommendations
arenotbinding.
Theauthority toimpose customs protection restssolely withtheCouncil ofMinisters.
Irrespective oftheexisting position, theKingdom ofSaudi Arabia canassure theWorking
Party thatafteraccession totheWTO, itwould takeanyanti-dumping, countervail andsafeguard actions
inaccordance withtheprovisions oftherelevant WTO Agreements.
Question 221
When asked ifitwillconform toWTO obligations intheevent thatitintroduces legislation on
safeguards, anti-dumping, andcountervail measures, Saudi Arabia indicated that"trade remedies
legislation isbeing considered andwillbeconsistent withWTO rules". Wewould liketoknow
ifthere isatimetable inplace fortheimplementing trade remedies legislation? Ifso,wewould
liketoknow thedates when thenewlawsareexpected totakeeffect.
Reply
Thelegislation would beenacted afterSaudi Arabia joinstheWTO. Noprecise timeframe
canbegiven atpresent.
Question 222
Saudi Arabia wasasked foracommitment toreview theLawfortheProtection andEncouragement
ofNationalIndustry(especiallyArticle7)toensurethatitwasconsistentwiththeWTOAgreements
onSafeguards, Anti-dumping, andSubsidies andCountervailing Measures. Saudi indicated that
itdidnotconsider thatArticle 7powers (i.e., theability torestrict orbanlikeforeign products,
toimpose higher customs duties onlikeproducts, ortoprovide financial aidtoanindustrial
establishment) wereappropriate forthetypes ofactions under GATT Articles VIorXIX. Could
theSaudi Delegation provide afurther explanation astowhySaudi Arabia doesnotbelieve that
Article 7powers areappropriate forthetypes ofactions under GATT Articles VIorXIX?WT/ACC/SAU/29
Page65
Reply
GATT Articles VIandXIXandtheAgreements onSafeguards, Anti-Dumping andSubsidies
andCountervailing Measures contain detailed provisions andprocedures which havetobefollowed
before action canbetaken. Article 7oftheLawfortheProtection andEncouragement ofNational
Industry doesnothavecorresponding provisions andprocedures.
Saudi Arabia canassure theWorking Party thatafteraccession totheWTO, itwilltake
safeguard, anti-dumping andcountervail actions onlyinaccordance withtherulesandprocedures of
theWTO Agreements.
Question 223
Wewelcome thecommitment from Saudi Arabia toconform toWTO obligations forfuture
legislation onsafeguards, anti-dumping andcountervailing duties measures (reply toQuestion 43
ofWT/ACC/SAU/13/Add.1). OnArticle 7oftheLawfortheProtection andEncouragement
ofNational Industry, wewould liketoclarify thatourconcern isitslackofconformity withWTO
obligations interms ofthepowers itgives toauthorities torestrict imports andgrant state aids.
Please canSaudi Arabia commit torevise itsexisting legislation tocomply withWTO agreements
onsubsidies, safeguards andanti-dumping.
Reply
Saudi Arabia cangiveanassurance thatafter accession totheWTO, itwilltakeany
anti-dumping,countervailorsafeguardmeasuresstrictlyinaccordancewiththeprovisionsoftherelevant
WTO Agreements. Itwilltakeallmeasures thatarenecessary inthatregard, including WTO-compatible
legislation.
SERVICES
Question 224
Saudi Arabia hasindicated that, forthepurpose oftheForeign Capital Investment Law, notall
services areregarded as"development enterprises". Could Saudi Arabia provide anexhaustive
listofwhat services areconsidered development enterprises?
Reply
Please refertoreply 113inWT/ACC/SAU/13/Add.1
Question 225
Could Saudi Arabia explain theapproval process followed bytheForeign Capital Investment
Committee andinparticular thenature oftheeconomic needs testapplied bytheCommittee and
themanner inwhich itisapplied?
Reply
Please refer toreplies 191,192(a), 192(b) indocument L/7645/Add.1 reply 4(a,band c),
andreply 5indocument WT/ACC/SAU/13.WT/ACC/SAU/29
Page66
With respect tothenature oftheeconomic needs testbeing applied, theForeign Capital
Investment Committee hastoinsure thatthemarket fortheproduct orservice isnotsaturated.
Question 226
Could Saudi Arabia explain whether theForeign Capital Investment Committee setslimits on
thenumber ofcompanies, domestic andforeign, thatcanoperate inagiven sector?
Reply
No,theForeign Capital Investment Committee doesnotsetlimits onthenumber offoreign
companies thatcanoperate inagiven sector. However, theForeign Capital Investment Committee
hastoinsure, when recommending theissuance ofalicense, thatthemarket isnotsaturated.
Question 227
Could Saudi Arabia indicate whether theForeign Capital Investment Committee hastheauthority
toimpose thetypeoflegal entity which must beused byforeign service providers wishing to
establish acommercial presence?
Reply
TheForeign Capital Investment Committee hasnoauthority toimpose thetypeoflegalentity
which maybeusedbyforeign service providers wishing toestablish commercial presence inSaudi
Arabia.
Question 228
With respect totheservices thatarenotconsidered "development enterprises" could Saudi Arabia
explain whether foreign investment isallowed, andifsounder what conditions?
Reply
Yes,itisallowed. Forconditions, please refertoreply 131inWT/ACC/SAU/8 andreply 200
inWT/ACC/SAU/13/Add/1.
Question 229
With respect tocross-border supply ofservices, Saudi Arabia hasindicated thataneconomic
needs testmayormaynotbeapplied depending ontheservice sector concerned. Could Saudi
Arabia provide adetailed listofwhich sectors aresubject toaneconomic needs test?
Reply
Saudi Arabia doesnotapply aneconomic needs testtocross-border supply ofservices. The
earlier reply wasbecause ofamisunderstanding.
Question 230
Could Saudi Arabia indicate what arethenature andcriteria oftheeconomic needs testapplied
tocross-border supply ofservices?WT/ACC/SAU/29
Page67
Reply
There isnoeconomic needs testforcross border supply ofservices.
Question 231
Could Saudi Arabia provide anexhaustive listofpositions thatarereserved forSaudi Nationals
incompanies operating inSaudi Arabia?
Reply
Thelistinparagraph 56ofdocument WT/ACC/SAU/5 isexhaustive.
Question 232
With respect toenhanced telecommunication, Saudi Arabia indicated thatforeign supplier are
permitted tosupply enhanced telecommunication services. However, users must usethepublic
network andonlywiththeauthorization ofthenational telecommunication authorities. Could
Saudi Arabia explain what arethecriteria used bythenational telecommunication authorities
forgranting authorization tousethepublic network?
Reply
Thedelivery ofsuchservices ispartofthegovernment monopoly.
MISCELLANEOUS
Question 233
(Question 45,WT/ACC/SAU/13) Saudi Arabia wasasked tospecify thetime frame forthe
Ministerial Committee ’sexamination ofagricultural issues andWTO commitments. TheKingdom
indicated thatthere theCommittee doesnothave atimetable forthecompletion ofitsreview.
Maywerequest what agricultural issues arecurrently ontheCommittee ’sagenda andhowoften
theCommittee meets toexamine issues these issues?
Reply
TheCommittee reviews theagricultural policy andmeets asoften asnecessary.
Question 234
Saudi Arabia wasasked anumber ofquestions about theprocess ofratification ofitsAccession
Protocol. Forexample, Saudi wasasked about theapplicability oftheWTO toSaudi lawupon
accessions, what would happen intheevent ofinconsistencies between domestic lawsandWTO
obligations theeaseatwhich WTO obligations would beimplemented, andtheposition of
international treaties within Saudi ’shierarchy oflaws. Maywerequested additional information
thatwasalready provided bytheKingdom particularly withregards towhere international treaties
suchastheWTO fitintoSaudi Arabia ’shierarchy oflaws?WT/ACC/SAU/29
Page68
Reply
Please refertoreply 14inWT/ACC/SAU/8 andreply 7inWT/ACC/SAU/13/Add.1, which,
inourview, adequately answer thequestion.
Question 235
(Question 8,WT/ACC/SAU/13.Add.1) Saudi Arabia wasasked whether alegalobligation exists
topublish alllaws, decrees, andadministrative orders relating totrade and/or economic policy
intheUmAl-Qura. Saudi referred toitsReply 269ofL/7645/Add.1 inwhich itnoted thatthe
UmAl-Qura istheofficial publication forthenotification oflaws, regulations, anddecrees. Reply
269alsostated that"Regulations, laws, anddecrees ofconcern totheconcern tothecontracting
parties totheGATT/WTO willnottakeeffect before theyareofficially published intheUm
Al-Qura". InReply 20ofWT/ACC/SAU/13, Saudi Arabia indicated thattheMinistry of
Agriculture andWater andtheMinistry ofHealth donotpublish neworamended regulations
inUmAl-Qura. Could Saudi Arabia clarify what ismeant "regulations, laws, anddecrees of
concern tothecontracting parties totheGATT/WTO" andconfirm whether there isalegal
obligation topublish alllaws, decrees, andadministrative orders?
Reply
Alllaws, decrees andregulations arerequired tobepublished inUmAl-Qura. However,
administrative orders arenotpublished intheUmAl-Qura.
Question 236
(Question 9,WT/ACC/SAU/13.Add.1) Saudi Arabia wasasked whether, andunder what
conditions, decrees, laws, andadministrative orders cantakeeffect before publication. Saudi
replied itcannot givesuchorders effect before publication. Wewould liketoreceive information
onthelaworlawsthatprevent decrees, laws, andadministrative orders totakeeffect before
publication.
Reply
Article 71oftheBasic LawofRulestipulates: "The lawsarepublished intheofficial journal
andareeffective thedaytheyarepublished unless aspecific dateismentioned inthelaw".
Question 237
(Question 10,WT/ACC/SAU/13.Add.1) Saudi Arabia wasasked whether, andunder what
conditions, decrees, laws, andadministrative orders canbeapplied retroactively. Saudi replied
thatitcannot apply suchorders retroactively. Aswiththeprevious question, wewould liketo
receive information onthelaworlawswhich prevent theretroactive application ofdecrees, laws,
andadministrative orders.
Reply
Please refertoreply 236above.WT/ACC/SAU/29
Page69
Question 238
What aretheapplicable rules relative totheholding oftrade fairsandexhibitions intheKingdom
ofSaudi Arabia?
Reply
(i) Parties inSaudi Arabia desiring toholdtradefairsshould obtain authorization fromtheMinistry
ofCommerce bysubmitting anapplication atleastsixmonths prior totheproposed dates ofthefair.
Such parties should beregistered withtheCommercial Registration Department oftheMinistry of
Commerce andshould bemembers ofoneoftheChambers ofCommerce andIndustry inSaudi Arabia.
(ii) Foreign countries desiring toholdtrade fairsorexhibitions inSaudi Arabia should submit
applications through diplomatic channels, sixmonths prior totheproposed dates.
(iii) Foreign companies notbased inSaudi Arabia andnothaving anagent inSaudi Arabia should
submit applications through theEmbassies oftheircountries, atleastsixmonths priortotheproposed
datesofthefair.Those having anagent inSaudi Arabia should submit applications through theiragents.
(iv) Theapplication forholding atrade fairshould givedetails on:dates, place offair,types of
exhibits andobjective ofthefair,names andaddresses ofparticipating organizations, participation
fees,andvisitors ’entrance fee,ifany.
(v) Theduration ofthefairshallnotexceed 15days. Theperiod ofthefairshould besuitably
divided between daysforbusinessmen andofficials anddaysforthegeneral public.
(vi) Thefairmaybeheldatthepremises ofafairscompany, anexhibition center orinthelounge
ofahotel.
(vii) Allpublicity material forthefairandfortheproducts tobeexhibited atthefairshould be
cleared inadvance withtheMinistry ofInformation.
(viii) Goods imported forexhibition atthefairshould becleared withSaudi Customs import duties
onsuchgoods willbepaidasaprovisional deposit. Thedeposit willberefunded afterthegoods are
exported ontheconclusion ofthefair;however, duties payable ongoods soldduring thefairwillbe
deducted from thedeposit.
(ix) Nodutyispayable onimported items distributed asgiftsduring thefairprovided these are
inreasonable quantities andareofnocommercial value.
(x) Materials anditems which areprohibited inSaudi Arabia arenotallowed tobeexhibited in
trade fairs.
Question 239
TheresponsetoQuestion2ofWT/ACC/SAU/13/Add.1doesnotstatewhetherfirmsfromnon-GCC
countries willbepermitted toparticipate inprivatization purchases onanequal footing withfirms
from within theGCC. CanSaudi Arabia confirm thatthere willbeequal treatment?
Reply
Please seereply toquestions 217and218.WT/ACC/SAU/29
Page70
Question 240
Question 127,WT/ACC/SAU/13/Add.1. Duty-free treatment forgoods produced byfirms whose
ownership isnotlessthan51percentbyGCC citizens seems tobeincompatible withArticle XXIV,
andtodiscriminate against foreign ownership. DoesSaudi Arabia intend totakeaction tocomply
withWTO obligations? Ifnot,whynot?
Reply
According toourunderstanding ofArticle XXIV ofGATT, thisprovision doesnotappear
tobeincompatible witheither Article XXIV, orwithanyother provision oftheGATT.
RULES OFORIGIN
Question 241
Weunderstand thatSaudi Arabia hasintroduced newlegislation obliging origin markings tobe
physically printed oncertain textiles products. Thenature ofthese requirements would appear
tobeinviolation ofArticle IXofGATT 1994 andmaywellalsobecontradictory totheTBT
code.
Reply
Anewrequirement wasintroduced inthemiddle of1996 requiring markings oforigin tobe
printed orstamped onallexpensive textile fabrics (piece goods). Thepurpose ofthisrequirement
istoprotect theconsumers against deceptive practices. Atimeofsixmonths wasgiven tomanufacturers
andimporters/exporters toadapt tothisrequirement.
Thisrequirement isapplied onanMFN basis inaccordance withparagraph 1ofArticle IX
oftheGATT.
Manufacturers ofexpensive textiles, forexample British suiting material andFrench Chiffon,
were already formany years following thepractice ofprinting marks oforigin onthefabrics.
Wedonotfindthattherequirement isinconsistent withtheprovisions ofArticle IXofthe
GATT .
Question 242
What aretheexact legal requirements ofthislegislation?
Reply
Therequirement isthatthemark oforigin iseither printed orstamped withindelible material
onallexpensive textile fabrics.WT/ACC/SAU/29
Page71
Question 243
What products arecovered bythese requirements?
Reply
Please refertoreplies 241to242.
TRIPS
Question 244
Itisstated that"useofatrademark withdescriptive terms foralongperiod iftimemayconstitute
anexception totheright conferred byatrademark". Could theGovernment ofSaudi Arabia
bemore explicit andexplain, forexample, definition oflongterm, other conditions tobefulfilled
etc.,andlistconcrete cases, ifany?
Reply
Article 10oftheTrademarks Lawprovides that"thecompetent department oftheMinistry
ofCommerce mayrequest theapplicant tointroduce anychanges tothemark itdeems necessary to
distinguish itfrom other marks ortoexplain itinawaythatprecludes anyconfusion between itand
anyother mark already registered. Also, Article 7oftheImplementation rules stipulates that"The
Trademarks Bureau may, ifthemark contains elements devoid ofanydistinguishing quality, require
removal ofthese elements from themark orexempt them from protection". Therefor, fairuseofa
trademark withdescriptive terms foralongperiod oftimemayconstitute adistinctive character
(secondary meaning) capable todistinguish thismark fromother marks, andmayconsequently make
iteligible forregistration andprotection. Insuchcases, definition ofalongtermdepends onthe
distinctiveness acquired through usewhich could bedifferent from casetocase. There arenoother
conditions tobefulfilled andwedonothaveanyconcrete cases.
Question 245
DoesSaudi Arabian lawrecognize reasons fornotusing atrademark when shown bythetrademark
owner? Ifso,please explain what could bevalid reasons.
Reply
Yes,Article 29oftheTrademarks Lawprovides that"amark’sregistration maybedeleted
…iftheowner doesnotuseitseriously foraperiod offiveyears insuccession, unless theowner
presents areasonable excuse tojustify this". Reasons arenotspecified inthelaw,butanyreasonable
excuse could beavalid reason tojustify non-use ofatrademark, suchasimport restrictions orany
other conditions imposed bygovernments onproducts orservices ofwhich atrademark isregistered.
Question 246
Inthereply toQuestion 171ofWT/ACC/SAU/13/Add.1 (shortcomings withregard toArticle 9
to14oftheTRIPs Agreement), Saudi refers toitsreply toQuestion 161.Thisdoesnot,however,
contain anyinformation about copyright andrelated rights. Please could Saudi Arabia explain
where itbelieves itslawoncopyright andrelated rights doesnotcomply withtherelevant provisions
oftheTRIPs Agreement?WT/ACC/SAU/29
Page72
Reply
TherearesomeshortcomingsintheSaudiCopyrightthatneedsomeverbalmodification,because
thislawwasformed tocomply withtheSaudi Copyright andpublishing affairs, alsothere aresome
articles thatneedchange tocomply withtheTRIPS Agreement, butwecannotmention hereallthe
shortcomings appeared intheregulation untilitissubjected toastudy byspecialized committee.
Here aretheimportant points thatneedtobereviewed soitcancomply withTRIPS
(i) prolonging theduration ofprotection foraudio works andfilms forfiftyyears;
(ii) broadening theprotection toinclude theforeign Intellectual works related withthekingdom
byagreements;
(iii) including thesound recording, films, satellite broadcasting works intheprotection.
Question 247
WillSaudi Arabia confirm that, inaccordance withArticle 14ofTRIPS andArticle 18ofthe
Bern Convention, retroactive protection willbeprovided forsound recordings stillinprotection
inother WTO countries andmade upto50years ago? Ifso,what steps willSaudi Arabia be
taking toimplement andenforce thisandtowhat timetable?
Reply
Theanswer isyes. Please refertoreply No168inWT/ACC/SAU/13/Add.1.
Question 248
WillSaudi Arabia confirm that, inaccordance withArticle 10ofTRIPS, computer programs
shall beprotected asliterary works under theBern Convention, andthatcompilations alsowill
beprotected asintellectual creations? Ifso,what steps willSaudi Arabia betaking toimplement
andenforce thisandtowhat timetable?
Reply
Yes. Because thecomputer software ’saresubject toprotection likeliteral works asstated
inSaudi Copyright Lawact(3). Youcanrefertoreply 121inWT/ACC/SAU/8.
Question 249
Will Saudi Arabia clarify what newlegislative provisions willbeintroduced tocomply with
Article 11ofTRIPS withrespect tocomputer programs, cinematographic andother works?
Reply
Please refertoreplies 161,168and169inWT/ACC/SAU/13/Add.1
Question 250
Could Saudi Arabia outline itscivilandadministrative procedures andremedies?WT/ACC/SAU/29
Page73
Reply
Ageneral outline oftheprocedures andremedies aredescribed inWT/ACC/SAU/5,
paragraph 4.
Question 251
Could Saudi Arabia please explain inmore detail itsborder measures andhowtheycomply with
Articles 51to60oftheTRIPS Agreement (Saudi Arabia states initsreply toQuestion 188of
WT/ACC/SAU/13/Add.1 thattheyare"notsubstantially inconsistent"?
Reply
Saudi Arabia ’sBorder measures areprovided forunder theCustoms Regulations. Comparing
theCustoms Regulation (CR)anditsRules ofImplementation (RI)withArticles 51to60oftheTRIPs
Agreement shows thefollowing:
TRIPS
Agreement
ProvisionsPertinent Customs
Regulations (CR) anditsRules
ofImplementation (RI)Remarks
Article Article Article Text
Article 51 Article 132/3
(RI)Delivery ofthegoods tothe
bearer ofadelivery order
maynotberefused except
byacourt order.
Moreover, theCustoms
Dept. incapacity ofan
implementation authority,
shall comply withthe
notifications regarding the
counterfeit trademarks,
received from thecompetent
agency i.e.theMinistry of
Commerce.
Nocorresponding text
exists.Since thenature oftherequired
procedures arenotelucidated, itis
understood thatthematter islefttothe
discretion ofeach country where itmay
adopt astandard mechanism for
protection oftheintellectual property
based onanorder oftheprecautionary
detention issued bytheBoard of
Grievances. Ingeneral, theperiod often
days specified intheAgreement, for
suspension oftherelease formalities,
shall becomplied with, unless Customs
Dept. receives anotice regarding lodging
acasewithin
thisperiod, otherwise theconsignment
shall bereleased.
Regarding therelease procedure forthe
infringing goods destined forexportation,
itisworth- mentioning thatcounterfeiting
atacommercial level does notexist in
Saudi Arabia. However, theprovision
forexportation procedure inthisArticle
israther optional, notobligatory.WT/ACC/SAU/29
Page74
TRIPS
Agreement
ProvisionsPertinent Customs
Regulations (CR) anditsRules
ofImplementation (RI)Remarks
Article Article Article Text
Ifacourt order isissued for
detention ofanygoods for
anyreason such asdeath of
theowner, dispute over
ownership, etc., thegoods
shall bedelivered onlyafter
theverdict ofthecourt is
issued andproviding the
delivery order issubmitted
bytheshipping company,
andthestorage charges due
according totheRegulations
areassumed bytheperson
adjudged tobetheowner of
thegoods.Customs Dept. shall cooperate withthe
judicial oradministrative authority in
readily recognizing theinfringing goods.
Article 53 Asfarasthesecurity orequivalent
assurance isconcerned, thejudicial or
administrative authority i.e.theMinistry
ofCommerce, shall exercise their
procedures.
Nocorresponding textexists. So,the
provision maybecomplied with.
Article 55 Nocorresponding text
exists.Thenotice inthisarticle means thenotice
regarding lodging alaw-suit. Sothe
Customs Dept. must benotified on
regarding alaw-suit lodged before the10
days period iselapsed, which istaken as
aprovisional measure forprecautionary
detention. Regarding serving anotice to
thedefendant ontheprecautionary
detention, thetrader shall benotified by
theCustoms Dept. Atanappropriate
time. Since theperiod after which the
goods shall bereleased, isspecified here
while itisleftopen intheCustoms legal
texts, soitmaybespontaneously
complied with.
Article 57 Nocorresponding textexists. So,the
provision mayspontaneously becomplied
with. Thecompetent authorities, asis
evident from thetext, mean tobethe
judicial authority oracompetent
administrative authority such asthe
Ministry ofCommerce.WT/ACC/SAU/29
Page75
TRIPS
Agreement
ProvisionsPertinent Customs
Regulations (CR) anditsRules
ofImplementation (RI)Remarks
Article Article Article Text
Article 58 Nocorresponding textexists. So,the
provision maybecomplied with, ifthe
Customs portfounds thatprima facie
evidences ofinfringement areavailable.
Assoon asthedetention order isreceived
bytheCustoms Department, itshall
promptly notify theimporter andright
holder ofthesuspension.
Article 59 34(CR) Thenature ofremedies islefttothe
discretion ofthejudicial authority.
Customs Dept. shall comply with
whatever isforwarded toitfrom them in
thisconnection.
Article 60 Since nocorresponding textexists, this
provision mayspontaneously becomplied
with.
Question 252
IstheKingdom ofSaudi Arabia contemplating tobecome aparty within thenearfuture toany
ofthefollowing treaties administered bytheWorld Intellectual Property Organization?
a. Paris Convention fortheProtection ofIndustrial Property;
b. Berne Convention fortheProtection ofLiterary andArtistic Works;
c. International Convention fortheProtection ofPerformers, Producers ofPhonograms and
Broadcasting Organizations (Rome Convention, 1961).
Reply
Notinthenearfuture.
Question 253
Forpurposes ofArticle 1oftheTrademarks LawoftheKingdom ofSaudi Arabia, whoasbetween
thefollowing parties isdeemed tobethe"owner" ofatrademark?
a. Party A-onewhich hadearlier started using thetrademark inCountry A(regardless
ofregistration incountry A)or,
b. Party B-onewhich, subsequent totheprior useofthetrademark byParty A,usesand
registers thetrademark inCountry B,assuming thatthelawincountry Baccords priority
rights toanentity which firstregisters atrademark.WT/ACC/SAU/29
Page76
Reply
Thequestion doesnotclarify whatareCountries AandB.Presumably these arecountries
other thantheKingdom ofSaudi Arabia.
Forpurposes ofArticle 1oftheTrademark Regulations ofSaudi Arabia, thatpartyisconsidered
theowner ofatrademark which firstregisters thetrademark inSaudi Arabia. However, paragraph 10
ofArticle 1oftheTrademark Regulations provides thatmarks identical toorsimilar tointernationally
known marks eveniftheyarenotregistered intheKingdom willnotberegisterable byaparty other
thantheowner ofthewellknown trademark.
TRIMS
Question 254
Why doestheForeign Capital Investment Committee, rather thantheinvestor, need toensure
thataproject isfinancially viable? Dodomestic investments undergo thesame procedure?
Reply
AsSaudi Arabia adeveloping country anditsindustry isatanearly stage ofdevelopment,
thelicensing ofanewdevelopment project requires insuring thatitcontributes totheeconomic
development goals ofthecountry andthatitisfinancially andeconomically feasible, thusmaximizing
itschances forsuccess.
Thisprocedure isapplied onanational treatment basis.
Question 255
Theresponse toQuestion 113ofWT/ACC/SAU/13/Add.1 doesnotexplain theconditions attached
toinvestment inpetroleum andmining. Please provide details ofthese conditions.
Reply
AspertheSaudi Mining code(available intheSecretariat, Accessions Division, Room 1126,
forconsultation). Thiscodeisunder review.
Question 256
WillSaudi Arabia define market saturation asreferred toinindent (a)ofthereply toQuestion 113,
WT/ACC/SAU/13/Add.1?WT/ACC/SAU/29
Page77
Reply
Bymarket saturation ismeant alevelofdomestic productive capacity oftheproduct towhich
additional investment inproductive capacity willleadtoriskofundue levelofcompetition andproject
failure.
Itissuggested thisreply bereadinthecontext oftheprevious reply about thefinancial viability
oftheproject.
Question 257
Thereply given toQuestion 114ofWT/ACC/SAU/13/Add.1 suggests thatthere isatechnology
transfer requirement forforeign capital. Isthisthecase?
Reply
Aswasmentioned inReply 113(b), WT/ACC/SAU/13/Add.1, the"foreign technical expertise"
termcovers oneorbothofthefollowing:
- technical know-how
- management know-how
depending ofproject/sector needs orrequirements.
Question 258
Question 117(b), WT/ACC/SAU/13/Add.1. Saudi Arabia hasnoplans toextend benefits from
theSaudi Industrial Development Fund toenterprises wholly owned byforeign investors. What
isthejustification forthiswithregard tonational treatment?
Reply
Enterprises wholly owned byforeign investors already enjoy national treatment withrespect
toallindustrial incentives offered tonational orjoint-venture projects, withtheexception oftax
exemption andloans fromtheSaudi Industrial Development Fund. Thepurpose ofnotextending these
twoitems toenterprises wholly owned byforeign investors istoencourage theundertaking of
joint-venture projects withnational investors.WT/ACC/SAU/29
Page78
ATTACHMENT 1
Quarterly Bulletin forAnimal andPoultry Quarantine Diseases andtheCountries They Exist In
Disease Country
Contagious Bovine
PleuropneumoniaKenya, Spain, Tanzania, Central Africa, Guinea, Mali,
Niger, Senegal, Togo, Botswana, Mauritania, Zambia
Bovine BSESpongiform
EncephalopathyBritain, Northern Ireland, Switzerland, France, Portugal,
Canada, Germany, Italy, Republic ofIreland, Holland
FootandMouth Disease Kuwait, Benin, Burkina Faso, Malaysia, Algeria,
Jordan, Turkey, Egypt, Former Yugoslavia Republic of
Macedonia, Serbia andMontenegro, Taiwan, Senegal,
Palestine, Libya, Tajikistan, Tunisia, Zambia, Brazil,
Pakistan, Armenia, Bulgaria, Zimbabwe, Ivory Coast,
Namibia, Ghana, Bahrain, Columbia, Thailand, Togo,
Morocco, Nepal, South Africa, Russia, Azerbaijan,
Paraguay, Ethiopia, Uganda, Albania, Mali, Greece
Rinderpest Ethiopia, Sudan, Kenya, Uganda, Turkey, Oman,
Pakistan, India, Russian Federation, Iran, Mongolia,
Tanzania, Senegal, Ivory Coast
Rabies Spain, Bulgaria, France, Oman, Italy, Malaysia,
Mauritania, Afghanistan, England
Infectious Bovine Rhinotracheitis Finland, Kuwait, Bahrain
Engootic Bovine Leukosis Egypt, Norway
Anthrax Togo, Albania, Lesotho
Bovine Babesiosis Caledonia
Trypanosoiasis South Africa
Paste desPetits Ruminants Central Africa, Palestine, Guinea, Senegal, Gabon
Sheep Pox Palestine, Togo, Algeria, Pakistan, Azerbaijan, Bulgaria,
Greece
Scraipe Palestine, Switzerland, Greece
Screwworm Libya, Mexico, Cuba, Iraq
Blackhead Disease Columbia
Lumpy SkinDisease Zimbabwe, Mozambique, Chad, South Africa, Angola,
Mali, Bahrain, Zaire, Palestine
Crimean-Congo Haemorrhagic
FeverSouth Africa
BlueTongue Palestine, United States, South Africa
Leptospirosis Norway
RiftValley Fever Madagascar, Zambia, Mozambique, EgyptWT/ACC/SAU/29
Page79
Disease Country
Vesicullar Stomatitis Mexico, Panama, Columbia, United States
African Horse Sickness Senegal, South Africa, Spain, Mozambique, Burkina
Faso
Equine Encephato Myelitis United States, Mexico, Venezuela, Columbia
Equine Viral Arteritis United Kingdom
Equine Infectious Anaemia Uruguay
Equine Influenza Columbia, Jordan
Morbillivirus Infection inHorse Australia
Venezuelan Equine
EncephalomyelitisVenezuela, Columbia
Dourine Mexico
Newcastle Disease (N.D:) Northern Ireland, Japan, Canada, Guinea, Malta,
Belgium, Albania, Columbia, Egypt, Korea,
Luxembourg, Pakistan, Italy, United Sates, Portugal,
Holland, Tunisia, Zimbabwe, Cyprus, Namibia,
Mozambique, Austria, Singapore, Tajikistan,
Uzbekistan, South Africa, Switzerland, Sweden,
Azerbaijan, Denmark, Finland
Salmonellosis South Africa
Viral Haemorrhagic Diseases of
RabbitsPalestine, Belgium, Sudan, Britain, Cuba, United
Kingdom, Denmark, Libya, Australia, Ireland, Cyprus
Myxomatosis Uruguay
Avian Influenza Holland, Palestine, Australia, Mexico, South Africa
Duck Virus Hepatitis Malaysia