RESTRICTEDWORLD TRADE
ORGANIZATIONWT/ACC/SAU/44
4 April 2000
(00-1358)
Working Party on the Accession
of the Kingdom of Saudi ArabiaOriginal:  English
ACCESSION OF THE KINGDOM OF SAUDI ARABIA
Additional Questions and Replies
The Ministry of Commerce of the Kingdom of Saudi Arabia has submitted additional replies
to questions with the request that they be circulated to members of the Working Party.  The questions
and replies are reproduced hereunder.
_______________
TABLE OF CONTENTS
Question No. Page No.
III. FRAMEWORK FOR MAKING AND ENFORCING
POLICIES AFFECTING TRADE
1. Power of Executive, Legislative and Judicial Branches of
Government1 – 13 2
IV. POLICIES AFFECTING TRADE IN GOODS
1. Import Regulation(a) Registration Requirements 14 – 19 5
(c) Tariff quotas, tariff exemptions 20 – 22 8
(f) Import Licensing Procedures 23 – 24 9
(h) Customs Valuation 25 9
(m-o) Anti-dumping, countervailing and safeguard regimes 26 – 29 103. Internal Policies Affecting Trade in Goods
(e) State trading practices 30 – 32 11
(l) Government procurement practices 33 12
V. TRADE-RELATED  ASPECTS OF INTELLECTUAL
PROPERTY RIGHTS34 – 35 13
VII. INSTITUTIONAL BASE FOR TRADE AND ECONOMIC
RELATIONS WITH THIRD COUNTRIES
1. Bilateral or plurilateral agreements relating to foreign trade 36 - 46 13
ANNEX I Legislative Process 18
ANNEX II Memorandum on the Board of Grievances 20WT/ACC/SAU/44
Page 2
III. FRAMEWORK FOR MAKI NG AND ENFORCING POLICIES AFFECTING TRADE
1. Power of Executive, Legislative and Judicial Branches of Government
Question 1.  
Transparency.  Article X of the GATT states that all  “laws, regulations,  judicial decisions and
administrative rulings of general applicatio n, made effective by any contracting party,
pertaining to the classification or the valuation of products for customs purposes, or to rates of
duty, taxes or other charges, or to requirements, restrictions, or prohibitions on imports or
exports or on the transfer of payments therefore, or affecting their sale, distribution,
transportation, insurance, wareho using inspection, exhibition, processing, mixing or other use,
shall be published promptly in such a manner as to enable governments and traders to become
acquainted with them”.  Similar provision on services can be found in GATT Article III, and in
other WTO Agreements.
Saudi Arabia has stated that, as a matter of practice, laws, regulations and decrees of concern to
the WTO are published at the time of enactment in the Um al-Qura, the official government
gazette, and will not take effect prior to publication in this organ.  Article 71 of the Basic Law of
Government states that “ Statutes are to be published in the Official Gazette and take effect
from the date of publication unless another date in specified”.
Are there other laws or regulations covering the need to publish governmental decisions,
regulations, laws, decrees, etc,? If so, coul d Saudi Arabia provide the legal citation?
Answer:
Article 71 of the Basic Law of Government makes it compulsory that all statutes be published
in the Official Gazette. Furthermore,  all Laws and Regulations contain a specific provision regarding
the mandatory publication of these Laws or Regulations in the Official Gazette.
Question 2.  
Does the term “statutes” in Article 71 of the Basic Law cover judicial decisions or
administrative rulings or other government ac tions that fall short of being “statutes” as
understood in Saudi Arabia?
Answer:
The term “statutes” covers only Laws, Regula tions,  Implementing regulations, International
agreements, and Concessions.  Article (47) of the Board of Grievances Law provides for the
publications of the Judicial decisions.
Question 3.  
Legislative Implementation.  Saudi Arabia has stated that international agreements are
submitted to the Council of Ministers, then to the Consultative Council in the form ofresolutions, and enacted upon approval of the King. Is this what Saudi Arabia intends to do
with the completed protocol package after its approval by the General Council? Are there any
estimates as to how long such a process might take?WT/ACC/SAU/44
Page 3
Answer:
Yes, this is what Saudi Arabia intends to do with the completed protocol package. It is
difficult to give estimates as to how long such a process might take. A comprehensive note containing
legislative process is attached herewith (Annex I).
Question 4.  
What will be the legal status of the WTO Agreements in Saudi Arabia after it becomes a
member. In other words, will the Agreements automatically supersede existing laws and
regulations?
Answer:
As a general rule, should Saudi Arabia's laws or other acts be found to contradict international
treaties or agreements, the provisions of the international treaties or agreements, such as the WTO,
would apply. It should be noted, however, that like other countries, Saudi Arabia may not use
international treaties to overturn fundamental re ligious/legal principles, such as legalizing the
consumption of alcohol and pork.
Question 5.  
Concerning the enactment of specific WTO prov isions in Saudi Arabia legal framework, we
would appreciate information from the Saudi Arabia delegation as to how it intends to developand submit for legal enactment the various substantive provision of WTO Agreements, e.g.,
licensing requirements, transparency provisions,  repeal or other revision of current policies
inconsistent with the WTO, such as quotas, import bans, etc.
Answer:
To bring its Laws and Regulations into conformity with WTO Agreements, Saudi Arabia is
currently drafting new Laws and amendments to existing Laws in relevance to the various substantive
provisions of the WTO Agreements, such as IPRs, Customs Valuation, SPS, TBT, Import Licensing,
including transparency provisions.
Question 6.  
Description of Judicial Arbitral or Administrati ve Tribunals or Procedures:  Right of Appeal.
Saudi Arabia has stated that in all cases the Ministries and/or Agencies involved have
established internal standing committees of senior officials to review initial administrative
decisions pertaining to licensing, and that decisions of standing committees may be appealed to
the responsible Ministry or Agency head.
Do these “standing committees” have review over other administrative decisions in the
Ministries concerning the WTO provisions? If so, are their decisions in these matters appealable
to the Ministry? Agency head?
Answer:
Yes. All decisions made by these “standing Committees” are appealable to the head of
Ministry or Agency concerned. If approved by the head, these decisions are subject to Appeal before
the Board of Grievances.WT/ACC/SAU/44
Page 4
Question 7.  
Independent Tribunal.  Article VII of the GATT and provisions in other WTO Agreements, e.g.
Licensing, Customs Valuation, GATT and TRIPS, require the right of appeal of administrative
decisions to an independent tribunal, and that the decisions of any such tribunal can, in fact,
govern the actions of the administrative entiti es being reviewed.  In responses to written
questions and from statements made by the Saudi Arabia delegation to the Working Party, we
understand that in certain cases, Saudi Arabia intends to identify that the Board of Grievances
will act as this independent point of appeal.
Can Saudi Arabia confirm that in all cases covered by the WTO provisions, the Board of
Grievances would be the point of judicial appe al from governmental administrative decisions?
If not, could Saudi Arabia please indicate the other relevant institutions?
Answer:
The Board of Grievances is an independent tribunal to which appeals are made from all
governmental administrative decisions, including those in relevance to the WTO provisions in the
future.
Question 8.  
In Saudi Arabia’s view, would the Law on Arbitration be relevant to the review provisions of
Article VII?  If so, please explain the circumstances under which this would be the case?
Answer:
This question needs further clarification. Disputes pertaining to Article VII related to
valuation of customs purposes is under the authority of the standing Committee within the Customs
Department.
Question 9.  
Is the decision of the Board of Grievances bi nding on the government office concerned? Can it
be appealed, e.g. to another body or to the King?
Answer:
Yes, the decisions of the Board of Grievances are binding on the government office
concerned. The decision may be challenged and a ppealed to the Appeal Court (Scrutiny Commission)
within the Board of Grievances, which shall either confirm or reverse appealed decision. In all cases,
the Appeal Commission’s decisions are final and enforceable.
Question 10.  
We understand that in cases that come before the Board of Grievances, its decisions and the
reasons for the decision are made available in writing to the parties of the dispute. Are there
any published regulations or procedures on how the Board of Grievances operates, other thanthe Rules and Procedures before the Board of Grievances already supplied for Working Party
review?  If so, may we have a translated copy?WT/ACC/SAU/44
Page 5
Answer:
No.
Question 11.  
Is the current practice that decisions of the Board are, or can be, distributed more widely? If so,
how and under what circumstances?
Answer:
No.
Question 12.  
Is it the current practice to publish the decisions of the Board relating to issues covered by
WTO provisions, e.g. as provided for in Article X of the GATS and Article III of the GATT?
Can they be referred to in future cases as indicative of the appropriate application of the law or
regulation at issue?
Answer:
In general, cases are decided on the basis of particular circumstances of individual case. To
the extent that the case addresses a specific legal interpretation previously made by the Appeal Court
(Scrutiny Commission), this interpretation is binding  unless overturned by a two-third  majority of
that Commission.
Question 13.  
If Saudi Arabia intends to identify the Board of Grievances as a point of appeal as called for by
the GATT and WTO, we would appreciate a p resentation by Saudi Arabia to the Working
Party, possibly in a separate note or document , describing in a comprehensive way the role of
the Board of Grievances in relation to the vari ous relevant WTO provisions on right of appeal?
Answer:
A comprehensive document related to the role of the Board of Grievances is attached
(Annex II).
IV. POLICIES AFFECTING TRADE IN GOODS
1. Import Regulation(a) Registration Requirements
Question 14.  
Requirements on the right to trade in goods that  have the effect of providing less favorable
treatment for imported goods are inconsistent with  the national treatment provision of Article
III of the GATT.  We wish to explore the nature of commercial agent requirements in Saudi
Arabia in this context.
Commercial Registration.  We have reviewed the information provided by Saudi Arabia to date
on the commercial agency issue in WT/ACC/SAU/4. Saudi Arabia stated that it does not imposeWT/ACC/SAU/44
Page 6
“separate registration requirements on entities engaged in importing”, and that the
requirements for commercial registration are not substantive.
Would Saudi Arabia confirm that “commercial registration” is a separate procedure and
different from registration as a “commercial agent”?
Answer:
Yes.
Question 15.  
Please describes how a firm or individual applies for and obtains commercial registration.
(Note: please include documentation citation for any previous treatment of this issue).
Answer:
In response to the inquiry as to procedures followed in commercial registration, we would like
to advise that they fall into two categories as follows:
I. Sole Proprietorship:
The following steps apply:
(a) To fill in the attached forms specifying th e requirements to be met by the applicants.
(b) Thereafter, applicants are referred to their respective banks to pay a SR 1000
registration fee for a registration valid for five years, for mother companies, and SR500 for subsidiaries.  Then procedures for registration are finalized i.e. registration,
typing,   signatures and issue out of the register applied for.
II. Companies:
The General Directorate of Companies issues the appropriate forms required to draft articles
of incorporation.  Once such forms have been duly prepared, they are checked by theaforementioned authority.  Thereafter applicants are referred to the relevant notary public for
authentication.  Having been authenticated and legalized these documents are published in the
official gazette (Umm Al-Qura) thereafter, the capital stated and provided for is kept and
deposited in the appropriate bank.  Once all such documentation have been duly completed,
the whole package is referred to the commercial registrar which, in turn, issues to applicantscertain forms to be filled in.  These are then forwarded to the respective bank where fees are
paid.  Then come printing, signatures and finally, issuance of the commercial registration.
Question 16.  
Please discuss whether there are “scope of business” limitations or requirements associated with
commercial registration. For example, if a firm scope of business does not initially reflect
importing, can it legally import goods withou t formally amending its scope of business?WT/ACC/SAU/44
Page 7
Answer:
No. There are a “scope of business” requirements associated with commercial registration. A
commercial firm should formally incorporate the ac tivity of importing within its “scope of business”
to be legally eligible to import goods.
Question 17.  
Commercial Agency - WT/ACC/SAU/8.  Saudi Arabia states that “all business enterprises
which are officially licensed and registered to operate in Saudi Arabia may import goods”.
Please provide citations for any laws or reg ulations, other than the Law of Commercial
Agencies and the Implementing Regulation to the Law of Commercial Agencies, that address
the use of commercial agents, e.g. for importing.
Answer:
The Commercial Agencies Law and its Implementing Regulation are the only regulations that
address the use of commercial agents.
Question 18.  
Please confirm that a foreign individual or foreign investment firm with Saudi Arabian
commercial registration, even one without loca l financial participation, may import goods for
consumption or for distribution in Saudi Arabia without using a commercial agent, if this is notthe case, please clarify.
Answer:
The Commercial Agencies Law and the Implementing Regulation do not prevent registered
foreign or national individuals or companies from the right to import goods, even without the channel
of the commercial agent. Clause “Third” of the Amending Law for Commercial Agencies, issued by aRoyal Decree No. M/32 dated 10.8.1400H(24.2.1981), provides that “ The provisions of article II of
clause “Second hereof shall apply to importers even if they are not agents or distributors and shall also
apply to any person who engages in direct sales or sales through an intermediary with a view to
realizing profits…”. (Article II of clause “Second”  obliges the agent to procure the maintenance and
spare parts).
Question 19.  
Article 8 of the “United Economic Agreement Between the Countries of the Gulf Cooperation
Council (the GCC Agreement), provides that GCC governments will grant each others’
nationals the same treatment as is granted to its own citizens, without discrimination, in the
following fields: “ freedom of movement, work and residence, right of ownership, inheritance
and bequest, freedom of exercising economic activity,  and the free movement of capital.”
Concerning commercial agents, neither the Law nor the Implementing Regulations on
commercial agency indicate that GCC nation als are eligible to be commercial agents. Do
citizens of GCC countries have the right to register as commercial agents, per the provisions of
Article 8 of the GCC Agreement, or is this an a rea where they do not have national treatment?WT/ACC/SAU/44
Page 8
Answer:
Article 8 of the Unified Economic Agreement provides the framework for liberalization of
trade in service among GCC countries taking into account the general requirements of Article V of the
GATS. Currently, trade in many sectors and sub-sectors of services has been liberalized and other
service sectors are under process of liberalization including commercial agencies.
(c) Tariff quotas, tariff exemptions
Question 20.  
Saudi Arabia maintains a number of quantitative restrictions, quotas, and bans on imports or
exports and has indicated that where such measu res conflict with WTO provisions it will bring
its practices into line with WTO provisions prior to accession.
In order to facilitate Working Party consideration  of this issue, we would appreciate specific
information from Saudi Arabia on  the restrictions currently in place it intends to alter?
Answer:
A complete list of all existing import restrictions has been prepared and submitted to the
Working Party noting those to be revised, indicating how they will be brought into conformity with
WTO provisions. The Kingdom of Sa udi Arabia would also abolish ban on import of milk and dates.
The Kingdom of Saudi Arabia is ready to enter into the following commitment in the
Working Party report:
“The Kingdom of Saudi Arabia confirmed th at from the date of accession, Saudi Arabia
would not introduce, reintroduce or apply quantitative restrictions on imports, or other non-tariff
measures such as licensing, quotas, bans or other restrictions having equivalent effect that could not
be justified under WTO provisions”.
Question 21.  
It would be useful for Saudi Arabia to provide table with this information, listing the non-tariff
measures to be revised, the method of enactmen t of the changes (e.g., law, regulation, decree),
and a timetable for implementation of the changes?
Answer:
All issues concerning non-tariff measures were discussed in the sixth Working Party meeting.
 It may also be recalled that the Kingdom of Saudi Arabia had submitted action plans giving
detailed information in matrix form of the necessa ry changes with specific timetables. The work on
the legislative front in pursuance of these plans is in an advance stage and draft laws are now being
examined and are at various stages of review before these are presented for enactment.
In the response to Question 36 in WT/ACC/S AU/8 concerning aspects of the Law for the
Protection and Encouragement of National Industry that seemed inconsistent with WTO provisions,e.g. Article 7 which instructs the government to re strict or ban imports that compete with domestic
output, Saudi Arabia stated that the law would be reviewed to ensure its consistency with WTO
commitments of Saudi Arabia.WT/ACC/SAU/44
Page 9
Question 22.  
Could Saudi Arabia indicate if that review has been undertaken, and what is being done to
address the WTO inconsistent aspects of existing legislation?
Answer:
The law for the Protection and Encouragement of National Industry would be amended by the
time of accession. Proposed commitment in the Work ing Party report as contained in the reply to
Question 20 would also cover amending and bringing into conformity of this law with the provisions
of WTO.
(f) Import Licensing Procedures
Question 23.  
Saudi Arabia has provided information on its licensing system for the Working Party, and in
the responses to Questions 14-37 in WTLACC/SAU/ 35, has stated that for many aspects of the
WTO Agreement on Import Licensing Procedures, there is no law or specific administrative
order that implements well established practices, Saudi Arabia has also noted that those wishing
to obtain in formation on licensing criteria must  approach the Ministry granting the licence for
that product.
We believe that implementation of the provisions of the WTO Agreement of Licensing
Procedures in law or other appropriate legal instrument is necessary to ensure transparency
and due process in the administration of these requirements.  These include the time limits,
published availability of criteria and procedures both for enactment and for prior comment,
right of notification if a licence is refused and the right of appeal?
Answer:
Saudi Arabia has submitted an action plan for implementing the WTO Agreement on Import
Licensing in the Working Party and is ready to commit that “Saudi Arabia would implement the WTO
Agreement on Import Licensing Procedures from the date of its accession to the WTO”.
Question 24.  
We seek a proposal from Saudi Arabia on how this might be accomplished?
Answer:
Draft law on Import Licensing has been prepared and is now being examined by the Bureau
of Experts at the Council of Ministers. This  law would be enacted upon the Kingdom of Saudi
Arabia’s accession to WTO.
(h) Customs Valuation
Question 25.  
We have reviewed the materials supplied by Saudi Arabia that legally implement its customs
valuation system.  These are contained in Arti cle 21 of the Customs Regulations and Article 51
of the Implementing Regulation.WT/ACC/SAU/44
Page 10
If there are any additional regulations, circu lars, decrees, etc, other than the customs
Regulations and the Rules for implementation that address these aspects of the Agreement,
please provide them for the review of the Working Party.
Answer:
The draft amendments to the articles of custom s law relating to Customs Valuation have been
prepared and shown informally to WTO and WCO experts. Their comments are being examined by
the Custom Department and Ministry of Finance and National Economy. WTO consistent customs
valuation Law would be presented for enactment after this review is completed.
(m-o) Anti-dumping, countervailing and safeguard regimes
Question 26.  
In response to a number of questions and concerns expressed by the Working Party on “The
Law for the Protection and Encouragement of National Industry” Saudi Arabia stated inresponse to Question 56 in WT/ACC/SAU/6 that this law would be reviewed to insure its
consistency with WOT commitment of Saudi Arabia.
There are a number of provisions of this law that  directly conflict with the provisions of the
WTO, e.g., the mandate that  the Ministry of Trade and Industry make recommendations to
protect local industry by inter alia  “restricting or banning (of) foreign imports which are similar
to the local production”?
Answer:
As stated, the law on Protection and Encourag ement of National Industry would be amended
and brought into conformity with WTO provision by the time of accession.
Question 27.  
We would appreciate a status report on Saudi Arabia’s review, listing the provisions that Saudi
Arabia intends to revise how those revisions wi ll be enacted and a timetable for the revisions?
Answer:
Please see Replies 20, 22 and 25.
Question 28.  
In response to Question 48 in WT/ACC/SAU/35, and in previous documentation, Saudi Arabia
has stated that it does not at present have any legislation/regulations relating to trade remedies
(anti-dumping, countervailing and safeguards).
Has this situation changed?  What are Saudi Arabia’s plans for developing WTO consistent
legal instruments in this regard?
Answer:
The Kingdom of Saudi Arabia has, at present,  no legislation on safeguards, antidumping and
countervailing measures. It is in the Kingdom of Sa udi Arabia’s own interest to develop legislation on
the same. While some work has been done, it would revert to legislate on these issues as soon as workWT/ACC/SAU/44
Page 11
in other areas has been completed. In the meantime, the Kingdom of Saudi Arabia commits itself not
to take any of the above measures until it has implemented WTO consistent legislation for safeguards,
antidumping and countervailing measures.
Question 29.  
If such legal instruments were developed, what form would they take, e.g. would they be enacted
though a Royal Decree approved by the Council of Ministers and the Consultative Council?
Would enactment require the approval of the King?
Answer:
All laws have to go through legislative process, which requires approval by Council of
Ministers and the Consultative Council. The Basic Law of the Government provides, under Article 70
that "Laws, international treaties and agreements, and concessions are promulgated and amended by
Royal Decrees". Please see (Annex I).
3. Internal Policies Affecting Trade in Goods
(e) State trading practices
Question 30.  
Saudi Arabia has indicated in its documentation that it has only two wholly-Government owned
entities that import/export: i.e. Saudi Aram co and GESFMO. We do not have information,
however, on the existence and trading practices of enterprises that are not wholly Government-
owned.  We would appreciate help in better understanding the nature and trading practices of
quasi-governmental entities or private firms with  state sanctioned domestic or international
trading monopolies.
Does Saudi Arabia have any state-sanctioned import or export monopolies that are
administered by enterprises other than GSFM O or Aramco? If so, what are they and what
goods are covered? Does Saudi Arabia designate any firm to conduct international trade in
certain products, exclusively or with other firms?
Answer:
Saudi Arabia’s documents submitted to the WTO indicates that it only has two Government
owned entities that import/export: ie. Saudi Aramco and GSFMO.
Question 31.  
Saudi Arabia has stated that there are state en tities that import goods, but not for resale on
domestic market.  Please list these entities.  Are their imports consumed solely by the firm, or
are any part of them transferred to non-governmental entities?
Answer:
Please refer to the reply to Question 30.WT/ACC/SAU/44
Page 12
Question 32.  
Could we have information on the ownership status, Governmental involvement, and economic
activities of the following firms:
− Saudi Fertilizer Co (SAFCO)
− Saudi Petrochemical Co. (SADAF)
− Saudi  Chevron Petrochemical (SCP)
− Saudi Consolidated Electric Co. (SCECO)
− SABIC
Answer:
The information is as follows:
Company Ownership status (%)
(Government involvement)Economic activities
1 Saudi Fertilizers Co. (SAFCO) 0% Fertilizers Manufacturer
2 Saudi Petrochemical Co.
(SADAF)0% Ethylene Manufacturer
3 Saudi Chevron Petrochemical
(SCP)0% Solvents and Aromatics
Manufacturer
4 Saudi Consolidated Electric Co.
(SCECO)- * Power Services
5 SABIC 70% Petrochemical
Manufacturer
* Note : SCECO is in the final process of Privatization.
(l) Government procurement practices
Question 33.  
Government procurement accounts (GPA) for a major part of Saudi Arabia’s imports. For this
reason, we remain interested in exploring with the Saudi Arabia delegation the benefits of
joining the GPA. In particular, we believe th at the transparency provisions of the Agreement
can be useful to Saudi Arabia in ensuring the least cost/best quality outcome for procurement in
covered agencies.
Has Saudi Arabia reconsidered its earlier oppo sition to approaching the Agreement in the
context of the accession process?
Answer:
The position of the Kingdom of Saudi Arabia is that it would seek observer status on
Government Procurement and would participate in the work of the Working Group on Transparencyin Government Procurement Procedures.WT/ACC/SAU/44
Page 13
V. TRADE RELATED ASPECTS OF INTELLECTUAL PROPERTY RIGHTS
Question 34.  
During bilateral and plurilateral discussions, Working Party members suggested that Saudi
Arabia develop a more detailed Action Plan fo r TRIPS implementation, using the plan outlined
in WT/ACC/SAU/39 for a starting point, that addresses each of the identified deficiencies andany others identified by your experts.   Will Saudi Arabia’s agree to develop such a plan? If so,
when will it be circulated?
In the plan, a specific agency of the Govern ment should be identified as having chief
responsibility for drafting the appropriate legisl ative “fixes”.  The plan should identify those
who need to review the draft for clearance and the steps required for passage and enactment of
the legislation.  Those who will be involved in implementation need to be identified and their
roles described.
Finally, realistic, but rapid deadlines should be established by which the draft, clearance
enactment and implementation are to be completed.
Answer:
The Kingdom of Saudi Arabia has already submitted five Action Plans, including that on
TRIPS and which had been thoroughly discussed in the Sixth Working Party. In the area of TRIPS atremendous amount of work has been done by the responsible Kingdom of Saudi Arabia technical
team. Draft Laws have been prepared and presently been reviewed in consultation with WIPO.
Question 35.  
Such a detailed plan would assist Saudi Arabia’s efforts to comply with the TRIPS Agreement
and inform WTO Members on the progress being made.
We would appreciate clarification of the provisions of Article 10 of Saudi Arabia’s Copyright
Law, which appear to provide for a kind of compulsory licensing through a derogation from the
copyright holder’s exclusive right of reproduction, and without remuneration?
Answer:
Draft law amending existing copyright has been prepared and is being reviewed with
technical support of WIPO. These would take care of the member's concerns on the Kingdom of Saudi
Arabia’s Copyright Law.
VII. INSTITUTIONAL BASE FOR TRADE AND ECONOMIC RELATIONS WITH
THIRD COUNTRIES
1. Bilateral or plurilateral agreements relating to foreign trade
Question 36.  
In comments raised at the first meeting of the working Party, Saudi Arabia was asked to adhere
to the Agreement on Trade in Civil Aircraft, and in particular to adopt a “zero” binding rate on
imports civil aircraft and parts. Such a commitment would provide a secure basis for lower
costs and enhanced competitiveness of Saudi Arab ia’s air services industry, both in its current
status and if it is ever privatized.WT/ACC/SAU/44
Page 14
Would Saudi Arabia consider joining the Civil Ai rcraft Agreement or binding its aircraft and
air craft parts tariffs at “zero”?
Answer:
The Kingdom of Saudi Arabia’s position is that it is not obligatory for WTO members to join
plurilateral agreements, such as Trade in Civil Aircraft. It is not a necessary condition for accession toWTO. Therefore, Saudi Arabia is not considering to  join the Civil Aircraft Agreement or binding its
tariffs in this area at zero. However, duties on aircraft parts are already very low.
Question 37.  
Customs Union/Free-Trade Area Agreements.  We appreciate the information that Saudi
Arabia has provided to the Working Party on its preferential trade arrangements, principally
concerning the Agreement Facilitating and De veloping Trade Exchanges among Arab States
(Arab League Common Market) and the current free trade area among the members of the
Gulf Cooperation Council. We ask for additional  information to help delegations assess the
impact of Saudi Arabia’s preferential trade agreements on the value of the MFN commitments
on market access for goods and services under negotiation in the context of Saudi Arabia’s
WTO accession.
Finalization of common GCC external tariff rates is imminent.Please give a status report on the development and information on non tariff initiatives that
effect trade in goods and services under consideration in the GCC at the present time?
Answer:
The Unified Economic Agreement between GCC member aims at developing, extending and
enhancing their economic ties on solid foundations and for coordinating and standardizing theireconomic, financial and monetary policies, as well as their commercial and industrial legislation and
customs regulation.
Question 38.  
In particular, please indicate the proposed maxi mum tariff level and give information on which
categories of products will be subject to which tariff levels?
Answer:
GCC member states have decided to establ ish a Customs Union starting on 1 March 2005.
Common External Tariff (CET) will be implemented on the same date with 5.5 per cent on necessary
goods and 7.5 per cent on luxury and durable goods. Some foodstuff and school material would be
exempted.
Question 39.  
What other initiatives to furt her liberalize trade in goods and services within the GCC are
under development at this time?WT/ACC/SAU/44
Page 15
Answer:
GCC already have a FTA in goods and has decided to establish a Customs Union as stated
above. Under Article 8 of UEA of the GCC, trade in many sectors and sub-sectors of services have
been liberalized. Please refer to the reply to Question 19.
Question 40.  
We would also appreciate information on development in the creation of a free trade area
within the Arab League States:
Are all members implementing the 10 per cent per year reduction in internal tariff barriers?
Are there any preferential policies in trade in services among members associated with the Arab
League Common Market, based either on the current liberalization efforts of earlier
agreements?
Answer:
Information on Arab League arrangements has already been provided to the Working Party. It
is, however, again stated that Arab League preferences will ultimately disappear when Arab Free-
Trade Area becomes fully operational.
Question 41.  
GCC Provisions in Services.  As indicated in  WT/ACC/SAU/6/Add.2, Article 8 of the “Unified
Economic Agreement Between the Countries of  the Gulf Cooperation Council (the GCC
Agreement) provides that GCC governments will grant each others’ national the same
treatment as is granted to its own citizens, without discrimination, in the following field:
“freedom of movement, work and residence, right of ownership, inheritance and bequest,
freedom of exercising economic activity, and the free movement of capital.”
WT/ACC/SAU/5 states that under Article 8, GCC member countries will agree on rules which
would ensure national treatment for GCC Nati onal, for service activities and that GCC
countries are in the process of implementing the agreement.
What is the status of implementation in services? “What is the scope of preferences for firms
and individuals from GCC countries providing services to the Saudi Arabia market inpractice”?  What timeframe is being considered in the GCC for development of the services
component of Agreement consistent with requirements of GATS Article V?
Answer:
Please refer to the reply to Question 19
Question 42.  
WT/ACC/SAU/6 indicates that GCC national engaged in business in Saudi Arabia are subject
to  the same tax treatment as Saudi Arabian nationals, i.e., they pay the zakat. Are they eligiblefor the tax holidays available to new investment s by firms with more that 25 per cent Saudi
Arabian ownership?WT/ACC/SAU/44
Page 16
Answer:
Since Zakat is a religious tax, no exemptions are possible. Zakat is applied at a flat rate of 2.5
per cent. Zakat is assessed in proportion to equity interest of Saudi and GCC nationals in the
company.
Question 43.  
Are there any restriction on the commitment by Saudi Arabia to permit freedom of exercising
economic activity, except for those noted in response to Question 174 in WT/ACC/SAU/6, other
than in securities trading and in the banking and insurance sectors?
Answer:
Please refer to the reply to Question 19.
Question 44.  
To what extent are GCC nationals restricted from participation in the economic activities listed
in paragraph 60 of WT/ACC/SAU/5: i.e., security underwriting commodity brokerage services,
currency exchange operations, commercial agen cies customs clearance agencies, real estate
agents, land transportation’s and Vivian security?
Answer:
Although, there are limitations on the participation of both foreign and domestic individuals
in providing security underwriting, commodity br okerage services, currency exchange operations,
there were no such limitations on domestic and foreign banks except the requirements to be licensed.
Article 8 of UEA of GCC, national treatment was provided to GCC national in the above activities.
Question 45.  
Please specifies the nature of any other existing restrictions or requirements on GCC national
economic activities in Saudi Arabia?
Answer:
Please refer to the reply to Question 19.
Question 46.  
GCC Provisions for Goods.  Article 3 of the “Unified Economic Agreement Between the
Countries of the Gulf Cooperation Council (the GCC Agreement) states that “For products of
national origin to qualify as national manufactu red products (note: to receive duty free tariff
treatment in trade among GCC members. End no te). The value added ensuing from their
production in Member States shall not be less th an 40 per cent of their final value as at the
termination of the production phase. In additi on Member State citizens’ share in the ownership
of the producing plant shall not be less than 51 per cent.
Why do the rules of origin for the GCC require that in order to qualify for GCC tariff
treatment, goods must not only be certified as  having at least 40 per cent GCC content, but as
being produced by firms with at least 51 per cent GCC ownership? Is foreign-funded direct
investment in the manufacturing sector considered less “local” than domestically owned firms?WT/ACC/SAU/44
Page 17
Answer:
The rational behind these rules of origin for GCC is based on desire that the maximum benefit
of the preferences goes to GCC nationals. It also aims at the prevention of circumvention of these
GCC preferences by non-GCC nationals.
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ANNEX I
Legislative Process
In the Kingdom of Saudi Arabia the term “regulatory authority” is used in lieu of the term “
legislative authority”. The Basic Law of Government provides, under Article (67) that “ the regulatory
authority lays down laws and regulations to meet the in terests of the state or remove what is bad in its
affairs,  in accordance with the Islamic Shari’ah. The authority exercises its functions in accordance
with this law and the laws pertaining to the C ouncil of Ministers and the Consultative Council ”.
The regulatory authority entrusted with the en actment of regulations and laws is the domain
of the Council of Ministers which establishes the prerogatives of the Council regarding internal and
external policies, fiscal, economic, educational defense and all other public affairs.  Statutes, however,
are discharged in a manner that does not contradict the Qura’an or the Sunna.
The Council of Ministers, whose head is the Ki ng, is also the direct executive authority.
Promulgation of regulations and laws passes through various stages as follows:
Submission of Drafts:
A statute is drafted and submitted to the regulatory authority (i.e. the Council of Ministers).
Members of the regulatory authority and members of the executive authority (Government)
may submit drafts.
As per the law of the Council of Ministers, any Council member may table draft laws in
relation to matters under his authority for adoption by the Council of Ministers. Any member
may also submit any draft discussion of which he deems appropriate. Such a draft may bedebated, subject to the approval of the Premier.
Under the law of the Consultative Council an y ten members thereof may submit for approval
by the Council new draft laws, or existing law of amendment. Any such draft law however
should be first presented to the head of the Cons ultative Council who in turn refers the draft to
the King for consideration.
Once the draft law is initially accepted, and regardless of its original initiator, it is referred to
competent bodies under the Council of Ministers, where it is reviewed by the General
Committee and Bureau of Experts and findings and comments are reported. After approval of
the draft proposal of the Consultative Council, it has become necessary that draft law be
referred to the Council for review and comments. Once the draft law has been reviewed andexamined in compliance with the above procedure, the bill is then, as amended, corrected or
revised, returned again to the Council of Ministers to start the second step of the legislative
process.
Voting Stage:
This second stage of the legislative process involves presentation of draft law for approval to
the Council of Ministers in its capacity as the executive authority. In a closed session the draft
law is discussed and voted on article by article. Such a process takes place in the presence of
the Minister concerned.  The quorum is established at the meeting of the Council of Ministersby a two-thirds presence. The decision taken is considered valid by a majority of votes.  In
case of parity of votes, the vote of the Chair will be the casting vote.  The Council may be
convened if half of the members at least are present, in cases deemed exceptional in the view
of the Chair. In this case, however, decisions are not adopted by absolute majority of votesWT/ACC/SAU/44
Page 19
but rather by qualified majority of two thir ds of members who are present. Upon adoption of
the decision, the Council’s mission is completed and another legislative procedure begins.
This phase involves the King’s approval of the proposed draft law, thus making it a full-
fledged law.
Promulgation:
This is the stage where the new law becomes an integral part of the law system in the
Kingdom. The King directs members of the executive authority to put the new law into force.
The Basic Law of the Government provides, under Article (70) that “ Laws, international
treaties and agreements, and concessions are promulgated and amended by Royal decrees ”.
Publication:
Article seventy-one (71) of the Basic Law of Government and Article (23) of the Council of
Ministers Law, provide that “ statutes are to be published in the official gazette and take effect
from the date of publication unless another date is specified ”.WT/ACC/SAU/44
Page 20
ANNEX II
Memorandum on the Board of Grievances
1. Judicial  jurisdiction of the Board.
2. Board's Judiciary divisions and Jurisdiction thereof.
3. Procedure of Appeal before the Board against initial governmental Administrative
Decisions, Render of Judgments and right of Appeal.
4. Publication of Judgments.
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1. Judicial Jurisdiction of the Board.
Article One of the Board of Grievances Law promulgated by the Royal Decree No. M/51
dated 17/7/1402H provides that the Board of Grievances is an independent administrative judicial
authority directly reporting to H.M. the King. It is an independent judicial tribunal presided over by a
Minister-level Chairman who is directly responsib le to H.M. the King and who is appointed by a
Royal Order.
Members of the Board are judges whose appointment and promotions is as per procedures set
for other judiciary appointments, and according to  Article (17) of the Bo ard of Grievances Law.
The Board's Jurisdictions
In accordance with Article (8) of the Board's Law, the Board's jurisdiction is the following:
(a) Appeals against all administrative decisions  of Government Departments and Government
officials; causes of appeal include lack of jurisdiction, defect in formalities, non-conformity
with laws and regulations, faulty application or  misinterpretation thereof, or misuse of power.
The reasons for appeals al so include rejection or reluctance on the part of the AdministrativeAuthority concerned to take a decision it should have taken by virtue of established rules and
regulations.
(b) Actions related to rights established in the Civil Services Laws, pension affairs of Public
Employees and workers, bodies of public juridical personalities or heirs thereof.
(c) Actions for indemnification filed by persons concerned against Government or independent
public juridical personalities for actions committed thereby.
(d) Actions filed by persons concerned in disputes over contracts to which the Government is a
party.
(e) Disciplinary actions against public employees filed by the Surveillance and Investigation
Body.
(f) Penal or criminal actions against persons accused of forgery or falsification under applicable
laws and bribery prevention regulation and crimes set down in  the Royal Decree No. 43 of
29/11/1377H, and crimes provided for under the law governing the use of public finance
promulgated by the Royal Decree No. 77 dated 23/10/1395H, and penal or criminal actionsWT/ACC/SAU/44
Page 21
filed against persons accused of perpetrating a crime or offence set down in applicable laws or
regulations, if the Board is so ordered by the Prime Minister.
(g) Applications received to enforce foreign judgments or decisions.
(h) Actions duly covered by the Board's jurisdictions, including but not limited to claims relating
to commercial disputes and intellectual property rights. Article (59) of the Trademarks Law
provides that "the Board of Grievances shall decide on all penal civil actions as well as
disputes arising form implementation of the Trademarks Law and shall apply punishments
and penalties set for violation thereof".
In the area of Patents, Article (55) of the Patents Law provides that the Board of Grievances
shall review those grievances filed against decisions of the Committee referred to under Article (48)
thereof charged with consideration of disputes and appeals against patent-related decisions, as well as
of penal actions in conjunction with violations of rules and provisions of the Patents Law.
       In the area of Copyrights, the Board is responsible for reviewing of appeals against decisions
made under provisions of Articles 10, 11 and 18 of the Copyrights Protection Law.
2. The Board's Judiciary Divisions and Jurisdiction thereof:
Article (6) of the Board's Law provides that the Board shall exercise its powers through
judiciary divisions, the number, constitution and precise jurisdiction of such divisions shall be decidedby the Board's Chairman. The Board now has 79 judiciary divisions based in Riyadh, Jeddah,
Dammam and Abha.
A. Divisions of first instance.
(a)  Administrative Divisions:
A total number of nine divisions which  are concerned with settlement of
administrative cases. These circuits are referred to as Administrative divisions. Five
are in the headquarters in Riyadh, two in Jeddah, one in Dammam and one in Abha.
(b)  Penal Divisions:
These divisions have jurisdiction over settlement of penal actions, whether they are
filed by the Supervision and Investigation Body, or by the public prosecution. Their
scope also covers claims and individual grievances against penal decisions made by
administrative authorities in implementation of certain Laws and Regulations. Theactual number of these are nine penal divisions, four of which are located in Riyadh,
three in Jeddah branch, one in Dammam and one in Abha branch.
(c)  Disciplinary Divisions:
These divisions have jurisdiction over settlement of disciplinary actions; these are
four in number: One in Riyadh, one in Jeddah branch, one in Dammam and one in
Abha.
(d)  Commercial Divisions:
These are concerned  with settlement of co mmercial disputes, including those related
to Intellectual Property Rights. They are twelve in number: five in Riyadh, four in
Jeddah, two in Dammam and one in Abha branch.WT/ACC/SAU/44
Page 22
(e)  Sub-divisions:
These are concerned with settlement of minor actions, i.e. consideration of excuses
provided as legal obstructive factors justifying delayed claims against public treasury,claims for enforcement of foreign judgments within the Kingdom, and claims of
rights established under the Civil Services and Pension regulations. They are 40 in
number: 16 in Riyadh, 8 in Jeddah branch, 8 in Dammam and 8 in Abha.
B.  Scrutiny Commissions (Appellate Courts) :
     These Commissions have jurisdiction to hear appeals against the decisions of the Divisions of
First Instance mentioned at 'A' above. Deci sions of Scrutiny Commissions are final and
enforceable.
Scrutiny Commissions are five in number in Riyadh. Each Commission is composed of three
judges.
3. Procedures for Appeal against Administrative Decisions before the Board of Grievances,
Render of Judgments and right of Appeal:
Appeal against administrative decisions to the Board should be made within 60 days from the
notification/reception date by the Appellant of the final decision of an administrative authority.
The division to which the case is referred shall initially consider acceptability of the case from
a formal point of view i.e. ensure that it is lodg ed within the timeframe set for appeal. If formalities
are met, a hearing date is set for both parties to attend the hearing of the case. Once the proceedingsand the pleadings are completed, the concerned division pronounces its judgment in a public session.
The decision may be challenged and appealed to the "Scrutiny Commission" within 30 days
from the reception date of the decision. The Scrutiny Commission shall either confirm or reverse
appealed decision.
All cases considered by the Scrutiny Commission should be decided upon after hearing of all
parties to the dispute, and in all cases the Commission's decision shall be final and enforceable.
It is clear then that judgment in the Board is a two-tier process: decision is initially made
within the framework of the divisions of first instance, then comes the appeal process. Sessions are
public, and each party to the lawsuit may have access to an adv. No fees are incurred and litigationfacilities are available gratis.
4. Publication of Decisions by the Board:
Article (47) of the Board of Grievances Law provides for the publications of the Judicial
decisions. The Board of Grievances had published decisions at large.
__________