WORLD TRADE
ORGANIZATIONS/L/64
17 December 1998
(98-5140)
Trade in Services
DISCIPLINES ON DOMESTIC REGULATION
IN THE ACCOUNTANCY SECTOR
Adopted by the Council for Trade in Services on 14 December 1998
I. OBJECTIVES
1. Having regard to the Ministerial Decision on Professional Services, Members have agreed to
the following disciplines elaborating upon the provisions of the GATS relating to domestic regulationof the sector.  The purpose of these disciplines is to facilitate trade in accountancy services by
ensuring that domestic regulations affecting trade in accountancy services meet the requirements of
Article VI:4 of the GATS.  The disciplines therefore do not address measures subject to scheduling
under Articles XVI and XVII of the GATS, which restrict access to the domestic market or limit the
application of national treatment to foreign suppliers.  Such measures are addressed in the GATSthrough the negotiation and scheduling of specific commitments.
II. GENERAL PROVISIONS
2. Members shall ensure that measures not subject to scheduling under Articles XVI or XVII of
the GATS,
1 relating to licensing requirements and procedures, technical standards and qualification
requirements and procedures are not prepared, adopted or applied with a view to or with the effect of
creating unnecessary barriers to trade in accountancy services.  For this purpose, Members shallensure that such measures are not more trade-restrict ive than necessary to fulfil a legitimate objective.
Legitimate objectives are, inter alia , the protection of consumers (which includes all users of
accounting services and the public generally), the quality of the service, professional competence, and
the integrity of the profession.
III. TRANSPARENCY
3. Members shall make publicly available, including through the enquiry and contact points
established under Articles III and IV of the GATS, the names and addresses of competent authorities
(i.e. governmental or non-governmental entities res ponsible for the licensing of professionals or firms,
or accounting regulations).
                                                     
1 The text of GATS Articles XVI and XVII is reproduced in an appendix to this documentS/L/64
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4. Members shall make publicly available, or shall ensure that their competent authorities make
publicly available, including through the enquiry and contact points:
(a) where applicable, information describing the activities and professional titles which
are regulated or which must comply with specific technical standards;
(b) requirements and procedures to obtain, renew or retain any licences or professional
qualifications and the competent authorities' monitoring arrangements for ensuring
compliance;
(c) information on technical standards;  and
(d) upon request, confirmation that a particular professional or firm is licensed to practise
within their jurisdiction.
5. Members shall inform another Member, upon request, of the rationale behind domestic
regulatory measures in the accountancy sector, in re lation to legitimate objectives as referred to in
paragraph 2.
6. When introducing measures which significantly affect trade in accountancy services,
Members shall endeavour to provide opportunity for comment, and give consideration to such
comments, before adoption.
7. Details of procedures for the review of administrative decisions, as provided for by
Article VI:2 of the GATS, shall be made public, including the prescribed time-limits, if any, for
requesting such a review.
IV. LICENSING REQUIREMENTS
8. Licensing requirements (i.e. the substantive requirements, other than qualification
requirements, to be satisfied in order to obtain or renew an authorization to practice) shall be pre-
established, publicly available and objective.
9. Where residency requirements not subject to scheduling under Article XVII of the GATS
exist, Members shall consider whether less trade restrictive means could be employed to achieve the
purposes for which these requirements were set, taking into account costs and local conditions.
10. Where membership of a professional organisation is required, in order to fulfil a legitimate
objective in accordance with paragraph 2, Members shall ensure that the terms for membership are
reasonable, and do not include conditions or pre-conditions unrelated to the fulfilment of such an
objective.  Where membership of a professional organization is required as a prior condition for
application for a licence (i.e. an authorization to practice), the period of membership imposed before
the application may be submitted shall be kept to a minimum.
11. Members shall ensure that the use of firm names is not restricted, save in fulfilment of a
legitimate objective.
12. Members shall ensure that requirements regarding professional indemnity insurance for
foreign applicants take into account any existing insu rance coverage, in so far as it covers activities in
its territory or the relevant jurisdiction in its territory and is consistent with the legislation of the host
Member.S/L/64
Page 3
13. Fees charged by the competent authorities shall reflect the administrative costs involved, and
shall not represent an impediment in themselves to practising the relevant activity. This shall not
preclude the recovery of any additional costs of verification of information, processing and
examinations.  A concessional fee for applicants from developing countries may be considered.
V. LICENSING PROCEDURES
14. Licensing procedures (i.e. the procedures to be followed for the submission and processing of
an application for an authorization to practise) shall be pre-established, publicly available and
objective, and shall not in themselves constitute a restriction on the supply of the service.
15. Application procedures and the related documentation shall be not more burdensome than
necessary to ensure that applicants fulfil qualification and licensing requirements.  For example,
competent authorities shall not require more documen ts than are strictly necessary for the purpose of
licensing, and shall not impose unreasonable requirements regarding the format of documentation.
Where minor errors are made in the completion of applications, applicants shall be given the
opportunity to correct them.  The establishment of the authenticity of documents shall be sought
through the least burdensome procedure and, wherever possible, authenticated copies should be
accepted in place of original documents.
16. Members shall ensure that the receipt of an application is acknowledged promptly by the
competent authority, and that applicants are in formed without undue delay in cases where the
application is incomplete.  The competent author ity shall inform the applicant of the decision
concerning the completed application within a reasonable time after receipt, in principle within six
months, separate from any periods in respect of qualification procedures referred to below.
17. On request, an unsuccessful applicant shall be informed of the reasons for rejection of the
application.  An applicant shall be permitted, within reasonable limits, to resubmit applications for
licensing.
18. A licence, once granted, shall enter into effect immediately, in accordance with the terms and
conditions specified therein.
VI. QUALIFICATION REQUIREMENTS
19. A Member shall ensure that its competent authorities take account of qualifications acquired
in the territory of another Member, on the basis of equivalency of education, experience and/or
examination requirements.
20. The scope of examinations and of any other qualification requirements shall be limited to
subjects relevant to the activities for which authorization is sought.  Qualification requirements mayinclude education, examinations, practical training, experience and language skills.
21. Members note the role which mutual recognition agreements can play in facilitating the
process of verification of qualifications and/ or in establishing equivalency of education.
VII. QUALIFICATION PROCEDURES
22. Verification of an applicant's qualifications acquired in the territory of another Member shall
take place within a reasonable time-frame, in principle within six months and, where applicants'S/L/64
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qualifications fall short of requirements, shall result in a decision which identifies additional
qualifications, if any, to be acquired by the applicant.
23. Examinations shall be scheduled at reasonably frequent intervals, in principle at least once a
year, and shall be open for all eligible applicants, including foreign and foreign-qualified applicants.
Applicants shall be allowed a reasonable period for the submission of applications.  Fees charged bythe competent authorities shall reflect the administrative costs involved, and shall not represent an
impediment in themselves to practising the relevant activity.  This shall not preclude the recovery of
any additional costs of verification of informati on, processing and examinations.  A concessional fee
for applicants from developing countries may be considered.
24. Residency requirements not subject to scheduling under Article XVII of the GATS shall not
be required for sitting examinations.
VIII.  TECHNICAL STANDARDS
25. Members shall ensure that measures relating to technical standards are prepared, adopted and
applied only to fulfil legitimate objectives.
26. In determining whether a measure is in conformity with the obligations under paragraph 2,
account shall be taken of internationally recognized standards of relevant international organizations
2
applied by that Member.
                                                     
2 The term "relevant international organizations" refers to international bodies whose membership is
open to the relevant bodies of at least all Members of the WTO.S/L/64
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APPENDIX
For the purpose of clarity, the text of GATS Articles XVI and XVII is reproduced below.
Article XVI
Market Access
1. With respect to market access through the modes of supply identified in Article I, each
Member shall accord services and service suppliers of any other Member treatment no less favourable
than that provided for under the terms, limitati ons and conditions agreed and specified in its
Schedule.3
2. In sectors where market-access commitments are undertaken, the measures which a Membershall not maintain or adopt either on the basis of a regional subdivision or on the basis of its entire
territory, unless otherwise specified in its Schedule, are defined as:
(a) limitations on the number of service suppliers whether in the form of numerical
quotas, monopolies, exclusive service suppliers or the requirements of an economic
needs test;
(b) limitations on the total value of service transactions or assets in the form of numerical
quotas or the requirement of an economic needs test;
(c) limitations on the total number of service operations or on the total quantity of service
output expressed in terms of designated numerical units in the form of quotas or the
requirement of an economic needs test;
4
(d) limitations on the total number of natural persons that may be employed in a
particular service sector or that a service supplier may employ and who are necessaryfor, and directly related to, the supply of a specific service in the form of numerical
quotas or the requirement of an economic needs test;
(e) measures which restrict or require specific types of legal entity or joint venture
through which a service supplier may supply a service;  and
(f) limitations on the participation of foreign capital in terms of maximum percentage
limit on foreign share-holding or the total value of individual or aggregate foreign
investment.
                                                     
3 If a Member undertakes a market-access commitment in relation to the supply of a service through the
mode of supply referred to in subparagraph 2(a) of Article I and if the cross-border movement of capital is anessential part of the service itself,  that Member is thereby committed to allow such movement of capital.  If aMember undertakes a market-access commitment in relation to the supply of a service through the mode ofsupply referred to in subparagraph 2(c) of Article I, it is thereby committed to allow related transfers of capital
into its territory.
4 Subparagraph 2(c) does not cover measures of a Member which limit inputs for the supply of
services.S/L/64
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Article XVII
National Treatment
1. In the sectors inscribed in its Schedule, and subject to any conditions and qualifications set
out therein, each Member shall accord to services and service suppliers of any other Member, in
respect of all measures affecting the supply of services, treatment no less favourable than that it
accords to its own like services and service suppliers.5
2. A Member may meet the requirement of paragraph 1 by according to services and service
suppliers of any other Member, either formally iden tical treatment or formally different treatment to
that it accords to its own like services and service suppliers.
3. Formally identical or formally different treatm ent shall be considered to be less favourable if
it modifies the conditions of competition in favour of services or service suppliers of the Member
compared to like services or service suppliers of any other  Member.
__________
                                                     
5 Specific commitments assumed under this Article shall not be construed to require any Member to
compensate for any inherent competitive disadvantages which result from the foreign character of the relevant
services or service supplies.