UNITED NATIONS CONFERENCE  
ON TRADE AND EMPLOYMENT  
 
HELD AT  
HAVANA, CUBA  
FROM NOVEMBER 21, 1947, TO MARCH 24, 1948  
 
_______________  
 
 
FINAL ACT  
AND  
RELATED DOCUMENTS  
 
 
 
 
 
 
 
 
INTERIM COMMISSION FOR THE  
INTERNATIONAL TRADE ORGANIZATION  
 
 
 
LAKE SUCCESS, NEW YORK  
 
APRIL, 1948 
  - 2 - 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 The present edition of the Final Act and Related Documents has been reproduced from the text 
of the signature copy and is identical with that contained in United Nations document  E/Conf. 2/78.  
This edition has been issued in larger format in order to faci litate its use by members of the Interim 
Commission.   - 3 - 
 
 
 
 
 
 
 
 
FINAL ACT  
 
OF THE  
 
UNITED NATIONS CONFERENCE  
 
ON TRADE AND EMPLOYMENT   - 4 - 
 
 
 
 
 
 
 
TABLE OF CONTENTS  
 
           Page  
 
I.   Final Act of the United Nations Conference on Trade and Employment   VII 
II.  Havana Charter for an International Trade Organization, including Annexes     9 
III.   Resolutions adopted by the Conference       117  - 5 - 
 
FINAL ACT OF THE UNITED NATIONS CONFERENCE 
ON TRADE AND EMPLOYMENT 
 
 
 The Economic and Social Council of the United Nations, by a resolution dated 
February 18, 1946, resolved to call an International Conference on Trade and Employment for the 
purpose of promoting the expansion of the production, exchange and consumption of goods. 
 
 The Conference, which met at Havana on November 21, 1947, and ended on March 24, 1948, 
drew up the Havana Charter for an International Trade Organization to be submitted to the Governments 
represented.  The text of the Ch arter in the English and French languages is annexed hereto and is 
hereby authenticated.  The authentic text of the Charter in the Chinese, Russian and Spanish languages 
will be established by the Interim Commission of the International Trade Organization, in accordance 
with the procedure approved by the Conference.  
 
 There are also annexed to this Final Act a resolution of the Conference establishing an Interim 
Commission of the International Trade Organization and the other resolutions of the Conference.  
 
 This Final Act and the documents annexed shall be deposited with the Secretary- General of the 
United Nations, who will send certified copies to each of the Governments represented at the 
Conference.  
 
 IN WITNESS WHEREOF, the duly authorized representativ es of their Governments had 
subscribed their names below. 
 
 DONE at Havana, this twenty -fourth day of March, one thousand nine hundred and forty- eight, 
in a single copy in the Chinese, English, French, Russian and Spanish languages.  
 
For Afghanistan:  
 A. HOSAYN AZIZ  
 
For Australia:  
 H. C. COOMBS  
 
For the Republic of Austria:  
 MATSCH  
 
For the Kingdom of Belgium:  
 M. SUETENS  
 
For Bolivia:  
 G. GUTIÉRREZ V. M.  
 
For Brazil:  
 A. DE VILHENA FERREIRA 
 BRACA  
 
For the Union of Burma:  
 M. MYAT TUN   
 
For Canada:  
 L. D. WILGRESS  
 
For Ceylon:  
 B. MAHADEVA  
 
For Chile:  
 W . MÜLLER  
 L. F. GARCIA OLDINI  
  
For China:  
 WUNSZ KING  
 
For Colombia:  
 F. LEQUERICA VÉLEZ  
 
For Costa Rica:  
 V. M. DE LA GUARDIA  
  - 6 - 
 
For Cuba:  
 GUSTAVO GUTIÉRREZ  
 
For Czechoslovakia:  
 Z. AUGENTHALER  
 
For Denmark:  
 E. WAERUM  
 
For the Dominican Republic:  
 LUIS JULIÁN P.  
 
For Eucador:  
 E. CHIRIBOGA  
 
For Egypt:  
 ANIS AZER  
 
For El Salvador:  
 R. JIMÉNEZ C.  
 
For France:  
 PHILIPPE GROUSSET  
 
For Greece:  
 ATH. POLITIS  
 
For Guatemala:  
 DR. ANGEL ARTURO RIVERA  
 
For Haiti:  
 F. MORISSEAU LEROY  
 
For India:  
 HARDIT SINGH MALIK  
 
For the Republic of Indonesia:  
 A. K. GANI  
 
For Iran:  
 NASROLLAH ENTEZAM  
 
For Iraq:  
 S. HAIDER  
 A. JADDOU  
 
For Ireland:  
 J. C. B. MacCARTHY  
 
For the Republic of Italy:  
 CARMELO LA ROSA   
For Lebanon:  
 GEORGES HAKIM  
 
For Liberia:  
 JOHN A. DUNAWAY  
 
For the Grand Duchy of Luxembourg:  
 J. WOULBROUN  
 
For Mexico:  
 R. BETETA  
 C. NOVOA  
 
For the Kingdom of the Netherlands:  
 A. B. SPEEKENBRINK  
 
For New Zealand:  
 W. NASH  
 J. P. D. JOHNSEN  
 
For Nicaragua:  
 J. SÁNCHEZ R.  
 
For the Kingdom of Norway:  
 ERIK COLBAN  
 
For Pakistan:  
 A. H. ISPAHANI  
 
For Panama:  
 JUVENAL A. CASTRELLÓN  
 
For Peru:  
 RÓMULO F. FERRERO  
 MANUEL B. LLOSA  
 
For the Philippine Republic:  
 URBANO A. ZAFRA  
 
For Portugal:  
 ALVARO D. L. MARQUES  
 
For Southern Rhodesia:  
 S. ROWE  
 
For Sweden:  
 R. KUMLIN  
 
For Switzerland:  
 FRITZ REAL   - 7 - 
 
 
 
For Syria:  
 HUSNI SAWWAF  
 
For Transjordan:  
 S. HAIDER  
 A. JADDOU  
 
For the Union of South Africa:  
 H. T. ANDREWS  
 
For the United Kingdom of Great Britain and 
Northern Ireland:  
 STEPHEN L. HOLMES  
 J. L. DODDS  
 R. J. SHACKLE  
 
 
 
 For the United States of America:  
 W. L. CLAYTON  
 CLAIR WILCOX  
 
For Uruguay:  
 ARIOSTO D. GONZÁLEZ  
 
For Venezuela:  
 CARLOS A. D'ASCOLI  
For the United Nations:  
A. D. K. OWEN 
for the Secretary -General  
 
For the United Nations Conference on Trade and Employment:  
ERIC WYNDHAM WHITE  
Executive Secretary   - 8 - 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
HAVANA CHARTER  
 
 
FOR AN 
 
 
INTERNATIONAL TRADE ORGANIZATION   - 9 - 
 
HAVANA CHARTER  
FOR AN INTERNATIONAL TRADE ORGANIZATION  
 
 I   N   D   E   X  
 
 
CHAPTER I - PURPOSE AND OBJECTIVES       Page  
 
 Article 1          14 
 
CHAPTER II -  EMPLOYMENT AND ECONOMIC ACTIVITY  
 
 Article 2  Importance of Employment, Production and Demand in  
   relation to the Purpose of this Charter     15 
 Article 3  Maintenance of Domestic Employment    15 
 Article 4  Removal of Maladjustments within the Balance of Payments  15 
 Article 5  Exchange of Information and Consultation    16 
 Article 6  Safeguards for Members subject to External Inflationary or  
   Deflationary Pressure       16 
 Article 7  Fair Labour Standards       17 
 
CHAPTER III -  ECONOMIC DEVELOPMENT AND RECONSTRUCTION  
 
 Article 8  Importance of Economic Development and Reconstruction in  
   Relation to the Purpose of this Charter    18 
 Article 9  Development of Domestic Resources and Productivity   18 
 Article 10  Co-operation for Economic Development and Reconstruction  18 
 Article 11  Means of promoting Economic Development and  
   Reconst ruction        19 
 Article 12  International Investment for Economic Development and  
   Reconstruction       20 
 Article 13  Governmental Assistance to Economic Development and  
   Reconstruction        21 
 Article 14  Transitional Measures       25 
 Article 15  Preferential Agreements for Economic Development and  
   Reconstruction        26 
 
CHAPTER IV -  COMMERCIAL POLICY  
 
Section A.  Tariffs, Preferences, and Internal Taxation and Regulation  
 
 Article 16  General Most -favoured- nation Treatment    29 
 Article 17  Reduction of Tariffs and Elimination of Preferences   30 
 Article 18  National Treatment on Internal Taxation and Regulation  32 
 Article 19  Special Provisions relating to Cinematograph Films   33 
 
Sectio n B.  Quantitative Restrictions and related Exchange Matters  
 
 Article 20  General Elimination of Quantitative Restrictions   34 
 Article 21  Restrictions to safeguard the Balance of Payments   35 
 Article 22  Non-discriminatory Administration of Quantitative  
   Restrictions        38  - 10 - 
 
 
           Page  
 
  Article 23  Exceptions to the Rule of Non- discrimination   40  
       
  Article 24  Relationship with the International Monetary Fund  
    and Exchange Arrangements     42 
            
 Section C.  Subsidies          
 
  Article 25  Subsidies in General      44 
  Article 26  Additional Provisions on Export Subsidies   44 
  Article 27  Special Treatment of Primary Commodities   45 
  Article 28  Undertaking regarding Stimulation of Exports of  
    Primary Commodities      45 
 
 Section D.  State Trading and Related Matters  
 
  Article 29  Non-discriminatory Treatment     46 
  Article 30  Marketing Organizations    47 
  Article 31  Expansion of Trade      47 
  Article 32  Liquidation of Non- commercial Stocks    49 
   
 Section E.  General Commercial Provisions   
 
  Article 33  Freedom of Transit      49 
  Article 34  Anti-dumping and Countervailing Duties   50 
  Article 35  Valuation for Customs Purposes    52 
  Article 36  Formalities connected with Importation and  
    Exportation       53 
  Artic le 37  Marks of Origin      54 
  Article 38  Publication and Administration of Trade Regulations  55 
  Article 39  Information, Statistics and Trade -Terminology   56 
 
 Section F.  Special Provisions    
 
  Article 40  Emergency Action on Imports of Particular Products  57 
  Article 41  Consultation       58 
  Article 42  Territorial Application of Chapter IV    58 
  Article 43  Frontier Traffic      59 
  Article 44  Customs Unions and Free -Trade Areas   59 
  Article 45  General Exceptions to Chapter IV    61 
 
CHAPTER V - RESTRICTIVE BUSINESS PRACTICES 
 
  Article 46  General Policy Towards Restrictive Business Practices  63 
  Article 47  Consultation Procedure     64 
  Article 48  Investigation Procedure     64 
  Article 49  Studi es relating to Restrictive Business Practices  65 
  Article 50  Obligations of Members     66 
  Article 51  Co-operation Remedial Arrangements    66  - 11 - 
 
  Article 52  Domestic Measures Against Restrictive Business  
    Practices       67 
 
           Page  
 
  Article 53 Special Procedures with respect to Services   67 
  Article 54  Interpretation and Definition     67 
   
CHAPTER VI - INTER -GOVERNMENTAL COMMODITY AGREEMENTS  
 
 Section A.  Introductory Considerations  
 
  Article 55  Difficulties Relating to Primary Commodities   69 
  Article 56  Primary and Related Commodities    69 
  Article 57  Objectives of Inter -governmental Commodity  
    Agreements       69 
 
 Section B.  Inter -governmental Commodity Agreements in General   
 
  Article 58  Commodity Studies      70 
  Article 59  Commodity Conferences     71 
  Article 60  General Principles Governing Commodity  
    Agreements       71 
  Article 61  Types of Agreements      72 
 
 Section C.  Inter -governmental Commodity Control Agreements  
 
  Article 62  Circumstances Governing the use of Commodity  
    Control Agreements      73 
  Article 63  Additional Principles Governing Commodity Control  
    Agreements       74 
  Article 64  Administration of Commodity Control Agreements  74 
  Article 65  Initial Term, Renewal and Review of Commodity  
    Control Agreements      75  
  Article 66  Settlement of Disputes      75 
   
 Section D.  Miscellaneous Provisions  
 
  Article 67  Relations with In ter-governmental Organizations  76 
  Article 68  Obligations of Members Regarding Existing and  
    Proposed Commodity Agreements    76 
  Article 69  Territorial Application      76 
  Article 70  Exceptions to Chapter VI     77 
 
CHAPTER VII -  THE INTERNATIONAL TRADE ORGANIZATION  
 
 Section A.  Structure and Functions  
 
  Article 71  Membership       78 
  Article 72  Functions       79 
  Article 73  Structure       80  - 12 - 
 
 
 
           Page  
 
 Section B.  The Conference   
 
  Article 74  Compositi on      80 
  Article 75  Voting       80 
  Article 76  Sessions, Rules of Procedure and Officers   81 
  Article 77  Powers and Duties      81 
 
 Section C.  The Executive Board 
 
  Article 78  Composition of the Executive Board   82 
  Article 79  Voting       82 
  Article 80  Sessions, Rules of Procedure and Officers   83 
  Article 81  Powers and Duties      83 
 
 Section D.  The Commissions  
 
  Article 82  Establishment and Functions     83 
  Article 83  Composition and Rules of Procedure    84 
 
 Section E.  The Director -General and Staff  
 
  Article 84  The Director -General      84 
  Article 85  The Staff       84 
   
 
 Section F.  Other Organizational Provisions  
 
  Article 86  Relations with the United Nations    85 
  Article 87  Relations with Other Organizations    86 
  Article 88  International Character of the Responsibilities of the  
    Director -General, Staff and Members of Commissions  86 
  Article 89  International Legal Status of the Organization   86 
  Article 90  Status of the Organization in the Territory of  
    Members       86 
  Article 91  Contributions       87 
 
CHAPTER VIII - SETTLEMENT OF DIFFERENCES  
 
  Article 92  Reliance on the Procedures of the Charter   88 
  Article 93  Consultation and Arbitration     88 
  Article 94  Reference to the Executive Board    89 
  Article 95  Reference to the Conference     89 
  Article 96  Reference to the International Court of Justice   90 
  Article 97  Miscellaneous Provisions     91 
 
CHAPTER IX -  GENERAL PROVISIONS   
   - 13 - 
 
  Article 98  Relations with Non -Members    92 
  Article 99  General Exceptions      92 
           Page  
 
  Article 100  Amendments       93 
  Article 101  Review of the Charter      94 
  Article 102  Withdrawal and Termination    94 
  Article 103  Entry into Force and Registration   95 
  Article 104  Territorial Application      96 
  Article 105  Annexes       96 
  Article 106  Deposit and Authenticity of Texts;  Title and  
    Date of the Charter      96 
 
Annexes A to J -   Relating to Article 16       97-102 
Annex K -   Relating to Article 23       103 
Annex L -  Relating to Article 78       104 
Annex M -    Relating to Article 99       105 
Annex N -    Relating to Article 100       105 
Annex O -    Relating to Article 103       105 
Annex P -   Interpretative Notes       106 
          - 14 - 
 
CHAPTER I  
 
PURPOSE AND OBJECTIVES  
 
 
Article 1  
 
 
 RECOGNIZING the determination of the United Nations to create conditions of stability and 
well-being which are necessary for peaceful and friendly relations among nations,  
 
 THE PARTIES to this Charter undertake in the fields of trade and employment to co- operate 
with one another and with the United Nations  
 
 For the Purpose of  
 
 REALIZING the aims net forth in the Charter of the United Nations, particularly the attainment 
of the higher standards of living, full employment and conditions of economic and soc ial progress and 
development, envisaged in Article 55 of that Charter.  
 
 TO THIS END they pledge themselves, individually and collectively, to promote national and 
international action designed to attain the following objectives:  
 
1. To assure a large and steadily growing volume of real income and effective demand, to increase 
the production, consumption and exchange of goods, and thus to contribute to a balanced and expanding 
world economy.  
 
2. To foster and assist industrial and general economic developme nt, particularly of those 
countries which are still in the early stages of industrial development, and to encourage the international 
flow of capital for productive investment.  
 
3. To further the enjoyment by all countries, on equal terms, of access to the  markets, products and 
productive facilities which are needed for their economic prosperity and development. 
 
4. To promote on a reciprocal and mutually advantageous basis the reduction of tariffs and other 
barriers to trade and the elimination of discrimi natory treatment in international commerce.  
 
5. To enable countries, by increasing the opportunities for their trade and economic development, 
to abstain from measures which would disrupt world commerce, reduce productive employment or 
retard economic prog ress. 
 
6. To facilitate through the promotion of mutual understanding, consultation and co- operation the 
solution of problems relating to international trade in the fields of employment, economic development, 
commercial policy, business practices and commodity polic y. 
 
 ACCORDINGLY they hereby establish the INTERNATIONAL TRADE ORGANIZATION 
through which they shall co -operate an Members to achieve the purpose and the objectives set forth in 
this Article.  
  - 15 - 
 
CHAPTER II  
 
EMPLOYMENT AND ECONOMIC ACTIVITY  
 
 
Article 2  
 
Impo rtance of Employment, Production and Demand in relation to the Purpose of this Charter  
 
 
1. The Members recognize that the avoidance of unemployment or underemployment, through the 
achievement and maintenance in each country of useful employment opportunit ies for those able and 
willing to work and of a large and steadily growing volume of production and effective demand for 
goods and services, is not of domestic concern alone, but is also a necessary condition for the 
achievement of the general purpose and the objectives set forth in Article 1, including the expansion of 
international trade, and thus for the well -being of all other countries.  
 
2. The Members recognize that, while the avoidance of unemployment or underemployment must 
depend primarily on inter nal measures taken by individual countries, such measures should be 
supplemented by concerted action under the sponsorship of the Economic and Social Council of the 
United Nations in collaboration with the appropriate inter -governmental organizations, each of these 
bodies acting within its respective sphere and consistently with the terms and purposes of its basic 
instrument.  
 
3. The Members recognize that the regular exchange of information and views among Members is 
indispensable for successful co -operati on in the field of employment and economic activity and should 
be facilitated by the Organization.  
 
 
Article 3  
 
Maintenance of Domestic Employment  
 
 
1. Each Member shall take action designed to achieve and maintain full and productive 
employment and large and steadily growing demand within its own territory through measures 
appropriate to its political, economic and social institutions. 
 
2. Measures to su stain employment, production and demand shall be consistent with the other 
objectives and provisions of this Charter.  Members shall seek to avoid measures which would have the 
effect of creating balance- of-payments difficulties for other countries.  
 
 
Article 4  
 
Removal of Maladjustments within the Balance of Payments  
 
 
1. In the event that a persistent maladjustment within a Member's balance of payments is a major 
factor in a situation in which other Members are involved in balance -of-payments difficulties  which 
handicap them in carrying out the provisions of Article 3 without resort to trade restrictions, the Member  - 16 - 
 
shall make its full contribution, while appropriate action shall he taken by the other Mem bers concerned, 
towards correcting the situation. 
 
2. Action in accordance with this Article shall be taken with due regard to the desirability of 
employing methods which expand rather than contract international trade.  
 
 
Article 5  
 
Exchange of Information and Consultation  
 
 
1. The Members and the Organization shall participate in arrangements made or sponsored by the 
Economic and Social Council of the United Nations, including arrangements with appropriate 
inter-governmental organizations:  
 
 (a)for the systematic collection, analysis and exchange of information on domestic employment 
problems, trends and policies, including as far as possible information relating to 
national income, demand and the balance of payments;  
 
 (b)for studies, relevant to the purpose and objectives set f orth in Article 1, concerning 
international aspects of population and employment problems;  
 
 (c)for consultation with a view to concerted action on the part of governments and inter -
governmental organizations in order to promote employment and economic act ivity.  
 
2. The Organization shall, if it considers that the urgency of the situation so requires, initiate 
consultations among Members with a view to their taking appropriate measures against the interna tional 
spread of a decline in employment, production or demand. 
 
 
Article 6  
 
Safeguards for Members subject to External Inflationary or Deflationary Pressure  
 
 
 The Organization shall hav e regard, in the exercise of its functions under other Articles of this 
Charter, to the need or Members to take action within the provisions of this Charter to safeguard their 
economies against inflationary or deflationary pressure from abroad.  In case of  deflationary pressure 
special consideration shall be given to the consequences for any Member of a serious or abrupt decline 
in the effective demand of other countries.  
  - 17 - 
 
Article 7  
 
Fair Labour Standards  
 
 
1. The Members recognize that measures relating t o employment must take fully into account the 
rights of workers under inter -governmental declarations, conventions and agreements.  They recognize 
that all countries have a common interest in the achievement and maintenance of fair labour standards 
related  to productivity, and thus in the improvement of wages and working conditions as productivity 
may permit.  The Members recognize that unfair labour conditions, particularly in production for 
export, create difficulties in international trade, and, accordingly, each Member shall take whatever 
action may be appropriate and feasible to eliminate such conditions within its territory. 
 
2. Members which are also members of the International Labour Organisation shall co -operate 
with that organization in giving eff ect to this undertaking. 
 
3. In all matters relating to labour standards that may be referred to the Organization in accordance 
with the provisions of Articles 94 or 95, it shall consult and co- operate with the International Labour 
Organisation.  
 
 
 
  - 18 - 
 
CHAPTER III  
 
ECONOMIC DEVELOPMENT AND  RECONSTRUCTION  
 
Article 8  
 
Importance of Economic  Development and Reconstruction in Relation to the Purpose of this Charter  
 
 
 The Members recognize that the productive use of the world's human and material resources  is 
of concern to and will benefit all countries, and that the industrial and general economic development of 
all countries, particularly of those in which resources are as yet relatively undeveloped, as well as the 
reconstruction of those countries whose economies have been devastated by war, will improve 
opportunities for employment, enhance the productivity of labour, increase the demand for goods and 
services, contribute to economic balance, expand international trade and raise levels of real income.  
 
 
Article 9  
 
Development of Domestic Resources and Productivity  
 
 
 Members shall within their respective territories take action desired progressively to develop, 
and where necessary to reconstruct, industrial and other economic resources and to raise standards of 
productivity through measures not inconsistent with the other provisions of this Charter.  
 
 
Article 10  
 
Co-operation for Economic Development and Reconstruction  
 
 
1. Members shall co -operate with one another, with the Economic and Social Council of the 
United Nations, with the Organization and with other appropriate inter -governmental organizations, in 
facilitating and promoting industrial and general economic developm ent, as well as the reconstruction of 
those countries whose economies have been devastated by war.  
 
2. With a view to facilitating and promoting industrial and general economic development and 
consequently higher standards of living, especially of those countries which are still relatively unde -
veloped, as well as the reconstruction of those countries whose economies have been devastated by war, 
and subject to any arrangements which may he entered into between the Organization and the Economic 
and Social Council of the United Nations and appropriate inter -governmental organizations, the 
Organization shall, within its powers and resources, at the request of any Member:  
 
 (a) (i)study the Member's natural resources and potentialities for industrial and general  
economic development, and assist in the formulation of plans for such 
development;  
  - 19 - 
 
(ii)furnish the Member with appropriate advice concerning its plans for economic development or 
reconstruction and the financing and carrying out of its programmes for 
economic development or reconstruction; or  
 
(b) assist the Member to procure such advice or study.  
 
 These services shall be provided on terms to be agreed and in such collaboration with 
appropriate regional or other inter -governmental organizations as will use fully the competence of each 
of them.  The Organization shall also, upon the same conditions, a id Members in procuring appropriate 
technical assistance.  
 
3. With a view to facilitating and promoting industrial and general economic development, 
especially of those countries which are still relatively undeveloped, as well as the reconstruction of thos e 
countries whose economies have been devastated by war, the Organization shall co -operate with the 
Economic and Social Council of the United Nations and appropriate inter -governmental organizations 
on all phases, within their special competence, of such development and reconstruction, and, in 
particular, in respect of finance, equipment, technical assistance and managerial skills.  
 
 
Article 11  
 
Means of Promoting Economic Development and Reconstruction  
 
 
1. Progressive industrial and general economic development, as well as reconstruction, requires 
among other things adequate supplies of capital funds, materials, modern equipment and technology a nd 
technical and managerial skills.  Accordingly, in order to stimulate and assist in the provision and 
exchange of these facilities:  
 
 (a)Members shall co -operate, in accordance with Article 10, in providing or arranging for the 
provision of such faciliti es within the limits of their power, and Members shall not 
impose unreasonable or unjustifiable impediments that would prevent other Members 
from obtaining on equitable terms any such facilities for their economic development 
or, in the case of Member countries whose economies have been devastated by war, for 
their reconstruction;  
 
 (b)no Member shall take unreasonable or unjustifiable action within its territory injurious to the 
rights or interests of nationals of other Members in the enterprise, skills, c apital, arts or 
technology which they have supplied.  
 
2. The Organization may, in such collaboration with other inter -governmental organizations as 
may be appropriate:  
 
(a)make recommendations for and promote bilateral or multilateral agreements on measure s designed.  
 
  (i)to assure just and equitable treatment for the enterprise, skills, capital, arts and 
technology brought from one Member country to another;  
 
(ii) to avoid international double taxation in order to stimulate foreign private  investments;  
  - 20 - 
 
(iii)to enlarge to the greatest possible extent the benefits to Members from the fulfilment of the 
obligations under this Article;  
 
(b)make recommendations and prom ote agreements designed to facilitate an equitable distribution of 
skills, arts, technology, materials and equipment, with due regard to the needs of all 
Members;  
 
(c)formulate and promote the adoption of a general agreement or statement of principles rega rding the 
conduct, practices and treatment of foreign investment,  
 
 
Article 12  
 
International Investment for Economic Development and Reconstruction  
 
 
1. The Members recognize that:  
 
 (a)international investment, both public and private, can be of great value in promoting 
economic development and reconstruction, and consequent social progress;  
 
(b)the international flow of capital will be stimulated to the extent that Members afford nationals of 
other countries opportunities for investment and security for existing and future 
investments;  
 
(c)without prejudice to existing international agreements to which Members are parties, a Member has 
the right:  
 
 (i)to take any appropriate safeguards necessary to ensure that foreign investment is not used as a 
basis for interference in its internal affairs or national policies;  
 
  (ii)to determine whether and, to what extent and upon what terms it will allow future 
foreign investment;  
 
  (iii)to prescribe and give effect on just terms to requirements as to the ownership of 
existing and future investments;  
 
  (iv)to prescribe and give effect to other reasonable requirements with respect to existing 
and future investments;  
 
 (d)the interests of Members whose nationals are in a position to provide capital for international 
investment and of Members who desire to obtain the use of such c apital to promote 
their economic development or reconstruction may be promoted if such Members enter 
into bilateral or multilateral agreements relating to the opportunities and security for 
investment which the Members are prepared to offer and any limitat ions which they are 
prepared to accept of the rights referred to in sub- paragraph (c).  
 
2.  Members therefore undertake:  
 
(a)subject to the  provisions of paragraph 1(c) and to any agreements entered into under paragraph 1(d),  
  - 21 - 
 
  (i)to provide reasonable opportunities for investments acceptable to them and adequate 
security for existing and future investments, and  
 
  (ii)to give due regard to the desirability of avoiding discrimination as between foreign 
investments;  
 
(b)upon the request of any Member and without prejudice to existing international agreements to which 
Members are parties, to enter into consultation or to participate in negotiat ions directed 
to the conclusion, if mutually acceptable, of an agreement of the kind referred to in 
paragraph 1(d). 
 
3. Members shall promote co -operation between national and foreign enterprises or investors for 
the purpose of fostering economic developme nt or reconstruction in came where such co- operation 
appears to the Members concerned to be appropriate.  
 
 
Article 13  
 
Governmental assistance to Economic Development and Reconstruction  
 
 
1. The Members recognize that special governmental assistance may be required to promote the 
establishment, development or reconstruction of particular industries or branches of agriculture, and that 
in appropriate circumstances the grant of such assistance i n the form of protective measures is justified.  
At the same time they recognize that an unwise use of such measures would impose undue burdens on 
their own economies and unwarranted restrictions on international trade, and might increase 
unnecessarily the difficulties of adjustment for the economics of other countries. 
 
2. The Organization and the Members concerned shall preserve the utmost secrecy in respect of 
matters arising under this Article.  
 
 
- A - 
 
3. If a Member, in the interest of its economic development or reconstruction, or for the purpose of 
increasing a most -favoured- nation rate of duty in connection with the establishment of a new 
preferential agreement in accordance with the provisions of Article 15, considers it desirable to adopt 
any non- discriminatory measure affecting imports which would conflict with an obligation which the 
Member has assumed in respect of any product through negotiations with any other Member or 
Members pursuant to Chapter  IV but which would not conflict with that Chapter, such Member  
 
 (a)shall enter into direct negotiations with all the other Members which have contractual rights.  
The Members shall be tree to proceed in accordance with the terms of any agreement 
resultin g from such negotiations, provided that the Organization is informed thereof; or  
 
 (b)shall initially or may, in the event of failure to reach agreement under sub- paragraph (a), 
apply to the Organization.  The Organization shall determine, from among Mem bers 
which have contractual rights, the Member or Members materially affected by the 
proposed measure and shall sponsor negotiations between such Member or Mem bers 
and the applicant Member with a view to obtaining expeditious and substantial 
agreement.  Th e Organization shall establish and communicate to the Members  - 22 - 
 
concerned a time schedule for such negotiations, fol lowing as far as practicable any 
time schedule which may have been proposed by the applicant Member.  The 
Members shall commence and proceed continuously with such negotiations in 
accordance with the time schedule established by the Organization.  At the request of a 
Member, the Organization may, where it concurs in principle with the proposed 
measure, assist in the negotiations.  Upon substant ial agreement being reached, the 
applicant Member may be released by the Organization from the obligation referred to 
in this paragraph, subject to such limitations as may have been agreed upon in the 
negotiations between the Members concerned.  
 
4. (a)If as a result of action initiated under paragraph 3, there should be an increase in imports of 
any product concerned, including products which can be directly substituted therefor, 
which if continued would be so great as to jeopardize the establishment , development 
or reconstruction of the industry, or branch of agriculture concerned, and if no 
preventive measures consistent with the provisions of this Charter can be found which 
seem likely to prove effective, the applicant Member may, after informing, and when 
practicable consulting with, the Organization, adopt such other measures as the 
situation may require, provided that such measures do not restrict imports more than 
necessary to offset the increase in imports referred to in this sub -paragraph exce pt in 
unusual circumstances, such measures shall not reduce imports below the level 
obtaining in the most recent representative period preceding the date on which the 
Member initiated action under paragraph 3.  
 
(b)The Organization shall determine, as soon as practicable, whether any such measure should be 
continued, discontinued or modified. It shall in any case be terminated as soon as the 
Organization determines that the negotiations are completed or discontinued.  
 
 (c)it is recognized that the contractua l relationships referred to in paragraph 3 involve reciprocal 
advantages, and therefore any Member which has a contractual right in respect of the 
product to which such action relates, and whose trade is materially affected by the 
action, may suspend the a pplication to the trade of the applicant Member of 
substantially equivalent obligations or concessions under or pursuant to Chapter IV, 
provided that the Member concerned has consulted the Organization before taking such 
action and the Organization does not disapprove.  
 
 
- B - 
 
5. In the case of any non -discriminatory measure affecting imports which would conflict with 
Chapter IV and which would apply to any product in respect of which the Member has assumed an 
obligation through negotiations with any other  Member or Members pursuant to Chapter IV, the 
provisions of sub- paragraph (b) of paragraph 3 shall apply; Provided  that before granting a release the 
Organization shall afford adequate opportunity for all Members which it determines to be materially 
affected to express their views.  The provisions of paragraph 4 shall also be applicable in this case.  
 
 
- C - 
  - 23 - 
 
6. If a Member in the interest of its economic development or reconstruction considers it desirable 
to adopt any non- discriminatory measure affecting  imports which would conflict with Chapter IV, but 
which would not apply to any product in respect of which the Member has assumed an obligation 
through negotiations with any other Member or Members pursuant to Chapter IV, such Member shall 
notify, the Organization and shall transmit to the Organization a written statement of the considerations 
in support of the adoption, for a specified period, of the proposed measure.  
 
7. (a)On application by such Member the Organization shall concur in the proposed measure and 
grant the necessary release for a specified period, having particular regard to the 
applicant Member's need for economic development or reconstruction, it is establi shed 
that the measure  
 
 (i)is designed to protect a particular industry, established between January 1, 1939 and the date 
of this Charter, which was protected during that period of its development by 
abnormal conditions arising out of the war; or  
 
  (ii)is designed to promote the establishment or development of a particular industry for 
the processing of an indigenous primary commodity, when the external sales of 
such commodity have been materially reduced as a result of new or increased 
restrictions imposed abroad, or  
 
  (iii)is necessary, in view of the possibilities and resources of the applicant Member to 
promote the establishment or development of a particular industry for the 
processing of an indigenous primary commodity, or for the processing of a 
by-product of such industry, which would otherwise be wasted, in order to 
achieve a fuller and more economic use of the applicant Member's natural 
resources and manpower and, in the long run, to raise the standard of living 
within the territory of the applica nt Member, and is unlikely to have a harmful 
effect, in the long run, on international trade; or  
 
  (iv)is unlikely to be more restrictive of international trade than any other practicable 
and reasonable measure permitted under this Charter, which could be  imposed 
without undue difficulty, and is the one most suitable for the purpose having 
regard to the economics of the industry or branch of agriculture concerned and 
to the applicant Member's need for economic development or reconstruction.  
 
 The foregoing provisions of this sub- paragraph are subject to the following conditions:  
 
(1)any proposal by the applicant Member to apply any such measure, with or without modification, after 
the end of the initial period, shall not be subject to the provi sions of this paragraph; and 
 
(2)the Organization shall not concur in any measure under the provisions of (i), (ii) or (iii) above which 
is likely to cause serious prejudice to exports of a primary commodity on which the 
economy of another Member country i s largely dependent. 
 
 (b)The applicant Member shall apply any measure permitted under sub- paragraph (a) in such a 
way as to avoid unnecessary damage to the commercial or economic interests of any 
other Member, including interests under the provisions of A rticles 3 and 9. 
  - 24 - 
 
8. If the proposed measure does not fall within the provisions of paragraph 7, the Member  
 
 (a)may enter into direct consultations with the Member or Members which, in its judgment, 
would be materially affected by the measure.  At the same time, the Member shall 
inform the Organization of such consultations in order to afford it an opportunity to  
determine whether all materially affected Mem bers are included within the 
consultations.  Upon complete or substantial agreement being reached, the Member 
interested in taking the measure shall apply to the Organization.  The Organization 
shall promptly examine the application to ascertain whether the interests of all the 
materially affected Members have been duly taken into account.  If the Organization 
reaches this conclusion, with or without further consultations between the Members 
concerned, it shall  release the applicant Member from its obligations  under the 
relevant provision of Charter IV, subject to such limitations as the Organization may 
impose;  or  
 
 (b)may initially, or in the event of failure to reach complete or substantial agreement under  
sub-paragraph (a), apply to the Or ganization.  The Organization shall promptly 
transmit the statement submitted under par agraph 6 to the Member or Members which 
are determined by the Organization to be materially affected by the proposed measure.  
Such Member or Members shall, within the time limits prescribed by the Organization, 
inform it whether, in the light of the anticipated effects of the proposed measure on the 
economy of such Member country or countries, there is any objection to the proposed 
measure.  The Organization shall,  
 
  (i)if there is no objection to the proposed measure on the part of the affected Member or 
Members, immediately release the applicant Member from its obligations 
under the relevant provision of Chapter IV;  or  
 
  (ii)if there is objection, promptly examine the proposed measure, having regard to the 
provisions of this Charter, to the considerations presented by the applicant 
Member and its need for economic development or reconstruction, to the views 
of the Member o r Members determined to be materially affected, and to the 
effect which the proposed measure, with or without modification, is likely to 
have, immediately and in the long run, on international trade, and, in the long 
run, on the standard of living within t he territory of the applicant Member.  If, 
as a result of such examination, the Organization concurs in the proposed 
measure, with or without modification, it shall release the applicant Member 
from its obligations under the relevant provision of Chapter I V, subject to such 
limitations as it may impose.  
 
9. If, in anticipation of the concurrence of the Organization in the adoption of a measure referred 
to in paragraph 6, there should be an increase or threatened increase in the imports of any product 
concer ned, including products which can be directly substituted therefore, so substantial as to jeopardize 
the establishment, development or reconstruction of the industry or branch of agriculture concerned, and 
if no preventive, measures consistent with this Charter can be found which seem likely to prove 
effective, the applicant Member may, after informing, and when practicable consulting with, the 
Organization, adopt such other measures as the situation may require, pending a decision by the 
Organization on the Member's application; Provided  that such measures do not reduce imports below 
the level obtaining in the most recent representative period preceding the date on which notification was 
given under paragraph 6.  
  - 25 - 
 
10. The Organization shall, at the earliest opportunity but ordinarily within fifteen days after receipt 
of an application under the provisions of paragraph 7 or sub- paragraphs (a) or (b) of paragraph  8, 
advise the applicant Member of the date by which it will be notified whether or not it is relea sed from 
the relevant obligation.  This shall be the earliest practicable date and not later than ninety days after 
receipt of such application; Provided  that, if unforeseen difficulties arise before the date set, the period 
may be extended after consultat ion with the applicant Member.  If the applicant Member is not so 
notified by the date set, it may, after informing the Organization, institute the proposed measure.  
 
Article 14  
 
Transitional Measures  
 
 
1. Any Member may maintain any non- discriminatory protective measure affecting imports which 
has been imposed for the establishment, development or reconstruction of a particular industry or branch 
of agriculture and which is not otherwise permitted by this C harter, provided that notification has been 
given of such measure and of each product to which it relates:  
 
 (a)in the case of a Member signatory to the Final Act of the Second Session of the Preparatory 
Committee of the United Nations Conference on Trade and Employment, not later than 
October 10, 1947, in respect of measures in force on September  1, 1947, subject to 
decisions made under paragraph 6 of Article XVIII of the General Agreement on 
Tariffs and Trade; except that if in special circumstances the C ONTRACTING 
PARTIES to that Agreement agree to dates other than those specified in this 
sub-paragraph, such other dates shall apply;  
 
(b) in the case of any other Member, not later than the day on which it deposits its instrument of 
acceptance of this Chart er, in respect of measures in force on that day or on the day of 
the entry into force of the Charter, whichever is the earlier;  
 
and provided further that notification has been given under sub- paragraph (a) to the other signatories to 
the Final Act of the Second Session of the Preparatory Committee of the United Nations Conference on 
Trade and Employment and under sub- paragraph (b) to the Organization, or, it the Charter has not 
entered into force on the day of such notification, to the signatories to the F inal Act of the United 
Nations Conference on Trade and Employment.  
 
2. Any Member maintaining any such measure, other than a measure approved by the 
CONTRACTING PARTIES to the General Agreement under paragraph 6 of Article XVIII of that 
Agreement, shall, w ithin one month of becoming a Member of the Organization, submit to it a statement 
of the considerations in support of the maintenance of the measure and the period for which it wishes to 
maintain it.  The Organization shall, as soon as possible, but in any case within twelve months of such 
Member becoming a Member of the Organization, examine and give a decision concerning the measure 
as if it had been submitted to the Organization for its concurrence under Article 13.  
 
3. Any measure, approved in accordance with the provisions of Article XVIII of the General 
Agreement, and which is in effect at the time this Charter enters into force, may remain in effect 
thereafter subject to the conditions of any such approval and, if the Organization so decides, to revi ew 
by the Organization.  
 
4. This Article shall not apply to any measure relating to a product in respect of which the Member 
has assumed an obligation through negotiations pursuant to Chapter IV.  - 26 - 
 
 
5. In cases where the Organization decides that a measure should be modified or withdrawn by a 
specified date, it shall have regard to the possible need of a Member for a period of time in which to 
make such modification or withdrawal.  
 
Article 15  
 
Preferential Agreements for Economic Development and Reconstruction  
 
 
1. The Members recognize that special circumstances, including the need for economic develop -
ment or reconstruction, may justify new preferential agreements between two or more countries  in the 
interest of the programmes of economic development or reconstruction of one or more of them.  
 
2. Any Member contemplating the conclusion of such an agreement shall communicate its 
intention to the Organization and provide it with the relevant infor mation to enable it to examine the 
proposed agreement The Organization shall promptly communicate such information to all Members. 
 
3. The Organization shall examine the proposal and, by a two- thirds majority of the Members 
present and voting, may grant, s ubject to such conditions as it may impose, an exception to the 
provisions of Article 16 to permit the proposed agreement to become effective.  
 
4. Notwithstanding the provisions of paragraph 3, the Organization shall authorize, in accordance 
with the provi sions of paragraphs 5 and 6, the necessary departure from the provisions of Article 16 in 
respect of a proposed agreement between Members for the establishment of tariff preferences which it 
determines to fulfil the following conditions and requirements:  
 
 (a)the territories of the parties to the agreement are contiguous one with another, or all parties 
belong to the same economic region;  
 
 (b)any preference provided for in the agreement is necessary to ensure a sound and adequate 
market for a particular industry or branch of agriculture which is being, or is to be, 
created or reconstructed or substantially developed or substantially moderniz ed; 
 
 (c)the parties to the agreement undertake to grant free entry for the products of the industry or 
branch of agriculture referred to in sub- paragraph (b) or to apply customs duties to such 
products sufficiently low to ensure that the objectives set forth in that sub- paragraph 
will be achieved;  
 
 (d)any compensation granted to the other parties by the party receiving preferential treatment 
shall, if it is a preferential concession, conform with the provisions of this paragraph;  
 
 (e)the agreement contai ns provisions permitting, on terms and conditions to be determined by 
negotiation with the parties to the agreement, the adherence of other Members, which 
are able to qualify as parties to the agreement under the provisions of this paragraph, in 
the intere st of their programmes of economic development or reconstruction.  The 
provisions of Chapter VIII may be invoked by such a Member in this respect only on 
the ground that it has been unjustifiably excluded from participation in such an 
agreement;  
 
 (f)the a greement contains provisions for its termination within a period necessary for the  - 27 - 
 
fulfilment of its purposes but, in any case, not later than at the end of ten years; any 
renewal shall be subject to the approval of the Organization and no renewal shall be  for 
a longer period than five years.  
 
5. When the Organization, upon the application of a Member and in accordance with the 
provisions of paragraph 6, approves a margin of preference as an exception to Article 16 in respect of 
the products covered by the  proposed agreement, it may, as a condition of its approval, require a 
reduction in an unbound most -favoured- nation rate of duty proposed by the Member in respect of any 
product so covered, if in the light of the representations of any affected Member it c onsiders that rate 
excessive.  
 
6. (a)If the Organization finds that the proposed agreement fulfils the conditions and requirements 
set forth in paragraph 4 and that the conclusion of the agreement is not likely to cause 
substantial injury to the external t rade of a Member country not party to the agreement, 
it shall within two months authorize the parties to the agreement to depart from the 
provisions of Article 16, as regards the products covered by the agreement.  If the 
Organization does not give a ruling within the specified period, its authorization shall 
be regarded as having been automatically granted.  
 
 (b)If the Organization finds that the proposed agreement, while fulfilling the conditions and re -
quirements set forth in paragraph 4, is likely to ca use substantial injury to the external 
trade of a Member country not party to the agreement, it shall inform interested 
Members of its findings and shall require the Members contemplating the conclusion of 
the agreement to enter into negotiations with that  Member.  When agreement is 
reached in the negotiations, the Organization shall authorize the Members 
contemplating the conclusion of the preferential agreement to depart from the 
provisions of Article 16 as regards the products covered by the preferential  agreement.  
If, at the end of two months from the date on which the Organization suggested such 
negotiations, the negotiations have not been completed and the Organization considers 
that the injured Member is unreasonably preventing the conclusion of the negotiations, 
it shall authorize the necessary departure from the provisions of Article 16 and at the 
same time shall fix a fair compensation to be granted by the parties to the agreement to 
the injured Member or, if this is not possible or reasonable, pre scribe such modification 
of the agreement as will give such Member fair treatment.  The provisions of Chapter 
VIII may be invoked by such Member only if it does not accept the decision of the 
Organization regarding such compensation.  
 
 (c)If the Organization finds that the proposed agreement, while fulfilling the conditions and 
requirements set forth in paragraph 4, is likely to jeopardize the economic position of a 
Member in world trade, it shall not authorize any departure from the provisions of 
Article 16 unless the parties to the agreement have reached a mutually satisfactory 
understanding with that Member.  
 
 (d)If the Organization finds that the prospective parties to a regional preferential agreement 
have, prior to November 21, 1947, obtained from countries representing at least 
two-thirds of their import trade the right to depart from most -favoured- nation treatment 
in the cases envisaged in the agreement, the Organization shall, without prejudice to the 
conditions governing the recognition of such right, grant the authorization provided for 
in paragraph 5 and in sub- paragraph (a) of this paragraph, provided that the conditions 
and requirements set out in sub- paragraphs (a), (e) and (f) of paragraph 4 are fulfilled.  
Nevertheless, if the Organization finds that the external trade of one or more Member  - 28 - 
 
countries, which have not recognized this right to depart from most -favoured- nation 
treatment, is threatened with substantial injury, it shall invite the parties to the 
agreement to enter  into negotiations with the injured Member, and the provisions of 
sub-paragraph (b) of this paragraph shall apply.   - 29 - 
 
CHAPTER IV  
 
COMMERCIAL POLICY  
 
SECTION A - TARIFFS, PREFERENCES, AND INTERNAL TAXATION AND REGULATION  
 
Article 16  
 
General Most -favoured- nation Treatment  
 
 
1. With respect to customs duties and charges of any kind imposed on or in connection with 
importation or exportation or imposed on the international transfer of payments for imports or exports, 
and with respect to the method of levying such duties and charges, and with respect to all rules and 
formalities in connection with importation and exportation, and with respect to all matters  within the 
scope of paragraphs 2 and 4 of Article 18, any advantage, favour, privilege or immunity granted by any 
Member to any product originating in or destined for any other country shall be accorded immediately 
and unconditionally to the like product originating in or destined for all other Member countries.  
 
2. The provisions of paragraph 1 shall not require the elimination, except as provided in Article  17 
, of any preferences in respect of import duties or charges which do not exceed the margins provided for 
in paragraph 4 and which fall within the following descriptions:  
 
 (a)preferences in force exclusively between two or more of the territories listed in Annex  A, 
subject to the conditions set forth therein;  
 
 (b)preferences in force exclusively b etween two or more territories which on July 1, 1939 were 
connected by common sovereignty or relations of protection or suzerainty and which 
are listed in Annexes B, C, D and E;  
 
 (c)preferences in force exclusively between the United States of America and the Republic of 
Cuba;  
 
 (d)preferences in force exclusively between the Republic of the Philippines and the United 
States of America, including the dependent territories of the la tter; 
 
 (e)preferences in force exclusively between neighbouring countries listed in Annexes F, G, H, I 
and J. 
 
3. The provisions of paragraph 1 shall not apply to preferences between the countries formerly a 
part of the Ottoman Empire and detached front i t on July 24, 1923, provided such preferences fulfil the 
applicable requirements of Article 15.  
 
4. The margin of preference on any product in respect of which a preference is permitted under 
paragraph 2 shall not exceed (a) the maximum margin provided for  under the General Agreement on 
Tariffs and Trade or any subsequent operative agreement resulting from negotiations under Article  17, 
or (b) if not provided for under such agreements, the margin existing either on April 10, 1947, or on any 
earlier date est ablished for a Member as a basis for negotiating the General Agreement on Tariffs and 
Trade, at the option of such Member.  
  - 30 - 
 
5. The imposition of a margin of tariff preference not in excess of the amount necessary to 
compensate for the elim ination of a margin of preference in an internal tax existing on April  10, 1947, 
exclusively between two or more of the territories in respect of which preferential import duties or 
charges are permitted under paragraph 2, shall not be deemed to be contrar y to the provisions of this 
Article, it being understood that any such margin of tariff preference shall be subject to the provisions of 
Article 17.  
 
 
Article 17  
 
Reduction of Tariffs and Elimination of Preferences  
 
 
1. Each Member shall, upon the request of any other Member or Members, and subject to 
procedural arrangements established by the Organization, enter into and carry out with such other 
Member or Members negotiations directed to the substantial reduction of the general levels of tariffs and 
other charges on imports and exports, and to the elimination of the preferences referred to in paragraph 2 
of Article 16 on a reciprocal and mutually advantageous basis . 
 
2. The negotiations provided for in paragraph 1 shall proceed in accordance with the following 
rules:  
 
 (a)Such negotiations shall be conducted on a selective product -by-product basis which will 
afford adequate opportunity to take into account the needs  of individual countries and 
individual industries.  Members shall be free not to grant concessions on particular 
products and, in the granting of a concession, they may reduce the duty, bind it at its 
then existing level, or undertake not to raise it above a specified higher level.  
 
 (b)No Member shall be required to grant unilateral concessions, or to grant concessions to other 
Members without receiving adequate concessions in return.  Account shall be taken of 
the value to any Member of obtaining in its own right and by direct obligation the 
indirect concessions which it would otherwise enjoy only by virtue of Article 16.  
 
 (c)in negotiations relating to any specific product with respect to which a preference applies,  
 
  (i)when a reduction is negotiated  only in the most -favoured- nation rate, such reduction 
shall operate automatically to reduce or eliminate the margin of preference 
applicable to that product;  
 
  (ii)when a reduction is negotiated only in the preferential rate, the most- favoured- nation 
rate shall automati cally be reduced to the extent of such reduction;  
 
  (iii)when it is agreed that reductions will be negotiated in both the most -
-favoured- nation rate and the preferen tial rate, the reduction in each shall be 
that agreed by the parties to the negotiations;  
 
  (iv) no margin of preference shall be increased  
  - 31 - 
 
 (d)The binding against increase of low duties or of duty- free treatment shall in principl e be 
recognized as a concession equivalent in value to the substantial reduction of high 
duties or the elimination of tariff preferences.  
 
 (e)Prior international obligations shall not be invoked to frustrate the requirement under 
paragraph 1 to negotiate with respect to preferences, it being understood that 
agreements which result from such negotiations and which conflict with such 
obligations shall not require the modification or termination of such obligations except 
(i) with the consent of the parties t o such obligations, or, in the absence of such consent, 
(ii) by modification or termination of such obligations in accordance with their terms. 
 
3.  The negotiations leading to the General Agree ment on Tariffs and Trade, concluded at Geneva 
on October 30, 1947, shall be deemed to be negotiations pursuant to this Article.  The concessions 
agreed upon as a result of all other negotiations completed by a Member pursuant to this Article shall be 
incorporated in the General Agreement on terms to be agreed with the parties thereto.  If any Member 
enters into any agreement relating to tariffs or preferences which is not concluded pursuant to this 
Article, the negotiations leading to such agreement shall nevertheless conform to the requirements of 
paragraph 2 (c).  
 
4. (a) The provisions of Article 16 shall not prevent the operation of paragraph 5 (b) of 
Article  XXV of the General Agreement on Tariffs and Trade, as amended at the First Session of the 
CONTRACTING PARTIES.  
 
 (b)  If a Member has failed to become a contracting party to the General Agreement within 
two years from the entry into force of this Charter with respect to such Member, the provisions of 
Article 16 shall cease to require, at the end of t hat period, the application to the trade of such Member 
country of the concessions granted, in the appropriate Schedule annexed to the General Agreement, by 
another Member which has requested the first Member to negotiate with a view to becoming a 
contract ing party to the General Agreement but has not successfully concluded negotiations; Provided 
that the Organization may, by a majority of the votes cast, require the continued application of such 
concessions to the trade of any Member country which has been unreasonably prevented from becoming 
a contracting party to the General Agreement pursuant to negotiations in accordance with the provisions 
of this Article.  
 
 (c) If a Member which is a contracting party to the General Agreement proposes to 
withhold tari ff concessions from the trade of a Member country which is not a contracting party, it shall 
give notice in writing to the Organization and to the affected Member.  The latter Member may request 
the Organization to require the continuance of such concessions, and if such a request has been made the 
tariff concessions shall not be withheld pending a decision by the Organization under the provisions of 
sub-paragraph (b) of this paragraph.  
 
 (d) In any determination whether a Member has been unreasonably preve nted from 
becoming a contracting party to the General Agreement, and in any determination under the provisions 
of Chapter VIII whether a Member has failed without sufficient justification to fulfil its obligations 
under paragraph 1 of this Article, the Organization shall have regard to all relevant circumstances, 
including the developmental, reconstruction and other needs, and the general fiscal structures, of the 
Member countries concerned and to the provisions of the Charter as a whole.  
  - 32 - 
 
 (e)  If such concessions are in fact withheld, so as to  result in the application to the trade 
of a Member country of duties higher than would otherwise have been applicable, such Member shall 
then be free, within sixty days after such action becomes effective, to give w ritten notice of withdrawal 
from the Organization.  The withdrawal shall become effective upon the expiration of sixty days from 
the day on which such notice is received by the Director -General.  
 
 
Article 18  
 
National Treatment on Internal Taxation and Reg ulation 
 
 
1.  The Members recognize that internal taxes and other internal charges, and laws, regulations 
and requirements affecting the internal sale, offering for sale, purchase, transportation, distribution or 
use of products, and internal quantitative regulations r equiring the mixture, processing or use of products 
in specified amounts or proportions, should not be applied to imported or domestic products so as to 
afford protection to domestic production.  
 
2.  The products of any Member country imported into any other Member country shall not be 
subject, directly or indirectly, to internal taxes or other internal charges of any kind in excess of those 
applied, directly or indirectly, to like domestic products.  Moreover, no Member shall otherwise apply 
internal taxes  or other internal charges to imported or domestic products in a manner contrary to the 
principles set forth in paragraph 1. 
 
3.  With respect to any existing internal tax which is inconsistent with the provisions of paragraph 
2 but which is specifically a uthorized under a trade agreement, in force on April 10, 1947, in which the 
import duty on the taxed product is bound against increase, the Member imposing the tax shall be free to 
postpone the application of the provisions of paragraph 2 to such tax until  such time as it can obtain 
release from the obligations of such trade agreement in order to permit the increase of such duty to the 
extent necessary to compensate for the elimination of the protective element of the tax.  
 
4. The products of any Member country imported into any other Member country shall be 
accorded treatment no less favourable than that accorded to like products of national origin in respect of 
all laws, regulations, and requirements affecting their internal sale, offering for sale, purchase, 
transportation, distribution or use.  The provisions of this paragraph shall not prevent the application of 
differential internal transportation charges which are based exclusively on the economic operation of the 
means of transport and not on the nati onality of the product. 
 
5.  No Member shall establish or maintain any internal quantitative regulation relating to the 
mixture, processing or use of products in specified amounts or proportions which requires, directly or 
indirectly, that any specified am ount or proportion of any product which is the subject of the regulation 
must be supplied from domestic sources.  Moreover, no Member shall otherwise apply internal 
quantitative regulations in a manner contrary to the principles set forth in paragraph 1. 
 
6. The provisions of paragraph 5 shall not apply to any internal quantitative regulation in force in 
any Member country on July 1, 1939, April 10, 1947 or on the date of this Charter, at the option of that 
Member; Provided  that any such regulation which is  contrary to the provisions of paragraph 5 shall not 
be modified to the detriment of imports and shall be subject to negotiation and shall accordingly be 
treated as a customs duty for the purposes of Article 17.  
  - 33 - 
 
7. No internal quantitative regulation rela ting to the mixture, processing or use of products in 
specified amounts or proportions shall be applied in such a manner as to allocate any such amount or 
proportion among external sources of supply.  
 
8. (a) The provisions of this Article shall not apply t o laws, regulations or requirements 
governing the procurement by governmental agencies of products purchased for governmental purposes 
and not with a view to commercial resale or with a view to use in the production of goods for com -
mercial sale.  
 
 (b) The provisions of this Article shall not prevent the payment of subsidies exclusively to 
domestic producers, including payments to domestic producers derived from the proceeds of internal 
taxes or charges applied consistently with the pro visions of this A rticle and subsidies effected through 
governmental purchases of domestic products. 
 
9. The Members recognize that internal maxi mum price control measures, even though 
conforming to the other provisions of this Article, can have effects prejudicial to the interests of Member 
countries supplying imported products.  Accordingly, Members applying such measures shall take 
account of the interests of exporting Member countries with a view to avoiding to the fullest practicable 
extent such prejudicial effects.  
 
 
Article 19  
 
Special Provisions relating to Cinematograph Films  
 
 
 The provisions of Article 18 shall not prevent any Member from establishing or maintaining 
internal quantitative regulations relating to exposed cinematograph films.  Any such regulations sh all 
take the form of screen quotas which shall conform to the following conditions and requirements:  
 
 (a)Screen quotas may require the exhibition of cinematograph films of national origin during a 
specified minimum proportion of the total screen time actu ally utilized over a specified 
period of not less than one year, in the commercial exhibition of all films of whatever 
origin, and shall be computed on the basis of screen time per theatre per year or the 
equivalent thereof.  
 
 (b)With the exception of scre en time reserved for films of national origin under a screen quota, 
screen time, including screen time released by administrative action from time reserved 
for films of national origin, shall not be allocated formally or in effect among sources of 
supply. 
 
 (c)Notwithstanding the provisions of sub- paragraph (b) any Member may maintain screen 
quotas conforming to the requirements of sub- paragraph (a) which reserve a minimum 
proportion of screen time for films of a specified origin other than that of the Member 
imposing such screen quotas;  Provided  that such minimum proportion of screen time 
shall not be increased above the level in effect on April 10, 1947. 
 
 (d)Screens quotas shall be subject to negotiation and shall accordingly be treated as customs 
duties for the purposes of Article 17.  
 
  - 34 - 
 
SECTION B - QUANTITATIVE RESTRICTIONS AND RELATED EXCHANGE MATTERS 
 
Article 20  
 
General Elimination of Quantitative Restr ictions  
 
 
1. No prohibitions or restrictions other than duties, taxes or other charges, whether made effective 
through quotas, import or export licences or other measures, shall be instituted or maintained by any 
Member on the importation of any product of  any other Member country or on the exportation or sale 
for export of any product destined for any other Member country.  
 
2. The provisions of paragraph 1 shall not extend to the following:  
 
 (a)export prohibitions or restrictions applied for the period necessary to prevent or relieve 
critical shortages of foodstuffs or other products essential to the exporting Member 
country;  
 
(b)import and export prohibitions or restrictions necessary to the application of standards or regulations 
for the classification, grading or marketing of commodities in international trade; if, in 
the opinion of the Organization, the standards or regulations adopted by a Member 
under this sub- paragraph have an unduly res trictive effect on trade, the Orga nization 
may request the Member to revise the standards or regulations;  Provided  that it shall 
not request the revision of standards internationally agreed pursuant to recom -
mendations made under paragraph 7 of Article 39;  
 
(c)import restrictions on any agricultural or fisheries product, imported in any form, necessary to the 
enforcement of governmen tal measures which operate effectively:  
 
  (i)to restrict the quantities of the like domestic product permitted to be mar keted or 
produced, or, it there is no substantial domestic production of the like product, 
of a domestic agricultural or fisheries product for which the imported product 
can be directly substi tuted;  or  
 
(ii)to remove a temporary surplus of the like domest ic product, or, if there is no substantial domestic 
production of the like product, of a domestic agri cultural or fisheries product 
for which the imported product can be directly substituted, by making the 
surplus available to certain groups of domestic consumers free of charge or at 
prices below the current market level; or  
 
  (iii)to restrict the quantities permitted to be produced of any animal product the 
production of which is dire ctly dependent, wholly or mainly, on the imported 
commodity, if the domestic production of that commodity is relatively 
negligible.  
 
3. With regard to import restrictions applied under the provisions of paragraph 2 (c):  
  - 35 - 
 
 (a)such restrictions shall be appl ied only so long as the governmental measures referred to in 
paragraph 2 (c) are in force, and, when applied to the import of products of which 
domestic supplies are available during only a part of the year, shall not be applied in 
such a way as to prevent  their import in quantities sufficient to satisfy demand for 
current consumption purposes during those periods of the year when like domestic 
products, or domestic products for which the imported product can be directly substi -
tuted, are not available;  
 
 (b)any Member intending to introduce restric tions on the importation of any product shall, in 
order to avoid unnecessary damage to the interests of exporting countries, give notice in 
writing as far in advance as practicable to the Organization and to Memb ers having a 
substantial interest in supplying that product, in order to afford such Members adequate 
opportunity for consultation in accordance with the provisions of paragraphs 2 (d) and 4 
of Article 22, before the restric tions enter into force.  At the  request of the importing 
Member concerned, the notifica tion and any information disclosed during the 
consultations shall be kept strictly confidential;  
 
 (c)any Member applying such restrictions shall give public notice of the total quantity or value 
of the product permitted to be imported during a specified future period and of any 
change in such quantity or value;  
 
 (d)any restrictions applied under paragraph 2(c) (i) shall not be such as will reduce the total of 
imports relative to the total of domestic production, as compared with the proportion 
which might reasonably be expected to rule between the two in the absence of 
restrictions.  In determining this proportion, the Member applying the restrictions shall 
pay due regard to the proportion prevailing during a previous representative period and 
to any special factors which may have affected or may be affecting the trade in the 
product concerned.  
 
4. Throughout this Section the terms "import restrictions" and "export restrictions" include 
restrictions made effective through state- trading operations. 
 
 
Article 21  
 
 Restrictions to safeguard the Balance of Payments  
 
 
1.  The Members recogn ize that:  
 
 (a)it is primarily the responsibility of each Member to safeguard its external financial position 
and to achieve and maintain stable equilibrium in its balance of payments;  
 
 (b)an adverse balance of payments of one Member country may have important effects on the 
trade and balance of payments of other Member countries, if it results in, or may lead 
to, the imposition by the Member of restrictions affecting international trade;  
 
 (c)the balance of payments of each Member country is of concern to other Members, and 
therefore it is desirable that the Organization should promote consultations among 
Mem bers and, where possible, agreed action consistent with this Charter for the 
purpos e of correcting a maladjustment in the balance of payments;  and  - 36 - 
 
 
 (d)action taken to restore stable equilibrium in the balance of payments should, so far as the 
Member or Members concerned find possible, employ methods which expand rather 
than contract in ternational trade.  
 
2.  Notwithstanding the provisions of paragraph 1 of Article 20, any Member, in order to 
safeguard its external financial position and balance of pay ments, may restrict the quantity or value of 
merchandise permitted to be imported, subject to the provisions of the following paragraphs of this 
Article.  
 
3. (a) No Member shall institute, maintain or intensify import restrictions under this Article 
except to the extent necessary  
 
 (i)to forestall the imminent threat of, or to stop, a seri ous decline in its monetary reserves, or  
 
 (ii)in the case of a Member with very low monetary reserves, to achieve a reasonable rate of 
increase in its reserves.  
 
 Due regard shall be paid in either case to any special factors which may be affecting the 
Member's reserves or need for reserves, including, where special external credits or other resources are 
available to it, the need to provide for the appropriate use of such credits or resources. 
 
 (b) A Member applying restrictions under sub- paragraph (a) s hall progressively relax and 
ultimately eliminate them, in accordance with the provisions of that sub -paragraph, as its external 
financial position improves.  This provision shall not be interpreted to mean that a Member is required 
to relax or remove such restrictions if that relaxa tion or removal would thereupon produce conditions 
justifying the intensification or institution, respect ively, of restrictions under sub- paragraph (a). 
 
 (c) Members undertake:  
 
 (i)not to apply restrictions so as to prevent unreasonably the importation of any description of 
merchandise in minimum commercial quantities the exclusion of which would impair 
regular channels of trade, or restrictions which would prevent the importatio n of 
commercial samples or prevent the importation of such minimum quantities of a 
product as may be necessary to obtain and maintain patent, trade mark, copyright or 
similar rights under industrial or intellectual property laws;  
 
 (ii)to apply restrictio ns under this Article in such a way as to avoid unnecessary damage to the 
commercial or economic interests of any other Member, including interests under 
Articles 3 and 9.  
 
4. (a) The Members recognize that in the early years of the Organization all of the m will be 
confronted in varying degrees with problems of economic adjustment resulting from the war.  During 
this period the Organization shall, when required to take decisions under this Article or under Article 23, 
take full account of the difficulties o f post -war adjustment and of the need which a Member may have to 
use import restrictions as a step towards the restoration of equilibrium in its balance of payments on a 
sound and lasting basis.  
 
 (b) The Members recognize that, as a result of domestic pol icies directed toward the 
fulfilment of a Member's obligations under Article 3 relating to the achievement and maintenance of full 
and produc tive employment and large and steadily growing demand, or its obligations under Article 9  - 37 - 
 
relating to the reconstr uction or development of industrial and other economic resources and to the 
raising of standards of productivity, such a Member may find that demands for foreign exchange on 
account of imports and other current payments are absorbing the foreign exchange r esources currently 
available to it in such a manner as to exercise pressure on its monetary reserves which would justify the 
institution or maintenance of restrictions under paragraph 3 of this Article.  Accordingly, 
 
 (i)no Member shall be required to wit hdraw or modify restrictions which it is applying under 
this Article on the ground that a change in such policies would render these restrictions 
unnecessary;  
 
 (ii)any Member applying import restrictions under this Article may determine the incidence of 
the restrictions on imports of different products or classes of products in such a way as 
to give priority to the importation of those products which are more essential in the light 
of such policies.  
 
 (c) Members undertake, in carrying out their domestic policies, to pay due regard to the 
need for restoring equilibrium in their balance of pay ments on a sound and lasting basis and to the 
desirability of assuring an economic employment of productive resources.  
 
5. (a) Any Member which is not applying restri ctions under this Article, but is considering the 
need to do so, shall, before instituting such restrictions (or, in circumstances in which prior consultation 
is impracticable, immediately after doing so), consult with the Organization as to the nature of its 
balance- of-payments difficulties, alternative corrective measures which may be available, and the 
possible effect of such measures on the economies of other Members.  No Member shall be required in 
the course of consultations under this sub- paragraph t o indicate in advance the choice or timing of any 
particular measure which it may ultimately determine to adopt.  
 
 (b) The Organization may at any time invite any Member which is applying import 
restrictions under this Article to enter into such consultati ons with it, and shall invite any Member 
substantially intensifying such restrictions to consult within thirty days.  A Member thus invited shall 
participate in the consultations.  The Organization may invite any other Member to take part in the 
consultat ions.  Not later than two years from the day on which this Charter enters into force, the 
Organization shall review all restrictions existing on that day and still applied under this Article at the 
time of the review.  
 
 (c) Any Member may consult with the Orga nization with a view to obtaining the prior 
approval of the Organization for restrictions which the Member proposes, under this Article, to 
maintain, intensify or institute, or for the maintenance, intensification or in stitution of restrictions under 
specified future conditions.  As a result of such consultations, the Organization may approve in advance 
the maintenance, intensification or institution of restrictions by the Member in question in so far as the 
general extent, degree of intensity and duration of the restrictions are concerned.  To the extent to which 
such approval has been given, the requirements of sub- paragraph (a) of this paragraph shall be deemed 
to have been fulfilled, and the action of the Member applying the restrictions shall not be open to 
challenge under subparagraph (d) of this paragraph on the ground that such action is inconsistent with 
the provisions of sub- paragraphs (a) and (b) of paragraph 3. 
 
 (d) Any Member which considers that another Mem ber is applying restrictions under this 
Article inconsistently with the provisions of paragraphs 3 or 4 of this Article or with those of Article 22 
(subject to the provisions of Article 23) may bring the matter to the Organization for discussion; and the 
Member applying the restrictions shall participate in the discussion.  If, on the basis of the case 
presented by the Member initiating the procedure, it appears to the Organization that the trade of that  - 38 - 
 
Member is adversely affected, the Organization shall submit its views to the parties with the aim of 
achieving a settlement of the matter in question which is satisfactory to the parties and to the 
Organization.  If no such settlement is reached and if the Organization determines that the restrictions 
are being applied inconsistently with the provisions of paragraphs 3 or 4 of this Article or with those of 
Article  22 (subject to the provisions of Article 23), the Organization shall recommend the withdrawal or 
modification of the restrictions.  If the restrictions are not withdrawn or modified in accordance with the 
recommendation of the Organization within sixty days, the Organization may release any Member from 
specified obligations or concessions under or pursuant to this Charter towards the Member applying the 
restrictions.  
 
 (e) In consultations between a Member and the Organization under this paragraph there 
shall be full and free discussion as to the various causes; and the nature of the Member's 
balance- of-payments difficulties.  It is recognized that pr emature disclo sure of the prospective 
application, withdrawal or modification of any restrictions under this Article might stimulate speculative 
trade and financial movements which would tend to defeat the purposes of this Article.  Accordingly, 
the Organization shall make provision for the observance of the utmost secrecy in the conduct of any 
consultation.  
 
6. If there is a persistent and widespread appli cation of import restrictions under this Article, 
indicating the existence of a general disequilibri um which is restricting international trade, the 
Organization shall initiate discussions to consider whether other measures might be taken, either by 
those Members whose balances of payments are under pressure or by those Members whose balances of 
payments  are tending to be exceptionally favourable, or by any appropriate inter -governmental 
organization, to remove the underlying causes of the dis equilibrium.  On the invitation of the 
Organization, Members shall participate in such discussions.  
 
 
Article 22  
 
Non-discrimination Administration of Quantitative Restrictions  
 
 
1. No prohibition or restriction shall be applied by any Member on the importation of any product 
of any other Member country or on the exportation of any product destined for any other Member 
country, unless the importation of the like product of all third countries or the exportation of the like 
product to all third countries is similarly prohibited or restricted.  
 
2. In applying import restrictions to any product, Members shall aim at a di stribution of trade in 
such product approaching as closely as possible to the shares which the various Member countries might 
be expected to obtain in the absence of such restrictions, and to this end shall observe the following 
provisions:  
 
 (a)wherever p racticable, quotas representing the total amount of permitted imports (whether 
allocated among supplying countries or not) shall be fixed, and notice given of their 
amount in accordance with paragraph 3 (b);  
 
 (b)in cases in which quotas are not practicable, the restrictions may be applied by means of 
import licences or permits without a quota;  
 
 (c)Members shall not, except for purposes of operating quotas allocated in accordance with 
sub-paragraph (d) of this paragraph, require that import licences or permits be utilized  - 39 - 
 
for the importation of the product concerned from a particular country or source;  
 
 (d)in cases in which a quota is allocated among supplying countries, the Member applying the 
restrictions may  seek agreement with respect to the allocation of shares in the quota 
with all other Members having a substantial interest in supplying the product 
concerned.  In cases in which this method is not reasonably practicable, the Member 
concerned shall allot to  Member countries having a substantial interest in supplying the 
product shares of the total quantity or value of imports of the product based upon the 
proportions supplied by such Member countries during a previous representative 
period, due account being taken of any special factors which may have affected or may 
be affecting the trade in the product.  No conditions or formalities shall be imposed 
which would prevent any Member country from utilizing fully the share of any such 
total quantity or value whi ch has been allotted to it, subject to importation being made 
within any prescribed period to which the quota may relate.  
 
3. (a) In the case of import restrictions involving the granting of import licences, the Member 
applying the restrictions shall provi de, upon the request of any Member having an interest in the trade in 
the product concerned, all relevant informa tion concerning the administration of the restric tions, the 
import licences granted over a recent period and the distribution of such licence s among supplying 
countries; Provided that there shall be no obligation to supply information as to the names of importing 
or supplying enterprises.  
 
 (b) In the case of import restrictions involving the fixing of quotas, the Member applying 
the restrictio ns shall give public notice of the total quantity or value of the product or products which 
will be permitted to be imported during a specified future period and of any change in such quantity or 
value.  Any supplies of the product in question which were e n route at the time at which public notice 
was given shall not be excluded from entry;  Provided  that they may be counted, so far as practicable, 
against the quantity permitted to be imported in the period in question, and also, where necessary, 
against th e quantities permitted to be imported in the next following period or periods, and Provided  
further that it any Member customarily exempts from such restrictions products entered for consumption 
or withdrawn from warehouse for consumption during a period of thirty days after the day of such 
public notice, such practice shall be considered full compliance with this sub- paragraph. 
 
 (c) In the case of quotas allocated among supplying countries, the Member applying the 
restrictions shall promptly inform all other Members having an interest in supplying the product 
concerned of the shares in the quota currently allocated, by quantity or value, to the various supplying 
countries and shall give public notice thereof.  
 
 (d) If the Organization finds, upon the reque st of a Member, that the interests of that 
Member would be seriously prejudiced by giving, in regard to certain products, the public notice 
required under sub- paragraphs (b) and (c) of this paragraph, by reason of the fact that a large part of its 
imports of such products is supplied by non- Member coun tries, the Organization shall release the 
Member from compliance with the obligations in question to the extent and for such time as it finds 
necessary to prevent such prejudice.  Any request made by a Member  pursuant to this sub- paragraph 
shall be acted upon promptly by the Organization.  
 
4. With regard to restrictions applied in accord ance with the provisions of paragraph 2 (d) of this 
Article or under the provisions of paragraph 2 (c) of Article 20, the se lection of a representative period 
for any product and the appraisal of any special factors affecting the trade in the product shall be made 
initially by the Member applying the restric tions;  Provided  that such Member shall, upon the request of 
any other  Member having a substantial interest in supplying that product, or upon the request of the  - 40 - 
 
Organization, consult promptly with the other Member or the Organization regarding the need for an 
adjustment of the proportion deter mined or of the base period se lected, or for the reappraisal of the 
special factors involved, or for the elimination of conditions, formalities or any other provisions 
established unilaterally with regard to the allocation of an adequate quota or its unrestricted utilization.  
 
5. The provisions of this Article shall apply to any tariff quota instituted or maintained by any 
Member and, in so far as applicable, the principles of this Article shall also extend to export restrictions.  
 
 
Article 23  
 
Exceptions to the Rule of Non -discrim ination  
 
 
1. (a) The Members recognize that the after math of the war has brought difficult problems of 
economic adjustment which do not permit the im mediate full achievement of non -discriminatory 
administration of quantitative restrictions and therefore require the exceptional transitional period 
arrangements set forth in this paragraph.  
 
 (b) A Member which applies restrictions under Article 21 may, in the use of such 
restrictions, deviate from the provisions of Article 22 in a man ner having equivalent effect to restrictions 
on payments and transfers for current international trans actions which that Member may at that time 
apply under Article XIV of the Articles of Agreement of the International Monetary Fund, or under an 
analogous provision of a speci al exchange agree ment entered into pursuant to paragraph 6 of Article 24.  
 
 (c) A Member which is applying restrictions under Article 21 and which on March 1, 1948 
was applying import restrictions to safeguard its balance of payments in a manner which deviated from 
the rules of non- discrimination act forth in Article  22 may, to the extent that such deviation would not 
have been authorized on that date by sub- paragraph (b), continue so to deviate, and may adapt such 
deviation to changing circumstance.  
 
 (d) Any Member which before July 1, 1948 has signed the Protocol of Provisional 
Application agreed upon at Geneva on October 30, 1947, and which by such signature has provisionally 
accepted the principles of paragraph 1 of Article 23 of the Draft Charter subm itted to the United Nations 
Conference on Trade and Employment by the Pre paratory Committee, may elect, by written notice to 
the Interim Commission of the International Trade Organization or to the Organization before January 1, 
1949, to be governed by the provisions of Annex K of this Charter, which embodies such principles, in 
lieu of the provisions of sub- paragraphs (b) and (c) of this paragraph.  The provisions of sub- paragraphs 
(b) and (c) shall not be applicable to Members which have so elected to be governed by the provisions of 
Annex K;  and conversely, the provisions of Annex K shall not be, applicable to Members which have 
not so elected.  
 
 (e) The policies applied in the use of import restrictions under sub- paragraphs (b) and (c) 
or under Anne x K in the post -war transitional period shall be designed to promote the maximum 
development of multilateral trade possible during that period and to expedite the attainment of a 
balance- of-payments position which will no longer require resort to the provisions of Article 21 or to 
transi tional exchange arrangements.  
 
 (f) A Member may deviate from the provisions of Article 22, pursuant to 
sub-paragraphs   (b) or (c) of this paragraph or pursuant to Annex K, only so long as it is availing itself 
of the pos t-war transi tional period arrangements under Article XIV of the Articles of Agreement or the  - 41 - 
 
International Monetary Fund, or of an analogous provision of a special exchange agreement entered into 
under paragraph 6 of Article  24. 
 
 (g) Not later than March  1, 1950 (three years after the date on which the International 
Monetary Fund began operations) and in each year thereafter, the Organization shall report on any 
action still being taken by Members under sub- paragraphs (b) and (c) of this paragraph or unde r Annex 
K in March 1952, and in each year thereafter, any Mem ber still entitled to take action under the 
provisions of sub- paragraph (c) or of Annex K shall Consult the Organization as to any deviations from 
Article 22 still in force pursuant to such provisions and as to its continued resort to such provisions.  
After March 1, 1952 any action under Annex K going beyond the maintenance in force of deviations on 
which such consultation has taken place and which the Organization has not found unjustifiable, or their 
adaptation to changing circumstances, shall be subject to any limitations of a general character which the 
Organization may prescribe in the light of the Member's circumstances.  
 
 (h) The Organization may, if it deems such action necessary in exceptional circumstances, 
make representations to any Member entitled to take action under the provisions of sub- paragraph (c) 
that conditions are favourable for the termina tion of any particular  deviation from the provisions of 
Article 22, or for the general abandonment of deviations, under the provisions of that sub- paragraph.  
After March 1, 1962, the Organization may make such representations, in exceptional circum stances, to 
any Member enti tled to take action under Annex K. The Member shall be given a suit able time to reply 
to such representations.  If the Organization finds that the Member persists in unjustifiable deviation 
from the provisions of Article 22, the Member shall, within sixty days, limit or terminate ouch 
deviations as the Organization may specify.  
 
2. Whether or not its transitional period arrange ments have terminated pursuant to paragraph 1 (f), 
a Member which is applying import restrictions under Article 21 may, with the c onsent of the 
Organization, temporarily deviate from the provisions of Article 22 in respect of a small part of its 
external trade where the benefits to the Member or Members concerned substantially outweigh any 
injury which may result to the trade of other Members.  
 
3. The provisions of Article 22 shall not preclude restrictions in accordance with the provisions of 
Article 21 which either  
 
 (a)are applied against imports from other countries, but not as among themselves, by a group of 
territories having a common quota in the International Monetary Fund, on condition 
that such restrictions are in all other respects consistent with the provisions of Article 
22, or  
 
 (b)assist, in the period until December 31, 1951, by measures not involving substantial de -
parture from the provisions of Article 22, another country whose economy has been 
disrupted by war.  
 
4. A Member applying import restrictions under Article 21 shall not be precluded by this Section 
from applying measures to direct its exports in such a man ner as to increase its earnings of currencies 
which it can use without deviation from the provisions of Article 22. 
 
5.  A Member shall not be precluded by this Sec tion from applying quantitative restrictions  
 
 (a)having equivalent effect to exchange restrictions authorized under Section 3 (b) of Article 
VII of the Articles of Agreement of the International Monetary Fund;  or  
  - 42 - 
 
 (b)under the preferential arrangements provided for in Annex A of this Charter, pending the 
outcome  of the negotiations referred to therein.  
 
 
Article 24  
 
Relationship with the International Monetary Fund and Exchange Arrangements  
 
 
1.  The Organization shall seek co -operation with the International Monetary Fund to the end that 
the Organization and the  Fund may pursue a co- ordinated policy with regard to exchange questions 
within the jurisdiction of the Fund and questions of quantitative restrictions and other trade measures 
within the jurisdiction of the Organization.  
 
2. In all cases in which the Organization is called upon to consider or deal with problems 
concerning monetary reserves, balance of payments or foreign exchange arrangements, the Organization 
shall con sult fully with the Fund.  In such consultation, the Organization shall accept all findings of 
statistical and other facts presented by the Fund relating to foreign exchange, monetary reserves and 
balance of payments, and shall accept the determination of the Fund whether action by a Member with 
respect to exchange matters is in accordance with the Articles of Agreement of the International 
Monetary Fund, or with the terms of a special exchange agree ment entered into between that Member 
and the Organization pursuant to paragraph 6 of this Article.  When the Organization is examining a 
situation in the light of the relevant considerations under all the pertinent provisions of Article 21 for the 
purpose of reaching its final decision in cases involving the criteria set forth in paragraph 3 (a) of that 
Article, it shall accept the determination  of the Fund as to what constitutes a serious decline in the Mem -
ber's monetary reserves, a very low level of its monetary reserves or a reasonable rate of increase in its 
monetary reserves, and as to the financial aspects of other matters covered in consu ltation in such cases.  
 
3.  The Organization shall seek agreement with the Fund regarding procedures for consultation 
under paragraph 2 of this Article.  Any such agree ment, other than informal arrangements of a 
temporary or administrative character, shal l be subject to confirmation by the Conference. 
 
4.  Members shall not, by exchange action, frus trate, the intent of the provisions of this Section, 
nor, by trade action, the intent of the provisions of the Articles of Agreement of the International 
Monet ary Fund.  
 
5. If the Organization considers, at any time, that exchange restrictions on payments and transfers 
in connection with imports are being applied, by a Member in a manner inconsistent with the provisions 
of this Section with respect to quantita tive restrictions, it shall report thereon to the Fund. 
 
6. (a) Any Member of the Organization which is not a member  of the Fund shall, within a 
time to be determined by the Organization after consultation with the Fund, become a member of the 
Fund or, failing that, enter into a special exchange agreement with the Organization.  A Member of the 
Organization which cease s to be a member of the Fund shall forthwith enter into a special exchange 
agreement with the Organization.  Any special ex change agreement entered into by a Member under 
this sub- paragraph shall thereupon become part of its obligations under this Charter . 
 
 (b) Any such agreement shall provide to the satisfaction of the Organization that the 
objectives of this Charter will not be frustrated as a result of action with respect to exchange matters by 
the Member in question.  
  - 43 - 
 
 (c) Any such agreement shall not  impose obliga tions on the Member with respect to 
exchange matters generally more restrictive than those im posed by the Articles of Agreement of the 
International Monetary Fund on members of the Fund.  
 
 (d) No Member shall be required to enter into any such agreement so long as it uses solely 
the currency of another Member and so long as neither the Member nor the country whose currency is 
being used maintains exchange restrictions.  Never theless, if the Organization at any time considers that 
the absen ce of a special exchange agreement may be permitting action which tends to frustrate the 
purposes of any of the provisions of this Charter, it may require the Member to enter into a special 
exchange agreement in accordance with the pro visions of this para graph.  A Member of the Organ-
ization which is not a member of the Fund and which has not entered into a special exchange agreement 
may be required at any time to consult with the Organization on any exchange problem.  
 
7. A Member which is not a member of the Fund, whether or not it has entered into a special 
exchange agreement, shall furnish such information within the general scope of Section 5 of Article  VIII 
of the Articles of Agreement of the International Mone tary Fund as the Organization may require  in 
order to carry out its functions under this Charter.  
 
8.  Nothing in this Section shall preclude:  
 
 (a)the use by a Member of exchange controls or exchange restrictions in accordance with the 
Articles of Agreement or the International Monetary Fund or  with that Member's 
special exchange agreement with the Organ ization, or  
 
 (b)the use by a Member of restrictions or con trols on imports or exports, the sole effect of 
which, in addition to the effects permitted under Articles 20, 21, 22 and 23, is to make 
effective such exchange controls or ex change restrictions.  
 
 
  - 44 - 
 
SECTION C - SUBSIDIES  
 
Article  25  
 
Subsidies in General  
 
 
 If any Member grants or maintains any subsidy, including any form of income or price support, 
which operates directly or indirectly to maintain or increase exports of any product from, or to reduce, or 
prevent an increase in, imports of any product in to, its territory, the Member shall notify the 
Organization in writing of the extent and nature of the subsidization, of the estimated effect of the 
subsidization on the quantity of the affected product or products imported into or exported from its 
territ ory and of the circumstances making the subsidization necessary.  In any case in which a Member 
considers that serious prejudice to its interests is caused or threatened by any such subsidization, the 
Member granting the subsidy shall, upon request, discus s with the other Member or Members 
concerned, or with the Organization, the possibility of limiting the subsidization.  
 
 
Article 26  
 
Additional Provisions on Export Subsidies  
 
 
1. No Member shall grant, directly or indirectly, any subsidy on the export of any product, or 
establish or maintain any other system, which subsidy or system results in the sale of such product for 
export at a price lower than the comparable price charged fo r the like product to buyers in the domestic 
market, due allowance being made for differences in the conditions and terms of sale, for differences in 
taxation, and for other differences affecting price comparability.  
 
2. The exemption of exported products from duties or taxes imposed in respect of like products 
when consumed domestically, or the remission of such duties or taxes in amounts not in excess of those 
which have accrued, shall not be deemed to be in conflict with the provisions of paragraph 1. The use of 
the proceeds of such duties or taxes to make payments to domestic producers in general of those 
products shall be considered as a case under Article 25.  
 
3. Members shall give effect to the provisions of paragraph 1 at the earliest practicable dat e but not 
later than two years from the day on which this Charter enters into force.  If any Member considers 
itself unable to do so in respect of any particular product or products, it shall, at least three months 
before. the expiration of such period, gi ve notice in writing to the Organization, requesting a specific 
extension of the period.  Such notice shall be accompanied by a full analysis or the system in question 
and the circumstances justifying it.  The Organization shall then determine whether the extension 
requested should be made and, if so, on what terms.  
 
4. Notwithstanding the provisions of paragraph 1, any Member may subsidize the exports of any 
product to the extent and for such time as may be necessary to offset a subsidy granted by a nonMember 
affecting the Member's exports of the product.  However, the Member shall, upon the request of the 
Organization or of any other Member which considers that its interests are seriously prejudiced by such 
action, consult with the Orga nization or with t hat Member, as appropriate, with a view to reaching a 
satisfactory adjustment of the matter.  
 
  - 45 - 
 
Article 27  
 
Special Treatment of Primary Commodities  
 
 
1. A system for the stabilization of the domestic price or of the return to domestic producers of a 
primary commodity, independently of the move ments of export prices, which results at times in the sale 
of the commodity for export at a price lower than the c omparable price charged for the like commodity 
to buyers in the domestic market, shall be considered not to involve a subsidy on export within the 
meaning of paragraph 1 of Article 26, if the Organization determines that  
 
 (a)the system has also resulted, or is so designed as to result, in the sale of the commodity for 
export at a price higher than the comparable price charged for the like commodity to 
buyers in the domestic mar ket: and  
 
 (b)the system is so operated, or is designed so to operate, either because of the effective 
regulation of production or otherwise, as not to stimulate exports unduly or otherwise 
seriously prejudice the interests of other Members.  
 
2. Any Member granting a subsidy in respect of a primary commodity shall co- operate at all t imes 
in efforts to negotiate agreements, under the procedures set forth in Chapter VI, with regard to that 
commodity.  
 
3. In any case involving a primary commodity, if a Member considers that its interests would be 
seriously prejudiced by compliance with the provi sions of Article 26, or if a Member considers that its 
interests are seriously prejudiced by the granting of any form of subsidy, the procedures set forth in 
Chapter VI may be followed.  The Member which considers that its interests are thus seri ously preju-
diced shall, however, be exempt provisionally from the requirements of paragraphs 1 and 3 of Article 26 
in respect of that commodity, but shall be subject to the provisions of Article 28.  
 
4. No Member shall grant a new subsidy or increase an e xisting subsidy affecting the export of a 
primary commodity, during a commodity con ference called for the purpose of negotiating an 
inter-governmental control agreement for the com modity concerned unless the Organization concurs, in 
which case such new o r additional subsidy shall be subject to the provisions of Article 28. 
 
5. If the measures provided for in Chapter VI have not succeeded, or do not promise to succeed, 
within a reasonable period of time, or if the conclusion of a commodity agreement is not an appropriate 
solution, any Member which considers that its interests ar e seriously prejudiced shall not be subject to 
the requirements of paragraphs 1 and 3 of Article 26 in respect of that commodity, but shall be subject to 
the provisions of Article 28.  
 
 
Article 28  
 
Undertaking regarding Stimulation of Exports of Primary Commodities  
 
 
1. Any Member granting any form of subsidy, which operates directly or indirectly to maintain or 
increase the export of any primary commodity from its territory, shall not apply the subs idy in such a 
way as to have the effect of maintaining or acquiring for that Member more than an equitable share of 
world trade in that commodity.   - 46 - 
 
 
2. As required under the provisions of Article 25, the Member granting such subsidy shall 
promptly notify the Organization of the extent and nature of the subsidization, of the estimated effect of 
the subsidization on the quantity of the affected com modity exported from its territory, and of the cir -
cumstances making the subsidization necessary.  The Member sha ll promptly consult with any other 
Member which considers that serious prejudice to its interests is caused or threatened by the 
subsidization.  
 
3. If, within a reasonable period of time, no agreement is reached in such consultation, the 
Organization shall  determine what constitutes an equitable share of world trade in the commodity 
concerned and the Member granting the subsidy shall conform to this determination. 
 
4. In making the determination referred to in paragraph 3, the Organization shall take into a ccount 
any factors which may have affected or may be affecting world trade in the commodity concerned, and 
shall have particular regard to:  
 
 (a)the Member country's share of world trade in the commodity during a previous representative 
period;  
 
 (b)whether the Member country's share of world trade in the commodity is so small that the 
effect of the subsidy on such trade is likely to be of minor  significance;  
 
 (c)the degree of importance of the external trade in the commodity to the economy of the 
Member country granting, and to the economies of the Member countries materially 
affected by, the subsidy;  
 
 (d)the existence of price stabilization systems conforming to the provisions of paragraph 1 of 
Article 27;  
 
 (e)the desirability of facilitating the gradual expansion of production for export in those areas 
able to satisfy world market require ments of the commodity concerned in the most 
effectiv e and economic manner, and therefore of limiting any subsidies or other 
measures which make that expansion diffi cult. 
 
 
 
SECTION D - STATE  TRADING AND RELATED MATTERS 
 
Article 29  
 
Non-discriminatory Treatment  
 
 
1. (a) Each Member undertakes that if it establishes or maintains a state enterprise, wherever 
located, or grants to any enterprise, formally or in effect, exclusive or special privileges, such enterprise 
shall, in its purchases and sales involving either import s or exports, act in a manner consistent with the 
general principles of non- discriminatory treat ment prescribed in this Charter for governmental measures 
affecting imports or exports by private traders. 
 
 (b) The provisions of sub- paragraph (a) shall be u nderstood to require that such enterprises 
shall, having due regard to the other provisions of this Charter, make any such purchases or sales solely  - 47 - 
 
in accordance with commercial considerations, including price, quality, availability, marketability, 
transp ortation and other conditions of purchase or sale, and shall afford the enterprises of the other 
Member countries adequate opportunity, in accordance with customary business practice, to compete for 
participation in such purchases or sales.  
 
 (c) No Membe r shall prevent any enterprise (whether or not an enterprise described in sub-
-paragraph (a)) under its jurisdiction from acting in accordance with the principles of sub- paragraphs (a) 
and (b).  
 
2. The provisions of paragraph 1 shall not apply to imports o f products purchased for 
governmental purpose and not with a view to commercial resale or with a view to use in the production 
of goods for commercial sale.  With respect to such imports, and with respect to the laws, regulations 
and requirements referred to in paragraph 8 (a) of Article 18, each Member shall accord to the trade of 
the other Members fair and equitable treatment.  
 
 
Article 30  
 
Marketing Organizations  
 
 
 If a Member establishes or maintains a marketing board, commission or similar organizatio n, 
the Member shall be subject:  
 
 (a)with respect to purchases or sales by any such organization, to the provisions of paragraph 1 
of Article 29;  
 
 (b)with respect to any regulations of any such organization governing the operations of private 
enterprises, to the other relevant provisions of this Charter. 
 
 
Article 31  
 
Expansion of Trade  
 
 
1. If a Member establishes, maintains or author izes, formally  or in effect, a monopoly of the 
importation or exportation of any product, the Member shall, upon the request of, any other Member or 
Members having a substantial interest in trade with it in the product concerned, negotiate with such 
other Member or Memb ers in the manner  provided for under Article 17 in respect of tariffs, and subject 
to all the provisions of this Charter with respect to such tariff negotiations, with the object of achieving:  
 
 (a)in the case of an export monopoly, arrange ments designed to limit or reduce any protection 
that might be afforded through the operation of the monopoly to domestic users of the 
monopolized product, or designed to assure exports of the monopolized product in 
adequate quantities at reasonable prices;  
  - 48 - 
 
 (b)in the c ase of an import monopoly, arrange ments designed to limit or reduce any protection 
that might be afforded through the operation of the monopoly to domestic producers of 
the monopolized product, or designed to relax any limitation on imports which is 
compa rable with a limitation made subject to negotiation under other provisions of this 
Chapter.  
 
2. In order to satisfy the requirements of para graph 1 (b), the Member establishing, maintaining or 
authorizing a monopoly shall negotiate:  
 
 (a)for the establishment of the maximum im port duty that may be applied in respect of the 
product concerned; or  
 
 (b)for any other mutually satisfactory arrange ment consistent with the provisions of this 
Charter, if it is evident to the negotiating parties that to negotiate a maximum import 
duty under sub- paragraph (a) of this para graph is impracticable or would be ineffective 
for the achievement of the objecti ves of paragraph 1 any Member entering into 
negotiations under this sub- paragraph shall afford to other interested Members an 
oppor tunity for consultation. 
 
3. In any case in which a maximum import duty is not negotiated under paragraph 2 (a), the 
Member establishing, maintaining or authorizing the import monopoly shall make public, or notify the 
Organization of, the maximum import duty which it will apply in respect of the product concerned.  
 
4. The import duty negotiated under paragraph 2, or made public  or notified to the Organization 
under paragraph 3, shall represent the maximum margin by which the price charged by the import 
monopoly for the imported product (exclusive of internal taxes conforming to the provisions of 
Article  18, transportation, distr ibution and other expenses incident to the purchase, sale or further 
processing, and a reasonable margin of profit) may exceed the landed cost;  Provided that regard may 
be had to average landed costs and selling prices over recent periods; and Provided  further that, where 
the product concerned is a primary com modity which is the subject of a domestic price stabilization 
arrangement, provision may be made for adjustment to take account of wide fluctuations or variations in 
world prices, subject where a maxi mum duty has been negotiated to agreement be tween the countries 
parties to the negotiations.  
 
5. With regard to any product to which the provisions of this Article apply, the monopoly shall, 
wherever this principle can be effectively applied and subject  to the other provisions of this Charter, 
import and offer for sale such quantities of the product as will be sufficient to satisfy the full domestic 
demand for the imported product, account being taken of any rationing to consumers of the imported 
and like domestic product which may be in force at that time.  
 
6. In applying the provisions of this Article, due regard shall be had for the fact that some 
monopolies are established and operated mainly for social, cultural, humanitarian or revenue purposes.  
 
7. This Article shall not limit the use by Members of any form of assistance to domestic producers 
permitted by other provisions of this Charter.  
 
  - 49 - 
 
Article 32  
 
Liquidation of Non -commercial Stocks  
 
 
1. If a Member holding stocks of any primary commodity ac cumulated for non -commercial 
purposes should liquidate such stocks, it shall carry out the liquidation, as far as practicable, in a manner 
that will avoid serious disturbance to world markets for the commodity concerned.  
 
2. Such Member shall:  
 
 (a)give not less than four months public notice of its intention to  liquidate  such  stocks;  or  
 
 (b)give not less than four months prior notice to the Organization of such intention.  
 
3. Such Member shall, at the request of any Member which considers itself substantially 
interested, consult as to the best means of avoiding substantial injury to the economic interests of 
producers and consumers of the primary commodity in question.  In case s where the interests of several 
Members might be substantially affected, the Organization may participate in the consultations, and the 
Member holding the stocks shall give due consideration to its recommendations.  
 
4. The provisions of paragraphs 2 and 3 shall not apply to routine disposal of supplies necessary 
for the rotation of stocks to avoid deterioration.  
 
 
 
SECTION E -  GENERAL COMMERCIAL PROVISIONS  
 
Article 33  
 
Freedom of Transit  
 
 
1. Goods (including baggage), and also vessels and other means of transport, shall be deemed to 
be in transit across the territory of a Member country, when the passage across such terri tory, with or 
without trans -shipment, warehousing, breaking bulk or change in the mode of transport, is only a portion 
of a complete jo urney beginning and terminating beyond the frontier of the Member country across 
whose territory the traffic passes.  Traffic of this nature is termed in this Article "traffic in transit".  
 
2. There shall be freedom of transit through each Member country, via the routes most convenient 
for international transit, for traffic in transit to or from other Member countries.  No distinction shall be 
made which is based on the flag of vessels, the place of origin, departure, entry, exit or destination, or on 
any c ircumstances relating to the ownership of goods, of vessels or of other means of transport.  
 
3. Any Member may require that traffic in transit through its territory be entered at the proper 
custom house, but, except in cases of failure to comply with appli cable customs laws and regulations, 
such traffic coming from or going to other Member countries shall not be subject to any unnecessary 
delays or restrictions and shall be exempt from customs duties and from all transit duties or other 
charges imposed in respect of transit, except charges com mensurate with administrative expenses 
entailed by transit or with the cost of services rendered.  
  - 50 - 
 
4. All charges and regulations imposed by Mem bers on traffic in transit to or from other Member 
countries shall be reasonable, having regard to the conditions of the traffic.  
 
5. With respect to all charges, regulations and formalities in connection with transit, each Member 
shall accord to traffic in transit to or from any other Member country treatment no less favourab le than 
the treatment accorded to traffic in transit to or from any third country.  
 
6. The Organization may undertake studies, make recommendations and promote international 
agreement relating to the simplification of customs regulations concerning traffic in transit, the equi table 
use of facilities required for such transit and other measu res designed to promote the objectives of this 
Article.  Members shall co -operate with each other directly and through the Organization to this end.  
 
7. Each Member shall accord to goods which have been in transit through any other Member 
country treatment  no less favourable than that which would have been accorded to such goods had they 
been transported from their place of origin to their destination without going through such other Member 
country.  Any Member shall, however, be free to maintain its requir ements of direct consignment 
existing on the date of this Charter, in respect of any goods in regard to which such direct consignment 
is a requisite condition of eligibility for entry of the goods at preferential rates of duty or has relation to 
the Member 's prescribed method of valuation for customs purposes.  
 
8. The provisions of this Article shall not apply to the operation of aircraft in transit, but shall 
apply to air transit of goods (including baggage).  
 
 
Article 34  
 
Anti-dumping and Countervailing D uties 
 
 
1. The Members recognize that dumping, by which products of one country are introduced into the 
commerce of another country at less than the normal value of the products, is to be condemned if it 
causes or threatens material injury to an established industry in a Member country or ma terially retards 
the establishment of a domestic industry.  For the purposes of this Article, a product is to be considered 
as being introduced into the commerce of an importing country at less than its normal value, if  the price 
of the product exported from one country to another  
 
 (a)is less than the comparable price, in the ordinary course of trade, for the like product when 
destined for consumption in the exporting country, or,  
 
 (b)in the absence of such domestic price, is less than either  
 
  (i)the highest comparable price for the like product for export to any third country in the 
ordinary course of trade, or  
 
  (ii)the cost of production of the product in the country of origin plus a reasonable 
addition for selling cost and profit.  
 
Due allowance shall be made in each case for differences in conditions and terms of sale, for differences 
in taxation, and for other differences affecting price comparability.  
 
2. In order to offset or prevent dumping, a Mem ber may levy on any dumped product an  - 51 - 
 
anti-dumping duty not greater in amount than the margin of dumping in respect of such product.  For 
the purposes of this Article, the margin of dumping is the price difference determined in ac cordance 
with the provisions of paragraph 1. 
 
3. No countervailing duty shall be levied on any product of any Member country imported into 
another Member country in excess of an amount equal to the estimated bounty or subsidy determined to 
have been grante d, directly or indirectly, on the manufacture, production or export of such product in the 
country of origin or exportation, including any special subsidy to the transportation of a particular 
product.  The term "countervailing duty" shall be understood to mean a special duty levied for the 
purpose of offsetting any bounty or subsidy bestowed, directly or indirectly, upon the manufacture, 
production or export of any merchandise.  
 
4. No product of any Member country imported into any other Member country sha ll be subject to 
anti-dumping or countervailing duty by reason of the exemption of such product from duties or taxes 
borne by the like product when destined for con sumption in the country of origin or exportation, or by 
reason of the refund of such duties  or taxes.  
 
5. No product of any Member country imported into any other Member country shall be subject to 
both anti -dumping and countervailing duties to compensate for the same situation of dumping or export 
subsidization.  
 
6. No Member shall levy any anti -dumping or countervailing duty on the importation of any, 
product of another Member country unless it determines that the effect of the dumping or subsidization, 
as the case may be, is such as to cause or threaten material inj ury to an established domestic industry, or 
is such as to retard materially the establishment of a domestic industry.  The Organization may waive 
the requirements of this paragraph so as to permit a Member to levy an anti -dumping or countervailing 
duty on the importation of any product for the purpose of offsetting dumping or subsidization which 
causes or threatens material injury to an industry in another Member country exporting the product 
concerned to the importing Member country.  
 
7. A system for the s tabilization of the domestic price or of the return to domestic producers of a 
primary commodity, independently of the move ments of export prices, which results at times in the sale 
of the commodity for export at a price lower than the comparable price ch arged for the like commodity 
to buyers in the domestic market, shall be presumed not to result in material injury within the meaning 
of paragraph 6 if it is determined by consultation among the Members substantially interested in the 
commodity concerned that: 
 
 (a)the system has also resulted in the sale of the commodity for export at a price higher than the 
comparable price charged for the like commodity to buyers in the domestic market, and 
 
 (b)the system is so operated, either because of the effective r egulation of production, or 
otherwise, as not to stimulate exports unduly or otherwise seriously prejudice the 
interests of other Members.  
 
  - 52 - 
 
Article 35  
 
Valuation for Customs Purposes  
 
 
1. The Members shall work toward the stand ardization, as far as practicable, of definitions of 
value and of procedures for determining the value of products subject to customs duties or other charges 
or restrictions based upon or regulated in any manner by value.  With a view to furthering co -operation 
to this end, the Organization may study and recommend to Members such bases and methods for 
determining value for customs purposes as would appear best suited to the needs of commerce and most 
capable of genera l adoption.  
 
2. The Members recognize the validity of the general principles of valuation set forth in 
paragraphs  3, 4 and 5, and they undertake to give effect, at the earliest practicable date, to these 
principles in respect of all products subject to dut ies or other charges or restrictions on importation based 
upon or regulated in any manner by value.  Moreover, they shall, upon a request by another Member 
directly affected, review in the light of these principles the operation of any of their laws or re gulations 
relating to value for customs purposes.  The Organization may request from Members reports on steps 
taken by them in pursuance of the provisions of this Article.  
 
3. (a) The value for customs purposes of im ported merchandise should be based on the actual 
value of the imported merchandise on which duty is assessed, or of like merchandise, and should not be 
based on the value of merchandise of national origin or on arbitrary or fictitious values. 
 
 (b) "Actual value" should be the price at which, at a time and place determined by the 
legislation of the country of importation, and in the ordinary course of trade, such or like merchandise is 
sold or offered for sale under fully competitive conditions.  To the extent to which the price of such or 
like merchandise is governed by the quantity in a particular transaction, the price to be considered 
should uniformly be related to either (i)  comparable quantities, or (ii)  quantities not less favourable to 
importers than those in which the greater volume of the merchandise is sold in the trade between the 
countries of exportation and importation.  
 
 (c) When the actual value is not ascertainable in accordance with sub- paragraph (b), the 
value for customs purposes should be based on the nearest ascertainable eq uivalent of such value.  
 
4. The value for customs purposes of any im ported product should not include the amount of any 
internal tax, applicable within the country of origin or export, from which the imported product has been 
exempted or has been or will be relieved by means of refund. 
 
5. (a) Except as otherwise provided in this paragraph, where it is necessary for the purposes 
of paragraph 3 for a Member to convert into its own currency a price expressed in the currency of 
another country, the conversion rate of exchange to be used shall be based on the par values of the 
currencies involved, as established pursuant to the Articles of Agreement of the international Monetary 
Fund or by special exchange agreements entered into pursuant to Article 24 of this Charter.  
 
 (b) Where no such par value has been estab lished, the conversion rate shall reflect 
effectively the current value of such currency in commercial transactions.  
 
 (c) The Organization, in agreement with the International Monetary Fund, shall formulate 
rules governing the conversion by Members of any foreign currency in respect of which multiple rates 
of exchange are maintained consistently with the Articles of Agreement  of the International Monetary  - 53 - 
 
Fund.  Any Member may apply such rules in respect of such foreign currencies for the purposes of 
paragraph 3 of this Article as an alternative to the use of par values.  Until such rules are adopted by the 
Organization, any M ember may employ, in respect of any such foreign currency, rules of conversion for 
the purposes of paragraph 3 of this Article which are designed to reflect effectively the value of such 
foreign currency in commercial transactions.  
 
6. Nothing in this Art icle shall be construed to require any Member to alter the method of 
converting currencies for customs purposes which is applicable in its territory on the date of this 
Charter, if such alteration would have the effect of increasing generally the amounts of duty payable.  
 
7. The bases and methods for determining the value of products subject to duties or other charges 
or restrictions based upon or regulated in any manner by value should be stable and should be given 
sufficient publicity to enable traders t o esti mate, with a reasonable degree of certainty, the value for 
customs purposes.  
 
 
Article 36  
 
Formalities connected with Importation and Exportation 
 
 
1. The Members recognize that all fees and charges of whatever character (other than import and 
expor t duties and other than taxes within the purview of Article 18) imposed by governmental 
authorities on or in connection with importation or exportation should be limited in amount to the 
approximate cost of services rendered and should not represent an indirect protection to domestic 
products or a taxation of imports or exports for fiscal purposes.  The Members also recognize the need 
for reducing the number and diversity of such fees and charges, for minimizing the incidence and 
complexity of import and export formalities, and for decreasing and simplifying import and export 
documentation requirements. 
 
2. The Members shall take action in accordance with the principles and objectives of paragraph  1 
at the earliest practicable date.  Moreover, they shall, up on request by another Member directly 
affected, review the operation of any of their laws and regulations in the light of these principles.  The 
Organization may request from Members reports on steps taken by them in pursuance of the provisions 
of this par agraph.  
 
3. The provisions of paragraphs 1 and 2 shall extend to fees, charges, formalities and requirements 
imposed by governmental authorities in connection with importation and exportation, including those 
relating to:  
 
 (a)consular transactions, such as those relating to consular invoices and certificates;  
 
 (b)quantitative restrictions;  
 
 (c)licensing;  
 
 (d)exchange control;  
 
 (e)statistical services;  
 
 (f)documents, documentation and certification;   - 54 - 
 
 (g)analysis and insp ection;  and  
 
 (h)quarantine, sanitation and fumigation.  
 
4. The Organization may study and recommend to Members specific measures for the 
simplification and standardization of customs formalities and tech niques and for the elimination of 
unnecessary cust oms requirements, including those relating to advertising matter and samples for use 
only in taking orders for merchandise.  
 
5. No Member shan impose substantial penalties for minor breaches of customs regulations or 
procedural requirements.  In particular , no penalty in respect of any omission or mistake in customs 
documentation which is easily rectifiable and obviously made without fraudulent intent or gross 
negligence shall be greater than necessary to serve merely as a warning.  
 
6. The Members recognize that tariff descriptions based on distinctive regional or geographical 
names should not be used in such a manner as to discriminate against products of Member countries.  
Accordingly, the Members shall co- operate with each other directly and through the Organization with a 
view to eliminating at the earliest practicable date practices which are inconsistent with this principle.  
 
 
Article 37  
 
Marks of Origin  
 
 
1. The Members recognize that, in adopting and implementing la ws and regulations relating to 
marks of origin, the difficulties and inconveniences which such measures may cause to the commerce 
and industry of exporting countries should be reduced to a minimum.  
 
2. Each Member shall accord to the products of each other  Member country treatment with regard 
to marking requirements no less favourable than the treatment accorded to like products of any third 
country.  
 
3. Whenever it is administratively practicable to do so, Members should permit required marks of 
origin to be affixed at the time of importation.  
 
4. The laws and regulations of Members relating to the marking of imported products shall be such 
as to permit compliance without seriously damaging the products or materially reducing their value or 
unreasonably inc reasing their cost.  
 
5. The Members agree to work in co -operation through the Organization towards the early 
elimination of unnecessary marking requirements.  The Organization may study and recommend to 
Mem bers measures directed to this end, including the  adoption of schedules of general categories of 
products, in respect of which marking requirements operate to restrict trade, to an extent disproportion-
ate to any proper purpose to be served, and which shall not in any case be required to be marked to 
indicate their origin.  
 
6. As a general rule no special duty or penalty should be imposed by any Member for failure to 
comply with marking requirements prior to impor tation unless corrective marking is unreasonably 
delayed or deceptive marks have been affixed or the required marking has been intentionally omitted.  
  - 55 - 
 
7. The Members shall co -operate with each other directly and through the Organization with a 
view to preventing the use of trade names in such manner as to misrepresent the true origin of a product , 
to the detriment of the distinctive regional or geogra phical names of products of a Member country 
which are protected by the legislation of such country.  Each Member shall accord full and sym pathetic 
consideration to such requests or represen tations  as may be made by any other Member regarding the 
application of the undertaking set forth in the preceding sentence to names of products which have been 
communicated to it by the other Member.  The Organization may recommend a conference of 
interested Mem bers on this subject.  
 
 
Article 38  
 
Publication and Administration of Trade Regulations  
 
 
1. Laws, regulations, judicial decisions and ad minis trative rulings of general application made 
effective by any Member, pertaining to the classifi cation or the valuation of products for customs 
purposes, or to rates of duty, taxes or other charges, or to requirements, restrictions or prohibitions on 
impor ts or exports or on the transfer of payments therefor, or affecting their sale, distribution, trans -
portation, insurance, warehousing, inspection, exhibition, processing, mixing or other use, shall be 
published promptly in such a manner as to enable gover nments and traders to become acquainted with 
them.  Agreements affecting international trade policy which are in force between the government or 
governmental agency of any Member country and the government or governmental agency of any other 
country shall also be published.  Copies of such laws, regulations, decisions, rulings and agree ments 
shall be communicated promptly to the Or ganization.  The provisions of this paragraph shall not require 
any Member to divulge confidential information the disclosure of which would impede law enforcement 
or otherwise be contrary to the public interest or would prejudice the legitimate commercial interests of 
particular enterprises, public or private.  
 
2. No measure of general application taken by any Member effecting a n advance in a rate of duty 
or other charge on imports under an established and uniform practice or imposing a new or more 
burdensome requirement, restriction or prohibition on imports, or on the transfer of payments therefor, 
shall be enforced before such  measure has been officially made public.  
 
3. (a) Each Member shall administer in a uniform, impartial and reasonable manner all its 
laws, regulations, decisions and rulings of the kind described in paragraph 1. Suitable facilities shall be 
afforded for traders directly affected by any of those matters to consult with the appropriate 
governmental authorities.  
 
 (b) Each Member shall maintain, or institute as soon as practicable, judicial, arbitral or 
adminis trative tribunals or procedures for the purpose, inter alia , of the prompt review and correction of 
administrative action relating to customs matters.  Such tribunals or procedures shall be independent of 
the agencies entrusted with administrative en forcement and their decisions shall be implemented by, and 
shall govern the practice of, such agencies unless an appeal is lodged with a court or tribunal of superior 
jurisdiction within the time prescribed for appeals to be lodged by importers;  Provided  that the central 
administration of such agency may take steps to obtain a review of the matter in another proceeding if 
there is good cause to believe that the decision is inconsistent with established principles of law or the 
actual facts.  
 
 (c) The provisions of sub- paragraph (b) shall not require the elimination or substitution of 
procedures in force in a Member country on the date of this Charter which in fact provide for an  - 56 - 
 
objective and impartial review of administrative action, even though such procedures are not fully or 
formally independent of the agencies entrusted with admi nistrative enforcement.  Any Member 
employing such procedures shall, upon request, furnish the Organization with full information thereon in 
order that the Organizati on may determine whether such procedures conform to the requirements of this 
sub-paragraph. 
 
 
Article 39  
 
Information, Statistics and Trade Terminology  
 
 
1. The Members shall communicate to the Or ganization, or to such agency as may be designated 
for the purpose by the Organization, as promptly and in as much detail as is reasonably practicable:  
 
 (a)statistics of their external trade in goods (imports, exports and, where applicable, re -exports, 
transit and trans- shipment and goods in warehouse or in bond) ; 
 
 (b)statistics of governmental revenue from import and export duties and other taxes on goods 
moving in International trade and, in so far as readily ascertainable, of subsidy 
payments affecting such trade. 
 
2. So far as possible, the statistics referred to  in paragraph 1 shall be related to tariff classifications 
and shall be in such form as to reveal the operation of any restrictions on importation or exportation 
which are based on or regulated in any manner by quantity or value or amounts of exchange made  
available.  
 
3. The Members shall publish regularly and as promptly as possible the statistics referred to in 
paragraph 1.  
 
4. The Members shall give careful consideration to any recommendations which the Organization 
may make to them with a view to improv ing the statistical information furnished under paragraph 1. 
 
5. The Members shall make available to the Organization, at its request and in so far as is 
reasonably practicable, such other statistical information as the Organization may deem necessary to 
enable it to fulfil its functions, provided that such information is not being furnished to other 
inter-governmental organizations from which the Organization can obtain it.  
 
6. The Organization shall act as a centre for the collection, exchange and publication of statistical 
information of the kind referred to in paragraph 1. The Organization, in collaboration with the Economic 
and Social Council of the United Nations, and with any other organization deemed appropriate, may 
engage in studies with a view to  improving the methods of collecting, analysing and publishing 
economic statistics and may promote the international comparability of such statistics, including the 
possible international adoption of standard tariff and commodity classifications.  
 
7.  The Organization, in co- operation with the other organizations referred to in paragraph 6, may 
also study the question of adopting standards, nomenclatures, terms and forms to be used in international 
trade and in the official documents and statistics of Membe rs relating thereto, and may recommend the 
general acceptance by Members of such standards, nomenclatures, terms and forms.  
 
  - 57 - 
 
 
SECTION F -  SPECIAL  PROVISIONS  
 
Article 40  
 
Emergency Action on Imports of Particular Products  
 
 
1. (a) If, as a result of unforeseen developments and of the effect of the obligations incurred 
by a Member under or pursuant to this Chapter, including tariff concessions, any product is being 
imported into the territory of that Member in such relatively increased quantities and under such 
conditions as to cause or threaten serious injury to domestic producers in that territory of like or directly 
competitive products, the Member shall be free, in respe ct of such product, and to the extent and for 
such time as may be necessary to prevent or remedy such injury, to suspend the obligation in whole or in 
part or to withdraw or modify the concession.  
 
 (b) If any product which is the subject of a concession w ith respect to a preference is being 
imported into the territory of a Member in the circumstances set forth in sub -paragraph (a), so as to 
cause or threaten serious injury to domestic producers of like or directly competitive products in the 
territory of a  Member which receives or received such preference, the importing Member shall be free, 
if that other Member so requests, to suspend the relevant obligation in whole or in part or to withdraw or 
modify the concession in respect of the product, to the extent and for such time as may be necessary to 
prevent or remedy such injury. 
 
2. Before any Member shall take action pursuant to the provisions of paragraph 1, it shall give 
notice in writing to the Organization as far in advance as may be practicable and shall afford the 
Organization and those Members having a substantial interest as exporters of the product concerned an 
opportunity to consult with it in respect of the proposed action.  When such notice is given in regard to 
a concession relating to a preference, the notice shall name the Member which has requested the action.  
In circum stances of special urgency, where delay would cause damage which it would be difficult to 
repair, action under paragraph 1 may be taken provisionally without prior consultation, on the condition 
that consultation shall be effected immediately after taking such action.  
 
3. (a) If agreement among the interested Mem bers with respect to the action is not reached, 
the Member which proposes to take or continue the action shall, nevertheless, be free to do so, and if 
such action is taken or continued, the affected Members shall then be free, not later than ninety days 
after such action is taken, to suspend, upon the expiration of thirty days from the day on which written 
notice of such suspension is received by the Organization, the application to the trade of the Member 
taking such action, or, in the case envis aged in paragraph 1 (b), to the trade of the Mem ber requesting 
such action, of such substantially equivalent obligations or  concessions under or pursuant to this Chapter 
the suspension of which the Organization does not disapprove. 
 
 (b) Notwithstanding the provisions of sub- paragraph (a), where action is taken without 
prior consultation under paragraph 2 and causes or threatens serious injury in the territory of a Member 
to the domestic producers of products affected by the action, that Member shall, where delay would 
cause damage difficult to repair, be free to suspend, upon the taking of the action and throughout the 
period of consultation, such obligations or concessions as may be necessary to prevent or remedy the 
injury.  
  - 58 - 
 
4. Nothing in this Article shall be construed  
 
 (a)to require any Member, in connection with the withdrawal or modification by such Member 
of any concession negotiated pur suant to Article 17, to consult with or obtain the 
agreement of Members others than those Members which are contracting parties to the 
General Agreement on Tariffs and Trade, or  
 
 (b)to authorize any Member which is not a contracting party to that Agreement, to withdraw 
from or suspend obligations under this Charter by reason of the withdrawal or 
modification of such concession. 
 
 
Article 4 1 
 
Consultation  
 
 
 Each Member shall accord sympathetic consid eration to, and shall afford adequate opportunity 
for consultation regarding, such representations as may be made by any other Member with respect to 
the operation of customs regulations and for malities, anti -dumping and countervailing duties, 
quantitativ e and exchange regulations, internal price regulations, subsidies, transit regulations and 
practices, state trading, sanitary laws and regulations for the protection of human, animal or plant life or 
health, and generally with respect to all matters affecting the operation of this Chapter. 
 
 
Article 42  
 
Territorial Application of Chapter IV  
 
 
1. The provisions of Chapter IV shall apply to the metropolitan customs territories of the Members 
and to any other customs territories in respect of which this Chart er has been accepted in accordance 
with the provisions of Article 104.  Each such customs territory shall, exclusively for the purpose; of 
the territorial application of Chapter IV, be treated as though it were a Member;  provided that the 
provisions of this paragraph shall not be construed to create any rights or obligations as between two or 
more customs territories in respect of which this Charter has been accepted by a single Member.  
 
2. For the purposes of this Chapter a customs territory shall be understood to mean any territory 
with respect to which separate tariffs or other regulations of commerce are maintained for a substantial 
part of the trade of such territory with other territories.  
 
  - 59 - 
 
Article 43  
 
Frontier Traffic  
 
 
 The provisions of this Chapter shall not be construed to prevent:  
 
 (a)advantages accorded by any Member to adjacent countries in order to facilitate frontier 
traffic;  
 
 (b)advantages accorded to the trade with the free Territory of Trieste by countries c ontiguous to 
that territory, provided that such advantages are not in conflict with the Treaties of 
Peace arising out of the Second World War. 
 
 
Article 44  
 
Customs Unions and Free -Trade Areas  
 
 
1. Members recognize the desirability of in creasing freedom of trade by the development, through 
voluntary agreements, of closer integration between the economies of the countries parties to such 
agreements.  They also recognize that the purpose of a customs  union or free -trade area should be to 
facilitate trade between the parties and not to raise barriers to the trade of other Member coun tries with 
such parties.  
 
2. Accordingly, the provisions of this Chapter shall not prevent, as between the territories o f 
Members, the formation of a customs union or of a free -trade area or the adoption of an interim 
agreement necessary for the formation of a customs union or of a free -trade area;  Provided  that: 
 
 (a)with respect to a customs union, or an interim agreemen t leading to the formation of a 
customs union, the duties and other regulations of commerce imposed at the institution 
of any such union or interim agreement in respect of trade with Member countries not 
parties to such union or agreement shall not on the whole be higher or more restrictive 
than the general incidence of the duties and regulations of commerce applicable in the 
constituent territories prior to the formation of such union or the adoption of such 
interim agreement, as the case may be;  
 
 (b)with  respect to a free- trade area, or an in terim agreement leading to the formation of a 
free-trade area, the duties and other regulations of commerce maintained in each of the 
constituent territories and applicable at the formation of such free -trade area, t he duties 
and other regulations of commerce maintained in each of the constituent territories and 
applicable at the formation of such free- trade area or the adoption of such interim 
agreement to the trade of Member countries not included in such area or no t parties to 
such agreement shall not be higher or more restrictive than the corresponding duties 
and other regulations of commerce existing in the same constituent territories prior to 
the formation of the free -trade area, or interim agreement, as the case may be; and  
  - 60 - 
 
 (c)any interim agreement referred to in sub- paragraphs (a) or (b) shall include a plan and 
schedule for the formation of such a customs union or of such a free- trade area within a 
reasonable length of time.  
 
3. (a) Any Member deciding to enter into a customs union or free -trade area, or an interim 
agreement leading to the formation of such a union or area, shall promptly notify the Organization and 
shall make available to it such information regarding the proposed union or area as will enable the 
Organization to make such reports and recommendations to Members as it may deem appropriate.  
 
 (b) If, after having studied the plan and schedule provided for in an interim agreement 
referred to in paragraph 2 in consultation  with the parties to that agreement and taking due account of 
the information made available in accordance with the provisions of sub- paragraph (a), the Organization 
finds that such agreement is not likely to result in the formation of a customs union or of a free -trade 
area within the period contemplated by the parties to the agreement or that such period is not a 
reasonable one, the Organization shall make recommendations to the parties to the agreement.  The 
parties shall not maintain or put into force,  as the case may be, such agreement if they are not prepared 
to modify it in accordance with these recommendations. 
 
 (c) Any substantial change in the plan or schedule referred to in paragraph 2 (c) shall be 
communicated to the Organization, which may request the Members concerned to consult with it if the 
change seems likely to jeopardize or delay unduly the formation of the customs union or of the 
free-trade area.  
 
4. For the purposes of this Charter:  
 
 (a)a customs union shall be understood to mean the substitution of a single customs territory for 
two or more customs territories, so that  
  
  (i)duties and other restrictive regulations of commerce (except, where necessary, those 
permitted under Section B of Chapter IV and under Article  45) are eliminated  
with respect to substantially all the trade between the constituent territories of 
the union or at least with respect to substantially all the trade in products 
originating in such territories, and, 
 
  (ii)subject to the provisions of paragraph 5, substantially the same duties and other 
regulations of commerce are applied by each of the members of the union to 
the trade of territories not included in the union;  
 
 (b)a free -trade area shall be understood to mean a group of two or more customs territories in 
which the duties and other restric tive regulations of commerce (except, where 
necessary, those permitted under Section B of Chapter IV and under Article 45) are 
eliminated on substantially all the trad e between the constituent territories in products 
originating in such territories. 
 
5. The preferences referred to in paragraph 2 of Article 16 shall not be affected by the formation of 
a customs union or of a free - trade area but may be eliminated or adj usted by means of negotiations with 
Members affected.  This procedure of negotiations with affected Members shall, in particular, apply to 
the elimination of preferences required to conform with the provisions of paragraph 4 (a) (i) and 
paragraph 4 (b).  
  - 61 - 
 
6. The Organization may, by a two- thirds majority of the Members present and voting, approve 
proposals which do not fully comply with the re quirements of the preceding paragraphs, provided that 
such proposals lead to the formation of a customs union or of a free- trade area in the sense of this 
Article.  
 
 
Article 45  
 
General Exceptions to Chapter IV  
 
 
1.  Subject to the requirement that such measures are not applied in a manner which would 
constitute a means of arbitrary or unjustifiable discrimination between Member countries where the 
same conditions prevail, or a disguised restriction on international t rade, nothing in this Chapter shall be 
construed to prevent the adoption or enforcement by any Member of measures:  
 
 (a)(i) necessary to protect public morals;  
 
  (ii)necessary to the enforcement of laws and regulations relating to public safety;  
 
  (iii)n ecessary to protect human, animal or plant life or health;  
 
  (iv)relating to the importation or exporta tion of gold or silver;  
 
  (v)necessary to secure compliance with laws or regulations which are not inconsistent 
with the provisions of this Chapter, including those relating to customs 
enforcement, the enforcement of monopolies operated under Section D of this 
Chapter, the protecti on of patents, trade marks and copyrights, and the 
prevention of deceptive practices;  
 
  (vi)relating to the products of prison labour;  
 
  (vii)imposed for the protection of national treasures of artistic, historic or 
archaeological value;  
 
  (viii)relatin g to the conservation of exhaustible natural resources if such measures are 
made effective in con junction with restrictions on domestic production or 
consumption;  
 
  (ix)taken in pursuance of inter -governmental commodity agreements concluded in 
accordan ce with the provisions of Chapter  VI; 
 
  (x)taken in pursuance of any inter -governmental agreement which relates solely to the 
conservation of fisheries resources, migratory birds or wild animals and which 
is subject to the requirements of paragraph 1(d) of Article 70;  or  
 
  (xi)involving restrictions on exports of domestic materials necessary to assure essential 
quantities or such materials to a domestic processing industry during periods 
when the domestic price of such materials is held below the world price as part 
of a governmental stabilization plan;  Provided  that such restrictions shall not 
operate to increase the exports of or the protection afforded to such domestic  - 62 - 
 
industry and shall not depart from the provisions of this Chapter relating to 
non-discrimination;  
 
 (b) (i)essential to the acquisition or distribution of products in general or local short supply; 
 Provided  that any such measures shall be consistent with any general 
inter-governmental arrangements directed to an equitable internationa l 
distribution of such products or, in the absence of such arrangements, with the 
principle that all Members are entitled to an equitable share of the international 
supply of such products;  
 
  (ii)essential to the control of prices by a Member country experiencing short ages 
subsequent to the Second World War; or  
 
  (iii)essential to the orderly liquidation of temporary surpluses of stocks owned or 
controlled by the government of any Member country, or of industries 
developed in any Member country owing to the exigencies of the Second 
World War which it would be uneconomic to maintain in normal condi tions; 
Provided  that such measures shall not be instituted by any Member except after 
consultati on with other interested Members with a view to appropriate 
international action.  
 
2. Measures instituted or maintained under paragraph 1(b) which are inconsistent with the other 
provisions of this Chapter shall be removed as soon as the conditions giving rise to them have ceased, 
and in any event not later than at a date to be specified by the Organization;  Provided  that such date 
may be deferred for a further period or periods, with the concurrence of  the Organization, either 
generally or in relation to particular measures taken by Members in respect of particular products.  
  - 63 - 
 
CHAPTER V  
  
RESTRICTIVE BUSINESS PRACTICES  
 
Article 46  
 
General Policy towards Restrictive Business practices  
 
 
1. Each Member shall take appropriate measures and shall co -operate with the Organization to 
prevent, on the part of private or public com mercial enterprises, business practices affecting 
internation al trade which restrain competition, limit access to markets, or foster monopolistic control, 
whenever such practices have harmful effects on the expansion of production or trade and interfere with 
the achievement of any of the other objectives act forth i n Article 1.  
 
2. In order that the Organization may decide in a particular instance whether a practice has or is 
about to have the effect indicated in paragraph 1, the Members agree, without limiting paragraph 1, that 
complaints regarding any of the practi ces listed in paragraph 3 shall be subject to investigation in 
accordance with the procedure regarding complaints provided for in Articles 48 and 50, whenever  
 
 (a)such a complaint is presented to the Organization, and  
 
 (b)the practice is engaged in, or m ade effective, by one or more private or public commercial 
enterprises or by any combination, agreement or other arrangement between any such 
enterprises, and  
 
 (c)such commercial enterprises, individually or collectively, possess effective control of trade 
among a number of countries in one or more products.  
 
3. The practices referred to in paragraph 2 are the following:  
 
 (a)fixing prices, terms or conditions to be observed in dealing with others in the purchase, sale 
or lease of any product:  
 
 (b)excluding enterprises from, or allocating or dividing, any territorial market or field of 
business activity, or allocating customers, or fixing sales quotas or purchase quotas;  
 
 (c)discriminating against particular enterprises;  
 
 (d)limiting production or fixing production quotas;  
 
 (e)preventing by agreement the development or application of technology or invention whether 
patented or unpatented;  
 
 (f)extending the use of rights under patents, trade marks or copyrights granted by any Member 
to matters which, according to its laws and regulations, are not within the scope of such 
grants, or to products or conditions of production, use or sale which are likewise not the 
subject of such grants;  
  - 64 - 
 
 (g)any similar practices which the Organization may declare,  by a majority of two- thirds of the 
Members present and voting, to be restrictive business practices.  
 
 
Article 47  
 
Consultation Procedure  
 
 
 Any affected Member which considers that in any particular instance a practice exists (whether 
engaged in by private or public commercial enter prises) which has or is about to have the effect 
indicated in paragraph 1 of Article 46 may consult other Member s directly or request the Organization 
to arrange for consultation with particular Members with a view to reaching mutually satisfactory 
conclusions.  If requested by the Member and if it considers such action to be justified, the Organiza tion 
shall arran ge for and assist in such consultation.  Action under this Article shall be without prejudice to 
the procedure provided for in Article 48.  
 
Article 48  
 
Investigation Procedure  
 
 
1. In accordance with paragraphs 2 and 8 of Article 46, any affected Member on its own behalf or 
any Member on behalf of any affected person, enterprise or organization within that Member's 
jurisdiction, may present a written complaint to the Organization that in any particular instance a 
practice exists (whether engaged in by priva te or public commercial enterprises) which has or is about to 
have the effect indicated in paragraph 1 of Article 46;  Provided  that in the case of complaints against a 
public commercial enterprise acting independently of any other enterprise, such compla ints may be 
presented only by a Member on its own behalf and only after the Member has resorted to the procedure 
of Article 47. 
 
2. The Organization shall prescribe the minimum information to be included in complaints under 
this Article.  This information shall give substantial indication of the nature and harmful effects of the 
practices.  
 
3. The Organization shall consider each complaint presented in accordance with paragraph 1. If 
the Organization deems it appropriate, it shall request Members concerned to furnish supplementary 
information, for example, information from commercial enterprises within their jurisdiction.  After 
reviewing the relevant information, the Organization shall decide whether an investigation is justified.  
 
4. If the Organization de cides that an investigation is justified, it shall inform all Members of the 
complaint, request any Member to furnish such additional information relevant to the complaint as the 
Organization may deem necessary, and shall conduct or arrange for hearings on  the complaint. Any 
Member, and any person, enterprise or organization on whose behalf the complaint has been made, as 
well as the commercial enterprises alleged to have engaged in the practice complained of, shall be 
afforded reasonable opportunity to be heard. 
 
5. The Organization shall review all information available and decide whether the conditions 
specified in paragraphs 2 and 3 of Article 46 are present and the practice in question has had, has or is 
about to have the effect indicated in paragraph 1 of that Article.  
  - 65 - 
 
6. The Organization shall inform all Members of its decision and the reasons therefore.  
 
7. If the Organization decides that in any partic ular case the conditions specified in 
paragraphs  2 and 3 of Article 46 are present and that the practice in question has had, has or is about to 
have the effect indicated in paragraph 1 of that Article, it shall request each Member concerned to take 
every possible remedial action, and may also recommend to th e Members concerned remedial measures 
to be carried out in accordance with their respective laws and procedures.  
 
8. The Organization may request any Member concerned to report fully on the remedial action it 
has taken in any particular case.  
 
9. As soon a s possible after its proceedings in respect of any complaint under this Article have 
been provisionally or finally closed, the Organization shall prepare and publish a report showing fully 
the decisions reached, the reasons therefore and any measures recom mended to the Members concerned. 
 The Organization shall not, if a Member so requests, disclose confidential information fur nished by that 
Member, which if disclosed would substantially damage the legitimate business inter ests of a 
commercial enterprise.  
 
10. The Organization shall report to all Members and make public the remedial action which has 
been taken by the Members concerned in any particular case.  
 
Article 49  
 
 Studies relating to Restrictive Business Practices  
 
 
1. The Organization is authorize d: 
 
 (a)to conduct studies, either on its own initia tive or at the request of any Member or of any 
organ of the United Nations or of any other inter -governmental organization, rela ting to  
 
  (i)general aspects of restrictive business practices affecting international trade;  
 
  (ii)conventions, laws and procedures concerning, for example, incorporation, company 
registration, investments, se curities, prices, markets, fair trade practices, trade  
marks, copyrights, pat ents and the exchange and development of technology in 
so far as they are rele vant to restrictive business practices affecting 
international trade;  and  
 
  (iii)the registration of restrictive business agreements and other arrangem ents affecting 
international trade;  and  
 
 (b)to request information from Members in connection with such studies.  
 
2. The Organization is authorized:  
 
 (a)to make recommendations to Members concerning such conventions, laws and procedures as 
are relevant to their obligations under this Chapter;  and 
  - 66 - 
 
 (b)to arrange for conferences of Members to discuss any matters relating to restrictive business 
practices affecting international trade.  
 
Article 50  
 
Obligations of Members  
 
 
1. Each Member shall take all possible measures by legislation or otherwise, in accordance with its 
constitution or system of law and economic organization, to ensure, within its jurisdiction, that private 
and public commercial enterprises do not engage in pr actices which are as specified in paragraphs 2 and 
3 of Article 46 and have the effect indicated in paragraph 1 of that Article, and it shall assist the 
Organization in preventing these practices.  
 
2. Each Member shall make adequate arrange ments for presenting complaints, conducting 
investigations and preparing information and reports requested by the Organization. 
 
3. Each Member shall furnish to the Organization, as promptly and as fully as possible, such 
information as is requested by the Organization f or its consideration and investigation of complaints and 
for its conduct of studies under this Chapter;  Provided  that any Member on notification to the 
Organization, may withhold information which the Member considers is not essential to the 
Organization in conducting an adequate investigation and which, if disclosed, would substantially 
damage the legitimate business interests of a commercial enterprise.  In notifying the Organization that 
it is withholding information pursuant to this clause, the Member shall indicate the general character of 
the information withheld and the reason why it considers it not essential.  
 
4. Each Member shall take full account of each request, decision and recommendation of the 
Organization under Article 48 and, in accordance with its constitution or system of law and economic 
organization, take in the particular case the action it considers appropriate having regard to its 
obligations under this Chapter. 
 
5. Each Member shall report fully any action taken, independently or in concert with other 
Members, to comply with the requests and carry out the recommendations of the Organization and, 
when no action has been taken, inform the Organization of the reasons therefore and discuss the matter 
further with the Organization if it s o requests.  
 
6. Each Member shall, at the request of the Organization, take part in consultations and 
conferences provided for in this Chapter with a view to reaching mutually satisfactory conclusions.  
 
Article 51  
 
Co-operative Remedial Arrangements  
 
 
1. Members may co -operate with each other for the purpose of making more effective within their 
respective jurisdictions any remedial measures taken in furtherance of the objectives of this Chapter and 
consistent with their obligations under other provisions of this Charter.  
 
2. Members shall keep the Organization informed of any decision to participate in any such 
co-operative action and of any measures taken.  
  - 67 - 
 
Article 52  
 
Domestic Measures against Restrictive Business Practices  
 
 
 No act or omission to act on the part of the Organization shall preclude any Member from 
enforcing any national statute or decree directed towards preventing monopoly or restraint of trade.  
 
Article 53  
 
Special Procedures with respect to Services  
 
 
1. The Members recognize that certain services, such as transportation, telecommunications, 
insurance and the commercial services of banks, are substantial elements of international trade and that 
any restrictive business practices by enterprises engaged in t hese activities in international trade may 
have harmful effects similar to those indicated in paragraph 1 of Article 46.  Such practices shall be 
dealt with in accordance with the following paragraphs of this Article.  
 
2. If any Member considers that there exist restrictive business practices in relation to a service 
referred to in paragraph 1 which have or are about to have such harmful effects, and that its interests are 
thereby seriously prejudiced, the Member may submit a written statement explaining the situation to the 
Member or Members whose private or public enterprises are engaged in the services in question.  The 
Member or Member concerned shall give sympathetic consideration to the statement and to such 
proposals as may be made and shall afford ad equate opportunities for consultation, with a view to 
effecting a satisfactory adjustment.  
 
3. If no adjustment can be effected in accordance with the provisions of paragraph 2, and if the 
matter is referred to the Organization, it shall be transferred to the appropriate inter -governmental 
organization, if one exists, with such observations as the Organization may wish to make.  If no such 
inter-governmental organization exists, and if Mem bers so request, the Organization may, in accordance 
with the provis ions of paragraph 1 (c) of Article 72, make recommendations for, and promote interna -
tional agreement on, measures designed to remedy the particular situation so far as it comes within the 
scope of this Charter.  
 
4. The Organization shall, in accordance wi th paragraph 1 of Article 87, co- operate with other 
inter-governmental organizations in connection with, restrictive business practices affecting any field 
coming within the scope of this Charter and those organizations shall be entitled to consult the 
Organization, to seek advice, and to ask that a study of a particular problem be made.  
 
Article 54  
 
Interpretation and Definition 
 
 
1. The provisions of this Chapter shall be construed with due regard for the rights and obligations 
of Members set forth elsewh ere in this Charter and shall not therefore be so interpreted as to prevent the 
adoption and enforcement of any measures in so far as they are specifically permitted under other 
Chapters of this Charter.  The Organization may, however, make recommendations  to Members or to 
any appropriate inter -governmental organization concerning any features of these measures which may 
have the effect indicated in paragraph I of Article 46.   - 68 - 
 
2. For the purposes of this Chapter  
 
 (a)the term "business practice" shall not be  so construed as to include an individual contract 
between two parties as seller and buyer, lessor and lessee, or principal and agent, 
provided that such contract is not used to restrain competition, limit access to markets 
or foster monopolistic control;  
 
 (b)the term "public commercial enterprises" means  
 
  (i)agencies of governments in so far as they are engaged in trade, and  
 
  (ii)trading enterprises mainly or wholly owned by public authority, provided the 
Member concerned declares that for the purpose s of this Chapter it has 
effective control over or assumes responsibility for the enterprises;  
 
 (c)the term "private commercial enterprises" means all commercial enterprises other than public 
commercial enterprises;  
 
 (d)the terms "decide" and "decision" as used in Articles 46, 48 (except in paragraphs  3 and 4) 
and 50 do not determine the obligations of Members, but mean only that the 
Organization reaches a conclusion.   - 69 - 
 
CHAPTER VI  
 
INTER -GOVERNMENTAL COMMODITY AGREEMENTS  
 
SECTION A  - INTRODUCTORY CONSIDERATIONS  
 
Article 55  
 
Difficulties relating to Primary Commodities  
 
 
 The Members recognize that the conditions under which some primary commodities are 
produced, exchanged and consum ed are such that international trade in these commodities may be 
affected by special difficulties such as the tendency towards persistent disequilibrium between 
production and consumption, the accumulation of burdensome stocks and pronounced fluctuations i n 
prices.  These special difficulties may have serious adverse effects on the interests of producers and 
consumers, as well as widespread repercussions jeopardizing the general policy of economic expansion. 
 The Members recognize that such difficulties may , at times, necessitate special treatment of the 
international trade in such commodities through inter -governmental agreement.  
 
Article 56  
 
Primary and Related Commodities  
 
 
1. For the purposes of this Charter, the term "primary commodity" means any product of farm, 
forest or fishery or any mineral, in its natural form or which has undergone such processing as is 
customarily required to prepare it for marketing in substantial volume in international trade.  
 
2. The term shall also, for the purposes of this Chapter, cover a group of commodities, of which 
one is a primary commodity as defined in paragraph 1 and the others are commodities, which are so 
closely related, as regards conditions of production or utilization, to the other commodities in the group, 
that it is appropriate to deal with them in a single agreement.  
 
3. If, in exceptional circumstances, the Organization finds that the conditions set forth in Article  62 
exist in the case of a commodity which does not fall precisely under paragraphs 1 or 2 of  this Article, the 
Organization may decide that the provisions of this Chapter, together with any other requirements it may 
establish, shall apply to inter -governmental agreements regarding that commodity.  
 
Article 57  
 
Objectiv es of Inter- governmental Commodity Agreements  
 
 
 The Members recognize that inter -governmental commodity agreements are appropriate for the 
achievement of the following objectives:  
 
 (a)to prevent or alleviate the serious economic difficulties which may ar ise when adjust ments 
between production and consumption cannot be effected by normal market forces alone 
as rapidly as the circumstances require;  
  - 70 - 
 
 (b)to provide, during the period which may be necessary, a framework for the consideration and 
development of measures which have as their purpose economic adjustments designed 
to promote the expansion of consumption or a shift of resources and man- power out of 
over-expanded industries into new and productive occupations, including as far as 
possible in approp riate cases, the develop ment of secondary industries based upon 
domestic production of primary commodities;  
 
 (c)to prevent or moderate pronounced fluctuations in the price of a primary commodity with a 
view to achieving a reasonable degree of stability o n a basis of such prices as are fair to 
consumers and provide a reasonable return to producers, having regard to the 
desirability of securing long- term equilibrium between the forces of supply and 
demand;  
 
 (d)to maintain and develop the natural resources of the world and protect them from 
unnecessary exhaustion;  
 
 (e)to provide for the expansion of the produc tion of a primary commodity where this can be 
accomplished with advantage to consumers and producers, including in appropriate 
cases the distribution  of basic foods at special prices;  
 
 (f)to assure the equitable distribution of a primary commodity in short supply.  
 
 
SECTION B -INTER -GOVERNMENTAL COMMODITY AGREEMENTS IN GENERAL  
 
Article 58  
 
Commodity Studies  
 
 
1. Any Member which considers itself substantially interested in the production or consumption 
of, or trade in, a particular primary commodity, and which considers that international trade in that 
commodity is, or is likely to be, affected by special difficulties, shall be entitled to ask that a study of the 
commodity be made.  
 
2. Unless the Organization decides that the case put forward in support of the request does not 
warrant such action, it shall promptly invite each Member to appoint representatives to a  study group for 
the commodity, if the Member considers itself substantially interested in the production or consumption 
of, or trade in, the commodity.  Non -Members may also be invited.  
 
3. The study group shall promptly investigate the production, cons umption and trade situation in 
regard to the commodity, and shall report to the participating governments and to the Organization its 
findings and its recommendations as to how best to deal with any special difficulties which exist or may 
be expected to ar ise.  The Organization shall promptly transmit to the Members these findings and 
recommendations.  
  - 71 - 
 
Article 59  
 
Commodity Conferences  
 
 
1. The Organization shall promptly convene an inter -governmental conference to discuss measures 
designed to meet the special difficulties which exist or are expected to arise concerning a particular 
primary commodity:  
 
 (a)on the basis of the recommendations of a study group, or  
 
 (b)at the request of Members whose interests represent a significant part of world production or 
consumption of, or trade in, that commodity, or  
 
 (c)at the request of Members which consider that their economies are dependent to an i mportant 
extent on that commodity, unless the Organization considers that no useful purpose 
could be achieved by convening the conference, or  
 
 (d)on its own initiative , on the basis of information agreed to be adequate by the Members 
substantially interested in the production or consumption of, or trade in, that 
commodity.  
 
2. Each Member which considers itself substantially interested in the production or consumption 
of, or trade in, the commodity concerned, shall be invited to participate in such a conference.  
Non-Members may also be invited to participate.  
 
Article 60  
 
General Principles governing Commodity Agreements  
 
 
1. The Members shall observe the following principles in the conclusion and operation of all types 
of inter -governmental commodity agreements:  
 
 (a)Such agreements shall be open to participation, initially by any Member on terms no less 
favourable than those accorded to any other country, and thereafte r in accordance with 
such procedure and upon such terms as may be established in the agreement, subject to 
approval by the Organization. 
 
 (b)Non- Members may be invited by the Organization to participate in such agreements and the 
provisions of sub- paragra ph (a) applying to Members shall also apply to any 
non-Member so invited.  
 
 (c)Under such agreements there shall be equitable treatment as between participating countries 
and non- participating Members, and the treatment accorded by participating countries 
to non- participating Members shall be no less favourable than that accorded to any 
non-participating non- Member, due consideration being given in each case to policies 
adopted by non- participants in relation to obligations assumed and advantages 
conferred under the agreement. 
  - 72 - 
 
 (d)Such agreements shall include provision for adequate participation of countries substantially 
interested in the importation or consumption of the commodity as well as those 
substantially interested in its exportation or production.  
 
 (e)Full publicity s hall be given to any inter -governmental commodity agreement proposed or 
concluded, to the statements of considerations and objectives advanced by the 
proposing Members, to the nature and development of measures adopted to correct the 
underlying situation w hich gave rise to the agreement and, periodically, to the operation 
of the agreement.  
 
2. The Members, including Members not parties to a particular commodity agreement, shall give 
favourable consideration to any recommendation made under the agreement for  expanding consumption 
of the commodity in question. 
 
Article 61  
 
Types of Agreements  
 
 
1. For the purposes of this Chapter, there are two types of inter -governmental commodity 
agreements:  
 
 (a)commodity control agreements as deemed in this Article;  and  
 
 (b)other inter -governmental commodity agreements.  
 
2. Subject to the provisions of paragraph 5, a commodity control agreement is an 
inter-governmental agreement which involves:  
 
 (a)the regu lation of production or the quantitative control of exports or imports of a primary 
commodity and which has the purpose or might have the effect of reducing, or 
preventing an increase in, the production of, or trade in, that commodity;  or  
 
 (b)the regulat ion of prices.  
 
3. The Organization shall, at the request of a Member, a study group or a commodity conference, 
decide whether an existing or proposed inter -governmental agreement is a commodity control agreement 
within the meaning of paragraph 2. 
 
4. (a)Commodity control agreements shall be subject to all the provisions of this Chapter.  
 
 (b)Other Inter -governmental commodity agree ments shall be subject to the provisions of this 
Chapter other than those of Section C.  If, how ever, the Organization decides that an 
agreement which involves the regulation of production or the quantitative control of 
exports or imports is not a commodity control agreement within the meaning of 
paragraph 2, it shall prescribe the provisions of Section C, if any, to which that  
agreement shall conform.  
  - 73 - 
 
5. An existing or proposed inter -governmental agreement the purpose of which is to secure the 
co-ordinated expansion of aggregate world produc tion and consumption of a primary commodity may 
be treated by the Organization as not being a commodity control agreement, even though the agreement 
provides for the future application of price provisions;  provided that  
 
 (a)at the time the agreement is entered into, a commodity conference finds that the conditions 
contemplated are in accordance with the provisions of Article 62, and  
 
 (b)from the date on which the price provisions become operative, the agreement shall conform 
to all the provisions of Section C, except that no further finding will be required under 
Article 62.  
 
6. Members shall enter into any new commodity control agreement only through a conference 
called in accordance with the provisions of Article 59 and after an appropriate finding has been made 
under Article 62. If, in an exceptional case, there has been unreasonable delay in the convening or in the 
proceedings of the study group or of the commodity conference, Members which consider themselves 
substant ially interested in the production or consumption of, or trade in, a particular primary commodity, 
may proceed by direct negotiation to the conclusion of an agreement, provided that the situation is one 
contemplated in Article 62 (a) or (b) and that the a greement conforms to the other provisions of this 
Chapter.  
 
 
SECTION C - INTER -GOVERNMENTAL COMMODITY CONTROL AGREEMENTS  
 
Article 62  
 
Circumstances Governing the use of Commodity Control Agreements  
 
 
 The Members agree that commodity control agreements may be entered into only when a 
finding has been made through a commodity conference or through the Organization by consultation 
and gene ral agreement among Members substantially interested in the commodity, that:  
 
 (a)a burdensome surplus of a primary commodity has developed or is expected to develop, 
which, in the absence of specific governmental action, would cause serious hardship to 
producers among whom are small producers who account for a substan tial portion of 
the total output, and that these conditions could not be corrected by normal market 
forces in time to prevent such hardship, because, characteristically in the case of the 
primary commodity concerned, a substantial reduction in price does not readily lead to 
a significant increase in consumption or to a significant decrease in production;  or  
 
 (b)widespread unemployment or under -employ ment in connection with a primary commod ity, 
arising out of difficulties of the kind referred to in Article 55, has developed or is 
expected to develop, which, in the absence of specific governmental action, would not 
be corrected by normal market forces in time to prevent widespread and undue hardship 
to workers because, characteristically in the case of the industry concerned, a 
substantial reduction in price does not steadily lead to a significant increase in 
consumption but to a reduction of employment, and because areas in which the 
commodity is produced in substantial quantity do not afford alternative employment 
opportunities for the workers involved.  
Article 63   - 74 - 
 
 
Additional Principles Governing Commodity Control Agreements  
 
 
 The Members shall observe the following prin ciples governing the  conclusion and operation of 
commodity control agreements, in addition to those stated in Article 60:  
 
 (a)Such agreements shall be designed to assure the availability of supplies adequate at all times 
for world demand at prices which are in keeping with t he provisions of Article 57 (c), 
and, when practicable, shall provide for measures designed to expand world 
consumption of the commodity.  
 
 (b)Under such agreements, participating countries which are mainly interested in imports of the 
commodity concerned shall, in deci sions on substantive matters, have together a 
number of votes equal to that of those mainly interested in obtaining export mar kets for 
the commodity.  Any participating country, which is interested in the com modity but 
which does not fall precisely under either of the above classes, shall have an appropriate 
voice within such classes.  
 
 (c)Such agreements shall make appropriate provision to afford increasing opportuniti es for 
satisfying national consumption and world market requirements from sources from 
which such requirements can be supplied in the most effective and economic manner, 
due regard being had to the need for preventing serious economic and social dislocation 
and to the position of producing areas suffering from abnormal disabilities.  
 
 (d)Participating countries shall formulate and adopt programmes of internal economic 
adjustment believed to be adequate to ensure as much progress as practicable within the 
duration of the agreement towards solution of the commodity problem involved.  
 
Article 64  
 
Administration of Commodity Control Agreements  
 
 
1. Each commodity control agreement shall provide for the establishment of a governing body, 
herein referred to as a C ommodity Council, which shall operate in conformity with the provisions of this 
Article.  
 
2. Each participating country shall be entitled to have one representative on the Commodity 
Council.  The voting power of the representatives shall be determined in c onformity with the provisions 
of Article 63 (b).  
 
3. The Organization shall be entitled to appoint a non- voting representative to each Commodity 
Council and may invite any competent inter -govern mental organization to nominate a non- voting 
representative f or appointment to a Commodity Council. 
 
4. Each Commodity Council shall appoint a non- voting chairman who, if the Council so requests, 
may be nominated by the Organization.  
 
5. The Secretariat of each Commodity Council shall be appointed by the Council after consultation 
with the Organization.   - 75 - 
 
 
6. Each Commodity Council shall adopt appropriate rules of procedure and regulations regarding 
its activities.  The Organization may at any time require their amendment if it considers that they are 
inconsistent with the provisions of this Chapter.  
 
7. Each C ommodity Council shall make periodic reports to the Organization on the operation of 
the agreement which it administers.  It shall also make such special reports as the Organization may 
require or as the Council itself considers to be of value to the Organization.  
 
8. The expenses of a Commodity Council shall be borne by the participating countries. 
 
9. When an agreement is terminated, the Organization shall take charge of the archives and 
statistical material of the Commodity Council.  
 
Article 65  
 
Initial Term, Renewal and Review of Commodity Control Agreements  
 
 
1. Commodity control agreements shall be concluded for a period of not more than five years.  
Any renewal of a commodity control agreement, including agreements referred to in paragraph 1 of 
Artic le 68, shall be for a period not exceeding five years.  The provisions of such renewed agreements 
shall conform to the provisions of this Chapter.  
 
2. The Organization shall prepare and publish periodically, at intervals not greater than three years, 
a rev iew of the operation of each agreement in the light of the principles set forth in this Chapter.  
 
3. Each commodity control agreement shall provide that, if the Organization finds that its 
operation has failed substantially to conform to the principles lai d down in this Chapter, participating 
countries shall either revise the agreement to con form to the principles or terminate it.  
 
4. Commodity control agreements shall include provisions relating to withdrawal of any party.  
 
Article 66  
 
Settlement of Disputes  
 
 
 Each commodity control agreement shall provide that:  
 
 (a)any question or difference concerning the interpretation of the provisions of the agreement or 
arising out of its operation shall be discussed originally by the Commodity C ouncil;  
and 
 
 (b)if the question or difference cannot be resolved by the Council in accordance with the terms 
of the agreement, it shall be referred by the Council to the Organization, which shall 
apply the procedure set forth in Chapter VIII with appropr iate adjustments to cover the 
case of non -Members.  
SECTION D - MISCELLANEOUS PROVISIONS  
 
Article 67   - 76 - 
 
 
Relations with Inter -governmental Organizations  
 
 
 With the object of ensuring appropriate co- operation in matters relating to inter -governmental 
commodity agreements, any inter -governmental organization which is deemed to be competent by the 
Organization, such as the Food and Agriculture Organization, sha ll be entitled:  
 
 (a)to attend any study group or commodity conference;  
 
 (b)to ask that a study of a primary commodity be made;  
 
 (c)to submit to the Organization any relevant study of a primary commodity, and to recommend 
to the Organization that further  study of the commodity be made or that a commodity 
conference be convened.  
 
Article 68  
 
Obligations of Members regarding Existing and Proposed Commodity Agreements  
 
 
1. Members shall transmit to the Organization the full text of each inter -governmental commodity 
agreement in which they are participating at the time they become Members of the Organization, 
together with appropriate information regarding the formulation, pr ovisions and operation of any such 
agreement.  If, after review, the Organization finds that any such agreement is inconsistent with the 
provisions of this Chapter, it shall communicate such finding to the Members concerned in order to 
secure promptly the adjustment of the agreement to bring it into conformity with the provisions of this 
Chapter.  
 
2. Members shall transmit to the Organization appropriate information regarding any negotiations 
for the conclusion of an inter -governmental commodity agreement in which they are participating at the 
time they become Members of the Organization.  If, after review, the Organization finds that any such 
negotiations are inconsistent with the provisions of this Chapter, it shall communicate such finding to 
the Members concerned in order to secure prompt action with regard to their partici pation in such 
negotiations.  The Organization may waive the requirement of a study group or a commodity 
conference, if it finds it unnecessary in the light of the negotiations.  
 
 
 Article 69  
 
 Territorial Application  
 
 
 For the purposes of this Chapter, the terms "Member" and "non -Member" shall include the 
dependent territories of a Member and non -Member of the Organization respectively.  If a Member or 
non-Member and its dependent territories form a group, of which one or more units are mainly 
interested in the export of a commodity and one or more in the import of the commodity, there may be 
either joint representation for all the territories within the group or, where the Member or non- Member 
so wishes, separate representation for the territories mainly interested in exportation  and separate 
representation for the territories mainly interested in importation.  
  - 77 - 
 
 
Article 70  
 
Exceptions to Chapter VI  
 
 
1. The provisions of this Chapter shall not apply:  
 
 (a)to any bilateral inter -governmental agreement relating to the purchase and sale of a 
commodity falling under Section D of Chapter IV;  
 
 (b)to any inter -governmental commodity agreement involving no more than one exporting 
country and no more than one im porting country and not covered by sub- paragraph (a) 
above;  Provided  that if, upon complaint by a non- participating Member, the Organ -
ization finds that the interests of that Member are seriously prejudiced by the 
agreement, the agreement shall become sub ject to such provisions of this Chapter as the 
Organization may prescribe;  
 
 (c)to those provisions of any inter -governmental commodity agreement which are necessary for 
the protection of public morals or of human, animal or plant life or health, provided that 
such agreement is not used to accomplish results inconsistent with the objectives of 
Chapter V or Chapter VI;  
 
 (d)any inter -governmental agreement relating solely to the conservation of fisheries resources, 
migratory birds or wild animals, provided that such agreement is not used to 
accomplish results inconsistent with the objectives of this Chapter or the purpose and 
objectives set forth in Article 1 and is given full publicity in accordance with the 
provisions of paragraph 1 (e) of Article 60;  if the Organization finds, upon complaint 
by a non- participating Member, that the interests of that Member are seriously 
prejudiced by the agreement, the agreement shall become subject to such provisions of 
this Chapter as the Organization may prescribe.  
 
2. The provisions of Articles 58 and 59 and of Section C of this Chapter shall not apply to 
inter-governmental commodity agreements found by the Organization to relate solely to the equitable 
distribution of commodities in short supply. 
 
3. The provisions of Section C of this Chapter shall  not apply to commodity control agreements 
found by the Organization to relate solely to the conservation of exhaustible natural resources.   - 78 - 
 
CHAPTER VII  
 
THE INTERNATIONAL TRADE ORGANIZATION  
 
SECTION A - STRUCTURE AND FUNCTIONS  
 
Article 71  
 
Membership  
 
 
1. The original Members of the Organization shall be:  
 
 (a)those States invited to the United Nations Conference on Trade and Employment whose 
governments accept this Charter, in accordance with  the provisions of paragraph 1 of 
Article 103, by September 30, 1949 or, if the Charter shall not have entered into force 
by that date, those States whose governments agree to bring the Charter into force in 
accordance with the provisions of paragraph 2 (b ) of Article  103; 
 
 (b)those separate customs territories invited to the United Nations Conference on Trade and 
Employment on whose behalf the competent Member accepts this Charter, in 
accordance with the provisions of Article 104, by September 30, 1949 or, if the Charter 
shall not have entered into force by that date, such separate customs territories which 
agree to bring the Charter into force in accordance with the provisions of paragraph 2 
(b) of Article 103 and on whose behalf the competent Member acc epts the Charter in 
accord ance with the provisions of Article 104.  If any of these customs territories shall 
have become fully responsible for the formal conduct of its diplomatic relations by the 
time it wishes to deposit an instrument of acceptance, it  shall proceed in the manner set 
forth in sub- paragraph (a) of this paragraph.  
 
2. Any other State whose membership has been approved by the Conference shall become a 
Member of the Organization upon its acceptance, in accord ance with the provisions of par agraph 1 of 
Article 103, of the Charter as amended up to the date of such acceptance.  
 
3. Any separate customs territory not invited to the United Nations Conference on Trade and 
Employment, proposed by the competent Member having responsibility for the formal conduct of its 
diplomatic relations and which is autonomous in the conduct of its external commercial relations and of 
the other matters provided for in this Charter and whose admission is approved by the Conference, shall 
become a Member upon acceptance of the Charter on its behalf by the competent Member in accordance 
with the provisions of Article 104 or, in the case of a territory in respect of which the Charter has already 
been accepted under that Article, upon such approval by the Conference afte r it has acquired such 
autonomy.  
 
4. The Conference shall determine, by a two- thirds majority of the Members present and voting, 
the conditions upon which, in each individual case, membership rights and obligations shall be extended 
to: 
 
 (a)the Free Territory of Trieste;  
 
 (b)any Trust Territory administered by the United Nations;  and 
  - 79 - 
 
 (c)any other special régime established by the United Nations.  
 
5. The Conference, on application by the competent authorities, shall determine the conditions 
upon which rights and obligations under this Charter shall apply to such authorities in re spect of 
territories under military occupation and shall determine the extent of such rights and obligations.  
 
Article 72  
 
Functions  
 
 
1. The Organization shall perform the functions attributed to it elsewhere in this Charter.  In 
addition, the Organization shall have the following functions:  
 
 (a)to collect, analyse and publish information relating to inter national trade, including 
information relating to commercial policy, business practices, commodity problems and 
industrial and general economic development;  
 
 (b)to encourage and facilitate consultation among Members on all questions relating to the 
provis ions of this Charter;  
 
 (c)to undertake studies, and, having due regard to the objectives of this Charter and  the 
constitutional and legal systems of Members, make recommendations, and promote 
bilateral or multilateral agreements concerning, measures designed  
 
  (i)to assure just and equitable treatment for foreign nationals and enterprises;  
 
  (ii)to expand the volume and to improve the bases of international trade, including 
measures designed to facilitate commercial arbitration and the avoid ance of 
double taxation;  
 
  (iii)to carry out, on a regional or other basis, having due regard to the activi ties of 
existing regional or other inter -governmental organizations, the func tions 
specified in paragraph 2 of Article 10;  
 
  (iv)to promote and encourage establishments for the technical training that is necessary 
for progressive industrial and economic development;  and, 
 
  (v)generally, to achieve any of the objec tives set forth in Article 1;  
 
 (d)in collaboration with the Economic and Social Council of the United Nations and with such 
inter-governmental organizations as may be appropriate, to undertake studies on the 
relationship between world prices of primary commodities and manufactured products, 
to consider and, where appropriate, to recommend international agreements on, 
measures designed to reduce progressively any unwarranted disparity in those prices;  
 
 
 
 (e)generally, to consult with and make recommendations to the Members and, as neces sary, 
furnish advice and assistance to them regarding any matter relating to the operation of 
this Charter, and to take any other action necessary and appropriate to carry out the  - 80 - 
 
provisions of the Charter;  
 
 (f)to co -operate with the United Nations and ot her inter -governmental organizations in 
furthering the achievement of the economic and social objectives of the United Nations 
and the maintenance or restoration of international peace and security.  
 
2. In the exercise of its functions the Organiza tion sh all have due regard to the economic 
circumstances of Members, to the factors affecting these circumstances and to the consequences of its 
deter minations upon the interests of the Member or Members concerned.  
 
Article 73  
 
Structure  
 
 
 The Organization shall have a Conference, an Executive Board, Commissions as established 
under Article 82, and such other organs as may be required.  There shall also be a Director -General and 
Staff.  
 
 
SECTION B - THE CONFERENCE  
 
 
Article 74  
 
Composition  
 
 
1. The Conference shall consist of all the Mem bers of the Organization.  
 
2. Each Member shall have one representative in the Conference and may appoint alternates and 
advisers to its representative.  
 
Article 75  
 
Voting  
 
 
1. Each Member shall have one vote in the Con ference.  
 
2. Except as otherwise provided in this Charter, decisions of the Conference shall be taken by a 
majority of the Members present And voting;  Provided  that the rules of procedure of the Conference 
may permit a Member to request a second vote if the number of votes cast is less than half the num ber of 
the Members, in which case the decision reached on the second vote shall be final whether or not the 
total of the votes cast comprises more than half the n umber of the Members.  
 
 
 
Article 76  
 
Sessions, Rules of Procedure and Officers   - 81 - 
 
 
 
1. The Conference shall meet at the seat of the Organization in regular annual session and in such 
special sessions as may be convoked by the Director -General at the request of the Executive Board or of 
one-third of the Members in exceptional cir cumstances, the Executive Board may decide that the 
Conference shall be held at a place other than the seat of the Organization.  
 
2. The Conference shall establish rules of pro cedure which may include rules appropriate for the 
carrying out of its functions during the intervals between its sessions.  It shall annually elect its 
President and other officers.  
 
Article 77  
 
Powers and Duties  
 
 
1. The powers and duties attributed to the Or ganization by this Charter and the final authority to 
determine the policies of the Organization shall be vested in the Conference.  
 
2. The Conference may, by a vote of a majority of the Members, assign to the Exe cutive Board 
any power or duty of the Organization except such specific powers and duties as are expressly conferred 
or imposed upon the Conference by this Charter.  
 
3. In exceptional circumstances not elsewhere provided for in this Charter, the Conference may 
waive an obligation imposed upon a Member by the Charter;  Provided  that any such decision shall be 
approved by a two- thirds majority of the votes cast and that such majority shall comprise more than half 
of the Members.  The Conference may also by su ch a vote define certain categories of exceptional 
circumstances to which other voting requirements shall apply for the waiver of obligations.  
 
4. The Conference may prepare or sponsor agreements with respect to any matter within the scope 
of this Charter and, by a two- thirds majority of the Members present and voting, recommend such 
agreements for acceptance.  Each Member shall within a period specified by the Conference, notify the 
Director -General of its acceptance or non -accep tance.  In the case of non -acceptance, a statement of the 
reasons therefore shall be forwarded with the notification.  
 
5. The Conference may make recommendations to inter -governmental organizations on any 
subject within the scope of this Charter.  
 
6. The Conference shall approve th e budget of the Organization and shall apportion the 
expenditures of the Organization among the Members in accordance with a scale of contributions to be 
fixed from time to time by the Conference following such principles as may be applied by the United 
Nations.  If a maximum limit is established on the contribu tion of a single Member with respect to the 
budget of the United Nations, such limit shall also be applied with respect to contributions to the Organ-
ization.  
 
7. The Conference shall determine the seat of the Organization and shall establish such branch 
offices as it may consider desirable.  
SECTION C - THE EXECUTIVE BOARD  
 
Article 78  
  - 82 - 
 
Composition of the Executive Board  
 
 
1. The Executive Board shall consist of eighteen Members of the Organization se lected by the 
Conference.  
 
2. (a) The Executive Board shall be representative of the broad geographical areas to which 
the Members of the Organization belong.  
 
 (b) A customs union, as defined in paragraph 4 of Article 44, shall be considered eligible 
for selection as a member of the Executive Board on the same basis as a single Member of the 
Organization if all of the members of the customs union are Members of the O rganization and if all its 
mem bers desire to be represented as a unit.  
 
 (c) In selecting the members of the Executive Board, the Conference shall have regard to 
the objective of ensuring that the Board includes Members of chief economic importance, in the 
determination of which particular regard shall be paid to their shares in international trade, and that it is 
representative of the different types of economies or degrees of economic development to be found 
within the membership of the Organization. 
 
3. (a) At intervals of three years the Conference shall determine, by a two -thirds majority of 
the Members present and voting, the eight Members of chief economic importance, in the determination 
of which particular regard shall be paid to their shares in international trade.  The Members so 
determined shall be declared members of the Executive Board. 
 
 (b) The other members of the Executive Board shall be elected by the Conference by a 
two-thirds majority of the Members present and voting. 
 
 (c) If on two consecutive ballots no member is elected, the remainder of the election shall 
be decided by a majority of the Members present and voting.  
 
4. Subject to the provisions of Annex L, the term of office of a member of the Executive Board 
shall be three years, an d any vacancy in the membership of the Board may be filled by the Conference 
for the unexpired term of the vacancy.  
 
5. The Conference shall establish rules for giving effect to this, Article.  
 
Article 79  
 
Voting  
 
 
1. Each member of the Executive Board sha ll have one vote. 
 
2.  Decisions of the Executive Board shall be made by a majority of the votes cast.  
 
 
Article 80  
 
Sessions, Rules of Procedure and Officers  
  - 83 - 
 
 
1. The Executive Board shall adopt rules of procedure, which shall include rules for the convening 
of its sessions, and which may include rules appropriate for the carrying out of its functions during the 
intervals between its sessions.  The rules of procedur e shall be subject to confirmation by the 
Conference.  
 
2. The Executive Board shall annually elect its Chairman and other officers, who shall be eligible 
for re -election.  
 
3. The Chairman of the Executive Board shall be entitled ex officio to participate, without the right 
to vote, in the deliberations of the Conference. 
 
4. Any Member of the Organization which is not a member of the Executive Board shall be 
invited to participate in the discussion by the Board of any matter of particular and substantial concern 
to that Member and shall, for the purpose of such dis cussion, have all the rights of a member of the 
Board, except the right to vote. 
 
Article 81  
 
Powers and Duties  
 
 
1. The Executive Board shall be responsible for the execution of the policies of the Organization 
and shall exercise the powers and perform the duties assigned to it by the Conference.  It shall supervise 
the activities of the Commissions and shall take such action upon their recommendations as it may deem 
appropriate.  
 
2. The Executive Board may make recommenda tions to the Conference, or to inter -governmental 
organizations, on any subject within the scope of this Charter.  
 
 
SECTION D - THE COMMISSIONS  
 
Artic le 82  
 
Establishment and Functions  
 
 
 The Conference shall establish such Commissions as may be required for the performance of 
the functions of the Organization.  The Commissions shall have such functions as the Conference may 
decide.  They shall report t o the Executive Board and shall perform such tasks as the Board may assign 
to them.  They shall consult each other as necessary for the exercise of their functions.  
 
 
 
 
 
Article 83  
 
Composition and Rules of Procedure  
  - 84 - 
 
1. The Commissions shall be composed of per sons whose appointment, unless the Conference 
decides otherwise, shall be made by the Executive Board.  In all cases, these persons shall be qualified 
by training and experience to carry out the functions of the Com mission to which they are appointed. 
 
2. The number of members, which for each Commission shall normally not exceed seven, and the 
conditions of service of such members shall be determined in accordance with regulations prescribed by 
the Conference.  
 
3. Each Commission shall elect a Chairman.  It shall adopt rules of procedure which shall be 
subject to approval by the Executive Board.  
 
4. The rules of procedure of the Conference and of the Executive Board shall provide as 
appropriate for the participation i n their deliberations, without the right to vote, of the chairmen of 
Commissions.  
 
5. The Organization shall arrange for representatives of the United Nations and of other 
inter-governmental organizations which are considered by the Organization to have a special 
competence in the field of activity of any of the Commissions, to participate in the work of such 
Commission.  
 
SECTION E -  THE DIRECTOR -GENERAL AND STAFF  
 
Article 84  
 
The Director- General  
 
 
1. The chief administrative officer of the Organization sh all be the Director -General.  He shall be 
appointed by the Conference upon the recommendation of the Executive Board, and shall be subject to 
the general supervision of the Board.  The powers, duties, conditions of service and terms of office of 
the Director -General shall conform to regulations approved by the Conference.  
 
2. The Director -General or his representative shall be entitled to participate, without the right to 
vote, in all meetings of any organ of the Organization.  
 
3. The Director -General shall present to the Conference an annual report on the work of the 
Organizat ion, and the annual budget estimates and financial statements of the Organization.  
 
Article 85  
 
The Staff  
 
 
1. The Director -General, having first consulted with and having obtained the agreement of the 
Executive Board, shall have authority to appoint Deput y Directors- General in accordance with 
regulations approved by the Conference.  The Director -General shall also appoint such additional 
members of the Staff as may be required and shall fix the duties and conditions of service of the 
members of the Staff, in accordance with regulations approved by the Conference. 
 
2. The selection of the members of the Staff, including the appointment of the Deputy 
Directors- General, shall as far as possible be made on a wide geographical basis and with due regard to  - 85 - 
 
the va rious types of economy represented by Member countries.  The paramount consideration in the 
selection of candidates and in determining the conditions of service of the Staff shall be the necessity of 
securing the highest standards of efficiency, competence, impartiality and integrity.  
 
3. The regulations concerning the conditions of service of members of the Staff, such as those 
governing qualifications, salary, tenure and retirement, shall be fixed, so far as practicable, in conformity 
with those for membe rs of the Secretariat of the United Nations and of specialized agencies.  
 
SECTION F -  OTHER ORGANIZATIONAL PROVISIONS  
 
Article 86  
 
Relations with the United Nations  
 
 
l. The Organization shall be brought into rela tionship with the United Nations as soon as 
practicable as one of the specialized agencies referred to in Article 57 of the Charter of the United 
Nations.  This relationship shall be effected by agreement approved by the Conference. 
 
2. Any such agreement shall, subject to the pro visions of this Charter, provide for effective 
co-operation and the avoidance of unnecessary dupli cation in the activities of these organizations, and 
for co -operation in furthering the maintenance or restoration of international  peace and security.  
 
3. The Members recognize that the Organization should not attempt to take action which would 
involve passing judgment in any way on essentially political matters.  Accordingly, and in order to 
avoid conflict of responsibility between the United Nations and the Organization with respect to such 
matters, any measure taken by a Member directly in con nection with a political matter brought before 
the United Nations in accordance with the provisions of Chapters IV or VI of the United Nations Charter 
shall be deemed to fall within the scope of the United Nations, and shall not be subject to the provisions 
of this Charter.  
 
4. No action, taken by a Member in pursuance of its obligations under the United Nations Charter 
for the maintenance or  restoration of international peace and security, shall be deemed to conflict with 
the provisions of this Charter. 
 
Article 87  
 
Relations with other Organizations  
 
 
1. The Organization shall make arrangements with other inter -governmental organizations, which 
have related responsibilities, to provide for effective co -operation and the avoidance of unnecessary 
duplication in the activities of these organizations.  The Organization may for this purpose arrange for 
joint committees, reciprocal representation a t meetings and establish such other working relationships as 
may be necessary.  
 
2. The Organization may make suitable arrange ments for consultation and co- operation with 
non-governmental organizations concerned with matters within the scope of this Charte r. 
 
3. Whenever the Conference and the competent authorities of any inter -governmental organization 
whose purposes and functions lie within the scope of this Charter deem it desirable   - 86 - 
 
 
 (a)to incorporate such inter -governmental organization into the Organi zation, or  
 
 (b)to transfer all or part of its functions and resources to the Organization, or  
 
 (c)to bring it under the supervision or authority of the Organization,  
 
the Director -General, subject to the approval of the Conference, may enter into an appropriate 
agreement.  The Members shall, in conformity with their international obligations, take the action 
necessary to give effect to any such agreement.  
 
Article 88  
 
International Character of the Responsibilities of the Director -General,  
Staff and Members of Commissions  
 
 
1. The responsibilities of the Director -General and of the members of the Staff shall be exclusively 
international in character.  In the discharge of their duties, they shall not seek or receive instructions 
from any government or from any other authority ext ernal to the Organization.  They shall refrain from 
any action which might reflect on their posi tion as international officials.  
 
2. The provisions of paragraph 1 shall also apply to the members of the Commissions.  
 
3. The Members shall respect the international character of the responsibilities of these persons 
and shall not seek to influence them in the dis charge of their duties.  
 
Article 89  
 
International Legal Status of the Organization  
 
 
 The Organization shall hav e legal personality and shall enjoy such legal capacity as may be 
necessary for the exercise of its functions.  
 
Article 90  
 
Status of the Organization in the Territory of Members  
 
 
1. The Organization shall enjoy in the territory of each of its Members such legal capacity, 
privileges and immunities as may be necessary for the exercise of its functions.  
 
2. The representatives of Members and the officials of the Organization shall similarly enjoy such 
privileges and immunities as may be necessary for the ind ependent exercise of their functions in 
connection with the Organization.  
3. When the Organization has been brought into relationship with the United Nations as provided 
for in paragraph 1 of Article 86, the legal capacity of the Organization and the privi leges and immunities 
provided for in the preceding paragraphs shall be defined by the General Convention on Privileges and 
Immunities of the Specialized Agencies, adopted by the General Assembly of the United Nations, as 
from time to time amended, and as s upplemented by an annex relating to the International Trade  - 87 - 
 
Organization.  
 
Article 91  
 
Contributions  
 
 
 Each Member shall contribute promptly to the Organization its share of the expenditure of the 
Organization as apportioned by the Conference.  A Member which is in arrears in the payment of its 
contributions shall have no vote in the organs of the Organizat ion, if the amount of its arrears equals or 
exceeds the amount of the contributions due from it in respect of the preceding two complete years.  
The Conference may, nevertheless, permit such a Member to vote, if it is satisfied that the failure to pay 
is due to circumstances beyond the control of the Member. 
  - 88 - 
 
CHAPTER VIII  
 
SETTLEMENT OF DIFFERENCES 
 
 
Article 92  
 
Reliance on the Procedures of the Charter  
 
1. The Members undertake that they will not have recourse, in relation to other Member s and to 
the Organization, to any procedure other than the procedures envisaged in this Charter for complaints 
and the settlement of differences arising out of its operation. 
 
2. The Members also undertake, without prejudice to any other international agr eement, that they 
will not have recourse to unilateral economic measures of any kind contrary to the provisions of this 
Charter.  
 
 
Article 93  
 
Consultation and Arbitration 
 
 
1. If any Member considers that any benefit accruing to it directly or indirectly, implicitly or 
explicitly, under any of the provisions of this Charter other than Article 1, is being nullified or impaired 
as a result of  
 
 (a)a breach by a Member of an obliga tion under this Charter by action or failure to act, or  
 
 (b)the application by a Member of a measure not conflicting with the provisions of this Charter, 
or 
 
(c)the existence of any other situation  
 
the Member may, with a view to the satisfactory adjustment of the matter, make written representations 
or proposals to such other Member or Members as it considers to be concerned, and the Members 
receiving them shall give sympathetic consideration thereto.  
 
2. The Members concerned may submit the matter arisin g under paragraph 1 to arbitration upon 
terms agreed between them;  Provided  that the decision of the arbitrator shall not be binding for any 
purpose upon the Organization or upon any Member other than the Members participating in the 
arbitration.  
 
3. The Members concerned shall inform the Organization generally of the progress and out come 
of any discussion, consultation or arbitration undertaken under this Charter.  
 
  - 89 - 
 
Article  94  
 
Reference to the Executive Board  
 
 
1. Any matter arising under sub- paragraphs (a) or (b) of paragraph 1 of Article 93 which is not 
satisfactorily settled and any matter which arises under paragraph 1 (c) of Article 93 may be referred by 
any Member concerned to the Executive Board.  
 
2. The Exec utive Board shall promptly inves tigate the matter and shall decide whether any 
nullification or impairment within the terms of paragraph 1 of Article 93 in fact exists.  It shall then take 
such of the following steps as may be appropriate:  
 
 (a)decide that the matter does not call for any action;  
 
 (b)recommend further consultation to the Mem bers concerned;  
 
 (c)refer the matter to arbitration upon such terms as may be agreed between the Executive 
Board and the Members concerned;  
 
 (d)in any matter arisin g under paragraph 1 (a) of Article 93, request the Member concerned to 
take such action as may be necessary for the Member to conform to the provisions of 
this Charter;  
 
 (e)in any matter arising under sub- paragraph (b) or (c) of paragraph 1 of Article 93, make such 
recommendations to Members as will best assist the Members concerned and contribute 
to a satisfactory adjustment.  
 
3. If the Executive Board considers that acti on under sub- paragraphs (d) and (e) of paragraph 2 is 
not likely to be effective in time to prevent serious injury, and that any nullification or impairment found 
to exist within the terms of paragraph 1 of Article 93 is sufficiently serious to justify suc h action, it may, 
subject to the provisions of paragraph 1 of Article 95, release the Member or Members affected from 
obligations or the grant of concessions to any other Member or Members under or pursuant to this 
Charter, to the extent and upon such condi tions as it considers appropriate and compensatory, having 
regard to the benefit which has been nullified or impaired. 
 
4. The Executive Board may, in the course of its investigation, consult with such Members or 
inter-governmental organizations upon suc h matters within the scope of this Charter as it deems 
appropriate. It may also consult any appropriate commission of the Organization on any matter arising 
under this Chapter.  
 
5. The Executive Board may bring any matter, referred to it under this Article , before the 
Conference at any time during its consideration of the matter.  
 
 
Article 95  
 
Reference to the Conference 
 
1. The Executive Board shall, if requested to do so within thirty days by a Member concerned, 
refer to the Conference to review any actio n, decision or recommendation by the Executive Board under  - 90 - 
 
paragraphs 2 or 3 of Article 94.  Unless such review has been asked for by a Member concerned, 
Members shall be entitled to act in accordance with any action, decision or recommendation of the 
Exec utive Board under paragraphs 2 or 3 of Article 94. The Conference shall confirm, modify or reverse 
such action, decision or recommendation referred to it under this paragraph.  
 
2. Where a matter arising under this Chapter has been brought before the Confer ence by the 
Executive Board, the Conference shall follow the procedure set out in paragraph 2 of Article 94 for the 
Executive Board.  
 
3. If the Conference considers that any, nullifi cation or impairment found to exist within the terms 
of paragraph 1 (a) of Article 93 is sufficiently serious to justify such action, it may release the Member 
or Members affected from obligations or the grant of concessions to any other Member or Members 
under or pursuant to this Charter, to the extent and upon such conditions as it considers appropriate and 
compensatory, having regard to the benefit which has been nullified or impaired.  If the Conference 
considers that any nullification or impairment found to exist within the terms of sub -paragraphs (b) or 
(c) of paragraph 1 of Article 93 is sufficiently serious to justify such action, it may similarly release a 
Member or Members to the extent and upon such conditions as will best assist the Members concerned 
and contribute to a satis factory adjustment.  
 
4. When any Member or Members, in accordance with the provisions of paragraph 3, suspend the 
performance of any obligation or the grant of any concession to another Member, the latter Member 
shall be free, not later than sixty days after such action is taken, or if an opinion has been requested from 
the International Court of Justice pursuant to the provisions of Article 96, after such opinion has been 
delivered, to give written notice of its withdrawal fr om the Organization.  Such withdrawal shall 
become effective upon the expiration of sixty days from the day on which such notice is received by the 
Director -General.  
 
 
Article 96  
 
Reference to the International Court of Justice  
 
 
1. The Organization may, i n accordance with arrangements made pursuant to paragraph 2 of 
Article 96 of the Charter of the United Nations, request from the International Court of Justice advisory 
opinions on legal questions arising within the scope of the activities of the Organizat ion. 
 
2. Any decision of the Conference under this Charter shall, at the instance of any Member whose 
interests are prejudiced by the decision, be subject to review by the International Court of Justice by 
means of a request, in appropriate form, for an advisory opinion pursuant to the Statute of the Court.  
 
3. The request for an opinion shall be accompanied by a statement of the question upon which the 
opinion is required and by all documents likely to throw light upon the question.  This statement shall 
be furnished by the Organization in accordance with the Statute of the Court and after consultation with 
the Members substantially interested.  
 
4. Pending the delivery of the opinion of the Court, the decision of the Conference shall have full 
force and eff ect;  Provided that the Conference shall suspend the operation of any such decision 
pending the delivery of the opinion where, in the view of the Conference, damage difficult to repair 
would otherwise be caused to a Member concerned.  
  - 91 - 
 
5. The Organization s hall consider itself bound by the opinion of the Court on any question 
referred by it to the Court.  In so far as it does not accord with the opinion of the Court, the decision in 
question shall be modified.  
Article 97  
 
Miscellaneous Provisions  
 
 
1. Nothing in this Chapter shall be construed to exclude other procedures provided for in this 
Charter for consultation and the settlement of differences arising out of its operation.  The Organization 
may regard discussion, consultation or investigation unde rtaken under any other provisions of this 
Charter as fulfilling, either in whole or in part, any similar procedural requirement in this Chapter.  
 
2. The Conference and the Executive Board shall establish such rules of procedure as may be nec-
essary to carr y out the provisions of this Chapter.   - 92 - 
 
CHAPTER IX  
 
GENERAL PROVISIONS  
 
Article 98  
 
Relations with Non -Members  
 
 
1. Nothing in this Charter shall preclude any Member from maintaining economic relations with 
non-Members.  
 
2. The Members recognize that it wou ld be inconsistent with the purpose of this Charter for a 
Member to seek any arrangements with non -Mem bers for the purpose of obtaining for the trade of its 
country preferential treatment as compared with the treatment accorded to the trade of other Memb er 
countries, or so to conduct its trade with non- Member countries as to result in injury to other Member 
countries.  Accordingly,  
 
 (a)no Member shall enter into any new arrangement with a non- Member which precludes the 
non-Member from according to othe r Member countries any benefit provided for by 
such arrangement;  
 
 (b)subject to the provisions of Chapter IV, no Member shall accord to the trade of any 
non-Member country treatment which, being more favourable than that which it 
accords to the trade of any other Member country, would injure the economic interests 
of a M ember country.  
 
3. Notwithstanding the provisions of paragraph 2, Members may enter into agreements with 
non-Members in accordance with the provisions of paragraph 3 of Article 15 or of paragraph 6 of 
Article 44.  
 
4. Nothing in this Charter shall be interpreted to require a Member to accord to non- Member coun -
tries treatment as favourable as that which it accords to Member countries under the provisions of the 
Charter, and failure to accord such treatment shall not be regarded as inconsistent with the terms or the 
spirit of the Charter.  
 
5. The Executive Board shall make periodic studies of general problems arising out of the com -
mercial relations between Member and non -Member countries and, with a view to promoting the 
purpose of the Charter, may make recom mendations to the Conference with respect to such relations.  
Any recommendation involving alterations in the provisions of this Article shall be dealt with in accord -
ance with the provisions of Article 100.  
 
 
Article 99  
 
General Exceptions  
 
 
1. Nothing i n this Charter shall be construed  
 
 (a)to require a Member to furnish any information the disclosure of which it considers contrary  - 93 - 
 
to its essential security interests;  or  
 
 (b)to prevent a Member from taking, either singly or with other States, any action which it 
considers necessary for t he protection of its essential security interests, where such 
action  
 
  (i)relates to fissionable materials or to the materials from which they are derived, or  
 
  (ii)relates to the traffic in arms, ammunition or implements of war, or to traffic in other 
goods and materials carried on directly or indirectly for the purpose of 
supplying a military establishment of the Member or of any other country; or  
 
  (iii)is taken in time of war or other emergency in international relations;  or  
 
 (c)to prevent a Member  from entering into or carrying out any inter -governmental agreement 
(or other agreement on behalf of a government for the purpose specified in this 
sub-paragraph) made by or for a military establishment for the purpose of meeting 
essential requirements of  the national security of one or more of the participating 
countries;  or  
 
 (d)to prevent action taken in accordance with the provisions of Annex M to this Charter.  
 
2. Nothing in this Charter shall be construed to override  
 
 (a)any of the provisions of peace treaties or permanent settlements resulting from the Second 
World War which are or shall be in force and which are or, shall be registered with the 
United Nations,  or 
 
 (b)any of the provisions of the instruments creating Trust Territories or any other special 
régimes established by the United Nations.  
 
 
Article 100  
 
Amendments  
 
 
1. Any amendment to this Charter which does not alter the obligations of Members shall become 
effective upon approval by the Conference by a two- thirds majority of the Members.  
 
2. Any amendment which alters the obligations of Members shall, after receiving the approval of 
the Conference by a two- thirds majority of the Members present and voting, become effective for the 
Members accepting the amendment upon the ninetieth day after tw o-thirds of the Members have notified 
the Director -General of their acceptance, and thereafter for each remaining Member upon acceptance by 
it.  The Conference may, in its deci sion approving an amendment under this paragraph and by one and 
the same vote, determine that the amendment is of such a nature that the Members  
 
 
 
which do not accept it within a specified period after the amendment becomes effective shall be 
suspended from membership in the Organization;  Provided that the Conference may, at any time, by a  - 94 - 
 
two-thirds majority of the Members present and voting, determine the conditions under which such 
suspension shall not apply with respect to any such Member.  
 
3. A Member not accepting an amendment under paragraph 2 shall be free to withdraw from  the 
Organization at any time after the amendment has become effective;  Provided , that the Director -Gen-
eral has received from such Member sixty days' written notice of withdrawal; and provided further  that 
the withdrawal of any Member suspended under the  provisions of paragraph 2 shall become effective 
upon the receipt by the Director -General of written notice of withdrawal.  
 
4. The Conference shall, by a two- thirds majority of the Members present and voting, determine 
whether an amendment falls under par agraph 1 or paragraph 2, and shall establish rules with respect to 
the reinstatement of Members suspended under the provisions of paragraph 2, and any other rules 
required for carrying out the provisions of this Article. 
 
5. The provisions of Chapter VIII may be amend ed within the limits and in accordance with the 
procedure set forth in Annex N.  
 
 
Article 101  
 
Review of the Charter  
 
 
1. The Conference shall carry out a general review of the provisions of this Charter at a special 
session to be convened in conjunction with the regular annual session nearest the end of the fifth year 
after the entry into force of the Charter.  
 
2. At least one year before the special session referred to in paragraph 1, the Director -General shall 
invite the Members to submit an y amendments or observations which they may wish to propose and 
shall circulate them for consideration by the Members. 
 
3. Amendments resulting from such review shall become effective in accordance with the 
procedure set forth in Article 100. 
 
 
Article 102  
 
Withdrawal and Termination 
 
 
1. Without prejudice to any special provision in this Charter relating to withdrawal, any Me mber 
may withdraw from the Organization, either in respect of itself or of a separate customs territory on 
behalf of which it has accepted the Charter in accordance with the provisions of Article 104, at any time 
after three years from the day of the entry  into force of the Charter.  
 
2. A withdrawal under paragraph 1 shall become effective upon the expiration of six months from 
the day on which written notice of such withdrawal is received by the Director -General.  The Director -
-General shall immediately no tify all the Members of any notice of withdrawal which he may receive 
under this or other provisions of the Charter.  
 
3. This Charter may be terminated at any time by agreement of three- fourths of the Members.   - 95 - 
 
 
 
Article 103  
 
Entry into Force and Registrati on 
 
1. The government of each State accepting this Charter shall deposit an instrument of acceptance 
with the Secretary -General of the United Nations, who will inform all governments represented at the 
United Nations Conference on Trade and Employment and  all Members of the United Nations not so 
represented of the date of deposit of each instru ment of acceptance and of the day on which the Charter 
enters into force.  Subject to the provisions of Annex 0, after the entry into force of the Charter in 
accord ance with the provisions of paragraph 2, each instrument of acceptance so deposited shall take 
effect on the sixtieth day following the day on which it is deposited.  
 
2. (a)This Charter shall enter into force:  
 
  (i)on the sixtieth day following the day on which a majority of the governments signing 
the Final Act of the United Nations Confer ence on Trade and Employment 
have de posited instruments of acceptance in accord ance with the provisions of 
paragraph 1;  or  
 
  (ii)if, at the end of one year from the date of signature of the said Final Act, it has not 
entered into force in accordance with the provisions of sub- paragraph (a) (i), 
then on the sixtieth day following the day on which the number of governments 
represented at the United Nations Conference on Trade and Employment which 
have deposited instruments of acceptance in accordance with the provisions of 
paragraph 1 shall reach twenty, Provided  that if twenty such governments have 
deposited acceptances more than sixty days before the end of such year, it shall 
not enter into force until the end of that year.  
 
 (b)If this Charter shall not have entered into force by September 30, 1949, the 
Secretary -General of the United Nations shall invite those governments  which have 
deposited instruments of accep tance to enter into consultation to determine whether and 
on what conditions they desire to bring the Charter into force.  
 
3. Until September 30, 1949, no State or separate customs territory, on behalf of which the said 
Final Act has been signed, shall be deemed to be a non- Member for the purposes of Article 98.  
 
4. The Secretary -General of the United Nations is authorized to register this Charter as soon as it 
enters into force.  
  - 96 - 
 
Article 104  
 
Territorial Application  
 
 
1. Each government accepting this Charter does so in respect of its metropolitan territory and of 
the other territories for which it has international responsibility, except such separate customs territories 
as it shall notify to the Organization at the time of its own acceptance.  
 
2. Any Member may at any time accept this Charter, in accordance with the  provisions of 
paragraph 1 of Article 103, on behalf of any separate customs territory excepted under the provisions of 
paragraph 1. 
 
3. Each Member shall take such reasonable measures as may be available to it to ensure 
observance of the provisions of this Charter by the regional and local governments and authorities 
within its territory.  
 
Article 105  
 
 
Annexes  
 
 
 The Annexes to this Charter form an integral part thereof.  
 
 
Article 106  
 
Deposit and Authenticity of Texts  
 
Title and Date of the Charter  
 
 
1. The original texts of this Charter in the official languages of the United Nations shall be 
deposited with the Secretary -General of the United Nations. who will furnish certified copies of the texts 
to all interested governments.  Subject to the provisions  of the Statute of the International Court of 
Justice, such texts shall be equally authoritative for the purposes of the interpretation of the Charter, and 
any discrepancy between texts shall be settled by the Conference.  
  
2. The date of this Charter shal l be March 24, 1948.  
 
3. This Charter for an International Trade Or ganization shall be known as the Havana Charter.  
 
  - 97 - 
 
ANNEX A  
 
LIST OF TERRITORIES REFERRED TO IN PARAGRAPH 2 (a) OF ARTICLE 16  
 
 
 
 United Kingdom of Great Britain and Northern Ireland  
 
 Dependent territories of the United Kingdom of Great Britain and Northern Ireland  
 
 Canada  
 
 Commonwealth of Australia  
 
 Dependent territories of the Commonwealth of Australia  
 
 New Zealand  
 
 Dependent territories of New Zealand  
 
 Union of South Africa including South West Africa  
 
 Ireland  
 
 India (as at April 10, 1947)  
 
 Newfoundland 
 
 Southern Rhodesia  
 
 Burma  
 
 Ceylon 
 
 Certain of the territories listed above have two or more preferential ra tes in force for certain 
products.  Any such territory may, by agreement with the other Members which are principal suppliers 
of such products at the most -favoured- nation rate, substitute for such preferential rates a single pre-
ferential rate which shall  not on the whole be less favourable to suppliers at the most -favoured- nation 
rate than the preferences in force prior to such substitution. 
 
     The preferential arrangements referred to in paragraph 5 (b) of Article 23 are those existing in the 
United Kingdom on April 10, 1947, under con tractual agreements with the Governments of Canada, 
Australia and New Zealand, in respect of chilled and f rozen beef and veal, frozen mutton and lamb, 
chilled and frozen pork, and bacon.  Without prejudice to any action taken under paragraph  1 (a) (ix) of 
Article 45, negotiations shall be entered into when practicable among the countries substantially 
concerne d or involved, in the manner provided for in Article 17, for the elimination of these 
arrangements or their replacement by tariff preferences.  If after such negotiations have taken place a 
tariff preference is created or an existing tariff preference is i ncreased to replace these arrangements 
such action shall not be considered to contravene the provisions of Article 16 or Ar ticle 17.  
 
 The film hire tax in force in New Zealand on April 10, 1947 shall, for the purpose of this  - 98 - 
 
Charter, be treated as a cust oms duty falling under Article 16 and 17.  The renters' film quota in force in 
New Zealand on April 10, 1947, shall for the purposes of this Charter be treated as a screen quota falling 
under Article 19.  
 
 The Dominions of India and Pakistan have not been mentioned separately in the above list since 
they had not come into existence as such on the base date of April 10, 1947.  
 
 _______________ 
 
ANNEX B  
 
LIST OF TERRITORIES OF THE FRENCH UNION REFERRED TO  
IN PARAGRAPH 2 (b) OF ARTICLE 16  
 
 
 France  
 
 French Equatorial Africa (Treaty Basin of the Congo* and other territories)  
 
 French West Africa  
 
 Cameroons under French Mandate*  
 
 French Somali Coast and Dependencies  
 
 French Establishments in India*  
 
 French Establishments in Oceania  
 
 French Establishments in the Condominium of the New Hebrides*  
 
 Guadeloupe and Dependencies  
 
 French Guiana  
 
 Indo- China  
 
 Madagascar and Dependencies  
 
 Morocco (French zone)*  
 
 Martinique  
 
 New Caledonia and Dependencies  
  
 Reunion 
 
 Saint -Pierre and Miquelon  
 
 Togo under French Mandate* 
  - 99 - 
 
 Tunisia  
_______________ 
 *For imports into Metropolitan France and territories of the French Union.  
 
_______________  
 
ANNEX C  
 
 
LIST OF TERRITORIES OF THE CUSTOMS UNION OF BELGIUM,  
LUXEMBOURG AND TH E NETHERLANDS  
REFERRED TO IN PARAGRAPH 2 (b) OF ARTICLE 16  
 
 
 The Economic Union of Belgium and Luxembourg  
 
 Belgian Congo 
 
 Ruanda Urundi  
 
 The Netherlands  
 
 Netherlands Indies  
 
 Surinam  
 
 Curaçao  
 
(For imports into the metropolitan territories of the Customs Union.)  
 
_______________ 
 
ANNEX D  
 
 
LIST OF TERRITORIES OF THE UNITED STATES OF AMERICA  
REFERRED TO IN PARAGRAPH 2 (b) OF ARTICLE 16  
 
United States of America (customs territory)  
Dependent territories of the United States of America  
 
_______________  
 
ANNEX E  
 
 
LIST OF PORTUGUESE TERRITORIES REFERRED TO IN  
PARAGRAPH 2 (b) OF ARTICLE 16  
 
 
 Portugal and the Archipelagoes of Madeira and the  Azores   - 100 - 
 
 
 Archipelago of Cape Verde  
 
 Guinea  
 
 St. Tome and Principe and Dependencies  
 
 S. Joao Batiste de Ajuda  
 
 Cabinda  
 
 Angola  
 
 Mozambique  
 
 State of India and Dependencies  
 
 Macao and Dependencies  
 
 Timor and Dependencies  
 
 _______________ 
 
ANNEX F  
 
 
LIST OF TERRITORIES COVERED BY PREFERENTIAL ARRANGEMENTS 
BETWEEN CHILE AND NEIGHBOURING COUNTRIES REFERRED  
TO IN PARAGRAPH 2 (e) OF ARTICLE 16  
 
 
Preferences in force exclusively between, on the one hand, 
 
     Chile  
 
    and, on the other hand,  
 
    1. Argentina  
 
    2. Bolivia  
 
    3. Peru,  
 
 respectively.  
 
_______________  
  - 101 - 
 
ANNEX G  
 
 
LIST OF TERRITORIES COVERED BY PREFERENTIAL ARRANGEMENTS BETWEEN THE 
SYRO- LEBANESE CUSTOMS UNION AND NEIGHBOURING COUNTRIES REFERRED TO IN 
PARAGRAPH 2 (e) OF ARTICLE 16  
 
 
Preferences in force exclusively between, on the one hand, 
 
    The Syro -Lebanese Customs Union  
 
    and, on the other hand,  
 
    1. Palestine  
 
    2. Transjordan,  
 
    respectively.  
 
 
 _______________ 
 
ANNEX H  
 
 
LIST OF TERRITORIES COVERED BY PREFERENTIAL ARRANGEMENTS AMONG  
COLOMBIA, ECUADOR AND VENEZUELA REFERRED TO  
IN PARAGRAPH 2 (e)  OF ARTICLE 16  
 
 
Preferences in force exclusively between two or more of the following countries:  
 
     Colombia  
 
     Ecuador  
 
     Venezuela  
 
 Notwithstanding the provisions of Article 16, Venezuela may provisionally maintain the special 
surcharges which on November 21, 1947, were levied on products imported via certain territories:  
Provided  that such surcharges shall not be increased above the level in effect on that date and shall be 
eliminated not later than five years from the date of this Charter.  
 
 
_______________  
  - 102 - 
 
ANNEX I  
 
 
LIST OF TERRITORIES COVERED BY INITIAL ARRANGEMENTS AMONG 
THE REPUBLICS OF CENTRAL AMERICA REFERRED TO  
IN PARAGRAPH 2 (e) OF ARTICLE 16  
 
 
Preferences in force exclusively between two or more of the following countries:  
 
     Costa Rica  
 
     El Salvador  
 
     Guatemala  
 
     Honduras  
 
     Nicaragua  
 
_______________  
 
ANNEX J  
 
 
LIST OF TERRITORIES COVERED BY PREFERENTIAL ARRANGEMENTS BETWEEN 
ARGENTINA AND NEIGHBOURING COUNTRIES  REFERRED TO  
IN PARAGRAPH 2 (e) OF ARTICLE 16  
 
 
Preferences in force exclusively between, on the one hand, 
 
     Argentina  
 
    and, on the other hand,  
 
    1. Bolivia  
 
    2. Chile  
 
    3. Paraguay, 
 
   respectively.  
 
_______________  
  - 103 - 
 
ANNEX K  
 
EXCEPTIONS TO THE RULE OF NON -DISCRIMINATION  
 
 
 (Applicable to Members who so elect, in accordance with paragraph I (d) of Article 23, in lieu 
of paragraphs 1 (b) and 1 (c) of Article 23.)  
 
1. (a)A Member applying import restrictions under Article 21 may relax such restrictions in a 
manner which departs from the provisions of Article 22 to the extent necessary to 
obtain additional imports above the maximum total of imports which it could afford in 
the light of the requirements of paragraphs 3 (a) and 3 (b) of Article 21 if its restrictions 
were fully consistent with the provisions of Article 22;  Provided  that 
 
  (i)levels of delivered prices for products so imported are not established substantially 
higher than those ruling for compara ble goods regularly available from other 
Member countries, and that any excess of such price levels for products so 
imported is progressively reduced over a reasonable period;  
 
  (ii)the Member taking such action does not do so as part of any arrangement by which 
the gold or convertible currency which the Member currently receives directly 
or indirectly from its exports to other Members not party to the arrangement is 
appreciably reduced below the level it could otherwise have been reasonably 
expected to a ttain;  
 
  (iii)such action does not cause unnecessary dam age to the commercial or economic 
interests of any other Member, including interests under Articles  3 and 9.  
 
 (b)Any Member taking action under this para graph shall observe the principles of 
sub-paragraph (a).  A Member shall desist from transactions which prove to be 
inconsistent with that sub -paragraph but the Member shall not be required to satisfy 
itself, when it is not practicable to do so, that the require ments of that sub -paragraph are 
fulfilled in respect of individual transactions. 
 
2. Any Member taking action under paragraph 1 of this Annex shall keep the Organization 
regularly informed regarding such action and shall provide such available relevant information as the 
Organ ization may re quest.  
 
3. If at any time the Organization finds that import restrictions are being applied by a Member in a 
discriminatory manner inconsistent with the exceptions provided for under paragraph 1 of this Annex, 
the Member shall, within sixty days, remove th e discrimination or modify it as specified by the 
Organization;  Provided  that any action under paragraph 1 of this Annex, to the extent that it has been 
approved by the Organization at the request of a Member under a procedure analogous to that of 
paragra ph 5 (c) of Article 21, shall not be open to challenge under this paragraph or under paragraph 5 
(d) of Article 21 on the ground that it is inconsistent with the provisions of Article 22. 
 
_______________  
 
 
ANNEX L  
  - 104 - 
 
RELATING TO ARTICLE 78  
 
 
Selection of the Members of the  
First Executive Board  
 
 
 To facilitate the work of the Conference at its first session, the following rules shall apply with 
respect to the selection of the members of the first Executive Board under  the provisions of Article 78:  
 
1. Six seats on the Board shall be filled under sub- paragraph (a) and (b) of paragraph 3 of Article 
78 by Member countries of the Western Hemisphere*.  If five or more countries of the Western 
Hemisphere, eligible for electi on under paragraph 8 (b) of Article 78, have not become Members of the 
Organization at the time of the election, only three seats shall be filled under paragraph 3 (b).  If ten or 
more of the countries of the Western Hemisphere, eligible for election under  paragraph 3 (b), have not 
become Members of the Organization at the time of the election, only two seats shall be filled under 
paragraph 3 (b).  The seat or seats thus unoccupied shall not be filled unless the Conference otherwise 
decides by a two -thirds  majority of the Members present and voting.  
 
2. In order to ensure a selection in accordance with the provisions of paragraph 3 (a) of Article  78, 
the following countries and customs unions shall be deemed to fulfil the conditions set out therein:  
 
 (a)the two countries in the Western Hemisphere and  the  three  countries  or  customs  
unions in  Europe  with  the  largest  external   trade, which participated in the 
Havana Conference; and  
 
 (b)in view of their potential importance in international trade, the three countries with the 
largest population in the world.  
 
 Should any of these countries, including any country participating in a customs union, not be a 
Member of the Organization at t he time of the election, the Conference shall review the situation; 
however, the unoccupied seat or seats shall not be filled, unless the Conference otherwise decides by a 
two-thirds majority of the Members present and voting. 
 
3. In the election of member s of the Executive Board under the provisions of paragraph 3 (b) of 
Article 78, the Conference shall have due regard to the provisions of paragraph 2 of that Article and to 
the fact that certain relationships existing among a geographical group of countrie s may in certain cases 
give such a group a distinctive and unified character.  
 
4. The members selected under paragraph 3 (a) of Article 78 shall serve for a term of three years.  
Of the members elected under paragraph 3 (b), half, as determined by lot, sha ll serve for a term of two 
years, and the other half for a term of four years.  However, if an uneven number of Members has been 
elected, the Conference shall determine the number to serve for two and for four years respectively. 
_______________ 
 *That is, North, Central and South America.  
_______________  
 
ANNEX M  
 
REFERRED TO IN PARAGRAPH 1 (d) OF ARTICLE 99  
  - 105 - 
 
Special Provisions regarding India and Pakistan  
 
 In view of the special circumstances arising out of the establishment as independent States of 
India and Pakistan, which have long constituted an economic unit, the provisions of this Charter shall 
not prevent the two countries from entering into special interim agreements with respect to the trade be -
tween them, pending the establishment of their reciprocal trade relations on a definitive basis.  When 
these relations have been established, measures adopted by these countries in order to carry out 
definiti ve agreements with respect to their reciprocal trade relations, may depart from parti cular 
provisions of the Charter, provided that such measures are in general consistent with the objec tives of 
the Charter.  
 _______________ 
 
ANNEX N  
 
REFERRED TO IN PARA GRAPH 5 OF ARTICLE 100  
 
Special Amendment of Chapter VIII  
 
 Any amendment to the provisions of Chapter VIII which may be recommended by the Interim 
Com mission for the International Trade Organization after consultation with the International Court of 
Justice and which relates to review by the Court of matters which arise out of the Charter but which are 
not already covered in Chapter VIII, shall become effective upon approval by the Conference, at its first 
regular session, by a vote of a majority of the M embers;  Provided  that such amendment shall not 
provide for review by the Court of any economic or financial fact as established by or through the 
Organization;  and Provided further that such amendment shall not affect the obligation of Members to 
accept the advisory opinion of the Court as binding on the Organization upon the points covered by such 
opinion;  and Provided  further that, if such amendment alters the obligations of Members, any Member 
which does not accept the amendment may withdraw from the Organization upon the expiration of sixty 
days from the day on which written notice of such withdrawal is received by the Director -General.  
 
 
_______________  
 
 
ANNEX 0  
 
REFERRED TO IN PARAGRAPH 1 OF ARTICLE 103  
 
Acceptances within sixty days of the First Regular Session  
 
 
 For the purpose of the first regular session of the Conference, any government which has 
deposited an instrument of acceptance in accordance with the provisions of paragraph 1 of Article 103 
prior to the first day of the session, shall have the same right to participate in the Conference as a 
Member.  
_______________  
 
ANNEX P  
 
INTERPRETATIVE NOTES 
  - 106 - 
 
ad Article 13  
 
 
Paragraphs 7 (a) (ii) and (iii)  
 
 
 The word "processing", as used in these sub -parag raphs, means the transformation of a primary 
commodity or of a by- product of such transforma tion into semi -finished or finished goods but does not 
refer to highly developed industrial processes.  
 
 
ad Article 15  
 
 
Paragraph 1 
 
 The special circumstances referred to in paragraph 1 are those set forth in Article 15.  
 
Paragraph 4 (a)  
 
 The Organization need not interpret the term "economic region" to require close geographical 
proximity if it is satisfied that a sufficient degree of  economic integration exists between the countries 
concerned.  
 
Paragraph 6 (d)  
 
 The words "the prospective parties to a regional preferential agreement have, prior to November 
21, 1947, obtained from countries representing at least two- thirds of their im port trade the right to depart 
from most -favoured- nation treatment in the cases envisaged in the agreement" cover rights to con clude 
preferential agreements which may have been recognized in respect of mandated territories which 
became independent prior t o November 21, 1947, in so far as these rights have not been specifically 
denounced before that date.  
 
ad Article 16  
 
 
Note I  
 
 The term "margin of preference" means the absolute difference between the 
most -favoured- nation rate of duty and the preferential  rate of duty for the like product, and not the 
proportionate relation between those rates.  As examples:  
 
1. If the most -favoured- nation rate were 36 per cent ad valorem and the preferential rate were 24 
per cent ad valorem, the margin of preference would be 12 per cent ad valorem, and not one -third of the 
most -favoured- nation rate.  
 
2. If the most -favoured- nation rate were 36 per cent ad valorem and the preferential rate were ex -
pressed as two -thirds of the most -favoured- nation rate, the margin of prefere nce would be 12 per cent ad 
valorem.  
 
3. If the most -favoured- nation rate were 2 francs per kilogram and the preferential rate 1.50  francs  - 107 - 
 
per kilogram, the margin of preference would be 0.50 francs per kilogram.  
 
Note 2  
 
 The following kinds of customs action, taken in accordance with established uniform 
procedures, would not be contrary to the binding of margins of preference under paragraph 4:  
 
 (i)the re -application to an imported product of a tariff classification or rate of duty, properly 
applicable to such product, in cases in which the application of such classification or 
rate to such product was temporarily suspended or inoper ative on April 10, 1947;  and 
 
 (ii)the classification of a particular product under a tariff item other than that under which 
importations of that product were classified on April 10, 1947, in cases in which the 
tariff law clearly contemplates that such p roduct may be classified under more than one 
tariff item.  
 
 
ad Article 17  
 
 
 An internal tax (other than a general tax uni formly applicable to a considerable number of 
products) which is applied to a product not produced domestically in substantial quantities shall be 
treated as a customs duty under Article 17 in any case in which a tariff concession on the prod uct would 
not be of substantial value unless accom panied by a binding or a reduction of the tax. 
 
Paragraph 2 (d)  
 
 In the event of the devaluation of a Member's currency, or of a rise in prices, the effects of such 
devaluation or rise in prices would be a matter for  consideration during negotiations in order to deter -
mine, first, the change, if any, in the protective incidence of the specific duties of the Member con cerned 
and, secondly, whether the binding of such specific duties represents in fact a concession equivalent in 
value to the substantial reduction of high duties or the elimination of tariff preferences. 
 
 
ad Article 18  
 
 
 Any internal tax or other internal charge, or any law, regulation or requirement of the kind 
referred to in paragraph 1 which applies to an imported product and to the like domestic product and is 
collected or enforced in the case of the imported product at the time or point of importation, is 
nevertheless to be regarded as an internal tax or other internal charge, or a law, regulation o r requirement 
of the kind referred to in paragraph 1, and is accordingly subject to the provision; of Article 18.  
  - 108 - 
 
Paragraph 1 
 
 The application of paragraph 1 to internal taxes imposed by local governments and authorities 
within the territory of a Member is subject to the provis ions of paragraph 3 of Article 104.  The term 
"reason able measures" in the last -mentioned paragraph would not require, for example, the repeal of 
existing national legislation authorizing local governments to impose internal taxes which, although 
technically inconsistent with the letter of Article 18, are not in fact inconsistent with spirit, if such repeal  
would result in a serious financial hardship for the local governments or authorities concerned.  With 
regard to taxation by local governments or author ities which is inconsistent with both the letter and spirit 
of Article 18, the term "reasonable measur es" would permit a Member to eliminate the inconsistent 
taxation gradually over a transition period, if abrupt action would create serious administrative and fi -
nancial difficulties.  
 
Paragraph 2 
 
 A tax conforming to the requirements of the first sentence of paragraph 2 would be considered 
to be inconsistent with the provisions of the second sentence only in cases where competition was 
involved between, on the one hand, the taxed product and on the other hand, a directly competitive or 
substitutable produc t which was not similarly taxed.  
 
Paragraph 5 
 
 Regulations consistent with the provisions of the first sentence of paragraph 5 shall not be 
considered to be contrary to the provisions of the second sentence in any case in which all of the 
products subjec t to the regulations are produced domestically in substantial quantities.  A regulation 
cannot be justi fied as being consistent with the provisions of the second sentence on the ground that the 
proportion or amount allocated to each of the products which are the subject of the regulation constitutes 
an equitable relationship between imported and domestic products.  
 
ad Article 20  
 
Paragraph 2 (a)  
 
 In the case of products which are basic to diet in the exporting country and which are subject to 
alternate annual shortages and surpluses the provisions of paragraph 2 (a) do not preclude such export 
prohibitions or restrictions as are necessary to mainta in from year to year domestic stocks sufficient to 
avoid critical shortages.  
 
Paragraph 2 (c)  
 
 The expression "agricultural and fisheries product, imported in any form" means the product in 
the form in which it is originally sold by its producer and such processed forms of the product as are so 
closely related to the original product as regards utilization that their unrestricted importa tion would 
make the restriction on the original product ineffective.  
 
Paragraph 3 (b)  
  - 109 - 
 
 The provisions for prior consul tation would not prevent a Member which had given other 
Members a reasonable period of time for such consultation from introducing the restrictions at the date 
intended. It is recognized that, with regard to import restrictions applied under paragraph 2 (c) (ii), the 
period of advance notice provided would in some cases necessarily be relatively short.  
 
Paragraph 3 (d)  
 
 The term "special factors" in paragraph 3 (d) includes among other factors changes in relative 
productive efficiency as between domestic and foreign producers which may have occurred since the 
representative period.  
 
 
ad Article 21  
 
 
 With regard to the special problems that might be created for Members which, as a result of 
their programmes of full employment, maintenance of high and rising levels of demand and economic 
development, find themselves faced with a high level of demand for  imports, and in consequence 
maintain quantitative regulation of their foreign trade, it was considered that the text of Article 21, 
together with the provision for export controls in certain parts of this Charter, for example, in Article  45, 
fully meet th e position of these economies.  
 
 
ad Article 22  
 
Paragraphs 2 (d) and 4  
 
 The term "special factors" as used in Article 22 includes among other factors the following 
changes, as between the various foreign producers, which may have occurred since the representative 
period:  
 
 1. changes in relative productive efficiency;  
 
 2. the existence of new or additional ability to export;  and 
 
 3. reduced ability to export.  
 
Paragraph 3 
 
 The first sentence of paragraph 3 (b) is to be understood as requiring the Membe r in all cases to 
give, not later than the beginning of the relevant period, public notice of any quota fixed for a specified 
future period, but as permitting a member, which for urgent balance -of-payments reasons is under the 
necessity of changing the quota within the course of a specified period, to select the time of its giving 
public notice of the change.  This in no way affects the obligation of a Member under the provisions of 
paragraph 3 (a), where applicable.  
 
 
ad Article 23  
 
Paragraph 1 (g)  
  - 110 - 
 
 The provisions of paragraph 1 (g) shall not authorize the Organization to require that the 
procedure of consultation be followed for individual transactions unless the transaction is of so large a 
scope as to constitute an act of general policy.  In that event, the Organization shall, if the Member so 
requests, consider the transaction, not individual ly, but in relation to the Member's policy regarding 
imports of the product in question taken as a whole.  
 
Paragraph 2 
 
 One of the situations contemplated in paragraph 2 is that of a Member holding balances 
acquired as a result of current transactions which it finds itself unable to use without a measure of 
discrimination.  
 
 
 ad Article 24  
 
Paragraph 8 
 
 For example, a Member which, as part o f its exchange control operated in accordance with the 
Articles of Agreement of the International Monetary Fund, requires payment to be received for its 
exports in its own currency or in the currency of one or more members of the Fund would not thereby be 
deemed to contravene the provisions of Articles 20 or 22.  Another example would be that of a Member 
which specifies on an import licence the country from which the goods may be imported for the 
purpose, not of introducing any additional element of discrim ination in its import licensing system, but 
of enforcing permissible exchange controls. 
 
 
 ad Article 29  
 
Paragraph 1 
 
Note 1  
 
 Different prices for sales and purchases of prod ucts in different markets are not precluded by the 
provisions of Article 29, provided that such different prices are charged or paid for commercial reasons, 
having regard to differing conditions, including supply and demand, in such markets. 
 
Note 2  
 
 Sub-paragraphs (a) and (b) of paragraph 1 shall not be construed as applying to the trading 
activities of enterprises to which a Member has granted licences or other special privileges  
 
 (a)solely to ensure standards of quality and efficiency in the conduct of  its external trade;  or  
 
 (b)for the exploitation  of  its  natural  resources;  
 
provided that the Member does not thereby establish or exercise effective control or direction of the tra -
ding activities of the enterprises in question, or create a monopoly whose trading activities are subject to 
effective governmental control or directi on. 
  - 111 - 
 
 ad Article 31  
 
Paragraphs 2 and 4 
 
 The maximum import duty referred to in para graphs 2 and 4 would cover the margin which has 
been negotiated or which has been published or notified to the Organization, whether or not collected, 
wholly or in part, at the custom house as an ordinary customs duty.  
 
Paragraph 4 
 
 With reference to the second proviso, the method and degree of adjustment to be permitted in 
the case of a primary commodity which is the subject of a domestic price stabilization arrangement 
should normally be a matter for agreement at the time of the negotiations under paragraph 2 (a).  
 
 
 ad Article 33  
 
Paragraph 1 
 
 The assembly of vehicles and mobile machinery arriving in a knocked- down condition or the 
disassembly (or disassembly and subsequent reassem bly) of bulky articles shall not be held to rende r the 
passage of such goods outside the scope of "traffic in transit", provided that any such operation is 
undertaken solely for convenience of transport. 
 
Paragraphs 3, 4 and 5 
 
 The word "charges" as used in the English text of paragraphs 3, 4 and 5 shal l not be deemed to 
include transportation charges.  
 
Paragraph 6 
 
 If, as a result of negotiations in accordance with paragraph 6, a Member grants to a country 
which has no direct access to the sea more ample facilities than those already provided for in ot her 
paragraphs of Article 33, such special facilities may be limited to the land -locked country concerned 
unless the Organization finds, on the complaint of any other Member, that the withholding of the special 
facilities from the complaining Member contra venes the most -favoured- nation provisions of this 
Charter.  
 
 
 ad Article 34  
 
Paragraph 1 
 
 Hidden dumping by associated houses (that is, the sale by an importer at a price below that 
corresponding to the price invoiced by all exporter with whom the importer is associated, and also below 
the price in the exporting country) constitutes a form of price dumping with respect to which the margin 
of dumping may be calculated on the basis of the pri ce at which the goods are resold by the importer.  
  - 112 - 
 
Paragraphs 2 and 3 
 
Note 1  
 
 As in many other cases in customs administration, a Member may require reasonable security 
(bond or cash deposit) for the payment of anti -dumping or countervailing duty pendi ng final 
determination of the facts in any case of suspected dumping or subsidization. 
 
Note 2  
 
 Multiple currency practices can in certain circumstances constitute a subsidy to exports which 
may be met by countervailing duties under paragraph 3 or can constitute a form of dumping by means of 
a partial depreciation of a country's currency which may be met by action under paragraph 2.  By 
"multiple currency practices" is meant practices by governments or sanctioned by governments.  
 
 
 ad Article 35  
 
Paragraph 3 
 
Note 1  
 
 It would be in conformity with Article 35 to presume that "actual value" may be represented by 
the invoice price (or in the case of government contracts in respect of primary products, the contract 
price), plus any non- included charges for legitimate costs which are proper elements of "actual value" 
and plus any abnormal discount, or any reduction from the ordinary competitive price. 
 
Note 2  
 
 If on the date of this Charter a Member has in force a system under which ad v alorem duties are 
levied on the basis of fixed values, the provisions of paragraph 3 of Article 35 shall not apply:  
 
 1.in the case of values not subject to periodical revision in regard to a particular product, as long 
as the value established for that pr oduct remains unchanged;  
 
 2.in the case of values subject to periodical revision, on condition that the revision is based on 
the average "actual value" established by reference to an immediately preceding period 
of not more than twelve months and that such revision is made at any t ime at the 
request of the parties concerned or of Members.  The revision shall apply to the 
importation or importations in respect of which the specific request for revision was 
made, and the revised value so established shall remain in force pending further 
revision.  
 
Note 3  
 
 It would be in conformity with paragraph 3 (b) for a Member to construe the phrase "in the 
ordinary course of trade", read in conjunction with "under fully competitive conditions", as excluding 
any transaction wherein the buyer and s eller are not independent of each other and price is not the sole 
consideration.  
 
  - 113 - 
 
Note 4  
 
 The prescribed standard of "fully competitive conditions" permits Members to exclude from 
consideration distributors' prices which involve special discounts limited to exclusive agents.  
 
Note 5  
 
 The wording of sub- paragraphs (a) and (b) permits a Member to assess duty uniformly either (1) 
on the basis of a particular exporter's prices of the imported merchandise, or (2) on the basis of the 
general price level of lik e merchandise.  
 
Paragraph 5 
 
 If compliance with the provisions of paragraph 5 would result in decreases in amounts of duty 
payable on products with respect to which the rates of duty have been bound by an international 
agreement, the term "at the earliest practicable date" in paragrap h 2 allows the Member concerned a 
reasonable time to obtain adjustment of the agreement.  
 
 
ad Article 36  
 
Paragraph 3 
 
 While Article 36 does not cover the use of multiple rates of exchange as such, paragraphs 1 and 
3 condemn the use of exchange taxes or f ees as a device for implementing multiple currency practices; 
if, however, a Member is using multiple currency exchange fees for balance- of-payment reasons not 
inconsistently with the Articles of Agreement of the International Monetary Fund, the provisions  of 
paragraph 2 fully safeguard its position since that paragraph merely requires that the fees be eliminated 
at the earliest practicable date.  
 
 
ad Article 40  
 
 
 It is understood that any suspension, withdrawal or modification under paragraphs 1 (a), 1 (b) 
and 3 (b) must not discriminate against imports from any Member country, and that such action should 
avoid, to the fullest extent possible, injury to other supplying Member countries.  
 
 
ad Article 41  
 
 
 The provisions for consultation require Members, subject to the exceptions specifically set forth 
in this Charter, to supply to other Members, upon request, such information as will enable a full and fair 
appraisal of the matters which are the subject of such consultation, including the operation of sanita ry 
laws and regulations for the protection of human, animal or plant life or health, and other matters 
affecting the application of Chapter IV.  
 
  - 114 - 
 
ad Article  44  
 
 
Paragraph 5  
 
 It is understood that the provisions of Article 16 would require that, when a product which has 
been imported into the territory of a member of a customs union or free -trade -area at a preferential rate 
of duty is re -exported to the territory of another member of such union or area, the latter member should 
collect a duty equal to the difference between the duty already paid and the most -favoured- nation rate.  
 
 
ad Article  53  
 
 
 The provisions of this Article shall not apply to matters relating to shipping services which are 
subject to the Convention of the Inter -governmental Maritime Consultative Organization.  
 
 
 ad Article  86  
 
 
Paragraph 3 
 
Note I  
 
 If any Member raises the qu estion whether a measure is in fact taken directly in connection with 
a political matter brought before the United Nations in accordance with the provisions of Chapters  IV or 
VI of the United Nations Charter, the responsibility for making a determination on the question shall rest 
with the Organization.  If, however, political issues beyond the competence of the Organization are 
involved in making such a determination, the question, shall be deemed to fall within the scope of the 
United Nations.  
 
Note 2  
 
 If a Member which has no direct political concern in a matter brought before the United Nations 
considers that a measure taken directly in connection therewith and falling within the scope of para graph 
3 of Article 86 constitutes a nullification or impairm ent within the terms of paragraph 1 of Article 93, it 
shall seek redress only by recourse to the procedures set forth in Chapter VIII of this Charter.  
 
ad Article 98  
 
 
 Nothing in this Article shall be construed to prejudice or prevent the operation of the provisions 
of paragraph 1 of Article 60 regarding the treatment to be accorded to non- participating countries under 
the terms of a commodity control agreement which con forms to the requirements of Chapter VI.  
 
ad Article 104  
 
 
Note 1  
  - 115 - 
 
 In the case of a condominium, where the codomini are Members of the Organization, they may, 
if they so desire and agree, jointly accept this Charter in respect of the condominium. 
 
 
 
Note 2  
 
 Nothing in this Article shall be construed as prejudicing the rights which may have been or may 
be invoked by States in connection with territorial questions or disputes concerning territorial 
sovereignty.  
 
ad Annex K  
 
 
 It is understood that the fact that a Member is operating under the provisions of paragraph 1 (b) 
(i) of Article 45 does not preclude that Member from operation under this Annex, but that the provisions 
of Article 23 (including this Annex) do not in any wa y limit the rights of Members under paragraph 1 
(b) (i) of Article 45.  
  - 116 - 
 
 
 
 
 
 
 
 
 
RESOLUTIONS  
 
ADOPTED BY THE CONFERENCE  - 117 - 
 
RESOLUTIONS ADOPTED BY THE CONFERENCE  
 
 
I N D E X  
 
 
           Page  
 
1. Resolution establishing an Interim Commission for the Internati onal   118 
 Trade Organization          
 
 
2. Resolution regarding the relation of the International Trade Organization  121 
 and the International Court of Justice   
 
 
3. Resolution regarding the Interim Co- ordinating Committee for   122 
 International Commodity Arrangements  
 
 
4. Resolution relating to Employment       123 
 
 
5. Resolution relating to Economic Development and Reconstruction   125 
 
 
6. Resolution of gratitude t o the Cuban Government and People    126 
  - 118 - 
 
RESOLUTION ESTABLISHING AN  INTERIM COMMISSION FOR THE  
 INTERNATIONAL TRADE ORGANIZATION  
 
 
THE UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT  
 
 
 HAVING prepared the Havana Charter for an International Trade Organization (hereinafter 
referred to as "the Charter" and "the Organization" respectively),  
 
 CONSIDERING that pending the establishment of the Organization certain interim functions 
should be performed,  
 
 HEREBY RESOLVES to establish an Interim Commission for the International Trade 
Organization (hereinafter called "the Commission") consisting of the governments the representatives of 
which have approved this resolution and which are entitled t o original membership of the Organization 
under Article 71 of the Charter.  The terms of reference and structure of the Commission are set out in 
the Annex to this resolution which forms an integral part thereof.  
 
 * * * 
 
 The following delegations approve d the resolution establishing the Interim Commission:  
 
 Afghanistan      Iran 
 Argentina      Iraq 
 Australia      Italy 
 Austria      Lebanon 
 Belgium      Liberia  
 Brazil       Luxembourg  
 Burma       Mexico  
 Canada      Netherlands   
 Ceylon      New Zealand  
 Chile       Nicaragua  
 China       Norway  
 Colombia      Pakistan  
 Costa Rica      Panama  
 Cuba       Peru 
 Czechoslovakia     Philippines  
 Denmark      Poland 
 Dominican Republic     Southern Rhodesia  
 Ecuador     Sweden  
 Egypt       Syria  
 El Salvado r     Transjordan  
 France       Turkey 
 Greece       South Africa  
 Guatemala      United Kingdom  
 Haiti       United States   
 India       Uruguay 
 Republic of Indonesia     Venezuela  
  
 * * *  - 119 - 
 
 
ANNEX  
 
1. The Commission shall elect an Executive Committee of eighteen members to exercise any or all 
of its functions as the Commission may determine on electing the Committee.  
 
2. The Commission shall have the following functions:  
 
 (a)to convoke the first regula r session of the Conference of the Organization (hereinafter 
referred to as "the Conference") not less than four months and, as far as practicable, not 
more than six months after the receipt of the last acceptance needed to bring the Charter 
into force;  
 
 (b)to submit the provisional agenda for the first regular session of the Conference, together with 
documents and recommendations relating to all matters upon this agenda, including:  
 
  (i)proposals as to the programme and budget for the first year of the O rganization;  
 
  (ii)studies regarding selection of headquarters of the Organization;  
 
  (iii)draft financial and staff regulations.  
 
 (c)to prepare, in consultation with the United Nations, a draft agreement of relationship as 
contemplated in paragraph 1 of Article 86 of the Charter for consideration by the first 
regular session of the Conference;  
 
 (d)to prepare, in consultation with inter -governmental organizations other than the United 
Nations, for presentation to the first regular session of the Confere nce, documents and 
recommendations regarding the implementation of the provisions of paragraphs 1 and 3 
of Article 87 of the Charter;  
 
 (e)to prepare, in consultation with non- governmental organizations, for presentation to the first 
regular session of the Conference recommendations regarding the implementation of 
the provisions of paragraph 2 of Article 87 of the Charter;  
 
 (f)to prepare,  with a view to recommendation by the Economic and Social Council to the first 
regular session of the Conference, the Annex referred to in paragraph 3 of Article  90 of 
the Charter;  
 
 (g)to carry out the functions and responsibilities referred to in the fol lowing documents of the 
United Nations Conference on Trade and Employment:  
 
  1.Paragraph 2 of the Final Act of the United Nations Conference on Trade and 
Employment (to which the present resolution is annexed). 
 
  2.The Resolution of the Conference regar ding the relation of the International Trade 
Organization and the International Court of Justice (annexed to the Final Act).  
 
  3.The Resolution of the Conference relating to Economic Development and Recons -
truction (annexed to the Final Act).  
  - 120 - 
 
  4.The Report of Sub- committee G of the Third Committee on the Proposal made by the 
Delegation of Switzerland (E/CONF.2/C.3/78) together with the sections 
relating to that matter in the Report of the Third Committee (E/CONF.2/70). 
 
(h)to enter into consultations with the Secretary -General of the United Nations regarding the expenses 
incurred by the Preparatory Committee of the United Nations Conference on Trade and 
Employment and by that Conference and, in the light of such consulta tions, to present a 
report to the first regular session of the Conference;  
 
 (i)generally to perform such other functions as may be ancillary and necessary to the effective 
carrying out of the provisions of this annex.  
 
3. The Commission shall elect an Executive Secretary who shall be its chief administrative officer. 
 The Executive Secretary shall appoint the staff of the Commission observing, as far as possible, the 
principles of paragraph 2 of Article 85 of the Charter and using, as he considers desirable, such 
assistance as may be extended to him by the Secretary -General of the United Nations.  The Executive 
Secretary shall also perform such other functions and duties as the Commission may determine.  
 
4. The Commission shall approve the budget estimates for the operation of the Commission.  The 
Executive Secretary shall prepare the draft of such estimates.  The expenses of the Commission shall be 
met from funds provided by the 'United Nations and for this purpose the Commi ssion shall make the 
necessary arrangements with the Secretary -General of the United Nations for the advance of such funds 
and for their reimbursement.  Should these funds be insufficient, the Commission may accept advances 
from Governments.  Such advance s from Governments may be set off against the contributions of the 
Governments concerned to the Organization. 
 
5. Arrangements may be made with the Secretary -General of the United Nations regarding the 
provision of such personnel as may be required to car ry on the work or the Interim Co- ordinating 
Committee for International Commodity Arrangements.  
 
6. The Executive Committee shall hold its first meeting in Havana immediately after its 
establishment its subsequent meetings shall be held in Geneva unless it  decides otherwise.  
 
7. The Executive Committee shall submit a re port of the activities of the Commission to the first 
regular session of the Conference.  
 
8. The benefit of the privileges and immunities provided in the Convention on Privileges and im -
muni ties of the Specialized Agencies adopted by the General Assembly of the United Nations shall, as 
far as possible, be extended to and in connection with the Commission.  
 
9. The Commission shall cease to exist upon the appointment of the Director -General of the 
Organization, at which time the property and records of the Commission shall be transferred to the 
Organization.  
  - 121 - 
 
RESOLUTION CONCERNING RELATION OF THE INTERNATIONAL TRADE 
ORGANIZATION AND THE INTERNATIONAL COURT OF JUSTICE  
 
 
THE UNITED NATIONS CONFER ENCE ON TRADE AND EMPLOYMENT  
 
 HAVING considered the relation of the International Trade Organization and the International 
Court of Justice;  and 
 
 HAVING provided in Chapter VIII of the Charter, procedures for review by the International 
Court of legal questions arising out of decisions and recommendations of the Organization,  
 
 RESOLVES that the Interim Commission of the International Trade Organization, through such 
means as may be appropriate, shall consult with appropriate officials of the International Court or with 
the Court itself, and after such consultation report to the first regular session of the Conference of the 
International Trade Organization upon the questions of:  
 
 (a)whether such procedures need to be changed to ensure that decisions of the Court on matters 
referred to it by the Organization should, with respect to the Organization, have the 
nature of a judgment;  and 
 
 (b)whether an amendment should be presented to the Conference pursuant to and in accordance 
with the provisions of the annex to Article 100 of the Charter.  
 
  - 122 - 
 
RESOLUTION CONCERNING THE INTERIM CO- ORDINATING COMMITTEE  
FOR INTERNATIONAL COMMODITY ARRANGEMENTS  
 
 
THE UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT  
 
 TAKING note of the resolution adopted by the Economic and Social Council on 
March  28, 1947, establishing an Interim Co- ordinating Committ ee for International Commodity 
Arrangements with a chairman representing the Preparatory Committee of the United Nations 
Conference on Trade and Employment;  
 
 NOTING that, with the commencement of the United Nations Conference on Trade and 
Employment on November 21, 1947, the Preparatory Committee ceased to exist, and that an interim 
commission is expected to be established at the conclusion of the Conference;  and  
 
 RECOGNIZING that it is desirable to avoid any interruption of the interim arrangements for 
co-ordinating action in this field;  accordingly  
 
 RECOMMENDS that the Economic and Social Council attend the composition of the Interim 
Co-ordinating Committee for International Commodity Arrangements to provide that the Chairman of 
that Committee be nominated by the Interim Commission for the International Trade Organization or, in 
the event that an interim commission is not established, by such other body as the United Nations 
Confer ence on Trade and Employment may designate.   - 123 - 
 
RESOLUTION TO THE ECONOMIC  AND SOCIAL COUNCIL RELATING TO EMPLOYMENT  
 
 
THE UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT  
 
 Having recognized in drawing up the Charter for an International Trade Organization that future 
prosperity and peace must be founded on full and productive employment and large and steadily 
growing effective demand which, although primarily dependent upon internal measures taken by ind i-
vidual countries, also require consultation and concerted action as well as assistance from 
inter-governmental agencies;  
 
 Recognizing that different measures may be appropriate for different countries, according, for 
example, to the stage of economic development or reconstruction and the availability of the various 
factors of production;  
 
 Recognizing that inflationary as well as deflationary tendencies may need to be combatted;  
 
 Taking note of the resolution adopted by the Second Session of the Genera l Assembly which 
approved the initiation of surveys of economic conditions and trends and requested recommendations by 
the Economic and Social Council on appropriate measures relating thereto:  
 
1. Notes that the Economic and Employment Commission and its S ub-Commission. on 
Employment and Economic Stability have been instructed to consider the draft resolution on 
international action relating to employment prepared by the First Session of the Preparatory Committee; 
 and 
 
 AFFIRMS its interest in the four mea sures specifically recommended for study in that draft 
resolution.  
 
2. Considers that the studies which have been initiated dealing with the achievement and main-
tenance of full and productive employment should be advanced as rapidly as possible and that a ttention 
should be given now to methods of ensuring that high levels of employment and economic activity shall 
be maintained even when special factors of temporary duration now prevailing in many countries have 
ceased to operate, and accordingly  
 
 SUGGESTS  THAT, with a view to making appropriate recommendations, the Economic and 
Social Council, in addition to the investigations which it has already undertaken,  
 
 (a)Request the submission at an early date, by Members of the United Nations and by 
non-Members represented at the present Conference, of information concerning ac tion 
which they are now taking to achieve or maintain full employment and economic 
stability and the nature of any prepared plans to prevent a future decline, and  
 
 (b)Request the various  specialized agencies to indicate the nature and extent of the assistance 
they are preparing to provide if a decline in employment and economic activity 
threatens.  
 
3. Considers that, in many countries, the problems of persistent surplus or shortage of man power 
are linked with the attainment of full and productive employment and that their solution would advance 
the aims of the International Trade Organization;  and accordingly  
  - 124 - 
 
 SUGGESTS THAT the Economic and Social Council initiate or encourage studies and 
recommend appropriate action in connection with international as pects of population problems as these 
relate to employment, production and demand.  
 
4. Considers that, in relation to the maintenance of full employment, it is advantageous to 
countries which require or receive and to countries which supply workers on a seasonal or temporary 
basis to adopt regulations which will mutually safe guard their interests and also protect both the 
migrants and the dome stic workers against unfair competition or treatment;  and accordingly  
 
 SUGGESTS THAT the Economic and Social Council, in conjunction with appropriate agencies 
such as the International Labour Organisation and its Perma nent Migration Committee, consider the 
problems of temporary or seasonal migration of workers, taking into account existing treaties and long 
established customs and usages pertaining thereto, for the purpose of formulating, in consultation with 
Members directly affected, conventions and mo del bilateral agreements on the basis of which individual 
governments may concert their actions to ensure mutually advantageous arrangements for their countries 
and fair conditions for the workers concerned.  
  - 125 - 
 
RESOLUTION RELATING TO ECONOMIC DEVELOPMENT AND RECONSTRUCTION  
 
 
THE UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT  
 
 Having considered the problems of the industrial and general economic development and 
reconstruction of the Members of the International Trade Organization;  and 
 
 Having noted the related activities of other inter -governmental organizations and specialized 
agencies;  and  
 
 Having determined that positive measures for the promotion of the economic development and 
reconstruction of Members are an essential condi tion for the realization of the purpose stated in Article 1 
of the Charter of the International Trade Organization and to the accomplishment of the objectives 
therein set forth;  and 
 
 Having regard to the provisions of Articles 10, 72, 86 and 87 of the Charter  
 
 THEREFORE RESO LVES:  
 
1. That the Interim Commission of the Interna tional Trade Organization is hereby directed to 
examine  
 
 (i)the powers, responsibilities and activities in the field of industrial and general economic 
development and reconstruction of the United Nations, of the specialized agencies and 
of other inter -governmental organiza tions, including regional organizations;  
 
 (ii)the availability of facilities for technical surveys or studies of:  the natural resources of 
underdeveloped countries;  or the possibilities of their industrial development, whether 
general or in relation to the processing of locally produced raw  materials or other 
particular industries;  or for the improvement of their systems of transportation and 
communications;  or with respect to the manner in which investment of foreign capital 
may contribute to their economic development;  
 
and in the light of this examination to report to the Organization upon  
 
 (a)the structure and administrative methods,  
 
 (b)the working relations with the United Nations, the specialized agencies and other 
inter-governmental organizations including regional organizations  
 
which will enable the international Trade Organization most effectively to carry out its positive 
functions for the promotion of the economic development and reconstruction of Members.  
 
2. That the report and recommendations of the interim Commission shall  be submitted in such a 
manner and at such a time as will enable the Conference of the International Trade Organization to take 
appropriate action at its first session.   - 126 - 
 
RESOLUTION OF GRATITUDE TO THE CUBAN GOVERNMENT AND PEOPLE  
 
 
THE UNITED NATIONS CONFER ENCE ON TRADE AND EMPLOYMENT  
 
 On reaching the termination of its deliberations in the city of Havana, 
 
 Recalling with appreciation the generous in vitation of the Cuban Government to hold the 
Conference in Havana,  
 
 Recognizing the singularly friendly and effective assistance which it has received at all times 
from the Cuban Government and people,  
 
 Has the honour and deep pleasure to convey the expressions of its heart -felt gratitude  
 
 To His Excellency the President of the Rep ublic, Dr. Ramón Grau San Martín, whose 
benevolent interest and goodwill have been throughout a source of encouragement to the Conference;  
 
 To His Excellency Señor Don Rafael González Muñoz, Minister of State, who honoured the 
Conference by accepting its Honorary Presidency;  
 
 To the President of the Cuban Senate and to the President of the Cuban Chamber of 
Representatives who, together with their parliamentary colleagues, have cheerfully borne considerable 
inconvenience in order that the work of the Confe rence might proceed unimpeded at the Capitol 
Building;  
 
 To the President and Secretary -General of the Cuban Auxiliary Commission of the United 
Nations Conference on Trade and Employment whose untiring efforts are in a high degree responsible 
for the smooth functioning of the Conference;  
 
 To the numerous government departments and private organizations which have assisted 
unstintingly in furthering the activities of the Conference:  
 
 To the press representatives of all countries, who have laboured with gr eat energy and 
conscientiousness to keep world opinion informed of the progress of the Conference;  
 
 And to the very many individuals and social organizations which, having contributed so 
generously to the enjoyment and well -being of the representatives an d to the general success of the 
Conference, have won the lasting gratitude and goodwill of all those who came to Cuba to participate in 
the Conference.  
 
  