RESTRICTED
WORLD TRADE S/WPPS/M/3
30January 1996
ORGANIZATION
(96-0358)
Working Party onProfessional Services
REPORT OFTHE MEETING OF16JANUARY 1996
Note bytheSecretariat
1. TheWorking Party onProfessional Services helditsthirdmeeting on16January 1996. The
agenda forthemeeting wascontained inairgram WTO/AIR/238.
2. Delegations firstgavetheirreactions tothelarge bodyofinformation thathadbeenpresented
tothem atthelastmeeting andsubsequently circulated indocument form. Thiscomprised areport
bytheOECD onitson-going survey work onmeasures affecting anumber ofprofessional services
including accountancy; apresentation byUNCTAD onthework done byitsexpert group on
international standards ofaccounting andreporting (ISAR) andapresentation priortotheformal meeting
byIFAConarecentinternationalsurveyonthenationalregulationsintheaccountancysector.Generally,
delegations found thattheinformation thathadbeenpresented tothemprovided auseful basistobegin
advancing thework oftheWPPS withrespect tothedevelopment oftherecommendations specified
inthemandate.
3. However, onedelegation feltthatfurther analytical work wasneeded onsub-federal measures
meaning stateorprovincial regulations imposed onaccountancy, andasked countries thathadfederal
systems toprovide more detailed information about theirstateorprovincial regulations. Another
delegation wasinterested ininformation pertaining totrade flows intheaccountancy sector bothby
thecommercial presence andthemovement ofnatural persons modes ofdelivery. Itwasalsosuggested
thatfurther information ontheroleoftheInternational Accounting Standards Committee inhelping
todevelop trade andinvestment ingoods andservices would beuseful.
4. Several delegations were oftheviewthatfurther analytical work wasneeded withregard to
theregulatory regimes ofdeveloping countries, which werenotadequately covered bytheOECD and
IFAC surveys thathadbeencarried out.Itwasagreed thatthework would taketheformofafocused
andclearly targeted questionnaire onagreed specific aspects ofdomestic regulation affecting the
accountancy sector innon-OECD countries. Thiswork would proceed inparallel withthesubstantive
work ofthegroup, namely theelaboration ofmultilateral disciplines inthemandated areas.
5. With respect tothequestion ofhowthissurvey would becarried out,thechairperson said
thattheSecretariat would beready todraftspecific questions forafocused survey regarding themeasures
andissues which wereproposed forfurther consideration intheworking party (seeparagraph 6below).
Onedelegation suggested thatdelegations submit thequestions theywanted toask.Account would
betaken ofanyrelevant work thathadbeengoing onsuchastheresearch done byUNCTAD on
qualification requirements, professional liability andethics, establishing guidelines fortherecognition
ofqualifications, andtheuseofinternational accounting standards. TheUNCTAD representative was
ready toprovide suchinformation forthepurpose oftheexercise. Where suchinformation existed
about non-OECD countries there wasnoneed, according toonedelegation, todraftquestions.S/WPPS/M/3
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6. Turning tothemainagenda item, theorganization ofandpriorities forwork, theChairperson
thanked those delegations thathadsubmitted theirviews inwriting: fivesubmissions (from Australia,
Canada, Japan, Switzerland andTurkey) werecontained inaninformal notedated 21December 1995;
other submissions from theUnited States andIndia were circulated ininformal papers dated 12and
15January 1996 respectively. Ageneral discussion followed briefpresentations ofthepapers by
eachofthecountries citedaswellasother countries thatmade oralproposals. Thediscussion resulted
inparticipants reaching agreement onalistofissues which would bethebasisforfurther consideration
andanalysis bythegroup. Thelistofissues proposed forfurther consideration were subsequently
circulated toMembers inaninformal notedated 24January 1996(acopyofwhich isattached). Where
relevant itwasfurther agreed thatregulations administered atsub-central levelweretobecovered.
7. Inthelistofeightissues, seven related tothethreeareasofthemandate contained intheDecision
onProfessional Services: fiveissues related tothedevelopment ofmultilateral disciplines ondomestic
regulations relating tomarket access (qualification requirements andprocedures, licensing requirements
and procedures, regulations governing the establishment ofacommercial presence,
nationality/citizenship/residency requirements, andprofessional liability/ethics). Theother issueareas
related totheestablishment ofguidelines fortherecognition ofqualifications andissues related tothe
useofinternational accounting standards. Onthesuggestion ofanumber ofdelegations thebroader
issue ofregulations governing theentry andtemporary stayofforeign accountants wasalsoflagged
forfurther consideration. TheChairperson noted thatthedrawing upofthelistwasanimportant,
ifonlyafirst,stepbecause itwasapreliminary attempt todefine insome detail thepolicy areas for
which theworking partywould bedrawing uprecommendations onmultilateral disciplines. Sheinvited
delegations toindicate, inwriting ifpossible, howtheythought theissues should beaddressed bythe
group including suggestions forpossible multilateral disciplines inanyoftheareas covered bythelist
ofissues; shealsoinvited delegations toprovide examples ofexisting disciplines inregional agreements.
8. Withrespect tothequestion oftiming, itwaspointed outthattheSingapore Ministerial meeting
provided auseful target forharvesting some firstresults from theworking party'sefforts inthe
accountancy sector. Anumber ofdelegations however pointed outthatthedateofthemeeting didnot
constitute alegaldeadline andshould notputundue pressure onthework ofthegroup. Anumber
ofdelegations questioned theneedfor,andthefeasibility of,theideathattheworking party could
provide aforum forcontinuing theliberalization oftrade inaccountancy services thatwasbegun in
theUruguay Round.
9. Regarding further technical work tobecarried outbytheSecretariat, theChairperson proposed
thatitwould beuseful toasktheSecretariat toprovide some basic information ontherelevance of
certain existing GATT provisions. Thefirstsuchagreement wastheAgreement onTechnical Barriers
toTrade, itspurpose being toensure thattechnical regulations andstandards, aswellascertification
procedures, donotcreate unnecessary obstacles totrade ingoods. TheAgreement alsointroduced
criteria fordetermining whether ameasure constitutes an"unnecessary obstacle". Shesaidthatabasic
description ofsuchprovisions bytheSecretariat could serve asaninformal aidtodiscussions onrelevant
technical andconceptual issues. Inthesame vein, itmight alsobeuseful tohaveabriefanalysis
ofthebasic objectives oftheAgreement onImport Licensing Procedures which required thatnational
licensing procedures were notmore burdensome thannecessary toadminister thelicensing system;
were transparent andpredictable; andprotected theinterests offoreign suppliers from unnecessary
delays andarbitrary actions. Itwasrequested thatthepapers would beprepared forthenextmeeting.
10. There wasanother suggestion bythechairperson thattheSecretariat write abackground paper
thatwould categorize themeasures interms ofGATS provisions under discussion withaview to
clarifying thenature oftherecommendations thegroup wasmandated toproduce. Forexample,
restrictions onbusiness structures andnationality orcitizenship requirements ontheonehand, andS/WPPS/M/3
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professional licensing andqualification requirements ontheotherhand, fellintotwodifferent categories.
Measures relating tobusiness structures orforms ofassociation andtonationality orcitizenship
requirements weremeasures subject toscheduling under Article XVIorXVII oftheGATS. Measures
relating toprofessional certification orlicensing ortoqualification requirements ortechnical standards
were however covered byArticle VI,thedomestic regulation provision andwere notsubject to
scheduling. There wasnoconsensus onthisproposal assome delegations wereoftheviewthatsuch
apaper might bepremature intheabsence ofdelegation inputs andmight leadtoproblems of
interpretation intrying tocategorize various measures according toGATS rules.
11. Finally, itwasagreed thatthenextmeeting oftheworking party would beheldonFriday,
15March 1996 anditwasaccepted thattheinternational organizations thatwere participating as
observers -namely theUN,UNCTAD, IMF, theWorld Bank andtheOECD -would beinvited to
thenextmeeting. Asnoitemwasraised under Other Business themeeting wasclosed.S/WPPS/M/3
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ATTACHMENT
24January 1996
TheWorking Party onProfessional Services
Issues Proposed forConsideration
Informal Note
Asagreed atthelastmeeting oftheWorking Party on16January, theSecretariat iscirculating
toMembers thefollowing provisional listofissues. Theissues werementioned orproposed incountry
submissions orstatements, andamended indiscussion, andarethebasisforfurther consideration and
analysis.Theyarenotlistedinanyparticularorderofpriority.Whererelevant,regulationsadministered
atsub-central levelaretobecovered.
TheChairperson oftheWPPS invites delegations toindicate howtheythink theissues should
beaddressed bytheWorking Party including suggestions forpossible multilateral disciplines inany
oftheareas covered bythelist.Delegations willing todosoareasked tosubmit theirsuggestions
inwriting totheSecretariat by29February 1996 inorder toallow fortimely circulation ofpapers
toMembers oftheWPPS before itsnextmeeting.
• Qualification requirements andprocedures
- Forexample requirements relating toeducation andexperience
• Licensing requirements (other thanqualification requirements) andprocedures
- Forexampleestablishmentrequirementsandmandatorymembershipoflocalprofessional
associations
• Regulations governing theestablishment ofacommercial presence
- Forexample control, ownership andinvestment restrictions, limitations onform of
legalentity, scope ofbusiness limitations, useoffirmname
• Nationality/citizenship/residency requirements
• Professional liability/ethics
- Forexample professional indemnity insurance requirements, marketing/advertising
restrictions, feesetting policies andscope ofpractice limitations
• Regulations governing entryandtemporary stayofnatural persons forthepurpose ofsupplying
accountancy services
• Establishing guidelines fortherecognition ofqualifications
• Useofinternational accounting standards
- Monitoring ofon-going work andcooperation withrelevant organizations