RESTRICTED
WORLD TRADE WT/SPEC/33
10May1996
ORGANIZATION(96-1832)
WORKING PARTY ONTHE ACCESSION OFPANAMA
TOTHE WORLD TRADE ORGANIZATION
DRAFT REPORT
1. Atitsmeeting on8October 1991, theCouncil ofRepresentatives established aWorking Party
toexamine theapplication oftheGovernment ofPanama toaccede totheGeneral Agreement pursuant
toArticle XXXIII, andtosubmit totheCouncil recommendations which might include adraftProtocol
ofAccession. On19December 1995, theGovernment ofPanama advised thatithaddecided tonegotiate
theterms ofaccession ofPanama totheAgreement Establishing theWorld Trade Organization
(hereinafter referred toasthe"WTO Agreement") under Article XIIoftheAgreement. Pursuant to
thedecision oftheGeneral Council of31January 1995, theWorking Party ontheAccession ofPanama
totheGATT 1994 continued asaWTO Accession Working Party.
2. TheWorking Party meton20April 1994, and7February 1994 under theChairmanship of
H.E. Mr.E.Tironi (Chile), on10July1995 [andon...............] under theacting Chairmanship
ofMr.A.Hussain. Theterms ofreference oftheWorking Party weresetoutindocument WT/L/37.
3. TheWorking Party hadbefore it,toserve asabasis foritsdiscussions, aMemorandum on
theForeign Trade Regime ofPanama (document L/7228, andAdd.1), andthequestions submitted
byMembers ontheForeign Trade Regime ofPanama together withthereplies ofthePanamanian
Government thereto (documents L/7426 andAdd.1-2, L/7624, WT/ACC/PAN/5) Inaddition, the
representative ofPanama made available thefollowing documents:
TheConstitution oftheRepublic ofPanama;
TheImport Tariff; atableofPanama 'stariff structure correlating theHarmonized System withthe
CCCN (Customs Cooperation Council Nomenclature); atableofthenewtariff asat31May1994;
Cabinet Decree No.20of26July1995 "Amending theImport Tariff"; Official Journal No.22706
of19January 1995 containing Cabinet Decree No.2of10January 1995 amending theimport tariff;
Cabinet Decree No.23(2October 1995) "Amending theImport Tariff"; andCabinet Decree No.
24(12October 1995) "Amending theImport Tariff andenacting other measures";
TheFiscal Code ofPanama, andasummary oftheDraft Lawamending certain articles oftheFiscal
Code andeliminating theConsular Invoice;WT/SPEC/33
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Decree No.33of3May1985containing regulations under Chapter IVofBook I,TitleIoftheFiscal
Code, onpublic tendering, competitions, price requests andcontracts withtheGovernment;
Preliminary draftlawsetting outmeasures covering theregulation ofandprocedures forimport licences,
andasummary oftheDraft LawonRegulation ofImport Licensing Procedures;
Draft Lawamending provisions oftheTaxCode relating tothedocuments thatmustaccompany goods
imported intoPanama, customs services feesandtheelimination oftheconsular invoice.;
Draft Cabinet Decree establishing thesystem ofvaluation ofgoods forcustoms purposes;
Summary oftheDraft Cabinet Decree onValuation Procedures forCustoms Purposes;
TheProject LawonValuation;
Preliminary draftlawonprotection ofanimal health; acopyofthepreliminary draftlawonplant
health; asummary oftheDraft LawonPhytosanitary Measures, acopyoftheDraft Law"Establishing
Sanitary Measures forthePurpose ofImproving theHealth Conditions ofAnimals, Humans andthe
Environment andBestowing Special Powers ontheMinistry ofAgricultural Development" asummary
oftheDraft LawonZoosanitary Measures; andaDraft Law"Enacting Phytosanitary Protection
Measures andAdopting Other Provisions";
AlistofSanitary Requirements forAgricultural Products, indocument WT/ACC/PAN/17;
Decree No.3of5April 1978creating theNational SeedCommittee, regulating production, processing
andmarketing ofseeds;
Information concerning theregime ontechnical barriers totrade (WT/SPEC/ 2);
LawNo.28of20June1995ontheUniversalization ofTaxIncentives toProduction, andasummary
ofthatlaw;
Informal communication ondomestic support andexport subsidies inconformity withtheAgreement
onAgriculture; anddetails ofthesupports andincentives available totheAgricultural Sector inPanama
indocument WT/ACC/PAN/7 Add.1, together withanAgriculture country schedule indocument
WT/SPEC/27;
Lawon"Defence ofCompetition", containing provisions governing anti-dumping, countervailing
measures andsafeguards, andabolishing pricecontrols, andasummary ofthatDraft Law. Information
onIndustrial Subsidies (document WT/ACC/PAN/7), Information onFiscal Exemptions Granted to
Industry totheWorking Party (document WT/ACC/PAN/7 Add.1);
LawNo.36of6July1995, amending andabrogating articles oftheTaxCode andadopting other
provisions;
Draft LawNo.92,abrogating thewhole ofTitleVIandTitleXXIofBook IVoftheTaxCode and
Cabinet Decrees No.35of12February 1970 andNo.22of1February 1972 andother provisions,
andestablishing theSelective Consumption TaxonAerated andAlcoholic Beverages andCigarettes;
LawNo.41of13July1995"Approving theParisConvention fortheProtection ofIndustrial Property,
of20March 1883, asrevised atBrussels on14December 1900, atWashington on2June1911, at
TheHague on6November 1925, atLondon on2June1934, atLisbon on31October 1958 andat
Stockholm on14July1967";WT/SPEC/33
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Draft Industrial Property Law; andanindex ofitsprovisions indocument WT/ACC/PAN/9;
Information ontheremedies available toenforce intellectual property rights inPanama (documents
WT/ACC/PAN/5 and8);
LawNo.15of1994 approving theLawonCopyright andNeighbouring Rights;
Cabinet Decree No.238of2Julyof1970reforming theBanking Regulations andcreating theNational
Banking Commission; and
Laws 55and56of20December 1984 regulating theconduct ofinsurance andreinsurance business.
Therepresentative ofPanama alsosubmitted thetextofthefollowing Agreements:
Agreement between Panama andtheUnited States ofAmerica;
Agreement onFreeandPreferential Trade withCosta Rica;
Agreement onFreeandPreferential Trade withGuatemala;
Agreement onFreeandPreferential Trade withElSalvador;
Agreement onFreeandPreferential Trade withNicaragua ;
Agreement onFreeandPreferential Trade withHonduras;
Agreement onFreeandPreferential Trade withtheDominican Republic Partial-Scope Agreement with
theUnited Mexican States within theFramework oftheLatin American Integration Association (LAIA);
Caribbean Basin Initiative Enterprise fortheAmericas Initiative;
Trade Agreement between theGovernment oftheRepublic ofPanama andtheGovernment oftheUnion
oftheSoviet Socialist Republics (now theCommonwealth ofIndependent States, CIS);
Trade Agreement between thePeople 'sRepublic ofBulgaria andtheRepublic ofPanama;
Trade Agreement between theRepublic ofPanama andthePeople 'sRepublic ofHungary;
Trade Agreement between theGovernment oftheRepublic ofPanama andtheGovernment ofthe
People 'sRepublic ofPoland; and
Trade Agreement between theGovernment oftheRepublic ofPanama andtheGovernment ofRomania.
4. Inhisstatements therepresentative ofPanama stated thatPanama wascommitted tobeing an
active participant andcontributor inthefamily ofnations involved ininternational trade. The
Government hadspared noeffort inpromoting thedevelopment ofthecountry through aprocess of
socio-economic transformations. These transformations required anumber ofeconomic adjustments
aimed atmaking theeconomy more openandefficient, aswellasthealleviation ofpoverty andthe
modernization ofthePanamanian State institutions. HisGovernment hadrealized thattheopeningWT/SPEC/33
Page4
upofmarkets andtheglobalization ofthePanamanian economy represented theonlyviable wayof
modernizing thecountry. Fortunately, thetransformation oftheeconomy wasbecoming aconcrete
reality. Panama hadtaken anumber ofdifficult decisions, andwasready tocarry outdifficult reforms
inspiteoftheireconomic andpolitical impact which would obviously affect theproductive branches
oftheeconomy aswellasthesocial sector. Draft lawsaimed atdeveloping afreemarket economy
infullconformity withWTO obligations hadbeenprepared inresponse totheviews expressed by
members, andhadbeensubmitted totheWorking Party. Thedrafts included legislation withrespect
totheapplicationofimportsurcharges,theeliminationofconsularinvoices,licensing,customsvaluation,
unfairinternationalcompetition,suchasanti-dumpingandcountervailingmeasures,safeguards,legislation
eliminating thesystem ofprice regulation andexport subsidies. Inaddition, draft lawsregulating
phytosanitary andzoosanitary measures andbringing theentire bodyofdomestic legislation intoline
withtheAgreement ontheApplication ofSanitary andPhytosanitary measures hadalsobeensubmitted.
HisGovernment wasready todoitsutmost toensure thesmooth andrapid accession ofPanama to
theWorld Trade Organization.
5. Intheirgeneral remarks members oftheWorking Party welcomed Panama 'sinitial application
foraccession totheGeneral Agreement, andlateronPanama 'srequest foraccession totheWTO.
Members noted thatPanama hadundertaken asubstantial process ofeconomic andtradeliberalisation
aimed atimproving thestandard ofliving ofthepopulation, increasing employment opportunities and
achieving diversification oftheproductive sectors. Although Panama hadmade significant progress
inrealizing theeconomy andtheforeign trade regime, further work wasnecessary tobring Panama 's
traderegime intoconformity withWTO obligations. Recalling thenegative costsofprotection, some
members stressed thatpursuing liberalization would beofeconomic benefit toPanama 'sfuture economic
growth anddevelopment andtothewellbeing ofitsconsumers. These members alsoexpressed support
foranearlyconclusion oftheproceedings oftheWorking Party. Some members recalled theirstrong
regional tieswithPanama andwelcomed Panama 'slonglasting andearnest decision tobefullyintegrated
intothemultilateral trading system. Recalling therecent comprehensive economic reforms introduced
byPanama, some members stressed thatthiswould facilitate theassumption ofWTO obligations.
Some members oftheWorking Party notified theintention toenter intobilateral market access
negotiations withPanama. Withreference tothepossible membership ofPanama intheWorld Trade
Organization, some members stressed theneedforcomprehensive information concerning theWTO
related issues andfortheearly commencement ofnegotiations concerning market access ongoods
including agriculture aswellasservices andTRIPS etc.Theinformation submitted byPanama in
thisrespect isdescribed hereunder inthecorresponding sections ofthisreport.WT/SPEC/33
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Foreign Trade Regime
6. TheWorking Party reviewed theforeign trade regime ofPanama saidthepossible terms of
adraftdecision andProtocol ofAccession totheWTO. Theviews expressed bythemembers ofthe
Working Party aresummarized below inparagraphs 7to108.
Price controls
7. InresponsetomembersquestionsconcerningtheGovernment'sauthoritytoimposepricecontrols
withregard tosome 361products which interaliaincluded vitamins, medicines andfoodproducts,
including poultry, apples andgrape juice, certain cereals, certain vegetable oilsetc.,therepresentative
ofPanama explained thattheprices ofasubstantial number ofproducts classified asessential had
previously beensubject togovernment control. Panama supplied alist,byHStariffline,ofallimports
currently subject toprice controls. Steps toeliminate these controls hadbeenundertaken. In1989
174products and2types ofservices hadbeensubject tocontrol, bytheendof1995 price controls
hadbeenreduced to36products and2types ofservices. Panama provided information concerning
theoperations oftheOffice ofPrice Regulation which wassubsequently replaced bytheOffice of
Consumer Protection. Theprices ofthecovered products hadbeenfixed onthebasisofanapplication
from theproducer ordistributor ofthegood orservice. Panama supplied thetextoftheLawon
Defence ofCompetition totheWorking Party.
8. Therepresentative ofPanama stated thattheLawonDefence ofCompetion enacted asLaw
29of1February 1996 provided fortheabolition ofmost oftheremaining price controls. The
representative ofPanama stated thatthelawdidnotcompletely eliminate allprice controls. During
atransitional period offiveyears, theGovernment could regulate theprices ofimported products which
weresubject toanimport tariff ofgreater than40percent,oriftheGovernment otherwise hadcause
tobelieve thatadistributor ormarketer oftheproduct wasengaging inanti-competitive behaviour
constituting athreat toconsumers andtofreetrade. Attheendofthatfiveyeartransitional period,
theprovision permitting theGovernment toimpose pricecontrols would expire. Some members noted
thattheeffect ofArticle IIIoftheGATT 1994 wastooblige WTO Members toapply price controls
strictly inconformity withnational treatment obligations andtobemindful oftheneedtotakeinto
account theinterests ofexporting Members. Therepresentative ofPanama stated thatnolegislation
inforce norplanned legislation contravened theobligations contained inArticle IIIoftheGATT 1994.WT/SPEC/33
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[9. Therepresentative ofPanama stated thattheadministration ofpricecontrols wasacomponent
ofPanama'seconomicpolicy.Exceptingthetransitionalprovisionmentionedintheprecedingparagraph,
Panama would eliminate allprice controls onimported goods andservices prior toaccession tothe
WTO, andanyfuture pricecontrols would beintroduced inamanner consistent withtherequirements
oftheWTO Agreement, inparticular Article III.9oftheGATT 1994. TheWorking Party tooknote
ofthiscommitment.]
[10. Therepresentative ofPanama confirmed thatpricecontrols onproducts andservices inPanama
have beeneliminated withtheexception ofthose listed inparagraph ....andcommits thatinthe
application ofthese controls, andanythatareintroduced inthefuture, Panama willtakeaccount of
theinterests ofexporting WTO Members asprovided forinArticle III:9oftheGATT 1994. The
Working Party tooknoteofthatcommitment.]
Tariff nomenclature
11. Members oftheWorking Party enquired whether Panama applied theHarmonised System of
import classification. Therepresentative ofPanama stated thaton15July1994theHarmonized System
hadbeen fully implemented inPanama, andprovided theWorking Party withacopy ofthenew
Harmonized Tariff.
Tariff regime
12. Some members oftheWorking Party noted thatsince 1986 inpursuance ofLaw3,Panama
hadputintoeffect atariff reduction programme which hadreduced ceiling dutyrates to60% for
industrial products and90%foragro-industrial products. Nonetheless, forsome 48tariff headings
suchaslentils, rice,pork, tomato juiceetc.import duties wereequal toorhigher than90%. These
members asked Panama toupdate theinformation onthereduction ofratesofduty. Noting thatthe
authority oftheExecutive toalterduties, customs feesandother trademeasures havebeenchallenged
inthecourts, theyrequested information onthestatus ofthischallenge. These members stressed
moreover thatthePanamanian Executive would beexpected toundertake toexercise thisauthority
inconformity withWTO conditions. Inaddition, some members noted thatsome 20%ofPanama 's
imports were exempted from duties asinputs todomestic production andenquired whether Panama
would maintain suchprogrammes ineffect afteraccession totheWTO. Inresponse, therepresentative
ofPanama saidthatattherecommendation ofaIndustrial Policy Commission, theCabinet Council
hadfurther lowered import duties toaverage levels of33%, 12%and22%intheagriculture, miningWT/SPEC/33
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andindustrial sectors respectively. Panama made itscustoms tariff, aswellasallsubsequent revisions,
available tomembers oftheWorking Party. Inresponse tostatements thatthetariff system lacked
transparency, therepresentative ofPanama responded thatthesystem wassimilar tothatapplied by
certain WTO Members, butthatPanama waswilling todiscuss anysuggestions forfuture reform of
thetariff.
13. Inreply toquestions frommembers oftheWorking Party, therepresentative ofPanama stated
thatPanama applied amixed (both specific andadvalorem) tariff system. Themixed tariffs were
composed oftwodifferent types oftariff, onespecific andoneadvalorem. Thespecific tariffincluded
anamount which represented anadditional surcharge calculated asapercentage ofthevalue ofthe
merchandise. Once theamount oftheadvalorem andthespecific tariff(including itssurcharge) were
calculated, therateapplied wasthetariffthatproduced thehigher amount oftax.Some members stated
thattheyconsidered thattheamount ofthesurcharge onthespecific rateofduty(which was2.5,3.5
or7.5percent, depending ontheproduct), washighanddidnotseem compatible withtheGATT
1994. Therepresentative ofPanama stated thattheamount ofthesurcharge formed partoftheimport
tariff. HisGovernment hadnointention ofremoving thesurcharge, which hadbeendeveloped to
fundasocial housing programme.
14. Inaccordance withusual procedures, Panama entered intobilateral market access negotiations
ongoods withinterested WTO members. Inresponse toquestions about howPanama intended to
bindmixed duties which required choosing fromtwodutycalculations andapplying whichever amount
washigher, therepresentative ofPanama initially stated thatPanama reserved theright tobind, in
themarket access schedule ongoods, anyofthetypes ofduties ineffect which hadbeennegotiated
withWTO members consistently withtheGATT 1994. Later onhesaidthatPanama would bindimport
duties atsingle advalorem rates. [TheSchedule ofmarket access concessions ongoods which reflects
theresult ofthose negotiations isreproduced inPartIoftheAnnex toPanama 'sProtocol ofAccession
totheWTO.]
Duties, taxes andcharges recorded onthecustoms declaration form
15. TherepresentativeofPanamainformedmembersoftheWorkingPartythatinadditiontocustoms
duty, several other charges wereimposed. Stamp duties andfeesrelated totheprocessing ofimport
documents consisted of(i)astamp dutyoneachpackage, twocents(0.02 cts.)perpackage; (ii)apeace
andsocial security stamp, twenty cents (0.20 cts.)oneachcustoms declaration-assessment document;
andarevenue stamp, onedollar percopyofthecustoms declaration-assessment document. Inaddition,WT/SPEC/33
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aCustoms Service Administrative Feewascharged (Law 36). That feereplaced theConsular
Administrative Costs Fee(TCAC). There wasalsoataxontheTransfer ofTangible Personal Property
("ITBM"), which wasfivepercent(5%) ofthec.i.f. value plusother taxes andstamp duties.
16. Therepresentative ofPanama noted thatinaddition tothecharges specified inthepreceding
paragraph, imports ofspirits andtobacco were subject tothefollowing taxes:
(a) Stamp dutyfortheanti-tuberculosis campaign; 0.06cts. to0.21cts.perlitre
(b) Stamps andfeesrelating totheprocessing ofimport documents:
- Peace andsocial security stamp; 0.02cts. perbottle
(c) Domestic consumption stamps: these stamp duties were levied according totheamount of
contents ofthebottle orcontainer (beer andsome wines areexempted).
- containers withacapacity ofnotmore than
100c.c.; stamp dutyof20cents (0.20 cts.)
- containers withacapacity ofmore than
100c.c.butnotmore than900c.c.; stamp dutyof2.50dollars ($2.50)
- containers withacapacity ofmore than
900c.c.butnotmore than1,800 c.c.; stamp dutyof3.50dollars ($3.50)
- containers withacapacity ofmore than
1,800 c.c.; stamp dutyof4.50dollars ($4.50)
(d) ITBM onspirits: 10percent(10%)
17. Inconnection withthestamp duty,somemembers considered thatcertain provisions concerning
itsapplication toliquors andcigarettes were discriminatory andcontrary tothenational treatment
provision oftheWTO, interaliaArticle IIIofGATT 1994. Inresponse therepresentative ofPanama
stated thattheapplication ofthestamp dutyhadbeeneliminated byLawNo.45of14November 1995.
18. Attherequest ofsome members oftheWorking Party, therepresentative ofPanama also
provided details ofthe"ITBM" tax.Thattaxapplied tothetransfer oftangible property inPanama
bysale,exchange, payment, contribution, assignment oranyother act,contract oragreement which
involved thetransferring oftitleinthegoods, regardless oftheirorigin, i.e.,italsoapplied todomestic
goods. Inthecaseofsales, thetaxwaspayable atthemoment when theseller issued theinvoice,
evenifdelivery occurred later. Hestated thatinthecaseofimports, Article 1057(v) oftheFiscal
Code provided thatthetaxable baseofthetaxwasthec.i.f. value plusallthetaxes, charges, levies,
andcustoms duties thatapply totheimported goods. Ifthec.i.f. value wasnotknown, thevalue was
determined byadding 15percenttothef.o.b. value. TheITBM taxonthetransfer ofpersonal propertyWT/SPEC/33
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wasalsocollected ondomestic products. Thetransfer ofproperty taxwasapplied toallimports when
theyentered thePanamanian customs territory. Since itwasataxonvalue added, oncetheimporter
soldtheproduct, theimporter collected 5percent(5%) oftheselling price from thepurchaser and
remitted thedifference between theprice obtained from thepurchaser andwhatwaspaidatthetime
ofimportation totheTreasury. Only inthecaseofsoftdrinks wastheITBM applied exclusively to
imports, tobalance theproduction taxcollected ondomestic softdrinks, which wasalso5percent
(5%). Incases other thanimports andleases, theITBM wasapplied when thedeedorcontract was
signed, orwhen thegoods weredelivered byanyofthemeans authorized bylaw.Hefurther informed
theWorking Party thatparagraphs 7and8ofArticle 1057(V) oftheFiscal Code ofPanama provided
forcertain exceptions fromtheITBM tax. Paragraph 7provided thatthefollowing werenotsubject
totheITBM tax:
(a) Transfers ofgoods mortis causa ,freeofcharge, orbydeedbetween living persons
already subject toinheritance andgifttax;
(b) transfers inconnection withmarriage settlements, andcontribution orseparation of
conjugal property;
(c) expropriation andsales bytheState, except those made byState industrial and
commercial companies;
(d) saleofproperty under anyordinary orspecial proceedings, including proceedings for
theseparation ofproperty;
(e) transfers ofnegotiable instruments andsecurities ingeneral.
Paragraph 8ofArticle 1057 (u)oftheFiscal Code provided thatthefollowing wereexempt
from theITBM tax:
(a) Sales ofagricultural, poultry, cattle andother similar products, intheirnatural state
orsubjected onlytoafattening, butchering orchilling process bytheproducers;
(b) salesoffishermen 'sandhunters 'products, intheirnatural stateorsubjected onlyto
achilling orfreezing process bytheproducers;
(c) exports andre-exports;
(d) transfers made toPanama Canal Commission ortotheUnited States Armed Forces;
asdefined bythePanama Canal Treaty of7September 1977anditsrelated agreements;
(e) transfers oftangible personal property inthefreezones legally authorized inthe
Republic ofPanama;WT/SPEC/33
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(f) operationsinvolvingtangiblepersonalpropertylocatedincustomsareasandwarehouses
where ownership wastransferred through theendorsement ofdocuments;
(g) transfers ofsoftdrinks already subject totheSoftDrinks Tax;
(h) imports andtransfers ofoils,lubricants andrelated products specified inthefollowing
subdivisions oftheTariff: 313-01-01, 313-01-01A, 313-01-01B, 313-01-01C,
313-01-02, 313-01-03, 313-01-04, 313-01-05, 313-02-00, 313-03-01, 313-03-02,
313-03-99, 313-04-01, 313-04-02, 313-09-00, 314-01-00, 314-02-00;
(i) imports andtransfers offoodproducts;
(j) imports andtransfers ofmedicinal andpharmaceutical products specified inGroup 541
oftheTariff; and
(k) imports andtransfers ofthefollowing products:
1. Manufactured fertilizers oftariff subdivisions: 271-01-00; 271-02-00;
271-03-00; 271-04-00; 561-01-00; 561-02-00; 561-03-00 and561-09-00.
2. Insecticides,fungicides,herbicides,disinfectantsandthelike,usedinagriculture
andanimal husbandry, ofTariff Subdivisions: 599-02-01 and599-02-02.
3. Allseeds usedinagriculture.
4. Barbed wirespecified inTariff Subdivision 699-05-01.
5. Hand toolsusedinagriculture, suchasmachetes, grubhoes, hoes, shovel-hoes,
andgoads.
Inthecaseofexemptions provided forinparagraphs (c)and(d),ataxcredit wasallowed ontheamount
oftaxcharged ondomestic purchases andimports incorporated inthecostoftheexports, re-exports
orgoods transferred toauthorized agencies oftheGovernment oftheUnited States located inthePanama
Canal Zone.
19. Therepresentative ofPanama stated thattheITBM would beretained afteraccession. Inhis
Government 'sviewtheITBM wasavalue added taxlikethose applied inmostcountries oftheworld,
andwasconsistent withWTO rules. Some members oftheWorking Party stated thattheyconsidered
thatsome oftheexemptions hadtheeffect ofapplying theITBM toimported goods andnotto
domestically produced goods, inparticular theexemption forproducers ofagricultural products in
araworslightly processed state. Therepresentative ofPanama stated thattheexemption foragricultural
products inaraworslightly processed statewasapplied tobothdomestically produced andimported
products. Inresponse toafurther question, therepresentative ofPanama provided theWorking Party
withtheHSCodes oftheagricultural products which weresubject totheITBM, aswellasalist,also
byHSCode ofthose products exempted from theITBM.WT/SPEC/33
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20. Therepresentative ofPanama stated thatfromthedateofaccession, theonlycharges applied
toimports would betheImport duty, theCustoms Service Administrative Fee,andtheTaxonthe
Transfer ofTangible Personal Property (ITBM). Anysubsequent application ofdomestic taxes or
other charges toimports would beinaccordance provisions ofWTO Agreements, inparticular Articles
II,III,VI,andVIIIfotheGATT 1994. Inaddition, Panama would bindthecharges listed initsGoods
Schedule annexed toitsProtocol ofAccession under Article II:1(b) oftheGATT 1994 atzero. The
Working Party tooknoteofthose commitments.
Consular duties, feesandsurcharges
21. InresponsetoquestionsfromsomemembersoftheWorkingParty,therepresentativeofPanama
stated thatallimporters ofgoods toPanama wererequired tosubmit a"consular invoice" when clearing
thegoods. Theconsular invoice wasadocument prepared bythePanamanian Consulate inthecountry
ofexport. Thepurpose oftherequirement foraconsular invoice wastocertify theveracity ofthe
commercial invoices andthedescription ofthegoods tobeimported. Inaddition, theconsular officials
converted thevalue ofthegoods inthecurrency ofexport intoPanamanian currency. Iftheconsular
officers determined thatthevalue recorded ontheinvoice wasnotconsistent withthecurrently prevailing
price forthegoods intheexporting country, thecurrently prevailing price inthecountry ofexport
would besubstituted.
22. Therepresentative ofPanama stated thata"consular administrative fee"wasalsopayable,
which varied depending onthef.o.b. value ofthegoods. Heprovided theWorking Party withdetails
oftheamount ofthatfee. Inresponse toquestions concerning thecompatibility oftheconsular
administrative feewiththerequirements ofArticle VIII, therepresentative ofPanama stated thatit
considered thatthefeerepresented thecostoftheservice provided bytheGovernment ofPanama.
Following further questions andcomments from members oftheWorking Party, therepresentative
ofPanama stated thattherequirement ofconsular approval intheexporting country offorms and
documentation required forimportation ofgoods andthecorresponding feehadbeeneliminated by
LawNo.36of6July1995.
23. Therepresentative ofPanama confirmed thatPanama hadabolished consular feesandinvoices
andcertification requirements, asprovided forinLawno.36of6July1995, andwould notreintroduce
them. TheWorking Party tooknoteofthatcommitment.WT/SPEC/33
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24. Therepresentative ofPanama alsostated thatpriortoaccession thecustoms service feeof$70
fortransactions over$2000 would replace othercustoms feesandcharges andwould betheonlycustoms
charge other thanthecustoms dutyapplied toimports andwould notbeincluded inthebasefor
calculation ofthecustoms duty. TheWorking Party tooknoteofthiscommitment.
Procedure forimportation forconsumption
25. Inresponse toquestions from members oftheWorking Party, Panama explained thatithad
taken steps tosimplify some ofitsprocedures forthegranting ofpermission toimport goods for
consumption. Imports could onlybereleased toimporters possessing acommercial, industrial or
provisional business licence, except inthecaseofimports ofagricultural orfarmgoods, andimports
destined foruseineconomic activities.
26. Therepresentative ofPanama stated that,onaverage, customs formalities tookthreebusiness
days. Import formalities could becommenced prior totheactual arrival ofthegoods, provided that
theoriginal shipping documents wereavailable. Iftheoriginal documents could notbeproduced, the
importer could clearthegoods following lodgement ofadeclaration withadeposit ofabond inthe
amount ofthetaxpayable, plusasurcharge of5percentofthec.i.f. value ofthemerchandise.
Agreement ontheImplementation ofArticle VIIoftheGATT 1994
27. Some members oftheWorking Party noted thatthecaseofsome products, e.g.rice,maize,
sorghum, poultry meatandsteel, Panama applied fixed levels ofvaluation forimports. Inaddition,
Panama hadcreated adatabaseofreference prices forcustoms valuation appraisal ofimports, ifthe
import value declared bytheimporter wasoverthemargins established inthedatabase, theimporter
wasforced tosupport thisprice ortopaythedutyovertheadjusted value calculated according tothe
database. Intheirview, thispractice operated defactoifnotdejureasaminimum valuation scheme.
Inaccordance withtheWTO Agreement onCustoms Valuation, theuseofalistofaverage import
prices asasurrogate valuation method wasnotpermissable. Panama wasinvited tosubmit forreview
bytheWorking Party adraftresponse tothequestionnaire oncustoms valuation.
28. Therepresentative ofPanama explained thatthetaxable basis ofimported merchandise was
costs paidorpayable prior toentry intothefirstPanamanian portofcall. Following arrival atthat
firstPanamanian port, allexpenses forservices performed within thenational territory ofPanama,
suchasinsurance, wereexcluded fromthebasevalue inorder toavoid double taxation ofthegoods.WT/SPEC/33
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29. Inresponse toquestions from some members oftheWorking Party, therepresentative of
Panama saidthatPanama hadprepared adraftlawonCustoms Valuation which wasinconformity
withtheAgreement onCustoms Valuation. Thedraftofthatlawwassupplied toWTO members in
documentWT/ACC/PAN/6.InresponsetoconcernsraisedbysomeWorkingPartymembersinrelation
toPanama 'ssystem ofreference prices, therepresentative ofPanama explained thatalthough Panama
hadpreviously usedasystem ofreference prices, theDraft LawonCustoms Valuation would eliminate
thatsystem ofvaluation.
30. Concerning theimportation ofmotor vehicles, therepresentative ofPanama noted thatatthe
timeofentry, thedeclared priceforthemotor vehicle waschecked against thefactory pricelistcovering
theprecise specification ofmotor vehicle imported. Thatprice listwassupplied toCustoms bythe
vehicle importer. Intheevent thatthedeclared price wassignificantly different from thedeclared
value, thevalue appearing onthefactory price listwasused. Imports ofusedmotor vehicles were
valued andtaxed asiftheywerenew,although vehicles more thanthreeyears oldcould bedepreciated
specified amounts. Thebaseprice usedasthebasis forthevaluation oftheusedmotor vehicle was
derived from industry publications.
[31. With reference tocustoms practices andprocedures, therepresentative ofPanama saidthat
hisGovernment would apply customs practices andprocedures inaccordance withtheprovisions of
Articles VII,VIIIandXoftheGATT 1994fromthedateofitsaccession. Bythatdate,Panama would
amend anyprovision oflaworadministrative regulation thatprovided forpractices inconsistent with
theabove mentioned provisions. TheWorking Party tooknoteofthose commitments.]
[32. Therepresentative ofPanama stated thatby1July1996, hisgovernment would enact adecree
lawoncustoms valuation thatwould beinfullconformity with theWTO Agreement onthe
Implementation ofArticle VIIoftheGATT 1994, andthatthatlawwould come intoeffect prior to
1January 1997. Panama would notrequire recourse toanyadditional transitional period for
implementation oftheAgreement. Should theservices ofapreshipment inspection firmbeusedto
assist Panama intheimplementation ofitscustoms procedures, theGovernment ofPanama would ensure
thattheoperations ofsuchfirms were consistent withtherelevant WTO Agreements, inparticular,
onPreshipmentInspectionandCustomsValuation.TheWorkingPartytooknoteofthesecommitments.]
[33. Therepresentative ofPanama noted, however, thatduetodifficulties incompleting thetraining
ofCustoms personnel, Panama would needathree yeartransitional period inwhich tofullycomply
withtherequirements oftheCustoms Valuation Agreement.]WT/SPEC/33
Page14
[34. Therepresentative ofPanama stated that,within three years ofitsaccession totheWTO,
Panama would fullycomply withtheprovisions oftheAgreement onCustoms Valuation. [Hefurther
stated thatfromthedateofaccession theuseofminimum import prices would beeliminated and,that
inaccordance withtheWTO Agreements onAgriculture andtheImplementation ofArticle VIIofthe
GATT 1994, suchmeasures would notbereintroduced.] TheWorking Party tooknoteofthese
commitments.]
Non-tariff measures
35. Some members oftheWorking Party welcomed theprocess ofremoving products fromthe
listofthose subject toquantitative protection which Panama hadinitiated unilaterally andrequested
Panama tosubmit achart describing theuniverse ofremaining quotas, import licensing orpermit
requirements andauthorizations applied toimports withtheirspecific justification interms ofWTO,
indicating alsoifpermits weregranted onanautomatic ordiscretionary basis. These members noted
thatquotalevelswerenotgenerallyannouncedandthatforsomeproductstheamountoflocalproduction
thatanimporter hadpurchased conferred eligibility onarequest foraquota. Intheirview, these
practices appeared tobeinconsistent withArticles III,XandXIofGATT 1994. Ingeneral, theWTO
favoured theapplication ofprice based measures instead ofquantitative restrictions forprotection.
Anyremaining restrictions, orthoseapplied byPanama during ascheduled period ofelimination, should
bepublished atacentral point established forinformation asprovided intheAgreement onImport
Licensing Procedures.
36. Inresponse toquestions frommembers oftheWorking Party, therepresentative ofPanama
stated thatPanama hadpreviously applied import quotas toimports of,interalia,potatoes, onions,
beans (Vigna), kidney beans, lentils, vetches, peas, dwarf beans, maize, sorghum, porkandpoultry
meat. Those import quotas hadbeenabolished through thefollowing decrees: Decree No.51of22
September 1993(amended byDecree No.61of27October 1993); Decree No.55of13October 1993;
andDecree No.56of13October 1993 (amended byDecree No.61of27October 1993, inturn
amended byDecree No.69of24December 1993). TheRepresentative ofPanama stated thatthe
remaining import quotas onagricultural products were currently administered bytheMinistry of
Agricultural Development (sanitary permits), theMinistry ofHealth (sanitary register), theMinistry
ofCommerce andIndustry, (exemptions) andtheMinistry ofFinance andtheTreasury. The
representative ofPanama supplied theWorking Party withInformation onImport Licensing Procedures,WT/SPEC/33
Page15
including alistofitems bytariff linethatwere subject tonon-tariff measures indocument
WT/ACC/PAN/6.
37. Inresponse tofurther questions, therepresentative ofPanama provided more detailed
information onthesystem ofimport quotas andbans. Indocument WT/ACC/PAN/8, therepresentative
ofPanama supplied theWorking Party withalistcurrent uptoFebruary 1995, bycurrent andHS
classification, ofallimports nolonger subject toQuotas andPrior Licensing. Therepresentative of
Panama reported thatimport quotas andbans, prior authorizations orpermits andother quantitative
restrictions wereabolished for,interalia,kidney beans, maize, sorghum, andporkandpoultry meat
byaseries ofdecrees inlate1993. Therepresentative ofPanama alsostated thattheremaining products
under quantitative restriction were: quotas ondairy products, fatsandoils,sugar, yeast, fishmeal,
andsalt;licensing restrictions onanimal fats,certain vegetables, andpreparations forfoodprocessing;
andreference prices onpoultry, maize, rice,sorghum, cornmeal, andsteelreinforcing bars. Headded
thathisGovernment didnot,ingeneral, publish thequota levels forimports restricted bysuchmeasures.
Heacknowledged thatthiswasnotconsistent withArticles X.1andXI.2oftheWTO Agreement on
Import Licensing Procedures, which requires thatquotas bepublished indicating thetotalquantity and
value permitted forimportation during aspecified period. Import authorizations were granted ona
discretionary basis onlyifthere arenodomestic substitutes available. Therepresentative ofPanama
alsostated thattariff ratequotas would beadministered onacase-by-case basis, giving preference to
apublic bidding process when possible. Therepresentative ofPanama noted thathisGovernment had
supplied comprehensive information totheWorking Party concerning itsimport licensing regime in
document WT/ACC/PAN/6.
38. Inlightofmembers 'questions andcomments therepresentative ofPanama made available
tomembers oftheWorking Party adraftlawrevising theimport licensing regime inPanama. Following
members further comments onthatdraftlaw,therepresentative ofPanama informed members ofthe
Working Party thatthedraftlawhadbeenrevised totakeaccount ofmembers comments, andthe
requirements oftheAgreement onImport Licensing. Thedraftlawwould simplify theprocedure for
obtaining licences andwould eliminate anydiscrimination arising from theirapplication.
[39. Therepresentative ofPanama stated thatfrom thedateofaccession totheWTO, trade in
agricultural products would beadministered inaccordance withWTO obligations, including the
Agreement onImport Licensing Procedures. Asofitsdateofaccession totheWTO, Panama would
eliminateallquotas,restrictiveimportpermitrequirements,bansandreferenceprices,exceptasexpressly
permitted under theWTO Agreement. Allunnecessary permit requirements would beeliminated.WT/SPEC/33
Page16
Panama would notseekadelay intheapplication ofArticle 2oftheAgreement onImport Licensing.
TheWorking Party tooknoteofthese commitments.]
[40. Therepresentative ofPanama confirmed that,from thedateofaccession, theauthority of
hisgovernment tosuspend imports andexports ortoapply licensing requirements thatcould beused
tosuspend, ban,orotherwise restrict thequantity oftrade would beapplied inconformity withthe
requirements oftheWTO, inparticular Articles VI,XI,XVIII, XIX, XX,andXXIoftheGATT 1994,
andtheMultilateral Trade Agreements onAgriculture, Sanitary andPhytosanitary Measures, Import
Licensing Procedures andTechnical Barriers toTrade, andthathisgovernment would eliminate from
thedateofitsaccession, non-tariff import measures, including bans, quotas, permits, priorauthorization
requirements andlicenses thatcould notbejustified specifically under WTO provisions. Inparticular,
Panama would apply thesame controls, criteria andrules regarding technical regulations, standards
certification andlabelling requirements toimported anddomestic goods, andwould notusesuch
regulation torestrict imports. Panama would ensure thatitstechnical regulations, standards,certification
andlabellingrequirementswerenotappliedtoimportsinanarbitrarymanner,inawaythatdiscriminated
between supplier countries where thesameconditions apply orasadisguised restriction oninternational
trade, inaccordance withWTO provisions. Panama would alsoensure thatfromthedateofitsaccession
itscriteria forgranting [licenses forproducts thatrequire] priorauthorization orforsecuring required
certification or"sanitary registration" forimported products willbemade available totraders, and
thatitssanitary andother certification requirements would beadministered inatransparent, expeditious
andnondiscriminatory manner. Panama would bewilling toconsult withWTO Members concerning
theeffect ofthese requirements onWTO Members trade withaviewtoresolving specific problems.
TheWorking Party tooknoteofthose commitments.]
Agreement onTechnical Barriers toTrade
41. InresponsetorequestsforinformationfrommembersoftheWorkingPartyconcerningtechnical
barriers totradeinPanama, therepresentative ofPanama stated thatthefollowing legislation regulated
technical andindustrial standards: Decree 282of13August 1970; Law2ofthe11February 1982,
"Creating andassigning functions totheDirección General deNormas yTecnología Industrial" (the
Directorate-General forIndustrial Standards andTechnology); andDecree 63of4May1971, "To
approve theregulations implementing Cabinet Decree 283of13August 1970, which established the
Comisión Panameña deNormas Industriales yTécnicas (COPANIT) (Panamanian Commission for
Industrial andTechnical Standards)". Decree 63determined thepowers andfunctions ofthePanamanianWT/SPEC/33
Page17
Commission forIndustrial andTechnical Standards (COPANIT) which wasresponsible forstudying
andrecommending technical standards andestablishing thegeneral system fortechnical standardization
practices.
42. Heexplained thattheprocedure foramending existing regulations consisted ofthree phases:
thePreparation ofthedraft; study ofthedraft; andthepublic discussion ofthedraft. Once thedraft
hadbeenapproved itwentthrough apreliminary project stage which consisted ofthepublication of
anannouncement inalocalnewspaper, setting atime-limit of60daysforcomments onthedocument
(Article 6ofExecutive Decree No.63of4May1971). Ifasaresult ofcomments itproved necessary
todraftasecond proposal, thatmustbepublished forpublic inspection foraperiod of30days. Once
comments were received thepreliminary draft wassubmitted totheplenary ofthePanamanian
Commission forIndustrial andTechnical Standards (COPANIT) forapproval andratification bythe
Ministry ofTrade andIndustry. Thereafter thedocument waspublished intheBoletín delaPropiedad
Industrial (Industrial Property Bulletin) oftheMinistry ofTrade andIndustry. Once thestandard had
beenapproved andpublished intheIndustrial Property Bulletin, theDirectorate-General forIndustrial
Standards andTechnology sentacopytoallnational entities andinternational standardization bodies
(Article 7ofExecutive Decree No.63of4May1971). Panama supplied detailed information
concerning itsregime onTechnical Barriers toTrade indocument WT/SPEC/2.
43. SpecificfunctionsundertheAgreementonTechnicalBarrierstoTradewerecarriedoutthrough
theDirectorate-General forIndustrial andTechnical Standards (COPANIT). COPANIT wasamember
ofthePan-American Standards Commission, aninternational standardization andcertification body
andamember oftheInternational Organization forStandardization (ISO). Thesystem wasthereby
harmonized withinternational systems. COPANIT worked inclosecommunication withtheMinistry
ofTrade andIndustry, aninstitution ofthecentral government. TheCommission hadtheauthority
toundertake itsactivities, including inspections ofinstitutions, atnational andlocallevels.
44. Inresponse tocomments frommembers oftheWorking Party, therepresentative ofPanama
stated thathisGovernment hadjoined theInternational Organization forStandardization (ISO). He
added thathisGovernment wasdrafting newprovisions inorder toadapt therelevant legislation and
make itconsistent withtherequirements oftheAgreement onTechnical Barriers toTrade, when Panama
becomes aMember oftheWTO.WT/SPEC/33
Page18
[45. Therepresentative ofPanama stated thatuponaccession totheWTO, Panama would comply
withalltheprovisions oftheAgreement onTechnical Barriers toTrade. TheWorking Party took
noteofthiscommitment.]
Agreement onSanitary andPhytosanitary Measures
46. Amember oftheWorking Party noted thatSection IofDecree No.57(2/7/56) established
thebasis ofPanama 'sprotection intheareaofsanitary andphytosanitary measures. LawNo.7of
30March 1993 hadexpanded theGovernment 'sprotective authority. Theinformation available to
thismember demonstrated thatthesanitary regulations established inLawNo.7applied onlytopoultry
partsandnottootherpoultry products andthattheserequirements appeared tobeapplicable exclusively
onimports andnotoncompeting domestic poultry production. Moreover, thesanitary requirements
withregardtopoultryappearedtoexceedtherequirementsoftheInternationalOrganisationofEpizootics
(OIE) and,insome cases, imposed standards impossible tomeet. Asevery agricultural product which
entered Panama wassubject toeither asanitary orphytosanitary certificate, theadditional precautions
seemed redundant. Intheviewofthismember, these requirements wereinconsistent withArticles XI
andXXoftheGATT 1994andtheprovisions oftheAgreement onSPS. Panama should repeal these
provisions andestablish WTO consistent sanitary requirements forpoultry products. Some members
oftheWorking Party alsonoted thatPanama should provide assurances thatcurrent protective practices
would bereformed tocomply withWTO norms. Inparticular, these members noted thatsome of
thedraftlawsprovided totheWorking Party didnotappear toreflect therequirements oftheAgreement
onSanitary andPhytosanitary Measures andtheprinciple ofequivalency. Under theSPSAgreement,
animporting country isobliged toaccept theSPSmeasures ofanother country asequivalent ifthe
exporting country objectively demonstrates thatitsmeasures achieve theimporting country 'slevelof
protection. Thedraftlawsalsoincluded public health issues intheareaofadditives, maximum residue
levels, etc.which were notplant and/or animal health issues.
47. Therepresentative ofPanama replied thatthePanama wasfreeofdisease inthepoultry sector.
Inorder tomaintain high health standards, theMinistries ofAgricultural Development andHealth
hadqualified veterinary doctors carry outregular fieldinspections andinspections ofprocessing plants.
Thesanitary regulations ineffect withregard toimports were aimed atpreventing theintroduction
intoPanama ofexotic diseases orpests harmful tohuman oranimal health andhadnoprotectionist
aimordesign. Notallimports ofagricultural products weresubject tophytosanitary certificates. The
representative ofPanama provided theWorking Party withalistofthesanitary requirement forimports
ofagricultural products indocument WT/ACC/PAN/17. Imports ofagricultural products inanaturalWT/SPEC/33
Page19
staterequired thiscertificate but,except inafewcases, processed agricultural products didnotrequire
such acertificate. With regard tothesanitary certificate, hesaidthatallproducts forhuman
consumption, bothdomestically produced andimported, musthaveasanitary register issued bythe
Ministry ofHealth. Thiswasnothing more thanacustoms health control measure andthecertificate
could beobtained rapidly. Recently prepared draft lawshadinter aliareflected theprinciple of
equivalency inArticle 19oftheDraft LawonAnimal Health, TitleII,General Provisions; andArticle
11oftheDraft LawonPlantHealth, TitleII,Chapter II,Principles andDefinitions. Therepresentative
ofPanama explained thatthoselawssetthecriteria forandempowered theMinistries toissueregulations
onsanitary andphytosanitary matters. Following preparation ofthedraft regulations, aNational
Consultative Regulatory Committee would examine thedraftregulations, theregulations would be
published intheOfficial Gazette, andtheregulations would become lawthereafter. Some members
stated thattheWTO Agreement onSanitary andPhytosanitary Measures required thatatleastsixty
dayspriortoanymodification ofsuchalaw,anotification beprovided totheWTO. Therepresentative
ofPanama stated thatPanama wasaware oftherequirement tonotify anysuchlegislative change at
leastsixtydaysprior toitsentry intoforce. Thelawswould apply toallimports following Panama 's
entry intotheWTO.
48. Inreply tofurther questions, therepresentative ofPanama stated thatinthecaseofadecision
thataproduct wasnotacceptable, allnatural orlegalpersons could lodge anadministrative appeal
tothedecision maker andfollowing thattotheMinister forAgricultural Development. Concerning
diseases subject tocompulsory notification, Article 4oftheLawonAnimal Health provided thatall
OIEClasses AandBdiseases wererequired tobenotified. Inaddition, theMinistry ofAgricultural
Development retained thepower torequire other diseases tobenotified. Inresponse tofurther
questions andcomments frommembers oftheWorking Party indicating thattheyconsidered certain
aspects ofPanama 'sregime onSanitary andPhytosanitary Measures tobecontrary toprovisions of
theAgreement onSanitary andPhytosanitary Measures, therepresentative ofPanama made available
tomembers oftheWorking Party twodraft laws modifying Panama 'sregime onSanitary and
Phytosanitary Measures. Following further comments from members oftheWorking Party the
representative ofPanama indicated thatthedraftlawshadbeenmodified totakeaccount ofmembers '
concerns. Hefurther indicated thatthose draftlawswerebefore theNational Assembly forapproval.
[49. Therepresentative ofPanama stated thatfrom thedateofaccession totheWTO, Panama
would apply allitssanitary requirements consistently withtherequirements oftheWTO Agreements
onSanitary andPhytosanitary Measures andImport Licensing Procedures. Inparticular, hestated
thatifadecision wastaken torequire notification ofdiseases other thanthose listed inOIEClassesWT/SPEC/33
Page20
AandB,anysuchdecision would betaken inconformity withtherequirements oftheAgreement
onSanitary andPhytosanitary Measures. TheWorking Party tooknoteofthese commitments.]
Agreement onSubsidies andCountervailing Measures
Incentives forIndustry
50. Therepresentative ofPanama stated thathisGovernment hadgranted specific privileges by
means ofspecial contracts tocertain investors whose activities required theuseoflarge areas ofland.
Those areas oflandhadordinarily beengranted under aconcession system. Existing arrangements
included themineral resources exploration andexploitation contracts regulated byDecree LawNo.
23of22August 1963, theContract between theState andtheRefinery ofPanama under LawNo.
31of31December 1992concerning theregulation oftherefining ofcrude petroleum andtheContract
between theState andVidrios Panameños S.A. under LawNo.43of17November 1977 forthe
manufacture ofglass containers.
51. Those contracts granted exemptions fromdirect andindirect taxes andsetouttherights and
duties oftheenterprises inconnection withtheiractivities. Thecontracts fortheexploitation ofmineral
resources werevalid forvarying periods, depending onthesizeoftheproject. Bywayofexample
therepresentative ofPanama indicated thatthecontract fortheproduction ofglass containers would
expire in1998, whereas therefinery contract wasoperative for20years asfrom30September 1992.
52. Following further questions frommembers oftheWorking Party, therepresentative ofPanama
stated thatinresponse tothequestions raised thelawsonindustrial incentives hadbeensubstantially
reformed. LawNo.3ofMarch 1986(dealing withincentives forsmall andmedium-sized enterprises)
hadbeensuperseded byLawNo.28of20June1995, copies ofwhich weremade available tomembers
oftheWorking Party. LawNo.28of20June1995provided thatthebenefits accruing toenterprises
registered under theearlier lawwould expire 15years afterregistration. LawNo.28of20June1995
alsoprovided thatnofurther registrations forparticipation inthescheme would beaccepted.
53. Therepresentative ofPanama alsoexplained thatLawNo.3of1986 hadprovided thatall
manufacturers registered intheOfficial Industry Registry could takeadvantage ofatariff reduction
forimports usedinmanufacturing. Ifthesametypeofgoods werenotmanufactured inPanama, eligible
manufacturers could, upon request, import those goods atthetariff rateof3percentoftheirc.i.f.
value. Thelawalsoestablished income taxandlandtaxexemptions forthose manufacturers thatWT/SPEC/33
Page21
dedicated theirproduction toexports. Inaddition, exporters ofnon-traditional products wereeligible
toreceive discounts onpurchases ofelectricity andaTaxCredit Certificate. Inresponse toquestions
frommembers oftheWorking Party, therepresentative ofPanama stated thatPanama considered that
these incentives were compatible with theGATT 1994, andtheAgreement onSubsidies and
Countervailing Measures, since those incentives were granted inorder toimprove Panama 's
competitiveness, growth andeconomic development. Inaddition, those measures didnotcause serious
prejudice tothetrade orproduction ofanyWTO Member. Hefurther noted thatArticle XVIofthe
GATT 1994provided thatmembers should avoid theuseofsubsidies onexported products onlywhen
thepayment ofthose subsidies would result inthatmember acquiring more thananequitable share
ofworld trade intheproduct. InPanama 'scase, aminimal number ofexports benefitted from the
incentives andthemeasures hadnoimpact onworld trade, andthusArticle XVIwasnotviolated.
TherepresentativeofPanamaprovidedtheWorkingPartywithanInformalCommunicationonIndustrial
Subsidies including anotification ofFiscal Exemptions Granted toIndustry totheWorking Party in
document WT/ACC/PAN/7 Add.1.
54. Therepresentative ofPanama stated thathisGovernment would progressively eliminate all
measures which meet thedefinition ofaprohibited subsidy, within themeaning ofArticle 3ofthe
Agreement onSubsidies andCountervailing Measures, including those prohibited subsidies covered
byLaw3of1986, including allregistrations granted toenterprises prior toenactment ofthelaw
"Adopting general production taxincentives andestablishing other provisions", (Law No.28of20
June1995) and"Incentives forexport promotion" under Law108of30December 1974(asamended
byLawNo.28of20June1995). Consistent withthisobjective, Panama would provide explanatory
information initsannual notification ofsubsidies under Article 25oftheAgreement onSubsidies and
Countervailing Measures andArticle XVI:1 oftheGATT 1994 toenable other Members toconfirm
thatsuchprograms arebeing progressively eliminated. Thelisted subsidy measures would benotified
asprovided forintheWTO Agreement onSubsidies andCountervailing Measures upon accession.
Itwasalsotheintention oftheGovernment ofPanama toeliminate allsubsidies inconsistent with
theprovisions ofArticle 3oftheAgreement onSubsidies andCountervailing Measures bynolater
than31December 2002. However, theGovernment ofPanama reserved theright torequest the
Committee onSubsidies andCountervailing Measures foranextension, ifnecessary, ofthephase-out
period, consistent withtheprovisions ofparagraph 4ofArticle 27oftheAgreement onSubsidies and
Countervailing Measures. TheWorking Party tooknoteofthese commitments.WT/SPEC/33
Page22
Incentives fortheagricultural sector
55. Therepresentative ofPanama stated thattotaldomestic supports totheagriculture sector were
verylowinabsolute terms -lessthan$9million perannum. Theaidprovided consisted ofthefollowing
elements: (i)preferential tariffs forinstallation andconsumption ofelectricity usedinfarming activities
(areduction of30percentonthemarket rate); (ii)anincome taxdeduction of30percenton
investments inlivestock, fisheries andagro-industrial activities, withamaximum deduction of40per
centoftaxable income inthetaxperiod prior totheinvestment; (iii)exemption from taxonprofits
derived fromtimber plantations planted within thelastseven years; (iv)exemption fromtaxonincome
oflessthan$100,000 perannum derived from agricultural orlivestock production; (v)adeduction
ofapercentage ofthecapital invested infarming activity when farmincomes exceed $100,000 per
annum (thededuction being limited totheaverage rateofinterest forfixed termdeposits plusthree
percentofthataverage); and(vi)anexemption from payment ofproperty taxonfarming estates
withalandregistry value oflessthan$100,000. Therepresentative ofPanama alsoindicated that
agricultural producers hadaccess tocredit atpreferential interest rates. Therepresentative ofPanama
supplied theWorking Party withaninformal communication ondomestic support andexport subsidies
based onthemodel ofjustification oftheAgreement onAgriculture including details ofthesupports
andincentives available totheagricultural sector inPanama indocument WT/ACC/PAN/7 Add.1.
Theagricultural country schedule ofPanama wascirculated tomembers oftheWorking Party in
document WT/SPEC/27, andisreproduced inPartIoftheAnnex totheProtocol ofAccession of
Panama.
Export Incentives
56. Inresponse toquestions frommembers oftheWorking Party, therepresentative ofPanama
stated thatagricultural exports wereexempted fromincome taxonincome derived fromtheexported
goods, andinthecaseofanon-traditional agricultural product, aTaxCredit Certificate wasgranted.
Healsoprovided copies ofthelawsthatprovided export incentives. Some members oftheWorking
Party expressed concern thattherebate ofdirect taxation wasinconsistent withArticle XVIoftheGATT
1994 andtheAgreement onSubsidies andCountervailing Measures. Therepresentative ofPanama
repliedthattheincentivelawswerenotinconsistentwiththeGATT1994northeAgreementonSubsidies
andCountervailing Measures because ofPanama 'sstatus asadeveloping country. Therepresentative
ofPanama provided further information inrelation toPanama 'spolicy ofincentives inrelation to
agricultural andindustrial products indocument WT/ACC/PAN/7/Add.1, inorder tofacilitate theWT/SPEC/33
Page23
consideration oftherequirements provided forintheWTO Agreement onSubsidies andCountervailing
Measures.
57. TherepresentativeofPanamafurtherstatedthatPanama'sindustrialpolicyencouragedindustrial
development bygranting taxexemptions which were generally applicable. Direct assistance inthe
formofpayments toproducers, financial assistance tospecific sectors andother similar measures were
notapplied. Hesaidthatincentives forsmall andmedium-sized enterprises wereprovided bymeans
ofLawNo.3of1986. Thatlawwasdesigned toencourage small andmedium-sized enterprises in
theirindustrial andassembly activities. Aregime oftaxexemptions existed forenterprises producing
goods forthedomestic market orforexport. Enterprises wishing totakeadvantage oftheexemption
were required tobeentered intheOfficial Industry Register oftheMinistry ofTrade andIndustry
before theycould utilise theexemptions. Enterprises thatgeared industrial production tothedomestic
market received:
- preferential treatment inthepayment ofimport duties onrawmaterials, semi-finished
orintermediate products, partsformachines andequipment, containers, packing and
other imported inputs. They wererequired topayonly3percentofthec.i.f. value
oftheimported inputs, inaddition totheTaxontheTransfer ofTangible Personal
Property (ITBM);
- anexemption fromincome taxonnetprofits reinvested toexpand production capacity
ortoproduce newarticles. Those enterprises alsocame under aspecial regime
permitting thecarry overoflosses forincome taxpurposes, andaspecial depreciation
calculation;
- anexemption from property taxfor10years onland, structures andinstallations
intended formanufacturing, fullexemption frompayment ofincome onprofits from
salesonthedomestic market fortheenterprise 'sfirstfiveyears ofproduction, and
a50percentexemption forthesubsequent threeyears. Those exemptions wereapplied
toenterprises intheregions specified inthelaw.
58. Therepresentative ofPanama alsostated thatenterprises wholly engaged intheproduction
ofexports received:WT/SPEC/33
Page24
- fullexemption fromtaxesonintroduction, contributions, andcustoms duties, feesand
charges, along withtheITBM onimports ofmachinery, equipment andpartsforuse
intheproduction process;
- credit forduties orcharges usedinproducing aproduct;
- fullexemption from income taxonprofits, withtheexception ofmining industries
orthose using thecountry 'snatural resources;
- fullexemption from export taxes;
- fullexemption from salestax;
- fullexemption from production taxes; and
- fullexemption from taxes ontheenterprises 'capital orshares, except licence and
immovable property taxes.
Inaddition, enterprises thatproduced partially forexport received taxexemptions inproportion to
theamount intended forexport. Thisregime would haveatotallifeof10-15 years. Itwasestimated
thatapproximately 75percentofenterprises 'registrations would expire intheyear2002. Allother
registrations would expire in2010.
59. Inrelation tosmall andmicro-enterprises, therepresentative ofPanama saidthatincentives
wereprovided pursuant toLawNo.9of19January 1989. Thatlawprovided fortaxincentives for
micro-enterprises andsmall enterprises within theterritory oftheRepublic thatwere engaged in
manufacturing activities using mechanized equipment, cottage industry methods oracombination of
thetwo. Thetaxexemptions available tosuchbusinesses were asfollows:
- fullexemption fromincome taxforthefirstfiveyears, 75percentforthefollowing
fiveyears and25percentduring theremaining lifeofthecompany;
- fullexemption from stamp duty;
- fullexemption fromimport taxonproduction andmaintenance equipment, partsand
rawmaterials;
- exemption from immovable property taxforthefirst10years; and
- exemption from taxoncapitalized dividends.
Anenterprise could loseitseligibility totheexemptions inthefollowing circumstances (i)iffollowing
aninitial period offiveyears, theenterprises assets andcapital increased bytwenty-five percentor
more, or,(ii)iftheyhadincreased thevalue ofannual salesofonehundred thousand dollars ($100,000)WT/SPEC/33
Page25
forthreeconsecutive years or(iii)ifforfivealternating years, theannual salesincreased bymore than
twenty percent(20%) Theregime would operate foratotalperiod of15years.
60. InresponsetoquestionsandcommentsfrommembersoftheWorkingParty,indicatingconcerns
inrelation tothecompatibility ofthevarious export incentive schemes withtheprovisions oftheGATT
1994andtheAgreement onSubsidies andCountervailing Measures, therepresentative ofPanama stated
that,inhisGovernment 'sview, theCAT scheme wascompatible withArticle XVIoftheGATT 1994
andwiththeAgreement onSubsidies andCountervailing Measures astheyapplied todeveloping
countries. Therepresentative ofPanama alsoprovided details ofPanama 'sexport promotion scheme.
Thelegislative basis forthescheme wasLawNo.108of30December 1974. Thatlawestablished
anexport incentive mechanism fornon-traditional goods wholly orpartly produced orprocessed in
Panama, bygranting acertificate which could beusedasacredit towards direct taxes payable tothe
State. TheTaxAllowance Certificate (CAT) could beusedtopaytaxes uptoanamount equivalent
to20percentofthenational value added oftheexported goods. Such certificates weretransferable
byendorsement, wereexempt fromanykindoftaxanddidnotbearinterest. Headded thatfollowing
theguidelines setoutintheAgreement onSubsidies andCountervailing Measures, Panama haddecided
toeliminate these taxbenefits progressively. LawNo.28of20June1995 "Adopting measures for
general production taxincentives andestablishing other provisions", provided thatupto31December
2000, thevalue oftheCAT was20percentofthenational value added. From 2001 toDecember
2002, CATs would fallto15percentofthenational added value. Theincentive wasscheduled to
beeliminated by2003. Enterprises inreceipt ofother taxexemptions could notusetheCAT scheme.
Agreements onAnti-Dumping andSubsidies andCountervailing Measures
61. Following theexamination ofPanama 'sregime inrelation toanti-dumping andcountervailing
duties, some members stated thattheyconsidered thatnotalltherequirements oftheAgreements on
Anti-Dumping andSubsidies andCountervailing Measures appeared tobereflected inPanama 's
legislation. Members expressed particular concerns inrelation totheprovisions containing thedefinition
ofspecificity andnon-actionable subsidies, aswellasinrespect oftheprovisions governing the
assessment ofthelevelofdomestic support forapetition, retroactive dutyprice undertakings, public
notifications ofnegative decisions, andtheelements required tobecontained inapetition. The
representative ofPanama stated thatPanama hadaltered itsdraftlawstotakeaccount ofMembers
concerns. Inreplytoquestions concerning thedraftlawsdefinition ofmaterial injury, therepresentative
ofPanama replied thatinhisGovernment 'sview, thedefinition provided wascompatible withArticles
3oftheAnti-Dumping Agreement andArticle 15oftheSubsidies andCountervailing MeasuresWT/SPEC/33
Page26
Agreement. Some members oftheWorking Party alsoconsidered thatcertain other provisions ofthe
draftlaw,suchasthedefinitionsofasubsidy,andtheprovisionsdealingwithanti-circumventionrequired
improvement. Therepresentative ofPanama requested further clarification ofthosemembers concerns.
Following further discussions, therepresentative ofPanama informed theWorking Party thatthedraft
lawhadbeenaltered totakeaccount ofmembers 'concerns andthattherevised draftlawwasbefore
theNational Assembly forapproval.
62. Therepresentative ofPanama stated thattheGovernment ofPanama would notify itsindustrial
incentive schemes pursuant totheAgreement onSubsidies andCountervailing Measures. Headded
thatPanama would expect toinvoke theprovisions ofArticle 27,paragraph 3,oftheAgreement on
Subsidies andCountervailing Measures concerning theelimination ofprohibited subsidies within a
period of....... years from thedateofPanama 'saccession totheWTO. TheWorking Party took
noteofthese commitments.
Government Procurement
63. Inresponse toquestions frommembers oftheWorking Party, therepresentative ofPanama
provided details oftheCentral Government procurement system. Article 29oftheFiscal Code required
thatforallStatepurchases thatexceeded onehundred andfiftythousand balboas (B150,000), public
tenders mustbecalled for.Invitations totender wererequired tobepublicly announced intheOfficial
Gazette andnational newspapers atleast15calendar daysinadvance. Theannouncement wasrequired
toindicate thedateofthemeeting forinterested bidders. Thatmeeting wasforthepurpose ofanswering
anyinquiries inrelation tothetender specifications andotherdocuments. TheMinistry orcorresponding
public entity wasresponsible forformulation ofthespecifications, inwhich theconditions ofthecontract
andbaseprice forthebidwould beclearly indicated. Thespecifications would indicate: thedate
timeandplace ofbidding, andthebaseprice; theobligation onthebidders tolodge atemporary bond
toparticipate inthebidding, andafinalbond tobelodged bythecontractor towhom thecontract
isawarded; theobligations required tobeassumed andtherights acquired bythecontractor; the
obligations assumed andtherights acquired bytheState; thefines thatcould beimposed onthe
contractor, andtheliabilities incurred byfailure toperform; andtheobligation topresent abidder 's
certificate. TheFiscal Code required thatthetender specifications, aswellasdocuments, blueprints,
objects orsamples relating tothesubject-matter ofthecontract, bedisplayed attheoffice where the
bidding wastotakeplace, sothattheycould beexamined bytheinterested parties.WT/SPEC/33
Page27
64. Therepresentative ofPanama explained thatprospective bidders mustsubmit thefollowing
documents insupport ofthetender: aBidder 'sCertificate forPublic Bidsissued bytheTreasury,
aswellasdocuments proving thatthetenderer wasnotadelinquent debtor vis-à-vis theState, that
thetenderer hadnotcheated thepublic treasury, thatthetenderer hadacommercial orindustrial licence
toengage intheactivity, thatthetenderer wasregistered withtheTechnical Board ofEngineering
andArchitecture, ifthetenderer wished toparticipate incontracts forpublic works orinothers for
which thisrequirement must befulfilled, andanyother document required bylaw. Tenders were
submitted toadesignated official. Following theopening ofthetenders, acertificate attesting tothe
validity ofthebidisissued. Certified tenders werecirculated tothedifferent Stateagencies. Based
upon theproposals received thepresiding official willprovisionally award thecontract tothebidder
whohasoffered themostadvantageous proposal among those received. Because theprovisional award
didnotconstitute adefinitive orfirmadministrative act,noappeal could bemade against it.Once
thepublic bidding procedure hadbeenconcluded, bidding filescontaining alltheproposals received
presented were assembled. Thetemporary bonds were alsofiledunless theunsuccessful bidders
requested theirreturn, ontheunderstanding thatbysodoing theywaived anyrights topresent aclaim
ontheawarding ofthecontract. Allinterested parties hadrightofaccess tothefile,aswellasthe
righttoobtain copies ofallthedocuments therein. Onthedayafterthepublic bidding, thefilewent
totheProposal Evaluation Committee forconsideration. TheCommittee concluded examination of
allbidswithin thenexteightcalendar days. Within eightdaysfollowing theexpiration ofthetime-limit
interested parties could present submissions forinclusion inthefile.Theopinion oftheEvaluation
Committee wasnotbinding onthedeciding authority provided thatthelatterwould showthattheopinion
wasnotinthebestinterests oftheState. Thecontract wasawarded onthebasis oftheeconomic
advantages oftheproposals andthetechnical economic, administrative, andfinancial capacity ofthe
bidders, andthebidconsidered tobeofthehighest quality atthelowest price. Dissatisfied parties
could usegovernment channels toappeal tothebody thatawarded thecontract, without prejudicing
anyaction forannulment before theThird Chamber oftheSupreme Court ofJustice. Oncethedefinitive
award ismade, thecorresponding Minister required thesuccessful bidder tolodge thefinalbondwithin
three days. Ifthesuccessful bidder didnotpostthefinalbond ordoesnotpaythebidprice incash
within thecorresponding term, thetemporary bond wasforfeit totheNational Treasury.
65. Inresponse toinquiries whether Panama would consider accession totheAgreement on
GovernmentProcurement,therepresentativeofPanamastatedthatPanamawasconsideringthepossibility
ofaccedingtotheWTOGovernmentProcurementAgreementandwasstudyingthepossibleimplications
ofsuchadecision, interms ofbothlegislative reform andrestrictions ondevelopment policies.WT/SPEC/33
Page28
[66. Therepresentative ofPanama confirmed thathisGovernment wascurrently anobserver in
theCommittee fortheAgreement onGovernment Procurement, andwillapply formembership inthe
Agreement bySeptember 301996. Hefurther confirmed thatPanama would initiate negotiations for
membership intheAgreement bytabling anentity offer by31December 1996 [within sixmonths
thereafter] andwillcomplete negotiations formembership intheAgreement by31December 1997.
TheWorking Party tooknoteofthatcommitment.]
Export duties
67. Inresponse toquestions frommembers oftheWorking Party, therepresentative ofPanama
stated thatexport duties werecharged oncertain products inorder togenerate revenue totheTreasury.
Export quotas forcertain exports oftextile products were maintained totheUnited States pursuant
totheMultifibre Agreement. Certain other products weresubject toexport quotas during periods of
short supply.
68. Therepresentative ofPanama stated thatfollowing accession totheWTO, hisGovernment
would onlyapply export controls inconformity withArticle XIparagraph 2(a)oftheGATT 1994.
TheWorking Party tooknoteofthiscommitment.
Freezones
69. Therepresentative ofPanama alsoprovided details ofPanama 'sexport promotion zones.
ThepurposeofthoseschemeswastopromoteinvestmentandPanama'sscientific,technological,cultural,
educational, economic andsocial development. Hestated thatthelegislative basis fortheschemes
wasLawNo.25of30November 1992. Thatlawestablished aregime forthecreation andoperation
ofexportprocessingzones.ExportProcessingZonesweretax-freezones.Boththeenterprisesoperating
within those zones andtheactivities undertaken therein were100percentfreeofdirect andindirect
taxes. Boththecapital invested within theprocessing zones andthecapital oftheenterprises operating
inthezones werefreeofdirect orindirect national taxes, including patent orlicence taxes. Earnings
intheformofdividends andinterest creating shares, bonds andother securities issued bytheenterprises
andplaced ontheinternational market were alsofreeofnational direct orindirect taxes andduties.
There wasnotimelimitforexpiry ofthescheme. Therepresentative ofPanama stated thattheexport
Promotion FreeZones didnotdiffer fromtheExport Processing Zones: thefreezones wereclassified
intwocategories: commercial freezones, which included theColon FreeZone, andindustrial free
zones, which included theexport processing zones andpetroleum freezones.WT/SPEC/33
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Colón FreeZone
70. Therepresentative ofPanama saidthatmostimportant ofthefreezones wastheColón Free
Zone. Imports fromtheColón FreeZone represented Panama 'ssecond largest import market. Exports
totheColón FreeZone werenotsosignificant. Panama 'sImports andExports toandfromtheColón
FreeZone amounted tothefollowing in1995.
(Millions ofdollars)
Detail Years Jan.toApril
1993 1994 1995
(a) Fiscal Territory
Imports 2,187.4 2,404.1 732.2
Exports 507.6 532.5 184.9
(b) Colon FreeZone
Imports 4,492.8 5,009.9 1,651.6
Exports 5,115.2 5,721.0 1,825.4
(c) Panama withColon FreeZone
Imports from C.FreeZone 241.9 370.1 n.a.
Exports toC.FreeZone 5.8 6.9 n.a.
n.a. Notavailable.
71. TheColon FreeZone wascreated byDecree No.18of17June1948. Itcomprised several
adjoining zones close totheCristobal Port. Theoperations carried outintheColon FreeZone were
theimport andre-export ofmerchandise andtheconsolidation ofconsignments. TheZonewasmanaged
andadministered byaBoard ofDirectors chaired bytheMinister ofTrade andIndustry, anExecutive
Committee oftheBoard ofDirectors andamanager.
72. Allnatural orlegal persons could operate intheCFZ provided theyhadobtained an
authorization toengage inbusiness from theAdministration oftheCFZ. Nocommercial licence or
minimum capital investment wasrequired. Allactivities carried outintheZone were exempt fromWT/SPEC/33
Page30
alltaxes asstipulated inthelawsofPanama, excepting income tax.Goods imported intotheZone
werenotsubject toPanamanian import duties. Imports fromtheColón FreeZone wereliable topay
alltariffs andduties payable under Panamanian legislation. Anytypeofgood fromanycountry may
beimported intoandre-exported from theZone, withtheexception ofprohibited imports suchas
explosive orinflammable substances, weapons andnarcotics. There werenoquantitative restrictions
onimports totheZone. There werenotaxes, duties orrestrictions onforeign investment inthezone.
73. Allgoods andother commercial articles oreffects imported intotheZone which hadbeen
manufactured, altered, assembled, packed orprocessed there, could beexported without payment of
import duties andtaxesto:official departments oftheUnited States located intheCanal area,intended
foruseorconsumption bypersons entitled toduty-free purchases under inter-governmental agreements;
toships transitting thePanama Canal destined forforeign ports andsailing between anyauthorized
portintheRepublic andforeign ports; andforexport outside theterritory ofPanama. The
representative ofPanama stated thathisGovernment didnotconsider thattheincentives provided to
theFreeZones were based onexport activity, dejureordefacto,asestablished inArticle 3ofthe
Subsidies Agreement.
74. Therepresentative ofPanama stated thattheColon FreeZone andExport Processing Zones
aresovereign Panamanian Territory. Assuch, theyarefully subject tothecoverage ofPanama 's
commitments initsProtocol ofAccession totheWTO Agreement. Inthisregard Panama would ensure
enforcement ofitsWTO obligations inthose zones, including those commitments derived from the
Agreement onTrade Related Aspects ofIntellectual Property Rights. Inaddition, when goods produced
orimported intothezones under thespecial taxandtariff regime existing inthese areas enter into
therestofPanama, normal customs formalities, tariffs andtaxes willbeapplied. TheWorking Party
tooknoteofthose commitments.
75. Therepresentative ofPanama alsostated thatPanama would observe theprovisions ofthe
WTO including Article XXIV oftheGATT 1994, paragraph 3oftheEnabling Clause, andArticle
VoftheGATS initstradeagreements, andwould ensure thattheprovisions oftheseWTO Agreements
concerning preferential trading systems, freetrade areas, andcustoms unions ofwhich Panama isa
member aremetfromthedateofitsaccession. TheWorking Party tooknoteofthose commitments.WT/SPEC/33
Page31
State trading
76. Therepresentative ofPanama stated thatintheviewofhisgovernment, only Corporación
Azucarera LaVictoria (CALV) (Sugar Company ofLaVictoria), Instituto deSeguro Agropecuario
(ISA) (Agricultural Insurance Company), Instituto Nacional deTelecomunicaciones (INTEL) (National
Telecommunications Institute), Instituto deRecursos Hidráulicos yElectrificación (IRHE) (Water
Resources andHydro Electricity Company), Instituto deAcueductos yAlcantarillados Nacionales
(IDAAN) (National Sewers andCanals Company), Dirección Metropolitana deAseo (Metropolitan
Roads Authority) were engaged instatetrading pursuant toArticle XVII oftheGATT 1994. With
theexception ofthose firms specifically granted atrading monopoly bytheGovernment, those firms
were alsosubject totheanti-monopoly provisions oftheLawonDefence ofCompetition. The
representative ofPanama confirmed thathisGovernment would apply itslawsandregulations governing
thetrading activities ofthese enterprises inconformity withtherelevant provisions oftheWTO
Agreement, inparticular Article XVII oftheGATT 1994andArticle VIIIoftheGATS. Healsosaid
thatPanama would abide bytheprovisions fornotification, non-discrimination, andtheapplication
ofcommercial considerations fortrade transactions, andthatitwould submit itsnotification under
Article XVII atthetimeofitsaccession. TheWorking Party tooknoteofthose commitments.
77. Some members oftheWorking Party noted thattheAgriculture andMarketing Institute (AMI)
hadnotbeenlisted byPanama asaStatetrading enterprise eventhough atvarious points inPanama 's
documentation, theAMIhadbeendescribed asaStatepurchaser ofagricultural products andinvolved
inthedistribution ofimport authorization afterensuring thattherewerenodomestic substitutes. These
members asked Panama toclarify theroleoftheAMI.
78. Inresponse tofurther questions fromWorking Party members, therepresentative ofPanama
explained thattheAgricultural Marketing Institute (AMI) hadbeen established byLaw70of15
December 1975, to:regulate supplies ofagricultural products intheinternal market ofbothnational
andimported agricultural products; topromote theimprovement ofmarketing systems foragricultural
output;andtoimplementthemarketingpoliciesformulatedbytheMinistryofAgriculturalDevelopment.
TheAMIhadalsobeenresponsible foradministering import permits forsome agricultural products.
In1990 anoverhaul ofAMIhadbeencommenced, resulting initceasing tobuyandsellagricultural
products andconcentrating instead onthepromotion oftheprovision ofservices totheagricultural
community. Since 1990, AMIhadnotbought, sold,imported orexported anyagricultural products.
Ithadalsoprivatized orclosed theinfrastructure owned bytheorganization, including theNationalWT/SPEC/33
Page32
Slaughterhouse. Since 1994 AMI hadoperated solely asafacilitating enterprise foragricultural
producers, byproviding information onexport markets, training activities andotherspecialized support
services.
79. Therepresentative ofPanama reaffirmed thatwhen Panama acceded totheWTO, trade in
agricultural products would beadministered inconformity withtherelevant provisions oftheWTO
Agreements. Noagricultural products would bemarketed byState enterprises. TheWorking Party
tooknoteofthese commitments.
80. Inresponse toquestions concerning theprivatization process inPanama, therepresentative
ofPanama stated thatprogress hadbeenmade intheprivatization ofthefollowing enterprises:
Empresa Estatal deCemento Bayano: Privatized
Ferrocarril dePanamá: Preliminary studies forprivatization were being made.
Corporación deDesarrollo Integral de
Bayano:
ATLAPA:Realproperty wasbeing sold.
Theprecise means forprivatization modality hadyet
tobedetermined.
Corporación Azucarera LaVictoria: Astudy wasbeing conducted bytheMinistry of
Economics todetermine themost appropriate method
ofprivatization.
Generación deEnergía Eléctrica: Law9ofFebruary 1995 hadgranted authority tothe
Institute ofElectrical Resources togiveprivate
concessions forthegeneration ofelectricity.
Corredor Norte: Anadministrative concession hadbeengranted toa
private foreign enterprise.
Drinking Water Services: Themethod ofprivatization would bedetermined
shortly.
Cellular Channel: Thelawtoprivatize Band AofCellular Telephony
wasbeing revised toproceed withthepublic bidding.WT/SPEC/33
Page33
General Agreement onTrade inServices
81. Inresponse toinquiries concerning Panama 'sservices sector, therepresentative ofPanama
supplied aMemorandum ontheServices Regime indocument WT/ACC/PAN/4. Therepresentative
ofPanama stated thatthelargest services sectors weretourism, theColon FreeZone, thePanama Canal
andtheTransisthmian OilPipeline. Services suchasbanking, airtransport, insurance andretail sales
totourists represent more than25percentoftheGDP. TheServices Balance hadaveraged US$1,000
million overthelastthreeyears. Norestrictions onremittance ofcapital norforeign exchange controls
were inplace. TheConstitution andthecommon lawregime provided thatinvestment lawapplied
equally tonational andforeign investors. Panama 'sschedule ofspecific commitments onservices was
reproduced inWT/SPEC/1. Theviews expressed bytherepresentative ofPanama concerning various
service sectors aresummarized hereunder.
82. With reference tothebanking sector, therepresentative ofPanama saidthatwithin Panama
therewere108banks inoperation, ofwhich 84wereforeign banks. Banking wasregulated byCabinet
Decree No.238of1970, asamended byLawNo.93ofNovember 1974, copies ofwhich wereprovided
tomembers oftheWorking Party. Those lawsestablished theNational Banking Commission. Every
bankthatcomplied withtheconditions setdown bytheBanking Commission wasfreetoobtain alicence
tooperate inPanama. There werethree (3)classes ofbanking licence: (i)aGeneral Licence, which
permitted theholder ofthelicence tooffer awiderange ofbanking services, bothwithin oroutside
Panama. Holders ofsuchalicence wererequired tohaveaminimum ofUS$1,000,000 paid-in capital.
Holders ofGeneral Licences wererequired topayanannual taxofUS$25,000; (ii)anInternational
Licence which permitted theholder toconduct foreign transactions fromPanama. Theholder ofsuch
alicence wasrequired tohaveUS$500,000 inNational Bonds, freeofencumbrances. Holders ofan
InternationalLicencewererequiredtopayanannualtaxofUS$15,000and(iii)aRepresentationLicence
which permitted aforeign banktoestablish localrepresentative offices.
83. Concerning insurance, therepresentative ofPanama saidthatanyinsurance orreinsurance
company could operate inPanama under thesameconditions asnational companies. Thelawregulating
theprovision ofinsurance wasLaw55of1984. Allinsurance companies were required tohavea
minimum paid-in capital, tomaintain aguarantee deposit, andtobeauthorized andoperate under
supervision oftheInsurance Commissioner oftheMinistry ofCommerce andIndustry. Law56of
1985regulatedreinsurance.Reinsurancecompanieswererequiredtohaveaminimumpaid-inorassigned
capital, ineachcase, ofnotlessthanB250,000. Licences wereissued bytheNational Reinsurance
Commission.TheInsuranceCommissionersupervisedtheactivitiesofreinsurancecompanies.InsuranceWT/SPEC/33
Page34
brokers were regulated byLawDecree 17of22August 1957. Thatlawprovided thatinorder to
obtain alicence asaninsurance broker, applicants mustberesident Panamanian citizens, oraforeigner
withatleastfive(5)years ofresidence intheRepublic. Inorder toobtain alicence legal persons
were required to(a)present aCertificate ofthePublic Registry, verifying itsregistration inthe
Mercantile Section oftheRegistry, andthename oftheagent ofthecorporation; (b)provide aCopy
oftheArticles ofIncorporation, including thename oftheDirectors, domicile andauthorized capital;
(c)provide adocument certifying thattheagent ofthecorporation isalicensed insurance broker, who
hasbeenpractising habitually andpermanently forthelasttwoyears; (d)maintain therequired deposit;
(e)holdacertificate from theshareholders ofthecorporation, signed bytheSecretary orTreasurer.
Theshareholders must belicensed insurance brokers.
84. Therepresentative ofPanama saidthatfinancial enterprises were regulated byLaw20of
November1986,andwerenaturalorlegalpersons,otherthanbanks,insurancecompanies,cooperatives,
mutual companies andsavings andloans associations, engaged inmaking loans forpersonal orfamily
purposes. Legal ornatural persons musthaveaminimum paid-in capital ofB150,000. Interest allowed
wasfixed byResolution ofMinistry ofCommerce andIndustries between 1.5percentand2.0per
centpermonth depending onfluctuations inLondon Interbank Offering Rate. Financial enterprises
were required topayanannual taxequal to2.5percentoftheirpaidincapital asof31December
ofeachyear, withamaximum taxofB12,500.
85. Concerningsecurities,therepresentativeofPanamasaidthattheNationalSecuritiesCommission
(NSC) wascreated byCabinet Decree No.247of16July1970TheNSCregulated thepublic offering
ofsecurities andmutual funds, andtheactivities ofbrokers, dealers andexchanges. Twotypes of
securities were required tobefiled: Initial Public Offerings which were required tobefiledwith
theNational Securities Commission andthePanama Stock Exchange; andsecurities issued onaforeign
market seeking listing onthePanama Stock Exchange.
86. Inrelationtotourismservices,therepresentativeofPanamastatedthattherewerenorestrictions
forforeign investment inhotels inPanama. Activities oftravel agencies wereconsidered retail trade
andaccordingly suchservices could onlybeprovided byPanamanians.
87. Inrelation toconstruction, therepresentative ofPanama saidthatconstruction activities could
beundertaken byforeign persons provided thatthose persons hadalicensed professional (engineer
orarchitect) incharge oftheworks.WT/SPEC/33
Page35
88. Inrelation tomaritime transport, therepresentative ofPanama stated thatin1993, the
Panamanian Merchant Marine hadatotalfleetof12,500 vessels, equivalent to77.1million ofGross
Registered Tons, thattransported freight amounting to157,980,301 longtons. Around 12,000 vessels
navigated thePanama canalannually. Panama had16ports, some ofthemoperating under concessions
given toprivate enterprises (Almirante, Puerto Armuelles). Commercial portswere: Balboa, Cristobal,
Coco SoloandLasMinas Bay. Thetwomostimportant ports wereCristobal andBalboa: in1991,
Cristobal moved atotalfreight of398,331 metric tonnes andBalboa, 945,103 metric tonnes (more
than75percentofthese, were containers freight). Inrelation tolandtransport, therepresentative
ofPanama stated thatanyforeign person could participate inlandfreight transportation. Land
transportation ofpassengers could onlybeprovided byPanamanian nationals.
89. Inrelation toairtransport, therepresentative ofPanama stated thattherewerenorestrictions
fortheestablishment ofenterprises engaged inmaintenance orrepair ofaircraft, andthatseveral foreign
airtransport companies were engaged intheprovision ofservices inPanama.
90. Therepresentative ofPanama stated thattheNational Political Constitution provided thatonly
Panamanians could engage inretailtrade. Retail tradewasdefined asselling toconsumers, representing
oracting asagent formanufacturing ortrading companies oranyother activity defined asretail trade.
Ingeneral, theprovision ofservices, wasconsidered wholesale trade.
91. Inrelation toprofessional services, therepresentative ofPanama explained thatinsome cases
professional services could onlybeprovided byPanamanian providers, orforeigners meeting residency
requirements. Theprovision oflegalservices wereregulated byLaw9of18April 1984. TheSupreme
Court ofJustice could onlygrant licences topractise theprofession ofattorney toPanamanian nationals
withaprofessional qualification inlaw,issued bytheUniversity ofPanama orUniversidad Santa Maria
LaAntigua, oranyother recognised university
92. Inrelation toaccountancy services, therepresentative ofPanama saidthattheTechnical Board
ofAccountants could grant special permits topractice toforeign accountants onlyiftheapplicant was
acitizen ofacountry thataccords thesamerights toPanamanians, oriftheindividuals wasaninternal
auditor inaresident foreign companies orinstitutions orinternational bodies thatrequired theapplicant
toexecute functions related totheirorganization. Inaddition, aspecial permit topractice could be
granted when there were nonational professionals available, oriftheapplicant wasmarried toa
Panamanian citizen, orhadresided inPanama formore thantenyears. Only natural persons withWT/SPEC/33
Page36
aCertified Public Accountant 'sLicence werepermitted toestablish corporations toprovide services
totheprofession, andthelegalperson thusconstituted must satisfy certain additional conditions.
93. Therepresentative ofPanama stated thatengineers orarchitects wererequired toholdalicence.
Qualified Panamanian citizens andqualified foreign citizens ofgoodcharacter married toaPanamanian
orwithPanamanian children andentitled topermanent residence inPanama were eligible toobtain
alicence. Inaddition citizens ofcountries which permitted Panamanians toexercise suchprofessions
were entitled toobtain alicence. Such foreign professionals could onlybeemployed ifthere were
noPanamanian professionals available toprovide those services. Iftheforeigner wasemployed for
more than12months, theemploying entity wasrequired toemploy aPanamanian professional tobe
trained inorder totaketheplace oftheforeigner when thecontract isover. Permits toemploy foreign
experts forlessthan12months were notrenewable.
94. ThescheduleofPanama'sconcessionsandcommitmentsonserviceswascirculatedindocument
WT/SPEC/24 andisreproduced inPartIIoftheAnnex totheProtocol ofAccession ofPanama.
Agreement onTrade Related Aspects ofIntellectual Property Rights
95. When reviewing Panama 'slegislation onintellectual andindustry property, some members
noted thatthislegislation wasdispersed inseveral legalinstruments. Thissituation wascontrary to
international standards concerning transparency andpublication oflegal texts. They invited the
representative ofPanama toclarify anumber ofquestions relevant totheconsistency ofPanama 's
legislation withtheTRIPS Agreement. Therepresentative ofPanama saidthatthelegislation hadbeen
updated, harmonized andadapted tointernational provisions inorder tosimplify procedures andgive
inventors, owners oftrade marks andauthors security. Headded thatPanama hadalonghistory of
legislative protection ofintellectual property rights, dating from1916. Therepresentative ofPanama
provided members oftheWorking Party withacomprehensive description ofintellectual property laws,
including theagencies responsible forimplementation andafulllistofallrelevant treaties towhich
itwasasignatory indocument WT/CCC/PAN/5. Therepresentative ofPanama stated thatthelaw
ofCopyright wascreated through Law1of16August 1916 theAdministrative Code oftheRepublic
ofPanama wasapproved, inwhich Book V,TitleIV,the"Literary andArtistic Property" wasregulated
(Articles 1889-1966). Thiswasthefirstcopyright lawoftheRepublic. Law15of8August of1994
wasthenewCopyright Law. Law15included specific regulation ofaudiovisual work, computer
programmes,architecturalwork,pressarticles,moralrights,patrimonialrights,severalkindofcontracts,
mandatory licensing, regulation ofrelated rights, etc.Therepresentative ofPanama stated thatintheWT/SPEC/33
Page37
recentlyenactedlegislationontheprotectionofindustrialproperty,Panamahadcomprehensivelyadapted
itsdomestic legislation totheAgreement onTRIPS. Theviews expressed bytherepresentative of
Panama concerning various intellectual property rights aresummarized hereunder.
96. TherepresentativeofPanamastatedthatindustrialpropertywasregulatedbytheAdministrative
Code andExecutive Decree No.1of3March of1939. (Articles 2005-2035), Executive Decree 1of
3Marchof1939andtheGeneralInter-AmericanConventiononTrademarksandCommercialProtection.
HisGovernment hadrecognized theobsolescence ofthatlegislation, andaproject oflawhasbeen
approved bytheCabinet andhadbeensubmitted toLegislative Assembly forapproval. Acopyof
thatdraftlawwasmade available tomembers oftheWorking Party. Headded thatbyLawNo.41
of13July1995, Panama hadacceded totheParisConvention fortheProtection ofIndustrial Property
Law.
97. Concerning trademarks andtrade names, therepresentative ofPanama stated thattheycould
beregistered regardless ofwhether theowners werePanamanian nationals orforeigners. Registration
wasvalid fortenyears butcould berenewed intenyearintervals indefinitely. Applications for
registration could befiledbytheowner oranattorney. Allrequired documents wererequired tobe
inSpanish ortranslated byapublic translator. Goods orservices pertaining todifferent classes could
notbeincluded insameapplication. Separate applications foreachseparate classofmark wererequired.
Marks covering services areregistered asservice marks. Inthecaseofinfringement administrative,
civilandpenal remedies applied. There wereprocedures fortheannulment ofregistered marks and
concession procedures. Registration requests were published fortheinformation ofthirdparties.
98. With reference topatents therepresentative ofPanama saidthatpatents were granted to
inventors, whether nationals orforeigners, byletters ofpatent (patente deinvención) issued pursuant
totheAdministrative Code, Articles 1987-2004. They werevalidforatermof20years. Inthecase
ofregistration ofanexisting foreign patent, noPanamanian patent could begranted foratermexceeding
15years, andinnoevent could thetermofregistration extend beyond theduration oftheoriginal
patent. Extension orrenewal could onlybegranted when theoriginal patent wasnotforafullterm,
andprovided itwasconsidered tobejustified. Applications forregistration could befiledbytheowner
oranattorney. Allrequired documents were required tobeinSpanish ortranslated byapublic
translator. Inthecaseofinfringement thecriminal sanctions were applicable pursuant tothePenal
Code.WT/SPEC/33
Page38
99. Inresponse toquestions andcomments fromsome members oftheWorking Party indicating
whattheyconsidered tobeinadequacies inPanama 'sintellectual property regime, therepresentative
ofPanama stated thatanewdraftlawmaking Panama 'sintellectual property regime fully consistent
withtheAgreement onTrade Related Aspects ofIntellectual Property Rights wasready tobepresented
totheNational Assembly foritsapproval. Itwasacomprehensive coderegulating patents, utility
models, trademarks, industrial designs, registration andcancellation procedures, notifications, and
allocating administrative resources tocarry those provisions intoeffect. Thelawhadbeendrafted
withthehelpofinternational specialists including staffoftheWorld Intellectual Property Organization.
100. Following examination ofthetextofthedraftlaw,some members asked thatalterations be
made toremedy certain deficiencies inthefields ofcopyright; inparticular, rental rights, andprotection
forelectronic databases, patents; integrated circuits; trademarks; trade secrets andenforcement of
intellectual property lawsintheColón FreeZone. Members alsorequested clarification oftheremedies
available under thenewlawinthecaseofinfringement. Therepresentative ofPanama replied that
changes hadbeenmade tothedraftlawtotakeaccount oftheconcerns ofmembers. Heprovided
adetailed summary ofthenewdraft law, including anindex ofitsprovisions indocument
WT/ACC/PAN/9.Healsoprovideddetailedinformationontheremediesavailabletoenforceintellectual
property rights inPanama, indocuments WT/ACC/PAN/5 and8.
101. Inrelation toenforcement ofcopyrights, therepresentative ofPanama stated thatsummary
civilactions based onTitleXII,Chapter IofLaw15would beavailable totheowners ofcopyrights.
Provisional measures wereavailable following aCourt order tosuspend theillegal activity could be
obtained without prejudice toanyrights tocompensation formaterial damage. Therightholder could
alsorequest aninterlocutory order ofseizure oftheincome derived fromtheillegal activity; seizure
ofthegoods illegally produced andtheequipment usedtoproduce them; andanorder compelling
thedefendant tosuspend theinfringing activity. Administrative procedures andremedies werethe
province oftheDirectorate General ofCopyright, andwere available fornon-criminal violations of
Law15.InsuchacasetheDirectorate General ofCopyright would suspend anyfurther dissemination
orreproduction oftheinfringing works. Criminal sanctions were established byLaw15of1994
(Title XII,Chapter II,Infringement andSanctions). Imprisonment could range from30daysto4years.
Additional pecuniary sanctions could beawarded bytheCourt.
102. Inrelation toenforcement ofindustrial property rights, therepresentative ofPanama stated
thatcivilandadministrative remedies similar tothose described above inrelation tocopyrights were
available. Administrative remedies wereobtained fromtheGeneral Directorate forIndustrial Property.WT/SPEC/33
Page39
Following anadministrative order, registered marks could beexpunged. Criminal remedies similar
tothose described above inrelation tocopyright were alsoavailable.
103. FollowingtheexaminationoftheinformationdescribedaboveconcerningPanama'sintellectual
property regime, some members stated thatPanama should implement theAgreement onTrade Related
Aspects ofIntellectual Property Rights asofitsaccession totheWTO.
104. Therepresentative ofPanama stated thatPanama would fullyapply theprovisions ofthe
Agreement onTrade Related Aspects ofIntellectual Property Rights bythedateofitsaccession to
theWTO. TheWorking Party tooknoteofthatcommitment.
Agreement onTrade Related Investment Measures
105. Inresponse toquestions raised bymembers oftheWorking Party, therepresentative ofPanama
saidthatPanama didnotintend tonotify anytrade related investment measures forelimination under
theterms oftheAgreement onTrade Related Investment Measures.
Notifications
106. Therepresentative ofPanama saidthatupon entry intoforce oftheProtocol ofAccession,
Panama would submit notifications oflegislation pursuant totheimplementation ofthefollowing
provisions ofMultilateral Trade Agreements forwhich thedatespecified inthose provisions isearlier
thanthedateofentry intoforce oftheProtocol ofAccession, andanyother notifications (other than
notifications required tobemade onanadhocbasis) required forthefollowing Agreements: Agreement
onSanitary andPhytosanitary Measures; Agreement onImport Licensing Procedures; Agreement
onTechnical Barriers toTrade; andtheUnderstanding ontheInterpretation ofArticle XVII ofthe
GATT 1994. Thenotifications fortheAgreement onImplementation ofArticle VIIoftheGATT 1994
would besubmitted by1January 1997. Anyregulations subsequently enacted byPanama which gave
effect tothelawsenacted toimplement theabove mentioned Agreements would alsoconform tothe
requirements ofthoseAgreements. Draft notifications fortheAgreements onAgriculture andSubsidies
andCountervailing Measures hadbeenexamined bytheWorking Party andthose notifications would
besubmitted totheWTO Secretariat atthetimeofPanama 'saccession. TheWorking Party tooknote
ofthose commitments.
107. Therepresentative ofPanama alsostated thathisgovernment would notify theWTO Secretariat
annually oftheimplementation ofthephased commitments withdefinitive datesforcompliance referredWT/SPEC/33
Page40
toinparagraphs ...and...ofthisReport andwould identify anydelays inimplementation together
withthereasons therefore. TheWorking Party tooknoteofthatcommitment.
Conclusions
108. TheWorkingPartytooknoteoftheexplanationsandstatementsofPanamaconcerningitsforeign
trade regime, asreflected inthisreport. TheWorking Party tooknoteofthecommitments given by
Panama inrelation tocertain specific matters which arereproduced inparagraphs [.....................]
ofthisreport. TheWorking Party tooknotethatthesecommitments hadbeenincorporated inparagraph
2oftheProtocol ofAccession ofPanama totheWTO.
109. Having carried outtheexamination oftheforeign trade regime ofPanama andinthelightof
theexplanations, commitments andconcessions made bytherepresentative ofPanama, theWorking
Party reached theconclusion thatPanama should beinvited toaccede totheAgreement Establishing
theWTO under theprovisions ofArticle XII.Forthispurpose, theWorking Party hasprepared the
draftDecision andProtocol ofAccession reproduced intheAppendix tothisreport, andtakes note
ofPanama 'sSchedule ofSpecific Commitments onServices (document ...)anditsSchedule of
ConcessionsandCommitmentsonGoods(document....)thatareannexedtotheProtocol.Itisproposed
thatthese textsbeadopted bytheGeneral Council when itadopts thereport. When theDecision is
adopted, theProtocol ofAccession would beopen foracceptance byPanama which would become
aMember thirty daysafteritaccepts thesaidProtocol. TheWorking Party agreed, therefore, that
ithadcompleted itswork concerning thenegotiations fortheaccession ofPanama totheAgreement
Establishing theWTO.
[Tobecompleted]WT/SPEC/33
Page41
[APPENDIX
ACCESSION OFPANAMA
Draft Decision
TheGeneral Council,
Having regard totheresults ofthenegotiations directed towards theestablishment oftheterms
ofaccession oftheRepublic ofPanama totheAgreement Establishing theWorld Trade Organization
andhaving prepared aProtocol fortheAccession ofPanama,
Decides ,inaccordance withArticle XIIoftheAgreement Establishing theWorld Trade
Organization, thattheRepublic ofPanama mayaccede totheAgreement Establishing theWorld Trade
Organization ontheterms setoutinthesaidProtocol.]WT/SPEC/33
Page42
[PROTOCOL OFACCESSION OFPANAMA
TOTHE AGREEMENT ESTABLISHING THE WORLD TRADE ORGANIZATION
DRAFT
TheWorld Trade Organization (hereinafter referred toasthe"WTO"), pursuant totheapproval
oftheGeneral Council oftheWTO accorded under Article XIIoftheMarrakesh Agreement Establishing
theWorld Trade Organization (hereinafter referred toas"WTO Agreement"), andtheRepublic of
Panama (hereinafter referred toas"Panama"),
Taking noteoftheReport oftheWorking Party ontheAccession ofPanama totheWTO in
document ......... (hereinafter referred toasthe"Working Party Report"),
Having regard totheresults ofthenegotiations ontheaccession ofPanama totheWTO,
Agree asfollows:
PartI-General
1. Upon entry intoforce ofthisProtocol, Panama accedes totheWTO Agreement pursuant to
Article XIIofthatAgreement andthereby becomes aMember oftheWTO.
2. TheWTO Agreement towhich Panama accedes shallbetheWTO Agreement asrectified,
amended orotherwise modified bysuchlegalinstruments asmayhaveentered intoforce before the
dateofentry intoforceofthisProtocol. ThisProtocol, which shallcomprise thecommitments referred
toinparagraph ...oftheWorking Party Report, shallbeanintegral partoftheWTO Agreement.
3. Except asotherwise provided forintheparagraphs referred toinparagraph ....oftheWorking
Party Report, those obligations intheMultilateral Trade Agreements annexed totheWTO Agreement
thataretobeimplemented overaperiod oftimestarting withtheentry intoforce ofthatAgreement
shallbeimplemented byPanama asifithadaccepted thatAgreement onthedateofitsentry intoforce.WT/SPEC/33
Page43
PartII-Schedules
4. TheSchedules annexed tothisProtocol shall become theSchedule ofConcessions and
Commitments annexed totheGeneral Agreement onTariffs andTrade 1994 (hereinafter referred to
asthe"GATT 1994") andtheSchedule ofSpecific Commitments annexed totheGeneral Agreement
onTrade inServices (hereinafter referred toas"GATS") relating toPanama. Thestaging ofthe
concessions andcommitments listed intheSchedules shallbeimplemented asspecified intherelevant
parts oftherespective Schedules.
5. Forthepurpose ofthereference inparagraph 6(a)ofArticle IIoftheGATT 1994tothedate
ofthatAgreement, theapplicable dateinrespect oftheSchedules ofConcessions andCommitments
annexed tothisProtocol shallbethedateofentry intoforce ofthisProtocol.
PartIII-Final Provisions
6. ThisProtocol shallbeopenforacceptance, bysignature orotherwise, byPanama until.........
7. ThisProtocol shallenter intoforce onthethirtieth dayfollowing thedayofitsacceptance.
8. ThisProtocol shallbedeposited withtheDirector-General oftheWTO. TheDirector-General
oftheWTO shallpromptly furnish acertified copyofthisProtocol andanotification ofacceptance
thereto pursuant toparagraph 6toeachMember oftheWTO andtoPanama.
9. ThisProtocol shallberegistered inaccordance withtheprovisions ofArticle 102oftheCharter
oftheUnited Nations.
Done atGeneva this...dayof...onethousand ninehundred andninety-six, inasingle copy
intheEnglish, French andSpanish languages eachtextbeing authentic, except thataSchedule annexed
hereto mayspecify thatitisauthentic inonlyoneormore ofthese languages.]WT/SPEC/33
Page44
[ANNEX
SCHEDULE ...-PANAMA
PartI-Goods
[Tobecirculated later]
PartII-Services
[Circulated asWT/SPEC/ 24]]