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UNDERSTANDING ONTHE INTERPRETATION OFARTICLE XVII
OFTHE GENERAL AGREEMENT ONTARIFFS AND TRADE 1994
Members,
Noting thatArticle XVII provides forobligations onMembers inrespect oftheactivities of
thestatetrading enterprises referred toinparagraph 1ofArticle XVII, which arerequired tobe
consistent withthegeneral principles ofnon-discriminatory treatment prescribed inGATT 1994 for
governmental measures affecting imports orexports byprivate traders;
Noting further thatMembers aresubject totheirGATT 1994 obligations inrespect ofthose
governmental measures affecting statetrading enterprises;
RecognizingthatthisUnderstandingiswithoutprejudicetothesubstantivedisciplinesprescribed
inArticle XVII;
Hereby agree asfollows:
1. Inorder toensure thetransparency oftheactivities ofstatetrading enterprises, Members shall
notify suchenterprises totheCouncil forTrade inGoods, forreview bytheworking party tobeset
upunder paragraph 5,inaccordance withthefollowing working definition:
"Governmental andnon-governmental enterprises, including marketing boards, which have
beengranted exclusive orspecial rights orprivileges, including statutory orconstitutional
powers, intheexercise ofwhich theyinfluence through theirpurchases orsalesthelevelor
direction ofimports orexports."
This notification requirement does notapply toimports ofproducts forimmediate orultimate
consumption ingovernmental useorinusebyanenterprise asspecified above andnototherwise for
resale oruseintheproduction ofgoods forsale.
2. EachMember shallconduct areview ofitspolicy withregard tothesubmission ofnotifications
onstatetrading enterprises totheCouncil forTrade inGoods, taking account oftheprovisions ofthis
Understanding. Incarrying outsuchareview, eachMember should haveregard totheneedtoensure
themaximum transparency possible initsnotifications soastopermit aclearappreciation ofthemanner
ofoperation oftheenterprises notified andtheeffect oftheiroperations oninternational trade.
3. Notifications shallbemade inaccordance withthequestionnaire onstatetrading adopted on
24May1960(BISD 9S/184-185), itbeing understood thatMembers shallnotify theenterprises referred
toinparagraph 1whether ornotimports orexports haveinfacttaken place.
4. AnyMember which hasreason tobelieve thatanother Member hasnotadequately metits
notificationobligationmayraisethematterwiththeMemberconcerned.Ifthematterisnotsatisfactorily
resolved itmaymake acounter-notification totheCouncil forTrade inGoods, forconsideration by
theworking party setupunder paragraph 5,simultaneously informing theMember concerned.
5. Aworking party shall besetup,onbehalf oftheCouncil forTrade inGoods, toreview
notifications andcounter-notifications. Inthelightofthisreview andwithout prejudice toparagraph 4(c)
ofArticleXVII,theCouncilforTradeinGoodsmaymakerecommendationswithregardtotheadequacy
ofnotifications andtheneedforfurther information. Theworking party shallalsoreview, inthelight
ofthenotifications received, theadequacy oftheabove-mentioned questionnaire onstatetrading and
thecoverage ofstatetrading enterprises notified under paragraph 1.Itshallalsodevelop anillustrativePage28
listshowing thekinds ofrelationships between governments andenterprises, andthekinds ofactivities,
engaged inbytheseenterprises, which mayberelevant forthepurposes ofArticle XVII. Itisunderstood
thattheSecretariat willprovide ageneral background paper fortheworking party ontheoperations
ofstatetrading enterprises astheyrelate tointernational trade. Membership oftheworking party shall
beopentoallMembers indicating theirwishtoserve onit.Itshallmeetwithin ayearofthedate
ofentry intoforce oftheWTO Agreement andthereafter atleastonceayear. Itshallreport annually
totheCouncil forTrade inGoods.1
1Theactivities ofthisworking party shall becoordinated withthose oftheworking group provided forinSection III
oftheMinisterial Decision onNotification Procedures adopted on15April 1994.