Presentation on the Agreement on Import Licensing Procedures

1. Presentation on the Agreement on Import Licensing Procedures By Shashank Priya, Director, Department of Commerce

2. Import Licensing • Definition: Administrative procedures used for operation of import licensing regimes requiring submission of an application or other documentation to the relevant administrative body as a prior condition to importation. • Important points to remember: Basis, scope or duration of a measure being implemented by a licensing procedure is not subject to question under this Agreement.

3. Background • GATT Article VIII on fees and formalities connected with importation and exportation deals with import licensing procedures in a non-specific manner such as: • A recognition by Members for the need to minimize the incidence and complexity of import and export formalities and decrease and simplify import and export documentation requirements (para 1 c)

4. Background (contd.) • Requirement to review the operation of laws and regulation of Members upon request by another Member (para 2) • Prohibition on imposing substantial penalties for minor breaches of Customs regulations or procedural requirements • GATT Article X requires Members to publish promptly laws and regulations of general application pertaining to requirements of imports and exports.

5. Historical Backdrop • Tokyo Round negotiations (1973-79) addressed some non tariff measures • Import licensing was one of them- entered into force on 1 January 1980 • Main objective was that import licensing procedures should not hinder international trade. • In Uruguay Round, disciplines on transparency and notifications were strengthened. • Entered into force on 1 January 1995 as part of single undertaking • Tokyo Round Code terminated on 1 January 1996

6. Objectives • Simplify, and bring transparency to, import licensing procedures. • Ensure their fair and equitable application and administration • Procedures applied for granting import licenses should not by themselves have restrictive or distortive effects on imports

7. General Requirements (Art.1) • The rules and information concerning procedures for submission of applications shall be published: Should cover subjects like eligibility of persons, firms, institutions to make such applications; administrative bodies to be approached; list of products subject to licensing requirements. Such publication, wherever practicable, should be 21 days in advance of the effective date.

8. General Requirements (Art.1) • Application forms should be simple. • Only documents and information considered strictly necessary may be required on application. • Application/renewal procedures shall be simple. • Minimum 21 days be given for submitting license applications. • Normally, only one administrative body to be approached – maximum 3.

9. General Requirements (Art.1) • Application not be refused for minor documentation errors. • No excessive penalty for minor documentation errors. • Licensed imports not to be refused for minor variations in value, quantity or weight than that appearing on the license on account of normal commercial practice.

10. Additional Requirements for Automatic Import Licensing • Def: Automatic import licensing: import licensing where approval of the application is granted in all cases. • Procedures: Automatic import licensing procedures shall not have restrictive effects on imports. This can be achieved by: • Equal eligibility for all persons/institutions/firms to apply and obtain import licenses. • Application be submitted on any working day prior to customs clearance of goods. (iii) Application for licenses be approved within a maximum of 10 working days.

11. Non-Automatic Import Licensing • Def: Import Licensing not falling within the definition of Automatic Import Licensing. • Requirements: • Should not have restrictive or distortive effects on imports additional to those caused by the imposition of the restriction • In scope and duration, it should correspond to the measure to be implemented; • No more administratively burdensome than absolutely necessary; • Publish sufficient information regarding the basis for granting and/or allocating licenses like quota amounts, opening and closing dates of quotas and country specific quota allocations;

12. Non-Automatic Import Licensing (iv) Where quota administered by licensing – overall amount of quota (by quantity and/or value) be published at least 21 days in advance; • Transparency in quota allocation- there should be no discrimination among applicants; if license is refused, on request, reason for refusal be given in writing and there should be a right of appeal; • Period for processing applications shall not be longer than 30 days if applications are considered as and when received, and not longer than 60 days if applications are considered simultaneously

13. Non-Automatic Import Licensing (contd.) (vi) While allocating licenses, Members should consider import performance of the applicant. Whether licenses issued in the past fully utilized. Reasonable distribution of licenses to new importers. Special consideration be given to those importers importing products originating in DCs and in particular, LDCs. (vii) Validity of a license should be of reasonable duration and not be so short as to preclude imports, including from distant sources.

14. Non-Automatic Import Licensing (contd.) (viii) Licenses should be issued in economic quantities (ix) Members are to provide, upon request of any Member having an interest in the trade in the product concerned, all relevant informations.

15. Notifications • Members to submit copies of publications containing information on import licensing procedures and the full text of relevant laws and regulations • Where publications and legislations are not in a WTO official language, such notifications should be accompanied by a summary in one of the WTO official languages (Article 1.4a and 8.2 b)

16. Notification of Changes • Members which institute licensing procedures or introduce changes in these procedures are required to notify the Committee on Import Licensing within 60 days of publication • Such notification should include information on; products subject to licensing; contact point for information on eligibility; administrative bodies for submission of applications; date and name of publications where licensing procedures are published along with their copies; whether licensing is automatic or non-automatic; administrative purpose of automatic import licensing procedures; measures implemented through non automatic import licensing procedures; expected duration of the licensing procedures (Articles 5.1-5.4)

17. Reverse Notification • A Member which considers that another Member has not notified a licensing procedure or changes therein, may bring the matter to the attention of such other Member. • If the other Member still does not make a prompt notification, such Member may itself notify the licensing procedures or the changes therein (Article 5.5) • This provision has not yet been used. • Members to complete an annual questionnaire on import licensing procedures by 30 September of each year (Article 7.3)

18. Thank You.