The WTO Agreement

on Import Licensing
Main provisions, notification
requirements and case studies

A DVANCED T R A DE P O LI CY C A RLO G A M BERALE

COURS E COUNS ELLOR
M A R KET AC CE SS D I V ISI ON
G E N E VA 3 FE B RUARY 2023 WO R LD T R A DE O RG ANIZAT ION
Topics covered
❖Historical background and Institutions
❖Definition of Import licensing
❖Provisions of the Agreement on Import Licensing
Procedures
❖Automatic and non-automatic import licensing
❖Notification requirements
❖Three case studies
 Historical Background
❖GATT 1947:
❖Articles VIII (Fees and Formalities connected with Importation and Exportation)
❖Article X (Publication and Administration of Trade Regulations)
❖Article XI (General Elimination of Quantitative Restrictions)
❖Article XIII (Non-Discriminatory Administration of Quantitative Restrictions)

❖1950: Torquay Standard Practices for the Administration of Import and Export Restrictions and
Exchange Controls set out some basic principles on import and export licensing procedures
❖1971: development of the Import Licensing Questionnaire by the GATT Committee on Trade in
Industrial Products
❖1980: entry into force of the “plurilateral” Tokyo Round Agreement on Import Licensing Procedures
❖1995: entry into force of the “multilateral” Uruguay Round Agreement on Import Licensing Procedures
Import licensing in WTO
Import licensing - Definition
Art. 1.1
Import licensing is defined as is defined as administrative procedures1 used for
the operation of import licensing regimes requiring the submission of an
application or other documentation (other than that required for customs
purposes) to the relevant administrative body as a prior condition for
importation into the customs territory of the importing Member
Art. 1.1, Footnote 1
Those procedures referred to as “licensing” as well as other similar
administrative procedures
G/LIC/3
… includes technical visas, surveillance systems, minimum price arrangements,
and other administrative reviews effected as a prior condition for entry of
imports
What is an import license?
Import licensing: different names
Brunei Darussalam: Application Permit (AP) System on alcohol and cigarettes
Dominican Republic: Clearance Certificate on telecom equipment
Hong Kong, China: Removal Permit/Import Authorization on Chemicals
Japan: Import Trade Control Order on Animals
Mauritius: Plant Import Permit (PIP) on Plants
Morocco: Import Indenture on all products
Turkey: Import Communique on all products
South Africa: Import Control on all products
Burkina Faso: Prior import declaration (DPI) on refrigerators / Special Import
Authorization (ASI) on Arms and ammunition
Use of import licenses
Collect import statistics or market surveillance
Administer quantitative restrictions or quotas
Administer trade measures in connection with:
◦ Human health and life; Plant and animal health; Consumer
protection; Environment; National security; Intellectual
property; Other
Pursue obligations under the UN Charter and other
international treaties
Possible trade restrictive
effects of import licensing
Overly complex application formalities
Discretionary or unfair administration by government
Non-transparent and unpredictable legal framework
Delays in processing of applications
Increased transaction costs
Objectives of the Agreement
❖Simplify import licensing procedures
❖Ensure their fair and equitable administration
❖Minimize their adverse effects
❖Avoid unnecessary costs of licensing
❖Ensure transparency
❖Set out a consultative mechanism and dispute resolution
mechanism
Import licensing is neither
prohibited nor encouraged
Preamble of the Agreement:
❑Recognizing the usefulness of automatic import licensing for certain
purposes …
❑ Recognizing that import licensing may be employed to administer
measures such as those adopted pursuant to the relevant provisions
of GATT 1994
❑ Recognizing that the flow of international trade could be impeded by
the inappropriate use of import licensing procedures
Provisions of the Agreement
Article 1: General Provisions
(Definition, Publication, Notification,
Basic Rules)
Article 2: Automatic Import Licensing
Article 3: Non-Automatic Import
Licensing
Article 4: Institutions (Committee on
Import Licensing)
Article 5: Notification
Article 6: Consultation and Dispute
Settlement (Articles XXII and XXIII of
GATT 1994)
Article 7: Review (Biannual Review of
the implementation and operation of
the Agreement)
Article 7.3: annual requirement to
complete a questionnaire on
licensing procedures
Article 8: Final Provisions
(Reservations; Conformity of
legislations)
Article 8.2(b): notification of all
relevant legislation and changes
thereof
 Article 1 – General Provisions
Conformity with the relevant provisions
of GATT 1994
Neutral in application and administered
in a fair and equitable manner
Publication prior to the effective date of
requirement (21 days)
Allow for comments by Members and
give due consideration to such
comments
Application forms and application
procedures as simple as possible
Reasonable period for the submission of
licence applications (21 days)
Approach only one administrative body
for applications (no more than three)
No refusal for minor document errors
Imports to be allowed in case of minor
variations in value, quantity or weight
Make foreign exchange available to
licence holders to pay for imports on non-
discriminatory basis
No disclosure of confidential information
Poll Question 1
Licensing applicants:
(A) Shall be allowed a reasonable period of time for the submission of
applications
(B) Shall have to approach only one administrative body in connection
with an application
(C) Where strictly indispensable can be required to approach a maximum
of three administrative bodies
(D) All of the above
Poll Question 1
Licensing applicants:
(A) Shall be allowed a reasonable period of time for the submission of
applications
(B) Shall have to approach only one administrative body in connection
with an application
(C) Where strictly indispensable can be required to approach a maximum
of three administrative bodies
(D) All of the above
 Two kinds of import licensing

Import Licensing
Procedures

Automatic Import Non-Automatic

Licensing Import Licensing

Approval of the application is Not falling within the definition of automatic import licensing.
granted in all cases; no restricting Shall not have trade restrictive/distortive effect; shall be no
effects on imports more administratively burdensome than absolutely necessary
Use of import licenses
Automatic import licenses
Article 2
Automatic import licensing is defined as import licensing where approval
of the application is granted in all cases
Typically used for the collection of statistical information
To be administered in a way so to have no trade restrictive effects
Non-discriminatory eligibility of all importers
Submissions can be made on any working day prior to custom clearance
To be approved immediately on receipt, if administratively feasible, or
within a maximum of 10 working days
Poll Question 2
Automatic licensing procedures:
(A) Only apply among WTO Members who are part to an FTA or a custom
union
(B) Shall not be administered in such a manner as to have restricting
effects on imports subject to automatic licensing
(C) Are appropriate in all circumstances
(D) All of the above
Poll Question 2
Automatic licensing procedures:
(A) Only apply among WTO Members who are part to an FTA or a custom
union
(B) Shall not be administered in such a manner as to have restricting
effects on imports subject to automatic licensing
(C) Are appropriate in all circumstances
(D) All of the above
Poll Question 2
Automatic licensing procedures:
(A) Only apply among WTO Members who are part to an FTA or a custom
union
(B) Shall not be administered in such a manner as to have restricting
effects on imports subject to automatic licensing
(C) Are appropriate in all circumstances
(D) All of the above
 Non-automatic import licenses
Import licensing not falling within the
definition contained in para. 1 of Article 2
Used to administer trade restrictions:
quotas, tariff rate quotas (TRQs), measures
taken under WTO exceptions
No trade-restrictive or distortive effects on
imports additional to those caused by the
imposition of the restriction
Same scope and duration as the measure it is
used to implement; no more burdensome
than necessary to administer such measure
If not used for QRs, then publish sufficient
information to understand on what basis
licenses are granted or allocated
Non-discrimination of applicants for a licence
Provide reasons upon request , if application is
rejected; right of appeal or review
Time-limits for processing applications: 30 days
for “first come first served” or 60 days if all
considered together
License duration reasonable and to allow for
imports from distant sources
Quotas: licenses for products in “economic
quantities”; consideration of import performance
in allocation of licenses; reasonable distribution
of licenses to “new importers” (particularly from
developing countries); and special consideration
to importers from developing countries
Poll Question 3
Non-automatic import licensing:
(A) Is generally used to administer trade restrictions which are justified
within the WTO legal framework
(B) Is used for the implementation of quantitative restrictions such as
quotas and tariff-rate quotas
(C) Shall not have trade-restrictive or trade-distortive effects on imports
additional to those caused by the imposition of the restrictions
(D) All of the above
Poll Question 3
Non-automatic import licensing:
(A) Is generally used to administer trade restrictions which are justified
within the WTO legal framework
(B) Is used for the implementation of quantitative restrictions such as
quotas and tariff-rate quotas
(C) Shall not have trade-restrictive or trade-distortive effects on imports
additional to those caused by the imposition of the restrictions
(D) All of the above
Publication and Notification
Requirements
Article 1.4(a)
❖ Publication of import licensing procedures in the Sources (Official Gazette,
publication, website), 21 days before entry into force, and notification of the
Sources to the WTO
Article 8.2(b)
❖ Notification to WTO of full text of relevant laws and regulations and of any
changes to such laws and regulations
Article 5.1-5.4
❖ Notification to WTO of all licensing procedures and of any changes to
licensing procedures
Article 7.3
❖ Yearly notification of annual questionnaire on licensing procedures
 Article 1.4(a): Publication and
Notification Requirement
❖ The rules and all information concerning the
what? procedures for the submission of applications
❖ Eligibility of applicants
❖ Administrative body(ies) to be approached
❖ Lists of products subject to licensing
Publication ❖ Any exception, derogations or changes in or from the
requirement rules concerning the licensing procedures
❖ Any exception, derogations or changes in the lists of
products subject to licensing
Art. 1.4 (a) when?
21 days prior to the effective date of the requirement, BUT in
all events not later than such effective date.

what?
Notification Copies of
requirement Sources* publications to the
Secretariat
when?
By 12 January 1996 or upon
WTO accession (G/LIC/3)
*In cases where the publications are not in a WTO official language, Members shall provide,
together with such publications, a summary of the notification in one of the WTO languages
 Article 8.2(b): Notification
Requirement

Full text of relevant laws and

what? regulations in effect on entry into force
of the WTO Agreement (G/LIC/3)
Article 8.2(b)

when? By 12 January 1996 or upon WTO

accession (G/LIC/3)

Any changes in laws and regulations

relevant to the Agreement and any
changes in their administration

*In cases where the legislation is not in a WTO official language, Members shall provide, together
with such legislation, a summary of the notification in one of the WTO languages.
 Article 5.1-5.4: Notification
Requirement
❖ New regimes or modification to existing ones*:
❖ List of products subject to licensing;
❖ Contact point for information on
What eligibility;
❖ Administrative body(ies) for submission of
Article 5.1-5.4 applications;
❖ Automatic or Non-automatic;
❖ Automatic: administrative purpose;
❖ Non-Automatic: measures being
When implemented;
❖ Expected duration of the procedure

Within 60 days of publication

*If the new or modified regime is not in a WTO official language, a summary of the notification
28
in one of the WTO official languages should be provided
Poll Question 4
The rules and all information concerning import licensing procedures shall be:
(A) Published in sources to be notified to the WTO Committee on Import
Licensing
(B) Published in the three WTO official languages
(C) Published 30 days before they enter into force
(D) All of the above
Poll Question 4
The rules and all information concerning import licensing procedures shall be:
(A) Published in sources to be notified to the WTO Committee on Import
Licensing
(B) Published in the three WTO official languages
(C) Published 30 days before they enter into force
(D) All of the above
Notification requirements
Art 1:4a, 8:2b Article 5 Article 7:3
(G/LIC/N/1/*/#) (G/LIC/N/2/*/#) (G/LIC/N/3/*/#)
• Initial • New regimes or • Annual
notification modification to questionnaire
• Sources existing ones (60 • 30 September of
• Provide the days after each year
Secretariat with a publication) • G/LIC/3
copy of the • Possibility to
legislation have reverse
• G/LIC/28 notifications
• G/LIC/28
 Overlapping notification
requirements
Article 1.4(a)
“The rules and all information concerning
procedures for the submission of applications
… shall be published, in the sources to be
notified to the Committee …”
Article 8.2(b)
“Each Member shall inform the Committee of
any changes in its laws and regulations
relevant to the Agreement and in the
administration of such laws and regulations”
Article 5.4
“Members shall notify the Committee of
the publications(s) in which the
information required in paragraph 4 of
Article 1 will be published”
Article 5.1
“Members which institute licensing
procedures or changes in these
procedures shall notify the Committee of
such within 60 days of publication”
 When to notify?
Full notification of laws and regulations (N/1 or N/2):
❖First N/1 or N/2 notification upon WTO accession
New laws, regulations or procedures (N/2):
❖Within 60 days of publication
Changes to existing laws/procedures (N/2):
❖Within 60 days of publication
Replies to Annual Questionnaire (N/3):
❖Before 30th September each year
 What template to use?
Full notification of laws and regulations:
❖Old N/1 form contained in G/LIC/22; or
❖New N/2 form contained in G/LIC/28 recommended
New laws, regulations or procedures:
❖ New N/2 form contained in G/LIC/28 recommended
Changes to existing laws or procedures:
❖ New N/2 form contained in G/LIC/28 recommended
Replies to Annual Questionnaire (N/3)
❖ No template, refer to questionnaire in G/LIC/3
 New N2 form
Category
1 Notifying Member
2 Title of new
legislation/procedure
3 Date of Publication
4 Date of entry into force
5 Website link/Official
publication of the new
regulation/procedure
6 Have you attached a copy of
the regulation (PDF) to the
Secretariat
7 Type of notification
8 List of products subject to
licensing
9 Nature of licensing
Notification details
[DD/MM/YYYY]
[DD/MM/YYYY]
[ ] Yes. (Please attach a copy of the regulation to the notification.)
[ ] No.
[ ] (a) New licensing regulation/procedure; (please answer question
8 to 14)
[ ] (b) Changes to a regulation/procedure which has been previously
notified in document: ______________ ; ( please answer question
15 and 16)
Please provide the HS codes and detailed descriptions of the
products. In case of a long list, please attach the list as an Annex in
MS WORD document.
Automatic: [ ]
Non-Automatic: [ ]
New N2 form
Category Notification details
10 Administrative (a) Protect public morals;
purpose/measure being (b) Protect human, animal or plant life and health; protect
implemented environment;
(c) Collect trade statistics or market surveillance;
(d) Protection of patents, trademarks and copyrights, and
the prevention of deceptive practices;
(e) Pursue obligations under the UN Charter and other
international treaties (i.e. CITES, Basel Convention,
Rotterdam Convention, UNSC Resolutions etc.)
(f) Quota (including TRQ) administration;
(g) Regulate imports of arms, ammunition or fissionable
materials and safeguard national security;
(h) Other: ______________ (please specify)

11 Administrative body(ies) for Ministry/authority and Department: [ ]

submission of applications Address: [ ]
Website: [ ]
Telephone: [ ]
E-Mail: [ ]
12 Contact point for Ministry/authority and Department: [ ]
information on eligibility Address: [ ]
Website: [ ]
Telephone: [ ]
E-Mail: [ ]

13 Expected duration of
licensing procedure

14 A summary of the
notification in one of the
WTO official languages
New N2 form
Category Notification details
15 In the case of 7(b), please (a) Termination
indicate the type of new
(b) Suspension
change(s)
(c) Modification of specific details in existing
procedures:
Product coverage;
Administrative purpose;
Automatic or Non-automatic;
Duration of licensing;
Change the nature of quantity/value restriction;
Eligibility of applicants;
Contact information on eligibility;
Administrative body(ies) for submission of application;
Documentation requirements (including application form);
Period for Application;
Administrative body(ies) to issue licence;
Processing time for issuing licence;
Licence fee/administrative charge;
Deposit/advance payment and relevant conditions;
Appeal regulations/procedures;
Validity of licence;
Other conditions of licence (extension, transferability, penalty of
non-use etc.);
Foreign exchange requirements;
Other: __________ (please specify).

16 Please elaborate the changes in

detail (in one of the WTO official
languages)
Poll Question 5
Under the Import Licensing Agreement, WTO Members are required to
notify:
(A) The sources where import licensing requirements are published
(B) All laws and regulations containing import licensing requirements and
all changes to import licensing requirements
(C) Their import licensing regimes every year
(D) All of the above
Poll Question 5
Under the Import Licensing Agreement, WTO Members are required to
notify:
(A) The sources where import licensing requirements are published
(B) All laws and regulations containing import licensing requirements and
all changes to import licensing requirements
(C) Their import licensing regimes every year
(D) All of the above
Article 7.3 – Annual Questionnaire
❖ Annex to document G/LIC/3 of 7 November 1995
❖ Designed to elicit information on import licensing and similar
administrative procedures
❖ Describe separately different licensing procedures that apply
to different categories of products, different countries or
different modes of importation
❖ Highlight changes form previous notifications
❖Members shall complete the questionnaire by 30 September
each year
Article 7.3 - Annual Questionnaire

Outline of system (1) Give a brief description of each

licensing system as a whole.

(2) Product coverage.

(3) Countries of origin.
(4) Is the system intended to restrict
quantity or value of imports? If not
Purpose and coverage of what purpose?
licensing (5) Laws, regulations and/or
administrative orders under which the
licensing system is maintained.
Article 7.3 - Annual Questionnaire
(6) If products are restricted as to the quantity or value of imports
(information concerning the allocation of quotas; determination of
the size of quotas; allocation of quotas; time-period for submission
of applications; time for processing applications; one or more
administrative organs to process applications; export restraints
arrangements; products only for export).
Procedures
(7) Where there is no quantitative limit on importation of a product
(timing of application in advance of importation; can licences be
granted immediately on request; period of the year for submitting
licences; one or more administrative organs to process applications).

(8) Circumstances for refusal of an application; reasons for refusal;

right of appeal in case of refusal and to which bodies.
Article 7.3 - Annual Questionnaire

(9) Persons, firms and institutions eligible to apply for licences

Eligibility of
under restrictive and non-restrictive licensing systems. If not all are
Importers to
eligible, eligible importers, registration system, registration fees,
Apply for Licence
published list of importers.

(10) Information required for applications; sample form;

Documental and documents required with application.
Other (11) Documents required on importation.
Requirements for (12) Licensing fee or administrative charge.
Application (13) Deposit or advance payment requirement: amount,
refundability, period of retention and purpose.
Article 7.3 - Annual Questionnaire
(14) Period of validity of licence and whether is extendable.
Conditions of (15) Penalties for non utilization of a licences or a portion of it.
Licensing (16) Transferability of licences between importers; limitations and
conditions.
(17) Other conditions attached to licences for products subject to
quantitative restrictions and not.

(18) Other administrative procedures (aside from import licensing)

Other Procedural required prior to importation.
Requirements (19) Whether foreign exchange is automatically provided for the
good to be imported. Formalities to fulfil for obtaining foreign
exchange.
Relations between N/1, N/2 and
N/3 notifications

keep consistency
A compilation of
all import
All laws and New licensing
regulations Procedure/ procedures
and their changes to maintained and
sources/ changes one existing applied in a WTO
in laws procedure Member

N/1 N/2
N/3
 Important Committee
Decisions and Documents
❖G/LIC/3
Procedures for Notifications and Review Under Article the Agreement on Import
Licensing Procedures, Note by the Secretariat, 7 November 1995
❖ G/LIC/4
Understanding on Procedures for the Review of Notifications Submitted Under the
Agreement on Import Licensing Procedures, Note by the Secretariat, 23 October 1996
❖ G/LIC/22
Old N/1 (Art 1:4a, 8:2b ) and N/2 (Art. 5.1-5.4) Notification Forms, 1 May 2019
❖G/LIC/28
New N/2 Notification Form (Art. 5.1-5.4), 1 May 2019
(can also be used for Art 1:4a, 8:2b notifications)
 Case study 1
The WTO Member Averna recently passed legislation according to which all
importers of steel must obtain an Import Authorization Certificate prior to
importation. The objective of this legislation is collection of trade statistics
and market surveillance. The application for this certificate must be lodged
at the website of the Ministry for Industry one month prior to the date of
importation. The issuing time ranges from 2 to 3 weeks. Application can be
lodged by any person, firm or institution wishing to import steel into
Averna.
 Case study 1 - Questions
1) Is this importation regime an import licensing procedure? If yes, please
identify the type of licensing and explain if the regime described is
consistent or not with the rules of the Agreement on Import Licensing
Procedures.
2) Is Averna required to publish this legislation? If the answer is yes, when
should the legislation be published?
3) If this were considered an automatic import license, what type of
conditions could Averna impose for the granting of licenses?
4) Are the advance application requirement and the time required to issue
the license consistent with Article 2 of the Import Licensing Agreement?
 Case study 1 - Answers
1) Yes, this is a licensing procedure, and it appears to be an automatic licensing
procedure. However, some aspects are not consistent with the rules of the
Agreement on Import Licensing Procedures.
2) Yes, Averna is required to publish this legislation 21 days before its entry into force
and in any event no later than its entry into force.
3) If we consider this to be an automatic import license, Averna cannot impose
conditions and the licenses must be approved in all cases.
4) The advance application requirement (1 month) and the time required to issue the
license (2 to 3 weeks) are not consistent with Article 2 of the Import Licensing
Agreement, according to which, in the case of automatic import licensing,
applications may be submitted on any working day prior to importation and must be
approved immediately, if feasible, or within a maximum of 10 working days.
Case study 2
WTO Member Buranda recently implemented a quota on the
importation of sugar. This quota is administered by means of an
import licensing regime, which requires the issuance of an import
license from the Ministry of Agriculture before any importation can
be made. Licenses are granted for a maximum quantity of 5 tons per
importer and only to importers who imported to Buranda over the
previous 5 years. In allocating licenses under the quota, priority is
given to applicants form Aurelia, a developed country, which is an ally
of Buranda. Applications for licenses can be lodged by any person or
organization 30 days prior to importation and are granted within 15
working days.
 Case study 2 - Questions
1) Is this importation regime an import licensing procedure? If yes, please
identify the type of licensing and explain if the regime described is consistent
or not with the rules of the Agreement on Import Licensing Procedures.
2) Are licenses (5 tons per importer) issued in “economic quantities” according to
Article 3.5(i) of the Agreement?
3) Can Buranda favor applicants from Aurelia and grant licenses only to operators
who have already imported in previous years? On what grounds could a new
importer from a developing country challenge Buranda’s import licensing
regime?
4) Are the requirement of advance application and the timing of processing of
licenses consistent with the Agreement?
 Case study 2 - Answers
1) Yes, this is a non-automatic import licensing procedure. Some aspects of the quota
allocations raise questions under Article 3.5(i) and (j) of the Agreement (see below).
2) Whether licenses for 5 tons per importer correspond to “economic quantities”
according to Article 3.5(i) of the Agreement can only be determined on a case-by-
case basis, considering actual quantities imported in previous years by individual
importers.
3) No, Article 3.5(j) requires that licenses be allocated based on import performance
with reasonable allocation to new importers and to importers from developing
countries.
4) Yes, Buranda can require advance application in case of non-automatic licensing
and the processing time of applications (15 days) is less than the maximum
established under the Agreement.
Case study 3
WTO Member Costaguana implemented a new Resolution No.157 on
the importation of firearms. This Resolution introduced a new import
licensing system for firearms with the purpose of monitoring and
controlling the importation of firearms for public safety reasons.
Applications are refused where the applicant does not have the
necessary domestic authorizations to possess and sell firearms. A
decision to deny license is not subject to review or appeal.
Applications must be made in advance of importation; are considered
as and when they are received; and are processed within 45 days.
Import licenses have a validity of 6 months.
 Case study 3 - Questions
1) Is this importation regime an import licensing procedure? If yes, please
identify the type of licensing and explain if the regime described is
consistent or not with the rules of the Agreement on Import Licensing
Procedures.
2) Is Costaguana required to publish this legislation? If the answer is yes,
when should the legislation be published?
3) If this were considered a non-automatic import license, what type of
conditions could Costaguana impose for the granting of licenses?
4) Are the advance application requirement and the time required to issue
the license consistent with Article 2 of the Import Licensing Agreement?
 Case study 3 - Answers
1) Yes, this is a non-automatic import license. The absence of a review in case
of refusal and the time for processing the application appear to be
inconsistent with Article 3 of the Agreement.
2) Yes, Costaguana is required to publish this legislation 21 days before its entry
into force and in any event no later than its entry into force.
3) In implementing such a non-automatic import license, Costaguana can
impose all conditions that relate to the import restrictions the licensing
procedure is meant to implement (without “additional” restrictions).
4) In principle, no: if applications are considered when they are received, they
should be processed within 30 days. On the other hand, the duration of the
license (6 months) appears “reasonable” (Art. 35.(g)).