Presentation on the

Agreement on Import
Licensing Procedures
By Shashank Priya, Director, Department of
Commerce
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.
 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)
 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.
 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
 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
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.
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.
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.
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:
(i) Equal eligibility for all persons/institutions/firms to apply
and obtain import licenses.
(ii) 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.
Non-Automatic Import Licensing
 Def: Import Licensing not falling within the definition of
Automatic Import Licensing.
 Requirements:
(i) Should not have restrictive or distortive effects on imports
additional to those caused by the imposition of the restriction
(ii) In scope and duration, it should correspond to the measure to
be implemented;
(iii) No more administratively burdensome than absolutely
necessary;
(iv) 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;
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;
(v) 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;
(vi) 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
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.
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.
 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)
 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)
 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)
Thank You.