3
27 January 2004 (04-0284) Working Party on the Accession
of the Kingdom of Saudi Arabia

DRAFT REPORT OF THE WORKING PARTY ONTHE ACCESSION OF THE KINGDOM OF SAUDI ARABIATO THE WORLD TRADE ORGANIZATION
Revision

TABLE OF CONTENTS
INTRODUCTION 1
DOCUMENTATION PROVIDED 1
ECONOMIC POLICIES 9
Monetary and Fiscal Policies 9
Taxation and Zakat 10
Foreign Exchange and Payments 11
Competition Policies 12
Pricing Policies 13
Privatization 14
State-Owned Enterprises 17
Investment Regime 18
FRAMEWORK FOR MAKING AND ENFORCING POLICIES 25
POLICIES AFFECTING TRADE IN GOODS 31
Trading Rights (The Right to Import and Export) 31
IMPORT REGULATION 35
Tariff Rate Quotas and Tariff Exemptions 36
Other Duties and Charges 37
Fees and Charges Connected with Importation (for Services Rendered) 37
Import Licensing Systems 38
Quantitative Import Restrictions, Including Prohibitions and Quotas 45
Customs Valuation 46
Rules of Origin 49
Other Customs Formalities 50
Other Border Measures 50
Application of Internal Taxes 51
Anti-Dumping, Countervailing and Safeguard regimes 51
EXPORT REGULATIONS 52
Export Restrictions 52
Export Duties 53
Export Subsidies 53
INTERNAL POLICIES AFFECTING TRADE IN GOODS 53
Industrial Policy, Including Subsidies 53
Technical Barriers to Trade 54
Transparency 61
Implementation of TBT Agreement Obligations 62
Preshipment Inspection 62
Sanitary and phytosanitary measures 64
Trade Related Investment Measures 71
State Trading 72
Free Zones 72
Trade in Transit 73
Agricultural Policy 73
Trade in Civil Aircraft 75
Trade Related Intellectual Property Regime 76
General 76
Industrial Property Protection 76
Agencies Responsible for Policy Formulation and Implementation 76
Membership in International Intellectual Property Conventions 77
Application of MFN and National Treatment to Foreign Nationals 77
Fees and Taxes 77
Trade Marks, Including Service Marks 77
Substantive Standards of Protection, Including Procedures for the Acquisition and Maintenance of Intellectual Property Rights 78
Copyright 78
Patents 79
Trademarks 80
Geographical Indications, Including Appellations of Origin 80
Industrial Designs 81
Layout Designs of Integrated Circuits 81
Plant Variety Protection 81
Undisclosed Information 81
Enforcement 81
POLICIES AFFECTING TRADE IN SERVICES 82
Government Procurement 89
Transparency 89
Notifications 91
Trade Agreements 91
CONCLUSIONS 92

INTRODUCTION
On 13 June 1993, the Government of the Kingdom of Saudi Arabia (hereinafter referred to as Saudi Arabia) requested accession to the General Agreement on Tariffs and Trade (GATT 1947).
1409 H (concerning Rules and Procedures to be Followed by the Board of Grievances and the Board of Grievances Law)
Law of Residency
Labour and Workers Regulations
- GCC Documents
Unified Economic Agreement, signed 11 November 1981 under the Gulf Cooperation Council
Information on Non-Oil Exports to Gulf Cooperation Council States
Rules for the Coordination of Industrial Establishments in the Gulf Cooperation Council States
Standard Rules for Giving Priority in Government Purchases to National Products and Products of National Origin of Gulf Cooperation Council States
GCC Common External Tariff
- Domestic Development Measures and Documents
Law for the Protection and Encouragement of National Industries
Saudi Industrial Development Fund Law
Banking Control Law (Articles 1-4)
Information on Saudi Industrial Development Fund Loans
Information on Saudi Agriculture Bank Loans
Information on Agricultural Subsidies Disbursed through the Agriculture Bank
Information on Agricultural Domestic Support
- Sector-Specific Measures
Ministerial Resolution by the Ministry of Communications concerning Applications for Licenses by Maritime Companies and Firms for Carrying on Maritime Carriage (Articles 1-7)
Ministerial Resolution No.
These included diversification of the economy, particularly through laying more emphasis on industry and agriculture, and developing mineral resources, improvement of living standards and quality of life, achievement of balanced growth throughout all regions of the Kingdom, strengthening the role of the private sector, through encouraging its participation in various socio-economic development projects, achievement of social and economic integration among GCC countries, and support economic cooperation with other countries.
To promote domestic price stability, SAMA takes measures to ensure that the growth in domestic liquidity is broadly in line with the growth and availability of goods and services in the economy and the banking system is endowed with adequate liquidity so that the credit needs of all the sectors of the economy are adequately met.
In addition, by encouraging the development of non-petroleum sectors, Saudi Arabia will, of necessity, speed its integration into the global economy by increasing its participation in sectors on which other countries have focused, i.
Corporate tax was payable by non-Saudi corporations operating inside Saudi Arabia or both inside and outside of Saudi Arabia at the same time based on: (i) the total share of foreign partners in the net profits of Saudi corporations (limited liability companies and joint stock companies); and (ii) the total shares of foreign partners in the net profit of Saudi partnerships.
when Saudi Arabia undertook the obligations of convertibility under Article VIII of the Articles of Agreement of the IMF, the Saudi Riyal has remained fully convertible, with no taxes or subsidies on the purchase and sale of foreign exchange.
At a later stage, the representative of Saudi Arabia confirmed that the Council of Ministers Resolution of November 1992 on the government pricing system of butane, propane, natural gasoline had been cancelled by Council of Ministers Resolution No.
Increasing government revenues from returns on participation in activities to be transferred to the private sector, and from financing compensation obtained, for example, from granting concessions and from the proceeds of the sale of part of government shares.
Saudi Arabian Basic Industries Corporation (SABIC):
SABIC was established in 1976 with paid-up capital of SAR 15 billion, of which 70 per cent was owned by the Saudi government and 30 per cent by Saudi nationals and GCC countries' citizens.
In response to a question from a member of the Working Party regarding whether the SAGIA license was the only license or approval required by a foreign investor, the representative from Saudi Arabia stated that, after obtaining the SAGIA license, the foreign investor was treated the same as any local investor and, thus, for certain businesses, must apply for other registrations and/or permits depending upon the nature of the business.
Telecommunications services, except the following activities:
Telex services (CPC 7523)
Telegraph services (CPC 7522)
Electronic data interchange (CPC 7523)
Enhanced/Value-Added facsimile services, including storage, forwarding, and retrieving (CPC 7523)
VSAT services (CPC 75291)
Fax services (CPC 7529 and 7521)
GMPCS services (CPC 75299)
Internet Service Provider services (CPC 75299)
Electronic Mail (CPC 7523)
Provision of online information and database retrieval (CPC 7523)
Information provision and online retrieval and/or processing, including transaction processing (CPC 843)
l.
The Ministry of Commerce and Industry was the principal government agency concerned with formulation and conduct of trade policies, and with the development, support and encouragement of commercial activities within the Kingdom.
GCC Common Customs Law and Implementing Regulations
The Saudi representative reported that a complete list of the principal laws and regulations that form the basis of the Saudi trade regime appears at paragraph 3, the Documentation section, above.
He further stated that if the decision under appeal was maintained by the head of the Ministry or Agency concerned, these decisions were subject to appeal to the Board of Grievances under Article 8(a) of the Board of Grievances Law of 17.
In additional to having Saudi nationality, the requirements for approval as a Commercial Agent under the above measures were: (i) a Commercial Registration certificate giving commercial agency as one of the applicant's business activities; (ii) a certificate from the Chamber of Commerce confirming that the applicant had paid his Chamber of Commerce subscriptions; and (c) the submission of an application form and supporting documentation to the Ministry of Commerce and Industry, including a copy and a certified Arabic translation of the commercial agency or distribution contract which complied with the conditions set out in the law.
]
Tariff Rate Quotas and Tariff Exemptions
In response to questions raised by members of the Working Party, the representative of Saudi Arabia stated that Saudi Arabia did not apply tariff rate quotas and had no intention to do so in the future, except as might be permitted under Article XIX of the GATT and the WTO Agreement on Safeguards.

The representative of Saudi Arabia confirmed that in addition to the Ministry of Agriculture, Ministry of Commerce and Industry, Ministry of Health, Ministry of Information and Culture, Ministry of Interior, and Ministry of Petroleum and Natural Resources, the Ministry of Education (Department of Museums and Archaeology), the Ministry of Telecommunication and Information Technology, and the National Commission for Wild Life Conservation and Development (NCWCD) and the Chivalry Club all had responsibilities concerning the approval of import licenses.
The representative of Saudi Arabia replied that import licenses for pesticides are valid for six months (or for the remainder of the registration period) because this assists the Ministry of Agriculture in tracking the quantities of imports of potentially harmful substances, and for statistical tracking purposes.
firms and institutions eligible to make applications for import licenses are: (a) Saudi, foreign or joint venture companies registered under Saudi laws; (b) natural persons registered in the Commercial Register; and (c) Saudi nationals and non-Saudis holding residence permits, without commercial registration, provided they apply to import goods for their personal use.
He further confirmed that any discretionary authority permitting officials of the Kingdom of Saudi Arabia to suspend imports and exports or otherwise restrict the quantity of trade would be applied from the date of accession in conformity with the requirements of the WTO, in particular Articles XI, XII, XIII, XVIII, XIX, XX and XXI of the GATT 1994, and the Agreements on Agriculture, Application of Sanitary and Phytosanitary Measures,
The representative of Saudi Arabia stated that, with regard to Article 20 of the Customs Valuation Agreement, the Kingdom of Saudi Arabia would implement the provisions of the WTO Agreement on Implementation of Article VII of GATT 1994 (concerning customs valuation) in full from the date of accession to the WTO, without recourse to any transition period.
The representative of Saudi Arabia confirmed that from the date of accession Saudi Arabia would ensure that its laws, regulations and requirements relating to the right to export and all fees, charges or taxes levied on such rights would be in full conformity with its WTO obligations, including Articles VIII:1(a), XI:1 and III:2 and 4 of the GATT 1994 and that it would also implement such laws and regulations in full conformity with these obligations.
Item 2/4 of Part Two of the Technical Directive states "Saudi voluntary and mandatory standards shall not create unnecessary barriers to international trade except what violates the Islamic legislation, national security requirements, prevention of deceptive practices, and the protection of human health or safety, animal or plant life or health or the protection of environment".
In case of development of draft standards by the SASO technical staff, the first draft circulation period provided the opportunity for comments raised by all concerned parties to be taken into consideration in the preparation of the second draft.
He further confirmed that Saudi Arabia would ensure that the operations of any pre-shipment inspection companies retained by Saudi Arabia met the requirements of the WTO Agreement, including the establishment of charges and fees consistent with Article VIII of the GATT 1994, and would comply with the due process and transparency requirements of the WTO Agreements, in particular Article X of the GATT 1994, and the Agreement on the Implementation of Article VII of the GATT 1994.
2003), covered sanitary and veterinary requirements and measures pertaining to animals and animal products conforming to the ruling of the International Zoosanitary Code specifying the regulations recommended for international trade with regard to animals and animal products issued by the Office International des Epizootics.
In rare cases covering particular products where non-concurrence or differences were found between the internationally recognized studies and references, the tendency had been to rely more heavily on the shorter shelf life periods determined by these studies as an indirect compensation for not specifically accounting for infrastructural factors.
The representative of Saudi Arabia stated that Saudi Arabia's sanitary and phytosanitary standards system would be in compliance with WTO provisions under the Agreement on the Application of Sanitary and Phytosanitary Measures as of the date of accession to the WTO, and that Saudi Arabia would apply all measures of the Agreement on the Application of Sanitary and Phytosanitary Measures in the least trade-distorting manner from the date of accession without recourse to any transition period.
He added that the Bank had also been responsible for the disbursement of a package of agricultural subsidies incurred by the government towards reduction of agricultural expenditures in order to increase the average return on agricultural production.
The capital of the insurance company should not be less than SAR 100,000,000 and the paid-up capital of a reinsurance company or an insurance company engaged at the same time in reinsurance activities should not be less than SAR 200,000,000.
]
ANNEXES
Annex A: List of Items Subject to Price Controls
Annex B: Comparison of the Old 1979 Foreign Investment Law and the New 2000 Foreign Investment Law
Annex C: Summary of the Provisions of the Capital Market Law
Annex D: SASO Seed Specifications
Annex E: List of Products Subject to Non-Automatic Import Licensing Requirements
Annex F: List of Banned Imports
Annex G: List of Banned Exports
Annex H: List of Exports Subject to Authorization/Licensing
Annex I: List of Items Subject to Mandatory Certification
Annex J: List of Items Subject to Pre-shipment Inspection
Annex K: List of SPS Measures Maintained by the Kingdom of Saudi Arabia (to be submitted)
Annex A
List of Items Subject to Price Controls
Controlled Price Item No.
)
Investment Fields Open to Foreign Investors
Old Law: The Old Law required that the project be a development project approved under the National Development Plan and that the project be accompanied by foreign technical skills and expertise to facilitate technology transfer and be approved as viable by the Foreign Investment Bureau.
state or province and city)
Purity percentage
Germination percentage
Vitality of the seeds
Inert matter percentage
Weed seeds (including number of seeds and varieties in a sample of 2 kg)
Barley seeds (include number of seeds in a sample of 2 kg wheat seeds)
Moisture percentage

The certificate must be from a national lab or an authorized government lab (including a state lab if the seeds are imported from the US).
In addition, a shipment can be rejected if there is evidence of attack by any other seed transmission diseases where the number of attack seeds is at least 5 seeds/kg.
01 06 19 40 Dogs, other than hunting dogs, guard dogs or guide dogs for the blind, accompanied with a certificate from a competent authority at the country of exportation duly qualified by the Saudi Arabian embassy stated therein that the dog to be admitted is a hunting dog, guard dog or guide dog for the blind,
2010 Date palm saplings of following types: Khalas, Nabut Saif, Munifi, Safri, Magfizi, Barhi, Sukkari, Shalabi, Safari, Barni, Ajwa, Ambara, Hulwa and Rothana GATT Art.
21 Vehicle spare parts (new), including radiators and hoses, brakes and parts, lights, filters, silencers and exhaust pipes, clutches and parts, child restraints, spark plugs, wiper blades and motors, safety belts, fuel tanks, mirrors, bumpers, door locks and hinges, tire tubes, and v-belts, gauges, rims and steering rods.
]
The General Council,
Having regard to paragraph 2 of Article XII and paragraph 1 of Article IX of the Marrakesh Agreement Establishing the World Trade Organization (the "WTO Agreement"), and the Decision-Making Procedures under Articles IX and XII of the WTO Agreement agreed by the General Council (WT/L/93),
Conducting the functions of the General Council in the interval between meetings pursuant to paragraph 2 of Article IV of the WTO Agreement,
Taking note of the application of the Kingdom of Saudi Arabia for accession to WTO Agreement dated "date",
Noting the results of the negotiations directed toward the establishment of the terms of accession of the Kingdom of Saudi Arabia to the WTO Agreement and having prepared a Protocol on the Accession of the Kingdom of Saudi Arabia,
Decides as follows:
1.

Done at [place] this [date of month in full] day of [month and year in full] in a single copy in the English, French and Spanish languages, each text being authentic, except that a Schedule annexed hereto may specify that it is authentic in only one of these languages.
For products under restriction as to the quantity or value of imports (whether applicable globally or to a limited number of countries or whether established bilaterally or unilaterally):
(a to k)
Ans: There are no restrictions on the quantity or value of imports ((a) to (k) are thus not applicable).
An appeal against the decision of the Head of the administrative body lies to the Board of Grievances within 30 days of the decision.