 
 RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/ACC/SPEC/SAU/4/Rev.1 
2 October 2000 
 (00-3991) 
Working Party on the Accession  
of the Kingdom of Saudi Arabia   
 
DRAFT REPORT OF THE WORKING PARTY ON  
THE ACCESSION OF THE KINGDOM OF SAUDI ARABIA  
TO THE WORLD TRADE ORGANIZATION 
 
Revision  
INTRODUCTION 
1. On 13 June 1993, the Government the Kingdom of Saudi Arabia (hereinafter referred to as 
Saudi Arabia) requested accession to the General Agreement on Tariffs and Trade (GATT 1947).  At 
its meeting on 21 July 1993, the GATT 1947 Council  of Representatives established a Working Party 
to examine the application of the Government of  Saudi Arabia to accede to the General Agreement 
under Article XXXIII, and to submit to the Coun cil recommendations which may include a draft 
Protocol of Accession.  Membership of the Wo rking Party was open to all contracting parties 
indicating the wish to serve on it.  In pursuance of the decision of the General Council of the World Trade Organization (WTO) of 31 January 199 5, the GATT 1947 Accession Working Party was 
transformed into a WTO Accession Working Party.  The terms of reference and the membership of 
the Working Party were reproduced in document WT/ACC/SAU/2/Rev.6. 
2. The Working Party met on 2 and 3 May, 6 and 8 November 1996, 29-30 May, 2 and 
4 December 1997, 17 and 19 November 1998, 22 Se ptember 1999 and ... under the Chairmanship of 
Mr. J. Weekes (Canada). 
DOCUMENTATION 
3. The Working Party had before it, to serve as a basis for its discussions, a Memorandum on the 
Foreign Trade Régime of Saudi Arabia (L/7489)  and the questions submitted by members on the 
foreign trade régime of Saudi Arabia, together  with the replies thereto, (L/7645 and Add.1; 
WT/ACC/SAU/3;  WT/ACC/SAU/6, Add.1-3 and Add.3/Corr.1;  WT/ACC/SAU/8 and Corr.1;  
WT/ACC/SAU/10;  WT/ACC/SAU/13, Add.1, Add.1/Corr.1 and Rev.1;  WT/ACC/SAU/29, Add.1-4, and Corr.1 and 2;  and, WT/ACC/SAU/35 and Corr.1).  The Government of Saudi Arabia 
also provided the Working Party with the following information: 
- Customs Law and Implementing Regulations; 
- Customs Tariff; WT/ACC/SPEC/SAU/4/Rev.1 
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 - Guide to the Licensing of Foreign Investment in Saudi Arabia; 
- Law for the Protection and Encour agement of National Industries; 
- Trade Marks Law and Regulations; - The Patents Law; - The Law for the Protection of Copyrights; 
- Law and Regulations for Commercial Agencies; 
- Import Statistics, 1993; - Information on Non-Oil Exports To Gulf Cooperation Council States; 
- Decree No. 142 of 199/11/1413:  General Obje ctives and Strategic Principles of the 
Sixth Development Plan; 
- Law for the Protection and Encouragement of National Industry; 
- Saudi Industrial Development Fund Law; - Foreign Investment Regulations; 
-
 Investment of Foreign Capital Regulation;  
- Rules for the Coordination of Industrial Establishments in th e Gulf Cooperation 
Council States; 
- Banking  Banks  Control Law (Articles 1-4); 
- Ministerial Resolution by th e Ministry of Communications concerning Applications for 
Licences by Maritime Companies and Firms for Carrying on Maritime Carriage (Articles 1-7); 
- Ministerial Resolution No. 4104/20/M dated 4.11.1408 (H) concerning the 
Implementing Regulations to the Private Medical Establishments Law (Articles 1-2); 
- Implementing Regulations to Regulation of Technical Institutes and National 
Occupational Centres (Articles 1-9); 
- Resolution from His Royal Highness the Mini ster of Defence and Aviation concerning 
the --Regulation of Tourism and Travel Agencies and Companies engaged in Air 
Transport (Articles 1-4 and 13); 
- Ministerial Order No. 264 of 16.9.1402(H):  Organization of the Practice of the 
Profession of Engineering C onsultancy (Party I and III); 
- Law of Certified Accounta nts (Articles 1-2) and Mi nisterial Order No. 595 of 
13.11.1395 Enacting the Implementing Regu lations of the Accountants Law; 
- Ministerial Order No. 1190 of 16.2.1402 Pe rtaining to the Regulation of Carrying on 
the Profession of Legal Cons ultancy (Article s 1-2. 4-7); 
- Law concerning the Carrying on of the Pr ofession of Pharmacy and Trading in 
Medicaments and Medical Prep arations (Articles 1.5); 
- List of banned items; - Rules and Procedures before the Board of Grievances; 
- Royal Decree M/10 of 3.3.92(H) and Council  of Ministers Resolution No. l 172 of 
25.2.92(H); 
- SASO Standards No. 457 and No. 702; - List of Saudi Standards (1-802); - Regulated Product Categories Applicable Standards; - Catalogue of Saudi Standards (1997); 
- Government Purchases Law and Implementing Regulations; 
- Council of Minist ers Resolution No. 124 of 29.5.1403; 
- Standard Rules for Giving Priority in G overnment Purchases to National Products and 
Products of National Origin of Gu lf Cooperation Council States; 
- Companies Law; 
- Law of Arbitration and Im plementing Regulations to the Law of Arbitration; 
- Response to Questionnaire on Import Licensing Procedures; 
- Information on Foreign Investment by Sectors; - Information on Recent Forei gn Investments Gr anted Licences; 
- Information on Saudi Industrial Development Fund Loans;  WT/ACC/SPEC/SAU/4/Rev.1 
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 - Information on Saudi Agriculture Bank Loans; 
- Information on Agricultural Subsidies Disbursed through the Agriculture Bank; 
- Information on Agricu ltural Domestic Support; 
- Information on the Applicat ion of Import Licensing; 
- Information on the Technical Barriers to Trade; 
- Information on Sanitary and Phytosanitary Measures; 
- Information on Preferential Trading Arrangements; - ICCP - Comprehensive Procedures and Guidelines. 
INTRODUCTORY STATEMENTS 
4. The representative of Saudi Arabia stated th at over the last 25 years, Saudi Arabia had 
become a modern State with a strong economy increasingly based on the private sector with a 
sophisticated infrastructure.  At  the same time, government initia tives had been used to influence 
economic activity when necessary, in order to ensu re the protection of the Islamic values of Saudi 
Arabian society.  Economic development of Saudi Arabia had largely depended on the utilisation of 
its large oil and gas reserves.  Saudi Arabia was the largest producer of oil in the world and one of the 
world's largest producers of natural gas.  The ava ilability of these resources had given rise to an 
economy typical of oil-rich developing countries - characterized by a major concentration of exports 
on a single product and a high propensity to import.   
5. The representative of Saudi Arabia informed me mbers of the Working Party that within its 
traditional market economy system, Saudi Arabia had established indicative planning for economic and social development, based upon Islamic valu es and principles, to guide development in a 
coordinated and balanced direction.  The first a nd second plans stressed the construction of a modern 
infrastructure, the improvement of government services, and the development of human resources.  The third and fourth plans emphasized the diversif ication of the economy and improvement in health, 
education, training and other social services.  Over the past two decades non-oil GDP had increased 
five-fold and private investment had increased seven-fo ld.  Infant mortality rates had dropped by over 
75 per cent and the ratio of physicians per person had improved by more than 90 per cent.  School 
enrolment had risen from a little over 500,000 to more  than 3 million and Saudi Arabia had among the 
lowest pupil-teacher ratios in the world. 
6. He further added that Saudi Arabia had also improved its trade with other nations of the 
world.  Amongst  developing countries, it ranked sixt h in the world in the value of traded goods, of 
which a large proportion was petroleum exports.  Of the top 40 trading countries in the world, Saudi 
Arabia ranked sixth in the growth of trade over the period 1977-1992.  Saudi Arabia maintained one 
of the least restrictive exchange and trade systems in the world - there were no exchange restrictions 
and did not impose trade restrictions for balance-o f-payments reasons.  Trade restrictions were only WT/ACC/SPEC/SAU/4/Rev.1 
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 imposed for religious, health, and security reasons.  In addition to the underlying objectives of the 
preservation of Islamic values and the provision of national security, there were a number of other 
broad goals that the five-year plans aspire to achie ve.  These include diversification of the economy, 
improvement of living standards, regional developm ent within Saudi Arabia, strengthening of the role 
of the private sector, broadening the linkages betw een Saudi Arabia and ot her nations, development 
and sustenance of the physical infrastructure, pr otection of the environment and development of 
human resources.  The main focus of the current five -year plan was the acceleration of the process of 
economic diversification with the ultimate goal of having a fully developed economy.  While oil was 
a vital part of the Saudi economy, the goal was to use petroleum as a resource for diversified 
industrial growth and reducing the country's dependence on the world oil market.  The rapid growth of 
the Saudi population also necessitated the establishm ent of a diversified economy capable of creating 
the necessary employment opportunities and sustaini ng a relatively high standard of living for a 
population which was projected to more than double in the next 20 years. 
7. The representative of Saudi Arab ia stated that the diversification of the economy could only 
be achieved through much broader private sector part icipation in the economy.  The private sector had 
already begun to pursue a wide range of business opportunities unrelated to government expenditures 
and this trend was expected to accelerate as priv ate sector management, production and marketing 
capabilities strengthened and the competitive atmosphe re improved.  Institutional support for private 
sector-led growth and diversification would be pr ovided by the Government, through liberalisation 
and facilitation of investment, rapi d development of the Saudi Arabia 's banking and financial sector 
and financial markets, as well as a widening range of business services.  Saudi Arabia also recognized the need to build a technology b ase.  Whilst Saudi Arabia had kept up to date with global scientific 
and technological developments, this had largely be en through the import of sophisticated technology 
owned by foreign partners.  Saudi Arabia still needed to improve its indigenous technological 
capabilities to the level of that existing in develo ped countries.  The Government planned to assist 
through the expansion and improvement of educa tional courses and facilities related to science and 
technology at all levels, as well as improvement of  the overall structural support for private sector 
initiatives.  In addition, Saudi Arabia was aware of the need to impart to its citizens the knowledge 
and skills that would enable them to participat e effectively in all social, economic and cultural 
activities, as well as to further develop vocational a nd technical education so that the country's skilled 
manpower needs could be met. 
8. In their opening remarks, members of the Work ing Party welcomed Saudi Arabia's decision 
to accede to the WTO and to implement the WTO Agreements expeditiously through the 
establishment of institutional arrangements and the amendment and adoption of the required  WT/ACC/SPEC/SAU/4/Rev.1 
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 legislation and regulations.  It was noted that Saudi  Arabia had played and was expected to continue 
to play a significant role in contributing to main tain economic and financial stability and growth, both 
in the region and globally.  Saudi Arabia's accessi on would reinforce the universality of the WTO and 
strengthen the multilateral trading system.  Noting that  Saudi Arabia wished to avail itself of certain 
transitional arrangements, some Members supported this  request while other Members stated that such 
requests would have to be considered and decide d case by case on the basis of substantiated needs. 
9.   The Working Party reviewed the economic policies and foreign trade regime of Saudi 
Arabia and the possible terms of a draft Protocol of Accession.  The views expressed by members of 
the Working Party and the various aspects of Saudi  Arabia's foreign trade regime, and on the terms 
and conditions of Saudi Arabia's accession to the WTO, are summarised below in paragraphs 10 to 
144.   
ECONOMIC POLICIES 
Privatization  
10. Some members of the Working Party requested that Saudi Arabia explain how foreign 
companies were permitted to participate in the priv atization of Saudi industries.  In response, the 
representative of Saudi Arabia stated that accordi ng to the Council of Minister’s Resolution No.60 
dated 1/4/1418 H, regarding the G overnment’s objectives of privatization, one of those objectives was 
"the encouragement of national and foreign capit al to undertake domestic investment".  The 
Ministerial Committee on Privatization formed by the above Resolution was required to approve the 
implementation programme for each project planne d for privatization by the Government.  The 
programme included a study on the participation of foreign investment according to the circumstances 
and nature of each project. 
Investment Regime  
11. Some members of the Working Party requested clarification whether there were any formal 
requirements setting a minimum level of Saudi Arabian  participation in any business venture.  The 
representative of Saudi Arabia stated that a new law on foreign investment – Foreign Investment 
Regulations – had been promulgated by Royal  Decree No. M/1 of 9 April 2000 (5.1.1421H). 
Under the new Foreign Investment Regulations, a foreign investment may take one of the two 
following forms: (1) enterprises owned by foreign and national investors, (2) enterprises wholly-
owned by foreign investors.  A project, wheth er wholly-owned by foreign  investors or a joint-
venture, licensed in accordance with F.1. Regula tions, shall enjoy all benefits, incentives and 
securities available to a national project. Foreign investment is permissible in all activities, WT/ACC/SPEC/SAU/4/Rev.1 
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 except a short negative list (which is being finalized).  Under the new Regulations, a foreign 
investor is entitled to re-transfer, outside th e Kingdom of Saudi Arabia, the proceeds from the 
sale of his shares or the excess funds from the liqui dation or the profits earned by the enterprise 
or to dispose of it in any other legal manner.  Further, the investor  is entitled to transfer the 
required funds to settle any contractual obligations related to the project .  Article 11 of the new 
Foreign Investment Regulations provides legal sa feguards against confiscation or expropriation 
of foreign investment.  It is not permissible to confiscate foreign investments, wholly or 
partially, except by a court order.  In addition, it is not permissible to expropriate the ownership 
of foreign investments, wholly or partially, ex cept for the public interest, and on payment of 
reasonable compensation in a ccordance with the regulations.   
there was no law that specifically 
dealt with the topic of foreign joint ventures.  Th e Investment of Foreign Capital Regulation covered 
foreign investment in general, including foreign cap ital in joint ventures.  Although Saudi regulations 
did not require local participation, under the Inv estment of Foreign Capital Regulation, at least 
25 per cent Saudi participation was required in order to qualify for tax exemptions.  Some sectors 
were open to foreigners only if they formed a jo int venture with Saudi Arabian companies, such as 
foreign par ticipation in the maritime transport sector.  The only conditions in the Investment of 
Foreign Capital Regulation were th at the capital be invested in development enterprises, other than 
extraction of petroleum and mining, and that the foreign capital be a ccompanied by foreign technical 
expertise.  Foreigners could not participate in the provision of certain services like security guarding, 
commercial agencies, customs clear ing agencies, transaction follow -up clerks to government 
departments, and real estat e agencies. In addition, foreign i nvestment was prohibited in security 
underwriting and commodity brokerage services, in cluding currency exchange operations, as well as 
in technical institutes.  Foreign accountants, lawyers or pharmacists were required to work out of the 
office of a Saudi licensed accountant, lawyer, or pharmacist, respectively.  Other professional service 
suppliers were required to have a contract with a Saudi service provider before being allowed to 
establish a commercial presence.  In ad dition, various sectors were reserv ed to the State:  such as 
basic telecommunications, railways, mass transit, postal service, public administration,  and public 
broadcasting.  Investors in a Saudi Arabian business would only be granted a licence to commen ce  a 
second business once the first project was successfully established .   
12. Some members of the Working Party requested clarification of the encouragements offered 
by Saudi Arabia to foreign investors to invest in  Saudi Arabia in order to support the inflow of 
technology and expertise, in particular whether technology transfer was in any way a condition for 
investment approval in all or certain areas  cases .  The representative of Saudi Arabia replied that 
under the new Foreign Investment Regulations of  9 April 2000, technology transfer was not a 
condition for investment approval.  Further, a project whether wholly-owned by foreign  WT/ACC/SPEC/SAU/4/Rev.1 
 Page 7 
 
 
 investors or a joint venture shall enjoy all be nefits, incentives and securities available to a 
national project.  A foreign investor has to approach only one authority – the General 
Investment Authority – to obtain a licence. The GI A has to decide on the investment application 
within 30 days from the date all required docume nts were submitted. The GIA has to decide on 
the investment application within thirty days from the date all required documents were submitted.  The GIA will also serve as the enqui ry point on laws, regulations and procedures 
relating to foreign investment.  The new Foreign  Investment Regulations and the implementing 
regulations provide that foreign investment vent ures have the right to own real estate necessary 
to exercise their licensed activities or to acco mmodate their employees, in accordance with 
regulations of property ownership for non-Saudis.  Further, it is provided that foreign investors 
shall have the right to bring and sponsor thei r non-Saudi employees (subject to the numerical 
limits).   the Investment of Foreign Capital Regulation provided that any investment of foreign capital 
required a licence iss ued by the Ministry of Industry and Electricity upon the recommendation of an 
inter-agency Committee.  If the Committee rejected th e licence application for an investment of 
foreign capital, the concerned foreign inv estor could appeal the decision to the M inister of Industry 
and Electricity.  There were two requirements for gr ant of a licence.  The first was that the proposed 
investment be made in "development enterprises"  (not including enterprises for the extraction of 
petroleum and minerals).  The Minist ry of Industry and Electricity, upon the motion of the inter -
Ministerial Investments Committee, had issued a Ministerial Order (Number 952 of 1400) which 
determined that the following groups of enterprises  were considered development enterprises for the 
purposes of the Investment of Foreign Capital Regulation:   
 - Productive industrial development projects,  
 - Productive agricultural development projects,  
 - Health development projects,  
 - Services and  
 - Contracting.  
The second requirement for grant of  a licence was that the investme nt be accompanied by foreign 
technical expertise.  The conditions that foreign cap ital be accompanied by foreign technical expertise 
aims at encouraging technology transfer to Sa udi Arabia.  Accordingly, the provision of tec hnology 
did not in and of itself guarantee approval under th e Investment of Foreign Capital Regulation.  
Technology transfer was not a restriction on foreign investment.  In fact,  Saudi Arabia encouraged 
the inflow of foreign capital by all means . 
13. Foreign Investment Regulations allow forei gn investors to buy local or foreign 
investment ventures or shares in them, provided that general conditions as for new investments WT/ACC/SPEC/SAU/4/Rev.1 
Page 8  
 
 are met.  A foreign investor can apply more th an one licence for different activities, provided 
that he is not the owner of or a shareholder in a venture which is in financial default.  The 
Regulations lay down that the amount of capital to  be invested in a licensed project must not be 
less than ten million Saudi Riyals for industrial ventures and not less than five million Saudi 
Riyals for other ventures. 
14. Some members of the Working Party asked wh ether the government had awarded licenses to 
100 per cent foreign-owned operations.   In response the representative of Saudi Arabia stated that 
there was no level of foreign ownership required for a licence to be granted under the Investment of  
under the new Foreign Investment Regulations of  9 April 2000, there was no limit on foreign 
investment.  Under the now repealed Foreign Capi tal Investment Regulations (replaced by the 
new Foreign Investment Regulations) 137 license s had been issued for wholly foreign-owned 
projects out of 1,354 licenses for foreign investment.   In response to further questions, he noted 
that under the new Foreign Investment Regulations of April 2000 ,  Foreign Capital Regulation.  
Moreover, even if there was such  a requirement, neither the GATT  1994 nor the Uruguay Round 
Agreement on Trade -Related Investment Measures prohibit re quirements regarding the level of 
foreign ownership .  He noted that of the 1,354 licences issued for foreign capital investment in Saudi 
Arabia, 137 had been for enterprises wholly owned by foreign entities.  In response to further 
questions, he noted that  “national treatment” was given to foreign investors.  He further stated that 
the Foreign Investment Regulations were fully consistent with the GATT 1994 and with the WTO 
Agreement on Trade-Related Investment Measures, a nd reiterated that Saudi Ar abia did not apply any 
TRIMs prohibited by the WTO Agreement on Trade-Related Investment Measures. 
15. In response to a question, the representative  of Saudi Arabia stated that foreign 
companies holding commercial registration in Sa udi Arabia can directly import goods, for their 
own use or as inputs, without going through a commercial agent.  
16. In response to questions from some members of the Working Party concerning whether the 
Government of Saudi Arabia planned to liberalize its stock market and open it to non-Saudi investors, 
the representative of Saudi Arabia stated that Saudi Arabia had no plans  is gradually changing its 
regulations  to change its regulations  concerning participation of foreigners in the securities  stock 
market.  Although  direct share trading in Saudi Arabia was restricted to Saudi and GCC nationals , 
there are no restrictions on participation by fo reign investors in the Government Bonds and 
Treasury Bills market and in investing in Saudi mutual funds. Non-Saudi Gulf Cooperation 
Council (GCC) nationals were allowed to participate in the share market but only to the extent to 
which the original allocation of  shares was subscribed by non -Saudi GCC nationals.  There were 
non-GCC nationals that held shares of joint stock co mpanies which were traded in the share market  WT/ACC/SPEC/SAU/4/Rev.1 
 Page 9 
 
 
 but those non-GCC nationals were required to receive  permission from concerned authorities, such as 
the Saudi Arabian Monetary Agency and the Ministry  of Commerce, prior to selling their shares.  In 
its continuous review of the development of the financial market, the Kingdom of Saudi Arabia had 
allowed the establishment of a close-ended fund  (SAIF) listed on the London Stock Exchange 
through which .  Through that fun d international investors could participate in the Saudi Stock 
Exchange.   shares market.   In November 1999, Saudi Ar abia has made further changes to its 
regulations and now permits foreigners to inv est in open-ended mutual funds managed by 
banks that invest in the Saudi stock market.  
17. Some members of the Working Party asked wh ether Saudi Arabia planned to remove its 
restrictions on foreign investment in exploration a nd extraction of hydrocarbons. The representative of 
Saudi Arabia replied that there were no plans to e liminate restrictions on foreign investment in the 
petroleum sector.  However, Saudi Arabia has removed restrict ions on foreign investment in gas 
projects by foreign firms are being reconsidered.  
FRAMEWORK FOR MAKING AND ENFORCING POLICIES 
18. The representative of Saudi Arabia explained that the Basic Law of Government  Rule , 
instituted by Royal Decree No. A/90 dated 27 Sh aaban 1412 AH, set down the law concerning 
political authority within Saudi Arabia.  Article 56 of  the Basic Law of Rule stated that the King was 
the Chairman of the Council of Ministers and was assisted by Ministers in the performance of his 
duties.  The Basic Law  also stated that the Law of the Council of Ministers laid down the powers of 
the Council regarding internal and external policies,  the organization and coordination of the various 
Government authorities; and the conditions to be satisfied by, the powers of, the method of 
responsibility and all affairs of the Ministers.  According to Article 17 of the Consultative Council 
Law, resolutions passed by the Consultative Council we re forwarded to the Chairman of the Council 
of Ministers, who passed them to the Council of Mini sters for consideration.  When the points of view 
of both Councils were in agreement they were enact ed after being approved by the King.  In case of a 
difference of opinion, the King approved  what he considered appropriate.  Article 70 of the Basic 
Law of Government and Article 20 of the Council of Ministers Law provide that  laws, treaties 
and international agreements a nd concessions were enacted and amended by Royal Decrees after 
having been considered by the Consultative Council and the Council of Ministers respectively .  In 
general, no initials could be affe cted on any agreement or obligation until approved by the Council of 
Ministers.  In conclusion, he added that th e Kingdom of Saudi Arabia would do whatever was 
required, whether through Royal Decree, Council of Mi nisters Decree or Ministerial Orders to bring WT/ACC/SPEC/SAU/4/Rev.1 
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 its trade regime into conformity with its WTO oblig ations. in those cases  where conformity did not 
already exist.  
19. The representative of Saudi Arabia stated that Saudi Arabia provided for a wide range 
of judicial, arbitral and administrative procedu res with respect to trade matters.  For example, 
with regard to matters under the jurisdiction of the Customs Directorate, such as classification 
and valuation, there was an administrative system for appealing rulings.  Disputes pertaining to 
Article VII related to valuation of customs pur poses were under the authority of the standing 
Committee within the Customs Department.  Si milar dispute settlement systems had been 
established with regard to sanitary and phytosani tary requirements, licensing, standards, and 
intellectual property rights.  Ministries and/or Agencies involved had established internal standing committees of senior officials to review initial administrative decisions. All decisions 
made by these “standing Committees” were appeal able to the head of Ministry or Agency 
concerned. 
20. He further stated that if the decision was ma intained by the head of 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 17.1 1402 AH.  The Board of Grievances was an independent 
tribunal to which appeals were made from all gov ernmental administrative decisions, relevant 
to the WTO provisions, and addressed the obligation in Article X:3 of the GATT to provide right of appeal of administrative decisions to an independent tribunal.  The  jurisdiction of the 
Board included appeals against all administrative decisions of Government Departments and 
Government officials, and its decisions were bi nding on the  government office concerned.  It 
was composed of a President, Vice-Presidents a nd Members.  The President was appointed by 
and reported to the King.  The Vice-President s and Members were appointed by Royal Decree 
on the recommendation of the President.  There  were no time frames fixed for the hearing of 
appeals or handing down of decisions, but the Board supplied written judgements to all parties 
to any appeal, which included the reasons for th e decision.  Article (47) of the Board of 
Grievances Law provided for the publications of the Judicial decisions.   
21. He also noted that the Board’s decisions coul d be challenged and appealed to the Appeal 
Court (Scrutiny Commission) within the Board of Grievances, which would either confirm or 
reverse appealed decisions.  In all cases, the Appeal Commission’s decisions were final and 
enforceable. 
22. The representative of Saudi Arabia confirmed that from the date of accession, Saudi 
Arabia’s laws would provide for the right to appe al administrative rulings on matters subject to  WT/ACC/SPEC/SAU/4/Rev.1 
 Page 11 
 
 
 WTO provisions to an independent tribunal in co nformity with WTO obligations, including but 
not limited to Article X:3(b) of the GATT 1994.  The Working Party took note of this 
commitment. 
23. In response to further questions, the representativ e of Saudi Arabia stated that Article 70 of 
the Basic Rule of Law provided that international agreements entered into force as domestic laws 
following their ratification by Royal Decree and enactment by the Consultative Council and Council 
of Ministers.  As a general rule, should Saudi Arabia’s la ws or other acts be found to contradict 
international treaties or agreements, the provision s of the international treaties or agreements, 
such as the WTO would apply.  He noted, howe ver, that like other countries, Saudi Arabia 
could not use international treaties to overturn fundamental religious/legal principles, such as 
legalizing the consumption of alcohol and pork.  To  bring its Laws and Regulations into 
conformity with WTO Agreements, Saudi Arab ia will draft new Laws and amendments to 
existing Laws in relevance to the various subs tantive provisions of the WTO Agreements, such 
as RIPS, Customs Valuation, SPS, TBT, Import  Licensing, including transparency provisions.   
24. [The representative of Saudi Arabia  stated that if Saudi Arabia's laws or other acts should be 
found to contradict international tr eaties or agreements, the provisions of the international treaty or 
agreement, such as the WTO, would apply.  It should be noted, however, that like other countries, 
Saudi Arabia may not use international trea ties to overturn fundamental religious-legal 
matters, such as legalizing the consumption of alcohol and pork.  The representative of Saudi 
Arabia confirmed that sub-central entities had no autonomous authority over issues of subsidies, 
taxation, trade policy or any other measures cove red by WTO provisions.  He confirmed that the 
provisions of the WTO Agreement, including Saudi Arabia's Protocol, would be applied uniformly 
throughout its customs territory and other territories under Saudi Arabia's contro l, including in regions 
engaging in border trade or frontier traffic[, speci al economic zones,] and ot her areas wh ere special 
regimes for tariffs, taxes and regulations are establishe d.  [He added that when apprised of a situation 
where WTO provisions were not being applied or were applied in a non-uniform manner, central 
authorities would act to enforce WTO provisions wit hout requiring affected pa rties to petition through 
the courts.]  The Working Party t ook note of these commitments.]  
25. The representative of Saudi Arabia confirmed that from the date of accession Saudi Arabia 
would ensure that its laws and re gulations relating to the right to trade in goods and all fees, charges 
or taxes levied on such rights would be in fu ll 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 WT/ACC/SPEC/SAU/4/Rev.1 
Page 12  
 
 and regulations in full conformity with these oblig ations.  The Working Party took note of this 
commitment. 
POLICIES AFFECTING TRADE IN GOODS 26. [The representative of Saudi Arabia confirmed that there were no substantive 
requirements to register with the Ministry of Commerce in order to import, although there was 
a requirement to obtain Commercial Registrati on for the carrying on of business, whether 
manufacturing, retailing, trading, or professional.   Any company, whether Saudi or foreign, 
which was commercially registered in the field of  import trade could import goods without the 
need to get any further permission or authoriz ation, except for items which require an import 
licence.  A firm that wished to be legally eligib le to import goods, should formally incorporate 
the activity of importing within its “scope of business”.  The procedures followed in commercial 
registration provided that sole proprietorships fill ed in a form specifying the requirements to be 
met by the applicants, then paid a SR 1000 registr ation fee for a registration valid for five years 
(for mother companies; only SR 500 was require d for subsidiaries).  Companies apply to the 
General Directorate of Companies for the appr opriate forms required to draft articles of 
incorporation.  Once such forms have been dul y prepared, they are checked and authenticated 
by a notary public.  Having been authenticate d and legalized these documents are published in 
the official gazette (Umm Al-Qura).  The companies deposit required capital amounts in the bank.  The package is then referred to the co mmercial registrar which, in turn, issues to 
applicants certain forms to be filled in.  These are then forwarded to the respective bank where 
fees are paid.  After printing and formal signing, the commercial registration is issued.  He also 
noted that “commercial registration” is a separa te procedure and different from registration as 
a “commercial agent”.  Registration as a commercial agent is not necessary for the right to import or export.”] 
27. [The representative of Saudi Arabia confirmed that from the date of accession Saudi 
Arabia would ensure that its laws and regulations relating to the right to trade in goods 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.  The 
Working Party took note of this commitment]  WT/ACC/SPEC/SAU/4/Rev.1 
 Page 13 
 
 
 Application of Internal Taxes  
28.  In response to questions from members of th e Working Party, the representative of Saudi 
Arabia stated that Saudi Arabia did not impo se a value added tax nor an excise tax upon imported 
products.  The representative of Saudi Arabia confirmed that in case internal taxes were 
introduced, Saudi Arabia would abide by its commitments under Article III of GATT 1994.  
29. A member of the Working Party asked whet her Saudi Arabia would abide by the non-
discrimination provisions of Articles I and III of GATT 1994 in relation to internal taxation 
from the date of accession.  The representative of Saudi Arabia replied that Saudi Arabia commits to abide by those provisions form the date of accession  The Working Party took note of this commitment. 
30. In response to further questions he noted that  Saudi Arabia applied an income tax to the 
income of foreign investors residents
.  However, salaries, wages and profits from portfolio 
investment are not subject to income tax.   Saudi nationals paid a "Zakat" tax on the value of assets. 
Some members of the Working Party requested fu rther information on the "Zakat" tax applied to 
Saudi Arabian citizens in lieu of the income tax a pplied to foreigners.  These members noted that it 
appeared that the "Zakat" and income taxes were applied in such a manner that foreign investors 
typically carried a higher total tax burden than Saudi Arabian citizens.  The representative of Saudi Arabia stated that the base for the collection of th e Zakat was broader than the base for collection of 
income tax from foreign partners.  The Zakat base  included capital, statutory reserves, circulated 
profits, adjusted profit, partners credit accounts of one  year or longer (treated as capital), loans from 
partners (treated as capital and a dditional financing for the company) and long term loans from other 
sources for the purpose of capital base expansion.  Since it was a religious tax, no exemptions were possible.  Zakat was applied at a flat rate of 2.5 per cent.
  Thus the Zakatable amount included other 
items over and above a share of profits, such as a share of capital, reserves and provisions, circulated 
profits and credit current account reduced by the shar e in the amount paid to acquire fixed assets.  In 
contrast, the tax base for foreign investors included on e item only, namely, net profit.  Hence, 
foreigners were not liable to tax until  the capital invested started to earn profit while the Saudi 
Zakatpayer becomes liable after th e passage of one year.  The ratio had no limits for Saudi 
citizens and could exceed 100 per cent.  Zakat was applied at a flat rate of 2.5 – 5 per cent, 
except for rain fed agricultural products and irri gated agricultural products for which the rate 
was 10 per cent and 5 per cent respectively.  While  Zakat iwa payable even in cases where there 
was a loss, tax was payable only when there was a net profit.  Further, losses could be carried 
forward over a number of years.  WT/ACC/SPEC/SAU/4/Rev.1 
Page 14  
 
 Import Regime
 
31. In response to a specific question questions , the representative of Saudi Arabia stated that the 
application of secondary and tertiary boycotts  on products of Israeli origin  had been terminated.  
removed in law and in practice.    
Customs Tariff  
32. The representative of Saudi Arabia provided me mbers of the Working Party with information 
on the Customs Tariff applied in Saudi Arabia.  
33. The representative of Saudi Arabia stated th at taking into account its own needs and the 
interests of members of the Working Party, his Go vernment had offered subs tantial bindings in its 
tariff.  [Following the completion of bilateral negotiations with WTO Members, the schedule of 
concessions and commitments on market access for goo ds of Saudi Arabia will be reproduced in 
Part I of the Annex to the Protocol of Accession of Saudi Arabia.] 
Other duties and charges  
34. The representative of Saudi Arabia confirmed that from the date of accession Saudi Arabia 
would levy no duties and charges on imports other th an ordinary customs duties and fees and charges 
for services rendered.  Any such charges applied to imports after accession would be in accordance 
with WTO provisions.  The Working Party took note of this commitment. 
35. [The representative of Saudi Arabia further c onfirmed that Saudi Arabia would not list any 
other charges in its Goods Market Access Sche dule under Article II:1(b) of the GATT 1994, binding 
such charges at "zero".] 
Import Licensing,  Quantitative import restrictions, including prohibitions, quotas and licensing 
systems  
36. In addition to information contained in the Memorandum on the Foreign Trade Regime, the 
representative of Saudi Arabia provided a detailed description of the import licensing procedures 
prevailing in Saudi Arabia in document WT/ACC/ SAU/30, and a list of restricted (banned and 
controlled) items in Saudi Arabia, together with  the justification for the measures in document 
WT/ACC/SAU/29/Add.3.  He also noted that a dditional information could be obtained from the 
concerned department or division of the respectiv e Ministry or from the Information Centre of the 
Ministry.  The information could also be obtained from the Chamber of Commerce and Industry.  He  WT/ACC/SPEC/SAU/4/Rev.1 
 Page 15 
 
 
 also noted that any person with a Commercial Re gistration (i.e. registration to do business), whether 
an individual or an entity, could apply for import licence. 
37. Some members of the Working Party request ed information on the proportion of Saudi 
imports subject to licensing.  In response, the repr esentative of Saudi Arabia stated that no statistics 
were available to answer that question.  
38. In response to further requests for information,  the representative of Saudi Arabia noted that 
decisions to not grant an import licence could first be appealed to the Minister of the concerned 
Ministry or to the head of the Ag ency concerned.  Any subsequent appeal would be to the Board of 
Grievances.  The Board of Grievances was composed  of a President, Vice-Presidents and Members.  
The President was appointed by and reported to th e King.  The Vice-Presidents and Members were 
appointed by Royal Decree on the recommendation of the President.  There were no time frames fixed 
for the hearing of appeals or handing down of d ecisions.  The Board of Grievances did supply written 
judgements to all parties to any appeal.  Those judgements included the reasons for the decision.   
39. The representative of Saudi Arabia confirmed that  in addition to the Ministry of Agriculture, 
Ministry of Commerce, Chivalry Club,  Ministry of Health, Ministry of Information, Ministry of 
Interior, Ministry of Industry and Electricity, an d Ministry of Petroleum and Natural Resources, the 
Ministry of Education (Department of Museums a nd Archaeology), the Ministry of Post, Telegraph 
and Telephone (PTT), and the National Commission for Wild Life Conservation and Development 
(NCWCD) and the Chivalry Club all had responsibilities concerning the approval of import 
licences.  He also confirmed that there were no subs tantive requirements to register with the Ministry 
of Commerce in order to import, although there was a requirement to obtain Commercial Registration 
for the carrying on of business, whether manufacturi ng, retailing, trading, or professional.   Any 
company, whether Saudi or foreign, which was commercially registered in the field of import trade could import goods without the need to get any furt her permission or authorization, except for items 
which require an import licence.   
40. In response to further questions, he noted that the Chivalry Club would automatic
ally grant an 
import licence for the importation of non-Arabian horses, after clearance by the Department of 
Animal and Plant Quarantine, within 30 days of receipt of a complete application.  In this 
connection, some members of the Working Party re quested additional information on the time limits 
for grant of other import licences.  These members noted, in particular, that Article 3.5(f) of the Agreement on Import Licensing provided that ordinar ily an import licence must be granted within 30 
days of receipt of a complete application.  These members noted that for some categories of goods, import licences took longer than 30 days, in partic ular, radio communication apparatus (one to two WT/ACC/SPEC/SAU/4/Rev.1 
Page 16  
 
 months) and  network equipment (s ix to twelve months).  These members noted that the importation 
of such products was also subject to approval by the Frequency Department of the Department of 
Post, Telegraph and Telephone.  In response, the representative of Saudi Arabia stated that the 
Frequency Department ordinarily completed its re view in one week.  If a product met the frequency 
and necessary technical specifications, the Licensing  Committee would ordinarily decide whether to 
grant an import licence within 30 days.   
41. In response to requests for information con cerning the fees payable for obtaining an import 
licence, the representative of Saudi Arabia stated th at there were no fees payable for the obtaining of 
an import licence.  Companies or persons wishing to import merchandise for display at a trade fair 
were granted import licences that permitted the import ation of all necessary samples, subject to the 
condition that the samples not be offered for direct sale.  
42. Some members of the Working Party requ ested information on the precise laws and 
regulations governing the time limits for issuing an  import licence.  In response, the representative of 
Saudi Arabia stated that there were no laws or administrative orders governing the issuing of import 
licences.  Average time periods for the issuing of  import licences were around 30 days.  In the event 
of an unsuccessful application for an import licence , the person requesting the licence could appeal 
the refusal to the Board of Grievances. 
43. Some members of the Working Party asked whether petroleum and natural asphalt were 
subject to import licensing and requested that Saudi  Arabia provide the justification pursuant to the 
relevant provisions of the WTO Agreement for th e maintenance of import licensing on those products. 
In response, the representative of Saudi Arabia st ated that petroleum and asphalt were subject to 
import licensing.  The need for those controls was un der review.   He stated that Saudi Arabia would 
ensure that by the time of accession, the regime re lating to those products was in conformity with 
WTO obligations.  
44. In response to questions from some members of the Working Party, the representative of 
Saudi Arabia stated that the import of fire extinguishers required a licence from the Ministry of Interior.  He also noted that high quality photocopiers required an import licence from the Public Security Department of Forgery.  This was beca use such photocopiers could produce extremely high 
quality reproductions of documents, making it hard to differentiate between the original and the 
photocopies of paper currency and official documen ts, certificates, passports, maps and stamps.  He 
also noted that burglar or fire alarms required an  import licence to prevent misuse by criminals or 
terrorists. For this reason import licences were on ly issued to government enterprises, public 
enterprises and firms or individuals who had a cont ract with the government to supply such security  WT/ACC/SPEC/SAU/4/Rev.1 
 Page 17 
 
 
 devices from inside the Kingdom or abroad.  So me members of the Working Party requested 
additional information on the justification for the import licensing requirements for security reasons.  
The representative of Saudi Arabia stated that those goods were subject to import licensing 
requirements for security reasons.  The measures we re necessary in order to prevent import and the 
misuse of the items by persons who could pose a secur ity risk.  The Ministry of the Interior was the 
agency that determined whether the importer posed a security risk or not.  The list of items subject to 
import licensing was under review, and in this c ontext he noted that the requirement for import 
licensing of fire fighting equipment had recently been  lifted.  That equipment could now be imported 
without a licence, following a customs examina tion to determine compliance with Saudi or 
international standards.   
45. Some members of the Working Party requested  information on the system for licensing the 
importation of agricultural machinery.  The repres entative of Saudi Arabia stated that the import 
licensing system for import of agricultural equipment was operated in order to administer a system of subsidies paid to importers of such equipment.  The import licence was required even if the importer 
did not intend to apply for a subsidy payment.   
46. Some members of the Working Party requested fu rther details of import restrictions on long 
life pasteurized milk in packing exceeding 1 litr e, (tariff item 0401.00.00).  In response, the 
representative of Saudi Arabia stated that the Kingdom of Saudi Arabia would
 remove d the ban on 
long life pasteurized milk upon its accession to the WTO , and the ban wo uld be  was replaced by 
tariffs.  He stated that the import ban on dates would be  was removed and converted to tariffs.   
47. In response to questions from some members of the Working Party, the representative of 
Saudi Arabia provided an Action Plan for the Im plementation of the Import Licensing Agreement in 
document WT/ACC/SAU/40.   
48.  [The representative of Saudi Arabia confirmed that Saudi Arabia would, from the date of 
accession, eliminate and shall not introduce, re-int roduce or apply quantitative restrictions on imports, 
or other non-tariff measures such as licensing, quotas, bans, permits, prior authorization requirements, 
licensing requirements and other restrictions having equivalent effect that cannot be justified under 
the provisions of the WTO Agreement.  Any furthe r amendments to the import licensing regime after 
accession would be fully in accordance with all re levant provisions of the WTO, including the 
Agreement on Import Licensing Procedures.  Sa udi Arabia would replace non-automatic import 
licensing with automatic import licensing for "milk for industrial use" within three years from the date 
of accession.  He further confirmed that any discr etionary authority permitting officials of the 
Kingdom of Saudi Arabia to suspend imports a nd exports or licensing requirements that could WT/ACC/SPEC/SAU/4/Rev.1 
Page 18  
 
 suspend, ban, 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, Import Licensing Procedures,  Safeguards and Technical Barriers to Trade.  
The Working Party took no te of these commitments.]
 
Customs Valuation  
49. Some members of the Working Party stated that  the system of valuation described in the 
Memorandum on the Foreign Trade Regime, in Annex 4 to document WT/ACC/SAU/4 and in 
document WT/ACC/SAU/18 did not appear to fully co mply with certain requirements of the Customs 
Valuation Agreement.  Some members requested th at a number of areas of the customs valuation 
regime receive further elaboration so that they were in conformity with  the WTO Agreement on 
Implementation of Article VII of the GATT 1994, its Interpretive Notes, and relevant decisions and 
declarations.  In particular, members noted that in  addition to problems related to  transparency or 
predictability, Saudi Arabia’s va luation system relied on the "nearest equivalent value" as an 
alternative to transaction value.  This could give customs officials excessively wide discretion in their 
determination of customs value of the imported goo ds.   In response, the representative of Saudi 
Arabia stated that although there were currently  some shortcomings in the system of customs 
valuation prevailing in Saudi Arabia, steps were be ing taken to bring the regime into conformity as 
soon as possible.  
50. Some members of the Working Party requested  information on how Articles 1:1(a)-(d) and 
Article 1:2 of the Customs Valuation Agreement con cerning the use of transaction value, and related 
party transactions were applied in Saudi Arabia.  In response, the representative of Saudi Arabia 
stated that the present system did not contain provisions giving effect to those provisions of the Customs Valuation Agreement.  In response to further questions, concerning Articles 2-7 of the 
Customs Valuation Agreement dealing with methods of  valuation alternative to transaction value etc. 
he noted that in general there were no similar pr ovisions in current Saudi Customs valuation law.  
There existed a valuation alternative to transaction va lue, e.g. the use of price lists for automobile 
imports.  To determine the customs value for new vehicles, the Customs authorities used the price 
paid or payable as shown on the invoices.  Howeve r, the customs value of used vehicles was derived 
from applying a schedule of depreciation to the origin al new price.  He noted in this connection that 
certain members of the WTO were using the Pr ice Lists for certain agricultural products.  
51. [Members responded that they did not see majo r barriers in this area to Saudi Arabia’s 
implementation of the Agreement upon accession.  Dr aft regulations had already been prepared, the  WT/ACC/SPEC/SAU/4/Rev.1 
 Page 19 
 
 
 legislative process described in the action plan  was well underway, and it seemed excessive that 
training and studying the implications of using the Agreement to value imports should require 
extensive transition.  Members also observed that the establishment of a computerized data base was 
not necessary for maintaining a WTO-consistent valuation system.] 
52. In response to further requests for information concerning the valuation of imported products, 
the representative of Saudi Arabia stated that when the value declared in the invoice was not 
acceptable to the Customs Department, such as when th e declared value was considered to be too low, 
the Customs Department referred to the values of identical or similar goods imported previously.  
Although Saudi Arabia currently did not use the valu es of the identical or similar goods in the same 
order specified in the Customs Valuation Agreement,  this did not mean that the price was selected 
arbitrarily.  Although the valuation system currently  in use did not provide to the importer certain 
knowledge of how the valuation of his goods was dete rmined, in most instances the system relies on 
the transaction value mentioned in the invoice.  He fu rther noted that as far as other valuation methods 
were concerned, the importer may not have preci sely knowledge of how the valuation of the goods 
was determined.  
53. In connection with Articles 8 (specifications of  permissible additions to the price paid or 
payable) and 14 (incorporation of the Interpretative Notes of the Agreement in domestic legislation) 
of the Customs Valuation Agreement and Decision 3.1 (concerning the treatment of interest charges)  
and Decision 4.1 (concerning the valuation of carrier  media bearing software), the representative of 
Saudi Arabia stated that Saudi Arabia’s valuati on system did not have pr ovisions similar to the 
Agreement.  Concerning Article 10:  confidential treatment of information;  although the Customs 
Regulations and Rules of Implementation did not contain a specific provision regarding maintaining 
confidentiality of information, a comparable provi sion was contained in 12/H of Chapter 2 of the 
Civil Service Law issued by Royal Decree 49 dated 10/7/1397H.  This required a government 
employee, who learnt  of confidential information in  his job, not to disclose that information, even 
after he left  government service.  This, of course, included Customs Department employees.   
54. Concerning Article 11 of the Customs Valuati on Agreement and the right of appeal to a 
judicial authority;  the representative of Saudi Arabia  stated that appeal rights for a relevant person 
before an independent judicial body (i.e the Boar d of Grievances) was guaranteed by Royal Decree 
190 dated 16 Dhu Al-Hujah 1409H.  Th is  applied to the Customs Depa rtment.   The requirements of 
Article 12 concerning publication of laws, regulations, and decisions were  satisfied by provision 65 of  
Royal Decree No. 425 dated 5/3/1372H, which require d that such information be published in the 
official newspaper  gazette Um Al-Qura along with all other government notices such as changes in WT/ACC/SPEC/SAU/4/Rev.1 
Page 20  
 
 rates of duty.  The representative of Saudi Arabia also noted that as Saudi Arabia was not presently 
applying the Agreement on Customs Valuation, it had no provisions corresponding to Article 14 and 
to Decisions 3.1 and 4.1.  These would be incorpor ated in Saudi law on customs valuation when Saudi 
Arabia would  implement the Agreement. 
55. Some members of the Working Party thanked th e representative of Saudi Arabia for this 
information, and asked when Saudi Arabia would bring its valuation system into line with the 
Agreement on Customs Valuation.  In response the representative of Saudi Arabia stated that Saudi 
Arabia had begun the process of adopting the provis ions of the Agreement on Customs Valuation and 
the incorporation of them into the Customs Rules and Regulations.  Although Saudi Arabia wished to 
adopt the provisions of the Agreement on Customs Valuation as swiftly as possible, it would not be 
possible to implement the Agreement from the date  of Accession.  Saudi Arabia would need a 
transition period.   
56. In document WT/ACC/SAU/28, the representative of Saudi Arabia proposed that the 
provisions of paragraphs 1 and 2 of Article 20 of the Agreemen t on Customs Valuation should be 
available to the Kingdom of Saudi Arabia.  In res ponse to requests that any requests for a transitional 
period be accompanied by a justification, the represen tative of Saudi Arabia stated that a transitional 
period would be needed to allow adequate time to  prepare new laws, new regulations, new guidelines 
and administrative procedures for implementing th e complex provisions of the Customs Valuation 
Agreement.  Saudi Arabia would also need adequate time to train the Customs staff, the importers and 
the customs clearing agents in the implications and application of the new laws, regulations and 
procedures made in accordance with th e Customs Valuation Agreement.   
57. Concerning the use of minimum values for customs purposes, the representative of Saudi 
Arabia stated that Saudi Arabia would wish to make a reservation under paragraph 2 of Annex III to 
the Agreement on Customs Valuation to continue  the use of minimum values for a handful of 
products now under this system.  This would be  necessary, because although Saudi Arabia would 
ultimately discontinue the system, it would need a transitional time for this purpose as it would have to study carefully the implications of the cha nge, and to devise procedures for checking practices 
which necessitate the use of minimum values.  The flexibility required would be needed for two years 
from the date Saudi Arabia starts applying the provi sions of the Customs Valuation Agreement.  In 
the interim, Saudi Arabia would undertake a careful st udy in the first year of implementation to devise 
procedures for discontinuing the minimum values. 
58. The representative of Saudi Arabia also noted  that Saudi Arabia would seek a reservation 
under paragraphs 3 and 4 of Annex III to the Customs Valuation Agreement.  The justification for that  WT/ACC/SPEC/SAU/4/Rev.1 
 Page 21 
 
 
 request was that because the Customs Administration of Saudi Arabia had not reached the level of 
sophistication and expertise of developed countries, it would not be possible for it to apply the 
relevant provisions of the Customs Valuation Ag reement before that date.  The reservation would 
continue to be applicable for an indefinite period.  In the interim, once Saudi Arabia started to apply 
the Customs Valuation Agreement, it would undertake studies to consider if it was feasible to lift the 
reservations. 
59. In response to requests for a precise indication of the transition periods needed by Saudi 
Arabia to ensure full conformity with the require ments of the WTO Agreement, the representative of 
Saudi Arabia stated that Saudi Arabia would need  a transition period to implement the provisions of 
the Agreement on Customs Valuation. In docum ent WT/ACC/SAU/38, the representative of Saudi 
Arabia provided members of the Working Party with a detailed plan on the work programme 
underway in the Kingdom designed to achieve  full compliance with the WTO Agreement on 
Implementation of Article VII of the GATT 1994 with in five years from the date of its accession to 
the WTO.  At a later stage, and in document WT/ACC/SAU/38/Rev.1, the representative of the 
Kingdom of Saudi Arabia presented a revised document describing the steps taken so far and the work 
planned to bring the Kingdom into full conformity with the Customs Valuation Agreement.  He noted 
that work was progressing smoothly and that the Kingdom would only require a small transition period. of approximately two years, i.e. th e Agreement would be implemented in full from 
1 January  2002.    
60. [The representative of Saudi Arabia stated  that the Kingdom of Saudi Arabia would 
implement the provisions of the WTO Agreement concerning customs valuation in full from 1 January 2002, [the date of accession to the WTO without recourse to any transition 
period] , 
including the Agreement on the Implementa tion of Article VII of the GATT 1994.  He also stated 
that the Kingdom of Saudi Arabia reserved the right to request a further transition period if 
needed.  In this regard, the Customs Law and implem enting regulations would fully reflect the 
requirements of Annex I of the Interpretative No tes of the Agreement on the Implementation of 
Article VII of the GATT 1994 and Decision 4.1 on the Valuation of Carrier Media Bearing Software 
for Data Processing Equipment.  The Working Party took note of this commitment.]  
Rules of Origin  
61. In response to requests for information, the representative of the Kingdom of Saudi Arabia 
stated that certificates of origin attested by the Saudi   Embassy or Consulate were necessary for 
importation of preferential trade items.  Where no Saudi Embassy or Consulate existed, such 
certificate would be attested by the Chambers of commerce in the exporting country.  Other WT/ACC/SPEC/SAU/4/Rev.1 
Page 22  
 
 requirements included minimum content from within the preferential system.   From 1996 all 
imports of expensive textile produc ts had been required to have the origin of the goods printed or 
stamped thereon with indelible print.  This requi rement was introduced to protect consumers against 
misleading or deceptive practices.  A textile product was deemed to be "expensive" depending on an 
analysis of factors such as the quality the brand na me, texture, design and the price relative to other 
fabrics.  Rules of origin for non preferential trade did not exist, but any future rules would be 
implemented in accordance with the WTO Agreement.  
62. [
The representative of Saudi Arabia stated th at, from the date of accession, Saudi Arabia's 
preferential and non-preferential rules of origin would comply fully with the WTO Agreement on 
Rules of Origin.  The requirements of Article 2( h) and Annex II, Paragra ph 3(d) of the Agreement 
would also be fully implemented prior to accession.  He also stated that in any event, from the date of 
accession, the Customs authorities would provide an assessment of the origin of the import upon the 
request of an exporter, importer or any person with  a justifiable cause.  Any request for such an 
assessment would be accepted even before trade in  the goods concerned began.  Any such assessment 
would be binding for three years.  The Wo rking Party took note of these commitments.]  
Anti-dumping, Countervailing and Safeguards  
63. Some members of the Working Party raised concerns regarding the law for the Protection 
and Encouragement of National Industry.  The rep resentative of Saudi Arabia stated that the 
law would be reviewed to ensure consistency with  WTO requirements by the date of accession.  
Members also  noted that Saudi Arabia did not currently have any trade remedies legislation 
permitting the imposition of anti-dum ping or countervailing duty nor the imposition of safeguard 
measures although it was in Saudi Arabia’s interests to develop such legislation .  Those members 
requested that Saudi Arabia undertake to not impo se such measures until appropriate WTO consistent 
legislation had been enacted.   
64. The representative of Saudi Arabia stated that  after its accession to the WTO, Saudi Arabia 
would not impose anti-dumping, countervailing or  safeguard measures until appropriate WTO 
consistent legislation had been enacted.  The Working Party took note of this commitment.  
65. [The representative of Saudi Arabia said that  Saudi Arabia would not apply any anti-
dumping, countervailing or safeguard measure to  imports from WTO Members until it had notified 
and implemented appropriate  laws in conformity with the provisions of the WTO Agreements on the 
Implementation of Article VI, on Subsidies and Countervailing Measures and on Safeguards.  He 
confirmed that Saudi Arabia would ensure that such  legislation would be in full conformity with the  WT/ACC/SPEC/SAU/4/Rev.1 
 Page 23 
 
 
 relevant WTO provisions, including Articles VI  and XIX of the GATT 1994 and the Agreement on 
the Implementation of Article VI, the Agreemen t on Subsidies and Countervailing Measures and the 
Agreement on Safeguards.  After such legislation was implemented, Saudi Arabia would only apply 
any antidumping duties, countervailing duties and saf eguard measures in full conformity with the 
relevant WTO provisions.  The Working Party took note of these commitments.]  
EXPORT REGULATIONS 
Export Restrictions 
66. Some members of the Working Party  enquired whether the Kingdom of Saudi Arabia 
maintained any export controls.  In response, th e representative of Saudi Arabia stated that Saudi 
Arabia maintained export bans on the exports of some items such as of date seedlings, breeding 
horses, wheat and wheat flour .  Some members of the Working Party asked whether Saudi Arabia 
intended to remove those bans prior to its accessi on to the WTO. In response, the representative of 
Saudi Arabia stated that there were no bans on th e export of wheat and wheat flour, unless the wheat 
and wheat flour had been subsidized.  He further a dded that Saudi Arabia banned the export of date 
seedlings and breeding horses because the local breeds and varieties of these two items were pure and 
rare. He added that upon accession to the WTO, Sa udi Arabia would do whatever was required under 
applicable WTO rules.   
67. [The representative of Saudi Arabia confirmed that from the date of accession Saudi Arabia  
would ensure that its laws, regula tions 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 oblig ations.  The Working Party took note of this 
commitment.]  
68. [The representative of Saudi Arabia also c onfirmed that any export control requirements 
remaining in place on the date of accession would be  fully consistent with WTO provisions, including 
those contained in Articles XI, XVII, XX and XXI  of the GATT 1994.  The Working Party took note 
of this commitment.]  
Export Duties  
69. Some members of the Working Party requested information on export duties applied by Saudi 
Arabia.  Those members noted that the export duties applied by Saudi Arabia appeared to be imposed 
only for revenue purposes and would have trade distor ting effects.  In response, the representative of WT/ACC/SPEC/SAU/4/Rev.1 
Page 24  
 
 Saudi Arabia stated that Article XI of the GATT 1994 expressly permitted the imposition of export 
duties, and did not restrict the right to impose such duties.  Export duties applied only to untanned 
hides and skins, falling under HS No. 4101, 4102 and 4103.  The rate of export duty was Saudi 
Riyals 2000 per ton . 
70. Some members of the Working Party requested information on the pricing of certain 
feedstock, in particular, methane, ethane, butane, pr opane and natural gas or liquified petroleum gas.  
In response, the representative of the Kingdom of Sa udi Arabia noted that pricing for methane and 
ethane was quite different from  to the pricing of butane and propane and natural gasoline.  Methane 
and ethane in the Gulf region had no international reference price.  There were no exports of methane 
and ethane from Saudi Arabia, due to the high  costs of liquefying, transporting and regasifying such 
gases.  Previously, methane and ethane had been burnt as waste products.  Recently, it had been 
decided to make methane and ethane available to all interested users (whether Saudi or non Saudi) at a 
price of US$0.5
  US$0.75  per million BTU.  Methane and ethane were used by many industries and 
sectors, including power companies, desalination plants, cement manufactures and petrochemical plants.   
71. He further noted that for bu tane, propane, natural gas or gasoline NGLs LPG
, the Council of 
Ministers Resolution of December 1992 set the price of  those gases lower than the export price.  This 
was done to take account of the costs associated with NGLs LPG  exports to world markets including 
refrigerating, storage, mooring and marketing.  The gases were available to all industries and all users 
within the Kingdom whether Saudi or non-Saudi en terprises.  All other energy prices including naphta 
were priced at arms length.  There were no speci fic discounts. Butane, propane and natural gas was 
made available to industrial consumers in Saudi Ar abia at a price 30 per cent lower than the lowest 
export price charged for those product.  He noted that heavy  naphta was not subject to any discount 
and was priced at the prevailing international price.   
72. He further noted that there was no discrimina tion between wholly owned or partly owned 
Saudi or totally foreign owned enterprise in terms of access to those gases.  Once a project had been licensed in Saudi Arabia, whatever the compositi on of its ownership, it was entitled to available 
supplies of those raw materials at the prices indicat ed.  Users were free to use those domestically 
available materials or resort to other materials if they so decided. 
73. In response to questions from some members of the Working Party, the representative of 
Saudi Arabia noted that the discounted prices for cer tain feedstocks were only available to users 
resident in the Kingdom.  He added that no other su pport, subsidies or pricing had been approved or  WT/ACC/SPEC/SAU/4/Rev.1 
 Page 25 
 
 
 sanctioned for actual projects involving the creati on of production capacity for refined petroleum and 
petrochemical products.   
74. The representative of Saudi Arabia confir med that Saudi Arabia did not maintain 
subsidies including export subsidies which met the definition of a prohibited subsidy, within the 
meaning of Article 3 of the Agreement on Subsidies and Countervailing Measures and that it would not introduce such prohibited subsidies in  the future.  The Working Party took note of 
this commitment. 
INTERNAL POLICIES AFFECTING TRADE IN GOODS 
Industrial Policy, Including Subsidies
 
75. In response to requests for information concer ning interest free loans provided by the Saudi 
Industrial Development Fund, the representative of  Saudi Arabia stated that companies with  wholly-
owned  foreign companies  shareholders  were eligible for a loan of up to 50 per cent of the project cost 
if Saudi nationals held 50  per cent of the shares.  If the Saudi share was less than 50  per cent, then 
financing woul d be granted at a proportionally reduced level.   The representative of Saudi Arabia 
stated that the loan programme conducted by th e Saudi Industrial Development Fund was entirely 
consistent with the GATT 1994 and the WTO Agreem ent on Subsidies and Countervailing Measures.  
The loans were not contingent upon export performan ce nor were they contingent upon the use of 
domestic over imported goods.  The decision to provi de a loan was made on the basis of the facts 
appropriate to that particular case within the para meters of the Saudi Industrial Development Fund 
Law.  Article 2 of the Law provided that the F und could provide medium or long term loans to 
(1) new industrial enterprises established in Sa udi Arabia, and (2) existing private industrial 
enterprises for the extension of their activities or the replacement of their equipment and introduction 
of modern methods thereto.  Article 4 of the Law stated that the Fund should carry out a full evaluation of the economic benefits of the enterprise required to be financed, taking into consideration 
the soundness of its management in order to ascerta in the benefit of the industrial enterprise from 
economic, financial and technical aspects.  In additi on, the Fund was required to examine whether the 
financing required for the whole of the enterpri se had been reasonably obtained and whether the 
volume of the Fund’s aid represented a reasonable pe rcentage of the total financing needs of the 
enterprise, and the Fund was required to obtain su fficient financial guarantees for the financing given 
by the Fund.   
76. The representative of Saudi Arabia confir med that any subsidy programmes would be 
administered in conformity with the Agreeme nt on Subsidies and Countervailing Measures and WT/ACC/SPEC/SAU/4/Rev.1 
Page 26  
 
 that all necessary information on  programmes be notified, if such exist, would be provided to 
the Committee on Subsidies and Countervailing Me asures in accordance with Article 25 of the 
Agreement upon entry into force of Saudi Arabia’s Protocol of Accession.  The Working Party 
took note of this commitment.  
Technical Barriers to Trade
 
77. The representative of Saudi Arabia provided the Working Party with information on technical 
standards and its International Conformity Certification Programme (ICCP) in documents 
WT/ACC/SAU/21, 26, 29, 34, 36, 37 (Revised Comp rehensive Procedures and Guidelines concerning 
the ICCP) and WT/ACC/SAU/41 (Action Plan for th e Implementation of the TBT Agreement).   
78. In response to questions from some members of the Working Party, the representative of 
Saudi Arabia stated that importers in Saudi Arab ia were required to comply with Saudi law which 
required all products, imported as well  as domestic, to be in conform ity with Saudi standards.  Unless 
specified otherwise, compliance with Saudi sta ndards was an implied condition of any contract 
between buyer and seller.  Saudi Arabia's standa rds were internationally harmonized to the most 
feasible degree possible, and Saudi specific standards were only adopted in cases where the international standards would be an ineffective or inappropriate means for the fulfilment of the 
legitimate objectives pursued because of Saudi Ar abia's fundamental climatic, geographical or 
technological problems, as allowed under TBT Agreem ent Article 2.4.  Consequently, Saudi Arabia 
considered that the use of a presh ipment inspection scheme to verify conformity to Saudi standards 
met the criteria of the PSI Agreement Article 2.4 and footnote 2. 
79. In response to questions concerning the confor mity of Saudi technical standards with the 
international norms, the representative of Saudi Arabia  stated that deviation of Saudi requirements 
from other national standards due to Saudi Arabia ’s fundamental climatic , cultural and national 
security specific conditions rendered ISO 9001 alone in adequate to provide sufficient confidence in 
the quality, safety and conformity of goods.  In this  connection, he noted that Saudi Arabia was a 
member of ISO, IEC, OIML and CAC.  All Saudi standards were notified to all other members of 
those international organisations.  A high percentage  of Saudi standards used international standards 
and other widely accepted national standards as refe rences.  He provided members of the Working 
Party with a list of SASO standards that had b een based upon CODEX standards, together with a 
complete list of the 1,323 Saudi standards including  a cross-reference to the international standards 
adopted in their entirety as SASO standards (in document WT/ACC/SAU/34).    WT/ACC/SPEC/SAU/4/Rev.1 
 Page 27 
 
 
 80. In response to further questions he noted that  type testing was the ideal additional assuring 
factor, particularly when it was the most widely used and accepted method to verify the conformity of 
the design as required under Module H.  Nevertheless, in lieu of type testing, the ICCP would accept 
Module H plus additional documentation which dem onstrated that the Saudi requirements were 
typically known, understood and taken into account by the manufacturer in all phases within this 
system, from contract review through design, production, inspection, testing and acceptance. 
81. Some members of the Working Party stated th at the recent exemption of GCC members from 
the ICCP and its implied recognition of equivalenc y of all GCC members' inspection, enforcement, 
and compliance to relevant elements of GCC and/or  SASO standards raised questions under Article 4 
of the SPS Agreement and the transparency provisi ons of the WTO.  Those members asked whether 
GCC member states were obliged to adopt the GCC standards in full or in part.  In response, the 
representative of Saudi Arabia stated that GCC Members were not exempted from the ICCP.  He 
added that Article 5.4 of the Regulations of th e "Standardization & Metrology Organization for GCC 
Countries" stipulated that mandatory Gulf Standa rds were adopted by cons ensus of all members, 
while voluntary or guideline standards were adopted  by majority.  Some members of the Working 
Party also requested a list of GCC member countries that had officially adopted and incorporated 
SASO developed standards, by product category, (in fu ll or in part) into their national standards.  In 
response, the representative of Saudi Arabia pr ovided a list of SASO st andards which had been 
adopted as GCC Standards and thereby incorporated  as national standards in other GCC Countries in 
Annex III to WT/ACC/SAU/29. 
82. Some members of the Working Party requested a lis t of the standards deemed to be equivalent 
to Saudi standards.  In response, the representativ e of Saudi Arabia stated that the Saudi Arabian 
Standards Organization had published the list of st andards, and in this connection referred to the 
information in document WT/ACC/SAU/15.  He furt her noted that Saudi Arabia's standards were 
internationally harmonized as far as possible.  Ce rtain Saudi standards had a corresponding ISO or 
IEC equivalent which was indicated in the published list of SASO standards.  Other Saudi standards 
used international standards or other recognized nati onal standards as a reference.  He noted that a 
predetermination of the equivalency of such sta ndards was not feasible, due to the diversity and 
incorporation of the national requirements and devi ations of various countries.  The registration 
process under ICCP provided a mechanism for the case by case evaluation and determination of equivalency of the standards to which compliance w as declared by exporters, or recognition of the 
relevant elements in the standards that partially sa tisfy the requirements of the Saudi standards.  As 
additional standards were evaluated progressively, a data base was established and referred to in any 
successive assessment of equivalency. WT/ACC/SPEC/SAU/4/Rev.1 
Page 28  
 
 83. Some members of the Working Party requested that the Government of Saudi Arabia publish 
draft standards in a single official journal or other publication that available to the general public, and 
other interested parties.  In response, the representativ e of Saudi Arabia stated that this would be done.  
Some members also requested further information on the manner in which SASO developed technical 
standards.  In response, the representative of Saudi Ar abia stated that standard s considered to be vital 
for the legitimate objectives of safety, health, … etc. and which were of concern to a wide spectrum of 
interested parties and economic sectors were refe rred to "technical committees".  However, recent 
policy within SASO had been to refer most sta ndards to technical committe es irrespectively.  All 
parties concerned with the subject matter of th e draft standard were normally represented on the 
relevant "technical committees" as active members;  they include pertinent governmental, academic, 
industry and trade sectors.  For this reason, only one draft circulation period was necessary to provide adequate opportunity for comments by other interest ed parties.  In case of development of draft 
standards by SASO’s technical staff, the first draft circulation period provides the opportunity for 
comments raised by all concerned parties to be ta ken into consideration in the preparation of the 
second draft.  He also provided the Working Party with a copy of the procedures for the development 
of SASO standards in Annex IV to document WT/ACC/SAU/29. 
84. Following further comments on the draft Co mprehensive Guidelines and Procedures 
concerning the ICCP, some members of the Worki ng Party asked whether Saudi Arabia envisaged 
making further changes to the ICCP prior to WTO accession.  In response, the representative of Saudi 
Arabia stated that after careful analysis and c onsideration of the comments made by WTO Members, 
further revisions were made, as set out in documen ts WT/ACC/SAU/34, 36, and 37.  Saudi Arabia did 
not foresee the need for any exemption or transitio n periods in relation to any WTO provisions in 
connection with the ICCP.  Nevertheless, Saudi Ar abia reserved the right to seek such exception at 
any time during its accession negotiations, should the need arise.  
85. In response to further questions, the representa tive of Saudi Arabia stated that customs 
valuation was not assessed under the ICCP.  He noted  also that appeals procedures were included as 
an Appendix to the ICCP Guidelines and follow ing the suggestions of WTO Members had been 
revised to include recourse to independent review procedures in accordance with Article 4 of the PSI 
Agreement.   
86. Some members of the Working Party asked wh ether testing laboratories and conformity 
assessment bodies could be accredited by the authoriti es administering the ICCP.  In response, the 
representative of Saudi Arabia stated that Saudi Arabia recognized conformity assessment bodies in other countries via acceptance of accreditation as an indication of adequate competence, and hence as  WT/ACC/SPEC/SAU/4/Rev.1 
 Page 29 
 
 
 an eligibility criteria for approval. In other co untries that did not have accreditation bodies, 
recognition of conformity assessment bodies was achi eved by extending invitations to all trading 
partner countries to nominate their own laborat ories for approval under their governments' 
responsibility.  Any required formalities were kept  to the minimum level necessary to achieve the 
objectives of the Programme. In fact, the procedur es were fully streamlined as evidenced by the 
virtual non-existence of delays or complaints by exporters.  
87. He later added that the approval procedure was very simple and straight forward.  
Laboratories seeking SASO approval were require d to complete the "SASO/ICCP Laboratory 
Application Form" (which was supplied to me mbers of the Working Party  in document 
WT/ACC/SAU/34).  He noted that the form provide d SASO with information about the accreditation 
that the laboratory already had and the type of I CCP Regulated Products that it had the capabilities to 
test in whole or in part.  The information was ev aluated and verified and the laboratory was approved 
accordingly.  In countries that did not have Na tionally Recognized Laboratory Accreditation Bodies 
that accredited laboratories in accordance with ISO Guide 25, a higher degree of scrutinizing was 
conducted in order to gain assurance at the laborator y's competence.  There were no costs involved for 
laboratories seeking SASO approval. 
88. Some members of the Working Party requested additional information on the possible 
cancellation of certificates of conformity in the event that products enjoying the benefit of a certificate 
of compliance were found to be non-compliant.  The re presentative of Saudi Arabia stated that in such 
a case Saudi Customs would withhold the certif icate of compliance number, and suspend the 
certificate of compliance.  Thereafter, Customs would notify SASO and the manufacturer.  An expedient investigation was then carried out and a ppropriate action taken on the basis of the findings.  
Depending on the severity, frequency, and cause of th e discrepancy, appropriate action could include 
suspension or withdrawal of the Type Approval Li cence.  The action taken was always proportionate 
to the seriousness of the facts at hand on a case by case basis.  Suspension (which may be temporary) 
or withdrawal of the Licence was only a possib ility in extreme cases, such as fraud or material 
inaccuracy. 
89. Some members of the Working Party asked whet her certificates granted by other national or 
international certification bodies were taken into  consideration by the ICCP Regional Licensing 
Centers.  In response, the representative of Saudi Arab ia stated that test reports or certificates issued 
by accredited bodies for the regulated product under another national or international conformity 
assessment or certification scheme could be submitte d by exporters as documents substantiating their 
compliance.  Full recognition was duly given to those reports/certificates in so far as they satisfy the WT/ACC/SPEC/SAU/4/Rev.1 
Page 30  
 
 Saudi requirements.  Where the full Saudi requireme nts were met, the role of the ICCP Regional 
Licensing Center would be limited to evaluation, ve rification, administration, issuance and validation 
of the confirming Statement of Registration or Ty pe Approval Licence.  The SASO Country Office 
would still carry out the required PSI associated with  Registration and issue the final Certificates of 
Conformity.  For products holding SASO Type Appr oval Licence, certificates of conformity could be 
issued by the manufacturers themselves.  Th is applied to all products and countries. 
90. In response to the above explanations and cl arifications provided by the representative of 
Saudi Arabia, members of the Working Party requested  that Saudi Arabia provide a description of the 
steps being taken to ensure full implementation of th e Agreement on Technical Barriers to Trade.  In 
response, in document WT/ACC/SAU/41, the represen tative of Saudi Arabia provided the Working 
Party  with a comprehensive Action Plan for th e Implementation of the WTO Agreement.  The 
representative of Saudi Arabia noted that the Action Plan cross-referenced the various requirements of 
the TBT Agreement, and described the existing prov isions or practices in Saudi Arabia and also 
described any planned improvements, including th e enactment of implementing legislation.  The 
Action Plan also made clear that any remaining ga ps in legislation and practice would be addressed 
through the issuing of a Comprehensive Directive by the SASO Board of Directors (chaired by the 
Minister of Commerce).  That Comprehensive Direc tive would be issued sufficiently in advance of 
the accession of Saudi Arabia so that it would be in full conformity with the requirements of the TBT Agreement upon accession (if not earlier).   
91. [
The representative of Saudi Arabia stated that Saudi Arabia would comply with all 
obligations under the WTO Agreement on Technica l Barriers to Trade from the date of accession 
without recourse to any transition period.  The Working Party took note of this commitment.]  
Preshipment Inspection  
92. Some members of the Working Party stated that the ICCP program mentioned above operated 
as a PSI scheme.  They noted that although most of the requirements of the Agreement on Preshipment Inspection appeared to have been comp lied with, some elements of the ICCP continued 
to raise concerns.  Some members  of the Working Party expressed concern that the ad valorem  fee 
charged for conformity assessment was not consistent with the requirements of Article VIII of the GATT 1994.  In response, the representative of Saud i Arabia stated that Article VIII of GATT 1994 
aimed to ensure that fees did not include incremen tal charges imposed by Governments on top of the 
cost of services rendered.  The ICCP fees were paid  in their entirety by exporters directly to the 
entities contracted by SASO to cover actual inspec tion, registration licensing and certification services 
rendered only. No part of the fees was paid or allo cated to SASO or any other Government Body, and  WT/ACC/SPEC/SAU/4/Rev.1 
 Page 31 
 
 
 thus no protection to domestic indus try was afforded nor taxation levied.   He added that the fees 
charged were not required to equate exactly with  the exact cost of services rendered; a degree of 
reasonable approximation  was allowed. Global PSI  Programmes were utilised by 33 WTO Members, 
and ad valorem  was the consistently predominant fee scheme prior to the PSI Agreement.  Since the 
PSI Agreement did not specifically address the issue of fees, this implied the acceptance, versatility 
and legitimacy of the prevailing ad valorem  method, and affirmed its c onsistency with the original 
GATT 1994 Article. Otherwise, the 33 WTO Members would be in direct violation of the WTO 
Agreement.  
93. He further added that the application of ad valorem  PSI fees by WTO user Members of PSI 
Programmes has not been raised as the subject of dis pute at the WTO to date.  He added that the PSI 
Agreement further acknowledged th at Governments normally contr acted PSI Programmes to PSI 
Entities as Saudi Arabia had. Fees required by all reputable PSI Entities (IFIA members) for 
delivering professional global PSI services were based on the ad-valorem  scheme. Saudi Arabia was 
not operating in a vacuum and c ould not unilaterally impose on the PSI industry an entirely odd 
scheme contrary to the practice prevailing throughout  that industry.  Nevertheless, Saudi Arabia had 
succeeded in introducing reasonable modifications to the fixed ad valorem  method by adopting a cost 
responsive graduated percentage of FOB fee stru cture which was amongst the lowest in the world 
coupled with shipment aggregation, resulting in a mu ch higher degree of approximation of the cost of 
services as well as higher equitability. Saudi Arabia ha d further made adjustments to situations where 
a disparity existed between the cost of PSI servi ces and the percentage of FOB value of the product 
e.g. the fees for inspection of cars had a maximum ceiling of US$48.00 per car. 
94. He further added that if a consensus of WTO Members determined that the ad valorem  
scheme was not appropriate, and if an amendment was made to the existing PSI Agreement prescribing an alternative fee scheme, Saudi Arabia would be ready to follow the course of prevailing 
international practice and comply accordingly.  He also noted that any unfavourable consideration of 
its ICCP Regime on grounds of its inspection fee stru cture would be discriminatory in nature, in light 
of the WTO’s acceptance of some Members’ application of the fixed ad valorem  scheme.    
95. [
The representative of Saudi Arabia stated th at from the date of accession to the WTO Saudi 
Arabia would ensure that the requirements of the Agreement on Preshipment Inspection were met in 
full.  He further confirmed that Saudi Arabia w ould ensure that the opera tions of any preshipment 
inspection companies retained by Saudi Arabia  met the requirements of the WTO Agreement, 
including the establishment of charges and fees c onsistent with Article VIII of the GATT 1994, and 
would comply with the due process and transpar ency requirements of the WTO Agreements, in WT/ACC/SPEC/SAU/4/Rev.1 
Page 32  
 
 particular Article X of the GATT 1994, and the Ag reement on the Implementa tion of Article VII of 
the GATT 1994.  The Working Party  took note of these commitments.]
 
Sanitary and Phytosanitary Measures  
96. In response to requests for information, the re presentative of Saudi Arabia supplied detailed 
information on the Saudi Arabian Sanitary and Ph ytosanitary regime in document WT/ACC/SAU/17.  
In addition, he also submitted information on the shelf life of food products in document 
WT/ACC/SAU/27.   
97. The representative of Saudi Arabia stated that  the legal basis for sanitary and phytosanitary 
requirements in Saudi Arabia was the Royal Decree number M/10 on 3/3/1392 H developed by the 
competent standardization body (i.e. Saudi Arabian Standards Organization, SASO).  Saudi standards 
covered sanitary requirements for food products by means of the following measures:   
 (i) measures following the standards and guidelines of Codex Alimentarius; 
 (ii) measures not covered by the standa rds and guidelines of Codex Alimentarius 
were based upon scientific studies or the most appropriate measures of other WTO 
Members. 
98. In addition, the representative of Saudi Arabia stated that the veterinary quarantine bylaw 
issued by Decree of the Council of Ministers number 208 dated 26/1/1396 H covered sanitary and 
veterinary requirements and measures pertaining to  animals and animal products conforming to the 
ruling of the International Zoosanitary Code speci fying the regulations recommended for international 
trade with regard to animals and animal products is sued by the Office Intern ational des Epizootics.  
He noted also that the agricultura l quarantine bylaw issued by the Decree of the Council of Ministers 
number 207 dated 26/1/1396 H set out requirements and phytosanitary measures conforming to the 
rules issued from ICCP initially based on FAO pub lications.  Periodic preventive health circulars 
issued by the Ministry of Health pursuant to the weekly epidemiological circular issued by the WHO 
were also concerned with sanita ry and phytosanitary measures. 
99. In response to further requests for information, the representative of Saudi Arabia stated that 
sanitary and quarantine measures for animal heal th, living plants and seeds, measures for the 
prevention of epidemic diseases spread and the c ontrol on the use of veterinary medicines and 
pesticides were administered by the Ministry of Agriculture and Water, as well as the Ministries of 
Commerce and Municipalities.   Sanitary measures for fresh vegetables and fruits were governed by 
SASO standards and applied by the Ministry of Agriculture and Water.  When no approved  WT/ACC/SPEC/SAU/4/Rev.1 
 Page 33 
 
 
 international standards applied to these produc ts, the Kingdom of Saudi Arabia approved the 
standards applied in EC States and Members of th e WTO.  Standards concerning sanitary measures 
for food commodities (meat, meat products and pro cessed foods) were imposed by SASO but applied 
by the Ministries of Industry and Commerce on the locally made products, and by the Ministry of Commerce on imported products.  The Ministry of M unicipalities participated in internal control of 
products in the markets which were mainly cont rolled by the Ministry of Commerce.  Measures 
relating to effects on the human health and its rela tion with  animal sanitary and phytosanitary and 
food safety were imposed by the Ministry of Hea lth through the issuing of periodic preventative 
circulars to inform and caution other concerned bodies about relevant risks. 
100. He further noted that sanitary measures of Saudi Arabia were consistent with the SPS 
Agreement and also with the recommendations and guidelines issued by international and regional 
organizations.  Saudi Arabia was a permanent and act ive member in the international organizations on 
plant and animal regulations, including FAO and the International Office of Epizootics (IOE).  Saudi 
Arabia's SPS measures did not arbitrarily or unjust ifiably discriminate between different countries 
where identical or similar conditions prevail.  Also  they did not discriminate between the territory of 
Saudi Arabia and other countries where identical or similar conditions prevaile d.  Saudi Arabia's SPS 
measures were not applied in a ma nner which constitutes a disguised restriction on international trade. 
101. In response to requests for information on the transparency of Saudi Arabia's SPS measures, 
the representative of Saudi Arab ia stated that Saudi Arabia's  SPS measures were published in 
advance.  The Kingdom of Saudi Arabia had an established system for informing governments and 
other standards organizations of changes, and fu ll sets of guidelines detailing all requirements were 
freely available to any interested parties  Saudi Arabia's SPS measures and requirements were notified 
to the Embassies in the Kingdom and to Saudi  Chambers of Commerce.   
102. Some members of the Working Party stated that  the information on Saudi Arabia's sanitary 
and phytosanitary measures gave a good overview of the regime.  They sought confirmation that 
measures were based on risk assessments carried  out in accordance with Article 5 of the SPS 
Agreement.  In response, the representative of Sa udi Arabia confirmed that Saudi Arabia’s SPS 
measures conformed to all standards, guidelines or  recommendations issued by the international 
bodies specifically designated by the SPS Agreem ent i.e. Codex Alimentarius Commission, 
International Office of Epizootics and International Plant Protection Conventions .  Saudi Arabia was 
a member of all three organizations.  (Saudi Arabia was a member of all three organizations).
  In 
accordance with Article 3.2 of th e SPS Agreement, these SPS measures were fully consistent with the 
SPS Agreement.  For SPS measures related to ri sk assessment not covered by the above three WT/ACC/SPEC/SAU/4/Rev.1 
Page 34  
 
 international bodies (such as microbiological risks and shelf life of food products), Saudi Arabia 
relied on scientific studies, guidelines and recommendations either carried out by itself in limited 
cases or by specialized internationally accepted research institutes, universities or scientific 
references.  The appropriate level of protection ad opted by Saudi Arabia was consistent with the 
guidelines and recommendations issued by these inte rnationally recognized bodies and Saudi Arabia 
had thus taken into account the objective of minimi zing negative trade effects.  He confirmed that 
Saudi Arabia's SPS measures were based on risk assess ment in accordance with Article 5 of the SPS 
Agreement. 
103. Some members of the Working Party identified certain possible areas of inconsistency with 
the requirements of the SPS Agreement, such as the Council of Ministers Resolution No. 207 
(26.1.1396H) "Agricultural Quarantine Regulations" re quirement in Article 6 that products be free of 
all weed seeds, regardless of whether such weed  seeds were quarantine significant, in accordance with 
relevant international guidelines.  Some members also noted that the Council of Ministers Decree 
No. 208 (26.1.1396H) "The Statutory Instrument of th e Veterinary Quarantine", Article 3 stated that 
"no animal may be admitted ... from any country th at was infected with any epidemic disease ...". 
These members were of the view that this requirement was inconsistent with Article 6 of the SPS 
Agreement.  In response the representative of Sa udi Arabia stated that upon  accession, the Kingdom 
of Saudi Arabia would comply with the releva nt WTO obligations.  In response for further 
information concerning the importation of seeds, he noted that there was no fee charged for the 
inspection of seeds.  The seeds were first subject to  a visual examination to check for impurities and 
to ensure that the phytosanitary information in the import documents was correct.  Thereafter samples 
of the seeds were sent to laboratories to check for aflatoxins.   
104. Some members of the Working Party stated that certain laws, such as the "Approval of 
Importing Alfalfa and Vegetable Seeds from Non- Arab Countries", and "Approval of Importing 
Flower and Forage Crop Seeds from Non-Arab Countries" appeared to only apply to "non-Arab" 
countries, which suggested problems in relation to the consistency of these regulations with the 
principle of most-favoured-nation treatment.  In r esponse to further questions, the representative of 
Saudi Arabia noted that all regions of a particular country were subject to the same sanitary and 
phytosanitary requirements.  Some members of the Working Party stated that position appeared 
inconsistent with the SPS Agreement’s requireme nt that, in applying SPS measures, WTO Members 
recognize "regional conditions" affecting human, animal and plant health risks.  In response, to these 
and further concerns expressed by Working Party me mbers about particular regulations and practices 
in the Saudi Arabian SPS regime, the representative of Saudi Arabia stated that those regulations 
would be reviewed.   WT/ACC/SPEC/SAU/4/Rev.1 
 Page 35 
 
 
 105. Some members of the Working Part y noted that the time limits relating to shelf life in Saudi 
Arabia appeared to be unduly short.  In response, the representative of Saudi Arabia stated that all 
Saudi Arabia’s shelf life determinations were scien tifically based on investigations carried out by 
Saudi Arabia itself and on international and other c ountries’ national standards, scientific studies and 
reports conducted/issued by specialized internationa lly reputable research institutes and universities, 
and international scientific references.  The final determination of shelf life was based on studies for 
which "the stated storage conditions" most clo sely resembled Saudi Arabian conditions. These 
conditions had been thoroughly investigated and surveyed by Saudi Arabia in the report entitled 
"Proceedings of Symposium on the Transportation,  Handling & Storing of Food Products in the 
Kingdom, Part I and II  dated 26-28 February 1989".  In this connection, he noted that Codex defined 
"Use-by-Date" as "the date which signifies the end of the estimated period under any stated storage 
condition after which the product pr obably will not have the quality attributes normally expected by 
the consumers.  After this date, the food should not be  regarded as marketable".  He further added that 
the term "unacceptable to the consumer" and "unfit for human consumption" respectively 
corresponded to, and were self evident from the above definition.  He further added that Saudi Arabia 
relied for the determination of the shelf life of food products on available scientific studies by 
specialized, and internationally recognized bodies an d on references, based on research conducted for 
academic or industrial/commercial purposes.  The fact  that part of this research was conducted by 
manufacturers demonstrated that Saudi Arabia took into consideration differences in manufacturing 
and packaging processes.  This wide spectrum of scientif ic basis did not affect Saudi Arabia's right to 
engage in shelf life determination as an SPS m easure for perishable food products and as a TBT-
technical regulation appropriate to Saudi Arabia's cl imatic conditions for shel f stable food products.   
106. In response to further questions he noted that  manufacturer determined shelf life that was 
followed in other countries were neither uniform nor  could be considered as official SPS measures by 
governments.  Nevertheless, shelf life periods of  perishable food products were not imposed 
unilaterally, but rather adopted in accordance with th e same open process applicable to standards, i.e. 
through technical committees entrusted with the preparation of the standard whose diversified 
membership includes representatives of the industr ial and commercial sectors.  These members had 
the opportunity to influence the decision on shelf life determination and insure its responsiveness to 
the needs of the industry, not to mention the pe riod afforded for consultation and comment by any 
interested parties.  In addition, SASO admi nistrative procedures and directives provided the 
opportunities for manufacturers to submit at any time  the scientific basis for their own determined 
shelf to SASO for evaluation.  If those manufacturers could demonstrate objectively that their shelf 
life periods were appropriate to Saudi Arabia's  level of SPS protection as well as the food quality 
criteria, Saudi Arabia would revise its shelf life standards accordingly. WT/ACC/SPEC/SAU/4/Rev.1 
Page 36  
 
 107. In response to further questions, the representative of Saudi Arabia noted that the same shelf 
life periods were applied to domes tic and imported food products alike.  In the case of shelf stable 
products, the TBT Agreement granted Saudi Arabia th e right to take into account the effect of the 
country’s specific climatic and infrastructural c onditions (i.e. transportation, storage and handling 
conditions).  However climatic cond itions were the major factor considered by SASO in determining 
shelf life.  In rare cases covering particular pr oducts where non-concurrence or differences were found 
between the internationally recognized studies and re ferences, 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 the infrastructural factor s.  With the improvement of the infrastructural 
factors, a more relaxed attitude would be adopted. 
108. [The representative of Saudi Arabia confirme d that Saudi Arabia would eliminate shelf-
life requirements (cross referenced to the relevan t standard) for shelf-stable products upon 
accession, and would establish within one year regulations and procedures in line with international norms for “highly perishable refri gerated” food products to gradually replace 
remaining shelf life requirements on these products  with a scientific regulatory framework.  
The Working Party took note of this commitment. ] 
109. Some members of the Working Party noted that  the Agreement on Sanitary and Phytosanitary 
Measures required that WTO Members accept the sanitary and phytosanitary measures of other members, subject to confirming objectively that those measures were adequate to achieve the 
importing country's level of sanitary and phytosanitary  protection.  In response, the representative of 
Saudi Arabia stated that upon accession, Saudi Ar abia would accept the certification of exporting 
countries in accordance with the requirements of the Agreement on Sanitary and Phytosanitary 
Measures.  
110. Some members of the Working Party requested that Saudi Arabia identify all areas of 
inconsistency and provide a timetable for bringing th e Saudi Arabian regime into conformity with the 
requirements of the SPS Agreement.  In response, th e representative of Saudi Arabia stated that an 
internal review had already been commenced in to Saudi Arabia’s SPS regime guided by the 
comments of the WTO Working Party in this respect.   At a later stage, the representative of Saudi 
Arabia provided members of the Working Party  with a comprehensive Action Plan for the 
Implementation of the SPS Agreement in document WT/ACC/SAU/42.  It was anticipated that all 
legislation and practice would be in full conform ity with the requirements of the SPS Agreement by 
the date of accession, if not earlier.    WT/ACC/SPEC/SAU/4/Rev.1 
 Page 37 
 
 
 111. [The representative of Saudi Arabia stated that  Saudi Arabia's sanitary and phytosanitary 
standards system would be in compliance w ith WTO provisions under the Agreement on the 
Application of Sanitary and Phytosanitary Measur es 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 a least  trade distortive manner from the date of accession without recourse 
to any transition period.  The representative of Saudi  Arabia further confirmed that, no rules stricter 
than those laid out by international organizations such as OIE would be applied.  The Working Party 
took note of these commitments.]  
Trade Related Investment Measures  
112. Some members of the Working Part congratulate d Saudi Arabia on its generally very liberal 
investment regime and asked whether there were any measures in place in Saudi Arabia that were 
inconsistent with the requirements of the Agreement on Trade Related Investment Measures 
(TRIMS).  In response, the representative of Saudi Ar abia stated that there were no measures  in place 
in Saudi Arabia that were inconsistent with th e requirements of the Agreement on Trade Related 
Investment Measures (TRIMS).  He noted that in pa rticular, there were no measures in place in Saudi 
Arabia that were of the kind described in the "I llustrative List" in the Annex to the Agreement on 
TRIMS.  Some members of the Working Party enqu ired whether Saudi Arabia imposed any transfer 
requirements in relation to technical or manage ment know-how or upon foreign investors.  In 
response, the representative of Saudi Arabia stated  that no precise requirements on such transfers had 
been specified. 
113. [The representative of Saudi Arabia stated that Saudi Arabia would not maintain any 
measures inconsistent with the TRIMs Agreemen t and would apply the TRIMs Agreement from the 
date of accession without recourse to any transitio n period.  The Working Party took note of this 
commitment.]  
State Trading and State Ownership  
114. Some members of the Working Pa rty asked the representative of  Saudi Arabia whether there 
were any enterprises operating within the Kingdom of  Saudi Arabia that enjoyed any exclusive or 
special privileges within the terms of the defin ition set down in Article XVII of GATT 1994.  In 
response, the representative of Saudi Arabia stat ed that the Saudi Arabian Oil Company (Saudi 
Aramco) and the Grain Silos and Flour Mills Organization (GSFMO) were state trading enterprises 
and made purchases and sales solely in accordance w ith commercial consider ations and acted in a 
manner consistent with the general principles of non- discriminatory treatment en shrined in Article XVII WT/ACC/SPEC/SAU/4/Rev.1 
Page 38  
 
 of GATT 1994. Saudi Arabian Oil Co mpany (Saudi Aramco) was establis hed by a royal decree in 1987.  
It was responsible for most of the production and export of crude oil and natural gas in the Kingdom.  It 
was also responsible for the refini ng and marketing of products within  Saudi Arabia and entered into 
joint venture refineries with ot hers.  Although owned by the governme nt, it was run on a commercial 
basis by an independent board of  management and directors and had a board of directors
, chaired by 
the Minister of Petroleum and Mineral Resources.  The board consists of members from the company’s 
executive management, government offi cials, private sector and international companies.  The general 
policy of the Corporation was dete rmined by the Supreme Council for Petroleum and Mineral Affairs  
of the Corporation  which was presided over by the Presiden t of the Council of  Ministers or his 
designated representative.  Ten further members from the private sector and gove rnment officials were 
appointed by royal order. 
115. The Grain Silos and Flour Mills Organizati on (GSFMO) was established by a Royal Decree 
in 1973 in order to support the development of th e domestic agricultural sector, particularly wheat 
production for national security reasons. GSFMO was charged with forming a grain storage, flour 
production and animal feed processing conglomerate as well as with creating a stable market for 
grains in order to safeguard farmers from price fl uctuations. It was the only organization allowed to 
import grains, flour, and animal feed.  GSFMO used to be the only organization to import wheat 
and barley, however, the import regime of  these products had now been liberalized.  
116. [The representative of Saudi Arabia confirmed th at after accession to the WTO, Saudi Arabia 
would observe WTO provisions, in particular , Article XVII of the GATT 1994, the WTO 
Understanding on that Article, and Article VIII of the GATS regarding state trading, with respect to 
the State-owned enterprises and other enterprises a nd entities with special or exclusive privileges 
identified above, in particular abiding by the provi sions for notification, non-discrimination, and the 
application of commercial considerations for trad e transactions.  The Working Party took note of 
these commitments.]  
Free Zones  
117. In response to questions, the representative of Sa udi Arabia stated that the Kingdom of Saudi 
Arabia maintained no free zones.   
118. The representative of Saudi Arabia stated that Saudi Arabia had no free zones or free 
economic zones and stated that if any were estab lished, Saudi Arabia would administer them in 
compliance with WTO provisions, including tho se addressing subsidies, TRIMS and TRIPS, 
and that goods produced in these zones under tax and tariff provisions that exempt imports and  WT/ACC/SPEC/SAU/4/Rev.1 
 Page 39 
 
 
 imported inputs from tariff and certain taxes a nd charges would be subject to normal customs 
formalities when entering the rest of Saudi Arab ia including the application of tariffs and any 
taxes and charges.  The Working Party took note of these commitments. 
Agricultural policy  
119. The representative of Saudi Arabia provided information on its agriculture sector, including 
tables on domestic support and export subsidies in document WT/ACC/SAU/19 and WT/ACC/SPEC/SAU/1/Rev.4.  Saudi Arabia also e ngaged in negotiations on  domestic supports and 
export subsidies.  In this connection, the represen tative of Saudi Arabia al so described the special 
flexibilities Saudi Arabia would require in the support of its agriculture sector in document 
WT/ACC/SAU/28.  The commitments reflecting the results of these negotiations are annexed to the Protocol of Accession of Saudi Arabia to the WTO.   
120. Some members of the Working Party requested that Saudi Arabia provide detailed 
information on the role of the Saudi Agricultural Bank,  in particular in the area of its mandate with 
regard to providing agricultural lo ans and subsidies.  In response, the representative of Saudi Arabia 
stated that the Saudi Arabian Agricultural Bank (SAAB) was founded by the Royal Decree No. 58 
issued on 3/12/1382. It was a government financial institution specializing in providing funding to the 
agricultural sector in order to assist in the deve lopment of agriculture, and improve agricultural 
productivity through the deployment of state of the art scientific and technical methods.  The Bank 
granted loans through 13 branches, with 57 offi ces throughout the Kingdom in order to facilitate 
provision of services to farmers in their regions. The Bank grants farmers, agricultural projects, fishermen, bee keepers and farm cooperatives two types of agricultural loans free of interest.  
However, there are unseen costs borne by agricultu ral investors in order to acquire a loan from 
SAAB.  These costs were reflected in the number a nd amount of loans shown in the table below.  
The time needed to process the application and appr ove the loan is long due to bureaucracy that 
usually found in government agencies.  Therefore, the opportunity costs for agricultural loans is 
very low.   
Year No. Total loans 
Amounts (thousands SRs) 
1992 4374 775,150 
1993 4429 930,561 
1994 3822 670,556 
1995 2642 412,589 
 
He recalled, in this connection, that the charging of interest was prohibited in Saudi Arabia due to 
religious reasons.  The opportunity costs for agricultural loans were equal to the average rates of WT/ACC/SPEC/SAU/4/Rev.1 
Page 40  
 
 medium term commercial loans during the period 1993
-1995.  Short term agricultural loans with 
maturity of one year were being granted for seasonal crop farming and marketing and therefore 
include costs of seasonal p roduction such as seeds, fertilizers, ploughing and cultivation.  Mid -term 
loans of up to ten years maturity to fund fixed costs such as buildings and othe r installations as well as 
farm equipments such as engines, i rrigation pumps and agricultural machine ries, were also available 
in addition to the funding to specialized agricultural projects.  During the period 1992 -1995, the Bank 
had granted the following loans:  
Year  Short term loans  Medium term  Total loans  
 No  Amount   
(thousand SRls)  No amount   
(thousand SRls)  No amount  
(thousand SRls)  
1992  213  2168  4161  772982  4374  775150  
1993  158  1589  4271  928972  4429  930561  
1994  145  758  3677  669798  3822  670556  
1995  71  575  2571  412014  2642  412589  
Source :  Saudi Arabian Agricultural Bank, Thirty Second Annu al Report 1415/1416  H,1995  
  US$1 = SRls 3.75  
121. He added that the Bank had also been respons ible 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. Th ese subsidies included: engines, 
irrigation pumps, agricultural machinery, poultry equi pments, dairy production equipment, in addition  
transport costs from the country of origin of hi gh breed cows imported to the Kingdom were also 
paid. 
The following table shows total agricultural subsidies disbursed through the bank during the period 
1992-1995 : 
Year Total subsidies   (Thousand SRls) 
1992 677,902 
1993 248,624 
1994 355,434 
1995 not available 
Source:  Saudi Arabian Agricultural Bank, Thirty second Annual Report, 1415-1416 H, 1995 
  US$1 = SRls 3.75 
122. In response to further questions, the representative of Saudi Arabia stated that in pursuance of 
the current Development Plan Saudi Arabia would distribute land in areas where large quantities of 
renewable water resources were available.  Invest ment would be encouraged in large agricultural 
projects that depend on renewable water resources, using modern irrigation systems that consume low 
quantities of water.  Domestic production of vege tables and fruits grown in green-houses would be 
encouraged, as would the fishing industry using adva nced technology.  The Plan foresaw that wheat 
production would be gradually reduced, from mo re than 4 million tons before 1994, to  WT/ACC/SPEC/SAU/4/Rev.1 
 Page 41 
 
 
 2.8 million tons in 1994, 2 million tons in 1995 an d 1.3 million tons in 1996.  The production of 
barley would be reduced from 2 million  tons in 1994-1995 to one m illion tons in 1996.  Imported and 
domestically produced barley was purchased by the Grains, Silos, Flour and Milling Organization and 
then sold to livestock producers at the fixed pri ce of US$74.67 per ton.  The same programme of the 
present subsidies would be continued during the Sixth Plan period in order to promote or encourage 
implementation of the previous programs.   
123. Some members of the Working Party asked whet her there was any support to the dairy sector.  
In response, the representative of Saudi Arabia stat ed that there was no specific support for the dairy 
sector. 
124. In response to questions concerning the provisi on of irrigation water for crop production, the 
representative of Saudi Arabia stated that irrigati on water for crop production was provided by private 
farmers, and not by the Government.  He noted that there were no subsidies associated with the 
running of irrigation equipment. 
125. Some members of the Working Party requested th at the representative of Saudi Arabia clarify 
the role of  the Grains, Silos, Flour Milling Orga nization (GSFMO) in the export and subsidisation of 
wheat.  In response, the representative of Saudi Ar abia stated that since 1995 the GSFMO had not 
exported wheat or barley.  Export controls were ma intained for subsidized wheat and barley through 
export licences.  In response to further questions, he  added that the exportation of date palm seedlings, 
barley, corn maize and soy beans was conditional upon the repayment of subsidies intended for the 
support of domestic production.  
Trade in Civil Aircraft  
126. Some members of the Working Party asked th at Saudi Arabia enter a  commitment to 
accede to the Agreement on Civil Aircraft from the date of entry into force of its Protocol of 
Accession.  In response, the representative of Sa udi Arabia stated that Saudi Arabia had no 
present intention to accede to the Agreement on Civil Aircraft.  
Trade Related Intellectual Property Regime  
127. In addition to the Memorandum on the Forei gn Trade Regime, the representative of Saudi 
Arabia provided the Working Party with a Supplem entary Memorandum on Trad e Related Intellectual 
Property Rights (WT/ACC/SAU/5).  The representativ e of Saudi Arabia provided the Working Party 
with the text of the Trademarks Regulations, Patents Law, and the Law for the Protection of 
Copyrights (L/7645/Add.1).  WT/ACC/SPEC/SAU/4/Rev.1 
Page 42  
 
 128. Some members of the Working Party congratulat ed Saudi Arabia on its  generally high level 
of protection of intellectual property rights.  They noted that Saudi Arabia had taken significant steps 
towards making its trade regime fully consistent with the Agreement on Trade Related Aspects of 
Intellectual Property Rights (TRIPS), but that some  problems remained.  Some members asked that 
Saudi Arabia take immediate steps to address probl ems in its intellectual property regime, and asked 
also that Saudi Arabia commit itself to full im plementation of the TRIPS Agreement without a 
transitional period.  In particular, some members of the Working Party expressed concerns in relation 
to the protection of copyrights;  the duration of pate nt protection;   protection of plant varieties;  
length of time before compulsory licensing and work ing requirements were applied;  protection for 
sound recordings and audiovisual works; protection for broadcasts and satellite transmission; explicit 
protection for computer software programs; implem entation of Articles 1-21 of the Berne Convention; 
and the protection of well-known marks.   
129. With reference to copyright, some members of  the Working Party considered that Saudi 
Arabia’s laws did not fully reflect its obligatio ns under the Universal Copyright Convention.  In 
addition, the provisions of the Saudi laws did not  provide protection for sound recordings.  Saudi 
Arabia had not yet joined the Berne, Paris, or Ge neva Phonograms Conventions.  Membership in such 
multilateral intellectual property agreements demonstrated a strong commitment to protection and supports local enforcement.   Other apparent deficien cies included the fact that there were no laws that 
protect broadcasts and satellite transmissions, and th at the term of protection for audiovisual works 
was 25 years, not 50 years as called for in the TRIPS Agreement.   Saudi Arabia's laws also appeared 
to lack sufficient legal penalties to deter piracy, e.g., substantial fines or prison sentences.  In 
response, (in document WT/ACC/SAU/28) the represen tative of Saudi Arabia stated that Saudi 
Arabia's intellectual property regime would be brou ght into full conformity with the requirements of 
the Agreement on TRIPS five years from the date of Saudi Arabia's accession to the WTO.  In 
document WT/ACC/SAU/39, the representative of Saudi Arabia provided members of the Working 
Party with a detailed plan on the steps being ta ken to ensure full implementation of the TRIPS 
Agreement by the end of the transitional period requested.   
130. In response to questions from members of the Working Party, the representative of Saudi 
Arabia stated that ongoing reviews of  the WTO co nformity of Saudi law had so far revealed that 
there were some areas of incompatibility that would n eed to be rectified either through amendment of 
existing legislation or enactment of new laws.  It would  also be necessary to introduce the 
administrative machinery to ensure the enforcement of TRIPS standards.     In this regard, he noted 
that Saudi Arabia's Copyright Law conformed to the requirements of the Universal Copyright 
Convention and the Arab Copyrights Convention, as well as to most provisions of Article 9 to 14 of  WT/ACC/SPEC/SAU/4/Rev.1 
 Page 43 
 
 
 the TRIPS Agreement.  Saudi Arabia would amend its Copyright Law, as necessary, to implement the 
TRIPS Agreement Articles 9 to 14.  Copyright ho lders could prevent others from offering the right 
holder's works for rental without authorization.   The Copyright Law was enforced on domestic and 
imported products.  To the extent that the Co pyright Law did not meet the TRIPS Agreement 
requirements, Saudi Arabia would introduce n ecessary changes to meet its TRIPS Agreement 
obligations.  Saudi Arabian law a nd practice in relation to Copyright s would be in full conformity 
with the requirements of the Agreement on Trade Related Aspects of Intellectual Property Rights 
from the end of the needed transition period. 
131. Concerning patents, the representative of Saudi Arabia noted that in general, patentable 
subject matter in Saudi Arabia was consistent w ith the requirements of Section 5 of the TRIPS 
Agreement.  Processes (methods of manufacturing)  were patentable, and were protected from 
infringing use.  Plant varieties protection were not currently patentable, even though the TRIPS 
Agreement required the protection of plant varieties (Article 27(3)). Patent holders in Saudi Arabia 
were accorded the rights mentioned in Article 28 of  TRIPS.  A patent holder was required to make 
full industrial use of the patent in Saudi Arabia w ithin two years.   Although the current Patent of 
Inventions Law conferred a term of protection of 15 years with the possibility of a five year extension, 
the representative of Saudi Arabia stated that it was foreseen that the period of protection for nationals 
of WTO Members, could be automatically granted a five year extension after the elapse of the initial 
15 year protection period.  Concerning compulsory licensing, the representative of Saudi Arabia noted 
that the Agreement on TRIPS required the granting of compulsory licences no earlier than three years 
from the date of the patent.  The current Patent Law permitted the grant of a compulsory licence after 
two years of the patent date, with a possibility of ex tension of two additional years. It was clear that 
there was no complete conformity.  The ongoing re view of Saudi Arabian Patent Law had revealed 
that in comparison with Article 27(3) of the TR IPS Agreement,  the exclusion of patentability 
contained in paragraphs (a) and (b) of Article (8) was in  accordance with 27 (1) of the TRIPS 
Agreement which limits the patentable inventions  to those which were related to products or 
processes;  paragraph (c) of Article (8) was in fu ll compliance with subparagraph (b) of Article 27(3) 
of the TRIPS Agreement except that paragraph (c ) did not exclude “Micro-organisms” from “Plants 
and animals” and did not include "non-biological  processes” as processes excluded from “biological 
processes for the production of plants and animals";  and that paragraph (d) of the Patent Law was in 
full compliance with sub-paragraph (a) of Article 27(3) of the TRIPS Agreement.  In relation to 
Article 9 of the Patent Law, the Shariah was consid ered the "umbrella" of the legal system of Saudi 
Arabia. All laws of Saudi Arabia s hould be in consistent with the Shar iah. Article 9 could therefore be 
considered to be in accordance with the TRIPS Agreement (Article 27(2)). Banning patents over WT/ACC/SPEC/SAU/4/Rev.1 
Page 44  
 
 products contrary to the Shariah did not economically  damage international patent holders of such 
products since the marketing of such products was prohibited. 
132. In response to requests for information concer ning the protection of trademarks in Saudi 
Arabia, the representative of Saudi Arabia stated th at the Trademarks Law complied with Article (15) 
of the TRIPS Agreement in distinguishing the esse ntial element of the trademark which could be 
capable of protection.  Actual use of trademark wa s not a precondition for registration.  The nature of 
goods or services did not constitute an obstacle fo r registration, unless the goods or services were 
inconsistent with the Shariah. He also noted that internationally well known trademarks were 
protected in Saudi Arabia.  In particular, the Trad emarks Law provided that a trademark could not be 
registered when "...marks (were) identical to or si milar to internationally known marks even if they 
were not registered in the Kingdom".  If registra tion of a trademark was accepted, the competent 
department then published the registration.  Any in terested party could object to the acceptance of a 
trademark's registration within ninety days from the date of publication of the registration.  The owner 
of a registered trademark was considered as th e only right holder of all rights conferred under 
Article 16 of the Agreement on TRIPS.  The exceptions to the rights conferred by a trademark set out 
in Article 17 of the TRIPS Agreement were also refl ected in the Trademarks Law.   The requirements 
of Article 20 and 21 of the TRIPS Agreement were also reflected in the Trademarks Law.  As 
required under Articles 22 to 24 of the TRIPS Ag reement, geographical indications were protected 
under the Trademarks Law, geographical names coul d not be registered as a trademark under Saudi 
Arabia’s Trademarks Regulations if their use cau sed a misunderstanding as to the source of products 
or services, or their origin.  Due to the religious  prohibition of alcoholic beverages, geographical 
indications of origin of wines and spirits were not  protected in Saudi Arabia.  Foreign non-residents 
with which Saudi Arabia enjoyed reciprocal agreemen ts could register trademarks through an official 
attorney.  Some members of the Working Party no ted that the period of protection for a trademark 
when the requirement of use was not fulfilled was five  years, two years more than the period required 
by Article 19 of the Agreement on TRIPS.  These members noted also that the initial and renewable 
period of period of protection for trademarks where the requirement of use was fulfilled was ten years, 
three years more than the period required by Article 18 of the Agreement on TRIPS.  The 
representative of Saudi Arabia stated that follo wing WTO accession, all nationals of WTO Members 
would be able to register trademarks in Sa udi Arabia and would enjoy national treatment.  
133. In response to requests for information con cerning the protection available for industrial 
designs, the representative of Saudi Arabia responded that industrial designs would be protected by a 
Proposed Industrial Designs Law which would be  implemented by The King Abdulaziz City for 
Science and Technology (KACST).    WT/ACC/SPEC/SAU/4/Rev.1 
 Page 45 
 
 
 134. In response to requests for information concerning the protection available for layout designs, 
the representative of Saudi Arabia noted that Layout  Designs of Integrated Ci rcuits were not covered 
by current laws.  This issue was under review and the protection provided would be consistent with 
WTO obligations.  
135. Some members of the Working Party requested information on the protection available for 
undisclosed information.  The representative of Saudi Arabia stated that although undisclosed 
information was currently protected by the Compan ies Law, Labour Law and Banks Control Law, 
work was underway to prepare an Unfair Competition Law that would deal comprehensively with this 
issue.  That law would be implemented by the Mini stry of Commerce.  He added that anti-competitive 
practices would be covered by the law as well. 
136. Some members of the Working Party noted the st eps being taken by Saudi Arabia to eliminate 
some problems in the area of enforcement, in partic ular the piracy of intellectual property.  It was 
clear that much of the necessary legislation was in place, but that was experiencing difficulty in fully 
implementing and enforcing the new laws.  These me mbers of the Working Party urged Saudi Arabia 
to work towards full conformity with the Agre ement on TRIPS from the date of Saudi Arabia's 
accession to the WTO.  In respon se to comments concerning the enforcement of border measures, the 
representative of Saudi Arabia stated that border m easures in Saudi Arabia were broadly consistent 
with the provisions of the TRIPS Agreement which authorized the judicial or administrative bodies to 
issue a provisional seizure decision.  The power to make such a decision was contained in Articles 34 
and  132(3) of the Implementing Rules of the Saudi  Customs system.  Moreover, Customs authorities, 
in coordination with the Ministry of Commerce, seized consignments infringing intellectual property 
rights or involving commercial fraud,  consistently  with Article (58) of the Agreement.  The only 
identified inconsistency between the Customs Law and the TRIPS Agreement concerned the penalties 
provided for by the r elevant Saudi law.  
137. The representative of Saudi Arabia stated that it was the intention of Saudi Arabia to fully 
comply with the requirements of the Agreement on TRIPS as soon as possible.  Much of the required legislation was already in place.  In addition, Sh ariah provided significant protection of intellectual 
property rights.  Saudi Arabia was working towa rds codification of all laws required by the 
Agreement on TRIPS. However, despite Saudi Arabia 's desire to achieve full consistency with the 
Agreement on TRIPS as soon as possible, because of difficulties in providing the required funds and 
training to the personnel who would administer the legislation, Saudi Arabia may need to have 
recourse to a transitional period.   In this connection, in document WT/ACC/SAU/28, the representative of Saudi Arabia stated that Saudi Arabia would propose a transitional period of five WT/ACC/SPEC/SAU/4/Rev.1 
Page 46  
 
 years, under paragraph 2 of Article 65 of the Agr eement on TRIPS, to apply the provisions of the 
Agreement.  
138. In response to requests from members of the Working Party  that Saudi Arabia try to 
minimise further the transitional period requested fo r full compliance with the TRIPS Agreement, the 
representative of Saudi Arabia presented an Ac tion Plan for the Implementation of the TRIPS 
Agreement in document WT/ACC/SAU/43, in which he  proposed that Saudi Arabia fully apply the 
Agreement on TRIPS by the end of 2002.  Members of  the Working Party  welcomed this reduction in 
the transition period requested and urged Saudi Arabia to take even greater steps to try to implement 
the Agreement on TRIPS in full from the date of accessi on, without recourse to any transition period.   
139. [The representative of Saudi Arabia stated that Saudi Arabia would apply fully all the 
provisions of the Agreement on Trade-Related Aspects of Intellectual Property Rights [by the end of 
2002] according to the action plan provided by the Kingdom.  [from the date of accession to the 
WTO, without recourse to any transition period].   The Working Party took note of this commitment.] 
Policies Affecting Trade in Services  
140. In addition to the Memorandum on the Forei gn Trade Regime, the representative of Saudi 
Arabia provided the Working Party with informati on on the services regime in Saudi Arabia in a   
Supplementary Memorandum on the Foreign Tr ade Regime, (WT/ACC/SAU/5);  as well as 
supplementary background notes and inform ation in documents WT/ACC/SAU/23 and 24. 
141. Some members of the Working Party congratulated  Saudi Arabia on its very liberal services 
regime.  They noted, in particular, the high number of foreign workers and service providers already 
resident within Saudi Arabia. 
142. Some members of the Working Party requested  clarification of the roles of various 
government agencies in the approval of new investme nts of foreign capital in the services sector.  In 
response the representative of Saudi Arabia stated that all foreign investments , whether in a joint 
venture or wholly foreign owned project , was were required  to be approved, as a one window 
operation, by the newly set up General Investment Authority.   by the Foreign Capital Investment 
Committee under the chairmanship of the Ministry of Industry and Electricity.  In addition, other 
Ministries, such as the Ministry of Commerce, the Mi nistry of Health, the Ministry of Education, the 
Saudi  Arabian Monetary Agency, the Ministry of  Post, Telegraph and Telephone, Ministry of 
Communications and the Ministry of Defence and Aviation had a role in the approval process for 
investment in particular service sectors.   WT/ACC/SPEC/SAU/4/Rev.1 
 Page 47 
 
 
 143. Some members of the Working Party requested information on the regula tion of the financial 
services sector and in particular requested inform ation of the conditions under which a foreign bank 
could obtain a licence to establish a branch within Saudi Arabia.  In response, the representative of 
Saudi Arabia stated that financial firms' activities were regulated by the Banking Control Law.  Under 
Article 2 of the Banking Control Law, any natural or legal person was required to have a licence to 
carry on banking business.  Under Article 3 of the Banking Control Law,  a Saudi national bank 
operating nation wide could be granted a licence if, inter alia , it was a Saudi joint stock company.  
This included joint venture banks.  A foreign bank could be granted a licence to establish branches in 
Saudi Arabia if it satisfied the conditions de termined by the Council of Ministers upon the 
recommendation of the Minister of Finance and National Economy.  The representative of Saudi Arabia added that the Saudi Arabian Monetary Agency  Authority
 (SAMA) always acted consistently 
with the requirements of Articles XVI and XVII of the GATS when considering an application for a 
new licence.  Upon the recommendation of the Saudi Arabian Monetary Agency  Authority , the 
Minister of Finance and National Economy and th e Council of Ministers would evaluate the 
recommendation taking into account the following  objective considerations: the macroeconomic 
needs of the financial and banking system; the develo pment of new products and services; the level of 
existing competition in the market; the benefits to  the consumer; the introduction of new technologies; 
the impact on the financial stability and soundness of the banking system; the professional and business standing of the founders and members of the Board of Directors; and the capital adequacy of 
the proposed enterprise. 
144. He further added that Saudi Arabia provided for a wide range of judicial, arbitral and 
administrative procedures with respect to trade in services.  Saudi Arabia had administrative 
procedures for the review of administrative decisions affecting trade in services.  Such decisions were 
appealable to the Board of Grievances under the Council of Ministers Resolution No. 190 of 
16.11.1409 H Concerning Rules and Procedures to be  Followed by the Board of Grievances and the 
Board of Grievances Law.  Commercial disputes were  generally covered by the Board of Grievances 
and some other standing and ad hoc committees.  Some members of the Working Party asked the 
representative of Saudi Arabia to provide inform ation on the review of decisions concerning the 
licensing of service providers in Saudi Arabia.  In  response the representative of Saudi Arabia stated 
that a number of Ministries and Agencies were invol ved in approval of the right to provide a service 
in Saudi Arabia; for example: the Ministry of  Commerce for engineers, legal practitioners, 
accountants and insurers; the Ministry of Defence a nd Aviation for civil aviation, tourism and travel 
agents; the General Organization for Technical E ducation and Occupational Training for technical 
institutes and national occupational centres; the Ministry of Health for medical practitioners, 
pharmacists, hospitals; the Ministry of Communicati ons for maritime transport; and the Saudi Arabian WT/ACC/SPEC/SAU/4/Rev.1 
Page 48  
 
 Monetary Agency  Authority
 for banks.  In all cases the Minist ries and Agencies involved had internal 
standing committees of senior officials to review  initial administrative decisions pertaining to 
licensing.  Decisions of standing committees could be  appealed to the responsible Minister or Agency 
head.  Administrative Decisions involving potentia l civil suits against the government could be 
brought before the Board of Grievances. 
145. In response to requests for information on the na ture and extent of incentives, tax exemptions 
and subsidies available to service providers in Saudi Arabia, on a national treatment basis, the 
representative of Saudi Arabia stated that no tax holidays were now available within the new 
Foreign Investment Regulations of April 2000.  foreign services projects licensed by the Mi nistry 
of Industry and Electricity were entitled to five year corporate income tax holidays pursuant to 
Article  7(b) of the Investment of Foreign Capital Regulations.  
146. In response to requests for information c oncerning restrictions on the provision of 
professional services, the representative of Saudi Arabia stated that all professional services were treated in the same manner.  A licence was required to provide professional services.  To be eligible for a licence the company was required to be: reput able and well recognized in the field of its 
profession; to have been registered and successfully prac tising in the field for at least ten years; and to 
be prepared to participate in the training a nd the building of Saudi nationals' experience and 
introducing relevant technology.  In  addition, the foreign company should employ or have at least one 
representative in Saudi Arabia.  That representative s hould stay in Saudi Arabia for a period not less 
than 9 months per year; have at least a university degree in the field of the company specialization; 
and have not less than 10 years experience suc cessfully.  In response to requests for further 
information concerning the conditions required to be fulfilled in order to be eligible for grant of a 
licence, the representative of Saudi Arabia stated that a foreign company would be considered as 
reputable, well recognized and practising in the fi eld successfully if it was registered under the 
companies law of its home country, was certified as fina ncially viable by its bankers, produced copies 
of audited balance sheets for the last two years,  produced a list of previous contracts/assignments, 
outside Saudi Arabia, certified by the Chamber of Commerce and Industry in the company's home 
country, and also produced certificates of satisfactor y completion of assignments from former clients.  
Concerning the participation in training and the introduction of technology, the applicant company 
should give an undertaking that it would trai n Saudi nationals and would introduce the new 
technologies and know-how that it employed in its home country.  He also added that the foreign 
existing companies already licensed to operate in Saudi  Arabia had a period of one year to fulfil those 
conditions.  If they do not do that, the licence may be cancelled.  New companies had to fulfil the 
conditions from the beginning of their business activities.  WT/ACC/SPEC/SAU/4/Rev.1 
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 147. Some members of the Working Party asked whether Saudi Arabia planned to liberalise the 
limitations placed on the participation of foreigne rs in security underwriting, commodity brokerage 
services and currency exchange operations, as well as the limitations placed on the participation of 
foreigners in land transportation and professional ser vices.  In response, the representative of Saudi 
Arabia stated that although there were  limitations on the participation of both foreign and domestic 
individuals in providing security underwriting, commodity brokerage services and currency exchange 
operations, there were no such limitations on domestic and  foreign banks, excepting  the requirement s 
to be licensed.  There were no pl ans to liberalise those conditions. 
148. Some members of the Working Party asked whet her there were any instances of less than 
national treatment for foreign service providers.  The representative of Saudi Arabia stated that only 
Saudi Arabian nationals were allo wed to participate in security underwriting, commodity brokerage 
services, currency exchange operations,  commercial agencies, customs cl earance agencies, real estate 
agency, transportation (land based transport and coastal shipping services ) and civilian security.  
Postal services, basic telecommunications services, radio and television transmission services were reserved to the State.  He further added that u nder Article 8 of the Unified Economic Agreement of 
the Gulf Cooperation Council, member States were to agree on rules which would insure
 national 
treatment was provided for Gulf Cooperation Council nationals in, among other things, freedom of 
movement, work and residence, right of owners hip and freedom of exercising economic activity, 
including service activities and free movement of capital .  Saudi Arabia, together with the other 
Gulf Cooperation Council members, was in the process of implementing this agreement.  In addition, 
some bilateral agreements signed by Saudi Arabia co nferred preferred or reciprocal supplier status on 
companies from signatory countries with regard to  certain services.  Agreements with Egypt and 
Jordan conferred reciprocal supplier status for cr oss-border truck and public transportation vehicles; 
agreements with Egypt and Tunisia granted prefer ence to national shipping and transport modes in 
bilateral trade; agreements with Lebanon, Syria an d Turkey provided for reciprocal treatment with 
regard to transportation and transport vehicles; an d an agreement with Morocco included reciprocal 
airline privileges. 
149. In response to requests for information concer ning the rules governing temporary residence in 
Saudi Arabia by foreigners, the representative of Sa udi Arabia stated that the Law of Residency was 
enforced by the Ministry of Interior.  In addition,  the Ministry of Labour a pproved applications for the 
presence of foreigners who work or were given licen ce to practice work in the private sector.  Some 
members of the Working Party requ ested information on the system followed for employment of 
foreign employees and investors.  of mandatory "sponsorship" of foreign employees and investors 
by Saudi nationals.   The representative of Saudi Arabia stated that once a foreign employee was WT/ACC/SPEC/SAU/4/Rev.1 
Page 50  
 
 offered a contract, a visa would be granted.  Business visitors would, however, require a letter 
or invitation or a copy of the relatio nship or agreement with a Saudi party.  "sponsorship" by a 
Saudi Arabian national was required for all visa applications,  in order to ensure that only genuine 
foreign workers and business persons were granted vi sas.  Once a contract was offered, a visa would 
be granted.  
150. In response to questions concerning the limita tions placed upon the total number of natural 
persons employed in particular sectors, the represen tative of Saudi Arabia stated that as a matter of 
principle, work was considered a Saudi citizen's right.  Consequently, a foreigner would not be employed when to do so would displace a Saudi  worker.  The Labour and Workers Regulations 
required that any enterprise, Saudi or foreign owned,  would ensure that the percentage of the Saudi 
workers engaged by the employer should not be less th an 75 percent of the total workforce.  However, 
the Regulations also permitted the Minister of  Labour to reduce the required percentage in 
circumstances where qualified Saudi workers were not  available.  Foreign workers were required to 
obtain work permits from the Ministry of Labour, a nd an application for a permit was required to be 
accompanied by a submission from the proposed employer confirming the non-availability of 
qualified Saudis for the work. and a guarantee of re patriation at the conclusion of the applicant's 
contract.   All service providers activities, regardless of  ownership were obliged to reserve certain 
positions for Saudis, including personnel officers, recruitment offers, receptionists, managers,  
treasurers, civilian security guards, and transaction follow-up clerks to government departments. 
151. Some members of the Working Party requested clarification of the qualification requirements 
and procedures for approval of foreign service provi ders.  In response, the representative of Saudi 
Arabia stated that different categories of services re quired different types of approval.  For example, 
for medical services, the service provider should ha ve a medical degree from a recognized institution.  
For educational services, the service provider shoul d have adequate academic  qualifications in the 
relevant disciplines from a university or a recognized  institution.  For the provider of accounting and 
auditing service, the provider should be a certified accountant from a recognized institute.  In addition, all foreign companies should possess the ne cessary technical expertise, financial capabilities, 
and occupational proficiency. 
152. In response to questions concerning restrictions placed on foreign service providers 
procurement of business inputs, the representative  of Saudi Arabia stated that all non-Saudi 
contractors must assign not less than 30 percent of the works included in their contract to wholly 
owned Saudi companies.  All contractors were obliged to purchase the tools and equipment which 
they procure for performance of their contracts fro m Saudi agents for these tools and equipment in  WT/ACC/SPEC/SAU/4/Rev.1 
 Page 51 
 
 
 Saudi Arabia.  Contractors were required to obtain the following services from local Saudi 
establishments: transportation services for goods and services within Saudi Arabia, (if the contractor 
did not perform this service by itself directly by  equipment owned by the business and with personnel 
directly employed by the business) banking and insurance  services; services for the leasing and 
purchase of land and buildings; and cater ing services and supply of foodstuffs. 
153. Some members of the Working Party asked whether permission for a foreign owned service 
provider to own real property was automatic on ce the licence to engage in business activities as a 
foreign establishment in Saudi Arabia was obtained.  In response, the representative of Saudi Arabia 
stated that foreign establishments authorized to carry  on their activities in the Kingdom under 
the Foreign Capital Investment Law may own real estate only for a specific use related to the 
licensed project, in accordance with the rules on foreign ownership of real estate.  The 
concerned Minister’s approval of a request to ow n real estate is a prerequisite before its review 
by a Ministerial Committee headed by the Minister of Interior.  acquisition of a licence to engage 
in business activities automatically entitled th e project owners to acquire real property needed for the 
conduct of the business activities.  
154. [Following the completion of bilateral negotia tions with WTO Members, the schedule of 
specific commitments on services of Saudi Arabia will be reproduced in Part II of the Annex to the Protocol of Accession of Saudi Arabia]. 
Government Procurement
 
155. Some members of the Working Party  requested  that Saudi Arabia undertake to accede to the 
Agreement on Government Procurement upon accession to the WTO.  The representative of Saudi 
Arabia replied that the Agreement on Governme nt Procurement was a Plurilateral Agreement, 
adherence to which was not a precondition for accession to the WTO.   
156. Members observed that government procurem ent accounts for a major part of Saudi 
Arabia’s imports, and that Saudi participatio n in the Agreement on Government Procurement 
was an important issue.  The benefits of join ing the GPA included lower procurement costs and 
greater transparency.  In particular, the tran sparency provisions of the Agreement can be 
useful to Saudi Arabia in ensuring the leas t cost/best quality outcome for procurement in 
covered agencies.  Saudi Arabia should  immedi ately become an observer and initiate accession 
negotiations as soon a possible after accession to  the WTO.  The representative of Saudi Arabia 
responded that his government would seek observ er status in the Government Procurement WT/ACC/SPEC/SAU/4/Rev.1 
Page 52  
 
 Committee and would participate in the work of the Working Group on Transparency in 
Government Procurement Procedures 
139.
 The repre sentative of Saudi Arabia stated that Saudi Arabia would, upon accession to the 
WTO, commence negotiations for membership in the Agreement on Government Procurement by 
tabling an entity offer.  He also confirmed that, if the results of the negotiations wer e satisfactory to 
the interests of Saudi Arabia and the other members of the Agreement, Saudi Arabia  would complete 
negotiations for membership in the Agreement within  a year of accession to the WTO.  The Working 
Party took note of these commitments.  
Transparency  
157. Some members of the Working Party request ed information on whether legislation was 
required to be published in any official journal prio r to its entering into force.  In response, the 
representative of Saudi Arabia stated that Article 71 of the Basic Rule of  Law provided that any law 
was required to be published in the Official Journal before it could enter into effect.  He further 
added that Article 47 of the Board of Grievances Law required the publication of Judicial 
decisions.  
158. [The representative of Saudi Arabia said that from the date of accession all laws and 
regulations, decrees on judicial decisions and admini strative rulings of genera l application related to 
trade would be published in a manner that fulfils the WTO requirements.]  
Notifications  
159. The representative of Saudi Arabia said that upon entry into force of the Protocol of 
Accession, Saudi Arabia would submit all in itial notifications required by any Agreement 
constituting part of the WTO Agreement.  An y regulations subsequently enacted by Saudi 
Arabia which gave effect to the laws enacted to  implement any Agreement constituting part of 
the WTO Agreement would also conform to the requirements of that Agreement.  The Working 
Party took note of theses  commitments. 
160. [The representative of Saudi Arabia said that at the latest within six months of the entry into 
force of the Protocol of Accession, Saudi Arabia would submit all additional not ifications required by 
any agreement constituting part of the WTO Agreement.   Any regulation subsequently enacted by Saudi 
Arabia which gained effect to the laws enacted to implement any Agreement constituting part of the 
WTO Agreement would also conform to the requireme nts of that Agreement.  The Working Party took 
note of these commitments.]   WT/ACC/SPEC/SAU/4/Rev.1 
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 Trade Agreements  
161. In response to questions the representative of Saudi Arabia submitted the text of the Unified 
Economic Agreement signed on 11 November 1981 under the Gulf Cooperation Council.  He said that 
the free-trade agreement met all the requirements of Article XXIV of GATT Agreement 1994, including 
in particular paragraphs 5 (b) and 8 (b) thereof.  The free-trade area had el iminated duties and other 
restrictive regulations of commerce and also all the trade between the members of the Gulf Cooperation 
Council in the products originating in the member st ates and work was proceed ing to further harmonise 
trade and commercial policies.  He also submitted the programme for the implementation of the Agreement Facilitating and Developing  Trade Exchange among Arab States  to create a Free-trade Area 
and the Agreement Facilitating a nd Developing Trade Exchanges among Arab States.  Saudi Arabia 
would notify these agreements  upon becoming a WTO Member. 
162. [
The representative of Saudi Arabia stated that his Government would observe the provisions of 
the WTO including Arti cle XXIV of the GATT 1994 and Article V of the GATS in its trade agreements, 
and would ensure that the provisions of these WTO Agreements for notificati on, consultation and other 
requirements concerni ng free trade areas and customs unions of which Saudi Arabia was a member were 
met from the date of accession.  The Wo rking Party took note of these commitments.]  
Conclusions  
163.  [The Working Party took note of the explanations  and statements of Saudi Arabia concerning 
its foreign trade regime, as reflected in this re port.  The Working Party took note of the assurances 
given by Saudi Arabia in relation to certain specifi c matters which are reproduced in paragraphs ... of 
this report.  The Working Party took note of the commitments given by Saudi Arabia in relation to 
certain specific matters which are reproduced in paragraphs 22, [24], 25, [27], 29, 34, 48, 60, 62, 64, 
65, 67, 68, 74, 76, 91, 95, [108], 111, 113, 116, 118, [139], 159, 160 and 162  of this report.  The 
Working Party took note that th ese commitments had been incorporated in paragraph 2 of the Draft 
Protocol of Accession of Saudi Arabia to the WTO .] 
164. [Having carried out the examination of the fore ign trade régime of Saudi Arabia and in the 
light of the explanations, commitments and concessi ons made by the representative of Saudi Arabia, 
the Working Party reached the conclusion that Saud i Arabia be invited to accede to the Marrakesh 
Agreement Establishing the WTO under the provisions of  Article XII.  For this purpose, the Working 
Party has prepared the draft Decision and Protocol  of Accession reproduced in the Appendix to this 
report, and takes note of Saudi Arabia's  Schedul e of Concessions and Commitments on Goods [to be 
prepared] and its Schedule of Specific Commitments on Services [to be prepared] that are annexed to WT/ACC/SPEC/SAU/4/Rev.1 
Page 54  
 
 the Protocol.  It is proposed that these texts be adopted by the General Council when it adopts the 
report.  When the Decision is adopted, the Protoc ol of Accession would be open for acceptance by 
Saudi Arabia which would become a Member thir ty days after it accepts the said Protocol.  The 
Working Party agreed, therefore, that it had comp leted its work concerning the negotiations for the 
accession of Saudi Arabia to the Marrak esh Agreement Establishing the WTO.] 
[TO BE COMPLETED.]  WT/ACC/SPEC/SAU/4/Rev.1 
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 APPENDIX 
ACCESSION OF THE KINGDOM OF SAUDI ARABIA  
Draft Decision  
The General Council, 
 Having regard  to the results of the negotiations di rected towards the establishment of the 
terms of accession of the Kingdom of Saudi Arabia  to the Marrakesh Agreement Establishing the 
World Trade Organization and having prepared a Protocol for the Accession of the Kingdom of  Saudi Arabia, 
 Decides
, in accordance with Article XII of the Marrakesh Agreement Establishing the World 
Trade Organization, that the Kingdom of Saudi Arabia may accede to the Marrakesh Agreement 
Establishing the World Trade Organization on the terms set out in the said Protocol. 
 WT/ACC/SPEC/SAU/4/Rev.1 
Page 56  
 
 PROTOCOL OF ACCESSION OF THE KINGDOM OF SAUDI ARABIA 
TO THE MARRAKESH AGREEMENT ESTABLISHING 
THE WORLD TRADE ORGANIZATION 
DRAFT 
 The World Trade Organization (hereinafter referred to as the "WTO"), pursuant to the 
approval of the General Council accorded under Articl e XII of the Marrakesh Agreement Establishing 
the World Trade Organization (hereinafter referre d to as "WTO Agreement"), and the Kingdom of 
Saudi Arabia (hereinafter referred to as "Saudi Arabia"),  
 Taking note
 of the Report of the Working Party on the Accession of Saudi Arabia to the WTO 
in document WT/ACC/SAU/… (hereinafter refe rred to as the "Working Party Report"), 
 Having regard  to the results of the negotiations on th e accession of Saudi Arabia to the WTO, 
 Agree  as follows: 
Part I - General  
1. Upon entry into force of this Protocol, Sa udi Arabia accedes to the WTO Agreement pursuant 
to Article XII of that Agreement and thereby becomes a Member of the WTO. 
2. The WTO Agreement to which Saudi Arabia  accedes shall be the WTO Agreement as 
rectified, amended or otherwise m odified by such legal instruments as may have entered into force 
before the date of entry into force of this Pr otocol.  This Protocol, which shall include the 
commitments referred to in paragraph 145 of the Work ing Party Report, shall be an integral part of 
the WTO Agreement. 
3. Except as otherwise provided for in the para graphs referred to in  paragraph 145 of the 
Working Party Report, those obligations in the Multilateral Trade Agreemen ts annexed to the WTO 
Agreement that are to be implemented over a period of  time starting with the entry into force of that 
Agreement shall be implemented by Saudi Arabia as if it had accepted that Agreement on the date of 
its entry into force. 
4. Saudi Arabia may maintain a measure inconsis tent with paragraph 1 of Article II of the GATS 
provided that such a measure is recorded in the list of Article II Exemptions annexed to this Protocol 
and meets the conditions of the Annex to the GATS on Article II Exemptions.  WT/ACC/SPEC/SAU/4/Rev.1 
 Page 57 
 
 
 Part II – Schedules  
5. The Schedules annexed to this Protocol shall become the schedule of Concessions and 
Commitments annexed to the General Agreement on Tariffs and Trade 1994 (hereinafter referred to 
as the "GATT 1994") and the Schedule of Specific Commitments annexed to the General Agreement 
on Trade in Services (hereinafter referred to as "G ATS") relating to Saudi Arabia.  The staging of 
concessions and commitments listed in the Schedu les shall be implemented as specified in the 
relevant parts of the respective Schedules. 
6. For the purpose of the reference in paragraph 6(a) of Article II of the GATT 1994 to the date 
of that Agreement, the applicable date in resp ect of the Schedules of Concessions and Commitments 
annexed to this Protocol shall be the date  of entry into force of this Protocol. 
Part III - Final Provisions   
7. This Protocol shall be open for acceptance, by  signature or otherwise, by Saudi Arabia 
until …. 
8. This Protocol shall enter in to force on the thirtieth day following the day of its acceptance. 
9. This Protocol shall be deposited with the Director-General of the WTO.  The Director-
General of the WTO shall promptly furnish a certifie d copy of this Protocol and a notification of 
acceptance thereto pursuant to paragraph 7 to each member of the WTO and Saudi Arabia. 
10. This Protocol shall be registered in acco rdance with the provisions of Article 102 of the 
Charter of the United Nations. 
11. Done at Geneva this ….. day of ……………….  , two thousand, 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 or more of these languages. 
__________ 