 RESTRICTED  
  
GPA/TN1994/2/Rev.4/Add.1  
24 November  1999 
(24-2688) Page: 1/18 
Committee on Government Procurement  
Negotiations under Article XXIV:7 of the GPA 1994  
Comité des marchés publics  
Négociations au titre de l'article XXIV:7 de l'AMP 1994  
Comité de Contratación Pública  
Negociaciones en el marco del párrafo 7 del artículo XXIV  
del ACP 1994   
 
  
SUGGESTED DRAFTING CHANGES TO THE  1994 AGREEMENT*,** 
NOTE BY THE SECRETARIAT  
Addendum  
 At the informal meeting of 4  October  1999, it was agreed that the note by the Secretariat, 
reflecting the discussion on the article -by-article examination of the Agreement at the informal 
meetings held from February to September  1999 (Job No. 5713), would be updated . Accordingly, 
the present note reflects the comments made at the October meeting . Since the additional points 
made at that m eeting touch on only a small proportion of the pages of the fourth revision of the 
note, this addendum only updates those pages and should be read in conjunction with the fourth 
revision and with the relevant sections of the tenth revision of the Checklist  of Issues (Job No. 5189), 
dated 7 September  1999. For any delegation which might wish to update the copy of the fourth 
revision, the following table indicates how the relevant pages of the document circulated as Job 
No. 5713 should be replaced by the page s reproduced in the attachment to this note:  
 
Articles of the Agreement  replace Job No. 5713, pages  with the attached pages  
Article I:1, 2  2 2 
Article II:4  6 3 
Article II, new paragraph  7 4 
Article VI:1, 2  21-22 5–6 
Article VI:3, 4  24 7 
Article VII:3  26 8 
Article IX:1  32–34 9-11 
Article IX:7, 8  38 12-13 
Article XX:1  70 14 
Article XXIV:6  83-85 15-17 
 
 
 
* English only . 
** Pursuant to the relevant Decision of the Committee on Government Procurement ( GPA/CD/5  
(16/11/2023)), this document (informal document symbol: negs18 ) was derestricted on 8 November 2023.  GPA/TN1994/2/Rev.4/Add.1  
- 2 - 
  ATTACHMENT  
Article I:1, 2  
 
Scope and Coverage  
 
AGREEMENT ON GOVERNMENT  
PROCUREMENT (1994)  PROPOSED MODIFICATIONS  
1. This Agreement applies to any law, 
regulation, procedure or practice regarding any 
procurement by entities covered by this 
Agreement, as specified in Appendix I.1 
 
1 For each Party, Appendix I is divided into five 
Annexes:  
 - Annex 1 contains central government 
entities.  
 - Annex 2 contains sub -central 
government entities.  
 - Annex 3 contains all other entities that 
procure in accordance with the 
provisions of this Agreement.  
 - Annex 4 specifies services, whether 
listed positively or negatively, cover ed 
by this Agreement.  
 - Annex 5 specifies covered construction 
services.  
Relevant thresholds are specified in each Party's 
Annexes.  1. This Agreement applies to any law, 
regulation, procedure or practice regarding 
any procurement falling within the scope of 
Article III, paragraph  8 of the GATT and 
Article  XIII, paragraph  1 of GATS by 
entities covered by this Agreement, as 
specified in Appendix  I. 
[EC – GPA/W/87 ] 
 
 
Comments  
 
• This Article should contain a definition of the term "government procurement" which focuses 
on the status of the end -users rather than the purchasing agent.  [Hong Kong, China ] Some 
specific suggestions with respect to this comment should be provided . [US] 
• Consideration should be given to whether the current definitions in the GATT and the GATS 
are adequate or whether a further definition of "government procurement" should be 
developed.  [US] 
• A reference to the current definitions in GATT and GATS is necessary to ensure that the 
inclusion of a definition of "go vernment procurement" in the GPA does not lead to a situation 
in which government procurement is not covered by any WTO rules.  [EC] 
• The proposed modification is intended to avoid misunderstandings with regard to the meaning 
of public procurement without ac tually defining the term . This modification is not intended to 
have the effect of precluding existing derogations, for instance, reciprocity -based derogations, 
under the current Agreement.  [EC in response to clarification sought from Japan and Hong 
Kong, C hina] GPA/TN1994/2/Rev.4/Add.1  
- 3 - 
  AGREEMENT ON GOVERNMENT 
PROCUREMENT (1994)  PROPOSED MODIFICATIONS  
2. This Agreement applies to procurement by 
any contractual means, including through such 
methods as purchase or as lease, rental or hire 
purchase, with or without an option to buy, 
including any combination of products and 
services.   
 
Comments  
 
• The paragraph should include a reference to forms of procurement under new phenomena 
(partnerships between private and public sectors, multiplication of "Build Operate Transfer" 
(BOT) operations, joint ventures).  [Job No. 5074]  GPA/TN1994/2/Rev.4/Add.1  
- 4 - 
  Article II:4  
 
Valuation of Contracts  
 
AGREEMENT ON GOVERNMENT 
PROCUREMENT (1994)  PROPOSED MODIFICATIONS  
4. If an individual requirement for a 
procurement results in the award of more than 
one contract, or in contracts being awarded in 
separate parts, the basis for valuation shall be 
either:  
  
(a) the actual value of similar recurring 
contracts concluded over the 
previous fiscal year or 12 months 
adjusted, where possible, for 
anticipated change s in quantity and 
value over the subsequent 
12 months ; or 
  
(b) the estimated value of recurring 
contracts in the fiscal year or 
12 months subsequent to the initial 
contract.   
 
Comments:  
 
• What is meant by the reference to a 12 months period ? If the final value of a contract which 
runs for more than one year, for example, a road maintenance contract, is unknown until the 
works have been completed, should the basis of coverage be the estimated value for one year 
or the value for the full period of the contract ? Should the contract be broken down into 
one-year periods because of the reference to 12 months in subparagraphs (a) and (b) ? [Hong 
Kong, China]  
 
 GPA/TN1994/2/Rev.4/Add.1  
- 5 - 
  Article II  
 
Valuation of Contracts  
 
AGREEMENT ON GOVERNMENT 
PROCUREMENT (1994)  PROPOSED MODIFICATIONS  
 new paragraph  
 
For contracts of an indefinite value, or for 
contracts involving the award of a contract 
to multiple suppliers or service providers, 
the basis for valuation shall be either:  
 
a) the maximum total estimated 
value of the  procurement that 
could be awarded under the 
contract ; or 
b) [where the total estimated value 
is not stated, [Singapore – 
Job No. 5271]]  the estimated 
value of the contract shall 
automatically be considered to 
be above the threshold values 
provided for in the  national 
annexes to the GPA for the 
purposes of coverage under the 
Agreement.  
[US – Job No. 2795]  
 
Comments  
 
• How would the proposed provision apply to low value contracts, for example those entered 
into by small local authorities ? Under such contracts, even over a period of several years, the 
threshold values stipulated in the Agreement may not be exceeded.  [Norway, Canada]  
• In order to provide certainty on the application of the Agreement in cases of low -value 
contracts, the concept of maximum  total estimated value in subparagraph  (a) could be 
elaborated . It might be possible to make a determination that the maximum total estimated 
value of small -value contracts would not exceed the GPA thresholds.  [US] 
• The total estimated value of a contract i s not necessarily published.  [Canada]  
• How would the existing paragraphs 4, 5 and 6 and the proposal for a new paragraph fit 
together and would there be a need for further amendments in light of the discussion on 
framework agreements.  [Canada ; Hong Kong, Ch ina] 
 
  GPA/TN1994/2/Rev.4/Add.1  
- 6 - 
  Article VI:1, 2  
 
Technical Specifications  
 
AGREEMENT ON GOVERNMENT 
PROCUREMENT (1994)  PROPOSED MODIFICATIONS  
1. Technical specifications laying down the 
characteristics of the products or services to be 
procured, such as quality, performance, safety 
and dimensions, symbols, terminology, 
packaging, marking and labelling, or the 
processes and methods for their production and 
requirements relating to conformity assessment 
procedures prescribed by procuring entities, shall 
not be prepa red, adopted or applied with a view 
to, or with the effect of, creating unnecessary 
obstacles to international trade.  
 1. Technical specifications laying down 
the characteristics of the products or 
services to be procured, such as quality, 
performance, saf ety and dimensions, 
symbols, terminology, packaging, marking 
and labelling, or the processes and methods 
for their production and requirements 
relating to conformity assessment 
procedures prescribed by procuring 
entities, shall comply with the principles 
laid down in Article III, paragraph  0 and in 
particular ensure the principle of open and 
effective competition and shall not be 
prepared, adopted or applied with a view to, 
or with the effect of, creating unnecessary 
obstacles to international trade.  
[EC – GPA/W/87 ; Hong Kong, China]  
 
2. Technical specifications prescribed by 
procuring entities shall, where appropriate:  
 
(a) be in terms of performance rather 
than design or descriptive 
characteristics ; and 
 
(b) be based on international standards, 
where such exist; otherwise, on 
national technical regulations3, 
recognized national standards4, or 
building codes.  
 
3 For the purpose of this Agreement, a technical 
regulation is a document which lays down 
characteristics of a product or a service or their related 
processes and production methods, including the 
applicable administrative provisions, with which 
compliance is mandatory . It may also include or deal 
exclusively with terminology, symbols, packaging, 
marking or labeling requirements as they apply to a 
produ ct, service, process or production method.  
 
4 For the purpose of this Agreement, a standard is a 
document approved by a recognized body, that 
provides, for common and repeated use, rules, 
guidelines or characteristics for products or services or 
related pr ocesses and production methods, with which 
compliance is not mandatory . It may also include or deal 
exclusively with terminology, symbols, packaging, 
marking or labeling requirements as they apply to a 
product, service, process or production method.  This means that at least the following will 
apply:  
(a) technical specifications shall be 
formulated, where possible in 
terms of performance 
requirements rather than design 
or descriptive characteristics;  
[EC – GPA/W/87 ; Singapore – Job 
No. 5271]  
 
(b) in all cases pro curing entities 
shall not be able to exclude bids 
which include products, services 
or works which comply with 
appropriate international 
standards for reasons relating to 
the non -compliance with 
technical requirements covered 
by those standards;  
[EC – GPA/W/87 ; Singapore – Job 
No. 5271]  
 
(c) procuring entities shall not 
reject bids which [do not comply 
with the standard, regulation or 
code to which the technical 
specifications refer, but do[EC – 
GPA/W/87 ]] meet the essential 
requirements thereof and are fit 
for the purp ose intended.  
[EC – GPA/W/87 ; Singapore – Job 
No. 5271]  
 
 GPA/TN1994/2/Rev.4/Add.1  
- 7 - 
  Comments  
 
• The second sentence with subparagraphs ("This means …") should be deleted.  [Hong Kong, 
China ; Korea].  
• The meaning of the term "unnecessary obstacles to international trade" should be clarified.  
[Job No. 5074]  
• Subparagraphs (b) and (c) of the EC proposal are directly contradictory . The combined effect 
of subparagraphs  (b) and  (c) nullifies the requirement to use international standards because 
bids whether they meet international standards or not,  cannot be rejected . Subparagraph (c) 
should focus on essential requirements . It appears to make more sense to refer to "essential 
requirements" in subparagraph (c).  [Singapore - Job No. 5271]  
• The implications of the use of the term "where possible" with r egard to the use of performance 
requirements instead of the term "where appropriate" in the current text should be clarified.  
[US] 
• It is important that technical specifications are developed in a way that ensures, to the extent 
possible, that they focus on  the end -needs of the procuring entity rather than use 
designed -based specifications which would limit competition.  [US] 
• Reference to international standards may place excessive restrictions on procuring entities' 
exercise of discretion in formulating spec ifications to suit their needs.  [US] There is still 
considerable ambiguity associated with what constitutes an "international standard" and the 
procedures according to which those standards are set.  [Korea, US]  The objections that have 
been raised regardin g the definition of "international standards" also apply in relation to the 
current provisions.  [EC] 
• Subparagraph 2(b) of the current text should be deleted because the majority of international 
standards are based on design or description rather than on p erformance . International 
standards should be taken into account to the extent that they allow the achievement of the 
objective and performance sought . The EC approach provides that technical specifications 
must be prescribed with their end -use in mind . Accordingly, the use of international standards 
would become much less important.  [EC] 
• Subparagraph (b) should make reference to voluntary compliance with market -based 
standards instead of international standards.  [US] 
• The proposal should be clarified whethe r an implication of a requirement on procuring entities 
to accept specifications that comply with international standards would be the delegation of 
the certification process to an independent expert.  [Japan]  
 GPA/TN1994/2/Rev.4/Add.1  
- 8 - 
  Article VI:3, 4  
 
Technical Specifications  
 
AGREEMENT ON GOVERNMENT 
PROCUREMENT (1994)  PROPOSED MODIFICATIONS  
3. There shall be no requirement or reference 
to a particular trademark or trade name, patent, 
design or type, specific origin, producer or 
supplier, unless there is no sufficiently precise or 
intelligible way of describing the procurement 
requirements and provided that words such as "or 
equivalent" are included in the tender 
documentation.  
  
 
Comments  
 
• Paragraphs  1 and 2, which relate more to non -discrimination, should be separated from 
paragraph  3 describing the types of procurement procedures and be placed in Article  III. 
[Job No. 5074]  
AGREEMENT ON GOVERNMENT 
PROCUREMENT (1994)  PROPOSED MODIFICATIONS  
4. Entities shall not seek or accept, in a  
manner which would have the effect of precluding 
competition, advice which may be used in the 
preparation of specifications for a specific 
procurement from a firm that may have a 
commercial interest in the procurement.  
  
 
• The location of Article VI shoul d be changed in order to reflect the close association of the 
provisions on technical specifications with those on tender documentation.  [Job No. 5074]  
• Paragraphs 3 and 4 of the current text could be maintained subject to certain conditions.  [EC] 
 GPA/TN1994/2/Rev.4/Add.1  
- 9 - 
  Article VII:3  
 
Tendering Procedures  
 
AGREEMENT ON GOVERNMENT 
PROCUREMENT (1994)  PROPOSED MODIFICATIONS  
3. For the purposes of this Agreement:  
 3. For the purposes of this Agreement:  
 (a) Open tendering procedures are those 
procedures under which all 
interested suppliers may submit a 
tender.  
  (a) Open tenders are those which 
are posted in a medium which is 
[in the public domain] [readily 
available to both local and 
foreign suppliers], and which all 
interested suppliers may submit 
a tender.  
 
 (b) Selective tendering procedures are 
those procedures under which, 
consistent with paragraph 3 of 
Article  X and other relevant 
provisions of this Agreement, those 
suppliers invited to do so by the 
entity may submit a tender.  
  (b) Selective tenders are those  
which, consistent with 
paragraph  3 of Article X and 
other relevant provisions of this 
Agreement, selected suppliers 
are invited to do so by the 
entity, and the information on 
the tender is not posted in a 
medium which is [in the public 
domain] [readily av ailable to 
both local and foreign 
suppliers].  
 
 (c) Limited tendering procedures are 
those procedures where the entity 
contacts suppliers individually, only 
under the conditions specified in 
Article  XV. 
  (c) Limited tenders are those where 
the entity contacts suppliers 
individually, only under the 
conditions specified in 
Article  XV. 
[Singapore – Job No. 3772]  
 
 
Comments  
 
• With regard to the proposed subparagraph (b), it may not be appropriate to define the 
procedure in terms of the medium throug h which information on selective tendering 
opportunities is provided as in most cases of selective tendering notifications are published in 
the same way as for open tendering procedures . The Agreement should not imply that 
selective tendering procedures do  not involve publication of tender notices.  [US] 
 GPA/TN1994/2/Rev.4/Add.1  
- 10 - 
  Article IX:1  
 
Invitation to Participate Regarding Intended Procurement  
 
Comments  
 
• The terms "invitation to participate for all cases of intended procurement", "notice of proposed 
procurement", "notice of planned procurement" and "notice regarding a qualification system" 
should be clarified.  
• A footnote should be added defining "publication" to include either electronic or paper 
publication of notices and to indicate that electronic publication is  on the Internet or in one 
location and is accessible worldwide by telephone.  
AGREEMENT ON GOVERNMENT 
PROCUREMENT (1994)  PROPOSED MODIFICATIONS  
1. In accordance with paragraphs  2 and 3, 
entities shall publish an invitation to participate 
for all cases o f intended procurement, except as 
otherwise provided for in Article  XV (limited 
tendering) . The notice shall be published in the 
appropriate publication listed in Appendix  II. 
 1. In accordance with paragraphs 2 and 
3, entities shall publish an invitation to 
participate for all cases of intended 
procurement, except as otherwise provided 
for in Article XV (limited tendering) . The 
notice shall be published through means 
which offer the widest possible and 
non-discriminatory access to interested 
suppliers and service providers from all 
Parties to this Agreement ; these means 
shall be accessible [free of charge  [delete 
Singapore – Job No. 5271] ] through a 
single point of access.  
Each Party shall notify to the other Parties 
this single point of access.  [Entities shall 
not charge for access to invitations to 
participate  [Singapore – Job No. 5271 ]] 
[EC – GPA/W/87 ; Singapore – Job 
No. 5271]  
 
 
Comments  
 
With regard to the proposed requirement that procurement notices should be provided "free of 
charge":  
 
• This proposal raises concerns.  [Hong Kong, China ] Would there be a benefit by shifting the 
costs of publication from suppliers to taxpayers ? [Canada]  
• The intent of the Additional wording by Singapore is to explicitly state what is provided free 
of charge, as opposed to a blanket free of charge formulation . The telephone line, the 
computer, the Internet Service Provider fees are not free of charge . The current subparagraph 
6(g) of Article  IX also refers to "the amount and terms of payment of any sum payable for the 
tender documentation" . Hence, it would be better to explicitly state what is provided free of 
charge.  [Singapore – Job No. 5271]  
 GPA/TN1994/2/Rev.4/Add.1  
- 11 - 
  With regard to other points:  
 
• The establishment of "a single point of access" is technically feasible . Howeve r, it is 
questionable whether the benefits would be worth the significant cost and undue burden 
associated with introducing this system for Parties with decentralised systems and for 
developing countries.  [US] 
• The term "widest possible access" has been use d to avoid referring to the Internet in 
recognition of the fact that other technological advance may emerge which also promote 
transparency.  [EC] 
• The reference to the term "widest possible access" suggests that the publication of 
procurement notices must b e published through the use of information technology . The use 
of information technology should be optional.  [Japan, Korea]  
• The intention underlying the proposed text is not to make the use of information technology 
mandatory . Traditional means of publicat ion can also be used provided that they are easily 
accessible.  [EC] 
 
  GPA/TN1994/2/Rev.4/Add.1  
- 12 - 
  Article IX  
 
Invitation to Participate Regarding Intended Procurement  
 
AGREEMENT ON GOVERNMENT 
PROCUREMENT (1994)  PROPOSED MODIFICATIONS  
 1. Except as provided for in Article XV 
(provisions for the use of limited tendering 
procedures) and paragraph  3 of this Article 
(provisions for the use of selective 
tendering procedures by Annexes  2 and  3 
entities), entities shall publish a notice of 
intended procurement for each contract to 
be awarded . The notice shall be published 
in the appropriate publication listed in 
Appendix II.  
[United States – GPA/W/85 ] 
 
 
Comments  
 
• The aim of the amendment is to provide more flexibility for Annex 2 and 3 entities . The 
proposed amendment would allow those entities to either provide the "normal" notification as 
provided for in paragraph 2 of the proposal or, in lieu of that, Annex 2 and 3 entities would 
be able to publish an annual notification informing the public and suppliers of their 
procurement plans during that year.  [US] 
• The proposal aims at eliminating several undefined terms that are used in the current 
Agreemen t to refer to tender notices issued by different types of entities and in different types 
of circumstances . In effect, the proposal combines the requirements for Annex 1, 2 and 3 
entities into one set of requirements for tender notices relating to open ten dering 
opportunities . Consequently, the type of information that must be provided by Annex 1 entities 
for open tendering notifications would be simplified . The proposal also attempts to ensure that 
the amount of information provided in notifications is at least equivalent to what is required 
under the current text for selective tendering procedures.  [US] 
• How would the proposed provisions deal with notices of invitation to tender under selective 
tendering procedures engaged in by Annex 1 entities ? More speci fically, clarification regarding 
the point at which Annex 1 entities must publish a notice is necessary.  [Canada]  
• The wording in paragraph 1 raises the question whether selective tendering procedures by 
Annex  2 and 3 entities would still be covered . If selective tendering procedures were to be no 
longer covered by Article IX, there is a question whether paragraph 3 of the US proposal 
(see below opposite the text of paragraph 9 of Article IX) is consistent.  [EC] 
• The proposal is intended to cover entities at all levels of government.  [US] 
• Clarification is required as to whether the notice referred to in the proposal is intended to be 
a notice of application for qualification or a notice to be issued at a second stage.  [Canada]  
 GPA/TN1994/2/Rev.4/Add.1  
- 13 - 
  Article IX:7, 8  
 
Invitation to Participate Regarding Intended Procurement  
 
AGREEMENT ON GOVERNMENT 
PROCUREMENT (1994)  PROPOSED MODIFICATIONS  
7. Each notice of planned procurement 
referred to in paragraph 3 shall contain as much 
of the information referred to in paragraph  6 as is 
available . It shall in any case include the 
information referred to in paragraph 8 and:  
  
 (a) a statement that interested suppliers 
should express their interest in the 
procurement to the entity;  
  
 (b) a contact point with the entity from 
which further  information may be 
obtained.  
  
8. For each case of intended procurement, the 
entity shall publish a summary notice in one of the 
official languages of the WTO . The notice shall 
contain at least the following information:  
 8. For each case of intended 
procurement, the entity shall publish a 
summary notice in one of the official 
languages of the WTO . The notice shall 
contain at least the following information:  
 
 (a) the subject matter of the contract;  
  (a) the subject -matter of the 
contract, i ncluding the relevant 
CPV code;  
 
 (b) the time -limits set for the submission 
of tenders or an application to be 
invited to tender ; and 
  (b) the time -limits set for the 
submission of tenders or an 
application to be invited to 
tender ; and 
 
 (c) the addresses from which documents 
relating to the contracts may be 
requested.  
  (c) the addresses from which 
documents relating to the 
contracts may be requested.  
[EC – GPA/W/87 ] 
 
Comments  
 
• The provisions of Article IX:8 should follow the provisions of Article XI:1 on publication of an 
invitation to participate.  [Job No.5074]  
• With regard to the reference to the relevant CPV code:  
• Reference to a national classification code should suffice as long as it is transparent.  [US] 
• The reference to CPV code should  be deleted.  [Singapore, US]  Many projects contain a mixture 
of CPV codes . In some projects, CPV code may not be available or applicable . Alignment to 
CPV codes would impose an unnecessary administrative burden and may not make much 
difference to the suppl iers/tenderers.  [US, Singapore]  
• Alternatively, the words "if applicable" should be added at the end of subparagraph 8(a).  
[Singapore – Job No. 5271]  
• A variety of classification systems are used by Parties for various purposes . The practicality of 
establish ing a common classification system applicable among the GPA Parties for all purposes 
is questionable.  [Canada]  GPA/TN1994/2/Rev.4/Add.1  
- 14 - 
  • While the establishment of a common classification system might be necessary, further 
consideration of the impact on existing systems is required . [Singapore]  
• The aim underlying the proposal is to come up with a system that is as transparent and 
efficient as possible . This cannot be achieved unless there is a common classification system . 
A common classification system will help suppliers to unders tand what a procuring entity 
wishes to purchase and will also facilitate the collection of accurate statistical data.  [EC] 
• The CPV code is more comprehensive than the Harmonized System of classification of goods . 
It covers the whole gamut of government pur chases of goods and services.  [EC in reply to a 
clarification sought by Switzerland]  
 GPA/TN1994/2/Rev.4/Add.1  
- 15 - 
  Article XX:1  
 
Challenge Procedures  
 
AGREEMENT ON GOVERNMENT 
PROCUREMENT (1994)  PROPOSED MODIFICATIONS  
Consultations  
  
1. In the event of a complaint by a supplier 
that there has been a breach of this Agreement in 
the context of a procurement, each Party shall 
encourage the supplier to seek resolution of its 
complaint in consultation with the procuring 
entity . In such instances the procuring entity shall 
accord impartial and timely consideration to any 
such complaint, in a manner that is not prejudicial 
to obtaining corrective measures under the 
challenge system.  
 1. In the event of a complaint by a 
supplier that there has been a breach of this 
Agreement in t he context of a procurement, 
each Party shall encourage the supplier to 
seek solution of its complaint in 
consultation with the procuring entity . In 
such instances the procuring entity shall 
accord impartial and timely consideration 
to any such complaint, in a manner that is 
not prejudicial to obtaining corrective 
measures under the challenge system . Such 
encouragement may take place in particular 
through the designation of one or more 
bodies which can offer their good advice in 
trying to solve the situatio n. 
[EC – GPA/W/87 ] 
 
 
Comments  
 
• The last sentence in this paragraph should be clarified . The division of labour between the new 
challenge bodies created under paragraphs 1 and 2 of the EC's proposed amendment and the 
challenge bodies referred to in paragraph 6 o f the existing agreement should be clarified.  
[Japan ; Hong Kong, China]  
• It was not intended that the proposed amendment would have the result of imposing a new 
authority on procuring entities . Rather, the intent was to have a central point to address any 
problems in an unbureaucratic fashion, informally and rapidly . It would be left to Parties to 
decide how to organize these bodies.  [EC] 
• The need for such prescriptive provisions is doubtful.  [Hong Kong, China]  
• Rather than create a completely new body, the relevant aspects of the approach proposed by 
the EC could be incorporated into the existing procedures.  [Singapore]  
• The proposal is not intended to make it compulsory for Members to create new bodies . Rather, 
the intention is to de signate bodies that may already be in place . This proposal was made in 
recognition of the fact that resort to a court is not an ideal solution for government 
procurement disputes.  [EC] Settling of government procurement disputes outside legal judicial 
systems will afford increased flexibility in dispute settlement procedures.  
 GPA/TN1994/2/Rev.4/Add.1  
- 16 - 
  Article  XXIV 
 
Final Provisions  
 
AGREEMENT ON GOVERNMENT 
PROCUREMENT (1994)  PROPOSED MODIFICATIONS  
 (b) Where a Party wishes, in exercise of 
its rights, to withdraw an entity from 
Appendix  I on the grounds that 
government control or influence over 
it has been effectively eliminated, 
that Party shall notify the 
Committee . Such modification shall 
become effective the day after the 
end of the following meeting of the 
Committee, provide d that the 
meeting is no sooner than 30 days 
from the date of notification and no 
objection has been made . In the 
event of an objection, the matter 
may be pursued in accordance with 
the procedures on consultations and 
dispute settlement contained in 
Article XXII. In considering the 
proposed modification to Appendix I 
and any consequential compensatory 
adjustment, allowance shall be made 
for the market -opening effects of the 
removal of government control or 
influence.  
 Where a Party wishes, in exercise of its 
rights, to withdraw an entity from 
Appendix  I on the grounds that government 
control or influence over it has been 
effectively eliminated, that Party shall 
notify the Committee . Such modification 
shall become effective the day after the end  
of the following meeting of the Committee, 
provided that the meeting is no sooner than 
30 days from the date of notification and no 
objection has been made . In the event of an 
objection, the matter may be pursued in 
accordance with the procedures on 
consu ltations and dispute settlement 
contained in Article XXII . In considering the 
proposed modification to Appendix  I, it 
shall be deemed that government control or 
influence over the entity in question has 
been effectively eliminated if all of the 
following conditions are met:  
 
 
Comments  
 
• In order to avoid any legal ambiguity regarding requests for compensation, subparagraph  6(b) 
would need to be modified as suggested above . [Japan]  
• The present provisions are a carefully balanced outcome of the neg otiations between Parties 
and reflects the uncertainties in market access opportunities which might be associated with 
the withdrawal of an entity from Appendix I, notwithstanding a claimed removal of 
government control or influence . Its purpose was to ens ure that any future changes to an 
agreed annex does not affect the negotiated balance.  [Job No. 5189]  
 GPA/TN1994/2/Rev.4/Add.1  
- 17 - 
  Article  XXIV 
 
Final Provisions  
 
AGREEMENT ON GOVERNMENT 
PROCUREMENT (1994)  PROPOSED MODIFICATIONS  
  (a) the government does not 
provide the entity with any 
special and exclusive right to 
operate;  
 (b) the government does not 
appoint more than half of the 
members of the entity's 
managing board which has the 
power to decide on its 
operations ; and 
 (c) the operation of the entity is 
financed by i ts business 
revenue, not by government 
subsidies or equity infusion.  
Unless these conditions are met, a 
compensatory adjustment may be sought 
for any remaining government control or 
influence.  
[Japan – Job No. 860]  
 
 
Comments  
 
• The proposed criteria may not be the only ones for establishing that an entity was no longer 
under government control or influence . There might be other criteria that might be used as 
evidence of market opening effects.  [Job No. 5189]  
• The proposal attempts to define the conditions under which Parties would relinquish their right 
to seek consultation with other Parties about a proposed modification for the removal of an 
entity from the Agreement's coverage . Parties should not be denied that right.  [US] 
• The appli cation of the criteria listed in Japan's proposal would facilitate consultations between 
Parties.  [Japan]  
• Regarding the requirement in subparagraph (a) that the government not provide the entity 
with any special or exclusive rights, a wide variety of priva te companies are granted such 
rights by the government . For instance a corner store might be authorized to sell fishing 
licences or postage stamps.  [Job No. 5189]  
• It is unclear whether a company that is granted a special right to operate, for instance a bu s 
company that is no more within the government sphere given a franchise to operate by the 
government on certain routes in competition with other forms of transport, would fall within 
the scope of proposed subparagraph (a).  [Hong  Kong, China]  
• An effect of proposed paragraph (b) would be that it would not allow consideration of 
compensatory adjustment if, for example, an entity that was unilaterally withdrawn from 
Appendix  I still had 48 % government membership on its board.  [US] 
• The requirement that the gove rnment in subparagraph (b) might not be sufficient to ensure 
that the government control or influence is effectively removed . What would be an appropriate 
percentage in this respect ? [Job No. 5189]  GPA/TN1994/2/Rev.4/Add.1  
- 18 - 
  • With regard to the criteria in subparagraph (c), in some c ircumstances, government subsidies 
to privatized entities may still be necessary if the subsidies are linked to lowering the cost of 
provision of basic services and where the beneficiaries are the members of the general public.  
[Korea]  
• The criterion in sub paragraph (c) might not be appropriate in all cases . For instance, a number 
of entities in both Annexes 1 and 3 of the United States, while operating on the basis of their 
own business revenues, continue to be considered as government agencies conducting 
government procurement . If the entity was mainly financed by its business revenue, some 
non-voting equity infusions by the government would not affect the degree of government 
control or influence.  [Job No. 5189]  
__________  