WORLD TRADE
ORGANIZATIONS/WPPS/4
10 December 1998
(98-4965)
Working Party on Professional Services
REPORT TO THE COUNCIL FOR TRADE IN SERVICES ON THE DEVELOPMENT OF
DISCIPLINES ON DOMESTIC REGULATION IN THE ACCOUNTANCY SECTOR
I. TERMS OF REFERENCE
1. The mandate of the Working Party on Professional Services (WPPS) for the development of
disciplines on domestic regulations in the accountancy sector is found in the Ministerial Decision on
Professional Services (WTO document S/L/3, 4 April 1995), as attached.
II. DEVELOPMENT OF MULTILATERAL DISCIPLINES ON DOMESTIC
REGULATIONS IN THE ACCOUNTANCY SECTOR
2. Commencing work in July 1995, the WPPS held twenty-four formal and several informal
meetings.
3. The initial phase of work by the WPPS consisted of the collection and analysis of data and
studies of domestic regulation in the accountancy sector.  In this regard, several seminars were
organized.  A questionnaire on specific aspects of domestic regulation was circulated to Members,
and a synthesis of questionnaire responses was prepared by the Secretariat.  The WPPS also worked
on development of the non-binding Guidelines for Mutual Recognition Agreements or Arrangements
in the Accountancy Sector  ;  these were completed and issued in May 1997 (WTO document S/L/38,
28 May 1997).
4. The next phase of work consisted of the submission of proposed disciplines by several
Members (WTO documents S/WPPS/W/15-19).  These proposals were consolidated by the
Secretariat into an informal note.
5. During a series of meetings, the minutes of which are contained in documents S/WPPS/M/11-
24, draft disciplines were discussed, clarified and revised by Members.  Ten revisions of thedisciplines were prepared by the Secretariat.  A consensus was achieved and the final version, entitled
Disciplines on Domestic Regulation in the Accountancy Sector, (S/WPPS/W/21) is attached.
Separately, on the basis of discussions, a Chairman's Note was developed on the relationship between
Article VI and Articles XVI and XVII.  This also is attached (Job No. 6496, 25 November 1998).
6. Members extensively discussed the question of potential legal forms for adoption of the
accountancy disciplines.  The outcome of the discussions is the attached draft Council Decision
(Job No. 6481/Rev.1), which the WPPS now recommends for adoption.
ATTACHMENTS
* Draft Council Decision (Job No. 6481/Rev.1)
* The Disciplines (S/WPPS/W/21)
* Chairman's Note on discussion of Articles VI, XVI and XVII (Job No. 6496)
* Decision on Professional Services (S/L/3)S/WPPS/4
Page 2
ATTACHMENTS
Job No. 6481/Rev.1 4 December 1998
Council for Trade in Services
DECISION ON DISCIPLINES RELATING TO THE ACCOUNTANCY SECTOR
-  DRAFT  -
The Council for Trade in Services,
Having regard to the Decision on Professional Services adopted by the Council on 1 March
1995 (S/L/3) and the recommendations of the Working Party on Professional Services contained in
document ---.
Decides as follow,
1. To adopt the text of the Disciplines on Domestic Regulation in the Accountancy Sector
contained in document ---.  These disciplines are to be  applicable to Members who have entered
specific commitments on accountancy in their schedules.
2. The Working Party on Professional Services shall continue its work pursuant to the terms of
reference contained in the Decision on Professional Services (S/L/3 ) taking account of any decisions
which may be taken in the Council regarding work on Article VI:4.  In doing so the Working Party
shall aim to develop general disciplines for professional services, while retaining the possibility to
develop or revise sectoral disciplines, including accountancy.  No later than the conclusion of the
forthcoming round of services negotiations, the disciplines developed by the WPPS are intended to be
integrated into the General Agreement on Trade in Services (GATS).
3. Commencing immediately and continuing until the formal integration of these disciplines into
the GATS, Members shall, to the fullest extent consistent with their existing legislation, not take
measures which would be inconsistent with these disciplines.S/WPPS/4
Page 3
WORLD TRADE
ORGANIZATIONRESTRICTED
S/WPPS/W/21
30 November 1998
(98-4805)
Working Party on Professional Services
DISCIPLINES ON DOMESTIC REGULATION
IN THE ACCOUNTANCY SECTOR
-  DRAFT  -
I. OBJECTIVES
1. Having regard to the Ministerial Decision on Professional Services, Members have agreed to
the following disciplines elaborating upon the provisions of the GATS relating to domestic regulation
of the sector.  The purpose of these disciplines is to facilitate trade in accountancy services by
ensuring that domestic regulations affecting trade in accountancy services meet the requirements of
Article VI:4 of the GATS.  The disciplines therefore do not address measures subject to scheduling
under Articles XVI and XVII of the GATS, which restrict access to the domestic market or limit theapplication of national treatment to foreign suppliers.  Such measures are addressed in the GATS
through the negotiation and scheduling of specific commitments.
II. GENERAL PROVISIONS
2. Members shall ensure that measures not subject to scheduling under Articles XVI or XVII of
the GATS,
1 relating to licensing requirements and procedures, technical standards and qualification
requirements and procedures are not prepared, adopted or applied with a view to or with the effect of
creating unnecessary barriers to trade in accountancy services.  For this purpose, Members shall
ensure that such measures are not more trade-restrict ive than necessary to fulfil a legitimate objective.
Legitimate objectives are, inter alia , the protection of consumers (which includes all users of
accounting services and the public generally), the quality of the service, professional competence, and
the integrity of the profession.
III. TRANSPARENCY
3. Members shall make publicly available, including through the enquiry and contact points
established under Articles III and IV of the GATS, the names and addresses of competent authorities
(i.e. governmental or non-governmental entities res ponsible for the licensing of professionals or firms,
or accounting regulations).
                                                     
1 The text of GATS Articles XVI and XVII is reproduced in an appendix to this documentS/WPPS/4
Page 4
4. Members shall make publicly available, or shall ensure that their competent authorities make
publicly available, including through the enquiry and contact points:
(a) where applicable, information describing the activities and professional titles which
are regulated or which must comply with specific technical standards;
(b) requirements and procedures to obtain, renew or retain any licences or professional
qualifications and the competent authorities' monitoring arrangements for ensuring
compliance;
(c) information on technical standards;  and
(d) upon request, confirmation that a particular professional or firm is licensed to practise
within their jurisdiction.
5. Members shall inform another Member, upon request, of the rationale behind domestic
regulatory measures in the accountancy sector, in re lation to legitimate objectives as referred to in
paragraph 2.
6. When introducing measures which significantly affect trade in accountancy services,
Members shall endeavour to provide opportunity for comment, and give consideration to such
comments, before adoption.
7. Details of procedures for the review of administrative decisions, as provided for by
Article VI:2 of the GATS, shall be made public, including the prescribed time-limits, if any, for
requesting such a review.
IV. LICENSING REQUIREMENTS
8. Licensing requirements (i.e. the substantive requirements, other than qualification
requirements, to be satisfied in order to obtain or renew an authorization to practice) shall be pre-
established, publicly available and objective.
9. Where residency requirements not subject to scheduling under Article XVII of the GATS
exist, Members shall consider whether less trade restrictive means could be employed to achieve the
purposes for which these requirements were set, taking into account costs and local conditions.
10. Where membership of a professional organisation is required, in order to fulfil a legitimate
objective in accordance with paragraph 2, Members shall ensure that the terms for membership are
reasonable, and do not include conditions or pre-conditions unrelated to the fulfilment of such an
objective.  Where membership of a professional organization is required as a prior condition for
application for a licence (i.e. an authorization to practice), the period of membership imposed before
the application may be submitted shall be kept to a minimum.
11. Members shall ensure that the use of firm names is not restricted, save in fulfilment of a
legitimate objective.
12. Members shall ensure that requirements regarding professional indemnity insurance for
foreign applicants take into account any existing insu rance coverage, in so far as it covers activities in
its territory or the relevant jurisdiction in its territory and is consistent with the legislation of the host
Member.S/WPPS/4
Page 5
13. Fees charged by the competent authorities shall reflect the administrative costs involved, and
shall not represent an impediment in themselves to practising the relevant activity. This shall not
preclude the recovery of any additional costs of verification of information, processing and
examinations.  A concessional fee for applicants from developing countries may be considered.
V. LICENSING PROCEDURES
14. Licensing procedures (i.e. the procedures to be followed for the submission and processing of
an application for an authorization to practise) shall be pre-established, publicly available and
objective, and shall not in themselves constitute a restriction on the supply of the service.
15. Application procedures and the related documentation shall be not more burdensome than
necessary to ensure that applicants fulfil qualification and licensing requirements.  For example,
competent authorities shall not require more documen ts than are strictly necessary for the purpose of
licensing, and shall not impose unreasonable requirements regarding the format of documentation.
Where minor errors are made in the completion of applications, applicants shall be given the
opportunity to correct them.  The establishment of the authenticity of documents shall be sought
through the least burdensome procedure and, wherever possible, authenticated copies should be
accepted in place of original documents.
16. Members shall ensure that the receipt of an application is acknowledged promptly by the
competent authority, and that applicants are in formed without undue delay in cases where the
application is incomplete.  The competent author ity shall inform the applicant of the decision
concerning the completed application within a reasonable time after receipt, in principle within six
months, separate from any periods in respect of qualification procedures referred to below.
17. On request, an unsuccessful applicant shall be informed of the reasons for rejection of the
application.  An applicant shall be permitted, within reasonable limits, to resubmit applications for
licensing.
18. A licence, once granted, shall enter into effect immediately, in accordance with the terms and
conditions specified therein.
VI. QUALIFICATION REQUIREMENTS
19. A Member shall ensure that its competent authorities take account of qualifications acquired
in the territory of another Member, on the basis of equivalency of education, experience and/or
examination requirements.
20. The scope of examinations and of any other qualification requirements shall be limited to
subjects relevant to the activities for which authorization is sought.  Qualification requirements mayinclude education, examinations, practical training, experience and language skills.
21. Members note the role which mutual recognition agreements can play in facilitating the
process of verification of qualifications and/ or in establishing equivalency of education.
VII. QUALIFICATION PROCEDURES
22. Verification of an applicant's qualifications acquired in the territory of another Member shall
take place within a reasonable time-frame, in principle within six months and, where applicants'S/WPPS/4
Page 6
qualifications fall short of requirements, shall result in a decision which identifies additional
qualifications, if any, to be acquired by the applicant.
23. Examinations shall be scheduled at reasonably frequent intervals, in principle at least once a
year, and shall be open for all eligible applicants, including foreign and foreign-qualified applicants.
Applicants shall be allowed a reasonable period for the submission of applications.  Fees charged bythe competent authorities shall reflect the administrative costs involved, and shall not represent an
impediment in themselves to practising the relevant activity.  This shall not preclude the recovery of
any additional costs of verification of informati on, processing and examinations.  A concessional fee
for applicants from developing countries may be considered.
24. Residency requirements not subject to scheduling under Article XVII of the GATS shall not
be required for sitting examinations.
VIII.  TECHNICAL STANDARDS
25. Members shall ensure that measures relating to technical standards are prepared, adopted and
applied only to fulfil legitimate objectives.
26. In determining whether a measure is in conformity with the obligations under paragraph 2,
account shall be taken of internationally recognized standards of relevant international organizations
2
applied by that Member.
                                                     
2 The term "relevant international organizations" refers to international bodies whose membership is
open to the relevant bodies of at least all Members of the WTO.S/WPPS/4
Page 7
APPENDIX
For the purpose of clarity, the text of GATS Articles XVI and XVII is reproduced below.
Article XVI
Market Access
1. With respect to market access through the modes of supply identified in Article I, each
Member shall accord services and service suppliers of any other Member treatment no less favourable
than that provided for under the terms, limitati ons and conditions agreed and specified in its
Schedule.1
2. In sectors where market-access commitments are undertaken, the measures which a Membershall not maintain or adopt either on the basis of a regional subdivision or on the basis of its entire
territory, unless otherwise specified in its Schedule, are defined as:
(a) limitations on the number of service suppliers whether in the form of numerical
quotas, monopolies, exclusive service suppliers or the requirements of an economic
needs test;
(b) limitations on the total value of service transactions or assets in the form of numerical
quotas or the requirement of an economic needs test;
(c) limitations on the total number of service operations or on the total quantity of service
output expressed in terms of designated numerical units in the form of quotas or the
requirement of an economic needs test;
2
(d) limitations on the total number of natural persons that may be employed in a
particular service sector or that a service supplier may employ and who are necessaryfor, and directly related to, the supply of a specific service in the form of numerical
quotas or the requirement of an economic needs test;
(e) measures which restrict or require specific types of legal entity or joint venture
through which a service supplier may supply a service;  and
(f) limitations on the participation of foreign capital in terms of maximum percentage
limit on foreign share-holding or the total value of individual or aggregate foreign
investment.
                                                     
1 If a Member undertakes a market-access commitment in relation to the supply of a service through the
mode of supply referred to in subparagraph 2(a) of Article I and if the cross-border movement of capital is an
essential part of the service itself,  that Member is thereby committed to allow such movement of capital.  If aMember undertakes a market-access commitment in relation to the supply of a service through the mode ofsupply referred to in subparagraph 2(c) of Article I, it is thereby committed to allow related transfers of capital
into its territory.
2 Subparagraph 2(c) does not cover measures of a Member which limit inputs for the supply of
services.S/WPPS/4
Page 8
Article XVII
National Treatment
1. In the sectors inscribed in its Schedule, and subject to any conditions and qualifications set
out therein, each Member shall accord to services and service suppliers of any other Member, in
respect of all measures affecting the supply of services, treatment no less favourable than that it
accords to its own like services and service suppliers.3
2. A Member may meet the requirement of paragraph 1 by according to services and service
suppliers of any other Member, either formally iden tical treatment or formally different treatment to
that it accords to its own like services and service suppliers.
3. Formally identical or formally different treatm ent shall be considered to be less favourable if
it modifies the conditions of competition in favour of services or service suppliers of the Member
compared to like services or service suppliers of any other  Member.
                                                     
3 Specific commitments assumed under this Article shall not be construed to require any Member to
compensate for any inherent competitive disadvantages which result from the foreign character of the relevant
services or service supplies.S/WPPS/4
Page 9
Job No. 6496
Working Party on Professional Services 25 November, 1998
DISCUSSION OF MATTERS RELATING TO ARTICLES XVI AND XVII OF THE GATS IN
CONNECTION WITH THE DISCIPLINES ON DOMESTIC REGULATION IN THE
ACCOUNTANCY SECTOR
Informal Note by the Chairman
1. For the purpose of transparency, this Note explains the method by which the Working Party
on Professional Services (WPPS) pursued its work with respect to the question of the types of
measures it would address in creating the disciplines in the accountancy sector.  For the avoidance of
any doubt, it is emphasised that this Note has no legal status.
2. In the course of work to develop multilateral disciplines on domestic regulation in the
accountancy sector, pursuant to paragraph 4 of Article VI of the GATS, the WPPS addressed a wide
range of regulatory measures which have an impact on trade in accountancy services. In discussing
the structure and content of the new disciplines, it became clear that some of these measures were
subject to other legal provisions in the GATS, most notably Articles XVI and XVII.  It was observed
that the new disciplines developed under Article VI:4 must not overlap with other provisions alreadyexisting in the GATS, including Articles XVI and XVII, as this would create legal uncertainty.  For
this reason, a number of the suggestions for disciplines were excluded from the text.
3. Although it was not in the mandate of the WPPS to provide an interpretation of GATS
provisions, the important relationship between the new disciplines and Articles XVI and XVII was
noted.  While these two Articles relate to the scheduling of specific commitments on measures falling
within their scope, the disciplines developed under Article VI:4 aim at ensuring that other types ofregulatory measures do not create unnecessary barriers to trade.  It has been noted that Article XVI
(Market Access) covers the categories of measures referred to in paragraph 2 (a) to (f), whether or not
any discrimination is made in their application between domestic and foreign suppliers.  Article XVII
(National Treatment) captures within its scope any measure that discriminates - whether de jure  or de
facto  - against foreign services or service suppliers in favour of like services or service suppliers of
national origin. A  Member scheduling commitments under Articles XVI and XVII has the right to
maintain limitations on market access and national treatment and inscribe them in its schedule.  On
the other hand, the disciplines to be developed under Article VI:4 cover domestic regulatory measures
which are not regarded as market access limitations as such, and which do not in principle
discriminate against foreign suppliers.  They are therefore not subject to scheduling underArticles XVI and XVII.  However, it is also recognized that for some categories of measures the
determination as to whether an individual measure falls under Article VI:4 disciplines or is subject to
scheduling under Article XVII will require careful consideration.S/WPPS/4
Page 10
4. The following types of measures affecting trade in accountancy services were raised by some
Members as examples of those which may be subject to negotiation and scheduling under
Articles XVI and XVII:
* Restrictions relating to the number of foreign accountants that can be employed, the number
of new licences to be issued, the legal form of establishment and the ownership of firms.
* Discriminatory requirements and procedures relating to the licensing of foreign individuals
and the establishment of natural persons and legal persons in the accountancy sector,
including the use of foreign and  international firm names.  Discriminatory elements which set
prior conditions unrelated to the ability of the supplier to provide the service when preparing,
adopting or applying licensing requirements.
* Discriminatory residency requirements or requirements for citizenship, including those
required for sitting examinations related to obtaining a licence to practice. Discriminatory
requirements for membership of a particular professional body as a prior condition for
application.
* Discriminatory treatment of applications from foreign service suppliers vis-à-vis domestic
applications including:  criteria relating to education, experience, examinations and ethics;
the overall degree of difficulty when testing competence of applicants;  the need for in-
country experience before  sitting examinations.
5. The above mentioning of these types of measures does not prejudge future negotiations,
which are mandated under Article XIX of the GATS.S/WPPS/4
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WORLD TRADE S/L/3
4 April 1995
ORGANIZATION (95-0800)
__________________________________________________________________________________
Trade in Services
DECISION ON PROFESSIONAL SERVICES
Adopted by the Council for Trade in Services on 1 March 1995
The Council for Trade in Services,
Recognizing  the impact of regulatory measures relating to professional qualifications,
technical standards and licensing on the expansion of trade in professional services;
Desiring  to establish multilateral disciplines with a view to ensuring that, when specific
commitments are undertaken, such regulatory measures do not constitute unnecessary barriers to the
supply of professional services;
Decides  as follows:
1. The work programme foreseen in paragraph 4 of Article VI on Domestic Regulation should
be put into effect immediately.  To this end, a Working Party on Professional Services shall beestablished to examine and report, with recommendations, on the disciplines necessary to ensure that
measures relating to qualification requirements and procedures, technical standards and licensing
requirements in the field of professional services do not constitute unnecessary barriers to trade.
2. As a matter of priority, the Working Party shall make recommendations for the elaboration of
multilateral disciplines in the accountancy sector, so as to give operational effect to specific
commitments.  In making these recommendations, the Working Party shall concentrate on:
(a) developing multilateral disciplines relating to market access so as to ensure that
domestic regulatory requirements are:  ( i) based on objective and transparent criteria,
such as competence and the ability to supply the service;  ( ii) not more burdensome
than necessary to ensure the quality of the service, thereby facilitating the effectiveliberalization of accountancy services;
(b) the use of international standards and, in doing so, it shall encourage the cooperation
with the relevant international organizations as defined under paragraph 5(b) of
Article VI, so as to give full effect to paragraph 5 of Article VII;
(c) facilitating the effective application of paragraph 6 of Article VI of the Agreement by
establishing guidelines for the recognition of qualifications.
In elaborating these disciplines, the Working Party shall take account of the importance of the
governmental and non-governmental bodies regulating professional services.
__________