Exceptions & Waivers
6/20/2016
Exceptions & Waivers
Subtitle
General Exceptions in GATT
Article XX (General Exceptions) of GATT 1994
recognizes that governments may need to apply
and enforce measures for purposes such as the
protection of public morals; human animal or plant
life and health; and the protection of national
treasures.
The GATT 1994 does not prevent governments from
adopting and enforcing such measures. However,
any measure adopted under the general exceptions
provisions must not constitute a means of arbitrary or
unjustifiable discrimination nor should it be a
disguised restrictions on international trade.
6/20/2016
GATT Article XX: General Exceptions
Subject to the requirement that such measures are
not applied in a manner which would constitute a
means of arbitrary or unjustifiable discrimination
between countries where the same conditions
prevail, or a disguised restriction on international
trade, nothing in this Agreement shall be construed to
prevent the adoption or enforcement by any
Member of measures:
a) necessary to protect public morals;
b) necessary to protect human, animal or plant life or
health;
c) relating to the importations or exportations of gold
or silver;
d) necessary to secure compliance with laws or regulations
which are not inconsistent with the provisions of this
Agreement, including those relating to customs enforcement,
the enforcement of monopolies operated under paragraph 4
of Article II and Article XVII, the protection of patents, trade
marks and copyrights, and the prevention of deceptive
practices;
e) relating to the products of prison labour;
f) imposed for the protection of national treasures or artistic,
historic or archaeological value;
6/20/2016
Continue:
g)relating to the conservation of exhaustible natural
resources if such measures are made effective in
conjunction with restrictions on domestic production or
consumption;
h) undertaken in pursuance of obligations under any
intergovernmental commodity agreement which
conforms to criteria submitted to Members and not
disapproved by them or which is itself so submitted
and not so disapproved;
j) involving restrictions on exports of domestic materials necessary to
ensure essential quantities of such materials to a domestic
processing industry during periods when the domestic price of such
materials is held below the world price as part of a governmental
stabilization plan; Provided that such restrictions shall not operate to
increase the exports of or the protection afforded to such domestic
industry, and shall not depart from the provisions of this Agreement
relating to non-discrimination;
k) essential to the acquisition or distribution of products in general or
local short supply; Provided that any such measures shall be
consistent with the principle that all Members are entitled to an
equitable share of the international supply of such products, and
that any such measures, which are inconsistent with the other
provisions of the Agreement shall be discontinued as soon as the
conditions giving rise to them have ceased to exist. The Members
shall review the need for this sub-paragraph no later than 30 June
1960.
6/20/2016
GATT Article XX permits Members to take certain
measures, otherwise prohibited by GATT provisions,
subject to stipulated conditions.
1) The first condition is that the contemplated measure
must fit under one of the 10 categories in subparagraphs (a) - (j) of Article XX. For example, subparagraphs (a), (b), and (d) indicate that the
measures sought to be taken by Members must be
necessary either to, protect public morals; human,
animal or plant life or health; or to secure
compliance with certain laws or regulations.
For those three categories, there is an imperative
"necessity" test that must be satisfied for the measures to
be consistent with Article XX. The determination of whether
a measure, though not indispensable, may nevertheless be
considered "necessary", involves a weighing and
balancing of factors, such as:
The importance of the common interests or values
protected by the measure;
The efficacy of the measure in achieving the intended
policies;
The impact of the measure on imports especially vis-à-vis
its like domestic products.
6/20/2016
Continue:
2) The second condition refers to the opening paragraph of
Article XX (commonly referred to as the "chapeau of Article
XX"). Measures covered under the General Exceptions must not
be applied in a manner that would constitute a means of
arbitrary or unjustifiable discrimination between countries where
the same conditions prevail, or a disguised restriction on
international trade.
Before certain measures are used to derogate from GATT rules,
they must meet the requirements of the chapeau i.e. they have
to be "applied" in a manner that does not create "arbitrary or
unjustifiable discrimination". The chapeau of Article XX of GATT
aims to prevent the use of derogation measures to unjustifiably
impede the market access rights of other WTO members.
Provisions of Article XX are to set out a two-level test that a
proposed measure must pass before it is deemed
consistent with Article XX, and therefore qualify as an
exception to the obligations in the GATT:
The first test is whether the policy fulfils the criteria in
Article XX (a)-(j);
The second test is whether, when it fulfils those criteria, it
satisfies the "Chapeau test". That is, if the measure is
being applied "arbitrarily", "unjustifiably", or as a
"disguised restriction on trade".
6/20/2016
General Exceptions in GATS
Article XIV of the GATS permits members to maintain restrictions
on services and service suppliers if the measure satisfies one of
the policy purposes in sub-paragraphs (a) - (e).
Furthermore, Article XIV GATS recognizes that members need to
maintain a balance between trade measures and other
legitimate policies and interests, such as the protection of the
health of its citizens.
GATS Article XIV is very similar to GATT Article XX, which governs
trade in goods. Certain measures, which would otherwise be
prohibited by other provisions of the GATS, can still be taken
provided two conditions are met:
1. The first condition is that the measure taken must fall into one
of the five categories in sub-paragraphs (a) to (e). For example,
sub-paragraphs (a), (b) and (c) indicate that the measures
must, in similar terms to GATT Article XX, be "necessary" either to
protect public morals, or to maintain public order (a specific
definition of this latter term is in the accompanying footnote); to
protect human health, animal or plant life or health; or to secure
compliance with certain laws or regulations.
as in GATT, a "necessity" test must be passed.
6/20/2016
Continue
2) As with GATT Article XX governing trade in goods, the
second condition is that the measure must satisfy the
chapeau of Article XIV. Measures covered by the GATS
General Exceptions provisions must not be "applied in a
manner which would constitute a means of arbitrary or
unjustifiable discrimination between countries where like
conditions prevails, or a disguised restriction on trade in
services ".
General Exceptions in TRIPS
There are no general exceptions as such under the TRIPS Agreement.
However, some provisions may apply to specify situations where protection is
not required. See for example Arts. 27.2, 27.3, 30 and 31 (patents), Article 17
(trademarks), and Article 13 (copyrights and related rights).
6/20/2016
Security Exceptions in the GATT
A WTO Member is allowed to take any action which it considers necessary
for the protection of its essential security interests or in pursuance of its
obligations under the United Nations Charter for the maintenance of
international peace and security. Members are not required to furnish
information the disclosure of which would be contrary to their essential
security interests.
GATT Article XXI: Security Exceptions
Nothing in this Agreement shall be construed: to require any Member to
furnish any information the disclosure of which it considers contrary to its
essential security interests; or to prevent any Member from taking any action
which it considers necessary for the protection of its essential security
interests
(i) relating to fissionable materials or the materials from which they are
derived;
(ii) relating to the traffic in arms, ammunition and implements of
war and to such traffic in other goods and materials as is carried
on directly or indirectly for the purpose of supplying a military
establishment;
(iii) taken in time of war or other emergency in international
relations; or to prevent any Member from taking any action in
pursuance of its obligations under the United Nations Charter for
the maintenance of international peace and security.
6/20/2016
GATT Article XXI allows certain security measures, which would
otherwise be prohibited by GATT provisions, to be taken in two
specific circumstances:
1. Sub-paragraph (a) refers to the disclosure of information
that the WTO Member would consider contrary to its essential
security interests. Sub-paragraph (b) prescribes the condition
under which a Member may take action that it determines to
be "necessary for the protection of its essential security
interests including those relating to either:
the trade in fissionable materials; or
traffic in arms, ammunition and other war-related trade.
2. Second, Members are allowed to implement measures,
which are taken in pursuance of their obligations under the
United Nations Charter (for the maintenance of
international peace and security). This is a reference to
economic sanctions.
6/20/2016
WAIVERS
A waiver is a permission granted by WTO Membership allowing a particular
WTO Member to not comply with its normal commitments. Waivers are timebound. They have time limits and extensions have to be justified.
In "exceptional circumstances", a WTO Member may be authorized by the
other Members to derogate, for a specific time and under certain conditions,
from any provision contained in the WTO Agreements. These derogations,
called "waivers", are governed by the WTO Agreement and are applicable to
trade in goods, trade in services and trade-related aspects of intellectual
property rights. Waivers are governed by Article IX of the Marrakesh
Agreement (Establishing the WTO).
Continue
Waivers are granted by the whole WTO Membership, through a
decision of the Ministerial Conference (in most cases, the
decision is adopted by the General Council in between sessions
of the Ministerial Conference). Consequently, a waiver may be
viewed as a "negotiated right", whereas there is no need to
negotiate to take a general exception in GATT Article XX and
GATS Article XIV.
Waivers are usually temporary so, when they are granted, a
definite time-period is set for termination. Waivers may be
granted in exchange for compensation. If granted for more
than a one-year period, a waiver must be reviewed annually to
establish if the exceptional circumstances warranting its grant
still exist.
6/20/2016
Exceptions & Waivers
Subtitle
General Exceptions in GATT
Article XX (General Exceptions) of GATT 1994
recognizes that governments may need to apply
and enforce measures for purposes such as the
protection of public morals; human animal or plant
life and health; and the protection of national
treasures.
The GATT 1994 does not prevent governments from
adopting and enforcing such measures. However,
any measure adopted under the general exceptions
provisions must not constitute a means of arbitrary or
unjustifiable discrimination nor should it be a
disguised restrictions on international trade.
6/20/2016
GATT Article XX: General Exceptions
Subject to the requirement that such measures are
not applied in a manner which would constitute a
means of arbitrary or unjustifiable discrimination
between countries where the same conditions
prevail, or a disguised restriction on international
trade, nothing in this Agreement shall be construed to
prevent the adoption or enforcement by any
Member of measures:
a) necessary to protect public morals;
b) necessary to protect human, animal or plant life or
health;
c) relating to the importations or exportations of gold
or silver;
d) necessary to secure compliance with laws or regulations
which are not inconsistent with the provisions of this
Agreement, including those relating to customs enforcement,
the enforcement of monopolies operated under paragraph 4
of Article II and Article XVII, the protection of patents, trade
marks and copyrights, and the prevention of deceptive
practices;
e) relating to the products of prison labour;
f) imposed for the protection of national treasures or artistic,
historic or archaeological value;
6/20/2016
Continue:
g)relating to the conservation of exhaustible natural
resources if such measures are made effective in
conjunction with restrictions on domestic production or
consumption;
h) undertaken in pursuance of obligations under any
intergovernmental commodity agreement which
conforms to criteria submitted to Members and not
disapproved by them or which is itself so submitted
and not so disapproved;
j) involving restrictions on exports of domestic materials necessary to
ensure essential quantities of such materials to a domestic
processing industry during periods when the domestic price of such
materials is held below the world price as part of a governmental
stabilization plan; Provided that such restrictions shall not operate to
increase the exports of or the protection afforded to such domestic
industry, and shall not depart from the provisions of this Agreement
relating to non-discrimination;
k) essential to the acquisition or distribution of products in general or
local short supply; Provided that any such measures shall be
consistent with the principle that all Members are entitled to an
equitable share of the international supply of such products, and
that any such measures, which are inconsistent with the other
provisions of the Agreement shall be discontinued as soon as the
conditions giving rise to them have ceased to exist. The Members
shall review the need for this sub-paragraph no later than 30 June
1960.
6/20/2016
GATT Article XX permits Members to take certain
measures, otherwise prohibited by GATT provisions,
subject to stipulated conditions.
1) The first condition is that the contemplated measure
must fit under one of the 10 categories in subparagraphs (a) - (j) of Article XX. For example, subparagraphs (a), (b), and (d) indicate that the
measures sought to be taken by Members must be
necessary either to, protect public morals; human,
animal or plant life or health; or to secure
compliance with certain laws or regulations.
For those three categories, there is an imperative
"necessity" test that must be satisfied for the measures to
be consistent with Article XX. The determination of whether
a measure, though not indispensable, may nevertheless be
considered "necessary", involves a weighing and
balancing of factors, such as:
The importance of the common interests or values
protected by the measure;
The efficacy of the measure in achieving the intended
policies;
The impact of the measure on imports especially vis-à-vis
its like domestic products.
6/20/2016
Continue:
2) The second condition refers to the opening paragraph of
Article XX (commonly referred to as the "chapeau of Article
XX"). Measures covered under the General Exceptions must not
be applied in a manner that would constitute a means of
arbitrary or unjustifiable discrimination between countries where
the same conditions prevail, or a disguised restriction on
international trade.
Before certain measures are used to derogate from GATT rules,
they must meet the requirements of the chapeau i.e. they have
to be "applied" in a manner that does not create "arbitrary or
unjustifiable discrimination". The chapeau of Article XX of GATT
aims to prevent the use of derogation measures to unjustifiably
impede the market access rights of other WTO members.
Provisions of Article XX are to set out a two-level test that a
proposed measure must pass before it is deemed
consistent with Article XX, and therefore qualify as an
exception to the obligations in the GATT:
The first test is whether the policy fulfils the criteria in
Article XX (a)-(j);
The second test is whether, when it fulfils those criteria, it
satisfies the "Chapeau test". That is, if the measure is
being applied "arbitrarily", "unjustifiably", or as a
"disguised restriction on trade".
6/20/2016
General Exceptions in GATS
Article XIV of the GATS permits members to maintain restrictions
on services and service suppliers if the measure satisfies one of
the policy purposes in sub-paragraphs (a) - (e).
Furthermore, Article XIV GATS recognizes that members need to
maintain a balance between trade measures and other
legitimate policies and interests, such as the protection of the
health of its citizens.
GATS Article XIV is very similar to GATT Article XX, which governs
trade in goods. Certain measures, which would otherwise be
prohibited by other provisions of the GATS, can still be taken
provided two conditions are met:
1. The first condition is that the measure taken must fall into one
of the five categories in sub-paragraphs (a) to (e). For example,
sub-paragraphs (a), (b) and (c) indicate that the measures
must, in similar terms to GATT Article XX, be "necessary" either to
protect public morals, or to maintain public order (a specific
definition of this latter term is in the accompanying footnote); to
protect human health, animal or plant life or health; or to secure
compliance with certain laws or regulations.
as in GATT, a "necessity" test must be passed.
6/20/2016
Continue
2) As with GATT Article XX governing trade in goods, the
second condition is that the measure must satisfy the
chapeau of Article XIV. Measures covered by the GATS
General Exceptions provisions must not be "applied in a
manner which would constitute a means of arbitrary or
unjustifiable discrimination between countries where like
conditions prevails, or a disguised restriction on trade in
services ".
General Exceptions in TRIPS
There are no general exceptions as such under the TRIPS Agreement.
However, some provisions may apply to specify situations where protection is
not required. See for example Arts. 27.2, 27.3, 30 and 31 (patents), Article 17
(trademarks), and Article 13 (copyrights and related rights).
6/20/2016
Security Exceptions in the GATT
A WTO Member is allowed to take any action which it considers necessary
for the protection of its essential security interests or in pursuance of its
obligations under the United Nations Charter for the maintenance of
international peace and security. Members are not required to furnish
information the disclosure of which would be contrary to their essential
security interests.
GATT Article XXI: Security Exceptions
Nothing in this Agreement shall be construed: to require any Member to
furnish any information the disclosure of which it considers contrary to its
essential security interests; or to prevent any Member from taking any action
which it considers necessary for the protection of its essential security
interests
(i) relating to fissionable materials or the materials from which they are
derived;
(ii) relating to the traffic in arms, ammunition and implements of
war and to such traffic in other goods and materials as is carried
on directly or indirectly for the purpose of supplying a military
establishment;
(iii) taken in time of war or other emergency in international
relations; or to prevent any Member from taking any action in
pursuance of its obligations under the United Nations Charter for
the maintenance of international peace and security.
6/20/2016
GATT Article XXI allows certain security measures, which would
otherwise be prohibited by GATT provisions, to be taken in two
specific circumstances:
1. Sub-paragraph (a) refers to the disclosure of information
that the WTO Member would consider contrary to its essential
security interests. Sub-paragraph (b) prescribes the condition
under which a Member may take action that it determines to
be "necessary for the protection of its essential security
interests including those relating to either:
the trade in fissionable materials; or
traffic in arms, ammunition and other war-related trade.
2. Second, Members are allowed to implement measures,
which are taken in pursuance of their obligations under the
United Nations Charter (for the maintenance of
international peace and security). This is a reference to
economic sanctions.
6/20/2016
WAIVERS
A waiver is a permission granted by WTO Membership allowing a particular
WTO Member to not comply with its normal commitments. Waivers are timebound. They have time limits and extensions have to be justified.
In "exceptional circumstances", a WTO Member may be authorized by the
other Members to derogate, for a specific time and under certain conditions,
from any provision contained in the WTO Agreements. These derogations,
called "waivers", are governed by the WTO Agreement and are applicable to
trade in goods, trade in services and trade-related aspects of intellectual
property rights. Waivers are governed by Article IX of the Marrakesh
Agreement (Establishing the WTO).
Continue
Waivers are granted by the whole WTO Membership, through a
decision of the Ministerial Conference (in most cases, the
decision is adopted by the General Council in between sessions
of the Ministerial Conference). Consequently, a waiver may be
viewed as a "negotiated right", whereas there is no need to
negotiate to take a general exception in GATT Article XX and
GATS Article XIV.
Waivers are usually temporary so, when they are granted, a
definite time-period is set for termination. Waivers may be
granted in exchange for compensation. If granted for more
than a one-year period, a waiver must be reviewed annually to
establish if the exceptional circumstances warranting its grant
still exist.
6/20/2016