Restrictions to Safeguard the Balance of Payments under Chapter 2 Nothing in this Chapter shall be construed to prevent a Party from taking any measure for balance-of-payments purposes. A Party taking such measure shall do so in accordance with the conditions established under Article XII of GATT 1994 and the Understanding on the Balance-of-Payments Provisions of the General Agreement on Tariffs and Trade 1994 in Annex 1A to the WTO Agreement.
Restrictions to Safeguard the Balance of Payments In the event of serious balance of payments and external financial difficulties or threat thereof, or if, exceptional circumstances, movements of capital cause, or threaten to cause, serious economic or financial disturbance in a Member State, that Member State may adopt or maintain restrictions on trade in services including on payments or transfers. It is recognised that particular pressures on the balance of payments of a Member State in the process of economic development or economic transition may necessitate the use of restrictions to ensure, inter alia, the maintenance of a level of financial reserves adequate for the implementation of its programme of economic development or economic transition. The restrictions referred to in paragraph 1: shall not discriminate among Member States; shall be consistent with the Articles of Agreement of the International Monetary Fund; shall avoid unnecessary damage to the commercial, economic and financial interests of any other Member State; shall not exceed those necessary to deal with the circumstances described in paragraph 1; and shall be temporary and be phased out progressively as the situation specified in paragraph 1 improves. In determining the incidence of such restrictions, Member States may give priority to the supply of services which are more essential to their economic or development programmes. However, such restrictions shall not be adopted or maintained for the purpose of protecting a particular service sector.
Restrictions to Safeguard the Balance of Payments
Restrictions to Safeguard the Balance of Payments Like GATT, GATS (Article XII) permits temporary suspension of liberalization commitments for the balance of payments reasons. The measures must be nondiscriminatory, consistent with the Articles of Agreement of the International Monetary Fund, no more restrictive than necessary and should not cause undue damage to the commercial interests of other members. In determining the incidence of restrictions, members are permitted to give priority to sectors more essential to their economic or development interests but restrictions are not to be adopted for the purpose of protecting a particular service sector.
