The EU Under GATS and RTAs
Chapter 6: Domestic regulation
Article VI GATS on domestic regulation addresses the relationship between national regulators and individual service suppliers in six paragraphs. Paragraphs 1, 2, 3 and 6 contain transparency obligations. Paragraphs 4 and 5, however, encompass substantive obligations that are very much linked. Paragraph 4 contains the obligation to develop disciplines for measures relating to qualification requirements and procedures, technical standards and licensing requirements, while paragraph 5 contains disciplines which apply pending the entry into force of these new disciplines under Paragraph 4. Article VI:5 GATS clarifies that its obligations only apply to sectors in which specific commitments have been scheduled.It must be stressed that the term ‘domestic regulation’ in the context of Article VI:5 GATS refers solely to measures relating to licensing and qualification requirements and technical standards. It may be noted that, in US – Gambling, the Panel stated that Article VI:5 GATS covers measures that impose qualification requirements and procedures, technical standards and licensing requirements. The Panel thus extended the scope of Article VI:5 GATS to cover qualification procedures. However, there does not appear to be any textual basis for this. Therefore, in my view, these measures are covered by Article VI:4 GATS only. In any case, the covered types of regulatory measures are commonly used to attain a wide variety of policy goals in many services sectors. This is particularly true for professional and financial services, as domestic regulation combats information asymmetries.
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