International Trade in Services.pdf - DSpace at Khazar University

Accounting Services 271
Box 8.3: Examples of Domestic Regulations That May Impede Trade in
Accounting Services
Rules are categorized to determine their potential impact on the trade in services.
Rules that potentially may inhibit market access can be categorized as follows:
• Quantitative limitations on services providers, services, operations, and output: for
example, limitations on the number of auditors or accountants
• The value of service transactions or assets: for example, the value of foreign
subsidiaries is limited to a certain share of the total domestic assets of the sector
• Constraints on the type of legal entity or joint venture: for example, prohibitions on
partnerships and constraints on the establishment of joint ventures
• Rules on the participation of foreign capital
Rules that potentially distort competition and deny national treatment include
measures such as the following:
• Subsidy measures: for example, eligibility for subsidies is reserved to nationals
• Tax measures: for example, foreign firms are assessed discriminatory excise taxes
• Nationality requirements: for example, managers, accountants, and auditors must
be citizens
• Licensing and qualification requirements: for example, licensing and qualification
are reserved for citizens; professionals must be graduates of national universities; an
in-country professional practice is required
• Registration requirements: for example, foreign companies are required to have an
office registered in the country
Trade negotiations have prompted governments to reexamine such rules, their
purpose, and their impact on service markets. As a consequence, policy makers may
refine such rules to facilitate trade. For instance, they may lift quantitative limitations
on service providers, loosen joint venture requirements, or raise foreign capital
ceilings. Policy makers might also find alternatives for nationality requirements,
streamline licensing and qualification requirements, and make registration requirements
more transparent. Policy makers may make these changes as a reflection of
market conditions at home and in export markets of interest. Regulations administered
with integrity and restraint provide predictability and confidence in market
operations for investors and service industry users.
information about administrative procedures and processes. For instance, robust
electronic government is a useful tool to enable access to information and provide
procedural transparency. In some countries, price controls may be applied in
accounting services, possibly with detrimental effects (box 8.4).
The accounting profession does not operate in a vacuum. A number of regulations
that apply to all sectors (in the business environment) affect the trade in
accounting services. For example, the access to new clients in neighboring markets
can be restricted because of constraints on financial transactions. Several countries,
including Algeria, Libya, Mauritania, Morocco, and Tunisia, restrict capital flows
and, in some cases, require central bank approval for transactions. Crossborder