I've heard the following:
Its an ICAO thing and its worldwide. Don't know if all countries will adhere to it though. The test has nothing to do with aviation english. Its purely about understanding english. If you fail the first computer based test, which is multiple guess, you do a verbal interview with an assessor either in person or telephonically. A person proficient in english would be graded as level 6. Level 4 is the minimum required.
Rumour has it that the french have automatically built it into their licensing system so that if you have an ATC or pilot's licence you automatically get a level 4 without any extra tests.