Macau, China WT/TPR/S/82
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III. TRADE POLICIES AND PRACTICES BY MEASURE
(1) OVERVIEW
1. Neither the Asian crisis, which erupted in 1997, nor Macau's reversion to the People's
Republic of China (PRC) in December 1999, has materially altered the Territory's trade and
investment regime, which remains among the most ope n in the world;  the Government's approach has
long been to let free and open markets be the main determinant of the allocation of resources withinthe Territory and thus its economic development.  Since Macau, China's previous Trade Policy
Review in 1994, there have been few major changes other than those related to commitments made in
the Uruguay Round.  One of the main developments in this regard has been the strengthening of
protection accorded to intellectual property rights.
2. The high degree of openness of the economy for trade in goods is indicated by the duty-free
entry of all imports into Macau, China.  On the other hand, nearly 80% of the Territory's tariff lines
have not been bound;  nonetheless, tariff lines th at are bound are bound at zero rate, and the status of
Macau, China as a free port under the Basic Law appears to preclude increases in applied rates for
those tariff lines that are unbound.  Although consumption taxes are applied to domestically
manufactured and imported goods alike, they fall disproportionately on imports because there is little,if any, local production of the goods subject to such  taxes.  Non-tariff barriers to trade (NTBs) are
few;  by and large, they involve measures aimed at ensuring security as well as protecting public
health and the environment (including endangered species).  The recent inclusion of equipment and
material used for the manufacture of optical discs in the list of imports requiring prior authorization is
one of several measures intended to curtail the infringement of intellectual property rights.  Macau,
China has no legal instrument protecting domestic producers from unfair foreign trading practices in
the form of dumping or export subsidies.
3. Aside from export licensing, there are virtually no government controls on exports except
those maintained in accordance with UN sanctions (for which the PRC is now responsible),
international conventions, and the WTO  Agreement on Textiles and Clothing.  Nor does Macau,
China grant any assistance to exports other than tax incentives, which are not specific to any sector.
4. Although Macau, China also maintains an open foreign investment regime, with few
restrictions on inbound or outbound investment, in practice, both domestic and foreign investments
are prevented in some key services sectors owing to the Government's granting of exclusive rights to
certain companies in the form of concessions (see below).
5. While Macau, China has not made any significant changes to its legislation on government
procurement since 1994, it has taken steps to simplify procedures and enhance transparency in orderto attract a larger number of bids.  Foreign purchases of goods and services exceeding a certain
threshold are approved only if there is no local supplier.  At the same time, employment of local
labour is encouraged in all procurement activities.  Macau, China is not a party to the GPA.
Nonetheless, it plans to become more involved  in the Working Group on Transparency in Public
Procurement.
6. In addition to requiring prior authorization of imports of equipment and material used for the
manufacture of optical discs, Macau, China introduced important changes in its intellectual property
rights (IPR) regime in 1999;  these changes included new laws aimed, in particular, at ensuring
compliance with the TRIPS Agreement.  These new laws established a comprehensive legal
framework for protecting such rights.  Furthermore, the authorities have shown their determination toWT/TPR/S/82 Trade Policy Review
Page 22
improve enforcement of these laws.  Nevertheless, gaps appear to remain;  for example, there is some
doubt as to whether the penalties actually imposed are sufficient to constitute an effective deterrent.
7. Macau's internal tax system is characterized by a low overall level of taxation relative to GDP
(13%) and relatively heavy reliance on direct taxes, especially those derived from gambling.  Most
direct taxes, notably those on profits and employment income, are levied at low rates, which
contributes to Macau's attractiveness for domestic and foreign investors.  At the same time, however,the tax system is used as the main instrument of economic policy, with various tax incentives being
offered to projects that, inter alia , promote industrial diversification, encourage exports to new
markets, contribute to technological progress, ra ise value added, and create employment.  Refundable
and non-refundable grants as well as interest rate subsidies are also provided.  In addition, with 95%
of all land in the territory owned by the Government, the seemingly complex (and possiblydiscretionary) system for leasing government-own ed land constitutes a potential instrument of
economic policy.
8. Confident of the disciplinary effects of an open market environment, Macau, China has no
competition law as such;  nonetheless, the 1999 Commercial Code establishes some general principles
regarding competition policy in order to safeguard economic freedom and combat business practicesthat impair competition.  While the openness of the Macau, China economy to trade has undoubtedly
fostered competition as far as goods are concerned, potential impediments to competition exist in
several services markets.  Key services, such as electricity, water, telecommunications, and transport
are provided by private companies with exclusive rights under government concessions.  Moreover
gambling services, another major sector, has remained a private monopoly since 1961, although this
concession is scheduled to expire in 2001.
(2) M
EASURES DIRECTLY AFFECTING IMPORTS
(i) Procedures
9. Decree-Law No. 66/95/M, enacted on 1 January 1996, regulates foreign trade operations (i.e.
imports and exports).  Prior to importing (or exporting), all foreign traders in Macau, China (whether
natural persons, legal entities or institutions) are required to register as a Foreign Trade Operator with
the Macau Economic Services.1  Registration is valid for three years and free of charge;  renewal is
also free.  Registration is also required for operators engaged in transit activities.2  In addition to being
registered with the Macau Economic Services, importers of pharmaceutical products and medicines
must be licensed by the Health Service.  A fee of P 3,000 is charged to the importer/firm for the
licence;  the annual renewal costs is P 400.  A list of licensed importers of pharmaceuticals is
available on request;  it is also published in the Official Gazette  when the licence is issued.3
10. Imports in Macau, China are processed either through an import declaration or an import
licence, depending upon the nature of products concerned (section (v) below).  Import declarations are
not required for imports valued at less than P 5,000;  however, a commercial invoice must be
submitted to the Macau Marine Police and Customs (MMPC) for valuation purposes.  Goods for
personal consumption (listed in Government D ecision No. 34/GM/99 of 23 February 1999) do not
require an import declaration.
                                                     
1 The criteria and requirements for Foreign Trade Operators are stipulated in Government Decision
No. 158/96/M, 25 June 1996.
2 The criteria and requirements for transit tr aders are stipulated in Decree-Law 7/96/M,
29 January 1996.
3 WTO document G/LIC/N/3/MAC/2, 3 January 2000.Macau, China WT/TPR/S/82
Page 23
11. Import declarations are submitted to the MMPC, which operates as Macau's customs authority
at the border.4  Declarations are for statistical information purposes and can be filed at the time of
arrival or departure of each consignment.  An import declaration can be granted immediately upon
request, when there is a genuine need under exceptional cases.5  Import declarations are free of
charge, non-transferable, and their period of validity is not defined.
12. All commodities, entering Macau, China either with an import declaration or a licence, may
be inspected at random by the MMPC before being dispatched from customs.  A full check is made on
commodities that are targets of suspicion, intelligence, and selected by risk assessment, etc.
13. Imports of live animals and plants require an import licence and sanitary and phytosanitary
certificates (section (viii)(c)).6  Macau, China requires adequate advance notification regarding the
proposed date of entry into the territory of a consignment of meat or products of animal origindestined for human consumption, together with information on the origin, nature, treatment, quantity
and packaging of the meat or products, and the name of the frontier post to be used.
7
14. In 1998 Macau, China implemented a computerized system, Electronic Data Interchange
(EDI), for customs clearance, which will process import and export licences electronically.  At present
the system is operational only to process exports of textiles and clothing.  The authorities estimate thatonce the system is fully operational in 2001, the customs clearance procedure would be completed in
20 minutes.  This system will also link up all the borders to better control the flow of goods.
(ii) Customs valuation and rules of origin
(a) Customs valuation
15. Macau has accepted the Customs Valuation Agreement and therefore all the obligations
contained therein;  the Agreement was published in the Official Gazette .
8  However, since no customs
duties or fees are levied on imports there are no general laws, regulations or administrative proceduresfor valuing goods for customs purposes.  Accordin g to the authorities, if Macau, China were to
impose import duties, valuation would be in accordance with the Agreement and laws would be
amended accordingly.
16. In 1996, the authorities notified the WTO that Law No. 7/86/M, which assessed the value of
imports subject to domestic taxes, was under review.
9  This legislation has been superseded by
Law 4/99/M, which stipulates that the c.i.f. value will be used as the basis for levying theconsumption tax on imported goods.
                                                     
4 In accordance with the Basic Law of Macau SAR, in 2001 the Government of MSAR will set up a
Customs Services, which will share the responsibilities of the Economic Services, Statistics and Census Servicesand the MMPC.
5 Exceptional cases refer to good that are to be dispatched by air through the Macau International
Airport or via express mail.
6 Imports of live animals (mammals, birds, and reptiles) require an import licence supported by
International Animal Health Certificate/Internationa l certificate of vaccination.  Imports of meat, animal
products, fish, crustaceans, and molluscs require an import licence and an international sanitary certificate.Imports of live plants, mushroom spawn, and edible plants require an import licence and an internationalphytosanitary certificate.
7 Merchandise could enter through the International Airport (DSPA/DZVJ);  the Ka Ho Container
Terminal (DSPA);  the Inner Harbour Docks (SIS/DPZV);  or the terrestria1 entry - Portas do Cerco(SIS/DPZV).
8 Official Gazette  No. 9, 26 February 1996.
9 WTO document G/VAL/N/1/MAC/1, 9 May 1996.WT/TPR/S/82 Trade Policy Review
Page 24
(b) Rules of origin
17. Macau, China has neither preferential nor non-preferential rules of origin.10  No certificate of
origin is required for imports of goods into the MSAR.  In case of re-exports, the initial conferredorigin of the goods will be maintained.
18. Macau, China has never imposed origin-specific trade sanctions.
(iii) Tariffs
19. No tariffs are applied to imports into Macau, China.  Macau, China implemented the HS96 on
1 January 1996.
20. As a result of the Uruguay Round negotiations Macau, China bound 20.7% of its tariff lines at
0%, including all those encompassing agricultural products listed in Annex I to the Agreement on
Agriculture, and some 7% of manufactured goods.
11  Bound tariffs on manufactured goods include
items included in HS Chapters 26, 40, 42, 45, 48, 52, 62, 64, 68, 69, 74, 76, 78, 79, 80, 85, 90, and 91.
After the Uruguay Round, Macau, China also bound a substantial number of tariffs levied on IT
products at 0%, thus binding 23.9% of all tariff lines at 0%.  The authorities noted that Macau, Chinais also committed to binding a substantial number of tariffs levied on pharmaceutical products.
Although the percentage of bound tariff lines is low, the authorities maintain that the Basic Law
precludes Macau, China from increasing tariffs because of its free-port status.
21. Macau, China is examining the possibility of binding more tariff lines for industrial products,
in future negotiations.  However, since Macau, China has been a free port applying a zero tariff rate
on imports from any origin, the authorities consider th at, in practice, the binding or non-binding of the
tariff rate does not affect the free flow of goods imported into the Macau, China.
(iv) Other charges affecting imports
22. Imports of alcoholic beverages, tobacco, fuel, lubricant, automobiles, and motorcycles are,
with some exceptions, subject to excise taxes, which are levied on the basis of c.i.f. value(Table III.1).  While these taxes are applied to domestically manufactured goods as well as to imports,
they fall disproportionately on the latter as there is little, if any, local production of such goods;  they
are therefore similar to tariffs.  However, consumption taxes are relatively unimportant as a source of
revenue;  they accounted for only 2.4% of total tax revenue in 1999.
12  These taxes are not applicable
to goods in transit.
23. Consumption taxes have undergone some changes since 1994.  In particular, whereas prior to
1 January 2000, imports of wines, liquors, and spirits originating in Portugal were subject to a lower
tax rate (Law No. 4/99/M), the same rates are now applied to imported products irrespective of their
origin.
24. Imports of species listed in Annexes I, II and III of the Convention on International Trade in
Endangered Species of Wild Fauna and Flora (CITES), regardless of country of origin, are subject toa charge of 0.5% on the c.i.f. value in patacas.
13
25. A fee of P 0.5 per ounce levied on imports of gold was eliminated in January 1996.
                                                     
10 WTO document G/RO/N/21, 20 July 1998.
11 Secretariat calculation, based on Macau's 1997 tariff, which had 6,090 tariff lines.
12 In 1997, consumption taxes as a proportion of total tax revenue amounted to 0.34%, and in 1998 to
0.27% (Macau Economic Services (2000)).
13 Article 9 of Decree-Law No. 45/86/M, 26 September 1986.Macau, China WT/TPR/S/82
Page 25
Table III.1
Consumption taxes and exemptions, 2000
(Patacas and per cent)
ProductsSpecific rates
(patacas/unit)Ad valorem  rates
(c.i.f. value)
(%)
Wine and other alcoholic beveragesa
Beer 1.00/litre
Wine made from grapes 15
Alcoholic beverages with alcoholic strength of not more
than 30% by volume (excluding rice wine)10.00/litre 10
Rice wine 10
Alcoholic beverages with alcoholic strength above or
equal to 30% by volume (excluding rice wine)20.00/litre 10
Tobaccoa
Cigars, cheroots and cigarillos 70.00/kg.
Cigarettes 0.05/1 cigarette
Other manufactured tobacco and manufactured tobacco
substitutes; "homogenized" or "reconstituted" tobacco20.00/kg.
Fuels and lubricanta
Motor spirit, unleaded (unleaded petrol) 1.00/litre
Motor spirit, leaded (leaded petrol) 1.50/litre
Gas oils and fuel oils 0.085/litre
Lubricating oils 0.40/litre
Motor vehicles, motorcyclesb Rates (sales value)
(%)
Motor cars and other motor vehicles (automobiles)
up to P 100,000 30
from P 100,001 to P 200,000 35
from P 200,001 to P 300,000 45
exceeding P 300,000 55
Motorcycles
up to P 25,000 10
exceeding P 25,000 30
Exemptions
Fuels, petrol, and lubricants Public administration
Air transport enterprises authorized to operate in the Macau International
Airport
Maritime transport concessionaires for passengers
Vessels owned by entities with special status
Gas oils, fuel oils and lubricating oils Fishing vessels
Beer, wines and other alcoholic beverages Sale to passengers inside the airport or catered aircrafts
Vehicles Civil services, courts, diplomatic entities and consulates, international
organizations represented in Macau, China, religious and missionaryinstitutes and other ecclesiastical authorities, charitable organizations
Transportation of goods
Public transportation (more than 16 passengers), vehicles imported bypublic transportation concessionaires
Transportation of disabled persons
School buses (at least 16 passengers)
Vehicles used exclusively by handicapped (up to 1600 cc)
- Taxis Travel agencies
- Special purpose vehicles, i.e. ambulances,
concrete-mixed lorries, dumpers etc.Transportation in airport, driving schools
a In accordance with Law No. 4/99/M of 13 December 1999.
b In accordance with Law No. 20/96/M of 19 August 1996, with new wording introduced by Law No. 7/98/M of 24 August 1998,
and amendment introduced by Law No. 1/99/M of 19 April 1999.
Source: Information provided by the Macau, China authorities.WT/TPR/S/82 Trade Policy Review
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(v) Import licensing, prohibitions, and other restrictions
(a) Import licensing
26. In 1996 Macau, China introduced new legislation regulating trade.14  The new legislation
contained a revised and simplified version of the export/import licensing system.  Thus, as of 1996,
licences are required only for products under the prior authorization regime (e.g. animals, food
products, beverages, etc.), or for CFC products and CITES species.  The only additions to the productcoverage of the prior authorization regime since 1994 are optical discs, manufacturing equipment, and
raw materials for optical discs;  this is intended to prevent the infringement of intellectual property
rights.
15
27. Imports are subject to licensing in order to safeguard consumer health and well-being;  to
preserve domestic plant and animal health, animal life, and the environment;  to help enforceintellectual property rights;  to ensure security;  and, in some instances, to restrict imports.  Imports
regulated by specific laws (i.e. CITES and the Montreal Protocol) and under the prior authorization
regime are subject to licensing (Table AIII.1).
16
28. In general, application for an import licence should be submitted at least three working days
before importation.  In exceptional cases (i.e. goods that have to be transported by air or via expressservice) import licences can be granted immediately upon request (Table III.2).  In order to apply for a
licence, persons, firms, and institutions must be established in Macau, China, or at least have a legal
representative there.
17  Import licences are granted if the ordinary criteria are met.18  If a licence is
refused, the reasons are given to the applicant, who has the right to appeal.
29. Import licencing legislation does not allow administrative discretion in designating products
that may be subject to licensing.  However, under specific circumstances, the Chief Executive may
issue a decision altering the goods subject to import (and export) licensing without legislativeapproval;  and the Government can issue a decree abolishing the system without legislative approval.
                                                     
14 Decree-Law No. 66/95/M of 18 Decembe r 1995 (amended by Decree-Law 59/98/M),
Decree No. 66/95/M, and Decision No . 1/GM/99 regulate the import licensing system.  Species under CITES
are regulated by Decree-Law No. 45/86/M, and ozone depleting substances under Decree-Law N° 62/95/M.
15 Government Decision N° 128/GM/98, 28 December 1998.
16 Imports under the prior authorization regime include:  live animals, meat, animal products, fish,
crustaceans and molluscs, vegetables, live plants, mushroom  spawn, and edible plants;  pharmaceutical products
and medicines;  beverages, tobacco, cement, gasoline;  vehicles;  articles of textile and clothing;  optical discs,
their manufacturing equipment and raw materials;  tel ecommunication and radiocommunication apparatus;  and
arms and ammunitions.
17 Articles 3 and 4 of Decree-Law No. 66/95/M, 18 December 1995.
18 Ordinary criteria means to meet all the requirements stipulated in the foreign trade legislation and
submitting the appropriate and necessary data when an import licence is requested.Macau, China WT/TPR/S/82
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Table III.2
Import licensing
Goods Purpose Responsible
authorityProcessing time Fees Validity
Live animals,
meat, animalproducts, fish,crustaceans andmolluscs,vegetables, live
plants, mushroom
spawn and edible
plantsProtect public and
animal health, animalwelfare;  Prevent theintroduction into andspread within theterritory of
destructive plant
diseases and pestsMacau Provisional
Municipality andIslands ProvisionalMunicipalityApplication at least three
working days before theimportation, but could alsobe accepted and processedon the day before arrival.In exceptional cases
licences can be granted
immediately upon request.No fee One month.
Non-transferableNo penalty for non-utilization
Pharmaceuticalproducts and
medicinesaSafeguard public
healthMedical Health
DepartmentApplication should be in
advance of importation,taking into account the
processing time.
Licence issued within threeworking days.  An importlicence can be grantedimmediately on request ifthere is a genuine needunder exceptional cases.No fee
A fee of P 30 forthe inspection of
goods upon arrival
in Macau, ChinaOne month
Non-transferableNo penalty fornon-utilization
Beverages,
tobacco, cement
and gasolineProtect consumers'
rightsMacau Economic
ServicesApplication three working
days prior to importation.
Licences cannot be grantedimmediately.No administrative
fee for issuing the
licenceFee of P 7 for theapplication form.Valid for 30 days
from the day of
issueCannot be extendedNon-transferableNo penalty for non-utilization
Vehicles Protect consumers'
rightsMacau Economic
Services issues the
licence, but priorregistration at andapproval by theMacau ProvisionalMunicipality isrequiredApplication no less than
three working days prior to
importationNo administrative
fee for issuing the
licenceFee of P 7 for theapplication formValid for the
30 days from the
day of issue.Cannot be extended.Non-transferable.No penalty for thenon-utilization.
Articles of textileand clothingSurvey mechanism to
back up the
Territory's textilesindustry and itsexport quota systemMacau Economic
ServicesApplication for a licence at
least three working days
before importation.  Alicence cannot be grantedimmediately on requestNo administrative
fee for issuing the
licence.Fee of P 7 for theapplication formValid for 30 days
from the day
following issueCannot be extendedNon-transferableNo penalty for non-utilization
Optical discs,
their
manufacturingequipment andraw materialsTo enable Macau
Economic Services to
better control theflow of optical discmastering andmanufacturingequipment into andout of the Territory,and to prevent
copyright-infringing
activitiesMacau Economic
ServicesApplication three working
days before importation.  A
licence cannot be granted
immediately on request.No administrative
fee for the issue of
an import licence.Nominal fee of P 7for the licenceapplication formValid for 30 days
from the day issued
Cannot be extendedNon-transferableNo penalty for non-utilization.
Ozone-depletingsubstancesoriginating incontractingparties to theMontrealProtocol 1987.To enable Macau,
China to comply withobligations set out inthe MontrealProtocolEnvironment
ProtectionCommittee andMacau EconomicServicesProcessing of the
applications takes at leastsix working daysNo fee for issuing
the licence.  Fee ofP 7 for the licenceapplication formValid for 30 days
from the dayfollowing issue
Table III.2 (cont'd)WT/TPR/S/82 Trade Policy Review
Page 28
Goods Purpose Responsible
authorityProcessing time Fees Validity
Application should
be first submitted to
the EnvironmentProtectionCommittee forrecommendation;the application, withrecommendations, ifany, will be
forwarded to Macau
Economic Servicesfor approvalLicences issued bythe MacauEconomic ServicesCannot be extended
No penalty for non-
utilization
Non- transferable
Telecom. and
radiocom.apparatusTo monitor Macau's
access to hightechnology and toprotect Macau'saccess to hightechnology productOffice for the
Development ofTelecommunicationsand InformationTechnologyApplications should be in
advance of importation,taking into account theprocessing time requiredby the Macau Posts andTelecommunications, i.e.at least three working days.
A licence can be granted
immediately on request,only in exceptional cases,if the applicant can give areasonable explanationand/or provide evidence tosupport his claim.No fee Valid for 30 days
from the date ofissueCannot be extendedunder normalcircumstancesLicences cannot be
cancelled
Non-transferable
Arms and
ammunitionRestrict the quantity
of importsPrimarily Macau
Security Police
ForceOther GovernmentDepartments areinvolved in theimport controls forproducts in their
respective
jurisdictionA licence tax of
P 40.Validity of one year
Cannot be extended
Non-transferableNo penalty for non-utilization.
a Importers of pharmaceutical products and medicines must obtain a licence from the Medical and Health Department before
applying for an import licence.
Source: WTO document G/LIC/N/3/MAC/2, 3 January 2000.
(b) Import prohibitions
30. Imports of second-hand motor vehicles, lorries, and motorcycles continue to be prohibited,
ostensibly with the objective of reducing congestion, noise and air pollution.19  According to the
authorities, an import prohibition is used rather than a system of "congestion charges" because the size
of the country and the number of vehicles in circulation does not warrant such a system.  Imports ofozone depleting substances originating in or coming from countries that are not-parties to the
Montreal Protocol are also prohibited, to protect the environment.
31. Imports of animals and plants of endangered species covered by Convention on International
Trade in Endangered Species of Wild Fauna and Flora (CITES) are prohibited.  Furthermore, imports
of soil are prohibited, unless they originate in China.
20
32. On grounds of food safety, in 1999, Macau, China temporarily banned imports of meat
(including pork, poultry, beef, and mutton), eggs and egg products, milk and milk products and
                                                     
19 Portaria No. 219/98/M, 19 October 1998.
20 WTO document G/LIC/N3/MAC/2, 3 January 2000.Macau, China WT/TPR/S/82
Page 29
derivatives originating in Belgium, France, Germany, and Holland because of their high content of
dioxin.21  The authorities noted that this suspension was lifted recently.  An official certificate is
required for imports of each consignment of milk and infant food and derivative products originating
in Belgium.22
(c) Quantitative restrictions
33. In 1996, Macau, China notified the WTO that imports of a number of products  (e.g. CITES
species, CFC products, and arms and ammunitions) are subject to quantitative restrictions.
34. Imports of ozone-depleting substances that do not exceed levels agreed under the Protocol are
subject to quantitative restrictions.  These quotas are administered through a licensing system.23
35. The award of quotas is publicly announced, but not the amount allocated per importer.
Quotas are allocated on a yearly basis.  Licences are normally issued to importers for individualconsignments.  Macau Economic Services is responsible for monitoring the utilization of both
licences and quotas;  unused allocations cannot be added to the succeeding quota period.  The quota
allocation is carried out in accordance with the provisions set out in the Regulation on Utilization of
Quotas of Importation of Trichloroethane, which is administered by the Macau Economic Services.
The initial quota is allocated to traditional importers based on their past performance:  an additionalquota of approximately 20% of the total annual quota is available to new importers.  The quota system
will be in place until 1 January 2005;  as of that date imports of Trichloroethane will be prohibited.
24
36. Macau, China imposes quantitative restrictions on arms and ammunitions.  The authorities
noted that no quota is fixed.  The import licensing system is intended to control the quantity of
imports entering the MSAR;  licences will be awarded to those licensed to hold arms.25  Imports of
arms and ammunitions to be used exclusively by the MSAR police force are exempt from this
restriction.
37. Macau, China has never imposed trade sanctions against any country.
(vi) Import cartels
38. There are no import cartels in Macau, China
(vii) Contingency measures
(a) Anti-dumping and countervailing duties
39. Macau, China has no laws or regulations governing anti-dumping or countervailing actions.26
Macau, China has not taken any anti-dumping actions since 199827, nor any countervailing actions
since 1996.28
                                                     
21 WTO documents G/SPS/N/MAC/1, 18 July 1999, and G/SPS/N/MAC/3, 26 August 1999.
22 W TO document G/SPS/N/MAC/2, 13 August 1999.
23 WTO document G/LIC/N/3/MAC/2, 3 January 2000;  and Regulation on Utilization of Quotas of
Importation of Trichloroethane of 9 October 1996.
24 The quota of 155,575 kg. for imports of Trichloroethane set for 1997-99 was reduced to 66,675 kg.
for 2000-2004.
25 Import licences are required for defence guns (calibre 22 to 32) and for competition guns.
26 WTO documents G/ADP/N/1/MAC/1, 22 November 1995, and G/SCM/N/1/MAC/1, 1 July 1998.
27 WTO documents in the G/ADP/N/- series.WT/TPR/S/82 Trade Policy Review
Page 30
(b) Safeguards
40. At present, Macau, China has no specific legislation relevant to safeguard measures.
However, the Chief Executive may, for such period of time as deemed necessary, prohibit, restrict,
condition or impose levies on imports of goods whose admission into the Territory is proven to be
inadvisable.29
41. Macau, China did not retain its right to use the transitional safeguard for products covered in
the Annex to the WTO Agreement on Textiles and Clothing.30
(viii) Standards and other technical requirements
(a) Standards, technical regulations, testing, and certification
42. Since 1994, there have been no major institutional changes regarding standards.  There is no
comprehensive legislation in this area;  nor is there a standardization agency in operation.  MacauEconomic Services operates as the enquiry point for Macau, China in this matter for WTO.
31
43. The authorities indicated that all standards used in Macau comply with international
standards.  Macau, China does not develop domestic standards and has adapted international standards
only for telecommunications equipment and civil engineering.  There have been no changes in the
standards or technical regulations that apply to  telecommunications equipment, which are based on
parameters recommended by the International Telecommunications Union (ITU).32  T h e  o n l y
standards adapted since 1996 in Macau, China have been for civil construction, covering aspects of
design and product quality.33  The government agency responsible for developing and enforcing these
standards is the Land, Public Works and Transport Services (DSSOPT).  Other civil construction
standards have been developed and are awaiting official approval.  The Macau Civil Engineering
Laboratory operates product certification schemes for cement and concrete, on an official basis, with
the approval of the DSSOPT.
44. Macau, China has neither a laboratory accreditation scheme, nor a single
government-supported organization providing accreditation to both laboratories and certification
bodies on a voluntary basis.  However, a number of local laboratories have sought multilaterally
recognized accreditation from overseas accreditation bodies including the China National
Accreditation Committee for Laboratories (CNACL), the Portuguese Institute for Quality (IPQ), andthe Hong Kong Accreditation Service (HKAS).  In June 2000, there were three laboratories in Macau,
China accredited to undertake specific tests in chemical testing, and calibration of mechanical, mass,
and force measurements.  The Macau Productivity & Technology Transfer Center, offers financial
incentives (a maximum of P 80,000) to encourage local laboratories to seek international
accreditation.  All independent laboratories legally established and located in Macau, China, as well
                                                                                                                                                                    
28 WTO documents in the G/SCM/N/- series.
29 Article 12 of Decree–Law No. 58/98, 21 December 1998.
30 WTO document G/TMB/N/97, 24 May 1995.
31 WTO document G/TBT/ENQ/16, 25 April 2000.
32 GATT (1994).
33 The standards currently in force in this field are:   code for safety and actions for building and bridge
structures (SA);  code for reinforced and pre-stressed co ncrete structures (REBAP);  code for foundations (RF);
code for retaining structures and earthworks (RESOT);  code for water supply and drainage of residual water(RADARM);  standard for steel reinforcement bars (NA);  standard for concrete (NB);  and standard for cement
(NC).Macau, China WT/TPR/S/82
Page 31
as laboratories that are part of an organization legally established and located in Macau, China are
eligible for the subsidy.
45. Macau, China does not have an integrated standards regime for standardization, accreditation
and certification.  However, an increasing number of local enterprises have taken the initiative to
voluntarily seek international certification of their quality and environmental management systems to
ISO 9000 and/or 14000 standards.  In 1996, only seven companies in Macau, China were certified toISO 9000.  The Macau Productivity & Technology Transfer Center offers financial incentives (i.e
reimbursement of first-time certification fees), to encourage local enterprises to improve product
quality in order to attain ISO 9000 and/or ISO 14000 certification.  An additional subsidy is available
to enterprises to send their staff to attend ISO 9000/ISO 14000 training courses offered by the Center.
Enterprises receive a 50% reimbursement of the course fees if the staff members successfullycomplete the course.  In June 2000, there were 36 enterprises certified to ISO 9000, three factories
certified to ISO 14000, and 21 firms were in the process of obtaining certification.
46. As Macau, China has never developed its own standards (except for civil engineering and
telecommunications equipment), there are no standard equivalence or mutual recognition schemes
available.  There are no mutual recognition schemes for telecommunication equipment, but theregulator accepts certificates issued by accredited  international laboratories and administrations.
Macau, China accepts the application of commonly known international standards.
47. Since 1995 Macau, China has notified four technical regulations to the WTO regarding
labelling of pre-packaged foodstuffs, restrictions on the import and registration of used motor
vehicles, the use of substances that may deplete the ozone layer, and the use of unleaded petrol.
34
These technical regulations are aimed at safeguarding consumer welfare and the environment.
(b) Labelling
48. Foodstuffs, and pharmaceutical and medical products are subject to specific labelling
requirements to safeguard consumers and preventing any "unfair" competition or fraudulent practices.
49. Foodstuffs (pre-packed or not) require a descriptive label, in Portuguese, Chinese or English,
providing information on the essential elements of the product.  The label must display the name of
the product, the ingredients, expiry date, name and address of the manufacturer or the identification ofthe importer, net content, lot number, and country of origin (only if its absence would be misleading).
The importer's name is not required for non-pre-packaged fresh produce;  the name of the
manufacturer is not required for manufactured non-pre-packed products.
35
50. Labels for pharmaceutical and medical products must display the commercial name of the
medicine;  pharmaceutical composition;  name and quantity of active ingredients;  manufacturer andcountry of origin or exporting country;  and special storage condition requirements and precautions.
36
If the medicine does not have packaging the cont ainer must bear a label with the aforementioned
information.  If the medicine bears a universal name suggested by the World Health Organization,
then that name should be adopted.  The form, weight, quantity or dosage should only be marked on
the outside of the package.  The registration number should be marked on the package in both Chineseand Portuguese together with warnings such as "External Use", "Veterinary Use", "Doctor's
prescription only", "Keep out of the reach of children", etc.  If the medicine does not have packaging,
                                                     
34 WTO documents in the G/TBT/Notif.- series.
35 Decree-Law No. 50/92/M amended by 56/94/M.
36 Decree-Law No. 58/90/M, 19 September, and Technical Instruction No.1/99 of 1 February 1999,
govern labelling and packaging requirements for pharmaceutical and medical products.WT/TPR/S/82 Trade Policy Review
Page 32
its name, dosage, manufacture's identification code, qualitative and quantitative composition, the
registration number obtained in the country of origin should be clearly marked on the container.
51. Any medicine that does not comply with the above regulations is retained and confiscated.37
52. There have been no recent initiatives involvin g eco-labelling at either the government or
private level.  However, the Consumer Council trie s to keep the public aware and informed of its
implications and importance.
(c) Sanitary and phytosanitary requirements
53. The Provisional Municipalities of Macau, China (i.e. the Macau Municipality and the Island
Municipality) are responsible for the formulation and implementation of policies regarding sanitary
and phytosanitary regulations; the sanitary and phytosanitary requirements of the Macau Provisional
Municipality and the Island Provisional Municipality are the same.  The Inspection and SanitationDepartment within the Municipality of Macau oversees food hygiene.
54. Macau, China has regulations governing:  the inspection of imported meat, meat products and
meat derivatives (frozen products);  egg and egg products;  fish, crustaceans and molluscs;  edible
vegetables and fruit;  the evaluation of hygiene and sanitation conditions of perishable goods;  and the
observance of hygiene conditions during preparation, packaging, transportation and conservation, andsale of food products.
55. The authorities maintain that regulations and requirements to control the importation, transit,
and exportation of mammals and birds, and live animals are in accordance with the InternationalAnimal Health Code.
56. Live animals and food products of animal origin, edible ice, animal fodder, fruit, mushroom
spawn, plants, and vegetables are subject to sanitary or phytosanitary inspection upon arrival in
Macau, China (Table AIII.2).
38  Sanitary and phytosanitary inspections are subject to a fee, which
varies according to product and Municipality.39  Imported food products are subject to random
physical and laboratory examinations;  live animals are subject to examination only if they appear tobe sick.
57. The aforementioned products are released only after proper document control and sanitary or
phytosanitary inspection (Table III.3).  Sanitary or phytosanitary certifications have to be issued or
certified by the official department in the country of origin.  If sanitary/phytosanitary documentationis not correct the importer may re-submit the correct documents;  if this is not done, the products mustbe re-exported or destroyed.
40
                                                     
37 In addition, all medicines consumed in Macau, China must be pre-registered with the Health
Services.
38 Despacho No. 1/GM/99, 5 January 1999.
39 Fees charged in the Island Provisional Municipality are stipulated in Postura No. 1/99/CMI and fees
charged in the Macau Provisional Municipality are stipulated in Postura do Leal Senado, 26 December 1997.
40 Any encumbrance resulting from retaining, re-exporting or destruction of the products (animals or
plants) will be under the responsibility of the import agent.Macau, China WT/TPR/S/82
Page 33
Table III.3
Sanitary or phytosanitary documentation
Products imported Documents for imports of animals, plants or goods
Live animals (mammals, birds and reptiles) Import licence
International animal health certificate
International certificate of vaccination
Meat, animal products, fish, crustaceans, andmolluscsImport licence
International sanitary certificate.
Live plants, mushroom spawn, and edible plants Import licence
International phytosanitary certificate
Meat, fish and, by-products for human consumption Import licence
International sanitary certificate (not applicable for ice cream with cocoa,
and pet-foods)
Imports of edible vegetables, fruit, and plants
(for human consumption)Import declaration
Phytosanitary certificate (edible plants imported from mainland China are
exempt from this requirement)
CITES Certificate (when appropriate)
Imports of vegetables and plants (any part of plants)
for planting or propagationImport declaration
Phytosanitary certificate
Certificate of origin (if origin has not been stated in phytosanitary certificate)
Source: Government of Macau, China.
58. If, upon sanitary inspection, any products or animals are considered to pose a risk to public
health, or upon phytosanitary inspection any plants are found to be infected by or infested with a plantpest, they cannot be released for commercial purpose and the importers are immediately notified of
the decision.  The merchandise is retained, destroyed or re-exported.  In case of epidemics or any
other sanitary problem in the country of origin, additional sanitary measures, such as complementary
certification or interdiction of importation may be required.
59. Macau, China requires advance notification (at least three working days), regarding the
proposed date of entry into the territory of a consignment of meat or products of animal origin
destined for human consumption, together with information on the origin, nature, treatment, quantityand packaging of the meat or products, and the name of the frontier post to be used.
41
60. In accordance with the CITES the importation of some species is prohibited or subject to
restrictions.  Imports of dogs and cats of less than two months are not allowed.  In addition, as
mentioned earlier, imports of soil other than from Mainland China are prohibited.
(ix) Government procurement42
61. Macau, China does not participate in the WTO plurilateral Agreement on Government
Procurement (GPA). However, following the transfer of sovereignty, the MSAR Government is
planning to become more involved in the Working Group on Transparency in Government
Procurement.
62. Since 1994, there have been two major changes in the legislation regulating procurement
procedures.  In 1996, a new Decision regarding the purchase of goods and services related to
computer equipment was enacted, while in 1999 new procedures for public work tenders were put in
place through a Decree-Law.43  In addition, to attract more bidders, some changes have been
                                                     
41 Merchandise could enter through the International Airport (DSPA/DZVJ);  the Ka Ho Container
Terminal (DSPA);  the Inner Harbour Docks (SIS/DPZV);  or the terrestria1 entry - Portas do Cerco(SIS/DPZV).
42 This section is based on GATT (1994).
43 Decision 39/GM/96, 28 May 1996 and Decree-Law 74/99/M, 8 November 1999.WT/TPR/S/82 Trade Policy Review
Page 34
introduced in recent years to simplify procedures and improve transparency.  For example, relevant
rules and regulations, and information regarding the yearly tender for quotations and the procedure
instructions are available in both official languages (Portuguese and Chinese), and a telephone hotline
has been established to respond to inquiries.  Also, samples of documentation required for submitting
bids are provided to help bidders understand the procedures and requirements.
63. Individual government departments select and make contracts directly with their suppliers of
goods, services, and works as long as they have th eir own Notary Officer;  otherwise they must sign
all procurement contracts at the Notary Division of the Finance Services.44  Autonomous Services and
Funds are administratively and financially autonomous and therefore have the right to select and sign
contracts directly with their suppliers, however, they  can also go through the Finance Services.  Thus,
in general the Finance Services does not have information on procurement by autonomous entities.The departments are subject to a set of common procurement rules.  The Macau Finance Department
may be authorized by the Chief Executive to centralize government purchases in special
circumstances, and does so for bulk purchases such as office supplies.
64. Goods, services and works are normally procured via public tender.  Public tenders are
usually compulsory when the public works contract exceeds P 2.5 million and purchases of goods andservices exceed P 750,000.  Exceptions apply when:  (i) one company has the exclusive supply rights;
(ii) it is in the interests of the Territory, given the nature of the goods, works or services required, to
award directly to a particular entity;  (iii) the contract involves project studies, technical consultancy
or supervision of public works;  or (iv) there are security reasons.  In these instances contracts can be
awarded through a direct contract (i.e. no public tender is required, but consultation is required with at
least three bidders).  The Chief Executive might determine that contracts should be awarded through
pre-qualified tender ( concurso de pré-qualificação) when the contract, inter alia , exceeds P 15 million
or P 7.5 million, is technically complex, or when there is not enough time to undertake a tendering
procedure.
45
65. The relevant procedures to purchase goods and services are laid down in
Decree-Law 63/85/M;  the procedures for public works, in Decree-Law 74/99/M46, and the hiring of
repair and maintenance services of government property is regulated by Decree-Law No. 122/84/Mand Decree-Law 30/89/M.  The procedures in these three instances are similar.
66. Invitations for public tenders are advertised in the local newspapers and in the
Government Gazette .  For companies to be admitted, they must be either incorporated and registered
with the Commercial Registrar in Macau, or submit proof of incorporation in their home country.
Proposals for tender must be submitted in Chinese or Portuguese or, if expressly foreseen in therelevant regulations, in English or other languages.  Successful bidders for public works contracts
must also register with the Department of Public Works to obtain a public works contractor licence
before starting work.  The applicant must substantiate its technical and financial capacity.
67. Bids must be sent or delivered, in a sealed envelope, to the entity carrying out the tendering
process.  Non-Portuguese citizens and companies without an office in Macau must produce adeclaration confirming their submission to Macau's legislation and jurisdiction.
68. A Committee made up of three representatives of the entity concerned administers the award
procedure.  The Committee identifies the bidders in public session.  If proposals are excluded, the
reasons are given.  Every bidder has the right to see his competitors' proposals.  The Committee,
                                                     
44 Administrative Regulation 23/2000, June 2000.
45 Article 6 of Decree-Law No. 122/84/M, 15 December 1984.
46 Decree-Law 74/99/M, 8 November 1999 revoked Government Decision 555/71, 12 October 1971.Macau, China WT/TPR/S/82
Page 35
makes the final procurement decision by majority vote, based on price, quality, delivery time, and any
other criteria included in the tender programme.  The decision must be substantiated and, when
considered necessary, preceded by a technical study.  In all procurement activities, employment of
local labour is encouraged.  The employment of local labour is considered and may influence the
awarding of a contract, where bidders terms are equal in relation to other criteria.47
69. The winning bidder is notified within 90 days following the first public session of the
Committee.  He is required to lodge the definitive guarantee within eight days.  The other participants
are then informed of the procurement decision.  The award procedure may be cancelled if the project
has been postponed for at least six months (one year in the case of public works)48, if there is strong
evidence of collusion between participants, or if the price or quality offered does not meet the
specification.
70. Aggrieved parties may refer their case to the head of the service or entity making the purchase
or to the Committee in charge of the award process.  If the complaint is rejected, an appeal may be
lodged with the responsible Secretary or, or in the final instance, the case may be brought to the
Courts.
71. Decree-Law 74/99/M  prohibits collusive business practices.49  If there is strong evidence of
collusion, the tenders adjudicator has the right not to award contracts.  Moreover, the award procedure
may be cancelled if there is strong evidence of collusion between participants.
72. In 1999, payments to foreign and local companies for government procurement amounted to
P 1.8 billion of which only 4.5% of all contracts were granted to foreigners (Table III.4).  The
authorities explain that the proportion of foreign contracts is low because most of the foreign-owned
companies providing goods and services establish their offices in Macau, China and register as local
companies.  In addition, the Governor must approve all purchases of foreign goods and services thatexceed P 100,000.  Foreign purchases are approved only if there is no domestic supply of the goods
and services in question.
50
73. Suppliers of utilities such as electricity, water, and telecommunications and transport service
providers are privately owned;  concession contracts are granted by the Government of Macau SAR.
Therefore, these services are not subject to the common procurement rules.
Table III.4
Government procurement contracts, 1994-99(Patacas billion, units, and per cent)
1994 1995 1996 1997 1998 1999
Total procurement (P billion)a1.5 1.7 1.9 2.1 2.2 1.8
Number of contractsb41 65 61 82 87 112
by entities (per cent)
F o r e i g n 08751 4 . 5
L o c a l 1 0 09 29 39 59 9 9 5 . 5
a Excludes autonomous services.
b Includes only contracts signed at the Notary Division in the Finance Services.
Source: Government of Macau, China.
                                                     
47 This is not stipulated by law;  it is a recommendation made by the Chief Executive in order to reduce
unemployment.
48 Decree-Law 74/99/M, 8 November 1999.
49 Article 5 of Decree–Law No. 74/99/M, 8 November 1999.
50 Article 22 of Decree-Law No. 122/84/M, 15 December 1984.WT/TPR/S/82 Trade Policy Review
Page 36
(x) State-trading
74. Macau, China does not operate any state trading enterprises in accordance with the definition
of Article XVII.51
(xi) Local-content schemes
75. Macau, China does not apply any local-content requirements.
(xii) Countertrade
76. Macau, China maintains no legal provisions covering countertrade and does not engage in
countertrade activities
(3) MEASURES DIRECTLY AFFECTING EXPORTS
(i) Procedures and documentation
77. Exports from Macau, China are subject to export licences or export declarations;  the latter
are used to gather statistical information.  Declarations are submitted to the Macau Marine Police and
Customs (MMPC) or in the future, to Customs Serv ice of Macau SAR (to be established).  A bill of
lading or airway bill is also required for all exports except those transported by sea to China or
Hong Kong, China.52
78. The Macau Provisional Municipality and the Island Provisional Municipality issue sanitary
certificates, valid for ten days, in accordance with the requirements of the country of destination.
Usually, exports of live animals, meats, fish, and plant products for consumption require sanitary
certificates.  Macau Economic Services issues certificates of origin when required, this is for the
export of textiles and clothing under restraints and under the GSP.
(ii) Export taxes, charges, and levies
79. Macau, China does not levy any export-related duties, taxes or charges.
80. On January 1996 the fee of P 0.5 per ounce for re-export of gold was abolished.
81. Certificates of origin for textiles and clothing products, which are subject to quota, carry a fee
of 0.5% of their f.o.b. value.  A fee of P 70 is charged for issuing a certificate of origin for goods that
are not subject to export quota.
(iii) Export cartels and other arrangements
82. There are no export cartels in Macau, China.
(iv) Export prohibitions, restrictions, and licensing
83. Export licences are required only for exports under the prior authorization regime and specific
laws (Table III.5).  Since 1994, the only change to the list of products subject to export licensing has
been the addition of optical discs, and relevant manufacturing equipment and raw materials.  Since
                                                     
51 WTO documents in the G/STR/N/- series.
52 Article 16, Decree-Law No. 59/98, 21 December 1998.Macau, China WT/TPR/S/82
Page 37
1994, there have been no changes regarding the products subject to export licensing (Table AIII.3).  It
takes three working days to obtain an export licence.
84. Macau, China has never imposed exports bans to any country.  However, after the
establishment of Macau SAR in 20 December 1999, in accordance with the Articles 13 and 138 of the
Basic Law53, several Resolutions of the UN Security Council adopted by China extend to
Macau, China.54
Table III.5
Products subject to export licensing
Exports Export regime Purpose Responsible authorities
Textiles and clothing Prior authorization Quota management Macau Economic Services
Arms and ammunition Prior authorization Safety Macau Public Security Police Force
Explosive materials Prior authorization Safety Macau Public Security Police Force
CITES species Specific laws Environment Macau Economic Services
Ozone depleting substances Specific laws Environment Macau Economic Services
Optical discs, their manufacturing
equipment and raw materialsPrior authorization Intellectual property
protectionMacau Economic Services
Source: Government of Macau, China.
85. Macau's exports of textiles and clothing are subject to quotas, to varying extents, in Canada,
the EU, and the United States, under the provisions of the WTO Agreement on Textiles and Clothing(ATC).  The quotas were carried over into the ATC from the former MFA Regime on 1 January 1995,
and included 31 quotas, with one sub-limit and one group limit in the United States;  20 quotas with
the EU for direct imports and a further two quotas for goods re-imported under outward-processing
trade (OPT);  6 quotas and one group limit in Canada;  plus three quotas in Norway.  The quotas with
Norway were removed unilaterally in 1997/98.
55  At the beginning of the second stage of the ATC in
1998, some quotas were removed by the United States (babies' apparel, textile footwear, hosiery, and
carpets) and one by the EU (handkerchiefs).56  Canada removed a number of quotas in 1998, some of
which affected Macau, China.57  Macau, China also benefits from special treatment in Canada and the
United States as a small supplier under the ATC, through the advancement of the quota growth rate by
one stage.58
86. Macau, China has administrative arrangements with Canada, the European Union, and the
United States in order to implement the textiles and clothing restraints.59
87. The mechanism used to allocate quotas in Macau, China has not changed since 1994
(Chapter IV).
                                                     
53 Article 13:  "The Central People's Government shall be responsible for the foreign affairs relating to
the Macau Special Administration Region …".
54 The Resolutions adopted are Nos:  661(1990), 687(1991), 733(1992), 788(1992), 864(1993),
918(1994), 986(1995), 1011(1995), 1127(1997), 1130(1997), 1132(1997), 1156(1998), 1160(1998),1171(1998), 1173(1998), 1176(1998), 1267(1999), 1298(2000).
55 WTO document G/TMB/N/306, 9 October 1997.
56 WTO documents G/TMB/N/213, 23 May 1997;  and G/TMB/N/267/Add.1, 27 May 1997.
57 WTO documents G/TMB/N/214/Add.2, 27 June 1997;  and G/TMB/N/316, 30 January 1998.
58 WTO documents G/TMB/N/183, 2 August  1996;  G/TMB/N/312, 18 December 1997;
WTO documents G/TMB/N/184, 26 July 1996;   and G/TMB/N/311, 18 December 1997.
59 WTO documents G/TMB/N/163, 21 October 1996;  G/TMB/N/255, 18 July 1997;  G/TMB/N/279,
22 July 1997WT/TPR/S/82 Trade Policy Review
Page 38
(v) Export support
88. The authorities maintain that Macau, China does not provide any subsidies or tax concessions
to exporters.  However, according to Law No. 1/86/M one of the requirements to obtain tax incentives
is to contribute to the promotion of exports to new unrestricted markets. (Cross-reference Tax
Incentives).
89. During 1995-99 Macau, China did not grant any export subsidies to agricultural products.60
(vi) Export finance, insurance, and guarantees
90. Macau, China does not have any export finance schemes (including concessional export
credits) or export insurance and guarantee schemes.
91. Export financing can be provided only by banks authorized to operate in the Territory.61
(vii) Export promotion and marketing assistance
92. In 1994, the Export Promotion Department, under the Macau Economic Services, merged
with the Macau Investment Promotion Office, to create the Macau Trade and Investment Promotion
Institute (IPIM).  IPIM is a non-profit organization whose major responsibility is to promote trade and
attract foreign investment.
93. Assistance has been given to exporters through the provision of trade and economic
information on various markets;  and logistic support to participate in international fairs.  Initially the
IPIM trade promotion efforts were concentrated in the region, but given the potential opportunities for
trading with Europe and United States, new initiatives were launched.
(4) MEASURES AFFECTING PRODUCTION AND TRADE
(i) Taxation
94. Macau's internal tax system is characterized by a low overall level of taxation relative to GDP
(13%) and relatively heavy reliance on direct taxes, especially those derived from gambling.  Mostdirect taxes, notably those on profits and employment income, are levied at low rates, which
contributes to Macau's attractiveness for domestic and foreign investors.  At the same time, as part of
its industrial policy, the burden of some taxes is considerably reduced owing to
exemptions/incentives.
95. Direct taxes on gambling accounted for nearly 72% of total tax revenues in 2000
(January-September);  these include revenue from the granting of franchises, which is also considered
to be a type of direct tax.  Other direct taxes yielded a further 21% of tax revenues.  The remainder
was collected in the form of indirect taxes:  however, the consumption tax and the vehicle tax (IVM)
accounted for only 4% of total taxes despite being levied at rates ranging from 10% to 55%;  the low
yield from these two taxes was the outcome of th eir narrow bases, and exemptions (Table III.1).
96. The top rates of tax on corporate income and employment income are each set at 15%
(Table III.6);  although low by international standards, the rates are in line with those in neighbouring
                                                     
60 WTO documents in the G/AG/N/MAC/- series.
61 Article 20, Decree-Law No. 59/98/M, 21 December 1998.Macau, China WT/TPR/S/82
Page 39
Hong Kong, China.62  The top corporate tax rate is levied on taxable profits exceeding P 300,000
annually;  it applies to residents and non-residents alike.63  The top rate of professional tax is levied on
annual employment income in excess of P 85,000.  Exceptions to this broad picture of low rates
involve the consumption tax and IVM;  for example, the IVM on scooters and motorcycles can reach
30% of the sales price, and may be as high as 55% on automobiles.
Table III.6
Taxation
Type of tax Main features Exemptions/Incentivesa
Direct taxes
Corporate tax Levied on income from any commercial or industrial
activities in Macau.  The tax rate ranges from 2% to 15%on income up to P 300 000 (US$37,500) and is at a flatrate of 15% on income exceeding P 300,000.May be reduced by 50%
a
Professional tax Levied at rates of between 10% and 15% on salaried
individuals' annual income in excess of P 85,000
(US$10,625).  In the case of white collar professionals,income is assessed on the basis of real or assumed profits.
Industrial tax Levied on all individuals and companies engaged in any
commercial or industrial business, it is in fact a type of
business registration charge, involving a fixed annual tax
that varies according to the nature of the business.  Theusual charge is P 300 (US$37.50).Possible total exemptiona
50% reduction for businesses located in
the islands of Coloane and Taipa
(except off-shore banking operations)
Property tax Levied annually on owners of real property in Macau; the
tax is applied to actual rental income for leased property
and to the deemed rental value of other property as
determined by the Macau Finance Department.  Whereasrental property is taxed at the rate of 16%, other propertyis taxed at the rate of 10%.A full exemption applies to certain
buildings, including industrial buildings
occupied by their owners for industrial
purposes, new residential orcommercial buildings for the first
6 years on the islands of Coloane and
Taipa and for the first 4 years in otherparts of Macau, and new industrial
buildings for the first 10 years on the
islands of Coloane and Taipa and for
the first 5 years elsewhere in Macau
a
Property transfer tax
(SISA)Levied on all transfers of property title involving financial
transactions, the tax rate is 6% for properties located in
Macau and 4% for those located on the islands of Taipa
and Coloane.Real estate that is exempt from
property tax is subject to 2 percentagepoint SISA reduction
Potential 50% reduction in the tax rate
for the transfer of real estate intended
purely for industrial use, including shoppremises, office buildings and attached
social premises
a
Gifts and inheritance tax Levied on gifts of property and real estate, varying
between 6% and 36%, depending on the value of theassets (net of liabilities).Potential 50% reduction in the tax rate
for the transfer of real estate intended
for purely industrial purposesa
Social Security
contributionsThe monthly contribution made by the employer is P 30
(US$3.75) per resident employee and P 45 (US$5.63) per
non-resident employee; resident employees pay P 45.
Franchises Exclusive contract for gambling – "STDM". All existing taxes and taxes related to
profits generated by the activitiesspecified in the contract
Corporate tax for dividends;  to be
exempted from this the company must
pay P 3,000,000, plus 10% increase
each year as from 1992.
Consumption taxb
Table III.6 (cont'd)
                                                     
62 See WTO (1999), pp. 40-41.
63 The corporate tax is called the Complementary Tax.WT/TPR/S/82 Trade Policy Review
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Type of tax Main features Exemptions/Incentivesa
Exclusive contract for C.P.S lottery – "Sociedade de
Lotarias Wing Hing".-
Exclusive contract for dog racing – "Companhia de
Corridas de Galgos de Macau".All existing taxes and taxes related to
profits generated by the activities
specified in the exclusive contract
Stamp duty at entrance for club
members
Exclusive contract for horse racing – "Companhia deCavalos de Macau.All existing taxes and taxes related to
profits generated by the activitiesspecified in the contract, except StampDuty
Corporate tax for dividends;  to be
exempted from this the company must
pay P 300,000, plus 10% increase eachyear since 1992
Consumption tax
b
Exclusive contract for instant lottery – "SLOT". All existing taxes and taxes related to
profits generated by the activitiesspecify in the exclusive contract
Corporate tax for dividends;  to be
exempted from this the company mustpay P 50,000 every year
Consumption tax
b
Exclusive contract for Telecommunication – "CTM" IVM
Exclusive contract for water supply – "SAAM" -
Exclusive contract for electricity – "CEM" IVM
Contract for public transport – "STCM" IVM
Contract for public transport – "TRANSMAC" IVM
Exclusive contract for car park – "Companhia de Parques
de Macau".-
Indirect taxes
Consumption tax Levied on alcoholic beverages, fizzy soft drinks,
flavoured mineral waters, tobacco, fuel and lubricants.For details of tax rates, see Table III.1.Fuel supplied to industrial units is free
from taxa
Vehicle tax (IVM) Levied on the actual sale price of new vehicles, it covers
automobiles, motorcycles and scooters and imported
vehicles for the private use of the importer or marketingagents.  The rates vary between 10% and 30% for
motorcycles and scooters and between 30% in the case of
automobiles.  See Table III.1.Vehicles intended for use in Macau's
public services, tourism sector, and
public transport, cargo, etc. are exemptfrom the tax
Tourism tax Levied at the rate of 5% on all services provided by hotels
and similar establishments, health clubs, saunas, massageparlours, and karaoke bars.Services provided by guest houses, and
food and drinks establishments areexempt from this tax
Stamp duties Levied on activities or documents. Full exemptions for entities such as
public non/profit organizations or
others that have been granted such
exemptions
a In order to qualify for these exemptions, projects must satisfy the following criteria:  (i) promote diversification;  (ii) co ntribute
to the promotion of exports to new markets;  (iii) promote a higher added value within their own production chain;
(iv) contribute to technological modernization;  and (v) create employment opportunities.
b Imported equipment related to the business activities specified in the exclusive contract.
Source: Chamber of Commerce [Online].  Available at:   http://.www.acm.cacauweb.com/new/gszx/e_main.htm;
Ernst & Young, (2000);  and the Government of Macau, China.
97. Full or partial exemptions from tax are allowed particularly in the cases of the corporate tax,
property tax, industrial tax, SISA, gifts and inheritance tax, and vehicle tax.64  Such exemptions are
granted mainly to encourage certain types of activity ;  in order to qualify for these incentives, projects
                                                     
64 The specific laws providing for these exemptions, together with the agencies responsible are
summarized in Table AIII.4.Macau, China WT/TPR/S/82
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must satisfy at least one of several criteria (see footnotes to Table III.6).  Tax exemptions/incentives
are especially prevalent in the cases of the property tax and property transfer tax (SISA).  In 1999, for
example, P 16.8 million of property tax revenue and P 27.8 million of real estate transfer tax revenue
were forgone as a result of exemptions/incentives (Table III.7).  No studies have been undertaken to
evaluate the effectiveness of these incentives in relation to the tax revenues forgone;  in the absence of
any convincing evidence to the contrary, experience in other countries suggests that tax incentives areseldom cost-effective.
65
Table III.7
Tax revenues forgone as a result of incentives/exemptions, 1994-99(Patacas)
1994 1995 1996 1997 1998 1999
Direct taxes
Corporate tax 3,165,378 - 17,575,488 31,969,919 33,063,936 36,360,543
P r o f e s s i o n a l  t a x . .. .. .. .. .. .
Industrial tax - 242,517 245,250 227,550 274,350 188,925
Property tax 3,572,749 8,759,627 10,335,427 16,421,387 18,589,725 16,893,718
Property transfer tax (SISA) - 424,978 32,710,530 33,666,001 25,291,488 27,806,781
Gifts and inheritance tax .. .. .. .. .. ..
Social Security contributions .. .. .. .. .. ..
Revenue from franchises .. .. .. .. .. ..
Indirect taxes
Consumer tax 28,579,921 26,740,826 27,871,552 27,887,047 32,702,183 30,768,441
Vehicle tax (IVM) 22,743,019 17,235,630 21,700,277 48,431,357 66,701,474 29,499,594
T o u r i s m  t a x . .. .. .. .. .. .
Stamp duties 212,778 472,070 3,044,622 4,114,937 3,862,512 4,063,691
.. Not available.
Note: Revenue forgone under Corporate tax Group A (big companies) is not included.
Source: Macau, China Finance Services.
(ii) Non-tax incentives and other forms of assistance
98. The Government provides a series of incentives other than tax measures, aimed mainly at
developing and diversifying the industrial sector.  Macau, China continues to grant refundable and
non-refundable subsidies66 for investment projects and interest rate subsidies.67  In contrast, during
1995-99 Macau, China has not granted any domestic support to the agricultural sector.68
99. Investment in Macau, China is encouraged through the granting of refundable or
non-refundable subsidies.  Eligible activities include:  manufacturing of a new products;  invention of
products involving high economic risk;  research & development projects undertaken in Macau, China
or overseas to promote industrial development;  and the installation of anti-pollution equipment and
its operation.
                                                     
65 In the case of investment incentives, for example, most econometric studies show that forgone tax
revenues exceed the increase in desired investment, (OECD, 1995).  Furthermore, according to Shah (1995),several countries (for example, Brazil, Indonesia, and Mexico), having observed that the investment induced bytax incentives falls short of the tax revenue forgone, curtailed such measures.  Tax holidays are regarded as aparticularly ineffective type of tax incentive compared with tax credits (see Mintz, 1990, 1992).
66 The use of the term "subsidy" in this context should not be construed to imply a view as to whether
such measures are (or are not) subsidies as defined in Article 1 of the Agreement on Subsidies andCountervailing Measures.
67 Article 11 Decree-Law No. 49/85/M, 15 June of 1985;  and Law No. 1/86/M, 8 February 1986.
68 WTO documents in the G/AG/N/MAC/- series.WT/TPR/S/82 Trade Policy Review
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100. During 1994-99, the only non-refundable subsidy granted was for P 203,612 to the Macau
Cement Manufacturing Co., Ltd. to acquire anti-pollution equipment.
101. In addition, with 95% of all land in the territory owned by the Government, the seemingly
complex, and possibly discretionary, system for leasing government-owned land may provide scope
for the authorities to provide land at less-than-market prices (see below).
Interest rate subsidies102. In order to promote industrial diversification, the Administration continues to subsidize credit
to:  construct, purchase, rent or adapt/refurbish industrial premises;  purchase or lease new industrial
equipment, including software;  and purchase or lease load vehicles to be used by manufacturing or
fishing companies.
69
103. These incentives are granted to companies contributing to the diversification and
modernization of economic activities and to technological innovation, with a view to enhancing
productivity and quality, while safeguarding the environment.  No particular type of industry is
favoured under the subsidized interest rate legislation, but particular attention is paid to high
technology non-labour-intensive industries and those less harmful to the environment.  Subsidies may
be granted for a maximum of four years.  Interest rates range from 4% to 6% depending on theactivity.
70
104. During 1994-99 Macau, China approved 82 loans at subsidized interest rates to construct
industrial buildings/plants, acquire industrial premises, and purchase new equipment.71  T h e  m a i n
beneficiary was textiles and clothing activities (Table III.8).  The total cost of the subsidy over the
period was estimated at P 44 million.72
Table III.8
Subsidized loans by sector, 1994-99
Sector/activities 1994 1995 1996 1997 1998 1999 Total
Garments and textiles 13 5 5 16 8 11 58
T o y s 3111107
Medicine 2 0 0 2 0 1 5
Othersa212421 1 2
Sub-total 20 7 8 23 11 13 82
a "Others" includes wholesaling, transportation, and manufacture of optical instrument.
Source: Government of Macau, China.
Assistance for new technology and development
105. The Macau Productivity and Technology Transfer Center (CPTTM), established in 1996, is a
non-profit joint venture between the Government and the private sector.73  One of the key objectives
                                                     
69 The range of activities eligible for subs idized credit was broadened in 1998 through
Decree-Law No. 23/98/M of 1 June 1998, which re vised Decree-Law No. 65/94/M of 26 December 1994.
70 4%-5% for the purchase, construction or leasing of buildings;  6% for investment on improvements
for environmental and safety purposes;  4% for purchase or leasing of new cargo vehicles;  and 5%-6% for
purchase of new equipment or upgrading of equipment.
71 63 loans were approved for the acquisition of new equipment, 12 for the acquisition of industrial
premises, and 7 for the construction of industrial building/plants.
72 Government of Macau, China.Macau, China WT/TPR/S/82
Page 43
of CPTTM is to promote the use of new technologies in order to increase value-added, productivity,
and competitiveness.  The services provided by CPTTM are open to all Macau businesses, however
they are usually targeted at small and medium-sized enterprises (SMEs).  There are also some services
designed for the local textile and garment industry.  CPTTM does not provide direct funding to the
private sector.  Support is provided mainly through, inter alia , training, technical assistance,
dissemination of information, and awareness campaigns.  The training course fees are heavilysubsidized.  In addition, the CPTTM offers financial incentives to encourage private businesses to
adopt the ISO 9000 and ISO 14000 certifications, as well as laboratory accreditation.
106. The Industrial and Commercial Development Fund (FDIC), a juridical entity with financial
and administrative autonomy within the Macau Economic Services, manages funds to support projects
that contribute to Macau's economic development.  In particular, the FDIC is responsible for financingactivities such as:
- studies and projects in the field of applied research;
- project analysis in industry and commerce and subsequent preparation of
development strategies;
- implementation of procedures concerning productivity growth in the trade, industry,
fisheries, and technology;
- implementation of procedures concerning the improvement of quality control in the
manufacture of products;
- vocational training for workers in the industrial and export sectors;
- market studies to promote and diversify Macau's exports;  and
- organization of trade missions, and participation in fairs and exhibitions.
107. Macau, China has specific policy or programmes to support small and medium-sized
enterprises.  However, in 1998, a Pilot Programme for the Support of Young Entrepreneurs
(Programa Piloto de Apoio ao Surgimento de Novos Empresários , PASNET) was implemented to
encourage the establishment of high-technology businesses, and non-polluting and
non-labour-intensive activities.
Allocation of industrial land108. Some 95% of MSAR's land is owned by the Government, and may be leased to investors for a
period generally not exceeding 25 years, successively renewable until the year 2049.  Given the
scarcity of land in Macau, China, the terms and conditions of these leases are a potentially important
policy instrument.
109. Leases for industrial land are granted on case-by-case basis.  Applications must be
accompanied by a description of the plots' usage, and project and investment plans so as to enable a
comprehensive economic impact study.  Applications are analysed by the relevant departments,
including the Macau Trade and Investment Promoti on Institute (IPIM), the Economic Services (DSE),
the Land, Public Works and Transportation Services (DSSOPT) and the Land Committee (CT).  If the
                                                                                                                                                                    
73 Decree-Law No. 21/95/M in 1995.WT/TPR/S/82 Trade Policy Review
Page 44
application is approved, a concession is granted;  a contract defines the conditions and payment
(including an initial premium and annual rent) to be made to the Government.
110. Premiums are established according to a complex formula, which takes into account several
variables, inter alia,  gross area, building size, construction costs, location and use of the premises (i.e.
industry, hotels, offices, etc.).74  The premium is 40% of the expected gross profit for new concessions
and 20% for concessions to be renewed.75  Notwithstanding the complexity of the formula used to
calculate the premium, the law stipulates that under special circumstances the Chief Executive may
alter the premium's value.76  Property premiums are a significant source of revenue for the
Government, amounting to P 708 million in 1999.
111. Leases are not awarded if the project is deemed to be contrary to the economic interests of the
MSAR or if the Macau authorities consider the appli cant to be a speculator.  If the investment project
receives an unfavourable report from IPIM, it will also be turned down.  The decision not to award a
lease is notified to the applicant, who may appeal .  Appeals are made through the Land, Public Works
and Transport Services (DSSOPT);  investment pr ojects can be submitted for reconsideration and
reassessment once they are amended.  Currently, there are no plans to change the method used to
allocate land for industrial use;  for instance, the  introduction of a public tender system has not beenconsidered.
112. Foreigners may apply for land concessions as long as they have a legal representative
established in Macau, China.
(iii) Intellectual property rights
(a) Overview
113. Macau, China is party to the Convention Establishing the World Intellectual Property
Organisation (WIPO) and other international conventions on intellectual property.
77  As Macau, China
is not a State, the application of those conventions (which accept only States as members) was
previously achieved through a formal extension of  Portugal's membership.  With one exception78, this
position has been largely maintained following Macau, China's change of status to a Special
Administrative Region of the People's Republic of  China, on 20 December 1999, as the latter has
agreed to succeed to Portugal's parent position in this regard.79
114. Macau, China introduced important changes to its intellectual property regime in 1999.  These
were aimed, in particular, at ensuring compliance with the WTO Agreement on Trade-Related
Aspects of Intellectual Property Rights (TRIPS).  Consequently, two new statutes now largely govern
Macau's protection of intellectual property:  the Copyright and Neighbouring Rights Law
(Decree-Law 43/99/M) and the Industrial Property Law (Decree-Law 97/99/M).  While these cover
                                                     
74 Government Decision Portaria 230/93/M, 16 August 1993.
75 Gross profit is defined as the difference between the value of construction and the cost of
construction (Government Decision Portaria 50/81/M, 21 March 1981).
76 Article 3(6) of Portaria No. 230/93/M, 16 August 1993.
77 The Berne Convention for the Protection of Literary and Artistic Works (extended to Macau, China
with effect from 12 August 1999);  the Paris Convention for the Protection of Industrial Property (extended toMacau, China with effect from 12 August 1999);  the Nice Agreement on the International Classification of
Products and Services (extended to Macau, China with effect from 23 September 1999);  and the Universal
Copyright Convention (extended to Macau, China with effect from 23 October 1999).
78 The exception is the Madrid Agreement on the International Registration of Trademarks, which was
extended to Macau, China by Portugal (Decree 195/99, 22 October 1999).
79 WTO documents IP/Q/MAC/1, IP/Q2/MAC/1, IP /Q3/MAC/1, and IP/Q4/MAC/1, 18 August 2000.Macau, China WT/TPR/S/82
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the bulk of intellectual property protection they are complemented by an additional new statute,
Decree-Law 51/99/M, which exclusively regulates the manufacture and trade of optical discs.  In
addition, because of Macau's civil law tradition, more general statutes, which are not specifically
dedicated to intellectual property, cover areas such as the right to bring a civil claim.80
115. Macau, China's intellectual property legislation has been notified to the WTO and was
reviewed by the Council for TRIPS in June 2000.81  Macau's contact point for intellectual property
purposes is the Macau Economic Services.82
116. These new laws have given Macau, China a comprehensive legal framework for protecting
intellectual property rights.  Furthermore, Macau, China has demonstrated significant commitment to
improve enforcement of these laws.  Notwithstanding these improvements, largely as a result of
continued problems regarding optical media piracy, Macau, China remains on the U.S. TradeRepresentative's "Watch List" of countries that fail to provide adequate and effective protection of
American intellectual property rights, as specified under the "Special 301" provisions of the amended
1974 Trade Act.
83
(b) Copyright and related rights
117. During 1999, Macau, China amended its copyright and neighbouring rights laws in order to
make them TRIPS compatible.  The resultant Copyright and Neighbouring Rights Law entered into
force on 1 October 1999 and reflects a droit d'auteur philosophy containing detailed provisions
concerning copyright and related rights.84  As a general rule, it provides works with 50 years of
copyright protection following the creator's death.85  In the case of collective works, works accruing to
an entity, and audio-visual works protection lapses 50 years after first disclosure or publication.86  The
same period of protection is provided from the date of performance for performers, and from the date
of fixation for producers of phonograms and videograms.87  Copyright in applied art or photographic
works lapses 25 years after completion, and broadcasters' rights cease after 20 years.88
118. The treatment for Macau, China residents regarding works, performances, phonograms and
broadcasts is extended to the nationals of other WTO Members.  While Articles 50(2) and 174(2)
have reciprocity provisos to such national treatment89, the authorities noted that as international
                                                     
80 The Commercial Code (Decree-Law 40/99/M), the Civil Code (Decree-Law 39/99/M), the Civil
Procedure Code (Decree-Law 55/99/M), the Criminal C ode (Decree-Law 58/95/M), and the Criminal Procedure
Code (Decree-Law 48/96/M).
81 WTO documents IP/N/1/MAC/1/Rev.1, 7 March 2000;  IP/N/1/MAC/1/Rev.1/Add.1, 23 June 2000;
IP/N/1/MAC/C/1/Rev.1 9 May 2000;  IP/N/1/MAC/I/1, 16 February 1998;  IP/N/1/MAC/I/2, 17 May 2000;
IP/N/1/MAC/T/1, 16 February 1998;  IP/N/1/MAC/T/2, 16 February 1998;  and IP/N/6/MAC/1, 1 May 2000.
82 WTO document IP/N/3/Rev.4, 22 June 2000.
83 USTR (2000) .
84 Decree-Law No. 43/99/M of 16 August 1999, which revoked and superseded Decree-Law No. 56980
of 27 April 1966 and Law No. 4/85/M of 25 November 1985.
85 Article 21(1) of Decree-Law No. 43/99/M, 16 August 1999.
86 Articles 22(3), 23(1) and 106 respectively of Decree-Law No. 43/99, 16 August 1999.
87 Articles 182 and 188 of Decree-Law No. 43/99/M, 16 August 1999.
88 Articles 148, 155 and 192 of Decree-Law No. 43/99/M, 16 August 1999.
89 With respect to Article 50(2), for example, rights shall be granted to non-resident authors provided
that the same rights would be granted to a Macau author in the non-resident's country.WT/TPR/S/82 Trade Policy Review
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agreements prevail over national law in Macau, China90, reciprocity does not apply between WTO
Members.91
119. Among the major changes to the previous law is the introduction of protection for performers,
producers of phonograms and videograms, and broadcasting organizations.92  I t  a l s o  c o n t a i n s  t h e
explicit statement that computer programs and databases are protected by copyright (although this was
already implied in the old legislation).93  Furthermore, the new law allows for the exhaustion of
copyrights on first sale, establishes protection of copyright management information and
circumvention devices, and introduced accessory penalties, such as the coercive closure of
commercial establishments for the criminal infringements of copyrights.
120. In general, according to the authorities Macau, China's new law meets the international
standards embodied in the TRIPS Agreem ent and the Berne Copyright Convention.94  Furthermore, it
contains some provisions responsive to the more expansive WIPO Copyright Treaty (such as a broad
right for copyright owners to control the "making available" of their works on demand and provisions
protecting the integrity of rights management information).
121. Chief Executive Decision No. 54/2000 mandates that the installation of software in the
Administration's services must comply with Macau's copyright law.
(c) Optical media piracy
122. Optical media piracy is the generic term used for the unauthorized manufacture and export of
audio CDs, video CDs (VCDs), digital versatile disks (DVDs) and CD-ROMs containing computer
software, multimedia products, and literary material.  Such piracy allegedly begun in Macau, China in
1997, as pirate syndicates fled crackdowns on underground CD plants in both China and
Hong Kong, China.95
123. Macau, China has improved its legal structure to combat optical media piracy.
Decree-Law 51/99/M, adopted in October 1999, offers several essential improvements to the
regulatory regime governing the manufacture and trade of optical discs.  It builds on legislative efforts
of 1998 aimed at enhancing Macau, China's licensing and registration system for importation, and
other transactions in optical media production equi pment, raw materials (polycarbonate), and finished
product.  In particular, Decree-Law 51/99/M includes licensing requirements for all retailestablishments dealing with optical media products and requires all optical media products
manufactured in Macau, China to bear a source identification (SID) code.  These new requirements
should enhance the ability to link any seized pirated product with a specific local production facility.
124. While Macau, China has thus vigorously responded to the challenge of optical disc piracy, it
is alleged that illegal production remains a serious problem in Macau, China and the source of a highvolume of pirated products exported throughout the region.
96  The authorities noted that in the late
1990s there was an increase in optical media piracy.  However, as a result of the new laws and their
                                                     
90 Article 54 of the Copyright and Neighbouring Rights Law, and Articles 1 and 3 of the Civil Code
enacted by Decree–Law No. 39/99/M, 3 August 1999.
91 WTO documents IP/Q/MAC/1, IP/Q2/MAC/1, IP/Q3/MAC/1 and IP/Q4/MAC/1, 18 August 2000.
92 See Part III Articles 170-200 of Decree-Law No. 43/99/M, 16 August 1999.
93 Articles 2(1)(a) and 2(1)(o) of Decree-Law No. 43/99/M, 16 August 1999.
94 WTO document IP/N/MAC/1/Rev.1, 7 March 2000.
95 International Intellectual Property Alliance (2000);  and the Economist Intelligence Unit (1999).
96 International Intellectual Property Alliance (2000);  and the Economist Intelligence Unit (1999).Macau, China WT/TPR/S/82
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enforcement, the level of piracy has drastically declined.  Production and trade of optical discs and
software are under tight control in Macau.
(d) Industrial property
125. Macau, China amended its regime regarding the protection of industrial property through the
Industrial Property Law, Decree-Law 97/99/M, which came into force in June 2000.  It covers all
intellectual property rights dependant upon registration, and includes protection of patents, includingutility models, industrial designs, trade marks, and geographical indications.  Layout designs for
integrated circuits are, for the first time, protected by a sui generis right.
126. The major innovation of this new law, however, has been the establishment of local filing of
all industrial property rights with the Macau Economic Services.  Formerly, apart from trade marks,
which have been filed locally since 1995, other industrial property rights had to be filed in Portugaland subsequently extended to Macau, China.  Consequently, the protection of industrial property
rights in Macau, China is no longer derived from an extension of registrations made in Portugal or the
Portuguese Industrial Property Code.
97
(e) Patents
127. Patent protection lasts for 20 years and confers on the right-holder the exclusive right to
exploit the patent and oppose any acts that constitute a breach of that right.98  The general rule is that
any invention pertaining to a product or process, even those that include biological matter, may be
patented provided that it is novel, involves an inventive step, and is industrially applicable.99  T h e
authorities hold that this extends to pharmaceutical and agricultural chemical products, which are not
expressly excluded from patentability.100
128. There are, however, numerous exceptions to patentability, notably plant varieties or animal
breeds, and essentially biological processes for the production of plants and animals101, inventions that
breach public morals, and diagnostic, therapeutic and surgical methods.102
129. The legislation provides for compulsory licensi ng in the event that a potential licensee has
failed to obtain a licence despite offering acceptable commercial terms to the patent holder, if it is
inadequately exploited or for public interest reasons.103
(f) Trade marks
130. Trade mark protection lasts for seven years from the date of registration and may be renewed
indefinitely for similar periods.104  Protection is granted to signs capable of being represented
graphically, i.e. words, including personal names, designs, letters, numerals, sounds and shapes of
products (or their packaging) provided they are capable of distinguishing the particular products or
                                                     
97 The position regarding industrial property rights formerly registered in Portugal's National Institute
of Industrial Property is covered by Article 3 of Decree-Law 97/99/M, which requires the Macau EconomicServices to take all necessary steps with respect to all processes, provided that relevant fees are paid.
98 Articles 103 and 104 of Decree-Law 97/99/M.
99 Article 61 of Decree-Law 97/99/M, 13 December 1999.
100 Documents IP/Q/MAC/1, IP/Q2/MAC/1, IP /Q3/MAC/1 and IP/Q4/MAC/1, 18 August 2000.
101 Article 62(2)(c) of Decree-Law 97/99/M, although this needs to be read in conjunction with Arts 63
and 64.
102 Article 62 of Decree-Law 97/99/M, 13 December 1999.
103 Articles 109-116 of Decree-Law 97/99/M (public interest is defined under Article 113(2)).
104 Article 218 of Decree-Law 97/99/M, 13 December 1999.WT/TPR/S/82 Trade Policy Review
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services.105  Under the Industrial Property Law, services are protected.106  The registration of a trade
mark expires if not "seriously used" for three consecutive years without justifiable cause.107
131. The Government has advised that registration of a trade mark takes about six months from the
time the application is submitted.108  Users may consult the trade marks database available in the
Macau Economic Services.
(g) Trade secrets (undisclosed information)
132. Protection for undisclosed information is provided for under the rules of unfair competition in
the Commercial Code.109  Trade secrets are defined as any technical or commercial information that
fulfils the requirements of having a practical application, being unknown to the public, and providing
an economic advantage to an owner who has taken safety measures to keep it confidential.110
(h) Institutional and enforcement issues
Institutional
133. Macau, China recently established an Intellectual Property Department to coordinate policy
and enforcement.  The Intellectual Property Department (IPD), within the Macau Economy Services,
is responsible for the registration of rights.  In collaboration with the IPD, the Economic Activities
Inspection (a department of the Macau Economy Services), enforces compliance with intellectualproperty law.  The Marine and Customs Police is responsible for controlling and monitoring physical
movement of goods across the border.
Remedies and the courts
134. Judicial authorities in Macau, China may order either civil remedies or criminal penalties for
breaches of intellectual property rights.  In addition, for some infringements, there are administrative
penalties, which are enforced by administrative bodies.  Protection results not only from intellectual
property legislation but also various codes of the civil law, civil procedure law, criminal law, andcriminal procedure law.
135. Under civil law, every infringement of an exclusive intellectual property right gives the owner
of that right the means necessary to enforce it and to obtain remedial damages, including for loss of
profits.
111  There is also provision for urgent civil proceedings to prevent the accomplishment of any
offence, which may be ordered without a hearing ( in audita altera parte ).112
                                                     
105 Article 197 of Decree-Law 97/99/M;  further details of what may be protected are contained in
Article 198 (linguistic requirements) and Article 199 (exceptions to protection).
106 WTO documents IP/Q/MAC/1, IP/Q2/MAC/1, IP/Q3/MAC/1, and IP/Q4/MAC/1, 18 August 2000.
With respect to services see Articles 197 and 201(e) of Decree-Law 97/99/M.
107 Article 231(1)(b) of Decree-Law 97/99/M,  "serious use" is defined under Article 232.
108 No data are currently available regarding regist ration of other industrial property rights as this
became possible only in June 2000.
109 Decree-Law No. 40/99/M, 3 August 1999 (entered into force on 1 November 1999).
110 Article 166(2) of Decree-Law No. 40/99/M, 3 August 1999.
111 The right owner may claim as damages the total amount of the loss suffered and proven in court,
including ceasing of profits (Articles 477(1), 556 and 558 of the Civil Code).   Exceptionally, when the offence
was due to simple negligence, the court may establish an indemnity lower than the real amount of the damages(Article 487 of the Civil Code).
112 Articles 326 to 337 Civil Procedure Code enacted by Decree-Law 55/99/M, 8 October 1999.Macau, China WT/TPR/S/82
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136. Intellectual property is also protected under criminal law, as many forms of infringement,
typically the non-authorized reproduction or trade of intellectual property on a commercial scale, are
punishable with criminal penalties.113  While the main penalties available are jail terms and criminal
fines114, there are also accessory penalties such as the closure of the commercial establishment115 and
important provisions regarding the seizure, disposal or destruction of the infringing goods as well as
their means of production.116  These are again complemented with various provisional mechanisms to
prevent the criminal infringement of intellectual property rights.
137. Though the right owners, or their representatives, must take the initiative to benefit from civil
law protection, the authorities are obliged to act in cases of criminal or administrative infringement.
There are no special requirements for foreign right holders regarding initiation of proceedings and in
all cases there is appellate jurisdiction to review the original decisions.117  Furthermore,
Macau, China's courts have implemented a special expedited prosecution system that allows a suspect
to be brought immediately to trial.
Enforcement and prosecution
138. Macau's officials have taken vigorous action to step up enforcement of intellectual property
laws through raids on production facilities and retail outlets dealing in pirated products.  Seizures ofpirate VCDs, CD-ROMS and other products from retail outlets in Macau, China have increased
sharply since 1997.
118  The Inspection of Economic Activities has most recently turned to trade by
retail outlets in pirated products;  it conducted 76 raids at the beginning of 2000.119  While the pace of
enforcement regarding sealing of production lines has decreased slightly since 1998, this may be
attributable to pirate replication facilities moving out of Macau, China.120  The authorities report that
most optical disc factories have been closed down and that the few (seven) that remain open are under
tight control by the Macau Economic Services.
                                                     
113 Several types of intellectual property infringement are considered to be a crime (see Articles 209 to
214 of the Copyright and Neighbouring Rights Law and Articles 289 to 294 of the Industrial Property Law).
114 The maximum criminal penalties for infringement of patents and designs are imprisonment for up to
two years or a fine up to 120 days;  for trade mark counterfeiting, imprisonment up to three years or a fine up to
180 days (Article 291 Industrial Property Law);  and for copyright reproduction imprisonment up to four years,
while for trade of copyright, imprisonment up to three years or a fine up to 240 days (Articles 211-212Copyright and Neighbouring Rights Law).  A day's fine may range between P 50 and P 10,000 according to thecourt's discretion (Article 45 Criminal Code).
115 Other accessory penalties include bail (i.e. an amount deposited by the infringer that will be
forfeited in the case of new infringement), the temporary prohibition of a certain profession or activity and the
publication of the judicial sentence (Articles 92 to 95 Criminal Code, Articles 203 to 208 Copyright andNeighbouring Rights Law and Articles 10 to 17 of Law 6/96/M, the latter being applicable as a result ofArticle 298 of the Industrial Property Law).
116 Article 296 Industrial Property Law, Articles 101 to 104 Criminal Code.
117 The Court of Second Instance or the Court of Final Appeal may review decisions of the Base
Judicial Court regarding civil or criminal infringements.  Decisions made by administrative bodies may be
appealed to the Administrative Court.
118 For example, the Inspection of Economic Activities increased its number of raids on retail locations
from 16 (13,094 optical discs seized) to 147 (127,836 optical discs seized) between 1997 and 1998.  In 1999,91 raids were conducted (268,608 optical discs seized) and by 30 June 2000, 61 raids were completed (60,097optical discs seized).  In addition, the Macau Marine and Customs Police drastically increasing its seizures of
optical discs, from 157,619 in 1997 to 1,279,524 in 1998.
119 By 30 June 2000, the EIA had seized 59,696 such products, compared with a much lower 1999 total
of 18,726 from nine raids.
120 In 1998, 25 production lines were sealed by the IEA compared to 18 in 1999 and only 1 up to
June 2000.WT/TPR/S/82 Trade Policy Review
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139. While Macau, China has taken positive steps to strengthen its legal regime, and has increased
raids and enforcement efforts, the International Intellectual Property Alliance suggests that the main
gap in its anti-piracy programme is the failure to impose deterrent penalties.121  According to
government figures, only 54 of the 128 administrative proceedings initiated under various anti-piracy
laws in 1999 resulted in fines, and these averaged only about P 95,000.122  The International
Intellectual Property Alliance considers that these fines are not enough to deter alleged organizedsyndicates behind such piracy.
123  More crucially, government statistics indicate that fines decreased
in number and severity compared with 1998.124  Similarly, while the number of criminal proceedings
instituted increased dramatically at the beginning of 2000, this was matched by a decrease in the
number of criminal sentences.125
Border measures
140. The Macau, China borders are under the jurisdiction of the Macau Maritime and Customs
Police, which has, inter alia , the power to suspend the importation of any goods that infringe
intellectual property laws provided that  such importation is deemed criminal.
(iv) Competition policy and regulatory issues
141. Confident of the disciplinary effects of an open market environment, Macau, China has no
specific competition law;  however, the 1999 Commercial Code establishes some general disciplines
regarding competition policy in order to safeguard economic freedom and avoid abuse.  The Code
states that any agreement or business practice used to nullify or impair competition is prohibited.126
Despite this provision, a contract that limits competition must be in written form, and is restricted interms of duration, activity, and location.  The duration should be no more than five years unless
otherwise provided.
127  In addition, recipients of concession must offer equal treatment to all
suppliers.128
142. The Code is generic but constitutes legal grounds for promoting a competitive environment.
In addition, Macau, China is aware of the benefits of a competitive market.  Thus, the Administration
is paying close attention to competition policies formulated by other Members, and is flexible and
open to adopting them.
143. Nonetheless, there seems to be a lack of competition in Macau's services market in general.
Most public services, including telecommunications, water, electricity, and transport are provided by
private companies with exclusive rights under government concessions.  The price of most public
utilities, such as water, electricity, bus and mini-bus fares, taxi fares, post and telephone, etc. are
administered or monitored by the respective regulatory bodies to safeguard consumer interest.
                                                     
121 International Intellectual Property Alliance (2000).
122 This situation had not improved in 2000;  only one fine, of P 5,000 had resulted from
33 administrative proceedings initiated by 30 June 2000.
123 International Intellectual Property Alliance (2000).
124 There were 111 fines instituted in 137 administrative proceedings during 1998 at an average of
P 340,124.
125 While 119 criminal proceedings were instituted by 30 June 2000, only two resulted in sentences;
whereas for the 87 proceedings instituted in 1999, 13 sentences were handed down.
126 Article 153 Section X Commercial Code.
127 Article 154 Section X Commercial Code.
128 Article 155 Section X Commercial Code.Macau, China WT/TPR/S/82
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144. In terrestrial public transport, Macau, China has two franchized bus companies with partially
overlapping itineraries;  fares are uniform and ap proved by the Authority of the MSAR Government.
There are three shipping companies running the pa ssenger ferry business between Hong Kong, China
and Macau, China.  No exclusive rights are granted to any company operating maritime passenger
transport.  There is only one airline holding concessionary rights for public air transport services.  In
addition, only one company operates helicopter passenger services between Macau, China andHong Kong, China (Chapter IV(3)).
145. The telecommunications monopoly concession was granted in 1981 for a 20-year period;  it
was revised in December 1999 and extended for ten years.  The new contract provided exclusive
rights for fixed local, internal and transit telephon e services;  local and international mobile telephony
services, information-providing services, internet services, and value-added services were liberalized.The monopoly on the retail of cellular phones was dismantled on 1 November 1994.  In 1998, the
Consumer Council prepared a study examining th e development of the telecommunications industry
in Macau.  The study underlined, among other things, the importance of internal and external
competition relative to the industry.
146. Gambling services have been under a private monopoly since 1961 when a concession was
granted to " Sociedade de Turismo e Diversões de Macau " (STDM) for 20 years;  the contract was
revised and extended in 1982 and 1997 respectively, and will expire in 2001.  In June 2000, a special
committee was formed to study the future development and management of this industry.
129
147. There are no exclusive supply channels for any goods except those supplied to Macau
International Airport, for technical safety considerations.
                                                     
129 The Chief Executive of the MSAR Government chairs the Committee, which comprises the
Secretary for Economy and Finances;  representatives from  the Secretary for Social Affairs and Culture, and the
Secretary for Security;  and the Director of Gambling Inspection and Coordination Services (Executive Decision
No. 120/2000, 29 June 2000).