RESTRICTEDWORLD TRADE
ORGANIZATIONWT/ACC/VUT/13
16 October 2001
(01-5082)
Working Party on the
Accession of Vanuatu
DRAFT REPORT OF THE WORKING PARTY ON
THE ACCESSION OF VANUATU
INTRODUCTION
1. The Government of the Republic of Vanuatu applied for accession to the World Trade
Organization in June 1995.  At its meeting on 11 July 1995, the General Council established a WorkingParty to examine the application of the Govern ment of Vanuatu to accede to the World Trade
Organization under Article XII of the Marrakesh Agreement establishing the WTO.  The terms ofreference and the membership of the Working Party are reproduced in documentWT/ACC/VUT/3/Rev.5.
2. The Working Party met on 3 July 1996 and [.……..] under the Chairmanship of
H.E. Mrs. S.B.A. Syahruddin (Indonesia).  In additi on, the Working Party held several informal sessions
between the formal meetings to clarify positions and work on the draft report of the Working Party.
DOCUMENTATION PROVIDED3. The Working Party had before it, to serve as a basis for its discussions, a Memorandum on the
Foreign Trade Régime of Vanuatu, the questions submitted by Members on the foreign trade régime ofVanuatu, together with the replies thereto, and other information provided by the authorities of Vanuatu
(WT/ACC/VUT/2, WT/ACC/VUT/4, WT/ACC/VUT/6 and WT/ACC/VUT/7), including the legislativetexts and other documentation listed in Annex I.
INTRODUCTORY STATEMENTS
4. The representative of Vanuatu recalled that his country was a small least-developed country
composed of a large number of islands located in the centre of the Pacific Ocean.  Vanuatu had a totalpopulation of about 180,000 people living on 68 of thes e islands, and a per capita annual income of
US$1,150 (in 1999).   Vanuatu could only support very low living standards.  Incomes in the capital, Port
Vila, and its other main town, Luganville were above average, especially in the expatriate community.WT/ACC/VUT/13
Page 2
Outside the urban centres, about 80 per cent of th e population depended on the subsistence sector for
their livelihood.
5. The economy of Vanuatu was very fragile and the Commonwealth Secretariat had placed the
country at the top of its vulnerability index.  It was exposed to frequent external and domestic shocks,
including natural disasters such as cyclones.  Vanuatu was distant from its main markets, and exported a
narrow range of goods, of which copra was the most important (44 per cent of export earnings in 1998),
followed by kava (23 per cent), sawn timber (13 per cent), beef (8 per cent), cocoa (4 per cent) andseashells (2 per cent).  In 1998, Vanuatu’s main e xport markets were the European Union (34 per cent),
Bangladesh (18 per cent), Japan (11 per cent), New Ca ledonia (3 per cent) and Australia (3 per cent) and
its main suppliers: Australia (43 per cent), New Zeal and (11 per cent), New Caledonia (7 per cent), Japan
(6 per cent), France (6 per cent), Fiji (5 per cent) and Singapore (3 per cent).  Because the manufacturingsector was extremely small and Vanuatu imported mo st of its needs, export earnings covered only one
third of the bill for imports.  On the other hand, the services account was positive, thanks mainly to
receipts from tourism and transportation.
6. Vanuatu had been watching the rapidly evolving global economic scene with much interest.  The
world economy was becoming increasingly globalized and competition in trade and capital wasincreasing in intensity.  The Government wanted Vanuatu to be part of the global trading and financialsystem in order to share in the growth expected in  the wake of the newly established world multilateral
trading system. However, he stressed that with the broad potential advantages offered by WTO
membership, Vanuatu had a keen interest in integr ating its economy into the multilateral trading system.
He was conscious that integration into the multila teral trading system would require much work to
restructure the economy and the domestic policy framewo rk to achieve policies and legislative structures
consistent with the obligations of the WTO.  However, a rule-based system had particular attractions tosmall countries such as Vanuatu, as it promised fair and equitable treatment for all Governments, big and
small, strong and weak.  Accordingly, Vanuatu expect ed to accede on terms appropriate to its status as a
least-developed country and in particular to be acco rded the special and differential rights accorded to
these countries in WTO Agreements.
7. In their opening remarks, members of the Work ing Party welcomed the request from Vanuatu to
accede to the WTO.  Experience had shown that the accession process, while sometimes complex, oftenserved to guide the establishment of trade polic ies within well-tested paths that supported economic
development and growth.  Members were ready to provide experience and support to Vanuatu
throughout the accession, and work constructively with Vanuatu in establishing appropriate terms ofaccession in a timely manner.  Some members pointed to  Vanuatu's status as a least-developed country,WT/ACC/VUT/13
Page 3
and would take this into account in determining th e commitments and concessions that they would be
seeking from Vanuatu.
8. The Working Party reviewed the economic policies and foreign trade regime of Vanuatu and the
possible terms of a draft Protocol of Accession to the WTO.  The views expressed by members of the
Working Party on the various aspects of Vanuatu's foreign trade regime, and on the terms and conditions
of Vanuatu's accession to the WTO are summarized below.
ECONOMIC POLICIESMonetary and Fiscal Policy
9. The representative of Vanuatu said that Vanuatu had a conservative approach to fiscal policy,
with a somewhat narrow tax base.  Commitments under the World Trade Orga nization would have a
direct impact on the yield of indirect  taxes.  The structure of the tax system was being reformed to ensure
the revenue needs of the Government, while promoting economic efficiency, domestic savings, risktaking and investment activities.
10. Vanuatu levied no personal or corporate income taxes, no estate or gift duties, and no capital
gains taxes on residents or non-residents.  Taxes applied by Vanuatu included rent tax; contributions tothe National Provident Fund; land taxes; municipal ta xes; stamp duties; fees, taxes and stamp duties on
the registration of motor vehicles and issuance of driver's licence; taxes relating to the extraction of
minerals; tax on logging licence; tax on licence for commercial fishing in Vanuatu's Economic Zone;business licence fees; hotel and licensed premises tax; taxes on insurance; gambling taxes; buildingconstruction permit fees; navigation and port charges; work permit fees; residence permit fees;  aviationcharges;  departure tax;  and – since 1 August 1998 – value added tax.
Foreign Exchange and Payments
11. The representative of Vanuatu said that Vanuatu  had no foreign exchange controls.  All inward
and outward movements of capital were unrestricted.  There were no restrictions on payments forinvisibles, and exchange proceeds need not be surrendered.  No prescription requirements applied forpayment of currency.  The Vanuatu authorities ma de no distinction between accounts of residents or
non-residents; all accounts could be debited or credited freely.  Vanuatu had become a member of theIMF in 1981, and had formally accepted the obligations of Article VIII, Sections 2, 3 and 4 of theArticles of Agreement of the IMF as from 1 December 1982.WT/ACC/VUT/13
Page 4
12. The external value of the currency of Vanuatu - the Vatu - was determined on the basis of a
(trade and tourism) transactions-weighted basket of currencies of Vanuatu's major trading partners.  The
Reserve Bank of Vanuatu traded foreign exchange daily with commercial banks, the Government and
the Vanuatu Commodities Marketing Board (VCMB).  No subsidies or taxes were levied on purchases
or sales of foreign exchange.
Investment Regime
13. The Foreign Investment Act No. 15 of 1998 encouraged investment in Vanuatu.  However, the
Act prohibited investment in activities such as manufacture of nuclear weapons, chemical weapons,
arms, and dumping or storage of nuc lear waste and toxic chemicals.  It also excluded foreign nationals
from investing in small-scale businesses that could be carried out by Vanuatu nationals.
14. The Foreign Investment (Amendment) Act No.1 of 1999 together with the Foreign Investment
(Amendment) Act No. 6 of 2001 had further liberalised and rationalised foreign investment in Vanuatu.The negative list of businesses reserved for Ni-Vanuatu  was much shorter than in the past (see Annex 2).
For instance, investments in hotels and motels that used to be restricted to nationals had now been
opened up to foreign investment if the investme nt exceeded 5 million Vatu (VT), approximately
US$35,000, in the rural sector and VT 10 million (US$70,000 – and annual turnover of VT 20 million ormore) in the urban sector.
15. The new Act and subsequent amendments eliminated the discretion of the Government and
decisions of the Vanuatu Investment Promotion Au thority were now based on objective criteria.  The
new Act also addressed important issues such as  labour laws, immigration, and business legislation
including land laws.  It streamlined investment procedures with regard to administrative duties,
approvals, land disputes and industria l disputes.  Investors in some serv ices sectors were, of course, also
subject to measures regulating these individual sect ors.  These measures are dealt with below in the
section of this report on Policies Affecting Trade in Services.
16. The issuance of work permits was regulated by the Labour (Work Permits) Act.  This included a
reserved list of professions, now modified by the Foreign Investment (Amendment) Act and comprising
able seaman/ordinary seaman;  bricklayer;  bus driver ;  clerical supervisor;  dock worker;  driver;  hotel
receptionist;  housemaid;  lorry and van driver;  mas on;  painter;  portable saw-miller;  receptionist;
street vendor;  typist and waitress/waiter.
17. The issuance of residence permits to foreigners was linked to investment in Vanuatu.  An
investment of VT 5 million (US$35,000) in cash or othe r assets in Vanuatu entitled a foreigner to a one-WT/ACC/VUT/13
Page 5
year residence permit.  A higher initial investment, a nd an undertaking to maintain the investment at this
level, ensured the individual of a longer residence permit.  Maximum-length residence permits (15 years)
were issued to foreigners having invested more  than VT 100 million (US$700,000) in Vanuatu.  The
initial fee for one year and subsequent annual renewal amounted to VT 20,000 (US$140).
18. All land belonged to the indigenous populati on of Vanuatu.  Customary ownership was
complicated, resulting in frequent disputes concer ning ownership and boundaries.  These disputes were
settled by resort to customary law.  Foreigners had the right to lease land.  Their rights were governed by
the Land Lease Act Cap 163.  Once registered, a leas e was governed by the laws of Vanuatu.  The
Foreign Investment (Amendment) Act provided that di sputes related to leases were first considered by
the Vanuatu Investment Promotion Authority and the n, if necessary, by the courts.  A Subsidiary Land
Rent Payment of 2 to 4 per cent of gross annual tu rnover, paid to the custom landowners, applied to
tourism leases.
State Ownership and Privatization
19. The representative of Vanuatu said that the Gove rnment owned outright or had part interest in
18 companies.  Six companies – Air Vanuatu (Ope rations) Ltd, Vanuatu Inte rnal Air Services Ltd,
Vanuatu Livestock Development Lt d, Airports Vanuatu Ltd, Vanuatu Post Ltd, and National Bank of
Vanuatu – where wholly-owned, while the Government  was majority owner of Metenesel Estates Ltd
(99.41 per cent) and Vanuatu Abbatoirs Ltd. (85.4 per cent).  The Government held minority stakes in
Ifira Wharf and Stevedoring (1994) Ltd, Northern Is lands Stevedoring Ltd, Telecom Vanuatu Ltd, Union
Electrique du Vanuatu Ltd and Globa l Manufacturing and Trading Ltd, as well as in two companies
scheduled for voluntary liquidation (Ifira Wharf and Stevedoring Ltd and Ifira General Services Ltd).
The Government also had ownership interest in three companies – Bel-Mol Cattle Company Ltd, New
Resources (Vanuatu) Ltd, and South Pacific Fishing Co mpanies Ltd – which were either in receivership,
liquidation or dormant/struck-off.  In addition, fi ve statutory bodies (Natio nal Housing Corporation,
Vanuatu Broadcasting and Television Corporation, Vanuatu Commodities Marketing Board, VanuatuFinancial Services Commission, and Asset Management  Unit) operated in Vanuatu.  The Government of
Vanuatu had embarked on a policy to privatize and co rporatize four principal entities engaged in the
supply of water, electricity, stevedoring, and televi sion and broadcasting.  It had no immediate plans to
remove monopolies in the provision of water, electricity and telecommunications.  In line withGovernment policy to strengthen the private sector, it had taken action to establish the Vanuatu Chamber
of Commerce and Industry to act as a catalys t for private sector issues and reform.WT/ACC/VUT/13
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Competition and Pricing Policies
20. The representative of Vanuatu was asked whether basic utilities, such as electricity and
telephone, which enjoyed monopolies could increase prices whenever they liked.  The representative ofVanuatu said that the balance between efficient mana gement of resources and costs to the consumer was
delicate, and had not been examined carefully by the G overnment so far.  It recognized that reductions in
costs could only occur with effective competition in the market.  However, this was frequently difficult
to achieve in a country small in size and population.  He confirmed that Vanuatu did not maintain any
system of price controls nor did Vanua tu have legislation to effect it.
21. The representative of Vanuatu stated that if pri ce controls were introduced in the future, Vanuatu
would apply such measures in a WTO-consistent fash ion, and take into account the interests of exporting
WTO Members as provided for in Article III:9 of  the GATT 1994.  Vanuatu would also publish the list
of any goods and services subject to price controls in its Official Gazette.  The Working Party took note
of these commitments.
FRAMEWORK FOR MAKING AND ENFORCING POLICIES
Powers of Executive, Legislative and Judiciary, Administration of Policies on WTO-Related Issues
22. The representative of Vanuatu said that the Republic of Vanuatu was a parliamentary democracy
which had obtained independence in 1980.  The national political structure, as provided in theConstitution, consisted of a legislative, an executive and a judiciary branch.  The legislature consisted ofa single chamber with 52 Members.  The electoral system provided for proportional representation.  The
Executive consisted of the Prime Minister and the c ouncil of Ministers and the Judiciary of a Chief
Justice and three Judges.  The Government was ad vised on custom and tradition by the National Council
of Chiefs.  The main Ministries responsible for the implementation of policies affecting trade were the
Ministry of Trade, Industry and Investment; the Ministry of Finance and Economic Management; and
the Ministry of Agriculture, Forestry and Fisheries.
23. The representative of Vanuatu said that existing Vanuatu Law contained a standard common law
right of judicial review.  The judicial system in Vanuatu required only the existence of just cause for
review, and the judiciary would ente rtain reviews of administrative as well as ministerial decisions made
in all such cases.  The new Customs Act (Section 103(3)), which had been gazetted in October 1999,provided the right of appeal against decisions of Cu stoms.  Appeals against decisions of the Director of
Customs could be made to the Supreme Court of Vanuatu within 28 days of the date on which the
appellant had been notified of the decision to be appe aled against, or within any further period allowedWT/ACC/VUT/13
Page 7
by the Supreme Court.  The Supreme Court could confirm, reverse or modify the decision appealed
against, or refer the matter back to the Director of  Customs with directions to reconsider the whole or
any specified part of the matter.  In relation to ot her legal instruments, Article 5(1)(k) of the Vanuatu
Constitution provided that equal treatment under th e law of administrative action was a fundamental
right, and a person whose rights had been infringe d could apply to the Supreme Court to enforce that
right.  Individual pieces of legislation also provided  for the right of appeal, for example, the Business
Licence Act allowed a decision not to issue, renew or transfer a business licence to be appealed to the
Minister, and the Minister’s decision c ould be appealed to the Supreme Court.
24. The representative of Vanuatu confirmed that, from the date of its accession, its laws would give
foreign and domestic importers and exporters the right to appeal administrative action relating to matters
subject to WTO provisions to an independent body in full conformity with WTO obligations, including
Article X:3(b) of the GATT 1994. The Workin g Party took note of this commitment.
25. The representative of Vanuatu said the Government had decided to establish six regional
provinces in late 1994 with a view to accelerate and improve administration and other important
processes in the provinces.  In consistency with Vanuatu's laws, each respective province hadautonomous power to enact by-laws and other admini strative matters pertaining to taxes and other
business and commercial undertakings.  He noted th at under the Decentralization Act No. 1 of 1994, any
potential tax, fee or levy raised by provincial go vernments required the approval of the Government
through the Ministry of Home Affairs, which would evaluate its consistency with WTO provisions prior
to allowing its implementation.  An overview of trade-related legislation introduced by Vanuatu to
implement WTO requirements is presented in Table 1.
26. In response to a specific question from a Member, the representative of Vanuatu said that the
Vanuatu Constitution required treaties to be ratifi ed.  Vanuatu had ratified several international
agreements.  Ratification procedures involved the prepar ation of a short Bill with the treaty attached to it
in French language as well as in English.  Bills we re subject to debate in Parliament prior to their
passage.  An Act Bill passed by Parliament would subsequently be forwarded to the President for assent,and publication in the Official Gazette, which was ma ndatory, would be the final step before its entry
into force.
27. The representative of Vanuatu stated that if laws or other acts of Vanuatu should be found to
contradict international treaties or agreements, the provisions of the international treaty or agreement,
such as the WTO, would apply.  The representative of Vanuatu confirmed that sub-central entities had no
autonomous authority over issues of subsidies, ta xation, trade policy or any other measures covered by
WTO provisions.  He confirmed that the provis ions of the WTO Agreement, including Vanuatu'sWT/ACC/VUT/13
Page 8
Protocol, shall be applied uniformly throughout its customs territory and other territories under Vanuatu's
control, including in regions engaging in border tr ade or frontier traffic, special economic zones, and
other areas where special regimes for tariffs, taxes and regulations are established.  He added that when
apprised of a situation where WTO provisions were not being applied or were applied in a non-uniform
manner, central authorities would act to enforce WTO provisions without requiring affected parties to
petition through the courts.  The Working Party took note of these commitments.
POLICIES AFFECTING TRADE IN GOODSIMPORT REGULATIONTrading Rights (the right to import and export)
28. The representative of Vanuatu said the Business Licence Act regulated the licensing of all
business in Vanuatu.  The Act provided that, subject to certain exemptions, no person, company orassociation could carry out a business without a licence issued under the Act.  The Act had recently beenamended.  In the past, any natural or legal person had required a licence to import for direct retail or
wholesale trade, and one-year licences were grante d by the Minister of Finance upon application and
against payment of an annual fee of VT 50,000 (abou t US$400) plus 2.5 per cent of the value of the
transactions.  The fee structure had been changed a nd the ad valorem element had been eliminated.  At
present, a licence to engage in direct retail or w holesale trade was issued upon payment of a one-time fee
of VT 10,000 (about US$70).  No dis tinction was now made between th e right to trade in domestic or
imported products and the licence gave the right to import goods originating in any country.  Thebusiness licensing system was maintained for revenue  purposes.  Licences were normally issued within
four weeks from the date of application.  Licences would only be granted to ni-Vanuatu and resident
natural or legal persons who had co mplied with the requirements of the Business Licences Act, and – for
non-citizens or non-resident foreign investors – with the requirements of the Foreign Investment Act of
1998.  Under the Import of Goods Cont rol Act, the Minister of Trade could limit the type or quantity of
goods to be imported by the licence holder, but these provisions had never been used.  He confirmed that
Vanuatu would review these provisions in the context of a future review of th e Imports of Goods Control
Act.
29. In reply to questions, Vanuatu said that it does allow foreign and domestic persons to import and
export and that it had no registration or other requirements to engage in importing and exporting otherthan those described in the previous paragraph.WT/ACC/VUT/13
Page 9
30. A member observed that no distinction is made in Vanuatu law between the right to import and
the right to distribute goods in Vanuatu and that, if the availability of imported goods to Vanuatudistributors is limited through restrictions on who can import, the protections of Articles III and XI ofGATT 1994 will be undermined.  This member accordingly requested that alterations be made to
Vanuatu legislation to remove all such restrictions.
31. In reply, the representative of Vanuatu said that Schedule 1 of the Business Licence Act of 1998
defined 11 classes of business licence and a number of sub-categories within those classes.  Category D1
(Importers) and Category D3 (Retailers and Wholesal ers) were relevant to distribution.  A Category D1
licence covered direct importation for resale (without  transformation), wholesale or retail - including
acting as agent in buying or selling merchandise to ot her businesses - of merchandise of any description
with a few exceptions, notably for petroleum produc ts, motor vehicles, tractors and self-propelled
machines and spare parts which fell under a differen t licence category.  Businesses in the merchandising
trades who held a Category D1 licence were also re quired to hold a D3 (Retailer or Wholesaler) licence,
as appropriate.  Category D3 licences were required for businesses selling merchandise of every
description wholesale or retail, except petroleum products and items subject to a Pharmacist and
Druggist licence.  Vanuatu had no special category of business licence for franchising, but its legislation
did not prohibit local or foreign participation in franchising.
32. Category D1 and D3 licences were issued ag ainst an annual fee of VT 10,200 (US$72) and VT
20,400 (US$145), respectively, to ni-Vanuatu citizens, non-citizen residents and non-resident foreigninvestors.  Non-citizens and non-resident foreign in vestors having received an  approval certificate from
the Vanuatu Investment Promotion Authority paid an additional annual fee of VT 91,800 (US$640).  The
approval certificates were issued in a transparen t and automatic manner in accordance with the Foreign
Investment Act 1998.
33. The representative of Vanuatu confirmed that, subsequent to a revenue study and no later than
June 2002, the Vanuatu authorities will issue upon request to any domestic or foreign entityautomatically, promptly and on terms and in a manner no less favourable than for other categories ofbusiness licence, a new category of business licence en abling holders to engage in the importation and
exportation of goods.  To ensure this, the Business Licence Act will be amended no later than June 2002.In addition, the Vanuatu authorities will review th e fee structure for business licences and adjust it to
ensure that businesses engaged in the merchandising  trades are not required to purchase two business
licences in order to import.  The Working Party took note of these commitments.
34. The representative of Vanuatu confirmed that from the date of accession, Vanuatu would ensure
that its laws and regulations relating to the right to trade in goods and all fees, charges and taxes leviedWT/ACC/VUT/13
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on such rights would be in full conformity with its WTO obligations, including Articles VIII:1(a),
XI:1and III:2 and 4 of the GATT 1994 and that it woul d implement such laws and regulations in full
conformity with these obligations.  The Wo rking Party took note of these commitments.
Ordinary Customs Duties
35. The representative of Vanuatu said that Vanuatu had adopted the Harmonised Commodity
Description and Coding System (HS) in 1989, and applied it with certain modifications as some
subdivisions at the six-digit level had been regrouped into the four-digit HS level.  Vanuatu had applied
the six-digit level classification HS (96) as fro m 1 July 1998, with seventh and eight-digit levels
reflecting national classifications.
36. The representative of Vanuatu said that, li ke many other least developed countries, his
Government was obliged to rely on the customs tariff fo r a large part of its revenue and that this would
continue to be the case in the foreseeable future despite all the Government’s efforts to adopt a more
modern tax structure.  At present, tariffs alone  accounted for approximately 35 per cent of Vanuatu’s
total government revenue, including grants.  While  the tariffs also provided an incentive to local
production, in practice only an extremely limited num ber of goods were actually produced in Vanuatu.
This made it clear that, with very few exceptions, the tariff had very little protective effect and did not actas a barrier to imports.  Most tariffs were ad valorem  rates.  Specific duty rates were levied on beer,
wines, spirits, tobacco products and hydrocarbon oils.
37. Requests for the examination of proposals for tariff protection were assessed by the Department
of Industry.  For the manufacturing industry, prac tice would be to grant protection for a minimum of
three years, to be reviewed annually thereafter.
Other Duties and Charges Levied on Imports but not on Domestic Production (except charges for
services rendered)
38. In answer to questions, the representative of  Vanuatu said that the Import Duties Act of 1998
had abolished a 5 per cent service tax levied on impor ts of most products, as of 1 July 1998.  There was
no stamp duty for imports.
39. The representative of Vanuatu confirmed that, in the past, the importation of rice, sugar, flour,
tobacco products and canned mackerel had been licen sed by the Vanuatu Cooperative Federation against
payment of 3 or 4 per cent commission on the c.i.f. va lue, in order to enable the Federation to repay its
outstanding debts.  These requirem ents had now been abolished and the Federation had ceased to operate
commercially.  He confirmed that Vanuatu currently applied no "other duty and charge" referred to in
Article II:1(b) of GATT 1994.WT/ACC/VUT/13
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40. The representative of Vanuatu stated that the app lication of any "other duties and charges" other
than normal customs duties and fees and charges for services rendered would be in accordance withWTO provisions from the date of accession.  He fu rther confirmed that Vanuatu has bound "other duties
and charges" as defined in Article II:1(b) of GA TT 1994 at zero in its Goods Schedule.  The Working
Party took note of this commitment.
Tariff Rate Quotas, Tariff Exemptions
41. The representative of Vanuatu said that goods imported for agriculture, horticulture, livestock or
forestry could be exempted from import duty.  By joint decision, the Directors of Customs and
Agriculture could also exempt from import duties plan t, machinery, materials and equipment (including
purpose-designed vehicles), includi ng spare parts and accessories.  Provided the goods were intended
exclusively for use in a development project approv ed by the Director of Agriculture, the exemption
could also be extended to fuel oils for static m achinery and vehicles engaged primarily in off-road
applications.
42. Schedule III of the Vanuatu Customs Tariff provided that import duty exemptions or reductions
might be granted on goods which could be considered beneficial for the economic development ofVanuatu, including raw materials and equipment fo r manufacturing, goods destined for new tourism
developments, finance or commercial sectors, mine ral exploration, fisheries and inter-island shipping.
Goods imported for use by diplomatic missions or  other approved organizations, for example as
donations, aid or disaster relief, were also admissibl e free of duty or tax by virtue of international
conventions or agreements.
43. The representative of Vanuatu confirme d that, upon accession, it would only grant duty
exemptions on an MFN basis, in accordance with the provisions of Article I of GATT 1994.  All
exemptions, whether granted or declined under Sec tion III of the Vanuatu Customs Tariff, would be
notified by publication in the Government Gazette.
44. A member encouraged strongly the Government of Vanuatu to revise its import tax law to limit,
to the greatest extent possible, the use of import ta riff exemptions.  Rather than using a complex and
potentially discriminatory tariff exemption scheme , the Government of Vanuatu should give careful
consideration to providing low bound tariff rates to  import items which served as inputs for those
enterprises for which the Government would seek to encourage operations.
45. The representative of Vanuatu replied that his Government had recently taken steps to lower
tariffs on inputs used in the production process substantially but reiterated the importance of tariffrevenues for his country.  The Vanuatu Customs Tariff,  Schedule III, s ection 1 (Economic Reliefs), X.1WT/ACC/VUT/13
Page 12
which regulated the import duty exemptions policy for goods imported for manufacturing or processing
had been revised in 1998 to make the duty exempti on policy more transparent, and had reduced the
scope for discretion.  Decisions were now based on ob jective criteria for evaluating the contribution that
individual exemptions would make to the economic de velopment of the country.  These criteria did not
discriminate between products originating in differe nt countries.  They included; the quality of the
product, the size of the investment in productive capac ity, participation of Ni Vanuatu, the location of the
business, workers employed, and trai ning opportunities provid ed.  Decisions could be subject to judicial
review.  Details of the system were provided to the Working Party.
46. Applicants were required to complete the "V anuatu Duty Exemption Application Form" to
obtain an import duty exemption.  The form could be obtained from the Department of Trade and
Industry, Customs, Fisheries, Minerals and Tourism Departments.  Each respective line department, e.g.
tourism or minerals, considered the application which, if supported by the line department, would be
forwarded to the Director of Customs for consider ation by the Duty Exemptions Committee, comprising
representatives of Finance, Customs and Trade.
47. The representative of Vanuatu stated that upon accession to the WTO, any tariff exemptions
would only be implemented in confor mity with the relevant WTO provisions including Article I of the
GATT 1994 and the TRIMs Agreement.  The Working Party took note of this commitment.
Fees and Charges for Services Rendered
48. The representative of Vanuatu said that, as a result of recent modifications, the only charge
collected to cover the cost of the services rendered was of about US$3.50 (VT500) per customs
declaration.  He added that port a nd marine services were provided by the Ifira Wharf and Stevedoring
Limited and the Northern Islands Stevedoring Lim ited on a purely commercial basis.  These companies
were not controlled by the Government.  Details of  the port handling charges are presented in Table 2.
There are separate charges for exports and imports.  He confirmed that Vanuatu does not impose anyfees or charges for services rendered to imports  or exports other than those listed in Table 2.
49. The representative of Vanuatu stated that all fees  and charges for services related to imports and
exports would be operated in conformity with the provisions of the WTO Agreement, in particular
Articles VIII and X of GATT 1994.  The representative of Vanuatu also stated that, from the date of
accession, Vanuatu would not apply, introduce or reintr oduce any fees and charges for services rendered
that were applied to imports on an ad valorem basis,  or allow firms providing customs or port services on
its behalf to apply such fees or charges.  Informati on regarding the application and level of such fees andWT/ACC/VUT/13
Page 13
charges, revenues collected and their use, woul d be provided to WTO Members on request.  The
Working Party took note of these commitments.
Application of Internal Taxes to Imports
50. The representative of Vanuatu said that domestical ly-produced beer was subject to an excise tax
of VT 80 per litre, but there was no excise on imported beer.  While this was not inconsistent with WTOrequirements, the excise tax on imported and dom estically-produced beer would be equalized upon
Vanuatu's accession  to the WTO.  No other products were at present subject to excise tax.
51. Vanuatu had introduced value added tax on 1 Au gust 1998, replacing a turnover tax.  VAT was
levied at a single rate of 12.5 per cent.  The tax was trade neutral in full observance of the obligationsunder Articles I and III of the GATT 1994.  Signatorie s of the Melanesian Spearhead Group Agreement
and Fiji were subject to VAT.  Exports were zero-rated.
52.  The representative of Vanuatu stated that from the date of accession Vanuatu would apply its
domestic taxes in full compliance with the relevant provisions of the WTO, including Articles I and III
of GATT 1994, in a non-discriminatory manner to imports from all WTO Members and to domestically-produced goods.  The Working Party took note of this commitment.
Quantitative Import Restrictions, including Prohibitions, Quotas and Licensing Systems
53.  The representative of Vanuatu said that prohib itions affected importation of obscene or indecent
material, narcotics and dangerous drugs, and right- hand drive motor vehicles.  The Ministry of Home
Affairs authorized imports of firearms and ammun ition, licences being strictly controlled for reasons of
public security and safety.  The Ministry of Home Affairs also issued automa tic licences for importation
of liquor and spirits in order to monitor trade.  Information on import licensing procedures according to
the format applicable to WTO Members was provided to the Working Party in document
WT/ACC/VUT/7, Annex I.  Non-tariff measures app lied by Vanuatu prior to accession are enumerated
in Table 3.WT/ACC/VUT/13
Page 14
Table 3:  Non-tariff Measures Applied by Vanuatu Prior to Accession
Item HS 96 Classification Non-Tariff Measure Justification
Screen printed T-shirts
(with Vanuatu motif
and embroidery)61.09 Import licence – Ban Removal and
replacement with tariff
of VT 500 per unit or
70%, whichever is
greater
Firearms andammunition93.04-93.06 Import licence Article XX
Liquor and spirits 22.08 Import licence-
automaticArticle XX
Pornographic material N.A. Import ban Article XX(a)
Narcotics N.A. Import ban/licence Article XX
Rice 10.06 Subject to import
licence issued by
Vanuatu Co-op Fed.
with commission of 3 to
4 per centMeasure eliminated
Flour 11.05-11.06 " "
Sugar 17.01 " "
Canned fish 16.04 " "
Tobacco products 24.01-24.03 " "
Plants and other
products controlled by
CITESN.A. Import licence from the
Vanuatu Quarantine
ServiceArticle XX
54. The representative of Vanuatu said that under th e Import of Goods Control Act, the Minister of
Trade could restrict or prohibit importation of goods  into Vanuatu (or specified parts thereof) for the
purpose of protecting and stimulating local industry.  However, these provisions had been found to be of
little practical value and had rarely been used.  Once Vanuatu was a Member of WTO, the powers under
this Act would be used only in stri ct conformity with WTO provisions.
55. In reply to specific questions, the representa tive of Vanuatu confirmed that importation of
potatoes had until recently been prohibited during th e harvest months (August-March), but that this
seasonal restriction no longer applied.  It had been replaced with an equivalent tariff.  Import orders
restricting importation of screen-printed T-shirts with Vanuatu motif had also been abolished and
replaced by equivalent tariffs.  As noted above under the heading "Other Duties and Charges", import
orders restricting imports of rice, sugar, flour, to bacco products and canned mackerel and associated non-
automatic import licences had also recently been abolished and replaced by tariff equivalents.  Import
requirements related to Sanitary and Phytosanitary m easures are dealt within the relevant section below.
56. The representative of Vanuatu confirmed that Vanuatu would, from the date of accession, not
introduce, re-introduce or apply quantitative restrictio ns on imports, or other non-tariff measures such asWT/ACC/VUT/13
Page 15
licensing, quotas, prohibitions, bans and other restrictions having e quivalent effect that cannot be
justified under the provisions of the WTO Agreement.  He further confirmed that the legal authority of
the Government of Vanuatu to restrict or prohibit importation of goods into Vanuatu would be applied
from the date of accession in conformity with the requirements of the WTO, in particular Articles XI,
XII, XIII, XVIII, XIX, XX, and XXI of the GATT 1994, and the Agreements on Agriculture, the
Application of Sanitary and Phytosanitary Measur es, Import Licensing Procedures, Safeguards, and
Technical Barriers to Trade.  The Working Party took note of these commitments.
Customs Valuation
57. Early in the accession process the representa tive of Vanuatu provided information on
implementation and administration of the Custom s Valuation Agreement according to the format
applicable to WTO Members in document WT/ACC/VUT/ 7, Annex II.  At that time, current regulations
were contained in Schedule III of the Import Dutie s (Consolidation) Act [Cap.91] which were based on
the Brussels Definition of Value.
58. Some members said that Vanuatu should outlin e plans to undertake a thoroughgoing needs
assessment with regard to customs procedures, ad ministration and practices, with a view to full
implementation of the Customs Valuation Agreement.  Some members said that Vanuatu should clarify
whether it would intend to invoke the provisions of  the Customs Valuation Agreement providing special
and differential treatment for developing countries, e.g., the transitions/reservations on computed value
method, minimum values, reversal of sequential order, etc.
59. In reply, the representative of Vanuatu said  that the Import Duties (Consolidation) (Customs
Valuation Amendment) Act of 1999 had been passed to bring Schedule III into conformity with the
provisions of the WTO Customs Valuation Agreement.  Vanuatu had also introduced the ASYCUDA
programme in 1999 with financial assistance from Au stralia and technical assistance from UNCTAD in
order to facilitate the proper implementation of the customs valuation system.  Vanuatu Customs officers
had participated in a number of training courses in  1999 and 2000 in order to be ready to implement the
Import Duties (Consolidation) (Customs  Valuation Amendment) Act of 1999.
60. A member expressed concern that Article 12 of the Agreement (transparency) was not covered
in the legislation provided.  The representative of Va nuatu replied that other legislation provided for the
transparency provision in Article 12.  Section 8 of the Acts of Parliament Act (CAP 116) provides that
Acts must be published and section 13 of the Inte rpretation Act (CAP 132) provides that subordinate
legislation must be published.  A member expresse d some additional minor technical concerns aboutWT/ACC/VUT/13
Page 16
Import Duties (Consolidation) (Cus toms Valuation Amendment) Act of 1999.  The representative of
Vanuatu undertook to make the necessary amendments to the legislation to satisfy these concerns.
61. The representative of Vanuatu confirmed that Vanuatu would fully apply the WTO provisions
concerning customs valuation no later than 1 January 2001, including the Agreement on the
Implementation of Article VII of the GATT 1994, as well as the provisions for the Valuation of Carrier
Media Bearing Software for Data Processing Equi pment (Decision 4.1).  The Working Party took note of
these  commitments.
Rules of Origin
62. The representative of Vanuatu said that, collection of trade statistics apart, Vanuatu only used
rules of origin in the Melanesian Spearhead Group Agreement and in its bilateral trade agreement with
Fiji (see section on Trade Agreements below).  Th ese were based upon a change in HS classification at
the six-digit level.  There was no conflict between these rules and the WTO Agreement on Rules ofOrigin, and the Department of Customs has the capac ity to give an advance ruling on origin should an
exporter or importer desire it.  In answer to ques tions and comments, the delegation of Vanuatu again
stressed that rules of origin, particularly non-preferen tial rules of origin, played a very limited role in its
trade policy.  It did not, for instance, have provisi on for the use of trade remedies, such as anti-dumping
duties.
63. The representative of Vanuatu stated that from the date of accession, Vanuatu’s preferential and
non-preferential rules of origin would comply fully  with the WTO Agreement on Rules of Origin.  The
requirements of Article 2(h) and Annex II, paragra ph 3(d) of the Agreement which require provision
upon request of an assessment of the origin of the import and outline the terms under which it will beprovided,  would also be implemented prior to accession.  Vanuatu would abide by the relevant WTO
provisions on transparency and the provision of information about its rules of origin and their
application.  The Working Party took note of these commitments.
Other Customs Formalities
64. The representative of Vanuatu said that alt hough Vanuatu was not a member of the World
Customs Organization its systems and procedures related to its other customs formalities were based onthe Kyoto Convention on the Simplification and Harmonization of Customs Procedures.
Preshipment Inspection
65. The representative of Vanuatu said that Vanua tu did not carry out preshipment inspection of
imports and had no plans to do so.WT/ACC/VUT/13
Page 17
66. The representative of Vanuatu stated that if preshipment inspection requirements were
introduced, they would be temporary and in confor mity with the requirements of the Agreement on
Preshipment Inspection.  Vanuatu would take full respons ibility to ensure that such enterprises operating
on its behalf complied with the provisions of WT O Agreements.  Decisions by such firms could be
appealed by importers in the same way as administrative decisions taken by the Vanuatu Government.
The Working Party took note of these commitments.
Anti-Dumping, Countervailing Duties, Safeguard Regimes
67. The representative of Vanuatu said that Vanuatu had no provisions in its legislation for anti-
dumping and countervailing measures at present, and that there were no plans to introduce such
legislation.  His Government reserved the right to  employ anti-dumping duties, countervailing duties and
safeguard provisions in a manner consistent with its WTO obligations.  Any measures that would be
introduced would be notified to the relevant WTO Committee.
68. The representative of Vanuatu stated that Vanuatu would not apply any anti-dumping,
countervailing or safeguard measures until it had impl emented appropriate laws in conformity with the
provisions of the WTO Agreements on these matters.   Vanuatu would ensure the full conformity of any
such legislation with the relevant WTO provisions , including Article VI and XIX of the GATT 1994 and
the Agreement on the Implementation of Article VI, the Agreement on Subsidies and Countervailing
Measures and the Agreement on Safeguards.  After such legislation was implemented, Vanuatu would
only apply any anti-dumping duties, countervailing du ties and safeguard measures in full conformity
with the relevant WTO provisions.  The Wo rking Party took note of these commitments.
EXPORT REGULATION
69. The representative of Vanuatu said that exporters of Vanuatu goods which they had not
produced themselves on a commercial basis were ex empted from business licences.  Exporters of kava
needed to obtain an authority from the Vanuatu Qu arantine Services at a cost of VT30,000 (US$208).
Kava exporters were also required to pay a facili ty fee of VT80,000 (US$555), payable in instalments, to
the Vanuatu Quarantine Services.  Coffee was also subject to export licensing, revenue from which
covered the cost of quality control.  Vanuatu had abolished taxes on exports of copra (4 per cent), kava(3 per cent), beef (2 per cent), and cocoa (7 per ce nt).  Export taxes were still collected on logs and
unworked seashells.  The export of logs was currently banned for environmental reasons.  Themanufacturing sector was basically exempt from im port duties and taxes on raw materials imported for
manufacture, process and export under the Inward Pro cessing Relief Standards.  The representative of
Vanuatu said Vanuatu had no export subsidies.WT/ACC/VUT/13
Page 18
70. The representative of Vanuatu stated that, from the date of accession, Vanuatu would ensure that
it applied its laws and regulations governing export measures and would act in conformity with the
relevant provisions of the WTO, including Ar ticles I and XI of GATT 1994 and the Agreement on
Subsidies and Countervailing Measures.  The Wo rking Party took note of this commitment.
INTERNAL POLICIES AFFECTING FOREIGN TRADE IN GOODS
Industrial Policy, including Subsidies
71. The representative of Vanuatu said that self reliance, defined as meeting import requirements
from foreign exchange earnings and fiscal requirements from domestic revenues, was a long-term
economic objective.  Some projects had been set up to encourage local manufacturing and especially
small-scale industries, including high quality bags and leather products, aluminum boats, beer and juice,
some textiles and clothing items, coverings, fibreglass products, quality furniture, quality preservative-free natural dairy products, and coconut-based quality soap, cooking oil and hair lotion.
72. At the beginning of 1997, the Government had established an on-going Comprehensive Reform
Programme, focusing on outward-looking reform of the private and public sector.  Emphasis was put on
competitive production of goods for export, assisted by a more open trade regime.  Industrial projectscould be supported through special loans at relatively low interest rates from commercial banks and
special exemptions accorded by the customs and tax authorities, but the Development Bank of Vanuatu,
which had in the past provided low-interest loans for industrial projects, no longer existed.
73. The representative of Vanuatu stated that an y subsidy programmes would be administered in
line with the Agreement on Subsidies and Counter vailing Measures and that any such programmes
would be notified to the Committee on Subsidies and Countervailing Measures upon Vanuatu’saccession to WTO.  The Working Party took note of this commitment.
Technical Barriers to Trade
74. The representative of Vanuatu provided informa tion on technical barriers to trade in the format
applicable to WTO members (document WT/ACC/VUT/6, Annex VIII).  The National Building Coderequired construction in the main towns to meet certa in standards (necessary to protect life from cyclones
and earthquakes).  This was administered by the city  councils of Port Vila and Luganville.  Apart from
these and some basic health standards administered by  the Ministry of Health, which in his view did not
create any unnecessary obstacles to international trade as required by the Agreement on TechnicalBarriers to Trade, Vanuatu maintained no technical regulations or standards.  As a least developed
country, Vanuatu had no option but to leave most tec hnical standards issues as a private contractual
matter between buyer and seller.WT/ACC/VUT/13
Page 19
75. Vanuatu was not represented directly or throug h the South Pacific Forum at any international
standards bodies, such as the ISO.  However, given the rapid changes presently occurring with regard to
standards and their regulation globally, Vanuatu expected to take a more active role in this area in future.
As a result, the Forum Economic Ministers Meeting held in Fiji in July 1998 had mandated the
undertaking of a study of whether trade facilitation measures in standards could be achieved through a
regional facility.  Vanuatu had established an enquiry point, as required by Article 10 of the TBTAgreement, within the Department of Trade, Industry and Investment (documentsWT/ACC/VUT/9/Add.5 and WT/ACC/VUT/ 10).  The Director of the De partment would fulfill all
WTO’s TBT notification and enquiry point obligati ons.  The enquiry point was fully functioning.
76. The representative of Vanuatu stated that Va nuatu would apply the Agreement on Technical
Barriers to Trade from the date of its accession wi thout any transitional period.  The Working Party took
note of this commitment.
Sanitary and Phytosanitary Measures
77. The representative of Vanuatu said that Vanuatu had a very favourable pest status.  This was one
of the very few benefits of its isolation in the south Pacific and was a valuable national asset to bemeasured, utilized and preserved.  Its sanitary and phytosanitary (SPS) measures had to reflect this need.The legislative basis for Vanuatu’s sanitary and phytosanitary measures consisted of the AnimalImportation and Quarantine Act of 1988, and regulations  in Order No. 14 of 1994;  the Plant Protection
Act No. 14 of 1997, and the Imports Specification (Pla nts) Manual;  and the Food Control Act No. 21 of
1993 gazetted in July 1999.  Copies of these were prov ided to the Working Part y, together with other
documentation illustrating how these were implemented.
78. The representative of Vanuatu said that the Vanuatu Quarantine and Inspection Services were
responsible for implementing SPS provisions on animal s and plants, while the Department of Health had
responsibility for food control.  Vanuatu’s SPS measur es were  transparent.  The SPS enquiry point had
been established.  The task had been entrusted to the Director of the Vanuatu Quarantine and InspectionService, who would also be responsible for maki ng notifications to WTO and ensuring that the
transparency obligations of the SPS Agreement would be met.
79. Under the Animal Importation Act and the Plant Protection Act, listed items posing a negligible
risk may be imported without a permit.  Imports of other items coming under the Acts were subject to a
permit, issued once the safety of the product has been determined.  This was common practiceinternationally and particularly necessary in Vanuatu which was largely disease and pest free.  It was, toWT/ACC/VUT/13
Page 20
give one example, recognized by the Office Interna tional des Epizooties (OIE) as being free of all list A
OIE diseases.
80. All imported animals were examined at the point of entry by a veterinarian from the Department
of Livestock.  Animal products, pl ants and plant products were examined by a member of the Quarantine
and Inspection Services.  Reports from the OIE detailed the health status for determining source country
risk, and Vanuatu would not accept animals from count ries without a health status report.  Vanuatu
would not accept plant products if the risk analysis de monstrated that they represented a risk.  At the
request of importers, protocols were developed with  other countries for the importation of animals and
animal products as well as plant and plant products wh en the pests concerned was of particular concern
to Vanuatu.  These set out the steps to be taken in the exporting country to eliminate the risk.  Vanuatu
would normally not develop protocol s with countries having endemic OIE List A diseases as Vanuatu
had no high-security quarantine facilities to handle im ports from countries with serious animal diseases.
81. The Food (Control) Act restricted businesses a nd persons from displaying, storing or selling
food unfit for human consumption.  These provisions we re enforced through municipal health standards.
82. Within the limits of its resources as a least-developed country, Vanuatu took part in the relevant
international organizations.  On the animal side, Va nuatu was an active member of OIE, for instance, by
sending monthly reports to OIE on its disease stat us, having joined the organization in 1983.  Vanuatu
had been a member of the Codex Alimentarius Co mmission since 1995.  Vanuatu was also a member of
the newly formed Pacific Plant Protection Organization (PPPO), and had applied for membership in theInternational Plant Protection Convention (IPPC) in 1995.
83. Vanuatu’s SPS measures were based only upon scientific evidence of potential risk and had no
other foundation.  Whenever possible, Vanuatu based its national measures on international standards,
guidelines, or recommendations.  It followed OIE guide lines for all list A and B diseases and the code of
practice contained in the Imports Specification (Pla nts) Manual conformed to IPPC standards, which
cover the main products.  In practice, it followed Codex food standards.
84. Assistance in setting regulations was also obtai ned from the South Pacific Communities, as well
as the relevant services of Australia and New Zeal and.  The SPC provided scientific advice and technical
assistance and training to its members.  The Plan t Protection Unit of the S outh Pacific Commission had
established a list of prohibitions applying across the Pacific island countries producing similar crops in
comparable climate and environment.  The list was provided to the Working Party (document
WT/ACC/VUT/7, Annex IV).WT/ACC/VUT/13
Page 21
85. Vanuatu had the capability of doing risk assessments for itself.  Being a small least-developed
country, it frequently based these on risk assessments made by other countries where conditions weresimilar to its own.  It understood that developed count ries sometimes did the same.  The countries in its
region considered that there was need for co-operation on this matter.  To this end, studies had been
commissioned by the Secretariats of the South P acific Forum and the Pacific Communities on possible
means to develop a regional capacity.
86. Vanuatu was making other efforts to improve its current measures.  It was, for instance,
developing guidelines based on scientific principl es to formulate procedures for safe importation of
plants and plant products with the assistance of Ne w Zealand.  In future, principles to be applied
included area of freedom, treatment (heat treatmen t) and tissue cultured materials, which should
eliminate the risk of introduction of new pests.  It was also drafting an import specification manual based
on scientific information to further improve conformity with IPPC standards.
87. The representative of Vanuatu said that Vanuatu’s SPS enquiry point had been formally
established on 26 February 2001 (documents WT /ACC/VUT/9/Add.5 and WT/ACC/VUT/10) and was
fully operational.  In order to ensure that the SPS Agreement was effectively implemented as from thedate of Vanuatu's accession, procedures provided th at (i) information on proposed SPS measures which
might have a significant effect on trade were publ ished and notified to WTO, copies of the proposed
regulations were provided to other WTO Member s on request, a reasonable time was allowed for
Members to comment and for these comments to be ta ken into account, but that urgent matters of health
were dealt with;  (ii) SPS measures were based on scientific evidence;  (iii) to the extent possible, SPSmeasures were based on international standards, gu idelines and recommendations;  (iv) SPS measures of
other countries were accepted as equivalent if these measures achieved the level of protection
appropriate to Vanuatu;  (v) SPS measures were based on an assessment of the risks to human, animal orplant life or health;  (vi) SPS measures take into account the regional characteristics both of the areasfrom which imported products originate and the areas for which they are destined;  (vii) SPS measuresdo not arbitrarily or unjustifiably discriminate between different WTO Members or between domestic
and foreign suppliers; and (viii) that relevant contro l, inspection and approval procedures comply with
the provisions of the SPS Agreement.
88. The representative of Vanuatu stated that  Vanuatu would apply the Agreement on the
Application of Sanitary and Phytosanitary Measures from the date of its accession without any
transitional period.  The Working Part y took note of this commitment.WT/ACC/VUT/13
Page 22
Trade-Related Investment Measures
89. The representative of Vanuatu said that Vanuatu applied no trade-related investment measures
proscribed under the GATT 1994.  Import duty relief for industries was not linked in any way to localcontent requirements.
90. The representative of Vanuatu said that Vanuatu  would not maintain any measures inconsistent
with the TRIMs Agreement and would apply the TRIMs Agreement from the date of accession withoutrecourse to any transitional period.  The Wo rking Party took note of this commitment.
State-Trading Entities
91. The representative of Vanuatu stated that of the enterprises listed in the section on State Owned
Enterprises and Privatization only the Vanuatu Commodities Marketing Board had exclusive rightsrelating to the import or export of goods.  Vanuatu had provided information on State-trading enterprises
in the format applicable to WTO Members, de tailing the operations of the VCMB, in document
WT/ACC/VUT/7, Annex III.  The VCMB  had been established in 1981 to buy, sell and stabilize prices
for copra, cocoa and kava.  The VCMB had sole purch asing rights on copra and cocoa for export.  It had
licensed 25 kava exporters and issued export licen ces for kava against a fee of VT 30,000 (US$208).
92. Until recently, all coffee produced by small-holders had been sold to the Tanna Coffee
Development Company (TCDC), but the TCDC had been  privatized and all its exclusive rights and
privileges revoked.  It was not a state trading en terprise.  Any company could now produce, export or
import coffee to or from Vanuatu.  The representative of Vanuatu confirmed that Vanuatu intended tonotify the Vanuatu Commodity Marketing Board as a state-trading organization under Article XVII of
GATT 1994.
93. The representative of Vanuatu confirmed that it would apply its laws and regulations governing
the trading activities of State-owned enterprises and ot her enterprises with special or exclusive privileges
and would act in full conformity with the provisions  of the WTO Agreement, in particular Article XVII
of the GATT 1994 and the Understanding on that Article and Article VIII of the GATS.  He further
confirmed that Vanuatu would notify any enterprise falling within the scope of Article XVII.  The
Working Party took note of these commitments.
Free Zones, Special Economic Areas
94. The representative of Vanuatu said that the Gove rnment's Council of Ministers had approved the
establishment of free industrial zones on several isla nds, including Santo, Efate, Malekula and Tanna in
September 1993.  UNIDO had completed a feasibility study of the project, but further study would beWT/ACC/VUT/13
Page 23
required to determine whether the project was viable.  Plans to establish a free trade zone on Santo Island
had also been discussed.  However, no free zones had been established to date and Vanuatu had nointention to establish any such zones in the near term.
95. The representative of Vanuatu said that any free zones or special economic areas which it
established would be fully subject to the coverage of  its commitments in its Protocol of Accession to the
WTO Agreement and that Vanuatu would ensure enfo rcement of its WTO obligations in those zones or
areas.   In addition, goods produced in any such zones or areas under tax and tariff provisions that
exempt imports and imported inputs from tariffs and certain taxes would be subject to normal customs
formalities when entering the rest of Vanuatu, incl uding the application of tariffs and taxes.  The
Working Party took note of these commitments.
Government Procurement
96. The representative of Vanuatu said Vanuatu practised open tendering and competitive bidding in
the context of a small island economy.  The Financial Regulations of the Republic of Vanuatu(Chapter 22, Regulations 361, 364, 365 a nd 368) provided the guidelines for government procurement.
A Central Tender Board in the Depa rtment of Finance evaluated tende rs and awarded contracts.  The
Central Tender Board comprised the Director of Finance or his representative, the director of the
department procuring the goods or services, and a representative of the Ministry responsible for thedepartment procuring the goods or services.  All written contracts worth more than VT 3 million(US$21,000) required approval by the Attorney Genera l before the contract was signed.  A minimum of
three written tenders were required for specific wo rks or services exceeding VT 1 million (US$7,000).
Notice of invitation to tender was given at least two weeks before the closing date, normally byadvertisement in the national press.  The Fina ncial Regulations contained no dispute settlement
provisions; aggrieved individuals or compan ies could resort to the judicial system.
97. The guidelines stipulated that for works or se rvices worth VT 50,000 (US$350) to VT 1 million
(US$7,000) at least three written quo tations should be obtained wherever  possible, and the procurement
order should be placed by the Accounting Office (norma lly the director of the department).  A minimum
of two quotations were required for works or serv ices not exceeding VT 50,000, and the procurement
order could be placed by senior department staff.  Th e guidelines also stipulated that goods and services
should be procured through the Government Centra l Store wherever possible.  The central store
purchased stationery and other supplies used by the Government on a purely commercial basis.  The
Central Government Store did not sell to the public, or to non-governmental entities.WT/ACC/VUT/13
Page 24
98. Some members said that adoption of the disciplines of the Agreement on Government
Procurement would benefit Vanuatu and asked whether Vanuatu intended to accede to this Agreement.The representative of Vanuatu said that Vanuatu di d not intend to apply for accession to that Agreement
at this stage.  He confirmed that the financial regulations of Vanuatu did not permit discrimination
against foreign suppliers and that no such discrimina tion will be introduced in the future.  The Working
Party took note of this commitment.
Transit
99. The representative of Vanuatu said that little trade transited through Vanuatu, which therefore
had no need for specific regulations on the matter.  However, transit trade was allowed underinternational customs practices.
100. The representative of Vanuatu confirmed th at his Government would apply any laws,
regulations and practices governing transit operations and would act in full conformity with theprovisions of the WTO Agreement, in particular  Article V of the GATT 1994.  The Working Party took
note of this commitment.
Agricultural Policies
101. The representative of Vanuatu said that agriculture played a dominant rôle in the economy.  The
main cash crop was copra.  Cocoa cultivation and beef production was growing in importance.  The beef
industry was concentrated on Espi ritu Santo, where Vanuatu's major slaughterhouse, constructed to
international standards, was located.
102. Vanuatu provided virtually no monetary grants  to agricultural producers, but agricultural
producers were among the businesses eligible for incentives offered through the Business LicenceCommittee and Customs Department.  These incen tives included exemption from business licence
requirements, special loans at relatively low rate s of interest from commercial banks, and special
exemptions accorded by the customs and tax authorities.
103. Vanuatu also had aid-financed programs of dome stic support for agriculture.  The Department of
Agriculture oversaw the provision of a small s ubsidy of VT50 (about US$0.35) per coconut seedling.
Government policy had also been to ensure that smal l-holders of coffee were provided with free planting
materials and a subsidy on the purchasing price.  In addition, the Vanuatu Commodities Marketing
Board regulated the "beach" (farm-gate) price of copra on an ad hoc basis by using surpluses generatedfrom trading activities and transfers of Lomé Conven tion funds from the commodity price stabilisation
scheme (Stabex) of the European Communities.  In 1996, the Government had used approximately VT10WT/ACC/VUT/13
Page 25
million as a once-off payment to support copra prices.  Since 1984, the VCMB had accumulated losses
approaching US$20 million, but relatively high world ma rket prices for copra and cocoa in recent years
had reduced the need for price support to these s ectors in Vanuatu.  The VCMB was now fully obliged
by statute to fund its own activities without any subsidy.
104. Vanuatu's commitments on agricultural tariffs, on domestic support for agriculture which qualify
for the de minimis level of support of 10 per cent th at is available to deve loping countries, and on
agricultural export subsidies, are in the Schedule of Concessions and Commitments on Goods annexed to
the draft Protocol of Accession to the WTO reproduced in the Appendix to this report.
Trade-Related Intellectual Property Regime
105. In early discussions of this subject in the Workin g party, the representative of Vanuatu said that
Vanuatu had for some time maintained two pieces of  legislation, governing patents and trademarks.
Patent legislation was based on the Registration of  United Kingdom Patents Act [Cap.80], providing that
a patent registered in the United Kingdom was similarly workable in Vanuatu.  The Registration ofUnited Kingdom Trade Marks Act [Cap.81] had the same legal status in Vanuatu.  A trademark
remained protected as long as such registration re mained in force in the United Kingdom.  Vanuatu had
no legislation concerning copyright and related rights , the protection of layout-designs (topographies) of
integrated circuits, geographical indications, industrial designs, and trade secrets and undisclosed
information.  Infringements of intellectual property righ ts had so far been foreign to the legal system of
Vanuatu, although courts had the authority to give orde rs and provide remedies for holders of patents and
trademarks.
106. Vanuatu would also have to examine the extent  to which amendments were also required in
related legislation, such as the Criminal Procedure Code and the Penal Code (t o ensure conformity with
Article 61 of the TRIPS Agreement) and the Customs Act (to ensure that customs officers had adequate
legal authority to facilitate the protection of inte llectual property rights holders from counterfeits and
trade mark piracy).  Concerning enforcement, offi cers would need to be trained in several government
departments.  Most important was the training and recruitment of an officer in the Vanuatu Financial
Services Commission to be in charge of the da y-to-day implementation of patents and trademarks
administration.  Other offices requiri ng training included the Department  of Customs, the Department of
Trade and the Police and Attorney-General’s chambers.  At present these key divisions lacked expertise
about the obligations created under the TRIPS Agreement.  Vanuatu recognized that membership of theParis, Berne, Geneva, Brussels, UPOV and WIPO Conventions would facilitate compliance with the
TRIPS Agreement and would accede to these treaties within two years of the date of accession.WT/ACC/VUT/13
Page 26
107. In later discussions, the representative of Vanuatu reported on the major effort that his
Government had already made to ensure passage of  WTO-compatible legislation setting basic standards
for the protection of intellectual property giving effect  to the TRIPS Agreement.  Draft legislation would
be transmitted to members of the Working Party for comment, and would be passed by Parliament by the
time Vanuatu acceded to WTO.  Vanuatu had already transmitted laws or draft laws on copyright,
patents, trademarks, designs, trade secrets and geog raphical indications.  Members of the Working Party
had been invited to forward any comments on these laws and draft laws to the Government of Vanuatu
so that these could be taken into account before they were presented to Parliament for final approval.  He
added that Parliament had passed new laws on copyrigh t and related rights, layout designs of integrated
circuits, geographical indications (wine), and trade secrets in 2000.  Bills on trademarks, patents and
industrial designs - which completed the legislative programme on TRIPS - were scheduled forconsideration by Parliament in November 2001.
108. The representative of Vanuatu thanked the governments concerned for the technical assistance
that they had provided and for their recognition th at more would be required.  For the reasons given
above, the Government of Vanuatu requested that th e Working Party grant a two-year transitional period
from the date of its accession to obtain technical as sistance and equip the administration to implement
fully the obligations of the TRIPS Agreement.  He confirmed that, if such a transitional period were
granted, Articles 3, 4 and 5 of the Agreement, prov iding for, inter alia, national treatment and MFN
treatment under current legislation in place would a pply, and Vanuatu would ensure that any changes
made in its laws, regulations and practice in this pe riod would not result in a lesser degree of consistency
with the provisions of the TRIPS Agreement that existed on the date of accession.   In addition, Vanuatu
would not grant patents, trademarks, or copyri ghts, or marketing approvals for pharmaceutical or
agricultural chemicals inconsistent with the provisions of the TRIPS Agreement.
109. The representative of Vanuatu also stated that, should a transition be granted, existing rates of
infringement would not in his view significantly incr ease over the two year transition period and that any
infringement of intellectual property rights would be addressed immediately in cooperation and with
assistance from affected right holders.  Vanuatu would protect against unfair commercial use of
undisclosed test or other data submitted in suppor t of applications for marketing approval of
pharmaceutical or of agricultural chemical products which utilize new chemical entities, by providing
that no person other than the person that submitted such data may, without the permission of the latter
person, rely on such data in support of an application for product approval for a period of at least five
years from the date on which Vanuatu granted marketin g approval to the person that produced the data.
Prior to issuance of marketing approval of any pha rmaceutical and agricultural chemicals products, the
relevant Ministries in Vanuatu would determine the existence of a patent covering a product for which anWT/ACC/VUT/13
Page 27
application for marketing approval had been filed by a party other than the patentee, and must not
approve such application for marketing approval un til the date of the expiration of such patent.  He
added that Vanuatu would seek out all available tec hnical assistance to ensure that its capacity to fully
enforce its TRIPS-consistent legal regime upon expirati on of the transition period is assured.  In response
to requests from delegations for more specificity, the representative of Vanuatu presented an Action Plan
setting out details of the steps that still remained to  be taken in order to achieve this objective and a
timetable for each step (Table 4).
Table 4:  TRIPS Action Plan
Action Deadline
Parliamentary consideration of TRIPS-consistent
legislation on copyright and related rights, patents,
trademarks, industrial designs, geographical indications,layout designs of integrated circuits, and protection of
undisclosed information (trade secrets)Between November 2000 and
November 2001
Passage of and gazetting of legislation Prior to date of accession
Establishment of implementing regulations.
Establishment of any necessary additional legislation and
regulations to provide a legal basis for enforcement
mechanisms.No later than one year from accession.
Establishment of Intellectual Property (IP) Office,
recruitment of personnel, obtaining facilities and
equipment.No later than one and a half years from
accession.
Development of manuals and operating procedures. No later than one and a half years from
accession.
Training of at least 15 officials, customs officers andprivate sector people as well as educators in TRIPS issues.No later than two years from
accession.
Readiness to participate in regional and international IPadministrative cooperation (Forum Island countries, PCT,Madrid Protocol, etc.).No later than two years from
accession.
Membership in the Paris, Berne, Geneva, Brussels, UPOVand WIPO ConventionsNo later than two years from accession
110. The representative of Vanuatu stated that legi slation on copyright and related rights, patents,
trademarks, industrial designs, geographical indicati ons, layout designs of integrated circuits, and
protection of undisclosed information (trade secrets)  conforming to the requirements of the Agreement
on Trade-Related Intellectual Property Rights would be enacted by the date of Vanuatu’s accession to
the WTO.  Vanuatu would apply the Agreement on Trade-Related Intellectual Property Rights no laterthan two years after the date of its accession acco rding to the action plan in Table 4, with theWT/ACC/VUT/13
Page 28
understanding that during this period protection for intellectual property rights listed in paragraphs 108
and 109 would be applied in Vanuatu.  The Working Party took note of this commitment.
Policies Affecting Trade in Services
111. The representative of Vanuatu said that tourism had accounted for 44 per cent of Vanuatu’s
receipts from services in 1998, followed by transportati on (20 per cent), financial services (6 per cent),
government services (6 per cent), miscellaneous business services (4 per cent) and communications (3per cent).
112. The Finance Centre of Vanuatu, protected by strict professional secrecy and the absence of
foreign exchange control and direct taxation, co ntributed significantly to national income and
government revenue.  The Government was committed to making Vanuatu the foremost investment
centre in the Pacific.  Offshore banks were supervis ed and regulated by the Vanuatu Financial Services
Commission.  Banks carrying on business in Vanuatu were supervised and regulated by the CentralReserve Bank. The legislative framework had recently been improved by the passage of the FinancialInstitutions Act of 1999, which had been sent to the WTO Secretariat for the information of delegations.
To obtain a permit to operate, banks had to meet re quirements designed to ensure that banks would act
prudently. These requirements were based on the work of the Basle Committee set up by the G7 tocodify best practice for the conduct of banking bus iness, including core principles for banking
supervision. The new legislation had, for example,  eliminated the differ ence between the capital
requirements for locally-owned and foreign-owned banks, and paid up capital and unimpaired reserves
of VT 200 million were now necessary for all banks and branches of banks.  For the commitments to be
undertaken by Vanuatu in the banking sector, see th e Schedule of Specific Commitments annexed to the
Draft Protocol of Accession at the end of this report.
113. Exclusive suppliers or monopolies existed in telecommunications, electricity supply, water
supply and internal air transport.  Telecom Vanuatu Limited was the sole supplier of communicationservices.  The Government held one third of the shares of the company, the remainder was owned by
foreign investors.  Electricity and water servi ces were provided by Un ion Electrique du Vanuatu
Limited.  Vanair Limited was the sole supplier of domestic air services, while international flights wereshared between Air Vanuatu Limited, Solomo n Airlines, Air Paci fic and Air Caledonie.
114. With these exceptions, commercial presence of foreign services suppliers on the territory of
Vanuatu was largely unrestricted, and there were no pr ohibitions regarding the establishment of foreign
service suppliers.  Vanuatu maintained no numerical quotas or economic needs tests relating to theWT/ACC/VUT/13
Page 29
supply of services.  Vanuatu maintained no prohib itions or limitations on consumption of services
abroad by its nationals.  Travelling abroad wa s subject to an airport departure tax of US$17.
115. Regarding the presence of foreign natural persons, the Labour Commissioner issued work
permits provided a post could not be filled by skille d local labour, in which case job training should be
provided.  Companies were required to advertise all vacant positions in the local press, and if no suitably
qualified local candidate responded, a non-Vanuatu citizen could be hired.  Vanuatu has recently revisedits system for approving or refusing work permits to ensure transparency and full right of judicial review.
Any foreign natural person could obtain a one-year residence permit against a minimum investment inVanuatu of about US$35,000 (VT 5 million).
116. The residence permit requirements did not apply for obtaining a licence to practice a profession.
A list of Acts constituting the regulatory regime  for business services was provided in document
WT/ACC/VUT/4 (pp. 44-45).  Approval  by professional associations was required for certain types of
services, notably for legal services (the Legal Prac titioners Board), medical and dental services (the
Medical Practitioners Board), engineering and archit ecture (the Survey Board), and accounting.  Cross-
border supply of legal services was allowed, but only  through an existing firm in Vanuatu.  Resident
foreign lawyers, graduated from an institution recognized by the Law Council and having undergonetwo-year post-graduate training in Vanuatu, coul d provide exactly the same services as domestic
lawyers.  There were no limitations on the access of foreign service providers in educational services.
117. Vanuatu's Schedule of Specific Commitments on Se rvices is annexed to its draft Protocol of
Accession reproduced in the Appendix to this Repor t.  This Schedule of Specific Commitments on
Services contains the legally binding market access commitments of Vanuatu in respect of services.
Publication
118. The representative of Vanuatu provided inform ation to the Working Party on the publication of
laws and regulations.  All laws are published in the Official Gazette and do not come into force before
such publication.
119. The representative of Vanuatu stated that, at the latest from the date of accession, all laws and
other normative acts related to trade would be publis hed in the Official Gazette promptly and no law,
rule, etc. related to international trade would beco me effective prior to such publication.  He further
stated that Vanuatu would fully implement Artic le X of the GATT 1994 and the other transparency
requirements in WTO Agreements requiring notifica tion and publication.  The Working Party took note
of these commitments.WT/ACC/VUT/13
Page 30
Notification
120. The representative of Vanuatu said that at the latest upon entry into force of the Protocol of
Accession, Vanuatu would submit all initial notifications required by any Agreement constituting part ofthe WTO Agreement.  Any regulations subsequently enacted by Vanuatu which gave effect to the lawsenacted to implement any Agreement constituting pa rt of the WTO Agreement would also conform to
the requirements of that Agreement.  The Working Party took note of these commitments.
Trade Agreements
121. The representative of Vanuatu said that Va nuatu’s exports benefitted from the SPARTECA
Agreement with Australia and New Zealand and the ACP-EU Partnership Agreement (the Cotonou
Agreement).  The Melanesian Spearhead Group (MSG ) Trade Agreement provided for certain goods to
be traded free of duty between Vanuatu, Solomon Is lands and Papua New Guinea.  In September 1994,
the MSG States had agreed that only three products  from each member would be covered in the initial
phase of the agreement (beef and beef products, te a and canned tuna).  MSG Heads of Government had
agreed in June 1999 to a timetable of implementati on of free trade in goods.  PNG and Fiji would move
to a negative list by 2003, at which time trade in substa ntially all goods would be free of duty.  The two
least developed countries in the MSG - Vanuatu  and Solomon Islands - would implement these
obligations by 2005.  Imports from MSG countries were subject to all domestic taxes.  The Government
of Fiji was notifying the MSG Trade Agreement to the Committee on Trade and Development on behalfof the Melanesian Spearhead Group.  Vanuatu said that the Agreement was in conformity with the
relevant provisions of WTO.
122. A bilateral trade agreement with Fiji had been set up by the Prime Ministers of the two countries
in July 1999.  The objective of the Agreement is to improve the trade relations  between the two countries
by facilitating the flow of goods. The Agreement was, in his view, consistent with Article XXIV of theGATT 1994.  As a full Member of WTO, Fiji would notif y the text of the Agreement to WTO.  Vanuatu
had signed agreements on technical cooperation wi th Fiji and Papua New Guinea, a technical aid
cooperation agreement with New Caledonia, and an  agreement on economic and technical cooperation
with China in 1992.  Vanuatu had concluded air se rvices agreements with Fiji and Australia.
123. The representative of Vanuatu stated that his Go vernment would observe the provisions of the
WTO including Article XXIV of the GATT 1994 and Artic le V of the GATS in its trade agreements, and
would ensure that the provisions of these WTO Agreements for notification, consultation and other
requirements concerning free trade areas and custom s unions of which Vanuatu was a member were met
from the date of accession.  The Working Party took note of these commitments.WT/ACC/VUT/13
Page 31
CONCLUSIONS
124. The Working Party took note of the explanati ons and statements of Vanuatu concerning its
foreign trade regime, as reflected in this report.  The Working Party took note of the commitments given
by Vanuatu in relation to certain specific matters which are reproduced in paragraphs 21, 24, 27, 33, 34,40, 47, 49, 52, 56, 61, 63, 66, 68, 70, 73, 76, 88, 90, 93, 95, 98, 100, 110, 119, 120 and 123 of this report.The Working Party took note that these commitments had been incorporated in paragraph 2 of theProtocol of Accession of Vanuatu to the WTO.
125. Having carried out the examination of the foreign trade régime of Vanuatu and in the light of the
explanations, commitments and concessions made by  the representative of Vanuatu, the Working Party
reached the conclusion that Vanuatu be invited to accede to the Marrakesh Agreement Establishing the
WTO under the provisions of Article XII.  For this  purpose, the Working Party has prepared the draft
Decision and Protocol of Accession reproduced in the Appendix to this report, and takes note of
Vanuatu's Schedule of Concessions and Commit ments on Goods (document WT/ACC/VUT/[13]/Add.1)
and its Schedule of Specific Commitments on Serv ices (document WT/ACC/VUT/[13]/Add.2) that are
annexed to the Protocol.  It is proposed that these texts be adopted by the General Council when it adoptsthe report.  When the Decision is adopted, the Pr otocol of Accession would be open for acceptance by
Vanuatu which would become a Member thirty days  after it accepts the said Protocol.  The Working
Party agreed, therefore, that it had completed its work concerning the negotiations for the accession of
Vanuatu to the Marrakesh Agreement Establishing the WTO.WT/ACC/VUT/13
Page 32
ANNEX 1
Laws, Regulations and Other Information Provided to the Working Party by Vanuatu
- Comprehensive Economic Reform Programme (draft);
- Summary of Legislative Reforms Necessary as a Result of Accession to the WTO;
- Public Finance and Economic Manageme nt (Amendment) Act No. 10 of 1999;
- Public Finance and Economic Manageme nt (Amendment) Act No. 12 of 2000;
- Foreign Investment Act No. 15 of 1998;
- Foreign Investment (Ame ndment) Act No. 1 of 1999;
- Foreign Investment (Ame ndment) Act No. 6 of 2001;
- Business Licence (Localization of Businesses) Order No. 79 of 1983;
- Amendment to Business Licence (Localization of Businesses) Order No. 79, of 1993;
- The Business Licence Act (Chapter 173), Schedule 1 - Rates of Business Fees;- Bill for the Business Licence Act No. 19 of 1998;
- Business Licence Act No. 19 of 1998;
- Bill for the Business Licence (Amendment) Act No. 90/1999 and explanatory note;
- Business Licence (Amendment) Act No. 6 of 2000 and explanatory note;
- Bill for the Customs Act No. - of 1999;- Customs Act No. 15 of 1999;
- Decentralization and Local Government Regions Act No. 1 of 1994;
- Customs Import and Export Duty Tariff 1995/1996;
- The Duty Exemption Policy and application form for exemption of customs duty;
- The Duty Exemption Policy – Manufacture & Process Sector as per the Vanuatu Customs
Tariff, Schedule III, Section 1, X.1 of 1998;
- Duty concessions guidelines (Schedule III Application Form);
- The Dues, Fees and Charges Order No. 14 of 2 October 1982;
- Bill for the Value Added Tax Act No.l2 of 1998 and Explanatory Note;
- Value Added Tax Act No. 12 of 1998 (consolidated to 29 January 2001);- Import of Goods (Miscellaneous Control) (Repeal) Order No. 13 of 1999;
- The Import of Motor Vehicles (Control) Act No. 30 of 1992;
- Import Duties (Consolidation) (Customs Valuation Amendment) Act No. 8 of 1999;
- Import Duties (Consolidation) (Customs Valuation Amendment) Act No. 9 of 1999;
- Bill for Import Duties (Consolidation) (Customs Valuation Amendment) of 1999 and
Explanatory Note;
- Explanation of the Prohibited Plants List prep ared by the Department of Agriculture and
Horticulture, Plant Protection and Quarantine Division;
- Independent assessment of Vanuatu Quarantine & Inspection Services (31 August 1999);
- Animal Importation & Quarantine Act (Cap.201), Revised Edition 1988 and Regulations
under the Act;
- Schedules setting out quarantine requirements for the importation of selected products into
Vanuatu: No.45, goats from Australia; No. 46, caprine embryos from the Republic of South
Africa: and No. 47, bovine embryos from USA;
- Conditions for vessels carrying live animals;
- Decision Pathway for Pest Risk Assessment for Pacific Island Countries;
- Plant Protection Act No. 14 of 1997 and Manual for its implementation dated 30 September
1997;
- Vanuatu Quarantine & Inspection Services - import documentation;
- The Vanuatu Government Financial Regulations regarding Purchase of Goods and Services,
Chapter 22;
- Bill for the Copyright Act No. - of 1999 (draft as at 28 August 1999);- Bill for the Copyright Act of 1999 and Explanatory Note;
- Copyright and Related Rights Act No. 42 of 2000;WT/ACC/VUT/13
Page 33
- Bill for the Trademarks Act of 1999 and Explanatory Note;
- Draft Bill for the Trademarks Act of 2001 and explanatory note;
- Bill for the Geographical Indications (Wine) Act No. __ of 2000 (and Explanatory Note);
- Geographical Indications (Wine) Act No. 53 of 2000;
- Bill for the Patents Act of 1999 and Explanatory Note;- Bill for the Patents Act of 2001 and explanatory note;
- Bill for the Designs Act of 2000 and Explanatory Note;
- Draft Bill for the Designs Act of 2001 and explanatory note;
- Bill for the Circuit Layouts Act No. 51 of 2000 and explanatory note;
- Bill for the Trade Secrets Act No. __ of 1999 (and Explanatory Note);
- Bill for the Trade Secrets Act No. 52 of 2000 and explanatory note;
- Description of the structure and competence of the Land Surveyors Board;- Financial Institutions Act of 1999;
- Reserve Bank of Vanuatu Policy Guidelines 1 to 4;.
- Trade Agreement Among the Melanesian Spearhead Group Countries of 23 June 1993;
- Extracts of the Laws of the Republic of Vanuatu concerning Customs, Road Traffic (Control),
Export Duties, Obscenity, Agricultural Fees , Import Duties (Consolidation), Hotels and
Licensed Premises Tax, Gaming (Control), Business Licence, Import of Goods (Control),
Video Cassettes (Tax on Hiring), Cheque Tax, Rent Taxation, Amusement Machines Tax,
Banking, Immigration, Stamp Duties, Trust Companies, Airport Departure Tax (International
Flights), Electricity Supply, Registration of United Kingdom Trade Marks, Registration of
United Kingdom Patents, Insurance, Price Control, Partnership, Passports, Citizenship(Entitled Persons), Citizenship, Coastal Trading (Control), Central Bank of Vanuatu,
International Financial Institutions, Diplomatic Privileges & Immunities,
Telecommunications, Post Office, Labour (Work Permits), and Companies;
- Trade Data 1994-96 (diskette);
- Statistics Office:  Vanuatu National Agriculture Census 1994 - Main Report;- Statistics Office:  Copra and Cocoa, Annual Report 1994;
- Statistics Office:  Statistical Indicators, October-December 1995;  and
- Statistics Office:  Detailed Commodity Tables of Overseas Trade of Vanuatu, Annual
Report 1993.WT/ACC/VUT/13
Page 34
ANNEX 2
Reserved Investments
1. Tourism
(a) Local tour agent if the annual turnover is less than VT 20million
(b) Local tour operator if the investment is less than VT 50 million(c) Commercial cultural feasts (Melanesian, Polynesian etc.)
(d) Guest houses if the number of beds is less than 50 or less than 10 rooms or annual turnover is
less than VT 20 million
(e) Bungalows if the annual turnover is less than VT 30 million
(f) Hotels and motels if the total value of the investment is less than VT 10 million or the annual
turnover is less than VT 20 million
2. Trade
(a) Export of sandalwood in stick and chips form
(b) Local trading of sandalwood
(c) Export of seeds and other minor forest products
(d) Second hand clothing shops
(e) Export of kava in root, chips and stick form
3. Manufacturing
(a) Manufacture of handicraft and artefacts
4. Services
(a) Kava bars
(b) Open air vendors(c) Mobile shops
(d) Door to door sales
(e) Road transport operators - public taxi and bus services
(f) Private security services including security guards
(g) Category F of Business Licensing Act No. 19 of  1998 of less than VT 5 million turnover per
year
(h) Retail shops including general merchandise trad ing shops where the annual turnover is less than
VT 30 million, excluding specialty shops
(i) Coastal shipping of less than 80 tonnes,  excluding vessels used for tourism purposes
(j) Electricians and electro-technici ans meeting prescribed standards
(k) Residential building and construction meeting prescribed standards
5. Fishing
(a) Fishing within archipelagic waters within the meaning of the Maritime Zones Act [CAP 138]
and the first 6 nautical miles of the territo rial sea within the meaning of that ActWT/ACC/VUT/13
Page 35
Table 1:  Legislation Introduced as a Result of Accession to the WTO
WTO Agreement or other
subject-matterLaws and other legal
provisions addressing and
covering the subject matterStatus of indicated
legislationComment
General Trade Law Subsequent legislation to
be revised where found tobe incompatible with
WTO provisions
National treatment Import Duties
(Consolidation) Act[Cap.91]Amended Point system based on
nationality abolished.
Relationship central vs.sub-central governmentProvincial Government Act
1994Provinces are not
permitted to raise importduties or import taxes.
Trading Rights Business Licence Act 1998 To be amended by 1 June
2002 to ensure nationaltreatment
Import duties Amended in 1998 Substantial across-the
board reductions in tariffs
Other duties and charges Import Duties
(Consolidation) Act
[Cap.91]Amended in 1998 Service tax abolished
(rolled into new tariff
rates)
Import of Goods Control
Act No. 176 [Cap.176]Amended in 1998 3-4% commission issued
by the VanuatuCooperative Federation eabolished and rolled intothe tariff rate.
Duty exemptions Vanuatu Customs Tariff,
Schedule III, section 1
(Economic Reliefs)Amended in 1998 Policy made more
transparent and the scope
for discretion reduced
Internal taxation Value Added Tax Act No.
12 of 1998 and ExplanatoryNoteEffective 1 August
1998Rate of 12.5% applied to
goods and most services
Agreement on ImportLicensing ProceduresImport of Goods Control
Act No. 176 [Cap.176]Bans (potatoes, T-shirts)
and import Orderseliminated
Agreement onImplementation of ArticleVII of the GATT 1994
(customs valuation)Import Duties
(Consolidation)(CustomsValuation Amendment) Act
of 1999Effective 1 January
2001Ensures full compliance
with the WTO Agreement
Agreement on TechnicalBarriers to Trade(establishment of TBTenquiry point)Decision of the Ministry of
Trade, Commerce andIndustryEffective 19 September
2001The Director of the
Department of Trade,Industry and Investmentappointed as TBT enquirypointWT/ACC/VUT/13
Page 36
WTO Agreement or other
subject-matterLaws and other legal
provisions addressing andcovering the subject matterStatus of indicated
legislationComment
Agreement on the
Application of Sanitaryand PhytosanitaryMeasuresAnimal Importation and
Quarantine Act of 1988;Order No. 14 of 1994;Plant Protection Act No. 14
of 1997;
Imports Specification(Plants) Manual;Food Control Act No. 21 of1993
Participation in
international fora:
OIE
FAO Codex AlimentariusCommission
IPPC
Pacific Plant Protection
Organization (PPPO)Member since 1983
Member since 1995
Application lodged in
1999The Director of the
Vanuatu Quarantine andInspection Services is theSPS enquiry point
(decision of 26 February
2001)
TRIPS Agreement Copyright and Related
Rights Act No. 42 of 2000;Circuit Layouts Act No. 51of 2000;
Trade Secrets Act No. 52
of 2000;Geographical Indications(Wine) Act No. 53 of 2000;
Bill for the Trademarks Act
of 2001;Bill for the Patents Act of2001Bill for the Designs Act of
2001Assent given on
29 December 2000
Scheduled for
Parliamentary debate inNovember 2001See Table 4
Trade Agreements
(Article XXIV of theGATT 1994)MSG Agreement To be brought into longer
term conformity withWTO.WT/ACC/VUT/13
Page 37
Table 2:  General Tariff for Handling Charges
Off Loading or Loading Main Wharf and Stor age of Goods in Shed and/or Open Area.
Description of Merchandise Basis of Charge Tariff (VT)
GENERAL TARIFF UP TO 2 TONS PER UNIT WEIGHT
EXPORTATION.
General cargo except following merchandises CUBIC/T 1,401
Copra ex quay CUBIC/T 997
Copra under hooke CUBIC/T 817
Coffee, cocoa, shells taros CUBIC/T 946
Tinned food CUBIC/T 946
Refrigerated or frozen meats CUBIC/T 1,290
Refrigerated or frozen goods CUBIC/T 1,290
Logs ex quay CUBIC/T 779
Logs under hook water side CUBIC/T 591
Sawn timber in bundles CUBIC/T 1,008
IMPORTATION
General cargo except the following merchandise CUBIC/T 1,401
Frozen or refrigerated merchandise CUBIC/T 1,558
Ammunition or explosives CUBIC/T 3,538
Glass and marble in plates or slabs CUBIC/T 2,379
Empty drums or barrels (11 gls) CUBIC/T 95
Horses and cattle UNIT 1,922
Pigs and sheep UNIT 481
Cement in bag loose TON 1,493
Palletized cement or plaster bags (minimum 5OT) CUBIC/T 1,139
Mail Bag UNIT 47
Homogenous lot of palletized goods over 50T CUBIT/T 1,263
Unpackaged or containerised motocars UNIT 7,009
Pick-up truck, bus up to 2000 kgs CUBIC 7,710
Minimum charge per bill of lading UNIT 315
Unpacked truck, bus up to 2.000 kgs CUBIC 701 + surcharge
heavy lift
Trailer, caravans towable machines on wheels CUBIC 701 + surcharge
heavy lift
Boat, launch (unpackaged) CUBIC 839 + surcharge
heavy lift
Boat, launch (with slings) CUBIC 757 + surcharge
heavy lift
Heavy equipment CUBIC 839 + surcharge
heavy lift
Heavy equipment (with slings) CUBIC 757 + surcharge
heavy lift
Special case:  for off loading or loading on barge of heavy automotive equipment 15 per cent
reduction (over 10 T or 20 m3)WT/ACC/VUT/13
Page 38
Description of Merchandise Basis of Charge Tariff (VT)
Full Containers FCL
Named FCL or FCL/FCL - LCL/FCL,  pier to house, quay to door, signifies for the purposes o f
application of the present tariff, that the unopened c ontainer is off-loaded and stowed in the port area,
from where it must be taken in charge by the consignee.  If this container has to be unpacked, it wil l
be subject to the following charge in addition to the full container tariff:
- Vt. 2,884 per 9C/m
- Vt. 6,389 per 20'/.
ISO NORM
a) 8' container Unit Vt. 7,703
b) 20' container Unit Vt. 26,279
c) 20' full container of animal feed (cattle cake makefrom flour) (bulk or bags)Unit Vt. 21,024
d) 20' full loaded of rice-bag or sugar-bag Unit Vt. 25,227
e) 20' full loaded of flour bag Unit Vt. 22,425
Other full Containers
General cargo tariff with 50 per cent rebate, calculated on the outside volume of the container.
Empty Containers (See general instructions)
4 c/m or netted side Unit Vt. 1,243
8' or netted sides Unit Vt. 2,489
10' Unit Vt. 3,731
20' Unit Vt. 6,221
30' Unit Vt. 8,710
Empty Cattle Boxes or Bare stalls
. c/m Vt.  227
Heavy Lifts
Any package of a unit weight of 2T or over w ill be charged at the rate applicable to their
category, and a surtax added as under, applicable on tonnage unit gross weight:
* From 2 to 3 tons Vt. 230
* From 3 to 5 tons Vt. 703
* From 5 to 8 tons Vt. 977
* From 8 to 20 tons Vt. 1,251
* Above 20 tons, price to be discussed with the client.  However, palletised goods of 2 tons
and 2,5 tons, unit weight, will not be subject to this surtax.
Returning Empty Pallets (Australia) Vt. 64
Stevedoring Pallets Vt. 154
Special Cases:
1. Refrigerated or frozen goods, will be held at the customers disposal within 2 hours after
 their unloading.2. Cement the stevedore may either require the customers of the cement to remove
it immediately, or have it removed on the customers behalf at his cost.
3. By agreement with the Customs Department , the Director of th e Port, may authorize
the immediate removal of particular lots of merchandise.WT/ACC/VUT/13
Page 39
APPENDIX
Draft Decision
ACCESSION OF VANUATU
Decision of [date of decision]
The General Council,
Having regard to  paragraph 2 of Article XII and paragraph 1 of Article IX of the Marrakesh
Agreement Establishing the World Trade Organization (the "WTO Agreement"), and the Decision-
Making Procedures under Articles IX and XII of the WTO Agreement agreed by the General Council
(WT/L/93);
Conducting the functions of the Ministerial Conference in the interval between meetings
pursuant to paragraph 2 of Article IV of the WTO Agreement;
Noting  the results of the negotiations directed toward the establishment of the terms of
accession of Vanuatu to the WTO Agreement and having prepared a Protocol for the Accession of
Vanuatu (WT/ACC/VUT/[…]).
Decides  as follows:
1. Vanuatu may accede to the WTO Agreement on the terms and conditions set out in the
Protocol annexed to this decision.
__________WT/ACC/VUT/13
Page 40
DRAFT PROTOCOL OF ACCESSION OF VANUATU
TO THE MARRAKESH AGREEMENT ESTABLISHING
THE WORLD TRADE ORGANIZATION
The World Trade Organization (hereinafter referred to as the "WTO"), pursuant to the approval
of the General Council of the WTO accorded under Article XII of the Marrakesh Agreement
Establishing the World Trade Organization (hereinaft er referred to as "WTO Agreement"), and the
Republic of Vanuatu (hereinafter referred to as "Vanuatu"),
Taking note of the Report of the Working Party on the Accession of Vanuatu to the WTO in
document WT/ACC/VUT/[13] (hereinafter refe rred to as the "Working Party Report"),
     Having regard to the results of the negotiations on the accession of Vanuatu to the WTO,
Agree as follows:
Part I - General
1. Upon entry into force of this Protocol, Vanuatu accedes to the WTO Agreement pursuant to
Article XII of that Agreement and thereby becomes a Member of the WTO.
2. The WTO Agreement to which Vanuatu accedes shall be the WTO Agreement as rectified,
amended or otherwise modified by such legal instrume nts as may have entered into force before the date
of entry into force of this Protocol.  This Protoc ol, which shall include the commitments referred to in
paragraph [124] of the Working Party Report, sha ll be an integral part of the WTO Agreement.
3. Except as otherwise provided for in the para graphs referred to in paragraph [124] of the
Working Party Report, those obligations in the Mu ltilateral Trade Agreements annexed to the WTO
Agreement that are to be implemented over a period of time starting with the entry into force of that
Agreement shall be implemented by Vanuatu as if it had accepted that Agreement on the date of its entry
into force.
4. Vanuatu may maintain a measure inconsistent with paragraph 1 of Article II of the GATS
provided that such a measure is recorded in the list of  Article II Exemptions annexed to this Protocol and
meets the conditions of the Annex to  the GATS on Article II Exemptions.
Part II - Schedules
5. The Schedules annexed to this Protocol sh all become the schedule of Concessions and
Commitments annexed to the General Agreement on Tariffs and Trade 1994 (hereinafter referred to as
the "GATT 1994") and the Schedule of Specific Comm itments annexed to the General Agreement on
Trade in Services (hereinafter referred to as "GAT S") relating to Vanuatu.  The staging of concessions
and commitments listed in the Schedules shall be impl emented as specified in the relevant parts of the
respective Schedules.
6. For the purpose of the reference in paragraph 6(a) of Article II of the GATT 1994 to the date of
that Agreement, the applicable date in respect of the Schedules of Concessions and Commitments
annexed to this Protocol shall be the date of entry into force of this Protocol.
Part III - Final Provisions
7. This Protocol shall be open for acceptance, by  signature or otherwise, by Vanuatu until [ date to
be provided by Vanuatu ].WT/ACC/VUT/13
Page 41
8. This Protocol shall enter into force on the thirtieth day following the day of its acceptance.
9. This Protocol shall be deposited with the Dire ctor-General of the WTO.  The Director-General
of the WTO shall promptly furnish a certified copy of this Protocol and a notification of acceptance
thereto pursuant to paragraph 7 to each member of the WTO and Vanuatu.
10. This Protocol shall be registered in accordance with the provisions of Article 102 of the Charter
of the United Nations.
11. Done at Geneva this ... day of  .... two thousand and ....., in a single copy in the English,
French and Spanish languages each text being authentic, except that a Schedule annexed hereto may
specify that it is authentic in only one or more of these languages.WT/ACC/VUT/13
Page 42
ANNEX
SCHEDULE - REPUBLIC OF VANUATU
Part I - Goods
[document WT/ACC/VUT/13/Add.1]
Part II – Services
[document WT/ACC/VUT/13/Add.2]
__________