RESTRICTEDWORLD TRADE
ORGANIZATIONWT/ACC/SYC/8
20 February 1998
(98-0628)
Working Party on the
Accession of SeychellesOriginal:  English
ACCESSION OF THE REPUBLIC OF SEYCHELLES
Additional Questions and Replies to the Memorandum
on the Foreign Trade Regime
The Ministry of Finance and Communications of the Government of the Republic of
Seychelles has submitted replies to additional questions raised after the meeting of the Working Party
held on 20 February 1997, with the request that they be circulated to the members of the WorkingParty.  The questions and replies are reproduced hereunder.
_______________WT/ACC/SYC/8
Page i
TABLE OF CONTENTS
Question
No.Page
No.
II. ECONOMY, ECONOMIC POLICIES AND FOREIGN TRADE
2. Economic Policies
(a) Main directions of ongoing economic policies(i) New economic policies 1 1(ii) Pricing policy 2-5 1
(iv) Regional development plans 6 4
(b) Monetary and fiscal policies
(i) Monetary policy 7 4
(ii) Fiscal policy 8 5
(c) Foreign exchange payment and control regime
(i) Acquiring foreign currency 9-10 6
(ii) Foreign exchange transactions 11 7
(iii) Administration of control 12-14 8(iv) Imports and import payments 15-18 9(vi) Exports and export proceeds 19 11
(vii) Proceeds from invisibles 20 11
(viii) Capital 21 11(x) Relations with the International Monetary Fund 22 11
(d) Foreign and domestic investment policies 23 12
Investment Development Advisory Services (IDEAS) 24 12Seychelles International Business Authority (SIBA) 25 13Seychelles Industrial Development Corporation (SIDEC) 26 13
(e) Competition policies and State-trading 27 14
III. FRAMEWORK FOR MAKING AND ENFORCING POLICIES
AFFECTING FOREIGN TRADE IN GOODS AND TRADE INSERVICES
(a) Trade policy 28 14
(b) Trades tax on imports and rules governing imports 29 14
(ii) Customs valuation 30 14(iii) Special tariff exemption for development purposes 31 15
(iv) Anti-dumping, countervailing and safeguard measures 32 15
(v) Non-tariff measures 33-35 16WT/ACC/SYC/8
Page ii
Question
No.Page
No.
(c) Rules governing export 36 17
IV. POLICIES AFFECTING FOREIGN TRADE IN GOODS
3. Internal Policies Affecting Foreign Trade in Goods(a) Industrial policy
General description 37 18
(b) Technical regulations and standards 38 19(c) Sanitary and phytosanitary measures 39-40 19(d) Trade-related investment measures 41 20
(e) State-trading practices 42-46 20
(f-g) Free zones and free economic zones 47 22
4. Policies Affecting Foreign Trade in Agricultural Products 48 22
V. TRADE-RELATED INTELLECTUAL PROPERTY REGIME 49 23
VI. TRADE-RELATED SERVICES REGIME 50-52 23
VII. INSTITUTIONAL BASE FOR TRADE AND ECONOMIC
RELATIONS WITH THIRD COUNTRIES
1. Bilateral or Plurilateral Agreements Relating to Foreign Trade in
Goods and Services53 24
2. Economic Integration, Custom s Union and Free Trade Area
Agreements54-56 25
Annex 3 - Information on Import Licensi ng Procedures (W T/ACC/SYC/3) 57 26
ANNEXES
Annex 1 - Information on Implementation and Administration of the
Customs Valuation Agreement-2 8
Annex 2 - Questionnaire on Technical Barriers to Trade - 31
Annex 3- Questionnaire on State-Trading - 33WT/ACC/SYC/8
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II. ECONOMY, ECONOMIC POLICIES AND FOREIGN TRADE
2. Economic Policies
(a) Main directions of ongoing economic policies
(i) New economic policies
Question 1
Seychelles indicates in its Memorandum (WT/ACC/SYC/3) that it intends to pursue a
comprehensive privatization programme in various sectors, with agriculture at the forefront.
- Please provide further details about Seyc helles' privatization plan, including a
timeframe for implementation.  Could Seychelles specify whether or not this includesthe eventual privatization of the Seychelles Marketing Board (SMB)?
- Would Seychelles please explain in more detail how SMB functions?
Answer:
As is the case of almost all developing countries, redefining the role of the State to enable it to
make a more effective contribution to economic and trade performance is one of the main objectivesof the Seychelles' privatization plan.  In this regard, the latter covers a variety of State-owned
enterprises and community and social services, ranging from tourist establishments, State farms,
manufacturing and industrial companies and other trading companies, to waste collection and waste
water treatment, etc.  Although some State-owned enterprises and community services are yet waitingfor privatization, the bulk of these enterprises and services is already transferred to private investors,
whether foreign or national.
Regarding the Seychelles Marketing Board (SMB). the Government has no plans in the
foreseeable future to privatize it.  As to its functioning, SMB is controlled by two main organs, that is
to say, the Board of Directors and Managing Director.  The Board of Directors consists of
representatives from different government ministries and departments, and is chaired by the President
of the Republic.  The Managing Director is responsible for the day-to-day business of SMB and for
the execution of the policy formulated by the Board of Directors and this in line with government
policies.  SMB has five divisions, that is to sa y, Vegetables, Meat, Food Processing, Agro-Industrial
Production and Retail.
(ii) Pricing policy
Question 2Seychelles states that prices of local goods and se rvices are determined freely by market forces,
whereas imported products are subject to price controls by the Government.  Seychelles also
adds that controlled prices take the form of the setting of formulae for the calculation of prices,
there is therefore a mark-up of 30 per cent on imports.
- Please provide a fuller description of the scope and application of Seychelles' price
controls for incorporation in the Working Pa rty Report, e.g. an explanation of the basis
(i.e. invoice) and formula(e) used to calculate the prices, how the amount of 30 per cent
as the maximum mark-up point is determin ed, how the controls are enforced and theWT/ACC/SYC/8
Page 2
extent to which the process of similar domestic goods are monitored or controlled.  Do
different goods have a different mark-up?  If so, what determines the controlled prices
of different goods?
- Please give specific examples of how price controls are actually applied to imports and
explain the text of sections 6 and 7 of the Trades Tax Act.
- Please provide a copy of the regulations referred  to in sections 6 and 7 of the Trades Tax
Act which specify how price controls are applied to imported and domestic goods.
Answer:
Pursuant to section 6 of the Trades Tax Act, "the retail mark-up of goods imported into
Seychelles and liable to trades tax shall be calcul ated at the rate specified in the regulations on the
aggregate of the c.i.f. value of the goods and the trades tax paid thereon".  In the same vein, in
accordance with section 7(1) of the Trades Tax Ac t, "the maximum price at which goods imported
into Seychelles and liable to trades tax shall be:
(a) in the case of a wholesale sale, the price representing the c.i.f. value of those goods increased
by the aggregate of the trades tax, 50 per cent of the retail mark-up and the levy on those
goods;
(b) in the case of a retail sale on Mahé, the price calculated under paragraph (a) increased by
50 per cent of the retail mark-up of the goods;
(c) in the case of a retail sale on an island other than Mahé island, the price calculated under
paragraph (b) increased by such rate as specified in the regulations".
In fact, although the maximum mark-up point is determined by law, the prices are fixed by
retailers not by the government.  Regarding controls, they are enforced by the officers of the
Consumer Relations Unit of the Ministry of Finance and Communications, which inspect shops andsupermarkets from time to time to detect potential offenders.  As almost all goods sold in the
Seychelles' shops and supermarkets are imported, the price controls are confined to imported goods.
A copy of the latest edition of the Trades Tax Regulations is available in the WTO Secretariat
(Accessions Division, Room 1126) for consultation.
Question 3
This section of WT/ACC/SYC/3 (Pricing policy) states: "Prices of local goods and services are
determined freely by the market forces whereas imported products are subject to price control
by the Government".
- Please indicate how this policy is not a violation of Article III of the GATT 1994 which
states, inter alia ,
"The products of the territory of any contracting party imported into the territory of
any other contracting party shall be accord ed treatment no less favourable than that
accorded to like products of national orig in in respect of all laws, regulations and
requirements affecting their internal sale , offering for sale, purchase, transport,
distribution, or use", andWT/ACC/SYC/8
Page 3
"...contracting parties applying such measures [i.e. maximum price controls] shall take
account of the interests of exporting contract ing parties with a view to avoiding to the
fullest practicable extent such prejudicial effects".
- In addition, please discuss the implications of the price controls on imported services
(when no such controls are in place for domestic output) for national treatment
commitments in Seychelles GATS schedule.
Answer:
First of all, it is important to note that the antisocial effects of restricted economic competition
due to the extraordinary market situation prevailing in Seychelles are the only reason for the
introduction and maintenance of price controls.  The Seychelles' Government recognises that this
policy is not fully in conformity with Article III of the GATT 1994, as a small developing Island
State, it seems to us that this policy is not totally a violation of the provisions and spirit of
GATT 1994, notably its Articles XVIII and XXXVI.  However, the Government is willing to take allnecessary steps to bring this policy and, more generally, its commercial statutes in line with the
requirements of the WTO Agreements.
As to services, whether imported or not, they are not subject to price controls as is the case of
imported goods.  Accordingly, the price control mechanism will have no implications on national
treatment commitments in the Seychelles' Government GATS Schedule.
Question 4
Seychelles reports that the Consumer Relations Unit of the Ministry of Finance and
Communications is responsible for ensuring that buyers are not overcharged and that
overcharging is subject to penalisation.
- Is this government agency responsible for ad ministering this mechanism as well?  Could
Seychelles provide further details on the type of penalties that are assessed and how they
are assessed?
Answer:
Yes, this Unit is also responsible for administering this mechanism under the supervision of
the Principal Secretary of the Ministry of Finance and Communications.  In fact, in practice, penaltiesare imposed if actions taken by that Unit, under the form of either verbal and/or written warning, are
unsuccessful.  They are assessed in accordance with Regulation No. 80 of the Trades Tax
Regulations, 1997 and ranged from a fine of SR 20,000 and imprisonment for 2 years to the
confiscation of the goods in respect of which the offence has been committed.
Question 5
Given that, according to WT/ACC/SYC/3, there is no specific legislation dealing with restrictive
practices and monopoly in Seychelles, has the Government taken steps to institute legislation at
a later date?
- Seychelles should review its price cont rol regime in light of the requirements of
Article III:4 and Article III:9 of the GATT 1994 and should:  (a) eliminate theWT/ACC/SYC/8
Page 4
discrimination inherent in these regulations for both goods and services in the context of
accession;  and (b) take steps to ensure that there are no prejudicial effects on imports of
any price controls that remain in place or that are applied later.
- Seychelles should ensure that any price co ntrols applied to imported services are
administered on an MFN and national treatm ent basis, and should reflect this in its
GATT Schedule.
Answer:
The Seychelles' Government has no plans to introduce legislation to deal with restrictive
practices and monopoly in Seychelles in the foreseeable future.  In the same vein, the Seychelles has
no intention to apply price controls to imported and domestic services.  As indicated earlier, one of the
main objectives of the price control mechanism is to protect the vital interests and needs of
Seychelles' consumers, notably the less fortunate among them, who often face imbalance in economic
terms and bargaining power.  In fact, the setting up of a comprehensive and modern legal frameworkfor the articulation of consumers' rights and interests through the enactment of a consumer protection
legislation should permit the Government to bring the current price control regime in line with the
requirements of the GATT 1994.  For this purpose, please note that the Government is drafting a
Consumer Protection Bill which should shortly be presented before the National Assembly for
approval.
(iv) Regional development plans
Question 6
Seychelles should supply much more detail on the arrangements for trade in goods and services
in the five regional economic cooperation and in tegration organizations listed in this section.
- Please list the membership of the organizations.- Please indicate the nature and scope of any non-MFN provisions or preferences given to
or received from Seychelles under these arrangements.
- Please indicate whether and how these agreements meet the "substantially all trade"
criteria of Article XXIV of the GATT 1994.
Answer:
For the moment, the Indian Ocean Commission (IOC), which is not a regional trading
arrangement, is the only regional organization in which Seychelles participates.  Although Seychelles
was a member of PTA, it is not a member of COMESA the PTA's successor.  Regarding the Indian
Ocean Rim Association, the latter is a simple forum in which the Indian Ocean Rim countries are
discussing with a view to concluding eventually a regional trading arrangement.  However, as it is nosecret that regional trading arrangements can bring economic and trade benefits to their members,
notably the smallest ones, the Seychelles Government is thus contemplating shortly applying for
membership in the Southern African Development Community (SADC).WT/ACC/SYC/8
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(b) Monetary and fiscal policies
(i) Monetary policy
Question 7
Seychelles has indicated that the Rupee is overvalued while also noting that there is a foreign
exchange shortage and an active parallel ma rket in foreign exchange, presumably offering
suppliers of foreign exchange a better exchange rate.
There would seem to be a conflict between the stated policy objectives and the actual measures
applied in Seychelles' monetary policy as it relates to the supply of foreign exchange. Seychelles'
response to this conflict has been to apply even  tighter controls on access to foreign exchange,
increasing the number of categories with different allocation rates and criteria for access and
embargoing certain foreign payments.
- Please discuss the impact of these restrictions on imports and Seychelles' plans for
resuming convertibility for both the current and capital accounts.
Answer:
The impact that these restrictions have had are as follows:
(i) with the limited access to foreign exchange at banks, importers have resorted to the parallel
market where they have had to pay a premium on foreign currency.  This cost has been in
most instances passed on to customers who have had to pay more for imported goods;
(ii) the shortage in settlements with suppliers has resulted in the latter charging interest on
delayed payments.  Again this has meant more expensive goods from abroad;
(iii) with the shortage of foreign currency in Se ychelles, there are indications that importers have
met their financial obligations from funds obtained abroad.  This has either meant a reduction
in foreign assets of Seychellois abroad (through drawdown in foreign balances) or an increasein the external liabilities of Seychelles (in cases where importers have had to borrow from
abroad to meet their payments).
The Government/Central Bank from 1 January 1997 partially abolished the foreign exchange
pipeline scheme.  From that date, foreign exchange in respect of payments for all goods that had not
entered the country as at 31 December 1996 are met freely by commercial banks at their owndiscretion.  For this, banks are allowed to keep 50 per cent of their foreign earnings.  In respect of
goods that had already entered Seychelles by 31 December last year, banks allocate 20 per cent of
earnings until this "frozen" pipeline is cleared.  Once this is cleared banks would have the full
70 per cent of earnings to meet foreign currency needs of their clients. 30 per cent of all earning are
surrendered to the Central Bank.
Efforts towards full capital account convertibility have also been taken with the uplifting of
the embargo imposed in July 1995 on payments of dividends, management fees and proceeds from
sales of assets.  From 1 January 1997, foreign exchange requests in respect of these transactions are to
be placed at the "bottom" of the "frozen" pipeline.  When this is cleared, requests pertaining to these
transactions would likely be treated in the same manner as others.WT/ACC/SYC/8
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(ii) Fiscal policy
Question 8Please explain how the reduction in customs duties can be considered a trade-liberalising
measure when it is accompanied at the same ti me by extensive foreign exchange controls and
the application of import licensing.
Answer:
It is important to keep in mind that the reduction in customs duties is a long-term measure
which is primarily designed to render the government budget less dependent on revenues derived
from taxation of international trade and at the same time to reduce the cost of living in Seychelles,given the bulk of goods consumed in the archipelago is imported.  As to measures relating to foreign
exchange and import licensing, these are temporary measures taken to address balance-of-payment
difficulties which are also generally temporary.  In  other words, from a long-term point of view, there
is no contradiction between these sets of measures because the former is designed to last while the
latter is not.
(c) Foreign exchange payment and control regime
(i) Acquiring foreign currencyQuestion 9WT/ACC/SYC/3 states that it is illegal to buy or sell foreign currencies except through an
authorised dealer, and that authorised dealers include the commercial banks, and for limited
purposes, hotels, casinos, etc.
- How does the Government "authorize" an entity to become a foreign exchange dealer?
Is there any limit to the number of persons or institutions that can be authorised?
- Are there circumstances under which persons or firms other than commercial banks
could become authorised dealers in foreign exchange with full rights to buy and sell
foreign exchange?  Is this role (ie. an authorised dealer) open to foreign service
suppliers, whether or not a commercial bank?
Answer:
The Government authorizes an entity to become a foreign exchange dealer under the
Exchange Control Act, 1976.  In fact, only commercial banks and bureaux de change (at present there
is only one bureau de change) are by law allowed to sell and at the same time buy foreign currency.
Other authorised dealers are allowed only to purchase foreign currency and this should only be done
during the course of their business activity.  These businesses are generally all foreign exchange
earners in the tourism industry.  Such businesses have to surrender all their earnings to commercialbanks because they are not allowed under the law to sell any of these currencies unless permitted to
do so by the Central Bank.
Generally speaking, when an entity desires to act as a foreign exchange dealer, it applies to
the Central Bank of Seychelles and if the application is successful, the Minister of Finance, on the
recommendation of the Central Bank, publishes an Order in the Official Gazette authorising thatWT/ACC/SYC/8
Page 7
entity to act as a foreign exchange dealer.  There is no limit to the number of persons or institutions
authorised to buy and sell foreign currencies.
As pointed out above, only commercial banks and bureaux de change are allowed to sell and
buy foreign currency under the law.  The "authorized dealers" role, that is to say, moneychanging
business, is open to foreign service suppliers.
Question 10
Concerning retention and access to foreign exchange:
- How does Seychelles enforce its allocation system for foreign exchange, if, as indicated in
Annex 3, it does not issue import licences?
- At the present time, what portion of the fo reign exchange earned may exporters retain
from their sales abroad and what portion must be surrendered for local currency?
- Please name and describe the seven "channels" for acquiring foreign exchange.  List the
criteria and conditions under which importers and other consumers of foreign exchangemay purchase from each of these channels.  Please elaborate on how this system works
in practice?
- Please indicate the absolute value and rela tive size vis-à-vis the total of the foreign
exchange amount available in each ch annel in a recent representative period.
Answer:
All consignments of goods (with the exception of personal effects) to be cleared at customs
require an import permit which is issued by the Ministry of Finance.  Allocations for foreign exchange
are done by commercial banks who have to satisfy themselves with the necessary documents (import
permits) before foreign currency is supplied to an importer.  Moreover, the Central Bank monitors all
transactions for foreign currency through weekly reports provided by each bank.
Since January 1997, the maximum that the foreign exchange earners may get back from
commercial banks on foreign currency sold is 20 per cent.  However, this is not a requirement but an
upper limit which banks are expected not to exceed.  With the exception of companies with the
Investment Promotion Act (IPA) status which have to surrender 50 per cent of their foreign exchange
earnings; international business companies, trusts, International Trade Zone (ITZ) companies,offshore insurance companies which are exempted, all foreign exchange earners are required under
the Foreign Exchange Regulations Act, 1996 to convert all their foreign exchange earned, through
exports from Seychelles, for Seychelles Rupees through a commercial bank operating in Seychelles.
The seven channels for acquiring foreign ex change were merged into three from the
beginning of 1997.  Regarding criteria and conditions, please note that all requests are lodged atcommercial banks with proof of transaction (e.g import permits).  The funds are deposited at the
respective banks which classify the payment according to the priority/category.  Commercial banks in
turn place these funds at the Central Bank and when the payment falls due the funds are transferred
back to commercial banks which then surrender the foreign currency to the client.  As at
31 December 1996, the outstanding, balance in the foreign exchange pipeline was SR 300 million.WT/ACC/SYC/8
Page 8
(ii) Foreign exchange transactions
Question 11
What is the current exchange rate of the Seyc helles Rupee in terms of U.S. Dollars, and what
has been the rate over a recent representative period?
Please describe the fees paid by individuals and firms to commercial banks and other
authorised dealers to receive foreign exchange .  Are these fees the same as the Commission
charged by the Central Bank, or are these fe es charged in addition to the Central Bank
Commission?
What is the purpose of prohibiting foreign-owned Rupee accounts?
Answer:
The current exchange rate of U.S. Dollar is SR 4.9918 as at 31 January 1997.  Over the past
five years (1991-1996), the Rupee/U.S. Dollar rate has averaged SR 6.0245 per US$.
The Central Bank receives a commission of 0.875 per cent on each foreign exchange
transaction.  Regarding commercial banks and other authorised dealers, the maximum margin
authorised on buying and selling Pounds Sterling and U.S. Dollars is 0.50 per cent and 1.25 per cent
respectively, and 0.50 per cent and 1.50 per cent for other currencies.  The main purpose of
prohibiting foreign-owned Rupee accounts are:  to disc ourage capital flight, to enable as much foreign
exchange to be brought into Seychelles and discourage parallel market activities.
(iii) Administration of control
Question 12
WT/ACC/SYC/3 states that "exchange controls are maintained in the form of administrative
allocation of foreign exchange for the making of certain payments".  This applies to the
70 per cent of foreign exchange inflows allocated to the seven pipeline categories and the15 per cent surrender requirement.
- Please elaborate on this statement.  Which payments are covered by these restrictions?
- What happens to the 30 per cent of foreign exchange not allocated to and through one of
the seven pipeline categories to whom the 15 per cent surrender requirement is applied,
e.g., some authorized foreign exchange dealers have a 100 per cent surrenderrequirement?
Answer:
These measures do not apply any longer.
Question 13
It is stated that Seychelles foreign exchange  restrictions were "temporarily" established in
July 1995.
- Are they still in place?  What plans exist to  alter or abolish them?  What has been the
reaction of the IMF to these restrictions?WT/ACC/SYC/8
Page 9
- Given the negative effect these restrictions appear to have on imports, please indicate
how these restrictions can be considered to be in conformity with Article XV:4 of the
GATT 1994 which states in part, "Contracting  parties shall not, by exchange action,
frustrate the intent of the provisions of this Agreement...".
Answer:
Unfortunately, part of the restrictions are still in place in the form of the frozen pipeline.  The
Government has already taken steps to completely abolish the pipeline as outlined above.  The
pipeline would be completely eradicated once the payments due are settled.  From then, all requests
for foreign exchange would be done freely at commercial banks with virtually no intervention from
the Central Bank.  The IMF has not been particularly supportive of the pipeline and has encouraged
the Seychelles' authorities to remove it as soon as possible.
The Seychelles' Government recognises that these unavoidable and temporary restrictions are
not in conformity with Article XV:4 of the GATT 1994, but the said restrictions appear not to betotally inconsistent with the provisions and spir it of Article XVIII, notably its Section B, and
Article XII of the GATT 1994.
Question 14
This section states that "the Ministry of Finance and Communications controls foreign trade
and domestic marketing through the mechanism of import and price controls".
- Please describe how price controls are used to control foreign trade.
- Please list all measures used to effect control of foreign trade.
Answer:
Please see our earlier answer to question 2.
(iv) Imports and import payments
Question 15
Given the discussion of foreign exchange restrictions in the previous section of WT/ACC/SYC/3,
how can Seychelles state in this section that, no legal restrictions are placed on payments for
imports?
Answer:
It is important to note that the pipeline scheme was primarily introduced to help small
importers have access to foreign exchange to pay for their imports, experience shows that only big
importers with strong bargaining power obtained through the banking system the necessary foreign
exchange to pay for their imports.  Legally speakin g, no importers were obliged to use the scheme if
they obtained foreign exchange in or outside Seychelles to pay for their imports.WT/ACC/SYC/8
Page 10
Question 16
Seychelles indicates in this section that importing firms must obtain an import licence from the
Seychelles Licensing Authority?
- Does the import licensing requirement cover all imported goods?  If not, please specify
by tariff line name which imports are covered and which are not?
- Please list the specific "objective criteria" used to evaluate requests for import licences.Answer:
Although the Licences Act which is administered by the Seychelles Licensing
Authority (SLA) uses the terminology of import licence, in practice this so-called import licence is in
reality a licence issued to all importers so that they may operate as a business.  The specific objective
criteria used to evaluate applications for such licences are the following:
(i) if premises to be used for importing, wholesaling and retailing are newly constructed, an
applicant for an import licence must provide the SLA with a Certificate of Occupancy issuedby the Planning Authority established under the Town and Country Planning Act;
(ii) if premises which have not received the Planning Authority's approval are to be used for
importing, wholesaling and retailing for the first time, the applicant must provide the SLA
with a copy of his "Change of Use Certificate" issued by the Planning Authority.
However, it is important to note that, as far as the Seychelles licensing system is concerned, an import
licence in the sense of Article VIII of the GATT 1994 and the Agreement on Import Licensing
Procedures is an import permit which is administered by the Trade and Commerce Division of the
Ministry of Finance and Communications.  As indicated earlier, the imposition of import permits is a
temporary measure which should be abolished when the Seychelles' balance of payments equilibrium
is restored.  At the present time, with the exception of personal effects, all goods imported intoSeychelles are therefore subject to import permits.
Question 17
Since September 1995 "each shipment of commodities" has required an import permit.
- Please indicate if the import permit requirement covers all imports and, if not, list by
HS or other tariff nomenclature item number all imports which are subject to thisrequirement.
- Please indicate the criteria by which the Ministry of Finance and Communications
evaluates requests for import permits. Please indicate how such requirements are
justified under WTO provisions.
- Why are there two different import licensing requirements for imports into Seychelles?WT/ACC/SYC/8
Page 11
Answer:
With the exception of personal effects, all consignments of goods to be cleared at customs
require an import permit.  All requests for import permits to import raw materials, capital goods, etc.
are automatically approved.  For other goods, the Ministry issues or refuses import permits following
whether the goods in question appear to be essential or non-essential.  Regarding the part of this
question stating "why are there two different import licensing requirements for imports into
Seychelles", please see our answer to question 33.
Question 18
It would appear that the import permit requirements conflict with the provisions of Article XI
of GATT 1994 and the WTO Agreements on Agriculture and Import Licensing Procedures.
- In addition, we need more information on the application of import licences to imports,
the purpose of the licence and the degree of discretion in approving import licensing
requests.
- We need more information from Seychelles on how it believes it can justify these
measures under WTO provisions, and if not, how it intends to bring these aspects of its
regime into conformity with WTO provisions.
Answer:
As mentioned earlier, the main and sole purpose of the import permit requirements is to
safeguard the Seychelles' external financial and balance of payments position.  These requirements are
not designed to protect domestic production against foreign competition.  The Seychelles'
Government sees in fact no conflict with the prov isions of recent Articles of the GATT 1994, notably
those of Article XII, and the Agreement on Import Licensing Procedures and these measures.  The
Seychelles' Government confirms that theses requirements are purely temporary and shall beabolished when the balance of payment equilibrium is restored.  Regarding the degree of discretion in
approving import licensing applications, please note that applications for import permits are approved
or refused on a case-by-case basis and on the character essential or non-essential of goods for which
import permits are requested.  Please note further that all import permits relating to raw materials,
capital goods, etc. are automatically approved.
(vi) Exports and export proceeds
Question  19
If, as this section states, "there are no regulations governing repatriation of export proceeds"
could Seychelles please explain how its foreign exchange surrender requirements, described
earlier in the Memorandum are applied to exports and exporters?
Answer:
Until 1 January 1997, Seychelles exporters were not required to repatriate export proceeds
into Seychelles.  Accordingly, the foreign exchange surrender requirements concerned exclusively
foreign exchange bought by commercial banks and other authorized dealers operating in Seychelles.
Following the continuous deterioration of the Seychelles external financial and balance of paymentWT/ACC/SYC/8
Page 12
position, the administrative allocation of foreign exchange (pipeline scheme) has been partially
abolished and Seychelles exporters are now required to repatriate through the Seychelles banking
system all export proceeds.  However, exporters operating in the International Trade Zone and all
offshore entities are exempt from these requirements.
(vii) Proceeds from invisibles
Question 20Please elaborate on how foreign-invested firms can repatriate their profits.
Answer:
Foreign-invested firms can repatriate freely their profits through the banking system.
(viii) Capital
Question 21
Are the controls on profit remittance established in July 1995 still in place?  What are
Seychelles' plans for removing these restrictions?
Answer:
These controls are no longer applied.
(x) Relations with the International Monetary Fund
Question 22
What has the IMF recommended vis-à-vis Seychelles' price controls, licensing restrictions,
exchange restrictions and other financial controls?
Answer:
The IMF did not support these measures and encouraged the Government to reduce or
eliminate them as soon as possible.
(d) Foreign and domestic investment policies
Question 23
Please describe the provisions of the Investment Promotion Act (IPA) as they relate to benefits
provided or penalties or restrictions imposed in the context of the export activity of firms or the
use of local materials in the manufacturing process.
- Please provide a copy of the text of the Investment Promotion Act for Working Party
review.WT/ACC/SYC/8
Page 13
Answer:
In order to encourage investments in Seychelles, whether foreign or not, the Investment
Promotion Act was enacted in 1994.  Subject to prior approval of the Cabinet of Ministers, this Act
empowers the Minister responsible for Finance to grant to an investor a certificate of approval for
such period and subject to such conditions as the Minister may specify in the certificate of approval.
After obtaining a certificate of approval, an investor is entitled to all concessions and incentivesspecified in regulations made under that Act, and this, notwithstanding anything contained in any
other law.
Any concession or incentive applicable to an investor on the grant of a certificate shall, as
long as the certificate of approval is valid, not be affected to the disadvantage of the investor by any
amendment of the regulations or any other law relating to those concessions and incentives.
Under that Act, the export-oriented firms benefit thus of a variety of concessions and
incentives such as no customs duties on capital eq uipment, raw materials and through-puts, exemption
from social security contributions, payment of Corporate Tax at a reduced rate of 15 per cent, etc.  In
addition, where local raw material used is not less than 50 per cent of total raw materials (excluding
non-renewable resources), the export-oriented firms are entitled to a rebate of 5 per cent on corporate
tax payable.
Regarding the text of the Investment Promo tion Act, the latter is available in the
WTO Secretariat, (Accessions Division, Room 1126) for consultation.
Investment Development Advisory Services (IDEAS)
Question 24
WT/ACC/SYC/3 states that specific incentives under the IPA depend on the particular category
of investment.
- In this context, how do the incentives and benefits provided to "export-oriented units"
differ from those available to investments that fall under the "general category" that
might only be intended to supply the local market?
- Tax exemptions and benefits tied to exportation may constitute export subsidies
inconsistent with the Agreement on Subsidies and Countervailing Measures.  Seychellesshould describe in detail for the Working Party the export component of the investment
incentives provided and consider to what extent  these should be altered or eliminated to
bring them into conformity with WTO provisions.
Answer:
Since the beginning of the process of economic and trade liberalisation, Seychelles is
experiencing an unprecedented shortage of foreign exchange.  One of the main objectives of the
Investment Promotion Act is to diversify the Seychelles' economy, notably its sources of foreign
exchange because Seychelles is excessively dependent on tourism and the fishing industries for this
scarce resource.  Accordingly, the incentives and benefits provided to "export-oriented units" are
designed to boost the Seychelles' foreign exchange earning capacity in order to have the necessary
foreign exchange to pay for imported goods.  From the Seychelles Government's point of view, the
success of this policy would permit all restrictions on imports to be completely abolished.WT/ACC/SYC/8
Page 14
In fact, although the Seychelles' Government recognises that this policy is not totally
consistent with the Agreement on Subsidies and Countervailing Measures, on the other hand it feels
that that policy does not contradict the provisions of Article XVIII of GATT 1994 and the spirit of the
WTO Agreements.
Seychelles International Business Authority (SIBA)
Question 25WT/ACC/SYC/3 states that SIBA manages the Seyc helles International Trade Zone (SITZ).  It
also states that, "to qualify for SITZ status, co mpanies are required to ... export a large part of
their products outside Seychelles ...", and th at "...benefits accruing to companies operating
inside the SITZ are numerous and these range from various tax concessions to reduction on
energy charges".
Tying such benefits to an export requirement would appear to violate the provisions of the
WTO Agreement on Subsidies and Countervailing Measures, and may also be inconsistent withthe TRIMs Agreement.
Answer:
Please see the answer to question 24.
Seychelles Industrial Development Corporation (SIDEC)
Question 26Is there an export requirement or inducement in an y of the assistance to Seychelles' firms by the
SIDEC?
Answer:
No.
(e) Competition policies and State-trading
Question 27
WT/ACC/SYC/3 states that the Government encourages competition where it deems it
appropriate.
- Please list areas of the Seychelles' economy and trade regime where the Government
does not deem competition with monopoly or with State control appropriate.
Answer:
Electricity, public transport, petroleum products and gas distribution.WT/ACC/SYC/8
Page 15
III. FRAMEWORK FOR MAKI NG AND ENFORCING POLICIES AFFECTING
FOREIGN TRADE IN GOODS AND TRADE IN SERVICES
(a) Trade policy
Question 28
Please provide a copy of the latest editions  of the Trades Tax Act and the Trades Tax
Regulations (as amended) and other relevant subsidiary legislation made under the Act, e.g., asit relates to measures applied or applicable to imports and exports.
Please provide a current tariff schedule listin g the "Trades Tax" applied to all imports, in
electronic media if possible.
Answer:
The latest editions of the Trades Tax Act and the Trades Tax Regulations, as amended, are
available in the WTO Secretariat (Accessions Division, Room 1126) for consultation.
(b) Trades tax on imports and rules governing imports
Question 29
Is it correct to state that the Trades Tax Act authorises the Minister of Finance and
Communications to modify applied tariff rates without further legislative action?
Answer:
Yes.
(ii) Customs valuation
Question 30
Please provide a copy of the Trades Tax Regulations of 1996.
Although Seychelles' method of customs valuation appears to comply with the WTO Customs
Valuation Code with respect to the principal method of valuation, i.e. transaction value,Seychelles does not appear to currently apply the subsidiary methodologies of the code where
the transaction value cannot be determined.
From the description in this section of WT/ACC/SYC/3, it appears that Seychelles does not have
a completely WTO-compatible regime in the ar ea of customs valuation.  We expect that
Seychelles will be able to implement the WTO Ag reement on the Implementation of Article VII
(Customs Valuation) from the date of accession.
- Could Seychelles indicate what steps it is  currently taking to bring its legislation into
conformity with WTO Customs Valuation provisions?
- Please complete the questionnaire in Annex 4 of WT/ACC/1 addressing the
implementation of customs valuation provisions.WT/ACC/SYC/8
Page 16
Answer:
The text of the Trades Tax Regulations of 1997 is available in the WTO Secretariat
(Accessions Division, Room 1126) for consultation.
The Government is contemplating to shortly brin g the current legislation in line with all the
provisions of the WTO Customs Valuation Agreement.  Consequently, Seychelles will be able to fully
implement that Agreement before the date of its accession to the WTO.
Regarding the questionnaire relating to the implementation of customs valuation provisions,
please refer to Annex 1.
(iii) Special tariff exemption for development purposes
Question 31
Please describe the provisions of Part XV of th e Trades Tax Regulations that relate to special
tariff exemptions and explain why they are granted.
Answer:
The exemptions provided for by Part XV of the Trades Tax Regulations cover goods
purchased by the President of the Republic for his personal use or for official purposes in his capacity
as President;  goods for churches and presbyteries, goods re-imported after exportation for repair or
processing or personal use;  returnable cont ainers, material and equipment supplied by other
governments or international organisations under technical aid and/or assistance programmesapproved by the Government;  samples for soliciting orders;  articles imported under the Vienna
Convention on Consular Relations;  temporary imports;  personal effects and travel souvenirs of
tourists', passengers' baggage, visitors' baggage, goods exempted in the national interest and for
export, temporary importation of vehicles and spare parts.
(iv) Anti-dumping, countervailing and safeguard measures
Question 32
WT/ACC/SYC/3 appears to state that Seychelles do es not at this time have any legal provision
to apply anti-dumping, countervailing duty or safeguard measures to imports.
Seychelles should commit not to apply such measures, even after accession, until it has
developed legislative provisions consistent with the relevant WTO Agreements and submitted itfor review in the respective WTO Committees.
Answer:
Yes.WT/ACC/SYC/8
Page 17
(v) Non-tariff measures
Question 33
WT/ACC/SYC/3 states that Seychelles requires the issuance by the Seychelles Licensing
Authority of a licence for importation of all goods for wholesale and retail sale.  The description
appears to state that the principle criteria for gr anting the licence is producing a "Certificate of
Occupancy" or a "Change of Use Certificate."
- Is the licence required by the importer to conduct business or are licences required for
the imported goods themselves?
- Are these the only criteria for obtaining an import licence?  If so, why is this required?
If not, please list the other requirements and the reason they are applied.
- Please explain how the licensing system is used for revenue purposes, as noted in this
section?  Please list the fees charged for licences.  Please indicate how the level and
structure of these fees is consistent with the provisions of Article VIII of GATT 1994 andthe WTO Agreement on Import Licensing Procedures regarding the fees charged and
the cost of the service rendered.
Answer:
Although the Licences Act of 1986 and regulations use the terminology "import licence", the
licence required by that Act is in fact a licence th at all importers must have to conduct an importation
business.  A certificate of occupancy or a change of use certificate of a premises are the only criteria a
prospective applicant must meet to obtain such a licence.  The latter is primarily used to collect
revenue and list business activities for business tax purposes.  Regarding the above criteria, the latter
are required to make sure that the premises used by importers comply with the planning and fire
regulations.  In addition to an application fee of US$10, the licence fee payable is US$240 for oneyear and US$1600 for three years.
From the Seychelles' Government's point of view, the level and structure of these fees does
not contravene the provisions of Article VI II of GATT 1994 and the WTO Agreement on Import
Licensing Procedures because, as pointed out above, that licence is not strictly speaking an import
licence.  Despite its terminology, import permits issued by the Ministry of Finance andCommunications under the Trades Tax Act and Trades Tax Regulations are the true import licences at
least in the sense of Article VIII of GA TT 1994 and the WTO Agreement on Import Licensing
Procedures.  Please note that importers pay no fee to obtain an import permit.
Question 34
WT/ACC/SYC/3 states that Seychelles restricts imports for reasons of health, food safety, and
national security, in addition to the application of licences for revenue purposes or import
permits to protect domestic industry.
- Please list and provide copies of Seychelles' laws and regulations that authorise the
application of these restrictions, and indicate what means, e.g., import licensing,
permits, other measures, are used to enforce the restrictions.WT/ACC/SYC/8
Page 18
Answer:
The Seychelles laws and regulations that authoris e the application of these restrictions are the
following:
- Firearms and Ammunition Act, Food Act, Public Health Act, Plant Protection Act.  The texts
of these laws and regulations are available in the WTO Secretariat (Accessions Division,
Room 1126) for consultation.
Import licensing means the requirements that all importers must comply with before engaging
in the importing business; permits means authorization granted by the Ministry of Finance and
Communications and other government ministries and departments interested by the goods in
question (Ministry of Health, Department of Internal Affairs, Ministry of Agriculture and Marine
Resources and Ministry of Environment);  other measures may, as the case may be, mean
phytosanitary certificates, etc.
Question 35
WT/ACC/SYC/3 states that importation of "certain types of goods" has required an import
permit but that this requirement was extended to all imports in September 1995 due to the
deterioration of the balance of payments.
- Does Seychelles still maintain this import  requirement for all imported goods or has the
September 1995 expansion been rolled back?
- What guidelines are followed by the Ministry of Finance in granting the import
permits?  Is a fee charged for this permit?  How long is this requi rement expected to be
maintained?
- The stated use of the import permit system, "to reduce the volume of imports", is
inconsistent with Article XI of the GATT 1994.  Measures applied for balance ofpayments purposes must be applied in conformity with Articles XII and XVIII of
GATT 1994 and the understanding on balance of payments provisions, which address
the issues of transparency and duration, an d whether the measures applied are the least
distortive possible.  Seychelles must demonstrate its need to apply these particular
measures in the context of WTO provisions or eliminate them before the date ofaccession.
Answer:
Please refer to our earlier answers to questions 18, 33 and 57.
(c) Rules governing exports
Question 36This section of WT/ACC/SYC/3 states that "raw materials imported by the export-oriented
enterprises are exempt from customs duties" and that these firms "pay corporate tax
15 per cent and benefit a rebate on corporat e tax payable" depending on export turnover.
- What provisions of Seychelles' law authorise these benefits for export-oriented firms
and industries?WT/ACC/SYC/8
Page 19
- These benefits are tied to export volumes and would appear to constitute export
subsidies inconsistent with the provisions of the WTO Agreement on Subsidies and
Countervailing Measures.  Seychelles should address this issue and indicate how it
intends to bring these measures into conformity with the WTO.
Answer:
These benefits are authorised by the Investment Protection Act (IPA), the text of which is
available in the WTO Secretariat (Accessions Division, Room 1126) for consultation.
In fact, the main objective of these concessions and incentives is to create an acceptable
export base because the Seychelles export earnings depend exclusively and dangerously on exports of
a small number of products and services (tourism services, fish and fish products).  Accordingly, if
these measures are not fully consistent with the WTO Agreement on Subsidies and Countervailing
Measures, they are on the other hand in full conformity with the provisions of Article XVIII of the
GATT 1994.
IV. POLICIES AFFECTING FOREIGN TRADE IN GOODS
3. Internal Policies Affecting Foreign Trade in Goods
(a) Industrial policy
General description
Question 37WT/ACC/SYC/3 states that main objectives of the Seychelles Industrial Strategy are:
- the stimulation of the local production and promotion export-oriented industries by
private sector investors;
- the promotion of export-oriented industries based mainly on imported raw and
intermediate materials including assembly-type projects by:
- waiving taxes wherever possible,
- reducing corporate tax on profits in or der to make returns on investments more
attractive,
- studying ways and means of attracting investors notably foreign ones, to take
advantage of duty-free exports to the European Communities and also othermarkets.
Could Seychelles provide in further detail on the mechanism(s) and/or policy(s) that would
enable the implementation of this strategy particularly those mentioned above.
Seychelles appears to have a number of methods of promoting export-oriented industrial
investment and development that are inconsistent with WTO Agreements, e.g. the tax benefitprovisions administered in the SITZ and other benefits for export-oriented industries.
Seychelles should address this issue and indicate how it intends to bring these measures into
conformity with the WTO.WT/ACC/SYC/8
Page 20
Answer:
The creation of a conducive environment through the enactment of the Investment Promotion
Act and the establishment of the Seychelles International Trade Zone are the main mechanisms and
policies through which the Government is implementing this strategy.
Regarding compliance with the WTO Agreements, please see our earlier answer to
question 36.
(b) Technical regulations and standards
Question 38
With respect to agricultural products, how do  Seychelles' standards and regulations compare
with those of the Codex Alimentarius (Codex), Organization of International Epizootics or the
European Plant Protection Organisation?
- Please complete the questionnaire in Annex 5 of WT/ACC/1 addressing the
implementation of the provisions of the WTO Agreement on Technical Barriers toTrade.
Answer:
The Seychelles' standards and regulations are based on those of the Codex Alimentarius
(Codex) and the International Plant Convention.  In addition, Seychelles incorporates in its technical
regulations and standards all the World Health Organization's (WHO) recommendations.
Regarding the questionnaire on Technical Barriers to Trade (TBT), please refer to Annex 2.
(c) Sanitary and phytosanitary measures
Question 39
Seychelles indicates that certain goods are subject to import restrictions for health and security
reasons.  For example, the importation of any food which does not comply with the Food Act(Chapter 83).
- Please explain how these regulations and acts  are consistent with the Agreement on the
Application of Sanitary and Phytosanitary Measures.
Answer:
The provisions of these acts and regulations are not inconsistent with those of the Agreement
on the Application of Sanitary and Phytosanitary Measures because they empower only the Ministers
responsible for Health, and Agriculture and Marine Resources to take the necessary measures to
protect human, animal or plant life or health.  In general, the assessment of risk and the determination
of the necessary procedures by the Seychelles' sanitary authorities to protect human, animal or plant
life, etc. are on the whole in accordance with the provisions of the WTO Agreement on theApplication of Sanitary and Phytosanitary Measures, notably Article 5.WT/ACC/SYC/8
Page 21
Question 40
According to section 4 of the Animal (Diseases and Imports) Act, no animals other than dogs,
cats, cattle, pigs, sheep, goats, horses and rabbits shall be imported into Seychelles.
- Please compare the provisions of this Act with the Agreement on the Application of
Sanitary and Phytosanitary Measures and indicate how the Act corresponds to the
requirements of the Agreement.
Answer:
The Government recognises that the Animal (Diseases and Imports) Act is not fully in
conformity with the WTO Agreement on the Application of Sanitary and Phytosanitary Measures and
contemplates to abrogate it and enact a new one in the foreseeable future.
(d) Trade-related investment measures (TRIMs)
Question 41
With reference to TRIMs inconsistent with th e provisions of the TRIMs Agreement, these
measures must be listed and described for the Working Party, and Seychelles should indicate to
the Working Party how it intends to eliminate these measures or to modify them to bring them
into conformity with WTO provisions.
Answer:
Seychelles has no measures which are in principle inconsistent with the provisions of the
Agreement on Trade-Related Investment Measures.
(e) State-trading practices
Question 42
Could Seychelles provide further details on the operation of the Seychelles Marketing Board
(SMB) and the Seychelles Petroleum Company (SEYPEC)?
- What government agencies, if any, monitor and/or regulate their activities?
- Please describe day-to-day operations and how these products are marketed?  Why have
the particular products distributed by SMB been deemed "essential".
Answer:
The Seychelles Marketing Board (SMB) is controlled by two main organs, that is, the Board
of Directors and the Managing Director.  The Boar d of Directors consists of representatives from
different government ministries and departments and is chaired by the President of the Republic.  The
Managing Director is responsible for the day-to-day management of SMB and implements the
strategies and policies formulated by the Board, and this in line with government policies.WT/ACC/SYC/8
Page 22
Regarding SEYPEC, it is a trading company incorporated under the Seychelles Companies
Act, 1972.  As SMB, it is controlled by two key organs: the Board of Directors and the ManagingDirector.  The Board is chaired by the Principal Secretary of the Ministry of Finance and
Communications.
The activities of these two entities are monitored by the Ministry of Finance and
Communications.
As to the day-to-day business of the Seychelles Marketing Board (SMB), the latter has five
divisions, that is to say, Vegetables, Meat, Food Processing, Agro-Industrial Production and Retail.
Each division is headed by a General Manager and has its own management.
Given the Seychelles' reliance on imports for its domestic consumption, the narrowness of its
domestic market and its remoteness from the main sources of supply, the Seychelles has seen thenecessity of maintaining SMB and SEYPEC in the future in order to ensure regular supply of the
archipelago in essential goods.
Question 43
WT/ACC/SYC/3 states that storage for stocks of the "essential" products are borne by SMB
and when demand of those products exceed supply, stocks are released to the domestic market
with a view to stabilising consumer prices.
- Could Seychelles provide further detail on  what will happen once stabilisation occurs?
- Also, what entity determines when stabilisation is reached?
Answer:
The Seychelles Marketing Board's overall objective is to ensure the regular supply of the
domestic market in essential goods, notably foodstuffs, and at the same time make sure that the prices
of these goods are as low as possible.  This pr ocess is a continuous one given that almost all
foodstuffs consumed in the archipelago are imported and as a general rule domestic prices follow
fluctuations in the international price.  In fact, no entity is responsible for determining when consumer
price stabilisation is reached even if SMB may have its own appreciation to schedule its orders and
monitor its stocks.
Question 44Please indicate if, in addition to the Seychell es Marketing Board and the Seychelles Petroleum
Company, there are any other State-owned or St ate-run enterprises in Seychelles which engage
in international trade other than for their own consumption, i.e., as part of a manufacturing ordistribution process.
Answer:
No.
Question 45
Please indicate what steps Seychelles is taki ng to ensure that the SMB and the SEYPEC will
take to conform with GATT Article XVII?WT/ACC/SYC/8
Page 23
- Seychelles should complete the questionnai re on State-trading enterprises and products
contained in Annex 6 of WT/ACC/1, including full information on all products traded
largely or exclusively by the Seychelles Marketing Board, the Seychelles Petroleum
Company, and any other State-trading enterp rise.  It should be submitted to the
Working Party as soon as possible for its review.
Answer:
The Seychelles' Government undertakes to take all necessary steps to ensure that the interests
of the WTO Members are not adversely affected by the operations of SMB and SEYPEC.  In the same
vein, these two entities shall be notified to the WTO.
Regarding the questionnaire on State-trading enterprises, please see Annex 3.
Question 46
Please outline how Seychelles liberalised its pr evious export monopolies in fish, copra and
cinnamon.  What Ministries were involved?  At th e current time, please describe the role of the
State in the domestic production and export of these goods.
Answer:
Before the beginning of the economic and trade liberalization process, SMB had the
monopoly on import and export of all goods into and from Seychelles.  No person was thus allowed to
import and export goods into or from Seychelles without a permit issued by SMB.  Since thebeginning of the economic and trade liberalisation process, the SMB monopoly on exports has been
completely eliminated and at the same time its monopoly on imports has been substantially reduced.
At the present time, the SMB monopoly on imports is confined to some few essential goods.
Two ministries have been involved in this process: the Ministry of Finance and
Communications, as Ministry responsible for trade, and the Ministry of Agriculture and MarineResources.  For the moment, the Government plays no role in the production and export of the above
goods as was the case before the liberalisation process.
(f-g) Free zones and free economic zones
Question 47
Please describe the size of Seychelles' free zo ne export operations in comparison with trade
generated by the rest of the country.
Answer:
The Seychelles International Trade Zone (Free Zone) is not fully operational.  At the present
time, there are only two companies which have started operating in this zone and their exports
represent the bulk of the Seychelles exports.WT/ACC/SYC/8
Page 24
4. Policies Affecting Foreign Trade in Agricultural Products
Question 48
Seychelles indicates that in November 1989, an "agricultural sector strategy was undertaken,
which is designed to recover lost ground and to place the agricultural sector on the growth
track".  One of the main objectives was to provide adequate institutional, infrastructural and
financial support to farmers in order to ensure efficient use of limited land resources.
- Could Seychelles provide in further detail the type of mechanism which would be
implemented in order to provide financial and structural support such as this?
Answer:
Due to the scarcity of arable land, there is an increasing gap between domestic production and
consumption of agricultural products in Seychelles, which is filled with more imports.  In order to
increase domestic production of needed agricultural pr oducts, the Government set up an "Agricultural
Fund", which is managed by the Development Bank of Seychelles (DBS), to provide Seychellesfarmers with concessionary loans.  The Government, through the Ministry of Agriculture and Marine
Resources and massive use of foreign technical assistance, helps farmers make better use of the new
technologies and techniques of production available in the agricultural field.
V. TRADE-RELATED INTELLECTUAL PROPERTY REGIME
Question 49Please indicate what aspects of Seychelles' regime for intellectual property protection is
currently inconsistent with the WTO TRIPS Agre ement? In particular, which of Seychelles'
laws are inadequate and need to be strengthened or replaced?
- Please describe what Seychelles is doing to rectify these deficiencies, if any.
- We seek implementation of the TRIPS Agreeme nt by Seychelles on the date of accession,
without recourse to any transitional arrangements.
Answer:
The Patents Act which dates back to 1901 is totally inconsistent with the WTO TRIPS
Agreement.  In this respect, the Seychelles' Government is contemplating to shortly enact a new
Patents Act which will be in conformity with the provisions of the TRIPS Agreement.
Regarding the Seychelles' Copyright Act of 1982 and Trademark Decree of 1978, the
Government is also contemplating amending them in  order to bring them in line with the WTO TRIPS
Agreement.  Accordingly, the Seychelles' Gove rnment is ready to implement fully the TRIPS
Agreement on the date of accession if it can secure necessary technical assistance to prepare a Patents
Bill and necessary amendments to the two other pieces of legislation on the protection andenforcement of intellectual property rights.  For this purpose, the Seychelles' Government is
contemplating to shortly approach the WTO and its developed Members for the necessary technical
assistance.WT/ACC/SYC/8
Page 25
VI. TRADE-RELATED SERVICES REGIME
Question 50
Please describe in more detail how Seychelles applies an economic needs test for foreign service
providers.
Answer:
Given the Seychelles' domestic market is a small market of about 75,000 people, the
Seychelles' Government takes into account the needs of the domestic community by applying the
regulatory requirements existing for the commercial presence of foreign suppliers of most
professional services.  Please note that the economic needs test is applied only for commercial
presence and that there is no limit to the cross-border supply or consumption abroad of almost all
professional services both with respect to national treatment and market access.
Question 51
Please give more information on how the telecommunications monopoly has been liberalised.
For what services?
Answer:
The telecommunications monopoly has never been a public monopoly in Seychelles but a
private one.  Since the British domination, Cable and Wireless of Seychelles, a subsidiary of Cable
and Wireless Plc. of the United Kingdom had an exclusive licence to provide all telecommunicationsservices within Seychelles.  In line with the liberalisation process initiated by the Government at the
beginning of the 1990s, the Cable and Wireless licence has been renegotiated in order to open the
Seychelles' telecommunications market to other potential operators.  Liberalisation of the
telecommunications sector covers all telecommunications services.
Question 52
Please describe any current exceptions to MFN treatment of foreign service providers.
Answer:
The only exception to MFN treatment of foreign service providers concerns certain providers
of tourism-related services such as tour operators, travel agents.  According to the Licences (Tour
Operator and Travel Agent) Regulations, a tour operator or travel agent must be a companyincorporated under the Seychelles Companies Act with not less than two-thirds of its shares being
held by citizens of Seychelles.WT/ACC/SYC/8
Page 26
VII. INSTITUTIONAL BASE FOR TRADE AND ECONOMIC RELATIONS WITH
THIRD COUNTRIES
1. Bilateral or Plurilateral Agreements Relating to Foreign Trade in Goods and Services
Question 53
What is meant by the statement that "the provisions of these agreements are not incompatible
with the MFN principle"?  Do any of these coun tries receive other than MFN treatment in the
Seychelles' import market?
Answer:
If most of the bilateral agreements entered into by Seychelles make direct reference to the
MFN principle of the GATT, but certain agreements make no reference to that principle.  In this
context, the expression "the provision of these agreements are not incompatible with the MFN
principle" means in our mind that the provisions of  those agreements are not inconsistent with the
MFN principle.  No country receives other than MFN treatment in Seychelles' import market.
2. Economic Integration, Customs Union and Free Trade Area Agreements
Question 54
How long has Seychelles been a member of the Preferential Trade Area for Eastern and
Southern Africa (PTA)?
- What are the operative provisions of Seychelles participation in this agreement for both
goods and services?  Are there any preferen ces related to labour mobility in this
Agreement?
- What products are imported at preferential rates?  Is substantially all trade covered and
does the PTA call for elimination of duties or only a partial reduction?
Answer:
Seychelles was a member of the PTA for only one year.  Although Seychelles was a member
of this regional trading block, it has never applied the provisions of the treaty establishing PTA
relating to trade in goods and services.  Unlike the COMESA, PTA has no provisions dealing directly
with labour mobility.
Before the transformation of PTA into COMESA, the other members were the following:
Angola, Burundi, Comoros, Djibouti, Ethiopia, Kenya, Lesotho, Malawi, Mauritius, Mozambique,
Namibia, Rwanda, Somalia, Sudan, Swazila nd, Tanzania, Uganda, Zambia and Zimbabwe.
No products originating from PTA countries have been imported into Seychelles at
preferential rates because we did not apply the PTA treaty's provisions.  PTA, which was the first step
towards the establishment of a common market in Eastern and Southern Africa, covered all trade andstarted a gradual reduction of customs duties on all products originating from its Member States.WT/ACC/SYC/8
Page 27
Question 55
Concerning COMESA:
- What are Seychelles' plans for participatio n in the Common Market for Eastern and
Southern Africa?
Answer:
Although Seychelles is contemplating a request for membership in the Southern African
Development Community (SADC), it has no plans for participation in COMESA.
Question 56
Do the Indian Ocean Commission or the I ndian Ocean Rim Association incorporate any
preferences in trade in goods or services?
Answer:
The Indian Ocean Commission (IOC) or the Indian Ocean Rim Association are not regional
trading arrangements, accordingly there are no pr ovisions for preferences in trade in goods or
services.
ANNEXES
Annex 3 - Information on Import Licensing Procedures
Question 57
The information in the response to the questio nnaire on import licensing procedures needs
revision to adequately describe the scope and complexity of Seychelles' import licensing and
permit system.  The revised response should include full information concerning the application
of:
(a) import licences for all imports for whole or retail sale;
(b) import permits granted by the Ministry of Finance and Communications for prospective
purposes; and,
(c) more detail on how its import licensing  system works to enforce compliance with
domestic regulations concerning standards and sanitary regulations, and measures used
to protect food safety and national security, or for other such purposes.
Please ensure that the specific criteria for gran ting the licence or permit are supplied for each
measure applied.
Answer:
As indicated in our earlier answers, all imports for wholesale or retail require:
(i) an import licence issued by the Seychelles Licensing Authority;  andWT/ACC/SYC/8
Page 28
(ii) since September 1995, import permits for all consignment of goods issued by the Ministry of
Finance and Communications.
The licence issued by the Seychelles Licensing Authority (SLA) is a licence that all persons desiring
to engage in the import business must have before st arting a business.  Regarding the specific criteria
for granting that licence, please refer to the answer to question 33.
As for import permits, they are primarily issued by the Ministry of Finance and
Communication to cope with balance of payments difficulties that Seychelles has been experiencing
since the beginning of the economic and trade liberalisation process.  This measure is purely
temporary and the Seychelles' Government undertakes to abolish it when the balance of payments
equilibrium is restored.  In this respect, it is important to note that since the beginning of the economic
and trade liberalisation process, import permits are no longer used for protective purposes.  For the
moment, only some few residual protections are granted to domestic producers and this is through
customs tariffs.
In addition to the licence that all importers mu st have before engaging in import business and
import permits for all consignment of goods imported into Seychelles, importation of certain goods
requires prior authorization of the government ministries and departments responsible for controlling
use of those goods in Seychelles.  In this regard, the government ministries and departments
concerned are the following:
(a) Department of Internal Affairs for importation of firearms, ammunition, offensive weapons,
fireworks, blasting explosives (Appendix II to the Trades Tax Regulations of 1997);
(b) Ministry of Health for importation of industrial alcohol, dangerous drugs, chemicals and
radioactive substances and apparatus (Appendix III to the Trades Tax Regulations of 1997);
(c) Ministry of Environment for importation of all items under HS coding 3808 such as
insecticides, rodenticides, fungicides, etc. (Appendix IV to the Trades Tax Regulations of
1997); and
(d) Ministry of Agriculture and Marine Resources for importation of plants and plant products,
soil, organisms, animals, veterinary drugs (Appendix V to the Trades Tax Regulations
of 1997).WT/ACC/SYC/8
Page 29
ANNEX 1
Information on Implementation and Administration of the Customs Valuation Agreement
1. Questions concerning Article 1:
(a) Sales between related persons:
(i) Are sales between related persons subject to special provisions?
No, only if the relationship has influence on the price.
(ii) Is the fact of intercompany prices prima facie considered as grounds for regarding the
respective prices as being influenced?
Yes, but not in all circumstances.
(iii) What is the provision for giving the communication of the afore-mentioned grounds in
writing if the importer so requests? (Article 1.2(a))
Yes.  We will have no objection.  It already exists in our present Regulations.
(iv) How has Article 1.2(b) been implemented?
We have never fully implemented all its mechanisms, but in cases where there has been a
dispute, such procedures have been implemented.
(b) Price of lost or damaged goods:
Are there any special provisions or practical ar rangements concerning the valuation of lost or
damaged goods?
These are mainly based on facts and information gathered on invoices, bills of lading, packing
list, mode and term of payment.  Then the quality, quantity and value of the lost goods are calculated
for duty purposes.
2. How has the provision of Article 4 to allow the importer an option to reverse the order
of application of Articles 5 and 6 been implemented?
In cases where the importer is not satisfied with the value determined by the Customs
Authority, then the procedure to follow will be that of Section 188 of Trades Tax Regulations 1995.
3. How has Article 5.2 been implemented?
We have never implemented such an article before, but Seychelles sees no disadvantage in
safeguarding the revenue if it ever has to use it.
4. How has Article 6.2 been implemented?
It has never been put in practice here.  Seychelles thinks it will be of great use to the country.WT/ACC/SYC/8
Page 30
5. Questions concerning Article 7:
(a) What provisions have been made for making value determinations pursuant to
Article 7?
None.
(b) What is the provision for informing the importer of the customs value determined under
Article 7?
The importer is always informed of such decisions taken by Customs.
(c) Are the prohibitions found in Article 7.2 delineated?
Yes.
6. How have the options found in Article 8.2 been handled?  In the case of f.o.b.
application, are ex-factory prices also accepted?
Seychelles is already implementing it.  Yes, ex-factory prices are accepted.
7. Where is the rate of exchange published, as required by Article 9.1?
The rate of exchange is published every Friday at the Customs House.  Copies are distributed
to all other locations and banks and on the public notice board.
8. What steps have been taken to ensure confidentiality, as required by Article 10?
All our officers have signed a Secrecy Act and also an Officers Code of Conduct.
9. Questions concerning Article 11:
(a) What rights of appeal are open to the importer or any other person?
The right of appeal for the importer is already provided for in our Regulations.
(b) How is he to be informed of his right to further appeal?
In writing.
10. Provide information on the publication, as required by Article 12, of:
(a)(i) the relevant national laws;
Published in official gazette.
(ii) the regulations concerning th e application of the Agreement;
Published in official gazette.
(iii) the judicial decision and administrative rulings of general application relating to the
Agreement;
Published in official gazette if need to and in other public newspaper.WT/ACC/SYC/8
Page 31
(iv) general or specific laws being referred to in the rules of implementation or application.
Published for the importer and public at Customs House.
(b) Is the publication of further rules anticipated?  Which topics would they cover?
Yes,  classification and valuation procedures.
11. Questions concerning Article 13:
(a) How is the obligation of Article 13 (last sentence) being dealt with in the respective
legislation?
It is not in our present legislation.
(b) Have additional explanations been laid down?
Not yet.
12. Questions concerning Article 16:
(a) Does the respective national legislation contain a provision requiring customs
authorities to give an explanation in writing as to how the customs value was
determined?
No.
(b) Are there any further regulations co ncerning an above-mentioned request?
No.
13. How have the Interpretative Note s of the Agreement been included?
Seychelles has never implemented these notes before, but if it has to, there should be no
problem on our side.
14. How have the provisions of the Decision of  26 April 1984 on the Treatment of Interest
Charges in the Customs Value of Imported Goods (Val/6/Rev.1) been implemented?
We do not have the Decision of 26 April 1984.
15. For those countries applying paragraph 2 of the Decision of 24 September 1984 on the
Valuation of Carrier Media Bearing Softwa re for Data Processing Equipment (Val/8),
how have the provisions of this paragraph been implemented?
Please see reply to question 7 in document WT/ACC/SYC/5.WT/ACC/SYC/8
Page 32
ANNEX 2
Questionnaire on Technical Barriers To Trade
1. Description of relevant laws, regulations, administrative orders, etc. relating to
implementation and administration of technical barriers to trade.
The main laws and regulations are the following:
(a) The Seychelles Bureau of Standards Act of 1987 which established the Seychelles Bureau of
Standards whose main functions are:
(i) to promote standardisation in industry and commerce;
(ii) to prepare draft specifications and codes of practice and to declare the standard
specifications and standard codes of practice;
(iii) to make arrangements to provide facilities for the examination and testing of
commodities and any material or substance from which or with which they may be
manufactured, produced, processed or treated and for the manner of suchmanufacture, production, processing or treatment;
(iv) to provide for the testing of commodities manufactured in Seychelles or imported into
Seychelles for the purpose of determinin g whether the commodities comply with the
provisions of this Act or any other law dealing with specifications, etc.
(b) The Plant Protection Act of 1996 which makes provision for preventing the importation and
spread of plant pests and diseases, for better protecting the agricultural and forestry resources
and ecological environment of Seychelles, for regulating the importation of beneficial
organisms, for regulating the export of plants and plant products.
(c) The Export of Fishery Products Act of 1996 which makes provision for the control aud
management of establishments and factory vessels and of the quality of fishery productsintended for export.
2. Information regarding:
(a) Names of publications on work relating to draft technical regulations or standards and
procedures are:
(i) Seychelles Bureau of Standard Bulletin;
(ii) Official Gazette of the Republic of Seychelles.WT/ACC/SYC/8
Page 33
(b) The name and address of the inquiry point(s) foreseen in Articles 10.1 and 103 of the
WTO Agreement on TBT with an indication  as to whether it is/they are fully
operational.
(i) Trade and Commerce Division
Ministry of Finance and Communications
P.O. Box 313, VictoriaRepublic of Seychelles
(ii) Seychelles Bureau of Standards (SBS)
P.O. Box 953, Victoria
Republic of Seychelles
Both government bodies are fully operational.
(c) The name and address of the agency dealing with consultations as foreseen in Article 14
of the Agreement.
Trade and Commerce Division
Ministry of Finance and Communications
P.O. Box 313, Victoria
Republic of Seychelles
(d) The name and address of agencies that a re dealing with other specific functions foreseen
in the Agreement.
Please see our replies to (b).
(e) The scope of responsibility of the centra l government authorities in the area of the
notifications requirement foreseen in Article 10.11 of the Agreement and of individual
government authorities, if the responsibility is divided among two or more suchauthorities.
Does not apply.
(f) Measures and arrangements to ensure that national and sub-national authorities
preparing new technical regulations or substa ntial amendments to existing ones, provide
early information on their proposals.
Also does not apply.WT/ACC/SYC/8
Page 34
ANNEX 3
Questionnaire on State-Trading
The following enterprises are autonomous from th e Seychelles Government to enter into all
commercial transactions and their functions seem to fall into the sphere of the provisions of
Article XVII.
I. Enumeration of State-Trading Enterprises
(a) Seychelles Petroleum Company (SEYPEC)
HS Coding Description of Goods
27.10 Petroleum oils and oils obtained from bituminous
minerals, other than crude.
27.11 Petroleum gases and other petroleum hydrocarbons
(b) Seychelles Marketing Board (SMB)
HS Coding Description of Goods
02-01 to 02.10 Meat and edible meal offal
04.01 to 04.08 Dairy produce
07.01 to 07.14 Edible vegetables and certain roots and tubers
08.03 to 08.14 Edible fruits and nuts, peel of citrus or melons
10.06 Rice1101.1000 Plain wheat or meslin flour
1701.1100 to 1701.1200 Raw sugar not containing added flavouring or colouring
matter
17.01 to 9300 Other refined sugars (including brown sugar)
20.09 Fruit juices and vegetable juices2103.2000 Tomato ketchup and other tomato sauces
II. Reason and Purpose for Introducing and Maintained State-Trading Enterprises
(a) Seychelles Petroleum Company (SEYPEC)
SEYPEC maintains a stable and adequate s upply of the archipelago in petroleum and
petroleum products.  It is responsible for ensuring national defence and also holds petroleum stockagainst any emergency situations.  For example,  the Gulf War strengthened the necessity for
Seychelles as a small island State to have a State-trading enterprise in this sensitive field.WT/ACC/SYC/8
Page 35
(b) Seychelles Marketing Board (SMB)
The main and only purpose of the SMB is to look after the food security requirements of the
remote archipelago.  The other main purpose of the SMB is to provide stability and predictability of
price development through elimination of excessive price fluctuations in order to protect the less
fortunate of the Seychelles populations.
III. Description of Functioning of State-Trading Enterprises
(a) Seychelles Petroleum Company (SEYPEC)
1. SEYPEC has exclusive rights to import and re-export petroleum, petroleum products and
gases.
2. Private traders are not allowed to import and re-export petroleum and petroleum products.
3. The quantities to be imported depend on the supply-demand situation of the archipelago.
4. The export prices are based on world market prices.  The mark-up on imported petroleum and
petroleum products are fixed in the Trades Tax Regulations.
(b) Seychelles Marketing Board
1. SMB has exclusive rights to import and wholesale the essential, and basic commodities
mentioned at 1(b) of Annex 3.
2. SMB has no monopoly in the export field.
3. Private traders are not allowed to import the above products for the moment.  There is free
competition between private traders and SMB at the retailing level.
4. The quantities to be imported depend on the domestic demand.
5. The mark-ups for these products are fixed in the Trades Tax Regulations.
6. SEYPEC and SMB can negotiate long-term contracts with any foreign suppliers.  State-
trading methods used by the Seychelles' Government are not used to fulfil control obligationsentered into by it.
IV. Statistical Information
(a) Seychelles Petroleum Company (SEYPEC)
1992 1993 1994
(Thousand rupees) (Thousand Rupees) (Thousand Rupees)
Mineral Fuels* 168,419 175,554 162,301
*Aviation spirit, motor spirit, jet fuel, gas oil, fuel oil and other.
__________