RESTRICTEDWORLD TRADE
ORGANIZATIONWT/ACC/LAO/4
2 October 2003
(03-5178)
Working Party on the
Accession of Lao PDROriginal:  English
ACCESSION OF THE LAO PEOPLE'S DEMOCRATIC REPUBLIC
Questions and Replies
In a communication received on 16 July 1997, the Government of the Lao People's
Democratic Republic (hereafter referred to as the "Lao PDR") applied for accession under Article XII
of the Agreement Establishing the World Trade Organization (WTO).
At its meeting on 19 February 1998, the General Council established a Working Party
(WT/ACC/LAO/2) with the following terms of reference "To examine the application of theGovernment of the Lao People's Democratic Republic to accede to the World Trade Organization
under Article XII and to submit to the General Council recommendations which may include a draft
Protocol of Accession."  The membership is open to all WTO Members indicating their wish to serve
on the Working Party.
In document WT/ACC/LAO/3, Members were invited to submit questions in writing
concerning the foreign trade regime of the Lao PDR.  The initial questions submitted by Members and
the replies thereto, provided by the authorities of Lao PDR, are reproduced hereunder.
_______________WT/ACC/LAO/4
Page i
TABLE OF CONTENTS
II. ECONOMY, ECONOMIC POLI CIES AND FORE IGN T RADE ......................................1
2. Economic Policies............................................................................................................ ..........1
(a) Main directions ............................................................................................................. ............1
(c) Foreign exchange and payments system .................................................................................3
(c) Foreign and domestic investment policies ..............................................................................4
(f) Privatizati on polic ies...................................................................................................... ...........7
III. FRAMEWORK FOR MAKING AND ENFORCING POLICIES AFFECTING
FOREIGN TRADE IN GOODS AND TRADE IN SERVICES ...........................................9
1. Powers of executive, legislative and judicial branches of government.................................93. Division of authority between centr al and sub-central governments...................................9
4. Any legislative programmes or plans to change the regulatory regime.............................10
6. Description of judicial, arbitral or administrative tribunals or procedures, if any..........11
IV. POLICIES AFFECTING TRADE IN GOODS ...................................................................13
1. Import Regulation............................................................................................................ .......13
(a) Registration requirements fo r engaging in importing.........................................................13
(b) Characteristics of  national tariff .......................................................................................... .18
(c) Tariff quotas, ta riff exemptions............................................................................................ .19
(d) Other duties and charges, specifying any charges for services rendered ..........................19
(e) Quantitative import restrictions, including prohibitions, quotas and licensing
systems ........................................................................................................................ .............20
(f) Import licensing procedures ................................................................................................. .23
(h) Customs valuation........................................................................................................... ........27
(i) Other custom s formal ities ................................................................................................... ...31
(j) Pre-shipment  inspect ion ..................................................................................................... ....31
(k) Application of internal taxes on imports ..............................................................................31
(l) Rules of  origin ............................................................................................................. ............34
(m,n,o) Anti-dumping, countervailing duty and safeguard regimes ...............................................34
2. Export Regulation............................................................................................................ .......35
(b) Customs tariff nomenclature, types of duties, duty rates, weighted averages of
rates.......................................................................................................................... ................35
(c) Quantitative export restrictions, including prohibitions, quotas and licensing
systems ........................................................................................................................ .............35
(d) Export licensing procedures................................................................................................. ..36
(g) Export performance requirements........................................................................................37
3. Internal policies affectin g foreign trade in goods.................................................................37WT/ACC/LAO/4
Page ii
(a) Industrial policy, including subsidy policies.........................................................................37
(b) Technical regulations and standards, including measures taken at the border
with respect  to imports ....................................................................................................... ...37
(c) Sanitary and phytosanitary measures, including measures taken with respect to
imports ........................................................................................................................ .............43
(d) Trade-related inve stment measures ......................................................................................45
(e) State-tradi ng practices ..................................................................................................... ......46
(f, g) Free zones, free economic zones .......................................................................................... ..47
(l) Government procurement practices .....................................................................................48
4. Policies affecting foreign tr ade in agricultu ral products.....................................................48
V. TRADE-RELATED INTELLECTUAL  PROPERTY REGIME.......................................61
1. General...................................................................................................................... ...............61
(a) Intellectual pr operty policy................................................................................................ ....61
(b) Responsible agencies for policy formulation and implementation.....................................62
(c) Membership of international intellectual property conventions and of regional
or bilateral agreements........................................................................................................ ...64
2. Substantive standards of protection, in cluding procedures for the acquisition
and maintenance of intelle ctual property rights ..................................................................64
(a) Copyright and related rights................................................................................................ ..64
(e) Patents..................................................................................................................... .................65
4. Enforcement .................................................................................................................. ..........68
(a) Civil judicial pro cedures and remedies.................................................................................68
(b) Provisional  measures ........................................................................................................ ......69
(c) Any administrative procedures and remedies......................................................................69
(d) Any special bo rder measures ................................................................................................. 70
5. Laws, decrees, regulations and other legal acts relating to the above................................71
VI. TRADE-RELATED SE RVICES RE GIME .........................................................................71
1. General...................................................................................................................... ...............71
3. Market Access and National Treatment ...............................................................................89
VII. INSTITUTIONAL BASE FOR TRADE AND ECONOMIC RELATIONS
WITH THIRD COUNTRIES ................................................................................................89
1. Bilateral or plurilateral agreements relating to foreign trade in goods and trade
in services.................................................................................................................... .............89
2. Economic integration, customs union and free-trade area agreements.............................90ANNEX 1:  STATISTICS  AND PUBLI CATIONS ..........................................................................90WT/ACC/LAO/4
Page 1
II. ECONOMY, ECONOMIC POLICIES AND FOREIGN TRADE
2. Economic Policies
(a) Main directions
- Development objectives
Question 1One of the key development objectives of the Lao PDR identified in document WT/ACC/LAO/3
is to expand agricultural production in all sectors, achieve self-sufficiency in rice production,
and foster the "promotion of food products for export, including vegetables, livestock and
commercial crops such as coffee."  Has the Lao PDR reviewed these goals in light of WTO
provisions, e.g., the Agreement on Agriculture?  What specific programs does the Lao PDR
contemplate establishing in this regard?
Answer:
We have already started to review the development programs.  It is too soon to report on the results.
The provisions of the WTO Agreement on Agri culture will be taken fully into account.
- Pricing Policy
 Question 2
Is the price of any of the 20 products listed currently being regulated?
Answer:
Yes, but currently the number of products listed has increased to 30, namely:
1. Fuel and gas
2. All kinds of steel for
construction
3. Cement
4. Roof floor and wall
tiles
5. Zinc
6. Sawn wood7. All kinds of paint for
houses
8. PVC pipes
9. Tractors10. Water pumps
11. Thrashing machines
12. Fertilizer.13. Animal feed
14. Milling machines
15. Rice mills
16. Bicycles
17. Motorcycles18. Student clothing
19. Writing tools
20. Raw materials for
factories21. Medicines
22. Rice
23. Sugar24. Soy sauce
25. Fish sauce
26. Monosodium glutamate
27. Vegetable oil
28. Flour29. Meat (cattle swine and
poultry)
30. Sea fish and fresh
water fish
 Question 3
The Lao PDR has reported that it maintains price surveillance of certain products and may
regulate the prices of 20 products.  Please describe how is this regulation accomplished.
 Is the government’s interest in ensuring low prices  to benefit consumers or is the surveillance
and regulation maintained in order to ensure that local production is not undersold by imports?WT/ACC/LAO/4
Page 2
 How is price surveillance and regulation applied to imports?
Answer:
The price surveillance and regulation are implemented in conformity with the Prime Minister’s
Decree No. 207/PM dated 11 October 2001, which entitles the Ministry of Commerce to perform
price surveillance and regulation for goods in general. The decree states that the price of goods in theLao PDR is determined by the market mechanism. However in case of need, any goods can be subject
to price surveillance and regulation, especially if the impact of such price increase seriously affects
the production and the consumers’ cost of living.
The producers or the importers of these goods must then declare the production cost or purchase price
to the price surveillance enforcement officers. In addition, the breakdown of costs for price setting or
mark-up by each trader along the distribution channel should also be submitted for justification. The
price ceilings are then agreed between the traders and the trade authorities. Then the price list of the
goods under surveillance is made public and discrepancies between approved and actual prices should
be notified. Any upward changes in selling price of these goods should be endorsed by the relevant
authorities. Through such analysis, the true causes of high price will accordingly be revealed. The
main purpose is to detect the unfair trade practices as to price fixing. Unfair trade practices, which
cause price rise will be subjected to administrative or legal actions as appropriate, whereas priceincrease due to market failures will be addressed by economic measures by the Government.
The government’s interest in ensuring low prices is not only to benefit consumers, but the producers’
interest is also taken into account.
The price surveillance and regulations that appl y to imports apply in the same way to local
production.
Question 4
Does the Lao PDR have any plans to reduce the number of products subject to price controls?
While noting that price controls are applied neut rally to imported and domestic products, could
the Lao PDR advise how it intends to give effect to paragraph 9 of Article III of GATT 1994
that requires WTO Members to take account of th e interests of exporting countries in applying
such price controls?
Answer:
The current practice of price control has been reintroduced since the country is hit by high inflation
from mid 1997. Since the year 2000, macroeconomic stability has been restored, but the monitoring
and regulatory mechanism must be put in place in order to ensure price stability. The present number
of products under price surveillance and regulation are thirty. The necessity and intensity to practice
such surveillance depends on the overall economic situation.
Since price controls are applied neutrally to imported and domestic products, the Lao PDR firmly
believes that the interest of exporting countries is being duly taken into account.WT/ACC/LAO/4
Page 3
(c) Foreign exchange and payments system
Question 5
Please clarify if foreign and domestic individuals and firms in the Lao PDR may purchase and
hold foreign exchange without a requirement to convert to local currency.  Are exporters
allowed to keep their export receipt s without mandatory conversion quotas?
Answer:
According to the Decree Law No. 01/OP, dated 9 August 2002, governing the management of foreign
exchange and precious metals, foreign and domestic individuals and firms in the Lao PDR can hold
and keep their own foreign exchange in their bank  accounts with the Lao PDR. When they need to
pay in the Lao PDR, they have to convert into Laotian Kip (LAK). Exporters in general, are allowed
to keep the proceeds from their export in their foreign currency bank account. Referring to the
regulation on transaction of Export wood No. 01/ BOL, dated 5 January 2000 wood product exporters
are required to sell a portion of their foreign exchange earnings to a state owned commercial bank for
the logs 100 per cent, for timber 80 per cent and the wood product 60 per cent of export proceeds.
 Question 6
Please confirm the level of convertibility of the Lao PDR Kip.
Answer:
The Kip (LAK) is not convertible.
Question 7
Does the government provide any foreign exchange for any designated purpose?  If so, does the
price differ from that available on the market?
Answer:
The government does not provide foreign exchange for any designated purpose, other than selling
foreign exchange to the central bank at the prevailing market price.
Question 8
Please update the information on the Lao PDR’s relations with the IMF and its status under the
Articles of the Fund.
Answer:
Since the Lao PDR became a full member of the IMF on 5 July 1961, it has received program loans
on concessional terms with repayment period of more than 10 years.
The quota of Lao PDR is currently at SDR 52.9 mil lion (equivalent US$67 million), an increase from
SDR 39.1 million (equivalent US$58 million). Since 5 July 1980, the Lao PDR has received
4 program loans in an amount equivalent to SDR 100.23 million (equivalent US$107.2 million) as
follows:WT/ACC/LAO/4
Page 4
- Stand-by loan with an amount of SDR 14 million for one year from 8 April 1980, to
8 December 1981;
- Structural Adjustment Facility (SAF) loan with an amount of SDR 20.51 million
(equivalent US$28.5 million) for three years from 18 September 1989, to
17 September 1992;
- Enhanced Structural Adjustment Facil ity (ESAF) with an amount of SDR 35.19
million (equivalent US$48.5 million) for 3 years from 4 June 1993 to 7 May 1997;
- The Poverty Reduction and Growth Facility (PRGF) with an amount of SDR 31.7
million (equivalent US$40.2 million) in seven equal semi-Œ-annual instalments for
3 years from 2001-2004. The Board of the Fund approved the first tranche release for
the Lao PDR under the PRGF arrangement in 23 April 2001 and the second tranche
was released on 25 February 2002 after the completion of the first review. The thirdtranche was released on 9 September 2002 after the second review was completed.
The Fund Mission is coming for the third review during 28 July - 6 August 2003 and
the Board meeting which is expected to approve the fourth tranche release will be
held in the second week of September 2003.
Apart  from program loans, the Lao PDR has also received technical assistance from the IMF in the
form of training course for Lao officials both inside and outside country every year, provision of
technical consultants to some departments of the Bank of the Lao PDR and economic advisors to the
Bank of the Lao PDR.
Question 9
Please update the Working Party on the discussions with the IMF concerning the application of
Article VIII.
Answer:
The Lao PDR continues to avail itself of the transitional arrangements of Article XIV, section 2, of
the IMF Articles of Agreement.
From the discussions with the IMF in connection with the Poverty Reduction and Growth Facility
(PRGF), the Lao Government agreed to create the conditions to enable the removal of the remaining
exchange restrictions on current international transfers and payments by the end of the PRGF
Arrangement period (2001-04) to pave the way for acceptance of the obligations of Articles VIII,
Sections 2,3 and 4 of the IMF’s Articles of Agreem ent. The government plans to request technical
assistance from the IMF to review the exchange system to ensure that the new foreign exchange
decree-law and implementation regulations are free of restrictions on current international payments
and transfers.
(c) Foreign and domestic investment policies
 Question 10
Document WT/ACC/LAO/3 states that the Domestic Investment Promotion Law (DIPL) lists
priority sectors for investment which are iden tified "in the socio-economic development plan,
enterprises which will promote exports as well as diversification of domestic production andenterprises located in priority regions."  Please clarify that this law is (a) distinct from the
Foreign Investment Promotion and Management Law, and (b) applies only to investments made
by citizens of the Lao PDR.WT/ACC/LAO/4
Page 5
Answer:
The law on domestic investment promulgated in 1995 defines principles, forms, rules and measures
regarding the promotion and management of domestic investment in order to raise capital and
efficiently use capital and resources. Domestic inve stors who want to invest in any economic sectors
shall apply and register with the Ministry of Commerce according to Article 16 of the business law.
Domestic investment is the investment in production and business activities made by Lao citizens and
foreign residents who are the residents of the Lao PDR .
 Question 11
What sectors, specifically, are identified in the DIPL as "priority sectors"?  What benefits
accrue to investors in these sectors that are not available to other investors?
Answer:
The promoted sectors referred to in the DIPL (Article 12) are agriculture and forestry, processing
industry energy, mining and handicraft, communi cation, transport, construction, tourism, trade,
services, education, culture, public health and others.
Investors in the promoted sectors, large inve stors in promoted zones investments using new
technologies will be considered as promoted investment projects. Those investors will be offered a
package of incentives such as:
- Access to development funds.
- Low interest on medium and long term loans from financial institutions.
- Flat rate of 1 per cent import duties on machinery, equipment and other means of
production.
- 1  per cent import duties on raw materials, semi-finished products for production or
processing for import substitution.
- 20 per cent profit tax for promoted investment projects located in urban areas,
15 per cent profit tax for promoted investment projects in remote areas, 10  per cent
profit tax for projects located in very remote areas. In some case profit tax reduction
or tax holidays are provided.
 Question 12
What level of export promotion qualifies an industry as a "priority sector"?
Answer:
No level of export promotion is required. Export-oriented enterprises qualify as a promoted sector.
Question 13
Does the DIPL provide for trade-related investment measures covered by the WTO TRIMs
Agreement?
Answer:
Yes. The DIPL provides for trade-related investment measures covered by the WTO TRIMs
Agreement.WT/ACC/LAO/4
Page 6
Question 14
Document WT/ACC/LAO/3 also states that the Law on the Promotion and Management of
Foreign Investment was promulgated in 1994.  It opens most sectors for foreign investment, and
provides for tax concessions, including:  personal income tax at 10 per cent; profit tax at 20 per
cent (the domestic rate is 35 per cent);  provisions  to carry forward losses for three years;  and
import tax of only 1 per cent on imports.  Please  clarify whether the "priority sectors" specified
in the DIPL have any relevance for foreign investors under PMFI Law.  Does the PMFI Law
require export balancing or other export perfor mance requirements, or any requirement to use
local goods in the production process in or der to receive approval of the investment?
Answer:
The government of the Lao PDR encourages foreign persons, either individuals or legal entities to
invest in the Lao PDR on the basis of mutual benefit and observance of the laws and regulations of thecountry.
Foreign investors may invest and operate enterprises in all fields of lawful economic activity such as
agriculture and forestry, manufacturing, energy, mineral extraction, handicraft, communications and
transport, construction, tourism, trade, services and others.  Once the investment licence is granted,
foreign investors are entitled to a package of incentives as cited above.
The priority sectors specified in the DIPL law do ar e not relevant to treatment of foreign investors
under the Promotion and Management of Foreign Investment (PMFI) law.
On 23 March 2001, new schedules were attached to the PMFI law (Decree 46/PM).  They specify in
List 1 which activities  are fully open to foreign investment, in  List 2 which activities are open with
restrictions, in List 3 which activities are closed to foreign investment and in List 4 which professionsare reserved for Lao citizens.  The revised Decree is available through document
WT/ACC/LAO/4/Add.1.
Some areas of investment in List 2 are subject to conditions of achieving high levels of export (eg
alcohol and vehicles) and local content.  Details are provided in the attachment.
Question 15
Are investments under the PMFI Law subject to any export performance or use of local content
requirements to receive the tax concessions listed in document WT/ACC/LAO/3?
Answer:
Yes, see the answer to previous question.
Question 16
Is the 1 per cent concessional tariff rate on imports by firms under the PMFI Law applied only
to inputs and capital goods used in manufacturin g or doing business, or does it apply to all
imports by these firms, e.g., those personally co nsumed by firm employees or resold in the Lao
PDR?WT/ACC/LAO/4
Page 7
Answer:
The 1 per cent concessional tariff rate on imports by firms under the PMFI Law does not apply to the
import of personally consumed by firm employees or resold in the Lao PDR.
Question 17
Document WT/ACC/LAO/3 states that investments by foreign-owned entities or joint ventures
must first be approved, and are charged an investment fee of US$500 or US$1,000 depending on
the value of the investment.  Why does the Lao P DR charge this fee?  Why is it denominated in
U.S. dollars?
Answer:
Fees and service charges of the Government are based upon a Decree on Fees and service charges in
the Lao PDR No. 02/LPDR. of 27 November 2002, Part  II (Fees), Chapter 01 (Registration Fees),
Article 03 numbering 02.
It is denominated in US dollars, because it is hard currency. Foreign investors can pay an investment
licence fee in local currency (Kip) based on the exchange rate of on date of payment.
 Question 18
Document WT/ACC/LAO/3 also states that once the investment license is purchased, it must be
registered with the Ministry of Finance which charges a fee for that registration equal to 0.1 percent of the value of the investment capital.  Plea se indicate the reason for this fee.  Does this
policy encourage capital investment in the Lao PDR?
Answer:
The fee is charged to earn revenue to support the administration of investment laws.
Question 19
Are any of the above charges applied to domestically funded investments?
Answer:
The fee charged for the registration is also applied to domestically funded investments.
(f) Privatization policies
 Question 20
Document WT/ACC/LAO/3 states that "by 1999, of the 777 registered companies in the Lao
PDR, 55, (7 per cent), were state-owned," and that "the economic significance of the state-
owned sector in the Lao PDR is now similar to that in many market economies."  Please list the
State owned enterprises in the Lao PDR and indicate what products or services they provide,
noting any State owned enterprise that engages extensively in international trade.  Which of
these firms does the Lao PDR expect not to privatise?
Answer:
By 2002, the number of state-owned enterprises had reduced to 38.  The list is as follows:WT/ACC/LAO/4
Page 8
No. Names Products or services Competition
1 National Tourism Tourist services Yes
2 Lao Trade Import-Export As the name implies Yes
3 Lao International Import-Export As the name implies Yes
4 Technical and Equipment Providing As the name implies Yes
5 Lane Xang Development Co., Ltd Import-Export Yes
6 Lao State Fuel Co. Petroleum Yes
7 Lao International Trade Services Import-Export Yes
8 Education Printing Enterprise As the name implies Yes
9 Education Equipment Printing Educational equipment Yes
10 Electricite’ du Laos Electricity No
11 Balit Exploration Co. As the name implies No
12 Lao Cotton State Enterprise Textile products Yes
13 Lao Concrete Co. Concrete Yes
14 State Printing General printing services Yes
15 Pharmaceutical No.2 manufacturers and suppliers Yes
16 Pharmaceutical No.3 manufacturers and suppliers Yes
17 Lottery Co. As the name implies No
18 Lao Labor Services Co. As the name implies Yes
19 Banque Pour Le Commerce Exterieur du Laos Banking service Yes
20 Lao Development Bank Banking service Yes
21 Agricultural Promotion Bank Banking service Yes
22 Lao Water Supply Co. As the name implies No
23 La Post du Laos Postal service No
24 Lao Airlines Airline services No
25 Design Communication Institute As the name implies No
26 Road and Bridge Construction No. 8 Co. Construction Yes
27 Construction Materials Survey and Analyses As the name implies No
28 River Transportation Co. As the name implies Yes
29 River Construction and Transportation Co. Construction Yes
30 Communication and Design Co. As the name implies No
31 River survey and Design Co. As the name implies No
32 Consultant Services Co. As the name implies Yes
33 Agricultural Machinery Co. General service Yes
34 Lao Air As the name implies No
35 DAFI Wood processing Yes
36 Agriculture and Industry Development As the name implies Yes
37 BPKP General service Yes
38 Enterprise Telecommunication Lao Telecom services Yes
There is no intention to privatize any of these companies at this stage.
Question 21
Please indicate what portion of the Lao PDR’s GDP is accounted for by the activities of State
owned enterprises.
Answer:
The portion is informally estimated to be around 4 per cent of GDP.WT/ACC/LAO/4
Page 9
III. FRAMEWORK FOR MAKI NG AND ENFORCING POLICIES AFFECTING
FOREIGN TRADE IN GOODS AND TRADE IN SERVICES
1. Powers of executive, legislative and judicial branches of government
Question 22
Concerning the hierarchy of legislation in the Lao PDR, who can amend the Constitution?  Are
there specific clauses in the Constitution related to international trade?
Answer:
According to Article 80 of the Constitution of the Lao PDR, only the National Assembly has the right
to amend the Constitution. Although no specific clause of the Constitution stipulates international
trade, Article 18 determines “The State directs and encourages the development of multiform
economic relations with foreign countries based on the principle of mutual respect of independence,
sovereignty, equality and mutual interest”.
Question 23
What is the place of international agreements in the hierarchy of law?
Answer:
According to the Hierarchy of the Law in the Lao PDR, the Constitution is first and the Law is
second.  In principle, treaties and international agreements which have been ratified and which amendor promulgate new domestic laws are classified in between the Constitution and Law.
Question 24
What is the relationship of Edicts to Laws?  Can an Edict supersede a Law?  Must the entire
National Assembly eventually ratify an Ed ict proclaimed by the Standing Committee?
Answer:
An Edict is a legal document that is similar to a Law but according to the Hierarchy of the Law, it is
below the Law.  An Edict is submitted by the Standing Committee of the National Assembly to the
President for promulgation.  Only Edicts which amend some articles of law in the case of necessity
and emergency must be sent to the National Assembly to be adopted as Law.
Question 25
Must Presidential and Prime Minister’s Decrees or Orders be based on specific Laws or Edicts?
Answer:
Presidential and Prime Ministerial Decrees or Orders must be based on specific Laws or Edicts
because these Laws or Edicts create rights to issue Decrees or Orders.
3. Division of authority between central and sub-central governments
Question 26
Do local authorities have a role in setting and/or administering trade policies?WT/ACC/LAO/4
Page 10
Answer:
Policies are set by the Central Government and, in some areas, are administered by local authorities.
Question 27
Could the Lao PDR advise whether Provinces, Prefectures and Zones have authority to impose
policies and measures that affect trade?  Do  Provinces, Prefectures and Zones apply trade
measures in practice?  If so, what action does the central government intend to take to ensure
that all measures applied within the Lao PDR will be in conformity with WTO requirements?
Answer:
Provinces, Prefectures and Zones have no authority to make policies that affect trade. Only the central
authorities, in particular the Ministry of Commerce, can make policies. Provinces, Prefectures and
Zones implement the policies and measures.
To ensure that trade policies issued by the central government are properly implemented, Provinces,
Prefectures and Zones are required to regularly report at one, three, six month and annual intervals.
The Ministry of Commerce also sends committees to examine the implementation of trade policies by
local authorities and to collect relevant data and information.
Question 28
Do any of the sub-central entities in the Lao PDR have powers to tax, grant subsidies, or
regulate trade independently of the central authoritie s?  If so, is this authority conferred by the
Constitution or by law?
Answer:
The sub-central entities can tax in accordance with th e assignments of the central authorities, but these
sub-central entities do not have powers to set tax rates, grant subsidies and trade independently of thecentral authorities.
Question 29
How would the central authorities address a situation where an importer or exporter
complained that a sub-central entity was violating WTO provisions?
Answer:
On accession to the WTO, the Lao PDR will enact provisions which enable it to meet its obligations
to ensure that sub-central authorities comply with WTO obligations. Central authorities would have
the right to order sub-central entities to suspend measures which violate WTO provisions.
4. Any legislative programmes or plans to change the regulatory regime
Question 30
We note from Section III.4 of the Memorandum th at there have been no new laws promulgated
in recent years, and that the Lao PDR acknowled ges in Section III.6 that the judicial system
needs strengthening.  Improvement of the legal sy stem in the Lao PDR would have a significant
positive impact on the attractiveness of the Lao PDR as an investment destination, as well asWT/ACC/LAO/4
Page 11
facilitate implementation of future WTO obli gations.  Could the Lao PDR provide detailed
information on its plans to strengthen and impr ove the legal system in the Lao PDR, including
its plans to promulgate new laws to give effect to WTO rules?
Answer:
The Plan for Building New Laws and Amendment of  Laws (2001- 2006) set out the general program
for reform of Laws in the Lao PDR.  In the case of accession to the WTO, laws which relate to WTO
accession have been reviewed and areas where changes are necessary have been identified.  Some
laws, such as the Customs Law, have already been amended in draft form to anticipate accession to
WTO.
6. Description of judicial, arbitral or administrative tribunals or procedures, if any
Question 31
Document WT/ACC/LAO/3 states that the Lao PDR "does not have legislation which provides
specific rights of appeal on actions by government  bodies in the area of trade" but that the
Prime Minister’s Office will receive complaints.  It is also noted that the 1994 Decree on the
Resolution of Economic Disputes "provides a mechanism for the resolution of economic
disputes (disputes arising from business operations, agricultural production, commercial
transactions and other economic activities) and has established the Office of Economic DisputesResolution (OED).  Economic disputes may be brought into OED within three years of the date
from which the disputes arose.  The Decree provides detailed procedures for dispute resolution
including mediation and arbitration."  To which part of the Government does the Office of
Economic Disputes report?
 Do the "economic disputes" it adjudicates include complaints or appeals against decisions of the
Customs Service (e.g., customs valuation and classification, application of tariffs and customs
fees), the Ministry of Commerce and Tourism license s), or the Ministry of Health or the Science,
Technology and Environment Agency in the Prime Minister’s Office, i.e., authorities
responsible for IPR, TBT, and SPS requirements?
Answer:
The Office of Economic Dispute Re solution (OEDR) is a department of the Ministry of Justice.
Therefore, OEDR has to report its activities to the Minister of Justice.  “Economic disputes” do not
include complaints or appeals against decisions of the Customs Service, the Ministry of Commerce or
the Ministry of Health.
Question 32
Is there any recourse from administrative rulings on trade issues to the court system?
Answer:
It may occur but it is rare.
Question 33
Is there any plan to establish administrative tribunals?WT/ACC/LAO/4
Page 12
Answer:
There are no plans to establish an administrative tribunal at this stage.
Question 34
Please elaborate on the Lao PDR’s plans to strengthen the judicial system in the context of
providing the right of appeal to an independent tribunal in matters covered by the WTO.
Answer:
In longer term thinking about future development of the law system, the idea of an independent
commercial tribunal or trade court is under consideration.
Question 35
Please describe in detail the appeal procedure against actions taken by governments in the area
of trade.
Answer:
At present, the Lao PDR does not have law that provides specific rights of appeal on actions taken by
government bodies on general trade issues.  The Customs Law provides rights of appeal on customs
decisions (see answers 35 and 36) and the Decree on Patents provides for judicial challenge on patents
(see answer 191).  In addition, the right of appeal can be exercised through administrative procedure
by lodging complaints with the Prime Minister’s Office.
Question 36
Please describe the right of appeal of importers  and exporters in the Lao PDR within Ministries
of administrative decisions taken by the author ities on issues covered by WTO provisions, e.g.,
customs valuation; classification; application of tariffs, taxes  and customs charges; licensing or
other non-tariff measures, intellectual property  rights, etc.  Please cite relevant legal
instruments that establish this right.
Answer:
As mentioned in the answer to question 35, importers and exporters can lodge their complaints
through the Prime Minister’s Office to the Government.  Article 23 of the Customs Law enables
importers to appeal to the investigation committee of the Customs Department if they are dissatisfiedwith the decisions of customs officers.  Decisions by the Committee can be further appealed to the
Ministry of Finance or judicial courts. (Refer to  Annex 4 of WT/ACC/LAO/3.)  For details of appeals
on patent decisions see the previous answer.
Question 37
The Lao PDR does not have administrative tribunals nor legislation providing specific rights of
appeal on actions by government bodies in the area of trade.  Would the Lao PDR please
provide details on the operation of the right of appeal available through the Prime Minister’s
Office?  Would the Lao PDR also advise in wh ich other areas, procedures establish official
rights?  Does the Lao PDR intend to promulgate legislation to provide for administrative
tribunals and rights of appeal on actions by government bodies in the area of trade?WT/ACC/LAO/4
Page 13
Answer:
Please see the answers to questions 33, 34 and 36.
- Relation with WTO Agreements
Question 38
Document WT/ACC/LAO/3 states that "In the event of conflict with domestic regulations, the
WTO Agreements will prevail."  How would such a conflict be communicated to the
Government, e.g., would someone have to complain, or would the Government act
independently to reconcile domestic legislation with WTO Agreements if it were brought to its
attention outside of a legal appeal process?
Answer:
As part of the accession process, where the national secretariat for WTO accession of the Lao PDR
finds that any domestic regulation in conflict with WTO Agreements, it will report to the Governmentfor appropriate actions to ensure compliance. After the accession, normal legal and administrative
processes will apply.
Question 39
In the absence of specific laws in place to implement WTO provisions, how would the
Government act to enforce WTO provisions?  Would a ruling from the Office of EconomicDisputes be necessary to secure government action?
Answer:
The Lao PDR intends to amend laws to implement WTO provisions.
IV. POLICIES AFFECTING TRADE IN GOODS
1. Import Regulation(a) Registration requirements for engaging in importing
Question 40
 Document WT/ACC/LAO/3 describes the requirements for firms seeking to import and export.
These include the following:
− register as import and export companies with  the Department of Internal Trade in the
Ministry of Commerce and Tourism (MOCT), as provided for in Ministerial Decree
"Authorization of Import and Export Business" No 462/MOC of 8 December 1993,
complemented by the Business Law (Law N o. 3/NA of 18 July 1994) and regulations in
Notification 750/MOC of 6 August 1996 pursuant to the Business Law;
− meet the industrial development priorities set out in the Socio-Economic Plan current at
the time of application, currently the period 1995-2000; and
− meet eight criteria as follows:  (1) meet th e required size of authorized capitalization,
determined on the basis of import or export goods category and have a warehouse
available; (2) provide a list of retail outlets which will market the imports; (3) import
only for ones own business and not as a commission agent on behalf of anotherWT/ACC/LAO/4
Page 14
enterprise; (4) ensure that their imported goods bear the importer’s name on the label
as a precaution against smuggling; (5) if im porting fuel and medicines, demonstrate the
expertise and technical infrastructure to ma rket the goods; (6) abide by the Accounting
Law (No. 12/90PSA of 29 December 1990); (7) abide by the Tax Law and Customs Law
(No. 95/NA of 14 October 1995) and (No. 4/94/NA of 18 July 1994); (8) conduct allimport and export transactions through a registered bank.
 Please confirm that these requirements exist;  that they are unique for firms or individualsseeking to import;  and that firms involved only in the distribution of domestic products are not
required to meet these requirements.
 If this is the case, it would appear to be a violation of Article III of the GATT, which indicatesthat imported products shall be accorded treatm ent no less favorable than  that accorded to like
products of national origin in respect of requirements affecting, inter alia , their distribution.
Such a multiplicity of unique requirements could constitute "less favorable" treatment.
Answer:
Regulations governing registration of business invo lved in domestic and foreign trade have been
replaced.
The terms of registration by a business wishing to import or export are now set out in the Decree on
Goods Trading Business No. 206/PM of 11 October 2001.  This replaces the Regulations which
previously governed registration of businesses wishing to conduct wholesale trade (No. 463/MOC)
and retail trade (No. 464/MOC).
The Decree on Export and Import No. 205/PMO, dated 11 October 2001, determines policy which
licences implement. It replaces the Decree No. 462/MOC of 8 December 1993 on the Authorization ofthe Operation of Export-Import Business.  Notifications which specify what products are in the
prohibited category and what are in the controlled category are issued annually.  The current
notification is 0202/MOC.FTD of 14 Feb 2003.  Its te rms are set out in the answer to question 111.
The new provisions are available through document WT/ACC/LAO/4/Add.1.
Import licensing procedures were revised to support national policies to manage the extended impact
on the Lao PDR economy of the Asian currency crisis. The measures are applied on particular
products to maintain economic stability, security, social order, traditions and preservation of culture
and other benefits.
There is also a requirement in place under the Trade Balancing Policy that has the effect of requiring
importers to export goods as a condition for obtaining an import licence. The objective of the policy is
to encourage domestic production and to promote exportation to earn foreign currency revenue in
order to address the current trade deficit, inflation, and economic instability.
Some licensing is automatic – once a licence is given, approval to import is automatic – some is not.
Terms for licences are developed on a case by case basis.
The rationale for the import licensing system is:  to ensure that the licences will be issued according to
Decree no. 205/PM of 11 October 2001;  to monitor and collect data on importation of goods,
particularly strategic/controlled products;  to obviate the impact on domestic production and thebalance of payments; and to monitor and manage the importation of prohibited goods.WT/ACC/LAO/4
Page 15
However, these measures are applied temporarily.  Article 5 (paragraph 2) of the Decree 205/PMO
states that:
“The measures of control specified in this article, which may be in conflict with the laws and
regulations of the international trade systems that the Lao PDR is committed to or is a
member of, will be cancelled.”
The Government is reviewing what action to take to ensure measures in the future to conform to WTO
rules.
Question 41
What other licenses or permits, if any, would a firm or individual need to import?
Answer:
If a good in the prohibited category is to be imported, approval is required as well from the technical
agency concerned.
Question 42
Which procedures have to be followed if a co mpany decides to expand the scope of its business
to other products once it is already registered?
Answer:
If a company would like to expand the scope of its business once it is registered, there are following
procedures:
- Seek consultation with authorities responsible for the areas to which it is proposed to
extend the scope of business.
- Submit an application stating the purpose to the Business Registration Division of the
Internal Trade Department of the Ministry of Commerce.
Question 43
In order to obtain the import registration, the importer must also be the distributor of the goods
imported.  Is this understanding of Lao's registration requirements correct?  If yes, what is its
rationale?
Answer:
No, it is not correct. Under the Decree No. 205/PM  of 11 October 2001, a business can register solely
as an exporter and/or importer.
Question 44
Document WT/ACC/LAO/3 also states that a foreign owned or joint venture firms must also
secure:
− approval from the Foreign Investment Cabinet;
− approval from the Committee for Investment and Co-operation; and
− registration with the Ministry of Finance.WT/ACC/LAO/4
Page 16
 Please indicate whether these requirements are fo r all foreign invested firms or only for those
wishing to import or export.
Answer:
These requirements apply to all foreign investment firms.
Question 45
The Socio-economic Development Plan identifies nine categories of imports and ten categories
of exports important to the Lao PDR’ economy.  Please clarify whether products not covered by
these categories can be imported or exported.
Answer:
Products which are restricted or controlled for export or import are set out in the Decree
No. 205/PMO dated 11 October 2001 and the Notification No. 0202/MOC.FTD dated
14 February 2003.
Question 46
According to the Agreement on Import Licensing  Procedures, importers should not be required
to approach more than three administrative bo dies in order to get a license.  Prospective
importers to the Lao PDR, however, are required to contact four administrative bodies as a
prerequisite for applying for a license.  What  steps is the Lao PDR prepared to take to
streamline the requirements for the right to import for foreign invested firms?
Answer:
At present, importers applying for an import licence need to approach not more than three relevant
authorities, depending on the goods to be imported:
- Prohibited goods: must be approved by 3 authorities: 1) related authority for technical
certification, 2) the Prime Minister for approval and 3) commercial authority for
import license;
- Import-controlled goods: must be approved by 2 authorities: 1) the related authority
where there is a need for technical certification and the Ministry of Commerce for the
import licence. Refer to the Regulations on the requirement for import-export licensesNo. 106/MOC.FTD of 25 January 2002;
- Goods not in a. and b.: need only an import licence from the Ministry of Commerce.
Question 47
Concerning the 8 criteria that firms must meet in  order to register to import or export, what is
the reason for the requirement that the license ap plicant may not act as a commission agent for
another firm?  What is the reason for the require ment that the imported goods bear the name of
the importer on the label.  Ho w does this prevent smuggling?
 Requiring that the importer’s name on a label affixed to every imported good appears to
constitute a requirement for the distribution of imports that does not exist for domestic
producers, and would appear to violate the national treatment provisions of Article III of the
GATT.WT/ACC/LAO/4
Page 17
Answer:
The 8 criteria have already been abolished pursu ant to the Decree on Import Export No. 205/PMO of
11 October 2001.
Question 48
The Lao PDR applies ad valorem  licensing fees in this process.  Such fees are not related to the
cost of the service rendered and therefore may be a violation of GATT Article VIII.  To the
extent that these fees are unique to importers and do not reflect a valid service fee, i.e., related
to the cost of the service, they also constitu te discriminatory non-tariff tax on imports that
should be eliminated or altered to meet WTO norms.
Answer:
The fee charged is LAK5,000 (US$0.50) for the application form.  It is not indirect protection or
taxation for fiscal purposes.
Question 49
The Lao PDR states that there is a registration fee of 34,000 Kip to register as an importer with
the Department of Internal Trade in the Minist ry of Commerce and Tourism.  There is also a
minimum US$500 fee for getting an investment license and a 0.1 per cent of capital registration
fee for registering with the Ministry of Finance for tax purposes.  Domestic producersapparently are not required to register with all of  these ministries, and are not subject to these
fees.  Please confirm that the fees and requi rements described above are uniquely applied to
importers and not required of domestic producers.
Requiring this lengthy registration process and additional fee structure for the right to import
acts as a deterrent to importing, and would appear to violate Articles III (national treatment)and XI (non-tariff barriers to trade).
Answer:
The fee to register as an importer (LAK34,000 – US$3.40) is an administrative fee.  It is too small to
impede trade.  The investment licence (and the charges for it) is unrelated to trade.
Question 50
Lao charges different fees and ad valorem  fees for the approval of foreign investments
depending on the value of the investment itself.  This seems to contradict the principle that fees
must reflect the cost of the service rendered.  Which fees are paid by local companies for
registration purposes?
Answer:
Lao PDR is unaware of a WTO obligation requiring fees  for investment approval to reflect the cost of
the service.
Pursuant to the Notification of the Cabinet of the Ministry of Commerce No. 0773 of 14 May 1999.
For registration purposes either local or foreign companies have to pay for the same fees as follows:
Application form for registration LAK 14,000WT/ACC/LAO/4
Page 18
Typing fee for issuing registration certificate LAK 15,000
(b) Characteristics of national tariff
Question 51
Can the Lao PDR confirm that it is now using the HS 1996 nomenclature?
Answer:
The existing tariff nomenclature of the Lao PDR is HS 1992.  As reported in the Memorandum, the
goal was to convert to HS 96 by 2000. However, the ASEAN is introducing a new tariff nomenclature
based on HS 2002 namely: ASEAN Harmonized Tariff Nomenclature (AHTN).  This is to be
implemented  by October 2003. The Lao PDR is wo rking on that target and will apply the AHTN to
trade with the rest of the world.
Question 52
On page 19 under IV 1 (b) Lao PDR indicates that  the tariff is currently transferred to HS96.
− Has this transfer been completed?
− Will trade statistics according to the HS96 nomenclature be made available to the WTO
in electronic form?
Answer:
Please refer to the response to question 51. Trade statistics based on the Harmonized System of
classification are not yet available.
Question 53
Please confirm that the maximum ta riff in the Lao PDR is 40 per cent ad valorem , and that
tariff rates on imported "raw materials" for manufacturing are in the 5-10 per cent range.
Answer:
Yes, we confirm.
Question 54
Please describe how the Lao PDR determines what products are "luxury" goods for the
purposes of assigning a tariff rate.
Answer:
The Lao PDR has determined luxury  goods for the purposes of assigning a tariff rate as: goods which
are not very important to the lifestyle of the majority of the Lao people such as: cosmetics, spirits,
cigarettes, gambling materials, and some kind of vehicles.WT/ACC/LAO/4
Page 19
(c) Tariff quotas, tariff exemptions
Question 55
Lao PDR states that no tariff quota system operates.  Does Lao PDR intend to operate such a
system in future?
Answer:
It is difficult to predict policy in the future, except to say once accession is completed, laws will be
consistent with WTO.
Question 56
The Lao PDR states that all imports of yarns and textiles used in the production of garments are
exempt from tariffs.  Is this measure implemented in  the form of a rebate of tariffs paid on the
imported content of garments being exported, or are tariffs not assessed on such goods if
certified by the importer of their future use?
Answer:
No, we do not use this measure. Importers do not need to pay any duties on imports if they certify the
goods are  for re-export after assembly.
(d) Other duties and charges, specifying any charges for services rendered
Question 57Does the Lao PDR have any customs processing, or other customs fees?
Answer:
No other duties and charges are levied.
Question 58
Are there fees for inspection of imports for technical, quality, or health and safety purposes?
Answer:
The Ministry of health collects the fees for inspection of food and medicine as:
- For medicine:  the fees are LAK 20,000 per invoice.
- For food:  the fees for import permission are 0.05 per cent of total amount of goods
per invoice and the registration for imported products is LAK 50,000 per item.
- Science, Technology and Environment Agency collects fees for quality inspection of
import of fuel, steel bar and cement, equivalent to 0.01  per cent of each import value.
Question 59
Please list all fees, including those for custom s processing, import or export licensing, prior
approvals, inspections, etc., that can be applied to imports.WT/ACC/LAO/4
Page 20
Answer:
There are no other fees.
(e) Quantitative import restrictions, including prohibitions, quotas and licensing systems
Question 60
We note that the Lao PDR appears to apply a number of restrictions to imports which are not
justified under WTO rules, and that the Lao PDR is undertaking a review of these measures.
Could the Lao PDR provide a detailed list of the measures that are currently applied, including
product descriptions, tariff item numbers, quantities of imports that are permitted, the actual
methods used to control imports, and th e WTO justification for the measure where
appropriate? Could the Lao PDR also explain the acti on that it intends to take for each of these
measures to ensure that they conform to WTO rules?
Could the Lao PDR advise whether there is any requirement in place that has the effect of
requiring importers to export goods in order to obtain an import licence?
Answer:
Please see the answers to questions 40, 104 and 111.
Question 61
Notification No. 870/MOC also lists sectors a nd products that are strategic and potentially
subject to state control.  Could the Lao PDR provide details of products that are currently
subject to state control and what form this control takes?
Answer:
The Notification No. 870/MOC is replaced by the Notification No. 0202/MOC.FTD of
14 February 2003. The list of the products is set out in answer 111.
Question 62
Could the Lao PDR provide advice on its plans in relation to the import licensing restrictions on
products such as steel bars, cement and motor vehicles, given the WTO requirements to
eliminate quantitative import restrictions?
Answer:
The Lao PDR imposes import licensing restrictions on some strategic goods such as: steel bars,
cement, based on the infant industry protection grounds, and to meet socio-economic and
environmental policies for a period of time.
Work is proceeding on a program to make the measures consistent with WTO rules.
Question 63
Document WT/ACC/LAO/3 states that, "Licenses are required for most imports."  Specifically:WT/ACC/LAO/4
Page 21
− Notification No.  870/MOC of 19 Septembe r 1996 bans imports of weapons, right-hand-
drive vehicles, animal parts, addictive drugs, certain medicines, cultural items for
instance (casino equipment, certain publications and audio-visual material and other
products that may offend the Lao culture or corrupt children (such as pornography)),
nominated agricultural products and dangerous goods on national security, publichealth, cultural socio-economic and environmental grounds.
− Notification 870/MOC also lists sectors and products which are strategic and potentially
subject to state control.  These are petroleum products, construction steel, cement, rice,
vehicles, electricity, minerals, tobacco, timber products.
− Certain products are also designated as potentially subject to special control for reasons
of sanitary and phytosanitary protection, the protection of human health and safety, as
well as for security reasons.  These are food products, live animals and plants, fertilizers,cultural goods, communication products, medicines, chemicals, minerals, sporting guns
and sports products.
− Notification No. 1552/MCTPC of 8 July 1996 of the Ministry of Communication,
Transport, Post and Construction Controls provides for restrictions on imports of
motor cycles over 250cc.
− Regulation 462/MOC applies quantitative controls to the importation of fuel and
lubricants, steel bars for construction, all types of cement, all types of motor vehicles
and motorcycles.
 While these provisions may cover most of the L ao PDR’s imports, they don’t appear to cover
most of the tariff lines, i.e., it would appear that, potentially, imports would be possible withouta license.  Is that the case?
 Is this an exhaustive list of the current legal authority to require import licensing, or are there
other Laws, Notifications or Regulations that contain such requirements?
 Please confirm that all of the requirements listed above are non-automatic licenses, i.e.,
approval is required by some authority to import.
Answer:
See the answer to question 40 and question 111.  These lists are comprehensive.   Products which are
not listed in the annual notification of prohibited and controlled products prospectively can be
imported.
Question 64
Notification No. 870/MOC states that Agricult ural products which are produced domestically
such as chillies, aubergines, tomatoes, bananas, sapota, lemons, and "other seasonal fruits" arebanned from importation.  Please list by HS number the agricultural products covered by
Notification No. 870/MOC of 19 September 1996 and indicate more precisely what socio-
economic reasons are referred to in this legislation.
It would appear that this ban is applied solely to protect domestic production.  Please indicate
how the restriction meets WTO requirements.
Answer:
The Notification No. 870/MOC (19 September 1996) has been replaced by the Notification
No. 0202/MOC.FTD, dated 14/02/2003, on import/export prohibition and technical certification.  The
bans on the agricultural products referred to in the question have been lifted.WT/ACC/LAO/4
Page 22
Question 65
Please list all products submitted to quotas or import prohibition and the relevant GATT
justification for the prohibition.  Please specif y what is intended for state control that may
operate on certain products according to Notification 870/MOC.
Answer:
Refer to the answer to question 64.
Question 66
On page 20 (IV.1.(e)) it is stated:  "With respec t to the importation of rice, the right to apply
quotas is reserved for food security purposes, notably when necessary to support the minimum
farm-gate price set by the Lao PDR in order to maintain the country’s productive capacity of
rice".
− What is the minimum farm gate price?
− Are other instruments used to maintain the farm gate price and the country’s
productive capacity?
Answer:
According to the MOCT’s Noti fication No. 1021/MOCT, dated 8 November 2000, the minimum farm
gate price for 2000-2001 is 900 LAK/kg with the purpose to ensure the price stabilization of rice.
To ensure food security and maintain the productive agricultural capacity of the country, particularly
for rice, a variety of other measures are used including distribution policies and stock control.
Question 67
Document WT/ACC/LAO/3 states that the Lao PDR applies "restraints on the import of motor
vehicles and motorcycles". . "for environmental reasons".  Does the Lao PDR import any motorvehicles or motorcycles?  If so, how are the en vironmental reasons for the restraints determined
and applied?
Is there any domestic production of either product?
Answer:
The Lao PDR imports both motor vehicles and motorcycles. The quantitative restriction is applied
based on health and safety and the environmental reasons. Roads, particularly in the cities, are narrow
and congested and most are unsealed. To control traffic congestion and reduce accidents and air
pollution, sales are restricted by high taxes and imports are restricted by quota.
Currently, the Lao PDR has assembly factories of cars and motorcycles. The factories can be
categorized into 3 groups: Complete Knockdown (CKD), Semi Knockdown (SKD), and Incomplete
Knockdown (IKD).
The cars and motorcycle industry is new and the import controls are to help foster the economic
development of the industry which is at an early stage and gradually growing.WT/ACC/LAO/4
Page 23
Question 68
Please update on the review of the import quota system for cars.
Answer:
 See the answer to question 62 and 67.
Question 69
In document WT/ACC/LAO/3, the Lao PDR states that it is developing alternatives to
quantitative restrictions.  Please describe the alternative methods of regulation that the Lao
PDR intends to implement, and indicate the schedule upon which they will be established.
Answer:
Alternative methods of regulation are not in place at present. The Lao PDR is considering this issue.
Question 70
The import and export bans and quantitative measures described in WT/ACC/LAO/3 to
regulate trade would appear to violate Article XI of the GATT.  Please provide a list of all
products, by HS number, that are subject to any form of import prohibition or other form of
quantitative restriction, including non-automati c import licensing, prior authorization, and
quotas.
Please include a reference to the legal basis for the restriction (e.g., Regulation 462/MOC or
Notification No. 870/MOC of 19 September 1996), and, where applicable, what provisions of the
WTO justifies the application of the requirement.
Please indicate how the Lao PDR is preparing to address the potential violations of Article XI
and to revise the current system to bring it into conformity with WTO.
Answer:
 Please see the answer to question 62.
(f) Import licensing procedures
Question 71
Annex 3 of document WT/ACC/LAO/3 states the following:
 For imports other than yarn and textiles used by the garment manufacturing industry and
products listed on the ASEAN Free Trade Area CEPT Inclusion List of the Lao PDR,  an import
license is required for each import.  MOCT operates the system as an automatic licensing
system.  It is administered by the Ministry of Commerce and Tourism through its trade and
tourism offices in the Municipality of Vientian e and the Provinces, subject to the prior approval
of the imports by the relevant line Ministries where technical regulations apply.
 Annex 3 also states:  "The licensing system is administered by the Ministry of Commerce andTourism and covers all products.  Licenses are granted automatically except for imports of fuelsand lubricants, steel bars for construction, casino equipment and rifles and guns for sportingWT/ACC/LAO/4
Page 24
and hunting purpose, all types of cement and all types of motor vehicles.  Imports of these
products require the prior approval of the relevant line Ministry where technical regulations
(health and safety and quarantine) apply."
 Please indicate the legal authority for this pr actice.  Is it Ministerial Decree No. 462/MOC of
8 December 1993?
Answer:
Other than yarn and textiles and products listed in the Inclusion List of the Asean Free Trade Area
framework, the legal authority that governs the licensing system of the Ministry of Commerce
includes the Decree No. 205/PMO of 11 October 2001 and its supplementary Regulation
No. 0202/MOC.FTD of 14 February 2003. They replac e provisions in the Regulation No. 462/MOC,
dated 8 December 1993.
Question 72
Is the approval of "the relevant line Ministries" required for all imports or only for those where
specific "technical regulations apply?"  Can the Lao PDR confirm that for products where
there are no "technical regulations" that the li cense is granted automatically, i.e., upon request
without official discretion?
Answer:
The relevant line Ministries approve only imports subject to technical mandatory regulations.  Where
no technical regulation applies, approval for imports is given by the Ministry of Commerce in
accordance with the processes described in the answer to question 40.
Question 73
What portion of imports in the Lao PDR are not subject to "technical regulations?"
Answer:
Currently we have no data. However, we expect it would be the majority since the technical
mandatory regulations apply to only a few products.
Question 74
Annex 3 states:  "With the exception of imports from ASEAN which are listed on the Lao
PDR’s Inclusion List for the AFTA CEPT scheme , import licensing applies to goods from all
countries."  Do imports from ASEAN listed for AFTA CEPT enter without licenses even if they
are products otherwise subject to "technical regulatio ns"?  If they are subject to licensing, is the
process any different than that applied to imports from other countries?
Answer:
For imports that have to meet mandatory technical regulations, approvals are required to products
from ASEAN and other countries alike.WT/ACC/LAO/4
Page 25
Question 75
Annex 3 states that "Ministerial Decree No. 462/MOC of 8 December 1993 is the principal
instrument under which import licensing administered by the Ministry of Commerce and
Tourism is maintained."  It also states "Licensing is not statutorily required" but goes on to say
that "The Decree and the Notification do not leave product coverage to administrativediscretion."  Does that mean that under Minist erial Decree the Government has discretion as to
whether it applies licenses to imports?
Answer:
According to Article 8 (paragraph 2) of the Decree No. 205/PM, the Ministry of Commerce is
responsible for the issuance of import licence and laying down regulations on application procedures.
However, the Ministry of Commerce has to coordina te with line ministries before issuing the licence
and the Government approval is needed.
Question 76
Are the licenses required for imports of chemicals under Notification No. 1364/95 of September
1995 from the Ministry of Public Health granted automatically, i.e., without discretion, or are
there substantive criteria or "technical regulation s" that must be met to get a license for import
of these products?
Answer:
Yes, the import of controlled chemicals requires licenses because the Lao PDR is a member party of
UN Single Convention on Narcotic 1961 and UN Convention on Psychotropic Substances 1971.
Question 77
Could Lao please explain the rationale of submitting basically each import to import licence
even if of automatic nature?
Answer:
The rationale for the current arrangements for import licensing is described in the answer to question
40.
Question 78
Please describe the procedures used in the Lao PDR for acquiring an automatic import license
and how the license is granted.
Answer:
Any importers fulfilling the conditions of the Decree No. 205/PM can acquire an import licence. The
importers can be asked to submit a annual plan related to items and volume to be imported/exported.
Once a licence is granted on the basis of that plan, every import request is automatically granted at the
border.
Any goods other than those specified in the Notification No. 0202/MOC.FTD of 14 February 2003
fall into the automatic licence category.WT/ACC/LAO/4
Page 26
Question 79
Please list by HS category all imports that require an automatic license.
Answer:
We cannot provide the list by HS category for imports subject to automatic licensing system.
However, any goods other than those specified in Notification No. 0202/MOC.FTD of14 February 2003 (see the answer to question 111) fall into the automatic licence category.
Question 80
 Annex 3 states that "The purpose of non-automatic licensing is to monitor and control the
quantity of imports."  How does this address the issue of licensing applied to enforce "technical
regulations"?
Answer:
Current procedures have been set out in question 40. Import controls continue to be applied where
imports have to confirm to mandatory technical regulations. They generally apply to ensure standards,
specifications, quality and techniques which protect health and safety are satisfied and that quarantine
standards are met.
 Question 81
Please indicate where the Lao PDR publishes the size of quotas administered by licensing, as
required by the WTO Agreement.
Answer:
 Details of quotas are not published.  The Ministry of Commerce notifies the quotas to the provincial
offices of the Ministry which in turn informs the business sectors.
Question 82
The Lao PDR has stated that it is considering alternative methods to licensing and quantitative
restrictions to control imports of steel and auto s.  What alternative methods are contemplated,
and what is the timetable for implementing such an alternative system?
Answer:
The alternative methods are now being discussed.
Question 83
In certain case of non-automatic licensing, it is  stated that alternative methods of management
are under consideration.  Please update the Working Party on the results of this process.
Answer:
See the answer to the preceding question.WT/ACC/LAO/4
Page 27
 (h) Customs valuation
Question 84
The report does not provide a general outline on the customs procedures that are available to
the importer such as the normal procedure for release into free circulation, possible simplified
procedures or specific procedures with suspensive effect (transiting goods, temporaryimportation, inward processing and others).   Could Lao PDR describe these procedures?
Answer:
The general outline on customs procedures is base on Articles 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15,
16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 33, 43, 44, 45 and 46 of the Customs Law No. 04/94 that are
available to the brokers, importers and exporters in the preparation of customs documentation for the
importation of goods into and exportation of goods from the Lao PDR.
For detail information, please refer to copy of Lao PDR Customs Law attached with Lao PDR
Memorandum on Foreign Trade Regime (WTO Secretariat).
Following are the guidelines provided to exporters and importers in the Lao PDR:
You may choose to prepare your customs documentation or obtain the services of a licensed broker.
In all cases you need to submit, together with your declaration, basic supporting documents which are:
IMPORTATION:
Relevant permits and authorizations issued  by Ministry or Department concerned;
- Annual Importation Plan;
- An invoice;
- A cargo control or transport;
- A packing list;
- Certificate of Origin;
- Warehouse declaration form.
EXPORTATION:
Relevant permits and authorizations issued by Ministry or Department concerned for some
controlled goods;
- An invoice;
- A packing list;
- Certificate of Origin.
Declaration Form
The declaration form or single administra tive document (SAD) is used for all customs
transactions, import, export, and transit identified by the regime code.
Inscribe one of the following codes to identify the type of transaction the declaration is for:WT/ACC/LAO/4
Page 28
Regime Code Description
10 Exportation of domestic goods
14 Exportation under a drawback scheme
20 Temporary exportation
35 Re-exportation
40 Importation of goods for home consumption
4A Importation of goods for diplomatic use, returning residents, and humanitarian
assistance, samples, educational mate rials, and certain religious articles.
4B Goods ex-warehoused to duty free shops
4C Goods ex-warehoused for exportation out of the Lao PDR
45 Home consumption of goods after temporary admission
47 Home consumption of goods entered under a warehousing regime
50 Temporary importation
62 Re-importation of goods exported temporarily
70 Warehousing of goods
80 Transit
After you have completed your declaration, you can now lodge it at the designated customs
office where your goods are held. After custom s review and approval of the declaration,
please make the payment of all applicable duties and taxes, and present a copy of the payment
receipt to the customs office where the declaration was presented. On receipt of the customs
release note, present the release note to the warehouse keeper for delivery of the imported
goods.
Question 85
We note the Lao PDR’s comments on implementation of the WTO Customs Valuation
Agreement.  Could the Lao PDR advise whether it is currently taking any steps or currently hasany specific plans to modify its 1994 Law to bring it towards conformity with the WTO
Agreement?
Answer:
The customs valuation system of the Lao PDR is known as the actual value system. To implement the
customs valuation of the GATT 1994, we need to amend the law, then enhance the capacity ofofficials to implement it.
To meet the obligations under the WTO Agreement on Customs Valuation and other WTO
Agreements, the Department of Customs has cooper ated with an IMF legal expert and amended many
articles of the existing customs law (No. 04/94 of 18 July 1994), which are inconsistent with
provisions of the WTO Agreement on Customs Valuation.
The action plan of the Customs Department in brief is:
- Year 2002, to prepare for detail amending the Customs Law;
- Year 2003, to submit to the National Assembly for approving;
- Year 2004, to set up the contact point and training for trainer;
- Year 2005, to train the customs officials and traders;
- Year 2006, the fully implementation.
As the Lao PDR is a least developed country, we will need technical assistance to train customs
officials and trading communities in the new system and time to allow for implementation.WT/ACC/LAO/4
Page 29
Question 86
We understand the difficulties that Lao PDR may face in implementing the customs valuation
agreement and the need to obtain technical assistance to overcome them.  Could Lao however
give a preliminary assessment of the time required to fully implement this agreement and
describe the activities that have been already carried out or are planned towards itsimplementation.
Answer:
See the answer to previous question.
Question 87
Based on its responses to the valuation questionnaire in annex 4 of document WT/ACC/LAO/3,
the Lao PDR acknowledges that its legislation is not in conformity with the WTO Customs
Valuation Agreement.  We look forward to work ing with the Lao PDR on the implementation of
the changes necessary to bring its legislation into  conformity.  In bringing its legislation into
conformity with the Agreement, the Lao PDR should  focus on establishing a system of valuation
which provides for the determination of customs value based on the hierarchy of appraisement
methods contained in the Agreement.  Transaction value is the preferred method of
appraisement, followed by transaction value of  identical merchandise, transaction value of
similar merchandise, deductive value, computed value and the fallback method.
 As regards prohibited bases of appraisement, Article 7 of the Agreement provides that thecustoms value may not be based on the selling price in the country of importation of goods
produced in that country; a system that provides  for the acceptance for customs purposes of the
higher of two alternative values; the price of goods on the domestic market of the country of
exportation; the cost of production other than computed values which have been determined for
identical and similar goods; the price of the goods for export to a country other than the country
of importation; minimum customs value; or arbitrary or fictitious values.
 The Lao PDR’s legislation should ensure adequate  protection for the treatment of confidential
information in accordance with Article 10 of  the Agreement, which grants confidential
treatment to business proprietary information.
 The Lao PDR’s legislation should also ensure ade quate transparency safeguards.  In particular,
Article 12 of the Agreement ensures publication of laws, regulations, judicial decisions and
administrative rulings regarding the valuation of merchandise.
 In addition the legislation shou ld grant to importers the right to appeal and to a written
explanation of how judicial and administrative valuation decisions are determined, in
accordance with Articles 11 and 16 of the Agreement.
 We also note that when it is necessary to de lay the final determination of the customs value of
imported merchandise, Article 13 of the Agreemen t grants to importers the right to withdraw
their merchandise provided they ob tain sufficient guarantee in the form of a surety or deposit to
cover the ultimate payment of customs duties.  The Lao PDR’s legislation should provide for
bonded entry of merchandise under these circumstances.
 Lastly, we note that in accordance with Article 14 of the Agreement, the Interpretative Notes to
the Agreement are an integral part of the Agreem ent.  The articles to the Agreement are to beWT/ACC/LAO/4
Page 30
read and applied in conjunction with their respec tive notes.  Accordingly, in order to fully
implement the Agreement the Lao PDR should includ e the Interpretative Notes in its legislation.
Answer:
First of all, we would like to thank for your very useful recommendations for these matters. In
bringing its legislation into conformity with the ag reement, the Lao PDR tried previously to base its
customs valuation system on Article VII of the GATT 1994. The Minister of Finance issued Decree
No. 0243/MOF, dated 7 February 1998, to implement the customs value base on ACV of the WTO.
Unfortunately, in practice, we could not fully implement the customs valuation based on 6 methods of
the GATT. Our infrastructure was not perfect, we lack human resources and both customs officials
and traders do not understand the ACV rules.
Protection for treatment of confidential informatio n in accordance with Article 10 of the Agreement,
is already contained in Article 104 of the Customs Law. We combined the context of Article10 of theACV into the text of a new article (Article 11) in the Draft Amendment to the Customs Law.
Right of appeal is already provided in Article 23 of the Customs Law, but the text is not in full
conformity with the ACV. The amendment to the customs law will make it consistent with Articles 11
and 16 of the Agreement.
The right to withdraw merchandise is provided in Article 25 of the existing customs law but the text
does not fully conform with the Agreement.  The amendment to the customs law also does this.
We also plan to include the Interpretative Notes to the Agreement (Article 14) in our legislation.
Article11 of the new law contains the full text of the ACV.
Question 88
The Lao PDR requests a transition period to implement the provisions of the WTO Customs
Valuation Agreement.  We believe that impl ementation of the WTO Agreement on Customs
Valuation will be a key factor in the Lao PDR’s ability to provide actual market access based on
the commitments undertaken in its Goods Market Access Schedule.  If the Lao PDR seeks to
delay implementation of the Agreement, it shou ld develop legislation consistent with the WTO
Agreement to implement its provisions, focusing on the elements listed above, and submit it forreview and comment by the Working Party.
 The Lao PDR should describe in detail in separate documentation what aspects of theAgreement it believes it cannot apply from the date of accession, and give reasons why it is not
possible.  For those areas where the Lao PDR seeks to delay implementation, a detailed
program of implementation should be developed, including a list of necessary technical
assistance, for inclusion in the WP report and protocol.
Answer:
As mentioned above, we agree with your recommendation for more detail on a program of
implementation and to study in detail the text of the Agreement and what aspects cannot apply from
the date of accession and what might seek to delay implementation. The Department of Customs will
nominate a team of technical officials to study and report the result to you later.WT/ACC/LAO/4
Page 31
 (i) Other customs formalities
Question 89
Section 3.12 of Annex 8 lists "consular fees overseas."  Does the Lao PDR require
authentication of import documentation by consul ar officials or other institutions in the country
of export?  If so, what fee, if any, is charged?
Answer:
This measure has been abolished since 1 May 2002.
 (j) Pre-shipment inspection
Question 90
We note that the Memorandum states that pre-shipment inspection is not used.  We had
understood that the Lao PDR had intended to implement pre-shipment inspection last year
through the establishment of a company called Societe Mixte d’Inspection Lao.  Could the Lao
PDR clarify whether this company undertakes pre-shipment inspection or whether there are
plans to introduce pre-shipment inspection?
Answer:
Due to border trade problems arising from customs valuation, the Lao Government decided to
established a joint company with Veritas International called Société Mixte d’Inspection Lao“BIVAC” to increase import duty revenue collecti on and to prevent incorrect customs valuation. The
company was to be established within a period of three years after the date of signatory of the
contract. This was not achieved.
There are now no plans for pre-shipment inspection.
 (k) Application of internal taxes on imports
Question 91
Document WT/ACC/LAO/3 states that "the Gove rnment is preparing the draft legislation to
introduce VAT which will replace turnover tax".  We would appreciate more details on steps
that the Lao PDR is taking to convert its turn over tax to a value added tax and a sense of when
such a conversion might take place.
Answer:
The Ministry of Finance has appointed a technical committee for the study of VAT, the work of
which is accelerating. The preparations of VAT have been and will be supported by the Tax
Administration and Customs Reform Project (Lao/96/005). The introduction of VAT is expected to be
during fiscal year 2003/2004.
Question 92
The Lao PDR imposes an excise tax on certain products.  What is the principal purpose of the
tax?WT/ACC/LAO/4
Page 32
Answer:
Excise tax is imposed on certain products, such as luxury goods. The principal purpose is to increase
revenue to finance the socio-economic development of the country. At the same time, it also serves
the purpose of income redistribution from those who have higher income, since luxury goods are not
normally consumed by the majority of people.
Question 93
Please confirm that kerosene and alcohol for medicinal purposes (Accon 90) is exempt from the
excise tax.  If kerosene is exempt, why is a rate of 10 per cent indicated in section 3.2 of Annex 8
of document WT/ACC/LAO/3.
Answer:
Kerosene and Accon 90, which are imported for medical purposes, will be exempted from excise tax
but are still subject to turn over tax of 10 per cent .  If the importation is for trade purposes, according
to Article 3 of the Prime Minister's Decree No. 241/PM, excise tax of 60 per cent should be collected
as well as turn over tax  of 10 per cent as required in Article2 of the Decree.
Question 94
Is the list of products subject to excise taxes in section 3.2 of Annex 8 comprehensive?  Please
indicate HS item numbers for the products cov ered as well as a description and current rate of
excise duty.
Answer:
 The list is comprehensive. Other information is provided in the answer to question 95.
Question 95
Is the "specific" rate on beer, soft drinks, and tobacco applied in addition to the ad valorem  rate
listed above?  Are all tobacco products subject to the specific rate?
Answer:
As well as excise tax that is determined by the Tax Law, there is additional excise tax which is
collected on some local and imported goods. For detail, please see the tables below (Notification
No. 1061/MOF of 13 June 2003).
Additional Excise Tax Rates, based on Notification No: 1061/MOF
Tax RateHS Code Description of GoodsDomestic Products Imported Products
2202.90 Soft drinks (Coke, Pepsi etc.) 300 LAK/litre 600 LAK/litre
2202.10 Soda 400 LAK/litre 800 LAK/litre
2202.90 Beverages M100, M150 and like pr oducts 200 LAK/litre 1,000 LAK/litre
2201.90 Pure drinking water, mineral water - 2,000 LAK/litre
22.09 Canned beverages (Coffee, fruit juice and like
products)- 1,000 LAK/litre
22.08 Spirits and Beverages of alcoholic strength by
volume not exceeding 15% vol.300 LAK/litre 2,000 LAK/litreWT/ACC/LAO/4
Page 33
Tax RateHS Code Description of GoodsDomestic Products Imported Products
22.08 Spirits and Beverages of alcoholic strength by
volume exceeding 15% vol.500 LAK/litre 5,000 LAK/litre
2203.00 Beer 900 LAK/litre 3,000 LAK/litre
2402.20 Cigarettes 400 LAK/pack  2,000 LAK/pack
Motorcycles 100,000
LAK/motorcycle200,000
LAK/motorcycle
- All kinds of Sedan
- All kinds of Pickup- All kinds of Dump truck- All kinds of Van- All kinds of Bus- All kinds of Jeep (eg. Pajero, Landcruiser brand)
- All kinds of Jeep (Roof made of cloth or plastic)1,500,000 LAK/veh.
800,000 LAK/veh.600,000 LAK/veh.
1,000,000 LAK/veh.
800,000 LAK/veh.
1,500,000 LAK/veh.
500,000 LAK/veh.2,000,000 LAK/veh.
1,500,000 LAK/veh.1,200,000 LAK/veh.1,500,000 LAK/veh.1,500,000 LAK/veh.3,000,000 LAK/veh.
800,000 LAK/veh.
For petrol, to perform accordance with NotificationNo: 1440/MOF dated 30/10/98.
Additional Excise Tax Rates, base on Notification No: 1440/MOF
HS Code Description of Goods Tax Rate
2710.00.232710.00.24
2710.00.40Benzene Special
Benzene regular
Diesel30 LAK/litre
20 LAK/litre
20 LAK/litre
Question 96
Concerning the Turnover Tax, Section 3.1 of Annex 8 of document WT/ACC/LAO/3 states that
"All imports, not exempt from import duties, are subject to turnover tax and the base of
taxation is customs value plus customs duty, and fees plus excise duty, if any."  Does that mean
that imports with a zero rate of tariff or th at are tariff-exempted also pay no turnover tax?
Answer:
According to the Tax Law No. 04/95/NA, if importe d goods are exempted from import duty, they are
also exempted from turn over tax. But if import duty on the goods is levied at 0 per cent, turn over tax
has to be collected as usual.
Question 97
Please provide a list of products exempt fr om the Turnover Tax that includes the HS number
and description.  Please confirm that this tax will be eliminated when the Value Added Tax is
enacted.
Answer:
The goods and products which are exempted from turn over tax has already been determined in
Article 9 of the Tax Law No. 04/95/NA.
Turnover tax applies to levels of sellers, not products. Details and exemptions are set in Annex 8 of
WT/ACC/LAO/3.WT/ACC/LAO/4
Page 34
Question 98
When the VAT is enacted, will it have the sa me taxable base, or will there be a different
formulation?
Answer:
Both taxes (VAT and Turnover Tax) have similar methodology of calculation and collection. With
regard to the rate, it is not yet clear if the same rate will be used. Tentatively, it is proposed to have a
single rate of 10 per cent.
(l) Rules of origin
Question 99
Can the Lao PDR confirm that at present, no origin certification or origin requirements apply
to non-preferential imports?
Answer:
Currently, the Lao PDR does not require origin certification for non-preferential imports.
Question 100
Please provide information on how the Lao PDR cu rrently applies, or is prepared to implement,
Article 2(h) and Paragraph 3(d) of Annex II of the WTO Agreement on Rules of Origin, i.e.,
− that for both non-preferential and preferential trade, upon the request of an exporter,
importer or any person with a justifiable ca use, assessments of the origin that would be
accorded  to a good are issued as soon as possible but no later than 150 days after the
request;
− that requests for such assessments shall be  accepted before trade in the good concerned
begins and may be accepted at any later point in time; and
− that such assessments shall remain valid fo r three years provided that the facts and
conditions, including the rules of origin, under which they have been made remain
comparable.
Answer:
Currently, the Lao PDR does not provide in its Customs Law the obligations which have the
provisions of Article 2(h) and Para 3(d) of Anne x II of the WTO Agreement.  But we will consider
incorporating these provisions into the revised Customs Law.
 (m,n,o) Anti-dumping, countervailing duty and safeguard regimes
Question 101
Does the information provided in document WT/ACC/LAO/3 mean that the Lao PDR has no
legislation in place at present that author izes the application of safeguard measures,
antidumping duties, or countervailing duties against imports, but that such legislation may beimplemented in the future?WT/ACC/LAO/4
Page 35
Answer:
Yes, the information provided in WT/ACC/LAO/3 means that the Lao PDR has no legislation in place
at present that authorizes the application of safeguard measures, anti-dumping duties, or
countervailing duties against imports, but that such legislation may be implemented in the future.
Question 102
Is the Lao PDR willing to confirm that it will  not apply any anti-dumping, countervailing or
safeguard measure until it had notified and implemented appropriate laws in conformity with
the provisions of the WTO Agreements on the Implementation of Article VI, on Subsidies and
Countervailing Measures, and on Safeguards?
Answer:
Yes, we confirm.
 2. Export Regulation
 (b) Customs tariff nomenclature, types of duties, duty rates, weighted averages of rates
Question 103
Document WT/ACC/LAO/3 states that "Export duties are levied on electricity at 20 per cent."
Are there any other products subject to export duties?
Answer:
Yes, there are.  Export duties are levied on some uncultivated forest products. It was determined in the
Prime Minister Decree No. 187/PM, dated 21 October 1994 and the Minister Instruction
No. 230/MOF, dated 4 March 1995 (availab le through document WT/ACC/LAO/4/Add.1).
 (c) Quantitative export restrictions, including prohibitions, quotas and licensing systems
Question 104Please provide a list of all products including HS number that cannot be exported from the Lao
PDR or are subject to prior approval or quotas.  Please indicate the specific provisions of the
WTO Agreement justify the application of these restrictions.
Answer:
The Notification No. 0203/MOC.FTD, dated 14 February 2003, lists products that can not be exported
from the Lao PDR or are subject to prior approvals or quotas.  They are listed below:
A. Goods forbidden for export
1. Any kind of explosives, weapons and armaments, from HS 3601 to 3604 and
from HS 9301 to 9306.
2. Any kind of habit forming drugs
3. Antiques, HS 9706.00
4. Wild life, aquatic animals and their parts which are forbidden by domestic
laws and the international commitment of the Lao Government.WT/ACC/LAO/4
Page 36
5. Logs, unprocessed rattan and eaglewood (aloes wood)
6. Sulfur (bat manure)
7. Equipment for printing bank notes.
B. Export-controlled goods that need a technical approval from the related sector
1. Plant and animal seeds
2. Fertilizer and insecticides
3. Sawn wood, wood products and forestry products
4. Controlled goods periodically listed by related sector
These restrictions are in conformity with Article 20 and 21 of the GATT as to protect national
security, conservation of natural resources, public morals, human animal or plant life and health, and
articles of artistic historic and archaeological value.
Question 105
Concerning the Notification of the Prime Minister No. 11/PM of 23 August 1999, On
Management of Forestry and Timber Industry, which provides, inter alia , for restrictions on
wood exports unless there is (a) Government permission and (b) a value-added component.  Is
this legislation still in effect?  If so, how does the Lao PDR intend to address the aspects of this
regime that conflict with Article XI?
Answer:
The Notification of the Prime Minister No. 11/PM of 23 August 1999 on the Management of Forestry
and Timber Industry is not in effect anymore. It has been replaced by the Notification of the Prime
Minister No. 18/PM of 4 October 2002.  The purpose of this Notification is to protect and reserve the
forest. It is in conformity with Article XX (g), and is allowed as an exception to Article XI of theGATT.
 (d) Export licensing procedures
Question 106
Document WT/ACC/LAO/3 states that "With the exception of the export of garments and
products on the AFTA Inclusion List of other ASEAN trading partners, export licenses arerequired for all exports.  In addition, the export of live animals and animal skin products
require the prior approval of the Ministry of Agriculture and Forestry.  Licenses are issued by
the Municipal and Provincial trade offices of MO CT in consultation with line Ministries.  Two
to three days are required for export licenses to be processed which is valid for 90 days."  Are
these automatic licenses, i.e., granted upon application, or do they require approval based on
criteria?
Answer:
The Ministry of Commerce issued the Notification No. 0090/MOC.FTD of 31 January 2001. It states
that the export licence requirements from trade sector will be removed for most products from
1 March 2001 onwards.  Minerals, logs and timber still need to have export licenses. Some
requirements from other ministries are still applied.WT/ACC/LAO/4
Page 37
(g) Export performance requirements
Question 107
Does  the Lao PDR condition any aspect of foreign investment, e.g., approval, right of
establishment, incentives, upon export?
Answer:
Some investment approvals are based on export performance.  This is the case for investments in the
following industries: manufacture of alcohol, of beer, of rice noodles, of soft drinks, of
pharmaceuticals and of motor vehicles. See answer 14 and the attached material referred there.
 3. Internal policies affecting foreign trade in goods
 (a) Industrial policy, including subsidy policies
Question 108
The memorandum notes in Section IV.3(a) that the Lao PDR’s objectives in the mining sector
are to provide a favourable legal system with which mineral prospecting, exploration and
mining can expand.  We encourage reform in this sector.  Could the Lao PDR explain its plans
for future reform, including plans for reform of the Mining Law of 1997?
Answer:
The mining law is number 04/97/NA of 12 April 1997. The Ministry of Industry and Handicraft
proposes to amend the mining law Articles 20, 21, 22, 23, 38, 49 and 59. At present, administrative
regulations for mining are being set out.
 (b) Technical regulations and standards, including measures taken at the border with
respect  to imports
Question 109Document WT/ACC/LAO/3 states that Notification 870/MOC provides that certain products
are designated as potentially subject to special control, e.g., for the protection of human health
and safety.  The products identified include fertilizers, cultural goods, communication products,
medicines, chemicals, minerals, sporting guns and sports products.  Does the Lao PDR use the
authority of Notification 870/MOC to administ er certification requirements on imports based
on the application of mandatory standards or technical regulations?  If so, please outline how
this works.
Answer:
The Notification 870/MOC has been replaced by The Regulation on Import and Export Licensing of
Controlled Goods of the Ministry of Comme rce No. 106/MOC.FTD dated 25 January 2002 followed
by the Notification 0203/MOC.FTD of 14 February 2003 on the list of goods subject to import and
export licensing with the Ministry of Commerce for the fiscal year 2002-03 and the Notification0202/MOC.FTD of 14 February 2003 on the list of banned goods and the list of goods subject to
technical licensing procedures from relevant sectors for fiscal year 2002-03.WT/ACC/LAO/4
Page 38
The replacement provisions are used to control the products in question. In general, banned goods for
import and export can be imported to or exported from the Lao PDR if and only if they are authorized
to do so according to Article 8 of the Decree No. 205/PM, dated 10 November 2001, on import and
export. The provisions of the licensing procedur es are stipulated in the above-said regulation
No. 106/MOC.FTD.
Certification requirements for imports based on mandatory standards or technical regulations are
administered by relevant authorities of the Lao PDR.
Question 110
Is the distribution of domestically produced g oods that are similar to the "special control"
imports subject to the same requirements?  If so, please describe how this is accomplished.
Answer:
Yes, the distribution of domestically-produced goods that are similar to the "special control" imports
is subject to the same requirements. There is no discrimination in the distribution system whether the
goods are domestically produced or imported. The distribution system is implemented in accordance
with the Prime Minister Decree No. 206/PM of 11 October 2001 on Distribution Business and the Tax
Law No. 04/95/NA of  14 October 1995.
Question 111
Please list, by HS number, all imports subject to review due to the application of technical
barriers to trade.
Answer:
Following the Notification No. 0161/MOC.FTD of 11 February 2002, imports subject to review due
to the application of technical barrier to trade are listed below:
A. FOOD PRODUCTS
1. Meat of swine, fresh, chilled or frozen  HS 0203:
- Fresh or chilled:
0203.11 carcasses and half -carcasses
0203.12 Arms, shoulders and cuts thereof, with bone in0203.19 others- Frozen:
0203.21 carcasses and half -carcasses
0203.22 Arms, shoulders and cuts thereof, with bone in
0203.29 others
2.& 3. + 0201: Meat of bovine animals, fresh or chilled
0201.10 carcasses and half - carcasses
0201.20 other cuts with bone in0201.30 boneless
+ 0202 : Meat and bovine animals, frozen
0202.10 Carcasses and half - carcasses
0202.20 Other cuts with bone in0202.30 Boneless
4. All kinds of fresh water fish
0301.91     - Fresh water fishWT/ACC/LAO/4
Page 39
5. All kinds of milk product :
+ 0401 Milk and cream, not concentrated  nor containing added sugar or other
sweetening matter.
0401.10 Of a fat content, by weight, not exceeding 1%
0401.20 Of a fat content, by weight, exceeding 1% but not exceeding 6%0401.30 Of a fat content, by weight, exceeding 6%+ 0402 Milk and cream, concentrated or containing added sugar or other
sweetening matter.
0402.10 In powder, granules or other solid forms, of a fat content, by
weight, not exceeding 1.5%-  In powder, granules or other solid forms, of a fat content, by weight,exceeding 1.5%
0402.21 Not containing added sugar or other sweetening matter.0402.29 Other
+ 0403 Butter milk, curdled milk and cream, yoghurt, kephir and other fermented or
acidified milk and cream, whether or not concentrated or containing added
sugar or other sweetening matter or flavoured or containing added fruit or
cocoa.
0403.10 Yoghurt.
0403.90 Other.
+  0404 Whey whether or not concentrated or containing added sugar or other
sweetening matter, products consisting of natural milk constituents, whether
or not containing added sugar or other sweetening matter, not elsewhere
specified or included.
0404.10 Whey, whether or not concentrated or containing added sugar or other
sweetening matter.
0404.90 Other.
+0405-0405.00 Butter and other fats and oils derived from milk
+  0406 Cheese and curd.
0406.10 Fresh cheese (including whey cheese), not fermented, and curd.0406.20 Grated or powdered cheese, of all kinds.
0406.30 Processed cheese, not grated or powdered.
0406.40 Blue - veined cheese.0406.90 Other cheese.
6. All kinds of canned food (including canned fruits)
+  1602 Other prepared or preserved meat, meat offal or blood
1602.10 Homogenised preparations
1602.20 Of livers of any animal
1602.30 Of poultry of heading No. 01.051602.40 Of swine1602.50 Of bovine animals+  1604 Prepared or preserved fish ; caviar and caviar substitutes prepared from fish
eggs.
1604.20 Other prepared or preserved fish1604.30 Caviar and caviar substitutes
     -  (Canned fruits  : Chapter 20)
7. Frozen meat fish and sea food :
+  0303 Fish frozen excluding fish fillets and other fish meat of heading No. 0304
0303.20 Marine fish
0303.80 Livers and roes+  0304 Fish fillets and other fish meat (whether or not minced) fresh, chilled or
frozen.
0304.20 Frozen filletsWT/ACC/LAO/4
Page 40
8. Seasoning (fish sauce, Soya sauce, vinegar, tomato and chillies ketchup, monosodium)
+  21.03 Sauces and preparations therefore ; mixed condiments and mixed      
seasonings;  mustard flour and meal and prepared mustard.
2103.90    other  (fish sauce , monosodium glutamate)
2103.10 Soya sauce2103.20 Tomato and chilli ketchup2209.00 Vinegar and substitutes for vinegar obtained by acetic acid
9. All kinds of candy and biscuits  (chapter 17, 19)
10. All kinds of coloring matter  for food  (chapter 32)
11. Other organic compound  (Chapter 29)
12. Sweet substitution substance (other of raw sugar not containing added flavouring or coloring
matter (1701.99)
13. All kind of beverage (Chapter 20.   2201.10 ,  2202.10, 2208.90, 2203.00)
B. VEGETABLE SEEDS AND BREEDING ANIMALS:
1. All kinds of  vegetable seeds (Chapter 12.   1209.99)
2. All kinds of breeding fish and other breeding animal (0102, 0103,  0301)
C. ALL KINDS OF FERTILIZER AND INSECTICIDE (Chapter 31 and 38 :  3105.20, 3808.90)
D. CULTURAL PRODUCTS
1. Video cassette, cassettes for tape recorder which are not consistent with Lao culture (Chapter
85)
2. Movies films  (Chapter 37)
3. Games playing sets (9504.10), sculptured items (9702.00), painted items (9701.10)4. Transmitters - receivers through satellite (8529.90), All types of communication materials and
equipment   (8517.30).
E. ALL KINDS OF SPORT GUNS:  (Chapter 93 ,  9303.30)
F. DRUGS (3004.90) , COSMETIC (3304.99)
G. CHEMICAL PRODUCTS  (Chapter 25, 29, 30, 31, 34, 35, 36, 38)
H. MINERALS  (Chapter  25, 26, 27)
I.  ALL KINDS OF VEHICLES (Chapter 87)
J.  PRECIOUS METALS AND METALS CLAD  WITH PRECIOUS METAL (Chapter 71).
Question 112
Document WT/ACC/LAO/3 states that "the Lao PDR urgently requires comprehensive
technical assistance in the TBT area from th e international community, in particular from
WTO members.  In addition, the Lao PDR would req uire a transitional period to comply with
the TBT Agreement upon its accession to the WTO."  The information provided by the Lao
PDR in WT/ACC/LAO/3 and Annex 5 is insufficient to determine if the current TBT regime
simply falls short of TBT requirements or if there are direct violations of the WTO AgreementWT/ACC/LAO/4
Page 41
on TBT.  We would appreciate information on  what aspects of the current TBT regime of the
Lao PDR correspond to WTO provisions and where there are divergences, using the checklist
provided in document WT/ACC/8 to lay out this information.  Such information is necessary as
a first step to determining what sort of assistance might be necessary and upon what timetable a
transition may be based.  Please provide this analysis prior to the next WP meeting.
Answer:
The Lao PDR promulgated the Prime Minister’s Decree on the Management of Standards and Quality
of Products and Goods No. 85/PM on 2 November 1995 and the National Master Plan for
Development of Standards and Conformity A ssessment in the Lao PDR No. 1352/PMO.DS on
11 August 2000. This legislation and the Master Plan reflect the situation in the Lao PDR and
conform with the principles of the WTO TBT Agreement.  The checklist of TBT provided in
WT/ACC/8 will be submitted to members of the WP prior to the next meeting.  On the basis of it, theprecise needs for technical assistance will be identified.
Question 113
If the Lao PDR seeks to delay implementation of  the Agreement, it should develop legislation
consistent with the WTO Agreement to implement its provisions, focusing on the elements listed
above, and submit it for review and comment by the Working Party.  The Lao PDR shoulddescribe in detail in separate documentation what aspects of the Agreement it believes it cannot
apply from the date of accession, and give reasons why it is not possible.  For those areas where
the Lao PDR seeks to delay implementation, a detailed program of implementation should be
developed, including a list of necessary technica l assistance, for inclusion in the WP report and
protocol.
Answer:
Based on the National Master Plan for Development of Standards and Conformity Assessment in the
Lao PDR No. 1352/PM.DS, the Lao PDR expects to implement the WTO TBT agreement by 2005.
Question 114
We understand the difficulties that Lao PDR may face in implementing the TBT agreement and
the need to obtain technical assistance to overcome them.  Could Lao however give a
preliminary assessment of the time required to fully implement this agreement and describe the
activities that have been already carried ou t or are planned towards its implementation?
Answer:
Based on the National Master Plan on Development of Standards and Conformity Assessment in
Lao PDR No. 1352/PMO.DS, technical assistance on standards and conformity assessment are needed
for the following:
- Development and implementation of legislation and standards relating to the WTO TBT
Agreement.
- Development of human resources with the qualifications to perform inspection, quality
certification, and assessment for laboratory accreditation.WT/ACC/LAO/4
Page 42
Question 115
Would the STEA (ANNEX 5 page 79) function as the Single Enquiry Point?  Would the
Enquiry Point be operational and accessible to domestic and foreign companies upon accession?
Answer:
Yes. The Science, Technology and Environment Agency (STEA) is a central management agency for
standards and quality whose role is logistics coor dinator for the Government in the standardization
and conformity assessment activities. It will be the Enquiry Point for the purposes of Articles 10.1 and
10.3 of the TBT Agreement. When operational, it will be and accessible to domestic and foreign
companies.
Question 116
Is the Decree No. 85/PM (ANNEX 5 page 79) a framework legislation on standardization,
technical regulations and conformity assessment?  We are of the view that such legislation, in
order to be TBT compatible should include the following elements (not exhaustively):
− clear distinction between compulsory tech nical regulations and voluntary standards
(there should be no compulsory elements in the standards);
− alignment with international standards (unless justified exceptions) and participation in
international standardization bodies (where possible, membership in the ISO should be
encouraged);
− assurance of openness and tr ansparency in the drafting of technical regulations,
standards, etc;
− conformity assessment should include the possibility of acceptance of manufacturers
declaration;
− de-concentration of tasks among different organizations (e.g. standardization,
conformity assessment, market surveillance).
Answer:
The Prime Minister’s Decree on the Management of  Standards and Quality of Products and Goods,
No 85/PM (Articles: 9, 10 and 11) is the framework legislation for standardization, technicalregulations (other than human and animal plant and safety) and conformance.
The following features of the processes of standard setting and conformance in the Lao PDR are
stipulated in the Decree and reflect the requirements of the WTO TBT Agreement.
- It clearly specifies that technical regulations, standard and conformity assessment systems
comprise two forms: Voluntary standards and Mandatory Standards.  Mandatory standards
provide for an expected level of quality related to national security, public order, safety,
health and hygiene, the environment and standards of goods and products of strategicimportance which the Government determines from time to time. Up until now, there  are not
yet mandatory standards in place in all those areas.
- The technical content of national standards is based on relevant regional and international
standards.
- Drafting processes for national standards are open for comments from both the governmental
and private sectors. This includes Ministries, the Committee for the Management of Standards
and Quality, producers, sellers, consumers, and other agencies concerned (This is set out in
the Lao Standards Development Process).WT/ACC/LAO/4
Page 43
- Before approval, new standards are published and publicly disseminated (as set out in the Lao
Standards Development Process).
- Article 6 of the Decree stipulates that the Agency Managing the Standard and Quality of
Goods and Products is comprised of three levels as below:
1. Central management agency.
2. Local administrative agency (provincial and prefecture level).
3. Division management agencies.
 (c) Sanitary and phytosanitary measures, including measures taken with respect to  imports
Question 117
Document WT/ACC/LAO/3 states that Notification 870/MOC provides that certain products
are designated as potentially subject to special control, e.g., for reasons of sanitary and
phytosanitary protection or the protection of human health and safety.  The products identifiedinclude food products, live animals and plants.  Does the Lao PDR use the authority of
Notification 870/MOC to administer certific ation requirements on imports based on the
application of mandatory standards or techni cal regulations associated with sanitary or
phytosanitary requirements?  If so, please outline how this works.
Answer:
The Notification No. 870/MOC is no longer in effect.  It has been replaced by the Notification
No. 0161/MOC.FTD, dated 11 February 2002. The Lao PDR uses the authority of the 0161
Notification to administer certification requirements on imports based on the application of mandatory
standards or technical regulations associated with sanitary or phytosanitary requirements. It works as
follows: if a company would like to import certain products that requires certification based ontechnical regulation associated with sanitary and phytosanitary requirement, it has to obtain such
technical certification from the concerned ministry in this case the Ministry of Agriculture and
Forestry. After that the products in question can be imported.
Question 118
Is the distribution of domestically produced g oods that are similar to the "special control"
imports subject to the same requirements?  If so, please describe how this is accomplished.
Answer:
See the answer to question 110.
Question 119
Please list, by HS number, all imports subject to review due to the application of technical
barriers to trade.
Answer:
Please see the answer to question 111.WT/ACC/LAO/4
Page 44
Question 120
We understand the difficulties that Lao PDR may face in implementing the SPS agreement and
the need to obtain technical assistance to overcome them.  Could Lao however give a
preliminary assessment of the time required to fully implement this agreement and describe the
activities that have been already carried ou t or are planned towards its implementation?
Answer:
The Lao PDR is a least developed country with low technology for agricultural production. In
addition, laws and regulations on agricultural macro-management are incomplete, compared to other
developing and developed countries. At present, regulations on Sanitary and Phytosanitary of the
Lao PDR are convergent with the Sanitary and Phytosanitary Agreement (SPS) of the WTO.
To comply with WTO SPS requirements, the Lao PDR needs to improve risk assessment procedures.
To ensure more effective implementation of SPS obligations, existing laws and processes and
infrastructure need to be improved and developed.
The Lao PDR has some of quarantine units at the international entry checkpoints and other points
along borders.  The entry checkpoints now are equipped and operated using the existing SPS laws and
regulations.
The Lao PDR has prepared a draft veterinary law which is being under consideration and ratification
of the National Assembly.
The Lao PDR has already set  its plan to improve its SPS management system in the future. The main
objectives of the plans are to:
- improve and develop SPS laws or regulations  to comply with regional and international
agreements.
- establish risk assessment processes and laboratories to assess the threat of pests and diseases
of plants and animals and strengthen the existing SPS database system.
- improve and develop basic infrastructure at international entry checkpoints.
- strengthen capacity building to handle SPS issues.
The Lao PDR will set up WTO enquiry points for SPS at two technical departments. eg. the
Department of Livestock and Fishery, and the Depart ment of  Agriculture, respectively, within the
Ministry of Agriculture and  Forestry.
The Lao PDR considers that it can acquire the capacity to undertake risk assessment at the level
required by the time of accession if technical assistance is provided soon.
However, it will require a longer  period to enhance the capacity of personnel to effectively
implement WTO SPS requirements.
Question 121
Document WT/ACC/LAO/3 states that "As part of the accession process, the Lao PDR
Government will review its sanitary and phytosa nitary measures to a ssess compliance with the
provisions of the WTO Agreement on the Applic ation of Sanitary and Phytosanitary Measures
and will draw on the resources of the relevant in ternational agencies.  Due to complexity and
technicality of the issues, the Lao PDR urgently  requires comprehensive technical assistance inWT/ACC/LAO/4
Page 45
the SPS area from the international community, in particular from WTO members.  In
addition, the Lao PDR as a LDC would require a transitional period to comply with the SPS
Agreement upon its accession to the WTO."  Has the Lao PDR initiated this review?
Answer:
The Lao PDR has already started to review its SPS measures. There are areas needed improve if the
Lao PDR would like to conform with and to effectively implement the WTO SPS Agreement. At the
present time, the Lao PDR is one of the member  countries joining ASEAN SPS development project
for CLMV countries (Cambodia, Lao PDR, Myanmar, and Viet Nam) under the Close Economic
Relation (CER) program supported by the New Zeal and Government. The Lao PDR is one of LDC
that may require a transitional period to comply with the SPS measures of WTO upon its accession.
Question 122
As the Lao PDR conducts its review of its sanitary and phytosanitary measures to assess
compliance with the provisions of the WTO Agreement on the Application of Sanitary and
Phytosanitary Measures, it should use of the checklist provided in document WT/ACC/8 to
provide information to the Working Party on what  aspects of the current SPS regime of the Lao
PDR correspond to WTO provisions and where there are divergences.  Please provide this
analysis prior to the next WP meeting.  Having such information is necessary as a first step to
determining what sort of technical assistance might be necessary to implement WTO provisions,
including the SPS Agreement, and upon what timetable a transition may be based.
Answer:
The checklist provided in the document WT/ACC/8 and a technical assistance program on the
Lao PDR SPS regime improvement are being prepared and they will be submitted to the WTO for thenext Working Party Meetings in due course.
Question 123
If the Lao PDR seeks to delay implementation of  the Agreement, it should develop legislation
consistent with the WTO Agreement to implement its provisions, focusing on the elements listed
above, and submit it for review and comment by the Working Party.  The Lao PDR shoulddescribe in detail in separate documentation what aspects of the Agreement it believes it cannot
apply from the date of accession, and give reasons why it is not possible.  For those areas where
the Lao PDR seeks to delay implementation, a detailed program of implementation should be
developed, including a list of necessary technica l assistance, for inclusion in the WP report and
protocol.
Answer:
See answers to previous questions.
 (d) Trade-related investment measures
Question 124
Document WT/ACC/LAO/3 states that "At present, the Lao PDR does not apply trade related
investment measures which could fall under the scope of the TRIMS Agreement, including
those subject to conditions related to export performance, local content or trade balancingWT/ACC/LAO/4
Page 46
requirement."  We would like to see this statement recorded appropriately the accession
package of the Lao PDR.
Answer:
As can be seen from the answer to question 14, some export-related conditions are now available.
These are under review.
 (e) State-trading practices
Question 125
Under IV.3.(e) on page 26 Lao PDR writes:  "A fter preliminary consideration on the issue
related to state trading enterprises, the Governme nt of the Lao PDR would like to state that the
Lao PDR does not have state trading enterprises in the sense of Article XVII of the GATT 1994
and working definition of Understanding on th e Interpretation of Article XVII of the GATT
1994".
− Do state trading enterprises outsid e this working definition exist?
− If yes, what products are concerned?
Answer:
No. 
Question 126
Document WT/ACC/LAO/3 states that "the Lao PDR does not have state trading enterprises in
the sense of Article XVII of the GATT 1994 and working definition of Understanding on the
Interpretation of Article XVII of the GATT 1994."  Notification No. 870/MOC of 19 September
1996, however, refers to "state control" of certain imports and exports, in conformity with the
provisions of Article 13 of the Business Law.  Plea se outline what "state control" means in this
context, e.g., does it include designation of specific firms to conduct the trade, setting of prices
or profits, or state decision-making on purchases or sales?
Answer:
The Notification No. 870/MOC has been replaced by the Prime Minister’s Decree No. 205/PM dated
11 October 2001. The present concept of  the “state control” on imports and exports is either to banthem or to impose certain requirements for the regi stration of companies dealing in such goods or to
make the import and export of such goods subject to import or export licensing procedures. “State
control” in this context does not cover the designation of specific firms to conduct trade, setting of
prices or profits, or state decision-making on purchases or sales. The provisions of the Decree
No. 205/PM states that “state control” is to be exercised on the ground of national security, or
protection of human health or safety .
Question 127
To what extent are any of the "state control" goods owned or traded exclusively by government
agencies?WT/ACC/LAO/4
Page 47
Answer:
None.
Question 128
Please list the 55 companies that remain "state -owned" and indicate if any of them produce or
trade in "state control" products.  Please describe their trade activities, and list the productstraded.  Is there any domestic or import compet ition for the products or services produced by
these companies?
Answer:
The number of companies which is not privatized has been reduced to 39.  Refer to answer 20.
Question 129
Please indicate list any enterprises, private or do mestic, that import or export on behalf of the
government or engage in stock-bui lding from international trade.
Answer:
No State-owned enterprises have these functions.
Question 130
Please refer to the informal indicative list of state trading enterprises contained in WTO
Document G/STR/4 and indicate if any enterp rise in the Lao PDR is involved in similar
activities.
Answer:
None.
 (f, g) Free zones, free economic zones
Question 131The Lao PDR reports that it does not at present have either free zones or free economic zones.
Are there any plans or authorizing legislation to set up such zones?
Answer:
At present, the Lao PDR is implementing the Prime Minister's Decree on free trade zones at Boten-
Bohan (Luangnamtha province), and Laobao-Dansavanh (Savannakhet province). In addition, thePrime Minister's Decree on special economic zone  at Savannhket-Seno No. 02/PM was implemented
on 21 January 2002.
In provinces with high economic growth such as : Vientiane Municipality, Champasack, Savannakhet,
Khammouane, Bolikhamxay and Oudomxay, the governors released an agreement on Industrial
Estates.
For common understanding on implementation, the government is drafting a Prime Minister's Decree
on Industrial Development.WT/ACC/LAO/4
Page 48
 (l) Government procurement practices
Question 132
Does the Lao PDR discriminate in favour of domestic production in its government
procurement?
Answer:
No.
Question 133
Will the Lao PDR consider joining the WTO Government Procurement Agreement?
Answer:
It depends on the capacities of the relevant agencies of the government to manage the terms and
conditions of the Agreement.
 4. Policies affecting foreign trade in agricultural products
Question 134
On page 18 under IV 1 (b) Lao PDR says that the philosophy of the tariff structure is to have
low tariffs on investment goods and inputs for industry and higher tariffs on non-essential
luxury goods.  The tariff rates vary between 5 and 40 per cent.  From table Annex 1.5 it
becomes clear that some agricultural products face tariff rates at the high end (e.g. Vegetables,coffee, tea, mineral water, beer and cigarettes at 40 per cent).
− Can Lao PDR explain the reason(s) for these high tariff rates? Are some of these
products considered as non-essential luxury goods?
− Are there criteria to establish whether a good classifies as non-essential luxury?
− Are corresponding domestically produced  non-essential luxury goods marketed at
comparable price levels to the consumer
Answer:
There are three principal reasons for determining high tariff rates:
- When the good is a non-essential luxury good;
- When it is necessary to protect local agricultural producers; and
- When it is necessary to protect some handicraft and industry goods to promote local products.
For attitudes to non-essential, luxury good, please refer to the response to question 54.
Question 135
Could the Lao PDR explain the WTO justification for the ban on imports of the specified
agricultural products, and provide advice on its in tentions in relation to these measures?  Could
the Lao PDR clarify its intentions in relation to the quotas on imports of rice to bring the trade
regime in this area into WTO conformity?WT/ACC/LAO/4
Page 49
Answer:
As mentioned in answer 64, most bans on agricultural products have been lifted. Controls remain on
trade in rice.  In general, rice is staple food for the whole nation. In relation to controls on the import
of rice, they exist for food self-sufficiency purposes. These controls will be converted into measures
consistent with the provisions of the WTO Agreement on agriculture.
Question 136
Please explain in greater detail the six agriculture and forestry programs and the rural
development programs identified in section II, part 2 (Economic Policies) (a) (ii) of document
WT/ACC/LAO/3.
Answer:
In 2002, the agriculture and forestry sector is still the dominant sector of national economy
contributing approximately 52 per cent of GDP. Th e Government of the Lao PDR has laid down six
main agriculture and forestry development programs, including food production, commodity
production, stabilization of slash-and-burn cultivation, irrigation development, agriculture and
forestry research, and human resources development. The outline and status of the implementation
within specific plans, projects and activities of the six programs are presented as follows:
- Food Production Program
The program aims at achieving food self-suffici ency in terms of improving four components
including: food availability, food stability, food acce ssibility, and food safety. Main crops and animals
covered by the program are rice, maize, peas and b eans, starchy root crop, vegetable, fish and meat
(pork beef and poultry) and eggs. The annual crop, animal and fish production since 1996 to 2001 can
be seen in the table below.
- Commodity Production Program
The target of the program is to enhance and to develop the agro-processing sector that provides local
income opportunities and increase value-added of the agricultural products for domestic market and
for export improving livelihood of people. The main agricultural products under the program are rice,
maize, mungbeans, soybeans, peanuts, vegetables, sugar cane, coffee, cotton, fruit and non-timberforest products, beef, pork, chicken, eggs, fish, and milk. The annual crop, animal and fish production
since 1996 to 2001 can be seen in the table below.
- Stabilization of Swidden (Slash-and-Burn) Cultivation Program
The program focuses on the stabilization and gradual reduction of 100,000 families of shifting
cultivation and thereby reducing at the same time poverty and conserving natural resources in rural
upland areas by providing and encouraging non-farm and off-farm alternative economic activities
eg. improved ago-forestry, animal husbandry a nd cash crop production, labour waging in agro-
processing industries, trades, and services. By the year 2005, the shifting cultivation practices will
basically be eliminated.
- Irrigation Development Program
The program aims at increasing rural incomes and stabilizing food and rice availability by expending
irrigation schemes in both upland and lowland areas and improving the operation and maintenance ofexisting irrigation schemes. Based on Irrigation Management Transfer (IMT) Policy, the irrigationWT/ACC/LAO/4
Page 50
schemes are also transferred to groups of farmers called Water Users Associations (WUA) for
operating and maintenance. In addition, the Program aims to expand irrigated areas and to assure the
supply of sufficient water for dry and wet production seasons. In 2000, the irrigated areas for rice and
crop production were approximat ely 200,000 hectares and 197,000 hectares during wet and dry
seasons, respectively, and over 800 of 1,900 irrigation schemes have already been transferred to theWUA through out the country.
- Agriculture and Forestry Research Program
The agriculture and forestry research program is one among important agriculture and forestry
development programs aiming at supplying basic data for formulating agriculture and forestry
development strategies. The basic agriculture and forestry data can be gathered by conducting natural
resource surveys and adaptive and basic research on improving crops, plants and animals seeds and
finding appropriate agriculture and forestry production technologies and techniques. The objective ofthe program is also to improve the research management system by rehabilitating and improving
existing research stations and expanding research network to new areas and to cooperate with
international research institutions. In 2000, many improved crop varieties, animal blood stock and fish
breeding stocks and many appropriate agriculture production techniques were introduced to farmers,
especially improved rice varieties Thadockham (TDK) and PhonNgam (PNG) (glutinous rice), maize,beans, vegetables, fruit, bulls, goats and fresh water carp.
- Human Resource Development Program
The program focuses on upgrading knowledge and skills of the staff of the Ministry of Agriculture
and Forestry from the central to provincial and district levels.  The aim is to meet the need of the
country for the implementation of the agriculture and forestry sector development through short termand long term training, field works and study tours  either in-country or abroad. This includes
graduate and postgraduate training at the National University and abroad, and diploma and associate
diploma level training in four agriculture and irrigation schools under the MAF located in Vientiane
Municipality, Louangprabang, Borikhamxay, Savanna khet and Champasack provinces. The standards
at the four schools need to be upgraded to intern ational level. At present, the MAF has 6, 841 staff in
the central, provincial and district levels.
Table: Crop Production (Tonnes)
NoItems
Crop1996 1997 1998 1999 2000 2001
1. Rice 1,413,500 1,660,000 1,674,500 2,102,815 2,201,700 2,334,500
2L o w l a n d
rice Paddy1,076,000 1,299,500 1,248,890 1,502,025 1,552,800 1,619,700
3 Dry season
rice Paddy71,500 113,500 212,110 354,000 390,150 436,200
4 Upland rice
Paddy266,000 247,000 213,500 246,790 258,750 278,600
5 Maize 78,095 78,300 109,900 96,110 117,000 111,869
6 Mung bean 1,157 1,500 1,700 1,510 1,100 2,809
7 Soybean 3,245 2,295 4,300 5,850 5,400 3,002
8 Peanut 11,857 12,000 15,000 12,950 13,200 16,779
9 Tobacco 26,040 28,000 25,600 23,350 33,400 30,081
10 Cotton 6,760 7,000 7,500 4,260 4,600 3,381
11 Sugar cane 87,058 95,000 170,200 173,600 296,960 208,850
12 Coffee 10,020 12,300 16,999 17,530 23,500 25,769
13 Tea 101 110 260 350 200 160WT/ACC/LAO/4
Page 51
NoItems
Crop1996 1997 1998 1999 2000 2001
14 Starchy
Root crops92,499 94,000 107,900 80,600 117,500 100,761
15 Vegetable 88,853 100,000 117,300 236,000 636,000 630,649
Table:  Livestock Production (per Head)
NoItems
Livestock1996 1997 1998 1999 2000 2001
1 Buffalo 1,211,700 1,223,800 1,092,740 1,008,000 1,028,000 1,051,400
2 Cattle 1,186,000 1,227,500 1,126,600 1,000,000 1,100,000 1,216,600
3 Pig 1,772,000 1,227,500 1,432,140 1,320,000 1,425,000 1,425,900
4 Poultry 11,656,000 11,947,000 12,176, 400 12,353,000 13,094,200 14,063,200
5G o a t s  a n d
sheep159,000 165,000 122,170 112,400 121,400 124,200
Table:  Fish Production
No Items 1996 1997 1998 1999 2000 2001
1 Capture 28,000 28,000 29,250 29,250 29,250 29,250
2 Aquaculture 12,000 14,000 43,885 43,885 43,885 43,885
3 Total 40,000 42,000 73,135 73,135 73,135 73,135
Question 137
Please provide a copy of the Tax Law and Customs Law (No.95/NA of 14 October 1995) and
(No. 4/94/NA of 18 July 1994)
Answer:
Copies of the two Laws are available from the WTO Secretariat.
Question 138
Section IV 1 (e) of document WT/ACC/LAO/3 states that "With respect to the importation of
rice, the right to apply quotas is reserved for f ood security purposes, notably when necessary to
support the minimum farm-gate price set by the Lao PDR in order to maintain the country’s
productive capacity of rice."  Please provide th e legal citation for the authority to apply these
controls and more information on the decision process used to determine and to apply quotas on
rice.
Answer:
The rice control in the Lao PDR is implemented according to Article 3 of the Notification on the
importation of rice No. 0100/MOC of 28 January 2000. This Notification does not refer to any quota.
It requires each province to make an annual plan on balancing a demand for rice within its own
province. If there is a short supply, importation of rice is allowed upon an agreement of governors ofprovinces concerned.WT/ACC/LAO/4
Page 52
Question 139
Thank you for the tariff information provided in  Table Annex 1.5 on page 69.  Please provide
the full Lao PDR tariff schedule, in electronic format.
Answer:
The information is available from the WTO Secretariat.
Question 140
Concerning the "Regulations on the Authorizat ion for the Operation of the Import-export
Business, No. 462/MOC:", what are the produc ts that are occasionally and seasonally
prohibited by the government that a re referenced in Part III Article 8?
Answer:
The current decrees and notifications (see answer 40 for details) no longer restrict trade on these
grounds.
Question 141
Concerning the "Notice of Amendment to Notification No 175/MOC:", why does Lao People’s
Democratic Republic ban all animal parts as provided for in Section 1.3?  What are the other
seasonal fruits banned, as referenced under Section 1.7?
Answer:
The current decrees and notifications (see answer 40 for details) no longer restrict trade on these
grounds. See answer 111 for details of restricted imports.
Question 142
Please provide us with information on the state controls covering the food products referenced
under section 3.1.
Answer:
The food products under the State control are indicated in the Notifications No. 0202/MOC.FTD and
0203/MOC.FTD.  For 2003, they are as follows:
1. Sugar
2. Rice3. Alcohol
4. Cigarette
5. Meat of swine, fresh, chilled or frozen
6. Meat of bovine animals
7. All kinds of fresh water fish
8. All kinds of milk products
9. All kinds of canned food (including canned fruits)10. Frozen meat fish and sea food
11. Seasoning (fish sauce, soya sauce, vinegar, tomato and chilly ketchup,  monosodium
glutamate)WT/ACC/LAO/4
Page 53
12. All kinds of candy and biscuits
13. All kinds of substances  for food  colouring
14. Other organic compound
15. Sweet substitution substance (other of raw sugar not containing added flavouring or
colouring matter)
16. All kind of beverage.
Question 143
Concerning the "Regulation on the Quarantine of Plants", please provide a comprehensive list
of the plant quarantine regulations and standards of the Lao PDR.
Answer:
At present, the Lao PDR has only a plant quarantine decree and a plant quarantine regulation as
follows:
1. Plant quarantine decree No. 66/PM of 23 March 1993.
2. Plant quarantine regulation No. 0639/MAF of 2 July 1993.
The full texts are available from the WTO Secretariat.
Question 144
Regarding Part III, Article 9, how does an organization, company, or individual obtain
permission to import from the Department of Agriculture and the Department of Agricultural
Extension?
Answer:
Permits to the import of agricultural products are issued by the Department of Agriculture of the
Ministry of Agriculture and Forestry.  If an or ganization, company or individual wishes to import
plants and plant products into the Lao PDR, they to firstly submit a request for import permit form the
Department of Agriculture. If the requested plant and plant products are not included in the list of
prohibited to import plant or plant products, the Department of Agriculture will issue the import
permit to the requested organizations.
The procedure for obtaining a permit is shown in the chart below.
Question 145
How does one obtain an import permit?
Answer:
Please see the answer to the previous question.
Question 146
What are the conditions specified for the importation of agricultural produce?WT/ACC/LAO/4
Page 54
Answer:
The Lao PDR has no specific conditions for the importation of agriculture produce, except for
Phytosanitary Certificates for the imported agriculture products from exporting countries.
Question 147
Under Part III, Article 11(2), what is the certificate referenced in this sentence and what is its
purpose?
Answer:
The certificate referenced to in this sentence is the Phytosanitary Certificate with the importing goods
from the original exporting country.
Question 148
Concerning the "Provisions on the Control of Export-oriented and Imported Foodstuff", how
does one obtain a food quality certificate fr om the Food and Medicine Control Committee as
referenced in Part II Article 4?
Answer:
Note that the reference used in this question actually should read “Article 11 Part V”.
In order to obtain a food quality certificate for export purposes, an exporter is required to complete an
application form that identifies the food to be exported.  The application form is available from theFood and Drug Department (FDD).  The application needs to be accompanied by evidence
(eg. processing records or evidence of inspection by FDD) of good hygienic practices and/or HACCP
being applied.  It also should be accompanied by a certificate of analysis from a competent analytical
laboratory, including the Food Quality Control Laboratory of the Ministry of Health.
Question 149
What are synthetic food products referenced under Part IV Article 8?
Answer:
 “Synthetic” food is simply a translation of the Lao meaning for fraudulent food.  That is the food that
attempts to imitate food commonly understood by c onsumers to be another food or products.  It
includes food that is mislabelled for fraudulent purposes, food that is diluted or mixed with cheaper orpoorer quality ingredients.
Question 150
What standards is the Lao PDR referring to in Part IV Article 8?
Answer:
The standards referred to are identified in the Elaborated Recommendations Relating to Regulations
on Quality Control of Export-Oriented and Imported Foodstuff No. 035/FMC, 1991.
In this document, the food not complying with standards includes:WT/ACC/LAO/4
Page 55
- Unsafe food;
- Food considered to be adulterated or fraudulent; and
- Food not complying with specific Lao PDR standards.
In relation to the latter point only a few standards have been elaborated at this stage and they were
established in 1991.  However, subsequent to its admission to Codex, the Lao PDR is in the process ofdeveloping standards in line with the Codex standards.  When being developed, these will replace
existing standards.  In the mean time, the Lao PDR is focusing on the development of modern food
law under which the new Codex related standards are expected to be established.
Question 151
Provide a complete list of the diseases and pests of quarantine significance in the Lao PDR.
Answer:
The list of significant diseases and pest of quarantine is available through document
WT/ACC/LAO/4/Add.1.
Question 152
Concerning the "Decree on Livestock Management in the Lao PDR", is the volume of livestock
and livestock product imports referred to in Chap ter II Article 5 based only on the animal herd
equilibration plan outlined by the Ministry of Agriculture and Forestry?
Answer:
The import volume of livestock and livestock product mentioned in Chapter II, Article 5 of the Decree
on Livestock Management in the Lao PDR is only ba sed on the animal herd equilibrium plan outlined
by the Ministry of Agriculture and Forestry eg. the domestic demand.
Question 153
Please provide a copy of the animal herd equilibration plan in translation.
Answer:
The animal herd equilibration plan is available through document WT/ACC/LAO/4/Add.1
Question 154
Please provide copies of all the regulations a nd provisions referenced in Chapter IV Article 9.
Answer:
All regulations and provisions in Chapter IV, Article 9 are converted into technical norms on
management of livestock and its products in the Lao PDR and they were put into force on the
20 January 2000 and the norms are available through document WT/ACC/LAO/4/Add.1.
Question 155
Concerning Lao PDR "Provisions on Quality Control of Domestically Produced Food
Products" 048/FMC, under Part V Article 12 saccharin is mixed in food and drink is forbiddenWT/ACC/LAO/4
Page 56
in domestic production.  Likewise, under Article 14 caffeine is forbidden in domestic
production.  Are these substances forbidden in imported foods?  What is the scientific basis?
Answer:
This provision was issued 10 years ago, in October 1991.  During that period, the country had limited
access to toxicological expertise upon which to make a sound scientific determination in isolation.  Ittherefore was required to make decisions to protect its consumers’ health based upon information
available in the literature and from information provided by other national regulatory agencies.
Saccharine was forbidden to be added to food and beverages as a result of a JECFA evaluation from
1980 (WHO Technical Report 683).  That document pointed out the possibility that consumption of
saccharine in high doses might contribute to bladder tumours.  JECFA has subsequently identified an
acceptable daily intake (ADI) of 5mg/kg body weight and consequently the Lao PDR has taken no
action against importers of this material up to this time.  Again it is anticipated that this requirementwill be revised in line with the Codex once the food law has been finalised.
In relation to caffeine, the 1984 data (Caffeine perspectives from recent research; edited by
P.B. Dews; Berlin, Heidelberg, New York, Tokyo, 1984) pointed to the teratogenic and carcinogenic
potential of caffeine.  Consequently, the requirement was included.  However, just as with saccharine,
the regulatory requirement has not been applied as many Lao people consume both tea and coffee andthe Lao PDR is a coffee exporter. It is noted that caffeine may be found in beverages including, soft
drink, tea, or coffee.
Hence neither caffeine nor saccharin are actually prevented from sale domestically or in relation to
imported food.  The requirements are subject to review.
Question 156
Please provide a list of forbidden ingredients in foods.
Answer:
The list of forbidden ingredients in food has yet to be prescribed.  The Codex Alimentarius has been
used to control ingredients in food.
Question 157
Concerning the "Provisions on Quality Cont rol of Domestically Circulated Foodstuff"
105/FMC, do these provisions apply to imported foodstuff?
Answer:
These provisions relate to both domestically-produced and -processed food and imported foods once
they are distributed in the domestic market.  The provisions have been used to control the quality of
domestically-distributed foodstuff, including imported food.
Question 158
Under Part III Article 5, it states that circulated foodstuff must wear labels established by the
FMCC.  Will stick-on labels meet this requireme nt?  Please provide copies of the FMCC labels.WT/ACC/LAO/4
Page 57
Answer:
Article 5 of Part III of the “Provisions on Quality Control of Domestically-circulated Foodstuff”
105/FMC refers to the attached “Additional Explanation on Regulation of Quality Control of
Domestically Circulated Food products No. 027/MOH, 1992, which relates to labels. This regulation
was issued since 1992 that is not appropriate to the current situation of the Lao PDR. However,subsequent to its admission to Codex, the Lao PDR is in the process of developing standard in line
with Codex standards. The regulation of label will also be revised with consideration to Codex upon
completion of the Food law.
Question 159
Part V Article 9 prohibits food colourings in  food and drinks except for those officially
authorized.  Please provide a list of all authorized food colourings.
Answer:
Regarding the Addition Explanation on Regulation of quality control of Domestically food product
No. 105/FDA Part V Article 9 concerning food colour, it is the same as the regulation on label above,
this regulation will be revised with consideration to the Codex upon completion of the Food law.
Question 160
Part V Article 10.  What is the scientific basis for forbidding saccharin in food and drinks?
Answer:
Refer to the answer to question 155
Question 161
Part V Article 11 prohibits preservatives in food and drinks except for those officially
authorized.  Please provide a list of all authorized preservatives.
Answer:
Officially-authorized preservatives are those permitted by the Codex and levels permitted in food as
stated in the Codex.
Question 162
Part V Article 12 prohibits the use of caffeine in food and drinks except for those officially
authorized.  What is the scientific basis for forbidding caffeine in food and drinks?   Does the
Lao PDR. allow the consumption of domestically produced beverages containing caffeine, e.g.,
tea?
Answer:
Refer to the answer to question 155.WT/ACC/LAO/4
Page 58
Question 163
Under IV.2.(c) on page 22 it is stated:  "With re spect to the export of rice, the right to apply
regulation is reserved for food security purposes".  Could Lao PDR provide recent data
concerning domestic production, consumption and trade?
Answer:
The Lao PDR provides recent data concerning domestic production, consumption and trade of rice.
The data is illustrated in the table below:
Table. Information on rice production, consumption and trade of the Lao PDR in 1995-2001
Rice consumption
No YearPaddy
production
(Tonnes)Rice
(Tonnes)1 Human
consumption
(Tonnes)2Other use
(Tonnes)3Total
(Tonnes)Total import
(Tonnes)Total
export
( Tonnes)
1 1995 1,417,829 879,054 828,540 210,973 1,039,513 15,939 -
2 1996 1,413,094 876,118 849,253 210,268 1,059,521 26,731 -
3 1997 1,660,000 1,029,200 870,300 247,008 1,117,308 19,927 -
4 1998 1,674,500 1,038,190 891,900 249,165 1,141,065 5,914 -
5 1999 2,102,815 1,264,633 916,380 303,512 1,219,892 4,707 -
6 2000 2,201,700 1,324,102 939,600 317,784 1,257,384 - -
7 2001 2,334,500 1,403,968 963,000 336,952 1,299,952 - -
Source: Agricultural Statistics Yearbook 2001, MAF
Question 164
Under IV.4.(b) on page 28 Lao PDR states:  "T here are no export subsidies for agricultural
products."
− Does Lao PDR reflect on the introduction of refunds for the future?
− If yes, for which products?
Answer:
It is difficult to predict future policy. Lao PDR measures will be consistent with WTO rules once it
accedes.
Question 165
Under IV.4.(d) on page 28 it is sa id:  "There are no export credits, export credit guarantees, or
insurance programs for agricultural products."
− Does Lao PDR reflect on the introduction of these facilities for the future?
− If yes, for which products?
                                                     
1 Conversion rate from paddy to rice is 62 kg
2 Annual consumption of rice per capita is 180 kg
3 The total amount of rice for other use is around 24% including waste 10%, beverage and food
industries (4%), animal feeds (6%) and seeds 4 (%)WT/ACC/LAO/4
Page 59
Answer:
It is difficult to predict future policy.  Lao PDR measures will be consistent with WTO rules once it
accedes.
Question 166
Lao PDR states on page 2 under "main economic indicators" that rice is a predominant staple
in the traditional diet, within the meaning given to that term in Annex 5, Section B of the
Agreement on Agriculture.  Are there concrete consequences of this statement in the sense of
measures that Lao PDR envisages for the fu ture market access possibilities for rice?
Answer:
Future policy will be designed to comply with WT O obligations and meet the feed security needs of
the Lao PDR.
Question 167
On page 4 under 2 (a) (ii) Lao PDR mentions the development objectives concerning agriculture
of the 1996-2000 Socio-economic Development Plan.
− Can Lao PDR give information about the state of progress for each of the six main
programs indicated for agriculture and forestry?
− Can Lao PDR inform about the instruments used in each of these main programs?
− Is there a follow-up after 2000?
Answer:
The answer of this question is referred to the answer 136.
Question 168
On page 5 under 2 (a) (iii) Lao PDR mentions concentration on rural development as a strategy.
− Can Lao PDR give information about the state of progress for each of the four main
targets (reduction of revenue inequalities, er adication of poverty in rural areas, self-
sufficient and market-oriented production and strengthening village administration)?
− Can Lao PDR inform about the instruments used for each of the four elements?
− Is there a follow-up after 2000?
Answer:
In the past, rural development activities were under the National Leading Committee for Rural
Development of the Prime Minister's Office (PMO). At the provincial level, the National Leading
Committee for Rural Development were headed by Governors acting as coordinating bodies for all
rural development activities through out the country.
In general, most of the areas in the Lao PDR are rural and agricultural development is closely linked
to rural development. Nearly 85 per cent of the population is farmers with some 66 per cent relying onsubsistence agriculture. A major part of the rural areas are in the uplands with more than 1.5 million
permanent residents. Most of the uplanders rely on shifting cultivation for their livelihood and haveWT/ACC/LAO/4
Page 60
highest poverty and lowest quality of life indicators in the country. The incidence of poverty in the
Lao PDR is approximately 39 per cent of the total population or nearly 2 million people.
The Government of the Lao PDR has set up four main targets of rural development, including
reduction of revenue inequalities, eradication of poverty in rural areas, self-sufficient and market-
oriented production, and strengthening village administration. To materialize these main targets, theGovernment has enormously invested in the following major sectors: agriculture and forestry
(irrigation and research), education (basic primary schools), health (primary heath care), roads (inter-
village roads), telecommunications (inter-district telecommunication link), transport and rural
electrification.
Question 169
In IV.4.(e) on page 29 Lao PDR mentions 4 domestic support measures in operation to improve
food output and food security funded through the regular budget.  Could Lao PDR report onthe implementation of these measures?
Answer:
The budgets used and the achievement of the implementation of the 4 domestic support measures will
be detailed in document WT/ACC/4 of the answ er to question 171, and the answers to questions 136,
163, and 168, respectively.
Question 170
In IV.4.(e) on page 29 Lao PDR mentions a sche me to increase rice production. Could Lao PDR
report on the implementation of this scheme?
Answer:
Refer to answer 136.
Question 171
Please provide information on agricultural domestic support and export subsidies in the format
outlined in document WT/ACC/4 prior to the next WP meeting.
Answer:
The Lao PDR will provide the information on DS and ES in WT/ACC/4 in due course.
Question 172
We note the difficulties faced by the Lao PDR in providing information on domestic support in
the agriculture sector in the format required by WTO document WT/ACC/4.  This will be a
very important part of the Lao PDR’s accession to the WTO, and we encourage reform of the
budgetary process that will enable this to be undertaken.  Is the Lao PDR able to indicate the
timetable within which it might be possible for this information to be collected, assembled and
provided to the Working Party?WT/ACC/LAO/4
Page 61
Answer:
The difficulties faced by the Lao PDR in providing information on domestic support in the agriculture
sector in the format required by WTO document WT/ACC/4 raised by Australia can be avoided and
overcome by improving the Information System and establishing the Agricultural and Forestry
Information Center within the MAF. The center wi ll provide all related information on agriculture and
forestry production and development, especially information on domestic support.  Moreover,
hopefully the Lao PDR will provide information on DS and ES in WT/ACC/4 table as earliest
possible.
 V. TRADE-RELATED INTELLECTUAL PROPERTY REGIME
 1. General
 (a) Intellectual property policy
Question 173We welcome steps taken by the Lao PDR in ord er to introduce legislation that will protect
trademarks, patents, plant varieties utility mode ls, industrial designs, copyright and other areas
of intellectual property rights.  We note that, as a least developed country, the Lao PDR would
be entitled to a transition period for impl ementing the WTO Agreement on Trade Related
intellectual Property Rights until 1 January 2006, with a possibility to obtain an extension by
the TRIPs Council upon duly motivated request, by virtue of Article 66:1 of the TRIPs
Agreement.
Nevertheless, we would recommend the Lao PDR to start preparing the steps to be undertaken
to establish a TRIPs-compatible intellectual property regime in Laos.  In that context, we take
note of the Lao PDR’s request to other WTO Members to provide comprehensive technicalassistance in the TRIPs area.
Answer:
The Lao PDR is aware that the transition period for implementing the WTO Agreement  on TRIPS is
until 1 January 2006, with a possibility of extensi on by the TRIPS Council if requested.  In order to
ensure Lao laws compatibility with the WTO, technical assistance is sought from WIPO.  Allintellectual property laws are based on WIPO model laws.
Question 174
We note that laws are in preparation relating  to intellectual property.  Could the Lao PDR
provide details of the draft laws, their planned coverage, and the timetable for their
implementation?  We note also that the Lao PDR has plans to strengthen enforcement
procedures.  Could the Lao PDR provide details?
Answer:
In 1995, the Lao PDR issued the Decree No. 06/PM of 18 January 1995 on Trademarks (which has
been provided to the WTO Secretariat) and, in 2002, Decree No. 01/PM dated 17 January 2002 on the
protection of patents, petty patents and industrial designs.  The text of that is provided.
The following laws are in the process of drafting:WT/ACC/LAO/4
Page 62
- Copyrights and Neighbouring Rights law to be adopted in 2004.
- Law on  Protection of New Varieties of Plants to be adopted in 2005.
- Integrated Circuit Law to be adopted in 2006.
In order to encourage the implementation of the laws, the Lao PDR has disseminated laws, decrees
and regulations related to IPRs, organized training and seminars within and outside the country forofficers responsible for law enforcement.   In addition, they has exchanged information on IP with
other countries.
Question 175
We understand that the Lao PDR is in the process of drafting its intellectual property laws in
accordance with the WTO Trade-Related Aspects of Intellectual Property Rights (TRIPS)
Agreement.  To assist the Lao PDR, and to ensure that the laws are consistent with TRIPS when
they are enacted, we suggest that the Lao PDR provide the draft laws for WP review.  What is
the Lao PDR’s timetable for development of these laws?
Answer:
See the answer to the previous question.  After completion of the draft laws, they will be submitted to
the working party for comment.
 (b) Responsible agencies for policy formulation and implementation
Question 176
Please list and describe the functions of those government entities within the government of the
Lao PDR that have intellectual property enforcement authority.
Answer:
The government agencies responsible for the enforcement of IP laws are:
1. Customs Department, Ministry of Finance.
Customs are responsible for control, prevention and confiscation infringing goods at different
check points on the Lao PDR border.
2. Economic Crime Division, Ministry of Interior.
The Police are responsible for control, enforcement and seizure of infringing goods in the
Lao PDR.
3. Office of Economic Dispute Resolution, Ministry of Justice.
The office of Economic Dispute Resolution has an authority to settle disputes over intellectual
property.
4. Department of Intellectual Property,  Standardization and Metrology, STEA.
The Department of Intellectual Property, Standardization and Metrology has the responsibility
to coordinate with other relevant agencies on the enforcement of IP laws.WT/ACC/LAO/4
Page 63
Question 177
What does the Department of Intellectual Property, Standardization and Metrology, which has
the overall responsibility for coordinating the im plementation of policy on intellectual property,
do to fulfill this role?  Which Ministry does it report to?
Answer:
The Department of Intellectual Property, Standardization and Metrology pursues following functions:
- To administer IP matters throughout the country.
- To draft laws, decrees and regulations related to IP which are submitted to the governmental
authorities for adoption.
- To prepare strategic development plan for IP.
- To develop human resources in the area of IP.
- To establish an IP registration system.
- To coordinate and cooperate with other countries and international organizations on IP issues.
- To disseminate information on IP.
- To coordinate with other relevant agencies on IP.
- To receive petitions, claims and complaints from the public and to coordinate with relevant
agencies to resolve them.
The Department of Intellectual Property, Standardization and Metrology is part of the Science,
Technology and Environment Agency under the Prime Minister’s Office.
Question 178
Please describe the roles played by the Department of Legislation in the Ministry of Justice, and
the other Ministries - including the Ministry of Information and Culture and the variousMinistries responsible for agriculture, industry, commerce and the interior - in the development
of intellectual property policy and law in th e areas that come with in their jurisdiction.
Answer:
In the development of intellectual property policy and law in the areas that come within their
jurisdiction, certain ministries have following functions:
- To ensure consistency with other relevant laws, the Department of Legislation, Ministry of
Justice, gives legislative advice on drafting laws, and commends and endorses proposed laws
before they are sent to the National Assembly.
- The Science, Technology and Environment Agency coordinates with the Ministry of
Information and Culture and other Ministries in the formulation of the laws on copyrights and
related rights.
- The Ministry of Agriculture and Forestry provides information and data with respect to the
Law on Protection of New Plant Varieties.
- The Ministry of Industry and Handicraft provides information and data necessary for drafting
the Decree on Patents, Petty Patents, Industrial Designs and Integrated Circuits.
- The Ministry of Commerce provides information and data necessary for drafting the Decree
on Trademark Registration.
- The Department of Customs, Ministry of Finance, provides data and is responsible for
enforcement and settlement of violation of intellectual property rights at the border.   
- The Ministry of Interior is responsible for enforcement of IPRs.WT/ACC/LAO/4
Page 64
(c) Membership of international intellectual property conventions and of regional or
bilateral agreements
Question 179
We understand that the Lao PDR intends to become a member of the Berne Convention for the
Protection of Literary and Artistic Works, th e Patent Cooperation Treaty, and is considering
laws that will enable the Lao PDR to comply with the 1961 Rome Convention for the Protection
of Performers, Producers of Phonograms and Broadcasting Organizations and the 1989
Washington Treaty on Intellectual Property in Re spect of Integrated Circuits.  Has there been
additional progress in achieving these goals?
Answer:
The Lao PDR is in the process of drafting a la w on Copyrights and Related Rights based on WIPO
Model Law and is preparing to adhere to the Bern Convention for the Protection of Literary andArtistic Works by 2004.  It is most likely to become member of the PCT in 2003 and of other
conventions no later than 2006.
Question 180
We urge the Lao PDR to also join the Geneva Phonograms Convention and the Brussels
Satellite Convention.
Answer:
The Lao PDR will study accession to the Geneva Phonograms Convention and the Brussels Satellite
Convention.
Question 181
Document WT/ACC/LAO/3 states that the Lao PDR is a member of WIPO.  In light of this
connection, we urge the Lao PDR to adopt the WIPO Copyright Treaty (WCT) and the WIPO
Performers and Phonograms Treaty (WPPT).  What are Lao PDR’s plans in this regard?
Answer:
The Lao PDR needs to have laws on Copyrights and Related Rights before it can accede to the WIPO
Copyright Treaty (WCT) and the WIPO Performer s and Phonograms Treaty (WPPT). Please see the
answer to question 179.
 2. Substantive standards of protection, incl uding procedures for the acquisition and
maintenance of intellectual property rights
 (a) Copyright and related rights
Question 182
Concerning efforts to develop a copyright law in  line with the Berne Co nvention and the WTO
TRIPS Agreement, has the Lao PDR contacted WIPO to request technical assistance in thedrafting of this copyright law?  What model, if  any, is being used to draft this law?  Please
describe the process to date in preparing this  legislation, and approximately when enactment
and implementation of the law are expected.  WP members would welcome an opportunity toWT/ACC/LAO/4
Page 65
review and comment upon this draft legislation, which could assist in ensuring a WTO-
consistent text.
Answer:
The Lao PDR receives technical assistance from WIPO on the drafting of the law on Copyrights and
Related Rights based on the WIPO Model Law. The Science Technology and Environment Agency isdrafting the law and it is expected to be finalized and implemented by 2004. We will seek comments
on the draft from members of the Working Party.
 (e) Patents
Question 183
Recognizing that the Government of the Lao PDR has finalized but not yet approved a patent
law, the following questions are directed toward s the Lao PDR’s draft patent law, when it is
developed.
 Please describe in detail the way in which the patent law of the Lao PDR implements Article 27
of the TRIPS Agreement, indicating any exceptions provided for, and including details
regarding the protection for micro-organisms and non-biological and microbiological processes
and plant varieties.  Please cite to the relevant provisions of the law.
Answer:
Articles 06, 07 and 10 of the Decree No. 01/PM dated 17 January 2002 on Patents, Petty Patents and
Industrial Design stipulated the following:
- “Patents” means the title granted to protect an invention whereas an “invention” means an
idea of an inventor which permits in practice the solution to a specific problem in the filed of
technology.
- Any invention shall be entitled to protection if it is new, involves an inventive step and is
industrially applicable.
- Any invention is new if it is not anticipated by prior art which shall consist of everything
disclosed to the public, anywhere in the world by publication in tangible form or by oral
disclosure, by use or in any other way, prior to filing or, where appropriate, the priority date,of the application claiming the invention.
- Any invention shall be considered as involving an  inventive step if, having regard to the prior
art relevant to the application claiming the invention, it would not have been obvious to a
person having ordinary skill in the art.
- Any invention shall be considered industrially applicable if it can be used in any kind of
industry, handicraft, agriculture, fishery and services.
- Inventions excluded from patent protection are: discoveries, scientific theories and
mathematical methods, schemes, rules or met hods for business, performing purely mental acts
or playing games, methods for treatment of the human and animal body, inventions which are
contrary to the public order or the national cultural morality.
- Theses articles are in conformity with Article 27 of the TRIPS Agreement.
Question 184
Please describe in detail the rights provided patent holders under the patent law of the Lao PDR
and cite to the relevant provisions of the law.WT/ACC/LAO/4
Page 66
Answer:
Based on Articles 18 and 19 of the Decree 01/PM dated 17 January 2002, the rights conferred to the
owner of patents, petty patents and industrial designs are as follows:
- Making, importing, stocking, offering for sale, selling and using of product when the patent
has been granted in respect of product;
- Using the process or doing any of the acts relating to the proceeding of making, importing,
stocking, offering for sale, selling and using of product when the patent has been granted in
respect of process.
- The owner of patent shall have the rights to institute court proceedings against any person or
legal entity who infringes the patent by performing without his agreement. But the rights shall
not, before the grant of patent, extent to acts in respect of articles which have been put on the
market by himself or by his consent or to th e use of articles on any vehicle which temporarily
enter the airspace, territory or waters in the Lao People's Democratic Republic or to any act
done for experimental purposes.
Question 185
Please describe in detail whether the draft patent law of the Lao PDR provides protection for
plant varieties, as required by Article 27.3(b) of the TRIPS Agreement? Please provide citationsto those laws.
Answer:
The Decree on Patents, Petty Patents and Industrial Designs does not include the protection of new
varieties of plants.  However, the Lao PDR is planning to draft a law for this purpose. In the mean
time, the Lao PDR may authorize that the protection of new varieties plants can be implementedunder the Decree No. 01/PM to protect them.
Question 186
What provisions of the Lao PDR’s draft patent law provide patent owners the right to prevent
others from making, using, offering for sale, selling, or importing a patented product or from
using a patented process or using, offering for sale, selling or importing a product produceddirectly using such process, as required by Article 28.1 of the TRIPS Agreement?
Answer:
Articles 5 and 18 of the Decree No. 01/PM provide the right to the owner of a patent to protect his/her
invention from violations such as making, importing, stocking, offering for sale, selling and using of
the product or process, in accordance with the terms of Article 28.1 of the TRIPs Agreement.
Question 187
Please describe the provisions of the draft patent law of the Lao PDR that give patent owners
the right to assign the rights in a patent, tran sfer the rights by succession, or license them, as
required by Article 28.2 of the TRIPS Agreement.
Answer:
Article 5, paragraph 1 of the Decree on Patents, Petty  Patents and Industrial Designs stipulates that the
owner of a patent, petty patent or industrial designs, before allowing another person to use such aWT/ACC/LAO/4
Page 67
patent, petty patent or industrial design in the Lao PDR, shall notify the Science, Technology and
Environment Agency in a written declaration. Patent owners have the right to assign, transfer by
succession or licence the rights in a patent as required by Article 28.2 of the TRIPS Agreement.
Question 188
Please provide citations to the provisions of the draft patent law that require applicants to
disclose the invention in a manner sufficiently clea r so that one skilled in the art can carry it out,
as required by Article 29 of the TRIPS Agreement.
Answer:
Article 11 paragraph 2 of the Decree on Patents, Petty Patents and Industrial Designs stipulates that
the description shall disclose the invention in a manner sufficiently clear and complete for the
invention to be carried out by a person having ordinary skill in the art, and shall, in particular, indicate
at least one made known to the applicant for carrying out the invention. This is in conformity withArticle 29 of the TRIPS Agreement.
Question 189
Does the Lao PDR’s draft patent law include any exceptions to the exclusive rights conferred by
a patent? If so, please describe such limitations in detail.
Answer:
Articles 20 and 21 of the Decree on Patents, Petty Patents and Industrial Designs define the non-
exclusive right of a patent owner as follows:
If the purpose of right and public interest of the Lao PDR in particular relating to the national security,
nutrition, health or the development of any vital sector of the national economy or relevant body has
determined that the manner of exploitation by the owner of the patent or his consent is an anti-competitive practice, the Government may designate a Government Agency or a third person to
exploit a patented invention without the agreement of the owner of the patent but it shall be subject to
the authorization of limited exploitation and to the payment to the said owner of an adequate
remuneration.
When the patented invention is not exploited or is insufficiently exploited after a period of four years
from the date of filing of the patent application or three years from the date of the grant of the patent,
whichever period expires last, the Registry may issue a non-voluntary licence if it is satisfied that, by
working the invention locally or by importation in the Lao PDR, except if the owner of the patent
satisfies the Registry that circumstances exist which justify the non-exploitation or insufficient
exploitation of the patented invention.
Question 190
Does the law provide for use of the subject matter of a patent without the authorization of the
right holder?  If yes, please describe these uses.
Answer:
The Decree No. 01/PM on Patents, Petty Patents and Industrial Designs does not allow any person to
exploit any item that relates to a patent without the consent of the patent owner.WT/ACC/LAO/4
Page 68
Question 191
Please explain whether the patent laws of the Lao PDR provide an opportunity for judicial
review of any decision to revoke or forfeit a patent, as required by Article 32 of the TRIPS
Agreement.
Answer:
Article 39 of the Decree No. 01/PM dated 17 January 2002 on Patents, Petty Patents and Industrial
Designs stipulates that a third person may apply to the registry or institute court proceedings to cancel
a  registered patent, petty patent or industrial designs which does not meet the requirements as defined
in this Decree. This is in conformity with Article 32 of the TRIPS Agreement.
 Question 192
What is the term of protection for patents in the draft patent law of the Lao PDR?  Please
describe any provisions for extension of the term of protection and cite to the relevantprovisions of the law.
Answer:
Based on Article 17 of the Decree No. 01/PM on Patents, Petty Patents and Industrial Designs, the
protection for a patent is 20 years without renewal.
Question 193
Please provide a timetable as to when it is pred icted that the government of the Lao PDR will be
finalizing and approving the draft patent law.
Answer:
The Lao PDR issued the Decree No. 01/PM on Patents, Petty Patents and Industrial Designs on
17 January 2002.
 4. Enforcement
 (a) Civil judicial procedures and remedies
Question 194
Please describe the remedies for infringing goods (i.e., destruction, disposal or both), pursuant
to Article 59 of the TRIPS Agreement.
Answer:
The remedies for infringing goods are destruction or in disposal the case of negative impacts on the
environment, in accordance with the terms of Article 59 of the TRIPS Agreement.
Question 195
According to document WT/ACC/LAO/3, the Lao PDR plans to strengthen the judicial system
to better enforce civil judgements in intellectual  property protection cases.  What are the steps
that the Lao PDR  plans to take to strengthen the system?WT/ACC/LAO/4
Page 69
Answer:
In order to enforce the intellectual property protection cases and better use of the judicial system, the
Lao PDR will further promote the public awareness on IPR’s by means of organizing conferences for
the public, seminars, study tours, in-country and overseas training for the judges and concerned
officers dealing with enforcement. In addition, ther e are and will be the exchanges of IP information
with other countries as well as international organizations.
 (b) Provisional measures
Question 196
According to document WT/ACC/LAO/3, (section V:4(b) on provisional measures), courts in
the Lao PDR have the authority to apply protective measures under the Civil Procedure Law to
disputes involving intellectual property.  Please  list and describe these protective measures.
Answer:
Under Articles 50 and 85 of the Civil Procedure Code (1990) courts in the Lao PDR have the
authority to apply provisional measures, as described below:
Article 50: authorizes the seizure of property. If , during investigation, it is found that the list of
property, the goods and material relate to the case and it is useful for the court or in response to a
request of the either party in the case, the court will  order the seizure or taking away of the goods and
materials as may the case until the final ruling.
Article 85: authorizes that in the case of urgency,  the tribunal may order certain urgent measures in
cases where goods and materials may be perishable or deformed prior to the court proceeding. The
court may order either party in conflict or any individual to take care of the goods and materials.
 (c) Any administrative procedures and remedies
Question 197
According to document WT/ACC/LAO/3, administrative decisions regarding intellectual
property disputes are in writing and delivered without delay.  Are these decisions available to
the public so that people can become familiar with the law?
Answer:
Administrative decisions on intellectual property disputes are made in writing and are delivered to
both parties without delay.  These are disseminated via newspaper, radio and TV for public purposes.
Question 198
According to document WT/ACC/LAO/3, there is a tradition in the Lao PDR of settling
disputes through administrative channels in the Department of Intellectual Property
Standardization and Metrology and/or through the Committee on Economic Arbitration.
Decisions made by the latter, however, are not final, binding and enforceable.  In such cases,
please explain whether a complainant who has had its intellectual property infringed, can bring
its case directly to a court without first taking its case through the administrative process?WT/ACC/LAO/4
Page 70
Answer:
The administrative procedure is generally effective. Complainants have the option of bringing a case
directly to court without using the administrative procedure.
Question 199
Please describe the criminal and civil penalties available for infringement of a trademark.
Answer:
Currently, the Lao PDR has only Decree No. 06/PM dated 18 January 1995 on Trademark
Registration. This Decree does not stipulate penal sanction for violators but the civil code can be used.
The Lao PDR has a plan to enact the Decree into law to provide for civil and penal penalties for
infringement of a trademark.
Question 200
Do judges and administrative officials have the authority as required in TRIPS Article 44.1 to
issue injunctions (or equivalent measures) to ord er a party to desist from an infringement and
to prevent infringing goods from entering the ch annels of commerce.  Please describe in detail
the procedures in issu ing such injunctions.
Answer:
Judges and responsible administrative officials have the authority to issue injunctions to order a party
to desist from infringement and to prevent infringi ng goods from entering the channels of commerce
as required by Article 44.1 of the TRIPS Agreement.
 (d) Any special border measures
Question 201
Please confirm whether the Customs Law of th e Lao PDR and any amendments to this law,
contains provisions that provide for the prohibition of importation of goods contradicting the
provisions of the intellectual property laws.
Answer:
While the customs law does not expressly authorize customs to enforce at the border violations of
intellectual property law, Article 104 stipulates that in the performance of their duties, customsofficers shall strictly implement instructions, customs regulations and law and other laws. The
Customs Department considers that this gives customs officers the power to implement laws including
IPR Law.
The revision of the customs law which is currently under review (see answer no. 85) contains Article
94 which would authorize Customs to prohibit impor ts which contravene IPR law and to implement
the Ex Officio approach to enforcement of IPR as required in WIPO conventions.WT/ACC/LAO/4
Page 71
Question 202
Please describe in greater detail the procedures , such as application, required information for a
complaint, process and time-frame for notifying applicant of acceptance, effective period for
border enforcement action,  for protecting  intellectual property at the border.
Answer:
The owners of IPR’s makes application, with eviden ce, to the Department of Intellectual Property,
Standardization and Metrology of STEA. After consid eration, the Department of Intellectual Property
will coordinate with the responsible authority to settle the case.  The Department of Intellectual
Property will coordinate with th e Customs Department for action in relation to border measures.
 5. Laws, decrees, regulations and other legal acts relating to the above
Question 203
Please report on the measures that the Lao PDR is taking to develop legislation to implement
the WTO Agreement on TRIPS and to enforce intellectual property rights.  When this
legislation is developed, please use the checklist contained in document WT/ACC/9 to describe
how it meets the requirements of the WTO Agreement on TRIPS.
Answer:
When drafting Intellectual Property regulations, the Lao PDR first takes into consideration the
requirements of the TRIPS Agreement.  Technical assistance available from WIPO is used when
preparing drafts.  Provisions are based on WIPO m odel law. Before Laws are promulgated they are
sent WIPO for comment.
A report on the checklist provided in ACC/9 will be provided in due course.
VI. TRADE-RELATED SERVICES REGIME
1. General
Question 204
Please provide information concerning all form s of subsidies affecting trade in services.
Answer:
No subsidies affecting trade in services appear in the government budget.
Question 205
Please provide more information on the require ment that foreign investors must upgrade the
skills of their Lao employees.
Answer:
Foreign investors have an obligation to upgrade the skills of their Lao employees, through such
techniques as training within the Lao PDR or abroad. Foreign investors shall give priority to Lao
citizens in recruiting and hiring their employees.WT/ACC/LAO/4
Page 72
Details are provided in the update of the investment law which has been supplied in response to
question 14.
Question 206
Please describe the limits on the total number of service suppliers for public utilities,
telecommunications and postal services.
Answer:
The power and water sectors do not provide for provision of services by private entities.  There is no
limit on the numbers of service providers in all sectors of telecommunications, except international
telephony for the time being. With postal services, delivery of letters is restricted to the government
utility, but no limit exists on the number of providers of other mail, parcel and delivery services. See
also answers to other questions.
Question 207
Document WT/ACC/LAO/3 states that a single license is required for the supply of services in
the Lao PDR.  Please explain in detail the criteria  and requirements to be fulfilled in order to be
granted a licence.  Are such criteria and requirements compatible with GATS Article VI?
Answer:
The procedure for foreigners to provide services is the same as for any foreign investor. Please see
answer 14 for details on foreign investment procedures as well as page 46 in Document
WT/ACC/LAO/3. These procedures are consistent with the terms of Article VI of GATS.
Question 208
Please also list the services activities that may be subject to additional qualification and/or
registration requirements, and provide deta iled information on such requirements.
Answer:
There are no services activities that may be subject to additional qualification and/or registration
requirements other than those referred to in WT/ACC/LAO/03.
Question 209
Document WT/ACC/LAO/3 states that the FIMC is a new agency.  Does the Foreign Investment
Management Cabinet report directly to the Prime Minister?  If not, to what Ministry does the
FIMC report?
Answer:
Before 13 July 2001, the Foreign Investment Management Cabinet (FIMC) reported directly to the
Prime Minister’s Office.
According to the Presidential Decree No. 66/LP DR dated 13 July 2001 and the prime Minister's
Decree No. 150/PM dated 16 July 2001, the FIMC was changed to the Department for Promotion and
Management of Domestic and Foreign Investment. The new department is no longer under the Prime
Minister's Office. It is now part of the Committee for Planning and Cooperation (CPC).   TheWT/ACC/LAO/4
Page 73
Committee is headed by a President with Ministerial status.  This department reports directly to the
Committee for Foreign Cooperation and Domestic Investment, which is under the CPC.
Question 210
We would appreciate receiving more information on the forthcoming legislation on investment
as soon as it is available.
Answer:
Please see the answer to question 14.  In addition to Decree No. 46/PM dated 23 March 2001, which
added new schedules to the investment law, De cision No. 013/CPC, dated 27 February 2002 of the
chairman of the committee for investment management, foreign cooperation and domestic investment,
has been adopted.  It sets out rules for consideration and approval of foreign investment projects in the
Lao PDR. The purpose is to speed up approvals.  A copy is available through document
WT/ACC/LAO/4/Add.1.
Decree on Role, Responsibility and Rights of the Committee on Foreign and Domestic Investment
and Cooperation No. 64/PM dated 23 April 2003.
Presidential Decree on Domestic and Foreign In vestment Promotion Poli cy No. 01/LPDR dated
5 June 2000.
Question 211
The Lao PDR states in document WT/ACC/LAO/3 that the government has launched "a
process of broad-based privatization."  Which service providers or service industries are being
privatized?  What is the timetable for privatization?  Please describe how the Lao PDR intends
to deal with foreign investment or ownership in newly-privatized services industries.
Answer:
Please see answer 20 for an update on privatization.
There is no specific guidance from the government  of the Lao PDR regarding the privatization in the
service industries as part of the government’s process of broadly-based privatization.  It cannot be
said at this point what services enterprises will be privatized. Privatization has occurred in
telecommunications, transportation, insurance, real estate and tourism.  The Lao PDR favours JointVenture models and initially can hold 51 per cent of shares, with the intention of expanding the share
of private investors later.
The government is currently applying a State-Own ed Enterprise reform program to the following
enterprises:
- Electricite’ du Laos.
- Lao Airlines.
- National Tourism.
-
 State owned commercial banks.
- Water Supply  - decentralization of the Vientiane Municipality authority.
The exact timetable for the restructuring program of these enterprises has not been determined.
However, the government is planning to have some state owned enterprises restructured by 2002 and
some by 2003.WT/ACC/LAO/4
Page 74
Please see the answer to question 246 on privatization of the State controlled banks.
 Business Services
 - Professional Services
Question 212
Is the Lao PDR a party to any agreement concerning mutual recognition of professional
qualifications?
Answer:
Yes, currently, the Lao PDR is preparing a framework for a Mutual Recognition Arrangement (MRA)
with other members of ASEAN.
Question 213
Please provide a detailed description of the regulations applying to the field of professional
services.
Answer:
Details of provisions governing the legal and financial services are provided in the memorandum and
in the answers to the specific questions on business services.  General rules which set conditions on
foreign investment in some professional services ar e detailed in the schedules in the Investment law
which is addressed in question 14.  In the business services sector, foreign providers require foreigninvestment licenses, like other foreign investors, and the provisions governing that are also detailed in
the answer to question 14.  There are no other specific regulations affecting professional services.
Question 214
Are foreigners granted free market access and nati onal treatment?  If not, what are the specific
limitations?  Do nationality requirements apply to other activities than legal services?
Answer:
The foreign investment law specifies what sectors are open for foreign investment, what sectors are
open with restrictions and what occupations are reserved for Lao nationals.  Details are provided in
answer 14.  Once Investment licenses are given, foreign nationals receive treatment no less favourable
than nationals.
Question 215
Does the Lao PDR intend to submit a substant ial offer on professional services in the
framework of the GATS, binding full market access and national treatment for foreign service
suppliers?  Is the Lao PDR planning to schedule commitments in other professional services
sectors, such as Architectural services, advertis ing services, management consulting services or
printing and publishing services?WT/ACC/LAO/4
Page 75
Answer:
In the process of acceding to the WTO, the Lao PDR intends to submit a substantial offer on
professional services in the framework of the GATS, covering market access and national treatment
for foreign service suppliers.
Yes, the Lao PDR is planning to schedule commitments in other professional services sectors, such as
architectural services, advertising services, management consulting services, printing and publishing
services.
 (a)  Legal Services
Question 216
In which field of the law foreign lawyers are allowed to practice?
Answer:
Foreign law firms are permitted to open offices in the Lao PDR to provide advice to clients on
domestic laws and international laws.  Foreign law firms are permitted to establish joint ventures with
Laotian lawyers and use their home country names.  Foreign lawyers can practice law as legal
consultants but may not represent clients directly in the court. Foreign lawyers may apply and obtain
licenses to practice in the Lao PDR as long as they meet the same requirements as Laotian candidates.
To appear in Court, Laotian lawyers must be me mbers of the Lao Bar Association.  Membership is
restricted to Lao nationals.
Question 217
Are foreign law firms permitted to open offices in the Lao PDR to provide advice to clients on
U.S. law, third country law, and international law?  Are foreign law firms permitted to form
joint ventures with Laotian law firms, hire Laotian lawyers, and use their home country firmnames?  Are foreign lawyers permitted to work for Laotian lawyers as long as they do not
appear in local courts?  Are foreign lawyers able to apply and obtain licenses to practice in  the
Lao PDR, as long as they meet the same requirements as Laotian candidates?  Is temporary
licensing of foreign lawyers permitted?  If li censed, are foreign lawyers admissible to the
Laotian Bar Association?
Answer:
Please see the answer to the previous question.
 (b)  Accounting and Auditing Services
Question 218
With which countries, if any, does the Lao P DR maintain bilateral agreements on accounting
services?
Answer:
So far none.  However, the Lao professional accountants association maintains good relations with
certified practiced accountant association in ASEAN and other countries.WT/ACC/LAO/4
Page 76
 (c)  Computer and Related Services
Question 219
Under what circumstances might the Lao PDR impose  sector specific regulations in this sector?
Answer:
The Lao PDR might impose specific regulations in the computer and related services under the
following circumstances:
- in the framework of the e-ASEAN Framework Agreement and its recommendations;
- on the basis of the plan for liberalization and facilitation of trade and investment in the ICT
sector; and
- on the basis of new legislation on this sector on issues such as: cyber law, digital signatures,
electronic transactions, certification and other regulations.
 Communications Services
 - Postal Services
Question 220
Please confirm whether the Lao PDR intends to retain the state-owned Entreprise des Postes
Lao (EPL) as a natural monopoly.
Answer:
The Lao PDR intends to retain the responsibility of Enterprise des Postes Lao (EPL) delivery of
letters less than 20 grams. All other deliveries, such as packets, parcels, money orders and services
such as couriers are open to competition including by foreign-owned businesses.  EPL provides those
services as well as TNT, OCS, DHL and UPS.  Fedex represents EPL for the provision of export and
import services.
 - Courier Services
Question 221
Does the Lao PDR intend to submit a substantial offer on courier services in the framework of
the GATS, binding full market access and national treatment for foreign service suppliers to
reflect current practice in this sector?
Answer:
The Lao PDR will consider an offer on courier serv ices which reflects the current practice in this
sector.
 - Telecommunications Services
Question 222
The Lao Telecommunication Company hold s the monopoly in the provision of
telecommunication services and the exclusivity period in its licence is due to expire in 2001(Sector VI.2(d) of the Memorandum).  We understand that a new law on telecommunications isWT/ACC/LAO/4
Page 77
close to finalization.  Could the Lao PDR provid e information on its plans for liberalization of
this sector, including a timetable for the openin g up of the market, and details of the number of
companies that will be permitted to compete?
Answer:
The Telecommunications Act (No 02/NA) was adopted on 10 April 2001.  The text is available
through document WT/ACC/LAO/4/Add.1. Decrees which will give effect to the Law are being
developed.  Since November 2001, the monopoly of  the Lao Telecommunications Company (LTC)
has been removed.  It no longer has the exclusive right to provide domestic fixed and long-distance
telephone services.  International fixed line telephone services are not liberalized for the time being.
The right to provide international services is now reserved to LTC and the Enterprise
Telecommunication du Laos (ETL).  The Lao PDR is reviewing policies on provision of international
services.
Mobile phones services and mobile fixed wireless services have been liberalized.  Four companies
now provide mobile services.  Services are only av ailable in the GSM 900 band. That spectrum is now
full so no further providers can supply services, but the market is open for providers to provide mobile
services on other bandwidths and using other technologies.
Question 223
Is foreign investment in the monopoly telecom provider Laos Telecommunications Company
(LTC) legally limited to 49 per cent?
Answer:
Yes. Foreign ownership of the Lao Telecommunication Company is restricted to 49 per cent.
Question 224
Does the draft legislation proposes changing any limits currently in place in a) LTC, or b) new
companies that might compete with LTC?
Answer:
Please see the answer to question 222.
Question 225
Does LTC have a legally defined exclusivity period  for any services?  If so, what services? How
long is the exclusivity?  How will the draft legislation change this?
Answer:
Please see the answer to question 222.
Question 226
Does the draft legislation contemplate opening up services besides mobile to competition?  If
not, why not?  If so, is  the Lao PDR contemplating limiting the number of suppliers?WT/ACC/LAO/4
Page 78
Answer:
The Telecommunications Act contemplates opening services to competition in most sectors.  The Act
covers all telecommunication services, all of whic h except for the time being international services,
are open to provision by new and foreign providers.  The areas covered are set out in Article 8.
Question 227
In the mobile sector, is  the Lao PDR co ntemplating limiting the number of suppliers?
Answer:
No.
Question 228
Are there any legal limitations (and does draft le gislation propose any changes) on providers of
enhanced or value-added services such as internet access?
Answer:
There are no specific limitations. Under the investment law the Lao PDR can propose Joint Venture
models with foreign investors.  See the la w provided with the answer to question 14.
Question 229
Are there any legal limitations (and does draft legislation propose any changes) on reselling
capacity or services of  the Lao PDR Telecom?
Answer:
Reselling of services is provided for, subject to the permission of the Ministry of Communications,
Transport, Post and Construction.
Question 230
What is the anticipated timeline for adoption of the new legislation?  Can we get a copy?
Answer:
The telecommunication Law was adopted on 25 April 2001.  Decrees detailing the regulation of the
Law are under consideration.
 Audiovisual Services
Question 231
Please provide information on current law and regulation regarding motion picture and video-
tape production and distribution, motion picture projection, and radio and television services.WT/ACC/LAO/4
Page 79
Answer:
The Ministry of Information and Culture is considering a draft on the regulation of multi-media
(sound & scene). This regulation would cover the management of motion picture and video-tape
production and distribution, motion picture projection, and radio and television services.
 Construction and Related Engineering Services
Question 232
Document WT/ACC/LAO/3 states that there is open tender on large construction projects and
international construction companies often receiv e contracts to perform construction work.  It
also states that foreign construction and engine ering firms may provide construction services in
the form of companies established as joint vent ures or as wholly foreign-owned enterprises or
branches.  Must foreign construction companie s establish a commercial presence in the Lao
PDR as described in order to provide construction services?  Are so called "large constructionprojects" an exception?
Answer:
Decree No. 770, on 6 July 1995, from the Prime Minister’s Office states that foreign construction
companies need not be registered in the Lao PDR to participate in the international competitive
bidding.
Question 233
Please confirm that wholly foreign-owned ent erprises or branches are permitted to provide
construction services in the Lao PDR.
Answer:
Wholly foreign-owned foreign enterprises are perm itted to provide construction services in the
Lao PDR.
Question 234
What are the criteria for obtaining a license to practice in construction and engineering
services?
Answer:
The criteria for obtaining a licence to practice in co nstruction and engineering are those that apply for
obtaining a business licence for any company doing business in the Lao PDR (as explained in the
Memorandum on Foreign Trade) or for a foreign company requiring an investment licence (see
answer 14).
Question 235
How does the Ministry of Communication, Transport, Post and Construction fulfil its role in the
construction services sector?WT/ACC/LAO/4
Page 80
Answer:
The Ministry:
- Issues regulations for permitting construction businesses.
- Considers the investment proposals when re ferred by Department for Promotion and
Management of Domestic and Foreign Investment.
- Coordinates with relevant parties to check cost estimates, verify procurement quality and
construction design  and maintenance for large projects.
 Distribution Services
Question 236
Please confirm that there are no barriers to foreign firms engaging in wholesale services.
Answer:
Businesses providing wholesale services are required to register with the Ministry of Commerce. See
answer 40. There are no specific barriers against foreig n firms, other than the need to meet the general
requirements as foreign investors. Details are av ailable in the foreign investment law provided in
response to question 14.
Question 237
Please describe the market for commission agents’ and franchising services in the Lao PDR.
Answer:
The market for commission agents’ and franchising services in the Lao PDR  is limited given the
overall size of its domestic market. As long as these activities are duly registered and carried out in
conformity with the relevant rules and regulations especially the accounting, the tax, customs and
business laws, there are still some niche market.
Question 238
Under the Lao PDR’s Business Law, only Lao nation als may be hired in the retail sector.  Please
explain the rationale for this measure.
Answer:
The Lao PDR is experiencing the classical model of development where increasing numbers of people
move from rural to urban areas.  There is a requirement to foster employment in urban areas and the
retail sector in a growing economy is a good source of employment.  Reserving employment in that
sector for nationals helps preserve employment for Lao nationals.
 Educational Services
Question 239
Document WT/ACC/LAO/3 states that the Lao PDR strongly supports foreign participation in
the supply of private education.  Please confirm that this applies to education at all levels up to
post-secondary, and includes adult education and training.WT/ACC/LAO/4
Page 81
Answer:
Yes, we confirm that this applies to education at all levels up to post-secondary, and includes adult
education and training.
Question 240
Please describe any licensing requirements for teachers and school administrators.
Answer:
So far, there is no mandatory regulation on the licensing requirements for teachers and school
administrators. In principle, teachers and school administrators should be experienced or have
qualifications in the field in which they teach.
 Environmental Services
Question 241
We note the statements made by the Lao PDR in  regard to encouraging foreign participation in
the environmental services sector.  Given this approach, are there any restrictions placed only
on foreign companies in this sector?  If so, a re there plans to remove these restrictions in the
future?
Answer:
There are no limits or barrier to foreigners providing environmental services.
Question 242
In addition, are there any restrictions of the ty pe described in the GATS market access article
(e.g., limitations on the number of service suppliers, value of service transactions, and total
number of natural persons that may be employed)?  If so, are there plans to remove these
restrictions in the future?
Answer:
No.
Question 243
The Lao PDR notes the existence of "general provisions on investment."  Please provide details
on these provisions.
Answer:
Please see the answer to question 14.WT/ACC/LAO/4
Page 82
 Financial Services
 - Insurance Services
Question 244
What steps is the Lao PDR planning to take regar ding the mode of operation in the provision of
insurance services?  Please describe the relevant regulations for this sector.
Answer:
The government of the Lao PDR allows all types of insurance services to be provided in the Lao PDR.
Decree No. 01/PM, Decret d’Application de la Loi sur les Assurances, details the provisions of
Lao PDR insurance law.  In addition, Decree No. 447/MOF of 16/03/00 on Insurance Premiums
provides supplementary regulations.
Question 245
Lao PDR should provide further and clear information regarding insurance services, notably
on life insurance and on securi ties.  We should underline that we expect Lao PDR to sign up to
the GATS and to commit according to the Annex on Financial Services.
Answer:
See the answer to the previous question.  The Lao PDR will accede to the GATS and commit to the
Annex on Financial Services, ensuring that the program of reform of the banking sector is supported.
 - Financial Services not including Insurance
Question 246
Please provide more information about the process of privatisation of state-owned banking
institutions.  Are there any privatised banks currently?
Answer:
The bank privatization process is one of the later phases of the country’s reform agenda for the
banking sector. Presently there are three state-owned commercial banks (SCOs), six branches of
foreign banks, three joint venture banks, and one representative office operating in the country. None
of the SCBs has been privatized. It is premature to privatize any of the SCBs, given that they have not
yet been reformed. For example they still have a high level of non-performing loans. Globalexperience in privatizing state-owned banks on an “as is” for example in Uzbekistan and Tanzania,
has produced negative results.
The Lao Authorities, in active collaboration with International Financial Institutions (Asian
Development Bank, International Monetary Fund and The World Bank), have formulated the Lao
Strategic Framework for Banking Reform (LSFB R). The LSFBR builds on the efforts of the
Authorities to consolidate seven state-owned banks (into four commercial banks and one bank
specializing in agriculture). Between 2003 to 2006, the Lao Authorities will take significant steps inoperational restructuring, financial restructuring, resolution of old stock non-performing loans (NPLs)
and development of systemic credit discipline, and strengthening of the enabling environment for
banking institutions, including a rational approach toward policy lending.WT/ACC/LAO/4
Page 83
Operational restructuring will cover the establishment of stronger governance structures, policies and
systems; “rightsizing” the branch networks and staf fing (with a systematic social safety net); the
adoption of qualitative and quantitative performance indicators, including performance management
and reward system; and, importantly, realistic and country-sensitive modes for introducing/developing
commercially oriented and experienced management. Financial restructuring includes thecombination of two SCBs into one (thus leaving two post-combination SCBs);  phased provisioning
for old stock NPLs and full provisioning for new credit flows; phased recapitalization based on
measurable qualitative and quantitative performance indicators; asset rationalization; and the adoption
of strategies and resources for the turnaround of SCBs.
In coping with NPLs, SCBs will maintain internal asset management units, complemented by an
active External Debt Collection and Restructuring Committee/Unit. Underlying the activities of these
units is a deliberate program to raise the level of credit discipline in the system. To achieve this aim,the Authorities will carry out a high profile and sustained publicity and education program.
Supporting the efforts to develop a healthy credit cult ure, an activated Credit Information Bureau will
help limit the access of defaulters to the banking system.
The Bank of the Lao PDR (BOL), the central bank, is overseeing the implementation and monitoring
of SCB Restructuring Plans during the restructuring period. It is further proposed that the BankOrganizing Committee be tasked with the oversight of SCBs in order to maximize their shareholders
or franchise value, including the nomination and appointment of SCB’s Board Directors and
Managing Directors.
A favorable enabling environment calls for the development of liquid financial instruments, rational
taxation of banks, the development of banking skills and the accounting profession, legal and judicialreform, the strengthening of bank regulations and supervision, and enterprise restructuring and
deepening. The Authorities have addressed the important issue of policy lending. The proposed
approach is to establish a National Development Trust Fund to finance policy lending, to be funded by
the Budget and non-bank (including multilateral and bilateral) sources.
As the bank restructuring programs progresses, the Lao Authorities will take stock of the
implementation experience and determine, in due course, in active collaboration with IFIs, a realistic
strategy for privatizing the remaining SCBs.
Question 247
What kind of banking supervisory regime is currently in place?
Answer:
The Bank of Lao PDR is the regulatory agency for the entire banking system. With Technical
Assistance on best practice, BOL has adopted regulations governing risk management and othermeasures to maintain the soundness of the banking system. Among important regulations are those
relating to loan classification and provisioning methodology, loan concentration, insider lending, and
foreign exchange exposures. Under the law, BOL’ s supervision powers include the enforcement of
prudential regulations, penalties for non-compliance and problem bank resolution measures, including
conservatorship,  receivership or closure.
BOL has defined its strategic directions thus:
- BOL’s Bank and Financial Institution Supervision Department. (BFSD) aims to fully operate
in conformity with the BIS core principles on bank supervision.WT/ACC/LAO/4
Page 84
- There is need to formulate and implement a program to upgrade the regulatory framework,
staff skills (including knowledge of banking practices and instruments), systems and
hardware within BFSD.
- There is also need to ensure that SCBs ar e strictly complying with key BOL regulations,
especially those relating to non-accruals of interest income on NPLs and adequate provisions.However, there is need to ensure that compliance requirements are necessary and realistic
relative to the Lao situation.
- BOL supports the formation and regular functioning of a Compliance Committee within each
SCB to ensure regulatory compliance, accurate reporting and effective resolution of
regulatory exceptions. The Managing Director would chair the Compliance Committee.
- In addition, the SCBs’ Internal Audit Departments carries out activities that reinforce the
tasks of the BOL’s  BFSD.
- Strengthened bank supervision off-site and on-site activities would apply applicable penalties
on regulatory infractions, with the obje ctive of reinforcing compliance culture.
Question 248
In document WT/ACC/LAO/3, the Lao PDR lists a wide range of banking activities which are
authorized by the Central Bank.  Is the full rang e of these activities open to foreign affiliated
institutions on a non-discriminatory basis?  Does illustrative data on the degree of participation
of such institutions in the Lao PDR market exist?
Answer:
A full range of activities is open on a non-discriminatory basis to banks duly-incorporated and
established in the country, including joint venture banks. The table below provides information on thedegree of participation of such institutions in the country:
Table:  Market Share of Banking Institutions, December 2002
Type of Institution Number Assets (US$ million) Assets in % of Total
State-Owned Banks 3 344.22 68.67*
Foreign Branches 6 82.51 16.46
Joint-Venture Banks 3 74.55 14.87
Representative Office 1 0.00 0.00
Total 13 501.28 100.00
* The assets of the state-owned bank specializing in agriculture account for about 5 per cent of total
assets in the banking system.
Question 249
There is no mention in document WT/ACC/LAO/3 of securities trading or issuance activities,
asset management companies, or financial advi sors.  Are these sectors currently unregulated?
If not, could you please provide some information on how they are regulated and how foreign
providers of such services are treated?
Answer:
There are no securities trading or issuance activities, asset management companies or financial
advisors. Neither is there an established interbank, foreign exchange market, and treasury bill market.
Both the money and capital markets have yet to evolve.  Nonetheless, Technical Assistance provided
by the Asian Development Bank has supported the formulation of the legal and regulatory frameworkWT/ACC/LAO/4
Page 85
for the issuance of treasury Bills and leasing. The Lao Vision statement for the financial and banking
sector can be found in the Notification No. 0777/PMO, dated 20 June 2001, anticipating the gradual
evolution of these activities over the long run.  It states that the financial sector will be supportive of
broad-Œ-based sustainable economic growth and reduction of poverty. The financial sector will
enable the Government to achieve its goal of graduating from the least developed countries in 2020.The financial system will have the depth needed for economic growth and development and will
contribute to macroeconomic stability.
The financial system will provide wide access to financial services and extensive market reach. It will
efficiently perform the functions required by the Lao economy. That is to :
- mobilize savings from people and enterprises;
- allocate country’s resources to the most productive investments and income generating
activities;
- provide secure and rapid payment services;
- ensure financial and credit discipline on customers, and
- reduce and transfer financial risks.
The financial sector will be-diversified with  sustainable banks and non-bank institutions.
The area of greater urgency is the banking sector. Banks will be modern, s ound, robust, efficient  and
sustainable. They will be cost efficient to deliver services competitively and be customer oriented to
deliver desired services. Banks will be comparable with banks in other ASEAN countries and have
international linkages for enhancing their competitiveness.
Key critical factors in banking, - if the vision for the banking sector is to become a reality, entail :
- Banks’ business decisions will be independent and driven by the market mechanism.
- No policy or other non Œ-commercial lending wi ll be financed by the deposits from the
public.
- The boards and management of banks will be responsible and accountable for their business
decisions.
- Banks will impose proper credit and financial disciplines on borrowers.
- Management and staff will have skills that meet international standards.
- A supportive enabling environment will exist :
- accounting: to ensure quality of financial data
- legal and judicial: to ensure enforcement of contracts
- regulatory: to ensure proper supervision
- fiscal and monetary: to ensure stable macroeconomic conditions.
- The system will allow entry of institutions with diverse profiles.
To implement the socio-economic development plan of the Lao PDR from now to 2020 to free the
Lao PDR from least developed state, the BOL has de veloped the following vision for the banking and
financial sector of Lao PDR:
From now to 2005:
- Focus on improving and developing banking system, particularly state owned commercial
banks (SOCBs) in order to gradually make them stronger and competitive in better providing
services to society;
- Upgrade the existing Agricultural Promotion Ba nk (APB) to a development bank in order to
implement national socio-economic development policies;
- Study to lay foundation for the establishment of capital and security markets in the Lao PDR;WT/ACC/LAO/4
Page 86
- Encourage and promote the creation and operations of rural finance and micro-finance in
every provinces of the country; and
- Encourage and promote the set up of various types of insurance companies and different
funds for mutual benefits among members.
From now to 2010:- Continue to improve and strengthen  banking system to be at the level in par with the levels
seen in other  ASEAN member countries; with permissions will  be given to  foreign banks
with international standards to also carrying out their operations;
- Upgrade the development bank  into a more sector-specialized bank;
- Establish and operate capital and security  market in the Lao PDR;
- Continue the promotion of micro-finance and rural finance to spread them nationwide; and
- Continue to encourage and promote various types of insurance companies and different funds
to achieve higher standard of social services.
From now to 2020:
- Focus on diversifying financial institutions to deepen the BFS and monetize further the
economy. This means that various forms of financial institutions should be developed -not
only banks; and
- Develop BFS in the Lao PDR to make it more diverse and modern, with potential for linkages
at the international levels.
Once capital and securities markets are established, foreign providers of such services as securities
trading or insurance, asset management companies or financial advisors will operate under the same
set of rules and regulation as domestic companies, without any discrimination.
 Health-related and Social Services
Question 250
It is said in the Memorandum that foreign medical specialists are allowed to work in the
hospitals provided that they are suitably qualified.  What are the criteria for doctors, dentists,
nurses and physiotherapists?
Answer:
The foreign medical specialists - doctors, dentists, nurses and physiotherapists – are allowed to work
in the hospitals, on the conditions which follow:
- come under the plan of the ministry of Health of the Lao PDR,
- have professional certification from the ministries of Health of their country of origin,
- be permitted by the ministry of Health of the Lao PDR, and
- when the Lao Medical Association is established (expected in the near future), which will be
approved by it.
Question 251
Please confirm that no restrictions exist on private foreign investment in hospitals and similar
health care facilities.  Please describe measures with regard to the licensing of foreign doctors
and medical personnel providing health care services in the Lao PDR.  We would welcome anyadditional information on the Law on  Health currently being prepared.WT/ACC/LAO/4
Page 87
Answer:
There are no restrictions on private foreign investment in hospitals or similar health care facilities.
The Government of the Lao PDR encourages private domestic and private foreign investment in
private hospitals.
On licensing of health professionals, please see the previous answer.
Question 252
Please explain why existing hospitals have not been opened to foreign investment if foreign
investment in this sector has been permitted since 1998.
Answer:
In the Lao PDR, existing hospitals have been opened to foreign investment since 1998. However there
has been little interest from foreign investors.
 Tourism and Related Services
Question 253
How does the Lao PDR plan to increase the number of tourists to  the Lao PDR?
Answer:
The Report on the Management and Development of Tourism for the Lao National Tourism Authority
for 2002 to 2003 (No 359/LNTA of 22 June 2002) sets out the following strategies to improve tourismin the Lao PDR.
The goals are to:
- Improve the management of tourism, focussing on performance improvement of the
Authority;
- Promote and develop the tourism industry, by improving human resource capacity,
developing eco-tourism, undertaking research and analysis, and improving tourism services;
- Undertake tourism market research, focussing on pricing, and promotion; and
- Promote foreign relations.
Question 254
Please specify what is meant by "senior level management" positions with regard to the supply
of tourism services under Mode 4.
Answer:
The “senior level management” in tourism is the managerial level such as general manager or
director.WT/ACC/LAO/4
Page 88
Question 255
We understand that the provision of tour guide services is restricted to Lao nationals.  Please
explain the rationale for this measure. Would th is preclude foreign investment or ownership in
tourism or travel agencies that market or contract such services?
Answer:
Lao tour guides provide a better service than non-Lao because they understand the local culture better.
This does not preclude foreign investment - the foreign investment law applies in this industry like
others.
Question 256
Please provide more detail on the licensing requirements for foreign owners/operators of
restaurants in the Lao PDR.
Answer:
Foreign investment law (see answer 14) requires spec ific approval in investment in this sector from
the Government.
 Transport Services
Question 257
Please provide more detail on the transportation infrastructure in the Lao PDR.  Document
WT/ACC/LAO/3 suggests that foreign participation in the transport sector is limited to joint
ventures with Lao partners;  is this the case?  Although there appears to be slight demand for
rail or air transport services, would foreign firm s be excluded from investing in such services?
Answer:
It is an objective of the Lao PDR to improve and reconstruct road networks. Priorities are roads that
link to neighbouring countries such as: Road No. 8 to Vietnam; Road No. 9 linking Thailand via
Lao PDR to Vietnam; Road No. 18b linking Thailand via southern Lao PDR to Vietnam; Road 13
linking China via Lao PDR to Cambodia; and Road R3 linking Thailand via Lao PDR to China.
Foreign investment in the transport sector is op en according to the foreign investment Law. See
answer 14. There are no restrictions on foreign compan ies investing in air and rail transport services.
The right to allocate international air traffic righ ts is reserved to the government of the Lao PDR.
Question 258
Various restrictions currently imposed on transp ort and transit services impose constraints on
trade and increase the cost of imports.  Could the Lao PDR provide a description of the
requirements and restrictions imposed on the transport of goods into the Lao PDR, and explain
its plans to liberalize and improve these arrangements?
Answer:
The Lao PDR is a landlocked country and depends on effective cross-border goods in neighbouring
countries and  goods in transit.WT/ACC/LAO/4
Page 89
ASEAN has developed arrangements to facilitate cross border transit among ASEAN economies. The
Lao PDR will work with ASEAN neighbours to ensure  these arrangements reduce the costs of cross
border transit.
 Energy Services
Question 259
WTO Members are working to generate a better de finition of energy services in the GATS.  We
would appreciate any information the Lao PDR can provide with regard to the energy services
market in the Lao PDR.
Answer:
The domestic energy market in the Lao PDR is small.  The Lao PDR is a net energy (electricity)
exporter.  Exports of energy in 1998 were worth nearly $70 million.  There are significant prospects
for increased exports of energy to Thailand, Cambodia and Vietnam.   Increasing those exportsdepends on growth in the potential markets and incr easing the supply of electricity in the Lao PDR.
The Lao PDR has a potential in electricity generation from hydropower. The capacity is about 18,000
MW while currently it can produce 644 MW. The government is considered electricity as a prime
development target for building infrastructure for turning the country to become industrialized and
modernized in the future. At present, the Government focuses on electricity development for exportNam Theun 2, Xeset 2, Nam Ngieb 2, and Nam Ngieb 3.
 3. Market Access and National Treatment
Question 260
We note from Section VI.3(d) of the Memorandum that Business Law 03/94/NA establishes
services activities that are limited to natural persons of Lao nationality.  Does the Lao PDRintend to liberalize these requirements?  Could the Lao PDR advise whether these restrictions
apply to management staff in the listed  industry sectors?
Answer:
Regarding the services activities that are limited to natural persons of Lao nationality in Business Law
03/94/NA, the Lao PDR has no plan to liberalize these requirements.  On the question to which theserestrictions apply please see the answer to question 14 and related information on the investment law.
 VII. INSTITUTIONAL BASE FOR TRADE AND ECONOMIC RELATIONS WITH
THIRD COUNTRIES
 1. Bilateral or plurilateral agreements relating to foreign trade in goods and trade in
services
Question 261
What is the current rate of duty charged on imports of civil aircraft and aircraft parts?
Answer:
The current import duty rate of civil aircraft part is 10 per cent.WT/ACC/LAO/4
Page 90
2. Economic integration, customs union and free-trade area agreements
Question 262
Approximately what portion of the Lao PDR’s imports currently enter under preferential
treatment under the AFTA?  Approximately what portion of trade will be covered when AFTA
is fully implemented for Lao PDR imports?
Answer:
The portion of the Lao PDR’s imports currently enter under preferential treatment under the AFTA is
0 per cent. It is estimated that approximately 60 per cent of trade will be covered when AFTA is fully
implemented for Lao PDR imports.
ANNEX 1:  STATISTICS AND PUBLICATIONS
Question 263
Could the Lao PDR provide details on its plans to increase transparency in the provision of
economic information, statistics and trade requirements, including through expanded
publication of such information and requirements?
Answer:
The Prime Minister's Decree No. 140/PM of 20 Augu st 2002, concerning the role and implementation
of the National Statistics Center (NSC), stipulates that the NSC will collect date and improve datacollection system. In the near future, the NSC has plans to develop its own website so that the public
can access economic data through the internet.
__________