RESTRICTED
WORLD TRADE WT/ACC/VUT/6
27October 1997
ORGANIZATION(97-4694)
Original: English Working Party onthe
Accession ofVanuatu
ACCESSION OFVANUATU
Additional Questions andReplies
TheDepartment ofEconomic Affairs oftheGovernment ofVanuatu hassubmitted thefollowing
replies toadditional questions concerning theMemorandum ontheForeign Trade Regime ofVanuatu
(WT/ACC/VUT/2) andtheQuestions andReplies thereon (WT/ACC/VUT/4), withtherequest that
theybecirculated toWorking Party members. TheAnnexes mentioned inthisdocument areavailable
intheSecretariat (Accessions Division, Room 1126) forconsultation.
_______________WT/ACC/VUT/6
Pagei
TABLE OFCONTENTS
PageNo. Question No.
I. INTRODUCTION 1 1-4
II. ECONOMY AND FOREIGN TRADE
1. Economy
(a-d) Agriculture, fisheries andforestry
International Finance Centre
Aims ofgovernment policy2 5-6
2. Foreign Trade 3 7-10
III. TRADE REGIME FOR GOODS
A. Foreign Trade Regime
1. Import Regulations
(a) Theevolution ofthecustoms tariff regulation 4 11-22
(c) Import charges andfees 7 23-29
(d) Taxation regime 9 30-33
(e) Tariff preferences 10 34-37
(f) Non-tariff measures, quotas andlicensing system 11 38-57
(g) Customs valuation 17 58-63
(j) Standards andcertification 18 64-67
(k) Sanitary andphytosanitary measures 19 68-73
(l) Safeguards, anti-dumping andcountervailing duties 22 74-77
2. Export Regulations 23 78
B. Other Policies Affecting Foreign Trade
1. Industrial Policy 24 79-80
2. Agricultural Policy 24 81-89
5. Foreign andDomestic Investment Policy 27 90
6. Government Procurement 28 91-97
7. State Trading Enterprises 30 98-102
V. TRADE-RELATED ASPECTS OFINTELLECTUAL
PROPERTY REGIME32 103-110
VI. TRADE-RELATED SERVICES REGIME 33 111-121
Financial Services 37 122-123
Telecommunications 38 124
Professional Services 38 125-130
Education Services 40 131
Broadcasting 40 132WT/ACC/VUT/6
Pageii
PageNo. Question No.
Gambling 41 133
Other Services 41 134
Land 41 135
_______________
ANNEXES
Annex I - Draft Comprehensive Reform Programme
Annex II - Summary ofLegislative Reforms Necessary AsAResult ofAccession tothe
WTO
Annex III - Trade Data1994-96
Annex IV - Schedule IIIApplication Form
Annex V - Information onimport licensing (Annex 3ofWT/ACC/1)
Annex VI - Valuation ofImported Goods
Annex VII - ListofQuarantine Restrictions
Annex VIII - Information onTechnical Barriers toTrade (Annex 5ofWT/ACC/1)
Annex IX - Information onState Trading (Annex 6ofWT/ACC/1)WT/ACC/VUT/6
Page1
I. INTRODUCTION
Question 1.
Vanuatu notes thatoneofthethree major development themes oftheThird National Development
Planisthecontribution toeconomic self-reliance.
Reply
TheThird National Development Planisnolonger inforce. Since thebeginning of1997the
Government ofVanuatu, withtechnical assistance fromtheAsian Development Bank isreplacing that
document andisnowintroducing aneweconomic policy document which willestablish anon-going
Comprehensive Reform Programme (CRP) focusing onanoutward looking reform ofboththeprivate
andpublic sector.
TheCRP, asisdetailed inAnnex Iwillalterthedirection ofpolicy towards export orientation.
ANational Summit isscheduled forJulywhich willprepare thewayformajor legislative reform. The
Government ofVanuatu willassure thatthese economic reforms willbeWTO compatible.
Question 2.
Please indicate specific trade policy measures thatwillbeused toimplement thisgoal. What
particular aspects ofthePlanaddress thisdevelopment theme, eg.trade, investment, etc.?
Reply
Inthepastthemanufacturing sector provided asource ofmodest economic growth inthe
economy providing much needed jobs.Thegrowth ofmanufacturing wasbased onproducing substitutes
forimports. However, nowfewopportunities remain forimport substitution. Theprotection necessary
tostimulate theexisting levelofimport substituting activities hascontributed tothehighcoststructure
oftheeconomy andthisispartofthereason fortheimplementation oftheCRP.
TheviewoftheGovernment ofVanuatu isthattheoutlook fortrade andmanufacturing will
onlyimprove withachange inemphasis towards theexport sector. Export markets provide thepotential
forunlimited growth inoutput andincomes.
Proposed policies andstrategies forthetrade andmanufacturing sector willbebased on:
- thedevelopment ofamore opentrading regime which emphasises competitive production of
goods forexport. Exploitation oftrading opportunities provided bymembership ofthe
Melanesian Spearhead Group Trade Agreement willalsobeencouraged anddeveloped. Fuller
participation inthemultilateral trading systems (WTO) willbeoneofthemain elements of
thispolicy. Incentives which favour production forthedomestic market overproduction for
export willberemoved;
- developing astrategy toinvolve more Ni-Vanuatu inbusiness based onexploitation of
competitive market opportunities;
- examining andamending labour legislation tobeconsistent withachieving highlevels of
productivity;WT/ACC/VUT/6
Page2
- diversifying therange oflending options forsmall business including thedevelopment ofthe
credit union movement andmicro credit scheme.
Question 3.
Howwilltheaccession protocol beincorporated intoVanuatu ’sdomestic law?Willtheprovisions
oftheprotocol takeprecedence overother lawsiftheyconflict?
Reply
Annex IIcontains alistoflawsofVanuatu thatwillbeamended inorder toassure conformity
withthecommitments made inthisquestionnaire. TheGovernment ofVanuatu willalsocommit to
phasing outorabolishing immediately, where feasible, those lawsthatareinviolation ofitsobligations
under thecovered agreements oftheWTO. Specific reform commitments aremade throughout the
questionnaire.
Question 4.
CantheGovernment ofVanuatu ensure thatsub-central governments conform toWTO rules?
Reply
TheGovernment ofVanuatu agrees toensure thatalllawsandregulations ofprovincial
governments andcouncils willbeinconformity withitsWTO obligations
II. ECONOMY AND FOREIGN TRADE
1. Economy
(a-d) Agriculture, fisheries andforestry
International Finance Centre
Aims ofgovernment policy
Questions 5.
and6.
WT/ACC/VUT/2,sectionII.1:MostWTOMembershavemovedawayfromanimportsubstitution
modelofdevelopmenttoonebasedonliberalizedfreemarketsandcompetition.Importsubstitution
increases domestic prices andprotects essentially inefficient industries from foreign competition.
DoesVanuatu intend tocontinue topursue import substitution policies afteraccession totheWTO?
Ifso,willVanuatu confirm initsprotocol thatallmeasures taken toimplement these policies
willbeapplied inconformity withtheprovisions oftheWTO, e.g.,without quantitative restrictions
ormeasures thathave thateffect?
Reply
Vanuatu haspursued animport substitution policy forthepast16years inorder todevelop
itsindustrial andsmall manufacturing base. Asdiscussed above itisnowrefocussing itspolicies and
strategies toallow ittobecome outward looking, emphasising export promotion strategies. Thelinchpin
ofthisisthe“policies forgrowth anddevelopment ”which iscurrently being prepared.WT/ACC/VUT/6
Page3
However infuture tariffs willbetheprincipal instrument oftrade policy should anymeasure
ofprotection bedeemed necessary.
2. Foreign Trade
Question 7.
Paragraph 21ofActNo.1of1994 states that“Where thegovernment rates andtaxes exist
regarding international connections, theLocal Government Councils shallhavethepower tomake
by-laws foradditional amounts which maynotexceed 10percentoftheexisting tax”.What
“international connections ”arebeing referred to?Would theright toincrease taxes alsoapply
toimport duties andtaxes?
Reply
Thisparticular reference tointernational connections isnotdefined intheActandcould be
defined tomean imports andexports However, itshould benoted thatanypotential tax,feeorlevy
raised bytheprovincial governments inVanuatu musthavetheapproval oftheNational Government
through theMinistry ofHome Affairs. TheGovernment ofVanuatu willcommit thatitwillamend
existing provincial government legislation toremove anyauthority toraiseimport duties orimport
taxes butprovincial governments would continue tomaintain therighttoraiseinternal taxes asisthe
caseinother countries.
Question 8.
Vanuatu should supply additional information onthecompetence oftheprovinces fortrade and
investment policy under Vanuatu ’srecent decentralization programme.
Reply
Currently alltrade andinvestment proposals areappraised, processed andapproved through
thecentral government authorities. TheGovernment istrying tostrengthen thecapacity intheprovinces
tocarry outtheirtasks. Itshould benoted thatprovincial governments donothavelegalauthority
toimpose taxes andcharges unilaterally thatarenotagreed tobytheMinister ofHome Affairs and
hence theGovernment ofVanuatu canassure thatprovincial lawswillbeWTO consistent.
Question 9.
Please outline specifically those powers heldbythelocal governments thatarerelevant toWTO
provisions, e.g.,taxes, investment, services permits, etc.?
Reply
Asstated above, provincial governments withtheapproval oftheNational Government can
impose taxes, feesandlevies. TheGovernment ofVanuatu willcommit, initsprotocol ofaccession
thatthese levies, feesandtaxes willberaised inaWTO consistent manner andthatprovincial
governments willnothavetheauthority toraiseimport duties orimport taxes.WT/ACC/VUT/6
Page4
Question 10.
CanVanuatu confirm fortheWorking Party andinitsprotocol thatprovinces willberequired
toimplement theprovisions oftheWTO Agreement after Vanuatu ’saccession?
Reply
TheGovernment ofVanuatu confirms thattheprovinces andallsub-national governments will
beobliged tooperate inconformity withtheWTO Agreement. Allrelevant legislation willbeamended
toassure suchconformity.
III TRADE REGIME FOR GOODS
A. Foreign Trade Regime
1. Import Regulations
(a) Theevolution ofthecustoms tariff regulation
Question 11.
Could Vanuatu please supply tariff andtrade datainelectronic format fortheuseofWorking
Party members inconducting goods market access negotiations?
Reply
TheVanuatu customs tariff isnotavailable inelectronic format. SeeAnnex IIIfortrade data
for1994, 1995 and1996.
Question 12.
Vanuatu indicates thatitoffers extensive import tariff exemptions toprivate business toassist
andfacilitate private sector investment. Arethese dutyexemptions onanon-discriminatory basis
toallentrepreneurs, domestic andforeign? Does Vanuatu extend these exemptions toproducts
oristheexemption tiedtocertain firms?
Reply
Duty exemptions arenormally accorded onanon-discriminatory basis toallentrepreneurs,
domestic orforeign. However, theguidelines forthegranting ofcustoms dutyexemptions issued by
theDepartmentofIndustrythatarebasedonapointsystemdoescontainaprovisionwherebypreferences
aregiven tofirms onthebasisofpercentage oflocalownership. These guidelines arenotactually used
bythecommittee indeciding whether togrant anexemption ornot.However, asdiscrimination can
beconstrued fromtheguidelines theGovernment ofVanuatu willwithdraw these guidelines anddraw
upclear andtransparent guidelines aspartofthenewinvestment code thatwillbedrawn upunder
theComprehensive Reform Programme.
General exemptions fortheimportation ofaparticular product byallimporters arenotgranted.
These aregranted subject toajustification being offered totheGovernment ofVanuatu. However,
these exemptions arenottospecific companies buttothose which areinvolved inindustries where
economic activities areofdemonstrable andsubstantial benefit toVanuatuWT/ACC/VUT/6
Page5
Question 13.
Please specify theterms andguidelines onwhich thedutyexemptions arebased.
Reply
Thesystem bywhich these dutyconcessions aredetermined aregenerally discretionary with
exemptions granted forprojects which candemonstrably andsignificantly contribute totheeconomic
development ofVanuatu.
The terms and guidelines toqualify areclear and please refer toanswer
No.18(WT/ACC/VUT/4). Thisspecifies theprecise guidelines thatareusedunder Schedule 3of
theVanuatu Customs Tariff Act(seeAnnex IV). There exists asystem ofpoints butinpractice it
isnotemployed bythegovernment when granting tariff concessions.
Question 14.
According toWT/ACC/VUT/4, Vanuatu grants import dutyexemptions according tothefollowing
guidelines: (i)tocitizens ofVanuatu; (ii)tolocal producers; and(iii)onthebasis ofthe
percentage oflocal ownership ofbusiness ventures. How issuchdiscrimination consistent with
thenational treatment provisions oftheWTO?
Reply
Asmentioned above intheresponse toquestion No.13thissystem ofpoints isinpractice
notemployed. However, theGovernment ofVanuatu willcommit initsProtocol ofAccession that
within eighteen months ofaccession itwillcomplete andimplement itsnewinvestment codewhich
shallnotdiscriminate onthebasis ofnationality inoffering tariff concessions.
These newinvestment guidelines willinclude clear andtransparent regulations onhowand
under what conditions tariff concessions aretobegranted inorder tostimulate investment ina
non-discriminatory manner.
Question 15.
Would foreign funded localenterprises beeligible forsuchexemptions onthesame basis aslocal
citizens ordomestically owned firms?
Reply
Please refertotheanswer toquestion 12.
Question 16.
Arethese exemptions inanywaytiedtoexport?
Reply
Dutyexemptions arenottiedexplicitly toexports. However theGovernment ofVanuatu does
grant dutyexemptions totheagricultural sector which isalmost entirely export oriented.WT/ACC/VUT/6
Page6
Question 17.
AreVanuatu ’scustoms regulations contained intheCustoms Tariff Lawalready provided tothe
WTO Secretariat?
Reply
Yes,these regulations wereenclosed withtheanswers tothesecond series ofquestions sent
totheSecretariat inApril 1996 (WT/ACC/VUT/4/Add.1).
Question 18.
Vanuatu states that“most items areliable toavariable rateofdutyontheir value atimport ”.
Could Vanuatu clarify howandwhythedutyrates varies withvalue? Aresuch“variable duty
rates”known toimporters before theyplace their orders?
Reply
(a) There wasatypographical errorinthefirstsubmission thatshould havestated “various ”rates
ofdutynotvariable ratesofduty. Vanuatu doesnotimpose variable dutyrates.
(b) Rates ofdutyarefixed rates.
(c) Same as(a).
Question 19.
Vanuatu saysthatthecurrent average tariff is24percentwitha5percentservice tax.Vanuatu
saysthatitisconsidering reducing tariffs toanaverage of15percentwithaservice taxof
7percent. Vanuatu saysthattheservice taxistocover thecostofanyservices provided bythe
government authority asaresult ofimport services. However, theservice taxdoesnotappear
toform partoftheservice provided bythegovernment andispegged ataratethatwould be
farhigher than thecosts incurred. Wewould liketoseethistaxeither declared animport
surcharge andthenbecome subject tobilateral market access negotiations orconverted toaspecific
value more closely related tothecostofcustoms clearance.
Reply
Yes,thecurrent service taxaspresently found intheCustoms Tariff Actwillbecome animport
surcharge onthebasisofoursubmission totheWTO Secretariat. Ourbound rateswillbecome subject
tobilateral market access negotiations. Anadvalorem service taxorfeeof1percentweacknowledge
willbemaintained buttheratewill,bylegislation, besettoreflect thefullcostofcustoms clearance.
Question 20.
Vanuatu saysthatbusiness licence feesrequire thattoimport forretail andwholesale, the
2.5percentimport surcharge feemust bepaid. However, Vanuatu saysthatplans areunder
waytodelete the2.5percentfee.Could Vanuatu clarify thatthisisthecase?WT/ACC/VUT/6
Page7
Reply
Thebusiness licence feeof2.5percentimposed onimporters ofwholesale/retail products
arenolonger levied. Thefeeiscurrently setatVT50,000 perannum.
Question 21.
Please provide details ofvariable rates ofduty.
Reply
Notapplicable. Please seetheanswer toquestion 18.
Question 22.
Answers atthefirstmeeting oftheWorking Party indicate thattheservice tax,the2percent
feeonimports forwholesale orretail, andthelicence feespaid totheVanuatu Cooperative
Federationare,inWTOterms,additionalcustomsduties.WillVanuatubepreparedtoincorporate
these intothecustoms duty, sothatonlyonerateofdutyapplies toimports under eachtariff
line? WillVanuatu beprepared tobind“other duties andcharges ”atzeroinitstariff schedule?
WillVanuatu beprepared toreview provisions providing forimport dutyexemptions arevariable
rules ofdutyaspartoftheWTO tariff negotiations?
Reply
(a) Yes,Vanuatu intends toincorporate theservice taxandlicence feestoVanuatu Cooperative
Federation intothecustoms duty.
(b) Vanuatu isnotprepared tobind“otherduties andcharges ”atzeroinitstariffschedule. Vanuatu
willintroduce aservice taxof1percentofc.i.f.value ofimports thatis,asstated above, based upon
fullcostrecovery ofthecustoms clearance system. Andwillbaseanyfuture changes oftheadvalorem
rateonacostrecovery basis only. Thissystem ofcharges willbefullyWTO consistent.
(c) Aspartofthereview ofourtrading system Vanuatu intends toreview provisions which provide
fordutyexemptions soastoassure clear andtransparent guidelines ingranting ofdutyexemptions
forthose sectors asprioritised bythegovernment. TheGovernment ofVanuatu willnotify thechanges
intheguidelines totheWTO onceaccession iscompleted. Itisexpected thatthechange inguidelines
willtakeseveralmonthstocomplete.TheguidelineswillbeconsistentwithallcoveredWTOAgreements
including theTRIMs.
Variable dutyrates, asstated above, arenotemployed inVanuatu.
(c) Import charges andfees
Question 23.
Vanuatu states thatthere isa5percent“service tax”(possibly going upto7percent) payable
onimports onthedutyinclusive value. InWT/ACC/VUT/4, Vanuatu notes thatitviews this
“service tax”asaform ofimport tariff. Article VIIIoftheGATT 1994, however, mandates
thechargesforcustomsandsimilarservicesmustbeapproximatetothe“costofservicesrendered”,WT/ACC/VUT/6
Page8
i.e.onthevalue oftheservice performed foreachcustoms entry rather than, e.g.,onthebasis
ofapercentage ofthevalue oftheimport transaction.
How doesVanuatu intend toamend oreliminate itsservice taxtocomply withArticle VIIIof
theWTO?
Reply
Vanuatu willamend theCustoms Tariff Actsothatthecurrent service taxwillbecome a
surcharge. Thegovernment willcreate anewservice taxbased onthecostsofcustoms clearance and
willcomply withArticle VIIIoftheGATT.
Question 24.
Does Vanuatu intend toincorporate theservice taxintoit’simport duty rate? Ifso,isthere
legislation indevelopment toaccomplish this?
Reply
(a) Yes,Vanuatu ’sintention istoincorporate theservice taxasanimport surcharge butwillretain
aservice taxwhich willreflect thecostoftheservice being provided.
(b) There isasyetnolegislation. Itisexpected thatinorder tocomply withWTO provisions
legislation willbepassed.
Question 25.
Vanuatu states thatunder theBusiness Licence Act,anyone wishing toimport from wholesale
orretail willbeissued alicence foroneyear, upon application andpayment offees,bytheMinister
ofFinance. Please indicate howthe3to4percentlicensing feeapplied forissuance ofthelicence
iscomparable tothecostofservice, rather thanthecostoftheimport?
Reply
Thepresent Business Licence Actprovides thatanyone wishing toimport forwholesale or
retail salewillbeissued alicence foroneyearupon application, andpayment offeesandapproval
bytheMinister ofFinance. ThefeeisVT50,000 peryear. The3percentcommission forriceflour,
sugarandcannedmackereland4percentfortobaccoisafeepaidtotheVanuatuCooperativeFederation
andhasnorelationship tothecostoftheservice.
Question 26.
Arethese feesassessed oneachshipment? What istheroleoftheVanuatu Cooperative Federation
andwhyarethefeespaidtoit?
Reply
These feesareassessed oneachshipment. TheroleoftheVanuatu Cooperative Federation
exists topromote retail trade intheruralareas ofVanuatu. ThefeespaidtotheVanuatu Cooperative
Federation wasunder anorder issued bytheVanuatu Government (Import ofGoods Control Order
No.28of1987) andfeesarecollected inorder torepay debts oftheVanuatu Cooperative Federation.WT/ACC/VUT/6
Page9
Question 27.
If,asindicated inWT/ACC/VUT/4, theimport feeismaintained topayoffthetrading debts
oftheVanuatu Cooperative Federation, inwhatmanner should thisnotbeconsidered anadditional
tariff oratariff surcharge?
Reply
Intradeterms thecommission paidtoVCFisanadditional tariffandtheVanuatu Government
willincorporate thisintotheimport tariff andabolish thecommission.
Question 28.
What isthetimetable foreither eliminating, restructuring oraltering thisfeetoensure consistency
withGATT Article VIII?
Reply
Thiscommission willbeeliminated before accession.
Question 29.
Further totheanswers toquestions 16,26and28indocument WT/ACC/VUT/4, wewould
appreciate clarification ofVanuatu ’splans withrespect topossible future reduction ofimport
tariffs andreduction orelimination ofother charges suchastheservice taxandbusiness licence
fee.
Reply
Business licence feeshavechanged from2.5percentofc.i.f.values toVT50,000 perannum.
Service Taxchanges willbeincorporated intotheCustoms Tariff Actasasurcharge priortoaccession.
Asregards future reduction ofimport tariffs thisistobephased overaperiod oftenyears starting
from theendof1997 buttheprecise timing andsectors haveyettobeidentified.
(d) Taxation regime
Question 30.
Vanuatu notes thatithasenacted aturnover taxat4percenttomake upfortheexpected shortfall
intaxrevenues from removing taxes onimports. When isthistaxassessed andwhat isthebasis
forit’sassessment, i.e.,what transactions areaffected?
Reply
The4percentfeeonturnover ispartoftheBusiness Licence Act.Itisnotaseparate turnover
tax.Itisimposed based ongross turnover ofincome forthewholesale/retail sector aswellasthe
financial sector. Theturnover feeispaidquarterly oneither estimated oractual turnover intheprevious
quarter. Reconciliations onpayments aremade attheendoftheyear. Thetaxisbased ontotalturnover
ofthefinancial sector aswellasthewholesale andretail sectors forbothgoods andservices.WT/ACC/VUT/6
Page10
Question 31.
Itappears thatVanuatu currently applies taxes toimports thatdonothave anequivalent tax
onsimilar domestic goods, e.g.,the2.5percentlicence feeforimportation forwholesale orretail.
Thistaxappears inconsistent withthenational treatment provisions ofArticle IIIoftheGATT
1994. AreVanuatu ’ssalesandturnover taxes applied equally toimported anddomestic goods?
Reply
This2.5percentlicence feehasbeeneliminated andafeeofVT50,000 perannum ischarged
forimport forwholesale/retail. Vanuatu ’sbusiness licence feeonlocalbusinesses andproducts are
taxed equally onimports aswellasdomestically produced goods.
Question 32.
What areVanuatu ’sintentions vis-à-vis taxreform andtheelimination of2.5percentimport
licensing tax?
Reply
The2.5percentimport licensing taxhasbeendeleted andisnowcharged atVT50,000 per
annum (forthose importing forwholesale orretail). Taxreform strategy iscurrently being formulated.
Question 33.
WillVAT betheonlyinternal taxcharged onimports?
Reply
There isnoVAT inVanuatu asyetandgovernment policy intheareaisstilltobedetermined.
There ishowever anexcise taxondomestically produced beerwhich ischarged atarateofVT80per
litre. Thisexcise taxisinlieuofturnover taxonthebrewery.
(e) Tariff preferences
Question 34.
TheMelanesian Spearhead Group Trade Agreement(s) provide foronlylimited preferential tariff
treatment, e.g.,currently, onlyahandful ofitems arelisted aseligible for“freetrade”among
Vanuatu, Papua NewGuinea andtheSolomon Islands.
Will Vanuatu pledge thatitwillsubmit theMSG Agreement totheCommittee onRegional
Arrangements forreview inthecontext ofWTO provisions inArticle XXIV oftheGATT 1994,
theEnabling Clause, andArticle VoftheGATS?
Reply
Yes.VanuatuaspartofitsProtocolofAccessionwillsubmittheexistingMSGTradeAgreement
totheCommitteeonRegionalArrangementsasstipulatedunderArticleXXIVofGATT1994.However,
itisourunderstanding thattheGovernment ofPapua NewGuinea has,inMay1997, submitted the
MSG agreement totheCommittee onRegional Arrangements.WT/ACC/VUT/6
Page11
While thecurrent agreement includes 150tariff linestheGovernment ofVanuatu intends to
fulfilitstreaty commitments toitsMSG partners andmove, inthefullness oftimetoeliminating barriers
onsubstantially alltrade.
Question 35.
What plans havebeendeclared thatallgoods currently andpotentially traded between andamong
theMSG countries are,orwillbefreeofduties andother restrictions, including licensing
requirements, within ashort period oftime?
Reply
Inorder tofacilitate trade liberalization between theMSG States Vanuatu willbenotifying
theother MSG members ofthismatter thathasbeenraised bytheWorking Party. While theMSG
Agreement clearly states theintention ofthemembers istomove toeliminating trade barriers on
substantially alltrade there isasyetnotimetable. Weshallbegin serious consultations attheearliest
possible opportunity withourMSG partners inorder toestablish suchatimetable which willeventually
leadto“freetrade”regime forallMelanesian Spearhead Group countries withthepossible eventual
formation ofacustoms union.
Inorder tofacilitate ourdeliberations onthismatter could theWorking Party please provide
theGovernment ofVanuatu withtheappropriate precedence andjurisprudence thatclearly defines
‘substantially alltrade’aswellaswhatnowconstitutes anappropriate transition period tofreetrade?
Question 36.
Doimports from MSG trading partners paydomestic taxes? Dotheypaytheservice tax?
Reply
Yes,imports from MSG countries payservice taxandalldomestic taxes.
Question 37.
DotheMSG countries haveaschedule forexpansion ofthecoverage oftheagreement andcomplete
elimination ofduties andrestrictions onsubstantially alltrade ingoods between andamong
themselves?
Reply
Asmentioned above, thisagreement istransitional withallparties agreeing thatitwillmove
tocover substantially alltrade. There hasbeenanexpansion from three products to150tariff lines.
TheMSG senior officials willmeetin1998 todiscuss establishing aformal timetable fortransition
tofullfreetrade.
(f) Non-tariff measures, quotas andlicensing system
Question 38.
The“import orders ”onagricultural produces andt-shirts appear toviolate Article XIandthe
WTO Agreements onAgriculture andImport Licensing Procedures. These measures are,ineffect,WT/ACC/VUT/6
Page12
either import prohibitions, discretionary licensing requirements, ordefacto quotas, andtherefore,
WTO inconsistent. HasVanuatu begun toconsider howtoamend, eliminate, orre-organise these
import restrictions tobring them intoWTO-conformity atthetimeofVanuatu ’saccession?
Reply
Vanuatu willmove toeither impose tariffs ontheseproducts orwilleliminate theimport orders
andother protective measures altogether onthese products.
Question 39.
Vanuatu states thatfiveagricultural goods (rice, sugar, flour, canned mackerel andtobacco
products) aresubject to“import orders ”andcannot beimported allwithout alicence. Arethese
theonlyimports subject toimport licensing? Who istheauthorizing authority? What arethe
criteria forgranting thelicences?
Reply
Animport licence isrequired forthefollowing products:
- rice,flour, sugar, canned fishandtobacco products; and,
- t-shirts andsinglets bearing aVanuatu motif orlogo.
Thesystem ofimport licensing iscontained inAnnex IIIwhich explains thelegal authority
aswellthecriteria used. Theauthorising authority isthedepartment responsible forindustry andin
thecaseofrice,flour, sugar, canned fishandtobacco products thelicence isissued oncetheVanuatu
Cooperative Federation receives its3-4percentcommission. Theauthority fortheimport licences
fort-shirts andpotatoes isalsotheDepartment ofIndustry (seeAnnex onImport Licensing Procedures).
Arms andammunition
Inthiscasetheauthorising authority istheMinistry ofHome Affairs. Licences arestrictly
controlled forreasons ofpublic security andsafety.
Liquor andSpirits
Theissuing authority istheMinistry ofHome Affairs which issues automatic licences forthese
products.
Plants andother products controlled byCITES
Theissuing authority istheVanuatu Quarantine Service. Licences areissued inlightofCITES
agreements andregulations.
Question 40.
Should these licences beconsidered “discretionary ”,i.e.,thattheyaregranted onlywhen the
responsible Vanuatu authority isprepared topermit importation ofthese products?WT/ACC/VUT/6
Page13
Reply
These arenotautomatic licences except inthecaseofliquor andspirits.
Question 41.
Arethere anyother products towhich import licences and/or licensing feesareapplicable?
Reply
There arenoother products towhich import licences orfeesareapplicable.
Question 42.
Vanuatu states inthissection thatitalsopermits importation ofpotatoes onlyduring certain
months. How doesanimport order operate inpractice? How doestheGovernment ofVanuatu
approve ordisapprove theapplications forimportation?
Reply
Theprohibition ontheimport ofpotatoes during theharvest months from August toMarch
ofeachyearhasalready beeneliminated.
Question 43.
How issuchanimport prohibition consistent withtheWTO Agreement onAgriculture?
Reply
Itistheintention oftheGovernment ofVanuatu tousetariff measures astheprincipal trade
policy instrument infuture. Asaresult import prohibitions willbereplaced bytariffmeasures orthey
willbeeliminated altogether.
Question 44.
Wenotethatthediscretionary licensing requirements onrice,sugar, flour, canned mackerel and
tobacco products andtheseasonal restrictions onpotatoes actasquantitative restrictions and
aretherefore areabsolutely prohibited bytheAgriculture Agreement. Please provide acopy
oftheImport ofGoods Control Actandexplain ingreater detail howVanuatu ’simport licensing
system operates.
Reply
Acopy oftheImport ofGoods Control Actisavailable intheSecretariat forconsultation
(Accessions Division, Room 1126). Please refertoAnnex Vforclarification astohowtheimport
licensing system operates. Seasonal restrictions ontheimportation ofpotatoes nolonger apply.WT/ACC/VUT/6
Page14
Question 45.
Ifanimporter hasobtained abusiness licence toimport from theMinistry ofFinance, isthat
importer thenfreetoimport inanyamount, other thanthose subject toprohibition orthose covered
bytheImport Control Act?
Reply
When animporter hasobtained abusiness licence toimport fromtheMinistry ofFinance then
thisimporter isfreetoimport anygoods inanyamount other thanthose subject torestrictions or
prohibitions byother laws. Please notethatthebusiness licence issued bytheMinistry ofFinance
isforimports forthepurposes ofwholesale orretail trade -itisnotanimport licence.
Question 46.
Areanyfurther approvals byministries orother government agencies forspecified goods? For
instance, under theImport ofGoods Control Act,cantheMinister forTrade limit thetypeor
quantity ofgoods animporter withabusiness (import) licence canimport?
Reply
TheMinister ofTrade could limitthetypeandquantity ofgoods animporter withabusiness
(import) licence canimport. However these provisions havenever beenusedinthisway.
Question 47.
Vanuatu states thatnon-citizens ofVanuatu must comply with residence andwork permit
regulations before submitting anapplication foranimport (business) licence. What aretheterms
ofthese regulations? How aresuchlicences acquired?
Reply
Nonon-citizen ofVanuatu canreside inVanuatu without firsthaving complied withthe
immigration regulations ofVanuatu. Non-citizens therefore cannot expect toreside inVanuatu and
carry onbusiness without aresidence permit. Inorder foranon-citizen tohavearesidence permit
inVanuatu fortheminimum termheorshewould havetohavesome assets either incashorotherwise
tothevalue ofVT5million. AVT5million assetinvested inVanuatu willentitle anon-citizen to
aoneyearpermit. TheVanuatu Government allows non-citizens themaximum ofa10yearresidence
permit iftheyhaveassets ofoverVT50million invested inVanuatu. Theforeign investor having
invested onceinVanuatu isnotrequired toinvest asimilar amount eachyear.
Having obtained aresidency permit anon-citizen mayobtain abusiness (import) licence which
isissued bytheMinister ofFinance. Every business licence isissued annually. Thelicence isnot
transferable andthebusiness licence holder isrequired topayanannual feewhich varies fromcategory
tocategory.
Question 48.
Under theImport ofGoods Control Act,theMinister ofTrade mayrestrict orprohibit the
importation ofgoods thatcompete withlocalindustry. Howwould Vanuatu justify suchpolicies
inviewoftherequirements ofArticle XIortheGATT of1994?WT/ACC/VUT/6
Page15
Reply
Thisisjustified under Article XVIII oftheGATT of1994.
Question 49.
WillVanuatu confirm initsprotocol thatitwillusethisauthority afteraccession onlyinconformity
withWTO provisions?
Reply
Vanuatu willconfirm initsProtocol ofAccession thatitwillusethisauthority afteraccession
onlyinconformity withWTO principles.
Question 50.
Importlicencerequiredforgoodsintendedforwholesaleorresalerequirepaymentofa2.5percent
feebased onthec.i.f. value ofthegoods. Theanswer toquestion 28indicated thatthere are
plans todelete the2.5percentpartofthebusiness licence fees. Could Vanuatu confirm that
thisisthecase?
Reply
Thistaxhasalready beenabolished andreplaced byaVT50,000 perannum fee.
Question 51.
Does Vanuatu intend tomove thebasis ofpayment ofimport licence feestotheapproximate cost
ofservices rendered inaccordance with Article VII(a) ofGATT 1994 andArticle 3.2ofthe
Agreement ofImport Licensing Procedures?
Reply
Thebusiness licence feehasbeenabolished andreplaced withafeeofVT50,000 andthe
3-4percentcommissiontotheVanuatuCooperativeFederationwillalsobeabolishedpriortoaccession.
Question 52.
What isthepurpose ofVanuatu ’sImport Licensing System?
Reply
Following thereforms theimport licensing regime willexisttoassure theproper monitoring
oftrade aswellastogather data. Theimport control function willcease toexist.
Question 53.
Please complete theQuestionnaire onImport Licensing Procedures.WT/ACC/VUT/6
Page16
Reply
SeeAnnex V.
Question 54.
TheAgriculture Agreement provides thatWTO Members should notmaintain non-tariff measures
onagricultural products. WillVanuatu remove itsnon-automatic licensing requirements onrice,
flour, canned mackerel, sugar, tobacco products andpotatoes?
Reply
Yes,Vanuatu willagree toabolish non-automatic licences onthese products
Question 55.
Could Vanuatu explain indetail about theseasonal restrictions ontheimport ofpotatoes and
therationale behind it?
Reply
There arecurrently norestrictions ontheimport ofpotatoes. Thisbanhasbeeneliminated.
Question 56.
Could Vanuatu explain more specifically about thelicensing restrictions onthose items listed in
theanswers toquestions 39and41ofWT/ACC/VUT/4?
Reply
Animport licence isrequired forthefollowing:
- rice,flour, sugar, canned fishandtobacco products;
- t-shirts andsinglets bearing aVanuatu motif orlogo;
- Potatoes.
Thesystem ofimport licensing iscontained inAnnex Vwhich explains thelegal authority
aswellthecriteria used. Theauthorising authority istheMinister responsible forIndustry andinthe
caseofrice,flour, sugar, canned fishandtobacco products thelicence isissued oncetheVanuatu
Cooperative Federation receives its3-4percentcommission. Theauthority fortheimport licences
fort-shirts andpotatoes isalsotheMinister forIndustry (seeAnnex onImport Licensing Procedures).
Arms andammunition
Inthiscasetheauthorising authority istheMinistry ofHome Affairs. Licences arestrictly
controlled forreasons ofpublic security andsafety.
Liquor andSpirits
Theissuing authority istheMinistry ofHome Affairs which issues automatic licences forthese
productsWT/ACC/VUT/6
Page17
Plants andother products controlled byCITES
Theissuing authority istheVanuatu Quarantine Service. Licences areissued inlightofCITES
agreements andregulations.
Question 57.
Please explain about thequantitative restrictions ontheimportations ofcanned mackerel, toinclude
thereason foranimport quota, theprocedures forobtaining theimport quotas andthelegal
basis fortheprocedures, aswellasthestatistical dataonimport quotas andtheactual amount
ofcanned mackerel imported
Reply
There arenoquantitative restrictions ontheimportation ofcanned mackerel. There areimport
licences which donotlimitquantities inanyway. Theimport licences existbyvirtue ofanimport
order issued bytheMinister ofIndustry under anImport Order No28of1987 empowered under the
Import ofGoods Control Act.Thereason fortheImport order wastoassist theVanuatu Cooperative
Federationtopayitsdebts.Licencesaregrantedfortheimportofcannedmackerelfollowingthepayment
toVCF ofacommission of3percentofthevalue ofimports. Thetotalvalue ofimports ofcanned
mackerel in1996 wasVT94.2million.
(g) Customs valuation
Question 58.
Customs valuation inVanuatu, is“based ontheBrussels Definition ofValue ”.Could Vanuatu
giveamore detailed explanation ofhowthesystem works andthesequence ofalternative methods
ofassessing value ofVanuatu customs?
Reply
Please refertoSchedule IIoftheCustoms Import andExport DutyTariff 1996(seeAnnex VI).
Regrettably nomore detail isavailable thanthatcontained intheAct.
Question 59.
WillVanuatu incorporate theterms oftheWTO Agreements onCustoms Valuation initslaws
directly, toensure WTO conformity after accession?
Reply
Yes,Vanuatu intends toincorporate theWTO Agreement onCustoms Valuation intodomestic
lawsdirectly toensure WTO conformity bytheyear2000. Vanuatu isaleast-developed country and
willrequire technical assistance andtraining ofcustoms staffinorder toimplement thecode.
Question 60.
Vanuatu advises thatcustoms valuation isbased ontheBrussels Definition ofValue. Could
Vanuatu provide more details oncustoms valuation including onitsintentions concerning the
implementation oftheCustoms Valuation Agreement?WT/ACC/VUT/6
Page18
Reply
Seetheresponse toquestion 58.
Question 61.
Vanuatu hasadvised thatithasnospecific legislation governing rules oforigin although standards
arebeing prepared. Could Vanuatu advised ofprogress ondeveloping andimplementing
standards?
Reply
There arenorulesoforigin being prepared locally. Wewillberelying ontheWorld Customs
Organisation recommendations asmandated byWTO.
Question 62.
Please complete theQuestionnaire onCustoms Valuation.
Reply
Thequestionnaire cannot becompleted asVanuatu isnotusing theGATT Valuation Agreement
atpresent.
Question 63.
WillVanuatu apply theprovisions oftheWTO Agreement onCustoms Valuation from thedate
ofit’saccession?
Reply
Vanuatu willnotbeabletoapply theprovision oftheGATT Valuation Agreement onaccession
asthiswillrequire thepreparation oflegislation aswellasthetraining ofcustoms officers butVanuatu
willdosobytheyear2000.
(j) Standards andcertification
Question 64.
Vanuatu states thatithasnostandard orcertification codeforimported ordomestic foods. What
isthemechanism fortheenforcement ofindustrial standards inVanuatu?
Reply
Vanuatu hasnomechanism ofenforcement ofstandards beyond health andphytosanitary
standards. There doesexistprovisions fortheregulation ofmunicipal health standards bythevarious
municipalities. These include theFood (Control) Act,No.2of1981 which restricts businesses and
persons fromdisplaying, storing orselling foodthatisunfitforhuman consumption. Moreover, there
inaNational Building Code thatrequires construction tomeetcertain standards butthese regulations
apply onlyinthetwomain towns ofPortVilaandLuganville.WT/ACC/VUT/6
Page19
Question 65.
Doprivate sector importers perform thisfunction forimports?
Reply
Private sector importers willdetermine thestandards oftheproducts theyimport withtheir
suppliers.
Question 66.
Isthere aministry orgovernment regulatory agency thatisresponsible forapplying industrial
standards inVanuatu?
Reply
No,thelawsofVanuatu donotprovide forsuchregulatory authority beyond sanitary and
phytosanitary standards.
Question 67.
IfVanuatu hasnoindustrial standards code, areinternational standards applied? IsVanuatu
amember ofanyinternational standard organisations?
Reply
Beyond theOIEandother international organisations involved insanitary andphytosanitary
standards, Vanuatu isnotamember ofanyother international standards body.
(k) Sanitary andphytosanitary measures
Question 68.
WillVanuatu provide adetail explanation ofthetypes ofquarantine restrictions applied tothe
products listed andthejustification foreachrestriction?
Reply
Sanitaryandphytosanitarystandardsaredealtwithbytwoorganisations.ThefirstistheVanuatu
Quarantine Service which deals withplant protection andthesecond istheanimal health service of
theDepartment ofLivestock. Inthecaseofbothanimal health andplant quarantine standards are
determinedeitherbytheSouthPacificCommission,OIEstandardsofstandardsestablishedwithtechnical
assistance from theAustralian andNewZealand animal health services.
Quarantine
Thelistofprohibitions (seeAnnex VII)hasbeenestablished bythePlant Protection Unitof
theSouth Pacific Commission andapplies across thePacific Island countries which produce similar
crops, andhaveclimates andenvironment. Theprohibition isduemainly totheriskofintroducing
exotic pests. However, ifthecommodities aretreated toeliminate theriskusing agreed sanitaryWT/ACC/VUT/6
Page20
procedures thenimporters canobtain quarantine authority allowing thecommodities entry intothe
country.
Animal Health
Import protocols foranimals andanimal arebased ontheOffice International desEpizooties
recommendations intheirinternational Animal Health Code. Asasmall country withlimited resources
technical assistance onriskassessment comes from MAF NewZealand andAQIS Australia. Both
Australia andNewZealand provide technical assistance informulating animal health protocols.
AsVanuatu doesnotexisttheindependent scientific capacity tosetthese standards allare
established byinternational organisations orbydeveloped countries intheregion.
Question 69.
What ismeant by“source country risk”asabasis forinstituting prohibitions?
Reply
Quarantine
‘Source country risk’isnotaquarantine term, therefore itpresumably means country orarea
PestRiskAssessment (PRA). Vanuatu isdeveloping animport specification manual based onscientific
information andPRAisusedtodetermined entry ofproducts. Theimport specification manual isbeing
drafted toassure conformity withIPPC standards.
Animal Health
The“Source Country Risk”relates totheanimal disease status ofthecountry oforigin and
therefore theriskofimporting diseases which Vanuatu doesnothave. Quarterly reports fromtheOIE
detail thehealth status fordetermining source country risk.Vanuatu would notaccept animals from
countries without ahealth status report. Inthecasewhere countries arenotmembers oftheOIEsuch
asmany ofthecountries oftheSouth Pacific Vanuatu willactunder advisement fromtheSouth Pacific
Commission.
Question 70.
IstheGovernment ofVanuatu amember oftheCodex Alimentarius Commission (CODEX) or
theInternational Plan Protection Convention (IPPC)? Ifnot,doesVanuatu plantojointhese
organisations?
Reply
Vanuatu isnotasignatory totheInternational Plant Protection Convention (IPPC) norisit
amember oftheAsiaandPacific Plant Protection Commission (APPPC). TheVanuatu Government
isnotamember ofCodex Alimentarius Commission (CODEX). Vanuatu isplanning tojointhese
organisations. Vanuatu isamember ofthenewly formed Pacific PlantProtection organisation (PPPO).
Vanuatu isamember ofFAO andOIE.WT/ACC/VUT/6
Page21
Question 71.
Please complete theQuestionnaire onTechnical Barriers toTrade.
Reply
SeeAnnex VIII.
Question 72.
Please provide alistofproducts affected bySPSmeasures (including import prohibitions) and
thereason foreach, including standards, guidelines orrecommendations onwhich these
requirements arebased.
Reply
Quarantine
Seethelistofprohibited agricultural products (seeAnnex VII). Please notethatthislistis
constructed under advice from theSouth Pacific Commission.
Noperson shallimport orintroduce anyanimal, animal products, biological product orany
related article toVanuatu:
- without apermit issued under theAnimal Importation andQuarantine Act; or
- incontravention oftheprovisions oftheActoranyregulations made thereunder.
Protocols havebeendeveloped fortheimportation ofanimals andanimal products attherequest
ofimporters taking intoaccount theriskofimporting adisease thatisnotpresent inthiscountry.
Ingeneral protocols arenotdeveloped withcountries thathaveendemic OIEListAdiseases. Vanuatu
doesnothavehighsecurity quarantine facilities tobeabletoimport animals fromcountries withserious
animal diseases. Similarly untreated orinadequately treated animal products fromcountries withOIE
ListAdiseases arenotgiven permits forentry.
Question 73.
Please givefurther information ontherelevant control, inspection andapproval procedures.
Reply
Quarantine
Thefavourable peststatus ofVanuatu isavaluable national assettobepreserved, measured
andutilised. Preserved toensure crops, forest andnatural floraandfauna arenotthreatened bynew
pests; measured sothattheexact status ofthepestsituation isknown andcanbemonitored; andutilised
through thepromotion ofexports offresh farm produce toneighbouring countries. TheVanuatu
Quarantine andInspection Service oftheDepartment ofAgriculture andHorticulture ischarged with
thistask.
TheDivision discharges itsfunctions inaccordance withVanuatu andinternational lawand
inconjunction andcooperation withanyregional plant protection agreement forthePacific.WT/ACC/VUT/6
Page22
Theaimistoprevent theintroduction ofpestofplants andplant products intoVanuatu, and
wehavethefullauthority toregulate theentry ofplants andplant products andtherefore:
(a) prescribe restrictions orusephytosanitary measures concerning theimports ofplantandplant
products intoVanuatu byinspection, prohibition onimportation andalsotreatment;
(b) prohibit theimportation ofparticular plants orplantproducts thathaspotential orintroducing
newquarantine pests toVanuatu;
(c) inspect ordetail particular consignments ofplant orplant products thatdonotcomply with
import specifications;
(d) treat, destroy orrefuse entry toconsignments ofplants orplant products thatdonotcomply
withrequirements prescribed in(a)or(b)orrequire thatconsignment tobetreated ordestroyed
orre-exported.
Allplantandplantproducts arerequired bylawfortheimporter toapply foranimport permit
andentryconditions written toprevent introduction ofpests. Importers fromnewcountries arerequired
toundertake asource country riskanalysis andprovide dataforVanuatu. ThePlant Protection Unit
ofSPCprovides dataforpestriskinthePacific Islands region. Outside theregion thedataisprovided
bytheimporter andiscross-checked ontheFAO database onpests anddisease status.
Animal Health
Animals oranimal products require permits signed byagovernment veterinarian forentry.
Anyconditions areattached tothepermit. Allanimals imported areexamined atentry byaLivestock
Department veterinarian andifhealth andthecertificate isinorder apermit tolandisissued. Animal
products areexamined atentry byamember oftheQuarantine Inspection Service andiftheymeet
theconditions oftheimport permit areallowed entry. Iftheydonotmeet theconditions theyare
referred toaLivestock Department veterinarian.
(l) Safeguards, anti-dumping andcountervailing duties
Question 74.
How doesVanuatu intend toincorporate theprovisions ofWTO Agreements onapplication of
safeguards, anti-dumping, andcountervailing duties initslegal structure?
Reply
Atpresent Vanuatu hasnoprovisions initslegislation foranti-dumping andcountervailing
measures andthere arenoplans atpresent tointroduce suchlegislation. However theGovernment
ofVanuatu reserves theright toemploy safeguard provisions initslegislation inamanner thatis
consistent withitsWTO obligations.
Question 75.
Vanuatu states thatthere arenospecific policies forexport promotion. However, Vanuatu states
thatthere isrelief from import duties forindustries inVanuatu. Isthisrelief linked inanyway
tolocal content requirements?WT/ACC/VUT/6
Page23
Reply
Theimport dutyrelief forindustries isnotlinked inanywaytolocal content requirements
norarethere anyother trade related investment measures thatareproscribed under GATT 1994.
Question 76.
Vanuatu states initsanswer toquestion 17(WT/ACC/VUT/4) thatit’stariff protection could
beoverridden byimporting dumping against which there isnolegislation. Islegislation being
developed onanti-dumping?
Reply
Noanti-dumping legislation exists norisitcurrently being developed.
Question 77.
Please indicate ifVanuatu isconsidering legislation which would permit theimposition of
anti-dumping, countervailing orsafeguard measures.
Reply
Vanuatu isnotconsidering atthisstageanyanti-dumping, countervailing orsafeguard measures
legislation.
2. Export Regulations
Question 78.
Questions above relating toimport measures apply equally toexport measures. Please provide
information.
Reply
Vanuatu hasnodirect taxesandthushastended touseimport duties asmechanism forproviding
incentives tostimulate investment inareas where Vanuatu hasacommercial advantage orwhere this
isdeveloping overtime. With regard toexports theGovernment ofVanuatu hasmaintained aseries
ofexport taxes.
Rates ofexport taxare:
Copra 4%
Kava 3%
Beef 2%
Cocoa 7%
However, theGovernment ofVanuatu hasannounced thatitwilleliminate these export taxes
attheendof1997. Thisiscontained inthecomprehensive reform programme (SeeAnnex I).WT/ACC/VUT/6
Page24
Export Licences
Asmentioned previously there aretwocommodities where theVCMB maintains amonopoly
overexports. These include copra andcocoa. InthecaseofkavaVCMB issues export licences to
exporters ofkava. Thecostofthekavaexport licences areVT50,000 perannum along withapayment
of3percentexport taxwhich willshortly beabolished asawellas7.5percentofthef.o.b. value
ofthekavaexport asfeetoVCMB.
While coffee isalsoprescribed exports havedecreased oflateandtheproduct onlysupplies
thedomestic market. Other products suchasbeefandmanufactured products arenotsubject toany
export licensing arrangements
B. Other Policies Affecting Foreign Trade
1. Industrial Policy
Question 79.
Vanuatu describes theobjectives ofindustrial policy intheindustrial sector andindicates that
“special incentive ”areoffered bythegovernment through theBusiness Licence Committee and
theCustoms Department. Inthisregard, would Vanuatu describe inmore detail theactions and
policies followed bythese twogovernments entities?
Reply
TheBusiness Licence Committee hastherighttogive50percentreduction fromthebusiness
licence feeforthefirstthree years ofanewoperation. Inpractice, thisincentive hasveryrarely been
usedinVanuatu. TheExemptions Committee alsoprovides import dutyexemptions which havebeen
described atlength above intheanswers toquestions 12-15.
Question 80.
Please alsodescribe thenature andprocedures ofpolicies thatprovide lowinterest bank loans,
special exemptions bycustoms andtaxauthorities andthearrangements toassist industries through
theDevelopment Bank ofVanuatu.
Reply
TheDevelopment Bank ofVanuatu nolonger provides lowinterest loans. TheDevelopment
Bank ofVanuatu isnowoperating onafully commercial basis andasaresult interest rates and
amortisation periods arenowsimilar tothose oftheother commercial banks.
2. Agricultural Policy
Question 81.
When willVanuatu complete thequestionnaire onagricultural supports andsubsidies contained
inWT/ACC/4? Wewould liketobeabletodiscuss itatthenextWorking Party Meeting.WT/ACC/VUT/6
Page25
Reply
Thequestionnaire willbecirculated asdocument WT/ACC/SPEC/VUT/2.
Question 82.
Vanuatu hasstated thatcopra andit’salternatives should becapable ofproviding anincome
torural areas andsubstitute imported agricultural products intheanswer toquestion 5indocument
WT/ACC/VUT/4. HowwillVanuatu protect these domestic agricultural industries fromimported
products? Aredomestic prices foragricultural products higher than, lower than orequal to
imported prices?
Reply
Tariffs willbetheprincipal instrument oftrade policy inthose cases where Vanuatu choses
toprotect domestic products. Atpresent there areseveral products, mostly those tropical treecrop
products which areexported andwhere import prices would behigher thandomestic prices. However
insectors where Vanuatu isattempting todevelop ameasure ofcommercial advantage suchasin
domestically produced vegetables then domestic prices arehigher thanimport prices.
Question 83.
Could Vanuatu provide more details onitsseasonal restrictions onpotatoes?
Reply
Seasonal restrictions ontheimportation ofpotatoes nolonger apply.
Question 84.
Could Vanuatu provide more details ontherestrictions relating totheimport ofrice,sugar, flour,
tobacco andcanned mackerel?
Reply
Answers tothisquestion havealready beenprovided intheresponse toquestion number 39.
Question 85.
What istheaverage rateoftariff dutyforagricultural products (Chapter 1-24)?
Reply
Theaverage rateofdutyforagricultural products (Chapter 1to24)iscurrently asfollows:
Chapter Average Duty Rate
1 0
2 50%
3 50%
4 30%
5 14%WT/ACC/VUT/6
Page26
6 14%
7 31%
8 35%
9 45%
10 40%
11 23%
12 0%
13 17%
14 17%
15 30%
16 51%
17 43%
18 31%
19 46%
20 55%
21 52%
22 Specific duties
23 2%
24 5334 VT/kg
Export Imports
Copra 4% 10%
Cocoa 7% 36%
Kava 3% 10%
Beef 2% 75%
Coffee 55%
Vegetables 30%
Pork 55%
Root crops 40%
Rice 12%
Tinfish 55%
Sugar 45%
Question 86.
Itisnotentirely clear from theresponse toquestion 41onpage 25ofWT/ACC/VUT/4 what
plans Vanuatu hasfortheelimination ofrestrictions ontheimportation ofpotatoes, ricesugar,
flour, tobacco andcanned mackerel. Wewould appreciate clarification onthispoint.
Reply
Vanuatu willeliminate therestrictions onrice,sugar, tobacco andcanned mackerel andwill
replace previously existing restrictions onpotatoes withaseasonal tariff.
Question 87.
Please notify allagricultural measures, domestic support measures andexport subsidies, inthe
form setoutinWT/ACC/4.WT/ACC/VUT/6
Page27
Reply
Please noteresponse toquestion 81.
Question 88.
Does theVanuatu Commodities Marketing Board regulate export prices? Ifso,please provide
details. Does theBoard receive government subsidies?
Reply
TheVCMB doesregulatethe’beach’priceorfarmgatepriceofcopra.Thesepricesareregulated
onanadhocbasisusing surpluses generated fromtrading activities andfromLomé Convention, Stabex
funds forproviding abuffer fundintheevent ofprice decreases. While inthepasttheVCMB has
beensubsidised bythestatethishasnotbeenthecaseinthelastfewyears because oftherelatively
highcommodity prices forcopra andcocoa available onworld markets. Thishasofcourse eliminated
theneedforprice supports tothese sectors.
Question 89.
Please provide detailed information onthedomestic support policies.
Reply
TheVCMB nolonger subsidises copra andcocoa production nordoesitsubsidise inputs into
theproduction ofthese. There isasmall subsidy forcoconut seedlings ofVT50perseedling butthis
isasubsidy provided under theDepartment ofAgriculture andnotVCMB.
TheVCMB doesrunabuffer fundforcopra only. Thebuffer fundisbased onthestandard
principals ofcommodity pricestabilisation whereby inperiods ofhighprices farmgateorbeach prices
donotfullyreflect market prices. Thesurplus thatisgenerated isdeposited intoareserve fundwhich
isusedinperiods oflowcommodity prices. However now, asopposed totheearly there isnolonger
anysubsidy aswhen thebuffer fundisdepleted there isnogovernment supplement ofthebudget.
However theGovernment ofVanuatu does, onanadhocbasis, provide occasional support
bytransferringLoméConventionfundsundertheEuropeanCommunities’commoditypricestabilisation
scheme Stabex. In1996 thegovernment transferred approximately VT100million (US$ 900,000)
toVCMB which wasusedtosupport copra prices. Thisisaonce-off payment andthereisnoguarantee
ofregular price support from government. These supports areirregular andtheVCMB, bystatute
isnowobliged tofunditsownactivities without anysubsidy from government.
5. Foreign andDomestic Investment Policy
Question 90.
WenotethatVanuatu doesnotrestrict investment inVanuatu, eveninareas where investment
isnotencouraged. Vanuatu doesexclude foreign nationals from investing insmall-scale businesses
which canbecarried outbyVanuatu nationals, however. Howarethese exclusion decisions made,
andimplemented?Whatareexamplesofsmall-scaleinvestmentopportunitiesthatforeignnationals
would beexcluded from?WT/ACC/VUT/6
Page28
Reply
Business andinvestment opportunities inVanuatu aresubject toapproval fromaGovernment
Business Licence Committee. There iscurrently anegative listofbusiness ventures andactivities that
canonlybepursued byindigenous Ni-Vanuatu, which includes service sectors suchastaxis, buses,
kavaexports, rural transportation, mobile vendors, small retail andtosome extent small bakeries.
ThedecisionsoneachparticularbusinessactivityforNi-VanuatuisthediscretionoftheBusiness
Licence Committee upon consultation withtheMinister ofFinance.
6. Government Procurement
Question 91.
Under government procurement procedures, where orwith whom istheprocurement order
“place”?
Reply
Chapter 22,under Regulation No.364oftheFinancial Regulation ofVanuatu Tenders are
submitted totheSecretary oftheTender Board intheDepartment ofFinance.
Question 92.
How are“quotations ”received andprocessed? Isopen competitive bidding practised for
procurement order oflessthanVT1million invalue?
Reply
Under Regulation No.365oftheFinancial Regulation ofVanuatu Tenders arereceived by
theCentral Tenders Board ThisBoard iscomprised ofthefollowing persons:
- theDirector oftheDepartment which areprocuring thegoods andservices;
- theDirector Finance orhisrepresentative. Theperson should betheSecretary oftheCentral
Tenders Board;
- Representatives oftheministry responsible forthedepartment which isprocuring thegoods
orservices.
Under Regulation No.367aftereachtender hasbeenopened, theappropriate technical officer
willsubmit areport oneachtender withhisrecommendation foracceptance. Thisreport willadvise
theBoard onthedetails ofeachtender1.Under thisregulation theformofallwritten contracts over
1Thereport oftheofficer willinclude asaminimum:
- thetechnical officer ’sassessment ofareasonable costforthetendered work;
- areport onthecompetence ofeach tenderer tocarry outthework;
- anassessment oftheability ofthecontractor tocomplete therequired work within histendered
price andperiod;
- details ofthetenders previous performance;
- areport onthecompliance ofeach tenderer withtender conditions andonthevalidity ofthe
tender.WT/ACC/VUT/6
Page29
VT3million must havetheapproval oftheAttorney General before thecontract issigned andthe
termofeachcontract mustmake itclearthatitmaynotbeassigned orsublet without theconsent of
theVanuatu Government
Under Regulation No.361where aprocurement order exceeds VT50,000 butlessthan
VT1million (approximately US$9,000) atleastthree written quotations shallbeobtained wherever
possible andtheprocurement order willbeplaced theaccounting Officer whoisusually theDirector
oftheDepartment. While onsome occasions threequotations arenotpossible because withsuchsmall
amounts there arenotthree suppliers available locally andforeign suppliers areunwilling tooffer
quotations forsuchsmall sums.
Vanuatu thuspractices opentendering andcompetitive bidding within theconfines ofasmall
island economy.
Question 93.
When considering tenders, doesVanuatu have apolicy orprogramme that favours domestic
suppliers? Ifso,please explain howtheprogramme works andwhoqualifies forthese preferences.
Reply
Vanuatu doesnothaveapolicy orprogramme thatfavours domestic suppliers.
Question 94.
Does Vanuatu plan toaccede totheAgreement onGovernment Procurement? Ifnot,could
Vanuatu explain itsreasons?
Reply
Vanuatu doesnotplantoaccede totheAgreement onGovernment Procurement. Allsupplies
ofgoods aswellasservices according tothefinancial regulations ofVanuatu which donotpermit
discrimination against foreign suppliers. Asaresult, Members oftheWTO would notbenefit from
Vanuatu ’saccession tothisplurilateral agreement towhich many WTO Members havenotacceded.
Question 95.
Does Vanuatu discriminate against foreign suppliers?
Reply
Vanuatu doesnotdiscriminate against foreign suppliers asgiven thesmall sizeofthedomestic
economy andtheverylimited number oflocaltenderers thiswould notevenbetechnically possible.
Question 96.
Cannon-citizens qualify assuitable suppliers onthesame basis ascitizens? What arethe
requirements forobtaining avalid business licence?WT/ACC/VUT/6
Page30
Reply
Non-citizens qualify assuitable suppliers onthesame basis ascitizens. However, business
classified under theVanuatu Business Licence Actisrestricted toNi-Vanuatu only.These sectors include
inter-island shipping, public transport, outdoor vendors (mobile shops). These sectors havelittleto
dowiththetypeofgoods andservices procured through public tendering.
Question 97.
What isthescope oftheproducts andservices which thegovernment central store provide? Does
thegovernment store procure goods andservices onanon-discriminatory basis bothfrom foreign
providers anddomestic providers? WillVanuatu introduce apolicy inwhich itallows competitive
tender tobeobtained byqualified private providers?
Reply
Thecentral stores purchases stationery andother supplies usedbytheGovernment ofVanuatu.
Thecentral stores doesnothaveanexclusive relationship withtheGovernment ofVanuatu inthat
thereisnoobligation forgovernment departments topurchase supplies fromthecentral store. Purchases
aremade onapurely commercial basis andhence thecentral store isnotaState-trading company.
TheGovernment storedoesnotdiscriminate against foreign sourced suppliers asthisissimply
notevenpractical, letalone desirable, inaneconomy which isassmall asVanuatu. TheGovernment
ofVanuatu, asdescribed above doesprovide forcompetitive tendering from private sources.
7. State Trading Enterprises
Question 98.
Vanuatu explains thatthere are10government enterprises and15non-government enterprises
inwhich thegovernment isashareholder. Please listthese firms andwhat theytrade.
Reply
Thenumber ofcompanies thatthegovernment either owns outright orhaspartinterest inis
19.These arelisted below
Name ofcompany Government Equity Trading Activities
AirVanuatu 100% International airline services
Bel-Mol Cattle Project 40% Cattle farming
IWSI/IGSL 15% Inactive
Metensel Estates 99.41% Cocoa Estate
NewResources Development 30% Inactive
NISCOL 10% Stevedoring
PortVilaFisheries 100% Fishing
South Pacific Fishing Coy 100% Fishing
Tanna Coffee Development 99.82% Coffee PlantationWT/ACC/VUT/6
Page31
Name ofcompany Government Equity Trading Activities
Telecom Vanuatu 33.33% Telecommunications
Tour Vanuatu 51% tourism
UNELCO 14.39% Electricity generation
Vanuatu Abbatoir 79.94% Abbatoir
Vanuatu Co-op Federation Rural retail
Vanuatu FishInvestment 15% Fish
Vanuatu Holdings 100% Holding Company
VANAIR 100% Domestic Airline Services
Vanuatu Livestock Development 100% Livestock Development
Source: Incorporated Company Annual Reports
Question 99.
Towhat extent dothese enterprises havemonopoly positions orother exclusive rights toimport
certain commodities?
Reply
TheseenterprisesdonothaveexclusiverightstoimportandtheyarenotState-tradingenterprises
under theGATT Article XVII definition.
Question 100.
Please indicate anyfirms orother institutions, government orprivate, thatactfortheGovernment
ofVanuatu intrade.
Reply
TheVanuatu Government doesnothaveanyother firms orinstitutions thatactonitsbehalf
apart from theVCMB which trades apart from those listed above.
Question 101.
WenotethattheVanuatu Commodities Marketing Board (VCMB) forcocoa, copra andkava;
andtheTCDC forcoffee appear tobeState-trading entities, appear tobethesolepurchases of
these domestic product forexport, andtherefore mayneed tobenotified under Article XVII.
Reply
TheVCMB shallbenotified under Article XVII (seeAnnex IX)butVanuatu doesnotexport
coffee nowandsoTCDC isnotaState-trading company.
Question 102.
DoestheVanuatu Commodities Marketing Board havesolepurchasing rights forexport ofcertain
goods, e.g.,copra, cocoa, kava andcoffee?WT/ACC/VUT/6
Page32
Reply
Yes,Vanuatu Commodities Marketing Board havesolepurchases rights forexport ofcopra,
andcocoa only. Itdoesnothavesolerights overkavaasthere arecurrently 25licensed Ni-Vanuatu
kavaexporters which havebeenlicensed byVCMB.
V. TRADE-RELATED ASPECTS OFINTELLECTUAL PROPERTY REGIME
Question 103.
How doesVanuatu intend toimplement theTRIPS Agreement?
Reply
TheGovernment ofVanuatu intends toimplement theTRIPS Agreement within three years
ofaccession.
Question 104.
How andwithin what timeframe doesVanuatu expect toimplement itsobligations under the
Agreement onTrade-Related Aspects ofIntellectual Property Rights (TRIPS)?
Reply
Seeabove.
Question 105.
When doesVanuatu plantobegin enacting legislation protecting intellectual property rights in
compliance withtheTRIPS Agreement?
Reply
TheGovernment ofVanuatu hasalready approached WIPO fortechnical assistance torevise
domestic legislation toassure compliance with theTRIPS provisions.
Question 106.
Does Vanuatu intend toaccede toanyinternational conventions andagreements relating tothe
protection ofintellectual property rights?
Reply
Yes,Vanuatu willaccede totheParis, Berne andWIPO Conventions andisconsidering its
status vis-à-vis theother conventions.
Question 107.
ArethePatents ActandtheTrademark Acttheonlyintellectual property lawsinforce atthe
moment inVanuatu?WT/ACC/VUT/6
Page33
Reply
Yes,these aretheonlytwolawsgoverning intellectual property inVanuatu.
Question 108.
CanVanuatu provide atimetable fortheintroduction ofthesystem ofprotection laiddown in
theTRIPS Agreement?
Reply
Vanuatu ’slawsonintellectual property willbefullyWTO consistent within three years of
accession.
Question 109.
DoesVanuatu intend tobecome acontracting party tothemain intellectual property conventions?
Reply
Yes,Vanuatu willaccede totheParis, Berne andWIPO Conventions andisconsidering its
status vis-à-vis theother conventions.
Question 110.
HasVanuatu already acceded to,orisinthecourse ofpreparation foracceding tointernational
treaties, suchastheConvention establishing WIPO, theParis Convention, theBerne Convention,
theUniversal Copyright Convention, thePatent Cooperation treaty, andtheBudapest Treaty
ontheInternational recognition oftheDeposit ofMicroorganisms forthepurposes ofPatent
Procedures. What isthetimetable setoutinorder forVanuatu tobring current legislation into
consistency withtheTRIPS?
Reply
TheGovernment ofVanuatu intends toimplement theTRIPS Agreement within three years
ofaccession. Ithasalready approached theWIPO secretariat torequest technical assistance tobring
itslegislation intoconformity withitsobligations under TRIPS. Vanuatu willalsoaccede totheParis,
Berne andWIPO Conventions andisconsidering itsstatus vis-à-vis theother conventions.
VI. TRADE-RELATED SERVICES REGIME
Question 111.
When willVanuatu present adetailed services offer?
Reply
Theservices offer willbecirculated asdocument WT/ACC/SPEC/VUT/3.WT/ACC/VUT/6
Page34
Question 112.
Could Vanuatu provide details ofthesystem which enables residency permit periods tobeextended
ifaninvestment overUS$50,000 isinvolved?
Reply
Under theterms oftheResidency Permit Actnon-citizens cannot reside inVanuatu andcarry
onbusiness without aresidence permit. Inorder foranon-citizen tohaveresidence permit inVanuatu
fortheminimum termheorshewould havetohavesome assets either incashorotherwise tothe
value ofVT5million. AVT5million assetinvested inVanuatu willentitle anon-citizen toaoneyear
permit. Thisisaprecondition forallbusiness investors including those seeking residence topractice
aprofession. TheVanuatu Government allows noncitizens threeyearresidency permits iftheyinvest
VT15million anda10yearresidence permit iftheyinvest VT50million invested inVanuatu.
Residence permits mayberenewed annually provided theconditions under which theywere
firstissued remain thesame. Theinitial feeforoneyearandsubsequent annual renewal isVT20,000
feeswhich aretobepaidwhen submitting theformofapplication. Extensions oftheresidence permit
donotrequire applicants toinvest more buttomaintain theexisting levelofinvestment.
Question 113.
Arecompanies required toprove thataposition which itmakes available could notbefilled by
aNi-Vanuatu? What criteria areused toestablish whether ornotasuitably qualified and
experienced Ni-Vanuatu isavailable?
Reply
No,Vanuatu doesnotrequire companies toprove thataposition which ismade available could
notbefilled byaNi-Vanuatu anditdoes nothave specific criteria forwhatconstitutes asuitably
qualified candidate. Companies arerequired toadvertise allpositions inthelocal news papers to
determine ifthere areanysuitably qualified, experienced Ni-Vanuatu thatmeettheconditions ofthe
advertised position. Iftheadvertisement demonstrates thatthere arenosuitably qualified Ni-Vanuatu
candidates thenthefirmisfreetohireanon-citizen.
Question 114.
Vanuatu saysthatamendments havebeenproposed tothelawsgoverning work permits. Could
Vanuatu provide details ontheproposed amendments? Willtheamendments provide guidelines
fortheissuing ofwork permits?
Reply
Theproposed amendments totheLabour Actgoverning work permits willattempt toachieve
thefollowing:
- provide greater transparency ontherequirements toinvest inVanuatu;
- limittheministerial discretionary powers asrequired intheexisting Act;
- provide forinvestor confidence bycreating acategory oflongtermwork permits forthose
undertaking investments thathasalongterm economic benefit interms ofemployment
infrastructure development andimprovement inthelivelihood ofthepeople;WT/ACC/VUT/6
Page35
- provide foramended lawstorestructure theLabour Department soastomake itwelcoming
andassisting foreign investors;
- provide encouragement ofnewinvestments bycreating anewregime fordealing separately
withnewinvestors;
- provide forrealistic rights ofappeal intheevent ofadispute overwork permits.
Thedraftlegislation isnotyetcomplete andispartoftheComprehensive Reform Programme
outlined inquestion 1.Itisexpected thatlegislation willbeready fortheconsideration ofparliament
thisyear.
Question 115.
Does Vanuatu intend toreview thepractice ofissuing green letters toforeigners?
Reply
Yes,theGovernment ofVanuatu willintroduce legislation intoParliament thatwillassure
therightoflegalrecourse asoutlined intheanswer toquestion 114above.
Question 116.
Could Vanuatu provide details ofitsapproach totherecognition ofqualifications offoreign
professionals?
Reply
Legal Profession
Vanuatu allows foreign professionals tosetuppractice inVanuatu withresidence andwork
permit criteria nodifferent from anyother non-citizen intending toreside andwork inVanuatu.
Professionals mustalsoinvest VT5million inorder toreceive theirbusiness licence andresidency
foroneyear. Forlegalpractitioners thereisaneedtobeaccepted bytheVanuatu LawCouncil, which
iscomprised oftheChief Justice, theAttorney general andonelocalrepresentative oftheprofession.
Thelawcouncil accepts lawyers onthree conditions:
- thelawyer must bearesident ofVanuatu;
- he/she musthaveatleattwoyears post-graduate experience. (This isnormally asanarticled
clerk);
- havealawdegree which isaccepted bytheLawCouncil.
Ifthelawyer isacceptable totheLawCouncil thenitispossible toapply tobeaccepted to
theVanuatu Bar.
Medical Profession
TheVanuatu Health Practitioners Actprovides forthecreation ofaHealth Practitioners Board
which hasfivemembers ineachoftheprofessions which include medicine, dentistry, surgery, nursing,
midwifery andoneother practitioner. Theboard maintains aregistry ofprofessional andbeing onthe
registry isacondition forpracticing inVanuatu. Theconditions forregistry are:
- theapplicant must holdadegree ordiploma from arecognised university orinstitute;WT/ACC/VUT/6
Page36
- theapplicant mustbequalified topractice inthecountry inwhich thequalification wasobtained;
- theapplicant must betrained andskilled inhisprofession.
There arenospecialised qualifications orboards foraccountants, architects orengineers except
arequirement thattheindividual possesses adegree intheareaofspecialisation.
Question 117.
IsVanuatu prepared toenter intocommitments thatwillensure thatit’sbusiness licensing regime
doesnotdiscriminate among foreign service providers?
Reply
InVanuatu thelicensing system istheprinciple mechanism fordetermining inwhich sectors
foreign investors maytrade. Vanuatu isnotprepared toenter intocommitments thatwillensure that
itsbusinesslicenceregimedoesnotdiscriminateamongforeignserviceproviders.Certainsmallbusiness
sectors oftheeconomy remain thesoledomain ofNi-Vanuatu andunless specific sectors havebeen
opened toforeign service providers andinvestors, aspertheservices sector offerandnational regulations
oninvestment Vanuatu isunwilling toentertain suchgeneral commitments.
Question 118.
Istheturnover taxontheoperations ofaccountants, trust companies andlegal offices payable
equally byforeign andbyVanuatu service providers?
Reply
Thebusiness licence feeonturnover onoperations ofaccountants, trustcompanies andlegal
offices isequally payable byforeign andbyVanuatu service providers.
Question 119.
Could Vanuatu indicate whether itintends toliberalise theconditions relating tocommercial
establishment, forexample where regulations limit foreign equity injoint ventures tocertain
maximum levels?
Reply
TheComprehensive Reform Programme isscheduled toliberalise conditions ofinvestment
inVanuatu further. However itshould benoted thatVanuatu hasnoregulations which limitforeign
equity injointventures.
Question 120.
Paragraph7onpage24ofWT/ACC/VUT/4notesthatforeignnationalsareexcludedfromengaging
insome small scale businesses. CanVanuatu please provide information onwhich small-scale
businesses arenotopen toparticipation byforeign nationals?
Reply
Thefollowing category ofbusiness isnotopentonon-citizens ofVanuatu:WT/ACC/VUT/6
Page37
- kavabaroperator;
- carpenters, joiners andmechanics working alone (orwithupto2apprentices);
- openairvendors;
- mobile shopoperator;
- roadtransport operators;
- tTour agent;
- seatransport operators (forfarepaying passengers andcargo).
Question 121.
Further totheinformation provided intheanswer toquestion 49onpages 26-27 of
WT/ACC/VUT/4, wewould appreciate advice ontheaverage timetaken toapprove applications
forbusiness licences, work permits andresidency permits.
Reply
Business licence applications areusually approved within 4weeks from dateofapplication
(except fornon-citizens whohavetocomply withresidence permit regulations firstbefore abusiness
licence could beapproved).
Residence permits areapproved onthesame dateastheapplicant complies withallterms and
conditions oftheapplication, i.e.onceanon-citizen hasprovided evidence ofinvestment oftheminimum
amount inVanuatu andapolice clearance isreceived bytheimmigration authorities thentheresidence
permit isissued.
Work permits areissued within aminimum period of4weeks ofapplication.
Financial Services
Question 122.
DoesVanuatu haveanyplans toliberalise theissued capital andunimpaired reserves requirements
forbanking inVanuatu, suchthatforeign banks would receive national treatment? Atpresent
therequirement arefour times higher forforeign banks involved inlocal banking than for
Vanuatu-based banks.
Reply
Atthelicensing stage, i.e.,uponentry, commercial banks willcontinue tohavedifferent capital
requirements. Therationale forhaving twoseparate capital requirements are:
- toavoid ‘fly-by-night ’banks;
- tocreate anincentive fortheincorporation ofbanks within Vanuatu.
TheReserve BankofVanuatu ispreparing policy guidelines relating tobanks ’capital adequacy
ratiobased upon theBasle risk-weighted assetmethodology. Thisinternationally accepted ratiowill
regulate capital/asset composition ofthebanking system soastopreclude anyundesirable situations
from arising infuture. Moreover thissystem willtreatevery bankinthesame manner whether they
areincorporated locally oroverseas.WT/ACC/VUT/6
Page38
Question 123.
Could Vanuatu provide details ontheprecautionary checks carried outbytheauthorities before
issuance ofabanking licence?
Reply
Priortotheissuance ofabanking licence, precautionary checks arecarried outandtheapplicant
hastoprovide thefollowing information:
- details ofthecapital structure oftheproposed bank, itsshareholders andthedistribution of
theshareholding;
- evidence thattheapplicant hasmanagement expertise inthearea;
- thenames ofnominated bankdirectors/CEO andproof ofgood financial repute;
- copyofthelatest audited financial statements ofthecorporation;
- numbers andnames ofthedirectors andpromoters ofthebank andtheirplace ofresidence;
- theapplicant hastoprovide allthedocumentation andsecurities requested bytheReserve Bank
ofVanuatu;
- letters ofreference from theCentral bankandBank Supervisory Authority ofitscountry of
origin;
- theapplicant should haveexpertise ininternational financial markets;
- theemployees ofthebankhavetoshow theyhavethenecessary management expertise inall
facets ofthebanking industry;
- submit adetailed feasibility study which includes theobjectives, operations, financial viability
ofthebank, andcorporate planindicating financial products andservices tobeoffered, market
demand forthose products andservices, andprojected balance sheet profit andlosscashflow
statement forthefirstthree years ofthebank’soperations;
- applicants mustshow thattheproposed minimum capital requirement wasobtained legally.
Telecommunications
Question 124.
Wenotethatthere isarequirement forpresent shareholders togivepermission foranynew
participant togainequity inTelecom Vanuatu Ltd. Does Vanuatu have anyplans toprivatise
further theownership ofTelecom Vanuatu Ltdortointroduce competition into any
telecommunications services?
Reply
Vanuatu does nothave anycurrent plans toprivatise further theownership ofTelecom
Vanuatu Ltdnorisitplanning tointroduce anydirect competition intelecommunication services.
Thegovernment isnowonlyaone-third shareholder inTelecom Vanuatu.
Professional Services
Question 125.
DoesVanuatu permit cross-border supply ofprofessional services suchaslegaladvice? Areforeign
professionals allowed tosetuppractice inVanuatu and,ifaresidency orwork permit isrequired
forthis,howandaccording towhat criteria issucharesidency orwork permit obtained?WT/ACC/VUT/6
Page39
Reply
Vanuatu doesallow cross-border supply ofprofessional services suchaslegaladvice. However
theadvice must beprovided through anexisting firminVanuatu. These lawyers donothavetobe
registered bytheLawCoiuncil
Vanuatu allows foreign professionals tosetuppractice inVanuatu withresidence andwork
permit criteria nodifferent from anyother noncitizen intending toreside andwork inVanuatu.
Professionals mustalsoinvest VT5million inorder toreceive theirbusiness licence andresidency
foroneyear. Forlegalpractitioners thereisaneedtobeaccepted bytheVanuatu LawCouncil, which
iscomprised oftheChief Justice, theAttorney general andonelocalrepresentative oftheprofession.
Thelawcouncil accepts lawyers onthree conditions:
- thelawyer must bearesident ofVanuatu;
- he/she musthaveatleattwoyears post-graduate experience. (This isnormally asanarticled
clerk);
- havealawdegree which isaccepted bytheLawCouncil.
Ifthelawyer isacceptable totheLawCouncil thenitispossible toapply tobeaccepted to
theVanuatu Bar
Question 126.
Areforeign legal firms andlawyers abletoprovide consultations onlegislation other thanthat
oftheir home country?
Reply
Foreignlegalfirmsandlawyerscanprovideconsultationsonlegislationofanylegaljurisdiction.
Question 127.
What areforeign lawyers allowed todo?Cantheyprovide legal services onthelegislation of
Vanuatu, thedomestic lawsoftheforeign lawyers country, international lawsandthird country
laws?
Reply
Foreign lawyers resident inVanuatu candoexactly thesame asdomestic lawyers. However
foreign lawyers canonlyprovide services from abroad through alocallawfirm. Iftheyareresident
inVanuatu theyhaveexactly thesame rights asalocalfirm.
Question 128.
What kindoflegalactivities cantheydo?With regard toestablishment ofaforeign lawyer ’soffice
inVanuatu, arethere anyrestrictions?
Reply
Lawyers resident inVanuatu arepermitted toprovide afullrange oflegalservices independent
ofexisting firms. Itisonlyincases where lawyers arenon-resident thattheymustsupply through aWT/ACC/VUT/6
Page40
localfirm. Their righttoestablish isexactly thesame asanyother business. Theprecise conditions
forobtaining abusiness licence arecontained inthemainbody oftheanswers tothequestions posed
intheconsolidated questions (documents WT/ACC/VUT/2 andWT/ACC/VUT/4).
Question 129.
With respect tothethree basic qualifications required bythelegal provisions, arethese
requirements alsoapplied toforeign lawyers. Ifso,wewould appreciate further explanations
about therequirement thathe/she undertake atwoyearpost-graduate training inVanuatu. Are
there other requirements foraforeign lawyer topractice legal services, than those mentioned
intheanswer toquestion 92ofWT/ACC/VUT/4.
Reply
Yes,these requirements arealsorequired offoreign lawyers. However theSecretary tothe
LawCouncil hasclarified thatitisnormal practice thatperiod ofarticling thatisnormal withforeign
lawyers isaccepted inlieuof‘post-graduate training ’.Thusthereisnorequirement forforeign lawyers
toundertake further study before beginning practice inVanuatu. There arenofurther requirements
apart from those outlined intheanswer toquestion 92ofWT/ACC/VUT/4.
Question 130.
Could Vanuatu provide information onanyoperating restrictions onforeign accounting firms?
Reply
Vanuatu doesnotoperate anyrestrictions onforeign accounting firms.
Education Services
Question 131.
Could Vanuatu provide details ofanylimitations onaccess totheeducation services market for
foreign education service providers?
Reply
There arenolimitations ontheaccess toforeign service providers toeducation services market
inVanuatu.
Broadcasting
Question 132.
Could Vanuatu provide details ontheconditions ofaccess totheaudio-visual service market for
foreign providers?
Reply
Withtheexception ofthose limitations contained intheCensorship ofFilms ActCap.72,there
arenorestrictions ontheaudio-visual market. Under thislegislation acensorship board which existsWT/ACC/VUT/6
Page41
inLuganville andPortVilaonlymayprohibit thesaleordisplay ofaudio-visual products ifitisdeemed
necessary forthe"preservation oflocalcustoms andtraditions".
Gambling
Question 133.
Could Vanuatu provide details oftheregulations governing access tothissector forforeign service
providers?
Reply
Acopy oftheregulations governing access togambling isavailable forconsultation inthe
Secretariat (Accessions Division, Room 1126)
Other Services
Question 134.
Could Vanuatu indicate whether there arelimitations onmarket access forforeigners inthe
construction,distribution,environmentalservicesandhealthservicessectors?Isnationaltreatment
applied toforeign service providers inthese sectors?
Reply
There arenolimitations onmarket access forforeigners intheconstruction, environmental
services andhealth service sectors.
National treatment isapplied toforeign service providers inthese sectors.
Intheareaofdistribution however there arelimitations onnational treatment inthemobile
retail sector. However inthelarger supermarkets there arenorestrictions.
Land
Question 135.
Arethere anyplans tochange theadministration ofthelandlease system inVanuatu? What
areVanuatu ’splans inrelation totheresolution oflanddisputes?
Reply
Vanuatu hasnoplans tochange thecurrent landlease system. There isaconstant review of
administration toassure itsefficiency. Atpresent thesystem oflanddisputes issettled byresort to
customary law.