RESTRICTED
WORLD TRADE WT/ACC/JOR/2
27June1996
ORGANIZATION(96-2444)
Original: English
ACCESSION OFJORDAN
Memorandum ontheForeign Trade Régime
Inacommunication dated 25September 1995 (WT/ACC/JOR/1), theGovernment ofthe
Hashemite Kingdom ofJordan applied foraccession under Article XIIoftheAgreement establishing
theWorld Trade Organization (WTO).
FollowingJordan'sapplicationandhavingregardtotheDecisionadoptedbytheGeneralCouncil
on31January 1995 (WT/GC/M/1), theWorking Party ontheAccession ofJordan totheGATT 1947
wastransformed intoaWTO Accession Working Party. Theterms ofreference oftheWorking Party
arealsocontained indocument WT/ACC/JOR/1.
Inaccordance withprocedures (WT/ACC/1), theSecretariat iscirculating theattached revised
Memorandum ontheForeign Trade Régime received fromtheGovernment ofJordan. Members of
theWorking Party wishing tosubmit questions ontheMemorandum areinvited todosoby22July1996
fortransmission totheauthorities ofJordan.WT/ACC/JOR/2
Page2
Table ofContents
Page
COUNTRY PROFILE 5
I. Characteristics oftheJordanian Economy 5
1.1 Restructuring oftheJordanian economy 6
1.2 Economic trends in1992-1994 6
1.3 Planforeconomic andsocial development 7
1.3.1 Objectives andbasic principles ofthePlan
1.3.1.1 Economic &social objectives 7
1.3.1.2 Basic principles 8
1.3.2 Economic &social policies 9
1.3.2.1 Macro policies 9
1-Fiscal policies 9
2-Monetary policy 9
3-Social policy 9
1.3.2.2 Sectoral policies
1-Social sectors policies 10
2-Investment sectors policies 11
3-Infrastructure sectors policies 12
4-Comprehensive sectors policies 13
II. Main Features oftheExternal Sector
2.1 Commodity &geographical structure offoreign trade 13
2.2 Balance ofpayments 13
2.3 Jordan ’sexternal debt 14
III. Trade Policy
3.1 Foreign exchange regime
3.1.1 Exchange arrangements 14
3.1.2 Administration ofcontrol 15
3.1.3 Prescription ofcurrency 15
3.1.4 Non-resident accounts 15
3.1.5 Foreign currency accounts 15
3.1.6 Imports &import payments 16
3.1.7 Imports intofreezones 16
3.1.8 Payments forinvisibles 16
3.1.9 Exports &export proceeds 17
3.1.10 Proceeds from invisibles 17
3.1.11 Capital 17
3.1.12 Gold 17
3.1.13 Changes during 1995 17
3.2 Trade regime 18
3.2.1 Tariff system 19
3.2.2 Non-tariff measures &import/export regulations
3.2.2.1 Import &export law 21
3.2.2.2 Prohibitions 22
3.2.2.3 Imports through Government 22
3.2.2.4 Prior approvals 22WT/ACC/JOR/2
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3.2.2.5 Rules oforigin 23
3.3 Export promotion &incentives 23
3.3.1 Customs dutyexemptions intheform oftemporary
entry &drawback schemes 23
3.3.2 Credit facility ofCBJ 23
3.3.3 Loans granted toIDB 24
3.3.4 Income taxexemptions 24
3.4 FreeZones 24
3.5 Transit rules 25
IV. Other Policies Affecting Trade
4.1 Investment policy 25
4.2 Industrial policy 28
4.3 Agricultural policy 28
4.4 Pricing policy 29
4.5 Subsidy policy 29
4.6 Income taxsystem 30
4.7 State-owned enterprises 30
V. Participation inBilateral Trade Agreements
5.1 Preferential trade arrangements 31
5.2 General system ofpreferences (GSP) &ECAgreement 31
VI. Institutional Organization ofForeign Trade
6.1 Ministry ofIndustry &Trade 32
6.2 Ministry ofFinance/Customs Department 32
6.3 Jordan Export Development &Commercial Centres Corporation 33
6.4 Agricultural Marketing Corporation 33
6.5 Private sector institutions 34
6.5.1 TheFederation ofChambers ofCommerce 34
6.5.2 Amman Chamber ofIndustry 34
6.5.3 TheJordanian Businessmen Association 34
6.5.4 TheJordan Trade Association 34
6.5.5 Agricultural Marketing &Processing Co. 34
VII. Intellectual Property Protection
7.1 General 35
7.2 Substantive standards &protection, including procedures
fortheacquisition &maintenace ofintellectual Property Rights 35
7.3 Measures tocontrol abuse ofintellectual property rights 37
7.4 Enforcement 38
7.5 Laws, decrees, regulations &other legalactsrelating totheabove 39
7.6 Statistical dataonapplication forandgrants of
intellectual property rights, aswellasany
statistical dataontheirenforcement 39
VIII. Trade Related Services RegimeWT/ACC/JOR/2
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8.1 General description oftheoverall market 39
8.2 Policies affecting trade inservices 40
8.3 Specific sectors
8.3.1 Financial services
8.3.1.1 Banking services 41
8.3.1.2 Insurance services 42
8.3.1.3 Amman Financial Market 44
8.3.2 Telecommunication services 44
8.3.3 Health services 46
8.3.4 Tourism services 47
8.3.5 Construction services 47
Annex 1 ListofRegulations 48
Annex 2 ListofBilateral Agreements between
Jordan andother countries 49WT/ACC/JOR/2
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Country Profile
Area andLocation
Jordan measures 89544 square kilometres. Itforms ageographical unitwiththeSham Region
(large Syria) intheaspects oftopography, population, weather andhistory. Jordan occupies amiddle
location among theArab-Asian States. Itissurrounded bySyria fromtheNorth, IraqandSaudi Arabia
from theEast, GulfofAqaba andSaudi Arabia from theSouth andPalestine from theWest.
Topography
Topographically, Jordan isdivided intofourregions: theplateaus consisting ofnorthern and
eastern plateaus; thevalleys, comprising theJordan Valley, theDead SeaValley andtheWadi Araba
Valley; themeadows; andthedesert.
Hydrography
(i) TheDead Sea(40miles longand10miles wide).
(ii) TheGulfofAqaba.
(iii) TheRiver Jordan (rises inside Syria andisabout 175miles long).
(iv) TheRiver Jordan Tributaries: Yarmouk, Zarka andMujib.
Population
Thepopulation ofJordan exceeds 4.0million withanaverage growth rateof3.2percentfor
thelastdecade. Jordan isayoung nation interms ofpopulation age,asmore thanhalfofthepopulation
or(51percent)arebelow theageof15,andthepercentage oftheelderly doesnotexceed 4percent
oftotalpopulation.
ThePolitical Regime
Thepolitical regime isaconstitutional monarchy withthreeseparate powers infulldemocratic
manner:
(i) Legislative: Itcomprises theKingandtheParliament which consists oftheUpper House of
Parliament (40members) andtheLower House ofParliament (80members).
(ii) Executive: Itcomprises theKing, Prime Minister andtheCouncil ofMinisters.
(iii) Judiciary: Itcomprises thecivilcourts which consist ofthecourts ofthefirstandsecond
instance, thecourts ofappeal andthecassation. Thereligious courts aredivided intosharia
courts forMoslems andcouncils ofreligious communities fornon-Moslems.
I. Characteristics oftheJordanian Economy
Jordan 'seconomic position reflects itsstructural features anditsstrong linkstotheeconomies
oftheregion. Macroeconomic andfinancial imbalances thatcharacterized theJordanian economy
throughout theprevious threedecades werecontinuously counterbalanced byexternal financial inflows
intheformofworkers 'remittances andgrants fromregional countries. Theregional recession resulting
from declining oilprices inthemideighties severely curtailed these financial inflows. Economic
imbalances surfaced. Bothfiscal andexternal current account deficits reached around 20percentof
GDP, andtheexternal debtincreased toalmost 165percentofGDP. Thisnecessitated thelaunching
ofacomprehensive programme ofeconomic reform which consisted ofapackage ofpolicy and
institutional measures tobring about fiscal andmonetary stability, aswellas,astructural transformationWT/ACC/JOR/2
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oftheeconomy. Thisprogramme wassupported in1989 bytheIMF, theWorld Bank andother
development partners ofJordan.
1.1 Restructuring oftheJordanian Economy
Attheheart oftheadjustment programme isthereduction ofthemacroeconomic imbalances,
especially thereduction ofthebudget deficit. Tomaintain abalance between thedemand forthelimited
availabilityofresourcesinthefuture,theprogrammewasdesignedtoreducethebudgetdeficit(excluding
grants) fromthe1991levelof17.8percentofGDP to2.5percentofGDP by1998. Thisreduction
would require structural changes inJordan 'srevenue baseandinthepattern ofexpenditures. The
measures contemplated bytheGovernment areexpected toincrease domestic revenues from29percent
ofGDP in1991 toabout 31percentofGDP by1998, andtoreduce thecurrent expenditures from
about 37percentofGDP in1991 toabout 26percentduring thesame period. Thekeypolicy for
enhancing revenues wastheintroduction ofageneral salestax(GST).
Other fiscal measures focus onexpenditure andsubsidy reduction. These measures areintended
toreduce expenditures byabout 4percentofGDP in1992; afurther reduction of1-2percentof
GDP annually willbepursued over themedium term. Themost important measures toreduce
expendituresonsubsidiesincludeincreasesinthedomesticpricesforpetroleumderivativesandreductions
inthefoodsubsidies. Finally, thedesign andimplementation ofaprogramme toimprove thefinances
ofloss-making public enterprises areanimportant element oftheGovernment 'sexpenditure reduction
programme. Thetargeted enterprises areRoyal Jordanian Airlines, Public Transportation Corporation,
Agricultural Marketing Organisation.
TheGovernment carried outasubstantial depreciation oftheexchange rateduring 1989 and
iscommitted tomaintaining aflexible exchange ratepolicy. Inviewofthestringent demand management
policies implicit inthefiscal programme, nopressures ontheexchange rateareexpected. The
Government intends tointroduce further trade liberalization measures toprotect theobjectives ofthe
trade reform.
Inindustry, therestructuring ofincentives would beaccompanied bygovernment actions aimed
atstrengthening institutions insupport ofmanufacturing andexports. Inagriculture, theGovernment
isplanning anumber ofmeasures toderegulate production andtradeandtoimprove support services
forthefarmer. Moreover, theGovernment hasformulated anenergy sector adjustment programme,
inorder toimprove theefficiency ofenergy useandstimulate long-term energy resource development.
Asforpublic enterprises thatincur losses andareamajor burden onthebudget, theGovernment aims
atrestoring thefinancial viability intheshort run.Inthelongrun,greater competition will be
introduced forthegoods andservices provided bythese enterprises .
1.2 Economic Trends in1992-1994
Adjustment efforts thatwere initiated in1989 were bearing fruitandtheeconomy hadjust
started torespond favourably tothese efforts when theGulfcrisis erupted inmid1990. Asaresult,
imbalances wereaccentuated asJordan 'sexports sharply dropped, remittances fromJordanian workers
fellandincomes from transit transport, tourism andtravel were lost.Moreover, theinflux ofabout
300,000 Jordanians working abroad, thesurge ofunemployment toaround 25percentofthelabour
force andadecline inpercapita income andconsumption posed serious challenges forJordan.
TheGovernment,determinedtocarryouteconomicreforms,resumedtheadjustmentprogramme
andwasabletosurpass thetargets fortheperiod 1992-1994. After several years ofdecline andvirtual
stagnation ineconomic activity, realGDP increased bymore than11percentin1992. Bumper
agricultural crops, andasurge inconstruction, trade, andmanufacturing activities contributed tothisWT/ACC/JOR/2
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record increase inoutput. In1993and1994, realGDPgrowth registered 5.7percentand5.8percent
respectively. Price stability wasanother noteworthy achievement; budgetary andmonetary restraint
onthedemand sideandadequate availability ofdomestic andimported goods onthesupply sidehelped
contain inflation toaround 4percentin1992, 4.8percentin1993 and3.9percentin1994.
Themost significant anddetermined adjustment effort wasmade inthebudgetary area. The
GovernmentofJordansuccessfullyimplementedrevenueenhancingmeasures-includingalargeincrease
inpetroleum product prices, andreduction offoodsubsidies. These fiscal efforts, combined withstrict
expenditure control andbuoyant revenue collection associated withthesurge indomestic economic
activity, contributed substantially toasharp reduction inthefiscal deficit, tolessthan6percentof
GDPin1992, 4.3percentin1993and2.6percentin1994compared to18percentrecorded in1991.
Thebalance ofpayments position strengthened significantly in1992-1994. Domestic exports
increasedsystematicallythroughout1992-1994.Workers'remittancesandtourismreceiptsalsoregistered
marked improvements resulting inasurplus intheservices balance in1993 and1994. Thecurrent
account deficit toGDP reached 11percentin1993 and4.2percentin1994 compared to6percent
in1992.TheGovernment'scommitmenttomaintainacompetitiveexchangeratepolicyandthemeasures
taken tofurther liberalize theforeign exchange system contributed tothisachievement. Jordan also
succeeded inreducing substantially theoutstanding external debtbothinnominal terms andinrelation
toGDP, andimproved significantly itsdebtprofile andcreditworthiness through prudent debt
managementpolicy.SubstantialdebtrelieffrombilateralofficialcreditorsgreatlycomplementedJordan's
efforts toward stabilization ofexternal debtmanagement. Theoutstanding external debtdeclined to
142percentofGDP in1992, 133.6 percentin1993 and115percentin1994 compared with
189percentin1990.
Thisremarkable growth andJordan 'srelentless efforts toachieve economic reforms havehad
adverse effects especially onthelow-income segments ofsociety. Although unemployment wasreduced
toabout 15percentbytheendof1992through 1994, itstillremains amajor challenge which requires
effectivemediumandlongtermremedialmeasuresthroughexpansionofprivateinvestment,establishing
labour intensive projects, promoting export industries, organising theinflow offoreign workers,
encouraging external migration andregulating theoutput oftheeducational system .Percapita income
declined inrealterms fromJD.728 in1988toJD.615 in1994. Moreover, thepercentage offamilies
under thepoverty lineincreased from18.7percentin1987to21.3percentin1991andthendeclined
to16.1percentin1992.
1.3 PlanforEconomic andSocial Development 1993-1997
Theissuesofunemploymentandpovertyarenotaddresseddirectlyintheadjustmentprogramme.
These highly sensitive issues havetobedealt withinorder toallow forsteady improvement inper
capita income andliving standards. Thus, theGovernment encompassed theadjustment programme
inamorecomprehensive economic andsocial package intheformofthenewfiveyearplan,1993-1997,
tocomplement itandincrease itschances ofsuccess bypaying attention tosocial issues thatthe
programme didnotaddress.
1.3.1 Objectives andBasic Principles ofthePlan
1.3.1.1 Economic andSocial Objectives
Thebasic objectives ofthePlanarethefollowing:
1. Toensure fiscal andmonetary stability andeliminate price andproduction distortions;WT/ACC/JOR/2
Page8
2. Toredirect economic activities andpolicies withtheaimofreducing disparities among social
groups andgeographical regions; byinsuring equality ofopportunity, combating poverty and
providing allcitizens withbasic services.
3. Tocombat poverty andprotect underprivileged groups ensuring aminimal levelofdecent living
forthem;
4. Toexpand anddiversify theincome andemployment-generating production baseandtodevelop
ahighly competitive export sector;
5. Toenhance thecapabilities ofallcitizens andcreate theproper conditions conducive tocitizens
toinvest theirpotential;
6. Toconserve theenvironment andprevent thedeterioration ofitscomponent elements. This
istobeachieved byregulating economic andhuman activities insuchawayastosecure a
healthy environment forpeople aswellasforfauna andflora, toensure non-depletion of
exhaustible resources andtocheck soilerosion, desertification andpollution.
1.3.1.2 Basic Principles
Theeconomic policy inJordan isbased onanumber ofgeneral principles mostimportant of
which arethefollowing:
1. Todevelop theregulatory andsupervisory roleoftheGovernment andtoreduce itsdirect
roleinproductive sectors suchasagriculture, mining, manufacturing industries, wholesale andretail
trade, restaurant andhotels andfinance andbusiness services; toactivate private sector investment
intheareas ofdirect production, infrastructure, andbasic services; andtorestructure public sector
corporations withfinancial difficulties; through improving theirefficiency andgradually implementing
measures toeliminate subsidies, recover costs andadopt commercial performance criteria.
2. Todevelopnaturalresources,particularlywaterandenergy,throughidentifyingwaterresources
andchannelling available quantities towards thebestpossible useswithin anintegrated water plan,
ensuringoptimaluseofavailableenergysources;anddevelopingproductioninstitutionsadministratively
andfinancially;
3. Todevelop theexport sector byopening newexport outlets, expanding traditional markets,
andtraining manpower inamanner commensurate withtheneeds ofexploiting variable resources and
therequirements ofindustries andservices enjoying acomparative advantage. Thiswould involve:
(a) Developing theservices needed forincreasing export opportunities;
(b) Reviewing andamending legislation, policiesand measures needed forfurthering exports;
(c) Improving thequality ofJordanian product soastomeettherequirements ofexport markets,
andensuring parity ofJordanian specifications withtheirinternational counterparts;
(d) Ensuring theprovision ofadequate creditfacilities forthepromotion ofexports;
(e) Amending thecustoms tariff structure toremove anybiasagainst export industries;
(f) Activating andpromoting theroleofprivatesector export corporations;
(g) Reassessing theefficiency ofbilateral trade agreements andprotocols inpromoting exports.
4. Toensure abalance between human andeconomic resources through thedevelopment of
education andvocational training;
5. Tocreate newjobopportunities inthevarious production sectors, withtheaimofachieving
areduction inunemployment toanacceptable level. Thisistoberealised through:
(a) Expanding training opportunities fortheunemployed andforlowincome groups toenable
themtoacquireadditionalskillswhichwouldincreasetheircompetitivenessinthelabourmarket;WT/ACC/JOR/2
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(b) Secure financing forincome andlabour-generating projects, particularly forlowincome groups;
(c) Promoting small labour-intensive industries;
(d) Regulating thelabour market, andidentifying work opportunities abroad toabsorb partofthe
unemployed;
6. Tobuild national capabilities inthefields ofscience, technology andinformatics through:
(a) Keeping abreast ofandassimilating technological developments.
(b) Establishingspecialcentresfordevelopingproductionmethodsinthelightofmoderntechnology
findings;
(c) Utilizing worldwide technological progress andmobilizing thescientific capabilities ofresearch
centres anduniversities toensure proper assimilation anddevelopment oftechnology for
thebenefit oftheJordanian economy;
(d) Developing andestablishing economic andsocial datacollection systems atvarious levels
inorder toensure theavailability ofup-to-date information toserve asabasis foreconomic
andsocial studies, anddecision-making.
1.3.2 Economic andSocial Policies
Themacroeconomic andsectoral policies oftheGovernment canbedescribed asfollows:
1.3.2.1 Macro Policies
1. Fiscal Policies
Fiscal policies willseektoreduce thedeficit inthepublic budget through controlling expenditure
andincreasing domestic revenues. Toachieve this,thefollowing measures willbetaken: thegovernment
subsidy forcommodities willbegradually reduced and,forpublic institutions, completely eliminated;
government services costs willberecovered aftertaking theneeds oflimited income groups into
consideration; thetaxbasewillbeexpanded anditsefficiency improved; andtheconsumption tax
willbereplaced byageneral salestax.
2. Monetary Policy
Themonetary policy willseektosecure monetary stability toensure general price stability
inaddition toadequate financing foreconomic activities. Thisistobeachieved through control of
themoney supply, consolidation offoreign currency reserves, continued liberalization ofinterest rates,
theestablishment ofadeposit insurance corporation, theamendment oftheBanking Lawtoprovide
forCentral Bank supervision ofallbanking establishment andfinancial institutions, andthereduction
ofmonetary control restrictions.
3. Social Policy
Thesocial policies during thisperiod willseektoreduce development disparities among social
groups andregions andtoadvance social integration through theprotection oflower income groups
andcontrol ofsubsidy policy bydirecting ittotarget groups. They alsoaimatcontinued regional
development andatensuring abalance between resources andpopulation bylimiting theuseofresources
andadopting appropriate population policies tobeachieved through:
1. Optimal utilization ofallresources intheKingdom ’sregions.
2. Increasing jobopportunities andincome forinhabitants intheirdevelopment region andunits
todiscourage migration toalready congested centres.WT/ACC/JOR/2
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3. Widening public participation intheprocess ofdecision making, plan formulation,
implementation, andevaluation.
4. Creating development centres inabalanced manner among andwithin regions.
5. Attaining abalanced geographical distribution ofpopulation toserve theobjectives ofstrategic
development.
6. Bridging disparities between andwithin regions toimprove economic growth andquality of
life.
Thesocial policies willalsofocus onsafeguarding thefamily asacornerstone ofsociety.
1.3.2.2 Sectoral Policies
1. Social Sectors Policies
Thesocial sectors policies aimatraising theliving standard ofthepopulation through improving
thequantity andquality ofthesocial services offered tothem, enhancing jobopportunities, andreducing
poverty. Most important among thesocial policies arethose which seektoaccomplish thefollowing:
(a) Toachieve abalance between resources andpopulation, toorient social services andgovernment
support towards needy groups, particularly those below thepoverty line,andtotrainand
rehabilitate suchgroups;
(b) Todirect thework ofnon-governmental charitable organizations towards income and
labour-generating projects forpoorfamilies;
(c) Todevelop employment policies based onthefollowing:
(i) Increasing thefinancing available tosmall andmedium-size enterprises under the
guaranteed umbrella ofspecialized funds;
(ii) Encouraging theestablishment ofprivate employment agencies;
(iii) Finding jobopportunities outside Jordan bydisseminating information about localtalent
andexperienceandpromotingtheiremploymentthroughbilateralagreements,Jordanian
embassies andprivate employment agencies;
(iv) Regulating theoutput oftheeducational system through incentives andvarious
vocationaltrainingprogrammes,inamannerconsistentwithlabourmarketrequirements;
(v) Providing sufficient information anddataonlabour supply anddemand, ensuring a
balance between them, andsearching foremployment opportunities abroad by
establishing anemployment andlabour force organisation withparticipation bythe
public andprivate sector.
(d) Todevelop allcycles ofeducation, improve school testsandpublic examinations, andupgrade
teaching efficiency;
(e) Toimprove health care, andadopt apharmaceutical policy thatwould ensure thesustained
provision ofmedicines inaccordance withthefollowing:
(i) Reviewing existing rules andregulations related tothemanufacturing, import and
distribution ofdrugs.WT/ACC/JOR/2
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(ii) Providing allessential drugs atalltimes andensuring asufficient supply oflife-saving
drugs.
(iii) Providing allmedical requirements incaseofnatural disasters andother emergencies,
including humanitarian assistance toothers.
(iv) Improving theroleofdomestic pharmaceutical industries inproviding medicines to
thelocalmarket.
(f) Toestablish public libraries onawidescale, particularly inlocal communities, andtogive
more attention tochildren 'sculture;
(g) Totrainandrehabilitate thedisabled through vocational training, andtostrengthen theNational
Assistance Fund;
(h) Topromote vocational training forjobseekers andraise occupational health, safety and
environmental standards infirms andcorporations.
2. Investment Sectors Policies
Theinvestment sectors policies seektocreate anappropriate investment climate conducive
totheenhancement ofproduction fordomestic consumption andexport andtotherationalization of
imports. Thisistobeachieved by:
(a) Providing investment information andstreamlining registration andlicensing procedures;
(b) Promoting reliance onnon-credit financing facilities andencouraging thebanking sector to
finance needed investments;
(c) Reducing government intervention inpricing policies, preventing theformation ofmonopolies,
andprotecting consumers;
(d) Amending thetaxsystem byeliminating theanti-export andanti-manufacturing biasand
streamlining implementation procedure by:
(i) Establishing aclearly defined system ofclassification ofgoods bycategory, each
category tocomprise fourclasses: primary, manufactured, semi-manufactured and
final-consumption goods, anddetermining thecustoms tariff rateforeachclassso
astoreduce existing variation intariff rates;
(ii) Applying afixed-rate drawback system tobeimplemented according toanapproved
equation which serves boththeproducer andtheexporter;
(iii) Adopting aflexible customs tariff system which allows fortherevision oftariff rates
according tofixed criteria;
(iv) Developing andcomputerizing theinformation system related totypes ofimported
goods andtheirworld prices inorder tofacilitate thevaluation ofgoods;
(v) Gradually introducing, wherever practical orfeasible, book auditing bytheCustoms
Department toreplace on-the-spot auditing;WT/ACC/JOR/2
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(vi) Reducing theperiod needed forrefunding customs duties andfeespaidforimported
goods,after re-export;
(vii) Granting taxincentives, through theIncome Taxbylinking taxincentives inthe
manufacturing sector directly toinvestment andexport processes bygranting an
accelerated depreciation allowance andadeduction, from revenues, ofallresearch,
development andmarketing expenses andabolishing feesandtaxes imposed onthe
capitalization ofshareholders ’rights;
(e) Amending theEncouragement ofInvestment Lawtoincrease investment incentives;
(f) Improving thequality ofJordanian goods andservices toraise their competitiveness
internationally by:
(i) Complying withinternational specifications current inexport markets;
(ii) Settingupeducationalandawareness-buildingprogrammesontheimportanceofquality;
(iii) Completing andupdating Jordan ’scodes andissuing andupdating related manuals;
(iv) Controlling thequality ofmaterials usedinmanufacturing industries.
(g) Developing localmaintenance capabilities andregulating auditing services;
(h) Restoring financial andadministrative autonomy topublic institutions andpermitting theprivate
sector toprovide public services;
(i) Promoting exploration fordomestic ores, withprivate sector involvement;
(j) Organizing agricultural marketing activities andoperations, expanding theareaofcultivable
land, andhelpsecure thenecessary financing foragricultural activities.
3. Infrastructure Sectors Policies
Theinfrastructure sectors policies seektomaintain andupgrade theefficiency ofinfrastructure
facilities by:
(a) Involving theprivate sector intheimplementation andmanagement ofinfrastructure;
(b) Completing thedevelopment oftheinfrastructure needed bytheinvestment sectors;
(c) Enhancing public awareness ofthelimited nature ofwater andenergy resources, andimproving
theutilization ofsuchresources;
(d) Improving thefinancial andmanagerial efficiency ofpublic organizations bycomputerizing
theiractivities, rationalizing theiruseofhuman resources, anddecentralizing theirwork to
ensure flexibility inperformance;
(e) Regulating water useandraising theefficiency ofwater carrying systems inorder toreduce
loss;
(f) Promoting thecompetitiveness ofdomestic contracting andengineering consultancy firms.WT/ACC/JOR/2
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4. Comprehensive Sectors Policies
Comprehensive sectors policies aimatimproving public administration, raising scientific and
technological standards, adapting technology todomestic uses, andconserving theenvironment.
II. Main Features oftheExternal Sector
2.1 Commodity andGeographical Structure ofForeign Trade
Jordan 'sforeign trade (domestic exports +imports) withtherestoftheworld witnessed a
considerable expansion during thelasteight years. Thevolume oftrade grew, onaverage, by
15.7percentduring theperiod (1988-1994). Itsvalue increased from JD(1347.3) million in1988
toJD(3594.8) million in1995. Accordingly, theratioofforeign trade toGDP, atcurrent prices,
increased from 59.5percentin1988 to77.8percentin1995.
Domestic exports registered positive growth ratesduring theperiod 1988-1995 except in1991.
Theaverage growth rateduring theperiod reached 20.5percent. Asaresult, theratioofdomestic
exports toGDP, atmarket prices, increased from 14.3percentin1988 to21.7 percentin1995.
Jordan 'smain exports aremineral andmineral-related products, including phosphate rock,
potash andfertilizers. Though theirshare ofdomestic exports showed adownward trend asitdecreased
from 59.4percentin1988 to33.9percentin1995, these three products constituted, onaverage,
45.3percentofdomestic exports during theabove mentioned period. Theshare ofnon-traditional
exports which include avariety ofmanufactured products suchaschemicals andpharmaceuticals and
fruits andvegetables, increased from 40.6percentin1988 to66.1percentin1995.
Allmajor components ofexports suchasmineral based exports andnon-traditional exports
haverecorded widefluctuations reflecting variations intheavailability andopenness ofregional and
other foreign markets, aswellaspricefluctuations. TheArabcountries absorption ofJordanian exports
declined from42percentin1988 to28.8percentin1991, followed byarecovery to35.1percent
in1992, increased to45.0percentin1995. TheJordanian exports toEUaveraged 4.7percentduring
theperiod 1988-1995.
Asforimports, theiraverage annual growth ratewas14.7percentduring 1988-1995. The
highgrowth ratescanbeattributed mainly totheonetimeincrease inpopulation aftertheGulfCrisis
andtheincrease indemand forimports ofcapital goods, rawmaterials andenergy products bythe
industrialsector.Consequently,theratioofimportstoGDPatmarketpricesincreasedfrom45.2percent
in1988 to56.1percent in1995.
Both thecommodity composition andgeographical distribution ofJordanian imports have
relatively remained stable during theperiod 1988-1995. Themajor imports arefoodstuffs, machinery
andtransport equipment, manufactured goods andmineral fuelsandlubricants. Themain sources of
Jordan 'simports havebeentheEuropean Community countries, primarily Germany, Italy, U.K. and
France, followed bytheArab countries. Iraqisthemajor exporter toJordan among countries, given
itsroleasasupplier ofpetroleum products, followed bytheUnited States ofAmerica andGermany.
2.2 Balance ofPayments
Duringthelastfive-yearperiod,Jordan'sbalanceofpaymentscomponentswitnessedconsiderable
changes. Thebalance oftrade deficit surged fromJD(1008.6) million in1990toJD(1347.1) million
in1995. Thisincrease intrade deficit wasmainly financed bytheservices surplus which increased
fromJD(326.4) million toJD(999.9) million during thesame period. Another source offinance wasWT/ACC/JOR/2
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theunrequited transfers which decreased from JD(409.4) million in1990 toJD(178.5) million in
1995.
Furthermore, thecurrent account deficit widened through theyears 1990-1992 butdescended
during thefollowing three years. ItrosefromJD(272.8) million in1990toreach JD(568.7) million
in1992 thenshrank toJD(279.2) million andJD(168.7) million in1994 and1995, respectively. Its
ratio,toGDPatmarketprices,reached3.7percentin1995.Nevertheless,theexternaldebtrescheduling
contributed totheimprovement oftheoverall balance during theperiod 1989-1995. In1991theoverall
balance registered asurplus ofJD(464.2) million ascompared withasurplus ofJD(205.7) million
in1990. Thiswasmainly duetotheincrease inthetransfer ofworkers 'savings intheaftermath of
theGulfCrisis. Theoverall balance recorded adeficit ofJD(36.9) million andJD(218.4) million
in1992and1993, respectively. In1994, thedeficit decreased considerably toreach JD(28.4) million,
andin1995 theoverall balance improved substantially andrecorded asurplus ofJD(316.5) million.
2.3 Jordan 'sExternal Debt
Accumulatedexternalborrowingreacheditspeakin1990withanoutstandingbalanceamounted
toUS$(7591) million, against US$(6412) million in1989. Thisincrease isattributed toGulfCrisis
repercussions onJordan suchastheclosure ofneighbouring export markets.
After thepeakof1990, theoutstanding balance ofexternal debtregistered atangible decline
during theperiod (1991-1993) by12.3percenttoreach $(6658) million bytheendof1993. In
1994 itwitnessed aslight increase toreach $(6885) million. Bytheendof1995 thedebtregistered
$(6844) million.
Jordan ’sexternal debt, measured asdisbursed netofrepayments, plummeted to114.8 percent
and103.8 percentofGDP, attheendoftheyears 1994 and1995 respectively compared with
188.8 percentattheendof1990.This sharp reduction isduemainly tothegovernment efforts to
alleviate theburden byrescheduling anddebtforgiveness. Jordan signed threerescheduling agreements
withParisClubin(1989, 1992, 1993) anddebtrestructuring agreement withLondon Club. Moreover,
Jordan debtforgiveness in1994 and1995amounted toU.S. $(771) million from thegovernments
ofUS,UK, Germany andFrance.
Classification ofexternal debtaccording toitsmaturity in1995 shows thatlong-term loans
constituted 92.9percentoftheoutstanding public debt, whereas theother loans constituted the
remaining percentage. Loans extended byforeign andArab governments formed 68.6percentof
theoutstanding balance ofexternal debt; multilateral institutions accounted for21.3percent; bonds
andleasing contracts formed 7.1percent; andloans fromforeign banks andcompanies formed the
remaining 3.2percent.
III. Trade Policy
3.1 Foreign Exchange Regime
3.1.1 Exchange Arrangements
Thecurrency ofJordan istheJordan dinar. Effective 23October 1995theauthorities pursued
anexchange ratepolicy aiming atachieving thehighest possible degree ofstability intheJDratewith
respect totheU.S.dollar. Since 23October 1995, theofficial buying andselling ratesofJordan dinar
fortheU.S.dollar wereJD0.708 andJD0.710, perU.S$1respectively. Buying andselling rates
forother foreign currencies werelefttofluctuate onthebasis oftheirratesagainst theU.S.dollar
ininternational markets.WT/ACC/JOR/2
Page15
Authorized banks arepermitted toenterintoforward contracts inmajor currencies against the
Jordan dinar forspecified commercial transactions, provided thattheycover suchoperations abroad.
Each authorized dealer 'sforward transactions aresubject toquantitative limits. Forcorporations or
projects considered tobeofvitalnational interest, theCentral Bank mayoffer aforward exchange
facility inrespect offorward exchange cover provided byJordanian banks. There arenotaxes or
subsidies onpurchases orsalesofforeign exchange. Jordan formally accepted theobligations ofArticle
VIII, sections 2,3and4oftheFund Agreement, asfrom 20February 1995.
3.1.2 Administration ofControl
Exchange control isadministered bytheForeign Exchange Control Department oftheCentral
Bank, which alsoissues exchange permits; theCentral Bank hasdelegated toauthorized banks the
issuance ofexchange permits forimport payments and,within permitted annual limits, forpersonal
invisible payments.
Import policy isdetermined bytheMinistry ofIndustry andTrade incooperation withthe
Ministries ofFinance, Supply, Agriculture andHealth. Arrears aremaintained withrespect toexternal
payments.
3.1.3 Prescription ofCurrency
Outward payments maybemade inanycurrency. Proceeds fromexports andinvisibles must
becollected inanyconvertible currency through anauthorized bankinJordan orfrom anonresident
account withanauthorized bankinJordan, orincashinforeign banknotes from abroad.
3.1.4 Non-resident Accounts
Subject totheprior approval oftheCentral Bank, authorized banks mayopen nonresident
accounts indomestic currency. Withdrawals andtransfers from non-resident accounts arepermitted
freely. Theinterest rateisfixed inaccordance withratesprevailing ininternational markets.
3.1.5 Foreign Currency Accounts
AccountsdenominatedinaforeigncurrencymaybeopenedattheCentralBankoratanylicensed
bankorfinancial company bygovernmental andsemi-governmental entities, aswellasbythespecialized
credit institutions, licensed financial companies, anddomestic corporations ofvitalnational interest
includingpublicshareholdingcompanies,providedthatoutstandingbalances(includinginterestearnings)
ineachaccount donotexceed theequivalent ofJD1million. Thisceiling mayberaised incertain
cases.
Jordanian nationals residing inJordan maymaintain foreign currency deposits withlicensed
banks inJordan, provided thatthetotalbalance ofthedeposits thatanyoneperson holds doesnotexceed
theequivalent ofJD500,000. Balances inthese accounts canbeutilized formaking current payments
abroadconsistentwithregulationsgoverningimportandinvisiblepayments.Jordanianswhohaveworked
abroad formore thansixmonths andhavedecided toreturn maycontinue tokeepaccounts inforeign
currencies without limit foraperiod ofuptofiveyears, afterwhich thedeposits inexcess ofthe
equivalent ofJD500,000 mustbeconverted intoJordan dinars. Licensed banks andfinancial companies
mayextend credit facilities inJDtoresidents andnonresidents against theirforeign deposits uptoJD
100,000 without theprior approval oftheCentral Bank. Credits exceeding JD100,000 mayalsobe
extended without theCentral Bank'sprior approval, provided thattheyarefullybacked bydeposits
inforeign currency.WT/ACC/JOR/2
Page16
3.1.6 Imports andImport Payments
Generally, imports donotrequire alicence. However, imports requiring alicence alsorequire
anexchange permit, which isgranted automatically when animport licence hasbeenobtained; the
importer holding anexchange permit mayeither openaletter ofcredit orpayagainst documents. A
feeof0.10percentislevied onexchange permits forimports except those made bygovernment
departments andcertain approved institutions andindividual permits oflessthanJD300.Theuseof
suppliers'creditsissubjecttopriorapprovalfromtheCentralBank,whichisnormallygivenforessential
imports only.
3.1.7 Imports intoFreeZones
Withthediscontinuation ofCentral Bankissuance ofexchange permits forimports tofreezones
andfortransit trade, itistheimporter 'sresponsibility toprovide foreign currencies tofinance such
transactions. Banks areauthorized tosetthepercentage ofadvance import deposit theycharge their
clients incaseofimports tofreezones orontransit goods based oncustomer 'sfinancial credibility
andongenerally accepted standards.
3.1.8 Payments forInvisibles
Thepolicy onpayments forinvisibles is,ingeneral, liberal andnondiscriminatory.
Residents arepermitted totakeoutortransfer foreign means ofpayment equivalent toJD35
thousand tomeetcurrent payments forinvisibles consisting oftravel, education, medication, pilgrimage,
residence abroad, family assistance andothers without prior approval oftheCentral Bank ofJordan
norpresenting documents tojustify these payments. Thisallowance isgranted annually. Amounts in
excess oftheabove mentioned allowance shallbeconsidered positively, incaseofpresenting supportive
documents.
Premiums oflifeinsurance policies issued byinsurance companies operating intheKingdom
infavour ofnon-residents orJordanians working abroad aretobecollected inforeign currency remitted
from abroad orfrom nonresident accounts.
Afeeof0.10percentislevied onexchange permits forinvisible payments asinthecaseof
imports.
Remittances maybemade bypostal order foramounts notexceeding theequivalent ofJD10
amonth toanyperson residing abroad. Theauthorized amount forsubscriptions tonewsletters,
magazines, andscientific bulletins istheequivalent ofJDonethousand. Inpractice, theCentral Bank
doesnotrestrict remittances ofincome accruing tononresidents orofsavings offoreign nationals
returning totheirowncountries.
Inaddition toanytravel allocation, residents andnonresidents travelling abroad maytakeout
uptoJD5,000 inJordanian banknotes andcoins. Nonresidents working inJordan whodonotmaintain
non-resident accounts maytransfer uptoJD400amonth uptoamaximum ofJD5,000 ayear.
Furthermore,alltravellersmaytakeoutchecks,travellerschecks,orlettersofcreditissuedbyauthorized
banks inJordan, inaccordance withexchange permits authorized bytheCentral Bank. Tourists and
other nonresidents mayalsotakeoutforeign currency notes andcoins andanyother foreign means
ofpayment thattheyhadpreviously brought inanddeclared tothecustoms authorities atthetimeof
entry.WT/ACC/JOR/2
Page17
3.1.9 Exports andExport Proceeds
There arenorequirements affecting export proceeds.
3.1.10 Proceeds from Invisibles
Travellers entering Jordan maybring inanyamount ofJordanian andforeign notes andcoins1.
Anyperson considered forexchange control purposes asaresident ofJordan isnotpermitted toretain
anyforeign currency intheKingdom, except what isallowed forintheForeign Exchange Control
Regulation (theequivalent ofJD500thousand perperson) andshallsellexcessive sums tolicensed
banks, financial companies orauthorized dealers.
3.1.11 Capital
Inward transfers ofcapital arenotrestricted, butoutward transfers require approval andare
notnormallypermitted,exceptthattheCentralBankmayapproveapplicationsmadebybanks,insurance
companies,industrialortradingfirms,agriculturalandtourism,andcontractorsforpermissiontotransfer
funds abroad forspecified investment oroperating purposes. Thetransfer offunds forthepurpose
ofinvesting inArabcountries byindividual investors ispermitted onlyifmutual treatment ofbilateral
agreement exists between Jordan andtheArabcountry invested in,anditistheinvestors 'responsibility
toprovide foreign currency tofinance suchinvestments. Current income resulting fromnon-resident
investments inJordan maybetransferred abroad, capital profits, dividends andinterest fromapproved
foreign investments mayberemitted. TheCompanies LawNo.1(1989) provides various benefits
toforeign companies establishing branches inJordan forpurposes ofconducting business outside the
country; suchbranches mayalsobegranted nonresident status forexchange control purposes. Premium
Development Bonds denominated inJordan dinar maybepurchased withconvertible currencies by
nonresidents;proceedsfromredemptionatmaturity,includinginterestaretransferableinanyconvertible
currency.
3.1.12 Gold
TheCentral Bank hasissued tengoldcoins, which, although legal tender, donotcirculate
andareavailable onlytononresidents anddomestic numismatists. Residents maypurchase, hold, and
sellgoldcoins inJordan fornumismatic orinvestment purpose.
Imports ofgoldinanyform arepermitted without theprior approval oftheCentral Bank.
Exports ofgoldinanyform require theprior approval ofCentral Bank.
3.1.13 Changes During 1995
(a) Exports andExport Proceeds
1January. TheCentral Bank made thefollowing adjustments tothegeneral conditions
concerning itsadvances tolicensed banks andfinancial companies against export credits andbillsand
against bankdrafts andcollections: (1)theinterest ratecharged onexport promotion facilities bythe
1Approval isnotgranted forthecrediting ofsuchJordanian currency toanon-resident account
orfortheremittance abroad oftheequivalent inforeign currency.WT/ACC/JOR/2
Page18
Central Bank wasamended tobe1.0percentinstead of2.5percentbelow theprevailing discount
rate.(2)banks 'commission charged onexporters wasraised from 2.0percentto2.5percent.
(b) Investments
22August. Licensed banks were permitted toinvest 50percentoftheirclients deposits in
foreign currencies inthefollowing forms:
- Extending development loans inJordan. (Subject totheprior approval oftheCentral
Bank except fortheexport sector).
- ParticipationinsyndicatedloansconcludedinsideandoutsidetheKingdomtothebenefit
ofprojects inside theKingdom.
- Government bonds andbillsissued bythegovernments oftheU.S., UK,Germany,
Japan andSwitzerland.
- International andregional institutions ’bonds, highest quality corporate bonds rated
(AAA) and(AA).
- Jordanian Government ’sdebt bonds issued inforeign currency.
(c) Margin Trading
1July.Licensed banks havebeenauthorized tooffermargin trading services fornon-residents,
maintaining foreign currency accounts withaminimum of30percentasamarginal deposit foreach
position.
11July. Banks havebeenauthorized tooffer foreign currency account/ account service for
residents.
(d) Foreign Exchange Regulations
25January 1994topresent. Tofurther liberalize foreign currency regulations, theCentral Bank
ofJordan introduced thefollowing amendments:
- Anyeligible resident ispermitted totakeoutortransfer foreign means ofpayment
equivalent to35,000 instead of20,000 Jordan dinars peryeartomeetcurrent payments
forinvisibles consisting oftravel, education, medication, pilgrimage, residence abroad,
family assistance andothers.
- Licensed banks andfinancial companies wereauthorized toopenaccounts inforeign
currenciesfornonresidentswithoutanyconditions.Inaddition,withdrawalsandtransfers
from nonresident accounts arepermitted freely.
- Applications forexchange permits thatinclude advance payment must besupported
witheither oneofthefollowing twoguarantees, instead ofthefirstoneonly, toensure
therepatriation offoreign currency transferred through thesame bankthatissued the
exchange permit:
- Anexternal banking guarantee ofanamount equal totheadvance payment.
- Alocalguarantee ofanamount equal to20percentoftheadvance payment infavour
oftheCentral Bank.
3.2 Trade Regime
Jordan 'straderegime inthelate1980'swascharacterized byhightariffandnontariffbarriers.
Asaresultofthisprotectivesystems,theoverallincentivestructurefavouredproductionforthedomestic
market. In1989-1994 thetrade regime wasliberalized, aspartoftheoverall structural adjustmentWT/ACC/JOR/2
Page19
efforts. Thefirstphase ofthetradeliberalization process began withtheelimination ofalargenumber
ofquantitative import restrictions in1989; onlyalimited number ofwhich havebeenmaintained for
mineral water andtable saltbecause ofsocial reasons connected withthesectors involved intheir
production. Theother prohibited imports areusedcarsthat fiveyears ormore elapsed since their
production, andplastic wastes forenvironmental considerations. Theimport surcharge islevied for
social, educational, environmental andrecreational purposes. TheLaws establishing someorganisations
suchasuniversities, municipalities, CivilAviation andHussein Sports City, stipulate thatpartoftheir
resources willaccrue from asurcharge taxonimports. TheCustoms Department collects thetax
thatisdistributed lateramong theorganisations concerned. Theauthorities alsoreduced themaximum
combined effective tariff (including theimport surcharge of13percentandtheimport licence fee
of5percent) formerchandise imports other thanluxury goods from more than300percentto
50percent.Thiswasdoneinagreement withtheWorld Bank. Three luxury items stillpaycustoms
duties. These are:alcoholic beverages; tobacco andtobacco products; passenger cars,cargo motor
vehicles andcaravans. Asaresult, theeffective rateofprotection hasdeclined substantially, andthe
dispersion inthetariff schedule hasbeenreduced bymore thanonehalf.
3.2.1 Tariff System
ThefirstCustoms Department inJordan wasestablished in1922 andthefirstCustoms Law
wasadopted in1926. Currently, Jordan isimplementing theCustoms LawNo.16fortheyear1983.
ThisLawisexpected tobeamended in1996taking intoconsideration international developments and
theeconomic policy ofthegovernment. TheCustoms Department isalsoimplementing acomprehensive
planforadministrativereformaimingatstreamlining,simplifyingandcomputerizingcustomsprocedures
toarrive ataonestopservice system.
Tariff Nomenclature
Jordan applies theHarmonized System Nomenclature asof1January 1994.
Tariff Structure
Thetariff structure ismultiple. Thefollowing tableshows thedifferent duties, taxes andfees
imposed onimports:
Type oftax Percentage:
1. Customs duties range from 0-200%
2. Consolidated surcharge tax 6%onallitems subject tocustoms duties
3. Municipalities fees 2%onallitems subject tocustoms duties
4. University fees 4%onallitems subject tocustoms duties
5. Surcharge tax1969
(amended in1989)5%onallitems exempt from customs duties
andarenotbasic commodities norcapital
goods, 3%subject tocustoms duties
6. Import fees 5%onallitems except goods exempted bythe
Cabinet
7. Feesforveterinary andlaboratory
analysiscollected when suchservices arerendered by
governmentWT/ACC/JOR/2
Page20
Tariff Rates
Although thereareseveral import-related duties, taxesandfees,andtherange ofcustoms duties
iswide, theweighted average oftheconsolidated tariff rateis17.1percentIn1996, 2300 items
classified byHSpaidatariff rateof10percentorless.Thefollowing tableshows thedistribution
ofitems bytariff ratein1996:
Consolidated
Tariff RateNumber ofitems
(HS)%
ofitems%
ofimport value
0-10.0% 2300 34.1 54.90
>10 -20% 90 1.3 4.08
>20 -30% 2146 31.8 22.04
40- 895 13.3 6.62
50- 1277 18.9 10.35
>50 - 42 0.6 2.0
Total 6750 100.0% 100.0%
Tariff exemptions aregranted tosome goods depending onthenature oftheiruselikemachinery,
rawmaterials andbasic food-stuffs.
General Sales Tax
Jordan imposes ageneral salestax(GST) atarateof10percentonallgoods except basic
foodstuffs, fuel,agricultural equipment andmachinery, andpharmaceuticals.
Customs Valuation
Customs duties inJordan arecalculated onthebasis oftheCIFvalue ofimports onthe
registration dateofthecustoms declaration form.
Ingeneral, thereiscompliance between realanddeclared prices. However, theLawauthorizes
theCustoms Department todirectly value imported items iftheimporter failstoverify hisdeclared
price.
Duty FreeStatus
Duty freestatus isgranted inthefollowing cases:
1. Items given suchstatus inthetariff schedule.
2. Some imports governed bybilateral trade agreements (protocol trade).
3. Imports ofgovernment institutions according totheCustoms Law, subject tocabinet approval.
4. Imports ofdiplomatic missions, international organizations andregional offices offoreign
companies.
5. Imports ofcharitable organizations subject toCabinet approval, andspecial carsforthedisabled.
6. Imports ofprojects covered bytheInvestment Promotion Law.
7. Imports ofeducational institutions.
8. Imports ofhospitals suchasmedical equipment andmedicines.WT/ACC/JOR/2
Page21
3.2.2 NonTariff Measures andImport/Export Regulations
3.2.2.1 Import/Export Law
ThenewImport/Export LawNo.14fortheyear1992 andtheBy-law No.74fortheyear
1993regulate theflowofimports andexports. Themainfeatures ofthese regulations areasfollows:
1. Noimport licence isrequired except forimports through protocol trade orforthose goods
thatneedprior approvals from thegovernment institutions concerned. These approvals are
considered asimport licences.
2. Noexport licence isrequired forgoods ofJordanian origin.
3. Forthose goods thatrequire animport licence, alicence isgiven fortheduration ofoneyear
thatcanbeextended fortwoyears.
4. Import feesarecollected withcustoms duties.
5. Agricultural andindustrial machinery areexempted from import fees.
6. Rawmaterials exempted from customs duties arealsoexempted from import fees.
Thefollowing items needprior approval from certain government institutions:
Good Party Granting Approval
1. Rice Ministry ofSupply (MOS)
2. Powdered Milk (Halibuna Brand) MOS
3. Wheat Flour MOS
4. Sugar MOS
5. Frozen Lamb MOS
6. Wheat, Barley andCorn MOS
7. Milk forIndustrial Use MOS
8. Frozen Animal Semen Ministry ofAgriculture
9. LiveAnimals Ministry ofAgriculture
10. AllKinds ofArms andAmmunition Ministry ofInterior
Public Security Department
11. AllKinds ofExplosives (PSD)
12. PenKnives andSimilar Articles (PSD)
13. Children ’sAutomobile Toys (PSD)
14. Remote Control Airplane Toys (PSD)
15. Electrical andElectronic Video Games Machines (PSD)
16. Self-Defense Electrical Equipment Such asElectrical Sticks (PSD)
17. AllChemicals Products (PSD)
18. Radio-Active MaterialsMinistry ofEnergy and
andUranium Mineral Resources
19. Mineral RawMaterials Ministry ofEnergy and
Mineral Resources
20. Wireless Transmitters andReceivers Telecommunications Corp.
(TCC)
21. Wireless Alarm Equipment (TCC)
22. AllKinds ofRemote-Control Equipment except those for
TVandVideo (TCC)
23. Transmission andReception Stations (TCC)
24. Cellular Telephone Systems (TCC)
25. Decoders (TCC)
26. Gold oreforManufacturing andReexport Central Bank ofJordan
27. Colour Photocopying Machines Central Bank ofJordanWT/ACC/JOR/2
Page22
28. AllKinds ofMedicines Ministry ofHealth
andAntibiotic (MOH)
29. Food Preparations andFood Complements
Used Especially byAthletes (MOH)
30. Potassium Promades (MOH)
31. DyeNOE104(Quinoline Yellow) (MOH)
32. Asbestos Pipes andBoards (MOH)
33. Halon Material andRural Affairs Ministry ofMunicipalities
34. Postal Clearing Machines Ministry ofPostand
Communications
35. Potato, Onion andGarlic Agricultural Marketing Organisation
3.2.2.2 Prohibitions :There areprohibitions onthreecommodities, mineral water, tablesalt,
andplastic wastes. Inaddition, there isadefacto banonimports ofcarsthatarefiveyears oldor
older forsafety reasons.
3.2.2.3 Imports through Government :TheGovernment regulates theimports andinitial
distribution offivecommodities, sugar, wheat, rice,onebrand ofpowdered milkandcigarettes. Private
sector contractors areselected through tendering andactasagents fortheMinistry ofSupply in
facilitatingtheimportofthecommodity.Fouroftheseproductsarebasicfoodstuffs,theirimportthrough
thegovernment istoensure adequate supply atalltimes.
3.2.2.4 Prior Approvals :There areprior approvals required forfivecategories ofgoods: (i)
some fruits andvegetables; (ii)certain chemicals; (iii)medicines; (iv)some foodstuffs; and(v)
telecommunication equipment. (See3.2.2.1)
Theimports ofallfresh fruits andvegetables aresubject toaplanissued bytheAgricultural
Marketing Organization which determines onaquarterly basis which commodities canbeimported.
Thisregulation ofthemarket aimsatpreventing excessive supply intheJordanian market during the
seasons ofproduction, which would adversely affect farmers. During off-seasons, imports areallowed
tomake agricultural products available atreasonable prices.
Imports ofallfruits andvegetables fromtheArabCountries aresubject toprotocol agreements
andproductexchangeagendassignedbetweenthesecountriesandthegovernmentofJordanrepresented
bytheAgricultural Marketing Organisation. Theproduct exchange agendas determine onayearly basis
thecommodities thatareallowed tobeimported from eachcountry andatwhattime. Thisaimsto
prevent excessive supply ofcertain agricultural products intheJordanian markets andtheother party
market during theproduction seasons ofeachcountry. Ontheother hand, imports ofallfruits and
vegetables from allnonArab countries areallowed allyearround.
There aresome chemicals which require thepermission oftheDirectorate ofPublic Security
oftheMinistry ofInterior before theycanbeimported.
Medicines require permission fromtheMinistry ofHealth (MOH). Thispolicy wasputinplace
outoftheconcern thatJordan could become therecipient ofoutdated medicines anddrugs.
There are6foodstuffs thatrequire permission from theMinistry ofSupply (MOS). These
commoditiesincludeitemssuchasindustrialmilk,barley,animalfoodstuffsandfrozenlamb.Permissions
aregranted automatically bytheMOS.WT/ACC/JOR/2
Page23
Alltelecommunication equipment suchastelephones, facsimile machines, telexes etc.require
theprior approval oftheMinistry ofTelecommunication fortechnical purposes.
3.2.2.5 Rules ofOrigin
- Imported goods should haveacertificate oforigin endorsed byanapproved authority inthe
country oforigin, aswellas,anenclosed invoice.
- National exports should haveacertificate oforigin endorsed bytheChamber ofIndustry or
theChamber ofCommerce and/oranyother authority asrequested bytheimporter, aswell
as,anyother requirement agreed upon intrade protocols.
- Forthepurpose ofre-exporting goods, acertificate offoreign origin hastobeissued andbe
endorsed bytheChamber ofIndustry ortheChamber ofCommerce.
3.3 Export Promotion andIncentives
Export promotion inJordan isarelatively recent activity. Itsimportance became evident after
theGulfwarandthelossofexport markets forJordanian products. TheJordan Export Development
andCommercial Centres Corporation executed aproject forthedevelopment andmarketing ofproducts
offourindustrial sectors inthelasttwoyears. These sectors wereengineering andelectrical; clothing
andleather; handicrafts; packaging andprinting. Theassistance wasfordeveloping design, production
techniques, management andmarketing.
Theproject waspartoftheWorld Bank Emergency Recovery Loan forJordan, andfinanced
byaUS$5mgrant from theSwiss Government.
Inaddition tothat,there exists anumber ofincentives topromote exports andthusincrease
foreign exchange earnings. These incentives taketheform of:
3.3.1 Customs Duty Exemptions intheForm ofTemporary Entry andDrawback Schemes
- Thetemporary entry scheme which grants dutyexemptions forfirms manufacturing forexports
isapplied inJordan. Exporters canusethescheme when theybuyfrom either wholesalers
ofbonded commercial warehouses aswellaswhen theyimport directly.
- Thedutydrawback arrangement allows exporters toreceive refunds onduties paidonthose
materials which would subsequently beusedintheproduction ofexports. Therefund is
calculated according toaspecific formula foreachproduct. Thefeessubject forrefund include
customs duties andanyother feesortaxes.
Instructions fortheapplication oftheseschemes havebeenrevised tofacilitate theirapplication.
3.3.2 Credit Facility oftheCentral Bank ofJordan
TheCentral Bank ofJordan (CBJ) currently extends credit forbanks toprovide financing to
exporters, forthepurpose ofpromoting national exports. These advances aremade available against
letters ofcredit, billsoflading under collection onnational goods andaccepted andguaranteed drafts.
Furthermore, suchadvances aregranted according tothefollowing general conditions:
(a) theamount financed byadvances against export letters ofcredit “pre-shipment credit ”should
notexceed 75percentfrom thevalue oftheexport credit;WT/ACC/JOR/2
Page24
(b) theamount financed byadvances against billsoflading andaccepted andguaranteed drafts
“post-shipment credit ”should notexceed 90percentofthevalue ofthebillsordrafts;
(c) thevalidity oftheadvances granted against bills, export credits andguaranteed drafts should
notexceed ninemonths, forallcountries;
(d) theinterest rateandcommission collected bylicensed banks andfinancial companies from
exporters is2percent p.a.,above theinterest ratecollected byCBJonthese advances;
(e) localvalue added rateaccepted bytheCBJongoods locally produced forthepurpose ofutilizing
these advances should notbelessthan25percent;
(f) theCBJcomputes interest rateonthese advances onthebasis ofrediscount ratedecided by
theCBJonthedaytheadvance isgranted, which iscurrently onepercentage point below
theprevailing rediscount rateof8.5percent.
3.3.3 Loans Granted totheIndustrial Development Bank (IDB)
Toencourage theestablishment ofnewindustries andexpand thealready -existing ones, the
Central Bank ofJordan allocated anamount ofJD10.0million tobeextended through theIDBduring
1994, andaceiling ofJD5million tobeextended through 1995, asmedium termcredit atlowinterest
rate.These loans areusedasfollows:
- Financing rawmaterials essential toindustrial export operations;
- Financing newindustrial projects andexpanding theexisting ones;
- Financing commodities stored forexport purposes.
TheConditions forGranting these Loans are:
- Themaximum maturities fortheIDBloans andcredit documents arefiveyears andseven years,
respectively.
- TheCentral Bank ofJordan charges aninterest of6percentannually, while theIDBreceives
aninterest andcommission of2.5percenthigher thantheinterest received bytheýCBJ.
- These loans aregranted oncondition thatcogent evidence issubmitted toshow theavailability
ofexport activities ofthecustomer orifanindication ofpromising export opportunities is
submitted.
3.3.4 Income TaxExemptions
Income accrued from export sales is100percent exempted since 1994. Thisexemption
covers export salesthrough non-protocol trade onlyandexcludes exports ofphosphates, potash and
fertilizers.
3.4 FreeZones
Oneofthemainobjectives ofestablishing thefreezoneareas intheKingdom istoencourage
transit trade andexport-oriented industries thatwould support thenational economy ofJordan. Any
local, Arab orforeign investor canoperate intheFreeZones. Investors register withtheCompanies
Register intheFreeZones before operating inthezones. Goods imported orexported fromtheFree
Zones, other thantothedomestic market, areexempted fromcustoms duties andanyother taxes and
fees.WT/ACC/JOR/2
Page25
Twofreezones arecurrently operating inJordan. They are:
1. TheAqaba FreeZone
ThetotalareaoftheAqaba FreeZone isclosetoonemillion square meters. Itisfullyequipped
with:
(a) Infrastructure;
(b) Goods handling equipment;
(c) Storage warehouses ofanareaof250,000 square meters;
(d) Paved openyards ofanareaof300,000 square meters;
(e) Cold-storage facilities ofacapacity of6000 tones.
Itserves foreign andtransit trade ofgoods imported through theportofAqaba.
2. TheZarqa FreeZone
TheZarqa FreeZone covers anareaextending 5.5million square meters, andliesonstrategic
international crossroads. Itserves boththeindustrial andcommercial investment sectors.
Exemptions andIncentives
Foreign, localandjointventure investment inindustrial andservices projects established in
freezones enjoy thefollowing exemptions:
1. Exemption ofprofits from income taxforaperiod oftwelve years.
2. Exemption ofnon-Jordanian employees fromincome taxontheirremuneration andexemption
from social services tax.
3. Exemption ofgoods imported intofreezonefromoutside Jordan fromcustoms duties, import
feesandother taxes orfees.
4. Exemption ofbuildings constructed therein from licensing feesandrealestate taxes.
5. Freedom torepatriate capital invested andprofits earned.
3.5 Transit Rules
Jordan applies theprinciples oftheinternational agreement forroadtransportation known as
TIR. Italsoapplies theprinciples oftheArab Transit Agreement signed on14March 1977. This
agreement consists ofthesame principles astheTIRbutsetsceilings onfeescollected forservices
provided toArab vehicles.
IV. Other Policies Affecting Trade
4.1 Investment Policy
4.1.1.TheInvestment Promotion LawNo.(16)for1995supersedes theEncouragement ofInvestment
LawNo.(11)for1987 andtheArab andForeign Investment LawNo.(27)for1992.
According totheInvestment Promotion LawaHigher Council ofInvestment Promotion is
formed under theChairmanship ofthePrime Minister. TheCouncil ischarged withthetaskofcreating
asuitable environment forinvestment. According totheprovisions ofthislawacorporation named
“Investment Promotion Corporation ”isestablished with juristic personality andfinancial and
administrative independency. TheCorporation isentrusted withtheimplementation ofthislawand
isrunbyaseven member Board ofDirectors (including theDirector General oftheCorporation).WT/ACC/JOR/2
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TheInvestment Promotion Lawdoesnotdifferentiate between Jordanian andnon-Jordanian
investors andaccords themgenerous incentives. According toTheLawnopreference isgiven toany
export performance ordomestic content requirements. Forforeign investors thetransfer ofprofits
realized onforeign capital invested inthecountry, andtherepatriation offoreign capital invested is
guaranteed bytheLaw.
Anyproject inindustry, agriculture, maritime transport andrailways, hospitals andhotels enjoy
thefollowing exemptions:-
1. From Customs Duties, import feesandanyother feesforfixedassets during theestablishment
oftheproject andforexpanding ordeveloping theproject atalaterstage, andforspare parts.
2. Percentage exemptions ranging from 25percent-75 percentfrom income andsocial taxes
based onthedevelopment areawhere theproject isestablished, foraduration oftenyears.
Theexemptions are25percentforprojects established indevelopment areaA,50percent
forthose inareaBand75percentforareaC.Below isadetailed schedule oftheareas and
thestatus oftheprojects established ineachareaforthepurposes oftaxexemptions.
TheSchedule
(i) TheMunicipality District Hospitals Industry Hotels
TheCapital Amman Kasba* - - A
Marka A B B
Qweismeh A C B
University - - A
Wadi AlSeir - - B
Sahab A C C
Muwagar B C C
Gizeh B C C
Na’our A C C
Irbid Irbid Kasba B B C
Remaining Districts C C C
Balqa SaltKasba B C C
DeirAlla C C C
Southern Shouneh C C C
AinAlBasha - C C
Karak AllDistricts C C C
Ma’an Wadi Mousa C A C
Remaining Districts
Zarqa AllDistricts A C C
Mafraq AllDistricts C C C
Tafileh AllDistricts C C C
Madaba Madaba Kasba B C CWT/ACC/JOR/2
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Thiban C C C
Jerash AllDistricts C C C
Ajloun Ajloun C C C
Aqaba Aqaba Kasba B A C
Qwaireh C C C
_________________________________________________________________________________
*Town Centre
(ii) Allareas oftheKingdom shallbeclassified under zone-C-forthesectors ofagriculture,
sea-transport andrailroads.
(iii) TheShore oftheDead Seaarea,with a5Kmdepth fromthesealine, shallbeclassified under
zone -A-forthehotles sectors.
Theprovisions ofparagraph (i)shallnotbeapplicable toconservatories andenvironmental
protection areas thatalready existorwillestablished.
3. Inaddition, hotels andhospitals enjoy extraexemptions fromfeesandtaxesontheirpurchases
offurniture andsupplies forrenewal orrenovation onceevery seven years.
Moreover, regional offices enjoy exemptions from:
1. Registration andanyother related fees.
2. Income andsocial services taxes onprofits generated bytheforeign company from business
conducted outside Jordan.
3. Taxes onwages andsalaries offoreign employees.
4. Customs duties andother feesandcharges onsamples anddemonstration models, office
furniture, oneautomobile foreachforeign employee every fiveyears.
Inbothcases thecompany willberegistered asaJordanian company. Allthatisneeded from
theinvestor isthefollowing:
- Registering theproject attheDirectorate ofIndustrial Development intheMinistry
ofIndustry andTrade (MIT), followed by;
- Submitting anapplication totheController ofCompanies atMIT.
TheControllerofCompaniesthenpursuesthematterwiththeCouncilofMinistersforapproval.
Iftheinvestor isestablishing abranch ofaforeign company, thenauthorization fromthemother
company forestablishing abranch inJordan andthename oftheperson authorized tosignonbehalf
ofthemother company must besubmitted withtheapplication.
Foraregional office, anapplication should besubmitted totheController ofCompanies at
MITwiththefollowing documents, translated intoArabic andauthenticated byanotary public inJordan:
- Registration certificate ofthecompany initshome country anditsmemorandum and
articles ofassociation which indicate itstype, capital andobjectives;WT/ACC/JOR/2
Page28
- Acopy ofthepower ofattorney bywhich aperson resident intheKingdom is
authorized todealwiththecompany 'saffairs;
- Acopyofitsbalance sheet forthelastfiscal yearinitshome country andastatement
showing itsvolume ofbusiness inthearea, authenticated byacertified public
accountant.
4.2 Industrial Policy
Since August 1988, industrial policy inJordan hasbecome market oriented rather than
development oriented.
Theinvolvement ofgovernment bodies inindustrial organization andsupervision waslessened.
Theinvestment decision hasbecome solely thatoftheentrepreneur himself. Thisisalsotrueforthe
expansion anddiversification ofenterprises.
Privatization ofenterprises which thegovernment partially ortotally owns isadeclared policy.
Studies onacasebycasebasis arebeing conducted.
TheroleoftheMinistry ofIndustry andTrade inassisting anddeveloping theindustrial sector
isasfollows:
1. Helpdevelop anindustrial services sector tocopewiththeincreasing needs oftheindustrial
sector.
2. Strengthen forward andbackward industrial linkages.
3. Encouraging "package contracts" which serve several purposes namely, utilization offull
capacities atexisting enterprises andincreasing trade opportunities, inlocalaswellasexport
markets.
4. Promotion ofindustrial subcontracts andpartnerships.
4.3 Agricultural Policy
Agricultural policy inJordan hasfourmain objectives: 1-increased foodself-reliance, 2-
stimulating agricultural growth, 3-promoting balanced economic growth andequity; and4-improved
resourcemanagementandconservation.Toachievetheseobjectives,theGovernmentsupportsthefarmer
ondifferent levels which are:
1. Retail prices ofagricultural products (vegetables andimported meat) aresetbyagovernment
committee (seesection 4.4); whereas farm-gate prices offruits andvegetables, andwholesale
prices ofredandwhite meataredetermined bymarket forces.
2. TheGovernment through theMinistry ofSupply sometimes buyslocal production ofsome
agricultural products suchaswheat, barley, lentils, chickpeas atpre-declared prices thatare
compatible withinternational prices.
3. Irrigation water issoldtofarmers atsubsidized rates, though agradual phasing outistaking
place.
4. Allagricultural inputs areexempt from customs duties butpay5percentimport fee.
5. Agricultural income isexempt from income tax.WT/ACC/JOR/2
Page29
6. Imports fromTrade Protocol Countries areregulated through theissuance ofaquarterly plan
which includes products andquantities thatareallowed forimportation based onmarket needs.
7. TheAgricultural Credit Corporation extends credit tofarmers atinterest rates lower than
prevailing market rate.
8. Customs valuation forimports isbased onvalue oftheproduct inthecustoms declaration.
9. There arenoquantity orvalue restrictions onagricultural exports. Thegovernment doesnot
giveanyloans orguarantees forsubsidizing these exports.
10. Importsofagriculturalproductsrequirecertificateoforiginandhealthcertificatethattheproduct
isclear ofdiseases, radiation andnothazardous tohumans andenvironment.
4.4 Pricing Policy
Prices inJordan aregenerally determined through themarket mechanism. TheMinistry of
Supply, however, setsprices forfivecommodities (listed inpara. 3.2.2.3) thatareimported bythe
private sector. Forthemost part,thegovernment charges orallows commercial mark-ups.
Thegovernment setsdistribution margins fornineteen consumer goods produced inJordan.
Themethodology forcalculating theretailpriceistodetermine thecostofproduction fromfieldsurveys
andthenallow a17percentmargin forperforming thenormal marketing functions ofdistribution,
storage,andfinancing.Thesamemechanismofpricingisappliedtosimilarimportedgoods.Inaddition,
acommittee ofgovernment officials, including officials from theMinistries ofAgriculture, Supply
andIndustry andTrade, studies market conditions intheAmman Central Market forAgricultural
Products andsetsappropriate retail prices forthese products. Thisisdoneonadaily basis andretail
prices arepublished inlocalnewspapers. The19consumer goods referred toabove whether locally
produced orimported are:
Allkinds ofbread, pasta, freshpoultry, eggs, yoghurt andcooked cheese, halawa (local popular
sweet), tablesalt,fruits andvegetables, corn, lentils, fizzydrinks (with reusable glassbottles), barely,
frozen meat, frozen fish,canned meat, chilled imported meat, canned sardines andtuna, tea,and
cigarettes.
4.5 Subsidy Policy
Subsidy policy hastwoobjectives:
1. providing basic foodstuffs atastable price topreserve thestandard ofliving oflimited and
low-income groups;
2. promoting investment inlivestock toreduce dependence onimported redmeats.
Based onthis,theGovernment provided, inthepast, consumer subsidies forthirteen basic
commodities suchaswheat, barley, rice,sugar, dried milk, frozen meats, oliveoil.However, subsidies
were nottargeted inthepast,thusreaching allgroups ofconsumers andproducers.
Inthelateeighties, theGovernment started reducing andtargeting subsidies. Presently, only
fourbasic items arebeing imported andsubsidized bytheGovernment: wheat, sugar, riceandone
brand ofpowdered mild. Theprivate sector isnowallowed toimport other previously-subsidized
items andsellthem atunsubsidized butfixed prices.WT/ACC/JOR/2
Page30
Targeting wasachieved through theintroduction ofcoupons which arenowdistributed only
tofamilies withamonthly income ofJD500orless.Three commodities arecovered bythese coupons
sugar, riceandonebrand ofdried milk.
Asaresult ofthechange inthesubsidy policy, subsidies werereduced fromabout JD90million
(forfoodstuffs only) in1989 toabout JD56million (forfoodstuffs andanimal feed) in1993.
4.6 Income TaxSystem
Themain features ofthenewIncome TaxlawNo.(14) of1995 arethefollowing:
1. Thetaxregime isbased onannual selfassessment.
2. Income taxisdueonprofits orgains earned oraccrued inJordan.
3. Income taxexemptions areequally applied toforeign enterprises.
Thefollowing areexempted:
- Welfare, cultural, educational, sports orhealth institutions andcooperative societies.
- Land invested inagriculture orpoultry, cattle, fishorbeebreeding.
- Capital profits earned onequipment, apparatus, land, realestate, bonds andshares.
- Salaries paidtonon-Jordanian diplomatic envoys.
- Salaries andwages paidbyforeign companies registered inJordan according tothe
Companies Law.
- Interests dueondeposits ofpersons andcompanies.
- Income accrued from patents, copyrights orrewards.
- Income specified inagreements onpreventing double taxation.
- Income explicitly exempted bytheInvestment Promotion LawNo.(16)of1995and
bymeans ofbilateral andmultilateral agreements.
4. Disbursements andexpenses arededucted from annual totalincome.
5. Losses arededucted from thetaxpayers totalincome from other sources oftaxable income
during thesameyearandthebalance carried forward tothenextyearandthentothesubsequent
yearuptosixyears afterwhen lossoccurred.
6. Partial exemptions are:
- 50percentofsalaries andwages ofemployees onthefirsttwelve thousands and
25percentontheamount above that.
- 10percentto30percentofrents accrued from leasing buildings.
7. Theprogressive taxonindividuals ranges from 5percentto30percent.
8. Theprogressive taxoncompanies ranges from 15percentto35percentaccording totype
ofactivity.
4.7 State-Owned Enterprises
Jordan 'seconomy ischaracterized byastrong private enterprise orientation. TheState-owned
sector issmall consisting ofpublic utilities andenterprises ofstrategic importance. State ownership
takes twoforms asfollows:
Total ownership ofagencies andcorporations insectors suchaspublic transportation, water,
energy andtelecommunications. However, several activities havebeenopened uptoprivate sector
investment andthenational airline, public transport andtelecommunication areunder consideration
forprivatization. TheState owned enterprises are:WT/ACC/JOR/2
Page31
TelecommunicationCorporation,PublicTransportationCorporation,RoyalJordanianAirline,
Aqaba Railway Corporation andJordan Investment Corporation.
Participation inpublic shareholding companies intheindustrial andservices sectors. These
enterprises are:
Jordan National Shipping Lines Company, Industrial Development Bank, Housing Bank, Arab
Mining Company, Arab Potash Corporation, Jordan Phosphate Company, Jordan Fertilizer
Industry Company, Public Mining Company, Jordan Hotels andTourism Company, Arab
International Hotels, Irbid District Electricity Company, Jordan Electric Power Company.
V. Participation inBilateral Trade Agreements
5.1 Preferential Trade Arrangements
Jordan isamember ofthe“Agreement forFacilitating andDeveloping Trade Exchange among
ArabStates. ”Themember States are:Jordan, United ArabEmirates, Bahrain, Tunisia, Saudi Arabia,
Sudan, Syria, Somalia, Iraq,Palestine, Qatar, Kuwait, Lebanon, Lybia, Morocco, Yemeni Republic.
Theagreement stipulates thatfollowing products areexempted from customs duties andtaxes:
1. Agricultural andlivestock products.
2. Rawmaterials.
3. Goods andproducts with40percentvalue-added intheexporting country. Thispercentage
could godown to20percentifallinputs areimported from Arab countries.
4. Goods andproducts produced byjointArab enterprises.
5. Anyother good orproduct agreed upon.
Additional exemptions arediscussed butnotagreed upon yet,buttheywillbeintheformof
reductions incustoms duties.
Moreover, thereareseveral bilateral agreements between Jordan andArabcountries. Ingeneral,
20percentto100percentcustomsexemptionsaregrantedtospecificgoodsincludedintheseagreements
according totrade protocols. However, these trade protocols arediminishing andtheonlyoneleft
iswithLebanon.
5.2 General System ofPreferences (GSP) andEUAgreement
Under thegeneralized system ofpreferences scheme, developed countries givenon-reciprocal
preferential arrangement toproducts exported from developing countries. Thepreferential treatment
takes thefrom oftariff cutsonalistofproducts thatvaryfrom onepreference -giving country to
another.
TheGSPschemes havecommon features intherequirements formaking useoftheGSP. The
most important requirement istherules oforigin.
Thisistoensure thattheproducts benefiting fromGSPareconfined toproducts wholly obtained
orhaveanimportcontentbuthaveundergonesufficientworkingorprocessinginthepreference-receiving
country.
Another important criterion isthatthepreference-receiving country should notify the
preference-giving country thename oftheorganization authorized toissue certificates oforigin.WT/ACC/JOR/2
Page32
Jordan iseligible tobenefit from GSPschemes andisfound onthelistofpreference-giving
countries, buthavenotmade useofthisscheme.
TheECagreement withJordan signed 1977 gives Jordan seasonal preferential treatment for
some ofitsagricultural products. Thispreferential treatment takes theform oftariff cutsincertain
periods oftheyear. Jordan isnegotiating withtheEUapartnership agreement.
TheJordan-EU partnership agreement isbasically afree-trade, MFN based agreement. Itis
envisaged thatstarting January 1998, bothJordan andtheEUstarttariffreductions togradually reach
azero-based tariff andfullfree-trade areabytheyear2010.
VI. Institutional Organization ofForeign Trade
6.1 Ministry ofIndustry andTrade
TheMinistry ofIndustry andTrade supervises theformulation andexecution ofpolicy related
toindustry andtrade based onthefollowing principles:
- freemobility ofcapital,
- encouragement ofprivate sector initiatives andactivities,
- freedom ofparticipation inalleconomic sectors.
Themain duties oftheMinistry are:
1. Implementation ofthefollowing laws:
- Import/Export LawandtheImport/Export By-law.
- Companies Law.
- Intellectual Property Laws.
- Insurance law.
2. Concluding trade andeconomic agreements andprotocols.
3. Joining international trade organizations.
6.2 Ministry ofFinance/Customs Department
TheCustoms Department consists of16directorates and23border centres andcustoms houses,
outofwhich 6areclearance houses. TheDepartment 'smain responsibility istoadminister theflow
ofgoods across theborders according tothelawsandregulations inforce. It,thus, provides amajor
source ofcentral government revenue reaching about 40percentofdomestic revenue.
Themain tasks oftheDepartment 'sdirectorates areasfollows:
1. Apply thecustoms duties toimported goods.
2. Administer thetemporary entry and/ordrawback facilities forexporters, diplomatic missions,
regional offices andprojects.
3. Provide exemptions according tothelawtosuch institutions ascharity associations and
beneficiaries oftheInvestment Promotion Law.
4. Collect thesalestax.
5. Handle allviolations oftheCustoms Lawsuchassmuggling, fraud andfalseinformation.
6. Combat smuggling through specialized patrols.WT/ACC/JOR/2
Page33
7. Perform auditing checks ofallcustoms forms.
6.3 Jordan Export Development andCommercial Centres Corporation (JEDCO)
JEDCO isanautonomous non-profit corporation equally owned bytheMinistry ofIndustry
andTrade, theJordan Federation ofChambers ofCommerce andtheAmman Chamber ofIndustry.
Itissupervised byaBoard ofDirectors comprising senior government officials, principals ofthe
Kingdom 'sbusiness organizations andleading industrialists. IthasaGeneral Manager appointed by
theBoard ofDirectors.
JEDCO went through are-structuring process during 1995 inwhich newdepartments were
founded, andnewfunctions wereactivated. Theoriginal taskofJEDCO since 1972 wastoexecute,
onbehalf ofthegovernment, thetrade protocols withseveral Arab Countries. These protocols were
introduced mainly tohelpexporters toovercome difficulties related totheavailability ofhardcurrencies
through inter-governmental arrangements. They entailed tariff concessions ontraded goods between
Jordan andthose countries.
Most ofthetrade protocols arebeing terminated asaresult ofthenewgovernmental trade
policy towards liberalisation, freetrade arrangements, andpursuing membership toWTO. Anumber
oftradeprotocols stopped already during 1995aswithTunisia, Egypt, andMorocco. Theonlytrade
protocol administered byJEDCO atthetimebeing istheonewithLebanon andisexpected tobe
discussed atthehighest levelin1996. Thenewfunctions ofJEDCO areoftechnical andpromotional
nature. Technical andfinancial assistance isextended toindustrialists toupgrade theirproducts, adopt
international standards andtodevelop theirmarketing andtechnical capabilities.
JEDCO 'spromotional activities include; publication ofindustry export directories, arranging
participation atinternational andregional trade fairs, conducting inward andoutward trade missions
andthedissemination oftrade inquiries. JEDCO maintains adatabase onallJordanian exporting
companies, itsservices cover access totrade related information thatisessential toexporters wishing
totakeadvantage oftheinternational business opportunities. Thepromotion isalsodonethrough the
tentradecentres located inEgypt, Iraq,Libya, Morocco, Oman, Russia, Sudan, Tunisia, Yemen, and
U.S.A.
6.4 Agricultural Marketing Organisation
TheAgriculturalMarketingOrganisation(AMO),anautonomousgovernmententity,established
in1987 tohelp formulate marketing policies pertaining toagricultural products, develop domestic
markets, opennewexport market andtosupport theprivate sector. Moreover, AMO serves asan
information bank forallfresh produce imports andexports. AMO hashadasignificant impact on
theJordanian agricultural sector interms ofimproved quality andincreased fresh produce export
quantities. AMO major activities areasfollows:
1. Conducting market studies foragricultural products onbothlocalandinternational markets.
2. Issuing periodical statistical reports thathavedetailed information onfresh produce prices,
quantities, exports andimports.
3. Promote agricultural exports byoutfacilitating theparticipation oftheprivate sector inthe
international trade fairsandexhibitions.
4. Collecting information andfinding newexport markets.
5. Publishingbrochures,guidebooksandnewslettersforproducers,exportersandforeignimporters
ofagricultural products.
6. Monitoring thequality offresh produce exported from Jordan.WT/ACC/JOR/2
Page34
6.5 Private Sector Institutions
Several private sector institutions playanactive roleinpromoting international trade. Themost
prominent among these arethefollowing:
6.5.1 TheFederation ofChambers ofCommerce
TheFederationofChambersofCommercewasestablishedin1955.Itisanon-profitorganization
thataimsatpromoting trade. Itrepresents traders 'views andparticipates ineconomic decision-making
withaviewtoenhancing theroleoftheprivate sector ineconomic activity.
6.5.2 Amman Chamber ofIndustry
TheAmmanChamberofIndustrywasestablishedin1962asanon-profitorganizationtoprovide
anumbrella forthecountry 'smanufacturing firms. TheChamber serves asaforum fortheviews of
theindustrial sector withtheaimofpromoting economic development. Itcooperates closely withthe
Ministry ofIndustry andTrade andother public entities, insponsoring business missions abroad and
organizing meetings withforeign business delegations inorder tostrengthen international cooperation,
promote investment andtrade exchange andencourage jointventures.
6.5.3 TheJordanian Businessmen Association
TheJordanian Businessmen Association wasestablished in1985 asaprivate, independent,
non-profit organization which aimsatcreating theappropriate climate fortheprivate sector tooperate.
Itrepresents theprivate sector 'spoint ofviewandkeeps anopendialogue withtheGovernment to
express these views especially regarding policies thattheGovernment pursues orintends topursue.
Italsoserves itsmembers byconducting studies andsurveys, aswellasproviding technical assistance
andinformation.
6.5.4 TheJordan Trade Association
TheJordanTradeAssociation(JTA)wasestablishedin1989asaprivate,independent,non-profit
organization which aimsatexpanding, boosting anddeveloping exports ofgoods andservices produced
bytheJordanian private sector. Italsoaimsatproviding thesuitable climate forexchange ofideas
among Jordanian businessmen inthefieldofexports. JTAprovides itsmembers withinformation on
export markets, international tradelaws, required technical specification andprices ofproducts inexport
markets. Italsoestablishes channels ofcommunication andexchange ofinformation withforeign and
localspecialized consultancy bodies.
6.5.5 Agricultural Marketing andProcessing Company
TheAgricultural Marketing andProcessing Company isaprivate company owned bytheJordan
Investment Corporation, theSocial Security Corporation andtheAgricultural Credit Corporation. The
company owns andoperates processing plants fortomatoes andcitrus fruits. Italsomarkets agricultural
produce bothdomestically andinternationally.WT/ACC/JOR/2
Page35
VII. Intellectual Property Protection
7.1 GENERAL:
7.1.1 Intellectual Property Policy
TheGovernment recognizes theimportance ofamending thelawspertaining tointellectual
property, likeindustrial property andcopyrights, trademarks, taking intoconsideration theinternational
intellectual property conventions andtheconditions forentry intotheWorld Trade Organization.
7.1.2 Responsible Agencies forPolicy Formulation andImplementation
TheHouses ofParliament, Ministry ofTrade andIndustry andMinistry ofCulture, TheCourts
ofLaw, theCustoms Department andseveral other government agencies.
7.1.3 MembershipofInternationalIntellectualPropertyConventionsandorRegionalorBilateral
Agreements
Jordan isalready amember totheParis Convention fortheProtection ofIndustrial Property
andTheArab Agreement fortheProtection ofCopyrights. Jordan isconsidering thepossibility of
acceding to:
1. Madrid Agreement (1891) concerning theInternational Registration ofMarks.
2. Protocol Relating totheMadrid Agreement concerning theInternational Registration ofMarks
(1989).
3. NiceAgreement (1957) concerning theInternational Classification ofGoods andServices for
thepurposes oftheRegistration ofMarks.
4. “PCT”Patent Cooperation Treaty (1970).
5. Berne Convention (1886) fortheProtection ofLiterary andArtistic Works.
6. Rome Convention (1961) fortheProtection ofPerformers, Producers ofPhonograms and
Broadcasting Organizations.
7.1.4 Application ofNational andM.F.N. Treatment ofForeign Nationals
Withregard totheprotection ofindustrial property thecurrent lawsprovide foreign nationals
treatment equal tothatofnationals.
Thecurrent Copyright Lawprovides protection onlyforworks published orreproduced in
Jordan forJordanian andforeign authors, andtheworks published orreproduced abroad forJordanian
authors ifitispublished inJordan. Asfortheworks offoreign authors published abroad, international
conventions andreciprocity shallbetaken intoconsideration inthisrespect.
7.2 Substantive Standards ofProtection, Including Procedures fortheAcquisition and
Maintenance ofIntellectual Property Rights:
7.2.1 Copyright andRelated Rights, Including Rights ofPerformers, Producers ofPhonograms
andBroadcasting Organizations
TheCopyright Protection LawNo.22 fortheyear1992 governs theprotection ofcopyright
inJordan. Protection covers original works ofliterature, artandscience nomatter whattheirtype,
importance orpurpose is.Thisincludes theworks ofartexpressed inwriting, sound, drawing,
photography andmotion, suchasbooks, speeches, plays, musical compositions, films, applied art,
three-dimensional works andcomputer software.WT/ACC/JOR/2
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7.2.2 Trademarks, Including Service Marks
Trade Marks LawNo.33of1952, effective 1July1952.
Theinternational classification ofgoods according totheNiceAgreement isfollowed inJordan.
TheTrademark Lawdoesnotprovide fortheprotection ofservice marks ininternational classes 35
to42oftheNiceAgreement. Aseparate application should befiledwithrespect toeachclass of
goods.
Trademark applications accepted bytheRegistrar arepublished intheOfficial Gazette. There
isathreemonth period openforfiling opposition byanyinterested party. Intheabsence ofopposition,
however, apublished trademark isregistered, andthecertificate ofregistration isissued.
Atrademark registration isvalid for7years asfrom thedateoffiling theapplication.
Thereafter, atrademark registration isrenewable forperiods of14years each.
Noprovision intheJordanian lawprohibits thelicensing oftrademarks .
7.2.3 Geographical Indications, Including Appellations ofOrigin
(Nopresent legislation available)
7.2.4 Industrial Designs
Patents Designs LawNo.22of1953; effective 17February 1953; Patents andDesigns Order
No.1of1953.
Designs areprotected inJordan through registration withThePatent andIndustrial Design
Office oftheMinistry ofIndustry andTrade. Such aregistration iseffected without anynovelty
examination attheapplicant ’sresponsibility. According totheJordanian Patents Designs Law, there
are15classes under which designs canberegistered. Theclassification isbased onthematerials
which thegoods aremade fromsuchasmetals, glass, wood, paper, leather etc..Application maybe
filedtoregister thesame design formore thanoneclass; aseparate application isrequired foreach
class. Rejections bytheRegistrar canbeappealed totheCourt ofCassation within onemonth.
Adesign registration isvalid forfiveyears starting asofthedateoffiling theapplication.
Aregistration canberenewed fortwosimilar periods offiveyears each.
There isnoprovision inthecurrent Design LawofJordan forcompulsory working orlicensing
withrespect todesigns.
Anyinfringement orunauthorized useofaregistered design ispunishable under thecurrent
design law.
7.2.5 Patents
Patent andDesign Law, No.22of1953, effective 17February 1953; Patent andDesign Rules,
Order No.1of1953.
Jordan isamember totheParis Convention. Once anapplication forthegrant ofapatent
isfiled, itisexamined withrespect tocompliance withformalities andpatentability provided forunder
thePatent LawinJordan. ThePatent Office mayrequire whatever amendments thatmaybenecessary
tobring theapplication intoconformity withthelaw.WT/ACC/JOR/2
Page37
Working ofpatents inJordan isanofficial requirement. Intheevent thattheowner ofapatented
invention inJordan doesnotsatisfy thestipulated working requirements ofthecountry within three
years asfromthedateofgrant ofapatent, thenthepatent willbesubject tocompulsory licensing under
theprovisions ofthelaw.
Infringement oftherightofapatentee ispunishable under theprovisions ofthecurrent Patent
LawinJordan.
7.2.6 Plant Variety Protection
(Nopresent legislation available)
7.2.7Layout designs ofintegrated circuits
(Nopresent legislation available)
7.2.8 Requirements onundisclosed information, including trade secrets andtestdata
(Nopresent legislation available)
7.2.9 Anyother categories ofintellectual property
(Nopresent legislation available)
7.3 Measures toControl Abuse ofIntellectual Property Rights
7.3.1 Trademarks
TheTrademark LawNo.33of1952includes regulations tocontrol abuse oftrademark rights
atdifferent stages during theprocess ofthetrademark application ofwhich wemention thefollowing:
(a) Before acceptance ofthetrademark application:
Thelawincludes alistofmarks which arenotcapable ofregistration asmarks inArticle 8.
(b) Upon publication ofthepatent application intheOfficial Gazette:
TheLawincludes regulations inArticle 11which allows anyperson tofileanopposition action
against theregistration ofapatent application published intheOfficial Gazette
(c) Beyond theregistration ofatrademark:
TheLawincludes regulations inArticles 22and25which allow anyperson tofileacancellation
action against theregistration ofamark, ortheremoval ofamark from theregister.
7.3.2 Patents
ThePatent andDesigns LawNo.22of1953 includes regulations tocontrol abuse ofpatent
rights atdifferent stages during theprocess ofthepatent application, ofwhich wemention thefollowing:
(a) Before acceptance ofthepatent application:
TheLawincludes regulations which allows theRegistrar torefuse apatentapplication orrequire
some amendments inthespecifications.WT/ACC/JOR/2
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(b) Upon publication ofthepatent application intheOfficial Gazette:
TheLawincludes regulations inArticle 11which allow anyperson tofileanopposition action
against theregistration ofapatent application published intheOfficial Gazette.
(c) Beyond theregistration ofapatent:
TheLawincludes regulations inArticle 23which allow theChief Public Prosecutor orany
person tofileacancellation action against theregistration ofapatent, from theregister.
7.3.3 Designs
ThePatent andDesigns LawNo.22for1953includes regulations tocontrol abuse ofdesign
rights atdifferent stages during theprocess ofthedesign application.
(a) Before acceptance ofthedesign application:
TheLawincludes aregulation which allows theRegistrar torefuse adesign application.
(b) Beyond theregistration ofadesign:
TheLawincludes regulations inArticle 36which allow anyperson tofileacancellation action
against theregistration ofadesign, ortheremoval ofadesign from theregister.
7.3.4 Copyrights
TheCopyright LawNo.22fortheyear1992includes regulations tocontrol abuse orcopyrights
inarticles 42,46,47and51.
7.4 Enforcement
7.4.1 Civil Judicial Procedures andRemedies
TheJordan Civil Code isonlyreferred toinorder toclaim damages ininfringement cases
byciting itsArticle No.256ofChapter Three entitled “TheInjurious Act”which states asfollows:
- Every injurious actshallrender theperson whocommits itliable fordamages ifhe
isanon-discerning person.
Theinjurious actisfurther described inArticle No.257asfollows:
(a) Theinjurious actmaybedirect orcausative.
(b) Andifitisdirect thedamages shallbedueunconditionally andifitiscausative itshallbe
subject totheproof oftrespass orintent orthattheactledtotheinjury.
7.4.2 Provisional measures
(Nopresent measures available)
7.4.3 Anyadministrative procedures andremedies
(Nopresent administrative procedures andremedies available)WT/ACC/JOR/2
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7.4.4 AnySpecial Border Measures
TheCustoms LawNo.16fortheyear1983includes insection four“Banned andRestricted
Goods ”under Articles 32and33which classifies thebannedor restricted goods as“Theforeign goods
which carry atrademark, anameor asignwhich gives afalseimpression thatitisoflocalorigin.... ”
(Article 32)and“Theforeign goods thatdonotsatisfy theconditions stipulated forinthelawsand
regulations fortheprotection ofproperty andorigin... ”(Article 33).
7.4.5 Criminal Procedures
(Nospecial procedures available other thanthose mentioned under thetrademark lawandthe
merchandise marks law).
7.5 Laws, Decrees, Regulations andOther Legal ActsRelating totheAbove
1. TheTrade Names LawNo.(30)fortheyear1953.
2. TheMerchandise Marks LawNo(19)fortheyear1953.
3. TheHigh Court ofJustice pastdecisions pertaining tointellectual property cases areusedas
abasis fordeciding fornewcases.
7.6 Statistical Data onApplications forandGrants ofIntellectual Property Rights, aswell
asanyStatistical Data ontheir Enforcement.
Registered Trade Marks andPatents during theperiod 1987till31December 1995according
totherecords ofDepartment ofTrade Registration andIndustrial Property protection intheMinistry
ofIndustry andTrade:
Item /
Year1987 1988 1989 1990 1991 1992 1993 1994 1995
1.Trade Marks
a.Local Trade Marks 432 462 387 530 640 962 1309 1130 1637
b.Foreign Trade Marks 515 712 608 601 484 803 974 741 863
c.Total ofTrade Marks 947 1174 995 1131 1124 1765 2282 1871 2500
2.Patents
a.Local Patents 8 13 8 11 6 13 12 24 23
b.Foreign Patents 39 38 24 31 30 35 30 46 45
c.Total ofPatents 47 51 32 42 36 48 42 70 68
VIII. Trade-Related Services Regime
8.1 General Description oftheOverall Market
TheServices Sector hasaleading roleintheeconomic development ofJordan. It’scontribution
toGDP wasabout 65percentin1994, ofwhich trade andcatering 10.2percent; construction
8.6percent; transportation, storage andcommunication 15.9percent; financial services, insurance,
realestate andbusiness services 19.0percent.
Jordan isanexporter andimporter ofservices. According tothebalance ofpayments figures
in1994, Jordan ’sexports ofservices amounted toJD.1905 million while itsimports ofsuchservices
wereJD.1049 million. TheJD.856 million services surplus helped finance partofJD.1362 millionWT/ACC/JOR/2
Page40
trade deficit in1994. Themost important source ofrevenue intheservices account isworkers
remittances which in1994 brought inanetrevenue ofJD.699 million. Travel, especially tourism
generated asurplus inthetravel account ofJD.131million resulting mainly from JD.406 million
tourist income andfromJD.275 million payments accruing fromexpenses ontourism, medical care
andeducation. Income from capital investments isbecoming more important asasource ofrevenue
intheservices account, however, investment income payments werefourtimes larger thanreceipts
in1994, investment income payments which mainly represent interest ondebtreached JD.220 million,
while receipts were JD.51million.
8.2. Policies affecting Trade inServices
Trade inservices inJordan isregulated bydomestic lawsandregulations, registration and
licensing requirements. Activities oftrade inservices inJordan areguided byboththeLaws that
areofhorizontal nature affecting more thanonesector orservice andbyLaws andregulations that
pertain toacertain sector oractivity.
8.2.1 Horizontal Legislation
Themain Lawinthiscategory istheInvestment Promotion LawNo.(16)for1995 which
regulates domestic andforeign investment inJordan including some services. Inaddition Investment
Promotionofnon-JordaniansNo.1,for1996specifiesthefollowingcriteriafornon-JordaniansInvestors.
Anon-Jordanian canownnomore than50percentofanyproject inthefollowing services:
(a) Landand airtransportation;
(b) Construction contractors;
(c) Trade andtrade services;
(d) Banking andinsurance;
(e) Investment inAmman Financial Market.
Theminimum limitforforeign investment inanyproject inJordan isJD100,000 (onehundred
thousand) dinars, exception being buying shares attheAmman Financial Market minimum isJD.1,000
(onethousand) dinars.
TheCompanies LawNo.(1)for1989 andtheInvestment Promotion Lawreferred toabove
arethemainimportant Laws thatregulate therightofestablishment orcommercial presence inJordan.
TheCompanies Laws defines thevarious forms ofcompanies thatcanbeestablished inJordan.
These include limited liability companies (private andpublic); partnership (general andlimited);
andmutual funds, branch offices andregional offices.
Foreign companies areallowed tooperate inJordan intheformofabranch office oraregional
office, ortheycanregister aJordanian company attheMinistry ofIndustry andTrade.
TheCentral Bank LawNo.(19)fortheyear1979andtheForeign Exchange LawNo.(95)for1966
regulates theforeign exchange dealings. Thefullconvertibility ofthecurrent account payments of
thebalance ofpayments hasbeen achieved since February 1995 when Jordan accepted formally
Article VIIIoftheInternational Monetary Fund articles ofAgreement.
Theoperations ofbanks inJordan areregulated bytheBanks ’LawNo.(24)for1971 and
itsamendments. Foreign Exchange dealings outside thebanking system arecarried outbymoney
changers whoareauthorized todosobytheMoney Exchange Dealings LawNo(37)for1992.WT/ACC/JOR/2
Page41
Anon-Jordanian wishing totakeupemployment inJordan must obtain awork permit from
theMinistry ofLabour andaresidence permit fromtheMinistry ofInterior. Labour LawNo.(27)
for1988 andResidency andForeigners Affairs Law No.(5)for1991 govern theemployment and
stayofforeigners inJordan.
8.3 Specific Sectors
8.3.1 Financial Services
8.3.1.1 Banking Services
Thefinancial sector inJordan consists oftheCentral Bank ofJordan (CBJ), licensed banks,
andother specialized credit institutions. Currently there arefifteen commercial banks operating in
Jordan ofwhich fivearebranches offoreign banks. Inaddition, therearesixprivate investment banks
andoneindustrial development bank.
CBJencourages thebanking sector toextend itsrange ofservices, andithasliberalized almost
alldirect controls oninterest ratesandcredit.
Regarding banking business, anycompany thatdesires toestablish abankinJordan mustobtain
alicence from CBJ, which isgranted upon ajustified economic needforestablishing suchabank,
andthebankmustbeapublic shareholding company. Branches offoreign banks areexempted from
thelatter condition. Until recently, theminimum capital requirement ofanylicensed bankwasJD
5.0million. Foreign companies wishing tooperate asabankinJordan musttransfer toJordan inone
single payment notlessthanJD5.0million inaconvertible currency. InDecember 1995, CBJrequired
domestic banks toraisetheircapital toJD20.0million, bytheyear1997 atthelatest. Branches of
foreign banks areexempted from thisrequirement, butCBJexpressed adesire thattheyraisetheir
capital toJD10.0million.
Authorized banks arepermitted toenterintoforward contracts inmajor currencies against the
Jordan dinar forspecified commercial transactions, provided thattheycover suchoperations abroad.
Each authorized dealer ’sforward transaction issubject toaminimum quantitative limit. For
corporations orprojects considered tobeofvitalnational interest, theCentral Bankmayofferaforward
exchange facility inrespect offorward exchange cover provided byJordanian banks. There areno
taxes orsubsidies onpurchases orsalesofforeign exchange.
Toactivate andpromote theforeign exchange market andtoenhance theliberalization offoreign
currency control restriction, licensed banks arepermitted toinvest amaximum of50percentoftheir
foreign currency deposits ininvestments inside andoutside Jordan. Suchinvestments include: granting
development loans inJordan, participating insyndicated loans inside andoutside Jordan tofinance
projects inJordan, investing ingovernment bonds andbillsissued infivespecified countries outside
Jordan, ininternational andregional institutions ’bonds, incorporate bonds ratedAAA orAA,infloated
interest billsandbonds inthespecified countries, andinJordan ’sgovernment bonds issued inforeign
currency. Interbank borrowing inforeign currencies arealsopermitted. Licensed banks areauthorized
tooperate investment portfolios (including margin trading) inforeign currencies onbehalf of
nonresidents outoftheirforeign currency accounts financed bytransfers from abroad. TheCentral
Bank applies asetofprudential measures thatarechangeable depending ontheeconomic requirements
ofthecountry including interest rates, credit ceilings andbanks deposits withCBJ.
(a) Policies Affecting Trade inBanking
Theexchange system hasbeensubstantially liberalized since 1992. On20February 1995full
current account convertibility hasbeenachieved asJordan accepted formally Article VIIIoftheIMFWT/ACC/JOR/2
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Articles ofAgreement. Non-resident accounts inforeign currencies arefreeofallrestrictions, while
opening nonresident accounts indomestic currency areregulated byCBJ.
Transfers andwithdrawals fromnon-resident foreign currency accounts arefreeofrestrictions,
andinterest ratesonforeign accounts areinlinewiththose prevailing ininternational markets. In
addition, CBJdoesnotrestrict remittances ofincome accruing tononresidents.
Jordanians maymaintain foreign currency accounts withaceiling equivalent toJD.0.5million,
while residents andnonresidents mayobtain credit facilities against theirforeign currency deposits.
Onthesame side,export proceeds arenotrestricted byrepatriation oranyother requirements.
Regarding payments forcurrent transactions, afeeof0.10percentislevied onexchange
permitsforimportsandpaymentsforinvisiblesexceptthoseofgovernmentdepartments,permitsfinanced
from nonresident accounts inforeign currency, andpermits withavalue oflessthanJD.300.
Non-residents maytakeoutanyforeign means ofpayments thattheyhadpreviously brought
inanddeclared tothecustoms authorities atthetimeofentry.
Asforcapital transactions, inward transfers ofcapital arenotrestricted, while outward transfers
aresubject toapproval byCBJ. Inparticular, inflows andoutflows pertaining toforeign direct
investmentmadeinJordanarecompletelyliberalized.TheCBJallowscapitaltransferstoArabCountries
onareciprocalbasis.Capitaltransfers,forspecifiedinvestmentsoroperatingpurposes,tothePalestinian
Selfrule areas arepractically freeofrestrictions.
(b) Market Access andNational Treatment
Alllicensed banks (domestic andforeign) operating inJordan enjoy thesametreatment except
fortwodomestic banks; theHousing Bank andtheIndustrial Development Bank. These twobanks
weregranted limited privileges toenable themtomeetsome desirable economic andsocial objectives.
Atanyrate,theCBJisintheprocess ofphasing outthespecial privileges accorded tothese twobanks
under theongoing Economic Reform andDevelopment Loan (ERDL) agreed onwiththeWorld Bank
in1995.
Regarding market access, theCBJgrants newbanklicences onacasebycasebasis, andin
making thedecision examines applications onthebasisofeconomic needs andobjectives. These include
theefficiency ofestablishing suchbanks, acapital requirement ofnotlessthanJD.20.0million, given
thattheshare offoreign capital inanybankdoesnotexceed 50percentofitscapital, while thecapital
requirement forbranches offoreign banks must notbelessthanJD.5.0 million. Inpractice, there
arenolimitations imposed onlicensed banks concerning thenumber ortotalvalue oftheiroperations.
Inaddition, thenewInvestment Promotion Lawgranted foreign capital thesame treatment enjoyed
bydomestic capital (Ref.Non-Jordanian Investment Promotion Regulation 1995, andForeign Exchange
Control Regulations).
8.3.1.2 Insurance Services
Insurance services inJordan arebeginning toemerge asanimportant segment oftheeconomy
developing steadily itscapacity anddiversifying itsactivities.
There arenowtwenty oneinsurance companies inJordan. Prior to1996 there wereeighteen
insurancecompanies,ofwhichoneinsurer,theAmericanLifeInsuranceCompanyisabranchoperation.
Some eleven oftheother seventeen companies havebetween 10and45percentoftheircapital ownedWT/ACC/JOR/2
Page43
bynon-Jordanian investors. Thetotalcapital ofinsurance companies inJordan in1995reached JD.35.5
million.
Theinsurance services inJordan areregulated bytheInsurance LawNo.(30)for1984 and
itsamendments andtheNewInsurance LawNo.(9)of1995. According tothisLawtheoperations
oftheinsurance companies aresupervised bytheOffice oftheController ofInsurance intheMinistry
ofIndustry andTrade.
TheinsurancecompanieshaveaFederationthatcomprisesallinsurancecompanies.Nocompany
isallowed tooperate inJordan ifitisnotamember oftheFederation. TheFederation looks after
theinterest ofitsmembers. Other functions aresetting insurance ratesandprices, unifying insurance
contracts,andforeseeingtheadoptionofprofessionalcodeofbehaviouramongtheinsurancecompanies.
Market Access andNational Treatment
- Anyinsurance company tobeestablished mustberegistered inJordan andmustbeapublic
share holding company.
- Thecommercial presence ofaforeign insurance company inJordan isbased ontherightof
reciprocity except forthose companies thatwere present inJordan before 1984. These are
usually intheform ofabranch ofaforeign company oranaccredited agent fortheforeign
company.
- Theminimum capital ofalocalinsurance company isJD.2.0 million, while thatforabranch
ofaforeign company oritsaccredited agent isJD.4.0 million. Therequired minimum capital
foralocalreinsurance company isJD.20.0million.
- Allemployees mustbeJordanians including themanager ofthebranch ofaforeign insurance
company oritsaccredited agent. However, theController ofInsurance maygrant permission
toaninsurance company toemploy uptothree non-Jordanian experts. Anynumber beyond
three requires theapproval oftheMinister ofIndustry andTrade.
Thegeneral manager forabranch ofaforeign insurance company oranaccredited agent of
aforeign insurance company mustberegistered intheCommercial Register ortheCompanies ’Register
incaseofanatural entity.
AnyJordanian insurance company andbefore commencing itsoperations mustdeposit with
acommercial bank“insurance ”money forthedifferent kinds ofinsurance andasfollows:
- JD.100,000 forlifeinsurance andsavings. JD.75,000 fortransport, fire,accidents
andanyother kindofinsurance.
- Asforabranch ofaforeign insurance company oritsaccredited agent, theyarerequired
todeposit double these sums.
- Asforalocal re-insurance company itmust deposit JD.500,000 forlifeinsurance
andJD.250,000 forother types ofinsurance.
- Thedeposits areheldunder thename oftheMinister ofIndustry andTrade andare
considered asacollateral thatcannot berevoked except withacourt order orwritten
instructions from theMinister ofIndustry andTrade. TheController ofInsuranceWT/ACC/JOR/2
Page44
isalerted bythebankifafallintheamount ofthedeposit occurs. Thedeposits can
beinvested inshares, development bonds, corporate bonds andrealestate mortgages.
TheController ’soffice keeps arecord oftheactivities oftheinsurance companies ingeneral,
andofeachcompany inparticular, aswellasoftheagents, intermediaries andexperts. TheController
oranyoneappointed byhimhastherighttoinspect andaudittheoperations ofanyinsurance company
atanytimeandthecompany istoprovide himwithanydocuments heasksfor.
Insurance companies aregranted ayearly permission toperform insurance activities. The
permission isrenewable upon submitting arequest onemonth before theendofeachcalendar year.
Anycompany involved ininsuring transport risksshould keepintheKingdom nolessthan
30percentofthetotalamount ofinsurance premiums, accrued intheKingdom, attheendofthe
financial year; and40percentforfireandaccidents andanyother formofinsurance other thanlife
insurance.
8.3.1.3 TheAmman Financial Market
TheAmman Financial Market (AFM) though small byinternational standards itisconsidered
themostdynamic bourse intheArabCountries. Themarket witnessed highgrowth ratesinthenumber
oflisted companies aswellasinshare prices. Because ofthesmallness ofitssize,itremains sensitive
toeconomic andpolitical developments inJordan andtheregion. Itisenvisaged thatthemarket will
develop andbecome stronger withdiversification ofitsfinancial instruments. Theactivities ofthe
AFM areregulated bytheAFM Law(No.31) of1976andbytheRegulation (No.26) of1980. Foreign
investors caninvest infinancial paper traded inAFM inJD.provided thattheequivalent offoreign
exchange hasbeen transferred toJordan from abroad andforeign ownership should notexceed
50percentofthecapital ofanyenterprise.
8.3.2 Telecommunications Services
8.3.2.1 Thetelecommunications sector inJordan iscurrently undergoing arestructuring process
according towhich thefollowing changes havetaken place.
- AnewTelecommunications Law(Law 13of1995) came intoforce since October 1995.
- ATelecommunications Regulatory Commission (TRC) hasbeenestablished asafinancially
independent entity responsible forregulating theSector. Theduties andresponsibilities of
(TRC) aredescribed intheabove mentioned Law.
- APolicy Department hasbeenestablished intheMinistry ofPosts andTelecommunications
tocarry outduties concerning policy development andsuggestion.
- Other changes areexpected tooccur including thetransformation oftheNational Operator,
theTelecommunications Corporation (TCC), intoacompany wholly owned bytheGovernment
asasteptowards privatization. Thetransformation isscheduled totakeplace before
October 1996.WT/ACC/JOR/2
Page45
8.3.2.2 Existing Services :
Public Switched Telephone Network (PSTN )
TCC, which isapublic sector entity, isthemonopolistic provider ofbasic telephone service.
Thenumber ofconnected subscribers is330.000. Thepenetration rateisabout 7.7per100inhabitants,
andexpected toreach 11percentupon thecompletion ofon-going expansions.
Cellular Mobile Telephone :
Aprivate company waslicensed toprovide theservice in1994. Thestandard usedisGSM.
Number ofcustomers isabout 13.500. Theservice covers themajor cities andhighways andimportant
touristic sites.
Paging
Thisservice isprovided byaprivate company since 1987. Number ofsubscribers isaround
7500.
Payphones
TCC istheonlyprovider ofpayphone service. Thepenetration ofpayphones isverylimited
andtheirnumber doesnotexceed 300units located insome public sites.
Data Services
Themarket ofthese services isstillinitsinitial stage ofdevelopment. Only onelicence has
beengranted tooperate dataservices.
8.3.2.3 Policies affecting Trade inServices
(a) Authorized Bodies:
Theoverall authority toapprove policies isvested intheCouncil ofMinisters upon the
recommendation oftheMinister ofPosts andTelecommunications. Within theMinistry, the
PolicyDepartmentisresponsibleforproposingandreviewingpolicies.TheTelecommunications
Regulatory Commission isresponsible forlicensing, issuing permits, typeapproval, frequency
management, resolving disputes between licensed operator andother regulatory functions as
prescribed bytheTelecommunications Law.
(b) Judicial Authorities:
Incase ofdisputes, theRegulator willarbitrate within itsauthority given bythe
Telecommunications Law. Beyond thislimit, theCourt willtakeovertheresponsibility.
(c) Provisions concerning qualification, technical standards andlicensing:
Provisions oftheTelecommunications Lawcover these requirements.
(d) Provisionsgoverningtheexistenceandoperationofmonopoliesorexclusiveservicesuppliers:
Provisions oftheTelecommunications Lawcover these issues.
(e) Provisions relating tosafeguard measures astheyapply totrade inservices:
Noregulations yetexistinJordan.WT/ACC/JOR/2
Page46
(f) Provisions relating tointernational transfers andpayments forcurrent transactions of
services:
Those ofForeign Exchange Regulations.
8.3.2.4 Market Access andNational Treatment:
(a) Limitations onthenumber ofservice suppliers:
Limitation onthenumber ofsuppliers foraparticular telecommunications service canbe
imposed bytheCouncil ofMinisters. Limitations, ifany,arenormally declared inthesame
decision oftheCouncil which allows fortheintroduction oftheservice.
(b) Restriction on,orrequirements ofspecific typeoflegal entity through which aservice
maybesupplied:
Theservice provider should bearegistered company inconformance withtheCompanies Law.
(c) Limitations ontheparticipation offoreign capital:
According totheInvestment Promotion LawNo.(16)for1995andNon-Jordanian Investment
Regulation No.(1)for1996, foreign investment, inthissector isnottoexceed 50percent
ofthecapital.
(d) Most-Favoured-Nation Treatment:
There arenomeasures inconsistent withm.f.n. treatment.
8.3.3 Health Services
8.3.3.1 GENERAL
Health andmedical services inJordan areprovided bythepublic sector through theMinistry
ofHealth andtheRoyal Medical Services oftheJordan Army andtheUniversity Hospital, andby
theprivate sector, andbyUNRWA (United Nations Relief andWorks Agency) forPalestinians refugees
living inJordan.
Health andmedical services inJordan areamong thebestintheregion. Health indicators
show thatlifeexpectancy atbirth increased from 49years in1965 to70years in1994, andinfant
mortality ratefellfrom 114to33per1,000 livebirths inthesame period.
Thepublic health sector isthemain provider ofprimary andhospital careespecially forthe
limited medium andlowincome people. TheMinistry ofHealth (MOH) operates anextensive primary
health carenetwork with1031health clinics andcentres thatspanthecountry. There are19hospitals
runby(MOH) with2681 bedsand68percentoccupancy rate.
Theprivate sector health services complement those ofthepublic sector astheyarepresent
mostly incities while thepublic sector serves ruralareasaswellasurban centres. There are36hospitals
with1997 bedsrunbytheprivate sector with49percentoccupancy rate. Theprivate health sector
serves allJordanians, andforeigners whose numbers having beenincreasing recently especially from
Arab countries. Theprivate sector offers health insurance schemes tocompanies andindividuals and
theycover around 12percent ofthose insured inJordan.
8.3.3.2 Market Access andNational Treatment
TheInvestment Promotion LawNo.(16)for1995 offers incentives andfullownership of
hospitals established inJordan byforeigners. Asforthecommercial presence, anyonecanestablish
ahospital intheprivate sector, butprior approval must beobtained from the(MOH) based ontheWT/ACC/JOR/2
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needfortheestablishment ofsuchahospital. Thiscondition applies toJordanians andnon-Jordanians.
Thehospital established canberegistered asacompany provided thatoneoftheowners isamedical
doctor.
Asforthepresence ofnatural persons thenumber ofJordanian doctors working inanyhospital
should notbelessthanthreequarters ofthetotalnumber ofdoctors. Asforother staff, theJordanians
must notbelessthanhalfthetotalofworkers inthehospital.
8.3.4. Tourism
Tourismactivityisessentiallyprivatesectororiented.TheGovernmentusedtoownasubstantial
share oftheJordan hotels andtourism company, butoffered itsshare forsaleandmostofitwasbought
byaprivate company. Tourist activity isgrowing andhotel construction isincreasing. Newhotels
arebeing builtbyprivate Jordanian andforeign capital. Foreign investors canown100percentof
anyproject inhotels withaminimum capital ofJD.(100,000). Fixed assets fortheestablishment
oftheproject areexempted fromcustom ’sduties andimport fees. Hotels canalsogetexemption from
feesandtaxes ontheirpurchase offurniture orsupplies forrenewal orrenovation onceevery seven
years.
Tourist transport usedtobeamonopoly ofoneprivate company upto1994. Thesector is
nowopenandtwonewtourist transport companies havestarted operations. Foreigners interested in
tourist transport candosowithalimitation of50percentownership fortheproject.
8.3.5 Construction Services
Theconstruction sector isanimportant contributor toeconomic activity inJordan. Bothpublic and
private sectors aremajor players intheconstruction activity inthecountry. TheMinistry ofPublic
Works andHousing engages inactual construction andmaintenance ofgovernment buildings androads,
though thebulkoftheconstruction works inthepublic sector iscarried outbytheprivate sector
contractors through tenders offered bytheGovernment.
Thevalue ofconstruction works inthepublic sector in1995 wasJD.475 million ofwhich
JD.186 million wasawarded through theGovernment Tenders Department. Thevalue ofconstruction
works intheprivate sector in1995 wasJD.850million.
According totheForeign Investment Regulation No.(1)for1996 aNon-Jordanian Investor
isallowed a50percentownership ofanenterprise inthecontracting sector.WT/ACC/JOR/2
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Annex 1
LIST OFRELEVANT REGULATIONS
AND STATISTICS
A. Laws, Regulations andInstructions (Available inArabic unless otherwise specified)
1. Companies Law;
2. Investment Promotion Law(English translation available);
3. Customs Law(English translation available);
4. Imports andExports Law;
5. Imports andExports Regulation;
6. Standards andMeasurements Law;
7. Income TaxLaw(English translation available);
8. Instructions forImportation;
9. Instructions forTransit;
10. Instructions forDuty Drawback;
11. Instructions forTemporary Entry;
12. Telecommunications Law;
13. Insurance Law;
14. Copyright Protection Law;
15. Trade Marks Law;
16. Patents Designs Law;
17. Foreign Exchange Law.WT/ACC/JOR/2
Page49
Annex 2
ListofBilateral Agreements Between Jordan
andOther Countries
A. Foreign Countries
1. Agreement onEconomic andTechnical Cooperation between Jordan andBelgium;
2. Agreement onEconomic andTechnological Cooperation between Jordan andBulgaria;
3. Trade Agreement between Jordan andPeople 'sRepublic ofChina;
4. Trade Agreement between Jordan andChinese Taipei;
5. Trade Agreement between Jordan andGreece;
6. Long Term Trade Agreement between Jordan andHungary;
7. Trade andEconomic Agreement between Jordan andIndia;
8. Trade andEconomic Agreement between Jordan andIndonesia;
9. Trade Agreement between Jordan andPeople 'sRepublic ofKorea;
10. Trade Agreement between Jordan andRepublic ofKorea;
11. Trade Agreement between Jordan andPakistan;
12. Long Term Trade Agreement between Jordan andPoland;
13. Trade Agreement between Jordan andPortugal;
14. Trade Agreement between Jordan andRomania;
15. Trade Agreement between Jordan andSpain;
16. Trade Agreement between Jordan andSriLanka;
17. Trade andEconomic Agreement between Jordan andSwitzerland;
18. Trade Agreement between Jordan andTurkey;
19. Trade Agreement between Jordan andBrazil;
20. Trade Agreement between Jordan andEthiopia;
21. Trade Agreement between Jordan andAustralia;
22. Trade Agreement between Jordan andDenmark;
23. Trade Agreement between Jordan andFinland;
24. Trade Agreement between Jordan andAustria;
25. Economic Agreement between Jordan andtheEC;
26. Agreement onEconomic andTechnical Cooperation between Jordan andGermany;
27. Trade andEconomic Agreement between Jordan andRussia;
28. Trade Agreement between Jordan andMexico;
29. Agreement onEconomic andTechnical Cooperation between Jordan andHolland;
30. Trade andEconomic Agreement between Jordan andCanada;
31. Trade Agreement between Jordan andMalaysia;
32. Agreement onEconomic andTechnical Cooperation between Jordan andChile;
33. Trade Agreement between Jordan andIslamic Republic ofIran;
34. Trade Agreement between Jordan andIsrael.
B. Arab Countries
1. Trade andEconomic Agreement between Jordan andBahrain;
2. Trade Agreement between Jordan andTunisia;
3. Trade andEconomic Agreement between Jordan andSaudi Arabia;
4. Trade Agreement between Jordan andSudan;
5. Trade andEconomic Agreement between Jordan andSyria;
6. Trade Agreement between Jordan andSomalia;
7. Trade andEconomic Agreement between Jordan andEgypt;WT/ACC/JOR/2
Page50
8. Trade Agreement between Jordan andQatar;
9. Trade andEconomic Agreement between Jordan andLebanon;
10. Trade Agreement between Jordan andLibya;
11. Trade Agreement between Jordan andMorocco;
12. Trade andEconomic Agreement between Jordan andYemen;
13. Trade andEconomic Agreement between Jordan andOman;
14. Trade andEconomic Agreement between Jordan andKuwait;
15. Trade andEconomic Agreement between Jordan andIraq;
16. Trade andEconomic Agreement between Jordan andUnited Arab Emirates;
17. Trade Agreement between Jordan andDjibouti;
18. Trade andEconomic Agreement between Jordan andthePalestinian National Authority.