WT/TPR/S/84 Trade Policy Review
Page 30
III. TRADE POLICIES AND PRACTICES BY MEASURE
(1) OVERVIEW
1. Brunei's tariffs are relatively low and there are few non-tariff barriers to trade.  Policies and
practices are however subject to a certain administrative discretion, detracting from transparency.
This may be in part because, by and large, WTO Agreements are seemingly applied in good faith or
on a "best-efforts" basis with domestic legislation, usually not amended to bring it into conformitywith WTO Agreements.  One exception involves TRIPS legislation on trade marks, copyrights and
industrial designs, which has been passed recently and is to be notified to the WTO in 2001.
2. The tariff is the main instrument of Brunei Darussalam's trade policy and, in the absence of
indirect and personal income taxes, constitutes a substantial source of tax revenue (7% of total taxes
collected in 1999).  The average applied MFN tariff (excluding specific duties, whose ad valorem
equivalents were not available) was only 3.1% in 2000.  Nonetheless, peak ad valorem  rates (as high
as 200%) affect mainly motor vehicles.  Furthermore, specific duties affecting 1.3% of all tariff lines
tend to conceal additional tariff "peaks", which means that the overall level of applied MFN tariff
protection may be somewhat higher than 3.1%;  how ever, these duties are apparently to be converted
to ad valorem  tariffs in 2001.  Whereas some 94% of all tariff lines are bound, the gap between the
average applied MFN tariff (3.1%) and the bound rate (24.8%) is large.  This gap provides the
authorities with a great deal of scope to raise tariffs without breaching bindings;  it thereby imparts a
degree of unpredictability to the tariff, although the authorities have seldom exploited this scope to
raise tariffs, even in the wake of the recent Asian crisis.  While the Sultan is empowered to grant
preferential tariff/trade treatment to any trading partner (including developed countries) on an ad hoc
basis, in practice, this discretionary power appe ars to be little used.  Under the ASEAN Common
Effective Preferential Tariff (CEPT) scheme, Brunei has been reducing its tariff rates in preparationfor the ASEAN Free-Trade Area;  interestingly, certain  CEPT rates seem to be higher than MFN rates
applied by Brunei.
3. A few non-tariff barriers to imports are in force.  In particular, the Department of Information
Technology and State Stores appears to operate an import monopoly on rice (purchased from
Thailand through a government-to-government contract renewed on an annual basis) and sugar;  bothproducts are also subject to maximum retail prices and re-export bans.  Beef and poultry imports are
monitored to avoid excess supply in the local market.  A "temporary" import ban on cement (to
protect the state-owned sole domestic supplier) seems to have been in effect for some time, while
another "temporary" ban, on imports of roofing material, was eliminated recently.  Import
restrictions/bans on alcoholic beverages and meat are in force on religious grounds.  Although there isa 15% preference favouring domestic suppliers in the area of government procurement, it is unclear
whether this preference is actually applied.
4. Brunei Darussalam has few impediments to exports.  It does not levy export taxes.  However,
export prohibitions and restraints apply to several products, often to ensure adequate domestic
supplies (as in the case of rice and sugar).  While there are no explicit tax concessions or subsidies forexports, tax incentives appear to be available to companies, under the Pioneer Status programme,
provided they invest in industries whose export pr ospects are thought to be bright and the companies
satisfy a local-content requirement.
5. In the absence of internal indirect and personal taxes, the corporate tax is the main source of
tax revenue.  At the same time, however, the corporate tax is one of the main instruments of economic
policy, as it embodies incentives in the form of tax holidays under the Pioneer Status programme;
these incentives are aimed at attracting investment to targeted sectors.  But such incentives seem toBrunei Darussalam WT/TPR/S/84
Page 31
have been ineffective in promoting diversification.  As a consequence, a B$200 million working
capital credit fund was launched in January 2001;  the fund provides subsidized loans with interest of
up to 4% for small and medium-sized enterprises enga ged in activities, such as construction, tourism,
and information technology.  A "Bruneization" polic y, aimed at increasing employment of locals as
well as Bruneian participation in the equity of firm s, has been applied, albeit in a seemingly flexible
manner.
6. Widespread direct state involvement in the production and/or trade of essential
goods (including oil and gas) and services (social, personal, air transport, public utilities) also
constitutes a major instrument of economic policy and a barrier to both domestic and foreign
investment.  (A further barrier to foreign investment arises from the 30% minimum local-participation
requirement for investment projects in agriculture, fisheries, and food processing.)  Such involvementis thus a potentially important distortion to domestic competition.  The domestic market appears to be
dominated by state-owned enterprises (some of which are monopolies) and government-linked
companies, such as Semaun Holdings Sendirian Berhad and its affiliates, which are increasingly
involved in joint ventures with foreign investors.   Even though it is incorporated as a private
company, Semaun Holdings' is wholly owned by th e Government and its board of directors consists
almost entirely of government representatives.  Little information is available on the activities of
Semaun Holdings and its affiliates, their annual accounts, or their contribution to GDP, which
suggests a lack of transparency and public accountability.  The same applies to the Brunei Investment
Agency (BIA), which, as discussed in Chapter I, also plays a major role in the economy;  the agency
is responsible for investing petroleum revenues and owns several firms, some of which it took over
from the Amedeo Development Corporati on, following the latter's collapse.
1  While efforts have been
made to reduce the Government's involvement in  the economy, by "corporatizing" several public
sector companies (notably parts of electricity generation, waste collection, and telecommunications)
and contracting out some public services to the private sector, privatization has hitherto tended to be
piecemeal and ad hoc.  However, the authorities stress that privatization will be top of the
Government's agenda during the next few years.
7. Brunei has no specific legislation aimed at combatting anti-competitive private (or public)
practices.  However, it does operate price controls for several products, including rice, sugar, bread,
milk for infants, tea, coffee, motor vehicles, petroleum products, and cigarettes.  A freeze on the retail
prices of petrol (since the 1970s) necessitates subsidization;   the difference between the retail price
and that set by Brunei Shell Marketing (joint venture between the State and Royal Dutch Shell) is
covered by the State.
                                                     
1 According to press reports, the BIA offered to purchase many of the Amedeo Development
Corporation's assets.  ( Brunei Direct Com , 8 November 2000 [Online].  Available at:
http.//www.brudirect.com/DailyInfo/News/Archive/Nov00/081000/nite01.html [8 November 2000].  It isreported that Amedeo's debts amounted to around B$6 billion (around US$3.46 billion), much of which appearsto have came from the BIA although no figures are available on the total holdings of BIA.  The extent of BIA's
losses as a result of the collapse of Amedeo is unclear , with suggestions of around B$10 billion, as are the
Government's intentions with respect to the future of the BIA.WT/TPR/S/84 Trade Policy Review
Page 32
(2) MEASURES DIRECTLY AFFECTING IMPORTS
(i) Customs procedures
8. All importers must be registered with the Government to be eligible to discharge imported
goods from Customs Control.  All imports into  Brunei must be accompanied by a bill of
lading/delivery order or airway bill;  packing list;  commercial invoice and at least three copies of the
customs declaration form, which must include the number and description of packages;  marks andnumbers of individual packages;  detailed description of the goods being imported;  gross and net
weights or quantities of packages;   value (f.o.b. and c.i.f.);  place of shipment and destination;  and
country of origin.  The invoice must also be signed by the exporter or shipper.  Certificates of origin
or of analyses and any other documents are usually required only when requested.
9. Import permits are required for some products, including plants, animals, birds, fish, salt,
sugar, rice, drugs, gambling machines, and used motor vehicles (section (vi)(b) below).  These are
available from the relevant ministries and departments of the Government of Brunei.  In some cases,
including for plants, animals and animal products, birds, and fish, import licences must be
accompanied by sanitary or phytosanitary certificates from the exporting country (section (ix)(b)).
10. Customs decisions may be appealed under sect ion 134 of the Customs Act.  Under the Act,
authority for all customs decisions lies with the Controller of Customs;  unless it is specifically stated
that such decisions may only be made at the absolute discretion of the Controller, appeals may be
made to the Sultan of Brunei, in Council.  Any decision taken by the Sultan is final.
(ii) Preshipment inspection
11. Brunei notified the WTO that it has no laws pertaining to preshipment inspection.
2  To date,
no companies have provided preshipment inspection services in Brunei.
(iii) Customs valuation and rules of origin
(a) Customs valuation
12. Under the provisions of Article VII of the GATT 1994, which give developing countries the
right to delay application of this Article for a period of three years, Brunei informed the WTO
Secretariat that it would make use of this transitional measure.3  Brunei also reserved the right "to
provide that the relevant provision of Article 4 of the Agreement would apply only when the customs
authorities agree to reverse the order of Articles 5 and 6;  and to provide that Article 5(2) shall be
applied in accordance with the provisions of the relevant note thereto, whether or not so requested by
the importer".4
13. According to the authorities, the provisions of Article VII of the GATT 1994 have been
implemented on an administrative basis;  full implementation was expected by the end of 2000.However, according to the authorities, passage of the legislation on customs valuation has been
unavoidably delayed and is expected to be gazetted and implemented fully by mid 2001.
                                                     
2 WTO document G/PSI/N/1/Add.5, 3 February 1997.
3 WTO document WT/Let/36, 8 November 1995.
4 WTO document WT/Let/129, 10 December 1996.Brunei Darussalam WT/TPR/S/84
Page 33
(b) Rules of origin
14. According to Brunei's notification to the WTO, there are no existing laws, regulations,
judicial decisions or administrative rulings on non-pref erential rules of origin, as of the date of entry
into force of the WTO Agreement.5  Preferential rules of origin, are applied under the ASEAN
preferential trading arrangement6, for which ASEAN content must be at least 40% of the f.o.b. price
of the finished good.  For textiles and textile products, preferential import tariffs are charged under thesubstantial transformation criterion of the CEPT, if substantial transformation has taken place in the
ASEAN region.  Brunei enacted the Customs (ASEAN Common Effective Preferential Tariff) Order
on 1 January 1999, replacing the Customs (ASEAN Common Effective Preferential Tariff) Order
1994.  Under the new Order, the definition of origin is as annexed to the Agreement on the ASEAN
CEPT Scheme for the AFTA.   Brunei does not participate in the GSTP nor does it grant preferential
rules of origin under any other agreements.
(iv) Applied tariff
(a) Structure of the MFN tariff
General features
15. Brunei adopted the Harmonized Description and Coding System (HS) in January 1992
although it is not a contracting party to the Convention.  Import duties are assessed on the basis of
c.i.f. value.  In 2000, Brunei's applied most-favoured-nation (MFN) tariff contained 6,503 lines at the
HS nine-digit level.
7  Around 98.6% of the tariff is subject to ad valorem  tariff rates, while 87 lines
carry specific rates of duty.  These specific rates range from B$110 to B$220 per tonne for tea and
coffee, B$30 to B$250 per decalitre for alcohol products, and B$0.11 per kg. and B$0.22 to
B$0.44 per decalitre for petroleum products (Table AIII.1).  As information was not available on
ad valorem  equivalents for the specific rates, these 87 lines are not included in the tariff analysis
presented in this report.  Ad valorem  equivalents of specific rates, however, tend to be high and are
often used to conceal high rates of tariff.8  According to the authorities, the preference for using
specific tariff rates for these products was based on their high rates of smuggling;  the specific rate is
also considered to be administratively simpler for collecting duty.
16. Applied ad valorem  MFN tariffs range from 0 to 200%.  There are four tariff bands:  duty
free, between 0 and 10%, between 10 and 20%, and over 20% (Chart III.1).  The majority of tariff
lines (around 80.1%) are zero, while 0.5% of tariff lines are subject to rates above 20%.  These higher
rates mostly apply to motor vehicles, whose tariffs can be as high as 200%;  and for hair products,
including hair creams and oils and hair dyes, and fireworks, which are subject to rates of 30%.  A
                                                     
5 WTO document G/RO/N/5, 1 November 1995.
6 WTO document G/RO/N/4, 7 August 1995.
7 The tariff is in the HS 96 nomenclature.  The original tariff file contained 6,518 lines at the HS
nine-digit level.  A number of lines, however, are divided further into two additional lines;  adjustments were
made to include only the two additional lines in these cases, resulting in an elimination of six lines.  In addition,tariff lines appearing in Chapter 98 are not usually included in the Secretariat's tariff analysis (12 lines in thecase of Brunei's tariff);  three lines that do not carry HS codes were eliminated;  and seven missing lines wereadded to the tariff file.  A total of 15 lines were therefore eliminated from the original tariff file.
8 Specific duties also tend to tax all imports within a particular tariff line at the same rate, thereby
taxing cheaper products more heavily and encouraging domestic firms to produce less expensive equivalent
goods.WT/TPR/S/84 Trade Policy Review
Page 34
significant number of tariffs entail peaks;  almost 13% of tariff lines exceed three times the simple
average MFN rate, and 11% exceed 15% (Table III.1).9
17. Although the custom tariff is levied on a relatively small number of tariff lines, it accounted
for around 7% of total tax revenue in 1999 (around 1.2% of GDP), declining from a peak of 14% of
total tax revenue in 1997 (around 3% of GDP).  This would suggest that specific tariff rates, which
account for around 6.5% of tariff rates above zero, are relatively high (in ad valorem  terms).
01,0002,0003,0004,0005,0006,000
Duty free >0-10 >10-20 >20020406080100
Calculations exclude specific duties.
WTO Secretariat calculations, based on data provided b y the authorities of Brunei Darussalam.Number of tariff linesChart III.1                                         
Distribution of MFN tariff rates, 2000
Tariff rates
Note:
Source :(80.1%)
(8.4%)
(0.5%)(11.0%)Number of lines (% of total)Cumulative per centRight-hand scale:
Left-hand scale:Per cent
Table III.1
Structure of tariffs in Brunei Darussalam
(Per cent)
2000 U.R.a
1. Bound tariff lines/all tariff lines 94.4 94.4
2. Duty-free tariff lines/all tariff lines 80.1 80.1
3. Specific tariff lines/all tariff lines 1.3 1.3
4. Tariffs with no ad valorem  equivalent 1.3 1.3
5. Simple average bound tariff rate 24.8 24.8
6. Simple average applied tariff rate 3.1 3.1
Agricultural products (HS 01-24)b0.0 0.0
Non-agricultural products (HS 25-97) 3.6 3.6
Table III.1 (cont'd)
                                                     
9 As the tariff analysis does not include specific duties, it is likely that a larger percentage of the tariff is
subject to tariff peaks.Brunei Darussalam WT/TPR/S/84
Page 35
2000 U.R.a
7. Domestic tariff "peaks"/all tariff linesc12.7 12.7
8. International tariff "peaks"/all tariff linesd10.7 10.7
9. Overall standard deviation 9.4 9.4
10. Coefficient of variation 3.0 3.0
a Indicators corresponding to full implementation of Brunei Darussalam's obligations under the Uruguay Round.  (The fact that
these indicators are identical to those for 2000 reflects the fact that these obligations have been fully implemented.
b Under the definition of agriculture products used in the WTO Agreement on Agriculture.
c Domestic tariff "peaks" are defined as those rates exceeding three times the overall simple average MFN rate.d International tariff "peaks" are defined as those exceeding 15%.
Note: Calculations exclude specific duties.
Source: WTO Secretariat estimates, based on data provided by the authorities of Brunei Darussalam.
Average and dispersion
18. In 2000 the simple average applied MFN tariff was 3.1%, zero for agricultural products (both
HS 1-24 and under the WTO definition of agriculture) and 3.6% for non-agricultural products
(HS 25-97) (Table III.2).  Tariff rates range from 0-5% for agricultural products (both HS 1-24 and
under the WTO definition of Agriculture) and 0- 200% for non-agricultural products (HS 25-97).
Dispersion, as measured by the coefficient of variation, is 3.1.10
Table III.2
Applied MFN tariff, 2000
Tariff lines subject to
ad valorem rates
(% of all lines)Average
(per cent)Range
(per cent)Dispersiona
Total 100.0 3.1 0-200 3.1
Agriculture, forestry and fisheries (HS 1-24) 14.3 0.0 0-5 0.0
Agriculture (WTO definition) 13.5 0.0 0-5 0.0
Non-agricultural products (HS 25-97) 85.7 3.6 0-200 2.8
Escalationb
Unprocessed 11.5 0.4 0-20 6.0
Semi-processed 32.3 0.4 0-20 6.8
Fully processed 56.2 5.2 0-200 2.3
a Dispersion is measured by the coefficient of variation.
b Based on ISIC classification.
Source: WTO Secretariat, based on data provided by the authorities.
Tariff escalation
19. Though the overall average applied MFN tariff is low, escalation is particularly pronounced
in wood and furniture, fabricated metal products a nd machinery, and chemicals, providing relatively
higher effective protection to these industries (Chart III.2).  In the case of wood and furniture, the
tariff on unprocessed and semi-processed products is considerably higher than for finished products,
representing de-escalation in the tariff and higher protection for producers of raw material andsemi-processed goods in Brunei.
                                                     
10 The coefficient of variation is the standard deviation divided by the simple average.WT/TPR/S/84 Trade Policy Review
Page 36
02468101214161820Per centChart III.2
Tariff escalation by 2-digit ISIC industry, 2000
Note:
Source :Calculations exclude specific duties.
WTO Secretariat estimates, based on data provid ed by the authorities of Brunei Darussalam.Average 2000
(3.1%)First stage of processing
Semi-processed
Fully processed
(b) Preferential tariffs
Common Effective Preferential Tariff
20. As a member of ASEAN, Brunei participates in the Common Effective Preferential Tariff
(CEPT) scheme and has been reducing its tariff rates in preparation for the ASEAN Free-Trade Area
(AFTA), due to be completed in 2002 (Box III.1).  Brunei's CEPT tariff contains 6,263 lines at the HS
nine-digit level, 6,255 of which have ad valorem rates, while nine lines, relating to motor spirits, carry
specific rates of duty.  As the Secretariat was unable to obtain data on Brunei's CEPT tariff that
correspond with the latest MFN tariff, data previously supplied by the authorities were used.11  The
CEPT tariff analysis in this report may therefor e not concord strictly with the MFN and bound tariff
analysis.  The simple average rate accorded to other ASEAN members under CEPT was 1.9% in2000, and 0 and 2.2% for agriculture and non-agricultural products, respectively.
12  Differences
between average applied MFN and CEPT tariffs ex ist mainly (by HS section) in wood and wood
articles, machinery, precision instruments, footwear and headgear, and hides and skins (Chart III.3).
                                                     
11 New data on the CEPT tariff provided by the authorities in January 2001 showed a discrepancy with
previously supplied data on 738 tariff lines, most showing an increase in tariff rates;  the authorities suggest thediscrepancies may be due to technical problems.  For these reasons, the data used for the CEPT tariff analysis isdifferent from that used for the MFN and bound tariff analysis.
12 As for the MFN tariff, 87 tariff lines were omitted from the analysis as they carry specific rates and
no ad valorem  equivalents were available to the Secretariat.Brunei Darussalam WT/TPR/S/84
Page 37
Box III.1:  Recent tariff liberalization
As a member of ASEAN and a participant in the ASEAN Free-Trade Area (AFTA), Brunei has committed
to reducing tariffs on 6,263 tariff lines to rates between 0 and 5% by 2002.  In line with this commitment,Brunei has been reducing tariffs on products currently taxed above this range.  Products currently excludedfrom the commitment include tea, coffee, tobacco, alcohol, and motor vehicles.
Along with preferential trade liberalization, MFN ta riff liberalization has also been pursued.  On
1 April 1995, Brunei reduced import tariffs on 688 items, on an MFN basis, including a reduction in rates
for clothing, electrical home appliances, gems and jewellery, and furniture to 5% and removed tariffs oncomputers and related products.  In addition, according to the Royal Customs and Excise Departmenttariffs on textiles and clothing were removed on 14 October 1996.
Some MFN tariff rates have, however, been raised:  import duty for cigarettes and tobacco products was
raised from the previous range of B$0–B$10 per pound to B$30–B$100 per kg. on 1 December 1994, whilethe import duty on motor vehicles was raised on 2 February 1995 from 20% to a range of 40% to 200%,depending on the category of vehicle being imported.
Source:  APEC (2000a);  Royal Customs and Excise Department (2000);  and data on the CEPT tariff
provided by the authorities.
0510152025Chart III.3
Simple average applied tariff rates, by HS section, 2000
Per cent
Calculations exclude specific duties (87 tariff lines).
WTO Secretariat estimates, based on data provided by the authorities of Brunei Darussalam.Note:
Source :MFN 
CEPT 
Average CEPT 
 (1.9%)Average MFN
 (3.1%)Brunei Darussalam WT/TPR/S/84
Page 39
Other preferential tariffs
23. Under the Customs Law, customs duties paid on imports or exports may be changed, when
the need arises, by order of the Sultan, and subsequently published in the Government Gazette .  The
Order may impose differential rates on goods manufactured or produced in the "scheduled territories",
which presently include all independent members of the Commonwealth, the Republic of Ireland, and
Myanmar.14  However, according to the authorities, pr eferential rates apply only for imports from
other ASEAN countries under the Customs (ASE AN Preferential Trading Arrangement) Order
(S24/89) and the Customs (ASEAN Common Effective Preferential Tariff) Order, 1999.  Exemptions
are also available to all Pioneer Status companies for imports of plant, machinery, and equipment to
be used in the pioneer factory and for imported raw materials, provided these are not available locally
(section (4)(ii)(a)).
(v) Tariff bindings
24. As a result of the Uruguay Round, Brunei bound 94.4% of its tariff of 6,503 lines, or around
93.6%  in terms of the value of imports in 1999.15  Of the 6,140 lines that were bound, 6,111 lines
carry ad valorem  rates, while 29 lines are subject to specific rates of duty.  The following analysis was
carried out on the 6,111 lines with ad valorem  bound tariff rates.
25. A high percentage of lines (above 90%) is bound in most HS sections, the exceptions being
prepared foods (section 4), at 88.7%, transport equipment (section 17) at 59%, and precision
instruments (section 18) at 77% (Chart III.5).16  Brunei is not a participant in the WTO Agreement on
Information Technology Products (ITA).
26. In 2000, Brunei's overall average bound rate was 24.8%, 23.8% for agriculture (23.9%
according to the WTO definition) and 25% for non-agricultural products (25% for industrial and 20%
for petroleum products under the WTO definition).  In agriculture, tariff peaks (rates of 30% andabove) are found mainly in meat and edible meal offal (HS 2), edible vegetables (HS 7), coffee, tea,
mate and spices (HS 9) and cereals (HS 10) (Chart III.6).  For non-agricultural products, bound rates
of 30% and above are mainly in photographic or cinematographic goods (HS 37), wood and wood
products (HS 44), carpets and other textile floor coverings (HS 57), special woven fabrics (HS 58),
knitted or crocheted fabrics (HS 60), clothing (HS 61 and 62), electrical machinery and equipment(HS 85), vehicles (HS 87), and furnitur e and bedding (HS 94) (Chart III.7).
27. Although a high share of the tariff was bound, there remains a significant difference between
the bound average and Brunei's current applied MFN tariff, which averaged 3.1% in 2000.  The
difference is even greater in agriculture (HS 1-24), where the bound tariff average is 23.8%, compared
with an MFN average of zero.  This difference lends uncertainty to economic agents operating inBrunei by providing the Government with scope to raise tariff rates of products within their
corresponding bound rates.  With regard to agricultural products, the authorities maintain that the
difference is necessary to address food security concerns;  the Government maintains that it would
consult with and notify all affected parties in advance should tariffs be raised (Chapter IV(2)).
                                                     
14 Scheduled territories are listed in Sectio n 2 of the Schedule in the Customs Act.
15 Based on Brunei's bound tariff in the HS 96 nomenclature.
16 No bindings were made in Section 19 (arms and ammunition).WT/TPR/S/84 Trade Policy Review
Page 40
28. Brunei notified the Committee on Market Access of its intention to reserve its rights under the
provisions of Article XXVIII of the GATT 1994 to modify its Schedule CII for a period of three years
beginning on 1 January 1997.17
0102030405060708090100
Per cent
HS Section
HS Section
I
II
III
IV 
V
VI
VII
VIII
IX
X
XI
XII
XIII
XIV
XV
XVI
XVII
XVIII
XIX
XX
XXIDescription
Live animals;  animal products
Vegetable productsAnimal or vegetable fats and oils;  prepared edible fats;  animal or vegetable waxes  
Prepared foodstuffs;  beverages, spirits and vinegar;  tobacco and manufactured tobacco substitutes
Mineral productsProducts of the chemical or allied industriesPlastics and articles thereof;  rubber and articles thereof
Raw hides and skins, leather, furskins and articles thereof
Wood and articles thereofPulp, paper and articles thereofTextiles and textiles articlesFootwear, headgear, umbrellas, sticks, prepared feathers;  artificial flowers;  articles of human hair
Articles of stone, plaster, cement or similar articles;  ceramic products;  glass and glassware
Precious stones;  pearls;  precious metals and articles thereof;  imitation jewellery; coinBase metals and articles thereofMachinery, mechanical appliances and electrical equipment and parts and accessories thereof
Vehicles, aircraft, vessels and associated transport equipment
Precision instruments;  clocks and watches;  musical instruments;  and parts thereofArms and ammunition; parts and accessories thereofMiscellaneous manufactured articles
Works of art, collectors' pieces and antiquesChart III.5
Share of bound tariff line s by HS section, 2000
Calculations exclude specific duties.
WTO Secretariat calculations, based on data provided by the authorities of Brunei Darussalam.Note:     
Source :
                                                     
17 WTO document G/MA/41, 3 January 1997.Brunei Darussalam WT/TPR/S/84
Page 41
0510152025303540
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24Per cent
HS Chapter
HS Chapter
01
02
03
04 05
06
0708
09
1011
12
1314
15
16
17
1819
20
2122
23
24Description
Live animals
Meat and edible meat offals
Fish and crustaceans, molluscs and other aquatic invertebrates
Dairy produce, birds eggs, natural honey, edible products of animal origin  Products of animal origin, n.e.s.
Live trees and other plants;  bulbs, roots and the like;  cut flowers
Edible vegetables and certain roots and tubersEdible fruit and nuts;  peel of citrus fruits or melons
Coffee, tea, mate and spices
CerealsProducts of the milling industry;  malt;  starches;  wheat gluten
Oil seeds and oleaginous fruits;  miscellaneous grains, seeds and fruit
Lacs;  gums, resins and other vegetable saps and extractsVegetable plaiting materials;  vegetable products n.e.s.
Animal or vegetable fats and oils and other cleavage products;  prepared edible fats; etc.
Preparations of meat, or fish or of crustaceans, molluscs or other aquatic invertebrates
Sugars and sugar confectionery
Cocoa and cocoa preparationsPreparations of cereals, flour, starch or milk;  pastrycooks' products
Preparations of vegetables, fruit, nuts or other parts of plants
Miscellaneous edible preparationsBeverages, spirits and vinegar
Residues and waste from the food industries;  prepared animal fodder
Tobacco and manufactured tobacco substitutesChart III.6
Average tariff rates on agricultural products, by HS chapter
Average applied rate
HS 01-24
 (0.0%)Average bound rate
HS 01-24
(23.8%)
Source :  WTO Secretariat calculations, based on data provided by the authorities of Brunei Darussalam.Note:     Calculations exclude specific duties.Overall average applied rate 
HS 01-97
(3.1%)Applied rate 
Bound rate WT/TPR/S/84 Trade Policy Review
Page 42
05101520253035404550
25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 78 80 82 84 86 88 90 92 94 96Per cent
HS ChapterAverage applied rate
HS 25-97
(3.6% )
HS         Description
Chapter  
25          Salt; sulphur; earths and stone, etc.26          Ores, slag and ash27          Mineral fuels, mineral oils, etc.28          Inorganic chemicals; organic or               inorganic compounds of precious              metals, etc.29          Organic chemicals30          Pharmaceutical products31          Fertilizers    
32          Tanning or dyeing extracts etc. 
33          Essential oils and resinoids;              perfumery, cosmetic or toilet              preparations34          Soap, organic surface-active               agents washing prep., etc.    35          Albuminoidal substances;              modified starches; glues, etc.36          Explosives; pyrotechnic products;              matches, etc
37          Photographic or cinematographic 
             goods38          Miscellaneous chemical products39          Plastics and articles thereof40          Rubber and articles thereof41          Raw hides and skins and leather42          Articles of leather, etc.43          Furskins and artificial fur;               manufactures thereof44          Wood and articles of wood, etc.45          Cork and articles of cork
46          Manuf. of straw, of esparto, etc.   
47          Pulp of wood or of other               fibrous cellulosic materialHS        Description
Chapter
48          Paper and paper board, etc.49          Printed books, newspapers, etc.50          Silk51          Wool; fine or coarse animal              hair, etc.52          Cotton53          Other vegetable textile fibres 54          Man-made filaments   55          Man-made staple fibres 
56          Wadding, felt and non-wovens;
              special yarns; twine, cordage, etc.57          Carpets; other textile floor              coverings58          Special woven fabrics; lace, etc.59          Impregnated, coated, covered or              laminated textile fabrics, etc.60          Knitted or crocheted fabrics    61          Articles of apparel and clothing              accessories, knitted or crocheted
62          Articles of apparel and clothing
              accessories, not knitted, etc.63         Other made-up textile articles;              sets, worn clothing, etc.64          Footwear, gaiters, etc.65          Headgear and parts thereof66          Umbrellas, walking-sticks, etc. 67          Prepared feathers and down, etc.68          Articles of stone, plaster, etc.69          Ceramic products70          Glass and glassware
71          Natural or cultured pearls,
              precious or semi-precious stones,              precious metals, etc.HS         Description
Chapter
72          Iron and steel73          Articles of iron and steel74          Copper and articles thereof75          Nickel and articles thereof76          Aluminium etc. 78          Lead and articles thereof   79          Zinc and articles thereof 80          Tin and articles thereof81          Other base metals, etc.
82          Tools, implements, cutler
              spoons and forks, etc.83          Misc. articles of base metals84          Nuclear reactors, boilers,              machinery, etc.85          Electrical machinery and              equipment, etc.86          Railway or tramway               locomotives, etc.87          Vehicles other than railway
              or tramway rolling-stock; etc.
88          Aircraft, spacecraft, etc.89          Ships, boats, etc.90          Optical, photographic, etc.               apparatus91          Clocks and watches, etc.92          Musical instruments, etc.93          Arms and ammunition, etc.94          Furniture, bedding, etc.95          Toy, games, etc.96          Miscellaneous manuf. articles
97          Works of art, antiques, etc.
Chart III.7
Average tariff rates on manufactured products, by HS chapter
26 28 30 32 34 36 38 40 42 44 46 48 50 52 54 56 58 60 62 64 66 68 70 72 74 76 79 81 83 85 87 89 91 93 95 97
Sourc e:  WTO Secretariat calculations, based on data provided by the authorities of Brunei Darussalam.Note:      Calculations exclude specific duties.  HS chapter 93 is totally unbound.Average bound rate 
HS 25-97
(25.0%)
Overall average applied rate 
HS 01-97 
(3.1%)Applied rate 
Bound rate Brunei Darussalam WT/TPR/S/84
Page 43
(vi) Import prohibitions, restrictions, and licensing
(a) Import prohibitions
29. Import prohibitions are maintained on a small number of products, including opium,
firecrackers, vaccines from Chinese Taipei, and arms and ammunition (Table III.3).18  T h e
prohibitions are maintained for security, health, and moral reasons.  In addition, the import and
manufacture of alcohol and alcohol products are restricted for religious reasons under the CustomsProhibitions and Restriction of Imports and Expo rts Amended Order 1990.  The order, which became
effective on 1 December 1990, allows imports through a licence issued by the Controller;  non-
Muslim tourists aged 17 and over may import alcohol products in quantities of up to 12 cans and 2
bottles.  The local distillation of alcohol is governed by the Excise Act.  In addition, there appears to
be a "temporary" import ban on cement, while a similar "temporary" ban on roofing material waslifted recently.
Table III.3
Prohibited imports, 2000
Product Reason for prohibition
Opium and Chandu For health reasons
The "SALK" polio vaccine For health and security reasons
Java sparrows Protection of wildlife species
All prohibitions under any order under the Sedition Enactment (Cap. 24) or the
Undesirable Publications Enactment (Cap. 25)For security reasons
Pigs bred in or exported from Thailand To prevent the introduction of animal
diseases into Brunei Darussalam
Fabrics of tissues consisting of any fibre whatsoever and of any other article whatsoeverwhich fibre or tissue or other articles bear the imprint of any currency note, bank note or
coins which are or have not at any time been issued or current, in any other country
whatsoeverFor security of the monetary system
Fire crackers (known as "double bangers") For safety and security reasons
Vaccines of Chinese Taipei origin To ensure diseases are not caused by
improperly produced vaccines
Arms and ammunitions For safety and security reasons
Source: First Schedule of the Customs (Prohibition and Restriction on Imports and Exports) Order, 1 November 1995;  and
APEC (2000), Brunei Darussalam - Individual Action Plan .
(b) Import restrictions and licensing
30. Brunei maintains import restrictions mainly for health, sanitary and phytosanitary and moral
reasons.  Products included are plants and animals, poisons, radioactive material, and alcohol(Table III.4).  All imported eggs must be marked with the word "imported" on the shell of the egg, to
identify the source of supply, thereby preventing illegal cross-border movements of eggs of unknown
sanitary status and to ensure conformity with the sanitary and food safety requirements of the
Veterinary Authority and the Ministry of Health.  Imports of salt, sugar, and rice paddy are restricted
to maintain security of supplies and for price stability as well as to ensure long-term sustainablesupplies and market stability.  Imports of used motor vehicles of five years and older are restricted for
road safety reasons.  Although according to the legislation milk is still listed as a restricted import,
                                                     
18 Vaccines for veterinary use may, however, be im ported from Chinese Taipei subject to conformity
with scientific requirements, including efficacy, purity, safety and their relevance in the domestic context, of the
Veterinary Authority.WT/TPR/S/84 Trade Policy Review
Page 44
during the course of this Review the authorities stated that this was no longer the case.  The
authorities also state that importers of mineral wa ter are required to obtain an "import application
permit" with random samples being subject to examination by the Ministry of Health;  however, in
view of the regional economic crisis, all new registrations by importers of natural mineral water have
been frozen for two years and will be reviewed in 2001.  Import permits for salt, sugar, and rice paddy
may be obtained from the Department of Information Technology and State Stores;  import permitsfor used vehicles are issued by the Land Transport Department.  In all cases, the importer must also
submit the import permit to the Royal Department of Customs to obtain an admission permit (AP) in
order to import.
Table III.4
Restricted imports, 2000
Product Reason for restriction Authorizing agency
Eggs for hatching purposes and fresh eggs unless such eggs
are clearly stamped with non-erasable ink or similar
substance with the word "IMPORTED" on the shell of each
eggFor health reasons Agriculture Department,
Ministry of Industry and
Primary Resources
Any living plant or planting material, including from Sabahand SarawakTo prevent the introduction of exotic
plant diseases into Brunei DarussalamAgriculture Department,
Ministry of Industry and
Primary Resources
Live cattle, poultry and birds, including from Sabah and
SarawakTo prevent the introduction of animal
diseases into Brunei DarussalamAgriculture Department,
Ministry of Industry and
Primary Resources
Pin tables, fruit machines, slot machines and any othermachines of like nature whether involving an element of
chance or notTo prevent illegal gambling activities Ministry of Home Affairs
Poisons and deleterious drugs For health reasons Narcotics Control Bureau
Rice paddy and the products thereof For security of supplies and price
stabilityDepartment of Information
Technology and State Stores,
Ministry of Finance
Separated, skimmed or filled milk For security of supplies and price
stabilityDepartment of Information
Technology and State Stores,
Ministry of Finance
Persian glue For health reasons Ministry of Health
Poh Ka, Poh Kah or Poh Kau;  Liow Ko, Ch'ow Ko To prevent illegal gambling activities Ministry of Home Affairs
Sugar For security of supplies and price
stabilityDepartment of Information
Technology and State Stores,
Ministry of Finance
Salt For security of supplies and price
stabilityDepartment of Information
Technology and State Stores,
Ministry of Finance
Converted timber For security of supplies and price
stabilityForestry Department, Ministry
of Industry and Primary
Resources
Used and reconditioned vehicles (5 years or older)including motorcars, motorcycles, lorries, omnibuses,tractors and trailersFor safety reasons Royal Customs and Excise
Department, Ministry ofFinance
Any radio-active materials For safety reasons Ministry of Health
Rhinoceros horn and all other parts of or products derivedfrom the carcass of a rhinocerosCITES Department of Museums
Beef, including the carcass of the animal or any part
thereof, the meat (whether frozen, chilled or fresh), bones,hide, skin, hooves, horns, offal or any other part of the
animal or any portion thereof, unless it has been
slaughtered in an abattoir approved in writing by the
Minister of Religious AffairsFor religious reasons Ministry of Religious Affairs;
Ministry of Health;  andDepartment of Agriculture,
Ministry of Industry and
Primary Resources
Table III.4 (cont'd)Brunei Darussalam WT/TPR/S/84
Page 45
Product Reason for restriction Authorizing agency
Poultry, including the carcass of the bird or any part
thereof, the meat (whether frozen, chilled or fresh), bones,skin, offal or any other part of the animal or any portion
thereof, unless it has been slaughtered in an abattoir
approved by the Minister of Religious AffairsFor religious reasons Ministry of Religious Affairs;
Ministry of Health;  andDepartment of Agriculture,
Ministry of Industry and
Primary Resources
Alcoholic beverages Banned imports Royal Customs and Excise
Department, Ministry of
Finance
Source: Second Schedule of the Customs (Prohibition  and Restriction on Imports and Exports) Order, 1 November 1955
and subsequent amendments;  APEC (2000), Brunei Darussalam - Individual Action Plan;   and information
provided by the authorities.
31. In addition to restricted imports, a number of products, including telecommunications
equipment, medical products, live plants and animals, rice, sugar, salt, skimmed milk, mineral water,
and used cars over five years old, may be imported under licence (Table III.5).  In general, according
to the authorities, the main distinction between restricted and licenced imports is that while the
importation of restricted imports requires a permit from the relevant government agency as well as an
admission permit (AP) from Customs, licenced imports require only a licence from the relevantgovernment agency.  Other than this distinction, the procedure for obtaining permission to import
these products is the same for restricted and licensed imports.
19
Table III.5
Imports subject to licensing
Product Reason for restriction Licensing authority
Live plants, live cattle, seeds for germinating, birds and
any other animalsTo prevent introduction of exotic
plant diseases into BruneiDarussalamDepartment of Agriculture, Ministry
of Industry and Primary Resources
Commercial shipments of fruit and vegetables For health reasons Department of Agriculture, Ministry
of Industry and Primary Resources
Any live insects, invertebrate animals in any stage oftheir life cyclesTo prevent introduction of animal
diseases into Brunei DarussalamDepartment of Agriculture, Ministry
of Industry and Primary Resources
Meat, meat products and edible offal (including poultrymeat and its products)For health and religious reasons Department of Agriculture, Ministry
of Industry and Primary Resources;
Ministry of Religious Affairs;
Ministry of Health
Fish and any other marine products except those listedunder CITESTo regulate and to ensure
adequate protection of marineresourcesDepartment of Fisheries, Ministry of
Industry and Primary Resources
Prawn, crab, cuttle-fish and any kind of crustaceans andmolluscsTo regulate and to ensure
adequate protection of marine
resourcesDepartment of Fisheries, Ministry of
Industry and Primary Resources
Piranha and Arawana To regulate and to ensure
adequate protection of marineresourcesDepartment of Fisheries, Ministry of
Industry and Primary Resources
Fishing equipment To regulate and to ensure
adequate protection of marineresourcesDepartment of Fisheries, Ministry of
Industry and Primary Resources
Timber, classes 1A, 1B, 1C, Nibong, Rotans, convertedtimberFor security of supplies and price
stabilityDepartment of Forestry, Ministry of
Industry and Primary Resources
Table III.5 (cont'd)
                                                     
19 In light of this, it is not clear to the Secretaria t why there is an overlap between the list of imports
subject to licensing and those subject to restrictions (e.g . imports of rice, sugar, salt, converted timber, and used
motor vehicles appear to be both restricted and licensed).WT/TPR/S/84 Trade Policy Review
Page 46
Product Reason for restriction Licensing authority
Rice, sugar, salt and skimmed milk For security and supplies and
price stabilityDepartment of Information
Technology and State Stores,Ministry of Finance
Deleterious drugs For health reasons Medical Department,
Ministry of Health
Any kind of chemical substances For health reasons Medical Department,
Ministry of Health
Agricultural chemicals For health reasons Medical Department,
Ministry of Health
Poisons For health reasons Medical Department,
Ministry of Health
Antiseras and vaccines For health reasons Medical Department,
Ministry of Health
Printed media For security reasons Royal Brunei Police Force;
Ministry of Religious Affairs;Ministry of Home Affairs
Used or reconditioned vehicles over five years old,including motorcars, motorcycles, motor lorries,omnibuses, tractors and trailersFor safety reasons Department of Land Transport,
Ministry of Communications;
Royal Customs and Excise
Department, Ministry of Finance
Radio communication apparatus and dealers, radarapparatus—remote control such as for motor car, racingcar and boatFor security reasons Department of Telecommunications,
Ministry of Communications
Wireless telephone – walkie talkie, pagers, mobile radiotransmitters, amateur and hand transceiverFor security reasons Department of Telecommunications,
Ministry of Communications
Radio transmitter and transmitter receiver For security reasons Department of Telecommunications,
Ministry of Communications
Aeronautical communications apparatus for use inaircraft and aviationFor security reasons Department of Telecommunications,
Ministry of Communications
Maritime radio communications apparatus for use incoastal and shipping communicationFor security reasons Department of Telecommunications,
Ministry of Communications
Telecommunications fixed line set dealers such asdomestic telephone setsFor security reasons Department of Telecommunications,
Ministry of Communications
Arms, explosives, fireworks/crackers For security reasons Royal Brunei Police Force
Antiques and articles of a historical nature made ordiscovered in Brunei Darussalam, and wild lifeTo protect national heritage Brunei Museums
Source: APEC (2000), Brunei Darussalam - Individual Action Plan;  and information provided by the authorities .
32. Import licences may be granted to persons domiciled and working in Brunei and having a
business licence.  No specific documents are required to apply for a permit or a licence, although forsome products prescribed forms may be required from the relevant authority, including Customs.  The
primary purpose for requiring licences for these products, according to Brunei's notification to the
WTO, is to safeguard health, national security and morals, although in the course of this Review, the
authorities stated that domestic food security is also an objective.
20  The licences, which must be
obtained prior to importation, are issued every six months and are valid for a period of six months.
All licence applications must be renewed each six month to one year.  Once issued, the licence may
not be transferred to another importer.  They are not subject to an overall annual import quota, with
the exception of poultry and beef.  Annual imports of beef and poultry depend on several factors
including seasonal supply and demand, storage (including refrigeration) and holding facilities for
animals, satisfying Halal requirements, and balancing domestic production.  In 1999, Brunei imported2,059 tonnes of chicken meat and around 2,174 tonnes of beef.  For used motor vehicles, a maximum
of two units per applicant are allocated over a four-year period.
                                                     
20 WTO document G/LIC/N/3/BRN/1, 10 April 1997.Brunei Darussalam WT/TPR/S/84
Page 47
33. According to Brunei's APEC Individual Action Plan, 2000, Brunei maintains no import
quotas, tariff quotas or voluntary import restraint agreements.
(vii) Other charges affecting imports
(a) Excise tax
34. Brunei's legislation on excise taxes is contained in the Excise Act (amended in 1984), which
allows the Sultan of Brunei, in Council, to impose and revoke excise taxes on any goods deemedappropriate.  At present, it appears that excise taxes of B$5 per gallon are imposed on locally
produced Samsoo (including medicated Samsoo) liquor.
21  In comparison, imports of Samsoo face
customs duties at rates of B$90 and B$120 per decalitre, respectively, for bottled Samsoo not
exceeding 70 degrees of proof spirit, and for other kinds of Samsoo.22
(b) Other charges
35. There are no other domestic taxes or charges that may affect imports differently from
domestically produced goods at present.
(viii) Contingency measures
(a) Anti-dumping and countervailing measures
36. Brunei informed the WTO Secretariat that it has no domestic antidumping legislation or
regulations23;  consequently, no anti-dumping measures have been taken or initiated by the
Government of Brunei since 1995.
37. Brunei also notified the Committee on Subsidies and Countervailing Measures that it has no
laws and/or regulations relevant to the Agreement.24  No countervailing measures have been taken
since 1995.
(b) Safeguards
38. Brunei notified the WTO Secretariat that it has no domestic legislation and regulations
governing safeguard measures under Article 12.6 of the Agreement on Safeguards.25  No safeguard
measures are currently in force nor have any been taken since 1995.
(ix) Standards, and sanitary and phytosanitary measures
(a) Standards
39. There is no national body for setting standards in Brunei.  However, the Construction
Planning and Research Unit (CPRU) based in the Ministry of Development is the focal point for
standards and conformity assessment activities.
                                                     
21 Excise (Duties) Notification Schedule.
22 Customs Tariff, 2000.  The tariff lines are HS 220890110 and 220890190, respectively.
23 WTO document G/ADP/N/1/BRN/1, 21 November 1996.
24 WTO document G/SCM/N/1/BRN/1, 18 March 1997.
25 WTO document G/SG/N/1/BRN/1, 21 November 1996.WT/TPR/S/84 Trade Policy Review
Page 48
40. National standards, which are prepared by Technical Committees, are submitted for approval
to the Standards Committee, which is chaired by the Minister of Development.  Technical
Committees currently exist for the construction sector only, including for timber, roads, iron and steel,
concrete, locally manufactured building products such as bricks and cement, and quality management
systems.  According to the authorities, it is the policy of the Technical Committees to adopt
international standards, where relevant;  there is also an ongoing review of the alignment of nationalstandards with the existing relevant international standards in line with the ISO/IEC Guide 21, 1999.
Following examination by the Standards Committee,  the standard is sent for comment to the
Standards Secretariat at the CPRU for public comment (the period for comment is usually six weeks),
and, if there are comments from the Standard s Committee, to the Technical Committees for
re-drafting.  All public comments are also sent to the Technical Committees for incorporation in thestandard (Chart III.8).
Chart III.8
Overview of standards and co nformity assessment activities in the Ministry of 
Development
Construction Planning 
 and Research UnitMinistry of Development
Ministry of 
Development 
Laboratory 
Accreditation Scheme
(9 laboratories 
accredited)Programme for the 
Reco gnition of Com petent 
Certification Bodies
(1 body recognized)Standardization
(27 standards issued)Quality Management 
System Consultants and 
Training Scheme
(5 companies registered)Product Certification 
Scheme
(voluntary scheme - 
certification covers onl y 
construction materials)
Source :  Information provided by the authorities of Brunei Darussalam.
41. There are currently 27 voluntary, construction-related standards in Brunei Darussalam
(Piawai Brunei Darussalam:  PBDs);  these are for quality management, steel reinforcement, cement,
concrete, timber and roads (Table III.6).  Of these 27 standards, 32% are equivalent to ISO standards;
whereas there are no internationally equivalent standards for 37%.  In addition, guidance documents
(GDs) and guidance specifications  (GSs) in these areas have been published by the Technical
Committees;  at present, there are 17 GDs, 8 GSs and 8 other guidelines.  Standards for electrical andelectronic goods, gas appliances, and fire equipment are currently voluntary.  These must be based on
International Organization for Standardization (ISO) standards, where international equivalents exist.
42. Other than setting standards for construction in Brunei, the CPRU also monitors testing and
conformity carried out by eight testing laboratories associated with the construction industry in Brunei
using the ISO Guide 25;  the laboratories are accredited by, and registered with, the Ministry ofBrunei Darussalam WT/TPR/S/84
Page 49
Development.  There are also two accredited laboratories for products related to gas and defence.
Brunei is currently negotiating an arrangement with  the Singapore Accreditation Council to utilize its
accreditation services.  In addition, there is a certification body that provides certification for quality
management and environmental management standards.  The product certification scheme, which is
not mandatory, covers only construction materials;  it is also administered by the CPRU.  Brunei does
not have a quality mark.
Table III.6
Brunei Darussalam standards, 1995-2000
(Units and per cent)
1995 1996 1997 1998 1999 2000
Total number of standards 16 16 18 22 25 27
Per cent
Per cent equivalent to ISO standards 31 31 28 32 32 32
Per cent equivalent to IEC standards 0 0 0 0 0 0
Per cent for which no internationally
equivalent standards are available31 31 33 37 37 37
Source: Data provided by the authorities.
43. Brunei's technical regulations are more administrative than technical.  According to the
authorities, Brunei has little industry other than petroleum and construction;  petroleum is dominatedby multinational companies with their own testing faci lities and standards.  Thus, industries in Brunei
tend to rely on third-party certification;  although the Ministry of Development is actively promoting
the adoption of ISO 9000/ISO 14000 certification for th e construction industry, these are voluntary
programmes at present.  There are presently no product liability laws and market surveillance systems
in Brunei, except on Halal foods.  Brunei al so has no national measurement and metrology centre,
although the administration of weights and measures for commercial activities is carried out by the
Weights and Measures Department.  Brunei makes use of measurement systems used in other
countries;  measurement and metrology facilities in Singapore (PSB) and Malaysia (SIRIM) are used
frequently by Brunei's laboratories in their calibration activities.
44. Brunei is a member of several international and regional standard-setting fora including the
ISO, WHO, Codex, the ASEAN Consultative Committee on Standards and Quality (ACCSQ), the
ASEM-EU Economic Cooperation scheme on Standards and Quality,  the ASEM Trade Facilitation
Action Plan, the APEC Sub-Committee on Standa rds and Conformance, and the Asia-Pacific
Laboratory Accreditation Cooperation scheme.
(b) Sanitary and phytosanitary measures
45. Brunei's national notification authority for sanitary and phytosanitary measures is the
International Relations and Trade and Development Division in the Ministry of Industry and Primary
Resources.
26
46. Phytosanitary regulations are implemented by the Plant Quarantine Unit of the Department of
Agriculture, in the Ministry of Industry and Prim ary Resources, under the Agricultural Pests and
Noxious Plants Act, 1962.  Under the Act, imports of all plants and plant materials require import
permits, issued by the Department of Agriculture, and phytosanitary certificates, issued by the legal
                                                     
26 WTO document G/SPS/GEN/35, 6 October 1997.WT/TPR/S/84 Trade Policy Review
Page 50
issuing authority in the country of origin, certifying the phytosanitary status of the plants.27  Imports
of a number of plants from specific regions or countries are prohibited (Table AIII.3).  All plant
imports are subject to inspection by the Department of Agriculture on arrival in Brunei.  Imports of
soil, whether by itself or attached to plant roots, are prohibited.  Phytosanitary certificates for exports
of agricultural materials may be obtaine d from the Department of Agriculture.
47. Domestically produced agricultural products are also subject to these regulations, and
inspection of all agricultural premises may be carried out at any time by an inspecting officer of the
Plant Quarantine Unit under the Agricultural Pests and Noxious Plants Act, 1962.  Any decision taken
by the inspecting officer may be appealed in writing to the Minister of Industry and Primary
Resources, under Section 8 of the Act, within 14 days from the service of notice of action.  The
Minister must respond within seven days of receipt of the application.
48. Under the Quarantine and Prevention of Disease (Animals) Regulations, all dogs, cats, and
related species brought into Brunei must be accompanied by a veterinary health certificate and a
certificate from the veterinary authority of the exporting country declaring that the exporting country
has been free from rabies for a period of six months prior to the date of export of the animal.  All
imports of live animals may be subject to veterinary inspection at the border and, with the exceptionof animals imported from Australia, Ireland, New Zealand, Sabah, Sarawak, Singapore, the
United Kingdom, and other countries that are free from rabies, may be subject to quarantine for six
months from the time of arrival.
28  Importers of live animals are required to obtain import permits
stating the regulations to be applied to each consig nment, prior to import;  these permits are issued by
the Veterinary Office of the Department of Agri culture of the Ministry of Industry and Primary
Resources.29  Exports of live animals and poultry must be accompanied by a veterinary health
certificate;  in some cases when a veterinary health certificate is required for exports of productsderived from animals,  the Contagious Veterinary O ffice may grant an Animal Health Certificate after
confirming that the animal is healthy and free from contagious diseases.
30
49. Imports of beef and poultry are subject to import restrictions under the Second Schedule of
the Customs (Prohibition and Restriction on Imports and Exports) Order, unless they have been
slaughtered in a foreign abattoir approved in writ ing by the Minister of Religious Affairs.  The
Government provides a list of approved abattoirs from which meat or poultry may be imported into
the country by holders of Halal import permits under the Emergency (Halal Meat) Order, 1998.
Under the Order, the Board for Issuing Halal Import Permits grants the permit if the slaughterhouse is
already on a list approved by the Majlis Ugama Islam31;  for slaughterhouses not on the list, an
inspection committee, including representatives from the Ministry of Religious Affairs, the Majlis,
                                                     
27 Import permits issued by the Department are valid for six months and the importer must obtain a
separate permit for each consignment.  Phytosanitary certificates issued by the country of origin are valid for14 days (Plant Quarantine Services, 1993).
28 The quarantine requirement may be waived by the Veterinary Authority on a case by case basis
(Agricultural Department, 1973).
29 The importation or trans-shipment of all horses, asses and mules into Brunei is prohibited, unless
they are imported or trans-shipped directly from Australia, New Zealand, the State of Sabah, or theUnited States (Quarantine and Prevention of Disease (Animals) Regulations).
30 Quarantine and Prevention of Disease (Exportation of Animals) Regulations.
31 The Board is chaired by the Controller of Customs and its members include representatives from the
Ministry of Religious Affairs, Medical and Health Services, the Department of Agriculture, and the Majlis
(Article 3 of the Emergency (Halal Meat) Order, 1998, Constitution of Brunei Darussalam, Order under
Section 83(3)).Brunei Darussalam WT/TPR/S/84
Page 51
and the Department of Agriculture is required to inspect and approve the abattoir.  The Board
forwards the application to the Majlis who makes the final decision on issuing the import permit.32
50. Other sanitary and health restrictions are maintained under the Poisons Act and the Misuse of
Drugs Regulations, which are enforced by the Pharmaceutical Enforcement Services, in the Ministry
of Health.  This includes regulation of all imports and exports of pharmaceuticals, chemicals, agri-
chemicals, pesticides, etc. with assistance from the Department of Customs, and regular inspections of
companies, clinics, and retailers in Brunei.33  Imported and domestically produced veterinary
pharmaceuticals, animal vaccines, and agri-chemicals are controlled and inspected by the Department
of Agriculture.  The Drug Quality Control Service also inspects all drugs, both locally produced and
imported, to ensure quality.
(c) Labelling and marking34
51. Brunei's legislation on food labelling requirements is contained in the Emergency (Public
Health) (Food) Order, 1998, which came into force in January 2001.  Labels for food products must
contain the following information either in Malay or English or a translation into Malay or English:
name of food, list of ingredients, net/drained co ntent, name and address of manufacturer, packer,
wholesaler, importer and distributor, the country of origin, lot identification, date and storageinstructions, and instructions and date for use.
35  In cases where a suitable common name for the food
product is not available, a description to indicate the nature of the food is required.36  All imports of
meat and products containing meat must conform to  labelling requirements approved by the Board for
Issuing Halal Import Permits.37  For food with animal or alcohol content, the origin of the animal or
alcohol product must also be indicated.  In addition, the content of all meat products should be clearly
mentioned on the label.  All imported eggs must be clearly marked "imported" to distinguish them
from locally produced eggs (section (vi)(b)).
52. Brunei does not have any labelling requirements for genetically modified foods.
(x) Government procurement
(a) Overview
53. Brunei is not a signatory to the WTO Government Procurement Agreement (GPA).  The main
legislation with regard to government procurement is the Financial Regulations, 1983, aimed atmaintaining equity, integrity and efficiency in the tendering process.
38  Purchases not exceeding
B$25,000 may be carried out without a public tendering pr ocess;  nevertheless, if the total cost of the
purchase is expected to exceed B$2,000, the Controlling Officer (the Permanent Secretary or
Director) is encouraged to invite written quotations from at least three qualified suppliers that are
registered with the Registrar of Companies in the Legal Department, Prime Minister's Office, and
                                                     
32 Article 3 of the Emergency (Halal Meat) Order, 1998.
33 Ministry of Health (undated).
34 Unless otherwise indicated, this section is based on information obtained from APEC (1998).
35 Printed letters on food labels should not be less than 1.8 mm in height.
36 Other languages may also be used.
37 Once the importer or local slaughter house has obtained the necessary permit and Halal certificate
from the Board, the product must carry the Halal label wh en sold in Brunei (Articles 4 and 5, respectively, for
imports and domestically supplied meat of the Emergency (Halal Meat) Order 1998).
38 APEC (1996).WT/TPR/S/84 Trade Policy Review
Page 52
have a good track record.39  A Quotation Committee, headed by the Controlling Officer is then
expected to accept the most favourable quotation, most favourable being defined by the authorities as
"value for money at reasonable prices".40  The Committee submits its recommendations to the State
Tenders Board.
54. The recently published report of the Brunei Darussalam Economic Council (BDEC)
recommended the development of a "fast-track" payment, tendering, and bank credit scheme forprojects approved under the Action Plan for Recovery drawn up by the Council;  and the restructuring
of Government contracts by packaging them to facilitate participation by local SMEs.  The Council
also recommended the introduction of a 15% margin of preference in favour of local goods and
services as a condition for projects under the Action Plan.  The status of these recommendations
remains unclear;  it appears that the 15% margin of preference exists but may, in practice, not beapplied.
55. Government approval of tenders has declined in value in recent years from B$730 million in
1997 to B$277 million in 1999.
(b) Tendering procedures
56. For purchases valued at between B$2,000 and B$25,000 the Controlling Officer must invite
an open quotation from all registered suppliers.
41  A Quotation Committee is formed at the relevant
ministry or department, chaired by the Controlling Officer, which examines the offers and makes
recommendations to the Chairman of the State Tenders Board.  The recommendations, once examined
by the Board, are submitted to the Minister of Finance who in turn notifies approval of the award to
the Chairman of the Board with a copy to the Director of Financial Services and the Auditor General.
In cases where the Controlling Officer considers the normal tendering procedure to be inappropriate
because of the nature of the purchase, for example, if the purchase is needed urgently, an applicationmay be made to the Chairman of the Tenders Board to waive the procedure for that particular
purchase.
57. Purchases valued above B$25,000 are examined by the State Tenders Board, based in the
Ministry of Finance.  The Board, which is chaired by the Permanent Secretary at the Ministry, and
includes the Director of Financial Services in the Ministry of Finance, the Director General of thePublic Works Department and the Director of the El ectrical Services Department, both in the Ministry
of Development, and the Director of the Economic  Development and Planning Department in the
Ministry of Finance, is appointed by the Minister of Finance.  Government tenders are published in
the Government newsletter and local newspapers to ensure that adequate publicity is given to the
purchase required.  Suppliers, except foreign companies, must be registered with the CompanyRegistrar in the Legal Department of the Prime Minister's Office.  Tenders are, in general, open to
foreign suppliers as long as they retain a local agent to represent them in Brunei Darussalam.
However, for specialized projects, companies mu st register with the relevant ministries or
departments.  Tenders must be submitted in plain, sealed envelopes, addressed to the Chairman of the
Tenders Board.  The Tenders Board must reach its decision through a majority vote of the quorum ofthe Membership.
42  Among the factors taken into account by the Board in reaching decisions on
procurement, are value for money, after-sales service and technical support, and a good reputation.
                                                     
39 Ministry of Finance.  A good track record in th is case, according to the authorities, is defined as
honouring quoted prices and supplying on time.
40 Regulation 327, Financial Regulations.
41 Ministry of Finance.
42 Government of Brunei (1993).Brunei Darussalam WT/TPR/S/84
Page 53
The Board makes its recommendations to the Controlling Officers for their evaluation;
recommendations made by the Controlling Officers are also considered by the Tenders Board.  The
Board's final recommendations are sent to the Minister of Finance, who then notifies the Chairman of
the Board of his approval.  The Chairman of the Board subsequently notifies the successful bidder(s),
the Director of Financial Services, and the Auditor General;  notification of the award must be made
within 21-23 days of receipt of recomme ndations from the Controlling Officers.
58. All decisions taken by the Board may be appealed by suppliers and must be conveyed in
writing to the Chairman of the Board.  The Board examines all such appeals and its decision is final.
(xi) Import-related operations of state enterprises
59. Brunei has not notified any state trading enterprises to the Secretariat.   Certain products
subject to import restrictions and licensing, such as rice and sugar, are imported directly by theGovernment through the Department of Informati on Technology and State Stores, in the Ministry of
Finance.  In particular, the Department imports much of Brunei's rice through a government to
government contract with Thailand;  the Department also issues import permits for other restricted
products such as salt, although it is not clear which companies currently hold import permits for salt.
Other state trading companies, according to the authorities, are Royal Brunei Catering Sdn Bhd;Mulaut Abbatoir Sdn Bhd;  Royal Brunei Airlines Group of Companies and its subsidiaries;  Royal
Brunei Technical Services Sdn Bhd;  and the DST Group of Companies.
(xii) Other measures
(a) Countertrade
60. No information was available from the authorities concerning countertrade.
(3) MEASURES DIRECTLY AFFECTING EXPORTS
(i) Procedures
61. To be eligible to export, exporters must register with the Ministry of Industry and Primary
Resources and the Royal Customs and Excise Depa rtment.  The documentation required for exports
includes an export declaration for customs, invoice, packing list, and certificate of origin.  An SPS
certificate, an export licence, and other documents required by the relevant authorities are required for
restricted exports, under the Quarantine and Prevention of Disease (Animals) Regulations and theAgricultural Pests and Noxious Plants Act, 1962.
62. As in the case of imports, appeals against decisions taken by the Royal Customs and Excise
Department may be made to the Sultan, under section 134 of the Customs Act, unless it is specifically
stated that the Controller of Customs has absolute discretionary powers to make customs decisions.
The decision taken by the Sultan is final.
(ii) Export prohibitions, restrictions, and licensing
63. Export prohibitions are maintained for prawn refuse and copra cake to ensure adequate
domestic supply of these products (Table III.7).  E xports of a few products, including timber, oil
palm, rice, and sugar are restricted.  In the case of rice and sugar, whose prices for consumers are
subject to ceilings, export restrictions appear to be intended to ensure adequate domestic supply and atthe same time avoid international arbitrage.  The stated purpose of the restrictions on exports of
timber and oil palm is to ensure adequate domestic supplies, and, for timber, also ostensibly forWT/TPR/S/84 Trade Policy Review
Page 54
environmental reasons;  the export restraint on timber may, in effect, constitute an input subsidy to
domestic wood processors, as exports are diverted onto the home market, thereby reducing the
domestic price of timber.  Under the Customs Order (Prohibition and Restriction on Imports and
Exports) (Amendment) 1978, export licences are required for cigarettes, diesel, gasoline, kerosene,
and salt.43  As in the case of restricted and licensed imports, the authorities state that, in general, there
is no distinction between restricted and licensed  exports.  Licences may be obtained upon fulfilment
of certain requirements including local content, packaging and labelling requirements and other terms
and conditions applied by the relevant authorities.  No details were available on the major exporters of
restricted and licensed products.
Table III.7
Prohibited and restricted exports, 2000
Product Reason for prohibition or restriction/licensing agency
Prohibited export
Prawn refuse and copra cake To ensure adequate supply
Restricted exports
Articles of an antique or historical nature
made or discovered in BruneiTo preserve national heritage/Department of Museums
Derris species (Tuba) To protect wildlife/Department of Agriculture, Ministry of Industry and Primary Resources
Elaeis quinaesis (oil palm) To ensure adequate supply/Department of Agriculture, Ministry of Industry and Primary
Resources
Rice, paddy and products thereof To ensure adequate supply/Department of Information Technology and State Stores
Timber Class 1A, IB, IC, Nibong, Rotaus To ensure adequate supply/Forestry Department, Ministry of Industry and Primary
Resources
Sugar For security of supplies and price stability/Department of Information Technology and
State Stores, Ministry of Finance
Source: Third and Fourth Schedules, The Customs (Prohibition and Restriction on Imports and Exports) Order,
1 November 1995 and subsequent amendments.
(iii) Export taxes, charges, and levies
64. Brunei has no export taxes or other charges on exports.
(iv) Duty and tax concessions
(a) Drawbacks
65. Provisions for duty drawback are made und er Part X of the Customs Law (as amended
in 1984), which allows repayment of nine-tenths of the import duties paid if the goods are re-exported
without transformation within 12 months of payment of the import duty and if each consignment isnot less than B$100 in value.
44
66. Imported goods that have subsequently been used in the manufacture of export items may
also be eligible for drawback under certain c onditions, including that the exported goods are
manufactured on premises approved by the Controller of Customs and that the goods are re-exported
within 12 months from the date of importation.45  Drawback is also permitted for personal effects and
                                                     
43 IMF (2000).
44 Article 84(1), Part X of the Customs Law.  An additional requirement is that the goods must not be a
prohibited export.
45 Article 89 of the Customs Law.Brunei Darussalam WT/TPR/S/84
Page 55
other goods imported by visitors for their personal use in Brunei and for trade samples, if the imported
goods are re-exported within three months from the date of importation.  Annual data on duty forgone
as a result of duty drawback were not available.
(b) Other tax concessions and subsidies
67. Although Brunei has no other explicit tax concessions and subsidies for exports, tax rebates
may be available to companies under the Pioneer Status programme if they invest in industries thathave bright export prospects (sections (c) and (4)(ii)(a) below).
(c) Performance requirements
68. According to the authorities, Brunei has no lo cal-content or other performance requirements.
However, companies may be eligible for tax rebates under the Pioneer Status programme if they
invest in industries with favourable export prospect s;  in addition, during the course of this Review,
the authorities indicated that a required percentage of Brunei content may be specified for pioneer
companies (section (4)(ii)(a) below).
46
(d) Export-processing zones
69. The Muara Free Trade Zone or Export Zone is situated outside Brunei's main port, the Muara
Port.  The zone was developed mainly to promote and develop Brunei as a regional trade hub, andespecially to promote the BIMP-EAGA region (Chapter  II (4)(ii)(d) and section (4)(ii)(d) below).  It
provides infrastructure and other facilities in order to attract investment from the private sector.
47  In
addition, cargo entering the free-trade zone is not subject to taxes unless it enters Brunei.48
Information on activities other than storage and trans-shipment in the free-trade zone was notavailable.
(v) Export operations of state enterprises
70. No information was available to the Secretariat on exports by state enterprises.  Petroleum
and natural gas are exported by Brunei Shell Marketing, jointly owned by the Government of Brunei
and Brunei Shell Petroleum.49  It is not clear which companies are involved in the export of restricted
items including timber, oil palm, rice and sugar, cigarettes, and salt.
(vi) Other export assistance
71. No information was available to the Secretariat on export finance, insurance, and guarantees,
if any, or on export promotion and marketing assistance.
(vii) Measures maintained by importing countries
72. Since 1995, no anti-dumping, countervailing or sa feguard measures have been taken by WTO
Members against imports from Brunei.
                                                     
46 One of the conditions for granting Pioneer Status is that there appear to be favourable prospects for
export-oriented development of that industry (Ministry of Development, undated b).
47 Ports Department (undated a).
48 Ports Department (1999).
49 The Government holds a 50% share in Brunei Shell Petroleum.WT/TPR/S/84 Trade Policy Review
Page 56
(4) MEASURES AFFECTING PRODUCTION AND TRADE
(i) Legal framework for businesses
73. All companies intending to do business in Brunei must be registered with the Registrar of
Business Names or Registrar of Companies under the Business Act and the Companies Act,
respectively, both based in the office of the Attorney General of Brunei.  Business premises are
required to be licenced under the Miscellaneous Licences Act (Cap 127).
74. A business may be established under one of four categories:  sole proprietorship, partnership,
company, or branch of foreign company.  Sole proprietorships and partnerships may have a maximum
of 20 partners and may also be required to register with the Registrar of Business Names.  Foreign
individuals may hold equity in partnerships bu t may not register as sole proprietorships.50  Companies
formed as partnerships or proprietorships are not subject to corporate tax in Brunei, which is normally30%.
51  Foreign companies are required to register under section 229 of the Companies Act.
75. Incorporation of a company in Brunei is subject to the Companies Act (Cap 39) and may
include four types of companies, either private or public:  companies limited by shares;  companies
limited by guarantee;  companies limited by both shares and guarantees;  and unlimited companies.52
At least half the directors of a company incorporated in Brunei must be either nationals of Brunei or
ordinarily resident in Brunei.53  Registration of the company by the Registrar may take place after the
compliance conditions imposed by the Government have been fulfilled.54  Registration fees are
graduated depending on the authorized share capital of the company.55
(ii) Incentives
(a) Tax incentives
76. Brunei has no personal income tax.  Corporate income taxes are levied at rates of 55% for
petroleum companies under the Income Tax (Petroleum) Act, 1963 as amended, 50% for natural gascompanies, and 30% for all other companies.
56  Petroleum and natural gas companies pay tax on a
quarterly basis, while all other companies pay taxes annually.  Other taxes include stamp duty on
documents, a withholding tax of 20% on interest paid to non-residents, a 3% estate duty for estates
valued at over B$2 million, in the case of persons deceased on or after 15 December 1998, and a
building tax with rates varying up to 12% of the value of building.
                                                     
50 Prior immigration clearance from the Immigration Department is required for foreign individuals to
register (Borneo Bulletin, 2000).
51 Ministry of Industry and Primary Resources (undated a).
52 The main difference between private and public companies is that while public companies may issue
freely transferable shares to the public, members of private companies must not exceed 50 and are restricted
from transferring or trading shares;  in addition public  companies must have at least seven shareholders while
private companies are required to have at least two shareholders, not necessarily citizens or residents of Brunei.
53 Ministry of Industry and Primary Resources (undated a).
54 Ministry of Industry and Primary Resources (undated a).
55 For example, according to the Business Guide prov ided by the Ministry of Industry and Primary
Resources, a company with an auth orized capital not exceeding B$25,000 is charged a registration fee of B$300
exclusive of additional charges for filing documents.
56 Only companies incorporated in Brunei are liable to corporate tax.  Non-resident companies are
taxed only on income arising in Brunei.Brunei Darussalam WT/TPR/S/84
Page 57
77. In order to attract investment to certain targeted sectors, the Government provides a number
of tax exemptions (Table III.8).  Companies granted a Pioneer Certificate are exempted from payment
of corporate tax for a basic period of two to five years, depending on levels of fixed capital
expenditure.  The period of tax exemption may be extended by three years if the Board is satisfied that
the company has spent the minimum capital expenditure  required under the terms of the original tax
relief.57  In addition, according to the authorities, tax exemptions may be extended if:  the company
has a pioneer factory in operation;  it produces, in marketable quantity, any priority manufactured
products or has established any priority industry;  or it incorporates in its manufactured products the
required percentage of local content, as specified.
Table III.8
Tax exemptions and concessions, 2000
Scheme Eligibility Exemptions (incentives) Authority
Corporate
tax
exemptionsPayable by companies resident in
Brunei on income accruing in,
derived from, or receivable inBrunei.  Non-resident companies
are taxed only on income arising in
Brunei.  Sole proprietorships and
partnerships are not subject to tax.All expenses incurred in the production of taxable income
are allowed to be deducted for tax purposes.  This includes
interest on borrowed money used in acquiring income;  renton land and buildings used in trade or business;  costs of
repair on premises, plant and machinery;  bad debts;
employers contributions to approved pension or providentfunds.
For petroleum and gas companies, royalties are deductible
for tax purposes.Wear and tear allowances may also be claimed including for
industrial buildings for which an initial allowance of 10% is
given in the year of expenditure and an annual allowance of2% of the qualifying expenditure on a straight line basis
until the total expenditure is written off;  an initial allowance
of 20% of the cost of purchasing machinery and the plant isgiven in the year of expenditure with annual allowances
calculated on the reducing value of the assets from 3% to
25%;  balancing allowances in the year of depreciableassets;  carry forward of capital allowances unused at the
end of the tax relief period may be applied against post
pioneer profits;  losses arising from trade business, a
profession or vocation in a base period may be offset against
the statutory income of that period;  carry forward of
unabsorbed losses allowed for five years...
Pioneer
SchemeAny activity not being carried out in
Brunei on a commercial scale
suitable for the economicrequirements or development of
Brunei or at all;  favourable
prospects for further developmentof exports;  development of the
industry is expedient in the public
interestExemption from payment of corporate tax of 30% for a
basic period of two to five years:
- Two years for fixed capital expenditure of less than 
B$250,000;
- Three years for fixed capital expenditure of 
between B$250,000 and B$500,000;
- Four years for fixed capital expenditure of  
between B$500,000 and B$1 million;  and
- Five years for fixed capital expenditure of above 
B$1 million
The scheme may be extended for a further three years if theBoard is satisfied that the minimum required capital
expenditure has been incurred by the company.Economic
Development
Board in theMinistry of
Industry and
Primary
Resources
Expansion of
enterprisesCompanies already established in
Brunei wishing to expand theirproduction if this is deemed
beneficial to Brunei and expedient
in the public interestExemption from payment of corporate tax of 30% for
between three and five years depending on the level of newcapital expenditure:
- Three years for new capital expenditure of up to 
B$250,000;  and
- Five years for new capital expenditure of more than 
B$250,000Economic
DevelopmentBoard in the
Ministry of
Industry andPrimary
Resources
Table III.8 (cont'd)
                                                     
57 Investment Incentives Act, Chapter II, Article 13(2).WT/TPR/S/84 Trade Policy Review
Page 58
Scheme Eligibility Exemptions (incentives) Authority
Approved
foreign loanFor loans under B$250,000 in value
used to purchase productionequipment and if the credit facilities
are obtained through a foreign
lending companyExempt from a 20% withholding tax Economic
DevelopmentBoard in the
Ministry of
Industry andPrimary
Resources
.. Not available.
Source: Investment Incentives Act;  and information provided by the authorities.
78. Pioneer companies are also exempt from payment of customs duty on imports of plant,
machinery, and equipment to be installed in the pioneer factory, as well as for imported raw materials,
provided these are not available or produced in Brunei.  As of mid 2000, 21 companies, including
cement mills, shipyards, and clothing companies had been granted Pioneer Status by the Economic
Development Board (EDB) (Table III.9).  All companies wishing to invest in these industries may
apply for a Pioneer Certificate.  In addition, Pioneer Certificates have previously been granted for
aircraft catering services, industrial chemicals, canning, bottling and packaging.  According to the
authorities, Pioneer Status, once granted to a pioneer industry, never expires.
Table III.9
Pioneer Status companies granted incentives under the Investment Incentives Act, July 2000
Name Industry Date commencedTax exemption
period (no. of years)
Dairy Farm Sdn Bhd Aircraft catering 22 March 1977 4
Kuala Belait Shipyard Sdn Bhd Shipyard 24 July 1978 5
Malaco Chemical Sdn Bhd Industrial chemicals 20 September 1982 2
Brutex Manufacturing Sdn Bhd Garments 15 March 1988 7
Kingston Beverage Sdn Bhd Soft drinks 1 May 1988 5
Jati Freedom Textile Sdn Bhd Garments 7 May 1992 8
Azhimu Garments Sdn Bhd Garments 1 March 1990 5
Ibic Sdn Bhd Mineral water 20 August 1991 7
Bhp Steel Building (B) Sdn Bhd Steel roofing, walling,
building16 August 1993 8
Perkasa Hualey Sdn Bhd Garments 1 February 1994 5
Ath-Tyfountex Sdn Bhd Garments Not yet operational 4
Alliance Industries Sdn Bhd Garments 24 April 1994 3
Butra Djajanti Sdn Bhd Cement 1 June 1996 5
PKS Sdn Bhd Electric switchboard 1 July 1994 7
Seri Pertamas Sdn Bhd Garments 26 May 1996 5
Lim Kim Hai Sdn Bhd Electric cables 1 March 1995 5
Solar Tech Sdn Bhd Electrical industrial apparatus 17 February 1999 5
Semaun Seafood Sdn Bhd Seafood 1 May 1997 2
Azhimu Jaya Garments and Textiles (B) Sdn Bhd Garments 19 June 1998 5
PSA Muara Container Terminal Sdn Bhd Supporting services to water
transport1 October 1999 5
Golden Chick Abattoirs Sdn Bhd Abattoirs and Halal meat
packing plants15 November 1999 5
Source: Information provided by the Brunei authorities.Brunei Darussalam WT/TPR/S/84
Page 59
79. According to the authorities, the EDB would also consider applications for Pioneer Status
from investors in industries previously not granted this status, provided, inter alia:   that production in
that particular industry has not been carried out on a commercial scale and is suitable for the
economic or development requirements of Brunei;  there are favourable prospects for export-oriented
development of that industry;  and that it is in the public interest to encourage its development.58
80. Tax exemptions are also available for the expansion of enterprises already established in
Brunei if the expansion is deemed beneficial to Brunei and in the public interest.  An Expansion
Certificate may be granted by the EDB if the company incurred new capital expenditure, including
through the purchase of production equipment and that this would result in an increase in value at
original cost of the production equipment of the company of at least 30%.  The Certificate qualifies
the company for a tax exemption of up to five years depending on the level of new capitalexpenditure.
81. A tax exemption may also be granted for an "approved foreign loan", on which interest is
normally subject to a 20% withholding tax, if the loan is used for the purchase of production
equipment;  if the credit facilities are obtained through a financial agreement (a loan/financing
agreement) with the foreign lending company;  and if the loan is less than B$250,000.
59
82. Estimates of the amounts of tax revenues forgone as a result of Pioneer Status incentives were
B$112.8 and B$312.2 million in 1998 and 1999 (some 1.6% and 4% of GDP, respectively).  Clearly
publication of such estimates would enhance fiscal transparency in Brunei.  No studies have been
undertaken by the authorities to evaluate the effect iveness of these incentives in relation to the tax
revenue forgone;  in the absence of any convincing evidence to the contrary, experience in other
countries suggests that tax incentives are seldom cost-effective.60
(b) Subsidies
83. Brunei notified the Secretariat that it maintains no subsidies that are notifiable pursuant to
Article XVI:1 of GATT 1994, or Article 25 of the Agreement on Subsidies and Countervailing
Measures.61
84. Subsidies, nevertheless, appear to be provided  for agricultural inputs and for services such as
water, energy, and telecommunications.  In addition, housing, education, and medical care areprovided free of charge.  Government employees also have access to low-interest or interest-free loans
for the purchase of cars and houses.
62
                                                     
58 Ministry of Development (undated a).
59 Investment Incentives Act, Part IV (Article 29).
60 In the case of investment incentives, for example, most econometric studies show that forgone tax
revenues exceed the increase in desired investment (OECD, 1995).  Furthermore, according to Shah (1995),several countries (for example, Brazil, Indonesia, and Mexico), having observed that the investment induced bytax incentives falls short of the tax revenue forgone, curtailed such measures.  Tax holidays are regarded as aparticularly ineffective type of tax incentive compared to tax credits (Mintz, 1990, and Mintz and Tsiopoulos,1992).
61 WTO document G/SCM/N/1/BRN/1, 18 March 1997.
62 United States Department of State (1999).WT/TPR/S/84 Trade Policy Review
Page 60
(c) Price and distribution controls
85. Under the Price Control Act and the Emergency (Price Control Act) (Amendment) Order
1999, which are administered by the Economic Pl anning and Development Department in the
Ministry of Finance, maximum prices of products may be fixed by the Price Controller for consumer
protection purposes;  in addition, the Act appears to be used to control differences in prices of
commodities in different parts of the country.  A ccording to the authorities, prices are currently
administratively controlled by the Department on 12 or 13 items.  These include rice, sugar, motor
vehicles, petroleum products, cigarettes, infant milk, milo bread, coffee, and tea.  The retail price of
petroleum products has been frozen since 1978 as part of an agreement between the Government and
Brunei Shell Marketing;  the difference between th e retail price and the price set by the company is
subsidized by the Government (Chapter IV(3)(i)).
86. It is not clear whether internal distribution controls are maintained on items subject to import
and export restrictions by the Information Technology and State Store Department in the Ministry of
Finance, such as rice and sugar.63  According to the authorities, such restricted items imported directly
by the Government are distributed to retailers un der a monthly quota system.  The retailers must be
registered with the Department of Information Te chnology and State Stores to obtain their monthly
quota of these products.
(d) Other assistance
East ASEAN Growth Area
87. The Government of Brunei also provides assistance in the form of tax exemptions on
companies investing in the Brunei Darussalam, Indonesia, Malaysia, the Philippines East ASEAN
Growth Area (BIMP EAGA)64, as well as tariff exemptions on imports of all raw materials and capital
goods.  The main activities appear to include production of Halal meat, shrimp and fisheriescultivation, biopharmaceuticals, high-value-added forestry products, and tourism activities such as
diving and eco-resorts.
Small and medium-sized enterprises
88. As part of its efforts to increase private sector participation in the economy, the Government
has been encouraging the development of small and medium-sized enterprises (SMEs).  TheEconomic Development Board assists local businesses by providing loans at favourable rates of
interest for start-ups and for business expansion.  Loans of up to B$1.5 million are provided at a rate
of 4%, and are repayable over a maximum period of 12 years.
65  T h e  G o v e r n m e n t  i s  a l s o  m a k i n g
efforts to improve the technological capabilities of existing local industries, which are mainly SMEs.
Industrial areas, which are run by the Brunei Industrial Development Authority (BINA), provide lowcost infrastructure to all companies, especially  those wishing to invest in priority areas.
89. In its report published in September 1999, the BDEC suggested that, in addition to current
activities, the Government should enhance the capabilities of SMEs further, inter alia , by expanding
financial assistance;  strengthening the capabilities of the Resources Centre based in the Ministry of
                                                     
63 In addition, import and export permits for rice, sugar and salt are issued by this Department
(Department of Information Technology and State Stores (undated)).
64 Withholding tax exemption on dividends (Excerpts from the ADB Study on the EAGA) [Online].
Available at:  http://www.brunet.bn/org/bimpeabc/excerpts.htm [25 October 2000].
65 Borneo Bulletin (2000).Brunei Darussalam WT/TPR/S/84
Page 61
Industry and Primary Resources, which provides suppor t to SMEs;  assisting SMEs in upgrading their
management capabilities;  and improving the structure of government contracts by packaging them in
such a way as to encourage participation by SMEs.66  In response, a B$200 million working capital
credit fund was launched by the Government in January 2001.67  The fund, which is a joint
undertaking between the Government, eight commercial banks, and a financial trust fund, would
provide loans at a low rate of interest of up to 4% and would be applicable for local firms only,including wholly owned and joint-vent ure companies with foreign investors.
(iii) The public sector and private investment
(a) The public sector
90. The Government is the largest employer in Br unei, providing employment to some 94% of all
nationals in the workforce in 1998.68  It also has large shareholdings in key companies, including a
50% share in Brunei Shell Petroleum Company Limited (BSP) and Brunei Shell Marketing since
1985.  BSP, owned jointly with Roya l Dutch Shell, is the main producer of petroleum and natural gas
in Brunei, while Brunei Shell Marketing was established in 1974 to market oil and gas products
domestically.  The Government also has a 50% share in Brunei LNG, Brunei Coldgas (merged in
1996 with Brunei LNG) and Brunei Shell Tankers.69
91. In addition to the petroleum and gas sector, the Government of Brunei plays a major role in
the industrial development of the economy through its holding company Semaun Holdings Sendirian
Berhad.  Although Semaun Holding was incorporated as a private limited company under the
Companies Act in 1994, its Board of Directors is almost entirely composed of government
representatives, including participation from the Ministries of Industry and Primary Resources,
Communications, Finance, and the Prime Minister's Offi ce, in addition to the managing director of the
company (Box III.2).  The company, along with its s ubsidiary and joint-venture companies, appears to
dominate domestic manufacturing.  Little information is available, however, on its contribution to
GDP, or annual accounts, suggesting a lack of transparency and public accountability.
92. Public sector monopolies also appear to exist in key infrastructure sectors, including fixed
line telecommunication services, electricity, and water.
                                                     
66 Brunei Darussalam Economic Council (1999).
67 Government of Brunei, "Working Capital Credit Fund will help boost the country's economy",
On-line news  [Online].  Available at:  http://www.brunei.gov.bu/hotnews/0101/23/WCCF.htm.
[23 January 2001].
68 Brunei Darussalam Economic Council (1999).
69 As of 1996, when Brunei Coldgas and Brunei LNG were merged, the Government of Brunei owns
50% of the company, while the rest is shared equally between Shell and Mitsubishi.WT/TPR/S/84 Trade Policy Review
Page 62
Box III.2:  Semaun Holdings Sendirian Berhad
Semaun Holdings, the Government of Brunei's holdin g company, was incorporated as a private limited
company in 1994, and is wholly owned by the Government of Brunei.  It is directly responsible to theMinister of Industry and Primary Resources.
Semaun's mission is to "spearhead industrial and commercial development through direct investment in key
industrial sectors in the interest of Brunei Darussalam ".  The company is also expected to observe the
commercial principle of viability and profitability, although "in areas of strategic importance, commercial
profitability may be compromised with medium to long term gains".
The holding company has pursued this strategy through direct investment in high technology,
high-value-added industrial and commercial ventures;  investment in research and development leading tocommercialization;  and overseas investment to reinforce local ventures, including through strategic
partnerships with foreign companies to improve mark et access and access to technology.  Priority is given
to investment in Brunei in areas of strategic importa nce and not in direct competition with local private
industry, and in areas where the private sector is constrained through lack of access to technology and
resources.  Investment is based on the creation of wholly owned companies  in areas of major national
security and where the intention is to accelerate the development of local industries;  joint ventures  with
local and foreign investors in areas of low investment risk;  and equity investment  in existing emerging
companies to help them gain access to technology an d resources.  In its choice of projects, the company
pays close attention to priorities drawn up by the Government, including contribution to GDP, localemployment opportunities, improved productivity, management control of the company, continuity andsustainability of activities, and concerns relating to Isla m in the food sector.  Presently, priority is given to
investment in the food sector, manufacturing, and services.
Semaun Holdings currently has one subsidiary company, SemaunPrim Sdn Bhd and five joint ventures,
three of which are under SemaunPrim Sdn Bhd.  The companies are:
Seiwa Corporation Sdn Bhd , established in July 1996, owned by SemaunPrim (70%) and Eiwa Enterprise
Co. Ltd. (Japan) (30%), and involved in hatcheries as well as manufacture of aquatic feed.
Semaun Seafood Sdn Bhd , established in November 1996, is owned by SemaunPrim Sdn Bhd (51%),
SinSin Bun Pte Ltd (Singapore) (34%) and Koperasi Brunei Bhd (15%);  the company is involved in
processing seafood and fisheries.
SeaGro Sdn Bhd , was established in January 1997 and is owned by SemaunPrim Sdn Bhd (70%) and
Baiduri Holdings Sdn Bhd (30%);  the company is involved in cage culture.
SolarTech Systems Sdn Bhd  was established in November 1997, is owned by Semaun Holdings (70%)
and Global Expertise SA (United Kingdom) (30%), and is involved in the manufacture of solar panels.
Mahkota Crystal Sdn Bhd  was established in April 2000, is involved in the manufacture of crystal, and is
owned by Semaun Holdings Sdn Bhd (70%) and LangkawiiCrystal Sdn Bhd (Malaysia) (30%).
The holding company also targets a number of specific sectors, including Halal food processing and
manufacture  biotechnology from natural resour ces;  pharmaceutical product development and
manufacture;  integrated fisheries projects;  high technology agri-industries projects;  informationcommunication technology;  computer technologies including design and manufacture of hardware andsoftware);  the development of Muara Bay, including expansion of the container terminal, development of
industrial sites, downstream petrochemical industries, independent power products, and marine and port
related services;  silica-based product processing and manufacture;  and tourism and related activities.
Source: Information provided by Semaun Holdings Sdn Bhd., Ministry of Industry and Primary
Resources.Brunei Darussalam WT/TPR/S/84
Page 63
(b) Corporatization and privatization
93. Efforts to reduce the scope of direct governme nt involvement in the economy began under the
Sixth National Development Plan and were conti nued under the Seventh National Development Plan.
Under the Seventh Plan, the Government encouraged the private sector to play a proactive and leading
role in economic expansion, while restricting its own activities to investment in infrastructure
facilities.70  The Government provides infrastructure facilities through its Development Fund, which,
in 1999, allocated B$158.52 million (around 2.1% of GDP) for this purpose.71
94. Efforts to reduce public sector involvement in the economy include "corporatization" of
public sector companies, contracting out public sector services to the private sector, and privatization
of some public sector services.  Privatization, however, has been piecemeal and ad hoc.  During the
period covered by the Sixth National Development Plan (1991-96), the Government licensed a privatecompany to provide cellular mobile telecommunications services;  the company has since been taken
over by the Government (Chapter IV(5)(iv)).  Th e Government also privatized parts of the power
generation and domestic waste collection services.  In addition, the Mulaut Abattoir and the Chicks
Hatchery and Breeding Farm were contracted out to the private sector.  Furthermore, according to the
authorities, the RIPAS Hospital car park, the Brune i International Airport car park, the container
terminal at Muara Port, and electrical and telephone cable laying services have also been privatized.
95. The Government indicated in the Seventh Plan th at privatization efforts were to be continued.
However, concern has been expressed that privatization may bring with it reduced employment
opportunities for Brunei nationals, added government expenditure to restructure an activity prior to its
privatization, social discomfort due to the involvemen t of foreigners in the running of a company, and
higher prices for local consumers compared to prices offered by the Government, especially when the
privatized company retains monopoly power.
72  This last issue raises the question of why a privatized
company would necessarily be given monopoly power in any sector.  The Government thus intends to
privatize only after carefully studying these impacts and the overall costs and benefits of the
programme to the Government and to the economy of Brunei.  The authorities indicate that
government agencies currently in the pipeline for corporatization, commercialization or privatization,
include the Department of Telecommunications, part of Electrical Services, the Postal Department,
the Department of Information Technology and Stat e Stores, the Meragang Hatchery section of the
Department of Fisheries, and the Employees Providen t Fund.  They also stress that privatization will
be at the top of the Government's agenda during the Eighth National Development Plan period.
96. In addition to privatization of public sector companies, private sector investment has been
encouraged mainly in the non-oil sectors of the eco nomy.  However, these sectors remain relatively
small compared to petroleum and social and personal services, which together accounted for around
64% of GDP in 2000.  According to the authorities, the private sector is most active in the services
sector, its share of GDP increasing from an estimat ed 31.7% in 1995 to 41.3% in 1999;  68% of this
activity is in the ownership of dwellings, followed by construction (17%), retail trade (13.9%), and
transport, storage, and communications (12.9%).  The relative lack of private sector participation wasalso one of the problems identified by the BDEC in  its report, recommending that participation by the
                                                     
70 Government of Brunei Darussalam (1997) .
71 In addition, the Seventh Development Plan estimates that total development expenditure over the
period 1991-95 was around B $3.04 billion.  Development expenditure for the Seventh Plan (1996-2000) is
estimated at some B$7.2 billion, of which around 28% and 22% are to be spent on social services and publicutilities, while 13% and 20% are to be spent on industry and commerce, and transport and communications
(Government of Brunei Darussalam, 1997).
72 Government of Brunei Darussalam (1997).WT/TPR/S/84 Trade Policy Review
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private sector in the economy be enhanced, in addition to increased privatization of the public sector.
As part of its strategy for sustainable development, the BDEC's report recommended a corporatization
and privatization plan, which envisaged the identification of one major candidate for corporatization
and/or privatization by September 2000, the establishment of regulatory and other safeguards to
enhance transparency and competition, and the contracting out of non-core government services to the
private sector, especially local SMEs (section (ii)(d) above).
(iv) Competition policy and regulatory issues
97. According to Brunei's Individual Action Plan in APEC, it has no specific legislation on
competition policy.  However, efforts are being made to increase competition, including through
deregulation and corporatization/privatization.
(v) Intellectual property rights
(a) Overview
98. Brunei is a party to the Convention Establishing the World Intellectual Property Rights
Organization (WIPO), since 1994.  Brunei has not joined the Berne Convention for the Protection of
Literary and Artistic Works or the Paris Convention for the Protection of Intellectual Property.
However, according to the authorities, steps are be ing undertaken to study the possibility of joining
the two Conventions in the future.
99. Brunei has not notified its laws to the WTO;  however, as a developing country Member of
the WTO, it has made use of the transitional period available to it until 1 January 2000.  Legislative
changes were introduced in 2000 for the protection of copyright, trade marks, patents, layout designs
of integrated circuits, and industrial designs;  with the exception of the Emergency (Patents) Order
1999, which is in an advanced stage of finalization, all the other laws are currently in place.  The
delay appears to be due to the finalization of certain international arrangements for prior art searchesand the deposition to the Paris Convention and the Pa tent Cooperation Treaty (PCT).  The authorities
expect patent legislation to be in place during the first quarter of 2001.  These changes were made
partly in response to the belief that intellectual  property rights infringements, especially in the
production and sale of counterfeit goods, were putting the country's economic growth at risk.
73
Brunei's national legislation on intellectual property rights is due to be reviewed by the WTO Council
for TRIPS in November 2001.  The authorities state that all Brunei's TRIPS-related legislation should
be in place during the first quarter of 2001;  notification of this legislation to the WTO should take
place in the six months that follow.
100. At the regional level, Brunei participates in the ASEAN Programme of Action on Intellectual
Property Cooperation, including measures to strengthen and enhance intellectual property rightsprotection, enforcement, administration, and legislation in ASEAN member countries.
74  T h e
programme was extended to 2001 at the ninth meeting of the ASEAN Working Group on Intellectual
Property Cooperation (WGIPC) held in March 1998.  The Experts Group on Patents and Trade Marks,
which reports to the WGIPC, met most recently in Bangkok on 13-14 October 2000.  The Groups are
discussing the possibility of establishing a common patent and trade mark system for ASEAN.ASEAN has also entered into cooperative arrangements with WIPO and a technical assistance
                                                     
73 Statement by the Attorney General's Office as reported in the World Intellectual Property Report
(2000).
74 ASEAN Secretariat (undated c).  Brunei is also  a signatory to the ASEAN Framework Agreement on
Intellectual Property Cooperation, signed in 1995 (ASEAN Secretariat, undated d).Brunei Darussalam WT/TPR/S/84
Page 65
programme with the European Union.75  The ASEAN–EC Regional Cooperation Programme on
Intellectual Property Rights aims to increase trade and investment by upgrading intellectual property
rights in ASEAN countries;  Brunei has not signed this agreement yet.76
(b) Copyright and related rights
101. The Emergency (Copyright) Order 1999, entered into force on 1 May 2000.77  It protects
literary, dramatic, musical and artistic works, including computer programs, as well as soundrecordings, films, broadcasts, cable programmes and topographical arrangements of published
editions.
78  It also provides for the protection of performers' rights and any other rights granted to
other persons under an exclusive recording contract.79  Data compilations, including databases,
whether in machine-readable or other form, which are original by reason of selection or the
arrangement of contents, are protected under the Order, as are producers of phonograms andbroadcasting organizations, provided they meet the c onditions of authorship described under section II
of the Order.
80  The Emergency Order provides copyright protection for 50 years after the creator's
death for works81;  50 years from the date that the work was made or recorded for computer-generated
works, sound recordings or films82;  and 50 years from the date of broadcast or performance for
broadcasters and performers, respectively.83  Copyright in the topographical edition of a published
edition is granted for 25 years from the year of the first publication.84  Foreign works are protected in
Brunei under the Order by virtue of an international convention or agreement to which Brunei is a
party.  Thus, as a Member of the WTO, Brunei provides copyright protection to works from all the
other WTO Members.
102. Under the Order, copyright owners have exclusiv e rights to reproduce, adapt, issue, perform,
broadcast or otherwise communicate the work to the public.85  Any infringement of these rights may
be actionable by the copyright holder or the licensee and remedies may be sought through a localcourt of law (see section (d) below).
                                                     
75 The technical assistance programme for the ASEAN countries, funded by the European Commission,
was conducted between October 1993 and June 1997 and included regional and national components coveringBrunei, Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Viet Nam (since 1995).  A secondcooperation programme is currently being prepared and will last until December 2004 (WTO document
IP/C/W/154/Add.3, 1 December 1999).
76 This has been formalized in a Memorandum of Understanding (MOU) (ASEAN Secretariat,
undated e).  Brunei has not signed this agreement yet although the authorities expect that the MOU will beforwarded to the Prime Minister's Office for signature by the end of February 2001.
77 The Emergency (Copyright) Order 1999 was published on 26 February 2000.  Previously Brunei had
no copyright law, although UK copyright law applied.
78 The Emergency (Copyright) Order 1999 (Art. 3).
79 Part II of the Emergency (Copyright) Order 1999.
80 For sound recordings or films, the author is the person by whom the arrangements necessary for the
making of the recording or film were undertaken;  for a broadcast, the author is the person making the broadcastor, in the case of a re-broadcast of a broadcast by r eception and immediate retransmission, the person making
the re-broadcast.
81 Article 14.1.  In the case of unknown ownership protection lapses 50 years from the date that the
work was either made, first made available to the public or published, whichever was later.
82 Articles 14.3 and 15.
83 Articles 16.1 and 195.
84 Article 17.
85 Article 18.  See also provisions in Chapter II of the Emergency (Copyright) Order 1999 and
exceptions in Chapters III and IV.WT/TPR/S/84 Trade Policy Review
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103. According to the authorities, there is no offi cial government position on parallel imports.
(c) Industrial property
Patents
104. The Emergency (Patents) Order 1999 is expected to be implemented in 2001;  it will replace
the Inventions Act, 1984, which was a re-registration system for patents granted in the United
Kingdom, Malaysia, and Singapore.  The Order provides patent protection for a period of 20 yearsfrom the date of filing, to any product or process that  is considered to be novel, involves an inventive
step, and is industrially applicable.
86  Pharmaceutical and agricultural products and processes are
protected under the new law.  The Order will not, however, include protection for plant varieties;  the
authorities are currently looking into the possibility of a sui generis  system of protection for plant
varieties.  Under the current Inventions Act, pate nts granted in the United Kingdom, Singapore, and
Malaysia, may be re-registered in Brunei within three years from the date of grant.  These privileges
will cease once the Emergency (Patent) Order comes into force.  Patent registration is administered by
the Registry of Patents under the auspices of the Attorney General's Chambers;  applications may be
made by any persons.  Foreigners and non-resident s may apply for patent protection in Brunei under
Part XVI of the Emergency (Patents) Order 1999.  Pa tent protection for an invention may be sought
simultaneously in several countries by a national or a resident of any member State by filing an
"international" patent application.  Such an international patent application would only include Brunei
once it becomes a member of the PCT.
105. The Emergency (Patent) Order 1999 will also provide for compulsory licensing under
Articles 55 to 57 if, after three years from the date of grant or four years from the date of filing, the
market for the patented invention is not being supplied by the patent holder on reasonable terms or if
the patent is not being adequately worked.  Compulsory licensing in such a case may be granted bythe High Court or an intermediary court.  Compul sory licences granted under this provision are non-
exclusive, may only be used predominantly in Brunei and for the purpose for which they were
authorized.  The patent holder must be paid adequate remuneration, as agreed between the licensee
and patent holder or as determined by the Court.  Non-exclusive use for the services of the
Government of Brunei of any patented invention is also provided for under the Order and may only
occur if the Government has taken all reasonable steps to obtain the consent of the patent holder to
use the patented product.
87  Under the Inventions Act, which is currently in force and will be replaced
by the Emergency (Patents) Order, there is no provision for the granting of compulsory licences.
Trade marks
106. Protection for trade marks is provided for under the Emergency (Trade Marks) Order 1999
which replaced the Trade Marks Act (Cap 98).  The legislation provides protection for ten years from
the date of registration, renewable indefinitely for additional ten-year periods.88  Protection is granted
to any visually perceptible sign capable of being represented graphically and may include words,
designs, letters, numerals or the shape of goods or their packaging.  The new legislation also extends
                                                     
86 Article 13, The Emergency (Patents) Order 1999.  Exceptions to patentability include inventions that
breach morals or relate to diagnostic, therapeutic, and surgical methods (Articles 13.3, 13.4, and 16.2).Previously holders of patents granted in the UK, Malaysia or Singapore could apply to the Ministry of Law inBrunei within three years of the original grant to have the patent registered in Brunei.
87 Part XII Emergency (Patents) Order 1999.
88 Sections 43 and 44, Emergency (Trade Marks) Order 1999.  Previously under the Trade Marks Act
(Cap 98), trade marks were valid for an initial period of seven years, renewable for further periods of 14 years.Brunei Darussalam WT/TPR/S/84
Page 67
protection to services, which was not available under the Trade Marks Act.  If not used for over five
years, trade marks may be revoked;  requests for cancellation of trade marks under these grounds may
be requested by any third party.89  Trade marks are registered by the Registry of Trade Marks in the
Attorney General's Chambers.
Other industrial property rights
107. Brunei has passed new legislation protecting industrial designs and layout designs of
integrated circuits.  Under the Emergency (Industrial Designs) Order 1999, registration of industrial
designs is carried out by the Registrar of Industrial Designs in the Attorney General's Chambers.
Protection is granted for ten years if it was first commercially exploited within five years after the
year in which it was first made or 15 years for other cases.90  The criteria for protection include that
the industrial design must be new at the date of filing, that is, not registered, published, used or sold inBrunei Darussalam or elsewhere before the date on which the application for registration was lodged;
the Order does not apply to computer programs and layout designs.  Protection for textile designs,
including textile and plastic pieces of goods, handkerchiefs, shawls, and other similar articles that the
Registrar may include, is limited under the Order to  features of pattern and ornaments only.  Non-
exclusive use by the Government of an industrial design for national security and defence reasons ispermitted, subject to the terms of the authorization, and limited to public non-commercial purposes.
91
In such a case, the owner of the industrial design is entitled to remuneration as agreed between thetwo.  Any appeals against such a decision by the Government may be made to the High Court;  any
infringement of industrial designs rights may be  addressed through the national courts by way of
damages, injunction, account of profits or otherwise.
92
108. The Emergency (Layout Designs) Order 1999 provides exclusive rights to the rights holder
with the exception of copying for private and research or teaching purposes.  Protection is grantedfrom the day on which the layout design was created, for a period of ten years from the date of
commercial exploitation, if it was commercially expl oited within five years from the year of creation,
or for 15 years in all other cases.  Only layout designs created after 1 May 2000, however, will receive
protection under the legislation.  As with industrial designs, non-exclusive use by the Government for
security and defence purposes is permitted, provided the right holder is remunerated.  Infringementissues may be addressed through the national courts including injunctions, and damages.  Brunei
provides protection for geographical indications under the Emergency (Trade Marks) Order, by virtue
of collective marks and certification, under sections 50 and 52 of the Order, respectively.
(d) Penalties and enforcement
109. The new legislation on intellectual property rights also provides measures for penalties
associated with any infringement of these righ ts.  Under the Emergency (Copyright) Order 1999,
copyright infringements are actionable by the copyright holder, or in the event of a licence, the
licensee.
93  The production, import, sale, rental or distribution of copyright-infringing goods on a
commercial scale is considered a criminal offe nce under the new legislation.  Remedies include
damages, injunction and the right to seize infringing copies.  The seizure of infringing copies mayonly be made once notice of the time and place of the proposed seizure is given to a local police
station.  Penalties for infringement include imprisonment for up to a maximum of two years, a fine or
                                                     
89 Section 47 (I), Emergency (Trade Marks) Order 1999.
90 Section 2, Emergency (Industrial Designs) Order 1999.
91 Part IV, Emergency (Industrial Designs) Order 1999.
92 Article 48, Emergency (Industrial Designs) Order 1999.
93 Part I, Chapter IV, the Emergency (Copyright) Order 1999.WT/TPR/S/84 Trade Policy Review
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both;  the size of the fine and the period of imprisonment is subject to the discretion of the
Intermediate and High Courts, which have jurisdiction in cases of infringement of intellectual
property rights.94
110. For patents, the patent holder may bring civil proceedings against the alleged infringer in any
national court of law.  Available remedies include injunctions, orders to deliver or destroy the
infringing product or the means of its production, damages, and accounts of profits.  Under certaincircumstances, including falsely representing a product, criminal penalties may apply.
95
111. Wilful counterfeiting of trade marks is a criminal offence under the Emergency (Trade
Marks) Order 1999, and may result in fines of up to B$100,000 or up to ten years imprisonment or
both.96  Furthermore, seized counterfeit goods may be forfeited, destroyed or otherwise disposed of.97
112. The Government of Brunei has reported an increase in enforcement measures, especially on
the sale of pirated goods, since May 2000.98  The Attorney General's Chambers stated that the new
statutes, particularly the Emergency (Copyright) Order 1999, will be fully enforced.99  Data showing
the trend in the enforcement of IPRs, such as number of enforcement actions undertaken in recent
years and infringing products seized, are not available.  Foreign nationals or companies may initiate
court proceedings in Brunei for infringement of  property rights under section 166 of the Order.   Thus
far two cases have been recorded.  One relating to Ajinomoto was dismissed on technical grounds;
the second, on Levi Jeans, involved the payment of fi nes.  The authorities also state that in ordinary
criminal cases the courts in Brunei Darussalam have handled cases expeditiously.  Details of the
average length that court cases take, were not available.
113. Border enforcement measures for intellectual property right infringements are undertaken by
the Brunei Darussalam Customs Department.  Statutory authority for border enforcement is expressly
provided for under the Emergency (Copyright) Order 1999, which enables copyright holders to givenotice to the Controller of Customs if they suspect that infringing copies are crossing the border.
100  It
appears, however, that without such a written order Customs may not seize any goods suspected of
infringing copyright.  Hitherto, there have been no cases recorded of such seizures at the border.
                                                     
94 Article 204.5, Emergency (Copyright) Order 1999.
95 Part XVIII, Emergency (Copyright) Order 1999.
96 Articles 94 to 103, Emergency (Trade Marks) Order 1999.
97 Article 104, Emergency (Trade Marks) Order 1999.
98 World Intellectual Property Report  (2000).
99 World Intellectual Property Report  (2000).
100 Article 109, Emergency (Copyright) Order 1999.