Mozambique WT/TPR/S/79
Page 25
III. TRADE POLICIES BY MEASURE
(1) INTRODUCTION
1. Since 1987, starting with the Economic Rehabilitation Programme (PRE) and expanding
rapidly after the conclusion of the Civil War in 1992, Mozambique has undertaken significant efforts
to reform its economy and to create a market-driven environment attractive to foreign investment.
Reforms in trade-related sectors have been comprehensive, as exchange controls and quantitativerestrictions on imports have been eliminated (apart from those arising from the application of
international conventions and those maintained fo r reasons of health and security).  A major
programme to improve the customs services has been initiated, and a major programme of technical
assistance in that area is ongoing.
2. The key customs document is the Tariff Code Book ( Pauta Aduaneira ), which contains all
relevant laws, regulations, and tariff lines.  The tariff schedule has been simplified:  the number of
tariff bands has been reduced, the lowest being zero and the highest being 30%.  The simple average
tariff on imports is 13.8%.  The tariff structure is modestly escalatory:  low tariffs for unprocessed
goods, rising somewhat for goods with increasing levels of value added.  As a consequence, the extent
to which domestic producers are protected by high effective rates of protection is less than in manycountries of Mozambique's level of development.  Export restrictions in almost all areas have been
eliminated, as have foreign exchange controls previously administered by the Bank of Mozambique.
3. Tariff revenue constitutes only a modest proportion of Mozambique's government revenues.
The recently adopted value-added tax will provide increasing revenue, which is expected to allow for
a further lowering of tariffs.  In fiscal year 1999, ta riff exemptions were equivalent to some 11% of all
duties.
4. Mozambique has no legislation with respect to  anti-dumping, countervailing, and safeguard
measures.  Intellectual property protection is relatively new to Mozambique, but progress is being
made towards implementation of WTO rules and obligations, although efforts are hampered by
Mozambique's limited resources, both in the areas of organization and of enforcement.
(2) M
EASURES DIRECTLY AFFECTING IMPORTS
(i) Registration and documentation requirements
5. In 1998, Mozambique simplified its existing export and import procedures, eliminating the
need for prior licences.  Currently, an importer ne eds only to be registered as a company with the
Ministry of Trade and Industry.  An import registration is required annually, exclusively for tax and
statistical purposes.  Once registered, the importer is authorized to deal directly with Customs.  The
same is true for exporters, but renewal of registration is required only every five years.
6. With the elimination of prior licences and the gradual reduction of preshipment inspection
(PSI) requirements (section (ii) below), a system of customs pre-declaration was put into place.
Customs pre-declaration is accomplished th rough the Single Administrative Document
(Documento Único , or DU), based on the system used within the European Union.  The
pre-declaration must be filed before goods are shipped.  Once the pre-declaration is filed, Customsruns a computerized risk analysis to determine whether a PSI is necessary.  At the same time,
Customs receives a 15% advance, as a deposit against the eventual duty (to cover the Government's
and the PSI company's expenses), as well as an administrative charge of US$50 (per bill of entry) on
exempted products.  At this time, Customs fixes the exchange rate for the transaction.WT/TPR/S/79 Trade Policy Review
Page 26
(ii) Inspection, customs valuation, and customs clearance
7. In 1995, the Mozambican Government began reform of its customs procedures.  The reform
programme had three fundamental goals:  (i) to contract a firm to select personnel nominated by the
Government to run the Customs office;  (ii) to create a government entity to conceive and implement
all projects to reform customs operations;  and (iii) to write new legislation concerning preshipment
inspection (PSI), and have a new international tender competition to assure integration of the PSIactivities into new customs procedures.
8. On 9 February 1995, the Minister of Planning and Finance created the Technical Unit for
Customs Restructuring (UTRA), which was charged with managing both internal changes and
external contracting, and with analysing the results of the efforts.  UTRA was also made responsible
for the Fiscal Police, Customs Court, Advanced Customs Training, and the Tobacco Industry Council.
9. As a result of international competition, and with support from the World Bank, the IMF, and
bilateral donors, customs reform took shape in January 1997 when a private agency, Crown Agents
(of the U.K.), assumed active management responsibility of Mozambique Customs for a three-year
period.  The original contract has been extended.
10. The problems that the 1995 reforms were intended to solve included:
- repeated complaints from domestic producers, particularly from industry, alleging
that their stocks were growing while illegal imports were creating competition with
which they could not compete;
- customs revenues had declined after 1992, particularly in 1994, when, under special
programmes, merchandise exempt from taxes entered the country in large volumes.
As a result, tariff revenues were much lower than expected;
- accusations against the Government concerning a lack of transparency, bad
governance and, above all, the lack of will to eradicate corruption;
- complaints by those who paid import taxes that these were much too high, leading to
tax avoidance;  and
- internal recognition that the channels of  contraband involved citizens from various
spheres, were too difficult to break from within, and that it would be more effective tohave outsiders with no economic stake in the activity, take charge of the task.
11. Until 1997, Mozambique's PSI requirements were based on quality, quantity, and price, and
applied to all imports.  Little of the revenue collected was passed to the Government.  The PSI system
has been changed significantly, and the Government is still in the process of strengthening its customs
laws by providing for prison penalties.  Since 1997, PSI has been progressively reduced, so that onlyabout 30% of imports undergo PSI.  PSI is now conc eived as an aid to customs work, rather than an
autonomous act.  With the strengthening of the customs system, PSI will cease to be carried out
systematically.  Mozambique's policy is to continue to reduce PSI.
12. An important change since 1997 has been the establishment of post-shipment inspection.
Since 1996, post-shipping inspection, as well as PSI, is handled by the United Kingdom-basedcompany, Intertek Testing Services (ITS), chosen by international tender.  Usually, only items not
subject to PSI are subjected to post-shipment inspection, unless there are indications the shipment is
suspect.  The importer (or his agent) must be present at such an inspection, and items are oftenMozambique WT/TPR/S/79
Page 27
risk-targeted to determine whether they need to be inspected.  This process is constantly being refined
to exempt non-suspect goods.  Goods that lack documentation are liable for post-shipment inspection
and a potential fine of 30% of the c.i.f. value, which may be waived for just cause.
13. The Customs Department may ask the PSI company to perform a simple inspection, a basic
inspection, or a full inspection.  A simple inspection includes verification of tariff classification of the
goods to be imported, checking the customs value of the goods, and issuing a certified DU, with alldetails completed.  A full inspection includes verification at the place of production, warehousing, or
dispatch of any goods, physical inspection of the quality and quantity of goods declared, possible
checking of the commercial, technical, and sanitary quality of the goods, the tariff classification, the
sealing of goods in containers, and more.
14. The normal charges resulting from PSI are assumed by the Government, unless a mistake by
the exporter or importer requires a new inspection.  Charges for inspections of donations from
international aid agencies or foreign governments, which have been approved by the Government, are
paid by the receiving Mozambican government agency.  Importers, however, are responsible for
reimbursing the Government for PSI costs if the inspection uncovers un-importable goods, if the DU
is not collected within 60 days, or if the pre-declaration is cancelled, by virtue of the conditions setout in the diploma regulating the clearance of goods.  The importer is responsible for informing the
exporter of any obligation to submit the goods to PSI.
15. The following goods are exempt from PSI:
- gold, precious stones, semi-precious stones, works of art, explosives, firearms,
munitions and other military articles that are not suited to use by civilians, as long as
they are imported by competent authorities, and fireworks, antiquities, live animals,
fresh chilled or frozen fruits and vegetables, fish or meat or eggs, scrap metal,electricity, current newspapers and periodicals, household and personal effects, parcel
post, unprocessed hides, radioactive and nuclear substances, and commercial
samples;  and
- supplies imported for the use of diplomatic missions, international organizations,
governmental organizations, and fore ign non-governmental organizations.
16. One of Crown Agents' tasks was to reduce corruption and related problems affecting both
revenue collection and national reputation.  Much progress has been made, but customs officials
admit that problems of internal corruption and collusion remain.  For example, in the first six months
of 2000, 130 staff members were charged with serious offences.  Responsibility for investigation,
intelligence, and valuation are likely to remain in the hands of outside consultants for some time.
17. Pursuant to Law 206 of 1996, importers can ap peal procedures and decisions concerning
customs rulings.  A Technical Arbitration Committee has been created to adjudicate disputes related
to customs valuation and quality assessment.  The Committee comprises representatives of the private
and public sectors.  The Committee has not yet started settling disputes because its statutes have not
yet been approved.
18. For customs valuation purposes Mozambique uses the Brussels definition of value (BDV).
This corresponds to the "normal" price of the goods, i.e., the price which, it is considered, these goods
would have been able to fetch in the place and at the time they are declared, on full competition terms,
between a buyer and seller who are independent.  In accordance with the provisions of Article 20
(special and differential treatment) of the Agreement on Implementation of Article VII of the GATT
1994, Mozambique has postponed the changeover to the transaction value.  Mozambique has notWT/TPR/S/79 Trade Policy Review
Page 28
notified the WTO of its deferred application of Article VII, but intends to do so.  Nonetheless,
customs authorities say that Mozambique will comply, but it may take a few years before it can.  The
current priorities, however, are to modernize and professionalize customs performance, eliminate
corruption, and pursue a comprehensive staff training programme;  the lack of competent customs
officials is a major problem.
(iii) Tariffs, other duties and charges
(a) Nature and level of MFN duties
19. Mozambique grants at least most-favored-nation (MFN) treatment to all its trading partners.
Mozambique does not apply any seasonal duties, tariff quotas, or variable levies.  Import duties are
ad valorem .1  Domestic taxes (VAT and excise taxes) are also levied on imports.  In terms of levying
taxes, no distinction is made between domestic and imported products .
20. Mozambique uses the Harmonized Commodity Description and Coding System (HS) for its
customs duties.  The simple average of import duties calculated on Mozambique's tariff schedule of
5,149 lines (at the HS eight-digit level) is 13.8% (Chart III.1).
21. The current highest MFN duty is 30%;  the Government intends to reduce the maximum rate
to 25% by 2001.  As the effect of the relatively new VAT is felt, officials envision further loweringthe highest tariff rate to 20%.  However, officials will watch carefully tariff rates in the region, as
there is some concern that Mozambique's relatively low rates have caused loss of business to
neighbouring countries.  Additionally, there is a simplified tiered structure in which 133 items are
considered duty free (Chart III.2).
22. There is a well developed system for changing tariff rates.  A joint government–private sector
body, the Customs Superior Technical Council, prov ides recommendations to the Government, which
has delegated tariff-setting responsibility to the Minister of Finance.  Difficult decisions are sent to theentire Council of Ministers.  There is no role for the National Assembly.  The most recent tariff
reform was implemented in 1999.  As part of Mozambique's SADC commitments, all tariffs have
been bound (at the regional level) at current rates since 1999.  Under this arrangement, however, it is
possible to change the tariff category of a product in order to bypass the SADC commitment;  this has
not been done.
23. Mozambique's tariffs are dispersed with a standard deviation of 12%, indicating that general
import duties vary from product to product.  The greatest tariff variations are for products in the first
stage of processing.  The average tariff for finished goods is 16.6%, while the rates for primary and
semi-processed goods are 12.8% and 9.5%, respectively (Table III.1).
24. The implemented tariff structure is somewhat escalatory in nature (Chart III.3).  Many
processed products face a higher effective rate of protection (ERP) along the processing chain
providing modest protection for higher-level proces sing activities, and generating higher costs for
consumers.
                                                     
1 Some earlier assessments of Mozambique's tr ade policy erroneously claimed that Mozambique
charged specific duties on some products, but Mozambique abandoned CCCN in 1989.Mozambique WT/TPR/S/79
Page 29
(b) MFN tariff bindings
25. Under its Uruguay Round commitments, Mozambique bound tariffs on all agricultural
products at a ceiling rate of 100%.  Tariff bindings on non-agricultural products are very limited;
only 17 lines (out of a total of 4,417) at the HS eight-digit level were bound at either 5% or 15%.
05101520253035Chart III.1
Applied MFN tariff rates, by HS section, 2000
Per cent
WTO Secretariat estimates, based on data provided b y the Mozambican authorities. Source :Average
MFN rate
13.8%
Table III.1
Main features of Mozambique’s tariff schedule, 2000(Per cent)
Simple average Range Standard deviationa
All tariff lines 13.8 0-30 12.0
By sectorb
Agriculture and fisheries 18.1 0-30 12.9
Non-agriculture (excl. petroleum) 13.1 0-30 11.7
HS 01-24 21 0-30 12.3
HS 25-97 12.5 0-30 11.5
Petroleum 6.3 2.5-7.5 1.6
Table III.1 (cont'd)WT/TPR/S/79 Trade Policy Review
Page 30
Simple average Range Standard deviationa
By degree of processing
First stage of processing 12.8 0-30 12.9
Semi-processed products 9.5 0-30 10.1
Fully processed goods 16.6 0-30 12.1
a The standard deviation measures the absolute dispersion of a distribution.
b Based on ISIC classification.
Source : WTO calculations, based on data provided by the Mozambican authorities.
(2.2%)(21.7%)
(12.3%)(28.9%)(34.9%)
02004006008001,0001,2001,4001,6001,8002,000
Duty-free 2.5 5.0 7.5 30.00.010.020.030.040.050.060.070.080.090.0100.0Chart III.2
Applied MFN tariff distribution, 2000
Number of tariff lines
WTO Secretariat estimates, based on data provided b y the Mozambican authorities. Sourc e:Per cen t
Number of lines (% of total)
Cumulative per cent
(c) Other duties and taxes
26. As discussed in Chapter I(5), a value-added tax (VAT), introduced on 1 June 1999, replaced
the turnover and consumption taxes, and is scheduled to replace the tourism accommodation tax in2000.  The VAT, supplemented by excise taxes on alcoholic beverages, tobacco, certain luxury goods,
and automobiles, has a single rate of 17%, and is expected to improve domestic tax collection.  The
tax is broadly based;  the main exemptions are medical services and drugs;  non-profit activities
(educational, recreational, cultural, religious);  banking, finance, and insurance;  housing rent;
gambling;  funeral services;  wheat flour, rice, bread, and tomatoes;  and agriculture and fishing.
27. Customs officials at the border levy a single fee on imports (worth up to US$500), comprising
the appropriate tariff, the 17%VAT, and any excise fee applicable.  There is national treatment on the
VAT and excise taxes, as the rates are the same for imports and domestically produced goods.  The
revenue collected at the border amounts to approximately 20% of the Government's total revenue.Mozambique WT/TPR/S/79
Page 31
The system in place is the equivalent of a consolidated duty.  Efforts have also been made to capture
revenue from the informal sector:  importers of less than US$500 are not required to register formally
as importers but rather to pay duty on the spot;  this also applies to non-commercial imports of less
than US$1,500.
28. There is a special consumer excise tax on certain products, for example, 30% on musical
instruments, 65% on certain armaments and art, and 40% on video games and most sports equipment.
05101520253035
Food, beverages 
and tobaccoTextile 
and 
leatherWood and
wooden furniturePaper, printing 
and
 publishingChemicals Non-metal
mineral productsBasic 
metal Fabricated metal
products,
machineryOther
manufacturingPer centChart III.3
Tariff escalation by 2-digit ISIC industry, 2000
WTO Secretariat calculations, based on data provided b y the Mozambican authorities. Source :First stage of processing
Semi-processed
Fully processedAverage
MFN rate
13.8%
29. Customs officials know that limited smuggling of goods takes place, but have no estimate of
the extent.  There is no capability to stop smuggling by sea, but some efforts are made to curtail
smuggling by land.
(d) Tariff preferences
30. As a result of the August 2000 completion of the Trade Protocol of the Southern African
Development Community (SADC), member countries wi ll grant preferential tariff treatment to each
other (Chapter II(5)(iii)(a)).
(e) Tariff and tax exemptions
31. Approximately 11% of tariff revenue is lost as a result of exemptions.  According to customs
officials, most exemptions result from inward investment and emergency humanitarian assistance.
Exempt goods, however, still undergo customs pro cedures, as importers must prove that claimed
exemptions are legal.  Such proof involves presentation by the importer of the law that grants anWT/TPR/S/79 Trade Policy Review
Page 32
exemption, and demonstration that the merchandise falls within the law.  Exemptions on
US$298.8 million of imports were granted in 1999.  These exemptions fell into one of three
categories:  (i) for the Mozal project (US$176.8 million);  (ii) from contracted migrant miners
working in South Africa (US$6.3)2;  and (iii) in a "general" category (US$115.7 million).  The total
revenue lost from the exemptions was US$49.8 million.  Within the general category, the three largest
items were consumables, capital goods, and intermediate goods.
32. The Bank of Mozambique credits the customs restructuring process, begun in 1997, with
increased collection of revenues for the State Budget.  The tax on international trade produced 17.9%
of total government revenue in 1998, up from 17.7% in 1997.
33. There are provisions for duty drawbacks for manufacturers who import components that are
eventually exported in a finished product, but no system of providing these benefits is in place orcontemplated in the near future.
(f) User fees
34. There is only one instance of an additional user fee for imports:  goods exempt from duties
are charged US$50 for each importation.  This applies to many investment projects carrying duty
exemptions, but is often waived on humanitarian assistance.
(g) Import surcharges
35. For the most part, Mozambique levies no import surcharges.  There are, however, a few
exceptions, namely a variable surcharge on sugar (25% on average), and fixed ones on cement and on
steel (12.5%).  None of these surcharges have been notified to the WTO.
Sugar
36. The import surcharge on sugar varies depending on the world price.  The Government is
advised by the domestic industry association, the National Sugar Institute, according to an agreedformula, thus creating a "Sugar Price Policy".  The goal is to attract investment to revive sugar
production, as all sugar plants were destroyed in the Civil War.  Investors negotiate a price policy to
assure profitability.  A minimum import price was created equal to a world minimum price (or world
production price).  This price is monitored monthly and, if necessary, the surcharge is levied.
Cement37. The Mozambican Government has granted protection to investors for a certain period of time
as an inducement to build a domestic cement industry.  A 12.5% import surcharge, imposed on
10 March 1997, remains in effect.  The Government is committed to phasing out this protection.
Steel sheets and tubes
38. The Government accepted complaints from domestic interests that imports of steel sheets
from Zimbabwe and South Africa were being dumpe d/sold below market prices on the Mozambican
                                                     
2 The Mozambique Government coordinates contracts of migrant miners for South African mines.
Over half the salary of a miner is paid to the Mozambique Government for the benefit of miners' families inMozambique, while a small portion of the wages are paid to  the workers themselves who, in return, are allowed
duty-free entry for items purchased in South Africa.Mozambique WT/TPR/S/79
Page 33
market.  Rather than limiting application of the surcharge to products from those two countries, it was
applied to all imports at 12.5%, beginning 25 August 1997;  the measure remains in place.
(iv) Rules of origin
39. Rules of origin are relatively new to Mozambique, and government officials are just
beginning to adapt to those contained in international agreements to which Mozambique is a party.
Mozambican law defines the country of origin of a product as that in which it underwent its lastrelevant transformation.  Such a transformation implies the addition or accretion of value of at least
35% of the final value of the good.  The law provides further clarification of what may be considered
within that 35%.  Exception to this definition is allowed where Mozambique enters into a treaty or
international accord with different origin arrangements.
40. The origin of imported goods is proven by documents, which are required by law to
accompany the goods.  In cases where any of the documents appear faulty, officials may require a
certificate of origin.  Such a certificate must be issued either by the Mozambican consular or
commercial mission in the country of origin, or by an entity competent for that purpose, as recognized
in treaties or commercial agreements ratified by Mozambique.
41. As a member of the Southern African  Development Community (SADC) Treaty,
Mozambique must adopt SADC rules of origin (provisions of the Trade Agreement approved in
August 2000) in its trade relations with other members (Chapter II(5)(iii)(a)).
42. In the framework of the Cotonou Agreement (previously the Lomé Convention), complete
processing (goods entirely produced on the spot), or adequate processing (change of tariff position) of
a product, confers upon it as place of origin the ACP country in which the processing took place.
(v) Anti-dumping, countervailing, and safeguard measures
43. Mozambique does not currently have any national legislation on anti-dumping,
countervailing, and safeguards measures, although of ficials indicate that the Government has begun to
consider the possibility of introducing measures in the future.
(vi) Prohibitions, quantitative restrictions, and licensing
44. Mozambique maintains a very limited number of import restrictions.  The restrictions
currently in force are retained for reasons of health, morals, or counterfeiting, and include productssuch as pornography, narcotic drugs, and certain used automobiles older than five years.  For items
subject to phytosanitary inspection, see section (ix)(b) below.  Certain products may be imported only
temporarily.  Other specific products subject to special import regulations and licensing include
certain medications, arms and explosives, certain used clothes, gold, silver and platinum, certain
foreign and domestic currency, and certain used tyres.  No information was made available to theSecretariat on the functioning of the import licensing system.
(vii) Reference prices
45. Only second hand automobiles are subject to reference prices.  For these items, the value
assigned to the car at point of import is the tax- inclusive wholesale value as determined using the
"Trade Guide", or the International Blue Book for autos.WT/TPR/S/79 Trade Policy Review
Page 34
(viii) Minimum import prices
46. There are only two provisions for minimum import prices, both reflecting efforts to eliminate
under-valuation by small importers at land borders.  One provision, relating to condensed milk, was
adopted as a reaction to the entry of small quantities of products by small traders taking advantage of
the price differential between South Africa and Mozambique.  The second relates to fresh produce.
The Ministry of Agriculture and Natural Resources, with the cooperation of the South AfricanGovernment, establishes weekly minimum prices.  Duties are collected based on these prices.
(ix) Standards and other technical requirements
(a) Standards, testing and certification
47. The National Institute of Normalization and Quality (INNOQ), created in 1993, is responsible
for standards issues.  INNOQ is an administrative ly and judicially, but not economically, autonomous
parastatal entity.  As there were no Mozambican standards before 1993, INNOQ's first task was to
create awareness of the need for national standards, the need to improve the quality of national and
imported products, and Mozambique's responsibility to  meet international norms.  According to the
statute that created it, INNOQ's main activities relating to standardization are responsibility for
certification, weights and measures, and quality management.
48. Relatively little funding is available to INNOQ.  There is no national laboratory facility, and
INNOQ's technical staff comprises only five people.  Nevertheless, INNOQ has begun a three-part
programme with the goal of producing national standards.  However, lacking a national quality policy,
Mozambique has no system to forbid entry of any product.  INNOQ officials believe that more
legislation and qualified inspectors are needed.
49. There are no national labelling requirements, although some are under development.
Hampering development is the absence of legislation related to weights and measures.  However,requirements for coordination within SADC, which include food labeling, may cause Mozambique to
give higher priority in this area.  Nevertheless, there is a need not only for national budget resources
in this area, but also for foreign assistance for both equipment and training.
50. Although INNOQ is the national contact point on technical barriers to trade (TBT), it rarely
receives information in a timely fashion.  Staffing problems also hamper INNOQ's ability to respondto foreign enquiries on TBT matters.
51. In order to facilitate the effort to create national standards, four major technical committees
have been created:  (i) chemicals and environmental safety;  (ii) electrical and communications;  (iii)
civil construction and mechanical engineering;  and (iv) basic standards (ISO 900/14,000) and ISO
1000 (including units and terminology).  These committees recommend priorities for Mozambicanstandards;  they do not set the standards.  Each committee creates technical sub-committees;  there are
currently 11 of these.
52. The first results of recent efforts are almost complete.  Seventeen standards are in the final
stages of development, and 25 others are in process.  When the standards are approved, their
application will only be voluntary until new legislation has been formulated to make some mandatory.Two early candidates for mandatory standards are cement and salt.
53. There is pressure from many quarters to assure a better quality of cement than has been
common in the country.  The tradition of bad cement, and the possibility for damage or an accident
resulting therefrom, led the organizers of the large Mozal aluminum investment project to insist onMozambique WT/TPR/S/79
Page 35
certified cement.  To meet this requirement, the Mozambican authorities used South African
standards.
54. The absence of iodine in many parts of the country explains the high incidence of goitre
condition in Mozambique.  Mozambique is working with UNICEF, and the result may be a
recommendation for an even higher level of iodine in salt (based on CODEX) than that under
discussion at the regional level.
(b) Sanitary and phytosanitary standards (SPS)
55. The Ministry of Agriculture and Natural Resources (MANR) is responsible for all plant and
plant products (propagative matter, seed, and seedlings) in Mozambique.  The Secretariat was unable
to obtain lists of SPS regulations and government practices.  Plants, roots,  tubers, bulbs, stakes,
branches, shoots, seeds, and honey, as well as their packaging are subject to phytosanitary inspectionbefore being cleared by Customs.  There are only a few customs agents with experience of these SPS
standards.  At present, the Government lacks an of ficial SPS enquiry point.  Internal discussions are
ongoing to resolve this issue, and one possible outcome is that INNOQ and the MANR become a joint
enquiry point.  MANR is responsible for negotiating SPS trade matters, and for providing
notifications to the Ministry of Commerce, which in turn communicates these to relevant internationalbodies, such as the WTO.
56. The MANR's Veterinary Services Division is responsible for inspection and certification
procedures relating to health and sanitary requirements.  Animals, animal residue, and their products
cannot be imported without authorization from the Veterinary Services.
(x) Government procurement
57. Mozambique is neither a signatory nor observer to the WTO Plurilateral Agreement on
Government Procurement.  The Ministry of Planning and Finance (MPF) supervises all governmentprocurement activities in Mozambique, either directly or indirectly, through authority deriving from
1997 regulations amending the basic law of 1994.  Government procurement activities are subject to
one of two procedures:  one for large purchases, and one for small purchases.
58. Large purchases (defined as those over Mt 12 billion or approximately US$750,000) usually
involve international funding, and competitive international tenders are the norm.  The procurementregulations of the donor organization are followed.  Competitors for these can be either domestic or
foreign firms, and representation or registration in Mozambique is not a requirement to bid.  No
preferences are given to national firms, but there is a 10% preference for "national products", i.e.
products whose final processing takes place in Mozambique.
59. The procedures for small purchases are more complex.  There is a permanent Commission in
the MPF comprising representatives from all ministries.  Similar commissions operate in provincial
governments.  Each year, after public tenders, the Commission publishes a list of prices and accepted
bidders for each product.  The actual procurement is made by the responsible ministry, which has its
own Board responsible for procurement.  For very small procurement matters (currently below about
US$3,000), a ministry may decide to make a purchase after a "special competition".  Requests fortenders may vary, but all must be published.  A representative from the MPF participates in the
decision-making process in every ministry.  For purchases in excess of US$3,000, procurement must
revert to the permanent inter-ministerial commission.  Additionally, there are commissions that
examine each purchase, upon receipt, to ensure that the quantity and quality delivered is consistent
with the intentions of the purchase.  The intent of  the above special competition is to lower the price
set by the MPF's more general competition.WT/TPR/S/79 Trade Policy Review
Page 36
60. Special tenders (with limits below US$300) may be held in order for a ministry to purchase
goods that are not on the general list and/or not eligible for competition.  In such cases, the ministry
can request quotes from three to six firms.
61. Competition for procurement of less than about US$750,000 is open only to companies
registered in Mozambique, regardless of whether the company is domestic or foreign owned.
Companies are also required to be registered with the MPF.  As in larger procurement, nationalproducts (those whose final processing is in Mozambique) have a 10% preference.
(xi) Local-content requirement
62. The authorities have indicated that Mozambique does not have any local-content
requirements.
(3) M
EASURES DIRECTLY AFFECTING EXPORTS
63. As part of Mozambique's trade liberalization efforts, foreign exchange controls have
gradually been relaxed.  The external-sector has been opened to market forces of demand and supply,
rendering unnecessary the control of external-sector operations in terms of documentation and
approvals.  Accordingly, as controls on fore ign exchange were relaxed, the Technical Unit for
Customs Restructuring (UTRA) assumed responsibility for the minimal oversight still required.  Withrespect to exports, liberalization measures have included the removal of export registration
requirements and of export licence requirements in order to make export processes shorter, easier,
faster, and less cumbersome.
(i) Regulations
64. At the preshipment stage, all exports must be declared to the relevant Customs office on the
Single Administrative Document (DU).  The DU,  which is also used for importation, captures
important information, including for monitoring exports, and providing all trade statistics to theinterested agencies.
65. An exporter must also complete a sales invoice describing the type of goods to be exported,
quantity, unit price, total value, and volume of export.
66. Exports from Mozambique must be paid for in foreign currency unless otherwise permitted by
the Bank of Mozambique.  Exporters are urged to use commercial banks as much as possible throughthe establishment of letters of credit.
67. Export of certain goods that do not involve any payment in foreign exchange, such as
personal effects, gifts, goods for repair, diplomatic cargo, souvenirs, trade samples, and goods for
display in foreign exhibitions, are handled by the Customs office subject to completion of a DU.
68. Exporters must base quotations, as much as possible, on international market prices
depending on the quality of their product.  Customs authorities are instructed to confirm the unit
prices and value of goods to be exported to avoid low quotations and under-invoicing.
(ii) Export duties and taxes
69. Mozambican policy is to apply no export taxes.  There is one exception:  a surcharge on raw
cashews, for which the rate was 18% as of 31 July 2000.  The raw cashew surcharge resulted fromintense domestic pressure from the cashew processing industry.Mozambique WT/TPR/S/79
Page 37
(iii) Prohibitions, licences, and other measures restricting exports
70. Exports of certain goods are prohibited.  These include food products that do not meet
domestic standards, certain metallic containers, counterfeit goods, ivory and ivory products unless
specifically authorized, currency above a certain limit, and art and other cultural patrimony without
prior permission.
71. Other goods may be exported only under special conditions, i.e. only with permits issued by
relevant government agencies.  Such g oods include animals and animal products
(Veterinary Services), various items of historical importance (Ministry of Culture), gold and silver
(Bank of Mozambique), poisonous or toxic substances and narcotics (Ministry of Health), precious
wood, and precious and semi-precious gems and minerals (various authorities).  Certain other goods
and products may be exported only temporarily.
(iv) Export subsidies
72. According to the authorities, Mozambique does not subsidize any exports of goods or
services.
(v) Duty and tax concessions
73. Incentives and concessions granted to companies qualified to operate in export processing
zones are discussed in Chapter II(4)(vi)).
(vi) Export promotion, financing, and assistance
74. Mozambique provides only minimal financial support to exporters.  The Export Promotion
Institute (IPEX), a small organization with a staff of 35, was established in 1990.  The main purpose
of IPEX is to assist exporters in promoting their goods.  Other main activities include the
identification and development of export markets;  organization of trade fairs, exhibitions and trade
missions;  organization of training for export operators;  and trade information dissemination.  At theinternational trade fairs organized by IPEX, the display stand for national exporters is sponsored by
IPEX.  IPEX has received funding from the World Bank, and is assisted by the International Trade
Centre (ITC).
75. Occasionally, IPEX performs market research studies, for example on wood products, food
and beverages.  IPEX also advises the Ministry of Industry and Trade on issues related to exportpolicies and procedures.
76. In 1999, IPEX inaugurated a Trade Marketing Information Centre (TMIC) establishing an
export library, and allowing use of the Internet for trade-expansion purposes.  It is too soon to
evaluate the effects of these efforts.  At present TMIC services are free, but it is likely that fees will be
charged once it becomes effective.
(4) O
THER MEASURES AFFECTING PRODUCTION AND TRADE
(i) State trading, state enterprises, and privatization
77. The Government of Mozambique does not reserve any exclusive trade privileges to
state-owned enterprises.WT/TPR/S/79 Trade Policy Review
Page 38
78. Mozambique's first legislation requiring the Government to begin to privatize companies that
were 100% state owned was passed in 1989.3  Law No. 15, passed in 1991, mandated that sales of
these companies be conducted openly.  Between 1989 and 1999, over 1,200 companies were
privatized.  Most of the privatized companies were relatively small, and were sold by public auction;
70 of the companies were considered large, and were handled differently.  Provisions have also been
adopted for assets of companies being privatized to be acquired through recourse to external debtconversion.
79. While the vast majority of privatized companies were sold out right (100%), the Government
of Mozambique has retained a 20% or greater ownership interest in about 200 companies considered
particularly important or in important sectors.
4  It is expected that the Government's position in most
companies will continue to dwindle, but that it will retain ownership interests in companies or sectorsconsidered important.
80. Some privatized companies have failed (e.g. Air Mozambique), and the Government has
resumed ownership to keep them functioning.  In most of these cases, the Government has maintained
an 80% ownership interest, while employees have received the remaining 20% interest.
81. The privatization programme is supervised by the Inter-Ministerial Commission for
Economic Restructuring (CIRE).  The coordinating body for restructuring medium-scale and large
enterprises is the Technical Unit for Enterprise Re structuring (UTRE) within the Ministry of Planning
and Finance.  The Prime Minister makes the final decision regarding investment in these companies.
82. A variety of methods are used in privatization, including sale of a majority stake, joint
venture, and direct negotiation or tenders for an operating/management concession.  Approximately
50% of the equity amount in the sales completed by UTRE is of foreign origin.  Concern over the
small number of Mozambican investors in privatized companies led to the adoption of a 1997 decreeproviding support to national entrepreneurs by extending the terms of payment, application of a more
favorable interest rate, and the possibility for the owner to mortgage up to 60% of the value of the
acquired asset, even before all payments have been made.
83. Revenue from the privatization process amounted to US$12.7 million in 1998, US$11 million
in 1997, US$33.2 million in 1996, and US$61.9 million in 1994/95.
84. The basic privatization programme ended in 1999.  About 17 companies, considered as public
utilities, e.g. the postal service, telecommunications, public transport in Maputo, ports, and railroads
have not yet been privatized.  However, the Government of Mozambique is expected to announce a
new policy soon.
(ii) Subsidies and other forms of production assistance
85. Provisions of the Mozambican investment regulations, and other legislation pertaining to
foreign investment, are discussed in Chapter II(4)(iii)).
86. Incentives and concessions granted to companies qualified to operate in export processing
zones are discussed in Chapter II(4)(vi)).
                                                     
3 Decree 21 of 1989.
4 Information provided by the Mozambique authorities.Mozambique WT/TPR/S/79
Page 39
(iii) Measures for the protection of intellectual property rights
87. Responsibility for Mozambique's intellectual property rights protection is divided between
two government agencies.  The Central Department of Industrial Property (DCPI) of the Ministry of
Industry and Commerce is responsible for the administration of industrial property rights, including
trade marks, service marks, patents, industrial designs, utility models, commercial names,
geographical indications and denominations of origin.  Responsibility for copyrights rests with theNational Institute for Books and Recordings, within the Ministry of Culture.
88. The first indication of government attention to industrial property protection was the creation
of DCPI in 1995.  Mozambique joined the WIPO  in 1996, the Paris Convention in 1997, and the
Madrid Agreement in 1998.  The country's first law, a comprehensive Code of Industrial Property
Rights, came into force in 1999.  Additionally, Mozambique joined the Patent Co-operation Treaty(PCT) in May 2000, and is a member of the Af rican Regional Industrial Property Organization
(ARIPO) and its Harare Protocol.  The 1999 law was written with the assistance of the WIPO;  it has
not yet been notified to the WTO.
89. Under Mozambican law, protection for patents is provided for 20 years.  Trade mark
protection is for ten years, renewable.  Geographical indicators of origin are protected forindeterminate periods.  Between July 1999 and July 2000, a total of 20 patents were requested.  All
are still under investigation.  From July to December 1999, about 3,000 requests for trade marks were
received.
90. There is no Mozambican copyright law, and the country is not a member of any related treaty.
Mozambique still has on its books a 1966 Portuguese law maintained since independence.  A draft of
a copyright law, however, is working its way through the legislative process.  Government officials
have indicated that the draft law was written within the context of the WTO TRIPS Agreement.
91. Enforcement of the current industrial property laws is minimal.  Generally, the authorities
wait for an aggrieved party to file a charge, and then proceed to trial.  To date, there has been only one
case in which the defendant prevailed.  Government authorities have noted a serious recent increase of
recording piracy and are considering how to stop it.  Unfortunately, current law does not provide a
role for the police, and, although customs law prohibits the import of pirated goods, attention to thesematters is only beginning to be addressed by customs officials.  In once instance, 4,000 cassettes were
confiscated at the border.  One major additional problem is the lack of competence among judges to
deal with these issues.
92. The country's growing awareness of the implications of intellectual property protection is
apparent in ongoing efforts to create a National Institute of Intellectual Property, which wouldeventually be financially, administratively, and operationally autonomous.