RESTRICTED  
  
WT/TPR/S/3 49 
8 November  2016 
(16-6111) Page: 1/63 
Trade Policy Review Body   
 
TRADE POLICY REVIEW  
REPORT BY THE SECRET ARIAT  
SOLOMON ISLANDS  
This report, prepared for the third Trade Policy Review of Solomon Islands, has been drawn up by 
the WTO Secretariat on its own responsibility. The Secretariat has, as required by the Agreement 
establishing the Trade Policy Review Mechanism (Annex 3 of the Marrakesh Agreement 
Establishing the World Trade Organization), sought clarification from Solomon Islands on its trade 
policies and practices.  
 
Any technical questions arising from this report may be addressed to Arne Klau 
(Tel: 022 739 5706)  and Nelnan Koumtingué  (Tel: 022 739 6252).  
 
Document WT/TPR/G/3 49 contains the policy statement submitted by  Solomon Islands.  
 
 
Note: This report is subject to restricted circulation and  press embargo until the end of the first 
session of the meeting of the Trade Policy Review Body on Solomon Islands. This report was 
drafted in English.  WT/TPR/S/3 49 • Solomon Islands  
 
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  CONTENTS  
SUMMARY  ................................ ................................ ................................ ........................  5 
1   ECONOMIC ENVIRONMENT  ................................ ................................ ..........................  8 
1.1   Overview  ................................ ................................ ................................ ....................  8 
1.2   Recent Economic Developments  ................................ ................................ ....................  9 
1.3   Main Macroeconomic Policy Developments  ................................ ................................ .....11 
1.4   Main Structural Policy Developments and Challenges  ................................ ...................... 11 
1.5   Balance -of-Payments Developments  ................................ ................................ ............. 12 
1.6   Trade Performance  ................................ ................................ ................................ .....13 
1.7   Foreign Direct In vestment  ................................ ................................ ........................... 15 
2   TRADE AND INVESTMENT  REGIME  ................................ ................................ ............  16 
2.1   General Framework  ................................ ................................ ................................ ....16 
2.2   Trade Policy Objectives and Formulation  ................................ ................................ ........ 17 
2.3   Trade Agreements and Arrangements  ................................ ................................ ........... 18 
2.3.1    WTO ................................ ................................ ................................ ...................... 18 
2.3.2    Regional and preferential agreements  ................................ ................................ ........ 19 
2.3.2.1    Pacific Islands Forum  ................................ ................................ ............................. 19 
2.3.2.2    Melanesian Spearhead Group Trade Agreement  ................................ ........................ 19 
2.3.2.3    SPARTECA  ................................ ................................ ................................ ............ 19 
2.3.2.4    PICTA  ................................ ................................ ................................ .................. 20 
2.3.2.5    PACER  ................................ ................................ ................................ ................. 20 
2.3.3    Other agreements and arrangements  ................................ ................................ ......... 20 
2.4   Investment Regime  ................................ ................................ ................................ ....20 
3   TRADE POLICIES AND P RACTICES BY MEASURE  ................................ ........................  23 
3.1   Measures Directly Affecting Imports  ................................ ................................ .............. 23 
3.1.1    Customs procedures and requirements  ................................ ................................ .......23 
3.1.2    Customs valuation  ................................ ................................ ................................ ...24 
3.1.3    Rules of ori gin ................................ ................................ ................................ ......... 24 
3.1.4    Tariffs  ................................ ................................ ................................ .................... 24 
3.1.4.1    Applied MFN tariffs  ................................ ................................ ................................ 24 
3.1.4 .2   Tariff bindings  ................................ ................................ ................................ ......27 
3.1.4.3    Tariff exemptions and concessions  ................................ ................................ .......... 29 
3.1.4.4    Tariff preferences  ................................ ................................ ................................ ..29 
3.1.5    Other duties and taxes  ................................ ................................ ............................. 30 
3.1.6    Import prohibitions, restrictions, and licensing  ................................ ............................ 30 
3.1.7    Anti-dumping, countervailing, and safeguard measures  ................................ ................ 31 
3.1.8    Standards and other technical requirements  ................................ ............................... 31 
3.1.9    Sanitary and phytosanitary requirements  ................................ ................................ ....32 
3.2   Measures Directly Affecting Exports  ................................ ................................ .............. 33 
3.2.1    Export procedures and require ments  ................................ ................................ .......... 33 WT/TPR/S/3 49 • Solomon Islands  
 
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  3.2.2    Export taxes, charges, and levies  ................................ ................................ ............... 34 
3.2.3    Export prohibitions, restrictions, and licensing  ................................ ............................. 34 
3.2.4    Export support and promotion  ................................ ................................ ................... 35 
3.2.5    Export -processing zones  ................................ ................................ ........................... 35 
3.2.6   Export finance, insurance, and guarantees  ................................ ................................ ..35 
3.3   Measures Affecting Production and Trade  ................................ ................................ .......35 
3.3.1    Incentives  ................................ ................................ ................................ ............... 35 
3.3.2    Competition policy and price controls  ................................ ................................ ......... 36 
3.3.3    State trading, state -owned enterprises, and privatization  ................................ ............. 36 
3.3.4    Government procurement  ................................ ................................ ......................... 37 
3.3.5    Intellectual property rights  ................................ ................................ ........................ 38 
4   TRADE POLICIES BY SECTO R ................................ ................................ .....................  40 
4.1   Agriculture, Fisheries, and Forestry  ................................ ................................ ............... 40 
4.1.1    Agriculture  ................................ ................................ ................................ .............. 40 
4.1.2    Fisheries  ................................ ................................ ................................ ................. 42 
4.1.3    Forestry  ................................ ................................ ................................ .................. 43 
4.2   Mining and Energy  ................................ ................................ ................................ ......45 
4.2.1    Mining  ................................ ................................ ................................ .................... 45 
4.2.2    Energy  ................................ ................................ ................................ ................... 46 
4.2.2.1    Electricity  ................................ ................................ ................................ ............. 46 
4.2.2.2    Petroleum  ................................ ................................ ................................ ............ 47 
4.2.3    Manufacturing  ................................ ................................ ................................ ......... 48 
4.3   Services  ................................ ................................ ................................ .................... 48 
4.3.1    Overview  ................................ ................................ ................................ ................ 48 
4.3.2    Financial sector  ................................ ................................ ................................ .......48 
4.3.2.1    Banking  ................................ ................................ ................................ ............... 49 
4.3.2.2    Credit unions  ................................ ................................ ................................ ........ 50 
4.3.2.3    Insurance  ................................ ................................ ................................ ............ 50 
4.3.3    Telecommunications  ................................ ................................ ................................ .51 
4.3.4    Transport  ................................ ................................ ................................ ................ 53 
4.3.4.1    Maritime transport and ports  ................................ ................................ .................. 53 
4.3.4.2    Air transport and airports  ................................ ................................ ....................... 54 
4.3.5    Tourism  ................................ ................................ ................................ .................. 55 
4.3.6    Professional services  ................................ ................................ ................................ 56 
REFERENCES  ................................ ................................ ................................ ..................  58 
5   APPENDIX TABLES  ................................ ................................ ................................ .... 60 
 
CHARTS  
 
Chart 1.1 Direction of merchandise trade , 2010 -15 ................................ ................................ 14 
Chart 3.1 Distribution of MFN applied tariff rates, 2009 and 2016  ................................ ............ 27 WT/TPR/S/3 49 • Solomon Islands  
 
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TABLES  
 
Table 1.1 Se lected macroeconomic indicators, 2010 -15 ................................ ...........................  8 
Table 1.2 GDP by sector, 2010 -15 ................................ ................................ ........................ 10 
Table 1.3 Balance of payments, 2009 -15 ................................ ................................ .............. 12 
Table 3.1 Tariff structure, 2009 -15 ................................ ................................ ....................... 25 
Table 3.2 Tariff summary, 2016  ................................ ................................ ........................... 26 
Table 3.3 Products for which applied rates exceed bound rates, 2016  ................................ .......27 
Table 3.4 Products for which applied rates may exceed bound rates, 2016  ................................ 28 
Table 3.5 Solomon Islands preferential tariffs, 2016  ................................ ............................... 29 
Table 3.6 Goods subject to import licensing, 2016  ................................ ................................ .31 
Table 3.7 Export taxes, 2016  ................................ ................................ ............................... 34 
Table 3.8 Purchasing limits, 2016 ................................ ................................ ......................... 37 
Table 3.9 Summary of the protection of intellectual proper ty rights, 2016  ................................ .38 
Table 4.1 Production and exports by major commodity, 2010 -15 ................................ ............. 40 
Table 4.2 Generation and sales of electricity , 2010 -15 ................................ ............................ 46 
Table 4.3 Financial system assets, 2010 -15................................ ................................ ........... 48 
Table 4.4 Financial stability indicators, 2010 -15 ................................ ................................ .....49 
 
APPENDIX TABLES  
 
Table A1.1 Merchandise exports by product group, 2010 -15 ................................ .................... 60 
Table A1.2 Merchandise imports by pro duct group, 2010 -15 ................................ ................... 61 
Table A1.3 Merchandise exports by destination, 2010 -15 ................................ ........................ 62 
Table A1.4 Merchandise imports by origin, 2010 -15 ................................ ............................... 63 
 WT/TPR/S/3 49 • Solomon Islands  
 
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  SUMMARY  
1. Solomon Islands is a least developed country and shares many of the challenges of other 
small island developing countries. The economy relies strongly on a few natural resources 
(including logging), and is he avily exposed to natural disasters and external shocks. Growth has 
ranged between 2% and 10% since 2010. Since its last TPR, Solomon Islands has recorded some 
positive strides in economic development, including a decline in the incidence of poverty and a 
strong increase in per capita income. However, unemployment is prevalent and the economy is 
dominated by informal and subsistence activities. Merchandise exports continue to be heavily 
concentrated in logs and fish. Imports are dominated by machinery and tr ansport equipment, food 
and live animals, and mineral fuels. Australia, China, and the EU are among Solomon Islands' main 
trading partners.  
2. During the review period, Solomon Islands moved from a US dollar peg to a peg against a 
basket of currencies. New l egislation was passed in 2012, setting domestic price stability as the 
primary objective of monetary policy and strengthening the independence of the Central Bank of 
Solomon Islands. Major reforms in public finances include the adoption of a new debt manag ement 
strategy and a new public financial management law, and the strengthening of the revenue 
collection system. A large part of the budget is financed by external donors, most notably 
Australia. Solomon Islands' foreign reserves position remained at a co mfortable level during the 
review period. FDI inflows have been relatively low, with the main investment sectors being 
services, forestry, mining, and tourism.  
3. The National Development Strategy 2016 -2035 is Solomon Islands' new long -term economic 
policy do cument. Its main policy objectives are inclusive development and poverty alleviation. 
These are to be achieved through macroeconomic stability, containment of population growth, and 
targeted social spending. The sources of growth are to be diversified away  from logging towards 
other sectors such as mining, fishing, and tourism. Improving the environment for business, trade 
and private sector -led growth is also a priority.  
4. Solomon Islands adopted its first formal trade policy framework in 2015, with a view t o 
mainstreaming trade into the National Development Strategy and improving the medium - to long -
term performance of the economy in the areas of trade and foreign direct investment. This is to be 
achieved by, inter alia,  addressing supply -side constraints an d taking advantage of opportunities in 
existing international agreements.  
5. Solomon Islands has yet to ratify the Trade Facilitation Agreement, but has already notified 
its category A commitments under the Agreement.  Between 2009 and July 2016, Solomon Islan ds 
did not submit any other notifications to the WTO. While Solomon Islands' current interest in the 
multilateral trading system is limited, the authorities indicate that the importance of WTO issues 
could increase with the country's graduation from LDC st atus. 
6. Solomon Islands is party to several overlapping regional trade and economic cooperation 
arrangements: the Pacific Islands Forum, the Pacific Agreement on Closer Economic Relations, the 
South Pacific Regional Trade and Economic Cooperation Agreement, the Melanesian Spearhead 
Group Trade Agreement, and the Pacific Island Countries Trade Agreement. As a least developed 
country, Solomon Islands is also eligible for the Generalized System of Preferences schemes of 
most developed Members of the WTO.  
7. All fo reign investment must be registered. The important contribution of FDI to economic 
development is recognized by the Government, and Solomon Islands' investment regime is 
relatively open. Fourteen activities, including retail trading and domestic transport services, are 
reserved for Solomon Islands nationals. Exemption from customs duties on imported capital goods 
is the most important investment incentive; it is available to foreign and domestic investors alike. 
While no restrictions are placed on remittanc es of dividends, profits, and other earnings, approval 
from the Central Bank is required. In practice, investors may also be confronted with the difficulty 
of identifying land owners and, once a land transaction has been sealed, security of the land title.   
8. In January 2015, customs migrated to ASYCUDA World. All customs declarations must be 
submitted electronically. Imports must be reported to customs by lodging a cargo manifest, the bill 
of lading or airway bill, the commercial invoice, and a customs decla ration. Additional information WT/TPR/S/3 49 • Solomon Islands  
 
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  is required when imported goods are subject to licensing. Since Solomon Islands' last TPR, new 
legislation has been adopted to give effect to the WTO Customs Valuation Agreement. Customs 
clearance of imports usually takes bet ween two and three days.  
9. Solomon Islands' tariff schedule comprises 5,512 tariff lines at the HS eight -digit level; non -
ad valorem  tariff rates are applied on 1.7% of all tariff lines. The simple average applied MFN rate 
increased slightly during the revie w period, from 9.1% in 2009 to 9.3% in 2016. The average 
applied tariff for agriculture (WTO definition) is 10.1%, slightly higher than the average for non -
agriculture (9.1%). More than 82% of all ad valorem  tariff lines carry an MFN rate of 10%, and 
anoth er 15% have a rate of 5%. Less than 1% of the total tariff lines are duty -free. Solomon 
Islands has bound all of its tariff lines, mostly at 80%. However, for 58 tariff lines (mainly various 
seeds, sugar, and alcoholic beverages), applied rates still excee d their bindings. Solomon Islands 
grants preferential tariffs to other members of the Pacific Islands Trade Agreement and the 
Melanesian Spearhead Group. The importance of import duties as a source of government revenue 
has declined significantly in recent  years.  
10. Other charges levied by Solomon Islands include goods tax, sales tax, and excise duties. The 
application of internal taxes seems to be both discriminatory and inconsistent: for example, the 
goods tax rate is higher for imports than for equivalent d omestic goods. On the other hand, excise 
duties are applied only on domestically produced goods.  
11. Solomon Islands maintains import prohibitions to protect public health, safety and morals, 
and the environment. Certain goods, including food products, are sub ject to import licensing.  
Solomon Islands does not have safeguard, anti -dumping or countervailing duty legislation, nor has 
it applied any safeguard, anti -dumping or countervailing duties.  
12. Solomon Islands has limited institutional capacity to adopt and enf orce technical regulations 
and conformity assessment procedures. There is no centralized standardizing body, nor is there an 
inventory of technical regulations or conformity assessment procedures in force; standards are 
adopted and administered by various government agencies and ministries. Certain technical 
regulations applicable on imports are laid down in the Customs and Excise Act.  
13. New legislation on biosecurity was adopted in 2013. Under the Biosecurity Act 2013, the 
Government may regulate imports of plants, animals and products thereof to prevent the 
introduction of diseases and pests. The Act also establishes the procedure for the development of 
SPS measures to be applied on imports. A licence issued by Biosecurity Solomon Islands is 
generally requir ed to import plants, animals, and their products. The capacity to undertake risk 
assessments in the area of SPS measures improved during the review period.  
14. There are no registration requirements for exporters who have a tax identification number. 
Customs c learance for exports usually takes between one and two days. Exports of various goods 
(including logs, fish, and timber) are subject to duties, with rates between 2.5% and 30% of the 
f.o.b. value. Specific duties are applied on logs. Fiscal income from exp ort taxes remains important 
for Solomon Islands, contributing around 16% to total public revenue. Public export support and 
promotion activities are limited.  
15. There is no generic competition law in Solomon Islands. Price controls are in place on 
various sta ples as a means to address competition perceived as being too low. Maximum prices 
are based on a mark -up system which allows traders to add a certain percentage on landed costs 
plus goods tax. State -owned enterprises are active in a number of key sectors o f the economy, 
including air transport, broadcasting, electricity, ports, and water.  
16. During the review period, new legislation on public procurement was adopted. A Central 
Tender Board is responsible for managing the tender process of goods or services for  all 
procurement above SI$500,000 (equivalent to US$63,000). Competitive tendering is required for 
all procurement exceeding SI$100,000. There are no provisions that grant foreign products or 
suppliers less than national treatment.  
17. Intellectual property la ws in Solomon Islands are mostly outdated, except for the Copyright 
Act 1987. However, since 2014, the Government has been developing a national IP strategy, and 
all IP legislation is currently being reviewed. Enforcement activities mainly consist of publi c WT/TPR/S/3 49 • Solomon Islands  
 
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  campaigns to raise awareness of IP issues and dissemination of information regarding intellectual 
property protection for creators.  
18. Agriculture (including fisheries and forestry) remains of major importance to the economy of 
Solomon Islands. Forest area covers about 80% of the land area, although it has been on a 
declining trend. The forest sector suffers from poor enforcement of the legislation; there are 
indications that under -invoicing and illegal logging is prevalent. Fisheries accounted for 11.5% of 
total exports in 2015. Solomon Islands is a member of the Parties to the Nauru Agreement, under 
which a Vessel Day Scheme (VDS) has been used collectively by members to manage their tuna 
stock since 2010.  
19. The mining industry is predominantly focused on the  extraction of gold and nickel. The 
output of the industry declined substantially following the closure of the only gold mine in the 
country in 2014. During the review period, the main legislation governing mining activities was 
amended, inter alia,  to int roduce a new tax regime and make provisions for the Government to 
require licence holders to build infrastructure as part of the licence agreement.  
20. The manufacturing sector is marginal in terms of contribution to GDP, and is largely geared 
towards the loc al market.  
21. Services continue to be the largest sector of the economy of Solomon Islands, accounting 
for about 57% of GDP in 2014. Financial system assets grew strongly during the review period. 
Access to financial services has been expanded through the Pac ific Financial Inclusion Programme 
(PFIP).  
22. In telecommunications, there has been significant growth in the mobile segment. The 
adoption of the Telecommunications Act in 2009 marked the liberalization of the sector. In 2009, 
the Government reached an agree ment with the historic operator to surrender its exclusive 
licence, thereby allowing the entry of another operator into the mobile market in 2010. The 
Telecommunications Commission of Solomon Islands was established in 2010 as the regulator of 
the sector. Since March 2015, it has been mainly funded by licence fees and a 2% levy on 
operators' revenues.  
23. Maritime transport is of vital importance to Solomon Islands owing to its geography of 
dispersed islands. Key reforms during the review period include: the es tablishment of the Solomon 
Islands Maritime Safety Administration in 2010 as the regulatory authority in the sector, and the 
introduction of a franchise shipping scheme in 2010 to provide shipping services to remote areas; 
subsidies accorded under the sche me are to be eliminated over a period of five to ten years.  
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  1  ECONOMIC ENVIRONMENT  
1.1  Overview  
1.1.  Since its previous trade policy review (TPR) in 2009, Solomon Islands' economic growth has 
been positive , although  the pace of growth has moderated in recent years . The economy remains 
dependent on a few natural resources (logging and fishing) and is vulnerable to commodity price 
declines. Solomon Islands has made some positive strides in economic development. Since 2010, 
gross national income per capita increased on  average by 16.3% each year to nearly US$2,000 in 
2015 (Table 1.1). The poverty incidence has declined over the past decade . However,  about 
12.7% of the population remains below the national poverty line  (compared to an estimate of 23% 
for the period 2005 -2006) , according to estimates based on the 2012 -13 Household Income and 
Expenditure Survey.1 The poverty headcount is estimated at 45.6% in 2012 based on  the 
international poverty line of $1.90 a day (2011 purchasing power parity).2 Solomon Islands ranked 
156th (out of 188 countries) on the 2014 UNDP's Human Development Index.3  
1.2.  Unemployment remains prevalent, especially among youth, and in rural areas. In 2012, 
youth unemployment was 20% in Honiara (the capital city) and reached 50% in some rural areas.4 
The economy is dominated by informal and subsistence activities; estimates from the 2009 census 
indicate that the formal economy employed only about 21% of the country's active population, the 
remainder being employed in the informal economy or subsistence economy.5  
Table 1.1 Selected macroeconomic indicators, 2010 -15 
  2010  2011  2012  2013  2014  2015a 
Nominal GDP (S I$ million)  5,416.0  6,774.0  7,540.0  7,738.0  8,542.0  8,948.0  
Nominal GDP (US$ million)  671.6  886.5 1,025.1  1,059.7  1,158.2  1,130.6  
GNI per capita, Atlas method (current US$)  910 1,120  1,520  1,830  1,830  1,940  
Inflation (CPI, % change)  1.1 7.3 5.9 5.4 4.8 2.9 
National account (2004 prices, %age change)  
Real GDP (2004 prices)  9.7 7.4 2.3 2.8 2.0 3.2 
 Consumption  8.9 -3.8 -0.2 6.6 5.4 1.2 
 Private consumption  7.7 3.7 3.6 4.0 4.3 0.0 
 Public consumption  10.0 -20.7 -9.9 12.8 8.0 3.7 
 Gross fixed capital formation  88.7 -53.0 3.5 1.9 2.8 0.0 
 Exports of goods and services  34.8 26.1 8.1 -7.3 -10.6 -3.0 
 Imports of goods and services  51.7 -6.8 3.6 -0.5 -0.6 -6.4 
  X of goods and services (% of GDP)  49.2 62.4 59.0 54.0 49.0 46.1 
  M of goods and services (% of GDP)  81.6 68.8 63.5 64.0 59.0 53.3 
Money and interest rates        
Money supply (M1, % chang e) 15.6 43.6 27.9 12.6 -1.7 23.3 
Deposit rate (%, period average)  3.29 2.00 0.86 0.29 0.25 0.31 
Lending rate (%, period average  14.43  13.17  11.28  10.77  10.91  10.48  
Public finance (% of GDP)        
Operating revenue  46.3 35.5 34.3 39.7 36.4 36.1 
 Tax re venue  36.2 30.7 31.4 32.5 29.5 29.8 
Expenditure  32.5 33.3 33.7 36.7 34.8 38.4 
Balance (excluding development grants)  13.7 2.2 0.6 3.0 1.7 -2.3 
Central government debt  27.8 21.6 17.6 15.5 13.3 10.4 
 Domestic debt  8.1 6.4 4.9 4.3 2.9 0.6 
 External debt  19.7 15.2 12.7 11.3 10.4 9.8 
External sector        
Real effective exchange rate (% change – increase 
is an appreciation)  -7.0 3.0 9.2 7.7 5.8 5.1 
                                                
1 Solomon Islands National Statistics Office (2015).  
2 Asian Development Bank (20 16a).  
3 UNDP online information. Viewed at: http://hdr.undp.org/sites/default/files/ranking.pdf .  
4 World Bank online information. Viewed at: http://www.worldbank.org/en/news/feature/2012/08/13/ 
solomon -islands -giving -a-second -chance -to-honiara -young -unemployed -population .  
5 Curtain, Richard ( 2013).  WT/TPR/S/3 49 • Solomon Islands  
 
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    2010  2011  2012  2013  2014  2015a 
SI$/US$ (period average)  8.06 7.64 7.36 7.30 7.38 7.91 
Current account (% of GDP)  -2.7 -0.3 0.4 -0.5 -0.6 -0.5 
Gross official reserves (end of period)b       
 in US$ millions  .. .. 500 528 514 520 
 in months of imports  .. .. 8.4 9.35 10.2 10.1 
.. Not available.  
a Estimate.  
b Includes SDR allocations made by the IMF to Solomon Islands in 2009 and actual and  prospective 
disbursements under the IMF -supported program mes. 
Source:  IMF online information; Solomon Islands National Statistics Office online information; Central Bank 
of Solomon Islands online information; and World Bank online information.  
1.3.  Solomon Isl ands is a least developed country. It is dependent to a large extent on donor 
assistance, which is on a declining trend. Net official development assistance declined from 
US$340 million in 2010 to around US$200 million in 2014, equivalent to US$346.9 per c apita.6  
1.4.  As in the case of some other small island developing states, Solomon Islands is faced with a 
number of challenges including: high cost of public service provision due to its geographical setting 
of dispersed islands7; a narrow economic base; and a  vulnerability to external economic shocks. 
Due to its geographical location, the country is susceptible to both hydro -meteorological (tropical 
cyclones, floods and droughts) and geophysical disasters (earthquakes, and resulting tsunamis and 
landslides). S olomon Islands was hit by several tropical cyclones during the review period. In 
February 2013, a magnitude 8.0 earthquake and a subsequent tsunami affected the Santa Cruz 
Islands, causing losses of life and damages to infrastructure in several communities . In April 2014, 
heavy rains brought by a tropical cyclone caused destructive flooding in some major cities, 
resulting in damages and loss estimated at US$107.8 million (equivalent to 9.2% of GDP).8  
1.2  Recent Economic Developments  
1.5.  After a contraction in 2009  resulting from the global financial crisis, the economy of Solomon 
Islands recorded two consecutive years of strong growth, mainly driven by log exports and strong 
growth in palm oil, cocoa, and fisheries. Economic growth has moderated since then, largely  on 
account of a reduced output and price decline in the commodity sector. In spite of severe flooding 
and associated damage, the economy expanded by 2% in 2014 on the back of an unprecedented 
rise in log production. In 2015, natural disasters (the El Niño  phenomenon and the Tropical 
Cyclone Raquel) severely impacted fish catch and agricultural production.9 However, the economy 
grew by 3.2%, led by logging activity, tuna processing, construction activity from rebuilding after 
the flooding, and retail servic es. Growth is expected to level off at 2.9% in 2016 , driven largely by 
fishing, construction, manufacturing, transportation, and communication sectors.10 
1.6.  Inflation peaked at 7.3% in 2011, reflecting increases in fuel and food prices (Table 1.1). It 
declined  to 4.8% in 2014 and moderated further to 2.9% by end -2015, on account of falling food 
and energy prices (despite supply shocks resulting from natural disasters).11 
1.7.  There was no major change in the overall sectoral pattern of GDP over the review period 
(Table 1.2). The services sector (including public administration and defence) remained the most 
important in terms of contribution to nominal GDP (57%) in 2014. The share of agriculture, 
fisheries and forestry in GDP declined slightly to 28% in 2014, and the contribution of the 
manufacturing sector remained at around 8% during the review period. Notable is the contribution 
                                                
6 World Bank, World Development Indicators. Viewed at: http://data.worldbank.org/data -catalog/world -
development -indicators .  
7 The majority of Solomon Islands' 512,2 00 inhabitants (as of end -2014) live in small rural communities 
on 90 islands, dispersed across 1.34 million square kilometres of ocean.  
8 Government of Solomon Islands (2014).  
9 IMF (2016).  
10 CBSI (2016a).  
11 CBSI (2015).  WT/TPR/S/3 49 • Solomon Islands  
 
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  of the mining sector, which peaked at 4.3% in 2011 (from 0. 7% in 2010), but dropped 
significantly following the closure of the Gold Ridge Mine (Section 4. 2.1).  
Table 1.2 GDP by sector, 2010 -15 
(%) 
  2010  2011  2012  2013  2014  2015  
GDP by sector (2004 prices, percentage change)  
Agriculture, forestry and fishing  14.8 2.3 -0.5 -0.8 7.1 1.4 
  Agriculture  9.5 8.5 -2.2 -1.4 1.8 -2.2 
  Forestry  33.7 -10.9 1.1 0.4 15.6 10.1 
  Fishing  2.1 8.3 2.4 -0.9 9.6 -2.3 
Mining  41.2 708.4  0.0 -13.0 -59.0 -50.0 
Manufacturing  8.5 2.3 2.1 0.1 3.5 5.4 
Electricity and water  75.8 -11.1 -15.0 11.0 8.5 5.4 
Constructi on -8.1 -16.6 -1.7 10.8 21.9 11.0 
Services  6.4 2.5 5.3 7.2 3.6 4.9 
 Retail and wholesale trade  2.1 0.5 5.2 6.5 7.9 7.0 
 Hotel and restaurants  25.5 4.9 8.5 8.5 4.3 5.0 
 Transport and storage  2.1 0.4 5.2 6.5 7.9 4.9 
 Communication  10.4 6.6 2.3 3.2 2.3 1.9 
 Financial intermediation  28.0 10.8 15.1 6.5 5.5 4.6 
 Insurance  28.1 11.0 14.9 6.6 5.5 4.6 
 Real estate and renting  3.7 3.7 3.7 3.7 3.7 4.2 
 Owner occupied dwellings  4.0 4.0 4.0 4.0 -0.6 4.5 
 Business services  8.2 9.5 3.8 5.3 0.0 2.2 
 Public admin istration and defence  5.0 -5.9 3.2 11.6 1.2 5.0 
 Education  1.9 4.6 5.3 15.2 -0.3 9.8 
 Health  2.4 7.0 1.6 18.9 -0.3 0.0 
 Other services  2.4 2.4 2.3 2.3 2.4 2.4 
Share of sectors in nominal GDP (value added, %)  
Agriculture, forestry and fishing  30.4 29.6 29.3 28.2 28.0 .. 
  Agriculture  18.1 18.2 16.6 16.1 15.9 .. 
  Forestry  9.6 8.4 9.0 9.2 9.6 .. 
  Fishing  2.8 3.0 3.7 2.9 2.5 .. 
Mining  0.7 4.3 2.7 2.6 0.8 .. 
Manufacturing  8.3 8.4 7.9 7.3 7.9 .. 
Electricity and water  2.0 2.0 2.4 2.7 3.2 .. 
Construct ion 2.3 2.1 2.4 2.6 3.1 .. 
Services  56.3 53.5 55.2 56.7 57.0 .. 
 Retail and wholesale trade  13.0 13.1 13.8 13.8 14.7 .. 
 Hotel and restaurants  2.5 2.8 2.7 2.8 2.3 .. 
 Transport and storage  5.5 5.2 5.1 5.0 5.2 .. 
 Communication  2.3 1.3 1.1 1.1 1.0 .. 
 Financial intermediation  2.4 2.5 2.9 2.9 3.1 .. 
 Insurance  1.3 1.4 1.6 1.6 1.7 .. 
 Real estate and renting  5.3 4.9 4.8 5.4 5.3 .. 
 Owner occupied dwellings  2.7 2.5 2.9 3.3 3.2 .. 
 Business services  0.7 0.8 0.8 0.8 0.8 .. 
 Public administration and de fence  10.2 9.0 9.2 9.6 9.5 .. 
 Education  4.8 4.6 4.7 5.0 4.8 .. 
 Health  2.0 1.9 2.1 2.2 2.2 .. 
 Other services  3.7 3.4 3.5 3.2 3.3 .. 
.. Not available.  
Source:  Solomon Islands National Statistics Office online information; and Central Bank of Solomon I slands 
online information.  
1.8.  According to the IMF, medium -term prospects for economic growth are favourable, but risks 
are tilted to the downside.12 External risks include slowing growth in Asia and associated lower 
demand or prices of exports, the impact of the phenomenon El Niño on agricultural production and 
fish catch, and a steeper than expected withdrawal of foreign aid. Domestic risks include a 
projected decline in logging activity (although predictions have been overshot many times). 
Growth could be bo osted by persistently low oil prices, and possible spillovers from major 
infrastructure projects . 
                                                
12 IMF (2016).  WT/TPR/S/3 49 • Solomon Islands  
 
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  1.3  Main Macroeconomic Policy Developments  
1.9.  Monetary policy is the responsibility of the Central Bank of Solomon Islands (CBSI). During 
the review period, the poli cy framework was amended to set domestic price stability as the 
primary objective of the monetary policy, and strengthen the independence of the central bank.13 
The stability of the financial system is an additional objective subordinated to price stability . The 
CBSI pursues its objectives through the exchange rate regime, open market operations, and the 
cash reserve requirement for commercial banks. The monetary policy was mostly accommodative 
over the review period, in an effort to support economic growth.  
1.10.   CBSI is also tasked with the responsibility of determining and implementing the exchange 
rate policy. The broad objectives of the exchange rate policy are to maintain the competitiveness 
of exports and production for the domestic market, and to protect ex ternal reserves. In 
October  2012, Solomon Islands moved from a US dollar peg to a peg against an invoice -weighted 
basket of currencies, with the bilateral rate against the US dollar (the main invoicing currency) not 
allowed to deviate beyond a margin of 1% in either direction from a pre -set base rate.14 The 
basket of currencies consisted of the Australian dollar, the British pound sterling, the Japanese 
yen, the New Zealand dollar, and the US dollar. The weighting structure of the basket is not made 
public. In September 2014, CBSI decided to remove the operational band around the exchange 
rate against the US dollar, allowing bilateral exchange rate s with currencies within the basket to 
adjust fully against each other to determine the value of local currency.  According to the 
authorities, the basket -peg regime has worked effectively since the removal of the 
operational band . In 2015, the Solomon Islands dollar ( SI$) depreciated by 6.8% against the 
US dollar (the major invoicing currency for its exports), and ap preciated against the Australian 
dollar and the New Zealand dollar.  
1.11.   Over the review period, the fiscal balance was mostly in surplus, owing mainly to tight 
controls and reduction of some recurrent spending. Following the flooding in 2014, donor partners 
were quick to respond by providing the Government with the fiscal space to cushion the revenue 
shortfall and accommodate high unplanned expenditure pressures. Further contributions came 
from unexpected increases in revenue from fishing licen ces, increased bu dget support and 
expenditure savings, mostly in the capital budget. As a result, the fiscal balance recorded a surplus 
equivalent to 1.7% of GDP (Table 1.1). In 2015, it slid into a deficit (against a projected surplus of 
5%) due mainly to an increase in g overnment -funded development activities (rural infrastructure 
and social services). The deficit is expected to widen to 8% of GDP in 2016, as the Government 
projects an expansionary budget with capital expenditures channelled to rural development, 
infrastr uctures, and service sectors. Major projects include the construction of hydropower 
generation facilities ( Section 4. 2.2), roads and wharfs, and legislative reforms. The deficit is 
expected to be financed mainly by the Government's accumulated savings. Ext ernal funding 
continues to account for a large share of government resources (15.7% of total revenue in 2014), 
although it is expected to decline in the medium term.  
1.12.   A new public financial management law (the Public Financial Management Act 2013) came 
into force on 1 January 2014. The Act sought to strengthen the framework for the management of 
public resources through increased transparency, accountability and fiscal monitoring, improved 
reporting and tighter regulation of procurements. A Debt Management Strategy was endorsed by 
the Government in 2012 (Section 1.5).  
1.4  Main Structural Policy Developments and Challenges  
1.13.   During the review period, major reforms in the taxation system included the institutional 
strengthening of the Inland Revenue Division, which resulted in : significant improvements in 
revenue collection, tax compliance, and auditing; the establishment of a committee dedicated to 
fiscal exemptions, which aimed to make the process of issuing exemptions more transparent, and 
reduced the number and v alue of exemptions granted; and the introduction of a new mining tax 
regime ( Section 4. 2.1).  
                                                
13 Central Bank of Solomon Islands Act of 2012.  
14 The base rate (per US$1) was set at SI$7.3561 until end -May 2013, and lowered to SI$7.2833 from 
June 2013 to March 2014.  WT/TPR/S/3 49 • Solomon Islands  
 
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  1.5  Balance -of-Payments Developments  
1.14.   The current account improved from a record deficit in 2010 to a surplus of US$26.4 million 
in 2012 owing mainly to higher export commodity prices (logs and minerals) (Table 1.3); it swung 
back to a deficit in 2013 as commodity prices fell and log production declined.15 In 2014, 
investment income outflows increased to US$48.6 million, leading to a further deterioration of the 
current account. The secondary income is on a worsening trend as donor assistance continued to 
decline. According to the IMF, the current account deficit is expected to deteriorate further in 2016 
and 2017 as lower mineral and log exports are anticipated.16  
Table 1.3 Balance of payments, 2009 -15 
(US$ million)  
  2009  2010  2011  2012  2013  2014  2015  
Current account  -59.5  -143.9  -18.8  26.4  -38.5  -50.3  -17.5  
Goods and services balance  -119.8  -232.0  -72.9  -18.6  -139.0  -116.7  -81.7  
 Trade balance  -74.1  -136.4  -3.4  65.6  -16.8  -4.9  -5.8  
   Exports  164.9  224.0  419.7  499.7  447.8  455.2  419.9  
   Imports  239.0  360.3  423.0  434.1  464.6  460.1  425.7  
  Services balance  -45.7  -95.6  -69.5  -84.2  -122.2  -111.8  -75.9  
   Credit  59.3  91.9  117.5  119.1  125.7  111.8  101.2  
    Transport  13.8  32.1  20.2  27.4  29.5  21.3  26.2  
    Travel  33.4  43.5  57.3  54.1  60.6  55.3  47.4  
   Debit  105.0  187.5  187.1  203.3  248.0  223.6  177.1  
    Transport  35.6  44.9  50.2  50.1  62.6  66.0  56.0  
    Travel  31.8  47.2  64.9  67.9  67.7  64.4  56.6  
Primary income  -55.8  -43.9  -73.8  -57.2  3.8  -14.2  -18.2  
 Credit  13.2  19.1  28.9  33.5  31.3  45.6  51.6  
   Compensation of employees  2.3  2.8  3.7  5.1  5.4  6.0  5.7  
   Investment income  5.7  6.0  10.5  15.8  11.8  11.9  9.8  
   Other primary income  69.1  63.0  102.7  90.6  27.5  59.8  69.8  
 Debit  69.1  63.0  102.7  90.6  27.5  59.8  69.9  
   Compensation of employees  4.4  3.4  5.1  6.0  7.7  11.1  11.2  
   Investment income  64.7  59.6  97.6  84.6  19.8  48.6  58.6  
Secondary income  116.2  132.0  128.0  102.2  96.7  80.6  82.4  
 Credit  151.3  191.3  190.7  149.8  140.7  128.3  142.5  
   General government  121.1  169.1  164.5  115.2  110.6  99.6  93.8  
   Personal transfers  10.2  11.4  13.3  15.7  15.3  10.4  12.9  
   Other current transfers  20.0  10.8  12.9  18.9  14.9  18.4  35.8  
 Debit  35.1  59.4  62.7  47.6  44.0  47.8  60.1  
   General government  0.4  1.1  1.0  7.0  6.9  13.0  15.6  
   Personal transfers  34.7  58.3  61.7  40.6  37.1  34.7  44.5  
Capital account  26.8  50.3  71.2  98.2  86.7  70.6  55.2  
Financial account  24.6  106.3  -64.9  -88.8  -49.3  -9.4  -31.9  
 Direct investment balance  45.6  163.6  116.4  21.3  50.4  20.3  17.2  
   Assets  3.0  2.3  3.7  2.5  3.0  0.7  4.7  
   Liabilities  48.6  165.9  120.1  23.9  53.4  21.0  21.9  
 Portfolio investment  -0.0  -2.1  0.1  -1.2  0.1  0.1  -0.7  
   Assets  0.0  2.1  -0.1  1.2  -0.1  -0.1  0.7  
   Liabilities  0.0  0.0  0.0  0.0  0.0  0.0  0.0  
 Other investment  23.8  57.2  -31.7  -29.7  -40.8  -30.2  1.1  
   Assets  9.9  -1.0  8.5  -4.8  16.0  17.1  -16.2  
    Debt instruments  9.9  -1.0  8.5  -4.8  16.0  17.1  -16.2  
   Liabilities  33.7  56.2  -23.2  -34.5  -24.7  -13.1  -15.1  
    Other equity  0.0  0.0  -0.5  -2.2  -0.6  -1.6  0.0  
    Special drawing rights  14.5  0.0  0.0  0.0  0.0  0.0  0.0  
    Other debt instruments  19.3  56.2  -22.7  -32.3  -24.2  -11.5  -15.1  
 Reserve assets  43.8  111.4  148.6  78.2  57.9  -1.4  48.4  
Net errors and omissions  8.1  -12.7  12.4  -35.8  1.1  -11.0  -5.9  
Source:  IMF, Balance of Payments online information.  
                                                
15 CBSI (2014).  
16 IMF (2016).  WT/TPR/S/3 49 • Solomon Islands  
 
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  1.15.   The level of the central government debt in Solomon Islands has been on a downward 
trend, and is among one of the lowest  in the region. Central government debt declined from about 
60% in 2005 to 17 .6% as at end -2012, owing mainly to the implementation of the Honiara Club 
Agreement, which prohibited new borrowing by the Government.17 In 2015, the Government 
undertook a one -off advance repayment of SI$136 million on domestic debt and a SI$51 million 
repayment to external creditors, bringing  the debt -to-GDP ratio to 10.4 of GDP as at end -2015.18 
External debt is largely owed to multilateral creditors, and domestic debt is mainly related to 
special securities and treasury bills. In 2012, the Government adopted a new Debt Management 
Framework which, inter alia , relaxed the no borrowing regime under the Honiara Club Agreement 
and provided scope for concessional borrowing for large in frastructure investments.19 Under the 
new debt management strategy, the Government sets a debt limit with the goal of keeping the 
borrowing level below 30% of GDP. The ceiling is revised on a yearly basis and covers all external 
government borrowing, extern al and domestic borrowing by state-owned enterprises, and 
government guarantees. The limit was set at SI$300 million for 2016.  
1.16.   Solomon Islands' foreign reserves position remained at a comfortable level during the 
review period.20 As at end -December 2015, the gross official reserves level was equivalent to 
10.1 months of imports ( Table 1.1), well above the IMF's reserve adequacy metrics of 5.5 months. 
According to IMF projections, the reserves level will continue strengthening to reach 
US$580  million by end -December 2017.21 
1.6  Trade Performance  
1.17.   The ratio of Solomon Islands' trade in goods and services to GDP declined from around 
130% in 2010 to 99% in 2015, as economic growth outpaced trade, especially imports growth: 
imports as a share of GDP fell from 81.6% in 2010 to 53.3% in 2015 (Table 1.1).  
1.18.   Merchandise exports continue to be heavily concentrated in a few items. Based on data from 
the Central Bank of Solomon Islands (CBSI)22, logs accounted for about two  thirds of total exports 
in 2015 (Table A1.1). However, t he actual ratio might be higher as there are large discrepancies 
between officially recorded log exports and imports as reported by some trading partners. For 
instance, according to statistics from UN Comtrade, Solomon Islands' total exports of rough wood 
(HS code 4403) were worth US$146.6 million in 2015. However, imports of the same product from 
Solomon Islands as reported by China were valued at US$441 million.23 Other major export 
commodities include fish, and palm oil and kernels, accounting respectivel y for 11.5% and 6.3% of 
total exports in 2015. One key development during the review period was the entry into 
production of the Gold Ridge Mine in 2011, which boosted exports by 86% to US$415.3 million in 
the same year. The share of minerals in total expo rts peaked at 23.3% in 201 2 before dropping to 
6.3% in 2014 as the mine closed following flooding in April 2014.  
1.19.   The structure of merchandise imports was broadly unchanged during the review period. 
Machinery and transport equipment, food and live animals,  and mineral fuels are the top 
categories of import ed products (Table A1.2). The share of machinery and transport equipment in 
total imports declined to 33.8% in 2015, while that of mineral fuels increased to 20.1% (after a 
peak of 26.5% in 2013).  
                                                
17 IMF (2016).  
18 CBSI (2016b).  
19 In addition to the debt management strate gy, the Debt Management Framework included a borrowing 
policy for state -owned enterprises, an on -lending policy, and a guarantee policy.  
20 The monetary policy objective is to maintain foreign reserves at a level equivalent to 3 months of 
import cover.  
21 IMF (2016).  
22 Due to differences in the level of detail in trade data, data from the Central Bank of Solomon Islands 
has been used for the analysis of trade by products, and data from the UN Comtrade database has been used 
for the analysis of trade by partn ers. Both datasets are different for many reasons (including the coverage, the 
time of recording and the method of valuation), but complement each other in providing a better picture of 
Solomon Islands' trade patterns. Totals are of the same magnitude (Tab les A1.1 and A1.2).  
23 UN Comtrade database. Viewed at: http://comtrade.un.org/db/default.aspx . WT/TPR/S/3 49 • Solomon Islands  
 
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  Chart 1.1 Direction of merchandise trade, 2010 -15 
 
Chart 1.[trade by country]
Direction of merchandise trade, 2010 and 2015
2010 2015
(a)    Exports 
Asia-Pacific
81.8%
Total:   US$215.4 million Total:  US$400.4 million
(b)    Imports 
Fiji  2.0%
Singapore
24.1%Indonesia
1.4%Other
2.4%
Fiji  2.3%Other
3.2%
Papua New Guinea
4.5%
Indonesia
4.2%
Total:   US$327.9 million Total:   US$465.8 millionMalaysia
3.2%
Papua New Guinea  
2.8%
Australia
28.9%
Australia
32.4%Indonesia
2.9%
India
7.2%
Source:  UNSD Comtrade database.Japan
7.1%China
12.9%Other Asia -Pacific
9.2%
EU-28
14.7%
Philippines
8.2%Other
1.3%
Japan
2.2%Other Asia -
Pacific  
8.3%China
58.0%EU-28
17.8%Australia
4.0%
Thailand
6.0%Philippines
4.1%
China
49.1%Japan
1.7%
New Zealand 
4.8%Other Asia -Pacific
9.9%
Malaysia
5.3%Other Asia -
Pacific 
7.0%Korea, Rep. of
2.5%Other
0.4%
New Zealand
5.9%
Asia-Pacific
96.8%Asia-Pacific
97.6%Asia-Pacific
84.0%
Singapore
17.1%Malaysia
10.7%China
10.5%
 
 
Source:  UNSD Comtrade database.  WT/TPR/S/3 49 • Solomon Islands  
 
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  1.20.   The direction of merchandise trade remains oriented towards Asia. China is the major 
market for merchandise exports, accounting f or 58.0% of exports in 2015, compared to 49.1% 
in 2010 (Chart 1.1 and Table A1.3). Logs account for the bulk of exports to China. During the 
review period, the share of European markets (mainly EFTA countries) declined. Australia and 
Singapore are the two major suppliers for imports in Solomon Islands, accounting respectively for 
28.9% and 17.1% of total imports in 2015 (Chart 1.1 and Table A1.4). However, imports from 
Australia and Singapore (mostly trans -shipments) as a share of total imports declined dur ing the 
review period, while those from Malaysia and Japan increased.  
1.7  Foreign Direct Investment  
1.21.   FDI flows in Solomon Islands have been relatively low and on a declining trend. According to 
UNCTAD's 2015 World Investment Report24, FDI inflows were US$24 mill ion in 2014, down from 
US$238 million in 2010. FDI stock was estimated at US$781 million in 2014, compared to an 
estimate of US$106 million in 2000. Outward FDI flows are marginal. The main sources of FDI 
inflows are Australia, Malaysia and China, with the  main investment sectors being other services, 
forestry, wholesale, mining, tourism, fisheries, transport/communication and construction.  
1.22.   In 2015, the Foreign Investment Division (Section 2.4) received FDI applications covering 
about SI$1.4 billion worth of investment.25 Wholesale and retail was the leading sector, accounting 
for 38% of the projected investment, followed by the other services sector (26%), mining and 
tourism.  
 
                                                
24 UNCTAD (2015).  
25 CBSI (2016b), Vol. 28, No. 4.  WT/TPR/S/3 49 • Solomon Islands  
 
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  2  TRADE AND INVESTMENT  REGIME  
2.1  General Framework  
2.1.  Solomon Islands is a constitution al monarchy with the British Sovereign, represented by a 
Governor -General, as the Head of State. The Governor -General must be a Solomon Islands' citizen 
and is elected by Parliament. The executive follows a Westminster -style system led by the Prime 
Ministe r who is chosen from and by the Parliament. The cabinet is chosen by the Prime Minister 
and holds executive power.  
2.2.  Solomon Islands has a unicameral parliament. The National Parliament, empowered by the 
Constitution, is the law -making body of the country. Once a bill is passed by Parliament, it requires 
the assent of the Governor -General to become a law (Acts of Parliament). Gazette notification is 
required for any law to enter into operation.  
2.3.  The number of seats in Parliament is 50; this implies that Solom on Islands is divided into 
50 single -member constituencies. General elections are held at least every four years, on the basis 
of universal adult suffrage.1 The last election was held in 2014. Since there are no established 
political parties as such, the G overnment has been characterized by fragile short -lived coalitions; 
and changes in the prime ministership have become frequent. The next general election is due by 
the end of 2018, by which time the Government hopes to have replaced the existing first -past-the-
post voting system with one that provides for a parliament more representative of the diverse 
population.  
2.4.  The Judiciary is independent of the executive and the legislature. The judicial system in 
Solomon Islands is based on English Common Law. The Cou rt of Appeal, consisting of three 
judges, is the final level of judiciary. Below the Court of Appeal is the High  Court followed by 
magistrate and local courts. Decisions (judgements) by the court of appeal are upheld in the High 
Court and magistrate courts . Both the High Court and magistrate courts deal with civil and criminal 
cases. Local courts are primarily responsible for handling matters of land. There is also a statutory 
trade dispute panel.  
2.5.  The Constitution of 1978 is Solomon Islands' supreme law. An y law that is not consistent with 
the Constitution is void to the extent of its inconsistency. International agreements must be 
incorporated into domestic legislation. Therefore, WTO provisions may only be invoked directly 
before national courts to the ext ent that they have been incorporated into domestic law. 
International treaties and conventions, including multilateral and regional trade agreements , are 
the responsibility of the Ministry of Foreign Affairs and External Trade, under the supervision of the  
Office of the Prime Minister and Cabinet. International agreements are incorporated into domestic 
law through legislation passed by National Parliament. In the vast majority of cases, this requires 
amendment of existing domestic law or enactment of new le gislation.  
2.6.  Solomon Islands has nine provinces: Central; Choiseul (Lauru); Guadalcanal; Isabel; Makira; 
Malaita; Rennell and Bellona; Temotu; and Western; and the separate administrative cent re of 
Honiara. Each province is governed by an elected provincial  assembly and a provincial 
government. Provinces have limited taxation powers, and rely heavily on grants from the national 
government. While the provincial assemblies and governments have no power to make laws 
affecting the international obligations of So lomon Islands, their legislative or executive actions, 
e.g. regulating services, can have trade policy implications. In case of conflict, Acts of Parliament 
prevail over provincial legislation.  
2.7.  Solomon Islands' politics has been characteri zed by fluid coal itions of parties and 
independents, and political stability remains a challenge. A Constitutional Reform Unit under the 
Office of the Prime Minister and Cabinet, established in 2008, recommended the establishment of a 
                                                
1 Parliament can be dissolved at any time by a resolutio n supported by the votes of an absolute majority 
of the Members of the Parliament. A general election is required within four months of dissolution.  WT/TPR/S/3 49 • Solomon Islands  
 
- 17 - 
 
  federal system with more powers and au thority delegated to the provinces.2 However, this has not 
yet been implemented.  
2.8.  Constituency development funds (CDF) are provided to Members of Parliament to spend 
within their constituency for the purpose of helping constituents. The management and 
administration of CDFs is done through the Ministry of Rural Development and the 50 Constituency 
Offices. However, fund administration is haphazard with few rules governing spending, and 
constituency funds are frequently used as a tool for rewarding the politi cal supporters rather than 
as a means of developing constituencies.  It has been frequently argued that CDFs have a negative 
impact on accountability and service delivery that Solomon Islands can ill afford.3 In 2013, the 
Constituency Development Funds Act was amended to enhance transparency and accountability in 
the management of CDFs. The authorities indicate that additional legislative changes on CDFs are 
under preparation with a view to improving their governance. The 2015 budget for CDF -related 
expendit ures was SI$386 million.  
2.2  Trade Policy Objectives and Formulation  
2.9.  The National Development Strategy 2016 -2035 is Solomon Islands' long -term economic 
policy document.4 The main policy objectives laid down in the Strategy are inclusive development 
and povert y alleviation. Th ese are to be achieved through macroeconomic stability, containment of 
population growth, and targeted social spending. The sources of growth are to be diversified, away 
from logging towards priority sectors such as mining, fishing, and to urism. Trade should increase 
by addressing supply -side constraints and taking advantage of opportunities in existing 
international agreements. Improving the environment for business, trade and private sector -led 
growth is also a key priority.  
2.10.   Solomon Islan ds adopted its first formal trade policy framework in 2015, with a view to 
mainstreaming trade into the National Development Strategy and improving the medium - to long -
term performance of Solomon Islands in the areas of trade and foreign direct investment.5  
2.11.   International trade matters fall within the responsibility of the Ministry of Foreign Affairs and 
External Trade. Trade policies are usually formulated through inter -ministerial consultations ; the 
ultimate policy decision is vested with the Cabinet. Oth er institutions involved in trade policy 
formulation and implementation include: the Ministry of Commerce, Industry, Labour and 
Immigration (MCILI), the Ministry of Finance and Treasury (MoFT), the Ministry of Fisheries and 
Marine Resources (MFMR), the Min istry of Infrastructure and Development (MID), the Ministry of 
Forestry and Research (MFR), the Ministry of Agriculture and Livestock (MAL), the Ministry of 
Mines, Energy and Rural Electrification (MMERE), the Ministry of Education and Human Resource 
Devel opment (MEHRD), the Ministry of Culture and Tourism (MCT), and the Central Bank of 
Solomon Islands.  
2.12.   Consultations with civil society take place in a regular manner. The National Trade 
Development Council (NDTC), a cross -government initiative chaired by the  Minister of Foreign 
Affairs and External Trade, provides a formal forum to discuss trade matters and meets four times 
a year. The Government's most important partners include: the Solomon Islands Chamber of 
Commerce and Industry (SICCI), the Association o f Solomon Islands Manufacturers (ASIM), the 
Pacific Islands Private Sector Organisation (PIPSO), trade unions, producers' associations, 
academia, and regional networks.  
                                                
2 Additional information on the Constitutional Reform Program is available under 
http://www.sicr.gov.sb/ . 
3 For example: Van Zyl, Albert, What is wrong with the Constituency Development Funds ? Viewed at: 
http://www.internationalbudget.org/publications /brief10/  [23 February 2016]; and Haque, Tobias, Policy not 
cultural reform needed for development in the Solomon Islands . Viewed at: http://devpolicy.org/policy -not-
cultural -reform -needed -for-development -in-the-solomon -islands20120618/  [23 February 2016].  
4 Solomon Islands Government (2016), National Development Strategy 2016 -35. This Strategy replaces 
the National Development Strategy 20 11-2020.  
5 Ministry of Foreign Affairs and External Trade (2015).  WT/TPR/S/3 49 • Solomon Islands  
 
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  2.3  Trade Agreements and Arrangements  
2.3.1   WTO  
2.13.   Solomon Islands became a Member of the WTO on 26 July 1996.6 In 2012, Solomon Islands 
opened a permanent mission in Geneva. Solomon Islands accords at least MFN treatment to all, 
including non -WTO, trading partners.  
2.14.   Solomon Islands' authorities state that their interest in the multilateral trading system  is 
limited. The market access gains from WTO negotiations are considered to be minimal as most of 
its exports already receive duty -free access either on an MFN basis or under regional and unilateral 
preference programmes. Interest in WTO issues could incr ease, however, with Solomon Islands' 
graduation from LDC status. The authorities are aware of Solomon Islands' WTO commitments, 
although many remain to be implemented  (Section 3).  
2.15.   At the 2013 Ministerial Conference in Bali, Solomon Islands urged for the " Bali Package" to 
be delivered.7 At the 2015 Ministerial Conference in Nairobi, Solomon Islands called on all 
Members to deliver on the Doha Round as a matter of priority and to first and foremost address 
outstanding development issues. In addition, p utting  in place disciplines on fisheries subsides was 
of particular interest to Solomon Islands.8 
2.16.   Solomon Islands is not an active participant in the DDA negotiations and has not submitted 
any proposals since its last TPR. However, Solomon Islands is one of the proponents of the Work 
Programme on Small Economies, and joined other small, vulnerable economies (SVEs) in 
co-sponsoring a number of proposals in the negotiations between 2005 and 2007.9  
2.17.   Solomon Islands is not a signatory to any of the WTO plurilateral t rade agreements. It has 
yet to ratify the Trade Facilitation Agreement. Solomon Islands has never invoked the dispute 
settlement provisions of the WTO, no complaints have been brought against it, and it has not 
exercised its right to participate as a third  party in any dispute.  
2.18.   In February 2016, Solomon Islands notified its category A commitments under the Trade 
Facilitation Agreement.10 However, between 2009 and July 2016, Solomon Islands did not submit 
any other notifications to the WTO. Before 2009, Solo mon Islands made three notifications, 
including joint notifications: under the Agreement on Sanitary and Phytosanitary Measures (SPS), 
the authorities notified Solomon Islands' enquiry point11; under the provisions of the Enabling 
Clause, Solomon Islands, j ointly with Fiji, Papua New Guinea, and Tonga, notified the Pacific Island 
Countries Trade Agreement (PICTA), in September 200812; and Solomon Islands was a party to a 
notification made by Papua New Guinea in 1999 with regard to the Melanesian Spearhead Gro up 
(MSG) Trade Agreement.13 
2.19.   Solomon Islands has bound 100% of its tariffs ( Section 3 .1.4.2 ). It undertook both 
horizontal and sector -specific commitments under the GATS, but has not submitted a services 
offer in the context of the DDA negotiations.  
2.20.   Between  January 2010 and December 2015, Solomon Islands participated in 59 technical 
assistance activities undertaken by the WTO Secretariat, including regional seminars and 
                                                
6 It was a de facto  GATT contracting party following its independence in 1978, due to its past 
protectorate status with the United Kingdom.  
7 WTO document WT/MIN(13)/ST/20, 4 December 2013.  
8 WTO document WT/MIN(15)/ST/94, 5 January 2016.  
9 In the rules negotiations, Solomon Islands co -sponsored two SVEs submissions seeking appropriate 
special and differential treatment in any disciplines on fisheries subsidies (WTO documents 
TN/RL/GEN/57/Rev .2, 13 September 2005; and TN/RL/W/210/Rev.2, 22  June 2007). In the trade facilitation 
negotiations, Solomon Islands co -sponsored a proposal that seeks to allow SVEs that are members of a 
customs union or RTA to establish enquiry points at the regional lev el (WTO document TN/TF/W/129/Rev.1, 
21 July 2006).  
10 WTO document WT/PCTF/N/SLB/1, 29 February 2016.  
11 WTO document G/SPS/ENQ/12, 4 July 2001.  
12 WTO document WT/COMTD/N/29, 17 September 2008.  
13 WTO document WT/COMTD/N/9, 7 October 1999.  WT/TPR/S/3 49 • Solomon Islands  
 
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  workshops, e -learning courses, Geneva -based trade policy courses, and national training a ctivities 
on specific topics.  
2.3.2   Regional and preferential agreements  
2.21.   Solomon Islands does not have any bilateral trade agreements. It is, however, party to 
several regional trade and economic cooperation arrangements: the Pacific Islands Forum, the 
Pacific A greement on Closer Economic Relations, the South Pacific Regional Trade and Economic 
Cooperation Agreement, the Melanesian Spearhead Group Trade Agreement and the Pacific Island 
Countries Trade Agreement.  
2.3.2.1   Pacific Islands Forum  
2.22.   Solomon Islands is a member o f the Pacific Islands Forum (PIF). The Forum, founded in 
1971, is a political and economic policy organization in the South Pacific; it comprises 
16 independent and self -governing states.14 Forum leaders meet annually; at the most recent 
Forum, in September  2015, the parties renewed their commitment to the PACER Plus negotiations 
(see below) as an instrument for promoting regional integration in the Pacific. The Forum trade 
ministers also meet on a regular basis.  
2.23.   Regional cooperation and integration efforts by Forum members are pursued on the basis of 
the Pacific Plan, which was first formulated in 2005 and reviewed in 2013. The PIF per se  does not 
provide for the granting of trade preferences, but two regional integration processes which do 
provide for such preferences, namely PICTA and PACER (see below), were initiated under the 
auspices of the PIF.  
2.3.2.2   Melanesian Spearhead Group Trade Agreement  
2.24.   The Melanesian Spearhead Group (MSG) is composed of Fiji, Papua New Guinea, Solomon 
Islands, Vanuatu, and a representa tive of the Kanak Socialist National Liberation Front of New 
Caledonia. The initial MSG Trade Agreement covered duty -free entry of some 180 tariff lines, but 
was undermined by frequent exemptions and import bans. It was notified to the WTO by Papua 
New Gui nea in 1999.15 
2.25.   The revised version of this agreement, the MSGTA2 (2005), established a free trade 
agreement among members. Tariffs were to be eliminated on all products exported from other 
parties with the exception of individual members' negative lists. A labour movement scheme 
entered into force in September 2012. Negotiations on MSGTA3 started in 2013 and centred on 
labour mobility, services, and investment. They were concluded in May 2016, but as at July 201 6 
MSGTA3 has not been signed.  
2.26.   The authorities indicate that , as of 2017 , Solomon Islands will provide tariff -free access to 
all but a few exempt products (alcoholic beverages, tobacco, mineral fuels, and sugar), while 
products from Solomon Islands are expected to have tariff -free access to the other M SG countries.  
2.3.2.3   SPARTECA  
2.27.   Solomon Islands takes part in the South Pacific Regional Trade and Economic Cooperation 
Agreement, which entered into force for most members in 1981. SPARTECA is a non -reciprocal 
trade agreement under which Australia and New Zealand offer duty -free and quota -free market 
                                                
14 Australia, Cook I slands, Federated States of Micronesia, Fiji, Kiribati, Nauru, New Zealand, Niue, 
Palau, Papua New Guinea, Republic of Marshall Islands, Samoa, Solomon Islands, Tonga, Tuvalu, and Vanuatu. 
New Caledonia, French Polynesia, and Tokelau were granted associate  membership. Current Forum observers 
include Wallis and Futuna (2006), the Commonwealth (2006), the Asian Development Bank (2006), the 
Western and Central Pacific Fisheries Commission (2007), the World Bank (2010), the ACP Group (2011), 
American Samoa (201 1), Guam (2011), the Commonwealth of the Northern Marianas (2011), and the 
International Organization for Migration (2014). Timor Leste is a special observer (2002).  
15 WTO document WT/COMTD/N/9, 7 October 1999.  WT/TPR/S/3 49 • Solomon Islands  
 
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  access for products from 13 Forum Island economies.16 The agreement also includes provisions for 
economic and technical cooperation, and safeguard provisions relating to dumped and subsidized 
goods and suspension of obl igations.  In general, rules of origin require at least 50% of the 
product's total factory cost to be from the SPARTECA parties.  
2.3.2.4   PICTA  
2.28.   The Pacific Island Countries Trade Agreement (PICTA) seeks to gradually establish a free -
trade area among 14 of the Forum Island economies.17 The PICTA covers trade in goods, but 
excludes trade in alcohol and tobacco products. Under the agreement, which was signed in 2001, 
Solomon Islands has made reciprocal commitments on trade in goods. Apart from 16 products 
(78 tariff line s) on its negative list, it is obliged to eliminate tariffs on products from other Forum 
Island economies by 2021. The Agreement was notified to the WTO in September 2008 under the 
provisions of the Enabling Clause.18  
2.29.   Negotiations of the PICTA Trade in Ser vices Protocol (PICTA TIS) were completed in 2012. 
Twelve of the fourteen Forum Island Countries have signed, but the Protocol has not yet entered 
into force. Solomon Islands has signed, but is yet to ratify the Protocol. When the Protocol enters 
into forc e, it will provide for preferential trade in services among the parties, albeit on a fairly 
narrow range, in the area of professional, telecommunications, construction, financial, tourism and 
transportation services, and with expansive safeguards provision s. The negotiations initially 
included a scheme for regional labour mobility , but the issue was not included in the final Protocol.  
2.3.2.5   PACER  
2.30.   The Pacific Agreement on Closer Economic Relations (PACER) is an umbrella agreement 
between members of the Pacific Isl ands Forum which entered into force in 2002 and provides a 
framework for the development of trade cooperation and gradual integration. It does not contain 
substantive trade liberalization provisions; rather it is intended to provide "stepping stones" to 
allow the Forum Island economies to gradually become part of a single regional market.  
2.31.   PACER Plus is the proposed free trade agreement between the Forum Island economies and 
Australia and New Zealand. Negotiations were launched in August 2009. PACER Plus is  expected to 
subsume SPARTECA once a Forum -wide free -trade agreement is in place. Negotiations were 
expected to conclude by June 2016, but a number of issues remained open.  
2.3.3   Other agreements and arrangements  
2.32.   Solomon Islands, along with other countries of th e South Pacific region, continues to 
negotiate an Economic Partnership Agreement with the EU. However, negotiations have been 
stagnating since 2012. An  interim Economic Partnership Agreement entered into force with Fiji and 
Papua New Guinea, but has not be en signed by Solomon Islands.  
2.33.   Solomon Islands is eligible for the Generalized System of Preferences (GSP) schemes of 
most developed Members of the WTO. However, many are barely used, mostly due to the 
composition of its exports, which are MFN duty -free in  some markets or attract low MFN duties.  
2.4  Investment Regime  
2.34.   The Government recognizes that FDI can make an important contribution to economic 
development, most notably by increasing productivity and contributing to local employment. It 
encourages foreign i nvestors "whose development proposals are strategic and align to its national 
                                                
16 Forum Island economies are: Cook Islands, F iji, Kiribati, Marshall Islands, Federated States of 
Micronesia, Nauru, Niue, Papua New Guinea, Samoa, Solomon Islands, Tonga, Tuvalu, and Vanuatu.  
17 So far, 12 islands have signed the agreement: Cook Islands, Fiji, Kiribati, Micronesia, Nauru, Niue, 
Papua  New Guinea, Samoa, Solomon Islands, Tonga, Tuvalu, and Vanuatu.  
18 WTO document WT/COMTD/N/29, 17 September 2008.  WT/TPR/S/3 49 • Solomon Islands  
 
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  aims and objectives with respect to the environment and social structure"19. An investment policy 
document is under preparation.  
2.35.   Several pieces of legislation make up Solomon Isl ands' legal framework for foreign and 
domestic investment: the Foreign Investment Act 2005 (amended in 2009), the Foreign 
Investment Regulations 2006, the Foreign Investment (Amendment and Validation) Act 2009, the 
Companies Act 2009, and the Companies Act  Regulations 2010. Additional provisions are laid down 
in sector -specific legislation.  
2.36.   All foreign investment must be registered. Prospective investors must apply to the Registrar 
of Investment20 and pay the lodgement fee of SI$200. The Registrar will revi ew the application to 
ensure that the planned investment does not fall under prohibited or reserved activities (see 
below). FDI projects are assessed, encouraged and positively considered if they can be expected 
to generate the following outcomes : strength ening the technical and marketing expertise of the 
private sector; maximiz ing the use of local raw materials; promot ing export and import 
substitutes; creat ing employment and providing training to local people; integrat ing or transferring  
knowledge and tec hnology to the country's economic system. The authorities indicate that no 
requests by prospective investors have been denied since 2009. The authorities indicate that 
online registration of FDI is expected to be operational by end -2016.  
2.37.   The Registrar is r equired to issue a certificate of registration (Foreign Investment 
Certificate) within five days of receipt of the application. Immediately after receiving the Foreign 
Investment Certificate, the investor must incorporate a company in Solomon Islands. The 
Registrar may cancel a certificate of registration on certain grounds, including in the event that a 
foreign investor has not commenced an investment activity within twelve months of receiving the 
certification of registration.  
2.38.   Pursuant to the Foreign Inve stment Regulations, 14 activities are reserved for Solomon 
Islands nationals: 1) cultivating plant crops exclusively for sale on the domestic market; 2) timber 
milling operations producing not more than 2,500 m3 of sawn timber per year; 3) retail trading o f 
household goods and services on premises with an area of less than 200 m2; 4) producing 
handcrafts and cultural artefacts; 5) operating buses, taxis and hire car services; 6) breeding of 
livestock for sale on the domestic market; 7) gathering of wild for est products for sale on the 
domestic market; 8) offering laundry services without being part of a hotel; 9) operating 
restaurants, cafes and other eating and drinking business es other than specialty business es, and 
operating within an area of less than 25  m2; 10) market vending and operating roadside stalls; 
11) domestic help services; 12) static guarding services for offices and domestic dwellings with  
employment of less than 20 employees; 13) office and lawn cleaning services not associated with 
hotels; and 14) working as a customs clearing agent.  
2.39.   The Foreign Investment Division in the Ministry of Commerce, Industry, Labour and 
Immigration (MCILI)  is Solomon Islands' de facto  investment promotion agency. Its responsibilities 
include promoting and facilita ting foreign investment. The authorities indicate that the Foreign 
Investment ( Amendment and Validation ) Act 2009 helped streamline the investment approval 
process. Nevertheless, the Government is aware of a number of obstacles to increasing 
investment.21 These include: political instability, high cost of doing business, poor infrastructure, 
high tax rates, problems relating to land ownership and registration, inconsistencies between 
different pieces of legislation, distance from markets , and lack of knowled ge about investment 
opportunities in Solomon Islands.  
2.40.   A licence is required to carry on a business in Solomon Islands. Business licences are 
granted by provincial governments for a fee. Under the Companies Act, businesses may 
incorporate to form a limited company. Incorporation is effective from the date specified in the 
certificate of incorporation, which is issued by the Registrar of Companies in Honiara upon 
registration of the company's memorandum of association. Prior to registration of the company, 
                                                
19 Foreign Investment Division online information, "Investment Policy". Viewed at: 
http://www.investsolomons.gov.sb/Policy.html  [29 February 2016].  
20 The Registrar is the ex officio  Director of the Foreign Investment Division of the Ministry of 
Commerce, Industry, Labour and Immigration,  and is accountable to the Minister in charge of t his Ministry.  
21 Ministry of Foreign Affairs and External Trade (2015).  WT/TPR/S/3 49 • Solomon Islands  
 
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  the Minister of  Commerce, Industry, Labour and Immigration  must approve the company name. 
There is no minimum capital requirement. Companies incorporated under the Companies Act must 
have a registered office in Solomon  Islands. There are no nationality or re sidency requirements for 
company directors. It takes around 14 days to set up a limited liability company in Solomon 
Islands. It involves seven steps and costs SI$4,450.22 
2.41.   A number of incentives are available to foreign and domestic investors. Most importan tly, 
the Customs and Excise Act provides for exemption from customs duties on imported capital goods 
(machines, buildings and equipment).  
2.42.   The Foreign Investment Act mandates that disputes with foreign investors be settled under 
the law of Solomon Islands.  There are no maximum foreign ownership limits pertaining to foreign 
investment. No restrictions are placed on remittances of dividends, profits, and other earnings (net 
of tax) of non -residents. However, approval from the Central Bank is required. The tax  rate on 
profits is 35%.  
2.43.   Challenges to domestic and foreign investment include high operational costs and 
infrastructure deficits, many of which are related to the fact that Solomon Islands is both a small 
and remote island country.23 
2.44.   Most land in Solomon I slands is held communally, which makes it difficult to establish clear 
titles on land ownership. Investors are confronted with both the difficulty of identifying land 
owners and, once a land transaction has been sealed, security of the land title. Moreover , the Land 
and Titles Act establishes that foreign nationals and foreign -owned companies may not purchase 
land, but may lease it from government or land -holding groups. Lease contracts can be renewed.  
2.45.   Solomon Islands ranks 87th on the World Bank's Ease of  Doing Business Index in 2015, 
down from 85th in 2009.  
2.46.   In 2015, the Government commenced the development of  a comprehensive National Anti -
Corruption Strategy, the drafting of anticorruption legislation , and the establishment of an 
Independent Commission a gainst Corruption. An Anti -Corruption Bill was debated in Parliament in 
April 2016, but has not yet been passed.  
2.47.   The Government has undertaken efforts to improve the general business and investment 
climate in recent years, including measures to facilitate investment in land -based activities in a 
manner consistent with continued customary ownership of land.  
2.48.   Solomon Islands does not have any double taxation agreements, nor does it have any 
bilateral investment promotion and protection treaties. It is, howeve r, negotiating a bilateral 
investment treaty with Papua New Guinea and an investment chapter as part of the PACER Plus 
negotiations.  
 
 
                                                
22 World Bank, Doing Business data. Viewed at: 
http://www.doingbusiness.org/data/e xploreeconomies/solomon -islands/starting -a-business/  [4 March 2016]. 
Data collection for the survey was completed by June 2015.  
23 Winters, L. Alan, and Martins, Pedro M.G. (2004).  WT/TPR/S/3 49 • Solomon Islands  
 
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 3  TRADE POLICIES AND P RACTICES BY MEASURE  
3.1  Measures Directly Affecting Imports  
3.1.1   Customs procedures and requirements  
3.1.  The Cu stoms and Excise Act 2002 (as amended) provides the legislative basis for customs 
procedures and the imposition of duties on imports and exports. The authorities indicate that a 
new Customs Act is under preparation; introduction to Parliament is expected f or early 2017. 
Customs policy is implemented by the Customs and Excise Division of the Ministry of Finance and 
Treasury. There are six customs offices throughout the country, including offices in Gizo and Noro.  
3.2.  There are no registration requirements for im porters who already have a tax identification 
number (TIN) from the Inland Revenue Division of the Ministry of Finance and Treasury. Importers 
without a TIN must register with Customs, which automatically assigns to them a "customs client 
number". No polic y is in place to establish a scheme of authorized operators.  
3.3.  Imports must be reported to customs by lodging a cargo manifest, the bill of lading or airway 
bill, the commercial invoice, and a customs declaration. Additional information is required when 
imported goods are subject to licensing ( Section 3.1.6).  
3.4.  In January 2015, Customs migrated to ASYCUDA World. All customs declarations must be 
submitted electronically. There is a SI$10 fee for every submitted declaration; an increase to 
SI$50 is planned. All carriers are required to provide a report of all the cargo carried aboard to 
Customs, through ASYCUDA World, in advance of the arrival of a ship or aircraft. The use of a 
customs agent is mandatory. However, companies can be allowed to do their own customs  
declaration after having undergone ASYCUDA training. Solomon Islands does not require pre -
shipment inspection.  
3.5.  In the absence of complete information, imports may be allowed provisionally into Solomon 
Islands following payment of import duty and a surchar ge not exceeding 50% of the duty. The 
surcharge is reimbursed if the information is presented within six months of importation.  
3.6.  The Customs and Excise Division maintains an electronic risk management system to identify 
high-risk shipments. Under these pro cedures, importers are assigned to one of three risk levels, 
based on past performance with respect to customs clearance and other criteria. Importers' risk 
status is reviewed every three months. The level of risk is also determined by the type of product 
in a shipment: chemicals, explosives, film, electrical goods other than from Australia and the 
United Kingdom, video tapes, motor vehicles, and household effects are classified as high risk, 
while live animals and plants, animal and plant products, noodles , tobacco, beverages and spirits 
are considered medium risk.  
3.7.  Shipments classified as high risk are subject to physical examination and documentary 
review, while medium -risk shipments have a 50% chance of being subject to documentary review; 
physical exami nations of medium -risk shipments are carried out occasionally. Low -risk shipments 
are not subject to physical examination or documentary review, unless randomly selected. 
According to the risk management profiling procedures, 5% of low -risk shipments are r andomly 
selected for further inspection. The authorities indicate that clearance usually takes between one 
and three days.  
3.8.  The Customs and Excise Division may conduct post -entry audits up to three years after 
importation. In fact, however, such audits are  rare.  
3.9.  Decisions by Customs may be challenged administratively or judicially. Valuation is the most 
frequent matter of dispute. Although there is currently no formal process for administrative 
challenges ( one is supposed to be included in the new legislat ion), the authorities indicate that 
importers may lodge complaints with the Comptroller of Customs or the Minister of Finance and 
Treasury. Data on such challenges are not recorded.  WT/TPR/S/3 49 • Solomon Islands  
 
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 3.10.   As at June 2016, Solomon Islands has not ratified the Trade Facilitation Agreement. In 
December 2014, Solomon Islands benefitted from a WTO seminar to assess its needs with regards 
to trade facilitation and help determine its category A commitments. Solomon Islands submitted 
its category A commitments in February 2016.1 
3.1.2   Customs  valuation  
3.11.   The Customs Valuation Act 2009, the Customs Valuation (Amendment) Act 2010, and the 
Customs Valuation Regulations 2010 have been passed to give effect to the WTO Customs 
Valuation Agreement. The authorities have indicated  their intention to noti fy Solomon Islands' 
customs valuation rules.  
3.12.   The dutiable value of all imports is the sum of the purchase cost and all expenses incurred 
for transport, insurance and freight up to the point of entry into Solomon Islands. Importers and 
exporters are require d to keep proper records of all transactions, including all supporting 
documentation, for at least five  years. In principle, the primary method of valuation is the 
transaction value of the imported goods; when necessary, recourse to alternative methods fol lows 
the hierarchy set out in the WTO Customs Valuation Agreement.  
3.13.   In practice, reference prices are still applied for a large number of goods. These include: 
numerous consumer goods2, electrical hardware, vehicles and automotive products, boats and 
parts thereof, and containers. The authorities indicate that under -invoicing is particularly frequent 
for equipment imports in the logging industry.  
3.1.3   Rules of origin  
3.14.   Solomon Islands does not maintain non -preferential rules of origin. As a party to the MSG 
Trade Agreement and the PICTA, Solomon Islands applies preferential rules of origin. The rules 
have not been notified to the Secretariat.  
3.15.   Goods containing inputs from non -MSG countries qualify for MSG preferences if they have 
been "sufficiently worked or process ed". This criterion is met when the goods are classified under a 
different four -digit tariff heading from their non -MSG inputs.  
3.16.   Under PICTA, goods containing non -PICTA inputs must have been "substantially 
transformed" to qualify for preferential treatment . Substantial transformation occurs when the final 
manufacturing process occurs in the exporting PICTA country, with at least 40% of material, 
labour, and overhead costs incurred in that country.  
3.17.   To qualify for preferential treatment, importers must submit  to Customs a certificate of 
origin issued by the competent authority of the exporting country.  
3.1.4   Tariffs  
3.1.4.1   Applied MFN tariffs  
3.18.   Solomon Islands grants at least MFN tariff treatment to all its trading partners.  
                                                
1 WTO document WT/PCTF/N/SLB/1, 29 February 2016.  
2 Baskets, backpacks, can ned fish, carpets, playing cards, plastic chairs, chicken wings and cuts, 
cooking oil, corn beef, cups and plates, diapers, disinfectants, exercise books, fish hooks, fishing lines and 
nets, fly spray, guitars, chewing gum, gum boots, hair dye, insect cont rol, jam, juice, kitchen utensils, lamps, 
lighters, lunch boxes, machetes, margarine, matches, milk, milk powder, mosquito coils, mushrooms, noodles, 
peanuts, peanut butter, pens, pencils, photocopy paper, plastic containers, potato chips, pots, rat traps,  
reading glasses, rulers, safety boots, salt, sardines, sauces, scissors, sealing machines, shampoo, shavers, 
shoes, shoe polish, sleeping mats, snacks, soaps, soft drinks, staples, steel -wool, straws, sugar, suitcases, 
sunglasses, toilet paper, tooth brus hes, tooth paste, tuna, umbrellas, washing powder, watches, drinking 
water, whiteboards, yeast.  WT/TPR/S/3 49 • Solomon Islands  
 
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 3.19.   The tariff schedule is contained in the First Sc hedule to the Customs and Excise Act, and 
specifies only MFN rates. Cabinet must approve modifications to the tariff schedule, including 
rates, before the Minister of Finance and Treasury issues an order to that effect.3 The latest 
amendment to the tariff schedule became effective in September 2014.  
3.20.   The tariff schedule comprises 5,512 tariff lines at the eight -digit level (Table 3.1). The tariff 
nomenclature is based on the Harmonized Commodity Description and Coding System (HS 2012). 
Non-ad valorem  tariff rates are applied on 1.7% of all tariff lines, including wine, spirits, fuels, 
explosives, cinematographic film, video tapes, and goods subject to excise tax ( Section 3.1.5 
below). The simple average applied MFN rate increased slightly during the review pe riod, from 
9.1% in 2009 to 9.3% in 2016. Solomon Islands does not apply seasonal or variable tariffs, or 
tariff quotas.  
Table 3.1 Tariff structure , 2009-15 
(%, unless otherwise indicated)  
 MFN applied  
Final bo unda 2009  2015  2015 
(including 
AVEs)  
Bound tariff lines (% of all tariff lines)  100.0  100.0  100.0  100.0  
Simple average rate  9.1 9.2 9.3 79.3 
  WTO agricultural products  9.3 9.4 10.1 72.0 
  WTO non -agricultural products  9.1 9.2 9.1 80.4 
Duty-free ta riff lines (% of all tariff lines)  0.6 1.0 1.0 0.0 
Tariff quotas (% of all tariff lines)  0.0 0.0 0.0 0.0 
Non-ad valorem  tariffs (% of all tariff lines)  1.3 1.7 1.7 2.3 
Domestic tariff "peaks" (% of all tariff lines)b 0.0 0.0 0.2 0.0 
International tarif f "peaks" (% of all tariff lines)c 0.0 0.1 0.3 95.0 
Coefficient of variation  0.2 0.2 0.4 0.2 
Nuisance applied rates (% of all tariff lines)d 0.0 0.0 0.0 0.0 
Total number of tariff lines provided  5,496  5,512  5,512  5,512  
   Ad valorem  rates 5,391  5,362  5,362 5,386  
   Duty-free rates  33 56 56 0 
   Specific  72 94 94 110 
   Alternate rates  0 0 0 16 
a Based on 2015 tariff schedule.  
b Domestic tariff peaks are defined as those exceeding three times the overall simple average applied 
rate. 
c International t ariff peaks are defined as those exceeding 15%.  
d Nuisance rates are those greater than zero, but less than or equal to 2%.  
Note:  2009 tariff is based on HS02 nomenclature; 2015 is based on HS12.  
 2015 figures including AVEs are based on 2014 import values  and volumes taken from ITC Trade 
Map online information.  
 Out of 94 specific rates 27 AVEs could be calculated. Figures for final bound rates exclude specific 
rates and include the ad valorem part of alternate rates.  
Source:  WTO Secretariat calculations, based on data received by the authorities.  
3.21.   The coefficient of variation is 0.2, reflecting a large degree of uniformity among rates 
(Table  3.2). The average applied tariff for agriculture (WTO definition) is 10.1%, slightly higher 
than the average for non -agriculture (9.1%). These estimates exclude 67 non -ad valorem  rates, 
because no data were available to calculate their ad valorem  equivalents. Average tariffs are 
lowest on chemicals and products thereof, and highest on prepared food, beverages and tobacco . 
3.22.   More than 82% of all ad valorem  tariff lines carry an MFN rate of 10%, and another 15% 
have a rate of 5% (Chart 3.1). The highest ad valorem  rates, of 15%, 18%, and 20%, apply on 
33 tariff lines comprising alcoholic preparations, chemical preparations fo r photographic use, 
vehicles, unmanufactured tobacco, and videotapes. There are 56 duty -free tariff lines, around 1% 
                                                
3 Section 7, Customs and Excise Act.  WT/TPR/S/3 49 • Solomon Islands  
 
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 of the total. Tariff escalation is limited, due to the quasi -uniformity of tariffs, and exists only 
between semi -processed and fully proces sed goods.  
Table 3.2 Tariff summary, 2016  
  Number of 
linesa Average 
(%)b Range (%)b Coefficient of 
variation (%)b 
Total 5,512 (94/27)  9.2 (9.3)  0-20 (0 -137.6)  0.2 (0.4)  
HS 01 -24 1,048 (71/21)  9.6 (10.1)  0-18 (0 -137.6)  0.2 (0.7)  
HS 25 -97 4,464 (23/6)  9.1 0-20 0.2 
By WTO category      
WTO agricultural products  805 (71/21)  9.4 (10.1)  0-18 (0 -137.6)  0.2 (0.8)  
 Animals and products thereof  114 8.3 0-10 0.3 
 Dairy products  21 8.3 5-10 0.3 
 Fruit, vegetables , and plants  211 10.0 10-10 0.0 
 Coffee and tea  24 10.0 10-10 0.0 
 Cereals and preparations  96 (1/1)  9.4 (10.6)  0-18 (0 -126.4)  0.2 (1.1)  
 Oils seeds, fats, oil and their products  83 8.7 0-10 0.3 
 Sugars and confectionary  17 9.1 5-10 0.2 
 Beverages, sp irits and tobacco  94 (70/20)  11.0 (19.7)  10-18 (1.8 -137.6)  0.2 (1.2)  
 Cotton  5 10.0 10-10 0.0 
 Other agricultural products, n.e.s.  140 9.4 0-10 0.2 
WTO non -agricultural products  4,707 (23/6)  9.2 (9.1)  0-20 0.2 
 Fish and fishery products  311 10.0 5-10 0.0 
 Minerals and metals  908 (7/6)  8.5 5-10 (0 -10) 0.3 
 Chemicals and photographic supplies  857 (8/0)  7.9 0-15 0.3 
 Wood, pulp, paper and furniture  341 9.8 5-10 0.1 
 Textiles  589 10.0 5-10 0.0 
 Clothing  218 10.0 10-10 0.0 
 Leather, rubber, footwear a nd travel goods  161 10.0 10-10 0.0 
 Non-electric machinery  527 9.2 0-10 0.2 
 Electric machinery  250 9.8 0-10 0.1 
 Transport equipment  150 9.0 0-15 0.5 
 Non-agricultural products, n.e.s.  380 9.7 0-20 0.2 
 Petroleum  15 (8/0)  10.0 10-10 0.0 
By ISIC sect or     
 ISIC 1 – Agriculture, hunting and fishing  517 9.6 0-18 0.2 
 ISIC 2 – Mining  97 (4/3)  10.0 (9.7)  10-10 (0 -10) 0.0 (0.2)  
 ISIC 3 – Manufacturing  4,897 (90/24)  9.1(9.2)  0-20 (0 -137.6)  0.2 (0.4)  
 Manufacturing excluding food processing  4,246 (19/3)  9.1 0-20 0.2 
 Electrical energy  1 10.0 10 0.0 
By stage of processing      
 First stage of processing  853 (8/6)  9.7 (9.6)  0-18 0.1 (0.2)  
 Semi-processed products  1,756 (4/0)  8.5 0-15 0.3 
 Fully processed products  2,903 (82/21)  9.5 (9.6)  0-20 (0 -137.6)  0.2 (0.4)  
By HS section      
 01 Live animals and products  406 9.4 0-10 0.2 
 02 Vegetable products  305 9.7 0-10 0.1 
 03 Fats and oils  48 9.8 5-10 0.1 
 04 Prepared food, beverages and tobacco  289 (71/21)  9.5 (11.7)  5-18 (1.8 -137.6)  0.2 (1.1)  
 05 Minera l products  158 (15/6)  10.0 (9.6)  10-10 (0 -10) 0.0 (0.4)  
 06 Chemicals and products thereof  793 (8/0)  7.4 0-15 0.4 
 07 Plastics, rubber, and articles thereof  212 10.0 10-10 0.0 
 08 Raw hides and skins, leather, and its products  72 10.0 10-10 0.0 
 09 Woo d and articles of wood  181 10.0 10-10 0.0 
 10 Pulp of wood, paper and paperboard  142 9.6 5-10 0.1 
 11 Textiles and textile articles  802 10.0 5-10 0.0 
 12 Footwear, headgear, etc.  47 9.7 5-10 0.1 
 13 Articles of stone, plaster, cement  142 10.0 10-10 0.0 
 14 Precious stones and metals, pearls  53 10.0 10-10 0.0 
 15 Base metals and articles thereof  566 7.9 5-10 0.3 
 16 Machinery, electrical equipment, etc.  781 9.4 0-20 0.2 
 17 Transport equipment  161 9.1 0-15 0.5 
 18 Precision equipment  211 9.6 0-10 0.2 
 19 Arms and ammunition  18 10.0 10-10 0.0 
 20 Miscellaneous manufactured articles  118 9.8 5-10 0.1 
 21 Works of art, etc.  7 10.0 10-10 0.0 
a First figure in parentheses refers to the number of specific rates; second figure refers to the number 
of AVE s calculated.  
b Figures in parentheses refer to calculations including AVEs.  
Note:  For 27 specific rates AVEs are calculated, based on 2014 import data.  
Source:  WTO Secretariat calculations, based on data provided by the authorities.  WT/TPR/S/3 49 • Solomon Islands  
 
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 Chart 3.1 Distribution of MFN applied tariff rat es, 2009 and 2016  
(0.6) (16.4) (81.5)
(0.1) (n.a.) (n.a.)   (1.3) (1.0)(14.6)(82.1)
(0.5) (0.1) (0.0)(1.7)
05001,0001,5002,0002,5003,0003,5004,0004,5005,000
Duty free 5% 10% 15% 18% 20% Specific duties
n.a.        Not applicable.
Note:      Figures in parentheses denote the percentage share of total lines.  
Source:  WTO Secretariat calculations, based on data provided by the authorities.Number of tariff linesChart 3.1   Distribution of MFN applied tariff rates, 2009 and 2016
Tariff rates (%)MFN 2009
MFN 2016
 
n.a. Not applicable.  
Note:  Figures in parenthes es denote the percentage share of total lines.   
Source:  WTO Secretariat calculations, based on data provided by the authorities.  
3.23.   Fiscal income from import duties amounted to SI$217.3 million in 2014 (equivalent to 6.5% 
of total fiscal revenue). The importance of import duties as a source of government revenue has 
declined significantly in recent years as this share stoo d at around 11% in 2007 and 20% in 2003.  
3.1.4.2   Tariff bindings  
3.24.   Solomon Islands has bound all of its tariff  lines, mostly at 80%. Certain goods, including 
meat, processed fish, soap, prepared foods, bottled water, and photocopying machines are bound 
at rates betw een 90% and 150%. Lower bound rates of between 5% and 35% apply on wheat, 
malt, margarine, sugar, pharmaceuticals, and fertilizers. Several goods, including beer, wine, 
spirits, tobacco products, fuels, explosives, media for sound recording, and cinematogr aphic film 
are subject to non -ad valorem  or compound bound rates.  
3.25.   In general, applied tariff rates are well below their bound rates. For 58 tariff lines, however, 
applied rates exceed their bindings (Table 3.3). Furthermore , for 28 tariff lines for which 
ad valorem  equivalents were not made available, applied tariffs may exceed bindings (Table  3.4). 
Table 3.3 Products for which applied rates exceed bound rates, 2016  
HS code  Product description  MFN rate  Bound ra te 
12091000  Sugar beet seeds  10% 5% 
12092100  Alfalfa seeds  10% 5% 
12092200  Clover seeds  10% 5% 
12092300  Fescue seeds  10% 5% 
12092400  Kentucky blue grass seeds  10% 5% 
12092500  Rye grass seeds  10% 5% 
12112000  
12113000  
12114000  
12119000  Plants and part s of plants used primarily in perfumery, pharmacy, or for 
insecticidal or similar purposes  10% 
10% 
10% 
10% 5% 
5% 
5% 
5% 
17019100  Certain cane or beet sugar  10% 5% 
17019900  Certain cane or beet sugar  10% 5% 
19011000  Preparations of infant use, put up for retail sale  10% 5% 
19012000  Mixes/doughs for the preparation of certain bakers' wares  10% 5% 
19019000  Other food preparations following under HS heading 1901  10% 5% 
22030020  Alcohol of strength > 7% vol . SI$17.60 /l SI$15.00 /l 
22030030  Alcohol of stren gth > 7% vol. SI$108.00 /l SI$15.00 /l 
22030090  Alcohol of strength > 7% vol. SI$108.00 /l SI$15.00 /l 
22041020  Alcohol of strength > 7% vol. SI$I17.60 /l SI$15.00 /l WT/TPR/S/3 49 • Solomon Islands  
 
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 HS code  Product description  MFN rate  Bound ra te 
22041030  Alcohol of strength > 7% vol. SI$108.00 /l SI$15.00 /l 
22041090  Alcohol of strength > 7% vol. SI$108.00 /l SI$15.00 /l 
22042120  Alcohol of strength > 7% vol. SI$17.60 /l SI$15.00 /l 
22042130  Alcohol of strength > 7% vol. SI$108.00 /l SI$15.00 /l 
22042190  Alcohol of strength > 7% vol. SI$108.00 /l SI$15.00 /l 
22042920  Alcohol of strength > 7% vol. SI$17.60 /l SI$15.00 /l 
22042930  Alcohol of strength > 7% vol. SI$108.00 /l SI$15.00 /l 
22042990  Alcohol of strength > 7% vol. SI$108.00 /l SI$15.00 /l 
22043020  Alcohol of strength > 7% vol. SI$17.60 /l SI$15.00 /l 
22043030  Alcohol of strength > 7% vol. SI$108.00 /l SI$15.00 /l 
22043090  Alcohol of strength > 7% vol. SI$108.00 /l SI$15.00 /l 
22051020  Alcohol of strength > 7% vol. SI$17.60 /l SI$15.00 /l 
22051030  Alcohol of strength > 7% vol. SI$108.00 /l SI$15.00 /l 
22051090  Alcohol of strength > 7% vol. SI$108.00/l SI$15.00 /l 
22059020  Alcohol of strength > 7% vol. SI$17.60 /l SI$15.00 /l 
22059030  Alcohol of strength > 7% vol. SI$108.00 /l SI$15.00 /l 
22059090  Alcohol of strength > 7% vol. SI$108.00 /l SI$15.00 /l 
22060020  Alcohol of strength > 7% vol. SI$17.60 /l SI$15.00 /l 
22060030  Alcohol of strength > 7% vol. SI$108.00 /l SI$15.00 /l 
22060090  Alcohol of strength > 7% vol. SI$108.00 /l SI$15.00 /l 
22082090  Alcohol of strength > 7% vol. SI$108.00 /l SI$75.00 /l 
22083090  Alcohol of strength > 7% vol. SI$108.00 /l SI$75.00/l 
22084090  Alcohol of strength > 7% vol. SI$108.00 /l SI$75.00 /l 
22085090  Alcohol of strength > 7% vol. SI$108.00 /l SI$75.00 /l 
22086090  Alcohol of strength > 7% vol. SI$108.00 /l SI$75.00 /l 
22087090  Alcohol of strength > 7% vol. SI$108.00 /l SI$75.00 /l 
22089090  Alcohol of strength > 7% vol. SI$108.00 /l SI$75.00 /l 
27101210  Light petroleum oils  SI$0.30/l SI$0.25/l 
27101220  Light petroleum oils  SI$0.30/l SI$0.25/l 
27101230  Light petroleum oils  SI$0.30/l SI$0.25/l 
27111100  Petroleum gases and othe r gaseous hydrocarbons, liquefied  SI$0.20/kg SI$0.16/kg 
27111200  Petroleum gases and other gaseous hydrocarbons, liquefied  SI$0.20/kg SI$0.16/kg 
27111300  Petroleum gases and other gaseous hydrocarbons, liquefied  SI$0.20/kg SI$0.16/kg 
27111400  Petroleum gases and other gaseous hydrocarbons, liquefied  SI$0.20/kg SI$0.16/kg 
27111900  Petroleum gases and other gaseous hydrocarbons, liquefied  SI$0.20/kg SI$0.16/kg 
27112100  Petroleum gases and other gaseous hydrocarbons, liquefied  SI$0.20/kg SI$0.16/kg 
27112 900 Petroleum gases and other gaseous hydrocarbons, liquefied  SI$0.20/kg SI$0.16/kg 
33021020  Preparations for food/drink industries containing >= 57% by volume of alcohol  SI$18.00 /l SI$15.00 /l 
37069000  Certain cinematographic film  SI$0.36/30 m SI$0.30/30 m 
Source:  Data provided by the authorities.  
Table 3.4 Products for which applied rates may exceed bound rates, 2016  
    MFN rate  Bound rate  
22090000  Vinegar  SI$15.00 /l 80% 
24021000  Cigars, cheroots and cig arillos  SI$630.36 /kg SI$150/l 
24022010  Cigarettes  SI$1.56/stick SI$150/l 
24022020  Cigarettes  SI$1.56/stick SI$150/l 
24029000  Cigarettes  SI$1.56/stick SI$150/l 
24031100  Water pipe tobacco  SI$511.32 /kg SI$150/l 
24031900  Other smoking tobacco  SI$832.08 /kg SI$150/l 
24039100  Homogeni zed or reconstituted tobacco  SI$832.08 /kg SI$150/l 
24039900  Other smoking tobacco  SI$832.08 /kg SI$150/l 
27050000  Coal gas, water gas, etc.  10% SI$0.16/kg  
27060000  Tar distilled from coal, peat, etc.  10% SI$0.25/l 
27071000  
27072000  
27073000  
27074000  
27075000  
27079100  
27079900  Oils and other products of the distillation of high temperature coal tar  10% 
10% 
10% 
10% 
10% 
10% 
10% SI$0.25/ l 
SI$0.25/ l 
SI$0.25/ l 
SI$0.25/ l 
SI$0.25/ l 
SI$0.25/ l 
SI$0.25/ l 
27081000  Pitch 10% SI$0.25/l 
27082000  Pitch coke  10% SI$0.25/l 
27101280  Residual fuel oils  10% SI$0.25/l 
27101910  Lubricating oils  10% SI$0.25/l 
27101920  Lubricating greases  10% SI$0.25/l 
27101990  Certain other petroleum oils  10% SI$0.25/l 
27102000  Certain other petroleum oils  10% SI$0.25/l 
27109100  Waste oils  10% SI$0.25/l 
27109900  Waste oils  10% SI$0.25/l 
33021010  Compound alcoholic preparations for drink and food industries  15% SI$15.00 /l 
Source:  Data provided by the authorities.  
3.26.   Solomon Islands has bound other duties and ch arges at zero.  WT/TPR/S/3 49 • Solomon Islands  
 
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 3.1.4.3   Tariff exemptions and concessions  
3.27.   Various institutions are exempt from paying import tariffs. These include the national and 
provincial governments, diplomatic missions, regional and international organizations, and 
registered charitable org anizations. All imports claiming tariff exemption must be accompanied by 
a Customs Exemption Form (C44).  
3.28.   Pursuant to the Customs and Excise (Amendment) Act 2012, the Minister of Finance and 
Treasury may, on the recommendation of an Exemption Committee, gra nt duty exemption on 
imported or exported goods. From September 2013 to December 2014, for example, the 
Committee considered 81 applications, of which 43 were approved (SI$51.6 million) and 38 were 
declined (SI$45.5 million).  
3.29.   Tariff concessions apply to i mports of cultural, educational, health, religious, scientific, and 
meteorological materials, initial capital investment, and raw materials or industrial inputs imported 
by manufacturers.  
3.1.4.4   Tariff preferences  
3.30.   Solomon Islands grants preferential tariffs to o ther members of the Pacific Islands Trade 
Agreement (PICTA) and the Melanesian Spearhead Group (MSG) (Table 3.5).  
Table 3.5 Solomon Islands preferential tariffs, 2016  
 Number 
of lines  MFN MSGa PICTAb 
  Aver age 
(%) Duty 
free 
(%) Average 
(%) Duty 
free 
(%) Average 
(%) Duty 
free 
(%) 
Total 5,512  9.2 1.0 9.0 2.1 0.1 98.6 
WTO agricultural products  805 9.4 1.4 9.0 3.6 0.2 98.0 
 Animals and products thereof  114 8.3 0.9 8.1 0.9 0.1 99.1 
 Dairy products  21 8.3 0.0 8.3 0.0 0.0 100.0  
 Fruit, vegetables, and plants  211 10.0 0.0 10.0 0.0 0.0 100.0  
 Coffee and tea  24 10.0 0.0 10.0 0.0 0.0 100.0  
 Cereals and preparations  96 9.4 4.2 8.5 11.5 1.1 88.5 
 Oils seeds, fats, oil and their products  83 8.7 6.0 6.9 15.7 0.0 100.0 
 Sugars and confectionary  17 9.1 0.0 9.1 0.0 0.0 100.0  
 Beverages, spirits and tobacco  94 11.0 0.0 9.4 3.2 0.3 96.8 
 Cotton  5 10.0 0.0 10.0 0.0 0.0 100.0  
 Other agricultural products, n.e.s.  140 9.4 0.7 9.4 0.7 0.0 99.3 
WTO non -agricultural produc ts  4,707  9.2 1.0 9.0 1.9 0.1 98.7 
 Fish and fishery products  311 10.0 0.0 9.9 0.6 0.0 100.0  
 Minerals and metals  908 8.5 0.0 8.5 0.8 0.0 100.0  
 Chemicals and photographic supplies  857 7.9 1.9 7.5 4.4 0.2 98.2 
 Wood, pulp, paper and furniture  341 9.8 0.0 9.5 2.9 0.0 100.0  
 Textiles  589 10.0 0.0 10.0 0.0 0.0 100.0  
 Clothing  218 10.0 0.0 9.4 0.0 2.2 78.4 
 Leather, rubber, footwear and travel goods  161 10.0 0.0 10.0 0.0 0.0 100.0  
 Non-electric machinery  527 9.2 0.8 9.2 0.8 0.0 100.0  
 Electric machiner y 250 9.8 0.8 9.8 0.8 0.0 100.0  
 Transport equipment  150 9.0 12.7 9.0 13.3 0.0 100.0  
 Non-agricultural products, n.e.s.  380 9.7 1.1 9.7 1.3 0.0 100.0  
 Petroleum  15 10.0 0.0 10.0 0.0 0.0 100.0  
a Melanesian Spearhead Group (Fiji, Papua New Guinea, Solomo n Islands,  and Vanuatu).  
b Pacific Island Count ries Trade Agreement (Cook Islands, Fiji, Kiribati, Federate States of Micronesia, 
Nauru, Niue, Papua New Guinea, Samoa, Solomon Islands, Tonga, Tuvalu, and Vanuatu).  
Note:  Excluding specific rates.  
Source:  WTO Secretariat calculations, based on data provided by the authorities.  
3.31.   Most imports from other members of PICTA are subject to a phase -out of tariffs and will be 
tariff-free as of 2017. Tariffs of 20% remain in place on 78 tariff lines, including various t extile 
products, frozen poultry, and wheat flour.  
3.32.   Under the MSG, preferential rates on 138 tariff lines are lower than MFN rates and 19 are 
lower than rates under PICTA.  WT/TPR/S/3 49 • Solomon Islands  
 
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 3.1.5   Other duties and taxes  
3.33.   Other charges in Solomon Islands include goods tax, sales tax , and excise duties. The 
application of internal taxes is both discriminatory and inconsistent: for example, the goods tax 
rate is higher for imports than for domestic goods. On the other hand, excise duties on beer, 
tobacco, and cigarettes are only applie d on domestically produced goods.  
3.34.   The goods tax is 15% on imports and 10% on domestically produced goods. The tax is 
levied on the "wholesale value", except for imports by persons who have not registered with the 
Inland Revenue Division; the sale value fo r these imports is 130% of the sum of the c.i.f. customs 
value plus import duties. Goods tax on imports must be paid upon lodging an import entry with 
Customs. However, importers can defer payment until the imported goods are sold if they have 
been issued a goods tax certificate by the Inland Revenue Division . The following products are 
exempted from goods tax: drugs, medicines and surgical goods; educational, religious and 
scientific goods; art and antiques; goods procured by government; coffins; bird and aquatic food; 
machinery used in manufacturing; safety equipment; aircrafts; buses; flags and awards. Fiscal 
income from goods tax amounted to SI$629.1 million in 2015 (equivalent to 16.9% of total fiscal 
revenue), up from SI$324.8 million in 2009.  
3.35.   Sales ta x applies to retail sales of certain services and domestic and imported goods. A rate 
of 10% applies on: telecommunication services; restaurant services; domestic sea travel; 
professional and security services; motor vehicle rental; vessel and aircraft ren tal; real estate 
services; electronic repairs and equipment; machinery and equipment rental; video and computer 
equipment rental; services by hairdressers, barbers, and beauty shops; laundry services; tyre 
services; and casino entrance and table fees. Spec ific rates apply on: air and domestic sea travel 
(SI$10 per ticket), video rental (SI$2 per tape), movie tickets (SI$0.5 per ticket), petrol and 
diesel (SI$0.1 per litre), and casino entries (SI$5). Fiscal income from sales tax amounted to 
SI$84.8 million in 2015 (equivalent to 2.3% of total fiscal revenue), up from SI$41.3 million 
in 2009.  
3.36.   Excise duties are levied on domestically produced alcoholic beverages, tobacco, and 
cigarettes. The rates on alcoholic beverages depends on the alcohol content, with SI$ 5.60 per litre 
for beer. The rate on cigarettes containing tobacco with more than 10 mg of tar per cigarette is 
currently SI$614.06 per kg; all other cigarettes are subject to a rate of SI$0.3168 per stick. The 
rate for tobacco is SI$66.60 per kg. Imports are not subject to excise duties although the same 
goods are subject to specific tariffs that are significantly higher than the excise duties levied on 
domestically produced goods ( Section 3.1.4.1). Fiscal income from excise duties amounted to 
SI$158.2 mil lion in 2014 (equivalent t o 4.7% of total fiscal revenue) . 
3.1.6   Import prohibitions, restrictions, and licensing  
3.37.   Under the Customs and Excise Act, the Minister of Finance and Treasury may issue an order 
prohibiting imports of "any goods whatsoever" or from "any  particular place".4 However, this 
provision has not been used since the last TPR.  The Comptroller of Customs may also refuse the 
release from Customs of "goods of any class or description chargeable with a duty of customs or 
excise... in quantities exceed ing those which appear to the Comptroller to be reasonable in the 
circumstances".5 Goods subject to this provision must be released after three months at the latest. 
According to the authorities, this provision has not been used in recent years.  
3.38.   Solomon I slands maintains import prohibitions to protect public health, safety and morals, 
and the environment. Import bans cover counterfeit coins and currency, indecent or obscene 
materials, honey, certain knives and arms, matches containing white or yellow phosp horous, 
certain narcotics under the Dangerous Drugs Act, ozone -depleting substances, war relics, and 
wildlife specimens.  
                                                
4 Section 33.  
5 Section 73(1), Customs and Excise Act.  WT/TPR/S/3 49 • Solomon Islands  
 
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 3.39.   Certain goods are subject to import licensing (Table 3.6). Only licensed persons can import 
medicines and poisons.6 The licences speci fy the conditions under which a product may be 
imported into Solomon Islands. Solomon Islands has not notified its import licensing procedures, 
nor has it answered the questionnaire on import licensing.7 
Table 3.6 Goods subject to import licensing , 2016  
Product  Purpose of the 
restrictiona Licensing authority  Licensing requirements  
Arms and ammunition  Protection of public safety  Ministry of Police, National 
Security and Correctional 
Service  .. 
Certain drugs un der the 
Dangerous Drugs Act  Protection of public health  Ministry of Health  and 
Medical Services  Products must be for medicinal purposes  
Used clothing, linen, 
and jute sacks  Protection of public health  Ministry of Agriculture and 
Livestock  Importer must pr ove to the Comptroller 
of Customs that the product has been 
sterilized, disinfested, and/or disinfected  
Plants, animals, and 
their products  Protection of animal and 
plant health  Ministry of Agriculture and 
Livestock  As specified in the Import Specificatio n 
Manual of the Agriculture Quarantine 
Service  
Live fish  Protection of the 
environment  Director of Fisheries  Permits are granted after assessing the 
possible effects of the release of fish into 
the wild  
Food Protection of public health  Ministry of Health  and 
Medical Services  Permits are issued upon presentation of 
a certificate attesting that food has been 
processed under sanitary conditions  
Wildlife specimens  Environmental protection  Ministry of Environment , 
Climate Change, Disaster 
Management and 
Meteo rology  Compliance with Wildlife Protection and 
Management Act and CITES obligations  
Ozone -depleting 
substances  Environmental protection  Ministry of Environment , 
Climate Change, Disaster 
Management and 
Meteorology  .. 
.. Not available.  
a As stated by the a uthorities.  
Source:  Agricultural Quarantine Act, Pure Food Act, Dangerous Drugs Act, Pharmacy and Poisons Act, 
Firearms and Ammunition Act, and Fisheries Act 1998.  
3.1.7   Anti-dumping, countervailing, and safeguard measures  
3.40.   Solomon Islands does not have safeguard , anti-dumping or countervailing duty legislation, 
nor has it applied any safeguards, anti -dumping or countervailing duties.  
3.41.   The Protected Industries Act 1954 permits the granting of orders to restrict imports that 
may affect particular industries.  
3.1.8   Standa rds and other technical requirements  
3.42.   Solomon Islands has limited institutional capacity to adopt and enforce technical regulations 
and conformity assessment procedures. It has not adopted legislation to implement the TBT 
Agreement. It has not made any noti fications under that Agreement nor has it designated an 
entity responsible for answering enquiries about technical regulations, conformity assessment 
procedures, and standards. The preparation and notification to the WTO of an inventory of 
technical regula tions and conformity assessment procedures would be an important step towards 
increasing transparency for traders and helping efforts to enhance consumer protection.  
3.43.   There is no centralized standardizing body in Solomon Islands; standards are adopted and 
administered by various government agencies and ministries. There are no competent agencies to 
assess conformity with Solomon Islands technical regulations. The National Metrology and Testing 
Laboratory was destroyed during the period of civil strife, and h as not been rebuilt. Market 
                                                
6 Parts V and VI, Pharmacy and Poisons Act, Chapter 105 of the Laws of Solomon Islands, 28  July 1941.  
7 As required under Articles 1.4(b) and 7.3 of the Agreement on Import Licensing Procedures, and 
WTO document G/LIC/3, 7 November 1995.  WT/TPR/S/3 49 • Solomon Islands  
 
- 32 - 
 
 
  
 surveillance activities remain limited to the control of calibrations, weights, and measures by the 
Consumer Affairs and Price Control Division.  
3.44.   Technical regulations and conformity assessment procedures may be embodied in statu tes 
passed by Parliament, or in subsidiary legislation made by the executive.8 Under the Consumer 
Protection Act, the Minister of Commerce, Industry, Labour and Immigration  can regulate "product 
safety or quality standards for any specified kind of goods".9 Measures adopted under this 
provision may include requirements relating to performance, composition, design, packaging, 
marking and labelling, processing method, and testing.10 Under this provision, quality standards 
for freezers, refrigerators, and air c onditioners were adopted in January 2016.  
3.45.   The Minister of Commerce, Industry, Labour and Immigration  may also make regulations on 
"methods of inspecting, verifying and stamping weights, measures, copies and models thereof, 
weighing instruments and measuri ng instruments, and of certifying such verification".11 However, 
no such regulations have yet been adopted.  
3.46.   To the extent that technical regulations and conformity assessment procedures are 
embodied in subsidiary legislation, the administrative procedure f or their adoption is governed by 
the Interpretation and General Provisions Act.12 Subsidiary legislation must be published in the 
Solomon  Islands Gazette , and enters into force on the date of publication, unless another date is 
specified in the legislation itself.13 In addition, it must be sent to Parliament, which may annul it 
through resolution within three months.14 Subsidiary legislation approved by Parliament in draft 
form is not subject to this requirement.15 Legislation governing the adoption of subsidia ry 
legislation does not contemplate public comment or WTO notification of draft measures.  
3.47.   Solomon Islands does not maintain an inventory of technical regulations or conformity 
assessment procedures in force. The Customs and Excise Act specifies certain tec hnical regulations 
applicable on imports.16 For example: brandy and whiskey must have been matured "by storage in 
wood" for not less than three years, and rum for not less than two years; electrical appliances 
designed to be connected to the electricity sup ply system must meet the conditions specified by 
the Solomon Islands Electricity Authority; and cigarettes imported in quantities of more than 200 
must be contained in packages displaying a health warning. The Pharmacy and Poisons Act 
specifies labelling r equirements for imported medicines.17  
3.1.9   Sanitary and phytosanitary requirements  
3.48.   The Solomon Islands' notified enquiry point and national notification authority under the 
SPS Agreement is the Director of the Environment al Health Division of the Ministry of He alth and 
Medical Services.18 Solomon Islands has not notified any SPS measures to the WTO.  
3.49.   Solomon Islands is a member of the Codex Alimentarius Commission and a signatory to the 
International Plant Protection Convention ; it is  not a member of  the World Organisation for Animal 
Health  (OIE) . It has signed protocols on SPS issues with Australia, Fiji, New Zealand, Papua New 
Guinea, and Vanuatu.  
3.50.   Under the Biosecurity Act 2013, the Minister of Agriculture and Livestock may, by order in 
the Gazette, regulate imp orts of plants, animal and products thereof to prevent the introduction of 
                                                
8 National Parliament of Solomon Islands (2007a).  
9 Section 12(1), Consumer Protection  Act, Chapter 63 of the Laws of Solomon Islands, 16 October 1995.  
10 Section 12(2), Consumer Protection Act.  
11 Section 15(1), Weights and Measures Act, Chapter 155 of the Laws of Solomon Islands, 
1 December  1980.  
12 Chapter 85 of the Laws of Solomon Islands,  29 September 1978.  
13 Section 61(1).  
14 Section 62(1) and (2), Interpretation and General Provisions Act.  
15 Section 62(3), Interpretation and General Provisions Act.  
16 Second Schedule to the Customs and Excise Act.  
17 Section 50, Pharmacy and Poisons Act.  
18 WTO documents G/SPS/ENQ/23 and G/SPS/NNA/13, 27 March 2008.  WT/TPR/S/3 49 • Solomon Islands  
 
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 diseases and pests into Solomon  Islands.19 The Ministry of Health and Medical Services is 
responsible for ensuring that imported food meets the requirements of the Pure Food Act 1996  and 
the Environmental Health Act. Provincial governments cannot adopt SPS measures.  
3.51.   The procedure for the development of SPS measures applied on imports is described in the 
Biosecurity Act 2013.  Measures are developed by the Chief Biosecurity Officer of B iosecurity 
Solomon Islands or the Chief Veterinary Officer of the Livestock Department, Ministry of 
Agriculture and Livestock, on the request of importers.  Measures must be prepared in accordance 
with accepted international guidelines. There is no public i nventory of SPS measures, or of 
products subject to such measures.  
3.52.   Risk assessments are conducted following any request to import a product for which no SPS 
measures are specified in the  Import Specification  Manual, or to renew a licence. While capacities 
for risk assessments used to be limited, Biosecurity Solomon Islands can now perform them. 
Around two  risk assessments are carried out every year. There are no statutory provisions 
regarding the maximum duration of risk assessments; the authorities indicat e that these take 
between three months and one year. The cost of risk assessment is borne by Biosecurity Solomon 
Islands. The import conditions are stipulated in the 2015 Import Specification  Manual  and 
Schedules.  
3.53.   A licence issued by Biosecurity Solomon Is lands is generally required to import plants, 
animals, and their products. The procedure for issuing licences is described in the 2015 Import 
Specification Manual and Schedules. Licences are valid for one year and are for multiple entries. 
They are granted  within one week of completion of the corresponding risk assessment. Around 
100 licences are issued per year.  
3.54.   Imports considered "low risk" are exempt from licensing requirements, provided that they 
are "commercially packaged and labelled". Low risk produc ts are specified in the 2015 Import 
Specification Manual and Schedules and include processed food containing animal products from 
Australia and New Zealand, and processed food containing plant products from any country.  
3.55.   Food imports require a permit issue d by the Environment al Health Division of the Ministry of 
Health and Medical Services. Permits are issued upon presentation of a certificate from the 
competent authority in the exporting country attesting that the food has been processed under 
sanitary con ditions. The authorities indicate that permits are normally issued in three days. In 
addition to a permit, food containing animal or plant products may require an import licence from 
Biosecurity Solomon Islands.  
3.56.   All imports of plants, animals, and their p roducts are subject to physical inspection at the 
border. Inspections are conducted by a biosecurity officer. Fees for inspection, treatment, and 
quarantine are specified in Schedule 17 of the Biosecurity Regulations 2015.  
3.57.   In 2012, the Government adopted a National Biosafety Framework. The Government ratified 
the United Nations Convention on Biological Diversity (UNCBD) in 1995 and the Cartagena Protocol 
on Biosafety in 2004. The objective of the  Biosecurity Act 2013 is to prevent the entry and spread 
of animal and plant pests and diseases in Solomon Islands. The Act restricts or prohibits the 
importation of products that pose a risk to human, animal and plant life and health.  
3.2  Measures Directly Affecting Exports  
3.2.1   Export procedures and requirements  
3.58.   There ar e no registration requirements for exporters who have a tax identification number 
(TIN) from the Inland Revenue Division of the Ministry of Finance and Treasury. For all exports, 
the bill of lading, commercial invoice, packing list, port handling receipts,  and customs declaration 
must be lodged with Customs. Additional information is required for exports of goods subject to 
licensing requirements ( Section 3.2.3). Customs declarations must be filed electronically using the 
                                                
19 Section 2, Agricultural Quarantine Act, Chapter 343 of the Laws of Solomon Islands, 
10 February  1986.  WT/TPR/S/3 49 • Solomon Islands  
 
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 electronic self -assessment declarat ion (eSAD). The use of a customs agent is mandatory. 
However, companies can be allowed to do their own customs declaration after having undergone 
ASYCUDA training.  
3.59.   The Customs and Excise Division has established "risk management profiling procedures" for 
exports, which are similar to those set up for imports. Exports of reptiles and insects, birds, live 
fish, and crocodile skin are considered high risk, while fish and marine products, gold, silver, wood, 
and metal waste and scraps are medium risk.  
3.60.   The aut horities indicate that the customs clearance time for exports is usually between one 
and two days. If clearance exceeds two days, the exporter can raise their concern to Customs.   
3.2.2   Export taxes, charges, and levies  
3.61.   Exports of various goods are subject to du ties (Table 3.7). Export taxes on most goods are 
ad valorem , with rates between 2.5% and 30% applicable on the f.o.b. value. Taxes on logs are 
specific and depend on species and quality.20 Rates are calculated to correspond to 25% of the 
log's f .o.b. value;  they range from US$18 per m3 (parinari, low grade) to US$36 per m3 
(calophyllum, regular grade).  
Table 3.7 Export taxes, 2016  
Commodities  Duty charged (% unless otherwise indicated ) 
Copper and aluminium was te and scrap  15 
Precious metal ores and concentrates  15 
Ferrous waste and scrap  SI$1.50 per ton  
Shells  10-30 
Live fish  10 
Dolphins and porpoises  25 
Fish, fresh or chilled  10 
Fish, chilled or frozen  5 
Fish, dried, slated or in brine ; smoked fish, w hether or not cooked  20 
Crustaceans, molluscs  10 
Logs  Various specific rates, depending on species and quality  
Timber  2.5 
Rattan, raw or dried  30 
Coral 10 
Live animals  10 
Crocodile skin  10 
Source:  Information provided by Solomon Islands Customs aut horities.  
3.62.   Although export taxes discourage the production and trade of the dutiable products, given 
Solomon Islands' limited institutional capacity they provide a short - and medium -run means to 
capture economic rents from natural -resource exports. The auth orities consider export taxes a 
practical and cost -efficient means of raising revenue that could also encourage downstream 
domestic processing and help protect the environment. The authorities indicate that due to an 
expected decline in logging, a comprehe nsive tax review may be necessary.  
3.63.   Fiscal income from export taxes remains important for Solomon Islands. It amounted to 
SI$562.7 million in 2015 or 15.8% of total fiscal revenue (of which SI$548.1 million was export 
duties on logs), up from SI$170.4 milli on in 2009.  
3.2.3   Export prohibitions, restrictions, and licensing  
3.64.   Under the Customs and Excise Act, the Minister of Finance and Treasury can issue an order 
prohibiting exports of "any goods whatsoever" or to "any particular place". However, this provision 
has not been used since the last TPR. Solomon Islands prohibits exports of certain narcotics under 
the Dangerous Drugs Act.21 Exports for commercial purposes of wildlife specimens listed in 
                                                
20 The relevant Order distinguishes 24 different species and four different grades.  
21 Third S chedule to the Customs and Excise Act and sections 4(2) and 11, Dangerous Goods Act.  WT/TPR/S/3 49 • Solomon Islands  
 
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 Schedule I of the Wildlife Protection and Management Act 1998 are also prohibited.22 Under the 
Forest Resources and Timber Utilization Act, the exportation of certain round logs is prohibited.  
3.65.   Export restrictions apply to wildlife specimens, certain medicaments, firearms and 
ammunition, certain marine products, war relics, an d items of cultural significance. These items 
may only be exported with a licence granted by the Comptroller of Customs and Excise or the 
relevant government authority. Gold exports must be authorized by the Ministry of  Mines, Energy 
and Rural Electrificat ion, while exports of marine products must be authorized by the Ministry of 
Fisheries  and Marine Resources . A licence is also required for all products subject to export taxes 
(Section 3.2.2). Timber exports still require "specific authority" from the Cent ral Bank.  
3.66.   Special licence requirements apply for the exportation of cocoa and copra. Licences are 
issued by the Commodities Export Marketing Authority (CEMA) against a non -refundable 
administration fee of SI$150 and an annual fee of SI$5,000. Exporters of copra and cocoa also pay 
a management levy to CEMA per ton exported of SI$50 or SI$60 respectively (or any rate 
approved by the CEMA Board).  
3.2.4   Export support and promotion  
3.67.   Public export support and promotion activities are limited. A Marketing and Export 
Promotion Division exists in the Ministry of Commerce, Industry, Labour and Immigration . Its 
activities include the organization of national trade shows, the support of private companies to 
participate in exhibitions abroad, and the identification of new exp ort markets. The Division also 
issues GSP forms to exporters and has developed an export guide.  
3.68.   Exports are exempt from excise and goods taxes.  
3.69.   The Commodities Export Marketing Authority (CEMA) provides quality assurance and market 
intelligence services t o cocoa and copra exporters.  
3.2.5   Export -processing zones  
3.70.   To encourage foreign investment in the fisheries, agriculture and tourism sectors, the 
Government plans to establish special economic zones, where companies would benefit from tax 
and duty exemptions. It hopes that the expansion of these sectors will help to offset the ex pected 
long-term decline in the logging industry and uncertain prospects for mining.  
3.2.6   Export finance, insurance, and guarantees  
3.71.   Solomon Islands does not have any public finance, insuran ce, or guarantee schemes 
exclusively for exporters, nor does it have  public finance schemes for domestic production.  
3.3  Measures Affecting Production and Trade  
3.3.1   Incentives  
3.72.   Investors are eligible for various duty and tax concessions ( Sections 2.4 and 3.1.4.3).  In 
particular, imported machinery, equipment and other capital goods can be exempt ed from import 
duties. The Minister of Finance may also provide by order exemptions from income tax.  
3.73.   Rural development and the promotion of SMEs are central pillars of econ omic policy and 
donor -funded activities. The objective of the Solomon Islands Small Business Enterprise Centre is 
to be a catalyst for the development of successful businesses by designing and delivering courses 
and providing support to both new and existi ng business owners and managers.  
3.74.   Constituency Development Funds (CDF) absorb an important part of public expenditure 
(Section 2.1). Outlays for CDF s increased from SI$20 million to SI$350 million in 2016.  
                                                
22 Section 11(1), Wildlife Protection and Management Act 1998.  WT/TPR/S/3 49 • Solomon Islands  
 
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 3.75.   There are no R&D or regional subsidies in Solomon Islands.  
3.3.2   Competition policy and price controls  
3.76.   Solomon Islands does not have a generic competition law. Various statutory provisions 
relating to competition policy are laid down in the Consumer Protection Act of 1990, the Price 
Control Act of 1982, the Pri ce Control Order of 2011, and the Telecommunications Act of 2009. 
There is no active enforcement of the few provisions designed to prevent anti -competitive business 
practices. Although the authorities have been considering introducing new legislation for a  long 
time, there have been no concrete steps to strengthen the legal framework on competition policy 
since the last TPR. The authorities  also note that monopolies are widespread, partly reflecting the 
small size of the Solomon Islands market.  
3.77.   The Consumer  Protection Act contains general provisions on refusal to sell, tied selling, 
exclusive dealing, price discrimination, and monopolization.  The director of the Consumer Affairs  
and Price Control  Division of the Ministry of Commerce, Industry, Labour and Imm igration  has 
wide discretion in exempting particular firms from the provisions on exclusive dealing, price 
discrimination, and monopolization if this is "in the interest of the national economy". There is no 
statutory definition of this term. The Consumer Affairs and Price Control Division may also carry 
out competition -related investigations, but has not done so since the entry into force of the 
Consumer Protection Act. Price controls apply on various staples as a means to address perceived 
market failures , including low competition.  
3.78.   The Telecommunications Act regulates a number of competition -related issues in its area of 
competence. In particular, sections 60 and 61 prohibit practices that have the purpose or effect of 
lessening competition in the market.  The Telecommunications Commission of Solomon Islands has 
conducted its first investigations into anticompetitive conduct, concerning resellers and domestic 
interconnection.  
3.79.   Price controls may be established through ministerial orders issued under the Pri ce Control 
Act. They mainly apply to various staples as a means to address competition perceived as being 
too low. Price controls may apply only to specific areas of Solomon Islands. Draft price control 
orders must be sent to Parliament, which may annul th em, through resolution, within 20 days. 
Maximum prices are based on a mark -up system which allows traders to add a certain percentage 
on landed costs plus good s tax. 
3.80.   As at July 2016, price controls apply to: beef and pork meat, fish, rice, cooking oil, flo ur, 
curry powder, biscuits, sugar, sauces, milk, soaps, non -alcoholic beverages, and shipping freight 
rates. The relevant law is the Price Control (Product Substitute Goods) Order 2014.  
3.3.3   State trading, state -owned enterprises, and privatization  
3.81.   State -owned enterprises are active in a number of key sectors of the economy in Solomon 
Islands, including airlines, broadcasting, electricity, ports, post, and water. The State Owned 
Enterprises Act 2007 is intended to regulate the conduct and improve the performance  of state 
enterprises. The SOE Act states that the principal objective of every SOE shall be to operate as a 
successful commercial business. The Act's accountability provisions, which include the requirement 
to make publicly available a statement of corpor ate objectives, annual report, and audited financial 
statement, extend to all subsidiaries owned by these enterprises. State -owned enterprises and 
their subsidiaries must disclose assistance received from the Government. In 2013, the 
Government adopted a B orrowing Policy for SOEs with a view to striking a balance between 
efficiency and the provision of "services essential to society".  
3.82.   Currently , eight SOEs are operating under the Act: Solomon Island s Water Authority 
(SIWA), Solomon Island s Ports Authority (SIPA), Solomon Island s Electricity Authority (SIEA), 
Solomon Islands Broadcasting Corporation (SIBC), Solomon Islands Postal Corporation (SIPC), 
Investment Corporation of Solomon Islands (ICSI), Commodities Export Marketing Authority 
(CEMA), and Solomon A irlines (SAL). The ICSI, a statutory body created in 1988 to hold the 
Government's shares, has equity holdings in several enterprises.  WT/TPR/S/3 49 • Solomon Islands  
 
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 3.83.   Solomon Islands has not made any notifications concerning state trading enterprise s within 
the meaning of Article XVII of  the GATT 1994. In the context of the previous TPR of Solomon 
Islands, the authorities indicated that there were only two state  trading enterprises in the sense of 
Article XVII of the GATT 1994: the Government Pharmacy, which has exclusive import rights on  
methylated spirits and ethyl alcohol, and the Commodities Export Marketing Authority (CEMA).  
3.84.   Since the last TPR, overall profitability of SOEs in Solomon Islands has increased, following 
a program me of increased privatization, public –private partnerships , financial restructuring and 
efforts to place SOEs on a sound commercial footing.23 One SOE, Sasape Marina, was sold to 
private investors in 2012.  
3.3.4   Government procurement  
3.85.   Solomon Islands is not a party or observer to the Government Procurement Agreement. I n 
general, central government agencies procuring goods and services, or conducting public works, 
must follow instructions issued by the Ministry of Finance and Treasury.  
3.86.   Central government expenditure on goods and services totalled around SI$4,488 million  in 
2015. There is no data on the value of procurement at the sub -central level.  
3.87.   During the review period, n ew legislation on public procurement was adopted. Under the 
Public Financial Management Act 2013, the Minister of Finance and Treasury issued Financial 
Instructions to ensure the proper supervision and control of central government finances.24 
Chapter 7 of the Financial Instructions covers procurement of goods, services, and public works by 
the central government. Further subsidiary legislation with d etailed regulations is under 
preparation and expected to be adopted by the end of 2016.  
3.88.   A Central Tender Board is responsible for managing the tender process of goods or services 
used by more than one ministry and for all procurement above SI$500,000, whi le procurement 
between SI$100,000 and SI$500,000 is handled by ministerial boards (Table 3.8).  
Table 3.8 Purchasing limits , 2016  
Purchasing limits  Up to SI$10,000  More than SI$10,000 up 
to SI$100,000  More tha n SI$100,000 
up to SI$500,000  More than SI$500,000  
Procurement 
procedures  Accountable officer 
must approve the 
sole supplier based on 
one written quotation  Accountable officer must 
approve the supplier 
based on a minimum of 
three written quotations  Minist erial Tender 
Board must approve 
the supplier based on a 
competitive tender  Central Tender Board 
must approve the 
supplier based on a 
competitive tender  
Source:  Authorities of Solomon Islands.  
3.89.   For every competitive tender, the Board must: advertise the ten der in all daily newspapers 
and on the Ministry of Finance  and Treasury  website; issue the tender documents, which must 
specify evaluation methods and criteria; ensure all tenders are submitted in a sealed envelope; 
open all tenders immediately after closi ng time; keep full records of all original tender documents; 
and disclose the details of the successful tender and display them on the MoFT website.  
3.90.   There are no registration requirements for prospective tender participants. Procuring 
entities may maintai n lists of preferred suppliers for frequent purchases. Quotation or tender 
requirements may be waived for the procurement of domestic transport services, hotel 
accommodation or perishable goods, in a declared emergency, or when a ministry has entered into 
a preferred supplier arrangement. There are currently two preferred supplier arrangements in 
place, covering ICT goods and non -perishable food rations.  
3.91.   Foreign firms established outside Solomon Islands are not required to have an agent in 
Solomon Islands to participate in tenders. The Financial Instructions do not preclude discrimination 
                                                
23 Asian Development Bank (2015).  
24 Financial Instructions. Viewed at: http://www.mof.gov.sb/ReportsNew/FinancialInstructions.aspx 
[22 February 2016].  WT/TPR/S/3 49 • Solomon Islands  
 
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 between foreign and domestic products or suppliers, or against foreign -owned suppliers. There are 
no provisions that grant foreign products or suppliers less than national  treatment.  
3.92.   There is no formal procedure for bidder complaints. However, bidders can lodge 
administrative complaints with the tender board responsible for a particular tender.   
3.3.5   Intellectual property rights  
3.93.   Solomon Islands has not adopted any legislation to  implement the TRIPS Agreement. It has 
never made a notification under the TRIPS Agreement or a submission to the TRIPS Council. 
Solomon Islands is not a member of the World Intellectual Property Organization (WIPO), neither 
is it a signatory to any intern ational intellectual property rights treat ies. However, the authorities 
indicate their intention to become a member of WIPO and a signatory to relevant international IP 
treaties , and to establish a national IP office. Currently, copyright issues are under the 
responsibility of the Ministry of Culture and Tourism, while patents and trademarks are under the 
responsibility of the Registrar General.  
3.94.   The main legal instruments on intellectual property rights are the Copyright Act 1987, the 
Registration of Unite d Kingdom Patents Act, and the Registration of United Kingdom Trade Marks 
Act (Table  3.9). A Bill to protect traditional knowledge is currently before Parliament. According to 
the authorities, all IP legislation is currently being reviewed.  
Table 3.9 Summary of the protection of intellectual property rights, 2016  
Main legislation  Duration  Coverage  
Patents    
Registration of United Kingdom 
Patents Act, Chapter 179 of the 
Laws of Solomon Islands, 14 
July 1924  Patents expire at the same 
time as their respective UK 
patents  Registration in Solomon Islands is limited to patents granted 
in the United Kingdom within the previous three years  
Industrial designs    
United Kingdom Designs 
(Protection) Act, Chapter 181 of  
the Laws of Solomon Islands, 
16 July 1934  According to certificate of 
registration issued in the 
UK Registration in Solomon Islands is limited to designs 
registered previously in the United Kingdom  
Utility models    
No specific statute  n.a. n.a. 
Tradema rks   
Registration of United Kingdom 
Trade Marks Act, Chapter 180 of 
the Laws of Solomon Islands, 
20 June 1939  Trademarks expire at the 
same time as their 
respective UK trademarks  Registration in Solomon Islands is limited to trademarks 
registered previou sly in the United Kingdom  
Geographic indications    
No specific statute  n.a. n.a. 
Copyright and related rights    
Copyright Act 1987, Chapter 
138 of the Laws of Solomon 
Islands, 1 June 1988  50 years from the end of 
the calendar year in which 
the author d ied, the 
recording or film was 
published, or the broadcast 
made  Original literary, dramatic, musical, or artistic work;  sound 
recordings, cinematograph films, broadcasts, and editions 
first published in Solomon Islands that meet certain 
conditions.  General  exceptions are listed under sections 7 
and 15 of the Act;  special exceptions are contained in 
sections 8 to  10 of the Act  
New plant varieties    
No specific statute  n.a. n.a. 
Layout designs of integrated 
circuits    
No specific statute  n.a. n.a. 
Undisc losed information    
No specific statute  n.a. n.a. 
n.a. Not applicable.  
Source:  WTO Secretariat, based on information provided by the Solomon Islands authorities.  
3.95.   There are no statutory provisions on compulsory licensing of intellectual property rights. T he 
Registration of United Kingdom Patents Act and the Registration of United Kingdom Trade Marks 
Act do not contain provisions on international exhaustion. In practice, Solomon Islands allows 
parallel imports of items protected by patents and trademarks. U nder the Copyright Act, the 
copyright owner cannot prevent someone who does not own the copyright from importing 
protected items acquired legally in a foreign market.  WT/TPR/S/3 49 • Solomon Islands  
 
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 3.96.   The authorities recognize that the intellectual property laws in Solomon Islands are date d 
and not in compliance with its obligations under the WTO. They do, however, acknowledge that 
some intellectual property protection is necessary to encourage foreign investment and domestic 
innovation and entrepreneurship.25 Since 2014, the Government has been developing a national IP 
strategy.  
3.97.   The Copyright Act 1987 provides for civil remedies and criminal penalties for copyright 
infringement. The production, exhibition, or distribution for commercial purposes of items that are 
known to infringe copyright s is a criminal offence. The Registration of United Kingdom Patents Act 
and the Registration of United Kingdom Trade Marks Act do not contain enforcement provisions.  
3.98.   Under the Copyright Act 1987, a copyright owner may request the Comptroller of Customs 
to prohibit imports of items suspected of infringing copyright for a period of up to five years. 
According to the authorities, no import prohibitions have been put in place under this provision. 
Under the Act, the Minister may also deny copyright protection t o the works of citizens from 
countries that "fail to give adequate protection to Solomon Islanders' works". According to the 
authorities, between ten and twenty copyright s are registered annually.  
3.99.   Enforcement activities mainly consist of public campaigns to raise awareness of IP issues, 
such as appeals to stop piracy. The Government also disseminates information regarding 
intellectual property protection for creators.  
                                                
25 Ministry of Foreign Affairs and External Trade (2015).  WT/TPR/S/3 49 • Solomon Islands  
 
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  4  TRADE POLICIES BY SE CTOR  
4.1  Agriculture, Fisheries, and Forestry  
4.1.1   Agriculture  
4.1.  The economy o f Solomon Islands heavily relies on the production of primary products; the 
primary sector contributes to around a third of GDP and provides some of the country's export 
commodities such as timber, fish and copra (Table 4.1). During the review period, the contribution 
of agriculture to GDP declined slightly to 28% in 2014. The primary sector is the major source of 
food crops, cash crops and livestock for about 85% of the population in rural areas. The livestock 
subsector  consists of pigs, backyard chickens,  and cattle. Solomon Islands imports meat mainly 
from Australia, New Zealand, and Vanuatu to meet its domestic consumption needs.  
Table 4.1 Production and exports by major commodity, 2010 -15 
 2010  2011  2012  2013 2014  2015  
Production (volume)        
 Copra (mt)  26,610  13,922  19,101  13,922  19,101  17,408  
 Coconut oil (mt)  189 196 238 196 238 1,163  
 Palm oil (mt)  31,846  32,261  33,752  32,261  33,752  32,579  
 Palm kernel oil (mt)  3,387  3,201  3,347  3,201  3,347  3,614  
 Fish catch (mt)  29,377  25,846  32,796  25,846  32,796  28,917  
 Cocoa (mt)  4,838  5,054  4,758  5,054  4,758  4,521  
 Timber (000  m3) 1,948  1,895  2,128  1,895  2,128  2,292  
 Gold (ounce s) 67,819  62,541  17,057  62,541  17,057  .. 
 Silver (ounce s) 28,993  23,639  8,715  23,639  8,715  .. 
Exports ( SI$ million)        
 Copra  88.4 184.4  172.9  42.3 73.3 73.7 
 Coconut oil  3.3 .. 6.4 14.8 15.7 29.5 
 Palm oil  211.2  265.4  276.7  192.6  187.5  168.6  
 Palm kernel oil  33.3 58.9 41.0 26.3 30.7 62.5 
 Fish catcha 111.5  152.7  168.2  124.7 100.6  33.0 
 Cocoa  116.0 121.6  65.5 67.2 95.2 90.1 
 Timber , sawn 46.2 71.5 72.8 71.5 57.2 45.5 
 Timber in logs 951.8  1,481.1  1,436  1,770.3  1,952.8  2,190.6  
 Gold 26.4 516.5  828.3  780.6  308.7  19.8 
 Silver  0 0 4.4 1.1 3.4 .. 
.. Not available.  
a Does no t include fish catch from the Exclusive Economic Zone  by foreign flagged vessels.  
Source:  Information provided by the National Statistics Office; and CBSI (2016), Quarterly Review, 
December  2015.  
4.2.  The Ministry of Agriculture and Livestock (MAL) is responsib le for agriculture - and livestock -
related policy. The objectives of the Government's policy for the agricultur al sector are to: address 
the basic needs of people in villages and rural areas, and ensure real improvement in their 
standard of living; work tow ards food security and poverty alleviation; generate jobs and increased 
employment opportunities for the population and achieve high economic growth, wealth and social 
wellbeing; and , ensure the sustainable utilization and conservation of natural resources , protection 
of the environment and successfully combating the adverse effects of climate change.1 
4.3.  Key pieces of legislation for the agricultural sector include: the Livestock Development 
Authority Act 1977, covering all aspects of livestock production and  the commercial development 
or related products; the Disease s of Animal s Act (Cap 37) as amended in 1972 and the Agricultural 
Quarantine Act 1982, to control the importation and movement of plant s, animals and related 
products; the Pure Food Act 1996, to c ontrol safe use and trade of food products; the Wildlife 
Protection and Management Act 1998, to ensure compliance with the Convention on International 
Trade in Endangered Species of Wild Fauna and Flora (CITES); and the Biosecurity Act 2013.  
                                                
1 Democratic Coalition for Change Government (DCCG), Policy Statement 2014 -2020.  WT/TPR/S/3 49 • Solomon Islands  
 
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  4.4.  Lack of clear  property rights remains a major impediment to agricultural development in 
Solomon Islands. Land tenure and land acquisition is regulated under the Land and Titles 
Act 1968. There are two land tenure systems: the customary land tenure system, and the 
registered (alienated) land tenure system. The customary land tenure system controls about 85% 
of the total land area, making the mobilization of land for large -scale economic projects 
problematic. The authorities are of the view that the legislation is outdate d, and in need of a 
thorough overhaul. In 2014, the Land and Titles Act was amended to establish a Land Board 
endowed with the power to deal with interest in land and all other related powers and functions.2 
In 2015, the Board issued its policies on the is suance of temporary occupation licen ces, and the 
renewal of fixed -term estates (FTE).3 Under the new policies, the term of FTE renewal was 
increased from 50 years to 75 years. The Board has reviewed over one thousand land applications.  
4.5.  The National Agricul ture and Livestock Sector Policy 2009 -2014 was the main policy 
framework covering the review period.4 The policy was expected to contribute to, inter alia , 
poverty alleviation and enhanced food security; sustainable management of natural resources and 
the environment; the readjustment and restructuring of the farm sector; investment in agricultural 
research and development; food safety and quality improvement; and, reduced dependency on 
food imports and increased agricultural exports.  It outlined cross -sectoral policies as well as 
policies specific to subsector s such as the coconut, cocoa, oil palm, and rice  subsectors . In the 
area of international trade and trade facilitation, the objective of the agricultural policy was to 
enhance agricultural trade, incre ase the contribution of agricultural export s to total merchandise 
exports, and generally, enhance the country's export potential. Strategic activities included: 
ensuring that commitments on tariff reduction did not jeopardize the development of the sector;  
coordinating agricultural trade policies with the national trade policy; and updating relevant 
legislation.  
4.6.  Launched in 2015, the Agriculture and Livestock Sector Policy 2015 -2019 has four 
objectives5: to achieve "food sovereignty "; to improve rural livel ihoods; to promote agriculture for 
import substitution; and, to increase trade. Specific targets include: reaching 40,000 hectares of 
oil palm over the next ten years; establishing a 400 -hectare commercial rice production project; 
continuing the rehabilita tion and value -added product development of coconut and cocoa; reviving 
the cattle industry; and improving the production and processing of staple food crops and spices.  
4.7.  During the review period, the enactment of the Biosecurity Act 2013 was one of the ma jor 
developments in the legal framework. The law aims at preventing the entry and spread of animal 
and plant pests and diseases into and throughout Solomon Islands, and controlling their 
establishment and spread. It also provides the legal framework for co mpliance with some 
international and regional obligations, including requirements under the International Plant 
Protection Convention, the Pacific Plant Protection Organisation, and the World Organisation for 
Animal Health. The legislation establishes Bios ecurity Solomon Islands (BSI) as the agency in 
charge of, inter alia , maintaining quarantine services; negotiating market access requirements for 
agricultural exports; and facilitating trade while ensuring compliance with international standards.  
4.8.  Solomon I sland s is a beneficiary of the Australia - and New Zealand -funded Pacific 
Horticultural and Agricultural Market Access Programme (PHAMA)6, a programme designed to help 
exporters in Pacific Island countries meet the standards and requirements of destination markets. 
Under the programme, assistance was provided to, inter alia , help the tuna processing industry 
maintain compliance with EU food safety requirements; help the forest industry develop guidelines 
to ensure that sawn timber is sourced and exported leg ally; and establish a cocoa quality testing 
facility at the Commodities Export Marketing Authority (CEMA).  
4.9.  A range of tax incentives are available for agricultural projects. These  include: an income tax 
exemption for a period of three to six years for elig ible projects; the possibility of claiming 
                                                
2 These include the power: to grant and transfer fixed -term estates; to set land premiums and rentals; 
to decide whether to allocate interest in land by direct allocation or by ballot or auction; and, to grant 
temporary occupation licences. These funct ions were previously carried out by the Commissioner of Lands.  
3 Ministry of Lands, Housing and Survey (2016).  
4 Ministry of Agriculture and Livestock (2009).  
5 Ministry of Agriculture and Livestock (2014).  
6 The programme covers the following countries: Fiji, Samoa, Solomon Islands, Tonga, and Vanuatu.  WT/TPR/S/3 49 • Solomon Islands  
 
- 42 - 
 
  exemption from income tax for a period of five years out of the first ten years of commercial 
production.  
4.10.   Coconut and cocoa are the main cash crops and a source of activity for a majority of 
households in rural a reas. In 2014, cocoa exports neared 5 million metric tons, for an estimated 
value of SI$95.2 million. Malaysia and Singapore are the two major markets for cocoa exports. A 
few operators are involved in copra oil and virgin coconut oil processing for value -added products 
and oil exports. A value chain analysis conducted in 2013 (at a time of low prevailing prices) 
concluded that the margin was not sufficient to generate commercial interest.7 A company 
(Kokonut Pacific Solomon Islands) is currently involved i n the production and export of virgin 
coconut oil, predominantly to Australia.  
4.11.   The Government's vision for the coconut sector is to have, by 2020, a modernized industry 
"that is able to contribute significantly to national peace, unity and economic develo pment".8 The 
Coconut Sector Strategy (CSS) 2010 -2020 is the main policy framework for the sector. Its purpose 
is to guide and support the development of the coconut industry, and achieve an annual target of 
about 370 million nuts (worth US$201 million) pro cessed and commercialized.  
4.12.   The Commodities Export Marketing Authority (CEMA), a statutory body under the Ministry of 
Commerce, Industry, Labour and Immigration , has regulatory functions in the coconut and cocoa 
subsectors. It facilitates pricing, licensin g, inspection and grading of these commodities. Its 
revenues are from fee s collected from the issuance of licen ces. Licen ces for both copra and cocoa 
exports are valid for 12 months. They are subject to an application (or renewal) fee of SI$150, and 
a lice nce fee of SI$5,000 each. Inspection and grading requirements are set out in the Copra 
Inspection and Grading Regulations 1985 and the Cocoa (Amendment) Regulations 2013 for cocoa 
exports. A management levy of SI$50 per metric ton applies to copra exports and a management 
levy of SI$60 per metric ton applies to cocoa exports. As at November 2015, there were 
3 registered copra export licen ce holders and 13 registered cocoa export licen ce holders.  
4.13.   Basic food items are subject to price controls (Section 3.3.2). 
4.1.2   Fisheries  
4.14.   The fisheries sector continues to be of major importance to the economy of Solomon Islands 
despite its relatively small contribution to the GDP ( 2.5% in 2014 ). Fish and fish products 
accounted for 11.5% of total exports in 2015 (Table A1.1).  Japan and Vanuatu are the 
predominant export markets, followed by Chinese Taipei, Thailand, the US, and Fiji.  The fisheries 
sector is characterized by the large importance of both subsistence fisheries (with relatively low 
productivity) and offshore foreign -based fisheries.  
4.15.   In 2013, there were 360 licensed fishing vessels, including 183 distant water fishing vessels 
(including purse seine, longline and pole -and-line vessels ), 177 charter vessels (primarily from 
China and Chinese Taipei) and 11 domestic vess els.9 The total catch from the Exclusive Economic 
Zone (EEZ) was about 124,724 tonnes, comprised of  65.2% skipjack tuna and 24.7% yellowfin 
tuna. Most of the catch is exported for processing abroad. About 10% of the catch is processed 
locally through SolTu na, a canning plant based in Noro , Western Province. SolTuna processes 
about 22,000 ton nes annually, with an export value of about US$44 million.  
4.16.   The Ministry of Fisheries and Marine Resources is responsible for regulating the fisheries 
sector. The Fisher ies Management Act 2015 (FMA) , together with its related regulations , is the 
main legal framework for the sector. It makes provisions for the conservation, management, 
development and sustainable use of fisheries and marine resources in Solomon Islands, an d the 
monitoring and control of fishing vessels. The legislation does not apply to vessels used by 
indigenous Solomon Islanders for customary fishing.  
4.17.   Under the FMA, the export or import of fish and fish products is subject to licensing. The Act 
provides for the establishment of: a Fisheries Licensing Committee, tasked with making 
                                                
7 Young, David, and Pelomo, Moses (2014).  
8 ITC (2013) . 
9 FFA (2015) . WT/TPR/S/3 49 • Solomon Islands  
 
- 43 - 
 
  recommendations on the grant, renewal, suspension and revocation of licen ces; a Fisheries 
Appeals Committee, to hear appeals from decisions on licensing; and, a Fisheries Advisor y Council, 
to make recommendation s on matters relating to fisheries conservation, management, 
development and sustainable use. The legislation provides for the establishment of a fisheries 
Management and Development Fund to receive funds from foreign fishi ng vessel access fees. The 
fund is not operational.  A health certificate is required for all export shipments, for quality control 
purposes. There is a 10% royalty tax on fish caught within the EEZ. An exemption from the royalty 
tax applies to processed fi sh, with a view to encouraging local transformation.  
4.18.   Solomon Islands is a member of the Parties to the Nauru Agreement (PNA)10, which controls 
about 50% of the global supply of skipjack tuna, the most commonly canned tuna. Since 2010, 
members of the PNA hav e been using a Vessel Day Scheme (VDS) to manage their tuna stock.11 
Its purpose is to constrain and reduce catches of target tuna species, and increase the rate of 
return from fishing activities through access fees paid by distant water fishing nations (DW FNs). 
Under the VDS, members agree on a limited number of fishing days for the year based on the 
status of tuna stocks. Days are allocated to countries which then sell them to the highest bidder. 
When apportioning fishing days, provisions are made for regi onal fishing arrangements to which 
the PNA members are a party.12 Since 2015, the minimum benchmark fee for foreign fishing 
vessels is US$8,000 per fishing day (up from US$6,000 in 2014).13  
4.19.   PNA members also use a number of measures to manage their stock; pr otect the marine 
ecosystem; and , combat illegal, undeclared and unreported (IUU) fishing. These include: closures 
of high seas pockets ; seasonal bans on  the use of fish aggregating devices (FAD); satellite tracking 
of boats; the presence of an observer on all purse seiners. Since January 2016, PNA members 
launched an initiative to levy a fee of US$1,000 per fishing day on each ship that sets FADs.14  
4.20.   The Government's objective for the fisheries sector is to increase onshore fishing and 
encourage processing t o add more value. For this purpose, the harvesting of certain marine 
products is reserved for domestic companies. In 2012, the Government introduced changes to its 
longline licensing, with a view to encouraging local processing and inducing companies to in vest 
locally. Under the new policies, fish caught in the EEZ should be unloaded and processed in 
Solomon Islands. Operators that choose to unload their catch abroad might be subjected to 
penalties, and will have low priority in future licen ce issuance.  
4.21.   Tariff protection accorded to the activity remained unchanged during the review period. 
Applied MFN tariffs on fish imports average d 10% in 2015 , which is slightly higher than the overall 
average applied MFN tariff of 9. 3% (Table 3.2). All tariff lines relate d to fish and fisheries products 
are bound, and the simple average bound rate is 89.7%.  
4.1.3   Forestry  
4.22.   Between 2010 and 2015, forest area in Solomon Islands declined at an annual average rate 
of 0.3% to 2,185 hectares, covering about 78.1% of the land area.15 It is a major source of 
revenue for the various stakeholders  – export duty revenue for the Government  and royalt ies for 
landowners  – and source of livelihood for a large proportion of the population. However, forest 
resources are projected to be completely de pleted by 2020 if there is no active reforestation.16 
                                                
10 PNA members are: the Federated States of Micronesia, Kiribati, Marshall Islands, Nauru, Palau, 
Papua  New Guinea, Solomon Islands, and Tuvalu.  
11 The Vessel Day Scheme replaces the purse seine vessel number limit of 205 set under the Palau 
Arrangement for the Management of the Western Pacific Purse Seine Fishery (Palau Arrangement).  
12 These regional arrangements include: the States of Micr onesia Arrangement for Regional Fisheries 
Access (FSMA) and the Multilateral Treaty on Fisheries between the Governments of certain Pacific Island 
States and the Government of the United States of America (US Treaty).  
13 Memorandum of Understanding between the Parties to the Palau Arrangement on Minimum Bench 
Mark Fee for a Fishing Day under the Vessel Day Scheme. Viewed at: 
http://www.pnatuna.com/sites/default/f iles/MOU%20Benchmark%20VDS%20fee%202014.pdf .  
14 PNA online information. Viewed at: http://www.pnatuna.com/node/260 .  
15 FAO (2015).  
16 Solomon Times , "Solomon Islands Forests Face Complete Depletion by 2020", 1 December 2014. 
Viewed at: http://www.solomontimes.com/news/solomon -islands -forests -face-complete -depletion -by-
2020/8329 . WT/TPR/S/3 49 • Solomon Islands  
 
- 44 - 
 
  There are two commercial forest plantations in the country: Kolombangara Forest Products Limited 
with a production plantation of 14,237 hectares, and Eagon Pacific Plantation Limited with a 
production pl antation of 10,000 hectares. Like in most sectors, the land tenure system seems to 
be a major constraint for the establishment of large -scale forest plantations. Enforcement of 
legislation in the forest sector is poor in most of the provinces. Huge discrep ancies between 
officially recorded log exports and imports reported by major trading partners (Section  1.6) point 
to a strong prevalence of under -declared or illegal logging.  
4.23.   The Ministry of Forest ry and Research (MFR) is responsible for the overall manage ment of 
the forest resources of Solomon Islands. It is also responsible for drafting and implementing 
forestry legislation, and monitoring, auditing and inspecting logging operations and shipments. The 
Solomon Forestry Association (SFA) is the association representing the forest industry in 
negotiations with the Government. By law, all logging companies are required to be a member of 
the SFA. Member companies pay an annual membership fee of SI$1 per cubic metre of log 
exports.  
4.24.   The Forest Resources and Timb er Utilization Act (FRTUA) 1999 provides for the conservation 
of forests and the improved management of forest resources, the control of timber harvesting, the 
encouragement and facilitation of sustainable forestry activities, the establishment of plantati ons, 
and the domestic processing of timber. A licen ce from the Commissioner of Forests is required for 
all felling of trees and milling. Felling licences are issued for a five-year term at a cost of 
SI$10,000, and are subject to an annual licensing fee of SI$10,000. Licensees are required to post 
a bond of SI$250,000 to be established with the Pan Oceanic Bank (POB) or a guarantee from any 
commercial bank before commencing operations. They are also required to submit annual 
harvesting plans and obtain conse nt ("Development Consent") from the Director of Environment.  
4.25.   The MFR has the power to declare certain land areas to be a state forest or a forest reserve. 
In February 2015, the Government announced a moratorium on new registrations and applications 
for log ging business activities.17 However, it has not been implemented.  The Government is also 
providing a freight subsidy to help businesses get the timber to the port in Honiara. Other policy 
tools include market intelligence and the provision of storage facili ties. 
4.26.   During the review period, the Forestry Development Strategy 2009 -13 was the main policy 
framework for the sector. The policy objectives for the sector included: reviewing the legislation; 
promoting downstream processing of forestry and the timber ind ustry; encouraging reforestation 
and smallholder plantation schemes; establish ing parks and conservation areas and encourag ing 
participation in initiatives aimed at reducing emissions from deforestation and forest degradation 
(REDD+); and encourag ing mediu m- to large -scale plantation development, in partnership with 
landowners.  
4.27.   The export of round logs is administered by the Central Bank of Solomon Islands (CBSI), in 
collaboration with the MFR. Exporters must be granted "Specific Authority " by the CBSI, aft er 
receiving clearance from the MFR. In 2015, 819 applications by log exporters for "Specific 
Authority to export" were approved by the CBSI, covering a volume of 2.7 million cubic metres of 
round logs and a value of approximately SI$2.2 million.18 For timb er products other than round 
logs, a permit to export is required. The permit is issued by the Ministry of Forestry and Research. 
A phytosanitary certificate is required for markets where fumigation is required. The e xport of 
some key commercial species , such as vitex ( Vitex cofassus ), kwila ( Intsia bijuga ), and rosewood 
(Pterocarpus indicus ), in roundwood form is prohibited. They can only be exported as processed 
timber. Some species such as ngali nut ( Canarium indicum ) and tubi ( Xanthostemon melanoxylon ) 
may only be exported with approval from the Ministry of Environment, Climate Change, Disaster 
Management and Meteorology.  
4.28.   Log exports are subject to an export tax at rates depending on the specie s and the quality 
(Section 3.2.2).  
                                                
17 SIBC online informati on. Viewed at: http://www.sibconline.com.sb/moratorium -imposed -on-new-
logging -registrations -applications/  [24.08.16].  
18 CBSI (2016a).  WT/TPR/S/3 49 • Solomon Islands  
 
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  4.29.   The Protected Areas Act 2 010 and the Protected Areas Regulations 2012, which came into 
force in 2012, aim at fulfilling Solomon Islands' commitments under the Convention on Biological 
Diversity. Under the legislation, any group of landowners can apply to the authorities to create a 
protected area on their land. NGOs and the Government can also apply to create a protected area. 
The legislation defines five types of protected area, depending on their purpose: natural reserves, 
natural parks, natural monuments, resource management are as, and closed areas. Commercial 
logging and mining within protected areas are prohibited. The Protected Areas Regulations 2012 
prescribe activities that are prohibited or restricted in a protected area. A Protected Areas Advisory 
Committee (PAAC) is taske d with the responsibility of advising the Government o n related matters, 
and granting permits for activities such as biodiversity research or bio -prospecting research in 
protected areas.  
4.30.   Other key pieces of legislation include the Environment Act 1998 whic h requires an 
environmental impact assessment before the commencement of any timber processing activity; 
the Illegal Logging Prohibition Act 2012; and the Wildlife Protection and Management Act which 
regulates the export and import of certain animals and p lants.  
4.31.   Solomon Islands joined the UN -REDD Programme in 2010.19 Solomon Islands is not a 
member of the International Tropical Timber Organization (ITTO), an intergovernmental 
organization promoting the conservation of tropical forest resources, and their sus tainable 
management, use and trade.  
4.2  Mining and Energy  
4.2.1   Mining  
4.32.   Solomon Islands' mineral resources include deposits of gold,  copper,  lateritic bauxite, lead, 
nickel, and zinc. The industry is however predominantly focused on the extraction of gold and 
nickel . In 2013, Solomon Islands produced 62,541 ounces of gold and 23,639 ounces of silver.20 
Mineral export receipts reached US$210 million in 2014 before dropping to US$44 million in 2015 
following the closure of the Gold Ridge Mine. Despite its declining cont ribution to economic output, 
the mining sector has the potential to be a major contributor to government revenues and foreign 
exchange earnings.  
4.33.   The Government has the sole authority to allocate mineral rights. The Department of Mines 
and Energy in  the Min istry of Mines, Energy and Rural Electrification (MMERE)  has the 
responsibility of administering and regulating the mineral sector.  
4.34.   The Mines and Minerals Act 1990 is the main law governing mining activities in Solomon 
Islands. It vests the ownership of mi nerals in "the people and the Government of Solomon 
Islands". Any business wishing to carry out any of the activities  under the Act  must obtain the 
approval of the relevant landowners. The MMERE may order that land be compulsorily acquired for 
the purpose of mining. In accordance with the legislation, a permit from the Department of Mines 
and Energy is required prior to engaging in any prospecting and mining activity. Permits can take 
the form of a reconnaissance permit, a prospecting licen ce, or a mining l ease. Permit applications 
are processed by the Minerals Board, which is composed of representatives of the central and 
relevant provincial governments, and landowners. The Minerals Board determines the scope and 
duration of permits, and the obligations of permit holders.  
4.35.   In 2014, the Mines and Minerals Act was amended to include provisions allowing the 
authorities to require licen ce holders to invest in the construction of "approved infrastructure", 
defined as infrastructure that would benefit a local comm unity and could be constructed more 
efficiently by a mining company than by the Government.21 The legislation also set the rate of 
royalty at 3% of the gross value for minerals considered as most precious (compared to 1.5% 
previously). These are gold, coppe r, silver, nickel, bauxite, and iron ore. The rate of royalty had 
previously been set by the Government under its discretion. For the other type s of minerals, 
                                                
19 The United Na tions Collaborative Programme on Reducing Emissions from Deforestation and Forest 
Degradation in Developing Countries (UN -REDD) was launched in 2008.  
20 Central Bank of Solomon Islands (2016b).  
21 Mines and Minerals (Amendment) Act 2014.  WT/TPR/S/3 49 • Solomon Islands  
 
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  royalty payments are determined by the line ministry in consultation with the Minister of Finance  
and Treasury. Royalties for the most precious metals are to be paid into the Consolidated Revenue 
of the Government and distributed among stakeholders as follows: 40% to landowners; 10% to 
the relevant provincial government; and 50% to the central governm ent. The landowners' portion 
is included as consolidated revenue if the project is in an area without a landowner. For other 
types of minerals, royalties are to be paid into a newly established Mining Royalty Special Fund; 
the allocation rule is at the dis cretion of the line ministry.  
4.36.   There are no statutory limitations on foreign ownership of permits, except that holders of 
alluvial mining permits must be Solomon Island citizens.  
4.37.   Exports of gold and other metals are subject to taxes ( Section  3.2.2). Under t he Income Tax 
Act, mining companies can deduct expenditure in infrastructure projects approved by the 
Government  for income tax purposes . A permit is required for gold exports.  
4.38.   Solomon Islands joined the Extractive Industries Transparency Initiative (EITI ) in July 2011 
and was granted EITI Candidate status in June 2012.22 A stakeholder group (Solomon Islands 
Extractive Industries National Stakeholder Group) comprising representatives from the extractive 
companies, the Government, and civil society was forme d in January 2012. The first EITI report for 
Solomon Islands was issued in June 2014, and reconciled the payments made during 2012 
and 2013.  
4.2.2   Energy  
4.2.2.1   Electricity  
4.39.   At present, Solomon Islands is largely dependent on imported petroleum fuel for its 
electricity  production. Nonetheless, there is considerable potential for solar energy owing to the 
country's location near the equator , and for coconut -based biofuel due to  the massive planting of 
coconut. There is also significant potential for hydroelectricity deve lopment, in addition to  
indications of exploitable geothermal resources in locations such as West Guadalcanal, Paraso Bay 
on Vella Lavella Island, Simbo Island, and Savo Island.23  
4.40.   Solomon Islands has one of the lowest rates of electricity access in the wor ld, and some of 
the highest electricity prices. Access is uneven across the country. In rural areas, where 85% of 
the population lives, less than 10% of households have access to electricity, and less than 6% are 
connected to the national grid.24 In 2015, t otal power generation was 81.5 GWh (Table 4.2).  
Table 4.2 Generation and sales of electricity, 2010 -15 
 2010  2011  2012  2013  2014  2015  
Units generated  79,143  74,669  75,313  81,083  83,930  85,563  
Units sold  55,893 60,918  55,181  61,463  65,403  67,014  
 (%) 
 - Domestic  15.5 20.2 15.0 23.0 21.3 21.9 
 - Commercial and industrial  66.7 64.1 70.1 61.4 69.3 62.1 
 - Government  14.7 12.9 13.4 14.3 8.7 14.9 
 - Other  3.0 2.7 1.6 1.3 0.7 1.1 
Source:  CBSI (2016), Quarterly  Review December 2013 and 2015 , Vol. 28, No.  4. Viewed  at: 
http://www.cbsi.com.sb/fileadmin/publications/qr/2015/QR -DEC2015.pdf . 
4.41.   The Solomon Islands Electricity Authority (SIEA), a state -owned company, has monopoly 
over the electricity market. It has exclusive rights for the transmission and distribution of 
electricity in all urban and provincial centres (i.e. Honiara, nine provincial centres, and Noro 
                                                
22 Solomon Islands Extractive Industries Transparency Initiative (SIEITI) online information. Viewed at: 
http://www.sieiti.gov.sb/index.php . 
23 A geothermal energy prospecting licence was granted to Kentor Gold Ltd, an Austra lia-based 
company, to explore the feasibility of a 20  MW geothermal plant on Savo Island to power Honiara.  
24 World Bank online information. Viewed at: http://www.worldbank.org/en/news/press -
release/2014/03/21/solomon -islands -gets-13-million -improve -efficiency -reliability -electricity -services -honiara .  WT/TPR/S/3 49 • Solomon Islands  
 
- 47 - 
 
  Township in the Weste rn Province). It also has exclusive rights for power generation, with some 
exceptions: private generation is allowed provided that the generation capacity remains below 
50 kW. A number of NGOs are actively involved in developing rural electrification proje cts. 
4.42.   The Electricity Act of 1989 is the main law governing the electricity sector in Solomon 
Islands. Under the legislation, the supply of electricity, and the operation of installations to that 
end, is subject to licensing by the SIEA. Most private genera tors with a capacity of 50  kW or less 
are exempt from the licensing requirement. Licen ces are granted for a period not exceeding 
21 years, and may be transferred.  
4.43.   Electricity tariffs are high and account for a major cost for businesses operating in Solomo n 
Islands. In 2013, the tariff rate was US$0.86 per kWh for domestic users and US$0.92 per kWh for 
commercial or industrial users. Tariffs are determined by the Minister of Mines, Energy and Rural 
Electrification on the recommendation of the SIEA.25 The tar iff structure comprises two parts: a 
base tariff and a fuel tariff component.26 The base tariff is adjusted annually by 90% of the CPI 
change during the previous year; the fuel tariff is adjusted every quarter by 95% of the change in 
fuel prices during the previous quarter. In 2015, tariff charges were reduced at rates between 
3 and 4% as part of an institutional reform of the sector, and also because of lower global oil 
prices . The latest adjustment to the tariff was implemented on 1 July 2016.27 During the review 
period, the Government implemented the Solomon Islands Sustainable Energy Project (SISEP), 
which aimed at improving the operational efficiency, system reliability and financial sustainability 
of the SIEA. The project has contributed to the financial  turn-around of the SIEA. The company 
has recovered from a situation of recurrent operating losses (of up to 30% of total operating 
revenue in 2007) to one of profit -making since 2011.28 The project has also contributed to 
reducing losses, improving power r eliability in Honiara, and increasing revenue collection. In 2014, 
the World Bank provided US$13 million in additional financing, to further strengthen the capacity 
of the main power grid.29 In May 2016, a 1 -MW solar farm was constructed to supplement the 
generation capacity of Honiara.30 
4.44.   Plans to increase generation capacity include the Tina River Hydropower Development 
Project, and a geothermal resource -based project on Savo Island (about 35  km offshore from 
Honiara). The Tina River Hydropower Development P roject involves the construction of a 
20-MW run-of-the-river hydropower facility to supply electricity to the capital city of Honiara.31 The 
facility is to be developed on a build -own-operate -transfer basis by an independent power 
producer. The producer wil l sell the power to SIEA under a power purchase agreement.  
4.45.    Electricity supplied by SIEA is not subject to the sales tax. Since 2010, imported solar 
equipment is exempted from import duty and goods tax, with a view to support ing clean energy 
development.  
4.2.2.2   Petroleum  
4.46.   There is no upstream oil industry in Solomon Islands. In 2014, mineral fuels accounted for 
about 20.1% of total imports (Table A1.2).  
4.47.   The Petroleum Act of 1987 is the main legal framework governing petroleum activities in 
Solomon Islands. Under the legislation, a licen ce from the Ministry of Mines, Energy and Rural 
Electrification  is required in order to engage in petroleum exploration.  
                                                
25 Section 21, Electricity Act.  
26 Electricit y Tariff (Automatic Base Tariff and Fuel Tariff Adjustment) Regulation 2005.  
27 SIEA online information. Viewed at: http://solomonpower.com.sb/sites/default/files /tariff/Q3%20 
Tariff%202016.pdf .  
28 SIEA (2016).  
29 World Bank press release, "Solomon Islands Gets US$13 Million Boost to Improve Efficiency and 
Reliability of Electricity Services in Honiara", 22 March 2014. Viewed at: http://www.worldbank.org/en/news/ 
press -release/2014/03/21/ solomon -islands -gets-13-million -improve -efficiency -reliability -electricity -services -
honiara . 
30 Prime Minister's Press Secretariat Office online information. Viewed at: 
http://pmpresssecretariat.com/2016/05/10/ government -launched -first-commercial -solar-farm/  [05.08.2016].  
31 World Bank (2014).  WT/TPR/S/3 49 • Solomon Islands  
 
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  4.48.   Petroleum products are imported by two national oil companies, Markwarth Oil Ltd (MOL) 
and South Pacific Oil L imited (SPOL). Petroleum and gas prices are regulated by the Ministry of 
Commerce, Industr y, Labour and Immigration (MCILI). The Ministry sets maximum prices for 
wholesale and retail.  
4.2.3   Manufacturing  
4.49.   Manufacturing within Solomon Islands remains relatively mi nor and is largely focused on the 
local market. Key activities in the sector include basic timber processing, furniture making, food 
packaging and processing. Manufacturing accounted for about 8% of GDP in 2014. The Industrial 
Development Division of the M CILI is responsible for coordinating economic activities aimed at 
broadening the productive sector.  
4.50.   Under the Protected Industries Act of 1954, the authorities may issue an order limiting entry 
by new firms into industries whose development is deemed to b e in the public interest.32 The 
legislation permits the granting of orders to restrict imports that may affect particular industries. 
The authorities state that there is no such order currently in force.  
4.51.   In 2016, the average applied MFN tariff rate for the manufacturing sector (ISIC definition) 
was 9.1%, compared to an overall average MFN rate of 9.3% (Table 3.2). Various duty and tax 
concessions are available for the import of machinery, equipment and other capital goods 
(Section  3.3.1).  
4.3  Services  
4.3.1   Overview  
4.52.   Services continue to be the largest sector of the economy of Solomon Islands. During the 
review period, the share of services in GDP remained relatively stable and was 57% in 2014. Retail 
and wholesale trade remains the most important subsector, accounting  for 14.7% of GDP in 2014. 
Solomon Islands' GATS commitments have remained unchanged since its previous review.33  
4.3.2   Financial sector  
4.53.   The financial sector comprises commercial banks, non -bank financial institutions, and 
insurance companies. The contribution o f financial intermediation and insurance to GDP was 4. 8% 
in 2014. Between 2010 and 2015, the consolidated assets of the financial system increased more 
than twofold to near SI$8.2 billion in 2015 (Table 4.3). The banking subsector  remains dominant 
in the s ector.   
Table 4.3 Financial system assets, 2010 -15 
(SI$ million)  
 2010  2011  2012  2013  2014  2015  
Commercial banks  2,364.0  2,989.1  3,457.9  4,010.9  4,122.6  5,042.6  
Solomon Islands National Provident Fund  1,180. 7 1,324.9  1,555.4  2,467.1  2,683.7  2,826.3  
Insurance companies  110.7  120.3  117.5  124.4  126.0  115.0  
Credit Corporation (SI) Ltd 32.5 69.3 87.1 113.4  134.5  151.1  
Credit Unions  43.2 51.7 49.7 50.6 52.6 58.4 
Total  3,731.1  4,555.3  5,267.6  6,766.1  7,119.4  8,193.4 
Source:  CBSI (2015), Annual Report 2014 ; and CBSI (2016), Annual Report 2015.  
4.54.   Under the SINPF Act 1973, every employer is required to pay to the Solomon Islands 
National Provident Fund (SINPF) a sum equivalent to 12.5% of each employee's total gross salary 
each month. This contribution comprises a 5% deduction from a member's gross salary and a 
                                                
32 Section 3, Protected Industries Act, Chapter 177 of the Laws of Solomon Islands, 29  November  1954.  
33 More information on Solomon Islands' GATS commitments may be found in WTO document 
GATS/SC/117, 1 April 1996.  WT/TPR/S/3 49 • Solomon Islands  
 
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  7.5% contribution by the employer. The SINPF is a major source of investment and liquidity in the 
country.  
4.55.   Solomon Islands undertook financial services commitm ents under the GATS. It fully bound 
market access and national treatment with respect to banking, insurance, and other financial 
services delivered via cross -border supply and consumption abroad. Commercial presence is 
constrained by a horizontal limitatio n providing for the possibility of an economic needs test.  
4.3.2.1   Banking  
4.56.   In September 2013, the Central Bank of Solomon Islands granted an interim banking 
licence to Pan Oceanic Bank Limited, bringing the number of operating commercial banks to three 
(the other two being Bank South Pacific and the Australia and New Zealand Bank). Another player 
is expected to enter the market by the end of the year or early 2017.  The banking sector is 
relatively well capitalized, with both regulatory capital -to-risk weighted asse ts (total capital 
adequacy  ratio) and Tier 1 capital in excess of the minimum statutory requirement of 15% and 
7.5% respectively (Table 4.4).  
Table 4.4 Financial stability indicators, 2010 -15 
 2010  2011  2012  2013  2014  2015  
Tier 1 capital (%)  22.7 28.5 24.9 26.5 26.9 .. 
Total regulatory capital (%)  .. 30.9 33.2 32.4 31.6 .. 
Liquid asset ratio  47.7 55.9 59.0 57.2 54.6 .. 
Liquid assets to total assets  7 67.8 69.9 66.9 64.4 .. 
Non-performing loans        
 - in SI$ million  .. 67.4 44.7 101.4  79.2 .. 
 - in % of gross loans and advances  7.9 5.8 3.6 7.0 4.7 .. 
.. Not available.  
Source:  Information provided by the Central Bank of Solomon Islands.  
4.57.   The Central Bank of Solomon Islands is responsible for the supervi sion of banks, credit 
unions, and the Solomon Islands National Provident Fund. The Financial Institutions Act of 1998 
(FI Act) provides rules and regulations relating to, inter alia , ownership and licensing 
requirements; minimum capital requirements; restr ictions on business activities; and sanctions. 
There were no amendment s to the legislation during the review period.  
4.58.   Under the FI Act, the CBSI has the power to issue prudential standards for the regulation of 
the banking sector. During the review period, 9 prudential guidelines entered into force. They are 
related to capital adequacy requirements (2010); asset classification and provisioning (2010); 
foreign currency open positions (2010); external audit (2010); large credit exposures (2011); 
liquidity mana gement (2010); disclosure on interest rates, fees and charges (2013); and 
complaints management (2014).  
4.59.   During the review period, a new Central Bank of Solomon Islands Act was passed by the 
Parliament in 2012. The new legislation, inter alia , limits polit ical interference into CBSI 
institutional autonomy and clearly identifies and prioritizes its objectives (Section 1.2).  
4.60.   Foreign currency and security dealings are regulated under the Exchange Control Act of 
1976; the Exchange Control (Foreign Exchange) Re gulations; and the Exchange Control Policy. 
Exchange control approval is required for a company registered in Solomon Islands (or a local 
branch of an overseas incorporated company) to borrow funds from, pay interest, or repay a loan 
to a non -resident lend er. The Secured Transactions Law passed in 2008 broadened the range of 
assets that can be used as collateral to include movable assets such as boats, cars, and farm 
equipment. A filing office was established under the Ministry of Commerce, Industry , Labour  and 
Immigration, and an electronic registry was set up in 2009.34 According to a report by the Asian 
                                                
34 Solomon Islands Secured Transactions Filing Office: https://stfosi.com/ . WT/TPR/S/3 49 • Solomon Islands  
 
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  Development Bank, lending has expanded as a result of the reform, but banks are yet to take full 
advantage of the opportunity to take movable assets as col lateral.35 
4.61.   Solomon Islands participates in the Pacific Financial Inclusion Programme (PFIP), a Pacific -
wide programme aiming at helping low -income households gain access to quality and affordable 
financial services and financial education.36 The financial in clusion target was set at having 
70,000  new bank accounts opened by 2015, with at least 50% to be held by women and 50% by 
customers in rural areas. However, the numeric target was met ahead of time; thus the target  was 
subsequently revised to 160,000 new bank accounts to be created by 2017. By December  2015, 
this new target had already been achieved, although access by women and people from rural 
areas remain limited.  
4.62.   Solomon Islands still uses a manual method for settling interbank transfers.  Work is unde r 
way for the establishment of a national payments system. According to the authorities, a policy 
paper on the reform project is awaiting Cabinet endorsement.  
4.3.2.2   Credit unions  
4.63.   As at end -2015, there were 11 active credit unions with consolidated assets totalli ng 
SI$58.4 million and a base of 6,232 customers.37 The sector remains hampered by governance 
issues , as identified by the CBSI through its ongoing supervision and monitoring of the sector . The 
issues  include an inadequate policy framework and procedures to  manage risks, and the lack of 
prudent practices to manage fund s. 38 
4.64.   The Credit Union Act 1986 is the main legal framework for credit unions in Solomon Islands. 
Under the legislation, a group of fifteen or more persons may form a credit union if they have a  
common bond or interest. They are required to take up at least one share in the credit union, with 
a value of at least SI$2. The legislation provides for the establishment of a Registrar of Credit 
Unions. The legislation establishes the Solomon Islands Cr edit Union League as the representative 
body of credit unions, and subjects all credit unions to its supervision. Interest rates on loans 
made by credit unions are subject to a 1% monthly ceiling.  
4.65.   The Credit Union Act is under review, although the progres s is slow.39 A policy paper on the 
draft Credit Union Bill is being vetted by the Attorney -General, and is expected to be resubmitted 
to Cabinet for approval in the second quarter of 2016. In anticipation of the new Act, the CBSI has 
endorsed a new prudenti al guideline on credit union investments as part of good corporate 
governance. This guideline came into force on 1 March 2016.  
4.3.2.3   Insurance  
4.66.   As at end -December 2015, the insurance industry comprised four companies, four brokers 
and three insurance agencies.40 Between 2010 and 2015, the total asset s of insurance companies 
fluctuated around SI$120 million, although the consolidated assets of the financial system more 
than doubled to SI$8.2 billion ( Table 4. 3). In 2015, gross premiums declined by 35% to 
SI$47.2 million, owing mainly to high cancellations and non -renewals of policies. The ability to 
expand remains the main challenge for the industry.  
4.67.   Under the Insurance Act, the carrying on of any insurance business is subject to registration 
by the CBSI. The Minist er of Finance and Treasury may direct the CBSI not to register an applicant 
if it is deemed to be against the national interest. Foreign insurance firms may establish through a 
subsidiary or a branch.  Registration must be renewed annually. The legal framew ork does not 
differentiate between the types of services that foreign and domestic insurers can provide.  
                                                
35 Asian Development Bank (2014).  
36 The PFIP aims to add one million Pacific Islanders to the formal fi nancial sector by 2019 by 
spearheading policy and regulatory initiatives, facilitating access to appropriate financial services and delivery 
channels, and by strengthening financial competencies and consumer empowerment.  
37 CBSI (2016a).  
38 CBSI (2016a).  
39 CBSI (2016a).  
40 CBSI (2016a).  WT/TPR/S/3 49 • Solomon Islands  
 
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  4.68.   Under the legislation, any offshore insurance placement must be approved by the CBSI. In 
practice, offshore placements are for specialist and global co rporate insurance risks as well as 
aviation risks. In 2015, the CBSI introduced a directive specifying the minimum requirements that 
an insurance company should fulfil when taking up re -insurance policy cover offshore. These 
include withholding tax clearan ce from the revenue authorities, and evidence that the policy 
cannot be offered domestically.41  
4.69.   Minimum capital requirements did not change during the review period. Life insurance firms 
must have adequate assets to match their liabilities if they wish to provide other types of 
insurance.  
4.70.    Foreign reinsurance firms can offer services without establishing in Solomon Islands. 
However, consumption abroad and cross -border supply of insurance services is only permitted for 
services that have been explicitly "ex empted" by the Minister of Finance and Treasury. Exemptions 
can be granted for services that are not available in Solomon Islands or for "public interest" 
reasons.42  
4.71.   In July 2016, the CBSI announced that it was undertaking a comprehensive review of the 
insurance legislation, with the objective of bringing it up to date with global standards and 
practices.43  
4.3.3   Telecommunications  
4.72.   Access to telecommunication services remains limited in Solomon Islands, although there 
has been a significant growth in the mobile s egment owing to the liberalization of the market in 
2010 on the basis of the Telecommunications Act 2009 . As at end -2015, the mobile -cellular 
subscription rate was 73% (compared to 20% in 2010).44 Between 2010 and 2015, the use of the 
fixed-line network for  voice telephony declined by about 10% to 7,438 lines , while the number of 
mobile Internet subscribers increased eightfold to 66,664  subscribers. The sector is characterized 
by a de jure  monopoly in fixed telephony and a de facto  duopoly in mobile telephon y. Solomon 
Telekom Company Limited, the historic operator, provides fixed -line, mobile, and internet services. 
The Government holds a marginal stake (2.68% of shares) in Solomon Telekom. The National 
Provident Fund owns the remaining share, compared to 64. 7% at the time of the previous trade 
policy review. However, the Government appoints the board of the National Provident Fund, and 
has absolute discretion in terminating its appointment.  
4.73.   In 2009, Solomon Telekom Company Limited reached an agreement with t he Government 
to surrender its exclusive mobile telecommunications licen ce, which was not to expire until 2018.45 
This made possible the entry of Bemobile Limited in to the mobile market in 2010. As of 2015, 
Solomon Telekom and Bemobile held about 60% and 40 %, respectively, of the mobile market in 
terms of subscriptions. The legislation provided for a grace period to the duopoly.46 The authorities 
indicated that there is currently no opposition to the entry of another operator in to the market. 
There is no numb er portability.  There are three licensed firms providing Internet access.  
4.74.   The Ministry of Communication s, Aviation and Information Technology is responsible for 
policy -making in the telecommunications sector. Telecommunication services are regulated under  
the Telecommunications Act 2009.47 The legislation establishes the Telecommunications 
Commission of Solomon Islands (TCSI) as a regulatory authority. The TCSI  has been operational 
                                                
41 CBSI (2016a).  
42 Part III, Insurance Act.  
43 CBSI press release. Viewed at: http://www.cbsi.com.sb/press -release -insurance -legislation -review/ .  
44 Telecommunications Commission of Solomon Islands (2016) . 
45 Under the agreement, Solomon Telekom is to be compensated with an amount of about SI$109 
million over a period of five years, for the early loss of its exclusive rights and the obligation to con tinue 
operating its loss -making fixed lines.  
46 The legislation precluded: any further market entry before April 2011, any amendments to the 
numbering plan before September 2011, and any requirement of number portability before April 2012. A move 
by the reg ulator in 2011 to allow the entry of a third operator into the mobile market was challenged by the 
incumbents, and was ultimately withdrawn.  
47 Telecommunications Act No. 20 of 2009. Viewed at: http://www.parliament.gov.sb/files/legislation/ 
Acts/Telecommunications_Act%202009.pdf .  WT/TPR/S/3 49 • Solomon Islands  
 
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  since February 2010, and reports to the Parliament. Under the Act, the TCSI is to be funded 
primarily from licen ce fees and a levy of up to 2% of gross revenues on licensed 
telecommunications service providers. Nonetheless, until March 2015, the TCSI was funded mainly 
through grants under the Solomon Islands Telecommunications Tec hnical Assistance and ICT 
Development Project48, as the licensing fee revenue s were diverted to pay Solomon Telekom for 
the surrender of its exclusive licen ce.  
4.75.   Under the Telecommunications Act, a licen ce issued by the TCSI is required to provide 
telecommun ication services. The Commission may issue an individual or a class licen ce. Individual 
licences are issued for terms between 5 and 20 years. Applications for a service licen ce or the 
assignment of radio spectrum are subject to a SI$200 fee. Licensed servi ces providers are subject 
to an annual licen ce fee that is set at 2% of their gross revenue for a given financial year, the 
maximum allowed by the legislation. As at end -2015, there were a total of 21 licen ces, although 
only three licensees were active: So lomon Telekom, Bemobile -Vodafone, and Satsol Limited . 
4.76.   Services providers are free to negotiate interconnection agreements, access and other 
services. No approval is required from the TCSI. There is currently one interconnection agreement 
between the two mo bile operators. In accordance with the legislation, the Commission may 
regulate the price of services provided by a dominant provider. No operator is currently considered 
as a dominant provider.  
4.77.   The legislation  provides for the establishment of  a Universal  Access Plan , defined  as 
including  telephone service (whether fixed or mobile); emergency service; reasonable disaster 
relief services; and operator assistance service. A Universal Access Special Fund is to be 
established to help finance the plan. Sources of funding  for universal access  include  levies on 
providers (not to be levied before 31 August 2015); grants and donations; and annual fees for the 
use of certain radio spectrum. The fund is ring -fenced from general government funding, and is to 
be managed  by a Universal Access Advisory Committee.  The authorities indicated that universal 
access obligations are not being implemented yet.  
4.78.   A US$68 million submarine cable project involving an international cable landing in Honiara 
West and two domestic cables ( running from Honiara West to Noro and Aukiis) is under 
consideration by the Government. The project is to be implemented through a public –private 
partnership.  
4.79.   Solomon Islands is a member of the International Telecommunication Union ( ITU), the Asia -
Pacific  Telecommunity49 and the Pacific Island s Telecommunications Association (PITA).  
4.80.   Broadcasting activities are regulated under the Broadcasting Act 1976, the Television 
(Amendment) Act 1996, and the draft Solomon Islands Broadcasting Corporation Bill 2003. Th e 
legislation establishes the Solomon Islands Broadcasting Corporation (SIBC) as the regulator of 
broadcasting activities. Telekom Television Limited (a subsidiary of Solomon Telekom) and Satsol 
Limited are the two main commercial television broadcasters. A few other operators have been 
granted television broadcasting licen ces, but are yet to operate.50  
4.81.   The Television Act provides for the establishment of the Television Board and the licensing 
of television broadcasters, dealers and receivers. It also speci fies technical conditions and 
requirements with respect to broadcasting equipment and transmission, and standards and codes 
with respect to programmes and advertising.  
4.82.   Between 2010 and 2015, the Government implemented the Solomon Islands 
Telecommunications  Technical Assistance and ICT Development Project , with the goal of 
facilitating increased access to a wide variety of reliable and affordable telecommunications 
                                                
48 The Solomon Islands Telecommunications Technical Assistance and ICT Development Project is a 
project funded by the World Ba nk. It aims to facilitate increased access to a variety of reliable and affordable 
telecommunications services through efficient and well -regulated competition.  
49 Founded in 1979, the Asia -Pacific Telecommunity (APT) aims at fostering the development of 
telecommunication services and information infrastructure throughout the region with a particular focus on the 
expansion thereof in less developed areas.  
50 These include One News Limited and The Eternity Broadcasting Network.  WT/TPR/S/3 49 • Solomon Islands  
 
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  services for the majority of Solomon Islanders, through efficient and well -regulated competiti on. 
As part of the regulatory component of the project, a National Broadcasting Policy and National 
ICT Policy were launched in October 2013, setting out the Government's objectives in these areas 
and laying down the strategies to achieve them. The Nationa l Broadcasting Policy applies to radio 
and television broadcasting activities.51 Its objectives are, inter alia , to encourage the development 
and effective regulation of the broadcasting sector; to promote equality of access to broadcasting 
services; to sup port the creation of culturally relevant content; to create an environment that is 
conducive to competition and investment, including in new broadcasting technologies; and to 
ensure efficient management of the radiofrequency spectrum. The Television Act is  being reviewed 
to allow competition in the market.  
4.83.   Postal services are regulated under the Solomon Islands Postal Corporation Act 1996. The 
Solomon Islands Postal Corporation has  the exclusive right to convey standard letters and issue 
postage stamps.  
4.3.4   Transport  
4.84.   Transport and storage account ed for about 5 .2% of GDP in 2014. Under the GATS, Solomon 
Islands has no specific commitments in the transport sector.  
4.85.   The objective of the Government in the transport sector is to provide an integrated, efficient 
and affordable infrastructure and transport system. The National Transport Plan 2011 -2030 sets 
out a strategic and policy framework for achieving this objective.52 Policies and investment 
priorities are implemented through three -year sector action plans.   
4.86.   The t ransport sector depends heavily on external aid. In the period 2011 -2014, about 80% 
of the sector's SI$1 billion in funding was from external aid. In 2010, the Government established 
the National Transport Fund with a view to providing ring -fenced funding for transport 
infrastructure maintenance and development.53 Funds are to be provided by the Government, 
donors and development agencies. The Fund is managed by a board comprising representatives of 
government agencies and development partners.  
4.3.4.1   Maritime tra nsport and ports  
4.87.   Maritime transport is vital to Solomon Islands, as the country's land area of 20,000 km2 is 
spread across six large islands, dozens of smaller islands, and hundreds of islets and atolls. The 
country has three international ports (at Honiar a, Noro, and Yandina), about 86 small wharves and 
jetties, and 26 anchorages.  
4.88.   One key reform during the review period was the establishment in 2010 of the Solomon 
Islands Maritime Safety Administration (SIMSA) as the regulatory authority in the maritime s ector. 
SIMSA has the authority to regulate franchise shipping schemes  (see below) , manage maritime 
infrastructure, and implement maritime conventions and agreements. The Government adopted a 
set of new regulations to be administered by SIMSA. These include  the Shipping (Registration) 
Regulations and the Shipping (Navigation Aids) Regulations. Other regulations are under 
preparation to implement the International Convention on Standards of Training, Certification and 
Watchkeeping for Seafarers  (STCW). Follow ing the re form, the Ministry of Infrastructure and 
Development ( MID) retains the responsibility over infrastructure management and service 
provision.  
4.89.   Another notable reform during the review period was the introduction of a franchise 
shipping scheme. Launc hed in 2010 under the Domestic Maritime Support Project, the franchise 
shipping scheme award s franchises for the provision of shipping services to remote areas that are 
considered not commercially viable. Under the scheme, the Government provides subsidies  to 
private sector operators to run safe and regular services to these areas. Franchised routes are 
selected based on several criteria including: the distance from the capital city; confirmation by 
stakeholders that the route is socially and economically d esirable; and the route possessing a 
                                                
51 Ministry of Communications, Av iation and Information Technology (2015).  
52 Ministry of Infrastructure and Development (2010).  
53 National Transport Fund Act 2009.  WT/TPR/S/3 49 • Solomon Islands  
 
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  history of subsidized calls. On the franchised routes, operators are required to provide a specific 
number of voyages during the contract period (generally between one and two voyages per 
month). There are currently 8 s hipping routes under the programme. The programme was initially 
funded by donors, and the Government is to take over the funding of the programme, starting  in 
mid-2016. Subsidies are to be reduced gradually to zero over a period of five to ten years. An 
assessment of the scheme is under way.  
4.90.   The Solomon Islands Port Authority (SIPA), a statutory body under the MID, owns and 
operates the ports of Honiara and Noro.54 Although private participation in port operation is 
permitted under legislation, the SIPA curr ently provides all port, stevedoring, and international 
cargo handling services at these ports. The SIPA is also responsible for setting charges at these 
ports. The applicable rates are specified in the Levy of Rates and Dues (Ports of Honiara and Noro) 
Rules; rates on overseas ships are generally higher than on local ships. Vessels qualify as local if 
they are licensed in Solomon Islands and are "employed in voyages involving calling at ports in 
Solomon  Islands". In 2015, SIPA implemented two successive po rt fees increase s (in June and in 
September) as part of a reform aiming at improving the infrastructure and increasing the labour  
force. The first adjustment was a broad -based 6% increase and was implemented in June. The 
second adjustment that took place i n September 2015 raised ports charges by an estimated 
average of 300% according to a report by the Asian Development Bank.55 The report, which is a 
comparative study on ports pricing in the Pacific region, has concluded that ports operations in 
Solomon Isla nds are of significantly higher costs and lower productivity; it suggests that these 
have resulted in higher import and export prices, and caused shipping lines to reduce their traffic 
through the ports.   
4.91.   There is no statutory limitation to the number of s cheduled or non -scheduled international 
maritime transport service providers. Foreign companies providing international maritime transport 
services in Solomon Islands are not required to establish locally. There are no institutional 
arrangements for cargo allocation.  
4.92.   Passenger cabotage is reserved for domestic flag vessels.56 Under the Shipping Act 1998, 
domestic flag vessels must be wholly owned by Solomon Islands citizens or corporations with their 
principal place of business in Solomon Islands. Although t here are no statutory restrictions on the 
provision of cargo cabotage by foreign flag vessels, in practice only domestic flag vessels are 
allowed to provide this service.  
4.93.   The crew on domestic flag vessels must not include foreign citizens.57 Under the Shipp ing 
Act 1998, the MID can waive this prohibition for up to six months if duly certified Solomon Island 
citizens are unavailable.  
4.3.4.2   Air transport and airports  
4.94.   The challenges faced by Solomon Islands in the aviation sector are similar to those of many 
small is land developing nations, including a limited economic capacity to fund aviation 
infrastructure, and a limited capacity to develop and manage regulatory systems.  
4.95.   Air transport is under the responsibility of the Ministry of Communications, Aviation and 
Information Technology . The Civil Aviation Act 200858 is the main law governing the air transport 
sector. It established the Civil Aviation Authority of Solomon Islands (CAASI) to regulate safety, 
security and personnel licensing in the aviation sector. CAASI b ecame operational in 2009. The 
Ministry of Communications, Aviation and Information Technology  retains responsibility over the 
operation and maintenance of airfields. There has been no change to the legislation since 2009.  
4.96.   The air transport infrastructure includes one international airport (Henderson International 
Airport) at Honiara, and seven other airports, all owned by the Government. About 20 other 
                                                
54 Sections 9(1) and 11, Ports Act, Chapter 161 of the Laws of Solomon Islands, 4 June 1956.  
55 Asian Development Bank (2016b) .  
56 Section 10(2), Shipping Act 1998.  
57 Section 50, Shipping Act 1998.  
58 Civil Aviation (Amendment) Act 2009. Viewed at: http://www.parliament. gov.sb/files/legislation/Acts/ 
Civil_Aviation_(Amendment)_Act%202009.pdf .  WT/TPR/S/3 49 • Solomon Islands  
 
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  airfields are in community or customary ownership. In addition to Solomon Airlines, the national 
carrier,  four other airlines are currently operating scheduled and unscheduled services from and to 
Solomon Islands: Virgin Australia, Air Niugini, Air Calédonie International, and Fiji Airlines. 
Solomon Airlines Limited is 100% government -owned. It is engaged in both domestic and 
international air transport, including cargo and charter operations. Its domestic network comprises 
24 destinations. Since July 2016, Solomon Airlines Limited has been  operating a codeshare service 
with Air Niugini and Air Vanuatu, linkin g Honiara, Port Moresby and Port Vila.  
4.97.   Terminal services are provided by private companies, under contract to the Ministry of 
Communications, Aviation and Information Technology . Air traffic services and air navigation 
systems are operated by the Ministry of Communications, Aviation and Information Technology . 
Ground -handling for scheduled passenger services is provided by Solomon Airlines. Since 2013, 
the management of upper airspace use is carried out by Airport Fiji Limited.59 
4.98.   Airports and airfields asset s are owned by the Government through the Solomon Islands 
Airports Corporation Limited (SI Airport Corporation). Solomon Islands undertook a reform of the 
aviation sector during the review period. In line with the National Transport Plan 2011 -2030, the 
Government is seeking to delegate the management and operation of airports and airfields under a 
long-term commercial concession arrangement with a private party.60 The concession holder is 
expected to manage and operate airport activities at all of the govern ment-owned airfields, and 
administer air service arrangements at the privately and community -owned airfields.  
4.99.   An aviation special fund was established in 2005, for the purpose of operating, developing, 
and maintaining aviation infrastructure and facilitie s. The revenues for the fund are primarily from 
air navigation fees. Other revenue sources include fees and charges for the use of aerodromes, air 
traffic services, and other aviation services.  
4.100.   Solomon Islands signed the Pacific Islands Air Services Agreem ent (PIASA) in 2005, a 
multilateral air services treaty that seeks gradual movement from bilateral air services agreements 
to a liberalized regional air services agreement. The agreement came into force in October 2007. 
However, Solomon Islands is yet to r atify it. Solomon Islands is also a member of the Pacific 
Islands Aviation Safety Office which was established in June 2005. The agency provides oversight 
on aviation and safety in the Pacific Islands using guidelines provided by the International Civil 
Aviation Organi zation (ICAO).  Solomon Islands has bilateral air services agreements with 
Australia, Fiji, Nauru, New Zealand, Papua New Guinea, and Vanuatu.61 
4.101.   A tax of SI$100 is levied on passengers (12 years and older) departing from Solomon 
Islands. The tax  is collected by the CAASI.  
4.3.5   Tourism  
4.102.   Travel and tourism's contribution (including indirect and induced contributions) to the 
economy of Solomon Islands was estimated at about 10.7% of GDP in 2014, according to 
estimates from the World Travel and Tourism Cou ncil.62 Solomon Islands is known for its high level 
of biodiversity. Other major tourist attractions include ships and plane wrecks from World War II. 
Tourists are mainly from Australia and the South Pacific Region. According to the authorities, the 
number of visitor arrivals neared 25,000 in 2015. Holidays and business are the most frequent 
purposes of visits. The average length of stay was estimated at 15.3 nights in 2013.63 
4.103.   The sector has potential in terms of future employment and growth and there seems t o be 
high-level policy  recognition  of its place  in national  sustainable  development. However, it remains 
hindered by several constraints, including limited air service s; an unskilled workforce; inadequate 
infrastructure; and limited access to capital.  
                                                
59 Until 2013, the management of Solomon Islands' upper airspace was carried out by Air Service 
Australia.  
60 Ministry of Communication and Aviation (2012).  
61 WTO (2009) . 
62 WTTC (201 5). 
63 South Pacific Tourism Organisation (2014) . WT/TPR/S/3 49 • Solomon Islands  
 
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  4.104.   The Solomon Islands Visitors Bureau Act 1996 is the main piece of legislation regulating 
the sector. The l aw establishes the Solomon Islands Visitors Bureau as the regulatory body. It 
issues licen ces for tourist facilities. The Bureau is funded by a 10% bed l evy collected by hotels.  
4.105.   In June 2015, the Government adopted the National Tourism Development Strategy 2015 -
2019, with the goal of developing the country into a unique tourist destination within a five -year 
timeframe. The strategy identifies actions in five key components: transport and infrastructure 
development; marketing and research; product development and investment; human resources 
and capacity development; and cruise ships and yacht s.  
4.106.   A departure tax of SI$100 per passenger (12 years and older) is  collected by the CAASI for 
outbound international flights  (Section 4.3.4.2) .  
4.107.   Incentives for tourist -related projects include: a five -year tax exemption on profits and 
income (subject to a minimum bedroom number requirement of 300 for hotels and 50 for to urist 
resorts); a 50% capital depreciation; and a 150% tax deduction for expenses incurred in overseas 
promotion. Imports for tourism development may be eligible for duty  exemption.  
4.3.6   Professional services  
4.108.   Solomon Islands has GATS commitments with respect to  legal, accounting, auditing, 
architectural, and engineering services.  
4.109.   In general, foreign professionals are required to obtain a work permit and a residency 
permit prior to providing any professional service in Solomon Islands. Work permits are issued by  
the Commissioner of Labour (from the Ministry of Commerce, Industry , Labour, and Immigration). 
A work permit may be approved if there is evidence that there is no trained local to fill the position 
and provisions are made to train a local to eventually fi ll the position. Work permits are granted for 
a maximum period of two years, are specific to an employer, and are not transferable to another 
employment. Residency permits are granted by the Director of Immigration. They are subject to a 
SI$250 application  fee, a SI$1,200 approval fee and a SI$210 multiple entry fee. They are valid 
for renewable periods of two  years.64 
4.110.    The legal profession is regulated under the Legal Practitioners Act of 1987 and associate d 
regulations.65 To practice before a court, lawyers  must obtain a "certificate of qualification" issued 
by the Chief Justice. The legislation does not establish any nationality requirements for legal 
practitioners. Under the Legal Practitioners (Admission) Rules 1996, any person who is entitled to 
practice  as a barrister, solicitor or legal practitioner in any commonwealth country with at least 
five years of practice may apply for admission as a legal practitioner in Solomon Islands.66 
Admissions are obtained by way of petition to the High Court. The Solomon  Islands Bar Association 
represents lawyers as a profession.  
4.111.   The notarial profession is regulated by the Notaries Public Act. Public notaries must be 
appointed by the Chief Justice.67 The legislation does not establish any nationality requirements for 
public notaries.  
                                                
64 Ministry of Commerce, Industry, Labour, and Immigration online information, "Residing in Solomon 
Islands". Viewed at: http://www.commerce.gov.sb/Divisions/Immigration/Residing_in_SI.htm . 
65 These include the Legal Practitioners (Professional Conduct) Rules 1995; and the Legal Practitioners 
(Admission) Rules 1996.  
66 The Legal Practitioners (Admission) Rules 1996.  
67 Section 2, Notaries Public Act, Chapter 22 of the Laws of Solomon Islands, 15 June 1965.  WT/TPR/S/3 49 • Solomon Islands  
 
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  4.112.   The accountancy profession is regulated under the Accountants Act of 2010.68 Under the 
legislation, the practice of accountancy is subject to registration. The Act re -establishes the 
Institute of Solomon Islands Accountants with the mandate, inter alia , to regulate the practice of 
accountancy, and to establish and enforce accounting and auditing standards. All accountants are 
required to be member of the Institute.  
4.113.   Professional services are subject to a 10% sales tax.  
                                                
68 Accountants Act 2010. Viewed at: http://www.parliament.gov.sb/files/legi slation/Acts/2010/ 
Accountants%20Act%202010.pdf .  WT/TPR/S/3 49 • Solomon Islands  
 
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Pacific Island Economies.  Viewed at: http://www.adb .org/sites/default/files/publication/42904/ 
unlocking -finance -growth -pacific -island -economies.pdf . 
Asian Development Bank (2015), Finding Balance 2014: Benchmarking the Performance of State -
Owned Enterprises in Island Countries . 
Asian Development Bank (20 16a), Basic 2016 Statistics.  Viewed at: http://www.adb.org/sites/ 
default/files/publication/183338/basic -statistics -2016.pdf . 
Asian Development Bank (201 6b), Regional Ports Pricing and Productivity Comparative Study , 
Project Number: TA -8378 REG: Private Sector Development Initiative Phase III. Viewed at: 
http://www.adbpsd i.org/2016/06/comparative -study -on-pacific -ports.html . 
CBSI (2014), 2013 CBSI Annual Report , Honiara. Viewed at: http://www.cbsi.com.sb/fileadmin/ 
publications/ar/AR -2013.pdf . 
CBSI (2015), Annual Report 2014, Honiara. Viewed at: http://www.cbsi.com.sb/fileadmin/ 
publications/ar/AR -2014.pdf . 
CBSI (2016 a), Annual Report 2015 , Honiara. Viewed at: http://www.cbsi.com.sb/wp -content/ 
uploads/2016/06/AR -2015.pdf . 
CBSI (2016 b), Quarterly Review , December 2015 , Honiara. Viewed at: http://www.cbsi.com.sb/ 
wp-content/ uploads/2016/06/QR -DEC2015.pdf . 
Curtain , Richard (2013), Review and Analysis of the Demand for Skills in the Solomon Islands 
Labor Market . Viewed at: https://dfat.gov.au/about -us/publications/Documents/review -analysis -
demand -skills-solomon -islands -labour -market.pdf  [04.08.2016].  
FAO (2015), Global Forest Resource A ssessment 2015 , Rome. Viewed at: http://www.fao.org/3/a -
i4808e.pdf . 
Government of Solomon Islands (2014), Rapid Assessment of the Macro and Sectoral Impacts of 
Flash Floods in the Solomon Islands, April 201 4, July. Viewed at: http://www.drrinacp.org/sites/ 
drrinacp.org/files/publication/Solomon%20RAI%20Flood%20Report%20Oct%202014.pdf . 
IMF (2016), Solomon Islands:  2016 Article IV Consultation – Staff Report,  Country Report 
No. 16/90. Viewed at: https://www.imf.org/external/pubs/ft/scr/2016/cr1690.pdf . 
ITC (2013),  Solomon Islands – Coconut  Sector Strategy . 
Ministry of Agriculture and Livestock (2009 ), National Agriculture and Livestock Sector Policy, 
2009-2014,  November , Honiara . Viewed at: http://pafpnet.spc.int/pafpnet/attachments/article/ 
solomon -islands/National -Agriculture -and-Livestock -Sector -Policy.pdf . 
Ministry of Agriculture and Livestock (2014), Solomon Islands Agricult ure and Livestock Policy 
2015–2019,  Final Draft. Viewed at: http://pafpnet.spc.int/images/articles/policy -bank/solomon/ 
Solomons -Islands -NALSP_Final%20Draft_151118.pdf . 
Ministry of Communication and Aviation (2012), Information Memorandum relating to Private 
Sector Operation and Management of Solomon Islands Airports and Airfields , Solomon Islands 
Government, 6 August. Viewed at: http://www.mof.gov.sb/Libraries/Reform_Agenda_Reports/ 
Expression_of_Interest_Memorandum1.sflb.ashx . 
Ministry of Communications, Aviation and  Information Technology (2015), National Broadcasting 
Policy , Honiara.  WT/TPR/S/3 49 • Solomon Islands  
 
- 59 - 
 
  Ministry of Foreign Affairs and External Trade (2015), Solomon Islands Trade Policy Framework , 
Honiara . 
Ministry of Infrastructure and Development (2010 ), National Transport Plan 2011 –2030. Viewed 
at: http://www.adb.org/sites/default/files/linked -documents/41171 -02-sol-oth-09.pdf . 
Ministry of Land s, Housing and Survey (2016), Annual Report 201 5, Honiara . 
National Parliament of Solomon Islands (2007), Report on Subsidiary Legislation,  National 
Parliament Paper No. 25 of 2007,  22 February , Honiara . 
Pacific Islands Forum Fisheries Agency (FFA)  (2015), An Assessment of Global Sourcing and 
Fisheries  Aspects of the Interim Economic Partnership Agreement for the Solomon Islands.  
Solomon Islands Electricity Authority ( SIEA) (2016) , Annual Report 2015 . Viewed at: 
http://solomonpower.com.sb/sites/default/files/ Reports/2015%20AR.pdf . 
Solomon Islands National Statistics Office (2015), Solomon Islands Poverty Profile based on the 
2012/13 Household Income and Expenditure Survey, December. Viewed at: 
http://www.statistics.gov.sb/images/SolomonFiles/Social -and-Demography -Statistics/ SI_ Report_ 
on_Poverty_2012 -13_HIES_FINAL/Solomon_Islands_Report_on_Poverty_2012 -13_HIES_ 
FINAL.pdf . 
South  Pacific Tourism Organi sation (2014), Solomon Islands Tourist Survey, February.  
Telecommunications Commission  of Solomon Islands (2016), Annual Repor t 2015.  
UNCTAD (2015), World Investment Report 2015 – Reforming International Investment 
Governance . Viewed at: http://unctad.org/en/PublicationsLibrary/wir2015_en.pdf . 
Winters , L. Ala n, and Martins, Pedro M.G. (2004), Beautiful But Costly: Business Costs In Small 
Remote Economie s. 
World Bank (2014), Solomon  Islands  – Tina River Hydropower  Development  Project , World Bank 
Group, Washington DC. Viewed at: http://documents.worldbank.org/curated/en/2014/11/ 
23076144/solomon -islands -tina-river-hydropower -development -project . 
WTO (2009), Trade Policy Review – Solomon Islands, Geneva . 
WTTC (2015), Travel & Tourism Economic Impact 2015 – Solomon Islands . Viewed at: 
https://www.wttc.org/ -/media/files/reports/economic%20impact%20research/countries%202015/ 
solomonislands2015.pdf  [20.03.16] . 
Young , David , and Pelomo, Moses (2014) , Solomon  Islands  Coconut  Value  Chain  Analysis , World 
Bank Group, Washington DC. Viewed at: http://documents.worldbank.org/curated/en/2014/ 
01/19253715/solomon -islands -coconut -value -chain -analysis .  
 WT/TPR/S/3 49 • Solomon Islands  
 
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  5  APPENDIX TABLES  
Table A1. 1 Merchandise exports by product group, 2010 -15 
Products  2010  2011  2012  2013  2014  2015  
Total ( SI$ million)  1,804.4  3,173.5  3,677.0  3,272.1  3,354.4  3,326.2  
Total (US$ million)  223.7  415.3  499.9  448.1  454.8  420.3  
 % of total  
Copra and coconut oil  5.4 7.3 3.5 1.7 3.0 2.9 
Fish 10.9 10.7 11.5 13.8 13.7 11.5 
Logs 55.7 45.9 43.8 47.4 58.3 68.0 
Cocoa  6.6 3.8 1.8 2.1 3.0 2.7 
Timber  2.6 2.3 2.2 2.2 1.9 2.5 
Palm oil and kernels  14.2 10.3 8.4 6.4 7.1 6.3 
Minerals  1.4 16.3 23.3 19.1 6.3 1.3 
Other  1.4 1.1 2.6 4.5 0.7 1.5 
Re-exports and coverage adjustments  1.7 2.2 2.9 2.9 6.1 3.4 
Memorandum item         
Total, in US$ million ( source: UN Comtrade ) 215.4  417.4  466.3  489.2  458.5  400.4  
Source:  Central Bank of Solomon Islands online information.  WT/TPR/S/3 49 • Solomon Islands  
 
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  Table A1 .2 Merchandise imports by product group, 2010 -15 
HS section  2010  2011  2012  2013  2014  2015  
Total ( SI$ million)  3,260.9  3,562.8  3,580.2  3,802.3  3,802.6  3,779.9  
Total (US$ million)  404.3  466.3  486.8  520.7  515.6  477.6  
 % of total  
Food and live animals  21.8 20.3 21.8 22.8 24.5 23.3 
Beverages and tobacco  1.4 1.8 2.1 1.8 2.0 1.5 
Crude material excluding fuels  0.6 1.3 0.4 0.3 1.4 0.9 
Mineral fuels  15.7 23.1 26.4 26.5 22.9 20.1 
Animal, vegetable oils and fats  0.5 0.7 0.5 0.5 0.5 0.6 
Chemicals  6.2 10.3 8.4 7.9 6.3 5.5 
Basic manufactures  16.0 18.1 14.9 14.4 15.9 15.7 
Machinery and transport equipment  39.8 27.1 25.7 27.3 29.3 33.8 
Other  9.0 8.1 10.2 8.3 7.1 9.2 
Re-imports and coverage adjustment  1.2 1.5 1.8 2.2 2.2 1.5 
Freights and insurance  -12.2 -12.2 -12.1 -12.1 -12.1 -12.2 
Memorandum item        
Total, in US$ million ( source: UN Comtrade ) 327.9  466.1  493.4  580.2  499.6  465.8  
Source:  Central Bank of Solomon Islands online information.  WT/TPR/S/3 49 • Solomon Islands  
 
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  Table A1. 3 Merchandise exports by destination, 20 10-15 
(US$ million and %)  
  2010  2011  2012  2013  2014  2015  
Total exports (US$ million)   215.4   417.4   466.3   489.2   458.5   400.4  
 % of total  
Americas  0.4  0.1  0.6  1.9  2.5  0.3  
 United States  0.4  0.1  0.6  1.9  2.5  0.2  
 Other America  0.0  0.0  0.0  0.0  0.0  0.0  
Europe  17.8  15.9  13.5  13.4  13.5  15.7  
 EU-28 17.8  15.8  13.5  12.9  13.4  14.7  
   United Kingdom  7.4  3.5  8.6  6.1  6.3  7.4  
   Italy 3.1  4.6  3.7  6.3  5.9  6.9  
   Spain  6.9  2.5  1.1  0.3  1.0  0.3  
 EFTA 0.0  0.0  0.0  0.5  0.1  1.0  
   Switzerland  0.0  0.0  0.0  0.5  0.1  1.0  
 Other Europe  0.0  0.0  0.0  0.0  0.0  0.0  
Commonwealth of Independent States (CIS)  0.0  0.0  0.0  0.0  0.0  0.0  
Africa  0.0  0.0  0.0  0.1  0.0  0.0  
Middle East  0.0  0.0  0.0  0.0  0.0  0.0  
Asia 81.8  84.0  85.9  84.6  83.9  84.0  
 China  49.1  46.3  38.6  44.8  57.5  58.0  
 Japan  0.6  0.2  0.7  0.3  0.9  1.7  
 Other Asia  32.2  37.5  46.6  39.6  25.5  24.3  
   India 0.0  1.3  1.4  0.4  0.0  7.2  
   Philippines  8.2  6.2  6.3  3.0  2.8  4.1  
   Malaysia  0.9  1.9  1.0  1.6  2.6  3.2  
   Chinese Taipei  0.0  0.4  0.6  2.7  1.2  1.4  
   Australia  4.0  16.2  25.2  22.6  10.6  1.4  
   Hong Kong, China  0.7  0.2  0.5  1.7  0.6  1.3  
   Korea, Repu blic of  2.5  1.1  1.3  1.0  1.1  1.1  
   Thailand  6.0  5.6  5.4  3.4  2.2  1.0  
   New Zealand  0.6  0.5  0.9  1.1  0.6  0.8  
   Viet Nam  0.2  0.4  0.2  0.3  0.3  0.6  
   Indonesia  2.9  1.9  0.5  0.3  0.6  0.6  
   Fiji 0.5  0.3  0.4  0.3  0.5  0.6  
   Vanuatu  0.1  0.2  1.3  0.3  0.2  0.2  
   Bangladesh  0.0  0.0  0.0  0.0  0.2  0.2  
   Papua New Guinea  2.4  0.1  0.6  0.5  1.4  0.2  
   Nauru  0.1  0.0  0.1  0.0  0.1  0.1  
Memorandum item        
Total, in US$ million (source: CBSI)  223.7  415.3  499.9  448.1 454.8  420.3  
Source:  UNSD, Comtrade database.  WT/TPR/S/3 49 • Solomon Islands  
 
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  Table A1. 4 Merchandise imports by origin, 20 10-15 
(US$ million and %)  
  2010  2011  2012  2013  2014  2015  
Total imports (US$ million)  327.9  466.1  493.4  580.2  499.6  465.8  
 % of tot al 
Americas  1.3  2.0  1.8  2.1  1.4  1.3  
 United States  1.2  1.9  1.7  2.0  1.4  1.2  
 Other America  0.1  0.1  0.1  0.1  0.1  0.1  
Europe  1.0  3.0  0.9  1.8  1.1  1.8  
 EU-28 0.8  2.6  0.9  1.5  1.1  1.7  
   Netherlands  0.1  0.1  0.1  0.3  0.2  0.4  
   United Kingdom  0.3  0.5  0.1  0.3  0.2  0.4  
   Germany  0.2  1.4  0.2  0.1  0.3  0.3  
   Italy 0.1  0.1  0.1  0.1  0.1  0.2  
   Denmark  0.1  0.1  0.1  0.3  0.1  0.1  
 EFTA 0.2  0.4  0.0  0.3  0.0  0.0  
 Other Europe  0.0  0.0  0.0  0.0  0.0  0.0  
Commonwealth of Independent States (CIS)  0.0  0.0  0.2  0.1  0.1  0.0  
Africa  0.1  0.1  0.0  0.2  0.0  0.1  
Middle East  0.0  0.1  0.1  0.1  0.1  0.1  
Asia 97.6  94.7  97.0  95.7  97.3  96.8  
 China  12.9  10.8  8.5  8.3  12.0  10.5  
 Japan  2.2  3.4  4.7  5.0  3.9  7.1  
 Other Asia  82.5  80.5  83.8  82.4  81.4  79.1  
   Australia  32.4  32.0  31.8  27.4  27.6  28.9  
   Singapore  24.1  21.0  28.2  31.1  24.2  17.1  
   Malaysia  5.3  6.6  5.6  7.6  8.4  10.7  
   New Zealand  5.9  5.9  5.1  4.4  6.1  4.8  
   Indonesia  1.4  2.7  2.3  2.3  4.4  4.2  
   Papua New Guinea  4.5  4.1  3.2  2.7  2.7  2.8  
   Fiji 2.0  1.8  2.1  2.3  2.7  2.3  
   Hong Kong, China  0.6  1.0  1.2  1.1  1.5  2.0  
   Thailand  1.9  1.8  1.6  1.4  1.2  1.9  
   India 0.7  1.1  0.5  0.4  0.6  1.3  
   Viet Nam  1.5  0.5  0.1  0.1  0.2  1.2  
   Korea, Republic of  0.4  0.1  0.4  0.1  0.5  0.8  
   Chinese Taipei  0.4  0.9  1.0  0.6  0.4  0.4  
   Vanuatu  0.4  0.2  0.2  0.2  0.3  0.3  
   Philippines  1.0  0.3  0.5  0.4  0.5  0.3  
Other  0.0  0.0  0.0  0.0  0.0  0.0  
Memorandum item        
Total, in US$ million (source: CBSI)  404.3  466.3  486.8  520.7  515.6  477.6  
Source:  UNSD, Comtrade database.  
 
 
 
 
__________