WT/TPR/S/378/Rev.1  
30 January 2019  
(19-0490) Page: 1/83 
Trade Policy Review Body   
 
TRADE POLICY REVIEW  
REPORT BY THE SECRET ARIAT  
VANUATU  
Revision  
This report, prepared for the first Trade Policy Review of Vanuatu, 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 Vanuatu on its trade policies and pra ctices.  
 
Any technical questions arising from this report may be addressed to Mr Masahiro Hayafuji 
(tel.: 022 739 5873); Mr Arne Klau (tel.: 022 739 5706); a nd Ms Zheng Wang (tel.:  022 739 5288).  
 
Document WT/TPR/G/378 contains the policy statement submitt ed by Vanuatu.  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Note: This report was drafted in English.   WT/TPR/S/378 /Rev.1  • Vanuatu  
 
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  CONTENTS  
SUMMARY  ................................ ................................ ................................ ........................  7 
1   ECONOMIC ENVIRON MENT  ................................ ................................ ........................  11 
1.1   Main Features of the Economy  ................................ ................................ ..................... 11 
1.2   Recent Economic Developments  ................................ ................................ ................... 12 
1.3   Developments in Trade and Investment  ................................ ................................ ........ 15 
1.3.1    Trends and patterns in merchandise and services trade  ................................ ................ 15 
1.3.2    Trends and patterns in FDI  ................................ ................................ ....................... 17 
2   TRADE AND INVEST MENT REGIMES ................................ ................................ ...........  19 
2.1   General Framework  ................................ ................................ ................................ ....19 
2.2   Trade Policy Formulation and Objectives  ................................ ................................ ........ 20 
2.3   Trade Agreements and Arrangements  ................................ ................................ ........... 21 
2.3.1    WTO ................................ ................................ ................................ ...................... 21 
2.3.2    Regional and preferential agreements  ................................ ................................ ........ 22 
2.3.2.1    Regional trade agreements (reciprocal)  ................................ ................................ ...22 
2.3.2.1.1    MSG Trade Agreement  ................................ ................................ ........................ 23 
2.3.2.1.2    PICTA  ................................ ................................ ................................ ............... 23 
2.3.2.1.3    PACER and PACER Plus  ................................ ................................ ....................... 24 
2.3.3    Other agreements and arrangements  ................................ ................................ ......... 24 
2.4   Investment Regime  ................................ ................................ ................................ ....25 
2.4.1    Business licence  ................................ ................................ ................................ ......25 
2.4.2    Foreign direct investment (FDI)  ................................ ................................ ................. 26 
3   TRADE POLICIES A ND PRACTICES BY MEAS URE ................................ ........................  31 
3.1   Measures Directly Affecting Imports  ................................ ................................ .............. 31 
3.1.1    Customs proc edures, valuation, and requirements  ................................ ....................... 31 
3.1.2    Rules of origin  ................................ ................................ ................................ ......... 32 
3.1.3    Tariffs  ................................ ................................ ................................ .................... 32 
3.1.3.1    Applied MFN tariffs  ................................ ................................ ................................ 32 
3.1.3.2    Tariff bindings  ................................ ................................ ................................ ......35 
3.1.3.3    Preferential tariffs  ................................ ................................ ................................ .35 
3.1.3.4    Tariff exemptions and concessions  ................................ ................................ .......... 35 
3.1.4    Other charges affecting imports  ................................ ................................ ................. 35 
3.1.5    Import prohibitions, restrictions, and licensing  ................................ ............................ 36 
3.1.6    Anti-dumping, countervailing, and safeguard measures  ................................ ................ 37 
3.2   Measures Directly Affecting Exports  ................................ ................................ .............. 37 
3.2.1    Customs procedures and requirements  ................................ ................................ .......37 
3.2.2    Taxes, charges, and levies  ................................ ................................ ........................ 38 
3.2.3    Export prohibitions, restrictions, and licensing  ................................ ............................. 38 
3.2.4    Export support and promotion  ................................ ................................ ................... 38 
3.2.5    Export finance, insurance, and guarantees  ................................ ................................ ..39 WT/TPR/S/378 /Rev.1  • Vanuatu  
 
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  3.3   Measures Affecting Production and Trade  ................................ ................................ .......39 
3.3.1    Incentives  ................................ ................................ ................................ ............... 39 
3.3.2    Standards and other technical requirements  ................................ ............................... 39 
3.3.3    Sanitary and phytosanitary requirements  ................................ ................................ ....40 
3.3.4    Competition policy and price controls  ................................ ................................ ......... 41 
3.3.4.1    Competition policy  ................................ ................................ ................................ 41 
3.3.4.2    Consumer protection legislation  ................................ ................................ .............. 43 
3.3.4.3    Price controls ................................ ................................ ................................ ........ 43 
3.3.5    State trading, state -owned enterprises, and privatization  ................................ ............. 44 
3.3.5.1    State trading arrangements  ................................ ................................ ................... 44 
3.3.5.2    State -owned enterprises (SOEs) and priva tization  ................................ ..................... 44 
3.3.6    Government procurement  ................................ ................................ ......................... 45 
3.3.7    Intellectual property rights  ................................ ................................ ........................ 46 
3.3.7.1    Legislative and institutional framework  ................................ ................................ ....46 
3.3.7.2    Industrial property rights  ................................ ................................ ....................... 47 
3.3.7.3    Copyrights and related rights  ................................ ................................ ................. 48 
4   TRADE POLICIES B Y SECTOR  ................................ ................................ .....................  49 
4.1   Agriculture, Forestry, and Fisheries  ................................ ................................ ............... 49 
4.1.1    Agriculture  ................................ ................................ ................................ .............. 49 
4.1.1.1    Features  ................................ ................................ ................................ .............. 49 
4.1.1.2    Agriculture trade  ................................ ................................ ................................ ...50 
4.1.1.3    Domestic policies  ................................ ................................ ................................ ..50 
4.1.1.4    Support levels  ................................ ................................ ................................ ......51 
4.1.1.5    Border measures  ................................ ................................ ................................ ..52 
4.1.1.6    Selected subsectors  ................................ ................................ .............................. 53 
4.1.1.6.1    Coconut  ................................ ................................ ................................ ............ 53 
4.1.1.6.2    Cocoa  ................................ ................................ ................................ ............... 53 
4.1.1.6.3    Kava ................................ ................................ ................................ ................. 53 
4.1.1.6.4    Cattle  ................................ ................................ ................................ ............... 54 
4.1.2    Fisheries  ................................ ................................ ................................ ................. 54 
4.1.2.1    Features  ................................ ................................ ................................ .............. 54 
4.1.2.2    Fisheries trade  ................................ ................................ ................................ ......55 
4.1.2.3    Domestic policies  ................................ ................................ ................................ ..55 
4.1.2.3.1    Institutional and legislative framework  ................................ ................................ ..55 
4.1.2.3.2    Management plans  ................................ ................................ ............................. 57 
4.1.2.3.2.1    The National Deep -Bottom Fish Fishery Management Plan  ................................ ....57 
4.1.2.3.2.2    Revised tuna fishery management plan  ................................ .............................. 59 
4.1.2.4    Border measures  ................................ ................................ ................................ ..59 
4.1.2.5    Support  ................................ ................................ ................................ ............... 59 
4.2   Mining and Energy  ................................ ................................ ................................ ......60 WT/TPR/S/378 /Rev.1  • Vanuatu  
 
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  4.2.1   Electricity  ................................ ................................ ................................ ............... 60 
4.3   Manufacturing  ................................ ................................ ................................ ............ 62 
4.4   Services  ................................ ................................ ................................ .................... 62 
4.4.1    Main features and GATS commitments  ................................ ................................ .......62 
4.4.2    Financial services  ................................ ................................ ................................ .....64 
4.4.2.1    Banking  ................................ ................................ ................................ ............... 65 
4.4.2.2    Insurance  ................................ ................................ ................................ ............ 66 
4.4.3    Telecommunications  ................................ ................................ ................................ .68 
4.4.3.1    Main features  ................................ ................................ ................................ .......68 
4.4.3.2   Information and communication technologies (ICT) and the UAP ................................ .71 
4.4.4    Transport  ................................ ................................ ................................ ................ 72 
4.4.4.1    Civil aviation  ................................ ................................ ................................ ........ 72 
4.4.4.2    Maritime transport  ................................ ................................ ................................ 74 
4.4.5    Tourism  ................................ ................................ ................................ .................. 75 
4.4.5.1    Main features  ................................ ................................ ................................ .......75 
4.4.5.2    Institutional and regulatory framework  ................................ ................................ ....76 
5   APPENDIX TABLES  ................................ ................................ ................................ .... 80 
 
CHARTS  
 
Chart 1.1 Production composition of merchandise trade, 2016  ................................ ................. 16 
Chart 1.2 Direction of merchandise trade, 2016  ................................ ................................ .....16 
Chart 2.1 Registration process  ................................ ................................ ............................. 28 
Chart 3.1 Distribution of MFN tariff rates, 2012 and 2018  ................................ ....................... 34 
Chart 4.1 Growth rates, 2010 -17 ................................ ................................ ......................... 49 
Chart 4.2 Exports of main agricultural products, 2012 -16 ................................ ....................... 50 
Chart 4.3 Domestic support to agriculture, 2015  ................................ ................................ ....51 
Chart 4.4 Average tariff rates of WTO agricultural groups, and fish and fishery products  ............. 52 
Chart 4.5 Slaughtered cattle , 2012 -16 ................................ ................................ .................. 54 
Chart 4.6 Electricity demand and customer numbers, 2006 -16 ................................ ................ 61 
Chart 4.7 Telecommunication indicators per 100  inhabitants, 2016 and 2017  ............................ 69 
Chart 4.8 Number of passengers using the three international airports, 2011 -15 ....................... 73 
Chart 4.9 Visitor arrivals by air, 2013 -17 ................................ ................................ .............. 76 
Chart 4.10 Visitor arrivals by air , 2017  ................................ ................................ ................. 76 
 
TABLES  
 
Table 1.1 GDP by economic activity, 2010 -16 ................................ ................................ ........ 11 
Table 1.2 Selected economic and financial indicators, 2013 -18 ................................ ................ 13 
Table 1.3 Central Government budgetary operations, 2013 -17 ................................ ................ 14 
Table 1.4 Balance of payments, 201 3-18 ................................ ................................ .............. 14 WT/TPR/S/378 /Rev.1  • Vanuatu  
 
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  Table 1.5 Trade in services, 2010 -15 ................................ ................................ .................... 17 
Table 1.6 Foreign direct investment, 2010 -16 ................................ ................................ ........ 18 
Table 2.1 Major trade and investment related legislation  ................................ ......................... 20 
Table 2.2 Notifications to the WTO, 24 August 2012 – 27 June 2018  ................................ ........ 21 
Table 2.3 Overview of Vanuatu regional trade agreements, 2018  ................................ ............. 22 
Table 2.4 Selected categories of business licences ................................ ................................ ..25 
Table 2.5 Business activities reserved only for Ni -Vanuatu citizens  ................................ ........... 26 
Table 2.6 Reserved activities open t o foreign investment above a minimum threshold  ................ 27 
Table 2.7 FDI investment procedure  ................................ ................................ ..................... 29 
Table 3.1 Summary analysis of Vanuatu's MFN tariff, 2018  ................................ ..................... 32 
Table 3.2 Structure of Vanuatu's tariff , 2012 and 2018  ................................ ........................... 34 
Table 3.3 Products for which applied rates exceed bound rates, 2018  ................................ .......35 
Table 3.4 Excise duties, 2018  ................................ ................................ .............................. 36 
Table 3.5 Import restrictions  ................................ ................................ ............................... 37 
Table 3.6 Export restrictions  ................................ ................................ ................................ 38 
Table 3.7 Sectoral legislation with competition related provisions  ................................ ............. 42 
Table 3.8 Legislation with consumer protection related pro visions  ................................ ............ 43 
Table 3.9 CGBE performance indicators, FY2014  ................................ ................................ ....44 
Table 3.10 Main IP laws, and treaty membership  ................................ ................................ ...47 
Table 3.11 Duration of protection for industrial property rights  ................................ ................ 48 
Table 3.12 Duration of copyright protection  ................................ ................................ ........... 48 
Table 4.1 Imports and exports of fish and fisheries products, 2012 -16 ................................ .....55 
Table 4.2 Fisheries laws  ................................ ................................ ................................ ......56 
Table 4.3 Fishing licence fees  ................................ ................................ .............................. 56 
Table 4.4 Main measures  ................................ ................................ ................................ ....57 
Table 4.5 Area restriction for local fishing vessels  ................................ ................................ ..58 
Table 4.6 Electricity tariff structure for Port Vila, Malekula and Tanna  ................................ .......62 
Table 4.7 Vanuatu's services indicators, 2012 -16 ................................ ................................ ...63 
Table 4.8 Gross assets of Vanuatu's financial system, 2012 -17 ................................ ................ 64 
Table 4.9 Legislation  ................................ ................................ ................................ .......... 65 
Table 4.10 Banks' financial soundness indicators, 2012-17 ................................ ...................... 66 
Table 4.11 Insurance service providers  ................................ ................................ ................. 67 
Table 4.12 Premiums for insurance companies , 2012 -17 ................................ ......................... 68 
Table 4.13 Telecommunication indicators, 2014 -17 ................................ ................................ 68 
Table 4.14 Current telecom licensees  ................................ ................................ ................... 70 
Table 4.15 Major origins of imports, and export destinations for cargo transported by air  ........... 73 
Table 4.16 Vanuatu: Absolute and relative contribution of the tourism sector, 2017  ................... 75 
Table 4.17 Key tourism indicators 2013 -17 ................................ ................................ ........... 76 
 WT/TPR/S/378 /Rev.1  • Vanuatu  
 
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  BOXES  
 
Box 1.1 Cyclone Pam and the role of  trade in natural disasters  ................................ ................ 12 
 
APPENDIX TABLES  
 
Table A1.1 Merchandise exports by products, 2012 -16 ................................ ........................... 80 
Table A1.2 Merchandise exports by country, 2012 -16 ................................ ............................. 81 
Table A1.3 Merchandise imports by products, 2012 -16 ................................ ........................... 82 
Table A1.4 Merchandise imports by country, 2012 -16 ................................ ............................. 83 
 
  WT/TPR/S/378 /Rev.1  • Vanuatu  
 
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  SUMMARY  
1. Since Vanuatu's accession to the WTO in 2012, its  economy has grown at an average annual 
rate of around 2 .3%. Vanuatu's GDP per capita is now some  US$2,900.  Most of the population live 
in rural areas where subsistence farming, fishing and the production of cash crops such as kava, 
coconut and cocoa are the main sources of livelihood . However, strong population growth and a 
rapid urbanization rate are exercising increasing  pressure on land and other natural resources . The 
authorities expect that  Vanuatu will graduate from LDC status in a few years.  
2. Vanuatu has a high risk of  natural disasters, especially  from cyclones, earthquakes, volcano 
eruptions, and tsunamis. In 2015, large parts of the country were  devastated by Category 5 Cyclone 
Pam. Infr astructure and transport links among  islands also remain a challenge.  
3. Inflation averaged some 2% annually over the review period.  Public debt has increased greatly 
over recent years, mainly due to rising expenditure and lower income levels arising from Cyc lone 
Pam, from  around 26% of GDP at end -2015 to 51% in 2017. Vanuatu's current account deficit  
amounts to around 10% of GDP.  
4. Trade is very important for Vanuatu' s economy; the combined val ue of exports and imports 
equalled  around 106%  of GDP  in 2016, up f rom 93% in 2011. Tourism, cattle and logs are the main 
exports; Vanuatu's main trading partners include Australia, Fiji and New Zealand . Foreign direct 
investment is significant, with the main subsectors being tourism, telecommunications, food, and 
wood pr ocessing. Vanuatu 's vulnerability to natural disasters  and the weakness of its infrastructure 
are some of the challenges  it faces in attracting more investment.  
5. The Ministry of Foreign Affairs, International Cooperation and External Trade is responsible fo r 
formulating and coordinating Vanuatu's international trade policy; the Ministry is also responsible 
for bilateral, regional and multilateral trade and investment negotiations. Vanuatu's Trade Policy 
Framework, which was prepared in 2012 and is currently being updated, has the  objectives of, inter 
alia, mainstream ing trade into Vanuatu's national development strategy, and enhanc ing 
development through increased exports of goods and services. Vision 2030, its policy document, 
aims to achieve stability, sust ainability and prosperity for the country by 2030  through, inter alia , 
increasing trade and investment opportunities and reducing barriers, increasing access to markets 
for exports, requiring all new trade agreements to demonstrate tangible benefits in the  national 
interest, and stimulating economic diversification.  
6. Vanuatu acceded to the WTO on 24 August 2012; it is in the process of establishing a 
Permanent Mission in Geneva to foster its participation in the WTO. At the time of accession to the 
WTO, Vanu atu committed to submit notifications. It has submitted few notifications to the WTO ; as 
at 31 December 2017, notifications were outstanding in the areas of: agriculture (export subsidies); 
IPR (Article 69 in conjunction with the TRIPS Council Decision of 1995); the TRIMs Agreement; 
import licensing procedures; quantitative restrictions; customs valuation; rules of origin; the 
Integrated Database for imports  for 2016; subsidies and countervailing measures; state trading 
enterprises; and GATS. While Vanuatu has not yet ratified the Trade Facilitation Agreement , it has 
notified its Category A, B , and C commitments to the WTO. It has not been involved in any dispute 
settlement cases.  
7. Vanuatu grants at least MFN treatment to all of its trading partners. It is pa rty to several 
overlapping regional agreements. Under the Melanesian Spearhead Group (MSG) Trade Agreement, 
the Pacific Island Countries Trade Agreement (PICTA), and the Pacific Agreement on Closer Economic 
Relations, it has preferential trade agreements w ith other countries and territories in the South 
Pacific. Vanuatu also benefits from some non -reciprocal preferential trade arrangements , including 
the Generalized System of Preferences offered by some WTO Members. Australia and New Zealand 
provide duty -free and quota -free market access to Vanuatu exports under the South Pacific Regional 
Trade and Economic Cooperation Agreement (SPARTECA), while the European Union provides duty -
free and quota -free access to Vanuatu exports under the Everything but Arms init iative.  
8. Under the Business Licence Act, foreign investors must obtain, inter alia,  a certificate from the 
Vanuatu Investment Promotion Authority before applying for a business licence. Most business 
activities are open to foreign investment . For activities  such as tourism, retail shops, coastal 
shipping, and certain professional or business services, foreign investment is allowed  as long as the WT/TPR/S/378 /Rev.1  • Vanuatu  
 
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  operation meets minimum thresholds specified in the relevant legislation. Some activities are 
reserved for Vanuatu  citizens. These include businesses engaged in the export of sandalwood and 
kava; manufacturers of handcraft s and artefacts; service providers of kava bars, road transport, 
residential building and construction, and commercial cultural feasts; commercial f ishing in 
Vanuatu's inshore waters; and the small scale production of sawn timber.  
9. In 2013, Vanuatu adopted legislation to give effect to the WTO Agreement on Customs 
Valuation. The average time for customs clearance in Port Vila was three days and seven hours in 
2017; according to the authorities, this was greatly reduced with the inauguration of a new berth in 
2018.  
10. Vanuatu's  simple average applied MFN tariff is 9.3%  in 2018 , up from 9.2% in 2012 ; the small 
increase is due mainly to changes in the HS nomenclature. All but two tariff lines are ad valorem . 
The highest rates, of 75%, 55%, and 40%, apply to 56 tariff lines, comprising tobacco  products and 
alcoholic and non -alcoholic beverages. 26% of tariff lines are duty -free. Vanuatu does not u se tariff 
rate quotas or seasonal tariffs. It has bound all of its tariff lines. For three tariff lines, applied rates 
exceed bound rates.  
11. A value -added tax of 15% applies to all goods and services, except those that are exempted 
or zero -rated. Excise dut ies apply to tobacco products and alcoholic beverages. A law on trade 
contingency measures was enacted in 2013; no measures have yet been taken. Import prohibitions 
apply to, inter alia , certain agricultural products. Certain goods, including alcohol, cert ain drugs, 
certain foods, right -hand drive motor vehicles, and certain whiskies, are subject to import licensing.  
12. Exporters are required to register in ASYCUDA World.  An export duty of 5% plus VT 3,000 per 
cubic metre is applied to wood in the rough or ro ughly squared. Licences are required for exporting 
cattle, cocoa beans, cocoa, copra, lavender oil, and tea -tree oil. Vanuatu does not provide any export 
subsidies. It does not have any public finance, insurance, or guarantee schemes for exporters. Export 
prohibitions apply, inter alia , to certain marine animals.  
13. Vanuatu does not have any major incentive schemes , as it does not levy income tax on 
individuals or companies. Import tariffs are exempted on materials used for tourism, manufacturing 
or processin g, and mineral exploration. The Bureau of Standards, established in August 2017, 
oversees the development and adoption of standards. Several pieces of legislation make up the SPS 
regime, which is overseen by Biosecurity Vanuatu. No TBT or SPS notifications  have been submitted 
to the WTO. Standard setting is in the early stage of development. No specific trade concerns have 
been raised against Vanuatu's TBT or SPS measures. The authorities indicate that a Competition and 
Consumer Protection Act, with provisi ons on price controls, is being drafted . 
14. Various state -owned enterprises dominate sectors such as broadcasting, postal services, and 
transport. Their activities accounted for around 2% of GDP in recent years. The ir performance has 
been declining, resulting  in significant cost s to the Government. According to legislation, 
discrimination against foreign participation is not allowed; about 60% of government procurement 
is provided by foreign suppliers. Vanuatu is not party to the Agreement on Government Procur ement. 
More than half of the public procurement processed by the Central Tender Board was through open 
tendering. Vanuatu's IPR legislation covers the main areas of the TRIPS Agreement. The Vanuatu 
Intellectual Property Office, the institution responsible for protecting IP rights, was established in 
2012. It is in the process of setting up a Patent Division and a Design Division, and its Trademark 
Division was set up a few years ago. IPR enforcement at the border is the responsibility of Customs, 
which requ ires importers to prove the genuineness of their goods . Vanuatu's IPR regime is in the 
early stage of development. The authorities consider that more technical training is needed to 
improve IPR protection.  
15. Agriculture plays a key role in Vanuatu's economy, with around 80% of the population 
depending on subsistence farming. The agriculture sector (including fisheries and forestry) accounts 
for more than 20% of GDP and virtually all of merchandise exports. The  simple average applied MFN 
tariff rate on agricultural tariff lines (WTO definition) is 16.9%, higher than the average rate on 
non-agricultural tariff lines (8%). Imports of beef originating in Europe, and copra are prohibited. 
The m ain agricultural expor t items are copra, kava, coconut oil, cocoa, and beef, while the main 
agricultural import items are rice, pastry, chicken meat, wheat flour, beverages and cigarettes. 
Agricultur al development has been constrained by, inter alia , a lack of access to finance , and land WT/TPR/S/378 /Rev.1  • Vanuatu  
 
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  disputes. The Agriculture Sector Policy , covering the period between 2015 and 2030, suggest s using 
tax incentives to reduce business costs. According to Vanuatu's notification to the WTO, all its 
support measures have been under the "Green Box",  and the majority were  for crop extension, pest 
and disease control, and training.  
16. Licenc es are required for commercial fishing, and licensing fees, an important source of 
government revenue, are higher for foreign vessels than for local ones. Difficulties  facing the 
fisheries sector include a lack of data, difficult ies for fishermen in obtaining bank loans and insurance 
coverage, and a lack of  infrastructure and transport links among islands. Vanuatu currently has no 
fish processing factories ; the export o f fish is minor . Imports of fish originate mainly from Australia 
and New Zealand. The fishing and trad ing of s ea cucumber and green snail are banned, and the 
exportation of coconut crab and rock lobster is prohibited. Duty -free fuel was provided  to fishing  
vessels until 2017.  
17. A significant constraint for business in Vanuatu is the availability, cost and reliability of 
electricity and other utilities: 83% of rural households lack access to electricity, compared to 20% 
of urban households. The main energy sou rce is diesel combustion, contributing to about 80% of 
the total electricity generated, while windmills, and hydro and solar power produce  the rest. The 
Utilities Regulatory Authority (URA) regulates the provision of electricity in Vanuatu. Electricity ta riffs 
are either reviewed  or set by the URA. Small customers are charged significantly less than the 
regional average due to cross -subsid ization  from large and business customers, who pay significantly 
more than the regional ave rage.  
18. The services sector, a ccounting for about two  thirds of Vanuatu's GDP, is a net foreign 
exchange earner. Services exports accounted for 87% of Vanuatu's total exports (of goods and 
services) in 2017. Vanuatu made specific GATS commitments in 10 services sectors, and scheduled 
horizontal commitments on commercial presence and the presence of natural persons for all 
10 sectors.  
19. The financial services sector is overseen by the Reserve Bank of Vanuatu (RBV), which is the 
Central Bank. Under t he Financial Institutions Act , there is n o difference between capital 
requirements applied to locally -owned banks and those applied to foreign owned  ones. Three of the 
four commercial banks operating in Vanuatu are foreign owned. Their performance has been 
improving  after Cyclone Pam , due mainly to the RBV's accommodative stance in the aftermath of 
the cyclone, when it  lower ed the statutory reserve deposit requirement and the liquid asset 
requirement. During the review period, i nterest rates remained high and large interest rate spread s 
persisted, reflecting the high cost and high risk of credit, arising from small scale , vulnerability to 
shocks, and the geographic dispersion of the islands. The insurance sector remains small.  
20. The telecommunication services sector has been developing f ast, with significant increases in 
subscribers and market revenue; the mobile penetration rate increased from 12% in 2007 to 85% 
in 2017 while , during the same period, the fixed line penetration rate fell from 4.6% to 1.6%. Any 
person, local or foreign, ma y apply for a telecommunications licence issued by the 
Telecommunications and Radiocommunications Regulator ( TRR) – the sectoral regulator. 
Two companies provide fixed line, mobile and Internet servic es; both are foreign invested.  
21. To facilitate Vanuatu's ICT development, which faces geographical and topographical 
challenges as the population is spread  across numerous islands, the Government launched a 
Universal Access Policy , with the aim  of making ICT available to 98% of the population by 2018. The 
author ities state that the target has already been reached , as ICT is availa ble to 98.8% of the 
population.  
22. Transport services remain a major constraint to economic development. Airports Vanuatu 
Limited (AVL), a government -owned company, operates three internati onal airports in Vanuatu. The 
other 26 domestic airfields are regulated by the Civil Aviation Authority Vanuatu, the sectoral 
regulator. Air Vanuatu, a government -owned enterprise, provides air services linking Vanuatu's 
islands. Reflecting the cost s incurred when providing universal transport services, the Government 
provides loans and guarantees to Air Vanuatu to help cover its loss es. Foreign participation in 
cabotage is allowed, if provided for under the Air Services Agreement (ASA) between Vanuatu and 
the country from which th is foreign carrier originates.  WT/TPR/S/378 /Rev.1  • Vanuatu  
 
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  23. Maritime transport is of vital importance to Vanuatu , as the country  is composed of 
83 scattered islands. Under the Maritime Sector Regulatory Act No.  26 of 2016, which entered into 
force in 2017, th e Office of the Maritime Regulator (OMR) was set up to administer domestic ship 
registration. Vanuatu Maritime Services Limited (VMSL), a domestic private company, is contracted 
by the Government as the international shipping registry administrator. Foreig n investment is 
allowed in coastal shipping (excluding vessels that exclusively provide transport to foreign tourists) 
only when the carrying capacity of the vessel is above 80 tonnes. Van uatu has no legislation on 
cabot age; in practice, foreign vessels are not allowed to provide cabot age services in Vanuatu , 
except during particular periods such as natural disasters.  
24. Tourism is the mainstay of the economy and a major foreign exchange earner. The number 
of tourist arrivals, mainly from Australia, New Caledonia and New Zealand, recovered in recent years 
from a significant drop in 2015 caused by Cyclone Pam. Some types of tourism services (such as 
tour agents, tour operators, commercial cultural feasts, guest houses, bungalows, and hotels and 
motels)  are reserved for Vanuatu citizens ; foreign investment is allowed if the annual turnover is 
above a certain threshold. The sector is dominated by foreign investment, while local investors 
remain in smaller, less capital intensive businesses. Accessing capital is one significant constraint 
for establishing or expanding business es owned by Vanuatu citizens . The Government developed the 
Vanuatu Strategic Tourism Action Plan 2014 -2018 as a guideline for the development of tourism 
services.   
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  1  ECONOMIC ENVIRONMENT  
1.1  Main Features of the Economy  
1.1.  The Republic of Vanuatu is an island nation located in the South Pacific Ocean, east of northern 
Australia, east of Papua New Guinea, southeast of Solomon Islands, and west of Fiji. Port  Vila, on 
the island of Efate, is the capital. The archipelago is composed of about 82 islands of which 65 are 
inhabited and 14 have surface areas of more than 100 square kilometres. Most of the islands are 
mountainous and of volcanic origin, and have a tr opical or sub -tropical climate. Total land surface is 
about 4,700 square kilometres.  
1.2.  Vanuatu's population is about 270,000. With more than 100  languages spoken, Vanuatu's 
linguistic density is among the highest in the world. Most of the population lives i n rural areas where 
subsistence farming, fishing and production of cash crops such as kava, coconut and cocoa are the 
main sources of livelihood. However, strong population growth, of some 2.3% annually, and a rapid 
urbanization rate are exercising increas ing pressure on land and other natural resources.  
1.3.  As in the case of some other small island developing States, Vanuatu is faced with various 
specific challenges including: high cost of public service provision reflecting its geographical setting 
of disper sed islands; a narrow economic base; and a vulnerability to external economic shocks. 
Located on the Ring of Fire, the country is highly susceptible to both hydro -meteorological (tropical 
cyclones, floods) and geophysical disasters (volcano eruptions, eart hquakes, and resulting tsunamis 
and landslides).  
1.4.  Vanuatu's economy is based mainly on agriculture, fishing, tourism and offshore financial 
services, while the role of manufacturing is limited (Table 1.1). Tourism is the main generator of 
foreign exchange,  benefiting mostly from visitors from Australia and New Zealand. In 2016, 
estimated GDP per capita was about US$2,900. Vanuatu is a least developed country; the authorities 
expect it to graduate from LDC status in 2020.  
Table 1.1 GDP by economic activity, 2010 -16 
 2010  2011  2012  2013  2014  2015  2016  
GDP by economic activity at current basic prices (%)  
Agriculture, forestry and fishing  21.9 24.2 26.7 26.7 26.8 23.1 22.2 
 Crop production  17.4 19.4 20.9 21.1 20.9 19.9 19.1 
Mining and quarrying  0.0 0.0 0.0 0.0 0.0 0.0 0.0 
Manufacturing  5.1 4.5 3.8 3.4 3.5 3.5 3.4 
Electricity, gas and water supply  2.0 2.1 2.1 2.0 2.0 2.0 2.0 
Construction  5.9 3.7 2.1 2.9 3.1 5.9 5.7 
Services  65.0 65.5 65.3 64.9 64.5 65.4 66.6 
 Wholesale and retail trade; repair of motor 
 vehicles  16.4 16.5 18.4 18.1 18.8 19.1 20.3 
 Transportation and storage  5.7 5.9 5.6 5.2 4.9 3.9 4.2 
 Accommodation and food services  5.1 4.9 5.3 5.4 5.2 4.5 4.6 
 Information and communication  5.2 5.5 4.0 4.4 4.5 4.6 4.6 
 Finance and insurance  6.7 7.5 7.1 7.7 7.4 8.7 8.7 
 Real estate  6.7 6.6 7.3 7.2 7.4 8.0 7.8 
 Professional, scientific, technical and 
 administrative services  3.3 3.3 2.7 2.7 2.6 2.6 3.4 
 Government services  14.0 13.2 12.9 12.4 11.7 12.1 11.3 
 Education, health, recreation, and other 
 services  1.7 2.0 2.0 1.9 2.0 1.9 1.8 
GDP by economic activity at constant 2006 prices (annual % change)  
Agriculture, forestry and fishing  4.8 6.1 2.2 4.8 4.2 -15.8 5.1 
 Crop production  3.8 6.0 -0.2 3.5 2.6 -9.3 5.9 
Mining and quarrying  -27.3 -18.8 46.2 -15.8 -12.5 -21.4 72.7 
Manufacturing  86.5 -8.6 -13.8 -6.2 0.7 -4.5 2.9 
Electricity, gas and water supply  7.3 2.5 -2.4 1.9 -1.6 -2.5 11.9 
Construction  -11.2 -36.3 -44.3 45.3 9.7 101.6  2.0 WT/TPR/S/378 /Rev.1  • Vanuatu  
 
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   2010  2011  2012  2013  2014  2015  2016  
Services  3.0 3.2 4.4 0.1 2.4 2.0 2.9 
 Wholesale and retail trade; repair of motor 
 vehicles  8.3 4.8 6.6 -0.8 5.1 3.5 2.4 
 Transportation and storage  0.1 3.1 28.9 -22.6 -5.9 -4.0 1.3 
 Accommodation and food services  1.8 -1.0 4.4 3.7 1.3 -9.7 3.7 
 Information and communication  0.0 7.3 -8.4 8.3 7.9 7.0 6.0 
 Finance and insurance  -1.9 9.1 -0.1 8.1 -0.3 6.8 0.2 
 Real estate  5.9 3.1 9.1 1.8 2.7 1.8 3.6 
 Professional, scientific, technical and 
 administrative services  -5.0 4.7 -20.0 -0.9 -1.2 9.7 18.3 
 Government services  5.3 -4.1 2.0 6.4 1.8 1.6 1.8 
 Education, health, recreation, and other 
 services  -10.6 14.4 1.4 -5.6 8.8 -4.1 -7.4 
Source:  Vanuatu National Statistics Office online information.  
1.5.  In 2010, the latest year for which figures are available, 10.7% of the population lived below 
the national poverty line; life expectancy was some 72 years, and the adult literacy rate was some 
85%. In UNDP's 2016 Human Development Index, Vanuatu ranked 134th of 188 countries and 
territories. The labour  market is characterized by a high degree of informality.  
1.6.  The Reserve Bank of Vanuatu (RBV), Vanuatu's central bank, is responsible for the formulation 
and implementation of monetary policy. The main objectives of monetary policy are (1) a low and 
stable i nflation rate (defined as an annual change in the Consumer Price Index within the 0 to 
4 percent range), and (2) maintaining a sufficient level of foreign exchange reserves (defined as a 
minimum threshold of 4  months of import cover). A Statutory Reserve D eposit and open market 
operations are the main monetary policy instruments. Vanuatu's currency (the vatu) is pegged to 
an undisclosed basket of currencies.  
1.2  Recent Economic Developments  
1.7.  In March 2015, category 5 cyclone Pam caused extensive damage on all is lands (Box 1.1). The 
cyclone led to a slowdown in GDP growth to about 0.2% in 2015. As at mid -2018, most 
reconstruction works had been  completed or were near completion.  
Box 1.1 Cyclone Pam and the role of trade  in natural disasters  
According to the UN World Risk Index, Vanuatu is the world's most at -risk country for natural disasters, facing 
the specific risks of cyclones, volcano eruptions, earthquakes, and tsunamis. In March 2015, category 5 
Cyclone Pam struck  the whole country, with estimated wind speeds of 250  km/h and wind gusts that peaked 
at around 320 km/h, causing widespread devastation and extensive damage. An estimated 65,000 people – 
about a quarter of Vanuatu's total population – were displaced from their homes. Approximately 
17,000  buildings were damaged or destroyed, including houses, schools, clinics, and other medical facilities. 
Communication across the country was crippled, with only one cellular tower in Port Vila remaining operational, 
and the  power grid was devastated. Four days after the storm, nearly 60 inhabited islands remained cut -off 
from the outside world. The total economic damage caused by Pam was estimated at approximately 
VT 48.6 billion, equivalent to about 64% of GDP. The most aff ected sectors were agriculture and tourism, 
which contracted by 15.8% and 9.7% respectively. Merchandise exports and income from tourism declined 
substantially, while imports surged due to reconstruction needs.  
 
The Government's responses to the disaster i ncluded: support for household reconstruction by temporarily 
suspending VAT and import duties on construction materials; steps taken by the Reserve Bank of Vanuatu to 
alleviate liquidity constraints by reducing the Statutory Reserve Deposit requirement; an d the implementation 
of a business continuity plan for banks to ensure that most households and businesses had enough physical 
currency. Also, one week after the cyclone hit, the Government allowed contributors to the Vanuatu National 
Pension Fund to withd raw up to 20% from their retirement accounts for emergency expenditure. These ex-post 
responses were generally considered successful. However, experience from Cyclone Pam also highlights the 
importance of ex-ante measures for countries that are prone to natural disasters, such as resilient 
infrastructure, the availability of internal and external emergency funds or fiscal buffers, risk assessment and 
planning, and diversification of economic activity.  WT/TPR/S/378 /Rev.1  • Vanuatu  
 
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  Beyond the  specific experience of Vanuatu, natural disasters may pose important challenges to any country's 
trade regime. Entry issues for humanitarian goods and services fall within the ambit of measures regularly 
discussed at the WTO.a Onerous inspection and docum entation requirements may delay the entry of relief 
items. High import tariffs on relief items may push up costs for responders if they are not exempted. Where 
tariff exemptions may be available, difficulties in applying them can add further delays. Specia lized personnel 
can face regulatory barriers due to issues related to the recognition of their qualifications and licensing or 
permit requirements. In small countries with infrastructure challenges, customs authorities and the transport 
sector may also fac e serious capacity constraints.  
a Roberts, Michael  and Mohammed, Nazia , "Trade Issues Affecting Disaster Response ", WTO Staff 
Working Paper 2017 -07. 
1.8.  The exchange rate of the vatu against the US dollar has been relatively stable since 2015. 
Accommodative monetary policy played a crucial role in supporting economic recovery and financial 
stability after cyclone Pam. Since 2017, however, excess liquidity in the banking system has been 
associated with  the building up of inflation ary pressure. Inflation fluctu ated around 1% in most years 
up until 2016 , before  increas ing to over 3% in the second quarter of 2017 (Table 1.2).  
Table 1.2 Selected economic and financial indicators, 2013 -18 
 2013  2014  2015  2016  2017a 2018b 
Output and prices (annual percentage change)  
Real GDP  2.0 2.3 0.2 3.5 4.2 3.8 
Consumer prices (period average)  1.5 0.8 2.5 0.8 3.1 4.8 
Consumer prices (end period)  1.5 1.1 1.5 2.1 3.8 4.6 
Government finance (% of GDP)  
Total revenue  21.4 23.5 31.9 30.8 31.5  31.6 
Taxes  17.2 17.4 16.3 16.3 17.4  17.8 
Other revenue  2.0 2.0 5.5 5.3 5.2 5.2 
Grants  2.2 4.1 11.8 8.3 8.3 8.2 
Expenditure  21.7 28.5 41.5 36.9 38.9  39.5 
Expense  20.7 21.8 23.1 24.8 27.0  28.6 
Net acquisition of non -financial 
assets  1.0 6.6 18.3 12.1 11.9  11.0 
Net lending (+)/borrowing ( -) -0.2 -5.0 -9.6 -6.1 -7.5  -8.0 
Public and publicly  guaranteed debt 
(end of period)  23.1 28.7 42.4 48.8 51.0  53.7 
Domestic  7.8 7.8 7.5 8.5 8.0  7.6 
External  12.6 16.3 30.5 37.6 40.4  43.7 
Publicly  guaranteed debt  2.8 4.6 4.4 2.8 2.6  2.4 
Money and credit (annual percentage change)  
Broad money (M2)  -6.4 8.5 23.1 10.6 2.4 11.3 
Net foreign assets  -14.8 -14.5 71.6 46.5 -6.6 12.7 
Domestic credit  2.7 9.3 -7.4 -10.2 10.9 10.1 
Of which: Credit to private sector  2.0 9.0 1.4 1.3 4.3 4.1 
Interest rates (%, end of period)  
Deposit rate  (vatu  deposits)   1.9 2.6 2.3 1.6 .. .. 
Lending rate  (vatu  loans)   10.5 10.3 10.0 9.9 .. .. 
Exchange rates        
Vatu per US$ (period average)  94.5 97.1 107.0  109.3  107.8  .. 
Vatu per US$ (end of period)  97.3 102.7  109.6  113.1  106.5  .. 
Real effective exchange rate 
(average)  98.9 98.1 100.3  102.3  102.2  .. 
Memorandum items        
Nominal GDP (in billions of vatu)  75.8 79.1 82.8 87.3 93.7 101.9  
Nominal GDP (in millions of US$)  802 815 774 798 870 957 
.. Not available.  
a Estimate  
b Projection  
Source:  IMF (2016), Vanuatu: 2018 Article IV Consultations . 
1.9.  Government revenues remain at relatively low levels. In the aftermath of cyclone Pam, grants 
have been playing an important role in financing reconstruction works (Table 1.3). In order to 
increase fiscal income, the Government raised the VAT rate in Januar y 2018, from 12.5% to 15% WT/TPR/S/378 /Rev.1  • Vanuatu  
 
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  (Section 3.3.1), and also uses economic citizenship programmes .1 The Government aims to 
introduce corporate and personal income taxes in 2019.  
1.10.   Government expenditure rose significantly in 2015 to finance reconstruction, and has 
remained at these high levels since then. In August 2015, the Government launched the Vanuatu 
Infrastructure Strategic Investment Plan 2015 -2024, aimed at developing urban and rural areas, 
improving living standards, and delivering community services. The p lan outlined the Government's 
priorities for both economic and social infrastructure, and laid out how to fund and implement these 
investments.  
Table 1.3 Central Government budgetary operations, 2013 -17 
 2013  2014  2015  2016  2017  
Total revenue  16,247  18,585  26,424  26,872  29,514  
Taxes  13,069  13,747  13,467  14,231  16,276  
Other revenue  1,514  1,561  3,209  5,403  5,417  
Grants  1,664  3,277  9,748  7,238  7,821  
Expenditure  18,339  22,518  34,344  32,207  36,509  
Expense  15,694  17,268  19,152  21,629  25,317  
Compensation of employees  8,438  8,582  8,893  9,107  9,967  
Use of goods and services  4,144  5,185  5,843  5,995  8,131  
Interest payment  555 573 700 908 949 
Grants  1,600  2,035  2,530  3,217  2,408  
Social benefits  346 241 476 1,542  2,664  
Other expense  612 652 710 860 1,198  
Net acquisition of nonfinancial assets  2,644  5,250  15,191  10,578  11,192  
Gross operating balance  553 1,317  7,272  5,243  4,197  
Net lending (+)/borrowing ( -) -2,092  -3,933  -7,919  -5,335  -6,995  
Net acquisition of financial assets  -343 460 5,682  3,050  1,470  
Net incurrence of liabilities  1,428  3,607  12,425  9,002  7,173  
Domestic  306 263 32 1,453  105 
Foreign  1,121  3,344  12,393  7,549  7,068  
Source:  IMF (2018), Vanuatu: 2018 Article IV Consultations . 
1.11.   Vanuatu's public debt stood at around 51% in 2017, up from 26% at end -2015. Public and 
publicly  guaranteed debt increased sharply from 2014 mainly due to disbursements for 
reconstruction and infrastructure projects, though most of the new external borrowin g was highly 
concessional. Against the background of strongly increasing foreign debts, Vanuatu prepared its first 
debt management strategy in August 2015. With eight to nine months of imports, Vanuatu has 
adequate reserves.  
1.12.   Vanuatu's current account has t raditionally featured a deficit, which was particularly marked 
in 2015 and 2017, when it was equivalent to 10.6% and 9.0% of GDP, respectively (Table  1.4). The 
deficit was financed by official transfers, foreign investment inflows, and remittances.  
Table 1.4 Balance of payments, 2013 -18 
(US$ million, unless otherwise indicated)  
 2013  2014  2015  2016  2017a 2018b 
Current account balance  -26 -2 -82 -32 -78 -88 
Trade balance  -223 -197 -269 -264 -320 -264 
Exports of goods (f.o.b.)  45 63 39 50 52 60 
Imports of goods (f.o.b.)  -268 -260 -308 -314 -373 -324 
Services balance  190 166 104 179 215 151 
Receipts  331 307 283 330 347 337 
 of which: travel  288 257 183 204 222 250 
Payments  -142 -141 -179 -152 -132 -186 
Primary income  -11 4 7 7 2 2 
Receipts  33 36 36 36 39 43 
Payments  -45 -33 -29 -30 -37 -41 
                                                
1 Under these programmes, the Government offers honorary citizenship to foreign investors against a 
one-time contribution, ranging from US$200,000 for a single person application to US$280,000 for a family 
with elderly parents. " Honorary citizenship" offers most Vanuatu  citizens rights, with the exception of  voting 
and political involvement. The application process requires a background check , including of financial resources 
and criminal record, and takes between one and two months, making it one of the most fast -track citizenship 
programmes in the world. However, citizens of North Korea, Yemen, Syria, Iraq, and Iran are not allowed to 
apply.  WT/TPR/S/378 /Rev.1  • Vanuatu  
 
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   2013  2014  2015  2016  2017a 2018b 
Secondary income  18 26 76 46 25 24 
Official  17 22 39 38 23 22 
Private  1 3 37 8 2 2 
Capital and financial account  58 43 118 95 124 81 
Capital account  21 32 84 48 82 36 
 of which : Official capital transfers (net)  .. .. .. 47 35 34 
Financial account  .. .. .. 47 42 45 
Foreign direct investment  .. .. .. 55 33 38 
Portfolio investment  .. .. .. -11 -11 -11 
Other investment  .. .. .. 3 20 19 
Net errors and omissions  -36 -34 51 -61 55 0 
Overall balance  -5 6 87 1 100 -6 
Financing:  5 -6 -64 -1 -100 3 
Change in international reserves ( - = 
increase)  5 -6 -87 -1 -100 6 
Memorandum items:        
Gross international reserves  179 184 269 267 368 361 
In months of prospective imports  5.4 4.5 6.9 6.4 8.6 8.2 
Current account balance (% of GDP)  -3.3 -0.3 -10.6 -4.1 -9.0 -9.2 
Exchange rate (vatu per US$, period 
average)  94.5 97.1 107.0  109.3  107.8  .. 
Exchange rate (vatu per US$, end of period)  97.3 102.7  109.6  113.1  106.5  .. 
Public external debt (% of GDP)  12.6 16.3 30.5 37.6 40.4 43.7 
.. Not available.  
a Estimates.  
b Projections.  
Source:  IMF (2018), Vanuatu: 2018 Article IV Consultations . 
1.13.   According to the IMF, the outlook for Vanuatu's economy is that it will  fully recover from the 
effects of Cyclone Pam in the near future, with an estimated real GDP growth rate of 4% in both 
2017 and 2018.2 Inflation is expected to rise to 4.8% in 2018, mainly due  to the increase in 
value -added tax from 12.5% to 15% in Januar y 2018, before reverting to lower levels in the medium 
term. The current account deficit is expected to widen to around 9% of GDP in 2017 and 2018, due 
to the high import content of the projects to scale up infrastructure. The fiscal deficit is expected to  
remain high, at around 7 -8% of GDP, also reflecting reconstruction and infrastructure expenditure. 
The possibility of further natural disasters remains an important downside risk to all projections.  
1.3  Developments in Trade and Investment  
1.3.1   Trends and patterns  in merchandise and services trade  
1.14.   Trade is significant for Vanuatu's economy; the combined value of exports and imports 
equalled over 106% of GDP in 2016, up from 93% in 2011. This increase is mostly due to the strong 
growth of imports, while exports stag nated during the period under review. Cyclone Pam led to a 
contraction of exports in 2015, while imports increased strongly.  
1.15.   Vanuatu has not submitted any data to the UN Comtrade database since 2012. The authorities 
indicate that they intend to resume data  submission in the near future.  
1.16.   Merchandise exports are heavily concentrated in a few items. Based on data from the National 
Statistics Office, Vanuatu's goods exports are dominated by agricultural products, particularly 
coconut products, kava, beef, cocoa , timber, and coffee (Table A1.1 and Chart 1.1).  
1.17.   Australia, New Caledonia, and other members of the Melanesian Spearhead Group 
(Papua  New Guinea, Fiji, and Solomon Islands) are the main destinations for Vanuatu's merchandise 
exports (Table A1.2 and Chart 1.2).  
1.18.   Imports are dominated by manufactured goods, food products and live animals (Table A1.3 
and Chart 1.1). The y mainly come from  Australia, Fiji, New Zealand, and Singapore (Table A1.4 and 
Chart 1.2).  
                                                
2 IMF, Vanuatu 2018 Article IV Consultation Press Release and IMF Country Report No. 18/109.  WT/TPR/S/378 /Rev.1  • Vanuatu  
 
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  Chart 1.1 Production composition of merchandise trade, 2016  
 
Source:  WTO calculations, based on online data from the National Statistics Office of Vanuatu.  
Chart 1.2 Direction of merchand ise trade, 2016  
 
a Including Solomon Islands, Fiji, and Papua New Guinea.  
Source:  WTO calculations, based on online data from the National Statistics Office of Vanuatu.  
1.19.   Vanuatu's service exports grew strongly between 2010 and 2013, but contracted in 2014 and 
2015. In 2015, they were dominated by tourism, which accounted for some 80% of service exports 
(Table  1.5). Imports of services grew constantly during the review period; they mainly comprised 
transport services, travel and other business services.  
Beef & veal
5.8%
Cocoa
7.5%Copra
31.9%
Sawn timber
2.3%Chart 1.1  Production composition of merchandise trade, 2016
Exports
Total:  US$50.2 million Total:  US$368.5 millionBeverages &
tobacco 3.2%Food & live animals
21.1%
Basic manufactured
products 18.4%Imports
Other
19.8%Other
16.4%
Mineral fuels
8.5%
Chemicals
6.5%
Coconut oil
10.6%Kava
22.1%
Source:   WTO calculations, based on data taken online from the National Statistics Office of Vanuatu.Machines &
transport equip.
25.9%
EU-28
4.0%MSG membersa
8.8%New Zealand
3.0%Australia
17.4%Chart 1.2  Direction of merchandise trade, 2016
Exports
Source:   WTO calculations, based on data taken online from the National Statistics Office of Vanuatu.Total:  US$50.2 million Total:  US$368.5 millionNew Zealand
11.5%Australia
22.9%
Japan
5.6%Imports
Other
55.8%Other
16.4%
New Caledonia
1.3%
Fiji
11.8%Japan
1.9%New Caledonia
9.0%
a   Including Solomon Islands, Fiji, and Papua New Guinea.Hong Kong,
China 2.8%
Singapore
8.3%
France
5.2%WT/TPR/S/378 /Rev.1  • Vanuatu  
 
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  Table 1.5 Trade in services, 2010 -15 
(US$ million)   
2010  2011  2012  2013  2014  2015  
Total credit (US$ million)  276.7  283.2  301.8  352.4  333.7  282.9  
% of total credit  
Maintenance and repair  0.0  0.0  0.0  0.0  0.0  0.0  
Construction  0.1  0.1  0.1  0.1  0.1  0.1  
Transport  11.4  11.7  10.7  9.6  13.5  12.1  
 Passenger  9.1  9.2  8.8  7.7  8.2  9.1  
 Freight  1.0  1.0  0.9  0.8  0.7  0.6  
 Other (including postal and courier)  1.3  1.4  1.1  1.1  4.6  2.4  
Travel  78.5  78.8  80.0  81.4  77.1  80.5  
 Business  7.6  8.0  8.5  6.4  5.0  5.5  
 Personal  70.9  70.7  71.5  75.0  72.1  74.9  
Insurance and pension services  0.1  2.4  2.5  1.8  1.0  0.0  
Financial services  3.7  2.0  2.3  1.3  1.3  1.6  
Charges for the use of intellectual property  0.1  0.1  0.1  0.0  0.1  0.1  
Telecommunications, computer, and information 
services  2.2  1.1  0.5  0.5  1.6  2.6  
Other business services  1.9  2.3  1.5  1.3  1.2  1.1  
Personal, cultural and recreational services  0.0  0.1  0.1  0.0  0.1  0.1  
Government services  2.0  1.6  2.2  3.9  4.1  1.9  
Other  10.2  12.7  12.2  9.9  9.1  14.3  
Total debit (US$ million)  124.6  145.0  145.9  149.1  144.9  179.0  
% of total debit  
Maintenance and repair  0.0  0.0  0.0  0.0  2.3  0.9  
Construction  0.1  0.1  0.1  0.1  0.1  0.1  
Transport  53.5  50.8  49.3  49.0  51.3  59.7  
 Passenger  3.2  3.0  3.8  3.5  2.8  2.3  
 Freight  38.1  36.7  35.0  35.4  34.9  39.1  
 Other (including postal and courier)  12.1  11.1  10.5  10.1  13.6  18.3  
Travel  23.9  24.3  25.4  27.7  25.4  16.8  
 Business  7.2  7.2  6.7  7.0  7.1  5.3  
 Personal  16.7  17.1  18.7  20.7  18.3  11.5  
Insurance and pension services  3.6  6.8  6.9  5.9  3.9  2.4  
Financial services  2.9  2.1  3.5  4.3  1.6  0.8  
Charges for the use of intellectual property  0.1  0.2  0.1  0.1  0.1  0.1  
Telecommunications, computer, and information 
services  10.7  10.1  9.7  7.7  5.7  4.3  
Oher business services  4.2  4.6  4.3  4.2  8.2  13.8  
Other  1.0  1.0  0.6  1.0  1.4  1.0  
Source:  IMF online information.  
1.3.2   Trends and patterns in FDI  
1.20.   The most recent peak in foreign direct investment into Vanuatu was in 2012, amounting to 
US$78  million (Table 1.6). The FDI inward stock was US$545 million in 2016; the main subsectors 
for FDI in Vanuatu were tourism, telecommunications, food, and wood processing. According to t he 
authorities, the main investing countries are Australia, Japan, China and New Zealand. Vanuatu's 
vulnerability to natural disasters, the weakness of its infrastructure, its geographical isolation, and 
poorly protected property rights are some of the pot ential hindrances to investment.  
1.21.   Outward FDI is negligible and has not exceeded US$2 million in any year since 2011; the 
stock of outward investment in 2016 was US$24 million.  WT/TPR/S/378 /Rev.1  • Vanuatu  
 
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  Table 1.6 Foreign direct investme nt, 2010 -16 
(US$ million)  
Year 2010  2011  2012  2013  2014  2015  2016b 
FDI inflows   70a 78a -19a -18a 29a 32 
FDI outflows   1a 1a 0.5a 1a 2a 1 
FDI inward stock  454a .. .. .. .. .. 545 
FDI outward stock  23a .. .. .. .. .. 24 
.. Not available.  
a Asset/liability basis.  
b Estimates.  
Source:  UNCTAD, FDI/MNE database. 
Viewed  at: http://www.unctad.org/en/Pages/DIAE/FDI%20Statistics/FDI -Statistics.aspx . 
 
 
 WT/TPR/S/378 /Rev.1  • Vanuatu  
 
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  2  TRADE AND INVESTMENT  REGIMES  
2.1  General Framework  
2.1.  The Republic of Vanuatu is a parliamentary democracy. Under the current Constitution, which 
was adopted in 1980 when the country became independent, the national political structure consists 
of a legislative, an executive, and a judiciary branch.1 
2.2.  The head of the country is the President, who is elected for a term of five years by a two -thirds 
majority of an electoral college.2 The power of the President is primarily ceremonial ; the President  
appoints the Chief Justice of the Supreme Court, and three other justices. The current President has 
served since July 2017.  
2.3.  The legislative branch is a unicameral Parliament consisting of 52 members, all of whom are 
elected every four years. The Parliam ent makes laws by passing bills introduced by one or more 
members, or by the Prime Minister or a minister. When a bill is passed by the Parliament, it must 
be presented to the President, who assents to it within two weeks. If the President considers the bi ll 
to be inconsistent with a provision of the Constitution, the Supreme Court needs to be referred to 
for its opinion. The bill must not be promulgated if the Supreme Court considers it inconsistent with 
the Constitution.  
2.4.  The head of the executive branch is the Prime Minister, who is the head of Government and is 
elected by a majority vote of a three -quarters quorum of the Parliament. The Prime Minister and the 
Council of Ministers form the central government. The national Council of Chiefs (Malvatu Mauri) , 
elected by district councils of chiefs, advises the Government on matters relating to Vanuatu  citizens' 
culture and language.  
2.5.  The head of the judicial branch is the Chief Justice of the Supreme Court, which consists of the 
Chief Justice and other judges . Two or more members of the Court may constitute a Court of Appeal. 
Magistrate courts handle routine legal matters. Vanuatu's legal system is based on both British 
common law and French civil law. Village or island courts, presided over by local chiefs, d eal with 
questions of customary law.  
2.6.  International treaties and agreements must be ratified before they can be invoked before courts 
in Vanuatu. Ratification procedures involve the preparation of a bill with the treaty attached to it in 
French and in Engl ish. A bill is debated in Parliament prior to its passage. A bill passed by the 
Parliament is forwarded to the President for assent and publication in the Official Gazette, before its 
entry into force.  
2.7.  If the laws of Vanuatu are found to contradict intern ational treaties or agreements, the 
provisions of the international treaty or agreement prevail. Provisions of the WTO Agreement, 
including Vanuatu's accession protocol, must be applied uniformly throughout its customs territory. 
In cases where WTO provisi ons are not applied, or are applied in a non -uniform manner, central 
authorities would act to enforce WTO provisions; affected parties would not need to petition 
throughout the courts.3  
2.8.  According to the World Bank's Doing Business Report, in 2018  in Vanua tu, resolving a standard 
contract enforcement legal dispute takes 430 days and costs 56% of the value of the claim (the East 
Asia and Pacific average was 566 days and 47% of the claim).4 According to the report, in 2018, 
Vanuatu stood at 135th out of 190 e conomies on the ease of enforcing contracts.  
                                                
1 WTO document WT/ACC/VUT/17, 11 May 2011. The Constitution of Vanuatu is accessible at: 
http://www.wipo.int/wipolex/en/text.jsp?f ile_id=195747#LinkTarget_720 . 
2 The electoral college consists of 52 members of Parliament and 6 presidents of local government.  
3 WTO document WT/ACC/VUT/17, 11 May 2011.  
4 World Bank (2017), Doing Business 201 8 – Reforming to create jobs . Viewed at: 
http://www.doingbusiness.org/~/media/WBG/DoingBusiness/Documents/Annual -Reports/English/DB2018 -Full-
Report.pdf .  WT/TPR/S/378 /Rev.1  • Vanuatu  
 
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  2.9.  Acts passed by the Parliament are available online on the Government's website.5 Vanuatu's 
main trade and investment related legislation is listed in Table 2.1.  
Table 2.1 Major trade and investment related legislation  
Subject  Legislation  
Investment  Vanuatu Foreign Investment Promotion (Amendment) Act No. 23 of 2008;  
Business Licence (Amendment) Act No. 34 of 2010;  
Excise (Amendment) Act No. 30 of 2010;  
Value Added  Tax (Amendment) Act No. 3 of 2007  
Trade  Customs (Amendment) Act No. 20 of 2007;  
Import Duties (Amendment) Act No. 29 of 2010;  
Import of Goods Control (Amendment) Act No. 37 of 2010;  
Export Duties (Amendment) Act No. 25 of 2007  
Source:  Information provided by the authorities of Vanuatu.  
2.2  Trade Policy Formulation and Objectives  
2.10.   The formulation and coordination of Vanuatu's trade policy is mainly under the authority of 
the Ministry of Foreign Affairs, International Cooperation and External Trade, which  is also 
responsible for bilateral, regional and multilateral trade and investment negotiations. Under the 
direction of the Ministry of Tourism, Trade, Commerce, Industry and Ni -Vanuatu Business, Vanuatu's 
Trade Policy Framework was prepared in 2012, and i s in the process of being updated. The objectives 
of the Framework are to, inter alia , mainstream trade into Vanuatu's national development strategy, 
enhance development through increased exports of goods and services, and facilitate increased flows 
of Aid for Trade.  
2.11.   The National Trade Development Committee (NTDC), established in 2012 and  comprising both 
public and private sector representatives, oversees trade development in Vanuatu. Other ministries, 
departments and agencies involved in trade -related activities include: the Ministry of Finance and 
Economic Management; the Ministry of Agr iculture, Livestock, Forestry, Fisheries and Biosecurity; 
the Ministry of Infrastructure and Public Utilities; the Ministry of Lands and Natural Resources; the 
Ministry of Climate Change and Natural Disaster; and the Reserve Bank of Vanuatu.  
2.12.   Vanuatu's poli cy document, Vision 2030, set s the target of achieving a stable, sustainable and 
prosperous country within 15 years (from 2016 to 2030), through, inter alia , encouraging trade, 
promoting investment, and providing economic opportunities for all members of s ociety.6 It aims to, 
inter alia , increase trade and investment opportunities and reduce barriers, including through the 
use of Aid for Trade; increase access to markets for Vanuatu exports; require all new trade 
agreements to demonstrate tangible benefits in the national interest; and stimulate economic 
diversification to spread the benefits of growth and increase economic stability.  
2.13.   The authorities indicate that the National Industry Policy (NIP) issued in 2011 provides 
guidelines for the development of lo cal manufacturing industries, including promoting and protecting 
infant industries in Vanuatu. Sectoral trade policy objectives were set out in various sectoral policies 
such as the Agriculture Sector Policy (2015 -2030), the Livestock Policy (2015 -2030), t he Fruits and 
Vegetables Strategy (2017 -2027), the National Coconut Strategy (2016 -2025), the Forest Policy 
(2013 -2023), the National Kava Strategy (2016 -2025), the National Cooperatives Policy 
(2017 -2022), and the Strategic Tourism Action Plan (2013 -2018) .  
2.14.   Vanuatu ratified the United Nations Convention against Corruption (UNCAC) in 2010. In 2011, 
the Government established the Office of the Government Chief Information Officer (OGCIO) to 
facilitate the development of information and communication technolo gy used by government 
agencies, so as to enhance efficiency and improve transparency.7 The Government also completed 
a Right to Information Policy in 2013, and a Right to Information Act was passed by the Parliament 
in 2017, with the aim of improving trans parency.  
                                                
5 Online information . Viewed at: http://www.paclii.org/vu/legis/num_act/ .  
6 Vanuatu 2030 – The People's Plan. Viewed at: 
https://www. gov.vu/attachments/article/26/Vanuatu2030 -EN-FINAL -sf.pdf . 
7 Transparency International (2014), National Integrity System Assessment 2014 – Vanuatu . Viewed at: 
https://www.transparency.org/whatwedo/publication/vanuatu_national_integrity_system_assessment_2014 . WT/TPR/S/378 /Rev.1  • Vanuatu  
 
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  2.15.   The authorities are making efforts regarding anti -money laundering (AML) and combating the 
financing of terrorism (CFT) to prevent the laundering of proceeds of corruption. According to an 
IMF report, Vanuatu was included in the Financial Action Task Force's (FATF) gray list in 
February  2016 after the authorities agreed to an action plan addressing significant AML/CFT  
deficiencies. Measures adopted include the amendments to the legal framework on AML/CFT.8 
2.3  Trade Agreements and Arrangements  
2.3.1   WTO  
2.16.   On 24 August 2012, Vanuatu became the 157th Member of the WTO.9 Vanuatu committed 
that it would fully apply all WTO provisions from the date of its accession, and did not require 
recourse to any transitional period except on intellectual property and on the p ublication of trade 
information. Vanuatu bound all of its tariff lines, and the average final bound rate is 40.2% 
(Table  3.2). It grants at least MFN treatment to all its trading partners. Vanuatu made specific GATS 
commitments on 10 services sectors (Sect ion 4.3). In  January 2018, Vanuatu notified to the WTO 
its commitments in Categories A, B, and C with indicative dates for implementation (for Categories 
B and C); it has not yet ratified the Trade Facilitation Agreement.10  
2.17.   In WTO negotiations, Vanuatu is a member of the following groups: ACP (African, Caribbean 
and Pacific countries with preferences in the European Union); G -90 (African group + ACP + least 
developed countries (LDCs)); and LDCs.  
2.18.   Since its accession, Vanuatu has not been involved in any WTO  dispute settlement cases 
either as a complainant, a respondent, or a third party.11 
2.19.   Vanuatu has submitted a number of notifications to the WTO (Table 2.2).  However, as at 
31 December 2017,  notifications were outstanding in the areas of: agriculture (export subsidies); 
IPR (Article 69 in conjunction with the TRIPS Council Decision of 1995); the TRIMs Agreement; 
import licensing procedures; quantitative restrictions; customs valuation; rules o f origin; Integrated 
Database for 2016 imports; subsidies and countervailing measures; state trading enterprises; and 
GATS. At the time of accession to the WTO, Vanuatu committed to submit all initial notifications 
required by any Agreement constituting pa rt of the WTO Agreement.12 
Table 2.2 Notifications to the WTO, 24 August 2012 –27 June 2018  
Legal provision  Description of requirements  WTO document and date  
Agreement on Agriculture  
Article 18.2 – DS:1 Domestic support  G/AG/N/VUT/1, 20 July 2016  
Agreement on the Implementation of Article VI of the GATT 1994 (Anti -Dumping Agreement)  
Articles 16.4 & 16.5  Has not established any competent 
authority to initiate and conduct an anti -
dumping investigation, and has not taken 
any anti -dumping action  G/ADP/N/193/VUT, 27 July 2016  
Article 18.5  No relevant laws and/or regulations  G/ADP/N/VUT/1, G/SCM/N/1/VUT/1, 
G/SG/N/1/VUT/1, 25 July 2016  
Agreement on Subsidies and Countervailing Measures  
Article 32.6  No relevant laws and/or regulations  G/ADP/N/VUT/1, G/SCM/N/1/VUT/1, 
G/SG/N/1/VUT/1, 25 July 2016  
Article 25.11, 25.12  No relevant authority, no action taken  G/SCM/N/202/VUT, 22 July 2016  
Agreement on Trade Facilitation  
WT/L/931  Notification of Categories A, B and C 
commitments  G/TFA/N/VUT/1, 10 January 2018  
Agreement on Safeguards  
Article 12.6  No relevant laws and/or regulations  G/ADP/N/VUT/1, G/SCM/N/1/VUT/1, 
G/SG/N/1/VUT/1, 25 July 2016  
                                                
8 IMF (2016), Vanuatu 2016 Article IV Consultation, IMF Country Report No. 16/336, October.  
9 WTO online information. Viewed at: https://www.wto.org/english/news_e/pres12_e/pr671_e.htm . 
10 WTO document G/TFA/N/VUT/1, 10 January 2018.  
11 WTO online information. Viewed at: 
https://www.wto.org/english/thewto_e/countries_e/vanuatu_e.htm . 
12 WTO document WT/ACC/VUT/17, 11 May 2011.  WT/TPR/S/378 /Rev.1  • Vanuatu  
 
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  Legal provision  Description of requirements  WTO document and date  
Agreement on Trade -related Intellectual Property Rights (TRIPs)  
Article  63.2  Laws and regulations  IP/N/1/VUT/1, 10/10/2 014 
 Copyright & Related Rights Act No.  42 of 
2000 IP/N/1/VUT/C/1, 22/10/2014  
 Berne Convention for the Protection of 
Literary and Artistic Works (Ratification) 
Act No.  16 of 2012  IP/N/1/VUT/C/2, 22/10/2014  
 Designs Act No. 3 of 2003  IP/N/1/VUT/D/1, 22/10/2014  
 Geographical  Indications (Wine) Act No. 53 
of 2000 IP/N/1/VUT/G/1, 22/10/2014  
 Circuit Layouts Act No.  51 of 2000  IP/N/1/VUT/L/1, 22/10/2014  
 Convention Establishing the World 
Intellectual Property Organization 
(Ratification) Act No. 13 of 2012  IP/N/1/VUT/O/1, 18/11/2014  
 Patent Act No.  2 of 2003  IP/N/1/VUT/P/1, 22/10/2014  
 Trademarks Act No.  1 of 2003  IP/N/1/VUT/T/1, 22/10/2014  
 Trademarks Act No.  1 of 2003 – 
Declaration of Convention Countries Order 
No. 40 of 2012  IP/N/1/VUT/T/2, 22/10/2014  
 Trademarks for Goods and Services (Fees) 
Regulation (Amendment) Order No.  116 IP/N/1/VUT/T/3, 22/10/2014  
 Trade Secrets Act No.  52 of 2000  IP/N/1/VUT/U/1, 22/10/2014  
Source:  Vanuatu's  notifications to the WTO.  
2.3.2   Regional and preferential agreements  
2.20.   Vanuatu is party to some reciprocal regional trade agreements (RTAs), and it also benefits 
from some non -reciprocal preferential trade arrangements (PTAs) including the Generalized System 
of Preferences (GSP) offered by some WTO Mem bers. Australia and New Zealand provide duty -free 
and quota -free market access to Vanuatu exports under the South Pacific Regional Trade and 
Economic Cooperation Agreement (SPARTECA), while the European Union provides duty -free and 
quota -free access to Vanuatu exports under the Everything -But-Arms (EBA) initiative and the GSP.  
2.3.2.1   Regional trade agreements (reciprocal)  
2.21.   Vanuatu has engaged in RTAs, including: the Melanesian Spea rhead Group (MSG) Trade 
Agreement, the Pacific Island Countries Trade Agreement (PICTA), and the Pacific Agreement on 
Closer Economic Relations Plus (PACER Plus). PACER Plus has not yet entered into force (Table  2.3). 
Table 2.3 Overview of Vanuatu regional trade agreements, 2018  
RTAs  Details  
MSG Trade Agreement  
Parties  Fiji, Papua New Guinea, the Solomon Islands  and Vanuatu  
Date of signature/entry into force  22 July 1993/1 January 1994  
Date of WTO notification and legal coverage  3 August 1999  
Enabling Clause  
Year of tariff elimination by Vanuatu  2012 
Services covered  No. The MSGTA3 was extended to cover trade in services, 
labour mobility, and cross -border investment.  
WTO consideration status  Summary Fact Sheet (goods) distributed  
Related WTO documents  WT/COMTD/N/9 (7 Oct ober 1999), WT/COMTD/21 
(7 October 1999)  
PICTA  
Parties  Cook Islands, Fiji, Kiribati, Federated States of Micronesia, 
Nauru, Niue, Papua New Guinea, Samoa, Solomon Islands, 
Tonga, Tuvalu and Vanuatu,  
Date of signature/entry into force  18 August 2001/13 April 2003  
Date of WTO notification and legal coverage  28 August 2008  
Enabling Clause  
End of implementation period  2021 
Services covered  No. It is expected that the coverage will expand to include 
trade in services, movement of capital and labour  
WTO consideration status  Factual presentation not distributed  
Related WTO documents  WT/COMTD/N/29 (17 September 2008)  WT/TPR/S/378 /Rev.1  • Vanuatu  
 
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  RTAs  Details  
PACER Plus  
Parties  Australia, New Zealand, and Pacific Island countries 
including Vanuatu  
Date of signature/entry into force  Vanuatu signed in September 2017  
Date of WTO notification and legal coverage  Not in force  
Transition for full implementation  25 years after 2017 for non -LDCs, and from 2028 for LDCs  
Services covered  Yes. Covering goods, services, investment, labour, SPS, 
and aid.  
WTO consideration status  N.A.  
Related WTO documents  N.A. 
Source:  WTO Secretariat.  
2.3.2.1.1   MSG Trade Agreement  
2.22.   The members of the MSG Trade Agreement include Fiji, P apua New Guinea , the Solomon 
Islands  and Vanuatu . In 2016, the Agreement was revised with the intention of extending the 
coverage of goods to those cov ering trade in services, labour mobility, and cross -border investment. 
Vanuatu has not signed the revised Agreement.  
2.23.   Under the current MSG Trade Agreement that Vanuatu has signed , tariffs are eliminated on 
all products originating and exported from other parties, with the exception of wines, spirits, and 
tobacco. Parties committed that no quantitative import restrictions are applied (except for 
BOP reasons) and no new export prohibitions or restrictions are imposed. Vanuatu authorities 
confirm that no such  measures have been applied to date. The authorities state that, within the MSG 
countries, Fiji is the main destination for Vanuatu's exports, followed by Papua New Guinea and the 
Solomon Islands.  
2.3.2.1.2   PICTA  
2.24.   PICTA is a trade agreement among the Forum Island cou ntries (FICs), and is intended to 
gradually establish a free trade area among the 14 FICs. PICTA entered into force in 2003 after six 
FICs ratified it; Vanuatu signed the Agreement in 2001, ratified it in 2005, and it entered into force 
on 21 July 2005. Am endments to PICTA have been agreed but have not entered into force through 
formal acceptance by all parties.13 PICTA covers trade in goods, with the exception of alcohol and 
tobacco products, government procurement rules, dangerous goods such as explosives,  and other 
restrictions to protect human or animal health.  
2.25.   Under PICTA, its members are to eliminate tariffs on intra -regional trade by 2021. Tariffs on 
"non-excepted" goods were to be removed by 2017 (2021 for LDCs including Vanuatu); and tariffs 
on "exc epted products" (i.e. goods on a negative list) by 2021. For Vanuatu, the excepted products 
concern 18 tariff lines (HS eight -digit level): meat and edible offal; birds eggs; canned beef; fruit 
juices; ice cream; paints and varnishes; pigments used to manu facture paint, and dyes; some 
fibreglass tanks; toilet paper; fibreglass boats; wooden furniture; plastic furniture; and prefabricated 
buildings. Among them, 14 lines are subject to ad valorem  tariff rates, ranging from 25% to 50%; 
and 4 lines are subject to non -ad valorem  tariff rates (VT 350/litre).14 The authorities state that, 
apart from the list of "excepted goods", tariffs on other goods originating in PICTA countries enter 
Vanuatu duty free.  
2.26.   FICs are encouraged to convert specific tariffs to ad valorem  rates by the start of the 
scheduled reductions. Any remaining non -ad valorem  duties were to be phased out by 2017. Trade 
barriers other than tariffs, such as quotas, must be eliminated immediately on trade between the 
FICs.15 The authorities state t hat Vanuatu has converted all specific duties to ad valorem  duties, and 
it does not impose any import quotas.  
2.27.   Under the PICTA framework, negotiations on trade in services were completed in 2012 when 
12 of the 14 FICs signed a Services Protocol, which has n ot yet entered into force. The Protocol 
stipulates that parties will provide each other with preferential treatment in trade in services, in the 
                                                
13 WTO notification WT/COMTD/N/29 , 17 September 2008.  
14 WTO document WT/ACC/VUT/17, Annex 1, 11 May 2011, p.48.  
15 Pacific Islands Forum Secretariat online information. Viewed at: https://www.forumsec.org/ . WT/TPR/S/378 /Rev.1  • Vanuatu  
 
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  areas of professional, telecommunications, construction, financial, tourism and transportation 
services. Vanuat u participated in the negotiation, but has not ratified the amendments on the 
Protocol.  
2.28.   All MSG Trade Agreement members are signatories to PICTA. Under PICTA, the signatories 
are allowed to continue to reduce barriers among themselves at a faster pace tha n is provided under 
PICTA.  
2.3.2.1.3   PACER and PACER Plus  
2.29.   In August 2001, the Pacific Agreement on Closer Economic Relations (PACER) was signed, 
and it entered into force in August 2002. PACER is open to any Pacific Island country or territory, 
and it is an umbrella  agreement  between members of the Pacific Island Forum (PIF) and Australia 
and New Zealand. PACER provides a framework for the development of trade cooperation and 
gradual integration, to facilitate the PIF economies to gradually become part of a single re gional 
market.  
2.30.   In September 2017, Vanuatu signed PACER Plus, an FTA involving Australia, New Zealand 
and Pacific Island countries. PACER Plus , which has not entered into force, is a reciprocal RTA and 
is to replace SPARTECA , a non-reciprocal  agreement . PACER Plus covers trade in goods, trade in 
services, investment, labour, SPS measures, aid and other issues. The non -LDC signatories were to 
start reducing tariff rates from 2017 and must lower their tariff rates to zero by 25 years after 2017. 
LDCs in the r egion, i.e. Kiribati, Solomon Islands, Tuvalu, and Vanuatu, have a delayed timetable 
for tariff reductions: they commence lowering their tariffs from 2028, unless the country graduates 
from LDC status.  
2.3.3   Other agreements and arrangements  
2.31.   Vanuatu is also a b eneficiary of a number of non-reciprocal preferential trade arrangements . 
It benefits from GSPs from Australia, Canada, the European Union, Iceland, Japan, Kazakhstan, New 
Zealand, the Russian Federation, Switzerland, Turkey, and the United States. As an L DC, it also 
benefits from duty -free treatment from Chile; China; India; Korea, Republic of; Kyrgyz  Republic; 
Chinese Taipei; Tajikistan; and Thailand.16 The EBA Agreement had resulted in some exports from 
Vanuatu to the EU market, notably of coconut oil.17  
2.32.   In addition, under SPARTECA, a non -reciprocal trade agreement entered into force in 1981 ; 
Australia and New Zealand provide duty -free and quota -free access to all products  originating in the 
14 FICs, except sugar in the case of Australia. SPARTECA also inc ludes provisions for economic and 
technical cooperation, and safeguard provisions relating to dumping and subsidies and suspension 
of obligations. Rules of origin generally require at least 50% of the product's total factory cost to be 
from SPARTECA partie s. 
2.33.   However, unilateral tariff reductions in Australia and New Zealand may lead to erosion of tariff 
preferences, and hence the declined relevance and importance of SPARTECA on exports from 
Vanuatu. The authorities indicate that Vanuatu has not actively uti lized the SPARTECA preferences.  
2.34.   Vanuatu joined the PIF in 1982. This is an inter -governmental organization that aims to 
increase sustainable regional trade (goods and services) and investment to promote pro -poor 
economic growth by lowering trade barriers,  including both physical barriers (e.g. borders) and 
technical barriers (e.g. quarantine, import taxes and passport requirements).  
2.35.   Vanuatu has signed technical cooperation agreements with Fiji and Papua New Guinea, a 
technical aid cooperation agreement wit h New Caledonia, and an Agreement on Economic and 
Technical Cooperation with China. The Australia -Vanuatu Partnership Development Agreement was 
signed in 2009.18  
                                                
16 WTO online information. Viewed at: http://ptadb.wto.org/Country.aspx?code=548 . 
17 WTO document WT/ACC/VUT/17, Annex 1, 11 May 2011, p.29.  
18 WTO document WT/ACC/VUT/17, Annex 1, 11 May 2011, p.29.  WT/TPR/S/378 /Rev.1  • Vanuatu  
 
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  2.4  Investment Regime  
2.4.1   Business licence  
2.36.   Legislation regulating the business environment includes th e Business Licence Act, the 
Vanuatu Foreign Investment Promotion Act, the Industrial Development Act, and the Labour 
(Work  Permit) Act.19  
2.37.   The Business Licence Act defined 11 classes of business licences , and a number of 
sub-categories within these classes (Table 2.4). Vanuatu has no special category of business licence 
for franchising, although its legislation does not prohibit local or foreign participation in franchising. 
Licensing authorities include the Director of Customs and Inland Revenue, provincial  governme nts, 
and the Minister of Finance.20 Exporters of goods do not require business licences.  Those who import 
goods, re -assemble and repackage them for export require a business licence.  
Table 2.4 Selected categories of business licences  
Category  Description  Fee  
Category D1  Importers licence:  
Required for direct importation for resale (without 
transformation), wholesale or retail , including acting as 
agent in buying or selling of any merchandise to other 
businesses.  Annual fee VT 10,000 
(US$100)  
Category D2  Retailer or wholesaler licence:  
Required for wholesalers or retailers, excluding open -air 
vendors and mobile shops  Annual fee ranges from 
VT 20,000 (US$200) to 
VT 1 million (US$10,000), 
depending on the gross 
turnover of the business.  
An additional VT 100,000 
(US$1,000) was levied on 
every non -citizen principal or 
partner engaged in category 
D2 business.  
Non-citizens and non -
resident foreign investors pay 
an additional annual fee of 
VT 100,000 (US$1,000) for 
the processing of the 
investment application.  
Category D5  Licence required for open -air vendors and mobile shops   
Category B  Licences required for manufacturing industries and 
trade:  
Required for the importation of materials and supplies 
used for manufacturing without a D1 licence.  
These enterprises are also allowed to sell their output, 
wholesale or retail, without a D2 licence, but only 
through one outlet – at the business headquarter s or 
adjacent premises.   
Source:  WTO document WT/ACC/VUT/17, 11 May 2011.  
2.38.   The Business Licence Act was amended in 2010 and became the Business Licence 
(Amendment) Act. In accordance with the amended Act, a new category of business l icence was 
issued to allow holders to engage in the import and export of goods without engaging in 
manufacturing or wholesale/retail (distribution).  
2.39.   Business licence fees are charged according to the type of business activity and the turnover 
of the busine ss. Fees are exempted for: artists and sculptors; planters, farmers, dairy farmers, 
market and other gardeners, stock -breeders, and vegetable and fruit hawkers; and fishermen, if the 
business gross turnover is less than VT 10 million. The following busines ses are also exempted from 
the fee: export; credit unions registered under the Credit Union Act; religious missions; teachers 
                                                
19 Other relevant legislation includes the Immigration Act, the Vanuatu National Provident Fund Act, and 
the Companies Act.  
20 Customs online information. Viewed at: https://customsinlandrevenue.gov.vu/index.php /en/inland -
revenue/rates -taxes/business -license . WT/TPR/S/378 /Rev.1  • Vanuatu  
 
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  and professors in schools and institutions not conducted for profits; non -profit clubs; and charitable 
organizations.  
2.40.   The licence  is valid for one year, renewable before 31 January of the following year. Renewal 
of approval from the Vanuatu Investment Promotion Authority (VIPA) is required for non-citizens. 
Any foreign investor wishing to invest in Vanuatu must obtain a certificate from VIPA, and a 
certificate of business name or a certificate of incorporation from the Vanuatu Financial Service 
Commission (VFSC), before applying for a business licence issued by the Department of Customs 
and Inland Revenue ( Section 2.4.2 ). 
2.41.   According t o the Industrial Development Act No. 19 of 2014, industrial undertakings and 
internationally traded services in Vanuatu may be exempted from import tariffs , once they have a 
valid Industrial Permit. To apply, businesses must: obtain a certificate issued by  VIPA and a 
Manufacturing Business Licence (Category B) from the relevant authorities; register with the VFSC; 
and pay a fee of VT 2,000. Once all the requirements are met, the Department of Industry may 
issue a permit which is valid for five years.  
2.42.   The is suance of work permits is regulated under the Labour (Work Permit) Act,  which contains 
a list of professions reserved for Ni -Vanuatus, such as able seaman/ordinary seaman; bricklayer; 
bus driver; clerical supervisor; dock worker; driver; hotel receptionist ; housemaid; lorry or van 
driver; mason; painter; portable saw -miller; receptionist; street vendor; typist and waitress/waiter.  
2.4.2   Foreign direct investment (FDI)  
2.43.   Fostering an open, transparent and conducive national policy environment for investment and 
promoting coherence in national and international investment policy is Vanuatu's key policy objective 
regarding FDI.21 
2.44.   Legislation currently in force concerning FDI in Vanuatu is the Foreign Investment Promotion 
Act, which entered into force in 2010. VIPA, established in 1998, became a statutory body in 2008 
under the Ministry of Tourism, Trade, Commerce, Industry and Ni -Vanuatu Business. VIPA aims to 
facilitate, promote and foster foreign investment in Vanuatu. It was established as an institution 
aimed at developing guidelines to promote FDI with a view to improving private sector growth and 
employment.22 It both promotes and regulates FDI inflow in Vanuatu through the registration of new 
and existing foreign investment. It is a liaising body between the Gov ernment and the private sector 
and other relevant agencies.  
2.45.   In addition to the Foreign Investment Promotion Act, investors in some services sectors  are 
also subject to legislation regulating these individual sectors (Section 4.3).  
2.46.   Foreign investment is open for most activities other than those on the Reserved and the 
Prohibited lists (Tables 2.5 and 2.6). For activities open to foreign investment, there are no foreign 
investment equity restrictions . 
Table 2.5 Business activities reserved only for Ni -Vanuatu citizens  
Reserved sectors  
Trade  
Export of sandalwood in stick and chip form, harvested from natural forest s 
Local trading of sandalwood, harvested from natural forest s 
Export of seeds and other minor forest products, harvested from natural forest s 
Second hand clothing shops  
Export of kava in root, chip and stick form  
Manufacturing  
Manufacture of handcraft s and artefacts  
Services  
Kava bars  
Open -air vendors, door -to-door sales, and mobile shops  
                                                
21 VIPA online information. Viewed at: http://www.investvanuatu.org/wp/investing/government -
support/ . 
22 VIPA online information. V iewed at: http://www.investvanuatu.org/wp/aboutvipa/our -history -
achievements/ . WT/TPR/S/378 /Rev.1  • Vanuatu  
 
- 27 - 
 
  Reserved sectors  
Road transport operators – the provision of any taxi or bus service, including airport road transfers and any 
other road transport service involving the guest of a hotel or other accommodation business  
Private security services including security guards  
Electricians and electro -technicians  
Residential building and construction  
Commercial cultural feasts  
Fishing  
Commercial fishing in Vanuatu's inshore waters as defined by the Maritime Zones Act (i.e. archipelagic 
waters including the first six nautical miles from land)  
Other  
Small scale production of sawn timber from natural forest s using a portable sawmill (i.e. can be physically 
moved from one location to another in the forest)  
Source:  Information provided by the authorities.  
2.47.   Some business activities are open to foreign investors only as long as the operation is 
sufficiently large . Foreign investment in these sectors are allowed if the investor is able to 
demonstrate over time that they exceed the specified minimum threshold.  
Table 2.6 Reserved activities open to foreign investment abo ve a minimum threshold  
Activity  Minimum threshold  
Tourism   
Tour agent (business that sells tourism services)  Annual turnover of VT 20 million  
Tour operator (business that packages two or more 
travel services into a single product for the 
consumer, i.e. transport, accommodation, meals, 
entertainment, sightseeing)  Investment of VT 20 million  
Guest house (business that provides simple 
accommodation using private or semi -private rooms 
and offers limited guest services)  50 beds or 10 rooms or annual sale turnover of 
VT 20 million  
Bungalows (business that provides island -style 
accommodation in detached or semi -detached 
dwellings)  Annual turnover of VT 30 million  
Hotels and motels (business that provides 
accommodation using private rooms and offers 
ameniti es such as food, alcohol and other guest 
services)  Investment of VT 10 million, or annual turnover of 
VT 20 million  
Other services   
Retail shops including general merchandise trading 
shops (excluding speciality shops)  Annual turnover of VT 30 million  
Coastal shipping (excluding vessels that exclusively 
provide transport to foreign tourists)  Vessel size with carrying capacity of 80 tonnes  
Other professional or business service   
Real estate agent s; property managers; land and 
property developers; legal practitioners; accounting 
practitioners; engineering practitioners and 
services; architectural practitioners and services; 
surveyors and draftsmen; core drilling, assaying 
geological and prospecting support services; 
business and financial services and consultants; 
book keeping services; management services and 
consultants; advertising and marketing services and 
consultants; photocopying and duplicating services; 
typing and secretarial services; langu age translation 
and interpreting services; business security and 
protective services; debt collection and credit rating 
services; and other business and administrative 
services and agencies  Annual turnover of VT 5 million  
Source:  Information provided by t he authorities.  
2.48.   The authorities are in the process of developing a National Investment Policy  with a view to  
ensur ing coherence in existing and future sector al policies . VIPA has conducted reforms to improve 
FDI inflows into Vanuatu. For example, in 2016, it removed the VT 5 million bank confirmation 
requirement for investors. In the same year, it also implemented a five -year Foreign Investor 
Approval Certificate  (FIAC) that complements the five -year residency approval for an investor by WT/TPR/S/378 /Rev.1  • Vanuatu  
 
- 28 - 
 
  the Department of I mmigration. The VIPA application fee was increased from VT 25,000 to 
VT 120,000.  
2.49.   All land belongs to the indigenous population of Vanuatu. The Constitution stipulated that no 
land in Vanuatu can be owned by a foreigner. Foreigners have the right to lease l and for a period of 
75 years, in accordance with the Land Lease Act [CAP. 163]. A "subsidiary land rent payment" of 
2-4% of gross annual turnover, paid to the custom landowners, applies to tourism leases.  
2.50.   The Foreign Investment Promotion Act sets out procedures for foreign investors to conduct 
businesses in Vanuatu (Chart 2.1).  
Chart 2.1 Registration process  
 
Source:  Information provided by VIPA.  
2.51.   Applicants m ust submit their application in writing to VIPA, with the following information:  
a. details of the investor(s);  
b. proposed investment and its location;  
c. type of business licence required;  
d. amount and source of capital expenditure to be incurred;  
e. projected re turn on the investment during the first three years; and  
f. expected employment to be generated during the first three years of operation.  
2.52.   The time and fees required are different for each step in the process (Table  2.7). 
Source:  Information provided by the VIPA.Chart 2.[registration process]
VFSC
Apply for a VIPA FIACVIPA
Department of Customs Department of LabourDepartment of
Immigration
Register for a 
business/company nameApply for a 
residency permit
Vanuatu National 
Provident FundDepartment of Customs
Register the
company and employeesRegister for 
VATObtain a
business licenceApply for a work
permit for foreign workersWT/TPR/S/378 /Rev.1  • Vanuatu  
 
- 29 - 
 
  Table 2.7 FDI investment procedure  
Procedure  Time to 
complete  Associated cost  
FIAC 15 days  VT 120,000  
Company incorporation  3-5 days  Based on authorized share capital:  
- Greater or equal to VT  30,000 if the 
authorized share capital is VT 35 million or 
less; 
- less than or equal to VT 250,000 if the 
authorized share capital is VT 300 million  
Residency permit  5 days  VT 57,600 per year  
Work permit  5 days  VT 210,000 per year  
Business licence  1-2 days  Greater or equal to VT 20,000 per business  
category if  the earnings are less than 
VT 10 million per year  
VAT registration  2–3 days  No fee  
Registration with the National Provident 
Fund 3-4 days  No fee  
Source:  Information provided by the authorities.  
2.53.   VIPA is governed by a Board of Directors, which makes the overall decisions to approve 
investment application proposals. The Board evaluates the application, and may require the investor 
to submit an environment impact assessment. If a foreign investment p roject requires leasing land, 
a certificate to negotiate issued by the Minister of Lands will be needed, with which applicants may 
negotiate for a lease on a plot of custom land.  
2.54.   The length of stay allowed for foreigners with a residency permit is linked to investment in 
Vanuatu:  
a. An investment of VT 5 million (US$50,000) entitle s the foreign investor to a one -year 
residenc y permit;  
b. A higher initial investment, and an undertaking to maintain the investment at this level, 
ensure s the foreign investor a longer residenc y permit;  
c. A maximum -length (15 years) residenc y permit is issued to foreigners having invested 
more than VT 100 million (US$1 million), subject to annual renewal.  
2.55.   Vanuatu does not have complex investment incentive sc hemes. The business environment 
has the following features:23  
a. No income or company tax for residents , including foreigners;  
b. No capital gains tax;  
c. No inheritance tax;  
d. No foreign exchange controls or reporting requirements regarding  the movement of funds;  
e. Exemptions of import tariffs on tourism, manufacturing and processing, and mineral 
exploration; and  
f. VAT levied at a rate of 15%.  
2.56.   In September 2017, an Investment Service Centre, which functions as a one -stop shop, was 
established by VIPA on a pilot basis so that investment information may be gathered in one location. 
Main government units involved in the one -stop shop service include the departments of Immigration 
                                                
23 VIPA online information. Viewed at: http://www.investvanuatu.org/wp/investing/tax/ . WT/TPR/S/378 /Rev.1  • Vanuatu  
 
- 30 - 
 
  and Labour, and the Vanuatu Tourism Office.24 The authorities indicate that much work and effo rt 
are needed for this service centre to be fully functional.  
2.57.   Vanuatu ranks 90th out of 190 economies on the World Bank's Ease of Doing Business Index 
in 2018.25 It ranks high in getting credit (29th) and paying taxes (57th), but low in dealing with 
constru ction permits (151st), trading across borders (143rd), enforcing contracts (135th), and starting 
a business (128th). It takes around 18 days to set up a limited liability company, involving seven 
steps and costing 44% of per capita income.  
2.58.   Vanuatu does not  have any bilateral or regional investment promotion or protection 
agreements.26 Vanuatu has not signed any double taxation avoidance treaties (DTAs) as the country 
applies no income tax. Disputes may be resolved through either the mediation procedure or th e legal 
court procedure.  
 
 
 
                                                
24 VIPA online information. Viewed at: http://www.investvanuat u.org/wp/vipa -one-stop-shop-service -
commences/ . 
25 World Bank (2017), Doing Business 2018  Vanuatu . Viewed at: 
http://documents.worldbank.org/curat ed/en/953481510223151566/pdf/121108 -WP-PUBLIC -DB18 -VUT.pdf . 
26 It negotiated bilateral investment treaties (BITs) with China (2006) and the United Kingdom (2003), 
but has not signed them.  WT/TPR/S/378 /Rev.1  • Vanuatu  
 
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  3  TRADE  POLICIES AND PRACTI CES BY MEASURE  
3.1  Measures Directly Affecting Imports  
3.1.1   Customs procedures, valuation, and requirements  
3.1.  All imported goods are subject to customs control. I mporters are required to register in 
ASYCUDA World, where they are assigned a customs  identification number (CIN) . Foreign companies 
or individuals can apply for a CIN. Imported goods must be accompanied by: an import declaration, 
the commercial invoice, a packing list, shipping documents (airway bills or bills of lading), and an 
import pe rmit or licence if applicable. An import declaration is required for all imports above 
VT 10,000. The declaration can be submitted electronically; the fee is VT 1,000 per declaration.  
Vanuatu does not require pre -shipment inspection.  
3.2.  Most imports arrive by  sea. Customs duties and internal taxes are collected by Customs and 
Inland Revenue  (CIR), which has  offices in Port Vila , Luganville a nd all provincial centre s. The CIR 
has a total  of 90 staff. The use of a licensed customs broker is not mandatory. Howeve r, according 
to the authorities, in practice, only customs brokers and licenced personnel have access to the 
electronic system.  There are 15  customs brokers in Vanuatu, most of whom are located in Port Vila.  
3.3.  The CIR maintains an electronic risk management  system to identify high -risk shipments. 
Under these procedures, imports are assigned to one of three risk levels: red, yellow , or green. The 
level of risk is determined by the type of product, the country of origin, and past records of the 
importer.  Updat es to the system are made on a quarterly basis.  
3.4.  Shipments classified as high risk (red) are subject to physical examination and documentary 
review. Medium -risk shipments (yellow) are subject to documentary review. Low -risk shipments 
(green) are not subject  to physical examination or documentary review, unless randomly selected. 
About 26% of consignments are directed to the red channel, and another 26% to the yellow channel , 
while 48% are allocated to the green channel. The authorities indicate that an incre ase in the share 
of the green channel is a policy objective.  
3.5.  All importers, customs brokers and manufacturers may apply to the CIR  for an advance  ruling 
on the classification of goods, the applicability of an exemption or concession, the country of origin 
of particular goods, or the valuation rule to apply to particular goods.  A fee of VT  5,000 is payable 
for each application.  A ruling is issued by the CIR within 40 days of the date of receipt of the request . 
For perishable goods, quick -release provisions can also apply.  
3.6.  According to the authorities, the average time for customs clearance is three days and seven 
hours, as shown by a time release study carried out in 2017. The authorities indicate that a number 
of steps have been taken since then to reduce r elease times, including the inauguration of a new 
wharf and the introduction of ASYCUDA World, and that a new time release study is planned for 
2018.  
3.7.  Vanuatu adopted the Import Duties (Consolidation) (Amendment) Act of 2013 No. 29 to give 
effect to the WT O's Customs Valuation Agreement. The Act has not yet been notified to the WTO. In 
principle, the primary method of valuation is the transaction value of the imported goods; when 
necessary, recourse to alternative methods follows the hierarchy set out in th e WTO Customs 
Valuation Agreement. 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 Vanuatu. The 
authorities indicate that stand -alone legislation  on customs valuation is planned.  
3.8.  In May 2014, Vanuatu benefitted from a WTO seminar to assess its needs with regards to trade 
facilitation and to help determine its category A commitments. Vanuatu notified its category A, B 
and C commitments in January 2 018.1 Of its commitments under the Trade Facilitation Agreement 
(TFA), 12  are in category A, 12 in category B, and 12 in category C. As at March 2018, Vanuatu had 
not ratified the TFA.  Pursuant to Article 195 of the Customs Act, decisions by customs may be  
appealed to a Customs Appeal tribunal within 30 days of receiving the administrative decision. The 
                                                
1 WTO document G/TFA/N/VUT/1, 10 January 2018.  WT/TPR/S/378 /Rev.1  • Vanuatu  
 
- 32 - 
 
  authorities indicate that, as at mid -2018, no formal appeal procedures were in place, but that the 
drafting thereof is underway.  
3.1.2   Rules of origin  
3.9.  Vanuatu doe s not maintain non -preferential rules of origin. As a party to the MSG Trade 
Agreement, the PICTA , and PACER Plus , Vanuatu applies preferential rules of origin.  
3.10.   Goods containing inputs from non -MSG countries qualify for MSG preferences if they have 
been " sufficiently worked or processed". This criterion is met when the goods are classified under a 
different four -digit tariff heading from their non -MSG inputs.  
3.11.   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.  
3.12.   Under PACER Plus, the good must undergo  a change of  tariff classification , or at least 40 % of 
value -adding must take  place within the PACER Plus membership, with the last process of produc tion 
taking place in a PACER Plus  member.  
3.13.   To qualify for preferential treatment, importers must submit to Customs a certificate of origin 
issued by the competent authority of the exporting country.  
3.1.3   Tariffs  
3.1.3.1   Applied MFN tariffs  
3.14.   Vanuatu grants at least MFN tariff treatment to all its trading partners.  
3.15.   The 2018 tariff schedule comprises 5,502 tariff lines at the eight -digit level (Table 3.1). The 
tariff nomenclature is based on the Harmonized Commodity Description and Coding System (2017). 
The only non -ad val orem tariff rates concern two tariff lines at the eight -digit level (light oils and 
preparations) and involve specific duties; ad valorem  equivalents (AVEs) were provided by the 
authorities. The simple average applied MFN rate increased slightly during the  review period, from 
9.2% in 2012 to 9.3% in 2018, mainly due to the transposition to HS 2017. Vanuatu does not apply 
seasonal or variable tariffs, or tariff quotas. Tariffs apply on the c.i.f. value of goods.  
Table 3.1 Summary analysis of Vanuatu's MFN tariff, 2018  
 Number 
of lines  Average 
(%) Range 
(%) Coefficient 
of 
variation  Duty 
free 
(%) 
Total  5,502  9.3 0-75 1.0 26.0 
HS 01 -24 996 17.2 0-75 0.7 8.2 
HS 25 -97 4,536  7.6 0-55 1.0 29.8 
By WTO category       
WTO agricultural products  768 16.9 0-75 0.8 10.9 
 Animals and products thereof  117 19.5 0-30 0.5 4.3 
 Dairy products  22 14.5 5-15 0.1 0.0 
 Fruit, vegetables, and plants  212 22.6 0-30 0.4 7.1 
 Coffee and tea  24 23.3 15-30 0.3 0.0 
 Cereals and preparations  91 7.5 0-30 1.0 31.9 
 Oils seeds, fats, oil and their products  83 6.6 0-10 0.5 14.5 
 Sugars and confectionary  17 10.0 10-10 0.0 0.0 
 Beverages, spirits and tobacco  58 37.0 0-75 0.5 3.4 
 Cotton  5 10.0 10-10 0.0 0.0 
 Other agricultural products, n.e.s.  139 10.5 0-30 0.9 15.1 
WTO non -agricultural products  4,734  8.0 0-55 0.9 28.5 
 Fish and fishery products  265 15.4 0-30 0.3 3.4 WT/TPR/S/378 /Rev.1  • Vanuatu  
 
- 33 - 
 
   Number 
of lines  Average 
(%) Range 
(%) Coefficient 
of 
variation  Duty 
free 
(%) 
 Minerals and metals  907 7.4 0-25 0.8 29.2 
 Chemicals and photographic supplies  939 5.3 0-30 1.2 35.3 
 Wood, pulp, paper and furniture  286 12.1 0-30 0.7 21.0 
 Textiles  590 7.5 0-20 0.5 1.9 
 Clothing  224 15.4 15-30 0.2 0.0 
 Leather, rubber, footwear and travel goods  155 7.8 0-30 0.9 27.7 
 Non-electric machinery  539 3.3 0-25 1.6 63.8 
 Electric machinery  262 9.8 0-15 0.6 17.9 
 Transport equipment  171 9.7 0-40 1.0 37.4 
 Non-agricultural products, n.e.s.  380 9.5 0-55 1.3 45.5 
 Petroleum  16 8.1 0-38 1.2 6.3 
By ISIC sector       
 ISIC 1 - Agriculture, hunting and fishing  401 15.0 0-55 0.8 14.5 
 ISIC 2 - Mining  96 3.3 0-15 0.9 38.5 
 ISIC 3 - Manufacturing  5,004  8.9 0-75 1.0 26.7 
 Manufacturing excluding food processing  4,394  7.7 0-55 1.0 29.6 
 ISIC 4 - Electricity  1 0.0 0-0 0.0 100.0  
By stage of processing       
 First stage of processing  770 11.4 0-55 0.9 22.1 
 Semi-processed products  1,808  6.4 0-30 0.8 21.8 
 Fully processed products  2,924  10.5 0-75 0.9 29.7 
By HS section       
 01 Live animals and products  379 15.6 0-30 0.5 5.3 
 02 Vegetable products  310 17.9 0-30 0.7 12.3 
 03 Fats and oils  48 6.5 0-10 0.7 29.2 
 04 Prepared food, beverages and tobacco  229 21.1 0-75 0.6 3.1 
 05 Mineral products  158 3.1 0-38 1.4 47.5 
 06 Chemicals and products thereof  869 5.1 0-30 1.1 30.7 
 07 Plastics, rubber, and articles thereof  215 8.1 0-30 1.0 33.5 
 08 Raw hides and skins, leather, and its products  69 4.1 0-15 1.6 72.5 
 09 Wood and articles of wood  122 14.7 0-30 0.3 5.7 
 10 Pulp of wood, paper and paperboard  143 8.0 0-30 0.8 35.0 
 11 Textiles and textile articles  809 9.5 0-30 0.5 0.1 
 12 Footwear, headgear, etc.  47 14.7 0-15 0.1 2.1 
 13 Articles of stone, plaster, cement  143 11.8 0-25 0.4 11.2 
 14 Precious stones and metals, pearls  53 4.9 0-20 1.8 75.5 
 15 Base metals and articles thereof  565 7.7 0-20 0.7 25.7 
 16 Machinery, electrical equipment, etc.  802 5.5 0-25 1.2 48.5 
 17 Transport equipment  182 9.7 0-40 1.0 37.9 
 18 Precision equipment  210 4.5 0-15 1.5 67.1 
 19 Arms and ammunition  18 52.8 15-55 0.2 0.0 
 20 Miscellaneous manufactured articles  124 13.7 0-30 0.7 18.5 
 21 Works of  art, etc.  7 0.0 0-0 0.0 100.0  
Note:  Including AVEs for two specific rates under petroleum oils.  
Source : WTO Secretariat calculations, based on data received from the authorities.  
3.16.   The coefficient of variation is 1.0, reflecting a relatively low degree of uniformity among rates 
(Table 3.2). The average applied tariff for agriculture (WTO definition) is 16.9%, higher than the 
average for non -agriculture (8.0%). Average tariffs are low est on non -electric machinery (3.3%), 
and highest on beverages, spirits and tobacco (37%).  
3.17.   26% of all tariff lines are duty free. Around 24% of all tariff lines carry an MFN rate of 5%, 
some 16% have a rate of 10%, and around 23% have a rate of 15% (Chart  3.1). The highest 
ad valorem  rates, of 75%, 55%, and 40%, apply on 56 tariff lines comprising tobacco products and WT/TPR/S/378 /Rev.1  • Vanuatu  
 
- 34 - 
 
  alcoholic and non -alcoholic beverages. Tariff escalation exists between semi -processed and fully 
processed goods.  
3.18.   Income derived from import s is an important part of government revenue; in 2017, the 
combined share of tariffs and VAT on imports was equivalent to 47% of total fiscal revenue.  
Table 3.2 Structure of Vanuatu's tariff , 2012 and 2018  
 
2012  2018  Final bounda 
Total number of tariff lines  5,087  5,502  5,502  
Simple average rate (%)  9.2 9.3 40.2 
 HS 01 -24 18.3 17.2 48.5 
 HS 25 -97 7.6 7.6 38.4 
 WTO agricultural products  17.7 16.9 43.6 
 WTO non -agricultural products  7.9 8.0 39.6 
Duty free tariff lines (% of all tariff lines)  25.9 26.0 3.3 
Simple average of dutiable lines only  12.4 12.5 41.5 
Tariff quotas (% of all tariff lines)  0.0 0.0 0.0 
Non-ad valorem tariffs (% of all tariff lines)  0.02b 0.04b 0.0 
Domestic tariff peaks (% of all tariff lines)c 6.0 5.7 0.02d 
International tariff peaks (% of all tariff lines)e 11.1 11.2 96.4 
Nuisance applied rates (% of all tariff lines)f 0.0 0.0 0.0 
Coefficient of variation  1.0 1.0 0.3 
Note:  2012 and 2018 tariff schedules are based on HS07 and HS17 nomenclature, respectively.  
a Final bound rates are based on the 2017 tariff schedule. All tariff lines are bound.  
b In 2012 and 2017, one and two tariff lines under Chapter 27 are specific, respectively. AVEs were 
provided by the authorities and are included in the calculations.  
c Domestic tariff peaks are defined as those exceeding three times the overall simple average applied 
rate. 
d One tariff line (certain grape must) is bound at 210%.  
e International tariff peaks are defined as those exceedi ng 15%.  
f Nuisance rates are those greater than zero, but less than or equal to 2%.  
Source:  WTO calculations, based on data provided by the authorities.  
Chart 3.1 Distribution of MFN tariff rates, 2012 and 201 8 
(Number of tariff lines)  
 
Note:  Excluding one and two specific rates, respectively, for 2012 and 2018. The 2012 tariff is based on  
the HS07 nomenclature; the 2018  tariff is based on HS17. Figures in brackets refer to the 
percentage of total lines.  
Source:  WTO Secretariat calculations, based on data provided by the authorities.  
(25.9%)
(24.5%)
(17.6%)(21.0%)
(4.6%) 
(0.5%)(5.0%)
(0.5%) (0.5%)(0.1%)(26.0%) 
(23.8%)
(16.1%)(22.9%)
(4.8%)
(0.6%)(4.7%)
(0.5%) (0.4%) (0.1%)
02004006008001,0001,2001,4001,600
Duty free 5% 10% 15% 20% 25% 30% 40% 55% 75%Number of tariff linesChart 3.2  Distribution of MFN tariff rates, 2012 and 2018
MFN 2012
Total number of lines:  5,087MFN 2018
Total number of lines: 5,502
Note:  Excluding oneand two specific rates, respectively for 2012 and 2018 .    2012 tariff is based on HS07 nomenclature; 2017 tariff 
is based on HS17.  Figures in brackets refer to the percentage of total lines.
Source:  WTO Secretariat calculations, based on data provided by the authorities.WT/TPR/S/378 /Rev.1  • Vanuatu  
 
- 35 - 
 
  3.1.3.2   Tariff bindings  
3.19.   Vanuatu has bound all of its tariff lines, mostly at rates of 35% (20% of all tariff lines), 40% 
(63% of tariff lines) or 60% (10% of tariff lines). The avera ge final bound rate is 40.2%. 3.3% of 
tariff lines are bound at 0%. The average final bound tariff for agriculture (WTO definition) is 43.6%, 
higher than the average for non -agriculture (39.6%).  
3.20.   In general, applied tariff rates are within their bound rates . For three tariff lines, however, 
the applied rates exceed their bindings (Table 3.3).  
Table 3.3 Products for which applied rates exceed bound rates, 2018  
HS code  Product description  MFN rate  Bound rate  
02071410  Chicken wings, cuts and offal, fresh or chilled  30% 20% 
29397100  Alkaloids, natural or reproduced by synthesis, and their salts, 
ethers, esters and other derivatives – cocaine, ecgonine, 
levometamfetamine, metamfetamine (INN), metamfetamine 
racemate, salts, esters and other derivatives thereof  5% 0% 
29397900  Alkaloids, natural or reproduced by synthesis, and their salts, 
ethers, esters and other derivatives – other  5% 0% 
Source:  Data provided by the authorities.  
3.21.   Vanuatu has bound other duties and charges at zero.  
3.1.3.3   Preferential tariffs  
3.22.   Vanuatu applies preferential tariffs to other members of the MSG, where almost all goods 
originating fro m the other MSG Members (Fiji, Papua New Guinea  and Solomon Islands) are duty 
free. Exception s to this include: all products under HS22 (beverages, spirits and vinegar) except 
items classified under HS2201, 2202, and 2209; all products under  HS24 (tobacco and manufactured 
tobacco substitute s); all products under HS27 (mineral fuels, mineral oils and products of their 
distillation, and bituminous mineral waxes), and cane sugar (HS1701  1300 and 1701 1400 ).  
3.1.3.4   Tariff exemptions and concessions  
3.23.   Part 2(A) of the Annex to the Import Duties (Consolidation)  (Amendment) Act No. 33 of 201 4 
lists the goods that are eligible for import tariff and VAT concessions. Tariff concessions are available 
for goods imported for disabled persons, and medical supplies.  Pursuant to Part 2(B) of the Annex, 
tariff and VAT concessions are also available for commercial samples. Furthermore, raw materials 
for the manufacture of approved goods, and equipment used to establish a new manufacturing 
enterprise, can be imported tar iff-free. Various institutions listed in Part 3 of the Annex are also 
exempt from paying tariffs and VAT on imports, including the Red Cross, registered churches, and 
youth organizations such as the scouts.  
3.24.   In the case of natural disasters, t he Director of  Customs, upon the suggestion of the National 
Disaster Management Office , may grant  duty exemption s to certain  tariff lines, provided that the 
goods are for disaster relief, are  funded by foreign states or international organizations , and are 
intended for free distribution for use in declared disaster areas . According to the authorities, this 
was the case, for example, after Cyclone Pam struck in March 2015.  
3.25.   Revenue forgone (including VAT and excise tax) due to exemptions and concessions amounted 
to VT 1 bi llion in 2013, VT 1.5 billion in 2014, VT 4 billion in 2015 (when Cyclone Pam struck), and 
VT 3.8 billion in 2016.  
3.1.4   Other charges affecting imports  
3.26.   VAT of 15% applies on all goods and services, unless they are exempt or zero -rated. Until 
December 2017, the VAT rate had been 12.5%. The tax applies to imported and domestically 
produced goods alike. On imports, VAT applies on the c.i.f. value of goods plus customs duties. VAT 
on imported goods is payable at the same time as customs duties. Imports are not charg ed VAT if 
they are valued at VT 10,000 or less. The income threshold for companies or individuals paying VAT 
is VT 4 million.  WT/TPR/S/378 /Rev.1  • Vanuatu  
 
- 36 - 
 
  3.27.   The following goods and service are exempt from VAT : financial services, donated goods and 
services sold by non -profit organi zations, residential rental accommodation, and property that has 
been used for residential rental accommodation for at least five years.  
3.28.   The VAT zero rate applies to the international transportation of passengers and goods, and 
goods or services supplied for approved aid projects.  
3.29.   Excise duties apply to alcoholic and certain non -alcoholic beverages, tobacco products, and 
certain firearms (Table 3.4). In addition, all vehicles are subject to a  Vehicle Registration Fee , which  
is 7% of the r etail price excluding V AT, import duty, and road tax . 
Table 3.4 Excise duties, 2018  
Product  HS Code  Excise duty rate  
Waters containing added sugar or 
sweetening matter, or flavoured  2202.10.00  VT 50/litre  
Non-alcoholic beer  2202.91.00  VT 50/litre  
Beer made from malt, less than 
10% by volume of alcohol  2203.00.10  VT 140/litre  
Beer made from malt, 10% by 
volume of alcohol or more  2203.00.20  VT 300/litre  
Wine of fresh grapes  22.04  VT 300/litre  
Vermouth and other fermented 
beverages  22.05 and 22.06  VT 300/litre  
Ethyl alcohol  22.07  VT 200/litre  
Spirits, liqueurs, and other 
spirituous beverages  22.08  VT 200/litre if less than 10% by 
volume of alcohol;  
VT 420/litre if between 10% and 
37% by volume of alcohol;  
VT 1,200/litre if more than 37% 
by volume of alcohol  
Cigars, cheroots and cigarillos,  
containing tobacco  2402.10.00  VT 18,000 per kg  
Cigarettes containing tobacco and 
other  2402.20.00 and 
2402.20.90  VT 16 per piece  
Other manufactured tobacco and  
manufactured tobacco substitutes;  
"homogenised" or "reconstituted"  
tobacco; tobacco extracts and  
essences  24.03  VT 4,000 per kg  
Revolvers and pistols  9302.00.00  VT / 10,000 per piece  
Source:  Information provided by the authorities.  
3.1.5   Import prohibitions, restrictions, and licensing  
3.30.   Pursuant to the Customs (Prohibited Import) Regulations Order No.  115 of 2014 , the following 
items are subject to an import prohibition: (1) absinthe; (2) beef in any form originating from 
Europe, as set out under the Food (Control) Act [CAP 228]  (Prohibition of Beef from Europe Order 
No. 53 of 2001); (3) copra; (4) any obscene material as described in the Obscenity Act [CAP 73]; 
(5) any offensive weapon as defined in the Restriction of Offensive Weapons Act [CAP 54] of 1969; 
(6) any ozone -depleti ng substances and synthetic greenhouse gases, as set out in the Ozone Layer 
Protection Act No. 27 of 2010; (7) wine with a false description and presentation, as provided for in 
the Geographical Indications (Wine) Act [CAP 269]; and (8) various chemicals2. In addition, the 
Customs Act No . 7 of 2013 prohibits the importation of goods infringing intellectual property rights.  
3.31.   Certain goods are subject to import licensing (Table 3.5). The licences specify the conditions 
under which a product may be imported. Va nuatu has not notified its import licensing procedures to 
the WTO, nor has it answered the questionnaire on import licensing. No information was made 
available on the cost of each permit or licence.  
                                                
2 Hydrochlorofluorocar bons, methyl bromide , bromochloromethane , hydrofluorocarbons , and 
perfluorocarbons.  WT/TPR/S/378 /Rev.1  • Vanuatu  
 
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  Table 3.5 Import restrictions  
 Goods restricted from importation  Authority responsible for 
issuing import permit or license  
(a) Alcohol – Alcohol Importation Act [CAP 8]  Minister of Finance and Economic 
Management  
(b) Ammunition – Firearms Act [CAP 198]  Firearm Licensing Officer, Vanuatu 
Police Force  
(c) Animals and biological products - Animal Importation and 
Quarantine Act [CAP 201]  Principle Veterinary Officer  
(d) Currency or negotiable bearer instruments not less than the 
equivalent of VT  1,000,000 - Proceeds of Crime Act [CAP 284]  Financial Intelligence Unit  
(e) Dangerous Drugs Act [CAP 12]  Minister of Health  
(f) Devices and nets designed for trapping birds - Wild Bird 
(Protection) Act [CAP 30]  Director of the Department of 
Agriculture  
(g) Explosives - Explosives Act [CAP 6]  Minister of Internal Affairs  
(h) Fauna and flora - International Trade (Fauna and Flora) Act 
[CAP 210]  Minister of Lands  
(i) Firearms - Firearms Act [CAP 198]  Firearms Licensing Officer, Vanuatu 
Police Force  
(j) Food which is considered:   
i. injurious to health;  
ii. unfit for human consumption;  
iii. unclean, putrid, decayed or diseased  Chief Food Authority  
(k) Right-hand drive motor vehicles - Import of Motor Vehicles 
(Control) Act [CAP 221]  Minister of Internal Affairs  
(l) Pesticides - Pesticides (Control) Act [CAP 226]  Pesticides Committee  
(m) Plants and plant products - Plant Protection Act [CAP 239]  Minister of Agriculture  
(n) Whiskey or product purporting to be whiskey that has been 
stored in wood for more  than three years - Immature Whiskey 
(Prohibition) Act [CAP 7]  Director of Customs  
Source:  Information provided by the authorities .  
3.1.6   Anti-dumping, countervailing, and safeguard measures  
3.32.   The Import Duties (Consolidation) (Amendment) Act of 2013 No. 29 is the legal basis for 
anti-dumping , countervailing , or safeguard  measures. The legislation has not been notified to WTO.  
3.33.   The designated authority responsible for the investigation is the Director of the department 
responsible for trade. The Act does not establish how dumping margins are calculated. If the 
authority has reasonable cause to suspect that there is dumping, subsidization or increased imports 
of the goods, it may, by a notice published in the Gazette, declare that an investigation be carried 
out. Such a notice may direct the customs authority to impose provisional payments for an amount 
and a period specified in that notice. The authority may repeal or amend the notice at any time, with 
or without retrospective effect.  
3.34.   Decisions on definite meas ures are taken by the Council of Ministers; they must also be 
published in the Gazette. The duration of the measure is decided by the Minister of Trade. For 
countervailing measures, it may not exceed five years. For anti -dumping measures, it may exceed 
five years only if a review is initiated before the expiry of the initial period that determines that 
dumping of the goods is continuing. The initial duration of safeguard measures may not exceed four 
years; extensions up to a total duration of 10 years are p ossible.  
3.35.   As at May 2018, Vanuatu has never imposed any anti -dumping, countervailing or safeguard 
duties.  
3.2  Measures Directly Affecting Exports  
3.2.1   Customs procedures and requirements  
3.36.   Registration and documentation requirements are similar to imports (Section 3. 1.1). 
Exporters are required to register in ASYCUDA World, where they are assigned a CIN . Foreign 
companies or individuals can also apply for a CIN.  WT/TPR/S/378 /Rev.1  • Vanuatu  
 
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  3.37.   For all exports, the bill of lading, commercial invoice, packing list, and customs declaration 
must be lodg ed with the CIR. Additional information is required for exports of goods subject to 
licensing requirements (Section 3.2.3).  
3.38.   According to the authorities, customs clearance for exports usually takes less than one  hour.  
3.2.2   Taxes, charges, and levies  
3.39.   The legal b asis for export taxes is the Export Duties (Amendment) Act No. 1 of 2006, Export 
Duties [CAP 31], and the Export Duties (Amendment) Act No. 25 of 2007.  
3.40.   An export duty of 5% plus VT 3,000 per cubic metre applies on wood in the rough or roughly 
squared. Fiscal income derived from export duties amounted to VT 21.5 million in 2017.  
3.2.3   Export prohibitions, restrictions, and licensing  
3.41.   Pursuant to the Customs (Prohibited Export) Regulations Order No.  114 of 2014 , an export 
prohibition applies to acetic anhydride and any other explosive or its components.  
3.42.   Various products are subject to licences or permits upon export ( Table 3. 6). No information 
was made available  on the cost of each permit or license.  
Table 3.6 Export res trictions  
Items  Goods  Authority responsible for issuing 
permit or licence  
(a) Cattle ( cattle Export Act  [CAP 97])  Minister of Agriculture  
(b) Cocoa beans (Cocoa Act [CAP 13])  Minister of Trade  
(c) Commodities (Vanuatu Commodities Marketing Board 
Act [CAP 133])  
a) Cocoa  
b) Copra  
c) Lavender oil  
d) Tea -tree oil Vanuatu Commodities Marketing 
Board  
(d) Cultural items (Preservation of Sites and Artifacts Act 
[CAP 39])  Minister of Environment  
(e) Currency or negotiable bearer instruments not less than 
the equivalent of VT 1  million   
(Proceeds of Crime Act [CAP 284])  Financial Intelligence Unit  
(f) Fauna and flora (International Trade (Fauna and Flora) 
Act [CAP 210])  Minister of Environment  
(g) Kavaa (Kava Export Fee Order No. 17 of 1999 – Plant 
Protection Act [CAP 239])  Vanuatu Quarantine and Inspection 
Services  
(i) Logs and flitches (Forestry Act [CAP 276])  Minister of Forestry  
(m) Meat and meat products (Cattle (Export) Act [CAP 97])  Minister of Agriculture  
(o) Sandalwood (Forestry [CAP 276])  Minister of Forestry  
(p) Turtles embalmed with preservative substance 
(Prevention of Cruelty to Animals [CAP 78])  Minister of Environment  
(q) Aquarium fish, coconut crabs, rock lobsters, sea 
cucumbers  Minister of Agriculture  
a Kava means natural extracts, dried roots, stumps, or basal stems from selected varieties of the plant 
species Piper methysticum ; logs and flitches means any timber that has not been processed into 
plywood, veneer, planks or any other finished products except timber from coccos nucifera  or 
santalum austro -caledonicum . 
Source:  Information provided by the authorities . 
3.2.4   Export support and promotion  
3.43.   Vanuatu does not provide any export subsidies. Exported goods and services are VAT 
zero-rated.  
3.44.   Public export support and promotion activities are limited. The Vanuatu Chamber of 
Commerce and Industry (VCCI) offers export -related s ervices , such as training for businesses on 
marketing and quality assurance; it also  provides  general marketing advice.   WT/TPR/S/378 /Rev.1  • Vanuatu  
 
- 39 - 
 
  3.45.   Vanuatu does not have any export processing zones. The authorities indicate that studies are 
being undertaken to explore the possibility of establi shing such a zone in Espiritu Santo.  
3.2.5   Export finance, insurance, and guarantees  
3.46.   Vanuatu does not have any public finance, insurance, 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  
3.47.   In 2017, Vanuatu's tax revenue was equivalent to 17.4% of GDP, up slightly from 17.2% in 
2013 (Table 1.2). The biggest source of tax revenues was generated from VAT, while the combined 
share of tariffs and VAT on i mports was equivalent to 47% of total fiscal revenue in 2017 
(Section  3.1.3).  
3.48.   Vanuatu has no personal or corporate income tax. Taxes and fees levied include: VAT; import 
tariffs; excise taxes; vehicle r egistration fees; contributions to the National Provid ent Fund; business 
licence fees; port dues, aviation charges, a departure tax on international airline passengers 
(included in the price of air tickets); and taxes on rent, land, the extraction of minerals, logging, and 
commercial fishing.  
3.49.   The Government is considering introducing income tax. Following the launch  in August 2016, 
by the Council of Ministers, of a Revenue Modernization and Reform Programme, which aimed to 
"build an effective tax system", the Government announced that it was considering intro ducing 
personal and corporate income taxes; the top personal income tax rate was to be aligned with the 
company income tax rate, which was suggested to be below the rate of Vanuatu's neighbours.3 The 
authorities indicate that the implementation of the inco me tax has been deferred to 2020.  
3.50.   Vanuatu does not have complex incentive schemes (Section 2.4.2). Some sectoral incentives 
were provided, to, inter alia,  agricultural producers (Section 4.1.1.3). These incentives may take the 
form of exemptions from busi ness licensing requirements, provisions of special loans, and 
exemptions from import tariffs and other taxes.  
3.3.2   Standards and other technical requirements  
3.51.   In August 2017, the Bureau of Standards was established under the Ministry of Tourism, 
Trade, Commerce , Industry and Ni -Vanuatu Business (MTTCINVB) in accordance with the Bureau of 
Standards Act No. 14 of 2016, which entered into force on 17 April 2017. Functions of the Bureau 
include overseeing the development and adoption of standards, the conformity ass essment of traded 
goods and processing and manufacturing facilities, and the accuracy of weights and measures.  
3.52.   At the time of its accession to the WTO, Vanuatu's  only technical regulations were the National 
Building Code on constructions in main towns,  administered by the city councils of Port Vila and 
Luganville, to protect  life from cyclones and earthquakes; and some basic health standards 
administered by the Ministry of Health.4 Since its accession, Vanuatu has not made any 
TBT notifications to the WTO.   
3.53.   The authorities indicate that a procedure to develop standards is being developed; whenever 
possible, Vanuatu standards are to be aligned with, or based on, international standards. For 
example, its technical regulations on food, meat, and cocoa were bas ed on Codex, OIE, and 
International Cocoa Organization standards, respectively. The Kava Act, a technical regulation 
specific to Vanuatu, was developed in 2002. The authorities are making efforts to bring the kava 
standard to the Codex to develop it into a n international standard.  
                                                
3 IMF (2016), Vanuatu Article IV Consultation 2016, IMF Country Report No.  16/336, October.  According 
to the IMF Report, among comparator countries, Fiji has the lowest rat e, at 20% for resident companies and 
17% for multinational headquarters.  
4 WTO document WT/ACC/VUT/17, 11 May 2011.  WT/TPR/S/378 /Rev.1  • Vanuatu  
 
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  3.54.   Vanuatu was not represented directly or regionally (through the South Pacific Forum) at any 
international standardization bodies. The authorities state that Vanuatu has applied to become an 
ISO member. Vanuatu  committed to applyi ng the Agreement on Technical Barriers to Trade (TBT) 
from its WTO accession date without any transitional period. It established a TBT enquiry point within 
the Department of Trade, Industry and Investment, under the MTTCINVB.5 The Office of the Director 
of Trade is responsible for fulfilling its TBT notifications and enquiry point obligations. By the end of 
June 2018, no specific trade concerns had been raised against Vanuatu's TBT measures in the 
TBT Committee.6 
3.3.3   Sanitary and phytosanitary requirements  
3.55.   The authorities  state that, given Vanuatu's isolated location in the South Pacific, the 
Government considers that its SPS measures must reflect the need to use and preserve the 
favourable pest status.7 Its SPS related legislation includes:  
a. The Animal Importa tion and Quarantine Act of 1988, and regulations in Order No. 14 of 
1994;  
b. The Plant Protection (Amendment) Act of 2013, the Penalty Notice Regulation Order of 
2014, and the Imports Specification (Plants) Manual;  
c. The Food Control Act No. 21 of 1993, revised  in 2009;  
d. The Meat Industry Act [CAP 239], the Meat Industry (Approved Establishments) 
Regulations Order 12 of 1994 and Order 48 of 2002, and the Meat Industry Regulations 
Order 9 of 1992 and Order 12 of 2005;  
e. The Pesticides (Control) Act [CAP 226] (to be gazetted);  
f. The Animal Disease Control Act [CAP 220]; and  
g. The Kava Amendment Act of 2015.  
3.56.   The Biosecurity Department (Biosecurity) under the Ministry of Agriculture, Livestock, 
Forestry, Fisheries and Biosecurity (MALFFB) was formerly known as the Vanuatu Quarantine and 
Inspection Services until 2013. Its two main offices are located in Port Vila and Luganville, with 
outposts located at "certified ports of entry".8 These ports were certified and approved by the Council 
of Ministers. Foreign vessels are allo wed to enter and exit through these ports.  
3.57.   Biosecurity is responsible for implementing SPS provisions on animals and plants, and the 
Department of Health is responsible for food safety and hygiene management. The SPS enquiry 
point was established and entr usted to the Director of the Biosecurity Department.  
3.58.   Importers must apply for a permit to import " approved animal products  from approved 
countries " for q uantities greater than 5 kg. Approved animal products are those commercially 
processed and packaged, w ith a certificate issued from the exporting country certifying that they 
are fit for human consumption. Approved countries are those free from foot -and-mouth disease 
without vaccination, and are recognized by the World Organization for Animal Health (OIE).  
Countries may be approved for some commodities, but not for others. Commercial importation of 
live animals is restricted, and is limited to certain species only, and an import permit issued by 
Biosecurity is required.9  
                                                
5 WTO document WT/ACC/VUT/17, 11 May 2011.  
6 TBT IMS Database. Viewed at: http://tbtims.wto.org/en/SpecificTradeConcerns/Search . 
7 WTO document WT/ACC/VUT/17, 11 May 2011, p.20.  
8 These include: Sola Port on Vanua Lava Island, Torba Province; Luganville Port on Santo Island, 
Sanma Province; Litzlitz Port on Malekula Island,  Malampa Province; Lapitasi Port on Efate Island, Shefa 
Province; Lenakel Port on Tanna Island, Tafea Province; and Anelcauhat Port on Aneytium Island, Tafea 
Province.  
9 Biosecurity online information. Viewed at:  https://biosecurity.gov.vu/import -animal -and-animal -
product/ . WT/TPR/S/378 /Rev.1  • Vanuatu  
 
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  3.59.   Importation of new products of anim al origin, and products from a new import origin, must 
undergo an import risk analysis, which typically takes at least 18 months. Import risk analyses are 
conducted by Biosecurity in accordance with the standards of the OIE, Codex Alimentarius, and the 
International Plant Protection Convention (IPPC). The authorities indicate that, due to limited human 
resources and a lack of access to up -to-date references, Biosecurity often uses risk analyses 
completed by regional partners (e.g. New Zealandor Australia), and/or seeks technical assistance 
from regional intergovernmental agencies such as the Secretariat of the Pacific Community. In 2016, 
the Government launched its National Biosecurity Policy 2016 -2030, to build Biosecurity into an 
adequately resourced and m anaged agency to deliver its services effectively.10 
3.60.   According to a time release study conducted by the Asian Development Bank (ADB) in 
July 2017, quarantine takes, on average, 3 days and 2 hours for imports arriving by air, and 11  days 
and 7 hours for impo rts arriving by sea. The study found that the procedure for obtaining a 
quarantine -based import permit was causing significant delays in the release of cargo, both at ports 
and at airports.11 At ports, once the cargo is cleared by Customs, due to a lack of space, containers 
need to be moved to owners' (importers') premises for SPS examination. According to the study, 
these cargos were often released by Customs without proper notification or examination by 
quarantine, i.e. Biosecurity.   
3.61.   Not all plants and pla nt products are allow ed to enter Vanuatu. Biosecurity developed a plant 
import ation manual  (Import Specification Manual). Importers are required to consult this Manual 
before importing plants and plant products into Vanuatu. The Plant Health Section under Biosecurity 
conducts import risk analyses for plants and plant products. For new plants th at are not included in 
the Manual, an import risk assessment (IRA) is conducted in accordance with the International 
Standard for Phytosanitory Measures, and may take several months to complete.  
3.62.   The Food (Control) Act restricts businesses and persons from  displaying, storing or selling 
food unfit for human consumption. The Act is enforced by the Department of Health under the 
Ministry of Health, and by the municipalities and provincial authorities under the Ministry of Internal 
Affairs. Import permits for food and food products may be issued within 48 hours.  
3.63.   Vanuatu has been a member of the OIE since 1983, and sends monthly reports to the OIE on 
its disease status. It has been a member of the Codex Alimentarius Commission since 1995. It has 
also been a con tracting party to the IPPC since 2007.  
3.64.   Vanuatu has not submitted any notifications to the WTO on its SPS measures. No specific 
trade concerns  were raised regarding Vanuatu's SPS measures in the SPS Committee.12 
3.65.   The Fisheries Act No. 10 of 2014 prohibits the  imports of genetically modified aquatic 
organisms (Article 20). Vanuatu does not prohibit all living modified organisms (LMOs)/genetically 
modified organisms (GMOs),  although their importation must go through a risk assessment process. 
The Vanuatu Nationa l Biosafety Framework outlines the pre -import risk assessment, as required 
under the Cartagena Protocol, for biological products. Biological products include GMOs (living or 
processed) for use as human food, animal feed, pharmaceuticals or other purposes. They refer to 
any products derived or extracted from a biological organism including the whole organism or a part 
thereof, whether alone or in combination with other products of diverse origin.  
3.3.4   Competition policy and price controls  
3.3.4.1   Competition policy  
3.66.   At present, Vanuatu does not have a general competition law; it has some sector -specific 
legislation related to competition, and some consumer protection legislation. The Vanuatu Trade 
Policy Framework 2012 recommended the drafting of a competition law and  policy, and the 
establishment of a competition authority. The authorities indicate that they are in the process of 
preparing a Competition and Consumer Protection Act, with provisions on price controls.  
                                                
10 Biosecurity, National Biosecurity Policy 2016 -2030. Viewed at: 
http://pafpnet.spc.int/attachments/article/820/VUBiosecurity%20Policy%202016%20 -%202030.pdf . 
11 ADB (2017), Time Release Study – Vanuatu .  
12 SPS IMS database. Viewed at: http://spsims.wto.org/en/SpecificTradeConcerns/Search . WT/TPR/S/378 /Rev.1  • Vanuatu  
 
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  3.67.   The following sector -specific legislation contains competition related provisions, and sectoral 
regulators were set up under these legislation (Table 3.7):  
a. The Telecommunications and Radiocommunications Regulation Act 2009, under which the 
Telecommunications and Radiocommunications Regulator (TRR) regulate s the 
telecommunication market;  
b. The Utilities Regulatory Authority Act 2007, under which the Utilities Regulatory Authority 
(URA) regulates public utilities such as water and electricity; and  
c. The Civil Aviation Act [CAP 258], under which the Civil Aviation  Authority of Vanuatu 
(CAAV) regulates civil aviation services.  
Table 3.7 Sectoral legislation with competition related provisions  
Subject  Telecommunications and 
Radiocommunications 
Regulation Act  Utilities 
Regulatory 
Authority Act  Civil Aviation Act  
Anti-competitive 
merger  The TRR's prior approval is 
required for the transfer of control 
of a telecom service provider if:  
- the person acquiring or 
transferring control is a dominant 
service provider; and  
- as a result of the transfer, a 
person would control service 
providers with 40% or more of 
gross revenue in the Vanuatu 
telecom market, or a person would 
be in a position of economic 
strength affording it the power to 
behave to some extent 
independently of com petitors, 
consumers or end users.  n.a. n.a. 
Cartel  Telecom service providers must 
not engage in price fixing, market 
allocation or preventing or 
restricting the supply of any goods 
or services to or by another 
service provider.  Prohibits price fixing  The Director of the 
CAAV authorizes 
agreements relating 
to international 
carriage by air in 
relation to tariffs and 
capacity.  
Anti-competitive 
agreements or anti -
competitive conduct  A telecom service provider must 
not engage in conduct which has 
the purpose,  effect, or likely effect 
of substantially lessening 
competition in the telecom 
market.  n.a. n.a. 
Exclusive dealing  Prohibited  Prohibited  n.a. 
Abuse of dominant 
market power  The TRR may declare a service 
provider "dominant" ; said provider  
must not abuse dominancy by 
restricting the entry of any person 
into a telecom market, provid ing 
unjustifiable bundling of services, 
or engaging in unreasonable price 
discrimination.  n.a. n.a. 
General access to 
essential facilities or 
key infrastructure  A dominant service provider is 
deemed to abuse its dominance if 
it denies access to essential 
facilities or key infrastructure to 
another service provider.  n.a. n.a. 
n.a. Not applicable.  
Source:  Information provided by the authorities.  WT/TPR/S/378 /Rev.1  • Vanuatu  
 
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  3.3.4.2   Consumer protection legislation  
3.68.   Vanuatu does  not have a general consumer protection law. A number of pieces of legislation 
contain consumer protection related provisions (Table 3.8):  
a. The Telecommunications and Radiocommunications Regulation Act 2009;  
b. The Utilities Regulatory Authority Act 2007;  
c. The Food (Control) Act 1993; and  
d. The Weights Act [CAP 43].  
Table 3.8 Legislation with consumer protection related provisions  
Legislation  Consumer protection related provisions  
Telecommunications and 
Radiocommunications 
Regulation Act 2009  Prohibits:  
- unfair dealing, including sending unrequested or inaccurate invoices, and 
engaging in providing a telecom service that is "misleading or deceptive, 
or is likely to mislead or dec eive";  
- unauthorized collection or disclosure of personal information; and  
- unjustified discrimination by dominant service providers regarding terms 
and quality of services.  
 Requires : 
- service providers to have end -user complain t and dispute resolution 
procedures;   
- customers are given reasonable advance notice of any change in a 
telecom service provided to end -users that alters the quality or 
functionality of the service;  
- accurate and current information about a service is provided to cons umers 
at the point of sale;  
- a service provider must allow a customer to inspect its records relating to 
a telecom service provided to that customer, and to promptly correct or 
remove consumer information in those records that is shown to be 
incorrect; an d  
- an advertisement for a telecom service must not state or imply that the 
service is free of charge, unless the service is entirely and unconditionally 
free. 
Utilities Regulatory 
Authority Act 2007  - it is an offence for a utility to engage in any conduct that is misleading or 
deceptive, or is likely to mislead or deceive a consumer; and  
- the URA may, upon request, assist a person to resolve any dispute in 
respect to  regulated services . 
Food (Control) Act 1993  Regulates the quality and safety of food, and prohibits manufacturing, 
importing, selling, or distributing of any food unfit for human consumption, or 
adulterated or non -compliant with the Act or relevant regulations.  
No person may label, package, treat, p rocess, sell or advertise any food in a 
manner that is false, misleading, deceptive or likely to create an erroneous 
impression regarding its character, value, quality, composition, merit, or safety . 
Weights Act [CAP 43]  Prohibits the giving of the short weight of goods, and having any false weight 
or false weighing instruments . 
Source:  Information provided by the authorities.  
3.3.4.3   Price controls  
3.69.   Vanuatu's Price Control Act [CAP 86] enables prices to be controlled in relation to any goods 
or services. However, the authorities state that this Act has never been implemented due to a lack 
of budget allocation. In February 2018, the Minister of Finance and Economic Management appointed 
an Interim Price Controller, with the intention of setting up a Price Co ntrol Bureau and of 
implementing the Act. The authorities indicate that the Bureau is soon to be operational.  
3.70.   The Vanuatu Commodities Marketing Board (VCMB) used to regulate the "beach" (farm -gate) 
price of copra on an ad hoc  basis (Section 4.1.1.4); when the world price of copra fell, the VCMB 
could use EU funds to stabilize copra prices. This was stopped a few years ago, and the VCMB was 
in the process of being liquidated (Section 3.3.5). Regarding public utilities, the URA checks price 
adjustments for el ectricity (Section 4.2).  WT/TPR/S/378 /Rev.1  • Vanuatu  
 
- 44 - 
 
  3.3.5   State tradin g, state -owned enterprises , and privatization  
3.3.5.1   State trading arrangements  
3.71.   At the time of Vanuatu's WTO accession, only the VCMB had exclusive rights relating to the 
import or export  of certain goods.13 The VCMB was established in 1981 to buy, sell and stabilize 
prices of copra, cocoa, and kava. It had sole purchasing rights on copra and cocoa for export. From 
2011, the VCMB was in the process of being liquidated, although it seems that no progress has b een 
made since then.  Vanuatu has not notified any state trading arrangements to the WTO since its 
accession.  At the time of accession  to the WTO , Vanuatu committed to notify any enterprise falling 
within the scope of Article XVII.14  
3.3.5.2   State -owned enterprises  (SOEs ) and privatization  
3.72.   There are currently seven active SOEs, which are locally referred to as commercial 
government business enterprises (CGBEs) (Table 3.9). According to the IMF, CGBEs play an 
important role in the economy; they account for about 7% t o 8% of the total stock of fixed capital, 
and dominate several sectors including banking, broadcasting, postal services, and transport.15 In 
FY2014 , the CGBEs contributed 2% to GDP.16 Among the seven CGBEs, the three largest ones 
(National Bank of Vanuatu, A ir Vanuatu (Operations) Ltd., and Airports Vanuatu Ltd.) comprised 
96% of total CGBE assets.17  
Table 3.9 CGBE performance indicators, FY2014  
Name of 
company  Ownership 
(%) Return 
on equity 
(%) Return 
on assets 
(%) Total 
assets  
(VT 
million)  Total 
revenue  
(VT 
million)  Total 
liabilities  
(VT million)  Average return 
on assets  
FY2008/14  
(%) 
Airports 
Vanuatu Ltd.  100 1 1 4,436  737 1,143  1 
Air Vanuatu 
(Operations) 
Ltd. 100 NE (18) 4,755  5,139  5,392  (13) 
National Bank  
of Vanuatu  100 5 1 10,158  992 9,040  1 
Vanuatu 
Agriculture 
Development 
Bank 100 1 1 449 138 52 (5) 
Vanuatu 
Broadcasting 
and Television 
Corporation  100 (3) (2) 371 134 83 1 
Vanuatu Post  100 n.a. n.a. n.a. n.a. n.a. 11 
National 
Housing 
Corporation  100 n.a. n.a. n.a. n.a. 
n.a. (1.3) 
Portfolio   (16.8)  (3.7)  20,171  7,140  15,711  (1.3)  
NE Negative equity.  
n.a. Not available.  
( ) = negative.  
Source:  Information provided by the authorities of Vanuatu.  
3.73.   The CGBEs' financial performance has been declining in recent years. They added 0.24% to 
Vanuatu's GDP for every 1% share of the total fixed capital stock they held, indicating a significant 
productivity cost for the economy.18 Only three CGBEs generated a positive return (Table  3.9): the 
largest – the National  Bank of Vanuatu – was the most profitable. There are also three inactive 
                                                
13 WTO document WT/ACC/VUT/17, 11 May 2011.  
14 WTO document WT/ACC/VUT/17, 11 May 2011.  
15 IMF (2016), Vanuatu Article IV Consultation 2016, IMF Country Report No.  16/336, October . 
16 ADB (2016), Finding Balance 2016 – Benchmarking the performance of State -owned enterprises in 
Island countries . Viewed at: https://ww w.adb.org/sites/default/files/publication/192946/finding -balance -2016-
soe.pdf . 
17 IMF (2016), Vanuatu Article IV Consultation 2016, IMF Country Report No.  16/336, October . 
18 IMF (2016), Vanuatu Article IV Consultation 2016, IMF Country Report No.  16/336, Oc tober . WT/TPR/S/378 /Rev.1  • Vanuatu  
 
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  CGBEs: Metenesal Estates Ltd., Vanuatu Livestock Development L td., and the VCMB. The authorities 
state that, legally, the three still exist, but are not in operation.  
3.74.   According to the IMF, the poor financial performance of the CGBEs resulted in them being a 
significant and ongoing cost for the Government, with government transfers to CGBEs averaging 
2.3% of general government expenditure during FY2010/14.19 The Government further pro vided a 
loan of VT 478,045 to Air Vanuatu in 2015/16, and another loan of VT 99,497 to Vanuatu 
Broadcasting in 2017. Among the major reasons for CGBE losses are the community service 
obligations (CSOs), which involve activities operating on non -commercial or subsidized terms, and 
which are a significant burden. From 2008 to 2014, Air Vanuatu accounted for 94% of the total CGBE 
losses; its CSOs amounted to VT 176 million in 2013 alone, and resulted in a VT 1.4 billion loan and 
a VT 2.2 billion guarantee from  the Government. The financial performance of the National Bank of 
Vanuatu has also been declining in recent years, partly reflecting its rural outreach expenditures 
(costing VT  1.7 million in 2014).  
3.75.   The Government has been making efforts to improve the p erformance of the CGBEs. For 
example, it adopted a Government Business Enterprises Policy in 2013, which required CGBEs to 
operate as commercial entities. The Policy also stipulated the setting up of a range of monitoring 
and governance mechanisms, such as  appointing a CGBE Minister, and establishing a framework for 
financing CSOs. However, implementation of this Policy has been weak.20 For example, the CGBE 
Monitoring Unit established under this reform Policy remains under -resourced. No CGBE Minister has 
been appointed, and the performance of CGBEs continues to be supervised by their line ministries. 
In 2011, a bill was passed by Parliament to liquidate the VCMB; however, no action has been taken 
to date. The authorities state that no liquidation process has  started because the repealed VCMB Act 
has not been gazetted.  
3.76.   The authorities state that a bill on CGBEs, based on the CGBE Policy, is scheduled to be 
submitted to Parliament in 2018. The bill requires CGBEs to achieve a return on equity that is 
sufficient  to cover their costs, and defines the role of the Monitoring Unit to ensure that the Unit has 
a direct reporting line to the CGBE Minister.  
3.77.   The authorities indicate that no major privatization plan is in place, except the restructuring 
of some CGBEs such as the Vanuatu Agriculture Development Bank (VADB), and the National 
Housing Corporation.  
3.3.6   Government procurement  
3.78.   Vanuatu has an open public procurement regime, where discrimination against foreign 
participation is not allowed. At the time of its accession  to the WTO, Vanuatu committed not to 
impose any discrimination against foreign participation in its government procurement.21 About 60% 
of government procurement is provided by foreign suppliers.  The authorities state that most 
government procurement proje cts are for consultancy services, and are funded by donors. They 
state that, in 2016, a total of VT 1.4 billion of public procurement was processed by the Central 
Tender Board (CTB), more than half of which (54%) was through open tendering.  
3.79.   The CTB, a par astatal organization operating under the Ministry of Finance and Economic 
Management (MFEM), awards tenders for ministries and agencies at the central government level. 
Procurement by CGBEs is not covered by public procurement.  The CTB is also in charge of  the 
registration and grading of contractors, although this is not a compulsory requirement for contractors 
to participate in government procurement.  The CTB reports to, and is responsible for, the Council of 
Ministers, who can accept or reject a CTB appro val. The Chairman of the CTB is appointed from the 
public sector. The CTB is currently reviewing the  public procurement guideline s, which is a 
purchasing manual first issued in 2002, with a view to expanding coverage to the procurement of 
works.  
                                                
19 IMF (2016), Vanuatu Article IV Consultation 2016, IMF Country Report No.  16/336, October . 
20 IMF (2016), Vanuatu Article IV Consultation 2016, IMF Country Report No.  16/336, October . 
21 WTO document WT/ACC/VUT/17, 11 May 2011.  WT/TPR/S/378 /Rev.1  • Vanuatu  
 
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  3.80.   The CTB co nsiders that government procurement needs to follow the principles of seeking the 
best value for money, and seeking to promote open and effective competition.22 Government 
procurement is grouped into two types: low -value (where the value is below VT 5 milli on), and 
high-value procurement (where the value is equal to or greater than VT 5 million). The Public Finance 
Management Act and its regulations (the Financial Regulations) outline the purchasing, approval, 
and payment procedures for goods and services wi th a value below VT 5 million. The Government 
Contracts and Tenders Act [CAP 245] No. 40 of 2013 and the Tenders Regulation Order No. 40 of 
1999 outline the procedures for the payment of goods and services with a value greater than 
VT 5 million.  
3.81.   All contr acts with a value greater than VT 5 million must be considered by the CTB, and be 
subject to open and competitive bidding, unless the CTB decides otherwise. For example:  
a. for large and complex tenders, selective tendering may be used where pre -qualification  is 
required, to ensure that invitations to bid are issued to those suppliers/contractors with 
adequate capabilities and resources;  
b. where it is not feasible to fully define the technical or contractual details to elicit 
competitive tenders, a two -stage ten der may be applied, so that only those that submitted 
acceptable technical proposals in the first stage may submit tenders in the second stage; 
and 
c. under exceptional circumstances, limited tender may be applied subject to the approval 
of the CTB.23 
3.82.   For cont racts with a value below VT 5 million but greater than VT 100,000, procurement 
entities must issue at least three requests for quotations, with brief contract terms and conditions. 
The purchase must be approved by the Director General of the line ministry or his/her 
representative. For contracts with a value below VT 100,000, procurement entities must issue a local 
purchase order, which may be approved by an official  with the appropriate delegated financial 
authority working for the procurement entity . 
3.83.   There is a complaint review mechanism provision in the Government Contract and Tenders 
Act. Since 2012, there have been no major procurement disputes that led to court.  
3.84.   Apparently,  Vanuatu does not intend to apply for accession to the WTO  GPA.24 
3.3.7   Intellectual p roperty rights  
3.3.7.1   Legislative and institutional framework  
3.85.   The first intellectual property (IP) legislation was introduced in 2000. Prior to that, Vanuatu 
was using UK legislation to protect IP rights  (IPRs) . IP related legislation was promulgated or revised 
during Vanuatu's WTO accession process. In 2014, the country  notified its laws and regulations on  
IPRs to the WTO (Table 3.10 ).  
3.86.   The Vanuatu Intellectual Property Office (V anIPO) is the institution responsible for protecting 
IPRs. VanIPO was established in March 2012, and is operating as a unit within the corporate service 
of the MTTCINVB. In August 2017, VanIPO  signed a technical agreement with WIPO to establish an 
Intellectual Property Automation System for registering trademarks,  patents and designs.25 The 
authorities state that, c urrently , there are 8,694 trademarks, 129 patents, and 2  designs registered.  
                                                
22 CTB online information. Viewed at: https://doft.gov.vu/index.php/procurement -tender -government -
guidelines/tender -board . 
23 CTB online information. Viewed at : https://doft.gov.vu/index.php/procurement -tender -government -
guidelines/tender -board . 
24 WTO document WT/ACC/VUT/17, 11 May 2011.  
25 Vanuatu Daily Post onlin e news, 14 August 2017. Viewed at: http://dailypost.vu/news/a -trademark -
registering -system -for-vanuatu/article_c529e66e -7204-59fe-a840-4b7603b4345e.html . WT/TPR/S/378 /Rev.1  • Vanuatu  
 
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  Table 3.10 Main IP laws, and treaty membership  
Laws and regulation   
  
Patents  Patents Act No.  2 of 2003  
Patents Act No.2 of 2003 – Declaration of Convention Countries Order No. 42 of 2013  
Patents (Amendment) Act No. 14 of 2011  
Trademarks  Trademarks Act No.  1 of 2003  
Trademarks Act No.  1 of 2003 – Declaration of Convention Countries  Order No.  40 
of 2012  
Trademarks for Goods and Services (Fees) Regulation (Amendment) Order No.  116 
of 2012  
Trademarks for Goods and Services (Fees) Regulation Order No.  15 of 2012  
Trademarks Act No. 1 of 2003 – Establishment of Intellectual Property Offic e Order 
No. 24 of 2012  
GIs Geographical  Indications (Wine) Act No. 53 of  2000 
Designs  Designs Act No. 3 of 2003  
Designs Act No.3 of 2003 – Declaration of Convention Countries Order No.41 of 2012  
Circuit layouts  Circuit Layouts Act No.  51 of 2000  
Trade secrets  Trade Secrets Act No.  52 of 2000  
Copyright  Copyright and Related Rights Act No.  42 of 2000  
Treaty membership   
 Berne Convention for the Protection of Literary and Artistic Works (Ratification) Act 
No. 16 of 2012  
Convention Establishing the World Intellectual Property Organization (Ratification) 
Act No.  13 of 2012  
Source: WTO document IP/N/1/VUT/1,  10 October 2014. WIPO online information. Viewed at: 
http://www.wipo.int/wipolex/en/profile.jsp?code=VU . 
3.87.   VanIPO is in the process of se tting up a Patent Division and a Design Division ; the Trademark 
Division is already  functioning  and has witnessing an increase in trademark registrations .  
3.88.   IPR protection at the border is managed by Customs,  which requires importers to prove the 
genuinenes s of their goods . IPR infringing goods are destroyed. The authorities consider that more 
technical training is needed to boost the capacity of their staffs to improve IPR protection.  
3.3.7.2   Industrial property rights  
3.89.   Under the Patents Act No. 2 of 2003, all paten ts registered in the United Kingdom are 
protected in Vanuatu.  
3.90.   The Trade marks Act 2003 allows for independent applications to be made to the Register. 
Previously, only marks registered in the United Kingdom were allowed to be register ed in Vanuatu. 
The Act:  
a. introduced independent registrations and examination systems;  
b. allowed for the registration of service marks;  
c. may prescribe signs that cannot be used as a trademark or part of a trademark;  
d. set up an opposition procedure to the registration of a trademark ( within 28 days of 
publication in the Gazette);  
e. allowed for the remov al of a trademark from the Register for no n-use of the mark;  
f. allowed for the registration of collective trademarks;  
g. incorporated provisions governing the regis tration of trademarks involving indigenous 
culture;  
h. allowed for marks registered in Madrid Convention countries to be recognized in Vanuatu; 
and  WT/TPR/S/378 /Rev.1  • Vanuatu  
 
- 48 - 
 
  i. allowed for a ll trademarks registered under the previous Registration of United Kingdom 
Trademarks Act (Cap 8 1) to remain registered in Vanuatu, provided that they are renewed 
once the duration of the 10 -year protection lapses.  
3.91.   Patents are protected for 20 years, while trademarks, GIs, and designs are protected for 
10 years, renewable indefinitely for 10 -year pe riods (Table 3.11).   
Table 3.11 Duration of protection for industrial property rights  
Industrial 
property  
rights  Duration of protection  
Patent  20 years from the date of filing  
Trademarks  10 years upon registration, renewable indefinitely for 10-year periods  
GI 10 years of protection from the date of filing, renewable indefinitely for 10-year periods  
Designs  10 years of protection from the date of filing, renewable indefinitely for 10-year periods  
Trade secrets  The owner of a trade secret has the right to tha t secret remaining undisclosed  
Source:  Industrial property rights  legislation, and information from the authorities.  
3.3.7.3   Copyrights and related rights  
3.92.   While copyright cannot currently be registered in Vanuatu, the authorities are preparing to 
establish a Collective Society for copyright owners to register and commerciali ze their works.26 The 
Vanuatu Copyright Management Society Act was passed by Parliamen t in 2017. For most copyright, 
protection is for the lifetime of the last surviving author plus 50 years (Table 3.12).  
Table 3.12 Duration of copyright protection  
Copyright and related rights  Duration of protection  
Works of joint authorship  The life time of the last surviving author and for 50 years after 
his/her death  
Collective work s (other than a work 
of applied art) and audiovisual work s For 50 years after the date on which the work:  
 - was made;  
 - was first made available to the public; or 
 - was first published ,  
whichever is the latest  
Works published anonymously or 
under a pseudonym  For 50 years after the date on which the work:  
 - was made;  
 - was first made available to the public; or  
 - was first published ,  
whichever is the latest  
Works of applied art  For 25 years after the making of the work  
Any other work s The lifetime of the author and for 50 years after his/her death  
Source:  Copyright and Related Rights Act No. 42 of 2000.  
 
 
                                                
26 WTO document IP/N/1/VUT/1, 10 October 2014.  WT/TPR/S/378 /Rev.1  • Vanuatu  
 
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  4  TRADE POLICIES BY SE CTOR  
4.1  Agriculture , Forestry, and Fisheries  
4.1.1   Agriculture  
4.1.1.1   Features  
4.1.  Vanuatu is an agriculture -based economy, with 80% of the population depending on 
subsistence agriculture. Total land area is about 1.2 million hectares, of which 40% is arable 
agricultural land, making it abo ut 10 hectares per household. More than 90% of the land is 
customarily held, while the other 10% is government owned or leased.  One third of the cultivable 
customary land area is being farmed.1  
4.2.  The agriculture, forestry and fish eries sector account ed for around 22% of GDP in 2016, and 
for almost all  merchandise exports  (Table A1.1). The sector has been growing faster than the overall 
economy in most of the years between 2010 and 2016, except in 2015 (Chart 4.1).  In 2016, 
value -added in agriculture, forestr y and fish eries recovered from a decline in 2015 (caused by 
Cyclone Pam) by registering a positive growth of 5.1%: crop production grew by 5.9%, followed by 
animal production (2.6%), fishing (3.9%), and forestry (0.7%).2 Crop production accounted  for a 
dominant share (80%) of total agricultural output  in 2016 . 
Chart 4.1 Growth rates, 2010 -17 
 
Source:  Vanuatu National Statistics Office online information, World Bank database, and IMF online 
information.  
4.3.  Agriculture in Vanuatu is divided into three subsectors: a labour -intensive subsistence sector, 
a semi -commercial sector, and a commercial sector. The subsistence subsector is predominantly 
centred on root crops (taro, yam, cassava, and sweet potato ( Ipomo ea batatas )) for consumption 
and cultural purposes, and is characterized by a total reliance on rain irrigation and rudimentary 
tools. The semi -commercial agricultural activities are concentrated near urban centres, and are 
comprised of, inter alia,  green leafy vegetables, cabbages, tomatoes, capsicum and eggplant, as 
well as spice and herb cultivation. The commercial subsector is based on a limited range of traditional 
cash crops including cocoa, kava, coffee, and coconut, and some new cash crops such as p epper 
and vanilla. Beef production is growing in importance.  The development of the commercial subsector 
is closely related to, inter alia , fluctuations in world commodity prices and emerging markets for 
novel crops.  
4.4.  Most agricultural activities in Vanuatu  make use of rudimentary hand tools, leading to low and 
irregular production. Production is also constrained by,  inter alia : lack of land, lack of improved 
                                                
1 MALFFB, Vanuatu Agriculture Sector Policy  2015-2030. Viewed at: 
https://malffb.gov.vu/doc/Vanuat u_Agriculture_Sector_Policy.pdf . 
2 Vanuatu Statistics Office (2017), Statistics Release: Gross Domestic Product 2016 . 
-20%-15%-10%-5%0%5%10%
2010 2011 2012 2013 2014 2015 2016 2017
Real GDP
Agriculture, forestry and fishing
Crop production
Services
Source:  Vanuatu National Statistics Office online information, World Bank database, and IMF online information.Chart 4.1[Growth rates, 2010 -17]WT/TPR/S/378 /Rev.1  • Vanuatu  
 
- 50 - 
 
  farming skills, climate vulnerability, difficulties in accessing credit, and infrastructure and rela ted 
transport costs, and hence difficulties in accessing trade and marketing opportunities.   
4.1.1.2   Agriculture trade  
4.5.  During the period under review , main agricultural export items were: copra, kava, coconut  oil, 
cocoa, and beef (Chart 4. 2). The fluctuation in ex port value reflects both changes in production, and 
variation in international prices. Vanuatu's m ain agricultural export markets include: Australia, the 
European Union , Japan,  other MSG member countries  (e.g. Fiji, P apua New Guinea  and 
Solomon  Islands), New Caledonia and  New Zealand.  
Chart 4.2 Exports of main agricultural products, 2012 -16 
(VT million)  
 
Source:  Vanuatu National Statistics Office, Quarterly Statistical Indicators July -September 2017.  
4.6.  In 2016 , Vanuatu's main agricultural import items were rice, pastry, chicken meat, wheat flour, 
beverages, and cigarettes, among others.3  
4.1.1.3   Domestic policies  
4.7.  The main legislation regulating the agriculture sector , according to the authorities,  is the 
National Agric ulture Bill. Responsibility for Vanuatu's agricultural policy lies with the Ministry of 
Agriculture, Livestock, Forestry, Fisheries and Biosecurity (MALFFB). The Department of Agriculture 
and Rural Development (DARD) within the MALFFB aims to build a robus t and competitive agriculture 
sector.  
4.8.  Access to credit for rural development is a major constraint for producers. The MALFFB is 
working with the  Vanuatu Agriculture Development Bank  to consider avenues where access to credit 
for rural producers could be e nhanced.  Climate change and climate variability add to the difficulties 
in Vanuatu's agricultural development.4 For example, disaster risk management requires strong 
collaboration among various stakeholders, and changing climatic conditions and natural haz ards 
have implications for the transportation of agricultural produce from rural areas to markets in the 
main urban centres. Poor road conditions and deteriorating wharfs, jetties and shipping routes have 
added significantly to transportation costs.  
4.9.  Again st this background, the Government issued its Agriculture Sector Policy 2015 -20305, 
which is a guideline with suggestions regarding, inter alia , institutional arrangements, extension and 
training, finance and investment, land use, R&D, production and market access, food security, 
climate variability and climate change. In particular, the following suggestions were made: the use 
                                                
3 FAO online statistics.  
4 MALFFB, Vanuatu Agriculture Sector Policy  2015-2030. Viewed at: 
https://malffb.gov.vu/doc/Vanuatu_Agriculture_Sector_Policy.pdf . 
5 MALFFB, Vanuatu Agriculture Sector Policy  2015-2030. Viewed at: 
https://malffb.gov.vu/doc/Vanuatu_Agriculture_Sector_Policy.pdf . 
02004006008001,0001,2001,4001,6001,8002,000
Copra Kava Coconut oil Cocoa Beef Coffee2012 2013 2014 2015 2016Chart 4.2 [Exports of main agricultural products, 2012 -16]
Source:   Vanuatu National Statistics Office, Quarterly Statistical Indicators July -Septermber 2017, Emailed on 5 Feb 2018.VTmillionWT/TPR/S/378 /Rev.1  • Vanuatu  
 
- 51 - 
 
  of tax holidays an d tax exemptions to reduce business costs in agriculture, such as an exemption 
from all taxes including import tariffs on agriculture inputs, e.g. tools, machinery, seeds, fertilizers, 
pesticides, and fuel; and an exemption from all licensing requirements on agricultural businesses for 
the first three years of operation. The authorities indicate that these policies still need to be 
implemented, and that, up to now, duty exemptions need to be officially requested and the process 
is very slow.  
4.10.   The authorities  consider that, in order to facilitate market access for Vanuatu agricultural 
products, export and domestic markets need to be identified and strengthened, ensuring the 
products' compliance with food hygiene standards. From this perspective, they plan to e stablish a 
Vanuatu National Marketing and Consumer Cooperative Federation (VNMCCF) to facilitate market 
access and improve the livelihood of the people.6  
4.11.   The Agriculture Sector Policy also required the authorities to develop strategies for 
commodities in the agriculture sector. So far, a coconut strategy and a kava strategy have been 
issued (Section 4.1.1.6). The authorities state that they are planning to develop strategies for other 
commodities such as cocoa, coffee, and onions.  
4.12.   The Tanna Coffee Developm ent Company (TCDC), previously state -owned, was privatized and 
all its exclusive rights and privileges revoked.  It is no longer a state trading company, and any 
company can now produce coffee, and import or export coffee to or from Vanuatu.7 The authoritie s 
state that they are not aware of any other state trading arrangements.  
4.1.1.4   Support levels  
4.13.   Vanuatu notified to the WTO its domestic support to the agriculture sector in 2015; according 
to the authorities, all support measures were in the Green Box category. Among the 
VT 368.46  million of support, most was used for crop extension, pest and disease control, and 
training (Chart 4.3).8  
Chart 4.3 Domestic support to agriculture, 2015  
 
Source:  WTO document G/AG/N/VUT /1, 20 July 2016.  
4.14.   At the time of accession to the WTO, the authorities stated that Vanuatu provided virtually no 
monetary grants to agricultural producers. In 2012, agricultural producers were among the 
businesses eligible for incentives offered through th e Business Licence Committee, and the Customs 
Department. These incentives included exemption from business licensing requirements, special 
                                                
6 MALFFB online information, MALFFB Corporate Plan 2014 -2018. Viewed at: 
https://malffb.gov.vu/index.php?id=6 . 
7 WTO document WT/ACC/VUT/1 7, 11 May 2011.  
8 WTO document G/AG/N/VUT/1, 20 July 2016.  
Research
10.8%
Training
22.5%Pest and disease 
control
29.8%Crops extension
30.0%
Livestock extension
6.9%Chart 4.3 [Domestic support to agriculture, 2015]
Source:  WTO document G/AG/N/VUT/1, 20 July 2016.WT/TPR/S/378 /Rev.1  • Vanuatu  
 
- 52 - 
 
  loans at relatively low interest rates from commercial banks, and special exemptions accorded by 
the customs and tax  authorities.9 It is not clear to the Secretariat if these incentives are still offered.   
4.15.   At the same time, the authorities also state that Vanuatu had aid -financed domestic support  
programmes for agriculture.10 Small -holders of coffee were provided with fr ee planting materials 
and a subsidy on the purchasing price. The Vanuatu Commodities Marketing Board (VCMB) regulated  
the "beach" (farm -gate) price of copra on an ad hoc  basis by using surpluses generated from trading 
activities and transfers of Lomé Convention funds from the commodity price stabilization scheme 
(Stabex) of the European Union.  No information was made available to the Secretariat as to whether  
these prices  are still regulated.  
4.1.1.5   Border measures  
4.16.   The simple average applied MFN tariff rate on agricultural tariff lines (WTO definition) is 16.9% 
(in 2018), higher than the average rate on non -agricultural tariff lines ( 8%) (Table  3.1). Tariff  rates 
range from zero to 75% for agricultural products; the highest tariff rates are on beverages, spirits 
and tobacco (Chart 4.4). 10.9% of agricultural tariff lines are duty free, less than the duty -free 
percentage for non -agricultural tariff lines (28. 5%).  
Chart 4.4 Average tariff rates of WTO agricultural groups, and fish and fishery products  
 
Source:  WTO Secretariat calculations, based on data from the authorities.  
4.17.   Vanuatu does not apply any tariff quo ta on its agricultural products. It does not have any 
non-ad valorem  agricultural tariff line s.  
4.18.   Import prohibitions are maintained on the grounds of protecting public health, safety, morals 
and the environment. Absinthe, beef originating in Europe, copra, and wine with a false description 
and presentation as provided for in the Geographical Indicatio ns (Wine) Act are prohibited from 
importation (Section 3.1.5). Certain agricultural goods are subject to import licensing (Table 3.5).  
4.19.   Some agricultural products, such as cattle, cocoa and cocoa beans, copra, lavender oil, 
tea-tree oil, kava, meat and mea t products, and turtles embalmed with preservative substances, 
are subject to export licensing requirements (Table 3.6). Apparently , a fee is collected, although no 
information is made available on the cost of each licence (Section 3.2.3). In 2012, exporte rs of kava 
were required to obtain an authorization from the Biosecu rity Department at a cost of VT  30,000 
(US$300), and were also required to pay a facility fee of VT 80,000 (US$800), payable in 
instalments, to the Biosecurity Department. Revenues from li censing fees collected from coffee 
exportation covered the cost of quality control.11 It is not clear to the Secretariat if these fees have 
been maintained or terminated.  
                                                
9 WTO document WT/ACC/VUT/17, p.23, 11 May 2011.  
10 WTO document WT/ACC/VUT/17, p.23, 11 May 2011.  
11 WTO document WT/ACC/VUT/17, p.17, 11 May 2011.  
0% 5% 10% 15% 20% 25% 30% 35% 40%
Total
WTO agricultural products
   Animals and products thereof
   Dairy products
   Fruit, vegetables, and plants
   Coffee and tea
   Cereals and preparations
   Oils seeds, fats, oil and their products
   Sugars and confectionary
   Beverages, spirits and tobacco
   Cotton
   Other agricultural products, n.e.s.
WTO non-agricultural products
   Fish and fishery products
Source:  WTO Secretariat calculations, based on data from the authorities.Chart 4.4 [Average tariff rates of WTO agricultural groups, and fish and fishery products]WT/TPR/S/378 /Rev.1  • Vanuatu  
 
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  4.1.1.6   Selected subsectors  
4.1.1.6.1   Coconut  
4.20.   Coconuts account for most of the land area devoted to cro ps in Vanuatu. A 2007 agriculture 
census recorded around 9.7 million coconut trees planted on about 119,384 hectares of land, 
representing 24% of good agricultural land.12 The authorities state that Vanuatu had a capacity to 
produce 760 million coconuts per year while in reality around 300 million coconuts were produced. 
This is the result of an ageing population of trees that were mostly planted during the colonial era, 
and other factors such as land disputes.13 In addition, coconuts are underutilized in Van uatu. It is 
estimated that 58% of coconuts are never harvested, as they are left to germinate in the 
plantations.14  
4.21.   In 2016, about 40% of Vanuatu exports came from the coconut harvest : copra accounted for 
32% of total merchandise exports, and coconut oil for 11%.  The bulk of copra was exported to India, 
Indonesia and the Philippines.15 Despite this dominancy, coconut rehabilitation programmes 
remained stagnant over the last 30  years in all major copra producing islands, with only a very small 
percentage of f armers engaging in coconut replanting programmes. The authorities state that they 
were making efforts to replant trees: in 2016, a total of 120,000 coconut seed nuts were planted 
and, in 2017, a total of 119,000 coconut seed nuts were distributed and plant ed. Copra production 
recovered strongly in 2016, following a rise in the average price (from VT 35,000 to VT  51,000 per 
tonne).16  
4.22.   Vanuatu Copra & Cocoa Exporters Ltd (VCCE) exports 52% of the copra and 80% of the cocoa 
in Vanuatu. It provides finance to ag ents to purchase copra from farmers from all the islands.17 The 
supply of raw materials is the most significant constraint on exports, followed by inadequate 
equipment, shortage of skills and shortage of working capital.18  
4.23.   A Vanuatu National Coconut Strateg y 2016 -2025 was issued in 2016 by the DARD  as a 
roadmap to revitalize the coconut sector. Its focus is to diversify the sector rather than relying on 
copra as the only coconut based product. In particular, considering the challenges associated with 
shippin g and transportation costs and the distance from major markets, the Strategy highlights the 
linking of the coconut sector to the tourism industry.19 
4.1.1.6.2   Cocoa  
4.24.   In Vanuatu, around 2,500 hectares of land is used for cocoa plantations. Farmers tend to 
have very sma ll plots, and production has been limited due to low yield, as trees were old and 
unproductive.20 
4.25.   The DARD aims to facilitate the development of cocoa production and trade through, inter alia, 
distributing cocoa seeds for planting, improving cocoa quality, and encouraging small scale cocoa 
processing. Cocoa seedlings and planter bags were distributed to farmers: 500,000 cocoa seedlings 
in 2016 (200,000 in 2017), and 300,000 planter bags in 2016 (100,000 in 2017).  
4.1.1.6.3   Kava  
4.26.   Kava is a plant of the Pacific whose ro ots are used to produce a drink with anaesthetic and 
spiritual properties. Domestic demand for kava was estimated to be about three times its export 
value. This is likely due to the high demand in the domestic market from a growing tourism sector. 
The shar e of kava exports to total merchandise exports varies significantly, from 4.2% in 2015 to 
                                                
12 Vanuatu National Coconut Strategy 2016 -2025.  
13 MALFFB online information. Viewed at: https://malffb.gov.vu/index.php?id=1 . 
14 Vanuatu National Coconut Strategy 2016 -2025.  
15 Vanuatu National Coconut Strategy 2016 -2025.  
16 Vanuatu Statistics Office (2017) , Statistics Release: Gross Domestic Product 2016 . 
17 Government of Vanuatu, Vanuatu Business Cost Competitiveness.  
18 Government of Vanuatu, Vanuatu Business Cost Competitiveness . 
19 Vanuatu National Coconut Strategy 2016 -2025.  
20 Vanuatu Statistics Office (2017), Statistics Release: Gross Domestic Product 2016 . WT/TPR/S/378 /Rev.1  • Vanuatu  
 
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  22% in 2016. This jump may be attributed to the lift of a ban by the European Union on kava 
importation.21  
4.27.   Quality and quantity are considered by the authorities as t wo of the challenges facing the 
kava sector. Vanuatu has around 80 varieties of kava, and fast -growing varieties are often not 
recommended for the beverage market. Thus, the MALFFB issued a National Kava Strategy 
2016-2025, to improve quality.22 Measures su ggested in the Strategy include the development of a 
Kava Quality Management Plan, and the translation of the Kava Act into Bislama (the local language 
in Vanuatu). In 2015 and 2016, the DARD carried out a kava campaign, aimed at promoting the 
10 best kava  varieties. The Kava Act was developed in 2015 with at the aim of improving kava 
quality.   
4.28.   The Government  is also linking the development of kava production and trade with the tourism 
sector. Kava bars are reserved for Vanuatu's citizens (Section 2.4.2).  
4.1.1.6.4   Cattle  
4.29.   Cattle production has been growing in importance in recent years. The number of heads 
slaughtered recovered in 2016 after having been in decline since 2013 (Chart 4.5).  
Chart 4.5 Slaughtered cattle , 2012 -16 
 
Source:  Vanuatu National Statistics Office. Statistics released on 18 January 2018.  
4.30.   Commercial livestock production has been the mainstay of meat protein provider s to Vanuatu 
and export markets. Th e sector is constrained by the lack of farm land  and properly managed land 
leases , ambiguous incentives schemes set up by  the Government , as well as a lack of access to 
capital. With a view to facilitating the development of this subsector, the Government issued its 
National Livestock Policy 2015 -2030 in  2015.23 
4.1.2   Fisheries  
4.1.2.1   Features  
4.31.   Data from the Vanuatu National Statistics Office indicate that , in 2016, the fisheries sector 
contributed 3.9% to GDP, and , as of March 2017, live fish trade contributed 3% to total exports. 
About 70% of rural households were en gaged in fishing activities.24 In addition, access fees paid by 
                                                
21 MALFFB online information: " With a ban imposed by the European Union lifted soon due to legal 
action, its importance as a cash crop is gradually accelerating further" . Viewed at: 
https://malffb.gov.vu/index.php?id=1 . 
22 Vanuatu National Kava Strategy 2016 -2025.  
23 Vanuatu National Livestock Policy 2015 -2030. Viewed at: 
https://pafpnet.spc.int/pafpnet/images/articles/policy -
bank/vanuatu/National%20Livestock%20Policy_Dec2015%2027_01_16.pdf . 
24 FAO online information, Fishery and aquacultu re country profiles – the Republic of Vanuatu . Viewed 
at: http://www.fao.org . 
02,0004,0006,0008,00010,00012,00014,00016,00018,00020,000
2012 2013 2014 2015 2016Number of heads
Weight in tonnes
Source:  Vanuatu National Statistics Office.  Statistics released on 18th January 2018.Chart 4.5 [Slaughtered cattle]WT/TPR/S/378 /Rev.1  • Vanuatu  
 
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  foreign fishing vessels have been making significant contributions to government revenue: in 2017, 
the Vanuatu Fisheries Department collected VT  441 million in license fees from both foreign and 
Vanuatu -flagged vessels, most of which were foreign owned.  
4.32.   Commercial food fish catch (i.e. deep -water demersal fish, reef fish and coastal pelagic) is 
sold mainly in urban and suburban parts of Vanuatu. Vanuatu also exports live non -food fish for 
aquarium purposes.  
4.33.   Offshore fisheries target species including certain species of tuna (albacore, skipjack, and 
yellow fin) and giant squid. Coastal fisheries target species including reef fish, coastal pelagic fish 
and invertebrates that include trochus, lob sters, coconut crabs and other crustaceans. Both fishing 
and trading activities of  sea cucumber (until a new management system is set up) and green snails 
(2017 -2020) were banned in 2017, because stocks were low.  
4.34.   A licence is required for commercial fishin g. Deep bottom longline fishing and the use of scuba 
gear for fishing is banned. According to the authorities, difficulties facing the development of the 
fisheries sector include a lack of data (e.g. data on species caught, the size and/or length of the fi sh 
caught, the total number of fishermen and fishing vessels, and the frequency of fishing trips), and 
the difficulty for fishermen to get bank loans and insurance coverage.  
4.35.   Infrastructure and transport  links among islands also remain a challenge, adding t o the cost 
for fishermen to access markets. The lack of sufficient infrastructure in terms of roads, wharfs and 
market facilities, and the lack of proper ice plants and storage facilities led to difficulties in quality 
control, as well as low income for fi shermen.25 The authorities state that Vanuatu currently has no 
fish processing factories. In addition, the majority of Vanuatu's fishing vessels are open skiffs, 
ranging in length from 5 to 8 metres. While such vessels are affordable and economical to opera te, 
they are not suitable for long fishing trips.  
4.1.2.2   Fisheries trade  
4.36.   Vanuatu generally has a trade surplus in fish and fish products , although their export value 
declined significantly in 2016 (Table 4.1).   
Table 4.1 Imports and exports of fish and fisheries products, 2012 -16 
 2012  2013  2014  2015  2016  
Exports (VT million)       
Live fish  136 88 142 116 53 
Shellfish 27 30 44 27 21 
Fish, other than live  185 139 10 0 14 
Share in total merchandise exports (%)       
Live fish  2.7  2.4  2.3  2.7  1.0  
Shellfish 0.5  0.8  0.7  0.6  0.4  
Fish, other than live  3.6  3.8  0.2  0.0  0.3  
Source:  FAO estimates, and the National Statistics Office of Vanuatu.  
4.37.   The authorities state that Vanuatu's main export markets are Japan for tuna fish and the 
United States for live non -food fish. Vanuatu imports fish mainly from New Zealand and Australia.  
4.1.2.3   Domestic policies  
4.1.2.3.1   Institutional and legislative framework  
4.38.   The Vanuatu Fisheries Department (VFD)  under the MALFFB aims to " ensure sustainable 
management, development and conservation of fish resources to achieve maximum social and 
economic benefits to Vanuatu for the  present and future generations". Its core activities include 
formulating policies, regulations and legislative framewo rk, providing scientific and development 
                                                
25 MALFFB online information, Vanuatu National Deep -Bottom Fish Fishery Management Plan . Viewed at: 
https://www.cbd.int/doc/meetings/mar/soiws -2016-05/other/soiws -2016-05-vanuatu -13-en.pdf . WT/TPR/S/378 /Rev.1  • Vanuatu  
 
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  advice to fisheries development, and where necessary assisting in supporting fisheries development 
programmes.  
4.39.   The Fisheries Act No. 10 of 2014  is the primary legal instrument for the management, 
development and co nservation of fisheries resources. The Fisheries Regulation Order No. 28 of 2009  
provides the regulatory framework. In addition, there are a number of acts regulating the fisheries 
sector (Table 4.2 ). 
Table 4.2 Fisheries laws  
Acts Descriptions  
Decentralization and Local Government 
Regions Act (1997)  Empowers provinces to pass by -laws regulating fishing activities 
within their six -mile provincial waters, and to issue fishing 
licences  
Environmental Protection and 
Conservation Act CAP 283  Contains a range of general provisions relating to the protection 
and conservation of the environment. It provides for the 
establishment of community conservation areas and of  
environmental impact assessments  
Maritime Zone Act  No. 6 of 2010  Establishes a series of zones in Vanuatu waters from the 
archipelagic baseline. From this baseline the seaward limits of a 
State's territorial waters, contiguous zone and exclusive 
economic zone are measured  
Foreign Investment Promotion Act, 2010  Provides for activities and industries reserved exclusively for 
citizens of Vanuatu. For instance, fishing within the archipe lagic 
waters is reserved for Vanuatu's citizens  
Source:  MALFFB online information, Vanuatu National Deep -Bottom Fish Fishery Management Plan . Viewed 
at: https://www.cbd.int/doc/meetings/mar/soiws -2016-05/other/soiws -2016-05-vanuatu -13-en.pdf . 
4.40.   When the Fisheries Act was promulgated in  2014, Vanuatu was removed from the EU illegal, 
unreported and unregulated (IUU) fishing activities yellow card, which had been issued by the 
European Union in 2012. Also in 2014, a Fisheries Management Advisory Council was established to  
provide recommendations to the Director of the VFD on policy matters relating to fisheries 
conservation and management.  
4.41.   Vanuatu's Maritime Act established Vanuatu as an open registry nation for ships. Up till now, 
the Vanuatu International Shipping Regist ry (VISR) has had 94 fishing vessels registered. According 
to the Fisheries Act 2014, there are two types of licences for vessels conducting commercial fishing 
or related activities in Vanuatu waters:  
a. a local fishing licence for vessels fully owned by a V anuatu citizen; and  
b. a foreign fishing licence for vessels not fully owned by a Vanuatu citizen (Article 35).  
4.42.   These licences are valid for a maximum of one year. Depending on the type of licence, fees 
are levied ( Table 4.3).  Foreign fishing vessels (50% do mestic landing or 100% overseas landing), 
locally based foreign fishing vessels, and local fishing vessels pay different fees to the VFD.   
Table 4.3 Fishing licence fees  
Fees for foreign fishing licences  
Fishing category  Size of vessel in 
gross registered 
tons (GRT)  Fees payable 
(50% domestic 
landing)  
(US$)  Fees payable 
(100% 
overseas 
landing)  
(US$)  Locally based 
foreign fishing 
vessel (US$)  
Tuna longline  <100 GRT  20,000  45,000  12,000  
≥100 GRT and 
<400 GRT  30,000  60,000  15,000  
≥400 GRT  67,000  67,000  21,000  
Purse seine  - 50,000  50,000  20,000  
Pole and line  - 8,000  8,000  4,500  
Other methods  - 8,000  8,000  4,500  
Research fishing   5,000  5,000  5,000  
Exploratory and test 
fishing   8,000  8,000  5,000  WT/TPR/S/378 /Rev.1  • Vanuatu  
 
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  Fees for foreign fishing licences  
Seasonal sport fishing 
(3 months)   n.a. n.a. 500 
Fees for local fishing 
vessel licences  Efate and Luganville, excluding 
offshore islands and rural Santo: 
licence fees (VT)  Other islands: licence fees (VT)  
≤ 8 metres  20,000  10,000  
> 8 metres  20,000 + 5,000 per metre over 
8 metres  10,000 + 2,500 per metre over 
8 metres  
Sport fishing  50,000  30,000  
n.a. Not applicable.  
Source:  The VFD and the Pacific Islands Forum Fisheries Agency (2014), Revised Tuna Fishery Management 
Plan. Fisheries Regulations Order No. 22 of  2009, schedules 3, 5, and 11.  
4.43.   According to the Fisheries Regulations Order No. 22 of 2009, after each fishing trip, operators 
of foreign fishing vessels must pay: up to 5% of the total value of the catch caught within Vanuatu 
waters, and landed domestical ly; or 5% of the total value of the catch caught within Vanuatu waters, 
and landed overseas. According to the authorities, however, these measures have not been applied 
in practice .  
4.44.   In 2017, the MALFFB issued the National Fisheries Sector Policy 2016 -2031.26 The focus is on 
sustainable stock management and biodiversity conservation, as well as:  
a. advancing small -scale sustainable domestic fisheries and aquaculture development using 
local operations; and  
b. acknowledging the need for larger commercial fishing ve ntures to promote employment 
and improve livelihoods, and ensure food security.  
4.45.   Under the Policy, measures regulating the fisheries sector include mainly: a licensing 
programme for all commercial fishing vessels; limitations on fishing operations; and a to tal allowable 
catch for foreign fishing, locally based foreign, local, and sport fishing vessels. Many of the measures 
were adopted in the management plans for different fisheries subsectors.  
4.1.2.3.2   Management plans  
4.46.   The Fisheries Act requires the Director of the VFD to prepare a plan for the management and 
development of all designated fisheries.  Several plans have been prepared as follows.  
4.1.2.3.2.1   The National Deep -Bottom Fish Fishery Management Plan  
4.47.   In 2016, the VFD launched its National Deep -Bottom Fish Fishery Manage ment Plan, which 
gives details of main management measures, such as: licensing; area restriction; data collection; 
and gear restriction (Table 4.4).27 
Table 4.4 Main measures  
Main measures  Description  
Licensing  Vessels ≥8 met res long must apply for a licence  
Area restriction  Certain fishing vessel sizes are restricted to certain areas  
Data collection  Data collection in fishery has been implemented through two means: licence 
applications; and duty-free fuel as an incentive for fisher men to submit dataa 
Gear restriction  A ministerial order (Conservation and Management Measure for Deep -Bottom Fish 
Fishery Order No. 87 of 2012) prohibits the use of deep -bottom longline gear and 
restricts the number of hooks on a vertical dropline to 10  
a The authorities indicated that duty -free fuel to fishing vessels was discontinued in 2017.  
Source:  MALFFB online information, Vanuatu National Deep -Bottom Fish Fishery Management Plan. Viewed 
at: https://www.cbd.int/doc/meetings/mar/soiws -2016-05/other/soiws -2016-05-vanuatu -13-en.pdf . 
                                                
26 MALFFB (2017), Vanuatu National Fisheries Sector Policy 2016 -2031.  
27 MALFFB online information, Vanuat u National Deep -Bottom Fish Fishery Management Plan . Viewed at: 
https://www.cbd.int/doc/meetings/mar/soiws -2016-05/other/soiws -2016-05-vanuatu -13-en.pd f. WT/TPR/S/378 /Rev.1  • Vanuatu  
 
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  4.48.   Under the VIPA Act, deep bottom snappers are reserved for citizens of Vanuatu. In a ccordance 
with the Deep -Bottom Fish Fishery Management Plan issued by the MALFFB, two types of licences 
are applied in this type of fishing:  
a. a local fishing licence, issued by the Director of the VFD and required for all fishing vessels 
involved in the ha rvesting of deep -bottom fish species , with a fee collected by the VFD; 
and  
b. a provincial access permit, issued by the relevant provincial government, for all fishing 
vessels wishing to conduct fishing and fishing related activities , with fees collected by the 
relevant provincial government.28  
4.49.   The number of licences is limited to the total number of vessels listed in the vessel register. 
The Director of the VFD monitors the deep -bottom fish fishery catch in all locations comprising more 
than 20% of issued li cences. The ruby snapper, the saddle -back snapper, and the comet grouper 
are indicator species; a minimum of 50% of the catch of these species must be measured for length 
and weight, and their otoliths must be extracted. No further licences may be issued i f the Director 
determines that:  
a. 25% of the ruby snapper catch has a fork length of less than 54 cm;  
b. 25% of the saddle -back snapper catch has a fork length of less than 33 cm; or  
c. 25% of the comet grouper catch has a fork length of less than 44 cm.  
4.50.   In th ese cases, licences are not issued until appropriate limit reference points for the 
deep-bottom fish fishery are set and accepted, or the trend in the proportion of juveniles in the catch 
decreases to below the above levels over a five -year period.  
4.51.   If the latest annual catch record of the deep -bottom fish fishery in the fishery waters clearly 
exceeds the average yearly catch record of the past five years, the Director will review the impact 
of this catch, and may reduce the total number of licences approved . The Director may apply 
additional limits to fishing with the approval of the Minister  of the MALFFB and after consultation 
with the provincial governments, the relevant fishers' associations, key stakeholders and the 
Fisheries Management Advisory Council  (FMAC), if he/she is of the opinion that it is in the interests 
of the sustainability or economic viability of deep -bottom fish fishery in Vanuatu.  
4.52.   The Plan also outline s an area restriction, based on the size of the fishing vessel (Table  4.5). 
Table 4.5 Area restriction for local fishing vessels  
Fishing category  Fishing vessel  
 <10 metres  ≥10 metres  >15 metres  
Artisanal fishing vessels  No restriction  Outside 6 nautical miles Outside 12 nautical miles 
Commercial fishing 
vessels (e.g. Lady 
Christina, Ocean Fishing 
Ltd.) Comply with 
provincial by -laws, if 
applicable  Outside 6 nautical miles Outside 12 nautical miles 
Source:  MALFFB online information, Vanuatu National Deep -Bottom Fish Fishery Management Plan. Viewed 
at: https://www.cbd.int/doc/meetings/mar/soiws -2016-05/other/soiws -2016-05-vanuatu -13-en.pdf . 
4.53.   Regarding data collection , the VFD is to car ry out a survey in collaboration with relevant 
provincial governments, fishermen's associations, individual fishermen and communities to 
determine the total number of fishing vessels engaged in each type of fishing; and the VFD is to 
design, develop, updat e and maintain a register of fishing vessels involved in each type of fishing.29 
The authorities indicate that the survey has not yet been conducted.  
                                                
28 MALFFB online information, Vanuatu National Deep -Bottom Fish Fishery Management Plan . Viewed at: 
https://www.cbd.int/doc/meetings/mar/soiws -2016-05/other/soiws -2016-05-vanuatu -13-en.pdf . 
29 MALFFB online information, Vanuatu National Deep -Bottom Fish Fishery Management Plan . Viewed at: 
https://www .cbd.int/doc/meetings/mar/soiws -2016-05/other/soiws -2016-05-vanuatu -13-en.pdf . WT/TPR/S/378 /Rev.1  • Vanuatu  
 
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  4.1.2.3.2.2   Revised tuna fishery management plan  
4.54.   In 2014, the VFD, with the assistance of the Pacific Islands Forum Fisheries Agency (FFA), 
issued a revised tuna fishery management plan. The plan revised the management limits in 
Vanuatu's longline fishery exclusive economic zone (EEZ), taking into accoun t bio -economic 
analyses. The plan stipulates various strategies for the conservation and management of Vanuatu's 
fishery resources, through imposing a maximum number of licences and total allowable catch for 
some tuna species, as well as designating areas closed to or restricting fishing. It revised the 
licensing fees for foreign fishing vessels, locally based foreign fishing vessels, and local fishing 
vessels (Table 4.3). According  to the plan, no  more than 70 fishing licences  are to be issued each 
year un der Vanuatu's longline fishery EEZ.30 If the VFD receives more applications for licences, 
priority is given to: first, local fishing vessels; second, locally -based foreign fishing vessels; and 
third, foreign fishing vessels.  The authorities state that the n umber of fishing licences fell from 107  in 
2012 to 69 in 2015, then rose to 90 in 2016 and 171 in 2017.  
4.1.2.4   Border measures  
4.55.   The simple average MFN tariff rate on fish and fishery products is 15.4% in 201 8, higher than 
that on non -agricultural tariff lines (sim ple average 8%), but lower than that on agricultural tariff 
lines (simple average 16.9%) . Tariff rates range fr om zero  to 30%, with 3.4% of fishery tariff lines 
duty free.  More than 80% of all fishery tariff lines are at a rate of 15%. Six lines are at a t ariff rate 
of 30%:  
a. HS 0306.15: frozen Norway lobsters;  
b. HS 0306.16: frozen cold water shrimps and prawns;  
c. HS 0306.17: frozen other shrimps and prawns;  
d. HS 0306.34: live, fresh or chilled Norway lobsters;  
e. HS 0306.39: other, including flours, meals and pellets  of crustaceans, fit for human 
consumption;  and 
f. HS 0306.92: lobsters.  
4.56.   Export of commercial species of fisheries products requires a licence, which is valid for 
one year. Currently sea cucumber and green snail s are banned from fishing and trade, and exports 
of coconut crab and rock lobster are prohibited.  
4.1.2.5   Support  
4.57.   During the review period, the following supports were provided  to Vanuatu's tuna fish sector:  
a. Duty-free concessions: to encourage participation in the development of the domestic tuna 
indust ry, all locally -based vessels with a valid commercial fishing licence are eligible for 
duty exemption on fuel and fishing gear , including bait, fishing equipment and spare parts , 
for their fishing operation s. 
b. Infrastructure development: the VFD gives prefe rence to infrastructure development plans 
when allocating its budget.  
c. Foreign investment: the VFD provides information and support to the Vanuatu Foreign 
Investment Board to attract foreign investment in the tuna industry. Joint ventures with a 
significant  involvement of Vanuatu companies and individuals are given preference.  
                                                
30 VFD and Pacific Islands FFA (2014), Revised Tuna Fishery Management Plan,  August.  WT/TPR/S/378 /Rev.1  • Vanuatu  
 
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  d. Legislation to facilitate fish exports: the Tuna Management Advisory Committee (TMAC) 
actively supports the development and implementation of health and other legislation to 
ensure tha t food safety requirements of importing countries are met.  
e. Vanuatu 's citizens  crewing requirements: all Vanuatu -flagged fishing vessels and all 
locally -based foreign fishing vessels are obliged to employ Vanuatu 's citizens  as officers 
and fishing crew, and the employ ment of  Vanuatu 's citizens  on foreign fishing vessels 
operating in the EEZ is strongly encouraged. Local vessels must be crewed by 
Vanuatu 's citizens,  includ ing masters and engineers  wherever possible.31  
4.58.   According to FAO online information, fishery was a significant source of rural income on certain 
islands in the 1980s and 1990s. This was achieved because the Government used technical 
assistance funds to subsidize the fishery sector for over 15 years. However, when donor support 
expired, mos t of the rural fishing centres were closed. Fishery operations continued on the islands 
of Efate, Espiritu Santo and Malekula, where fish transportation and other operational costs make 
fishery commercially viable.32 
4.2  Mining and Energy  
4.2.1   Electricity  
4.59.   The Depart ment of Energy , within the Ministry of Climate Change and Natural  Disaster , is 
responsible for the development of energy policies, legislation and regulations to guide the 
development of energy services in Vanuatu.33 In 2013, the Government developed a Nati onal Energy 
Road Map (NERM) with a view to energizing Vanuatu's growth and development through the 
provision of secure, affordable, widely accessible, high quality, and clean energy services. The NERM 
was updated in 2016; according to it, 83% of rural hous eholds still lacked access to electricity, 
compared to 20% of urban households.34 A significant constraint for business in Vanuatu is the 
availability, cost and reliability of electricity and other utilities.35 
4.60.   The Utilities Regulatory Authority Act No. 11 o f 2007 established the Utilities Regulatory 
Authority (URA). In accordance with the Act, the URA regulates certain utilities, in particular the 
provision of electricity and water services. Its core functions include: monitoring and enforcing 
existing conce ssion contracts, which include checking price adjustments, monitoring service 
standards and technical performance; renegotiating tariffs with utility providers; and managing 
consumer complaints.36 Other relevant legislation includes: the Electricity Supply Act No. 21 of 2000 
(CAP 65), the Government Contracts and Tenders Act No. 10 of 1998, the Tenders Regulations Order 
No. 40 of 1999, and the Public Finance and Economic Management Act No. 6 of 1998.37 
4.61.   Between 2006 and 2016, the average annual growth rate of electricity demand was 3.4%, 
while that for annual customer number growth was 5.8% (Chart 4.6). The  authorities indicate that, 
over the 10 -year period, compared with an annual GDP growth rate of 3%, a 1% increase in GDP 
was associated with a 1.1% increase in electricity consumption. Electricity demand dropped 
significantly in 2015 due to Cyclone Pam. In 2016, the economy, and the electricity demand, 
gradually recovered.  
                                                
31 FAO online information, Fishery and aquaculture country profiles – the Republic of Vanuatu . Viewed 
at: http://www.fao.org . 
32 FAO online information. Viewed at: http://www.fao.org/fi/oldsite/FCP/en/VUT/profile.htm . 
33 DOE online information. Vi ewed at: https://doe.gov.vu/index.php?r=site/about . 
34 Department of Energy (2016), Updated Vanuatu National Energy Road Map 2016 -2030, June.  
35 Government of Vanuatu, Vanuatu Business Cost Competitiv eness.  
36 URA (2017), Preliminary Decision and  Notice of Request for Comments – Case U -0006-15 in the 
matter of UNELCO's electricity tariff review, September. Viewed at:  
http://www.ura.gov.vu/attachments/article/100/U -0006-15%20 -
%20URA%20Preliminary%20Decision%20UNELCO%20Electricity%20Tariff%20Review.pdf . 
37 URA online information. Viewed at: 
http://www.ura.gov.vu/index.php?option=com_content&view=article&id=52&Itemid=226&lang=en . WT/TPR/S/378 /Rev.1  • Vanuatu  
 
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  Chart 4.6 Electricity demand and customer  numbers, 2006 -16 
 
Source:  URA (2017), Preliminary Decision and Notice of Request for Comments – Case U -0006-15 in the 
matter of UNELCO's electricity tariff review, September. Viewed at: 
http://www.ura.gov.vu/attachments/article/100/U -0006-15%20 -
%20URA%20Preliminary%20Decision%20UNELCO%20Elec tricity%20Tariff%20Review.pdf . 
4.62.   The Government granted three electricity concessions for Port Villa, Malekula and Tanna to 
UNELCO (Concessionaire) in 1986 and 2000 under various concession contracts.38 These contracts 
specified rules regarding service covera ge, quality of service, and the maximum tariffs to be charged. 
In 2011, the Pernix Group  – a power company from the United States – was accepted to provide 
electricity services in Luganville, Santo Island, including the generation, transmission, distributi on, 
and billing and collection of payments through its local subsidiary, Vanuatu Utilities and 
Infrastructure (VUI) Limited. In addition, a variety of small -scale arrangements exist for the supply 
of electricity.  
4.63.   By September 2017, the main energy source was diesel combustion, which contributed to 
about 80% of the total electricity generated. Windmills generated about 9% of electricity, while 
hydro and solar power contributed about 8% and 3%, respectively.39  
4.64.   The G overnment , with the support of the private sector and donor partners , has launched  five 
renewable  projects , which are  now in the completion stage . Another two are about to be built . 
UNELCO has sought alternative sources to supplement its traditional means of power supply source, 
including using coc onut oil. In Luganville, hydropower generates up to 84% of power during the 
rainy season. The VUI provided micro -solar installations to over 155 off -grid households, and 
maintains these facilities at zero cost to the users.  
4.65.   According to UNELCO, electricit y tariffs are based on the conditions stipulated in the 
concession agreement with the Government, and are regularly reviewed (about every five years) by 
the URA. The last tariff review took place in 2010/11. UNELCO tariffs are adjusted monthly, mainly 
to reflect diesel price changes. The current tariff structure adopted by UNELCO contains separate 
customer categories. Each category has different fixed and variable cost charges, and the charges 
are referenced to price P (Table 4.6). The first block small dom estic customers are supported by 
cross subsidization: they pay 34% of the actual costs, while the third block small domestic customers 
pay three times the actual cost. High voltage, business licence holders, and other low voltage users 
also pay the fixed t ariff per kilovolt ampere per month.  
                                                
38 UNELCO  is a subsidiary of France's Suez. VIPA online information. Viewed at: 
http://www.investvanuatu.org/wp/investing/infrastructure/ . 
39 URA (2017), Vanuatu Monthly Energy Market Snapshot  in September 2017. Viewed at: 
http://www.ura.gov.vu/attachments/article/106/2017%2009 -
%20Monthly%20Energ y%20Market%20Report%20 -%20September%202017%20 -%20English.pdf . 
02,0004,0006,0008,00010,00012,00014,00016,00018,00020,000
010,00020,00030,00040,00050,00060,00070,000
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016Demand (MWh)
Customer numbers
Source:  URA (2017), Preliminary Decision and Notice of Request for Comments –Case U -0006-15 in the matter of 
UNELCO's electricity tariff review, September. Viewed at:   http://www.ura.gov.vu/attachments/article/100/U -
0006-15%20 -%20URA%20Preliminary%20Decision%20UNELCO%20Electricity%20Tariff%20Review.pdf  
[26/02/2018]Chart 4.6   Electricty demand and customer nubmers, 2006 -16
(MWh) (Numbers)WT/TPR/S/378 /Rev.1  • Vanuatu  
 
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  Table 4.6 Electricity tariff structure for Port Vila, Malekula and Tanna  
Type of customer  Type of variable tariff  Variable tariff 
level  
Per kWh/month  Fixed tariff per 
kVa/month  
Small domestic customers  1st block (0 –60 kWh)  0.34 × P  
0 2nd block (61 –120 kWh)  1.21 × P  
3rd block (121+ kWh)  3 × P  
Other low voltage users  Single block  1.21 × P  5 × P  
Business licence holders  Single block  0.87 × P  20 × P  
Sport s fields Single block  1 × P  0 
Public lighting  Single block  0.54 × P  0 
High voltage  Single block  0.70 × P  25 × P  
Source:  UNELCO Tariff Application V2 2016 -2021. The URA (2017), Preliminary Decision and Notice of 
Request for Comments – Case U -0006-15 in the matter of UNELCO's electricity tariff review, 
September. Viewed at: http://www.ura.gov.vu/attachments/article/100/U -0006-15%20 -
%20URA%20Preliminary%20Decision%20UNELCO%20Elec tricity%20Tariff%20Review.pdf . 
4.66.   According to a UNELCO report, electricity bills paid by domestic customers contain: VAT at a 
rate of 15%, a fixed charge of 3.9%, a fuel excise tax of approximately 8%, a subsidy for small 
domestic customers of approximately 3%, a subsidy for Tanna and Malekula concessions of about 
3%, funding for rural electrification of approximately 3%, and a new (from 2017) URA surcharge of 
2%. This surcharge, mandated on all utility invoices, applies to the other elements that constitute 
the utility invoices, and the proceeds are remitted to the URA.40 
4.67.   The VUI does not have a concession agreement with the Government. It is an operation and 
management arrangement. Tariffs in Luganville are set by the URA, not by the VUI. The authorities 
indicate that electricity tariffs in Luganville are much lower than in Port Vila, Malekula and Tanna, as 
electricity is mainly generated by hydropower in Luganville.  
4.68.   According to a report by the URA on the regional comparison of electricity bills, in June 2017 , 
small domestic customers in Vanuatu were charged significantly less than the regional average, due 
to cross -subsidization from large and business customers. Other low voltage users, who were 
relatively high domestic users in Vanuatu, were charged signifi cantly more than the regional 
average, and subsidize other users; some business customers paid below  the Pacific average rate, 
while some paid over it.41 
4.3  Manufacturing  
4.69.   In Vanuatu's economy, the role of manufacturing is limited. In 2016, manufacturing 
accoun ted for 3.4% of GDP (3.8% in 2012).  
4.4  Services  
4.4.1   Main features and GATS commitments  
4.70.   The services sector accounts for about two thirds of Vanuatu's GDP (Table 4.7). In 2016, the 
main services subsectors were: wholesale and retail trade and repair of motor vehic les, government 
services, finance and insurance, and real estate. During the review period, growth rates of value 
added in many services subsectors were rather volatile, particularly the transport and storage 
services; the professional, scientific, technic al and administrative services; and the information and 
communication services. The services sector, notably travel (particularly personal travel), is a net 
foreign exchange earner (Table 1.5). Services exports accounted for 87% of Vanuatu's total exports 
(of goods and services) in 2017 (Table 1.4).  
                                                
40 UNELCO online information. Viewed at: https://www.unelco.engie.com/en/electricity/electricity -rates. 
41 URA (201 7), Comparative Report Pacific Region Electricity Bills , June. Viewed at: 
http://www.ura.gov.vu/attachments/article/106 /Electricity%20Price%20Comparison%20 -
%20Pacific%20Area%20June%202017%20(2).pdf . WT/TPR/S/378 /Rev.1  • Vanuatu  
 
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  Table 4.7 Vanuatu's services indicators, 2012 -16 
 2012  2013  2014  2015  2016  
Services (% of current GDP)  65.3 64.9 64.5 65.4 66.6 
 Wholesale and retail tr ade;  
 repair of motor vehicles  18.4 18.1 18.8 19.1 20.3 
 Transportation and storage  5.6 5.2 4.9 3.9 4.2 
 Accommodation and food services  5.3 5.4 5.2 4.5 4.6 
 Information and communication  4.0 4.4 4.5 4.6 4.6 
 Finance and insurance  7.1 7.7 7.4 8.7 8.7 
 Real estate  7.3 7.2 7.4 8.0 7.8 
 Profess ional, scientific, technical  and 
 administrative services  2.7 2.7 2.6 2.6 3.4 
 Government services  12.9 12.4 11.7 12.1 11.3 
 Education, health, recreation, and 
 other services  2.0 1.9 2.0 1.9 1.8 
Services (% growth rate)  4.4 0.1 2.4 2.0 2.9 
 Wholesale and retail trade;  
 repair of motor vehicles  6.6 -0.8 5.1 3.5 2.4 
 Transportation and storage  28.9 -22.6 -5.9 -4.0 1.3 
 Accommodation and food services  4.4 3.7 1.3 -9.7 3.7 
 Information and communication  -8.4 8.3 7.9 7.0 6.0 
 Finance and insurance  -0.1 8.1 -0.3 6.8 0.2 
 Real estate  9.1 1.8 2.7 1.8 3.6 
 Professional, scientific, technical  and 
 administrative services  -20.0 -0.9 -1.2 9.7 18.3 
 Government services  2.0 6.4 1.8 1.6 1.8 
 Education, health, recreation, and 
 other services  1.4 -5.6 8.8 -4.1 -7.4 
Source:  Vanuatu National Statistics Office online information; and data provided by the authorities . 
4.71.   Under the GATS, Vanuatu scheduled horizontal commitments on commercial presence and 
the presence of natural persons for all sectors included in its schedule.42 Regarding commercial 
presence, government approval is required for all foreign investors under the Foreign Investment 
Act No. 15 of 1998 and its amendments, while the purchase o f real estate is subject to limitations. 
The presence of natural persons is unbound, except for the entry and temporary stay of natural 
persons with managerial and technical skills, which are in short supply in Vanuatu or of those who 
fall within the categ ories of: business managers; intra -corporate transferees; or certain 
professionals.  
4.72.   Vanuatu has made specific commitments under GATS in almost all services sectors:  
a. business services ( professional, computer and related, and other business services ); 
b. comm unication services (courier, telecommunication, and audiovisual services);  
c. construction and related engineering services (general construction work for buildings, 
and general construction work for civil engineering);  
d. distribution services (commission age nts, wholesale trade, retailing, and franchising 
services);  
e. education services (primary education, secondary education, higher education, adult 
education, and other education services);  
f. environmental services (sewage, refuse disposal, and sanitation and similar services);  
g. financial services ( all insurance and insurance related services,  and banking and other 
financial services );  
h. health related and social services (hospital services, and social services);  
                                                
42 WTO document WT/ACC/VUT/17/Add.2, 11 May 2011.  WT/TPR/S/378 /Rev.1  • Vanuatu  
 
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  i. tourism and travel -related services (hotels and restaurants including catering, and travel 
agencies and tour operators services) ; and  
j. transport services (air transport services).  
4.73.   Vanuatu's list of Article II (MFN) exemptions are cross -sectoral MFN exemptions; citizens and 
permanent residents of MSG countries may be granted a waiver from the normal investment and 
right of temporary sojourn obligations of Vanuatu law.  
4.4.2   Financial services  
4.74.   Financial services (finance and insurance) accounted for 8.7% of GDP in 2016 . In 2017, total 
assets of the financial sector were about VT 130 billion, of which commercial banks accounted for 
around 87%, while the insurance sector remains small (Table 4.8).  
Table 4.8 Gross assets of Vanuatu's financial system, 2012 -17 
 2012  2013 2014  2015  2016  2017  
Total assetsa (VT billion)  95.6 100.6  104.3  120.2  121.8  130.3  
 Commercial banks  82.8 85.1 88.3 95.8 104.8  112.8  
 Credit institutions  0.5 0.6 0.8 0.7 0.8 .. 
 Insurance companies  1.6 1.9 1.6 7.9 3.0 2.7 
 Vanuatu National Providence Fund  10.2 12.3 13.0 15.2 13.2 .. 
Market share        
 Banks  86.5%  84.7%  84.7%  79.7%  86.0%  86.6%  
 Insurance companies  1.7%  1.9%  1.6%  6.6%  2.5%  2.1%  
a Includes other regulated financial institutions.  
.. Not available.  
Source:  Information provided by the authorities.  
4.75.   Vanuatu undertook various financial services commitments under the GATS. With respect to 
banking and other related services (CPC 811 -813), Vanuatu applies no market access limitations on 
services delivered via cros s-border supply and consumption abroad43, while commercial presence 
requires banks to comply with the provisions of the relevant banking legislation. Vanuatu applies no 
national treatment limitations on modes 1, 2 and 3 of banking and other related services .44 Vanuatu 
has bound market access and national treatment with respect to all insurance and related services 
(CPC 812) delivered via cross -border supply, consumption abroad, and commercial presence.45 
4.76.   Banks carrying out business in Vanuatu are supervised an d regulated by the Reserve Bank of 
Vanuatu (RBV), which is the central bank. Offshore banks, which deal with non -residents, are also 
supervised and regulated by the RBV.46  
4.77.   In addition, the RBV regulates and supervises the non -deposit -taking financial servi ces 
industry,  including 12 insurance companies, the Vanuatu National Provident Fund (the Government's 
pension scheme), Credit Corporation Vanuatu Limited, the Agriculture Development Bank, and a 
number of credit unions. According to the IMF, the non -bank f inancial sector remains small and not 
sufficiently regulated.47 
4.78.   The Vanuatu Financial Services Commission (VFSC) was established in 1993  following the 
enact ment of  the Vanuatu Financial Services Commission Act No. 35 of 1993 . It administers certain 
legislation (Table 4.9). It is modernizing, with the support of the Asian Development Bank (ADB), 
the Companies Act, and the Companies (Insolvency and Receivership) Act. A bill for the regulation 
and supervision of trust and compan y service providers was passed by Parliament. The VFSC is also 
                                                
43 The authorities stated there are restrictions on dividends payments and transfers for the purpose of 
the maintenance of adequ ate capital.  
44 The RBV deducts placements of funds offshore by subsidiaries and branches (with non -related 
entities) on capital for the purpose of capital adequacy ratio.  
45 WTO document WT/ACC/VUT/17/Add.2, 11 May 2011.  
46 Offshore banks were previously supervised by the Vanuatu Financial Services Commission (VFSC).  
47 IMF (2016), Vanuatu Article IV Consultation 2016, IMF Country Report No.  16/336, October.  WT/TPR/S/378 /Rev.1  • Vanuatu  
 
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  proposing to introduce a new Trustee Act. Amendments to the Business Names Act passed through 
Parliament and were gazetted in 2015.48  
Table 4.9 Legislation  
Laws and regulations administered by the VFSC  
Business Names (Amendment) Act No.  10 of 2015  
Companies (Insolvency and Receivership) Act No.  3 of 2013  
Companies Act No.  25 of 2012  
Company and Trust Services Providers Act No.  8 of 2010  
Charitable Associations (Incorporation) Act [CAP 140] and Amendments  
Credit Unions Act [CAP 256] and Amendmentsa 
Dealers in Securities (Licensing) Act [CAP 70] and Amendments  
Electronic Transactions Act No.  24 of 2000 and Amendments  
E-Business Act No.  25 of 2000 and Amendments  
Foundation Act No.  38 of 2009  
Incorporated Cell Companies Act of 2009  
International Companies Act [CAP 222] and Amendments  
Insolvency (Cross -border) Act No.  4 of 2013  
Mutual Funds Act No.  38 of 2005  
Offshore Limited Partnerships Act No.  39 of 2009  
Partnership Act [CAP 92]  
Personal Property Securities Act No.  17 of 2008  
Protected Cells Companies Act No.  37 of 2005 and Amendments  
Trade Unions Act [CAP 161]  
United Trusts Act No.  36 of 2005  
a The Credit Unions Act is being reviewed to improve prudential supervision and AML and CFT, and to 
transfer registration of credit unions to the RBV. Currently, credit unions are registered by the VFSC 
and supervised by the RBV.  
Source:  VFSC online information. Viewed at: http://www.vfsc.vu/laws -regulations/ . 
4.4.2.1   Banking  
4.79.   Five banks  are licensed by the RBV: the National Bank of Vanuatu (NBV), the Australia and 
New Zealand Banking Group (ANZ), the BRED Vanuatu Limited (BVL), the Bank of South Pacific 
(BSP), and the European Bank Limited (EBL). Currently, four of these serve the domesti c market, 
while the EBL (now Wanfuteng Bank) is being restructured.  
4.80.   Three commercial banks – ANZ, BVL, and BSP – are foreign -owned. The NBV was a fully 
government -owned statutory organization, with a mandate to cater to Vanuatu  citizens  clients. It 
underwent ownership restructuring, and is now 70% owned by the Government, 15% owned by the 
National Provident Fund, and 15% owned by the International Finance Corporation. The NBV 
provides micro -finance, loans to SMEs, and commercial loans.  
4.81.   According to a Diagnostic Trade Integration Study (DTIS) Report, micro -finance products 
involved loans of up to VT 50,000 (US$500) for agricultural and retail purposes for individuals from 
remote islands, with an annual interest rate of 27%; the level of ar rears for these loans was low and 
the recovery rate was good. On the other hand, loan recovery from SMEs had proven problematic; 
SMEs with a turnover of more than VT 30 million made up 80% of NBV's SME clients.49 
4.82.   Banks' performance was affected significantl y by Cyclone Pam in 2015; capital adequacy 
ratios (CARs) declined between 2012 and 2015, while asset quality deteriorated as the 
non-performing loans ratio rose (Table 4.10). However, according to an IMF Article IV report, the 
financial soundness of the ba nks has been improving since the last quarter of 2015.50 The 
improvement was attributed to the RBV's accommodative stance in the aftermath of the cyclone, 
lowering the statutory reserve deposit (SRD) requirement and the liquid asset requirement (LAR) to 
alleviate potential liquidity pressure on banks.51  
                                                
48 VFSC online information. Viewed at: http://www.vfsc.vu/about -us/new -developments -2/. 
49 Department of Trade, Industry and Investment (2008), Vanuatu DTIS Report 2008, Port Vila.  
50 IMF (2016), Vanuatu Article IV Consultation 2016, I MF Country Report No.  16/336, October.  
51 IMF (2016), Vanuatu Article IV Consultation 2016, IMF Country Report No.  16/336, October.  WT/TPR/S/378 /Rev.1  • Vanuatu  
 
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  Table 4.10 Banks' financial soundness indicators, 2012 -17 
(%) 
 2012  2013  2014  2015  2016  2017  
Capital adequacy        
 Regulatory capital to risk -weighted assets  20.5 18.1 17.6 16.4 19.4 17.9 
 Regulatory Tier 1 capital to risk -weighted 
 assets  18.3 15.9 16.7 16.2 16.4 15.6 
Asset quality        
 Non-performing loans net of provisions to 
capital  12 37.4 49.4 69.3 41.8 57.4 
 Non-performing loans to total gross loans 8.1 13.5 11.1 12.6 10.8 15.1 
Earnings and profitability        
 Return on assets  0.6 0.4 0.4 0.6 1.5 0.1 
 Return on equity  4.3 3.1 3.0 4.6 11.3 3.8 
 Interest margin to gross income  46.5 50.1 54.3 49.7 64.6 63.6 
 Non-interest expenses to gross income  52.4 46.9 55.2 51.4 64.8 63.2 
Liquidity        
 Liquidity assets to total assets (liquidity asset 
 ratio)  18.8 26.1 23.8 26.2 32.9 35.5 
Source:  RBV. 
4.83.   Interest rates remained high on lending for business activities, and substantial interest rate 
spreads persisted, reflecting, inter alia , the high cost and high risk of credit potentially arising from 
small scale, vulnerability to shocks, and geographic di spersion of the islands.52  
4.84.   In accordance with the Financial Institutions Act of 1999, banks need to obtain a licence from 
the RBV to operate in Vanuatu once they meet prudential requirements. The RBV expanded the 
Basel II prudential requirements (on CARs, liquid asset ratios, exposures to capital requirements) 
into prudential guidelines, and issued 11 prudential guidelines for domestic banks, and 12 for 
international banks.  
4.85.   The Financial Institutions Act of 1999 eliminated difference s in capital requiremen ts for 
locally -owned and foreign -owned banks, and stipulated that paid up capital and unimpaired reserves 
of VT 200 million were necessary for all banks and branches of banks.53 Offshore banks require a 
minimum paid up capital of US$500,000. The RBV imposes  a minimum CAR of 12% for both domestic 
and international banks.  
4.86.   The authorities are considering ways to improve access to credit. Efforts include the 
establishment of a National Financial Inclusion Task Force in 2013, a separate Financial Inclusion 
Unit a t the RBV in 2016, and financial literacy programmes operated by banks. Recently, the Vanuatu 
National Financial Inclusion Strategy (2018 -2022) was also launched. Amendments to legislation 
relating to AML and CFT were completed in 2017. The RBV is drafting  a new Credit Union Act to 
improve supervision.54  
4.87.   Offshore banking comprises seven banks (one is in the process of revocation, and another is 
yet to be operational). They registered a decrease in asset size at the end of 2017. Total assets 
declined by 26.1% to US$78.8 million, compared to US$106.7 million in 2016, reflecting mainly 
decreases in loans and advances (by 29% to US$29.3 million), marketable securities (by 46.4% to 
US$9.2 million), and investment (by 28.6% to US$16 million). Total liabilities  (excluding capital) 
also decreased by 32.3% to US$59.5 million in the same year. The annual loss was US$1.3  million, 
compared to an annual loss of US$1.5 million in 2016. The total capital base grew by 2.4% to 
US$19.3 million. The RBV considered that the offshore banking industry was well capitalized, with a 
further CAR increase from 88% in 2016 to 98% in 2017.  
4.4.2.2   Insurance  
4.88.   The insurance services sector is regulated under the Insurance Act No. 54 of 2005 and the 
Insurance Regulation Order No. 16 of 2006. The  RBV is the insurance sector regulator.  
                                                
52 IMF (2016), Vanuatu Article IV Consultation 2016, IMF Country Report No.  16/336, October.  
53 WTO document WT/ACC/VUT/17/Add. 2, 11 May 2011.  
54 IMF (2016), Vanuatu Article IV Consultation 2016, IMF Country Report No.  16/336, October . WT/TPR/S/378 /Rev.1  • Vanuatu  
 
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  4.89.   The insurance sector is composed of insurance managers, insurance agents, an insurance loss 
adjuster, insurance brokers, captive insurers, external insur ers, international insur ers, and local 
insurance companies, as  well as one reinsurance company and one protected cell company 
(Table  4.11). All are foreign -owned.  
Table 4.11 Insurance service providers  
 Descriptions  Companies  
Insurance 
managers  A person/entity licensed to act as an 
insurance manager to, or provide 
manager services for, external and 
captive insurers  International Finance Trust Company Limited 
(IFTC)  
Risk Management International Consulting 
Limited  
Ron Pattenden  
Willis New Zealand  
Thelma Tapasei  
Insurance 
agents  A person/entity who, with the authority 
of an insurer but not being the 
employee of that insurer, acts on behalf 
of the insurer in e stablishing an 
insurance policy  ANZ Bank (Vanuatu) Limited  
John Lum & Associates Limited  
Sportscover Vanuatu Limited  
Surata Tamaro Travel Limited  
NBV 
EDNA Ratonel  
Credit Corporation Vanuatu Ltd . 
LT Equity Consultant Insurance Ltd . 
Insurance 
loss adjusters  Assesses the amount of compensation 
that should be paid after a person has 
claimed on their insurance policy  McLarens Young (Vanuatu) Limited  
Insurance 
brokers  Acts on behalf of a prospective customer 
and, with the prospective customer's 
authority , arranges insurance business 
with insurers, including making 
proposals and paying premiums  AON (Vanuatu) Limited  
Marsh Insurance Brokers Pty. Limited  
Willis New Zealand Limited  
Chartered Pacific Insurance Brokers Limited  
Aerosure Ltd . 
Arthur  J Gallagher & Co . (Aust) Ltd . 
Poe-Ma Vanuatu Insurance Brokers Ltd . 
Captive 
insurance  A licensed insurance company that 
carries out insurance business for the 
purpose of predominantly insuring 
interests:  
- in the parent company;  
- in companies that it  is affiliated or 
associated with; or  
- in companies organized within a group 
or agency relationship  Biltmore Life Insurance Company Limited  
Boston Marks Insurance Limited  
Caledonian Insurance Co., Limited  
Oceania Insurance Limited  
Pacific Casualty & General Insurance Limited  
Orbit International Insurance PCC Ltd . 
Centron Insurance ICC Ltd . 
Platinum Insurance Ltd . 
External 
insurance  An insurance company incorporated 
outside Vanuatu that is licensed to carry 
out insurance business in Vanuatu  Dominion Insurance Limited  
Society of Ll oyd Underwriters Corp . 
International 
insurance  An insurance company incorporated in 
Vanuatu that does not provide domestic 
insurance products in Vanuatu  Sportscover Insurance Ltd.  
Crown Insurance Services Limited  
Exsular Insurance Corporation Ltd . 
Local 
insurance 
companies  A company incorporated in Vanuatu that 
carries out insurance business inside or 
outside Vanuatu  QBE Insurance (Vanuatu) Limited  
Vancare Insurance Ltd . 
Tower Insurance  
Reinsurance  Reinsurer  EverBest Re Corporation Ltd.  
Protected Cell 
Companies 
(PCC)  A form of company structure. A single 
legal entity comprise d of a core and 
several cells that are not legally 
separate from the core company  Orbit International Insurance PCC Limited  
Source:  Information provided by the authorities. And RBV online information. Viewed at: 
http://www.rbv.gov.vu/index.php?option=com_content&view=article&id=138&Itemid=117&lang=en . 
4.90.   An insurance company may provide either life or general insurance, but cannot operate as a 
composite insurer. The authorities state that there is currently no life i nsurance operating in Vanuatu. 
An insurance company may not provide both insurance and banking services. Compulsory insurance 
products are: comprehensive third -party insurance for vehicles, as required by the Traffic Act; and 
workers' compensation insuranc e, as required by the Labour Act.  WT/TPR/S/378 /Rev.1  • Vanuatu  
 
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  4.91.   Insurance premiums are set by the insurance companies. In 2016, the total gross premium 
in the domestic insurance market went up by 5% to VT  1.5 billion (Table 4.12). Total premiums 
transacted through insurance brokers fo r the domestic market fell from VT  1 billion in 2016 to 
VT 959 million in 2017. Total brokerage paid to brokers as at end -December  2017 was 
VT 188 million, an increase of 30% from 2016. Reinsurance, as provided by the EverBest Re 
Corporation Ltd., reached a peak in both its premiums and expenses in 2014. O ffshore  insurance 
experienced a dramatic decline in 2014,  when its assets fell by 39% to US$10.2 million.  
Table 4.12 Premiums for insurance companies , 2012 -17 
 2012  2013  2014  2015  2016  2017  
Gross premiums for domestic market 
(VT billion)  1.3 1.41 1.4 1.43 1.5 .. 
Reinsurance       
 Gross premium (US$ million)  n.a.a 1.3 10.2 7.4 6.9 .. 
 Expenses (US$ million)  n.a.a 1.2 10.1 7.1 6.4 .. 
Insurance brokers        
 Gross premium (VT million)  802.8  884.2  931.7  1,000  1,000  959 
 Brokerage (VT million)  206.8  123.1  179.5  147.3  144.3  188.3  
International and captive 
aggregate        
 Asset s (US$ million)  13.5 16.8 10.2 11 11.9 10.3 
 Liabilit ies (US$ million)  6.6 6.2 1.7 1.7 6.2 7.4 
 Net asset s (US$ million)  6.9 10.6 7.3 9.3 5.7 2.9 
 Gross premium (US$ million)  7.4 6.1 12.2 9.2 4.1 4.3 
a The reinsurance company obtained its licence in 2012.  
.. Not available.  
Source:  Information provided by the authorities.  
4.92.   The authorities state that two insurers were heavily affected by Cyclone Pam in 2015. Among 
the 777 claims, most (98%) were closed or settled. The authorities indicate that  VT 5.5 billion (52%) 
of the original estimated total loss of VT 10.5 billion was paid b y insurers.  
4.4.3   Telecommunications  
4.4.3.1   Main features  
4.93.   Since the introduction of competition in 2008, the promulgation of sectoral legislation and the 
establishment of the sectoral regulator in 2009, and the construction and launch of the ICN1 
submarine cable linki ng Vanuatu and Fiji in 2014, the telecommunication services sector has been 
growing fast, with significant increases in subscribers and market revenue (Table  4.13).  
Table 4.13 Telecommunication indicators, 20 14-17 
 2014  2015  2016  2017  
Mobile subscriptions  159,148  180,424  218,603  232,564  
Mobile data subscriptions (estimation)  5,000  35,000  60,000  78,000  
Fixed Internet subscriptions  4,228  4,248  4,486  4,802  
Fixed -line telephone subscriptions  5,382  4,632  4,555  4,424  
Total mobile data downloads (MB)  16,251,427  85,435,487  272,693,62
2 663,137,54
1 
Market gross revenues (VT billion)  3.89 3.95 4.48 5.12 
Households with a computer  .. .. 22.6% .. 
Households with Internet access at home  .. .. 29.4% .. 
Individuals using Internet  .. .. 24% .. 
.. Not available.  
Source:  Telecommunications and Radio -communication Regulator  (TRR) (2017), Telecommunications Sector 
Report 2017 . ITU ICT -Eye. Viewed at:  http://www.itu.int/icteye ; and information provided by the 
authorities.  WT/TPR/S/378 /Rev.1  • Vanuatu  
 
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  4.94.   The growth was mostly driven by the large increase in the use of mobile technologies, and 
mobile penetration went up from 12% in 2007 to 85% in 2017 (Chart 4.7).55 The increase in the 
number of mobile subscribers  may be attributed to, inter alia : increased competition between mobile 
providers; the release of 4G licences; and increasing mobile network coverage under the 
Government's Universal Access Policy (UAP), which gave more areas and people access to mobile 
services.56 However, the number of fixed telephony subscribers reached its peak in 2008, with a 
penetration rate of 4.6%. Since then, the number of fixed telephone line subscribers has continued 
to decline, as consumers found it easier and more affordable to use mobile services. In 2017, the 
fixed line penetration rate fell to 1.6%.  
Chart 4.7 Telecommunication indicators per 100 inhabitants, 2016 and 2017  
 
Source:  ITU online information and data provided by the authorities.  
4.95.   Vanuatu's telecommunication services sector is open. Under its GATS commitment, Vanuatu 
bound market access and national treatment with respect to the telecommunication services 
delivered via cross -border supply, consumption abroad, and commer cial presence (from 2012).57 
The telecommunications market, including that for mobile and fixed -line telephone services, is open 
to domestic and foreign service providers, subject to the relevant legislation and to Vanuatu's GATS 
commitments.  
4.96.   The sector is regulated by the Telecommunications and Radiocommunications Regulation Act 
No. 30 of 2009 . In accordance with the Act, a Telecommunications and Radio -communication 
Regulator (TRR) was established in 2009 to be the sectoral regulator issuing licences to 
telecommunication and radio -communication service providers. In 2015, the  Telecommunications 
and Radiocommunications (Consumer Protection) Regulation Order No. 157 of 2015 was gazetted.  
4.97.   Any person, local or foreign, may apply for a telecommunications licen ce. It is valid for 
15 years and is renewable, subject to approval by the TRR. The TRR charges a licence fee: 2.25% 
of the licensee's quarterly gross revenue. The fee  is payable by all registered licensee s (domestic 
and foreign ) on a quarterly basis.  All licences are unified – licensees choose the types of services 
they wish to provide. Currently, both Telecom Vanuatu Ltd. and DigiCel provide mobile, Internet, 
and fixed telephony services, while another six companies chose to provide Internet services only 
(Table  4.14).   
                                                
55 TRR (2017), Telecommunications Sector Report 2017.  
56 TRR (2017), Telecommunications Sector Report 2017 . 
57 WTO document WT/ACC/VUT/17/Add.2, 11 May  2011.  
2016 20170102030405060708090
Fixed-telephone subscriptions
Mobile-cellular subscriptions
Fixed (wired)-broadband subscriptions
Mobile-broadband subscriptionsChart 4.[]   Telecommunication indicators per 100 inhabitants, 2016 and 2017
Source:  ITU online information and data provided by the authorities.WT/TPR/S/378 /Rev.1  • Vanuatu  
 
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  Table 4.14 Current telecom licensees  
Company  Date 
issued  Services provided  Current 
status  If 
amended  Date 
amended  
Telecom Vanuatu Ltd.  11/03/2008  Mobile/Internet/Fixe
d Operating    
DigiCel (Vanuatu) Ltd.  14/03/2008  Mobile/Internet/Fixe
d Operating  Yes  22/09/2009  
Telsat Broadband Ltd.  22/09/2009  Internet  Operating    
Wantok Network Ltd.  22/09/2009  Internet  Operating  Yes  31/04/2014, 
& 
16/12/2016  
Interchange Ltd.  22/09/2009  Internet  Operating  Yes  02/02/2010  
Incite  30/09/2010  Internet  Operating    
Spim Ltd.  01/04/2011  Internet  Operating    
Global Telecom Pacific 
Ltd. 06/03/2015  Internet  Operating    
Source:  TRR online information. Viewed at: https://www.trr.vu/en/telecom -
industry/licenses/telecommunications -licence . 
4.98.   Telecom Vanuatu Limited  (TVL) had, for many years, been the sole supplier of 
telecommunicat ion services. In 2008, competition was introduced, and DigiCel entered the market. 
TVL is predominantly a fixed -line telephone service provider, while DigiCel supplies a small 
proportion of the fixed telephony service. They both provide mobile communicatio n services. Both 
are foreign invested companies.  
4.99.   In 2014, the construction and launch of the ICN1 submarine cable stimulated a substantial 
increase in access to, and usage of, the Internet, with increased availability of higher -speed Internet 
services on both fixed and mobile networks, and larger data download plans. In 2016, international 
bandwidth had grown by 650% since January 2014. The increased availability of mobile data, due 
to significant reductions in data and handset costs, and the increased net work coverage, have 
encouraged consumers to use over -the-top (OTT) services58, and there has consequently been a 
decline in SMS messaging and in international call volumes. In addition, the first Internet Exchange 
Point was launched in 2012, which also greatly strengthened the national infrastructure in 
telecommunication services.59  
4.100.   Interchange Limited, a public -private company, completed its ICN1 submarine cable, linking 
Port Vila to Suva, in Fiji, in January 2014. Between 2014 and October 2017, telecom  companies 
could lease the cable through a wholesaler – Fidelity Communication Corporation. Following an 
anti-competitive investigation on the price of bandwidth capacity at the wholesale level, TRR required 
that all proposed price and non -price terms and conditions of supply be reviewed and approved by 
the TRR, with a view to ensuring that prices are cost based and not discriminatory. As part of the 
outcome of the investigation, Interchange Limited began offering capacity leases in October 2017, 
the price of which was approved by the TRR at US$285 per Mbps per month. Both TVL and DigiCel 
chose this capacity lease.  
4.101.   Interconnection, i.e. the physical linking of a telecommunication carrier's networks to 
another carrier's networks, allows the exchange of servi ces, in particular voice, data and SMS traffic, 
to flow from one network to another . Interconnection charges are not set by the TRR; they are 
formulated through commercial negotiations between the interconnecting parties. The TRR may 
mediate if the parties  are not able to agree on interconnection terms or pricing. The TRR requests 
information from all licensees on a six -monthly basis, to enable monitoring of any 
cross-subsidization.  
4.102.   The TRR is also responsible for the ma nagement of the national spectrum in accordance with 
the Telecommunications and Radiocommunications Regulation Act, the Radio Apparatus Licence and 
Spectrum Licence (Fees) Regulation, and other relevant legislation. The Act contains provisions 
related to competition and consumer protection ( Section 3.3).  
                                                
58 Examples of OTT services are Facebook, Messenger, and WhatsApp.  
59 National Information and Communication Technology Policy, December 2013. Viewed at: 
https://ogcio.gov .vu/images/Vanuatu -National -ICT-Policy -EN.pdf . WT/TPR/S/378 /Rev.1  • Vanuatu  
 
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  4.4.3.2   Information and communication technologies (ICT) and the UAP  
4.103.   Policies related to telecommunication services and ICTs are developed by the National ICT 
Development Committee, the Office of the Government Chief Information Officer (OGCIO), and the 
TRR. In 2013 and 2014, the Government launched a national ICT policy, a cyber -security policy, and 
a UAP.  
4.104.   The National ICT Policy provides a roadmap for the development of the ICT sector around 
eight core priorities, i.e.:  
a. access to ICT in education;  
b. access to ICT infrastructure and devices;  
c. e-government;  
d. integration of ICT into sectoral policies (e.g. agriculture, trade, finance, forestry, health);  
e. building trust, and mitigating risks related to ICT development;  
f. developing locally relevant content;  
g. building capacity, including literacy; and  
h. establishing a platform for multi -sector coordination and collaboration.  
4.105.   Currently, the ICT -related legal framework contains:  
a. the Telecommunication and Radiocommunications Regulation Act No. 30 of 2009;  
b. the Telec ommunications Act [CAP 206];  
c. the Wireless Telegraph (Ships) Act [CAP 5];  
d. the Electronic Transactions Act No. 24 of 2000 (as amended by the Statute Law 
(Miscellaneous) Provisions Act No. 2 of 2010), which regulates electronic transactions and 
related matter s, including e -records, e -contracts, and e -signatures;  
e. the E -Business Act No. 25 of 2000 (as amended by the E -Business (Amendment) Act 
No. 17 of 2007); and  
f. the Broadcasting and Television Act [CAP 214].  
4.106.   As part of the ICT policy, both the private and the p ublic sectors have been implementing 
projects to further enhance the ICT sector. These include the Government Broadband Network 
(which connects all provinces), the Integrated Government (iGov) initiative, the provision of 
4G services, and the E -Government Strategic Roadmap.  The Government Broadband Network, badly 
damaged by C yclone  Pam, was rebuilt in November 2017. The private sector is expanding the use 
of ICT in tourism and travel services, providing Internet banking, and launching online shopping 
tools.60 
4.107.   ICT development in Vanuatu faces a number of challenges, particularly geographical and 
topographical challenges, as the population is spread across numerous islands. The Government 
launched its UAP, with a target of making ICT available to 98% of the pop ulation by 2018.61 
                                                
60 National Information and Communication Technology Policy, December 2013. Viewed at: 
https://ogcio.gov.vu/images/Vanuatu -National -ICT-Policy -EN.pdf . 
61 TRR online information. Viewed at: 
https://www.trr.vu/attachments/category/215/universal_access_policy.pdf . WT/TPR/S/378 /Rev.1  • Vanuatu  
 
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  According to the  TRR, the target has already been reached, as ICT is available to 98.8% of the 
population.  
4.108.   The UAP aims to expand telecommunications services to underserved and unserved areas, 
and the TRR was designated by the Government to implement this policy. In accordance with the 
UAP, telecommunication services covered by this Policy are provided to end users at geographically 
uniform prices.  
4.109.   The TRR followed a "play" or "pay" approach. Under the "play" approach, the TRR signed 
contracts with three UAP providers: TVL, DigiCel, and Telsat Broadband Ltd.62 These service 
providers committed to building and expanding telecommunication infrastructures and/or upgrading 
services to underserved and unserved areas, at their own cost. The "pay"  approach is where other 
service providers pay a levy imposed by the TRR: 4% of their annual net revenue. This levy is 
channelled to the UAP Fund, to facilitate the implementation of the UAP.  
4.4.4   Transport  
4.110.   Transport and storage accounted for 4.2% of GDP in 20 16, down from 5.6% in 2012 
(Table  4.7). The growth rate in this sector varies considerably; from a positive and significant growth 
at a rate of 28.9% in 2012, to a contraction at a rate of 22.6% in 2013. This was followed by further 
declines in 2014 ( -5.9% ) and 2015 ( -4%), until it recovered in 2016 (1.3%). Transport services are 
a major constraint to economic development.  
4.4.4.1   Civil aviation  
4.111.   Under Vanuatu's GATS commitment, it fully bound market access and national treatment 
with respect to the maintenance and  repair of aircraft, and selling and marketing of air transport 
services delivered via cross -border supply, consumption abroad, and commercial presence.63  
4.112.   The Civil Aviation Authority Vanuatu (CAAV), under the Ministry of Infrastructure and Public 
Utilitie s, is the regulator on all civil aviation matters. In accordance with the Civil Aviation Rules, the 
CAAV ensures that civil aviation meets the requirements of the Government and of the International 
Civil Aviation Organization (ICAO).64  
4.113.   There are 29 airpor ts in Vanuatu.  Airport s Vanuatu Limited (AVL),  a corporate set up and 
fully owned by the Government, with CAAV oversight, operates the three  international  airports at 
Port Vila (Bauerfield), Luganville (Pekoa), and Tanna (Whitegrass). Vanuatu Terminal Serv ices 
Limited  (VTSL), a subsidiary company under and fully owned by the AVL, provides,  inter alia , 
international terminal cargo and freight forwarding services, and aircraft ground handling services.65  
4.114.   The other 26 domestic airfields are regulated by the CA AV, and operated and maintained by 
the Public Works Department (PWD)  under the Ministry of Infrastructure and Public Utilities . 
Maintenance is carried out by village -based contractors, and the CAAV assists by providing training 
for the contractors. Ground handling services at these locations are the responsibility of the aircraft 
operators.  
4.115.   In 2015, a total of 491,427 domestic a nd international passengers were transported by air 
carriers operating into and within Vanuatu (Chart 4.8). About 72% of passengers used the Bauerfield 
Airport, Vanuatu's principal gateway. This was followed by Pekoa Airport (20%), and Whitegrass 
Airport ( 8%). Airports levy a fee of VT 3,400 per departing international passenger, to cover its 
service and security charges.  
                                                
62 TRR online information. Viewed at: https://www.trr.vu/index.php/en/telecom -industry/universal -
access/universal -access -policy . 
63 WTO document WT/ACC/VUT/17/Add.2, 11 May 2011.  
64 Section 36 of the Civil Aviation Act refers to the New Zealand Civil Aviation Rules as the standard 
operating rules in Vanuatu.  
65 VTSL online information. Viewed at: http://www.vts.vu/ . WT/TPR/S/378 /Rev.1  • Vanuatu  
 
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  Chart 4.8 Number of passengers using the three international airports, 2011 -15 
 
Source:  Information provided by the authorities.  
4.116.   Information provided by the VTSL indicates that cargo transported by air reached its peak 
in 2016. In 2017, New Zealand was the largest export market for cargo transported by air from 
Vanuatu, and Australia was the second largest. Other main export markets included New  Caledonia, 
the United States, the Solomon Islands, and Fiji (Table 4.15). In terms of imports, Australia was by 
far the biggest origin of imports, followed by New Zealand, New Caledonia, Fiji, and 
Papua New Guinea.  
Table 4.15 Major origins of imports, and export destinations for cargo transported by air  
(Kg) 
 2015   2016   2017  
Exports  86,420  Exports  213,792  Exports  177,879  
New Zealand  34,681  New Zealand  79,946  New Zealand  58,070  
Australia  33,327  Australia  72,739  Australia  55,917  
Solomon Islands  5,720  New Caledonia  29,578  New Caledonia  32,521  
New Caledonia  4,767  United States  14,813  United States  13,319  
United States  3,528  Fiji 6,344  Solomon Islands  8,480  
Fiji  1,614  Germany  1,174  Fiji  8,363  
Imports  279,065  Imports  849,144  Imports  764,131  
Australia  170,376  Australia  524,666  Australia  489,130  
New Zealand  63,586  New Zealand  215,966  New Zealand  179,553  
Fiji 22,782  New Caledonia  44,890  New Caledonia  40,927  
New Caledonia  15,941  Fiji 44,146  Fiji  29,582  
Hong Kong, China  2,677  Papua New 
Guinea  7,846  Papua New Guinea  19,690  
Papua New Guinea  1,237  Solomon Islands  3,858  Hong Kong, China  1,650  
Solomon Islands  1,220  Japan  2,963  Solomon Islands  1,541  
  Hong Kong, China  1,834    
Source:  Information provided by the authorities (VTSL).  
4.117.   In addition to Air Vanuatu, other international airlines operating in Vanuatu include : Air 
Caledonie, Fiji Airways and its subsidiary Fijilink, Air Niugini, Solomon Airlines, Virgin Australia,  and 
Air New Zealand. The requirements for foreign airlines to operate international services to Vanuatu 
are outlined in the Civil Aviation Act and the Civil Aviation Rule . Four airlines  provid e charter services 
(Unity Airlines, Vanuatu Helicopter, Air Taxi, and Air Melanisie ).  
4.118.   Air Vanuatu is fully owned by the Government.  It provides universal transport services in 
Vanuatu, i.e. it provides air services among a number of Vanuatu's islan ds. Reflecting the cost 
incurred when Air Vanuatu is fulfilling this community service obligation, the Government provides 
loans and guarantees to the company to help cover its loss (Section 3.3 ).  
4.119.   According to the authorities, foreign participation in cab otage is allowed, i.e. foreign airlines 
are allowed to provide services linking different islands within Vanuatu,  if provided for under the Air 
Services Agreement (ASA) between Vanuatu and the country from which this foreign carrier 
originates.  
2011 2012 2013 2014 20150100,000200,000300,000400,000500,000600,000
Bauerfield
Pekoa
WhitegrassChart 4.[]   Number of passengers by three international airports in Vanuatu, 2011 -15
Source:  Information provided by the authoritiesWT/TPR/S/378 /Rev.1  • Vanuatu  
 
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  4.120.   Vanuatu si gned bilateral ASAs with Australia, Fiji, Kiribati,  New Caledonia, New Zealand, 
Papua New Guinea , Singapore , Solomon Islands, and Chinese Taipei. Of these, there ha ve been no 
direct flights between Vanuatu and Chinese Taipei, or between Vanuatu and Kiribati.  Vanuatu has 
adopted the Open Skies Policy, which has been captured in the Civil Aviation Act. 
4.121.   Vanuatu signed the plurilateral Pacific Islands Air Services Agreement (PIASA) on 
16 August  2003. However, the PIASA never really t ook off, as Fiji, the hub in the Pacific region, has 
not yet signed it.  
4.4.4.2   Maritime transport  
4.122.   Maritime transport is  of vital importance to Vanuatu, as the country is composed of about 
83 scattered islands. It is regulated in accordance with the Maritime Act,  the Shipping Act, and the 
Ports Act. In 2016, the Maritime Sector Regulatory Act No. 26 of 2016 was passed by Parliament. It 
went into effect in 2017. Under it, the Office of the Maritime Regulator (OMR) was set up in July  2017. 
The OMR administers domest ic ship registration, shipping safety inspection and certification, while 
the Department of Ports and Marine under the Ministry of Infrastructure and Public Utilities 
administers port operations. The authorities state that they are currently reviewing mari time related 
legislation to streamline the legislative and institutional arrangements for maritime transport.  
4.123.   Vanuatu Maritime Services Limited  (VMSL) is a domestic private  company contract ed by the 
Government as Vanuatu's international shipping registry administrator. It handles vessels' and 
seafarers' documentation, in accordance to International Maritime Organization (IMO) Conventions 
and Treaties. Vanuatu's Recognized Classification Societies (International) assist with the registered 
ships' safety ins pections and surveys for required standard certifications. The Vanuatu international 
shipping registry  is open to ship owners of any nationality  if the owner wishes to register their ship 
under the Vanuatu flag . The authorities indicate that the internatio nal shipping registry has a total 
of 599  vessels registered.66 
4.124.   The ports of Port Vila and Luganville are two international hubs for the entry and exit of 
imports and exports and of passengers visiting by ships. The two ports have undergone significant 
impro vements and expansion to cater for 20 -foot containers. Currently, seven overseas shipping 
lines provide both container and general cargo international services to and from Vanuatu, via these 
two ports.67  
4.125.   Wharf infrastructure in the port of Port Vila, the m ajor port in Vanuatu, was improved 
significantly, particularly regarding its cargo handling capacity, with the completion of the Lapetasi 
International Wharf in 2017: vessel turnaround time is between 12 and 24 hours. The Port Vila Main 
Wharf is used for c ruise ships and tankers, while Lapetasi International Wharf is used for 
international cargo vessels. Both wharfs are owned by the Government, and all port dues are 
collected by the Department of Ports and Marine.  
4.126.   The Luganville port is owned by the Government. After its renovation, which was completed 
in August 2017, two container ships, or one large cruise ship, are able to berth there. A large cruise 
ship terminal and two large warehouses for copra were also buil t.  
4.127.   In both ports, pilotage is compulsory for all international vessels, and is provided by the 
Harbour Master of the Department of Ports and Marine.  
4.128.   Vanuatu's Maritime Act and the Maritime Regulations stipulate the annual tonnage tax for 
international re gistry, as well as fees for vessels.68 According to VMSL online information, a 
registration fee of US$0.35 per net ton, and an annual tonnage tax of US$0.25 per net ton, are 
collected.69  
                                                
66 According to UNCTAD, in 2017, Vanuatu wa s one of the top 25 "leading flags of registration countries 
by value" (UNCTAD (2017), Review of Maritime Transport 2017. Viewed at: 
http://unctad.org/en/PublicationsLibrary/rmt2017_en .pdf. 
67 VIPA online information. Viewed at: http://www.investvanuatu.org/wp/investing/infrastructure/ . 
68 Maritime Act (CAP 131). Viewed at: http://www.vanuatumaritimeships.com/Documents/Mari -Act.pdf . 
Maritime Regulations. Viewed at: http://www.vanuatumaritimeships.com/Documents/mari -reg.pdf. 
69 VMSL online information. Viewed at: http://www.vanuatumaritimeships.com/ . WT/TPR/S/378 /Rev.1  • Vanuatu  
 
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  4.129.   The authorities indicate that about 70 domestic shipping vessels provi de transportation 
services for passengers and cargo. The OMR collects fees for the registration, documentation, vessel 
surveys and crew licensing for domestic shipping vessels.  
4.130.   According to information provided by the VIPA, foreign investment is allowed i n coastal 
shipping (excluding vessels that exclusively provide transport to foreign tourists) only when the 
vessel 's carrying capacity is ab ove 80 tonnes (Table 2.6). Vanuatu has no legislation concerning 
cabotage rules.  In practice, foreign vessels are not allowed to provide cabotage services in Vanuatu , 
although exemptions may be given for particular periods such as natural disasters.  
4.4.5   Tourism  
4.4.5.1   Main features  
4.131.   The tourism sector is the mainstay of the Vanuatu economy. According to the World Tr avel 
and Tourism Council, the travel and tourism industry directly contributed 1 8% to GDP in 201 7.70 
Travel and tourism directly supported 11,000 jobs, 14.4% of total employment, while its total 
contribution to employment, including jobs indirectly supporte d by the industry, was 39% of total 
employment (30,000 jobs). Moreover, the industry is a major foreign exchange earner, captures a 
significant share of capital investment, and accounts for more than 60% of total merchandise and 
services exports in 2017 (T able 4.16).  
Table 4.16 Vanuatu: Absolute and relative contribution of the tourism sector, 2017  
 Absolute 
contribution  Relative contribution  
(% of total)  
Direct contribution to GDP (US$ million)  144.6  18.2 
Total contribution to GDP (US$ million)  365.7  46.1 
Direct contribution to employment ('000 jobs)  11 14.4 
Total contribution to employment ('000 jobs)  30 39.3 
Capital investment (US$ million)  28.9 15.5 
Visitor ex portsa (US$ million) 254.2  61.6 
a Visitor exports: Spending within the country by international tourists for both business and leisure 
trips, including spending on transport, but excluding international spending on education.  
Source:  World Travel and Tourism Council, Travel & Tourism Econo mic Impact 2018 Vanuatu.  Viewed at: 
https://www.wttc.org/ -/media/files/reports/economic -impact -research/countries -
2018/vanuatu2018.pdf . 
4.132.   Tourism in Vanuatu suffered severely from Cyclone Pam in 2015 (Section 1), but has 
recovered in 2016 and 2017 (Chart 4.9). In 2017, visitors coming for vacations accounted for 76% 
of all visitor arrivals by air, followed by those coming to visit friends and rel atives (8%), and arriving 
for business (7.6%). Tourists coming for education and sports accounted for about 6.9% of the total.  
4.133.   In 2017, Australia was the largest inbound market, accounting for more than half (53%) of 
all tourist arrivals, followed by New Caledonia (15%), New Zealand (11%), other Pacific countries 
(7%), and Europe (6%) (Chart 4.10).  
4.134.   The number of tourist arrivals by cruise ships is far greater than those arriving by air; i n 
2017,  there were 109,108 international air arrivals, about one thir d of the number of cruise ship 
passengers (333,767) (Table 4.17). However, as cruise ship passengers spent on average one day 
in Vanuatu, their total direct expenditure is less than the expenditure from overnight tourists arriving 
by air. International vis itors by air spent an average of 11 days in Vanuatu.  
4.135.   There are both land -based tour operators, providing activities such as cultural products, 
village tours, and some traditional handicrafts; and marine -based tour operators organizing activities 
such as ka yaking, paddle -boarding, kite -surfing, ocean swimming, sports fishing, and yachting. 
Accommodations range from larger scale (more than 100 rooms) family focused resorts to boutique 
                                                
70 WTTC (2018), Travel & Tourism Economic Impact 2018 Vanuatu . Viewed at: https://www.wttc.org/ -
/media/files/reports/economic -impact -research/countries -2018/vanuatu2018.pdf . WT/TPR/S/378 /Rev.1  • Vanuatu  
 
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  resorts, as well as holiday homes, residential homes, and apartments for re nt. The occupancy rate 
for large scale resorts is approximately 60%, while the average hotel occupancy rate is around 35%.  
Chart 4.9 Visitor arrivals by air, 2013 -17 
 
Source:  Vanuatu National Statistics Office online information.  
Chart 4.10 Visitor arrivals by air, 2017  
 
Source:  Vanuatu National Statistics Office online information.  
Table 4.17 Key tourism indicators 2013 -17 
 2013  2014  2015  2016  2017  
Visitor arrivals by air  110,109  108,808  89,952  95,117  109,108  
Average length of stay (days)  11.2 10.5 11.1 10.9 11.4 
Cruise visitor arrivals  247,296  267,488  245,773  344,907  333,767  
Number of port calls  254 244 226 296 268 
Hotel occupancy rate (%)  35 35 35 35 35 
Source:  Vanuatu National Statistics Office online information, Statistics Update: International Ar rival 
Statistics, February 2018.  Viewed at: 
https://vnso.gov.vu/index.php/component/advlisting/?view=download&fileId=4652 ;and information 
provided by the authorities.  
4.4.5.2   Institutional and regulatory framework  
4.136.   The responsibility for the tourism sector lies primarily with the Ministry of Tourism, Trade, 
Commerce, Industry and Ni -Vanuatu Business (MTTCINVB). The Department of Tourism (DOT), 
under the MTTCINVB, is responsible for policy setting regarding tourism dev elopment. The Vanuatu 
Tourism Office (VTO) is a statutory body within the MTTCINVB in charge of tourism marketing.  
4.137.   There are a number of private sector associations in the tourism sector, such as the Vanuatu 
Hotels and Resorts Association (VHRA), the Vanu atu Tour Operators Association (VTOA), and the 
Vanuatu Island Bungalows and Tourism Association (VIBTA). The authorities state that 
2013 2014 2015 2016 2017020,00040,00060,00080,000100,000120,000
Vacation
Visiting friends and relatives
Business
Stop over
Other, incl. education, sportChart 4.[]   Visitor arrivals by air, 2013 -17
Source:  Vanuatu National Statistics online information.
Chart 4.[]   Visitor arrivals by air, 2017
North America 2.8%
Source:  Vanuatu National Statistics online information.China 3.3%Australia
52.6%
Japan 1.0%New Zealand
10.6%NewCaledonia
14.5%
Other
2.5%Europe
6.2%Other Pacific countries
6.6%
Total arrivals by air:
109,108WT/TPR/S/378 /Rev.1  • Vanuatu  
 
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  representatives from each association are current members of the steering committees that look 
into setting the policy direc tion for the tourism industry.  
4.138.   Legislation governing tourism includes the Environment and Conservation Management Act, 
the Foreshore Development Act, the Labour Act, the Companies Act, and the VIPA Act.71 Under the 
Tourism Council Act No. 23 of 2012, a nati onal tourism council and six provincial tourism councils 
were established, with a view to enhancing the competitiveness of Vanuatu as a destination for 
tourists and investors. This Act also contains provisions on compulsory tourism accreditation.72 
4.139.   Accordin g to the Government's Business Cost Competitiveness Report, Vanuatu is seen as a 
relatively high cost destination.73 In addition, it is difficult for visitors to access the outlying islands' 
attractions: currently, most visitors (97%) stay in Port Vila.74 In 2013, the Government developed 
the Vanuatu Strategic Tourism Action Plan 2014 -2018 (VSTAP) as a guideline for the development 
of tourism services.75 Projects in the VSTAP were mainly (60%) funded by a New  Zealand aid 
programme. The VSTAP identified five ke y priorities:  
a. delivering tourism benefits to the outer islands;  
b. focusing on core markets such as Australia, New Caledonia, and New Zealand;  
c. investing in the planning and building of infrastructure;  
d. developing the Vanuatu Tourism Accreditation Committee; a nd 
e. setting up a team to implement the VSTAP.  
4.140.   According to information provided by the authorities, by the end of February 2018, among 
the 23 projects listed in the VSTAP, 14 had been started (of which, 3 were completed) and 9 were 
pending.  
4.141.   Investment in Vanuatu's tourism sector has been mainly conducted by fo reign investment, 
while Vanuatu  citizens investors are virtually all in smaller, less capital intensive businesses, such 
as taxis, buses, bungalows, tours and cultural shows. Foreigners are not allowe d to own land, 
although they may lease it to build  hotels or other facilities.  Accessing capital is a significant 
constraint to es tablishing or expanding Vanuatu  citizens' business;76 other constraints include 
lacking development plans, and the land tenure system. The authorities state that 80% of land is 
customary land, making it hard for local people to use it as collater al if they wish to borrow start -up 
capital from banks.  
4.142.   Under its GATS commitment, Vanuatu applies no market access limitations on hotel and 
restaurant services (CPC 641) delivered via cross -border supply and consumption abroad, while 
commercial presence faces some constraints, and kava bar ownership is reserved for Vanuatu's 
citizens. Vanuatu applies no national treatment limitations on cr oss-border supply, consumption 
abroad, or commercial presence regarding hotel and restaurant services. With respect to travel 
agencies (excluding tour operating services), Vanuatu fully bound both market access and national 
treatment regarding these servic es delivered via modes 1, 2 and 3.77 
                                                
71 DOT online information. Viewed at: https://tourism.gov.vu/investment.php . Other relevant legislation 
includes the Public Health Act, the Physical Planning Act, the Land Leases Act, the Import Duties Exemption 
Act, the Minimum Wage Act, and the Vanuatu National Provident Fund Act.  
72 MTTCINV B (2014), Vanuatu Strategi c Tourism Action Plan 2014 -2018.  Viewed at: 
https://tourism.gov.vu/assets/docs/VSTAP_FINAL_Feb_2014.pdf . 
73 Government of Vanuatu, Vanuatu Business Cost Co mpetitiveness .  
74 Vanuatu Daily Post, 17 March 2017. Viewed at: http://dailypost.vu/news/ifc -led-survey -
demonstrates -value -of-vanuatu -s-tourism -sector/article_b43b9a68 -9d66-5a27-b26b-bd0c4ef5321b.html . 
75 Ministry of Tourism, Industry, Commerce & Ni -Vanuatu Business (2014), Vanuatu Strategic Tourism 
Action Plan 2014 -2018. Viewed at: https://tourism.gov.vu/assets/docs/VSTAP_FINAL_Feb_2014.pdf . 
76 MTTCINVB (2014), Vanuatu Strategic Tourism Action Plan 2014 -2018. Viewed at: 
https://tourism.gov.vu/assets/docs/VSTAP_FINAL_Feb_2014.pdf . 
77 WTO document WT/ACC/VUT/17/Add.2, 11 May 2011.  WT/TPR/S/378 /Rev.1  • Vanuatu  
 
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  4.143.   The Fo reign Investment Promotion Act reserves certain types of tourism services for 
Vanuatu's citizens:  
a. Local tour agents, if the annual turnover is less than VT 20 million;  
b. Local tour operators, if the investment is les s than VT 50 million;  
c. Commercial cultural feasts (Melanesian, Polynesian, etc.);  
d. Guest houses with less than 50 beds or less than 10 rooms , or if the annual turnover is 
less than VT 20 million;  
e. Bungalows if the annual turnover is less than VT 30 million; and 
f. Hotels and motels if the total value of the investment is less than VT 10 million or if the 
annual turnover is less than VT 20 million ( Table 2.6 ). 
4.144.   Depending on the activities engaged in, and following a Tourism Product Classification 
System, tourism o perators may need to apply for a Tourist Permit from the DOT.78 For activities 
where such a Permit is required, the DOT checks the Vanuatu Tourist Operators Minimum Standards 
before making a decision on the issuance of the Permit.79 Under this System, touris t business 
activities are classified as:  
a. Category D3, requiring a Tourist Permit: all tourist accommodation;  
b. Category D3, not requiring a Tourist Permit: restaurants, catering services, cafes, bars, 
and takeaway outlets;  
c. Category E3, requiring a Tourist Pe rmit: travel agents; tour agents; tour operators; other 
tourism support services (e.g, air tourism activities, water tourism activities, tourism yacht 
or boat charters, land transport services to tourists – bus or taxi, rental or hire services to 
tourists,  and tours and transfer services);  
d. Category E4, requiring a Tourist Permit: vehicle rental services; equipment rental services; 
boat rental services; other rental services;  
e. Category G2, not requiring a Tourist Permit: personal, social and recreational and repair 
services; recreational and pleasure grounds and facilities; spas, beauty salons and 
centres; barber and hairdressing services.  
4.145.   Foreign investors, having obtained a Tourist Permit from the DOT, must present it to the 
VIPA to apply for an updated VIPA  certificate before applying for their business licence.80 Tourist 
Permits are renewed every two years with no equity or capital requirements.  
4.146.   The Investment Facilitation Section in the DOT is responsible for facilitating investment in 
the tourism and hospi tality sector, by identifying potential investment opportunities and locations, 
and searching for appropriate legal, financial and other professional services required to assist 
tourism projects.81 According to DOT online information, under the Customs Duty  Exemption Act, 
the Director of DOT may approve duty exemption for goods imported exclusively for: the 
                                                
78 DOT onl ine information , Business License Application Process – Guidelines for Tourism Operators . 
Viewed  at: 
https://tourism.gov.vu/assets/docs/accreditation/2.%20Business%20Licence%20Application%20Process_V2_2
2Jan.pdf . 
79 DOT online informa tion, Vanuatu Tourism Accreditation – Information Pack . Viewed a t: 
https://tourism.gov.vu/assets/docs/accreditation/1.%20Vanuatu %20Tourism%20Accreditation%20Info%20Pa
ck_email.pdf . 
80 DOT onl ine information , Business License Application Process – Guidelines for Tourism Operators . 
Viewed at: 
https://tourism.gov.vu/assets/docs/accreditation/2.%20Business%20Licence%20Application%20Process_V2_2
2Jan.pdf . 
81 DOT online information. Viewed at: https://tourism.gov.vu /investment.php . WT/TPR/S/378 /Rev.1  • Vanuatu  
 
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  construction of new hotels or resorts; the renovation and expansion of existing resorts; the addition 
of a minimum of 10  rooms; or new facilities to incl ude a casino, gym or conference facilities.82 The 
authorities state that duty exemptions only apply to projects with an investment of over VT  4 million.  
4.147.   In 2013, when the VSTAP was launched, the Government also launched a National Cruise 
Tourism Action Plan . Under the Plan, a National Cruise Tourism Committee was established to 
promote the uniqueness of Vanuatu among cruise companies as a preferred destination for cruise 
tourism.83 Key strategies identified in the Plan include: strengthening partnership relat ions between 
the Government and cruise companies; improving infrastructure such as wharfs; looking for niche 
market for Vanuatu exports, such as Tanna coffee and Vanuatu water; setting up a dedicated 
webpage to advertise Vanuatu as a cruise destination; an d providing training to Vanuatu citizens  
crews.  
4.148.   In the same year, a Vanuatu Tourism Infrastructure Project (VTIP) was approved by the 
Vanuatu Council of Ministers, with the aim of increasing tourism's contribution to GDP through the 
promotion of sustainab le international tourism, and contributing to a buoyant and resilient tourism 
sector that provides greater economic returns to Vanuatu's citizens. Various projects, such as the 
relocation of port gates, the construction of a new tourism building and parks,  and the refurbishment 
of seawalls, are being undertaken under the VTIP.84  
4.149.   The Vanuatu Trade Policy Framework (TPF) (2012), the Government's policy document, 
outlines the importance of tourism for Vanuatu, and the importance of creating a stronger link wit h 
the local economy, especially with agriculture. A study conducted by the IFC in 2015 found that 
imported food items were a significant cost driver for the tourism sector.85 More than half of fresh 
food items (including vegetables, fruits, meat and dairy, and herbs) used by hotels and restaurants 
were imported, while the other was produced locally.  The Government has been making efforts to 
increase the provision of local products, including food items for tourists. In December  2016, the 
Vanuatu Agritourism Plan of Action was issued, and an Agritourism Steering Committee was set up. 
In November 2016, an Agritourism Festival was held, where local producers exhibited their products 
to the tourism sector.86 Other activities included tours to local farms and to fi sh farms, measures to 
improve agriculture related infrastructure, including the irrigation system, and measures to improve 
inter-island transportation.  
                                                
82 DOT online information. Viewed at: https://tourism.gov.vu/investment.php . 
83 MTTCINVB (2012), Vanuatu's National Cruise Tourism Action Plan . Viewed at: 
https://tourism.gov.vu/assets/docs/NationalCruiseActionPlan20012012.pdf . 
84 Vanuatu Project Management Unit online information. Viewed at: 
https://vpmu.gov.vu/index.php/projects/vtip . 
85 IFC (2015), Vanuatu Agri -Tourism Linkages: A Baseline Study of Agri Demand from Port Vila's 
Hospitality Sector. Viewed at: 
https://tourism.gov.vu/assets/docs/reports/VanuatuBaselineStudyOfAgriDemandinTourismFinal.pdf . 
86 VIPA,  Annual FDI report 2016 . Viewed at: http://www.investvanuatu.org/wp/wp -
content/uploads/2017/07/FDI -Annual -Report -2016-fin.pdf . WT/TPR/S/378 /Rev.1  • Vanuatu  
 
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  5  APPENDIX TABLES  
Table A1. 1 Merchandise exports by  group of  products, 2012 -16 
 
2012  2013  2014  2015  2016  
Total (US$ million)  54.8  38.6  62.8  39.0  50.2   
(% of total)  
Copra  21.4  10.0  24.3  17.6  31.9  
Kava 13.0  22.8  13.2  4.2  22.1  
Coconut oil  22.9  12.6  17.7  19.4  10.6  
Cocoa  5.1  8.0  7.4  7.8  7.5  
Beef veal  10.2  8.9  7.2  8.1  5.8  
Sawn timber  0.8  4.5  7.0  8.9  2.3  
Coconut meal  1.8  6.2  1.9  7.8  1.7  
Live fish  2.7  2.4  2.3  2.7  1.0  
Root crops  0.0  0.0  0.0  0.0  0.5  
shellfish  0.5  0.8  0.7  0.6  0.4  
Fish, other than live  3.6  3.8  0.2  0.0  0.3  
Coffee  0.1  0.2  0.5  0.3  0.2  
Cowhides  0.5  0.8  0.4  0.4  0.1  
Alcoholic beverages  3.2  3.2  0.0  0.0  0.0  
Vanilla  0.2  0.2  0.1  0.0  0.0  
Other products  13.8  15.5  16.9  22.1  15.6  
Source:  National Statistics Office of Vanuatu online information.  WT/TPR/S/378 /Rev.1  • Vanuatu  
 
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  Table A1. 2 Merchandise exports by destination , 2012 -16 
 2012  2013  2014  2015  2016  
 (% of total)  
Australia  21.7  23.5  28.6  26.9  17.4  
New Caledonia  5.2  8.5  7.4  2.5  9.0  
MSG membersa 14.0  17.8  8.8  9.3  8.8  
EU-28 1.4  1.5  1.6  1.0  4.0  
New Zealand  3.4  4.1  3.2  6.6  3.0  
Japan  6.0  6.2  3.8  4.9  1.9  
Korea, Republic of 0.4  0.2  0.4  0.1  0.0  
Other  47.8  38.2  46.2  48.6  55.8  
a Fiji, Papua New Guinea and Solomon Islands.  
Source:  National Statistics Office of Vanuatu online information.  WT/TPR/S/378 /Rev.1  • Vanuatu  
 
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  Table A1. 3 Merchandise imports by group of products, 2012 -16 
 
2012  2013  2014  2015  2016  
Total (US$ million)  290.5  311.5  311.1  365.2  368.5   
(% of total)  
Food and live animals  19.7  20.6  19.6  21.0  21.1  
Beverages and tobacco  4.3  3.9  3.9  2.8  3.2  
Crude materials excluding fuels  1.6  1.7  1.6  1.9  1.9  
Mineral fuels  17.2  15.6  17.5  10.6  8.5  
Oils, fats and waxes  0.5  0.4  0.4  0.4  0.4  
Chemical products  10.4  9.1  7.5  6.0  6.5  
Basic manufactured products  13.3  13.4  12.0  24.6  18.4  
Machines and transport equipment  22.2  23.4  26.4  23.6  25.9  
Misc. manufactured goods  9.6  10.7  10.3  9.0  13.0  
Other  1.2  1.1  0.9  0.1  1.1  
Source:  National Statistics Office of Vanuatu online information.  WT/TPR/S/378 /Rev.1  • Vanuatu  
 
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  Table A1. 4 Merchandise imports by origin , 2012 -16  
 2012  2013  2014  2015  2016   
(% of total)  
Australia  30.8  27.3  29.6  22.7  22.9  
Fiji 7.8  9.4  9.3  9.4  11.8  
New Zealand  12.7  12.5  11.9  12.3  11.5  
Singapore  16.9  15.5  17.4  11.0  8.3  
Japan  2.4  3.8  2.5  4.2  5.6  
France  2.8  4.1  3.8  2.3  5.2  
Hong Kong, China  1.8  1.9  2.2  2.4  2.8  
New Caledonia  1.8  1.1  1.5  1.6  1.3  
Other  23.0  24.3  21.8  34.2  30.6  
Source:  National Statistics Office of Vanuatu online information.  
 
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