WORLD TRADE ORGANIZATION  
ORGANISATION MONDIALE DU COMMERCE  
ORGANIZACIÓN MUNDIAL DEL COMERCIO WT/TPR/M/215/Add.1 
5 August 2009 
 (09-3796) 
Trade Policy Review Body 
6 and 8 May 2009 Original: English/ 
 anglais/  inglés 
 
  
TRADE POLICY REVIEW 
SOLOMON ISLANDS 
Record of the Meeting
 
Addendum  
Chairperson:  H.E. Mr. Istvan Major (Hungary) 
 This document contains the rep lies provided by Solomon Islands.1 
__________________________________________________________________________________ 
Organe d'examen des politiques commerciales 
6 et 8 mai 2009 
 
EXAMEN DES POLITIQUES COMMERCIALES 
ÎLES SALOMON 
Compte rendu de la réunion  
Addendum  
Président:  S.E. M. Istvan Major (Hongrie) 
 
 Le présent document contient les réponses fournies par les Îles Salomon.1 
__________________________________________________________________________________ 
Órgano de Examen de las Políticas Comerciales 
6 y 8 de mayo de 2009  
EXAMEN DE LAS POLÍTICAS COMERCIALES 
ISLAS SALOMÓN 
Acta de la reunión
 
Addendum  
Presidente:  Excmo. Istvan Major (Hungría) 
 
 En el presente documento figuran las respuestas facilitadas por las Islas Salomón.1 
 
                                                      
1 In English only./En anglais seulement./En inglés solamente.   
    WT/TPR/M/215/Add.1 
 Page 3 
 
 
 THE UNITED STATES 
 
WT/TPR/S/215  
 
III. TRADE  POLICIES  AND  PRACTICES  BY MEASURE 
(2) MEASURES  DIRECTLY  AFFECTING  IMPORTS 
(i) Customs procedures  
Question 1
 
 
Page 21, Paragraph 10-11:   The Secretariat notes that Solomon Islands has established risk 
management profiling procedures to identify high-ri sk shipments.  Please explain fully how these 
procedures are applied. 
 
Answer  
 
The Government’s risk assessment procedures ar e based on international standards and only 
high risk shipments are physically inspected.  Lo w risk shipments are normally cleared within 
a few hours.  Importers are assigned to one of  three risk levels based on past performance 
amongst other things. 
 
Question 2  
 
(ii) Customs valuation  
 
Page 21, paragraph 15 :  What are Solomon Islands’ plans to  adopt legislation to implement the 
WTO Customs Valuation Agreement?  Is the government  in the process of drafting such legislation?  
When does the government anticipat e adopting such legislation? 
 
Answer  
 
Solomon Islands currently does not have the ca pacity to implement the Customs Valuation 
Agreement.  However, the Government will take all the necessary measur es within the confines 
of its administrative and financial resources to ensure that the Customs Valuation Agreement is 
implemented.  Technical and financial assistance  will be needed to enable the Government to 
fully comply with this Agreement. 
 
Question 3  
 (iv) Tariffs 
 Page 23, paragraph 26:
  Solomon Islands recently implemented tariff reforms that reduced the 
general level of application.  Would Solomon Isla nds lock in these reforms through lower bindings to 
enhance the transparency and predictability of its trade regime and to provide greater opportunities for 
investment and economic growth?  
Answer
 
 
Solomon Islands is one of the six LDC WTO Me mbers with 100 per cent binding coverage.  The 
Government has also undertaken autonomous  liberalization during the period under review 
and the simple average applied MF N rate has declined from 23 per cent in 1998 to 9.1 per cent 
in 2009. The Government was able to undertake these reforms because it was fully aware that WT/TPR/M/215/Add.1 
Page 4  
 
 the requisite policy flexibility would allow it to ad just its tariffs up to the bound rate in times of 
difficulty.  Binding tariffs at this very low leve l would eliminate this important policy flexibility. 
 It should be noted that LDCs are not required  to apply the formula during the DDA but to 
endeavour to substantially increase their binding c overage to a level which is comensurate with 
their trade, development and financial needs.  Since Solomon Islands has already bound all of 
its tariffs (100 per cent binding coverage), it is not required, to undertake any new commitments 
in the DDA.  Requesting Solomon Islands to bind  its tariffs at the currently low applied rates 
would go far beyond what LDCs are expected to do under the DDA.  This would severely curtail 
the policy space of Government and its flexibility to  be able to use tariffs for legitimate purposes 
such as raising revenue and protecting infant industries, amongst other things.  The 
Government is concerned that revenue from logging will decline sharply from 2009 onwards, 
and there will be a need to consider all option s for raising revenue, including through tariff 
increases.  
The Government also needs the flexibility of adju sting its tariffs, within bound rates, to take 
into account a number of international developm ents. For example, as a net food importing 
developing country, the Government needs the flex ibility to be able to reduce its tariffs during a 
crisis such as recent high food prices and to be able  to adjust tariffs to their original level when 
the crisis is over.  Binding tariffs at the cu rrent low level will certainly constrain this policy 
space. 
 
The Government is fully committed to adhering to the core principles of the WTO, including 
transparency and predictability, as this is vita l to promote trade and economic growth.  To this 
end, it will continue to review its tariffs with a view to binding them at lower rates.  However, 
this will be done in a gradual and progressive  manner taking into account its level of 
development, revenue and indus try development needs, as well as its administrative and 
institutional capacity.  It should also be no ted that Solomon Islands has adopted a ‘stepping-
stone approach’ to multilateral liberalisation.  It has embarked upon regional integration 
programmes such as the Melanesian Spearhe ad Group Trade Agreement (MSGTA) and the 
Pacific Islands Countries Trade Agreement (PICTA).  This will complement liberalisation at the 
multilateral level. 
 
Question 4  
 
Page 23, Paragraph 29 :  When will the Solomon Islands fully adopt the Harmonized Commodity 
Description and Coding System (HS2002)?  
 
Answer  
 
Solomon Islands is currently using a ‘localised ’ version of the 2002 edition of the World 
Customs Organisation’s Harmonised System (HS) of product classification. In theory there 
should only be a limited need for localisation of codes, and all of the basic code groups up to a 
certain level (i.e. six-digit codes) are designed to be universally applicable.  However, due to 
administrative weakness, Solomon Islands has been  unable to apply all of the codes correctly, in 
line with the inernational standard.  The Custom s and Excise Division has drafted legislation 
that would facilitate the application of the 2007 version of the HS, but has thus far been unable to send this to Parliament for fear that they would be unable to implement the new system given 
the current problems with its poorly functioning automated system. 
  WT/TPR/M/215/Add.1 
 Page 5 
 
 
 Solomon Islands Government looks forward to m oving to a fully compliant version of the 2007 
Harmonised System as soon as our current di fficulties with administrative capacity and 
automated systems have been adequately addressed.  Question 5
 
 
Page 24, paragraph 38:  The Secretariat notes that Solomon Islands’ applied tariffs exceed bound 
rates on some items such as: wine and spirits, ci nematographic film, liquefied gases, plants and plant 
parts for perfumes or pharmacological uses. When will the Solomon Islands reduce the tariffs applied 
to these goods and all others where the applied rate exceeds the bound rate? (See Page 26, 
paragraph 38 for 36 tariff lines where this situation is known to exist and an additional six tariff lines 
that could exceed their bindings.) 
 
Answer  
 
Solomon Islands recognises that several aspects of its tax regime, including discriminatory 
goods taxes and import duties that exceed their bound rates, may well fail to conform to its 
WTO obligations.  This point was clearly enuncia ted in the Solomon Islands DTIS, and has been 
the subject of further domestic discussion in that context.  The historical reasons for the emergence of this situation are relatively straightforward.  During 
the tensions period, the basic ability of government  to raise revenue broke down.  As in many 
post-conflict states, the initial stages of the reconstruction process involved an initial centralisation of authority within the Ministry of Finance, with a view to prioritising the early establishment of a robust taxation system to maintain the near-term solvency of the 
Government.  Due to the understandably low prio ritisation of cross-government consultation 
and the high degree of involvement of external technical assistance, the resulting system tended 
to prioritise predictable and effective revenue  collection above other considerations such as 
strategic development policy or international commitments. 
 
As Solomon Islands’ recovery from the tensio ns reaches a more mature phase, there is an 
opportunity to further refine the taxation system  to take into consideration the broader interests 
of Government including compliance with it s WTO obligations.  Many opportunities for 
improvement both in the taxation system and in the government processes that lead to the 
determination of taxation policy were highlighted in Solomon Islands’ DTIS, and a draft project 
proposal has already been prepared  to address many of these issues. 
 
If donors are forthcoming with support for this pr oject, it is envisaged that the problem of a few 
items which exceed binding rates can be effect ively and fully addressed within the next 12–24 
months. 
 
Question 6
 
 
(v) Other charges 
 
Page 29, paragraph 44:   The Secretariat states that the tax rate applied to imported goods is 15% 
while the tax rate applied to domestic goods is 10% .  Please explain how th ese taxes are consistent 
with the WTO’s non-discriminatory treatment provisions. 
 WT/TPR/M/215/Add.1 
Page 6  
 
 Answer
 
 The Government will review the goods tax rate in the context of its overall tax reform programme as articulated in the DTIS to ensu re that it will not discriminate against imports. 
 
Question 7
 
 (vi) Quantitative restrictions and controls 
 
Page 30, paragraph 52:
 When will Solomon Islands notify its impo rt licensing legislation to the WTO 
Import Licensing Committee?  Where are Solomon Is lands’ import licensing requirements published 
or made publicly accessible?  Answer
 
 
The Government lacks the capacity  to notify all the notificati ons including those relating to 
import licensing.  However, the Government w ill, within the confines of its capacity and 
resources, make every effort to ensure that outsta nding notifications are submitted.  This is one 
of the areas where Solomon Islands need s technical and financial assistance. 
 The import licensing requirements are made  publicly available through the Government 
Gazette . 
 
Question 8
 
 
(viii) Technical Regulatory Conf ormity Assessment Procedures 
 
Page 31, paragraph 56 : The Secretariat Report states that Solomon Islands has not adopted 
legislation to implement the Technical Barriers to Trade Agreement.  When does Solomon Islands 
plan to adopt legislation to begin the pro cess of notifying measures under the TBT Agreement? 
 
Answer  
 
The Government lacks capacity to introduce various trade laws and submit notifications 
including those on the TBT Agreement.  Howev er, the Government is currently looking for 
technical and financial assistance to draft and implement various trade-related laws including 
those relating to the TBT Agreement.  Once the resources are secured, the relevant measures 
will be notified to the WTO. 
 Question 9
 
 
(ix) Sanitary and phytosanitary (SPS) measures 
 
Page 33, paragraph 66:   We appreciate Solomon Islands’ efforts to improve its SPS institutional 
capacity.  We are concerned, however, about the la ck of transparency in the SPS regime.  Please 
explain how Solomon Islands impl ements its SPS Agreement transpa rency obligation to publish and 
notify draft SPS measures, provide a 60 day comme nt period, and publish final measures.  Please 
identify the government’s national notification autho rity and enquiry point for SPS measures.  Does 
Solomon Islands plan to notify its  Import Specification Manual of the Solomon Islands Agriculture 
Quarantine Service?  If not, please explain wh y.  How many sanitary and phytosanitary measures  
have been adopted by Solomon Islands in the past  five years?  Have these measures been notified to 
the WTO Sanitary and Phytosanitary Committee?   WT/TPR/M/215/Add.1 
 Page 7 
 
 
 Answer  
 The Government lacks capacity to introduce SPS measures that are fully compatible with the 
SPS Agreement including publishing and notifyin g draft SPS measures as well as allowing a 60-
day comment period.  The Government also la cks capacity in terms of establishing the 
notification authority and enquiry point for SPS measures.  However, the Government is 
currently looking for technical and financial a ssistance to strengthen its human resources as 
well as the institutional capacity to comply with the SPS Agreement.  Once the resources are 
secured, the relevant WTO-compatible legislation and institutions will be introduced and established and all measures, including the Manual of the Solomon Islands Agriculture 
Quarantine Services, will be notified to the WTO.  
Question 10
 
 
(4) Measures Affecting Production and Trade  
Various sections of the Secretariat Report (espec ially page 20, paragraphs 3- 4; page 36, paragraph 
81 through page 38, paragraph 89; page 40, par agraph 106 through page 42, paragraph 113) 
indicate what appear to be notifiable subsidy pr ograms, some of which have export performance 
and/or local content requirements.  When will Solomon Islands submit the necessary Article 25 
notification under the SCM Agreemen t for these programs?  Please describe any local content 
requirements for the programs detailed in the Report.  
Answer
 
 
Subsidies play an important role in economic de velopment programmes of developing countries 
(Art. 27 of the ASCM).  The prohibition of subs idies contingent upon export performance does 
not apply to LDCs (Art. 27.2).  However, the Go vernment will notify all of its subsidies and 
phase out those that are contingent on the use of domestic over imported goods.  
 Transparency has been enhanced by publicatio n of quarterly reports on exemptions by the 
Ministry of Finance and Treasury.  
 
Solomon Islands will take the neces sary measures to ensure that a ll of its measures are notified 
to the WTO under the ASCM, as well as the TRIMs Agreement.  However, it should be noted that measures taken by LDCs may be justified under the TRIMs Agreement based on the paragrapgh 84, Annex F, of the Hong Kong Mini sterial Declaration (WT/MIN (05)/Dec).  These 
measures are necessary to promote local value addition and lift thousands of people from 
economic malaise and poverty.   
 
Question 11
 
 
(vi) Intellectual property rights 
 
Page 45, paragraph 136 :  The Secretariat states, “In the context of the previous Review of Solomon 
Islands, the authorities expressed the intention to bring their intellectual property regime into 
conformity with WTO obligations by 2002.”  What is the status of government efforts to fulfil its 
intentions?  Also, what is the status of Sol omon Islands’ intellectual property protection and 
enforcement systems with respect to the provisions of  Articles 3-5 of the TRIPS Agreement?  Please 
explain. 
 WT/TPR/M/215/Add.1 
Page 8  
 
 Answer
 
 
Government intentions in 1998 to bring Solo mon Islands’ intellectual property regime into 
conformity with WTO obligations by 2002 w ere somewhat hampered by a period of ethnic 
violence and civil unrest, known as the ‘tensions ’, gradually escalating from 1998 through to 
2003, and ultimately resulting in the non-func tioning of most government systems.  
Implementation of new intellectual property legi slation during this period slowed noticeably. 
 Since the Doha Declaration on the TRIPS Agreement and Public Health in 2001
2 and the 
concomitant sea change in the global intellect ual property climate, the Government’s first 
priority in the intellectual property sphere has been to understand and take advantage of all 
flexibilities and exceptions which facilitate a ccess to the inexpensive medicines needed by 
Solomon Islanders.  However, tech nical capacity in this area is weak across all agencies of 
government, and the ability even to understand th e relevant provisions — let alone to complete 
the lengthy and complex procedures that are o ften required to secure exceptions — is lacking. 
 
The Government does not have adequate human and financial resources to introduce laws and 
establish institutions to implement TRIPS obli gations.  However, Solo mon Islands will make 
every effort to ensure that it complies with those areas of the TRIPS Agreement that are 
currently applicable to LDC Members, including the provisions relating to national treatment and most favoured nation.  To this end, the G overnment looks forward to technical cooperation 
under Article 67 of the TRIPS Agreement to assist it in implementing the TRIPS Agreement, 
especially in those areas that have di rect benefits to Solomon Islands.  
 
Question 12
 
 Page 45, paragraph 137
: Has the Copyright Act been published in the Solomon Islands Gazette?  
What is the date of publication?  How is the Act being implemented?  
 Answer
 
 The Copyright Act has been published, and a copy can be found at http://www.PacLII.org/.  
However, the regulations nece ssary to enforce the Act have not been promulgated.  The 
Government also lacks adequate capacity to impl ement the Act.  To this end, Solomon Islands 
requires technical and financial assistance to develop the capacity to implement the Act. 
 IV.
 TRADE  POLICIES  BY SECTOR 
(4) FORESTRY 
 Question 13
 
 
Pages 52-54, paragraphs 29-41:   The Secretariat report draws attention to Solomon Islands’ weak 
legal framework for the forest sect or.  When will Solomon Islands co mplete the steps to adopt and 
effectively implement new forestry legislation?  Has Solomon Islands considered participating in 
initiatives or organizations like the International Tr opical Timber Organization that are designed to 
build capacity to practice sustainable forest manage ment and enhance cooperation to combat illegal 
logging and associated trade? 
 
                                                      
2 WT/MIN(01)/DEC/2.  WT/TPR/M/215/Add.1 
 Page 9 
 
 
 Answer  
 
Several attempts were made in the past to refor m the Forestry Act, including the latest one in 
2004, but little progress has been made.  The current Government is fully committed to 
reforming the Forestry Act to promote sustai nable forestry management practices.  The 
Government is grateful for the considerable t echnical assistance already provided by Australia 
on an ongoing basis in this area.  
 
Question 14  
 
(7) Manufacturing 
 
Page 57, paragraph 58:   The Secretariat’s report discusses the St ate’s ability to prevent market entry 
into particular industries (the text of the law sp ecifies industries such as the manufacture of paints 
and varnishes and the processing of color film) on public  interest grounds.  Does this policy restrict 
access by both foreign and domestic firms?  How do es the government determine which restrictions 
are in the “public interest”?  
 Answer
 
 
Nothing in the Act discriminates, a priori, be tween foreign and domestic firms.  Both are 
equally permitted to apply for protection under the Act, and both are equally excluded from 
production in protected industries.  It is important to note that the Act makes no  provision for any form of restriction on goods 
crossing the border into Solomo n Islands, whether a tariff, quota or any other form of 
restriction. 
 In practice the Act has seldom been invoked, an d an insufficient case law exists to determine 
what criteria might be used to determine how the ‘public interest’ is interpreted.  
AUSTRALIA 
 
I. ECONOMIC ENVIRONMENT (1) OVERVIEW  Question 1
 
 
The Secretariat’s Report (Paragraph 2 on page 1) notes that Solomon Islands Government finances 
are ‘dependent to a large extent on proceeds from  logging and foreign aid flows, both of which are 
expected to decline in the near future.’   a. What revenue and/or expenditure measures does the Government plan to implement to 
support the budget following the loss of logging-related revenue? 
 b. What measures will the Government take to  further improve conditions for business, 
including foreign investors, to assist the developm ent of a stronger private sector in Solomon Islands? 
 
c. How can further trade liberalisation provid e opportunities for growth in the Solomon Islands 
economy?  WT/TPR/M/215/Add.1 
Page 10  
 
 Answer
 
 
a. The Solomon Islands Government has deve loped a strategy for managing the economy 
which will help to ensure that the Government co ntinues to meet its commitments to delivering 
services to Solomon Islanders. 
 
To protect the Budget and the economy at a difficult time, when revenues are being cut by slowing exports and lower commodity prices, the Government will manage expenditures by 
placing a 10 per cent reservation on 2009 Budg et reservations.  The Government will also 
prevent payroll expenses from expanding by li miting recruitment to replacing people in 
previously filled positions.  Projects to be  funded under the development Budget will be 
prioritized to reduce overall spending.  The G overnment will also look to implement new 
revenue measures including an increase in  excise duty on alcohol and tobacco. 
 b. The Government will take the following st eps to encourage the growth of a stronger 
private sector in Solomon Islands: 
 
• Implementation of the new Secured Transaction Act, 2008 
• Implementation of the new Companies Act 2009 and Companies (Insolvency and 
 Receivership) Act 2009. 
• Establishment of a new Companies Registry, 2009 
• Establishment of a new Secured Transaction Registry, 2009 
• Introduction of a new Cooperate Trustees Law, 2009–2010 
• Review and reform of business registration and licenses regime, 2009–2010 
• Review and reform of enforcing contracts, 2009–2010 
• Review and reform of Investment Policy, Law and Promotion, 2009–2010 
• Review and reform of property registration 
• Improving the performance of key SOEs pr oviding services like water, energy and air 
 services. 
 
c. Solomon Islands’ participation in the R ecognised Seasonal Employer (RSE) scheme has 
been a great success over the last few years, wi th the number of Solomon Islanders moving to 
New Zealand to work for a period of up to seven  months each year rising continuously.  The 
scheme reduces unemployment, particularly in rura l areas that frequently do not benefit from 
the effects of Honiara-centric economic grow th.  Typically, a large number of dependents 
benefit from the remittances submitted by a single worker, and the country as a whole benefits 
from the hard currency thereby repatriated.  Th e Government’s current liberalisation focus is 
on a preferential trade agreement in services a nd the temporary movement of natural persons 
throughout the Pacific region, which the Govern ment hopes will extend the benefits of the RSE 
scheme beyond New Zealand to many other economies. 
 
Question 2
 
 Can Solomon Islands provide an upda te on the impact of the Global Economic Crisis on its fiscal and 
balance of payments balances?  
Answer
 
 
The global economic crisis is having adverse im pacts on even remote countries like Solomon 
Islands.  The impact is being felt mainly in the areas of production, export, GDP growth and 
government revenue.  WT/TPR/M/215/Add.1 
 Page 11 
 
 
 In terms of the balance of payments, the crisis has already led to falls in the prices of, and 
demand for, Solomon Islands’ main exports.  Copra, fish, palm oil and cocoa prices declined in 
2008 and are expected to remain low in 2009.  Table 1 provides a comparison of commodity prices as at end March 2009 with the same month a year ago.   
Period3 Copra Fish Palm oil Cocoa 
March 2008 972 1475 1248 2726 
March 2009 416 1225 597 2501 
 
Table 1:  Commodity Prices (in US$ p er tonne) relevant to Solomon Islands. 
 
Demand for Solomon Islands exports, particularly  logs from importing countries like China has 
also slowed down.  This in turn has harmed export receipts and increased the pressure on the 
country’s foreign reserves.  Fore ign reserves had declined to around 2.6 months of import cover 
at the end of March 2009 compared to 3 months in March 2008.  
In terms of government revenue, the slowdown in  exports has led to lower revenue from export 
duties, especially from logs.  Preliminary reve nue data for March 2009 show that collections 
from the two major sources (Customs and In land Revenue) were lower than budget and the 
same month last year. As a result, government  is reprioritising expenditure and exploring 
revenue enhancement measures. 
 
The extent to which Solomon Islands will ultimately  be affected by the global economic crisis is 
difficult to predict.  But the economy is certai nly slowing down and GDP growth will be lower in 
2009.  A lot depends on what happens to China and the resilience of the subsistence sector in 
Solomon Islands.  As the single largest importer  of Solomon Islands exports, any damage the 
crisis inflicts on China will have serious repercu ssions for the Solomon Islands economy.  Lower 
Chinese demand for Solomon Islands logs wo uld lead to lower growth, employment, 
government revenue and a less favourable trade deficit.  Solomon Islands was also severely affected by the increases in prices of food and fuel in 2008 
and the Government had to eliminate import duti es on rice.  However, the prices for fuel and 
food have since stabilised.  Lower fuel prices are now filtering down to consumers in the 
country, but lower international fo od prices, especially rice prices,  are yet to be passed on to 
consumers in Solomon Islands.  No direct effect on tourism or remittances has ye t been detected.  However, the full impact on 
these sectors will take time to assess fully.  
Question 3
 
 (4) MONETARY AND EXCHANGE RATE POLICY 
 
Australia notes that the Central Bank controls on liquidity have constrained the lending capacity of 
commercial banks in Solomon Islands (Secretaria t’s Report, paragraph 20 on page 5).   
 a. Have the measures had the desired effect  on reducing domestic inflation, and is the 
government considering any alternative measures wh ich might contribute to containing pressures on 
domestic inflation without c onstraining commercial lending? 
                                                     
 
3 Monthly data. WT/TPR/M/215/Add.1 
Page 12  
 
 Answer
 
 In 2008, the Central Bank tightened monetary po licy aimed at arresting excess liquidity in the 
banking system, defending the foreign reserves, ra ising deposit rates and slowing credit growth.  
This action was taken because the excess liquidity  overhang that is driving credit growth has 
directly contributed to the rise in import paym ents, high inflation and downward pressure on 
the foreign reserves.   Inflationary pressures in 2008 were exacerbated by  rising international food and oil prices. 
 
Whilst it is still early to judge with certainty,  so far the measures ar e producing the desired 
results.  Inflation peaked at 23.5 per cent in September 2008, and slowed down to a provisional 17.8 per cent in March 2009 (the fall in oil prices has also contributed to  the decline); import 
growth has slowed to 14 per cent in 2008 from 46 per cent in 2007; and the decline in foreign reserves has stabilized at around 2.6 months of import cover since November 2008.  The 
measures have also led to a rise in deposit rates from a weighted average deposit rate of 0.6 per 
cent in 2007 to 3.0 per cent in 2008, a welcome development following many years of very low deposit rates.  These measures are being continuously reviewe d and will be adjusted and amended as and 
when appropriate. 
 
Question 4
 
 The Secretariat’s Report (Paragraph 26  on page 7) notes that ‘[the]  imminent decline in logging 
exports poses serious challenges for Solomon Islands ' external sustainability, a nd calls for additional 
efforts to stimulate growth in other export-oriented sectors…’. 
 a. What steps are the Government and the Centra l Bank taking to ensure the sustainability of its 
foreign exchange reserves in light of the increasing tr ade deficit and the forecast decline of the 
logging industry?  
 
Answer
 
 In support of the Central Bank measures outl ined in response to question 3 above, the 
Government has significantly reduced its expe nditure as a way of reducing its own demand.  
The Government has also been engaged with donors to discuss how they might alter or speed up 
their delivery of programs in such a way as to bolster foreign reserves.  
Question 5
 
 
II. TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES 
(4) FOREIGN INVESTMENT REGIME 
 
The Secretariat’s Report (Paragraph 21 on page 12 ) notes the Registrar monitors compliance by 
foreign investors with the Foreign Investment Act and regulations.  a. What is involved in a compliance review and what is the process for foreign investors found 
to be non-compliant?   WT/TPR/M/215/Add.1 
 Page 13 
 
 
 Answer  
 A compliance review is designed to ensure that a foreign investor is not involved in any reserved 
activity, that the investor establishes operations wi thin twelve months of registration and that 
they submit a survey report every financial year .  At the same time, compliance with relevant 
immigration and labour laws is also examined. 
 Investors found to be non-compliant are either given 7–14 days to comply (depending on the 
severity of the breach), or required to provide justification for non-compliance.  A continued 
failure to comply may lead to deregistration. 
 
Question 6
 
 (5) INTERNATIONAL RELATIONS (i) Participation in the WTO 
 
The Secretariat’s Report (Paragraph 35 on page 15) notes that Solomon Islands has only made three 
notifications since the establishment of the WTO.   a. Can Solomon Islands indicate when it will submit its outstanding notifications to allow WTO 
members to review Solomon Islands’ compliance with its WTO obligations and commitments? 
 
Answer
 
 The Government lacks the human and financial reso urces to submit notifications.  However, the 
Government will make every effort, within the confines of its limited resources, to ensure that 
all the outstanding notifications are submitted.  Solomon Islands needs technical and financial 
assistance to comply with its notification obligations. 
 
Question 7
 
 (ii) Participation in regional and other trade agreements 
(a) Regional arrangements  
The Secretariat’s Report (Paragraphs 43-45 on pag es 17-18) refers to the EU Economic Partnership 
Agreement (EPA) currently being negotiated with Solomon Islands (and other Pacific ACP countries). 
Under the Pacific Agreement on Closer Economic Relations (PACER), the commencement of FTA 
negotiations between any Forum Island Count ry and any developed non-Forum country is the 
"trigger" mechanism for the FIC to offer to undert ake consultations with Australia and New Zealand 
to commence negotiations of reciprocal free-trade arrangements (either a single free-trade area or a 
customs union).  a. Can Solomon Islands provid e an update on the negotiations on the EPA with the EC, and the 
implications of finalising this agreem ent for Australia and New Zealand?  
 Answer
 
 
Information relating to the Economic Partn ership Agreement is currently confidential, and 
shall only be made publicly available once an agreement has been reached.  The PACPS have 
provided regular updates to Australia and New Zealand on the progress of the EPA negotiations and the implications for PACER through the usual fora, including the Forum 
Trade Ministerial Meetings and Leaders Summit, and shall continue to do so.  The World WT/TPR/M/215/Add.1 
Page 14  
 
 Trade Organisation will also be notified abou t these regional arrangements at the appropriate 
time.  Question 8
 
 
III. TRADE POLICIES AND PRACTICES BY MEASURE (2) MEASURES DIRECTLY AFFECTING IMPORTS (iv) Tariffs  (b) WTO bindings 
 
Australia wishes to acknowledge the efforts of Sol omon Islands in reducing its  simple average applied 
MFN tariff from 23% in 1998 to 9.1% in 2009. Australia notes the Secretariat’s Report (Paragraph 
38 & Table III.3 on page 26) highlights cases wher e Solomon Islands has applied MFN tariff rates 
which exceed the bound rate.   a. Can Solomon Islands explain why there are app lied MFN tariff rates which exceed the bound 
rate and whether reforms are planned to ensure co mpliance with its WTO scheduled commitments? 
 
Answer
 
 Solomon Islands recognises that several aspects of its tax regime, including discriminatory 
goods taxes and import duties which exceed their bound rates, may well fail to conform to its 
WTO obligations.  This point was clearly enuncia ted in the Solomon Islands DTIS and is also 
being considered by the relevant national authorities.  The historical reasons for the emergence of this situation are relatively straightforward.  During 
the tensions period, the basic ability of government  to raise revenue broke down.  As in many 
post-conflict states, the initial stages of the reconstruction process involved an initial 
centralisation of authority within the Ministry of Finance, with a view to prioritising the early establishment of a robust taxation system to maintain the near-term solvency of the 
government.  Due to the understandably low priori tisation of cross-government consultation 
and the high degree of involvement of external technical assistance, the resulting system tended 
to prioritise predictable and effective revenue  collection above other considerations such as 
strategic development policy or international commitments. 
 As Solomon Islands’ recovery from the tensio ns reaches a more mature phase, there is an 
opportunity to further refine the taxation system  to take into consideration the broader interests 
of government as  well as compliance with WTO obligations. Many opportunities for 
improvement  both in the taxation system and in th e government processes that lead to the 
determination of taxation policy were highlighted in Solomon Islands’ DTIS, and a draft project 
proposal has already been prepared  to address many of these issues. 
 If donors are forthcoming with support for this pr oject, then it is hoped that these issues can be 
effectively and fully addressed within the next 12–24 months. 
 
Question 9
 
 (v) Other charges 
 
The Secretariat’s Report (Paragraph 44 on page 29) notes that Solomon Islands applies internal 
taxes in both a discriminatory and inconsistent manner:  the goods tax rate is 15% for imports but 
only 10% for domestic goods, while imported beer, tobacco, and cigarettes are not subject to the 
excise duties levied on the same goods produced domestically.   WT/TPR/M/215/Add.1 
 Page 15 
 
 
 a. Can Solomon Islands explain how the applicat ion of these internal taxes complies with the 
principle of national treatment (Article III, GATT 1994)? 
 
Answer  
 
The reasons for the existence of such discriminato ry internal taxes have been highlighted in 8 
(a) above and the Government will take the necessa ry measures to ensure that its internal taxes 
are in line with its national treatment ob ligations as per Article III of GATT 1994. 
 
Question 10  
 
(ix) Sanitary and phytosanitary (SPS) measures 
 
Australia is concerned that Solomon Islands’ animal and plant import specifications are non-
transparent and appear to be appl ied in a discretionary manner and th erefore operate as a significant 
barrier to trade.  (Secretariat’s Report, paragraph 62 on page 32)/ 
 a. Can the Government indicate when it will submit WTO notifications on Solomon Islands’ SPS 
measures? 
 
Answer
 
 
Solomon Islands lacks the capacity  to comply with its WTO notifi cation obligations.  However, 
the Government will make every effort, within the constraints of its administrative and financial 
capacity, to ensure that all the outstanding notifications including those relating to SPS 
measures are submitted.  This is one of the areas where technical and financial assistance is 
required.  
Question 11
 
 The Secretariat’s Report (Paragraph 66 on page 33) notes SPS measures are developed by the Chief 
Plant Protection Officer or the Chief Veterinary Officer. 
 
a. Is there any procedure for publication of these measures to improve transparency? 
 
Answer
 
 
The official procedure is for the Director of  Quarantine to submit all measures to the 
International Plant Protection Convention (IPPC),  for addition to their website.  However, 
capacity constraints have prevented this procedure from being followed in practice. 
 
Question 12  
 
(3) MEASURES DIRECTLY AFFECTING EXPORTS 
(ii) Export taxes, quantitative restrictions and licensing  The Secretariat’s Report (Paragraph 78 on page 34-35) notes that ‘[round] logs are generally subject 
to compound (ad valorem and specific) rat es, applied on a "determined value"…’. 
 
a. What have been the impacts on the sustainabi lity of the Solomon Islands logging industry of 
applying duties on the basis of a “determined value”  for round logs rather than the world price? 
 b. What factors are considered when cha nges to the “determined price” are made? WT/TPR/M/215/Add.1 
Page 16  
 
 c. What have been the challenges in enforcing the collection of duties on Solomon Islands’ 
exports, including round logs? 
 
Answer
 
 
a. We are not aware of any empirical anal ysis comparing sustainability under the two 
systems.  b. The determined value reflects a combinat ion of the world market price for Solomon 
Islands logs in relevant markets, taking into  account shipping and other costs and various 
industry considerations. 
 c. Solomon Islands faces many challenges in th e collection of duties on the export of round 
logs, but the greatest is the lack of administra tive capacity, which prevents customs officials 
from maintaining a physical presence across all areas from which round logs  are extracted.  
This  prevents direct observation and inspection of export activities. 
 
Question 13
 
 (iii) Duty and tax concessions 
 
The Secretariat’s Report (Paragraph 85 on page 37) not es that Solomon Islands allows firms a 150% 
deduction of export promotion and marketing expen ses for income tax purposes, upon application. 
Also, firms that export manufactured goods, fresh sea food, or fresh agricultu ral produce are eligible 
for an income tax exemption on export profits of between three and six years.   
a. Can Solomon Islands explain why such  exporters are allowed a lower tax burden? 
 
Answer
 
 
The lower tax burden on exporters is designed  to encourage economic development through 
export promotion in accordance with Article 27.2 (a) of the ASCM. 
 
Question 14  
 
(4) MEASURES AFFECTING PRODUCTION AND TRADE 
(ii) Competition policy and price controls 
 
The Secretariat’s Report (Paragraph 103 on page 40 ) notes that price controls apply on a range of 
agricultural products (milk, meat, fish, sugar, soap, rice,  cooking oil, curry powder, biscuits), and 
that price controls are sometimes specified for particular brands.  
 a. Can Solomon Islands explain why the mark- up used to determine the maximum wholesale 
price of imported rice is higher than for domestic rice? 
 b. Can Solomon Islands also explain why price controls are sometimes specified for particular 
brands? 
 
Answer
 
 a. The mark-up permitted above the landed cost of goods is based on the cost from landing to point of sale.  At the last time at whic h the price control list was reviewed, there were  WT/TPR/M/215/Add.1 
 Page 17 
 
 
 significant additional costs associated with pa ssing an imported product through customs and 
quarantine that did not apply to locally produced goods.  b. In practice, price controls are no longer based on particular brands.  The Government 
intends to rectify this the next time price control regulations are reviewed.  
 
Question 15
 
 
The Secretariat’s Report (Paragraph 104 on page 40) notes petrol and diesel are subject to fixed 
wholesale and retail prices.   
 
a. Can the government detail the procedures used  to determine fixed prices and the frequency of 
reviews of price controls for petrol and diesel?  b. Do these price controls affect the commercial viability of fuel retailers? 
 
c. What measures are taken to ensu re fuel retailers remain competitive? 
 
Answer
 
 
a. The two oil companies currently operatin g in Solomon Islands, Markworth Oil (MOL) 
and South Pacific Oil (SPOL) submit regular ac counts to Government detailing their costs in 
justification of their wholesale prices.  The two companies currently use different systems in 
order to do this.  The Price Control Unit, with support from the Import Management Adviser of the Pacific Islands Forum Secretaria t, continually monitors these s ubmissions.  Retailers’ prices 
are then regulated by Government, based on a mark-up from the wholesale price charged by 
the two importing firms. 
 b. In response to petitioning from fuel reta ilers in 2008, who sought an increase of the 
permissible mark-up on diesel from SB$0.50 to  SB$2.00 per litre, the Price Control Unit 
undertook a thorough investigation of five reta ilers (a substantial proportion of the Solomon 
Islands market) to determine their commercial viability under current regulation.  The result of 
this investigation was to grant retailers a 50 pe r cent increase in the permissible mark-up to 
SB0.75 per litre.  A similar investigation to examine the current permissible mark-up on kerosene is due to be completed later this year.  Given the active response of the Price Control 
Unit to the concerns of retailers, and the detaile d methods utilised to investigate the commercial 
viability of the business under applied regulation, the Government believes that current price 
control measures protect consumers within a ma rket that is vulnerable to the exercise of 
monopoly power without harming the commercial viability of retailers. 
 c. The Government recently decided that the Price Control Unit should conduct a detailed 
review of retailers’ margin on an annual basis,  starting in November–December 2009, in order 
to ensure that retailers continue to provide competitive prices to the consumer market.  
 
Question 16
 
 (iii) Incentives 
 Special privileges, such as tax exemptions, appear  to be available to a wide range of businesses 
(Secretariat’s Report, Paragraph 106 on page 40).   
a. Can Solomon Islands provide further details  about the exporting entities which are eligible 
for special privileges? WT/TPR/M/215/Add.1 
Page 18  
 
 Answer
 
 
The Solomon Island Income Tax Act allows tax relie f on the export profits as detailed below, in 
accordance with Aritcle 27.2 of the Agreem ent on Subsidides and Counterveiling Measures 
(ASCM).  The following incentives are di scretionary and may be approved by the 
Commissioner of Inland Revenue.  Administrative gu idelines have been prepared that assist the 
Commissioner to make his or her decisions in a transparent and consistent manner. 
 
Local Value Added Extent of Tax Relief on Export Profits Years 
75% and over 100% 6 
50% and under 75% 100% 5 
40% and under 50% 100% 4 
25% and under 40% 100% 3 
 
Provided the exporter has not been granted tax relief under the First Schedule, they may be 
granted tax relief on profits  for 3–6 years for the export of: 
 
1. manufactured or processed goods, 2. fresh seafood, or 3. fresh agricultural produce.  
Enhanced deductions to the extent of 150 per cen t of the sum expended are also allowed for the 
promotion and marketing of exports, including researching markets, testing potential products 
in markets, promotional travel, advertising a nd participation in trade fairs and missions. 
 
Question 17
 
 
(iv) State trading, state-owned enterprises and privatization 
 
The Secretariat’s Report (Paragraphs 116-118 on page  42-43) notes that state-owned enterprises 
(SOEs) operate in a wide range of sectors, incl uding agriculture, fishing, forestry, manufacturing, 
electricity, broadcasting, air transport, ports, pos tal services, and water, but authorities indicated in 
the previous review of the Solomon Islands that there were only two state-trading enterprises in the 
sense of Article XVII of the GATT 1994.  a. Can Solomon Islands provide further inform ation about these SOEs, and explain why these 
SOEs, particularly the agriculture and forestry-produc ts entities, are not regarded as falling within 
the definition of State Trading Enterprises (STEs) in Article XVII of GATT 1994?  
 b. When will Solomon Islands notify its STEs to the WTO? 
 
Answer
 
 
a, b. The government will make every effort  to ensure that outstanding state-owned 
enterprises, where falling under the definition of State Trading Enterprises in Article XVII of GATT 1994, are notified to the Secretariat as soon as administrative resources are available to 
do so. 
 
Question 18
 
 The Secretariat’s Report (Paragraph 117 on page 42) states that th ere is uncertainty about whether 
the Government Pharmacy still has exclusive import rights on some alcohol products. 
  WT/TPR/M/215/Add.1 
 Page 19 
 
 
 a. Could Solomon Islands clarify whethe r the exclusive import rights are in force? 
 
Answer  
 
Exclusive import rights  are no longer in force . 
 
Question 19  
 
The Secretariat’s Report (Paragraph 120 on page 43) refers to the IMF a ssessment that several of 
Solomon Islands’ SOEs are ‘in arrears, depend on government support, and provide poor services.’ 
 
a. Can the government provide an update on any plan s or work that is underway to privatise 
SOEs?  b. Can the Government provide detail on the bud getary impact of supporting poorly-performing 
SOEs? 
 c. How has Government support for poorly-perfor ming SOEs affected the development of a 
strong private sector in Solomon Islands?  Answer
 
 
a. The government is currently assessing the need  for restructuring of all SOEs with the 
objective of improving service provision and reducing ongoing government liabilities.  As part of this programme, the Government recently privatised Home Finance Ltd.  
b. Any unanticipated support the Government  must provide to an SOE has a negative 
impact on the Budget.  Current reforms aim to address the negative impact of this support.  
This is one reason for the recent focus on strengthening and reforming SOEs.  c. Government support for loss-making and poorly performing SOEs has affected the 
development of a strong private sector both positively and negatively. 
 
Government support for SOEs in the transport sector has provided the private sector with affordable, predictable services on which they are highly dependent for their basic operation, 
particularly for firms with substa ntial operations outside Honiara. 
 
On the other hand, the telecommunications sector provides a contrary example of an SOE that 
has inhibited the development of a strong private sector — a concern which government is presently actively addressing.  The Government’s policy is to reform its SOEs in support of a strong private sector. 
 
Question 20
 
 
The Secretariat’s Report (paragraph 121 on page 43) notes that regul ations ‘required to implement 
key provisions’ of the State Owned Enterprises Act 2007 ‘have not yet been enacted’.  a. When are these regulations  expected to be enacted? 
 WT/TPR/M/215/Add.1 
Page 20  
 
 Answer
 
 
The Government is first working to improve the capacity of SOEs to comply with the SOE Act 
requirements, particularly their financial st atements and accounting capabilities.  The 
regulations will then be enacted as soon as possible. 
 
Question 21  
 IV. TRADE POLICIES BY SECTOR (2) AGRICULTURE 
 
The Secretariat’s Report (Paragraph 4 on page 47) notes that copra and cocoa are Solomon Islands’ 
main cash crops.  a. Can Solomon Islands provide an update of the im pact of declining world commodity prices on 
copra and cocoa production in Solomon Islands? 
 b. Can Solomon Islands detail any plans or  work underway to improve productivity and 
competitiveness in these industries? 
 
Answer
 
 
a. The lower prices for copra and cocoa have  led to a fall in production (see Table 2). 
 
Period4 Copra Cocoa 
March 2008 3350.3 126.9 
March 2009 914.7 98.8 
 
Table 2:  Solomon Islands Production (in metric tonnes). 
 
As copra and cocoa are basically smallholder crops , this is bad news for rural farmers because 
they will receive less income for their products.   In an environment of high inflation, less well-
off Solomon Islanders, esp ecially those living in rural areas,  will be hit hard and levels of 
poverty and hardship will increase.  b. The government recognises that significant improvements in production can be achieved merely by replacing plants whose yield has fa llen with age.  Beyond that, the Government is 
involved in various projects to encourage forms of value addition, an area in which Solomon 
Islands lags competitor countries particularly in the copra sector. 
 
Question 22
 
 
The Secretariat’s Report (Paragraph 5 on page 48) notes that a majority foreign-owned company, 
Guadalcanal Plains Palm Oil Ltd (GPPOL), has received numerous incentives, including a ten-year 
income tax holiday and duty-free import of capital goods for a specified period.    a. Could Solomon Islands clarify  whether any of these incentives are contingent on export 
performance/incorporati on into exported products? 
 
                                                     
 
4 Monthly data.  WT/TPR/M/215/Add.1 
 Page 21 
 
 
 Answer  
 
None of the incentives provided to GPPOL are di rectly contingent on export performance or 
incorporation into exported products.  These in centives were provided to GPPOL as part of a 
rehabilitation package addressing damage done  to their facilities during the tensions. 
 
Question 23  
 (4) FORESTRY 
 
The Secretariat’s Report (Paragraphs 29 -30 on page 52) notes that forestry has been a key driver of recent economic growth, exports and tax revenue and that, given the unsustainability of current 
harvesting rates, there is a ‘pressing need to take measures to ensure the long-term viability of 
production’.  
a. Can Solomon Islands provide an update on the impact of the Global Economic Crisis on 
forestry production and exports  from Solomon Islands? 
 b. Can Solomon Islands detail any plans or wo rk currently underway to improve sustainability 
in this industry? Answer
 
 
a. The demand for Solomon Islands logs fell in early 2009 due to the global economic crisis. As a result, log production is projected to fall in 2009.  The operations of logging companies in 
Solomon Islands will be affected like other exporting industries.  
Shows log production and prices for the month of March 2009 compared with the same month 
last year.   Low production levels in 2009 will translate into  lower export receipts and hence lower export 
duty receipts from logs in 2009.  Log receipts represent 60 per cent of total export receipts and about 17 per cent of government revenue.  So the decline in the logging sector will have a major 
negative impact on the balance of  payments and fiscal position. 
 
Period5 Production Prices6 
March 2008 126.1 305 
March 2009 60.86 289 
 
Table 3:  Log production (in ’000 cubic metres) and prices (in US$ per cubic metre). 
 
b. In ensuring sustainable forestry manage ment, the Forestry Department implemented a 
reforestation program beginning in 2008, aimed at planting 500 hectares of smallholder forest 
plantations every year.  The programme aims to increase new plantings, but also to improve the 
management and maintenance of existing small-scale, family-o wned timber plantations.  The 
Department is enhancing operational capacity so that it can monitor compliance with sound 
environmental practices and ensure that remai ning forests are harvested in a sustainable 
manner.  
Another program currently in the design phase will encourage smallholders to engage in 
downstream processing of timber to create value -added products that benefit resource owners. 
                                                     
 
5 Monthly data. 
6 Source:  World Bank database. WT/TPR/M/215/Add.1 
Page 22  
 
 Question 24
 
 (5) MINING  The Secretariat’s Report (Paragraph 46 on page 55) notes that applicants who hold three or more 
prospecting licences, and have not applied for a mini ng lease, are not eligible for new prospecting 
licences.    a. Is this a discretionary rule?  
b. How does this impact on applicants that want to extend the area of an existing prospecting 
licence? 
 
Answer
 
 a. Yes. 
 
b. Applications for both expansion and reduc tion of existing prospecting areas are 
submitted to the Mines and Minerals Board for consideration by the Board during renewal of an existing prospecting license, usually after a period of three years.  The Mines and Minerals 
Board then makes a decision as to whether to permit or reject the application. 
 
Question 25
 
 (8) SERVICES 
 
As noted at paragraph 65 on page 58 of the S ecretariat’s Report, Solomon Islands has scheduled 
commitments in only 29 of the 160 subsectors in th e GATS. By assuming a greater number of GATS 
commitments, Solomon Islands would enhance th e predictability of its service activities. 
 a. Could Solomon Islands advise of any future plans to expand its services commitments? 
 
Answer
 
 Solomon Islands has no immediate plans to expa nd its services commitments.  The Government 
needs to introduce the relevant services regu latory regime before making any further 
multilateral commitments on services.  Currently, the Government lacks the technical capacity 
and resources to undertake the nece ssary consultations with various stakeholders, to introduce 
the relevant regulatory and institutional infrastructure, and to draft the appropriate commitments.  However, Solomon Islands will continue partic ipating in the DDA negotiations in accordance 
with the Modalities for the Special Treatment for least-developed country Members in the 
negotiations on trade in services. The modaliti es provide more flexibilities to LDCs to open 
fewer sectors, liberalize fewer types of transa ctions, and progressively extend market access in 
line with their development situation, trade and financial needs. 
 
Question 26
 
 
(ii) Financial services 
 
Australia is concerned that Prudential Supervision Policies (Secretariat’s Report, paragraph 76 on 
page 61) imposed by the Central Bank of Solomon Islands (CBSI) to regulate the financial market are  WT/TPR/M/215/Add.1 
 Page 23 
 
 
 overly burdensome and limit the abilty of co mmercial banks to provide financial services, in 
particular in requiring commercial banks to hol d an unnecessary amount of capital (Secretariat’s 
Report, paragraph 81 on page 62).  a. What measures are in place to ensure CB SI regulations are not overly restrictive? 
 
b. Are there procedures for consultation befo re regulations are introduced or avenues to 
challenge regulations? 
 
Answer
 
 
a. The measures put in place are consis tent with Basle requirements, and were 
implemented with input and guidance from both the Australian Prudential Regulation Authority and the IMF.  They are similar to the requirements of other regional jurisdictions.  
The measures are not intended to constrain co mmercial banks’ activities. Commercial banks in 
Solomon Islands are highly profitable (record  profits were reported in 2008) and appear 
comfortable with the supervisory guidelines.  The global financial crisis has, in fact, ex posed the weaknesses of major banks due to 
inadequate supervision.   
b. There are several consultative mechanisms in place for the CBSI and commercial banks 
to discuss monetary policy and regulatory issues be fore they are implemented.  One such avenue 
is the regular bankers meetings, where issu es affecting the banks are discussed before 
implementation.  There are also working/operati onal committees consisting of CBSI and bank 
officials that discuss operational matters before they are actioned. 
 
Commercial banks’ interests and views are also promoted and pursued with relevant authorities in the country by the Association of  Banks, the umbrella body of the commercial 
banks operating in Solomon Islands.  This group is very active in promoting and defending the 
interests of banks. 
 
Question 27
 
 (iii) Telecommunications 
 
The Secretariat’s Report (Paragraph 90 on page 63) notes Solomon Islands’ intention to renegotiate 
Solomon Telekom Company Ltd’s exclusive licen cing agreement to provide telecommunication 
services.  a. Can Solomon Islands provide an update on the expected timeframe for negotiations?  b. Once the negotiations are finalised, will licen ces be issued to all po tential service providers 
or will the number of operating licences be limited? 
 c. Will new providers be licensed to provide all telecommunications services or only mobile 
services?  
 
Answer
 
 a, b, c. SIG is committed to negotiating a premature end to the Telecommunications License 
that is fully in compliance with do mestic law.  As such, it is not possible for SIG to definitively 
prejudge the outcome of ongoing negotiations. WT/TPR/M/215/Add.1 
Page 24  
 
 Nevertheless, negotiations are already at an adva nced stage, and the Government is hopeful that 
they will be finalised by the end of May 2009.  Following the completion of negotiations, the Government intends to tender for a second mobile telephony license.  The Ministry of Communication and Aviation has prepared a dr aft Telecommunications Bill, with technical 
assistance from the World Bank and financia l support from RAMSI.  Once this draft 
Telecommunications Bill has been passed by Parliament, a Telecommunications Commission 
will be established, which will be able to issue additional licenses, probably in early 2010.  As presently drafted, the Telecommunications Bill would  permit licenses to be issued in relation to 
any telecommunication service.  
Question 28
 
 (v) Air transport and airports  28. Australia notes Solomon Islands is co mmitted to a ‘competitive and open market for 
international and domestic air travel’ (Secret ariat’s Report, paragraph 111 on page 67).   
 a. The Secretariat’s Report (Paragraph 113 on p age 68) notes Solomon Islands has signed, but 
not yet ratified the Pacific Islands Air Services Agreement.  Can Solomon Islands provide an update 
on plans to ratify this agreement?   
b. What steps have been taken to provide for a competitive and open domestic air services 
sector? 
 
Answer
 
 
a. The Government intends to ratify the Paci fic Islands Air Services Agreement (PIASA).  
A Cabinet Paper effecting this ratification ha s been submitted to Cabinet and is currently 
awaiting approval, which would enable the instrument of ratification to be signed and submitted to the Pacific Islands Forum Secret ariat as the depository of the Agreement. 
 b. Firstly, the Civil Aviation Authority, through the Ministry of Communication and 
Aviation, has issued domestic air licenses for the following operators: 
 
• Solomon Airlines 
• Coral Seas Express 
• Pacific Airlink 
• Solomon Airlines Seaplane Ltd 
• Heli-Support Ltd, and 
• Heli-Hub Ltd 
 Applications for domestic air licenses submitte d by Heli Solomons and Helilift Ltd are currently 
being processed by the Government. 
 Secondly, the Government recognises the comp lex challenges involved in liberalising a service 
sector which, at present, provides so many vita l services to outlying co mmunities, which are not 
and will never be commercially viable.  If the Government forced all providers to operate on a 
strictly commercial basis, it is clearly und erstood that most domestic services would be 
withdrawn, and the consequences for the long-te rm development of many rural communities 
would be disastrous.  In order to address this  contradiction, Solomon Islands’ DTIS proposes a 
comprehensive reform approach, incorporating investment in airport infrastructure and a move towards a tender-based subsidy system to  support services on unprofitable routes to  WT/TPR/M/215/Add.1 
 Page 25 
 
 
 outlying communities.  The Government has not yet found a donor partner interested in 
exploring this work programme further . 
 
CANADA 
 
Question 1  
 Report by the Secretariat (WT/TPR/S/215)
 
Part III. Trade Policies and Practices by Measure: (2) Measures Directly Affecting Imports; (viii) Technical regulations, conformity assess ment procedures, and standards; page 31, 
paragraph 54:  
The Secretariat’s report states, “Solomon Islands has limited institutional capacity to adopt and 
enforce technical regulations and conf ormity assessment procedures.  It  did not adopt legislation to 
implement the TBT Agreement, nor has it made any notifications under that Agreement.  The 
preparation and notification to the WTO of an inve ntory of technical regul ations and conformity 
assessment procedures would be a first step to wards increasing transparency for traders and helping 
efforts to enhance consumer protection.” The observations in paragraph 54 of the Secretariat’s 
report are notable first steps towards implementation of the TBT in the Solomon Islands.    Could the Solomon Islands advise/elaborate concern ing its intention to address these observations, 
including the adoption of legislation to implemen t the TBT Agreement, notification pursuant to TBT 
Article 15.2, and establishment of a notification authority and enquiry point?    Answer
 
 
The Government lacks the technical, human  and financial resources to introduce TBT 
legislation and the relevant institutions. However,  the Government will, within the confines of 
its capacity, make every effort to ensure that  the TBT legislation is introduced. Once the 
legislation is in place the relevant institutions (notification authority and enquiry point) will be established and the relevant measures will be notified.  
 
Question 2
 
 
Part III. Trade Policies and Practices by Measure: (2) Measures Directly Affecting Imports; (ix) 
Sanitary and phytosanitary (SPS) measures; page 32, paragraph 62: 
 
Canada applauds efforts by the Solom on Islands to strengthen its in stitutional capacity in the SPS 
area, and notes that the Solomon Islands have established a national enquiry point and national notification authority under the SPS Agreement.  The Secretariat’s report however states that 
“transparency could be further improved, particul arly through the submission of relevant WTO 
notifications” and (in paragraph 64, page 33) states that “the Sol omon Islands have not notified any 
SPS measures.” 
 
What systems/methods are the Solom on Islands putting in place to overcome past challenges with 
compliance to WTO SPS transparency obligations, in particular notification of a draft measure when 
comments can still be taken into account? 
 
Answer
 
 The Government will amend its laws to ensure th at the draft SPS measures are notified within 
stipulated timelines to allow Members to commen t on the measure before it is finalised.  The 
Government is fully committed to transparency and will work with the WTO Secretariat as well WT/TPR/M/215/Add.1 
Page 26  
 
 as Member countries to ensure that all issues pertaining to SPS measures are addressed.  
Technical and financial assistance will be need ed to address to enab le the Government to 
comply with its SPS obligations. 
 
Question 3
 
 
Part III. Trade Policies and Practices by Measure:  (2) Measures Directly Affecting Import; (ix) 
Sanitary and phytosanitary (SPS) measures; page 33, paragraph 66: 
 
Canada notes the report states that “[t]he procedure for the development of SPS measures applied on 
imports is described in the Import Specificatio n Manual of the Solomon Islands Agriculture 
Quarantine Service.” However, “[t]he manual does not provide for public comment or WTO 
notification of draft measures.”   Does the Solomon Islands have plans to amend th e Manual to include WTO notification of draft 
measures?  
Answer
 
 The Government will amend its laws including th e Manual to include notification of draft 
measures.  However, as indicated above, techni cal and financial assistance will be needed to 
address all SPS problems.  
Question 4
 
 Part IV. Trade Policies by Sector; (8) Services;  (iii) Telecommunications; page 63, paragraph 
90:  
The Secretariat Report notes that the Solomon Islands plans to introduce a new legislative framework 
to address problems related to the inadequacy of the statutory framework and institutional capacity to 
supervise the sector.   
Could the Solomon Islands provide Canada with  an update on the timeline and details on the 
anticipated content for this new legislative framework? 
 
Answer
 
 
Although the timeline for implementation of  the new telecommunication framework is 
contingent upon ongoing negotiations with Solomo n Telekom, the Government is hopeful that 
these negotiations will be completed by the end of May 2009, in order that a draft Telecommunications Bill be presented to Parliament in the June 2009 session.  The present draft of the Bill, prepared with  technical assistance from the World Bank, 
establishes a Telecommunications Commission, compet ent to issue licenses to provide all types 
of telecommunications services.  In addition, th e Bill covers subjects such as interconnectivity 
requirements, competition policy, consumer rights, and access to public land for service 
providers.   WT/TPR/M/215/Add.1 
 Page 27 
 
 
 Question 5  
 
Part IV. Trade Policies by Sector: (8) Servi ces; (vi) Professional services; pages 68-69, 
paragraphs 116, 118 and 119: 
 
Given that prior to granting a work permit, th e Commissioner of Labour must determine if an 
applicant is properly qualified, and that the supply of accounting, architectural, and engineering 
services are not regulated, can the Solomon Islands cl arify what criteria are used to determine if 
applicants have proper qualificati ons in those services sectors? 
 
Answer  
 
The Commissioner of Labour’s determination is  based on processes established by the relevant 
professional associations within Solomon Islands. 
 
Question 6  
 
Are there processes that permit recogn ition of foreign-based qualifications as equivalent to domestic 
qualifications? 
 
Answer  
 
At present, no domestic educational institution is competent to issue qualifications in the legal, 
architectural or engineering sectors.  Therefore,  all qualifications are ‘foreign’ and none are 
‘domestic’.  
Professional associations are responsible for setti ng appropriate standards for the recognition of 
foreign qualifications as adequate for supply to the domestic market. 
 
JAPAN 
 
Question 1
 
 The Secretariat Report (WT/TPR/S/215) 
 
IV. TRADE POLICIES BY SECTOR (8) SERVICES (i) Introduction 
 
Page 59, paragraph 68  The Secretariat report points out that Solomon Islands had not tabled a services offer in the context of 
the Doha negotiations. 
 Please explain the reason (incl uding technical reason) why. 
 Answer
 
 
Solomon Islands has no immediate plans to expa nd its services commitments.  The Government 
needs to introduce the relevant services regulato ry regime before making any commitments on 
services.   Currently, the Government lacks the tec hnical capacity to undertake necessary 
consultations with various stakeholders, to in troduce the relevant regulatory and institutional 
infrastructure, and to draft the appropriate commitments. WT/TPR/M/215/Add.1 
Page 28  
 
 However, Solomon Islands will continue partic ipating in the DDA negotiations in accordance 
with the Modalities for the Special Treatment for least-developed country Members in the 
negotiations on trade in services. The modaliti es provide more flexibilities to LDCs to open 
fewer sectors, liberalize fewer types of transa ctions, and progressively extend market access in 
line with their development situation, trade and financial needs. 
 
Question 2
 
 
(ii) Maritime transport and ports 
 
(Page 64-65, paragraph 99, 101) 
 
Japan notes that the port of Honiara, which is the main port for international trade and also focal 
point for domestic maritime transport, is chronicall y suffering from berth congestion, mainly due to 
only one berth for international trade in the port of Honiara. On the other hand, the Government of 
Solomon Islands implements the National Transport Plan, accordi ng to the Secretariat report.  
 In this regards, Japan would like the Government  of Solomon Islands to explain its on-going 
measures and future plans aimed at easing the af orementioned berth congestion in the port of 
Honiara.  
Answer
 
 
Considering its current fiscal position, the go vernment has no capacity to address the 
infrastructural inadequacy of the main port in Honiara.  However, the Government would 
welcome assistance from donor part ners interested in investing in improved port facilities, both 
in Honiara and beyond. 
 
EUROPEAN COMMUNITIES 
 
III. TRADE PRACTICES AND PRACTICES BY MEASURE (2) MEASURES AFFECTING IMPORTS (v) Other charges  WTO Secretariat’s report, page 29, para 44-48.  
 
According to paragraph 45, there is apparently discr imination in treatment as far as the "sale value" is 
concerned between importers who ha ve registered with the Inland Revenue Division of the Ministry 
of Finance and Treasury and impor ters who have not done so.  
 
Question 1
 
 
Could Solomon Islands outline the reas ons for the measures in questions? 
 
Answer  
 
The Government will endeavour to provide a response to this question at a later time. 
 
Question 2  
 
On the basis of which criteria economic operators are registered or are p revented from registering? 
  WT/TPR/M/215/Add.1 
 Page 29 
 
 
 Answer  
 
The Government will endeavour to provide a response to this question at a later time. 
 
Question 3  
 
Is the good tax levied at import? 
 
Answer  
 
The Government will endeavour to provide a response to this question at a later time. 
 
Question 4  
 
Could Solomon Islands please provide further information on the determination of the sale value in 
both cases?  
Answer
 
 The Government will endeavour to provide a response to this question at a later time. 
 
Question 5
 
 
In paragraph 48 it is stated that  "Imports are not subject to excise duties. These are levied on 
domestically produced beer, tobacco, and cigarettes at SI$4 per litre for beer and SI$40 per kg for 
tobacco."  
 
Could Solomon Islands confirm it?  
 
Answer  
 
The Government will endeavour to provide a response to this question at a later time. 
 
(viii) Standards and other technical requirements 
 WTO Secretariat's Report, page 31, para. 54-55 
 
The report notes that "Solomon Islands has limite d institutional capacity to adopt and enforce 
technical regulations and conformity assessment procedures.  It did not adopt legislation to 
implement the TBT Agreement, nor has it made any notifications under that Agreement.  The 
preparation and notification to the WTO of an inve ntory of technical regul ations and conformity 
assessment procedures would be a first step to wards increasing transparency for traders and helping 
efforts to enhance consumer protection". Furthermo re, it is stated that Solomon Islands "has not 
submitted any notification on the implementation of  the TBT Agreement.  Nor has it designated an 
entity responsible for answering enquiries about technical regulations, conformity assessment 
procedures, and standards" 
 
Question 6
 
 
Given that establishing the necessary legal and ins titutional infrastructure to ensure the application 
of the TBT Agreement is one of the primary ob ligations stemming from WTO membership, does 
Solomon Islands plan to adopt a nd enforce legislation implementing the TBT Agreement, as well as 
establish a TBT Enquiry Point in the foreseeable future?  WT/TPR/M/215/Add.1 
Page 30  
 
 Answer
 
 
The Government lacks the technical, human  and financial resources to introduce TBT 
legislation and the relevant institutions. However,  the Government will, within the confines of 
its capacity, make every effort to ensure that the TBT legislation is introduced including the 
establishment of the notification authority and en quiry point as well as the notification of the 
relevant measures.  
 
Question 7  
 
Furthermore, does Solomon Islands  plan to 'prepare and notify to the WTO an inventory of technical 
regulations and conformity assessment procedures'? If yes, what is the timeline for each of these 
steps?   Answer
 
 
The Government is fully committed to implemen ting its obligations under the TBT Agreement. 
However, it lacks necessary technical and financ ial assistance to do so.  The Government will 
make every effort to prepare and notify an in ventory of technical regulations and conformity 
assessment procedures no later than 2010.  This  will depend on the technical, financial and 
administrative capacity of the Government. 
 
WTO Secretariat's Report, page 32, para. 58-59 
 
The report indicates that to the extent that technical regulations and conformity assessment 
procedures are embodied in subsidiary legislation, the administrative procedure for their adoption is 
governed by the Interpretation and General Provisions  Act.  Subsidiary legislation must be published 
in the Solomon Islands Gazette, and enters into fo rce on the date of publication, unless another date is 
specified in the legislation itself. In addition, it is  stated that" Solomon Islands does not maintain an 
inventory of technical regulations or conformity assessment procedures in force.  The Secretariat has 
no information on the number of applicable technical regulations or standards, nor how these may be 
enforced".  
 
Question 8  
 
Article 2.4 of the TBT Agreement stipulates th at, where technical regulations are required and 
relevant international standards exist, WTO Membe rs have the obligation to use those standards, or 
the relevant parts of them, as a basis for thei r technical regulations except when these standards 
would be an ineffective means for fulfilling the legitimate objective pursued.   Answer
 
 The Government is fully committed to implem enting its obligations under the TBT Agreement 
especially provisions relating to Article 2.4.  Howe ver, we lack technical and financial assistance 
to do so.  The Government will ma ke every effort to ensure that it complies with its obligations 
under the TBT Agreement.  
 
Question 9
 
 
What is the extent to which Solomon Islands uses international standards as a basis for technical 
regulations and conformity  assessment procedures?  WT/TPR/M/215/Add.1 
 Page 31 
 
 
 Answer  
 Solomon Islands does not currently have the ca pacity to apply technical regulations or 
conformity assessment procedures.  There is an  urgent need for support for technical and 
financial assistance to develop the capacity and acquire the equipment necessary to apply 
standards and participate in intern ational standard-setting bodies. 
 
The Secretariat report states that subsidiary legislat ion enters into force on the date of publication. 
However, article 2.12 of the TBT Agreement indicat es that, except in urgent circumstances, Members 
shall allow a reasonable interval between the publicati on of technical regulations and their entry into 
force, in order to allow time for producers in  exporting Members to adapt their products or 
production processes to the requirements.  
 
Question 10
 
 
How do Solomon Islands ensure that, when tec hnical regulations and conformity assessment 
procedures are embodied in subsidiary legislation, reasonable time is provided for exporters between 
the publication of technical regulations and entr y into force, in order to adapt to the new 
requirements? 
 
Answer  
 
The Government will amend its laws to ensure th at reasonable time is provided for exporters to 
adjust to new requirements.  WTO Secretariat's Report, page 32, para. 60 
 
The report notes that "there are no competent agenc ies to assess conformity with Solomon Islands 
technical regulations.  The National Metrology and Testing Laboratory was destroyed during the period of civil strife, and the authorities are seeking funds to rebuild it." 
 
Question 11
 
 
In the absence of conformity assessment bodies, how is compliance with a technical regulation 
assessed where third party testing is required? Do Solomon Islands authorities accept test results 
from laboratories in the country of origin of the exporter? Where international standards are in place for a certain sector, is compliance with these standards  considered as sufficient for allowing products 
access on the market?   
Answer
 
 
Compliance with technical regulations is  not currently required in practice. 
 
(ix) Sanitary and phytosanitary (SPS) measures 
 
WTO Secretariat's Report, page 15, para. 35, and page 32, paragraph 62.  
 
The report notes that since the establishment of the WTO, " Solomon Islands has made only three 
notifications, including joint notifications:  under the Agreement on Sanitary and Phytosanitary 
Measures (SPS), the authorities notified Solomon Isl ands' enquiry point". Furthermore, it is stated 
that during the period under review "there have b een some efforts to strengthen the limited 
institutional capacity of Solomon Islands in the SP S area, for example through the development of 
animal and plant import specifications, and the est ablishment of facilities to conduct food tests.  WT/TPR/M/215/Add.1 
Page 32  
 
 However, transparency could be further improved , particularly through the submission of relevant 
WTO notifications."  According to IPPC, article 7 on import requirements  NPPOs shall, immediately upon their adoption, 
publish and transmit phytosanitary requirements, restrictions and prohibitions to any contracting 
party or parties that they believe may be directly a ffected by such measures. According to ISPM 19 a 
list of regulated pests should be published.  Question 12
 
 
With regard to plant quarantine regulation, could th e Salomon Islands inform, if a publication of the 
phytosanitary regulation, including a list of regulated pests is planned?  Answer
 
 
The publication of a list of regulated pests wi ll shortly be completed through a regional 
programme coordinated by SPC.  Officials from  Solomon Islands Government have actively 
supported the development of this programme.  WTO Secretariat's Report, page 33, para. 66 
 
The report indicates that "the procedure for the development of SPS measur es applied on imports is 
described in the Import Specification Manual of th e Solomon Islands Agriculture Quarantine Service.  
Although the manual is not public, the authorities provid ed a copy to the Secretariat in the context of 
this Review.  Measures are developed by the Chie f Plant Protection Officer or the Chief Veterinary 
Officer of the Agriculture Quarantine Service on th e request of importers.  Measures must be 
prepared 'in accordance with a ccepted international guidelines'.  The manual does not provide for 
public comment or WTO notification of draft measures.   SPS measures are described in the schedules 
to the manual.  There is no public inventory of SPS measures, or of products subject to such 
measures."  According to IPPC, article 7 on import requirements  NPPOs shall, immediately upon their adoption, 
publish and transmit phytosanitary requirements, restrictions and prohibitions to any contracting 
party or parties that they believe may be directly a ffected by such measures. According to ISPM 19 a 
list of regulated pests should be published.  Question 13
 
 
With regard to the import manual, could the Salo mon Islands inform, if import requirements for 
plants and plant products, including a list  of regulated pests will be published? 
 
Answer  
 
The import manual, including a list of regulated pests will shortly be published through a 
regional programme coordinated by SPC.  Offi cials from Solomon Islands government have 
actively supported the development of this programme.  WTO Secretariat's Report, page 33, para. 67 
 
The report notes that risk assessments "are conduc ted following any request to import a product for 
which no SPS measures are specified in the manual , or to renew a licence.  According to the 
authorities, they conduct around 100 risk assessments p er year.  There are no statutory provisions 
regarding the maximum duration of risk assessments; the authorities indicate that these take a  WT/TPR/M/215/Add.1 
 Page 33 
 
 
 minimum of three months.  The cost of risk asses sment is borne by the Agricultural Quarantine 
Service."  According to article 4 in The International Pl ant Protection Convention, approved by the FAO 
Conference at its 29th Session - November 1997 (IPPC ), the national plant protection organization 
(NPPO) has some specified main responsibilities, in cluding the conduct of pest risk analyses (PRA), 
article 4, point 2 f. Pest risk analyses should be carried out according to the international standards of phytosanitary measures (ISPM) 2, 11, 20 and 21.   According to ISPM 20, the administrative fr amework of the PRA process should be clearly 
documented, if possible with a time frame for the completion of individual PRAs and with clear 
guidance on prioritization.   According to IPPC article 7, 2c NPPOs shall, on request, make available to any contracting party the 
rationale for phytosanitary requirements, restrictions and prohibitions. 
 
Question 14
 
 
With regard to Import Risk Analysis, could The Salomon Islands inform about the average timeframe 
for the completion of PRAs? 
 
Answer  
 The government conducts risk assessments in accordance with international standards and 
PRAs are normally concluded with in a reasonable period of time. 
 
Question 15
 
 
Could Solomon Islands confirm if the rationale for phytosanitary requirements, restrictions and 
prohibitions are made available? 
 
Answer  
 
An explanation of the rationale for phytosanitary  requirements is provided upon request by the 
Ministry of Agriculture and Livestock.  
(3) MEASURES DIRECTLY AFFETING EXPORTS 
(II) EXPORT TAXES  
WTO Secretariat’s report, page 34, para. 76-78. 
 
Question 16
 
 
What does the Government foresee in terms of reforms  of their fiscal policy (export taxes) given the 
progressive decline of the logging industry (depleti on of natural forest and decline in demand)? Does 
the Government foresee any adaptation of its Medium Term Fiscal Strategy (MTFS) to cater for the 
new development around the logging industry? 
 
Answer  
 
The Government is currently updating its Medium  Term Fiscal Strategy to reflect changes in 
Solomon Islands and the global economy.  However,  it should be noted that the Medium Term 
Fiscal Strategy has always anticipated a sharp downturn in logging exports beginning in 2009. WT/TPR/M/215/Add.1 
Page 34  
 
 The primary change is the magnitude of this shi ft and that it is being driven by demand factors 
as well as supply factors. 
 
(4) MEASURES AFFECTING PRODUCTION AND TRADE 
(v) Government procurement 
 
WTO Secretariat’s report, page 44, para. 124. 
 
Several audits by the Office of the Auditor Gen eral have revealed "widespread non compliance" with 
legislation and guidelines on government procurement.  
 
Question 17
 
 
What does the Government intend to do to ensure a better compliance with pr ocurement legislation? 
 
Answer  
 The Government is currently examining all me asures relating to government procurement to 
ensure that procurement practices comply with  internationally recognised standards. The 
Government has also established a Ministry Te nder Committee which deals with tenders larger 
than SB$50,000 and any amount larger than SB$100 ,000 goes to the Central Tender Board.  
Tenders below SB$50,000 are handl ed by permanent secretaries. 
 
Question 18
 
 
What sort of problems in compliance did the Office of the Auditor General detect? 
 
Answer  
 The Office of the Auditor General encountered problems associated with the lack of an 
accountable or transparent tend er process, and a lack of adequa te documentation to support 
payments. 
 
WTO Secretariat’s report, page 44, para. 128.  
 
The Financial Instructions of the Minister of Fi nance and Treasury are not publicly available. 
Solomon Islands does not maintain a system for the dissemination of procurement information, 
including advance information on procurement opportunities.   
Question 19
 
 
Does the Government intend to improve transparency in public procurement, both with regard to 
existing public procurement rules and with regard to procurement opportunities? 
 
Answer  
 The Government has already take n measures to improve transparency in public procurement 
and will continue to do so.  These measures  include a revision of all of the Financial 
Instructions, including a chapter pertaining to supply chain management and tendering 
processes.  Education in relation to the contents  and requirements of the Financial Instructions, 
including procurement and tendering procedures (and advertising requirements) is also being 
conducted with other Ministries. 
  WT/TPR/M/215/Add.1 
 Page 35 
 
 
 Question 20  
 
Could Solomon Islands confirm that it is possible for tender specifications to be based on brands? 
 Answer
 
 
The proposed, revised, Financial Instructions exp licitly prohibit the purchase of goods solely on 
preferred brands.  WTO Secretariat’s report, page 45, para. 132 
 
The Financial Instructions do not preclude discrimi nation between foreign and  domestic products or 
suppliers, or against foreign-owned suppliers.  Neither do they prohibit offsets.  There are no 
provisions that grant foreign pr oducts or suppliers less than nat ional treatment. (para 132) 
 
Question 21
 
 
Does the Government acknowledge any need for ac tion with regard to ensuring equal procurement 
opportunities for national and foreign bidders? 
 
Answer  
 
The Government does not acknowledge any need for action in this area.  
 
WTO Secretariat’s report, page 45, para. 133 
 
Question 22  
 
Does the Solomon Islands intend to set a formal procedure for bidder complaints? 
 
Answer  
 
This has been identified as an area which requires further strengthening.  
IV. TRADE POLICIES BY SECTOR 
(4) SERVICES Telecommunications sevices 
 
Solomon Islands’ report, page 10, para 28. 
 
In its report, the Solomon Islands stated that the "Government is currently negotiating a premature 
end to the monopoly license granted to the single incu mbent telecom provider, with a view to creating 
a competitive environment, which is expect to reduce process significantly". 
 
Question 23
 
 
Could the Salomon Islands provide detailed info rmation on the current liberalisation process in the 
telecommunication sector, especially regarding the de adlines for the end of the monopoly licences as 
well as an indication on the sub-sectors that w ill be opened to forei gn telecom operators? 
 WT/TPR/M/215/Add.1 
Page 36  
 
 Answer
 
 The currently prevailing monopoly license is due to  expire in 2018.  As a signatory of a legally 
binding agreement, the Government has no authority to set any other ‘deadline’.  
The Government’s intention is not to exclude an y subsector from foreign telecom providers, but 
to enable a new Telecommunications Commission to issue licenses for operation in any sector. 
 
KOREA 
 
Question 1
 
 
Secretariat Report, page 11, paragraph 12 
 
The Secretariat report states that “Solomon Isla nds continue to lack a formal trade policy 
framework.” In light of the importance of fo reign trade to the economy of Solomon Islands 
(merchandise trade accounting for 70% of GDP, 2006), this seems out of the ordinary.  
 (1) Could the Solomon Islands confirm wheth er the Secretariat’s statement is accurate? 
 (2) If not, could the Solomon Islands explain its trade policy framework? 
 
Answer
 
 Solomon Islands confirms that the referenced statement is accurate. 
 
Question 2
 
 
Secretariat Report, page 12~13, paragraph 19~24 
Secretariat Report, page 38 paragraph 92~98 
 
According to the Secretariat report in pages 12~13 , there have been changes in the FDI regime. In 
this regard, Korea would appreciate answers to the following: 
 (1) Apparently the approval system has been ab olished and a new registration system has been 
introduced. Is this understanding accurate?  
(2) Could Solomon Islands elaborate on the numb er of registration applications received since 
the registration system was introduced? Amongst th e number of applications, how many certificates 
of registration were issued and how many refused?   (3) (Follow up to Q2-2) For those refused ca ses, could the Solomon Islands elaborate on the 
reason for refusal? 
 
(4) (Follow up to Q2-2) How many of the certific ates issued by the Registrar were later 
cancelled? What were the main reasons for these cancellations?    (5) With regards to para 24, could the Solom on Islands elaborate on what’s been the most 
important decision(s) taken by the “Investment Facilitation Committee”?  
Page 38, para 92 of the Secretariat’s report states that “the processes for obtaining a business license 
from provinces and incorporating a business are complex and lengthy.”   WT/TPR/M/215/Add.1 
 Page 37 
 
 
 (6) What is the view of the Solomon Islands on the comments by the Secretariat? 
 (7) Para 93 suggests that a foreign investor would need to register as a foreign investor (with the 
Central government), and also
 obtain a business license (from the provincial government). Is this 
understanding correct? 
 
(8) Para 92 states that ‘efforts to review the incorporation process and the business registration 
system’ is on-going. What are the findings thus far?  (9) Para 95 describes a ‘typical’ process/timelin e to obtain a business licen se.  Is the example 
accurate? If so, why is so much tim e necessary to process a license request? 
 (10) What is the view of the Solomon Islands with respect to the assessment of the ADB on the 
company registration and business licensing process? 
 
Answer
 
 
2-1. The original approval system for foreign investment has indeed been replaced by a new 
registration system as a result of the Foreign Investment Act 2005.  2-2. Since the new system was established, 554 a pplications have been received.  Only 3 have 
been rejected.
7 
 2-3. All refusals were due to the application referri ng to an activity that was included in the 
reserved list.  
2-4. Since the new system was established, 4 certificates have been cancelled.  All 
cancellations were done at the request of the certificate-holder.  2-5. The most important decisions taken by  the Investment Facilitation Committee have 
been to review the decision of the Registrar upon appeal by applicants that were refused a 
certificate. 
 
2-6. The statement is historically accurate , but the new Company Act passed in March 2009 
will significantly shorten the process.  2-7. This is correct.  At present, both the cen tral and provincial government has jurisdiction 
over the regulation of business.  The Government is currently considering legislative options to 
the process  entirely under the jurisdiction of central gov ernment as a means to further facilitate 
foreign investment.  2-8. The review is now complete, and as a result the Companies Act was passed in March 
2009.  The Act will come into effect within the next few months. 
 
2-9. The example is accurate.  At present, a business license issued by a provincial government typically requires an executive decisi on.  Calling a meeting of provincial members 
is an expensive process that is normally und ertaken only three or four times per year. 
 
2-10. Much of the assessment of the ADB has been used as the basis of action and further 
review by Government.  
                                                     
 
7 All data quoted in response to question 2 was current as of 29/4/2009. WT/TPR/M/215/Add.1 
Page 38  
 
 Question 3
 
 
Secretariat Report, page 13, paragraph 23, 25 
 
Paragraph 23 lists the 14 areas in which in vestment activity is reserved for nationals.  
 
(1) Amongst the 14 areas, there are a number of activities which are qualified by “for sale 
exclusively in the domestic market.” Would it be co rrect to assume that if the activity is not for 
exclusive sale in the domestic ma rket (i.e., for sale both in domestic and foreign markets, or for sale 
in foreign markets exclusively), that particular activ ity is permissible for foreigners in the Solomon 
Islands? 
 (2) Is the tourism industry an industry the Solomon  Islands would like to develop? If so, what is 
the rationale to limit foreign investment in ‘restaurant s, cafes, and other eating and drinking business 
other than specialty business’? 
 
(3) In regards to the limitations on ‘restaurant s, cafes, and other eating and drinking business 
other than specialty business
’, what it meant by ‘specialty business’? 
 In regards to para 25,   
(4) Could the Solomon Islands elaborate on the timeframe and specific action plan it has 
formulated to achieve the ‘completing th e land recording and registration process’? 
 Answer
 
 
3-1. Cultivation for both foreign and domestic markets is open to foreigners.  At present, the 
reserved activity is interpreted to mean farming on less than 5 hectares of land, for which only 
manual tools are used.  3-2. The Government regards tourism as a prio rity sector for development.  It should be 
noted that the restriction on restaurants, cafes and other eating and drinking businesses applies 
only to establishments covering less than 25m
2.  The only service suppliers able to operate in 
such a small area are fast-food stalls.  The Mini stry of Commerce understands that this type of 
establishment typically caters for local clientel e, whereas tourists tend to frequent larger 
establishments, and so in practice the restri ction does not impact the tourism sector. 
 
3-3. Specialty business are restaurant services th at Solomon Islanders are unlikely to be able 
to supply, such as Korean food.  3-4. The process of recording and registering land has been ongoing since independence and 
is likely to continue for at least the next several decades.  It is complicat ed by many factors.  
Almost all land is held communally, and in many cases different groups have the right to use the 
same piece of land for different purposes.  Moreover,  the capacity of the legal system has long 
been overwhelmed by the volume of work require d to settle the disputes necessary to conclude 
land registration.  A Bill will be presented to Parliament in 2009 to further facilitate the registration of customary 
land by adopting aspects of traditional know ledge and systems into the determination of 
customary ownership.  A customary land reform unit has been established within the Department of Lands,  whose focus is on raising awareness of the benefits of registering 
customary land in the provinces.  Aside from these incremental improvements, Solomon  WT/TPR/M/215/Add.1 
 Page 39 
 
 
 Islands’ DTIS makes no further recommendations for action, despite considerable discussion of 
the problem of land tenure and its effects on trade. 
 
Question 4  
 
Secretariat Report, page 13~14, paragraph 26~30 
 
(1) Are there plans to conclude investment promotion/protection treaties? 
 (2) In the absence of investment treaties, what assurances/protection is provided to foreign 
investors and their investments? 
 (3) Please provide detailed information on the compensation stipulations in the “Foreign 
Investment Act of 2005?” Does the Solomon Islands  assure ‘fair market valu e’ in compensation? 
How is the need for ‘compulsory acquisition’ determined? 
 
(4) In regards to para 30, has the government of the Solomon Islands ever been a party to a 
dispute referred to ICSID? If yes, could the Solomon Islands elaborate on the case(s)?  Answer
 
 
4-1. No.  4-2. The rationale behind the introduction of the Foreign Investment Act was to guarantee 
investors the same rights as nationals in al most all investment activities.  The Foreign 
Investment Act includes reference to both th e Convention on the Settlement of Investment 
Disputes Between States and Nationals of Other States (ratified by Solomon Islands in 1981) 
and the APEC non-binding investment principles.  4-3. In the case of compulsory acquisition, th e High Court has competence to determine the 
amount and reasonableness of the compensation to be paid to  the person whose property has 
been acquired.  No further direction is given to the High Court as to the means used to 
determine the amount of compensation.  The Ac t does not make any provision for compulsory 
acquisition of an investor’s property; the clau se providing for compensation would appear to 
provide no more than a caveat to protect invest ors from any unanticipated consequence of other 
provisions of the Act.  
4-4. No.  
Question 5
 
 
Secretariat Report, page 29, paragraph 44~48 
 
(1) Secretariat’s report states that ‘application of internal taxes is both discriminatory and 
inconsistent.’ What is the view of the Solomon Islands on this statement? 
 (2) (Follow-up to Q5-1) Could the Solomon Islands explain its policy rationale?  
(3) In regards to para 46, what is the defin ition of “small businesses” as used by the tax 
authorities in determining who would be exempt from the ‘goods tax?’ 
 WT/TPR/M/215/Add.1 
Page 40  
 
 Answer
 
 
5-1. The Government will take the necessary me asures to ensure that internal taxes comply 
with WTO rules.  
5-2. Please see the answer to qu estion 8 in response to Australia. 
 5-3. The tax authorities regard a manufacturi ng business whose annual revenue is not in 
excess of SB$5,000 in the opinion of the Commissioner as a ‘small business’.  
THE SEPARATE CUSTOMS TERRITORY OF TAIWAN , PENGHU,  
KINMEN AND MASTU 
 
A. WTO Secretariat Report (WT/TPR/S/215)
 
 
I. ECONOMIC ENVIRONMENT (1) OVERVIEW 
(page 1, paragraph 1) 
 We are pleased to note the success of Solomon Isla nds in resuming economic growth from 2003, with 
particularly brisk performance in 2007 and 2008,  reflecting strong domestic demand, government 
expenditure and a favourable international environm ent for its main exports . However, with the 
imminent decline in activity in the important logging sector, Solomon Islands now appears to be 
facing major economic challenges in the medium term.  
Question 1
 
 
In light of the suggestion in the Report that the pace of trade and other policy reforms needs to be 
accelerated in order to make better use of its co mparative advantage in mining, fisheries and other 
activities, could Solomon Islands please indicate w hat reforms may be scheduled for the short to 
medium term?  
Answer
 
 
Given the global economic downturn it is difficult for any country to accelerate its exports.  This 
is particularly the case for a country such as Solomon Islands which has a very limited export 
sector.  Solomon Islands will continue to pursue ref orms to make it easier to do business such as 
the implementation of the Secured Transa ctions Act and company registries and the 
development of infrastructure to facilitat e trade, such as roads and wharves. 
 
II. TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES (3) TRADE POLICY FORMULATION AND IMPLEMENTATION (page 12, paragraph 15) 
 
As indicated in the Report, the Medium Term Fi scal Strategy and the Medium Term Development 
Strategy (MTDS) outline the Government ’s development from 2008 to 2010.  
 
Question 2
 
 
Could the Solomon Islands government please elaborate further on its development plans and 
strategies?  
  WT/TPR/M/215/Add.1 
 Page 41 
 
 
 Answer  
 Both the MTDS and MTFS are public document s and copies shall be provided upon request. 
 
B. Report by the Government of Solomon Islands (WT/TPR/G/215)
 
 
1. ECONOMIC ENVIRONMENT, ECONOMIC CHALLENGES (page 7, paragraph 13)  
 
It is noted that a number of business reforms were enacted in 2008, with a view to increasing the ease 
of doing business and attracting further foreign investment.  
 
Question 3
 
 It would be appreciated if Solomon Islands could pr ovide us with further details of these various 
business reforms.  
 
Answer
 
 
The following reforms were carried out recently, are currently underway or are planned for the 
near future: 
 
• the Insolvency and Receivership Act, 2008; 
• the Companies Act, 2009, passed by parliament on 18th March, and supported by the 
 ADB; 
• the Foreign Investment Act, 2005, supported  by the World Bank through the Foreign 
 Investment Advisory Service; 
• Solomon Islands will commence a project on regulatory simplification and investment 
 policy and promotion in May 2009. 
 Full details of planned reforms are contained within the Medium Term Fiscal Strategy and 
Medium Term Development Strategy. 
 
INDIA 
 
QUESTION 1
 
 
Para 1 (1.1) of Solomon Islands Report men tions, “Although economic performance has recently 
improved, Solomon Islands still remain reliant on a narrow commodity base and is vulnerable to 
world conditions.  
What step the Government of Solomon Islands proposes to take to further improve economic 
performance in the context of the on going global financial and economic crises? 
 
ANSWER
 
 Given the global economic downturn it is diffi cult for any country to improve its economic 
performance.  This is particularly the case for a country such as Solomon Islands which has an 
undiversified economic base, particularly in term s of export industry.  Solomon Islands will 
continue to pursue reforms to make it easier to  do business such as the implementation of the 
Secured Transactions Act and company registrie s and the development of infrastructure to 
facilitate trade, such as roads and wharves. WT/TPR/M/215/Add.1 
Page 42  
 
 QUESTION 2
 
 Para 1 (1.1)(i) of the Government Report menti ons that growth remains heavily dependent on the 
logging industry which is expected to decline sh arply in the next two years due to the limited 
remaining sources of supplies. 
 
India will appreciate to receive the response of th e Government of Solomon Islands on the initiatives 
it proposes to take to diversify its economy to reduce dependence on the logging industry. 
 
ANSWER
 
 
The Government will take the following steps to  encourage the growth of a stronger and more 
diversified private sector in Solomon Islands:  
• Implementation of the new Secured Transaction Act, 2008 
• Implementation of the new Companies Act 2009 and Companies (Insolvency and 
 Receivership) Act 2009. 
• Establishment of a new Companies Registry, 2009 
• Establishment of a new Secured Transaction Registry, 2009 
• Introduction of a new Cooperate Trustees Law, 2009–2010 
• Review and reform of business registration and licenses regime, 2009–2010 
• Review and reform of enforcing contracts, 2009–2010 
• Review and reform of Investment Policy, Law and Promotion, 2009–2010 
• Review and reform of property registration 
• Improving the performance of key SOEs pr oviding services like water, energy and air 
 services. 
 The Government will also support development in  mining as well as services, in particular 
tourism and value addition in agricultural products. 
 
QUESTION 3
 
 Para 2(1.2) of the Solomon Islands Government Report states that it is expected that Government revenue will fall in the future, potentially requiri ng a retrenchment on the part of the Government. 
 
What measures the Government proposes to take a nd implement to arrest the fall in Government 
revenue in the future and to gainfully employ forecast retrenchment? 
 
ANSWER
 
 
The Solomon Islands Government has develope d a strategy for managing the economy which 
will help to ensure that the Government cont inues to meet its commitments to delivering 
services to Solomon Islanders.  To protect the Budget and the economy at a difficult time, when revenues are being cut by slowing exports and lower commodity prices, the Government will manage expenditures by 
placing a 10 per cent reservation on 2009 Budg et reservations.  The Government will also 
prevent payroll expenses from expanding by li miting recruitment to replacing people in 
previously filled positions.  Projects to be  funded under the development Budget will be 
prioritized to reduce overall spending.  The G overnment will also look to implement new 
revenue measures including an increase in  excise duty on alcohol and tobacco. 
  WT/TPR/M/215/Add.1 
 Page 43 
 
 
 QUESTION 4  
 Para 28 of Solomon Islands Report – The Government is currently negotiating a premature end to the 
monopoly license granted to the single incumbent te lecom provider, with a view to creating a 
competitive environment, which is exp ected to reduce price significantly. 
What is the current status of these negotiations?  
ANSWER
 
 Details of ongoing negotiations with Solomo n Telekom will remain confidential until a final 
agreement has been reached. 
 Nevertheless, negotiations are currently progressi ng productively, and the Government hopes 
that a successful conclusion can be reached within the next few months, enabling the draft Telecommunications Bill prepared with the assi stance of the World Bank to be passed and an 
additional telecommunications provider to be licensed before the end of the year. 
 
QUESTION 5
 
 Para 5 (18) – Summary Observations of the Report by  the Secretariat mentions, “To open a business 
in a Solomon Islands, it is necessary to register, and to obtain a licence from the relevant provincial 
authority; the process is complex and lengthy, and has become a major obs tacle to entering the 
formal economy.  What steps have been taken by the Government of Solomon Islands  to make the process business 
friendly? 
 
ANSWER
 
 The following reforms were carried out recently, are currently underway or are planned for the 
near future: 
 
• the Insolvency and Receivership Act, 2008; 
• the Companies Act, 2009, passed by Parliament on 18
th March, and supported by the 
 Asian Development Bank; 
• the Foreign Investment Act, 2005, supported  by the World Bank through the Foreign 
 Investment Advisory Service; 
• Solomon Islands will commence a project on regulatory simplification and investment 
 policy and promotion in May 2009. 
•  
Full details of planned reforms are contained within the Medium Term Fiscal Strategy and 
Medium Term Development Strategy. 
 
NIGERIA 
 
QUESTION 1  
 
In the Secretariat Report (WT/TPR/S/215), it is note d that Solomon Islands does not maintain non-
preferential rules of origin.  In this regard, my de legation would like to know which rules of origin 
apply under the MFN. 
 WT/TPR/M/215/Add.1 
Page 44  
 
 ANSWER
 
 Solomon Islands’ tariff structure does not di scriminate between WTO Members and non-WTO 
Members.  Solomon Islands does not, therefore,  require WTO Members to satisfy any rules of 
origin in order to qualify for its MFN tariff.  So lomon Islands only applies preferential rules of 
origin in the context of preferential trading arrangements notified to the WTO under the 
Enabling Clause.  
KOREA 
 
Afforestation  
QUESTION 1
 
 
Could Solomon Islands explain its policy towards afforestation? 
 
ANSWER  
 
Existing policy on afforestation and reforestati on, drafted in 1968, is outdated and requires 
review.  It does not meet the current requirements of industry, rural communities or the environment.  The Government is currently colla borating with donor partners to design new 
reforestation projects.  
QUESTION 2
 
 Could Solomon Islands reveal whether afforesta tion is a condition of logging licenses? 
 
ANSWER
 
 Afforestation or reforestation is not necessarily a compulsory condition of a logging license.  
Resource owners are considered to have the ri ght to negotiate such conditions for logging 
contracts as are in the interests of their comm unity and land holdings.  If resource owners do 
not want afforestation or reforestation to be includ ed as a condition of a logging contract, then 
the Government will issue a logging license without such a condition.  QUESTION 3
 
 
If so, what are the relevant requirements? 
 
ANSWER  
 Not applicable.  
QUESTION 4
 
 
If so, are there mechanisms in place to confir m that afforestation requirements are met? 
 
ANSWER  
 
Not applicable. 
  WT/TPR/M/215/Add.1 
 Page 45 
 
 
 QUESTION 5  
 
Are there any plans within the Government to intr oduce incentive measures such as tax breaks to 
induce afforestation by logging companies? 
 
ANSWER  
 Government has no current plans to introduce furt her incentive measures such as tax breaks to 
encourage afforestation or reforestation by logg ing companies.  However, the Government 
currently provides import duty exemptions on all materials and equipment required for 
reforestation activities.  
Fisheries, Tourism and Aviation  
 
QUESTION 6
 
 
What are Solomon Islands’ plans to develop an d nurture its fisheries and tourism industries? 
 
ANSWER  
 
The Tourism sector is seen by the Government as one of the leading economic sector to offset 
the decline in logging and maintain the momentum for economic growth. 
 Our sectoral objective is to improve tourisms contribution to the national economy and rural 
development by increasing tourism based inco me and other economic and social benefits 
through an increased number of international vi sitor arrivals and increased rates of visitor 
spending. 
A number of strategies are currently being implem ented to achieve these sectoral objectives. 
They assume parallel and timely developmen t of supporting infrastructure in aviation, 
communication and other sectors. These st rategies include the following areas; 
 1. Product Development 
 
This strategy aims to enhance a range of touris m products of improved quality, to increase the 
number and value of tourist visi ts. Drawn from the findings of the recent International Visitor 
Survey (IVS) which emphasised that tourists a re not only concerned wi th the accommodation 
but also require activities and attractions to visit the country, stay longer and spend more, the 
Government is focusing on the development of a wide range of tourism products mainly based 
on the natural and cultural resources of the country.  2. Skills Development   The second strategy aims to enhance human resource development for tourism. This consists of 
three related activities. First, a national awa reness programme so that people understand the 
potential of tourism for employment and invest ment and have a realistic understanding of the 
opportunities and the requirements to meet and ex ploit them in a sustainable manner. Second, a 
programme of practical, on-site industry traini ng to improve hospitality and tourism service 
skills of people already employed in the industr y. Third, a specialist Tourism and Hospitality 
School has been established at the Solomon So lomon Islands College of Higher Education to 
increase the pool of skilled people for all aspect s of tourism and hospitality services, equipping 
Solomon Islanders with the capacity to secure formal employments in the sector. 
 WT/TPR/M/215/Add.1 
Page 46  
 
 3. Institutional development 
 The third strategy is to establish and strengthen the regulatory and institutional framework at the outset of the tourism development program. Need is seen for a comprehensive review of tourism related laws, including promulgation of appropriate legislation to secure timely 
enforceability of legal obligations. Legislations ar e expected to address the role of stakeholders 
and their obligations, standards, licensi ng, certifications, training requirements. 
 In parallel with the institutional development,  and given the particular characteristics of 
customary land ownership in the country, Government is continuing work with certain land 
owners to develop pilot model tourism project s in partnership with the landowners. The 
Government intervene to secure long term le ase agreement with landowners and then the 
government sub-lease to developers.  So far the Governments own development budget has been used to fund the above activities. 
Donor support could appropriately be applied to  strengthen detailed plans for the activities as 
well as their implementation.   The Government is working closely with Int ernational Finance Corporation and is currently 
conducting a tourism diagnostic study in the country  which is expected to produce a “State of 
Play assessment” report indicating; 
 
• The factors impeding sustainable developmen t and investment in the tourism sector 
• The type of reforms that would need to  be considered in order to address those 
 impediments and recommendations on pote ntial sources of assistance for those 
 interventions and 
• The specific impediments which correspond to  IFC mandates which form the basis of 
 discussions about follow-on reform programs. 
 
QUESTION 7
 
 
According to the Secretariat Report (WT/TPR/S/215) , the number of air servi ces agreements (ASAs) 
that Solomon Islands is a party to is only six, ma inly with neighbouring island states in the Pacific. 
 
Is there a particular reason for this low figure?  
ANSWER
 
 The Pacific region, beyond Australia and New Zeala nd, is typified by very long distances with 
thin traffic and low cargo volumes.  The low nu mber of bilateral ASAs signed by Solomon 
Islands merely reflects low-traffic markets, and existing ASAs are ade quate to cater for the 
limited demand that currently exists.  Commerci al carriers within the region fully understand 
this position and recognise that they could not profitably run additional routes. 
 
QUESTION 8
 
 
Does Solomon Islands have plans to further expand its ASA network in the future? 
 
ANSWER  
 Market conditions will dictate whether a furth er expansion is necessary ; under current demand 
conditions, this would not be beneficial.  WT/TPR/M/215/Add.1 
 Page 47 
 
 
 Furthermore, Solomon Islands sees the early ratifi cation of PIASA as a priority, and would seek 
for the wide implementation of this treaty to replace bilateral ASAs in the medium term. 
 
AUSTRALIA 
 
QUESTION 1  
 
The Secretariat’s report, at paragraphs 66 to 72 on pages 33–34, outlines Solomon Islands’ 
procedure for developing and implementing SPS measures. Could Solomon Islands provide more 
detail on the following: 
 
a. Please elaborate on the policy processes that Solomon Islands uses to develop its SPS policies and import measures. What role, if any, is there for any specialist technical (veterinary or 
plant  protection) input into these processes? 
 ANSWER
 
 Solomon Islands has always relied upon the Secret ariat of the Pacific Community (SPC), the 
regional plant protection organization (RPPO), to provide technical expertise on SPS policy and measures.  The RPPO has recently been involved in undertaking short-term technical training for Solomon Islands in its capacity building pr ograms.  The policies are discussed and enacted 
according to the SPS Agreement as well as the relevant international standards. 
 
b. How does Solomon Islands undertake its control and inspection measures that give effect to 
its SPS policies and measures? 
 
ANSWER
 
 Solomon Islands endeavours to comply with th e SPS Agreement, especially with regard to the 
control and inspection of imports.  The Governme nt also works with three sister organisations 
(Codex/FAO/WHO, the World Organisation for An imal Health (OIE) and IPPC/SPC) to ensure 
that its control and inspection measures are base d on international standards.  However, the 
Government requires a lot of technical and financial assistance to develop the necessary legal 
and institutional capacity to be able to develop its control and inspection measures. 
 c. How does Solomon Islands undert ake equivalence assessments? 
 
ANSWER
 
 Solomon Islands endeavours to apply equivalence assessments according to  the SPS Agreement, 
as well as the relevant international standards.   However, the Government requires a lot of 
technical and financial assistance to develop the necessary legal and institutional capacity to be 
able to undertake equivalence assessments. 
 
d. How does Solomon Islands amend/update its legi slation to accurately reflect changes in the 
animal and plant health st atus of trading partners? 
 
ANSWER
 
 
Solomon Islands updates its legislation to reflect ch anges in animal and plant health status of its 
trading partners after undertaking the necessary risk assessment measures.  The Government 
also relies on the guidance of the three sister organisations (including the SPC) to formulate, amend and update its biosecurity legislation. WT/TPR/M/215/Add.1 
Page 48  
 
 EUROPEAN COMMUNITIES 
 III. TRADE PRACTICES AND PRACTICES BY MEASURE (2) MEASURES AFFECTING IMPORTS (v) Other charges 
 
WTO Secretariat’s report, page 29 , para 44-48.  
According to paragraph 45, there is apparently discrimi nation in treatment as far as the "sale value" 
is concerned between importers w ho have registered with the Inland Revenue Division of the Ministry 
of Finance and Treasury and importers who have not done so.  
 
QUESTION 1
 
 
Could Solomon Islands outline the reas ons for the measures in questions? 
 
ANSWER  
 
The Government does not regard the different meth ods of determination of sale value between 
registered importers and non-registered importers as discriminatory.  The difference between 
the two cases is that importers registered with  the Inland Revenue Division defer goods tax 
payments until those goods are sold, wherea s unregistered businesses are required to pay 
Customs at the port of entry based on a sale value  of a 30 per cent mark up over cost and duty.  
Registered firms are taxed based on the determined sale value, which is typically between 20 and 30 per cent higher than cost and duty. 
 
QUESTION 2
 
 
On the basis of which criteria economic operators are registered or are p revented from registering?  
 ANSWER
 
 
Economic operators are not prevented from regis tering.  Wholesalers are required to register 
with the Inland Revenue Division, whereas many  retailers and individuals may choose not to 
register.  They may make this decision beca use of the cost and inconvenience involved in 
registration. 
 
QUESTION 3  
 
Is the good tax levied at import?  
 ANSWER
 
 
Yes, goods tax can be levied at import. 
 
QUESTION 4  
 
Could Solomon Islands please provide further information on the determination of the sale value in 
both cases? 
  WT/TPR/M/215/Add.1 
 Page 49 
 
 
 ANSWER  
 The sale value of imported goods for home consumption:  (a) by an unregistered person shall be an amount equal to 130 per cent of the sum of 
‘customs value of goods (CIF)’ and the ‘amount of customs duty’ that is payable in respect of 
the goods;  (b) by a registered person (typically a whol esaler or manufacturer) shall be the amount 
which would be the fair market value of those goods when sold wholesale. 
 
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