RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/ACC/LAO/8 
31 October 2006 
 (06-5217) 
Working Party on the 
Accession of Lao PDR Original:   English 
 
 
ACCESSION OF THE LAO PDR 
 
Additional Questions and Replies  
  
 The following submission, dated 20 October 2006, is being circulated at the request of the 
Government of the Lao People's Democratic Republic (Lao PDR). 
  
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  WT/ACC/LAO/8 
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 TABLE OF CONTENTS 
 
II. ECONOMY, ECONOMIC POLICIES AND FOREIGN TRADE ......................................1  
2. Economic Policies.............................................................................................................. ........1  
(c) Foreign exchange and payments system .................................................................................1  
IV. POLICIES AFFECTING TRADE IN GOODS .....................................................................2  
3. Internal policies affecting foreign trade in goods...................................................................2  
(c) Sanitary and phytosanitary measures.....................................................................................2  
VI. TRADE-RELATED SE RVICES REGIME ...........................................................................2  
1. General........................................................................................................................ ...............2  
2. Policies affecting Tr ade in Services .........................................................................................4  
3. Market Access and National Treatment .................................................................................4  
(a) Limitations on the numb er of service suppliers .....................................................................4  
(d)  Limitations on the total number of natural persons that may be employed in a 
particular service sector ...................................................................................................... .....5 
4. Most-Favoured-Nation Treatment ..........................................................................................5   WT/ACC/LAO/8 
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 II. ECONOMY, ECONOMIC POLICIES AND FOREIGN TRADE 
2. Economic Policies (c) Foreign exchange and payments system Question 1 
Obligation of converting foreign exchange revenues into kip:
 
- As indicated in the "Foreign exchange and payment system" paragraph 1, holders of 
foreign exchange are obliged to present thei r foreign exchange holdings to a bank for 
exchange into kip or may open foreign exchan ge accounts, are residents able to keep all 
their foreign exchange revenues in their foreign exchange accounts or there is a 
retention ratio? 
Purchasing foreign currencies:  
- As indicated in the "Foreign exchange and payment system" paragraph 4, commercial 
banks and foreign exchange bureaus may se ll foreign currencies to the general public 
for nine categories of purposes,  
 (i) It seems that the general public includes residents only. Are there any 
regulations for non-residents to  purchase foreign currencies? 
 (ii)  Are there any quotas set for the general public purchasing foreign currencies for 
payments abroad?  Do they have to get prior approval from the Bank of the Lao PDR for purchasing foreign currencies? 
 (iii)  Are residents allowed to purchase fo reign exchange for paying fees charged by 
foreign service providers not related to trade in goods, travelling or studying abroad? 
Answer: 
 
Referring to Article 11 of the Instruction on the Implementation of the Law on Managing Foreign 
Currency and Precious Metals No. 02/BOL, dated 29 August 2003, residents are allowed to keep all 
their foreign exchange revenues in foreign exchange  accounts. No ratio for retention is specified. If 
residents need local currency for domestic payment,  they can sell foreign currency at the commercial 
banks or authorised foreign exchange bureaus. 
(i)  Articles 4 and 8 of the Instruction on th e Implementation of the Law on Managing Foreign 
Currency and Precious Metals No. 02/BOL, date d 29 August 2003, apply to both residents 
and non-residents.   
(ii)  Under Article 4 of the Instruction on th e Implementation of the Law on Managing Foreign 
Currency and Precious Metals No. 02/BOL, dated 29 August 2003, there is no quota on the 
purchase of foreign currency transactions th rough banks, although transactions above 
US$10,000 have additional administ rative requirements.  According to Article 5.8, 5.9, 5.10 
the public does not need to ask for a prior approval from the Bank of the Lao PDR. 
(iii)  Under Article 5 of the Instruction on th e Implementation of the Law on Managing Foreign 
Currency and Precious Metals No. 02/BOL, date d 29 August 2003, residents are allowed to 
purchase foreign currencies for medical treatment, international travel and studying abroad.  WT/ACC/LAO/8 
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 IV. POLICIES AFFECTING TRADE IN GOODS 
3. Internal policies affecting foreign trade in goods (c) Sanitary and phytosanitary measures Question 2 As indicated in the Sanitary and Phytosanita ry measures, including measures taken with 
respect to imports, we request that the Lao PDR provides detail descriptions of the border 
quarantine inspection measures for transit comm odities from neighbouring countries.  In 
addition, phytosanitary measures for quarantine pests and the list of those pests are also 
requested.  
Answer: 
 
The authority to regulate the importation of plants to Lao PDR is based on Law No. 01/98NA of 
10 October 1998 on Agriculture, Decree No. 66/PM of 23 March 1993, which relates to plant 
quarantine in the Lao PDR, and Regulation No. 0894/MOAF of 21 November 1992 which relates to 
the control and use of plant pesticides in the Lao PDR. Moreover, Lao PDR has been a signatory to 
International Plant Protection Convention (IPPC) since 1959.  The issuance of a Phytosanitary 
Certificate is based on International Standards fo r Phytosanitary Measures (ISPM) No. 12, Article 3.3 
which stipulates:  "if a consignment is not imported,  but is in transit through a country without being 
exposed to infestation or contamination by pest s, the National Plant Protection Organization (NPPO) 
does not need to issue either a phytosanitary certif icate or a phytosanitary for re-export.  If however, 
the consignment is exposed to infestation or c ontamination by pests, the NPPO should issue a 
phytosanitary certificate.  If the consignment is  split up, combined with other consignment or 
repackaged, the NPPO should issue a phytosanitary certificate."   
In addition, Regulation No. 0894/ MOAF of 21 November 1992, which relates to the management of 
plant protection in the Lao PDR, stipulates the quaran tine pests list.  This list will be updated in the 
near future (see Annex 1) 
VI. TRADE-RELATED SERVICES REGIME 
1. General  - Distribution Services
  
Question 3 
As indicated in the Memorandum on the Foreign  Trade Regime, distribution channel in Lao 
includes wholesalers and retailers.  We would like to know if distribution services conducted by 
commission agent and franchising are allowed. 
Business Law of Lao provides that employment is limited to nationals in retail trade.  Does it 
include all levels of employees?  Plea se clarify the scope of employment. 
Please offer the detailed information regarding the laws, which are relevant to distribution 
services or indicate the website where we can get the information.  WT/ACC/LAO/8 
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 Answer:  
As a land-locked, least-developed country with lim ited industrial activity, these types of services are 
important for national employment in Lao PDR an d assist in poverty alleviation.  The commission 
agent and franchising services are still in the early  stages of development; and as a result foreign 
participation is not allowed.  
We confirm that the limitation is on all level of employees.   
The information regarding distribution services can be found in the Prime Minister's Implementation 
Decree for the Law on the Promotion of Foreig n Investment No. 301/PM, dated 12 October 2005 
(available in document WT/ACC/LAO/5/Add.1). 
- Educational Services  
Question 4 
As indicated in the Memorandum on the Educat ion Service of Trade-Related Service regime, 
the liberalization of education service in Lao, in  terms of encouraging the supplies of private 
education, has been undergone quite successfully.  However, the authority of private education 
didn't clarify if the liberalization includes all the levels of education?  More precisely speaking, 
are the first, secondary and tertia ry education services open to the foreign supplier?  And, if it 
was, can the Lao authority indicate these items which have been or will be subject to the 
liberalization? 
Answer:  
Foreign investment in Lao PDR occurs under the framework established by the Law on the Promotion 
of Foreign Investment No. 11/NA dated 22 Octo ber 2004 and Prime Minister's Implementation 
Decree for the Law on the Promotion of Foreig n Investment No. 301/PM, dated 12 October 2005 
(WT/ACC/LAO/5/Add.1 refers).  This Law and th e Implementation Decree set out which sectors are 
open to foreign investment and under which conditions .  Investments at all levels of the education 
sector are covered by this legal framework.  Differe nt levels of education are subject to different 
forms of government approval.  For more information, please refer to the Law and the Prime Minister's Implementation Decree which has already been provided to the WTO (Decree No. 46/PM, WT/ACC/LAO/4/Add.1 refers).   
- Environmental Services 
 
Question 5 
As indicated in the Memorandum on the Foreign Trade Regime, please identify what are the 
concessions granted for servicing selected districts as in the last paragraph on page 40.  In addition, please describe market access and nation al treatment requirements on other areas of 
environmental services such as cl eaning services of exhaust gases. 
Answer: 
 
Concessions on cleaning services are provided under th e Law on the Promotion of Foreign Investment 
No. 11/NA dated 22 October 2004.  
On other areas of environmental services including cleaning services of exhaust gases, foreign 
participation is not allowed.    WT/ACC/LAO/8 
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 2. Policies affecting Trade in Services  
Question 6 As indicated in the Policies affecting Trade in S ervices (c), application for the establishment of 
the foreign commercial presence in Lao PDR mu st pass expert evaluation and obtain the 
approval by FIMC.  We request that Lao P DR explain the above approved and evaluated 
criteria and requirements in architectural and construction services. 
As indicated in the Market Access and National  Treatment (d), foreign investors may employ 
foreign skilled personnel and experts, however the pr iority should be given to Lao nationals.  
We request that Lao PDR explain whether the percentage of employing Lao nationals is 
restricted in foreign-invested company. 
Answer: 
 
When establishing a foreign commercial presence in Lao PDR, foreign investors have to follow the 
general procedures as stated in the Decree of the Prime Minister regarding the Implementation of the 
Law on the Promotion of Foreign Investment No. 30 1/PM, dated 12 October 2005.  For projects with 
technical elements, the Department for Promo tion and Management of Domestic and Foreign 
Investment will request the Ministry of Comm unication, Transport, Post and Construction's 
consideration and approval.  There are four establishment licensing criteria for Architecture and Construction investments, these are: 
− Must be financially sound. 
− Must have at least two full-time technical staff with at least a diploma in architecture and 
construction, have sufficient work experience a nd must be a member of the Lao Architecture 
and Construction Association.  
− Must be registered and have investment licence and business licence. 
− Must have a permanent office in Lao PDR. 
There are no limitations on foreign-invested comp any employing Lao nationals including on the 
numbers that could be employed.   
3. Market Access and National Treatment 
(a) Limitations on the number of service suppliers 
Question 7 
As indicated in the Memorandum on the Trade-Rela ted Services Regime 3(a) Limitations on the 
number of service suppliers, the limits on the nu mber of services suppliers exist in public water 
and electricity, telecommunications and postal services.  Please elaborate on whether or not 
there are any limitations on the number or percentage of foreign suppliers providing the 
services in question. 
Answer: 
 
There are limitations in the following sectors:  
− Public water-operated by La o Water Supply Company.    WT/ACC/LAO/8 
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 − Electricity-Power generation by Independent Po wer Producers is open to foreign investment 
on a joint-venture basis with the government; transmission and distribution are not open to foreign participation.  
− Telecommunications-with regard to fixed line telephone services there is no limitation on the 
number of service suppliers; with regard to mobile phone services th e maximum number of 
operators is limited to five.   
− Postal services-operated by La Post du Laos.      
(d)  Limitations on the total number of natural persons that may be employed in a 
particular service sector  
Question 8 As indicated in the Memorandum on the Trade-Rela ted Services Regime 3(d) Limitations on the 
number of natural persons that may be employed in a particular service sector, some services 
activities are limited to natural persons of Lao nationality.  We would like to know why retail 
services, road transport services, and building-clea ning services have this kind of limitation. 
Answer: 
 
As a land-locked, least-developed country with lim ited industrial activity, these types of services are 
important for national employment in Lao PDR a nd assist in poverty alleviation.  Therefore, 
limitations on employment by nationality exist in ce rtain sectors.  Services liberalisation is a sensitive 
issue for Lao PDR and the government believes th at it has the right to reserve these services for 
nationals.  
4. Most-Favoured-Nation Treatment   
Question 9 As indicated in the Memorandum on the Trad e-Related Services Regime 4, Most-Favoured-
National Treatment, foreign service providers th at want to obtain public accountant licenses 
must be from countries that have signed a bilateral agreement in this regard with the Lao PDR.  Please further explain how many countries have  signed the bilateral agreements with the 
Lao PDR in this regard. 
Answer: 
 
To date, no country has signed a bilateral agreem ent with Lao PDR in relation to public accountant 
licenses. 
 
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