RESTRICTEDWORLD TRADE
ORGANIZATIONWT/ACC/VUT/12
9 November 1999
(99-4831)
Working Party on the
Accession of VanuatuOriginal:  English
ACCESSION OF VANUATU
Draft Accession Package
Proposal by the Delegation of Vanuatu
The following communication has been submitted by Government of the Republic of Vanuatu
with the request that it be distributed to members of the Working Party.
_______________
The Delegation of Vanuatu has pleasure in attaching a complete accession package consisting
of proposals for the report of the Working Party, a draft Decision and Protocol, Goods Schedule and
Services Schedule.
An earlier draft of this package was circulated to members of the Working Party on the
Accession of Vanuatu in September 1999 and considered at an informal meeting of the Working Party
on 18 October 1999 attended by a delegation from Vanuatu headed by the Deputy Prime Minister and
Minister of Trade, Industry and Business, the Hono urable T.R. Willy Jimmy.  At that meeting the
Deputy Prime Minister stressed that his Government’s offers were very close to the maximum that
was possible for them to deliver for financial, technical and political reasons.  Financially, their funds
were very limited and they had exhausted their budget for this exercise.  Technically, their capacitywould be fully extended by the implementation of the existing offers.  Politically, they could only
present commitments to their Parliament that refl ected the principles of WTO, in particular the
principle of special and differential treatment for least-developed countries that had been the subject
of so many solemn declarations of intent in this  forum.  In his closing statement to the informal
Working Party meeting, the Deputy Prime Minister stressed that the procedure for concluding theaccession of Vanuatu should be adapted to its needs as a least-developed country and take into
account the fact that it did not have the resources for more travel, nor for lengthy negotiations.
After that informal meeting, bilateral meetings were held on 18 to 21 October 1999 with all
the delegations requesting such meetings, - Australia, Canada, European Union, Japan, New Zealandand United States of America.
The Government of Vanuatu has once again given careful consideration to the requests made
to it, in the light of its trade, development and financial situation and its status as a least-developed
country. Vanuatu has responded to all the questions, comments and requests made to it and has madesignificant improvements in its proposed accession package.  The present document incorporates all
these improvements.
The proposals in this package are unparalleled for a least-developed country in WTO:
- The draft Working Party report contains commitments to conform to all WTO provisions by
the date of accession, subject only to two very limited exceptions relating to theWT/ACC/VUT/12
Page 2
implementation of its legislation on Customs Valuation and Trade-Related Intellectual
Property Rights.  Vanuatu has already drawn up laws or draft laws setting the standards
necessary for conformity with these two Agreements and offers to ensure that all this
legislation is passed by the date of its accession.  Vanuatu has presented an Action Plan
setting out the steps that will be taken during a transitional period of two years to ensure fullimplementation of these two Agreements.
- The Tariff Schedule offers to bind Vanuatu’s entire tariff.  It offers a significant number of
zero for zero commitments.  It offers to bind all “other duties and charges” at zero.
- The Schedule of Agricultural Support Commitments offers to bind domestic support at de
minimis levels and export subsidies at zero.
- The draft Schedule of Specific Commitments on Services contains clear and unambiguous
horizontal commitments and substantial commitments in sixteen sectors.
The Government of Vanuatu requests that this revised package now be accepted by the
Working Party and that the report of the Working Party be drawn up and issued so that a decision on
the terms of its accession is taken by the Seattle Ministerial Conference.WT/ACC/VUT/12
Page 3
DRAFT REPORT OF THE WORKING PARTY ON
THE ACCESSION OF VANUATU TO THE
WORLD TRADE ORGANIZATION
INTRODUCTION
1. The Government of the Republic of Vanuatu applied for accession to the World Trade
Organization in June 1995.  At its meeting on 11 July 1995, the General Council established a Working
Party to examine the application of the Govern ment of Vanuatu to accede to the World Trade
Organization under Article XII of the Marrakesh Agreement establishing the WTO.  The terms ofreference and the membership of the Working Party are reproduced in documentWT/ACC/VUT/3/Rev.5.
2. The Working Party met on 3 July 1996 and ... under the Chairmanship of
H.E. Mrs. S.B.A. Syahruddin (Indonesia).
DOCUMENTATION PROVIDED3. The Working Party had before it, to serve as a basis for its discussions, a Memorandum on the
Foreign Trade Régime of Vanuatu, the questions submitted by Members on the foreign trade régime of
Vanuatu, together with the replies thereto, and othe r information provided by the authorities of Vanuatu
(WT/ACC/VUT/2, WT/A CC/VUT/4, WT/ACC/VUT/6, WT/ACC/ VUT/7, .......), including the
legislative texts and other documentation listed in Annex I.
INTRODUCTORY STATEMENTS4. The representative of Vanuatu recalled that his country was a small least-developed country
composed of a large number of islands located in the centre of the Pacific Ocean.  It had a totalpopulation of about 180,000 people living on 68 of these islands.  With a per capita income of some
$1000, Vanuatu could only support very low living standards.  Incomes in the capital, Port Vila, and itsother main town, Luganville were above average, esp ecially in the expatriate community.  Outside the
urban centres, about 80 per cent of the populati on depended on the subsistence sector for their
livelihood.
5. The economy of Vanuatu was very fragile and the Commonwealth Secretariat had placed the
country at the top of its vulnerability index.  It was exposed to frequent external and domestic shocks,
including natural disasters such as cyclones.  It wa s distant from its main markets. It exported a narrow
range of goods: of these copra was the most important  (44 per cent of export earnings in 1998), followed
by kava (23 per cent), sawn timber (13 per cent), beef (8 per cent), cocoa (4 per cent) and seashellsWT/ACC/VUT/12
Page 4
(2 per cent).  Because the manufacturing sector wa s extremely small and Vanuatu imported most of its
needs, export earnings covered only one third of the bill for imports.   Its main export markets were, in
1998: the European Union (34 per cent), Bangladesh  (18 per cent), Japan (11 per cent), New Caledonia
(3 per cent) and Australia (3 per cent) and its main suppliers: Australia (43 per cent), New Zealand
(11 per cent), New Caledonia (7 per cent), Japan (6 per cent), France (6 per cent), Fiji (5 per cent) and
Singapore (3 per cent). On the other hand, the servi ces account was positive, thanks mainly to receipts
from tourism and transportation.
6. Vanuatu had been watching the rapidly evolving global economic scene with much interest.
The world economy was becoming increasingly globalized and competition in trade and capital wasincreasing in intensity.  The Government wanted Vanuatu to be part of the global trading and financialsystem in order to share in the growth expected in  the wake of the newly established world multilateral
trading system. However, he stressed that with the broad potential advantages offered by WTO
membership, Vanuatu had a keen interest in integr ating its economy into the multilateral trading system.
He was conscious that integration into the multila teral trading system would require much work to
restructure the economy and the domestic policy framewo rk to achieve policies and legislative structures
consistent with the obligations of the WTO.  However, a rule-based system had particular attractions tosmall countries such as Vanuatu, as it promised fair and equitable treatment for all Governments, bigand small, strong and weak.  Accordingly, Vanuatu expected to accede on terms appropriate to its status
as a least-developed country and in particular to be  accorded the special and differential rights accorded
to these countries in WTO Agreements.
7. In their opening remarks, members of the Working Party welcomed the request from Vanuatu to
accede to the WTO.  Experience had shown that the accession process, while sometimes complex, often
served to guide the establishment of trade polic ies within well-tested paths that supported economic
development and growth.  Members were ready to provide experience and support to Vanuatuthroughout the accession, and work constructively with Vanuatu in establishing appropriate terms ofaccession in a timely manner.  Some members pointed to  Vanuatu's status as a least-developed country,
and would take this into account in determining th e commitments and concessions that they would be
seeking from Vanuatu.
8. The Working Party reviewed the economic policies and foreign trade regime of Vanuatu and
the possible terms of a draft Protocol of Accession to the WTO.  The views expressed by members of
the Working Party on the various aspects of Vanuatu's foreign trade regime, and on the terms and
conditions of Vanuatu's accession to the WTO are summarized below in paragraphs 9-138.WT/ACC/VUT/12
Page 5
ECONOMIC POLICIES
Monetary and Fiscal Policy
9. The representative of Vanuatu said that Vanuatu had a conservative approach to fiscal policy,
with a somewhat narrow tax base.  Commitments under the World Trade Orga nization would have a
direct impact on the yield of indirect taxes.  Th e structure of the tax system was being reformed to
ensure the revenue needs of the Government, while promoting economic efficiency, domestic savings,risk taking and investment activities.
10. Vanuatu levied no personal or corporate income taxes, no estate or gift duties, and no capital
gains taxes on residents or non-residents.  Taxes applied by Vanuatu included rent tax; contributions tothe National Provident Fund; land taxes; municipal ta xes; stamp duties; fees, taxes and stamp duties on
the registration of motor vehicles and issuance of driver's licence; taxes relating to the extraction of
minerals; tax on logging licence; tax on licence for commercial fishing in Vanuatu's Economic Zone;business licence fees; hotel and licensed premises tax; taxes on insurance; gambling taxes; building
construction permit fees; navigation and port charges; work permit fees; residence permit fees;  aviation
charges; and departure tax.
Foreign Exchange and Payments
11. The representative of Vanuatu said that Vanuatu  had no foreign exchange controls.  All inward
and outward movements of capital were unrestricted.  There were no restrictions on payments forinvisibles, and exchange proceeds need not be surrendered.  No prescription requirements applied forpayment of currency.  The Vanuatu authorities ma de no distinction between accounts of residents or
non-residents; all accounts could be debited or credited freely.  Vanuatu had become a member of the
IMF in 1981, and had formally accepted the obligations of Article VIII, Sections 2, 3 and 4 of the
Articles of Agreement of the IMF as from 1 December 1982.
12. The external value of the currency of Vanuatu - the vatu - was determined on the basis of a
(trade and tourism) transactions-weighted basket of currencies of Vanuatu's major trading partners.  The
Reserve Bank of Vanuatu traded foreign exchange daily with commercial banks, the Government and
the Vanuatu Commodities Marketing Board (VCMB).  No subsidies or taxes were levied on purchasesor sales of foreign exchange.WT/ACC/VUT/12
Page 6
Investment Regime
13. The Foreign Investment Act No. 15 of 1998 encouraged investment in Vanuatu.  However, the
Act prohibited investment in activities such as manufacture of nuclear weapons, chemical weapons,
arms, and dumping or storage of nuc lear waste and toxic chemicals.  It also excluded foreign nationals
from investing in small-scale businesses that could be carried out by Vanuatu nationals.
14. The Foreign Investment (Amendment ) Act No.1 of 1999 further liberalised and rationalised
foreign investment in Vanuatu.  The negative list of  businesses reserved for Ni-Vanuatu was now much
shorter (see Annex 2).  For instance, investments in hotels and motels that used to be restricted to
nationals had now been opened up to foreign investment if the investment exceeded approximatelyUS$40,000 (5 million Vatu(VT)) in the rural sector and US$80,000 (VT10 million) in the urban sector.
15. The new Act eliminated the discretion of the Mini ster of Finance in most investment activities
outside the financial sector.  The Minister must now  provide a justification for refusals to grant a
business licence, and his decision could be subject to  judicial review.  The new Act also addressed
important issues such as labour laws, immigra tion, business legislation including land laws.  It
streamlined investment procedures with regard to administrative duties, approvals, land disputes and
industrial disputes.
16. The issuance of work permits was regulated by the Labour (Work Permits) Act.  This included a
reserved list of professions, now modified by the Foreign Investment (Amendment) Act and comprising
able seaman/ordinary seaman; bricklayer; bus driv er; clerical supervisor; dock worker; driver; hotel
receptionist; housemaid; lorry and van driver; mason; painter; portable sawmiller; receptionist; street
vendor; typist and waitress/waiter.
17. The issuance of residence permits to foreigners was linked to investment in Vanuatu.  An
investment of approximately US $40,000 (VT5 million) in cash or other assets in Vanuatu entitled a
foreigner to a one-year residence permit.  A higher initial investment, and an undertaking to maintain the
investment at this level, ensured the individual of a longer residence permit.  Maximum-length residence
permits (15 years) were issued to foreigners having invested more than about US$800,000(VT 100 million) in Vanuatu.  The initial fee for one year and subsequent annual renewal amounted toabout US$160 (VT 20,000).
18. All land belonged to the indigenous populati on of Vanuatu.  Customary ownership was
complicated, resulting in frequent disputes concer ning ownership and boundaries.  These disputes were
settled by resort to customary law.  Foreigners had the right to lease land.  Their rights were governed by
the Land Lease Act Cap 163.  Once registered, a leas e was governed by the laws of Vanuatu.  TheWT/ACC/VUT/12
Page 7
Foreign Investment (Amendment) Act provided that di sputes related to leases were first considered by
the Foreign Investment Board and then, if necessary, by the courts.  A Subsidiary Land Rent Payment of
2 to 4 per cent of gross annual turnover, paid to the custom landowners, applied to tourism leases.
State Ownership and Privatization
19. The representative of Vanuatu said that the Gove rnment owned outright or had part interest in
19 companies (listed in document WT/ACC/VUT/6, pp. 30-31).  His Government had embarked on a
policy to privatize and corporatize four principal en tities engaged in the supply of water, electricity,
stevedoring, and television and broadcasting.  It had no immediate plans to remove monopolies in the
provision of water, electricity and telecommunications.
20. In line with Government policy to strengthen th e private sector, it had taken action to establish
the Vanuatu Chamber of Commerce and Industry to act as  a catalyst for private sector issues and reform.
Competition and Pricing Policies
21. The representative of Vanuatu was asked whether basic utilities, such as electricity and
telephone, which enjoyed monopolies could increase prices whenever they liked.  The representative of
Vanuatu said that the balance between efficient mana gement of resources and costs to the consumer was
delicate, and had not been examined carefully by the Government so far.  It recognized that reductions
in costs could only occur with effective competiti on in the market.  However, this was frequently
difficult to achieve in a country small in size and population.  He confirmed that Vanuatu did not
maintain any system of price controls nor did Vanuatu have legislation to effect it.
22. The representative of Vanuatu stated that if price controls were introduced in the future,
Vanuatu would apply such measures in a WTO-consistent fashion, and take into account the interests of
exporting WTO Members as provided for in Arti cle III:9 of the GATT 1994.  Vanuatu would also
publish the list of any goods and services subject to pr ice controls in its Official Gazette.  The Working
Party took note of this commitment.
FRAMEWORK FOR MAKING AND ENFORCING POLICIES
Powers of Executive, Legislative and Judiciary, Administration of Policies on WTO-Related Issues
23. The Republic of Vanuatu was a parliamentar y democracy which obtained independence in
1980.  The national political structure, as provided in the Constitution, consisted of a legislative, anexecutive and a judiciary branch.  The legislature cons ists of a single chamber with 52 Members.  The
electoral system provides for proportional representa tion.  The Executive consists of the Prime MinisterWT/ACC/VUT/12
Page 8
and the council of Ministers and the Judiciary of a Chief Justice and three Judges.  The Government is
advised on custom and tradition by the National Council of Chiefs.  The main Ministries responsible for
the implementation of policies affecting trade are: the Ministry of Trade, Industry and Investment; theMinistry of Finance and Economic Management; a nd the Ministry of Agriculture, Forestry and
Fisheries.
24. The representative of Vanuatu said that existing Vanuatu Law contained a standard common
law right of judicial review.  The judicial system in  Vanuatu required only the existence of just cause for
review, and the judiciary would ente rtain reviews of administrative as well as ministerial decisions made
in all such cases.  The new Customs Act, which w ould soon be gazetted,  provided the right of appeal
against decisions of Customs, first to the relevant Minister and the to the courts.
25. The representative of Vanuatu stated that Vanu atu would provide the right of appeal to an
independent body for foreign and domestic importers and exporters of official measures affecting trade.The Working Party took note of this commitment.
26. The representative of Vanuatu said the Government had decided to establish six regional
provinces in late 1994 with a view to accelerate and improve administration and other importantprocesses in the provinces.  In consistency with Vanuatu's laws, each respective province hadautonomous power to enact by-laws and other admini strative matters pertaining to taxes and other
business and commercial undertakings.  He noted th at under the Decentralization Act No. 1 of 1994, any
potential tax, fee or levy raised by provincial go vernments required the approval of the Government
through the Ministry of Home Affairs, which would evaluate its consistency with WTO provisions prior
to allowing its implementation.
27. The representative of Vanuatu stated that, from the date of accession, the Central Government
would eliminate or nullify measures taken by sub-cen tral authorities in Vanuatu that were in conflict
with the WTO Agreement when those measures were brought to its attention or in the context of thereview of provincial government legislation by the Ministry of Home Affairs.  The Working Party took
note of this commitment.
POLICIES AFFECTING TRADE IN GOODS
Reference to Annexed Schedule to GATT 1994 Containing Import Concessions, Agricultural
Commitments
28. The Vanuatu customs tariff is available in  electronic format in the Secretariat.WT/ACC/VUT/12
Page 9
29. A number of members entered into market access negotiations with Vanuatu on the basis of
offers and requests.  The commitments agreed betw een Vanuatu and the members of the Working Party
are annexed to the Protocol of Accession of Vanuatu which is reproduced in the Appendix to this report.
A. IMPORT REGULATION
Trading Rights
30. The representative of Vanuatu said the Business Licence Act had recently been amended.  In the
past, any natural or legal person had required a licence to import for direct retail or wholesale trade: one-
year licences were granted by the Minister of Finance upon application and against payment of an
annual fee of about US$400 (VT 50,000) plus 2.5 per cent of the value of the transactions.  At present, a
licence to engage in direct retail or wholesale tr ade was issued on payment of a one-time fee of about
US$80 (VT 10,000).  No distinction was now made betw een the right to trade in domestic or imported
products and the licence gave the right to import goods originating in any country.  The businesslicensing system was maintained for revenue purpos es.  Licences were normally issued within four
weeks from the date of application.  Licences would not be granted to non-Vanuatu citizens who had not
complied with residence permit requirements.  The Mi nister of Trade could limit the type or quantity of
goods to be imported by the licence holder, but these provisions had never been used.
31. In reply to questions, Vanuatu said that it does allow foreign and domestic persons to import
and export and that it had no registration or other requirements to engage in importing and exportingother than those described in the previous paragraph.
32. The representative of Vanuatu confirmed that from the date of accession, Vanuatu would ensure
that its laws and regulations relating to the right to trade in goods and all fees, charges and taxes levied
on such rights would be in full conformity with its WTO obligations, including Articles VIII:1(a),
XI:1and III:2 and 4 of the GATT 1994 and that it woul d implement such laws and regulations in full
conformity with these obligations.  The Work ing Party took note of this  commitment.
Ordinary Customs Duties
33. The representative of Vanuatu said that, li ke many other least developed countries, his
Government was obliged to rely on the customs tariff fo r a large part of its revenue and that this would
continue to be the case in the foreseeable future despite all the Government’s efforts to adopt a more
modern tax structure.  While the tariffs also prov ided an incentive to local production, in practice only
an extremely limited number of goods were actually produced in Vanuatu.  This made it clear that, with
very few exceptions, the tariff had very little protective effect and did not act as a barrier to imports.WT/ACC/VUT/12
Page 10
34. Requests for the examination of proposals for tariff protection were assessed by the Department
of Industry.  For the manufacturing industry, prac tice would be to grant protection for a minimum of
three years, to be reviewed annually thereafter.
35. The representative of Vanuatu said that most tariffs were ad valorem  rates.  Specific duty rates
were levied on beer, wines, spirits, tobacco products and hydrocarbon oils.
36. The representative of Vanuatu said that Vanuatu had adopted the Harmonised Commodity
Description and Coding System (HS) in 1989, and applied it with certain modifications as some
subdivisions at the six-digit level had been regrouped into the four-digit HS level.  Vanuatu applied the
six-digit level classification HS (96) as from 1 July  1998, with seventh and eight-digit levels reflecting
national classifications.
Other Duties and Charges Levied on Imports but not on Domestic Production (except Charges for
Services Rendered)
37. In answer to questions, the representative of  Vanuatu said that the Import Duties Act of 1998
had abolished the 5 per cent service tax levied on imports of most products, as of 1 July 1998.  There
was no stamp duty for imports.
38. The representative of Vanuatu confirmed that, in the past, the importation of rice, sugar, flour,
tobacco products and canned mackerel had been licensed by the Vanuatu Cooperative Federation
against payment of 3 or 4 per cent commission on the c. i.f. value, in order to enable the Federation to
repay its outstanding debts.  These requirements ha d now been abolished and the Federation had ceased
to operate commercially.
39. The representative of Vanuatu therefore confirmed that currently no “other duties and charges”
referred to in Article II:1(b) of GATT 1994 were applied to imports.
40. The representative of Vanuatu stated that the app lication of any “other duties and charges” other
than normal customs duties and fees and charges for services rendered would be in accordance withWTO provisions from the date of accession.  He fu rther confirmed that Vanuatu has bound “other duties
and charges” as defined in Article II:1(b) of GATT 1994 in its Goods Schedule.
Tariff Rate Quotas, Tariff Exemptions
41. The representative of Vanuatu said that goods imported for agriculture, horticulture, livestock or
forestry could be exempted from import duty.  By joint decision, the Directors of Customs and
Agriculture could also exempt from import duties plan t, machinery, materials and equipment (includingWT/ACC/VUT/12
Page 11
purpose-designed vehicles), includi ng spare parts and accessories.  Provided the goods were intended
exclusively for use in a development project approv ed by the Director of Agriculture, the exemption
could also be extended to fuel oils for static m achinery and vehicles engaged primarily in off-road
applications.
42. Schedule 3 of the Vanuatu Customs Tariff provid ed that import duty exemptions or reductions
might be granted on goods which could be considered beneficial for the economic development ofVanuatu, including raw materials and equipment fo r manufacturing, goods destined for new tourism
developments, finance or commercial sectors, mine ral exploration, fisheries and inter-island shipping.
Goods imported for use by diplomatic missions or  other approved organizations, for example as
donations, aid or disaster relief, were also admissibl e free of duty or tax by virtue of international
conventions or agreements.
43. The representative of Vanuatu confirmed that the ta riff exemptions described in this section did
not include the tariff surcharge, which applied to all imports, and that upon accession, it would only
grant duty exemptions on an MFN basis, in accordan ce with the provisions of Article I of GATT 1994.
44. A member encouraged strongly the Government of Vanuatu to revise its import tax law to limit,
to the greatest extent possible, the use of import ta riff exemptions.  Rather than using a complex and
potentially discriminatory tariff exemption scheme , the Government of Vanuatu should give careful
consideration to providing low bound tariff rates to  import items which served as inputs for those
enterprises for which the Government would seek to encourage operations.
45. The representative of Vanuatu replied that his Government had recently taken steps to lower
tariffs on inputs used in the production process substantially but reiterated the importance of tariff
revenues for his country.  New legislation made the duty exemption policy more transparent and
reduced discretion.  Decisions were now based on obj ective criteria for evaluating the contribution that
individual exemptions would make to the economic de velopment of the country.  These criteria did not
discriminate between products originating in differe nt countries.  They included; the quality of the
product, the size of the investment in productive cap acity, participation of Ni Vanuatu, the location of
the business, workers employed, training opportunities provided,  Decisions coul d be subject to judicial
review.  Details of the system were provided to the Working Party.
46. Applicants were required to complete the "V anuatu Duty Exemption Application Form" to
obtain an import duty exemption.  The form could be obtained from the Department of Trade and
Industry, Customs, Fisheries; Minerals and Tourism Departments.  Each respective line department, e.g.
tourism or minerals, considered the application which, if supported by the line department, would beWT/ACC/VUT/12
Page 12
forwarded to the Director of Customs for consider ation by the Duty Exemptions Committee, comprising
representatives of Finance, Customs and Trade.
47. The representative of Vanuatu stated that upon accession to the WTO, any tariff exemptions
would only be implemented in confor mity with the relevant WTO provisions including Article I of the
GATT 1994 and the TRIMs Agreement.  The Working Party took note of this commitment.
Fees and Charges for Services Rendered
48. As a result of recent modifications, the only char ge collected to cover the cost of the services
rendered was of about US$4 (VT500) per customs declaration.
49. The representative of Vanuatu added that port and marine services were provided by the Ifira
Wharf and Stevedoring Limited and the Northern Islands Stevedoring Limited on a purely commercial
basis.  These companies were not controlled by the Government.  Details of the port handling charges
were supplied to the Working Party.
50. The representative of Vanuatu stated that all fees  and charges for services related to imports and
exports would be operated in conformity with the provisions of the WTO Agreement, in particular
Articles VIII and X of GATT 1994.  The representative of Vanuatu also stated that, from the date ofaccession, Vanuatu would not apply, introduce or reintr oduce any fees and charges for services rendered
that were applied to imports on an ad valorem  basis, or allow firms providing customs or port services
on its behalf to apply such fees or charges.  Inform ation regarding the application and level of such fees
and charges, revenues collected and their use, w ould be provided to WTO Members on request.  The
Working Party took note of these commitments.
Application of Internal Taxes to Imports
51. The representative of Vanuatu said that domestical ly-produced beer was subject to an excise tax
of VT 80 per litre, but there was no excise on importe d beer.  While this was not inconsistent with WTO
requirements, the excise tax on imported and dom estically-produced beer would be equalized upon
Vanuatu's accession  to the WTO.  No other products were at present subject to excise tax.
52. Vanuatu had introduced value- added tax on 1 Au gust 1998, replacing a turnover tax.  VAT was
levied at a single rate of 12.5 per cent.  The tax was trade neutral in full observance of the obligationsunder Articles I and III of the GATT 1994.  Signatorie s of the Melanesian Spearhead Group Agreement
and Fiji were subject to VAT.  Exports were zero-rated.
53. The representative of Vanuatu stated that fro m the date of accession Vanuatu would apply its
domestic taxes in full compliance with the relevant provisions of the WTO, including Articles I and IIIWT/ACC/VUT/12
Page 13
of GATT 1994, in a non-discriminatory manner to imports from all WTO Members and to domestically-
produced goods.  The Working Party took note of this commitment.
Quantitative Import Restrictions, including Prohibitions, Quotas and Licensing Systems
54. The representative of Vanuatu said that proh ibitions affected importation of  obscene or
indecent material, narcotics and dangerous drugs, a nd right-hand drive motor vehicles.  The Ministry of
Home Affairs authorized imports of firearms a nd ammunition, licences being strictly controlled for
reasons of public security and safety.
55. The Ministry of Home Affairs also issued automatic licences for importation of liquor and
spirits in order to monitor trade.
56. Information on import licensing procedures ac cording to the format  applicable to WTO
Members was provided to the Working Party in document WT/ACC/VUT/7, Annex I.
57. The representative of Vanuatu said that under th e Import of Goods Control Act, the Minister of
Trade could restrict or prohibit importation of goods  into Vanuatu (or specified parts thereof) for the
purpose of protecting and stimulating local industr y .  Once Vanuatu was a Member of WTO, the
powers under this Act would be used only in strict conformity with WTO provisions.
58. In answer to questions, the representative of  Vanuatu confirmed that importation of potatoes
had until recently been prohibited during the harvest months (August-March), but that this seasonalrestriction no longer applied.  It had been replaced w ith an equivalent tariff.  Import orders restricting
importation of screen-printed T-shirts with Vanua tu motif had also been abolished and replaced by
equivalent tariffs.  As noted above under the he ading “Other Duties and Charges”, import orders
restricting imports of rice, sugar, flour, tobacco  products and canned mackerel and associated non-
automatic import licences had also recently been abolished.
59. Import requirements related to Sanitary and Phytos anitary measures are dealt within the relevant
section below.
60. The representative of Vanuatu confirmed that Vanuatu would, from the date of accession, not
introduce, re-introduce or apply quantitative restrictio ns on imports, or other non-tariff measures such as
licensing, quotas, prohibitions, bans and other restrictions having e quivalent effect that cannot be
justified under the provisions of the WTO Agreement.  He further confirmed that the legal authority of
the Government of Vanuatu to restrict or prohibit importation of goods into Vanuatu would be applied
from the date of accession in conformity with the requirements of the WTO, in particular Articles XI,
XII, XIII, XVIII, XIX, XX, and XXI of the GATT 1994, and the Agreements on Agriculture, SanitaryWT/ACC/VUT/12
Page 14
and Phytosanitary Measures, Import Licensing Procedur es, Safeguards, and Technical Barriers to Trade.
The Working Party took note of these commitments.
Customs Valuation
61. Early in the accession process the representa tive of Vanuatu provided information on
implementation and administration of the Custom s Valuation Agreement according to the format
applicable to WTO Members in document WT/ACC/VUT/ 7, Annex II.  At that time, current regulations
were contained in Schedule III of the Import Dutie s (Consolidation) Act [Cap.91] which were based on
the Brussels Definition of Value.
62. Some members said that Vanuatu should outlin e plans to undertake a thoroughgoing needs
assessment with regard to customs procedures, ad ministration and practices, with a view to full
implementation of the Customs Valuation Agreement.  Some members said that Vanuatu should clarify
whether it would intend to invoke the provisions of  the Customs Valuation Agreement providing special
and differential treatment for developing countries, e.g., the transitions/reservations on computed value
method, minimum values, reversal of sequential order, etc.
63. Since that time, the Import Duties (Consolidat ion) (Customs Valuation Amendment) Act of
1999 had been passed to bring Schedul e III into conformity with the provisions of the WTO Customs
Valuation Agreement. .  Any comments which member s wish to make on this legislation should be sent
to the Government of Vanuatu by 31 December 1999, so that any action necessary to bring it into
conformity with WTO requirements can be taken by the date of Vanuatu’s accession to WTO.
64. Vanuatu had also introduced the ASYCUDA prog ramme in 1999 with financial assistance from
Australia and technical assistance from UNCTAD in orde r to facilitate the proper implementation of the
customs valuation system.
65. Vanuatu had therefore made a great effort to  comply with WTO requirements in this area.
More time would, however, be required to complete all the steps necessary fo r the full implementation
of its valuation legislation.  Vanuatu would need technical assistance from WTO Members, the Forum
Secretariat, UNCTAD, and/or the WCO to help it to co mplete these steps.  It sought recognition of the
efforts that it had made and the difficulties that it  faced as a least-developed country in this complex
area.  Concretely, it sought to delay the implem entation of the Customs Valuation Agreement for a
period of two years from its accession.  Responding to requests from members of the Working Party for
more specificity, the representative of Vanuatu said that his Government could not be sure exactly how
long it would take to obtain the necessary technica l assistance.  He nevertheless presented an Action
Plan setting out the steps to be taken and a timetable for each.  This is reproduced in Table 1WT/ACC/VUT/12
Page 15
66. The representative of Vanuatu confirmed that Vanuatu would fully apply the WTO provisions
concerning customs valuation no later than two year s after the date of its accession to WTO, including
the Agreement on the Implementation of Article VII of the GATT 1994, as well as the provisions for theValuation of Carrier Media Bearing Software fo r Data Processing Equi pment (Decision 4.1).  The
Working Party took note of these commitments.WT/ACC/VUT/12
Page 16Table 1
Action Plan for the Implementation of the Valuation Agreement in Vanuatu
Objective Strategy Action Responsibil ity Deadline Donor Support Comments
Completion of
legislationDevelop, and
Parliament to approve
GATT Valuation
AgreementObtain specimen laws
from other
jurisdictions.
Draft legislation and
submit for approval
prior to ParliamentCustoms,
State Law OfficeBy date of
accessionYes, to provide
legislative drafting
at State Law OfficeComplete
Technical
AssistanceObtain technical
assistanceApproach possible
donorsDepartment of Trade,
Industry and
Investment;
Customs30.06.2000 To be agreed with
donors
Training 15 Customs Officers
and 2 Officers fromthe State Law Office
to be trained on the
new Valuation laws.
Members of private
sector also to betrained.Arrange for training
planCustoms Department,
ASYCUDA RegionalOffice,
UNCTAD31.12.2000 Training and
Workshops
Implementation of
Valuation
AgreementThe enforcement and
implementation of
new valuation rulesPublish the official
gazette to make the
Valuation laws comeinto forceState Law Office,
Ministry of Finance
and EconomicManagement,
Customs31.03.2001WT/ACC/VUT/12
Page 17Table 2
TRIPS Action Plan
Objective Action Responsibility Deadline Donor Support Comments
Implement laws and
train staff in all
TRIPS related areas
by January 2002Prepare legislation State Law
Office and
Vanuatu
Financial
Service
Commission(VFSC)01.07.99 Australia Completed
Passage of legislation 30.11.99 Going to parliament
for November sitting
Gazettal of legislation 01.08.2000
Establishment of IPR Office at VFSC 01.06.2000
Train at least 15 VFSC, customs officers andprivate sector officers as well as educators in
TRIPS issues.05.2000 WIPO Requires budgetary
approval
Attachment of VFSC with AIPO and regional
IPR agencies
-  3 week WTO training course in Fiji- 2
nd 3 week WTO training course09.2000 -
11.2000
08.200010.2001Forum / Australia
WTO/Forum,
with funding from
New ZealandMOU near
completionWT/ACC/VUT/12
Page 18
Rules of Origin
67. The representative of Vanuatu said that, collection of trade statistics apart, Vanuatu only used
rules of origin in the Melanesian Spearhead Group Agreement and in its bilateral trade agreement with
Fiji (see section on Trade Agreements below).  Th ese were based upon a change in HS classification at
the six-digit level.  There was no conflict between these rules and the WTO Agreement on Rules ofOrigin.
68. In answer to questions and comments, the dele gation of Vanuatu again stressed that rules of
origin, particularly non-preferential rules of origin, play ed a very limited role in its trade policy.  It did
not, for instance, have provision for the use of trade remedies, such as anti-dumping duties.
69. The representative of Vanuatu stated that from the date of accession, Vanuatu’s preferential and
non-preferential rules of origin would comply fully  with the WTO Agreement on Rules of Origin.  The
requirements of Article 2(h) and Annex II, paragraph 3(d) of the Agreement would also be implemented
prior to accession.  Vanuatu would abide by the re levant WTO provisions on transparency and the
provision of information about its rules of origin and their application.  The Working Party took note of
these commitments.
70. The representative of Vanuatu said that alt hough Vanuatu was not a member of the World
Customs Organization its systems and procedures related to its other customs formalities were based onthe Kyoto Convention on the Simplification and Harmonization of Customs Procedures.
Preshipment Inspection
71. The representative of Vanuatu said that Vanua tu did not carry out preshipment inspection of
imports and had no plans to do so.
72. The representative of Vanuatu stated that if preshipment inspection requirements were
introduced, they would be in c onformity with the requirements of the Agreement on Preshipment
Inspection.  Vanuatu would take full responsibility to ensure that such enterprises operating on its behalf
complied with the provisions of WTO Agreements.  Decisions by such firms could be appealed by
importers in the same way as administrative decisions taken by the Vanuatu government.  The Working
Party took note of this commitment.
Anti-Dumping, Countervailing Duties, Safeguard Regimes
73. The representative of Vanuatu said that Vanuatu had no provisions in its legislation for anti-
dumping and countervailing measures at present, and that there were no plans to introduce such
legislation.  His Government reserved the right to  employ anti-dumping duties, countervailing duties andWT/ACC/VUT/12
Page 19
safeguard provisions in a manner consistent with its WTO obligations.  Any measures that would be
introduced would be notified to the relevant WTO Committee.
74. The representative of Vanuatu stated that Vanuatu would not apply any anti-dumping,
countervailing or safeguard measures until it had impl emented appropriate laws in conformity with the
provisions of the WTO Agreements on these matters.   Vanuatu would ensure the full conformity of any
such legislation with the relevant WTO provisions , including Article VI and XIX of the GATT 1994 and
the Agreement on the Implementation of Article VI, the Agreement on Subsidies and Countervailing
Measures and the Agreement on Safeguards.  After such legislation was implemented, Vanuatu would
only apply any anti-dumping duties, countervailing du ties and safeguard measures in full conformity
with the relevant WTO provisions.  The Wo rking Party took note of these commitments.
B. EXPORT REGULATION
75. The representative of Vanuatu said that exporters of Vanuatu goods which they had not
produced themselves on a commercial basis were ex empted from business licences.  Exporters of kava
and copra needed to obtain a licence from the Vanuatu  Quarantine Services at a cost of about US$280
(35,000VT).  Coffee was also subject to export licensing, revenue from which covered the cost ofquality control.
76. Vanuatu had recently abolished taxes on exports of copra (4 per cent), kava (3 per cent), beef
(2 per cent), and cocoa (7 per cent).  Export taxes were still collected on logs and unworked seashells.
77. The export of logs was currently banned for environmental reasons.
78. The manufacturing sector was basically exempt  from import duties and taxes on raw materials
imported for manufacture, process and export under the Inward Processing Relief Standards.
79. The representative of Vanuatu said Vanuatu had no export subsidies.
80. The representative of Vanuatu stated that, from the date of accession, Vanuatu would ensure
that it applied its laws and regulations governing e xport measures and would act in conformity with the
relevant provisions of the WTO, including Ar ticles I and XI of GATT 1994 and the Agreement on
Subsidies and Countervailing Duties.  The Wo rking Party took note of this commitment.WT/ACC/VUT/12
Page 20
C. INTERNAL POLICIES AFFECTING FOREIGN TRADE IN GOODS
Industrial Policy, including Subsidies
81. The representative of Vanuatu said that self reliance, defined as meeting import requirements
from foreign exchange earnings and fiscal requirements from domestic revenues, was a long-termeconomic objective.  Some projects had been set up to encourage local manufacturing and especially
small-scale industries, including high quality bags and leather products, aluminum boats, beer and juice,
some textiles and clothing items, coverings, fibreglass products, quality furniture, quality preservative-
free natural dairy products, and coconut-based quality soap, cooking oil and hair lotion.
82. At the beginning of 1997, the Government had established an on-going Comprehensive Reform
Programme, focusing on outward-looking reform of the private and public sector.  Emphasis was put on
competitive production of goods for export, assisted by a more open trade regime.  Industrial projectscould be supported through special loans at relatively low interest rates from commercial banks andspecial exemptions accorded by the customs and tax authorities, but the Development Bank of Vanuatu,
which had in the past provided low-interest loans for industrial projects, no longer existed.
83. The representative of Vanuatu stated that an y subsidy programmes would be administered in
line with the Agreement on Subsidies and Counter vailing Measures and that any such programmes
would be notified to the Committee on Subsidies and Countervailing Measures upon Vanuatu’s
accession to WTO.  The Working Party took note of this commitment.
Technical Barriers to Trade
84. The representative of Vanuatu provided informa tion on technical barriers to trade in the format
applicable to WTO members (document WT/ACC/VUT/6, Annex VIII).  The National Building Coderequired construction in the main towns to meet certain standards (necessary to protect life from
cyclones and earthquakes).  This wa s administered by the city councils of Port Vila and Luganville.
Apart from these and some basic health standards admi nistered by the Ministry of Health, which in his
view did not create any unnecessary obstacles to in ternational trade as required by the Agreement on
Technical Barriers to Trade, Vanuatu maintained no technical regulations or standards.  As a leastdeveloped country, Vanuatu had no option but to leav e most technical standards issues as a private
contractual matter between buyer and seller.
85. Vanuatu was not represented directly or throug h the South Pacific Forum at any international
standards bodies, such as the ISO.  However, given the rapid changes presently occurring with regard to
standards and their regulation globally, Vanuatu expected to take a more active role in this area in future.WT/ACC/VUT/12
Page 21
As a result, the Forum Economic Ministers Meeting held in Fiji in July 1998 had mandated the
undertaking of a study of whether trade facilitation measures in standards could be achieved through a
regional facility.
86. Vanuatu had established an enquiry point, as required by Article 10 of the TBT Agreement,
within the Department of Trade.  The Director of  Trade  would fulfill all WTO’s TBT notification and
enquiry point obligations.   The e nquiry point was fully functioning.
87. The representative of Vanuatu stated that upon accession to WTO Vanuatu would comply with
the provisions of the Agreement on Technical Barrier s to Trade. The Working Party took note of this
commitment.
Sanitary and phytosanitary measures
88. The representative of Vanuatu said that it had a very favourable pest status.  This was one of the
very few benefits of its isolation in the south Pacific and was a valuable national asset to be measured,utilized and preserved.  Its sanitary and phytosanitary (SPS) measures had to reflect this need.
89. The legislative basis for Vanuatu’s sanitary and phytosanitary measures consisted of:
- the Animal Importation and Quarantine Act of  1988, and regulations in Order No. 14 of 1994;
- the Plant Protection Act No. 14 of 1997, and the Imports Specification (Plants) Manual; and
- the Food Control Act No. 21 of 1993 gazetted in July 1999.
- Copies of these were provided to the Work ing Party, together with other documentation
illustrating how these were implemented.
90. The representative of Vanuatu said that the Vanuatu Quarantine and Inspection Services were
responsible for implementing SPS provisions on animal s and plants, while the Department of Health had
responsibility for food control.  Vanuatu’s SPS measures were  transparent.  When Vanuatu became a
Member of WTO, the Director, Va nuatu Quarantine and Inspection Se rvices would operate the enquiry
point  referred to in the SPS Agreement.  He would also be responsible for making notifications to WTOand ensuring that the transparency obligations of the SPS Agreement were met.
91. Under the Animal Importation Act and the Plant Protection Act, listed items posing a negligible
risk may be imported without a permit.  Imports of other items coming under the Acts were subject to a
permit, issued once the safety of the product has been determined.  This was common practiceinternationally and particularly necessary in Vanuatu which was largely disease and pest free.  It was, togive one example, recognized by the Office Interna tional des Epizooties (OIE) as being free of all list A
OIE diseases.WT/ACC/VUT/12
Page 22
92. All imported animals were examined at the point of entry by a veterinarian from the Department
of Livestock.  Animal products, plants and plant products were examined by a member of the
Quarantine and Inspection Services.  Reports from th e OIE detailed the health status for determining
source country risk, and Vanuatu would not accept anim als from countries without a health status report.
Vanuatu would not accept plant products if the risk anal ysis demonstrated that they represented a risk.
At the request of importers, protocols were deve loped with other countries for the importation of
animals and animal products as well as plant a nd plant products when the pests concerned was of
particular concern to Vanuatu.  These set out the steps to be taken in the exporting country to eliminatethe risk.  Vanuatu would normally not develop prot ocols with countries having endemic OIE List A
diseases as Vanuatu had no high-security quarantin e facilities to handle imports from countries with
serious animal diseases.
93. The Food (Control) Act restricted businesses a nd persons from displaying, storing or selling
food unfit for human consumption.  These provisions we re enforced through municipal health standards.
94. Within the limits of its resources as a least-developed country, Vanuatu took part in the relevant
international organizations.  On the animal side, it had been an active member of OIE since the 1980’s
(for instance sending monthly reports to OIE on its di sease status).  Vanuatu was not yet a member of
the International Plant Protection Convention (IPPC) .  It was an observer at the Codex Alimentarius
Commission.  The Government had recently taken a decision to become a member of both these
organizations.  Vanuatu was also a member of the newly formed Pacific Plant Protection Organization
(PPPO).
95. Vanuatu’s SPS measures were based only upon scientific evidence of potential risk and had no
other foundation.  Whenever possible, Vanuatu based its national measures on international standards,
guidelines, or recommendations.  It followed OIE guide lines for all list A and B diseases and the code of
practice contained in the Imports Specification (Pla nts) Manual conformed to IPPC standards, which
cover the main products.  In practice, it followed Codex food standards.
96. Assistance in setting regulations was also obtained from the South Pacific Communities, as well
as the relevant services of Australia and New Zealand.  The SPC provided scientific advice and
technical assistance and training to its members.  The Plant Protection Unit of the South Pacific
Commission had established a list of prohibitions a pplying across the Pacific island countries producing
similar crops in comparable climate and environmen t.  The list was provided  to the Working Party
(document WT/ACC/VUT/7, Annex IV).WT/ACC/VUT/12
Page 23
97. Vanuatu had the capability of doing risk assessments for itself.  Being a small least-developed
country, it frequently based these on risk assessments made by other countries where conditions weresimilar to its own.  It understood that developed count ries sometimes did the same.  The countries in its
region considered that there was need for co-operation on this matter.  To this end, studies had been
commissioned by the Secretariats of the South P acific Forum and the Pacific Communities on possible
means to develop a regional capacity.
98. Vanuatu was making other efforts to improve its current measures.  It was, for instance,
developing guidelines based on scientific principl es to formulate procedures for safe importation of
plants and plant products with the assistance of Ne w Zealand.  In future, principles to be applied
included area of freedom, treatment (heat treatmen t) and tissue cultured materials, which should
eliminate the risk of introduction of new pests.  It was also drafting an import specification manual
based on scientific information to further improve conformity with IPPC standards.
99. The representative of Vanuatu said that, in order to ensure that the  Agreement was effectively
implemented, his Government intended to adopt a decision establishing procedures to ensure that, as
from the date of its accession:- Vanuatu’s SPS enquiry point was formally established and fully operational;
- information on proposed SPS measures which might have a significant effect on trade were
published and notified to WTO, copies of the pr oposed regulations were provided to other WTO
Members on request, a reasonable time was allowed for Members to comment and for thesecomments to be taken into account, but that urgent matters of health were dealt with;
- SPS measures were based on scientific evidence;
- to the extent possible, SPS measures were based on international standards, guidelines and
recommendations;
- SPS measures of other countries were accepted as  equivalent if these measures achieved the
level of protection appropriate to Vanuatu;
- SPS measures were based on an assessment of the risks to human, animal or plant life or health;
- SPS measures take into account the regional characteristics both of the areas from which
imported products originate and the areas for which they are destined;
- SPS measures do not arbitrarily or unjustifiably discriminate between different WTO Members
or between domestic and foreign suppliers; and
- relevant control, inspection and approval pro cedures comply with the provisions of the SPS
Agreement.WT/ACC/VUT/12
Page 24
100. The representative of Vanuatu stated that Vanuatu would apply the Agreement on Sanitary and
Phytosanitary Measures from the date of its acc ession without any transitional period.  The Working
Party took note of this commitment.
Trade-Related Investment Measures
101. The representative of Vanuatu said that Vanuatu applied no trade-related investment measures
proscribed under the GATT 1994.  Import duty relief for industries was not linked in any way to localcontent requirements.
102. The representative of Vanuatu said that Vanuatu  would not maintain any measures inconsistent
with the TRIMs Agreement and would apply the TRIMs Agreement from the date of accession withoutrecourse to any transitional period.  The Wo rking Party took note of this commitment.
State-Trading Entities
103. The representative of Vanuatu stated that of the enterprises listed in the section on State Owned
Enterprises and Privatization only the Vanuatu Commodities Marketing Board had exclusive rightsrelating to the import or export of goods.  Vanuatu had provided information on State-trading enterprises
in the format applicable to WTO Members, de tailing the operations of the VCMB, in document
WT/ACC/VUT/7, Annex III.  The VCMB  had been established in 1981 to buy, sell and stabilize prices
for copra, cocoa and kava.  The VCMB had sole purchasing rights on copra and cocoa for export.  It had
licensed 25 kava exporters and issued export licence s for kava against an annual fee of about US$400
(VT 50,000).
104. Until recently, all coffee produced by small-holders had been sold to the Tanna Coffee
Development Company (TCDC), but the TCDC had been  privatized and all its exclusive rights and
privileges revoked.  It was not a state trading en terprise.  Any company could now produce, export or
import coffee to or from Vanuatu.
105. In answer to a question, the representative of Vanuatu confirmed that Vanuatu intended to
notify the Vanuatu Commodity Marketing Board as a state-trading organization under Article XVII of
GATT 1994.
106. The representative of Vanuatu confirmed that it would apply its laws and regulations governing
the trading activities of State-owned enterprises and ot her enterprises with special or exclusive privileges
and would act in full conformity with the provisions  of the WTO Agreement, in particular Article XVII
of the GATT 1994 and the Understanding on that Article and Article VIII of the GATS.  He furtherWT/ACC/VUT/12
Page 25
confirmed that Vanuatu would notify any enterprise falling within the scope of Article XVII.  The
Working Party took note of these commitments.
Free Zones, Special Economic Areas
107. The representative of Vanuatu said that the Government's Council of Ministers had approved
the establishment of free industrial zones on several islands, including Santo, Efate, Malekula and Tanna
in September 1993.  However, no zones had been established to date.  UNIDO had completed afeasibility study of the project, and further study was required to determine whether the project wasviable.  The Government was proceeding with plans to establish a free trade zone on Santo Island, andwould establish an inter-ministerial committee empowered  to decide and resolve all issues related to the
free trade zone.
108. The representative of Vanuatu said that any free zones or special economic areas which it
established would be fully subject to the coverage of  its commitments in its Protocol of Accession to the
WTO Agreement and that Vanuatu would ensure enfo rcement of its WTO obligations in those zones or
areas.   In addition, goods produced in any such zones or areas under tax and tariff provisions that
exempt imports and imported inputs from tariffs and certain taxes would be subject to normal customs
formalities when entering the rest of Vanuatu, incl uding the application of tariffs and taxes.  The
Working Party took note of these commitments.
Government Procurement
109. The representative of Vanuatu said Vanuatu practised open tendering and competitive bidding
in the context of a small island economy.  The Fi nancial Regulations of the Republic of Vanuatu
(Chapter 22, Regulations 361, 364, 365 a nd 368) provided the guidelines for government procurement.
A Central Tender Board in the Depa rtment of Finance evaluated tende rs and awarded contracts.  The
Central Tender Board comprised the Director of Finance or his representative, the director of the
department procuring the goods or services, and a representative of the Ministry responsible for thedepartment procuring the goods or services.  All written contracts worth more than about US$24,000
(VT 3 million) required approval by the Attorney General before the contract was signed.  A minimum
of three written tenders were required for specific works or services exceeding about US$8,000(VT 1 million).  Notice of invitation to tender was given at least two weeks before the closing date,normally by advertisement in the national press.  The Financial Regulations contained no disputesettlement provisions; aggrieved individuals or co mpanies could resort to the judicial system.
110. The guidelines stipulated that for works or services worth about US$400 (VT 50,000) to about
US$8,000 (VT 1 million) at least three written quotati ons should be obtained wher ever possible, and theWT/ACC/VUT/12
Page 26
procurement order should be placed by the Accounting Office (normally the director of the department).
A minimum of two quotations were required fo r works or services not exceeding about US$400
(VT 50,000), and the procurement order could be placed by  senior department staff.  The guidelines also
stipulated that goods and services should be proc ured through the Governme nt Central Store wherever
possible.  The central store purchased stationery a nd other supplies used by the Government on a purely
commercial basis.  The Central Government Store did not sell to the public, or to non-governmental
entities.
111. Some other Members said that adoption of the disciplines of the Agreement on Government
Procurement would benefit Vanuatu and asked whether Vanuatu intended to accede to this Agreement.The representative of Vanuatu said that the financial regulations of Vanuatu did not permitdiscrimination against foreign suppliers, and with the very limited number of local tenderers such
practices would not even be technically possible.  This being so, neither Vanuatu nor members of WTO
would draw any additional benefits from Vanuatu ’s membership of this plurilateral Agreement.
Transit
112. The representative of Vanuatu said that little trade transited through Vanuatu, which therefore
had no need for specific regulations on the matter.  However, transit trade was allowed underinternational customs practices.
113. The representative of Vanuatu confirmed th at his Government would apply any laws,
regulations and practices governing transit operations and would act in full conformity with the
provisions of the WTO Agreement, in particular  Article V of the GATT 1994.  The Working Party took
note of this commitment.
Agricultural Policies
114. Vanuatu's commitments on agricultural tariffs, on domestic support and export subsidies for
agricultural products are in the Schedule of Con cessions and Commitments on Goods annexed to the
draft Protocol of Accession to the WTO re produced in the Appendix to this report.
115. The representative of Vanuatu said that agriculture played a dominant rôle in the economy.  The
main cash crop was copra.  Cocoa cultivation and beef production was growing in importance.  The beefindustry was concentrated on Espi ritu Santo, where Vanuatu's major slaughterhouse, constructed to
international standards, was located.
116. Vanuatu provided virtually no monetary grants to agricultural producers, but special incentives
were offered through the Business Licence Comm ittee and Customs Department.  These incentivesWT/ACC/VUT/12
Page 27
included exemption from business licence requireme nts for sellers and producers of agricultural
products, special loans at relatively low interest  rates from commercial banks, special exemptions
accorded to agricultural projects by the customs and tax authorities,
117. The Department of Agriculture provided a sm all subsidy of about US$0.4 (VT 50) per coconut
seedling.  Government policy had also been to provide small-holder producers of coffee with free
planting materials and a subsidy on the purchasing price.
118. The Vanuatu Commodities Marketing Board regulated the "beach" (farm-gate) price of copra
on an ad hoc basis by using surpluses generated from trading activities and transfers of LoméConvention funds under the commodity price stab ilization scheme (Stabex) of the European
Communities.  Since 1984, the VCMB had accumulated losses approaching US$20 million, butrelatively high world market prices for copra and cocoa in recent years had reduced the need for price
support to these sectors in Vanuatu.  In 1996, the Government had used approximately VT 100 million(US$900,000) as a once-off payment to support copra pr ices.  The VCMB was now obliged by statute to
fund its own activities without any subsidy from the Government.
Trade-Related Intellectual Property Regime
119. The representative of Vanuatu said that Vanua tu had for some time maintained two pieces of
legislation, governing patents and trademarks.  Pa tent legislation was based on the Registration of
United Kingdom Patents Act [Cap.80], providing that a patent registered in the United Kingdom was
similarly workable in Vanuatu.  The Registration of  United Kingdom Trade Marks Act [Cap.81] had the
same legal status in Vanuatu.  A trademark remained protected as long as such registration remained in
force in the United Kingdom.  Vanuatu had no legislation concerning copyright and related rights, theprotection of layout-designs (topographies) of inte grated circuits, geographical indications, industrial
designs, and trade secrets and undisclosed information.  Infringements of intellectual property rights had
so far been foreign to the legal system of Vanuatu, although courts had the authority to give orders andprovide remedies for holders of patents and trademarks.
120. Vanuatu would also have to examine the extent  to which amendments were also required in
related legislation, such as the Criminal Procedure Code and the Penal Code to  ensure conformity with
Article 61 of the TRIPS Agreement) and the Customs Act (to ensure that customs officers had adequate
legal authority to facilitate the protection of inte llectual property rights holders from counterfeits and
trade mark piracy).  Concerning enforcement, offi cers would need to be trained in several government
departments.  Most important was the training and recruitment of an officer in the Vanuatu Financial
Services Commission to be in charge of the da y-to-day implementation of patents and trademarksWT/ACC/VUT/12
Page 28
administration.  Other offices requiri ng training included the Department  of Customs, the Department of
Trade and the Police and Attorney-General’s chambers.  At present these key divisions lacked expertiseabout the obligations created under the TRIPS Agreement.  Vanuatu recognized that membership of theParis, Berne and WIPO Conventions would facilitate compliance with the TRIPs Agreement and would
consider the possibility of acceding to these.
121. The representative of Vanuatu said that his Government was making a major effort that would
ensure that legislation setting basic standards for th e protection of intellectual property giving effect to
the TRIPs Agreement would be transmitted to memb ers of the Working Party for comment, and would
be passed by Parliament by the time Vanuatu acceded to WTO.  Vanuatu had already transmitted lawsor draft laws on copyright, patents, trademarks, de signs, trade secrets and geographical indications.  A
draft law on layout designs of integrated circuits would be sent very soon.  Members of the Working
Party were invited to forward any comments on these laws and draft laws to the Government of Vanuatuso that these can be taken into account before they ar e presented to Parliament for final approval.  Given
the Parliament’s timetable, any comments  should be received by 31 December 1999.
122. The representative of Vanuatu said that the Government of Vanuatu needed a two-year
transitional period from the date of its accessi on to obtain technical assistance and equip the
administration to implement fully the obligations of the TRIPS Agreement.  In response to requests from
delegations for more specificity, the representative of Vanuatu said that his Government could not be
sure exactly how long it would take to obtain the necessary technical assistance.  He neverthelesspresented an Action Plan setting out details of the steps that still remained to be taken in order to achieve
this objective and a timetable for each.  This is contained in Table 2.
123. The representative of Vanuatu stated that legi slation on copyright and related rights, patents,
trademarks, industrial designs, geographical indicati ons, layout designs of integrated circuits, and
protection of undisclosed information ((trade secrets)  conforming to the requirements of the Agreement
on Trade-Related Intellectual Property Rights would be enacted by the date of Vanuatu’s accession to
the WTO.  Vanuatu would apply the Agreement on Trade-Related Intellectual Property Rights no laterthan two years after Vanuatu accedes to the WTO.  The Working Party took note of this commitment.
Policies Affecting Trade In Services
124. Negotiations took place on the basis of offers presented by Vanuatu, the results of which are
contained in Vanuatu’s Schedule of Specific commitme nts on Services annexed to its draft Protocol of
Accession reproduced in the Appendix to this report.WT/ACC/VUT/12
Page 29
125. The representative of Vanuatu said that tourism had accounted for 44 per cent of Vanuatu’s
receipts from services in 1998, followed by transportati on (20 per cent), financial services (6 per cent),
government services (6 per cent), miscellaneous business services (4 per cent) and communications (3per cent).
126. The Finance Centre of Vanuatu, protected by strict professional secrecy and the absence of
foreign exchange control and direct taxation, co ntributed significantly to national income and
government revenue.  Vanuatu had extensive secrecy provisions and did not participate in any taxtreaties.  The Government was committed to making Vanuatu the foremost tax haven and investmentcentre in the Pacific.  The financial service industry was supervised and regulated by the VanuatuFinancial Services Commission.  Precautionary checks were carried out prior to the issuance of a
banking licence.  Capital requirements differed for local and foreign banks (paid up capital and
unimpaired reserves of VT 50 million versus VT 2 00 million) to avoid "fly-by-night" banks, and to
create an incentive for the incorporation of banks within Vanuatu.  The Reserve Bank of Vanuatu was
preparing policy guidelines for capital adequacy ratios based on Basle risk-weighted asset methodology
which would treat banks incorporated locally or overseas in the same manner.
127. Exclusive suppliers or monopolies existed in telecommunications, electricity supply , water
supply and internal air transport.  Telecom Vanuatu Limited was the sole supplier of communicationservices.  The Government held one third of the shares of the company, the remainder was owned by
foreign investors.  Electricity and water servi ces were provided by Un ion Electrique du Vanuatu
Limited.  Vanair Limited was the sole supplier of domestic air services, while international flights wereshared between Air Vanuatu Limited, Solomo n Airline, Air Pacific and Air Caledonie.
128. With these exceptions, commercial presence of foreign services suppliers on the territory of
Vanuatu was largely unrestricted, and there were no pr ohibitions regarding the establishment of foreign
service suppliers.  Vanuatu maintained no numerical quotas or economic needs tests relating to thesupply of services.  Vanuatu maintained no prohib itions or limitations on consumption of services
abroad by its nationals.  Travelling abroad wa s subject to an airport departure tax of US$17.
129. Regarding the presence of foreign natural persons, the Labour Commissioner issued work
permits provided a post could not be filled by skilled local labour, in which case job training should `beprovided.  Companies were required to advertise all vacant positions in the local press, and if no suitablyqualified local candidate responded, a non-Vanuatu citizen could be hired.  Vanuatu has recently revised
its system for approving or refusing work permits to ensure transparency and full right of judicial
review.  Any foreign natural person could obtain a one-year residence permit against a minimuminvestment in Vanuatu of about US$40,000 (VT 5 million).WT/ACC/VUT/12
Page 30
130. The residence permit requirements did not apply for obtaining a licence to practice a profession.
A list of Acts constituting the regulatory regime  for business services was provided in document
WT/ACC/VUT/4 (pp. 44-45).  Approval  by professional associations was required for certain types of
services, notably for legal services (the Legal Prac titioners Board), medical and dental services (the
Medical Practitioners Board), engineering and archit ecture (the Survey Board), and accounting.  Cross-
border supply of legal services was allowed, but only  through an existing firm in Vanuatu.  Resident
foreign lawyers, graduated from an institution recognized by the Law Council and having undergonetwo-year post-graduate training in Vanuatu, coul d provide exactly the same services as domestic
lawyers.  There were no limitations on the access of foreign service providers in educational services.
Publication
131. The representative of Vanuatu provided inform ation to the Working Party on the publication of
laws and regulations.  All laws are published in the Official Gazette and do not come into force before
such publication.
132. The representative of Vanuatu stated that, at the latest from the date of accession, all laws and
other normative acts related to trade would be publis hed in the Official Gazette promptly and no law,
rule, etc. related to international trade would beco me effective prior to such publication.  He further
stated that Vanuatu would fully implement Artic le X of the GATT 1994 and the other transparency
requirements in WTO Agreements requiring notifica tion and publication.  The Working Party took note
of this commitment.
Notification
133. The representative of Vanuatu said that at the latest upon entry into force of the Protocol of
Accession, Vanuatu would submit all initial notifications required by any Agreement constituting part ofthe WTO Agreement.  Any regulations subsequently enacted by Vanuatu which gave effect to the lawsenacted to implement any Agreement constituting pa rt of the WTO Agreement would also conform to
the requirements of that Agreement.  The Wo rking Party took note of this  commitment.
Trade Agreements
134. The representative of Vanuatu said that Vanuatu’s exports benefitted from the Sparteca
Agreement with Australia and New Zealand and the Lomé Convention with the European Union.
135. The Melanesian Spearhead Group (MSG) Trade Ag reement provided for certain goods to be
traded free of duty between Vanuatu, Solomon Islands  and Papua New Guinea.  In September 1994, the
MSG States had agreed that only three products from  each member would be covered in the initial phaseWT/ACC/VUT/12
Page 31
of the agreement (beef and beef products, tea and can ned tuna).  MSG Heads of Government had agreed
in June 1999 to a timetable of implementation of fre e trade in goods.  PNG and Fiji would move to a
negative list by 2003, at which time trade in substant ially all goods would be free of duty.  The two
least-developed countries in the MSG, Vanuatu a nd Solomon Islands would implement these obligations
by 2005.  Imports from MSG countries were subject to all domestic taxes.  The Government of Fiji was
notifying the MSG Trade Agreement to the Committee on Trade and Development on behalf of theMelanesian Spearhead Group.  Vanuatu said that th e Agreement was in conformity with the relevant
provisions of WTO.
136. A bilateral trade agreement with Fiji was set up by the Prime Ministers of the two countries in
July 1999.  The objective of the Agreement is to impr ove the trade relations between the two countries
by facilitating the flow of goods. The Agreement is consistent with Article XXIV of GATT 1994.  As afull Member of WTO, Fiji would notif y the text of the Agreement to WTO.
137. Vanuatu had signed agreements on technical cooperation with Fiji and Papua New Guinea, a
technical aid cooperation agreement with New Cale donia, and an agreement on economic and technical
cooperation with China in 1992.  Vanuatu had concluded air services agreements with Fiji and Australia.
138. The representative of Vanuatu stated that his Go vernment would observe the provisions of the
WTO including Article XXIV of the GATT 1994 and Ar ticle V of the GATS in its trade agreements,
and would ensure that the provisions of these WT O Agreements for notification, consultation and other
requirements concerning free trade areas and custom s unions of which Vanuatu was a member were met
from the date of accession.  The Working Party took note of these commitments.
CONCLUSIONS
139. The Working Party took note of the explanati ons and statements of Vanuatu concerning its
foreign trade regime, as reflected in this report.  The Working Party took note of the commitments given
by Vanuatu in relation to certain specific matters which are reproduced in paragraphs 22, 25, 27, 32, 47,50, 53, 60, 66, 69, 72, 74, 80, 83, 87, 100, 102, 106, 108, 113, 123, 132, 133, and 138 of this report.  TheWorking Party took note that these commitments had been incorporated in paragraph 2 of the Protocol
of Accession of Vanuatu to the WTO.
140. Having carried out the examination of the foreig n trade régime of Vanuatu and in the light of
the explanations, commitments and concessions made  by the representative of Vanuatu, the Working
Party reached the conclusion that Vanuatu be invited to accede to the Marrakesh Agreement
Establishing the WTO under the provisions of Articl e XII.  For this purpose, the Working Party hasWT/ACC/VUT/12
Page 32
prepared the draft Decision and Protocol of Accessi on reproduced in the Appendix to this report, and
takes note of Vanuatu's Schedule of Specific Comm itments on Services (see page 40 of the present
document) and its Schedule of Concessi ons and Commitments on Goods (document
WT/ACC/VUT/10/Add.1)  that are annexed to the Protoc ol.  It is proposed that these texts be adopted
by the General Council when it adopts the report.  When the Decision is adopted, the Protocol of
Accession would be open for acceptance by Vanuatu wh ich would become a Member thirty days after it
accepts the said Protocol.  The Working Party agreed, therefore, that it had completed its workconcerning the negotiations for the accession of Vanuatu to the Marrakesh Agreement Establishing theWTO.WT/ACC/VUT/12
Page 33
ANNEX 1
Laws, Regulations and Other Information Provided to the Working Party by Vanuatu
- Comprehensive Economic Reform Programme (draft);
- Summary of Legislative Reforms Necessary as a Result of Accession to the WTO;
- Customs Import and Export Duty Tariff 1995/1996;- Duty concessions guidelines (Schedule III Application Form);
- The Dues, Fees and Charges Order No. 14 of 2 October 1982;
- The Import of Motor Vehicles (Control) Act No. 30 of 1992;
- Explanation of the Prohibited Plants List prep ared by the Department of Agriculture and
Horticulture, Plant Protection and Quarantine Division;
- The Business Licence Act (Chapter 173), Schedule 1 - Rates of Business Fees;
- Business Licence (Localization of Businesses) Order No. 79 of 1983;- Amendment to Business Licence (Localization of Businesses) Order No. 79, of 1993;
- Decentralization and Local Government Regions Act No. 1 of 1994;
- Description of the structure and competence of the Land Surveyors Board;
- The Vanuatu Government Financial Regulations regarding Purchase of Goods and Services,
Chapter 22;
- Trade Agreement Among the Melanesian Spearhead Group Countries of 23 June 1993;
- Extracts of the Laws of the Republic of Vanuatu concerning Customs, Road Traffic (Control),
Export Duties, Obscenity, Agricultural Fees , Import Duties (Consolidation), Hotels and
Licensed Premises Tax, Gaming (Control), Busi ness Licence, Import of Goods (Control),
Video Cassettes (Tax on Hiring), Cheque Tax, Rent Taxation, Amusement Machines Tax,Banking, Immigration, Stamp Duties, Trust Companies, Airport Departure Tax (International
Flights), Electricity Supply, Registration of United Kingdom Trade Marks, Registration of
United Kingdom Patents, Insurance, Price Control, Partnership, Passports, Citizenship
(Entitled Persons), Citizenship, Coastal Trading (Control), Central Bank of Vanuatu,
International Financial Institutions, Diplomatic Privileges & Immunities,Telecommunications, Post Office, Labour (Work Permits), and Companies;
- Trade Data 1994-96 (diskette);
- Statistics Office:  Vanuatu National Agriculture Census 1994 - Main Report;
- Statistics Office:  Copra and Cocoa, Annual Report 1994;
- Statistics Office:  Statistical Indicators, October-December 1995;  and
- Statistics Office:  Detailed Commodity Tables of Overseas Trade of Vanuatu, Annual Report
1993.
- Foreign Investment Act No. 15 of 1998
- Foreign Investment (Ame ndment) Act No. 1 of 1999
- Bill for the Business Licence Act No. 19 of 1998
- Bill for the Customs Act No. - of 1999
- The Duty Exemption Policy and application form for exemption of customs duty- Import of Goods (Miscellaneous Control) (Repeal) Order No. 13 of 1999
- Bill for the Import Duties (Consolidation) (Customs Valuation Amendment) Act No. - of
1999
- Bill for the Value Added Tax Act No.l2 of 1998 and Explanatory Note
- Independent assessment of Vanuatu Quarantine & Inspection Services (31 August 1999)- Animal Importation & Quarantine Act (Cap.201), Revised Edition 1988 and Regulations
under the Act
- Schedules setting out quarantine requirements for the importation of selected products into
Vanuatu: No.45, goats from Australia; No. 46, caprine embryos from the Republic of South
Africa: and No. 47, bovine embryos from USA
- Conditions for vessels carrying live animals
- Decision Pathway for Pest Risk Assessment for Pacific Island CountriesWT/ACC/VUT/12
Page 34
- Plant Protection Act No. 14 of 1997 and Manual for its implementation dated 30 September
1997
- Vanuatu Quarantine & Inspection Services - import documentation
- Bill for the Copyright Act No. - of 1999 (draft as at 28 August 1999)
- Bill for Import Duties (Consolidation) (Customs Valuation Amendment) of 1999 and
Explanatory Note
- Bill for the Patents Act of 1999 and Explanatory Note
- Bill for the Copyright Act of 1999 and Explanatory Note
- Bill for the Trademarks Act of 1999 and Explanatory Note
- Bill for the Designs Act of 2000 and Explanatory Note.
- Bill for the Trade Secrets Act No. __ of 1999 (and ExplanatoryNote)
- Bill for the Geographical Indications (Wine) Act No. __ of 2000 (and Explanatory Note).WT/ACC/VUT/12
Page 35
ANNEX 2
- Reserved Investments
- Kava bars.
- Hotels and motels where the amount invested is less than 10 million Vatu in Port Vila and
Luganville and less than 5 million Vatu elsewhere.
- General retail and wholesale merchandising if the investment is less than 10 million Vatu.
- Open air vendors.
- Mobile shops.
- Door to door sales.
- Road transport operators- public taxi and bus services.
- Category F of Business Licensing Act of less than 5 million Vatu turnover per year.
- Export of kava in root form.  However, a foreig n investor can export kava in root form if the
foreign investor has invested, or intends to invest, at least 5 million Vatu in any of the
following: the transport of kava, the transforma tion of kava or the international marketing of
kava.
- Coastal fishing, other than sports, recreational and game fishing.WT/ACC/VUT/12
Page 36
- 
APPENDIX
ACCESSION OF VANUATU
Draft Decision
The General Council,
Having regard to the results of the negotiations directed towards the establishment of the terms
of accession of the Republic of Vanuatu to the Marrakesh Agreement Establishing the World Trade
Organization and having prepared a Pr otocol for the Accession of Vanuatu,
Decides, in accordance with Article XII of th e Marrakesh Agreement Establishing the World
Trade Organization, that the Republic of Vanuatu may accede to the Marrakesh Agreement Establishing
the World Trade Organization on the te rms set out in the said Protocol.WT/ACC/VUT/12
Page 37
DRAFT PROTOCOL OF ACCESSION OF VANUATU
TO THE MARRAKESH AGREEMENT ESTABLISHING
 THE WORLD TRADE ORGANIZATION
The World Trade Organization (hereinafter referred to as the "WTO"), pursuant to the approval
of the General Council of the WTO accorded under Article XII of the Marrakesh Agreement
Establishing the World Trade Organization (hereinaft er referred to as "WTO Agreement"), and the
Republic of Vanuatu (hereinafter referred to as "Vanuatu"),
Considering that Vanuatu is a least developed c ountry with all relevant rights to special and
differential rights,
Taking note of the Report of the Working Party on the Accession of Vanuatu to the WTO in
document WT/ACC/VUT/..... (hereinafter referre d to as the "Working Party Report"),
Having regard to the results of the nego tiations on the accession of Vanuatu to the WTO,
Agree as follows:
Part I - General
1. Upon entry into force of this Protocol, Vanuatu accedes to the WTO Agreement pursuant to
Article XII of that Agreement and thereby becomes a Member of the WTO.
2. The WTO Agreement to which Vanuatu accedes shall be the WTO Agreement as rectified,
amended or otherwise modified by such legal instrume nts as may have entered into force before the date
of entry into force of this Protocol.  This Protoc ol, which shall comprise the commitments referred to in
paragraph 139 of the Working Party Report, shall be an integral part of the WTO Agreement.
3. Except as otherwise provided for in the paragr aphs referred to in paragraph ... of the Working
Party Report, those obligations in the Multilatera l Trade Agreements annexed to the WTO Agreement
that are to be implemented over a period of time star ting with the entry into force of that Agreement
shall be implemented by Vanuatu as if it had accepted that Agreement on the date of its entry into force.
4. Vanuatu may maintain a measure inconsistent with paragraph 1 of Article II of the GATS
provided that such a measure is recorded in the list of  Article II Exemptions annexed to this Protocol and
meets the conditions of the Annex to  the GATS on Article II Exemptions.
Part II - Schedules
5. The Schedules annexed to this Protocol sh all become the schedule of Concessions and
Commitments annexed to the General Agreement on Tariffs and Trade 1994 (hereinafter referred to asthe "GATT 1994") and the Schedule of Specific Comm itments annexed to the General Agreement on
Trade in Services (hereinafter referred to as "GAT S") relating to Vanuatu.  The staging of concessions
and commitments listed in the Schedules shall be impl emented as specified in the relevant parts of the
respective Schedules.WT/ACC/VUT/12
Page 38
6. For the purpose of the reference in paragraph 6(a) of Article II of the GATT 1994 to the date of
that Agreement, the applicable date in respect of the Schedules of Concessions and Commitments
annexed to this Protocol shall be the date of entry into force of this Protocol.
Part III - Final Provisions
7. This Protocol shall be open for acceptance, by  signature or otherwise, by Vanuatu until .........
8. This Protocol shall enter into force on the thirtieth day following the day of its acceptance.
9. This Protocol shall be deposited with the Dire ctor-General of the WTO.  The Director-General
of the WTO shall promptly furnish a certified copy of this Protocol and a notification of acceptance
thereto pursuant to paragraph 7 to each member of the WTO and Vanuatu.
10. This Protocol shall be registered in accordance with the provisions of Article 102 of the Charter
of the United Nations.
11. Done at Geneva this ... day of  .... one thou sand nine hundred and ninety ....., in a single copy
in the English, French and Spanish languages each text being authentic, except that a Schedule
annexed hereto may specify that it is authentic in only one or more of these languages.WT/ACC/VUT/12
Page 39
ANNEX
SCHEDULE - REPUBLIC OF VANUATU
Part I - Goods
See WT/ACC/VUT/10/Add.1
Copies are available in electronic format upon request from the Secretariat
(Accessions Division Room 1126 or accessions@wto.org)WT/ACC/VUT/12
Page 40Part II - Draft Schedule of Specific Commitments on Services
List of Article II MFN Exemptions
Modes of Supply :  1) Cross-border Supply    2) Consumption abroad    3) Commercial Presence    4) Presence of Natural Persons
Sector Limitations of Market Access Limitations on National
TreatmentAdditional commitments
I HORIZONTAL COMMITMENTS
ALL SECTORS INCLUDED IN THIS
SCHEDULE3) Government approval is required for  all
foreign investors under Foreign
Investment Act No. 15 of 199813) Subject to limitation on
purchase of real estate.
The Vanuatu Constitution prohibitsfreehold ownership of land except for
indigenous Ni-Vanuatu who acquired land
in accordance with customary law.The Vanuatu Constitution
prohibits freehold ownership
of land except for indigenous
Ni-Vanuatu who acquired
land in accordance with
customary law.
4) Unbound except for measures affecting the
entry and temporary stay of natural persons
with managerial and technical skills which
are in short supply in Vanuatu and fall
within the following categories:
i.   business managers
ii.  intracorporate transferees
iii.  professionals under  employment
contract
Vanuatu provides a minimum of fourmonth entry for bona fide business
visitors and service sellers
2
                                                     
1 The Government of Vanuatu currently requires foreigners to invest a minimum of US$ 40,000 (VT 5 million) in order to establish  a business in Vanuatu. Vanuatu
reserves the right to raise this minimu m in line with general cost increases.
2 Service sellers are defined for the purpose of this offer as natural persons who are seeking temporary entry for the purpose o f negotiating for the sale of services for
that service supplier, where those representatives will not be engaged in making direct sales to the general public.WT/ACC/VUT/12
Page 41Modes of Supply :   1)    Cross-border Supply    2) Consumption abroad    3) Commercial Presence    4) Presence of Natural Pers ons
Sector Limitations of Market Access Limitations on National Treatment Additional commitments
II.  SECTOR SPECIFIC COMMITMENTS
1.  BUSINESS SERVICES
A.  Professional Services
a)  Legal services, home & host country
law , including international law
(CPC861)1) Supply must be through a domestic
law firm
2) None3) Commercial presence must take the
form of sole proprietorship or
partnership.
4) Unbound except as indicated in 
horizontal section1) Supply must be through a domestic
law firm
2) None3) Commercial presence must take the
form of sole proprietorship or 
partnership
4) Unbound except as indicated in 
horizontal section
b)  Accounting, auditing andbookkeeping services (CPC 862)1) None
2) None
3) None
4) Unbound except as indicated in the 
horizontal section1) None
2) None
3) None
4) Unbound except as indicated in the
horizontal section
d)  Architectural Services  CPC 8671) 1) None
2) None
3) None
4) Unbound except as indicated in the 
horizontal section1) None
2) None
3) None
4) Unbound except as indicated in the
horizontal section
e)  Engineering Services   (CPC 8672) 1) None
2) None
3) None4) Unbound except as indicated in the 
horizontal section1) None
2) None
3) None4) Unbound except as indicated in the
horizontal section
i)  Veterinary Services   (CPC 932) 1) None
2) None3) None
4) Unbound except as indicated in the 
horizontal section1) None
2) None3) None
4) Unbound except as indicated in the
horizontal sectionWT/ACC/VUT/12
Page 42Modes of Supply :   1)    Cross-border Supply    2) Consumption abroad    3) Commercial Presence    4) Presence of Natural Pers ons
Sector Limitations of Market Access Limitations on National Treatment Additional commitments
3.  CONSTRUCTION AND RELATED ENGINEERING SERVICES
A.  General Construction Work for
Buildings  (CPC 512)1) Unbound∗
2) None
3) None except brick layers, electrician,
painters and decorators, jobbing
plumbers, masons, plumbers, welders,fitters, turners or other artisans where
the number of full time employees per
year is less than 7
4) Unbound except as indicated in the
horizontal section1) None
2) None
3) None
4) Unbound except as indicated in
the horizontal section
B.  General Construction for CivilEngineering (CPC 513)1) Unbound
*
2) None
3) None
4) Unbound except as indicated in the
horizontal section1) None
2) None3) None
4) Unbound except as indicated in
the horizontal section
5. EDUCATIONAL SERVICES
(CPC 921-929) 1)   None
2)   None3)  Subject to approval by the Vanuatu
Government
4) Unbound except as indicated in the
horizontal commitments1) None
2) None3)  Subject to approval by the
Vanuatu Government
4) Unbound except as indicated in
the horizontal commitments
6.  ENVIRONMENTAL SERVICES
940 (CPC 1-3) 1)   None
2)   None
3)   None
4) Unbound except as indicated in the
horizontal commitments1) None
2) None
3) None
4) Unbound except as indicated in
the horizontal commitments
                                                     
∗ Unbound due to lack of technical feasibilityWT/ACC/VUT/12
Page 43Modes of Supply :   1)    Cross-border Supply    2) Consumption abroad    3) Commercial Presence    4) Presence of Natural Pers ons
Sector Limitations of Market Access Limitations on National Treatment Additional commitments
7.  FINANCIAL SERVICES
A. All Insurance and related services
(Part of CPC 812)1) None
2) None
3) None
4) Unbound except as indicated in
horizontal schedule1) None
2) None
3) None
4) Unbound except as indicated in
horizontal schedule
B.  Banking and other related services(CPC 811-813)1) None
2) None
3) Banks must comply with provisions of
relevant banking legislation – foreign banksare required to have paid up capital and
unimpaired reserves of VT200 million
compared to VT50 million in the case of
local banks.
4) Unbound except as indicated in
horizontal schedule1) None
2) None
3) Banks must comply with
provisions of relevant bankinglegislation - foreign banks are required
to have paid up capital and unimpaired
reserves of VT200 million compared
to VT50 million in the case of local
banks.4) Unbound except as indicated in
horizontal schedule
8.  HEALTH RELATED AND SOCIAL SERVICES
A. Hospital Services (CPC 9311) 1) None
2) None
3) None4) Unbound except as indicated in the
horizontal section1) None
2) None
3) None4) Unbound except as indicated in
the horizontal section
C.  Social Services (CPC 933) 1) None
2) None
3) None
4) Unbound except as indicated in the
horizontal section1) None
2) None
3) None
4) Unbound except as indicated in
the horizontal sectionWT/ACC/VUT/12
Page 44Modes of Supply :   1)    Cross-border Supply    2) Consumption abroad    3) Commercial Presence    4) Presence of Natural Pers ons
Sector Limitations of Market Access Limitations on National Treatment Additional commitments
9. TOURISM AND TRAVEL RELATED SERVICES
A.  Hotels and Restaurants
(CPC 641)1) None
2) None
3) None except hotels with less than 10
beds, restaurants with less than 20
seats, takeaway retail food outlets andkava bars.
4) Unbound except as indicated in the
horizontal section1) None
2) None
3) None except hotels with less than
10 beds and restaurant with less
than 20 seats.
4) Unbound except as indicated in
the horizontal section
10. TRANSPORT SERVICES
C.  Air Transport Services
d) Maintenance and repair of aircraft 1) None
2) None
3) None
4) Unbound except as indicated in the
horizontal section1) None
2) None
3) None
4) Unbound except as indicated in
the    horizontal section
Final List of Article II (MFN) Exemptions
Sector or Sub-Sector Description of measure indicating its
inconsistency with Article IICountries to which the measure
appliesIntended Duration Conditions creating the need
for the exemption
All sectors Citizens and permanent residents of
Melanesian Spearhead GroupCountries may be granted a waiver
from the normal investment and
right of temporary sojourn
obligations of Vanuatu law.Papua New Guinea, Solomon
Islands, Fiji and New CaledoniaIndefinite To facilitate the regional
economic integration of theMelanesian states.
__________