WT/TPR/S/80 Trade Policy Review
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III. TRADE POLICIES BY MEASURE
(1) INTRODUCTION
1. Since the mid 1990s, Madagascar has undertaken significant efforts to reform its economy
and create a market driven environment attractive to foreign investment.  Its trade reforms have been
comprehensive;  exchange controls and quantitative restrictions on imports have been eliminated,
apart from those arising from the application of international conventions and those maintained forreasons of health and security.  A programme of import inspection and valuation is in place under a
contract awarded to Bureau Veritas.  Export restrictions in almost all areas have also been eliminated,
as have foreign exchange controls.
2. In accord with the Cross-Border Initiative (Chapter II(5)(iii)(c)), in 1999, the National
Assembly of Madagascar simplified the structure of the MFN tariff by organizing rates into fourbands, with a minimum of zero and a maximum of 30%.  Madagascar's recent streamlining of its tariff
also contributed to a reduction of its average tariff by two percentage points to 6% (excluding the
import tax) in 2000.  The simple average MFN tariff is 16.2% when the import tax is included.  Tariff
revenues continue to be a significant portion of Government revenue, accounting on average for over
50% in the past decade (Table III.1).  The tariff structure is somewhat escalatory.
Table III.1
Percentage of total tax revenue derived from import taxes, 1990-99
Year Share in government revenue
(%)
1990 59.8
1991 57.6
1992 52.2
1993 50.9
1994 48.2
1995 56.6
1996 55.1
1997 55.9
1998 59.2
1999 58.2
Source : Malagasy authorities.
3. Madagascar has no legislation on anti-dumping, countervailing, and safeguard measures.  The
country's competition policy is codified in various statutory instruments dating back to the 1970s.  In1994, the Government sponsored a conference on competition policy, which concluded with the goal
of formulating and adopting a new policy by 1996.  Madagascar is making progress towards full
implementation of WTO norms on intellectual property protection, although limited resources for
organization and enforcement hamper efforts.  The Government will submit a proposed new statute to
the National Assembly during its next session which is intended to conform to the TRIPS Agreement.
(2) M
EASURES DIRECTLY AFFECTING IMPORTS
(i) Registration and documentation
4. Prior to importation, importers must submit to their commercial bank an import data file
(Fiche Statistique d 'Importation)  and a proforma invoice.  Copies of these documents must also be
provided to the Ministry of Trade for informati on purposes.  The following documents are required
for commercial shipments to Madagascar:  commercial invoice;  bill of lading or airway bill;
insurance certificate;  packing list;  certificate of origin;  and certificate of Bureau Veritas inspection.Madagascar WT/TPR/S/80
Page 25
(ii) Inspection, customs valuation, and customs clearance
5. The Malagasy authorities have had preshipment inspection contracts with Bureau Veritas
Corporation since 1 January 1991.  The last contract, which (according to the authorities) will not be
renewed, expires in April 2001.  Services provided by Bureau Veritas include quality and quantity
inspections;  import eligibility;  origin and price verification;  customs codification and verification;
customs valuation;  and assessment of import duties.  Bureau Veritas is responsible for inspecting allimports worth US$1,000 or more.
6. The following imported goods are exempt from preshipment inspection requirements:
- supplies for the use of diplomatic missions, and international organizations of which
Madagascar is a member;
- supplies for the use of organizations recognized by government decree as serving the
public;
- items for the purpose of establishing a residence, or the transfer of a business or
industry;
- non-commercial parcels sent by post or by air;
- personal effects of tourists;
- inherited items;
- gifts for the use of twinned communities;  and
- extraordinary imports for use as aid in connection with natural disasters.
7. Preshipment inspection (PSI) is carried out at the point of embarkation.  The value, origin,
quantity, and quality of the goods are verified prior to shipment.  Upon successful completion of the
inspection procedures, a Certificate of Inspection (Certificat d'inspection, CDI) is issued.  The
importer is required to complete an information statement concerning the goods imported (Fiche de
Renseignement à l'Importation, FRI).
8. PSI is compulsory on all imports equal to or exceeding the value of US$1,000, which must be
subjected to a request for import verification (DVI) established by the VERITAS/BIVAC agency of
Antananarivo or Tamatave.  The DVI is based on information supplied by the importer on the import
statement (FRI).
9. The FRI must be attached to the original proforma invoice (plus two copies) giving precise
details of the transaction with a description of all the goods concerned.  The importer receives a copy
of the DVI following the registration of the FRI.  The Antananarivo VERITAS/BIVAC agency then
sends the inspection order to the exporting country's VERITAS agency.  After receiving the DVI
information sheet, the exporting country's VERITAS agency inspects the merchandise before loading.
Any payment to the bank concerning the commercial transaction must be accompanied by the
commercial invoice, certified by the VERITAS/BIVAC agency.
10. Twenty-four hours after the granting of the commercial invoice, the Antananarivo
VERITAS/BIVAC agency issues a CDI, which includes details concerning the dealings as well as the
duties and taxes assessed on the imported goods so that the total estimated taxes and duties payable
are clearly shown.WT/TPR/S/80 Trade Policy Review
Page 26
11. The importer then contacts the Antananarivo VERITAS/BIVAC agency or the Tamatave
VERITAS/BIVAC agency (if he is clearing customs there) to obtain the CDI.  The importer presents
the CDI to the cash counter of the customs clearance office and settles the amount of taxes and duties;
the procedure is the same where customs credit is concerned.  However, the amount of credit
available is shown on the CDI.  Finally, the importer fills in a customs declaration form, which is left
at the appropriate customs office.  In principle, inspection at destination is allowed once;  subsequentapplications (by the same importer) for destination inspection of shipments are rejected.
12. Madagascar uses the Brussels definition of value (BDV), which corresponds to the "normal"
price of the goods, i.e., the price which, it is considered, these goods would have been able to fetch in
the place and at the time they are declared, on full competition terms, between a buyer and seller who
are independent.  Correction of customs value is gove rned by Article 24 of the Customs Code.  Tariffs
are applied to the c.i.f. value of the goods.  Madagascar will use the valuation method based on the
transaction value as from 17 November 2000.
13. Importers are not required to use the services of clearing agents.  The following duties and
taxes are assessed on imports:  customs duties, ranging from zero to 30%;  import tax, ranging from
zero to 30%;  excise duties, ranging from zero to over 100%;  value-added tax, set at 20%;  a customsstamp duty of 1%;  and an import statistics tax of 2%.
14. Madagascar applies minimum import prices to used pneumatic tyres, second-hand vehicles
and auto parts, scrap aluminum, second-hand clothes, and certain fabrics.
1  Minimum prices on these
goods are maintained in order to promote the Malagasy economy and its local industries, as well as to
guarantee the collection of customs revenues on such goods.
(iii) Tariffs
(a) Nature and level of MFN tariffs
15. Madagascar grants at least most-favoured-nation (MFN) treatment to all its trading partners.
It does not apply any seasonal duties, tariff quotas, or variable levies.  Customs tariffs  are
ad valorem .2  In addition to the customs tariff, Madagascar also levies an import tax on over 80% of
tariff lines (4,876 lines) at rates ranging from zero to 30%;  the most frequent rates are 5% and 10%.
The import tax was established in 1960.  Other duties and taxes, including internal taxes (e.g. VATand excise duties) are also levied on imports (section (ii) above).  No distinction is made between
domestic and imported products in levying internal taxes.
16. The simple average of import duties, calculated on Madagascar's tariff schedule of 6,015 lines
(HS eight-digit level) is 6%.  Rates range from zero to 30%.  When the import tax is included, the
average rises to 16.2% (Chart III.1).  Of Madaga scar's 6,015 tariff lines, 27 bear the zero rate.
Madagascar has undertaken a comprehensive import duty reform.  The most recent tariff schedule was
adopted on 26 February 2000;  the most frequent tariff rates are 5% (around 45% of tariff lines) and
30% (Chart III.2).  The Government intends to eliminate the maximum rate of 30% in the future.
                                                     
1 Minimum prices on used tyres, used vehicles an d auto parts, and aluminium products, have been in
effect since 1996;  minimum prices on used clothing and fabric became effective in 2000.
2 There are 19 tariff lines bearing specific rates for the imposition of a tax on petroleum products.Madagascar WT/TPR/S/80
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05101520253035Chart III.1
Applied MFN tariff rates, by HS section, 2000
Per cent
Averages include the import tax.
WTO Secretariat estimates, based on data provided b y the Mala gasy authorities.Note:
Source :Average
MFN rate
16.2%
17. Madagascar's tariffs have a standard deviation of 7%, indicating that general import duties do
not vary greatly from product to product.  With the inclusion of the import tax, the standard deviation
is 11.2% (Table III.2).
18. The applied tariff structure is somewhat escalatory, in particular for products such as textiles
and leather;  wood and wooden furniture;  paper, printing and publishing;  and basic metals
(Chart III.3).  As a result, many processed products face a higher effective rate of protection (ERP)
along the processing chain, providing protection for hi gher-level processing activities.  Overall, the
average tariff for finished goods is 19%, while the rate for primary products is 15%, and that for semi-
processed goods is 11.9%.3
                                                     
3 These averages include the import tax.  Without the import tax, the average tariff levied on finished
goods would be 7.3%, on semi-processed goods 4.9% and on raw materials 3%.WT/TPR/S/80 Trade Policy Review
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(3.1%)(35.5%)
(0.0%)(44.6%)
(0.0%)(16.8%)
(0.1%)
05001,0001,5002,0002,5003,000
D u t y  f r e e 5 1 01 52 02 53 00.010.020.030.040.050.060.070.080.090.0100.0Chart III.2
Applied MFN tariff distribution, 2000
Number of tariff lines
Figures include the import tax.
WTO Secretariat estimates, based on data provided b y the Mala gasy authorities.Note:
Sourc e:Per cen t
Number of lines (% of total)
Cumulative per cent
Table III.2
Main features of Madagascar's MFN tariff, 2000(Per cent)
Simple average Range Standard deviationa
Customs tariffs, all tariff lines 6 0-30 7.0
Customs tariffs plus the import tax, all tariff lines 16.2 5-30 11.2
By sectorb
WTO agriculturec5.6(19) 0-20 4.9
WTO non-agriculture (excl. petroleum) 6.1(15.7) 0-30 7.3
By ISIC (Rev. 2)
Agriculture, hunting, forestry and fishing 4.1(17.7) 0-20 5.5
Mining and quarrying 1.1(7.5) 0-10 2.9
Manufacturing 6.2(16.2) 0-30 7.1
By degree of processingb
First stage of processing 3(15) 0-20 4.9(11.7)
Semi-processed products 4.9(11.9) 0-30 8.9(10.5)
Fully-processed goods 7.3(19) 0-30 5.7(10.7)
a The standard deviation measures the absolute dispersion of a distribution.
b Figures in parenthesis include the import tax.
c Annex 1 of the WTO Agreement on Agriculture defines the scope of agriculture as HS Chapters 01 to 24 less fish and fish
products (Chapter 3), plus selected items from Chapters 29, 33, 35, 38, 41, 43, 50, 51, 52, and 53.
Source : WTO calculations, based on data provided by Malagasy authorities.Madagascar WT/TPR/S/80
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05101520253035
Food, beverages 
and tobaccoTextile 
and 
leatherWood and
wooden furniturePaper, printing 
and
 publishingChemicals Non-metal
mineral productsBasic 
metal Fabricated metal
products,
machineryOther
manufacturingPer centChart III.3
Tariff escalation by 2-digit ISIC division, 2000
Figures include the import tax.
WTO Secretariat calculations, based on data provided b y the Mala gasy authorities.Note:
Source :First stage of processing
Semi-processed
Fully processedAverage
MFN rate
16.2%
(b) Tariff bindings
19. Madagascar bound duties at a ceiling rate of 30%, and other taxes at 250%, on imports of
agricultural products (as defined in Annex I of  the WTO Agreement on Agriculture) and of chemical
products (HS Chapters 28 and 29).  Bindings cover 23.7% of total tariff lines.
(c) Other duties and taxes
20. An excise duty is levied on a variety of domestic goods and equivalent imported products
under the Excise Tariff Ordinance.  Products affected are primarily petroleum, alcoholic and non-
alcoholic beverages, and tobacco products.
(d) Tariff preferences
21. Madagascar grants preferential tariff treatment to imports originating from members of the
Common Market for Eastern and Southern Africa (COMESA).  As at 31 October 2000, Madagascar
and eight other COMESA members have completely e liminated customs tariffs (on a reciprocal basis)
on intra-regional trade (Chapter II(5)(iii)(a)).  Likewise, Madagascar and Mauritius have phased out
customs tariffs on their bilateral trade;  other members of the Indian Ocean Commission are expected
to follow suit (Chapter II(5)(iii)(b)).WT/TPR/S/80 Trade Policy Review
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(e) Tariff and tax exemptions
22. Following the elimination of a large number of exemptions under the value-added tax (VAT)
and other levies, there are no significant tariff and tax exemptions.  The elimination of exemptions
resulted in a strengthening of tax and customs revenue collections.  However, its impact on the level
of revenue from import duties and taxes has been somewhat mitigated by reduction of the duties and
taxes under regional agreements.
(iv) Rules of origin
23. Rules of origin exist, for preferential treatm ent purposes, in the trade agreements to which
Madagascar is a signatory:  for example, Madagascar follows COMESA rules of origin
(Chapter II(5)(iii)(a)). There are also special rules of origin pertaining to Madagascar's membership in
the Indian Ocean Commission (IOC).
24. In the framework of the Cotonou Agreement, complete processing (goods entirely produced
on the spot), or adequate processing (change of tariff position) of a product, confers as place of origin
the ACP country in which the processing took place (Chapter II(5)(iv)).
(v) Anti-dumping, countervailing, and safeguard measures
25. Madagascar does not currently have any national legislation on anti-dumping, countervailing,
and safeguards measures.  Officials indicate that the Government is studying these issues and may
enact relevant legislation in the future.
(vi) Prohibitions, quantitative restrictions, and licensing
26. Madagascar maintains a limited number of import restrictions.  Restrictions currently in force
are retained for reasons of health, security or morals, and concern products such as arms, explosives,
and radioactive products.  Import restrictions also apply to products considered by the Government to
be strategic (e.g. vanillin and precious stones).  Importation of all these products is either prohibited orrequires prior authorization by the relevant Ministry (e.g. Ministry of Defence for arms and
explosives;  Ministry of Energy and Mines for precious stones).
27. A prior authorization is also required for imports of telecommunication items and equipment
in order to ensure compatibility with established standards.
(vii) Standards and other technical requirements
(a) Standards, testing, and certification
28. Law No. 97-024 of 14 August 1997 governs standards and product certifications.  The
Malagasy Bureau of Standards ( Bureau de Normes de Madagascar, MBS) is responsible for standards
issues.
4  The MBS is a public administrative entity under the Ministries of Trade, Budget, and Finance
and Economy.  It operates under budget from the Government and whatever revenues it can generatefrom its activities.  The Ministry of Trade, through national technical committees and with the
                                                     
4 Decree No. 98-944 of 4 November 1998;  amended by Decree No. 2000-109 of 16 February 2000.Madagascar WT/TPR/S/80
Page 31
assistance of economic partners of Madagascar, is developing national standards (based on
international standards) for export goods.5
29. There are some 63 published product standards.  Each published standard is supported by a
legal text.  Standards are typically adopted from either European or international norms.  Standards
have been promulgated for, inter alia , essential oils, soap and detergents, batteries, fruit and
vegetables, groundnuts, wines, salt, natural textile fibres, and wood products.
30. A certification office has been established in the Ministry of Trade since 1972.  The office
checks the conformity of goods and services to national standards, and issues the relevant certificate.
Both domestic and foreign producers may use the services of the office.
31. Madagascar standards requirements do not distinguish between imported and domestically
produced goods.
(b) Sanitary and phytosanitary regulations
32. The Ministry of Agriculture is responsible for the enforcement of Madagascar's phytosanitary
regulations.6  Phytosanitary inspection, and certification of plant and plant products are the
responsibility of the Plant Quarantine Office under the Plant Protection Directorate (Ministry of
Agriculture).  Importers of plants and plant products are required to obtain an import permit prior toimportation;  present a phytosanitary certificate issued by the exporting country and/or a certificate of
re-shipment;  submit imported products to phytosanitary control upon arrival;  and abide by all
phytosanitary regulations of the Plant Protection Directorate.
33. Law No. 91-008 of 25 July 1991 codifies health and sanitary regulations pertaining to animal
health, as found in applicable ordinances and decrees.  Veterinary Service agents are responsible for
enforcement of the regulations.
(viii) Government procurement
34. Madagascar is neither a signatory nor an observer to the WTO Plurilateral Agreement on
Government Procurement.  The Ministry of Finance and the Economy, and the Ministry of Public
Works set out regulations related to government procurement.
7
35. The Ministry of Public Works is responsible for government procurement related primarily to
road and building construction.  Most ministries are responsible for their own procurement accordingto guidelines established by the Ministry of Finance and the Economy.
36. Accounting officers are responsible for direct purchases of office stationery and materials in
their respective ministries.  Public purchases of other goods and services are made by tender.  Open
tenders are more common for public procurement of over FMG 1 billion;  single tenders are confined
to emergency situations.  All other public purchases are made through selective tenders (with pre-qualification in certain cases).
                                                     
5 MBS has not yet notified its acceptance of the C ode of Good Practice for the Preparation, Adoption,
and Application of Standards.
6 Madagascar's phytosanitary regulations are contained in Ordinance No. 86-013 of
17 September 1986, and Decree No. 86-310 of 23 September 1986.  The National Assembly ratified theregulations in Law No. 86-017 of 3 November 1986.
7 Decree No. 98-559 of September 1998.WT/TPR/S/80 Trade Policy Review
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37. The Government frequently publishes requests for bids to supply goods and services to the
Government and/or government sponsored projects, in  official and local journals, as well as on radio
and television.  Bids are reviewed by a Commission, which submits its recommendation for the
winning tender to the Minister of the purchasing entity, who makes the final decision.  The winning
tender is published in the Official Gazette .
38. Most competitive tenders are open to both domestic and foreign bidders.  Depending on the
nature of a contract, international competitive bidding or local competitive bidding is employed.
There is no financial threshold to identify when international or local competitive bidding should be
used.  Often, the decision is based on a subjective assessment of whether the technical expertise exists
locally to satisfy the contract.  Because most of the major projects in Madagascar are typically funded
by donor institutions, the procurement regulations of those organizations are usually followed.  Forinstance, preferential margins are granted to local tenderers under credit agreements signed between
the Government and certain donors (e.g. the World Bank and the European Union).
39. Tenders for large government projects (exceeding FMG 250 million) must receive prior
approval from the Comité Central de Marché,  which is composed of officials from the Chamber of
Commerce and the Ministries of Finance and the Economy, Budget, and Public Works.  Uponapproval by the Committee, the tender is opened for bids subject to the usual procedures.  For smaller
contracts by the Ministry of Public Works (less than FMG 250 million), small and medium-sized
enterprises (SMEs) are frequently favoured.
40. State-owned enterprises are required to follow the same procurement practices.
(ix) Local-content requirements
41. The authorities indicate that Madagascar does not maintain any local-content requirements.
(3) M
EASURES DIRECTLY AFFECTING EXPORTS
42. As a part of Madagascar's trade liberalization efforts, foreign exchange controls have been
relaxed since 1996.  Liberalization measures on export trade have included the removal of most
export registration and licensing requirements.  These and other liberalization measures have been
implemented to make export processes shorter and less cumbersome.
(i) Regulations
43. All exporters of goods from Madagascar must comply with the provisions of Ordinance
No. 88-015 of 1 September 1988.  Pursuant to this Ordinance, exporters are required to obtain certain
regulatory documentation, including a trader card; a statistical identification card, issued by the
National Statistical Institute (INSTAT);  a fiscal identification number;  and proof of membership and
registration with a commercial association.
44. Madagascar requires the following export documentation:  commercial invoice;  bill of lading
or airway bill;  insurance certificate;  certificate of origin;  phytosanitary certificate, if necessary;
commitment to repatriate foreign exchange earnings;  packing list;  customs declaration;  and analysis
of quality certificate, if necessary.
45. In 1996, the Malagasy Government lifted all restrictions on current payments and transfers,
and there is now free access to foreign exchange for current commercial operations.  The Government
has accepted the obligations of Article VIII of the International Monetary Fund Articles of Agreement
aimed at abolishing exchange controls.Madagascar WT/TPR/S/80
Page 33
46. Export credit is limited to well-known and large ex porters.  Credit is granted primarily for the
purchase of traditional agricultural products such as vanilla, coffee, cocoa, and cloves.  Even where
exports are pre-financed by foreign importers, local exporters must pay high charges (commissions) in
Madagascar.
(ii) Export duties and taxes
47. Effective 1 May 1997, Madagascar eliminated export duties and taxes on all except wood
products.  For raw logs (raw timber and hardwoods), there is a 4% fee on the f.o.b. value;  the fee for
processed wood products is 1.5% of the f.o.b. value.
48. During the period immediately prior to 1 May 1997, only vanilla was subject to export duties
and taxes.8
(iii) Prohibitions, licensing, and other measures restricting exports
49. Madagascar maintains a list of products whose export is restricted.  Ministerial clearance or
permits are required on goods that the Government wishes to monitor for various purposes, including
preserving national heritage and the environment.  The list includes natural resources, wildlife,
forestry, marine products, and foodstuffs.  Because of Madagascar's biodiversity, many of the export
restrictions are mandated by Madagascar's adherence to the Convention on International Trade inEndangered Species of Wild Fauna and Flora (CITES).  Protected animals include crocodiles,
tortoises, and lemurs.
50. Export prohibitions are in place in the agriculture sector for certain medicinal plants, various
plant seeds, oil extracts, plant leaves, and a number of tree barks.  Export prohibitions are also
currently in effect for some fish species because of resource management concerns, and for mineral
products deemed rare by the Malagasy authorities.  In the forestry sector, the Ministry of Forests and
Water oversees export controls on  a variety of woods.
51. Despite these export controls, officials from the Ministry of Environment note that there are
difficulties controlling trade in prohibited animals due to resource limitations.  The same is true for
wood exports, medicinal plants and other biodiverse products on the list of export restrictions.  In
addition to increased enforcement efforts, the Gove rnment is attempting to create new procedures to
protect these products and to encourage biomedical research in Madagascar.
(iv) Export subsidies
52. According to the authorities, Madagascar does not subsidize exports of goods or services.
(v) Duty and tax concessions
53. The export-processing zones (EPZs) provide incentives to enterprises exporting 95% or more
of their output.  Incentives under the EPZs include exemption on customs duties on importedequipment, exemption from the VAT and excise dutie s, and other tax benefits (Chapter II(4)(iv)).
                                                     
8 Vanilla was subject to the following export duties and taxes: 1994/95 – 35% ad valorem  tax;  1995 –
specific tax of FMG 85,000/kg. net;  1996 – specific tax of FMG 85,000/kg., modified by a 25% ad valorem  tax.WT/TPR/S/80 Trade Policy Review
Page 34
(vi) Export promotion, financing, and assistance
54. The Ministry of Commerce has established a Directorate for the Promotion of Foreign Trade
(DPFT).  Its purpose is to study a policy and stra tegy for the development of Madagascar's foreign
trade in collaboration with local business organizations, international organizations promoting
commerce, and relevant Ministries.
55. The DPFT publishes a handbook for exporters and for foreigners interested in Malagasy
products;  provides advice and information on trade, including publication of indicative prices for
exports;  publishes the results of its market and product analyses;  and negotiates participation by
national traders in fairs organized abroad by foreign institutions.  The DPFT is financed under public
budget;  it also receives assistance from international and foreign institutions (e.g. the International
Trade Center).
(4) MEASURES AFFECTING PRODUCTION AND TRADE
(i) State trading, public enterprises, and privatization
56. Madagascar introduced a privatization programme  (involving virtually all economic sectors)
in 1996.  The legal instrument for privatization is established by the Constitution of Madagascar as
well as Law No. 96-011 of 13 August 1996 (as modified by the Law No. 98-014 of19 November 1998) and six subsequent decrees.  Th e Ministry of Private Sector Development and
Privatization is responsible for the policy framework and process as defined in Decree No. 98-621 of
19 August 1998.  The Ministry acts as the principal advisor to the Government on policy and
legislation affecting privatization and private sector development.  The actual privatization of
state-owned companies has been overseen by a Privatization Committee, which operates under the
auspices of the Ministry.
57. The activities to be privatized include agriculture and food processing, pharmaceuticals,
energy, transport, telecommunications, mining, and other commercial, industrial, and services
enterprises.
58. The programme encompasses 136 companies slated to be privatized between 1997 and 2002.
In the period to 30 June 2000, 46 enterprises were earmarked either for privatization or liquidation.
Among the companies privatized during this firs t period were SOLIMA (petroleum distribution and
refinery, gas, hotels), FAMAMA (agri-industry) , SODIP/SOPRAEX (agri-industry and chemical),
ANM (agri-industry), ARS (transport), SOMADE X (mining), BCL (agri-industry), and LANSU
(fisheries).  Privatization of companies such as Air Madagascar, ADEMA (airport authority), TELMA
(telecommunications), SIRAMA (sug ar), and HASYMA (cotton) is to be completed before the end of
2001.  With each of these privatizations, the primary goal of the State has been to create a regulatoryand institutional environment that promotes competition.
59. In order to promote participation by nationals in the privatization programme, a special fund
(Fonds de Portage et de Privatisation, FPP) was created in 1999.  Furthermore, to attenuate the social
impact of privatization, the Government has created a number of special funds.  The Programme
d'Action Sociale et Économique pour  la Réinsertion Professionnelle (PASERP) is intended to address
the possible displacement of workers due to privatization, while the Fonds Social d'Appui au
Développement Régional (FSADR) is intended to prom ote local development so as to avoid particular
regional impacts of privatization.
60. As part of the privatization process, a Malagasy Stock Exchange has been created to allow
further participation by Malagasy citizens.Madagascar WT/TPR/S/80
Page 35
61. Privatization in Madagascar has been carried out with the assistance of the World Bank,
which has been providing technical assistance and financing.  World Bank assistance also includes a
second phase, which will focus on support for the private sector and its further development in
Madagascar.
62. Madagascar does not restrict participation by foreigners (through foreign direct investment) in
the privatization programme.
(ii) Subsidies and other forms of production assistance
63. Provisions of Malagasy legislation pertaining to investment (Chapter II(4)(ii)) offer
incentives, including reduced tax on profits, accelerated depreciation on goods related to the
investment, reduced customs duties, and exemption from import taxes and excise taxes during the
start-up of an investment.
64. The export-pocessing zones (EPZs) also provide incentives to qualified enterprises.
Incentives under the EPZs include exemption from customs duties on imported equipment, exemption
from the VAT and excise duties, and other tax benefits (Chapter II(4)(iv)).
(iii) Price regulation and competition policy
65. Malagasy competition policy is based on the French example, and is regulated by Ordinances
No. 73-054 and 73-055 of 11 September 1973.  The regulations are intended to encourage competition
in the economy by prohibiting restrictive trade practices, including collusion (e.g. collusive
tendering/bidding), subordination of conclusion of sale or purchase contracts and speculative holding
back, and to protect consumers.  The legislation does not address concentrations, monopolies, or
dominant positions and related abuses.
66. The 1973 Ordinances provide for administrative and criminal sanctions:  in case of
non-compliance with an administrative sanction, the infringer is liable to a criminal sanction.  Themost common infringement of competition regulations in Madagascar relates to a lack of transparency
in dealings.
67. Competition policy is under review by the authorities.  In 1994, the Government sponsored a
conference on competition policy, which concluded with the goal of formulating and adopting a new
policy by 1996.  Two bills were drafted but have not been enacted so far.
68. With the exception of public utilities, price controls and regulations have been eliminated on
virtually all goods and services.  Nevertheless, minimum import prices are maintained on certain
products (section (2)(ii)).
(iv) Measures for the protection of intellectual property rights
69. Intellectual property rights protection in Madagascar is overseen by two government
agencies:  L'Office Malagasy du Droit d'Auteur (OMDA) is responsible for copyrights; and the
Office Malgache de la Propriété Industrielle (OMA PI) is responsible for industrial property rights
(patents, trade marks, service marks and industrial designs).  OMDA's activities are regulated by
Law No. 94-036 of 18 September 1995, and OMAPI' s by Ordinance 89-019 of 31 July 1989 and its
implementation decree.
70. Madagascar is a member of the World Intellectual Property Organization (WIPO).  It is also a
member of the Paris Convention for the Protection of Industrial Property, the Berne Convention forWT/TPR/S/80 Trade Policy Review
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the Protection of Literary and Artistic Works, the Rome Convention, and the Patent Cooperation
Treaty (PCT).  Madagascar is not yet a signatory of the Washington Treaty on Integrated Circuits.
71. Madagascar's intellectual property legislation grants protection for the following periods of
time:  patents, 15 years, renewable for five years;  trade and service marks, ten years, renewable for
ten-year periods;  industrial designs, 15 years;  and copyrights, during the life of the author and
70 years after his death.  In the case of joint authorship, protection is during the life of the survivingauthor and 70 years after his death.  Anonymously published works and audio-visual works are
protected for 70 years from the date of publication.  Applied art works are protected for a period of
50 years from the creation of the work.
72. Madagascar is currently limited in its ability to enforce its intellectual property legislation.
Nonetheless, OMAPI is working closely with cust oms authorities to implement active enforcement at
the border.  Suspected goods may be seized on the order of court.
73. Infringers of intellectual property rights are liable to administrative and/or criminal sanctions:
compensation, imprisonment for between six months and three years, and fines of up to
FMG 10 million.  In case of repetition of the infringement, the sanctions are doubled.  Infringements
have generally been amicably settled;  they have mostly related to trade marks.
74. Madagascar has received technical assistance from WIPO and other entities with respect
to intellectual property, and anticipates the need for continued assistance in order to meet its
WTO obligations.  Both OMAPI and OMDA are currently revising legislation with respect to patents,
trade-marks, and copyrights in preparation for meeting Madagascar's WTO commitments by 2006.
75. Table III.3 provides statistics on OMAPI's activities since 1994 in the area of patents,
industrial designs, trade marks, including services marks.
Table III.3
Industrial property rights (since 1994)
Number of applications Number of grants
Patents 262 136
Industrial designs 825 473
Trade marksa5,170 4,199
a Figures include services marks.
Source: Information provided by Office Malgache de la Propriété Industrielle (OMAPI).