Brunei Darussalam WT/TPR/S/84
Page 69
IV. TRADE POLICIES BY SECTOR
(1) INTRODUCTION
1. Economic activity in Brunei Darussalam is dominated by petroleum and natural gas.  The
share of these two products in GDP remained high, at 35%, in 1999 despite declining from around
50% since 1990 (Chart IV.1).  Sectors showing increased shares in GDP during this period are:
services (52% in 1999), particularly social and personal services (28%), and, to a lesser extent,financial services (7%) and transport and communication services (5%);  and construction, which
grew from 4% to 7% of GDP.  The share of manufacturing, while increasing from less than 3% of
GDP in 1990, remained small at 3.8% in 1999.
Per cent
Total GDP:  B$ 7.6 billionChart IV.1
Sectoral distribution of GDP, 1999a
a
Note:
Source :  Provisional.
The shares total 102.1%, which is mainly due to the addition of imputed banking charges in GDP data.
Data provided b y the authorities of Brunei Darussalam.Construction
7.0
Social & personal services
28.0Petroleum & natural gas
35.3
Other services
4.6Services
52.1
Transport & communication
5.1Wholesale & retail trade
8.3Banking & insurance
6.9Agriculture, forestry & fishing
3.1Manufacturing
3.8
Electricity  0.8
2. Economic growth averaged around 2% annually until 1997 when a sharp drop in petroleum
prices and, to some extent, the Asian financial crisis led to a 12% contraction of the petroleum and
natural gas sector, and 4% of overall GDP in 1998.  Slower economic growth as a result of falling
petroleum prices was compounded by the collapse of a major domestic company, the Amedeo
Development Corporation (ADC).  All these factors have sharply highlighted the need for less
dependence on a few commodities and export markets.
3. The need for economic diversification, already highlighted by the Government in its Seventh
National Development Plan, has, as a consequence, become more urgent.  Efforts have been made to
develop manufacturing through the provision of tax incentives and financial assistance;  the
Government is also keen to develop financial services and sees a niche market for Brunei in IslamicWT/TPR/S/84 Trade Policy Review
Page 70
Banking.  The latest efforts include the establishment of the Brunei International Financial Centre
(BIFC), modelled on those in Singapore and Bahrain.  A number of measures, including anti-money-
laundering legislation, have been announced to ensure the success of the BIFC.  Brunei also plans to
make international accounting standards compulsory for all companies by 2002, which may go some
way to overcome obstacles created by a relative lack of transparency in the economy.
4. Despite efforts to attract private sector investment, Government involvement in the economy
remains pervasive.  An active industrial policy is pursued, including the provision of subsidized
infrastructure, and tax and non-tax incentives to investors in certain priority sectors, and direct
investment in these sectors by the Government's holding company.  Foreign investment is
encouraged, although some degree of local participation is required in sectors considered important to
national food security and based on local resources;  in agriculture, fisheries, and food processing,foreign equity participation is permitted up to a maximum of 70%.  The BIA is also seemingly
involved in industrial development.
5. In non-financial services, there appears to be very little private sector involvement and it is
not clear to what extent Government incentives have attracted FDI, suggesting a greater role for
transparency in market-access rules rather than incentives.  Brunei has also made limitedcommitments in the GATS, making offers on four out of 12 sectors;  its commitments generally tend
to reflect the current situation in the economy, w ithout suggesting further liberalization in the near
future.  It would perhaps encourage investors if Brunei were to improve predictability by making
further commitments under the GATS and increasing the transparency of its legislation and
regulations.
(2) A
GRICULTURE , FORESTRY , AND FISHING
(i) Agriculture
6. Brunei's agriculture sector is small, accounting for around 2% of GDP in 1999.  However, it is
seen as an important element in national food se curity, and the Government has been attempting to
raise investment in the sector through assistance in the form of incentives.  As a result, according to
the authorities, Brunei is almost self sufficient in the production of eggs (meeting 99.6% of local
demand) and vegetables, and produces around 76% of domestic poultry requirements, and some 7.7%of tropical fruit requirements.  Most of the country's beef comes from a cattle ranch in Australia
owned by the Government of Brunei.  For religious reasons, the rearing of pigs has been banned since
1993.
1
7. Brunei imports around 80% of its domestic agricultural requirements.  The largest share is
that of rice, accounting for almost 9% of food imports in 1998;  rice imports originate mainly fromThailand (owing to a government-to-government contract) and Australia, followed by India and
Singapore.  Other significant food imports include non-alcoholic beverages (8.4% of food imports in
1998), and prepared food (7.3%).
8. The current MFN tariff is low, 0.4% for agriculture, forestry and fishing (ISIC 1), with tariffs
principally on logging and fishing (Table AIV.1);  tea and coffee are subject to specific import dutiesfor which ad valorem  equivalents are not available and are hence not included in this overall tariff
average.  However, the bound tariff in agriculture is considerably higher than the applied rate, giving
scope to the Government to raise the applied rates of agricultural products within their bindings.  The
authorities argue that the difference between the bound and applied rates enables the Government to
address domestic food security concerns more effectively by ensuring a meaningful domestic supply
                                                     
1 Ministry of Industry and Primary Resources (undated b).Brunei Darussalam WT/TPR/S/84
Page 71
and reliable imports from MFN sources.  They also believe that the bound tariff enables domestic
institutions and enforcement agencies to adapt and adjust their capacity requirements to suit the
varying needs for sanitary and phytosanitary requirements when the need arises.
9. Although there are few tariff restrictions, some agricultural products, namely, rice, sugar, and
salt, are subject to import restrictions, and require an import permit from the Department of
Information Technology and State Stores in the Ministry of Finance, and an admission permit fromthe Royal Customs and Excise Department prior to  import.  Moreover, most of Brunei's rice is
imported directly by the Department of Informa tion Technology and State Stores under a government-
to-government contract, from Thailand.  Imports of beef and poultry are subject to a "food balancing"
requirement, whereby the volume of required imports is determined on the basis of local demand for
the products and local production in Brunei.  Importe d eggs must be stamped accordingly, in order to
distinguish them from locally produced eggs.  Export restrictions are maintained on rice and sugar.
10. In addition to import and export restrictions, all agricultural products are subject to sanitary
and phytosanitary measures, and random checks may be carried out at the border or in Brunei.
Imports of all meat and poultry products are subject to Halal requirements and may only be sourced
from government approved abattoirs.
(ii) Policy framework
11. The development of agriculture is a priority for the Government, both for food security
reasons and to diversify production and exports.  Four main objectives have been identified:  to boost
domestic production of rice, vegetables, poultry and livestock;  develop agri-industry;  produce high-
value-added products using new techniques;  and to  conserve and protect the country's biological
diversity.
2  Foreign investment in agriculture and food processing is encouraged, although it appears
that a minimum participation of 30% by local producers is required.3
12. The sector is heavily subsidized with a number of measures to assist local producers.  This
includes subsidized infrastructure facilities such as roads, irrigation, and electricity, as well as inputs
such as seeds, fertilizer, vaccines for livestock, and farming equipment;  financial and technical
assistance is also provided for local producers.  In addition to annual budgetary assistance,
B$172.5 million was also provided for the period 1996-2000 under the Seventh NationalDevelopment Plan (around 2.4% of the Development Plan's allocation of resources).  The Plan also
called for increasing self-sufficiency in vegetables, poultry, livestock, and rice;  a goal was set to
increase rice production to meet 7% of the country's rice requirements by 2000.  To raise rice
production, the Government provides an end-product subsidy scheme for rice producers, which was
started in 1986.  Its main objectives are to revive paddy growing activities;  to encourage farmers to
return to farming activities;  and to help rura l, low-income families.  Under the scheme the
Government purchases dried paddy from farmers, at an annual cost of B$200,000.  Despite these
efforts, however, there has not been much investment in agriculture in recent years.  According to the
authorities, the lack of interest appears to be du e mainly to better employment opportunities in other
sectors, notably the public sector, as well as unstable prices, limited marketing outlets, and lack ofaccess to start-up funds.
4
13. Brunei has not notified its Aggregate Measurement of Support (AMS) to the WTO since
1995.
                                                     
2 Borneo Bulletin (2000) .
3 The sector falls under the Government's definition of sectors related to national security and based on
local resources, in which foreign investment must be accompanied by a certain level of local participation.
4 Government of Brunei Darussalam (1997) .WT/TPR/S/84 Trade Policy Review
Page 72
(iii) Forestry and fishing
14. Around 80% of Brunei's land area is forested.  Logging and other forestry activities are
limited in Brunei in large part due to its emphasis on sustainable use of natural resources and the
preservation of biological diversity.  Timber is logged mainly for local consumption;  Brunei
maintains restrictions on imports and exports of timber to ensure local supply and, ostensibly, for
environmental reasons (Chapter III (2)(vi)(b) and (3)( ii)).  The Department of Forestry in the Ministry
of Industry and Primary Resources, the principle regulator in the sector, is currently developing
additional timber plantations covering an area of around 30,000 hectares, which, it is estimated, would
meet local demand over the next thirty years.  Brunei also intends to use its forests to develop
eco-tourism in the country (section (5)(vi)).5
15. The fishing industry caters mainly for local consumption.  The Government, nevertheless,
believes that the industry has a potential value of B$200 million in annual production, far higher than
the current B$35.7 million.  Other than providing fac ilities for aquaculture and overall infrastructure,
the Government also seeks joint ventures with foreign enterprises to obtain finance and expertise in
expanding both the annual catch and processing activities.  As a result, in its Seventh Development
Plan, the Government expected annual production to increase by an additional 2,500 tonnes per yearby the year 2000, and allocated B$73 million for fisheries in the Plan period.  According to the
authorities, this target has not been achieved for several reasons, including budget restrictions for
several proposed development projects, weather disturbances, economic downturn in the region, and
technical problems faced by operators.
16. Fishing licences are allocated annually to locally registered companies, including joint
ventures with foreign investors whose vessels are al so registered and licenced in Brunei and fly the
Brunei flag;  all licence holders must land their catch in Brunei.
6  Fishing licences are renewed
annually and are non-transferrable.  Brunei allocates licences based on resource availability and
estimated fishing capacity.7  The total annual harvest, according to  the authorities, must not exceed the
maximum economic yield (MEY), which is 20,000 tonnes per year;  the current exploitation level is
around 60% of the annual MEY.  All applications for fishing licences received by the Department of
Fisheries are evaluated on the basis of technical and financial feasibility, and recommended to theProjects Implementation Committee of the Ministry of Industry and Primary Resources.  Licences are
allocated on a first come, first served basis.
(3) P
ETROLEUM AND NATURAL GAS
(i) Overview
17. Petroleum and natural gas forms the largest sector in Brunei's economy, accounting for 35.3%
of GDP in 1999 and 89% of merchandise exports in 1998.  The authorities estimate that Brunei's
proven petroleum reserves will last for at least another 20-25 years at current rates of production.
Brunei's petroleum production peaked in 1979 at 261,000 barrels per day.  A subsequent policy
decision to conserve resources was made in 1981, aimed at reducing production to 150,000 barrels per
                                                     
5 Government of Brunei Darussalam (1997) .
6 According to the authorities, the benefits of requiring participation by Brunei nationals in joint
ventures include knowledge of the local situation, and ease in liaising with local authorities and the relevant
government departments and agencies.
7 Brunei's fisheries limits are divided into four zones, each with an estimated quantity of resources
available for harvesting within the stipulated maximum economic yield (MEY);  resource availability withineach zone is publicly advertised for licensing purposes.Brunei Darussalam WT/TPR/S/84
Page 73
day.  The target is flexible, however, and production was estimated to be around 192,000 barrels per
day in 2000 (Table IV.1).
Table IV.1
Petroleum and natural gas production, 1995-2000
('000 barrels per day and million standard cubic feet (MMscf))
1995 1996 1997 1998 1999 2000
Production
Petroleum  ('000 barrels per day) 175.0 165.0 163.0 157.0 182.0 192.0
Natural gas (MMscf per day) 1,080.0 1,073.0 1,070.0 1,036.0 1,102.0 1,146.0
Domestic consumption
('000 barrels per year)
Mogas 1,563.0 1,632.0 1,664.0 1,608.0 1,629.0 ..
Diesel 968.0 1,121.0 1,280.0 1,054.0 945.0 ..
Kerosene 35.0 42.0 41.0 28.0 19.0 ..
Aviation gas 0.34 0.24 0.13 0.08 0.03 ..
LPG 129.0 137.0 145.0 140.0 138.0 ..
Bitumen 150.0 153.0 135.0 92.0 87.0 ..
Jet A-1 532.0 606.0 719.0 632.0 510.0 ..
Gas (MMscf/day) 142.0 145.0 151.0 158.0 166.0 ..
.. Not available.
Source: Ministry of Finance, Brunei Darussalam Key Indicators 1997-2000 , Statistics Division, Department of Economic
Planning;  and data provided by the authorities.
18. There are presently two companies producing petroleum and natural gas in Brunei;  Brunei
Shell Petroleum (BSP), jointly owned by the Government of Brunei and the Asiatic Petroleum
Company Ltd., part of the Royal Dutch Shell group, began production of petroleum in 1929 and of
natural gas in 1972.8  It currently operates seven offshore and two onshore oilfields.  BSP also
operates Brunei's only petroleum refinery (section (i ii) below).  In addition to BSP, Block B Joint
Venture's (BBJV) Maharaja Lela field, operated by Elf Petroleum Asia bv, commenced production of
gas in 1999.  Another joint venture (Block A and CD Joint Venture), which is operated by Fletcher
Challenge Energy Borneo Ltd., is at the exploration stage.
19. In 2000, Brunei produced over 1,100 million standard cubic feet (MMscf) of natural gas per
day (Table IV.1).  The natural gas produced in Brunei is almost all liquified at the Brunei LiquefiedNatural Gas (BLNG) plant, jointly owned by the Go vernment of Brunei, Shell Overseas Trading Ltd.,
a Royal Dutch Shell company and Mitsubishi Corporation, which commenced operations in 1972.
9
Natural gas is also used for electricity generation, liquified petroleum gas (LPG) used domestically,and as a reserve for industrial purposes.  Approximately 90% of Brunei's natural gas is exported as
LNG.  The largest export market for Brunei's L NG is Japan, which currently imports 90% of annual
production, under a long-term agreement signed in 1973 and renewed in 1993.
10  The second largest
                                                     
8 The Government and the Asiatic Petroleum Company Ltd. each own 50% each of BSP.
9 As a result of the merger of Brunei LNG and Brunei Natural Coldgas company in 1996, the
Government presently owns 50% of Brunei LNG, with Mitsubishi and BSP sharing equally the rest of thecompany's equity.
10 The Agreement with the Japanese Government provides over 5 million tonnes of LNG annually to
three Japanese utilities (Tokyo Gas, Tokyo Electric, and Osaka Gas).WT/TPR/S/84 Trade Policy Review
Page 74
market currently is the Republic of Ko rea (around 10% of total LNG exports).11  Brunei signed a
two-year contract with the Republic of Korea in 1994 for 700,000 tonnes of LNG to be delivered to
the Korea Gas Corporation in 1995 and 1996;  a long-term contract was signed in 1997 to supply
similar amounts of LNG to Korea for 16 years.
20. Petroleum products for local consumption are marketed solely by Brunei Shell Marketing
(BSM), jointly owned by the Government of Brunei (50%), and Shell Overseas Holdings Ltd., aRoyal Dutch Shell company (50%).  Retail prices of petroleum products have been regulated since
1978, under a Price Stabilization Agreement (PSA) signed between the Government and BSM, in
response to high prices of crude oil.  Under the PSA, the Government subsidizes retail prices if the
price of crude oil rises above a certain level.
21. The supply of LNG to major markets is the responsibility of Brunei Shell Tankers Ltd.,
jointly owned by the Government of Brunei (50%) and Shell Petroleum Company, a Royal Dutch
Shell company (50%).  In 1998, Brunei Gas Carriers  (BGC), jointly owned by the Government of
Brunei (80%), Shell Gas bv, a Royal Dutch Shell Company (10%), and Mitsubishi Corporation (10%)
was established to build and operate a LNG ship, scheduled to commence services in 2002.
22. Brunei's exports of petroleum and natural gas amounted to US$2.2 billion in 1999;  53% of
this was crude petroleum and the rest LNG (Chart IV.2).  The main destination for petroleum and
natural gas exports is the United States with 28% of the total, followed by Japan (19%) and the
Republic of Korea (15%).  ASEAN countries accounted for 31% of Brunei's exports of crude
petroleum and LNG in 1999.
Per cent
Sourc e:  Data provided by the authorities of Brunei Darussalam.Chart IV.2
Exports of fuels, 1999
Total: US$2.2 billionCrude petroleum
53.0By product
New Zealand  1.0ASEAN
31.0
United States
28.0
Japan
19.0By destination
Natural gas, liquefied
47.0
Republic of Korea
15.0Australia
5.0China 1.0
                                                     
11 Figures on trade in this section do not correspond with data used in other sections of Chapter IV or
with Chapter I, as two different sources were used:  data in this section were provided by the authorities whereastrade data used in the rest of the Report are based on the UNSD, Comtrade database.Brunei Darussalam WT/TPR/S/84
Page 75
23. Most refined petroleum imports are subject to specific rates of duty ranging from B$0.11 to
B$0.44 per decalitre.
24. Under the Income Tax (Petroleum) Act, Cap. 119 (Laws of Brunei revised edition, 1984),
Brunei levies a corporate tax on petroleum operations at a rate of 55%.  The corporate tax rate for
natural gas production appears to be 50%.
(ii) Policy
25. The Petroleum Unit, established on 15 June 1982 under the Prime Minister's Department, is
the principal regulator of the petroleum and gas sector in Brunei.  In addition, the Brunei Oil and Gas
Authority (BOGA), formed in 1993, whose secretary is the Director of the Petroleum Unit, advises
and makes recommendations to the Sultan on all matters relating to the petroleum and gas sector.
BOGA is chaired by the Minister of Industry and Primary Resources;  other members are thePermanent Secretaries in the Prime Minister's Depart ment and the Ministries of Finance, Industry and
Primary Resources, and Development.
26. The Petroleum Unit's responsibilities include overseeing the exploitation of Brunei's
petroleum and gas reserves, and promoting the development of downstream industries;  fixing crude
oil prices;  and ensuring that internationally acceptable standards on technical, accounting, health andsafety, and environment, are adhered to.
12  In addition to its activities in the domestic petroleum
sector, the Petroleum Unit represents Brunei in  the ASEAN Council of Petroleum (ASCOPE).13
27. Royalty payments for onshore and offshore oilfields differ.  For onshore fields, the royalty
currently paid is 12.5% of production;  the rate is 10% of production from fields between three and
ten miles offshore, and 8% of production from fields farther offshore.  Natural gas royalties are
treated on a similar basis.
28. Under the Petroleum Mining Act (Chapter 44 of the Laws of Brunei, revised addition 1984),
investors, including foreign investors may apply for petroleum mining agreements in respect of state
land, whether onshore or offshore;  the applications are considered by the Sultan of Brunei in Council.
Amendments made to the Petroleum Mining Agreement in 1992, give the Government of Brunei the
option of allowing investment in the form of othe r types of agreements, including production sharing
contracts.  At present two foreign companies are in volved in the production of petroleum and natural
gas in Brunei:  BSP, and Block B Joint Venture, ope rated by Elf Petroleum Asia bv.  A decision was
made to open over 12,000 square kilometres for oil and gas exploration in November 2000.
According to the authorities, bi dding for the blocks is expected to close in November 2001 for
exploration to begin in 2002.
(iii) Petroleum refining and other downstream activities
29. The Government encourages diversification of the economic base into various sectors,
including downstream activities related to the petroleum and natural gas sector.
30. At present, around 93% of Brunei's petroleum and 90% of its natural gas output is exported as
crude oil and LNG, respectively.  The remaining crude oil output is refined for domestic use.  Brunei's
only petroleum refinery is the Seria Refinery, operated by BSP, with a capacity of 10,000 and
                                                     
12 Prime Minister's Office (undated a).
13 The other members of ASCOPE are Petronas (Malaysia), Pertamina (Indonesia), PNOC
(Philippines), PTT (Thailand), SPC (Singapore) and Petro-Vietnam (Viet Nam) (Prime Minister's Office,undated b).WT/TPR/S/84 Trade Policy Review
Page 76
6,000 barrels per day for its crude distillation unit (CDU) and reformer unit.  The main products
include unleaded gasoline, gasoil, Jet A1, and kerosene.  The Government is keen to encourage
investment in downstream activities and has set aside 0.5 trillion cubic feet for industrial use.
According to the authorities, the Government has received several proposals to establish
petrochemical industries in Brunei.  In view of th is, a two-phase "downstream Master Plan" is to be
conducted.  The Master Plan, which is due to be completed by February 2001, is expected to producea road map for the future development of the downstream oil and gas industry.  The first phase of the
Master Plan has identified export-oriented oil refining, petrochemicals, and other energy intensive
industries, such as aluminium smelting, as sectors to be encouraged.  Potential spin-off industries
from these activities include plastics, textiles, packaging materials, synthetic rubber, agricultural
chemicals, and pharmaceuticals.
14  According to the authorities, as part of the second phase, attractive
incentives will also be offered to investors.
(4) CONSTRUCTION AND MANUFACTURING
(i) Construction
31. The construction sector grew steadily from around 4.3% of GDP in 1990 to 7.7% in 1998.
Since then, weaker economic growth, as a result of the regional economic and financial crisis, hasresulted in a contraction in the sector.  Provisional data show that its share of GDP fell to around 7%
in 1999, with 6.9% projected for 2000.
32. Growth in the sector has been attributed mainly to government spending on infrastructure,
including the development of government offices, schools, hospitals, mosques, and housing.  As a
consequence, a decline in the Government's development budget in 1998 has had a significant impact
on the sector.  Contraction in the sector was also linked to the 1998 collapse of Amedeo Corporation,
a large domestic company, which had a significant presence in the construction sector and severalconstruction projects contracted out to local companies.
15
33. As much of the sector is locally based, the Brunei Darussalam Economic Council (BDEC), as
part of its "Action Plan for Recovery" recommended that the Government set up a working capital
credit fund worth B$200 million to be backed by a 75% government guarantee, for the local private
sector, of which 60% would be reserved for bumiputra-owned companies;  the fund was established inJanuary 2001 (Chapter III(4)(ii)(d)).  An amount of B$30 million also appears to have been allocated
as bank credit at low rates of interest for SMEs and is guaranteed by the Government.
16  Other
recommendations by the Council included splitting government contracts among as many local
contractors and SMEs as possible, and giving locally produced goods and services a 15% margin of
price preference (Chapter III(2)(x)).  According to the authorities, recommendations made by theBDEC have been accepted, in principle, by the Government.  Recent steps taken to implement these
recommendations include awarding 500 new low-cost  housing project contracts in an effort to
rejuvenate the sector;  according to the Director-General of the BDEC Secretariat, the project would
be divided into several packages to make it accessible to local contractors;  and emphasis would be
placed on the use of locally manufactured products, such as roofing, cement, and bricks.
17
                                                     
14 Government of Brunei Darussalam, News Release , 10 November 2000 [Online]. Available at:
http://www.apec2000.gov.bn/strories/downstream.htm [10 November 2000].
15 The Government has since offered to purchase the assets of Amedeo, through the BIA.
16 APEC News Website , 13 November 2000 [Online]. Available at:  http://www.apecnews.org.bn
[16 November 2000].
17 APEC News Website , 13 November 2000 [Online]. Available at:  http://www.apecnews.org.bn
[16 November 2000].Brunei Darussalam WT/TPR/S/84
Page 77
(ii) Manufacturing
(a) Overview
34. Although petroleum and natural gas production dominates GDP and exports, Brunei has been
trying to diversify its economic base by encouraging manufacturing.  The sector, nevertheless,
remains small, at 3,8% of GDP in 1999, up from around 2.7% in 1990.  The major manufacturing
activities in 1999 appear to include clothing and food processing although exact figures on thecontribution of these sectors to manufacturing or ov erall GDP are not available.  Brunei had a deficit
of over US$1 billion on its trade in manufactured products in 1998 (Chart IV.3).  Its main
manufacturing exports include clothing (40.5% of manufactured and 4.4% merchandise exports),
transport equipment (27.3% and 2.9%) and non-electrical machinery (8.7% and 0.9%).  Imports
consist mainly of transport equipment (18.3% of manufactured imports), non-electrical machinery(10.3%), textiles and clothing (8.9%), other se mi-manufactures (20.9%), and other consumer goods
(13.3%).
Per cent
Sourc e:  UNSD, Comtrade database (SITC Rev.3).Chart IV.3
Manufacturing trade by product group, 1998
Total: US$248.8 millionOffice machines &
telecom. equip.  7.7
Chemicals  0.6Other electrical machinery 
                           1.3
Other semi-manuf.
7.7Non-electrical 
machinery  8.7Exports
Total: US$1,251.6 millionOffice machines & 
telecom. equipment
  6.6
Iron & steel
7.6Other consumer 
goods  13.3Textiles & 
clothing
8.9Transport equipment
18.3Imports
Other electrical machinery                              6.4
Clothing
40.5Textiles
0.4 Transport equipment
27.3
Chemicals
7.6Other semi-manufactures
20.9Non-electrical machinery
10.3
Other consumer goods
  2.7Iron & steel  3.2
35. In 2000 the average applied MFN tariff on manufactured products (ISIC 3) was 3.3%, and
ranged from 0-200%.  Higher rates were mainly applied to imports of motor vehicles (0-200%) and
chemical products and pharmaceuticals (0-30%) (Table AIV.1).  Specific tariffs are levied on
processed foods such as tobacco and alcohol products.
36. After petroleum and natural gas, clothing is Brunei's largest export.  There are currently six
clothing factories in Brunei, all of which ope rate under the Pioneer Status programme, which
guarantees them tax-free status for up to eight years (Chapter III(4)(ii)(a)).
37. Brunei does not have bilateral arrangements with its trading partners under the Agreement on
Textiles and Clothing (ATC), and notified the WTO that it did not wish to retain the transitionalWT/TPR/S/84 Trade Policy Review
Page 78
safeguard mechanism.18  Exports grew in value from US$5.9 million in 1993 to over US$1 billion in
1998.   The main destination for exports of clothing is the United States, which accounted for 89% of
Brunei's clothing exports in 1998, followed by Singapore (8.9%).
38. The Government is also encouraging food processing, and believes that furniture making,
pottery, tiles, cement, chemicals, and plywood all have potential.
(b) Policy
39. Manufacturing has been encouraged in order to reduce Brunei's dependence on its petroleum
resources.  Thus, a number of incentives are used to encourage investment in sectors identified as
priority by the Government;  the incentives includ e financial assistance to local companies and tax
breaks for all investors (Chapter III(4)(ii)).  In a ddition to these incentives, the Government provides
free or subsidized infrastructure and inputs to encourage investment.  In priority sectors in whichprivate investment is not forthcoming, the Government invests directly, mainly through its holding
company Semaun Holdings.  The Seventh National Development Plan allocated over B$500 million
for industrial development parks and a technology park.
19  At present 23 industrial parks are being
developed, which will cater to services and manufacturing activities.  Specific industries targeted for
these sites include steel, dairy products, glass, pre-cast concrete, and light-weight aggregateproduction.
20
40. The Government's industrial development policy is managed by the Brunei Industrial
Development Authority (BINA), a department of the Ministry of Industry and Primary Resources.
The BINA, whose main role is to provide a more focused approach, and facilitate industrial
development, was initially established as the Industrial Unit in the Ministry of Development in 1986
and was transferred to the Ministry of Industry and Primary Resources in 1989.  In April 1996, the
Industrial Unit was merged with the Cooperatives Development Department in the Ministry of HomeAffairs to become the BINA.
41. The BINA manages all Brunei's industrial sites and acts as a one-stop shop for all investors
wishing to make use of these industrial sites.  Fo reign investment is encouraged in certain priority
sectors, including leather products and footwear, electrical and electronic machinery, ships and boats,
clothing, and metal and non-metal products (Chapter II(5)).  There appear to be nine industrial sites inBrunei, covering around 375 hectares, which provide basic infrastructure such as roads, drainage and
sewerage facilities, electricity, telecommunications, and water.  BINA has also been responsible for
training local entrepreneurs and the development of local cooperatives;  this responsibility was
transferred to the Ministry of Industry and Primary Resources in 1999.
21
42. The Government also takes a direct stake in industrial sectors in the economy through its
holding company Semaun Holdings Sendirian Berhad.  The company, whose board of directors
consists mainly of government officials, invests in areas of strategic importance but "not in direct
competition with the local private sector".22  Investment by Semaun Holdings may take the form of
joint ventures with local or foreign companies, or direct investment in the desired sectors
(Chapter III(4)(iii)).  The Government has al located B$907.7 million towards the development of
                                                     
18 WTO document G/TMB/N/204, 16 January 1997.
19 Government of Brunei Darussalam (1997) .
20 Hong Kong Shanghai Bank (HSBC) (1999).
21 Brunei Industrial Development Authority (undated).
22 Ministry of Industry and Primary Resources (undated c).Brunei Darussalam WT/TPR/S/84
Page 79
industry and commerce in the Seventh Plan period (1996-2000);  the industrial development sector is
expected to receive B$504.3 million of this.23
43. Despite these efforts, the manufacturing sector has remained small and private sector
participation weak, as pointed out in the Government's recently commissioned report by the BDEC.
Efforts are being made to encourage private sector participation (Chapter III(4)(iii)), although the
extent of government involvement in the economy is pervasive and appears to be a disincentive toprivate investment.
(5) SERVICES
(i) Overview
44. The services sector accounts for the largest share of GDP, 52% in 1999, up from 38%
in 1990.  The sector employed around 80% of the workforce in 1995.  The main  services are socialand personal services (53.7% of the sector), followed by wholesale and retail trade (15.9%), banking
and insurance (13.2%), and transport and communications services (9.8%) (Chart IV.4).  Data on
trade in services were not available.
Per cent 
Social & personal services
53.7
Real estates
2.5Banking & insurance services
13.2Chart IV.4
Structure of services, 1999a
Provisional.
Data provided by the authorities of Brunei Darussalam.Ownership of dwellings
2.3
Wholesale & retail trade
15.9Hotels & restaurants
2.5Transport & communication
9.8
Total:  B$4.0 billion 
a
Source :
45. In recognition of the importance of the services sector for economic growth, the Government
hopes to transform Brunei into a Service Hub for Trade and Tourism (SHuTT) by the year 2003.  TheSHuTT programme would promote trade, travel, business, and communications in and through
Brunei.  The programme is intended to further develop Brunei's infrastructure including upgrading
facilities at Brunei International Airport;  expanding Muara Port, Brunei's main port, by investing
                                                     
23 Government of Brunei Darussalam (1997) .WT/TPR/S/84 Trade Policy Review
Page 80
B$12 million to boost the port's capacity by the year 2004;  improving the land transportation
network, including the possible development of a light rail transport (LRT) system;  increasing
capacity in the telecommunications services network to increase penetration rates;  and expanding
coverage by the domestic and international postal services.24
46. As with other sectors of the economy, the Government tends to be dominant in services.  This
is particularly true for social and personal services, which account for over half of the sector'scontribution to GDP.  In addition, other services, notably transport and communication services and
energy generation and distribution, have a strong  Government presence.  The Seventh National
Development Plan allocated around 22% of its total funding to public utilities, including electricity,
transportation, and telecommunications, in addition to finance for social services and construction,
which accounts for the largest share of government funding in the Plan.
(ii) Commitments under the General Agreement on Trade in Services (GATS)
47. Brunei made commitments under the General Agreement on Trade in Services (GATS) in
four out of 12 services in the WTO Secretariat classification.25  These are:  business services
(professional, computer, and rental or leasing services without operators);  communication services
(telecommunication), financial services (insurance, and banking and other financial services);  andtransport services (air transport) (Table AIV.2).  Further commitments were made in
telecommunications services under the Fourth Protocol (section (iv) below).
48. In general, Brunei's GATS commitments tend to reflect its current policy in the services
sector.  In its horizontal commitments, which apply to all sectors in which Brunei has made
commitments, market access limitations on mode 3 (commercial presence) are unbound for measures
relating to foreign equity in companies established in or wishing to establish a commercial presence in
Brunei.  Commercial presence limitations with regard to national treatment are also unbound exceptfor existing companies where half the board members of a public company and half the directors of a
private company must be nationals or residents of Brunei;  and all companies incorporated outside
Brunei must have one or more local agents.  The movement of natural persons (mode 4) is unbound
with respect to both market access and national treatment, with the exception of temporary
intra-corporate transfers at the level of management, executives and specialists.  Additionalsector-specific commitments apply to the four individual sectors in which commitments were made
(Table AIV.2).
49. In its Article II (MFN) exemptions, Brunei lists all future liberalization with regard to foreign
equity participation as being subject to discretionary changes and dependent on Brunei's development
requirements.  Brunei also has a preference for recruiting labour from traditional sources of supply toensure social cohesion in the country.  Sector-specific MFN exemptions are also maintained for legal
services, radio and television services, financial services, reinsurance and retrocession, and banking
and other financial services (Table AIV.3).
                                                     
24 Ministry of Communications (undated).
25 These are:  business services;  communication services;  construction and related services;
distribution services;  education services;  environmental services;  financial services;  health-related and social
services;  tourism and travel related services;  recreatio nal, cultural and sporting services;  transport services;
and other services not included elsewhere.Brunei Darussalam WT/TPR/S/84
Page 81
(iii) Financial services
(a) Overview
50. Brunei declared its intention to develop the country as a regional financial centre in the mid
1990s and has taken some steps to improve prudential regulations and supervision.  Initial steps were
taken in 1993, when supervisory activities of the banking and insurance sector were moved from the
Brunei Currency Board and the Economic Development Board to the Financial Institutions Division(FID) of the Ministry of Finance.  The Government has also recently enacted legislation to combat
money laundering and introduced some prudential regulations, especially in banking.  It has launched
a new financial centre to which it hopes international companies will be attracted owing to Brunei's
political and economic stability.
51. However, progress seems to have been slow and much remains to be done especially in order
to improve transparency in financial services.  In addition, there has been a tendency in the past for
the Government to assist financial companies in  trouble.  In the 1980s, for example, following
financial failure of  the United National Finance Company in 1985, the National Bank of Brunei, the
second largest local bank, in 1986, and Jan Shen, a commodity trading firm, in 1988, the Government
provided relief through the budget.
52. The Government recognizes the need for an improved supervisory framework and declared
that it would take such measures in its Seventh National Development Plan (1996-2000).
26  W h i l e
some changes, including new legislation, have been made recently, the extent to which these changes
attract investment to Brunei, particularly to the newly established Brunei International Financial
Centre (BIFC), remains to be seen.
(b) Banks and finance companies
Overview53. The banking subsector accounted for 5.2% of GDP in 2000,  its share rising from 3.4% of
GDP in 1990;  average annual growth in banking services is estimated at some 4.4% during this
period.  At the end of 2000, there were nine bank s in Brunei (seven commercial, and two Islamic
banks), one Islamic trust fund, and eight finance companies (Table IV.2).  Other, non-depository
financial corporations, include the Employees Trust Fund (ETF)
27, a securities company, 25 money
changers, and 24 remittance companies.  In 1993, one of the domestic commercial banks became an
Islamic Bank, followed by the government-owned Development Bank of Brunei Berhad in July 2000;
in addition, the Islamic Trust Fund, Tabung Amanah Islam Brunei provides savings and investment
facilities under Islamic principles, including Islamic insurance, financing, and assistance for people to
undertake the Haj pilgrimage to Mecca.   There were eight finance companies in Brunei at the end of
1999, of which two are locally owned;   these companies, which provide mainly hire-purchase
financing for cars and other consumer durables, and mortgages, had total assets of B$937 million in
1998, declining to B$922 million in 1999.
                                                     
26 Government of Brunei Darussalam (1997) .
27 The ETF was formed in 1993.  It was initially a compulsory pension scheme for all new public sector
employees and was extended to include all private sector employees in 1994, except those working for anemployer with an approved provident fund.WT/TPR/S/84 Trade Policy Review
Page 82
Table IV.2
The banking sector, 1995-2000
1995 1996 1997 1998 1999 2000
Structure
Commercial banks 8 8 8 8 9 9
Foreign owned 6 6 6 6 6 6
Locally owneda22223 3
Development banks 1 1 1 1 1 1
Savings banks 1 1 1 1 1 1
Finance companies 5 5 5 5 8 8
Assets (B$ million)b9,054.7 9,389.4 9,276.3 7,416.9c8,363.6 9,489.1d
a Includes the Islamic Bank of Brunei Berhad, which became an Islamic bank in 1993.
b End of period.
c Excludes figures for one bank.d Up to June 2000.
Source: Ministry of Finance (1999), Brunei Darussalam Statistical Yearbook 1999 , Statistics Division, Department of
Economic Planning and Development;  and data provided by the authorities.
54. In 1999 around 63% of banking assets were held by three banks:  Citibank, Standard
Chartered Bank (SCB), and Hongkong and Shanghai  Banking Corporation (HSBC).  Of the other
commercial banks, three are local banks an d one is wholly owned by the Government.28  Commercial
bank assets increased from just under B$9.1 billion in 1995 to B$9.5 billion in June 2000.  Total loans
made by Brunei's banking sector increased by an  average of 12.4% between 1993 and 1999;  personal
loans accounted for the largest percentage of overall commercial bank lending in 1999, around 52.2%
of the total, followed by general commerce (17.3 %), construction (14.3%) and transportation (5.1%).
Commercial banks tend to have limited scope for providing mortgages as the Government provides
cheap loans to civil servants for purchasing housing and automobiles.29
55. Although current data are not available, it appears that the regional financial crisis had some
impact on Brunei's banking sector;  for example, as a result of the ensuing economic slowdown, the
share of non-performing to total loans by banks rose from 3.5% in 1997 to 10% in 1999.
Policy
56. As part of its overall policy to diversify the economic base, the Government has sought to
establish Brunei as a regional financial centre.  The banking sector is thus characterized by liberal
banking regulations, with few restrictions other than prudential requirements.  Interest rates are set by
the Brunei Association of Banks30;  the prime lending rate for all banks was 5% at the end of 2000.  In
1993, the Financial Institutions Division (FID) of the Ministry of Finance became the regulator of the
banking sector, and is now responsible for all licensing, regulation, and supervision of financialinstitutions.  There does not seem to be any legislation or regulations regarding licensing procedures,
which appear to be at the authorities' discretion;  according to the authorities, however, the FID is
currently drafting a new Act to replace the existing Banking Act of 1957.  The FID has established
                                                     
28 The Islamic Bank of Brunei Berhad, which was established in 1982, appears to be owned mainly by
the Royal Family of Brunei, but also partly by the Dai Ichi Kangyo Bank Ltd.;  and Baiduri Bank Berhadappears to be owned by Baiduri Holdings (60%), Royal Brunei Airlines (10%), Royal Brunei Technical Services
(15%) and Paribas (15%).
29 Hong Kong Shanghai Bank (HSBC) (1999).
30 Hong Kong Shanghai Bank (HSBC) (1999);  the Brunei Association of Banks includes participation
by all banks operating in Brunei.  The prime rate is reviewed by the Association on a monthly basis and anyproposed changes are sent to the FID in the Ministry of Finance for review.Brunei Darussalam WT/TPR/S/84
Page 83
certain criteria for foreign banks wishing to invest in Brunei, including that the banks must be ranked
among the top banks in the world and in their country of incorporation;  they must be authorized by
and supervised closely by the authorities in their country of incorporation;  and must have sufficient
internal controls in addition to a sound financial track record.  The FID also examines their objectives
in investing in Brunei and potential benefits to Brunei.  According to the authorities, the number of
banks operating in Brunei is considered to be large relative to the size of the market and population.31
57. According to the authorities, the main prudential regulations are requirements for minimum
paid-up capital, minimum cash balances, capital adequacy, and an annual renewal of banking
licences.32  The current minimum paid-up capital requirement for banks and finance companies is
B$3 million and B$1 million, respectively.  In addition, the FID may require Islamic banks to
maintain capital funds in "such proportion to such assets of its branches and offices both inside andoutside Brunei as may be prescribed from time to time by the Minister in writing".  In response partly
to the desire to strengthen the banking sector, a minimum cash balance requirement of 6%, in line
with Singapore, was introduced for all banks and finance companies in December 1995, followed by a
minimum liquid-assets requirement introduced in 1999.
33  Other recent developments appear to
include off-site supervision to ensure the soundness and stability of banks;  banks are also required tosubmit their audited statements on an annual basis to the FID, which are published in the local
newspapers and must also report their non-performing loans and risk-weighted capital adequacy ratios
to the FID on a monthly, and quarterly basis, respec tively.  The FID is currently developing guidelines
and manuals for banking operations.  However, there is very little information on whether banks or
finance companies meet the minimum Basle standard of an 8% risk-weighted capital adequacy ratio
although, according to the authorities, the FID monitors banks and finance companies in line with
international codes of conduct and standards, including Basle standards.  No details were available onother requirements, such as the FID approving larg e shareholdings or foreign shareholdings, changes
in ownership or limits on exposure to foreign currencies and loan provisioning or classification
criteria.
34
58. The Government encourages Islamic banking and has enacted legislation to support banks
operating under these principles, including taking a share of profits from the firms it funds rather thancharging interest.
35  Prudential regulations for Islamic banks are, in general, more stringent than for
commercial banks. In addition to minimum cash balances, the Islamic Banking Act (Cap 168)
requires regular reporting of audited statements and monthly balance sheets to the Minister of
Finance, through the FID;  they are also obliged to furnish any additional data as requested by the
Minister.  The Minister has supervisory powers to conduct investigations of banking operations andmay penalize and remove directors of banks from office if they fail to cooperate or are found to be
contravening any part of the Act.  Further amendments made in 1999 allow the Minister of Finance to
prescribe different ratios for different liabilities and the method of computing the amount of minimum
                                                     
31 Under the Banking Act, the Sultan may refuse to grant a licence, without giving a reason
(Article 4 (1) of the Banking Act (revised edition 1985), Chapter 95).
32 Under the Emergency (Banking Act) (Amendment) Order 1995, it appears that the Minister may,
from time to time, require banks to maintain minimum cash balances not exceeding 30% of their deposit andother liabilities held as reserves with the Minister (Article 4 of the Order inserting a new section 6A in theBanking Act).
33 Under the Emergency (Banking Act)(Amendment) Order 1999, the Minister may, from time to time,
prescribe in writing, a minimum amount of liquid assets to be held by each bank at all times (Article 2 inserting
a new section 6B in the Banking Act).
34 Brunei does not appear to require banks and finance companies to meet the minimum 8% capital
adequacy requirement.
35 The Islamic Banking Act was enacted in December 1992 and subsequently amended by the
Emergency (Islamic Banking) (Amendment) Order 1995.WT/TPR/S/84 Trade Policy Review
Page 84
required reserves, currently 6%, as for conventional banks.36  Foreign-owned or controlled companies
may not be granted Islamic banking licences.37
59. Other measures taken recently to boost Islamic banking include the decision to establish the
Islamic Development Infrastructure Fund L.P.'s Asia regional office in Brunei.  The Fund, worth
US$1.5 billion, will provide interest-free financing for projects in Islamic countries.38
60. There appear to be no licensing requirements for the Islamic Unit Trust Fund, Tabung
Amanah Islam Brunei, which was established under the Perbadanan Tabung Amanah Islam Brunei
Act, in 1991.  The company's board of directors, which is responsible for policy and administrative
matters, is appointed by the Sultan.  The Fund is required to provide the Minister of Finance with
details of its accounts, as required, which may also be audited by the Auditor General or an
independent auditor, as appointed by the Trust Fund.
61. Finance companies are regulated and licenced under the Finance Companies Act of 1972.
Under the Act, they are subject to a minimum paid- up capital requirement of at least B$1 million and
the same minimum cash balance of 6% as banks, but they may not take demand deposits.39  As for
banks, licences are granted by the Minister of Finance  through the FID  and appear to be subject to the
discretion of the authorities.40  Unlike banks, however, there are restrictions on acquiring majority
interest in any finance company without prior approv al from the Minister;  approval is also required
when changing any part of the company's memorandum of association.  Guidelines are also provided:
for the maintenance of a reserve fund;  for making public the company's balance sheets41;  and for
providing any data required by the Minister.  Information on the non-performing loans of these
companies was not available.
62. To diversify financial services in Brunei and to establish Brunei as a banking and business
centre for the region, the Government established th e Brunei International Financial Centre (BIFC) in
2000.  The legislation, enacted to accompany the formation of the BIFC, seeks to introduce measures
against money laundering activities and to bring Brunei's standards up to international standards in
this respect (Box IV.1).  The Government also announced recently that the use of international
accounting standards would be made compulsory for all companies in Brunei by 2002, which may
help in improving transparency and boost the BIFC.
                                                     
36 Article 2 of the Emergency (Islamic Banking) (Amendment) Order 1995, inserting a new
section 15A in the Islamic Banking Act.
37 All changes in control of an Islamic bank must be reported to the Minister (Article 20 of the Islamic
Banking Act (Cap. 168)).  Foreign owned, or controlled, is defined as 50% or more of the capital issued andpaid up being owned by or on behalf of persons who are not Muslim citizens of Brunei or, if a majority of
persons having direction, control or management of the company, are not Muslim citizens of Brunei (Article 6
of the Islamic Banking Act (Cap. 168).
38 The fund will be used to provide interest-fee financing in Islamic countries.  According to press
reports, Brunei will be contributing be tween US$200-300 million to the fund ( The Nation  (Pakistan),
6 November 2000 [Online].  Available at:  http://www.nation.com.pk/top1.htm [6 November 2000].
39 More recently the Emergency (Finance Companies Act) (Amendment) Order 1995 introduced a
minimum cash balance requirement similar to that required of banks.
40 Under the Act, the Minister may refuse to grant the application without assigning any reason for the
refusal.  The Minister's decision is final and may not be appealed (Article 8(3)).
41 The Act specifically requires the company to publish its balance sheet in at least one of the local
newspapers not later than six months after the end of each financial year (Article 15).Brunei Darussalam WT/TPR/S/84
Page 85
Box IV.1:  The Brunei International Financial Centre
In an attempt to further boost current financial activities in Brunei and to increase economic diversification,
the Government launched the Brunei International Financial Centre (BIFC) in 2000.  The goals of the BIFCare to diversify and expand value-added financial services in Brunei and the Asia-Pacific region;  provide asafe harbour for regional and international business;  increase returns for other service industries;  improve
capabilities and job opportunities for qualified Bruneians as well as attracting high quality professionals
from abroad;  and position Brunei as an equal partner in the globalization of financial and commercial
activities, thereby increasing communication with other nations.
The establishment of the BIFC is accompanied by legislation to permit the flexible provision of facilities
necessary for the efficient conduct of international business, including tax-free status, while at the sametime ensuring that money laundering and other illegal activities are prevented.  Legislation initially enacted
includes:
The International Business Companies Order, 2000 , which envisages the formation of tax-free corporate
facilities for international business company (IBC).  These may be:  limited by shares;  limited byguarantee;  limited by shares and guarantee;  and of limited duration.  Government fees for companyincorporation are set at US$500, followed by an annual renewal fee of US$400.
The International Banking Order, 2000 , which governs the provision of international banking services to
non-residents, grants four types of licence:  a full international licence for general international banking
business;  two categories of international investment banking licence for international Islamic banking, forfull investment or for restricted banking activities;  and a restricted international banking licence underwhich the licensee may only offer services to persons named in an undertaking described in the applicationfor the licence.  The banks, including their staff, customers or products, will not be subject to tax.  Annualfees amounting to US$50,000 for a full licence, US$35,000 for an investment bank, US$50,000 for an
Islamic full investment bank, and US$25,000 for a restricted licence, are payable to the regulatory authority
(see below).
The International Trusts Order, 2000 , governs the formation of international trusts by non-residents of
Brunei.
Other legislation includes the Money Laundering Order 2000;  the International Limited Partnerships Order
2000;  Criminal Conduct (Recovery of Proceeds) Order 2000;  and the Registered Agents and Trustees
Licensing Order 2000.
Regulation
The activities of the BIFC will be regulated by "The Authority", or the Permanent Head of the Ministry of
Finance, who will act through the Financial Institutions Division (FID).  The Authority will be directlyanswerable to the Minister of Finance.  The role of the Authority, other than regulation, will also include
education, to enhance the promotional role by the private sector.  The Authority's supervisory functions will
also be strengthened through the formation of anti-money-laundering committees and by joininginternational associations such as the IOSCO and the IAIS.
Source: BruneiDirect.Com (undated), Brunei Darussalam International Financial Centre ,
[Online].  Available at:  
http://www.bruneidirect.com/IFC/International_Financial_Centre.htm ,
[24 August 2000].
63. Under the GATS, Brunei's banking commitments extend only to the provision and transfer of
financial information, financial data processing and related software by providers of other financial
services.  For both market access and national treatment, commercial presence requires approval from
the Ministry of Finance;  the three other modes of supply are unbound (Table AIV.2).WT/TPR/S/84 Trade Policy Review
Page 86
(c) Insurance42
Structure
64. Insurance services accounted for around 1.6% of GDP in 1999, growing from 1% in 1990.
As of January 2001, there were 20 insurance compan ies in Brunei, although over 100 are registered
with the Registrar of Companies. According to the authorities, the discrepancy between the total
number of insurance companies registered and those operating in Brunei is because some companiesregistered with the Registrar may not be insurance companies as such, but include companies that
undertake insurance-related services, such as brokers and adjusters.  Of the 20 companies, ten are
locally incorporated
43, seven are branches of foreign companies, and three are foreign underwriting
companies represented by locally incorporated firms.  In addition, there appear to be two brokers.
Policy65. With the exception of the Motor Vehicles (Third-Party Risks) Act, Cap. 90, there appears to
be no specific legislation relating to the insurance industry in Brunei although, according to the
authorities, insurance legislation is currently in its final drafting stages.  The legislation is expected to
include registration and licensing requirements, requirements for the conduct of business, fit and
proper criteria, and capital adequacy, solvency, and financial requirements.
66. Supervision, which has been provided by the Financial Institutions Division (FID) in the
Ministry of Finance, since 1993, is currently based on moral suasion, and regular contacts with the
Insurance Association of Brunei, which represents general insurance companies.  Prior to 1993,
insurance supervision was carried out by the Economic Development Board (EDB), also in the
Ministry of Finance.  Applications for registration by insurance companies are examined by the
Ministry of Finance on a case by case basis.  The information that may be requested by the Ministry
when considering applications includes:  details of the share of equity;  management structure;proposed operational and internal control of the company;  projected financial highlights of the
company including the authorized capital;  and for foreign companies, prior approval from the
regulatory authorities of the country in which th e company originates.  No new insurance companies
have been registered since 1984.
67. The main elements of supervision include a security deposit with the Government of
B$1 million for insurers underwriting motor insurance, minimum paid-up capital of B$1 million for
general insurers, a solvency margin for general insu rers of 20% of net premium income (NPI) of the
previous year, and guidelines for the appointment of foreign employees and motor insurance agents.
Additionally, all insurance and takaful  companies are required to provide their audited annual
accounts, ASEAN unified statistics, and quarterly data on premiums collected, to the FID.
68. GATS commitments were made for direct insurance (life and non-life), reinsurance and
retrocession, insurance and intermediation (broking and agency services) and auxiliary services
(consultancy, actuarial risk assessment, risk management, and maritime loss adjusting).  In general,
Brunei's schedule reflects current requirements and restrictions, including commercial presence only
through companies registered in Brunei for direct insurance;  and purchase of compulsory insurancefor motor third-party liability and workmen' s compensation only from insurance companies
established in Brunei (Table AIV.2).
                                                     
42 Unless otherwise indicated, this section is based on OECD (1999).
43 Two of the locally incorporated companies are takaful  companies, which provide insurance based on
Islamic principles.Brunei Darussalam WT/TPR/S/84
Page 87
(iv) Telecommunications
(a) Structure
69. Brunei's national telecommunications switching network currently has a capacity of over
132,000 lines and is completely digital.  According to the authorities, the network can accommodate
almost twice the present number of subscribers, po tentially allowing penetration to rise to over
45 lines per 100 inhabitants from a penetration rate of 24.8 lines per 100 in 1999 (Table IV.3).  TheGovernment is currently targeting a penetration rate of 33 telephone lines per 100 people by the
year 2005.
44  In addition to fixed line telephony, mobile subscriptions rose from 12.1 per
100 inhabitants in 1995 to 15.2 in 1998.
Table IV.3
Main indicators in telecommunications, 1995-2000
(Units and US$)
1995 1996 1997 1998 1999 2000a
Operational fixed lines 68,127 78,794 76,789 77,420 79,086 83,475
Per 100 inhabitants 23.00 26.00 26.40 24.80 24.80 ..
Capacity .. .. .. .. 132,000 132,000
Mobile subscribers 35,900 42,500 48,900 49,100 49,100 ..
Per 100 inhabitants 12.12 13.93 15.57 15.20 .. ..
No. of payphones 93 185 295 299 444 ..
Paging subscribers 9,218 10,075 12,490 15,292 16,330 ..
Internet subscribers (per 10,000
inhabitants)816 3,391 6,638 9,996 13,861 ..
Fixed line services (B$)
Connection charge 50.00 50.00 50.00 50.00 50.00 50.00
Monthly subscription charge
Residential 17.00 17.00 17.00 17.00 17.00 17.00
Business 25.00 25.00 25.00 25.00 25.00 25.00
Local call chargeb0.00 0.00 0.00 0.00 0.00 0.00
International call chargeb.. .. .. .. .. ..
Mobile telephone services (B$)
Connection charge 200.00 200.00 200.00 200.00 200.00 200.00
Monthly subscription charge 50.00 50.00 50.00 45.00 45.00 45.00
Call chargeb
Peak 0.20 0.20 0.20 0.20 0.20 0.20
Off-peak 0.10 0.10 0.10 0.10 1.10 0.10
.. Not available.
aE x p e c t e d .
bP e r  m i n u t e .
Source: International Telecommunications Union, World Telecommunication Development Report , various years;  Jabatan
Telekom Brunei (JTB), Telekom 2000 ;  and data provided by the authorities.
70. All fixed line telecommunication services, including local and international telephone
services, paging, internet, public payphone and data and telex services, are provided by JabatanTelekom Brunei (JTB), formed as a government department in 1952 and currently under the Ministry
of Communications.  Mobile telecommunication services have been provided since 1994 by
                                                     
44 Jabatan Telekom Brunei (JTB) (1999);  and Jabatan Telekom Brunei (JTB) (undated).WT/TPR/S/84 Trade Policy Review
Page 88
DSTCom, formally a private company registered in  Brunei but currently owned by the Government,
which along with JTB also provides international telephone services.45  According to the authorities,
the issue of whether to grant a second mobile telecommunications licence is under consideration.
71. Although call-back services are not technically authorized, it has not been possible for the
Government to block them.46  The competitive pressure provided by call-back services, according to
the authorities, has led JTB to make a number of reductions in its charges, including removing aB$500 deposit for access to international direct dialling facilities, and reducing international tariffs to
major destinations by up to 66%.
47  However, there have been no changes in connection or
subscription charges for fixed line services during this period;  no data are available on changes in
tariffs for international fixed line telephony over this period, making it difficult to comment on the
overall impact on competition in the sector.48  The authorities state, however, that international call
charges are strictly regulated by the Government with approval required before any changes can be
made.  With growing competition in international telecommunications, the authorities are aware that
cross-subsidization between international charges and local charges (the latter presently being free of
charge) must be reduced and alternative sources of revenue to fund the local network found.
Connection charges for mobile telecommunications services have remained unchanged since 1995,while monthly charges have been reduced from B $50 to B$45;  call charges remain unchanged.
  Other
services such as the economy call service, which allows subscribers to save at least 40% on
international calls to 29 destinations, and the global calling card, allowing users to  make direct calls
from any telephone in over 62 countries, have also been introduced in response to increased
competition.49
72. Other services provided by JTB include internet services through BruNet, launched in 1995,
in cooperation with SingNet of Singapore.  BruNet, which provides facilities for internet andelectronic commerce, has seen its subscriptions grow from 816 in 1995 to 13,861 in 1999.  A second
internet access services provider (IASP) licence was awarded to DSTCom, which started operations in
2000.  In addition to these, three more licences issued to local companies are expected to become
effective from 1 February 2001 for a five-year period.  The additional licences were based on
guidelines issued by the Ministry of Communications, including requirements of at least 51% localownership, a pledge to employ locals and proposals to contribute to the Government's plans to
develop Brunei as a service hub for trade and tourism (SHuTT) by 2003, as well as financial,
technical, and managerial capabilities of the licen ce holders.  According to the authorities, the
Ministry of Communications intends to decide whether to increase the number of IASP licence
holders after two years from 1 February 2001.
50  Faster internet access will be provided through
asymmetric digital subscriber line (ADSL) services launched in November 2000.  The Government
has also invested B$55 million in RAGAM-21, an optical transport and access network, based on
                                                     
45 DSTCom was a subsidiary of the Corporation, which collapsed in 1998.  The Government has
appointed a new board of directors of the company, whic h, according to the authorities, is now a subsidiary of
the Brunei Investment Agency.
46 According to the authorities, local networks are typically more expensive to install in developing
countries than in developed countries and revenue from international calls is necessary to fund the installation ofthe local network.  Call-back services thus deprive th e local operator of funds to expand the local network.
47 Jabatan Telekom Brunei (JTB) (1999) .
48 According to the authorities, international direct  dialling charges by JTB are based on the country
where the calls are terminated.  No information was ava ilable, however, on the evolution of these charges over
the last few years.
49 Jabatan Telekom Brunei (JTB) (1999) .
50 The three additional licence holder s are all 100% locally owned:  the Islamic Bank of Brunei;  QAF
Brunei;  and Royal Brunei Technical Services, a subsidiary of Royal Brunei Airlines.Brunei Darussalam WT/TPR/S/84
Page 89
synchronous digital hierarchy (DGH) technology.  The network, which was completed in July 1999, is
targeted to both government and commercial sectors, and is managed by JTB.
(b) Policy framework
73. Under the Telecommunications Act of 1956, the Government is the exclusive provider of
telecommunications services in Brunei.51  In addition to providing basic telecommunications services,
JTB is also the telecommunications regulator in Brunei.  However, legislation has been draftedenabling the separation of JTB's operational and regulatory functions;  the authorities expect the
legislation to be enacted later in 2001.
52  In the meantime, all regulatory issues are being handled by
an interim body, the Regulatory Unit, in the Ministry of Communications, although legally the
regulator remains JTB.  In addition to its other regulatory functions, the Regulatory Unit currently
monitors and approves prices charged by JTB and DSTCom, to ensure that the proposed charges arenot predatory and anti-competitive.
53  In the longer term, the authorities state that the Regulatory Unit
will develop guidelines including on anti-competitive behaviour, separate accounting, standards of
quality, and code of practice.  A succession order to corporatize JTB is also being finalized, allowing
the assets and liabilities of JTB to be transferred to a new company, which will continue to be owned
by the Government.  It is not clear, however, whet her the Government would consider reducing the
current period of exclusivity granted until 2010 to the two current operators, JTB and DSTCom.  The
authorities indicate that this is still under consideration, as is the issue of universal service, which is
currently an obligation for JTB;  a methodology to address the funding of universal services is
expected to be formulated.
74. According to Brunei's Seventh National Development Plan (1996-2000), the process of
introducing competition in the telecommunications industry has started, with customer terminal
equipment such as telephones, fax machines, and PABXs being licenced to several vendors.54  I n
addition, JTB recently signed a contract with Siemens Advanced Engineering for the provision of new
remote shelter exchanges to rural areas in Brunei;  a project was completed in January 2000 at a cost
of B$1.4 million.55  Similar projects to serve rural communitie s, according to the authorities, are
currently being carried out and are expected to be completed by the second quarter of 2001.  It is
unclear, however, whether competition will be extend ed to the telecommunications services network.
The Government has declared in its APEC Individual Action Plan, that it intends to participate in the
APEC telecommunications mutual recognition agreement (MRA) in 2003.  Longer term plans include
opening up value-added services for competition;  consideration may also be given to issuing licences
for local public switched voice services, public cellular mobile telephone services employing
technologies other than AMPS and GSM, and international telecommunication services.56
75. Brunei participated in the Fourth Protocol to the GATS and made commitments in local,
international, and mobile telephone services.57  In general, Brunei's commitments reflect the existing
                                                     
51 Article 3, Telecommunications Act (Laws of Brunei Darussalam, Chapter 54).
52 The legislative changes include a new Telecommunications Order;  a Succession Act to allow JTB to
transfer its assets and liabilities to a commercial company to be owned by the Government;  and new legislation
to create a new statutory body, which will be the new telecommunications services regulator.
53 According to the authorities, a proposed charge is considered predatory and anti-competitive if there
is obvious evidence that the operator concerned has engaged in unfair bundling of services or the proposedcharge is suspiciously low and undercuts charges by other operators.
54 Government of Brunei Darussalam (1997) .
55 BruneiDirect.Com , 10 November 2000 [Online].  Available at:  http://www.brudirect.com/
DailyInfo/News/Archive/Nov00/101000/bb14.htm [10 November 2000].
56 APEC (1999).
57 Brunei notified its acceptance of the Fourth Protocol to the WTO on 9 January 1998 (WTO
document WT/Let/203, 14 January 1998).WT/TPR/S/84 Trade Policy Review
Page 90
situation in the telecommunications sector:  for value-added services, such as circuit switched data
transmissions, facsimile services, electronic mail, on-line information and database retrieval, and
electronic data interchange services, the only market access limitations for cross-border supply are
that service providers must use the public telecommunications network.  No limitations were placed
on consumption abroad, while commercial presence and the presence of natural persons is unbound,
except as stated in the horizontal section of Brunei's GATS Schedule.  For basic telecommunicationsservices, under limitations on market access, cross-border supply is subject to commercial
arrangements with licenced operators while consumption abroad is unbound.  Market access for
commercial presence is subject to licence by th e regulatory authority and the Companies Act;  in
addition JTB is the exclusive provider of local voice telephony, JTB and DSTCom provide
international telephone services, and DSTCom is the exclusive provider of mobile telephone services.The presence of natural persons is subject to Brunei's horizontal commitments.  Brunei has also stated
in its commitments that JTB's monopoly over voice telephone services will be maintained for ten
years after its privatization and will be subject to a Government review before new suppliers were
allowed into the market.  Similarly, for mobile  telecommunications services, the Government will
consider issuing new licences to mobile telecommunications providers employing other than AMPSand GSM technology, in 2010, if public interest and economic conditions justify this.
(v) Transport
(a) Air transport services
Structure
76. Brunei's main airport is Brunei International Airport at Bandar Seri Begawan;  it has the
capacity to handle around 1.5 million passengers and 50,000 tonnes of cargo a year.  The airport is
serviced by four airlines, linking Brunei to 23 cities in 19 countries.58  In 1999, there were
27,981 flights to and from Brunei, up from 10,856 in 1990.  Passenger movements in and out of
Brunei amounted to almost 990,905, compared with 496,000 in 1990, and the airport handled
23,201 tonnes of cargo in 1999 up from 8,948  in 1990.
77. The national carrier is Royal Brunei Airlines (RBA), a corporation founded in
November 1974, and wholly owned by the Government of Brunei.  The airline currently serves22 destinations in Europe, the Middle East, Asia, and Australia.
59  A code-sharing agreement was
signed with British Midland of the United Kingdom in October 1995.
78. Ground-handling services, including passenger and cargo handling are provided by RBA.  In
addition, some airlines provide their own ground-handling services under bilateral air services
agreements.  The authorities state that consideration would be given to additional companies applyingto provide ground-handling services.  In-flight catering services are provided by RBA's subsidiary,
Royal Brunei Catering (RBC).
Policy
79. Brunei International Airport is owned by the Government of Brunei and managed by the
Department of Civil Aviation in the Ministry of Communications.  One of the goals of the Department
is to develop Brunei International Airport into "the leading regional air hub by providing the highest
                                                     
58 The airlines are Royal Brunei Airlines, Malaysian Airlines, Singapore Airlines, and Thai
International.
59 Royal Brunei Airlines (undated).Brunei Darussalam WT/TPR/S/84
Page 91
level of safety, security, and efficiency of the aviation system, and competitive services and facilities
for the maximum benefit of the aviation community".60
80. In view of its geographical location, Brunei also hopes to establish an air cargo
trans-shipment centre and to establish the airport as a regional refuelling centre by offering attractive
fuel prices and liberalizing the supply of fuel.  At present, the main supplier of aviation fuel is Brunei
Shell Marketing Pte. Ltd.,  but the authorities believe that the current price of aircraft fuel at BruneiInternational Airport is higher than that in a number of airports in the region;  offers to operate a
regional refuelling centre at competitive prices from fixed base operators will therefore be
considered.
61  All air cargo trans-shipment activities are currently carried out by RBA;  however, the
Government advertised a "request for proposal", in early 1999, for offers to establish, operate, and
manage an air cargo centre for trans-shipment and distribution.  The contract was granted to CircleFreight International on condition that the company undertake a joint venture with local companies.
The resulting consortium, BIACC Pte. Ltd., is expected to be operational in the second quarter of
2001.  Additionally, the authorities intend to increasingly involve the private sector in the further
development of Brunei International Airport.
81. Brunei maintains a liberal air service policy.  In order to attract more foreign airlines to
operate into Brunei, a reciprocal "open skies" air service policy has been adopted.  As part of this
effort, bilateral open skies agreements have been signed with New Zealand, Singapore, and the United
States;  these allow designated airlines to provide air services between the two countries with rights to
pick up passengers at intermediate stops or at points beyond the two countries with no limitation on
frequency, capacity, and aircraft type.  Brunei also signed the world's first multilateral open skies
agreement with Chile, New Zealand, Singapor e, and the United States in November 2000.
62
82. Local airlines intending to provide air transpor t services are required to obtain an operating
permit or aircraft operating certificate from the Department of Civil Aviation.  At present there is no
system of allocating landing slots at Brunei Inte rnational Airport;  landing charges are based on the
aircraft's maximum weight at take-off and there are no differences in charges between peak and off-
peak hours.  It would appear that government empl oyees are encouraged to travel with Royal Brunei
Airlines on official trips.
83. Brunei made GATS commitments for rental and leas ing services relating to aircraft with and
without crew.  Market access through cross-border supp ly is subject to certification and approval from
the authorities and infrastructure capacity;  commercial presence is allowed only through a
representative office with a permanent address in Brunei, or through a general sales agent, which must
be a Bruneian controlled company.  Market access for personnel is unbound except for therequirement of a general sales agent in Brunei, who is in turn subject to a local availability test and the
designation of a specified number of local trainees.
63  No limitations are placed on modes 1 and 2
(cross-border supply and consumption abroad) for national treatment;  commercial presence is
unbound, while the presence of natural persons is unbound except as subject to horizontal limitations
and, in the case of rental of aircraft without operators, residency and registration requirements(Table AIV.2).  The authorities state that Brunei Darussalam would consider improving its GATS
                                                     
60 Ministry of Communications, Department of Civil Aviation (undated).
61 A fixed base operator, according to the authorities, provides services at an airport, including line
maintenance and aircraft refuelling.
62 Government of Brunei, On Line News,  "5 APEC Economies Agree on Open Skies Pact" [Online].
Available at:  http://www.brunei.gov.bn/hotnews/0011/17/Open_Skies.htm [17 November 2000].
63 The local availability test gives priority to employing a Bruneian as a general sales agent;  however,
if no Bruneian is available for the post, a foreigner may be appointed as a general sales agent.WT/TPR/S/84 Trade Policy Review
Page 92
commitments in air transport services once the review of air transport services in the WTO has been
completed.
(b) Maritime transport services
Overview
84. In 1998, Brunei's maritime services fleet consisted of 99 vessels, equivalent to a gross
registered tonnage of 370,316 tonnes.  The number of vessels calling at Brunei's Muara Port rose from1,256 in 1995 to 1,460 in 1996 but has been declining since (Table IV.4)  A similar pattern can be
noted with respect to container throughput and cargo handled by the port.  The decline may be due, in
part, to the Asian economic crisis, although vessel arrivals, shipping tonnage, and container
throughput handled at the Port of Singapore has grown steadily during this period, suggesting that
services provided at other regional ports may be more efficient.
64  To respond to this decline, the
Marine and Port Services Departments plan to improve the efficiency of maritime and port services.
Table IV.4
Maritime services, 1995-1999
1995 1996 1997 1998 1999
No. of vessels calling at Muara Port 1,256 1,460 1,437 1,154 877
Container throughput handled (TEUs) 71,050 84,460 78,564 59,238 61,493
Cargo tonnage handled ('000 tonnes) 2,197 2,379 2,092 1,221 1,060
Source: UNCTAD (1999), Review of Maritime Transport 1999 ;  and data provided by the authorities.
85. Brunei's main deep-water port is Muara Port, around 28 kilometres from the capital Bandar
Seri Begawan;  it became operational in February 1973.  In addition, there are two smaller portslocated at Bandar Seri Begawan and at Kuala Belait, both used for smaller vessels carrying
conventional cargo.  Muara Port has gone through extensive improvements since 1973, increasing the
wharf size and overall storage space at the port.  The port has warehouses, container yards,
fish-handling and freezing facilities and cement silos.
65  A 250 metre container terminal was
completed in mid 1997 and became fully operational in 1998.  A contract was signed in October 2000
with Singapore's PSA Corporation, setting up the PSA Muara Container Terminal Sdn. Bhd., which is
expected to operate the terminal for 25 years.66
86. The authorities intend to develop Muara Port as a major regional trans-shipment port.  For
this purpose, the Muara export zone has been crea ted;  around 70,000 square metres of warehousing
facilities are leased to the private sector at concessional rates of up to 40% of the normal rate of B$1
per square foot per month (Chapter III(3)(iv)(d)).   In addition, the Government privatized container
freight stations and introduced the less container load (LCL) for small importers.67
87. According to the authorities, vessel productivity, turnaround time, and berth throughput are
closely monitored by the Ports Department with the aid of modern computer equipment to ensure that
accepted performance indicator targets are maintained at  all times.  Data provided by the authorities
                                                     
64 Shipping tonnage handled by Singapore, for example, increased from 710.5 million tonnes in 1995 to
857.6 million in 1998, while total container throughput grew from 11.8 million TEUs to 15.1 million during the
same period.  Vessel arrivals at the port also increased from 104,014 in 1995 to 140,922 in 1998 (WTO, 2000).
65 Hong Kong Shanghai Bank (HSBC) (1999).
66 The contract was signed between PSA Muara Container Terminal, a joint venture between PSA
Corporation and Brunei's Archipelago Development Corporation, and the Brunei Ports Department ( Straits
Times , 6 November 2000).
67 Government of Brunei Darussalam (1997) .Brunei Darussalam WT/TPR/S/84
Page 93
show that current indicators for productivity per hour and turnaround time for cargo vessels are
126.8 tonnes and 22.2 hours, respectively, while the turnaround time for container vessels is currently
13.6 hours.  It is not clear, however, whether productivity and turnaround times have improved
significantly in recent years.  The port also offers storage facilities that are to be expanded to cover a
container stacking area of 50,000 square metres and an additional storage capacity of 3,000 TEUs and
2,500 TEUs for laden and empty containers, respectively.68
Policy
88. The maritime transport sector is regulated by the Marine Department.  Merchant shipping is
subject to the Merchant Shipping Act, 1984, as amended.  The Act establishes rules, inter alia,  for
registering ships under the Brunei flag, licensing of ships operating in Brunei waters, and maritime
safety.  All Brunei ships must be registered under the Brunei flag unless exempt.69  According to the
authorities, Brunei encourages the registration of ships under the Brunei flag, subject to the rules and
regulations of the Merchant Shipping Act.  The Act is presently being reviewed and amended to
incorporate international shipping rules, in cluding those under the International Maritime
Organization Convention.  The authorities also state that the Department is upgrading institutional
capacity to ensure maritime safety and sustainabl e development.  Documents required include the
shipbuilders certificate, the bill of sale, and a government surveyor's certificate.  Brunei registered
ships may be required to employ a certain percentage of Brunei nationals, as determined by the
Minister although it is not clear what the practice is.
89. All ships operating in Brunei waters, either wholly owned by Brunei nationals or by a
corporation established in Brunei, must be registered with or licenced by the Registrar of Brunei Ships
in the Marine Department.  Applications must be accompanied by, inter alia,  a declaration of
ownership, technical details of the vessel, as well as details of the manager, who must be resident inBrunei, and an agent.
70
90. Port services are regulated by the Ports Department, while the navigation of vessels entering
Muara Port come under the purview of the Marine Department, both in the Ministry of
Communications.  The Ports Department manages the Muara Port, which handles some 60,000 TEUs
each year, and provides infrastructure support for port operations.  Some of the operations, includingstevedoring, shore crane services, and cargo handling forklift services, appear to be provided by the
private sector.
71  Towage and tug boat services are provided by the Marine Department.
91. Brunei made no commitments under the GATS with respect to maritime services.
(vi) Tourism
(a) Structure
92. The tourism industry in Brunei is relatively undeveloped, with around 700,000 foreign
arrivals in 1996.  The hotels and restaurants sector accounted for around 2% of GDP in 1999, up from
1% in 1990.  Most tourists, around 90%, seem to  come from other ASEAN countries.  There were
around 1,900 hotel rooms to accommodate tourists in 1999.  However, according to the authorities, in
order to reach a target of over 1 million visitors, additional facilities, including accommodation,transport and communication, and banking services, need to be developed.
                                                     
68 Ports Department (undated b).
69 Exempted ships include ships exceeding 15 tonnes burden and ships licensed in Brunei.
70 Marine Department (undated) .
71 Ports Department (undated b ).WT/TPR/S/84 Trade Policy Review
Page 94
(b) Policy
93. Brunei has designated the year 2001 as "Visit Brunei Year".  Tourism promotion is carried
out by a newly formed Division for Industrial Promotion and Tourism Development in the Ministry of
Industry and Primary Resources.72  The Ministry intends to develop Brunei as "a unique tourism
destination and a gateway to tourism excellence in south east Asia while taking into consideration the
traditional and cultural values of Brunei and the sustainability of its environment."73
94. The new "Tourism Master Plan", launched in July 1999, focuses on the economic and social
benefits of tourism for Brunei, while preventing an erosion of Brunei's socio-cultural and religious
values, and ensuring conservation of the environment.  Particular activities targeted by the Master
Plan include niche markets such as eco-tourism, adventure and cultural tourism, theme parks, and
cruising.74  The Plan also outlines investment strategies and policies for infrastructure development in
order to promote the sector.75  In this regard, the Government would like to see tourist arrivals
increase to 1 million by 2000.  In addition to improving infrastructure, the Government is also trying
to attract local employment in the industry;  it announced in July 2000 that it would compensate
employers in the industry for up to 80% of their costs of training local workers.  The Government is
also making efforts to develop the sector in eco-tourism, international exhibitions and fora, and as agateway for the BIMP-EAGA area.
76
95. The Division for Industrial Promotion and Tourism Development is also responsible for
regulating tourism services in Brunei and issuing licences for tourism services providers.  Travel
agencies are regulated and licenced by the Economic Development Board in the Ministry of Finance,
under the Travel Agents Act (Chapter 103).  Licences issued for travel agencies are usually valid for a
year and expire at the end of the calendar year;  the licences are not transferable.77
96. Brunei made no commitments under the GATS in tourism services.
                                                     
72 The development of tourism in Brunei was transferred from the Economic Development Board (now
part of the Department of Economic Planning and Development) in the Ministry of Finance to the Ministry of
Industry and Primary Resources in March 1995.
73 Ministry of Industry and Primary Resources (undated d).
74 Ministry of Industry and Primary Resources (1998).
75 Borneo Bulletin (2000) .
76 Government of Brunei Darussalam (1997) .
77 Persons or companies applying for a licence must be registered in Brunei and are required to supply
documents including evidence of residence in Brunei and at least two years executive experience in the travelagency business;  and no criminal offences (Article 5 of the Travel Agents Regulations (1982).  Furthermore,any changes to the partnership or share capital, or sharehol ders in the case of a company, must be notified to the
Board within 14 days of such a change (Article 3 of the Travel Agents Regulations (1982)).Brunei Darussalam WT/TPR/S/84
Page 95
REFERENCES
Agricultural Department (1973), Regulations Governing the Import of Dogs, Cats and Related
Species of Animals into Brunei Darussalam (Revised) and Effective from 1 November 1973 ,
Agricultural Department  Circular No. 9/1973.
APEC (1996), APEC:  Government Procurement Survey on Government Proc urement Systems in
Member Economies:  Brunei Darussalam , APEC GPA (1), February.
APEC (1998), Project Report on Food Labelling Laws, Regulations and Standards in the APEC
Region , Beijing China [Online].  Available at:  http://www.apecsec.org.sg/scsc/scsc.html
[17 November 2000].
APEC (1999), Brunei Darussalam - APEC Individual Action Plan, Matrix of Brunei Darussalam's
Individual Action Plans, 1999 .
APEC (2000 a), Brunei Darussalam - APEC Individual Action Plan.
APEC (2000 b), APEC Leaders Declaration , Brunei Darussalam, 16 November [Online].  Available
at:  http://www.apecnews.org.bn/org/apecnews/news 1116-8.htm [17 November 2000].
APEC (undated), Brunei Priorities in 2000  [Online].  Available at:  http://www.apecsec.
org.sg/97brochure/ 97brochure.html [14 August 2000].
ASEAN (1999), Joint Press Statement:  First Meeting of  the ASEAN Investment Area (AIA) Council ,
5 March [Online].  Available at:  http://www.aseansec.org/economic/aia01.htm [16 August 2000].
ASEAN (2000), ASEAN Leaders adopt e-ASEAN Agreement , the Fourth ASEAN Informal Summit,
22-25 November, Singapore.
ASEAN Secretariat (undated a), The Thirty Second ASEAN Economic Ministers Meeting ,
3 October 2000, Chiang Mai, Thailand:  Joint Press Statement [Online].  Available at:
http://www.aseansec.org/economic/invest/jps32aem.htm [23 November 2000].
ASEAN Secretariat (undated b), ASEAN Industrial Cooperation Scheme  [Online].  Available at:
http://www.aseansec.org/ economic/aico1.htm [16 August 2000].
ASEAN Secretariat (undated c), Intellectual Property  [Online]. Available at:
http://www.aseansec.org/economic/ov_ipv.htm [17 October 2000].
ASEAN Secretariat (undated d), ASEAN Framework Agreement on Intellectual Property Cooperation
[Online].  Available at:  http://www.aseansec.org/economic/agr_ipr.htm [17 October 2000].
ASEAN Secretariat (undated e), Memorandum of Understanding (MOU) on ASEAN-EU Intellectual
Property Rights Cooperation Programme between individual ASEAN countries and the EU  [Online].
Available at:  http://www.aseansec.org/ economic/or_ipr.htm [17 October 2000].
Asian Development Bank (undated), Excerpts from the ADB Study on the EAGA  [Online].  Available
at:  http://www.brunet.bn/org/bimpeabc/excerpts.htm [25 October 2000].
Borneo Bulletin (2000), Brunei Yearbook:  Key Information on Brunei 2000.WT/TPR/S/84 Trade Policy Review
Page 96
Brunei Darussalam Economic Council (1999), Report of the Brunei Darussalam Economic Council ,
September, Brunei Darussalam.
Brunei Industrial Development Authority (undated), About us  [Online].  Available at:
http://www.bina.gov.bn/about_us/index.htm [28 August 2000].
Department of Information Technology and State Stores (undated) Mission and Functions  [Online].
Available at:  http://www.itss.gov.bn/misi/index.htm [6 October 2000].
Government of Brunei  Darussalam (1997), Seventh National Development Plan 1996-2000.
Government of Brunei Darussalam (undated a), Councils of State  [Online].  Available at:
http://www.councils.gov.bn/org.htm [16 August 2000].
Government of Brunei Darussalam (undated b), Constitution of Brunei  [Online].  Available at:
http://www.brunei.gov.bn/ governmen t/contitut.htm [4 August 2000].
Hong Kong Shanghai Bank (HSBC) (1999), Brunei Darussalam , HSBC Business Profile Series, First
quarter 1999, Ninth edition.
IMF (2000), Annual Report on Exchange Arrangements and Exchange Restrictions.
Jabatan Telekom Brunei (JTB) (1999), Telekom '99.
Jabatan Telekom Brunei (JTB) (undated), Telekom '98  [Online].  Available at:
http://www.brunet.bn/telecom/ jtb/t el98/front.htm [24 August 2000].
Marine Department (undated), A Guide to the Registration of Ships in Brunei Darussalam.
Ministry of Communications (undated), SHuTT  [Online].  Available at:
http://www.brunet.bn/gov/mo c/shutt/ [25 August 2000].
Ministry of Communications, Depart ment of Civil Aviation (undated), Mission and Objectives
[Online].  Available at:  http://www.civil-aviation.gov.bn/mission/index.htm [25 August 2000].
Ministry of Development (undated a), Investment Opportunities: Submitting Project Proposal
[Online].  Available at:  http://www.mod.com.bn/ioppor_4.htm [13 July 2000].
Ministry of Development (undated b), Investment Opportunities:  Incentives  [Online].  Available at:
http://www.mod.com.bn/ioppor_2.htm [13 July 2000].
Ministry of Health (undated), Pharmaceutical Enforcement Services  [Online].  Available at:
http://brunet.bn/gov/moh/services/pha/b_pha_btn5.htm [22 August 2000].
Ministry of Industry and Primary Resources (1993), Brunei Darussalam: Profitable Partnership , One
Stop Agency.
Ministry of Industry and Primary Resources (1998), Tourism Masterplan for Brunei Darussalam,
KPMG, 27 November.
Ministry of Industry and Primary Resources (undated a), Business Guide  [Online].  Available at:
http://www.brunet.bn/homepage/bus_com /guide/busguid.htm [16 August 2000].Brunei Darussalam WT/TPR/S/84
Page 97
Ministry of Industry and Primary Resources (undated b), Agriculture , Department of Agriculture
[Online].  Available at:  http://www.agriculture.gov.bn/ [21 August 2000].
Ministry of Industry and Primary Resources (undated c), Corporate Investment: Philosophy  [Online].
Available at:  http://www.semaun.gov .bn/philosophy.htm [28 August 2000].
Ministry of Industry and Primary Resources (undated d), Tourism Development , Division for
Industrial Promotion and Tourism Development [Online].  Available at:http://www.brunei.gov.bn/about_brun ei/tourism.htm [29 August 2000].
Mintz Jack M. (1990), Corporate Tax Holidays and Investment , The World Bank Economic
Review 4(1), Washington, D.C.
Mintz, Jack M. and Thomas Tsiopoulos (1992 ), Corporate Income Taxation and Foreign Direct
Investment in Central and Eastern Europe , Foreign Investment Advisory Service, Occasional paper 4,
The World Bank, Washington, D.C.
OECD (1995), Taxation and Foreign Direct Investment:  The Experience of Transition Economies,
Paris.
OECD (1999), "An Overview of the Insura nce Industry in Brunei Darussalam", in Insurance
Regulation and Supervision in Asia , Centre for Cooperation with Non-Members, OECD, Paris.
Plant Quarantine Services (1993), Guides and Procedures.
Ports Department (1999), Muara Port 1999.   Ministry of Communications.
Ports Department (undated a), Muara Export Zone  [Online].  Available at:  http://www.
ports.gov.bn/export/index.htm [25 October 2000].
Ports Department (undated b), Ports Operation  [Online].  Available at:  http://www.
ports.gov.bn/ports/ index.htm [24 August 2000].
Prime Minister's Office (undated a), Petroleum Unit  [Online].  Available at:  http://www.petroleum-
unit.gov.bn/brief.htm [21 August 2000].
Prime Minister's Office (undated b), Petroleum Unit: Domestic and International Involvement
[Online].  Available at:  http://www.petroleum-unit.gov.bn/domestic.htm [21 August 2000].
Royal Brunei Airlines (undated), Corporate News  [Online].  Available at:  http://www.
bruneiair.com/aboutus/ about_news.html [10 August 2000].
Royal Customs and Excise Department (2000), Strategy  [Online].  Available at:
http://www.customs.gov.bn/strategi/index.htm [21 August 2000].
Shah, Anwar (Editor) (1995), Fiscal Incentives for Investment and Innovation , Oxford University
Press.
United States Departme nt of State (1999), Background Notes:  Brunei, August 1999 , Bureau of East
Asian and Pacific Affairs [Online].  Available at:  www.state.gov/www/background_notes/
[19 July 2000].WT/TPR/S/84 Trade Policy Review
Page 98
World Intellectual Property Report  (2000), Vol. 14, No. 7, 15 July [Online].  Available at http://pubs.
powerize.hoovers.com/ [17 October 2000].
WTO (2000), Trade Policy Review - Singapore.