Source: http://fsmlaw.org/chuuk/code/title16/T16_Ch04.htm
Timestamp: 2019-04-20 08:36:52+00:00

Document:
§ 1204. Requirement that a foreign investor obtain a foreign investment permit.
§ 1205. Categories of economic sectors.
§ 1206. Relationship Between the Chuuk State Government and the National Government Regarding the Regulation of Foreign Investment within the Territory of Chuuk State.
§ 1207. Application Procedures for Chuuk State Foreign Investment Permits.
§ 1208. Form, fees, renewal, modification, and cancellation of a Chuuk State Foreign Investment Permit.
§ 1209. Expatriate worker authorizations and entry permits.
§ 1210. Reports by holders of Chuuk State Foreign Investment Permits.
§ 1211. Reports by the Director.
§ 1212. Guarantees and entitlements regarding foreign investments.
§ 1213. Injunction and penalties.
§ 1217. Unauthorized foreign business.
This Act Chapter is known and may be cited as the "Chuuk State Foreign Investment Act of 1998."
Source: CSL 4-99-03, § 1, modified.
Editor's note: CSL 4-99-03 that created this Chapter was signed into law by the Governor on February 17, 1999.
The purpose of this Act Chapter is to encourage foreign investment within the territory of Chuuk State in a manner that serves the economic, social, and cultural interests of Chuuk State. This purpose shall be borne in mind in the implementation and interpretation of the provisions of this Act Chapter.
Source: CSL 4-99-03, § 2, modified.
(2) "Citizen" means a citizen of the FSM.
(3) "Director means the Director of the Chuuk State Department of Commerce and Industry.
(4) "Eco-tourism" means the business of engaging in tourism that is focused on bringing visitors to Chuuk to view its cultures, traditions, land, and marine environment with a minimal negative or intrusive effect. Eco-tourism is subject to all appropriate governmental regulations.
(ix) providing professional services as an attorney, physician, dentist, engineer, surveyor, accountant, auditor, computer consultant or other professional providing service for a fee; provided, however, that such a professional shall not be considered to be "engaging in business" unless he or she, while present in the FSM, performs his or her respective professional services for more than fourteen (14) days in any calendar year.
(9) "FSM Foreign Investment Act" means the Foreign Investment Act of 1997, enacted by the Congress of the Federated States of Micronesia as FSM Public Law No. 10-49, and codified in the FSM Code, Title 32, Chapter 2.
(13) "FSM R&D Department" means the Department of Resources and Development of the FSM or Department of Economic Affairs.
(16) "Chuuk State Foreign Investment Permit" means a permit issued by the Director in accordance with the provisions of this Act Chapter.
(17) "Chuuk State Foreign Investment Regulations" means regulations promulgated by the Director in accordance with the provisions of this Act Chapter.
(23) "Professional Services" means an attorney, physician, dentist, engineer, surveyor, accountant, auditor, computer consultant or other types of professionals providing service for a fee. The Director may designate additional categories in the Chuuk State Foreign Investment Regulations.
(25) "Secretary" means the Secretary of the FSM R&D Department.
Source: CSL 4-99-03, § 3, modified.
A noncitizen may not conduct any activity in the territory of Chuuk State that amounts to "engaging in business", as defined in Section 1203 of this Act Chapter and Section 203 of the FSM Foreign Investment Act, unless that non-citizen holds a currently valid Foreign Investment Permit authorizing that noncitizen to conduct that activity.
Source: CSL 4-99-03, § 4, modified.
(1) Categories for National Regulations--- those economic sectors identified by the FSM Foreign Investment Act or FSM Foreign Investment Regulations as categories A, B and C.
(i) such other economic sectors as the Director may designate in the Chuuk State Foreign Investment Regulations as being on the Chuuk State Red List.
(v) Such other economic sectors as the Director may designate in the Chuuk State Foreign Investment Regulations as being on the Chuuk State Green List.
Source: CSL 4-99-03, § 5, modified.
(d) the issuance of Chuuk State Foreign Investment Permits pursuant to Section 1207 of this Act Chapter in respect of foreign investment taking place or proposed to take place within the territory of Chuuk State in all economic sector categories other than those designated for inclusion in A, B, C, or D pursuant to this Act Chapter and the FSM Foreign Investment Act.
Source: CSL 4-99-03, § 6, modified.
(1) An application for a Chuuk State Foreign Investment Permit shall be made on the form or forms prescribed in the Chuuk State Foreign Investment Regulations, as may be supplemented in particular cases by order of the Director in accordance with Section 1216(3) of this Act Chapter. Such application form or forms shall be made publicly available by the Director. The application form shall require the applicant to identify clearly the person(s) resident in Chuuk State who are designated as agent(s) for service of process.
(e) hold a public hearing for the review of any new or renewal application submitted which falls under Category E (Chuuk State Amber List), if, in the Director's discretion he determines one is appropriate. Any required hearing shall be held pursuant to the provisions of the Chuuk State Foreign Investment Regulations.
(C) meets any minimum value standards established pursuant to Section 1206(4)(c) of this Act Chapter.
(g) Place conditions or restrictions on the issuance of the Chuuk State Foreign Investment Permit as deemed appropriate.
(3) Upon taking any action described in Subsection 7(2)(b), (2)(d), or (2)(f) above of this Section, the Director shall, within such periods of time as may be prescribed for this purpose in the Chuuk State Foreign Investment Regulations, advise the applicant of the action and the reasons therefor.
(4) The amount of the application fee to be paid by an applicant seeking a Chuuk State Foreign Investment Permit shall be established in the Chuuk State Foreign Investment Regulations.
(b) sent to the Secretary, for insertion in a register to be maintained by the FSM R&D Department for this purpose.
(b) provide to the Director additional information or explanation to indicate how, in the applicant's opinion, the foreign investment would satisfy such criteria. On receipt of such modifications or additional information, the Director shall review the application and make a determination under the procedures prescribed in Section 1207 above of this Chapter. There is no limit to the number of times an applicant may modify an application in order to meet the requirements for a Chuuk State Foreign Investment Permit.
Source: CSL 4-99-03, § 7, modified.
(1) A Chuuk State Foreign Investment Permits shall be in the form prescribed in the Chuuk State Foreign Investment Regulations.
(2) In the application for a Chuuk State Foreign Investment Permit, the holder shall fulfill the requirements, if any, included in the Chuuk State Foreign Investment Regulations for the payment of an application fee.
(3) Upon the issuance of a Chuuk State Foreign Investment Permit, the holder shall fulfill the requirements, if any, included in the Chuuk State Foreign Investment Regulations for the payment of an annual permit fee.
(4) A Chuuk State Foreign Investment Permit shall be valid for one year, and, unless it has been canceled, suspended, or surrendered pursuant to Subsections 8 (8)-(11) of this Section below, it shall be automatically renewable on an annual basis upon the fulfillment of the requirements, if any, included in the Chuuk State Foreign Investment Regulations for the payment of an annual fee.
(5) A Chuuk State Foreign Investment Permit shall not be transferable between investments or investors and shall not be assignable to any investment or investor other than the one for which it was issued.
(6) The holder of a Chuuk State Foreign Investment Permit may not make a change in the business for which the holder has obtained a Chuuk State Foreign Investment Permit without obtaining their new Chuuk State Foreign Investment Permit for that purpose under Section 1207 of this Act Chapter or, if applicable, a new FSM Foreign Investment Permit under Section 207 of the FSM Foreign Investment Act or obtaining a modification in the terms of their present Chuuk State Foreign Investment Permit. Such a modification may be requested by the holder, and granted by the Director, in accordance with such (7) procedures and requirements as the Director may establish in the Chuuk State Foreign Investment Regulations.
(b) alters, changes, modifies or transfers the amount of the ownership interest which the non-citizen retains.
(g) the holder fails to comply with any applicable State or National laws.
(c) pay any fines or other penalties that may be imposed under Section 1213 of this act Chapter or under Chuuk State Foreign Investment Regulations.
(a) The Director, or the Director's designee, may schedule a hearing on the matter before the Director, or the Director's designee. At least 21 days written notice of the hearing, stating the alleged ground for cancellation, shall be given to the holder of the Chuuk State Foreign Investment Permit, at the address designated on the application for such notice. If during that time the holder of the Chuuk State Foreign Investment Permit takes action satisfactory to the Director to disprove the allegations or otherwise remedy the situation, the Director may cancel the hearing and reinstate the Chuuk State Foreign Investment Permit if it was temporarily suspended.
(b) Hearing procedures shall be prescribed by the Director in the Chuuk State Foreign Investment Regulations and shall include the right of the holder of the Chuuk State Foreign Investment Permit to participate and to be represented by counsel, to call witnesses, and to cross-examine witnesses called against the holder of the Chuuk State Foreign Investment Permit.
(c) Within the ten days after a hearing, the Director shall issue a written decision including reasons for the action taken and the remedy to be imposed pursuant to Subsection 8 (9) of this Section above, and shall transmit that decision immediately to the holder of the Chuuk State Foreign Investment Permit.
(d) If a decision has not been issued pursuant to Subsection 8 (10)(c) of this Section above, within the ten days specified, any temporary suspension ordered by the Director shall automatically end, and the validity of the Chuuk State Foreign Investment Permit shall automatically be reinstated.
(e) Within 20 days after receiving the notice of the decision of the Director, the holder of the Chuuk State Foreign Investment Permit may appeal the decision to the Chuuk State Court. Copies of any notice of appeal shall be served on the Director and the Attorney General of Chuuk State.
(11) A holder of a Chuuk State Foreign Investment Permit may surrender it by meeting requirements specified for this purpose in the Chuuk State Foreign Investment Regulations. Mere cessation of engaging in business in Chuuk State, without meeting such requirements, does not relieve the holder of Chuuk State Foreign Investment Permit from the requirements incident thereto.
Source: CSL 4-99-03, § 8, modified.
Sections 210, 211, and 212 of the FSM Foreign Investment Act and the provisions of the FSM Foreign Investment Regulations issued pursuant to those sections, sets forth the entitlements to expatriate worker authorization (EWAs') and entry permits. The Director will work with the FSM Immigration Division, as needed, to assist the holder to obtain any necessary EWA.
Source: CSL 4-99-03, § 9.
(1) The holder of any Chuuk State Foreign Investment Permit shall submit to the Director such reports concerning the foreign investment as the Director may prescribe in the Chuuk State Foreign Investment Regulations. Details of the information required, the reasons for the requirements, and the frequency and form of such reports shall be set forth in the Chuuk State Foreign Investment Regulations.
(2) Any change in foreign ownership of an investment for which a Chuuk State Foreign Investment Permit has been issued shall be reported immediately to the Director, who may take such action as the Director considers appropriate in respect of the Chuuk State Foreign Investment Permit, including its cancellation if appropriate under the provisions of Section 1208 of this act Chapter.
Source: CSL 4-99-03, § 10.
(1) The Director shall publish information annually, in such form and detail as may be prescribed in the Chuuk State Foreign Investment Regulations, concerning the extent of foreign investment in Chuuk State.
(2) The Director shall be guided by the provisions of Section 215 of the FSM Foreign Investment Act, and by the provisions of the FSM Foreign Investment Regulations issued thereunder, concerning reports to be submitted by States to the FSM National Government regarding foreign investment.
Source: CSL 4-99-03, § 11.
(1) The Director shall be guided by and shall take no action inconsistent with the provisions of Sections 216 and 217 of the FSM Foreign Investment Act or with any provisions of the FSM Foreign Investment Regulations issued thereunder concerning compulsory (2) acquisition of foreign investment property and transfers of earnings and capital relating to foreign investments.
(3 2) Upon payment of such additional fees as the Director may prescribe for this purpose, the holder of a Chuuk State Foreign Investment Permit shall be entitled, for 5 five years, to an exemption from any future changes in the Chuuk State transaction and sales tax rates and similar rules applicable to the business entity to which the permit applies.
(4 3) Subject to the provisions of both the FSM Foreign Investment Act, and this act Chapter, and subject to regulations promulgated pursuant to those provisions, the Government of Chuuk State shall not take action, or permit any subsidiary political unit within Chuuk State to take action, that would result in a foreign investor being given treatment that is less favorable than the treatment given to citizens engaging in business in Chuuk State.
Source: CSL 4-99-03, § 12, modified.
(1) Where, on application by the Chuuk State Attorney General, the Chuuk State Court is satisfied that a noncitizen has acted, or is about to act, in contravention of the provisions of the FSM Foreign Investment Act, the provisions of this act Chapter, the provisions of the FSM Foreign Investment Regulations, or the provisions of the Chuuk State Foreign Investment Regulations, the court may impose an injunction on any such action. The Attorney General shall provide to the concerned noncitizens(s) at least two business days prior notice of an intention to file such an application with the court.
(c) initiate measures for the imposition of criminal or civil penalties as described in Subsections 13 (3) and (4) of this Section below or in other laws of Chuuk State.
(3) Any person guilty of willfully contravening the provisions of Section 1204 of this act Chapter commits a crime as set forth in Section 220 of the FSM Foreign Investment Act, and upon conviction shall be subject to the penalties provided for in said section.
(c) in any case, the forfeiture to the Chuuk State Government of assets or property rights in any business entity engaging in business in contravention of this act Chapter; provided, however, that the value of such assets or property so forfeited shall not be unreasonable in relation to the illegal behavior and injury it caused. The Attorney General shall file and prosecute an action for the imposition of civil penalties in the appropriate court.
Source: CSL 4-99-03, § 13, modified.
A decision by the Director pursuant to Section 1207 of this Act Chapter regarding an application for a Chuuk State Foreign Investment Permit may be appealed by the applicant. The notice of any such appeal shall be filed with the Chuuk State Court within 30 days of receipt of notice of the Director's decision. A copy of any such notice shall also be served on the Attorney General of Chuuk State and the Director. Such appeals shall be made under applicable rules of civil procedures.
Source: CSL 4-99-03, § 14.
In carrying out the responsibilities imposed by this act Chapter regarding the regulation of foreign investment in Chuuk State, the Director shall maintain the confidentiality of any sensitive business information relating to a particular foreign investor or prospective foreign investor, if so requested by such person; provided, however, that this provision shall not prevent the Director from disclosing information upon order of a court or pursuant to other laws and regulations of Chuuk State or of the FSM.
Source: CSL 4-99-03, § 15.
(1) Primary responsibility for the enforcement of this act Chapter shall be placed in the Attorney General of Chuuk and, as to criminal sanctions provided in Section 1217 of this act Chapter, in appropriate law enforcement authorities within Chuuk State.
(2) In carrying out the responsibility imposed by this act Chapter, the Director may require the attendance of any citizen or noncitizen at a meeting or hearing conducted by the Director and may require such persons to testify or to produce at, before, or after such meeting or hearing documents, information, and things relevant to enforcement of the provisions of this act Chapter.
(3) The Director shall promulgate the regulations necessary to implement this act Chapter and any amendments or modifications thereto the Director deems necessary, subject to legislative approval of said regulations and amendments or modifications thereto, which regulations and amendments or modifications shall have the force and effect of law.
Source: CSL 4-99-03, § 16, modified.
Unauthorized foreign business is engaging in business as defined in Section 1203(5) of this act Chapter without having complied with Section 1204 of this act Chapter, or engaging in business not authorized by a Foreign Investment Permit issued by the FSM or Chuuk State, or failing to comply with the provisions of the Chuuk State Foreign Investment Regulations. Unauthorized foreign business is a category one misdemeanor.
Source: CSL 4-99-03, § 17, modified.
(2) cease conducting the activity.
Source: CSL 4-99-03, § 19, modified.

References: § 1205

§ 1206

§ 1207

§ 1208

§ 1209

§ 1210

§ 1211

§ 1212

§ 1213

§ 1217
 § 1
 § 2
 § 3
 § 4
 § 5
 § 6
 § 7
 § 8
 § 9
 § 10
 § 11
 § 12
 § 13
 § 14
 § 15
 § 16
 § 17
 § 19