 
RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/ACC/SPEC/NPL/5 
20 June 2003 
 (03-3337) 
Working Party on the 
Accession of Nepal  
 
 
  
DRAFT REPORT OF THE WORKING PARTY 
 ON THE ACCESSION OF  THE KINGDOM OF NEPAL  
TO THE WORLD TRADE ORGANIZATION 
 
Introduction
 
1. The Government of the Kingdom of Nepal applied for accession to the World Trade 
Organization in December 1995.  Having regard to the decision adopted by the General Council on 31 January 1995, the existing Working Party on the Accession of Nepal to the GATT 1947 continued as a WTO accession Working Party with the mandate to examine the application of the 
Government of Nepal to accede to the World Trade Organization under Article XII, and to 
submit to the General Council recommendations which may include a draft Protocol of Accession. The terms of reference and the membership of the Working Party are reproduced in document WT/ACC/NPL/4/Rev.7. 
2. The Working Party met on 22 May 2000,  12 September 2002, 23 May and [.............]  
2003. At its meeting on 15 October 2002, the General Council took note that H. E. Mr. P.- L. 
Girard (Switzerland) had been appointed Chairman of the Working Party in replacement of H. E. Mr. R. Farrell (New Zealand) who had left Geneva and was no longer available. 
Documentation provided
 
3. The Working Party had before it, to serve as a basis for its discussions, a Memorandum 
on the Foreign Trade Regime of Nepal (document WT/ACC/NPL/2 and Corr. 1 and Addenda), the questions submitted by Members on the foreign trade regime of Nepal, together with the replies thereto, and other information provided by the authorities of Nepal (WT/ACC/NPL/3 and Corr.1 and Addenda;  WT/ACC/NPL/5;  WT/ACC/NPL/6;  WT/ACC/NPL/7;  
WT/ACC/NPL/9;  WT/ACC/NPL/10 and Revision 1;  WT/ACC/NPL/11;  WT/ACC/NPL/12;  
WT/ACC/NPL/13;  WT/ACC/NPL/14;  WT/ACC/NPL/15; ......………), including the legislative texts and other documentation listed in Annex I.  The Legislative Action Plan of Nepal aimed a WT/ACC/SPEC/NPL/5 
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the implementation of the WTO Agreements circulated in document WT/ACC/NPL/10/Rev. 1 is 
reproduced in Annex III.  
Introductory statements
 
4. The representative of Nepal  said that the Kingdom of Nepal, a least developed land-
locked mountainous country with  a small but open economy, had been facing the problems of poverty, marginalization, weak institutional capacities and financial and technical 
constraints. The population of the country was estimated to be 22 million people. Per capita 
income was US$240.-, with  38 per cent of the population living with less than one dollar a day, and 82 per cent living with less than two dollars a day. Agriculture which was dependent on the vagaries of the monsoon was the main source of income and employment. Agriculture accounted for around 41 per cent of GDP and more than 80 per cent of employment. Rice was 
the major cereal product followed by  maize, wheat and millet. Woollen carpets and ready made 
clothing were the leading export items constituting about 85 per cent of total overseas exports. Other important industrial sectors were food, beverage and cement production. Tourism, a major source of foreign exchange earnings, represented 2-3 per cent of GDP. High transit costs, 
absence of basic infrastructures, dependence on traditional technologies were some of Nepal's 
structural limitations. Due to the fact that total exports met less than half Nepal's import requirements, donor support was essential for the country's economic survival.  
5. The representative of Nepal said that notwithstanding a difficult economic and political  
environment and internal instability and strife, Nepal had sought to achieve a peaceful 
settlement and to systematically reform and open the financial and economic sectors. Nepal's Government had liberalized the economy unilaterally because of the conviction that economic reform and trade liberalization would attract investments, promote development and, contribute to  generate productive employment and alleviate poverty,  in a general framework 
of equity, participation and market based efficiency. Limited physical, material and human 
resources had constrained Nepal's capacity to reap the benefits of globalization and liberalization. In order to pursue the accession process effectively, Nepal had very important technical assistance needs including capacity building.  Accession to WTO was an essential 
component of the country's integration into the world economy. The commitments to be 
undertaken by Nepal in the accession negotiations should be consistent with the capacity of a land-locked LDC and, in accordance with the decision adopted by WTO General Council on 10 December 2002 with respect to the accession of LDCs, take into account the important development, financial and trade needs of Nepal.  WT/ACC/SPEC/NPL/5 
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6. The representative of Nepal noted that trade was not an end itself. It was a means to 
develop the underdeveloped economies, ensure the flows of knowledge, technology and 
resources with the aim of improving the global standards of living of all mankind, including in 
particular the poorer segments of mankind.  Globalization should pave the way towards a new era of humanity and civilization with a fair and equitable distribution of welfare. 
7. Recalling the decisions adopted at the Fourth WTO Ministerial Conference and at the 
Third UN Conference on LDCs, the representative of Nepal noted that as an LDC Nepal would 
need transitional arrangements in order to bring its foreign trade regime into full consistency with the WTO Agreements on Customs Valuation, TBT, SPS and TRIPS. The Nepalese Government planned to accomplish this task in accordance with the Legislative Action Plan submitted to the WTO.  
8. Members of the WTO welcomed Nepal's application to accede to the World Trade 
Organisation.  They expressed the view that WTO membership would be important for Nepal's development and integration into the world trading system and would also constitute a major step forward in the WTO evolution to achieving the goal of universality and representation of 
the interests of all trading nations.  In expressing appreciation for the significant efforts already 
undertaken by Nepal to achieve compliance with WTO rules and principles, they noted that further work was needed in order to implement some important WTO Agreements.  WTO Members pledged to work constructively with Nepal in accomplishing this objective, and 
offered to provide technical assistance to facilitate Nepal's accession.  WTO Members looked 
forward to Nepal's early accession on appropriate terms including transitional arrangements to enact and implement the legislative modifications required.  Recalling Nepal's status as a least-developed country, some Members  acknowledged Nepal's commitment to the principles of the 
multilateral trading system, economic reform and market policies.  They   noted that Nepal was 
a key member of the South Asian Association for Regional Cooperation (SAARC),   whose 
population constituted almost one fourth of humanity and of South Asian Preferential Trading Arrangement (SAPTA).  In their view, economic, intellectual and moral arguments, including the credibility of the WTO, justified according special and differential treatment  similar to 
those of other LDCs,   when agreeing on Nepal's terms of accession. 
9. The Working Party reviewed the economic policies and foreign trade regime of Nepal 
and the possible terms of a draft Protocol of Accession to the WTO.  The views expressed by members of the Working Party on the various aspects of Nepal's foreign trade regime, and on the terms and conditions of Nepal's accession to the WTO are summarized below in paragraphs 
[…] to […]. WT/ACC/SPEC/NPL/5 
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ECONOMIC POLICIES   
Monetary and fiscal policy
 
10. The representative of Nepal said that the monetary policy of Nepal was geared towards 
controlling excessive liquidity so as to control inflationary pressures, and to improve the balance of payments situation of the country. Accordingly, broad money and narrow money aggregates were targeted to increase in line with the predetermined benchmarks. The Central Bank (Nepal 
Rastra Bank, NRB) had given up exercising direct instruments of monetary control since the 
early 1990s and has resorted to indirect instruments only. In this context, open market operations had become the main instrument of monetary control in Nepal. Treasury bills and NRB bonds are two instruments used in such operations. Besides open market operations, bank rate and the cash reserve ratio are the other additional instruments at the command of the 
Central Bank for monetary control.  
11. The representative of Nepal said that since the start of the 1990s the Government had 
pursued an ambitious tax reform programme with the aim of raising public savings, broadening the tax net and to improve the overall efficiency and fairness of the tax system. Reforms had 
been undertaken to broaden the tax base, lower income tax rates, and to simplify the rate 
structure across a whole range of taxes. The fiscal policy of the Government was to pursue the following major objectives: (i) reduction of unproductive expenditure in the public sector;  (ii) reform of the income tax structure by reducing high rates and broadening the tax base; (iii) 
reduction of net domestic borrowing to 0.5 per cent of GDP; and (iv) streamlining of 
bureaucracy.  
Foreign exchange and payments 
 
12. The representative of Nepal said that t he Central Bank published exchange rates for its 
transactions and the market rate was determined by the foreign exchange market. Import 
licenses to obtain foreign currency for specific goods are no longer required. The present system 
facilitates 100 per cent of capital transfer in the form of foreign investment and subsequent repatriation of profit in foreign currencies. Foreign currency bank accounts can be freely opened. In case of the emergence of balance of payments (BOP) problems, the Government may 
resort to restrictive measures. He added that the Nepalese Rupee has been pegged to the Indian 
Rupee at the rate of NRs. 1.6 per Indian Rupee since February 1993, and movements in the value of the Nepalese Rupee reflect movements in the Indian Rupee against third country currencies. The current exchange rate is about 78.00 Nepalese Rupees per US Dollar (May 2003).  WT/ACC/SPEC/NPL/5 
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Several amendments had been made in the Foreign Exchange (Regulation) Act, 2019 (1962) in 
order to reflect the liberalisation policy. Money changers had been authorized to operate in the 
main cities of Nepal. Moreover, the Government had declared its commitment to make Nepal an 
international financial services centre and had formulated an Act in this regard. Nepal had also entered into negotiations with respect to the Enhanced Structural Adjustment Facility (ESAF) with the International Monetary Fund. 
13. The representative of Nepal said that the current international payments regime consists 
of different provisions for payments made through convertible currency and non-convertible Indian Rupees.  For countries other than India, payment was made through convertible currency, mainly US Dollars. Selected commodities could be imported from India through US Dollar payments as well. There were no restriction on current account transactions.  All 
exporters, who export goods to countries other than India are required to bring the export 
payment to Nepal within 6 months. However, the exporters could retain up to 100 per cent of the export proceeds for themselves through the opening of a foreign currency account with the local commercial banks. There was no time limit for such retention. To import goods from 
India, the Letter of Credit could be opened in Indian Rupees in favour of the exporter. The 
Nepalese bank could also, if requested by the importer, make direct payment to the exporter, in Indian Rupees, through an Indian Bank. The importer could receive Indian Rupees from the Nepalese bank to make direct payment to the Indian exporter.  Nepal had accepted Article VIII 
of the Articles of Agreement of the IMF.  However, Nepal may restrict the quantity or value of 
imports as well as capital movements in order to safeguard its external financial position and its balance of payments. Nepal was also a member of the Asian Clearing Union (ACU). Trade transactions among ACU members were cleared through the Asian Currency Unit Dollar which is equivalent to the US Dollar.  As far as capital transaction  was concerned,  the  Ban on 
Investments in Foreign Countries Act  of 1964  prohibits any form of investment  including the 
purchase of  property, bank deposits, investments in shares and bonds by Nepalese citizens in foreign countries. The repatriation of capital movements by foreigners was free in accordance with the Foreign Investment and Technology Transfer Act 1992. 
Investment regime
 
14. The representative of Nepal said that a major objective of national economic policy was 
to promote and encourage a transparent and fair business environment for both domestic and foreign investment, and to increase the role of the private sector in Nepal’s development process. For this purpose, a liberal industrial policy was adopted in 1992 consisting of the 
Industrial Enterprises Act, 1992, the Foreign Investment and Technology Transfer Act, 1992, WT/ACC/SPEC/NPL/5 
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and the One Window Policy of 1992. Under this policy, a high level committee had been formed 
with the Director General of the Department of Industries as its Coordinator in order to 
coordinate the activities of various agencies related to industrial enterprises. The major thrust 
of these Acts and policies lies in their openness with emphasis on market-driven strategies, and the dominant role of private initiative and enterprise.  The Government acts as a facilitator to the private sector and concentrates its efforts on the development of the infrastructure required, 
as well as in guaranteeing a stable macroeconomic environment. The policies and Acts 
mentioned above apply to all sectors of economic activities within the country.  The Industrial Policy of 1992 identified foreign investment promotion as an important strategy in achieving the objectives of increasing industrial production, meeting the basic needs of the people, creating maximum employment opportunities, and paving the way for improvement in the balance of 
payments situation. Foreign investment was expected to supplement domestic private 
investment through foreign capital flows, technology transfer, and providing access to international markets. The first amendment of the Foreign Investment and Technology Transfer Act (FITTA), 1992 in 1996 had opened further avenues for investors, and had also 
simplified the administrative procedures. Some of the salient features of the Industrial 
Enterprises Act, 1992 and of the Foreign Investment and Technology Transfer Act, 1992 (as amended) were as follows:  foreign investment requires an approval from the Department of Industry.  A person desiring to avail the foreign investment or technology transfer shall be 
required to make an application to the Department. It grants permission in accordance with the 
decision of the Industrial Promotion Board within 30 days from the date of application;  foreign investors were allowed to hold 100 per cent ownership in industries;  foreign investment was open in every sector of economic activities, except for very few sectors such as cottage industries, arms and ammunitions, security printing currencies and coinage, retail business, 
travel and trekking agencies, consultancy services, etc. (Specified in an Annex of the Industrial 
Enterprises Act, 1992); technology transfer was encouraged in all public enterprises of industries;  the law prohibits the nationalization of any private sector industries; the Government does not intervene in fixing the prices of industrial products in the private sector 
industries.  The statutory provision of FITTA guarantees full repatriation of the amount 
received from the sale of equity, profits, or dividends and interest on foreign loans, and the repatriation of the amount received under an agreement for the transfer of technology.  Foreign investors were granted a business visa as long as the investment was retained. A resident visa would be provided for a foreign investor, who at a time makes an investment in excess of 
US$100,000 or equivalent and retains it.  Nepal was a member of the Multilateral 
Investment Guarantee Agency (MIGA), had signed Reciprocal Encouragement and Protection of Investment Agreements with France, Germany, the United Kingdom and Mauritius and  WT/ACC/SPEC/NPL/5 
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would conclude such agreements with a number of other countries.  Agreements avoiding 
double taxation were effective with India, Norway, and Thailand. 
15. In response to questions concerning the need for licences for industrial ventures, the 
representative of Nepal said that in accordance with Article 3 of the Foreign Investment and Technology Transfer Act of 1992, permission from the Department of Industries was required for all foreign investment. As provided by the Industrial Enterprises Act of 1992, permission for 
domestic investment was required only for industries producing explosives, including arms, 
ammunition and gun powder, security printing, bank notes and coin industries; cigarette, bidi, cigar, chewing tobacco, khaini industries and industries producing goods of a similar nature utilizing tobacco as the basic raw material and alcohol or beer producing industries. The specific requirements to get the permission were not detailed in either of these Acts.  He said 
that the sectors listed below were not open for foreign investment. Most of these sectors were 
reserved for nationals, mainly in order to promote the activities of small entrepreneurs who generally use indigenous skills, resources and technology.  Some sectors were restricted for national security reasons: cottage industry;  personal service business (business such as hair 
cutting, beauty parlour, tailoring, driving training, etc.);  arms and ammunitions industries;  
Explosives, gunpowder;  Industries related to radioactive materials;  Real estate (excluding construction industries);  Motion picture industries (produced in national languages and the language of the nation);  Security printing;  Currency and coinage business;  Retail business;  
Travel agency;  Trekking agency;  Water rafting;  Pony trekking; Horse riding;  Cigarette, bidi, 
alcohol (excluding those exporting for more than 90 per cent);  Internal courier services;  Atomic energy;  Tourist lodging;  Poultry farming;  Fisheries;  Bee keeping;  Consultancy services such as management, accounting, engineering and legal services etc.  Approval from the Government was required for foreign investment in other areas. Interested foreign investors 
should apply in writing, in the prescribed format, to the Department of Industry or Department 
of Small and Cottage Industry or any other office as prescribed by the Government. The decision on the application shall be communicated to the applicant within 30 days from filing of the application. 
16. The representative of Nepal also indicated that the recommendations made in the 
studies conducted by FIAS had been incorporated in the amendments of Industrial Enterprises Act, 1992 and the Foreign Investment and Technology Transfer Act, 1992. WT/ACC/SPEC/NPL/5 
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State ownership and privatization 
 
17. The representative of Nepal said that  Nepal had completed the privatization of a 
number of previously government owned enterprises listed below. The methods of privatization 
and other information are given below. The net (book value) worth of the remaining state-owned enterprises account for about 15 per cent of Nepal's GDP.  
Proportionate Share 
S.No Name of the Company Year of 
Privatization  Method of 
Privatization  Sales 
Proceeds 
(Rs. '000)1 Mgt Emp Public 
1. Bhrikuti Paper Mills (BPM) Oct. 1992 Asset and 
business 
sale 229,800 70 5 25
2. Harisidhi Brick and Tile 
Factory (HBTF) Oct. 1992 Asset and 
business sale 226,900 72 5 23
3. Bansbari Leather and Shoe 
Factory Mar. 1992 Asset and 
business 
sale 22,400 75 5 25
4. Nepal Film Development 
Company (NFDC) Nov. 1993 Share sale 64,662 51 5 44
5. Balaju Textile Industry Ltd. 
(BTI) Dec. 1993 Share sale 17,716 70 5 25
6. Raw Hide Collection and 
Development Corporation 
Ltd. (RHCDC) Dec. 1993 Share sale 3,990 -- -- 100
7. Nepal Bitumen and Barrel 
Udhyog Ltd. (NBBU) Jan. (1994) Share sale 11,640 65 5 30
8. Nepal Lube Oil Ltd. (NLO) Jan. 1994 Share sale 30,424 40 5 332
9. Nepal Jute Trade and 
Development Company 1993 Liquidation Liquidation -- -- --
10. Tobacco Development 
Company 1994 Liquidation Liquidation -- -- --
11. Nepal Foundry Industry 
(NFI) Mar. 1996 Share sale  14,473 51 5 44
12. Shri Raghupati Jute Mills 
(SRJM) Aug. 1996 Share sale  82,204 65 5 30
13. Biratnagar Jute Mills 
(BJM)3 Dec. 1996 Manageme
nt contract Business 
contract -- -- --
14. Nepal Bank Ltd. (NBL)4 Mar. 1997 Share sale 125,140 -- 5 545
15. Agriculture Tools Factory 
(ATF) May 1997 Share sale 95,100 65 5 30
                                                      
1 It includes the price of management share only. 
2 Rest of the shares are in the name of other corporations. 
3 BJM is a semi-government enterprise in which priv ate sector has majority shares. The decision to 
contracting out was taken by the company's board and all the procedures were taken accordingly. 
4 In this bank the government had majority shares. The government decided to sell some of its shares in 
the market, so that the private sector  could become the majority shareholder. So it floated 10 per cent of the 
shares in the share market. Now the government is a minority shareholder i.e. it holds only 39 per cent of the 
total shares. 
5 HMGN owns 39 per cent shares  WT/ACC/SPEC/NPL/5 
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Proportionate Share 
S.No Name of the Company Year of 
Privatization  Method of 
Privatization  Sales 
Proceeds 
(Rs. '000)1 Mgt Emp Public 
16. Bhaktapur Bricks Factory 
(BBF) Aug. 1997 Lease 20,300 
(10 years, 
lease) -- -- 100 HM
GN
 
18. The representative of Nepal said that  Section 6 of the Privatization Act, 1992 states that 
when the Government intends to privatize any Government Corporation, it shall publish a 
notice in respect to the privatization of such a Government Corporation in the Nepal Gazette. The Act makes it mandatory for the Government to initiate the privatization process only after the publication of a notice in the Gazette. Under Section 7 of the Privatization Act, 1992, the 
Government may form a team of experts for the evaluation of the Corporation in this respect. 
Section 8 of the same Act has given alternatives of the privatization process to the Government, i.e., converting shares or selling intact to private buyers or giving on lease etc. In accordance with Section 9 of the same Act the Government must call for public tender for privatization by publishing a notice which has to be in accordance with international practice. Section 10 of the 
same Act describes the basis for the evaluation of tenders. The privatization committee 
evaluates the proposals received from private parties accordingly. In accordance with Section 11(4) of the same Act, the terms and conditions mentioned in the Agreement in respect to privatization must be published to inform the public.   The parties concerned may ask for 
attested copies of relevant documents under number 17 of "kagaz jach ko mahal" (Chapter 
with respect to paper examination) of the Muluki Ain (Civil Code). Likewise Article 16 of the Constitution of the Kingdom of Nepal provides a right to seek and get information in respect to matters of public importance. Nepal is also ready to adopt a better mechanism in regard to transparency in the  Act.  The Privatization Act, 1992 was silent on the mechanism of review or 
appeal regarding any unsuccessful tenders by investors whether national or foreign. 
Nevertheless, the unsuccessful tender participant, in principle, may approach the Court of Appeal under the Justice Administration Act, 1991.  
Pricing policies
  
19. The representative of  Nepal said that in accordance with the Foreign Investment and 
One Window Policy 1992, the Government did not intervene in fixing the prices of industrial products either by the private sector industries or State owned enterprises. 
20. The representative of Nepal stated that in the application of price controls now or in the 
future, Nepal would apply such measures in a WTO-consistent fashion, and take account of the WT/ACC/SPEC/NPL/5 
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interests of exporting WTO Members as provided for in Article III:9 of the GATT 1994, and in 
Article VIII of the General Agreement on Trade in Services (GATS). 
Competition policy
 
21. The representative of Nepal said that Nepal did not at present have a competition law, 
but Nepal was seeking assistance to draft legislation to ensure fair competition in various business activities in due course.  The respective legislation would be consistent with the WTO 
Agreements. The Legislative Action Plan circulated in document WT/ACC/NPL/10/Rev.1 which 
is reproduced in Annex III of this Report indicates that the Ministry of Industry, Commerce and Supplies would prepare a draft Competition Act by November 2003, the Council of Ministers was expected to endorse the Act by February 2004 and the expected approval date was July 2004. 
FRAMEWORK FOR MAKING AND ENFORCING POLICIES 
22. The representative of Nepal said that in 1990 a democratic constitution had replaced the 
Panchayat System. The Constitution of the Kingdom of Nepal, 1990 had established the King as the Head of the State and the Prime Minister, responsible to the parliament, as the Head of the 
Government, and an independent judiciary. The parliament was a bicameral legislative body, 
consisting of the lower house, the House of Representatives, and the National Assembly, the upper house. The executive, legislative, and judicial powers were well defined and separated. The executive power with the responsibility of issuing general directives, controlling and 
regulating of the administration was vested in His Majesty the King and the Council of 
Ministers, the Cabinet. His Majesty the King as the Head of the State appoints the leader of the Party which commands a majority in the House of Representatives as Prime Minister and constitutes the Council of Ministers on his recommendation and under his Chairmanship. The Prime Minister and the other ministers in the government are collectively responsible to the 
Parliament. The other ministers are also individually responsible for the business of their 
respective ministries to the House of Representatives as well as to the Prime Minister. Due to the lack of internal security Parliamentary elections were not held in 2002 as scheduled.  His Majesty the King had appointed the current Prime Minister under the provisions of the present 
Constitution. A cease fire reached in February 2003 had suspended hostilities. The current talks 
with all political entities and groupings were expected to lead to Parliamentary elections being held in the coming period.  In the meantime, the government exercised legislative authority in conformity with constitutional provisions by means of Royal Ordinances.   WT/ACC/SPEC/NPL/5 
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23. In accordance with the Constitution, the parliament consists of His Majesty the King 
and the two Houses of parliament. The House of Representatives consists of two hundred and 
five members elected from one-man election constituency on the basis of one-person-one-vote 
system through a secret ballot. Nepal had adopted the simple plurality or "first past the post" election system under which a candidate receiving the largest number of popular votes in a given constituency is elected. The National Assembly consists of sixty members, ten of which are 
nominated by His Majesty the King from amongst persons of high reputation, and 35 members, 
including at least three women members, are elected by the House of Representatives on the basis of proportional representation by means of the  single transferable vote system. Fifteen members are elected from five Development regions. The tenure of the members  of the House of Representative is five years. The tenure of one-third of the members of the National 
Assembly expires every two years. 
24. Except as otherwise expressly provided in the constitution, the parliament is empowered 
to enact any law. A bill passed by one house of the parliament is transmitted to the other house as soon as possible and if the receiving house passes it, it is presented to His Majesty the King 
for his assent. The bill becomes an Act immediately in accordance with the constitution. The 
Government is empowered to promulgate rules or regulations under a delegated legislative power vested under an Act of Parliament. The constitution provides certain specific provisions concerning ratification of, accession to, approval of, and acceptance of a treaty. Depending on 
the content, nature, and term of a treaty, a joint sitting of both houses of the parliament or the 
House of Representatives is authorized to ratify or accede to. Normally, multilateral treaties concerning trade which require ratification of accession are ratified by the House of Representatives by a simple majority vote. Once treaties are ratified, they are executed at the national and international levels. A treaty may be invoked on a collateral issue, which the courts 
may have to determine before adjudicating on the rights of the parties.  However, the Supreme 
Court, in case it decides that the provision of an Act is inconsistent with the provision of a treaty to which His Majesty's Government is a party, the provision of the treaty in question prevails. Under the Nepal Treaties Act, 2047 (1990) in case of divergence between the provisions of 
Nepalese law and provisions of the international treaty to which the Kingdom is a party, the 
provision of the treaty shall apply to the extent of the divergence. Following its ratification by the House of Representatives, the WTO Agreement would be an international treaty. 
25. The judiciary is an independent organ. The powers relating to justice in the kingdom 
are exercised by the courts and other judicial tribunals in accordance with the provisions of the 
constitution, the laws of the country, and universally recognized principles of justice. The 
judiciary  comprises three tiered courts consisting of 75 District Courts, 11 Appellate Courts, WT/ACC/SPEC/NPL/5 
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and one Supreme Court. The Chief Justice of the Supreme Court of Nepal is appointed by His 
Majesty the King on the recommendation of the Constitutional Council, a constitutional body 
composed of the Prime Minister, the Chief Justice, the Speaker of the House of Representatives, 
the Chairman of the National Assembly, and the Leader of the Opposition in the House of Representatives as its members. The appointment of other judges of the Supreme Court, Appellate Courts, and District Courts is made by His Majesty the King on recommendation of 
the Judicial Council. In Nepal, judges are not part of the civil service and the terms and 
conditions of their service have been determined by law as required by the constitution. The Supreme Court, the apex of the judicial system, has, inter alia, extraordinary jurisdiction for the enforcement of fundamental rights as provided by the constitution in Part 3 and can issue appropriate orders and writs including  the writ of habeas corpus, mandamus, certiorari, 
prohibition and quo warranto. Moreover, it is also empowered to declare any law or any part 
thereof either void ab initio or from the date of its decision on the ground of inconsistency with the constitution, because such law imposes an unreasonable restriction on the enjoyment of the fundamental rights of the citizen. Similarly, appellate courts may issue habeas corpus, 
mandamus writs and injunction orders. Nepalese courts are competent to entertain and 
adjudicate all suits concerning real estate located in Nepal and estate matters with respect to assets in Nepal and also any other suits, if the defendant is domiciled in Nepal or the claim derives from an event that has occurred in Nepal or from any act made or done in Nepal 
regarding the defendant's domicile. If a foreign company has a branch in Nepal,  it is treated as 
a domiciled party. A Nepalese court may also adjudicate suits concerning transactions made abroad if both the plaintiff and defendant are domiciled in Nepal. Summons are to be served on defendants domiciled abroad through letters rogatory issued by the courts. No. 34 of Adalati Bandobasta (court management) of Muluki Ain (Civil Code) provides that summons to be 
served on defendants domiciled in Nepal through letter rogatory issued by the foreign courts 
are satisfactory only if a reciprocal agreement to that effect has been concluded by the Government with the foreign state concerned. Muluki Ain is the general law of the land and any other specific act may replace the provision of the Muluki Ain if a specific act to that effect is 
made. In addition to the above mentioned courts, there is also a provision in the constitution 
which stipulates that law may provide for the establishment of special types of courts and tribunals for the purpose of hearing of special cases. However, a special court or tribunal may not be constituted for the purpose of hearing a particular case. In practice, there are special permanent tribunals to adjudicate and resolve revenue disputes (Revenue Tribunals), labour 
disputes (Labour Court) and disputes concerning dismissal of civil service employees 
(Administrative Court). Pursuant to the Arbitration Act, 1981, arbitration had become an  WT/ACC/SPEC/NPL/5 
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effective mechanism for settlement of disputes arising out of commercial contracts. Nepal was a 
party to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards.  
26. Under Articles 35  and 41 of the Constitution of the Kingdom of Nepal, 1990, and the 
Allocation of Business Rules, 1990 (as amended), the following Ministries are responsible for making and enforcing the policies affecting foreign trade in goods and services :  
(a) The Ministry of  Industry, Commerce and Supplies
6 is principally responsible 
for making and enforcing policies on trade including foreign trade. The responsibilities of this ministry include: Formulating and enforcing trade policy. Study, research, and survey on internal and international trade. Making policy decisions on import and export trade regime and conducting international trade 
relations. Formulating policies and setting requirements for public trade 
enterprises. Preparing and negotiating treaties and agreements relating to foreign trade (and transit), as well as participating in bilateral and multi-lateral intergovernmental trade negotiations. Contact, assistance and coordination with national, regional, international organizations pertaining to trade and transit. Study and survey of different means of carriage of goods in the internal and 
international trade, and of the management necessary for cheaper carriage, 
including multi-modal transport schemes. Training to develop capable manpower in the appropriate areas.  The Department of Commerce deals with technical issues such as the registration of trade firms, and where appropriate, permits licenses or authorization for goods to be imported  in or exported from 
Nepal. The Trade Promotion Centre operates as a separate government 
undertaking to promote foreign trade, particularly overseas trade.  
(b) The Ministry of Finance is responsible for activities related to public 
expenditure, currency; banking, insurance, revenue policy and planning; revenue administration and collection of customs duties and taxes levied by the government from time to time; general price policy for State-owned enterprises ; 
exchange and control of foreign currencies and control of accounts as well as 
mobilisation of foreign  aid.  
(c) The Ministry of Industry is responsible for policies related to foreign investment, 
promotion thereof and matters relating thereto; promotion of industrial investment; development and transfer of technology; industrial promotion and 
protection; patent design and trade mark.  
(d) The Ministry of Tourism and Civil Aviation is responsible for issues  related to 
tourism  industry and tourism promotion; trekking, mountaineering; development of air transportation and other tourism trade related service and issues. 
(e) The Ministry of Works and Transport is responsible for activities related to 
policy on development of inland and water transport; regulation of transportation and carriage by land and sea including multi-modal transport and trade facilitation. 
                                                     
 
6 The Ministry of Commerce, the Mini stry of Industry and the Ministry of Supplies were merged in the 
year 2000 WT/ACC/SPEC/NPL/5 
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(f) The Ministry of Labour is responsible for activities related to labour policy and 
its implementation; study and research of labour force and labour market, and its use; work permit to foreigners; administration and management of labour. 
(g) The Ministry of Supplies is responsible for issues related to the policy on 
supplies of basic needs goods and its implementation; supervision of the market 
and regulation of policy prices for enterprises under it; regular and balanced 
supply of consumer goods and necessary consumer goods through these enterprises.  
(h) The Ministry of Agriculture is responsible for activities related to policy on 
agriculture and agriculture production in general; development and 
improvement of food, cash and industrial crops; agricultural engineering and 
sophisticated agricultural inputs; agricultural nurseries and development of seeds; development of dairy and dairy products; fishery; marketing and price regulation of basic agricultural products, agricultural inputs, and development of agricultural technology; plant quarantines; food research, and import, sale 
and distribution of fertilizers and agricultural inputs. 
27. The constitution of Nepal provides a unitary form of government. There was no division 
of authority between central and sub-central or regional governments in Nepal. However, the 
laws of the country provide for the delegation of authority to the local authorities as and when required. 
28. The representative of Nepal said that the implementation of the WTO Agreements 
would require the preparation of  important pieces of legislation.   He submitted the action 
plans circulated in documents WT/ACC/NPL/10/Rev.1, 12, 13, 14 and 15  and reproduced in 
Annexes III-VII of this Report, which set up a precise calendar plan aimed at enacting the legislation required to implement the WTO Agreements during the period 2003-2006.  The representative of Nepal said that Nepal undertook the commitment that any changes in laws, 
regulations and practices during the transitional arrangements would not result in a lesser 
degree of consistency with the provisions of the relevant WTO Agreements than existed on the date of accession, and that the scope of application of existing inconsistencies with WTO provisions in those areas would not be allowed to increase.  The Working Party took note of these commitments.  
29. In response to questions concerning the existence of the right to appeal against decisions 
made by the Department of Industry and other administrative entities as required by the WTO Agreements on Import Licensing, Customs Valuation, TBT, SPS and TRIPS, the representative of Nepal said that under Article 18 of  the Industrial Enterprise Act, 1992 there was a provision 
of appeal against the decisions taken by Department of Industry to the Industrial Promotion 
Board. The importer had the right to appeal to the Revenue Tribunal over the decision of customs officials in respect to the determination of customs value under Section 37 of Custom  WT/ACC/SPEC/NPL/5 
 Page 15 
 
 
Act, 1962.  Nepal was currently examining the possibility of establishing an independent 
administrative tribunal to review the decision of the customs authority regarding customs 
valuation. The decisions of the administrative tribunals could be appealed to the revenue 
tribunal which should provide prompt review and correction of administrative action relating to customs matters in accordance with Article X:3(b) and (c) of GATT 1994. The Nepalese legislation provides the right to appeal to the affected party concerning decisions of the 
authorities on matters related to technical barriers to trade, sanitary and phytosanitary 
measures, import licensing, copyrights, trademarks, patent and design.  
30. A member of the Working Party expressed readiness to provide technical assistance to 
Nepal for the establishment of a system for the review and appeal against administrative decisions in areas covered by specific transitional arrangements and in other areas.  
31. The representative of Nepal said that upon the date of accession, Nepal would establish 
or designate tribunals or procedures for the prompt review of all administrative actions relating to the implementation of laws, regulations, judicial decisions and administrative rulings of a general application referred to in Article X:1 of the GATT 1994, Article VI of GATS. The 
tribunals or procedures would also include actions relating to the implementation of national 
treatment, conformity assessment, the regulation, control, supply or promotion of a service, including the grant or denial of  a licence to provide a service and other matters.  The tribunals or procedures responsible for such reviews would be impartial and independent of the agency 
entrusted with administrative enforcement and shall not have any substantial interest in the 
outcome of the matter. The review procedure would include the opportunity for appeal, without penalty, by individuals or enterprises affected by  any administrative action subject to review. The Working Party took note of these commitments.  
POLICIES AFFECTING TRADE IN GOODS  
Registration Requirements
 
32. In response to questions concerning the requirements necessary for obtaining the 
registration to engage in business, the representative of Nepal said that  all companies, national or foreign, have to be registered with the competent authority to engage in business in Nepal. 
This includes export and import activities. Limited liability companies, including joint venture 
agencies, sole proprietor and partnerships, business undertakings for industrial ventures, register at the Department of Industry. Agencies, sole proprietor undertakings and partnership businesses for trading are required to register at the Department of Commerce. The Nepalese legislation provided different procedures for the registration of a private firm and a company. WT/ACC/SPEC/NPL/5 
Page 16  
 
The Private Firm Registration Act, 1956 governs the registration of a private firm- defined as 
any firm, a company or a concern set up by any person – to engage in the business of export or 
import . The running of a private firm without registration was prohibited. The Department of 
Commerce registers firms engaged in commerce whereas the Department of Industry was concerned with firms engaged in industry. Any individual desiring to register a private firm must submit the form prescribed by the Private Firm Registration Regulation 1978 Rule 3. 
Schedule-1 along with the prescribed application fees to the concerned department. If the 
Department finds the statement of the application to be true and reasonable to register, it will register the private firm and issue a certificate of registration accordingly.  The registration of a company was governed by the Company Act, 1997. An application with a Memorandum of Association and the Articles of Association of the company along with application fee must be 
submitted to the Office of the Company Registrar. The Registrar, makes any necessary 
inquiries, registers the company and issues a certificate of incorporation within 15 days. The Registrar had the authority to reject the application if the proposed name of the company is already registered, or the proposed name is against public morals or the objective of the 
company is contradictory to existing laws, or the conditions required to incorporate the 
company under the Act are not fulfilled. In this case, the Registrar gives due notice and explain the reasons for rejection to the applicant.  The registration of entities with respect to trade in services was governed by other laws, e.g., Nepal Agency Act, 1958, Partnership Act, 1964. 
33. In response to questions concerning the registration fees, the representative of Nepal 
said that the application fee and the registration fee of different kinds of legal entities were nominal, non-discriminatory and not related to the value/ volume of export and import. He requested the identification of the specific GATT 1994 and GATS obligations applicable to the registration fees. 
34.  The commitment was sought that there would be  no restrictions on the right of 
individuals and enterprises to import and export goods into Nepal’s customs territory, except as provided in WTO Agreements, and that individuals and firms would not be restricted in their ability to import or export based on their registered scope of business.  The commitments 
should ensure that fees associated with the right to import and export were applied in 
conformity with the WTO, including Articles VIII:1(a), XI:1 and III:2 and 4 of the GATT 1994.  
35. The representative of Nepal confirmed that all registered companies could import and 
export goods for business purposes on the basis of the import and export regulations of Nepal. Individuals could import for business as long as they were registered as sole proprietor 
undertakings. Retail businesses were reserved for Nepalese nationals. Nepal believed that the  WT/ACC/SPEC/NPL/5 
 Page 17 
 
 
agency business was covered by GATS. The relevant market access conditions would  be 
governed by Nepal's schedule of specific commitments on services. The registration 
requirements for companies that conduct purely domestic activities and for companies engaged 
in import and export activities were the same. The registration requirements were the same for both national and foreign firms.   
36.  The representative of Nepal said that Nepal confirmed that from the date of accession, 
its laws and regulations relating to exportation and importation of goods  and all fees, charges 
and taxes levied thereof, including registration requirements would be applied in full conformity with WTO obligations, including Articles I, VIII:1(a), XI:1 and III:2 of the GATT 1994 and that Nepal would implement such laws and regulations in full conformity with these obligations.  The Working Party took note of these commitments 
Import Regulation  
Customs tariff
 
37. The representative of Nepal said that the prevailing basic customs tariff rates were 5, 10, 
15, 25, 40, 80 and 130 per cent. There was a significant number of tariff lines with zero duty. 
The majority of the import items fall in the customs duty range of 10-20 per cent. The 
unweighted average customs duty rate for imports was approximately 11 per cent since1996/97. The maximum tariff rate of 130 per cent was applied to cars and jeeps, a minimum tariff rate up to 5 per cent applied for daily consumption items. As a general rule, Nepal applied ad 
valorem duties A. very limited number of products such as motor fuels, kerosene oils, gas and 
fuel oils, cement clinkers and some cements were subject to specific duties. The Harmonized System of Commodity Classification (HS) was incorporated in Nepal since the fiscal year 1992/93. The 2002 version of the HS Nomenclature had been put into effect. 
[Nepal's Customs Tariff is available in the Secretaria t. Nepal's revised market access offers in goods 
is available in the Secretariat ( document WT/ACC/SPEC/NPL/3/ Rev.2).]  
Tariff rate quotas, tariff exemptions
 
38. The representative of Nepal said that there were no tariff quotas for imports in effect in 
Nepal. The current legislation provides for certain tariff exemptions and tariff reductions, in 
order to facilitate the import of specific goods on a provisional basis. These measures were 
taken by the government and published in the Nepal Gazette. They were valid for all suppliers of the goods specified in the Custom Tariff. Import duty exemptions were in effect for the WT/ACC/SPEC/NPL/5 
Page 18  
 
importation of the following goods: books; equipment and vehicles for trolley bus services; 
medical equipment for public health projects; cold storage equipment for the preservation of 
agricultural products including fish and fruits; alternative power development equipment; high 
quality printed materials imported for the promotion and publicity of the tourism in Nepal; threshing machines and husk-machines (Pankhi); raw jute;  and crates for keeping eggs, falling under chapter 48. The list of exemptions and tariff reductions was published in the Customs 
Tariff. 
Other duties and charges  (ODCs)
 
39. Some members of the Working Party noted that Nepal levied on a number of products 
the Local Development Fee, the special fee, the agriculture development fee, the cigarettes and alcohol fee and the alcohol control service fee. They requested that the fees be incorporated into 
the customs tariff rates, or as a minimum bound at the currently applied rates, upon accession, 
in accordance with the Understanding on Article II para. 1(b) of GATT 1994. They also requested that Nepal provide a list by HS number of those items where Nepal intended to retain the ODCs to be annexed to the Report of the Working Party.  
40.  The representative of Nepal said that for reasons related to local development, health 
and education, security, stability and others, including the need to generate fiscal revenue earmarked to respond to critical local needs, other duties and charges in the range of 2.5 per cent - 11.5 per cent were levied on industrial goods, and in the range of 2.5 per cent - 14 per cent 
were levied on agricultural goods. The representative of Nepal agreed to review this matter in 
the context of the market access negotiations in goods. In the revised market access offer on goods, Nepal has proposed to gradually reduce and eliminate ODCs for the majority of tariff lines over a period of time between 2 and 8 years. ODCs at the rates of 2.5 per cent, 4.5 per cent or 9.5 per cent would be retained for a number of limited products that would be listed in the 
Goods Schedule annexed to the Protocol of Accession of Nepal as well as in Annex II to this 
Report.  
41. The representative of Nepal said that the Nepal's commitments to gradually reduce and 
eliminate ODCs would be reflected in the Goods Schedule annexed to the Protocol of Accession 
of Nepal.  The list of items where Nepal intends to retain ODCs is reproduced in Annex II of this 
Report.  Nepal also undertook not to introduce new ODCs.  The  Working Party took note of these commitments.  
Quantitative import restriction including prohibitions
  WT/ACC/SPEC/NPL/5 
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42. The representative of Nepal said that all items were free for import. Nepal at present 
applied no import quotas. The products banned for import  and domestic production are listed 
hereunder.  
(a) Narcotic drugs like opium and morphine; 
(b) Liquor containing more than 60 per cent alcohol (c) Beef and beef products.  
The products restricted for import and domestic production are listed hereunder: 
(a) Materials used in the production of arms and ammunition; 
(b) Guns and cartridges; 
(c) Capes without paper; (d) Arms and ammunition, and other explosives. (e) Wireless, walkie talkie and similar other audio communication equipment's  (f) Valuable metals and precious stones.  Nepal did not restrict the importation of 
jewellery made of valuable metals but there was a restriction on the importation 
of gold, silver and other valuable metals and precious stones.  
Licensing procedures
 
43. The representative of Nepal said that automatic licensing was applied for information 
purposes both for the import and export of goods. Licenses were also applied for the personal 
baggage exceeding the established allowance. In addition, the Treaties of Trade and Transit between Nepal and India envisage licensing in order to ensure that the transit of goods does not violate Articles 8 and 9 of the Transit Treaty, which embody restrictions applied in India in the spirit of Articles XX and XXI of GATT 1994 (general and security exceptions). The Department 
of Commerce issues the licenses in accordance with the following procedures. The licensing 
system is not intended to restrict either the quantity or the value of imported goods.  It is simply intended to protect public health, consumer and environment welfare and national security.  Alternative methods in the form of the requirement to present to the competent authorities the 
letters of credit have been introduced in order to obtain the necessary information and simplify the 
procedures.  Import licensing was authorized and maintained under Export - Import (Control) Act, 1957, Export -  Import Rules, 1978, Customs Act, 1962, Customs Regulation, 1969, Annual Finance Act based on annual Budget Speech of Finance Minister, and the order made by the Ministry of Commerce pursuant to the Export and Import (Control) Act, 1957 and Rules, 1978. 
Import licensing was statutorily required.  The designation of products to be licensed and the 
licensing of products to be imported was not left to administrative discretion.  The government may abolish the system of licensing only by statutory action.  At present, the automatic licensing system had been relaxed and the submission of application for obtaining a licenses was not 
required. However, the letters of credit opened for imports and exports must be presented at the WT/ACC/SPEC/NPL/5 
Page 20  
 
customs office during the time of export and import. For the restricted import  products an import 
licence is required.  The Export and Import (Control) Act 1957 gives the right to the government to 
introduce import controls in the case of BOP problems and in specific cases of governmental 
assistance to economic development. The government may specify whether to apply them by value or quantity. There is no requirement as to how far in advance an application for a licence must be made.  A licence can be obtained within a shorter time limit or for goods arriving at the port 
without a licence, if all documents are in order.  A licence can be granted immediately upon 
request, if all documents are in order.  There are no limitations as to the period of the year during which applications for licenses and/or importation can be made. Import licenses are, in most cases, issued by a single administrative organ which is the Department of Commerce.  Applications for licenses are submitted to the DOC. Application may also be reviewed by experts of another agency 
in certain cases involving goods where assessment of conformity with standards and technical 
regulations is required. In this case, the Department of Commerce coordinates with the agencies concerned. There are no circumstances under which an application for a licence may be refused other than for failure to meet the basic requirements.  When a licence is refused the applicant is 
advised of the reasons.  He may appeal to the Ministry of Commerce, within 35 days of the notice 
issued to him of such refusal.  The applicant should clearly mention in his complaint his name and address, subject-matter to complaint, claims and reasons of claims.  He must submit copies of all the relevant documents along with the complaint for evidence and a copy of the complaint should 
also be sent to the licensing authority.   
44. The representative of Nepal said that the following products are subject to import 
licensing: 
HS Number Description Justifying Provision of WTO 
85.28 All types of radio communication system with the 
frequency range of 30 Khz to 300 Khz. Article XXI of GATT 1994 
85.28 Radio transmitter and transceiver  
85.29 Television transmitter, FM radio transmitter  
85.25 Wireless transceiver  
85.25 Walkie talkies  
85.17 Cordless telephone  
85.29 Video sender  
85.28 Amateur radio  
85.17 Inmarsat terminal (portable satellite hand set)  
85.17 Satellite communications equipment  
85.17 Radio paging system-paging transmitter, pager  
85.17 Communication equipment-cellular 
telecommunication base station, cellular hand set.  
85.28 Satellite broadcast receiver.  
85.28 Satellite receiver (other than broadcast)  
85.17 Radio repeater station  
85.17 Radio navigation, transmitter/transceiver   WT/ACC/SPEC/NPL/5 
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HS Number Description Justifying Provision of WTO 
85.17 Radio determination transceiver, receivers  
93.05 Materials used in the production of arms and 
ammunition.  
93.01-93.04 Guns and cartridges  
93.06 Capes without paper  
93.07 Arms and ammunition and other explosives   
Chapter 71 Valuable metals and precious stones Article XX(c) of GATT 1994 
 
45. The representative of Nepal said that there was a charge of 1 per cent of the total value 
of the imported goods as import licence fee. Nepal intended to change the import licence fee to the system of determining the fee based on the flat rate or the ad valorem  rates, whichever is 
lower. Nepal reserved the right to introduce customs processing/customs fee equivalent to the 
cost of services rendered for the items not requiring import licences. 
46. The representative of Nepal said that Nepal would charge an import licence fee 
representing the approximate  cost of the services rendered in line with Article VIII of the GATT 1994.  The Working Party took note of this commitment.  
47. The representative of Nepal said that Nepal would enact legal instruments codifying the 
substance of the WTO Agreement on Import Licensing Procedures. As stated in the Legislative 
Action Plan reproduced in Annex III of this Report, amendments to the Export Import (Control) Act 1957 (Amendment) and to the Export Import (Control) Regulations 1978 (Amendments) had already been prepared,  or would be prepared by the Department of 
Commerce in August 2003, and would be submitted by the Ministry of  Industry, Commerce 
and Supplies to the Council of Ministers by September and October 2003, respectively. It is expected that endorsement and adoption by the Council of Ministers of the amendments to the Act and the Regulations would be approved in December 2003. The Working Party took note of these commitments.  
48. The representative of Nepal confirmed that, from the date of accession, Nepal would 
eliminate and would not introduce, re-introduce or apply quantitative restrictions on imports or other non-tariff measures such as licensing, quotas, bans, permits, prior authorization requirements, licensing requirements, and other restrictions having equivalent effect, that 
cannot be justified under the provisions of the WTO Agreement. He further confirmed that the 
legal authority of the Government of Nepal to suspend imports and exports or to apply licensing requirements that could be used to suspend, ban, or otherwise restrict the quantity of trade would be applied from the date of accession in conformity with the requirements of the WTO, in particular Articles XI, XII, XIX, XX, and XXI of the GATT 1994, and the Multilateral Trade WT/ACC/SPEC/NPL/5 
Page 22  
 
Agreements on Agriculture, Sanitary and Phytosanitary Measures, Import Licensing 
Procedures, Safeguards and Technical Barriers to Trade.  The Working Party took note of 
these commitments. 
Customs Valuation 
 
49. The representative of Nepal said that in accordance with the Customs Act, as amended 
in 1997, the customs value of the imported goods was assessed on the basis of the invoice price 
shown in the invoice document provided by the importer. If the customs had reasonable doubt 
that the invoice price did not correspond to the price actually paid for the goods, that is the transaction value, the customs would refer to the value of similar, or identical goods imported into Nepal. If this information was not available, the customs would refer to the international prices, local market price, suggested price lists of manufacturers, recorded prices of previous 
imports of identical or similar goods, a list of reference prices and other available information. 
The Customs was not applying the provisions of Articles 5 and 6 of the Agreement on Implementation of Article VII of GATT 1994. There were no provisions in the current legislation to the case when the buyer and seller are related and how the customs should act in 
those cases. There were no minimum prices in effect.  Due to the need to ensure revenue 
protection and trade facilitation, a reference price list was still used for comparison purposes with the invoice price with respect to sensitive products.  Nepal was examining the modifications that would have to be introduced in current legislation and practices to fully implement the 
WTO Custom Valuation Agreement. To attain this objective it would be necessary to train 
personnel, to prepare implementation measures and to upgrade the institutional capabilities and material infrastructure of the Customs Administration. The timetable for complete implementation would depend on the progress that would be achieved on those issues. Nepal would require technical assistance in this respect.   
50. The representative of Nepal recognized the fact that custom valuation based on the 
value of local goods and on reference prices was contrary to the WTO Customs Valuation Agreement. He confirmed that Nepal intended to adopt the valuation methods of Articles 5 and 6 of the Agreement and to improve Nepalese legal provisions to implement a WTO consistent 
regime. Nepal would incorporate the remaining provisions of the WTO Agreement on Customs 
Valuation into the Customs Act, 1962 and the Customs Regulation, 1969. A timetable for the enactment of legislation that implements the WTO Agreement on Customs Valuation in Nepal's legal regime was provided in the action plan circulated in document WT/ACC/NPL/15 and reproduced in Annex IV of this Report.  The Department of Customs had prepared the 
amendments to the Customs Act 1962 (Amendment) and to the Customs Regulations 1969  WT/ACC/SPEC/NPL/5 
 Page 23 
 
 
(Amendment) which would be submitted by the Ministry of Finance to the Council of Ministers  
by August 2003.  These amendments would be endorsed and adopted by the Council of 
Ministers by 31 December 2003. Having regard to the action plan, Nepal would implement the 
provisions of Articles 7 and 10 of the Customs Valuation Agreement at the time of accession if the valuation of imported goods for customs purposes could be ascertained on the basis of the transaction value of identical goods or the transaction value of similar goods. The Working 
Party took note of these commitments.  
51. In response to questions concerning the right to appeal referred to in Article 11 of the 
Customs Valuation Agreement, the representative of Nepal said that in accordance with Section 37 of the Customs Act 1962, the importer had the right to appeal to the Revenue Tribunal against the decisions of customs officials in respect of the determination of customs value. Nepal 
was currently preparing the establishment of  an independent administrative tribunal to review 
the decisions of the customs authority regarding customs valuation. It was foreseen that the decisions of the administrative tribunal would be subject to appeal to the Revenue Tribunal, which was a judicial body. Nepal believed that such institutional system would provide prompt 
review and correction of administrative actions relating to customs matters, in accordance with 
Article X:3(b) and (c) of GATT 1994 and the Agreement on Customs Valuation. He confirmed that in pursuance of the action plan circulated in document WT/ACC/NPL/15, the right to appeal to an independent administrative tribunal would be in effect on 31 December 2004.  The 
Working Party took note of this commitment. 
52. Some Members of the Working Party requested that Nepal describe the surety bond 
system  provided for in Article 13.6 of the Customs Act 1962, provide a timetable for enacting the Interpretative Notes referred to in Article 14 of  the Customs Valuation Agreement,  and clarify the manner of publication of customs issues including valuation referred to in Article 12 
of the Customs Valuation Agreement.  
53. The representative of Nepal said that full implementation of the Agreement on Customs 
Valuation would be carried out gradually and progressively and would be completed, at the latest on 31 December 2006, in accordance with the Legislative Action Plan circulated in 
document WT/ACC/NPL/10/Rev.1, and the action plan on implementation of the Agreement on 
Customs Valuation circulated in document WT/ACC/NPL/15, reproduced in Annexes III and IV of this report, respectively.  The Working Party took note of this commitment. 
Application of Internal Taxes
 WT/ACC/SPEC/NPL/5 
Page 24  
 
54. The representative of Nepal said that consistent with Article III:4 of GATT 1994 
domestically produced goods and imported goods were both subject to the same taxes, namely 
value added tax (VAT)  and excise taxes.  The Local Self Governance Act 1998 had abolished 
the local transit tax called octroi. A Local development fee of 1.5  per cent of the value of imports had been set up. 
VAT
 
55.  The representative of Nepal said that in the fiscal year 1997/98, the VAT had  replaced 
the sales tax and  all the existing taxes on services, including entertainment and hotel, and contract taxes. VAT had been introduced with the rate of 10 for taxpayers registered in the VAT office and 20 per cent for taxpayers who do not report to the VAT office, in order to enhance tax collection and discourage tax avoidance.  At the time when the Value Added Tax 
Act had been established, every person (defined in the Act as any individual, firm, company, 
association, institution, partnership firm, cooperative, joint business, religious endowment, or fund; or any Government body, any religious organisation, charitable trust or similar other bodies and branches or sub-branches there engaged, with or without profit, in taxable 
transactions) engaged in any transaction is required to apply for registration in a prescribed 
form to the tax officer  within 90 days from the commencement of this Act. After the commencement of this Act, every person desirous to be involved in any commercial transaction is required to register in the tax office before beginning to engage in such transactions. While 
evaluating the application, tax officers may ask the applicants for additional information and 
documents and it shall be the duty of an individual to submit such information/document within seven days to the concerned authority. Upon the verification of the application form, the tax authority shall issue the Registration Certificate to the concerned individual within 30 days from the date of filing the application. The Certificate should be displayed in a conspicuous 
place at his principal place of transaction. If there is more than one place of transaction, he 
should display a copy of the registration certificate, attested by a tax officer, conspicuously at each place. It shall be the duty of every registered person to use the registration number for all transactions related to value added tax, excise duty and to other transactions as prescribed. 
Exemption from registration was provided to small vendors whose commercial transaction 
value was less than NRs4.5 million during the last twelve months.  
56. The representative of Nepal said that the following were exempted from VAT:  WT/ACC/SPEC/NPL/5 
 Page 25 
 
 
1. Basic Agricultural Products  
(a) Paddy rice, wheat, maize, millet, pulses, flour, and similar unprocessed 
food materials. 
(b) Green and fresh vegetables, fresh fruits, fresh eggs and similar products. 
(c) Unprocessed cereals, oil seeds (tobacco, sugar, cotton, cardamom, jute, 
soybean, ground nuts, linseed rape seed, sun flower and similar basic agricultural products to be used to make edible oil). 
 
2. Goods of Basic Needs 
 
(a) Edible oil (produced through local oils mills). (b) Piped water, including water supplied by tankers. (c) Fuel wood and coal. (d) Kerosene. 
 
3. Live Animals and Animal Products  
(a) He goat, sheep, yak, he buffalo, bore, pigs, rabbit, and similar other 
animals; their fresh milk, and uncooked/unprocessed varieties. 
(b) Cows, she buffalo and she goat. 
(c) Ducks, hens, cocks, turkey and similar other birds, and their fresh meat, 
eggs, and similar uncooked varieties. 
 
4. Agricultural Inputs  
(a) Seeds of any plants listed in Group 2. 
(b) Manure, fertilizer and soil conditioners. (c) Agricultural hand implements.  
5. Pesticides, made mainly for use on crops  
 Medicine, Medical and Similar Health Services 
(a) Services provided by any hospital, clinics or other institutions approved 
by the  Government in order to provide medical or surgical treatment. 
(b) Professional services provided by medical practitioners (doctor, nurse, 
health assistance, etc.) individually or institutionally. 
(c) Goods provided to the recipients in connection with the supply of 
services listed in group (a) and (b) above. 
(d) Human blood and products derived from human blood. (e) Human or animal organs or tissue for medical research. (f) The supply of services by persons on the registry of veterinary surgeons 
and veterinary doctors. 
(g) Medicine for the treatment of human being and animals. 
(h) The supply of goods made for, and suitable only for the use of, disabled 
persons. 
 
6.  Education 
 
a) The provision of research in a school or university. b) The provision, otherwise than for profit, of professional or vocational 
training or refresher training. 
c) The provision of education in a school or university and supply of goods 
made in connection with such services. WT/ACC/SPEC/NPL/5 
Page 26  
 
 
7.  Books, Newspapers etc.  
(a) Books, brochures and pamphlets. (b) Newspapers, newsletters and periodicals. 
(c) Maps, and charts. 
(d) Covers, cases and other articles supplied with items (a) to (c) above if not 
separately charged. 
(e) Radio and television transmissions.  
8.  Artistic and Cultural Goods and Services, Carving Services 
 
(a) Cultural and artistic services (painting, carving and related services). (b) Cultural programme. (c) Admission to libraries, archaeology, museums, zoos and botanical 
gardens. 
 
9.  Passenger Transportation Services  
- The provision of services for the transport of person from one point in 
the Kingdom of Nepal to another point in the Kingdom of Nepal (except 
sightseeing trips). 
 
10.  Personal or Professional Service  
- Personal services rendered by lawyers, auditors, engineers, artists, 
actors, singers, dancers, sportsmen, authors, writers, designers, 
professional sportsmen, insurers, booksellers, translators and interpreters institutionally or individually. 
 
11.  Other Goods or Services  
(a)  Postal services (provided by Nepal only) 
 
(i) The service of conveyance of letters, money and postal packets by 
the Post Office. 
(ii) The supply by the Post Office of any service in connection with 
the conveyance of letters, money and postal packets. 
(iii) Postage stamps.  
(b)  Financial and insurance services  
- Bank notes, and cheque books 
 
(i) The printing and issue of bank notes. (ii) The supply of bank notes from outside the Kingdom of Nepal to 
the Kingdom of Nepal. 
(iii) Cheque book. 
 
(c)  Gold and silver  
(i) Gold and gold coins (other than ornaments and goods made of gold).  WT/ACC/SPEC/NPL/5 
 Page 27 
 
 
(ii) Silver and silver coins (other than ornaments and goods made of 
silver). 
 
12.  Land and Building  
Purchase and rent of land and buildings 
 13.  Betting, Casinos, Lotteries  
(a) The provision of any facilities for the placing of bets or the playing of 
games of chance. 
(b) Lottery.   
The following goods or services attract  zero rate  of value added tax: 
 
1. Goods or services purchased or imported by His Majesty the King, Her Majesty 
the Queen, His Majesty the Crown Prince, and other members of the Royal Family. 
 2. Export of goods 
 
(a) Goods exported outside the Kingdom of Nepal; or 
(b) Goods shipped for use as stores on a flight to an eventual destination 
outside the Kingdom of Nepal; or 
(c) Goods loaded for use as stores on aircraft to a destination outside the 
Kingdom of Nepal or as merchandise for sale by retail or supplied to 
persons in the course of such a flight. 
 3.  Export of services 
 
(a) A supply of services by a person resident in the Kingdom of Nepal to a 
person outside the Kingdom of Nepal and having no business 
establishment, agent, or legal representative acting on his behalf in the 
Kingdom of Nepal. 
(b) Where goods are supplied on a hire or loan basis by a registered person 
resident in Nepal to a person resident outside the Kingdom of Nepal. 
 
4.  Imports of goods and services by accredited diplomats. 
 In accordance with Section 5 of the Value Added Tax Act, 1996, the exemptions to the VAT were equally available to imports and domestic products. 
 
57. In response to questions concerning the tax exemptions in favour of cottage industries, 
the representative of Nepal said that cottage industries having transactions less than the annual taxable transaction threshold level established in the VAT regulations were exempt from VAT. 
The Industrial Enterprises Act 1992 defines 'Cottage Industry' as industries utilizing specific 
skills or local raw materials and resources, and labour intensive and related with national tradition, art culture with the exception of cigarettes, bidi, cigar, chewing tobacco, khaini , 
industries producing other goods of a similar nature utilizing tobacco as the basic raw material, WT/ACC/SPEC/NPL/5 
Page 28  
 
alcohol and beer producing industries, such as handloom; pedal-loom; semi-automatic loom; 
warping, dyeing and printing; tailoring (other than ready made garments); knitting, hand 
knitted woollen mats and blankets ( radi, pakhi ); woollen carpet; pasmina ; woollen garments; 
carpentry; wooden artistic product; cane and bamboo works; natural fibre products; hand made paper and goods made up thereof; gold; filigree products including silver, brass, copper, precious and semi precious stones; ornaments; sculpture and pottery; honey, chauri , cardamom 
processing; clay or ceramic pottery; leather cutting and tanning; rural tanning and leather 
goods producing works; jute, sabai  grass, babio , choya , cotton thread products; artistic products 
made up of bones and horns; stone carving; ceramic fine arts; pauwa;  boutique; incense stick 
(dhup );dolls and toys industries with the fixed assets of up to two hundred thousand rupees.  
Excise Tax
 
58. The representative of  Nepal said that  the excise tax was levied to the products specified 
in the Finance Act. This tax did not apply to imported goods. Imported goods were subject to the equalising duty levied at the rate of the excise tax applicable to the products listed in the Financial Act. The objective of this measure was to provide the same treatment to domestically 
produced and imported goods. The excise tax was applied to domestic goods on the basis of ex-
factory price. Imported goods were taxed on the basis of C.I.F price. The following were subject to excise taxes: 
S.No. HS Code Items Excise duty 
1. 1703.10 Can molasses Rs. 25 per quintal 
2.  Raw sugar in solid form Rs. 55 per quintal 
3. 2106.90.20 Betel/A reca (Pan Parag) nuts mixed with catechu and 
lime with or without nicotine  Rs. 165 per kg 
4. 2206 Champagne, Perry mead etc. Rs. 125 per litre 
5 2204.29 Wine  or fresh fruits not exceeding 17 per cent 
alcoholic content Rs. 70 per litre 
6. 2306.00 Cider Rs. 70 per litre 
7. 2203.00 Beer Rs. 36 per litre 
8. 2206.00 Chhyang Rs. 15 per litre 
9. 2207.20 Denatured spirits Rs. 6 per litre 
10. 2207.20 Thinner Rs. 25 per litre 
11. 2208.00 Industrial spirits with 57.38 to 80 per cent alcohol 
content by volume, to be used as raw material for spirituous drink Rs. 70 per litre 
12. 2207.10 Rectified spirit, silent spirit (ENA) used as raw 
material for alcoholic products with an alcoholic 
strength of 80 per cent or higher by volume Rs. 25 per litre 
13.  
2208.20.90 
2208.30.90 
2208.50.90 All alcoholic products  
Up to strength of 40 UP  
Strength of 40 to 60 UP  
Strength 60 UP and higher   
Rs. 260 per LPL 
Rs. 150 per LPL 
Rs. 44 per LPL  WT/ACC/SPEC/NPL/5 
 Page 29 
 
 
S.No. HS Code Items Excise duty 
14. 24.02.20 All kinds of cigarette  
i. Cigarettes up to 70 mm in length  a)  Without filter  
 b)  With filter  
ii. 70 mm to 75 mm (with filter)  iii. 76 mm to 85 mm (with filter)  
  iv. More than 85 mm (with filter)   
Rs. 100 per M Rs. 285 per M 
Rs. 365 per M 
Rs. 500 per M Rs. 675 per M 
15. 2402.10 All kinds of cigar Rs. 2.25 per stick 
16. 2403.10.10 Pipe tobacco  Rs. 350 per kg 
17. 2403.99 Tobacco extracts an d essences including chewing 
tobacco  Rs. 165 per kg 
18. 2403.99 Raw chewing tobacco  Rs. 100 per kg 
19. 2523 All kinds of cement Rs. 100 per M.T. 
20. 6901-5 All kinds of bricks Rs. 500 per thousand  
(Equalizing duty) 
21. 8702, 3, 4 Vehicle fuelled by petrol or diesel  
Motor vehicle for transport (single cab, delivery van) 30 to 80% 
(Equalizing duty) 
 
22. 3501 All kind of polythene bags Rs. 15 per kg 
 
59. Noting that chhyang, beer, cider and other beverages were subject to tax differentials, a 
Member asked that Nepal explain whether Chhyang was produced in Nepal for commercial sale, if chhyang was exported, if the excise tax on chhyang was collected at the time of 
production or at the point of sale, and whether chhyang was a fermented beverage like beer or 
wine, or a distilled beverage like whisky or vodka. The representative of Nepal responded that, from the date of accession, Nepal would apply its domestic taxes, including value-added and excise taxes, in a non-discriminatory manner consistent with Articles I and III of the GATT 
1994. Chhyang was a fermented beverage  like beer and its alcohol content depends on the 
manner the diverse local tribal people ferment it.  At present, Chyyang was neither produced for commercial sale nor was it exported.  In case it was produced for commercial sale, the excise tax would be collected at the time of production. The Working Party took note of these commitments. 
Rules of Origin
 
60. The representative of Nepal said that the application for import requires the importer to 
state the country of origin of the goods to be imported. Nepal was applying the rules of origin under the SAPTA agreement in order to establish whether preferences should be applied on 
imported goods. In case of exports, document certifying the origin of goods, export declaration 
form, invoice, letter of credit, packing list, visa for ready-made garments for exports were required along with the application. Members of the Federation of Nepalese Chambers of WT/ACC/SPEC/NPL/5 
Page 30  
 
Commerce and Industry were the only agencies authorized to issue a certificate of origin for 
certifying the export of Nepalese origin goods. 
61.  In response to further questions, the representative of Nepal said that proof of origin 
was required for products originating in those countries exporting to Nepal under preferential treatment. The certificate of origin issued by an authority designated by the Government of the exporting country and notified in accordance with the Certification Procedure constituted the 
proof of origin. Products wholly produced or obtained in the exporting country or products not 
wholly produced or obtained but processed in the exporting country were considered to originate in the exporting country. Raw or mineral products extracted from its soil, its water or sea beds, agricultural products harvested, animals born and raised and the products obtained from these animals, products obtained by hunting or fishing, products of sea fishing and other 
marine products taken from the high seas by its vessels and processed and/or made on board its 
factory ships, used articles collected and the recovery of raw materials, waste and scrap resulting from manufacturing operations and goods produced exclusively from the above products were considered products wholly produced or obtained in the exporting country. 
Products worked on or processed as a result of which the total value of materials, parts or 
produce originating in other countries or of undetermined origin used, did not exceed 50 per cent of the f.o.b. value of the products produced or obtained, and the final process of manufacture was performed within the territory of the exporting country, were eligible for 
preferential concessions. Similarly, products covered by sectoral agreements between member 
countries of regional groupings  were also eligible for preferential treatment. Nepal only requires proof of origin to determine whether goods qualify for  preferential treatment under the trade agreements to which it is a Party or by national legislation. Nepal was ready to implement the WTO Agreement on Rules of Origin.  
62. The representative of Nepal confirmed that Nepal would introduce a WTO consistent 
regime with respect to rules of origin and would adopt the procedural protection covering the requirements of Article 2 (h) and Annex II  paragraph 3 (d) of the WTO Agreement on Rules of Origin. He also confirmed that for non-preferential and preferential rules of origin, 
respectively, the relevant Nepalese authorities would provide, upon request of an exporter, 
importer or any person with a justifiable cause, an assessment of the origin of the import and outline the terms under which it will be provided.  Nepal would incorporate the provisions of the WTO Agreement on Rules of Origin into the Customs Act, 1962 and the Customs Regulation, 1969. A timetable for the enactment of legislation that implements the WTO 
Agreement on Rules of Origin in Nepal's legal regime was provided in the Legislative Action 
Plan circulated in document WT/ACC/NPL/10/Rev.1 reproduced in Annex III of this Report.   WT/ACC/SPEC/NPL/5 
 Page 31 
 
 
The Department of Customs had prepared the amendments to the Customs Act 1962 
(Amendment) and to the Customs Regulations 1969 (Amendment) which would be submitted by 
the Ministry of Finance to the Council of Ministers by August 2003.  It is expected that the 
Council of Ministers would endorse and adopt these amendments by 31 December 2003.  The Working Party took note of these commitments.   
Other customs formalities
 
63. The representative of Nepal confirmed that Nepal did not require any kind of 
certification of the customs documentation by consular officials.  
Preshipment inspection  
64. The representative of Nepal said that there was no system of preshipment inspection in 
Nepal.  
65. The representative of Nepal confirmed that Nepal would endeavour to put into place if 
necessary a pre-shipment inspection system programme in conformity the WTO Agreements. Nepal would also give due consideration to the recommendations of the Working Party on Pre-shipment Inspection of 2 December 1997 and subsequent recommendations issued by the 
Working Party.  The Working Party took note of these commitments.  
Anti-dumping and countervailing duties regimes
 
66. The representative of Nepal said that Nepal did not have an antidumping or 
countervailing duty regime at this time.  
67. The representative of Nepal confirmed that Nepal would ensure that anti-dumping and 
countervailing duty measures would be applied in conformity with the requirements of the WTO Agreement, in particular the Agreements on Anti-Dumping and Subsidies and Countervailing Measures. He confirmed that Nepal would introduce a WTO consistent legal regime with respect to anti-dumping and countervailing measures.  During the transition period 
no such measures would be applied in a manner inconsistent  with the WTO Agreements on the 
Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 and on Subsidies and Countervailing Measures.  A timetable for the enactment of legislation that implements the WTO Agreement on Anti-Dumping in Nepal's legal regime was provided in the 
Legislative Action Plan circulated in document WT/ACC/NPL/10/Rev.1 and reproduced in 
Annex III of this Report.  Draft legislation would be prepared in December 2003, the endorsement by the Council of Ministers would take place in March 2004 and the expected WT/ACC/SPEC/NPL/5 
Page 32  
 
approval date was July 2004. A timetable for the enactment of legislation that implements the 
WTO Agreement on Subsidies and Countervailing Measures in Nepal's legal regime was 
provided in the Legislative Action Plan circulated in document WT/ACC/NPL/10/Rev.1 and 
reproduced in Annex III of this Report.   A draft bill, policies and regulations  would be prepared by the Department of Industry, submitted to the Ministry of Industry, Commerce and Supplies and were expected to be adopted by the Council of Ministers in May  2004. The 
Working Party took note of these commitments.   
Safeguards Regime
 
68. With reference to the safeguards regime, the representative of Nepal said that the 
Government may restrict imports by issuing an order in accordance with Section 3 of the Export Import (Control) Act, 1957. The involved authorities are the Ministry of Industry, 
Commerce and Supplies, Department of Commerce and the Central Bank. Nepal may restrict 
the quantity of imports by issuing an order in accordance with Section 3 of the Export Import (Control) Act, 1957. Currently, there were no quantitative restrictions on imports. Nepal undertook to introduce trade restrictions for balance of payment purposes only in the cases 
specified in the WTO Agreements. 
69.  The representative of Nepal said that Nepal would only use the authority in Section 3 of 
Export Import (Control) Act of 1957 in conformity with WTO provisions,  including for balance of payments purposes. Nepal would introduce WTO consistent legislation on safeguard 
measures in accordance with the Legislative Action Plan circulated in 
documentWT/ACC/NPL/10/Rev. 1 reproduced in Annex III of this Report. During the transition period, Nepal would apply any  safeguard  measures only in full conformity with the relevant WTO provisions. He also confirmed that any import controls justified under balance of payments problems  would be applied in compliance with GATT 1994 Article XVIII and the 
Understanding on the Balance of Payment Provisions of the General Agreement on Tariffs and 
Trade 1994. The Working Party took note of these commitments. 
Export regulation
 
Registration requirements, customs tariffs, fees  and charges for services rendered, application 
of internal taxes to exports  
70. The representative of Nepal said that the same registration requirements and tariff 
nomenclature were used for imports and exports. The import and export licensing regime had been introduced for statistical purposes. Currently Nepal levied export duties on the items listed  WT/ACC/SPEC/NPL/5 
 Page 33 
 
 
below. The purposes of levying export duties are to discourage environmental degradation, to 
ensure food security and to discourage trade diversion to neighbouring countries.  The 
application for the export licence was  submitted to the Director-General of the Department of 
Commerce under the prescribed form indicated in Schedule-2 of the Export Import Regulation 1978. The necessary documents and the information required were mentioned in the application form. The export licenses were granted for different purposes, e.g., for commercial purpose, for 
purposes of private use for specimen purpose, for purposes of Government office use, for 
maintenance purpose etc. The commercial purpose export licence is granted only to registered entities. The Authority issues the certificate of export licence, in accordance with the format prescribed in Schedule-4 of the Export Import Regulation 1978. 
- Export duties  
Heading 
No. Sub 
heading 
No. Description of Article Current 
Applied Rate 
(in %) 
1 2 3 4 
15.07  Soyabean oil and its fractions, whether or not refined, but not chemically 
modified.  
 1507.10.00 -Crude oil, whether or not degummed 5 
 1507.90.00 -Other 5 
15.11  Palm oil and its fractions, whether or not refined, but not chemically 
modified.  
 1511.10.00 -Crude oil 5 
 1511.90.00 -Other 5 
15.13  Coconut (copra), palm kernel or babassu o il and fractions thereof, whether or not refined, 
but not chemically modified. 
  -Coconut (copra) oil and its fractions:  
 1513.11.00 --Crude oil 2 
 1513.19.00 --Other 2 
  -Palm kernel or babassu oil and fractions thereof:  
 1513.21.00 --Crude oil 5 
 1513.29.00 --Other 5 
15.16  Animal or vegetable fats and oils and their fractions, partly or wholly hydrogenated, inter-
esterified, reesterified or elaidinised, whet her or not refined, but not further prepared. 
 1516.10.00  -Animal fats and oils and their fractions 5 
 1516.20.00 -Vegetable fats and oils and their fractions 5 
15.17  Margarine; edible mixtures or preparations of animal or vegetable fats or oils or o f 
fractions of different fats or oils of  this Ch apter, other than edible fats or oils or their 
fractions of Heading 15.16. 
 1517.90.00 -Other 5 
17.03  Molasses resulting from the extraction or refining of sugar.   
 1703.10.00 -Cane molasses 5 
 1703.90.00 -Other 5 
25.05  Natural sands of all kinds, whether  or not coloured, other than metal- bearing sands o f 
Chapter 26. WT/ACC/SPEC/NPL/5 
Page 34  
 
Heading 
No. Sub 
heading 
No. Description of Article Current 
Applied Rate 
(in %) 
1 2 3 4 
 2505.10.00 -Silica sand and quartz sands Rs. 100 per 
cubic meter 
 2505.90.00 -Other Rs. 100 per 
cubic meter 
25.16  Granite, porphyry, basalt, sandstone and  other monumental or building stone, whether  or 
not roughly trimmed or merely cut, by  sawing or otherwise, into blocks or slabs of a 
rectangular (including square) shape. 
  -Granite:  
   --Crude or roughly trimmed   
 2516.21.10 -- Crushed stones and stone chips upto the size 2 inches for road building Rs. 50 per 
cubic meter 
 2516.21.20 -- Crushed stones and stone chips of a size more than 2 inches for road 
building Rs. 100 per 
cubic meter 
 2516.21.30 -- Boulders and uncrushed stones for road building Rs. 300 per 
cubic meter 
 2516.21.90 -- Mixture of sand and pebbles (chhary) Rs. 100 per 
cubic meter 
   --Merely cut, by sawing or otherwise, into blocks or slabs of a rectangular 
(including square) shape:   
 2516.22.10 -- Crushed stones and stone chips upto the size 2 inches for road building Rs. 50 per 
cubic meter 
 2516.22.20 -- Crushed stones and stone chips of a size more than 2 inches for road 
building Rs. 100 per 
cubic meter 
 2516.22.90 -- Boulders and uncrushed stones for road building Rs. 300 per 
cubic meter 
25.17  Pebbles, gravel, broken or crushed stone, of a kind commonly used for concrete 
aggregates, for road metalling or for railway or other ballast, shingle and flint, whether or 
not heat-treated; macadam of slag, dross or  similar industrial waste, whether or not 
incorporating the materials cited in the first part of the heading tarred macadam; granules, 
chippings and powder, of stones of Heading 25.15 or 25.16,  whether or not heat-treated 
  -Pebbles, gravel, broken or crushed stone, of a kind commonly used for 
concrete aggregates, for road metalling or for railway or other ballast, 
shingle and flint, whether or not heat-treated :   
 2517.10.10 -- Crushed stones and stone chips upto the size 2 inches for road building Rs. 50 per 
cubic meter 
 2517.10.20 -- Crushed stones and stone chips of a size more than 2 inches for road 
building Rs. 100 per 
cubic meter 
 2517.10.90 -- Boulders and uncrushed stones for road building Rs. 300 per 
cubic meter 
  -Macadam of slag, dross or simila r Industrial waste,  whether or not 
incorporating the materials cited in Sub-heading 2517.10 :   
 2517.20.10 -- Crushed stones and stone chips upto the size 2 inches for road building Rs. 50 per 
cubic meter 
 2517.20.90 -- Crushed stones and stone chips of a size more than 2 inches for road 
building Rs. 100 per 
cubic meter 
 2517.30.00 -Tarred macadam Rs. 50 per 
cubic meter  WT/ACC/SPEC/NPL/5 
 Page 35 
 
 
Heading 
No. Sub 
heading 
No. Description of Article Current 
Applied Rate 
(in %) 
1 2 3 4 
  -Granules, chippings and powder, of stones of Heading 25.15 or 25.16, whether or not 
heat-treated: 
 2517.41.00 --Of marble 6 
 2517.49.00  --Other 6 
25.19  Natural magnesium carbonate (magnesite); fused magnesia; dead- burned (sintered) 
magnesia, whether or not containing small quantities of other oxides added before sintering; other magnesium oxide, whether or not pure. 
 2519.10.00 -Natural magnesium carbonate (magnesite) Rs. 200 per 
cubic meter 
 2519.90.00 -Other Rs. 200 per 
cubic meter 
28.17 2817.00.00 Zinc oxide; zinc peroxide. 3 
32.03   Colouring matter of vegetable or animal origin (including dyeing extracts 
but excluding animal black), whether or not chemically defined; 
preparations based on colouring matter of vegetable or animal origin as 
specified in note 3 to this Chapter:   
  3203.00.10 -- Cutch of acacia (Kachha) Per Kg Rs. 2/-
  3203.00.20 -- Catechu of acacia (Kathas) Per Kg Rs. 5/-
39.15  Waste, parings and scrap, of plastics.  
 3915.10.00 -Of polymers of ethylene 4 
 3915.20.00 -Of polymers of styrene 4 
 3915.30.00 -Of polymers of vinyl chloride 4 
 3915.90.00 -Of other plastics 4 
39.16  Monofilament of which any cross-sec tional dimension exceeds 1mm, rods, sticks and 
profile shapes, whether or not  surface-worked but not othe rwise worked, of plastics. 
 3916.10.00 -Of polymers of ethylene 4 
 3916.20.00 -Of polymers of vinyl chloride 4 
 3916.90.00 -Of other plastics 4 
39.17  Tubes, pipes and hoses, and fittings theref or (for example, joints, elbows, flanges), o f 
plastics. 
 3917.10.00 -Artificial guts (sausage casi ngs) of hardened rotein or of cellulosic 
materials 4 
  -Tubes, pipes and hoses, rigid:  
 3917.21.00 --Of polymers of ethylene 4 
 3917.22.00 --Of polymers of propylene 4 
 3917.23.00 --Of polymers of vinyl chloride 4 
 3917.29.00 --Of other plastics 4 
  Other tubes, pipes and hoses:  
 3917.31.00 --Flexible tubes, pipes and hoses, having a minimum burst pressure of 27.6 
Mpa. 4 
 3917.32.00 --Other, not reinforced or otherwise combined with other materials, 
without fittings. 4 
 3917.33.00 --Other, not reinforced or otherwise combined with other materials, with 
fittings. 4 
 3917.39.00 --Other 4 
 3917.40.00 -Fittings 4 WT/ACC/SPEC/NPL/5 
Page 36  
 
Heading 
No. Sub 
heading 
No. Description of Article Current 
Applied Rate 
(in %) 
1 2 3 4 
39.18  Floor coverings of plastics, whether or not self-adhesive, in rolls or in the form of tiles; 
wall or ceiling coverings of plastics, as defined in Note 9 to this Chapter. 
 3918.10.00 -Of polymers of vinyl chloride 4 
 3918.90.00 -Of other plastics 4 
39.19  Self-adhesive plates, sheets, film, foil, tape, strip and other flat shapes, of plastics, whether 
or not in rolls. 
 3919.10.00 -In rolls of a width not exceeding 20 cm 4 
 3919.90.00 -Other 4 
39.20  Other plates, sheets, film, foil and strip, of plastics, non-cellular and not reinforced, 
laminated, supported or similarly combined with other materials. 
 3920.10.00 -Of polymers of ethylene 4 
   3920.20.00 -Of polymers of propylene 4 
 3920.30.00 -Of polymers of styrene 4 
  -Of polymers of vinyl chloride:  
 3920.43.00 - Containing by weight not less than 6% of plasticiser 4 
 3920.49.00 -- Other 4 
  -Of acrylic polymers:  
 3920.51.00 --Of polymethyl methacrylate 4 
 3920.59.00 --Other 4 
  -Of polycarbonates, alkyd resins, polyallylesters or other polyesters:  
 3920.61.00 --Of polycarbonates 4 
 3920.62.00 --Of polyethylene terephthalate 4 
 3920.63.00 --Of unsaturated polyesters 4 
 3920.69.00 --Of other polyesters 4 
  -Of cellulose or its chemical derivatives:  
 3920.71.00 --Of regenerated cellulose 4 
 3920.72.00 --Of vulcanised fibre 4 
 3920.73.00 --Of cellulose acetate 4 
 3920.79.00 --Of other cellulose derivatives 4 
  -Of other plastics:  
 3920.91.00 --Of polyvinyl butyral 4 
 3920.92.00 --Of polyamides 4 
 3920.93.00 --Of amino-resins 4 
 3920.94.00 --Of phenolic resins 4 
 3920.99.00 --Of other plastics 4 
39.21  Other plates, sheets, film, foil and strip, of plastics.  
  -Cellular:  
 3921.11.00 --Of polymers of styrene 4 
 3921.12.00 --Of polymers of vinyl chloride 4 
 3921.13.00 --Of polyurethanes 4 
 3921.14.00 --Of regenerated cellulose 4 
 3921.19.00 --Of other plastics 4 
 3921.90.00 -Other 4 
39.22  Baths, shower-baths, wash-basins, bidets, lavatory pans, seats and covers, flushing cisterns 
and similar sanitary ware, of plastics. 
 3922.10.00 -Baths, shower-b\aths and wash-basins 4 
 3922.20.00 -Lavatory seats and covers 4 
 3922.90.00 -Other 4  WT/ACC/SPEC/NPL/5 
 Page 37 
 
 
Heading 
No. Sub 
heading 
No. Description of Article Current 
Applied Rate 
(in %) 
1 2 3 4 
39.23  Articles for the conveyance or packing of goods, of plastics; stoppers, lids, caps and other 
closures, of plastics. 
 3923.10.00 -Boxes, cases, cr ates and similar articles 4 
  -Sacks and bags (including cones):  
 3923.21.00 --Of polymers of ethylene 4 
 3923.29.00 --Of other plastics 4 
 3923.30.00 -Carboys, bottles, flasks and similar articles 4 
  -Spools, cops, bobbins and similar supports:  
 3923.40.10 -- Video and audio cassettes without magnetic tape 4 
 3923.40.90 -Other 4 
 3923.50.00 -Stoppers, lids, caps and other closures 4 
 3923.90.00 -Other 4 
39.24  Tableware, kitchenware, other household articles and toilet articles, of 
plastics.  
  -Tableware and kitchenware:       
 3924.10.10 --Infant feeding bottles 4 
 3924.10.90 --Other 4 
 3924.90.00 -Other 4 
39.25  Builders' wares of plastics, no t elsewhere specified or included.  
 3925.10.00 -Reservoirs, tanks, vats and sim ilar containers, of a capacity exceeding 300 
L. 4 
 3925.20.00 -Doors, windows and their frames and thresholds for doors 4 
 3925.30.00 -Shutters, blinds (including venetian blinds) and similar articles and parts 
thereof 4 
 3925.90.00 -Other 4 
39.26  Other articles of plastics and articles of other materials or Headings 39.01 
to 39.14.  
 3926.10.00 -Office or school supplies 4 
 3926.20.00 -Articles of apparel and clothing accessories (i ncluding gloves) 4 
 3926.30.00 -Fittings for furniture, coachwork or the like 4 
 3926.40.00 -Statuettes and other ornamental articles 4 
  - O t h e r :   
 3926.90.10 --Bangles, tika, tikuli and beads 4 
 3926.90.20 -- Plastic dye for shoe making 4 
 3926.90.30 -- Plastic for laboratory equipment 4 
 3926.90.40 -- Pet bottle (raw material for bottle) 4 
 3926.90.90 --Other 4 
44.01  Fuel wood, in logs, in billets, in twigs, in faggots or in similar forms; wood in chips or 
particles; sawdust and wood waste and scrap, whether or not agglomerated in logs briquettes, pellets or similar forms. 
 4401.10.00 -Fuel wood, in logs, in billets, in twigs, in faggots or in similar forms; 
wood in chips or particles; sawdust and wood waste and scrap, whether or 
not agglomerated in logs briquettes, pellets or similar forms. 200 
  -Wood in chips or particles:  
 4401.21.00 --Coniferous 200 
 4401.22.00 --Non-coniferous 200 
 4401.30.00 -Sawdust and wood waste and scrap, whether or not agglomerated in logs, 
briquettes, pellets or similar forms 200 WT/ACC/SPEC/NPL/5 
Page 38  
 
Heading 
No. Sub 
heading 
No. Description of Article Current 
Applied Rate 
(in %) 
1 2 3 4 
44.03  Wood in the rough, whether or not stripped of bark or sapwood, or roughly 
squared.  
 4403.10.00 -Treated with paint, stai ns, creosote or other preservatives 200 
 4403.20.00 -Other coniferous 200 
  -Other, of  tropical woodspecified In subheading Note 1 to this Chapter.  
 4403.41.00 -- Dark red meranti, light red meranti and meranti bakau 200 
 4403.49.00 --  Other 200 
  - O t h e r :   
 4403.91.00 --Of oak (Quercus spp.) 200 
 4403.92.00 --Of beech (Fagus spp.) 200 
 4403.99.00 --Other 200 
44.04  Hoopwood; split poles; piles, pickets and stakes of wood, pointed but not sawn lengthwise; 
wooden sticks, roughly trimmed but not turned, bent or otherwise worked, suitable for the 
manufacture of walking-sticks, umbrellas, tool handles or the like; chipwood. 
 4404.10.00 -Coniferous 200 
 4404.20.00 -Non-coniferous 200 
44.05 4405.00.00 Wood wool; wood flour. 200 
44.06  Railway or tramway sleep ers (cross-ties) of wood.  
 4406.10.00 -Not impregnated 200 
 4406.90.00 -Other 200 
44.07  Wood sawn or chipped lengthwise, sliced  or peeled, whether or not planed, sanded or 
finger-jointed, of a thickness exceeding 6 mm. 
 4407.10.00 -Coniferous 200 
  -Of  tropical wood specified In su bheading Note 1 to this Chapter:  
 4407.24.00 -- Virola, mahogany (swietenia spp.), imbuia and balsa 200 
 4407.25.00 -- Dark red meranti, right red meranti and meranti bakau 200 
 4407.26.00 -- White lauan, white meranti, white seraya, yellow meranti and alan 200 
 4407.29.00 -- Other 200 
  - O t h e r :   
 4407.91.00 --Of oak 200 
 4407.92.00 --Of beech 200 
 4407.99.00 --Other 200 
44.08  Veneer sheets and sheets for plywood (whether or not spliced) and other wood sawn 
lengthwise, sliced or peeled, whether or not pl aned, sanded or finger-jointed, of a thickness 
not exceeding 6 mm. 
 4408.10.00 -Coniferous 70 
  - Of tropical wood specified In su bheading Note 1 to this Chapter:  
 4408.31.00 -- Dark red meranti, light red meranti and meranti bakau 70 
 4408.39.00 -- Other 70 
 4408.90.00 -Other 70 
54.02  Synthetic filament yarn (other than sewing thread), not put up for retail sale, including 
synthetic monofilament of less than 67 decitex. 
  -Other yarn, single, with a tw ist exceeding 50 turns per metre  
   --Of nylon or other polyamides :   
 5402.51.10 -- Texturised yarn made by POY 2 
 5402.51.90 -- Other 0.5 
  --Of polyesters :    WT/ACC/SPEC/NPL/5 
 Page 39 
 
 
Heading 
No. Sub 
heading 
No. Description of Article Current 
Applied Rate 
(in %) 
1 2 3 4 
 5402.52.10 -- Texturised yarn made by POY 2 
 5402.52.90 -- Other 0.5 
  --Other :   
 5402.59.10 -- Texturised yarn made by POY 2 
 5402.59.90 -- Other 0.5 
  -Other yarn, multiple (folded) or cabled:  
  --Of nylon or other polymides :   
 5402.61.10 -- Texturised yarn made by POY 2 
 5402.61.90 -- Other 0.5 
  --Of polyesters :   
 5402.62.10 -- Texturised yarn made by POY 2 
 5402.62.90 -- Other 0.5 
   -Other :   
 5402.69.10 -- Texturised yarn made by POY 2 
 5402.69.90 -- Other 0.5 
73.04  Tubes, pipes and hollow profiles, seamless or iron (other than cast iron) or 
steel.  
 7304.10.00 - Line pipe of a kind used for oil or gas pipelines 2 
  - Casing, tubing and drill pipe, of a kind used in drilling for oil or gas:  
 7304.21.00 -- Drill pipe 2 
 7304.29.00 -- Other 2 
  - Other, of circular cross-section, or iron or non-alloy steel:  
 7304.31.00 -- Cold-drawn or cold-rolled (cold-reduced) 2 
 7304.39.00 -- Other 2 
  - Other, of circular cross-section, or iron or non-alloy of stainless steel:  
 7304.41.00 -- Cold-drawn or cold-rolled (cold-reduced) 2 
 7304.49.00 -- Other 2 
  - Other, of circular cross-section, of other alloy steel:  
 7304.51.00 -- Cold-drawn or cold-rolled (cold-reduced) 2 
 7304.59.00 -- Other 2 
 7304.90.00 - Other 2 
73.05  Other tubes and pipes (for example, welded, riveted or similarly closed), having circular 
cross-sections, the external diameter of which exceeds 406.4 mm, or iron or steel. 
  - Line pipe of a kind used for oil or gas pipelines:  
 7305.11.00 -- Longitudinally submerged arc welded 2 
 7305.12.00 -- Other, longitudinally welded 2 
 7305.19.00 -- Other 2 
 7305.20.00 - Casing of a kind used in the drilling for oil or gas 2 
  -Other, welded:  
 7305.31.00 -- Longitudinally welded 2 
 7305.39.00 -- Other 2 
 7305.90.00 - Other 2 
73.06  Other tubes, pipes and hollow profiles (for example, open seam or welded, riveted or 
similarly closed), or iron or steel. 
 7306.10.00 - Line pipe of a kind used for oil or gas pipelines 2 
 7306.20.00 - Casing and tubing of a kind used in drilling for oil or gas 2 
 7306.30.00 - Other, welded, of circular cross-section of iron or non-alloy steel 2 WT/ACC/SPEC/NPL/5 
Page 40  
 
Heading 
No. Sub 
heading 
No. Description of Article Current 
Applied Rate 
(in %) 
1 2 3 4 
 7306.40.00 - Other, welded, of circular cross-section of stainless steel 2 
 7306.50.00 - Other, welded, of circular cross-section of other alloy steel 2 
 7306.60.00 - Other, welded, of non-circular cross-section 2 
 7306.90.00 - Other 2 
73.07  Tube or pipe fittings  (for example, couplings, el bows, sleeves), of iron or 
steel.  
  -Cast fittings:  
 7307.11.00 -- Of non-malleable cast iron 2 
 7307.19.00 -- Other 2 
  - Other of stainless steel:  
 7307.21.00 -- Flanges 2 
 7307.22.00 -- Threaded elbows, bends and sleeves 2 
 7307.23.00 -- Butt welding fittings 2 
 7307.29.00 -- Other 2 
  - Other:  
 7307.91.00 -- Flanges 2 
 7307.92.00 -- Threaded elbows, bends and sleeves 2 
 7307.93.00 -- Butt welding fittings 2 
 7307.99.00 -- Other 2 
74.08  Copper wire.  
  -Of refined copper:  
 7408.11.00 -- Of which the maximum cross-sectional dimesnion exceeds 6 mm 3 
 7408.19.00 --Other 3 
  - Of copper alloys:  
 7408.21.00 -- Of copper-zinc base alloys (brass) 3 
 7408.22.00 -- Of copper-nickel base alloys (cupro-nickel) or copp er-nickel-zinc base 
alloys (nickel silver) 3 
 7408.29.00 -- Other 3 
94.03  Other furniture and parts thereof.  
 9403.70.00 - Furniture of plastics 4 
 
71. The representative of Nepal said that Nepal levied an export service fee  of 0.5 per cent 
ad valorem . The export service charge is applied on the basis of f.o.b. price, to all exports from 
Nepal. Nepal has not considered reducing further the service charge. An important reduction has already been implemented from 2 per cent to the current 0.5 per cent  The current level of 
the service charge did not represent a tax on export for fiscal purposes. Nepal was examining 
the cost of the services rendered by the administration with respect to exports and imports and would revise the export charge, along with the import licensing fee, to bring them into conformity with the requirements of Article VIII of GATT 1994. The Working Party took note 
of this commitment.  WT/ACC/SPEC/NPL/5 
 Page 41 
 
 
Quantitative export restrictions, including prohibitions, quotas and licensing systems  
72. Some Members of the Working Party noted that Nepal banned from exportation the 
following products: Raw hides and skin (including dry salted);  Raw wool; All imported 
raw materials, parts and capital goods; Mamira; and Logs and timber.  In their view, the ban on the export of raw hides and skins, raw wool, and logs and timber could not be justified under Articles XI(a) and XX(g) of the GATT 1994, unless the export restrictions were made effective 
in conjunction with restrictions on domestic production or consumption,  or action was taken to 
prevent or relieve critical shortages of foodstuffs or other products essential to Nepal. The ban on the export of imported raw materials, parts and capital goods appeared to be inconsistent with Article III of GATT 1994 and should be eliminated.  The representative of Nepal said that  logs, timber and mamira obtained from naturally grown plants were exhaustible natural 
resources and it was  Nepal's responsibility as a signatory of various Multilateral 
Environmental Conventions, to preserve and protect natural resources. Thus, there were also restrictions for domestic consumption and for authorized uses. Nepal would consider lifting the ban or restriction on the export of these products which were planted (not natural resources) 
and grown for commercial purposes. The export restrictions on raw hides and skins and raw 
wool, had been temporarily applied and Nepal intended to lift this export restriction at an appropriate time. Nepal had banned the export of imported raw materials, parts and capital goods due to the possibility of trade deflection. These measures would be reviewed in the light of 
Article III of GATT 1994. 
73. The representative of Nepal said that as a party to the Convention on International 
Trade in Endangered Species of Flora and Fauna (CITES), Nepal honoured the obligations stemming from the said Convention. The Forest Act 1992 did not award any export licence for the products prohibited by the Convention. The list of protected wild animals  and forest based 
products banned for exports is as follows: 
Wild Animal 
HS Code Scientific Name English Name 
01.06 Macaca assamensis Assamese monkey 
01.06 Manis pentadactyla Indian pangolin 
01.06 Caprolagus hispidus Hispid hare 
01.06 Canis lupus Wolf 
01.06 Usrus arctos Himalayan  bear 
01.06 Ailurus fulgens Red panda 
01.06 Prionodon pardicolor Spotted linsang 
01.06 Felis bengalensia Leopard cate 
01.06 Felis lynx Lynx 
01.06 Neofelis nebulosa Clouded leopard 
01.06 Panthera tigris Tiger WT/ACC/SPEC/NPL/5 
Page 42  
 
Wild Animal 
HS Code Scientific Name English Name 
01.06 Panthere uncia Snow leopard 
01.06 Elephas maximus Asiatic elephant 
01.06 Rhiniceros unicornis Rhinoceros 
01.06 Sus salvanius Pygmi hog 
01.06 Moschus moschiferos Musk deer 
01.06 Cervus duvauceli Swamp deer 
01.06 Bos gaurus Gaur 
01.06 Bos grunniens Wild yak 
01.06 Bubalus bubalis  Wild buffalo 
01.06 Ovis ammon Great Tibetan sheep 
01.06 Pantholops hodgsoni Tibetan antelope 
01.06 Antilope cervicapra Black buck 
01.06 Tetraceros quadricornis For horned antelope 
01.06 Hyaena hyaena Striped hynae 
01.06 Platanista gangetica Gangetic dolphin 
 
HS Code Forest Based Products, Restricted for Exports 
12.11 Cordyceps sinensis 
12.11 Orchis incanata  
12.11 Nardostachys grandiflora 
12.11 Rauwolfia serpentine 
12.11 Cinnamum glaucescens 
12.11 Valeriana jatamansi 
12.11 Lichen spp 
12.11 Rock exudete (Silazit) 
12.11 Abis spectabilis 
12.11 Taxus baccata 
12.11 Michelia chanpaca 
12.11 Acacia ctechu 
12.11 Shorea robusta 
 
74. With reference to the export of handicrafts, the representative of Nepal said that there 
were no fixed valuation prices for handicrafts, or an export minimum price list. The exporter 
submits its export prices to the Handicrafts Association, who evaluates the proposed prices on the basis of certain criteria, to recommend the exporter an export price. Criteria used by the Handicrafts Association were: Measurement - height and weight;  Cost of materials incorporated: domestic and from third country;  Cost of labour incorporated in the products; 
and the Quality of the product. The Handicrafts Association is a private entity, with no 
Governmental intervention. It evaluates export prices as a service to producers to avoid them under-pricing their products for export. For the export of handicrafts made from the parts of domestic animals, the exporters must present the exporters declaration form, the invoice and a 
sample of the goods to be exported to the Handicrafts Association.  The Association issues a No 
Objection Letter if they are made from parts of domestic animals.  The service fee charged by  WT/ACC/SPEC/NPL/5 
 Page 43 
 
 
the Association for this purpose is:  NRs 50 for FOB value less than NRs 10,000; and NRs 100 
for FOB value NRs 10,000 and above.  The Association reviews the price according to the 
criteria described above, and if it is approved the certificate is issued. In the case of 
archaeological goods the exporter has to produce the approval certificate from the Department of Archaeology. The service fee charged by the Handicrafts Association is 0.5 per cent of f.o.b. price of exported goods.  
75. The representative of Nepal said that as stated in the Legislative Action Plan circulated 
in document WT/ACC/NPL/10/Rev.1 reproduced in Annex III of this Report, the Export Import (Control) Act 1957 (Amendment) and the Export Import (Control) Regulations 1978 (Amendments) would be amended. Amendments to bring any export licensing requirements or other export control requirements into conformity with WTO provisions including those 
contained in Articles XI, XVII, XX and XXI of the GATT 1994, had already been prepared,  or 
would be prepared by the Department of Commerce in August 2003, and would be submitted by the Ministry of Industry, Commerce and Supplies to the Council of Ministers in September and October 2003, respectively. Endorsement and adoption by the Council of Ministers of the 
amendments to the Act and the Regulations would be approved by 31 December 2003. The 
Working Party took note of these commitments.  
Export financing, subsidy and promotion policies
 
76. The representative of Nepal said that in order to provide a macro-environment 
conducive for export promotion, the Government had formulated trade policy, export policy, 
foreign exchange policy and domestic trade policy. A Commercial Council with majority participation of the private sector had been formed to coordinate activities of all agencies involved in the export activities. Foreign exchange for the purpose of current account transactions of the balance of payments had been made convertible. Income from exports had 
been exempted for income tax purposes. The duty drawback system for the import of raw 
materials for exportable commodities had been made more effective. Other export promotion activities such as participation on international trade fairs, product development, product diversification and quality improvement of exportable commodities have been encouraged. The 
Government had undertaken or planned  to undertake export promotion activities for the 
following commodities: Agricultural Commodities such as lentils, Niger seeds, tea and coffee, ginger, cardamom, vegetable seeds, flower, silk and silk products, medicinal herbs, fruits etc.; Industrial Goods such as woollen carpets, readymade garments, leather and leather products, cotton products, woollen sweaters, woollen mufflers etc.; Traditional Handicraft Products etc.; 
Products of Cottage and Small Industries  and Other Products such as computer software.  The WT/ACC/SPEC/NPL/5 
Page 44  
 
Trade Promotion Centre, established in 1971, had been working as the Secretariat of the Nepal 
Trade Promotion Board, constituted under an order of the Development Board Act 2013. The 
primary objective of the Centre was to promote Nepal's export trade in particular and foreign 
trade in general. In 1995 amendments were made to the Nepal Trade Promotion Board (Organization Order) and the scope of the activities of the Centre was extended to import management. The Board was chaired by the Secretary of the Ministry of Industry, Commerce 
and Supplies and included representation of the Ministries of Industry, Commerce and 
Supplies, Finance, business associations and communities.  
Internal Policy Affecting Foreign Trade in Goods
 
Industrial policy, including subsidy policies  
77. The representative of Nepal said that Nepal did not provide direct payment of incentives 
to any industry. There were certain exemptions in terms of income tax, sales tax, excise duty 
and customs duties to the industries qualifying under the conditions stated in Industrial Enterprise Act 1992. The purpose of the incentives was to ensure balanced industrial development both regionally and sector-wise. Nepal had not  compiled data on the revenue 
exempted by such incentives and on the identification of recipients.  The following provisions 
governed the incentives provided:  
(a) cottage industries are exempted from sales tax, excise duty and income tax; 
(b) income tax in excess of  twenty per cent is not levied on the income derived from 
any industries except industries utilizing tobacco as their basic raw material, and alcohol or beer producing industries; 
(c) except for industries utilizing tobacco as their basic raw material, alcohol or 
beer producing industries and saw-mill and catechu industries, any industry using 80 or more than 80 per cent of indigenous raw material in its products and supplying all its manpower from among Nepalese citizens are entitled to obtain a rebate at the rate of 10 per cent of the income tax; 
(d) any national priority industry which constructs and operates road, bridge, 
tunnel, rope way, flying bridge, and manufactures and operates trolley buses and trams are entitled to a rebate of 50 per cent of the income tax on their income for ten years from the date of operation. Other national priority industries such as agro and forest-based industries, engineering industry 
(producing agricultural and industrial machinery), industry manufacturing fuel 
saving or pollution control devices, solid waste processing industry, hospital and nursing home (only outside the Kathmandu valley), industries producing ayurvedic, homeopathic and other traditional medicine, industries producing crutch, seat belt, wheel chair stretcher and stick and so on to be used in aid of the disabled and orthopaedic, cold storage installed for the storage of fruits and 
vegetables, are entitled to get a rebate of 50 per cent of the income tax on their 
income for seven years from the date of operation; 
(e) any industries except industries utilizing tobacco as their basic raw material, 
and alcohol or beer producing industries established in remote, undeveloped and  WT/ACC/SPEC/NPL/5 
 Page 45 
 
 
underdeveloped areas are entitled to get a rebate of 30, 25, and 20 per cent of the income tax respectively and 35, 25 and 15 per cent of the excise duty respectively for a period of ten years from the date of operation; 
(f) Fruit-based fruit processing and cider and wine industries with fixed assets up to 
NRs2.5 million, established in particular areas, are entitled to an excise duty and 
sales tax exemption for a period of ten years, and fruit based alcohol are entitled 
to excise duty and sales tax exemption for a period of five years. Such exemption could be extended for additional period of three years; 
(g) if an industry diversifies itself through reinvestment, in the same or any other 
industry, and expands its installed capacity by 25 per cent or more, modernizes 
its technology or develops ancillary industries, it is entitled to a deduction of 40 
per cent of new additional fixed assets from its taxable income; 
(h) any industry investing in process or equipment, which has the objective of 
controlling pollution or which may have a minimum effect on the environment is entitled to reductions of up to 50 per cent from the taxable income for such 
investment; 
(i) any industry is entitled to deduct 10 per cent of the gross profit from the taxable 
income on account of expenses related to technology, product development and efficiency improvement; 
(j) no income tax is imposed on dividends earned out of the investment made in any 
industry; 
(k) up to 5 per cent of gross income spent for the advertisement of the products or 
promotion services, hospitality and any other similar expenses is allowed to be deducted while assessing the taxable income; 
(l) If an industry provides direct employment to 600 hundred or more than 600 
hundred Nepalese citizens round the year, an additional income tax rebate at the 
rate of 10 per cent for that year is granted in addition to other facilities; 
(m) If any industry utilizes locally available raw materials, chemicals and packing 
materials etc. on which excise duty or sales tax or both are already imposed, the excise duty, sales tax or both shall be reimbursed to the industry utilizing such raw materials, chemicals and packing materials; 
(n) No income tax is levied on the profits earned through export; 
(o) An industry is entitled, for the purpose of the income tax, to deduct the amount 
of expenses incurred by it for the long-term benefit provided its workers and employees including housing, life insurance, health facilities, education and training.  
(p) Subsidies in seeds, plants, irrigation pipes and pumping were provided by the 
respective line agencies. These subsidies, though small in quantity, were 
provided directly to the producer-farmers who use these products as inputs. Only farmers were eligible for these subsidies. 
78. Some Members of the Working Party said that they considered that the  rebate of 10 per 
cent of the income tax for industries using eighty per cent or more local raw materials in their output and employing only Nepalese citizens was a prohibited subsidy under Article 3 of the 
Subsidies Agreement.  In their view this subsidy should be eliminated and notified under Article 
25. The representative of Nepal said that as a least developed country, Nepal should benefit from the special and differential treatment provided in Article 27 of the Agreement on Subsidies.  WT/ACC/SPEC/NPL/5 
Page 46  
 
79. The representative of Nepal confirmed that Nepal would administer any subsidy 
programmes in full conformity with the Agreement on Subsidies and Countervailing Measures.   
All necessary information on such programmes would be notified to the Committee on Subsidies 
and Countervailing Measures in accordance with Article 25 of the Agreement and in accordance with the Legislative Action Plan reproduced in Annex III of this Report.   
80. The representative of Nepal said that as stated in the Legislative Action Plan reproduced 
in Annex III of this Report, the Industrial Enterprises Act, 1992 (Amendment), the Industrial 
Enterprises Regulations and the Industrial Policy 1992 (Amendment) would be amended to bring them into conformity with the WTO Agreements on Subsidies and Countervailing Measures and on Trade Related Investment Measures. Amendments had already been prepared,  or would be prepared by the Department of Industry in June and August 2003 and 
March 2004. These amendments would be submitted by the Ministry of Industry, Commerce 
and Supplies to the Council of Ministers in December 2003 and May 2004, respectively. Endorsement and adoption by the Council of Ministers of the amendments to the Acts and the Regulations would be approved in February and May 2004. The Working Party took note of 
these commitments.  
Technical Regulations and Standards
 
81. The representative of Nepal submitted the Check List of Illustrative TBT Issues 
circulated in document WT/ACC/NPL/5 and the following laws, "Nepal Standards 
(Certification Mark) Act, 1980" and "Standard Weights and Measures Act, 1968". These laws 
set a transparent system with the intervention of laboratories to carry out tests, provision for judicial review and compliance with the most favoured nation and national treatment obligations.  He said that the authority to determine standards in relation to any goods, process or services was the Nepal Council of Standards (NCS). The Council was a government body 
chaired by Minister for Industry, Commerce and Supplies and the members include, among 
others, the president of Federation of Nepalese Chambers of Commerce, and representatives from Tribhuvan University. A Technical Committee under the NCS sets standards based on internationally defined parameters, national data and national requirements, among others. 
The participation in the  Technical Committee was opened to all interested national or foreign 
persons/institutions. The decisions of the Committee were circulated to concerned parties to provide comments within 30 days. After the completion of the process of collecting responses and adapting them, the standards were published in the Nepal Gazette, notified and  implemented. Once standards were set, the government may make them mandatory technical 
regulations upon the recommendation of the ministry concerned e.g. Ministry of Agriculture,  WT/ACC/SPEC/NPL/5 
 Page 47 
 
 
Ministry of Health, Ministry of Environment, and the consumers association. There was a very 
limited number of technical regulations that applied basically to raw wool, cement, iron bars, 
mineral water, and LPG cylinders. In the case of wool, it was necessary to guarantee the quality 
of Nepalese carpet exports; in other cases the considerations related to consumer safety. The importation of plant and plant products had to meet the standards laid down by the Division of the Plant Protection of the Department of Agriculture. The Division examined samples of the 
non-food item before a permit is issued by the customs for import.  Nepal was a Corresponding 
Member of ISO and followed the standards prescribed by ISO.  National standards are based on ISO standards, standards of the British Standard Institute, of the International Electrical Committee, on the Indian Standards, and if required on CODEX and ESTM Standards. 
82. The representative of Nepal said that currently technical regulations applied only to 
iron bar, cement, mineral water, wool, and LPG cylinders. With regard to standards, 577 
product and testing methods had been approved to date. Anther 200 were in the process of drafting. The number of formulated National Standards by field is presented below: 
Standards  
Formulated National Standards  
Field Formulated National Standards 
Mechanical Engineering 41 
Basic Chemicals 62 
Non-metallic 91 
Ores and Metal 22 
Information 1 
Agriculture and Foods 185 
Building and Construction 49 
Hygiene 1 
Basic Subjects 28 
Environment 15 
Packing 10 
Electro-technology 20 
Others 49 
Total 577 
 WT/ACC/SPEC/NPL/5 
Page 48  
 
83. The representative of Nepal said that the following was the technical regulation on raw 
wool: 
Mean fibre length (barbe) not less than 100 mm (4 inches) 
Fibre diameter not more than 39 micron 
V.M. content not more than 0.5 per cent 
Grease content for DCM extraction nor more than per cent for ethanol extraction not more than 
1.9 per cent 
Y-Z value not more than 4.5 per cent 
Y value not less than 50 
Modulation not more than 20 per cent 
 
It was compulsory for the importers to produce a Test Certificate of the imported raw wool to 
the Board before the consignment enters into the territory of the country. The Board was also 
empowered to check the quality of the imported raw wool in its own laboratory or any other 
designated laboratory. 
84.  With reference to the quality certification system, the representative of Nepal said that 
the National Certification Mark (NCM) currently in use consists of the authorization granted by the NBSM, upon request to any company producing goods for which technical regulations and 
standards exist in Nepal, to use a distinctive sign in their products which means that the product 
complies with the required regulations or standards. In order to grant authorization to use the distinctive mark in any product, the NBSM conducts inspections, testing, and sets other requirements such as to have in-house laboratories, necessary skill manpower and quality 
manuals, that the producer has to fulfil in order to receive the authorization. After 
authorization has been given,  the NBSM undertakes frequent inspections and testing in the industries and in the market. To date quality certification marks have been approved for 78 companies, covering 30 products. The products and number of companies that have received approval are listed below: 
Certification Chart 
No. of Quality Certification Mark issued 
for products  
Name of Product No. of Industries 
High Density Polythene Pipe 12 
Biscuits   2 
Ordinary Portland Cement   3 
Mineral Water   3 
Writing and Printing Paper   2 
Toothpaste   1 
Bitumen Emulsion   1 
GI Wire   3 
Deformed Steel Bar and Wires for Concrete 
Reinforcement 13  WT/ACC/SPEC/NPL/5 
 Page 49 
 
 
Certification Chart 
No. of Quality Certification Mark issued 
for products  
Name of Product No. of Industries 
Paints 5 Types   2 
Gun Metal Gate Valve   1 
Soybean Oil and Vegetable Ghee – 2 types   8 
Galvanized Mild Steel Pipe for Water Supply    3 
PVC Cable   6 
Instant Noodles   3 
Hand Made Woollen Carpet   2 
PVC Pipe for Drinking Water Supply   3 
Dry Cell Battery   2 
Beer   4 
LPG Cylinder   1 
Polythene Water Storage Tank   1 
Textile   1 
Tiles 1 
Total 78 
 
85. The representative of Nepal recognized that amendments would have to be made  to the 
standards regime including the Nepal Standards (Certification Mark) Act 1980 and the Regulations 1982 (Amendment) to bring them into full compliance with the WTO Agreement on 
Technical Barriers to Trade. As a first step, in June 2003 the Ministry of Industry, Commerce 
and Supplies would establish an enquiry point.  A timetable for the enactment of legislation that implements the WTO Agreement on Technical Barriers to Trade in Nepal's legal regime was provided in the Legislative Action Plan circulated in document WT/ACC/NPL/10/Rev. 1 and in the action plan circulated in document WT/ACC/NPL/13 which are reproduced in Annexes III 
and V of this Report, respectively.  Amendments would be prepared in June 2004 and 
September 2005 and would be submitted to the Council of Ministers.  These amendments would be endorsed and adopted by the Council of Ministers by 31 January and 31 December 2005. Having regard to the action plan, Nepal would implement fully the provisions of the Agreement 
on Technical Barriers to Trade, including compliance with the Code of Good Practice, by 31 
December 2006. The Working Party took note of these commitments.  
Sanitary and Phitosanitary Measures
 
86. The representative of Nepal said that the export and import of plant and plant materials 
such as seeds, saplings, and seedlings was subject to phytosanitary measures at the border 
checkpoints and at the Tribhuvan International Airport, Kathmandu in accordance with the 
Plant Quarantine Act 1972 and Plant Quarantine Rules 1975. These products were examined for the possible presence of any obnoxious or restricted pathogens, biotic agents, and weed seeds on the basis of the items listed in the act and rules which are periodically updated following the WT/ACC/SPEC/NPL/5 
Page 50  
 
recommendations of the Regional and International Plant Quarantine conventions and the 
findings of national surveys and surveillance. Check posts were under the jurisdiction of a 
central level Plant Quarantine Section of the Plant Protection Division in the Department of 
Agriculture. The Contagious or Infectious Disease Act, 1963 authorized the government to intercept any person, animal, animal products, and feeds suspected of carrying an infectious disease or agent at entry points. Such a person and animal may be hospitalized or isolated for 
"examination and control" as per the act. Animal quarantine check posts located at the border 
areas, were coordinated and administered by the central level. A separate act governing the Animal Quarantine and Veterinary services was in the process of enactment.  Minimum standards or specifications had been fixed for certain categories of agricultural products (food products—processed and unprocessed) and animal feeds under the Food Act, 2023 (1967) and 
Food Rules, 2027 (1970) and the Animal Concentrates Act, 1976. The export and import of such 
products must comply with the fixed standards. The responsibility to implement these laws lies with the Central and Regional Food Laboratories in association with the local administration. The Pesticides Act, 1991, and Pesticides Rules, 1994 regulate the export and import of pesticides 
with a view to protect the environment and ensure sanitary measures. These acts and rules 
authorize the Ministry of Agriculture to ban and/or restrict any public pesticides that are potentially hazardous to health. With respect to  Drug Policy and Regulatory Service,  the Department of Drug Administration had the responsibility of implementing the Drug Act, 2035 
(1978) and the Drug Rules, 2038 and 2040.  The department with the aid of various regulations 
has been implementing the provisions of the act.  In accordance with the objectives of the "Health for all" and to improve and manage coordination among the governmental, non-governmental and private organizations involved in the activities related to drug production, import, export, storage, supply, sales, distribution, quality assessment, regulatory control, 
rational use, and information flow, the National Drug Policy 1995 had been implemented.  It 
puts  emphasis on the maintenance, safeguarding and promotion of the health of people by making the country self-reliant in drug production; ensuring the availability of sale of effective, standard, and quality drugs at affordable price in quantities sufficient to cover the needs of  the 
country, and to cover effectively all the drug-related activities including production, import, 
export, storage, safety, supply and distribution. Medicines imported into the country should comply with the standards laid down by the Ministry of Health. 
87. In response to questions, the representative of Nepal submitted the Check List of 
Illustrative SPS Issues (WT/ACC/NPL/6). With reference to the Plant Protection Act 1972 and 
the Plant Protection Regulations 1975, he said that the Act and Regulations cover the essential  WT/ACC/SPEC/NPL/5 
 Page 51 
 
 
legal framework to address all the requirements of enforcing phytosanitary measures for 
import and export of agricultural commodities 
88. At the request of Members of the Working Party, the representative of Nepal provided 
the Pesticides Act, 1991, and Pesticides Rules, 1994.He said that considering the shared responsibility between the exporting and importing country in protecting  health and the environment from harmful effects of listed pesticide and industrial hazardous chemicals, in 
accordance with the prior informed consent procedures (PIC), Nepal bans all the PIC listed 
pesticides and chemicals (22 pesticides and 25 industrial chemicals) except Methyl Parathion and Monocrotophos because there were no alternatives for these products. The importation of these products was under active review. Nepal had participated in the Plenipotentiary Conference in Rotterdam (September 1998) for signing the PIC Convention. 
PIC List – Pesticides and Industrial Chemicals
 
 
Pesticides Industrial Chemicals 
2,4,5, - T Crocidolite 
Aldrin Polybrominated biphenyl (PBB) 
Captafol Polychlorinated biphenyl )PCB) 
Chloroenzilate Polychlorinated trephines (PCT) 
Chlordane Trist (2, 3 dibromopropy1) phosphate 
Chlordimeform 
DDT 
Dieldrin 
Dinsoeb 
1, 2 – dibromoethane (EDB) 
Fluoroacetamide 
HCH 
Heptachlor 
Hexachlorobenzone 
Lindane 
Mercury compounds 
Pentachlorophenol 
Certain formulations of metlamidophos 
Methyl-parathion 
Pesticides 
Monocrotophos 
Parathion 
Phosphamidon 
 
89. With reference to international organizations, the representative of Nepal said that 
Nepal adheres to the International Plant Protection Convention (IPPC) executed and administered by FAO. Nepal was a member of the Asia Pacific Plant Protection Commission (APPPC). Nepal had adhered to the FAO "Plant Protection Agreement for the Asia and Pacific 
Region" on 5 August 1965. APPPC was a regional organisation adhering to IPPC charters for WT/ACC/SPEC/NPL/5 
Page 52  
 
harmonizing the implementation of phytosanitary measures. Through APPPC, Nepal was 
trying to streamline and scientifically build land border quarantine procedures considering it is 
geographically landlocked. The Animal Health and Livestock Service Act 1998, Slaughter 
House and Meat Inspection Act 1998 and the Veterinary Council Act 1998 has been recently passed. Nepal was a member of the OIE ; Codex Alimentarius  and Asia Pacific Plant Protection Commission.  He stressed that Nepal was fully committed to adopt all the sanitary measures in 
relation to equity, transparency, harmonization, adoption of regional conditions, risk 
assessment, and control inspection and approval procedures, and also for the administration and implementation with all the WTO member countries. Even though there were constraints in terms of technical expertise and resources to fulfill these commitments, Nepal would give priority to the strengthening of the animal quarantine service in the country to make sanitary 
measures consistent with WTO obligations. 
90.  In response to questions concerning the National Drug Policy, the representative of 
Nepal said that the measures the Department of Drug Administration (DDA) had taken to achieve self-sufficiency in drug production were as follows: provide technical inputs in drug 
production and quality assurance; lower custom duties on the importation of raw materials, 
machinery and analytical instruments at one per cent of the invoice value; lowered the income tax for five years; and provided foreign currency needed for purchasing raw materials and machinery. There were some 25 pharmaceutical companies producing about 20 per cent of the 
national demand for drugs. For the purpose of protecting health, the administration had 
formulated an implemented different regulations with respect to importation, exportation, supply and distribution of  pharmaceutical products in Nepal. The enforcement of industrial property rights in respect of pharmaceuticals was the responsibility of the Department of Industry (DOI) and of the Nepalese Courts. 
91. The representative of Nepal recognized that amendments would have to be made  to the 
sanitary and phytosanitary regime including the Plant Protection Act 1972 (Amendment), the Plant Protection Regulation 1975 (Amendment), the Instrument of Acceptance of the International Plant Protection Convention, the Seed Act 1998 (First Amendment) . the 
Pharmaceutical Act 1978 (Amendment)   and to other legal texts to bring them into full 
compliance with the WTO Agreement on Sanitary and Phyto-Sanitary Measures. As a first step, in June 2003 the Ministry of Industry, Commerce and Supplies would establish an enquiry point. A timetable for the enactment of legislation that implements the WTO Agreement on Sanitary and Phyto-Sanitary Measures in Nepal's legal regime was provided in the Legislative 
Action Plan circulated in document WT/ACC/NPL/10/ Rev.1  and in the action plan circulated 
in document WT/ACC/NPL/12, reproduced in Annexes III and VI, of this Report, respectively.   WT/ACC/SPEC/NPL/5 
 Page 53 
 
 
Amendments prepared and approved during the period 2004-2005 would be submitted to the 
Council of Ministers.  These amendments would be endorsed and adopted by the Council of 
Ministers  in August 2004, April 2005 and December 2005. Having regard to the action plan, 
Nepal would implement fully the provisions of the Agreement on Sanitary and Phyto-Sanitary Measures, by 31 December 2006. The Working Party took note of these commitments.  
Trade-Related Investment Measures (TRIMs)
 
92. The representative of Nepal recognized that amendments would have to be made  to the 
trade related investments measures regime including the Foreign Investment and One Window Policy, 1992 (Amendments), Industrial Policy, 1992 (Amendment), Industrial Enterprises Regulations, Industrial Enterprises Act 1992 (Amendment), Foreign Investment and Technology Transfer Regulations and the Foreign Investment and Technology Transfer Act 
1992 (Amendment) to bring them into full compliance with the WTO Agreement on Trade 
Related Investment Measures. A timetable for the enactment of legislation that implements the WTO Agreement on Trade Related Investment Measures in Nepal's legal regime was provided in the Legislative Action Plan circulated in document WT/ACC/NPL/10/ Rev.1  reproduced in 
Annex III of this Report.  Policies would be prepared by the Department of Industry by August 
2003 and adopted by the Ministry of Industry, Commerce and Supplies by September 2003. Draft bills and regulations prepared in 2003-2004 by the Department of Industry would be submitted by the Ministry of Industry, Commerce and Supplies to the Council of Ministers in 
2003-2004. The expected approval dates would be May 2004. The Working Party took note of 
these commitments.  
State trading 
 
93. The representative of Nepal said that the State-owned enterprises in Nepal were 
independent entities under the general supervision of the concerned ministries. They had been 
established essentially with the objective of ensuring adequate supply of raw materials and 
essential goods. These enterprises operated on commercial considerations and provide equal opportunities for all suppliers as prescribed in GATT 1994 Article XVII and in the Understanding on the Interpretation of Article XVII of GATT 1994. The government had made 
statutory provisions for transparency and cost-consciousness in the operations of these 
enterprises. For example, they were obliged to call for at least three quotations for procurement and adopt competitive bidding for any contract. The information concerning the following State owned enterprises should not in any way be interpreted as considering them State-trading enterprises with exclusive rights or privileges:  WT/ACC/SPEC/NPL/5 
Page 54  
 
- Nepal Food Corporation mainly procures food grains to stabilize prices and 
supply of food grains in deficit area.  
- National Trading Limited imports essential goods such as cement, sugar, clothes, 
and iron rods with a view to stabilize price. 
- Nepal Oil Corporation imports aviation fuel, furnace oil, LP gas, diesel and 
kerosene. Only the Nepal Oil Corporation enjoyed exclusive rights to import 
petroleum products excluding lubricants.  
- Salt Trading Corporation imports salt and sugar. (Government share is offered 
for sale.)  
- Agricultural Input Corporation imports fertilizers and agricultural inputs 
essential to farmers. Now the Government has published a new policy, which 
opens the door to the private sector to import fertilizer and agricultural inputs essential to farmers.   
- Cottage & Handicraft Emporium imports handloom and knitting machinery 
and cotton and synthetic yarns for cottage industries.   
- Nepal Coal Company imports coal for manufacturing firms. (underway to 
liquidation) 
- Nepal Transit and Warehouse Company functions as an autonomous body 
responsible for clearing and forwarding cargo. 
94.  The representative of Nepal confirmed that Nepal would notify and provide 
information on the activities of Nepal Oil Corporation [ and Salt Trading Corporation ] and would apply its laws and regulations governing the trading activities of State-owned enterprises and other enterprises with special or exclusive privileges and would otherwise act in full 
conformity with the provisions of the WTO Agreements, in particular Article XVII of the 
GATT 1994 and the Understanding on that Article; and Article VIII of the GATS.  The Working Party took note of these commitments. 
Free zones, special economic areas
 
95. The representative of Nepal said  currently there were no free zones in Nepal.  As a 
WTO Member Nepal would fulfil  the relevant obligations established in the WTO Agreements.  
Government Procurement  
96. The representative of Nepal said that in the fiscal year 1997/98 Government 
procurement had been NRs 16.2 billion (US$238 million). The rules on Government 
procurement the require publication of tender notices in national dailies at least twice for 
procurements amounting more than NRs1 million. In case of global tender, tender notice is circulated to the foreign diplomatic missions situated in Nepal.  There was no offset policy. The procurement of certain products was not reserved for local industry but priority was given to 
Nepalese products if the price difference with foreign products was not above 7.5 per cent.  WT/ACC/SPEC/NPL/5 
 Page 55 
 
 
97. In response to questions concerning participation in the Agreement on Government 
Procurement, the representative of Nepal said that, at the moment, Nepal did not intend to take 
part in Plurilateral Trade Agreements such as the Agreement on Government Procurement. 
However, consideration would be given to the possibility and ability to seek observer status.  
Agricultural policies  
98. The representative of Nepal said that agriculture was the dominant sector of the 
Nepalese economy contributing more than 40 per cent to GDP . This was basically a private 
sector activity in which the government played a supportive and facilitating role to enhance agricultural production and productivity. Nepal imports significant quantities of high value agricultural products such as fruits, vegetables, livestock, and processed products mainly from India. The import of grains, however, is made only during drought years. Nepal's major export 
items comprise basic agricultural products such as maize, mustard, ghee, ginger, pulses (lentil 
and gram), broom grass, live animals, wheat flour, oil cake, jute, fresh vegetables and vegetable seeds, orthodox tea, niger seeds, hide and skin, rice bran, vegetable oil, spi ces, cardamom, and 
fruits. The total value of agricultural production was approximately NRs349,064 million. The 
total value of import of agricultural commodities was  NRs6,330.3 million in the fiscal year 
1996/1997. Nepal was a net food-importing country. In the fiscal year 1997/98, Nepal had allocated NRs. 600 million (US$10 million approx.) for subsidy on the import and transport of chemical fertilizers and US$12.7 thousand have been allocated to subsidize for soil tests to be 
carried out on the request of farmers to establish the best crop for their plant of land. 
Information concerning domestic support and export subsidies in the agriculture sector was circulated in document WT/ACC/SPEC/NPL/1 and 2. There were no specific incentives for the export of agricultural commodities. The government facilitates exports by providing market information and easy access to foreign exchange as a general policy. For this purpose, the 
government provides to exporters technical facilities to open foreign currency accounts out of 
the income generated from exports. Restrictions on import and export of agricultural products were as follows. WT/ACC/SPEC/NPL/5 
Page 56  
 
Restriction on import of agricultural products
 
Items Reason 
Citrus sapling/ plants To prevent citrus decline syndrome as per PQ Act 1972 
Bread fruit plants To prevent citrus canker disease as per PQ Act 1972 
Potato tuber from Indian wart-affected areas To prevent wart disease as per PQ Act 1972 
Lathyrus sativus Because of high c ontent of BOAA (B-N-Oxalyl/Amino-L-
Alanine) responsible for causing  Lathyrosis diseases (published 
in Nepal Gazette ,1992) 
BVO containing drinks  For health reason (Food Act, 1967) 
DDT, Methyl parathion For reasons of health and environment protection (Public 
Enterprises Act, 1991) 
Beef For religious reasons 
 
Agricultural Products Restricted for Export  
Item Reason 
Raw wool For protecting local wool processing establishments 
Seeds Export and import of only notified seeds as per the Seed Act, 1988 to 
maintain seed quality 
 
99. Some Members of the Working Party requested that Nepal examine whether the 
restriction on the export of raw wool could be justified under Article XI:2(a) of GATT 1994.  
Policies Affecting Foreign Trade in Other Sectors  
100. The representative of Nepal said that the Tea and Coffee Promotion Board, and the 
Dairy Promotion Board, which were composed of representatives of the public and private 
sectors, had the  basic function to propose policies for the development of these activities in Nepal and to conduct product-related research. Budget allocations were to finance the activities of the Boards. No direct support is given to the farmers.  Nepal was undertaking a Seeds 
Sectors Project, which aims to improve seed quality. The activities defined under this project 
are carried out by the Seeds Committee composed of representatives of the public and private sectors. Budget allocations were to finance the activities, mainly seed research and improvements of the Seeds Committee. There was no direct support to the farmers. The principal function of the Carpet and Wool Development Board was to make the necessary 
arrangements for the development of production and the quality of carpets in Nepal. The Board 
did not give any kind of financial assistance. 
Textiles Regime
  
101. [The representative of Nepal confirmed that the quantitative restrictions on imports 
maintained by WTO Members on textiles and clothing products originating in Nepal that were  WT/ACC/SPEC/NPL/5 
 Page 57 
 
 
in force on the date prior to the date of accession of Nepal to the WTO should be notified to the 
Textiles Monitoring Body (TMB) by the Members maintaining such restrictions and would be 
applied for the purposes of Article 2 of the Agreement on Textiles and Clothing.  Thus, for the 
purposes of Nepal's accession to the WTO, the phrase "in force on the day before the entry into force of the WTO Agreement" contained in Article 2.1 of the Agreement on Textiles and Clothing shall be deemed to refer to the day prior to the date of accession of Nepal to the WTO.  
To these base levels the increase in growth rates provided for in Article 2.13 and 2.14 of the 
Agreement on Textiles and Clothing shall be applied, as appropriate, in the Agreement on Textiles and Clothing from the date of Nepal's accession.] 
Trade-Related Intellectual Property Rights  (TRIPS)
 
General  
 Industrial Property Protection 
 
 
102. The representative of Nepal said that the policy objective in the area of intellectual 
property was to provide effective and adequate protection to all categories of intellectual 
property in conformity with the provisions of the Agreement on Trade-Related Aspects of 
Intellectual Property Rights. Detailed information concerning the Check List of Issues for the Implementation of the TRIPS Agreement had been circulated in document WT/ACC/NPL/7. Intellectual property protection was provided by the Patent, Trademark and Industrial Design Act,1965. Nepal was preparing the new Industrial Property (Protection) Act, which would 
incorporate all the substantive provisions of the TRIPS Agreement. It would cover all categories 
of industrial property rights under Sections 2 through 7 of Part II of the Agreement, and would incorporate the basis for an adequate enforcement thereof. For the protection of copyright, Nepal had enacted  the Copyrights Act, 2002  which was consistent with the TRIPS  Agreement.  
Additional information concerning the implementation of the TRIPS Agreement is reproduced 
in the Legislative Action Plan circulated in document WT/ACC/NPL/10/Rev.1 and in the action plan circulated in document WT/ACC/NPL/14, reproduced in Annexes III and VII of this Report, respectively.   
Agencies Responsible for Policy Formulation and Implementation
 
103. The representative of Nepal said that the formulation of industrial property policy and 
necessary regulations was under the purview of the Ministry of Industry, Commerce and Supplies. The implementation and execution of policy and regulations was the responsibility of the Department of Industry (DOI) within the Ministry, as well as the Patent Office. The Nepal WT/ACC/SPEC/NPL/5 
Page 58  
 
National Library was the authorized agency for registering copyrights and hearing complaints.  
The decisions of the registrar could be appealed to the Appellate Court. 
Membership in International Intellectual Property Conventions
 
104. The representative of Nepal said that Nepal had been a member of the World 
Intellectual Property Organization (WIPO) since 4 February 1997 and the Paris Convention since 22 June 2001. Nepal would join the Berne Convention. 
 Application of national and MFN treatment to foreign nationals
 
105.   The representative of Nepal said that national and MFN treatment was granted to all 
foreign nationals.  National and foreign citizens had to register the brand, trademarks, patent and art with the responsible agency.  
Fee and taxes
 
106. The representative of Nepal said that there were no taxes on intellectual property. Fees 
were nominal but  foreigners had to pay double the rates indicated below, except for penalty charges, in convertible foreign currency.  
Registration and Renewal Fees 
 
S. No. Particulars of Fees Patent 
(NRs.) Design (NRs.) Trademark 
(NRs.) 
1. Application 1,000 500 500
2. Application Amendment 200 200 200
3. Registration 5,000 2,000 1,500
4. Transfer of Ownership 2,500 1,000 750
5. Endorsement and Recording other than Transfer 
of Ownership 1,000 500 500
6. Details of Registration 500 500 200
7. Opposition and Case Filing 500 200 200
8. Copy of Registration Certificate 1,000 500 500
9. Renewal (Annual Rate) 
 a.  For the First Term 
 b.  For the Second Term  c.  Perpetual Annual Rate  
2,000 
4,000 
-  
400 
800 
-  
- 
- 
200
  WT/ACC/SPEC/NPL/5 
 Page 59 
 
 
Substantive standards of protection, including pr ocedures for the acquisition and maintenance 
of intellectual property rights  
Copyright protection    
107. The representative of Nepal said that the Copyright Act 2002 had amended the 
Copyright Act 1965 to comply with the provisions of the TRIPS Agreement and the Bern Convention. If Nepal received the necessary technical assistance, a Copyright Information 
Center would be established in December 2004. 
Trademarks, including service marks
 
108. The representative of Nepal said that in accordance with the Legislative Action Plan, in 
2005 the Patent, Design and Trademark Act,1965 amended in 1987, would be replaced by a new Industrial Property (Protection) Law consistent  with the TRIPS Agreement. At present any 
person wishing to have trademark of his business registered should submit to the Department of 
Industry an application according to the specimen form indicated in Schedule I(c)of the Act, along with four copies of such trademark. After completing this process the department would register such trademark in the name of the applicant and then issue a trademark certificate. If 
the trademark filed for the registration was considered to be hurt the prestige of any individual 
or institution, or adversely affect public conduct or morality, or undermine the national interest, or the reputation of the trademark of any other person, or if the  proposed trademark was found to have already been registered in the name of another person,  the registration could 
be denied. Service marks were also subject to the same rule. The act provides for exclusive 
rights for the person who has registered the trademark or service mark. Trademarks and service marks were initially registered for a period of  seven years, and could be renewed for an indefinite number of years after every seven-year interval. 
Geographical indications, including appellations of origin
 
109. The representative of Nepal said that the present legislation did not cover geographical 
indications. In accordance with the action plan on the implementation of the TRIPS Agreement reproduced in Annex VII of this Report, the protection of geographical indications would be considered when drafting the new Act.  
Industrial designs
 
110. The representative of Nepal said that the industrial designs were covered by the Patent, 
Design and Trademark Act, 1965. As indicated in the action plan on the implementation of the  WT/ACC/SPEC/NPL/5 
Page 60  
 
TRIPS Agreement, the Act would be brought into conformity with the provisions of the TRIPS 
Agreement by the Industrial Property (Protection) Act under preparation. Under the present 
legislation, any person wishing to protect the design of any article should submit an application 
to the Department of Industry, which would register the design in the name of applicant and issue a certificate. In case such design hurt the prestige of any individual or institution, or adversely affected public conduct or morality, or undermined the national interest, or in case 
such design had already been registered in the name of any other person, the registration could 
be denied. Industrial designs were originally registered for a period of five years and could be renewed for two more terms at an interval of five years.   
Patents
 
111. The representative of Nepal said that patents designs were covered by the Patent, Design 
and Trademark Act, 1965. As indicated in the action plan on the implementation of the  TRIPS 
Agreement, the Act would be brought into conformity with the provisions of the TRIPS Agreement by the Industrial Property (Protection) Act under preparation. Under the present legislation, any person wishing to obtain exclusive rights over an invention should register a 
patent in the Department of Industry by filling an application. Upon its receipt, the Department 
would conduct investigations or studies to ascertain whether the subject matter mentioned in the application was an invention and thereafter decide whether or not to register a patent. Patents were available for all kinds of products and processes that fulfil the patentability 
requirements without any discrimination as to the technological field or invention. The title of 
the patentee to the patent registered under the Act remained valid for a period of seven years at a time, with a possibility of two renewal periods of seven years. The patent holder had the exclusive right to transfer or licence a patent and to request the third person to stop infringement, and could claim the compensation. The current legislation did not include  
provisions for the protection of prior user rights nor for compulsory licensing.   
Plant variety protection
 
112. The representative of Nepal said that the present legislation did not cover the protection 
of plant varieties. In accordance with the action plan on the implementation of the TRIPS 
Agreement reproduced in Annex  VII of this Report, the protection of plant varieties would be 
included in the new Act.   WT/ACC/SPEC/NPL/5 
 Page 61 
 
 
Layout designs of integrated circuits  
113. The representative of Nepal said that the present legislation did not cover the protection 
of layout designs of integrated circuits. In accordance with the action plan on the 
implementation of the TRIPS Agreement reproduced in Annex  VII of this Report, the protection of layout designs of integrated circuits would be included in the new Act.  
Requirements on undisclosed information,  including trade secrets and test data
 
114. The representative of Nepal said that the present legislation did not cover the protection 
of undisclosed information including trade secretes and test data. In accordance with the action plan on the implementation of the TRIPS Agreement reproduced in Annex  VII of this Report, the protection of undisclosed information including trade secretes and trade data would be included in the new Act. 
Enforcement
 
115.  The representative of Nepal recognized that amendments would have to be made  to the 
enforcement regime concerning intellectual property rights to bring into conformity with the provisions of the TRIPS Agreement  with respect to civil and judicial procedures and remedies, 
provisional measures, administrative procedures and remedies, special border measures, 
criminal procedures, etc. To this effect the Judicial Administration Act 1991, Appellate Court Rules 1972, Short Procedural Act 1972, and the Patent, Trademark and Industrial Design Act 1965 and other legal texts would be modified to bring them into compliance with the WTO 
Agreement on TRIPS, as indicated in the action plan on the implementation of the TRIPS 
Agreement reproduced in Annex VII of this Report.  As a first step, in 2004 the Ministry of Industry, Commerce and Supplies would organize the training of personnel, customs officials, police, judges and lawyers through technical assistance.  
116. The representative of Nepal said that a timetable for the enactment of legislation that 
implements the WTO Agreement on TRIPS in Nepal's legal regime was provided in the 
Legislative Action Plan circulated in document WT/ACC/NPL/10/ Rev.1  and in the action plan circulated in document WT/ACC/NPL/14, reproduced in Annex III and VII, of this Report, respectively.  New legislation or amendments with regard to legal texts such as the Plant 
Resources, the Access to Genetics Resources Act,  and the Industrial Property Protection Act  
prepared during the period 2003-2005 would be submitted to the Council of Ministers.  These amendments would be endorsed and adopted by the Council of Ministers in the period 2003-WT/ACC/SPEC/NPL/5 
Page 62  
 
2005. Nepal would implement fully the provisions of the Agreement on TRIPS by 31 December 
2006. The Working Party took note of these commitments.  
POLICIES AFFECTING TRADE IN SERVICES 
117. The representative of Nepal said that the services sector in Nepal had witnessed 
significant growth over the last two decades. It accounts for 32.3 per cent of GDP and provides employment to almost 18 per cent of the total labour force. During the last decade the average 
service exports of Nepal had represented approximately US$200 million p.a. Nepal was a net 
service exporter. The introduction of open and liberal policies, combined with full convertibility on current account transactions, explains the significant growth of the service sector.  Public services enterprises were available in Nepal in sectors such as business, transport and communications, distribution, educational, environmental, financial, health-related, social, 
tourism and travel related services, and recreational and sporting services. Due to the support 
given by the government to road development, transport services had grown significantly. Recently, the open and liberal policy had helped to transform the financial sector a leading services sector in Nepal. However, there still was a scarcity of statistical data pertaining to the 
nature, type, and size of the existing service sector in the country.  In documents 
WT/ACC/NPL1 and Add.1, the representative of Nepal described the overall market and regulatory structure of the principal service sectors in Nepal and the relevant legal provisions. The legal framework was still under development, and a number of services sectors remained to 
be regulated.  He noted that Nepal's legislation generally complied with the provisions of 
Articles II and XVII of the General Agreement on Trade in Services (GATS) concerning most favoured nation and national treatment, however, exceptions existed with regard to a number of activities under development as described under the services sectoral classification list.  According to the Industrial Enterprises Act, 1992, the manpower required for any industry, 
including all services, shall have to be recruited from among Nepali citizens. Nevertheless, 
foreigners were permitted to work in Nepal on technical grounds, in particular with regard to the transfer of technology. A work permit issued by the Government was required for foreigners to work in Nepal. A foreigner could not be employed for more than 10 years. 
118. The representative of Nepal said that consultancy services such as management, 
accounting, engineering and legal services were not open to foreign investment under the Foreign Investment  and Technology Transfer Act, 1992. The Nepal Bar Council Act 1993 which regulates legal services, prohibits foreigners from practicing law in Nepal except if authorized by the competent  Nepalese Court to plead and represent a party to a case.  The 
Nepal Medical Council Act 1997 was silent over the registration of  a foreign medical  WT/ACC/SPEC/NPL/5 
 Page 63 
 
 
practitioner in Nepal. The Statistics Act 1969 which established the Central Bureau of Statistics 
provides that foreigners must obtain the authorization of the CBS to collect economic records 
and statistics for commercial purposes. The Telecommunications Act 1997 and the 
Telecommunication  Regulation 1997 requires a licence from the Nepal Telecommunications Authority to operate telecommunications services and permits foreign investments in this sector.  Licenses are issued for a maximum period of ten years renewable for up to twenty five 
years. The Foreign Investments and Technology Transfer Act 1992 did not limit foreign equity 
participation in this sector. In accordance with the Nepal Agency Act, 1958 and Agency (Amendment and Consolidation) Rules, 1962 agents, distributors, stockists, nominees or representatives of foreign or local firms must be registered.  Nepalese citizens are given preference for getting registered as agents. With respect to financial services, the Insurance Act 
1992 established an Insurance Board  and required inter alia a licence  to operate an insurance 
business, to set an office in Nepal and  to prove a paid capital of no less than 30 million rupees. With the deregulation of the sector, joint ventures had been initiated and some nine insurance companies were active in Nepal.. Banking and other financial services were regulated by the 
Central Bank Act, 1955, the Commercial Bank Act, 1974, the Finance Companies Act, 1985 and 
other legal instruments. Approval for establishing a commercial bank was granted in the conditions set out in the Commercial Bank Act (Amendment) 1992 were met and on the basis of an economic needs test. Currently, the feasibility study report was the basis for the economic 
needs test. In addition to the State owned banks and banks with limited State participation, 
there were in Nepal some nine private joint venture commercial banks, forty five finance companies and one hundred and thirty financial institutions. Tourism  was one of the most important services sectors in Nepal. The contribution of tourism to GDP was approximately 3.8 per cent and provided 18 per cent of the total foreign exchange. Tourism was regulated by a 
whole set of general rules, laws, and industrial acts such as the Tourism Act, 2035 (1978) 
amended in 2053 (1997), by the Hotel, Lodges, Restaurants, Bar and Tourist Guide Rules, 2038 (1981), the   Travel and Trekking Agency Rules, 2037 (1980), the Trekking and Rafting Rules, 2044 (1985), and by the Mountaineering Rules, 2036 (1979).  As provided by the Foreign 
Investment and Technology Transfer Act, 1992, no permission was granted for the 
establishment of foreign companies, or foreign investment in the Travel Agencies, Trekking Agencies, Water Rafting, Pony Trekking, Horse Riding, and Tourist Lodging. Foreign direct investment was permitted in the hotel industry subject to authorization as provided by FITTA, 1992. In view of the economically underdeveloped status of the country and the dependence of a 
large number of people for their livelihood on these sectors, Nepal called for the understanding 
of WTO Members in the opening of the services sector at this stage.  WT/ACC/SPEC/NPL/5 
Page 64  
 
119. The representative of Nepal said that the authorities' decision affecting trade in services 
were subject to judicial review under the provision of each law governing such a service sector. 
There was also a provision of appeal in such cases under Justice Administration Act, 1991. 
Generally the appeal lies with the Court of Appeal which is an independent judicial body. Under Section 7 of the Foreign Investment and Technology Transfer Act, 1992 there is a provision for dispute settlement through arbitration in respect to disputes that may arise 
between a foreign investor, national investor or a concerning industry. The arbitration award 
may be appealed to the Court of Appeal in accordance with the Arbitration Act, 1999. 
120. The representative of Nepal referred to the Legislative Action Plan circulated in 
document WT/ACC/10/Rev. 1 and reproduced in Annex III of this Report.  He  said that the Ministry of Industry, Commerce and Supplies would establish in June 2003 the enquiry point 
provided in Article III:4 GATS. Amendments to the Labour Act 1991 (Amendment), the 
Company Act 1997 (Amendment),  the Nepal Bar Council Act  1992 (Amendment), the Nepal Chartered Accountants (First Amendment) Act, 2002,  the Insurance Act 1992 (Amendment), the Securities and Exchange Act 1982 (Amendment), the Bank and Finance Institutions Act  
and the Health Institutions Operating  were being prepared by the Ministries of Labour, 
Industry, Commence and Supplies, Finance, Law and Justice and the Central Bank with a view to their submission to the Council of Ministers of Nepal in 2003.  The expected date of approval of these amendments was February 2004 except for the amendments the Health Institutions 
Operating Act which would be endorsed by the Council of Ministers in September 2003. 
[Nepal's revised offer of specific commitments on trade in services was circulated in document 
WT/ACC/SPEC/NPL/4/Rev.2 of 6 May 2003] 
Transparency
 
Publication of information on trade  
121. The representative of Nepal said that all trade measures and laws, regulations, and 
Governmental or Administrative rulings of general application were published in the Nepal Gazette, including Agreements or Treaties in which Nepal is a party. Judgements of the Supreme Courts are also published in the Nepal Law Journal by the Supreme Court of Nepal. 
Laws enter into force on the date of their publication unless another date is specified in the laws.  
Some of the transparency requirements of Article X of GATT 1994 and other WTO Agreements were provided in Section 3 of the Statute of Interpretation Act, 1953, the Division of Work of His Majesty's Government Regulation, 2000, and Nepal Gazette of August 1955. It had been Nepal's practice to publish relevant acts, rules and regulations to give effect to these statutes.   WT/ACC/SPEC/NPL/5 
 Page 65 
 
 
As a Member of the WTO, Nepal would fulfill the transparency requirements established  in 
Article X of GATT 1994 and other WTO Agreements. Nepal confirmed that all laws, 
regulations or measures pertaining to or affecting trade in goods, services or TRIPS would be 
published promptly in the Official Gazette and/or in the notification website of the concerned department or agency, and that no such law, regulation, etc. would become effective or be enforced prior to such publication. The publication of such laws, regulations and other 
measures would include the effective date of these measures and list the products and services 
affected by the particular measure, identified by appropriate tariff line and classification.   
Notifications
 
122. The representative of Nepal said that at the latest upon entry into force of the Protocol 
of Accession and in accordance with the commitments set out in the Legislative Action Plans 
annexed to the Report, Nepal would submit all initial notifications required by any Agreement 
constituting part of the WTO Agreement.  Any regulations subsequently enacted by Nepal which gave effect to the laws enacted to implement any Agreement constituting part of the WTO Agreement would also conform to the requirements of that Agreement. 
Trade Agreements
 
123. The representative of Nepal said that Nepal had signed bilateral trade agreements with 
the following 17 countries. More recently a trade cooperation agreement had been signed with the European Union.  
 Country Year 
1. Republic of Bangladesh 1976 
2. Republic of Bulgaria 1980 
3. People's Republic of China 1981 
4. Czechoslovak Socialist Republic 1992 
5. Arab Republic of Egypt 1975 
6. Republic of India  
 (a) Treaty of Transit 1991 
 (b) Treaty of Trade 1991 
(c) Agreement of Co-operation 1991 
7. Democratic People's Republic of Korea 1970 
8. Republic of Korea 1971 
9. Mongolia 1992 
10. Islamic Republic of Pakistan 1982 
11. Republic of Poland 1992 
12. Republic of Romania 1984 
13. Democratic Socialist Republic of Sri-Lanka 1979 
14. United Kingdom of Great Britain and Northern Ireland 1965 
15. United States of America 1947 
16. Union of Soviet Socialist Republics 1970 
17. Socialist Federal Republic of Yugoslavia 1965 WT/ACC/SPEC/NPL/5 
Page 66  
 
 
He said that these agreements provided most-favoured-nation treatment.. They basically relate 
to trade in goods. As a landlocked country Nepal was interested in maintaining good 
neighbourliness on a developed contractual basis for transit and trade relations with India. Nepal considers that the treaties of transit and trade as well as the agreement of cooperation to control unauthorised trade signed in 1991 (as amended) provide a good basis for the 
development and diversification of trade. The two countries had signed these treaties with the 
aim of promoting trade, facilitating transit and controlling unauthorised trade. They accord each other unconditional most-favoured-nation treatment. They also exempt imports of primary products from duties or any form of quantitative restrictions on a reciprocal basis in the context of their border trade. These products are the typical and traditional raw materials produced 
usually for the traditional neighbouring market destinations in each others' border area. The 
treaty of trade also provides that India grants specially favourable (preferential) treatment to industrial products manufactured in Nepal on the basis of non-reciprocity in order to promote the industrial development of Nepal. Nepal was a member of the South Asian Preferential Trade 
Arrangements (SAPTA). SAARC had decided to move from SAPTA to SAFTA (South Asian 
Free Trade Area).  
124. The representative of Nepal confirmed that Nepal would observe the provisions of the 
WTO Agreement including Article XXIV of the GATT 1994 and Article V of the GATS  The 
Working Party took note of these commitments. 
Technical Assistance
 
125. The representative of Nepal said that as a least developed country with limited 
resources, infrastructure and institutional and technical capabilities, Nepal would face serious difficulties to implement the WTO Agreements expeditiously by its own means.  In the 
Legislative Action Plan and in the various action plans reproduced in Annexes III-VII, Nepal 
had identified the basic needs concerning technical assistance. In the view of Nepal it was of the utmost importance, that individual WTO Members, bilateral donors, international agencies and the WTO Secretariat coordinate a response to the technical assistance requested as soon as 
possible. He noted that a Member had offered to assist in the implementation of the TRIPS 
Agreement.  Another Member had offered  to assist in the development of institutional capabilities concerning transparency, notifications and judicial review. Additional technical assistance would be required with respect to customs valuation, TBT, SPS, and TRIPS etc.  for  WT/ACC/SPEC/NPL/5 
 Page 67 
 
 
full implementation as noted in Annex VIII.  [The Working Party took note of these 
requirements.]  
Conclusions  
126. The Working Party took note of the explanations and statements of Nepal concerning its 
foreign trade regime, as reflected in this Report.  The Working Party took note of the commitments given by Nepal in relation to certain specific matters which are reproduced in 
paragraphs [……………………………………and ………..] of this Report.  The Working Party 
took note that these commitments had been incorporated in paragraph 2 of the Protocol of Accession of Nepal to the WTO.  
127. Having carried out the examination of the foreign trade regime of Nepal and in the light 
of the explanations, commitments and concessions made by the representative of Nepal, the 
Working Party reached the conclusion that Nepal be invited to accede to the Marrakesh 
Agreement Establishing the WTO under the provisions of Article XII.  For this purpose, the Working Party has prepared the draft Decision and Protocol of Accession reproduced in the Appendix to this Report, and takes note of Nepal's Schedule of Concessions and Commitments 
on Goods (document WT/ACC/NPL/…./Add.1) and its Schedule of Specific Commitments on 
Services (document WT/ACC/NPL/…./Add.2) that are annexed to the draft Protocol.  It is proposed that these texts be adopted by the General Council when it adopts the Report.  When the Decision is adopted, the Protocol of Accession would be open for acceptance by Nepal which 
would become a Member thirty days after it accepts the said Protocol.  The Working Party 
agreed, therefore, that it had completed its work concerning the negotiations for the accession of Nepal to the Marrakesh Agreement Establishing the WTO.   
128. Having regard to the Decision of 10 December 2002 on the accession of the LDCs, the 
Working Party agreed to propose that the General Council entrust the Sub-Committee on 
LDCs with the task of monitoring the implementation of the commitments subject to 
transitional arrangements. 
 
 [TO BE COMPLETED] WT/ACC/SPEC/NPL/5 
Page 68  
 
ANNEX I 
LIST OF LAWS AND LEGAL ACTS
 
1. Foreign Investment and Technology Transfer Act (1992) 
2. Industrial Enterprises Act (1992) 
3. Customs Act (1962) 
4. Customs Rules (1970) 
5. Nepal Seeds Act, 2045 (1988) 
6. The Seeds Regulation, 2054 (1997) 
7. Company Act (1997) 
8. Plant Protection Act, 2029 
9. The Food Act, 2023 
10. Export and Import Control Act (1957) 
11. Export and Import Rules (1978 
12. Patent, Design and Trade-Mark Act (1965); 
13. Food Act (1966); 
14. Food Rules (1970); 
15. Plants Quarantine Act 2029 (1972); 
16. Plants Quarantine Rules 2031 (1975); 
17. Plant Protection Act 2029; 
18. Customs Act (1962, amended 1997); 
19. Customs Rules (1970); 
20. Copyright Act (1965); 
21. Summary Trial Procedure Act (1972); 
22. Customs Tariff (electronic format); 
23. Nepal's Trade and Transit Agreements 1993; 
24. Treaty of Transit, Treaty of Trade and Agreement of Co-operation to Control 
Unauthorised Trade between His Majesty's Government of Nepal and the Government 
of India 1991 (as amended and updated to 1999); 
25. Schedules to Nepalese commitments in SAARC under SAPTA Agreement. 
26. Feed Act (Animal Concentrate) 2033 (1996); 
27. Copyright Act (First Amendment) 2054 (1997). 
28. Customs Tariff (electronic format); 
29. First Amendment 2002 on the Nepal chartered Accountant Act 1998; 
30. Copyright Act 2002. 
  WT/ACC/SPEC/NPL/5 
 Page 69 
 
 
ANNEX II 
LIST OF ITEMS SUBJECT TO OTHER DUTIES AND CHARGES (ODCs)  
 
[TO BE COMPLETED] 
 WT/ACC/SPEC/NPL/5 
Page 70  
 
ANNEX III 
LEGISLATIVE ACTION PLAN
 
The document is divided into three sections.  The first section provides the synoptic picture of 
the progress in adoption of legislation.  The second section provides revised agenda for enacting laws and/or adopting regulations/decrees for WTO conformity.  The third section provides a 
calendar plan indicating priorities. 
Section I:  Progress in Adoption of Legislation
 
 Since the submission of the Legislative Action Plan to the Working Party on the 
Accession of the Kingdom of Nepal on 21 May 2002, the following progress has taken place in adoption of legislation. 
 The following legislation acts approved by the Parliament, have received royal seal and 
are in force: 
- Copyright Act 2002; 
- Special Court Act 2002; 
- Nepal Chartered Accountant Act (First Amendment) 2002; 
- Foreign Exchange (Regulation) Act 2002; 
- Several Acts relating to amending  Court Management and Judicial Administration 
Act 2002; and 
- Income Tax Act 2002. 
 The Department/Ministry has completed the following activities: 
- Preparation of a preliminary draft of Law on Anti-dumping Measures; 
- Preparation of a preliminary draft of Customs Act (Amendment) and Customs 
Regulation (Amendment); 
- Preparation of a preliminary draft of Export Import Act and Export Import 
Regulations; and 
- Preliminary draft of Industrial Policy Law. 
The following bills/instruments were endorsed by the Councils of Ministers: 
- Health Service (Regulation and Standard) Act 2002; 
- Plant Resource Act 2002; 
- Seeds (First Amendment) Act 2002; and 
- Instruments of International Plant Protection Convention (IPPC). 
   WT/ACC/SPEC/NPL/5
 Page 71Section II:  Revised Legislative Action Plan  
(Present Status of and Agenda for Nepal's Law-Making Process for WTO Conformity)  
No. Laws/Regulations/ 
Administrative Decisions WTO Agreement Status of Draft/Inte nded Actions Expected Approval Date 
1. Instrument of Ratification 
of WTO Agreement  Marrakech Agreement 
Establishing WTO 1994 Council of Ministers will consider submitting to the 
Parliament for ratification/accession of/to the WTO 
Agreement as soon as WTO approves membership to Nepal  
2. Income Tax Act 2002 General Approved by  the Parliament, April 2002 In force 
3. Bankruptcy/Insolvency 
Act  General Preparation of draft of th e new Act by Ministry of Finance 
by December 2004 
 Endorsement by Council of Ministers by July 2005 September 2005 
4. Foreign Exchange 
(Regulating) Act 2002 (Amendment) General Approved by the Parliament, April 2002  In force 
5. Competition Act  General Preparation of draft of the new Act by Ministry of 
Industry, Commerce and Supplies by November 2003  Endorsement by Council of Ministers by February 2004 July 2004 
6. Export Import (Control) 
Act 1957 (Amendment)  General Agreement on 
Tariffs and Trade 1994  Agreement on Agriculture 
 
 Agreement on Import Licensing Procedures. Initial draft being prepared by Department of Commerce 
by August 2003  Submission by Ministry of Industry Commerce and 
Supplies to Council of Ministers by September 2003 
 Endorsement by Council of Ministers by October 2003 December 2003 
 
7. Export Import (Control) 
Regulations 1978 (Amendment) General Agreement on 
Tariffs and Trade 1994  Agreement on Agriculture 
 
Agreement on Import  Licensing Procedures. Initial draft prepared by Department of Commerce in 
December 2002  Submission by Ministry of Industry Commerce and 
Supplies to Council of Ministers by October 2003 
 Adoption by Council of Ministers by December 2003 December 2003  WT/ACC/SPEC/NPL/5 
Page 72 No. Laws/Regulations/ 
Administrative Decisions WTO Agreement Status of Draft/Inte nded Actions Expected Approval Date 
8. Customs Act, 1962 
(Amendment) Agreement on 
Implementation of Article VII of GATT 1994 
(Customs Valuation) 
  Agreement on Rules of Origin. Initial draft prepared by Department of Customs in 
December 2002  
Submission by Ministry of Finance to the Council of 
Ministers by June 2003   Endorsement by Council of Ministers by September 2003  December 2003 
 
9. Customs Regulation, 
1969 (Amendment) Agreement on 
Implementation of Article VII of GATT 1994 
(Customs Valuation) 
  Agreement on Rules of Origin. Initial draft prepared by Department of Commerce in 
December 2002  
Adoption by Ministry of Finance and submission to 
Council of Ministers by August 2003  Adoption by Council of Ministers by December 2003 December 2003 
10. Instruments of 
Ratification For United Nations 
Convention on Contracts 
for the International Sale of Goods (Vienna, 1980)  General Endorsement by Council of Ministers by March 2004  December 2005 
11. Law on Anti-dumping 
Measures Agreement of 
Implementation of Article VI of the GATT 1994 (Anti-dumping) Preparation of draft legislation by December 2003 
 Endorsement by Council of Ministers by March 2004  July 2004 
12. Nepal Standards 
(Certification Mark) Act, 1980 (Amendment) Agreement on Technical 
Barriers to Trade Preparation of draft amendment by June 2004  
 Endorsement by Council of Ministers by January 2005  April 2005 
13. Nepal Standards 
(Certification Mark) Regulations, 1982 (Amendment) Agreement on Technical 
Barriers to Trade Preparation of draft amendment by September 2005  
Adoption by Council of Ministers by December 2005  December 2005   WT/ACC/SPEC/NPL/5
 Page 73No. Laws/Regulations/ 
Administrative Decisions WTO Agreement Status of Draft/Inte nded Actions Expected Approval Date 
14. Decision on the 
establishment of Inquiry Points Agreement on Technical 
Barriers to Trade Submission of proposal by WTO Division, Ministry of 
Industry, Commerce and Supplies by April 2003  
Adoption by Ministry of Industry, Commerce and 
Supplies by June 2003 June 2003 
15. Plant Protection Act 1972 
(Amendment) Agreement on the 
Application of Sanitary 
and Phyto-Sanitary Measures Preparation of draft amendment by June 2004  
 
Endorsement by Council of Ministers by January 2005 April 2005 
16. Plant Protection 
Regulation 1975 (Amendment)  Agreement on the 
Application of Sanitary and Phyto-Sanitary Measures Preparation of draft amendment by September 2005  
 Adoption by Council of Ministers by December 2005 December 2005 
17. Instrument of 
International Plant Protection Convention 
(IPPC) Agreement on the 
Application of Sanitary and Phyto-Sanitary 
Measures Endorsed by Council of Ministers in August 2002  December 2005 
18. Seed Act 1998 (First 
Amendment) Agreement on the 
Application of Sanitary 
and Phyto-Sanitary 
Measures Endorsed by Council of Ministers in August 2002 
 August 2004 
19. Decision on the 
establishment of Inquiry 
Points Agreement on Sanitary 
and Phyto-Sanitary 
Measures  General Agreement on Tariffs and Trade 1994 Submission of proposal by WTO Division, Ministry of 
Industry, Commerce and Supplies by April 2003 
 Adoption by Ministry of Industry, Commerce and Supplies by June 2003 June 2003 
20. Environment Act, 1997 
(Amendment) General Preparation of draft ame ndment by Ministry of Population 
and Environment by December 2004  
Endorsement by Council of Ministers by July 2005  September 2005  WT/ACC/SPEC/NPL/5 
Page 74 No. Laws/Regulations/ 
Administrative Decisions WTO Agreement Status of Draft/Inte nded Actions Expected Approval Date 
21. Industrial Property 
(Protection) Act  Agreement on Trade-
Related Aspects of Intellectual Property Preparation of new draft legislation by the Department of 
Industry by December 2003  
Adoption by Ministry of Industry, Commerce and 
Supplies by December  2004  Endorsement by Council of Ministers by July 2005 December 2005 
22. Copyright Act 2002 
(Amendment) Agreement on Trade-
Related Aspects of Intellectual Property Rights Approved by the Parliament in August 2002 
   In force 
23. Instrument of Ratification 
of Bern Convention for the Protection of Literary 
and Artistic Works 1971 Agreement on Trade-
Related Aspects of Intellectual Property  
Rights Endorsement  by Council of Ministers by December 2003 
 December 2005 
24. Plant Resources Act Agreement on Trade-
Related Aspects of 
Intellectual Property Rights Endorsed by Council of Ministers in 2002 December 2003 
25. Access to Genetic 
Resources Act Agreement on Trade-
Related Aspects of Intellectual Property Rights Preparation of draft of the new legislation by Ministry of 
Forestry and Soil Conservation by June 2003  Endorsement by Council of Ministers by December 2003  April 2004 
26. Pharmaceutical Act, 1978 
(Amendment)  General Preparation of draft amendment by Ministry of Health by 
December 2004 Endorsement  by Council of Minister by April 2005 September 2005 
27. Cyber Act General Preparation of dr aft amendment by Ministry of Science 
and Technology by December 2004 Endorsement by Council of Ministers by April 2005  September 2005 
28. Foreign Investment and 
Technology Transfer Act, 1992. (Amendment) General Agreement on 
Trade in Services (GATS)  Agreement on Trade 
Related Investment 
Measures. Preparation of draft bill by Department of Industry by 
August 2003  Submission by Ministry of Industry, Commerce and 
Supplies to Council of Ministers by October 2003 
 Endorsement by Council of Ministers by December 2003 February 2004   WT/ACC/SPEC/NPL/5
 Page 75No. Laws/Regulations/ 
Administrative Decisions WTO Agreement Status of Draft/Inte nded Actions Expected Approval Date 
29. Foreign Investment and 
Technology Transfer Regulations General Agreement on 
Trade in Services (GATS)  
Agreement on Trade 
Related Investment Measures. Preparation of draft regulation by Department of Industry 
by March 2004  
Submission by Ministry of Industry, Commerce and 
Supplies to Council of Ministers by April 2004  Endorsement by Council of Ministers by May 2004 May 2004 
30. Industrial Enterprises 
Act, 1992 (Amendment) General Agreement on 
Trade in Services (GATS); Agreement on Trade 
Related Investment 
Measures; and Agreement on Subsidies. Preparation of draft bill by Department of Industry by 
June 2003  Submission by Ministry of Industry, Commerce and 
Supplies to Council of Ministers by October 2003 
 Endorsement by Council of Ministers December 2003  February 2004 
31. Industrial Enterprises 
Regulations General Agreement on 
Trade in Services (GATS)  Agreement on Trade Related Investment 
Measures 
 Agreement on Subsidies. Preparation of draft regulations  by Department of Industry 
by March 2004  Submission by Ministry of Industry, Commerce and Supplies to Council of Ministers by April 2004 
 
Adoption by Council of Ministers by May 2004 May 2004 
32. Industrial Policy, 1992 
(Amendment)  General Agreement on 
Trade in Services (GATS)  Agreement on Trade Related Investment 
Measures 
 Agreement on Subsidies. Preparation of draft policy by Department of Industry by 
August 2003  Adoption by Ministry of Industry Commerce and Supplies by September 2003 September 2003 
33. Foreign Investment and 
One Window Policy, 1992 (Amendments) General Agreement on 
Trade in Services (GATS)  Agreement on Trade Related Investment 
Measures. Preparation of draft Policy by Department of Industry by 
August 2003  Adoption by Ministry of Industry, Commerce and Supplies by September 2003 September 2003  WT/ACC/SPEC/NPL/5 
Page 76 No. Laws/Regulations/ 
Administrative Decisions WTO Agreement Status of Draft/Inte nded Actions Expected Approval Date 
34. Labour Act, 1991 
(Amendment) General Agreement on 
Trade in Services (GATS) Preparation of draft amendmen t by Department of Labour 
by August 2003  
Submission by Ministry of Labour by October 2003 
Endorsement by Council of Ministers by December 2003 February 2004 
35. Company Act, 1997 
(Amendment) General Agreement on 
Trade in Services (GATS) Preparation of draft amendment by the Office of Company 
Registrar by August 2003 
 Adoption by Ministry of Industry, Commerce and Supplies by October 2003  
Endorsement by Council of Ministers by December 2003 February 2004 
36. Nepal Bar Council Act, 
1992 (Amendment) General Agreement on 
Trade in Services (GATS) Preparation of draft amendment by Ministry of Law and 
Justice by October 2003 
 
Endorsement by Council of Ministers by December 2003 February 2004 
37. Nepal Chartered 
Accountants (First Amendment) Act, 2002 General Agreement on 
Trade in Services (GATS) Approved by the Parliament in July 2002 In force 
38. Insurance Act, 1992 
(Amendment) General Agreement on 
Trade in Services (GATS) Preparation of draft amendment by Ministry of Finance by 
October 2003  Endorsement by Council of Ministers by December 2003 February 2004 
39. Securities Exchange Act, 
1982 (Amendment) General Agreement on 
Trade in Services (GATS) Preparation of draft bill by Ministry of Finance by 
October 2003  Endorsement by Council of Ministers by December 2003  February 2004 
40. Bank and Finance 
Institution Act General Agreement on 
Trade in Services (GATS)  Draft already submitted by Central Bank of Nepal to the 
Ministry of Finance   
Adoption by Ministry of Finance by October 2003 
 Endorsement by Council of Ministers by December 2003 February 2004 
41. Health Institutions 
Operating Act General Agreement on 
Trade in Services (GATS) Endorsed by the Council of Ministers in August 2002 September 2003   WT/ACC/SPEC/NPL/5
 Page 77No. Laws/Regulations/ 
Administrative Decisions WTO Agreement Status of Draft/Inte nded Actions Expected Approval Date 
42. Decision on the 
establishment of Inquiry Points General Agreement on 
Trade in Services (GATS) Submission of proposal by WTO Division, Ministry of 
Industry Commerce and Supplies by April 2003  
Adoption by Ministry of Industry, Commerce and 
Supplies by June 2003 June 2003 WT/ACC/SPEC/NPL/5 
Page 78  
 
Section III:  Calendar Plan
 
 2003 – Expected approval date: 
- Decision on the Establishment of Inquiry Point on TBT, June; 
- Decision on the Establishment of Inquiry Point on SPS, June; 
- Decision on the Establishment of Inquiry Point on Services, June; 
- Industrial Policy, 1992 (Amendment), September; 
- Foreign Investment and One Window Policy, 1992 (Amendment), September; 
- Health Institutions Operating Act, September; 
- Export Import (Control) Act, 1957 (Amendment), December; 
- Export Import  (Control) Regulations, 1978 (Amendment), December; 
- Customs Act, 1962 (Amendment), December; 
- Customs Regulations, 1969 (Amendment), December; and 
- Plant Resources Act, December. 
  2004 – Expected approval date: 
- Industrial Enterprises Act, 1992 (Amendment), February; 
- Labour Act, 1991 (Amendment), February; 
- Company Act, 1997 (Amendment), February; 
- Nepal Bar Council Act, 1992 (Amendment), February; 
- Insurance Act, 1992 (Amendment), February; 
- Securities Exchange Act, 1982 (Amendment), February; 
- Bank and Finance Institution Act, February; 
- Foreign Investment and Technology Transfer Act, February; 
- Access to Genetic Resources Act, April; 
- Foreign Investment and Technology Transfer Regulations, May; 
- Industrial Enterprises Regulations, May; 
- Law on Anti-Dumping Practices, July; 
- Competition Act, July; and 
- Seed Act, 1998 (First Amendment), August. 
 2005 – Expected approval date: 
- Plant Protection Act, April; 
- Nepal Standards (Certification Mark) Act, 1980, April; 
- Bankruptcy/Insolvency Act, September; 
- Environment Act, September; 
- Pharmaceutical Act, 1978 (Amendment), September; 
- Cyber Act, September; 
- Nepal Standards (Certification Mark) Regulations, 1982, December; 
- Plant Protection Regulation, 1975 (Amendment), December; 
- Industrial Property (Protection) Act, December; 
- Instrument of Ratification of Bern Convention, December; 
- Instrument of International Plant Protection Convention (IPPC), December; and 
- Instrument of Ratification for the UN Convention on Contracts for the International 
Sale of Good, December. 
 
   WT/ACC/SPEC/NPL/5
 Page 79ANNEX IV 
ACTION PLAN ON IMPLEMENTATION OF THE AGREEMENT ON CUSTOMS VALUATION  
Agreement on Customs Valuation Laws and draf t regulations addressing the subject matter Timeframe for 
completion Remarks 
Article 1-8, annex I Valuation 
Hierarchy  Approval of the  amendment of Customs Act 
 
Approval of the amendment of Customs Regulations  Restructuring the organizational structure of customs administration 
 
Establishment of independent administrative tribunal  Training of customs officials in the areas of clearance, verification, audit and the method to combat valuation fraud 
 
Preparation Customs Valuation Manual   Establishment of fully automated customs houses and computerized customs processing system  
Gradual implementation of valuation hierarchy 
 Transaction valuation   Transaction value of identical goods 
 
Transaction value of similar goods  Imputed value  
Computed value December 2003 
 
December 2003  April 2004  
 
April 2004  July 2004  
 
December 2004  December 2005   
Implemented  
 Upon accession  Upon accession 
 
February 2006  February 2006  Technical assistance requested 
for drafting legislation. 
Technical assistance requested for drafting regulations.   
 
  Technical assistance requested.  
 
  Technical assistance requested.   
Technical assistance requested.  WT/ACC/SPEC/NPL/5 
Page 80 Agreement on Customs Valuation Laws and draf t regulations addressing the subject matter Timeframe for 
completion Remarks 
Article 1:  Sales between related 
person Draft amendment of Customs Act 
 Draft amendment of Customs Regulations December 2003  
Article 7:  Prohibited method of 
appraisement  Except for customs valuation under imputed and computed 
value Upon accession  
Article 10:  Confidential Information  No specifi c provision in current legislation. It is an 
established practice of the customs authorities to ensure confidentiality Implemented  
Article 11:  Right to appeal  The current  provisions provides the aggrieved party the 
right to appeal to Revenue Tribunal. The right to appeal to independent administrative tribunal will be provided in the 
amendment.     December 2004  
Article 12:  Publication of relevant 
laws and regulations Constitution of the Kingdom of Nepal 
 
Amendment of Customs Act 
 Amendment of Customs Regulations December 2003  
Article 13:  Sureties for the release 
of merchandise  Customs Act 1962 Article 13.6  In force   
Article 16:  Importer's right to an 
explanation in writing from the customs administration concerning the determination of customs value  Amendment in Customs Act December 2003  
 
Interpretative Notes : 
 
Full implementation of Agreement on Customs Valuation would be achieved latest by D ecember 2005 as per the implementation plan mentioned above. 
 
 
   WT/ACC/SPEC/NPL/5
 Page 81ANNEX V 
ACTION PLAN ON IMPLEMENTATION OF THE AGR EEMENT ON TECHNICAL BARRIERS TO TRADE  
Agreement on Technical Barriers to 
Trade Laws and draft regulations addressing the subject matter Timeframe for 
completion Remarks 
Article 10: Establishment and 
operation of a single contact point 
for information (enquiry point) Policy decision on the establishment of enquiry point  
 June 2003 
  
Article 2, 3, 5, 7, 10, 15.2, Annex 3 
and G/TBT/1: Transparency: 
Identification of authority responsible for notification and publication  Establishment of documentation and networking system 
 
Training of personnel involved on TBT notification and publications   Policy decision to designate authority responsible for 
notification and publications July 2004 
 
September 2004   December 2005 Technical assistance requested. 
 
Technical assistance requested.   
Article 2, 3, 5, 6 and 7: Development and application of technical 
regulations and conformity 
assessment procedure  Approval of the amendment of Nepal Standard Act 
 
 
Approval of the amendment of Nepal Standard Regulations 
 Establishment of Training Centre for human resource development 
 
Upgrading existing testing and calibration facilities  Establishment of scheme of registration and certification of product/services 
 
Establishment of a system for mutual recognition of accreditation April 2005 
 
 
December 2005  July 2005  
 
July 2006  December 2006  
 
December 2006  Technical assistance requested 
for drafting of law.  
 
Technical assistance requested for drafting of regulations. Technical assistance requested.  
 
Technical assistance requested.  Technical assistance requested.  
 
Technical assistance requested.   
Article 4: Development and application of Standards and Compliance with Code of Good Practice  Development of work manuals 
 Above–mentioned law and regulations 
 July 2006 
 December 2006 Technical assistance requested. 
Article 15.2 and TBT Committee 
Decisions (G/TBT/1):  Submission of statement  on implementation  Above-mentioned law and re gulations December 2005  
  WT/ACC/SPEC/NPL/5 
Page 82 Interpretative Notes:  
 
Full implementation of Agreement on Tec hnical Barriers to Trade would be ach ieved as per the plan mentioned above. 
 
 
   WT/ACC/SPEC/NPL/5
 Page 83ANNEX VI  
ACTION PLAN ON THE IMPLEMENTATION OF THE AG REEMENT ON SANITARY AND PHYTOSANITARY MEASURES  
Agreement on the Implementation 
of SPS Measures Laws and draft regulations addressing the subject 
matter Timeframe for 
completion Remarks 
Article 2.2: Measures applied only 
to the extent necessary to protect 
human ,animal or plant life   Approval of the amendment of Plant Protection 
Act 1972 
 Ratification of Instrument of International Plant Protection Convention (IPPC)   
Approval of amendment of Seed Act 1998 
 Plant Protection Act 1972  Food Act 1966  April  2005 
 
 December 2005   
August 2004 
 In force   In force Technical assistance requested for drafting 
of legislation.  
Article 1: Regulation based on 
science  Upgrading of human resources with special emphasis 
on to quarantine management , meat inspection, veterinary investigation and animal disease risk 
analysis  
 Approval of amendment of Plant Protection Regulation 1975  Upgrading and strengthening of quality control unit, 
laboratory, quarantine system and field veterinary 
system  Opening of new quarantine check post and development of pre and post quarantine facilities  July 2005 
  
 
 December 2005   December 2006 
 
  December 2006 Technical assistance requested. 
  
 
 Technical assistance requested for drafting of regulations.  Technical assistance requested. 
 
  Technical assistance requested. 
Article 2.3 and Annex c.1(a) and (d): Non-discrimination  Interim policy decision on Sanitary and Phyto-Sanitary 
Investigation Upon accession  
Article 3.1, 3.3 and 3.4: 
Harmonization with international standards, guidelines and recommendations  Development of SPS guidelines and protocols 
 Above-mentioned law and regulations  July 2006 
 December 2006 Technical assistance requested. 
Article 4: Equivalence  Above-mentione d law and regulations December 2006   WT/ACC/SPEC/NPL/5 
Page 84 Agreement on the Implementation 
of SPS Measures Laws and draft regulations addressing the subject 
matter Timeframe for 
completion Remarks 
Article 5.1, 5.2 and 5.3: Risk 
assessment to ensure that measures are based on science and applied 
only to the extent necessary to 
protect health Above-mentioned law and regul ations  December 2006  
Article 6 and Annexes A.6 and 
A.7: Regional conditions  Policy decision on Sanitary and Phyto-Sanitary 
Investigation 
 Declaration of pest or disease free areas and areas of low pest or disease prevalence  Upon accession 
 
 July 2005  Technical assistance requested. 
Article 7 and Annex B: 
Establishment and operation of a single contact point for information (enquiry point)  
Transparency: notification and 
access to documentation  Policy decision on the establishment of enquiry point 
 Acquisition of equipment and training of SPS enquiry point personnel  June 2003 
 December 2004 Technical assistance requested. 
Article 8 and Annex C: Control, 
inspection and approval procedures for the use of additives or establishing tolerance for contaminants in food, beverages or feed stuffs comply with the 
agreement  Above-mentioned law and regul ations  December 2006  
 
Interpretative Notes : 
  Full implementation of Agreement on the application of Sanitary  and Phytosanitary Measures woul d be achieved latest by Decembe r 2006 as per the 
implementation plan mentioned above. 
   
 
 
   WT/ACC/SPEC/NPL/5
 Page 85ANNEX VII 
ACTION PLAN ON IMPLEMENTATION OF THE AGREEMENT ON T RADE RELATED ASPECTS OF INTELLECTUAL PROPERTY RIGHTS  
Agreement on Trade Related 
Aspects of Intellectual Property 
Rights Laws and draft regulations addressing the subject matter Timeframe for 
completion Remarks 
General Provisions:  Participation in 
Intellectual Property Conventions Participation in: 
 World Intellectual Property Organization  Paris Convention 
 
Bern convention  Rome Convention and the Treaty on Intellectual Property in Respect of Integrated Circuits   
 Since 1997  Since 2001 
 
December 2005  December 2005  
Part II, Section 1:  Copyrights and  
related rights  Copy Rights Act 2002 
 Training of personnel involved in copyrights protection, 
customs officials and police 
 Training of judges and lawyers   Establishment of Copyrights Information Centre  
Instrument for Ratification of Bern Convention  In force  
 July 2004 
 
 September 2004  December 2004  
December 2005  
 Technical assistance requested. 
 
 Technical assistance requested.  Technical assistance requested.   
Part II, Section 2:  Trademarks  Pate nt, Trademark and Industrial Design Act 1965 
 
Training of personnel involved in trademarks protection, 
customs officials and police  Training of judges and lawyers   
Establishment of Trademark Information Centre 
 Approval of Industrial Property (Protection) Act  In force 
 
September 2004 
  December 2004  
April 2005 
 December 2005  
 
Technical assistance requested. 
  Technical assistance requested.  
Technical assistance requested. 
 Technical assistance requested for the preparation of draft legislation.  WT/ACC/SPEC/NPL/5 
Page 86 Agreement on Trade Related 
Aspects of Intellectual Property 
Rights Laws and draft regulations addressing the subject matter Timeframe for 
completion Remarks 
Part II, Section 3:  Geographical 
indications  Above–mentioned law  December 2005 
  
Part II, Section 4:  Industrial design Pate nt, Trademark and Industrial Design Act 1965 
 Training of personnel involved in protection of industrial 
design, customs officials and police 
 Training of judges and lawyers   Establishment of Industrial Design Information Centre 
 
Approval of Industrial Property (Protection) Act In force  
 September 2004 
 
 December 2004  April 2005 
 
December 2005  
 Technical assistance requested. 
 
 Technical assistance requested.  Technical assistance requested. 
 
Technical assistance requested. 
Part II, Section 5:  Patents Patent, Trademark and Industrial Design Act 1965 
 
Training of personnel involved in protection of patents, 
customs officials and police  Training of judges and lawyers  
 
Establishment of Industrial Patent Information Centre  Computerization and networking of Patent Office   
Approval of Industrial Property (Protection) Act In force 
 
September 2004   December 2004 
 
April 2005  December 2006  
December 2005  
 
Technical assistance requested.    Technical assistance requested. 
 
Technical assistance requested.  Technical assistance requested.    WT/ACC/SPEC/NPL/5
 Page 87Agreement on Trade Related 
Aspects of Intellectual Property 
Rights Laws and draft regulations addressing the subject matter Timeframe for 
completion Remarks 
Part II, Section 6:  Layout-designs 
(Topographies) of integrated circuit  Training of personnel involved in protection of patents, 
customs officials and police 
 
Establishment of Layout-designs Information Centre  Ratification of Instrument of Rome Convention and the Treaty on Intellectual Property in Respect of Integrated 
Circuits 
 Approval of Industrial Property (Protection) Act September 2004 
 
 
July 2005  December 2005  
 
 December 2005 Technical assistance requested. 
 
 
Technical assistance requested. 
Part II, Section 7:  Undisclosed information  Training of personnel involved in protection of undisclosed 
information  Approval of Industrial Property (Protection) Act December 2004 
  December 2005 Technical assistance requested. 
Part II, Section 8:  Control of Anti-
competitive Practices in contractual Licence  Approval of Competition Law 
 Approval of Industrial Property (Protection) Act  July 2004 
 December 2005  
Part III, Section 2:  Civil and 
administrative procedures and remedies Judicial Administrative Act 1991 
 Appellate Court Rules 1972  
Brief Procedural Act 1972 
 Copyrights Act 2002  Patent Trademark and Industrial Design Act 1965 In force 
 In force  
In force 
 In force  In force  
Part III, Section 4:  Special 
requirements related to border measures  Copyrights Act 2002 
 Approval of Industrial Property (Protection) Act    In force 
 December 2005  
Part III, Section 5:  Criminal 
procedures Copyrights Act 2002 
 Patent Trademark and Industrial Design Act 1965 
 
Approval of Industrial Property (Protection) Act  In force 
 In force 
 
December 2005   WT/ACC/SPEC/NPL/5 
Page 88 Agreement on Trade Related 
Aspects of Intellectual Property 
Rights Laws and draft regulations addressing the subject matter Timeframe for 
completion Remarks 
Others  Reorganization and estab lishment of Intellectual Property 
Offices 
 
Computarization of Intellectual Property Office  Developing rules, regulations and work manuals  
Enhancing public awareness on the protection of 
intellectual property rights of   
 
 
  2003-2006 Technical assistance requested 
 
 
Technical assistance requested  Technical assistance requested  
Technical assistance requested 
 
Interpretative notes : 
  Full implementation of Agreement on Trade-Re lated Aspect of Intellectual Property Right s would be achieved latest by December 2006 as per the 
implementation plan mentioned above. 
    WT/ACC/SPEC/NPL/5 
 Page 89 
 
 
 ANNEX VIII 
TECHNICAL ASSISTANCE REQUIREMENTS AND OFFERS  
 
[TO BE COMPLETED] 
 
 
    
 
    
 
 
 WT/ACC/SPEC/NPL/5 
Page 90  
 
  
[ DRAFT DECISION 
 
ACCESSION OF THE KINGDOM OF NEPAL 
 
Decision of […]  
 
 
 The [General Council] [Ministerial Conference],  
 Having regard to  paragraph 2 of Article XII and paragraph 1 of Article IX of the 
Marrakesh Agreement Establishing the World Trade Organization (the "WTO Agreement"), and the Decision-Making Procedures under Articles IX and XII of the WTO Agreement agreed by the General Council (WT/L/93),  
 Conducting  the functions of the Ministerial Conference in the interval between meetings 
pursuant to paragraph 2 of Article IV of the WTO Agreement,   Taking note of the application of the Kingdom of Nepal for accession to WTO Agreement 
dated [date], 
 
 Noting  the results of the negotiations directed toward the establishment of the terms of 
accession of the Kingdom of Nepal to the WTO Agreement and having prepared a Protocol on the Accession of the Kingdom of Nepal,   Decides  as follows: 
 
1. The Kingdom of Nepal may accede to the WTO Agreement on the terms and conditions 
set out in the Protocol annexed to this Decision. 
  
_______________ 
 
   WT/ACC/SPEC/NPL/5 
 Page 91 
 
 
 DRAFT PROTOCOL  
 
ON THE ACCESSION OF THE KINGDOM OF NEPAL 
 
Preamble  
 
 The World Trade Organization (hereinafter referred to as the "WTO"), pursuant to the 
approval of the General Council of the WTO accorded under Article XII of the Marrakesh Agreement Establishing the World Trade Organization (hereinafter referred to as the "WTO Agreement"), and the Kingdom of Nepal,  
 
 Taking note
 of the Report of the Working Party on the Accession of the Kingdom of 
Nepal to the WTO Agreement reproduced in document WT/ACC/NPL/[…], dated […] (hereinafter referred to as the "Working Party Report"),  
 Having regard
 to the results of the negotiations on the accession of the Kingdom of Nepal 
to the WTO Agreement,    Agree
 as follows: 
 
PART I -  GENERAL 
 
1. Upon entry into force of this Protocol pursuant to paragraph 8, the Kingdom of Nepal accedes to the WTO Agreement pursuant to Article XII of that Agreement and thereby becomes a Member of the WTO.   
2. The WTO Agreement to which the Kingdom of Nepal accedes shall be the WTO 
Agreement, including the Explanatory Notes to that Agreement, as rectified, amended or otherwise modified by such legal instruments as may have entered into force before the date of entry into force of this Protocol.  This Protocol, which shall include the commitments referred to in paragraph […] of the Working Party Report, shall be an integral part of the WTO Agreement.  
3. Except as otherwise provided for in paragraph […] of the Working Party Report, those 
obligations in the Multilateral Trade Agreements annexed to the WTO Agreement that are to be implemented over a period of time starting with the entry into force of that Agreement shall be implemented by the Kingdom of Nepal as if it had accepted that Agreement on the date of its entry into force. 
 
4. The Kingdom of Nepal may maintain a measure inconsistent with paragraph 1 of Article II of the GATS provided that such a measure was recorded in the list of Article II Exemptions annexed to this Protocol and meets the conditions of the Annex to the GATS on Article II Exemptions.  
PART II - SCHEDULES 
 5. The Schedules reproduced in Annex I to this Protocol shall become the Schedule of Concessions and Commitments annexed to the General Agreement on Tariffs and Trade 1994 (hereinafter referred to as the "GATT 1994") and the Schedule of Specific Commitments annexed 
to the General Agreement on Trade in Services (hereinafter referred to as "GATS") relating to 
the Kingdom of Nepal.  The staging of the concessions and commitments listed in the Schedules shall be implemented as specified in the relevant parts of the respective Schedules.  WT/ACC/SPEC/NPL/5 
Page 92  
 
 6. For the purpose of the reference in paragraph 6(a) of Article II of the GATT 1994 to the 
date of that Agreement, the applicable date in respect of the Schedules of Concessions and Commitments annexed to this Protocol shall be the date of entry into force of this Protocol.  
PART III - FINAL PROVISIONS 
 
7. This Protocol shall be open for acceptance, by signature or otherwise, by the Kingdom of Nepal until […].  8. This Protocol shall enter into force on the thirtieth day following the day upon which it 
shall have been accepted by the Kingdom of Nepal.  
 9. This Protocol shall be deposited with the Director-General of the WTO.  The Director-General of the WTO shall promptly furnish a certified copy of this Protocol and a notification of acceptance by the Kingdom of Nepal thereto pursuant to paragraph 7 to each 
Member of the WTO and to the Kingdom of Nepal.   
  This Protocol shall be registered in accordance with the provisions of Article 102 of the Charter of the United Nations.     Done at [place] this [.... date ] of [............month] two thousand and three, in a single copy 
in the English, French and Spanish languages, each text being authentic, except that a 
Schedule annexed hereto may specify that it is authentic in only one of these languages. 
 
_______________ 
   WT/ACC/SPEC/NPL/5 
 Page 93 
 
 
 ANNEX I 
    
 
  
  
SCHEDULE […] – THE KINGDOM OF NEPAL 
 
 
Authentic only in the … language. 
 
(Circulated in document WT/ACC/NPL/…/Add.1) 
 
  
_______________ 
  
  
SCHEDULE OF SPECIFIC COMMITMENTS ON SERVICES 
LIST OF ARTICLE II EXEMPTIONS 
 
 
Authentic only in the … language. 
 
(Circulated in document WT/ACC/NPL/…/Add.2)  ] 
 
 
  
__________ 
  
    