RESTRICTED
WORLD TRADE WT/ACC/VUT/4
9May1996
ORGANIZATION(96-1821)
Original: English
ACCESSION OFVANUATU
Questions andReplies totheMemorandum
ontheForeign Trade Régime
(Document WT/ACC/VUT/2)
Inacommunication dated 13June1995, circulated asWT/ACC/VUT/1, theGovernment of
theRepublic ofVanuatu applied foraccession totheWorld Trade Organization (WTO) under the
provisions ofArticle XIIoftheWTO Agreement. Theterms ofreference oftheWorking Party are
reproduced indocument WT/ACC/VUT/3. Indocument WT/ACC/VUT/2, Members hadbeeninvited
tosubmit questions inwriting concerning theforeign traderégime ofVanuatu. Thequestions submitted
byMembers andthereplies thereto provided bytheGovernment oftheRepublic ofVanuatu are
reproduced hereunder.
DelegationswishingtoraiseadditionalquestionsconcerningtheforeigntraderégimeofVanuatu
might inform thedelegation ofVanuatu (with acopytotheSecretariat) ofsuchquestions inadvance
ofthemeeting oftheWorking Party, sothatconsidered replies canbemade available byVanuatu
toMembers atthetimeoftheWorking Party meeting.WT/ACC/VUT/4
Page2
TABLE OFCONTENTS
Page
I. INTRODUCTION 4
II. ECONOMY AND FOREIGN TRADE
1. Economy 4
(a-d)Agriculture, Fisheries andForestry
International Finance Centre
Aims ofGovernment Policy
Public Sector Reform
Recent Economic Development
Savings andInvestment
Inflation andMonetary Development
Private Sector Policy andPrivatization
2. Foreign Trade 10
III. TRADE REGIME FOR GOODS
A. FOREIGN TRADE REGIME
1. Import regulations
(a) Theevolution ofthecustoms tariff regulation 11
(b) Customs tariff nomenclature 17
(c) Import charges andfees 19
(e) Tariff preferences 22
(f) Non-tariff measures, quotas andlicensing system 25
(j) Standards andcertification 28
(k) Sanitary andphytosanitary measures 28
7. Safeguards, Anti-Dumping andCountervailing Duties 29
B. OTHER POLICIES AFFECTING FOREIGN TRADE
1. Industrial policy 29
2. Agricultural policy 30
3. Financial, budgetary andfiscal policy 32
5. Foreign anddomestic investment policy 32
6. Government procurement 34
7. State trading enterprises 35
8. Free-trade zones 36
10. Freeeconomic zones 37
D. SERVICES REGIME 39
V. TRADE-RELATED ASPECTS OF
INTELLECTUAL PROPERTY REGIME 46WT/ACC/VUT/4
Page3
INTRODUCTION (pp.4-5)
1. Public sector reform isnoted asapriority. HowdoestheGovernment intend toimprove
theefficiency ofthepublic sector?
TheGovernment hasadopted atwoprong approach inimproving efficiency inthepublic sector.
Firstly thepublic sector enterprises wererequested tooperate more onacommercial basisastheywere
likely tofaceawithdraw ofbudgetary support given tothem. Thisallowed these activities tobe
corporatized orcompletely privatized. Secondly theGovernment isabout toreview andcarry outsome
reforms within thepublic service. Thismeans restricting andrationalising thepublic service allowing
more transparency inthelinkbetween outputs andtasks/responsibilities.
2. Towhat extend hasthethird National Development Plan fortheperiod 1992-96 been
implemented? What aretheobjectives andpriorities ofthenextDevelopment Plan, ifoneisbeing
prepared?
TheThird National Development Plandocument fortheperiod 1992-96 hasadopted amore
strategic approach todevelopment andassuchitgenerally raises issues, outlines policies andsuggests
strategies toaddress theissues concerned. Thepolicies areusually followed beyond Planning periods.
Thequestion ofthedegree ofimplementation ofaDevelopment Planwould therefore bemore relevant
toacomprehensive planning document. Thenextplanning period begins in1997andtheGovernment
isnowintheprocess ofinitiating thepreparation ofthenextpolicy document.
II. ECONOMY AND FOREIGN TRADE
1. Economy (pp.5-9)
3. What arethepolicies which theGovernment hasputinplace toensure thelong~term
sustainability oftheforest industry (p.5)?
Theobjectives oftheVanuatu Government asstated inthelastNational Development Plan
1987-1991 emphasizes sustainability, increasing products forexport, increase Ni-Vanuatu participation,
efficiency ofexploitation, reforestation andforestry inruraldevelopment. Theobjectives remain the
same andtheDepartment ofForests isstillworking towards achieving theaims.
Policy onReforestation
Reforestation scheme willbeencouraged atalllevels. Atthelocalcommunity, province and
atthenational levelfordifferent objectives butprincipally toincrease forest cover, rehabilitate degraded
forest lands andlandwithpotential forforest development.
ThePrivate Sector willbeencouraged toparticipate inthedifferent schemes andwillbethrough
Vanuatu Timber Hardwood Project (VTHP) andtheextension services.
Alltreespecies thathavepotential economic value willbepropagated andplanted atdifferent
scales depending ontheobjectives ofscheme. Thiswillalsoinclude species withnon-timber value
likesandalwood, palms, nantakura andbamboo.
Reforestation oflogged outareas willbetiedontotheTimber Licence Conditions toensure
itsimplementation andthelevelwillbeworked outinrelation toallowable annual act.
4. What agricultural products areexempt from import dutyunder thetaxpreference system?WT/ACC/VUT/4
Page4
Noagricultural products areexempt fromimport dutyunder thetaxpreference system. The
taxpreference bywayofdutyexemptions islimited tomachinery asindicated onthememorandum.
5. What hastheGovernment donetoimprove thequality ofagriculture produce andenhance
theefficiency ofagriculture? What alternatives tocopra doestheGovernment consider tobe
capable ofproviding anincome torural areas?
TheGovernmenthavespendatotalbudgetofapproximately1300millionvatuduring1982-1986
oninitiated projects directed atimproving production inAgriculture Sector.
These projects includes:
- setting upofanongoing research activities oftheValeteruni Research Station;
- setting upofdemonstration plotsandtheprovision ofseedlings andextension advice
tofarmers;
- supply ofsubsidised cocoa fermentaries to24village groups andindividuals inthe
Santo/Malo, Ambae/Maewo andMalekula;
- licensing offermentaries andintermediary purchases andtheintroduction ofagrading
system inaneffort toimprove thequality oftheproduct offered forsale;
- expansion ofactivities attheSaroutou Research Station tomeetthedemand forseed
nutsandtocater foranticipated demand forhybrids from commercial plantations;
- establishing arootcrops collection inEspiritu Santo andcompletion ofaseries of
preliminary yield andpestanddisease -resistance trials;
- research bytheLivestock Service intoLivestock productivity including factors affecting
infertility andgrowth rates, andgrass andlegume species evaluation;
- identifying thedifferent varieties andthechemical andpharmaceutical properties of
localkavacultivar;
- seedpotato andpotato storage trials attheTagabe Agriculture Station thathaveled
totheidentification ofvarieties suitable forplanting onEfate andTanna;
- setting uptwoprojects atthePlantation Management Training Centre toinvestigate
minimumtillageintercroppingtechniqueandanintegratedsmallholderlivestock/rootcrop
farmmanagement system.
Thelisted programmes areunder thecapacity ofDepartment ofAgriculture inconducting
continuous evaluation oftheeffectiveness ofthese projects andinitsprogress enhance theefficiency
ofAgriculture.
Thealternatives tocopra intheAgricultural Sector duetoprice fluctuations includes:
- cocoa production;
- small scale beefproduction;
- coffee production;
- vegetable farming which includes potato production;
- poultry farming, including piggery;
- vanilla andPepper production.
These should becapable ofproviding andincome torural areas andsubstitute imported
Agriculture products.
6. What ismeant by"self-reliance" (p.6)? Economic self-reliance ortotalself-sufficiency?WT/ACC/VUT/4
Page5
Selfreliance isalongtermeconomic goal. ForVanuatu itisdefined asastage reached where
Vanuatu isabletomeetitsimport requirements fromforeign exchange earnings andfiscal requirements
fromdomestic revenues. Since political independence 15years ago,Vanuatu hasalready reached that
stage. Itnolonger relies onbudgetary support fromtheformer colonial powers ofBritain andFrance.
Iteasily meets itsimports requirements from revenues received from exports ofgoods andservices
including tourism. Ithasbeenabletosustain aforeign reserve equivalent toabout 4months ofimports.
Anditintroduced revenue measures tosupport itsannual budgets andexpenditure requirements.
Vanuatu hasbeenself-sufficient forcenturies inthepastbefore colonisation. Withagriculture
stillamajor sector intheeconomy (about 23percentofGDP) particularly subsistence agriculture
which accounts forabout 50percentofthevalue added intheagriculture sub-sector, Vanuatu has
ahigher degree ofselfsufficiency thansayanindustrial country where specialisation oflabour isthe
norm.
7. Could Vanuatu provide adetailed description oftheproduct/sectoral coverage ofitsimport
substitution policy andthemeasures employed toimplement thatpolicy (p.6)?
Theindustry sector comprises ofsmall scale industries forsubsectors ofmanufacturing and
industry thatshould grow by10percentuntilmeasures areinplace torestrict products. However
thefollowing products areinitial coverage ofthepromoted policy onimport substitution:
- Bagmanufacturing
Product: highquality bagsandleather products;
- Boatbuilders
Product: aluminium boats;
- Brewery andsoftdrinks
Product: beerandjuice;
- Clothing manufacturers
Product: clothing andtextiles;
- Curtains andupholstery
Product: coverings;
- Fibreglass manufacturers
Product: fibreglass;
- Furniture manufacturers
Product: quality furniture;
- Food andbeverages
Product: quality preservative free,natural dairy
Product: Camembert cheese, milks &creams, plainandflavoured yoghurts allnatural;
- Vanuatu coconut products
Product: quality soap, cooking oilandhairlotion.WT/ACC/VUT/4
Page6
Measures employed toimplement thepolicy:
1. Entrepreneurship Development
Encourage andassist local entrepreneurs insetting uptheirownindustrial enterprises, and
toparticipate injointventures withforeigners.
2. Financial Support Development
Toassist andco-operate withlending institutions inmatters ofindustrial projects.
3. Local Resource Utilization
Topromote (basic) industries which process localrawmaterials including ruralindustries to
foster abalanced geographical distribution ofindustrial activities.
Foreign Industry Development
Foreign Investment Enhancement
4. Toencourage longtermforeign investment inmanufacturing andprocessing industries.
5. Infrastructure Development
Toestablish aproper baseformedium andlongtermindustrial investment opportunities.
6. Export Development
Toencourage theestablishment ofexport industries toimprove thebalance ofpayment and
tocreate employment.
7. Institutional Support System Building
Tocreate anenabling business environment fortheestablishment, operation andgrowth of
newindustrial enterprises.
8. What istheseasonal restriction (sixmonth period) regarding theimportation ofpotatoes
(p.6)?
Theseasonal restriction (sixmonths period) regarding theimportation ofpotatoes commences
from August toFebruary.
9. What isthenature ofrestrictions relating totheimport ofrice, sugar, flour, tobacco
products andcanned mackerel (p.6)?
Thenature ofrestrictions relating totheimport ofthefivecommodities isperhaps apolitical
decision, butbasically toenhance theVanuatu Co-operative Federation torepay allitsoutstanding
trading debts afteritceased tooperate commercially in1986.
10. Howhasprivatizationoftheentitieswhichprovideselectricity,waterandtelephoneservices
andoftheVanuatu Broadcasting andTelevision Corporation (VBTC) (p.7)reduced thecostandWT/ACC/VUT/4
Page7
improved thedelivery ofservices? DoestheGovernment haveanyplans toremove themonopolies
(public orprivate) intheprovision ofwater, electricity andtelephones?
Privatization inVanuatu isdonemore fortheefficient management ofresources andthefreeing
upofbudgetary resources forsectors oractivities which werethought could beselfsupported inthe
market place. Alsotoreduce political interferences intheoperations ofthese bodies.
Thebalance between efficiency andcosts totheconsumer isadelicate oneandhasnotbeen
looked atbytheGovernment seriously atthisstage. Reduction ofcosts canonlyoccur ifthere is
effective competition inthemarket andthisisnotthecasehereinVanuatu. Thecountry issmall in
sizeandpopulation therefore itisconsidered logical torationalize theoperations oftheseorganizations
mentioned. Alsothehighstart-up costs andeconomies ofscale would discourage further drive to
competition within these activities asitwould notwarrant profit making. Thequestion ofreducing
costs isquite secondary inthese circumstances.
Thecosts ofelectricity andtelecommunications areamongst thehighest intheSouth Pacific
region which inturnhaveadirect linkwiththegeneral costofliving index inVanuatu. Thisis
considered highwhen compared toourAsian neighbours andothers intheSouth Pacific region.
However, theconsumers arecompensated bytheefficiency intheprovision ofthese services. The
costs ofwater andbroadcasting arenotfarbehind from that.
TheGovernment hasnoimmediate plans toremove themonopoly activities ofthese corporate
bodies. Onthecontrary, theGovernment intends togofurther down theprivatization road.
11. Theprivate sector isrecognised asthekeytodevelopment (p.8). HowdoestheGovernment
assist andfacilitate private sector investment, bothdomestic andforeign?
Promotion andEntrepreneurship Development:
- Project identification;
- Implement Entrepreneurship Development Programmes ie:promotional campaigns,
entrepreneurship inducement courses, workshops;
- Identify potential entrepreneurs;
- Make feasibility studies based ontheidentified opportunities andentrepreneurs;
- Toassist prospective entrepreneurs;
- assessment ofthemarket,
- developing asound business plan,
- choice ofappropriate technology,
- preparing aloanapplication,
- identification ofsources offunds.
- Screen andevaluate feasibility studies andbusiness planssubmitted byprospective local
and(foreign) entrepreneurs;
- Toinvestigate newtechnology applications;WT/ACC/VUT/4
Page8
- Toco-operatecloselywithotherpromotionandindustrialdevelopmentbodiesnationally
andinternationally.
Further activities includes Extension Services suchas:
- Toadvise andassist starters insetting uptheirbusiness;
- Toprovidethenewentrepreneurwithregularfollow-upsupportduringtheinitialyear(s)
ofoperation;
- Tosurvey theneeds ofexisting entrepreneurs;
- Toprovide advisory support toanyindustrial entrepreneur whoneeds advice;
- Toprovideindustrialconsultancyinmattersofmanagement(personalmarketing,finance
production)andtechnology(choiceoftechnology,maintenance,layout,qualitycontrol);
- Toliaise onbehalf ofentrepreneurs withtheorganization, institution orother business
which cangivespecialist advise orassistance;
- Todocrisis interventions whenever anindustrial enterprise isinsevere problems and
helpissought;
- Torunworkshops, training formanagers;
- Tomonitor performance andprovide assistance tosmall enterprise centres;
- Toplanprogrammes andprovide assistance toindustrialization activities;
- Develop arural extension network;
- Provide dutyexemption toprivate businesses;
- Provide assistance through regional institutions, commissions anddiplomatic mission
offices.
Thelisted activities areassistance provided atGovernment level tofacilitate private sector
investment forbothdomestic andforeign, through theDepartment ofIndustry, Trade andCommerce.
12. WhendoestheGovernmentplantocompletethecurrentprocessofdevelopinganinvestment
code? What willthecodecover andhowwillitimprove Vanuatu 'sstanding asaninvestment
destination?
TheGovernment ofVanuatu isinitscurrent processing stage ofcompleting theInvestment
Code andprogress ofthedocument should shortly befinalized towards theendofthisyear1996.
TheInvestment Code would cover important issues suchasthe:
(i) Labour Laws;
(ii) Immigration Laws asrelated toresidency permits, work permits etc.;
(iii) Business Laws
Land Laws toassure;
(iv) Foreign Investors.WT/ACC/VUT/4
Page9
These fourissues would becovered thoroughly inorder toprotect andassist foreign investors
conducting business inVanuatu.
Inimproving Vanuatu 'sstanding asaninvestment destination suchplans ofanInvestment Code
should toagreater extent streamline theprocess ofinvestment procedures especially administrative
duties, approval bottlenecks, disputes overlandproblems, industrial disputes andpolitical interference
thatshould beprotected bythelawofanInvestment Code.
13. Could theGovernment explain thedegree ofsecurity which foreign investors have in
Vanuatu?
TheGovernment ofVanuatu cannot assure atthisstage thedegree ofsecurity which foreign
investors haveinVanuatu. Thisissimply prior totheMinister 'spower toassess credibility ofany
investors should hehastodosooncertain circumstances. Apart fromtheMinister 'spower, experiences
inthepastshows thatthere arenolawsinplace toprotect foreign investors anditisstillnotpossible
toguarantee security offoreign investors bylaw,however thepresent Investment Code should provide
provisions assecurity toforeign investors inVanuatu.
14. HowwilltheGovernment ensure thattheChamber ofCommerce ithasestablished (p.9)
willassist thebusiness community andprovide agenuine channel forthecommunity todiscuss
economic andcommercial policy withtheGovernment?
TheVanuatu Government passed ActNo.4of1995 establishing theChamber ofCommerce
andIndustry ofVanuatu. ThisActspecifies that7Local Chambers ofCommerce andIndustry be
established torepresent thebusiness community ineachLocal Authority (Provincial Governments and
Municipalities).
Foritsestablishment phase theVanuatu Government gaveagrant ofVt.10Million (approx
US$100,000).Foritsfuturefunding(beginningin1996),theActspecifiesthat2percentoftheBusiness
Licence Feecollected fromtheprevious financial yearbepaidbyeachlocalauthority totheirrespective
localChamber ofCommerce andIndustry.
Thecommitment fromtheGovernment isseenbythebusiness community asaverypositive
signtowards aclose working partnership between theGovernment andthebusiness community in
developing thebusiness sector inevery region ofVanuatu.
2. Foreign Trade (pp.9-10)
15. ThenewProvincial Governments have been inplace foroneyearnow. Towhat extent
hasthishelped thedecentralisation process andthedevelopment ofrural areas? What expertise
dotheProvincial Governments possess toallow them toimplement thedecentralisation and
development policies thataresetout?
ThenewProvincial Governments haveonlybeeninplace forayearnowanditistooearly
tocomment onwhether thedecentralisation policy hasbeen implemented successfully. The
Decentralisation Act,asanewAct,willalways bearnewlessons andexperiences, especially tothe
implementing agency. Inother words, itwould taketimebefore thebenefits ofthedecentralisation
policy could become transparent.
TheexpertisetheProvincialGovernmentspossesstoallowthemtoimplementthedecentralisation
anddevelopment policies isamatter ofconcern thatneeds tobeaddressed. Itwasintended thatthe
creation ofpositions inthese provinces would attract highlevelpersons suchasgraduates. However,WT/ACC/VUT/4
Page10
itwould seem thatthenature ofthesecurity oftenure forsuchpositions intheprovinces wasa
disincentive initself despite thefavourable salary level. Those graduates whomaybeinterested to
takeupsuchpositions intheprovinces would holdreservations because jobsecurity attheprovinces
isatriskandsusceptible topolitical infiltration. Hence, thestaffarenotcivilservants. Therefore,
itisnowunder consideration tohaveprovincial positions under contract, especially those technical
positions, inorder tokeeptheintegrity ofattracting persons ofahigher calibre tothese positions.
III. TRADE REGIME FOR GOODS
A. FOREIGN TRADE REGIME
1. Import Regulations (pp.10-19)
(a) Theevolution ofthecustoms tariff regulation.
16. Does theGovernment plantoreduce toeliminate existing tariffs? Ifyes,what measures
areplanned tomake upfortherevenue foregone bythereduction and/or complete removal of
import duties?
TheVanuatu Government isalready reducing import tariffs anditisexpected thataverage
dutyrateswillbesetat15percentwiththeapplicable service taxprobably at7percent.
Therevenue isnotguaranteed tobelostinsuchaexercise butmuch more emphasis willbe
placed onourbusiness licence fees-byreviewing, more collection andenforcement ofthisrevenue
source.
17. Could Vanuatu describe itsinstitutional mechanism forexamining proposals fortariff
protection andfortheperiodic review ofitstrade regime? Areanyareas oftrade exempt from
suchexamination?
There isnoinstitutional mechanism forexamining proposals fortariffprotection. Thisiscarried
outonanadhocbasis. Thiswould beinitiated bytheDepartment ofIndustry orbythelocalindustries
themselves. Theinitiative isforwarded totheDepartment ofCustoms andTaxes toassess revenue
implications inthefirstinstance.
Secondly, theDepartment ofIndustry assesses therequest astowhether anyfinished product
from thelocal industry satisfies himofthequality, quantity andsaleprice. Other factors suchas
employment andtechnology transfer willplayasubstantial partindeciding onthetariff protection
rate.
Inthecaseofthemanufacturing industry thepractice istoprovide theprotection foraminimum
ofthree years, tobereviewed eachyearthereafter.
Asregards theliveanimals, products andvegetable products which areavailable inVanuatu,
thetariffprotectionhasbeeninplacetoencouragemorelocalproduction.Tariffprotectioncanhowever,
beoverridden byimport dumping. Noantidumping regulations existinVanuatu.
Noareas oftrade areexempt from suchexamination.
18. Could Vanuatu describe theofficial guidelines which areapplied inthegranting ofimport
dutyexemptions? Could anyconditions notmentioned intheMemorandum which apply tothe
granting ofimport dutyexemptions alsobedescribed. Which authority hasthefinalsayonthe
granting ofexemptions, oraresuchexemptions granted strictly onthebasis ofmutual agreement
between relevant authorities?WT/ACC/VUT/4
Page11
TheMinister ofFinance haspowers under Schedule 3oftheVanuatu Customs Tariff -X1-
X2-X5-X6togrant exemption from Customs Import Duty wholly orpartly togoods which can
beconsidered tobeforeconomic development oftheRepublic ofVanuatu.
Schedule IIIoftheVanuatu Customs Tariff summarizes theexemptions thatcould begranted.
Allsuchexemptions areconditional.
Those exemptions falling under international standards, e.g.temporary importation orimport
ofhousehold effects, areselfexplanatory.
Those exemptions related toconditional exemptions tobeissued bytheMinister ortheDirector
ofCustoms areguided bythefollowing principles:
CATEGORIES POINTS SCORE
a)Jobcreation <5
6-20
21+1
2
3
b)Ownership andinvestment
1-30%
Over 30%Non-citizen
<5million0
Non-citizen
>5million3
Joint One
<5million1
Joint One
>5million4
Joint Two
<5million2
Joint Two
>5million5
Citizen 6
c)Location Urban/Rural
Urban
Rural1
2
3
d)Training andlocalization Vt.13-25,000
Vt.26-40,000
Vt.41+1
2
3Local wages
number of
employees
e)Market Local Substitute
Import Substitute
Export1
2
3
f)Value added Zero
<45%
>45%0
1
2WT/ACC/VUT/4
Page12
Explanation ofTerms
JobCreation:
- hastodowithnewjobscreated forindigenous Ni-Vanuatu citizens.;
- refers tofull-time positions of"full-time equivalent". Full-time equivalent isequal
tothesumofhours worked bypart-time staffperweek anddivided by40hours;
Ownership andInvestment Size:
- "Non-citizen" refers toabusiness wholly owned byanon-citizen;
- "Joint One" refers toabusiness jointly owned byacitizen andnon-citizen where the
citizen owns lessthan30percent;
- "Joint Two" refers toabusiness owned byacitizen andnon-citizen where thecitizen
owns 30percentormore ofthebusiness;
- "Citizen" refers toawholly indigenous, Ni-Vanuatu citizen owned business;
- "<5million" refers totheowner 'sequity inthebusiness being lessthan5million
vatu;
- ">5million" refers totheowners equity inthebusiness being 5million vatuormore.
Location:
- "Urban" refers toalocation inVilaorLuganville, Urban Land;
- "Urban/Rural" refers toalocation outside anurban areabutwithin 3kilometres;
- "Rural" refers toalocation greater than3kilometres from anurban area.
Training andLocalization:
- AllNi-Vanuatu employees aregrouped according towages:
Group A13,500 -25,000 Vatupermonth
Group B25,001 -40,000 Vatupermonth
Group C40,001 +Vatupermonth
- Anaverage wage isthencalculated andapplied tothecriteria.
Market:
- "Local Substitute" refers toproducts which willreplace goods which arecurrently
locally produced;WT/ACC/VUT/4
Page13
- "Import Substitute" refers toproducts which willreplace goods which arecurrently
imported;
- "Export" refers toproducts which areexported;
- "Categories arebased onvalue ofsales.
Value Added:
- "Value added" refers tolocalvalue versus value ofimported components ofagood
(does notinclude depreciation ofcapital assets).
No Small Yes
0 10 15 20
(a) Xl-Goods Imported forManufacture ofProcess
TheMinister ofFinance may,asheseesfit,exempt anygoods being rawmaterials orequipment
destined foruseexclusively inmanufacturing orprocessing intheRepublic ofVanuatu,
provided that:
(i) anapplication forexemption shallbemade totheDirector ofIndustry insuchform
andmanner asmaybeprescribed byhim;
(ii) thefinished goods arising fromsuchmanufacture orprocessing operation shall, inthe
interests ofconsumer protection, satisfy theDirector ofIndustry inrespect oftheir
quality, quantity andsaleprice; and
(iii) theimporter shallatalltimes comply withsuchterms andconditions asmaybeimposed
bytheDirector ofIndustry.
(b) X2-Goods Imported foraDevelopment Project intheFinance orCommercial Sectors
TheMinisterofFinancemay,athisabsolutediscretion,grantexemptionorreductionofcustoms
dutyonallorpartofanygoods imported foranewtourism development project which heconsiders
islikely tocontribute significantly totheeconomic development oftheRepublic ofVanuatu.
X5-Goods Imported foraTourism Development Project
TheMinisterofFinancemay,athisabsolutediscretion,grantexemptionorreductionofcustoms
dutyonallorpartofanygoods imported foranewtourism development project which heconsiders
islikely tocontribute significantly totheeconomic development oftheRepublic ofVanuatu.
X6-Goods Imported forMineral Exploration
TheMinisterofFinancemay,athisabsolutediscretion,grantexemptionorreductionofcustoms
dutyonallorpartofanygodsimported foramineral explorations project which heconsiders islikely
tocontribute significantly tothedevelopment ofthemineral exploration programme inVanuatu.WT/ACC/VUT/4
Page14
Besides theabove measures, dutysubsidy toinvestors, therearecertain areaswhere exemptions
ofcustoms dutyaregranted.
Example: X3-X4-X9.
X3-Goods Imported forAgriculture, Horticulture, Livestock orForestry
1. Plant, machinery, materials andequipment (including purpose-designed vehicles suchascattle
truck refrigerated vehicles andthelike), andincluding spare parts andaccessories.
2. Fuels oils,intended foruseinstatic machinery ortopower vehicles andequipment engaged
primarily inoff-the-road applications,
provided that:
(a) applications forexemption shallbemade totheDirector ofAgriculture insuchform
andmanner asmaybeprescribed byhim;
(b) thegoods shallbeintended exclusively foruseonadevelopment project approved
bytheDirector ofAgriculture;
(c) thisexemption shall notcover vehicles designed forgeneral roaduse,orlogging
equipment; and
(d) theterms andconditions asmaybeimposed bytheDirector ofAgriculture. Andfurther
provided thattheDirector ofCustoms mayathisdiscretion determine whether goods
forwhich exemption isclaimed aresoeligible.
X4-Goods Imported forInter-Island Shipping
1. Plant, machinery, equipment andmaterials (including spare parts) imported exclusively for
useisinter-island shipping;
2. Fueloilsintended exclusively forusebycargo vessels engaged ininter-island transportation;
Provided that:
(a) application forexemption shallbemade totheMinister ofTransport insuchformand
manner asmaybeprescribed byhim;
(b) exemption allowed under subsection (ii)above shallinnocaseexceed 50percentof
thefull,legalCustoms Tariff rateapplicable totheoilsforwhich relief isgranted;
(c) theperson towhom relief isgranted shall attimes comply withsuchterms and
conditions asbybeimposed bytheDirector ofCustoms.
X9-Fisheries Industry Equipment
1. Boats, andboat-building materials, including fueloils,where these aretobeusedexclusively
forcommercial fishing.WT/ACC/VUT/4
Page15
2. Machinery,materialsandequipmentincludingfishinginboatandoutboardmotors,refrigeration
equipment
Provided that:
(a) exemption forfueloilallowed under subsection (1)above shallbe:
- atotalexemption inthecaseofnewfisheries projects andsuchprivileges shall
beallowed foraperiod tobedetermined bytheDirector ofFisheries;
- 70percentofthenormal tariffratesinthecaseofestablished fisheries projects;
and
(b) anygoods forwhich exemption isclaimed shallbeaccompanied byacertificate stating
thattheyintended tobeusedsolely foranapproved fisheries project andfurther
provided thatsuchcertificate beendorsed bytheDirector ofFisheries.
Charitable Relief forNon-Profit Making Groups andOrganizations
X86-Goods Admitted Under AnInternational Convention orAgreement
Anygoods admissible freeofdutyortaxbyvirtue ofaninternational convention oragreement
signed bytheGovernment oftheRepublic ofVanuatu, which areintended fortheuseofadiplomatic,
orforentitled other approved organization ormission, orforentitled persons employed bythem:
(a) goods imported bydiplomatic mission offoreign States orinternational organizations forthe
useofthemission;
(b) goods imported bydiplomatic agents offoreign States orinternational organizations fortheir
personal use;
(c) goods imported bytechnical experts provided byforeign States orinternational organizations
fortheirpersonal use;
(d) goods (other thandisaster relief aid)donated freeofcharges totheGovernment ofVanuatu
byforeign States ororganizations asaidinkind;
(e) goodstonon-governmentgroupsandorganizationsinVanuatubyforeignStatesororganizations
under discretionary grant schemes;
(f) goods (other thandisaster relief aid)imported byoronbehalf oftheGovernment ofVanuatu
foraidproject funded bydevelopment cashgrants administered byVanuatu;
(g) goods (other thandisaster relief aid)imported bytoonbehalf oftheGovernment ofVanuatu
foraidprojects funded bydevelopment loans administered byVanuatu;
(h) goods imported byoronbehalf oftheGovernment ofVanuatu fordisaster relief projects funded
byforeign States oninternational organizations;
(i) others;WT/ACC/VUT/4
Page16
provided thatasigned copyoftheconvention oragreement shallbelodged withtheMinister ofFinance,
together withalistofpersons entitled toprivileges under suchconvention oragreement; andfurther
provided thattheDirector shallimpose suchconditions ashemayconsider necessary inanyparticular
case.
19. Arethere anyexemptions inplace fortariffs forparticular businesses?
No
(b) Customs tariff nomenclature
20. Would Vanuatu make available afullcopy ofitscustoms tariff schedule totheWTO
Secretariat andtomembers oftheAccession Working Party?
Available intheSecretariat (Accessions Division, Room 1132) forconsultation.
21. Which products (ortariff chapters) yield themost revenue?
Tariff Chapters Yielding themost Revenue.
Section Chapter Description Tariff chapter
yielding most
revenue
I 1-5LIVE ANIMALS 02.07
II 6-14VEGETABLE PRODUCTS 10.06
III 15ANIMAL ORVEGETABLES FAT&OILAND
THEIR CLEAVAGE PRODUCTS, PREPARED
EDIBLE FATS, ANIMAL ORVEGETABLE
WAXES15.17
IV 16-24PREPARED FOODSTUFFS,
BEVERAGES,SPIRITS &VINEGAR, TOBACCO
SUBSTITUTES22.03
V 25-27MINERAL PRODUCTS 27.10
VI 28-38ALLIED INDUSTRIES
VII 39-40PLASTIC &ARTICLES THEREOF, RUBBER
AND ARTICLES THEREOF, SADDLERY AND
HARNESS, TRAVEL GOODS, HANDBAG, &
SIMILAR CONTAINERS, ARTICLES OR
ANIMAL GUT (OTHER THAN SILK WORM)40.11
VIII 49-46WOOD &ARTICLES OFWOOD, CHARCOAL
CORK &ARTICLES OFCORK
MANUFACTURE OFSTRAWS OFESPARTO
TOOFOTHER PLAITING MATERIALS,
BASKETWARE AND WICKERWARE.44.12WT/ACC/VUT/4
Page17
Section Chapter Description Tariff chapter
yielding most
revenue
X 47-49PULP OFWOOD OROFOTHER FIBROUS
CELLULOSIC MATERIAL, WASTE AND
SCRAP OFPAPER ORPAPERBOARD PAPER
AND PAPERBOARD AND ARTICLES
THEREOF48.92
XI 50-63TEXTILES AND TEXTILE ARTICLES 52.12
XII 64-67FOOTWEAR, HEADGEAR, UMBRELLAS,
WALKING STICKS, SEAT STICKS, WHIPS,
RIDING -CROPS AND PARTS THEREOF,
PREPARED FEATHERS &ARTICLES MADE
THEREWITH, ARTIFICIAL
FLOWERS, ARTICLES OFHUMAN HAIR.64.03
XIII 68-70ARTICLES OFSTONE, PLASTER CEMENT,
ASBESTOS, MICA ORSIMILAR MATERIALS
CERAMIC PRODUCTS, GLASS &GLASSWARE69.08
XIV 71NATURAL ORCULTURED PEARLS,
PRECIOUS ORSEMI-PRECIOUS STONES,
PRECIOUS METALS,CLAD WITH PRECIOUS
METAL AND ARTICLES, THEREOF COIN.71.13
XV 72-83BASE METALS &ARTICLES OFBASE
METALS72.25
XVI 84-85MACHINERY AND MECHANICAL
APPLIANCES, ELECTRICAL EQUIPMENT,
PART THEREOF, SOUND RECORDERS, &
REPRODUCERS, TELEVISION IMAGE AND
SOUND RECORDERS AND REPRODUCERS,
AND PARTS AND ACCESSORIES OFSUCH
ARTICLES.84.71
XVIII 90-92OPTICAL, PHOTOGRAPHIC MEASURING,
CHECKING, PRECISION, MEDICAL OR
SURGICAL INSTRUMENTS &APPARATUS,
CLOCKS &WATCHES, MUSICAL
INSTRUMENTS, PARTS &ACCESSORIES
THEREOF90.09
XIX 93ARMS &AMMUNITION, PARTS &
ACCESSORIES THEREOF93.06
XX 94-96MISCELLANEOUS MANUFACTURED
ARTICLES95.03
XXI 97-99WORKS OFART, COLLECTORS PIECES &
ANTIQUESALL EXEMPT
OFDUTYWT/ACC/VUT/4
Page18
(c) Import charges andfees
22. Please provide acopy oftherules inforce relating toanyimport charges andfees.
GENERAL TARIFF FOR HANDLING CHARGES
OffLoading orLoading Main Wharf andstorage ofgoods inshedand/or openarea.
DESCRIPTION OF
MERCHANDISEBASIS OF
CHARGESTARIFF
(VT)
GENERAL TARIFF UPTO2TONS PERUNIT WEIGHT
EXPORTATION.
General cargo except
following merchandisesCUBIC/T 1.401
Copra exquay CUBIC/T 997
Copra under hooke CUBIC/T 817
Coffee, cocoa, shells taros CUBIC/T 946
Tinned food CUBIC/T 946
Refrigerated orfrozen meats CUBIC/T 1.290
Refrigerated orfrozen goods CUBIC/T 1.290
Logs exquay CUBIC/T 779
Logs under hook water side CUBIC/T 591
Sawn timber inbundles CUBIC/T 1.008
IMPORTATION
General cargo except thefollowing merchandise CUBIC/T 1.401
Frozen orrefrigerated merchandise CUBIC/T 1.558
Ammunition orexplosives CUBIC/T 3.538
Glass andmarble inplates orslabs CUBIC/T 2.379
Empty drums orbarrels (11gls) CUBIC/T 95
Horses andcattle UNIT 1.922
Pigsandsheep UNIT 481
Cement inbagloose TON 1.493
Palletized cement orplaster bags(minimum 5OT) CUBIC/T 1.139
MailBag UNIT 47
Homogenous lotofpalletized goods over50T CUBIT/T 1.263
Unpackaged orcontainerized motocare UNIT 7.009
Pick-up truck, busupto2000 kgs CUBIC 7.710
Minimum charge perbilloflading UNIT 315WT/ACC/VUT/4
Page19
DESCRIPTION OF
MERCHANDISEBASIS OF
CHARGESTARIFF
(VT)
Unpacked truck, busup
to2.000 kgsCUBIC 701+surcharge
heavy lift
Trailer, caravans towable machines onwheels CUBIC 701+surcharge
heavy lift
Boat, launch (unpackaged) CUBIC 839+surcharge
heavy lift
Boat, launch (with slings) CUBIC 757+surcharge
heavy lift
Heavy equipment CUBIC 839+surcharge
heavy lift
Heavy equipment (with slings) CUBIC 757+surcharge
heavy lift
Special case: foroffloading orloading onbarge ofheavy automotive equipment 15percent
reduction (over 10Tor20m3)
FullContainers FCL
Named FCLorFCL/FCL -LCL/FCL, piertohouse, quaytodoor, signifies forthepurposes
ofapplication ofthepresent tariff, thattheunopened container isoff-loaded andstowed inthe
portarea, from where itmust betaken incharge bytheconsignee. Ifthiscontainer hastobe
unpacked, itwillbesubject tothefollowing charge inaddition tothefullcontainer tariff:
- Vt.2.884 per9C/m
- Vt.6.389 per20'/.
ISONORM
a) 8'container UnitVt. 7.703
b) 20'container UnitVt. 26.279
c) 20'fullcontainer ofanimal feed(cattle cake
make from flour) (bulk orbags)UnitVt. 21.024
d) 20'fullloaded ofrice-bag orsugar-bag UnitVt. 25.227
e) 20'fullloaded offlour bag UnitVt. 22.425
Other fullContainers
General cargo tariff with50percentrebate, calculated ontheoutside volume ofthecontainer.
Empty Containers (Seegeneral instructions)
4c/mornetted side UnitVt. 1.243
8'ornetted sides UnitVt. 2.489
10' UnitVt. 3.731
20' UnitVt. 6.221
30' UnitVt. 8.710
Empty Cattle Boxes orBarestalls
.c/m Vt. 227WT/ACC/VUT/4
Page20
DESCRIPTION OF
MERCHANDISEBASIS OF
CHARGESTARIFF
(VT)
Heavy Lifts
Anypackage ofaunitweight of2Toroverwillbecharged attherateapplicable totheir
category, andasurtax added asunder, applicable ontonnage unitgross weight:
* From 2to3tons Vt. 230
* From 3to5tons Vt. 703
* From 5to8tons Vt. 977
* From 8to20tons Vt. 1.251
* Above 20tons, price tobediscussed withtheclient. However, palletised goods of
2tonsand2,5tons, unitweight, willnotbesubject tothissurtax.
Returning Empty Pallets (Australia) Vt. 64
Stevedoring Pallets Vt. 154
Special Cases
1. Refrigerated orfrozen goods, willbeheldatthecustomers disposal within 2hours after
theirunloading.
2. Cement thestevedore mayeither require thecustomers ofthecement toremove it
immediately, orhaveitremoved onthecustomers behalf athiscost.
3. Byagreement withtheCustoms Department, theDirector ofthePort, mayauthorize
theimmediate removal ofparticular lotsofmerchandise.
23. Itisnoted thattheprimary purpose ofVanuatu 'stariff structure isrevenue collection,
while industry protection asameans tosupport import substitution isasecondary goal(pp.10-11).
IsVanuatu considering anydegree oftrade liberalisation inrespect ofitscurrent focus onimport
substitution?
Vanuatu 'smanufacturing baseisverylimited. Inmyview ofthis,theefficiency ofsuch
industries hastobemeasured byexposing iteventually tooutside competition.
Andyes,Vanuatu willconsider some degree intrade liberalisation vis-à-vis theimport
substitution policy.
24. Could Vanuatu describe indetail theproduct coverage andnature ofthevariable import
duties which arecurrently imposed? Inthecaseofcombination tariffs (advalorem withhigher
specific duty rates), howdoes Vanuatu determine which duty isapplied? Forexample, isit
"whichever isthehigher"?
Please refertotheVanuatu Customs tariffschedule (question 20above) which covers products
andnature ofimport duties currently imposed. There arenocombination tariffs.
25. Does Vanuatu intend toreplace anyofitsspecific rates withadvalorem equivalents?
No,because ofthevaluation problems concerning certain product, therearecertain items where
itisrequired toreplace theratesofad-valorem tospecific ratesequivalent toguarantee revenue receipts.
26. What isthenature ofthe5percent tax(p.11) which actsasanimport surcharge? Why
isitcharged? What service doesitcover? How wasthequantum determined?WT/ACC/VUT/4
Page21
The5percentservice taxistocover thecostofanyservices provided bytheGovernment
authority asaresult ofimport services provided. Itisperceived, correctly, asanother import tariff.
27. CouldVanuatuprovidedetailsoftheimportchargesappliedbyportauthorities,stevedoring
companies andtransit shedoperators (p.14)?
Please findattached Ports duesfeesandcharges which aregovernment charges andIfiraWharf
andStevedoring Tariffs. These arenotimport charges. Theimport charges arecollected byCustoms
asimport dutyandtaxes.
28. What doestheadditional 2percentimport surcharge ongoods imported forretail or
wholesale purposes cover (p.14)?
Asindicated earlier there arenocorporate income taxes (other thanonrental income arising
inVanuatu), nocapital gains taxes, gift,estate ordeath duties forresidents ornonresidents.
Themain source ofrevenue arecustoms duties, a10percenttaxontheturnover ofhotels
andrestaurants, rental income taxandlicence feeforlocalbusinesses.
The2.5percent(not2percent)isalicencefeeforimportationforretailorwholesale.Business
Licence feesrequire thattoimport forretail andwholesale, thisfeemust bepaid. (please notethat
atthistimeofwriting this,plans areunder waytodelete thispartofthebusiness licence fees).
(e) Tariff Preferences
29. Please provide theWorking Party withacopyofthetext(s) oftheMelanesian Spearhead
Group Trade Agreement(s)?
MSG Agreement isattached
30. Isitintended tocreate asingle freetrade areabetween theparticipants totheAgreements,
oraretheytobeviewed assixbilateral agreements?
TheMelanesian Spearhead Group (MSG) Trade Agreement ratified since September of1994
tofacilitate thefreeflow ofgoods andservices between themember Governments ofPapua NewGuinea,
Solomon Islands andVanuatu.
Therationale behind theMSG Agreement isbasically isthatthethreecountries ofPapua New
Guinea, Solomon Islands andVanuatu faced similar economic anddevelopment problems -deficits
intheirterms ofmerchandise trade, limited production capabilities stemming fromtheirrelatively small
domestic markets andrestricted export capabilities.
TheMelanesian Spearhead Group Trade Agreement isdesigned basically toaddress thechronic
balance oftrade inexports cemons andbetween themember countries andisintended tocreate afree
trade areaonlyandbetween thecontracting parties.
TheAgreement provides asound basis forlongtermeconomic development inencouraging
private sector participation insustaining exports ofmerchandise andmanufactured tradetotherespective
markets ofdutyfreeratesandonacontinued basis.WT/ACC/VUT/4
Page22
TheAgreement asitis,isconsistent andcompatible toGATT Article XXIV onRegional
Economic Integration andpastresults haveconfirmed theneedforoutward looking policies toprovide
aconduct forexport lidgrowth andoptimal utilisation ofresources.
Given thenature oftheAgreement, special provisions arealsoprovided forannual reviews
andconsultation between thecontracting parties withtheview ofimproving thecoverage ofthe
Agreement anddiscuss anddeliberate onareas where byeachparty maybefacing some setbacks.
31. When willthefulllistofproducts (Schedule 1oftheAgreement) besubject toDuty-Free
treatment?
Allthreesignatories oftheAgreement under itsexisting framework havesuccessfully ratified
theAgreement especially schedule 1onlistsofproducts having thecomparative advantage fortrade
andphysical trade inexports andimports hadstarted toflowwithin thethree countries.
Since theratification process, allparties totheAgreement arenowenjoying fulldutyfreestatus
andprivileges intheprocess ofexport andimport trade.
ThetextoftheAgreement covering theadditional products isnowbeing gazetted andhasfull
legalrecognition under Vanuatu Laws.
32. Itisnotclear howtheMSG Agreement isconsistent withArticle XXIV ofGATT 1994.
Please provide afulljustification forthisassertion.
TheMelanesian Spearhead Group Agreement (MSG) isbyfarthemosteffective andpractical
instruction within thesub-regional groupings toseriously address trade andexport problems being
encountered bytheisland State, intheirattempts topenetrate niche markets.
Itmust benoted thattheMSG Agreement notonlycovers trade andeconomic cooperation
asthere isalsoinplace aseparate Agreement inrespect toAirServices Arrangements, Education,
Training andHuman Resource Development, andveryrecently issues oftrade-in-services including
baking, telecommunication, shipping andtourism nowfeaturing prominently intheMSG Agenda.
TheMelanesian Spearhead Group (MSG) Trade Agreement includes inprinciple allofthekey
provision andarticles asstipulated inGATT Articles andisconsistent withArticle XXIV oftheGATT
Agreement.
Inconfirming thattheMSG Agreement isinlinewithGATT Article XXIV, itisimportant
tonotethatamongst otherthings, theMSG Agreement includes specific provisions andarticle pertaining
totheMostFavoured Nation (MFN) treatment. Quantitative Import andExport restrictions, apreamble
pronouncing thedesire oftheparties andother related aspects.
Byitsnatural, theMSG Agreement provides some degree oftradepreferences tobothSolomon
Islands andPapua NewGuinea andcould beasserted tobeinconsistent withtheMost Favoured Nation
(MFN)principleofGATTArticle1,howeverwhilstcontemplatingtheMSGAgreement,thecontracting
parties were oftheviewthatanexception totheMFN treatment isallowed byArticle XXIV inthe
caseofencouraging freetradeandother interim arrangements leading tothefreedom oftradebetween
contracting parties.WT/ACC/VUT/4
Page23
Inestablishingthisexceptions,andproofingthatthepresentMSGAgreementisGATTconsistent,
Article XXIsetsoutanumber ofconditions which alsoiscontained intheAgreement which iseffect
attempts toensure thatasignificant level ofliberalization hasinfacttaken place asaresult ofthe
formation oftheMSG Agreement orsub-regional trading arrangement. Themost important and
significant ofthese conditions are:
- Thethree countries ofPapua NewGuinea, Solomon Islands andVanuatu whilst deciding to
enter intoafree-trade areaarerequired tonotify eachparty oftheir intentions providing
information toenable them tomake reports andrecommendations toeachparty astheymay
decide appropriate.
- TheMSG Agreement hasthescope tocover Substantially allTrade" between member countries
including areas ofservices, andagriculture (Article XXIV :5c).
- "Each party totheAgreement shalltakereasonable measures asmaybeavailable toittoensure
observance oftheprovision oftheAgreement bytheNational andRegional Government
Authorities within itsTerritory Article XXIV :12).
Inlightoftheabove justifications itisclearthattheMSG Agreement inGATT consistent as
most oftheprinciples andArticles ofthesaidAgreement areinlinewithanyother interest Trade
Agreements.
33. Does Vanuatu provide anypreferential access outside theMelanesian Spearhead Group
Trade Agreement (P.16)?
No.Vanuatudoesnotprovideanypreferentialaccesstogoodsoriginatingfromanyothercountry
besides signatories totheMSG however, theSPARTECA Agreement allows onanonreciprocal basis
forgoods originating fromPacific Island Countries, likeVanuatu enter boththeAustralian andNew
Zealand markets hadconcessionary ordutyfreebasis only.
34. When isVanuatu expected tocommence exporting products other thenBeefunder the
MSG Trade Agreement (P.16). How willexports ofsuchproducts benefit theeconomy?
Since theratification oftheAgreement lastSeptember of1995 andwiththelistofadditional
products asagreed andendorsed lastAugust attheLeader Summit, aMinisterial Order hasbeenissued
bytheMinister responsible forCustoms withaviewthatadditional products contained intheschedule
betraded dutyfreewithin amongst Solomon Islands, Papua NewGuinea andVanuatu.
ForVanuatu wehavesuccessfully exported canned beef,ice-cream bothtotheSolomon Islands
andPapua NewGuinea during thepasttwomonths.
How willexports ofsuchproducts benefit theeconomy?
Bysecuring additional niche markets within theMSG States, additional employment iscreated
within themanufacturing sector tocomplement thedemand oftheservices which alsogenerates extra
revenue paidtotheVanuatu Government interms ofexport levies andforeign earnings through invisible
transactions.
Generally withtheincrease inexports therewillbeanatural increase andimprovement inthe
Vanuatu 'sbalance trade.WT/ACC/VUT/4
Page24
35. What aretherights andlegitimate expectations ofinvestors toobtain renewals oftheir
residency permits intheannual renewal process?
Long termwork permit willremain valid foraslongastherequisite feesarepaidandthe
enterprise retains itsbusiness licence andmaintains theextent ofrealinvestment, employment orexport
earnings against which thepermits were issued.
Incases where anemployer wishes toretain theservices ofanyemployee towhom awork
permit hasbeenissued, therenewal/extension would normally begranted onlyifaNi-Vanuatu ofthe
requisite experience/professional qualification isstillnotavailable.
36. CouldVanuatuprovidedetailsofanydrawbackconcessions,abatementsorotherconcessions
which areprovided toimporters?
Nodutydrawback.
(f) Nontariff measures, quotas andlicensing system
37. Please state (Inpercentage terms andinvalue terms) thecontribution toCentral
Government revenue which isprovided byimport duties andimport andexport licensing fees.
Contribution toVanuatu Government 1995 revenue which isprovided by:
vt.Value %ofGovt. revenue
Import Duties 2,774,000,000 46.6%
Import licensing 227,508,000 3.8%
(under theBusiness Act)
Export licensing fee 2,000,000 0,03%
(under theBusiness
Licence Act)
Export Duties 85,000,000 1.90%
38. Please provide acopyoftherulesinforce relating toanyprohibitions, quotas andlicensing
affecting imports, including theBusiness Licence ActandtheImport ofGoods Control Act.
TheBusiness Licence Actisavailable intheSecretariat (Accessions Division, Room 1132)
forconsultation.
39. Please provide acomplete listofalltheproducts subject toprohibitions, quotas orlicensing
affecting imports.
Listofproducts subject toprohibitions:
- Dangerous drugs;
- Obscene publications andmaterials;
- Airand/or gasrifles andpistols, andwarweapons.WT/ACC/VUT/4
Page25
Products subject torestrictions:
- Allimporter importing goods forretail orwholesale havetohaveabusiness licence
toimport,
- Products subject tolicensing restriction under theImport ofgoods (Control) Actare:
(a) "T"shirts andsinglets bearing aVanuatu motif orlogo;
(b) Rice, flour, canned mackerel, sugar andtobacco products;
(c) Potatoes.
40. Does theGovernment haveanyplans toremove theimport restrictions currently inplace
(pp.6-7)? What would betheimmediate effect ontheeconomy ifsuchplans were implemented?
What kindofprogress ontheremoval ofimport restrictions doestheGovernment envisage in
theevent ofVanuatu 'saccession totheWTO?
Thequestion concerning import restrictions istoobroad atthisstage, however ifthequestion
onimport restrictions refers toimport dutythenitispartofgovernment plantoremove import duties.
TheGovernment hasinfactplans toremove import duties oncapital goods entering Vanuatu
under chapters 84to90(inclusive) oftheCustoms Tariff Schedule which willbeattheflatrateof
[5percent].
Shortly,theexistingsystemofimportdutiesexemptionswillbephasedoutby[December1996].
Interms ofimmediate effect ontheeconomy, thegovernment taxrevenue willbereduced
heavily which makes upabout 66percentoftaxrevenue. Thisisareduction onrevenue forthe
Government which isanimmediate effect. however a4percentturnover taxhasbeenimposed as
from January 1995, assource ofrevenue towards theremoval oftaxes onimports.
TheGovernmentplansonremovalofimportrestrictions,isthereforeinlinewithWTOaccession.
41. Arethere anyplans forliberalising therestrictions onpotatoes, rice,sugar, flour, canned
mackerel andtobacco products?
Withpotatoes therearenoobligations toitsrestrictions notoitsliberalization. Forrice,sugar,
flour, canned mackerel plusother tinfishandtobacco products, currently thereare37active licensing
importers which inessence hasbeenliberalised.
42. Areimport licences granted automatically (pp.67,14,18)?
Importlicencesarenotgrantedautomatically.Fornon-citizensforexample,theyneedtocomply
withresident permit requirements before animport licence (which isrequired forretail orwholesale
purpose) canbegranted.
43. Could Vanuatu clarify thebasis forbeing granted animport licence bytheMinister of
Finance (p.18)? Does aright ofappeal existinrelation totheMinister 'sdecisions?
Forcitizens theMinister ofFinance maygrant theimport licence without anyprerequisite.WT/ACC/VUT/4
Page26
Non-citizens must however comply withresident permit requirement. Although thisisnot
required under theBusiness Licence Act,theVanuatu Government hasimposed apolicy ofensuring
thatnon-citizensmustcomplywithresidenceandworkpermitregulationsbeforesubmittinganapplication
forthislicence.
Afurther prerequisite under theBusiness Licence Actisthatanimport licence (asallother
licences under theBusiness Licences Act), iftrading under aname other thanthecompany name or
persons name, registration ofthebusiness name must bemade.
TheBusiness Licence Actdoesnotprovide forarightofappeal. Should anappeal bemade,
proceedings would havetobeinstituted atthecourts.
44. Does Vanuatu apply anyimport orexport quotas? Ifso,howaretheyadministrated?
TheRepublic ofVanuatu doesnotapply anyimport orquotas.
45. Vanuatu states thatlicensing isintended torestrict thequantity ofimports (p.19). What
products arecovered bysuchlicensing? Atwhatlevelareimports setforrice,sugar, flour, tobacco
products andcanned mackerel?
Itisinfactincorrecttosaythatlicensingisintendedtorestrictthequantityofimports.Therefore
nosuchquantitative licensing restrictions areenforced. Noimport levels aresetforrice,sugar, flour
tobacco products andcanned mackerel.
46. Pleaseprovidedetailsofrecentchangesintheimportlicensingregimereferredtoonpage19
oftheMemorandum.
Norecent changes havebeenmade.
47. Could Vanuatu provide adetailed description oftherestrictions which apply toimports
ofright hand drive motor vehicles?
Vanuatu traffic regulations permit driving ontherightsideoftheroad. Arighthaddrivevehicle
isinahigher riskofaccidents onsuchatraffic system. Acopyoftherestriction isenclosed.
48. Arethere anyimport monopolies?
No.
49. Isthere alinkbetween thegranting ofwork permits, residency permits andbusiness
licences, suchthatthegranting ofabusiness licence orwork permit alsoentails anentitlement
toaresidency permit?
There isalinkbetween granting ofwork permit, residency permit andbusiness licence. This
requires thebusiness promoter/applicant toproceed inacertain manner toobtain these permits.
Under thepresent lawtheMinister ofFinance hasthesolerighttoapprove allbusiness licences
forbusiness establishment inVanuatu, although general business establishment intheother Provinces
areapproved bytheprovinces themselves. However, allmajor projects willrequire theapproval of
theMinister ofFinance forthebusiness licence, irrespective ofwhere theseprojects arelocated. ThereWT/ACC/VUT/4
Page27
isexception tothisrulehowever, when theinvestor isinvolved inanagricultural project which does
notrequire anybusiness licence although residence permit andwork permit willstillbeneeded.
Prior toapplying forabusiness licence, theMinister ofFinance requires thatalldocuments
relating totheresidency application havebeenprocessed andapproved bytheconcerned authority,
theImmigration Department. Only thenabusiness licence application issubmitted forconsideration
bytheMinister ofFinance which mustshow evidence thataresidency permit hasbeengranted tothe
applicant andthestatus istoinvest inthecountry.
Work permits areusually granted aftertheresidency permits havebeenapproved foraforeign
entrepreneur orworker.
Forforeigninvestors,workpermitmaybeexemptedforthemselvesuponrequestbutcompulsory
forallforeign workers.
Atthetimeofwriting, work isbeing made torevise these procedures andthelegislation to
ensure foreign investors arecomfortable withtheprocedure anditisstraight forward tounderstand.
ItisalsotheaimoftheGovernment toensure thatthere isminimal involvement andother
logistic requirements onthepartoftheinvestor seeking toestablish business inVanuatu. Thiswill
entail establishing a"One-Stop-Centre" where allbusiness licence applications willgotoandwhere
itisexpected thatallpermits relating toresidency, business licence andwork permit willbeprocessed
andapproved, thusalleviating theneedforapplicant tovisitsomany other Government authorities
forthesame purpose asthecaseisnow.
(j) Standards andcertification
50. Given thenostandards andcertification code isapplied inVanuatu (p.19), howare
standards established inVanuatu, andbywhom? Towhat extent arestandard based on
international standards?
Standards arebased oninternational standards thathavebeendeveloped byFAO. Refer to
Question 53.
(k) Sanitary andPhytosanitary measures
51. WhatproductsareprohibitedunderVanuatu'ssanitaryandphytosanitarymeasures(p.19)?
Forwhat reason?
Refer tocopyofprohibited items toVanuatu available intheSecretariat forconsultation.
52. Does Vanuatu carry outpreshipment inspection ofimports?
Vanuatudoesnotcarryoutpreshipmentinspectionofimportssincewedonothavelargevolumes
visits items andalsonofinancial support. Preshipment inspection ofimports isabetter system in
quarantine usually carried bydeveloped countries whohavelarge import ofriskitems andresources.
53. Please giveinformation onthestandards, guidelines orrecommendations onwhich
Vanuatu 'ssanitary andphytosanitary measures arebased.WT/ACC/VUT/4
Page28
Thestandards andguidelines onVanuatu 'sphytosanitary measures arebased oninternational
standardsthathavebeendevelopedbyFAO.TheVanuatuAgricultureSecurityProjectwillbereviewing
thesestandards andIwould notbesurprised ifVanuatu mayleantowards theNewZealand standards.
These standards havethesame corecontents butslightly differ tomeetwonspecific condition.
54. Please givesome further information ontherelevant control, inspection andapproval
procedures.
Inspection isdone bytrained quarantine staffandapproval ofprocedures aremade bythe
Director ofAgriculture andthePrincipal Plant Protection Officer. Once again thiswould belooked
atbytheconsultants oftheVanuatu Agriculture Security Project (VASP).
7. Safeguards, Anti-Dumping andCountervailing Duties
55. Please indicate whether Vanuatu haslegislation which would provide fortheimposition
ofsafeguard measures, anti-dumping duties orcountervailing duties.
No
B. OTHER POLICIES AFFECTING FOREIGN TRADE (pp.20-27)
1. Industrial Policy
56. What industries does theGovernment plan toencourage tomeet itsindustrial policy
objectives (pp.20-21)? What incentives doestheGovernment offertoforeign anddomestic investors
tocommence operating inthose industries?
Thepolicy objectives oftheGovernment intheareaofindustrial development revolves around
theutilisation oflocally available natural resources:
(a) Natural Forest Resources:
(i) Vanuatu hasbeensuccessful tosome extent indeveloping theForest Sector although major
improvement areyettoachieved Thedown-stream processing toaddmorevalue totheresource
isthenextstepwewanttoachieve. Presently thissector isperhaps better developed compared
totheother resource uses.
(ii) There arequiteanumber ofrainforest nutswhich grow mostly inthejungle which aregaining
popularity inthedomestic market. Present experiments onhowtopreserve these nutsare
going onwellandearly indications arethatthese nutshavespecial properties which maybe
better substitutes forwellknown nutssuchasMacadamia, ground nutsetc...intheinternational
markets. Thisisalsoanareawewould liketoseeiffurther developed.
(b) Agriculture Crops:
Vanuatu having generally ahighcoststructure willnotcompete successfully ontheinternational
markets withitsnumerous agro-products butwould adapt aselective approach inthefuture development
ofitsAgricultureresources.OthercashwhicharegainingincreasepopularityareKava,Vanilla,Pepper.
Besides there areanumber ofcrops which willbepursued aftersatisfactory assessment ascertaining
theirpotential forexport intoother markets.WT/ACC/VUT/4
Page29
(c) Marine Resources:
Veryrecently,theGovernmentownedNataiFishMarketwasprivatisedwhichsawanimmediate
improvement interms ofservices andquality ofproduct including improved facilities forfuture
expansion.
Although thisprincipally aimatmeeting thedomestic needs, itistheaimtoensure sufficient
expertise isestablish togetourfishintotheoff-shore markets.
Although there arenocanning facilities yetinVanuatu, itisouraimtoestablish suchif
economies ofsuchfacilities areproved financially viable.
(d) Mineral Resources:
TheGovernment willbekeentoseeprocessing ofanyamount ofmineral resources taking
place locally adding value etc...provided certain requirements areadhered to.These include theeffect
onenvironment andifsuchoperation willbetechnically feasible especially inviewofeconomies of
scale etc....
Intheshortterm, theGovernment willencourage anyinvestment application intheabove areas
whichcontributedpositivelyinvalueaddition,createemployment,accesstonewefficientandappropriate
technology toachieve maximum economic, financial andsocial benefits forthenation.
Incentives:
TheGovernment hasextended arange ofrelief assistance toindustries which manufacture
products bothforthedomestic andexport markets. There willbeincrease assistance toindustries
which export most oftheirproduction output. Therange ofhelpinclude -dutyrelief inimports of
capital equipment, rawmaterials, packaging, advertising materials etc...
ItwillbetheaimoftheGovernment todetermine additional incentives forindustries generally
andespecially forthose which create highvalue addition from locally available resources.
2. Agricultural Policy (seealsoquestions 4,5,8,9, 41,and 45)
57. Could Vanuatu provide details ofthedomestic support policies which areusedtoimplement
itsobjectives fortheagricultural sector (p.21)? Inparticular, wewould appreciate details ofthe
domesticsubsidiesprovidedthroughtheBusinessLicenceCommitteetoassistagriculturalproducers
andsmall holders inthecommercial endeavours (p.21). Wewould alsoappreciate details ofthe
administrationofthespecialexemptionsaccordedtoagriculturalprojectshavingspecialmagnitudes
bytheCustoms andTaxes authorities (p.22) andofthearrangements toassist special mid-term
agricultural projects.
Domestic support policies
Copra
TheVanuatu Commodities Marketing Board (VCMB), subsidies inputs andprices.WT/ACC/VUT/4
Page30
Cocoa
TheVCMB isthesoleagent forpurchase andexport.
Coffee
Allsmallholder coffee issoled totheTanna Coffee Development Company (TCDC). The
Government subsidies theprice paidtothesmallholder by5vt/kg. Government policy in1994. was
toprovide freeplanting materials.
Assuming 15vt/seedling, 5,500 seedlings/ha anddistributing of4ha/annum for3years the
Department must obtain finance of600,000 VT.
Afeasibility study isunder wayforaproject toassist smallholder toobtain small hulling
machines.
Kava
Freemarket environment prevails
Domestic subsidies through theBusiness Licence Committee
Duetotimeconstraint forthisreport information isunavailable.
Special exemption (Custom andTaxes authorities), foragriculture project andspecial mid-term projects.
Asfor1.5
58. Please specify measures taken orplanned toexpand anddiversify export cropproduction
Measures taken orplanned toexpand export cropproduction are:
- freeseedlings andbulls tofarmers sponsored bytheMinistry ofAgriculture;
- establishment andstrengthening oftheExtension System oftheDepartment of
Agriculture;
- encouragement ofjointventure projects;
- VCMB Education Tours intheislands totalktofarmers;
- fortnightly radio programme byVCMB toeducate farmers;
- creation ofCommittees bytheGovernment toencourage newcropproductions;
- neworganisational structure ofoperation toassist exportation ofnewcrops introduced.
59. Please givedetails ofthespecial incentives offered bytheGovernment through theBusiness
LicenceCommitteeandtheCustomsDepartmenttoassistagriculturalproducersandsmallholders.
Newincentives are:
- reduction ofexport duties
(a) There arenoexport subsidies
(b) VCMB roleinstabilising prices ofcopra andcocoa.WT/ACC/VUT/4
Page31
60. Please notify allagricultural import measures domestic support measures andexport
subsidies.
(a) There arenoexport subsidies.
(b) VCMB roleinstabilising prices ofcopra andcocoa.
3. Financial, Budgetary andFiscal Policy
61. What method isusedtoprepare themanual budget foreachGovernment Department?
EveryfinancialyeartheDepartmentHeadwillhavetopreparetheirexpenditurebudgetestimates.
Thisbudget estimates must beconsistent withNational Government Budget Policy.
Forinstance, theGovernment Budget policy isBalance Budget andRecurrent Budget. The
budget Committee willthenanalyzed thisBudget Estimate, Whether toapprove orasked theDepartment
toreview theirBudget Estimates again bareinmind theGovernment Budget Policy.
62. Itisindicated that, although there aregenerally norestrictions onforeign investment,
exclusions canoccur forcertain small scale business viareservation ofsmall business activities
fornationals ofVanuatu (p.24). Arethere anysmall scale businesses intheservices sector from
which foreign nationals areexcluded because theyarereserved fornationals ofVanuatu? Could
theoperation andsectoral incidence ofsuchexclusion andthecriteria usedbydescribed indetail?
Inviewofthepresent policy onbusiness andinvestment, Iattach foryourconsideration (4)
fourgood copies eachoftheBusiness Licence Orders which includes anOrder tolocalise Business
Licence categories B16(c) andB16(d) andanOrder toamend Order No.79of1983.
5. Foreign andDomestic Investment Policy
63. Could Vanuatu describe indetail theoperation andadministration oftheVanuatu
Commodities Marketing Board (VCMB) withparticular reference toitsprice stabilisation scheme?
What istheleveloftheaggregate subsidy foragricultural products ineachyearofoperation?
Arethese export subsidies?
What isthetotalcostofadministering theactivities oftheBoard ineachyearofoperation
asapercentage ofitssales revenue, andhowarethese costs met? Could Vanuatu provide
information ontheprices paidtoproducers andstock levels ofthecommodities foreachyear?
(i) TheVanuatu Commodities Marketing Board (VCMB) isaStatutory Body established byan
ActofParliament andisresponsible forthree prescribed commodities, viz:copra, cocoa andkava.
Forallcommodities theBoard isbestowed withtheresponsibility to:
(a) secure themostfavourable arrangement fortheirpurchases, sales, grading andexports;
(b) purchase locally andexport thecommodities;
(c) develop ortoassist intheirdevelopments inthecountry including theirmanufacturers
andprocessing arerelated products, forthebenefit andprosperity oftheindustries;
(d) stabilise theirprices paidlocally.WT/ACC/VUT/4
Page32
(ii) Thepricestabilisation scheme functions inamanner thatwhen world prices oftheprescribed
commodities arehigh, theBoard doesnotpassonthefullprice increase butinstead retains ittobuild
upitsreserves andwhen theworld price declines theBoard usestheretained funds (reserves) topay
ahigher price tothefarmer thatwhattheprevailing world price level.
(iii) Thelevel ofsubsidies varies eachyear, however forthelasttwoyears 1994 and1995, no
subsidies were provided.
(iv) Producer subsidy isnotanExport Subsidy.
(v) TheAdministrative cost, oftheBoard eachyearismetfrom itsownfunds generated from
itstrading. Thetotalcostofadministrative asapercentage oftotalsalesrevenue around.
(vi) Prices andstock/production levels eachyearsee(annex A&B).
64. What percentage oftheGovernment 'stotalrevenues isthelevelofitsannual subsidy to
theVanuatu Commodities Marketing Board (VCMB) (p.26)? What plans doestheGovernment
havetoeliminate theVCMB 'sdependence ongovernment subsides (p.26)? When istheelimination
ofdependence onsubsidisation expected tobecomplete? Isthere aprocess ormechanism tooversee
theelimination ofthissubsidy?
(i) PercentageofGovernmentsubsidytototalGovernmentrevenue-AskDept.ofFinanceMinistry
ofFinance
(ii) Plans toeliminate Government subsidy/dependence ofVCMB onGovernment:
(a) Encourage down stream processing within thecoconut industry inparticular butalso
fortheother commodity industries aswell;
(b) Manage andoperate theVCMB onamore commercial footing;
(c) Moreaggressivesales/marketingofthecommoditiestoensurehigherpricesascompared
topassive marketing.
(iii) Since 1994 -Nofunding from theGovernment totheVCMB todate.
65. Could Vanuatu provide information about itssubsidy policies, other thanthose relating
theactivities oftheVanuatu Commodities Marketing Board?
Apart from VCMB there arenoGovernment subsidy policies inplaced.
66. What isfinancial position oftheVanuatu Commodities Marketing Board?
Confidential
6. Government Procurement
67. Aretheprocurement procedures which areoutlined (p.24) followed rigorously inevery
case? Isthere anaccountability mechanism toensure thattheyarefollowed? Isanappeals
mechanism available?WT/ACC/VUT/4
Page33
Theprocurement procedures outlined intheFinancial Regulations should befollowed inevery
case. TheAuditor General, andwhere appropriate, theOmbudsman, arethemechanisms forensuring
accountability. TheRegulations donotprovide forappeal.
68. Does Vanuatu plantoaccede totheAgreement onGovernment Procurement? Ifnot,
could Vanuatu explain itsreasons?
Theresponse tothisquestion isoutside theambit ofFinance Department.
69. Could acopy oftheGuidelines forGovernment Procurement (Chapter 22,Regulations
361and368oftheFinancial Regulations oftheRepublic ofVanuatu) beprovided?
Copy isattached.
70. What arethereasons theprocurement hastobemade through theGovernment Central
Store where possible? Doother preference schemes (e.g.forlocal suppliers) orrules stipulating
offsets exits?
Procurement through Government Stores offers thefollowing benefits:
(a) Thebulkpurchasing capacity andcostpluspricing ofStores ensures costefficiency;
(b) Such procurement reduces thelikelihood ofevasion oftheRegulations.
Noother preference schemes oroffsets exist.
71. Howarethe"circumstances deemed necessary bytheMinister ofFinance" forthevariation
oftheprocurement procedure defined?
Nofurther definition exists. Weareoftheopinion theMinister would consider anyapplication
forvariation onthemerits ofeachindividual case, andwould approve onlywhere thenature ofthe
purchase issuchthattheRegulations cannotbefollowed, where tenders donotreflect known prices,
orwhere theoutcome offollowing theRegulations would damage Government objectives.
72. Does aprocedure forthequalification ofsuppliers ordopermanent listsofqualified
suppliers exist?
Theonlyrequirement isthatadomestic supplier holds avalid Business Licence authorising
them toconduct business inVanuatu.
73. Arestatistics available showing thesizeofthepublic procurement market asaproportion
oftotaleconomy; therelation ofpurchases withtheGovernment Central Store topurchases with
other suppliers; thenumber ofunsuccessful tendering procedures (since theGovernment isnot
bound toaccept anytender) orabreakdown oftheprocurement procedures used?
TheDepartment doesnotpossess suchstatistics.
74. What isusually "themethod deemed appropriate 'fornotices? What istheusual means
ofcommunication (e.g.anofficial gazette).WT/ACC/VUT/4
Page34
Themethod deemed appropriate isusually advertisement inthenational press. Forlargetenders
radio announcements maybeused. Information inthenational press istheusual means of
communication.
75. Doplans existtoextend theminimum timeof2weeks fornotices ofinvitation totender?
Theregulation states "atleasttwoweeks". There isnoplantoextend thisperiod determination
oftheappropriate notice period restswiththetender board.
76. Dochallenge ordispute settlement procedures exits?
NotintheFinancial Regulations. Aggrieved individuals orcompanies would havetolook
tothejudicial system fordispute settlement.
7. State-trading Enterprises
77. Could Vanuatu provide details oftheoperations oftheState trading enterprises operating
inVanuatu (p.26), withparticular reference totheir rules ofoperation inrespect ofpurchases
andsales?
AllState trading enterprises operating intheRepublic ofVanuatu areencouraged tomake
purchasesorsalessolelyinaccordancewithcommercialconsiderations.That,istointroducecompetition
intomarkets andtoincrease efficiency forpublic enterprises, promoting Government policy forfree
enterprises.
78. Please provide afulllistofthe25enterprises referred tointhissection, listing the
percentage Government share holding.
ENTERPRISES PERCENTAGE OFGOVT.
SHAREHOLDING.
1. Development Bank ofVanuatu 100(%)
2. Reserve Bank ofVanuatu 100
3. National Bank ofVanuatu 100
4. AirVanuatu Limited 100
5. AirVanuatu (operations) Ltd 100
6. Vanuatu Internal AirServices 100
(Vanair) Ltd
7. Vanuatu Livestock Development Ltd 100
8. South Pacific Fishing Company Ltd 100
9. Vanuatu Holdings Ltd 100
10. Vanuatu Commodities Marketing 100
Board (VCMB)
11. Vanuatu abattoirs Ltd hadinterest
12. PortVilaFisheries Ltd hadinterest
13. Tanna Coffee Development Co.Ltd hadinterest
14. Metenesel Estates Ltd hadinterest
15. Bel-Mol Cattle Co.Ltd hadinterest
16. Vanuatu Brewery Ltd hadinterest
17. South Santo Cattle Project hadinterestWT/ACC/VUT/4
Page35
18. Banque D'Hawaii (Vanuatu) Ltd(sold 1995)
19. Telecom Vanuatu Ltd 33.3
20. Tour Vanuatu Ltd hadinterest
ENTERPRISES PERCENTAGE OFGOVT.
HAVE HOLD PNG
21. TheMelanesian Shipping hadinterest
Services
22. TheAsian Paints hadinterest
23. TheSanto OilMill hadinterest
24. IfiraGeneral Services Ltd hadinterest
25. IfiraWharf &Stevedoring Ltd hadinterest
79. Please provide details oftheexclusive orspecial rights orprivileges including monopoly
rights, particularly trading rights, which have been granted toeachofthese enterprises.
Vanuatu Government doesnotprovide exclusive orspecial rights orprivileges toanyofthese
enterprises asitwants topromote freeenterprises.
80. What isthepercentage totalcovered bythese enterprises? What percentage oftotalimports
andexports iscovered byproducts where monopoly rights exist? What percentage iscovered
byother trade?
Likequestion 79above theVanuatu Government doesnotinplace legislation limiting Trade
forthese enterprises, notatthisstages ofdevelopment.
8. Free-Trade Zones
81. Does theGovernment plantogoahead withthefreeeconomic zones" (p.26)? How will
theydiffer from the"free-trade zones" (p.26)?
In1992 and1993 theVanuatu Government hasembark oncertain initial ground work onthe
concept ofExport Processing Zone which should bethefirststage toestablish before promoting a
"free trade zone".
Apre-feasibility study report onExport Processing Zone (EPZ) inVanuatu hasbeenprepared
withrecommendation thatshould provide sufficient information toassist theGovernment further in
deciding what typeofForeign Investment alternatives tooptfor. Inpromoting thisconcept the
GovernmentofVanuatuaimstoenhancetheforeignanddomesticprivatesector'scontributiontonational
development asstipulated intheSecond National Development Plan:
- establishment ofasound basis formedium and
- long-term investment andbusiness opportunities
- promotion oflong-term foreign investment inthemanufacturing sector.
- encouragement oflocalentrepreneurs inthedevelopment andownership ofindustrial
enterprises andparticipation inJoint Venture project withforeign investors.WT/ACC/VUT/4
Page36
Inorder toachieve these objectives, theGovernment ofVanuatu isintheprocess ofrevising
itsInvestment Actof1984. NewDevelopments in1996witness theprogress ofthe"Foreign Investment
Code" aproposed project ideaforanIndustrial Estate Commercial Centre tobeestablish.
Inprinciple, alawmustbepassed bytheVanuatu National Parliament toestablish a"freetrade
zone" asacentre toenhance external trade development andnational economic development.
Theconcepts arenotisolated indefinition since thezone offers export industries special
incentives, above alldutyfreeimport ofallgoods andaliberal regulatory environment. This
environment isusually characterised bysimple andstable investment registering andoperating rules
andaminimum orzerotaxlevel. Although referred tobymarry names, suchzoneasfreeeconomic
zoneshould allenhance promotion ofentrepreneur, bothlocalandforeign inmanufacturing importing
andprocessing under customs privileges. Bothconcepts havesome common functions withonespecial
feature ie,customs privileged facilities.
10. FreeEconomic Zones
82. Does theGovernment plantoproceed withtheplanned freetrade zones (p.26)? Under
which authority andaccording towhat rules aretheytobeoperated? Inparticular, howare
thebona fides ofpotential investors tobedetermined? What infrastructure willbeavailable to
service thezones? What industries areexpected tobeestablished?
IntheReport prepared from thepre-feasibility study theGovernment ofVanuatu hasplans
forthe"free-trade zone" tobeestablished intheSouthern partofSanto Island onanareaof
8,000 hectares.
Tofacilitate theoperations ofinternational investors anINTER-MINISTERIAL COMMITTEE
fortheManagement oftheFTZwillbeestablished bydecree ofthePrime Minister oftheGovernment
oftheRepublic ofVanuatu.
TheCommittee comprises ofrepresentatives from thefollowing authorities:
1. Ministry ofForeign Affairs, Foreign Trade andImmigration
2. Ministry ofIndustry, Trade andCommerce
3. Ministry ofEducation
4. Ministry ofHealth
5. Ministry ofLand andNatural Resources
6. Ministry ofAgriculture andFisheries
7. Ministry ofFinance
8. Ministry ofTransport andTelecommunications
9. Ministry ofJustice
10. Private Sector Representatives
11. TheChamber ofCommerce
ThisCommittee willbeempowered toresolve anddecide onallissues intheFTZ, inobservance
ofthelawsandregulations oftheRepublic ofVanuatu.
TheGovernment agency should beresponsible forpromotion, project evaluation andlicensing
ofinvestors while theprivate sectors agency responsible forthephysical development andManagement
ofthezone.WT/ACC/VUT/4
Page37
Potential investors lookforaFreeZone thatprovides:
(i) aclear picture oftheGovernment 'spolicies andrules withregard toinvestment in
thezone;
(ii) anoutline oftherights andobligations oftheinvestors;
(iii) minimum contact withGovernment agencies (ideally investors would prefer todeal
withoneorganization);
(iv) anefficient system formoving goods intoandoutofthezone.
These basic conditions forattracting foreign investment must thenexist:
1. Political andeconomic stability
2. Good transport andcommunication facilities
3. Good physical environment
4. Reliable infrastructure
5. Market Access
6. Support Services
7. Labour
8. Good organisation
9. Urban environment
10. Existing Industry
Infrastructure thatshould service thezones include:
(i) central business andcommunity facilities;
(ii) good transportation andtelecommunication;
(iii) facilities suchasportandairport;
(iv) reliable water andelectricity supply;
(v) good physical environment;
(vi) industrial development,
- warehouse;
(vii) industrial parks andfacilities;
(viii) neighbourhood andnewtown concepts:
-residential areas,
-lightmanufacturing, etc.,
-institutions.
TheIndustries thatareexpected tobeestablished should fallintothese categories:
- export processing industries;
- primary industries;
- secondary industries;
- manufacturing industries;
- service industries.
D. SERVICE REGIME (pp.28-32)
83. Does Vanuatu intend tosubmit anoffer which covers substantially access toallservices
sectors, aswellasnon-discriminatory operating conditions?WT/ACC/VUT/4
Page38
Yes.
84. Canforeigners ownland? How doesVanuatu 'ssystem oflandownership affect foreign
investment e.g.inthetourism industry?
Ofcourse Foreigners havetherighttoownland, butonlyunder theleaseholdsystem which
isgoverned bytheLand Lease ActCap163.
There arenomajor problems thatourlandtenure system could possibly impose ontheforeign
investment. Thelease holdsystem following theTorrens System hasbeenpractised successfully by
other countries.
Theminor factor thatmaybeconsidered aburden buthavebeenadopted andaccepted byall
thetourism leases inVanuatu istoimpose aSubsidiary Land Rentpayment of2to4percentofthe
gross turnovertothecustom landowners annually.
Themain problem thatweconsider tobethemajor factor affecting foreign investment will
often takeplace attheinitial stage ofNegotiations andisalways solved before theDocumentation and
theexecution ofthelease. Once theleaseisregistered thenitisgoverned bythelawsoftheRepublic
ofVanuatu.
Unlike other countries, alllandinVanuatu belongs totheindigenous citizens ofVanuatu and
theirdescendants. Vanuatu isalsoamulticultured nation andtherefore thecustomary ownership of
landisoften quite complicated. Thisoften leads todispute regarding ownership ofcustomary land
andtheircustom boundaries.
Normally thesedisputes aresolved byeither thechieves orother courts byidentifying thetrue
custom landowners before negotiation dotakeplace between them andtheinvestor.
Often theprocedures ofidentifying thecustoms landowners aretoolengthy therefore wehave
togettheconsents ofthedisputing parties sothattheMinister canactontheirbehalf asspecified in
Section 8oftheLand Reform Regulation Cap123. Thissection alsocovers areas werecustom land
ownership areheavily disputed, somuch sothattheidentification ofthetruecustom landowners is
quite impossible.
Nevertheless,asspecifiedabove,wehavemeasurestocombatthismajorproblemandItherefore
wishtoconclude thattheVanuatu system oflandownership willnoteffect foreign investment inany
wayifthecustom landowner, thevillages, communities andthenation asawhole willbebenefiting
socially andeconomically from it.Thiswillalsodepend greatly ontheimpact thedevelopment of
industry willposeontheenvironment asthecitizens ofthisnation areenvironmentally conscious.
85. Areforeign financial institutions permitted todeliver services across theborder (mode
ofdelivery 1),inparticular asregards theeconomically important sub-sectors ofMAT insurance
andreinsurance?
Yes,financial institutions arepermitted todeliver services across theborder.
86. Inparticular,Whatarethelicensingrequirementsappliedtofinancialinstitutions,domestic
andforeign?WT/ACC/VUT/4
Page39
LOCAL BANKING
- Application tooperate alocalbankinVanuatu mustbemade totheVanuatu Financial Service
Commission
- TheCommission consults withtheReserve Bank ofVanuatu.
- TheCommission makes recommendation totheMinister ofFinance.
- TheMinister ofFinance isempowered bylawtogrant abanking licence orrefuse thegrant.
- Thecapital ruleisthatthecompany musthaveapaidupissued capital andunimpaired reserves
ofVt.50million.
- Inthecaseofacompany which doeslocalbanking butwhose headoffice isoutside ofVanuatu
thecapital ruleisthecompany must haveapaidupissued capital andunimpaired reserves
ofVt.200million.
- Thecompany applies totheDepartment ofCustoms foraBusiness Licence.
EXEMPTED BANKING
- Application tooperate anexempted bankfromVanuatu ismade totheVanuatu Financial Service
Commission
- TheCommission carries outitsown"duediligence" inquiry ontheapplicants
- TheCommission makes recommendation totheMinister ofFinance
- TheMinister ofFinance decides whether abanking licence isgranted ornot
- Thecapital ruleforexempted banking isthattheCompany musthaveaminimum capitalization
ofUS$150,000.00
87. Could Vanuatu describe anylimitations which apply toforeign participation inthe
telecommunications andinternal airservices sectors (p.30)?
Telecommunications intheRepublic ofVanuatu isthesoleresponsibility ofTelecom Vanuatu
Limited (TVL). TVL isitself ajointventure between theGovernment oftheRepublic ofVanuatu,
Cable andWireless Plc(UK) andFrance Cables etRadio (France), eachholding equal shares.
Anyadditional foreign participation inTVLwould needapproval fromthethreeShareholders.
88. Itisstated thataninvestment ofgreater thatUS$50,000 entitles aperson toamuch longer
residence permit period (p.31). How doesthiswork?
Itworks wellforallserious potential investors.WT/ACC/VUT/4
Page40
89. Could Vanuatu clarify thepermit requirements applying toforeign professional practising
inVanuatu (p.31)? If,forexample, aresidence permit isrequired, whataretheprovisions aforeign
professional would need tosatisfy toobtain suchapermit?
TheGeneral Manager (orequivalent) plusoneother Senior Management ortechnical specialist
position ifthetotalinvestment isatleast[US$ 250,000), ordirect employment isofatleast[25]citizens
ofVanuatu, orannual nextexports andtothevalue of[US$ 1001000].
90. Isthere anexpectation thatafteracertain period oftimeanexpatriate withawork permit
should havetrained aNi-Vanuatu tofilltheposition? Ifso,onwhat basis isthedecision tocancel
awork permit made?
(1) With therequirement oftheLabour (Work Permits) ActCap. 187. TheCommissioner of
Labour issues awork permit annually andtospecify certain period oftimeexpatriate toholdavalid
work permit itisentirely uptotherespective employer responsibility toensure training must be
carried-out attheworkplace inorder thatanysuitably qualified citizen worker within theestablishment
tofilltheposition. Itistherequirement oftheActthattheability oftheemployer toprovide reasonable
training facilities foracitizen-worker counterpart toawork permit holder.
(2) Toconfirm nospecify timeasstated intheactthediscretion issolely fortheCommissioner
ofLabour todecide onthemerit ifandwhen theNi-Vanuatu counterpart isready totakeover.
Forconsidering ofwork permit applications, Commissioner must satisfy himself withthe
provisions ofPart(II)Section 2subsection (1)(2)(3)(4)andSection 7.
(3) Tocancel awork permit made:
(a) TheCommissioner ofLabour under theActhasnoauthority tocancel awork permit.
(b) Upon therequest oftheemployer bywriting theCommissioner shallcancel hisorher
work permit.
(c) Otherwise wewillhavetowaituntilthework permit expires.
91. Itisnoted thatatpresent there islaceoftransparency inthisissuing ofwork permits
(p.32) What action istheGovernment taking toremedy thisproblem, andwhen willittakeeffect?
(1) Since theLabour (Work Permit) Actcame intoforce in1987wehavealways, implement the
legislation effectively andwedon'tseeanylackoftransparency asyouquoted.
(2) TheDepartmenthasputforwardsomeproposedamendmentstothePrincipalActandtheLabour
Advisory Board hasapproved theamendments itsnowawaiting Council ofMinister 'sdecisions in
order tobetabled inParliament.
92. What aretherequirements fortheapproval offoreign professional qualifications bythe
Legal Practitioners Board, theMedical Practitioners Board andtheSurvey Board (p.31)? Do
accountants alsoneed toobtain suchapproval?
ThereisaMedicalPractitionerBoardwiththeMinistryandHealth'sFirstSecretaryasChairman.WT/ACC/VUT/4
Page41
Foreign practitioner applicants must bequalified orgraduate medical practitioners from
recognised institutions.
Applicants must produce documental evidence (i-ecurriculum vitae) relating totheir
qualifications.
Before amedical practitioners certificate isissued, theintending foreign practitioner mustbe
registered bytheBoard andMinistry ofHealth.
Therequirements forapproval offoreign survey professional bytheBoard isstipulated inthe
Land Surveyors ActNo.11of1994 Cap175part3andpart4copyofwhich areenclosed foryour
information.
There isnoLegal Practitioner 'sBoard butthere isaLawCouncil ofVanuatu through which
every person wishing toeither setuplawpractice ortopractise asalegalpractitioner inVanuatu must
apply.
There arethree basic qualifications required bylegalprovisions:
(a) thatevery person practising asalawyer inVanuatu bearesident.
(b) thathebealawgraduate withalawdegree fromaninstitution recognised bytheLaw
Council; and
(c) thatheundertake a2yearpost-graduate training programme inVanuatu.
Allpersons must beadmitted totheSupreme Court ofVanuatu andbearegistered legal
practitioner.
93. Does Vanuatu maintain alistofcountries towhich itaccords recognition ofeducational
qualifications orcertificate (p.31)?
Thepolicy oftheGovernment isthatforthepurpose ofdoing auditing business inVanuatu,
persons qualified frombodied ofaccountant i.e.chartered accountant bodies, fromEngland andWales,
Scotland, Ireland, Canada,, Australia, Hong Kong, USA, NewZealand andSingapore arerecognised
inVanuatu.
94. Itwould beuseful toreceive, asamatter ofinformation, adetailed description ofthe
present financial service regime?
Vanuatu hasbeenafinancial centre sincethe1970'sandsinceindependence in1980, previous
GovernmentsofVanuatuhavestatedpubliclytheirsupportforthecontinueddevelopmentofthefinancial
centre.
There isanadvantage thatVanuatu hasoveritsneighbours inthePacific Region inthat,as
oneofthelongest established financial centres, Vanuatu has:
(i) amuch broader range ofservices tooffer thanmost other jurisdictions. Vanuatu canoffer
everything fromoffshore companies andbanks toanoffshore shipping register. Most newerWT/ACC/VUT/4
Page42
jurisdictions havetoconcentrate ona"market niche" andtendtospecialise inamuch narrower
range offinancial services; and
(ii) abetter developed infrastructure offinancial services andmoreexperienced professionals within
thesector. Forexample, Vanuatu isalmost unique forafinancial sector ofitssizeinhaving
anumber oftheinternational firms ofchartered accountants based here.
Thefinancial centre comprises thedifferent industries andservices thatexistandwhich make
upthecentre. There industries andservices include..
1. Offshore banking industry;
2. Insurance industry;
3. Shipping registry;
4. Tourism industry;
5. Legal service;
6. Local banking service;
7. Accounting andauditing service;
8. Local andoffshore company incorporation service, etc.....
Thefinancial service industry ofVanuatu issupervised andregulated bytheVanuatu Financial
Services Commission (VFSC), abody, established byanactofParliament.
Therealoperators ofthefinancial services industry arethelawyers, accountants, bankers,
trustmanagers, thecompany managers, shipowners, hotel owners, thetransport operators andthe
Ni-Vanuatu employees whoareemployed within theindustry.
95. Which activities from thelistofactivities included intheAnnex onfinancial services are
currently allowed?
1. Local banking;
2. Offshore banking;
3. Insurance;
4. Local company 'sincorporation,;
5. International company incorporation;
6. Overseas andexempt company incorporation;
7. Offshore shipping registry;
8. Trust.
9. Mutual Funds andUnitTrusts;
10. Leasing, Franchising andRoyalty;
11. International Trade;
12. Registration ofbusiness names;
13. Patents andTrade Marks Registry;
14. Stamp duty; and
15. Charitable Association incorporation.
96. What istheminimum capital requested fortheestablishment ofasubsidiary? Arethere
anyrequirements withrespect toendowment capital ofbranches?
1. Forthebanking business thefollowing capital ruleapplies:WT/ACC/VUT/4
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(1) Local banking with - Paidupissued capital
headoffice in andunimpaired
Vanuatu. reserves ofVt.50million.
(2) Local banking with - Paidupissued capital
headoffice outside andunimpaired
inVanuatu. reserves ofVt.200million.
2. Fortheinsurance - Vt.30million paidtip
companies which provide share capital or
lifeassurance. Vt.30million surplus
funds ifamutual
company.
3. (1) Forthetrust - Vt.12.5million in
companies withhead cashpaidincapital.
office inVanuatu.
(2) Forthetrust - Vt.50million capital
withitsheadoffice paidupincash.
ofVanuatu.
97. Could Vanuatu provide detailed information ontheFinance Centre (type, size,number
offinancial institutions, bylawsoftheCentre, taxregime)?
Itisalways ourconsistent contention thatVanuatu isthebestfinancial centre inthePacific
inthatitisclean, reputable andstable.
Asat31.12.95 there areinexcess of2,400 companies ontheregistry attheIIFSC. While
itseemthatthisnumber isnotexcessive, thefinancial benefit thatthesecompanies provide totheVFSC
interms offeesisinexcess ofUS$3million in1995.
Vanuatu hasnotaxonincome, capital gains, corporate, networth, property, gift,sales, death
orinheritances taxes orduties.
However, there aresome form oftaxes likethehotel andrestaurant tax,thevideo tax,the
cheque taxandtaxonrentals received bylandlords.
98. DoestheGovernment plantomaintain themonopoly overstevedoring from themain wharf
heldbytheIFIRA Wharf andstevedoring Limited (p.29)?
Thestevedoring operation hasalways beenonafive(5)years contracts. Thefuture ishowever
uncertain.
99. Could Vanuatu provide greater detail onitsregulatory regime covering business (including
professional,computer,advertising,consulting,construction,educational,environmental,financial
andhealth services)?WT/ACC/VUT/4
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Asthequestion refers generally totheregulatory regime governing thestated areasweprovide
below alistofActswhich webelieve arerelevant. Wecanmake copies ofthelisted Actsuponyour
request.
A. BUSINESS/PROFESSIONAL/FINANCIAL.
1. Banking Act[Cap. 63
2. Business Licence Act[Cap. 173)
3. Reserve Bank ofVanuatu Act[Cap. 125]
4. Companies Act[Cap. 191]
5. Development Bank ofVanuatu Act[Cap. 169]
6. Insurance Act[Cap. 82]
7. International Financial Institutions Act[Cap. 134]
8. Legal Practitioners Act[Cap. 119]
9. Health Practitioners Act[Cap. 164]
10. Partnership Act[Cap. 92]
11. Public Finance Act[Cap. 117]
12. Registration ofBusiness Names Act[Cap.62]
13. Trust Companies Act[Cap. 69]
14. TheNational Commercial andTrading Bank ofVanuatu ActNo.46of1989.
15. International Business Companies ActNo.32of1992
16. Vanuatu Financial Services Commission ActNo.35of1993.
B. ADVERTISING.
1. News papers (Restriction onPublication) Act[Cap. 156]
2. Broadcasting andTelevision ActNo.3of1992.
C. DISTRIBUTION
1. Telecommunications ActNo.10of1989
2. Telecommunication Act[Cap. 153]
3. Shipping Act[Cap. 53]
4. Civil Aviation
5. Decentralization andLocal Government Regions ActNo.1of1994
D. EDUCATION
1. Administration ofSchools Act[Cap. 121]
2. Teaching Service Act[Cap. 171]
E. ENVIRONMENTAL
1. Physical Planning Act[Cap. 193]
2. Preservation ofSitesandArtifacts Act[Cap. 39]
3. Prevention ofSpread ofNoxious Weeds Act[Cap. 44]
4. Vanuatu National Cultural Council Act[Cap. 186]
5. Wild Birds (Protection) Act[Cap. 30]
6. National Parks ActNo.7of1993
7. Pesticide (Control) ActNo.11of1993WT/ACC/VUT/4
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8. Convention onBiological Diversity (Ratification) ActNo.23of1992.
9. Framework Convention onClimate Change (Ratification) ActNo.24 of1992.
10. International Trade (Fauna andFlora) ActNo.56of1989.
11. Foreshore Development Actrcap. 901
12. South Pacific Nuclear FreeZone treaty (Ratification) ActNo.16of1995.
13. Treaty ontheNon~Proliferation ofNuclear Weapons (Ratification) ActNo.17of1995.
14. Vienna Convention fortheprotection oftheOzone Layer (Ratification) ActNo.2of1994.
15. Montreal Protocol onSubstances thatdeplete theOzone layer(Ratification) ActNo.4of1994.
F. HEALTH
1. Absinthe (Prohibition) Act[Cap. 4]
2. Brucellosis (Eradication) Act[Cap. 102]
3. Cattle (Slaughter, spraying andcastration) Act[Cap. 103]
4. Control andRegistration ofDogs Act[Cap. 64]
5. Control ofPharmacists Act[Cap. 23]
6. Eradication ofBovine Tuberculosis Act[Cap.59]
7. Food (control) Act[Cap. 128]
8. Health andSafety atwork Act[Cap. 195]
9. Health Practitioners Act[Cap. 164]
10. Infantile paralysis precautions Act[Cap.21]
11. Malaria Control Act[Cap. 18]
12. Meat Supply Act[Cap. 51]
13. Public Health (Aerated Water, IceandIce-cream) Act[Cap. 56]
14. SaleofMedicines Act[Cap. 48]
15. Tetanus Control Act[Cap. 113]
16. Public Health ActNo.of1994.
G. CONSTRUCTION
There isnospecific legislation inthisarea.
H. COMPUTER/CONSULTING
There arenospecific Vanuatu Legislation inthese areas.
100. IsVanuatu amember ofanytrade agreement which covers trade inservices?
No.
V. TRADE-RELATED INTELLECTUAL PROPERTY REGIME
101. Docurrent rules inVanuatu onGovernment useandcompulsory/non-voluntary licences
forpatents comply withtheprovisions ofarticle 31oftheTRIPS Agreement?
TheRegistration ofUnited Kingdom Patents Act(Cap.80) No.11of198.), adopted fromthe
English equivalent, 1973Act,provides fortheregistered inVanuatu onapplication. TheActisdoes
notgointomuch detail. However, s.5oftheAct,confirms thatanapplicant hasthesame privileges
andrights asthrough thepatent hadbeenissued intheUnited Kingdom.WT/ACC/VUT/4
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Compliance withArticle 31,regarding Useofapatent other thantheauthorised holder, Under
s.10oftheActevery assignment ortransmission hastobeentered intotheRegister andbefore that
anapplication hastobemade. Anyauthorised usewould constitute abreach. TheSupreme Court
haspower ontheapplication ofanyperson toremedy suchpersons.
102. Inwhich ways istheobligation towork thepatent satisfied? Willtheimportation ofthe
product incorporating thepatented invention satisfy local working?
TheActgives theMinster power tomake rules ashe/she thinks fitsubject toprovisions of
theActtobetter regulate patents.
Astosatisfaction, onceapatent isregistered intheUnited Kingdom, thecertificate confers
thatthepatent issimilarly workable inVanuatu.
TheRegistrar hasthese obligations. Atthemomemt, suchaposthasnotbeencreated with
theVanuatu Government.
103. Willthere byanylegislation ontheprotection oflayout-designs (topographies) ofintegrated
circuits? Willthere byanyregistration requirements? Which willbethebody responsible for
these matters? Willthelegislation beinfullconformity withtheArticles 35-38 oftheTRIPS
Agreement?
Implementation ofsuchlegislation demands ahighlevelofresearch andcoordination among
related institutions. Asyet,Vanuatu hasnotlegislation covering designs ofanindustrial nature.
Article 35-38 would surely actassome formofguidance inmoves create alegislation togovern
theprotection oflayout designs.
Surely, enactment ofsuchlegislation willputinplace institutions andregistration requirements
tooverlook theregime.
Butatpresent, there isnotlegislation inplace.
104. Arethere anyregistration requirements toprotect geographical indications? Isthis
legislation inaccordance withArticle 22-24 oftheTRIPS Agreement?
Vanuatu hasnotregistration requirements toprotect geographical indications. Thecountry
doesexport some ofit'sproducts overseas, which arebeef(canned andfresh), fish,timber andother
secondary produce. However, imported goods arenotsubject toanyregistration ofanygeographical
indications.
105. What istheexact regime, inrelation totheacquisition ofintellectual property rights, to
which foreigners aresubject. Arethere anyrestrictions orlimitations forforeigners asregards
theacquisition ofintellectual property rights? Doanysuchrestrictions alsoapply tonationals
ofVanuatu?
TheRepublicofVanuatu,sinceachievingIndependencein1980,hasnotproducedanyintellectual
propertylegislation.Aregimefortheacquisitionofintellectualpropertyrightswouldprovideprotection,
registration, compliance measures andanoverall system foritsmanagement atboththeprivate and
public sector.WT/ACC/VUT/4
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106. Istheprotection ofindustrial designs ofVanuatu fully inlinewiththeArticle 25-26 of
theTRIPS Agreement?
InAugust 1989, representatives oftheAttorney Generals Chamber inPortVila, attended a
Forum inCanberra, Act. Themain focus oftheforum wastoseekthepossible implementation of
theModel Industrial Property LawfortheSouth Pacific Countries. Part5ofthemodel actconcerned
Industrial Design, itsregistration, infringement procedures andother areas.
There hasbeennoother development arising from theForum. Vanuatu hasnotlegislation
covering Industrial Designs anditsprotection.
107. Isthetrademark andservice mark legislation fullyinlinewiththeArticles 15-21 ofthe
TRIPS Agreement? What aretherights conferred? Isuserequired inorder toobtain andmaintain
theregistration ofthemark?
Theother Actinplace inVanuatu istheRegistration ofU.K. Trademarks ActNo.8of1982,
(Cap. 81).Inlinewiththisquestion, thisisVanuatu 'sonlytrademarks legislation, asyet.Ithasthe
same legalstatus andorigin astheaforesaid act(refer to101). Bothcarry similar provisions, interms
ofregistration, anditseffected.
Astorights contained within thislegislation, s.7deals with"passing-off". Nothing intheAct
willaffect aright ofaction ofagainst anyperson forpassing offgoods asthese ofanother person.
Assignment andtransfer ofanyprivileges orrights canonlybedoneonapplication totheRegistrar.
Section 10and11dealwithregistered users andrights conferred onthem. Because patents
registered tinder thisActarealready registered tinder U.K. regime, anytrademark ispresumed to
bealready usedinUKandelsewhere, bytheregistered use,evenbefore being registered here. Therefore
useifosasecond nature, rather registration isofapriority from which canbelegitimate.
Thislegislation complies withArticle 16,interms oftherights conferred andthe"mutatis
mutandis" principle. AlsoArticle 21isinlinewiththecurrent lawastotransfer andassignment of
thetrademark. There isnotprovision, intheAct,forrenewal oftheregister noristhere anyfora
requirement tousethetrademark. Thetrademark remains inforce forsolongassuchregistration
intheU.K. remains inforce, inrespect ofthegoods forwhich thetrademark isregistered inVanuatu.
Soarticles 17-19 varyfrom thisAct.
108. Which isthebody responsible inVanuatu forcopyrights andrelated rights?
TheSupreme Court enforces thetwoActs. TheFinancial Services Commission isresponsible
withregistration oftrademarks andpatents. Copyrights andrelated rights arenotentrusted toany
particular bodyinVanuatu. Butthisdoesnotmean thattheyareungoverned. Thebottom lineisthat
nooffice hasbeenestablished, sofar,tooverlook thisarea.
109. Istheprotection ofcopyrights andrelated rights infullyinthelinewiththeArticles 9-14
oftheTRIPS Agreement?
Intheareaofcopyrights andrelated rights, there isalottobedesired. Vanuatu hasnot
legislation inplace, norhasitacceded toanyInternational Convention orAgreement concerning it.WT/ACC/VUT/4
Page48
There areafewestablished recording studios andprinting houses inVanuatu. They mainly
follow business practices andcustoms ofcopyright andsound recordings. There relationship with
artists andpublishers aremainly onacontractual/business basisandnotstrictly legal. Thatistosay,
thateachsound studio orpublishing house hastocomply withanydomestic copyrightregime.
Itisanarewhich demands highattention asmaypeople canfindthemselves being shortchanged
andhavenoawareness astotheviolation oftheirrights.
110. Does thecopyright legislation ofVanuatu provide forrental andlending rights? Who
mayenjoy these rights andtowhat extent?
Inlightofnoexisting legislation, suchrights arenonexistent inthisjurisdiction.
111. How aredatabases protected andtowhat extent?
Vanuatu hasnolawcovering computer software anddatabases, because ofmainly imported
databases being incurrent use. Butsince thecreation ofVANRIS, Vanuatu Resource Information
System) agovernment owned database, compiled bytheNPSO andtheLands Dept. there arises an
obvious needforprotection ofsuchmaterial.
112. Willtheprotection oftherights ofperformers, phonogram producers andbroadcasting
organizations beinconformity withArticle 14oftheTRIPS Agreement? When willlegislation
ontheprotection ofthese rights beintroduced?
Thequestionisnot"will?"butrather"when?"Theneedtohavelegislationprotectingperformers,
producers ofphonograms andbroadcasting organizations islongoverdue. Government initiative is
highly required fortheproper implementation ofsuchlawsasthere isawealth oftalent intheartists
musicians andwriters ofourregion. Notonlyforus,buttoprotect theenormous amounts ofrecorded
materials imported intooursociety.
113. Arethere anylegislative provisions inVanuatu fortheprotection fortrade secrets and
undisclosed information, notably inviewofArticle 39oftheTRIPS Agreement?
TheOfficial Secrets Act(Cap. 111)isinplacetopreserve thesecrets ofGovernment ofVanuatu.
TheActapplies tocivilservants andemployees oftheVanuatu Government while inservice.
Interms oftrade secrets there, common lawrulesdoapply asrestraint oftradeanddisclosure
oftrade secrets aspertheCompanies Act(Cap. 191).
However, Article 39hasacommercial twisttoit,thusVanuatu hasnotproper legislation for
thisarea, interms oftrade.
114. Which arethecivilandadministrative procedures andremedies available toenforce
intellectual property rights? Doforeigners enjoy thesame treatment asnationals inthisrespect?
Areremedies andprocedures inconformity withArticles 42-49 oftheTRIPS Agreement?
Under thetwoActswhich werementioned earlier, thereareprocedures inplace tocarry legal
proceedings toseekremedies. Astointellectual property rights, (refer to105)procedures forremedies
areunclear. Thecourts areconstantly usedbycompanies inenforcing andprotecting thewelfare ofWT/ACC/VUT/4
Page49
theirbusiness domestically. Butadministratively there isnodistinct process inplace, beyond the
Financial Services Commission.
115. Which arethecriminal procedures andpenalties available against infringements of
intellectual property rights? Doforeigners enjoy thesame treatment asnationals inthisrespect?
Areremedies andprocedures inconformity withArticle 61oftheTRIPS Agreements?
Astoprocess criminal offences areindictable bythecourts. Infringements ofintellectual
property areforeign tothelegalsystem inVanuatu, along withcomputer fraud andsoon.Andso,
thecourts areyettobetested along withtheVanuatu legalsystem.
116. Dojudicial authorities have theauthority toorder injunctions orprovisional measures
against infringements ofintellectual property rights, asprovided forinArticles 44and50ofthe
TRIPS Agreement? What exact measures arepossible andwhat istheprocedure tofollow? Do
administrative authorities enjoy similar authority?
WithPatent andTrademarks, theCourt doeshaveauthority togiveorders anddispose proper
measures toremedy persons affected. Aswithintellectual property rights itisunsure astohowcourts
willhandle then. Precedent hasshown thatcourts inVanuatu takea"Commonwealth" approach and
onlyleading decision therein. Astomeasures andprocedures, alotissurely tobedesired. The
administrative authority concerned istheFinancial Services Commission. Their authority isrestricted
assuch.
117. DoesVanuatu already haveinplace asystem ofenforcement atborders against intellectual
property rights infringements inaccordance withArticles 51-60 oftheTRIPS Agreement? If
so,what exact rights arecovered bysuchasystem? Doesitcover goods forexportation andgoods
intransit? Ifnosuchasystem isinplace, arethere anyplans toadopt one?
What wehave failed tomention inmost ofoursubmissions istheroleoftheCustoms
Department. Their duties extend toensuring border measures arekept. Goods coming inthecountry
areinspected accordingly andarecleared extensively.
TheCustoms Department hastheirownmeasures andpractices inplace which hasseenthem
confiscating pirated andcounterfeited material every month. Especially pornographic material illegal
material andgoods ofwhich theimporter isidentified.
TheCustoms Department should playabigpartinthecoordination andestablishment ofan
intellectual property regime since theyareattheforefront ofthefighttoprovide adequate standards
andprincipals concerning trade related intellectual property rights. They areequipped withthe
manpower, resource networks andexpertise which needtobeutilised.
118. ArethereanylegislativeprovisionsinVanuatuontheprotectionagainstunfaircompetition?
FairTrading andConsumer Lawisanareawhich hasbeendiscouraged bycertain interest
groups. Notsuchlegislative provisions areinplace, andyettheneedgrows astheeconomy andbusiness
environment inVanuatu develops. Such alegislation would create awareness andthatisbetter than
having nolegislation atall.WT/ACC/VUT/4
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119. Wewould begrateful fordetails ofthemeans bywhich Vanuatu provides forprotection
ofintellectual property rights and,inparticular, thesteps itistaking tocomply withtheprovisions
oftheTRIPS Agreement?
Final noteisthatVanuatu needs toadopt thislegislation concerning Copyright, Designs,
Industrial Property Intellectual Property andother similar laws. Foritsbenefits andalsotoprepare
aplace where investor 'sconfidence cangrow. Itwillchange thefaceofbusiness inVilabutitwill
prevent international ridicule onrogue nations likeVanuatu whocontinue toignore suchglobal efforts
forcooperation andunderstanding. Theissues behind eachheading isthekeypoint tonote.