RESTRICTED
WORLD TRADE WT/ACC/OMN/6/Add.1
26September 1997
ORGANIZATION(97-4001)
Original: English Working Party ontheAccession
oftheSultanate ofOman
ACCESSION OFTHE SULTANATE OFOMAN
Additional Questions andReplies totheMemorandum
ontheForeign Trade Regime
Addendum
TheMinistry ofCommerce andIndustry oftheSultanate ofOman hassubmitted further replies
toquestions raised afterthemeeting oftheWorking Party heldon30April 1997, withtherequest
thattheybecirculated toWorking Party members. Thequestions andreplies arereproduced hereunder.
_______________WT/ACC/OMN/6/Add.1
Pagei
TABLE OFCONTENTS
Page
No.Question
No.
II. ECONOMY, ECONOMIC POLICIES AND FOREIGN TRADE
2. Economic Policies
(a) Main directions 1 82-84
(d) Foreign anddomestic investment policies 2 85-90
6. Growth inTrade inGoods andNon-Factor Services 4 91
III. FRAMEWORK FOR MAKING AND ENFORCING POLICIES
AFFECTING FOREIGN TRADE INGOODS AND TRADE IN
SERVICES
1. Power ofExecutive, Legislative andJudicial Branches of
Government5 92-93
6. Description ofJudicial, Arbitral orAdministrative Tribunals or
Procedures5 94
IV. POLICIES AFFECTING TRADE INGOODS
1. Import Regulation
(a) Registration requirements forengaging inimporting 6 95-96
(b) Characteristics ofnational tariff system 7 97-101
(c) Tariff quotas, tariff exemptions 8 102
(d) Other duties andcharges 8 103-104
(e) Quantitative import restrictions, including prohibitions, quotas and
licensing systems 9 105-114
(h) Customs valuation 11 115-117
(k) Application ofinternal taxes onimports 12 118
(m-o) Anti-dumping, countervailing dutyandsafeguard regimes 13 119-122
2. Export Regulation
(a) Registration requirements forengaging inexporting 14 123-124
(c) Quantitative export restrictions, including prohibitions, quotas and
licensing systems 15 125-126
(f) Export financing, subsidy andpromotion policies 15 127-130
3. Internal Policies Affecting Foreign Trade inGoods
(a) Industrial policy, including subsidy policies 17 131-135
(b) Technical regulations andstandards, including measures taken at
theborder withrespect toimports 18 136-140
(c) Sanitary andphytosanitary measures, including measures taken
withrespect toimports 20 141-142
(e) State-trading practices 21 143-149WT/ACC/OMN/6/Add.1
Pageii
Page
No.Question
No.
4. Policies Affecting Foreign Trade inAgricultural Products 23 150-152
V. TRADE-RELATED INTELLECTUAL PROPERTY REGIME
1. General 25 153-156
2. Substantive Standards ofProtection
(a) Copyright andrelated rights 26 157-160
(b) Trademarks, including service marks 27 161-163
(c) Geographical indications, including appellations oforigin 27 164
(e) Patents 28 165-169
(f) Protection ofplant varieties 29 170
(g) Layout-designs ofintegrated circuits 29 171
(h) Requirements onundisclosed information, including trade secrets
andtestdata 29 172
3. Measures toControl Abuse ofIntellectual Property Rights 29 173-174
4. Enforcement 30 175-177
VI. TRADE-RELATED SERVICES REGIME
1. General 31 178-187
2. Policies Affecting Trade inServices
(c) Qualification requirements andprocedures 33 188
(d) Monopolies andexclusive service suppliers 33 189
(h) Government procurement 34 190
(i) Aids, grants, subsidies, taxincentives orpromotion schemes 34 191
3. Market Access andNational Treatment
(c) Limitations onthetotalnumber ofoperations ortotalquantity of
output 34 192
(d) Limitations onthetotalnumber ofnatural persons employed in
particular sectors 34 193
(f) Limitations ontheparticipation offoreign capital 35 194-197
(g) Measures providing forlessthannational treatment 36 198-199
VII. INSTITUTIONAL BASE FOR TRADE AND ECONOMIC
RELATIONS WITH THIRD COUNTRIES
2. Economic Integration, Customs Union andFreeTrade Area
Agreements 37 200
Annex 6 - Information onState-trading 38 -WT/ACC/OMN/6/Add.1
Page1
II. ECONOMY, ECONOMIC POLICIES AND FOREIGN TRADE
2. Economic Policies
(a) Main directions
Price controls
Question 82.
According totheresponse toquestion 16ofdocument WT/ACC/OMN/5, theGovernment ofOman
setsprices forpetroleum, electricity, water andtelecommunications. Please describe indetail
howtheprice controls aredetermined forthese items. Aretheprice levels forthese products
thesame forallconsumers? Isthere aschedule ofprices bytypeofconsumer? Ifso,please
provide acopy totheWorking Party forreview.
Reply:
Prices ofpetroleum areuniform forallconsumers.
Thetelecommunication tariff isalsouniform forallconsumers. Itisdetermined bytheGTO
under monopoly conditions. Thetariffs aresetinaccordance withITUrecommendations incorporating
thecosting trends. Telecom tariffs havebeenlowered three times since 1980.
Tariffs forelectricity andwater fordomestic users islower thanthatforindustrial and
commercial users. Theratesareasunder:
Electricity
Domestic users =Bzs10to30perkwdepending onmonthly consumption ofkw
Industrial andcommercial users =(1)Summer Months (May -Aug.) Bzs24perkw
=(2)Winter Months (Sept.-April) Bzs12perkw
Water
Domestic users =Bzs2pergallon
Industrial andcommercial users =Bzs.3pergallon
Question 83.
Initsreply toquestion 16(document WT/ACC/OMN/5), Oman states thatprices aresetbythe
Government forpetroleum, electricity, water andtelecommunication forthebenefit ofconsumers
toensure them reasonable prices. What ismeant bytheterm “reasonable prices ”.Arethese
above orbelow international prices? Arethesame prices charged tohouseholds andtobusinesses?
Please givedetails.
Reply:
Petroleum andtelecommunications services aretaxed andtheirpricelevels inOman areabove
international prices. Prices ofwater andelectricity aresubsidized.
Please alsorefertoReply 82above.WT/ACC/OMN/6/Add.1
Page2
Question 84.
Ispricecontrolforpetroleum,electricity,waterandtelecommunicationsaminimumoramaximum
price? Istheprice control applied atthesame levelforindustry users anddomestic users?
Reply:
Please refertoReply 82.
(d) Foreign anddomestic investment policies
Question 85.
Wewould begrateful forclarification ofthereplies given onlimitations onforeign ownership.
Itseems thatconditions forforeign ownership aredifferent depending onwhether thelegislation
applicable istheForeign Capital Investment LawortheRoyal Decree No.42/96 onPrivatization
Policies andControls. Please clarify. Thereply toquestion 30(WT/ACC/OMN/5) states that
foreign investment isnotprohibited orrestricted inanysector butparagraph 188ofthe
Memorandum (WT/ACC/OMN/2) saysthatforeign accounting andauditing firms should have
atleast35percentOmani participation. Please clarify. Itappears thatconditions forforeign
investment areoften decided onacase-by-case. Isthisinfactthecase?
Reply:
Asregardsthefirstpartofthequestion,pleaserefertoReply10indocumentWT/ACC/OMN/5,
which isself-explanatory.
Replies toquestions 30and188arenotcontradictory. Inthecaseofaccounting andauditing
firms, foreign investment isnotprohibited. There isonlyalimitation ontheparticipation offoreign
share. Whereas generally under theForeign Capital Investment Law, theshare offoreign capital is
limited to49percent,inthecaseofaccounting andauditing firms theshare offoreign capital islimited
to65percent(i.e.there isamore liberal treatment).
Wedonotagree tothestatement inthelastpartofthequestion. Foreign investment isdecided
inaccordance withtheprovisions oftheForeign Investment Capital Law, which ispublished andcopies
ofwhich areavailable toeveryone.
Question 86.
Please alsoclarify thesystem ofinvestment incentives. Thereply toquestion 22,point 7
(WT/ACC/OMN/5) doesnotspecify theforeign participation thresholds thatallow forexemptions
from income tax. Ontheother hand, while thereply toquestion 21mentions “lowtaxes”,the
reply toquestion 22,point 7,refers to“taxexemptions ”andthereply toquestion 158
(WT/ACC/OMN/5) andparagraph 110oftheMemorandum (WT/ACC/OMN/2) donotmention
taxexemptions atallamong investment incentives. Moreover, thereply toquestion 31saysthat
there arenotaxexemptions inthepetrochemical sector which seems tocontradict thereply to
question 22.WT/ACC/OMN/6/Add.1
Page3
Reply:
Thesystem ofincome taxoncompanies isexplained inReply 125indocument
WT/ACC/OMN/5. Asstated inReply 22inthesame document, there isexemption fromincome tax
forforeign investment projects, referred tointheForeign Capital Investment Law, forfiveyears,
which mayberenewed onceforanother fiveyears. Joint-venture companies inthepetrochemical
sector would alsoenjoy exemption from taxforfive(orten)years. Reply 31doesnotcontradict
Reply 22,asReply 31attempts toconvey thatcompanies inthepetrochemical sector donothaveany
special taxexemption overandabove thefive(orten)yeartaxholiday.
Asandwhen ajoint-venture withforeign equity participation becomes liable totaxonprofits,
aftertheperiod ofexemption, ajoint-stock company inwhich theOmani capital is51percentormore
oftheequity andinwhich atleast40percentoftheshares havebeenoffered forpublic subscription,
willbetreated, forpurposes oftaxation, onparwithfullyOmani-owned companies. Thecapital
subscribed bythebranches oftheforeign companies registered inOman isalsotreated asOmani capital.
Themaximum rateoftaxonprofits ofsuchcompanies is7.5percent.
Question 87.
Dodomestic investors havepreferential access toservices, finance orother mechanisms toensure
that51percentoftheshares ofthecompany being privatized remain domestically owned?
Reply:
No,there isnopreferential access fordomestic investors toservices, finance orother
mechanisms. Foreign anddomestic investors aretreated inthesame manner.
Question 88
Intheanswer toquestion 22(WT/ACC/OMN/5), itisindicated inpoint 3,thatinvestment projects
willbeexemptfromcustomsdutiesonimportsofmachinery,equipmentandrawmaterialsrequired
forproduction. What arethecriteria thatneed tobemettoqualify asaninvestment project?
Reply:
Allprojects approved under theForeign Capital Investment Law(reference paragraph 35of
document WT/ACC/OMN/2).
Question 89
Inthesame answer, point 6details interest-free government loans andaccess tosoftloans upon
satisfaction ofcertain criteria. CanOman provide details ofthese criteria? Isthere any
discrimination against foreign investors?
Reply:
Interest-freegovernmentloansarenolongeravailable.Accordingtothenewdecreeforfinancial
assistance totheprivate sector ineconomic andservice activities, interest bearing loans would be
provided bytheGovernment. Thefollowing arethecriteria forsoftloans:WT/ACC/OMN/6/Add.1
Page4
- available onlytoprojects intheareas ofindustry, tourism, agriculture, fisheries, health,
education andhandicrafts;
- theproject should employ atleast35percentOmani nationals;
- forprojects located within theMuscat Governorate themaximum loanwillbeequivalent to
150percentoftheequity andforprojects outside theMuscat Governorate themaximum loan
willbe250percentoftheequity;
- themaximum loanwould beRO500,000 except joint-stock companies which haveoffered
atleast40percentoftheirequity tothepublic. Inthiscasethemaximum loanwillbe
RO5,000,000.
There isnodiscrimination against foreign investors, solongastheforeign share doesnotexceed
49percent.
Question 90.
With reference toparagraph 35oftheMemorandum, what aretheconcerns forlimiting foreign
capital participation to49percent share inacompany with acapital ofatleast
United States '$390,000? What limitations exist forcompanies with capital lower than
United States '$390,000? What criteria areapplied fortheapproval bytheCouncil ofMinisters
responsible fortherecommendation oftheForeign Capital Investment Committee/Minister of
Commerce andIndustry regarding the100percentlevelofownership?
Reply:
Participation offoreign capital iswelcome formedium andbigprojects, i.e.projects witha
capital ofatleastUnited States '$390,000. Smaller projects canbetaken careofbyOmani investors.
Asforthelimit onforeign capital participation, theconsideration isthatOmani investors should
adequately participate inthedevelopment ofthenational economy.
Foreign investment isnotpermitted where thecapital ofacompany islessthan
United States '$390,000, unless inthecaseofconsultant offices.
Thecriteria forapproval of100percentforeign share are: (i)thecapital oftheproject is
United States '$1.3million ormore; (ii)itcontributes tothedevelopment ofnational economy; and
(iii)should beapproved bytheCabinet.
6. Growth inTrade inGoods andNon-Factor Services
Question 91.
Please provide adefinition of“Non-Factor Services ”.
Reply:
Non-factor services refertoshipping, passenger andother transport services, travel, aswell
ascurrent account transactions notseparately reported (e.g.notclassified asmerchandise). These
include transactions withnon-residents bygovernment agencies andtheirpersonnel abroad.WT/ACC/OMN/6/Add.1
Page5
III. FRAMEWORKFORMAKINGANDENFORCINGPOLICIESAFFECTINGFOREIGN
TRADE INGOODS AND TRADE INSERVICES
1. Power ofExecutive, Legislative andJudicial Branches ofGovernment
Question 92.
Please provide ashort description oftheworkings oftherecently established Commercial Court,
including thescope ofitspowers.
Reply:
Thenewly established Commercial Court hasjurisdiction overcases involving commercial
disputes arising between parties oftheprivate sector, government departments orauthorities orgeneral
establishments. Itwillalsohavejurisdiction incases ofappeals onjudgments ontaxdisputes thathave
beenpronounced inaccordance withtheIncome TaxLawonCompanies, andincasesoflabour disputes
transferred totheCourt from theLabour Department.
Thecourt shallconsist ofaPresident andanumber ofjudges appointed byRoyal Decree.
TheCourt shallhaveprimary circuits having original jurisdiction andanAppellate Circuit
which hears appeals against thedecisions oftheprimary circuits.
Theprocedures oftheCommercial Court aresimilar totheearlier body, theAuthority for
Settlement ofCommercial Disputes (which hasbeen replaced bytheCommercial Court). These
procedures aredescribed inReply 46indocument WT/ACC/OMN/5.
Question 93.
DoestheSharia, referred toinparagraph 52oftheMemorandum (WT/ACC/OMN/2), limittrade
inservices? Ifso,please explain andgivetypical examples.
Reply:
No,itdoesnot,except where necessary toprotect public morals (reference paragraph (a)of
Article XIVofGATS).
6. Description ofJudicial, Arbitral orAdministrative Tribunals orProcedures
Question 94.
Oman doesnotappear tohaveanestablished system forchallenge andreview ofadministrative
decisions involving, forexample, review byindependent tribunals orthecourts. Arethere plans
forsuchreview processes tobeintroduced?
Reply:
Therecently established Commercial Court provides amechanism forindependent review of
administrative decisions.
Please refertoReply 92foradescription ofthefunctions oftheCommercial Court.WT/ACC/OMN/6/Add.1
Page6
IV. POLICIES AFFECTING TRADE INGOODS
1. Import Regulation
(a) Registration requirements forengaging inimporting
Question 95.
Aregistered company canengage inimportation ordistribution ofimports inOman ifthese
activities arecovered initsMemorandum andArticle ofAssociation. What conditions have to
befulfilled forMemorandum andArticles ofAssociation tocover importation anddistribution
ofimports? Arethese conditions thesame forwholly-owned Omani companies andother
companies?
Reply:
MemorandumandArticlesofAssociationhavetobepreparedinaccordancewiththeCompanies
Commercial Law. Acompany hasjusttomention initsMemorandum andArticles ofAssociation
thatitwillbeengaging inimportation anddistribution ofimported goods. Theconditions arethesame
forallcompanies registered inaccordance withOmani Law.
Question 96.
According totheresponses toquestions 53to59ofdocument WT/ACC/OMN/5, theOmani Law
onCommercial Entities prohibits foreign corporations, except inlimited circumstances, andall
foreign individuals from engaging intheimportation, exportation ordistribution ofimports.
Paragraph 4ofGATT Article IIIprovides thatimported products shall beaccorded treatment
nolessfavourable thanthataccorded tolikeproducts ofnational origin inrespect ofalllaws,
regulationsandrequirementsaffectingtheirinternalsale.Commercialagencyprovisionsanalogous
totheOmani Lawwere found tobeinconsistent withArticle III.4 intheGATT Panel Reports
on“United States -Measures Affecting Alcoholic andMalt Beverages ”(DS23R, adopted on19
June 1992, 39S/206, 279-280) and“Canada -Administration oftheForeign Investment Review
Act”(L/5504, adopted on7February 1984, 30S/166-167). TheLawonCommercial Entities
willneedtobeamended tobring itintoconformity withthenational treatment provisions ofGATT
Article IIIprior toWTO accession.
Reply:
Wedonotshare theview thattheLawofCommercial Agencies isincompatible withthe
provisions ofArticle IIIoftheGATT. TheLawdoesnotdiscriminate between imported anddomestic
goods. Itonlyprovides thataforeign supplier appoints anagent inOman andthisagent mustbean
Omani national oranOmani company withatleast51percentOmani participation. Itonlyprovides
thatifaforeign supplier appoints anagent inOman, itmustbeanOmani national oranOmani company
andasuppliercanappointmorethanoneagent.Evenwhenanagent/agentsisappointed,otherimporters
(non-agents) canimport thesame goods. Wedonotseeanyconflict withtheprovisions ofGATT
Article III.WT/ACC/OMN/6/Add.1
Page7
(b) Characteristics ofnational tariff system
Question 97.
Oman isusing twodifferent systems forstatistical andcustoms classification purposes. The
Harmonized System (HS) isnotbeing used forcustoms classification purposes because of
administrative andlogistical difficulties inOman. Please describe theadministrative andlogistical
problems thatapply totheuseoftheHarmonized System forcustoms classification purposes.
Weappreciate Oman ’scommitment toimplement theHS96customs classification system prior
toWTO accession. Oman willneed toprovide trade datatotheWorking Party classified in
accordance withtheHS96system.
Reply:
Theadministrative andlogistical problems arelackoftraining ofthecustoms staffforapplying
theHarmonized System forclassification ofgoods andtheabsence aofcomputer network atthecustoms
ports andcustoms stations.
Question 98.
WewelcomeOman’scommitmenttothefullimplementationoftheHarmonizedSystemforcustoms
purposes prior toaccession andwould beinterested toknow what time-frame Oman hassetfor
itsintroduction.
Reply:
Oman hopes tobeabletoimplement theHarmonized System in1998.
Question 99.
Concerning thereply toquestion 61(WT/ACC/OMN/5), what timetable isenvisaged forthe
adoption ofthecurrent HSsystem forcustoms classification purposes?
Reply:
Please refertoReply 98.
Question 100.
Concerning thereplies toquestions 66and167(WT/ACC/OMN/5): TheLawonOrganization
andEncouragement ofIndustry empowers theGovernment toincrease duties when there are
similar domestically-produced goods. Willthisbemodified onaccession totakeintoaccount
theexistence oftariff bindings?
Reply:
TheSultanate ofOman canassure thatitwillabide byitsobligations inrespect oftariffbindings
andwilltakewhatever action isnecessary.WT/ACC/OMN/6/Add.1
Page8
Question 101.
WenotethattheLawontheOrganization andEncouragement ofIndustry contains aprovision
(Article 19,paragraph 4)which empowers theGovernment toincrease customs tariffs onimported
goodswhicharesimilartodomestically-producedgoods,ortoprohibitorrestricttheirimportation,
butthattheprovision isdormant andhasnotbeenusedfor15years. DoesOman intend toretain
thisprovision? Isitintended thatthisprovision function inthemanner ofasafeguard measure?
Reply:
Thisprovision isnotintended tobeusedasasafeguard measure. Upon accession totheWTO,
Oman willnottakeanyaction contrary totheprovisions ofWTO Agreements. Itwilltakeanysafeguard
measures inaccordance withtheAgreement onSafeguards andforthatpurpose willframe aWTO
consistent legislation.
(c) Tariff quotas, tariff exemptions
Question 102.
Please listallagricultural products andtherespective import volumes thatreceived duty-free
treatment in1995 and1996 because they were imported forgovernmental use. Does the
Government ofOman intend tocontinue duty-free treatment forthese items after accession?
Reply:
Noagricultural products were imported forgovernmental usein1995 and1996. Duty free
treatment mayormaynotcontinue. Inanycase, Oman willrespect itsbindings fordifferent items.
(d) Other duties andcharges
Question 103.
According totheresponse toquestion 82ofdocument WT/ACC/OMN/5, thePort Services
Corporation assesses quay handling andstorage fees,demurrage andovertime fees. ThePort
Corporation isacommercial company inwhich theGovernment ofOman hasa35percentshare.
Does thePortServices Corporation have anexclusive right toprovide quay handling, storage
anddemurrage services forallimported products?
Reply:
ThePortServicesCorporationissupplyingtheservicesunderacontractwiththePortAuthority.
Itistheonlycompany which provides quayhandling, storage anddemurrage services forallimported
products. Because oftherelatively small sizeoftheport,itmaynotbeeconomical formore companies
toengage inthiswork. However, thereisnobaronother companies providing these services, subject
toentering intoacontract withthePortAuthority.
Question 104.
TheGovernment ofOman must commit thatitwillensure thatthecustoms processing operations
performed byprivate firms, suchasthePortServices Corporation, onbehalf oftheGovernment,WT/ACC/OMN/6/Add.1
Page9
areconsistent withtherelevant WTO Agreements, inparticular GATT Article VIII, theAgreement
onPre-Shipment Inspection andtheAgreement ontheImplementation ofArticle VIIoftheGATT
1994.
Reply:
ThePortServices Corporation doesnotperform anycustoms processing operations. Itonly
provides services suchasloading, unloading andstorage. Itisnotconcerned atallwithvaluation of
goods forcustoms purposes orwithpre-shipment inspection ofgoods.
Thecharges fortheservices provided bythePortServices Corporation areinaccordance with
GATT Article VIII, asexplained inReply 82indocument WT/ACC/OMN/5.
(e) Quantitative import restrictions, including prohibitions, quotas andlicensing systems
Question 105.
According toAnnex 7oftheForeign Trade Memorandum (WT/ACC/OMN/2), Oman prohibits
orrestricts theimportation oftransmission andreception radio setsandwireless telegraphs.
Oman alsorestricts orprohibits theimportation ofdaisy plants. However, GATT Article XI
provides thatthere shall benoprohibitions orrestrictions ontheimportation ofproducts from
theterritory ofother WTO Members. What istheGATT rationale forprohibiting orrestricting
theimportation ofdaisies?
Reply:
There isnoprohibition ontheimport ofradio setsandwireless telegraphs. Import ofthese
require authorization from theMinistry ofPosts, Telegraphs andTelephones, soastoensure that
thetype ofequipment imported from abroad meet thestandards andspecifications ofOman
telecommunications system.
Import ofdaisy plants isprohibited forhealth reasons asitisanarcotic plant.
Question 106.
Inthereply toquestion 87(WT/ACC/OMN/5), Oman states thatArticle XXmayonlybeinvoked
ifalternative, lesstrade restrictive measures consistent withArticle III,national treatment cannot
beused. Isdomestic production ofthese products alsobanned orrestricted?
Reply:
Yes.
Question 107.
Concerning thereply toquestion 167(WT/ACC/OMN/5): There isaprovision intheLawon
theOrganization andEncouragement ofIndustry which empowers theGovernment toprohibit
orrestrict theimportation ofgoods “which aresimilar todomestically produced goods. Will
thisprovision beeliminated asfrom accession?WT/ACC/OMN/6/Add.1
Page10
Reply:
UponaccessiontotheWTO,OmanwillfullyabidebyitsobligationsundertheWTOAgreements
andwillnottakeanyactions which arenotconsistent withWTO rules.
Question 108.
Weseek more information ontheintermittent banonfruit andvegetables andtheWTO
justification fortherestrictions.
Reply:
Import ofcertain fruits andvegetables isbanned incertain years when there isover-supply
ofdomestically produced fruitandvegetables. Thepurpose ofthebanistoprovide protection to
domestic producers.
Question 109.
According totheresponse toquestion 93ofdocument WT/ACC/OMN/5, Oman bans the
importation ofcertain fruitandvegetables when itdetermines there isanover-supply. WillOman
commit thatitwillnotreimpose importation prohibitions onfruit andvegetables, except in
conformity with specific provisions oftheWTO Agreements (i.e.safeguards, anti-dumping,
balance-of-payments provisions)?
Reply:
Oman canconfirm thatitwillnotrestrict theimport offruits andvegetables except inconformity
withtheprovisions oftheWTO Agreements.
Question 110.
Regarding question 93and94ofdocument WT/ACC/OMN/5, Oman states thatincertain years
animport banoncertain fruit andvegetables maybeinstituted when there isanover-supply
oftheproducts. Since import banisaviolation ofaWTO rule, willOman eliminate theban
before joining theWTO?
Reply:
Please refertoReply 109.
Question 111.
Oman saysthatseasonal quotas willbereplaced bytariffs onaccession totheWTO. Does Oman
have inmind aparticular tariff levelformilkandeggs?
Reply:
Tariff rateswillemerge from market access negotiations. Anindication oftariff levels can
behadfrom Oman ’sinitial offer onmarket access.WT/ACC/OMN/6/Add.1
Page11
Question 112.
Paragraphs76to79oftheMemorandumontheForeignTradeRegime(WT/ACC/OMN/2)indicate
thatthere areannual quotas onfresh andlong-validity milk fixed every yearbytheMinistry
ofAgriculture andFisheries andseasonal quotas (June-September) oneggs. However, inOman ’s
response toquestion 93ofdocument WT/ACC/OMN/5 which states that‘...import quotas are
fixed onlyformilkandeggsforcertain months oftheyear’,itisambiguous astowhether milk
issubject toannual orseasonal quotas. Could Oman, therefore, confirm thattheimport quotas
onfresh andlong-validity milk areannual quotas asinitially stated inparagraph 77ofthe
Memorandum ontheForeign Trade Regime?
Reply:
Import quotas oneggsareseasonal restrictions. Those onmilkareyearly quotas. Anyhow,
these willbereplaced bytariffs upon Oman ’saccession totheWTO.
Question 113.
Wewelcome thecommitment contained intheresponses toquestions 96and100ofdocument
WT/ACC/OMN/5 toeliminate seasonal import quotas onmilkandeggsasofWTO accession.
With regard totheresponse toquestion 93ofdocument WT/ACC/OMN/5, theimport quotas
formilkandeggsareallocated onthebasis ofpastperformance. How isaccess provided for
newentrants? Please define "past performance" asusedinthiscontext.
Reply:
Pastperformance means quantity ofimports bydifferent importers intheprevious years for
which dataisavailable. Quotas forthenewyearareallocated toimporters intheratioofactual imports
intheprevious year. There isnoarrangement fornewentrants. However, uponaccession totheWTO,
quotas willbereplaced bytariffs.
Question 114.
Wewelcome thecommitment contained intheresponse toquestion 105ofdocument
WT/ACC/OMN/5 toeliminate theprohibition ontheimportation ofpetroleum products. Will
Oman commit totheelimination ofthisimport prohibition prior toWTO accession?
Reply:
Oman willdowhatever isnecessary toassume WTO obligations
(h) Customs valuation
Question 115.
Oman ’scommitment toaddress thelackoflawsoncustoms valuation iswelcomed. Welook
forward toreceiving theinformation onspecific problems, efforts being made tomeetrequirements
andproposed enddates forfullimplementation oftheCustoms Valuation Agreement.WT/ACC/OMN/6/Add.1
Page12
Reply:
Theinformation ontheimplementation oftheCustoms Valuation Agreement iscontained in
Oman ’spaper onProposals onTransitional Periods, which hasbeencirculated tomembers ofthe
Working Party asdocument WT/ACC/SPEC/OMN/1.
Question 116.
Further tothereplies toquestions 113and117(WT/ACC/OMN/5), please provide foreachof
thelegislative andadministrative steps thatwillberequired tobring thecustoms valuation system
intolinewithWTO requirements andatimetable forconformity.
Reply:
Please seeReply 115.
Question 117.
Weconsider fullimplementation oftheWTO Customs Valuation Agreement tobeanintegral
partoftheWTO Accession Protocol package. Weareconcerned bytheresponse toquestions 113
and114ofdocument WT/ACC/OMN/5, which indicate thatOman doesnotexpect toimplement
theWTO Customs Valuation Agreement asofthedateofaccession. Oman should beprepared
todescribe indetail thestatus ofitsimplementation oftheCustoms Valuation Agreement. Oman
should alsoprepare atimetable fortheadoption oflegislation andimplementing rules and
regulations.
Reply:
TheSultanate ofOman commits toimplement theAgreement onCustoms Valuation. However,
forreasons explained inourpaper onProposals onTransitional Periods (WT/ACC/SPEC/OMN/1),
itwould notbepossible forOman toimplement theAgreement asfromthedateofitsaccession. We
would needaminimum transitional period offiveyears.
(k) Application ofinternal taxes onimports
Question 118.
Regarding thereply toquestion 125(WT/ACC/OMN/5), doesOman agree thatpreferential rates
ofincome taxforOmani businesses provide aspecific subsidy togoods produced bythese
businesses? Please summarize thespecial rulessetoutinoilexploration andproduction concession
agreements.
Reply:
No,wedonotagree thatpreferential ratesofincome taxforOmani businesses canbeconsidered
asubsidy, within themeaning ofparagraph (e)oftheIllustrative ListofExport Subsidies, asthetax
rateisnot“related toexports ”.WT/ACC/OMN/6/Add.1
Page13
(m-o) Anti-dumping, countervailing duties andsafeguard regime
Question 119.
Weappreciate theoffer (inthereply toquestion 134,WT/ACC/OMN/5) tosubmit therelevant
lawsindraft forcomment before theyareenacted. What isthetimetable forpreparing these
laws?
Reply:
These lawswillbeprepared afterOman hasbecome aMember oftheWTO. Weunderstand
thatOman ’sobligation under theWTO isnottoapply anti-dumping, countervailing duties orsafeguards
except inaccordance withtheprovisions oftherespective Agreements.
Question 120.
WenotethatOman doesnothave lawsonanti-dumping, countervailing duties orsafeguards.
Could Oman giveanassurance thatsuch measures willnotbeimplemented unless legislation
isinplace?
Reply:
Yes,Oman canassure theWorking Party thatitwillnotapply anti-dumping, countervailing
duties ortakesafeguard measures except under appropriate legislation which willbeconsistent with
therespective WTO Agreements.
Question 121.
According totheresponse toquestion 134ofdocument WT/ACC/OMN/5, theSultanate ofOman
willnotintroduce lawsforanti-dumping, countervailing duties orsafeguards until after WTO
accession. Does theGovernment ofOman commit torefrain from imposing anyanti-dumping,
countervailing duties orsafeguard measures until WTO-consistent legislation hasbeen enacted
andproperly notified totheappropriate WTO Committees?
Reply:
Yes.
Question 122.
WenotethattheLawontheOrganization andEncouragement ofIndustry contains aprovision
(Article 19,paragraph 4)which empowers theGovernment toincrease customs tariffs onimported
goodswhicharesimilartodomestically-producedgoods,ortoprohibitorrestricttheirimportation,
butthattheprovision isdormant andhasnotbeenusedfor15years. DoesOman intend toretain
thisprovision?WT/ACC/OMN/6/Add.1
Page14
Reply:
TheSultanate ofOman willnotusethisLaworanyother lawexcept inconformity withits
obligations under theWTO rules. Wewillfullyabide byourobligations afterOman hasacceded to
theWTO.
2. Export Regulation
(a) Registration requirements forengaging inexporting
Question 123.
According totheresponses toquestions 53to59ofdocument WT/ACC/OMN/5, theOmani Law
onCommercial Entities prohibits foreign corporations, except inlimited circumstances, andall
foreign individuals from engaging intheimportation, exportation ordistribution ofimports.
Paragraph 4ofGATT Article IIIprovides that imported products shall beaccorded treatment
nolessfavourable thanthataccorded tolikeproducts ofnational origin inrespect ofalllaws,
regulationsandrequirementsaffectingtheirinternalsale.Commercialagencyprovisionsanalogous
totheOmani Lawwerealsofound tobeinconsistent withArticle III,4intheGATT Panel Reports
on‘United States ”-Measures Affecting Alcoholic andMalt Beverages ”(DS23/R, adopted on
19June1992, 39S/206,m 279-280) and“Canada -Administration oftheForeign Investment Review
Act”9L/5504, adopted on7February 1984, 30S/166-167). TheLawontheCommercial Entities
willneedtobeamended tobring itintoconformity withthenational treatment provisions ofGATT
Article IIIprior toWTO accession.
Reply:
Wedonotshare theview thattheLawofCommercial Agencies isincompatible withthe
provisions ofArticle IIIoftheGATT. TheLawdoesnotdiscriminate between imported anddomestic
goods. Itdoesnotrequire oroblige foreign suppliers toappoint acommercial agent inOman. Itonly
provides thatifaforeign supplier appoints anagent inOman, itmustbeanOmani national oranOmani
company withatleast51percentOmani participation andthesupplier canappoint more thanone
agent. Even when anagent/agents isappointed, other importers (non-agents) canimport thesame
goods. Wedonotseeanyconflict withtheprovisions ofArticle III.
Inanycase, theLawisnotapplicable toexports; itisonlyapplicable forimports.
Question 124.
According totheresponse toquestion 144ofdocument WT/ACC/OMN/5, onlylicensed Omani
companies canexport fishfrom Oman. Arethere anylawsorregulations other thantheLaw
onCommercial Agencies thatapply totheexportation offish? Ifso,please describe the
requirements indetail andprovide atranslated copy oftheapplicable provisions totheWTO
Secretariat forreview bytheWorking Party.
Reply:
There arenospecial lawsorregulations concerning export offish. TheLawonCommercial
Agencies isnotapplicable toexports.WT/ACC/OMN/6/Add.1
Page15
(c) Quantitative export restrictions, including prohibitions, quotas andlicensing systems
Question 125.
According totheresponse toquestion 142ofdocument WT/ACC/OMN/5, Oman requires approval
from theMinistry ofAgriculture andFisheries toexport dateseedlings inorder topreserve local
species andvarieties. Oman alsorestricts theexportation oflobster, abalone andshark during
thebreeding season inorder toavoid over-exploitation ofthefish. GATT Article XIprovides
thatnoprohibitions orrestrictions other thanduties, taxes orother charges, including quotas
andexport licences, shallbeinstituted ontheexportation orsaleforexport ofanyproduct destined
foranyother Member. Wenotetheresponse toquestion 245ofdocument WT/ACC/OMN/5,
thatOman isprepared toeliminate oramend these restrictions asofthedateofWTO accession
ifnecessary tocomply withWTO requirements. Preservation oflocal species andvarieties of
dateseedlings doesnotappear tobeajustification forthenon-application ofGATT Article XI.
How doesOman intend toremove theexport licensing requirement forthedateseedlings prior
toWTO accession.
Reply:
Restrictions onexport ofdateseedlings areinplace topreserve andconserve Omani species
andvarieties. These restrictions cannot beregarded asinconsistent withanyGATT Article or
WTO Agreement.
Question 126.
Arethere critical shortages oflobster, abalone andshark inOmani waters? Isallfishing for
these species prohibited during theclosed season, oristheprohibition onlyapplicable tofishing
forfishtobeexported?
Reply:
There arecritical shortages oflobster, abalone andshark inOmani waters andthere isrisk
ofover-exploitation.
Allfishing intheclosed season isprohibited. Theprohibition applies toallfishing andnot
tofishing forexport only.
(f) Export financing, subsidy andpromotion policies
Question 127.
Oman states inthereply toquestion 13thatgovernment-funded institutions grant loans for
industrial projects which produce forexport. Please indicate which institutions arereferred to
andtheconditions onwhich theloans aregranted.
Reply:
Question 13indocument WT/ACC/OMN/5 orquestion 13indocument WT/ACC/OMN/6
donottalkabout loans forindustrial projects. Wewould request clarification ofthequestion.WT/ACC/OMN/6/Add.1
Page16
Question 128.
Isexport credit insurance (referred tointhereply toquestion 150,WT/ACC/OMN/5) made
available atlower rates thancanbeobtained ontheopen market?
Reply:
Export credit insurance cover bytheExport Guarantee andFinancing Unit(EGFU) isavailable
toexporters atmarket rates.
Question 129.
Concerning thereply toquestion 153(WT/ACC/OMN/5), please provide acomparison of
international prices andprices forpetroleum products delivered todomestic industries forexport
projects andother projects.
Reply:
There isnodifference inpricetodomestic industries forexport projects andforother projects.
Question 130.
According totheresponse toquestion 160ofdocument WT/ACC/OMN/5, theGovernment of
Oman doesnotprovide export subsidies, taxexemptions, interest-free loans, etc.toexporters.
However, according totheresponses toquestions 150and151ofthesame document, theExport
Guarantee andFinancing Unit(EGFU) oftheOman Development Bank, which is54percent
owned bytheGovernment ofOman, provides reduced-rate financing toexporters, provided that
localcontent conditions aremet. Please explain whytheGovernment ofOman doesnotconsider
theprovisions ofreduced-rate financing bytheEGFU tobeasubsidy within themeaning ofthe
WTO Agreement onsubsidies andCountervailing Measures.
Reply:
Theoperations oftheExport Guarantee andFinancing Unitareonthesame linesassimilar
institutions insome developed countries, forexample, Germany, theUnited Kingdom andthe
United States. Andthese countries donotuseprohibited subsidies.
Asforlocalcontent conditions, these related to“labour costs, interest, depreciation, taxesand
netprofit”andnotto“useofdomestic overimported goods ”[(reference Article 3.1(b) oftheAgreement
onSubsidies andCountervailing Measures].
Fortheforegoingreasons,wedonotconsidertheOmanipracticeasasubsidywithinthemeaning
oftheWTO Agreement onSubsidies andCountervailing Measures.WT/ACC/OMN/6/Add.1
Page17
3. Internal Policies Affecting Foreign Trade inGoods
(a) Industrial policy, including subsidy policies
Question 131.
According totheresponses provided inquestions 4to6ofdocument WT/ACC/OMN/5, theFifth
Five-Year Development Planprovides forthedevelopment andpromotion ofnatural-gas based
projects, thepetroleum andpetrochemical sectors anddevelopment ofsectors thatdepend on
gasasamajor input; thataimattheproduction andexport ofnatural resources with value
addition; thatuseinputs ofother industrial products made from localresources intheagricultural,
fisheries andmineral sectors; import substitution wherever itiseconomically feasible; andexport
industries thatbenefit fromthestrategic location oftheSultanate. Article 3oftheWTO Agreement
onSubsidies andCountervailing Measures prohibits theuseofsubsidies, inlaworinfact,
conditioned upon export performance orimport substitution, orserious prejudice totheinterests
ofWTO Members. Please indicate anysubsidies, within themeaning ofArticle IoftheWTO
Subsidies Agreement, which areprovided pursuant totheFifth Five-Year Development Plan,
topromote thedevelopment ofsectors thatdepend ongasasamajor input. Please describe any
subsidies usedtopromote export industries orimport substitution.
Reply:
There arenosubsidies within themeaning ofArticle 1oftheSubsidies Agreement fornatural
gasbased projects, forpetroleum andpetrochemical sectors orforthedevelopment ofsectors thatdepend
ongasasamajor input. Similarly, there arenosubsidies forexport oriented orimport substitution
industries.
Question 132.
According totheresponse toquestion 6ofdocument WT/ACC/OMN/5, theSultanate ofOman
established aspecial fund (Venture Capital Fund) forthepurpose offacilitating andobtaining
thenecessary finance (capital andsoftloans) tomedium andsmall-scale industries. Arethere
anyexport performance ordomestic content requirements imposed asconditions forobtaining
financing from theVenture Capital Fund?
Reply:
No,there arenoexport performance ordomestic content requirements.
Question 133.
Thegranting ofloans from private sector projects inthefields ofindustry andtourists, subject
tolocal content andexport performance conditions asprovided byMinisterial Decision 49/91,
violates therequirements oftheWTO Agreement onSubsidies andCountervailing Measures.
How doesOman intend tomodify thisMinisterial Decision inorder tobring itintoconformity
withtheWTO Subsidies Agreement prior toaccession?WT/ACC/OMN/6/Add.1
Page18
Reply:
TheMinisterial Decision referred tointhequestion isnolonger valid; ithasbeensuperseded
byRoyalDecreeNo.17/1997.UndertheRoyalDecree,loansarenotconditionalonexportperformance
orlocalcontent requirements.
Question 134.
Since petroleum production anddistribution iscontrolled bytheGovernment ofOman, thesale
ofpetroleum atbelow-market prices would constitute anindirect subsidy. Areexport performance
ordomestic content considered asfactors inthedetermination oftheprice ofpetroleum soldto
domestic industries?
Reply:
No.
Question 135.
Werefer toparagraphs 106to116oftheMemorandum ontheForeign Trade Regime
(WT/ACC/OMN/2). Oman haslisted asoneofitsprincipal policy objectives to"...adopt import
substitution policy toselected industries". Itisofconcern thattheadoption ofimport substitution
policies toselected industries should qualify asanysortofobjective, letalone aprincipal policy
objective ofindustrial policy. However, wenotethatOman ’sresponse toquestion 158ofdocument
WT/ACC/OMN/5 says"...there arenospecific measures forimport substitution industries, nor
have anyindustries been selected under thispolicy".
Would Oman elaborate onthisresponse?
Reply:
Import substitution policy isonlyageneral objective ofeconomic policy. TheGovernment
ofOman doesnottakeorprovide anyspecific measures forimport substitution industries.
(b) Technical regulations andstandards, including measures taken attheborder withrespect
toimports
Question 136.
Concerning thereply toquestion 174(seealsoquestion 106and204)(WT/ACC/OMN/5), dothe
Omani authorities intend toadopt Gulf Cooperation Council-wide standards oradopt national
standards based oninternational standards?
Reply:
Gulfstandards aredeveloped jointly byallGCC countries andassuchareconsidered asOmani
standards.WT/ACC/OMN/6/Add.1
Page19
Where there arenoGulfstandards, Omani authorities adopt national standards based on
international standards, except when international standards arenotfound tobesuitable because of
climatic conditions.
Some international standards areadopted astheyarewithout anymodification where no
corresponding Omani standards exist, andsome ofthem areusedasmain references andsome are
notusediffound unsuitable duetospecial requirements suchasreligion, climate, culture, etc.
Question 137.
Wewould liketoseemore certainty onthequestion ofwhether Oman willbeinaposition to
apply theTechnical Barriers toTrade Agreement upon accession. Could Oman indicate what
steps itistaking toassess thechanges thatwillbenecessary?
Reply:
Asstated earlier, Oman isexamining theconformity ofitsexisting system withtherequirements
oftheTBT Agreement. Thisexercise willbecompleted aftertheWorking Party hasfinished its
examination oftheforeign trade regime ofOman, including inparticular theexamination ofOman ’s
laws, regulations andprocedures relating tostandards. Once thisprocess iscompleted wewillknow
clearly whatfurther action isrequired.
Question 138.
According totheresponse toquestion 179ofdocument WT/ACC/OMN/5, Oman isstudying the
compatibility ofitsstandards system withtheWTO Agreement onTechnical Barriers toTrade.
Weareconcerned about theresponse toquestion 177ofdocument WT/ACC/OMN/5, which
indicates thatOman maynotbeprepared toimplement fully theWTO TBT Agreement asof
thedateofaccession. What isthestatus ofthestudy onthecompatibility oftheOmani standards
regime withtherequirements oftheTBT Agreement? Please proved atranslated copy ofthe
study totheSecretariat toreview bytheWorking Party. What standards items havesofarbeen
identified asnotconformity withWTO requirements?
Reply:
Please refertoReply 137. Work isstillinprogress, andwillbecompleted aftertheWorking
Party hasfinished itsexamination oftheforeign trade regime ofOman
Question 139.
Please describe fully anydifferences between Oman ’srules forthepreparation, adoption and
application ofstandards andtherequirements oftheCode ofGood Practice forthepreparation,
adoption andapplication ofstandards, provided inAnnex 3oftheWTO Agreement onTechnical
Barriers toTrade.
Reply:
Theexisting procedures areeither wholly orpartially different from theprocedures in
paragraphs J,K,L,MandOofAnnex 3totheAgreement onTechnical Barriers toTrade.WT/ACC/OMN/6/Add.1
Page20
Question 140.
According totheresponse toquestion 183ofdocument WT/ACC/OMN/5, theDirectorate General
forSpecifications andMeasurements (DGSM) intends inthefuture toaward theOmani Quality
Mark asasymbol oflocalmanufacturers 'commitment tothequality andsafety oftheirproducts
andcompliance withOmani standards. GATT Article II,paragraph 4,provides thatimported
products shall beaccorded treatment nolessfavourable thanthataccorded tolikeproducts of
national origin inrespect ofalllaws, regulations andrequirements affecting their internal sale.
WillOmani Quality Marks beawarded toimported products under thesame terms andconditions
asfordomestically-produced products?
Reply:
WorkonawardingOmaniQualityMarksisstillinprogress.TheQualityMarkswillbeawarded
todomestically produced products subject totheconditions thatthemanufacturers adhere tothequality
control plan, andsubject tosurprise visits ofthefactories byofficials oftheDGSM.
During these surprise inspection visits, samples aretaken fortesting toensure conformity to
quality. Themanufacturers payforthepre-licence visits, testing ofsamples andofcostofsurprise
inspection visits.
Imported products maybeawarded Omani Quality Marks provided themanufacturers inforeign
countries agree tothesame terms andconditions asdomestically produced products, i.e.payforthe
pre-licence visits byofficials oftheDGSM, payfortesting ofsamples andpayforthecostofsurprise
visits byofficials ofDGSM.
Fortheimported products Oman accepts testresults andconformity assessments managed by
accredited laboratories according toISO/IEC Guide 23-Methods ofindicating conformity withstandards
forthird-partycertificationsystems,andrulesofISO/IECGuide28-Generalrulesforamodelthird-party
certification system forproducts, andISO/IEC Guide 38-General requirements fortheacceptance of
testing laboratories.
(c) Sanitary andphytosanitary measures, including measures taken withrespect toimports
Question 141.
Weareconcerned about Oman ’simplementation oftheGCC Standards forLabelling of
Pre-packaged Foods (GS-150/1993), especially withregard toshelf life. Wearenotconvinced
thatthese shelf lifestandards arebased upon science, asrequired bytheWTO Sanitary and
Phytosanitary Agreement. Ofparticular concern istherequirement thataproduct must have
halfofitsshelf liferemaining atthetimeofimport. Thisrequirement imposes anunreasonable
barrier toimports oftableeggs, stained babyfood, cookies, canned soup, peanut butter andcertain
fruitjuices. Please provide theWTO Secretariat, forreview oftheWorking Party, translated
copies ofthescientific studies, including riskassessments, which arethebasis forthese shelf-life
requirements.
Reply:
Preparation ofGCC shelf-life standards forfoodproducts isbased onscientific references,
researches, special studies andexpiration periods applied insome other countries. Ittakes intoWT/ACC/OMN/6/Add.1
Page21
considerationthetransportation,storageandhandlingmethods,andtheclimaticconditionsinthecountry.
Food standards areissued primarily forthepurpose ofsafeguarding public health byinsuring
thesafety offoods andthereby protecting theconsumer. Forthisreason theOmani mandatory standards
facilitate trade bypreventing unfair deceptive practices especially withregards tothelabelling and
shelf-life information ofprocessed foods. Alsonofoodproducts shallbereleased ifmore thanhalf
oftheirexpiration period haspassed from thedateofproduction before theirarrival totheports of
entry (riskassessment oftheimporter), however thelocalconsumer hastheawareness toprefer the
recently produced products.
Question 142.
Please describe therequired inspection procedures thatapply toimported agricultural products
forsanitary andphytosanitary purposes. Please describe therequired inspection procedures that
apply todomestic agricultural products forthese same purposes. What agencies perform these
functions? Isthere acoordinated effort toensure thatinspections fordomestic andimported
products areequivalent?
Reply:
Imported agricultural products areexamined attheport, attheairport oratthelandborder
customs station before clearance ofgoods from customs. Itisperformed byinspectors ofthecrop
protection department oftheMinistry ofAgriculture. Random samples aretaken andexamined visually
withtheaidofahand-lens. Iffurther inspection iswarranted, samples aresenttothelaboratory for
testing.
Imported animals andanimal products aresubjected toinspection atports ofentry, airports
orlandborder stations byinspectors ofthequarantine section oftheMinistry ofAgriculture. This
inspection isalsodonebefore clearance from customs.
TheresponsibilityforinspectionofdomesticproductsrestswiththeMuscatMunicipality,Dhofar
Municipality andtheMinistry ofRegional Municipalities (forareas other thanMuscat andDhofar).
Theofficials oftheMunicipalities visitthemarkets forsurprise checks andtakesamples fortesting.
(e) State-trading practices
Question 143.
According totheresponse toquestion 33ofdocument WT/ACC/OMN/5, theproduction ofcrude
oilandnatural gasandexport ofcrude oilisundertaken byPetroleum Development Oman (PDO),
anenterprise which is60percentowned bytheOmani Government, asanoperator onbehalf
oftheGovernment. Please describe theactivity ofPDO intheform ofaresponse tothe
Questionnaire onState-trading.
Reply:
Questionnaire onState-trading inrespect ofPDO isattached hereto asAnnex 6.WT/ACC/OMN/6/Add.1
Page22
Question 144.
TheOman Refinery Company (ORC), a100percentOmani Government Commercial Limited
Liability Company, processes crude oilintorefined products andexports longresidue (fueloil).
Please describe theactivity ofORC intheform ofaresponse totheQuestionnaire onState-trading.
Reply:
Questionnaire onState-trading inrespect ofORC isattached hereto asAnnex 6.
Question 145.
Thisissueisaddressed inparagraph 119to120oftheMemorandum ontheForeign Trade Regime
(WT/ACC/OMN/2) andinquestion 209to217ofdocument WT/ACC/OMN/5, andalsointhe
questionnaire indocument WT/ACC/OMN/5/Add.2. Wewould beinterested inanyfurther
clarification oftheroleofthePublic Authority forMarketing Agricultural Produce (PAMAP)
andthePublic Authority forStores andFood Reserves. Oman hasinformed theWorking Party
inquestions 209and214(WT/ACC/OMN/5) thatPAMAP isbeing privatized. InOman ’sresponse
toquestion 214Oman states that“....theAuthority isbeing privatized andthatroleofembargoes
willvanish ”.Could Oman confirm thatoncePAMAP isprivatized itwillnolongbanimports
offruit andvegetables inseasons ofover-supply? Could Oman alsoexplain whether itsees
PAMAP ’sother functions being affected bytheprivatization, andifso,how?
Reply:
Itisconfirmed thatafteraccession totheWTO, Oman willnolonger banimports offruitand
vegetables. Itwillreplace thebansbyWTO-consistent measures.
AsPAMAP willbeprivatized anditwillnolonger exercise functions inrespect ofbansor
havejurisdiction overtheratesoftariffs forfruitandvegetables, thefuture functions oftheprivatized
body would belikethatofanyother private company.
Question 146.
WenotethatPAMAP istobeprivatized. WillPAMAP continue tobeaccorded special rights,
privileges orstatutory powers? WillPAMAP remain involved intheimporting andexporting
ofagricultural produce?
Reply:
After privatization, thePAMAP willcease toexistandthenewcompany willbeaprivate
company which willbeatparwithanyother company inOman. Thenewcompany willnothave
anyspecial rights, privileges orstatutory powers.
Question 147.
When doesOman intend tocomplete theprivatization ofthePublic Authority forMarketing
Agricultural Produce (PAMAP)? After theprivatization iscompleted, willthenewentity retain
anyofitsprevious rights andprivileges?WT/ACC/OMN/6/Add.1
Page23
Reply:
Oman hopes tobeabletocomplete theprivatization ofthePAMAP before itjoinstheWTO.
Thenewcompany willnotretain anyoftheprevious rights andprivileges ofPAMAP.
Question 148.
How doestheGovernment ofOman administer theimport quotas forfruitandvegetables that
aredetermined bythePAMAP? Isimport licensing arequirement forimportation ofthese
products? Please describe fully theprocedures fortheadministration oftheimport licences.
Reply:
Asstated inReply 93indocument WT/ACC/OMN/5, there arenoimport quotas forfruit
andvegetables. Incertain years, when thereisover-supply, theimport offruitandvegetables isbanned.
However, afterjoining theWTO, Oman willnotbantheimport offruitandvegetables. Itwillonly
takeWTO-consistent measures.
Question 149.
WenotethatPAMAP hasbeen involved inrecommending theembargo ofcertain agricultural
produce. Inthelightoftheprivatization ofPAMAP willanyother organization beauthorized
torecommend suchactions?
Reply:
No.
4. Policies Affecting Foreign Trade inAgricultural Products
Question 150.
Wenote from theanswer toquestion 50(WT/ACC/OMN/5), thatOman willprovide the
information requested inWT/ACC/4 atalaterstage. Itwould behelpful ifthisinformation was
submitted assoonaspossible.
Reply:
Thecompleted WT/ACC/4 tables willbecirculated asdocument WT/ACC/SPEC/OMN/2.
Question 151.
Inresponse toquestion 29ofdocument WT/ACC/OMN/5, theSultanate ofOman outlined its
agricultural support programmes. Please provide specific information onthemechanism Oman
intends tousetoencourage theprivate sector tobeinvolved inagricultural production, processing,
marketing andother services.WT/ACC/OMN/6/Add.1
Page24
Reply:
TheFuture Vision forOman Economy (2020) hasstressed theimportant roleoftheprivate
sector inalleconomic activities, andcalled forsupporting ittoplaythepivotal roleintheoverall
economic growth.
TheGovernment ofOman hastaken several measures which areaddressed tostrengthen and
toencourage theprivate sector toinvest inagricultural sector. These measures are:
- privatization ofpublic assets:
- transfer ofallagricultural services tobehandled bytheprivate sector. Thisinclude
provisions ofinputs andagricultural services;
- transfer ofownership oftwodates factories owned bytheGovernment totheprivate
sector.
Therefore, privatization ofsome ofthegovernment assets aregoing smoothly for
encouraging andstrengthening theroleoftheprivate sector andimproving theoperation of
agriculture sector.
- providing technical andeconomic feasibility studies foragro-industry, poultry, dateprocessing
andother projects toassist private sector inmaking decisions forinvestment;
Also, theGovernment (Ministry ofAgriculture andFisheries) offers guidance and
consultancy services totheprivate sector regarding allthetechnical aspects ofagro-industry
andassists theprivate sector tosolve allproblems inproduction andoperation.
- buildingamoderninfrastructureinbothagriculturalresearchandextensionwhicharesoessential
fortheprivate sector toinvest inagricultural production, processing andmarketing;
- enhance theawareness oftheprivate sector withrespect toproduct quality ofagriculture.
Ascanbeseenfrom theforegoing themeasures willbegreen-box measures.
Question 152.
Concerning paragraphs 141and142oftheMemorandum ontheForeign Trade Regime
(WT/ACC/OMN/2) andOman ’sresponses toquestions (WT/ACC/OMN/5) weunderstand that
there arenosubsidies forfishandanimal industries (question 50),‘farmers ’(question 249)or
‘anyagricultural product ’(question 251). Could Oman therefore provide adetailed explanation
ofthe‘minor support fortheintroduction ofthenewinnovations inallaspects ofagricultural
work’(question 249)?
Reply:
Theminor support forintroduction ofnewinnovations are:introduction ofnewvarieties of
seeds, adoption byfarmers oftheuseofimproved cropvarieties anduseoffertilizers andchemicals.
Afewfarmers ineachareaareselected andtheyareprovided withnewtypes ofseed, areexplained
theimproved cropvarieties andareencouraged tousefertilizers andchemicals. Those fewfarmersWT/ACC/OMN/6/Add.1
Page25
whoagree tothese newinnovations aresupplied seeds, fertilizers etc.freeofcost. Their farms serve
asdemonstration farms forother farmers, whobyobserving thedemonstration farms maybetempted
tofollow suitandadopt thesenewinnovations. However, thelatterarenotsupplied theseeds, fertilizers,
etc.freeofcost.
V. TRADE-RELATED INTELLECTUAL PROPERTY REGIME
1. General
Question 153.
Thecurrent protection ofintellectual property rights fortrademarks isbased ontheTrademarks
Lawandtheoneforpatents isenvisaged intheUnified Patent System oftheGCC. Could the
Sultanate ofOman provide acopyofthese lawsinEnglish, including anylegislation implementing
theUnified Patent System, ifavailable?
Reply:
Copies ofTrademarks LawandCopyright Lawhave already been provided totheWTO
Secretariat (WT/ACC/OMN/3). AcopyoftheGCC Unified Patent System isavailable forconsultation
intheWTO Secretariat (Accessions Division, Room 1126).
Omani legislation onpatents based ontheGCC Unified Patent System willbeissued.
Question 154.
Concerningthereplytoquestion255(WT/ACC/OMN/5),doesOmanintendtoapplytheprovisions
oftheBerne, Paris andRome Conventions? Towhich extent? When?
Reply:
Oman willapply allthose provisions oftheBerne, ParisandRome Conventions theapplication
ofwhich isobligatory under theTRIPS Agreement. Itwillapply these bytheendofthetransitional
period. Oman willsoonbejoining theParis andBerne Conventions.
Question 155.
Whichlawsandregulationswillbeenactedinduecourse(replytoquestion257,WT/ACC/OMN/5)?
Reply:
Laws andregulations intheareasofindustrial designs, geographical indications, layout-designs
ofintegratedcircuitsandprotectionofundisclosedinformation,andlawsandregulationsonenforcement.
Question 156.
Please describe themain features ofthelaws, regulations andprocedures putinplace tobe
compatible withArticles 42to61oftheTRIPS Agreement.WT/ACC/OMN/6/Add.1
Page26
Reply:
These laws, regulations andprocedures haveyettobeframed. Itwillbedone during the
transitional period offiveyears which Oman would needtoimplement theTRIPS Agreement.
2. Substantive Standards ofProtection
(a) Copyright andrelated rights
Question 157.
Wenote thattheCopyright Law hasbeen promulgated (replies toquestions 262and263,
WT/ACC/OMN/5). Could theSultanate ofOman specify theareas where rental rights aregranted
andtheir conditions?
Reply:
Oman ’sCopyright Lawdoesnothaveadetailed provision onrental rights inaccordance with
Article 11oftheTRIPS Agreement. Theexisting lawmaybeamended tobring itintoconformity
withtheTRIPS Agreement.
However, theexisting lawdoeshaveageneral provision onthissubject, which isArticle 11
ofOman ’sCopyright Law.
Question 158.
What aretheconditions fortheprotection ofperformers, producers ofphonograms and
broadcasting organizations, other thantheterm ofprotection? Please explain.
Reply:
There arenoparticular conditions mentioned intheCopyright Law.
Question 159.
Please describe thepoint ofattachment forforeign works.
Reply:
Wewould request anelaboration ofthequestion, before wecangiveareply.
Question 160.
How doestheGovernment ofOman intend toamend theRoyal Decree toextend theterm of
protection forcopyrighted works owned bylegal entities (i.e.book orsoftware publishers, film
production companies, orother non-personal entities) tofiftyyears?WT/ACC/OMN/6/Add.1
Page27
Reply:
When theGovernment ofOman undertakes acomprehensive review andamendment ofits
Copyright Lawtobring itintofullconformity withtheTRIPS Agreement, itwillprovide foraperiod
ofprotection of50years forlegalentities byamending Article 8oftheCopyright Law.
(b) Trademarks, including service marks
Question 161.
How doesOman intend toprotect well-known trademarks?
Reply:
Byamending Article 2ofOman ’sTrademarks Law, afterconsulting withexperts fromWIPO.
Question 162.
How doestheGovernment ofOman intend toprotect well-known marks, regardless ofwhether
ornottheyareregistered inOman?
Reply:
Please refertoReply 161.
Question 163.
HowdoestheGovernment ofOman intend toprovide owners ofunregistered well-known marks
civilremedies against infringement andcounterfeit useofsuchmarks? Willowners ofthemarks
alsohave theability tooppose orcancel theregistration ofaconfusingly similar mark?
Reply:
OmanwillbeconsultingwiththeWIPOandtheWTOSecretariattosuggestasuitableamendment
toOman’sTrademarksLawtoproviderequiredremedies.TheLawwillthenbeappropriatelyamended.
(c) Geographical indications, including appellations oforigin
Question 164.
Please outline thefuture system ofprotection ofgeographical indications.
Reply:
Oman willmake alegislation onthissubject consistent withtheprovisions oftheTRIPS
Agreement. Forthis,Oman isseeking technical assistance from WIPO andfrom WTO Member
countries.WT/ACC/OMN/6/Add.1
Page28
(e) Patents
Question 165.
How doesOman intend toprovide patent protection topharmaceutical products, agricultural
chemicals andother inventions?
Reply:
Oman willprovide patent protection topharmaceutical products, agricultural chemicals and
other inventions inaccordance withArticle 2oftheGCC Patent Regulations.
Question 166.
IstheOman Health Ministry screening unauthorized copies offoreign-patented pharmaceutical
products?
Reply:
Oman willcomply withtheprovisions oftheTRIPS Agreement inthismatter.
Question 167.
Could youplease provide copies oftheby-laws fortheimplementation oftheGCC Unified Patent
System?
Reply:
By-laws areunder preparation bytheGCC Secretariat.
Question 168.
Please specify thetime-frame fortheimplementation oftheGCC Unified Patent System?
Reply:
TheGCC countries areintheprocess oftaking adecision onthetime-frame.
Question 169.
Concerning thereply toquestion 301(WT/ACC/OMN/5), whatisthedefinition of‘public-interest ’
(incases where theGovernment oftheSultanate ofOman authorizes oneofitsagencies toexploit
apatent). What criteria areapplied todetermine “faircompensation ”?
Reply:
These issues willbeaddressed bytheGCC Patent Committee.WT/ACC/OMN/6/Add.1
Page29
(f) Protection ofplant varieties
Question 170.
What isyour understanding of“appropriate time”(reply toquestion 305,WT/ACC/OMN/5)
within which lawsandregulations concerning theprotection forplant varieties willbeestablished?
Reply:
Before theendofthetransitional period.
(g) Layout-designs ofintegrated circuits
Question 171.
Does Oman intend toenact legislation ontheprotection oflayout-designs?
Reply:
Yes,before theendofthetransitional period.
(h) Requirements onundisclosed information, including trade secrets andtestdata
Question 172.
How doesOman intend tocomply withArticle 39oftheTRIPS Agreement?
Reply:
Byhaving appropriate legalprovisions inOman ’slawforthatpurpose.
3. Measures toControl Abuse ofIntellectual Property Rights
Question 173.
Please outline thenormal legalprocedures (reply toquestion 11indocument WT/ACC/OMN/6)
applicable tointellectual property matters inthisrespect.
Reply:
Asdescribed inparagraphs 160and161ofOman ’sMemorandum (WT/ACC/OMN/2) the
Trademarks Law andCopyright LawofOman provide forimprisonment andforfinesforviolations
ofthese laws.
Under thenormal legalprocedures ofOman, either thepolice willtakecognizance ofanoffence,
register acase, make investigations andsubmit challans toacourt. Alternatively, acomplainant may
either report aviolation tothepolice ormake anapplication tothecourt.
Upon receipt ofacase, thecourt consisting ofasingle judge willheartheplaintiff andthe
defendant, askthemtomake written submissions, arguments andcounter arguments, heartheargumentsWT/ACC/OMN/6/Add.1
Page30
andrebuttals ofthelegalcounsels oftheparties, record evidence ofwitnesses, andaftercompleting
thewhole process, thecourtwillpronounce adetailed, reasoned judgement which isrecorded inwriting.
Copies ofthewritten judgment aremade available totheparties.
Anappeal against thedecision ofthejudge liestoanappellate bench ofthecourt. Thedecision
oftheappellate bench isfinal.
Question 174.
Arethere anyspecial border measures foreseen forpirated copyright goods, asmentioned in
Article 51oftheTRIPS Agreement?
Reply:
There arenoborder measures atpresent, butthese willbeprovided inOman ’snewlegislation
onintellectual property protection.
4. Enforcement
Question 175.
Furthertoquestion11(WT/ACC/OMN/6),couldtheGovernmentoftheSultanateofOmanexplain
indetail thefunctioning ofitsjudicial system intheareaoftheprotection ofintellectual property
rights?
Reply:
Please seeReply 173.
Question 176.
Itissaidthatthe“normal legalprocedures ”apply inthecaseofciviljudicial andadministrative
enforcement ofintellectual property rights. Could theGovernment oftheOman explain thedetails
ofthese “normal legal procedures ”?
Reply:
Please seeReply 173.
Question 177.
Wehave heard concerns from theIPRindustry thatstricter enforcement ofIPRlaws by
neighbouring countries intheGulfregion ismaking Oman increasingly attractive asasafehaven
forintellectual property piracy. Please describe indetail themechanisms thatarebeing used
byOman toenforce itsIPRlaws.WT/ACC/OMN/6/Add.1
Page31
Reply:
Please seeReply 173. Oman firmly believes intheprotection andenforcement ofintellectual
property rights inaccordance withtheprovisions oftheTRIPS Agreement. Itisnottruetosaythat
Oman isbecoming asafeheaven forintellectual property piracy.
VI. TRADE-RELATED SERVICES REGIME
1. General
Question 178.
What isthecurrent status ofthepreparation ofaresponse todocument WT/ACC/5? When will
itbeprovided totheWTO Secretariat forreview bytheWorking Party.
Reply:
Aresponse todocument WT/ACC/5 willbeprovided later.
Question 179.
Arethere anylegal constraints ontheestablishment oroperations offoreign financial firms,
institutions (banks, securities houses, trust fund firms, insurances)?
Reply:
There arenolegal constraints onthecommercial presence offoreign banks andfinancing
companies inOman, subject tofulfilment ofrequired procedures oftheCentral Bank andtheMuscat
Securities Market.
Asforanewinsurance company, itshould beintheform ofajoint-stock company withat
least51percentOmani participation.
Question 180.
Arethere anyrestrictions onforeign ownership indomestic financial institutions (banks, securities
houses, trust fund firms, insurances)?
Reply:
No.
Question 181.
Doforeign banks, insurances faceconstraints withregard tofunding their business activities?WT/ACC/OMN/6/Add.1
Page32
Reply:
Asforforeign banks andfinancing companies, there isnodistinction asbetween foreign and
domestic banks orapplication ofseparate lawsforforeign banks andfinancing companies (except for
limitation of49percentonforeign share).
There arenoconstraints placed onforeign banks inmobilizing funds fortheirbusiness activities,
inthecaseofextension ofcredit facilities. Infact, theforeign banks haveaclear advantage over
domestic banks sincetheirlending limits arebased ontheirglobal networth, ascompared tothemeagre
networth ofdomestic banks.
Question 182.
Doforeign securities firms havetheopportunity tobroker, dealandunderwrite onthesame basis
asdomestic firms?
Reply:
Yes,provided theyarelicensed bytheMuscat Securities Market.
Question 183.
Canforeign firms obtain seats onthestock exchange?
Reply:
Yes,onlyiftheyarejoint-ventures withOmani partners.
Question 184.
Arethere anyimpediments totheintroduction ofnewfinancial products?
Reply:
No.
Question 185.
Towhich extent doforeign firms have access totrust fund business?
Reply:
Yes,uptoalimitof49percent.
Question 186.
Areforeign financial institutions allowed tomanage assets oflocal pension funds orother
institutional money?WT/ACC/OMN/6/Add.1
Page33
Reply:
Yes,iftheyarelicensed bytheMuscat Securities Market.
Question 187.
Arethere anylimitations onportfolio investments byforeigners inlocal equity anddebt
instruments?
Reply:
There arenolimitations oninvestment byforeigners indebtinstruments. Asforinvestments
inshares, foreigners canbuyshares oflocalcompanies iftheregulations ofthecompany concerned
soallow.
2. Policies Affecting Trade inServices
(c) Qualification requirements andprocedures
Question 188.
Arethegiven examples inparagraph 173oftheMemorandum (WT/ACC/OMN/2) regarding
recognition ofqualification forforeign service suppliers (doctors, engineers, accountants) an
indicative oraconcluding list? Inthelatter case, please explain howother foreign professional
service suppliers (such aslawyers, architects, etc.)canqualify inaccordance withArticle 19of
theOman Labour Law. What services maybeprovided justbylicensed and/or registered
professionals orfirms? What aretherequirements foreigners have tomeet forgetting licensed
and/or registered?
Reply:
Theexamples areindicative andnotexhaustive. Asforother professions, adegree or
professional qualification from arecognized institution would qualify aperson under Oman Labour
Law.
(d) Monopolies andexclusive service suppliers
Question 189.
Concerning paragraphs 25(iv), point 2,and174oftheMemorandum (WT/ACC/OMN/2) ,what
isthetime-frame forOman toprivatize thetelecommunications, television/radio andpostal services
sectors? Isafullprivatization without anylimitations regarding foreign capital participation
intended?
Reply:
Thetelecommunications sector maybeprivatized bytheendoftheFifth FiveYear Plan
(1996-2000). Itisenvisaged that15percentofGeneral Telecommunications Organization willbe
privatized.
There areindications thatpostal services sector may beprivatized aftertheyear2000.WT/ACC/OMN/6/Add.1
Page34
There arenoplans atpresent toprivatize television/radio.
Asforforeign capital participation, please refertoReply 10indocument WT/ACC/OMN/5.
(h) Government procurement
Question 190.
Please putinconcrete terms theprice preference given toOmani companies andtoGCC companies
inevaluating bids. Does Oman intend todelete thisprice preference?
Reply:
Please refertoReply 235indocument WT/ACC/OMN/5.
No,Oman would notdelete preferences.
(i) Aids, grants, subsidies, taxincentives orpromotion schemes
Question 191.
Isitcorrect toconclude thatOman doesnotapply anyaids, grants, subsidies, taxincentives or
promotion schemes affecting trade inservices?
Reply:
Yes.
3. Market Access andNational Treatment
(c) Limitations onthetotalnumber ofoperations ortotalquantity ofoutput
Question 192.
What arethereasons fortheCentral Bank ofOman toimpose restrictions onthenumber of
branchesforaparticularforeignbankwishingtooperateinOman?Pleasegivefurtherinformation
regarding thisrestriction. Does Oman intend toliftthislimitation inthefuture?
Reply:
Please refertoReply 44indocument WT/ACC/OMN/6.
Ascanbeseen, there isnoparticular limitation onforeign banks; theyaregiven thesame
treatment asdomestic banks.
(d) Limitations onthetotalnumber ofnatural persons employed inparticular sectors
Question 193.
Thepercentage forOmanization tobeachieved incertain service sectors (paragraph 184ofthe
Memorandum, document WT/ACC/OMN/2) arecontradictory totheindicated liberal attitudeWT/ACC/OMN/6/Add.1
Page35
ofOman withrespect tothemovement ofnatural persons (paragraph 165oftheMemorandum).
Please explain indetail andfordifferent sectors theprocedures toobtain awork permit.
Reply:
Please refertoreplies 49,50and58indocument WT/ACC/OMN/6.
(f) Limitations ontheparticipation offoreign capital
Question 194.
TheForeign Capital Investment Law provides thatforeign services providers establishing a
commercial presence inOman must enter intoajoint venture with anOmani partner.
Additionally, theforeign investors arelimited toa49percentinterest incompanies withacapital
ofatleast RO150,000 (United States '$390,000) or65percent, ifapproved bytheMinister
ofCommerce andIndustry, upon therecommendation oftheForeign Capital Investment
Committee. Foreign investors mayobtain a100percentshare ifthetotal capital ofprojects
isRO500,000 (United States '$1.3million) andtheproject contributes tothenational economy.
Inservices sectors where market access commitments areundertaken, GATS Article XVIprohibits
limitations ontheparticipation offoreign capital interms ofmaximum percentage limitonforeign
shareholding oronthetotalvalue ofindividual oraggregate foreign investment. HowdoesOman
intend toamend theForeign Capital Investment Lawtobring itsservice sector market access
commitments intoconformity withGATS requirements?
Reply:
Weunderstand thatGATS Article XVIpermits Member countries toenterlimitations onmarket
access intheirSchedules ofSpecific Commitments. Itisourunderstanding thatmany WTO Member
countries havedonethat.
Question 195.
Only Omani nationals mayberegistered assoleproprietors fortheprovisions ofservices. In
services sectors where market access commitments areundertaken, GATS Article XVII provides
thatforeign services providers shallbetreated nolessfavourably thandomestic service providers.
HowdoesOman intend toprovide national treatment toforeign soleproprietors fortheprovision
ofservices?
Reply:
WeunderstandthatGATSArticleXVIIpermitsMembercountriestoenterlimitationsonnational
treatment intheirSchedules ofSpecific Commitments. Itisourunderstanding thatmany WTO Member
countries havedonethat.
Question 196.
What arethereasons forOman toprescribe aminimum 33percentcapital participation bythe
localOmani partner intheaccountancy field? Donationality restrictions existinanyother service
sector?WT/ACC/OMN/6/Add.1
Page36
Reply:
Thereason istoprovide Omani nationals andcompanies areasonable share inthegrowth
ofOman ’seconomy. Similar percentages existforother professional services.
Question 197.
Thelawrelating toownership oflandbyforeign companies hasbeen amended. Itnowallows
joint-stock companies with49percentforeign equity toacquire landforbusiness purposes. In
services sectors where market access commitments areundertaken, howdoesOman intend to
apply thelawontheownership oflandinamanner thatwillprovide national treatment toforeign
service providers, including those foreign service providers thatarenotjoint-stock companies
with49percentforeign investment?
Reply:
Oman willenter alimitation onnational treatment initsSchedule ofSpecific Commitments
inlinewithitslaw.
(g) Measures providing lessthannational treatment
Question 198.
According totheresponse toquestion 125ofdocument WT/ACC/OMN/5, theincome taxrates
applicable tobusinesses withforeign participation arehigher thantheratethatisapplied toOmani
businesses with noforeign participation. There isalsoaspecial rateapplicable to‘Public
Joint-Stock Companies ”,which aredefined ascompanies inwhich 51percentofthecapital is
owned byOmani citizens andthecompany hasoffered atleast40percentofitsshare forpublic
subscription.GATSArticleXVIIprovidesthatMembersshallnottreatforeignservicesandservice
providers, inrespect ofallmeasures affecting thesupply ofservices, lessfavourably thanittreats
itsownservices andsuppliers. GATS Article XVI(e) prohibits measures which restrict orrequire
specific types oflegalentity orjointventure through which aservice supplier mayprovide aservice.
How doesOman intend toamend itsdiscriminatory income taxtobring itintoconformity with
thenational treatment provisions ofGATS Article XVII?
Reply:
Please refertoreplies 194and195above.
Question 199.
How does Oman intend toamend itsspecial taxprovisions applicable to“Public Joint-Stock
Companies ”tobring them intoconformity withtheprovisions ofGATS Article XVI(e)?
Reply:
Please refertoreply 194above.WT/ACC/OMN/6/Add.1
Page37
VII. INSTITUTIONAL BASE FOR TRADE AND ECONOMIC RELATIONS WITH THIRD
COUNTRIES
2. Economic Integration, Customs Union andFreeTrade Area Agreements
Question 200.
Wewould liketounderstand more fullytheimpact oftheGulfCooperation Council onOman ’s
trade policies inrespect ofthird countries andwonder ifOman could provide more details.
Reply:
TheUnified Economic Agreement between GCC countries hasestablished aGCC free-trade
area. Theobjective ofthefree-trade areaistofacilitate trade among GCC countries andnottoraise
obstacles totrade withthirdcountries.
TheGCC hasnothadanyimpact onOman ’stradepolicies inrespect ofthirdparties. Oman ’s
tradepolicieswiththirdcountriesarebasedontheprincipleofnon-discriminatory,most-favoured-nation
treatment. Oman enjoys normal trade relations withthirdcountries.
GCC countries areworking toward having acommon-external-tariff. However, negotiations
ontheCET arestillinprogress.WT/ACC/OMN/6/Add.1
Page38
ANNEX 6
INFORMATION ONSTATE-TRADING
None ofthecompanies intheoilandgassectors intheSultanate ofOman fallwithin the
definition ofState-trading asgiven inAnnex 6andfootnoted asbeing the“Understanding onthe
Interpretation ofArticle XVII oftheGeneral Agreement onTariffs andTrade 1994”.Notwithstanding
this,thefollowing information, asrequested, isprovided without prejudice tothecurrent status of
thesectors asnonState-trading.
I. ENUMERATION OFSTATE-TRADING ENTERPRISES
Theproduction andexport ofcrude oilandlong residue areundertaken byPetroleum
Development Oman (PDO) andtheOman Refinery Company (ORC) respectively, onbehalf ofthe
Government ofOman.
Forty percentofcrude oilproduced byPDOispurchased bytheprivate shareholders ofPDO
andexported byPDOonbehalf oftheGovernment. Theremaining 60percentofthecrude oilproduced
byPDOissoldpartly as“buyback ”totheprivate shareholders ofPDOandthebalance ofthe60percent
issoldbyPDO, as“direct sales”,toother buyers forandonbehalf oftheGovernment.
Allcrude oilsalesintheSultanate ofOman areatGovernment Selling Prices (GSP).
ORC, ontheother hand, exports longresidue onbehalf oftheGovernment atmarket prices.
Other refined products, suchasgasoline (regular andpremium), jetfuel,kerosene anddiesel, aresold
locally atprices determined bytheGovernment. However, ORC isallowed toimport andsellproducts
locally atgovernment selling prices during “shut-down ”oftherefinery formaintenance work.
Notwithstanding theabove, neither PDO norORC fallwithin thecontext ofthedefinition of
State-trading, astheydonothavetheexclusive orspecial rights orprivileges which would enable them
toinfluence, through theirpurchases orsales, thelevelordirection oftheirexports.
II. REASON FOR AND PURPOSE OFTHE FORMATION OFPDO AND ORC
TheConcession Agreement, dated 7March 1967, gives PDO therights andobligations to
undertake allprojects, operations andactivities directly orindirectly related totheexploration,
development, extraction, transportation, storage anddelivery ofpetroleum and/or petroleum products
totheGovernment.
TheOman Refinery Company (ORC) wasestablished asanOmani Limited Liability Company
in1982 byRoyal Decree 7/82. Thepurpose oftheCompany istomeetthelocalmarket demand of
refined petroleum products.
ORC ischarged toobtain from theGovernment thenecessary quantities ofcrude oilforthe
production ofrefined products insufficient quantities tomeetthelocalmarket demand. Inaddition,
thecompany istocarry outthesaleofrefined products tothecompanies engaged inthedistributionWT/ACC/OMN/6/Add.1
Page39
ofthese products toconsumers. Thus, theimportation ofpetroleum products intothecountry is
prohibited. ORC is,however, exempted from thisprohibition during “shutdown ”formaintenance
work inorder tomeetlocaldemand.
Thisisstilltheobjective anditisnotcurrently foreseen thattheprohibition ontheimportation
ofthese products would berelaxed, bearing inmind thattheOman Refinery wasformed primarily
forstrategic reasons. However, inland prices ofpetroleum products aredetermined bytheGovernment.
III. DESCRIPTION OFTHE FUNCTIONING OFPDO AND ORC
PDO, asitexists now, hasaconcession toexplore andproduce crude oil,PDO alsoactsan
operator fortheGovernment intheproduction andsupply ofnatural gaswithin theSultanate. In
addition, PDO, onbehalf oftheGovernment, exports crude oil.
Besides PDO, thereareother foreign oilcompanies withconcessions intheSultanate ofOman
toexplore andexploit crude oilandnatural gasonacostrecoverable basis. These companies areallowed
toexport oilequivalent totheamount ofmoney agreed forrecovery (recoverable costs) inanyparticular
year.
Given thelevelofinvestments necessary fortheexploration andexploitation ofoilandgas,
there arecurrently noprivate traders involved inthesectors.
ORCisa100percentOmani Government commercial limited liability company. Thecompany
isresponsible fortheprocessing ofOmani crude intorefined products necessary tomeetlocaldemand.
However, thecompany exports longresidue (fuel, oil),which isassociated withtheproduction from
thisrefinery.
TheSultanate ofOman, asanoilproducing country, generates amajor partofitsrevenue
from oil.Inthisrespect, economics probably playapartindetermining thelevelofoilproduction,
taking intoconsideration thelevelofreserves and,within thecontext ofgood oilfieldpractice, the
longtermsustainability ofproduction.
Thelevelofproductionandexportofrefinedproductsaredeterminedbylocaldemand.Products
inexcess oflocaldemand (fueloil)areexported. Export prices aredetermined byinternational market
forces.
Allexports areonthebasis ofannual contracts between theGovernment (supplier) andthe
buyer.
IV. STATISTICAL INFORMATION
IMPORTS
Gasoline
(Mogas 97)IMPORTS
GasoilEXPORTS
Crude OilEXPORTS
Long Residue
Year Barrels US$ Barrels US$ Barrels US$ Barrels US$
1994 137,729 2,957,534 1,617 44,845 270,498,690 4,109,226,311 8,981,736 120,029,680WT/ACC/OMN/6/Add.1
Page40
IMPORTS
Gasoline
(Mogas 97)IMPORTS
GasoilEXPORTS
Crude OilEXPORTS
Long Residue
Year Barrels US$ Barrels US$ Barrels US$ Barrels US$
1995 635,124 18,981,59 526,251 9,063,614 284,627,434 4,652,542,012 6,359,761 94,605,756
1996 33,093 9,331,894 189,085 5,494,851 296,188,823 5,766,641,161 7,043,058 122,849,227
V. REASONS WHY NOFOREIGN TRADE HAS TAKEN PLACE
Notapplicable.
VI. ADDITIONAL INFORMATION
None.