WT/TPR/M/381/Add.1

8 March 2019

(19-1428) Page: 1/49

Trade Policy Review Body

3 and 5 December 2018

Original: English/anglais/inglés

TRADE POLICY REVIEW

NEPAL

MINUTES OF THE MEETING

Addendum

Chairperson: H.E. Mr. Eloi Laourou (Benin)

This document contains the advance written questions and additional questions by WTO

Members, and replies provided by Nepal.1

Organe d'examen des politiques commerciales 3 et 5 décembre 2018

EXAMEN DES POLITIQUES COMMERCIALES

NÉPAL

COMPTE RENDU DE LA RÉUNION

Addendum

Président: S.E. M. Eloi Laourou (Bénin)

Le présent document contient les questions écrites communiquées à l'avance par les Membres de l'OMC, leurs questions additionnelles, et les réponses fournies par Népal.1

Órgano de Examen de las Políticas Comerciales 3 y 5 de diciembre de 2018

EXAMEN DE LAS POLÍTICAS COMERCIALES

NEPAL

ACTA DE LA REUNIÓN

Addendum

Presidente: Excmo. Sr. Eloi Laourou (Benin)

En el presente documento figuran las preguntas presentadas anticipadamente por escrito y las preguntas adicionales de los Miembros de la OMC, así como las respuestas facilitadas por Nepal.1

1 In English only./En anglais seulement./En inglés solamente.

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ADVANCE WRITTEN QUESTIONS FROM MEMBERS ............................................................ 3

Canada .............................................................................................................................. 3

European Union .................................................................................................................. 4

Iceland .............................................................................................................................11

Japan ...............................................................................................................................12

Philippines ........................................................................................................................13

Saudi Arabia, Kingdom of ....................................................................................................15

Chinese Taipei ...................................................................................................................16

Thailand ...........................................................................................................................18

Additional Questions from Thailand ......................................................................................19

United States of America ....................................................................................................21

REPLIES PROVIDED BY NEPAL ....................................................................................... 23

Canada .............................................................................................................................23

European Union .................................................................................................................24

Iceland .............................................................................................................................32

Japan ...............................................................................................................................33

Philippines ........................................................................................................................34

Saudi Arabia, Kingdom of ....................................................................................................36

Chinese Taipei ...................................................................................................................39

Thailand ...........................................................................................................................41

United States of America ....................................................................................................45

FOLLOW-UP QUESTIONS BY THE EUROPEAN UNION AND REPLIES PROVIDED BY NEPAL ....................................................................................................................... 48

European Union .................................................................................................................48

Nepal ...............................................................................................................................48

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ADVANCE WRITTEN QUESTIONS FROM MEMBERS

Canada

PART I: QUESTIONS REGARDING THE SECRETARIAT REPORT PART 2 - TRADE AND INVESTMENT REGIMES: 2.3 - TRADE AGREEMENTS AND ARRANGEMENTS

Page 25 (Paragraph 2.23) In its Report, the Secretariat indicates that, since 2012, Nepal has made efforts to fulfil its notification obligations to the WTO. Canada would like to thank Nepal for submitting some notifications, including on Export Subsidies (Table ES:1) and on Domestic Support (Table DS:1). The Secretariat Report indicates that there are still outstanding notifications to be notified to the different WTO committees

and that several notifications are in the final stages of preparation before being submitted to the corresponding bodies of the WTO. Question: - Could Nepal provide Members with an update as to which outstanding notifications are in the

final stage of preparation and for which Committees?

PART 3 - TRADE POLICY AND PRACTICES BY MEASURE: 3.3.6 - GOVERNMENT PROCUREMENT Page 60 (Paragraph 3.107) The Secretariat's Report notes that "Nepal is neither a Party nor an observer to the WTO Government Procurement Agreement".

Question: - Is Nepal considering becoming an observer to the WTO Agreement on Government

Procurement?

PART II: QUESTIONS REGARDING THE GOVERNMENT REPORT Page 10 (Paragraph 2.19) In its Government Report, Nepal indicates that the new electronic government procurement (e-GP) system "has resulted in increased access of people, transparency, and gains in efficiencies in public

procurement". Questions:

- Is the new e-GP system accessible to foreign-based suppliers?

- Will the new e-GP system provide Nepal with statistical data on public procurement

spending, numbers of contracts, procurement methods, or the number and value of contracts awarded to Nepalese and foreign companies?

Pages 16 and 17 (Paragraphs 5.1 to 5.4) In its Government Report, Nepal outlines its Trade Policy 2015 and its Nepal Trade Integration

Strategy 2016 (hereinafter, "NTIS"). In paragraph 5.1, Nepal mentions that an update to its trade policy has "create[d] alignment between trade policy and NTIS". Canada also notes that Trade Policy 2015 and NTIS appear to have a number of similar and/or complementary objectives. Question:

- Could Nepal expand on the relationship, similarities and differences between Trade Policy

2015 and NTIS?

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European Union

WT/TPR/S/381 – WTO Secretariat's Report SUMMARY Paragraph 6, page 6

The Secretariat's report states that "…New laws which were in development six years ago at the time of the last TPR have yet to be presented to Parliament (including a bill on safeguards, anti-dumping and countervailing measures)…"in some cases, where the laws and institutions are in place, there is little data on enforcement, such as the laws relating to intellectual property rights, government procurement, and competition policy."

EU Question N° 1: Could Nepal please advise on the timetable for the finalization and adoption of

the Bill on safeguards, anti-dumping and countervailing measures? EU Question N° 2: Could Nepal please advise which actions and measures are envisaged to collect and provide data on enforcement in respect of such laws relating to intellectual property rights, government procurement, and competition policy?

Paragraph 14, page 7 The Secretariat's report states that "…The corporation tax system is quite complex….The excise duty system is also complicated…It appears that, in two cases (cider and wine), the excise duty on domestic products is lower than on imported products." EU Question N° 3: Could Nepal please advise on actions and measures being considered to simplify the corporation tax system and the excise duty system? Could Nepal also please advise on what

actions and measures are being taken to address the two cases (cider and wine) in which the excise duty on domestic products is lower than on imported products?

Paragraph 17, page 8 The Secretariat's report states that "…The Competition Promotion and Market Protection Act of 2007 and its Implementing Regulation of 2010 prohibit anti-competitive agreements, abuse of dominant

position, mergers and amalgamations with the intent of restricting trade, bid-rigging, and other anti-competitive activities…However, although the legal and institutional framework is in place, the Act has never been used to prosecute a case,…" EU Question N° 4: Could Nepal please advise on the measures contemplated for ensuring the implementation of the Competition Promotion and Market Protection Board legislation relating to anti-competitive practices?

1 ECONOMIC ENVIRONMENT Paragraph 1.1, page 10

The Secretariat's report states that "The Nepalese economy is highly trade-oriented and dependent on remittances (around 26% of GDP)…" and

Paragraph 1.15, page 13 "Remittances have also contributed to an appreciation of the real exchange rate, which, in turn, has affected export competitiveness and increased the trade deficit…" EU Question N° 5: How does Nepal plan to tackle this challenge?

Paragraph 1.5, page 11 The Secretariat's report states that "Nepal is a least developed country (LDC), and the Government's vision is to graduate from this status by 2022 and transition to middle income country status by 2030. To achieve these targets, an economic growth rate of 7–8% and investment in infrastructure of US$13-18 billion by 2020 is estimated to be required. The 14th Development Plan (2016/17–2018/19) targets annual average growth of 7.2% and a reduction in the share of the population

living in poverty from 21.6% currently to 17% by 2018-19."

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EU Question N° 6: Could Nepal please give specific information on the plans to achieve the targets identified to become a middle income country? Could Nepal give more information about projects related to the infrastructure investment allocation? Paragraph 1.17, page 14 The Secretariat's report states that "…The export structure remains heavily concentrated in textiles,

clothing, and agricultural products which, together, accounted for 74.6% of total exports in 2017…" EU Question N° 7: What initiatives has Nepal taken and will be taking to diversify its exports? Paragraph 1.23, page 18 The Secretariat's report states that "…under the Nepal Trade Integration Strategy (NTIS) 2016, FDI

is especially encouraged in 19 economic activities identified as strategic…"

EU Question N° 8: What is the progress of implementation of the NTIS 2016 so far? What challenges is the NTIS still facing? Paragraph 1.23, page 18 "Nepal ranks 105th among 190 economies, and is the third most competitive economy in South Asia

after India and Bhutan, according to the World Bank's Ease of Doing Business 2018 report. It improved from 107th in 2011 but is well below the record best of 94th in 2014. According to the World Bank, some of the most problematic areas for doing business are dealing with construction permits, enforcing contracts, paying taxes, getting electricity and starting a business." and Paragraph 1.24, page 18 "Nepal's potential for attracting foreign investors and fostering domestic investment remains largely

untapped. Its FDI inflows averaged US$92 million per year during 2012-2017, reaching US$198 million in 2017. FDI inward stock represented 6.9% of GDP in 2017, still among the lowest in the region. According to external sources, private investment, local and foreign, has been inhibited by

several factors, notably government instability, inefficient government bureaucracy, inadequate infrastructure, and restrictive labour regulations."

EU Question N° 9: Could Nepal provide information on what practical measures are planned, in addition to improving customs procedures, to ensure the implementation of new legislation such as the Foreign Investment Policy (2014) and Industrial Enterprises Act (2016), the Labour Act (2017), and the Special Economic Zone (SEZ)) Authority Act (2016) and the Company Act (2017) to improve the business climate and make Nepal a more attractive FDI destination? Does Nepal envisage new legislative changes to face other problematic areas? What specific steps has Nepal been taking to liberalize its services market to attract foreign direct investment (considering the fact that the

services sector contributed to 57,6% of Nepal's GDP share in 2017-18)? 2 TRADE AND INVESTMENT REGIMES Paragraph 2.8, page 21

The Secretariat's report states that "The Ministry of Industry, Commerce and Supplies is the principal ministry responsible for formulating, implementing and monitoring policies, plans and programmes

related to international trade, industrial development and investment…It also coordinates "aid for trade" initiatives, including the Enhanced Integrated Framework (EIF)…" and Paragraph 2.19, page 25 "…According to OECD Credit Reporting System (CRS) data, Nepal received US$278.8 million in 2016 in aid for trade."

EU Question N° 10: What actions are Nepal taking to effectively mobilize and achieve full potential from Aid for Trade? Paragraph 2.13, page 23 The Secretariat's report states that "Under the Plan, trade is recognized as an important factor towards achieving the objective of long-term inclusive and sustainable growth, which is also

emphasized in the NTIS 2016. In addition, the Trade Policy 2015 includes outward-looking strategies, which emphasize export promotion. The objective of the Trade Policy is to reduce the trade deficit by enhancing the supply side capacity, and to enhance access of goods, services and

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intellectual property to regional and world markets. It also aims to complement other policies, including the NTIS, and to implement WTO decisions." EU Question N°11: Regarding the reduction of trade deficit as well as the promotion of exports, which specific measures are Nepal envisaging implementing, especially in the field of supply side capacity?

Paragraph 2.23, page 25 The Secretariat's report states that "Since 2012, Nepal has made efforts to fulfil its notifications obligations to the WTO,…However, there are still outstanding notifications to be notified to the different committees,…The authorities stated that several notifications are in the final stages of preparation before being submitted to the corresponding bodies of the WTO."

EU Question N° 12: Could Nepal give an estimation of the date when the remaining notification

obligations to the WTO will be fulfilled? What kind of actions and measures are being taken to meet the outstanding notification requirements, including some relating to subsidies, domestic support for agriculture, services, customs valuation, and import licensing procedures? 3 TRADE POLICIES AND PRACTICES BY MEASURE

3.1 Measures directly affecting imports Paragraph 3.8, page 36 "With a view to enhancing trade facilitation, Nepal has made progress in improving and simplifying the custom procedures and harmonizing them with international standards. Efforts have been made through Customs Reform and Modernization Strategies and Action Plans (CRMSAPs), which were first launched in 2003. Nepal has finished the implementation of the fourth CRMSAP (2013-2017),

and started implementing the fifth in July 2017…" and Paragraph 3.12, page 37

"Other measures being taken by the authorities relating to improving customs procedures include: the development of the Nepal National Single Window (NNSW), which should be implemented by 2019; the establishment of client service centres in the DOC, with client service desks in six customs

offices; and the establishment of a trade facilitation committee by the DOC and customs offices." EU Question N° 13: Regarding the improvement of customs procedures, could Nepal give information about the current status of the Customs Reform and Modernization Strategies and Action Plans (CRMSAP) and the Nepal National Single Window (NNSW)? Paragraph 3.13, page 37

"Nepal has notified its category A, B, and C commitments under the TFA to the WTO. According to these, two measures are under Category A as implemented, eight measures under Category B are to be implemented by December 2020 without capacity-building support, and 26 measures under Category C are to be implemented upon receipt of capacity-building support."

EU Question N° 14: What kind of capacity-building support is there already to implement commitments under Category C? Could Nepal clarify whether there exists a formal/informal set-up

for donor coordination in Nepal regarding this support? Paragraph 3.34, page 42 "While nearly all applied tariffs are lower than bound tariffs, in FY 2018-19, for 38 tariff lines, the applied rate exceeds the bound rates. In addition, for 8 tariff lines, the applied rates exceed the rates which were bound for a more general group of products which were subsequently divided into

more lines. Plus, 12 tariff lines are subject to applied specific duties which could exceed the bound ad valorem rates (Table 3.4). The products affected are mainly chemical products, and some machinery including motor vehicles. According to the authorities, tariffs in excess of bindings were the unintended result of regular revisions of tariff rates which may not always have taken changes in nomenclature into account, while AVEs for specific duties depend on unit values of imports, which may change."

EU Question N° 15: Could Nepal please advise on actions and measures being taken to address the cases where the applied rates exceed the bound rates for 38 tariff lines and 8 subdivided tariff lines and the possibility of 12 tariff lines subject to specific duties, which could exceed the bound ad

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valorem rates? In particular, when is Nepal planning to lower the rates applied to chemical products, machines and alcoholic drinks below bound rates? Paragraph 3.49, page 47 "According to the authorities, Nepal does not have any anti-dumping, countervailing or safeguard legislation, and it has notified this to the WTO. In the last Review, it was stated that a bill on anti-

dumping and safeguards was being drafted. According to the authorities, the draft Safeguard, Anti-dumping and Countervailing Act is still being prepared, and is based on WTO rules, and legislation in other countries." EU Question N° 16: Could Nepal provide more specific information about the state of play of the bill on anti-dumping and safeguards that is being drafted?

3.2 Measures directly affecting exports

Paragraph 3.52, page 47 "According to the Foreign Exchange Act (1962) and Rules (1963), exports are permitted only against advance payment or a letter of credit (L/C). This provision is to ensure that the payment for the goods is received by the exporter in Nepal. Thus, at the time of export, the exporter is required to

declare that the export earnings will be repatriated to Nepal within six months in the case of transactions under L/C. There is no limit on advance payment but the buyer must remit the foreign exchange through a bank, or exchange the foreign currency with a bank in Nepal. The bank issues a certificate of advance payment to the exporter, which needs to be produced at Customs at the time of export." EU Question N° 17: Could Nepal provide information whether it has plans to increase the methods

of payment allowed, for example, to provide payment by installments or payment at some time after shipment?

3.3 Measures Affecting Production and Trade Paragraph 3.85, page 55

"…One specific trade concern was raised by other Members about Nepal's National Alcohol Regulation and Control Policy and graphic warnings and statements for alcoholic beverages." EU Question N°18: Is Nepal considering any changes to the National Alcohol Regulation and Control Policy? If so, what measures are being considered and what is the timeframe for their adoption and entry into force? If Nepal is considering such changes, could Nepal confirm that any measures related to alcohol will be made following consultation with all relevant stakeholders, will be not more trade

restrictive than necessary, and will avoid arbitrary discrimination among suppliers and among different product types, as required by the WTO GATT and TBT agreements? Furthermore, could Nepal clarify if imported alcohol products are and will be allowed to compete equitably and if Nepal intends to take more action against smuggling and abuse of duty free allowances, to protect lot codes, and to address the dangers and lost revenue of homebrew and the large illicit market?

Paragraph 3.89, page 56

The Secretariat's report states that "Under the Agriculture Development Strategy (ADS), the authorities intend to prepare a new Food Act, as well as legislation on the accreditation of standards certification bodies and national laboratories for food safety and quality. In addition, under the ADS, an independent Food Authority is to be established, while the capacity of the DFTQC, the Department of Agriculture, and the Department of Livestock are to be improved, along with improvements in inter-departmental coordination."

EU Question N° 19: Could Nepal please advise on the timeline for the development and adoption of legislation in respect of food, establish an independent food authority, and the enhancement of capacity in SPS agencies? Paragraph 3.126, page 64-65 The Secretariat's report states that "if a trademark is not used within a year of registration, the registration may be cancelled".

EU Question N° 20: Could Nepal explain whether prior use is a requirement for trademark registration?

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Paragraph 3.135, page 66 The Secretariat's report states that "although the number of filings and applications has been quite low, very few patents were granted in the review period (Table 3.22)." EU Question N° 21: How does Nepal explain the very low level of successful patent applications?

Paragraph 3.136, page 66 The Secretariat's report states that "on enforcement generally the authorities stated that there were more than 100 cases regarding the infringement of trademarks per year". EU Question N° 22: While it is stated in paragraph 3.3.7.1 (as regards copyright) that data on the

number of cases taken to the courts were not available, could Nepal provide information on cases in the Copyright Registrar's Office in the Ministry of Culture, Tourism and Civil Aviation with respect to

the infringement of copyright (per year)? Paragraph 3.89, page 75 "Under the Agriculture Development Strategy (ADS), the authorities intend to prepare a new Food Act, as well as legislation on the accreditation of standards certification bodies and national

laboratories for food safety and quality. In addition, under the ADS, an independent Food Authority is to be established, while the capacity of the DFTQC, the Department of Agriculture, and the Department of Livestock are to be improved, along with improvements in inter-departmental coordination." EU Question N° 23: Could Nepal define more clearly the new Food Act in order to know, for instance, if Nepal is going to follow the international standards and going to facilitate the process of

obtaining certificates? 4 TRADE POLICIES BY SECTOR

4.1 Agriculture and Fisheries Paragraph 4.26, page 75

The Secretariat's report states that "The Prime Minister Agriculture Modernization Project (PMAMP) is a ten-year project which started in FY 2016-17. Under the Project, agriculture production is classified into different categories depending on land area and production. For the first year, there were to be: • 2,100 small business agricultural production centres (pockets) of 10 ha each; • 150 commercial agricultural production centres (blocks) of 100 ha each; • 30 zones for agricultural business production and processing centres (zones) of 500 ha each;

and • 7 large commercial agricultural production and academic centres (super zones) of 1,000 ha

each. Each of the super zones is promoted for a specific product (paddy, fish, vegetables, potatoes, maize, apples, and wheat for the first seven)."

EU Question N° 24: Could Nepal provide more information about the measures that will be applied to achieve the targets foreseen in the Prime Minister Agriculture Modernization Project?

4.2 Mining and Energy Paragraph 4.48, page 79 "Under the Electricity Regulatory Commission Act, 2074 (2017), the Electricity Regulatory Commission (ERC) was established (replacing the Electricity Tariff Fixation Committee) and is in the

process of formation. It will recommend and advise the Government on policies regarding the generation, transmission, distribution or trade of electricity, and tariff fixation. The ERC will have the authority to determine generation and consumer tariffs and wheeling charges, and will also regulate electricity service providers." EU Question N° 25: How will the Electricity Regulatory Commission determine consumer tariffs and wheeling charges and with which policy objectives?

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Paragraph 4.52, page 80 The Secretariat's report states that "The period 2016-26 has been declared National Energy Crisis Reduction and Electricity Development Decade (Energy Emergency Decade)…" EU Question N° 26: Does Nepal have any plans to encourage and facilitate Foreign Direct Investment in the hydroelectricity as a way to ensure both economic and social returns?

Paragraph 4.54, page 80 The Secretariat's report states that "…To improve energy efficiency, the Nepal Energy Efficiency Programme (NEEP) was launched in 2010. The first phase of the NEEP was completed in June 2014. The second phase, which started in July 2014 and is being implemented by the Ministry of Energy, Water Resources and Irrigation, introduces market-based energy-efficiency services for the private

and public sectors;…"

EU Question N° 27: How do "market-based energy efficiency services" work in a context of regulated prices? Paragraph 4.56, page 81 The Secretariat's report states that "Nepal's largest available renewable energy resource is

hydropower. While economically viable hydropower capacity stands at 42,000 MW, the current installed capacity is 1,075 MW (less than 3% of its proven potential). The slow progress of hydropower development is attributable to inadequate planning and investment in the generation, transmission, and distribution capacity; and delays in project development, caused partly by legal and regulatory inadequacies." EU Question N° 28: Does Nepal have any plans to increase the percentage of investment allowed

in consultancy services? This would allow foreign companies to boost investment in energy sectors, especially hydropower, where there is a lot of investment potential.

EU Question N° 29: What kind of legal and regulatory inadequacies are hindering the development in energy projects?

Paragraph 4.63, page 82 "Nepal aims at ending basic load shedding by 2018, and achieving energy independence by 2019. By 2050, Nepal aims to achieve 80% electrification through renewable energy sources having an appropriate energy mix, and reduce its dependency on fossil fuels by 50%." and Paragraph 4.64, page 82 "The Electricity Act 2049 (1992) and the Electricity Rules 2050 (1993) govern the survey, generation,

transmission and distribution of electricity. EU Question N° 30: Could Nepal provide more information about the project foreseen to achieve the target of energy independence by 2019? Could Nepal give more information about the plans for the renewable energy policy for the coming years? Could Nepal give an update on their intentions in

terms of market organisation policy so that appropriate investment could support Nepal's long-term energy objectives?

4.6 Transport Services Paragraph 4.63, page 82 "The Civil Aviation Authority of Nepal Act 2053 (1996) ensures the participation of the private sector in the development and operation of airports…The Civil Aviation Authority of Nepal (CAAN),

responsible for the administration of air transport, has taken some initiatives to allow for PPPs. New legislation to promote private sector participation in the development, operation, and management of airports is being drafted…" EU Question N° 31: When will Nepal apply the new legislation to promote private participation in the air transport sector?

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WT/TPR/G/381 – Government's Report 3 TRADE IN GOODS Paragraph 3.8, page 11-12 The report states that "Ministry of Energy, Water Resources and Irrigation launched a white paper

in May 2018 with an aim to attain self-sufficiency in electricity through overall development of electricity sector, reduce trade deficit through the replacement of other sources of energy by electricity, expand internal and external market for electricity, and deliver sustainable, reliable and clean energy to people…The white paper also incorporates 'One Province, One Mega Project' strategy with an aim to build a mega hydro or solar project in each of the seven provinces."

EU Question N° 32: Will the "mega projects" be commissioned and funded by Nepal or do they involve domestic or foreign investors?

4 POLICY FOR AN EFFECTIVE TRADE REGIME Paragraph 5.7, page 17

The Report states that "the Intellectual Property Rights Bill is in the process of being drafted". EU Question N°33: Can Nepal provide more information on the envisaged amendments to its existing legal framework? When does Nepal intend to conclude the legislative process?

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Iceland

Question(s) On the occasion of the 11th Ministerial Conference in Buenos Aires last December more than 120 WTO Members and observers launched a joint declaration on women and economic empowerment that aims inter alia at sharing best practices and working together at the WTO to remove barriers for

women's economic empowerment and increase their participation in trade.

The report prepared by Nepal for this Trade Policy Review (WT/TPR/G/381) points out that the Government of Nepal has set objectives of achieving high economic growth, balancing and strengthening the economy, and making it more inclusive and just, in the interest of all Nepali. The report also notes special efforts in the IT sector to enable Small and Medium Enterprises in Nepal, especially owned by women and young entrepreneurs, to grow globally.

Iceland has the following questions:

- Could Nepal provide more information on these initiatives and whether or how they give particular attention to women, or gender equality considerations?

- What is the participation of women in the economy in Nepal?

- Have particular barriers that limit women's participation in trade been identified?

- Has Nepal implemented any particular measures to encourage women's participation in trade and promote women's entrepreneurship, or are such measures being developed?

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Japan

Report by the Secretariat (WT/TPR/S/381) 3. TRADE POLICIES AND PRACTICES BY MEASURE 3.3.7 Intellectual property rights 3.3.7.2 Trademarks

(Question 1 Paragraph 3.126, page 64) Japan would like to know whether the registration/application of a trademark will be refused or canceled, if the trademark is identical or similar to a trademark well-known in the foreign countries as indicating goods or services of another person.

3. TRADE POLICIES AND PRACTICES BY MEASURE

3.3.7 Intellectual property rights 3.3.7.5 Enforcement (Question 2 Paragraph 3,136, page 66) We would like to know if effective border measures including the IP registration system at customs are in place.

We also would like to know the result of border measures (e.g., the number of infringing goods seized by the custom at the border) in the past 3 years. 4. TRADE POLICIES BY SECTOR 4.6 Transport Services 4.6.3 Tourism

(Question 3 Paragraph 4,142, page 98)

According to the report by the Secretariat, "no permission is required for the establishment of foreign companies or foreign investment in travel agencies, trekking agencies, water rafting, pony trekking, horse riding, or tourist lodging."In the WTO document WT/ACC/NPL/16, however, it is indicated that no permission is granted for the establishment of foreign companies or foreign investment in the

above activities. Japan would like to confirm: (1) Whether the establishment of foreign companies and foreign investment in the tourism

services are allowed in Nepal? And if so, (2) Whether permission is required?

Report by the Government /WT/TPR/G/381) 5. POLICY FOR AN EFFECTIVE TRADE REGIME

5.4 Intellectual Property Rights (Question 4 Paragraph 5.4, page 17)

According to the report by the Government, Nepal formulated its first National Intellectual Property Policy in 2017. What are the prospects for improving the IP system in Nepal based on this policy? In particular, does Nepal have any plans to introduce a secret design system or expand the duration of rights? (Question 5 Paragraph 5.7, page 17)

According to the report by the Government, the Government will revise the existing legal framework for patents, industrial designs, trademarks, utility models, geographical indications, traditional and indigenous knowledge, folklores, traditional knowledge, integrated circuits, plant variety protection, trade secrets and biodiversity, based on the National Intellectual Property Policy 2017. Could you provide us with the basic policy and outline of these revisions?

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Philippines

PART II: QUESTIONS REGARDING THE GOVERNMENT REPORT III. TRADE IN GOODS Page 10 (Para 3.3) To further boost industrial production, ensure a competitive and investment-friendly environment,

and simplify administrative procedures, the Government has created industrial estates and Special Economic Zones (SEZs). It is carrying out efforts related to infrastructure development to establish at least one industrial zone, and special economic zone in each province in coordination with provinces and in partnership with private sectors. There are 10 industrial estates at present and the Government intends to add further nine estates. Similarly, while one SEZ is already operational, feasibility studies are being carried out to establish further eight SEZs. Product-specific zones for

footwear, carpet, leather goods, handicrafts, and readymade garments are also being planned. The

Government has plans to set up industrial villages in all local levels. Importantly, it is also planning to establish cross-border economic zones. Question: 1. To increase trade, any economy requires Special Economic Zones (SEZs). There are 10 industrial estates in Nepal and out of which, only 1 SEZ is operational. What is the reason why

only one is operational and what are the next steps in order to attracts more locators in the SEZs? Page 12 (Para 3.9) Nepal's Mineral Policy seeks to sustainably utilize its immense potential in mineral resources and contribute to making the economy more competitive, dynamic and prosperous. Government aims to collaborate with the private sector in exploring, excavating and processing potential minerals and precious metals. Nepal lies in the centre of the 2,500 km Himalayan belt, which has favourable

geography for various mines and minerals and hence offers a plethora of unparalleled opportunities for investors in the mining and mineral sectors. With 83% of the region being mountainous and hilly

territory, Nepal is abundant in iron, limestone, talc, red clay, granite, marble, gold, precious and semi-precious stones (tourmaline, aquamarine, ruby and sapphire) and other construction minerals. Question:

2. Can Nepal elaborate on its commitment to promote mining and the minerals sector? What policies and initiatives are in place? IV. TRADE IN SERVICES Page 14 (Para 4.7) Nepal recognizes the role of ICT as an enabler and driver of economic growth. Accordingly, there is

an emphasis to focus the majority of domestic and foreign investment in the ICT sector. The Government aims to improve public service delivery by promoting the use of ICT to modernize areas, including public administration, professional areas, public and private services, database, statistics, financial transactions as well as for biometric information and national identity card.

Question: 3. The current government of Nepal recognizes the role of ICT in economic development. ICT

has also been shortlisted as one of the three priority service sectors with the most potential for exports. However, the UNCTAD's e-trade readiness assessment report of Nepal highlight areas that needs more improvement in ICT such as mobile network coverage, international internet bandwidth, and secured internet services. What are the steps being taken and/or planned in terms of policies and measures for the development of ICT in Nepal?

VII. TRADING ARRANGEMENTS Page 20 (Para 7.1) Nepal envisages balanced and responsible international relations that respect various bilateral, regional, and multilateral agreements. It believes in maintaining amicable and mutually beneficial trade relations with its neighbouring countries, China and India which are its largest trading partners.

Nepal and India share open borders and have a multi-dimensional friendly relationship in various

economic spheres, with trade and transit being core elements. India is not only Nepal's largest trading partner with almost two-thirds of share in Nepal's total trade but also the largest market for

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Nepali goods consisting of almost 57% of its total export. Total trade volume with India in FY 2016/17 was NRs 687.52 billion out of which Nepal's exports to India was worth NRs 41.5 billion whereas imports were NRs 646.02 billion. Major products exported to India are coffee, vegetables, cardamom, juices & iron and steel whereas major imports are fuel (petroleum, diesel, and kerosene), vehicles & cement clinkers, etc. Nepal's trade deficit with India has been an increasing challenge, a fact that is recognized by both governments. Therefore, efforts are underway to revise the terms of

various bilateral co-operations to make bilateral relations more equal and respectful and undertake various reforms to modernize and align trade relations with current requirements of international trade. Question: 4. Please share the priority countries that Nepal wants to enhance its trade relations with? What

is Nepal's policy towards ASEAN? Is Nepal currently looking at forging any agreement with ASEAN or with the Philippines? If so kindly specify.

VIII. CONSTRAINTS Page 21 (Para 8.1) Nepal still faces several constraints to economic growth, some of which are being addressed through

the Government's sincere efforts while others continue to be challenging for its development. Nepal's most serious constraint is its geography. On the one hand, trade and transit costs are higher for Nepal as it is a landlocked country. On the other hand, Nepal's difficult terrain due to geophysical features of high mountains and hills adds to the costs of developing infrastructure, promoting production, and doing business. Question:

5. Since Nepal's most serious constraint is its geography, and trade and transit cost are higher, can Nepal specify plans on how to address trade facilitation gaps?

Page 21 (Para 8.3) Nepal's trade performance has also been affected by inadequate economic, social, and trade-related infrastructure. Challenges included in the areas of road infrastructure, vocational and technical

education and certification mechanisms. Nepal is yet to fully utilize its potential for exporting various products by making use of concessional market access provided by many of its trading partners. Moreover, Nepal has not been able to take full advantage of incentives provided to LDCs, including GSP and DFQF initiatives, mostly because of stringent and complex requirements that needs to be fulfilled as an exporting country, and partly due to supply-side constraints. Question:

6. Based on the report, Nepal has not been able to take full advantage of incentives provided to LDCs, including GSP and DFQF initiatives because of stringent and complex requirements that needs to be fulfilled as an exporting country. What are the steps that the current Nepal government is taking to overcome these challenges and ways in improving its development status in view of entering a middle-income country by 2030?

IX. OPPORTUNITIES AND WAY FORWARD

Page 22 (Para 9.2) The Government has presented its vision for Nepal's transformative economic growth and aims to create an economy that fosters innovation, trade and investment. To support this vision, going forward, Nepal is firm in protecting, strengthening and positively utilizing democratic achievements. The Government aims to build a country that is free from any type of corruption, and that respects

human and fundamental rights. To this end, Nepal has vowed to adopt policy of zero tolerance against corruption. Nepal is already taking measures to break restrictive business practices. Question: 7. Nepal has vowed to adopt policy of zero tolerance against corruption. In this case, what are the recent measures taken by the government in order to provide excellent business environment for foreign investors?

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Saudi Arabia, Kingdom of

3.3.2 - WT/TPR/S/381 Standards and other technical requirements 3.78, Page 54 Draft standards and technical regulations relating to goods and services, except for food and

pharmaceuticals, are prepared by the NBSM. A working draft is first prepared by a subcommittee of one of the NBSM's technical committees. Once approved by the technical committee, the draft is circulated, with two months for comments. At the end of the comment period, the draft is reviewed and, if necessary, amended by the relevant technical committee and/or subcommittee. When finalized, the draft is sent to the NCS, which is chaired by the Minister for Industry, Commerce and Supplies, for approval and, once approved, it is published as a Nepal Standard and is available from

the Department of Printing. All committees, including the NCS, include representatives from

stakeholders including the private sector, consumers, and academia. The NBSM intends to publish its work programme on its website. Once approved, the Government may make standards mandatory, in which case they are published in the Nepal Gazette. We would like to refer that there are some simple inquiries about (3.78).

• The amendments in this item indicate that the ministry may impose the application of approved Nepali Standards, and we want to know the procedures in which the standards are to be imposed, and are the imposed standards conformed to the international standards? Or is it specific to the State of Nepal?

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Chinese Taipei

PART I: REGARDING THE SECRETARIAT REPORT (WT/TPR/S/381) I. Economic Environment 1.3.2 Trends and patterns in FDI

Page 18 (Para 1.23) According to the World Bank, some of the most problematic areas for doing business are dealing with construction permits, enforcing contracts, paying taxes, getting electricity and starting a business. Question(s):

What measures is Nepal undertaking to simplify the most problematic areas as identified by the

World Bank regarding dealings with construction permits, enforcing contracts, paying taxes, getting electricity and starting a business? Page 18 (Para 1.24) Nepal's potential for attracting foreign investors and fostering domestic investment remains largely untapped. (…). According to external sources, private investment, local and foreign, has been

inhibited by several factors, notably government instability, inefficient government bureaucracy, inadequate infrastructure, and restrictive labour regulations. Question(s): What measures is Nepal undertaking to deal with the various factors like inefficient government bureaucracy, inadequate infrastructure and restrictive labour regulations to exploit untapped local and foreign investment potential?

II. Trade and Investment Regime

2.4 Investment Regime Page 30 (Para 2.38) The Foreign Investment and Technology Transfer Act (FITTA), 1992 and the Industrial Enterprises

Act, 2016, provide the legal basis for regulating, administering, and facilitating FDI. In addition, several other laws also affect FDI, including: the Foreign Investment Policy, 2014; the Company Act, 2006 (amended in 2017); the Banks and Financial Institutions Act, 2017; the Labour Act, 2017; the Special Economic Zone (SEZ) Authority Act, 2016 (and the SEZ Authority Regulation, 2017); and the Environment Protection Act, 1997 (and the Environment Protection Rules, 1997). Question(s):

Are there minimum amounts of foreign investment in any sector? Page 31 (Para 2.40) The other features of the FITTA include the possibility of technology transfer in all the industrial

sectors, a guarantee for the repatriation of foreign currencies, business and residential visas for foreign investors, and provisions for dispute settlement.

Question(s): Are foreign investors required to obtain permission from any relevant authority or authorities for repatriation of foreign currencies? Please provide further details on the procedures which the foreign investor must follow in order to repatriate foreign currencies and the authority/authorities involved in the process.

III. Trade Policies and Practices by Measure 3.1.1 Customs procedures, valuation, and requirements Page 34 (Para 3.2, Table 3.1 – Documents required for imports) Table 3.1 indicates that documents required as per the prevailing law regarding a recommendation, licence, or certificate from any institution are required for imports.

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Question(s): Could Nepal please specify the names of the institutions that issue letters of recommendation, licences or certificates as required for imports? Page 37 (Para 3.16) If the transaction value declared by an importer is less than the value determined by the customs

officer, the customs officer may: (i) clear the goods by collecting 50% additional customs duty on the difference in value; or (ii) purchase the goods by paying an amount equalling the declared transaction value, plus 5%. Question(s): Could Nepal please explain the basis for customs officers' determinations of the values of imported

goods and whether any guideline for such has been established?

III. Trade Policies and Practices by Measure 3.3.6 Government procurement Page 60 (Para 3.107) Nepal is neither a party nor an observer to the WTO Government Procurement Agreement.

Question(s): Has Nepal considered requesting to become an observer to the WTO GPA? III. Trade Policies and Practices by Measure 3.3.7 Intellectual property rights

Page 64 (Para 3.125) Ownership of a trademark is conferred upon registration with the Department of Industry, with no specific provisions in the Act relating to protection for unregistered trademarks, including well-known

and famous marks. However, someone who has submitted an application to register a trademark in another party to the Paris Convention may claim priority when filing an application for the same trademark in Nepal.

Question(s): Has Nepal considered providing any sort of protection to well-known trademark owners in addition to requesting a right to claim priority when filing applications? Page 64 (Para 3.126) In addition, if a trademark is not used within a year of registration, the registration may be cancelled.

Question(s): Could Nepal please elaborate on the mechanism it has set forward to track whether or not any registered trademark has been used within the mentioned time frame of one year of registration? Other related information and data will also be appreciated.

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Thailand

PART I: QUESTIONS REGARDING THE SECRETARIAT REPORT 2. Trade and Investment Regimes 2.3.2 Regional and preferential agreements Para 2.24 Page 26

Question: It would be appreciated if Nepal could kindly provide more details on; (1) the current status of the Nepali 17 bilateral agreement with the trading partners (2) Nepali future plan to initiate FTA negotiations with trading partners. 4. Trade Policies by sector

4.2 Mining and Energy

Para 4.48 Page 79 Question: Regarding the authority of the Electricity Regulatory Commission (ERC), it would be appreciated if Nepal could elaborate on "regulating electricity service providers" what is the scope of its authority as well as whether it includes granting permission for foreign electricity service providers? If so, what are the procedures?

4.5 Telecommunications and Postal Services Para 4.110 Page 92 Question: It would be appreciated if Nepal could kindly provide more detailed information on the new Telecommunications Act, the advantages and anticipated impacts of this new Act on the liberalization of this sector.

4.6 Transport Services

4.6.1 Road Transport and railways Para 4.128 Page 95 Question: It would be appreciated if Nepal could kindly provide more detailed information on "the

basis of reciprocity", procedures, and regulations of such activity. PART II: QUESTIONS REGARDING THE GOVERNMENT REPORT 4. TRADE IN SERVICES 4.1 Tourism

Para 4.3 Page 14 Question: Regarding the development related to tourism industry mentioned above, would Nepal welcome foreign investment to participate in the development? If so, what are the requirement and

procedure? Moreover, such development would definitely render projects and bring more tourists into the country, which could have impacts on nature and society. In this case, would Nepal have any plans or regulations to ensure the balanced, healthy and sustainable developments between

environmental protection and promoting economic growth that might have a negative effect from tourism? Para 9.9 E-Commerce Page 24 Question: What would be a guideline of Nepal's ICT infrastructure system development and

e-Payment system in next 10 years in order to create more trade opportunities in E-Commerce area?

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3. TRADE POLICIES AND PRACTICES BY MEASURE 3.1 Measures Directly Affecting Imports 3.1.3 Tariffs 3.1.3.3 Tariff bindings Page 42 Question: Since there are 38 Tariff lines that have the applied MFN rates exceed the bound rates,

could Nepal please clarify more about the reasons that applied MFN rates exceed the bound rates? 4. TRADE POLICIES BY SECTOR 4.1 Agriculture and Fisheries 4.1.3 Agriculture policies Page 71

Question: Nepal has implemented the subsidy namely CISE 2070 which aims to provide cash intensive for exports. Accordingly, does the practice of CISE 2070 conform with the WTO rules?

3.3.7 Intellectual property rights Para 3.117 Page 62 Question: Since there were 605 varieties of 65 crops registered and released in Nepal, Thailand

has the following questions to ask Nepal: 1.1 What are the purposes of the variety registration? 1.2 What kind of crop can be registered in Nepal? 1.3 Who can apply for the registration? 2. Thailand would like Nepal to give more details about Intellectual Property Protection in Plants. 2.1 What kind of new plant variety protection system will be used in Nepal? 2.2 Can Nepal be UPOV member?

Additional Questions from Thailand

PART I: QUESTIONS REGARDING THE SECRETARIAT REPORT 2.3.2.1 South Asian Free Trade Area (SAFTA) and South Asian Association for Regional Cooperation (SAARC) Agreement on Trade in Services (SATIS)

Para 2.27 Page 27 Question: The Parties involved in the Agreement of South Asian Free Trade Area (SAFTA) comprise two groups of Developing Countries (India, Pakistan, and Sri-Lanka) and Least Developed Countries (LDCs) (Nepal, Bhutan, Bangladesh, Maldives, and Afghanistan). In terms of Market Access (MA), LDCs including Nepal have the right to offer the condition of Deviation for limited number of Sensitive or Exclusion List of products to each member differently. Therefore, in practice, how could SAFTA

implement the preferential tariff differentials on the same product that offer in MA to different countries? Also, how to implement the verification of Rule of Origins to confer each country of origin status in order to prevent the circumvention from other countries?

PART II: QUESTIONS REGARDING THE GOVERNMENT REPORT 4.2 Transport

Para 4.6 Page 14 Question What is Nepal's policy on foreign investment and foreign business undertakings in freight forwarding services, logistics and transport services, and multimodal transport services? Are there any laws, regulations and limitation measures applied to such services? If any, please provide a detailed explanation.

PART I: QUESTIONS REGARDING THE SECRETARIAT REPORT Para 3.16, Page 37 "3.16 If the transaction value declared by an importer is less than the value determined by the

customs officer, the customs officer may: (i) clear the goods by collecting 50% additional customs

duty on the difference in value; or (ii) purchase the goods by paying an amount equaling the declared

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transaction value, plus 5% (since May 2018, this option no longer requires the prior approval of the

Director of the Department of Customs)" Thailand's Comments

According to the Agreement on implementation of article VII of the General Agreement on Tariffs and Trade 1994 (GATT) (Customs Valuation Agreement: CVA) Customs value should be specified by in order as follows:

(1) Transaction Value (2) Transaction Value of the Identical Goods (3) Transaction Value of the Similar Goods (4) Deductive Value (5) Computed Value (6) Fall Back Method

If the customs officer has a reason to doubt on the value declared by importers and the transaction value cannot be determined by the 1st method (Transaction Value), the Customs shall use the 2 to 6 method respectively. In the case of Nepal, customs officer releases imported goods by collecting 50% additional customs duty on the difference in value, or purchasing the goods by paying an amount equaling the declared transaction value, plus 5% are not in accordance with above mentioned CVA. The determination of customs valuation above arbitrary or fictitious is contrary to the agreement.

However, if the determination of customs value of imported goods or customs officer has reason to doubt on customs value, causing the delay for the determination of such customs value according to the Article 13 of CVA, importers shall nevertheless be able to withdraw goods from customs custody by providing sufficient guarantee or deposit, covering the maximum amount of customs duties for such imported goods. It is recommended that the legislation of each Member shall make

provision for such circumstances to comply with the Article 13 of CVA. To this end, Thailand would

like to encourage Nepal to consider making provision of appropriate law according to Article 13 of CVA.

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United States of America

Questions based on the Secretariat Report (WT/TPR/S/381) 3 TRADE POLICIES AND PRACTICES BY MEASURE 3.1.1 Customs procedures, valuation, and requirements

Page 37, Paragraph 3.12: Nepal is working to implement the Nepal National Single window by 2019.

• Which customs procedures and forms will be included in the initial functionality of the Nepal National Single Window in 2019?

Page 37, Paragraph 3.13: Nepal has notified its category A, B, and C commitments under the

WTO TFA.

• We would be interested in understanding Nepal's TACB needs, so when will Nepal notify the specific capacity-building support needed to implement the 26 measures identified as category C?

Page 37, Paragraph 3.16: Nepal states that "if the transaction value declared by an importer is less than the value determined by the customs officer, the customs officer may: (i) clear the goods by collecting 50% additional customs duty on the difference in value; or (ii) purchase the goods by paying an amount equaling the declared transaction value, plus 5% (since May 2018, this option no longer requires the prior approval of the Director of the Department of Customs)."

• Can Nepal clarify the actions that customs officials may take in a transaction value dispute?

• Is it correct that the customs officer may purchase the goods (from the importer) by paying

an amount equaling the declared transaction value, plus 5%? 3.3.2.1 Standards and Technical Regulations

Page 54, Paragraph 3.78: The Secretariat Report describes Nepal's domestic procedures for standards development.

• Could you please clarify how Nepal prepares its national plans for standards development?

• Does Nepal publish a work program (as required under subparagraph J of Annex 3 to the TBT Agreement) that outlines its current plans?

Page 54, Paragraph 3.78: The Secretariat Report notes that a draft standard "is circulated, with two months for comments."

• To whom is the draft document circulated? • Do other WTO Members have an opportunity to comment at this point?

• Does Nepal publish the draft standard for other trading partners to consider? 3.3.5 State trading, state-owned enterprises, and privatization

Page 58, Paragraph 3.103: The Secretariat Report notes that Nepal has not made any notifications to the WTO relating to state-trading enterprises.

• Please identify when Nepal will provide a notification on its use of state-trading enterprises.

3.3.6 Government Procurement Page 60, Paragraph 3.107: The Secretariat Report notes that Nepal is neither a party nor an observer to the WTO Government Procurement Agreement. Becoming an observer to the GPA would allow Nepal to engage with other countries on matters relating to government procurement and would not require Nepal to take on any obligations.

• Will Nepal consider becoming a GPA observer?

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Page 61, Paragraph 3.109: The Secretariat Report notes that while discrimination in government procurement is prohibited, goods manufactured in Nepal should be acquired if the difference in price compared to foreign goods is not more than 10%. Additionally, Table 3.17 notes that international bidding occurs when the goods or services are not available in Nepal, or no bids were received under national bidding, or a donor requires international bidding, or the contract is complex and requires international bidding.

• Is the prohibition on discrimination part of the Public Procurement Act 2007?

• If a procurement is using national bidding, does that mean only Nepali suppliers can

participate in the procurement?

3.3.7 Intellectual Property Rights

Page 63, Table 3.18: Regarding Table 3.18 and sections 3.3.7.3-4 in WT/TPR/S/381, we have several questions:

• Could the GoN detail under which circumstances a patentee may not enjoy a patent term of 20 years?

• Does the GoN have plans to provide for plant variety protection and protection for

undisclosed test and other data?

• Could the GoN explain its filing and grant data for industrial designs and patents? The number of grants appears especially low for patents, compared with the numbers of applications filed.

• What is the status of the applications noted to have been filed, but not granted or in force

since 2011?

• Finally, is injunctive relief available in cases when patent infringement has been found by a

court?

Questions based on the Secretariat Report (WT/TPR/S/381) 5 POLICY FOR AN EFFECTIVE TRADE REGIME 5.4 Intellectual Property Rights Page 17, Paragraph 5.7: The GoN indicates that the IP Rights Bill is in the process of being

drafted. We commend the GoN for its efforts to revise and update its industrial property law.

• Could Nepal share a copy of the draft Bill for the purpose of review and comments?

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REPLIES PROVIDED BY NEPAL

Canada

Question 1: Could Nepal provide Members with an update as to which outstanding notifications are in the final stage of preparation and for which Committees?

Nepal is fully committed to WTO notification obligations. It is putting its every possible effort to fulfill the obligations. As the process is technical and involves multiples agencies, the MoICS is collecting necessary data and mobilizing WTO focal points to complete the due notifications. Question 2: Is Nepal considering becoming an observer to the WTO Agreement on Government Procurement?

Procurement system of Nepal has been governed by the Public Procurement Act, 2007 and Regulations, 2008 which ensures competition, transparency and predictability. However, Nepal is examining the impacts of becoming a GPA observer. Question 3: Is the new e-GP system accessible to foreign-based suppliers?

The new e-GP system is accessible to foreign-based suppliers as well. Foreign suppliers should be registered in the e-GP system online. Then, they can participate in the e-GP process equally with Nepali suppliers or vendors. Will the new e-GP system provide Nepal with statistical data on public procurement spending, numbers of contracts, procurement methods, or the number and value of contracts awarded to

Nepalese and foreign companies?

The new e-GP system provides the related statistical data on public procurement spending, numbers of contracts, procurement methods, etc. regarding goods, works and consulting services. However, details of some sectors such as forest products, minerals, ration, etc. are not shown in the

e-GP system. Question 4: Could Nepal expand on the relationship, similarities and differences between Trade Policy 2015 and NTIS? The Trade Policy, 2015 is the guiding framework and provides a future course of action for trade

related areas. On the other NTIS is the primary strategy for the implementation of Trade Policy. NTIS supports in achieving the overarching goals and objectives of the Trade Policy.

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European Union

Question 1: Could Nepal please advise on the timetable for the finalization and adoption of the Bill on safeguards, anti-dumping and countervailing measures? The draft Bill on Safeguard, Anti-dumping and Countervailing has been drafted in close consultation

with the concerned ministries and stakeholders. The draft Bill will be submitted to the parliament after fulfilling the remaining process. Question 2: Could Nepal please advise on which actions and measures are envisaged to collect and provide data on enforcement in respect of such laws relating to intellectual property rights, government

procurement, and competition policy?

To ensure the enforcement of laws and institutions, the concerned Government agencies have been executing the legal provisions as stipulated in the relevant laws and regulations. The Government has accorded high priority to strengthen existing monitoring and reporting mechanism. At the federal level, concerned Ministries and relevant government agencies are responsible for collecting and providing data on enforcement. In addition, online reporting of progress is also being exercised by

them. Question 3: Could Nepal please advise on actions and measures being considered to simplify the corporation tax system and the excise duty system? To simplify the tax system (including corporate tax and excise duty), Nepal is drafting a Unified Tax

Code integrating different tax related laws. The Unified Tax Code is expected to be simpler, transparent and tax payer friendly.

Could Nepal also please advise on what actions and measures are being taken to address the two cases (cider and wine) in which the excise duty on domestic products is lower than on imported products?

The excise duty of goods imported is same as excise duty of similar goods produced internally. It is our understanding that the products under question are our traditional products and not identical to imported ones. Question 4: Could Nepal please advise on the measures contemplated for ensuring the implementation of the

Competition Promotion and Market Protection Board legislation relating to anti-competitive practices? The Department of Commerce, Supplies and Consumer Protection under the Ministry of Industry,

Commerce and Supplies is responsible for enforcement, monitoring and supervision of the Act. As per the Act, any person or enterprise with information relating to restrictions on competition may make a complaint to the Competition Promotion and Market Protection Board or to a designated

Market Protection Officer. The Government is also carrying out sensitization and awareness programmes. The Department of Commerce, Supplies and Consumer Protection has been carrying out enforcement, monitoring, and supervision activities as per the Act. Question 5: How does Nepal plan to tackle this challenge?

Nepal plans to tackle this challenge by enhancing supply side capacity and promoting exports of goods and services through trade diversification, augmenting investment in productive sectors, creating FDI friendly environment, enhancing production and productivity in agriculture and manufactured sectors, strengthening of services sector including tourism, increasing hydroelectricity, upgrading unskilled workers to skilled professionals, and encouraging domestic

employment creation. One of the major challenges, being a land locked country; Nepal is facing lack

of access to sea making its export less competitive.

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In this context, Trade Policy 2015, NTIS 2016, National IP Policy, 2017, Industrial Enterprises Act, 2016, etc. have been adopted and draft IP Bill, draft Foreign Investment Bill and draft of Industrial Regulation and other relevant policies and laws are being prepared. Question 6: Could Nepal please give specific information on the plans to achieve the targets identified to become

a middle income country? With the promulgation of the Constitution, 2015 and the completion of election at all three levels: federal, provincial and local, Nepal has committed to transfer its economy to make it production- focused, employment-generating, self-sufficient, and export-oriented. Various reform initiatives are carried out which opens further avenues for achieving socio-economic development. Nepal is

formulating 15th Periodic Plan with long-term vision of "Prosperous Nepal, Happy Nepali".

To this end, Nepal has a strategy to become a middle-income country by 2030 focusing on: strengthening of private, co-operative and community sector; development of the provincial and local economy; provision of quality life-long education and health services; safe and sustainable urban and rural settlement planning; commercialization of the agriculture sector through the use of advanced technology; creation of equitable employment opportunities; strengthening governance

system, etc. Could Nepal give more information about projects related to the infrastructure investment allocation? For the LDC Graduation of the country and to elevate to middle income country from LDC by 2030, Nepal has taken various initiatives in infrastructural development. The 14th development Plan of Nepal has prioritized Energy, Transportation, Urban Development, Information and

Telecommunication as major infrastructure sector. There are 21 major National Pride Projects all of which are related to infrastructure.

The finance needs to be invested up to 2020 every year in major infrastructure area, e.g. transportation, electricity, ITC, water and sanitation and irrigation is estimated in the proportion of 8.2 % -11.8% of the GDP.

In monetary value, the sector's requirement includes transportation USD 3.7-5.5 billion, electricity USD 5.3-7.0 billion, ITC USD 0.4-0.6 billion, water and sanitation USD 0.4-0.5 billion, and irrigation USD 1.6-2.3 billion. In aggregate, each year those sectors require USD 13-18 billion. The estimates show that Nepal needs for the infrastructure investment 8-12% of its GDP until 2020. Question 7:

What initiatives has Nepal taken and will be taking to diversify its exports? Over the years, Nepal has taken series of initiatives to promote and diversify the exports so as to achieve sustainable and inclusive economic growth, poverty reduction, and improvement in the living standard. Nepal Trade Integration Strategy, (NTIS) 2016 is Nepal's third generation trade integration

strategy. NTIS 2016 seeks to address the outstanding trade and competitiveness challenges confronted by the country's export sector.

The Strategy focuses on identifying actions to address constraints in a number of cross-cutting areas such as institutional capacity building for trade, trade and transport facilitation, sanitary and phyto-sanitary measures etc. NTIS 2016 has been formulated in close complementary with Trade Policy, 2015. The Prime Minister Agriculture Modernization Program is underway to commercialize the agriculture sector and increase its productivity. Various production-focused and infrastructure

related programs are being launched to develop the industrial sector which help to diversify the exports. Question 8: What is the progress of implementation of the NTIS 2016 so far? What challenges is the NTIS still facing?

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The achievement and challenges of NTIS are as follows: Achievements: ● Mainstreamed trade policies, programmes and activities of line ministries and agencies; ● Provided a forum to enhance collaboration among Government, private sector, development

partners, civil society and other stakeholders on trade-related matters;

● Instrument to create awareness among farmers, producers and product associations on priority export potential products and services;

● Support from the Enhanced Integrated Framework (EIF) has been mobilized for value chain development of Pashmina, Ginger, and Medicinal and Aromatic Plants (MAPs);

● Technical and financial support from development partners, including European Union, World Bank, Asian Development Bank, GIZ, DANIDA, DFID, and USAID, has been mobilized to focus

on a number of key actions identified in NTIS 2010 Action Matrix.

Challenges: ● Coordination among line agencies to ensure effective implementation of the Results-based

Management and Reporting System. ● Non-Tariff Measures (NTMs) have been serious bottlenecks for Nepali products to get easy access

to international markets. Nepal configured regulatory and institutional frameworks.

● Lack of comprehensive architecture for mobilizing resources to fulfill Sanitary and Phytosanitary (SPS) and Technical Barriers to Trade (TBT) requirements;

● Insufficient investment in modern technologies for processing of priority export potentials; ● Attracting foreign investment to expand manufacturing base and technology transfer to ensure

quality products; ● Most commodities are being exported unprocessed and the quality standard of exportable items

is not satisfactory;

● High reliance of priority product or low value-added product for the export; ● Agro processing, packaging, marketing is still at the process of development.

Nepal needs further support in the area of trade-related infrastructure, product development and trade facilitation.

Question 9: Could Nepal provide information on what practical measures are planned, in addition to improving customs procedures, to ensure the implementation of new legislation such as the Foreign Investment Policy (2014) and Industrial Enterprises Act (2016), the Labour Act (2017), and the Special Economic Zone (SEZ)) Authority Act (2016) and the Company Act(2017) to improve the business climate and make Nepal a more attractive FDI destination?

MoICS is drafting the Bill on Foreign Investment to implement the Foreign Investment Policy, 2014. The draft of regulation of industrial enterprises is at the final phase. For the effective implementation of the Labor Act, the regulation of the labor policy has been passed. To improve the investment climate the SEZ Authority Act and Company Act are in the review process. Similarly, the Investment Board Act is being changed to make it more relevant and also a central body for all PPP projects.

Trade and investment related acts and regulations are in the drafting process. Strengthening of

regulatory agencies such as Department of Industry and Investment Board Nepal and the establishment of One Stop Service are in priority to attract more FDI and to address the problematic areas of business climate. We believe that these initiatives are supportive in improving the business climate of Nepal. Does Nepal envisage new legislative changes to face other problematic areas? What specific steps

has Nepal been taking to liberalize its services market to attract foreign direct investment (considering the fact that the services sector contributed to 57.6% of Nepal's GDP share in 2017-18)? Nepal has been a most liberalized economy since the 1980s. Since Nepal exceeded into WTO, it has been further liberalizing its economy including service sector in compliance with the service schedules of Nepal. Apart, the country does carry a nominal number of negative lists, including of service sector, in its Foreign Investment and Technology Transfer Act (FITTA), 1992. Beyond the

negative list of FITTA, all sectors and subsectors are open to FDI. Furthermore, Nepal has been a founder party of SAARC Agreement on Trade in Services (SATIS) which came into effect since 2006.

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To attract more FDI in service sector, following the formation of the present Government with full five year mandate Nepal is initiating new round of economic reforms through various new efforts such as; drafting Foreign Investment Bill, IPR Bill, Industrial Enterprises Regulation, Investment Board of Nepal Bill, Import Export Management Bill etc. Question 10:

What actions is Nepal taking to effectively mobilize and achieve full potential from Aid for Trade? The Development Cooperation Policy, 2014 provides the framework for mobilization of foreign aid in Nepal. The overall donor co-ordination is looked after by the Ministry of Finance. Ministry of Industry, Commerce and Supplies (MoICS) coordinates specific Aid for Trade programmes with the mechanism of Aid for Trade (donor group meeting). The MoICS is playing an important role to mobilize Aid for

Trade in the country. The Nepal Transit and Trade Facilitation Committee (NTTFC) and Board of Trade under the Ministry of Industry, Commerce and Supplies are responsible for prioritizing trade

support projects in Nepal. Nepal emphasizes Aid for Trade in addressing supply-side capacities (technical and standard related issues, human resources, increasing absorptive capacities of government agencies, among others) and trade related infrastructure development. In addition, the Government's current focus is on the

capacity building of domestic institutions and strengthening coordination mechanism among stakeholders to realize the full potential of AfT. Question 11: Regarding the reduction of trade deficit as well as the promotion of exports, which specific measures are Nepal envisaging implementing, especially in the field of supply side capacity?

There are several initiatives being taken by the Government to mitigate the supply-side constraints mainly to increase export of high value added and competitive products in the world market, develop trade related infrastructure, strengthen IP related rights, reduce cost of production through effective

trade facilitation and reaping the benefits from the multi-lateral trading arrangement, among others. Special focus has been given to technical and vocational education evidenced by the Government's plans to set up technical schools at all local levels.

Question 12: Could Nepal give an estimation of the date when the remaining notification obligations to the WTO will be fulfilled? What kind of actions and measures are being taken to meet the outstanding notification requirements, including some relating to subsidies, domestic support for agriculture, services, customs valuation, and import licensing procedures?

Nepal is fully committed to WTO notification obligations. It is putting its every possible effort to fulfill the obligations. As the process is technical and involves multiples agencies, the MoICS is collecting necessary data and mobilizing WTO focal points to complete the due notifications. Question 13:

Regarding the improvement of customs procedures, could Nepal give information about the current status of the Customs Reform and Modernization Strategies and Action Plans (CRMSAP) and the

Nepal National Single Window (NNSW)? The Custom Reform and Modernization Strategies and Action Plan (CRMSAP) has been in continuous implementation since 2003 which has led to gradual improvement in customs procedures. Currently 5th CRMSAP (2017-2021) is in implementation. In this process, Web based ASYCUDA

WORLD system has been implemented in 20 custom offices, risk based checking system has been implemented, Time Release Study in two custom offices has been conducted, and 4-year Strategic Plan for 10 major Custom Offices has been formulated and brought into implementation. For the improvement of physical infrastructure of Custom Points, ICPs and ICDs are being built, while some of them are already in operation. Nepal National Single Window (NNSW) is in the process of being developed. After the implementation

of NNSW, the customs procedures and forms will be implemented as per the prevailing customs laws.

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Question 14: What kind of capacity-building support is there already to implement commitments under Category C? Nepal has notified 26 measures under Category C. Nepal requires financial and technical assistance for the implementation of Category C related measures. Specific capacity building programmes are

expected. The programme for capacity building is being prepared and we will share the programme to development partners at different levels. Could Nepal clarify whether there exists a formal/informal set-up for donor coordination in Nepal regarding this support?

The provision for Aid for Trade has been well-reflected in the Development Cooperation Policy, 2014. The overall donor co-ordination is looked after by the Ministry of Finance. MoICS coordinates specific

Aid for Trade programmes with Aid for Trade mechanism (Donors' Group Meeting). The MoICS is playing an important role to mobilize Aid for Trade in the country. The Nepal Transit and Trade Facilitation Committee (NTTFC) and Board of Trade under MoICS are responsible for prioritizing trade support project in Nepal.

Question 15: Could Nepal provide more specific information about the state of play of the bill on anti-dumping and safeguards that is being drafted? The draft Bill on Safeguard, Anti-dumping and Countervailing has been drafted in close consultation with the concerned ministries and stakeholders. The draft Bill will be submitted to the parliament after fulfilling the remaining process.

Question 16: Could Nepal please advise on actions and measures being taken to address the cases where the

applied rates exceed the bound rates for 38 tariff lines and 8 subdivided tariff lines and the possibility of 12 tariff lines subject to specific duties, which could exceed the bound ad valorem rates? In particular, when is Nepal planning to lower the rates applied to chemical products, machines and

alcoholic drinks below bound rates? Nepal is fully committed to the multi-lateral trading arrangement, and abides by its rules. Although Nepal is a Least Developed Country, during its accession negotiation, it has already committed to binding over 99% of its tariff line. At times, there might be a possibility of exceeding Bound Rates due to intermittent changes in the

transactional value of goods that are subject to Specific Duty. However, the Government of Nepal is making every possible effort to not let the Bound Rates exceed by determining the real transaction value of such goods. The Government of Nepal is fully aware of and will further examine the situation. Question 17:

Could Nepal provide information whether it has plans to increase the methods of payment allowed, for example, to provide payment by installments or payment at some time after shipment?

In addition to the advance payment method, Cash Against Document payment method can be used while exporting goods. To further facilitate payment during export, Nepal Rastra Bank publishes notifications and directives regarding the use of appropriate methods of payment when deemed necessary.

Question 18: Is Nepal considering any changes to the National Alcohol Regulation and Control Policy? If so, what measures are being considered and what is the timeframe for their adoption and entry into force? If Nepal is considering such changes, could Nepal confirm that any measures related to alcohol will be made following consultation with all relevant stakeholders, will be not more trade restrictive than necessary, and will avoid arbitrary discrimination among suppliers and among different product types, as required by the WTO GATT and TBT agreements?

Nepal aims at regulating liquor market in view of maintaining public health especially of children as it is elsewhere in the world. So far, the market is under- regulated, hence, sales and distribution is

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rampant. Because of this state, children are vulnerable to alcoholic drinks from early age and have created social tension. To address this issue, the Government of Nepal is working on a relevant policy that will regulate alcohol distribution in the market. Furthermore, could Nepal clarify if imported alcohol products are and will be allowed to compete equitably and if Nepal intends to take more action against smuggling and abuse of duty free

allowances, to protect lot codes, and to address the dangers and lost revenue of homebrew and the large illicit market? Nepal is fully committed to the WTO GATT and TBT Agreements and any changes will comply accordingly. Its policy does not discriminate alcoholic products on the basis of origin.

Question 19: Could Nepal please advise on the timeline for the development and adoption of legislation in respect

of food, establish an independent food authority, and the enhancement of capacity in SPS agencies? The draft Bill on Food Safety and Standards is being prepared and is in consultation with the concerned ministries and stakeholders. Once finalized, and approved by the Cabinet, the draft Bill will proceed to the parliamentary process.

The Government of Nepal has prioritized capacity enhancement of SPS agencies and has accordingly been providing necessary trainings to the personnel, upgrading infrastructure including laboratories, strengthening institutional capacity and providing other necessary support. Question 20: Could Nepal explain whether prior use is a requirement for trademark registration?

There is no specific requirement of prior use.

Question 21: How does Nepal explain the very low level of successful patent applications?

As Nepal is in the early phase of industrial development and innovation, registration of patent and design has been very low in numbers. The number of foreign application itself has not been encouraging. In order to strengthen IPR, the National IP Policy, 2017 is expected to encourage registration of new patents. In the same spirit, a draft IPR Bill is in progress. Question 22: While it is stated in paragraph 3.3.7.1 (as regards copyright) that data on the number of cases taken

to the courts were not available, could Nepal provide information on cases in the Copyright Registrar's Office in the Ministry of Culture, Tourism and Civil Aviation with respect to the infringement of copyright (per year)? The Government of Nepal is fully committed to minimize infringement of copyrights. There were only

six cases of copyright infringement in the Fiscal Year 2017/18 and the Government aims to reduce this number.

Question 23: Could Nepal define more clearly the new Food Act in order to know, for instance, if Nepal is going to follow the international standards and going to facilitate the process of obtaining certificates?

The draft Bill on Food Safety and Standards is being drafted following the Codex Principles of National Food Control System.

Question 24: Could Nepal provide more information about the measures that will be applied to achieve the targets foreseen in the Prime Minister Agriculture Modernization Project? To achieve the targets foreseen in the Prime Minister Agriculture Modernization Project (PMAMP),

the Government is undertaking a number of measures. PMAMP has classified the agriculture

production sector into specialized areas such as pockets, blocks, zones and super zones. PMAMP provides free technical services and agricultural experts for specialized agricultural production. In addition, there are funds for agriculture infrastructure. For the effective implementation, a Project

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Direction Committee chaired by the Hon. Minister of Agriculture and Livestock Development directs the Project Implementation Committee which is led by the Secretary. The Rt. Hon. Prime Minister periodically reviews the progress of the Project and provides guidance accordingly. Question 25: How will the Electricity Regulatory Commission determine consumer tariffs and wheeling charges

and with which policy objectives? Consumer price is determined based on operation cost of electrical system and production facilities, depreciation, payment of principal and interest, maintenance cost, return on equity by investor, power purchase agreement, change in consumer price index, royalty rate and policy adopted by the Government for the development of the power sector. Apart from this, ERC may prepare guideline

for fixing consumer tariff. Main policy objectives in energy sector are to increase production of electricity by attracting domestic and foreign investors as well as to raise per capita domestic

consumption of electricity. Wheeling charges is determined based on the capacity of user and distance, point of connection, transmission zone and investment in construction and expansion of transmission line apart from the factors mentioned for the determination of consumer tariff.

Question 26: Does Nepal have any plans to encourage and facilitate Foreign Direct Investment in the hydroelectricity as a way to ensure both economic and social returns? Existing policy encourages Foreign Direct Investment in the hydropower sector. In fact, Nepal already has a significant international presence in the sector in hydropower projects, including, Statkraft (Norway), GMR (India), SJVN Limited (India), SINOHYDRO (China), among others, that

are doing projects of up to 900 MW. Investment Board Nepal is a dedicated institution for facilitating hydropower projects larger than 500 MW. These provisions are helpful in ensuring economic and social returns through the creation of employment and other positive spillover effects, especially in

rural areas. Question 27:

How do "market-based energy efficiency services" work in a context of regulated prices? Electricity Regulatory Commission (ERC) will regulate electricity provider by fixing electricity distribution fee if any institution distribute electricity to consumer by using distribution system of other license holder. ERC will make competition in rate of electricity price so that consumer may choose suitable service provider. When formation of ERC is complete it may develop necessary directives to grant permission to foreign electricity provider.

Question 28: Does Nepal have any plans to increase the percentage of investment allowed in consultancy services? This would allow foreign companies to boost investment in energy sectors, especially hydropower, where there is a lot of investment potential.

Nepal understands that the increase in the percentage of investment allowed in consultancy service

scan boost the investment potential of the sector. We are examining the impact of further opening up the service sectors, including the percentage of investment allowed in consultancy services, while drafting the Bill on Foreign Investment. Question 29: What kind of legal and regulatory inadequacies are hindering the development in energy projects?

In the past, there were inadequacies such as inappropriate distribution of cost and benefits among the projects that are developed in a single river basin, provisions regarding the land ceiling, land compensation, private and forest land acquisition. However, the situation has been gradually resolved with the introduction of new legal and regulatory instruments as well as the change into a federal governance structure.

Question 30: Could Nepal provide more information about the project foreseen to achieve the target of energy independence by 2019?

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To achieve the target of energy independence by 2019, the Government of Nepal has expected the completion of various energy projects by then. Some of them are: Upper Tamakoshi HPP (456 MW), RasuwaGadi (111 MW), Upper Trishuli3A (60 MW), Sanjen (42.50 MW), Upper Sanjen (14.80 MW), Kulekhani III (14 MW), Solar Project – Nuwakot (25 MW), etc.

Could Nepal give more information about the plans for the renewable energy policy for the coming years? Challenge fund will be established by federal government to install solar system having capacity between 100 KW to 500 KW in each Local Level Government. Federal Government will contribute 50% of the fund. to develop renewal energy by provincial and local governments, appropriate

guideline, regulation, directives will be developed by the federal government. Institutional arrangement will be placed in the system for maximum utilization and benefit sharing of renewal

energy between federal, provincial and local governments. Could Nepal give an update on their intentions in terms of market organisation policy so that appropriate investment could support Nepal's long-term energy objectives?

Necessary policy, legal and structural arrangements will be made for the implementation of rights related to energy in federal, provincial and local level. Per capita electricity consumption will be increased to 700 unit (kilowatt hour) within 5 years and 1,500 unit within 10 years by gradually changing the current Energy Consumption Pattern and expanding the sectors that consume electricity. The policy of mixed energy system will be adopted for energy security. As per the master plan for electricity transmission, phase wise development of domestic and cross-border transmission lines will be done. East-West high voltage transmission line of 400kV and mid-hill and river basin

corridor transmission line of same voltage will be constructed. Initiation will be taken to establish the reach surplus energy in the neighboring market. For this, SAARC Framework Agreement, BBIN, BIMSTEC and other bilateral and multilateral electricity trade agreement as well as the concept of

energy banking will be implemented. Second cross-border transmission line -- Butwal-Gorakhpur 400kV Transmission Line will be constructed within 4 years and construction of Lamki-Bareli, Duhabi-Purniya and Kohalpur-Lakhnau 400 Kv transmission line will be initiated. Within 5 years

construction of Nepal-China cross-border transmission line -- Galchhi-Rasuwagadhi-Kerung 400kV Transmission Line will be completed. In development of transmission lines, policy and mechanism to develop such lines under Built and Transfer modality will be introduced. Considering the target to increase the share of electric vehicles up to 50 percent of the total import within 5 years, policy and infrastructure will be developed to encourage use of electric vehicle for private and public transport. Regional energy market will be promoted by signing power trade agreement with China and Bangladesh. Hedging fund will be established to minimize the foreign exchange risk while signing

power purchase agreement. Question 31: When will Nepal apply the new legislation to promote private participation in the air transport sector?

The private sector has been participating in the air transport sector, both in domestic and international air service. The draft Bill aims to enhance participation of the private sector. The draft

Bill is being prepared and is in consultation with the concerned ministries and stakeholders. Once finalized, and approved by the Cabinet, the draft Bill will proceed to the parliamentary process. Question 32: Will the "mega projects" be commissioned and funded by Nepal or do they involve domestic or foreign investors?

Mega projects will be commissioned and funded by domestic as well as foreign investment using various models of private sector involvement. Question 33: Can Nepal provide more information on the envisaged amendments to its existing legal framework? When does Nepal intend to conclude the legislative process?

The proposed IP draft Bill is in initial phase. However, the draft Bill is expected to be in line with the provision of TRIPS and WIPO's Conventions.

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Iceland

Question 1: Could Nepal provide more information on these initiatives and whether or how they give particular attention to women, or gender equality considerations? The Constitution of Nepal ensures women rights as fundamental rights. The assurance of minimum

33% representation of women at all level of state machineries is a major breakthrough. The Constitution also provides for the right to equality which prohibits discrimination against women on any ground. Question 2: What is the participation of women in the economy in Nepal?

The Government of Nepal aims to attain an inclusive GDP growth in which women shall have greater participation and share in the benefits. Accordingly, sectoral policies and plans have been designed. Question 3: Have particular barriers that limit women's participation in trade been identified?

Since the Constitution has attached very high priority to women's participation in the economy, their share in the economy is growing over the years. Question 4: Has Nepal implemented any particular measures to encourage women's participation in trade and promote women's entrepreneurship, or are such measures being developed?

Concerning women and trade, the Government believes that women play a vital role in trade and economic development. There are special programmes that focus on women's access to finance for

enterprise development and trade.

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Japan

Question 1: Japan would like to know whether the registration/application of a trademark will be refused or cancelled, if the trademark is identical or similar to a trademark well-known in the foreign countries as indicating goods or services of another person?

If the trademark is identical or similar to a trademark well-known in the foreign countries, there is a legal provision to take appropriate action against such trademark. Additionally, there is a provision in Article 18 of Patent, Design and Trademark Act, 1965: in case if the applied trademark hurts the prestige of any individual or institution or the reputation of the trademark of any other person, or in case such trademark is found to have already been registered in the name of another person, the Department of Industry refuses to register such mark.

Question 2: We would like to know if effective border measures including the IP registration system at customs are in place. We also would like to know the result of border measures (e.g., the number of infringing goods seized by the custom at the border) in the past 3 years. Among other border measures, IP

registration system is operational at customs offices in Nepal. As per Article 68 of Customs Act 2007, If the trademark is found to be identical or similar to the existing goods, the goods are seized. Regarding the data on seized goods by the customs at the border, we are in the process of collecting such data. Question 3: Japan would like to confirm:

Whether the establishment of foreign companies and foreign investment in the tourism services are allowed in Nepal?

Establishment of Foreign Companies and foreign investments are allowed in sectors except included in the Annex of FITTA 1992.

And if so, whether permission is required? Question 4: What are the prospects for improving the IP system in Nepal based on this policy? In particular, does Nepal have any plans to introduce a secret design system or expand the duration of rights? National IP Policy, 2017 envisions the protection of IP rights, such as Utility Models, Geographical

Indications, Collective Marks, Certification Marks, Layout designs of Integrated Circuits, Undisclosed Information and Trade Secrets. Likewise, it also envisions the protection of well-known marks under specified grounds, passing off provisions and the protection, promotion and development of all rights. To better enforce IPR in Nepal, a new IP Bill is being drafted.

Question 5: Could you provide us with the basic policy and outline of the revisions in National IP policy?

As Nepal is a party to Paris Convention, Berne Convention, Stockholm Act and WTO-TRIPs, to meet the international obligation created by such instruments, and in order to make the IP regime better, the IP Policy, 2017 is in implementation. The IP policy aims to create a balanced IP system in Nepal with a vision of building a creative nation

through protection and promotion of IP. The policy sets out following objectives: (i) encourage protection, promotion and development of IP; (ii) develop a balanced IP system; (iii) create awareness on the social, economic and cultural aspects of IP; (iv) encourage the commercialization of IP; (v) strengthen the legal, administrative and human resources to ensure protection and enforcement of IP.

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Philippines

Question 1: To increase trade, any economy requires Special Economic Zones (SEZs). There are 10 industrial estates in Nepal and out of which, only 1 SEZ is operational. What is the reason why only one is operational and what are the next steps in order to attract more locators in the SEZs?

Government of Nepal (GoN) has adopted the concept of Special Economic Zone (SEZ) to attract foreign and national investors. It will contribute mainly for production of industrial goods and export promotion. Government of Nepal has also allocated adequate budget for the establishment and development of SEZs. The act of SEZ is in the process of revision to further simplify the operation of the SEZ.

Currently, feasibility studies are being carried out to establish further eight SEZs to attract more

locators. Government of Nepal has also taking initiatives to establish additional SEZs by proposing measures to create investment friendly environment and facilitating private sector role in development and operation of SEZs. Question 2: Can Nepal elaborate on its commitment to promote mining and the minerals sector? What policies

and initiatives are in place? Government of Nepal is committed to promote mining and the minerals sector and has provisioned legal and institutional mechanism. Some of the legislative provisions governing the mineral and mining sectors are as follows: 1. Nepal Petroleum Act, 1983 2. Mines and Minerals Act, 1985

3. Forest Act, 1993 4. Environment Protection Act, 1997

5. Mines and Minerals Rules, 1999 6. Petroleum Exploration Regulation, 1984 Government of Nepal has also provisioned to encourage Foreign Direct Investment (FDI) in mining

and the minerals sector through one stop services and incentive in income tax. Likewise, the National Minerals policy, 2017 is in place to deal with mining and the minerals sector in Nepal with major provision such as fair and equal treatment, guarantee of 'no nationalization' and incentive and provision of subsidy. Question 3: The current Government of Nepal recognizes the role of ICT in economic development. ICT has also

been shortlisted as one of the three priority service sectors with the most potential for exports. However, the UNCTAD's e-trade readiness assessment report of Nepal highlight areas that needs more improvement in ICT such as mobile network coverage, international internet bandwidth, and secured internet services. What are the steps being taken and/or planned in terms of policies and

measures for the development of ICT in Nepal? The Government has decided to formulate the e-commerce strategy of Nepal. The drafting of the

strategy is in progress with the consultation of major stakeholder and private sector. The strategy will broadly cover the issues such as legal framework, ICT infrastructure, promotion and development of IT, e-payment system, and capacity development of relevant stakeholder. Some of the ICT related issues will be addressed by the Digital Nepal Framework, 2018, which is being formulated.

Question 4: Please share the priority countries that Nepal wants to enhance its trade relations with? What is Nepal's policy towards ASEAN? Is Nepal currently looking at forging any agreement with ASEAN or with the Philippines? If so kindly specify. Nepal has firm commitment on multilateral trading system and regional integration for enhanced

trade between the countries. Nepal appreciates concern raised by the Philippines. Nepal is open to

consider any proposal from the countries and regional organization interested to forge agreement related to trade.

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Question 5: Since Nepal's most serious constraint is its geography and trade and transit cost are higher, can Nepal specify plans on how to address trade facilitation gaps? As a landlocked developing country (LLDC), geographical constraints have significantly contributed

to Nepal's under performance in trade, depriving Nepal from its rightful share in the global trading system. The Vienna Program of Action would be instrumental in addressing this fundamental problem with a focus particularly on trade and transit facilitation, once implemented effectively. Similarly, it is very pertinent to intensify the implementation of the TFA agreement to address trade facilitation gaps.

Question 6: Based on the report, Nepal has not been able to take full advantage of incentives provided to LDCs,

including GSP and DFQF initiatives because of stringent and complex requirements that needs to be fulfilled as an exporting country. What are the steps that the current Nepal government is taking to overcome these challenges and ways in improving its development status in view of entering a middle-income country by 2030?

Nepal is initiating various measures to take full advantage from the scheme such as GSP and DFQF. The government is implementing trade policy 2015 and Nepal Trade Integration Strategy, 2016 to enhance the export capacity, focusing on export potential goods and services. It is important to carry out further reforms for increased investment-friendly climate. Nepal needs to focus its efforts on reducing cost of doing business, especially by improving its trade and industrial infrastructure. Moreover, there is also a need to accelerate the process of legal reforms particularly

in the area of trade and investment. Realizing the risks of alarming trade deficit, Government aims to enhance exports capacity through various measure including supply side capacity enhancement and import management.

Question 7: Nepal has vowed to adopt policy of zero tolerance against corruption. In this case, what are the

recent measures taken by the government in order to provide excellent business environment for foreign investors? The major legal and institutional provisions taken by the government in order to provide excellent business environment for foreign investors are as follows: 1. Legal Provisions:

• A separate act is in place to deal with foreign investment in Nepal i.e. FITTA, 1992 with

major provisions as follows: o fair and equitable treatment o guarantee of 'no nationalization' o incentives-- fiscal (tax holidays/concession) and non-fiscal (grants, loans) o reinvestment and extension of industry under FDI

o provision of Business Visa o foreign exchange and repatriation facilities

o resolution of investment disputes • Government of Nepal is revising the existing foreign investment act to make it more

foreign investors friendly, • Government of Nepal is organizing Nepal investment Summit on 29-30 March, 2019. • Drafting of an umbrella act for Intellectual Property Rights has been initiated.

2. Institutional Provisions:

• Ministry of Industry, Commerce and Supplies (MOICS) and its departments are actively working in the process of attracting and facilitating the investment.

• One Stop Service Center to provide integrated services to foreign investors. • Investment Board of Nepal (IBN) is in place to coordinate the mega projects.

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Saudi Arabia, Kingdom of

Question 1: We would like to refer that there are simple inquiries about (3.78) The amendments in this section indicate that the ministry may impose the application of approved Nepali Standards, and we want to know the procedures in which the standards are to be imposed,

and are the imposed standards conformed to the international standards? Or is it specific to the State of Nepal? The formulation of national standards are based on ISO, IEC, CODEX, EN, BIS, ASTM, SARSO and other recognized national and international standards and some are specific to Nepal.

All the standards should be approved by Nepal Council for Standards (NCS). The Government holds

several consultation meetings with various concerned stakeholders during the process of formulating technical regulations. A timeframe of 60 days is given for comment and feedback on the draft regulations. Question 2: How do you plan to prevent such large fluctuation in the GDP growth that may occur in future? As

mentioned, a big part of this fluctuation is from the earthquake. In this matter, is there any emergency plan in place to face any natural catastrophe that may hit the country and the economy? Nepal has adopted the following priorities for sustained growth:

• Promotion of sectors that can create jobs and employment opportunities for all citizens; • Accelerated human development through the development of the social sector, including

health and education; • Use of capital, technology and research in sectors, such as agriculture, water resources and

tourism; • Development of basic and modern physical infrastructure, such as roads, railways, irrigation,

electricity and urban facilities; reconstruction of structures damaged by earthquakes and floods;

• Enhancement in quality of public service delivery, and good governance. We believe that through these dedicated efforts, we would be able to achieve sustainable growth in a sustainable way. The Government has adopted Disaster Risk Reduction and Management Act, 2017, National Disaster Risk Reduction Policy, 2018 and National Disaster Risk-Reduction Strategic Action Plan, 2018-2030

which have given special focus on disaster management cycle. The measures include: mitigation, preparedness, rescue and recovery with policies, programmes and activities such as community awareness, capacity building, and participatory planning for simulation exercises on earthquake, among others. The rescue team is well trained and ready to rescue and respond. Nepal's policy

regime on disaster management is directed towards achieving objectives, priorities and targets of the Sendai Framework on Disaster Risk Reduction (SFDRR: 2015-2030).

With robust policy measures and their implementation, the Growth has now picked up after 2016 catching up over 6 percent despite the devastating earthquake of 2015. Question 3: What is expected impact of changing the tax structure in the coming years comparing to the previous tax mechanism?

The Government of Nepal is drafting a Unified Tax Code by integrating different tax related laws. The proposed Code will help improve and simplify the procedures of tax system. The Government has taken initiatives to widen the tax base and increase the compliance through simplified procedures and automated tax system.

Question 4:

What are you doing so far to meet your inflation target as per your 14th plan?

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Maintaining price stability is one of the major objectives of Nepal Rastra Bank (NRB). NRB applies a range of monitory policy instruments to contain inflation at or below the targeted level. The policy strategies utilized by NRB are as follows:

(i) Manage money supply and private sector credit at a level that is compatible with inflation and growth target of national Periodic Plan.

(ii) Design monetary policy depending on the situation and prospect of business cycle.

(iii) Reallocate financial resources to productive sectors and regulate consumer credit using following measures:

(a) Use open market operations to manage liquidity and stabilize interest rates. (b) Provide refinancing facilities (export refinance, refinance against good loans).

(c) Use capital measure (differential risk weights). (d) Enhance financial literacy to enable people use financial resources in the

productive sector.

Question 5: How do you evaluate the IMF statement about the currency peg? The currency of Nepal is pegged with India since 1965. Five times the peg rate has been reviewed during the period of 1965 to 1993. Since 1993 the rate has been constant.

The IMF has applauded the current exchange rate arrangement of Nepal. Given the high trade concentration with India, the pegged arrangement has served well the economy. As Nepal is diversifying its trade in recent years, a preliminary research on the impact of the single-pegged system on its international trade is being conducted. Question 6:

How is the engagement of the private sector (insurance firms) with the government in solving the housing crisis after the earthquake?

To address the housing reconstruction needs and rebuild a more resilient housing system, the Government of Nepal has been coordinating the housing reconstruction mission by involving development partners and the private sector. To ensure it in a well-coordinated manner, Nepal

Reconstruction Authority (NRA), a new and high powered sunset authority led by Rt. Hon. Prime Minister himself is placed in the system. As part of Government's financial support, Rs. 300,000 has been provided to every affected household. The above housing reconstruction mission also serves as a coordinating framework to standardize housing reconstruction policy, irrespective of the funding sources. A Multi-donor Trust Fund was set up to coordinate and harmonize the resources and to ensure reconstruction works in a transparent

and accountable way. The private sector and individuals, including Non Resident Nepali (NRN), are also working under the framework. It is noteworthy to mention that insurance market is still evolving, however, quiet fast growing in the country. Question 7:

How big is the damage for the housing sector?

According to the Post Disaster Needs Assessment (PDNA) Report, one of the most affected areas was the social sector that endured 58% of the total loss. Of the damage in the social sector, housing alone accounted 86%. The largest single needs for recovery identified in PDNA was the housing and human settlements as 755,000 houses were reported damaged. The loss accounted USD 3.27 billion, almost a half of the Nepal's total reconstruction needs.

Question 8: How do you balance exchange rate and trade/export policies? Nepal's trade with India accounts on more than 60% of total trade for a long period. To remain resilient in international trade from exchange volatility, Nepali currency is pegged with Indian currency. The pegged rate with INR has been reviewed five times so far to balance exchange rate and maintain the stable trade policies. In the meantime, looking at the positive side of the pegged

system IMF has appreciated the current exchange system of Nepal. Nonetheless, this matter is under examination.

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Question 9: (i) How do these restriction measures affect your position on the trade agreements with other countries?

Nepal is one of the most liberal economies in South Asia. The provision placed in the policies and laws are not only in conformity with the commitment of Nepal to WTO, but also beyond. By its virtues, those provisions never have been restrictive measures. In the meantime, Nepal has signed a number of agreements with other countries, including Bilateral Investment Promotion and

Protection Agreement (BIPPA) with six countries and Double Tax Avoidance Agreement (DTAA) with ten countries. Also Nepal has become a member of RTAs such as SAFTA and BIMSTEC. In none of them, the said policies acted as restrictive measure.

To highlight some of the provisions, Nepal grants equal treatment to foreign and domestic investors, allowing 100% foreign investment, except for a negative list of 21 industries. The negative list

includes industries sensitive to national security. The negative list only encompasses a limited area and has been placed to protect traditional knowledge and ensure livelihoods of vulnerable population. The negative list mainly covers the protection of public morals, human health and necessary security concerns as per the GATT Article XX.

(ii) Is there any plan to liberalize these industries in near future?

Being a member of WTO, Nepal is always committed to stand for a progressive liberalization of

trade in goods and services.

Question 10: What kind of efforts the authority making to remove these barriers for the foreign investors? Which factors from the above you think is more important for investors?

Nepal has been pursuing a liberal foreign investment policy and creating an investment-friendly

environment. The Government has taken various policy initiatives. Together with institutional and procedural reforms to welcome FDI, Nepal has created dedicated institutions such as Investment Board Nepal for mega investments, Special Economic Zones for export-oriented industries and one-stop service centers to facilitate the FDI. To ease investment, Investment Promotion Board is created under the chairmanship of the Minister for Industry, Commerce and Supplies.

The investment climate in Nepal is continuously getting better due to political stability, improved governance, and smooth supply of power, IT-skilled people, and improved industrial relations. All above stated factor are equally important, however, political stability is the most vital factor in pulling investment, Nepal observes.

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Chinese Taipei

Question 1: What measures is Nepal undertaking to simplify the most problematic areas as identified by the World Bank regarding dealings with construction permits, enforcing contracts, paying taxes, getting electricity and starting a business?

The investment climate in Nepal is continuously getting better due to political stability, improved governance, smooth supply of power, availability of IT-skilled people, and improved industrial relations over last some years. Thus, there are improvements in construction permits, enforcing contracts, paying taxes, power supply and commencing start-ups. Question 2:

What measures is Nepal undertaking to deal with the various factors like inefficient government

bureaucracy, inadequate infrastructure and restrictive labour regulations to exploit untapped local and foreign investment potential? The information on "inefficient government bureaucracy" referred by the Secretariat Report, Page 18 (Para 1.24) is not factually correct. The situation of bureaucratic efficiency of Nepal is considered better among the developing countries. However, The reform in the bureaucracy is a continuous

process. The major initiative to address the problems in bureaucracy, automation & infrastructure, labour regulation and investment are included, but not limited to, drafting of the Bill of Federal Civil Service, various programs for administrative reform, capacity building and training for civil servants. Likewise, the country is focusing on increased fund for infrastructure development, priority for trade related infrastructure, adoption of new labour regulations, drafting of the Bill for Foreign Investment,

initiation for the establishment of One Stop Service to further facilitate investment and many more policy reforms.

Question 3: Are there minimum amounts of foreign investment in any sector?

NPR 5 million is required as a minimum amount for the foreign investment in each sector. Question 4: Are foreign investors required to obtain permission from any relevant authority or authorities for repatriation of foreign currencies? Please provide further details on the procedures which the foreign investor must follow in order to repatriate foreign currencies and the authority/authorities involved in the process.

Repatriation of foreign investment is guaranteed by the law. Foreign investors are required to obtain permission from the concerned regulatory agencies such as the Department of Industry or Investment Board Nepal to repatriate their investment and the return thereof. Then, they should

submit application for repatriation at the Nepal Rastra Bank where they need to submit documents specified in the Guideline on Foreign Direct Investment: Capital, Debenture, Interest and Dividend (available at: https://nrb.org.np/fxm/fxmindex.php)

Question 5: Could Nepal please specify the names of the institutions that issue letters of recommendation, licences or certificates as required for imports? Importers do not require a licence, except for items that are restricted or have quantitative

restrictions (QR), such as products injurious to health. In these cases, recommendation is required from relevant authorities: for example, Ministry of Home Affairs in the case of arms, ammunitions and explosives. Question 6: Could Nepal please explain the basis for customs officers' determinations of the values of imported

goods and whether any guideline for such has been established?

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The basis for customs officers' determinations of the values of imported goods is the provisions of GATT Article VII which has been fully incorporated by the Customs Act, 2007. Question 7: Has Nepal considered requesting to become an observer to the WTO GPA?

Procurement system of Nepal has been governed by the Public Procurement Act, 2007 and Regulations, 2008 which ensures competition, transparency and predictability. Nepal is examining the implications of becoming a GPA observer. Question 8: Has Nepal considered providing any sort of protection to well-known trademark owners in addition

to requesting a right to claim priority when filing applications?

Nepal provides the privilege of priority as per the provisions of Paris Convention and WTO-TRIPS. The draft Bill of new legislation in line with the international practice is under discussion. Question 9: Could Nepal please elaborate on the mechanism it has set forward to track whether or not any

registered trademark has been used within the mentioned time frame of one year of registration? Other related information and data will also be appreciated. There is a provision to cancel the registered trademarks, if it is not used within one year of registration. If any complain on non-use of trademark is received, the Department of Industry investigates and readdress such complains.

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Thailand

Question 1: It would be appreciated if Nepal could kindly provide details on: The current status of the Nepali 17 bilateral agreement with the trading partners Nepal has signed the following bilateral trade agreements: Bangladesh (signed in 1976);

Bulgaria (1980); China (1981); Czechoslovakia (1992); Democratic People's Republic of Korea (1970); Egypt (1975); India (2009); Mongolia (1992); Pakistan (1982); Poland (1992); Republic of Korea (1971); Romania (1984); Sri Lanka (1979); United Kingdom (1965); United States (1947); USSR (1970); and Yugoslavia (1965). Most of the agreements were signed to receive the MFN treatment when Nepal was not a member

of the GATT/ WTO. Some of the agreements have been terminated or are no longer in effect.

Nepali future plan to initiate FTA negotiations with trading partners. To diversify trade, Nepal expects the initiation of the FTA negotiations process with its trading partners in the near future.

Question 2: Regarding the authority of the Electricity Regulatory Commission (ERC), it would be appreciated if Nepal could elaborate on "regulating electricity service providers" what is the scope of its authority as well as whether it includes granting permission for foreign electricity service providers? If so, what are the procedures? Electricity Regulatory Commission (ERC) has the authority to provide technical management for the

regulation of production, transmission, distribution and trade of power; fix electricity tariffs and regulate the buying and selling of power; ensure competition and protection of consumer rights;

enhance institutional capacity; provide policy feedback; carry out monitoring and evaluation; and, carry out dispute resolution. The ERC shall regulate electricity providers by fixing electricity distribution fee for institutions that

distribute electricity by using distribution system of other licence holders. ERC will make competition in rate of electricity price so that consumer may choose suitable service provider. Once the ERC formation is complete, it may develop necessary directives to grant permission to foreign electricity providers. Question 3: It would be appreciated if Nepal could kindly provide more detailed information on the new

Telecommunications Act, the advantages and anticipated impacts of this new Act on the liberalization of this sector. A proposed draft Bill is underway of development and approval and it will come into effect in the

context of new technological changes. Question 4:

It would be appreciated if Nepal could kindly provide more detailed information on "the basis of reciprocity", procedures, and regulations of such activity. To supply necessary goods for Nepal such as food products, industrial raw materials, fuel, commercial goods, etc., truck, lorry, tractor-trailer, tankers, gas bullets, multi-axel trucks, etc. have been entering in a temporary import basis by paying due charges which is set by the Fiscal Act.

So far, there has been no bilateral agreement of Nepal with its neighboring countries India and China for the movement (entry) of motor vehicles on the basis of reciprocity. Similarly, according to the 'Agreement Between the Government of the Republic of India and the Government of Nepal for the regulation of passenger traffic between the two countries (Nepal-India Motor Vehicle Agreement, 2014)', only regular passenger bus are being operated based on a reciprocal basis agreement in the

following routes to the given locations.

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S.N. Routes (Remarks) 1 Kathmandu-Bhairahawa-Sunauli-Gorakhpur-Lucknow-Delhi (Under operation) 2 Kathmandu-Bhairahawa-Sunauli-Ajamgad-Banaras (Under operation) 3 Pokhara-Bhairahawa-Sunauli-Gorakhpur-Lucknow-Delhi (Under operation) 4 Kathmandu-Patna-Bodhgaya (Under operation) 5 Mahendranagar-Delhi (Under operation)

6 Janakpur-Patna (Under operation) 7 Nepalgunj-Rupadiya-Delhi (Under operation) 8 Mahendranagar-Dehradhun (Under operation) 9 Silgudhi-Kakadbhitta-Kathmandu (Under preparation to begin operation) 10 Nepalgunj-Rupadiya-Bareli-Moradabad-Haridwar (Under preparation to begin operation) 11 Nepalgunj-Rupadiya-Lucknow (Under preparation to begin operation)

12 Singudhi-Kakadbhitta-Kathmandu (Under preparation to begin operation) 13 Janakpur-Jaleshwar-Bhittamod-Sursand-Sitamadhi-Mujaffarpur- (Under preparation to begin

operation) Phase-wise discussions and negotiations are ongoing for a framework agreement on the operation of motor vehicles under Bangladesh Bhutan Indian Nepal (BBIN) and Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC).

Question 5: Regarding the development related to tourism industry mentioned above, would Nepal welcome foreign investment to participate in the development? If so, what are the requirement and procedure? Nepal welcomes foreign investment in every sector of economic activities except for very few sectors

specified in the Annex of the Foreign Investment and Technology Transfer Act, 1992. Foreign investors are allowed to hold 100% ownership in most cases.

Moreover, such development would definitely render projects and bring more tourists into the Country, which could have impacts on nature and society. In this case, would Nepal have any plans or regulations to ensure the balanced, healthy and sustainable developments between environmental

protection and promoting economic growth that might have a negative effect from tourism? After receiving permission for opening new industry from the Department of Tourism, the investor applies to the Department of Industry (DoI) for further registration approval. The DoI provides foreign investment approval to projects below NPR 2 billion. Otherwise, it forwards the proposal to Industrial Investment Promotion Board chaired by the Minister of Industry, Commerce and Supplies for approval to projects with investment above NPR 2 billion. For larger projects, investors can

directly apply to the Investment Board, Nepal for investment facilitation. There are several policy provisions that focus on tourism promotion and sustainable environment management. Some of them are:

- The Constitution of Nepal has provisioned for a policy arrangement that focuses on the development of environment-friendly tourism industry.

- According to the Tourism Policy, 2009, during the development and construction of tourism infrastructure, sustainable use of resources should be ensured.

- There is a legal provision to conduct Environmental Impact Assessment while constructing any infrastructure, including tourism-related.

- The Government has arranged special tax incentives for environmental protection.

Question 6: What would be a guideline of Nepal's ICT infrastructure system development and e-Payment system in next 10 years in order to create more trade opportunities in E-Commerce area? The Government of Nepal has initiated the preparation of E-commerce strategy which is expected to cover issues related to ICT infrastructure system development and e-Payment system.

Question 7: Since there are 38 Tariff lines that have the applied MFN rates exceed the bound rates, could Nepal please clarify more about the reasons that applied MFN rates exceed the bound rates?

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Nepal is fully committed to the multi-lateral trading system, and abides by its rules. Although Nepal is a Least Developed Country, during the accession negotiation, it has already committed to binding over 99% of its tariff line. At times, there might be a possibility of exceeding Bound Rates due to intermittent changes in the

transactional value of goods that are subject to Specific Duty. However, the Government of Nepal is making every possible effort to not let the Bound Rates exceed by determining the real transaction value of such goods. The Government of Nepal is fully aware and will further examine the situation. Question 8: Nepal has implemented the subsidy namely CISE 2070 which aims to provide cash incentive for

exports. Accordingly, does the practice of CISE 2070 conform with the WTO rules?

The growing and continued mismatch between import and export has resulted in an alarming level of trade deficit in Nepal. While the export-import ratio was 1:3.5 in 2004/05, while it was 1:6.7 in 2011/12. This has grown to 1:15.3 in the year 2017/18. Given the nominal amount under CISE and the low utilization rate, it does not have significant impact.

The Article 9 of The Agreement on Agriculture (AoA) has provisioned minimum support "de minimis" which sets a ceiling of 10 percentage of the agriculture production (Agro GDP) for developing countries. As per this provision, Nepal could have supported up to 83 billion NRS as minimum support for agriculture sector in 2016/17 based on the agro GDP calculation of the year. Yet, the country has been providing its support to agriculture sector far below than the mandated level and under-utilized.

Question 9: Since there were 605 varieties of 65 crops registered and released in Nepal, Thailand has the following questions to ask Nepal:

What are the purposes of the variety registration?

The purpose is to document the source, country, date, and other details as well as assess the impact of the plant varieties. The registration is done for varieties having extra ordinary traits / characters than existing varieties in Nepal and preferred by Nepali farmers in specific domain based on two season performance trial data. What kind of crop can be registered in Nepal? Hybrid, open-pollinated and improved varieties which are more competent in terms of productivity,

suitability, pest and stress resistant and having market demand. Who can apply for the registration? Registration can be applied by Nepali firms/companies/institutions and multi-national company in

joint venture with Nepali party.

Thailand would like Nepal to give more details about Intellectual Property Protection in Plants. What kind of new plant variety protection system will be used in Nepal? The draft Bill related to Protection of Plant Varieties and Farmers' Right is underway. The focus is on sui generis system on proposed draft Bill regarding Plant Variety Protection System.

Can Nepal be UPOV member? Nepal is not yet a UPOV member and has not taken any initiation regarding its membership. Question 10: In practice, how could SAFTA implement the preferential tariff differentials on the same product that

offer in MA to different countries?

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Under the trade in goods negotiations, each Contracting Party has submitted their individual tariff schedules. Therefore, the market access has been offered as per the agreed tariff schedules submitted to the Secretariat. Also, how to implement the verification of Rule of Origins to confer each country of origin status in order to prevent the circumvention from other countries?

Specific Rules of Origin is in place to determine the origin of goods under the SAFTA framework. The Rules of Origin prevents the possibility of circumventions. For this purpose, each contracting party has designated an official to authenticate the process.

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United States of America

Question 1: Which customs procedures and forms will be included in the initial functionality of the Nepal National Single Window? After the implementation of Nepal National Single Window, the customs procedures and forms will

be implemented as per the prevailing customs laws. Question 2: We would be interested in understanding Nepal's TACB needs, so when will Nepal notify the specific capacity-building support needed to implement the 26 measures identified as Category C?

Nepal has notified 26 measures under Category C wherein Nepal is in need of financial and technical

assistances for their implementation. The programme for capacity building is being developed as outlined in the notified Category C and we will share the proposed programme to the US Government in due course of time. We would like to recall here that this matter was also discussed in the Fourth TIFA Council Meeting between Nepal and the USA held in Washington D.C. on 13th November 2018. Question 3:

Can Nepal clarify the actions that customs officials may take in a transaction value dispute? Customs Act, 2007 has fully incorporated the provisions of GATT Article VII. As per the Act, if the Customs Officer deems that the declared transaction value is lower than the actual value, the Customs Officer can purchase such product. If the importer is not satisfied with the decisions of the Customs Officer, he/she may appeal the case.

Is it correct that the customs officer may purchase the goods (from the importer) by paying an amount equaling the declared transaction value, plus 5%?

Yes, the Customs Officer may purchase the goods from importers, if the officer deems that the declared value is lower than the actual transaction value. However, this is rare in practices.

Question 4: Does Nepal intend to notify the annual questionnaire to the committee again as per Article 7.3 of the Agreement on Import Licensing Procedures? Nepal is preparing the notification to be submitted to the WTO as per the Article 7.3 of the Agreement on Import Licensing Procedures.

Question 5: Could you please clarify how Nepal prepares its national plans for standards development? National plans for standards development is based on the priority of the country. Different

stakeholders, including regulators, consumers, manufacturers, and traders can place requests or proposals for development of standards. In response NBSM prioritizes such requests or proposals on the basis of national requirements.

Does Nepal publish a work program (as required under subparagraph J of Annex 3 to the TBT Agreement) that outlines its current plans? Nepal is under the process of formulating National Standardization Strategy. Work program for standards development has been published and is available on the website of NBSM

(www.nbsm.gov.np). Question 6: To whom is the draft document circulated? Draft standards are circulated/ published on the website of NBSM by making them open for public

comments.

Do other WTO Members have an opportunity to comment at this point?

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Any interested WTO members can provide their feedback. Does Nepal publish the draft standard for other trading partners to consider? Any interested trading partners may provide their feedback.

Question 7: Please identify when Nepal will provide a notification on its use of state-trading enterprises. Nepal is fully committed to the multi-lateral trading arrangement, and abides by its rules. Nepal fully acknowledges the importance of notification as a fundamental pillar of transparency principle of the

WTO. Nepal is collecting necessary information to prepare notification on the use of state trading enterprises. We will notify it soon to the WTO.

Question 8: Will Nepal consider becoming a GPA observer? Procurement system of Nepal is governed by the Public Procurement Act, 2007 and Regulations,

2008 which ensures competition, transparency and predictability. Nepal is examining potential implication of becoming a GPA observer. Question 9: Is the prohibition on discrimination part of the Public Procurement Act 2007? Public Procurement Act, 2007 (as amended), and the Public Procurement Regulations, 2007, apply

to all procurements by all public bodies, including federal, provincial and local government bodies, and state-owned enterprises. The Public Procurement Act 2007 does not discriminate the suppliers.

The Act aims to ensuring transparency and good governance in public procurement, developing policy, monitoring implementation of the law, developing and issuing standard bidding documents, issuing manuals, directives, instructions and technical notes, soliciting the views of stakeholders on

the procurement system, and coordinating public procurement. Furthermore, amendments to the Public Procurement Act are intended to simplify procedures, and e-bidding is now compulsory for contracts of NPR 6 million and above. If procurement is using national bidding, does that mean only Nepali suppliers can participate in the procurement?

It is not a requirement to be a Nepali supplier. Question 10: Could the GoN detail under which circumstances a patentee may not enjoy a patent term of 20 years?

As per the prevailing Patent Design and Trademark Act (PDTA), 1965, a patentee may enjoy

altogether 21 years. As per the same provision, the patent right is granted 1st time for 7 years. The registered patent should be renewed after 7 years from the date of termination. It can again be 2nd time renewed for another 7 years. If the patent is not renewed, the patent is cancelled. Does the GoN have plans to provide for plant variety protection and protection for undisclosed test and other data?

The Seed Act has provision of sui generis protection system to protect the new varieties of plants. The Government has envisaged enacting legal provisions for the protection of undisclosed information and trade secrets in line with National IP Policy 2017. Could the GoN explain its filing and grant data for industrial designs and patents? The number of grants appears especially low for patents, compared with the numbers of applications filed.

The application and registration of domestic patent and design is very low in numbers due to various factors, including low investment in the field of R&D as well as inadequate technical capacity with

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concerned authorities. Yet, the number of foreign application is growing over the last some years and Government of Nepal is enhancing the technical and institutional capacity. What is the status of the applications noted to have been filed, but not granted or in force since 2011?

A small number of applicants have been granted patent, mostly due to inadequate human resources capacity necessary to examine the applications. The new draft Bill of IP will encourage the situation of application and registration of patent. Finally, is injunctive relief available in cases when patent infringement has been found by a court?

Injunctive relief is available in case patent infringement is found by a court.

Question 11: Could Nepal share a copy of the draft Bill of IP Act for the purpose of review and comments? Since the proposed IP draft Bill is in preliminary stage, we will circulate the draft for everyone's feedback by uploading in the official website.

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FOLLOW-UP QUESTIONS BY THE EUROPEAN UNION AND REPLIES PROVIDED BY NEPAL

European Union

3 TRADE POLICIES AND PRACTICES BY MEASURE EU initial question No 18:

i. Is Nepal considering any changes to the National Alcohol Regulation and Control Policy? If so, what measures are being considered and what is the timeframe for their adoption and entry into force? If Nepal is considering such changes, could Nepal confirm that any measures related to alcohol will be made following consultation with all relevant stakeholders, will be not more trade restrictive than necessary, and will avoid arbitrary discrimination among suppliers and among different product types, as required by the WTO GATT and TBT agreements?

ii. Furthermore, could Nepal clarify if imported alcohol products are and will be allowed to compete equitably and if Nepal intends to take more action against smuggling and abuse of duty free allowances, to protect lot codes, and to address the dangers and lost revenue of homebrew and the large illicit market? Answer:

i. Nepal aims at regulating liquor market in view of maintaining public health especially of children as it is elsewhere in the world. So far, the market is under- regulated, hence, sales and distribution is rampant. Because of this state, children are vulnerable to alcoholic drinks from early age and have created social tension. To address this issue, the Government of Nepal is working on a relevant policy that will regulate alcohol distribution in the market. ii. Nepal is fully committed to the WTO GATT and TBT Agreements and any changes will comply

accordingly. Its policy does not discriminate alcoholic products on the basis of origin.

EU follow-up questions: 1. Nepal replies that the market is under regulated. Could Nepal please clarify how the market is "under regulated" in more specific terms and what further regulation is needed for sales and distribution? To which products does this concern on "under regulation" apply?

2. Nepal's response states that: "the Government of Nepal is working on a relevant policy that will regulate alcohol distribution in the market". Could Nepal please clarify where that policy can be found and how stakeholders can express their views? 3. Could Nepal also clarify whether there is any draft legislation being prepared and how the Government proposes to consult relevant stakeholders on any draft legislation or other policy

measures considered under this policy review? 4. Does the Government of Nepal agree that children require protection both from domestic and

imported alcohol products? In that context, could Nepal please clarify whether there is or will be any difference in requirements applicable to these two categories of products (domestic/imported) on the basis of origin? For instance, could Nepal please clarify if there is or will be any difference in the labelling requirements?

Nepal

Question 1: Nepal replies that the market is under regulated. Could Nepal please clarify how the market is "under regulated" in more specific terms and what further regulation is needed for sales and distribution? To which products does this concern on "under regulation" apply?

Nepal aims at regulating liquor market in view of maintaining public health especially of children as it is elsewhere in the world. So far, the market is under-regulated, hence, sales and distribution is rampant. Because of this state, children are vulnerable to alcoholic drinks from early age and have

created social tension. To address this issue, the Government of Nepal is working on a relevant policy that will regulate alcohol distribution in the market.

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Question 2: Nepal's response states that: "the Government of Nepal is working on a relevant policy that will regulate alcohol distribution in the market". Could Nepal please clarify where that policy can be found and how stakeholders can express their views? Question 3:

Could Nepal also clarify whether there is any draft legislation being prepared and how the Government proposes to consult relevant stakeholders on any draft legislation or other policy measures considered under this policy review? Question 4: Does the Government of Nepal agree that children require protection both from domestic and

imported alcohol products? In that context, could Nepal please clarify whether there is or will be any difference in requirements applicable to these two categories of products (domestic/imported) on

the basis of origin? For instance, could Nepal please clarify if there is or will be any difference in the labeling requirements?

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