services trade restrictions

Services Trade Restrictions

July 17, 2012

Financial Services

ApproachA:Services with export potential, where the focus needs to be on requests to open export markets in your trading partner countries (offensive market access interests).B: Services with high potential for development but needing foreign investment, where the focus needs to be on opening Mode 3. Or services in which you need to increase efficiency to improve other services and manufacturing.C: Non-sensitive services with relatively low export potential, which can be liberalized in exchange for concessions from trading partners.D: Sensitive services that are best reserved for domestic suppliers, either because they are essential services, they are critical to national development goals, they include a lot of small operators who would be displaced by larger foreign firms that are more efficient, or they need further strengthening before being opened to international competition.

Overview of Presentation• Restrictions from legislation

– Banking– Insurance

• GATS Commitments• Comparison with COMESA Commitments• Key Issues

– Requests• Markets of interest• What is contained in legislation and GATS of countries of interest?

– Offer • Legislation, GATS, COMESA, or a combination?

Mode 1 Restrictions

(Mode 1 — Cross border trade):From the territory of one Member into the territory of any other Member.

Banking Insurance

Lending by Banks

Acceptance of Deposits by Banks

Automobile Insurance Life Insurance Re-insurance

Mauritius Allowed. Allowed. Not allowed. Not allowed. Allowed.

Botswana (I) (No GATS Commitments)

Allowed, with conditions. The interest rate of a foreign loan cannot exceed 13 percent per year.(R) Allowed.

Allowed, however firms must demonstrate that the desired services are otherwise unavailable locally/domestically. (R)

Allowed, however firms must demonstrate that the desired services are otherwise unavailable locally/domestically. (R)

Allowed, however firms must demonstrate that the desired services are otherwise unavailable locally/domestically (R).

Congo ((No GATS Commitments)

Allowed.(Request commitment) Check COMESA Allowed.

Allowed, subject to approval and registration. (RC)

Allowed, subject to approval and registration. (RC) Allowed.

Mauritius Mode 1

• Law– None– Except for anti money laundering– Beyond a certain amount you have to prove

source of funds. • No exchange control

Banking Insurance

Lending by Banks



Lesotho

Closed.??? Inconsistent with GATS commitment - ‘unbound’ (R)

This is allowed, subject to compliance with exchange laws .(RC). Allowed. Allowed. Allowed.

Madagascar (S) Not allowed. Not allowed. Not allowed. Not allowed. Not allowed.

MalawiAllowed, subject to approval. (RC).

Not allowed.??? (Inconsistent with GATS ‘None’) Not allowed.

This is allowed, subject to demonstration that the services provided are unavailable locally/domestically. (R)

This is allowed, subject to demonstration that the services provided are unavailable locally/domestically. (R)

Banking Insurance

Lending by Banks



Mozambique

This is allowed, subject to restrictions on the period, size and interest rate of the loan. (RC – GATS ‘None’) Allowed.

This is allowed, subject to demonstration of the local/domestic unavailability of the services provided. There are restrictions on the value of the insurance policy and the final sector receiving the service.

This is allowed, subject to demonstration of the local/domestic unavailability of the services provided. There are restrictions on the value of the insurance policy and the final sector receiving the service.

Allowed. (No GATS commitment)

Namibia

Allowed, subject to approval. Restrictions apply on interest rates of loans. (RC) GATS No commitments

Allowed, subject to special approval and with restrictions on the size of the deposit and total value of the portfolio. (RC) No GATS No commitments

Allowed, subject to demonstration of the local/domestic unavailability of the service provided. Twenty percent of insurance must be ceded to a domestic re-insurer.

Allowed, subject to demonstration of the local/domestic unavailability of the service provided. Twenty percent of insurance must be ceded to a domestic re-insurer. (R)

Twenty percent of insurance must be ceded to a domestic re-insurer. (R)

Banking Insurance

Lending by Banks



South Africa

Allowed (unbound in GATS). Allowed. Allowed.

Allowed. (R ‘unbound’ to be changed to ‘none’)

Allowed. Inconsistent with GATS commitments

Tanzania

Allowed. (No GATS commitments)

Allowed. (No GATS commitments)

This is allowed with restrictions, subject to approval and a cession requirement.

This is allowed with restrictions, subject to approval and a cession requirement. (RC)

This is allowed, subject to obtaining approval and fulfilling the cession requirement. (RC)

Banking Insurance

Lending by Banks



Zambia

Allowed. (R, No GATS commitments)

Allowed. (R, No GATS commitments)

This is allowed, subject to demonstration of local/domestic unavailability of the service.

This is allowed, subject to demonstration of local/domestic unavailability of the service. (R)

Allowed. (R) No GATS commitment

Banking Insurance

Lending by Banks



Zimbabwe

This is allowed, subject to approval and registration. The local/domestic unavailability of the service provided must be demonstrated. For cross- border loans, restrictions on size, duration and interest rate apply. (R)

This is allowed, subject to approval and registration. The local/domestic unavailability of the service provided must be demonstrated. (R)

This is allowed, subject to approval, registration and demonstration of domestic unavailability. Restrictions apply on the terms of the insurance policy, the value of the insurance policy, and the final sector receiving the service.

This is allowed, subject to approval, registration and demonstration of domestic unavailability. Restrictions apply on the terms of the insurance policy, the value of the insurance policy, and the final sector receiving the service. (R)

Local insurers are obliged to cede 100 percent of insurance to a domestic reinsurer. Cross-border reinsurance may be allowed if the capacity of the domestic reinsurance market is not sufficient to meet the needs of the domestic insurance companies. In particular, the term and value of the insurance policy, the sector of the firm requesting the service and the capacity of the domestic reinsurance market will be taken into consideration by the Commission in determining whether to allow cross-border reinsurance. (R)

Possible RequestsCountries Commitments

Botswana Lending by bank (with stipulation and No GATS commitment) (M1)

Acceptance of deposits (M1) Auto insurance(with stipulation and No GATS commitment)

(M1) Life insurance(with stipulation and No GATS commitment)

(M1) Re-insurance (with stipulation and No GATS commitment) (M1)

Congo Lending by bank (M1) (No GATS commitment) Acceptance of deposits (M1) (No GATS commitment) Auto insurance (with stipulation and No GATS commitment)

(M1) Life insurance (with stipulation and No GATS commitment)

(M1) Re-insurance (with stipulation and No GATS commitment) (M1)

Lesotho Acceptance of deposits (with stipulation) (M1) Auto insurance (M1) Life insurance (M1) Re-insurance (M1)

Lending by bank (M1) (Inconsistent with GATS)

Madagascar Suspended Suspended


Malawi Lending by bank (with stipulation) (M1) Life insurance (with stipulation) (M1) Re-insurance (with stipulation) (M1)

Acceptance of deposits (M1) (Inconsistent with GATS)

Auto insurance (M1)

Mozambique Lending by bank (with stipulation) (M1) Acceptance of deposits (M1) Lending by bank (with stipulation) (M1) Life insurance (with stipulation) (M1) Re-insurance (M1)

Namibia Lending by bank (with stipulation and no GATS commitments)(M1)

Acceptance of deposits (with stipulation and no GATS commitments) (M1)

Auto insurance(with stipulation) (M1) Life insurance(with stipulation) (M1) Re-insurance (with stipulation) (M1)


South Africa Lending by bank (unbound in GATS) (M1) Acceptance of deposits (M1) Auto insurance (M1) Life insurance(unbound in GATS) (M1) Re-insurance (inconsistent with GATS) (M1)

Tanzania Lending by bank (No GATS commitments) (M1) Acceptance of deposits (No GATS commitment) (M1) Auto insurance (M1) Life insurance(with stipulation (M1) Re-insurance (with stipulation) (M1)

Zambia Lending by bank (No GATS commitment) (M1) Acceptance of deposits (No GATS commitment) (M1 Auto insurance(with stipulation) (M1) Life insurance(with stipulation) (M1) Re-insurance (No GATS commitment) (M1)

Zimbabwe Lending by bank (with stipulation) (M1) Acceptance of deposits (with stipulation) (M1) Auto insurance (with stipulation) (M1) Life insurance (with stipulation) (M1) Re-insurance (with stipulation) (M1)

Mode 3 Restrictions

(Mode 3 — Commercial presence):By a service supplier of one Member, through commercial presence, in the

territory of any other Member.

Banking Insurance

Lending by Banks



Mauritius

Approval of the Bank of Mauritius is required in order to hold a significant share.

Approval of the Bank of Mauritius is required in order to hold a significant share.

Approval is required in order to acquire or hold a significant number of shares. Applicable licenses must be renewed annually. Five percent of insurance has to be ceded to a domestic re-insurer.



Banking Insurance

Lending by BanksAcceptance of Deposits by Banks


Botswana(No GATS commitment)

For acquisition or a greenfield investment, entry is allowed with a foreign ownership limit of 50 percent. For acquiring a state-owned bank, the foreign ownership limit is 49 percent. (R)

For a greenfield investment or the acquisition of an existing entity, the foreign ownership limit is set at 50 percent. For acquiring a state-owned bank, the foreign ownership limit is 49 percent. (R)

Entry through a branch is not allowed. The limit on foreign ownership through acquisition of state-owned entities is 49 percent. (R)



Congo

Open, however 99 percent of workers employed in foreign-owned banks must be nationals. In addition, 95 percent of the Board of Directors must be nationals. (R)

Open, however 99 percent of workers employed in foreign-owned banks must be nationals. In addition, 95 percent of the Board of Directors must be nationals. (R)

Closed – consistent with GATS.(Local Monopoly)

Closed. Closed – consistent with GATS.(Local Monopoly)

Closed – consistent with GATS.(Need partnership)

Banking Insurance

Lending by BanksAcceptance of Deposits by Banks


Lesotho

Licenses must be renewed annually. For the repatriation of earnings, permission of the Central Bank is required; this also applies to foreign companies that are beyond the Common Monetary Area (CMA). Application can be made at any commercial bank in the country. (R)





Banking InsuranceLending by Banks



Madagascar (S)

Entry through a branch is not allowed.

Entry through a branch is not allowed.

Entry through a branch is not allowed for automobile insurance. Maximum ownership of a state-owned insurer is 70 percent.



Malawi

Entry through a branch is not allowed. Five top executive positions can be occupied by foreigners, if required by the investor. For repatriation of earnings, approval of the Central Bank is required. (Inconsistent with GATS schedule =none)

Entry through a branch is not allowed. Five top executive positions can be occupied by foreigners, if required by the investor. For repatriation of earnings, approval of the Central Bank is required. (Inconsistent with GATS schedule =none)

Applicable licenses must be renewed annually. Five top executive positions can be occupied by foreigners, if required by the investor. For repatriation of earnings, approval of the Central Bank is required. (Inconsistent with GATS schedule =none)



Banking Insurance

Lending by Banks



Mozambique

The incorporation of financial companies requires authorization, which is granted on a case by case basis by the Governor of the Central Bank of Mozambique. To repatriate earnings, approval of the Investment Promotion Center and registration with the Central Bank is required. (RC)

The incorporation of financial companies requires authorization, which is granted on a case by case basis by the Governor of the Central Bank of Mozambique. To repatriate earnings, approval of the Investment Promotion Center and registration with the Central Bank is required. (RC)

This is open, except that for repatriation of earnings, approval of the Investment Promotion Center and registration with the Central Bank is required. (R) - No GATS Commitments



Banking Insurance

Lending by Banks



Namibia (No GATS Commitments)

Entry through a branch not allowed. Repatriation of dividends from Namibia is subject to a withholding tax of 10 percent. (R)

Entry through a branch is not allowed. Repatriation of dividends from Namibia is subject to a withholding tax of 10 percent. (R)

Entry through a branch is not allowed. 50% of Board of Directors members must be nationals. (R)

Entry through a branch not allowed. Fifty percent of Board of Directors members must be nationals. Repatriation of dividends from Namibia is subject to a withholding tax of 10 percent. (R)

Entry through a branch is not allowed. Fifty percent of Board of Directors members must be nationals. Repatriation of dividends from Namibia is subject to a withholding tax of 10 percent. (R)

Banking

Lending by Banks Acceptance of Deposits by Banks

South Africa

There is no limit on foreign ownership, although equity ownership by historically disadvantaged groups is encouraged and viewed as one of the factors in assessing a firm's overall profile with regards to the Black Economic Empowerment (BEE) program (non-discriminatory). Branching: permission from the Registar of Banks is required for each branch a bank wishes to open. Acquisition of a state-owned entity is not allowed. Foreign exchange control restrictions may apply to resident companies (non-discriminatory). (RC)

There is no limit on foreign ownership, although equity ownership by historically disadvantaged groups is encouraged and viewed as one of the factors in assessing a firm's overall profile with regards to the Black Economic Empowerment (BEE) program (non-discriminatory). Branching: permission from the Registar of Banks is required for each branch a bank wishes to open. Acquisition of a state-owned entity is not allowed. Foreign exchange control restrictions may apply to resident companies (non-discriminatory). (RC)

Insurance


South Africa

Entry through a branch is not allowed. There is no limit on foreign ownership, although equity ownership by historically disadvantaged groups is encouraged and viewed as one of the factors in assessing a firm's overall profile with regards to the Black Economic Empowerment (BEE) program (non-discriminatory). Acquisition of a state-owned entity is not allowed. Foreign exchange control restrictions may apply to resident companies (non-discriminatory). (R)

Entry through a branch is not allowed. There is no limit on foreign ownership, although equity ownership by historically disadvantaged groups is encouraged and viewed as one of the factors in assessing a firm's overall profile with regards to the Black Economic Empowerment (BEE) program (non-discriminatory). Acquisition of a state-owned entity is not allowed. Foreign exchange control restrictions may apply to resident companies (non-discriminatory). (R)

Entry through a branch is not allowed. There is no limit on foreign ownership, although equity ownership by historically disadvantaged groups is encouraged and viewed as one of the factors in assessing a firm's overall profile with regards to the Black Economic Empowerment (BEE) program (non-discriminatory). Acquisition of a state-owned entity is not allowed. Foreign exchange control restrictions may apply to resident companies (non-discriminatory). (

Banking Insurance

Lending by Banks



Tanzania (No GATS Commitments)

Entry through a branch is not allowed. Only key positions can be filled with foreigners. (R)

Entry through a branch is not allowed. Only key positions can be filled with foreigners. (R)

Insurance Automobile Insurance This is allowed with restrictions, subject to approval and a cession requirement. Entry through a branch is not allowed. The foreign ownership limit is 66.7 percent. Five percent of employees and 2/3 of board members can be foreigners. (R)

Entry through a branch is not allowed. The foreign ownership limit is 66.7 percent. Five percent of employees and 2/3 of board members can be foreigners. (R)

There are no restrictions on the form of entry. The foreign ownership limit is 66.7 percent. Five percent of employees and 2/3 of board members can be foreigners. The cession requirement is 20 percent on policy and treaty reinsurance for the years 2008-2012, 15 percent in 2013, 10 percent in 2014 and 0 percent subsequently. (R)

Banking Insurance

Lending by Banks



Zambia(No GATS Commitments)

There are no restrictions, except that 50 percent of the Board of Directors must be domestic residents. (R)

There are no restrictions, except that 50 percent of the Board of Directors must be domestic residents. (R)

Entry through a branch is not allowed. Licenses must be renewed annually. Fifty percent of the Board of Directors must be domestic residents. (R)



Banking

Lending by Banks Acceptance of Deposits by Banks

Zimbabwe

Entry through a branch is not allowed. Licenses must be renewed annually. All companies in Zimbabwe must be 51% owned or controlled by indigenous Zimbabweans (60% in GATS Commitment) . Employment of foreign workers is subject to LMT. For repatriation of earnings, approval of the Reserve Bank is required and repatriation is subject to availability of foreign currency (which may be difficult due to the severe shortage of foreign currency). (RC)

Entry through a branch is not allowed. Licenses must be renewed annually. Employment of foreign workers is subject to LMT. All companies in Zimbabwe must be fifty-one percent owned or controlled by indigenous Zimbabweans. (60% in GATS Commitment) . For repatriation of earnings, approval of the Reserve Bank is required and repatriation is subject to availability of foreign currency (which may be difficult due to the severe shortage of foreign currency). (RC)

Insurance


Zimbabwe

Entry through a branch is not allowed. The foreign ownership limit is 49 percent for aggregate foreign investment, 40 percent for a single foreign investor. All companies in Zimbabwe must be fifty-one percent owned or controlled by indigenous Zimbabweans. Employment of foreign workers is subject to LMT. For repatriation of earnings, approval of the Reserve Bank is required and repatriation is subject to availability of foreign currency (which may be difficult due to the severe shortage of foreign currency) (R) No GATS Commitments).

Entry through a branch is not allowed. The foreign ownership limit is 49 percent for aggregate foreign investment, 40 percent for a single foreign investor. All companies in Zimbabwe must be fifty-one percent owned or controlled by indigenous Zimbabweans. Employment of foreign workers is subject to LMT. For repatriation of earnings, approval of the Reserve Bank is required and repatriation is subject to availability of foreign currency (which may be difficult due to the severe shortage of foreign currency). (R) No GATS Commitments)

Entry through a branch is not allowed. All companies in Zimbabwe must be fifty-one percent owned or controlled by indigenous Zimbabweans. The foreign ownership limit is 49 percent, however exceptions are made by the authority. Employment of foreign workers is subject to LMT. Local insurers are obliged to cede 100 percent of insurance to a domestic reinsurer. Reinsurance with non-domestic companies may be allowed if the capacity of the domestic reinsurance market is not sufficient to meet the needs of the domestic insurance companies. At least 51 percent of the Board of Directors must be nationals. Repatriation of earnings is subject to approval and availability of foreign currency. (R) No GATS Commitments)

Possible RequestsCountries Commitments Botswana Lending by banks (with stipulation and No GATS

commitment) (M3) Acceptance of deposits (with stipulation and No

GATS commitment) (M3) Auto insurance (with stipulation and No GATS

commitment) (M3) Life insurance (with stipulation and No GATS

commitment) (M3) Re-insurance (with stipulation and No GATS

commitment) (M3)Congo Lending by banks (with stipulation) (M3)

Acceptance of deposits (with stipulation (M3) Auto insurance (Local

monopoly) (M3) Life insurance (local

monopoly) (M3) Re-insurance (Local

monopoly) (M3)Lesotho Lending by bank (with stipulation) (M3)

Acceptance of deposits (with stipulation) (M1) Auto insurance(with stipulation) (M3) Life insurance(with stipulation) (M3) Re-insurance (with stipulation) (M3)

Madagascar Supsended Suspended

Possible RequestsCountries Commitments Malawi Lending by bank (Inconsistent with GATS schedule) (M3)

Acceptance of deposits (Inconsistent with GATS schedule) (M3) Auto insurance(Inconsistent with GATS schedule) (M3) Life insurance(Inconsistent with GATS schedule) (M3) Re-insurance (Inconsistent with GATS schedule) (M3)

Mozambique Lending by bank (with stipulation) (M3) Acceptance of deposits (with stipulation) (M3) Auto insurance (No GATS commitment) (M3) Life insurance (No GATS commitment) (M3) Re-insurance (No GATS commitment) (M3)

Namibia Lending by banks (with stipulation and No GATS commitment) (M3)

Acceptance of deposits (with stipulation and No GATS commitment) (M3)

Auto insurance (with stipulation and No GATS commitment) (M3) Life insurance (with stipulation and No GATS commitment) (M3) Re-insurance (with stipulation and No GATS commitment) (M3)

South Africa Lending by bank (with stipulation) (M3) Acceptance of deposits (with stipulation) (M3) Auto insurance(with stipulation) (M3) Life insurance(with stipulation) (M3) Re-insurance (with stipulation) (M3)

Possible RequestsCountries Commitments Tanzania Lending by banks (with stipulation and No GATS commitment) (M3)

Acceptance of deposits (with stipulation and No GATS commitment) (M3)

Auto insurance (with stipulation and No GATS commitment) (M3) Life insurance (with stipulation and No GATS commitment) (M3) Re-insurance (with stipulation and No GATS commitment) (M3)

Zambia Lending by banks (with stipulation and No GATS commitment) (M3) Acceptance of deposits (with stipulation and No GATS commitment)

(M3) Auto insurance (with stipulation and No GATS commitment) (M3) Life insurance (with stipulation and No GATS commitment) (M3) Re-insurance (with stipulation and No GATS commitment) (M3)

Zimbabwe Lending by bank (with stipulation) (M3) Acceptance of deposits (with stipulation) (M3) Auto insurance(with stipulation and No GATS commitment) (M3) Life insurance(with stipulation and No GATS commitment) (M3) Re-insurance (with stipulation and No GATS commitment) (M3)

Services Trade Restrictions Index

Botswana 30.3Congo, the Democratic Republic of the 39.5Lesotho 0Madagascar 31.2Malawi 35.2Mauritius 9Mozambique 17.2Namibia 27.4South Africa 19.5Tanzania, United Republic of 22.7Zambia 8.4Zimbabwe 55.5

Financial Services

The end.

Thank you/

services trade restrictions

Documents

desired services

essential services

nonsensitive services

financial services approacha

rc gats

gats of countries

gats commitmentsallowed

gats nonenot