Identifier
Created
Classification
Origin
06SINGAPORE3442
2006-10-27 11:12:00
UNCLASSIFIED
Embassy Singapore
Cable title:  

SINGAPORE - 2007 NATIONAL TRADE ESTIMATES

Tags:  ECON ETRD EINV EFIN KIPR ECPS SN 
pdf how-to read a cable
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RR RUEHCHI RUEHDT RUEHHM RUEHNH
DE RUEHGP #3442/01 3001112
ZNR UUUUU ZZH
R 271112Z OCT 06
FM AMEMBASSY SINGAPORE
TO RUEHC/SECSTATE WASHDC 1698
INFO RUCPDOC/USDOC WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUCNASE/ASEAN MEMBER COLLECTIVE
UNCLAS SECTION 01 OF 11 SINGAPORE 003442 

SIPDIS

STATE FOR EB/TPP/BTA
USDOC FOR JBAKER
STATE PASS USTR FOR AUSTR WEISEL, JJENSEN AND
GBLUE

SENSITIVE BUT UNCLASSIFIED

SIPDIS

E.O. 12958: N/A
TAGS: ECON ETRD EINV EFIN KIPR ECPS SN
SUBJECT: SINGAPORE - 2007 NATIONAL TRADE ESTIMATES
REPORT

REF: STATE 136302

UNCLAS SECTION 01 OF 11 SINGAPORE 003442

SIPDIS

STATE FOR EB/TPP/BTA
USDOC FOR JBAKER
STATE PASS USTR FOR AUSTR WEISEL, JJENSEN AND
GBLUE

SENSITIVE BUT UNCLASSIFIED

SIPDIS

E.O. 12958: N/A
TAGS: ECON ETRD EINV EFIN KIPR ECPS SN
SUBJECT: SINGAPORE - 2007 NATIONAL TRADE ESTIMATES
REPORT

REF: STATE 136302


1. Per reftel instructions, post submits its draft
chapter on Singapore for the 2007 National Trade
Estimate Report. We assume that Washington agencies
will update the trade and investment data in the
first three paragraphs of the report as they have
done in the past. Per reftel instructions, we have
emailed the text of the draft report, in MS Word
format and showing changes from last year's version,
to USTR.


2. Begin text of the 2007 National Trade Estimate
report:

TRADE SUMMARY

The U.S. goods trade surplus with Singapore was
$5.5 billion in 2005, an increase of $1.3 billion
from $4.2 billion in 2004. U.S. goods exports in
2005 were $20.6 billion, up 5.3 percent from the
previous year. Corresponding U.S. imports from
Singapore were $15.1 billion, down 1.6 percent.
Singapore is currently the eleventh largest export
market for U.S. goods.

U.S. exports of private commercial services (i.e.,
excluding military and government) to Singapore
were $5.6 billion in 2004 (latest data available),
and U.S. imports were $2.7 billion.
Sales of services in Singapore by majority
U.S.-owned affiliates were $6.7 billion in 2003
(latest data available),while sales of services
in the United States by majority Singapore-owned
firms were $1.5 billion.

The stock of U.S. foreign direct investment (FDI)
in Singapore in 2004 was $56.9 billion, up from
$50.3 billion in 2003. U.S. FDI in Singapore is
concentrated largely in the manufacturing,
finance, and information sectors.

FREE TRADE AGREEMENT (FTA)

The United States and Singapore signed a free
trade agreement (FTA) on May 6, 2003, which entered
into force on January 1, 2004. In addition to the
FTA with the United States, Singapore has concluded
bilateral FTAs with Australia, the European Free
Trade Association, Japan, Jordan, New Zealand,
South Korea, India, and Panama and a quadri-lateral

agreement with Chile, New Zealand, and Brunei.
Singapore is negotiating FTAs with Bahrain, Canada,
China, Egypt, Kuwait, Mexico, Pakistan, Peru,
Qatar, Sri Lanka, and the United Arab Emirates.
As a member of the ASEAN Free Trade Area, Singapore
is involved in ASEAN's FTA negotiations with
Australia, New Zealand, China, India, Japan,
and South Korea.

IMPORT POLICIES

Tariffs

Singapore generally imposes no tariffs on goods.
It eliminated the last four remaining tariffs
(covering imports of beer and certain alcoholic
beverages) for goods originating in the United
States when the FTA came into force. For social
and/or environmental reasons, Singapore levies
high excise taxes, applicable to U.S. and other
exporters, on distilled spirits and wine, tobacco
products, motor vehicles (all of which are
imported),and gasoline. Singapore does not impose
any restrictions or duties on imports or exports of
textiles and apparel. During the Uruguay Round of
Multilateral Trade Negotiations, Singapore agreed
to bind 70.5 percent of its tariff lines.
Singapore is a signatory to the WTO Information
Technology Agreement (ITA).

Import Licenses


SINGAPORE 00003442 002 OF 011


All imports require an import permit, primarily
for statistical tracking purposes. Special import
licenses are required for certain goods, including
designated strategic items, hazardous chemicals,
films and videos, arms and ammunition, agricultural
biotech products, food derived from agricultural
biotechnology products, prescription drugs,
over-the-counter drugs, vitamins with very high
dosages of certain nutrients, and cosmetics/skin
care products. As a result of the FTA, Singapore
now allows the importation of chewing gum with
therapeutic value for sale, subject to certain
provisions.

STANDARDS, TESTING, LABELING AND CERTIFICATION

Under the 2002 Consumer Protection (Safety
Requirements) Regulations, 45 categories of
electrical, electronic, and gas home appliances
and accessories are listed as controlled goods
and require a stamp of approval from the Government
of Singapore's standards and certification authority
(SPRING Singapore). SPRING Singapore recognizes test
reports issued by accredited testing laboratories and
national certification bodies, including those in
the United States. Labels conforming to standardized
formats are required on imported foods, drugs,
liquors, paints, and solvents.

Agriculture

SingaporeQs food import policy is to guarantee a
steady and sufficient supply of healthful and
high-quality foods from a broad number of countries.
Singapore allows meat and poultry imports solely
from countries with which it has protocol agreements.
Doing so preserves its rigorous food safety
requirements through the integration of foreign farm
accreditation, inspection, and regular testing.
Export health documentation endorsed by federal
health institutions must accompany every shipment
of imported meat and poultry.
In addition, Singapore health authorities test every
shipment of imported meat and poultry visually for
wholesomeness and to ensure it is free from spoilage
and disease. Meat and poultry products samples are
regularly sent to government laboratories for
evaluation to guarantee that they do not exceed the
allowable microbiological specifications for raw
meat and poultry products. SingaporeQs Agri-food
and Veterinary Authority (AVA) enforces a zero
tolerance policy for salmonella enteriditis and
E-coli E. 0157 in raw meat products, which is
not in line with international standards and has
posed some difficulties for U.S. exporters.

AVA prohibits beef imports from nations in which
Bovine Spongiform Encephalopathy (BSE) has been
detected, including the United States. Singapore
previously required six years of non- BSE detection
in a country before re-establishing trade, but has
now established a minimum risk rule in line with
OIE guidelines.
On January 17, 2006, Singapore announced the
re-opening of its market to U.S. boneless beef
from animals under 30 months of age.

Fresh produce imports are tagged to secure their
traceability to farms. Routinely, fresh produce
is tested to guarantee that it does not exceed
maximum pesticide residue limitations (MRLs).

GOVERNMENT PROCUREMENT

Singapore has been a signatory to the WTO Government
Procurement Agreement (GPA) since 1997. The FTA
provides additional government procurement access to
U.S. firms by expanding the contracts covered by
Singapore's PA commitments, in part by subjecting
additional contracts to FTA disciplines. Some U.S.
and local firms, however, have expressed concerns
that government-owned and government-linked
companies (GLCs) may receive preferential treatment

SINGAPORE 00003442 003 OF 011


in the government procurement process. Singapore's
government denies that it gives any
preferences to GLCs or that GLCs give preferences
to other GLCs.

EXPORT SUBSIDIES

Singapore's government does not directly subsidize
exports, although it offers significant incentives
to attract export- oriented foreign investments.
In addition to tax incentives and
reimbursements to exporters for certain trade
promotion costs, the government also offers grants
to new service suppliers.

INTELLECTUAL PROPERTY RIGHTS (IPR) PROTECTION

In line with its FTA commitments and obligations
under international treaties and conventions,
Singapore has developed one of the strongest IPR
regimes in Asia. Amendments to the
Trademarks Act, the Patents Act, the Layout Designs
of Integrated Circuits Act, Registered Designs Act,
and a new Plant Varieties Protection Act and new
Manufacture of Optical Discs Act came into effect
in July 2004. The amended Copyright Act and
Broadcasting Act became effective in January 2005;
the Copyright Act was further amended in August 2005.
Singapore has implemented Article 1 through Article
6 of the World Intellectual Property Organization
(WIPO) Joint Recommendation Concerning Provisions
on the Protection of Well-Known Marks of 1999.
It has signed and ratified the International
Convention for the Protection of New Varieties of
Plants (1991); the Convention Relating to the
Distribution of Program-Carrying Signals
Transmitted by Satellite (1974); the WIPO Copyright
Treaty (1996); and the WIPO Performances and
Phonograms Treaty (1996). Singapore is a signatory
to other international IPR agreements, including
the Paris Convention, the Patent Cooperation
Treaty, the Madrid Protocol, and the Budapest
Treaty. The WIPO Secretariat opened offices in
Singapore in June 2005.

Parallel Imports

Singapore allows parallel imports. Under the
amended Patents Act, the patent owner has the right
to bring an action to stop an importer of "grey
market goods" from importing the patent owner's
patented product if the product has not previously
been sold or distributed in Singapore.

Transshipment

Although a major transshipment and transit point
for sea and air cargo, Singapore does not collect
information on the contents and destinations of
most transshipment and transit trade, which
accounts for 80 percent of the cargo coming
through the port.
This lack of information makes enforcement against
transshipment or transit trade in infringing
products virtually impossible.
In addition, goods in transit are not subject to
seizure under the Copyright Act, although it may
be possible if a search warrant is obtained in
advance. Under its FTA commitments,
Singapore amended Section 31 of the Import/Export
Act in November 2003 to facilitate
information-sharing with U.S. Customs and Border
Protection and other country officials with
which it has relevant trade agreements.

Internet

In accordance with the FTA, Singapore's amended
Copyright Act provides improved protection for
digital works, and outlines requirements and
procedures for removing infringing material
from Internet sites. Despite the amendment,
the copyright industry maintains that the new law

SINGAPORE 00003442 004 OF 011


fails to impose full liability on service providers
engaged in infringing activity.
U.S. industry is concerned that Internet piracy in
Singapore is on the rise as a result of the
increasing availability of the country's broadband
facilities.

Enforcement

In line with its FTA obligations, Singapore has
taken steps to improve IPR protection. Singapore
claims that its enforcement efforts have almost
eliminated the production of pirated material
and blatant storefront retail piracy. According
to the Singapore Police, the value of counterfeit
and pirated goods seized from both domestic and
foreign sources in 2005 was $12 million, compared
to $8 million in 2004.

According to industry estimates, Singapore's piracy
rate averaged 5 percent for music and 12 percent for
movies. Software piracy levels in Singapore, while
among the lowest in the Asia-Pacific region, are
almost double the estimated level in the United
States. Business software losses were estimated
at nearly $86 million in 2005.

In September 2005, the Singapore Police
initiated its first corporate end-user
enforcement action under the amended Copyright
Act, raiding a private company suspected of
using approximately $30,000 in illegal
software.
The Singapore Subordinate Court charged the
company with three counts of copyright
infringement and imposed a $19,000 fine in
April 2006. During the second annual review of
the FTA in March 2006, Singapore agreed to
monitor whether the discrepancy in maximum
penalties for different types of copyright
infringement creates enforcement-related
difficulties.

In February 2006, police jailed two individuals
for illegally distributing music files online
and in October raided the homes of seven people
suspected of knowingly downloading large numbers
of infringing files from the Internet.

While a number of local educational institutions
(the majority government-operated) have signed
agreements to comply with their legal obligations
to pay royalty fees to publishers, unlawful
duplication of textbooks at some commercial copy
centers continues. The police have conducted
multiple raids, but, according to industry
representatives, the practice is lucrative
enough to continue in spite of the possibility
of large fines.

Some U.S. and other companies have expressed
concern about Singapore's lack of whistleblower
protection legislation. They argue that the
lack of such protections hinders their ability
to obtain signed affidavits (and by extension,
search warrants) from informants.

SERVICES BARRIERS

Basic Telecommunications

On April 1, 2000, Singapore began removing all
barriers limiting foreign entry to the
telecommunications sector. Any foreign or
domestic company can provide facilities-based
(fixed line or mobile) or services-based (local,
international, and callback)
telecommunications services. Under the Telecoms
Competition Code 2000 (Competition Code),the
former monopoly (and 62 percent government-
owned) telecommunications service provider,
Singapore Telecommunications (SingTel),faces
competition in all market segments, including

SINGAPORE 00003442 005 OF 011


fixed-line, mobile, and paging services.
Its main competitors, MobileOne and StarHub,
are also GLCs. The Infocomm Development
Authority (IDA) in March 2005 finalized its
triennial review of the Competition Code,
which aims to enhance market transparency.
SingTel has implemented most provisions of the
Code, including making public its prices for
interconnection services.

Singapore has yet to fully implement FTA
commitments that would allow facilities-based
operators to take advantage of wholesale
pricing for SingTel's ("last mile") local
leased circuits. IDA first mandated this
regulatory change in December 2003, but
SingTel has repeatedly contested this
directive, typically through requests for IDA
to stay decisions or through appeals to
the Minister for Information, Communications
and the Arts (MICA). In October 2005, IDA
amended SingTel's Reference Interconnection
Offer to provide for a more appropriate, open-
standard technical interface. SingTel appealed
IDA's decision,
which MICA upheld in May 2006. Although SingTel
must now offer wholesale prices for local leased
circuits at reduced rates ranging from 55 to 82
percent, U.S. industry is still unable to
avail itself of this more competitive pricing
structure due to certain uneconomical technical
interconnection requirements imposed by SingTel.

U.S. and other companies remain concerned about
the lack of transparency in some aspects of
Singapore's telecommunications regulatory and
rule-making process. In particular, there is no
obligation to make information publicly
available concerning a company's request for a
stay of decision or the filing of an
appeal, to request public comments about such
requests, or to publish a detailed explanation
concerning final decisions made by IDA or MICA.
Although this "closed-door" system does not
contravene Singapore's FTA obligations,
Singapore is reviewing this process at the
U.S. Government's request to determine how to
make it more transparent.

Under the FTA, Singapore agreed that dominant
licensees (SingTel and StarHub) must offer
cost-based access to submarine cable-
landing stations and allow sharing of facilities.
U.S. and other companies continue to have
problems with access to ducts as provided for
in the FTA.

Since November 2003, SingTel has been exempted
from dominant licensee status for wholesale
international telephone services
(ITS) and tariff filing requirements for
residential and commercial retail ITS. In
September 2006, IDA announced its preliminary
decision to exempt SingTel from dominant
licensee obligations for the residential portion
of the retail ITS while keeping the commercial
retail ITS under dominant licensee obligations.

Audiovisual and Media Services

Singapore's local free-to-air broadcasting,
cable, and newspaper sectors are effectively
closed to foreign firms.
Section 47 of the Broadcasting Act restricts
foreign equity ownership of companies
broadcasting to the Singapore domestic market
to less than 49 percent, although the Act also
gives the Media Development Authority (MDA)
authority to waive this requirement.
The government also limits individual equity
stakes in broadcasting companies to no more
than five percent of issued shares.


SINGAPORE 00003442 006 OF 011


MediaCorp TV is the only free-to-air television
broadcaster. It is 80-percent owned by the
government and 20-percent by publicly
listed Singapore Press Holdings (SPH).
Under MDA rules, MediaCorp TV must outsource
at least 285 hours of local content production
to independent television production companies
per year. The sole subscription TV provider,
StarHub Cable Vision (SCV),is a 100
percent-owned subsidiary of a majority
government-owned publicly listed company.
Free-to-air radio broadcasters are mainly
government-owned, with MediaCorp Radio Singapore
being the largest operator. BBC World Service
is the only foreign free-to-air broadcaster in
Singapore. In July 2005, MDA announced its
intention to impose more restrictive
regulations governing the relationships
between content/channel providers and pay TV
operators in Singapore, i.e., SCV.
Following industry feedback, it determined
in May 2006 not to proceed in this direction.
Singapore restricts the use of satellite
receiving dishes and has not authorized
direct-to-home satellite television services.
MDA must license the installation and operation
of broadcast-receiving equipment,
including satellite dishes. Satellite
broadcasters that want to operate their own
uplink facility must get a special license
from MDA. Satellite broadcasters lacking
their own facility are restricted to using
one of four available uplink facilities.

The Newspaper and Printing Presses Act
restricts equity ownership (local or foreign)
to five percent per shareholder,
unless the government approves a larger
shareholding, and requires that all the directors
of a newspaper company be Singapore citizens.
Newspaper companies must issue two classes
of shares, ordinary and management, with the
latter available only to citizens of Singapore
or to Singapore companies approved
by the government.

Media businesses or professionals must be
licensed by MDA in order to provide services
or apparatus and equipment. Printed and audio
material is no longer subject to prior review,
but licensees are advised to abide by MDA
guidelines. MDA requires all film and video
material for distribution and screening to be
certified and classified. The government can
deny or revoke permits without warning or
without giving a reason.

Distribution, importation or possession of
any "offshore" or foreign newspaper must be
approved by the government. Singapore
significantly restricts freedom of the press,
having curtailed or banned the circulation of
some foreign publications. In September 2006,
Singapore banned the Far Eastern Economic
Review on grounds that the publisher did not
comply with Section 23 of the Newspaper and
Printing Presses Act, whereby the offshore
publisher must appoint a person within
Singapore authorized to accept service of any
notice or legal process on behalf of the
publisher and post a security deposit of
S$200,000 (US$125,000).
The government has also "gazetted" foreign
newspapers i.e., numerically limited their
circulation. Foreign publishers also
face the risk of defamation suits should they
be found to "interfere" with Singapore's
domestic politics.

Legal Services

U.S. and other foreign law firms with offices
in Singapore face certain restrictions.

SINGAPORE 00003442 007 OF 011


They cannot practice Singapore law,
employ Singapore lawyers to practice Singapore
law, or litigate in local courts. Since June
2004, U.S. and other foreign lawyers have
been allowed to represent parties in
arbitration in Singapore without the need for
a Singapore attorney to be present. U.S. law
firms can provide legal services in relation
to Singapore law only through a Joint Law
Venture (JLV) or Formal Law Alliance (FLA) with
a Singapore law firm, subject to the Guidelines
for Registration of Foreign Lawyers in Joint Law
Ventures to Practice Singapore Law. Singapore
relaxed one of these guidelines for U.S. law
firms under the FTA. As of October 2005, 16
of the 64 foreign law firms in Singapore were
from the United States. Additionally, there
was one U.S. JLV and one FLA.

Except for law degrees from designated U.S.,
Australian, New Zealand and British universities,
no foreign university law degrees are recognized
for the purpose of admission to practice
law in Singapore. Under the FTA, Singapore has
recognized law degrees from Harvard University,
Columbia University, New York University, and the
University of Michigan, effective April 7,

2006.

To address a perceived shortage of practicing
lawyers, Singapore relaxed its criteria for
admission of attorneys to the Singapore
Bar, effective October 2006. One of the new
criteria will admit to the Bar Singapore-citizen
or permanent-resident law school
graduates of the above-mentioned designated
universities who were ranked among the top 70
percent of their graduating class or have
obtained second class honors under the
British system.
The government also intends to allow highly
skilled foreign lawyers to practice Singapore
corporate, finance and banking law, and is
considering possible implementation
alternatives.

Engineering and Architectural Services

Engineering and architecture firms can be
100 percent foreign- owned. In line with FTA
provisions, and also applicable to all
foreign firms, Singapore has removed the
requirement that the chairman and two-thirds
of the firmQs board of directors must be
composed of engineers, architects or land
surveyors registered with local professional
bodies. Practicing engineers and
architects must register with the Professional
Engineers Board and the Architects Board,
respectively. Under amended legislation,
local and foreign job applicants, including U.S.
degree-holders, will be required to have at
least four years of practical experience in
engineering or architectural works and
pass an examination set by the respective
Board.

Accounting and Tax Services

The major international accounting firms
all operate in Singapore. Public accountants
and at least one partner of a public
accounting firm must reside in Singapore.
Only public accountants who are members of
the Institute of Certified Public
Accountants of Singapore and registered with
the Public Accountants Board of Singapore may
practice public accountancy in the country.
The Board recognizes U.S. accountants
registered with the American Institute of
Certified Public Accountants.

Banking and Securities

SINGAPORE 00003442 008 OF 011



Retail Banking

Singapore maintains legal distinctions between
offshore and domestic banking units, and the
type of license held (full, wholesale or
offshore). Except in retail banking,
Singapore laws do not distinguish operationally
between foreign and domestic banks.

In 1999, Singapore embarked on a five-year
banking liberalization program to ease
restrictions on foreign banks and
supplemented this with phased-in provisions
under the FTA.
Since then, the government has removed a 40
percent ceiling on foreign ownership of local
banks and a 20 percent aggregate
foreign shareholding limit on finance companies.
It has granted "qualifying full bank" (QFB) or
full service licenses to six foreign banks,
including two U.S. banks. Since January 2004,
under the FTA, U.S.-licensed full-service
banks have been able to operate at up to 30
customer service locations (branches or
off-premise ATMs); non-U.S. full-service
foreign banks have been allowed to operate
since January 2005 at up to 25 locations,
compared to 15 previously. These full-service
banks can also freely relocate existing
branches and share ATMs among themselves.
They also can provide electronic funds
transfer, point-of-sale debit, and Central
Provident Fund (Singapore's compulsory
pension fund) related services.

The FTA obligates Singapore to further improve
market access for U.S. banks. In June 2005,
Singapore lifted its ban on new
licenses for full-service banks, and will do
the same for wholesale banks by January 1,

2007. Since January 1, 2006, licensed
full-service banks have been able to operate
at an unlimited number of locations. Locally
incorporated subsidiaries of U.S. full-service
banks have been able to apply for access to
local ATM networks since June 30, 2006. Non-
locally incorporated subsidiaries of U.S.
full-service banks can begin doing so
effective January 1, 2008.

Despite liberalization, U.S. and other
foreign banks in the domestic retail banking
sector still face barriers. Local
retail banks do not face similar constraints
on customer service locations or access to
the local ATM network. Foreign charge
card issuers are prohibited from allowing
their local card holders to access their
accounts through the local ATM networks.
Customers of foreign banks are also unable to
access their accounts for cash withdrawals,
transfers, or bill payments at ATMs operated
by banks other than their own or at ATMs other
than those within their shared ATM network.

U.S. industry advocates enhancements to
Singapore's credit bureau system, in
particular adoption of an open admission
system for all credit lenders, including
non-banks. Singapore currently has two
credit bureaus. Credit Bureau (Singapore)
Pte Ltd ("CBS") is essentially an arm of the
Association of Banks in Singapore; its files
do not include non-banking account
information, and its credit reports are not
available to non- banks to assist in
underwriting. Credit Scan, launched in 2003,
allows wider access to non-banks; however,
its information is generally negative only
and therefore narrower in scope due to
the lack of positive information.


SINGAPORE 00003442 009 OF 011


The Minister of Finance must provide specific
approval for acquisitions of 5 percent, 12
percent or 20 percent or more of the voting
shares of a local bank. Although it has
lifted the formal ceilings on foreign
ownership of local banks and finance
companies, the government has indicated
that it will not allow a foreign takeover
of its three major local financial
institutions. Foreign penetration of
the Singapore banking system is comparatively
high, with foreign banks holding about
40 percent of non-bank deposits. The
government has stated publicly that it
wants local banksQ share of total resident
deposits to remain above 50 percent.

Restricted and Offshore Banking

Since 2001, Singapore's licensing regime
has shifted away from distinguishing between
on-shore and offshore banking activities
to one that distinguishes between retail
and wholesale activities. The Monetary
Authority of Singapore (MAS) has issued
20 new wholesale bank licenses as part of the
liberalization program since 2001. MAS
continues to upgrade certain existing
offshore banks to wholesale bank status.
New foreign bank entrants are also eligible to
apply for wholesale banking licenses. Unless
otherwise approved by MAS, wholesale
banks can operate in only one location.

Restrictions on Singapore Dollar Lending

Non-residents can borrow local currency
freely if the proceeds are used in Singapore.
Non-resident financial entities may
borrow local currency freely for their use
in or outside Singapore if the amount does not
exceed S$5 million (US$3.1 million); if it does,
the amount must be swapped or converted
into foreign currency upon drawdown.
There are no controls on the borrowing of
Singapore dollars by residents. MAS requires
banks to report their monthly aggregate
outstanding Singapore dollar lending to
non-resident financial institutions.

Securities

In January 2002, Singapore removed all
trading restrictions on foreign-owned
stockbrokers. Aggregate investment by
foreigners, however, may not exceed 70
percent of the paid-up capital of dealers
that are members of the Singapore Exchange
Limited (SGX). Foreign funds may be registered
directly, provided the prospectus is from an
entity registered as a foreign company in
Singapore and the fund is approved by MAS.

Distribution Services

The Ministry of Trade and Industry
implemented a Multi-Level Marketing and
Pyramid Selling (Excluded Schemes and
Arrangements) Order in January 2002 to
clarify which kinds of multi-level and
direct marketing/selling arrangements,
whether local or foreign, are legal in
Singapore. The order prohibits
compensation for recruitment of participants.
It prohibits any Singapore-registered company
or citizen/resident from promoting
any overseas pyramid selling marketed through
the Internet.
Insurance businesses licensed under the
Insurance Act and its subsidiary legislation,
master franchise schemes, and direct
selling schemes that meet conditions listed in
the Order are exempted from the Act.

SINGAPORE 00003442 010 OF 011



INVESTMENT BARRIERS

Singapore has a generally open investment
regime and no overarching screening process
for foreign investment. Singapore
places no restrictions on reinvestment or
repatriation of earnings and capital.
The investment chapter of the United
States-Singapore FTA provides for national
and most-favored nation treatment, the right
to make financial transfers freely
and without delay, disciplines on performance
requirements, international law standards for
expropriation and compensation, and access
to binding international arbitration.

ELECTRONIC COMMERCE

Singapore has no significant barriers
hindering the development and use of
electronic commerce. The FTA contains
state-of-the- art provisions on electronic
commerce, including national treatment and
most-favored nation obligations for products
delivered electronically, affirmation that
services disciplines cover all services
delivered electronically, and permanent
duty- free status of products delivered
electronically.

Singapore considers the Internet to fall
within the scope of its Broadcasting Act.
Internet service providers (ISPs) must
channel all Internet traffic through Internet
access service providers (IASPs) that function
as main "gateways" to the Internet. Internet
service resellers, Internet content
providers (ICPs),individuals who put up
personal web pages, software developers and
providers of raw financial information,
and news wire services do not have to register
with the Singapore Broadcasting Authority.

OTHER BARRIERS

Competition

The FTA contains specific conduct guarantees
to ensure that commercial enterprises in which
the Singapore government has effective
influence will operate on the basis of
commercial considerations and will not
discriminate in their treatment of
U.S. firms. In accordance with its FTA
commitments, Singapore enacted the
Competition Act in 2004, which is being
implemented in three phases. Phase I
established the Competition Commission
of Singapore in January 2005. Phase II
involves implementation of provisions on
anti-competitive agreements, decisions and
practices, abuse of dominance, enforcement,
and the appeals process; these came into
effect in 2006. Phase III provisions,
which address mergers and acquisitions,
are expected to come into effect in July 2007.

The FTA includes obligations for greater
transparency among government enterprises
with substantial revenues or assets.
Singapore has an extensive network of GLCs
that are active in many sectors of the
economy. Some sectors, notably
telecommunications, power
generation/distribution, and financial
services, are subject to sector-specific
regulatory bodies and competition
regulations typically less rigorous
than those being implemented under the
Competition Act. Some observers have
raised concerns that GLCs may act in
anticompetitive ways, a charge government

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officials strongly deny.

U.S. industry has expressed concern about
the lack of adequate trade secrets
protections under Singapore law that
would provide specific legal protections
for commercially sensitive proprietary
information.

Transparency

The United States welcomes actions by
Singapore to circulate more draft laws and
regulations for public comment, including
those relating to the implementation of the
FTA, in keeping with the FTA's transparency
obligations.

HERBOLD