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Cablegate: Singapore - 2008 National Trade Estimate Report

VZCZCXRO9894
RR RUEHCHI RUEHDT RUEHHM RUEHNH
DE RUEHGP #2016/01 3110655
ZNR UUUUU ZZH
R 070655Z NOV 07
FM AMEMBASSY SINGAPORE
TO RUEHC/SECSTATE WASHDC 4363
INFO RUCPDOC/USDOC WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUCNASE/ASEAN MEMBER COLLECTIVE

UNCLAS SECTION 01 OF 08 SINGAPORE 002016

SIPDIS

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

SENSITIVE BUT UNCLASSIFIED

SIPDIS

E.O. 12958: N/A
TAGS: ECON ETRD EINV EFIN KIPR ECPS SN
SUBJECT: SINGAPORE - 2008 NATIONAL TRADE ESTIMATE REPORT

REF: STATE 119765

1. (U) In response to reftel instructions, this message is Post's
draft chapter on Singapore for the 2008 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 to USTR the text of the draft report in MS Word format and
showing changes from last year's version.

2. (SBU) Begin text of the 2008 National Trade Estimate report:

TRADE SUMMARY
-------------

The U.S. goods trade surplus with Singapore was $6.9 billion in
2006, an increase of $1.4 billion from $5.5 billion in 2005. U.S.
goods exports in 2006 were $24.7 billion, up 19.6 percent from the
previous year. Corresponding U.S. imports from Singapore were $17.8
billion, up 17.7 percent. Singapore is currently the 9th largest
export market for U.S. goods.

U.S. exports of private commercial services (i.e., excluding
military and government) to Singapore were $5.8 billion in 2005
(latest data available), and U.S. imports were $3.7 billion. Sales
of services in Singapore by majority U.S.-owned affiliates were $6.2
billion in 2004 (latest data available), while sales of services in
the United States by majority Singapore-owned firms were $1.6
billion.

The stock of U.S. foreign direct investment (FDI) in Singapore in
2005 was $48.1 billion (latest data available), down from $57.1
billion in 2004. U.S. FDI in Singapore is concentrated largely in
the manufacturing, wholesale trade, information, and professional
scientific and technical services 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. It was
the first comprehensive FTA the United States concluded with an
Asian country, eliminating most tariffs immediately upon entry into
force of the FTA and making important advances in many key areas.
Among other benefits, the FTA provides strong discipline in the most
competitive U.S. service sectors, enhances protection for
intellectual property, makes specific commitments regarding the
conduct of Singapore's government-linked enterprises and provides
strong and transparent discipline in government procurement. The
FTA also includes commitments to prevent illegal transshipments of
all traded goods and to prevent circumvention for textiles and
apparel as well as requirements to effectively enforce domestic
labor and environmental laws. Since the FTA was implemented,
exports from the United States have increased 49 percent through
2006, with steady growth in medical devices, machinery and
construction equipment exports, and significant growth in
pharmaceutical exports.

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 quadrilateral 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. Singapore is a member of the Association of
Southeast Asian Nations (ASEAN), which has concluded FTAs with China
and South Korea and is negotiating FTAs with Australia, New Zealand,
India, and Japan.

IMPORT POLICIES
---------------

Tariffs
-------

Singapore imposes no tariffs on industrial 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 distilled spirits
and wine, tobacco products, motor vehicles (all of which are
imported) and gasoline. Singapore does not impose any known
restrictions or duties on imports or exports of textiles and
apparel. Singapore has bound 70.5 percent of its tariff lines in
the World Trade Organization (WTO). Singapore is a signatory to the

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WTO Information Technology Agreement.

Import Licenses
---------------

All imports require a permit, primarily for statistical tracking
purposes. Special import licenses are required for certain goods,
including designated strategic items, hazardous chemicals,
radiation-emitting medical devices, films and videos, arms and
ammunition, agricultural biotechnology 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. Beginning in April
2008, Singapore will require that all manufacturers, importers, and
wholesalers of medical devices be licensed under the Health Products
Act by no later than October 2009. Singapore expanded its
controlled goods list, effective January 1, 2008, to include all
items covered by the Australia Group, the Nuclear Suppliers Group,
the Missile Technology Control Regime, and the Wassenaar
Arrangement. Singapore maintains a tiered motorcycle operator
licensing system based on engine displacement, which, along with a
road tax based on engine size, places U.S. exports of large
motorcycles at a competitive disadvantage. The sale of chewing gum
is restricted in Singapore. However, as a result of the FTA,
Singapore allows the importation of chewing gum with therapeutic
value for sale, subject to certain requirements.

STANDARDS, TESTING, LABELING AND CERTIFICATION
--------------------------------------------- -

Under the 2002 Consumer Protection 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
Singapore government's standards and certification authority (SPRING
Singapore). SPRING Singapore recognizes test reports issued by
accredited testing laboratories and certification bodies, including
those in the United States. Labels conforming to standardized
formats are required on imported foods, drugs, liquors, paints and
solvents.

Agriculture
-----------

Singapore's food import policy is intended 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
product 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.
Singapore's 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 consistent 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 World Organization for Animal Health
(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. Singapore continues to ban imports of bone-in cuts
of beef and beef products from the United States.

Fresh produce imports are tagged to secure their traceability to
farms. Fresh produce is routinely tested to guarantee that it does
not exceed maximum pesticide residue limits.

In September 2006, Singapore removed a requirement for a Certificate
of Age/Origin (COA) for aged distilled spirits despite concerns
raised by the EU, the United States and their distilled spirits
industries. In many countries, the COA is a useful tool for
preventing the importation of counterfeit distilled spirits.

GOVERNMENT PROCUREMENT
----------------------


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Singapore is a signatory to the WTO Agreement on Government
Procurement. The FTA provides increased access for U.S. firms to
Singapore's central government procurement. Some U.S. and local
firms have expressed concerns that government-owned and
government-linked companies (GLCs) may receive preferential
treatment in the government procurement process. Singapore denies
that it gives any preferences to GLCs or that GLCs give preferences
to other GLCs.

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 a 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 Berne Convention, the Patent Cooperation
Treaty, the Madrid Protocol and the Budapest Treaty. The WIPO
Secretariat opened offices in Singapore in June 2005. Amendments to

SIPDIS
the Trademark Act, which took effect in January 2007, fulfill
Singapore's obligations in WIPO's revised Treaty on the Law of
Trademarks.

Transshipment
-------------

To implement 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.
Nonetheless, Singapore, a major transshipment and transit point for
sea and air cargo, 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.

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 fails to impose full liability on service
providers engaged in infringing activity. U.S. industry has raised
concerns that Internet piracy in Singapore is on the rise as a
result of the increasing availability of the country's broadband
facilities. Industry groups also claim that Section 107B of the
Copyright Act violates FTA obligations by permitting entities in
Singapore to "simulcast" performances over the Internet without
paying the proper license fees.

Enforcement
-----------

In line with its FTA obligations, Singapore has taken steps to
improve IPR enforcement and to lower infringement rates, which are
among the lowest in the Asia Pacific region. Singapore claims that
its enforcement efforts have almost eliminated the production of
pirated material and blatant storefront retail piracy. According to
industry estimates, Singapore's piracy rate averaged 5 to 10 percent
for audio and video and 39 percent for business software.

Rights holders have encountered difficulties when attempting to
prosecute IP cases based on tips provided by company insiders.
Singapore currently does not offer specific protection to
"whistleblowers." As a result, many informants refuse to provide
crucial testimony in court.


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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.

SERVICES BARRIERS
-----------------

Basic Telecommunications
------------------------

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, the former monopoly (and 62 percent
government-owned) telecommunications service provider, Singapore
Telecommunications (SingTel), faces competition in all market
segments, including fixed-line, mobile and paging services. Its
main competitors, MobileOne and StarHub, are also GLCs. Singapore
has approximately 60 facilities-based and 110 services-based
operators.

Facilities-based operators continue to be limited in their ability
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, a decision upheld by MICA in May
2006 following an appeal by SingTel. Although SingTel must now
offer wholesale prices for local leased circuits at reduced rates
ranging from 55 percent 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.

The United States remains 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.

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. companies continue
to have problems with access to facilities used to lay lines as
provided for in the FTA. Since January 2007, SingTel has been
exempted from dominant licensee obligations for the residential and
commercial portions of the retail international telephone services
(ITS).

SingTel announced in June 2006 plans to consolidate its local
exchanges but failed to provide details of specific local exchanges
to be closed. This has put U.S. and other carriers' expansion plans
on hold. IDA issued a decision in June 2007 that increases the
notification period SingTel must provide from six to 18 months. IDA
has denied requests by U.S. and other companies for interconnection
at a more centralized location.

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 gives the Media Development Authority
(MDA) the authority to waive this requirement. The Singapore
government also limits individual equity stakes in broadcasting
companies to no more than 5 percent of issued shares.

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 incumbent
subscription TV provider, StarHub Cable Vision (SCV), is a
100-percent owned subsidiary of StarHub Ltd., a publicly listed GLC.

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SingTel entered the subscription TV market in January 2007.
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.
Singapore restricts the use of satellite 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 5 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 Singapore 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 ($125,000). The Singapore government
has also "gazetted" foreign newspapers i.e., numerically limited
their circulation. Singapore's leaders have threatened foreign
publishers with defamation suits for perceived slights, which has
often resulted in the foreign publishers issuing apologies and
paying damages.

Legal Services
--------------

U.S. and other foreign law firms with offices in Singapore face
certain restrictions. 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 with respect 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. Since July 2007, foreign attorneys have been allowed to
own equity in JLVs up to a maximum of 25 percent of total shares.
As of October 2007, 16 of the 73 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.

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
lower-second class honors (under the British system). As of July
2007, the government allows highly skilled foreign lawyers meeting
certain criteria to practice Singapore corporate, finance and
banking law.

Engineering and Architectural Services
--------------------------------------


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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 firm's board of directors 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
----------------------

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.

The government initiated a banking liberalization program in 1999 to
ease restrictions on foreign banks and has supplemented this with
phased-in liberalization under the FTA. These measures include
removal of a 40 percent ceiling on foreign ownership of local banks
and a 20 percent aggregate foreign shareholding limit on finance
companies. Singapore has granted six "qualifying full bank" (QFB)
and 24 full service licenses to foreign banks, including one U.S.
QFB and four U.S. full service banks. Since January 2006, under the
FTA, U.S. licensed full-service banks and QFBs are able to operate
at an unlimited number of locations (branches or off-premises ATMs).
Non-U.S. full-service foreign banks have been allowed to operate
since January 2005 at up to 25 locations. These full-service banks
can 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.

Under the FTA, Singapore lifted its ban on new licenses for
full-service banks in June 2005, and for wholesale banks in January
2007. Locally incorporated subsidiaries of U.S. full-service banks
have been able to apply for access to local ATM networks since June
2006. Non-locally incorporated subsidiaries of U.S. full-service
banks may begin doing so in January 2008.

However, holders of cards issued locally by foreign banks or
financial institutions cannot access their accounts through the
local ATM networks. They are also unable to access their accounts
for cash withdrawals, transfers or bill payments at ATMs operated by
banks other than those within their own bank or at foreign banks'
shared ATM networks.

U.S. industry advocates enhancements to Singapore's credit bureau
system. The Minister of Finance must provide specific types of
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 Singapore government has indicated that it will not
allow a foreign takeover of its three major local financial
institutions. While 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 banks' share of total resident deposits to
remain above 50 percent.

Restricted and Offshore Banking
-------------------------------

The Monetary Authority of Singapore (MAS) has issued 25 new
wholesale bank licenses since 2001 as part of its liberalization

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program. 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$3.3 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. 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.

Energy
------

Singapore implemented the Gas (Amendment) Act in June 2007 to
facilitate competition and move towards a fully liberalized energy
market, in part by opening access to gas pipeline infrastructure.
However, at least one U.S. company has encountered difficulties in
its access bid due to lengthy delays in the review of its
application by the Energy Market Authority. To date, no
non-incumbent operators have been able to secure access to the
Singapore section of the existing Sumatra-Singapore pipeline.

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 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 must channel all
Internet traffic through Internet access service providers that
function as main "gateways" to the Internet. Internet service
resellers, Internet content providers, individuals who put up
personal web pages, software developers, providers of raw financial

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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. Phase I established the Competition
Commission of Singapore in January 2005. Phase II involved the
implementation of provisions on anticompetitive agreements,
decisions and practices, abuse of dominance, enforcement, and the
appeals process, which came into effect in 2006. Phase III
provisions pertaining to mergers and acquisitions came into effect
in July 2007. The government's initial decisions under the
Competition Act have focused primarily on services, including
exemptions for the aviation sector.

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

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

Transparency
------------

In keeping with the FTA's transparency obligations, Singapore has
circulated more draft laws and regulations for public comment,
including those relating to the implementation of the FTA.

HERBOLD

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