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| 2. Introduction to trade and investment regime |
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2.1 Legislation on trade and investment Algeria's laws and regulations governing trade and investment mainly include Customs Law, Foreign Investment Law, Trade Law, Business Law, Trademark Law, Phytosanitary and Sanitary Control Regulations, Labor Law, Tax Law, Public Contract and Public Procurement Law, Currency and Credit Law, Banking and Insurance Law, and Anti-smuggling Law. Every year, the Algerian Ministry of Finance publishes finance acts and supplementary acts thereof to provide supplements or modifications for regulations relating to trade, tax and investment. To meet the needs of Algeria's accession into the WTO, in May 2005, three administrative rules on implementing guidelines for laws of anti-dumping, countervailing and safeguard measures were passed at the Algerian Cabinet meetings. The three rules are aimed to regulate import and export behavior and strengthen protection of domestic products while opening the Algerian market. In July 2005, the Algerian Ministry of Finance published the 2005 Supplementary Finance Act, which stipulates that only legal persons with a minimum registered capital of 20 million dinar (approximately 2.2 million yuan) are allowed to conduct import and distribution. The aim of the act is to punish tax evasion and regulate the domestic import market. In August 2005, at the Algerian Ministers' meetings, the Capital Investment Company Act was passed after examination. The new act aims at improving economic activities and investment modes by encouraging businesses and individuals to invest their idle capital and assist enterprises in their fund-raising for production expansion. 2.2 Trade administration 2.2.1 Tariff system The Algerian Customs apply three levels of basic tariff rates: 5 percent, 15 percent and 30 percent. To protect domestic industry, a droit additional provisoie (DAP) is imposed on imports that can be produced domestically. As of 2001, the Algerian government began to cut the DAP rate by 12 percent annually, and it is due to be phased out by 2006. In 2005, the DAP rate stood at 12 percent. Based on the resolution of the 69th session of the Economic and Social Council of the League of Arab States, Algeria has started on January 1 2005 to open its trade in goods with other Arab countries, remove all duties on goods traded among Arab countries, terminate restrictive regulations on agricultural projects prescribed in previous bilateral agreements signed between member countries, and fully open its trade in agricultural products. Meanwhile, requirements for certificates of origin, and other relevant invoices and documents authenticated by Arab embassies and consulates were abolished. 2.2.2 Import administration Algeria exercises a free trade policy. There is no state monopoly on foreign trade. Import quota licenses have been abolished. Both state-owned enterprises and private enterprises are allowed to conduct import and export. There are essentially no restrictions on imports. Foreign investors are allowed to set up trade companies to conduct import, export and domestic trade. Pork products are prohibited in Algeria for religious reasons and specific testing and labeling are required for imports of other meats. Additionally, there is a mandatory requirement in Algeria that imported products, particularly consumer goods, must be labeled in Arabic. Algeria opened its market to imports of pharmaceutical products in late September 2005. Imports of pharmaceutical products by public health organizations need to follow relevant technical instructions and regulations. Dispensaries of hospitals or medical organizations are responsible for import of pharmaceutical products for their own use. All imported pharmaceutical products must be registered with the relevant medical care administration. 2.2.3 Export administration In Algeria, exports of palm seedlings, sheep and historical and archaeological artifacts are restricted. Exports to Israel are prohibited. In order to boost non-hydrocarbon exports, the Algerian government has formed the Algerian Export Insurance and Guarantee Company and created the Export Promotion Fund. 2.3 Investment administration Algeria encourages foreign investment and grants national treatment to foreign enterprises. The Algerian Foreign Investment Law stipulates that nationals and non-nationals enjoy the same preferential policies when setting up companies in Algeria. Foreign investors can make direct investment by establishing a factory as well as participating in an established company in the public service sector in Algeria. The Foreign Investment Law guarantees that foreign investors can remit their profits out of the country. Additionally, foreign investors of major investment projects can negotiate with the Algerian government for preferential policies or better terms. The Algerian government can grant further preferences to the project based on its specific situation. According to the Law on Examination of Industrial Assembly and Production, approval from the Algerian Ministry of Industry is required for conducting the industrial assembly and assembly production in Algeria. 2.4 Competent authorities 2.4.1 Competent authorities governing trade In Algeria, the main authorities governing trade include Ministry of Trade, Algerian Customs, Algerian National Tax Bureau and Algerian Business Registration Center. The Algerian Board for the Promotion of External Trade (PROMEX), an organization affiliated to the Algerian Ministry of Trade, is responsible for administering the export of non-hydrocarbon products. The National Export Promotion and Consultation Committee, under the supervision of the Algerian Prime Minister, is primarily responsible for formulating export strategy of non-hydrocarbon products, evaluating this strategy, and advising the government on organizations, legislation and regulations relevant to non-hydrocarbon products. 2.4.2 Competent authorities governing investment The main authorities governing investment in Algeria include National Investment Development Agency (ANDI), National Investment Council (CNI) and Ministry for Participation and Investment Promotion (MPPI). ANDI, together with other relevant authorities and organizations, is responsible for promoting, developing and supervising the investment. Under the direct supervision of the Prime Minister, CNI is in charge of putting forward the development strategies of investment and suggestions of priorities, proposing investment incentive measures to meet changing circumstances, as well as establishing financial institutions and developing measures to serve the purpose of attracting and encouraging investment. The main functions of MPPI include coordinating the on-going privatization of state-owned enterprises and its process of sharing, as well as studying and proposing suggestions on policies of investment incentives. |
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