GUYANA   -  Trade Information Database


6. Trade Regulations and Standards

Tariff Regimes

Guyana continues to take steps to liberalize trade regimes; however, the
current tariff and tax burden on imports is high. In 1999, in accordance with
the Common External Tariff of the Caribbean Community (CARICOM), the external
tariff was reduced from 25 percent to 20 percent. In addition to the tariff,
most imports are subject to a consumption tax, which is determined on a
product-specific basis.

The tariff system is based on the Customs Cooperation Council Nomenclature
(CCCN) and tariffs are in accordance with the Common External Tariff of
CARICOM. Duties are levied on an ad valorem basis. The consumption tax is
levied on the total CIF (Cost, Insurance, and Freight) cost of the goods plus
the import duty. In other words, the government levies taxes on the money that
the importer pays the government in tariffs. To encourage development, the
government has exempted certain capital goods from consumption taxes. The list
of exceptions is available through local customs brokers or at the U.S.
Embassy's Commercial Information Center. Other investors may apply to have
exemptions granted for capital goods not specifically included on the list but
such exceptions require the Minister of Finance's direct approval. Customs
duties remain a primary source of government revenue.

All shipments are inspected, both imports and exports. Since the Customs
Department (like many government agencies) is extremely understaffed, the
mandatory inspection often results in extended waits on the wharf. There are
special provisions for perishable goods.

Customs procedures present problems relating to inconsistent valuations of
imports by customs officials and delays in customs clearance. Some businesses
have alleged that customs officers may delay processing in hopes of attaining
inducements to expedite clearances. The Embassy is not in a position to
confirm or deny these allegations. Guyana's Customs and Excise Department has
been subsumed into a new Revenue Authority, with technical advice and
assistance from the international donor community. The new agency features a
variety of civil service reforms and procedural changes, to encourage greater
transparency and efficiency in the customs process. This long-awaited
reorganization began in earnest in January 2000. However, the new
organization’s influence in reforming Guyana’s customs systems remains to be

Customs Valuation

Customs valuation is based on invoice purchase price. Importers must provide
Customs with one original and two copies of the commercial invoice and an
original and one copy of the bill of lading. When requested, importers must
also produce one original and three copies of the certificate of origin. A
committee conducts valuations on a somewhat arbitrary basis and many exporters
have complained about the ad hoc manner in which valuations are decided. In
October 2001, the Customs valuation rate was adjusted to G$189.25 per US$1.
Since most customs duties are percentage based, this move immediately increased
duties on most goods, which are normally valued in US dollar terms.

Import Licenses

There is limited use of import licenses for certain categories of goods,
including firearms and pharmaceuticals.

Export Controls

There are restrictions on exporting wildlife, seafood, and gold. Export taxes
range from 0.5 percent of value to 10 percent. All shipments are inspected
prior to export. Often exporters are required to pay agents overtime for
inspections in order to avoid lengthy delays. In some cases, on-site
inspection is available.

Import/Export Documentation

In April 1996, Guyana introduced a computerized customs system, ASYCUDA. Local
customs brokers are available to assist with document preparation. Many are
still unfamiliar with the new system, sometimes making mistakes that cause
lengthy delays.

Prohibited Imports

There are restrictions on importing firearms, pharmaceuticals, chemicals,
wheat, and flour.

Standards, Labeling, and Marking Requirements

Labeling, marking, and other consumer protection requirements are in their
infancy in Guyana. The National Bureau of Standards sets those that do exist.

Free Trade Zones

There are currently no free trade zones in Guyana although many proposals are
under consideration and interest remains high.

Special Import Provisions

Goods are required to be cleared within 10 days. Goods not claimed within 30
days are forwarded to a government warehouse and sold at public auction after
90 days. Goods may be warehoused for three months upon deposit of 100 percent
of the duty applicable to guarantee re-exportation.

Membership in Free Trade Agreements

Guyana is a member of CARICOM. Goods traded with fellow CARICOM countries are
duty free as long as they satisfy origin rules criteria set out in the Treaty
of Chaguaramas. Guyana is a signatory to the Summit of the Americas and is
participating in talks regarding a Free Trade Area of the Americas. Guyana
also enjoys preferential market access to the United States under the Caribbean
Basin Initiative, to Canada under CaribCan, and to the European Union under a
partnership agreement that provides continuation of Lome IV trade provisions
until 2007. Guyana also has several nonreciprocal preferential agreements with
Venezuela and Colombia.

7. Investment Climate

Openness to Foreign Investment

The present administration recognizes the need for foreign investment to create
jobs, enhance technical capabilities and generate goods for export. The shift
from a mostly state-controlled economy to a primarily free market system began
under former President Hoyte (1985-1992). In 1988, the government announced
that it would permit foreign ownership of businesses operating in Guyana.
Several large foreign investments were subsequently made, primarily in the
mining, timber and telecommunication sectors.

After years of a state-dominated economy, however, the mechanisms for private
investment, both domestic and foreign, are still evolving. Much crucial
legislation is outdated and is currently being revised, including laws
pertaining to resource use, mining, and the formation of private companies and
capital markets. This circumstance, combined with a small developing country's
concerns that it may be taken advantage of by sophisticated multinationals, has
produced extreme caution in approving new investment. The current
administration has demonstrated this discomfort through its stated preference
for joint ventures between private investors and the government. While there
is no "screening" of investment, the centralized process of decision-making and
lack of transparency can result in delays and frustration for foreign investors.

Since mid-1993, Guyana has been considering a Bilateral Investment Treaty (BIT)
with the U.S. Despite the delay in agreeing to formal investment rules, in
practice, with very few minor exceptions, foreign and domestic investors are
treated the same. Beginning with the Hoyte government, major foreign investors
in export-oriented sectors were given preferential treatment in the form of tax
holidays, duty-free status and other fiscal incentives. Investors who import
certain capital goods are granted concessions on the local consumption tax.
There are significant incentives available for investors willing to open
businesses in the economically depressed area of Linden and its surrounding
communities — the site of the ailing government-owned Linmine bauxite
operations. Manufacturing and agricultural entities which choose to locate in
Linden will receive consumption tax and duty-free concessions on all plant,
machinery, equipment, and spare parts, and tax concessions for vehicles
imported for business purposes.
In general, foreign investors are treated equitably in Guyana. One exception
is the special approval required for local financing. Any foreign borrower
applying for a loan of over G$2M must be granted permission by the Minister of
Finance. This requirement reflects the government's stated preference for
foreign investors to bring capital into the country. In most cases foreign
investors prefer to seek credit abroad in any case, since interest rates in
Guyana are typically higher.

One negative aspect has been the experience of Guyana Telephone & Telegraph
with rate regulations. The company has had an ongoing series of disputes with
the Public Utilities Commission (PUC). Although the company has had good
success in eventually resolving many of these issues, the continual
confrontations have been quite costly for the company. There is still no final
agreement on rates, while the issues remain tied up in the courts. With
international accounting rates due to drop in 2002, the resolution of telephone
service-related issues is imperative to the future life of the utility.

The government has made good progress in recent years with privatization
initiatives, and other state enterprises are slated to be sold. Foreign
investors have equal access to privatization opportunities and, for some of the
larger operations, foreign investment is openly preferred. Privatization is
generally viewed favorably by those outside of government. Employees of
state-owned firms are anxious that their jobs be protected, although the
empirical evidence in the case of the phone company (privatized since 1992) has
been that of increased employment opportunities.

Visa, residence, and work permit requirements do not pose undue burdens on
foreign investors.

Most large-scale government projects are financed by international lending
institutions, with the IDB as the largest donor. U.S. firms are generally
given equal access to these projects. Unfortunately, the projects are very
often too small in scale to interest U.S. bidders.

By and large, foreign investment is viewed favorably by nongovernmental
groups. Most Guyanese recognize the significant contributions made by foreign
firms to the Guyanese economy in terms of jobs, taxes, and social services.
There is some concern that Guyana is not adequately equipped to monitor the
environmental impact of operations by either domestic or foreign firms in the
mining and timber sectors. Presently, most of these firms are self-monitoring
with little government oversight, although Guyana's fledgling Environmental
Protection Agency is building its capacity toward an appropriate level of
regulation. Some Guyanese have also expressed the view that Guyana's resources
should be reserved for Guyanese.

Right to Private Ownership and Establishment

Foreign and domestic firms have the right to establish and own business
enterprises and engage in all forms of remunerative activity. However, in some
cases, licenses are required. Private entities may freely acquire and dispose
of interests in business enterprises, although some newly privatized entities
have limits on the number of shares that may be acquired by any one individual
or entity (domestic or foreign). Similarly, the articles of association of
some firms prohibit the issuance of more than a certain number of share
transfer forms to any one individual or company in an effort to prevent
attempts to gain control of such companies in the secondary market. In theory,
the government can limit competition with state-owned companies by denying
private firms the required licenses to operate. Investors should be aware that
getting all the licenses required to operate in Guyana can be a time-consuming

The right of foreigners to own property or land in Guyana is specifically
protected under the Constitution.

Protection of Property Rights

Guyana adopted British law on patents and copyrights upon independence. This
outdated legislation is now being revised to conform to global norms. Guyana
joined the World Intellectual Property Organization (WIPO) and acceded to the
Bern and Paris Conventions in late 1994. WIPO officials visited Guyana in
early 1995 and conducted a seminar on intellectual property rights. At
present, there is no enforcement mechanism to protect intellectual property
rights. Patent and trademark infringement is also common. Pirating of TV
satellite signals is widespread and takes place with impunity. Guyana has not
ratified an intellectual property rights agreement with the U.S., and
negotiations are proceeding very slowly.

Performance Requirements/Incentives

While there is no set policy regarding performance requirements, they are, in
some cases, written into contracts with foreign investors. Some contracts
require a certain minimum level of investment, as in the case of the U.S.-owned
telephone company. Investors are not required to source locally. They do not
have to export a certain percentage of output. Foreign exchange is not
rationed in proportion to exports. There are no national ownership or
technology transfer requirements.

Transparency of the Regulatory System

Guyana has no antitrust legislation. Historical factors, Guyana's small
population, and economies of scale have led many sectors to be dominated by one
or two firms. Capital markets are still evolving and the allocation of
investment takes place without any well-organized market. Bureaucratic
procedures are cumbersome. Investors often receiveconflicting messages from
various officials and have difficulty determining where the authority for
decision-making lies. In the current absence of adequate legislation, much
decision-making is centralized and an extraordinary number of issues are
resolved in Cabinet, a process that is not open to public scrutiny and which
often results in long delays. Attempts at reform of bureaucratic procedures
have not succeeded in limiting red tape.


Despite the paucity of documented corruption, allegations of corruption are
common. The government has recently acted to address this problem with
legislation requiring public officials to disclose their assets prior to
assuming office. Current tender procedures for many government contracts do
not offer transparency, resulting in an environment with a high potential for

Offering or receiving a bribe is a criminal offense in Guyana, punishable by
incarceration. The law is not applied extraterritorially. The government has
periodically prosecuted officials for corruption, with mixed success.

The Commercial Section at the U.S. Embassy has received complaints in the past
from business people that government officials have solicited bribes as a
prerequisite for the granting of licenses and permits needed to operate their


Guyana has a plentiful supply of low-skilled labor. However, years of
emigration have produced a severe shortage of skilled workers. Many U.S.
businesses have experienced difficulty in finding and retaining skilled
employees. Union representation and recognition battles are a major cause of
labor strife. In recent years, only a few large companies have successfully
resisted the unionization of its work force. Parliament passed the Trade Union
Recognition Bill in 1997, and as a result all businesses operating in Guyana
must recognize and collectively bargain with the trade union selected by a
majority of its workers. Guyana adheres to the International Labor
Organization (ILO) Convention protecting worker rights.

Efficient Capital Markets and Portfolio Investment

Until 1994, Guyana had only one private bank. Since then, through
privatization of state-owned banks and the issuance of new licenses, Guyana's
roster of private commercial banks has expanded to seven, with both foreign and
domestic ownership. The introduction of private banks has provided much-needed
competition and helped to bring down interest rates which are prohibitively
high for many borrowers.

Notwithstanding this improvement, Guyana's banking system is still far from
fully developed. Inefficiencies and delays periodically plague the foreign
currency exchange market. Businesses report that currency shortages can result
in significant delays in converting Guyana dollars to U.S. dollars at some
banks. Since Guyana has yet to develop an effective inter-bank trading system,
some banks may be short of foreign exchange while others have currency

While foreign investors have some access to local capital markets (in local
currency only), the cost of capital in Guyana is not attractive. The Minister
of Finance must give permission for a foreign investor to borrow over G$2
million in Guyana (approximately US$10,638 at current exchange rates).
Hopefully, the establishment of the new merchant bank should help to improve
the situation by providing additional capital at attractive rates.

The government sells treasury bills at auction to finance the public debt, and
other government-controlled rates move with the treasury bill rate. Private
attempts at bond financing have not proven successful. One large Guyanese
company offered a bond issue in early 1995 in an attempt to raise US$10M. The
issue was not successful and no subsequent large bond offers have been made.

Equity financing is sometimes used by large and well-established companies.
Offering shares is also the government's preferred privatization strategy,
therebybringing more stock onto the market. However, this method of raising
capital is extremely limited due to the absence of an active secondary market.
A call exchange existed at one time, but shares are generally not traded
publicly and prices are not easily identified, limiting the ability to
recognize capital gains. The government has announced plans to set up a
securities exchange in the near future, but concrete plans are not yet
available. While Guyana has no antitrust legislation, the government has
intervened in share markets previously to prevent certain groups from gaining
control of firms. Legislation was passed in 1996 to limit the ability of banks
to expand and develop an oligarchy in the banking system. Privatization deals
sometimes attempt to limit the number of shares purchased both in the initial
offer and in the secondary market.

Regulations regarding mergers and acquisitions do not discriminate against

Conversion and Transfer Policies

The Guyana dollar is fully convertible and there are no limits on inflows or
outflows of funds, although there are spot shortages of foreign currency. The
exchange rate rose from G$181.75 in March 2000 to G$186.25 in March 2001.
There is no bar to the acquisition of foreign currency, although the government
limits the percentage that a number of state-owned firms may keep for their own
purchases. The government recently eased restrictions on the establishment of
foreign currency bank accounts in Guyana, a step which has significantly
simplified the process of moving money. Funds can now be wired in and out of
the country electronically without having to go through cumbersome exchange

In practice, however, many large foreign investors in Guyana export primary
products--timber, gold, or bauxite--the sale of which is handled by
subsidiaries outside of Guyana who retain the hard currency earnings offshore.
Their local entities are then advanced funds to cover operating expenses.

The exchange rate is commercially determined according to market demand.
Political uncertainty and poor economic performance by the Guyanese economy
have put pressure on the currency and eroded consumer and investor confidence.
The government has intervened in support of the Guyana dollar with some success.

Expropriation and Compensation

On August 16, 2001 the National Assembly approved the amendment - Acquisition
of Lands for Public Purposes (Amendment) Bill 2001. This Bill cleared the way
for the government to acquire a private parcel of land at a price the owner
contended was less than fair market value. The opposition political party
accused the government of bias and heavy handedness. The government argued
that the bill is not anti-investment or anti-business. Rather, it is designed
to benefit the vendors, storeowners and the country as a whole. The precedent
set by this legislation, however, is unsettling.

Dispute Settlement

In July 2000, the government of Guyana settled a long-standing dispute with
Green Mining, Inc., a U.S. company that did business with the now-defunct
state-owned bauxite industry Guyana Mining Enterprise Ltd. (Guymine) in the
1980s and 1990s. The government dissolved Guymine in 1992, and assumed
approximately US$30M in debts from Guymine's operations, including US$14M owed
to Green Mining, Inc. The government provided for repayment through 12-year
government bonds issued to Green and Guymine's other creditors. Green had
objected to the bond payment mechanism and filed lawsuits against the
government of Guyana in the Guyanese courts, challenging the constitutionality
of the bonds. It also entered into arbitration before the International
Chamber of Commerce against Guymine, the Bauxite Industry Development Co. Ltd.
(BIDCO), Linden Mining Enterprise Ltd. (Linmine) and Berbice Mining Enterprise
Ltd. (Bermine). In 1996, the ICC arbitrators denied Green's claims against
BIDCO, Linmine, Bermine, and Guymine, but the lawsuits against the government
remained pending. In the resolution reached in July 2000, Green agreed to drop
its lawsuits against the government of Guyana and accepted the bond payment
mechanism, in exchange for the government's payment of accrued interest on the
bonds. This settlement marked the resolution of all matters pending between
Green and the government of Guyana.

In addition, the U.S. firm which owns 80 percent of the local telephone company
is in dispute with the Public Utilities Commission (PUC) over the
interpretation of a number of provisions in its purchase agreement. Areas of
dispute include service and use rates and implementation of a previously agreed
upon expansion plan. The Government of Guyana has also entered into
discussions to break the 25-year monopoly granted to the Guyana Telephone &
Telegraph Company (GT&T) and to open the telecommunications market. However,
if the government starts negotiating a break in the monopoly license, GT&T says
its expansion program might have to be put on hold.

Guyana is a signatory to the Convention on the Settlement of Investment
Disputes between States and Nationals of Other States. International
arbitration decisions are enforceable under Guyana's (then British Guiana)
Arbitration Act of 1931. The country is also a member of the International
Center for the Settlement of Investment Disputes (ICSID).

Political Violence

The political climate in Guyana was once again disrupted by street
demonstrations, violent protests and fires following the March 19, 2001 general
elections. Demonstrations occurred mostly outside of Georgetown, especially in
villages along the East Coast. Several businesses and homes were destroyed by
fire during this period. Some of the violence was specifically directed
against members of the Indo-Guyanese community. Meetings between President
Bharrat Jagdeo and leader of the main opposition party, Desmond Hoyte, eased
the street protests and demonstrations. However, significant differences still
remain unresolved between the two major political parties. During this period,
there were no reported incidents of violence directed towards foreigners or
American-owned businesses.

Bilateral Investment Agreements

There has been discussion regarding a U.S.-Guyana Bilateral Investment Treaty
since 1993. The initial round of negotiations took place in October 1995. At
the end of 2000, there had not been any continuing negotiations. Guyana has
similar treaties with Germany and the United Kingdom, both negotiated during
the Hoyte Administration.

OPIC and Other Investment Insurance Programs

In July 2000, OPIC renewed its support for US investors in Guyana following the
settlement of a long-standing dispute between an OPIC client, Green Mining,
Inc., and Guyana. OPIC support for U.S. investments in Guyana had been
withheld since mid-1992, and its restoration was linked to the settlement that
was reached with Green Mining, Inc. This settlement marked the resolution of
all matters pending between Green Mining and the Government of Guyana. The
EXIM Bank resumed limited coverage in Guyana, offering insurance and short-term
loans for the private sector at the beginning of 1994.

Foreign Direct Investment Statistics

There was a surge in foreign direct investment from 1989 to 1991 fueling
healthy growth figures in the early to mid-1990s. In recent years there have
been a few large scale investments, most notably by Pritipaul Singh Investment
and DIDCO. The former investing in the seafood industry and the latter in the
poultry industry.

Following is a list of major foreign investors in alphabetical order with dates
of agreements with the government in parentheses:

Barama Timber Company (1991) is a South Korean/Malaysian joint venture that is
logging a 4.4 million acre concession in the northwest region and exporting
plywood manufactured at their Georgetown plant. Barama has invested US$88M in
Guyana and has announced plans for a massive new infrastructure investment in
the near future.

Caribbean Resources Limited (1989) is a timber concern owned by the
Trinidad-based Colonial Life Insurance Company (CLICO), which bought the assets
of the state-owned Guyana Timbers. CRL's total investment in Guyana is US$15M.

Cummings Group (1997) now controls the Teperu/Itabu quarry under the name
Mazaruni Granite Company, which was previously Guyana Granite Products Ltd.

Demerara Timbers Limited (1991) is owned by a consortium of European banks
which took over the assets of the original purchaser of the state-owned
Demerara Woods. The firm's total investment in Guyana is US$20M.

Guyana Power & Light (1999) is a 50/50 joint venture agreement between the
government of Guyana and the Commonwealth Development Corporation and
Electricity Supply Board International of Ireland (CDC/ESBI) consortium.
CDC/ESBI has paid US$23.5M for its 50 percent equity in the new company.

The Guyana Telephone and Telegraph Company (GT&T) (1991) is 80 percent owned by
the U.S. firm Atlantic Tele-Network (ATN) with the remaining shares held by the
government. ATN has invested US$118 million in Guyana.

Omai Gold Mines Limited (1991) is 95 percent owned by the Canadian firms
Cambior and Golden Star, with the remaining five percent owned by the
government. Omai's mine is the largest open-pit gold operation in Guyana. The
company has invested US$243 million in Guyana.

UNAMCO/Case Timbers (1997) is a Guyanese/Malaysian plywood venture. It has
been granted timber concessions for 297,000 acres and has invested
approximately US$49 million for its operations.

To the best of our knowledge, the information contained in this report is
accurate as of the date published. However, the Department of Commerce does not
take responsibility for actions readers may take based on the information
contained herein. Readers should always conduct their own due diligence before
entering into business ventures or other commercial arrangements. The
Department of Commerce can assist companies in these endeavors



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