VZCZCXYZ0022
RR RUEHWEB

DE RUEHMS #0471/01 1341016
ZNR UUUUU ZZH
R 141016Z MAY 07
FM AMEMBASSY MUSCAT
TO RUEHC/SECSTATE WASHDC 8217
INFO RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS MUSCAT 000471 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR NEA/ARP, EEB/TPP/BTA 
STATE PASS USTR FOR JBUNTIN 
COMMERCE FOR COBERG 
 
E.O. 12958: N/A 
TAGS: ETRD ECON EINV PREL MU
SUBJECT: COMMERCE MINISTER UPBEAT ON FTA AFTER CONSULTANT'S 
VISIT 
 
REF: MUSCAT 455 
 
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SUMMARY 
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¶1. (SBU) Oman's Commerce and Industry Minister and a USTR 
consultant discussed the progress made on outstanding 
U.S.-Oman Free Trade Agreement (FTA) implementation issues 
after a week-long set of meetings with relevant stakeholders. 
 The Minister was very appreciative of the consultant's 
efforts and expressed his determination to complete remaining 
action items by this summer in order to bring the FTA into 
force.  End Summary. 
 
¶2. (U) On May 9, Econoff and USTR consultant Jennifer Hillman 
reviewed the progress of the FTA implementation process with 
Commerce and Industry Minister Maqbool bin Ali Sultan. 
During the week of May 5-9, Econoff and Hillman met with 
officials from the Ministry of Commerce and Industry, 
Ministry of Health, Royal Oman Police - Customs, and the 
Telecommunications Regulatory Authority to discuss issues 
concerning anti-bribery, customs, intellectual property, 
government procurement, telecommunications, Omanization, 
transparency, the environment, and labor. 
 
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Anti-Bribery 
------------ 
 
¶3. (SBU) On anti-bribery, Hillman told Maqbool that she had 
drafted a side letter from him to the U.S. Trade 
Representative providing further information on how Oman's 
laws addresses bribery in the context of matters affecting 
international trade and investment.  According to Hillman, 
this letter, once signed and transmitted by the Minister, 
would close out the matter.  Maqbool agreed to the contents 
of the letter and promised to provide his signature. 
 
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Customs 
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¶4. (SBU) On outstanding customs issues, Hillman explained to 
Maqbool that she had taken the liberty of drafting a letter 
from the Royal Oman Police (ROP) Director General of Customs 
to the Minister of Commerce and Industry detailing how the 
Directorate General would enforce certain provisions of the 
FTA related to: temporary admission of goods, duties on 
temporarily admitted goods that are properly destroyed, goods 
re-imported after repair or alteration, and the expeditious 
release of goods.  Hillman added that the final part of the 
letter regarding express shipments awaited input from the 
Directorate General of Customs. 
 
¶5. (SBU) With regards to Rules of Origin requirements, 
Hillman noted that she had assisted the ROP and the Ministry 
of Commerce and Industry in identifying the appropriate 
agencies for the purpose of completing the documents needed 
to implement Oman's commitments.  She further said that to 
complete the annex of the commitment, the Ministry of 
Commerce and Industry's Directorate of Industry would have to 
finalize plans to formalize a system to monitor the garment 
and textiles industry in Oman, including export certificates 
to be issued by the Ministry of Commerce and Industry and a 
rules of origin certificate to be issued by the Oman Chamber 
of Commerce and Industry.  Given her finding that the 
proposed plan met Oman's commitments under the FTA, she urged 
Maqbool to formalize it as soon as possible. 
 
¶6. (SBU) On the removal of consular fees pursuant to Article 
2.9 of the FTA, Hillman stated that she had informed USTR of 
the Ministry of Commerce and Industry's instruction to the 
Ministry of Foreign Affairs (MFA) to stop their collection of 
such fees.  Hillman advised Maqbool that Oman's ambassador to 
the U.S., Hunaina al-Mughairy, should provide written 
confirmation to USTR that Oman no longer collects fees of 
this nature.  Maqbool instructed his staff to follow-up with 
the MFA to ensure that the Omani Embassy in Washington 
received the necessary instructions to accomplish this. 
 
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Intellectual Property 
--------------------- 
 
¶7. (SBU) Hillman explained to Maqbool that Oman was close to 
complying with the FTA's intellectual property provisions. 
 
She confirmed that USTR had agreed to Oman's submitted text 
on domain names, that Oman had acceded to the relevant 
intellectual property treaties, and that the ISP regulations 
had been completed.  Hillman further noted, however, that 
Oman still needed to submit final comments on its industrial 
property regulations, as well as final drafts of its 
regulations on optical discs and government use of software. 
Hillman relayed to Maqbool that USG experts were reviewing 
Oman's copyright and industrial property laws, and were 
evaluating Oman's response to enforcement measures. 
 
¶8. (SBU) On the issue of transitions, Hillman took note of 
Oman's request for a one-year transition to implement its 
commitments on all IPR issues, but remarked that Oman did not 
require a transition for copyrights and trademarks.  She 
suggested that the two sides hold a teleconference to narrow 
down the issues of real concern.  Hillman took on board 
Oman's reiteration of its concern over its perception that 
the USG is attempting to reopen Article 65, and promised to 
examine all of the underlying documents to provide 
suggestions for a resolution of this issue.  Maqbool found 
Hillman's readout on intellectual property to be "fair," and 
endeavored to get the optical disc regulations to the Embassy 
by May 14. 
 
---------------------- 
Government Procurement 
---------------------- 
 
¶9. (SBU) Hillman thanked Maqbool for the opportunity to 
review the draft Tender Law to ascertain if its provisions 
complied with the FTA.  She reviewed with Maqbool the 
following areas containing possible discrepancies: 
 
--  Article 9.5: The draft establishes a maximum of 30 days 
for the preparation of certain bids under Article 14, which 
is 10 days shorter than the 40 days prescribed by the FTA. 
 
--  Article 9.7.1-2: It is unclear whether the draft 
provisions under Article 46 are compliant with the FTA. 
 
--  Article 9.10: The draft does not appear to establish 
procedures to disqualify suppliers that have engaged in 
fraudulent or other illegal actions relating to procurement. 
 
--  Article 9.11: The draft does not appear to establish 
procedures for the Administrative Judicature Court or any 
other body to serve as the impartial entity to review 
supplier challenges. 
 
Noting that Articles 38 through 45 were missing, Hillman 
requested that Maqbool furnish a copy of the draft Tender Law 
to USTR for a more comprehensive review, to which he agreed. 
 
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Telecommunications 
------------------ 
 
¶10. (SBU) Hillman recommended that Oman move forward quickly 
on enacting its amended Telecommunications Act, while at the 
same time moving forward to either develop licensing criteria 
or decide upon an impending application to indicate the basic 
criteria it intends to apply.  She cautioned Maqbool that 
compliance of the law with the FTA could not be determined 
without the licensing criteria.  In assisting the 
Telecommunications Regulatory Authority (TRA) on developing 
licensing standards, Hillman provided a copy of licensing 
regulations established by Bahrain's counterpart entity.  For 
his part, Maqbool indicated that the telecommunications 
revisions had just been transmitted to the cabinet for 
approval. 
 
¶11. (SBU) On the development of submarine cable regulations, 
Hillman relayed her understanding that the TRA intends to 
implement regulations drawn from the Federal Communications 
Commission (FCC) rules in this area by splitting the FCC 
regulations into "core" matters that would be enacted as law, 
followed by the issuance of ministerial regulations covering 
all remaining non-core matters.  The TRA estimated that the 
applicable law would be enacted in June, with regulations 
following shortly thereafter.  Given the complexity of this 
issue, Hillman recommended that the TRA provide a copy of the 
proposed law and regulations to USTR as soon as possible. 
She also encouraged Oman to look at the submarine cable 
regulations of other countries, in the event they were more 
suitable than those designed for the U.S. market. 
 
¶12. (SBU) Hillman raised the issue of "reasonable rates" with 
Maqbool, noting that the TRA had questions on how the U.S. 
defined what was "reasonable."  Hillman noted that the FCC 
did not have a formal definition of "reasonable" for the 
purposes of the FTA, and that Oman would need to develop a 
standard or methodology for determining what would be 
classified as reasonable. 
 
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Omanization 
----------- 
 
¶13. (SBU) Hillman discussed with Maqbool her understanding of 
how Oman intended to implement its commitment to exempt 
managers, specialty personnel and U.S. financial services 
companies from the 80% Omani national reservation.   She 
explained that the USG is reviewing this information and 
considering the means that Oman intends to use to implement 
this exemption commitment. 
 
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Transparency 
------------ 
 
¶15. (SBU) Hillman commended the Ministry of Commerce and 
Industry's efforts to promote greater transparency with 
regard to public input concerning the development of 
regulations, as evidenced by the February 2006 letter sent by 
Maqbool to fellow colleagues at the Ministries of Health; 
Housing and Water; Agriculture and Fisheries; Regional 
Municipalities, Environment, and Water Resources; Transport 
and Communications; and the Muscat Municipality.  She also 
commended the efforts shown by the Ministry of Commerce and 
Industry's Directorate General for Standards and Measurements 
to post draft regulations on the internet for public comment. 
 
¶16. (SBU) Hillman expressed concern, though, that the 
practice of providing opportunity for public comment on the 
formulation of administrative proceedings appeared to be 
limited.  She stated that follow-up efforts by the Minister 
would be essential to ensure that Oman could meet its 
transparency commitments.  Maqbool replied that Oman "does 
not do (transparency) like the Americans; it's a different 
culture."  He said that while it would take time for the 
ministries to set up a formal comment system along the lines 
of the USG, Oman already employed grass-roots methods to 
solicit comments from the public through quarterly meetings 
with the "walis" (local governors) and monthly gatherings 
with local councils.  "We do it the Omani way," Maqbool 
added. 
 
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Environment and Labor 
--------------------- 
 
¶17. (SBU) Hillman explained to Maqbool that she had drafted a 
note reflective of her understanding of the legal situation 
in Oman on the both the environment and labor, in addition to 
the responses to the majority of questions posed to Oman on 
issues in these fields.  She stated that the USG would review 
her assessments and provide additional comments once 
finished. 
 
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Comment 
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¶18. (SBU) Maqbool was visibly pleased with the outcome of the 
meeting.  He greatly appreciated Hillman's visit to Muscat, 
calling it "one of the best things that has happened during 
the FTA process."  The Minister found Hillman's readout to be 
"thoughtful," and appreciated her "neutrality" in analyzing 
the remaining actions that need to be taken to implement the 
FTA.  With some apparent wind in his sails and the chart 
provided by Hillman, Maqbool is very motivated to quickly 
finish off remaining action items, including the draft 
copyright, industrial property, telecommunications, and 
tender laws, requiring the Council of Ministers' approval. 
(Note: the Council of Ministers most likely will not meet 
during the months of July and August. End note.)  The 
Ambassador will follow-up with the Minister in two weeks to 
review the status of the remaining items.  End comment. 
GRAPPO