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Prevailing Law

Article 19

  1. The competent authority shall only authorize recourse to compulsory cultivation as a method of precaution against famine or a deficiency of food supplies and always under the condition that the food or produce shall remain the property of the individuals or the community producing it.
  2. Nothing in this Article shall be construed as abrogating the obligation on members of a community, where production is organized on a communal basis by virtue of law or custom and where the produce or any profit accruing from the sale thereof remain the property of the community , to perform the work demanded by the community by virtue of law or custom .

Article 20

Collective punishment laws under which a community may be punished for crimes committed by any of its members shall not contain provisions for forced or compulsory labour by the community as one of the methods of punishment.

Article 22

The annual reports that Members which ratify this Convention agree to make to the International Labour Office, pursuant to the provisions of Article 22 of the Constitution of the International Labour Organization, on the measures they have taken to give effect to the provisions of this Convention, shall contain as full information as possible, in respect of each territory concerned, regarding the extent to which recourse has been had to forced or compulsory labour in that territory , the purposes for which it has been employed, the sickness and death rates, hours of work, methods of payment of wages and rates of wages, and any other relevant information.

Article 23

  1. To give effect to the provisions of this Convention the competent authority shall issue complete and precise regulations governing the use of forced or compulsory labour.
  2. These regulations shall contain, inter alia, rules permitting any person from whom forced or compulsory labour is exacted to forward all complaints relative to the conditions of labour to the authorities and ensuring that such complaints will be examined and taken into consideration.

Article 24

Adequate measures shall in all cases be taken to ensure that the regulations governing the employment of forced or compulsory labour are strictly applied, either by extending the duties of any existing labour inspectorate which has been established for the inspection of voluntary labour to cover the inspection of forced or compulsory labour or in some other appropriate manner. Measures shall also be taken to ensure that the regulations are brought to the knowledge of persons from whom such labour is exacted.

Article 25

The illegal exaction of forced or compulsory labour shall be punishable as a penal offence, and it shall be an obligation on any Member ratifying this Convention to ensure that the penalties imposed by law are really adequate and are strictly enforced.

Article 26

  1. Each Member of the International Labour Organization which ratifies this Convention undertakes to apply it to the territories placed under its sovereignty , jurisdiction, protection, suzerainty , tutelage or authority , so far as it has the right to accept obligations affecting matters of internal jurisdiction; provided that, if such Member may desire to take advantage of the provisions of article 35 of the Constitution of the International Labour Organization, it shall append to its ratification a declaration stating–
  • the territories to which it intends to apply the provisions of this Convention without modification;
  • the territories to which it intends to apply the provisions of this Convention with modifications, together with details of the said modifications;
  • the territories in respect of which it reserves its decision.
  1. The aforesaid declaration shall be deemed to be an integral part of the ratification and shall have the force of ratification. It shall be open to any Member, by a subsequent declaration, to cancel in whole or in part the reservations made, in pursuance of the provisions of subparagraphs (2) and (3) of this Article, in the original declaration.

Article 27

The formal ratifications of this Convention under the conditions set forth in the Constitution of the International Labour Organization shall be communicated to the Director-General of the International Labour Office for registration.

Article 28

  1. This Convention shall be binding only upon those Members whose ratifications have been registered with the International Labour Office.
  2. It shall come into force twelve months after the date on which the ratifications of two Members of the International Labour Organization have been registered with the Director-General.
  3. Thereafter, this Convention shall come into force for any Member twelve months after the date on which the ratification has been registered.

Article 29

As soon as the ratifications of two Members of the International Labour Organization have been registered with the International Labour Office, the Director-General of the International Labour Office shall so notify all the Members of the International Labour Organization. He shall likewise notify them of the registration of ratifications which may be communicated subsequently by other Members of the Organization.

Article 30

  1. A Member which has ratified this Convention may denounce it after the expiration of ten y ears from the date on which the Convention first comes into force, by an act communicated to the Director-General of the International Labour Office for registration. Such denunciation shall not take effect until one y ear after the date on which it is registered with the International Labour Office.
  2. Each Member which has ratified this Convention and which does not, within the y ear following the expiration of the period of ten years mentioned in the preceding paragraph, exercise the right of denunciation provided for in this Article, will be bound for another period of five years and, thereafter, may denounce this Convention at the expiration of each period of five years under the terms provided for in this Article.

Article 31

At such times as it may consider necessary the Governing Body of the International Labour Office shall present to the General Conference a report on the working of this Convention and shall examine the desirability of placing on the agenda of the Conference the question of its revision in whole or in part.

Article 32

 

  1. Should the Conference adopt a new Convention revising this Convention in whole or in part, the ratification by a Member of the new revising Convention shall ipso jure involve denunciation of this Convention without any requirement of delay, notwithstanding the provisions of Article 30 above, if and when the new revising Convention shall have come into force.
  2. As from the date of the coming into force of the new revising Convention, the present Convention shall cease to be open to ratification by the Members.
  3. Nevertheless, this Convention shall remain in force in its actual form and content for those Members which have ratified it but have not ratified the revising convention.

Convention Concerning the Abolition of Forced Labour, Entry into force: 17 Jan 1959

 

           Preamble

The General Conference of the International Labour Organization, having been convened at Geneva by the Governing Body of the International Labour Office, and having met in its Fortieth Session on 5 June 1 957, and having considered the question of forced labour, which is the fourth item on the agenda of the session, and having noted the provisions of the Forced Labour Convention, 1930, and having noted that the Slavery Convention, 1926, provides that all necessary measures shall be taken to prevent compulsory or forced labour from developing into conditions analogous to slavery and that the Supplementary Convention on the Abolition of Slavery, the Slave Trade and Institutions and Practices Similar to Slavery ,1956, provides for the complete abolition of debt bondage and serfdom, and having noted that the Protection of Wages Convention, 1949, provides that wages shall be paid regularly and prohibits methods of payment which deprive the worker of a genuine possibility of terminating his employment, and having decided upon the adoption of further proposals with regard to the abolition of certain forms of forced or compulsory labour constituting violation of the rights of man referred to in the Charter of the United Nations and enunciated by the Universal Declaration of Human Rights, and having determined that these proposals shall take the form of an international Convention, adopts this twenty -fifth day of June of the y ear one thousand nine hundred and fifty -seven the following Convention, which may be cited as the Abolition of Forced Labour Convention, 1 957:

Article 1

Each Member of the International Labour Organization which ratifies this Convention undertakes to suppress and not to make use of any form of forced or compulsory labour-

  • As a means of political coercion or education or as a punishment for holding or expressing political views or views ideologically opposed to the established political, social or economic system;

  • As a method of mobilizing and using labour for purposes of economic development;

  • As a means of labour discipline;

  • As a punishment for having participated in strikes;

  • As a means of racial, social, national or religious discrimination

Article 4

 

  1. This Convention shall be binding only upon those Members of the International Labour Organization whose ratifications have been registered with the Director-General.

  2. It shall come into force twelve months after the date on which the ratifications of two Members have been registered with the Director-General.

  3. Thereafter, this Convention shall come into force for any Member twelve months after the date on which its ratification has been registered.

Article 5

  1. A Member which has ratified this Convention may denounce it after the expiration of ten years from the date on which the Convention first comes into force, by an act communicated to the Director-General of the International Labour Office for registration. Such denunciation shall not take effect until one year after the date on which it is registered.

  2. Each Member which has ratified this Convention and which does not, within the year following the expiration of the period of ten years mentioned in the preceding paragraph, exercise the right of denunciation provided for in this Article, will be bound for another period of ten years and, thereafter, may denounce this Convention at the expiration of each period of ten years under the terms provided for in this Article.

Article 6

  1. The Director-General of the International Labour Office shall notify all Members of the International Labour Organization of the registration of all ratifications and denunciations communicated to him by the Members of the Organization.

  1. When notifying the Members of the Organization of the registration of the second ratification communicated to him, the Director-General shall draw the attention of the members of the Organization to the date upon which the Convention will come into force.

Article 7

The Director-General of the International Labour Office shall communicate to the Secretary -General of the United Nations for registration in accordance with Article 102 of the Charter of the United Nations full particulars of all ratifications and acts of denunciation registered by him in accordance with the provisions of the preceding Articles.

Article 8

At such times as it may consider necessary the Governing Body of the International Labour Office shall present to the General Conference a report on the working of this Convention and shall examine the desirability of placing on the agenda of the Conference the question of its revision in whole or in part.

Article 9

  1. Should the Conference adopt a new Convention revising this Convention in whole or in part, then, unless the new Convention otherwise provides:

    • The ratification by a Member of the new revising Convention shall ipso jure involve the immediate denunciation of this Convention, notwithstanding the provisions of Article 5 above, if and when the new revising Convention shall have come into force;

    • As from the date when the new revising Convention comes into force this Convention shall cease to be open to ratification by the Members.

  2. This Convention shall in any case remain in force in its actual form and content for those Members which have ratified it but have not ratified the revising Convention.

The Foreign Investment and Technology Transfer Act, 2019 (2075) Date of Authentication

March 27, 2019 (2075.12.13)

Act No. 34 of the year 2075 (2018/19)

An Act Made to Amend and Consolidate Laws Relating to Foreign Investment and Technology Transfer

Preamble: Whereas, it is expedient to amend and consolidate the prevailing Nepal laws relating to foreign investment and technology transfer in order to make national economy competitive, strong and employment-oriented through mobilization to the maximum extent of the available means and resources for economic prosperity of the country, and to achieve sustainable economic growth through industrialization while creating investment friendly environment to attract foreign capital, technology and investment in the sectors of import substitution, export promotion, through increase in productivity, and of infrastructure development and production of goods or services;

Now, therefore, be it enacted by the Federal Parliament.

  1. Short Title and Commencement: (1) This Act may be cited as the “Foreign Investment and Technology Transfer Act, 2019 (2075).”

(2) Sections 10 and 11 of this Act shall commence on such a date as appointed by the Government of Nepal by a notification in the Nepal Gazette, and other Sections shall commence forthwith.

  1. Definitions: Unless the subject or the context otherwise requires, in this Act,-

(a)        “Industry” means any industry established in accordance with the prevailing law relating to industrial enterprises.

(b)        “One Stop Service Center” means the One Stop Service Center established in accordance with the prevailing law relating to industrial enterprises.

(c)        “Non-resident Nepali” means a person holding the non-resident Nepali identity card in accordance with the prevailing law relating to non-resident Nepalis.

(d)       “Prescribed” or “as prescribed” means prescribed or as prescribed in the Rules framed under this Act.

(e)        “Securities Board” means the Securities Board of Nepal established in accordance with the prevailing law relating to securities.

(f)        “Technology transfer” means any transfer of technology to be made under an agreement between an industry and a foreign investor on the following matters:

(1)        Patent, design, trademark, goodwill, technological specificity, formula, process,

(2)        User’s license, technological know-how sharing or use of technological knowledge (franchise),

(3)        Provision of foreign technical adviser, management and marketing service or other technological skill or knowledge.

(g)        “Board” means the Industry and Investment Promotion Board referred to in the prevailing law relating to industrial enterprises.

(h)        “Ministry” means the Ministry of Industries, Commerce and Supplies

(i)         “Investment Board” means the Investment Board referred to in the prevailing law relating to the Investment Board.

(j)         “Foreign investment” means the following investment made by a foreign investor in an industry or company:

(1)        Share investment in foreign currency,

(2)        Re-investment in an industry of dividends derived from foreign currency or shares,

(3)        Lease finance made in accordance with Section 6,

(4)        Investment made in venture capital fund in accordance with Section 9,

(5)        Investment made in listed securities through secondary securities market in accordance with Section 10,

(6)        Investment made by purchasing shares or assets of a company incorporated in Nepal,

(7)        Investment received through the banking channel after issuing securities in a foreign capital market by an industry or company incorporated in Nepal in accordance with Section 11,

(8)        Investment made through technology transfer, or

(9)        Investment maintained by establishing and expanding an industry in Nepal.

(k)        “Foreign investor” means any foreign individual, firm, company, Non-resident Nepali or foreign government or international agency or other corporate body of similar nature that makes foreign investment, and also includes, in the case of a foreign investor that is an institutional foreign investor, the ultimate beneficiary of such an institution.

(l)         “Foreign investment approving body” means the body referred to in Section 17.

(m)       “Department” means the Department of Industries.

(n)        “Institutional foreign investor” means a foreign company, corporate body or international institution that makes foreign investment.

Chapter-2 Foreign Investment

 Foreign investment may be made: (1) A foreign investor may make foreign investment in any industry and derive gains from such investment.

(2)        Notwithstanding anything contained in sub-section (1), no industry operated with foreign investment may make foreign investment of profits earned or in any other manner, in any industry referred to in the Schedule.

Provided that technology transfer may, with the approval of the Department, be made in an industry referred to in the Schedule which is established with Nepali investment.

(3)        Notwithstanding anything contained in sub-section (1), approval shall not be given for making foreign investment in any industry of an amount that is less than the amount specified by the Government of Nepal by a notification in the Nepal Gazette.

  1. Foreign investment may be made individually or jointly: A foreign investor may make foreign investment individually or jointly or by establishing an industry jointly with an industry established in Nepal or a Nepali citizen.
  2. Foreign investment may be made by purchasing assets or shares of industry:A foreign investor may make foreign investment by purchasing the assets of or shares not exceeding the prescribed percent of any industry established in Nepal.
  3. Lease investment may be made: A foreign investor may make foreign investment, subject to the prescribed ceiling, in any aircraft, ship, machinery and equipment, construction equipment or similar other equipment.
  4. Investment may be made through technology transfer: (1) A foreign investor may make foreign investment by making technology transfer in any industry established in Nepal.

(2)        The terms of technology transfer to be made pursuant to sub-section (1) shall be as specified in the technology transfer agreement entered into between the concerned industry and the foreign investor.

(3)        The agreement referred to in sub-section (2) may not provide for the repatriation of royalty in excess of the prescribed ceiling.

(4)        The agreement referred to in sub-section (2) has to be got approved by the foreign investment approving body.

(5)        The foreign investment approving body may, in giving approval pursuant to sub-section (4), specify the necessary terms on the basis inter alia of international practices on foreign investment and production and selling capacity of the industry.

  1. Foreign investment may be made by establishing a branch: (1) Any industry incorporated in a foreign country may make foreign investment by establishing or expanding its branch industry in Nepal, subject to the prevailing law.

(2)        Other provisions relating to establishment or expansion of a branch of the industry pursuant to sub-section (1) shall be as prescribed.

  1. Foreign investment may be made by establishing venture capital fund: An institutional foreign investor may, for the purpose of investing equity in any industry, establish a venture capital fund by incorporating a company in accordance with the prevailing law, and by obtaining approval of the Securities Board.

(2)        An approval shall have to be obtained by fulfilling the procedures referred to in Section 15 for the investment in an industry from the fund referred to in sub-section (1).

(3)        Such a company shall provide the statements of the venture capital fund referred to in sub-section (1) to the Department in every six months.

(4)        Other provisions relating to the fund established pursuant to sub-section (1) shall be as prescribed.

  1. Trading in securities may be made: (1) An institutional foreign investor establishing a venture capital fund pursuant to Section 9 shall have to be registered in the Securities Board for trading in securities.

(2)        The foreign investor registered in the Securities Board pursuant to sub-section (1) may, through the secondary securities market, trade in securities of an industry in which foreign investment may be made pursuant to this Act.

(3)        In carrying on trading in securities pursuant to sub-section (2), the minimum number of securities to be purchased, the ceiling of investment, minimum period for which it has to held the securities after the purchase, reserve fund to be held in foreign currency for purchasing securities and other provisions related thereto shall be as prescribed.

  1. Loan may be borrowed or foreign currency acquired by issuing securities: (1) Any public limited company incorporated in Nepal or a corporate body authorised under the prevailing law to issue securities may, with the approval of the Nepal Rastra Bank and the Securities Board, borrow a loan or acquire foreign currency by issuing bonds, debentures or other securities in the capital market of a foreign country.

(2)        A company which is incorporated with foreign investment in Nepal may, subject to the prevailing law relating to securities, borrow a loan by issuing securities within Nepal.

(3)        A loan borrowed or foreign currency acquired by issuing securities pursuant to sub-sections (1) and (2) shall have to be invested in Nepal.

(4)        Other provisions relating to the issuance of securities referred to in this Section shall be in accordance with the prevailing law relating to securities.

  1. Loan may be borrowed from foreign financial institution: Any industry having foreign investment may on the recommendation of the Ministry and with the approval of the Nepal Rastra Bank, in accordance with the prevailing law, borrow a project loan from, or a loan by entering into a project financing agreement with, any foreign financial institution.
  2. Maximum Ceiling threshold of foreign investment not to be prescribed: (1) No maximum ceiling of the amount to be invested and the share of investment by a foreign investor wishing to make investment in Nepal shall be prescribed.

(2)        Notwithstanding anything contained in sub-section (1), in the case of service industry, the maximum ceiling of equity foreign investment and ceiling of investment to be made in securities pursuant to Section 10 may be so prescribed as not to be lesser than the commitment made by Nepal in respect of the concerned sector or sub-sector at the time of obtaining membership of the World Trade Organisation.

  1. Agreement may be made with commercial bank: (1) A foreign investor making investment pursuant to this Act may, for purposes of business related to its investment made in Nepal, execute a tripartite agreement (escrow-agreement) with its partner investor or other foreign investor and any such commercial bank or infrastructure development bank as recognized by the Nepal Rastra Bank.

Explanation: For the purposes of this Section, the term “escrow agreement” means an agreement by which the contracting parties agree to the effect that any amount, documentary evidence shall be handed over to any third party for the security of transaction between them or as a security for any guarantee, and such amount, documentary evidence or guarantee shall be provided to the concerned party after the completion of contractual obligations by the contracting parties.

(2)        A bank executing an escrow agreement pursuant to sub-section (1) shall act as an agent of the parties to the agreement.

(3)        Other provisions relating to an escrow agreement to be made pursuant to sub-section (1) shall be as prescribed.

Chapter-3 Approval and Repatriation of Foreign Investment

  1. Application to be made for approval to make foreign investment: (1) A foreign investor wishing to make foreign investment shall have make an application, setting out the details, accompanied by a time schedule for bringing foreign investment into Nepal and action plan on investment in the industry, to the Foreign Investment Approving Body for approval, to make foreign investment, in such a form and setting out such details as prescribed.

(2)        If, in examining an application received pursuant to sub-section (1), it appears that such documents as prescribed have been completed, the Foreign Investment Approving Body shall give approval for foreign investment in such a form as prescribed within period of seven days of the date of receipt of the application.

(3)        An industry which has obtained approval pursuant to sub-section (2) wishes to make investment from the eared profits in the same industry or in any industry other than that referred to the Schedule, it is not necessary for it to re-obtain approval on foreign investment.

Provided that the natter requiring license or permission under the prevailing law for the purpose of registration of an industry or company or tax or any other business shall be governed accordingly.

(4)        If any industry is established or the structure of ownership of any industry is changed because of foreign investment, in accordance with sub-section (3), such an industry shall give information thereof to the Department and the Nepal Rastra Bank. On receipt of such information, the Department shall maintain records thereof.

(5)        If, in examining the application pursuant to sub-section (2), it appears that approval cannot be given, the Foreign Investment Approving Body shall give information thereof in writing, setting out the ground and reason therefor, to the applicant within a period of seven days.

(6)        If, upon receipt of information in accordance with sub-section (5), the concerned investor is not satisfied with the decision made by the Department, such an investor may make an application to the Ministry for the review of the decision.

(7)        The Ministry shall, upon making necessary examination of the application received pursuant to sub-section (6), make a decision thereon within a period of thirty days.

  1. To give information to the Nepal Rastra Bank: (1) Upon obtaining the approval for foreign investment in accordance with Section 15, the foreign investor shall give information in writing, along with the self-declaration to the effect that the amount of such investment has been earned from any legitimate source, to the Nepal Rastra Bank. After giving such information, the foreign investor may bring the amount of such investment into Nepal.

(2)        A foreign investor shall bring the amount to be invested in convertible foreign currency through the banking system upon completion of such procedures as determined by the Nepal Rastra Bank.

Provided that an Indian investor may also make investment of such amount in Indian currency through the banking channel.

(3)        Notwithstanding anything contained in sub-section (3), lease investment referred to in Section 6 and loan investment made by issuing securities referred to in Section 11 shall be as prescribed.

  1. Foreign Investment Approving Body: (1) The Department shall approve the foreign investment not exceeding six billion Rupees.

(2)        The Investment Board under the Investment Board Act, 2011 (2068) shall  approve the foreign investment exceeding six billion Rupees.

  1. Period within which investment has to be made: (1) A foreign investor shall have to make investment of the amount in relation to which approval has been obtained for foreign investment pursuant to sub-section (2) of Section 15 within such period as prescribed.

(2)        A foreign investor which has already obtained approval for making foreign investment in accordance with the prevailing law, at the time of the commencement of this Act, shall also make investment of the prescribed minimum amount with the period prescribed pursuant to sub-section (1).

(3)        The approval giving body may revoke the investment approval given to an industry that fails to make investment within the period referred to in sub-section (1) or (2) or Section 43, except in case of reasonable grounds.

  1. To give information on sale of or transfer of title to shares: (1) In the case of sale of, or transfer of title to, or otherwise change in the ownership or vested ownership of, the property, assets or shares or any other kind of financial equipment generated in Nepal from foreign investment, whether effected within or outside Nepal, the concerned company shall, not later than thirty days of the effect of transaction, give information thereof, along with the relevant documentary evidence, to the body giving approval for making such investment and have the same recorded as prescribed.

(2)        In the case of change in the ownership of the industry subject to foreign investment in Nepal as a result of the transfer of title to any property, assets, shares or any other financial equipment of any holding company, the concerned branch industry or unit of the industry shall have the liability to give information referred to in sub-section (1).

(3)        In the case of a transaction in accordance with sub-section (1), it shall not be recorded pursuant to sub-section (1) until tax is paid by the concerned industry, upon setting out the amount of transaction, in accordance with the prevailing law.

(4)        Other provisions relating to the sale of and transfer of title to shares shall be as prescribed.

  1. Repatriation of investment and earnings: (1) A foreign investor may, if it so wishes, repatriate its investment from Nepal by selling wholly or partly of the shares or industry having its investment in accordance with the prevailing Nepal law, after paying all such taxes as may be leviable in accordance with the prevailing Nepal law.

(2)        A foreign investor may repatriate the following amount in the same foreign currency in which the investment has been made or other convertible foreign currency with the approval of the Nepal Rastra Bank, after paying the tax related liabilities under the prevailing law:

(a)        Amount received from the sale of shares with foreign investment,

(b)        Amount of profit or dividend received from foreign investment,

(c)        In the case of liquidation or winding up of the industry or company, amount remaining after paying all liabilities following the liquidation or winding up,

(d)       Amount of royalty received under the technology transfer agreement,

Provided, however, that in the case of the royalty or fee for the use of a trademark under the transfer of technology in a liquor industry other that a liquor industry exporting cent percent of liquor, the amount of such royalty shall not exceed five percent of the total selling price, as prescribed, excluding the prevailing tax.

(e)        Amount of lease rent under the lease investment,

(f)        Amount received as damages or compensation, if any, received from the final settlement of a law suit, arbitration or any other legal process in Nepal,

(g)        Amount that can be repatriated in accordance with the prevailing law.

(3)        In repatriating amount in a convertible foreign currency in accordance with sub-section (1) or (2), it shall be repatriated by making conversion at the prevailing exchange rate.

(4)        Where any foreign investor has lent a loan to any industry or company against the pledge or mortgage of a movable or immovable property situated in Nepal and the movable or immovable property pledged or mortgaged required to be auctioned or forfeited because of nonrepayment of the principal or interest of such a loan, the institution lending such a loan may repatriate the principal and interest of the loan by auction of such property as if it were a bank or financial institution of Nepal.

(5)         In the case of termination of a lease agreement because of non-payment in accordance with the lease agreement or breach of its terms, the foreign investor may repatriate its investment and the property invested in the lease.

(6)        A foreign investor who wishes to repatriate the foreign investment or amount earned therefrom in accordance with this Section shall make an application, in the form as prescribed, to the foreign investment approving body for approval to that effect.

Provided, that such an application shall be made to the Single Stop Service Centre, if the Government of Nepal, by a notification in the Nepal Gazette grants to the Single Stop Service Centre, the power to the body to give approval relating to repatriation of foreign investment or amount earned therefrom.

(7)        If, in examining an application received pursuant to sub-section (6), it appears that the foreign investor has fulfilled the terms and liabilities referred to in this Act, prevailing law and the agreement made in relation to foreign investment, the foreign investment approving body shall give approval to repatriate the foreign investment or amount earned therefrom not later than fifteen days of the date of receipt of the application.

(8)        After obtaining the approval pursuant to sub-section (7), the foreign investor may make an application to the Nepal Rastra Bank for the foreign currency exchange facility.

(9)        The Nepal Rastra Bank shall, upon receipt of an application in accordance with sub-section (8), provide the exchange facility to the foreign investor for the repatriation of foreign investment.

(10)      Where the amount of investment is to repatriated by selling wholly or partly any industry with foreign investment or upon revocation of the registration of the industry or company for any reason, repatriation of the remaining amount may be made only after the payment or settlement of all liabilities including the tax payable by such an industry.

(11)      Notwithstanding anything contained elsewhere in this Section, a foreign investor may, in repatriating foreign investment made in any industry in accordance with this Act or profit earned therefrom, repatriate such investment or profit only to the extent of the ratio of the portion of its investment in the concerned company.

(12)      If any foreign investor is not satisfied with a decision made by the body giving such approval in the course of repatriation of the amount of its investment, the investor may make an application to the Ministry. The Ministry shall make a decision on such an application within thirty working days.

Chapter-4 Promotion, Facilitation and Regulation of Foreign Investment

  1. Functions, duties and powers of the Board: In addition to its functions, duties and powers referred to, elsewhere in this Act, other functions, duties and powers of the Board shall be as follows:

(a)        To give suggestions to the Government of Nepal for such policy, institutional and procedural reforms as may be required to be made for the attraction of foreign investment in industrial and infrastructure development,

(b)        To set such strategies and programs as may be required for the enhancement of attraction of foreign investment in Nepal and promotion and protection thereof,

(c)        To give approval for the establishment of industries and infrastructures with foreign investment, and promote foreign investment,

(d)       To facilitate for foreign investment by enhancing, expanding and protecting foreign investment,

(e)        To make coordination at the policy and implementation levels of foreign investment,

(f)        To assist in the implementation of policies and laws relating to foreign investment,

(g)        To make arrangements for the provision of services to foreign investors from the Single Stop Service Centre,

(h)        To obtain information as to whether activities of giving approval for foreign investment and delivery of services have been carried out properly, and give necessary direction to the concerned body,

(i)         To make facilitation, if there arises any problem in respect of the repatriation of foreign investment or amount earned, as referred to in Section 20 or implementation of this Act or the rules framed under this Act,  in that respect,

(j)         To perform, or cause to be performed, such other functions as prescribed.

  1. Functions, duties and powers of the Department: In addition to the functions, duties and powers referred to, elsewhere in this Act, other functions, duties and powers of the Department shall be as follows:

(a)        To create conducive environment for the establishment and operation of industries to be established with foreign investment,

(b)        To facilitate foreign investors to obtain any approval or permission including initial environmental assessment, environmental impact assessment in accordance with the prevailing law,

(c)        To maintain updated records of foreign investments approved or permitted in accordance with this Act or the prevailing law and of the technology transferred in Nepal, update such records and make the same public periodically,

(d)       To give approval for foreign investors, and foreigner experts, technicians or managerial employees who are engaged in the industries with foreign investment pursuant to Section 27 to repatriate investment and remuneration,

(e)        To make and enforce Standard Operating Procedures in order to make foreign investment transparent and to make procedural simplification,

(f)        To make recommendation for visas to the foreign investors and their authorised representatives, and foreign experts, technical or managerial employees engaged in industries with foreign investment in accordance with Section 27 and minor members of their family, and make facilitation for that purpose.

(g)        To make regular supervision and monitoring as to whether any industry with foreign investment has misused any facility granted in accordance with this Act,

(h)        To facilitate industries with foreign investment in establishing industries in an industrial zone or special economic zone,

(i)         To perform, or cause to be performed, such other functions as prescribed.

  1. Services to be provided through the Single Stop Service Centre: (1) The Government of Nepal may make necessary arrangement so that exemptions, facilities, concessions or services to be provided to the foreign investors in accordance with this Act and other prevailing law are provided through the Single Stop Service Centre.

(2)        In managing the services to be provided through the Single Stop Service Centre pursuant to sub-section (1), necessary provision shall be made so that the following services are provided gradually:

(a)        Registration and administration of industries,

(b)        Approval of foreign investment and loan,

(c)        Registration and administration of companies,

(d)       Labour permit,

(e)        Visa facility,

(f)        Testing and control of quality of goods produced by industries,

(g)        Approval of environmental study report,

(h)        Energy and infrastructure development, and necessary coordination for that purpose, as well as focal point among other bodies,

(i)        Exemptions, facilities to which industries are entitled,

(j)         Provision of permanent account number,

(k)        Foreign exchange approval,

(l)         Any service related to such other functions as may be required to be performed for industries in accordance with this Act and the Regulation framed under this Act.

(3)        It may be so prescribed that the Single Stop Service Centre may provide other services referred to in the prevailing law, in addition to the services, facilities to be provided pursuant to this Section.

Chapter-5 Exemptions, Facilities and Concessions to be Provided to Industries with Foreign Investment or Foreign Investors

 Facilities to be obtained by industries: (1) In addition to the exemptions, facilities, concessions or protection referred to in this Act, be provided to any industry with foreign investment, such exemptions, facilities or concessions as may be available under the prevailing Industrial Enterprises Act and other prevailing law shall.

(2)        Notwithstanding anything contained in sub-section (1), such facilities to which a sick industry is entitled in accordance with the prevailing law shall not be available to any industry with foreign investment.

  1. Facility to deal with foreign currency: (1) A foreign investor or industry with foreign investment may open an account in Nepali currency with any commercial bank, infrastructure development bank or financial institution of Nepal and in foreign currency with any bank or financial institution licenced to deal with convertible foreign currency in accordance with the prevailing law and carry on transaction accordingly.

Provided, however, that approval of the Nepal Rastra Bank shall be obtained to carry on transaction by opening an account in convertible foreign currency.

(2)        An industry with foreign investment may, in order to mitigate the foreign currency exchange fluctuation risk, use any approved derivatives equipment through a bank or financial institution.

  1. Facility of foreign currency: (1) An industry with foreign investment may, on recommendation of the foreign investment approving body, and with the approval of the Nepal Rastra Bank, obtain the foreign exchange facility for such amount as may be required for the following purposes:

(a)        To pay such remuneration as may be payable to any foreign expert, technical or managerial employee employed in the industry in accordance with Section 27,

(b)        To pay the principal or interest of any bonds or debentures issued in accordance with sub-section (1) of Section 11,

(c)        To repatriate the foreign investment or income earned in accordance with Section 20.

(2)        After obtaining approval from the Nepal Rastra Bank in accordance with sub-section (1), an industry with foreign investment may pay or use such amount as approved from the foreign currency held in the account of such industry as referred to in Section 25.

(3)        Any foreign expert, technical or managerial employee employed in an industry in accordance with Section 27 may repatriate to his or her country in convertible foreign currency such amount of saving out of the remuneration receivable by him or her, after paying income tax in Nepal in accordance with the prevailing law.

(4)        The exchange or repatriation of convertible foreign currency in accordance with sub-section (2) or (3) shall be made according to the open market exchange rate.

  1. Provision relating to experts, top-level technical and managerial employees: (1) An industry with foreign investment shall fulfill the positions of experts in its top-level management, high-level technical, managerial employees or technical employees from amongst the Nepali citizens.

(2)        Notwithstanding anything contained in sub-section (1), if an industry with foreign investment cannot fulfil the positions of experts in its top-level management, high-level technical, managerial employees or technical employees from amongst the Nepali citizens and it is necessary to transfer technical knowledge or skill through any technical or expert of another country in such an industry, the industry may employee any foreign citizen in accordance with the prevailing law.

(3)        The concerned industry shall provide details relating to the foreign citizens employed in accordance with sub-section (2) to the Department. The Department shall provide the details also to the Ministry of Finance, Ministry of Home Affairs and Ministry of Labour, Employment and Social Security.

(4)        The employees and workers employed in any industry with foreign investment in accordance with sub-section (2) shall comply with the terms and conditions referred to in the prevailing Nepal law.

  1. Provision relating to industrial security: Such industrial security shall be provided to any industry with foreign investment as may be available to any other industry established in Nepal.
  2. Facility of identity card: The Department may provide an identity card in the prescribed form to any foreign investor who makes such foreign investment as prescribed.
  3. Provision relating to visa facility: (1) The non-tourist visa not exceeding six months shall be granted to a foreign citizen who visits Nepal to make a study, research or survey for foreign investment.

(2)        The business visa shall be granted to a foreign investor or one authorized representative of him or her and the family members of such an investor or representative to stay in Nepal until the foreign investment equal to such minimum amount as prescribed is maintained.

Explanation: For the purpose of this Section, the term “family member” means the husband or wife, father, mother and minor son, daughter of the foreign investor or his or her authorized representative.

(3)        Notwithstanding anything contained in sub-section (2), in the case of an investor who makes investment exceeding the prescribed amount, such facility shall be provided only to a maximum of two persons and his or her family member.

(4)        The residential visa shall be provided to a foreign investor who makes foreign investment in an amount exceeding one million US dollars or in convertible foreign currency equivalent thereto  at one time or to the authorised representative of him or her and the family member of such a person until the foreign investment equal to such minimum amount as prescribed is maintained.

(5)        The tourist visa shall be provided to any foreign expert, technical or managerial employee to be employed in an industry in accordance with Section 27.

(6)        The body giving working approval and work permit for the non-tourist visa shall make decision whether or not to give working approval or work permit, after completing the necessary procedures not later than fifteen days.

(7)        Other provisions relating to visa facility shall be as prescribed.

  1. Provisions relating to land:(1) A foreign investor shall have to manage such land as may be required for the industry, by purchasing it on his or her own or through other means in accordance with the prevailing law.

(2)        Notwithstanding anything contained in sub-section (1), if a foreign investor is unable to purchase or manage the necessary land on his or her own for the operation of the industry as prescribed and makes a request, setting out the content, for the purchase or acquisition of the land, the foreign investment approving body shall make necessary recommendation, coordination and facilitation for that purpose.

(3)        If such land as in excess of the ceiling is required for an industry which is operated or to be operated with foreign investment, for the establishment and operation of the industry, the body registering the industry shall make necessary recommendation, coordination and facilitation in accordance with the prevailing law. The land that is not subject to such ceiling shall be used only for the same purpose for which it has been purchased.

(4)        Other provisions relating to the provision of land in lease to an industry with foreign investment and to the ceiling of land shall be in accordance with the Industrial Enterprises Act and the prevailing law.

(5)        Other provisions relating to the land to be provided to any industry to be operated with foreign investment shall be as prescribed.

  1. National treatment to be accorded: (1) In respect of the terms applicable to the management, maintenance, use, transfer and sale of any foreign investment made in Nepal by a foreigner, subject to this Act and other prevailing law, after the commencement of this Act, such foreign investment shall, after the investment is brought into, and until it remains in Nepal, be accorded national treatment no less favourable than that accorded to any investment made by a Nepali person, in respect of the terms applicable to the management, maintenance, use, transfer and sale of such investment.

(2)        Notwithstanding anything contained in sub-section (1), in the case of a foreign investment approved prior to the commencement of this Act, the provisions contained in the prevailing law relating to foreign investment in force at the time of making such an investment shall apply, and no change shall, without his or her consent, be made that may prejudice to any facility obtained by any foreign investor in accordance with that law.

(3)        The following protection shall be accorded to any industry with foreign investment in accordance with sub-section (1):

(a)        The industry, enterprise with foreign investment shall be accorded the same treatment as accorded to any industry of the same nature with investment made by a Nepali citizen.

(b)        The industry, enterprise with foreign investment shall be free to determine the price of goods and services, subject to the prevailing law.

(c)        No industry, enterprise with foreign investment shall be prevented from doing trade, as prescribed, being limited to that industry.

(d)       No industry, enterprise with foreign investment shall be restricted to repatriate profit, investment, pay interest of, and repay the principal of, a loan.

(4)        Notwithstanding anything contained in sub-section (1), national treatment shall not apply in respect of the following matters:

(a)        Matters relating to the creation of such intellectual property rights, limits thereof, transfer of title thereto or provisions requiring compulsory licensing for the use thereof as specified in any agreement made under the World Trade Organisation,

(b)        Matters relating to the exemption or facility, if any, granted to any domestic industry or goods in accordance with the prevailing Nepal law relating to public procurement,

(c)        Matter relating to any grant or concession to be made or provided by the Government of Nepal,

(d)       Matter of non-commercial services to be provided by the Government of Nepal,

(e)        Such measures relating to financial services as may be adopted or managed by the Government of Nepal upon considering appropriate on matters such as matters relating to the protection of investors, participants in the securities market, insurance policy holders or insurance policy claimants, or relating to financial institutions having liability to safeguard the financial interests of any persons or relating to maintaining soundness, morality or financial responsibility of financial institutions,

(f)        Matters involving liability or provision to accord special treatment by the Government of Nepal because of being a party to any regional or multilateral economic, monetary organisation or organisation of similar nature to which the Government of Nepal is or will be a party,

(g)        Matters relating to the terms that may be specified by the regulatory body in accordance with the prevailing law in respect of repatriation of investment to a foreign country, repayment of loan (including principal, interest and fees), payment of service fees,

(h)        Matters relating to the protection of human, animal and plant health or the environment.

  1. Nationalisation or expropriation not to be made: (1) No industry with foreign investment in accordance with this Act shall be nationalised.

(2)        No industry shall, except for a public purpose, be expropriated directly or indirectly. If it is required to expropriate it for the public purpose, due process referred to in the prevailing law shall be fulfilled.

  1. Change in terms, services and facilities: Notwithstanding anything contained elsewhere in this Act or the prevailing law, if any provision made in a manner to change the terms of foreign investments and any exemption, facility or concession receivable by foreign investors is to the disadvantage of any foreign investor having obtained approval prior to the making of such provision, such a change shall not apply to such an investor.

Chapter-6 Grievance Handling and Action

  1. Grievance handling: (1) If a foreign investor or industry has any grievance with respect to any act or action performed by any authority that register, regulate or monitor industries in accordance with the prevailing law or by any authority of the Single Stop Service Centre, such an investor or industry may make an application, setting out that content, to the Department for it hearing.

(2)        The Department shall address, as prescribed, the grievance received in accordance with sub-section (1).

(3)        If a foreign investor or industry has any grievance with respect to any act or action performed by the Department or Single Stop Service Centre, such an investor or industry may make an application, setting out the content, to the Ministry for its hearing.

(4)        The Ministry shall address, as prescribed, the grievance received in accordance with sub-section (3).

  1. Prohibition on acts, actions contrary to the terms: If any foreign investor or industry with foreign investment is found to have done any act contrary to this Act or the rules framed under this Act and the terms specified while giving approval for foreign investment, such approval may be revoked or it may be caused to rectify the error, upon fulfilling the procedures as prescribed.
  2. Monitoring and inspection of industries: (1) The officer designated by the Department may, as required, make monitoring and inspection of any industry with foreign investment.

(2)        The officer who makes monitoring and inspection in accordance with sub-section (1) shall, not later than three days after the date of completion of the monitoring and inspection, give a report to the Department, setting out the details inter alia whether or not the foreign investor or industry has done any act contrary to Section 36.

(3)        Other provisions relating to monitoring and inspection of the industry shall be as prescribed.

Chapter 7 Miscellaneous

  1. Bilateral or multilateral investment agreement may be concluded: The Government of Nepal may bring into foreign investment by concluding a multilateral or bilateral investment agreement with any foreign friendly country or international institution for the promotion of foreign investment.
  2. Agreement may be made: (1) In making investment in any industry jointly by a Nepali investor and a foreign investor, a joint agreement concerning foreign investment may be made with respect to that investment, subject to this Act.

(2)        The agreement referred to in sub-section (1) shall provide for, inter alia, the terms of joint, distribution of profits earned from the investment and settlement of disputes relating to investment.

  1. Settlement of disputes: (1) If there arises any dispute between a Nepali investor and a foreign investor in relation to foreign investment, the Department may make it necessary facilitation in order that such a dispute is settled by the concerned parties through mutual discussions or negotiations.

(2)        If the dispute cannot be settled through the process referred to in sub-section (1) within a period of forty-five days after the dispute has arisen, and a joint investment or dispute settlement agreement exists between the parties to the dispute for the resolution of such a dispute, the dispute shall be settled in accordance with such an agreement.

(3)        The parties shall give information about the settlement of the dispute in accordance with sub-section (2) to the Foreign Investment Approving body not later than fifteen days of its settlement.

Provided, that the parties shall not be bound to give information about on what terms and conditions such a settlement has been made.

(4)        If the agreement concluded between the parties in accordance with sub-section (2) has no provision about the settlement of disputes, such a dispute shall be settled by arbitration in accordance with the arbitration law of Nepal.

(5)        Any dispute arising in connection with any foreign investment shall be settled by arbitration in accordance with the prevailing Rules or Procedures of the United Nations Commission on International Trade Law (UNCITRAL), unless otherwise agreed upon by the parties to the dispute.

(6)        Arbitration to be conducted in accordance with this Section shall be held in Nepal, and substantive law of Nepal relating to arbitration shall apply.

Provided, that with respect to the case referred to in sub- section (2), the provision contained in that sub-section shall apply.

(7)        If no agreement was made between the parties on the settlement of dispute prior to the arising of the dispute or if they realise that the agreement, if any made, is inadequate, the concerned parties may make an agreement for the settlement of a dispute even after the dispute has arisen. Information of the agreement so made shall be given to body registering the industry.

(8)        Any dispute with respect to the agreement made in accordance with sub-section (7) may also be settled in accordance with this Section.

  1. Electronic means may be used: The foreign investment approving body may perform functions relating to approval for foreign investment in accordance with this Act and other acts and actions related thereto through recognised electronic means, in accordance with the prevailing law relating to electronic transactions.
  2. Provisions relating to automatic approval process may be made: (1) The Government of Nepal may, by notification in the Nepal gazette, provide services, such as registration of companies, registration of industries, approval of foreign investments in accordance with this Act and the prevailing law, through the automatic route in order to make the process of foreign investment simple, easy.

(2)        Other provisions relating to the automatic route referred to in sub-section (1) and the online system shall be as prescribed.

  1. Validity period of approval of foreign investment: (1) The approval of foreign investment given by the foreign investment approving body shall remain valid for a period until such investment remains in Nepal.

(2)        Notwithstanding anything contained in sub-section (1), such approval shall be deemed to be ipso facto ineffective in the following circumstance:

(a)        In the event of failure, except for any reasonable reason, to commence bringing into Nepal of the amount of such foreign investment within two years after the date of the approval of foreign investment,

(b)        In the event of transfer of cent percent ownership of an industry with foreign investment to a Nepali investor as a result of the sale of shares in the industry registered with the approval of foreign investment,

(c)        In the event of the revocation of its registration as a result of a default on the part of the industry having got approval for foreign investment or the company establishing such an industry.

(3)        Other provisions relating to the validity period of the approval of foreign investment shall be as prescribed.

  1. Terms to be complied with: A foreign investor shall comply with the terms as prescribed, in addition to the terms referred to, in this Act.
  2. Production may be made upon making contract: (1) Any industry with foreign investment may produce any part of its production or such subsidiary goods or services as required for the industry, except its main production, by a contract with another industry.

(2)        Other provisions relating to production upon making contract shall be as prescribed.

  1. Power of attorney may be given: (1) A person who wishes to make foreign investment in accordance with this Act give a power of attorney to another person to perform any, some or all of the acts, actions required to be performed by that person. All acts, actions performed by the authorised person in accordance with the power of attorney shall be deemed to have been performed by the investor himself or herself.

(2)        In order to perform the act in accordance with a power of attorney given in accordance with sub-section (1), such a power of attorney shall be notarized and provided to the foreign investment approving body. The foreign investment approving body may, if it so considers necessary, look at the original of such a power of attorney.

(3)        A person who is authorised in accordance with sub-section (1) may not delegate the authority conferred on him or her to another person.

(4)        The person who gives a power of attorney may, at any time, withdraw the power of attorney given by him or her. The power of attorney shall become invalid from the date on which the person giving such power of attorney registers the information of such withdrawal of the power of attorney with the foreign investment approving body.

(5)        Other provisions relating to the giving of power of attorney shall be as prescribed.

  1. Delegation of powers: The Board or Department may, as required, delegate some powers out of the powers conferred on it in accordance with this Act or the rules framed under this Act to any body or officer of the Government of Nepal.
  2. Foreign investment in any industry registered in Province: (1) If foreign investment or transfer of technology is to be made in any industry registered by the Government of a Province in accordance with the prevailing Federal or Provincial law, approval of the Department shall be obtained in accordance with this Act.

(2)        The certificate of registration of industry with the Province and recommendation of the Provincial ministry looking after the matters of industry, among other things, shall be submitted in order to obtain the approval in accordance with sub-section (1).

(3)        Other provisions relating to foreign investment in an industry registered in a Province shall be as prescribed.

  1. Application of prevailing law: The matters contained herein shall be governed by this Act and the other matters shall be governed by the prevailing law relating to industrial enterprises and other prevailing law.
  2. Power to make alteration in the Schedule: The Government of Nepal may, by notification in the Nepal gazette, make necessary alteration in the Schedule.
  3. Power to make rules: The Government of Nepal may frame necessary rules for the implementation of this Act.
  4. Power to make and enforce Directives, Procedures or Standards: The Government of Nepal may, without prejudice to this Act and the generality to the Regulation framed under this Act, make and enforce necessary Directives, Procedures or Standards.
  5. Repeal and saving: (1) The Foreign Investment and Technology Transfer Act, 1992 (2049) is hereby repealed.

(2)        The acts and actions performed under the Foreign Investment and Technology Transfer Act, 1992(2049) shall be deemed to have been performed under this Act.

Schedule (Relating to sub-section (2) of Section 3)

Industries or Businesses Restricted for Foreign Investment

 

  1. Poultry farming, fisheries, bee-keeping, fruits, vegetables, oil seeds, pulse seeds, milk industry and other sectors of primary agro-production,
  2. Cottage and small industries,
  3. Personal service business (hair cutting, tailoring, driving etc.),
  4. Industries manufacturing arms, ammunition, bullets and shell, gunpowder or explosives, and nuclear, biological and chemical (N.B.C.) weapons; industries producing atomic energy and radio-active materials,
  5. Real estate business (excluding construction industries), retail business, internal courier service, local catering service, moneychanger, remittance service,
  6. Travel agency, guide involved in tourism, trekking and mountaineering guide, rural tourism including homestay,
  7. Business of mass communication media (newspaper, radio, television and online news) and motion picture of national language,
  8. Management, account, engineering, legal consultancy service and language training, music training, computer training, and
  9. Consultancy services having foreign investment of more than fifty-one percent.

UNIVERSAL POSTAL CONVENTION

 The undersigned, plenipotentiaries of the Governments of the member countries of the Union, having regard to article 22.3 of the Constitution of the Universal Postal Union concluded at Vienna on 10 July 1964, have by common consent and subject to article 25.4 of the Constitution drawn up in this Convention the rules applicable throughout the international postal service.

Part I Rules Applicable in Common Throughout the International Postal Service

FSole Chapter

General Provisions

 

Article 1

Definitions

  1. For the purposes of the Universal Postal Convention, the following terms shall have the meanings defined below:

1.1       universal postal service: the permanent provision of quality basic postal services at all points in a member country’s territory, for all customers, at affordable prices;

1.2       closed mail: labelled bag or set of bags or other receptacles sealed with or without lead, containing postal items;

1.3.      transit à découvert: open transit through an intermediate country, of items whose number or weight does not justify the make-up of closed mails for the destination country;

1.4       postal item: generic term referring to anything dispatched by the Post’s services (letter post, parcel post, money orders, etc.);

1.5       terminal dues: remuneration owed to the postal administration of destination by the dispatching postal administration in compensation for the costs incurred in the country of destination for letter-post items received;

1.6.      transit charges: remuneration for services rendered by a carrier in the country crossed (postal administration, other service or combination of the two) in respect of the land, sea and/or air transit of mails;

1.7.      inward land rate: remuneration owed to the postal administration of destination by the dispatching postal administration in compensation for the costs incurred in the country of destination for parcels received;

1.8.      transit land rate: remuneration owed for services rendered by a carrier in the country crossed (postal administration, other service or combination of the two) in respect of the land and/or air transit of parcels through its territory;

1.9.      sea rate: remuneration owed for services rendered by a carrier (postal administration, other service or a combination of the two) participating in the sea conveyance of parcels.

                                                                  

Article 2

Designation of the Entity or Entities Responsible for Fulfilling the Obligations

 Arising From Adherence to the Convention

  1. Member countries shall notify the International Bureau, within six months of the end of Congress, of the name and address of the governmental body responsible for overseeing postal affairs. Within six months of the end of Congress, member countries shall also provide the International Bureau with the name and address of the operator or operators officially designated to operate postal services and to fulfil the obligations arising from the Acts of the Union on their territory. Between Congresses, changes in the governmental bodies and the officially designated operators shall be notified to the International Bureau as soon as possible.

 

                                                                  Article 3

                                                     Universal Postal Service

  1. In order to support the concept of the single postal territory of the Union, member countries shall ensure that all users/customers enjoy the right to a universal postal service involving the permanent provision of quality basic postal services at all points in their territory, at affordable prices.
  2. With this aim in view, member countries shall set forth, within the framework of their national postal legislation or by other customary means, the scope of the postal services offered and the requirement for quality and affordable prices, taking into account both the needs of the population and their national conditions.
  3. Member countries shall ensure that the offers of postal services and quality standards will be achieved by the operators responsible for providing the universal postal service.
  4. Member countries shall ensure that the universal postal service is provided on a viable basis, thus guaranteeing its sustainability.

 

                                                                  Article 4

                                                           Freedom of Transit

  1. The principle of the freedom of transit is set forth in article 1 of the Constitution. It shall carry with it the obligation for each postal administration to forward always by the quickest routes and the most secure means which it uses for its own items, closed mails and à découvert letter-post items which are passed to it by another administration. This principle shall also apply to missent items or mails.
  2. Member countries which do not participate in the exchange of letters containing perishable biological substances or radioactive substances shall have the option of not admitting these items in transit à découvert through their territory. The same shall apply to letter-post items other than letters, postcards and literature for the blind. It shall also apply to printed papers, periodicals, magazines, small packets and M bags the content of which does not satisfy the legal requirements governing the conditions of their publication or circulation in the country crossed.
  3. Freedom of transit for postal parcels to be forwarded by land and sea routes shall be limited to the territory of the countries taking part in this service.
  4. Freedom of transit for air parcels shall be guaranteed throughout the territory of the Union. However, member countries which do not operate the postal parcels service shall not be required to forward air parcels by surface.
  5. If a member country fails to observe the provisions regarding freedom of transit, other member countries may discontinue their postal service with that country.

 

Article 5

Ownership of Postal Items. Withdrawal From the Post. Alteration or Correction of Address. Redirection. Return to Sender of Undeliverable Items

  1. A postal item shall remain the property of the sender until it is delivered to the rightful owner, except when the item has been seized in pursuance of the legislation of the country of origin or destination and, in case of application of article 15.2.1.1 or 15.3, in accordance with the legislation of the country of transit.
  2. The sender of a postal item may have it withdrawn from the post or have its address altered or corrected. The charges and other conditions are laid down in the Regulations.
  3. Member countries shall provide for the redirection of postal items, if an addressee has changed his address, and for the return to sender of undeliverable items. The charges and other conditions are laid down in the Regulations.

 

Article 6

Charges

  1. The charges for the various international postal and special services shall be set by the postal administrations in accordance with the principles set out in the Convention and the Regulations. They shall in principle be related to the costs of providing these services.
  2. The administration of origin shall fix the postage charges for the conveyance of letter- and parcel-post items. The postage charges shall cover delivery of the items to the place of address provided that this delivery service is operated in the country of destination for the items in question.
  3. The charges collected, including those laid down for guideline purposes in the Acts, shall be at least equal to those collected on internal service items presenting the same characteristics (category, quantity, handling time, etc.).
  4. Postal administrations shall be authorized to exceed any guideline charges appearing in the Acts.
  5. Above the minimum level of charges laid down in 3, postal administrations may allow reduced charges based on their internal legislation for letter-post items and parcels posted in their country. They may, for instance, give preferential rates to major users of the Post.
  6. No postal charge of any kind may be collected from customers other than those provided for in the Acts.
  7. Except where otherwise provided in the Acts, each postal administration shall retain the charges which it has collected.

 

Article 7

Exemption From Postal Charges

  1. Principle

1.1       Cases of exemption from postal charges, as meaning exemption from postal prepayment, shall be expressly laid down by the Convention. Nonetheless, the Regulations may provide for both exemptions from postal prepayment and exemption from payment of transit charges, terminal dues and inward rates for letter-post items and postal parcels relating to the postal service sent by postal administrations and Restricted Unions. Furthermore, letter-post items and postal parcels sent by the UPU International Bureau to Restricted Unions and postal administrations shall be considered to be items relating to the postal service and shall be exempted from all postal charges. However, the administration of origin shall have the option of collecting air surcharges on the latter items.

  1. Prisoners of war and civilian internees

2.1       Letter-post items, postal parcels and postal financial services items addressed to or sent by prisoners of war, either direct or through the offices mentioned in the Regulations of the Convention and of the Postal Payment Services Agreement, shall be exempt from all postal charges, with the exception of air surcharges. Belligerents apprehended and interned in a neutral country shall be classed with prisoners of war proper so far as the application of the foregoing provisions is concerned.

2.2       The provisions set out under 2.1 shall also apply to letter-post items, postal parcels and postal financial services items originating in other countries and addressed to or sent by civilian internees as defined by the Geneva Convention of 12 August 1949 relative to the protection of civilian persons in time of war, either direct or through the offices mentioned in the Regulations of the Convention and of the Postal Payment Services Agreement.

2.3       The offices mentioned in the Regulations of the Convention and of the Postal Payment Services Agreement shall also enjoy exemption from postal charges in respect of letter-post items, postal parcels and postal financial services items which concern the persons referred to under 2.1 and 2.2, which they send or receive, either direct or as intermediaries.

2.4.      Parcels shall be admitted free of postage up to a weight of 5 kilogrammes. The weight limit shall be increased to 10 kilogrammes in the case of parcels, the contents of which cannot be split up and of parcels addressed to a camp or the prisoners’ representatives there (“hommes de confiance”) for distribution to the prisoners.

2.5       In the accounting between postal administrations, rates shall not be allocated for service parcels and for prisoner-of-war and civilian internee parcels, apart from the air conveyance dues applicable to air parcels.

  1. Literature for the blind

3.1       Literature for the blind shall be exempt from all postal charges, with the exception of air surcharges.

 

Article 8

Postage Stamps

  1. The term “postage stamp” shall be protected under the present Convention and shall be reserved exclusively for stamps which comply with the conditions of this article and of the Regulations.
  2. Postage stamps:

2.1       shall be issued solely by a competent issuing authority, in conformity with the Acts of the UPU. The issue of stamps shall also include putting them into circulation;

2.2       shall be a manifestation of sovereignty and shall constitute;

2.2.1    proof of prepayment of the postage corresponding to their intrinsic value when affixed to postal items, in conformity with the Acts of the Union;

2.2.2    a source of supplementary revenue for postal administrations, as philatelic items;

2.3       must be in circulation, for postal prepayment or for philatelic purposes, in the territory of origin of the issuing postal administration.

  1. As a manifestation of sovereignty, postage stamps shall comprise:

3.1       the name of the member country or territory to which the issuing postal administration is subject, in roman letters;

3.1.1    optionally, the official emblem of the member country to which the issuing postal administration is subject;

3.1.2    in principle, their face value in roman letters or arabic numerals;

3.1.3    optionally, the word “Postes” (Postage) in roman or other letters.

  1. Emblems of State, official control marks and logos of intergovernmental organizations featuring on postage stamps shall be protected within the meaning of the Paris Convention for the Protection of Industrial Property.
  2. The subjects and designs of postage stamps shall:

5.1       be in keeping with the spirit of the Preamble to the UPU Constitution and with decisions taken by the Union’s bodies;

5.2       be closely linked to the cultural identity of the country to which the issuing postal administration is subject, or contribute to the dissemination of culture or to maintaining peace;

5.3       have, when commemorating leading figures or events not native to the country or territory to which the issuing postal administration is subject, a close bearing on the country or territory in question;

5.4       be devoid of political character or of any topic of an offensive nature in respect of a person or a country;

5.5       be of major significance to the country to which the issuing postal a           dministration is subject or to that postal administration.

  1. Postage stamps may contain as the subject of intellectual property rights:

6.1       an indication of the issuing postal administration’s entitlement to use the intellectual property rights concerned, such as:

6.1.1    copyright, by affixing the copyright sign ©, indicating ownership of the copyright and mentioning the year of issue;

6.1.2    a mark registered in the territory of the member country to which the issuing postal administration is subject, by affixing the registered trademark symbol ® after the mark;

6.2       the name of the artist;

6.3       the name of the printer.

  1. Postal prepayment impressions, franking machine impressions and impressions made by a printing press or another printing or stamping process in accordance with the UPU Acts may be used only with the authorization of the postal administration.

 

Article 9

Postal Security

  1. Member countries shall adopt and implement a proactive security strategy at all levels of postal operations to maintain and enhance the confidence of the general public in the postal services, in the interests of all officials involved. This strategy shall include the exchange of information on maintaining the safe and secure transport and transit of mails between member countries.

 

 

 

Article 10

Environment

Member countries shall adopt and implement a proactive environment strategy at all levels of postal operations and promote environmental awareness in the postal services.

 

Article 11

Violations

  1. Postal items

1.1       Member countries shall undertake to adopt the necessary measures to prevent, prosecute and punish any person found guilty of the following:

1.1.1    the insertion in postal items of narcotics and psychotropic substances, as well as explosive, flammable or other dangerous substances, where their insertion has not been expressly authorized by the Convention;

1.1.2    the insertion in postal items of objects of a pedophilic nature or of a pornographic nature using children.

  1. Means of postal prepayment and postal payment itself

2.1       Member countries shall undertake to adopt the necessary measures to prevent, prosecute and punish any violations concerning the means of postal prepayment set out in this Convention, such as:

2.1.1    postage stamps, in circulation or withdrawn from circulation;

2.1.2    prepayment impressions;

2.1.3    impressions of franking machines or printing presses;

2.1.4    international reply coupons.

2.2       In this Convention, violations concerning means of postal prepayment refer to any of the acts outlined below committed with the intention of obtaining illegitimate gain for oneself or for a third party. The following acts shall be punished:

2.2.1    any act of falsifying, imitating or counterfeiting any means of postal prepayment, or any illegal or unlawful act linked to the unauthorized manufacturing of such items;

2.2.2    any act of using, circulating, marketing, distributing, disseminating, transporting, exhibiting, showing, or publicizing any means of postal prepayment which has been falsified, imitated or counterfeited;

2.2.3    any act of using or circulating, for postal purposes, any means of postal prepayment which has already been used;

2.2.4    any attempt to commit any of these violations.

  1. Reciprocity

3.1       As regards sanctions, no distinction shall be made between the acts outlined in 2, irrespective of whether national or foreign means of postal prepayment are involved; this provision shall not be subject to any legal or conventional condition of reciprocity.

Part II Rules Applicable to Letter Post and Postal Parcels

Chapter 1

Provision of Services

Article 12

Basic Services

  1. Member countries shall ensure the acceptance, handling, conveyance and delivery of letter-post items.
  2. Letter-post items are:

2.1       priority items and non-priority items, up to 2 kilogrammes;

2.2       letters, postcards, printed papers and small packets, up to 2 kilogrammes;

2.3       literature for the blind, up to 7 kilogrammes;

2.4       special bags containing newspapers, periodicals, books and similar printed documentation for the same addressee at the same address called “M bags”, up to 30 kilogrammes.

  1. Letter-post items shall be classified on the basis either of the speed of treatment of the items or of the contents of the items in accordance with the Letter Post Regulations.
  2. Higher weight limits than those indicated in paragraph 2 apply optionally for certain letter-post item categories under the conditions specified in the Letter Post Regulations.
  3. Member countries shall also ensure the acceptance, handling, conveyance and delivery of postal parcels up to 20 kilogrammes, either as laid down in the Convention, or, in the case of outward parcels and after bilateral agreement, by any other means which is more advantageous to their customers.
  4. Weight limits higher than 20 kilogrammes apply optionally for certain parcel-post categories under the conditions specified in the Parcel Post Regulations.
  5. Any country whose postal administration does not undertake the conveyance of parcels may arrange for the provisions of the Convention to be implemented by transport companies. It may, at the same time, limit this service to parcels originating in or addressed to places served by these companies.
  6. Notwithstanding paragraph 5, countries which, prior to 1 January 2001 were not parties to the Postal Parcels Agreement shall not be obliged to provide the postal parcels service.

 

Article 13

Supplementary Services

  1. Member countries shall provide the following mandatory supplementary services:

1.1       registration service for outbound priority and airmail letter-post items;

1.2       registration service for outbound non-priority and surface letter-post items to destinations for which there is no priority or airmail service;

1.3       registration service for all inbound letter-post items.

  1. The provision of a registration service for outbound non-priority and surface letter-post items to destinations for which there is a priority or airmail service shall be optional.
  2. Member countries may provide the following optional supplementary services in relations between those administrations which agreed to provide the service:

3.1       insurance for letter-post items and parcels;

3.2       recorded delivery for letter-post items;

3.3       cash-on-delivery service for letter-post items and parcels;

3.4       express delivery service for letter-post items and parcels;

3.5       delivery to the addressee in person of registered, recorded delivery or insured letter-post items;

3.6       free of charges and fees service for letter-post items and parcels;

3.7       fragile and cumbersome parcels services;

3.8       consignment service for collective items from one consignor sent abroad.

  1. The following three supplementary services have both mandatory and optional parts:

4.1       international business reply service (IBRS), which is basically optional. All administrations shall, however, be obliged to operate the IBRS “return” service;

4.2       international reply coupons, which shall be exchangeable in any member country. The sale of international reply coupons is, however, optional;

4.3       advice of delivery for registered and recorded delivery letter-post items, parcels and insured items. All postal administrations shall admit incoming advices of delivery. The provision of an outward advice of delivery service is, however, optional.

  1. The description of these services and their charges are set out in the Regulations.
  2. Where the service features below are subject to special charges in the domestic service, postal administrations shall be authorized to collect the same charges for international items, under the conditions described in the Regulations:

6.1       delivery for small packets weighing over 500 grammes;

6.2       letter-post items posted after the latest time of posting;

6.3       items posted outside normal counter opening hours;

6.4       collection at sender’s address;

6.5       withdrawal of a letter-post item outside normal counter opening hours;

6.6       poste restante;

6.7       storage for letter-post items weighing over 500 grammes, and for parcels;

6.8       delivery of parcels, in response to the advice of arrival;

6.9       cover against risks of force majeure.

 

Article 14

Electronic Mail, EMS, Integrated Logistics and New Services

  1. Postal administrations may agree with each other to participate in the following services, which are described in the Regulations.

1.1       electronic mail, which is a postal service involving the electronic transmission of messages;

1.2       EMS, which is a postal express service for documents and merchandise, and shall wherever possible be the quickest postal service by physical means. Postal administrations may provide this service on the basis of the EMS Standard Multilateral Agreement or by bilateral agreement;

1.3       integrated logistics, which is a service that responds fully to customers’ logistical requirements and includes the phases before and after the physical transmission of goods and documents;

1.4       the Electronic Post Mark, which provides evidentiary proof of an electronic event, in a given form, at a given time, and involving one or more parties.

  1. Postal administrations may by mutual consent create a new service not expressly provided for in the Acts of the Union. Charges for a new service shall be laid down by each administration concerned, having regard to the expenses of operating the service.

 

Article 15

Items not Admitted. Prohibitions

  1. General

1.1       Items not fulfilling the conditions laid down in the Convention and the Regulations shall not be admitted. Items sent in furtherance of a fraudulent act or with the intention of avoiding full payment of the appropriate charges shall not be admitted.

1.2       Exceptions to the prohibitions contained in this article are set out in the Regulations.

1.3       All postal administrations shall have the option of extending the prohibitions contained in this article, which may be applied immediately upon their inclusion in the relevant compendium.

  1. Prohibitions in all categories of items

The insertion of the articles referred to below shall be prohibited in all categories of items:

2.1.1    narcotics and psychotropic substances;

2.1.2    obscene or immoral articles;

2.1.3    articles the importation or circulation of which is prohibited in the country of destination;

2.1.4    articles which, by their nature or their packing, may expose officials or the general public to danger, or soil or damage other items, postal equipment or third-party property;

2.1.5    documents having the character of current and personal correspondence exchanged between persons other than the sender and the addressee or persons living with them.

  1. Explosive, flammable or radioactive materials and other dangerous substances

3.1       The insertion of explosive, flammable or other dangerous substances as well as radioactive materials shall be prohibited in all categories of items.

3.2       Exceptionally, the following substances and materials shall be admitted:

3.2.1    the radioactive materials sent in letter-post items and postal parcels mentioned in article 16.1;

3.2.2    the biological substances sent in letter-post items mentioned in article 16.2.

  1. Live animals

4.1       Live animals shall be prohibited in all categories of items.

4.2       Exceptionally, the following shall be admitted in letter-post items other than insured items:

4.2.1    bees, leeches and silk-worms;

4.2.2    parasites and destroyers of noxious insects intended for the control of those insects and exchanged between officially recognized institutions;

4.2.3    flies of the family Drosophilidae for biomedical research exchanged between officially recognized institutions.

4.3       Exceptionally, the following shall be admitted in parcels:

4.3.1    live animals whose conveyance by post is authorized by the postal regulations of the countries concerned.

  1. Insertion of correspondence in parcels

5.1       the insertion of the articles mentioned below shall be prohibited in postal parcels:

5.1.1    documents having the character of current and personal correspondence;

5.1.2    correspondence of any kind exchanged between persons other than the sender and the addressee or persons living with them.

  1. Coins, bank notes and other valuable articles

6.1       It shall be prohibited to insert coins, bank notes, currency notes or securities of any kind payable to bearer, travellers’ cheques, platinum, gold or silver, whether manufactured or not, precious stones, jewels or other valuable articles:

6.1.1   in uninsured letter-post items;

6.1.1.1 however, if the internal legislation of the countries of origin and destination permits this, such articles maybe sent in a closed envelope as registered items;

6.1.2    in uninsured parcels, except where permitted by the internal legislation of the countries of origin and destination;

6.1.3    in uninsured parcels exchanged between two countries which admit insured parcels;

6.1.3.1 in addition, any administration may prohibit the enclosure of gold bullion in insured or uninsured parcels originating from or addressed to its territory or sent in transit à découvert across its territory; it may limit the actual value of these items.

  1. Printed papers and literature for the blind

7.1       Printed papers and literature for the blind:

7.1.1    shall nor bear any inscription or contain any item of correspondence;

7.1.2    shall not contain any postage stamp or form of prepayment, whether cancelled or not, or any paper representing a monetary value, except in cases where the item contains as an enclosure a card, envelope or wrapper bearing the printed address of the sender of the item or his agent in the country of posting or destination of the original item, which is prepaid for return.

  1. Treatment of items wrongly admitted

8.1       The treatment of items wrongly admitted is set out in the Regulations. However, items containing articles mentioned in 2.1.1, 2.1.2 and 3.1 shall in no circumstances be forwarded to their destination, delivered to the addressees or returned to origin. In the case of articles mentioned in 2.1.1 and 3.1 discovered while in transit, such items shall be handled in accordance with the national legislation of the country of transit.

 

Article 16

Admissible Radioactive Materials and Biological Materials

  1. Radioactive materials shall be admitted in letter-post items and parcels in relations between postal administrations which have declared their willingness to admit them either reciprocally or in one direction only under the following conditions:

1.1       radioactive materials shall be made up and packed in accordance with the respective provisions of the Regulations;

1.2       when they are sent in letter-post items, they shall be subject to the tariff for priority items or the tariff for letters and registration;

1.3       radioactive materials contained in letter-post items or postal parcels shall be forwarded by the quickest route, normally by air, subject to payment of the corresponding surcharges;

1.4       radioactive materials may be posted only by duly authorized senders.

  1. Biological materials shall be admitted in letter-post items under the following conditions:

2.1       Perishable biological substances, infectious substances and solid carbon dioxide (dry ice) when used as refrigerant for infectious substances may be exchanged through mail only between officially recognized qualified laboratories. These dangerous goods may be acceptable in mail for air carriage, subject to national legislation and current Technical Instructions of the International Civil Aviation Organization (ICAO) and as reflected in the IATA Dangerous Goods Regulations.

2.2       Perishable biological substances and infectious substances made up and packed in accordance with the respective provisions of the Regulations shall be subject to the tariff for priority items or to the tariff for registered letters. An additional charge for the handling of these items is allowed.

2.3       Admission of perishable biological substances and infectious substances shall be restricted to those member countries whose postal administrations have declared their willingness to admit such items, whether reciprocally or in one direction only.

2.4       Such substances or materials shall be forwarded by the quickest route, normally by air, subject to the payment of the corresponding air surcharges and shall be given priority in delivery.

 

Article 17

Inquiries

  1. Each postal administration shall be bound to accept inquiries relating to any item posted in the service of its own administration or any other postal administration provided that the inquiries are presented within a period of six months from the day after that on which the item was posted. The period of six months shall concern relations between claimants and postal administrations and shall not include the transmission of inquiries between postal administrations.

1.1       However, the acceptance of inquiries about the non-receipt of ordinary letter-post items shall not be mandatory. Consequently, postal administrations which accept inquiries about the non-receipt of ordinary letter-post items shall have the option of confining their inquiries to the undeliverable items service.

  1. Inquiries shall be entertained under the conditions laid down in the Regulations.
  2. Inquiries shall be free of charge. However, additional costs caused by a request for transmission by EMS shall, in principle, be borne by the person making the request.

 

Article 18

Customs Control. Customs Duty and Other Fees

  1. The postal administrations of the countries of origin and destination shall be authorized to submit items to customs control, according to the legislation of those countries.
  2. Items submitted to customs control may be subjected to a presentation-to-Customs charge, the guideline amount of which is set in the Regulations. This charge shall only be collected for the submission to Customs and customs clearance of items which have attracted customs charges or any other similar charge.
  3. Postal administrations which are authorized to clear items through the Customs on behalf of customers may charge customers a customs clearance fee based on the actual costs.
  4. Postal administrations shall be authorized to collect from the senders or addressees of items, as the case may be, the customs duty and all other fees which may be due.

 

Article 19

Exchange of Closed Mails with Military Units

  1. Closed letter-post mails may be exchanged through the intermediary of the land, sea or air services of other countries:

1.1       between the post offices of any member country and the commanding officers of military units placed at the disposal of the United Nations;

1.2       between the commanding officers of such military units;

1.3       between the post offices of any member country and the commanding officers of naval, air or army units, warships or military aircraft of the same country stationed abroad;

1.4       between the commanding officers of naval, air or army units, warships or military aircraft of the same country.

  1. Letter-post items enclosed in the mails referred to under 1 shall be confined to items addressed to or sent by members of military units or the officers and crews of the ships or aircraft to or from which the mails are forwarded. The rates and conditions of dispatch applicable to them shall be fixed, according to its regulations, by the postal administration of the country which has made the military unit available or to which the ships or aircraft belong.
  2. In the absence of special agreement, the postal administration of the country which has made the military unit available or to which the warships or military aircraft belong shall be liable to the administrations concerned for the transit charges for the mails, the terminal dues and the air conveyance dues.

 

 

 

Article 20

Quality of Service Standards and Targets

  1. Administrations shall establish and publish delivery standards and targets for their inward letter-post items and parcels.
  2. These standards and targets, increased by the time normally required for customs clearance, shall be no less favorable than those applied to comparable items in their domestic service.
  3. Administrations of origin shall also establish and publish end-to-end standards for priority and airmail letter-post items as well as for parcels and economy/surface parcels.
  4. Postal administrations shall measure the application of quality of service standards.

 

Chapter 2

Liability

Article 21

Liability of Postal Administrations Indemnities

  1. General

1.1       Except for the cases provided for in article 22, postal administrations shall be liable for:

1.1.1    the loss of, theft from or damage to registered items, ordinary parcels and insured items;

1.1.2    the loss of recorded delivery items;

1.1.3    the return of a parcel on which the reason for non-delivery is not given.

1.2       Postal administrations shall not be liable for items other than those mentioned in 1.1.1 and 1.1.2.

1.3       In any other case not provided for in this Convention, postal administrations shall not be liable.

1.4       When the loss of or total damage to registered items, ordinary parcels and insured items is due to a case of force majeure for which indemnity is not payable, the sender shall be entitled to repayment of the charges paid, with the exception of the insurance charge.

1.5       The amounts of indemnity to be paid shall not exceed the amounts mentioned in the Letter Post Regulations and the Parcel Post Regulations.

1.6       In cases of liability, consequential losses or loss of profits shall not be taken into account in the indemnity to be paid.

1.7       All provisions regarding liability of postal administrations shall be strict, binding and complete. Postal administrations shall in no case, even in case of severe fault, be liable above the limits provided for in the Convention and the Regulations.

  1. Registered items

2.1       If a registered item is lost, totally rifled or totally damaged, the sender shall be entitled to an indemnity set in the Letter Post Regulations. If the sender has claimed an amount less than the amount set in the Letter Post Regulations, administrations may pay that lower amount and shall receive reimbursement on this basis from any other administrations involved.

2.2       If a registered item is partially rifled or partially damaged, the sender shall be entitled to an indemnity corresponding, in principle, to the actual value of the theft or damage.

  1. Recorded delivery items

3.1       If a recorded delivery item is lost, totally rifled or totally damaged, the sender shall be entitled to refund of the charges paid only.

  1. Ordinary parcels

4.1       If a parcel is lost, totally rifled or totally damaged, the sender shall be entitled to an indemnity of an amount set in the Parcel Post Regulations. If the sender has claimed an amount less than the amount set in the Parcel Post Regulations, postal administrations may pay that lower amount and shall receive reimbursement on this basis from any other postal administrations involved.

4.2       If a parcel is partially rifled or partially damaged, the sender shall be entitled to an indemnity corresponding, in principle, to the actual value of the theft or damage.

4.3       Postal administrations may agree to apply, in their reciprocal relations, the amount per parcel set in the Parcel Post Regulations, regardless of the weight.

  1. Insured items

5.1       If an insured item is lost, totally rifled or totally damaged, the sender shall be entitled to an indemnity corresponding, in principle, to the insured value in SDRs.

5.2       If an insured item is partially rifled or partially damaged, the sender shall be entitled to an indemnity corresponding, in principle, to the actual value of the theft or damage. It may, however, in no case exceed the amount of the insured value in SDRs.

  1. In the cases mentioned in 4 and 5, the indemnity shall be calculated according to the current price, converted into SDRs, of articles or goods of the same kind at the place and time at which the item was accepted for conveyance. Failing a current price, the indemnity shall be calculated according to the ordinary value of articles or goods whose value is assessed on the same basis.
  2. When an indemnity is due for the loss of, total theft from or total damage to a registered item, ordinary parcel or insured item, the sender, or the addressee, as the case may be, shall also be entitled to repayment of the charges and fees paid with the exception of the registration or insurance charge. The same shall apply to registered items, ordinary parcels or insured items refused by the addressee because of their bad condition if that is attributable to the postal service and involves its liability.
  3. Notwithstanding the provisions set out under 2, 4 and 5, the addressee shall be entitled to the indemnity after delivery of a rifled or damaged registered item, ordinary parcel or insured item.
  4. The postal administration of origin shall have the option of paying senders in its country the indemnities prescribed by its internal legislation for registered items and uninsured parcels, provided that they are not lower than those laid down in 2.1 and 4.1. The same shall apply to the postal administration of destination when the indemnity is paid to the addressee. However, the amounts laid down in 2.1 and 4.1 shall remain applicable:

9.1       in the event of recourse against the administration liable; or

9.2       if the sender waives his rights in favour of the addressee or vice versa.

  1. No reservations concerning payment of the indemnity to postal administrations may be made to this article, except in the event of bilateral agreement.

 

Article 22

Non-Liability of Postal Administrations

  1. Postal administrations shall cease to be liable for registered items, recorded delivery items, parcels and insured items which they have delivered according to the conditions laid down in their regulations for items of the same kind. Liability shall, however, be maintained:

1.1       when theft or damage is discovered either prior to or at the time of delivery of the item;

1.2       when, internal regulations permitting, the addressee, or the sender if it is returned to origin, makes reservations on taking delivery of a rifled or damaged item;

1.3       when, internal regulations permitting, the registered item was delivered to a private mail-box and the addressee declares that he did not receive the item;

1.4       when the addressee or, in the case of return to origin, the sender of a parcel or of an insured item, although having given a proper discharge, notifies the delivery administration without delay that he has found theft or damage. He shall furnish proof that such theft or damage did not occur after delivery. The term “without delay” shall be interpreted according to national law.

  1. Postal administrations shall not be liable:

2.1       in cases of force majeure, subject to article 13.6.9;

2.2       when they cannot account for items owing to the destruction of official records by force majeure, provided that proof of their liability has not been otherwise produced;

2.3       when such loss, theft or damage has been caused by the fault or negligence of the sender or arises from the nature of the contents;

2.4       in the case of items that fall within the prohibitions specified in article 15;

2.5       when the items have been seized under the legislation of the country of destination, as notified by the administration of that country;

2.6       in the case of insured items which have been fraudulently insured for a sum greater than the actual value of the contents;

2.7       when the sender has made no inquiry within six months from the day after that on which the item was posted;

2.8       in the case of prisoner-of-war or civilian internee parcels;

2.9       when the sender’s actions may be suspected of fraudulent intent, aimed at receiving compensation.

  1. Postal administrations shall accept no liability for customs declarations in whatever form these are made or for decisions taken by the Customs on examination of items submitted to customs control.

 

 

Article 23

Sender’s Liability

  1. The sender of an item shall be liable for injuries caused to postal officials and for any damage caused to other postal items and postal equipment, as a result of the dispatch of articles not acceptable for conveyance or the nonobservance of the conditions of acceptance.
  2. In the case of damage to other postal items, the sender shall be liable for each item damaged within the same limits as postal administrations.
  3. The sender shall remain liable even if the office of posting accepts such an item.
  4. However, where the conditions of acceptance have been observed by the sender, the sender shall not be liable, in so far as there has been fault or negligence in handling the item on the part of administrations or carriers, after acceptance.

 

 

Article 24

Payment of Indemnity

  1. Subject to the right of recourse against the administration which is liable, the obligation to pay the indemnity and to refund the charges and fees shall rest either with the administration of origin or with the administration of destination.
  2. The sender may waive his rights to the indemnity in favor of the addressee. Conversely, the addressee may waive his rights in favor of the sender. The sender or the addressee may authorize a third party to receive the indemnity if internal legislation allows this.

 

Article 25

Possible Recovery of the Indemnity from the Sender or the Addressee

  1. If, after payment of the indemnity, a registered item, a parcel or an insured item or part of the contents previously considered as lost is found, the sender or the addressee, as the case may be, shall be advised that the item is being held at his disposal for a period of three months on repayment of the amount of the indemnity paid. At the same time, he shall be asked to whom the item is to be delivered. In the event of refusal or failure to reply within the prescribed period, the same approach shall be made to the addressee or the sender as the case may be, granting that person the same period to reply.
  2. If the sender and the addressee refuse to take delivery of the item or do not reply within the period provided for in paragraph 1, it shall become the property of the administration or, where appropriate, administrations which bore the loss.
  3. In the case of subsequent discovery of an insured item the contents of which are found to be of less value than the amount of the indemnity paid, the sender or the addressee, as the case may be, shall repay the amount of this indemnity against return of the item, without prejudice to the consequences of fraudulent insurance.

 

Article 26

Reciprocity Applicable to Reservations Concerning Liability

  1. Notwithstanding the provisions in articles 22 to 25, any member country which reserves the right not to pay indemnity for liability shall not be entitled to receive indemnity from other member countries which accept liability under these articles.

 

Chapter 3

Provisions Specific to Letter Post

Article 27

Posting Abroad of Letter-Post Items

  1. A member country shall not be bound to forward or deliver to the addressee letter-post items which senders residing in its territory post or cause to be posted in a foreign country with the object of profiting by the more favorable rate conditions there.
  2. The provisions set out under 1 shall be applied without distinction both to letter-post items made up in the sender’s country of residence and then carried across the frontier and to letter-post items made up in a foreign country.
  3. The administration of destination may claim from the sender and, failing this, from the administration of posting, payment of the internal rates. If neither the sender nor the administration of posting agrees to pay these rates within a time limit set by the administration of destination, the latter may either return the items to the administration of posting and shall be entitled to claim reimbursement of the redirection costs, or handle them in accordance with its own legislation.
  4. A member country shall not be bound to forward or deliver to the addresses letter-post items which senders post or cause to be posted in large quantities in a country other than the country where they reside if the amount of terminal dues to be received is lower than the sum that would have been received if the mail had been posted in the country where the senders reside. The administration of destination may claim from the administration of posting payment commensurate with the costs incurred and which may not exceed the higher of the following two amounts: either 80% of the domestic tariff for equivalent items, or 0.14 SDR per item plus 1 SDR per kilogramme. If the administration of posting does not agree to pay the amount claimed within a time limit set by the administration of destination, the administration of destination may either return the items to the administration of posting and shall be entitled to claim reimbursement of the redirection costs, or handle them in accordance with its own legislation.

Part III Remuneration

Chapter 1

Provisions Specific to Letter Post

Article 28

Terminal Dues. General Provisions

  1. Subject to exemptions provided in the Regulations, each administration which receives letter-post items from another administration shall have the right to collect from the dispatching administration a payment for the costs incurred for the international mail received.
  2. For the application of the provisions concerning the payment of terminal dues, postal administrations shall be classified as countries and territories in the target system or countries and territories entitled to be in the transitional system, in accordance with the list drawn up for this purpose by Congress in its resolution C. In the terminal dues provisions, both countries and territories shall be referred to as countries.
  3. The provisions of the present Convention concerning the payment of terminal dues are transitional arrangements, moving towards a country-specific payment system.
  4. Access to the domestic service

4.1       Each administration shall make available to the other administrations all the rates, terms and conditions offered in its domestic service on conditions identical to those proposed to its national customers.

4.2       A dispatching administration may, on similar conditions, request the administration in the target system to offer it the same conditions that the latter offers to its national customers for equivalent items.

4.3       The administrations in the transitional system shall indicate whether they authorize access on the conditions mentioned in 4.1.

4.3.1    When an administration in the transitional system states that it authorizes access on the conditions offered in its domestic system, that authorization shall apply to all Union administrations on a non-discriminatory basis.

4.4       It shall be up to the administration of destination to decide whether the conditions of access to its domestic service have been met by the administration of origin.

  1. The terminal dues rates for bulk mail shall not be higher than the most favorable rates applied by administrations of destination under bilateral or multilateral agreements concerning terminal dues. It shall be up to the administration of destination to decide whether the terms and conditions of access have been met by the administration of origin.
  2. Terminal dues remuneration shall be based on quality of service performance in the country of destination. The Postal Operations Council shall therefore be authorized to supplement the remuneration in articles 29 and 30 to encourage participation in monitoring systems and to reward administrations for reaching their quality targets. The Postal Operations Council may also fix penalties in case of insufficient quality, but shall not deprive the administrations of their minimum remuneration according to articles 29 and 30.
  3. Any administration may waive wholly or in part the payment provided for under 1.
  4. The administrations concerned may, by bilateral or multilateral agreement, apply other payment systems for the settlement of terminal dues accounts.

 

Article 29

Terminal Dues. Provisions Applicable to Exchanges Between Countries in

 the Target System

  1. Payment for letter-post items, including bulk mail but excluding M bags, shall be established on the basis of the application of the rates per item and per kilogramme reflecting the handling costs in the country of destination; these costs must be in relation with the domestic tariffs. The rates shall be calculated in accordance with the conditions specified in the Letter Post Regulations.
  2. The rates per item and per kilogramme shall be calculated on the basis of a percentage of the charge for a 20 gramme priority letter in the domestic service, which shall be:

2.1       for the year 2006: 62%;

2.2       for the year 2007: 64%;

2.3       for the year 2008: 66%;

2.4       for the year 2009: 68%.

  1. The rates applied may not be higher than:

3.1       for the year 2006, 0.226 SDR per item and 1.768 SDR per kilogramme;

3.2       for the year 2007, 0.231 SDR per item and 1.812 SDR per kilogramme;

3.3       for the year 2008, 0.237 SDR per item and 1.858 SDR per kilogramme;

3.4       for the year 2009, 0.243 SDR per item and 1.904 SDR per kilogramme.

  1. For the period from the year 2006 to the year 2009, the rates to be applied may not be lower than 0.147 SDR per item and 1.491 SDR per kilogramme. Provided that the increased rates do not exceed 100% of the charge for a 20 gramme priority letter in the domestic service of the country concerned, the minimum rates shall be increased to:

4.1       for the year 2006, 0.151 SDR per item and 1.536 SDR per kilogramme;

4.2       for the year 2007, 0.154 SDR per item and 1.566 SDR per kilogramme;

4.3       for the year 2008, 0.158 SDR per item and 1.598 SDR per kilogramme;

4.4       for the year 2009, 0.161 SDR per item and 1.630 SDR per kilogramme.

  1. For M bags, the rate to be applied shall be 0.793 SDR per kilogramme.

5.1       M bags weighing less than 5 kilogrammes shall be considered as weighing 5 kilogrammes for terminal dues payment purposes.

  1. For registered items there shall be an additional payment of 0.5 SDR per item and for insured items there shall be an additional payment of 1 SDR per item.
  2. The provisions applicable between countries in the target system shall apply to any country in the transitional system which declares that it wishes to join the target system. The Postal Operations Council may fix transition measures in the Letter Post Regulations.
  3. No reservations may be made to this article, except within the framework of a bilateral agreement.

 

Article 30

Terminal Dues. Provisions Applicable to Mail Flows to, From and Between

Countries in the Transitional System

  1. Payment

1.1       Payment for letter-post items, excluding M bags, shall be 0.147 SDR per item and 1.491 SDR per kilogramme.

1.1.1    For flows below 100 tonnes a year, the two components shall be converted into a total rate of 3.727 SDR per kilogramme on the basis of a worldwide average of 15.21 items per kilogramme.

1.1.2    For flows above 100 tonnes a year, the total rate of 3.727 SDR per kilogramme shall be applied if neither the administration of destination nor the administration of origin asks to have the rate revised on the basis of the real number of items per kilogramme for the flow concerned. Moreover, this rate shall be applied when the real number of items per kilogramme proves to be between 13 and 17.

1.1.3    When one of the administrations concerned asks for the application of the real number of items per kilogramme, the payment to be applied for the flow in question shall be calculated according to the revision mechanism specified in the Letter Post Regulations.

1.1.4    The downward revision of the total rate in 1.1.2 may not be invoked by a country in the target system against a country in the transitional system unless the latter asks for a revision in the opposite direction.

1.2       For M bags, the rate to be applied shall be 0.793 SDR per kilogramme.

1.2.1    M bags weighing less than 5 kilogrammes shall be considered as weighing 5 kilogrammes for terminal dues payment purposes.

1.3       For registered items there shall be an additional payment of 0.5 SDR per item and for insured items there shall be an additional payment of 1 SDR per item.

  1. System harmonization mechanism

2.1       When an administration in the target system receiving a mail flow of over 50 tonnes a year establishes that the annual weight of this flow exceeds the threshold calculated in accordance with the conditions set out in the Letter Post Regulations, it may apply to the excess mail the payment system provided for in article 29 provided that it has not applied the revision mechanism.

2.2       When an administration in the transitional system that receives a mail flow of over 50 tonnes a year from another country in the transitional system establishes that the annual weight of this flow exceeds the threshold calculated in accordance with the conditions set out in the Letter Post Regulations, it may apply to the excess mail the supplement provided for in article 31, provided that it has not applied the revision mechanism.

  1. Bulk mail

3.1       The payment for bulk mail to countries in the target system shall be established by applying the rates per item and per kilogramme provided for in article 29.

3.2       Administrations in the transitional system may request for bulk mail received a payment of 0.147 SDR per item and 1.491 SDR per kilogramme.

  1. No reservations may be made to this article, except within the framework of a bilateral agreement.

 

Article 31

Quality of Service Fund

  1. Terminal dues payable by all countries and territories to the countries defined as Least Developed Countries (LDCs) by ECOSOC, except for M bags and bulk mail items, shall be increased by 16.5% of the rate of 3.727 SDR per kilogramme given in article 30 for payment into the Quality of Service Fund (QSF) for improving the quality of service in the LDCs. There shall be no such payment from one LDC to another LDC.

2          .Member countries of the UPU and territories coming within the Union shall be able to make well-founded requests to the Council of Administration for their countries and territories to be considered as being in need of additional resources. Countries classified as TRAC 1 (former DCs) may petition the CA to receive QSF funds on the same terms as least developed countries (LDCs). Further, countries classified by the UNDP as Net Contributor Countries (NCCs) may petition the CA to receive QSF funds on the same terms as TRAC 1 countries. Accepted requests granted under this article shall take effect on the first day of the calendar year following the decision by the CA. The Council of Administration shall assess the request and take a decision, according to strict criteria, on whether or not a country can be considered to be a least developed country or a TRAC 1 country, as the case may be, with regard to the Quality of Service Fund. The Council of Administration shall revise and update annually the list of UPU member countries and territories coming within the Union.

  1. Terminal dues, except for M bags and bulk mail items, payable by countries and territories classified by Congress as industrialized countries for terminal dues purposes to the countries and territories classified by the United Nations Development Programme (UNDP) as TRAC 1 countries other than LDCs shall be increased by 8% of the rate of 3.727 SDR per kilogramme given in article 30 for payment into the QSF for improving the quality of service of the TRAC 1 countries other than LDCs.
  2. Terminal dues, except for M bags and bulk mail items, payable by countries and territories classified by Terminal dues, except for M bags and bulk mail items, payable by countries and territories classified by Congress as industrialized countries for terminal dues purposes to the countries and territories classified by the same Congress as developing countries other than those in paragraphs 1 and 3 shall be increased by 1% of the rate of 3.727 SDR per kilogramme given in article 30 for payment into the QSF for improving the quality of service.
  3. The TRAC 1 countries and territories may seek to improve their quality of service through regional or multicountry projects in favor of LDCs and low-income countries in which all parties contributing QSF funding to the projects would directly benefit.
  4. Regional projects should in particular promote the implementation of UPU quality of service improvement programmes and the introduction of cost accounting systems in developing countries. The Postal Operations Council shall adopt, in 2006 at the latest, procedures for financing these projects.

 

Article 32

Transit Charges

  1. Closed mails and à découvert transit items exchanged between two administrations or between two offices of the same country by means of the services of one or more other administrations (third party services) shall be subject to the payment of transit charges. The latter shall constitute remuneration for the services rendered in respect of land transit, sea transit and air transit.

 

Chapter 2

Other Provisions

Article 33

Basic Rates and Provisions Concerning Air Conveyance Dues

  1. The basic rate applicable to the settlement of accounts between administrations in respect of air conveyance shall be approved by the Postal Operations Council. It shall be calculated by the International Bureau according to the formula specified in the Letter Post Regulations.
  2. The calculation of air conveyance dues on closed dispatches, priority items, airmail items and air parcels sent in transit à découvert, as well as the relevant methods of accounting, are described in the Letter Post and Parcel Post Regulations.
  3. The air conveyance dues for the whole distance flown shall be borne:

3.1       in the case of closed mails, by the administration of the country of origin of the mails, including when these mails transit via one or more intermediate administrations;

3.2       in the case of priority items and airmail items in transit à découvert, including missent items, by the administration which forwards the items to another administration.

  1. These same regulations shall be applicable to items exempted from land and sea transit charges if they are conveyed by air.
  2. Each administration of destination which provides air conveyance of international mail within its country shall be entitled to reimbursement of the additional costs incurred for such conveyance provided that the weighted average distance of the sectors flown exceeds 300 kilometres. The Postal Operations Council may replace the weighted average distance by other relevant criteria. Unless agreement has been reached that no charge should be made, the dues shall be uniform for all priority mails and airmails originating abroad whether or not this mail is reforwarded by air.
  3. However, where the terminal dues levied by the administration of destination are based specifically on costs or on domestic rates, no additional reimbursement for internal air conveyance shall be made.
  4. The administration of destination shall exclude, for the purpose of calculating the weighted average distance, the weight of all mails for which the terminal dues calculation has been based specifically on costs or on the domestic rates of the administration of destination.

 

Article 34

Parcel Post Land and Sea Rates

  1. Parcels exchanged between two postal administrations shall be subject to inward land rates calculated by combining the base rate per parcel and base rate per kilogramme laid down in the Regulations.

1.1       Bearing in mind the above base rates, postal administrations may, in addition, be authorized to claim supplementary rates per parcel and per kilogramme in accordance with provisions laid down in the Regulations.

1.2       The rates mentioned in 1 and 1.1 shall be payable by the administration of the country of origin, unless the Parcel Post Regulations provide for exceptions to this principle.

1.3       The inward land rates shall be uniform for the whole of the territory of each country.

  1. Parcels exchanged between two administrations or between two offices of the same country by means of the land services of one or more other administrations shall be subject to the transit land rates, payable to the countries whose services take part in the routeing on land, laid down in the Regulations, according to the distance step applicable.

2.1       For parcels in transit à découvert, intermediate administrations shall be authorized to claim the single rate per item laid down in the Regulations.

2.2       Transit land rates shall be payable by the administration of the country of origin unless the Parcel Post Regulations provide for exceptions to this principle.

  1. Each of the countries whose services participate in the sea conveyance of parcels shall be authorized to claim sea rates. These rates shall be payable by the administration of the country of origin, unless the Parcel Post Regulations provide for exceptions to this principle.

3.1       For each sea conveyance used, the sea rate shall be laid down in the Parcel Post Regulations according to the distance step applicable.

3.2       Postal administrations may increase by 50% at most the sea rate calculated in accordance with 3.1. On the other hand, they may reduce it as they wish.

 

Article 35

Authority of the POC to Fix Charges and Rates

  1. The Postal Operations Council shall have the authority to fix the following rates and charges, which are payable by postal administrations in accordance with the conditions shown in the Regulations:

1.1       transit charges for the handling and conveyance of letter mails through one or more intermediary countries;

1.2       basic rates and air conveyance dues for the carriage of mail by air;

1.3       inward land rates for the handling of inward parcels;

1.4       transit land rates for the handling and conveyance of parcels through an intermediary country;

1.5       sea rates for the conveyance of parcels by sea.

  1. Any revision made, in accordance with a methodology that ensures equitable remuneration for administrations performing the services, must be based on reliable and representative economic and financial data. Any change decided upon shall enter into force at a date set by the Postal Operations Council.

Part IV Final provisions

Article 36

Conditions for Approval of Proposals Concerning the Convention and the Regulations

  1. To become effective, proposals submitted to Congress relating to this Convention must be approved by a majority of the member countries present and voting which have the right to vote. At least half of the member countries represented at Congress and having the right to vote shall be present at the time of voting.
  2. To become effective, proposals relating to the Letter Post Regulations and the Parcel Post Regulations must be approved by a majority of the members of the Postal Operations Council having the right to vote.
  3. To become effective, proposals introduced between Congresses relating to this Convention and to its Final Protocol must obtain:

3.1       two thirds of the votes, at least one half of the member countries of the Union which have the right to vote having taken part in the vote, if they involve amendments;

3.2       a majority of the votes if they involve interpretation of the provisions.

  1. Notwithstanding the provisions under 3.1, any member country whose national legislation is as yet incompatible with the proposed amendment may, within ninety days from the date of notification of the latter, make a written declaration to the Director General of the International Bureau stating that it is unable to accept the amendment.

 

Article 37

Reservations at Congress

  1. Any reservation which is incompatible with the object and purpose of the Union shall not be permitted.
  2. As a general rule, any member country whose views are not shared by other member countries shall endeavor, as far as possible, to conform to the opinion of the majority. Reservations should be made only in cases of absolute necessity, and proper reasons given.
  3. Reservations to any article of the present Convention shall be submitted to Congress as a Congress proposal written in one of the working languages of the International Bureau and in accordance with the relevant provisions of the Rules of Procedure of Congresses.
  4. To become effective, proposals concerning reservations must be approved by whatever majority is required for amendment of the article to which the reservation relates.
  5. In principle, reservations shall be applied on a reciprocal basis between the reserving member country and the other member countries.
  6. Reservations to the present Convention shall be inserted in the Final Protocol to the present Convention, on the basis of proposals approved by Congress.

 

Article 38

Entry into Force and Duration of the Convention

1          . This Convention shall come into force on 1 January 2006 and shall remain in operation until the entry into force of the Acts of the next Congress. In witness whereof the plenipotentiaries of the Governments of the member countries have signed this Convention in a single original which shall be deposited with the Director General of the International Bureau. A copy thereof shall be delivered to each party by the International Bureau of the Universal Postal Union.

 

Done at Bucharest, 5 October 2004.

The Consumer Protection Act, 2075 (2018)

                                                                                         Date of Authentication

   2075/6/2 (18 September 2018)

Act Number 10 of the year 2075 (2018)

An Act Made to Provide for Amendment and Consolidation of Laws

Relating to Consumer Protection

Preamble:

Whereas, it is expedient to make amendment to and consolidation of the legal provisions relating to consumer protection in order to protect and promote constitutional rights of the consumers to obtain quality goods and services, to provide judicial remedy for the enforcement of the rights obtained by the consumers, and provide compensation for harm and injury likely to be caused to the consumers;

Now, therefore, be it enacted by the Federal Parliament.

Chapter-1 Preliminary

  1. Short Title and Commencement: (1) This Act may be cited as the “Consumer Protection Act, 2075 (2018).”

(2)        This Act shall commence immediately.

  1. Definition: Unless the subject or the context otherwise requires, in this Act,-

(a)       “Court” means the Consumer Court referred to in Section 41.

(b)       “Unfair trade and business” means any activity referred to in Section 16.

(c)       “Production” means the process of producing, preparing, refining, changing, mixing, packaging or repackaging, assembling or labeling, or any or all the processes to be adopted in this regard

(d)       “Consumer” means a person or institution that consumes or uses any goods or services.

(e)       “Consumer association” means the institution established under the prevailing law with the objective of protecting and promoting the rights and welfare of the consumers.

(f)        “Central Monitoring Committee” means the Central Market Monitoring Committee referred to in Section 25.

(g)       “Sub-standard goods” means consumer goods of any of the following conditions:

(1)       Goods the quality of which falls short of the standards determined under Section 6 or in which the quantity of an essential ingredient has been lowered, or any other material has been mixed.

(2)       Goods which are stale, rotten or stored or prepared in dirty or toxic conditions or in which any chemical, colour or flavour has been used, so that they become harmful to human health,

(3)       Goods which are fully or partly made of any diseased or disease-generating animals or birds or harmful vegetation,

 (4)      Goods which are produced, transported, hoarded, stored or sold without meeting the standard prescribed,

(5)       Goods which have no quality of consumable goods if it is prescribed, and as mentioned by the producer, if it is not prescribed,

(6)       Goods the quality of which falls short of the minimum necessary standards or exceeds the maximum standards prescribed, if any, in this Act or in the rules framed under this Act.

(h)       “Prescribed” or “as prescribed” means prescribed or as prescribed in the rules framed under this Act.

(i)        “Inspection Officer” means the Inspection Officer appointed or designated pursuant to Section 32.

(j)         “Council” means the Consumer Protection Council to be formed pursuant to sub-section (1) of Section 22.

         (k)       “Laboratory” means the body established with the objective of testing the purity, perfection or quality of the goods and recognized by the Government of Nepal.

(l)        “Ministry” means the Ministry of Industry, Commerce and Supply of the Government of Nepal.

  (m)      “Label” means a tag, sign, picture or other descriptive thing written, printed, lithographed, signed, embossed, included or displayed in any other manner, in or on the goods or the container containing such goods.

  (m)      “Goods” means the substance which the consumers consume or use or the materials made of the mixture of goods which do not inflict harm and injury or any kind of side effect to health, and this term also includes the raw material, colour, fragrance or chemical to be used in the production of such goods.

 (n)       “Price of goods” means the price the price labeled at the time of production, maximum retail price (M.R.P.), the price fixed in the import declaration form or the price fixed at the source by the producer.

  (o)       “Seller” means the person, firm, company or institution that sells and distributes goods or services.

(p)       “Department” means the Commerce, Supplies and Consumer Welfare Protection Department.

(q)       “Service” means electricity, drinking water supply, telephone, information technology, health, education and consultation, transport, drainage, banking or other services of similar nature, and this term also includes legal, medical or engineering services.

  (r)        “Defective product” means any goods or services that do not contain such minimum safety measures due to any of the following as are reasonably expected by the general people while using any product:

(1)       defective design, construction, refinement, mixture or installation,

                                      (2)       defective packaging, protection or storage,

(3)       defective presentation,

(4)       lack of sufficient measure or precaution to control the potential risk or hazard as per the nature of the produced goods or services,

(5)       product which is different or pirated or imitated from the product produced by the manufacturing company possessing the intellectual property right.

Chapter-2 Provisions Relating to Consumers Protection

  1. Rights of the consumer: (1) Every consumer shall have the right to obtain quality goods and services.

            (2)        Without prejudice to the generality of sub-section (1), for the purpose of protecting the rights, interests and concern of the consumers, every consumer shall have the following rights:

   (a)       right of easy access to goods or services,

    (b)       right to choose quality goods or services at the fair competitive price,

    (c)       right to be informed of the price, quantity, purity, quality etc. of the goods or services,

   (d)       right to obtain information from the producer, importer or seller regarding the quantity, ingredient or percentage of the substances contained in the goods made of or produced with the mixture of two or more than two substances,

  (e)       right to be safe from the sale and distribution of the goods and services that inflict harm to the human body, life, health and property,

 (f)        right to get appropriate legal action taken against the unfair trade and business activities,

 (g)       right to obtain compensation against harm and injury caused with the use of goods or services,

 (h)       right to receive remedy or hearing from the competent authority or entity on the protection of the rights and interests of the consumers,

  (i)        right to get consumer education.

  1. Regulation of goods or services: (1) The Government of Nepal shall regulate the supplies, price, quality, measurement, label, advertisement of the goods and services regularly in order to protect the rights of the consumers.

            (2)   The Ministry shall perform the following functions in conducting regulation pursuant to sub-section (1):

   (a)       to implement the policy relating to quality, price determination and supply system of goods or services,

  (b)       to prevent or control monopoly or unfair trade activities that cause or possibly cause adverse impact upon the rights and interests of the consumers, or to formulate and implement a plan of action in this regard,

   (c)       to maintain fair market by continuously analyzing and reviewing the condition of demand and supply of the goods or services used within the country,

   (d)       to make necessary provisions to prevent and control the price determined or increased in an undesired manner by the producer, seller or distributor of the goods or services,

   (e)       to facilitate the supply system through the institutions or private firms or companies having full or partial ownership of the Government of Nepal in order to ensure the supplies of the food and other goods for the consumers at a fair price and easy manner,

   (f)        to fix the maximum quantity of the storage of the goods in any special circumstance, or at any particular place, for the period prescribed,

  (g)        to receive foods from the producers at the prescribed price and sell them to the general people with determining certain quantity of such foods in case there is a shortage of any foods produced within Nepal,

    (h)        to make necessary provision to maintain uniformity in the price in general, by managing wholesale or retail business,

    (i)         to coordinate with the concerned agencies to prevent artificial shortage of any goods or services from occurring or to regularly distribute the goods in all places, for protecting the rights of the consumers and regulating the supply system,

    (j)         to regulate the sale and distribution system of goods, and control the act of creating scarcity or black-marketing in an inappropriate manner or the unfair business activities.

            (3)        The Government of Nepal may, in order to protect the rights of the consumers, regulate the supply system and control the price and quality of the goods and services, make necessary policy and institutional provisions from time to time.

            (4)        The provision referred to in sub-section (3) shall have to be implemented as prescribed.

  1. Quality of goods and services: (1) In case the quality or standards of any substance inherent in any goods have not been determined, the Government of Nepal shall determine the standards or quality of such goods or services by fulfilling the process as prescribed.

                        (2)        The Government of Nepal shall have to publish the notice of the matters of the standards or quality of any goods or service determined pursuant to sub-section (1) in the Nepal Gazette.

  1. To affix label: (1) A producer shall have to affix label on the goods produced by him or her.

                        (2)        The following matters shall have to be mentioned in the label pursuant to sub-section (1):

   (a)        Name, address of the producer and registration number of the industry,

   (b)        Mixture, ingredient of mixture, quantity and weight of the goods, in such goods as food, medicines and cosmetics,

                                    (c)        In the case of the goods of which quality has been determined, the quality of such goods,

     (d)       Mode of using the goods and side effect likely to occur due to the use of such goods,

    (e)        In the case of the goods supposed to be used within a certain deadline, such deadline,

    (f)        Retail price, batch number and date of manufacture of the goods,

   (g)        If it is electronic, hardware, electrical or machinery or goods to be in use for a long time, guarantee or warranty and guarantee or warranty date of such goods, and other necessary things in accordance with the law related to such goods,

 (h)        If any defect is seen in the condition referred to in clause (g), provision to make reimbursement or to repair until certain period,

  (i)         In the case of the goods that are inflammable, hazardous or likely to break down easily, details relating to precaution to be adopted for the safety of such goods,

  (j)         Maximum retail price to be incurred after including all types of taxes applicable for the goods,

  (k)        If any process is supposed to be fulfilled prior to using any goods, such process; and harm and injury likely to occur when it is used without fulfilling such process,

  (l)         Use of awareness-oriented message, picture or sign on the label of the materials of the types of causing harm upon human health,

  (m)       Other matters as prescribed.

                        (3)       The matters to be specified in the label pursuant to sub-section (2) shall have to be written in the Nepali or English language by the producer in the case of the goods produced within Nepal and by the importer in the case of the goods imported, in the way which can be understood by common people.

                        (4)        The goods on which label is not affixed pursuant to sub-section (3) shall not be allowed to be imported, sold and distributed in Nepal.

                        (5)        Notwithstanding anything contained elsewhere in this Section, it shall not be necessary to specify the matters set forth in this Section, while selling consumable goods such as vegetables, fruits to be sold openly.

                        Provided that the label shall have to be affixed on the imported vegetables and fruits.

Chapter-3 Liability of Parties Associated to Marketing of Goods or Services

  1. Liability of producer: (1) While producing goods or services, the producer shall have to fulfill the following liabilities, in addition to the liabilities to be fulfilled under the prevailing laws:

(a)       to produce quality goods or services,

(b)        to determine the label of the goods,

(c)        to specify the matters referred to in Section 6 on the label,

 (d)       not to produce defective product,

(e)        to collect and destroy the goods produced by him or her if it is informed that such goods remain in the market upon having been defectively produced,

 (f)        to provide reasonable compensation if any kind of damage is caused to the consumer due to the manufacture of goods and service,

  (g)        not to make wrong or misleading advertisement or publicity of the goods or services,

 (h)        to provide the consumer with information as to the quantity, ingredients or percentage of the substances contained in the goods made of or produced with the mixture of two or more than two substances.

   (i)         to fulfill such other conditions as prescribed by the law.

                        (2)        If the liability pursuant to sub-section (1) is not fulfilled or any fault, deficiency and defect occurs in the process of production, construction, refinement, design, formula, preparation, import, packing, labeling, and harm and injury is caused to anyone’s body, life, property after using such goods or services, the producer of such goods or services shall be responsible for such harm and injury and shall have the liability to provide compensation for the same.

                        Provided that,

    (a)        it must be the actual producer of the goods or services, the use of which causes harm and injury,

   (b)        direct cause must be established that harm and injury is caused with the consumption or use of the goods or services as claimed for causing such harm and injury.

  1. Liability of importer: (1) While importing goods, the importer shall have to fulfill the following liabilities, in addition to the liabilities to be fulfilled under law:

    (a)        to import without exceeding or making different from the cost price,

   (b)        to provide details of the goods relating to the imported goods when so demanded by the concerned agency or official,

   (c)       not to import the goods prohibited to be imported under the prevailing law,

(d)       to fulfill such other liabilities as prescribed.

                        (2)        Notwithstanding anything contained in sub-section (1), except for the provision made otherwise as per the quality or nature of any goods, the goods shall be forbidden to be imported which are not supposed to or cannot be used after six months from the date of being imported or which cannot be used after the expiry of such period.

                        (3)        If anyone imports the goods without specifying the matters to be specified on the label, and if harm and injury is caused to anybody due to the use of such goods, the importer shall be responsible for such harm and injury and be liable to provide compensation for the same.

  1. Liability of carrier: The carrier shall have to fulfill the following liabilities, in addition to the liabilities to be fulfilled under law:

   (a)       to transport within the determined time period as per the nature of the goods to be imported,

   (b)        to prevent degradation in the quality of goods while transporting,

   (c)        to completely abide by the safety arrangement and the conditions to be abided by as prescribed, while transporting,

   (d)       to provide the details of the goods when the concerned agency or official so demands,

  (e)        to fulfill such other liabilities as prescribed.

  1. Liability of hoarder: The hoarder who hoards the goods shall have to fulfill the following liabilities in addition to the liabilities to be fulfilled under the prevailing law:

   (a)        to exercise care as per the nature of the goods while hoarding such goods,

   (b)        to hoard upon adopting safety measures as prescribed so as to prevent degradation in the quality as per the type or nature of the goods, and not to do any act that may cause degradation in the quality of goods,

  (c)        not to change or replace the label or details specified by the producer,

   (d)       to provide the details of the goods related to the hoarding of the goods when the concerned agency or the official so demands,

  (e)        to adopt safety measures as prescribed,

 (f)        to fulfill other liabilities as prescribed.

  1. Liability of seller: The seller who sells the goods shall have to fulfill the following liabilities, in addition to the liabilities to be fulfilled under the law:

(a)        to sell the goods to the consumers without discrimination,

 (b)        to safely keep and safely sell the goods as per the type or nature by preventing degradation,

 (c)        to keep price list of the goods so that it is clearly seen and understood by general people,

 (d)       to provide storage or details of the goods remained with him or her when the concerned agency or official so demands,

 (e)        to abide by the provision of guarantee or warranty, if any, in the goods,

 (f)        to sell the goods to the customers on a first-come-first-served basis,

 (g)        to give the bill or receipt on selling the goods,

  (h)        to fulfill other liabilities as prescribed.

  1. Liability of service provider: The service provider providing service to the consumer shall have to fulfill the following liabilities, in addition to the liabilities to be fulfilled under the law:

  (a)        to provide the consumer with the service without discrimination,

  (b)        to keep nature of the service to be provided and the list of the price to be paid by the consumers for such service received, at the place visible to everyone, so that it is clearly understood by the general people,

  (c)        to provide the details and documents related to the service to be provided when the concerned agency or official so demands,

 (d)       to provide the service to the customer on a first-come-first-served basis,

  (e)        to give the bill or receipt after receiving the amount for the service provided to the consumer,

  (f)        to fulfill such other liabilities as prescribed.

  1. To determine level of market: For the purpose of protecting the rights of consumers, managing the market in accordance with the market rule and making market fair and transparent, the levels of market involved in taking the prescribed goods or services from the producer or importer to the final consumer shall be as prescribed.
  2. To return goods: (1) If anyone wishes to return, being dissatisfied with, any goods purchased from the seller, he or she may return it to the seller within seven days or take other similar goods equal to that price or the payment of the amount which was paid while purchasing such goods.

            (2) While returning the goods pursuant to sub-section (1), the seller shall not be allowed to make deduction in the price or take any kind of additional charge.

            (3) While returning the goods pursuant to sub-section (1), the bill or receipt given by the seller at the time of purchasing such goods shall have to be produced.

            (4) Notwithstanding anything contained in sub-section (1), no goods may be returned or taken as replacement in the following circumstances:

  (a)       if the quality or quantity of such goods is altered by the purchaser after the purchase,

  (b)       in the case of the goods of such nature that they must be used within the certain deadline, such deadline has already expired,

  (c)       in the case of the goods of such nature as being rotten, overripe, such as milk, fruits, fish, meat, in case they are not consumed instantly,

  (d)       if the purchased goods are already used,

   (e)       if the seal is broken off in the case of sealed goods.

            (5) Notwithstanding anything contained elsewhere in this Section, in the case of sealed goods, such goods may be returned within fifteen days, in the unbroken condition of the seal, or other similar goods equal to the same price may be taken instead of such goods.

  1. To keep bill or invoice: (1) The importer, carrier, hoarder and seller shall have to keep with them the producer or purchase bill or invoice of the goods or services purchased for the purpose of sale.

                        (2) The bill or invoice shall have to be shown at the time when the concerned official so demands.

Chapter-4 Prohibited Activities

  1. Not to conduct unfair trade and business activities: (1) No one shall conduct or cause to conduct unfair trade and business activities.

                        (2) For the purpose of sub-section (1), if any of the following activities is conducted, an unfair trade and business activity shall be deemed to have been taken place:

  (a)        selling or providing the goods or services by lying, concealing, hiding or misleading the actual quality, quantity, price, measurement, format or composition etc. of such goods or services,

    (b)        releasing false or misleading advertisement, or selling the goods by making misleading advertisement,

   (c)        doing any of the following acts through oral, written or visual means in the case of goods or services:

  (1)        selling sub-standard goods by showing standard, quality, quantity, class, composition, design as if having specialty or quality,

  (2)        selling re-produced or old goods showing or misrepresenting that they are new one,

   (3)        advertising or notifying and disseminating, in false and misleading manner, while selling the goods or services even when no benefit is obtained as declared,

 (4)        claiming, guaranteeing or selling any goods through consumption or use of such goods without factual ground.

     (d)       determining price in a manner to shift burden upon the consumer price on the ground different than the ground of actual cost of any goods or services, or fixing the price by including the cost of any contest, lottery, occasion, or selling at such price,

 (e)        determining price by including the price or cost of other goods to be obtained as donation, gift or without charge upon the price of any goods or service, or selling such goods or service at such price,

     (f)        producing, mixing up or supplying or transporting or hoarding or selling the goods so as to become less or more than the quality or standard in any goods or service, or to inflict harm and injury upon the consumer from the use of such goods or service,

 (g)        creating artificial shortage of, hoarding or selling, any goods,

    (h)        selling the goods by including the price of goods destroyed by defective product or the price of goods contracted in the course of business transaction in the cost price of other goods,

 (i)         producing or importing fake goods or selling such goods to displace any goods,

 (j)         refusing to issue bill or invoice of the sold goods or service, or not issuing bill or invoice, or demanding additional amount while issuing bill, invoice,

(k)        using poison or any chemical so as to inflict harm and injury upon the consumer while using any goods, or selling the goods so used,

 (l)         selling the already expired goods by affixing new label on such goods which is not consumable or is not supposed to be used,

  (m)       importing, producing or selling sub-standard goods which cannot be used,

  (n)        providing service without specifying the price, quality of service, venue and time to provide service by a professional service provider,

  (o)        selling so as to become contrary to sub-section (1) of Section 17 in collusion with the producer, importer, carrier, hoarder or seller or such person and other person, organization and institution,

   (p)        selling or providing by setting up levels or series more than the business level prescribed while selling or providing any goods or services,

  (q)        selling without fulfilling the structure, measurement or standard if any, prescribed for selling or providing any goods or service.

  1. Not to cause adverse impact on demand, supply or price: (1) No one shall sell, distribute or transport or hinder the sale and distribution of any goods by taking profit higher than that prescribed and over the cost invested in the production, import, transport, hoarding or sale and distribution of that goods.

                        (2)        No one shall cause adverse impact on the demand, supply or price of any goods or service by doing any of the following acts, in association with any person, institution or anyone else:

    (a)        determining quota of the raw materials required for the manufacture of any goods, or reducing the production of any goods or doing any other such work,

    (b)        creating artificial shortage by hoarding any goods or service or by any other manner,

    (c)        selling the goods or service at the determined time or place only or doing other acts of similar nature.

  1. Other act not to be done regarding goods or service: No one shall do or cause to be done any of the following acts, regarding any goods or services:

  (a)        producing, selling or importing sub-standard goods knowingly,

   (b)        selling any goods or services by lying or deceiving that the goods or services are other goods or services and stating high standard goods for low standard goods or services,

 (c)        producing or selling the goods or service that cause adverse impact upon the health of consumer,

 (d)       affecting the price and supply system by creating shortage of the goods by accompanying with businesspersons or business groups in order to manufacture, import or sell various goods of the same nature,

(e)        operating service by adopting a circle system, quota system, rotational system, trip system or token system, in cooperation with more than one business persons or business groups that provide any service of the same nature,

                         (f)        making a provision requiring to purchase other goods too, while purchasing any goods.

Chapter-5 Provisions Relating to Determination of Price of Goods or Services

  1. List of essential food and other goods and service: (1) The Government of Nepal shall determine the list of essential food and other goods or services by a notification in the Nepal Gazette from time to time.

                        (2)        The maximum price of essential food and other goods or services shall also have to be fixed in the list pursuant to sub-section (1).

                        (3)        While selling the goods or service pursuant to sub-section (1), the seller shall not sell, or cause to be sold, the same in a price higher than that referred to in sub-section (2).

  1. To keep price list and registration certificate: (1) Price list shall have to be kept by clearly specifying the factory price of each of the goods by the producer, wholesale or retail price of goods to be sold and distributed by the seller, and price of the service to be provided by the service provider.

                        (2)        If it is an industry to produce the goods, the industry registration certificate, and in the case of business, business registration, license shall have to be displayed at the place of sale in a way visible to the general people.

                        (3)        The Government of Nepal may, by a notification in the Nepal Gazette, establish a price information center as prescribed.

                        (4)        The producer and wholesaler or retailer located in the district concerned shall have to provide the factory price and the wholesale or retail price respectively to the price information center established pursuant to sub-section (3).

  1. Provision to determine standard of price of goods or service: (1) The agency as prescribed shall prepare the standards relating to determination of price of goods or services as prescribed.

                        (2)        While preparing standards relating to price determination pursuant to sub-section (1), profit amount to be taken by the seller also shall have to be accepted as basis in such a way that production cost of the goods, transport expenses, custom, tax, charge paid by the importer pursuant to law shall not be more than the percentage fixed while selling.

                        (3)        While preparing standards relating to the determination of price of any service, if the agency prescribed pursuant to sub-section (1) has assigned anybody or authority in accordance with the law regulating or managing the conduct and functions of the person who provides such a service, the standards shall have to be prepared as per the standards determined by such a body or authority.

                        (4)        While preparing standards, in case the standards are not determined even after the body or authority is assigned pursuant to sub-section (3), such a body or authority shall have to be consulted with.

                        (5)        While preparing standards relating to the determination of price pursuant to sub-section (1) or (3), the standards may be determined differently to make the maximum price, be taken for such goods or services provided, on the basis of the geographical region, nature of the services and particular place.