Government of Timor-Leste

Presidency of the Council of Ministers

Spokesperson of the Government of Timor-Leste

Ninth Constitutional Government

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Press Release

Meeting of the Council of Ministers on November 18th, 2023

The Council of Ministers met at the Government Palace in Dili and approved two draft Decree Laws, presented by the Minister of Transport and Communications, Miguel Marques Gonçalves Manetelu, on the Vessels and Ship Registration and the Technical Inspection Service for Ships, to establish the rules and procedures for registration and inspection services for the use of national ships and vessels, under international standards for maritime safety and protection of the marine environment.

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• The Vessel and Ship Registration Decree-Law aims to establish and regulate the requirements and procedures for granting Timorese nationality to vessels and ships, the consequent right to fly the Timorese flag on them, and creating and regulating the corresponding register.

• The primary purpose of the draft Decree-Law on the Technical Inspection Service for Ships is to guarantee the safety of navigation in the waters under the jurisdiction of the Democratic Republic of Timor-Leste and to preserve the marine environment. The aim is to establish rules and procedures for the control and technical inspection of ships and their equipment. It is also intended to regulate the certification and accreditation of inspectors, ensuring the prevention of shipping accidents following the international standards of the United Nations Convention on the Law of the Sea (UNCLOS) and the International Convention for the Safety of Life at Sea (SOLAS), to which Timor-Leste is a signatory.

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At the proposal of the Minister of Trade and Industry, Filipus Nino Pereira, the Council of Ministers approved the following:

• A draft Government Resolution establishing the National Industry Development Policy to achieve industrial diversification, innovation and sustainable economic growth.

The aim of this legislative intervention is, in particular, to establish a vision that prioritises the adoption of appropriate policies to boost dynamic and innovative manufacturing industries that supply the national market and contribute to increasing exports, attracting private investment, creating jobs, fostering and diversifying the economy, and complying with the Sustainable Development Goals and the Strategic Development Plan 2011-2030.

The aim is also to promote increased industrialisation and economic diversification in the country, focusing on innovation and export-oriented production, including export processing zones, trade corridors, industrial parks, and special economic zones.

The law establishes priority policy actions to boost industrial activity in the country, focusing on the short- and medium-term industrialisation of strategic sectors such as agriculture, forestry, fishing, tourism, mineral resources and construction as industries based on existing local resources, and gradually, industrialisation not based exclusively on local resources, geared towards processing for export.

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• A draft Decree-Law defining the Bases of Industry. This Decree-Law represents a regulatory framework to guide the concrete political and administrative actions to be developed by the Government in industrial activity. It establishes a systematised body of rules and principles and a legal basis to ensure the conditions for developing this activity from a global and integrated perspective and encourage the private sector to invest. This Decree-Law provides, among other things, a set of rules, conditions and incentives for industrial activity, as well as sectoral licensing and administrative offence regimes, whose definition and procedures are left to complementary legislation.

This Decree-Law aims to bring Timor-Leste's legal and regulatory framework into line with international standards to facilitate the ongoing accession processes to ASEAN and the World Trade Organisation, thereby increasing accessibility to foreign markets.

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• A draft Decree-Law on Industrial Licensing, which aims to achieve three main objectives: the creation of better legal conditions for the regulation and supervision of industrial activity, the establishment of a sectoral licensing regime for industrial activities based on the level of risk, and the reinforcement of the principle of simplifying the procedures required for licensing, maintaining SERVE as the Single Window for these processes.

The aim is to establish a zero-licensing system for low-risk industrial activities, with no need for a licence or prior inspection to start the activity. As for medium and high-risk industrial activities, the aim is to detail the legal and regulatory requirements for obtaining a sectoral licence, which will be carried out through a prior inspection, after which the competent authority will issue the licence authorising the exercise of the intended industrial activity.

The Decree-Law makes it compulsory for all industrial companies to be registered in the industrial register, regardless of whether they are exempt from the licence or competences of other public bodies.

It also provides for a set of rules to be followed when carrying out industrial activity, including a system of penalties in the event of violations aimed at preventing risks, safeguarding public health and workers, the safety of people and property, environmental quality and proper land-use planning, within a framework of sustainable industrial development and corporate social responsibility.

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• A draft Decree-Law on Sectoral Licensing of Commercial Activities to fill the existing gap in the legal framework applicable to commercial licensing.

The current regime, derived from Decree-Law 34/2017 of September 27^th, amended by Decree-Law 83/2022 of November 23^rd, although it has simplified procedures for starting economic activities in general, has left gaps in the licensing of commercial establishments that may pose risks to health, safety, salubrity or the environment. This new Decree-Law proposes establishing a sectoral licensing regime for commercial activities, classifying them according to the associated risk. The aim is to simplify licensing for low-risk activities, requiring only a declaration of commencement from SERVE. In contrast, medium- and high-risk activities will be subject to sectoral licensing supervised by the Directorate-General for Trade. The Decree-Law also requires registration in the commercial register, regardless of the need for a licence, and defines rules, including a sanctioning regime in case of violations. This Decree-Law is intended to fill gaps, simplify procedures and guarantee the safety and compliance of commercial activities in Timor-Leste.

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• A draft Decree-Law on the General Legal Framework for Electronic Commerce and Electronic Signatures.

This draft Decree-Law proposes a general legal regime applicable to electronic transactions, records and signatures, as well as their use, especially in e-commerce, recognising the fundamental importance of e-commerce in economic growth.

Intending to promote the development of electronic commercial transactions in the information society, the Decree-Law covers issues such as the validity of electronic contracts, the use of electronic registers and the status of electronic signatures. Of particular note is creating a record for certification bodies, for more effective supervision, and the assignment of assessment functions to the Information and Communication Technologies Agency I.P. (TIC TIMOR). The Decree-Law also establishes a penalty system for electronic signatures and commerce offences.

The aim is to provide the country with a legal framework that promotes the development of electronic commercial transactions within the broader framework of the information society. The objective is also to provide significant investment and employment opportunities while stimulating economic growth and innovation. Another objective is facilitating the interaction and involvement of citizens and companies with the public administration, addressing national and international issues in e-commerce. Lastly, the legislative intervention also aims to encourage the development of paperless cross-border trade, contributing to greater integration of Timor-Leste into the regional and global economy. END