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FSM Foreign Investment Act Takes Effect January 01, 1997

PALIKIR, Pohnpei (FSM Information Service): November 28, 1997 - President Jacob Nena, on November 12, 1997, informed all FSM State Governors that he has signed into law a new Foreign Investment Act of 1997 (FIA), designated it Public Law No. 10-49, which will take effect on January 1, 1998.

The new law disallowed certain category of foreign investments anywhere in the FSM, naming it Category A, or National Red List which include: arms manufacture, minting of coins or printing of currency notes, activities relating to nuclear power or radioactivity and other economic sectors to be designated by the Secretary of Resources and Development after consultation with the FSM states.

On Category C or National Green Lists are banking defined in title 29 of the FSM Code; telecommunications; fishing in FSM Exclusive Economic Zone (EEZ); international and interstate air transport, international shipping, and other economic sectors as the Secretary of R&D may designate after consultation with the FSM states.

Categories of economic sectors not of special national significance are delegated to the jurisdiction of the State Government to be regulated by State laws and regulations.

The implementation of the Foreign Investment Act contemplates cooperative and collaborative efforts by the National and State Governments. President Nena urged States to enact necessary legislation and regulations for implementation of foreign investment in the FSM.