Apr 29, 2017 Last Updated 8:40 PM, Apr 25, 2017

Modes of Trade in Services within the CSME

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Mode 1 - Cross Border Trade

Cross border trade in services is the supply of services from the territory of one Member State into the territory of another member State [Article 36(4a)].  It requires only the movement of the service. Neither the movement of the supplier or the consumer is required. Cross border trade is facilitated through Information and Communication Technologies (ICT), postal and transportation services.

The rapid changes in information technology and telecommunications and the rapid growth in e-commerce have led to the increased use of this mode by service exporters.  This has brought with it challenges regarding the management and tracking of international trade and an on-going debate as to whether some products which can be delivered both in physical and electronic forms should best be classified as services or goods.  This has implications for collection of customs duties and taxation. There is also the issue of the country of origin of transaction given the use of different servers at different locations to complete a transaction.

These issues are still evolving and being debated and precise procedures cannot therefore be enunciated in these areas at this time. 

 

Mode 2 - Consumption Abroad

Trade in services through this mode is the supply of services in the territory of one Member State to the service consumer of another Member State [Article 36 [4(b)].  This mode requires the consumer to travel to another Member State to receive a service. 

The facilitating procedures for trade in this mode are those required to:

  • Ensure travel without harassment and the imposition of impediments; and
  • Ensure ease of movement of capital for the purpose of payment for such services.

 

Mode 3 - Commercial Presence

This is the supply of services by the service supplier of one Member State through a commercial presence in the territory of another Member State [Article 36(4c)]. Under this mode, the supplier of the service sets up an office in the consumer’s market and are often referred to as ‘Establishment Providers’.  The procedures required to facilitate this trade are those required to establish an economic enterprise and those required to move staff from the home office to the location of the newly created economic entity in the host market.  Under the CSME Framework, Mode 3 is covered under the regime for the ‘Right of Establishment’.

 

Mode 4 - Movement of Natural Persons

This is the supply of services by the service supplier of one Member State through the presence of a natural person of a member State in the territory of another Member State [Article 36(4d)]. Under this mode the service supplier or his/her staff travels to the customer’s market. 

Critical to this process is the application for and the issuance of a certificate by the Competent Authority within the National’s country, subject to the provision of proof relating to:

  • CARICOM nationality; and
  • Competency to provide the service, or contract to offer service or letter from relevant association or reputable person or body. 

The certificate, the lifetime of which is indefinite, along with a valid passport and the contract to offer service or an invitation letter, must be presented to the Immigration Officer at the port of entry, who should then grant the CARICOM National sufficient time to provide the service (if pre-entry application was not sought though the CSME Regime Administration System by the service provider).

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