DEPARTMENT OF RESOURCES & DEVELOPMENT
YAP STATE GOVERNMENT
P. O. Box 336
Tel. No. (69I ) 350-2182
Cotonia, Yap Fax: (691) 350-2571
Federated States of Micronesia 96943
ADOPTION OF REGULATIONS
SUBJECT: FOREIGN INVESTMENT REGULATIONS
WHEREAS, the Director of the Department of Resources and Development is authorized, pursuant to Section 316(c) of Yap State Law No. 4-19, to promulgate regulations to cant' out the purposes of the Yap State Foreign Investment Act; and
WHEREAS, the Director of the Department of Resources and Development has drafted Regulations for Foreign Investment, and such Regulations have been subject to public comment as required by the Yap State Administrative Procedures Act;
NOW THEREFORE, pursuant to the authority vested in him by law, the Director of the Department of Resources and Development hereby adopts and promulgates these regulations for Foreign Investment.
The effective date of these regulations shall be twenty days from June 21, 1999.
/s/
Director, Department of Resources and Development
Received and filed on June 18, 1999
/s/
Attorney General, Yap State
Received and filed on June 18, 1999 .
/s/
CLERK, Yap State Legislature
YAP STATE FOREIGN INVESTMENT REGULATIONS'
TABLE OF CONTENTS
Section 1 Authority
Section 2 Applicability
Section 3 Definitions
Section 4 Illustrations
Section 5 Yap State Prohibited Economic Sectors
Section 6 Reporting of Violations of FSM Foreign Investment Act
Section 7 Application Forms and Submission Requirements
Section 8 Action by the Director on Applications -Time Periods
Section 9 Denial of Foreign Investment Permit and Imposition of
Conditions on a Foreign Investment Permit
Section 10 Form of Permits
Section 11 Fees
Section 12 Renewal of a Section 7.1.a Yap State Foreign Investment Permit
Section 13 Suspension or Cancellation of a Yap State Foreign
Investment Permit
Section 14 Surrender of a Permit
Section 15 Applicability of Hearing Procedures
Section 16 Commencement of Hearing
Section 17
Right to Present Evidence
Section 18 Public Notice
Section 19 Hearing Officer
Section 20 Rights of Parties
Section 21 Burden of Proof and Presumptions
Section 22 Rules of Evidence
Section 23 Recording of Evidence
Section 24 Hearing Officer's Decision and Hearing Record
Section 25 Right to Issue Administrative Subpoenas
Section 26 Form of administrative Subpoena
Section 27 Service of an Subpoena
Section 28 Representation by Counsel
Section 29 Applicability of Rules of Civil Procedure
Section 30 Expatriate Worker Authorizations (EWA)
Section 31 Reports by Holders of Permits
Section 32 Reports by the Director
Section 33 Fines and Penalties
Section 34 Repatriation of Capital
Section 35 Confidentiality of Investor Information
Section 36 Notices
Schedule 1 Foreign Investment Permit Application Form (7.1.a)
Schedule 2 Foreign Investment Permit Application Form-Occasional Sate
Schedule 3 Foreign Investment Permit Application Form-Foreign Aid Class 1
Schedule 4 Foreign Investment Permit Application Form-Foreign Aid Class 2
Schedule 5 Foreign Investment Permit Application Form-Independent Contractor/Consultant
Appendix A Yap State Foreign Investment Permit Form
Appendix B Expatriate Worker Authorization (EWA) Application Form
Appendix C Annual Report Foreign Investment Permit Holder (7.1.a)
Appendix
D Change in Foreign Ownership Report (7.1.a)
Appendix
E Change in Business Address Report (7.1.a)
Appendix F Change in Registered Agent Report (7.1.a)
Note: Appendices are not part of the Regulations, but are published herewith for convenience of foreign investors. The Director reserves the right to change the forms contained in the Appendices without notice.
Part I
General Provision
1.1. These Regulations shall implement the provisions of the Yap State Foreign Investment Act, Chapter 3 of Title 22 of the Yap State Code. These Regulations are issued and promulgated by the Director of the Department of Resources and Development pursuant to 22 YSC §316(c) and in accordance with the Yap State Administrative Procedures Act. Upon approval by the Governor, these Regulations shall have the force and effect of law.
2.1 Except as otherwise provided for in these regulations, these Regulations shall apply to:
a. All applicants for a Yap State Foreign Investment Permit;
b. All holders of a Yap State Foreign Investment Permit;
c.
All holders of an FSM Foreign Investment
Permit which was
issued prior to the enactment of the Yap State Foreign Investment
Act and which holders are required to obtain a Yap State Foreign
Investment Permit, pursuant to the
provisions of the Yap State Foreign Investment
Act and the
FSM
Foreign Investment Act of 1997.
d.
All non-citizens who are engaging in or
intend to engage in business within the State.
2.2. Nothing herein is intended to limit the scope of any other laws or Regulations which may be applicable to applicants for-or holders of Yap State Foreign Investment Permits.
2.3. Within 30 calendar days-of these eetive=date of these Regulations, non-citizens who are engaging in business within he State of Yap on the effective date of these Regulations shall apply for a Yap State Foreign Investment Permit or shall cease engaging in business in the State of Yap.
3.1. When the terms defined in the Yap State Foreign Investment Act are used in these Regulations, the definitions provided in the Yap State Foreign Investment Act shall govern unless otherwise required by the context.
3.2. For the purposes of these Regulations:
a. "Act" shall mean the Yap State Foreign -Investment Act,
Chapter 3 of Title 22 of the Yap State Code.
b. "business day" shall mean a day
on which the offices of the Director are open for public
business.
c. "Director" shall mean the Director of the Department of Resources and Development or his designee.
d. "normal business hours" shall mean 8:00 a.m. to 4:30 p.m. on a business day.
e. "person" includes both individuals and legal entities.
4.1. "Business entity" includes a non-profit corporation, non-profit organization, or other non-profit entity or association of persons engaging in business, including, but not limited to, churches, religious organizations, community organizations, or foundations, which engage in business whether or not the profits which are generated from the business are used for philanthropic/charitable purposes or for other purposes.
Example 1: A church operates a book store in the State;-and.the profits of the book store are used to supply food for needy church members or for other charitable purposes. The church is a business entity engaging within the State.
Example 2: A group of non-citizens form a community organization. The community organization occasionally holds fundraising events in order to raise funds for the return transportation costs of its members and for other purposes. The community organization is a business entity Which is engaging business.
Example 3: A foreign non-profit corporation operates a bar in the State. The foreign non-profit corporation is a business entity engaging in business within the State.
Example 4: B, a non-citizen is completing his employment contract with the State and is planning to return to his country of origin. B holds a yard sale in order to sell his personal belongings which he does not wish to bring back to his country of origin. B is a business entity engaging in business within the State.
Example S : B, a non-citizen, sells handicrafts once a month at the Small Business Center flea market. B is a business entity engaging in business within the State.
Example 6: B, a non-citizen, sells goods on Yap Day or UN Day. B is a business entity engaging in business within tee State.
Example 7: B, a non-citizen, sells,baked goods from her house on order. B is a business entity engaging in business within the State.
4.2. For the purposes of Section 303(b), "citizen" includes village community groups.
Example 1: A village forms a community organization which engages in various business activities in order to raise funds for the community's development and for scholarships for community members. All individuals who live within the village boundaries are members of the community organization. Several non-citizens live within the village boundaries and are members of the village community organization. The village community organization is a citizen.
Example 2: A group of non-citizens residing in the same village form a community organization which engages in occasional fund raising events. The non-citizen community organization is not a citizen.
4.3: An individual or entity shall be deemed to be "engaging in business" as defined in Section 303(d)(1)(i) and (d)(1)(ii) of the Act if the property or services which are being bought, sold, leased, or exchange & are bought, sold, leased, or exchanged for cash or for other property or services.
Example 1: B, a non-citizen, rents motorcycles in the State. C rents a motorcycle from B for the day and pays with a credit card. B is engaging in business.
Example 2: B, a non-citizen, wants to build a hotel in the State. F, an FSM citizen, owns a parcel of land which he wishes to develop. B decides that F's land is the perfect place to build his hotel. B does not want to make lease payments to F; so, instead, B exchanges a 25% interest in the hotel to F in exchange for a 50 year lease on the land from F. B is engaging in business.
Example 3: B, a non-citizen residing in the State, is an accountant working for the State. C, a non-citizen, operates a construction company in the State and needs an accountant to audit his company's books and records. B needs a new roof on his house. B provides accounting services to C, and in exchange, C puts a new roof on B's house. B and C are both engaging in business.
Example 4: B, a non-citizen, gives cooking lessons to Yapese students from her home. The Yapese students provide the food which will be used during the lessons, but B is not paid for the lessons. B is not engaging in business.
4.4. For the purposes of Section 303(d)(1)(iv), "maintaining a stock of goods" includes, but is not limited to, goods in their natural state, goods which have been partially processed, and goods which have been processed but which are intended to be incorporated into another product.
Example 1: G, a non-citizen corporation, operates several fishing vessels within the FSM. These fishing vessels catch sashimi grade tuna as well as lower grade tuna and other by-catch. G has a contract with Y, a Yap corporation, in which Y has agreed to fillet the by-catch and package the by-catch for G to sell to overseas markets. G is maintaining a stock of goods in the State.
4.5. For the purposes of Section 303(d)(1)(viii), "seven days in any calendar
year" means any seven days whether those-seven-days are consecutive or not. Further, when calculating the seven days, each calendar day. on which professional services have been performed will be counted whether or not the professional services were performed for less than eight hours a day and whether or not the professional services were performed for the same client. If the professional services were performed for more than eight hours on the same calendar day, that day shall be counted as one calendar day. There shall be a rebuttable presumption that every calendar day on which the non citizen professional is physically present within the State the non-citizen pro_essioriay,is performing professional services.
The burden shall be on the non-citizen professional to establish by a preponderance of the evidence that he was not performing professional services while physically present within the State.
4.6. For the purposes of Section 303(d)(1)(x), the term "physician" shall include all health care professionals, including, but not limited to, doctors, nurses, nurse practitioners, technicians, psychologists, and psychiatrists. Further, the term "dentist" shall include all oral health care professionals, including, but not limited to, dental hygienists and oral surgeons.
4.7. For the purposes of Section 303(d)(I)(xi), the term "owned as a beneficial interest" shall include an ownership interest which is not held in the non-citizen's name but from which the non-citizen receives a benefit, i.e. profits, dividends, control of assets, etc. In determining whether a non-citizen owns a beneficial interest, the Director shall take into consideration, among other things, whether the non-citizen is receiving a percentage of the profits from business.
Example 1: B, a non-citizen, is the baneficiary of a trust which holds title to ten percent of the stock in Y, a Yap corporation. B owns a ten percent beneficial ownership interest in Y.
Example 2: F, a FSM citizen, holds title to twenty percent of the stock of Y, a Yap corporation. B, a non-citizen, is F's grandson: F authorizes B to vote her stock at the annual shareholder's meeting and instructs B as to how to vote at the annual shareholder's meeting. B does not own a twenty percent beneficial ownership interest in Y.
Example 3: F, a FSM citizen, holds title to twenty percent -of the stock of Y, a Yap corporation. B, a non-citizen, is F's grandson. B does not hold title to any stock of Yin his own name. F authorizes B to vote her stock at the annual shareholder's meeting in any manner in which B wants. B owns a twenty percent beneficial ownership interest in Y.
4.8. For the purposes of Section 303(d)(2)(i)(a), the term "pro hac vice" shall mean the admission attorney to practice before the Yap State Court or the Supreme Court of the Federated States of Micronesia for a particular ease only. The admission of 'an attorney pro hac vice is controlled byeaule1l ;of the Rules of the State Bar of Yap and Rule IV of the Rules for Admission to Practice before the Supreme Court of the Federated States of Micronesia.
4.9. For the-purposes of Section 303(d)(2)(i)(b), the terrri "pro bono" shall include those cases in which the attorney is providing professional services free of charge or other compensation and those cases in which the attorney has been appointed by the Court and the only compensation which the attorney is receiving is the reimbursement of travel and room and board costs. Payment in kind of anything of more than a minimal value or of services of more than a minimal value will be deemed payment for professional services rendered.
Example 1: H, a non-citizen attorney, represents a village community in a class action against a foreign vessel owner for reef damage. H has entered into a contingency fee arrangement where H will only be paid if the case is concluded in the village's favor. H is not providing professional services on a pro bono basis.
Example 2: P, a non-citizen attorney, has agreed to represent Y, a Yapese. P will not receive any payment or gifts for his services. P is providing professional services on a pro bono basis.
Example 3: P, a non-citizen attorney",ohas agreed to represent Y, a Yapese. Y has agreed to give P a house in return for representing him. P is not providing professional services on a pro bono basis.
Example 4: The Court has appointed G, a non-citizen attorney, to represent a defendant in a criminal case. The Court has agreed to pay for G's airfare and lodging while in Yap. G is providing-professional services on a pro bono basis.
Note: The attorney's professional conduct is regulated by the Yap State Court and/or the FSM Supreme Court regardless of whether the attorney is providing services on a pro bono basis or for a fee. These regulations are not intended to limit the Courts' jurisdiction or the application of any other applicable laws or regulations pertaining to the attorney's professional conduct.
4:10. For the purposes of Section 303(m), when determining whether a business entity has at least a ten percent ownership interest, in aggregate, which is owned by a person or persons who are non citizens the Director shall first deterrhe.awnership interest held by each non citizens and then shall add those separate ownership interests together: If the total ownership interest of all noncitizens in the business entity is equal to or greater than ten percent, then the business rentity is a non-citizen. If the total ownership interest of all-non-citizens in the business entity-is less than ten percent; then the business entity is not a non-citizen.
Example i : Y, a Yap corporation, has three stock holders. A, a FSM citizen, owns 75% of the stock. B, a non-citizen, owns 15% of the stock. C, a FSM citizen, owns 10% of the stock. As 15% of Y is owned by a person who is not a FSM citizen, Y is a non-citizen.
Example 2: Y, a Yap partnership, has four partners. A, a FSM citizen, holds a 50% partnership interest. B, an FSM citizen, holds a 42% partnership interest. C, a non-citizen, holds a 4% partnership interest. D, a non-citizen, holds a 4% partnership interest. As only 8% of Y is owned by persons who are not FSM citizens, Y is not a non-citizen.
Example 3: Y, a Yap corporation, has several shareholders who are not FSM citizens. The non-FSM citizens hold the following percentages of shares: A holds 1%. B holds 1%. C holds 2.5%. D holds 3%. E holds 3.5%. F holds 2%. As 13% of Y is owned by persons who are not FSM citizens, Y is a non-citizen.
If E sells his shares of Y to Z, an FSM citizen, then the percentage of Y which is owned by non-citizens is reduced to 9.5%. After E's sale to Z, less than 10% of Y is owned by non-citizens, and Y will no longer be considered a non-citizen.
Note: For the purposes of these Regulations, the foreign ownership of a cooperative is determined by the percentage of shares owned by non-citizens.
4.11. For the purposes of Section 303(n), "indirect ownership or control" includes control of the individuals) or entity(s) in whose name ownership, control, or legal title is held.
Example 1: B, a non-citizen, is married to Y, a Yapese citizen. B and Y have two children under the age of eighteen. B and Y establish a business which is incorporated as a Yap corporation and give all of the stock in the corporation to the two children. As the children are minors, the stock is placed in a trust. B manages the corporation's business, but is not the trustee of the trust which holds the stock to the corporation. B has the indirect ownership or control of corporation, and thus, B has an ownership interest in the corporation.
Example 2: B, a non-citizen is married to Y, a Yapese citizen. Y's father X, also a Yapese citizen, is 72-years old. X has operated a sole proprietorship for 20 years in the State. X wishes to_semiretire. X and Y agree that Y will take over the day to day management of the sole proprietorship in return for a share of the profits. During the course of normal business operations B assumes a management role and/or receives benefit from Y's share of profits. B will be deemed to have indirect ownership or control in the sole proprietorship.
Example 3: Y, a Yapese citizen, has established a family business. In order to ensure that his three children have an interest in the family business, Y has incorporated the family business as a Yap corporation, known as Z Corporation. Each of Y's children own an equal number of shares of Z Corporation. C, a son of Y, is living in the US and is married to a non-citizen. C has decided to place his shares in Z Corporation in a trust for. his children M and N (ages 18 and 20) who are non-citizens. M and N are the only beneficiaries of the trust and have no authority to control any of the assets of the trust until they both reach the age of 30 years. M and N have indirect ownership of shares of Z Corporation, and thus, each has an ownership interest in Z Corporation.
4.12. For the purposes of Section 303(n)(1), "security interest" means any interest in property acquired by contract for the purpose of securing payment or performance of an obligation or indemnifying against any loss or liability. For example, a mortgage is used to grant a security interest in land.
4.13. For the purposes of Section 303(n)(2), "minor child" means a child under eighteen years of age. Child includes biological children, adopted children (whether or not the adoption has been legally recognized), and step-children whether or not the children are residing with the non-citizen. Child may also include nieces, nephews, and grandchildren. In determining whether a child is a "minor child" of a non-citizen, the Director shall take into consideration, among others, the following factors:
a. Relationship between the child and the non-citizen;
b. Traditional and customary relationship
c. Residence of the child; and
d. Source of financial support of the child.
4.14. For the purposes of Section 303(n)(2), "dependent" means an individual, whether or riot related by blood, marriage, or clan, who depends upon or looks to the non-citizen for financial support. In determining whether an individual is a dependerit.~that individual's age shall not be determinative. Further, in determiring.whether an individual is a dependent, the Director shall take into consideration, among others, the following factors:
a. relationship Between the-dependent and the non-citizen;
b. traditional and customary relationships;
c. residence of the dependent;
d. financial support of the-dependent by the non-citizen; arid
e. length of time that the noncitizen has supported the dependent:
4.15. For the purposes of Section 303(n)(2), "bona fide marriage" means a marriage which has been entered into for a reason or purpose other than for the purpose of the non-citizen spouse to engage in business within the State. In determining whether a marriage is a bona fide marriage, the Director shall take into account, among others, the following factors:
a. whether the citizen and non-citizen are residing together;
b.
whether the citizen and non-citizen have been married in a manner
recognized by the State;
c. whether the citizen's family and clan recognize the marriage;
d. whether the citizen and non-citizen have children together;
e. whether the non-citizen supports the citizen;
f. whether the non-citizen was residing in the State before the marriage;
g. whether the non-citizen's skill or knowledge is necessary for the
operation of the business;
h.
whether the citizen operated the business prior to the marriage to the
non-citizen;
i.
whether the citizen and non-citizen were married prior to taking up
residence in the State;
j.whether the noncitizen operated the business prior to the marriage of
the citizen;
k.
whether the non-citizen applied for a Yap State Foreign Investment Permit
prior to the marriage to the citizen; and
L. whether the non-citizen is involved in the management of the business.
A non-citizen who has no economic involvement, i.e. management, investment, or a beneficial share of profits in a citizen spouse's business will not be required to obtain a Yap State Foreign Investment Permit. It is within the Director's discretion to determine whether a non-citizen has an economic involvement in a citizen spouse's business.
Part II
Investment Categories and Criteria
5.1. The economic sectors in which investment by non-citizens is prohibited are:
a. Manufacture or import of nuclear or of toxic materials and wastes;
b. Manufacture of weapons and ammunitions;
c. Commercial export of reef fish; and
d. Any
activity which is injurious to the health and welfare of the citizens or
environment of Yap State.
5.2. For the purposes of Section S.l.c., "reef fish" includes any living organism, including, but not limited to, live reo?'and coral, within 12 nautical miles from any island baseline or within one nautical mile of any submerged reef. It is within the Director's discretion to deny a Yap State Foreign Investment Permit for commercial fisheries beyond 3 miles but within 12 miles of any island baseline which are deemed damaging to the reefs and dangerous to fish species other than those intended to be caught. Any action related to S. l .c above between 0-3 miles is specifically prohibitied to a noncitizen. State sponsored and State sanctioned projects shall be deemed exempt from this provision. The use of chemicals and/or explosive devises for the purpose of harvesting fish or other living things from the ocean is prohibited.
5.3. For the purposes of Section S.l.d., in determining whether an activity is injurious to the health and welfare of the citizens or environment of Yap State, the Director shall take into account, among other things, the following:
a. the nature of the product which will be produced;
b. any
by-products which will be produced by or occur as a result of the
activity;
c. the size of the investment;
d. the intended duration of the investment;
e. the degree of utilization of citizen labor
f. the impact on public infrastructure;
g. the financial viability of the activity;
h. the
exploitation of naturafresources within the\ State and whether such
exploitation will pose a threat to the ecological integrity of the area in
which the exploitation is intended to take place; and
i. the long-term impact on the State
Part III
Violations of FSM Foreign Investment Act
6.1. If the Director or a member of his staff receives a complaint that a business or individual within the State is or may be operating or attempting to commence operation of a business which is included on the National Red List in violation of the FSM Foreign Investment Act of 1997, the Director shall take the following action:
a. ascertain the identity of the individual or entity which is lodging the complaint;
b. ascertain the identity of the individuals) or entity(s) which is or may be engaging in the complained of activity in violation of the FSM Foreign Investment Act of 1997;
c. ascertain from the complainant thtr'type of business which is the subject matter of the complaint;
d. ascertain from the complainant whether the business has commenced operations;
e. if it is alleged that the business has commenced operations, ascertain from the complainant when the business commenced operations;
f. ascertain the location at which the complained of activity is occurring;
g. the Director or his designee shall inform the FSM Secretary of
Economic Affairs and
the FSM Secretary of the Department of Justice in
writing of the
complaint received pertaining to the possible violation of the
FSM Foreign
Investment Act of 1997 and shall forward the information
obtained in Sections
6.1.a. through 6.1.f. to the Secretaries; and
h. a written record of the complaint received pertaining to the possible violation of the FSM Foreign Investment Act of 1997 and of the communications to the FSM Secretary of Economic Affairs and FSM Secretary of the Department of Justice shall be maintained by the Director.
6.2. If the Director or any member of his staff obtains information or knowledge that a business or individual within the State is or may be operating or attempting to commence operation.-of a business which is included on Internaational Red List or in violation of the FSM Foreign Investment Act of 1997,-,the Director shall take the following steps:
a. identify the manner in which the knowledge or information was obtained;
b. ascertain the identity of the individuals) or entity(s) which is or may
be engaging in business activity in
violation of the FSM Foreign Investment
Act of 1997;
c. identify the type of business;
d. ascertain whether the business has commenced operations;
e. if the
business has commenced operations, ascertain when the business commenced
operations;
f. ascertain the location at which the business activity is occurring;
g. the Director or
his designee shall inform the FSM Secretary of Economic Affairs and the
FSM Secretary of the Department of Justice in writing of the knowledge or
information obtained pertaining to the possible violation of the FSM
Foreign Investment Act of 1997 and shall forward the information obtained
in Sections 6.2.a. through 6.2.f. to the Secretaries; and
h. a
written record of the knowledge or information obtained pertaining to the
possible violation of the FSM Foreign Investment Act of 1997 and of the
communications to the FSM Secretary of Economic Affairs and the FSM
Secretary of the Department of Justice shall"'6e maintained by the
Director.
Part IV
Foreign Investment Permit Requirements and Procedures
7.1. The following are the categories of Yap State Foreign Investment Permits:
a. Full-time Business. This Permit is for a non-citizen who wishes to engage in business within the State as an on-going operation. Schedule 1 to these Regulations prescribes the application form which must be used to apply for a Section 7.1.a. Yap State Foreign Investment Permit. All applications for a Section 7.l .a. Yap State Foreign Investment Permit must be accompanied by a non-refundable application fee of USD $250.00. An application for a Yap State Foreign Investment Permit shall not be accepted by the Director unless accompanied by the application fee.
b. Occasional Sale. This Permit is for a non-citizen who wishes to engage in business within the State for one day or for one event. A Section 7.1.b. Yap State Foreign Investment Permit may be issued by the Director for more than one date for events such as Yap Day and United Nations Day if such events have been scheduled by Yap State officials to take place over more than one day. A Section 7.1.b. Yap State Foreign Investment Permit shall only be valid for the dates stated on said Permit. If a Section 7.l .b. Yap State Foreign Investment Permit has been issued for an event such as Yap Day or United Nations Day and the event is cancelled by its sponsors, said cancellation shall act as an automatic cancellation of the Section 7.1.b. Permit. If said event is rescheduled to a later date by its sponsors, the Section 7.l .b. Yap State Foreign Investment Permit shall be automatically reinstated for the rescheduled date. A Section 7.1.b. Yap State Foreign Investment Permit is only valid for the person whose name is stated on the Permit. A Section 7.l .b. Yap State Foreign Investment Permit may not be issued for more than one person. A person is only eligible for one Section 7. l.b. Yap State Foreign Investment Permit in any three month period. Any person holding a valid Section 7.1.b Yap State Foreign Investment Permit may not transfer it to another person for the purpose of conducting business. At the discretion of the Director, any person doing so is subject to the loss of privilege for future Section 7. l .b Foreign Investment permits for a period of up to 1 year, fine, or both. Schedule 2 to these Regulations prescribes the application form which must be used to apply for a Section 7.1 .b. Yap State Foreign Investment Permit: All applications for a Section 7.1.b. Yap State Foreign Investment Permit must be accompanied by a non-refundable application fee of USD $25.00. All applications for a Section 7.l .b. Yap State Foreign Investment Permit shall be submitted to the Director ten (10) business days prior to the date for which the Permit is to be issued. An application for a Section 7.1.b. Yap State Foreign Investment Permit shall not be accepted by the Director unless accompanied by the application fee.
c. Foreign Aid, Class 1. This Permit is for a non-citizen who wishes to engage in business within the State for less than seven days and the proceeds generated from said business operations shall be donated to the State, or an agency or department thereof. It is solely within the Director's discretion to grant a Section 7.1.c. Yap State Foreign Investment Permit. A Section 7.1.c. Yap State Foreign Investment Permit shall only be valid for the dates stated on said Permit. A Section 7.1.c. Yap State Foreign Investment Permit is only valid for the person whose name is stated on the Permit. A Section 7.1.c. Yap State Foreign Investment Permit may not be issued for more than one person. Within one business day of the expiration of the Section 7.1.c. Yap State Foreign Investment Permit, the permit holder shall submit a report to the Director of the amount of funds generated, the amount donated to the beneficiary entity specified on the application, and evidence of said donation, i.e. copy of check or written acknowledgment of receipt from beneficiary entity. Schedule 3 to these Regulations prescribes the application form which must be used to apply for a Section 7. I.c. Yap State Foreign Investment Permit. There is no application fee for a Section 7. l.c. Yap State Foreign Investment Permit. If, however, the required report is not submitted to the Director, the Director shall impose a nonrefundable fee of $50.00. All applications for a Section 7.1.c. Yap State Foreign Investment Permit shall be submitted to the Director ten business days- prior to the date for which the Permit is to be issued.
d. Foreign Aid Class 2. This Permit is for a non-citizen who will engage in business within the State either as part of a foreign aid project which is funded, in part, by a foreign government, or as part of a State funded Capital Improvement Project. If the non-citizen engages in business within the State for purposes other than a foreign aid project or a State Capital Improvement Project, the non-citizen is not eligible for a Section 7. I.d. Yap State Foreign Investment Permit, but must obtain a Section 7.1.a. or Section 7.1.b.Yap State Foreign Investment Permit, whichever is applicable. Schedule 4 to these Regulations prescribes the application form which must be used to apply for a Section 7.1.d. Yap State Foreign Investment Permit. There is no application fee for a Section 7. I.d. Yap State Foreign Investment Permit and the permit shall be valid for the duration of the project: All applications for a Section 7.1.d. Yap State Foreign Investment Permit shall be submitted to the Director ten business days prior to the project start date.
e. Independent Contractor/Consultant. This Permit is for a non-citizen who has executed a contract for a specific project with the State of Yap or the FSM or an agency or subdivision thereof as an independent contractor or consultant. The subject matter of the contract must be related to the purpose and/or obligations of the signatory government or agency or subdivision thereof. It is within the Director's discretion to determine whether the contract meets these requirements. If the noncitizen engages in business within the State for purposes other than as an independent contractor or consultant for the signatory government or agency or subdivision thereof, the non-citizen is not eligible for a Section 7. 1. e. Yap State Foreign Investment Permit, but must obtain a Section 7.1.a. or Section 7. 1. b. Yap State Foreign Investment Permit, which ever is applicable. A non-citizen is eligible for one Section 7.1.e. Yap State Foreign Investment Permit for a period of one year or for the duration of the contract for which it is granted. Schedule S to these Regulations prescribes the application form which must be used to apply for a Section 7. 1.e. Yap State Foreign Investment Permit. There is no application fee for a Section 7.1.e. Yap State Foreign Investment Permit. A copy of the applicant's contract must be attached to the application at the time of submission. All applications for a Section 7.1.e. Yap State Foreign Investment Permit shall be submitted to the Director ten business days prior to the project start date.
7.2. All Yap State Foreign Investment Permits are personal and may not be transferred to another person or entity under any circumstances.
7.3. On the application form for a Yap State Foreign Investment Permit, the applicant must identify at least one person who is a resident of the State who is designated an agent of the applicant for service of process. An applicant who is a resident of the State of Yap may designate themself as agent for service of process on their application for a Yap State Foreign Investment Permit.
7.4. An applicant must submit an original application for a Yap State Foreign investment Permit and five (5) copies to the Director: If the application is submitted in person, it shall be submitted to the Director at the Offices of the Division of Commerce and Industry during normal business hours. If the application is submitted by mail, it shall be addressed to the Director at P.O. Box 336, Colonia, Yap FM 96943.
7.5. An application for a Yap State Foreign Investment Permit shall be deemed submitted to the Director when the application and application fee are both received by the Director.
7.6. The Director may require an applicant to submit information in addition to the information requested on the application. In determining whether additional information should be requested, the Director shall take into account, among others, the following factors:
a. whether the business
activity will have a substantial impact upon the environment of the
State;
b. whether the applicant
has been directed or ordered to cease operations in another
jurisdiction;
c. whether the applicant
has declared bankruptcy, had a receiver appointed, or made a transfer of
assets for the benefit of creditors within the last five
years;
d. whether the applicant
or an offfcer or director of an applicant has been convicted of a crime of
moral turpitude;
e. whether the business
activity will have a substantial impact upon the health and/or welfare of
the residents of the State;
f. whether the applicant
or an officer or director of an applicant has engaged in fraudulent
activity within the State or in another jurisdiction; and
g. whether the applicant
has violated the provisions of Section 7. 1.b., Section 7. l.c., Section
7.l .d., or Section 7. 1. e.
7.7. There is no limit to the number of times an
applicant may modify and resubmit an application for a Yap State Foreign
Investment Permit. Upon resubmission of an application for a Section 7.
1.a. Yap State Foreign Investment Permit which contains a substantial
modification, the applicant shall submit a non-refundable application fee
of USD $50.00. The resubmitted application for a Section 7. 1.a. Yap State
Foreign Investment Permit shall be deemed to be a new application for the
purposes of Section 8.2 of these Regulations. There shall be no fee for
the resubmission of an application for Section 7. 1.b., Section 7.1 .c.,
Section 7.1.d., or Section 7.1.e. Yap State Foreign Investment Permit. The
resubmitted application for a Section 7.1 .b, Section 7.1.c, Section
7.1.d. or Section7.1.e. Yap State Foreign Investment Permit shall be
deemed to be anew application for the purposes of Section 8.1 of these
Regulations.
7.8. For the purposes of Section 307(g) of the Act,
"substantial modification" of the application means the submission of new
or additional information which new or additional information would
not be deemed to be clerical in nature. The determination of whether
the application has been substantially modifies is within the Director's
discretion. to determining whether a resubmitted application contains a
substantial modification, the Director shall consider, among others, the
following factors:
a. whether the Director
requested additional information from the applicant;
b. whether the Director
deemed the application to contain insufficient information to make the
determination required in Section 8.2.a. of these
Regulations;
c. whether the applicant
submitted additional information after the denial of the application for a
Section 7.1.a. Yap State Foreign Investment Permit;
d. whether the applicant
has requested to correct information on the application due to
typographical error or oversight;
e. whether the applicant
has changed the business activity for which he originally applied for a
Section 7.1.a. Yap State Foreign Investment Permit; and
f. whether the application
indicates a change in number and/or identity of the investors or
applicant.
Example 1: The applicant
failed to attach the partnership agreement to the application. In all
other respects the application was complete. The resubmission of the
application with the partnership agreement attached would not be
considered a substantial modification of the application.
Example 2: The applicant's
original application sought a Yap State Foreign Investment Permit for a
retail store. The applicant resubmits the application seeking a Yap State
Foreign Investment Permit for a hotel complex. The resubmission of the
application seeking a Permit for a different business activity would be
considered a substantial modification of the application.
7.9. For the purposes of applying for a Section 7. La.
Yap State Foreign Investment Permit, a holder of a FSM Foreign Investment
Permit which on its face expires after August 31, 1999, is required to
file an annual report and an annual filing fee to the Director as
prescribed in Section 11.3 and Section_31.1(a) of these Regulations. A
copy of the existing FSM Foreign Investment shall be attached to the
annual report at the time of filing. Said annual report and annual filing
fee shall be submitted to the Director no later than October 1,1999. All
FSM Foreign Investment Permits governed by this Section shall-expire
on
October 1,
1999.
7.10. For the purposes of applying for a Section 7. 1.a.
Yap State Foreign
Foreign
Investment Permit, a holder of a FSM Foreign Investment Permit
which
on its face
expires on or before August 31, 1999, is required to submit
an
application
form and an application fee to the Director as prescribed in
Section
7.1.a. and
Section 11.1.a. of these Regulations. A copy of the existing
FSM
Foreign
Investment Permit shall be attached to the application form at the time
of
filing. Said
application form and application fee shall be submitted to the
Director
no later than
September 1, 1999. All FSM Foreign Investment Permits
governed
by this
Section shall expire on September 1, 1999.
8.1. Subject to the provisions of Section 8.3. below,
the following time periods will apply to the Director's review of an
5pplication for a Section 7.1.b., Section 7.1.c., Section 7.1.d., and
Section 7.1.e. Yap State Foreign Investment Permit:
a. Within 5 business days of an application for Section
7.1.b., Section 7.1.c., Section 7.1.d., or Section 7.1.e.Yap State Foreign
Investment Permit being submitted to the Director, the Director will
either issue the Yap State Foreign Investment Permit or deny the
application.
b. The Director shall inform the applicant in writing of
the reason(s) for the denial of the Yap State Foreign Investment Permit
within 1 business day of the denial of said application.
8.2. Subject to the provisions of Section 8.3 below, the
following time periods will apply to the Director's review of an
application for a Yap State Foreign Investment Permit:
a. Within 5 business days
of an application for a Section 7.1.a. Yap State Foreign Investment Permit
being submitted to the Director, the Director or his designee will
determine whether the business activity which is listed in the application
form is (i) a prohibited investment as defined in Section 305(a) of the
Act or Section 5 of these Regulations, (ii) a permitted investment, or
(iii) an investment in an economic sector which is regulated by the FSM
Government.
b. If the Director or his
designee determines that the application for a Section 7.1.a. Yap State
Foreign Investment Permit is incomplete or does not provide sufficient
information for the Director to make the-determination required in
Section_8.2.a., the Director or his designee will within 5 business days
of the application being submitted to the Director, notify the applicant
in writing that the Director requires additional information before a
determination can be made as to whether a Yap State Foreign Investment
Permit should be issued and shall inform the applicant of the additional
information which is necessary before a determination on the application
can be made. The Director's written notice shall state a date by which the
applicant must submit the required additional information. Failure to
submit the required additional information by the date set forth in the
Director's notice shall be deemed to be a withdrawal of the application by
the applicant.
c. The Director shall deny
an application if the Director has determined that the application relates
to foreign investment in a prohibited economic sector and will notify the
applicant of the denial of the application within 1 business day after the
determination is made that the application relates to an investment in a
prohibited economic sector.
d. As an
additional service to thepplicant of a Yap State Foreign Investment
Permit, if the application relates to a permitted economic sector, the
Director, at the request of the applicant, will within 5 business days of
determining that the application relates to a permitted economic sector,
refer the application to all appropriate State agencies and departments
for determination as to any additional laws and/or regulations with which
the applicant must comply before commencing business within the State. For
example: an application for a business activity which will have a
substantial environmental impact would be referred to the Yap State
Environmental Protection Agency; an application for a business related to
fisheries would be referred to the Division of Marine Resources and to the
Yap Fishing Authority. An agency to which the application for a Yap State
Foreign Investment Permit is referred will have 10 business days from the
date of referral to provide the requested information to the Director. The
Director shall forward the information provided by any agency or
department to the applicant within 2 business days of the Director's
receipt of the information from the agency.
e. Within S business days
after the determination has been made that the application is complete and
refers to a permitted business sector, the Director will issue a Yap State
Foreign Investment Permit. The Director may impose limitations and
conditions up on the Yap State Foreign Investment Permit if the Director
deems that such limitations and conditions are appropriate. Any
limitations or conditions which are imposed by the Director shall be
specifically stated on the face of the Yap State Foreign Investment
Permit. The Director shall mail the original Yap State Foreign Investment
Permit to the applicant at the address which is provided on the
application for the Yap State Foreign Investment
Permit.
The Director shall maintain a copy of the Yap State Foreign Investment
Permit and shall forward copies of the Yap State Foreign Investment Permit
to the State Registrar of Corporations, the State Business Licensing
Board, and the FSM Department of Economic Affairs or their respective
successors.
f. If the Director
determines that a Yap State Foreign Investment Permit should not be
issued, the Director shall notify the applicant in writing that a Yap
State Foreign Investment Permit shall not be issued. The Director shall
inform the applicant in writing of the reasons for the denial of a Yap
State Foreign Investment Permit. The notice of denial shall inform the
applicant of his right to submit a request for reconsideration of the
Director's denial df a Yap State Foreign Investment Permit and shall
inform the applicant of the procedures for said request
for,reconsideration, including, but not limitecl to, the date by which the
written request for reconsideration must be submitted to the Director. An
applicant may request reconsideration of the Director's denial of a Yap
State Foreign Investment Permit within 30 days of the date of denial by
submitting a written request for reconsideration to the Director at the
Department of Resources & Development. A request for reconsideration
shall be in writing, shall state the reasons why the applicant believes
that a Yap State Foreign Investment Permit should be issued, and shall
state facts and/or documentation supporting those reasons. The Director
will within 30 days of receipt of the request for reconsideration either
grant or deny the request for a Yap State Foreign Investment Permit and
shall inform the applicant in writing of his decision. If the applicant
submits new or additional information as part of his request for
reconsideration, the request for reconsideration shall be deemed to be a
substantial modification of the application and shall be subject to the
process set forth in Section 7.6 of these Regulations.
g. If the Director
determines that the application relates to foreign investment in an
economic sector which is regulated by the FSM, the Director shall forward
the application for a foreign investment permit to the Secretary and shall
notify the applicant of such action within 2 business days of the
determination that the application relates to an economic sector regulated
by the FSM.
8.3. If it is impossible for the Director to take action
on an application within the time periods prescribed in Section 8.1
and Section 8.2; the Director shall, by written notice, inform the
applicant of that fact within 1 business day after the expiration of the
prescribed period and shall indicate (a) why the-action could not be taken
within the prescribed period and (b) a specific date (no later than 10
business days from the date of the written notice) by which the Director
will take action.
8.4. The Director shall maintain a record of all
applications submitted for a Yap State Foreign Investment Permit, of all
action taken on said applications, of all information by any agency or
department pertaining to the application, of all communications with the
applicant, and of all communications with the FSM Department of Economic
Affairs.
Section 9: Denial
of Foreign Investment Permit and Imposition of Conditions on a Foreign
Investment Permit
9.1. The Director reserves the right to deny an
application for a Yap State Foreign Investment Permit for the following
reasons:
a. the applicant has been
convicted of a crime of moral turpitude;
b. the applicant has lied
or otherwise falsified information on the application for a Yap State
Foreign Investment Permit;
c. the applicant has been
requested to leave another jurisdiction based upon activity which is
fraudulent or criminal even if there has been no criminal conviction;
and
d. the applicant is
engaging in criminal activity in any jurisdiction.
The above list
is illustrative and is not to be deemed exclusive. The Director, however,
may only deny an application for a Yap State Foreign Investment Permit for
cause.
9.2. In granting a Yap State Foreign Investment Permit
or renewing any Yap State Foreign Investment Permit, the Director may
impose conditions and restrictions on the applicant's activities within
the State if the Director deems that such conditions and restrictions are
appropriate. In determining whether to impose conditions and restrictions
on the applicant's activities, the Director shall take into account, among
others, the following factors:
a. the nature of the
proposed business activity, i.e. whether the proposed business activity
may pose a danger to the public health or to the environment;
b. whether the activity
requires a license in addition to a Yap State Business License, i.e.
medical license, license to practice law; and
c. the location at which
the proposed business activity will take place.
10.1. Yap State Foreign Investment Permits shall take
the form prescribed in Appendix A.
10.2. Any restrictions or conditions on the pemnit
holder's activities within the State shall be specifically stated on the
face of the Yap State Foreign Investment Permit issued to the
holder.
10.3. If the permit holder's annual report indicates
areas of investment not contained in the permit holder's application for a
Section 7.1.a. Yap State Foreign Investment. Permit, the Director may upon
the annual renewal of the permit holder's Section 7.1 .a. Yap State
Foreign Investment Permit impose restrictions or conditions pertaining to
the permit holder's new investment activities within the State. If the
Director imposes such restrictions or conditions, the Director shall
notify the permit holder in writing of such limitations and conditions
within 15 days of the permit holder's submission of his ann al
report.
10.4. The name and address of the resident of the State
who has been designated as agent of the permit holder for service of
process shall be specifically stated on the face of the Yap State Foreign
Investment Permit.
11.1. A non-refundable application fee shall accompany
an application for a Yap State Foreign Investment Permit. All application
fees shall be made payable to the Yap State Treasury. The nonrefundable
application fee shall be as follows:
a. Section 7.1.a. Yap State Foreign Investment Permit -
USD$250.00;
b. Section 7.1.b. Yap State Foreign Investment
Permit - USD$25.00;
c. Section 7.1.c. Yap State Foreign Investment
Permit - No fee.
d. Section 7.1.d. Yap State Foreign Investment Permit -
No fee.
e. Section 7.1.e. Yap State Foreign Investment Permit -
No fee.
11.2. Anon-refundable application fee of USD $50.00
shall accompany the resubmission of a substantially modified application
for a Section 7.1a. Yap State Foreign Investment Permit. The
non-refundable application fee shall be made payable to the Yap State
Treasury.
11.3. An annual fee shall be- made payable to the Yap
State Treasury by every holder of a Section 7.1.a. Yap State Foreign
Investment Permit. The annual fee shall be USD$25.00. The non-refundable
annual fee shall be paid on or before October 1 st of each year. An annual
fee shall not be paid upon the issuance of a Yap State Foreign Investment
Permit, but shall be paid on the next October 1 st. A person who has
applied for a Section 7.1.a. Yap State Foreign Investment Permit on or
before October 1, 1999, and has paid the prescribed application fee
pursuant to Section 7.9., Section 7.10., or Section 11.1., shall not be
required to pay an annual fee pursuant to this Section until October 1,
2000.
12.1. Upon payment of the annual fee, confirmation that
all State and FSM taxes and fees are paid to date, submission of evidence
of a valid Yap State Business License, and submission of an annual report
required by Section 31.1.a of these Regulations, the Section 7.l .a. Yap
State Foreign Investment Permit shall be renewed automatically, with no
further documentation necessary either by the holder of the Yap State
Foreign Investment Permit or by the Director.
12.2. If a holder of the Section 7.1.a. Yap State
Foreign Investment Permit fails to submit the annual fee, a sworn
statement that all State and FSM taxes and fees are paid to date, evidence
of a valid Yap State Business License, or an annual statement, the Yap
State Foreign Investment Permit shall not be automatically
renewed.
12.3. The Director may decline to automatically renew a
Section 7.1.a. Yap State Foreign Investment Permit for, among others, the
following reasons:
a. The Director has
determined that the application for said Yap State Foreign Investment
Permit contained false or fraudulent information.
b. The permit holder has
engaged in fraudulent behavior or has otherwise attempted to bribe or
influence a State or FSM employee.
c. The permit holder has
failed to comply with conditions or restrictions on the Yap State Foreign
Investment Permit.
d. The permit holder or
the permit holder's manager, officers, or directors have been convicted of
a crime of moral turpitude or have such criminal charges pending against
them in any jurisdiction,
e. The permit holder has
filed for bankruptcy, had a receiver appointed to conduct the affairs of
the business, or has made an assignment of assets for the benefit of
creditors in the State or in another jurisdiction.
f. The permit holder has
failed to satisfy a final, non-appealable judgment entered against it by a
court of competent jurisdiction.
g. The permit holder has
failed to pay the State and FSM taxes and fees which it owes as said taxes
and fees become due.
h. The permit holder has
failed to comply with the Act or with these Regulations.
12.4 If the Section 7.1.a. Yap State Foreign Investment
Permit has not been automatically renewed for any of the reasons
enumerated in Section 12.2 of these Regulations, the Director shall take
the following action:
a. The Director shall
notify the permit holder in writing before October 15th that the permit
holder's Section 7.1.a. Yap State Foreign Investment Permit has not been
automatically renewed. Said notice shall state the reasons why the permit
holder's Section 7.1.a. Yap State Foreign Investment Permit was not
automatically renewed and shall inform the permit holder of the action
necessary for renewal of said Yap State Foreign Investment Permit. Said
notice shall demand surrender of the Yap State Foreign Investment Permit
within thirty days of the date of the notice if the permit holder does not
take the action necessary to renew the Section 7.1.a. Yap State Foreign
Investment Permit.
b. If the permit holder
completes the action necessary to renew the Section 7.1.a. Yap State
Foreign Investment Permit by the date set forth in the Director's notice
and the Director's notice of non-renewal was not a notice pursuant to
Section 12.3 of these Regulations, the Director shall renew said Yap State
Foreign Investment Permit.
c. If the permit holder
fails to complete the action necessary to renew the Section 7.1.a. Yap
State Foreign Investment Permit by the date set forth in the Director's
notice, said inaction shall be deemed to be notice of the permit holder's
intent to surrender the Section 7.1.a. Yap State Foreign Investment
Permit, and the Director and permit holder shall follow the procedure for
the surrender of a Section 7.1.a. Yap State Foreign Investment Permit as
set forth in Section 14 of these Regulations.
d. If the permit holder
believes that he has complied with all requirements for the automatic
renewal of his Section 7.1.a. Yap State Foreign Investment Permit, the
permit holder shall submit evidence of such compliance to the Director
within 30 days of the date of the Director's notice of non-renewal. If the
evidence submitted by the permit holder establishes compliance with all of
the requirements for automatic renewal and the Director's notice of
non-renewal was not a notice pursuant to Section 12.3 of the Regulations,
the Director shall renew the permit holder's Section 7.1.a. Yap State
Foreign Investment Permit.
e. If the Director
determines that the evidence submitted by the permit holder in Section
12.4.d. is not sufficient to establish compliance with all of the
requirements for automatic renewal of the Section 7.1.a. Yap State Foreign
Investment Permit, the Director shall within 5 business days of the
submission of said evidence by the permit holder inform the permit holder
in writing that renewal has been denied. The Director's notice shall state
the reasons) that the Director has denied renewal and inform the permit
holder of his right to a hearing pursuant to Section 16 of these
Regulations. If the permit holder does not request a hearing, said
inaction shall be deemed to be notice of the permit holder's intent to
surrender the Section 7.1.a. Yap State Foreign Investment Permit, and the
Director and permit holder shall follow the procedure for the surrender of
a ,Section 7.1.a. Yap State Foreign Investment Permit as set forth in
Section 14 of these Regulations.
12.5. If the Section 7.1.a. Yap State Foreign Investment
Permit has not been automatically renewed pursuant to Section 12.3 of
these Regulations, the Director shall take the following
action:
a. The Director shall
notify the permit holder in writing before October 15th that the permit
holder's Section 7.1.a. Yap State Foreign Investment Permit has not been
automatically renewed. Said notice shall state the reasons why the permit
holder's Section 7.1.a. Yap State Foreign Investment Permit was not
automatically renewed and shall inform the permit holder of the action
necessary for renewal of said Section 7.1.a. Yap State Foreign Investment
Permit. Said notice shall demand surrender of the Section 7.1.a. Yap State
Foreign Investment Permit by a certain date if the permit holder does not
take the action necessary to renew the Section 7.1.a. Yap State Foreign
Investment Permit.
b.
If the permit holder completes the action necessary to renew the Section
7.1.a. Yap State Foreign Investment Permit by the date set forth in the
Director's notice, the Director shall renew said Yap State Foreign
Investment Permit.
c. If the permit holder
fails to complete the action necessary to renew the Section 7.l .a. Yap
State Foreign Investment Permit by the date set forth in the Director's
notice, said inaction shall be deemed to be notice of the permit holder's
intent to-surrender the Section 7.1.a. Yap State Foreign Investment
Permit, and the Director and permit holder shall follow the procedure for
the surrender of a Section 7.1.a. Yap State Foreign Investment Permit as
set forth in Section 14 of these Regulations.
d. If through the
non-automatic renewal of the permit holder's Section 7.1.a. Yap State
Foreign Investment Permit the Director is seeking to suspend or cancel
said Section 7.1.a. Yap State Foreign Investment Permit, in addition to
the requirements set forth in Section 12.5, the Director shall fulfill the
requirements set forth in Section 13 of these Regulations.
12.6. Upon receipt of a permit holder's sworn statement
that all State and FSM taxes and fees have been paid, the Director shall
verify that such statement is correct with the appropriate authorities,
including, but not limited to, State Tax and Revenue, FSM Finance, FSM
Customs, and FSM Social Security. If the appropriate authorities inform
the Director that all taxes and fees have not been paid by the holder of a
Section 7.1.a. Yap State Foreign Investment Permit, the ,Director shall
commence proceedings to suspend or cancel the holder's Section 7.1.a. Yap
State Foreign Investment Permit.
13.1. The Director may suspend or cancel a Yap State
Foreign Investment Permit for any of the reasons set forth in Section
308(e) of the Act or for a violation of these Regulations.
13.2. If pursuant to Section 308(e)(2) of the Act, the
holder of a Section 7.1.a. Yap State Foreign Investment Permit seeks its
cancellation, the Director and the permit holder shall follow the
procedures set forth in Section 14 of these Regulations.
13.3. If pursuant to Section 308(e)(2) of the Act, the
holder of a Section 7.1.b., Section 7.1.c., Section 7.1.d., or Section
7.1.e. Yap State Foreign Investment Permit seeks its cancellation, the
Director shall automatically cancel the Section 7.1.b., Section 7.1.c.,
Section 7.1.d, or Section 7.1.e. Yap State Foreign Investment
Permit.
13.4. If the Director determines that a violation of the
Act or of these Regulations exist, the Director shall, within 3 business
days of making said determination, inform the holder of the Yap State
Foreign Investment Permit in writing of the violation--of the Act or of
these Regulations. Said written-notice shall state a date by which the
violation must be remedied. If the permit holder fails to remedy the
violation by the date set forth in the Director's notice, the Director
shall commence proceedings to suspend or cancel the Yap State Foreign
Investment Permit.
13.5. If the holder of the Yap State Foreign Investment
Permit denies that a violation of the Act or of these Regulations exist,
the permit holder may submit written evidence of compliance with the Act
and Regulations to the Director by the date set forth in the Director's
notice or may request a hearing as set forth in Section 16 of these
Regulations.
13.6. If, after a hearing has been held pursuant to
Section 308(g) of the Act and Section 16 of these Regulations, the hearing
officer determines that the non-citizen's Yap State Foreign Investment
Permit should be suspended or canceled, the Director shall issue a written
notice to the noncitizen stating that the Yap State Foreign Investment
Permit has been suspended or canceled.
a. If the Yap State Foreign Investment Permit has been
suspended, the written notice of suspension shall state the
following:
(i)
the reason for the suspension;
(ii)
the length of the suspension, including the date on which the non-citizen
may recommence engaging in business;
(iii)
that the non-citizen must immediately cease engaging in
business;
(iv)
how the non-citizen's ownership interest should be transferred during the
suspension period. If the non-citizen's investment is one which by its
nature must continue through the suspension period or the business will
cease all future operations, the Director may appoint a temporary receiver
to operate the business and order the receiver paid from the proceeds of
the business;
(v)
all fines or other penalties which have been imposed, including the date
by which the fines must be paid or other penalties must be
satisfied;
(vi)
the non-citizen's right to appeal, including, the date by which the appeal
must be filed; and
(vii)
any other condition or restriction which the Director is imposing upon the
non-citizen or any other information which the Director deems
appropriate.
b. If the Yap State Foreign Investment Permit has been
canceled, the written notice of cancellation shall state the
following:
(i)
the reason for the cancellation;
(ii)
the effective-date of the cancellation;
(iii)
that the non-citizen must immediately cease engaging in business or the
date by which the non-citizen must cease to engage in
business;
(iv)
the methods by which the non-citizen may dispose of his
ownership
interest;
(v)
the date by which the non-citizen must dispose of his ownership
interest;
(vi)
whether or what portion of the non-citizen's ownership interest in the
business entity or the assets of the business entity, including sale
proceeds from the sale of the non-citizen's ownership interest, must be
held for the benefit of creditors;
(vii)
whether or what portion of the non-citizen's ownership interest in the
business entity or the assets of the business entity, including sale
proceeds from the sale of the non-citizen's ownership interest, is
forfeited to the State;
(vii)
all fines or other penalties which have been imposed, ,including the date
by which the fines must be paid or other penalties must be
satisfied;
(ix)
the non-citizen's right to appeal, including, the date by which the appeal
must be filed; and
(x)
any other condition or restriction which the Director is imposing upon the
non-citizen or any other information which the Director deems
appropriate.
13.7. In directing the non-citizen to dispose of his
ownership interest in a business entity, the Director may order the
non-citizen to take any one or more of the following actions or the
Director may take any one or more of the following actions:
a. Sell or otherwise
transfer the non-citizen's ownership interest in the business entity to an
FSM citizen or to a non-citizen holding a valid Section 7.1.a. Yap State
Foreign Investment Permit. Prior to selling or transferring any assets to
a non-citizen, the Director must specifically consent, in writing, to the
sale or transfer to that non-citizen.
b. Transfer the
non-citizen's ownership interest to a trust which is administered by a
third-party.
c. Auction the
non-citizen's ownership interest in a public auction.
d. Appoint a receiver to
manage or wind-up the business affairs of the-non-citizen. A non-citizen
whose Yap State Foreign Investment Permit has been canceled may not act as
a receiver during the winding-up of his own business
affairs.
13.8. In fulfilling his duties as set forth in Sections
13.6 and 13.7 of these Regulations, the Director shall make all reasonable
efforts to balance the need to protect the State's interest and the
welfare of the general public with the interest of those individuals who
have an ownership interest in the same business entity as the non-citizen.
The Director shall also take reasonable steps to maintain the value of the
non-citizen's ownership interest during the period prior to the
disposition of said ownership interest and shall take reasonable steps to
maximize the value received upon disposition of the non-citizen's
ownership interest. The Director shall not be liable for any diminution in
the value of the non-citizen's investment.
14.1. The holder of a Section 7.1.b., Section 7.1.c.,
Section 7.1.d., or Section 7.1. e. Yap State Foreign Investment Permit
shall surrender the original Yap State Foreign Investment Permit to the
Director within 2 business days of the expiration of said Yap State
Foreign Investment Permit. If a holder fails to surrender said original
Yap State Foreign Investment Permit, said,.holder shall not be eligible
for another Yap State Foreign Investment Permit of any class until said
original Permit is surrendered.
14.2. A holder of a Section 7.1.a. Yap State Foreign
Investment Permit, who intends to surrender said Section 7.1.a. Yap State
Foreign Investment Permit shall do the following:
a. The holder of a Section
7. 1.a. Yap State Foreign Investment Permit shall surrender the original
Section 7.1.a. Yap State Foreign Investment Permit to the Director at
least 60 calendar days prior to the date on which the holder intends to
cease engaging in business within the State and shall submit the following
documentation to the Director at the time of surrender of said Section
7.1.a Yap State Foreign Investment Permit:
(i)
A sworn statement that all taxes and fees due and owing to the State and
to the FSM have been paid in full and shall attach copies of actual tax
and fee filings;
(ii)
A current financial statement, which financial statement shall list all
debts owed and all accounts receivable, including the name and address of
the entity to which the debt is owed and amount owed or the name and
address from whom the debt is owed and the amount due;
(iii)
A statement listing all pending and threatened litigation, both criminal
and civil, with an estimate of the maximum fine, penalty, or judgment
which could be imposed against the permit holder or received by the permit
holder. The statement shall list the litigation by caption and include the
name and address of the court in which the litigation is pending and the
name and address of the other parties which have appeared in the
litigation; and
(iv)
A statement of the reasons) for the surrender of the Yap State Foreign
Investment Permit.
b. The holder of a Section
7.1.a.Yap State Foreign Investment Permit shall send a written notice to
all of its creditors that the holder is seeking to surrender its Yap State
Foreign Investment Permit. Said written notice shall include the following
information:
(i)
The name of the permit holder;
(ii)
The names under which the permit holder has or is conducting
business;
(iii)
The location of the business;
(iv)
The mailing address of the business;
(v)
The telephone number and facsimile number of the business;
(vi)
Sufficient information to identify the debt, i.e. account number, loan
number, etc.;
(vii)
Amount of original indebtedness;
(viii)
Amount of the current indebtedness;
(ix)
Date that the holder expects to cease doing business within the State;
and
(x)
Address and telephone number where permit holder can be reached after
close of business.
c. For each case in which
the holder of a Section 7.1.a.Yap State Foreign Investment Permit is a
named party, the permit holder shall send a written notice to the court in
which the case is filed and to each of the other parties which have
appeared in the case or their attorneys stating that the permit holder is
surrendering its Section 7.1.a.Yap State Foreign Investment Permit and
will cease to do business within the State.
d. The holder of a Section
7.1.a. Yap State Foreign Investment Permit shall submit evidence to the
Director that the notices required in Sections 14.1.b. and 14.1.c. have
been mailed to the appropriate individuals or entities.
14.3. The Director shall determine whether any fees,
including fees owed to other State agencies or departments, remain unpaid,
whether any taxes remain unpaid, or whether any other requirements remain
unfulfilled by the holder of the Section 7.1.a. Yap State Foreign
Investment Permit, and shall require the holder to take appropriate action
to fulfill all obligations.
14.4. Within 10 business days of receiving the tender of
a Section 7.1.a. Yap State Foreign Investment Permit, the Director shall
publish notice to the public that the holder of the Section 7.1.a.Yap
State Foreign Investment Permit has tendered surrender of said Permit.
Notice shall be published on the radio and television and in print if
there is a newspaper or newsletter in general circulation within the
State. Notice shall be published for a period of 30 calendar
days.
14.5. The holder of a Section 7.1.a. Yap State Foreign
Investment Permit .who has tendered surrender of said Permit to the
Director shall maintain sufficient assets within the State to pay all
creditors and debts as they come due until the Director has declared that
said Section 7.1.a.Yap State Foreign Investment Permit has been
surrendered.
14.6. If no further outstanding obligations remain and
the 30 day public notice provision of Section 14.4 has expired, the
Vrector shall declare the Section 7.1.a. Yap State Foreign Investment
Permit surrendered and shall so notify, in writing, the permit holder and
the State Registrar of Corporations, the State Business Licensing Board,
the FSM Department of Economic Affairs, and any other relevant State or
FSM agency or their respective successors. Upon receipt of the Director's
notice declaring the Section 7.1.a. Yap State Foreign Investment Permit
surrendered, the permit holder shall immediately cease engaging in
business in the State. A Section 7.1.a. Yap State Foreign Investment
Permit shall not be declared surrendered until all outstanding obligations
have been satisfied.
14.7. If the holder of a Section 7.1.a. Yap State
Foreign Investment Permit is a party to litigation, whether criminal or
civil, pending in the Yap State Court or the Supreme Court of the
Federated States of Micronesia or arising out of its business activities
within the State or is party to an administrative hearing before a Yap
State agency or an agency of the FSM, the Section 7.1.a. Yap State Foreign
Investment Permit shall not be declared surrendered until said litigation
is completed or finally disposed of through court order, settlement, or
compromise, including all appeals. The permit holder shall file with the
Director, documentation evidencing the disposition of the litigation or
hearing, i.e. court order or settlement agreement.
14.8. If the holder of a Section 7.1.a. Yap State
Foreign Investment Permit fails to comply with the requirements of Section
14.2 through Section 14.7, the Director may, in addition to imposing the
fines and penalties set forth in Section 33 of these Regulations, deny any
future application for a Yap State Foreign Investment Permit by said
permit holder.
Part V
Hearing Procedures
These hearing procedures shall apply to all hearings
held pursuant to the Act or to these Regulations, including, but not
limited to, cancellation and suspension hearings.
16.1. An applicant or permit holder shall request a
hearing in writing within 30 days of receipt of notice of the Director's
act or decision which is the subject of the hearing. The written request
shall state that the applicant or permit holder is requesting a hearing,
the Director's act or decision from which the applicant or permit holder
is appealing, the date of the Director's act or decision, the date on
which the applicant or permit holder received notice of the Director's act
or decision, and the issues) to be raised during the hearing. The
applicant or permit holder shall attach the following documents to his
written request for a hearing:
a. a copy of the
application for a Yap State Foreign Investment Permit or a copy of the Yap
State Foreign investment Permit;
b. a copy of the act or
decision of the Director which is the subject of the hearing;
c. evidence of the date
notice of the Director's act or decision was received by the applicant or
permit holder; and
d. any information or
documents which tend to establish the applicant's or permit holder's
position.
16.2. If an applicant or permit holder is entitled to a
hearing and does not submit a written request to the Director within the
specified period of time, the applicant or permit holder shall be deemed
to have waived his right to a hearing. If a request for a hearing is
received by the Director outside of the time limit set forth in the Act or
these Regulations, the Director shall inform the applicant or permit
holder in writing that his request for a hearing is denied and the reason
therefor.
16.3. Notice of the Oirector's act or decision is deemed
received upon actual receipt by hand-delivery or within 7 calendar days
after the date the notice was post-marked by the FSM Postal
Service.
16.4. All requests for a hearing shall be submitted to
the Director at the Office of the Division of Commerce and
Industry.
16.5. Within 10 business days of receipt of the written
request for a hearing, the Director shall set a date for the hearing and
shall send written notice of said hearing date to the applicant or permit
holder. Said hearing shall be set no less than 30 and no more than 90 days
from the date of the Director's written notice scheduling the hearing.
Said notice of hearing date shall set forth the applicant's or permit
holder's right to be represented by counsel during the ,hearing, to
present evidence, including testimony, during the fearing, and to
cross-examine the witnesses presented by the Director.
16.6. A permit cancellation or suspension hearing shall
be scheduled by the Director. The Director shall send the permit holder
written notice of the hearing, which notice shall include the date of the
hearing, the purpose of the hearing, and the alleged violations of the
permit holder. The die of said hearing shall be set no less than 30 days
and no more than 90 days from the date of the Director's written notice of
the hearing. Said notice of hearing date shall set forth the permit
holder's right to be represented by counsel during the hearing, to present
evidence, including testimony, during the hearing, and to cross-examine
the witnesses presented by the Director.
16.7. Notice of a hearing, whether scheduled at the
request of an applicant, permit holder, or the Director, shall be sent to
the permit holder and to any other investors in the business entity which
is the subject of the hearing. Notice shall be sent first class mail to
the address of said individuals or entities as they are found in the files
of the Director or hand-delivered to said individual or
entity.
17.1. Only the permit holder and the Director have a
right to present evidence during the hearing.
17.2. The hearing officer may at his discretion allow
another person to present evidence if the hearing officer determines that
said person's property or investment may be adversely affected by the
hearing officer's decision. The hearing officer's decision to allow the
introduction of evidence by a person other than the permit holder or the
Director is not appealable.
18.1. The Director shall publish notice to the public of
all hearings. Notice shall be published on the radio and television and in
print if there is a newspaper or newsletter in general circulation within
the State. Notice shall be published for a period of 21 calendar days
prior to the date of the hearing. Said notice shall state the date of the
hearing, the location of the hearing, the name of the permit holder, the
names by which the permit holder is conducting business within the State,
and the issues) which will be the subject of the hearing.
18.2. All hearings shall be open to the public. The
permit holder may move for a..closed hearing if the subject matter of the
hearing pertains to proprietary or confidential information of the permit
holder. It is within the hearing officer's discretion as to whether to
grant or deny the permit holder's motion for a closed
hearing.
19.1. No less than 7 calendar days prior to the hearing
date, the Director shall notify all parties, in writing, of the name of
the hearing officer. The hearing officer may be the Director or a member
of his staff or an independent, non-biased person.
19.2. The hearing officer shall not be an individual on
the Director's staff who was involved in making the decision which is the
subject of the hearing or an employee, investor, shareholder, relative, or
agent of the permit holder or applicant. It is not required that the
hearing officer be a citizen of the FSM.
20.1 The applicant, permit holder, or the permit
holders' agent shall be entitled to be physically present. The applicant,
permit holder, or permit holders' agent may be represented by counsel and
may have counsel present during the hearing. The applicant, permit holder,
or permit holders' agent are not entitled to have counsel appointed by the
State.
20.2. The Director is entitled to be represented by
counsel during the hearing.
20.3. The applicant, permit holder, or permit holder's
agent and the Director have the right to present evidence, including the
right to call witnesses, to cross-examine witnesses, and to submit
relevant evidence, and the right to submit argument to the hearing
officer.
21.1. If the hearing was requested by the applicant or
permit holder, the .applicant or permit holder shall bear the burden of
proof unless otherwise specifically stated in the Act or these Regulations
and shall present evidence first.
21.2. If the hearing was scheduled at the request of the
Director, the Director shall bear the burden of proof unless otherwise
specifically stated in the Act or these Regulations and shall present
evidence first.
21.3. A decision or act of the Director is presumed
reasonable.
21.4. The standard of review in an appeal of a
Director's act or decision is abuse of discretion.
21.5. The burden of proof in a cancellation or
suspension hearing is preponderance of the evidence.
22.1. Strict rules of evidence need not be followed, but
the receipt of evidence shall be guided by the Rules of Evidence for the
State Court of Yap. Only reliable evidence shall be admitted by the
hearing officer.
22.2. Those privileges which are recognized by the State
Court of Yap shall apply during a hearing or examination pursuant to an
administrative subpoena.
22.3. Official notice may be taken ofjudicially
cognizable facts.
23.1. All testimony shall be recorded by tape recorder
or other stenographic means.
23.2. The original tape or other record shall be
maintained by the Director for a period of not less than 3 years from the
date of the termination of proceedings including all
appeals.
24.1. The hearing officer's decision shall be stated in
writing and shall become a part of the hearing record. The final decision
shall conform with the .following:
a. A final decision shall
include findings of fact and conclusions of law.
b. If the findings of fact
are set forth in statutory language, they shall be accompanied by a
concise and explicit statement of the underlying facts supporting the
findings.
c. Findings of fact shall
be based exclusively on the evidence admitted by the hearing officer and
on matters officially noticed.
d. Statement of the
penalty imposed, if any.
24.2. A copy of all of the
hearing officer's decisions or orders shall be served on all parties
within 5 business days of the decision being rendered.
24.3. The hearing record shall include:
a. All pleadings, motions,
proposed findings, exceptions, objections, briefs, and memoranda filed by
the parties.
b. A transcript of the
testimony given at the hearing or a copy of the taped
transcript.
c. A summary of matters
officially noticed at any stage of the proceedings.
d. Any intermediate
rulings and decisions; opinions, or reports by the hearing
officer.
e. The final decision or
order.
f. Any other relevant
material ordered into the record by the agency or its hearing
officer.
24.4. The hearing officer may only decide those issues
which are contained in the pleadings submitted to the hearing officer and
which have been served on all parties to the hearing.
24.5. Unless required for the disposition of an ex-pane
matter authorized by law, the hearing officer may not communicate,
directly or indirectly, with any person or party or their representatives
in connection with any issue of fact or law, except upon notice and
opportunity for all parties to participate.
Part VI
Administrative Subpoenas
The Director shall have the right to issue
administrative subpoenas for the purpose of examining witnesses and
documents at any time during an investigation of a person or permit
holder.
26.1. An administrative subpoena shall state the name of
the person to be examined and the place, date, and time of the
examination.
26.2. The date of the examination shall be.Uo less than
14 calendar days from the date of issuance of the administrative
subpoena.
26.3. An administrative subpoena may direct the
individual to be examined to bring documents or other tangible items to
the examination.
An administrative subpoena may be served either by
certified mail addressed to the person to be examined or by
hand-delivery.
The person to be examined and the Director may be
represented by counsel.
Rule 28(a) and Rule 30 of the Rules of Civil Procedure
for the State Court of Yap shall govern the examination to the extent that
such rules are not inconsistent with these Regulations.
Part VII
Other Provisions
30.1. The Director shall coordinate efforts with the
Secretary of Economic Affairs and the Division of Immigration and Labor of
the FSM in implementing the provisions of Sections 309 of the Act, and of
Section 210, 211, and 212 of the FSM Foreign Investment Act of 1997 and
regulations promulgated thereunder with regard to Expatriate Worker
Authorizations.
30.2: The criteria for automatic award of additional
Expatriate Worker Authorizations for senior management positions, pursuant
to Section 309 of the Act and to Section 210(2) of the FSM Foreign
Investment Act of 1997 are as follows:
(a) All previously
approved EWA positions have been filled.
(b) EWA positions)
requires professional or special licensing.
(c) EWA positions)
requires foreign language fluency not available in the local labor
market.
(d) Governor's endorsement
based on the economic needs of the State.
30.3. An application for an additional Expatriate Worker
Authorization shall be submitted to the Director and to the Secretary of
Economic Affairs of the FSM. The application form for additional
Expatriate Worker Authorizations are available in the Director's Office
and is published as Appendix B.
31.1. For the purposes of monitoring the amount and flow
of foreign investment in the State of Yap and to provide services to
foreign investors, the holder of a Section 7. 1.a. Yap State Foreign
Investment Permit shall submit the following reports to the
Director:
a. A holder of a Section
7.1.a. Yap State Foreign Invest~.nent Permit shall submit the Annual
Report Form as prescribed by the Director in Appendix C. The Annual Report
Form shall be due on October 1 st of each year. The annual reporting
period will be the twelve (12) months ending 90 days before the prescribed
due date (currently October 1st each year). At a minimum, the annual
report shall contain the following information:
(i)
required prescribed financial data;
(ii)
any criminal convictions obtained or criminal charges brought against the
business entity, its shareholders, officers, directors, and/or
management;
(iii)
any civil actions commenced or judgments obtained against the business
entity, its shareholders, officers, directors, and/or
management;
(iv)
any administrative proceedings commenced against the business entity, its
shareholders, officers, directors, and/or management;
(v)
whether the business entity or its principals have ceased doing business
in any other jurisdiction within or without the FSM or have commenced
doing business within or without the FSM;
(vi)
the names under which the permit holder is doing business;
and
(vii)
the sectors and/or entities in which the permit holder has
invested.
The Director
shall cancel or suspend a Section 7.1.a. Yap State Foreign Investment
Permit if the holder of said Permit fails to submit the required Annual
Report Form. The Director may cancel or suspend a Section 7.1.a. Yap State
Foreign Investment Permit if the holder of said Permit submits an
incomplete Annual Report Form. If the holder of a Section 7.1.a. Yap State
Foreign Investment Permit submits an incomplete Annual Report Form, the
Director shall notify the holder of said Permit in writing of the fact
that the Annual Report Form is incomplete and in noncompliance with these
Regulations within 14 business days of the submission of the annual
report. The notice shall inform the holder of the precise noncompliance
and shall inform the holder that failure to submit a complete Annual
Report Form within 14 business days shall be grounds for the cancellation
or suspension of the holder's Section 7.1.a. Yap State Foreign Investment
Permit.
A holder of a
Section 7.1.a. Yap State Foreign Investment Permit who applied for said
Permit on or before October 1, 1999, shall not be required to file an
annual report pursuant to this Section until October 1,
2000.
b. A holder of a Section
7.1.a. Yap State Foreign Investment Permit shall submit a report of a
change in foreign ownership of the investment immediately. Said change
shal l be reported on the form provided by the Director as prescribed in
Appendix D.
c. A holder of a Section
7.1.a.Yap State Foreign Investment Permit shall submit a notice of change
of address immediately. Said notice of change of address shall be reported
on the form provided by the Director as prescribed in Appendix
E.
d. A holder of a Section
7. I.a. Yap State Foreign Investment Permit shall submit a notice of
change in registered agent immediately on the form provided by the
Director as prescribed in Appendix F.
31.2. The Director may, in
the case of a change in foreign ownership report of the type referred to
in Section 31. I.b, request further information before taking any action
under Section 310 of the Act.
The information to be published annually pursuant to
Section 311 (a) of the Act shall include data regarding the number of
foreign investors holding Yap State Foreign Investment Permits, the type
of business entities in which investments have been made, the number of
business entities i,a.which foreign investment has been made, the shares
of foreign ownership in the business entities, and any unusual
developments during the year being reported on, including cancellation or
suspension of foreign investment permits and penalties or fines imposed.
Such information shall be published by February 1 st for the preceding
year.
33.1. The Director shall have the authority to impose
administrative fines and penalties other than suspension or cancellation
in those cases where appropriate to satisfy compliance with the Act and/or
these Regulations. The fines and penalties will be assessed on a case by
case basis using the severity and nature of the infraction as criteria
except that:
(a) failing to comply with
the reporting requirements of Section 313 of the Act and Section 31 of
these Regulations will carry a USD $2.00 per calendar day penality for
each day past the prescribed due date specified in these regulations up to
a maximum of 30 days before suspension or cancellation shall
occur;
(b) a penalty of $10.00
will be assessed for the replacement of a lost, stolen, distroyed Permit;
and
(c) other administrative
fines and penalities can range from USD $2.00 per calendar day per
infraction minimum to USD $50,000 maximum per infraction.
33.2. All fines and monetary penalties assessed under
Section 313(b)(2) of the Act shall be paid to the Yap State
Treasury.
33.3. The Director shall
notify the Office of the Attorney General of any information which has
been obtained by the Director which tends to establish that the permit
holder or the business entity in which the permit holder has invested is
engaged in criminal activity.
33.4. Upon determination that a permit holder has
violated the Act or these ,Regulations, the Director shall refer the
matter to the Office of the Attorney General for possible criminal
proceedings. The decision as to whether to pursue criminal charges rests
solely with the Office of the Attorney General.
34.1. Any holder of a Section 7.1.a. Yap State Foreign
Investment Permit may annually repatriate without prior permission up to
15% of its invested capital from the net profits generated by the business
operations. In no case shall annual repatriated capital exceed the annual
net profits generated by business operations and/or the retained earnings
from previous years of operation. A Section 7.l .a. permit holder may
request, in writing, to the Director permission to repatriate additional
annual amounts of capital. The Director shall not unreasonably deny the
request for additional repatriation of capital. In determining whether to
allow or deny the additional repatriation request, the Director shall take
into account, among others, the following, factors:
a. The amount of the current and previous years net
profits and retained earnings;
b. The amount of capital which has been reptriated
during the preceding 12 month period;
c. Whether the Director has received any
complaints that the permit holder has not paid his debts as they come due
within the State and/or FSM; d. Whether an administrative hearing
is-pending before the Director;
e. Whether the Director is investigating the permit
holder for a violation of the Act or these Regulations;
f. Whether the permit holder is a party to any case,
criminal or civil, within the State or FSM that might adversely affect the
business activities of the permit holder;
g. Whether the permit holder or the business entity in
which the permit
holder has
invested has filed for receivership, bankruptcy, or is
otherwise
under court
ordered supervision; and
h. Whether the permit holder has advised intention to
tender surrender
of his Section
7.1.a Yap State Foreign Investment Permit.
34.2. If a permit holder is ceasing to do business and
tendering surrender of his Section 7.1.a. Yap State Foreign Investment
Permit, capital will be repatriated to the holder in the net residual
after all debts, judgments, fines, and other liabilities of the business
operations have been satisfied.
34.3. Payments for goods
and services in the ordinary course of business shall not be deemed to be
repatriation of capital.
35.1. The Director, unless otherwise required by a court
of competent jurisdiction or by law or regulation, shall maintain
confidentiality of any sensitive business information relating to a
particular foreign investment permit holder or prospective foreign
investment permit holder.
35.2. The following information shall not be designated
as sensitive business information:
a. the identity of the
permit holder;
b. the amount of capital
or property invested or to be invested;
c. the nature of the
investment; and
d. the business entities
in which the license holder has or intends to
invest.
35.3. All other information submitted by a foreign
investment applicant/holderexcept that which is stated in section 35.2
shall-be considered sensitive business information.
35.4. The Director shall not publish any individual
information which has been designated as sensitive business information in
any report or publication without first obtaining the written consent of
the specific foreign investment holder that provided the individual
information.
35.5. The Director shall maintain all foreign investment
files in a secure manner.
36.1. All notices which are required to be sent to an
applicant for a Yap .State Foreign Investment Permit shall be sent to the
address stated on the application.
36.2. All notices which are required to be sent to a
holder of a Yap State Foreign Investment Permit shall be sent
to:
(i) the permit holder's
address as stated on the Yap State Foreign Investment Permit or to the
address sated on the most recent notice of change of address submitted by
the permit holder to the Director; and
(ii) the permit holder's
registered agent at the address stated on the Yap State Foreign Investment
Permit or to the address stated on the most recent notice of change
submitted by the permit holder to the Director.
36.3 Notice will be deemed received by the applicant or
holder of a Yap State Foreign Investment Permit when said notice is
received by the applicant's or holder's agent for service of
process.
36.4. All notices, applications, forms, or other
documents which are required to be sent to or submitted to the Director
shall be addressed to the Director of the Department of Resources and
Development at P.O. Box 336, Colonia, Yap FM 96943.