Committee on Finance and Banking
THE EIGHTH Meeting of the Committee on
Finance and Banking was held in Phuket, Thailand,
26-28 October 1981 and the Ninth Meeting was
held in Pattaya, Thailand on 14-16 April 1981.
The following are some of the main developments
in the work of COFAB:
ASEAN Bankers Acceptance (ABA)
On the ABA scheme, the Expert Group
Meeting of ASEAN Central Banks and Monetary
Authorities held in Manila on 21-22 October
1981, made the following additional recommendations:
- the ABA market should in the initial stage be
import-based in view of adequate export financing.
- the rate of interest for rediscounting the ABA
at Central Banks and Monetary Authorities should
neither be a concessionary nor a penal one.
- the operation and administration of the scheme
should be centralised to facilitate ABA transactions.
On the development of a viable secondary
market for ABAs, the Expert Group considered the
proposal of the ASEAN Banking Council (ABC)
and requested that this be revised and resubmitted
with a memorandum on the nature of the ABA
secondary market covering, inter alia, details on:
(a) potential size of the ABA market; (b) potential
investors and dealers in ABAs and the amount they
can take; and (c) the structure of ABA trading.
On participation, the Expert Group agree that
each member country's bankers association shall
upon request draw up a list of aspiring accepting
and dealing financial instituitions for the consideration
and authorization of its respective Central
Bank/Monetary Authority.
Customs and Insurance Matters
The ASEAN Customs Study Tour as approved
by the Tenth AEM Meeting in Bangkok on 24-25
October 1980, took place from 6 April to 14 May
1981 and a report of the Study Tour has been
submitted to the ASEAN Working Group on
Customs Matters (AWGCM).
At the Fifth Meeting of the ASEAN Working
Group on Customs Matters in Pattaya/Bangkok on
2-6 April 1982, representatives from the five
ASEAN Customs Authorities agreed to sign an
ASEAN Customs Code of Conduct. This Code
covers basic principles and standards on customs
valuation, classification, techniques and related
matters. It serves as a guide to action without the
force and effect of a legal instrument. Agreement
on this Code constitutes, among other things, a
very important step in facilitating intra-ASEAN
trade through action on non-tariff measures affecting trade.
In the field of insurance cooperation where
there appears much scope for ASEAN cooperation,
the ASEAN Insurance Commissioners are currently,
among other things, studying the potential for
cooperation in the field of reinsurance, marine
cargo insurance and export credit insurance with a
view to implementation.
ASEAN Swap Arrangement
The ASEAN Swap Arrangement, first established
in August 1977, and last extended in September 1979
for a period of three years was further extended for
another five years on 4 February 1982 with the signing
of the Third Supplementary Agreement to
the Memorandum of Understanding.
This Arrangement, designed for alleviating temporary
shortage of international liquidity among
member countries, provides each member country
country with a credit line of US$ 80 million, and
this facility has been actively availed of by member
countries.
Access to Capital Markets
In the important area of access to capital
markets, various projects have been brought to a
successful conclusion and new avenues of promise
pursued.
The Seminar on Access to European Capital
Markets, sponsored by the EC, took place in the
City of London on 4-10 October 1981. In view of
the positive evaluation of the Seminar on Access to
European Capital Markets, the Ninth COFAB
Meeting held in Pattaya, Thailand on 14- 16 April
1982 requested the EEC to continue to conduct
the Seminar on an annual basis rather than changing
it to one on report financing which EEC
had proposed.
The details of the ASEAN proposal on holding
a Seminar on Access to Capital Markets in the U.S.,
Japan and West Asia are currently being negotiated
with the UNDP which is financing the project. This
project would consist of various Training Work-
shops over a four year period to be executed by
the United Nations Centre for Transnational
Corporations (UNCTC).
Avoidance of Double Taxation
Since the Seventh Meeting of COFAB in March
1981, ASEAN countries have made further
progress in the concluding and enforcement of
bilateral Agreement for the Avoidance of Double
Taxation.
Agreement between Indonesia and the
Philippines and between Indonesia and Thailand
have now been signed. The Indonesia-Thailand
Agreement has been ratified. The present status of
Double Taxation Agreements is as presented
below:
Status on the Agreements for
the Avoidance of Double Taxation
among ASEAN Countries
Concluded Enforced
Thailand-Indonesia Yes No
Thailand-Philippines Yes No
Thailand-Singapore Yes Yes
Thailand-Malaysia Yes No
Indonesia-Philippines Yes No
Indonesia-Malaysia No No
PhiIippines-Singapore Yes Yes
Philippines-Malaysia Yes No
Singapore-Malaysia Yes Yes
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