OECD Services Trade Restrictiveness Index: Policy trends up to 2018 - January 2018
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OECD Services Trade Restrictiveness Index: Policy trends up to 2018 January 2018
OECD TRADE AND AGRICULTURE DIRECTORATE This booklet is published under the responsibility of the Secretary-General of the OECD. The opinions expressed and the arguments employed herein do not necessarily reflect the official views of OECD countries. The publication of this booklet has been authorised by Ken Ash, Director of the Trade and Agriculture Directorate Comments are welcome and should be sent to tad.contact@oecd.org. Photo credits: Cover Illustration © Jeffrey Fisher © OECD (2018) You can copy, download or print OECD content for your own use, and you can include excerpts from OECD publications, databases and multimedia products in your own documents, presentations, blogs, websites and teaching materials, provided that suitable acknowledgment of OECD as source and copyright owner is given. All requests for commercial use and translation rights should be submitted to rights@oecd.org.
STRI Policy Trends up to 2018
The OECD Services Trade Restrictiveness Index (STRI) is a unique tool that provides up-to-
date information on regulatory changes that affect trade in services in 44 countries across
22 sectors, accounting for over 80% of global services trade.
Launched in 2014 and updated annually, the STRI offers a comprehensive and transparent
overview of global trends in services trade regulations, while facilitating deeper analysis
into the effects that such regulations have on trade in services. The STRI is updated each
year to incorporate changes that have been introduced through new or amended laws and
regulations. This evidence-based tool allows policymakers to assess reform options,
benchmark them relative to global best practice, and assess their likely impact; helps trade
negotiators identify restrictions that most impede trade; and is a source of regulatory
transparency for businesses seeking to enter foreign markets.
Results from the most recent STRI update show that although there is evidence of some
progressive liberalisation of services markets, the overall 2017 STRI indices are more
restrictive than in 2016, highlighting an overall tightening of the global regulatory
environment for services trade. These results are largely due to restrictive horizontal policy
changes being implemented in a number of countries that affect all services sectors. This
was particularly the case for measures affecting services supplied through the temporary
movement of natural persons (Mode 4), due to more stringent entry conditions being
applied to persons seeking to provide services on a temporary basis, such as intra-corporate
transferees, contractual or independent services suppliers. In addition, some countries
have introduced economy-wide limitations on cross-border data flows.
Top regulatory performers
The top ten countries with the most open markets for services trade in 2017 are Latvia,
Ireland, Germany, Netherlands, Australia, Lithuania, Denmark, Japan, United Kingdom,
and the Czech Republic.
Norway recorded the most significant liberalising reforms in 2017, followed by Indonesia
and Iceland.
Leading sectoral reformers from 2014 to 2017 include Mexico in telecommunications, the
People’s Republic of China in rail freight transport services, and Japan in logistics services
(customs brokerage).
Top services exporters
The United States exported services worth USD 752 billion in 2016, followed by the
United Kingdom (USD 333 billion), Germany (USD 281 billion), France (USD 237 billion),
and the People’s Republic of China (USD 207 billion).
© OECD 2018
4│ STRI POLICY TRENDS UP TO 2018
Key analytical findings
Services trade barriers impede services exports. OECD estimates reveal that the
trade cost equivalent of services trade barriers largely exceeds the average tariff on
traded goods. Services trade barriers have a strong anti-export bias that impedes
services exports as much as services imports. Trade costs arise both from policies that
explicitly target foreign suppliers and from domestic regulation that falls short of best
practice in the area of competition policy and rule-making.
Consumers and firms pay the cost of trade restrictions. Entry barriers allow
incumbent firms to gain market power, limit competition, and delay innovation. The
costs of a policy environment that reduces competition from new entrants, whether
domestic or foreign, is ultimately borne by consumers and downstream business
customers, who pay higher prices and enjoy less choice than they would in more
competitive markets. The resulting price increases for domestic users of services can
be quantified as a sales tax equivalent on their purchases. On average, estimates of the
tax equivalent of the restrictions recorded in the STRI range from about 3% in road
freight transport to almost 40% in broadcasting. In some segments of transport and
logistics, as well as in construction, the average estimated sales tax equivalent is about
20%, and in some countries almost 80%, imposing substantial additional costs on
manufacturing enterprises and eventually on final customers.
Regulatory co-operation can reduce trade costs. Differences among countries in
regulating the same service create additional costs for exporters that need to adapt to
new sets of rules in each new market. Regulatory differences become more important
as trade barriers come down to a level where firms start to consider entering multiple
markets. Thus, when markets are relatively open, trade costs imposed by the average
degree of regulatory differences is estimated at about 40% in ad valorem terms. While
regulatory harmonisation can reduce trade costs, removing the most onerous
restrictions first is a prerequisite to maximise the gains from regulatory co-operation.
Trade in services depends on the movement of professionals. The cross-border
movement of people does not account for a large share of services trade, but it is
essential for international business operations. Mobility of natural persons across
international borders is particularly key for trade in business services, which in turn
is an important channel for knowledge transfer.
Trade in services underpins the digital economy. Liberalisation and pro-
competitive reforms in the telecommunications sector are associated with a
substantial reduction in the trade costs for business services. High capacity networks
at competitive prices are a necessary condition for a digital transformation of
knowledge-intensive services. Access to the professions and the services they provide
is also essential.
Services reforms help SMEs. The costs of dealing with regulatory hurdles and
complying with diverging regulations in every new market fall more heavily on small
and medium-sized enterprises (SMEs). For micro firms engaging in cross-border
exports, an average level of services trade restrictiveness represents an additional 7%
in trade costs relative to large firms. Establishing an affiliate abroad involves even
higher costs; for a small firm an average level of services trade restrictiveness is
estimated to be equivalent to an additional 12% tariff compared to large firms.
© OECD 2018
STRI POLICY TRENDS UP TO 2018 │5
Monitoring services policy changes 2014-2017
The 2017 STRI update identified 70 policy changes across all countries. A similar number of
changes were recorded in 2016 (75) and 2015 (69) (Figure 1). These changes include
policies that both restrict and liberalise services trade. The main policy changes identified
over the years are described in Annex I for each country covered.
Since 2014, the number of liberalising reforms has been higher than the number of
restrictive changes. In 2016, liberalising reforms accounted for almost 76% of the total
recorded in the STRI database. Tightening measures were most visible in 2015, when 36%
of changes were restrictive for services trade. However, most changes that tightened trade
apply horizontally across the economy and contribute to the STRI results across all sectors,
leading to a higher overall impact on the indices.
While about 24% of all changes were trade restrictive in 2016, this increased to 32% in
2017 due to the introduction in a few countries of more stringent conditions across the
economy, particularly those limiting the temporary movement of natural persons providing
services (Figure 2).
Figure 1. Extent of policy changes across years
Number of policy changes recorded in the STRI database across all sectors and countries
Tightening Liberalising
2017
2016
2015
0 10 20 30 40 50 60 70 80
Source: STRI database (http://oe.cd/stri-db).
© OECD 2018
6│ STRI POLICY TRENDS UP TO 2018
Figure 2. Nature of changes in 2016 and 2017, number of measures
Liberalising Tightening
2016 2017
24%
32%
76% 68%
Source: STRI database (http://oe.cd/stri-db).
Policy changes across modes of supply
The STRI differentiates between the nature of policy changes by modes of services supply
through commercial establishment (Mode 3), temporary movement of natural persons
(Mode 4), and changes that affect services irrespective of the mode through which they are
supplied (all modes). The latter category is comprised of barriers to competition and
regulatory transparency, in particular.
Figure 3 shows that services supplied via temporary movement of natural persons (Mode 4)
are particularly affected, with the highest net increase in the STRI results in 2017. This is
the result of a few countries applying stricter labour market tests for some or all three
categories of persons covered in the STRI (intra-corporate transferees, contractual services
suppliers, and independent services suppliers). Two countries have introduced quotas on
intra-corporate transferees and contractual services suppliers. In one country, the duration
of stay for corporate transferees was reduced, while two countries introduced new
conditions for obtaining permits, including the condition that sponsors must support the
person in question.
Liberalising reforms have also been introduced in several countries. These included the roll-
back of burdensome ex ante regulations when these were no longer needed, as well as the
simplifying of customs procedures for courier and logistics firms. A number of countries,
particularly those within the European Union, also liberalised policies affecting the
temporary movement of natural persons (Mode 4 access) by introducing new permits for
intra-corporate transferees coming from non-EU Member States, providing more clarity on
the conditions and duration of stay applicable to these persons.
© OECD 2018STRI POLICY TRENDS UP TO 2018 │7
At the same time, policy changes have been implemented that restrict services supplied
through all modes. These include raising barriers to competition in local markets, more
stringent conditions for foreign suppliers to access the public procurement markets in some
countries, as well as measures that affect regulatory transparency.
With respect to services supplied through commercial establishments, trade restrictive
changes include measures that affect foreign investment, particularly conditions related to
establishing and managing foreign branches. The impact of liberalising measures has been
narrower, although reforms included the easing of foreign ownership limitations, lifting of
restrictions on capital transfers, and the easing of conditions affecting board of directors
and managers.
Figure 3. Policy changes and modes of supply (2017)
Cumulative change in STRI results across countries
Liberalising Tightening
0.1
0.08
0.06
0.04
0.02
0
-0.02
-0.04
-0.06
Mode 3 Mode 4 All modes
Source: STRI database (http://oe.cd/stri-db).
Sector-specific impacts
Looking at the STRI results through a sectoral lens, the net effect of trade restricting
measures has been larger than that of the trade liberalising measures (in terms of
cumulative changes in the value of the indices across all countries during 2016-17; see
Figure 4). This is mainly due to the fact that most trade restrictive changes recorded in this
period were horizontal in nature, and, as such, they affect the indices of all sectors. For
instance, tightening measures affecting the temporary movement of people contributes to
increasing the results across all sectors.
© OECD 20188│ STRI POLICY TRENDS UP TO 2018
The highest net liberalisations have taken place in some of the sectors that form part of the
digital network and the transport and logistics chain. In motion pictures and sound
recording, one country has liberalised foreign ownership completely, whereas others have
eased the conditions for granting subsidies to film producers and abolished statutory
monopolies on copyright management in sound recording. In logistics services, reforms
particularly affected customs brokers where conditions on licensing have been lowered in
some countries, and in others the customs procedures have been made easier through, for
instance, raising the de minimis thresholds and establishing single windows for customs
procedures.
In 2017, the largest overall increase in services restrictiveness at the sectoral level was seen
in the telecommunications sector. In some countries, foreign suppliers no longer benefit
from regulated access and interconnection fees and conditions imposed on local
incumbents. Other sectors with high cumulative restrictiveness include some of the physical
infrastructure services, such as construction services. In addition, changes in public
procurement processes and to the nationality requirements for the boards of directors of
construction firms are changes that contributed to increased trade restrictiveness.
Figure 4. Impact of policy changes on the STRI results, 2016-2017
Cumulative changes in results across countries
Cumulative trade liberalisations (2016 to 2017) Cumulative trade restrictions (2016 to 2017)
0.3
0.25
0.2
0.15
0.1
0.05
0
-0.05
-0.1
-0.15
Broadcasting
Computer services
Custom brokerage
Rail freight transport
Storage and warehousing
Road freight transport
Air transport
Construction
Sound recording
Insurance
Architecture services
Motion pictures
Freight forwarding
Legal services
Engineering services
Telecommunications
Cargo-handling
Courier services
Accounting services
Commercial banking
Distribution services
Maritime transport
Digital network Transport and distribution supply chain Market bridging and Physical
supporting services infrastructure
services
Source: STRI database (http://oe.cd/stri-db).
© OECD 2018STRI POLICY TRENDS UP TO 2018 │9
Overall STRI performance in 2017
Figure 5 ranks the overall STRI performance for 44 countries in 2017, based on sectoral
results and rankings.1 The trend line depicts the extent to which countries’ indices perform
well compared to top sectoral performers, on the one hand, and the entire sample on the
other. Closer proximity to the trend line indicates a more balanced performance, whereas a
higher position in the line is associated with better overall results.
Figure 5. Overall STRI performance, 2017
25
LVA
20
Number of top 10 rankings across all sectors
IRL
DEU
15 KOR
AUS LTU
NLD CHL
DNK JPN
10
CZE PRT
GBR
NZL
SVN
FRA
CAN
LUX USA
5
MEX
EST SVK
POL ZAF COL CRI
SWE
GRC AUT FIN ISR
BEL BRA CHN IDN ISL IND
ESP
0
0 5 10 15 20 25 ITA HUN 30 35 RUS
TUR CHE 40 45
NOR
Average ranking
Source: STRI database (http://oe.cd/stri-db).
1. Ranks vary from 1 (best performing) to 44 (least performing) for each sector. The variable works in the
following way: country A ranks, for instance, 5th out of 44 countries in sector X, 12th in sector Y, 1st in
sector Z, and so on. The variable shows the simple average of these ranks for all 22 sectors.
© OECD 201810 │ STRI POLICY TRENDS UP TO 2018
Where countries have a high number of well-performing sectors and low average sector
ranks, their overall STRI performance increases. In some cases, countries might rank lower
on the sectoral average but still have a high number of sectors with low scores, which is the
case when indices are low in most but a few sectors (e.g. outlier scores may exist due to a
completely closed market in one sector but open across the others).
The top ten countries with the highest overall performance in the 2017 STRI were Latvia,
Ireland, Germany, Netherlands, Australia, Lithuania, Denmark, Japan, United Kingdom, and
the Czech Republic.
Leading sectoral reformers
Market opening reforms in Norway had the most significant effect in 2017, amounting to a
net STRI reduction of 0.27 across all sectors (Figure 6, Panel A). This is the result of reforms
introduced in the rail transport sector and lowering barriers to competition by establishing
an independent competition authority and appeal body for competition policy decisions.
Two other top reformers are Indonesia and Iceland, with net reductions of 0.1 and 0.09
respectively.
Indonesia has embarked on extensive reforms over the past few years, with comprehensive
and far-reaching reforms in 2015 and 2016 resulting in a net decrease of 0.9 of its STRI
results across all sectors and years (Figure 6, Panel B). Korea and China have each recorded
significant decreases as well between 2014 and 2017, with net reductions of 0.32 and 0.30
respectively.
The reforms in Indonesia were largely the result of a wide-scale reform package introduced
under the revised Negative Investment List, the main instrument governing foreign direct
investment. The conditions for foreign investment and trade have been significantly eased
across a number of sectors, including telecommunications, air transport, logistics services
and some audio-visual services (OECD, 2017a). As a result, the STRI results have decreased
significantly, with the greatest effects being observed in motion pictures and sound
recording services where net reductions amounted to 0.25 and 0.17 respectively (Figure 7).
Figure 6. Countries with highest net reductions in overall STRI results
Cumulative decrease in STRI results across all sectors
A. (2017) B. (2014-2017)
0 0
NOR IDN ISL IDN KOR CHN
-0.2 -0.2
-0.4 -0.4
-0.6 -0.6
-0.8 -0.8
-1 -1
Source: STRI database (http://oe.cd/stri-db).
© OECD 2018STRI POLICY TRENDS UP TO 2018 │ 11
Figure 7. Policy reforms in Indonesia, 2014-17
2017 2014
Computer
Customs brokerage 0.9 Construction
Freight forwarding 0.8 Legal
0.7
Storage and
0.6 Accounting
warehouse
0.5
Cargo-handling 0.4 Architecture
0.3
0.2
Courier services Engineering
0.1
0
Rail freight transport Telecommunication
Road freight transport Distribution
Maritime transport Broadcasting
Air transport Motion pictures
Insurance Sound recording
Banking
Source: STRI database (http://oe.cd/stri-db).
Mexico has introduced important reforms to modernise its telecommunications sector in
the past years through lowering barriers to foreign direct investment and fostering a more
competitive environment for telecommunications services suppliers. These reforms
resulted in a net STRI decrease of 0.24 in telecommunications (Figure 8, Panel A), halving
Mexico’s index value in this sector. Emerging evidence shows the benefits of these reforms
through fast-growing penetration rates, lower prices, and better quality services (OECD,
2017b). For instance, more than 50 million additional people in Mexico have subscribed to
mobile broadband since the reforms were introduced.
China has revised the Catalogue for the Guidance of Foreign Investment Industries in 2015
and 2017 – the main instrument governing foreign direct investment – which contributed to
lowering its indices in sectors such as rail freight transport services (Figure 8, Panel B).
In 2017, Japan has introduced reforms in customs brokerage services, removing, among
others, the economic needs tests for granting licenses to customs brokers. Complemented
by a number of economy-wide reforms, Japan’s index in this sector has been reduced by
0.04 or about 20% compared to the index value in 2014 (Figure 8, Panel C). In legal services,
the United States was the country with most reductions in the indices, introducing in 2016 a
temporary licensing regime for foreign attorneys to practice in New York State (Figure 8,
Panel D).
© OECD 201812 │ STRI POLICY TRENDS UP TO 2018
Figure 8. Leading sectoral reformers
Cumulative decrease in STRI results between 2014 and 2017, in selected sectors
A. Telecommunications services B. Rail freight transport services
0 0
MEX ISR IDN CHN NOR BEL
-0.05 -0.05
-0.1 -0.1
-0.15 -0.15
-0.2 -0.2
-0.25 -0.25
C. Logistics - customs brokerage D. Legal services
0 0
JPN CHL IDN USA KOR SWE
-0.05 -0.05
-0.1 -0.1
-0.15 -0.15
-0.2 -0.2
-0.25 -0.25
Source: STRI database (http://oe.cd/stri-db).
References
OECD (2017a), Services Trade Policies and the Global Economy, OECD Publishing,
Paris. http://dx.doi.org/10.1787/9789264275232-en
OECD (2017b), OECD Telecommunication and Broadcasting Review of Mexico 2017,
OECD Publishing, Paris. http://dx.doi.org/10.1787/9789264278011-en
© OECD 2018STRI POLICY TRENDS UP TO 2018 │ 13
More information
The STRI analytical findings, presented in Services Trade Policies and
the Global Economy, demonstrate the potential gains from strategic
regulatory reforms such as:
Scaling back restrictions on foreign entry and barriers to the
movement of professionals that discriminate against foreign
services providers.
Adopting strategic reforms across a spectrum of trade, investment
and competition policies to facilitate trade in services.
Targeting bottlenecks in transportation and logistics services to
reduce trade costs.
STRI online tools
The STRI Internet page is a single window to the STRI regulatory database, interactive tools such as
Compare Your Country and Policy Simulator, methodological notes, and links to analytical OECD Trade
Policy Papers on services trade.
Compare your country (http://oe.cd/stri-cyc)
This interactive website can be used to compare services
trade restrictiveness across 22 sectors in 44 OECD
countries and partner economies. Key economic
indicators are projected onto a world map to give a
comparative view of the importance of services in the
countries covered by the STRI.
Policy simulator (http://sim.oecd.org/)
The policy simulator provides all STRI information by
country and by sector. It can be used to understand how
the STRI indices are calculated, to analyse the
contribution of each policy measure to the index, to
compare countries in detail, and to simulate the impact of
a policy change on the index value. Simulations can be
saved and shared with other users, and the relevant data
can be downloaded.
© OECD 201814 │ STRI POLICY TRENDS UP TO 2018
Online STRI regulatory database (http://oe.cd/stri-db)
The online STRI regulatory database displays complete
and up-to-date regulatory information collected for the
sector composite indices. This qualitative database
contains information on trade restrictions and behind-
the-border regulations in the 22 STRI services sectors.
The database entries are documented with reference to
the sources (title and articles of the relevant law), with an
internet link to each legal source.
STRI Composite Indices at OECD.Stat (http://oe.cd/stri-stat)
The STRI indices are easily accessed and extracted from
OECD.Stat (under the heading: Industry and Services,
subheading: Services Trade Restrictions). In addition to
the five policy areas, the indices are presented by four
additional classifications: GATS market access/national
treatment and domestic regulation/other, GATS modes of
supply, Discriminatory versus non-discriminatory
measures, Firm’s establishment versus on-going
operations. The indices of regulatory heterogeneity based
on the same information included in the STRI regulatory
database are also available under this section.
STRI mobile application (available for iOS and Android devices)
This mobile application features an integrated policy
simulator function with downloadable data for offline
use. Built-in quick links guide users to other STRI tools
and materials. The application is available on Apple’s App
Store and Google Play Store.
OECD Services Trade Restrictiveness Index OECD Trade and Agriculture Directorate
http://oe.cd/stri http://www.oecd.org/tad
OECD STRI sector notes and papers Sign-up for OECD e-mail alerts
http://oe.cd/stri-sectors http://www.oecd.org/OECDdirect
For further information contact:
John Drummond Hildegunn Kyvik Nordås
Head, Trade in Services Division Senior Trade Policy Analyst
(John.DRUMMOND@oecd.org) (Hildegunn.NORDAS@oecd.org)
© OECD 2018STRI POLICY TRENDS UP TO 2018 │ 15
Annex I
Policy Changes Across Countries
This annex presents some of the main policy changes identified in the annual STRI updates
for the countries covered. Detailed country information can be found on the STRI website
and online database.2
Australia
In June 2016, New South Wales introduced a 4% surcharge for foreign persons (including
foreign corporations) in addition to the duty payable on the purchase of residential
property. Furthermore, foreigners are also subject to a land tax surcharge of 0.75% (in
2017) for residential property.
Austria
As of October 2017, a new permit for intra-corporate transferees is available for non-
EU/EEA nationals. The period of validity has been extended from one to three years for
managers and specialists. Moreover, the Federal Ministry for Labour, Social Affairs and
Consumer Protection may, by regulation, fix quotas for the employment of non-EU/EEA
intra-corporate transferees. In the telecommunications sector, parts of the fixed line
telephony market have been deregulated in May 2017.
Belgium
B Logistics, one of the main rail freight operators in Belgium, was partly privatised in
2015. The state-owned Belgian national railway company, SNCB, now owns only 31% of
its equity shares.
Brazil
The Federal Supreme Court ruled in 2015 to exempt the designated postal operator from
VAT and other local taxes for both its postal and courier services.
Canada
As of June 2017, the investment review threshold under the Investment Canada Act was
raised to CAD 1 billion in enterprise value for investors wishing to directly acquire control
of a Canadian business. This applied to: (1) WTO investors that are not state-owned
enterprises; and (2) by non-WTO investors that are not state-owned enterprises whereas
the Canadian business that is the subject of the investment is, immediately prior to the
implementation of the investment, "controlled by a WTO investor".
Chile
In 2017, Chile revised its customs regulation, introducing, inter alia, an Authorised
Economic Operators Scheme open to foreign firms, and authorising the release of goods
before the determination and payment of duties.
2. Available at http://oe.cd/stri.
© OECD 201816 │ STRI POLICY TRENDS UP TO 2018
China, People’s Republic of
The 2015 revision of the Catalogue for the Guidance of Foreign Investment Industries –
the main instrument governing foreign direct investment in China – eased investment
conditions in key service sectors such as distribution and rail freight transport services. In
telecommunications services, China introduced regulations in 2015 on number portability
and interconnection in fixed line. It also revised the Telecom Business Classification
Catalogue, which since 2016 mandates the resale of mobile communication services. In
September 2016, the general requirement for prior approval of foreign investments was
replaced with an online notification requirement. The Catalogue for the Guidance of
Foreign Investment Industries is updated every two to five years, the most recent entering
into effect in June 2017. The new Catalogue introduced a negative list approach, lifting
investment screening in sectors not covered in the Catalogue. A new Cybersecurity Law
entered into effect in 2017, introducing new conditions affecting data transfers abroad.
Colombia
Since 2015, the Financial Superintendence has been financially autonomous. In 2016, the
New Customs Statute (Nuevo Estatuto Aduanero) introduced a de minimis regime imposing
minimum warehouse surface requirements for postal operators, and an obligation for
courier services operators to be available 24/7.
Costa Rica
In 2017, Costa Rica ratified the United Nations Convention on Contracts for the
International Sale of Goods, which aligned national contract rules for cross-border
transaction to internationally standardised rules.
Czech Republic
As of April 2017, the Regulatory Body for Access to Transport Infrastructure (Úřad pro
přístup k dopravní infrastruktuře) has been established as an independent regulator to
oversee access to the rail infrastructure for rail transport operators.
Denmark
There are no significant policy changes that affect the score of the STRI during the period
2014-2017.
Estonia
In 2017, foreign workers were subject to wage parity requirements. In 2015, rules were
introduced to improve the enforcement of copyright in the digital environment.
Finland
A major state-owned construction enterprise, Destia, was privatised in 2014. In the
distribution sector, shop opening hours were deregulated in 2015, and labelling standards
reformed in 2016.
France
In 2016, the labour market test for intra-corporate transferees was removed. However, a
transport company established outside of France and seeking to provide cross-border
transport services to France must submit a notification to the labour inspectorate where
the service will be provided (Déclaration préalable de détachement transnational).
Moreover, as of 2016, only licensed professionals can hold shares in auditing firms.
© OECD 2018STRI POLICY TRENDS UP TO 2018 │ 17
Germany
There are no significant policy changes that affect the score of the STRI during the period
2014-2017.
Greece
There are no significant policy changes that affect the score of the STRI during the period
2014-2017.
Hungary
Since 2015, Hungary applies quotas on work permits for natural persons with non-EU
nationalities working on a temporary basis in the country. Such work permits are required
for services suppliers as well. As of 2016, intra-corporate transferees from third countries
can stay in Hungary for up to 12 months on their initial permits.
Iceland
Temporary capital controls introduced following the financial crisis have been gradually
lifted and the remaining controls relevant for services trade were lifted in 2016. Iceland
has also reformed its copyright enforcement regime, abolishing a statutory monopoly in
copyright management in sound recording, and aligning its regulation of copyright
management and subsidies in the film industry with EU directives. Deregulation of mobile
telecommunications services took effect in 2017. On the other hand, new restrictions on
movement of people were introduced in 2017, limiting access for contractual services
providers to education and R&D activities, and introducing an obligation to purchase local
health insurance as a condition for obtaining work permits for intra-corporate transferees
and independent services providers.
India
In 2015 India lifted foreign equity limits from 26% to 49% in the insurance sector and
foreign branches were permitted in the reinsurance field. Further investment
liberalisation took place in 2016 when foreign equity limits were removed for airport
services, and cable and satellite broadcasting and foreign equity limits were eased in civil
aviation. Minimum capital requirements for establishing a company were eliminated in
most sectors in 2016. On the other hand, India introduced an equalization levy of 6% on
purchases of advertising services from non-resident companies in 2017.
Indonesia
Indonesia has fully or partially opened several sectors to foreign investment under the
2016 Negative Investment List.3 These include air freight transport, logistics services,
telecommunications, audio-visual services, architecture and engineering services.
Minimum capital requirements were removed in 2016. In 2017, more favourable
conditions for the release of imported goods before determination and payment of duties
have benefitted distribution, courier and logistic services. In the same year, Indonesia
revoked minimum capital requirements for maritime transport service. However, the
Construction Act of 2017 imposed nationality requirements on the management of
construction and architecture companies.
3. Daftar bidang usaha yang tertutup dan bidang usaha yang terbuka dengan persyaratan di bidang penanaman
modal, Government Regulation No. 44/2016, available at:
http://peraturan.bkpm.go.id/jdih/front/form/19133
© OECD 201818 │ STRI POLICY TRENDS UP TO 2018
Ireland
In 2016, Ireland introduced a time frame of six months within which the Central Bank of
Ireland, the sector regulator, must decide on applications for authorisation to provide
insurance services.
Israel
In 2016, the Capital Market, Insurance and Savings Authority, the sector regulator for
insurance services, was made independent from the Ministry of Finance. In commercial
banking, the residency requirement for two-thirds of the board members of banks was
lifted in 2017.
Italy
In 2017, Italy implemented the EU Directive regarding intra-corporate transferees from
outside the European Union. Accordingly, the maximum duration of stay for intra-
corporate transfers was changed to 36 months for managers and specialists.
Japan
In 2017, Japan amended Customs Business Act by removing the economic needs test.
Customs brokerage firms are no longer required to place at least one qualified customs
specialist in each office.
Korea
The requirement that foreign investors transfer stocks to Korean national(s) within six
months in cases where their registration is cancelled was lifted in 2015. Restrictions on
internet banking were also lifted. Conversely, a requirement that only licensed architects
may establish an architectural firm was introduced that same year.
Latvia
As of January 2017, the fixed telecommunication market segment has been deregulated.
Lithuania
Since September 2016, Lithuania no longer applies a labour market test for contractual
service suppliers staying in the country for less than 12 months. As of June 2017, the
market for fixed telephony has been deregulated. That same year, foreign professionals
are no longer required to take a local exam to become a licensed auditor.
Luxembourg
Since December 2015, approval to establish a branch may be refused if reciprocity for
Luxembourg companies is not guaranteed by the national law of the foreign investor.
Mexico
In recent years, Mexico has passed a series of reforms, including, inter alia, a new
telecommunications and broadcasting law, and a new financial law. The
telecommunications reforms eased foreign participation in the mobile and fixed-line
services segments of the sector. It also introduced a new independent regulator, with
exclusive authority over the sector and new sanctioning powers, as well as a series of pro-
competitive measures challenging the dominant position of incumbent firms. The financial
reform aimed to strengthen prudential regulation, increase credit penetration and
promote competition. As a result, foreign financial institutions can now open branches in
Mexico to provide insurance services. Although this possibility is still subject to
© OECD 2018STRI POLICY TRENDS UP TO 2018 │ 19
government authorisation, and granted on the basis of reciprocity, it nevertheless
increases certainty and clarity on the regulatory environment in the sector. In 2015,
Mexico established an independent rail regulatory agency. In 2017, Mexico rolled back the
foreign equity restrictions on domestic air transport services; foreign ownership of air
companies is now permitted up to 49%.
Netherlands
There are no significant policy changes that affect the score of the STRI during the period
2014-2017.
New Zealand
In May 2015, the Companies Act 1993 was amended to require all companies to have at
least one director domiciled in New Zealand or an “enforcement country” (currently only
Australia). A temporary ban on the parallel importation of films for commercial sale for a
period of five months from the film’s international release ended on 31 October 2016.
Norway
In 2016, Norway eliminated the postal monopoly for letters in courier services. Pro-
competitive regulations overseen by an independent regulator was introduced in the rail
freight sector in 2017. By the same token the competition authority can no longer be
instructed by the government on individual cases or on the general interpretation of
competition laws, and its decisions can be appealed to a newly established independent
body.
Poland
There are no significant policy changes that affect the score of the STRI during the period
2014-2017.
Portugal
Portugal privatised CP Carga, the former public rail freight transporter and cargo-handler,
in 2015. It has also taken steps to ensure the independence of the insurance regulator. The
liberalisation in architecture services in 2015 repealed a reciprocity requirement for
admission to the Portuguese Order of Architects, which is a prerequisite to practice in the
country. However, a reciprocity requirement was introduced for the Order of Portuguese
Engineers and the Order of Portuguese Technical Engineers.
Russian Federation
In 2015, a new legal requirement came into force requiring that certain personal data
collected in the Russian Federation be stored on local servers. In 2016, the Russian
Federation introduced limitations on foreign participation in the total authorised capital of
credit institutions, and lowered the threshold for foreign equity allowed in broadcasting
companies. As of 2017, certain subsidies granted for the acquisition of rail transport
equipment cannot be granted to foreign entities.
Slovak Republic
In courier services, a pro-competitive dispute settlement mechanism, under the auspices
of the regulatory authority, was introduced in 2016.
© OECD 201820 │ STRI POLICY TRENDS UP TO 2018
Slovenia
Slovenia adopted a new Collective Management of Copyright and Related Rights Act in
2016, in which conditions for membership in a collective copyright management body are
based on objective, transparent and non-discriminatory rules.
South Africa
South Africa eliminated quotas for contractual services suppliers and independent
services suppliers. It repealed labour market tests for intra-corporate transferees in 2014.
Spain
Since 2014, labour market tests have been lifted for contractual services suppliers. At the
same time, their maximum duration of stay was extended from 12 to 24 months. In 2014,
the duration of stay for intra-corporate transferees and independent services suppliers
was shortened from 60 to 36 months and 24 months, respectively.
Sweden
Fixed line telephony was deregulated in 2017, following a market analysis by the regulator
which found the sector to be competitive.
Switzerland
There are no significant policy changes that affect the score of the STRI during the period
2014-2017.
Turkey
In 2015, Turkey adopted a regulation implementing the 2013 Law on Liberalisation of the
Turkish Rail Transport. The new regulation paved the way for operationalising the
reforms prepared for the rail transport sector. In 2016, Turkey adopted a new law on the
protection of personal data.
United Kingdom
A cap on contractual interest rates for short-term credit was implemented in January
2015. As of 2017, under the new Immigration Skills Charge Regulations, a sponsor must
pay a fee of GBP 1 000 per year to the Secretary of State each time it assigns a certificate of
sponsorship to a non-EEA skilled worker (Tier 2). Smaller employers pay GBP 364 per
year and certain exemptions may be granted.
United States of America
Since 2016, foreign attorneys can obtain a temporary authorisation to practice law in New
York. As of July 2016, foreign banks with USD 50 billion or more in US assets must form a
US intermediate holding company (IHC) to act as the parent company of all of the foreign
bank’s US subsidiaries. In 2016, the threshold for de minimis regime on custom duties for
imported merchandise was raised to USD 800.
© OECD 2018STRI POLICY TRENDS UP TO 2018 │ 21
Annex II
STRI Indices by sector
The digital network
Figure A.1. Telecommunications services, 2017
Restrictions on foreign entry Restrictions to the movement of people Other discriminatory measures
Barriers to competition Regulatory transparency Average
STRI 2014
0.6
0.5
0.4
0.3
0.2
0.1
0
Figure A.2. Television and broadcasting services, 2017
Limitations on foreign entry Limitations on the movement of people Other discriminatory measures
Barriers to competition Regulatory transparency Average
STRI 2014
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
© OECD 201822 │ STRI POLICY TRENDS UP TO 2018
Figure A.3. Motion pictures services, 2017
Limitations on foreign entry Limitations on the movement of people Other discriminatory measures
Barriers to competition Regulatory transparency Average
STRI 2014
0.6
0.5
0.4
0.3
0.2
0.1
0
Figure A.4. Sound recording services, 2017
Limitations on foreign entry Limitations on the movement of people Other discriminatory measures
Barriers to competition Regulatory transparency Average
STRI 2014
0.5
0.4
0.3
0.2
0.1
0
© OECD 2018STRI POLICY TRENDS UP TO 2018 │ 23
Figure A.5. Computer services, 2017
Restrictions on foreign entry Restrictions to the movement of people Other discriminatory measures
Barriers to competition Regulatory transparency Average
STRI 2014
0.5
0.45
0.4
0.35
0.3
0.25
0.2
0.15
0.1
0.05
0
The transport and distribution supply chain
Figure A.6. Air transport services, 2017
Restrictions on foreign entry Restrictions to the movement of people Other discriminatory measures
Barriers to competition Regulatory transparency Average
STRI 2014
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
© OECD 201824 │ STRI POLICY TRENDS UP TO 2018
Figure A.7. Maritime transport services, 2017
Restrictions on foreign entry Restrictions to the movement of people Other discriminatory measures
Barriers to competition Regulatory transparency Average
STRI 2014
0.6
0.5
0.4
0.3
0.2
0.1
0
Figure A.8. Rail freight transport services, 2017
Restrictions on foreign entry Restrictions to the movement of people Other discriminatory measures
Barriers to competition Regulatory transparency Average
STRI 2014
1
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
© OECD 2018STRI POLICY TRENDS UP TO 2018 │ 25
Figure A.9. Road freight transport services, 2017
Restrictions on foreign entry Restrictions to the movement of people Other discriminatory measures
Barriers to competition Regulatory transparency Average
STRI 2014
0.5
0.4
0.3
0.2
0.1
0
Figure A.10. Courier services, 2017
Restrictions on foreign entry Restrictions to the movement of people Other discriminatory measures
Barriers to competition Regulatory transparency Average
STRI 2014
1
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
© OECD 201826 │ STRI POLICY TRENDS UP TO 2018
Figure A.11. Distribution services, 2017
Restrictions on foreign entry Restrictions to the movement of people Other discriminatory measures
Barriers to competition Regulatory transparency Average
STRI 2014
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
Figure A.12. Logistics cargo-handling services, 2017
Restrictions on foreign entry Restrictions to the movement of people Other discriminatory measures
Barriers to competition Regulatory transparency Average
STRI 2014
1
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
© OECD 2018STRI POLICY TRENDS UP TO 2018 │ 27
Figure A.13. Logistics storage and warehouse services, 2017
Restrictions on foreign entry Restrictions to the movement of people Other discriminatory measures
Barriers to competition Regulatory transparency Average
STRI 2014
1
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
Figure A.14. Logistics freight forwarding services, 2017
Restrictions on foreign entry Restrictions to the movement of people Other discriminatory measures
Barriers to competition Regulatory transparency Average
STRI 2014
0.5
0.45
0.4
0.35
0.3
0.25
0.2
0.15
0.1
0.05
0
© OECD 201828 │ STRI POLICY TRENDS UP TO 2018
Figure A.15. Logistics customs brokerage services, 2017
Restrictions on foreign entry Restrictions to the movement of people Other discriminatory measures
Barriers to competition Regulatory transparency Average
STRI 2014
1
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
Market bridging and supporting services
Figure A.16. Commercial banking services, 2017
Restrictions on foreign entry Restrictions to the movement of people Other discriminatory measures
Barriers to competition Regulatory transparency Average
STRI 2014
0.6
0.5
0.4
0.3
0.2
0.1
0
© OECD 2018STRI POLICY TRENDS UP TO 2018 │ 29
Figure A.17. Insurance services, 2017
Restrictions on foreign entry Restrictions to the movement of people Other discriminatory measures
Barriers to competition Regulatory transparency Average
STRI 2014
0.6
0.5
0.4
0.3
0.2
0.1
0
Figure A.18. Legal services, 2017
Restrictions on foreign entry Restrictions to the movement of people Other discriminatory measures
Barriers to competition Regulatory transparency Average
STRI 2014
1
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
© OECD 201830 │ STRI POLICY TRENDS UP TO 2018
Figure A.19. Accounting and auditing services, 2017
Restrictions on foreign entry Restrictions to the movement of people Other discriminatory measures
Barriers to competition Regulatory transparency Average
STRI 2014
1
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
Physical infrastructure services
Figure A.20. Construction services, 2017
Restrictions on foreign entry Restrictions to the movement of people Other discriminatory measures
Barriers to competition Regulatory transparency Average
STRI 2014
0.5
0.45
0.4
0.35
0.3
0.25
0.2
0.15
0.1
0.05
0
© OECD 2018STRI POLICY TRENDS UP TO 2018 │ 31
Figure A.21. Architecture services, 2017
Restrictions on foreign entry Restrictions to the movement of people Other discriminatory measures
Barriers to competition Regulatory transparency Average
STRI 2014
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
Figure A.22. Engineering services, 2017
Restrictions on foreign entry Restrictions to the movement of people Other discriminatory measures
Barriers to competition Regulatory transparency Average
STRI 2014
0.5
0.45
0.4
0.35
0.3
0.25
0.2
0.15
0.1
0.05
0
© OECD 2018OECD Services Trade Restrictiveness Index: Policy trends up to 2018 January 2018 http://oe.cd/stri
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