India Files WTO Challenge Against US Visa Fee Increases

India has has filed a dispute against the US under the WTO Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU) which constitutes Annex 2 of the WTO Agreement and has requested consultations with the US.

According to the dispute, under the Consolidated Appropriations Act of 2016, Washington increased fees for L-1 type visas by US$4500 and for H-1B type visas by US$4000 for companies with 50 or more employees in the US, if more than 50 percent of their employees are non-immigrants employed on such visas. It was signed into law by President Barack Obama in December 2015, with the measures in place through September 2025.

H1B is work permit for temporary specialty workers while L1 visas are issued for intra-company transfers that allows companies to relocate qualified employees to US offices.

India claims that these measures, along with earlier fee increases between August 2010 and September 2015, appear to violate the US’ commitments under its Schedule of Specific Commitments under the WTO’s General Agreement on Trade in Services (GATS) – the set of global rules involving services trade- along with being inconsistent with other GATS provisions. 

India claims that the visa fee increases: 

appear to: (i) be inconsistent with the terms, limitations and conditions agreed to and specified by the United States in its Schedule of Specific Commitments under the GATS, (ii) accord to juridical persons of India having a commercial presence in the United States treatment that is less favorable than that accorded to juridical persons of the United States engaged in providing like services in sectors such as the Computer and Related Services sector with respect to which the United States has taken commitments in its Schedule of Specific Commitments, and (iii) affect the movement of natural persons seeking to supply services in a manner that is inconsistent with the United States' commitments in its Schedule of Specific Commitments. These measures also appear to nullify or impair the benefits accruing to India directly and indirectly under the GATS. 

In its complaint, India said that the current measures (of visa fee hike) result in less favorable treatment for Indian companies with commercial presence in the US in comparison to US companies engaged in providing like services and according to the GATS Schedule. 

This violates the principle of ‘national treatment’ embedded in multilateral trade rules, which lays down that foreign companies will be treated on a par with local firms. 

The Government of India is of the view that these and comparable measures, taken by the United States are not in conformity with at least the following provisions of the GATS: Articles XVI, XVII, XX, and paragraphs 3 and 4 of the GATS Annex on Movement of Natural Persons Supplying Services. These measures also appear to be inconsistent with Articles III:3, IV:1 and VI:1 of the GAT 

Furthermore, New Delhi is also claiming that recent US changes to its numerical commitment for H-1B visas – specifically due to modifications Washington has made under FTAs with Singapore and Chile – also are inconsistent with its GATS schedule. 

According to the consultations request, the US included under its horizontal commitments regarding mode 4 – that involving the movement of natural persons – that it would permit up to 65,000 people annually on a worldwide basis under the category of fashion models and specialty occupations. 

Under the two FTAs mentioned above, these “numerical commitments” have allegedly been changed. According to India, US homeland security officials must now set country-specific limits for both countries, with these numbers taken away from the global total of 65,000 receiving H-1B visas.

EALA Calls for Elimination of Work Permit Fees in the EAC

The East African Legislative Assembly (EALA) has passed a Motion for a Resolution advocating for the elimination of work permit fees for EAC citizens in the spirit of enhancing free movement of workers in line with the freedoms in the EAC Common Market Protocol.  

In this respect, the Assembly also commended the Republic of Kenya and Rwanda for taking the first steps in eliminating the work permit fees for the citizens of the EAC and urged the United Republic of Tanzania, the Republic of Burundi and the Republic of Uganda to emulate the same spirit.

Article 49 of the EAC Treaty establishes EALA as the legislative organ of the Community.  Like most legislatures EALA has as its core functions legislating, oversight and representation. Article 49 further states that EALA:

• Shall liaise with the National Assemblies of Partner States on matters relating to the Community;

• Shall debate and approve the budget of the Community;

• Shall consider annual reports on the activities of the Community, annual audit reports of the Audit Commission and any other reports referred to it by the Council;

• Shall discuss all matters pertaining to the Community and make recommendations to the Council as it may deem necessary for the implementation of the Treaty;

• May for purposes of carrying out its functions, establish any committee or committees for such purposes as it deems necessary;

• Shall recommend to the Council the appointment of the Clerk and other officers of the Assembly;

• Shall make its rules of procedure and those of its committees

The Resolution passed in the House notes that EAC citizens have been subjected to altered work permit fees in the region which are divided in to several classes catering for different professions.    The United Republic of Tanzania according to the Resolution has a total of 13 sub-classes, Uganda 9, while Rwanda and Burundi have 2 sub-classes each. 

The Resolution moved by Hon Bernard Mulengani and seconded by Hon Abubakar Zein Abubakar, takes cognisance of the fact that Article 76 of the Treaty for the establishment of the EAC recognises that within the Common Market Protocol (CMP), there shall be free movement of labour, goods, services, capital and the right of establishment.   Article 10 of the Common Market Protocol on its part, guarantees that the Partner States do provide for free movement of workers, who are citizens of the other Partner States within their territories.

Regulation 6 of the Free Movement of Workers Regulations in the EAC Common Market Protocol (CMP) states that a worker shall apply for a work permit from the competent authority within 15 days of entry into the territory of a Partner State provided they have a valid contract of employment for a period of more than 90 days.

According to the Resolution, the current fee charged to obtain work permits also vary.  In the United Republic of Tanzania, the fees range from USD 6 for peasants up to USD 3,000 for miners while in Uganda it ranges from USD 250 for missionaries up to USD 2500 for miners.   In Burundi, the fees range from USD 60 for students to USD 84 for regular workers.  The objective of the work permit is seen as a mode of earning revenue and taxes or regulation of free movement of workers.

In the Resolution thus, EALA urged the Council of Ministers to call for harmonisation of national laws in order to allow for free movement of labour and services.

Supporting the motion, Hon Abubakar Zein Abubakar said the move would create a sense of ‘East Africaness’ and would ensure ultimately, ‘Brand East Africa’ is realised.  He called for a sense of identity and mutual benefit amongst citizens and said abolishing work permits was a step in that direction.  Others noted the Motion as timely to take the integration to the next level that the region had continued to realise some benefits accruing from the Common Market Protocol and noted that the imaginary fears especially about loss of revenue and insecurity should be dispelled.  The legislator noted that today over 170 Kenyan companies had set up operations in Rwanda and the move was greatly benefiting Rwandans.   

Hon Maryam Ussi supported the motion with caution noting that there were still threats of terrorism around the borders.   ‘If international passports can be forged, then even the East African passports are subject to forgery’, the legislator remarked. On equality of jobs and provision of services, others noted that many citizens were still unable to work in the neighbouring Partner States and its was further noted that some Partner States were hiding behind bureaucracies to deny free movement noting that currently, work permit fees were also high. ‘I congratulate Kenya and Rwanda for the move to withdraw permit fees and also note that Kenya and Uganda are working on a similar bilateral move’, Hon Nakawuki said.  It was also noted that the issue of permits had been used as Non-Tariff Barriers and said the decision by Rwanda and Kenya to collaborate in the matter exemplified the Principle of Variable Geometry which applies in the integration model. 

Rising in support of the motion, Hon Abdullah Mwinyi however maintained that work permits were a monitoring instrument in absence of the identity cards.  ‘I request for a scientific analysis to see the amount of revenue raised by the citizens of the region arising from the work permits’ the Member noted.

In response, the Deputy Minister of EAC in the United Republic of Tanzania, Dr. Abdulla Sadaalla noted that harmonisation of the national laws was currently in progress and that United Republic of Tanzania had reviewed relevant laws, in alignment to the Common Market Protocol.’ I can confirm that we have finalised the review process and are now awaiting the process of ratification’, the Minister remarked.  Hon Leontine Nzeyimana, Minister of EAC in the Republic of Burundi pledged the Ministry would pursue the removal of the work permit fees with the authorities.

The Chair of the Council of Ministers, Hon Shem Bageine reiterated the need for all Partner States to fully implement the Common Market.  He lauded the Republics of Kenya and Rwanda for the bold move in abolishing permit fees.   Hon Bageine remarked that Republic of Uganda recently made the decision to abolish work permit fees for citizens in Uganda.   He noted that at the moment, it was necessary to abolish the work permit fees but eventually, once we federate, (Political Federation), then the work permits would be totally removed.   The Council of Ministers, Hon Bageine remarked, shall deliberate into the matter and make the necessary follow-up with regards to ensuring the full implementation of the Common Market Protocol.

EAC Stockbrokers Adopt Compulsory Certification Training

Both the East African Securities Regulatory Authorities (EASRA) and the East African Stock Exchanges Association (EASEA) have agreed that professional Capital Market employees will be required to take a certification course, whose curriculum the two bodies have agreed on. The certification aims to standardise qualification requirements for key market activities in the EAC such as trading, asset management, and investment banking. Since certification is being implemented at a regional level, it should be standardised and ideally recognised globally, which allows a graduate to work anywhere. In this regard, the EAC Common Market Protocol under Part D on Free Movement of Persons and Labour, provides provisions on Harmonisation and Mutual Recognition of Academic and Professional Qualifications (Article 11) and hence an advantage of the certification training is that certified staff in the EAC can work in other EAC stock exchanges.

This is also important because the EAC Common Market Protocol (CMP) provides for the Free Movement of Capital in Part G Articles 24-28. Certification is therefore also important with regard to regional integration and capital account liberalisation. The CMP provisions provide for the elimination of Restrictions on the Free Movement of Of Capital which are reflected in Annex VI (Schedule on the Removal of Restrictions on the Free Movement of Capital). The Schedule contains commitments in equity and portfolio investments, bank transactions, repatriation of proceeds from sale of assets and other transfers and payments relating to investment flows.

Formal certification procedures will also help the market players to have a clear understanding of market regulations and the requisite qualifications to perform their responsibilities. It is acknowledged that a lack of properly qualified staff and fraudulent trading of customers’ shares was blamed for the collapse of Kenyan stock brokerage firms between 2007 and 2010.

Scheduled courses under the programme include fundamental securities, market participants training, officers and directors course. The certification course was agreed upon during an EASRA consultative meeting that was held in Bujumbura, Burundi, in March however, rules on frequency of training, examinations and those to be exempted based on other courses taken are yet to be finalised.

There are, however, other programmes in the region that have been running on a voluntary basis and without certification such as those run by the Securities Industry Training Institute, which is based in Kampala.

The most outstanding achievement in terms of EAC capital markets integration so far has been the cross listing initiative that has made it possible for seven, five and three companies to cross list from the NSE to the USE, DSE and RSE respectively. A road map for the integration of the EAC capital markets has also been developed to guide the integration process in the EAC capital markets industry in light of the EAC Common Market Protocol and in preparation for the proposed East African Monetary Union.

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