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Proposal to amend the law establishing the RAEOA and the ZEESM approved in general terms by the National Parliament

Tue. 24 of Outubro of 2023, 18:27h
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On October 24th, 2023, the Minister of the Presidency of the Council of Ministers, Agio Pereira, representing the Prime Minister, Kay Rala Xanana Gusmão, presented to the National Parliament the law proposal aimed at making the third amendment to Law no. 3/2014, of June 18th, which established the Special Administrative Region of Oe-Cússe Ambeno (RAEOA) and established The Special Social Economy Market Zone of Oe-Cússe Ambeno and Atauro.

Minister Agio Pereira was accompanied during the debate in the National Parliament by the Minister of State Administration, Tomás do Rosário Cabral, the Vice-Minister for Parliamentary Affairs, Adérito Hugo da Costa, and the Vice-Minister of Finance, Felicia Claudinanda da Cruz Carvalho.

The law proposal was approved in general terms with 37 votes in favour, 19 against and 4 abstentions from the members of the National Parliament.

The law proposal presented by the Government has five main objectives:

The first objective is to improve the statute of The Special Administrative Region of Oe-Cússe Ambeno, updating it to reflect changes in the management of the National Public Administration and Public Finances. The proposal also aims to adjust the provisions on the relationship of supervision and oversight that the Government, as the sovereign body, must exercise over the region. It is also proposed to strengthen the RAEOA's control mechanisms and budgetary and financial autonomy, making them more similar to those of the public administrative sector. The elimination of the possibility of the RAEOA having an independent tax system is proposed to maintain the unity of the national tax system while allowing for the establishment of specific taxes, differentiated tax rates and the allocation of a portion of the taxes collected in the region as local revenue.

In the second objective, the law proposal aims to remove from Law 3/2014 of June 18th concepts from foreign legal systems, such as “executive orders”, which have no constitutional support and do not apply to local reality. This will allow the RAEOA to issue regional administrative regulations as long as they comply with the law applicable throughout the national territory.

The third objective entails incorporating the rules contained in Decree-Law no. 5/2015, of January 22nd, into Law no. 3/2014, given that the Government considers that a law of the National Parliament should deal with these. The proposal seeks to clearly establish the matters that fall exclusively to the Government and those that can be delegated or pursued by the RAEOA. Matters such as defence, security, public order, foreign relations, bilateral and multilateral cooperation, and oil activities should remain under the exclusive competence of the Government.

The fourth objective is to adjust the status of the Special Administrative Region of Oe-Cússe Ambeno to the classification established in 2022 by the Court of Appeal, which integrates it into the State's indirect administration. This implies that the President of the Region's Authority must be accountable to the Prime Minister regarding his actions and the Region's socio-economic development.

Lastly, the fifth objective aims to delegate the definition of special economic development zones to a separate piece of legislation, meaning all references to the Special Social Economy Market Zone of Oe-Cússe Ambeno and Atauro should be removed from Law no. 3/2014 of June 18th.  WhatsApp Image 2023-10-24 at 14.44.07

Minister Agio Pereira explained, in his speech at the opening of the debate, that what “motivated the 9th Constitutional Government to present the law proposal that intends to make the third amendment to Law no. 3/2014, of June 18th to the representatives of the people, to the representatives of all the Timorese” was “the well-being of the population of Oe-Cússe Ambeno”.

The Minister assured that “the 9th Constitutional Government does not intend to put an end to the regime of Special Social Market Economy Zones” but rather to “establish a model that can be adopted in various parts of the national territory” to “allow this economic and social development to reach everyone, which is why it is necessary to create legal instruments that enable the Government to intervene in more disadvantaged areas and to do this intervention for the population and with the population”.

“A Special Zone should not be exclusive to a given part of Timor-Leste's territory. Rather, it should be able to be adopted in various parts of the national territory to tackle regional asymmetries. A model of special economic development zones specific to Timor-Leste that considers the specificities of our country's different regions”, added the Minister of the Presidency of the Council of Ministers.

Agio Pereira ended his speech by expressing the Government's willingness “to analyse in the speciality discussion with the Honourable Members of Parliament any possible amendments aimed at improving the law proposal and ultimately the well-being of the population and the socio-economic development of Oe-Cússe-Ambeno”.