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EAC offers recommendations for business licensing procedure
The Economic Advisory Council’s report on policy reform submitted to Governor Togiola Tulafono states that business licensing is an area of concern, and one of the major problems recognized by the private sector is that the process by which a business license application is reviewed and approved or disapproved is lengthy and cumbersome.
“This may discourage an applicant from establishing a small business, and possibly pose a threat to the individual’s livelihood and income,” the EAC pointed out.
The average time for processing a business license in the territory is said to be at least six months and this, according to the Council, cannot compete with other countries around the world where anything more than one week (provided all documents are in order) would be deemed poor service.
The EAC says that it could take up to six months for new investors to navigate the cumbersome business license application process, assuming that the investors have employed a competent person to guide them through the complex process.
“The concept of policy reform can be both simple and difficult,” the EAC noted. “In its simple format, policy reform may entail no more than a simplification of procedures designed to make doing business with the American Samoa Government easier.”
For the purposes of its report on policy reform, the EAC is assuming the role of non-US overseas investors who intend to establish a manufacturing operation in the territory to service the US market. To ensure a balanced view of each issue, substantial discussions have been held with various government departments and their comments have been incorporated in the recommendations voiced by the EAC.
With regards to business licensing, the EAC points out that the current practice by ASG, as required by law, is that a license be obtained for any and all activity added to an already established business. This means that a business is unable to operate more than one business under the same corporation, without obtaining a further business license. One example is where an individual required a separate license to run a computer repair operation and a sewing machine repair operation.
The EAC proposes that this provision be removed or an amendment be made to the statute, because “it only makes the process longer and frustrating for both ASG and the applicant.”
In reality, according to the EAC, the process should be very simple, provided an investor is prepared to abide by the law and commit capital to establish a business.
“It is acknowledged that this concept does not extend to more regulated industries such as telecommunications, insurance and banking where industry specific licenses are required,” the EAC points out.
(The Territorial Planning Commission (TPC) is the entity that gives the final call on a business license application before it is forwarded to the Governor for approval/disapproval. Prior to the TPC, the application is required to obtain approvals and signatures from seven other agencies).
The EAC suggests that TPC statutes and rules be revisited to help alleviate the business licensing process and ensure fairness in decisions made.
The Council noted that the Department of Commerce was recently awarded a Technical Assistant Grant by the U.S. Department of Interior to set up a “One-Stop Shop” type of system for permitting and business licensing in American Samoa.
“The Council is in full support of this effort and wishes that the needs of the private sector be considered and met when designing this project,” the report says. “This ‘One-Stop Shop’ system will ease up the permitting and business licensing process, and will encourage entrepreneurs and outside investors to establish and conduct business in the Territory. This will most definitely be beneficial to the local economy.”
The report states that during discussions held with the Department of Commerce, the DOC generally supported the recommendations made by the EAC and the Council was delighted to hear that the “One-Stop Shop” concept remains a focus of DOC moving forward.
The procurement process for this project has started and will be carried out in two phases. The first phase will be the e-permitting and computerizing of basic information, while the second part will be connecting all involved agencies.
For business license applications, the Council recommends revising the existing TPC Statutes and Rules with a strong view to simplification, and ensuring that only one agency is required to approve an application or at most, two agencies where special requirements exist (e.g. Department of Health, in the case of food vendors).
The EAC also recommends that there be one business license in instances where multiple but similar operations exist, (e.g., only one license should be issued for a retailer, not separate licenses depending on what is being retailed), and that a maximum acceptable time frame is established for completing the process and implementing the required change to ensure this standard is met. The recommended standard is one week, to be reduced to one day over time.
Lastly, the Council recommends pursuing the One-Stop Shop concept as a matter of urgency.
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