RESTRICTED
WORLD TRADE WT/ACC/KGZ/10/Add.1
19June1997
ORGANIZATION(97-2515)
Working Party ontheAccession Original: English
oftheKyrgyz Republic
ACCESSION OFTHE KYRGYZ REPUBLIC
Questions andReplies
totheMemorandum ontheForeign Trade Régime
(Document WT/ACC/KGZ/3)
Addendum
Attachment Aconcerning State-trading referred tointhereplies toquestions 2(c)and3(c)in
document WT/ACC/KGZ/10 andindocument WT/ACC/KGZ/9/Add.1 isreproduced hereunder.
_______________
INFORMATION ONSTATE TRADING
KYRGYZALCO
1. Description ofEnterprise
A. Describe, itembyitem, thefunctioning ofsuchenterprises andstate, inparticular, whether
theenterprise deals withexports orwithimports, orboth?
Kyrgyzalco isaState Joint Stock Company established byaPresidential Decree inJanuary
1996.ThemainpurposesforthecreationofKyrgyzalcoareconsumerprotectionandrevenuegeneration.
Under thestructure ofKyrgyzalco, there arecurrently 14jointstock companies. TheStatehasshares
inonlytwoofthese companies asfollows: 70percentand40percent.Theother 12companies are
private. Foreign investors maypurchase shares inthese companies. Currently, onlyoneofthe14
companies under Kyrgyzalco iswithforeign participation.
Each ofthese companies isindependent from theother andhasitsownfinancial statements.
Kyrgyzalco doesnotinterfere inthemanagement andtheoperations ofthese companies anddoesnot
influence prices ofproducts produced bythese companies. Anycompany mayapply tobecome under
thestructure ofKyrgyzalco. TheroleofKyrgyzalco istoconclude contracts withcompanies wishing
tobeunder itsstructure, issuelicenses tothese companies, andmonitor thatthese companies comply
withtheterms ofthecontract. Thecontract includes information regarding thevolume ofimport,
production, andsaleofalcoholic products. Thecontracts areusually issued foroneyearandaresubject
torenewal. Licenses areissued onthebasis ofthecontract andshould notexceed theterms ofthe
contract. Kyrgyzalco itselfisnotcurrently engaged inproduction. Kyrgyzalco mayimport andexport
alcohol andalcoholic products onbehalf ofthecompanies under itsstructure;WT/ACC/KGZ/10/Add.1
Page2
IntheKyrgyz Republic, licenses arecurrently required toimport, export, andproduce alcohol
andalcoholic products.1Kyrgyzalco istheonlybodyintheKyrgyz Republic authorized toissuethese
licenses. Onlycompanies under thestructure ofKyrgyzalco areallowed toobtain licenses forimporting
andexporting ethylalcohol andforproducing alcohol andalcoholic products. Kyrgyzalco isallowed
toperform allactivities which itlicenses.
Companies under Kyrgyzalco aremainly engaged intheproduction ofalcoholic products
including wine, liqueur, vodka, andbrandy. All14companies currently havelicenses toproduce and
export these alcoholic products.
B. Whether private traders areallowed toimport orexport and,ifso,onwhat conditions?
Anyperson (including private traders) mayobtain alicense from Kyrgyzalco toimport and
export alcoholic products (except ethyl alcohol). Only companies under thestructure ofKyrgyzalco
mayobtain licenses toimport/export ethyl alcohol.
C. Whether there isfreecompetition between private traders andtheState-trading enterprise?
There iscompetition inthetradeandproduction ofalcoholic products between the14companies
under thestructure ofKyrgyzalco. Inaddition, there iscompetition inthetrade ofalcoholic products
between private entities andcompanies under thestructure ofKyrgyzalco. Thedomestic market share
ofcompanies under thestructure ofKyrgyzalco inthesaleofalcoholic products wasapproximately
53percentin1996.
Onlycompanies under thestructure ofKyrgyzalco areallowed toobtain licenses forimporting
andexporting ethylalcohol andforproducing alcohol andalcoholic products. There isnocompetition
withprivate traders withrespect totheimport ofethylalcohol andproduction ofalcohol andalcoholic
products (except beer).
D. Thecriteria usedfordetermining thequantities tobeexported andimported.
Currently, Kyrgyzalco andcompanies under thestructure ofKyrgyzalco arenotengaged in
theimport ofalcoholic products (except import ofethyl alcohol). Export ofalcoholic products is
conducted byKyrgyzalco companies onlyonabarter basiswithsuppliers ofrawmaterials fromother
CIScountries. Themain factor forimporting ethyl alcohol isthelevel ofdemand byKyrgyzalco
producers.
E. Howexport prices aredetermined; howthemark-up onimported products isdetermined;
howexport prices andthere-sale prices ofimports compare withdomestic prices.
Currently, Kyrgyzalco andcompanies under thestructure ofKyrgyzalco arenotengaged in
theimport ofalcoholic products, except theimport ofethyl alcohol fortheirownuse. There isno
mark-up onimported ethyl alcohol since itisimported forownproduction bycompanies under the
structure ofKyrgyzalco.
CompaniesunderKyrgyzalcoareonlyexportingtootherCIScountriesonabarterbasis.Export
prices andinternal prices ofalcoholic products aredetermined according todemand.
1Theproduction ofbeerisexcepted. Other private companies areallowed toobtain licenses toproduce and
sellbeer.WT/ACC/KGZ/10/Add.1
Page3
F. Whether long-term contracts arenegotiated bytheState-trading enterprise; whether
State-trading methods areusedtofulfil contractual obligations entered intobytheGovernment?
NeitherKyrgyzalconorcompaniesunderthestructureofKyrgyzalcofulfilcontractualobligations
entered intobythegovernment. Contracts arenegotiated onacommercial basis.
2. Statistical Information
Thiscompany wasestablished in1996 andfigures areavailable foroneyear(1996) andin
quantity only.
Units in
thousand
litresNational
ProductionProduction-
companies
under
KyrgyzalcoTotal
ImportImport-
companies
under
KyrgyzalcoTotal
ExportExport-
companies
under
Kyrgyzalco
Alcoholic
Products
(excluding
beer)7,883 7,883 6,171 0 992 985
Spirits 19,205 19,205 98,894 98,894 15,063 15,063
3. Reasons WhyNoForeign Trade HasTaken Place (ifthisisthecase) InProducts Affected
Foreign trade hastaken place. Please seeanswer toSection IIabove.
4. Additional Information
None.
KARGYZTAMEKESI
1. Description ofEnterprise
A. Describe, itembyitem, thefunctioning ofsuchenterprises andstate, inparticular, whether
theenterprise deals withexports orwithimports, orboth?
KyrgyztamekesiisaStateJointStockCompanyestablishedbyPresidentialDecreeinMay1996.
There areseven companies under itsstructure (sixarejoint stock companies andoneisaState
enterprise). TheStateshare inthese companies isasfollows: 37percent; 40percent;65percent;
66percent;70percent;71percent;and100percent. Foreign participation ispermitted. Currently,
there isonlyonecompany withforeign participation (28percent). Each ofthese companies is
independent fromtheother andhasitsownfinancial statements. Thedirectors ofeachofthese seven
companies aremembers oftheBoard ofDirectors ofKyrgyztamekesi.
ThemainpurposeofestablishingKyrgyztamekesiare(1)stateregulationsoftobaccoandtobacco
products and(2)revenue generation. These seven companies areengaged intobacco fermentation,
production oftobacco products, saleoffermented tobacco, export offermented tobacco, andimport
ofauxiliary materials (e.g.filter) forproduction oftobacco products (foritsownuse). KyrgyztamekesiWT/ACC/KGZ/10/Add.1
Page4
hastheexclusive authority toissue licenses for(1)production oftobacco products andfermentation
oftobacco leaves and(2)export license forfermented tobacco.
Licenses arenotrequired fortheimport/export oftobacco products. Anyperson mayobtain
alicense toengage intheproduction oftobacco products andfermented tobacco andimport/export
offermented tobacco. Kyrgyztamekesi doesnothaveanyexclusive rights toexport fermented tobacco.
B. Whether private traders areallowed toimport orexport and,ifso,onwhat conditions?
Licenses arenotrequired fortheimport/export oftobacco products andanyperson may
import/export tobacco products. Anyperson mayobtain alicense toexport fermented tobacco.
Kyrgyztamekesi doesnothaveanyexclusive rights toexport fermented tobacco.
C. Whether there isfreecompetition between private traders andtheState-trading enterprise?
Yes.There isfreecompetition between private traders andKyrgyztamekesi. Kyrgyztamekesi 's
domestic market share inthesaleofcigarettes wasapproximately 96percentin1996anditsmarket
share intheexport offermented tobacco wasapproximately 14percentin1996.
D. Thecriteria usedfordetermining thequantities tobeexported andimported.
Thevolume ofexport isdetermined byproduction capabilities oftobacco products, volume
ofproduction oftobacco rawmaterials, andexternal market demand. Thelevelofimport ofauxiliary
items forproduction isbased onproduction plans ofKyrgyztamekesi.
E. Howexport prices aredetermined; howthemark-up onimported products isdetermined;
howexport prices andthere-sale prices ofimports compare withdomestic prices.
Theprices ofexported fermented tobacco arenegotiated between Kyrgyztamekesi andbuyers.
Currently, tobacco-fermentation plants operate onbarter basis forlackofworking capital.
F. Whether long-term contracts arenegotiated bytheState-trading enterprise; whether
State-trading methods areusedtofulfil contractual obligations entered intobytheGovernment?
Kyrgyztamekesidoesnotfulfilcontractualobligationsenteredintobythegovernment.Contracts
arenegotiated onacommercial basis.
2. Statistical Information
Thiscompany wasestablished in1996 andfigures areavailable foroneyear(1996).
National
ProductionProduction
Kyrgyz-
tamekesiTotal Import Import
Kyrgyz-
tamekesiTotal Export Export
Kyrgyz-
tamekesi
Cigarettes 975mil.units 975mil.units;
soms 43.3mil.353.2 mil.units,
soms 30.4mil.0 354.7 mil.units;
24.2mil.soms40.2mil.units;
soms 2.6mil.
Pipe
Tobacco550.9 t. 550.9 t. 0 0 539.9 t.;
12.6mil.soms539.9 t.;
soms 12.6mil.
Fermented
Tobacco13,168 t. 10,209.8 t. 6.0t.;
soms 84th.6.0t.;
soms 84.4th.8,362.7 t.;
soms 87.3mil.1,177.8 t.;
soms 12.5mil.WT/ACC/KGZ/10/Add.1
Page5
3. Reasons WhyNoForeign Trade HasTaken Place (ifthisisthecase) InProducts Affected
Foreign trade hastaken place. Please seeanswer toSection IIabove.
4. Additional Information
None.
KYRGYZGASMUNAIZAT
1. Description ofEnterprise
A. Describe, itembyitem, thefunctioning ofsuchenterprises andstate, inparticular, whether
theenterprise deals withexports orwithimports, orboth?
Kyrgyzgas andKyrgyzmunaizat merged according toPresident Decree No.30ofJanuary 1997.
Thenewcompany isaState Joint Stock Company called Kyrgyzgasmunaizat.
Kyrgyzgasmunaizat isengaged intheimport, storage, andsaleofoilproducts, natural gas,
andliquefied natural gas;andtheoperations oftheonlynatural gaspipeline intheKyrgyz Republic
usedonlyforimport.
B. Whether private traders areallowed toimport orexport and,ifso,onwhat conditions?
Anyprivate company hastherighttoimport andexport according tothesame conditions as
Kyrgyzgasmunaizat.Kyrgyzgasmunaizatimportsapproximately50percentofthenaturalgasconsumed
intheKyrgyz Republic. Theshare ofKyrgyzgasmunaizat intheimport ofliquefied natural gasis
approximately 35percent(first quarter of1997).
Anyperson mayimport andselloilproducts intheKyrgyz Republic. There isnoneedto
havealicense toimport oilproducts. Kyrgyzgasmunaizat 'sdomestic market share inthesaleofoil
products wasapproximately 2percentin1996.
C. Whether there isfreecompetition between private traders andtheState-trading enterprise?
There isfreecompetition intheimport/export ofnatural gas,liquefied natural gasandoil
products.
D. Thecriteria usedfordetermining thequantities tobeexported andimported.
Kyrgyzgasmunaizat isnotengaged inexport. Theonlycriterion fordetermining thevolume
ofimport isthedomestic demand oftheKyrgyz Republic.
E. Howexport prices aredetermined; howthemark-up onimported products isdetermined;
howexport prices andthere-sale prices ofimports compare withdomestic prices.
Kyrgyzgasmunaizat isnotengaged inexport. Themark-up onimports ofoilproducts should
notexceed 10percent. There isnospecific mark-up onimports ofliquefied gasanditismarket
based.WT/ACC/KGZ/10/Add.1
Page6
Domestic production ofnatural gasisnotsignificant. Natural gasisimported fromUzbekistan
atUS$55 per1,000 m3(includes US$10 forcostoftransportation). Natural gasissoldatUS$46
per1,000 m3forhouseholds andforindustry atUS$57.8 per1,000 m3.
Imported anddomestically produced oilproducts aresoldatcomparable prices.
F. Whether long-term contracts arenegotiated bytheState-trading enterprise; whether
State-trading methods areusedtofulfil contractual obligations entered intobytheGovernment?
State-trading methods areusedtofulfilcontractual obligations entered intobytheGovernment
(International Agreement onDelivery ofGasandTrading Cooperation) withrespect toimport ofnatural
gasfrom Uzbekistan andexport ofelectricity andother goods toUzbekistan.
2. Statistical Information
Statistical information isonlyavailable for1995 and1996.
1996 National
ProductionProduction-
KyrgyzgasmunaizatTotal
ImportImport-
KyrgyzgasmunaizatTotal
ExportExport-
Kyrgyzgasmunaizat
Natural gas
(mil.m3)25.6 0 1,027 * 0 0
Liquefied gas(ton) 0 0 16,354 * 0 0
Oilproducts
(tons):
gasoline
diesel fuel
crude oil2,811
5,279
84,0000
0
0174,401
132,624
12,1023,540
3,782
047.7
55.5
21,1030
0
0
1995 National
ProductionProduction-
KyrgyzgasmunaizatTotal
ImportImport-
KyrgyzgasmunaizatTotal
ExportExport-
Kyrgyzgasmunaizat
Natural gas
(mil. m3)36 0 847 * 0 0
Liquefied gas(ton) 0 0 9,490 * 205 0
Oilproducts
(tons):
gasoline
diesel fuel
crude oil0
0
88,5000
0
0211,769
133,087
2,94813,410
11,339
0467
720
24,60030
2
0
*Kyrgyzgasmunaizat wasnotengaged inthese activities in1995 and1996.
Theproduction ofbeer isexcepted. Other private companies areallowed toobtain
licenses toproduce andsellbeer.
3. Reasons WhyNoForeign Trade HasTaken Place (ifthisisthecase) InProducts Affected
Foreign tradehastaken place byother companies. Kyrgyzgasmunaizat imports approximately
50percentofthenatural gasconsumed intheKyrgyz Republic. Theshare ofkyrgyzgasmunaizat
intheimport ofliquefied natural gaswasapproximately 35percent (first quarter 1997).
Kyrygzgasmunaizat 'sdomestic market share inthesaleofoilproducts wasapproximately 2percent
in1996.
4. Additional Information
None.WT/ACC/KGZ/10/Add.1
Page7
KYRGYZ ENERGY HOLDING
1. Description ofEnterprise
A. Describe, itembyitem, thefunctioning ofsuchenterprises andstate, inparticular, whether
theenterprise deals withexports orwithimports, orboth?
Kyrgyz Energy Holding Company isengaged intheproduction, transmission, distribution,
import/export, andsaleofelectric power energy. Allcompanies under Kyrgyz Energy Holding are
currently State owned andsubject toprivatization. Foreign participation ispermitted.
B. Whether private traders areallowed toimport orexport and,ifso,onwhat conditions?
There arenorestrictions onStateandprivate entities ornatural persons toproduce, transmit,
distribute, sell,import, orexport energy andthermal power. Licenses tobeengaged inthese activities
must beobtained from theState Agency onEnergy Systems.
C. Whether there isfreecompetition between private traders andtheState-trading enterprise?
There arenoregulatory restrictions orbarriers forprivate traders tobeengaged intheimport
andexport ofpower energy. However, there arenoprivate traders currently.
D. Thecriteria usedfordetermining thequantities tobeexported andimported.
Demand forelectricity dictate theimport ofelectricity. Export quantity depends oncontracts
withforeign importers ofKyrgyz power.
E. Howexport prices aredetermined; howthemark-up onimported products isdetermined;
howexport prices andthere-sale prices ofimports compare withdomestic prices.
Export prices fortheelectric energy aredetermined asaresult ofnegotiations between Kyrgyz
Energy Holding andforeign importers. Export prices are1.4to2.2times higher thandomestic prices.
TheKyrgyz Republic doesnotimport electric energy.
F. Whether long-term contracts arenegotiated bytheState-trading enterprise; whether
State-trading methods areusedtofulfil contractual obligations entered intobytheGovernment?
Asarule,contracts onthedelivery ofelectricity areconcluded either foracalendar yearor
foracertain quantity during thecontractual term. State-trading methods areusedtofulfilcontractual
obligations entered intobytheCabinet ofMinisters oftheKyrgyz Republic. Thefollowing twobarter
agreements exist:
- energy power isexported toUzbekistan and,inreturn, natural gasisimported fromUzbekistan
totheKyrgyz Republic;
- energy power isexported toKazakstan and,inreturn, coalisimported from Kazakstan to
theKyrgyz Republic.WT/ACC/KGZ/10/Add.1
Page8
2. Statistical Information
National
ProductionProduction -
Kyrgyz Energy
HoldingTotal
ImportImport -
Kyrgyz Energy
HoldingTotal
ExportExport -Kyrgyz
Energy Holding
1996 12,931.6 12,858.9 0 0 2,376.9 2,376.9
1995 12,349.4 12,283.2 254.4 254.4 1,622.0 1,622.0
1994 13,678.0 13,678.0 815.1 815.1 2,880.8 2,880.8
3. Reasons WhyNoForeign Trade HasTaken Place (ifthisisthecase) InProducts Affected.
Foreign trade hastaken place byKyrgyz Energy Holding. There arenoregulatory barriers
toentry. Anyentity maygetalicense tobeengaged inforeign trade ofpower energy.
4. Additional Information
None.
KYRGYZKOMUR
1. Description ofEnterprise
A. Describe, itembyitem, thefunctioning ofsuchenterprises andstate, inparticular, whether
theenterprise deals with exports orwithimports, orboth?
Kyrgyzkomur isengaged inthemining andexport ofcoal.
B. Whether private traders areallowed toimport orexport and,ifso,onwhat conditions?
Anyprivate trader isallowed toimport andexport coal. Nolicenses arerequired. Themarket
share ofKyrgyzkomur inthetotalexport ofcoalwas77.6percentin1996.
C. Whether there isfreecompetition between private traders andtheState-trading enterprise?
Yes.There isfreecompetition between private traders andKyrgyzkomur. Themarket share
ofKyrgyzkomur inthesaleofcoalintheKyrgyz Republic is24percentin1996.
D. Thecriteria usedfordetermining thequantities tobeexported andimported.
Thecriteria forquantities tobeexported arethefollowing: demand byimporters ofother
countries, quantity produced, anddemand ofdomestic market.
E. Howexport prices aredetermined; howthemark-up onimported products isdetermined;
howexport prices andthere-sale prices ofimports compare withdomestic prices?
Export prices aredetermined onthebasisofcontract. Export prices depend ontheconditions
ofthecontract andcould behigher orlower thandomestic prices. Kyrgyzkomur doesnotimport any
coal.WT/ACC/KGZ/10/Add.1
Page9
F. Whether long-term contracts arenegotiated bytheState-trading enterprise; whether
State-trading methods areusedtofulfil contractual obligations entered intobytheGovernment?
Contracts onthedelivery ofproducts areconcluded, asarule,either foronecalendar year
orforacertain volume ofdeliveries during thecontractual term. State-trading methods for
implementation ofobligation entered intobytheKyrgyz Republic donotexist.
2. Statistical Information
In
thousands
oftonsNational
ProductionProduction -
KyrgyzkomurTotal
ImportImport -
KyrgyzkomurTotal
ExportExport -
Kyrgyzkomur
1996 431.8 360.7 849.4 0 100.4 77.9
1995 463.2 400.4 500.1 0 172.6 97.0
1994 805.0 750.0 2,710.9 0 341.1 161.4
3. Reasons WhyNoForeign Trade HasTaken Place (ifthisisthecase) InProducts Affected.
Foreign trade hastaken place. Please seeresponse toSection IIabove.
4. Additional Information
None
KYRGYZALTYN
1. Description ofEnterprise
A. Describe, itembyitem, thefunctioning ofsuchenterprises andsate,inparticular, whether
theenterprise deals withexports orwithimports, orboth?
Kyrgzyaltyn isengaged inthemining, processing import andexport ofgold, antimony, and
mercury.KyrgyzaltynisaStateenterprise,establishedon15October1992throughaPresidentialdecree.
Themain purpose ofcreation ofsuch company are(1)toincrease ofgold production and
(2)enhancement offreeentrepreneur 'sactivity and(3)tocontrol goldresources. There arethree
companiesunderKyrgyzaltyn:MakmalGoldMining(100percentState-owned)andKadamjaiAntimony
Company (78percentState-owned), andHydercom Mercury Company (70percent).
There arefivejointventures between theStateandforeign companies where theStatecurrently
retains atleast50percentofshares ineachofthese companies. Kyrgyzaltyn manages theStateshares
inthese fivejointventures. Only oneofthese companies (Kumtor Gold) isproducing andexporting
gold. Theother fourareengaged inexploration.
B. Whether private traders areallowed toimport orexport and,ifso,onwhat conditions?
Private traders areallowed toimport andexport gold, antimony, andmercury. Nosingle
company including Kyrgyzaltyn hasanyexclusive rights forengaging inimport andexport. Any
company mayapply andobtain alicense toexport andimport fromtheMinistry ofIndustry andForeign
Trade. Prior totheissuance ofalicense, thecontract mustbereviewed forexpertise byKyrgyzaltyn.WT/ACC/KGZ/10/Add.1
Page10
Alicense tobeengaged intheexport ofmercury andantimony willnotbegranted iftheexport contract
doesnotstipulate saletothefinalconsumer. Re-export andre-sale ofexported mercury andantimony
areprohibited.
C. Whether there isfreecompetition between private traders andtheState-trading enterprise?
Currently, Kyrgyzaltyn andKumtor Gold (please notethatthese twocompanies arerelated)
aretheonlytwoproducers andexporters ofgold. Themarket share ofKyrgyzaltyn intheexport of
goldisnotpubliclyavailable.ThemarketshareofKyrgyzaltynintheexportofantimonyis100percent;
andexport ofmercury is100percent.
D. Thecriteria usedfordetermining thequantities tobeexported andimported.
Kyrgyzaltyn isnotcurrently engaged intheimport ofgold, mercury, andantimony. The
demand bytheworld market andeconomic profitability dictate thequantities ofgold, mercury and
antimony tobeexported.
E. Howexport prices aredetermined; howthemark-up onimported products isdetermined;
howexport prices andthere-sale prices ofimports compare withdomestic prices.
Until recently, allgoldproduced byKyrgyzaltyn wassoldtotheNational Bank oftheKyrgyz
Republic.
Export prices ofgold, antimony, andmercury arenegotiated between Kyrgyzstan andthe
importers ofKyrgyz gold, antimony, andmercury andusually established onthebasis ofsaleinthe
world market inaccordance withtheLondon Metal Exchange.
Currently, there isnoimport andsignificant domestic consumption ofsuchproducts, except
fortheproduction ofjewellery. Incaseoffuture domestic consumption, domestic prices willbebased
onworld market prices inaccordance withtheLondon Metal Exchange.
F. Whether long-term contracts arenegotiated bytheState-trading enterprise; whether
State-trading methods areusedtofulfil contractual obligations entered intobytheGovernment?
Information isnotavailable.
2. Statistical Information
Inaccordance withinstructions oftheMinistry ofNational Security, information regarding
goldandmercury isnotpublicly available.
National
ProductionProduction-
KyrgyzaltynTotal
ImportImport-
KyrgyzaltynTotal
ExportExport-
KyrgyzaltynAntimony
(tons)
1996 6,001.9 6,001.9 0.0 4,700.1 0.0 4,700.1
1995 7,053.2 7,053.2 99.0 6,283.4 99.0 6,283.4
1994 9,588.0 9,588.0 0.0 8,687.1 0.0 8,687.1
3. Reasons WhyNoForeign Trade HasTaken Place (ifthisisthecase) InProducts Affected.
Foreign trade hastaken place inallaffected products.
4. Additional Information
None.