RESTRICTED
WORLD TRADE WT/ACC/KGZ/10
5June1997
ORGANIZATION(97-2356)
Working Party ontheAccession Original: English
oftheKyrgyz Republic
ACCESSION OFTHE KYRGYZ REPUBLIC
Questions andReplies
totheMemorandum ontheForeign Trade Régime
(Document WT/ACC/KGZ/3)
Additional questions submitted byMembers andthereplies thereto provided bytheauthorities
oftheKyrgyz Republic arereproduced hereunder.
_______________
TABLE OFCONTENTS
Page Question
II. ECONOMY, POLICIES AND FOREIGN TRADE 3
2. Economic Policies
(b) Monetary andfiscal policy 3 1
(e) Competition policy 4 2-3
III. FRAMEWORK FOR MAKING AND ENFORCING POLICIES
AFFECTING FOREIGN TRADE INGOODS AND TRADE IN
SERVICES 10
4. Legislative Programmes orPlans toChange theRegulatory Régime 10 4
IV. POLICIES AFFECTING TRADE INGOODS 10
1. Import Regulation 10
(b) Characteristics ofnational tariff, customs tariff nomenclature (HS),
types ofduties, general description ofthecustoms tariff structure,
weighted average levelofduties onmain customs tariff groupings,
application ofMFN tariff rates, tariff preferences 11 5
(c) Tariff quotas, tariff exemptions 12 6
(h) Customs valuation 12 7
(i) Other customs formalities 13 8
(k) Application ofinternal taxes onimports 14 9-10
(m)(n) Anti-dumping regime, Countervailing dutyregime 16 11-12
(o) Special purpose duties 18 13
2. Export Regulation 19
(d) Export licensing procedures 19 14-15
(f) Export financing, subsidy, andpromotion policies 20 16WT/ACC/KGZ/10
Page2
3. Internal Policies Affecting Foreign Trade inGoods 21
(b) Technical regulations andstandards, including border measures 21 17-18
(c) Sanitary andphytosanitary measures 22 19
(e) State-trading practices 22 20
(f)(g) Freezones, Freeeconomic zones 23 21
(l) Government procurement practices 24 22
4. Policies Affecting Foreign Trade inAgricultural Products 24
(b) Exports 24
(e) Internal policies 25 23-30
V. TRADE-RELATED INTELLECTUAL PROPERTY REGIME 27
1. General 27
(d) Application ofnational andMFN treatment toforeign nationals 27 31-32
2. Substantive Standards ofProtection 28 33-35
(a) Copyright andrelated rights 29 36-39
(b) Trademarks, including service marks 30 40-45
(g) Layout designs ofintegrated circuits 31 46-48
4. Enforcement 32
(e) Criminal procedures 32 49
VI. TRADE-RELATED SERVICES REGIME 34
1. General 34 50
VII. INSTITUTIONAL BASE FOR TRADE AND ECONOMIC
RELATIONS WITH THIRD COUNTRIES 34
1. Bilateral, Plurilateral andMultilateral Agreements Relating
toForeign Trade inGoods andTrade inServices 34
(b) Plurilateral agreements relating toforeign trade ingoods andtrade 34
2. Economic Integration, Customs Union andFreeTrade Agreements 35
(c) FreeTrade Area Agreements 35 51-52WT/ACC/KGZ/10
Page3
II. ECONOMY, POLICIES AND FOREIGN TRADE
II.2 Economic Policies
TheKyrgyz Republic hasliberalized most ofitsinternational trade policies since 1994. Weseek
confirmation intheaccession protocol thattheformer statemonopoly inforeign trade hasbeen
abolished andthatnorestrictions exist ontheright offoreign anddomestic individuals and
enterprises toimport andexport goods andservices within thecustoms territory oftheKyrgyz
Republic, except asprovided forinWTO Agreements. Weseek further confirmation that
individuals andfirms arenotrestricted intheirability toimport orexport based ontheirregistered
scope ofbusiness, andthecriteria foranytypeofbusiness ortrade registration orlicensing of
companies intheKyrgyz Republic aregenerally applicable andpublished intheanOfficial Gazette.
II.2(b) Monetary andfiscal policy
Privatization
Question 1.
Theresponse toquestion 7inWT/ACC/KGZ/5/Add.2 indicates thatthecurrent privatization
plancallsfortheGovernment toretain a70percentownership interest inabroad spectrum
ofservices, including hotels, tourism, andhealth careproviders.
- Willthisrequirement change infuture privatization programs?
- What management rolewillGovernment playgiven thiscontrolling ownership role?
- Willthese requirements affect thecommitments thattheKyrgyz Republic isprepared
tomake concerning therightofforeign service providers tooperate inthese sectors without
Government equity participation?
Answer:
Article 6oftheResolution onConcept ofDestatization andPrivatization ofResort, Recreation,
andTourism Objects; Article 5oftheResolution onConcept ofDestatization andPrivatization of
Sporting andPhysical Training Objects; andArticle 7oftheResolution onConcept ofDestatization
andPrivatization ofCultural Objects permit theStatetoretain, onacase-by casebasis, upto70percent
ownership interest inobjects connected withresort, recreation, sporting, physical training, cultural,
andtourism services. Although theGovernment mayhavecontrolling ownership role,theGovernment
willnotplayanymanagement role.
Allowing theStatetoretain upto70percentownership willnotaffect thecommitments that
theKyrgyz Republic isprepared tomake concerning therightofforeign service providers tooperate
inthesesectors without Government equity participation. Foreign service providers mayestablish and
operate today inthese sectors intheKyrgyz Republic without government participation.
Wewould appreciate confirmation bytheKyrgyz Republic initsprotocol ofaccession thatitagrees
thatitisimportant toensure fulltransparency andtokeepWTO members informed ofitsprogress
inthereform ofitstransforming economic andtrade regime, andintheprogress ofitsvarious
privatization programs.
Weseek acommitment from theKyrgyz Republic toprovide annually toWTO members
information ondevelopments initsprogram ofprivatization along thelinesofthatbeing providedWT/ACC/KGZ/10
Page4
totheWorking Party during theaccession progress, andonother issues related toitseconomic
reforms asrelevant toitsobligations under theWTO.
II.2(e) Competition policies
Question 2.
According toWT/ACC/KGZ/3 a"natural monopoly" isdefined toinclude anyentity forwhich
thecreation ofcompetition isimpossible. However, theterm "natural monopoly" alsoincludes
avariety ofindustries thatarenotnormally considered as"natural", including enterprises for
which theState hasactually created amonopoly bylaw.TheAnti-Monopoly Department (AMD)
regulates theprices charged bynatural monopolies.
(a) Doesthelabel"natural monopoly" indicate anyrestraints onmarket entry byother firms?
Will foreign funded enterprises beabletoinvest insectors dominated by"natural"
monopolies?
Answer:
Thelabel"natural monopoly" doesnotindicate anyrestraints onmarket entry byother firms.
Foreign funded enterprises arecurrently abletoinvest insectors dominated by"natural" monopolies
intheKyrgyz Republic.
(b) According totheMemorandum, enterprises engaged infertilizer production andthe
mining andprocessing ofmineral resources arespecifically mentioned asnatural monopolies.
However, theresponse toquestion 1ofWT/ACC/KGZ/5 doesnotappear toinclude any"natural
monopolies" engaged inthese activities. Please explain thisapparent contradiction.
Answer:
RegulationNo.152oftheAnti-MonopolyDepartmentof29November1993definesthesectors
inwhich entities maybeconsidered natural monopolies. These sectors include (please seePartIV.2.e
ofWT/ACC/KGZ/3) fertilizer production andthemining andprocessing ofmineral resources. The
Anti-Monopoly Department, however, hasdetermined thatonlytheseven companies, listed inthe
response toquestion 1ofWT/ACC/KGZ/3, arenatural monopolies.
Thedraftnatural monopoly lawlimits thesectors which maybeconsidered natural monopolies
tothefollowing: oilandgaspipelines; electric andposttelecommunications; power generation,
transmissionanddistribution;railroads;airnavigation;airports;ports;watersupplysystems;andmining
andprocessing ofprecious metals andstones.
(c) Theresponse toquestion 1ofWT/ACC/KGZ/5 states thatKyrgyzalco (alcohol andalcohol
products, other thanbeer) andKyrgyztamekesi (tobacco fermentation, manufacture oftobacco
products, saleoffermented tobacco), areincluded asnatural monopolies. Presumably these
enterprises werecreated bytheState asmonopolies bylaw.What arethedomestic market shares
forthese twoenterprises? What wastherationale forthecreation ofmonopolies foralcohol and
tobacco production anddistribution? Please describe these enterprises intheform ofaresponse
totheQuestionnaire onState-trading. Please provide atranslated copy ofthecurrent price
schedule fortheproducts soldbythese twoenterprises.WT/ACC/KGZ/10
Page5
Answer:
A. Kyrgyzalco
KyrgyzalcoisaStateJointStockCompanyestablishedbyaPresidentialDecreeinJanuary1996.
Themain purposes forthecreation ofKyrgyzalco areconsumer protection andrevenue generation.
Under Kyrgyzalco, there arecurrently 14jointstock companies. Only twoofthese companies have
State shares. Theother companies areprivate. Foreign investors maypurchase shares inthese
companies. Currently, onlyoneofthe14companies 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.
IntheKyrgyz Republic, licenses arecurrently required toimport, export, andproduce alcohol
andalcoholic products. Kyrgyzalco istheonlybodyintheKyrgyz Republic authorized toissuethese
licenses. Onlycompanies under thestructure ofKyrgyzalco areallowed toobtain licenses forimporting
andexporting ethylalcohol andforproducing alcohol andalcoholic products.1Kyrgyzalco 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.
Anyentity (including entities outside thestructure ofKyrgyzalco) mayobtain alicense from
Kyrgyzalco toimport andexport alcoholic products (except ethyl alcohol). There iscompetition in
thetrade andproduction ofalcoholic products between the14companies under thestructure of
Kyrgyzalco. Inaddition, thereiscompetition inthetradeofalcoholic products between private entities
andcompanies under thestructure ofKyrgyzalco. Thedomestic market share ofcompanies under
thestructure ofKyrgyzalco inthesaleofalcoholic products wasapproximately 53percentin1996.
Wholesale prices ofalcoholic products areestablished separately byeachoftheenterprises
under Kyrgyzalco. Enterprises under Kyrgyzalco must declare theirprices totheAnti-Monopoly
Department under theMinistry ofFinance andaresubject toprofitability control bytheAnti-Monopoly
Department. Profit maynotexceed 20percent.
Thewholesale price schedule, asof1May1997, forproducts soldbyenterprises under
Kyrgyzalco isasfollows:
1Theproduction ofbeerisexcepted. Other private companies areallowed toobtain licenses toproduce beer.WT/ACC/KGZ/10
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Name ofproduct Volume Price (Som)
Vodka "Extra" 1.75l 67.50
1.0l 36.50
0.75l 30.0
0.375 l 17.50
Vodka "Kara-Balta" 1.75l 68.0
1.0l 37.50
0.75l 31.0
0.375 l 18.0
Vodka "Kara-Balta" -assouvenir 0.75l 57.0
Vodka "President" 0.75l 41.0
Vine"Kagor" 1.0l 57.0
Vodka "Russian" 0.5l 16.50
Vodka "Sary-Ozon" 1.0l 35.50
Vodka Banker 30.0
Vodkas: "Stolichnaja", "Pchenichnaja",
"Posolskaja"0.5lcorkup 17.90
0.38ltwisted 14.0
0.25ltwisted 10.50
0.75ltwisted 30.0
Vodkas: "Bishkek", "Kyrgyz Aragy" 0.5lcorkup 17.50
0.5ltwisted 18.50
Balsam "Arashan" 0.25ltwisted 26.0
0.38ltwisted 37.50
0.5ltwisted 49.30
0.5lceramic 51.0
Infusion "Starka" 0.5lcorkup 18.0
0.5ltwisted 19.10
Aresponse tothequestionnaire onState-trading regarding Kyrgyzalco isprovided in
Attachment A(tobecirculated inanaddendum).
Finally, therearenocurrent plans toeliminate Kyrgyzalco andtakeaway itsauthority tolicense
thetrade andproduction ofalcohol andalcoholic products.
B. Kyrgyztamekesi
KyrgyztamekesiisaStateJointStockCompanyestablishedbyPresidentialDecreeinMay1996.
There areseven companies under itstructure (sixarejointstock companies andoneisastateenterprise).
Thestateshare inthese companies isasfollows: 37percent; 40percent; 65percent; 66percent;
70percent;71percent;and100percent. Foreign participation ispermitted. Currently, noforeign
investors haveshares inanyofthese seven companies. Eachofthese companies isindependent from
theother andhasitsownfinancial statements. Thedirectors ofeachofthese seven companies are
members oftheBoard ofDirectors ofKyrgyztamekesi.WT/ACC/KGZ/10
Page7
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). Kyrgyztamekesi
hastheexclusive authority toissue licenses for(1)production oftobacco products andfermentation
oftobacco leaves and(2)import/export license forfermented tobacco.
ThedomesticmarketshareofKyrgyztamekesiisapproximately96percentfortobaccoproducts
in1996. 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.
Kyrgyztamekesi mustdeclare itsprices totheAnti-Monopoly Department under theMinistry
ofFinance andissubject toprofitability control bytheAnti-Monopoly Department. Itsprofit may
notexceed 20percent.
Thewholesale price schedule, asof1May1997, forproducts soldbyKyrgyztamekesi isas
follows:
- Cigarettes "Polyot" =>som51.47 per1,000 units
- PipeTobacco "Dunza" =>som46.10 per1kg(inside theKyrgyz republic)
- Fermented tobacco -negotiable
Aresponse tothequestionnaire onState-trading regarding Kyrgyztamekesi isprovided in
Attachment A(tobecirculated inanaddendum).
(d) According totheresponse toquestion 1ofWT/ACC/KGZ/5, Kyrgyzgas isanatural
monopoly fornatural andliquefied natural gas.Does Kyrgyzgas haveamonopoly onthe
explorationandproductionofnaturalgasintheKyrgyzRepublic?Doesithaveamonopoly
ontheexportation ofnatural gas? Please describe Kyrgyzgas intheform ofaresponse
totheQuestionnaire onState-trading. DoesKyrgyzgas provide natural gastoalldomestic
consumers atthesame rates? Arepreferential prices fornatural gasavailable todomestic
industries engaged inimport substitution orexport production? Please provide atranslated
copy ofthecurrent price schedule forthenatural gassoldbyKyrgyzgas.
Answer:
First, please notethatKyrgyzgas andKyrgyzgazmunaizat merged according toPresident Decree
No.30of29January1997.ThenewcompanyisaStateJointStockCompanycalledKyrgyzgasmunaizat
andislisted asanatural monopoly andasapermitted monopoly.
Kyrgyzgasmunaizat isengaged intheimport, storage, andsaleofoilproducts, natural gas,
andliquefied natural gas;andtheoperations oftheonlynatural gaspipeline intheKyrgyz Republic
usedonlyforimport.
Kyrgyzgasmunaizat isnotengaged intheexploration, production, andexport ofnatural gas
andoil.Note, inaddition, thatthere arenobarriers toentry. Foreign anddomestic investors may
obtain licenses toexplore andproduce natural gasandoil.
Anyperson mayimport natural gasandliquefied natural gas. Kyrgyzgasmunaizat imports
approximately 50percentofthenatural gasconsumed intheKyrgyz Republic. Theshare of
Kyrgyzgasmunaizatintheimportofliquefiednaturalgasisapproximately35percent(1stquarter1997).WT/ACC/KGZ/10
Page8
Anyperson mayimport andselloilproducts intheKyrgyz Republic. There isnoneedto
havealicense toimport oilproducts. Kyrgyzgasmunaizat 'sdomestic market share inthesaleofoil
products isapproximately 2percentin1996.
Inaddition, Kyrgyzgasmunaizat provides gaspipeline transport services toother importers
ofnatural gasfortheirownuse.
Aresponse tothequestionnaire onState-trading regarding Kyrgyzgasmunaizat isprovided in
Attachment A(tobecirculated inanaddendum).
There aretworatesforthenatural gasprovided byKyrgyzgasmunaizat: arateforindustry
andarateforhousehold andothers. Theindustry rateishigher. Allindustries arecharged thesame
rateandthere arenopreferential prices fornatural gasavailable todomestic industries engaged in
import substitution orexport production.
Kyrgyzgasmunaizat provides oilproducts toalldomestic consumers atthesame rates. There
arenopreferential prices foroilproducts available todomestic industries engaged inimport substitution
orexport production. Kyrgyzgasmunaizat doesnotprovide oilproducts todomestic industries at
preferential ratesforuseasfeedstock.
Thecurrent price schedule forthenatural andliquefied gas,gasoline, anddiesel fuelsoldby
Kyrgyzgasmunaizat isasfollows:
- thewholesale price ofthenatural gasforallindustries issom1,042 including VAT) for
1,000 Cubic Meters;
- thewholesale price ofthenatural gasforhousehold andothers issom846(without VAT) for
1,000 Cubic Meters. Households donotpayVAT onnatural gas;
- thewholesale price ofliquefied gasissom4,600 for1ton(including VAT);
- thewholesale price ofgasoline (76)issom4.50per1litre;
- thewholesale price ofdiesel fuelissom3.50per1litre.
(d) Doanyofthese "natural" monopolies have amonopoly onforeign trade inaddition to
service andproduction monopolies? Ifso,howisitadministered?
Answer:
Thefollowing natural monopolies haveamonopoly onforeign trade:
(i) Kyrgyz Energy Holding currently has100percentmarket share forimport/export electric
power energy;
(ii) Kyrgyzalco andcompanies under itsstructure haveexclusive rights toimport ethyl spirit;
(iii) Kyrgyztamekesi hasamonopoly istheexport ofpipetobacco.
Foradministration ofState-trading bythese companies, seetheresponse totheState-trading
questionnaires provided inAttachment A(tobecirculated inanaddendum).
Question 3.
According totheMemorandum, a"permitted monopoly" hasadominant share (35percent) of
themarket foraproduct needed bythepublic andunder existing market conditions cannot be
eliminated. Anentity identified bytheAMD asapermitted monopoly must declare itsprices,
have itsprices approved byAMD andtheprices must bepublished inanAMD register.WT/ACC/KGZ/10
Page9
(a) Does thelabel "permitted monopoly" indicate anyrestraints onmarket entry byother
firms? Willforeign funded enterprises beabletoinvest insectors dominated by"permitted"
monopolies?
Answer:
Thelabel"permitted monopoly" doesnotindicate anyrestraints onmarket entrybyotherfirms.
Foreign funded enterprises areabletoinvest insectors dominated by"permitted" monopolies.
(b) Accordingtotheresponsetoquestion12ofWT/ACC/KGZ/5/Add.2,SJSCKyrgyzmunaizat
(oilcompany) isapermitted monopoly. Does Kyrgyzmunaizat have amonopoly onthe
exploration andproduction ofoilintheKyrgyz Republic? Does ithave amonopoly on
theexportation ofcrude orrefined oil?Please describe Kyrgyzmunaizat intheform of
aresponse totheQuestionnaire onState-Trading. Does Kyrgyzmunaizat provide oiland
related products toalldomestic consumers atthesame rates? Arepreferential prices for
oilandrelated products available todomestic industries engaged inimport substitution
orexport production? DoesKyrgyzmunaizat provide oilandrelated products todomestic
industries atpreferential rates foruseasfeedstock? Please provide atranslated copy of
thecurrent price schedule foroilandrelated products soldbyKyrgyzmunaizat.
Answer:
Please seetheresponse toQuestion 2(d).
(c) Please describe Production Association (coal) andKyrgyzaltyn (gold), intheform ofa
response totheQuestionnaire onState-Trading.
Answer:
Responses tothequestionnaire onState-Trading regarding KyrgyzAltyn (gold) andProduction
Association Kyrgyzkomur (coal) areprovided inAttachment A(tobecirculated inanaddendum).
Price Controls
TheKyrgyzRepublicreportsthatmostpricecontrolshavebeeneliminated,exceptforthoseapplied
to"natural" monopolies. Weseekenhanced transparency inthisareaintheaccession protocol
andthatgoods andservices subject tostate price controls notified intheaccession process have
been published inanOfficial Gazette andanyfuture changes from those notified willalsobe
published.
TheKyrgyz Republic should stateintheaccession protocol thatallprices forgoods andservices
inevery sector thatarenotclearly notified asunder control aredetermined bymarket forces.
Allprice controls onproducts andservices stillineffect, atthecentral andsub-central level, should
belisted byHSnumber. Thecontrols inplace should bedescribed, andtheauthority toapply
these andanyother suchcontrols clearly cited, including thereasons fortheexisting controls,
andtheconditions under which Kyrgyzstan expects tousesuchcontrols inthefuture.
Nowandinthefuture, theKyrgyz Republic should commit thatitsprice controls willbeapplied
inaWTO-consistent fashion, taking account oftheinterests ofexporting WTO members as
provided forinArticle III:9 oftheGATT 1994.WT/ACC/KGZ/10
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Inthisregard, theKyrgyz Republic should alsoeliminate anyimport reference prices inplace
andshouldcommitthatsuchmeasureswillnotbereintroducedafteraccession,exceptinaccordance
withWTO Agreements.
III. FRAMEWORKFORMAKINGANDENFORCINGPOLICIESAFFECTINGFOREIGN
TRADE INGOODS AND TRADE INSERVICES
III.4 Legislative Programs orPlans toChange theRegulatory Regime
Question 4.
Theresponse toquestion 14states that"thelawdoesnotbindtheParliament ortheGovernment
topublish drafts ofnew, revised oramended lawsforpublic comment".
Totheextent thatthiscovers lawsthataddress standards matters, itwould notappear toconform
totherequirements oftheAgreement onTechnical Barriers toTrade, which requires thatdraft
standards bepublished forcomment prior toimplementation.
Could theKyrgyz Republic please address thisissue?
Answer:
TheKyrgyz Republic willconform upon accession toArticle 2.9,Article 10,andAnnex 3
(specifically items J,L,M,OandP)oftheTechnical Barriers toTrade agreement which require that:
- notification atanearly stage regarding proposed standards andtechnical regulations;
- providing acopyofdraftstandards ortechnical regulation tointerested parties within theKyrgyz
Republic andother members oftheWTO upon request; and
- allowing areasonable timeforcomments byinterested parties.
Inaddition, GATT Article Xprovides thatalllawsandregulations affecting trade bepublished
andavailable totraders inadvance oftheir implementation.
Weseekacommitment thatfrom thedateofaccession, alllaws, regulations, rulings, decrees
orother measures related totrade willbepublished intheOfficial Gazette forpublic review at
least twoweeks prior toimplementation, unless alonger period isspecified under therelevant
WTO Agreement.
Wealsoseekconfirmation from theKyrgyz Republic that, inaccordance withArticle Xofthe
GATT 1994, suchlaws, regulations etc.,willbeaccessible totraders prior toimplementation,
andthatnolaw,rule, etc.related totrade willbecome effective prior tosuchpublication.
IV. POLICIES AFFECTING TRADE INGOODS
IV.1 Import Regulation
IV.1(b) Characteristics ofnational tariff, customs tariff nomenclature (HS), types ofduties,
general description ofthecustoms tariff structure, weighted average levelofduties on
main customs tariff groupings, application ofMFN rates, tariff preferencesWT/ACC/KGZ/10
Page11
Question 5.
According totheresponse toquestion 15ofWT/ACC/KGZ/5, theKyrgyz Republic doesnothave
itsowntariff nomenclature, butinstead usesthetariff nomenclature inforce inRussia. According
totheresponses toquestion 17-19 ofWT/ACC/KGZ/5/Add.2, thenew tariff schedule, which
iscurrently before theCabinet ofMinisters, willretain structural andcoding differences between
theexisting Russia-based nomenclature andtheInternational Harmonized System.
Uniformity inthedescription andscope ofthethousands ofproduct categories isessential inorder
toestablish acommon basis upon which toconduct tariff negotiations. TheInternational
Convention ontheHarmonized Description andCoding System (Convention), drafted byWorld
Customs Organization, andtheGeneral Rules ofInterpretation andSection andChapter Notes,
contain principles tobeapplied todetermine thecorrect classification ofproducts. TheKyrgyz
Republic should implement HStariff nomenclature thatisconsistent withtheConvention and
General Rules ofInterpretation asofthedateofWTO accession.
(a) Please identify thestructural andcoding differences thatexistbetween theexisting import
nomenclature andtherules provided bytheWorld Customs Organization inorder to
facilitate negotiations onmarket access.
Answer:
TheKyrgyz Republic currently usesHS96asitstariff nomenclature. There arecurrently
nodifferences withthegeneral rulesofinterpretation provided bytheWorld Customs Organization.
(b) Does theKyrgyz Republic intend toaccede totheWorld Custom Organization?
Answer:
Yes.TheKyrgyz Republic intends toaccede totheWorld Customs Organization.
(c) Since theRussian tariff nomenclature wasderived from theEuropean Union tariff system,
theKyrgyz Republic iscurrently using aform oftheHSSystem. Atthesix-digit tariff
level, isthenomenclature being used intheKyrgyz Republic based upon the1995 EU
HSschedule orthe1996 EUHSschedule?
Answer:
Theexisting tariffnomenclature isthesameasthecurrent Russian nomenclature which isbased
onHS96.Atthesix-digit tariff level, thenomenclature being usedintheKyrgyz Republic isbased
upon HS96.
(d) Please identify anydifferences between theKyrgyz Republic tariff nomenclature andthe
Russian tariff nomenclature. Forexample, arethere anydifferent tariff linebreak-outs
attheeight-digit level?
Answer:
There arenodifferences.WT/ACC/KGZ/10
Page12
(e) Adraft oftheKyrgyz Republic 'sproposed tariff schedule wasprovided inAnnex 10of
WT/ACC/KGZ/3. Isthisdraft identical totheschedule awaiting consideration bythe
Cabinet ofMinisters? Ifnot,please provide amore detailed version oftheschedule.
Answer:
Theproposed tariffschedule which wasprovided inAnnex 10ofWT/ACC/KGZ/3 isnolonger
valid. TheKyrgyz Republic isentering negotiations withtheWTO Working Party onthebasis of
thetariff rates ineffect intheKyrgyz Republic on1June 1997 (flat10percentmentioned in
Section IV.1.b ofWT/ACC/KGZ/3).
Weexpect thattheKyrgyz Republic willnegotiate andestablish itsgoods market access schedule
intheHS96nomenclature nowbeing adopted byWTO members. Wecanseenoutility in
establishing theKyrgyz Republic 'sWTO schedules inanobsolete nomenclature thatwillrequire
further negotiation toconvert toHS96inthefuture.
IV.1(c) Tariff quotas, tariff exemptions
Question 6.
According totheresponse toquestions 20,21and31ofWT/ACC/KGZ/5/Add.2, domestic business
enterprises must apply totheMinistry ofIndustry andForeign Trade toreceive tariff exemptions
forimports ofcertain items which areusedfortheproduction offinal products.
(a) Areapplications forthese tariff exemptions automatically approved bytheMinistry of
Industry andForeign Trade? Ifnot,what criteria, other than thetypeofproduct and
quantity tobeimported, areconsidered indetermining whether ornottogrant the
request? Does theMinistry ofIndustry andForeign Trade consider import substitution
orexport performance asfactors inapproving these requests?
Answer:
Applications forthese tariff exemptions arenotautomatically approved bytheMinistry of
Industry andForeign Trade. Themain criteria isthatitems willbeusedintheproduction offinal
products. TheMinistry ofIndustry andForeign Trade doesnotconsider import substitution orexport
performance asfactors inapproving these requests.
(b) Arethese tariffs exemptions granted toallimports inthetariff linecategories affected,
oraretheygranted onlyonimports bythepetitioning enterprise?
Answer:
These exemptions aregranted tothepetitioning enterprise forthespecific items applied for.
IV.1(h) Customs valuation
Question 7.
According totheinformation provided inAnnex 4ofWT/ACC/KGZ/3, theexisting customs
valuation regime inKyrgyz Republic isincompatible with theWTO Agreement onCustoms
Valuation(Agreement).Forexample,thecurrentlawdoesnotcontaintheprohibitionsofArticle7.2
oftheAgreement andprovides fortheuseofreference prices. However, itappears from theWT/ACC/KGZ/10
Page13
responses, toquestions 34-38 ofWT/ACC/KGZ/5/Add.2, thattheKyrgyz Republic iscommitted
toadopting anewCustoms lawwhich willfully implement theAgreement, effective from the
dateofaccession. According totheresponse toquestion 37,thedraft Customs Code wasattached
toWT/ACC/KGZ/5/Add.2 asAnnex A-4.
Isthedraft "Customs Code" different fromthedraft "Customs Tariff Law" provided intheannexes
toWT/ACC/KGZ/3? Ifnot,what isthedifference intheir coverage andwhyareboth being
pursued?
Ifso,willtheCustoms Code contain specific provisions implementing WTO requirements, e.g.,
forcustoms valuation, orwillitbeonlybroadly indicative likethedraft Customs Tariff Law
already provided?
Does theKyrgyz Republic intend toelaborate itslaws through regulations tomeet WTO
requirements?
Answer:
Allrelevant provisions intheproposed customs tarifflawwillbereflected inthedraftCustoms
Code. Theexisting Customs Tariff Lawwillbeinvalid assoon astheproposed Customs Code,
anti-dumping law,safeguard law,andcountervailing lawareallenacted. Acustoms tariff lawwill
beadopted annually bytheParliament reflecting onlythecustoms tariff ratesforimported/exported
goods.
Asmuch aspossible, theCustoms Code willcontain specific provisions implementing WTO
requirements. Currently, further amendments areintroduced tothedraftCustoms Code toreflect that
forCustoms Valuation andRules ofOrigin. Specific lawswillbeenacted todealwithanti-dumping,
countervailing, andsafeguards measures.
Asmuch aspossible, theKyrgyz Republic willadopt lawsrather thanregulations tomeetWTO
requirements.
Wehave notyethadanopportunity toreview thedraft Custom Code, butwewillprovide
comments onitsprovisions oncewearesurewehave it.
IV.1(i) Other customs formalities
Concerning thecurrent customs feeof0.15percent:
Weseekelaboration bytheKyrgyz Republic prior tothenextWorking Party ofthemeasures
itintends totaketobring itsadvalorem customs processing feesintoconformity withArticle VIII
oftheGATT 1994. TheKyrgyz Republic should describe indetail thenature ofthechanges it
intends tomake. Weseekelimination ofthefee,orcompletion ofarevised feestructure prior
toaccession totheWTO.
Question 8.
According totheresponse toquestion 40ofWT/ACC/KGZ/5/Add.2, thefeeforaphytosanitary
certificate issom76-166,depending onthetypeofproduct. Ifthetotalweight oftheproduct
islessthan300kg,therequired payment willbe10percentoftheotherwise applicable amount.
Iftheweight isfrom 300-1000 kg,therequired payment willbe50percentoftheotherwise
applicable amount. Subparagraph 1.(f)ofAnnex CoftheAgreement ontheApplication ofSanitaryWT/ACC/KGZ/10
Page14
andPhytosanitaryMeasuresrequiresthatanyfeesimposedfortheproceduresonimportedproducts
areequitable inrelation toanyfeescharged onlikedomestic products orproducts originating
inanyother Member andshould benohigher thantheactual costoftheservice.
(a) Aredomestic products required tohaveasanitary certificate, andifso,aretheinspection
feesidentical tothose applied toimports?
Answer:
Domestic products arerequired tohaveasanitary certificate. Theinspection feesarethesame
forimports anddomestic products.
(b) What ismeant bythe"otherwise applicable amount?" Isitthesom76-166fee?Why
doestheapplicablepercentageincreasefrom10percentto50percentforproductsheavier
than300kg?What istheapplicable percentage forproducts weighing more than1000
kg?What ismeant bytheterm"products?" Istheapplicable ratebased upon theweight
oftheshipment? Ifso,howcanthefeebeconsidered toberelated tothecostoftheservice?
Answer:
Please notefirstthatthefeehasbeenrecently changed from som76-166tosom93-216.
Thisfeeisamended onanannual basis totakeintoaccount inflation.
The"otherwiseapplicableamount"meanssom76-166(currentlysom93-216).Thisamount
reflects thecostofservices rendered regardless oftheweight oftheshipment. However, theKyrgyz
Republic provides preferences forlowweight shipments: 10percentforshipment lessthan500kg
and50percentforshipment between 500(recently changed from 300kgto500kg)and1000 kg.
(c) According totheresponse toquestion 76ofWT/ACC/KGZ/5/Add.2, theKyrgyz Republic
charges anadvalorem feeforissuance ofveterinary certificate. How doestheKyrgyz
Republic limittheadvalorem feestoanamount nohigher thantheactual costoftheservice
provided?
Answer:
Thefeeisnotrelated tocostofservice andwillbeadjusted uponaccession toreflect thecost
ofservice rendered.
Thefeestructure fortheKyrgyz Republic 'ssanitary andveterinary certification process, while
adjusted progressively toavoid becoming burdensome tohighvalue shipments, doesnotappear
toberelated totheactual costofinspecting andcertifying thegoods. Inaddition, weneed to
betterunderstandhowsuchcertificationisadministeredtodomesticlikearticles.Weseekadditional
information andsuggestions from theKyrgyz Republic astohowitintends toaddress bothof
these issues.
IV.1(k) Application ofinternal taxes onimports
Question 9.
According totheMemorandum, theKyrgyz Republic iscurrently excluding imports from CIS
states from itsvalue-added tax(VAT), butisimposing VAT onimports from allother countries.
Article IoftheGATT 1994 provides most-favoured-nation treatment toallmatters included inWT/ACC/KGZ/10
Page15
paragraphs 2and4ofGATT Article III(which includes internal taxation). Itappears thatthe
Kyrgyz Republic 'sapplication ofindirect taxes toimported goods isinconflict with WTO
provisions.
(a) Please indicate howtheKyrgyz Republic willamend itsVAT lawtobring itintoconformity
withWTO requirements prior toaccession. Specifically, isdraft legislation inpreparation
toalter thispractice?
Answer:
TheKyrgyz Republic supports theprinciples ofbringing inlinewithinternational practices
itssystem ofcollecting VAT. TheKyrgyz Republic iscurrently intheprocess ofnegotiating ona
bilateral basis withvarious CIScountries toensure thatVAT isapplied atimports rather thanatthe
point ofproduction. Abilateral agreement hasbeenreached withKazakstan. Currently, Kazakstan
istreated asnon-CIS countries withrespect totheapplication ofVAT. Inaddition, asimilar agreement
hasbeeninitialled withUkraine andthefirstround ofnegotiations hasbeenconcluded withUzbekistan.
Thisissueisalsostillbeing addressed bytheInter-State Council andIntegration Committee.
(b) IstheVAT rateassessed ontheinvoice value orontheduty-paid value ofimported goods?
Answer:
TheVAT isassessed onthecustoms value ofimported goods.
(c) Please elaborate ontheresponse toquestion 45inWT/ACC/KGZ/5/Add.2. Thecurrent
response isnotclear astowhether thenewlawwill, orwillnot,provide fortariff
exemptions forgoods under excise tax.
Answer:
Forreasonsofeconomicsecurity,aswellastheprotectionofdomesticproducersandestablishing
equal competition environment fordomestically produced goods, theKyrgyz Republic may,inexclusive
cases, impose customs duties forgoods subject toexcise taxes.
Question 10.
According totheresponse toquestion 47ofWT/ACC/KGZ/5/Add.2, theKyrgyz Republic states
thatthere aredifferent methods ofcalculation ofthetaxforimported anddomestic goods.
According tothatresponse, "thenecessity forusing twomethods forcalculating excise taxes is
caused bythefactthatimported goods often have prices thatarehigher thanthose ofsimilar
goods. Inthisrespect, equal absolute rates ofexcise taxforimported anddomestic products
would mean relatively higher rates fordomestic products. Excise taxrates inpercentages are
higher foralmost alldomestic goods incomparison withrates forimported goods".
Theresponse doesnotaddress thedirect contradiction ofcurrent Kyrgyz practice withWTO
provisions. Ifequality ofadvalorem taxratesisthegoaloftheKyrgyz Republic, itshould establish
advalorem rates. WTO absolutely forbids thesortoftaxdifferentials provided forinKyrgyzstan 's
current laws.
Thetable provided intheresponse toquestion 49ofWT/ACC/KGZ/5/Add.2, which reflects the
excise taxrates approved bytheLegislative Assembly, appears tocontinue these differentials forWT/ACC/KGZ/10
Page16
anumber ofdomestic andimported products. Theproposed excise taxlawimposes higher
advalorem excise taxrates onimported gold, platinum andsilver jewellery; andfirearms and
gasweapons thanonsuchdomestically -produced products. Inaddition, imports ofcertain items
willbesubject toexcise taxes (alladvalorem ,except thefuels), butsuchdomestically -produced
products willnotbesubject toexcise taxes. These products include other tobacco -containing
items,includingfermentedtobacco(12percent);processedandrawfurhides(10percent);wearing
apparel made ofnatural fur(10percent); coats, short-coats, jackets andcapes trimmed with
fur(10percent); clothing made ofnatural leather (10percent); andcrystalware (30percent)
andcarpets andrugs(35percent); diesel fuel(US$45 perton);andaircraft fuel(US$45 perton).
Weareverydisappointed thattheKyrgyz Republic haschosen toperpetuate thisWTO-inconsistent
practice. Ifthisapproach ismaintained, itwilldelay theaccession.
(a) Please explain whythediscriminatory rates have been maintained inthenewlaw?
Answer:
TheKyrgyz Republic willreconsider itsdecision regarding excise taxes inlightofabove
comments. TheKyrgyz Republic iscommitted toestablish, upon accession totheWTO, oneequal
excise taxregime forimported anddomestically produced goods. Appropriate legislation willbeenacted
atthattime.
(b) How doestheGovernment oftheKyrgyz Republic intend tobring itsexcise taxregime
intocompliance withGATT Article III?
Answer:
TheKyrgyzRepublicplanstoestablish,uponaccessiontotheWTO,oneequalexcisetaxregime
forimported anddomestically produced goods. Appropriate legislation willbeenacted atthattime.
TheKyrgyz Republic should indicate howitintends toensure thatdomestic taxes arelevied on
imports inaccordance with Article IIIoftheGATT 1994, andshould make thenecessary
adjustments prior toaccession.
IV.1(m)(n) Anti-dumping regime, countervailing dutyregime
Question 11.
Weareconcerned thattheinformation anddocumentation supplied bytheKyrgyz Republic with
respect toitsexisting andproposed customs tariff lawsdonotprovide sufficient detail toreassure
WTOMembersthattheKyrgyzauthoritieswouldapplyanti-dumpingandcountervailingmeasures
inamanner consistent withWTO obligations.
Could theKyrgyz Republic explain indetail themain differences ofbothsubstance andintent
between theprovisions ofArticles 18-21 ofthe1994 lawandArticles 7-11oftheproposed law?
Arethere implementing regulations orother transparent practice andprocedures usedbyKyrgyz
authorities tointerpret andapply theprovisions ofitslaw(s)?
DoesKyrgyzlawprovideopportunitiesforjudicial,arbitraloradministrativereviewofthedecisions
ofitsanti-dumping/countervailing dutyauthorities?WT/ACC/KGZ/10
Page17
Lawof16April 1994 No.1501-XII
With respect toanti-dumping duties (Article 19),please provide thedefinition ormeaning of:
(i)"competitive wholesale price ofthedumped good inthecountry ofexport;" and(ii)"average
market price intheKyrgyz Republic ofthelikegoods."
Please explain howthese terms relate totheterms "normal value" and"export price" asused
intheAgreement onImplementation ofArticle VIoftheGATT 1994(Anti-dumping Agreement).
Does "average market price intheKyrgyz Republic" include theprice ofdomestically-produced
goods? How isthis"average" derived?
Answer:
Allrelevant provisions intheproposed customs tarifflawwillbereflected inthedraftCustoms
Code. Acustoms tariff lawwillbeadopted annually bytheParliament reflecting onlythecustoms
tariff ratesforimported/exported goods.
ThenewCustoms Code willsimply havereferences toother legislation which willaddress
dumping, countervailing, andsafeguard measures. Dumping, countervailing, andsafeguard measures
willbegoverned bynewlawscurrently being drafted inconformity withrespective WTO agreements.
Thedraftlawondumping, countervailing, andsafeguard measures willbemade available to
theWorking Party during summer 1997 forcomments.
Proposed customs tariff law
Question 12.
What legal provisions orpractices willbefollowed bytheKyrgyz authorities toensure that
investigations areinitiated onlyonthebasis ofsufficient evidence ofdumping/subsidization, injury
andcausation andofsufficient industry support forthecomplaint? What standards ortestswill
beemployed tosatisfy those requirements?
WillKyrgyz lawpermit dumping tobedetermined onthebasis ofsales made atprices below
thecostofproduction, plusareasonable profit? Ifso,under what circumstances willitbe
permitted, where isthisstandard expressed intheproposed law,andhowwould thecostof
production andreasonable profit levelbedetermined?
WillKyrgyz anti-dumping lawpermit orrequire theadjustment ofnormal value orexport prices
toaccount forsubstantiated differences intheconditions orterms ofsalewhich would affect price
comparability? Where isthisaddressed ineither theproposed law,orinproposed regulations
orprocedural practice?
HowwillKyrgyz lawdefine theterm"subsidy", andwillonlythose subsidies which are"specific"
toafirm, industry orgroup thereof becountervailable under thelaw?WillKyrgyz lawspecifically
require thatthere bea"financial contribution", or"income orprice support" inthesense ofGATT
Article XVI, andthatabenefit beconferred?
Howwillmaterialinjuryorthethreatofmaterialinjurybeestablished?Whatguidelines,standards
orprinciples willbeused tofacilitate theauthorities 'investigation ofinjury andcausation,WT/ACC/KGZ/10
Page18
particularly vis-à-vis theroleofother factors orconditions which maybecausing thedomestic
industry some harm orhardship?
Inpractical terms, what rights willforeign exporters have todefend their interests inanysuch
investigations? Forexample:
WillKyrgyz lawprovide theopportunity forapublic hearing oranother venue inwhich
oralarguments might bemade andinformation provided?
WilltheKyrgyz authorities berequired toprovide written notice oftheirdeterminations,
together withtheunderlying reasoning andanalysis ofthefacts andlegal aspects ofthe
proceeding?
Theproposed lawspeaks about theapplication ofduties, butnomention ismade ofthepossibility
ofprice undertakings inlieuofimposing duties. Willthisoption beprovided under Kyrgyz law
and,ifso,under what terms andcircumstances?
Article 11indicates thatduties shallbeassessed onthebasis ofthemargin ofprice discrimination,
therateofsubsidization and"caused losses." Doesthismean thattheKyrgyz Republic willattempt
toquantify injury indetermining theamount ofduty toapply? Ifso,howwould thisbe
accomplished, andarethese various amounts (dumping margin, subsidy rate, injury margin)
cumulated tofixthedutyrate, orissome other method used?
Weseekconfirmation from theKyrgyz Republic thatfrom thedateofaccession, itslegislation
providing fortheapplication ofsafeguard orother import measures toprotect domestic industries
from fairorunfair trade (e.g., anti-dumping andcountervailing dutymeasures) willconform
totheprovisions oftheWTO Agreements onSafeguards, onAnti-Dumping andonSubsidies
andCountervailing Measures.
Answer:
Allrelevant provisions intheproposed customs tarifflawwillbereflected inthedraftCustoms
Code. Acustoms tariff lawwillbeadopted annually bytheParliament reflecting onlythecustoms
tariff ratesforimported/exported goods.
ThenewCustoms Code willsimply havereferences toother legislation which willaddress
dumping, countervailing, andsafeguard measures. Dumping, countervailing, andsafeguard measures
willbegoverned bynewlawscurrently being drafted inconformity withrespective WTO Agreements.
Thedraftlawondumping, countervailing, andsafeguard measures willbemade available to
theWorking Party during summer 1997 forcomments.
IV.1(o) Special purpose duties
Question 13.
Concerning theresponses toquestions 53-56 ofWT/ACC/KGZ/5/Add.2:
HowdoestheKyrgyz Republic intend toreconcile thedraft provisions ofitsnewCustoms Tariff
Lawretaining "special purpose duties" andanyadditional legislation addressing anti-dumping
andcountervailing dutyissues under WTO provisions? Willthe"special purpose duties" authority
beretained after thenewlegislation isinplace? Ifso,why?WT/ACC/KGZ/10
Page19
More broadly, what purpose willthe"special purpose duties" beputtounder thenewCustoms
Tariff Lawthatisseparate anddistinct from anti-dumping/countervailing duties orsafeguard
provisions implemented inseparate legislation?
Answer:
Special purpose duties (safeguard, warning measures, unfair competition, andretaliation) are
authorized intheexisting Customs Tariff Law. Theproposed Customs Tariff Law authorizes also
thesame special purpose duties except warning measures.
Allrelevant provisions intheproposed customs tarifflawwillbereflected inthedraftCustoms
Code. Acustoms tariff lawwillbeadopted annually bytheParliament reflecting onlythecustoms
tariff ratesforimported/exported goods.
ThenewCustoms Code willsimply havereferences toother legislation which willaddress
dumping, countervailing, andsafeguard measures.
Dumping, countervailing, andsafeguard measures willbegoverned bythreenewlawscurrently
being drafted inconformity withrespective WTO agreements. Safeguard duties willbeimposed under
theconditionsestablishedinArticleXIXofGATTandtheAgreementonSafeguards.Warningmeasures
willnotbeimposed inthefuture. Unfair competition duties willbeaddressed through theuseof
anti-dumping andcountervailing duties. Retaliation duties willbeaddressed intheCustoms Code and
usedforretaliation purposes incircumstances foreseen inArticle 22(Compensation andSuspension
ofConcessions) oftheUnderstanding onRules andProcedures Concerning theSettlement ofDisputes.
IV.2 Export Regulation
IV.2(d) Export licensing procedures
Question 14.
Please describe theadministrative procedures thatapply fortheissuance ofalicense tobean
authorized purchaser orseller offragments andwaste ofnon-ferrous andferrous metals and
their industrial fragments. Arethese licenses issued andrenewed automatically? Who approves
these license applications? What criteria areconsidered indeciding whether ornottoauthorize
anenterprise toengage inthese activities? Areforeign enterprises eligible tobeauthorized
purchasers andsellers ofthese products? DoestheGovernment ofthetheKyrgyz Republic impose
anyperformance requirements, suchasdomestic content, local hiring, export performance or
import substitution, asconditions ontheissuance orextension ofthese licenses?
Answer:
Anapplication mustbesubmitted totheMinistry ofForeign Trade andIndustry. Nofeeor
isrequired. Themaincriteria are(i)tohaveappropriate equipment forpackaging ofwaste offerrous
andnon-ferrous metals andtheirindustrial fragments and(ii)todemonstrate solvency. Once approved
bytheMinistry ofForeign Trade andIndustry, theapplication isforwarded totheCabinet ofMinisters
forfurther approval. Iftheapplication isapproved bytheCabinet ofMinisters thentheMinistry of
Foreign Trade andIndustry willissuethelicense. Licenses arenotissued andrenewed automatically.
Foreign enterprises, registered intheKyrgyz Republic, areeligible tobeauthorized purchasers
andsellers oftheseproducts. TheGovernment oftheKyrgyz Republic doesnotimpose anyperformanceWT/ACC/KGZ/10
Page20
requirements, suchasdomestic content, localhiring, export performance orimport substitution, as
conditions ontheissuance orextension ofthese licenses.
Question 15.
According totheresponse toquestion 44ofWT/ACC/KGZ/5, theexportation offerrous, precious
andrare-earth metals extracted orprocessed intheKyrgyz Republic requires anexport license.
When applying fortheexport license, theapplicant must submit ashort description ofhowthe
transaction benefits theKyrgyz Republic.
What factors areconsidered bytheKyrgyz Republic initsreview oftheshort description, provided
bytheapplicant, ofhowthetransaction benefits theKyrgyz Republic?
Answer:
Thefactors, considered bytheKyrgyz Republic initsreview oftheshortdescription, areprices
taking intoaccount quality. Please notethatexport licenses arenotrefused onthebasisoflowprices.
However, recommendations aremade totheapplicant toensure thatprices arecomparable toworld
market prices.
IV.2(f) Export financing, subsidy andpromotion policies
Question 16.
TheKyrgyz Republic hasstated thatArticle 20oftheForeign Investment Lawgrants profit tax
exemption forKyrgyz legalentities fortwotofiveyears based onforeign participation, depending
onthenature ofitsactivity. After theexpiration oftheprofits taxexemption, varying reductions
intheapplicable profits taxareprovided forunder certain circumstances, including a25percent
reduction, ifatleast50percentoftheentity 'sproduction isexported.
Thiswould appear tobeaprohibited export subsidy. Weseekelimination ofthisprogram, or
alteration toremove theexport performance criterion. Wewould alsoappreciate Kyrgyzstan 's
views onhowitintends toaddress thisissue inthecontext oftherequirements oftheAgreement
onSubsidies andCountervailing Measures.
Answer:
Anewforeign investment lawisintheprocess ofbeing adopted. TheParliament iscurrently
considering theelimination oftaxincentives based onexport performance.
TheKyrgyz Republic hasalsoauthorized freecustoms andeconomic zones. Totheextent that
access tothefavourable terms ofproduction andtrade inthese zones relates toexport performance,
themeasures mayconstitute prohibited subsidies andconflict withtheprovisions oftheAgreement
onSubsidies andCountervailing Measures.
Weseekconfirmation from theKyrgyz Republic thatifitmaintain subsidies which meet the
definition ofaprohibited subsidy, within themeaning ofArticle 3oftheAgreement onSubsidies
andCountervailing Measures, itwillwork withtheWorking Party toidentify these measures
andtakesteps toeliminate oralter them.WT/ACC/KGZ/10
Page21
IV.3 Internal Policies Affecting Foreign Trade inGoods
IV.3(b) Technical regulations andstandards, including border measures
Question 17.
According totheresponse toquestion 47ofWT/ACC/KGZ/5, theKyrgyz Republic anticipates
itwillhave difficulties applying theTBT Agreement prior toaccession, particularly provisions
relating totranslation intoWTO official language, participation ininternational standard -setting
organizations, timely notification oftechnical regulations, establishment ofanenquiry point on
standards andtechnical regulations andmembership inISONET.
WhendoestheKyrgyzRepublicexpecttobeabletocompletenotificationofitstechnicalregulations
andestablishment oftheenquiry point onstandards andtechnical regulations?
Answer:
Work toward theestablishment oftheenquiry point hasbeen initiated andislikely tobe
completed during thefirsthalfof1998. Thenotification oftechnical regulations wascovered toa
large extent inAnnex 5ofWT/ACC/KGZ/3. TheKyrgyz Republic, however, isready torespond
toadditional specific requests regarding technical regulations.
Question 18.
According totheresponses toquestions 64and66ofWT/ACC/KGZ/5/Add.2, theKyrgyz Republic
doesnotrequire thatdraft standards besubmitted forpublic review andcomment. Annex 3of
theAgreement onTechnical Barriers toTrade, "Code ofGood Practice forthePreparation,
Adoption andApplication ofStandards," requires advance publication ofadraft standard and
acomment period, before astandard maybeadopted.
(a) WilltheKyrgyz Republic commit tothefullimplementation ofAnnex 3oftheAgreement
onTechnical Barriers toTrade, "Code ofGood Practice forthePreparation, Adoption
andApplication ofStandards," asofthedateofWTO accession?
Answer:
TheKyrgyz Republic hasinitiated work toward bringing itsprocedures foradopting standards
toconform fullytoAnnex 3oftheAgreement onTechnical Barriers toTrade. TheKyrgyz Republic,
however, willnotify during thenextsixmonths anydifficulties encountered incompleting thiseffort
andwillapply, ifneeded, totheCommittee onTechnical Barriers toTrade forextension ofthe
implementation period forcertain points ofAnnex 3oftheTBTAgreement.
(b) Please describe howtheKyrgyz Republic willamend itsprocedures fortheadoption of
standards tobring them intoconformity withtherequirements ofAnnex 3oftheTBT
Agreement.
Answer:
Appropriate legislation willbeadopted toensure conformity withtherequirements ofAnnex 3
oftheTBTagreement. TheKyrgyz Republic mayseektechnical assistance inthisregard.WT/ACC/KGZ/10
Page22
(c) Please identify eachprovision ofAnnex 3oftheTBTAgreement thattheKyrgyz Republic
believes itwillnotbeabletoimplement, thereason forthedelay inimplementation of
theprovision, andatimetable fortheimplementation oftheprovision.
Answer:
Please seetheresponse tothequestion 18(a).
IV.3(c) Sanitary andphytosanitary measures
Question 19.
According totheresponse toquestion 55ofWT/ACC/KGZ/5, theKyrgyz Republic expects no
difficulties inimplementing theSPSAgreement asofdateofaccession. However, theappropriate
governmental ministries andState bodies arereviewing theprovisions oftheSPSAgreement for
thepurposes ofbringing their respective standards intoconformity withtheAgreement.
(a) Please describe thespecific measures theKyrgyz Republic intends totaketobring itsregime
intoconformity withtheprovisions oftheSPSAgreement.
Answer:
TheKyrgyz Republic intends toadopt, upon accession, appropriate legislation toimplement
theprovisions oftheSPSAgreement. Inaddition, work toward establishment ofaninquiry point will
beinitiated soon.
(b) WilltheKyrgyz Republic commit toimplementation oftheprocedural andsubstantive
provisions oftheSPSAgreement asofthedateofaccession?
Answer:
Asstated intheresponse toquestion 55ofWT/ACC/KGZ/5, theKyrgyz Republic expects
nodifficulties inimplementing theSPSAgreement asofthedateofaccession. Incaseofunforeseen
difficulties, theKyrgyz Republic willnotify theWorking Party.
IV.3(e) State-trading practices
Question 20.
According totheresponses toquestions 90and91ofWT/ACC/KGZ/5/Add.2, theGovernment
haslicensed only29companies toengage inthebusiness ofpurchasing andprocessing waste and
scrap metal. Theresponse toquestion 62ofthesame document details theproducts thatare
covered bythislicensing requirement.
(a) Areall29companies thathavebeengranted licenses topurchase andprocess waste and
scrap metal permitted toengage inthese activities foralloftheproducts listed inthe
response toquestion 62? Ifnot,foreach company, please identify theproducts, by
HSnumber, forwhich thecompany islicensed toengage inpurchasing andprocessing.WT/ACC/KGZ/10
Page23
Answer:
Yes. All29companies thathavebeengranted licenses topurchase andprocess waste and
scrap metal arepermitted toengage inthese activities foralloftheproducts listed intheresponse to
question 62ofWT/ACC/KGZ/5/Add.2
(b) Have anyapplicants been denied alicense forthisactivity?
Answer:
Yes.
IV.3(f)(g) Freezones, freeeconomic zones
Question 21.
TheProposed Customs Code contains provisions forthecreation bytheCabinet ofMinisters of
freecustoms zones andfreewarehouses where production andallother commercial operations
could beauthorized, except forretail trade. Customs duties andtaxes would notbelevied, nor
economic restrictions applied, ongoods entered intoorexported from suchzones orwarehouses.
None exist asyet. Existing legislation aswellastheproposed Customs Code authorize the
establishment offreeeconomic zones, which offerspecial andveryfavourable customs, tax,labour
relations andprocedural benefits toenterprises locating within such azone vs.theconditions
available tofirms intherestoftheKyrgyz Republic. Freeeconomic zones areestablished by
Parliament only, andonlyBishkek 'sisoperational.
(a) Please elaborate onthecriteria thatfirms must meet toestablish themselves inthefree
customs andfreeeconomic zones. Doanyofthese criteria include export performance,
local content, ortrade balancing elements?
Answer:
Currently, there arenocriteria stated inthedraftcustoms codeandthelawonfreeeconomic
zones forestablishing inthefreecustoms andfreeeconomic zones. None ofthese lawsrequire that
establishment inthese zones bebased onexport performance, local content, ortrade balancing. In
addition, defacto, establishment inthese zones isnotbased onexport performance, localcontent, or
trade balancing.
(b) Willestablishment inthese freezones, either customs oreconomic, beconditioned onexport
performance? Willnormal taxes, tariffs, andother trade restrictions beapplied onsales
from these zones intotherestoftheKyrgyz Republic?
Answer:
Establishment inthese freezones, either customs oreconomic, isnotconditioned onexport
performance.
TheDirectorate oftheBishkek FreeEconomic Zone (Information Bulletin No.2)provides
exemptions from lease payments forupto15years forestablishments which (1)areengaged in
export-oriented andimport substitution production activities, (2)usedomestic rawmaterials andspareWT/ACC/KGZ/10
Page24
parts, and(3)employ certain number ofpeople peryear. Inaddition, export-oriented production is
exempt from quantitative restrictions (quotas2andlicenses).
Forproducts originating inthezoneandimported from thezonetotherestoftheKyrgyz
Republic, onlythe0.15percentcustoms processing feeisapplied. VAT applies when suchproducts
aresoldwithin theKyrgyz Republic. Normal taxes, tariffs, andother restrictions apply forgoods
notoriginating from thezoneandimported from thezonetotherestoftheKyrgyz Republic.
Export from suchzones should notbeconditioned onexport performance. Iftheyare,itwould
constitute aprohibited export subsidy. Inaddition, allsales from suchzones intotherestofthe
Kyrgyz Republic should besubject tonormal tariffs, taxes, andtrade restrictions, inorder to
meet therequirements ofArticle I,II,andIIIoftheGATT 1994.
IV.3(1) Government procurement practices
Question 22.
TheGovernment oftheKyrgyz Republic planned tocreate, inthefirsthalfof1997, anew
Government Procurement Agency within theMinistry ofFinance.
What isthecurrent status ofthecreation oftheprocurement agency? Please describe theprogress
todateincreating theagency andtheschedule forcompletion.
Weseekconfirmation from theKyrgyz Republic thatitwillseekaccession totheWTO Agreement
onGovernment Procurement inthecontext ofitsWTO accession.
Answer:
TheKyrgyz Government Procurement Agency (KGPA) wasestablished on29January 1997
through aPresidential Decree asanagency under theGovernment. Currently, theKGPA isinthe
processofestablishingrules,procedures,forms,andmanualsbasedonthenewgovernmentprocurement
law.
TheKyrgyz Republic willconsider joining theGovernment Procurement Agreement in
January 1999 (twoyears afterthedateofestablishment oftheKGPA).
IV.4 Policies Affecting Trade inAgricultural Products
IV.4(b) Exports
According totheresponse toquestion 102ofWT/ACC/KGZ/5/Add.2, theGovernment ofthe
Kyrgyz Republic isconsidering theeffects ofbinding export subsidies foragricultural products
atzero.
Exportsubsidiesarethemosttradedistortingformsofagriculturalsupport.Westronglyencourage
theKyrgyz Republic tomaintain itssubsidy-free regime andbinditsexport subsidy commitment
atzero.
2Please notehowever, thattheKyrgyz Republic does notcurrently maintain quotas.WT/ACC/KGZ/10
Page25
According totheresponse toquestion 103ofWT/ACC/KGZ/5/Add.2, theKyrgyz Republic is
prepared to"temporarily" bindtheexisting policies notrequiring licenses forexport ofagricultural
products andnotimposing tariffs orquotas ontheexport ofagricultural products.
Westrongly encourage theKyrgyz Republic tobindpermanently theexisting policies applicable
totheexport ofagricultural products, andtorecognize thatnon-tariff export controls suchas
quotas ordiscretionary licensing areinconsistent withArticle XIoftheGATT 1994 andother
WTO provisions.
IV.4(e)Internal policies
Wehavethefollowing general comments onWT/ACC/SPEC/KGZ/1 concerning domestic supports
foragricultural production:
Question 23.
WT/ACC/SPEC/KGZ/1onlyappearstoincludetableswithdatafor1995and1996only.According
totheguidelines ofWT/ACC/4, three years ofdataisrequired tobeprovided. If1996 dataare
stillincomplete, please submit dataforthethree-year period 1993-95.
Answer:
Please findattached anupdated WT/ACC/4 fortheperiod 1994-1996. (Tobecirculated
separately asdocument WT/ACC/SPEC/KGZ/1/Rev.1.)
Question 24.
TheKyrgyz Republic listed certain measures, insupporting table DS:2, thatitwishes toexempt
fromreduction commitments under Special andDifferential Treatment-Development Programmes.
Does theKyrgyz Republic intend toaccede totheWTO asadeveloping country andexempt itself
under thiscategory?
Answer:
TheKyrgyz Republic intends toaccede totheWTO asadeveloping country andwishes to
exempt itself from reduction commitments under Special andDifferential Treatment-Development
Programmes.
Question 25.
There were nodeminimus calculations intheabove submission. Please include thevalue of
production foreachcommodity listed under product-specific support, aswellasthevalue oftotal
agricultural production. Thisinformation willallow thedeminimus calculation tobemade, as
welldetermination oftheshare ofsupport intotalagricultural production .
Answer:
Anupdated WT/ACC/4 fortheperiod 1994-1996 hasbeenforwarded totheWTO Secretariat.
(Tobecirculated separately asdocument WT/ACC/SPEC/KGZ/1/Rev.1.)
Wealsohave specific comments andquestions onthesupporting tables.WT/ACC/KGZ/10
Page26
Question 26.
Forsupporting table DS:1, please provide adetailed andspecific explanation oftheprograms
listed under General Services. Wenoted that"agricultural machinery supervision" waslisted
under item2.e.Theinspection services thatshould belisted under thatitemrefer tocommodities,
notmachinery.
Answer:
Suchsupport wasprovided forStateSeeds Inspection only. Please seeupdated WT/ACC/4
fortheperiod 1994-1996. (Tobecirculated separately asdocument WT/ACC/SPEC/KGZ/1/Rev.1.)
Question 27.
Forsupporting table DS:1 for1995, please clarify what ismeant by"given asgoods inkind" under
point 3(Creation ofState reserves toprovide foodsecurity)? Thisentry appears ineffect tobe
astate procurement activity. Please notethatState procurement doesnotqualify asapublic
stockholding program forfoodsecurity purposes, since purchase anddisbursement prices are
notmade onacommercial basis.
Answer:
Regarding point 3ofDS:1, grain andflour were provided intheform ofhumanitarian aid
bytheEuropean Community Commission. ThiswasnotaState procurement activity.
Question 28.
Forsupporting table DS:1, 1996, point 3,andDS:1, 1995, point 4,please describe andclarify,
infurther detail, what ismeant bystructural adjustment assistance provided through investment
aids.
Answer:
Thiswasprovided tospeed uptheprivatization ofagricultural enterprises. Itconsists of
payments forservices provided byexperts andtheirexpenses toconduct landsurveying andvaluation,
assets valuation, andcalculation oflandshares.
Question 29.
Forsupporting table DS:1, 1996, point 4,please clarify anddescribe, infurther detail, what is
meant bypayments according toprogrammes ofregional aid.
Answer:
Such payments were provided toagricultural producers indisadvantaged mountain regions
where climate andnature conditions arenotfavourable.WT/ACC/KGZ/10
Page27
Question 30.
Fortables DS:6 through DS:9, theKyrgyz Republic listsfertilizer andfuelasproduct-specific
support. These items should belisted instead intable DS:9 (nonproduct-specific support). Could
theKyrgyz Republic please make thisadjustment? Inaddition, theitems labelled "Support to
agricultural producers" isvague. Could theKyrgyz Republic please provide amore detailed
explanation ofthetypes ofmeasures included inthese tables.
Answer:
Theadjustment ismade asrecommended. Please seeupdated WT/ACC/4 fortheperiod
1994-1996. (Tobecirculated separately asdocument WT/ACC/SPEC/KGZ/1/Rev.1.)
Thenon-product specific support (fuel, fertilizers, etc.)isprovided (inkind) totheagricultural
producers incoordination withtheoblast/region administration under different terms (e.g.loans, credits,
grants). There arenospecific criteria forproviding suchsupport.
V. TRADE-RELATED INTELLECTUAL PROPERTY REGIME
V.1 General
V.1(d) Application ofnational andMFN treatment toforeign nationals
Question 31.
According totheresponse toquestion 85ofWT/ACC/KGZ/5, theState Agency forIntellectual
Property (Kyrgyzpatent) isreviewing alllawsandregulations toeliminate prohibited differences
inthetreatment offoreign persons andKyrgyz citizens.
IsKyrgyzpatent similarly reviewing alllawsandregulations toeliminate prohibited differences
inthetreatmentofforeignpersonsfromdifferingcountries,inordertoensuremost-favoured-nation
treatment?
Answer:
Yes,itis.Aproper MFN system isbeing developed andwillbeintroduced inthenearfuture.
Question 32.
Please identify anddescribe fully anyprovisions ofKyrgyz laws, regulation orinternational
agreements, which accord advantages, favours, privileges, orimmunities, tonationals ofaforeign
country, thatarenotprovided equally tonationals ofthird countries.
Answer:
InSeptember 1995, theKyrgyz Republic ratified theEurasian Patent Convention (EAPC).
According toRule40ofthepatent instruction totheEAPC, approved on1December 1995,
persons permanently residing orstaying intheterritory ofamember State oftheParis Convention
onProtection ofIndustrial Property where thelevelofthepercapita GNP isUS$3,000 orlower (or
theirrepresentatives) payduties according totemporary privileged tariff.WT/ACC/KGZ/10
Page28
Inaddition, thereisaninternational practice ofestablishing suchprivileges (e.g., withtheWorld
Intellectual Property Organization andtheEuropean Patent Office.)
V.2 Substantive Standards ofProtection
Question 33.
Accordingtotheresponsetoquestion86ofWT/ACC/KGZ/5,"additionalprovisions"onintellectual
property willbeincluded inthelater parts oftheCivil Code. PartIIoftheCivil Code isstill
under preparation andisexpected tobesubmitted toParliament attheendof1977.
Please provide atranslated copy ofthese draft provisions totheWorking Party forreview.
Answer:
AnEnglish translation ofParliament 'sfirstdraftCivil Code forIntellectual Property willbe
forwarded inJune1997. However, thedraftisnowbeing actively discussed andcommented upon.
Theprovided draftCode willcertainly beamended asthesecomments areconsidered andincorporated.
Question 34.
Intheresponse toquestion 112ofWT/ACC/KGZ/5/Add.2, PartIIIoftheCivil Code consists
ofseven chapters (Chapters 54through 60)which address intellectual property rights. Many
ofthese topics appear toduplicate items covered inthespecialized laws.
HowwilltheProvisions intheCivil Code dovetail withtheprovisions inthespecialized legislation
sothatduplication (andconfusion) andpossible contradiction areavoided?
Answer:
Intellectual property experts within SIPA andtheParliament 'soffices areconstantly reviewing
thedraftCivilCode andthedraftspecialized lawsastheydevelop. They areensuring thatduplication,
confusion andpossible contradiction areavoided. These considerations willcontinue tobeapplied
ascomments totheCivil Code andlawsarereceived andincorporated.
Question 35.
How willnecessary amendments tointellectual property lawsbeachieved since, inmany cases,
suchamendments would require changes tobothspecialized lawsandtotheCivil Code?
Answer:
Currently, every effort isbeing made tocreate specialized lawsandCivil Code provisions
which willrequire noamendments intheshort term. However, theGovernment recognizes thatin
thelongterm, technological andother external developments willinevitably necessitate amendments.
Kyrgyz lawallows Parliament tomake suchamendments toboththeCivil Code andthespecialized
laws.WT/ACC/KGZ/10
Page29
V.2(a) Copyright andrelated rights
Question 36.
According totheresponses toquestions 120and121ofWT/ACC/KGZ/5/Add. 2,thedraft law
"OnCopyright andNeighbouring Rights" (atArticle 16)specifically provides forrental rights.
Under thedraft law,doesacopyright owner have theright toprohibit therental ofacopy of
thecopyrighted work after thatcopy hasbeen sold?
Answer:
Yes,acopyright owner hastherighttoprohibit therental ofacopyofhiscopyrighted work
afterthatcopyhasbeensold, ifthework inquestion isanaudiovisual work (which isunderstood to
include cinematographic works), acomputer program, adatabase, aphonogram, oranotated musical
work. Draft Law"OnCopyright andNeighbouring Rights," Article 16(3). Thisprovision was
specifically drafted tocomply withTRIPS Articles 11and14(4) oftheTRIPS Agreement.
With respect toallother copyrighted works, thefirstsaledoctrine applies.
Question 37.
Forexample, thedoes thecopyright owner ofacomputer program, whosoldacopy ofthe
program, have theright toprohibit thepurchaser from renting copies oftheprogram tothird
parties?
Answer:
Yes. Seetheanswer toQuestion 36,above.
Question 38.
Accordingtotheresponsetoquestion119ofWT/ACC/KGZ/5/Add.2,thedraftlaw"OnCopyright
andNeighbouring Rights" incorporates standards provided byinternational agreements towhich
theKyrgyz republic isasignatory, including article 9.1ofTRIPS, which incorporates Article 18
oftheBerne Convention, providing retroactive protection forcopyrighted works.
What steps willtheKyrgyz Republic taketoensure thatthemarket place andthecourts areaware
thatthese rights arebeing restored andtheeffect ofthese rights oncommercial dealers of
copyrighted works?
Answer:
ThedraftlawoftheKyrgyz Republic "OnCopyright andNeighbouring Rights," establishes
theprinciple ofthepriority ofinternational agreements overnational legislation. Article 18oftheBerne
Convention provides theopportunity totheacceding country todefine theterms ofapplication or
non-application ofthereciprocity principle.
However, forthepresent, theKyrgyz Republic hasnotyetdetermined thespecific conditions
ofapplication oftheprinciple inquestion.WT/ACC/KGZ/10
Page30
Question 39.
Does theKyrgyz Republic intend toamend thedraft legislation orpromulgate regulations that
ensure thatTRIPS-consistent rental rights provisions areincorporated intoKyrgyz law?
Answer:
Amendments tothedraftLawareunnecessary. TRIPS-compliant rental rights provisions are
already contained inthedraft Law"OnCopyrights andNeighbouring Rights." Seeresponse to
Question 36.
V.2(b) Trademarks, including service marks
Question 40.
According totheresponse toquestion 94ofWT/ACC/KGZ/5, thetrademark examiners follow
onlytheirpersonalknowledgeinmakingexpertexaminationsandresolvingissuesregardingrefusals
ofregistration, where a"generally-known" trade mark isinvolved.
Perhaps there wasanerror intranslation, buttheTRIPs Agreement andtheParis Convention
provide forprotection of"well-known" marks, not"generally-known" marks.
Answer:
Theofficial Russian textoftheTRIPS Agreement translates theterm "well-known" in
Article16(2)as" - "(well-known).However,theofficialRussiantextoftheParis
Conventiontranslatestheterm"well-known"inArticle6bisas" "(generallyknown).
TheKyrgyz Law"OnTrademarks, Service Marks andAppellations ofOrigin" usesthesame word
usedintheRussian translation oftheParis Convention.
However, thisshould notbeamatter ofconcern: inRussian, bothterms arenearly identical
intheirmeaning.
Question 41.
HastheTrade Mark Expert Examination Department developed criteria forusebythetrademark
examiners inmaking their determination ofwhat isorisnotawell-known mark?
Answer:
No.Atpresent,theExpertExaminationDepartmenthasnotyetdevelopedcriteriafordetermining
whatisorisnotawell-known mark.
Question 42.
Ifso,please describe thecriteria thatisbeing applied.
Answer:
Seeanswer toQuestion 41.WT/ACC/KGZ/10
Page31
Question 43.
Ifnot,doestheDepartment intend toadopt criteria forthispurpose inthenearfuture?
Answer:
Yes,itdoes. Thisissue iscurrently being examined indetail. Kyrgyzpatent islooking for
assistance ingathering information andsolutions onthisproblem.
Question 44.
Alsoinresponse toquestion 94ofWT/ACC/KGZ/5, itisnoted thatjudicial remedies areavailable
totheowners ofwell-known marks through legal actions incivilcourt.
What criteria areused bycivilcourt judges todetermine whether amark iswell-known (for
example, would evidence ofinternational advertising inmedia familiar tothose dealing inthe
relevant product orservice berelevant)?
Answer:
Currently,thereisnoactualpracticeofjudicialconsiderationoftrademarkdisputesintheKyrgyz
Republic. Thus, nocriteria areapplied. However, Kyrgyzpatent isdeveloping criteria foridentifying
well-known marks during theregistration process (seeResponse toquestion 35).Itisanticipated that
civilcourtjudges willusethosesamecriteria inidentifying well-known marks inthecontext oflitigation.
Question 45.
TheKyrgyz Department onAnti-Monopoly Policy conducts audits forviolations oftrademarks
andtrade secrets.
How does theKyrgyz Republic ensure thatforeign-owned trademarks andtrade secrets are
protected bytheDepartment ofAnti-Monopoly Policy?
Answer:
TheAnti-Monopoly Department conducts audits forviolations oftrademarks andtradesecrets
without regard tothecitizenship oftheir owners. TheAnti-Monopoly Department conducts its
enforcement activities onthebasis ofexisting legislation.
V.2(g) Layout designs ofintegrated circuits
Question 46.
According totheresponse toquestion 137ofWTO/ACC/KGZ/5/Add.2, integrated circuit
topographies arenotcovered bythedraft patent law,butwillinstead becovered byaseparate
draft law.
Doesthedraft lawforintegrated circuit topographies satisfy alltherequirements ofArticles 27-34
oftheTRIPs Agreement?WT/ACC/KGZ/10
Page32
Answer:
ThedraftlawoftheKyrgyz Republic "OnLegal Protection ofIntegrated Circuit Topographies"
doesnotcomply withtherequirements ofArticles 27-34 oftheTRIPS Agreement. However, itdoes
comply withtherequirements ofArticles 35-38 oftheTRIPS Agreement, except forArticle 37(2).
Article 14ofthementioned draftlawstipulates thefollowing:
"Iftheinternational treaty oftheKyrgyz Republic establishes rules other thanthose thatare
included inthisLawtherules oftheinternational treaty shallbeapplied."
Question 47.
Please identify anddescribe anyprovisions thatareinconsistent withtherequirements.
Answer:
Seeanswer toQuestion 46.
Question 48.
Please indicate howtheKyrgyz Republic willensure thatalloftheprotection required byTRIPs
Articles 27through 34willbemetinconnection withintegrated circuit layout designs.
Answer:
Seeanswer toQuestion 46.Thegovernment plans tobring theLaw"OnLegal Protection
ofIntegrated Circuit Topographies" intocompliance withArticle 37(2) ofTRIPS.
V.4 Enforcement
V.4(e) Criminal procedures
Question 49.
According totheresponse toquestion 156ofWT/ACC/KGZ/5/Add.2, thecurrent Criminal Code
contains articles providing thefollowing penalties forinfringements ofintellectual property rights:
copyright infringement, twoyears community service orafineofuptosixminimum monthly
wages (circa US$27): patent infringement, same penalties ascopyright infringement; trade mark
infringement, fineofuptoseven minimum monthly wages (circa US$31); andinfringement of
computer software andintegrated circuits, uptotwoyears imprisonment orafineof50-150
minimum monthly wages (circa US$222-666). Thedraft Criminal Code increases thefinefor
trade mark infringement to70minimum monthly wages (circa US$311). (Note: theUSdollar
values werederived from theexchange rateof45minimum monthly wages equal toUS$200, which
wasprovided intheresponse toquestion 41ofWT/ACC/KGZ/5/Add.2).
Thecriminal fines fortheinfringement ofintellectual property rights provided bythecurrent
anddraft Criminal Code appear tobeinsufficient toserve asaneffective deterrent within the
meaning ofTRIPS Article 61.WT/ACC/KGZ/10
Page33
HowdoestheKyrgyz Republic intend toincrease theamount ofthefinesprovided bythecurrent
anddraft Criminal Code forinfringements ofintellectual property rights, inorder toensure that
fines serve aseffective deterrents?
Answer:
Asapreliminary matter, itshould benoted thataverage wages intheKyrgyz Republic are
lower thaninother parts oftheworld. Inthiscontext, thedeterrent effect ofthepresent fines are
greater thantheymight appear tosome WTO members, suchastheUnited States. Itistheposition
oftheGovernment ofKyrgyzstan thatthefines setoutintheexisting Criminal Code andthedraft
Criminal Code arecurrently adequate under Article 61oftheTRIPS Agreement.
Nevertheless, Kyrgyzpatent hassenttoParliament proposals toaddthefollowing penalties
tothedraftCriminal Code:
1. Illegal exploitation ofother person 'strade mark, service mark, firm'sname, appellation of
origin
- Illegal useofatrademark, service mark, firmname orappellation oforigin, ifcommitted
repeatedly orinsuchawayastodamage therightholder: fineintheamount of200to400
minimum monthly wages, orimprisonment foronetotwoyears.
- Illegal useofawarning mark inrelation toatrademark, service mark orappellation oforigin
notregistered intheKyrgyz Republic, ifcommitted repeatedly orinsuchawayastocause
significant damage totherightholder: fineintheamount of100to200minimum monthly
wages, orimprisonment foroneyear.
2. Infringement ofcopyright andneighbouring rights
- Illegal commercial useofobjects ofcopyright andneighbouring rights insuchawayasto
damage theright holder: fineintheamount of200to400minimum monthly wages, or
imprisonmentforthreeyears,followedbydebarmentfromemployment,ifemploymentisrelated
totheoriginal offense, foruptothree years.
- Publication ofanother 'scopyrighted work under thepublisher 'sownname, other exploitation
oftherightholder 'srights ofcopyright and/or neighbouring rights, orimproper andcoercive
claim toco-authorship: fineintheamount of300to600minimum monthly wages, or
imprisonment forfiveyears, followed bydebarment fromemployment, ifemployment isrelated
totheoriginal offense, foruptofiveyears.
- Anyoftheforegoing actions which arecommitted (1)repeatedly; (2)bygroup ofpersons by
prioragreement; or(3)byanorganized group: imprisonment forthreetoseven years, followed
bydebarment fromemployment orother activities, ifemployment oractivities arerelated to
theoriginal offense, foruptoseven years.
3. Infringement ofpatent holder 'srights
- Illegal commercial useofaproduct containing apatented invention, utility model, industrial
design, selection achievement orintegrated circuit topography, conduct ofaprocess covered
byapreliminary patent orpatent, orintroduction intocommerce ofaproduct manufactured
byapatented process, where suchconduct iswithout theconsent ofthepatent holder andcauses
damage tothepatent holder: fineintheamount of200to400minimum monthly wages, orWT/ACC/KGZ/10
Page34
imprisonment foruptothreeyears, followed bydebarment fromemployment, ifemployment
isrelated totheoriginal offense, foruptothree years.
- Misappropriation ofauthorship ofaninvention, utility model, industrial design, selection
achievement, integrated circuit topography, improper andcoercive claim toco-authorship,
ordisclosure oftheelements ofaninvention, utility model, industrial design, selection
achievement orintegrated circuit topography, where suchconduct iswithout theconsent of
thepatent holder (orpatent applicant) andoccurs priortoofficial publication: fineintheamount
of300to400minimum monthly wages, orimprisonment foruptofiveyears, followed by
debarment fromemployment, ifemployment isrelated totheoriginal offense, foruptofive
years.
- Anyoftheforegoing actions which arecommitted (1)repeatedly; (2)bygroup ofpersons by
prioragreement; or(3)byanorganized group: imprisonment forthreetoseven years, followed
bydebarment from employment, ifemployment isrelated totheoriginal offense, forupto
seven years.
Note: Under domestic legislation, "significant damage" isdeemed tobedamage inexcess of500
minimum monthly wages.
VI. TRADE-RELATED SERVICES REGIME
VI.1 General
Question 50.
Weappreciate thedescription oftheservices regime provided intheForeign Trade Memorandum.
However, since thesubmission oftheMemorandum, theSecretariat issued atechnical note,
WT/ACC/5, which provides astandard format forthecomprehensive description ofservices
information.
Weregret anyinconvenience caused byasking foraresubmission ofservices information, but
thesubmission ofaresponse toWT/ACC/5 would greatly simplify andexpedite theWorking Party
review oftheservices regime. Please submit aresponse intheformat.
Answer:
Theresponse toWT/ACC/5 hasbeenforwarded totheWTO Secretariat. (Tobecirculated
separately asdocument WT/ACC/SPEC/KGZ/3.)
VII. INSTITUTIONALBASISFORTRADEANDECONOMICRELATIONSWITHTHIRD
COUNTRIES
VII.1 Bilateral, Plurilateral andMultilateral Agreements Relating toForeign Trade inGoods
andTrade inServices
VII.1(b) Plurilateral agreements relating toforeign trade ingoods andservices
Weseekacommitment from theKyrgyz Republic thatitwilladhere totheWTO Agreement
onTrade inCivil Aircraft atthetimeaccession.WT/ACC/KGZ/10
Page35
VII.2 Economic, Integration, Customs Union andFreeTrade Agreements
VII.2(c) Freetrade areaagreements
According totheresponse toquestion 175ofWT/ACC/KGZ/5/Add. 2,theKyrgyz Republic has
withdrawn fromcoverage bythefreetrade agreements withKazakstan andRussia products subject
toexport licensing. GATT Article XXIV requires freetrade areaagreements toeliminate duties
andother regulations ofcommerce onsubstantially alltrade between theconstituent territories
inproducts originating insuchterritories.
Question 51.
Thelistofproductscoveredbyexportlicensing,asprovidedinAnnexDofWT/ACC/KGZ/5/Add.2,
appears tobequite extensive, including many tariff items fornon-ferrous metals, wastes and
fragments, precious metals andfragments, rare-earth metals andmercury.
Please provide thevalue bygroup, ofexports toRussia andKazakstan, fornon-ferrous metals,
wastes andfragments, precious metals andfragments, rare-earth metals, andmercury, foreach
ofthepastthree years. What isthetotaldomestic production ofthese products, bygroup, for
eachofthepastthree years? What isthetotalvalue ofexports covered bythefreetrade agreements
withKazakstan andRussia?
Answer:
Value ofexports bygroups toRussia andKazakstan (thousands US$)
Exports bygroups 1994 1995 1996
Copper andarticles thereof
Russia - 176.4 -
Kazakstan - 606.6 23.8
Waste andfragments ofcopper
Russia - - -
Kazakstan - 20.2 -
Aluminum andarticle thereof
Russia - 41.5 50.1
Kazakstan - 14.8 41.2
Waste andfragments ofaluminum
Russia - - 21.2
Kazakstan - - -
Lead andarticles thereof
Russia - - -
Kazakstan 3.4 0.2 44.9
Lead waste andfragments
Russia - - -
Kazakstan - 0.2 44.9
Antimony andarticles thereof, incl.waste and
fragmentsWT/ACC/KGZ/10
Page36
Exports bygroups 1994 1995 1996
Russia 3,025.6 4,510.1 4,765.7
Kazakstan 702.3 107.0 292.5
Mercury
Russia 86.2 43.5 120.4
Kazakstan 60.5 - 45.5
Gold
Russia - - 2.3
Kazakstan - - -
Total Domestic Production oftheabove Mentioned Products forthePastThree Years
(thousands US$)
Group ofProducts 1994 1995 1996
Antimony 20,145.76 28,271.79 20,336.13
Mercury 1,582.43 1,395.84 1,910.7
Total Value Exports Covered bytheFreeTrade Agreements withKazakstan andRussia
(thousands US$)
Country 1994 1995 1996
Russia 55,388.2 100,028.5 129,661.4
Kazakstan 94,433.8 66,071.4 112,052.1
Question 52.
Russia hasstated initsWTO accession documentation thatitnolonger applies anyexport duties
orrequirements toexports. Have products previously withdrawn from coverage forthisreason
resumed trade under theFreeTrade Agreement?
Answer:
Yes.