RESTRICTED
WORLD TRADE WT/ACC/LVA/12
15July1996
ORGANIZATION(96-2716)
Original: English
ACCESSION OFLATVIA
Additional Questions andReplies
ThePermanent Mission oftheRepublic ofLatvia hassubmitted thereplies toquestions raised
bymembers following themeeting oftheWorking Party heldon11March 1996. Thequestions and
replies arereproduced hereunder.
_______________
TABLE OFCONTENTS
Question Page
I.Introduction andsummary observation
2.Institutional framework
(b)price system (questions 1-5) 2
II.Economy andforeign trade
1.Economy
(b)privatization (questions 6) 3
III.Foreign trade regime
1.Import regulations
(a)evaluation ofthecustoms tariff regulation (questions 7-10) 4
(b)customs tariff nomenclature, types ofduties, etc. (question 11) 8
(c)taxation regime (question 12) 9
(d)non-tariff measures andimport licensing procedures (questions 13-26) 9
(e)customs valuation (questions 27-31) 13
(h)standards andcertification (questions 32-34) 15
(j)anti-dumping andcountervailing duty (questions 35-36) 15
(i)sanitary andphytosanitary measures (questions 37-38) 16
2.Export regulations
(a)customs duties (question 39) 16
IV.Other policies affecting foreign trade
2.Agricultural policy (questions 40-55) 17
5.Foreign anddomestic investment policy (question 56) 21
6.Government procurement (questions 57-58) 21
7.State trading enterprises (questions 59-62) 22
VI.Laws andlegal acts (question 63) 23
Concerning theregulatory framework ofservices (questions 64-76) 24
Concerning agricultural schedule ofcommitments (question 77) 26
Annex 1Specific Tariff Rates 29
Annex 2Notifications, SPS 32
Annex 3Notification, State Trading 34WT/ACC/LVA/12
Page2
I.INTRODUCTION AND SUMMARY OBSERVATION
2.Institutional Framework
(b)Price System
1. Weseekclarification onLatvia ’suseofprice controls under Regulation No.185. In
particular, wenotethatsome sectors under price regulation arenottraditionally viewed asnatural
monopolies --e.g.,agriculture, forestry, pharmaceuticals (question 1).
Reply
Latvia usespricecontrol under Regulations No.185"Formation ofprices andtariffs ofgoods
andservices". Concerning agriculture: thepriceoffoodgrain (HS1001, 1002, 1003) forStatereserve
isdetermined onlyfordomestic suppliers. Latvian producers havefreechoose -tosellfoodtothe
State ortosellinamarket.
Concerning forestry: theprice ofstumpage isdeterminate onlyinacase, ifState forest isa
subject ofgovernment order.
Concerning theprice ofpharmaceuticals, there isaspecial order forprice regulations (not
control) soastomaintain availability ofpharmaceuticals forpopulation. Thisorder means thatthe
finalprice (inretail sale)maynotexceed theimport orproduction price formore than20%. Import
price isnotsubject toanyregulation.
2. Please indicate byHSlineitemforgoods thatoperate under price controls. Specifically,
which imported goods (byHSlineitem) aresubject toprice controls? Please confirm thatdomestic
andimported goods aretreated equally.
Reply
Ithastobenoted thatimported goods arenotsubject toprice controls. Weconfirm alsothat
domestic andimported goods aretreated equally.
Only forHSChapters 10,11,23there existrecommended prices usedforstatepurchasing
ofgrain products. Producers canfreely choose tosellthese grain products onthese prices ortosell
onmarket prices.
3. Weseekacommitment from Latvia thatitwillpublish current andfuture price controls
initsofficial journal, outlines Latvia ’sforWTO members concerning theconditions under which
Latvia expects tomaintain andusesuchcontrols inthefuture, andpromises totakeaccount of
theinterests ofexporting WTO members asprovided forinArticle III:9 oftheGATT 1994.
Reply
Whole amount ofLatvia ’sLaws andRegulations, including Regulations No.185"Formation
ofprices andtariffs ofgoods andservices", hasbeen published intheofficial journal "Latvijas
Vèstnesis". Inaccordance withRegulations No.185Latvian pricecontrol provisions arenotcontrary
totheArticle III:9oftheGATT 1994. Ithastobenoted thatLatvia isgoing toreduce itsamount
ofprice control asmuch aspossible aswellastotakeaccount oftheinterests ofexporting WTO
members inaccordance withArticle III:9oftheGATT 1994.WT/ACC/LVA/12
Page3
4. "The Government maintains guaranteed prices forfoodgrain purchased forgovernment
reserve (...)during 1995 theState setprice atwhich grain was purchased forState reserves
which were 32000tonnes (3.55 %ofthetotal annual crop) only19,300 tonnes were actually
purchased (...).
Please provide totalvalue ofgrain purchased forgovernment reserves in1995. What share
ofthegovernment ’sexpenditures inagriculture didthisrepresent?
Reply
In1995 theprocurement fortheStateGrain Reserve fromhome-producers was5,700 tonnes
ofgrain forhuman consumption andimported 14,000 tonnes ofgrain forhuman consumption. Interms
ofvalue itrepresents 4.3% ofthebudget foragriculture in1995.
5. What isthetimetable foreliminating thegovernment ’sfixed prices forpurchasing grain?
Reply
After having beenaccepted totheWTO Latvia should consider thepossibility tosettle thematter
within twoyears period.
II. ECONOMY AND FOREIGN TRADE
1. Economy
(b) privatisation
6. Thefigures provided inthetable donotcorrespond tothefigures intheresponse below
thetable (e.g.thetable shows, 5grain processing asprivatised while theparagraph below says
6).AswellQuestion 14asksthesame question asQuestion 13,butsome ofthefigures reported
aredifferent (e.g. Question 13states "184 of613agricultural statute societies arecompletely
privatised... "while Question 14states "...176 from theaggregate 613,agricultural statutory
associationsareprivatised..").CouldLatviapleaseprovideacompleteupdatedtableoftheprogress
ofprivatisation, enumerating thestatus ofalltheagricultural companies including those thatwill
notbeprivatised andthose thathave declared bankruptcy?
Reply
Theprivatisation process hasnotyetbeencompleted, anditisduetothisfact,thatthere have
appeared thesetypes ofdiscrepancies inthereflection ofspecific figures. Thestatus asof1April 1996
isasfollows.
Processing agricultural enterprises:
State enterprises before
privatisationofwhich
privatisedofwhich
privatisation
started
1. Companies tobeprivatised in
compliance withspecial laws182 136 43
1.1 milkprocessing enterprises 15 15 -
1.2 meatprocessing enterprises 14 11 2
1.3 bakeries 14 13 -
1.4 grain processing enterprises 17 10 6WT/ACC/LVA/12
Page4
1.5 agricultural services
enterprises122 87 35
2. Enterprises tobeprivatised
according tothegeneral
legislation:81 29 -
ofwhich sugar refineries 2 2 -
Total; 263 165 43
ofwhich 11aregoing tobeliquidated
Agricultural enterprises:
Total amount ofstatute
societies before
privatisationofwhich
excluded from the
Enterprise Registerofwhich
decision hasbeentaken
forself-liquidationofwhich
operating
613 206 265 142
III.FOREIGN TRADE REGIME
1.Import regulation
(a)Evaluation oftheCustoms Tariff Regulation
7. "Atpresent thefollowing items areof"economic importance" toLatvia: livecattle,
livepigs, beef, pork, fresh poultry, edible meat offal ofcattle, pigandpoultry, several dairy
produce, eggs, grains ofwheat, barley, rye,oataswellasflour andmeals thereof, sugar".
Please define theexpression "economic importance"? What ismeant by"atthistime"?
Does Latvia intend tobroaden itslistof"economically important" products? Using HScodes,
please provide acomprehensive listofthese products.
Reply
These aresensitive products fortheRepublic ofLatvia, because production ofthese products
isconnected withsocial problems incountryside ofLatvia. Production oftheseproducts involves 18%
from thetotalemployment oftheRepublic ofLatvia.
Thecomprehensive listofthese products areasfollows:
HSCode Description ofproducts
0102 Livebovine animals
0103 Liveswine
0201 Meat ofbovine animals, fresh orchilled
0202 Meat ofbovine animals, frozen
0203 Meat ofswine, fresh, chilled
0204 Meat ofsheep orgoats, fresh, chilled orfrozen
0206 Edible offalofbovine animals, swine, sheep, goats, horses, asses, mules orhinges
fresh, chilled orfrozen
0207 Meat ofedible offal, ofthepoultry ofheading No0105, fresh chilled orfrozenWT/ACC/LVA/12
Page5
0209 Pigfatfreeofleanmeatandpoultry fat(notrendered), fresh chilled, frozen, inbrine,
dried orsmoked
0210 Meat andedible meatoffal, salted inbrine, dried orsmoked; edible flours andmeals of
meatormeatoffal
0401 Milk andcream, notconcentrated orcontaining added sugar orother sweetening matter
0402 Milk andcream, concentrated orcontaining added sugar orother sweetening matter
0403 Yoghurt, cipher ...
0404 Whey, whether ornotconcentrated orcontaining added sugar orother sweating matter
notelsewhere specified orincluded
0405 Butter andother fatsandoilsderived from milk
0406 Cheese andcurd
0407 Birds eggs, inshell, fresh
0603 Flowers fordecorative purpose
0701 Potatoes, fresh orchilled
0702 Tomatoes, fresh orchilled
0704 Cabbages, cauliflower, kohlrabi, kaleandsimilar edible brassicas, fresh orchilled
0706 Carrots, turnips, salad beetroot, salsify, celeriac, radishes andsimilar edible roots,
fresh orchilled
1001 Wheat andmeslin
1002 Rye
1003 Barley
1004 Oats
1008 Buckwheat, millet andcanary seed
1101 Wheat ormeslin flour
1102 Cereals flours other thanofwheat ormeslin
1103 Cereal grouts, mealandpellets
1104 Cereal grains otherwise worked, except riceofheading No1006
1105 Flour, mealandflakes ofpotatoes
1106 Flour andmealofthedried leguminous
1107 maltwhether ornotroosted
1108 Starches; insulin
1209 Seeds, fruitandspores ofakindusedforsowing
1501 Lard, other pigfatandpoultry fat,rendered, whether ornotpressed
1502 Fatsofbovine animals, sheep orgoats, raworrendered
1512 Sunflower -seed, safflower orcotton seed
1517 Margarine, edible mixtures orpreparations ofanimal orvegetable fatsoroilorof
fractions ofdifferent fats
1601 Sausages andsimilar products, ofmeat, meatoffalorblood
1602 Other prepared orpreserved meatoffalorblood
1604 Prepared fishproducts
1605 Prepared marine products ofcrustaceans, molluscs orinvertebrates
1701 Cane orbeetsugar andchemically puresucrose, insolid form
1703 Molasses resulting from theextortion orrefining ofsugar
1704 Confectionery from sugar notcontaining cacao
1806 Cocoa powder, containing other sugar orother sweetening matter other
Chapter 19 Products from flour, starch andmilkWT/ACC/LVA/12
Page6
2001 Vegetables, fruit, nutsandother edible parts ofplants, prepared orpreserved by
vinegar oracetic acid
2002 Tomatoes, prepared orpreserved otherwise thanbyvinegar oracetic acid
2003 Mushrooms andtruffles, prepared orpreserved otherwise thanbyvinegar oracetic acid
2004 Other vegetables prepared orpreserved otherwise thanbyvinegar oracetic acid, frozen
2005 Other vegetables prepared orpreserved otherwise thanbyvinegar oracetic acid, not
frozen
2006 Fruits, nuts, fruit-peel andother parts ofplants, preserved bysugar
2007 Jams, fruitjellies, marmalades, fruitornutpureandfruitornutpastes, being cooked
preparations, whether ornotcontaining added sugar orother sweetening matter
2009 Fruit juices andvegetable juices, unfermented andnotcontaining added spirit, whether
ornotcontaining added sugar orother sweetening matter
2203 Beerfrom malt
2204 Wine offresh grapes
2207 Undenaturated ethyl alcohol ofanalcoholic strength byvolume 80%andhigher
2208 Undenaturated ethyl alcohol ofanalcoholic strength byvolume lessthan80%and
lower
2302 Bran, sharps andother residues
2309 Preparations ofakindusedinanimal feeding
8. ‘‘Latvia understands thatfurther comments regarding thisquestion aresubject tobilateral
negotiations onmarket access".
Attheearliest opportunity possible, Canada would appreciate receiving acomplete set
ofdraft market access schedule fortariffs pertaining toagriculture products, including, onHS
linebasis, information oncurrent border measures, current applied customs duties, minimum
specific duties, seasonal duties, licensing, quotas orother non-tariff barriers.
Reply
Latvia, during thecourse oftheprevious discussions, hassubmitted theLawoftheRepublic
ofLatvia "Onthecustoms duty(tariffs)" totheWTO Secretariat. Information onmarket access of
agriculturalproducts,includinginformationoncurrentbordermeasuresisincludedinthisLaw.Customs
duties areapplied according tothisLaw.
Licensing applies toproduct-groups (based ontheHSlisting), aninparticular tothegroups
listed below:
Chapter 10 -grain-plant cultures;
Chapter 11 -flour industry production;
Chapter 12 -oil-basedplantseedsandfruits[oleaginous],variousgrains,seeds,andfruits,
straw, andfodder;
1701 -rawsugar andsugar;
Chapter 22 -allalcoholic beverages;
2302 -bran, siftings, andother sifting andgrinding waste;
2304 -oilcake andother solid waste from soyaoil;
2305 -oilcake andother solid waste from peanuts;
2306 -oilcake andother solid waste from vegetable oil;WT/ACC/LVA/12
Page7
2308 -vegetable products andvegetable waste, usedforfodder;
2309 -fodder;
Chapter 24 -tobacco products;
Inthecategory ''non-tariff barriers ''thefollowing measures canbeincluded;
1) seedproduction requires certificates onthequality oftheseeds;
2) vegetables, andvegetable products require quarantine inspection permits (phyto-sanitary
certificates), which theimporter receives inhiscountry, andwhich isproof ofthefactthat
theimportable production meets allofthestandards oftheRepublic ofLatvia;
3) aspertains tomeat, andmeat-products therequirement is,thatallveterinary standards are
met.Asproof ofthis,aveterinary certificate isrequired, andmust bereceived.
Inconcordance withCabinet ofMinisters Regulations No.185"Order onquarantine, sanitary
andphytosanitary control atcustoms border points formeans oftransportation, trucks andpersons"
onJuly41995:
1) theStateplant-protection service isresponsible forthecontrol ofthefollowing product groups:
0601-0603,0701,0703,0706,0708,0713,0714,0801-0806,0808,0809,0813,090111,090130,
0904, 0906-0908, 0910, 1000, 1101-1103, 1107, 1200, 1201, 1202, 1203, 1204, 1205, 1206,
1207, 1208, 1209, 1210-1212, 12149010, 1400, 1801, 1802, 2302-2306, 2308, 2401.
2) theStateveterinary service institutions areresponsible forthecontrol ofthefollowing groups:
0100, 0200, 0300, 0400, 0407, 0409, 0410, 0500, 0714, 1000, 1200, 1201, 1202, 1204-1208,
1211, 1212, 12149010, 1500, 1600, 2100, 2300, 2302, 2304-2306, 2308, 2309.
3) theEnvironmental Health service institutions areresponsible forthecontrol ofthefollowing
groups: 0200, 0300, 0400, 0409, 0410, 0500, 0700, 0701, 0703, 0706, 0708, 0713, 0714,
0800-0806, 0808, 0809, 0813, 0900, 090111, 0904, 0906-0908, 0910, 1000, 1100-1103, 1107,
1201, 1202, 1204-1207, 1210-1212, 1300, 1500, 1600, 1700, 1800, 1801, 1900, 2000, 2100,
2200, 2402, 2403.
Alloftheabove-mentioned products (ifthere isanappropriate permit) aswellasallanother
goods, except goods which havequantitative restrictions, canbeimported inunlimited quantities, as
longastheappropriate customs feesarepaid.Thequantitative restrictions areapplied forthefollowing
H.S.groups 1001, 1002, 1003, 1004, 1701.
9. Weappreciate thatLatvia iswilling toconvert itsspecific tariffs intoad-valorem tariffs
(transition table inresponse toquestion 18). However, thead-valorem equivalent rates appear
tobe,inmost cases, extremely high.
Please elaborate onhowthese ad-valorem tariffs were calculated? Does thislistinclude
allitems withspecific tariffs? Howarethese advalorem rates consistent withLatvia ’sstatements
onanticipated tariff bindings?
Concerning thetable showing specific andadvalorem tariff rates, howweretheadvalorem
rates calculated? Arethespecific rates applied rates? Onwhat basis aretheyapplied (e.g.per
tonne, perkg)?WT/ACC/LVA/12
Page8
Reply
Concerning question about thecustoms tariffrates(ad-volorem) corresponding tospecific tariffs
(equivalent) wewould liketoexplain thattheyhavebeencalculated onthebasisofthecustoms value
ofgoods.
Thepercentage customs tariff(ad-valorem) hasbeencalculated according tothefollowing formula:
Tariff (advalorem) =Thespecific tariff X100
customs value
Unfortunately, intheprevious answer thetabledoesnotshows alltheitems with specific tariff
rates. Thespecific customs tariffratesareapplied rates. InAnnex 1weprovide thetablewithallitems
which havespecific rates.
Thespecific customs tariffratesapply totheunitofmeasure corresponding totheHScode, that
is,ifthecodehas,according totheHS,akilogram asaunitofmeasure thenthespecific rateapplies
toakilogram, if-apiece thenthespecific rateapplies toapiece, etc.
10. (...)untilthenewCustoms Code oftheRepublic ofLatvia comes intoforce". Could Latvia
indicate when thenew"Customs Code oftheRepublic ofLatvia" willcome intoforce, andwhat
willbeitsmethod forcalculating customs value? Aredomestically produced goods lessexpensive
thanimports ontheLatvian market?
Reply
ThenewCustoms Code willcome intoforce in1997. TheCustoms valuation methods willbe
thefollowing:
-according tothetransaction value;
-according totheidentical goods;
-according tothesimilar goods;
-according totheunitprice method;
-according tothecomputed value method.
ThedrafttextofCustoms Code isavailable attheWTO Secretariat.
Itisdifficult toprovide exact answer tothequestion aredomestically produced goods areless
expensive thanimported. Difference inprices forimported goods when compared withdomestically
produced goods aredepending onthecountry ofimportation andontheproduct imported. The
differences between domestically produced goods andimported goods arelevelled byimport tariffs
which areeconomically wellgrounded.
(b)Customs tariff nomenclature
11. "Agricultural products aswellasother goods thatareimported forprocessing andthen
exported (....) areexempted from import dutyandfrom thevalue -added tax(...)".
Could Latvia provide thepercentage oftotalagriculture imports, byHSline,which were
exempted (foreachofthedutyandthetax)in1995?WT/ACC/LVA/12
Page9
Reply
Inaccordance withApril 41994Regulations No.87oftheCabinet ofMinisters "OnTemporary
Import forProcessing ofGoods andOther Items" goods andother items areexempt from alltaxes
onlywhen theyareimported forprocessing andthefinished products areexported. Ifthefinished
products arenotexported thentheimported rawmaterials fortheirproduction arenotexempt from
taxes.
Theagricultureimportforprocessing-exportingis2.2percentfromthetotalimportofagriculture
in1995. Theimport dutyandthevalue added taxforagriculture, aswellasforallother goods which
areimported forprocessing -exporting are0%.
(c)Taxation Regime
12. Regarding theVAT andexcise taxexemptions for"mass media" andcertain publications
noted inquestion 21;
Please confirm that, consistent withWTO national treatment provisions, imported mass
media goods andservices receive thesame VAT andexcise taxexemptions aslikedomestic goods
andservices.
Reply
Customs authority thatperforms complete customs control procedure ofmass media imported
totheRepublic ofLatvia andregistered abroad shallnotimpose thecustoms dutyandthevalue added
taxonthemass media mentioned inthelistdrawn upbytheexpert commission oftheMinistry of
Culture andapproved bytheMinister ofCulture.
When theabove mentioned mass media issoldintheterritory oftheRepublic ofLatvia itis
subject tothevalue added taxunder theLaw"OntheValue Added Tax".
Thevalue added taxisnotimposed onthemass media registered intheRepublic ofLatvia.
Theabove mentioned differences shallnotapply tothefilms produced abroad (imported).
Presently Ministry ofFinance isareworking ontheamendments totheLaw"OntheValue Added
Tax" which willprovide forequal regulations bothfordomestic andimported mass media.
(d)Non-tariff Measures andImport Licensing Procedures
13. Could Latvia provide further explanation regarding theoperation oftheLaw ‘‘OnLatvia
Grain Market andState Grain Reserves"? Howarethetariff quota andin-quota rateestablished?
How areproducts distributed "without anyrestrictions inthedomestic market"(2.d, e)?What
aretheterms andconditions normally applied tothese imports?
Ifnotrade deficit isprojected bytheState Cereal Bureau canimports takeplace? Ifso,
what requirements areimposed -i.e.isitnecessary tosecure animport license, what isthetariff
applicable tosuchimports (i.e.outofquota rate)?WT/ACC/LVA/12
Page10
Reply
Toimport grains onehastoobtain animport license andtopayentrance taxes incompliance
withtheLaw"OnCustoms Taxes (Tariffs)". Forgrains under HSgroups 1001, 1002, 1003, 1004
thereareestablished in-quotas. Imports cantakeplacealsoincaseofabsence ofdeficit through obtaining
alicense andpaying entrance taxes. Intheevent ofdeficit importation cantakeplace under easier terms
through reduced entrance tariff-rates.
Latvia states thatindomestic market products aredistributed onthesame conditions asevery
other product inthedomestic market.
14. Could Latvia explain whyitsimport licensing system ongrains should notbeconsidered
aquantitativerestrictionsonimportsofgrain?Thetableprovidesfiguresonthevolumeofimported
grains. Whyin1994wasthevolume allowed bylicense formilling wheat greater thantheamount
fixed byCabinet? Why inmost cases, aretheamounts actually imported much lessthan the
amounts allowed bylicense? Why areonlywheat andbarley import quantities fixed byCabinet?
How arequantities determinate? Aretheythesame yeartoyear?
Reply
Quantitative restrictions onimports ofgrain apply toHSgroups 1001, 1002, 1003, 1004. The
restofthegrain products arenotsubject toquantitative import restrictions.
Alicense isadocument acknowledging anentrepreneur 'sright toperform import operations
foracertain grain volume. Ifanentrepreneur failtoexercise hisrights, hislicense hasbeenannulled
andlicence isgiven toother entrepreneurs. Inconsistency between thequantities allowed bylicenses
andactually imported volumes ofgrains isduetothefactthatentrepreneurs whohavereceived their
licenses failtousethembecause ofdifficulties facing theme.g.,specific conditions intheCISmarket.
Import quantities aredetermined when drawing uptheState Grains Production andConsumption
Balance-Sheet.
15. HowdoesLatvia intend tomodify itsimport licensing requirements foralcoholic beverages
tocomply withWTO regulations governing non-tariff barriers?
Reply
Regarding Latvia ’simport regime foralcoholic beverages theonlynon-tariff barrier isimport
licensing which isusedaccording torequirements ofWTO Agreement onImport Licensing.
16. Please expand onthisresponse byexplaining howtariff-rate quota applied toimports from
European Union arenon-discriminatory.
Reply
Tariff-rate quotas applied toimports fromEuropean Union areagreed astariff concessions for
further trade liberalisation withtheaimtoestablish afreetrade areainaccordance withAgreement
onFreetrade between Latvia andEUandinconformity withGATT 1994. Thisfreetrade agreement
ispreferential agreement which isconcluded under Article XXIV ofGATT 1994andhereby constitutes
anexemption from MFN treatment.
17. TheUnited States isconcerned thatLatvia maintains numerous licensing systems for
agricultural products (questions 23-29) thatmayacttorestrict imports inamanner inconsistent
withWTO rules.WT/ACC/LVA/12
Page11
Reply
Latvia isaware, thatforsome products thecurrent licensing system isnotconforming some
oftheWTO regulations, however, wehaverepeatedly affirmed ourreadiness tochange thatwithin
areasonable amount oftime, using tariffication mechanism.
18. Latvia states thattheState Cereal Bureau onlypurchases grain forthecommodity reserve
anddoesnotinfluence conditions forgrain soldontheopen market.
Why must atariff-quota beestablished inorder fortheState Cereal Bureau topurchase
grain when there isadeficit ofthecommodity? Inthefuture, howdoesLatvia plantoprovide
more transparent market access forstate imports ofgrain?
Reply
Atariff-quota isestablished onlyinorder topurchase grains bytheState Cereal Bureau. The
ideaistoguarantee reduced entrance tariff-rates fortheentrepreneurs trading ingrain under conditions
ofdeficit .
Latvia hasbegun tobring itsimport licensing system intolinewiththeWTO requirements. Latvia
isready toundertake relevant commitments andrecord them intheProtocol ofAccession.
19. Latvia states thatsome import regulations aremaintained forwheat, rye,barley, oats,wheat
flour, other cereal flours, cereal groats, cereal grains otherwise worked, andresidues/waste from
foodindustries (question 25).Theresponse toquestion 60indicates that"strict import regulations"
(import licensing) actasaquantitative restriction forHS1001, 1002, 1003, 1004, 1101, 1102,
1103, 1104, and2300.
What typeofimport regulations, besides those solely forstatistical purposes, areinplace
forthese commodities?
Reply
Import licensing andquantitative restrictions aremaintained forHSgroups 1001, 1002, 1003,
1004. Forallanother HSgroups 1101, 1102, 1103 1104 and2300 onlyimport licensing isapplied.
Import regulation iscarried outincompliance withtheLaw"OnLatvia ’sGrain Market andState
Grain Reserves" andwiththeLaw"OnCustoms Duty (Tariffs)". There arenoother types ofimport
regulations.
20. Weremind Latvia thatanynon-tariff import measures applied toagricultural products
need tobeeliminated orbrought intoconformity withtheWTO prior toaccession.
Reply
Seereply 14,15,21.
21. Regarding theimport licensing system forsugar, atthelastWorking Party meeting Latvia
stated thatitwould bring itslicensing regime onsugar intocompliance withtheWTO upon
accession.
DoesLatviaintendtoeliminateorotherwisebringintoWTOconformitythequotasonsugar?
Will Latvia alsoeliminate thebanonwhite sugar? Ifnot,howwillLatvia bring thisinto
conformity withtheWTO?WT/ACC/LVA/12
Page12
Reply
TheaimoftheLaw"OnSugar" istoprescribe economic andlegalprotection ofinternal market
forsugar which isproduced intheRepublic ofLatvia aswellastoprotect sugar beetgrowers and
sugar producers.
According tothisLawquantitative restrictions forimport ofsugar areestablished inRegulations
No.61"Onorder toissuing licenses forsugar wholesale andimport" ofCabinet ofMinisters byJuly
71994.
BytheendofthisyearLatvia isready toprepare foradoption allnecessary changes inappropriate
legal actstobring import regime forsugar according totheWTO requirements. Thechanges in
legislative actscould enter inforce oneyearafterLatvia ’saccession totheWTO.
22. Inresponse toquestion 60,Latvia notes thatonlysales ofspecially labelled tobacco goods
ispermitted.
Howaresuchlabels awarded? Hasthispermit system ended 1December 1995, asresponse
implies?
Reply
Theexcise taxlabels fortobacco goods aredistributed inLatvia according toRegulations "On
distribution oftobacco labels intheRepublic ofLatvia", issued byLatvian StateRevenue Service and
amendments tothisorder stated byRegulations No.138,dated 27July1995. Anycompany which
hasgotthelicence fortobacco import forsaleorproduction forsale,applies totheState Revenue
Service foracertain number oflabels andpaysthevalue ofthelabels andVAT. Theordered number
oflabels isproduced in14daysandthecompany cangetthelabels afterpaying theexcise taxfor
thenumber oflabels ordered.
Thesystem ofspecial permits (licences) hasnotbeenstopped on1December 1995 andisstill
under operation.
23. Regarding import licensing foralcoholic beverages:
Latvia states thatimporters ofalcoholic beverages arefreetochoose whattypeofalcohol toimport
andfrom what countries (question 28).Thisexplanation doesnotappear tojustify theneedfor
licensing. Despite thefactthatimporters have thefreedom tochoose what toimport andfrom
where, totalimports ofalcoholic beverages arestilllimited asaresult oflicensing. Thisrestriction
must bebrought intoconformity withtheWTO.
Regarding import licensing foralcoholic beverages: Thedocumentation requirements
forimport licenses foralcoholic beverages appear tobeoverly burdensome andgobeyond what
isadministratively necessary toprotect consumer health.
How doesLatvia plantobring itslicensing regime intoconformity withWTO rules?
Reply
Licensing ofimport ofalcoholic beverages isaprocess thatisconstantly developing, improving
andsimplifying. Stillthemain objective oflicensing istodecrease illegal import andproduction of
alcohol, thusprotecting consumers, andturning against consumption oflowquality oreven
health-hazardous alcohol. Noquotas fortheimported volume ofalcohol orrestrictions ofassortmentWT/ACC/LVA/12
Page13
areexercised bymeans oflicensing. Thenumber ofimporters isnotadministratively limited andthe
importers canfreely choose thesource ofimport -country, producer, supplier. Theadministrative
loadforreceiving alicence foralcohol import isgradually reduced andatpresent itisclose tothe
absolute minimum required tomake importers obeythelawandgivethenecessary information tostate
institutions. Theamount ofsuchinformation doesnotexceed therequirements stated byWTO and
thesaidrefers towhole licensing procedure aswell.
Itshould beadded thattheprocedure offorming, registration andhandling ofthedocuments
necessary forreceiving alicence isawhole system ofstatecontrol andisequally referred tolocal
alcohol producers aswellastotheimporters.
24. Concerning thetariff ratequotas established withtheEU:
Weappreciate thatLatvia hassubmitted itsFTA withtheEU(WT/REG/7) forreview bythe
Member Countries, however, weseem tobemissing theannexes tothisagreement. TheUnited
States isspecifically interested inobtaining alistoftheproducts covered bytariff-rate quotas,
thequantities negotiated, information ontheadministration ofquotas, andthein-quota and
out-of-quota tariff rates.
Reply
Latvia hassubmitted itsFTAwiththeEUaswellasAnnexes tothisAgreement totheWTO
Secretariat. Thelistoftheproducts covered bytariff-rate quotas andquantities foragricultural products
aresetinAnnex XIofthisAgreement. Thein-quota tariff andout-of quota tariffratesforAgricultural
products aresetinAnnex XofthisAgreement. Thelistofproducts covered bytariff ratequotas and
quantities forprocessed agricultural products aresetinAnnex 4toProtocol 2ofthisAgreement. The
in-quota tariff andout-of quota tariff ratesforprocessed agricultural products aresetinAnnex 3to
Protocol 2ofthisAgreement.
25. Concerning thetariff ratequotas established withtheEU:
Weunderstand thatLatvia negotiated tariff-rate quotas withtheEUinorder toopen access for
certain agricultural products. However, iftheEUistheonlycountry thatwillbenefit from this
access onceLatvia isamember oftheWTO, itseems thatother countries would betreated in
adiscriminatory fashion.
Reply
TheAgreement between Latvia andEUispreferential tradeAgreement andhastobeconsidered
asAgreement concluded under Article XXVI ofGATT 1994.
26. Concerning thetariff ratequotas established withtheEU:
PleaseexplainhowLatviawillprovidemarketaccessfortheseproductstootherMemberCountries.
Reply
Seereply 25.
(e)Customs Valuation
27. Latvia hasstated thatitrecognises theWTO-inconsistency ofitspresent customs valuation
legislation. Webelieve thattheinformation supplied asaresponse totheWTO questionnaire
onCustoms Valuation (inWT/ACC/LVA/4) isdated duetonewlegislation being developed.WT/ACC/LVA/12
Page14
What isthestatus ofthenewCustoms Valuation legislation? Howisitconsistent withWTO
principles? Please confirm thattheuseofreference prices willnotbeincluded inthenew
legislation. Ifpossible, itwould bedesirable toobtain acopy ofthenewdraft law.
Reply
ThenewCustoms Code willreplace theLaw"OnCustoms duties (tariffs)" TheCustoms Code
willcome intoforce in1997. TheCustoms Valuation corresponds totheWTO Agreement on
Implementation ofArticle VIIoftheGeneral Agreement onTariffs andTrade. Thenewlawdoesnot
provide tousereference prices. ThedraftCustoms Code isavailable attheWTO Secretariat.
28. IsLatvia stillseeking atwo-year transition period forCustoms Valuation? When willthe
newlegislation beimplemented?
Reply
Latvia needs atwo-year transition period forelaboration ofthesecondary legislation which will
relate totheimplementation ofCustoms Valuation. ThenewCustoms Code willcome intoforce in
1997.
29. Regarding theuseofminimum values, wecannot agree thatLatvia hasrecourse totheuse
ofofficially established minimum values pursuant toparagraph 2ofAnnex IIItotheAgreement
ontheImplementation ofArticle VIIandwiththeMinisterial Decisions andDeclarations contained
intheWTO Valuation Committee texts relating tominimum values.
Reply
Asitwasalready mentioned, afterthenewCustoms Code comes intoforce thecustoms value
willbecalculated onlyaccording tothemethods prescribed bytheCode. They arementioned inReply
10andfullycorrespond toWTO requirements.
30. Latvia isnotadeveloping country. Anyrequest fortransitional arrangements forsuch
measures must bejustified andsubject toWorking Party approval.
Reply
Theabove-mentioned two-year period istheshortest timenecessary forconforming WTO
requirements. Within thisperiod thenewCustoms Code willbeadopted byParliament andthenit
willbenecessary towork outanumber ofstatutes inorder tointroduce thisCode aswellastotrain
customs officers inorder toimplement theCode correctly.
31. WealsoseekLatvia ’sadoption oftheWTO software valuation decision aspartofits
accession package.
Reply
Latvia isready toaccess totheWTO software decision intwo-year period. Latvia isableto
implement thisdecision afterthenewCustoms Code willbeinforce andsecondary legislation which
willrelate tothisnewCustoms Code willbeelaborated.WT/ACC/LVA/12
Page15
(h)Standards andCertification
32. LatvianotesintheirresponsetotheTBTquestionnaire(inWT/ACC/LVA/4),thatitpresently
publishes onlyfinalstandards -notdraft regulations asthenotice andpublic comment provisions
oftheTBT andSPSagreements require.
Reply
Theannouncement ispublished intheofficial journal "Latvijas Vèstnesis"for establishment of
technical committee foracceptance ofNational Standards. Allinterested parties canparticipate inthe
technical committee where theyareprovided withdraftofstandards. Itisnotpossible topublish all
drafts ofstandards because offinancial situation inLatvia. Thedrafts ofstandards andSPSrulesare
being senttoallinterested parties fordiscussions andcomments. Thus, allinterested parties canbe
involved inthediscussion before approval ofthestandards andSPSrules andcanreceive standards
before theofficial approval ofthem.
33. HasLatvia established theadministrative procedures forstandards development thatwill
enable allinterested parties toparticipate inLatvia ’sstandards development process? What is
thestatus ofthe"information center" thatLatvia states itintends toestablish?
Reply
Thepossibility toparticipate inthetechnical committees isalready ensured forinterested parties.
Aswehavementioned intheprevious answer usually theannouncements arepublished forestablishing
ofparticular technical committee andallinterested parties canparticipate inthework oftechnical
committee. Thetechnical committees consist oftherepresentatives ofenterprises, manufactures, trade
representatives,LatvianNationalStandardisationandMetrologyCentre,differentministries,Organisation
ofProtection Consumer Rights, commercial structures, etc.
Thestatus of"Information Centre" isunder thedevelopment atpresent time.
Itisplanned toorganise itinaformofassociation. Information Centre willprovide allinformation
onquality assurance issues andlegislation, TBT andSPSrequirements which conform theWTO
requirements.
34. III:1(h)and(j).DoesLatvia accept exporters ’certificates thattheirproducts e.g.processed
foodproducts conform toLatvian regulations?
Reply
Yes,Latvia accepts exporters ’certificates forprocessed foodproducts iftheseproducts conform
toLatvia ’sregulations.
(j)Anti-dumping andCountervailing Duty
35. Latvia notes thatitiscurrently developing newlegislation addressing anti-dumping and
countervailing dutyprovisions.
What isthestatus ofthislegislation? Isthedraft legislation consistent withWTO rules?
Reply
Atpresent there doesnotexistanydraftlegislation onanti-dumping andcountervailing duty.WT/ACC/LVA/12
Page16
36. (concerning III(l)(d, e,i,andj)Regarding implementation oftheprovisions ofthe
Multilateral Trade Agreements, e.g., regarding theAgreements thataddress SPS, TBT, and
CVD/Anti dumping provisions inLatvia ’strade regime, weexpect thatLatvia willhavelegislation
andadministrativeproceduresinplaceatthetimeofitsaccessiontoimplementallWTOprovisions.
Ifthisshould notbethecase, Latvia should discuss these issues withtheWorking Party prior
tofinalization ofthenegotiations.
Reply
Latvia isready todiscuss these issues withtheWorking Party prior tofinalization ofthe
negotiations.
(i)Sanitary andPhytosanitary Measures
37. Could Latvia provide uswithacopyoftheir official listofquarantinable pests (plant) and
diseases (animal)?
Reply
Theofficial listofquarantinable pests (plant) anddiseases (animal) isavailable attheWTO
Secretariat
38. HasLatvia submitted itsQuestionnaire onSanitary andPhytosanitary Measures? Latvia
states thatitwillconform toArticle 7andAnnex BoftheSPSAgreement after theestablishment
oftheNational Food Centre (question 50). WilltheNational Food Centre beestablished prior
toaccession? Ifnot,howmuch ofatimedelay isanticipated?
Reply
Yes, Latvia hassubmitted itsQuestionnaire onSanitary andPhytosanitary Measures. The
questionnaire onSPSisattached inAnnex 2.TheNational FoodCentre willbeestablished priorLatvia ’s
accession totheWTO.
2. Export regulations
(a) Customs duties
39. III:2.WillLatvia undertake tophase-out itsexport dutyonnon-ferrous metals overan
agreed transition period ?
Reply
Yes,Latvia isready toabolish export dutyfornon-ferrous metals bytheyear2000.WT/ACC/LVA/12
Page17
IV.OTHER POLICIES AFFECTING FOREIGN TRADE
2.Agricultural policy
40. TheUSGseekstoclarifyseveralpointsmadebythegovernmentofLatviainWT/ACC/LVA/8
(questions 54-63). Forexample, westillneedinformation thatexplains towhat extent products
receiving subsidies arealsoprotected withquantitative restrictions.
Reply
InLatvia, localsupport isoperated asspecified inSupporting Table DS:1 ''Domestic Support:
Latvia; Reporting Period 1994 1995'',which canbeseeninthefifthpage oftheWT/SPEC/20
document.
Oftheproducts, which receive these subsidies, quantitative restrictions areforthefollowing
HSgroups 1001, 1002, 1003, 1004, 1701.
Export subsidies in1994 and1995 wereapplied toproducts suchasbutter, cheese, rye,milk,
anddairy products. Ofthisparticular group ofproducts, noneareprotected withquantity limitations.
These products, uponpayment ofthecustoms tax,canbebrought intoLatvia inunlimited quantities.
41. WetakenoteofLatvia ’sintent toreduce itsagricultural subsidies overwhat weassume
tobeasixyearperiod. However, Latvia ’sAgricultural Commitments onexport subsidies do
notlistanyreductions. They onlystate thelevelofsubsidy applied.
Reply
Latvia 'sagricultural export subsidy reduction isreflected intheWT/SPEC/20 document, table7,
page4.inwhich thesubsidy reductions canbeseenpertaining tobothexpressions ofvalue, aswell
asreduction ofthesubsidised amount, which isinaccordance withtheresults oftheUruguay Round
Agreement onagriculture, Article 9.
Latvia willco-ordinate it’sactions according totheresults oftheUruguay Round Agreement
onAgriculture. However, asalready mentioned, during 1996, subsidies arenotplanned onexports,
duetotheinsufficient financing ofthestatebudget.
42. Does Latvia intend tofurther reduce itsexport subsidies?
Reply
Latvia willcontinue reduction ofexport subsidies according totheWTO requirements.
43. Wemaintain serious reservations about permitting Latvia toenter intoWTO membership
with anytrade distorting agricultural subsidies inplace, especially given thatLatvia didnot
establish these programs until1994. Establishing agricultural export subsidy programs asrecently
as1994 contradicts thespirit inwhich theUruguay Round agreement wasnegotiated.
Reply
According totheWTO document WT/ACC/4, itisstated, thatcountries, whoarepreparing
tojointheWTO, asabaseperiod, maytakethelastthree years (average ofthemost recent 3year
period).WT/ACC/LVA/12
Page18
According tothese rules, Latvia, asabaseperiod, hastaken theyears 1994-1996. Therelevant
information fortheyear19941995issubmitted andLatvia isprepared tosupplement theappropriate
tables withthefigures from 1996.
Aspertains todistorting agricultural subsidies, thenthose areonlyonflaxandoncredit interest
ratesubsidy andthose canbeseeninDomestic support tableDS:6 andDS:9. Subsidies forallanother
products which arementioned inthetableDS:6 according totheAMS calculation areatthelevelof
deminimis. Nonproduct subsidies which arementioned inthetableDS:9 arealsoatthelevelofde
minimis.
44. Aprimary objective oftheUruguay Round agreement wastolimit theamount ofmoney
andproducts covered bysubsidies. Itisdifficult fortheUnited States toaccept Latvia ’s
agricultural subsidies carte blanche when countries which participated intheUruguay Round
negotiations paidsuchahighprice inthename oftrade liberalisation.
Reply
During preparation ofthecalculations forthepurpose ofclarifying Latvia 'ssubsidy level, it
wasconcluded, thattheaverage subsidy levelon1hais8Ls.
Incomparing thislevel withthesubsidy level indeveloped nations, which, according toour
information is:United States -150US$/ha (~80Ls/ha), Canada 175CA$/ha (~95Ls/ha), wehave
concluded, thatsubsidy levelinLatvia ismuch below ofthelevelforabove mentioned countries. Also,
itmustbementioned, thatalargepartofLatvia 'sexisting subsidies areincluded inthegreen subsidy
listing, which contains allowed subsidies according totheUruguay Round agricultural agreement.
45. What kindoflabelling isneeded fortobacco tobepermitted intotheterritory ofLatvia?
Reply
There exists acertain pattern forthetobacco labels intheRepublic ofLatvia andtheStateRevenue
Service hassigned acontract withtheproducer ontheproduction oflabels.
46. Themanner inwhich theGOL determines shortages seems tobeaprojection orestimate
rather thananactual calculation.
Reply
AtpresenttimeLatvia’smarketforagriculturalproductsisstilldeveloping,agriculturalproduction
isnotstable, prices foragricultural products arefluctuating. Allthese factors negatively effect the
specialisationofagriculturalproduction,aswellasprovidingofLatvia’smarketforagriculturalproducts.
Therefore, there existanorder, thatinthecaseofdeficit ortherapid changing ofprices ininternal
market, theCabinet ofMinisters canintroduce tariff ratequota withlower tariff forcertain product.
Tariff ratequota isgranted toimporters innon-discriminatory fashion. Inthecaseofimport under
amount forwhich atariff ratequota exists, imports cantakeplace under tariff setupforthisproduct
according totheLaw"Oncustoms duty(tariffs)" andthere isnoanyquantitative restrictions except
fewproducts forwhich quantitative restrictions exist. These products areHS1001, 1002, 1003,1004,
1701.WT/ACC/LVA/12
Page19
47. How canLatvia determine what products itwillneedandwhich domestic industries could
bedamaged byimports based onsuch conjectures? When Latvia adopts Anti-dumping and
Countervailing Duties, willthiscurrent system beeliminated andreplaced byatrueinjury test
compatible withWTO guidelines?
Reply
Atpresent timeLatvia doesnothaveanylegislation onanti-dumping andcountervailing duties.
Current system which provides guidelines foranti-dumping andcountervailing duties willbeeliminated
when newCustoms Code willcome inforce.
48. "(...)intheperiod May1994toDecember 1995, thetotalimport oftobacco package bearing
theexcise taxlabel was16,100 million".
What wasthevalue (inUS$) andvolume (incases) ofthose packages foreachof1994 and
1995? What wasthevalue ofexcise taxforimported anddomestically produced cigarettes for
those twoyears?
Reply
In1994 theimport was5781330cigarette boxes forthetotalvalue of3179731Lsor
5781330US$.
In1995 theimport was10328690cigarette boxes forthetotalvalue of5680779Lsor
10328690US$.
Theexcise taxisthesamefortobacco goods produced inLatvia andforimported -i.e.0.0035 Ls
peronecigarette, 0.01Lsperonecigar orcigarillo and100% forallother tobacco products.
49. Q.62-63; Agricultural policy. What istheWTO justification forsuchtemporary measures?
Does Latvia intend toeliminate suchmeasures prior toaccession?
Reply
TheRegulations No.20were adopted inJanuary 171995, bycurrent timethese Regulations
werenever applied. Duetothefactthatthisisonlylegalactwhich deals withthesafeguard measures
itisnecessary forLatvia tokeeptheseRegulations inforce bytimewhen newlegislation onSafeguard
measures upgraded totheWTO standards willbeadopted inreplacement toexisting rules.
50. Inrespect ofgrains, Latvia needs toprovide further information asitsreplies are
contradictory andpoint totheuseofimport licensing fortheadministration ofimport quotas
forgrain suchaswheat, rye,barley, oatsandwheat flour. Latvia hasnotaddressed allaspects
ofquestion 25andshould explain whyitsimport licensing system ongrains should nobeconsidered
animport quota.
Reply
TheStateCereal Bureau annually draws uptheGrain Production andConsumption Balance-Sheet
where itfixesgrain quantities needed forimport andexport.
Inevent there isashortage inhome-produced grains (wheat, rye,barley, oats)andtheinland
demand therefore cannot bedulysatisfied thevolume ofimported grains withreduced entrance tariff-rate
isfixed. Withtheviewofproviding control overimplementation ofcustoms tariffquotas therelevant
licenses areissued.WT/ACC/LVA/12
Page20
Inconsistency between thevolume allowed bylicenses andthevolume actually imported can
beexplained bythefactthatduetodifferent organisational, technical andfinancial factors anumber
ofentrepreneurs failtousetheirlicenses, especially incaseoftrading withtheCISstates.
51. With regard tosugar, thereplies tothese questions, clarify thattheimport banapplies only
towhite sugar, withimports onlybeing allowed "forproduction use". Themaintenance ofan
import prohibition/import restriction would nobeconsistent withArticle XIoftheGATT 1994
andWTO Agreement onAgriculture. Thesugar regime would alsobeinconsistent withArticle II
oftheGATT 1994 andperhaps theTRIMS Agreement, iftheissue ofimport licenses istiedto
thepurchase oruseofdomestically produced sugar. Accordingly, Latvian needs toprovide further
information onthescheme, suchasthebasis foranexemption being allowed andanimport license
being granted.
Reply
Seereply 21.Existing order provides, thatlicences forinternal market areissued ona
non-discriminatory baseandtheyareusedonlyforstatistical purposes.
Theissuing ofimport licences forsugar isnottiedtothepurchase oruseofdomestically produced
sugar, therefore itisnotinconsistent withtheWTO TRIMS Agreement.
52. Latvia hasadvised thatitwillnegotiate theabolition ofsugar licensing within aresponsible
period oftime, provided anappropriate level oftariff protection issettoprotect theindustry.
What transition period does Latvia have inmind, how would theimport restriction be
eliminated/phased out,what level oftariff binding isconsidered toprovide "decent" tariff
protection, andisLatvia seeking transition forother measures ?
Reply
Seereply 21.
53. What istherelationship oftheEUtariff access andanyimport quotas ?IstheEUaccess
inaddition theimport quotas?
Reply
Latvia doesnothaveimport quotas (import quantitative limitations), except theonesalready
mentioned (sugar, andsome grain groups). Seereply 8.
TheFreeTrade Agreement withtheEUprovides forcustoms tariffquotas. That means amore
liberal trade regime oncertain amounts ofcertain products. Asimilar tariff reduction inconnection
toamounts canbesetoutside ofthese customs tariff quotas approved bytheFreeTrade Agreement,
butthisdoesnotmean trade-limiting, ineffect, itisactually trade-liberalising, duetothefact,that
therelaxed trade regime issetonlyatthepoint when acertain products 'deficit isoccurred inthe
localmarket, andinorder tostimulate import ofthisproducts. Theamounts ofcustoms tariff quotas
aredistributed bywayofcompetition onequal conditions forallimporters.
54. Weseekconfirmation thatonagriculture domestic support, Latvia isclaiming deminimis.WT/ACC/LVA/12
Page21
Reply
Weconfirm, thatLatvia, aspertains tolocalsupport, hasaccepted requirements deminimis,
aswellasthefact,thatLatvia conforms these requirements.
55. Weacknowledge thatLatvia isunable toprovide details ofthetemporary measures that
willapply under Regulations 20.However, wewonder ifLatvia isconsidering implementing special
safeguards aswellastariff ratequotas astemporary measures?
Reply
Regulations No.20,eventhough published 20January 1995, havenotbeenactually utilised
upuntilnow. However, itisanticipated intheregulations, that,ifneedbe,if,asaresult ofanimport
agreement, there appear, ormayappear, significant losses, heavy interruptions ordifficulties, that
forproducers ofthecertain product would cause asignificant deterioration ofeconomic orsocial
situation, then supplementary temporary measures canbeimplemented, setting quotas onspecific
products. Ifitwillbedone, thenitwillbeinaccordance withtheAgreement onAgriculture Section 3,
Article 5,(special safeguard regulations) andAgreements onSafeguards.
5.Foreign andDomestic Investment Policy
56. InWT/ACC/LVA/8, question 64,Latvia notes thatitisintheprocess ofcompleting
amendments toitsinvestment lawsthatwillbring itintocompliance withtheTRIMS agreement.
What isthestatus ofthese legislative changes? Wewould liketoseethese, ifpossible, or
getafirmer timeforcompletion.
Reply
WithaviewofbringingtheLaw"OnForeignInvestmentsintheRepublicofLatvia"inconformity
withtheWTOAgreementonTradeRelatedInvestmentMeasurestheappropriateamendmentsarepassed
relevant internal procedures andareinforce since April 1996. Theamended Lawprovides forfull
national treatment offoreign investors; sections concerning localcontent, export performance etc.are
fullyphased out.TheLawwithallchanges isavailable attheWTO Secretariat.
6.Government Procurement
57. Latvia notes thatitiscurrently drafting anewLawonPublic procurement.
What isthestatus ofthislegislation? Willitsprovisions conform toWTO rules?
Reply
ThedraftLawonpublicprocurementhasbeenexaminedbytheCabinetofMinistersandpresented
totheSaeima (Parliament). TheLawwillcome intoforce presumably atthebeginning of1997. The
newLawwasdrafted inconformity withUNCITRAL Model Lawandaccording totheWTO Agreement
onGovernment Procurement.
58. Weseekacommitment from Latvia thatitwillseekobserver status andaccession tothe
Government Procurement Agreement onanaccelerated basis aspartoftheaccession package.WT/ACC/LVA/12
Page22
Reply
LatviawillseekobserverstatusandaccessiontotheWTOAgreementonGovernmentProcurement.
Adecision onaccession totheAgreement onanaccelerated basis hasnotyetbeenmade duetothe
needtoconclude internal procedures forbringing intoforce theLaw"OnGovernment Procurement".
7.State Trading Enterprises
59. While weappreciate theadditional information Latvia hassupplied onitsstatemonopolies,
wecontinue tocontend thatthrough instruments suchaslicensing arrangements, Latvia appears
tomaintain state-sanctioned andprotected production, trade anddistribution forproducts such
asalcoholic beverages, tobacco goods, sugar, andgrain products.
Reply
Tradeinproductsalcoholicbeverages,tobaccogoods,sugarandgrainproductsisnotbeconsidered
asstatemonopolies. Licensing requirements areapplied fortheseproducts. Allinformation concerning
requirements toreceive import licenses isprovided inquestionnaire onimport licensing which Latvia
hassubmitted totheWTO Secretariat (published inWTO document WT/ACC/LVA/4).
60. Article XVII doesnotrelieve aWTO Member oftheresponsibility toapply other WTO
obligations totrade conducted bystatetrading enterprises. Weencourage Latvia toreview the
operations ofthese entities inlightofGATT Article XVII andtheWTO Understanding onthe
Interpretation ofGATT Article XVII aswellasother WTO obligations andtoindicate precisely
prior tofinalization oftheaccession negotiations howLatvia intends tobring theoperations of
these state sanctioned operations intoconformity withtheprovisions oftheWTO.
Reply
Latvia hasexamined listofLatvia ’senterprises andsubsequently provides inAnnex 3,
Questionnaire onState Trading enterprises foranenterprises which would beconsidered asanstate
trading enterprises. Latvia confirms itsreadiness toexamine theexisting enterprises and,ifnecessary,
torevise theissue inorder toconform theWTO requirements.
61. TheState Cereal Bureau istheState institution acting under supervision oftheMinistry
ofAgriculture (...)andprocures grain onlyforreplenishment oftheState Grain Reserve ‘‘.
Could Latvia please provide acomprehensive listofgrains procured in1995 withthevalue and
volume itrepresented? What share oftotalgrain output didthisrepresent? What aretheestimated
figures for1996?
Reply
In1995 theState Cereal Bureau haspurchased from thehome-producers :
rye: 3,711.6 tonnes foramount Ls238,114.70
wheat: 1,979.41 tonnes foramount Ls157,675.50.
Thiscomprises 0.8% ofthegrain produced inthecountry in1995.
Theestimated figures for1996totalgrain harvest is880,000 tonnes. FortheStateGrain Reserve
there canbepurchased around 25,000 tonnes, or2,8% ofthegrains produced inthecountry.WT/ACC/LVA/12
Page23
62. "The State Grain Board isnotaState enterprise, butaState institution (...)
Weneed more details ontheroleofthisandother similar institution. Could Latvia provide
alistofitsState institutions suchastheState Alcohol Monopoly Board, theState Grain Board,
theState Cereal Bureau andtheTobacco Department) withtheir respective operating budgets
andmain economical activities? How dotheyoperate? What aretheir operating budget? Also
Latvia states thatitsState Grain Board isnotinvolved intheactual buying andselling ofgrain.
Butitgoesontosaythat"grain procured fortheState Grain Reserves issoldinthedomestic
market...". Please explain thisinconsistency. Aswell, doestheagency buying thisgrain favour
Latvian produced grain overimported grain? Does theagency sellorintend tosellthegrain to
theexport market? Does therelease oftheprocured grain have animpact onthequantity of
imports (seeQuestion 7above -actual imports arelessthanquantity licensed)?
Reply
Incompliance withtheLaw"OnLatvia Grain Market andStateGrain Reserves" theStateCereal
Bureau isaninstitution functioning under supervision oftheMinistry ofAgriculture, operating inthe
grain market andrunning onbehalf ofthestatetheStateGrain Reserve inorder toprovide itsregular
replenishment andappropriate storage.
TheState Cereal Bureau budget in1995 wasLs106,626.31.
Thegrain purchased forthecommodity reserve issoldinthedomestic market solely owing to
thegrain deficit when grain-processing enterprises arenotsecured withrawmaterials. Situation can
beenimproved through imports andStateReserve. Home-produced grain isfavoured when buying-in
grain fortheState Reserve. Noimports fortheState Grain Reserves takeplace unless there isa
possibility toprocure grains from localproducers.
Volumes ofimported grains depend onthegrain deficit which isspecified taking intoaccount
allgrain commodity reserves inthecountry, including grains purchased fromhome-producers forthe
State Reserve. Selling oftheState Reserve cannot inanywayeffect volumes ofimported grains.
Tobacco labelling unitisoneofthestructural unitsoftheLatvian StateRevenue Service. The
main sphere ofwork ofthisunitisregistration ofcompanies trading intobacco goods aswellas
distribution oftobacco excise taxlabels, monitoring thecollection ofexcise taxontobacco goods and
control oftobacco market inLatvia.
StateAlcoholic Monopoly Board withlegalentity status hasbeenestablished under thesupervision
oftheMinistry ofFinance. TheStateAlcoholic Monopoly Board doesnotengage inthepurchase or
saleofspirits oralcoholic beverages.
VI.LAWS AND LEGAL ACTS
63. WillLatvia present lawstotheWorking Party while these areindraft form, toenable WTO
Members tocomment ?IsLatvia inaposition tosubmit suchtexts atthisstage?
Reply
Latvia isready topresent toWTO Members lawswhich areindraftform forcomments. At
thisstageLatvia isready topresent toWTO Members draftlawswhich aretranslated inEnglish (draftWT/ACC/LVA/12
Page24
lawsareavailable inWTO Secretariat). Allanother textswillbepresented toWTO Members assoon
astheywillbetranslated inEnglish.
CONCERNING THE REGULATORY FRAMEWORK OFSERVICES
64.Areinsurers involved inlifeinsurance prohibited from offering non-life insurance?
Reply
Yes.Without established anewentrepreneur company, insurer shallnotsimultaneously conduct
theoperations oflifeinsurance (forming accumulation offunds) andinsurance operations ofanyother
classes. Thisrestriction doesnotrefertoconduction ofreinsurance operations. (TheLawoftheRepublic
ofLatvia "OnInsurance".)
65. Arelicences issued exclusively foronetypeofinsurance activity?
Reply
Yes.Insurers mayhavelicenses fortypes ofinsurance which areprescribed bytheLaw"On
Insurance".
66. Islicensing applied tolegal services provided within thestructure ofenterprises?
Reply
Licensing isapplied toselfemployed persons providing legalservices. Ifaperson ishired by
anenterprise andprovides legalservices onthebasis(according to)theindividual labour contract licence
isnotnecessary. Basically, ifaperson isselfemployed, licence isrequired butifhe/she isemployed
byanenterprise itisnot.
67. Could Latvia provide information about public procurement inservices?
Reply
ThenewdraftLawonpublicprocurementcontainslegalregulationsaboutallkindofprocurement;
goods, works andservices. Themain method ofprocurement ofservice isrequest forproposals.
ThenewLawwillcome intoforce presumably atthebeginning of1997.
68. Could Latvia provide information about safeguard measures related totrade inservices?
Reply
Atthisstage Latvia doesnothaveanylegislation onsafeguard measures which relates totrade
inservices.
69. Could Latvia describe aregulatory system oftransfers andcurrent payments inservices?
Reply
There isnoregulatory system orrestrictions fortransfers andcurrent payments inservices.
70. Howistheaccess offoreign labour regulated inLatvia? Dospecific quotas foremployment
offoreign nationals existinLatvia?WT/ACC/LVA/12
Page25
Reply
Thelabour rights offoreigners andpersons without citizenship areregulated bycorresponding
legislative documents oftheRepublic ofLatvia:
1)Labour Code oftheRepublic ofLatvia;
2)theLaw"OnImmigration andStayofForeigners andPersons without Citizenship intheRepublic
ofLatvia" aswellasregulations made according tothese laws.
According tothelawsoftheRepublic ofLatvia, differences inlabour rights between persons
whoarenotcitizens ofLatvia, maybedetermined onthegrounds oftheresidency status oftheperson.
According toClause 19oftheLabour Code oftheRepublic ofLatvia, labour contracts intheRepublic
ofLatvia maybeconcluded withcitizens ofLatvia orpermanent residents. Those persons areregarded
aspermanent residents whoaredefined intheLaw"OntheStatus ofthose citizens oftheFormer USSR
whohaveneither Latvian noranyother citizenship" aswellasthose foreigners andpersons without
citizenship whohavepermanent residency permits intheRepublic ofLatvia. Forthese persons, there
arenorestrictions intheRepublic ofLatvia asregards entering labour contracts.
Forthose foreigners orpersons without citizenship, whoarenotpermanent residents ofthe
Republic ofLatvia, timeresidency permits withpermission towork arenecessary toconclude labour
contracts. According toClause 7oftheRegulations No.253of19May1993"OntheOrder ofIssuing
Residency Permits", suchpermits maybeissued tothose persons whohavearrived inLatvia with
theaimtoconclude alabour contract, perform scientific research, engage incommercial activities,
tostaywiththespouse whoisacitizen oftheRepublic ofLatvia, ortostaywithaspouse whoisa
foreigner orperson without citizenship withtimeresidency permit orpermanent residency permit in
theRepublic ofLatvia.
Iftheaimoftheperson, when arriving intheRepublic ofLatvia, istoenter alabour contract,
suchperson isrequired tohaveaninvitation towork which mustbeapproved bytheStateEmployment
Service. Forimmigration ofthiscategory ofpersons totheRepublic ofLatvia, there arecertain
restrictions mentioned inthe"Regulations ontheOrder ofApproving Labour Invitation forForeigners
orPersons without Citizenship when applying forTime Residency Permits" (approved bytheCabinet
ofMinisters Resolution No.357,ofJuly71993).
71. Isissuance ofwork permits forforeigners asubject toaneconomic needs test?
Reply
Togetwork permit -foreigner whohassigned contract withLatvian company hastopresent
totheEmployment StateOffice theeducation certificate. Ifthiseducation certificate comforts tothe
future job,person canreceive thework permit.
72. HasLatvia signed anyinternational agreements concerning employment offoreign labour?
Reply
Yes,Latvia hassigned suchagreements withSweden andGermany.
73. How istemporary entry andstayofexecutive andsenior managers asintra-corporate
transferees regulated inLatvia?WT/ACC/LVA/12
Page26
Reply
TheRegulations No.90ofFebruary 191993 "Onorder toissue entrance visaintheRepublic
ofLatvia andoncontrol ofpersons which arecrossing stateborder "define theorder forentrance
intheRepublic ofLatvia.
TheRegulations No.18ofJanuary 101995 "Onamendments intheRegulations No.90,of
February 191993" define ,thatcommon duration ofentrance intheRepublic ofLatvia cannotexceed
90daysforoneyear. IfstayintheRepublic ofLatvia ismore than90daysforoneyeartheresidency
permit isrequired.
74. IsLatvia aparty toanyagreement concerning mutual recognition ofprofessional
qualifications?
Reply
Latviaisnotapartytoanyagreementconcerningmutualrecognitionofprofessionalqualifications.
75. HasLatvia signed anyagreements fortheavoidance ofdouble taxation?
Reply
UntilApril1996thefollowing11Conventionsfortheavoidanceofdoubletaxationandprevention
offiscal evasion haveentered intoforceandareeffective inLatvia: Canada, Czech Republic, Denmark,
Estonia, Finland, Iceland, Lithuania, TheNetherlands, Norway, Poland andSweden.
76. What isaregulatory framework ofacquisition ofrealestate byforeigners andforeign legal
persons inLatvia?
Reply
SeeReply 56.Theregulatory framework ofacquisition ofrealestate isprescribed bytheLaw
"OnthePrivatisationofStateandLocalGovernmentProperty".Toimprovetheinvestmentenvironment,
onJanuary 51996, amendments were introduced intheabove -mentioned Law. Theamendments
allow toprivatise aState orlocalgovernment facility together withthepiece oflandonwhich itis
located. Thecompanies thathadprivatised some property inLatvia before these amendments come
intoeffect, nowacquire therighttofirstpurchase ofthelandonwhich theirprivate immovable property
lies.Allforeign legalentities fromthecountries withwhich Latvia hasagreements ontheprotection
ofinvestments areentitled tobuyland. Allactsrelated totheprivatisation ofapiece oflandare
performed bythePrivatisation Agency onbehalf ofthestate.
Already privatised realestate (esp.buildings/houses) canbeacquired byforeign legalorprivate
persons forbusiness activities without limitations.
AGRICULTURE SCHEDULE OFCOMMITMENTS
Inrelation todocument WT/SPEC/20/20.
77. Latvia should revise theinformation contained inthis:document inorder toprovide Working
Party Members withfulldraft schedules ofdomestic support andexport subsidies commitmentsWT/ACC/LVA/12
Page27
inagriculture including allrelevant supporting information asnecessary. Therecent WTO
Secretariat document WT/ACC/4) outlining information requirements fordomestic support and
export subsidies should beusedasaguide forfurther submission
Ondomesticsupportanumberofgreenboxmeasuresarenotified:Canadaasksforadditional
program description forthese measures aswellasjustification fortheir inclusion inthegreen
boxbyreference tothecriteria ofAnnex 2.
Export subsidies arenotified forfiveproducts atthefourorsixdigitlevel, using 1994-95
data. Additional information onthepolicies accounting forthissupport (toconfirm thatthese
areexport subsidies under Article 9:1oftheAgreement), aswellasinformation onthetotalvolume
andvalue ofexports forthese products should beprovided.
Reply
Domestic support andexport subsidies according totheamount andmeasure typearereflected
intheTables DS:1, DS:4, DS:6, DS:7, DS:9, ES:1. These tables areprepared according totheWTO
Secretariat document WT/ACC/4. Additional inthetableisreflect Latvia ’scommitments regarding
reduction ofexport subsidies amounts andsubsidised production amounts inthefuture years according
totheAgreement onAgricultural Article 9paragraph 2(b).
Baseperiod fordomestic support (Table DS:1) ischosen, according totheabove mentioned WTO
Secretariat document (6paragraph). InthecaseofLatvia themostrecent 3yearperiod (1994, 1995,
1996) istaken asabaseperiod. Thetablecontains thedomestic support measures which areincluded
inthe"green box"measures according totheAgreement onAgriculture Annex 2.Thetablecontains
thefollowing information:
-description ofmeasures according tothecriteria which arementioned intheAgreement on
Agriculture Annex 2;
-grant domestic support inthousand SDR;
-source ofinformation.
ThetableDS:6 contains product specific AMS. Thesupport isprovided :
-forproducers intheform ofdirect payments foreachtonne offlaxwithpreviously defined
quality;
-intheform ofdirect payments tothegrain producers inthelessfavourable areas;
-intheform ofsubsidy ofshort termcredit interest rate;
-intheform ofpayments forhighquality seeds materials sold.
Table contains following information:
-eligible amount ofproduction;
-eligible areas;
-payments from budget (thousand SDR);
-source ofinformation.
AMS based onproduct isshown inthetable DS:7, which isnotdifferent from theprevious,
duetothefactthatLatvia isnotusing price support mechanism, which actsasstatesupport for
agricultural producers andshould beincluded intableDS:5. Starting fromyear1996thenon-product
specific statesupport wasintroduced inaformofpartial subsidy, forshort -termcredit interest rate.WT/ACC/LVA/12
Page28
Support isprovided forpurchase ofagricultural inputs (fertilisers, agro-chemicals, gasoline). The
tableDS:9 contains non-product specific AMS calculation.
According totheWTO Secretariat document WT/ACC/4 thistablecontains:
-budget assignments inthousand SDR;
-source ofinformation.
ThetableDS:4 hasbeencomposed inaccordance totheWTO Secretariat document WT/ACC/4
(paragraph 21),itcontains thesummary ofallmeasures ofdomestic support. According tothe
WT/ACC/4 (paragraph 17),andArticle 6.4ofAgreement onAgriculture, support isconsidered at
deminimis levelwhen thesupport doesnotexceed 5%ofthetotalvalue ofproduction.
Tables DS:4, DS:6, DS:7andDS:9contains AMS calculation. Inthesetables eachkindofsupport
isnotclassified whether ornotconforms tothelevelofdeminimis. Weunderstand thatthepurpose
oftechnical notementioned inWT/ACC/4 (paragraph 1)istoallow anacceding country topresent
factual information ontheirdomestic support andexport subsidies actually inplace inagriculture. As
itissaidinparagraph 2ofthisdocument, thistables willassist totheWTO Members toclarify in
substance ofwhatkindofsupport applied inacceding country conforms tocriteria listed inAgreement
onAgricultural.
ThetableES:1contains export subsidies andsubsidised amounts foryears 19941995and1996.
These subsidies hastobeincluded intheLatvia ’sSchedule according totheAgreement onAgriculture
Article 3,paragraph 3.Therefore, asamendments totheTable ES:1, there exists theadditional table
(according totheWTO Secretariat document WT/SPEC/20, Table 7),which contains increase ofamount
ofsubsidies andamount ofproduction during thetimeperiod foryears 1996 -2001 according tothe
Agreement onAgriculture Article 9paragraph 2(b).ThetableES:1contains thefollowing information:
-payments from budget foreachproduct;
-HScodes andamounts;
-source ofinformation.