RESTRICTED
WORLD TRADE WT/ACC/SPEC/LVA/1
5December 1996
ORGANIZATION(96-5095)
Original: English
ACCESSION OFLATVIA
Elements ofaDraft Report
oftheWorking Party ontheAccession ofLatvia
Introduction
1. TheGovernment ofLatvia 'srequest foraccession totheGeneral Agreement onTariffs and
Trade (GATT 1947) wascirculated tocontracting parties inNovember 1993. Atitsmeeting on
17December 1993, theGATT 1947Council ofRepresentatives established aWorking Partytoexamine
theapplication oftheGovernment ofLatvia toaccede totheGeneral Agreement under Article XXXIII,
andtosubmit totheCouncil recommendations which mayinclude adraft Protocol ofAccession.
Membership oftheWorking Party wasopentoallcontracting parties indicating thewishtoserve on
it.Inpursuance oftheMinisterial Decision of14April 1994 onAcceptance ofandAccession tothe
Agreement Establishing theWorld Trade Organization (WTO) andtothedecision of31May1994
ofthePreparatory Committee fortheWTO, theWorking Party examined theapplication ofLatvia
formembership intheWTO andagreed topursue themarket access negotiations forgoods, including
anagricultural country schedule, andforservices. Inpursuance ofthedecision adopted bytheWTO
GeneralCouncilon31January1995,theexistingGATT1947AccessionWorkingPartywastransformed
intoaWTO Accession Working Party. Theterms ofreference andthemembership oftheWorking
Party arereproduced indocument WT/ACC/LVA/6/Rev.1.
2. The Working Party meton28-29 March and13November 1995; 22March and
16September 1996; and........... under theChairmanship ofMr.F.Theilgaard (Denmark).
Documentation
3. TheWorking Party hadbefore it,toserve asabasis foritsdiscussions, aMemorandum on
theForeign Trade Régime ofLatvia (L/7526 withAddenda 1,2and3)andthequestions submitted
byMembers ontheforeign trade régime ofLatvia, together withthereplies thereto (WT/L/49 and
Corrigendum 1andAddendum 1;WT/ACC/LVA/3, WT/ACC/LVA/4, WT/ACC/LVA/8 and
Corrigendum 1;WT/ACC/LVA/12) andother information provided bytheLatvian authoritiesWT/ACC/SPEC/LVA/1
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(WT/ACC/LVA/5, WT/Spec(95)6; WT/SPEC/26). TheGovernment ofLatvia made available to
theWorking Party thefollowing documentation:
- TheLawonCustoms Duty withAnnexes I(Import dutytariffs) andII(Export dutytariffs);
- Latvia 'sNational Tariff Schedule;
- LawontheBank ofLatvia;
- LawonCredit Institutions;
- Lawoncompetition andrestriction ofmonopoly;
- Lawontrademarks;
- Lawonindustrial design protection;
- Patent law;
- Resolution andlawonbookkeeping;
- Decree andlawonjointstock companies;
- Resolution andlawonincome tax;
- Resolution andlawonlimited liability companies;
- Resolution andlawonforeign investment intheRepublic ofLatvia;
- Resolution andlawonexcise tax;
- Resolution andlawonturnover tax;
- Resolution andlawoftheRepublic ofLatvia onentrepreneurial activity;
- Regulation onfood;
- Regulations oftheCabinet ofMinisters No.208of1November 1994 ontheOrder of
Establishment andAdministration ofImport andExport Tariff Quotas;
- Regulations oftheCabinet ofMinisters No.24of17January 1995 OnOrder bywhich the
Special Authorizations (Licences) shallbeIssued inAccordance withtheQuotas ofCustoms
Tariffs;
- Regulations oftheCabinet ofMinisters No.20of17January 1995Regulations toProtect the
Domestic Market forFood Stuff Produced inLatvia;
- RegulationsoftheCabinetofMinistersNo.27of31January1995OnDeterminingtheCustoms
Value ofImport andExport Goods orOther Items;
- RegulationsoftheCabinetofMinistersNo.87of12April1994OntheMandatoryCertification
ofFoodstuff, Perfumery andToys;
- Programme ofReforms fortheNational Economy ofLatvia "Latvia 2000";
- Regulations oftheCabinet ofMinisters No.37of25January 1994 OnState Monopoly of
Alcohol andAlcoholic Beverages;
- Regulation bytheBank ofLatvia OnGranting Licences (Permissions) toPerform Activities
ofCredit Institutions;
- Regulation bytheBank ofLatvia OnRegulation onAmending theCharter, Changing
Shareholders, theInitial Capital, theManagement, theChief Accountant, theLegal Address,
theName ofaCredit Institution, andUndertaking Merger orSplit-up ofCredit Institutions;
- Regulations oftheCabinet ofMinisters No.185 of23August 1994 OnFormation ofPrices
andTariffs ofGoods andServices;
- LawonForeign Investment intheRepublic ofLatvia;
- TheOfficial ListofQuarantinable Pests;
- Founding LawoftheLatvian Food Centre;
- Statutes ofInformation, Consultation andTraining Centre ofGoods andServices;
- Draft Customs Code;
- Draft LawonSafety onProducts, Services andLiability ofProducer, Supplier;
- Draft LawonUniformity ofMeasurements;
- Draft LawonConformity Assessment;
- Latvia 'sImport Totals under eachHarmonized System 8-digit category (f.o.b. values); and
- Latvia 'sImport Datafor1994.WT/ACC/SPEC/LVA/1
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Introductory Statements
4. Therepresentative ofLatvia stated thatLatvia hadachieved considerable results intransforming
acentrally-planned economy toamarket-based economy since restoration ofindependence in1991.
Latvia haddrafted several newtrade lawsandregulations modelled onWTO principles toestablish
auniform andpredictable trading environment forimporters, exporters andinvestors. Although the
Russian Federation remained Latvia 'sprincipal trading partner, tradewithothercountries wasgrowing
rapidly andhehoped thatthistrend would continue. External trade relations were emphasized by
Latvia 'sgeographical position between EastandWest; several bilateral trade agreements based on
themost-favoured-nation principle hadbeenconcluded andmore were inprogress. Latvia hadalso
concluded freetrade agreements withmany countries inEurope. However, bilateral andregional
arrangements alone could notprovide thenecessary stability forexternal trade relations. Latvia had
therefore made astrong commitment tobecome member oftheWTO. TheWTO principles ofnational
andm.f.n.treatmenthadbeenincorporatedinnationallegislationwithparticularattentiontotransparency
inthepublication ofalllawsandregulations andatariff-based trade régime. Minimal tariffs were
imposed onimported rawmaterials, spare parts andcapital goods, thebasic average m.f.n. import
tariffwas15percent,andexport tariffs wereimposed onlyonsome rawmaterials. Non-discrimination
between imported anddomestically produced items applied intheimposition ofexcise taxes andthe
turnover tax,thelatter hadbeenreplaced byavalue-added tax.Anyperson orenterprise registered
inLatvia could perform anylegalimport operation. Imports ofalcohol, spirits, tobacco, pyrotechnic
materials, metals andgrain required alicence, butnoquantitative limitations wereassociated withthe
licences. Exports ofspirits, ferrous andnon-ferrous metals were alsosubject tolicensing butwith
nounderlying quotas. Finally, hepointed outthatLatvia 'seffort tobecome member oftheWTO was
supported byallthemajor political institutions andthatabroad national consensus existed regarding
theimportance ofWTO membership andthepursuit ofliberal trade policies.
5. Many members oftheWorking Party welcomed Latvia 'srequest foraccession totheWTO
andexpressed theirreadiness towork withLatvia inelaborating terms ofaccession thatwould support
theprogramme oftransition toamarket-based economy andLatvia 'sintegration intothemultilateral
trading system. Some members welcomed thedocumentation provided andthestatement made by
therepresentativeofLatvia.TheyalsosaidthattheylookedforwardtoadetailedexaminationofLatvia's
policies andofthereasons fortheadoption ofcertain measures, e.g.licensing requirements. Some
members oftheWorking Party noted thatLatvia hadraised tariffs andintroduced newtraderestrictions
aftertherequest foraccession hadbeensubmitted andthatfurther restrictions appeared tobeunderWT/ACC/SPEC/LVA/1
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consideration. Thiswasadisturbing trend. Latvia wasaccordingly requested tonotify theWorking
Party ofproposed newrestrictions andtosupply allnewrelevant lawsandregulations toitsmembers.
6. TheWorking Party thenproceeded toreview theeconomic policies andforeign trade régime
ofLatvia andthepossible terms ofadraftProtocol ofAccession totheWTO. Theviews expressed
bymembers oftheWorking Party aresummarized below inparagraphs ...to.....
ECONOMIC POLICIES
Foreign Exchange andPayments
7. Therepresentative ofLatvia saidthathiscountry hadestablished oneofthemostliberal foreign
exchange régimes intheworld. Latvia hadbeenamember oftheIMFsince 1992. Thenational
currency -thelat-wasfreely convertible, backed bythecurrency reserves oftheBank ofLatvia.
Foreign exchange andlocalcurrency could bebrought intoortaken outofLatvia inunlimited amounts.
Foreign entrepreneurs werefreetorepatriate profits inanycurrency having paidtheapplicable taxes.
Corporate income taxamounted to25percent, incomes ofphysical persons were taxed at
25or35percent,anda10percentwithholding taxwaslevied ondividend payments tonon-residents.
Some members welcomed thefactthatthelatwasfreely convertible andstressed theimportance of
continuing current policies.
Investment Régime
8. Some members oftheWorking Party asked Latvia todescribe thebasicprovisions oflegislation
regulating investment andinparticular identify anyrestrictions orregistration measures affecting foreign
investment.
9. Therepresentative ofLatvia referred tothelaw"OnEntrepreneurial Activity" which provided
forlicensing ofseveral types ofbusiness activities (see"Quantitative Import Restrictions, including
Prohibitions, Quotas andLicensing Systems", paragraph 32andTable 3).Suchlicences wereissued
forenterprises registered inLatvia onanon-discriminatory basis, irrespective ofnationality, toany
applicant meeting thespecific requirements. Allissues pertinent toforeign investment -registration,
investment protection, taxation, repatriation, dispute settlement, restrictions oninvestment, safeguards
andtheapplicability ofinternational treaties -wereregulated through theLaw"Onforeign investment
intheRepublic ofLatvia".WT/ACC/SPEC/LVA/1
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10. Therepresentative ofLatvia added thattheForeign Investment Law(paragraph 3)stipulated
thatforeign investors could notgaincontrol, through acquisition ofvoting shares orotherwise, of
enterprises involved inthedefence industry; manufacturing andsaleofnarcotics; manufacturing and
saleofweapons andexplosives; emission ofstocks, banknotes, coins andstamps (duetotheState
monopoly); mass media; national education; recovery ofrenewable andnon-renewable natural
resources; fishing ininternal waters subject tothejurisdiction oftheRepublic ofLatvia; hunting;
andportmanagement. Permission bytheCouncil ofMinisters wasrequired forforeign investment
inState enterprises, investments leading toforeign control ofenterprises ofavalue exceeding
US$1 million, ortheestablishment byforeigners ofnewenterprises with acapital exceeding
US$1 million. Foreign investment intheformofcapital goods wasexempt fromcustoms duties. The
Foreign Investment Lawalsocontained provisions (paragraphs 9and10)regarding taxholidays for
corporate income, butnoexemptions weregranted fromthe10percentwithholding taxondividends
tonon-residents. Current legislation allowed thepurchase oflandinurban areas byforeign investors
from countries having agreements ontheencouragement andreciprocal protection ofinvestment,
approved bytheSaeima (Parliament). Latvia hadconcluded numerous suchagreements. Anyforeign
legalperson registered inLatvia alsohadtherighttolease landforaperiod of99years.
State Ownership andPrivatization
11. Some members oftheWorking Party requested details concerning thepaceofprivatization
inLatvia, noting aninitial statement thatprivatization ofagriculture hadbeencompleted by1995and
that75percentofState-owned enterprises would beprivatized by1996. Latvia wasalsoasked to
enumerate sectors orenterprises where State ownership would beretained foralongperiod or
permanently. Questions were alsoraised concerning theparticipation offoreign investors. Some
members requested areport fromLatvia onprogress achieved todateinitsprivatization programme.
Inaddition, Latvia should beprepared toprovide information onaperiodic basis onitsprivatization
efforts,economicreforms,andimplementationofanytransitionalarrangementsnegotiatedintheprotocol
ofaccession.
12. Therepresentative ofLatvia saidthatnoparticular sector would beexcluded fromprivatization.
Themain considerations weretoimprove company performance andtoavoid thecreation ofprivate
monopolies. A"List ofCurrently Non-Privatizable State Specialized Agricultural Enterprises" was
linked torestitution ofproperty toformer owners. Enterprises operating inindustry, agriculture, trade
andconstruction services would beprivatized first,while sectors suchasmedical care,social welfare
services, medicine wholesale andcertain agricultural sub-sectors would beprivatized overalongerWT/ACC/SPEC/LVA/1
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timeperiod. TheGovernment hadalsodecided thatasell-off ofinfrastructure (roads, railway, public
transport, postal services, etc.)would notbereasonable during thefirstyears ofprivatization. Latvia
provided adocument (WT/L/49/Add.1) onprivatization ofagriculture. InApril 1996, from atotal
of613agricultural statutory associations, 206hadbeenfullyprivatized andexcluded fromtheEnterprise
Register, 265hadchosen voluntary selfliquidation and142werestilloperating. Allagricultural service
enterprises would beprivatized before theendof1996. Privatization offarms usedfortraining and
research would beconsidered onanindividual basis. Foreign firms could participate inprivatization;
Latvia hadheldtwointernational tenders. Foreign natural andlegalpersons could buyprivatization
certificates onlyafterhaving wonthetender foracompany undergoing privatization. Thisrestriction
didnotapply tojointventures orbranches offoreign companies registered inLatvia.
Pricing Policies
13. Noting thatLatvia hadrelaxed price controls onmany goods andservices some members of
theWorking Party requested Latvia toprovide details onremaining restrictions, including minimum
andmaximum prices, particularly forsectors notconsidered natural monopolies. Latvia wasasked
tolisttheimported products subject topricecontrols byHarmonized System (HS)tariffline.Amember
noted thatLatvia exercised price controls inanumber ofsectors, including some which were not
traditionally considered natural monopolies, butintended toreduce itsprice controls totheextent
possible. Thismember stated thatpricecontrols should belisted inanAnnex. Moreover, Latvia should
exercise itsauthority inthisareainamanner thatdidnotdamage imports orotherwise acttoinhibit
trade. Thismember alsosought acommitment fromLatvia thatcurrent andfuture price controls be
applied inaWTO-consistent fashion andwould bepublished intheofficial journal andthatLatvia
would takeaccount oftheinterests ofexporting WTO members asprovided forinArticle III.9ofthe
GATT 1994.
14. Therepresentative ofLatvia replied thatpricecontrol andregulation wascarried outaccording
toRegulation No.185"Formation ofprices andtariffs ofgoods andservices" andaffected products
related toenergy; agriculture (recommended prices forpurchases fortheState grain reserve); the
forestry sector (theprice ofstumpage); publishing ofschool books financed from theState budget;
pharmaceuticals; postal services; portservices; airport services; archives; andhousing rents, power-
supply andresidential services. Minimum andmaximum prices were stipulated forthefollowing
domestic andimported services: transit services foroilandoilproducts bypipeline; reloading of
oilandoilproducts inports; transit shipment ofoilandoilproducts byrailway transport; long-distance
transportation ofpassengers andluggage bymotor transport; transportation ofpassengers andluggageWT/ACC/SPEC/LVA/1
Page7
bymotor transport ininternational lines; international transportation ofcargo andpassengers byrailway
transport according tointernational agreements; transportation ofcargo andpassengers bydomestic
railway; shipservices inports; andrents(maximum level). TheState didnotcontrol theprices of
imported goods. However, theprofit margin wasregulated withrespect topharmaceutical products;
thefinalprice could notexceed theimport orproduction price bymore than20percent.
15. Therepresentative ofLatvia added thatRegulation No.185hadbeenpublished intheofficial
journal "Latvijas Vèstnesis". Latvia would reduce pricecontrols totheextent possible. Inaccordance
withArticle III.9oftheGATT 1994, Latvia would takeaccount oftheinterests ofexporting WTO
Members.
Competition Policy
16. Some members oftheWorking Party noted thatLatvia intended toharmonize itslegislation
oncompetition withthatoftheEUoverafour-year period. Latvia wasasked toprovide information
onthepresent status ofdraftlegislation, outline existing provisions regarding mergers andtoprovide
alistofsectors considered "natural monopolies".
17. TherepresentativeofLatviarepliedthattheLaw"OnCompetitionandRestrictionofMonopoly"
of1991would berevised. Anenterprise gaining control ofmore than25percentoftheLatvian market
forgroups ofgoods orservices asaresult ofamerger ortheformation ofapartnership would need
tonotify theInstitution fortheControl ofMonopoly Action andDevelopment ofCompetition. No
system hadbeenestablished tomonitor take-overs andmergers, buttheAnti-Monopoly Committee
cooperated closely withtheCompany Register oftheRepublic ofLatvia andcould intercept registrations
resulting frommergers ortake-overs. Natural monopolies existed inenergy, communication services,
transport,watersupplyandsewerage.MonopolyenterprisesincludedtheStatestockcompanies"Latvijas
gâze" (Latvian Gas), "Latvenergo" and"Latvijas dzelzceî ø"(Latvian Railways); "Lattelekom" -a
limited liability company; suppliers ofheating; andself-government enterprises inwater-supply and
sewerage. However, competition (including foreign participation )waspresent inthesupply ofnatural
gasandinenergy andtelecommunication sub-sectors.WT/ACC/SPEC/LVA/1
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FRAMEWORK FOR MAKING AND ENFORCING POLICIES
18. Amember asked thatLatvia indicate which bodies wereresponsible fortheadministration of
trade policies andindicate thatsub-central governments didnotmake policies affecting international
trade.
POLICIES AFFECTING TRADE INGOODS
Trading Rights
19. Amember asked Latvia toconfirm theabolition oftheState trading monopoly andthatno
restrictions existed ontherightofforeign anddomestic individuals andenterprises toimport andexport
goods andservices within Latvia 'scustoms territory, except asprovided forinWTO Agreements.
Latvia should alsoconfirm thatindividuals andfirms werenotrestricted intheirability toimport or
export based ontheirregistered scope ofbusiness, andthatthecriteria fortheregistration ofcompanies
inLatvia were generally applicable andpublished intheofficial journal.
Market Access Negotiations
20. Therepresentative ofLatvia announced hisGovernment 'sreadiness toenter intobilateral
negotiations onmarket access forgoods andservices inMarch 1995(document WT/L/57) andpresented
aninitial offerongoods (WT/L/57/Add.1) together withsupporting dataonimports (WT/L/57/Add.2).
1. Import Regulation
Customs Tariff
21. Amember oftheWorking Party noted thatthecollection ofcustoms duties appeared tohave
beeninefficient inLatvia andwondered whatplans Latvia might haveforimproving itscustoms system
aspartoftheaccession totheWTO. Therepresentative ofLatvia replied thatorganizational
improvements hadbeendiscussed withtheWorld Customs Organization andincluded therevision of
legislation, thereview ofthestructure andfunctions ofthecustoms administration, further training
ofcustoms staffandadditional technical equipment.WT/ACC/SPEC/LVA/1
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Customs Duties
22. Some members oftheWorking Party requested Latvia todescribe thelegal basis forthe
imposition ofcustoms duties, submit acopyofitsCustoms Tariff, identify products attracting duties
ofmore than20percent, listproducts subject tospecific duties (andtheestimated advalorem
equivalent), outline plans toconvert specific duties intoadvalorem rates, andprovide estimates of
trade-weighted average duties onagricultural andindustrial products.
23. Therepresentative ofLatvia saidthattheLaw"OnCustoms Duties (Tariffs)" hadbeeninforce
since 1December 1994. Duties were generally setat15to20percent. Minimal duties (0.5or
1percent)werelevied ongoods withnodomestic production andhigher duties applied forsensitive
agricultural commodities. Latvia listed products withm.f.n. duties exceeding 20percent(WT/L/49,
pp.27-28) andproducts subject tospecific duties andtheadvalorem equivalents (WT/ACC/LVA/12).
Latvia hadnospecific timetable fortheconversion ofspecific duties toadvalorem rates. Thesimple
average duties amounted to5.69percent; 13percentforagricultural products and3.74percentfor
industrial goods.
Other Duties andCharges
24. Amember oftheWorking Party asked Latvia toclarify thesituation concerning anyother
duties andcharges related toimportation.
Tariff Rate Quotas, Tariff Exemptions
25. Some members oftheWorking Party noted thatLatvian legislation authorized theopening
oftariff quotas tofacilitate importation ofgoods intemporary short supply ortheimplementation of
preferential tradeagreements andrequested further details. Amember urged Latvia tobring thissystem
intoconformity withWTO provisions, andtoconsider using tariff protection onlyandallow market
forces todetermine trade.
26. Therepresentative ofLatvia saidthatthelegalbasis fortheopening oftariff quotas onany
item wasthelaw"OnCustoms Duties (Tariffs)" andregulations No.208"Establishment and
Administration ofImport andExport Tariff Quotas" andNo.24"Authorizations forLicences".
Exceptionally, theCabinet ofMinisters hadapproved atariff quota forimports ofhigh-quality seeds
inApril 1995 and1996 duetoashortage ofdomestic supply. TheState Cereals Bureau could openWT/ACC/SPEC/LVA/1
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tariff quotas withanin-quota tariff of0.5percentwhen itsannual forecasts indicated ashortfall in
Latvian production ofcertain types ofgrain. Such tariff quotas would besubject topublic tender.
Tariff quotas inthecontext ofpreferential trade were onlyapplied under theLatvia-EU FreeTrade
Agreement. Annex XIoftheAgreement enumerated theproducts concerned andtherespective quotas,
while thetariff rateswerelisted inAnnex X.Forprocessed agricultural products therelevant parts
oftheAgreement were Annexes 3and4ofProtocol 2.
FeesandCharges forServices Rendered
27. Amember oftheWorking Party asked Latvia toclarify whatfeesandcharges, ifany,were
applied forservices rendered related toimportation.
Application ofInternal Taxes
Excise taxes
28. Some members oftheWorking Party asked fordetails ontheexcise taxsystem inLatvia and
itsapplication onimports anddomestic goods. Latvia wasrequested toindicate, byHStariff line,
thelevels andpoints ofsaleatwhich taxes were applied toimports anddescribe thecomponents of
thetaxable base.
29. Inreply, therepresentative ofLatvia saidthatexcise taxes werelevied onalcohol, tobacco,
motorvehicles,petroleumproductsandjewellery.Taxrateswereidenticalforimportedanddomestically
produced items. ThetaxbaseforLatvian products wasthesalesprice indomestic currency, taxes
onimports were levied onatariff-inclusive basis. Theratesofexcise taxwere thefollowing:
Methyl alcohol Ls3.00perlitre
Champagne andallother types ofwine Ls0.25 "
Other alcoholic beverages, perlitrepurealcohol Ls3.00 "
Alcohol, including wood alcohol, forindustrial use Ls0.14perlitre
Cigarettes, withorwithout filter Ls0.0035 perpiece
Cigars andcigarillos Ls0.01 "
Other tobacco products forretail sale
Petrol Ls0.04perlitre
Diesel fuel Ls0.02 "
Motor cars 10percentWT/ACC/SPEC/LVA/1
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Goods made from goldandother precious metals, jewellery
including diamonds, precious orsemi-precious stones 30percent
Only tobacco products carrying taxlabels could besoldinLatvia. Enterprises licensed toimport or
manufacture tobacco products forsaleordered labels fromtheStateRevenue Service. Therequested
quantity oflabels would besupplied within 14daysagainst payment ofexcise taxandVAT. Exports,
re-exports andgoods intransit wereexempt fromexcise taxinaccordance withArticle 4oftheLaw
"OnExcise Tax". Exemptions fromexcise taxes hadalsobeenestablished foranumber ofproducts,
enumerated inTable 1.
Table 1:Exemptions from Excise Tax
Excise taxshall notbelevied onthefollowing:
Precious metals, precious stones andproducts from saidmetals andstones imported andpurchased for
theneeds ofthePrecious Metal Fund oftheRepublic ofLatvia;
Goods used forproduction (technological needs) ofgoods listed inArticle 3;
Rectified alcohol:
(i) forthepurposes ofmedicine andveterinary medicine;
(ii) fortheneeds ofresearch anddevelopment;
(iii) forpharmaceutical industry.
Tobacco dustandtobacco products used forproduction ofinsecticides;
Precious metals formaking dentures;
Goods forexport;
Cars withspark-ignition internal combustion reciprocating engine, working volume ofengine cylinders of
which does notexceed 1,600 cm3;
Cars withcompression ignition internal combustion reciprocating engine (diesels orsemi-diesels),
working volume ofengine cylinders ofwhich does notexceed 1900 cm3;
Cars older than7years from thedateofindustrial production;
Cars withelectrical engine (electrocars).
TheCabinet maydetermine themaximum amount ofgoods thatareexcise tax-exempt when imported for
consumption intothecustoms territory oftheRepublic ofLatvia.
Excise taxshall notbelevied ontransit cargo shipping andreexport.
Excise taxshall notbelevied onnatural persons importing alcoholic drinks uptoonelitreoroneunitin
original packaging thatdoes notexceed 3litres intotal amount, aswellascigarettes -upto200
cigarettes perperson.
Excise taxshall notbelevied onnatural andlegal persons selling carsifexcise taxfortherespective car
hasalready been paidonce.
Ifanenterprise (entrepreneurial company) exports self-produced orunused goods forwhich excise tax
hasbeen paid, theexcise taxtransferred intothebudget shall bereimbursed from theState budget.
Theexcise taxpaidforcarsexported from theRepublic ofLatvia within three months after their import
shall bereimbursed from theState budget.WT/ACC/SPEC/LVA/1
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Value Added Tax
30. Noting thataValue Added Tax(VAT) would replace theturnover taxinLatvia, some members
oftheWorking Party requested information ontheapplication oftheVAT, including product- oruser-
specific exemptions. Therepresentative ofLatvia replied thatVAT hadreplaced theturnover taxon
1May1995. VAT waslevied attherateof18percent. VAT waslevied onatariff-inclusive basis
andexcise taxes were added tothetaxbaseofimported anddomestic products. Exemptions from
VAT were determined inaccordance withArticles 6and7oftheLaw"OntheValue Added Tax".
Inall,25types ofgoods andservices wereexempt fromVAT while nineservices related toexporting
andinternational transport were zero-rated (Table 2).Inresponse tospecific questions onVAT
exemption formass-media andcertain publications produced inLatvia, heassured theWorking Party
thattheexemption wasalsoapplicable toimported films. TheMinistry ofFinance wasdrafting
amendments totheLaw"OntheValue Added Tax"thatwould provide equal regulations fordomestic
andimported mass media.
Table 2:Goods andServices Exempt from VAT orZero-rated
Exemptions (Article 6)
1. Thetaxshall notbelevied onthefollowing:
(i) services ofnursing homes;
(ii) services ofday-care centres andkindergartens;
(iii) catering inpenitentiaries;
(iv) services ofeducational establishments directly connected withtheprocess ofeducation, including
tuition atState andlocal government artandmusic schools;
(v) services oftraining farms incatering forstudents atagricultural educational establishments;
(vi) services ofpublic libraries;
(vii) tuition atprivate educational establishments accredited bytheState;
(viii) visits totheatres, movies (except video), circus shows, concert activities, events incultural
establishments, visits tomuseums, exhibitions, zoological andbotanical gardens, events for
children andcharity events, events ofamateur artandsports;
(ix) medical services, supplies ofmedicine andmedical goods inaccordance withthelistadopted by
theMinistry ofWelfare andapproved bytheMinistry ofFinance.
(x) supplies ofgold, coins andbank notes totheBank ofLatvia;
(xi) betting, lotteries andother types ofgambling;
(xii) burial services, andreligious, ritual andother services provided byreligious organisations
registered intheRepublic ofLatvia provided theyhave nopurpose ofsystematic gaining of
profit;
(xiii) insurance services supplied byinsurance companies inaccordance withtheLawOnInsurance;
(xiv) payments ofindividuals onapartment rentcontracts signed, except payments forrentofhotels,
motels andsimilar establishments;
(xv) specialised baby-food inaccordance withthelistadopted bytheMinistry ofWelfare and
approved bytheMinistry ofFinance;WT/ACC/SPEC/LVA/1
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Table 2:Goods andServices Exempt from VAT orZero-rated
(xvi) scientific research financed bypublic foundations, orbyfunding from theState andlocal
government budget, orinternational institutions;
(xvii) thefollowing goods andfinancial services:
(a) extension ofloans andtheir monitoring, aswellasservices connected withloanguarantees or
other financial guarantees andtheir monitoring, except debtcollection;
(b) services ofloaninstitutions connected withdeposit andcurrent account operations, payments,
transfers, debts, checks andother negotiable instruments;
(c) negotiable instruments andservices connected withpurchase orsaleofnegotiable instruments in
circulation, except items (money, coins) supplied forcollection, orthatcontain precious metal;
(d) securities andcapital investments, aswellasservices supplied atpurchase andsaleofsecurities
andcapital investments;
(xviii) humanitarian aidandgiftsinaccordance withtheCabinet regulations, butifsaidgoods aresold,
thetaxshall bepaidinaccordance withlaw;
(xix) consular services;
(xx) school books andscientific literature, firstpublications ofworks oforiginal literature inLatvian
andpublications forchildren published andprinted inLatvia inaccordance withlistsadopted by
theMinistry ofEducation andScience;
(xxi) mass media registered intheRepublic ofLatvia;
(xxii) services provided bycompanies forjoint processing andsaleofagricultural andfishery
products, aswellascompanies forjoint usage andmaintenance ofagricultural equipment,
machinery andother tools (hereinafter -agricultural cooperatives) tofarmers holdings thatare
nottaxable persons;
(xxiii) saleofrealestate, except saleortransfer ofanunused real estate toitsowner after completion
ofconstruction;
(xxiv) supplies ofimported goods notsubject tocustoms duties inaccordance withChapters 6and7of
theLawOnCustoms Duty (Tariffs) under aprocedure setbytheCabinet, except supplies of
goods towhich the0%rateofcustoms dutyisapplied;
(xxv) fire-fighting services provided bytheFirefighting andRescue Service department oftheMinistry
ofInterior, firefighting services ofinstitutions, enterprises (entrepreneurial companies) and
organizations, voluntary firefighters 'unions andformations offirefighting volunteers.
2. Aperson supplying saidservices (goods) maysubject them tothetaxbyregistering attheState
Revenue Service.
3. Fixed assets imported intheRepublic ofLatvia byataxable person, shall notbesubject tothe
taxontheborder. Incaseimported fixed assets donotcreate distortions ofcompetition inthecountry,
forexample, duetoproduction ofanalogous fixed assets inLatvia, thetaxshall bewritten off.Otherwise
thecancelled taxshall becollected from aperson whohasimported thefixed assets. Theprocedure for
taxwrite-off andcollection shall bedetermined bytheCabinet regulations. Ifataxable person supplies
goods andservices notsubject tothetaxinaccordance withPart1ofthisArticle, thetaxmaybewritten
offonlyfortheportion ofthetaxthatcorresponds totheratio established byPart5ofArticle 10.
Application ofZero Rate toExports andInternational Transport (Article 7)
1. 0%taxrateshall beapplied to:
(i) supplies ofgoods outside theRepublic ofLatvia;
(ii) services related tosupplies ofgoods referred toinParagraph 1ofthisPart;
(iii) supplies ofservices outside thedomestic territory;
(iv) supplies ofgoods andservices related tosupply andmaintenance ofvessels that:
(a) operate oninternational shipping lines;
(b) perform emergency andrescue missions, orprovide assistance onsea;WT/ACC/SPEC/LVA/1
Page14
Table 2:Goods andServices Exempt from VAT orZero-rated
(v) delivery, reconstruction, repairs, maintenance, chartering andlease ofvessels referred toin
Paragraph 4ofthisPart, andsupplies andservices inthisregard;
(vi) delivery, reconstruction, repairs, maintenance, chartering andlease ofaircraft operating on
international routes, andsupplies andservices inthisregard;
(vii) agent services andservices forcargo handling oftransportation vehicles listed inParagraphs 1-6
ofthisPart;
(viii) onthebasis ofparity, goods andservices supplied todiplomatic andconsular establishments in
theRepublic ofLatvia, their diplomatic andconsular agents andtheir underage family members
residing withthem, inaccordance withtheprocedure setbytheCabinet.
2. Ifanagent representing anatural orlegal person ofLatvia provides supplies ofgoods outside
theborders oftheRepublic ofLatvia, 0%rateshall apply fortheagent onsupplies ofgoods in
accordance withtheprocedure setbytheCabinet.
3. Toreceive input taxrefund, aVAT taxable person registered attheState Revenue Service shall
submit documentary evidence substantiating thatthesupply ofgoods orservices referred toinPart1of
thisArticle hasoccurred.
4. TheVAT amount paidbynatural persons forgoods (iftheir value exceeds Ls100) exported
from thedomestic territory shall berefunded inaccordance withtheCabinet regulations.
5. Ifataxable person thathassupplied goods orservices inaccordance withPart1ofthisArticle
cannot produce documents certifying toexport, itshall besubject tothetaxforgoods andservices
supplied inaccordance attheratesetbyPart1,Article 5.
31. Some members oftheWorking Party requested thatinpursuance ofArticle IIIofthe
GATT 1994, theexemptions from VAT forbooks andmass media items published or(inthecase
ofmass media) registered inLatvia beextended toallitems covered bythese twopoints.
Quantitative Import Restrictions, including Prohibitions, Quotas andLicensing Systems
32. Some members oftheWorking Party asked Latvia tospecify thebusiness activities subject
tolicensing. Latvia wasrequested tosupply information inaccordance withthequestionnaire onimport
licensing andspecifically asked toprovide acomprehensive list,byHStariff line,ofproducts subject
tonon-tariff measures, citing themeasure applied (prior import approval requirements, mandatory
import licences, import quotas, prohibitions, etc.), itslegal basis, anditsjustification under WTO
provisions. Further questions addressed specific issues suchasquantitative restrictions onimports
ofsugar andimport arrangements affecting grain, ethyl alcohol andspirits, andtobacco.
33. Therepresentative ofLatvia provided theinformation onactivities subject toaspecial permit
which issummarized inTable 3.Only Latvia 'sParliament (Saeima) could designate theactivities
requiring special permits orreserve specific functions forStateenterprises. Headded thatinaccordance
withtheLaw"OnEntrepreneurial Activity" (Article 32)onlyaStateenterprise waspermitted toproduce
securities, banknotes, coins andstamps. Thespecial permit, valid forminimum fiveyears, shouldWT/ACC/SPEC/LVA/1
Page15
beissued within 30daysofreceipt oftheapplication; theentrepreneurial activity would beconsidered
permitted iftheissueofaspecial permit wasdelayed without motivation. Anylegalperson registered
inLatvia could engage intrade, butalicence could bedenied tofirms which didnotpossess the
necessary experience toimport; when doubts existed regarding thesecurity andstability ofthefirm;
theregistration document ofafirmdidnotinclude importing among itsactivities; thefirmwasnot
aregistered taxpayer; ordebts hadbeenincurred inthepayment oftaxes orother obligations towards
theState budget.
Table 3:Business activities requiring aspecial permit inLatvia
Activity Issuing authority
(i) production andoperation oflocal mineral deposits; Local governments
(rural andurban)(ii) retail trade oftobacco products;
(iii) cooperation ofpre-school andout-of-school educational
establishments;
(iv) shooting-gallery andshooting-ground services;
(v) passenger commercial transportation services within theterritory of
anappropriate region orcity;
(vi) operation ofhospitals, including veterinary clinics;
(vii) beerproduction fortrade;
(viii) coach, sports instructor andspecialist practice;
(ix) medical practice ofcertified doctors.
(i) production andrealization ofpharmaceuticals; Cabinet ofMinisters
(ii) pharmaceutical practice;
(iii) wholesale oftobacco products andimport forthepurpose oftrade;
(iv) operation ofeducational institutions;
(v) land, air,water andrailcommunication services;
(vi) wireless, communication services, radio andtelevision programmes
(except cable-television service);
(vii) detective andguards 'activities;
(viii) practice ofsworn auditors;
(ix) auditor activities;
(x) practice oflegal advisors;
(xi) notary practice;
(xii) insurance operations;
(xiii) gun, explosives andspecial appliances -gaspistols (revolvers), their
cartridges andgas-bags filled withirritant gas,import, production
andrealization;
(xiv) geological, hydro-geological activities andgeological engineering;
(xv) purchase, processing, production andrealization ofprecious metals
andstones andtheir products;
(xvi) expertise oflabour security andlabour protection requirement
fulfilment andworking-place certification inaccordance with
physical datameasurements ofthelabour environment;WT/ACC/SPEC/LVA/1
Page16
Table 3:Business activities requiring aspecial permit inLatvia
Activity Issuing authority
(xvii) metrological inspection ofmeasuring appliances used intrade, mail
andtaxation operations;
(xviii) meteorological inspection ofmeasuring appliances used inlabour
andhealth protection;
(xix) meteorological inspection ofmeasuring appliances used incourt,
inquiries andother State administration institution expertise;
(xx) design, manufacturing, assembling, servicing, repair operation and
modernization ofdangerous equipment;
(xxi) blasting operations;
(xxii) repair ofsports, hunting andother guns andspecial appliances -gas
pistols (revolvers) andgas-bags filled withirritant substances;
(xxiii) production, import andrealization ofpyrotechnic materials and
appliances andpyrotechnic services;
(xxiv) specialist training inlabour protection andretraining oflabour
protection specialists andtraining ofdangerous equipment service
staff;
(xxv) operation ofstock exchanges;
(xxvi) training ofallvehicle drivers;
(xxvii) printing ofpieces ofliterature andartortheir copies for
dissemination purposes;
(xxviii) dissemination offilms andvideo films andtheir public
demonstration;
(xxix) purchase offerrous andnon-ferrous iron-scraps;
(xxx) export ofthepurchased ferrous andnon-ferrous metals;
(xxxi) shipping agencies inLatvian ports;
(xxxii) repair andtesting ofshipwreck andrescue equipment;
(xxxiii) repair andtesting ofnavigation equipment;
(xxxiv) publishing ofnavigation materials andmarine maps, andtheir
amendments;
(xxxv) underwater works inports andshiprepair;
(xxxvi) training ofshipping specialists;
(xxxvii) rescue works incases ofshipwreck, including liquidation ofsea
pollution consequences;
(xxxviii) operation oftugboats inports:
(xxxix) jobplacing;
(xl) insurance mediation services;
(xli) holding andmaintenance ofallkinds oflotteries, gambling houses
andsimilar hazards ofwinning;
(xlii) activities insecurities andprivatization certificate market;
(xliii) sugar wholesale andimport;
(xliv) trade ofplant lifeprotection aids;
(xlv) retail trade ofmechanical vehicles andtheir trailers.
(i) practice ofsworn landsurveyors; State Land Agency
(ii) practice ofsworn values;
(iii) system oflanduse;WT/ACC/SPEC/LVA/1
Page17
Table 3:Business activities requiring aspecial permit inLatvia
Activity Issuing authority
(iv) geodetic works, photo grammatical works andtopographical works.
(i) veterinary -medical; Professional
Associations(ii) pedagogical;
(iii) architectural;
(iv) building engineering;
(v) lawyers.
(i) purchase andsaleofforeign currency; Bank ofLatvia
(ii) activities ofbanks andcredit institutions;
(iii) bank operations andcredit operations withprecious metals andtheir
products.
34. InTable 4,therepresentative ofLatvia provided theinformation onnon-tariff measures
affecting imports andthelegal basis forthese measures, which issummarized. Heconfirmed that
animport banonwhite sugar hadbeeninforce since May1993, buttheprohibition didnotapply
torawsugar. Import licences wereissued onanon-discriminatory basisregarding thecountry oforigin;
sugarhadbeenimportedfromDenmark,Estonia,Germany,Lithuania,UkraineandtheUnitedKingdom.
Hestated thatimport restrictions onsugar hadbeenmaintained toprotect localmanufacturers while
theindustry wasrestructured. Heagreed thattheexisting régime didnotcorrespond totheWTO
Agricultural Agreement andLatvia wasready toprepare adoption ofthenecessary legalamendments
tobring thesugar régime inlinewithWTO requirements. These changes could enter intoforce one
yearafterLatvia 'saccession totheWTO.
Table 4:Products subject tonon-tariff measures (import licensing)
HStariff line Description Legal basis
Chapter 10 Cereals Law"OntheLatvian grain market andState
grain reserves" (Article 4)
Chapter 11 Products ofthemilling industry Law"OntheLatvian grain market andState
grain reserves" (Art. 4)
Chapter 12 Oilbased plane seeds and
oleaginous fruit, various grain,
seeds andfruit, straw andfodder.
1701 Cane orbeetsugar andchemically
pure sucroseLaw"OnEntrepreneurial Activity"
(Article 32), Law"OnSugar", and
Regulation No.61
Chapter 22 Alcoholic beverages, spirits and
vinegarLaw"OnEntrepreneurial Activity" and
Regulation No.37of25January 1994
Chapter 23
except 2301, 2303
and2307.Residues andwaste from thefood
industries; prepared animal
foddersLaw"OntheLatvian grain market andState
grain reserves" (Article 4)WT/ACC/SPEC/LVA/1
Page18
Table 4:Products subject tonon-tariff measures (import licensing)
HStariff line Description Legal basis
Chapter 24 Tobacco products Law"OnEntrepreneurial Activity" (Article
32)andRegulation No.86of14April 1994
35. Therepresentative ofLatvia saidthatquantitative restrictions concerned onlyHSproduct
groups 1001 to1004 and1701. Licensing ofother products wasmaintained forstatistical purposes
only. TheStateCereals Bureau prepared anannual balance sheetofgrain production andconsumption
fortheGovernment. Tendering procedures forimport licences wererequired onlyforwheat. Public
tenders would beorganized when theproposed imported quantity exceeded 1,000 tons. Actual import
volumes occasionally fellshortofapproved quantities asimporters wereunable tousetheirentitlements
duetounforeseen problems.
36. Therepresentative ofLatvia noted thattheAlcohol Monopoly Department oftheMinistry
ofFinance keptalistofofficially approved importers ofalcoholic beverages andintended tobegin
regular publication ofthelist.Thenumber oflicensed importers andtraders wasnotcontrolled or
limited byanyother administrative means. Thelicensing system wasmaintained forreasons ofhealth
andsocial policy (toreduce illegal production andimportation) andforthecollection ofexcise taxes;
these objectives could notbeattained byother measures.
37. With reference tothelicensing system fortobacco products, therepresentative ofLatvia
saidthatthelicensing served statistical purposes andthecollection ofexcise taxes. Thedistribution
ofimported tobacco products wasnotrestricted. AsperDecember 1995, 76enterprises hadbeen
licensed forwholesale trade, 11enterprises forimporting and2enterprises fortheproduction oftobacco
products. Procedures governing production, manufacture anddistribution ofpharmaceutical products
contained intheDrugs Register orVeterinary Drugs Register oftheRepublic ofLatvia, including
licensing provisions forspecific pharmaceutical activities, wereoutlined intheLaw"OnPharmaceutical
Activities".
38. Some members oftheWorking Party requested thatLatvia undertake toeliminate allmeasures
applied toenforce quantitative restrictions, including theimport licensing forgrains andthebanon
sugar imports, asofthedateofaccession andcommit nottointroduce, re-introduce orapply quantitative
restrictions onimports ornon-tariff measures suchaslicensing, quotas, bansandother restrictions
having equivalent effect thatcannotbejustified under theprovisions oftheWTO Agreements on
Technical Barriers toTrade, Sanitary andPhytosanitary Measures, Import Licensing Procedures and
Agriculture. Additionally, Latvia wasasked toconfirm thatimport licensing onother commodities,WT/ACC/SPEC/LVA/1
Page19
especially wheat flour, cereal flour, cereal groats, cereal grains otherwise worked, sugar andanimal
feed, alcoholic beverages andtobacco products, were issued forstatistical purposes onlyandare
administered inconformity withArticle XIoftheGATT 1994andtheAgreement onImport Licensing
Procedures.
Customs Valuation
39. Some members oftheWorking Party asked Latvia toprovide additional information onits
customs valuation methods, noting inparticular thatterminology suchas"approximate valuation" and
valuation "according tothegoods ofthesame type" hadnocounterpart intheWTO Agreement on
Implementation ofArticle VIIoftheGATT 1994(theCustoms Valuation Agreement). Suchvaluation
practices were specifically prohibited inArticle 7.2oftheCustoms Valuation Agreement andthe
Agreement authorized nodelay intheimplementation ofthisprovision. Amember sought Latvia 's
commitmenttoapplyfullytheWTOprovisionsconcerningcustomsvaluationfromthedateofaccession,
including, inaddition totheAgreement ontheImplementation ofArticle VIIoftheGATT 1994, the
provisions fortheValuation ofCarrier Media Bearing Software forDataProcessing Equipment and
theprovisions ontheTreatment ofInterest Charges inCustoms Value ofImported Goods.
40. Therepresentative ofLatvia saidthatcurrent valuation practices were based ontheLaw
onCustoms DutyandRegulation No.27"OnEstimations ofCustoms Valuation Relating toImported
andExported Goods andOther Subjects" which interaliaallowed theuseofreference prices. Latvia
acknowledged thedisparity between itslegislation andtheWTO Agreement onImplementation of
Article VII.Amendments toexisting ruleshadaccordingly beendrafted andwereawaiting approval
oftheCabinet ofMinisters andratification byParliament. ThenewCustoms Code wasexpected to
enter intoforce in1997. Thevaluation methods inthenewCode were based ontransaction value;
thevalue ofidentical goods; thevalue ofsimilar goods; theunitpricemethod andthecomputed value
method. Acopyofthedraftlawwasprovided totheWorking Party. Latvia would implement the
Customs Valuation Agreement, including theWTO Software Valuation Decision afteratwo-year
transition period fromthedateofaccession totheWTO. Thetransition period wasnecessary forthe
adoption ofimplementing legislation andthetraining ofcustoms officials.WT/ACC/SPEC/LVA/1
Page20
Anti-Dumping, Countervailing Duties andSafeguard Régimes
41. Some members oftheWorking Party referred totheprovisions regarding anti-dumping and
countervailing duties inChapter IIoftheLaw"OnCustoms Duties (Tariffs)" andrequested information
onLatvia 'sintentions concerning theestablishment ofnew, broader legislation inthisarea. The
representative ofLatvia saidthatatpresent nodraftlegislation existed related tothisissue. Latvia
wasatthestageofexamining possibilities fortheintroduction ofanti-dumping andcountervailing duties
legislation, taking intoaccount itsspecific situation asasmall country andtheresources available in
theState budget forthepurpose ofeventual investigations. Heassured theWorking Party thatany
newlegislation would befullyconsistent withtheAgreement ontheImplementation ofArticle VIof
theGATT 1994 andtheAgreement onSubsidies andCountervailing Measures.
42. Some members oftheWorking Party asked Latvia todescribe itssafeguards régime and
questioned whether existing legislation would beconsistent with GATT Article XIX andthe
WTO Agreement onSafeguards. Therepresentative ofLatvia replied thatthecurrent safeguards régime
wasbased onRegulation No.20"Regulations toProtect theDomestic Market forFoods StuffProduced
inLatvia". Theregulation addressed onlyagricultural products -inparticular liveanimals, grain,
milk, meat, fish,potatoes andproducts made thereof -andhadbeenintroduced astherecent economic
transition haddisrupted sectors which normally would supply competitive products. However, the
regulations hadyettobeapplied. Theexisting régime wastemporary andwould bereplaced bynew
legislation. Hesaidthatintheelaboration ofanylegislation concerning safeguards, Latvia would ensure
theirfullconformity withtherelevant WTO provisions, including Article XIXoftheGATT 1994and
theAgreement onSafeguards.
2. Export Regulation
Customs Tariffs, FeesandCharges forServices Rendered, Application ofInternal Taxes toExports
43. Some members oftheWorking Party requested details onexport taxratesandplans tophase
outsuchtaxes.
44. Inresponse, therepresentative ofLatvia saidthatallgoods werezero-rated withtheexception
ofcertain mineral products, wood products, metal waste andscrap, andantiquities. ThelistofconcernedWT/ACC/SPEC/LVA/1
Page21
products, byHStariffline,andtherespective tariffratesisreproduced inTable 5.Latvia would abolish
export duties byyear2000, withtheexception ofduties onspecific antiques.
Table 5:Export Duties
LCCN code
Description Basic rateofdutyRateofdutyfor
"themost
favourable regime"Rateofdutyfor
"The freetrade
regime"
% Ls % Ls % Ls
1 2 3 4 5 6 7 8
2520 Gypsum; anhydride; plasters (consisting of
calcined gypsum orcalcium sulphate) whether
ornotcoloured, withorwithout small
quantities ofaccelerators orretarders 10 5 5
2521 00000 Limestone flux; limestone andother
calcareous stone, ofakindusedforthe
manufacture oflimeorcement 10 5 5
Wood intherough, whether ornotstripped of
barkorsapwood, orroughly squared
4403 20001 --Round timber withlength above 2mand
diameter from 14cm to24cm, dense M3* 6.0 6.0 6.0
4403 20002 --Round timber withlength above 2mand
diameter 26cm andmore, dense M3*8.0 8.0 6.0
4403 91001 --Oak-tree round timber withlength above 1m
anddiameter above 14cm, dense M3* 50.0 50.0 50.0
4403 92001 --Beech round timber withlength above 1m
anddiameter above 14cm,dense M3* 60.0 60.0 60.0
4403 99901 ----Round timber withlength above 1.6m and
diameter from 16to24cm (veneer blocks,
match blocks andsaw-timber of
sortA),dense M3* 16.0 16.0 16.0
4403 99902 ----Round timber withlength above 1.6m and
diameter 26cm andmore (veneer blocks, match
blocks andsaw-timber ofsortA),dense M3*
20.0 20.0 20.0
4403 99903 ----Round timber withlength above 1.6m and
diameter from 16to24cm (except veneer
blocks, match blocks andsaw-timber of
sortA),dense M3* 4.0 4.0 2.0
4403 99904 ----Round timber withlength above 1.6m and
diameter 26mandmore (except veneer blocks,
match blocks andsaw-timber of
sortA),dense M36.0 6.0 2.0
4403 99909 ----Ash-tree, elm,elm-tree, hornbeam, maple
andother Latvian hardleaf-bearing round
timber withlength above 1manddiameter
above 14cm, dense M3* 50.0 50.0 50.0
Printed books, brochures, leaflets andsimilar
printed matter, whether ornotinsingle sheets
4901 10002 --Published before 50-100 years* 50 50 0
4901 10003 --Older than100years* 100 100 0
-Other:
--Dictionaries andencyclopedias, andserial
instalments thereofWT/ACC/SPEC/LVA/1
Page22
Table 5:Export Duties
LCCN code
Description Basic rateofdutyRateofdutyfor
"themost
favourable regime"Rateofdutyfor
"The freetrade
regime"
% Ls % Ls % Ls
1 2 3 4 5 6 7 8
4901 91002 --Published before 50-100 years* 50 50 0
4901 91003 --Older than100years* 100 100 0
-Other:
4901 99002 --Published before 50-100 years* 50 50 0
4901 99003 --Older than100years* 100 100 0
7204 Ferrous waste andscrap; remelting scrap
ingots ofironorsteel 100 100 100
7404 00 Copper waster andscrap 20 20 20
7503 00 Nickel waste andscrap: 20 20 20
7602 00 Aluminium waste andscrap: 20 20 20
Works ofart,collectors 'pieces andantiques
-Paintings, drawings andpastels
9701 10002 --From 50to100years* 50 50 0
9701 10003 --Older than100years* 100 100 0
9701 90002 --From 50to100years* 50 50 0
9701 90003 --Older than100years* 100 100 0
Original engravings, prints andlithographs
9702 00002 --From 50to100years* 50 50 0
9702 00003 --Older than100years* 100 100 0
Original sculptures andstatuary, inany
material
9703 00002 --From 50to100years* 50 50 0
9703 00003 --Older than100years* 100 100 0
9706 00000 Antiques ofanageexceeding 100years 100 100 0
Export Restrictions
45. Some members oftheWorking Party requested details onthelicensing régime on
exports, notably withregard totradeinmetals andpyrotechnical materials. Therepresentative ofLatvia
replied thatbusiness licences wereissued toregistered enterprises fordomestic purchasing andexports
ofmetal scrap inaccordance withtheLaw"OnEntrepreneurial Activity". Licensing oftradeinstrategic
goods, products, services andtechnologies hadbeenestablished forreasons ofinternal security and
tofulfilinternational obligations onnon-proliferation. Latvia hadestablished anExport Control System
covering munitions andexports ofdualusegoods based oninternational guidelines, incorporating the
former COCOM Munitions ListandCouncil Regulation (EC) No3381/94.WT/ACC/SPEC/LVA/1
Page23
Export Subsidies
46. Amember oftheWorking Party asked Latvia todescribe itsdutydrawback system. The
representative ofLatvia replied thatdutydrawback wasavailable fortemporary importation ofgoods
forprocessing, improvement, repair orreplacement duetospoilage, andre-exports inaccordance with
Chapter VIIoftheLaw"OnCustoms Duties (Tariffs)" withRegulation No.87"Import ofCommodities
andOther Items forProcessing" providing more specific procedures. Additional documentation was
required tocertify thatgoods would notbesoldinthedomestic market andtoindicate theforegone
amount ofimport taxesandVAT. Processors would beexempt frompayment ofVAT against payment
ofadeposit of2percentofthevalue oftheimported goods (minimum Ls500,maximum Ls5,000).
Internal Policies Affecting Foreign Trade inGoods
Industrial Policy, including Subsidies
47. Amember oftheWorking Party noted thattheLatvian Government hadsignalled plans for
extensive investments ininfrastructure andwondered what thelikely effect would beonLatvia 's
exporting sectors. Herequested thatindustrial support programmes benotified inaccordance with
theAgreement onSubsidies andCountervailing Measures.
48. Therepresentative ofLatvia replied thattheGovernment aimed atimproving infrastructure
generally andwould nottarget anyparticular industry orenterprise. Heconfirmed thatLatvia did
notmaintain subsidies which metthedefinition ofaprohibited subsidy, within themeaning ofArticle 3
oftheAgreement onSubsidies andCountervailing Measures.
Technical Barriers toTrade, Sanitary andPhytosanitary Measures
49. Some members oftheWorking Party asked about thesystem ofstandards andproduct
certification inLatvia, including participation ininternational standards organizations, plans toadopt
andimplement theCode ofGood Practice (Annex 3oftheWTO Agreement onTechnical BarriersWT/ACC/SPEC/LVA/1
Page24
toTrade), theacceptance ofcertificates issued byforeign bodies andaccreditation ofprivate certification
bodies.
50. Therepresentative ofLatvia stated thattheLatvian National Standardization andMetrology
Centre prepared national standards, allofwhich werevoluntary except those related tohuman health,
safety andtheenvironment. Standards were formulated intechnical committees comprising
representativesofrelevantMinistries,producersandotherexperts.TheCentrewasanaffiliatedmember
oftheEuropean Standardization Committee (CEN), acorresponding member oftheISO,andwould
betheresponsible body forimplementing theCode ofGood Practice. Certification ofgoods was
prescribed intheLaw"OntheProtection ofConsumer Rights"; three certification centres hadsofar
beennominated bytheCabinet ofMinisters: theLatvian National Certification Centre forFood,
Cosmetics andToys; theLatvian National Standardisation Centre forHousehold Electric Equipment;
andtheBaltic Machinery Experimental Station forAgricultural andWood Equipment. TheNational
Accreditation Office intended tojoinISOCASCO. Certificates issued byforeign institutions were
recognized inaccordance withbilateral agreements. Safety standards andrequirements wereidentical
forimported anddomestic products. Latvia provided information ontechnical barriers totrade in
documentWT/ACC/LVA/4,Annex5.Alldraftstandardswerenotpublishedduetofinancialdifficulties.
However, draftstandards weredisseminated among allinterested parties fordiscussion andcomments.
51. Some members oftheWorking Party asked Latvia todescribe itsrégime ofsanitary and
phytosanitary measures inthelightofWTO requirements andoutline howtheprovisions oftheWTO
Agreement ontheApplication ofSanitary andPhytosanitary Measures would beimplemented after
accession. Amember wasparticularly concerned about transparency, asitappeared thatnewregulations
were notalways published prior toimplementation.
52. TherepresentativeofLatviasaidLatviaparticipatedintheactivitiesoftheCodexAlimentarius
Commission, theInternational Office ofEpizootics (IOE) andtheEuropean andMediterranean Plant
Protection Convention andhoped tojointheInternational Plant Protection Organization in1996 or
1997. Latvia based itssanitary andphytosanitary measures onrecommendations oftheseorganizations
andonregulations inforce intheNordic countries. Latvia reported monthly tointernationalWT/ACC/SPEC/LVA/1
Page25
organizations (FAO, WHO andIOE)onprogress inimplementing international norms. Acompleted
questionnaire onsanitary andphytosanitary measures wasprovided totheWorking Party
(WT/ACC/LVA/12, Annex 2).
53. TherepresentativeofLatviaaddedthattheLaw"OnPlantProtection"providedtheframework
foradministering phytosanitary measures. Sanitary measures werecovered intheLaw"OnVeterinary
Medicine", the"Pharmaceutical Law" andthe1995 "Food Law". Latvia wasintheprocess of
establishing adequate approval, control andinspection procedures asrequired bytheWTO Agreement.
VeterinarycontrolswereeffectedbytheVeterinaryDepartmentoftheMinistryofAgriculture.Imported
products wereaccompanied bycertificates issued bytheveterinary authorities oftheexporting country
inaccordance withLatvian quality requirements. Theproducts covered byveterinary regulations fell
under HSChapter headings 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
and2309. TheState plant protection service wasresponsible forthecontrol ofproducts 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, 1214910, 1400, 1802, 1802, 2302-2306, 2308 and2404. TheEnvironment
Health service institutions inspected products under HSheadings 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, 2402and2403. Latvia would accept exporters 'certificates
forprocessed foodproducts conforming toLatvia 'sregulations. Theofficial listofquarantinable pests
(plant) anddiseases (animals) wasprovided totheWorking Party.
54. Therepresentative ofLatvia agreed thatsanitary andphytosanitary measures should be
published inadvance ofimplementation toallow comments. ANational Food Centre would be
established forthedissemination ofinformation priortoLatvia 'saccession totheWTO. Heconfirmed
that,from thedateofaccession, Latvia intended tocomply fullywiththeobligations setoutinthe
TBTandSPSAgreements.WT/ACC/SPEC/LVA/1
Page26
Trade-Related Investment Measures (TRIMs)
55. Some members oftheWorking Party enquired about Latvia 'sintentions regarding notification
andelimination ofmeasures notinconformity withtheprovisions oftheWTO Agreement onTrade-
Related Investment Measures (TRIMs). Therepresentative ofLatvia saidthatLatvia didnotmaintain
anymeasuresinconsistentwiththeTRIMsAgreementandwouldnotinvokeprovisionsintheAgreement
thatprovide fortheprogressive elimination ofsuchmeasures within afixed period oftime.
State Trading Entities
56. Noting thatmore than500State-owned enterprises wereinvolved inforeign trade in1994,
some members oftheWorking Party asked Latvia toprovide alistofallfirms wholly orpartly owned
ormanaged bytheState, specifying anyexclusive orspecial rights accorded totheseenterprises. Latvia
wasrequested tocomplete thequestionnaire onStatetrading. Amember feltthattheStateGrain Board
could meet thecriteria ofaState trading enterprise under Article XVII oftheGATT 1994 andthat
thedefinition might alsocover other enterprises engaged inagricultural production anddistribution,
including trade insugar; metals; alcoholic beverages; andthenatural monopolies managed bythe
State. Latvia wasalsoasked toprovide details onthetrading firms Interlatvija andLatvijas Labiba.
57. Therepresentative ofLatvia provided anotification onStatetrading totheWorking Party
indocument WT/ACC/LVA/12 (Annex 3)describing thefunctioning oftheStateCereal Bureau. The
StateCereal Bureau wasaninstitution notengaged inregular grain trade; onoccasion grain hadbeen
boughttoreplenishreservesheldforfoodsecurityreasons.Domesticgrainwasfavouredinprocurement
fortheStatereserve.InstitutionssuchastheStateAlcoholMonopolyBoardandtheTobaccoDepartment
didnotengage intrade, butissued business licences toother operators intheirrespective areas. Other
State enterprises onlyheldthesame rights totrade astheprivate sector. Thetrading companies
Interlatvija andLatvijas Labiba werefullyprivatized in1991andtheGovernment hadnoroleintheir
activities.WT/ACC/SPEC/LVA/1
Page27
58. Therepresentative ofLatvia confirmed thathisGovernment would apply itslaws and
regulations governing thetrading activities ofState-owned enterprises andotherenterprises withspecial
orexclusive privileges infullconformity withtheprovisions oftheWTO Agreement, inparticular
Article XVII oftheGATT 1994andtheUnderstanding onthatArticle andArticle VIIIoftheGATS.
Government Procurement
59. Some members oftheWorking Party asked about thestatus andcontent ofLatvian legislation
onpublic procurement including clarification oftheexceptions concerning thecaseof"exclusive rights"
and"urgent necessity" andLatvia 'sposition regarding possible membership ofthePlurilateral Trade
Agreement onGovernment Procurement. Intheirview, Latvia should commit itselftoaspecific date
bywhich tojointheAgreement onGovernment Procurement iftheoutcome ofthenegotiations on
anentity listwassatisfactory toall.
60. Therepresentative ofLatvia saidthatLatvia wasdrafting anewLawonPublic Procurement
based ontheAgreement onGovernment Procurement andtheUNCITRAL Model LawonProcurement.
TheLawwasexpected toenter intoforce inearly 1997. Thedraftlawwould allow theaward of
supply contracts without bidorcompetition incases associated withthecreation ofStatereserves or
national security anddefence inaccordance withspecific decisions bytheCabinet ofMinisters, or
incases ofprocurement oflessthanLs5,000 (local government orStateinstitutions) orLs3,000 (local
government institutions). Single tendering could takeplacewhen certain suppliers heldexclusive rights
ongoods andservices; incircumstances ofurgent necessity; when pastpurchases required thesame
source foradditional supplies; andfortheconclusion ofresearch anddevelopment contracts.
61. Therepresentative ofLatvia recalled thatLatvia wasgranted observer status intheCommittee
onGovernment Procurement on4June1996 (document GPA/W/16). Headded thatadecision on
membership intheWTO Agreement onGovernment Procurement hadnotyetbeenmade duetothe
needtoconclude theinternal procedures forbringing intoforce theLawonPublic Procurement.
Nevertheless, Latvia wasprepared tobegin bilateral discussions onapossible listofentities.WT/ACC/SPEC/LVA/1
Page28
Transit
62. Some members oftheWorking Party asked Latvia todescribe therégime relating togoods
intransit. Thepresentative ofLatvia saidthatgoods carried intransit were checked attheborder.
Customs offices keptacopyofthecargo dispatch notesandcollected information forstatistical purposes.
Thesame procedures were followed forallgoods, including metals. Latvia charged notransit fee
atpresent, however, aconvoy fee-paidbythetransporter -waslevied ondangerous goods, tobacco,
foodproducts orperfume transported through Latvia. Certain non-dangerous goods weresubject to
asecurity deposit equal totheamount oftaxesdueonimportation ofsuchgoods inLatvia. Thesecurity
deposit would berefunded within twomonths provided thetransit regulations were adhered to.
Agricultural Policies
63. Some members oftheWorking Party asked Latvia toelaborate onitsagriculture régime,
includingtariffprotection,budgetarysupport,concessionalcredits,exportsubsidiesandtheprocurement
ofgrain. Some members noted tariffincreases onsome products andnewsupport measures ofrecent
date. Amember sought acommitment thatLatvia would eliminate export subsidies andpricecontrols
ongrain products.
64. Therepresentative ofLatvia saidthattheweighted average duty inagriculture was
14.8percent, byHStwo-digit product categories weighted average duties were asfollows:
Liveanimals 16.5percent
Meat andby-products 26.6 "
Milk anddairy products; eggs; natural honey; etc. 27.1 "
Products ofanimal origin 12.1 "
Livetreesandother fruit 16.9 "
Vegetables, root-vegetables andtuberous plants 15.9 "
Fruit andnuts 0.8 "
Coffee, tea,mateandspices 0.5 "WT/ACC/SPEC/LVA/1
Page29
Cereal crops 10.9 "
Products ofthemilling industry 18.5 "
Oilplant seeds andfruit 12.1 "
Lacquer, resin andother plant juices andextracts 13.3 "
Wadding material ofplant origin 15.0 "
Animal andvegetable fatsandoils 2.1 "
Meat products andmarine products 30.7 "
Sugar andsugar confectionery 9.2 "
Cocoa anditsderivatives 11.4 "
Cereal, flour, starch anddairy derivatives 20.7 "
Fruit, vegetable, nutderivatives, etc. 14.0 "
Miscellaneous foodstuffs 10.8 "
Non-alcoholic beverages, alcoholic drinks, vinegar 24.9 "
Food processing industry residues, ready-made animal feed 13.5 "
Tobacco anditssubstitutes 15.0percent
65. Therepresentative ofLatvia provided alistofsensitive products (Table 6)which attracted
highimport duties andforwhich rateshadbeenincreased in1994 inaccordance withtheproposals
oftheFarmers 'Union. Hestressed thattheproduction ofsensitive commodities accounted for
18percentoftotalemployment inLatvia andwasofvitalimportance totherural population.
Table 6:Sensitive products
HSCode Product Description
0102 Live bovine animals
0103 Live swine
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 offal ofbovine animals, swine, sheep, goats, horses, asses, mules orhinges fresh,
chilled orfrozen
0207 Meat ofedible offal, ofthepoultry ofheading No0105, fresh chilled orfrozenWT/ACC/SPEC/LVA/1
Page30
Table 6:Sensitive products
HSCode Product Description
0209 Pigfatfreeofleanmeat andpoultry fat(notrendered), fresh chilled, frozen, inbrine,
dried orsmoked
0210 Meat andedible meat offal, salted inbrine, dried orsmoked; edible flours andmeals of
meat ormeat offal
0401 Milk andcream, notconcentrated orcontaining added sugar orother sweetening matter
0402 Milk andcream, concentrated orcontaining added sugar orother sweetening matter
0403 Yoghurt
0404 Whey, whether ornotconcentrated orcontaining added sugar orother sweating matter not
elsewhere 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 or
chilled
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, meal andpellets
1104 Cereal grains otherwise worked, except riceofheading No1006
1105 Flour, meal andflakes ofpotatoes
1106 Flour andmeal ofthedried leguminous
1107 maltwhether ornotroosted
1108 Starches; insulin
1209 Seeds, fruitandspores ofakindused forsowing
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 fatsoroiloroffractions
ofdifferent fats
1601 Sausages andsimilar products, ofmeat, meat offal orblood
1602 Other prepared orpreserved meat offal orblood
1701 Cane orbeetsugar andchemically pure sucrose, insolid form
1703 Molasses resulting from theextortion orrefining ofsugarWT/ACC/SPEC/LVA/1
Page31
Table 6:Sensitive products
HSCode Product Description
1704 Confectionery from sugar notcontaining cacao
1806 Cocoa powder, containing other sugar orother sweetening matter other
19 Products from flour, starch andmilk
2001 Vegetables, fruit, nutsandother edible parts ofplants, prepared orpreserved byvinegar or
acetic 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, notfrozen
2006 Fruits, nuts, fruit-peel andother parts ofplants, preserved bysugar
2007 Jams, fruitjellies, marmalades, fruitornutpure andfruitornutpastes, being cooked
preparations, whether ornotcontaining added sugar orother sweetening matter
2009 Fruit juices andvegetable juices, unfermented andnotcontaining added spirit, whether or
notcontaining added sugar orother sweetening matter
2203 Beer from malt
2204 Wine offresh grapes
2207 Undenaturated ethyl alcohol ofanalcoholic strength byvolume 80% andhigher
2208 Undenaturated ethyl alcohol ofanalcoholic strength byvolume lessthan80% andlower
2302 Bran, sharps andother residues
2309 Preparations ofakindused inanimal feeding
66. Regarding domestic support, therepresentative ofLatvia saidthatLatvia maintained amarket
pricesupport forflax.According totheclassification suggested indocument WT/ACC/4 Statesupport
forflaxwasconsidered asprovided intheformofdirect payments totheproducers andinformation
wasgiven insupporting tables DS:1 andDS:9. Support forflaxwould besubject toreduction
commitments under theWTO Agreement onAgriculture. Subsidies forcereals inspecific regions,
seedmaterials andinputs weredeminimis support. Subsidies forpotatoes, cattle andseeds werealso
deminimis support. Latvia considered financing ofagricultural research, pestanddisease control,
advisory services andinfrastructure as"green box"measures. Farmers hadaccess tocredits atmarket
interest rates through aWorld Bank facility operated through theLatvian Agricultural Finance
Corporation. TheState itself didnotprovide credits butissued loanguarantees.
67. Therepresentative ofLatvia saidthattheGovernment guaranteed theprice offoodgrain
purchased fortheStatereserve. In1995theprice guarantee covered 32,000 tonsbutonly5,700 tons
wereactually purchased andtheStateGrain Reserve hadimported 14,000 tons. Domestic grain prices
hadrecently beenlower thantheworld market prices. Inresponse toaspecific question onelimination
ofthese guaranteed prices, therepresentative ofLatvia saidthatLatvia would consider thepossibility
ofsettling thematter within twoyears afteraccession totheWTO.WT/ACC/SPEC/LVA/1
Page32
68. TherepresentativeofLatviaaddedthatimportedagriculturalinputsinexportedfinishedproducts
wereexempt fromimport duties andVAT. Suchimports accounted for2.2percentofLatvia 'simports
ofagricultural products in1995. Before regaining independence, Latvia hadexported agricultural
products toother republics oftheUSSR atprices andquantities guaranteed bytheformer system.
Latvia hadprovided export subsidies formilkpowder, canned whole milk, cheese, butter andryein
1994 and1995. Hestressed thatLatvia wasnotprepared toeliminate export subsidies, butwould
reduce them consistently withtheWTO Agreement.
FishandFishProducts
69. Therepresentative ofLatvia saidthattheweighted average tariffonfishandcrustaceans falling
withinHSChapter3amountedto8.9percent.Preparedfishproducts(HSChapter16.04)andprepared
marine products (HSChapter 16.05) wereclassified assensitive products andthussubject toimport
duties intheLatvian Customs Tariff.
Trade inCivil Aircraft
70. Therepresentative ofLatvia saidthatLatvia could implement theAgreement onTrade inCivil
Aircraft without exceptions ortransitional period atthetimeofaccession.
Trade-Related Intellectual Property Rights (TRIPS)
71. Some members oftheWorking Party asked Latvia tocompare itsexisting régime withthe
WTO Agreement onTrade-Related Aspects ofIntellectual Property Rights (TRIPS). Specific questions
addressed thetimeschedule forthefullimplementation oftheTRIPS Agreement, theenforcement
ofintellectual property rights, theprotection ofcopyright andtheacceptance oftheBerne
Convention (1971) andtheRome Convention.
72. Therepresentative ofLatvia saidthat,asstated indocument WT/ACC/LVA/8 (pp.39-40),
existing legislation wasinconformity withtheWTO Agreement onTRIPS withtheexception ofthe
protection ofgeographical indications andlayout-designs (topographies) ofintegrated circuits -which
Latviawascommittedtoimplementbytheendof1995underabilateralagreement-andPartIII,sections
3and4oftheTRIPS Agreement (provisional andborder measures) which would beimplementedWT/ACC/SPEC/LVA/1
Page33
by1999. Eachlawpertaining tointellectual property included ageneral clause stating thattheprovisions
ofaninternationalagreementprevailedovernationallegislationincasesofcontradiction.Theprovisions
oftheTRIPS Agreement would thusprevail overdomestic lawonLatvia 'saccession totheWTO.
Thecourt system wascurrently under reform tostrengthen itscapability toenforce intellectual property
rights.
73. Therepresentative ofLatvia saidthatLatvia adopted aCopyright LawinMay1993 which
includedprovisionsoncomputerprogrammesandprotectionofdatabases.However,thebasicprinciples
regarding rental rights forcomputer programmes would berefined toensure better implementation.
TheCriminal Code wasamended inOctober 1995inregard toviolation ofcopyright andneighbouring
rights. Latvia acceded totheBerne Convention inAugust 1995.
Policies Affecting Trade inServices
74. Therepresentative ofLatvia provided adescription ofLatvia 'sservices régime indocument
WT/L/63 (L/7526/Add.3). Specific questions bymembers oftheWorking Party focused onregulations
inthefinancialsectorandclarificationoflawswithimportantprovisionsregardinginvestmentinservices
sectors.
75. Withregard tothefinancial sector, therepresentative ofLatvia stated thatlicensing requirements
werethesamefordomestic andforeign entities. However, procedurally, anapplication fromaforeign
banktoestablish abranch orrepresentative office wasconsidered bytheBoard ofGovernors ofthe
Bank ofLatvia while other applications wereconsidered bytheExecutive Board oftheBank ofLatvia.
Applications could bedismissed ifthedocuments submitted forregistration didnotmeet thelegal
requirements orifthefoundation ofabankwasconsidered nottobeintheinterest ofLatvia.
76. TherepresentativeofLatviasaidthatParliamenthadadoptedanewLaw"OnCreditInstitutions"
inOctober 1995. Under theLaw"Oninsurance" foreign investors could perform insurance activities
inLatvia through theestablishment ofcompanies orpartnerships withLatvians. Heconfirmed that
licences wereissued exclusively foronetypeofinsurance activity; insurers involved inlifeinsurance
wereprohibited fromoffering non-life insurance andviceversa. However, therestriction didnotextend
toreinsurance operations. Hestated thatthecriteria forregistration ofcredit institutions orenrolment
ofbroker companies were notinconsistent withArticle XVIoftheGeneral Agreement onTrade inWT/ACC/SPEC/LVA/1
Page34
Services. Therepresentative ofLatvia saidthatmany service activities were subject tolicensing
according toRegulation No.321of31October 1995 "Onlimitation ofEntrepreneurial Activity".
Licensing hadbeenintroduced toensure aprofessional levelofservices andtheprotection ofconsumers.
Foreigners weregranted national treatment intheissuance oflicences tosupply individual professional
services. However, theLaw"OnEntrepreneurial Activity" allowed licences forsworn auditors, sworn
landsurveyors, sworn estimate practice, inspector activities, legaladviser practice, notary practice,
coach, sports instructor andspecialist practice, pharmaceutical practice, insurance mediation services
andother entrepreneurship mentioned inpart4ofitsArticle 32tobeissued onlytophysical persons.
Heconfirmed thatLatvia hadnolegislation onsafeguard measures related totrade inservices and
thatnorestrictions were applied ontransfers andcurrent payments forservices.
77. Therepresentative ofLatvia saidthattheStateenterprise "Latvijas Pasts" (Latvian Post) held
monopolyrightsonpostalservices."Lattelekom",ajointventurebetweenTiltsCommunications(British
andFinnish ownership) andtheLatvian Government, hadbeengranted anexclusive rightfor20years
toprovide telecommunication services.
78. Therepresentative ofLatvia noted thatLatvia 'sfreetrade agreements hadtraditionally not
covered trade inservices. However, Latvia hadnegotiated anAssociation (Europe) Agreement with
theEuropean Union, signed on12June1995, which would include tradeinservices andestablishment
issues. Latvia hadsigned agreements onemployment offoreign labour withGermany andSweden.
Heconfirmed thatLatvia wasnotapartytoanyagreement concerning mutual recognition ofprofessional
qualifications.
Transparency
79. Therepresentative ofLatvia stated thatatthelatest from thedateofaccession, alllaws, and
other normative actsrelated totrade would bepublished intheOfficial Journal promptly. Hefurther
stated thatnolaw,ruleetc.related tointernational trade would become effective prior tosuch
publication.
80. Therepresentative ofLatvia saidthatatthelatest upon entry intoforce oftheProtocol of
Accession, Latvia would submit allnotifications (other thanthose required tobemade onanadhoc
basis )required byanyAgreement constituting partoftheWTO Agreement.WT/ACC/SPEC/LVA/1
Page35
Trade Agreements
81. Some members oftheWorking Party inquired about Latvia 'spreferential trade agreements.
Some members wereconcerned about theconsistency withArticle XXIV oftheGATT 1994 offree
trade agreements which excluded trade inagricultural products.
82. Therepresentative ofLatvia saidthatagreements fortheavoidance ofdouble taxation and
prevention offiscal evasion hadentered intoforcewithCanada, theCzech Republic, Denmark, Estonia,
Finland, Iceland, Lithuania, theNetherlands, Norway, Poland andSweden. Latvia hadentered into
intergovernmental agreements ontrade andeconomic cooperation, providing form.f.n. status, with
Armenia,Australia,Azerbaijan,CzechRepublic,Hungary,India,Moldova,Poland,RussianFederation,
Tadjikistan, Turkmenistan, Ukraine, United States andUzbekistan. Freetrade agreements hadbeen
concludedwiththeEuropeanUnion(includingpreviousfreetradeagreementswithFinlandandSweden),
Norway, Switzerland andatrilateral freetrade agreement withEstonia andLithuania. These trading
partners accounted fornearly 50percentofLatvia 'sforeign trade in1994. Agricultural products
hadbeenexcluded from some oftheagreements because negotiations were more complicated than
onindustrial products. However, allagreements contained aclause thatanagreement would be
concluded ontrade inagricultural products. Agriculture wascovered intheagreements withthe
European Union, Norway andSwitzerland. Thetrilateral agreement withEstonia andLithuania
concerned industrial products; aProtocol ontrade inagricultural products wassigned recently.
83. AEurope Agreement between theEuropean Union andLatvia wassigned on12June1995.
TheFreeTrade Agreements withNorway andSwitzerland werereplaced byaFreeTrade Agreement
between Latvia andEFTA which entered intoforce on1June1996. Thisagreement wasconcluded
inaccordance withtheArticle XXIV oftheGATT 1994andwould benotified totheWTO inthenear
future. Thetrilateral Protocol onTrade inAgricultural Products between Latvia, Estonia andLithuania
wassigned on16June1996.
84. Therepresentative ofLatvia saidthatthefreetrade agreement withtheEuropean Union had
beennotified totheWTO inJuly1995 indocument WT/REG/7/1. Latvia wascommitted toreduce
tariffs onagricultural imports fromtheEuropean Union inequal annual stepsbetween 1995and2000.
Reductions weregranted through tariffquotas onmeatandmeatproducts, yoghurt, flowers, cabbage,
cauliflower andmargarine while thetariff reductions applied forunlimited quantities ofvarious fruitWT/ACC/SPEC/LVA/1
Page36
andfruitjuices, petfood, hairandsome processed products. Themain Latvian products subject to
concessions intheEUwere meatandmeatproducts, dairy products, chocolate andsweets.
85. Therepresentative ofLatvia stated thathisGovernment would observe theprovisions ofthe
WTO including Article XXIV oftheGATT 1994andArticle VoftheGATS initstrade agreements,
andwould ensure thattheprovisions oftheseWTO Agreements fornotification, consultation andother
requirements concerning preferential trading systems, freetrade areas andcustoms unions ofwhich
Latvia wasamember weremetfromthedateofaccession, insofarastheseprovisions hadnotalready
beenmetbyoneoftheother Parties tosuchanagreement.
Conclusions
86. TheWorking Party tooknoteoftheexplanations andstatements ofLatvia concerning itsforeign
trade régime, asreflected inthissummary. TheWorking Party tooknoteoftheassurances given by
Latviainrelationtocertainspecificmatterswhicharereproducedinparagraphs.................................
ofthissummary. TheWorking Party tooknoteofthecommitments given byLatvia inrelation to
certain specific matters which arereproduced inparagraphs ............................ ofthissummary.
TheWorking Party tooknotethatthese commitments hadbeenincorporated inparagraph ...ofthe
Protocol ofAccession ofLatvia totheWTO.
87. Having carried outtheexamination oftheforeign trade régime ofLatvia andinthelightof
theexplanations, commitments andconcessions made bytherepresentative ofLatvia, theWorking
Party reached theconclusion thatLatvia beinvited toaccede totheMarrakesh Agreement Establishing
theWTO under theprovisions ofArticle XII.Forthispurpose, theWorking Party hasprepared the
draftDecision andProtocol ofAccession reproduced intheAppendix tothisreport, andtakes note
ofLatvia 'sSchedule ofSpecific Commitments onServices (document .......) anditsSchedule of
Concessions andCommitments onGoods (document .......) thatareannexed totheProtocol. Itis
proposed thatthese textsbeadopted bytheGeneral Council when itadopts thereport. When the
Decision isadopted, theProtocol ofAccession would beopenforacceptance byLatvia which would
become aMember thirty daysafteritaccepts thesaidProtocol. TheWorking Party agreed, therefore,
thatithadcompleted itswork concerning thenegotiations fortheaccession ofLatvia totheMarrakesh
Agreement Establishing theWTO.
[Tobecompleted ]WT/ACC/SPEC/LVA/1
Page37
APPENDIX
ACCESSION OFLATVIA
Draft Decision
TheGeneral Council,
Having regard totheresults ofthenegotiations directed towards theestablishment oftheterms
ofaccession oftheRepublic ofLatvia totheMarrakesh Agreement Establishing theWorld Trade
Organization andhaving prepared aProtocol fortheAccession ofLatvia,
Decides, inaccordance withArticle XIIoftheMarrakesh Agreement Establishing theWorld
Trade Organization, thattheRepublic ofLatvia mayaccede totheMarrakesh Agreement Establishing
theWorld Trade Organization ontheterms setoutinthesaidProtocol.WT/ACC/SPEC/LVA/1
Page38
PROTOCOL OFACCESSION OFLATVIA
TOTHE MARRAKESH AGREEMENT ESTABLISHING
THE WORLD TRADE ORGANIZATION
DRAFT
TheWorld Trade Organization (hereinafter referred toasthe"WTO"), pursuant totheapproval
oftheGeneralCounciloftheWTOaccordedunderArticleXIIoftheMarrakeshAgreementEstablishing
theWorld Trade Organization (hereinafter referred toas"WTO Agreement"), andtheRepublic of
Latvia (hereinafter referred toas"Latvia"),
Taking noteoftheReport oftheWorking Party ontheAccession ofLatvia totheWTO in
document WT/ACC/LVA/.... (hereinafter referred toasthe"Working Party Report"),
Having regard totheresults ofthenegotiations ontheaccession ofLatvia totheWTO,
Agree asfollows:
PartI-General
1. Upon entry intoforce ofthisProtocol, Latvia accedes totheWTO Agreement pursuant to
Article XIIofthatAgreement andthereby becomes aMember oftheWTO.
2. TheWTOAgreementtowhichLatviaaccedesshallbetheWTOAgreementasrectified,amended
orotherwise modified bysuchlegalinstruments asmayhaveentered intoforce before thedateofentry
intoforce ofthisProtocol. ThisProtocol, which shall comprise thecommitments referred toin
paragraph 86oftheWorking Party Report, shallbeanintegral partoftheWTO Agreement.
3. Except asotherwise provided forintheparagraphs referred toinparagraph 86oftheWorking
Party Report, those obligations intheMultilateral Trade Agreements annexed totheWTO Agreement
thataretobeimplemented overaperiod oftimestarting withtheentry intoforce ofthatAgreement
shallbeimplemented byLatvia asifithadaccepted thatAgreement onthedateofitsentry intoforce.WT/ACC/SPEC/LVA/1
Page39
4. Latviamaymaintainameasureinconsistentwithparagraph1ofArticleIIoftheGATSprovided
thatsuchameasure isrecorded inthelistofArticle IIExemptions annexed tothisProtocol andmeets
theconditions oftheAnnex totheGATS onArticle IIExemptions.
PartII-Schedules
5. TheSchedules annexed tothisProtocol shall become theschedule ofConcessions and
Commitments annexed totheGeneral Agreement onTariffs andTrade 1994 (hereinafter referred to
asthe"GATT 1994") andtheSchedule ofSpecific Commitments annexed totheGeneral Agreement
onTrade inServices (hereinafter referred toas"GATS") relating toLatvia. Thestaging ofconcessions
andcommitments listed intheSchedules shallbeimplemented asspecified intherelevant partsofthe
respective Schedules.
6. Forthepurpose ofthereference inparagraph 6(a)ofArticle IIoftheGATT 1994tothedate
ofthatAgreement, theapplicable dateinrespect oftheSchedules ofConcessions andCommitments
annexed tothisProtocol shallbethedateofentry intoforce ofthisProtocol.
PartIII-Final Provisions
7. ThisProtocol shallbeopenforacceptance, bysignature orotherwise, byLatvia until.........
8. ThisProtocol shallenter intoforce onthethirtieth dayfollowing thedayofitsacceptance.
9. ThisProtocol shallbedeposited withtheDirector-General oftheWTO. TheDirector-General
oftheWTO shallpromptly furnish acertified copyofthisProtocol andanotification ofacceptance
thereto pursuant toparagraph 7toeachmember oftheWTO andLatvia.
10. ThisProtocol shallberegistered inaccordance withtheprovisions ofArticle 102oftheCharter
oftheUnited Nations.
11. Done atGeneva this...dayof....onethousand ninehundred andninety seven, inasingle
copyintheEnglish, French andSpanish languages eachtextbeing authentic, except thataSchedule
annexed hereto mayspecify thatitisauthentic inonlyoneormore ofthese languages.WT/ACC/SPEC/LVA/1
Page40
ANNEX
SCHEDULE -REPUBLIC OFLATVIA
PartI-Goods
[Tobecirculated ]
PartII-Services
[Tobecirculated ]
[Tobecompleted]