RESTRICTED
WORLD TRADE WT/ACC/GEO/3
7April 1997
ORGANIZATION(97-1433)
Original: English
ACCESSION OFGEORGIA
Memorandum ontheForeign Trade Régime
Inacommunication dated 3July1996(WT/ACC/GEO/1), theGovernment ofGeorgia applied
foraccession under Article XIIoftheAgreement Establishing theWorld Trade Organization (WTO).
Atitsmeeting on18July1996, theGeneral Council established aWorking Party withthe
following terms ofreference: "Toexamine theapplication oftheGovernment ofGeorgia toaccede
totheWTO Agreement under Article XII,andtosubmit totheGeneral Council recommendations
which mayinclude adraftProtocol ofAccession." Themembership isopentoallWTO Members
indicating theirwishtoserve ontheWorking Party.
Inaccordance withtheestablished procedures (WT/ACC/1), theSecretariat iscirculating the
attached Memorandum ontheForeign Trade Régime received fromtheGovernment ofGeorgia. WTO
Members wishing tosubmit questions ontheMemorandum areinvited todosoby23May1997 for
transmission totheauthorities ofGeorgia.WT/ACC/GEO/3
Pageii
TABLE OFCONTENTS
Item Page No.
I. INTRODUCTION 1
II. ECONOMY, ECONOMIC POLICIES AND FOREIGN
TRADE
1. Economy
(a) General description 2
(b) Current economic situation 3
2. Economic Policies
(a) Main directions oftheongoing economic policies 5
(b) Monetary andfiscal policies 9
(c) Foreign exchange andpayments system, relations with
International Monetary Fund, application offoreign exchange
controls, ifany12
(d) Foreign anddomestic investment policies 14
(e) Competition policies 15
3. Foreign Trade 16
4. Domestic Trade inServices Including Value andComposition
ofForeign Direct Investment 17
5. Information onFinancial Movements Related toNationals
Working Abroad, Remittances, etc. 18
6. Information onGrowth ofTrade 18
III. FRAMEWORK FOR MAKING AND ENFORCING
POLICIES AFFECTING FOREIGN TRADE INGOODS
AND TRADE INSERVICES
1. Powers ofExecutive, Legislative andJudicial Branches of
Government 18
2. Government Entities Responsible forMaking andImplementing
Policies Affecting Foreign Trade 20
3. Division ofAuthority Between Central andSub-Central
Governments 21
4. AnyLegislative Programmes orPlans toChange the
Regulatory Régime 22
5. Laws andLegal Acts 22
6. Description ofJudicial, Arbitral orAdministrative Tribunals or
Procedures23WT/ACC/GEO/3
Pageiii
Item Page No.
IV. POLICIES AFFECTING TRADE INGOODS
1. Import Regulations
(a) Registration requirements forengaging inimporting 24
(b) Characteristics ofnational tariff 24
(c) Tariff quotas andtariff exemptions 25
(d) Other duties andcharges 26
(e) Quantitative import restrictions 26
(f) Import licensing procedures 27
(g) Other border measures 27
(h) Customs valuation 27
(i) Other customs formalities 27
(j) Pre-shipment inspection 28
(k) Application ofinternal taxes onimports 28
(l) Rules oforigin 29
(m-n) Anti-dumping andcountervailing regimes 30
(o) Safeguard regime 31
(p) Reference prices 31
2. Export Regulations
(a) Registration requirements forengaging inexporting 32
(b) Customs tariff nomenclature, types ofduties, dutyrates 33
(c) Quantitative export restrictions, including prohibitions, quotas
andlicensing systems 33
(d) Export licensing procedures 34
(e) Other measures 34
(f) Export financing, subsidy andpromotion policies 34
(g) Export performance requirements 34
(h) Import dutydrawback schemes 34
3. Internal Policies Affecting Foreign Trade inGoods
(a) Industrial policy 34
(b) Technical regulations andstandards 35
(c) Sanitary andphytosanitary measures 35
(d) Trade-related investment measures 36
(e) State-trading practices 36
(f) Freezones 36
(g) Freeeconomic zones 37
(h) Trade-related environmental policies 37
(i) Mixing regulations 37WT/ACC/GEO/3
Pageiv
Item Page No.
(j) Government-mandated counter-trade andbarter 37
(k) Trade agreements leading tocountry-specific quotas allocation 37
(l) Government procurement practices 37
(m) Regulation oftrade intransit 38
4. Policies Affecting Foreign Trade inAgricultural Products
(a) Imports 38
(b) Exports 38
(c) Export prohibitions andrestrictions 39
(d) Export credits, export credit guarantees orinsurance
programmes 39
(e) Internal policies 39
5. Policies Affecting Foreign Trade inOther Sectors
(a) Textiles regime 40
(b) Policies affecting foreign trade inother major sectors 40
V. TRADE-RELATED INTELLECTUAL PROPERTY REGIME
1. General
(a) Intellectual property policy 40
(b) Responsible agencies forpolicy formulation and
implementation 40
(c) Membership ofinternational intellectual property conventions
andofregional orbilateral agreements 41
(d) Application ofnational andm.f.n. treatment toforeign
nationals 41
(e) Feesandtaxes 42
2. Substantive Standards ofProtection, Including Procedures for
theAcquisition andMaintenance ofIntellectual Property Rights
(a) Copyright andrelated rights 42
(b) Trademarks, including service marks 43
(c) Geographical indications, including appellations oforigin 44
(d) Industrial designs 45
(e) Patents 45
(f) Plant variety protection 47
(g) Layout designs ofintegrated circuits 47
(h) Requirements onundisclosed information, including trade
secrets andtestdata 47
(i) Anyother categories ofintellectual property 48WT/ACC/GEO/3
Pagev
Item Page No.
3. Measures toControl Abuse ofIntellectual Property Rights 48
4. Enforcement
(a) Civil judicial procedures andremedies 48
(b) Provisional measures 48
(c) Anyadministrative procedures andremedies 48
(d) Anyspecial border measures 49
(e) Criminal procedures 49
5. Laws, Decrees, Regulations andOther Legal ActsRelating to
theAbove 49
6. Statistical DataonApplications forandGrants ofIntellectual
Property Rights, AsWellAsAnyStatistical Dataontheir
Enforcement49
VI. TRADE-RELATED SERVICES REGIME
1. General Description oftheOverall Market 50
2. Policies Affecting Trade inServices 50
Market Access andNational Treatment 69
Most-Favoured-Nation Treatment 69
VII. INSTITUTIONAL BASE FOR TRADE AND ECONOMIC
RELATIONS WITH THIRD COUNTRIES
1. Bilateral Agreements Relating toForeign Trade inGoods and
Trade inServices 70
2. Economic Integration, Customs Union andFree-Trade Area
Agreements 71
3. Labour Markets Integration Agreements 71
4. Multilateral Economic Cooperation, Membership inthe
Multilateral Economic Organizations, Trade-Related
Programmes ofOther Multilateral Organizations71WT/ACC/GEO/3
Pagevi
Item Page No.
ANNEXES
Annex 1 Statistics andPublications 73
Annex 2 ListofLaws andLegal Acts 94
Annex 3 Information onImport Licensing Procedures 103
Annex 3(a) Purposes andCoverage ofExport Licensing 107
Annex 4 Information onImplementation andAdministration ofthe
Customs Valuation Agreement 109
Annex 5 Information onTechnical Barriers toTrade 113
Annex 6 Information onState-Trading 128
Annex 7 A. Freetrade agreements
B. Other trade-related agreements129
129WT/ACC/GEO/3
Page1
I. INTRODUCTION
Georgia wasamong thefirstrepublics oftheFormer Soviet Union (FSU) toproclaim
independence. Thistookplace on9April 1991. During thefollowing fouryears ofturmoil Georgia
faced severe shocks fromdisruptions initstraditional tradeandpayments relations andsharp increases
inthecostofenergy imports. Inaddition, thecountry experienced civilunrest andinternal conflicts,
inparticular thewarintheAbkhazian region which created serious refugee problems andclosure of
itstrade routes. By1994, Georgia 'sGross National Product wasestimated at17percentofits1990
level-thegreatest fallamong thecountries oftheFSU.
Nevertheless, considerable economic change hastaken place andtheGeorgian economy has
changed substantially since independence. In1995, thefallinoutput slowed sharply andcontrol over
money supply waspartially restored. Inflation wassubstantially reduced. Since thebeginning of1995
theGovernment haseffectively stabilized thecurrency anditintroduced anewcurrency, theLari,
inlateSeptemberofthesameyear.Atthesametimetheinternationaltradingsystemhasbeenliberalized,
andtheState-planning system andpredominance ofbilateral counter-trade agreements brought toan
end.Theprivatization programme hasbeenaccelerated, particularly forsmall scalefirms. Vouchers
wereintroduced andinitial auctions held, andemployee/management buyouts werecarried outina
number ofmedium andlarge scalefirms. Georgia hasbenefited fromsubstantial inflows offinancial
aidfrom multilateral agencies andvarious foreign donors andcreditors.
Theinternal security situation hasimproved markedly, withanimmediate benefit ingreater
scope fortheactivities ofprivate business andeasier internal movement ofgoods. National elections
wereheldinNovember 1995, returning thecurrent government withasolidmajority, andproviding
amandate forcontinued economic reforms.
Themainobjectives ofGeorgia aretomaintain political andeconomic stabilization, accelerate
thetransition toamarket economy, promote economic growth andimprove social welfare. The
Government believes thatthese objectives canonlybeattained through fullintegration intotheworld
economy andthepursuit ofopentradepolicies. Georgia reaffirms itsstrict orientation tothefreetrade
policy. However, Georgia would reserve theright toimpose customs duties inthefuture, infull
consistency withitsconcessions andcommitments asaMember oftheWTO. TheGeorgian Government
believes thatestablishing Georgia asanopeneconomy, welcoming foreign investors andsupporting
private enterprise, willdomuch tomake themostofGeorgia 'seconomic potential andwillincrease
thecompetitiveness oftheGeorgian goods andservices inthemodern global market.
TheGovernment ofGeorgia considers itsaccession totheWorld Trade Organization oneof
themostimportant stepstoward integration intotheworld economy. Furthermore, thiswillhelpGeorgia
tocomplete reforms, tocreate alegislative framework corresponding tointernational standards and
build aprosperous anddemocratic society.
Taking intoconsideration everything aforementioned, Georgia isintending toaccess toall
agreements within theframework oftheWTO, although theprocess oftransformation ofeconomic
structures willneedappropriate time.
Thepresent Memorandum contains information onGeorgia 'seconomy andforeign trade. It
isintended tofacilitate thedeliberations oftheWorking Party onGeorgia 'saccession. TheGovernment
ofGeorgia stands ready toprovide anyadditional information requested bygovernments presented
intheWorking Party.WT/ACC/GEO/3
Page2
II. ECONOMY, ECONOMIC POLICIES AND FOREIGN TRADE
1. Economy
(a) General description
Georgia islocated atthejunction ofEurope andAsia, inthecentral-western partofthe
Trans-caucasus. Tothenorth aretheCaucasus Mountains which create anatural border withtheRussian
Federation. Tothesouth areTurkey andArmenia, totheeastisAzerbaijan, andtothewestisthe
Black Sea.Georgia occupies anareaofapproximately 70,000 square kilometres (26,911 square miles).
Georgia 'spopulation was,according tothelastcensus in1989, 5.45million inhabitants, of
which 47.4percentwere males and52.6percentfemales. Theethnic composition ofGeorgia is:
68.8percentGeorgian (including several regional subgroups speaking distinct languages inaddition
toGeorgian, e.g.Mengrelians, Svanetians); 9percentArmenian; 7.4percentRussian; 5.1percent
Azerbaijani; 3.2percentOsetian; 1.9percentGreek; and1.7percentAbkhazian. Most ofthe
population isofChristian faith(followers oftheGeorgian Orthodox Church), butIslam isprofessed
bythepeople ofAdjaria insouthwestern Georgia, andbyAzerbaijanis insoutheastern Georgia, and
bysmall population ofCurds. About 56percentofthepopulation livesintheurban areas, andone-third
ofthemreside inthecapital city,Tbilisi (1.3million inhabitants). Tbilisi istheindustrial andcultural
centreofthenation.TheothermajorcitiesareKutaisi(240,000inhabitants),Rustavi(158,000),Sukhumi
(140,000 -1990), Batumi (137,000), Gori(70,000) andPoti(51,000).
Georgia 'slocation between themoderately humid Mediterranean andthedry,continental
Arab-Caspian areas influences itsclimate. Ahumid subtropical climate dominates western Georgia,
while ineastern Georgia enjoys atransition from subtropical totemperate climate.
Georgia 'slocation isalsoconsidered among keyresources which cangreatly contribute tothe
development ofthenational economy. Theeffective functioning oftheEurasian transport corridor
willplayavitalroleinincreasing State income andindeveloping ofinfrastructure.
Thecountry isrichinvarious resources which canassist intherestoration anddevelopment
ofthenational economy. Thelabour poolin1996totalled 3.1million people, withahighproportion
ofspecialists andhighly-qualified workers.
Georgia possesses numerous proven deposits andreserves ofmineral resources, which include
commercially-exploitable deposits ofoil,coal,manganese, non-ferrous andraremetals, chemical raw
materials, andbuilding andfacing materials.
Atpresent, Georgia extracts limited quantities ofoilfromwellssituated throughout thecountry.
Thehighest oiloutput wasachieved in1980-1983, amounting to3.1-3.3 million tonsperyear. Since
1984, oiloutput hassteadily declined. Duetothecurrent energy crisis which Georgia isexperiencing,
much importance isattached totheoptimal utilization ofresources. Asaresult, several international
oilfirms havebeencontracted toundertake bothnewgeological surveys andthereworking ofexisting
oilfacilities.
Although Georgia hasbeendependent onimported oil,gasandelectricity, ithasanenormous
hydro-electric potential thathasnotbeensufficiently utilized. Thecommercially applicable water-power
capacity ofrivers isevaluated at60million kwh.
Thecoalmines ofTkibuli-Shaori, Tkvarcheli andAkhaltsikhe areofcommercial value. The
totalprospected reserve ofcoalamounts to400million tons.Themanganese oredeposits inChiaturaWT/ACC/GEO/3
Page3
(western Georgia) areamong theworld 'slargest, withreserves exceeding 200million tons.There are
alsosignificant reserves ofmineral andchemical rawmaterials, suchasandezite, barite, bentonite
clays, diatomite, talc,serpentine, andzeolite.
Georgiahas6.9millionhectaresofland,ofwhich3.2millionarearable.Ofthe800,000hectares
which arearable, 320,000hectares areusedforperennial crops; primarily fruittrees, vineyards and
tea.Sixty percentofthecultivated landrequires irrigation toachieve maximum productivity.
In1996, thesectoral breakdown oftheGross Domestic Product (GDP) wasasfollows:
agriculture, 33percent; industry, 14percent; trade, 24percent; transport andcommunications,
6percent; construction, 5percent; other branches ofmaterial production, 2percent; non-material
production, 16percent.
Asthefiguresindicate,agricultureisthelargestcomponentofGDP.Thediverseclimate,terrain,
andsoilcreate awidevariety ofGeorgian agricultural products. Among themostdeveloped agricultural
sub-sectors areviticulture, tea,citrus fruits, vegetables, horticulture, andtobacco. Thestock breeding
sub-sector isrepresented byproduction ofcattle, pigs, sheep, andpoultry.
In1996, thestructure oftheindustry sector wasasfollows: foodprocessing, 30.2percent;
electric power, 18.3percent;ferrous metallurgy, 6.2percent;non-ferrous metallurgy, 1.9percent;
lighting, 2.1percent;chemical andpetrochemical industry, 5.3percent;engineering, 5.9percent;
building materials, 2.1percent.Thusindustrial output relies primarily onagro- andfood-processing,
ofwhich alcoholic beverages, bread, natural tea,andcanned fruitandvegetables comprise thelargest
activities.
Atpresent, among themajor exportable products ofthecountry arefoodstuffs, non-ferrous
metals andmetal products, andmineral fertilizers.
(b) Current economic situation
Intheperiod immediately afterindependence, theGeorgian economy collapsed partially as
aconsequence ofthepolitical changes. Civil chaos andavacuum oflegislative, executive andjudicial
power hadadisastrous impact which aggravated thepurely economic effects ofthebreak upofthe
centrally-plannedeconomy.AfterthedisintegrationoftheSovietUnion,ofwhichtheGeorgianeconomy
wasanintegrated part,theeconomic relationships between therepublics oftheFSUandwithin the
Council ofMutual Economic Assistance largely ceased.
Between 1988and1995theoutput oftheeconomy declined inevery year, reaching itslowest
levelin1994. According toofficial statistics, the1994volume ofindustrial production was87percent
lessthanin1989; inagriculture, thedecrease was78percent; ingoods transportation, 92percent.
Capital investment in1994wasonethirdofonepercentofthatin1989. During thisperiod GDPfell
by83percentandthecountry 'slevelofdevelopment tothesamelevelasatthebeginning ofthe1960s.
In1994, theGovernment adopted drastic measures toresolve theseproblems. These measures
were implemented inthree main directions:
- bytheapplication ofstrict monetary andfiscal policies;
- bythestrengthening oftheruleoflawandorder; andWT/ACC/GEO/3
Page4
- bythecreation orimprovement oflawsgoverning thelegislative basisforeconomic reforms,
andtheirimplementation.
Thestrict monetary andfiscal policies pursued inthecountry from thelastquarter of1995
ledtotheelimination ofhyperinflation and,since thesecond halfof1995, toaconsiderable reduction
intheoverall inflation rate.Theaverage monthly inflation ratein1994wasover500percent;in1995,
thiswasreduced tounder 5percent. Thisprovided thebasis toimplement monetary reforms andto
introduce thenational currency (Lari) intocirculation. In1996themonthly rateofinflation onconsumer
goods hasbeen1.05percent.
Thepolitical andmacro-economic stabilization achieved bythebeginning of1995established
theconfidence necessary forthedevelopment ofbusiness activities. Inorder toprotect civilandproperty
rights, thelegislative basis wasextended andthelegal protection required forentrepreneurs was
guaranteed.
Asaresult, thedeclining trend ofproduction wasreversed, andin1996 GDP grew by
11.2percentrelative to1995. Agricultural output expanded by5percent;construction by25percent;
trade by30percent; industrial output by7percentrelative to1995.
In1996, GDPamounted toUS$3,602 million, orUS$665percapita. Inthesame year, total
industrial output wasUS$489million, andtotalagricultural output wasUS$1,135 million. Trade
accounted forUS$856million, construction US$178million andeducation US$86million.
Theaverage monthly salary ofservants working inbudget sector was27Lariandinnon-budget
sector 45Lari. According topreliminary estimation, average monthly salary inprivate sector was2-3
times higher thaninbudget andnon-budget sectors.
Although growth during 1989-1994 wasnegative, thedevelopment ofamarket economy was
encouraged. Thisincluded theestablishment ofalegislative basis foreconomic reform; thecreation
ofanindependent monetary andcredit system; theintroduction ofanational currency; andthecomplete
liberalization ofprices. Inaddition, thegovernment initiated international tradeandeconomic relations,
tooksubstantial stepsinthedirection ofthetransformation ofproperty viamass privatization, which
isnowinthestageofcompleting.Entrepreneurshiphasbeenestablishedandhasbeengraduallygrowing.
Allthese processes arepositive signs fortheeconomic development ofGeorgia.
Insummary, itisnecessary tooutline thataccording toestimates ofmajor international and
financial organizations, Georgia hascontinued tomake significant progress under themacroeconomic
andstructural adjustment programme launched in1994. Following fouryears ofoutput collapse,
economic growth resumed in1995, inflation hascontinued todecline, theexchange ratehasremained
broadly stable against theUSdollar, andthegross international reserve position oftheNational Bank
ofGeorgia (NBG) hasimproved. Georgia hasalsomade notable progress intheimplementation of
structural reforms, particularly inprivatization, bankrestructuring, andindeveloping anappropriate
legalframework foramarket-based economy. Furthermore, substantial progress hasbeenachieved
innormalizing Georgia 'srelations withitsofficial external creditors. These developments suggest that
Georgia 'sstabilization andstructural reform programme hasstarted tobearfruitwiththesupport of
theInternational Monetary Fund (IMF), theWorld Bank, other multilateral institutions, theEuropean
Union (EU), andbilateral donors andcreditors.WT/ACC/GEO/3
Page5
2. Economic Policies
(a) Main directions oftheongoing economic policies
Tactical andstrategic goals oftheeconomic policies, andeconomic development plans
Thetwogoals ofthelong-term strategy forthesocio-economic development ofGeorgia are
thestrengthening oftheStateandthecreation ofthematerial guarantees foraliving standard comparable
tothose indeveloped countries. Inorder toachieve these goals, itwillbenecessary tointegrate the
economic system intotheworld economy.
Therealization oftheabove-mentioned strategic goals implies:
- thesovereignty ofGeorgia, withconstitutional jurisdiction oftheGeorgian Government on
thewhole territory ofthecountry;
- reforms inStateandmunicipal systems, which results inefficient andeffective localgovernment
subordinate totheConstitution andnational law;
- development ofanational security programme;
- support forafree,pluralistic, andopencivilsociety withguarantees fortheabsolute protection
ofhuman rights andfreedoms, andofthefreedevelopment ofnational andethnic languages
andtheculture ofminorities;
- thecloseandmutually beneficial cooperation withallmembers oftheinternational community,
andactive participation intheactivities ofinternational organizations;
- acceleration ofestablishment offreemarket economy principles inthecountry;
- creation ofnewincentives forentrepreneurial development andregulations supporting inthis
process;
- providing social assistance tothose inthelowest income levels inthepopulation, andensuring
fullemployment.
ThestrategicprioritiesfortheeconomicdevelopmentofGeorgiafortheshort-andmedium-term
periods are:
- acceleratingtheprocessoftransitiontoamarketeconomybymeansofinstitutionalandstructural
transformation;
- guaranteeing energy tothemost important sectors oftheeconomy byreducing domestic
consumption, increasing domestic energy production, introducing energy-saving technologies;
- increasing foodproduction bydevelopment oftheagro-processing sub-sector;
- developing thetransport infrastructure andother communications;WT/ACC/GEO/3
Page6
- promoting exports byextending export base, particularly thefollowing industries: agriculture
andagro-industry, ferrous andnon-ferrous metallurgy, chemicals, high-technology products,
andbiodegradable products; and
- attracting foreign investments andcredits forfinancing ofprogrammes determined bythe
indicative plan.
Toachieve thetactical andstrategic goals ofthecountry 'seconomic policy, theGovernment
ofGeorgia hascreated andadopted anindicative planfortheperiod 1996-2000. Specific targets for
thisplaninclude:
- growth ofGDPatanannual average ofnotlessthan12.5percentovertheperiod 1996-2000;
- reducing unemployment tonotmore than5percentby2000; and
- increasing themonthly salary ofgovernment employees tonotlessthan200Lari, witha
proportional increase ofpensions andstudent allowances.
Themacroeconomic objectives oftheGeorgian Government 'sprogramme for1997 are:
- agrowth rateof8-10percent;
- afurther reduction inthe12-month inflation rateto10-12 percent; and
- anincrease inthegross international reserve position oftheNBG toUS$170million.
These objectives aretobeachieved through continued implementation ofprudent financial
policies andinstitutional andstructural reforms aimed atimproving economic efficiency andpromoting
domestic savings andinvestment.
Pricing policy
Inthefirstfourmonths of1992, series ofResolutions wereadopted bytheCabinet ofMinisters
oftheRepublicofGeorgia.Thecombinedeffectofthesewastheimplementationofabroadliberalization
ofprices, removing more than90percentoftheretail prices ofconsumer goods andservices and
95percentoftheprices ofindustrial goods from State regulations.
Additional Resolutions bytheCabinet ofMinisters in1993 and1994 substantially removed
allprices forenergy, transport, andother social services areas from State administration, replacing
control withtariffregulation either bylocalgovernments or,inthecases ofelectricity andnatural gas,
byindependent departments setupforthispurposes.
In1995, freeprices were introduced formilk, and,from 15June1996, bread prices were
relieved fromStateregulation. Thetotalresult ofalltheseResolutions isthatonlythefollowing goods
andservices willbesubject toregulation: natural gas,electricity andurban transport. Thus, freemarket
pricing havebeenestablished inGeorgia, guaranteeing support fortheeconomic reforms andmarket
mechanisms.WT/ACC/GEO/3
Page7
Privatization
In1992,theLaw"OnPrivatizationofStateEnterprises"andtheStateProgrammeofprivatization
wereadopted. These twodocuments determined themainbaseanddirections, methods andforms with
which theprocess ofprivatization should beconducted. On14April 1993 theCabinet ofMinisters
adopted theResolution No.288through which Stateenterprises weretobetransformed intojointstock
companies. TheResolution requires thereconstruction ofmedium andlarge enterprises asthejoint
stock companies aspartoftheprivatization process.
Theprivatization ofsmall entities, thefirststepofprivatization process, wasalmost completed
by1995. Thereconstruction ofmedium andlarge enterprises intojointstock companies andthe
realization ofshares havebeeninprocess since 1993. Georgian aswellasforeign natural andlegal
persons maytakepartintheprocess ofprivatization withonerestriction -aGeorgian enterprise can
onlyparticipate iftheshare ofthegovernment inhisauthorized capital doesnotexceed 25percent.
Theprocess ofprivatization iscarries outbytheState Property Management Ministry, which sells
Stateproperty(blocksofshares)atauction.ThegreaterpartofStatepropertyhasbeenprivatizedthrough
thevoucher system andthousands ofcitizens became theowner oftheproperty.
Atpresent, about 1,000 million medium andlarge enterprises arejointstock companies. The
controlling blocks ofshares arekeptbygovernment onlyinexceptional cases when anenterprise is
ofstrategic purpose andthenumber ofsuchenterprises isstrictly limited. 100percentofshares of
other enterprises aresold. Theemployees oftheenterprises havepreferences intheallocation ofa
certain number ofshares.
Atthisstagetheenergy andbread enterprises arebeing reorganized priortoprivatization. The
electric power stations willbecome jointstock companies andtheirshares willbesold. Theelectric
power distributor stations willbealsoprivatized.
Privatization ofState property isallowed inallbranches ofthenational economy, except
enterprises subject toprivatization in1997-2000 ortransformation intojointstock companies leaving
thecontrolling block ofstocks (51percent)inStateproperty orenterprises notliable toprivatization
atall.Theconcrete listofsuchobjects isannually approved bytheMinistry ofState Property
Management afteragreeing itwiththeMinistry ofEconomy, Justice andother appropriate ministries.
State property notliable toprivatization atall:
- thelandofstrategic importance, minerals, water resources, territorial waters andmarine
economic border zones;
- units ofhistorical, cultural andartistic values, State archives ofhistorical andcultural
importance, filmandphoto documents, State funds, State museums, archives andfunds of
ministries, scientific-research institutes ofGeorgia;
- Georgian treasury, country 'smonetary reserves ofbudget andnon-budget assets, reserves of
precious metals, funds ofnational value, social security, medical insurance andother national
funds;
- mobilization reserves, State reserves;
- system ofinstitutions ofAcademy ofSciences ofGeorgia;WT/ACC/GEO/3
Page8
- roads ofgeneral use;
- national cemeteries andpantheons;
- administrative buildings oforgans ofState administration;
- enterprises which produce radioactive materials andmaterials formilitary purpose, theirtesting,
designing andscientific institutions.
State property subject toprivatization in1997-2000:
- telecommunication enterprises ofstrategic importance;
- services controlling geological, cartographic, geodesic, hydrometeorlogical, environmental
protection andnatural conditions;
- patent service, standardization andcertification service, machine testing stations andtesting
centres;
- sanitary-epidemic, veterinary, vegetable protection services;
- manufacture ofnarcotic andtoxic products, andenterprises oftheir sowing, reaping and
processing;
- testing stations, experimental basis ofministries (institutions) andeducational institutions of
Georgia;
- training andrescue fleet, navigation inspection;
- flying controlling systems ofair-crafts andrunways;
- objects included inthesystem ofsecurity, internal affairs, defense, procurator 'soffice and
courts ofGeorgia;
- Georgian railway, ports;
- main irrigation anddrying systems ofenterprises ofmelioration system andwater supply;
reservoir andcomplex hydro-technical buildings;
- dispatching services oftransmission ofelectric-energetic sector;
- these restrictions donotexclude theprivatization ofcertain objects withconsent ofrelevant
ministries (institutions) iftheirrealization doesnotcause negative impact onactivities and
development ofbranches included inthese ministries (institutions).
State property enterprises subject totransformation intojointstock companies leaving the
controlling block ofstocks (51percent) inState property:
- television andradio transmission channels;WT/ACC/GEO/3
Page9
- enterprises producing controlling devices forgeological, hydrometeorlogical, environmental
protection andnatural conditions.
(b) Monetary andfiscal policies
Monetary policy
TheNational Bank ofGeorgia (NBG) isresponsible forthedesign andimplementation of
monetary policy. Inpractice, itworks closely withtheMinistry ofFinance asmonetary policy and
fiscalpolicyarecloselylinked.TheNationalBankofGeorgiawasestablishedbytheLawoftheRepublic
ofGeorgia of2August 1991. BytheResolution No.764-11s oftheParliament ofGeorgia thefinal
version oftheLaw"OnNational Bank" wasadopted on23June1995. During theperiod ofjoint
programme implementation withIMF, theNational Bank ofGeorgia isauthorized togiveloans to
theStatebudget fornomore than5yearterm, with15percentannual interest (different from those
defined intheparagraph 2-7).
Thebanking system inGeorgia isregulated bythelawsofGeorgia "OnBanks andBanking
inGeorgia" (1991), "OntheNational Bank ofGeorgia" (1995), "OnCommercial Banks inGeorgia"
(February 1996). Although some newinvestment funds andafewinsurance companies exist, non-bank
financialinstitutionsdonotplayasignificantintermediaryrole.Afterputtingthesecuritiesof10,000,000
Lariamount inthecirculation, stock market willstartfunctioning.
Reforms started bytheNational Bank in1994 weresuccessfully proceeded evenin1996and
theirmajor directions were thefurther perfection ofmonetary regulation, strengthening ofbanking
system, raising itsliquidity andimproving thefinancial situation ofseparate banking institutions.
Activities ofthenational Bank wereaimed atreducing inflation rateandprices, bymeans ofachieving
stable exchange rateofnational currency. Monetary regulation forreducing inflation wereimplemented
in1995 bymeans ofcontrol onincrease ofmain money indicators. In1996 inflation index decreased
till13.9percent.
Themaximum volume ofnetcredits tobegranted totheGovernment bythebanking system,
alsoofnetinternal andinternational assets oftheNational Bank weredefined withthepurpose tostop
therateofincrease ofmoney supply.
By1January 1997cashmade 185.6 mln.Lari. Itis54.2mln.Larigreater ascompared with
1January 1996 andiscaused bythegrowth ofcountry ’seconomic potential.
Withthepurposes ofmaintaining thestable Lariexchange rate,inspiteofconstant intervenes
intheTICEX, theNational Bank ofGeorgia maintains theimproved structure ofnetforeign assets
ascompared withforecast indexes offinance programme bytheendofcurrent year. Itwasexpected,
thatnetforeign obligations would exceed netforeign assets by47.6mln.Lari. Infact,itwasreduced
to0.5mln.Lari.
Bythesame data, netinternal assets made 209.5 mln.Lariinstead of256.61 mln.Lari. It
isby47mln.Larilessandgoestothegovernment netliabilities, which made 208.9 mln.Lariby
1January 1997 instead oftheforecast 249mln.Lari.
During thecurrent year39.1mln.credit resources havebeensoldontheauction, which exceeds
thetotalamount ofsoldcredit resources on1995 credit resource auction by36.7mln.WT/ACC/GEO/3
Page10
Thesumofresources soldbycommercial banks during thewhole year, made 17.7mln.Lari,
which makes 46percentofthetransaction. Itexceeds thesumofresources soldbycommercial banks
during the1995 by15.8mln.Lari.
Fiscal policy
The1997budget, which wasapproved bytheParliament ofGeorgia andwilltakeeffect after
signing bythePresident ofGeorgia, reflects Georgia 'sfiscal goals. Theprincipal aimistocontinue
toboost revenue toalevelsufficient tofinance most current government expenditure, while relying
mainly onexternal resources tofinance capital outlays. Toimprove revenue performance, Georgia
intends tostrengthen taxandcustoms administration. Reducing selective taxrates should improve
taxpayercomplianceandexpandthebaseofcertaintaxes.Thegovernmentwillalsomaintainarestrained
expenditure programme, while allocating more resources toward health andeducation, downsizing
budgetary organizations further, andimproving expenditure management aswellasbudget planning
procedures.
Theoverall deficit ofthegeneral government, onacommitment basis andincluding grants,
istargeted todecline further, fromanestimated 4.4percentofGDP in1996to2.8percentin1997.
TheGovernment alsointends toeliminate domestic expenditure arrears, which exceeded Lari40million
atend-1996, implying acashdeficit target of3.6percentofGDPin1997, compared withanestimated
4.3percentin1996. TheGovernment intends toincrease taxrevenue, inclusive ofrevenue fromspecial
State andtheprivatization funds, from anestimated 7.2percentofGDP in1996 to9.8percentin
1997, mainly through improvements intaxandcustoms administration. Anumber ofpolicy measures
areexpected toplayakeyroleinstrengthening taxadministration, including thecontinuation ofthe
comprehensive taxsurvey toidentify newtaxpayers, expansion ofself-assessment bytaxpayers, a
strengthening ofthelegalauthority ofthetaxandcustoms administration, andrationalization oftheir
incentive system. Inparticular, Government intends toidentify andissue taxidentification numbers
(TINs) for30,000 newtaxpayers andassess theirtaxes. Starting from 1January 1997, thepenalty
ratesfortaxarrears arereduced from0.5percentperdayto0.1percentperday.Excessive penalties
forlatefiling ofdeclarations andunderstatement oftaxliabilities arealsoreduced. Inorder tostrengthen
thelegalbasis forcustoms administration, theGovernment hasdrafted anewCustoms Code, which
isplanned tobeadopted bytheParliament before June30,1997. TheCode will,interalia,introduce
newprovisions forcustoms warehouses andadutydrawback scheme. Concerning transit trade, the
newCode willestablish legalliability forpayment oftaxes when goods donotreach theirdeclared
destination.
Thebasic VAT rateremains unchanged at20percent. Thisrateapplies toallgoods except
bread andflour, which continue tobetaxed at10percent. With theTaxCode, theGovernment of
Georgia intends toconclude bilateral agreements, toenable Georgia tomove VAT taxation ontrade
withCIScountries tothedestination principle. VAT would, henceforth, belevied onallnon-exempt
imports, irrespective ofthecountry oforigin andexports would bezero-rated forVAT, regardless
ofthecountry ofdestination. Under thenewtaxcode theGovernment decided tointroduce an
invoice-based credit method, withcredit extended toallinputs, except forafewitems specified in
theCode. Asaninterim measure until1998, when theTaxCode willbemodified tolevyVAT on
anaccrual basis, theGovernment hasmaintained theprevious law'sprovisions onthetiming ofthe
taxable event. Finally, theTaxCode requires allbusinesses withaturnover above Lari2,000 perannum
toregister asVAT payers, while businesses withasmaller turnover canregister onavoluntary basis.
Thecorporate profit taxisunified attherateof20percent,bothforresidents andnon-residents with
permanent establishment. Fornon-residents without apermanent establishment, thenewTaxCode
provides fortaxation atsource withrespect togross income without anydeductions.WT/ACC/GEO/3
Page11
Rates ofmajor taxes
Tax Rate Details/main exemptions
Value added tax 20% 10%onflour, bread, wheat andrye
Profit tax 20% Industrial andconstruction companies 10%,
Banks andcredit institutions 35%
Income tax 20% Threshold GEL 78annual income, below that
12-15%
Fixed taxonsmall
enterprisesGEL 156forupto12
sq.mandGEL 12for
eachextra sq.mReplaces profit tax,income taxandVAT for
enterprises withfloor space oflessthan20sq.m
Excise 15%-100% seethelistbelow
Customs duty 5and12% seesection IV.1(c) below
Social security levy
onenterprises29%ofwages Budgetary organizations 26%
Social security levy
onemployees1%ofwages
Medical taxon
enterprises3%ofwages
Medical taxon
employees1%ofwages
Employment fund
taxonenterprises1%ofwages Budgetary organizations exempt
Employment fund
taxonemployees1%ofwages
Enterprise property
tax1%ofvalue of
non-financial assetsBudgetary organizations exempt
Natural persons
property tax0.1% ofvalue of
houses, flatsAlso0.2% ofminimum wage perhorsepower
ofvehicles owned
Agricultural land
taxUS$1-30perhectare Depending onregion, quality, usage
Urban landtax US$500-1.000 per
hectareDepending onareaandusage
Source: Laws provided bytheState TaxService
Thefollowing goods aresubject toexcise taxontheterritory ofGeorgia regardless whether
theyareimported orproduced domestically:
grape wines andwinematerials,
except champagne andsparkling wines - 15%
beer - 15%
automobiles - 15%
automobile tyres - 15%WT/ACC/GEO/3
Page12
automobile petrol - 15%
sparkling wines - 20%
jewellery - 35%
vermouth, fruitwines andwinematerials - 50%
brandy, brandy materials, other alcoholic
drinks received from grape wineandvodka - 50%
tobacco andtobacco products (3-4class),
except tobacco rawmaterials - 55%
tobacco andtobacco products (high, 1-2class),
except tobacco rawmaterials - 100%
cognac, gin,whisky, rum, balsam and
other drinks, champagne, wines - 100%
ethyl spirits andother denaturalized alcoholic drinks - 100%
(c) Foreign exchange andpayments system, relations withInternational Monetary Fund,
application offoreign exchange controls, ifany
Foreign exchange system
There aretwoexchange ratemarkets inGeorgia: Tbilisi Interbank Currency Exchange (TICEX)
andForeign Exchange Bureau Market (FXB). TICEX works asawholesale market where banks bid
inauction tobuyandsellforeign exchange between themselves andonbehalf ofcustomers. FXB
isaretail market where alarge volume ofsmall transactions ismade.
TheGovernment 'sexchange ratepolicy isoneof"managed floating". Thispolicy doesnot
setarigidly fixed exchange ratetarget butallows theratetomove ("float") inlinewithchanges in
thedemand forandsupply offoreign exchange. Thisprocess is"managed" byintervention bythe
National Bank ofGeorgia (NBG). NBG intervenes intheTICEX auction market byselling orbuying
foreign exchange tosmooth outanyimbalance between supply anddemand thatmight leadtolarge
orvolatile movements oftheexchange rateinashort period oftime.
Theexchange rateofLariistheofficial rateregularly established bytheNBG inaccordance
withfixed rateintheTICEX (28February 1997 -US$1=1.2870 GEL).
During January andFebruary of1997theTICEX operations made US$23,866,347, inwhich
NBG intervened US$2,003,067.
Asshown inthetable of"GEL/US$ ratesonTICEX andFXB markets, September 1995 -
June1996" (seeAnnex 1),theGEL/USD exchange ratehasbeenstable since thebeginning ofthe
yearandhasrecently appreciated slightly. Throughout thisperiod thecountry hasbeenrunning balance
oftrade andcurrent account deficits andfortheforeseeable future willcontinue tobedependent on
concessional loans andgrants tomaintain external balance. Itisthisexternal financing thatprovides
NBG withtheforeign exchange reserves needed tomeetthedemand forforeign exchange generated
bythecurrent account deficit. Byborrowing foreign exchange themonetary authorities havebeenable
tomeettheshortfall offoreign exchange supply overdemand andmaintain astable exchange rate.
Therelative merits offixed andfloating exchange rates aremuch debated. Under current
Government policy thekeyrolefortheexchange rateinthisperiod ofstabilization istoserve asa
nominal anchor tocontrol inflation. Astable exchange rateavoids theinflationary consequences of
import price risescoming about asaresult ofadepreciating currency.WT/ACC/GEO/3
Page13
Adepreciation oftheexchange ratewould assist thecorrection ofthecurrent account deficit,
provided thattheeconomy wasinastatetorespond rapidly tothepriceincentives created byexchange
ratedepreciation andcould dosowithout significant short-term declines inliving standards. Whether
these conditions holdisbynomeans clear. There areanumber ofsignificant structural problems,
including:weakfinancialmanagementandmarketingcapabilityinindustryandagriculture;poortransport
infrastructure; continuing energy supply problems; andalmost noeffective financial sector. Inaddition,
many consumer goods areimported andariseinprices islikely toreduce realliving standards
significantly. Theapproach ofthestabilization programme istouseadditional concessional lending
tofinance thebudget andcurrent account deficits, while appropriate structural reforms areimplemented
toensure alongtermgrowth response. Structural reforms willremove constraints ontheeffectiveness,
andwillincrease thenumber, ofpolicy instruments available toGovernment sothatinthelonger term
exchange ratepolicy canbefreed ofitsanti-inflationary roleandusedtoassist anexport-led growth
response. Anti-inflationary policy willbelefttomonetary andfiscal policy measures.
Payments System
Georgia hasbeenrunning alarge current account deficit since independence andfinancing
itbyborrowing from abroad, previously byrunning uptrade debts andnowbyconcessional loans
from donors. Thedonor support comes within aprogramme where Georgia hasreceived helpwith
restructuring previous debts butwilleventually havetomove torepaying them. Itislikely thatbalance
ofpayments support willhavetocontinue forsome time, butthiswillbehardtofindifGeorgia is
notseentobemaking progress towards reducing itsowncurrent account deficit.
Georgia'saccumulationofforeigndebtisanextraordinaryachievementgiventhatatthemoment
ofindependence itsigned away allSoviet liabilities toRussia. BytheendofJune, USD 1.6bln.had
beencontracted: 56percentof1995'sGDP and546percentof1995'sexports. Most ofthebilateral
debtwasbuiltuptosustain highenergy consumption immediately afterindependence, butlargeamounts
were alsoapparently appropriated dishonestly oratleastusedwithlittlethought ofhowthemoney
wastoberepaid. Theburden isbeing reduced byrestructuring andfurther loans atveryconcessional
rates from donor countries, butfuture generations willhavetoreduce consumption topayforthe
mistakes ofrecent governments.
Relations withInternational Monetary Fund
Georgia became amember oftheInternational Monetary Fund on5May1992 anditsquota
wasdefined by111mlnSDR. TheMinistry ofFinance asafiscal agent ofGeorgia totheIMFisobliged
toconduct allkinds ofrelations, transactions andoperations withtheIMFonbehalf ofGeorgia. The
National Bank ofGeorgia isappointed asadepositary ofallIMFassets, whoisobliged toperform
theregistration ofaccounts ofNo.1,No.2andsecurities innational currency. TheIMFsystematically
re-estimates itsaccounts onthebasis ofexchange ratesofLari, regularly sentbytheNational Bank
ofGeorgia. According tothe31January 1997 data: Account No.1-539,601.91; Account No.2-
18,241.69; Security account -344,220,578.42 Lari.
TheIMFallocates financial resources initsmember States intheframes ofdifferent financing
mechanisms. Definition ofconcrete mechanism depends onthestage ofeconomic reforms going in
amember State. Theterms ofalltypes ofcredits granted tothecountry arepublished bytheIMF
insocalled PRESS RELEASE, which isreceived byallmember States ofIMF.
Georgia forpresent timereceived thefollowing credits: system transformation credit -STF,
reserve stabilization credit -Stand-by, enlarged credit forstructural reforms -ESAF. Totally thesum
ofcredits received from IMFamounts to105450000SDR bySeptember 1996.WT/ACC/GEO/3
Page14
These credits areusedforformation ofinternational reserves ofthecountry, fromwhich the
stabilization ofrateofLarioncurrency market andcovering theforeign debtofGeorgia isperformed.
Registration ofexpenditures andinterests forservice ofabove mentioned credits ismade by
theIMFinseparate account ofSDR.
Georgia hasmade thestatement concerning Article VIIImembership. Works wereimplemented
appropriately foraccomplishment ofallconditions necessary forjoining Article VIII. Atpresent a
decision hastobetaken bytheBoard ofGovernors oftheIMF.
(d) Foreign anddomestic investment policies
Differences between domestic andforeign investments
The Law ofGeorgia "On Promotion andGuarantees ofInvestment Activity" of
12November 1996, determines thelegalbasisforimplementation offoreign anddomestic investments
ontheterritory ofGeorgia andguarantees fortheirprotection. TheArticle 3oftheLaw(Rights of
anInvestor) says: "Every foreign investor shallhaveinthepursuit ofaninvestment orintheconduct
ofitsbusiness notlessfavourable rights andguarantees asphysical andlegalpersons ofGeorgia".
Inaccordance withtheparagraph 3oftheArticle 2"enterprise inwhich theshare offoreign
investor isnotlessthan25percent,enjoys thesamerights astheforeign investor". Foreign investment
enterprises,whichhavebeenissuedlicencesbeforetheLaw"OnPromotionandGuaranteesofInvestment
Activity" comes intoeffect, according tocurrent legislation, willcontinue toenjoy alloftherights
andbenefits granted under theLawofGeorgia onForeign Investments of30June1995, fortheactivity
inthesectors where theinitial licence hasbeenissued foraperiod offiveyears fromthedateofthe
issuance ofaidlicence.
Repatriation ofprofits andexpropriation
Inaccordance withtheparagraph 5oftheArticle 3oftheLaw"OnPromotion andGuarantees
ofInvestment Activity": "every foreign investor, subject tothepayment oftaxesandother compulsory
levies, arighttoconvert inGeorgian Banking facilities according tothemarket rate,andtotransfer
abroad freely andwithout delay allcontributions tocapital, profit andothermonetary proceeds generated
byinvestment activity". Thementioned rights mayberestricted onbasis ofthelawbythedecision
ofcourt concerning thebankruptcy, criminal offenses orthefailure tomeet theundertaken civil
obligations. Aforeign investor hasarighttotransfer abroad property, owned byhim.
Theguarantees envisaged bytheLawinclude immunity ofaninvestor. Inaccordance with
theArticle 7oftheLawinvestments arefullyandunconditionally protected bytheGeorgian legislation.
Investment taking isallowed onlywithadequate compensation incasesdirectly stipulated bytheorganic
law,decisions ofthecourt orurgent necessity stated bythelaw.Decision oninvestment taking as
wellastheterms ofcompensation maybeapplied atthecourt, orincaseofforeign investor, provisions
ofArticle 16(Dispute Settlement) oftheLaw"OnPromotion andGuarantees ofInvestment Activity".
Compensation given totheinvestor shallbeequal toactual market value ofthetaken investment on
thedateofinvestment taking. Compensation shallbepaidwithout delay andshallalsoinclude interest,
accrued from thedateoftaking untilthedateofpayment. Foreign investor hasarighttoconvert at
market ratethecompensation atauthorized banking facilities inGeorgia andtotransfer inabroad freely
andwithout delays.WT/ACC/GEO/3
Page15
Sectors inwhich investments arerestricted orlimited
Thelistofthesectors where investments areprohibited ispresented bythePresident ofGeorgia
andapproved bytheParliament.
Investordoesnothavetherighttocarryoutthefollowingactivitieswithoutpermissionorlicence,
issued bythecorresponding authority:
- production orsaleofweapons andexplosives;
- production orsaleofmedicines andother substances subject tospecial control;
- exploitation ofnatural resources andforestry;
- establishment ofcasinos andgambling houses network, securing theorganization ofthegames
andlotteries;
- banking activity;
- insurance activity;
- issuance ofsecurities, which constitute apublic distribution ofsecurities;
- wireless communication service andestablishment oftelevision andradio channels;
- other activities stipulated bythelegislation ofGeorgia.
(e) Competition policies
Thefirststeps intheimplementation ofananti-monopoly policy inGeorgia were made in
September1992,whentheAnti-monopolyPolicyDepartmentwasestablishedintheMinistryofEconomy
ofGeorgia, andtheDecree “OntheRestriction ofMonopoly Activities andtheDevelopment of
Competition inGeorgia ”wasadopted bytheState Council ofGeorgia.
However, afterthebeginning ofmassprivatization in1992, therewasadanger ofreplacement
ofgovernmentalmonopoliesbyprivatemonopolies.Inordertoavoidsuchaprocess,theAnti-monopoly
Policy Department exercised some control overtheamalgamation ofenterprises, preventing the
establishment ofmany monopolistic entities.
In1994, theGovernment ofGeorgia requested theassistance ofinternational financial
organizations intheelaboration ofanewanti-monopoly competition law.TheLaw“OnMonopolistic
Activity andCompetition ”wasadopted bytheParliament inJune1996.
During thisperiod, thelegislative basisforcompetitive markets wasestablished. Inparticular,
several resolutions oftheGovernment wererescinded concerning exclusive rights tocertain economic
agentsandtheprohibitionofcompetitionincertainactivities.TheStateregisterofmonopolistenterprises
wascompiled, thefullliberalization ofprices wasconducted, andeconomic agents werereleased from
most restrictions (except those determined bytheLaw).
InMay1996, theState register ofnatural monopolies wasadopted bytheDecree made by
thePresident ofGeorgia, asrequired bythenewAnti-monopoly Law. Thisregister contains thoseWT/ACC/GEO/3
Page16
economic agents withwhom thedevelopment ofcompetition iseconomically ineffective and,therefore,
practically impossible.
State register ofnatural monopolies:
- from theMinistry ofCommunications andPostofGeorgia:
- service ofState postcommunication;
- distribution offrequency spectrum;
- from theRailway Department ofGeorgia:
- railway line;
- from theState Company "Sakgazi":
- main pipe-line;
- from theState Company "Sakenergo":
- highvoltage power transmission system;
- from theState Company "Sakaeronavigatsia":
- route anddispatcher control ofairspace;
- from theMaritime Department ofGeorgia:
- seaportofPoti;
- seaportofBatumi;
- seaportofSukhumi.
3. Foreign Trade
Thetotalmerchandise exports ofGeorgia in1996areestimated atUS$290.4 million. Exports
ofnon-factor services amounted toUS$93.9million, offactor services toUS$5.2million. Onthe
imports side,merchandise imports amounted toUS$710.1 million, ofwhich US$84.1million was
humanitarian aid.Imports ofnon-factor services came toUS$93.8andoffactor services toUS$76.0
million.
Estimates of“cross-border ”trade (frontier trade) areincluded inthefigures formerchandise
trade, though thesearenotreliable. Cross-border exports areestimated atUS$91.0million andimports
at$44.0million.
Themerchandise tradedeficit in1996amounted toUS$419.7 million, considerably inexcess
ofthevalue ofexports ofgoods. In1992 thedeficit came toUS$377.9 million. Thecurrent account
deficitin1996,beforeofficialtransfers,wasUS$490.2million,asagainstUS$318.9in1992.Officially
transfers brought these deficits down toUS$406.1 million andUS$247.7 respectively. In1996 the
currentaccountdeficitbeforeofficialtransfersamountedto13.6percentofGDPandaftersuchtransfers
to11.3percentofGDP.WT/ACC/GEO/3
Page17
Among merchandise exports, manufactured goods accounted for87.8percentin1995,
agricultural goods 6.1percentandmining products 4.4percent. Manufactured goods exports were
dominated byferrous metal products which accounted for33.4percentoftotalexports, beverages
(9.2percent), chemical products (8.5percent) andfoodproducts (8.4percent).
Ofmerchandise imports 75.9percentwere manufactures, 17.6percentnatural gasand
electricity, and5.7percentagricultural products. Among imports ofmanufactures, foodproducts made
up22.5percentandoilproducts 22.2percent.
Among merchandise exports, manufactured goods accounted for77.4percentin1996,
agricultural goods 8.4percentandmining products 7.4percent.Manufactured goods exports were
dominatedbyferrousmetalproductswhichaccountedfor15percentoftotalexports,oilandoilproducts
(12.2 percent), beverages (8.2percent), chemical products (10.0 percent) andfood products
(12.6 percent).
Ofmerchandise imports 70.5percentwere manufactures, 15.3percentnatural gasand
electricity, and10.0percentagricultural products. Among imports ofmanufactures, foodproducts
made up18.5percentandoilproducts 22.7percent.
Among service trade, transportation services contribute some 90percentofexports and
85percentofimports. Inbothcases seatransport isthelargest component.
In1996, Russia wasthemajor export partner taking 28.5percentoftotalmerchandise exports,
followed byTurkey (13.0 percent)andAzerbaijan (12.5 percent). Inthesame year, Russia wasthe
largest supplier ofGeorgian merchandise (17.7 percent), withTurkey (11.2 percent)andAzerbaijan
(11.0 percent)insecond andthirdplaces. Inthatyear, former Soviet Union countries accounted for
64.5percentofexports and37.8percentofimports. These figures compare with39.8percentand
58.2percentrespectively in1992. Thus, ontheexport side,arestoration ofintra-FSU trade appears
tohavetaken place aftertheeffective breakdown incommercial relations in1990and1991. However
ontheimport side,sources continue tobediversified andintra-FSU trade continues toaccount for
adiminishing share.
Since 1992 theofficial datasuggest thatexports ofgoods haveincreased atanannual rateof
2.7percentindollar terms andimports atarateof3.3percent. Non-factor service exports have
increased atanannual rateof7.9percentandimports at17.4percent.
Theofficial datasuggest much more rapid growth inGeorgia 'stradeinrecent months, though
thepicture isnodoubt distorted bytheimproving statistical coverage oftrade flows. Registered
merchandise exports andimports inUS$terms wererespectively 112percentand132percenthigher
inthefirsthalfof1996 thaninthesame period ayearearlier. Imports fellinthesecond quarter of
thisyearrelative tothefirstbutthatwasprobably linked totheremoval ofmany exemptions from
import dutyinMarch. Such changes incoverage andintariff treatment make thediscernment of
long-term trends difficult, butthegeneral impression isofgreatly accelerated growth intrade activity
intherecent past.
4. Domestic Trade inServices Including Value andComposition ofForeign Direct Investment
TheForeign Investment Agency registers investments withmore thanUS$100,000 value.
Asof15August 1996, 17suchforeign direct investments havebeenregistered intrade andservice
sectors, thetotalamount ofwhich amounts toUS$3,837,517 since establishing oftheagency on15
May1996. Thetarget source ofinvestments areTurkey (39.7 percent), Switzerland (10.5 percent),
Italy(7.6percent), Netherlands (6.7percent) andUSA (6.3percent).WT/ACC/GEO/3
Page18
5. Information onFinancial Movements Related toNationals Working Abroad, Remittances,
etc.
International remittances andpayments aremaidbymeans ofcorrespondent accounts existing
inforeign banks onthebasisofagreements drawn upwitheachofthese banks. These agreements are
based oninternational unified rules ofmaking payments.
6. Information onGrowth ofTrade
Exports ofgoods andservices were allbutthesame in1992 and1995, US$404.6 million
intheformer yearandUS$404.0 inthelatter. Theincreases inexports ofgoods andofnon-factor
services wereoffset byasharp fallinexports offactor services. Overthesameperiod imports ofgoods
andservices grew from US$723.5 million toUS$881.5 million. Theincrease inimports offactor
services wasparticularly sharp owing totheriseininterest payments onforeign debt.
Fortheperiod to2000, theMinistry oftheEconomy hasprepared some benchmark ranges,
rather thanadetailed setofinternally-consistent forecasts. Despite some recovery ofexports inrecent
years, Georgia isstillstarting from alowbaserelative toexport performance intheyears before the
break-up oftheFSU. Theannual rateofgrowth ofexports ofgoods isputatsome 34to37percent
peryearinconstant dollar terms. Thebottom oftherange estimate forexports ofmetal goods is
31percentperyear,ofengineering andsteelproducts 17percentandofagricultural andfoodproducts
48percent.Growth ofmerchandise imports inconstant dollars isputatbetween 15.6and17.5percent
peryear. These figures gives atradedeficit ofranging fromUS$175to187million intheyear2000.
Nosuchscenarios havebeenprepared fortradeinservices orforthecurrent account asawhole.
III. FRAMEWORKFORMAKINGANDENFORCINGPOLICIESAFFECTINGFOREIGN
TRADE INGOODS AND TRADE INSERVICES
1. Powers ofExecutive, Legislative andJudicial Branches ofGovernment
InGeorgia, therulesofactivities andscope ofcompetence ofexecutive, legislative andjudicial
authorities areregulated bytheConstitution ofGeorgia, bytheGeorgian Law“Onstructure ofexecutive
power andruleofitsactivities ”of8December 1995, bytheLawoftheRepublic ofGeorgia “On
judicial system intheRepublic ofGeorgia ”of28December 1990, bytheLawofGeorgia "On
Constitutional Court ofGeorgia" of31January 1996, bytheLawofGeorgia "OnConstitutional
Jurisprudence" of21March 1996 andbyother normative acts.
Executive power
ThePresident ofGeorgia, StateChancellery, Ministries andother Governmental institutions
exercise theexecutive powers.
TheheadoftheStateandtheheadofexecutive power inGeorgia isthePresident ofGeorgia.
ThePresident conducts andcarries outinternal andexternal policies oftheState, ensures thefunctioning
ofgovernmental authorities inaccordance withtheConstitution. ThePresident carries outexecutive
powerbyhimselfandalsothroughMinistriesandothergovernmentalauthoritiesandinstitutions,actively
using consultative andconstitutional institutions.
Thecoordination ofexecutive power bodies andtherelations withlegislative andjudicial
authorities arehandled bythePresident ofGeorgia through theState Chancellery.WT/ACC/GEO/3
Page19
TheState Chancellery isheaded bytheState Minister.
Georgian Ministries are:theMinistry ofEducation, theMinistry ofProtection ofEnvironment
andNatural Resources, theMinistry ofEconomy, theMinistry ofTrade andForeign Economic
Activities, theMinistry ofDefence, theMinistry ofJustice, theMinistry ofTelecommunications and
Post, theMinistry ofCulture, theMinistry ofRefugees andSeparation, theMinistry ofUrbanization
andBuilding, theMinistry ofForeign Affairs, theMinistry ofState Security, theMinistry ofState
Property Management, theMinistry ofAgriculture andFood, theMinistry ofSocial Security, Labour
andEmployment, theMinistry ofFinance, theMinistry ofInternal Affairs, theMinistry ofHealth,
Ministry ofFuelandEnergy, Ministry ofTransport.
Each Ministry isheaded byaMinister whotakes decisions independently inthescope ofhis
competence. AMinister isresponsible before thePresident forthesituation anddevelopment ofthe
administration sphere assigned tohim.ABoard ofaMinistry isaconsultative organ ofaMinister.
TheStatedepartments,themainadministrationsandcorporationsareconsideredasGovernmental
institutions oftheexecutive power.
Forthepurpose ofregulation ofrelations among structural entities ofexecutive power, the
President ofGeorgia creates coordination bodies, advisory andconsultative institutions, themandates
ofwhich areapproved byhim.
TheGovernment isaconsultative body ofthePresident ofGeorgia andconsists oftheState
Minister andMinisters.
Thestructure oftheexecutive power andtherulesofitsactivities areapproved bytheParliament
ofGeorgia aftertheirsubmission bythePresident totheParliament.
Theintegration oranyother unification ofarmed forces, Statesecurity andpolicy institutions
isprohibited.
Legislative bodies -Parliament ofGeorgia
Parliament isthehighest representative body oftheState (Article 48oftheConstitution). It
exercises legislative power, determines main directions ofdomestic andforeign policy andexercises
general control overtheGovernment intheareas defined bytheConstitution andcarries outother
responsibilities.
Internal structure andworking rules oftheParliament aredetermined byregulations ofthe
Parliament.
Committees arecreated intheParliament withthepurpose ofpreliminary preparation of
legislative issues, promoting theimplementation ofdecisions, control bytheParliament overactivities
ofGovernment andorgans accountable totheParliament.
Investigation orother temporary commissions canbecreated intheParliament. TheParliament
meetings arepublic.
Judicial power
Judicial power isexercised bythecourt system andimplemented bymeans ofconstitutional
control andother forms determined byjustice andlaw.WT/ACC/GEO/3
Page20
InGeorgia rulesofactivities oflawandarbitration courts aredetermined bytheConstitution
ofGeorgia, theLawoftheRepublic ofGeorgia “Onjudicial system intheRepublic ofGeorgia ”,the
Law“Onarbitration court oftheRepublic ofGeorgia ”.
Judicial authority isimplemented bymeans ofconstitutional control, justice andother forms
determined bylaw.Actsofacourt apply toallgovernmental authorities andpersons onthewhole
territory ofthecountry. Judicial authority isindependent anditisimplemented onlybycourts.
Judicial system inGeorgia isregulated bytheConstitution ofGeorgia of24August 1995, by
theLawofGeorgia "OnConstitutional Court" of31January 1996, "OnConstitutional Jurisprudence"
of21March 1996, bytheLawoftheRepublic ofGeorgia "OnJudicial System intheRepublic of
Georgia" andbytheLawoftheRepublic ofGeorgia "OnArbitration Court intheRepublic ofGeorgia"
of23April 1991.
Constitutional Court
TheConstitutional Court ofGeorgia isajudicial bodyofconstitutional control which ensures
theprimacy oftheGeorgian Constitution, constitutional legacy, protection ofhuman constitutional
rights andfreedom. Itspowers, rulesofcreation andactivities aredetermined bytheConstitution and
Organ Law. Itexercises judicial power according totherulesofconstitutional jurisprudence regulated
bytheLawofGeorgia "OnConstitutional Jurisprudence" of21March 1996.
Lawcourts -Supreme Court
LawcourtsimplementjusticeinGeorgia.Theirsystemandrulesofjurisprudenceareestablished
bylaw.
TheSupreme Court ofGeorgia supervises theimplementation ofjustice inlawcourts ofGeorgia
andbyfirstinstance considers cases determined bylaw.
Procurator 'sOffice
TheProcurator ’sOffice ofGeorgia isaninstitution ofjudicial authority, which implements
criminallegalprosecution,supervisesinquiry,servingsentence,supportsStateaccusation.Itisauniform
centralized system administered bytheGeneral Procurator. Powers, organization andrulesofactivities
oftheProcurator ’sOffice aredetermined bytheOrgan Law.
2. Government Entities Responsible forMaking andImplementing Policies Affecting Foreign
Trade
Policy affecting foreign tradeisanimmediate partofthegeneral Georgian foreign policy. The
Constitution provides thePresident withthepower todetermine thedirection offoreign policy and
thusalsoforeign tradepolicy. Inpractice, Government entities responsible formaking andimplementing
policies affecting foreign trade are:
- State Chancellery;
- Ministry ofEconomy;
- Ministry ofForeign Affairs;
- Ministry ofTrade andForeign Economic Relations;WT/ACC/GEO/3
Page21
- Ministry ofFinance.
Theratification bytheParliament ofGeorgia isneeded tocomplete national procedures relating
toWTO accession. Fortheratification consent ofthesimple majority ofentire composition isnecessary.
TheParliament ofGeorgia adopts aresolution onaccession toaninternational treaty.
TheParliament ofGeorgia isresponsible forratification ofinternational treaties, while the
President ofGeorgia andexecutive authorities areresponsible fortheirimplementation.
InthenegotiatingprocesstheParliamenthasconsultativefunctionsandintheratificationprocess
ithascoordination functions.
3. Division ofAuthority Between Central andSub-Central Governments
TheState authority isimplemented ontheprinciple ofdivision ofauthority.
ThePresident ofGeorgia istheheadofState andexecutive authority ofGeorgia.
Theprinciples ofcoordination ofexecutive authorities withlegislative andjudicial authorities
aredetermined bytheLawof8December 1995 “Onrules ofstructure andactivities ofexecutive
authority ”.
BytheDecreeNo.362oftheHeadofStateofGeorgiaof16September1995,interimregulations
“Onlocalbodies ofState authority andadministration ofregion (town) oftheRepublic ofGeorgia ”
were abolished andnewinterim regulations “Onlocal administrative authorities intheRepublic of
Georgia”wereestablished,whichregulateactivitiesoflocalauthoritiesofStateadministrationinvillages,
settlements,townsbeingunderregionaladministrationandregions,determinerulesoftheirestablishment
andscope ofcompetence, regulate theirrelations withStateauthority andadministration bodies, branch
services, enterprises, institutions andorganizations ontheappropriate accountable territory.
Elaboration ofStatepolicy inthesphere oflocaladministration isdetermined bytheRegulations
oftheCoordination Service oflocal administration andregional policy ofthePresident ofGeorgia
adopted bytheDecree No.107ofthePresident ofGeorgia of6January 1996. TheCoordination Service
oflocaladministration andregional policy ofthePresident ofGeorgia isaState service accountable
tothePresident ofGeorgia (inthesystem oftheState Chancellery), which implements itsauthority
onbehalf oftheState.
With aview toimplementing economic reforms, adopting newprinciples ofmanagement,
promoting therational utilization ofmaterial resources andstrengthening lawandorder andcoordinating
theactivities oflocal authorities inthegeneral interests oftheState, theposts oftheState agents
(according totheregions) were established andrelevant regulations were adopted.
Inaccordance withparagraph 4oftheArticle 2oftheConstitution ofGeorgia, Georgian citizens
regulate thecases oflocal importance bymeans oflocal administration without violating State
sovereignty. Implementation ofGovernmental authority isbased onprinciples ofdivision ofauthority.
Introduction oflocal taxes andfeesisimplemented bylocal representative organs. Thelist
oflocaltaxes andfeesthatcanbeintroduced bylocal representative organs isgiven intheLawof
Georgia "OnPrinciples ofTaxation System".WT/ACC/GEO/3
Page22
4. AnyLegislative Programmes orPlans toChange theRegulatory Régime
According totheArticle 48oftheConstitution ofGeorgia theParliament ofGeorgia isthe
highest representative bodyoftheState, which carries outlegislative power. TheArticles 66,67and
68oftheConstitution regulate legislative procedure inGeorgia.
Theparagraphs 2,3and4oftheDecree No.52ofthePresident ofGeorgia of13January 1996
“Onmeasures ofmaintenance oflegislation activities intheexecutive authority ”determine main
directions oflegislation activities.
5. Laws andLegal Acts
SeeAnnex 2foralistoflawsandlegalactsaffecting economic activity andforeign trade in
goods andservices.
Inaccordance withtheparagraph 5ofArticle 38oftheLawofGeorgia "OnNormative Acts"
(29October 1996), anormative actcannot takeeffect before itsofficial publication. Anofficial
publication ofnormative actsofGeorgia isthefirstpublication oftheirentire textin"Sakartvelos
KanonmdeblobisMatsne"(GeorgianLegislationNews)andofficialpublicationofnormativeactsadopted
bytheParliament isthefirstpublication oftheirentire textin"Sakartvelos Parlamentis Utskhebani"
(Georgian Parliament News). Non-publication ofcertain provisions ofnormative actsisallowed in
cases defined bytheLawofGeorgia "OnStateSecret". Inaccordance withtheArticle 61oftheLaw
before publishing ofthe"Sakartvelos Kanonmdeblobis Matsne" (Georgian Legislation News) anofficial
publication ofnormative actswillbeconsidered theirpublication innewspaper "Sakartvelos Respublica"
(Republic ofGeorgia) orinofficial publishing organ ofauthority whoadopts normative acts.
Publicationoflaws,regulationsandadministrativeordersisalegalobligation.Laws,regulations
andadministrative orders cannot takeeffect before theirpublication.
Laws, regulations andadministrative orders canbeapplied retroactively ifthisisdirectly
envisaged bythem. Normative actsestablishing orapproving responsibilities cannot beapplied
retroactively.
Hierarchy ofnormative actsinforce inGeorgia isasfollows:
- TheConstitution ofGeorgia; Constitutional LawofGeorgia;
- International treaty andagreement ofGeorgia;
- Organic LawofGeorgia; Decree ofthePresident ofGeorgia which relates toissues envisaged
bytheArticle 46oftheConstitution ofGeorgia;
- LawofGeorgia; Decree ofthePresident ofGeorgia which doesnotrelate toissues envisaged
bytheArticle 46oftheConstitution ofGeorgia;
- Order ofthePresident ofGeorgia;
- Resolution oftheParliament ofGeorgia;
- Order ofaMinister andheadofother central Governmental authority ofexecutive power.WT/ACC/GEO/3
Page23
International agreements havedirect applicability inthenational legalsystem. Inaccordance
withtheArticle 6oftheConstitution andArticle 20oftheLawofGeorgia "OnNormative Acts",
atreaty andanagreement (notwithstanding theirformandtitle)concluded bytheorgan ofGovernmental
authorityorlocaladministrationwithappropriateorganofGovernmentalauthorityorlocaladministration
ofaforeign country, havesimilar legalforce asanormative actadopted bythisorgan.
6. Description ofJudicial, Arbitral orAdministrative Tribunals orProcedures
Tribunals
Courts ofGeorgia
Courts ofGeorgia are:theSupreme Court ofGeorgia, theSupreme Courts ofAbkhazian and
Ajarian Autonomous Republics, theCityCourt ofTbilisi andregion (town) courts.
Region (town) courts consider allcases ofcivilandcriminal law,cases ofadministrative infringements,
except those cases which inlawareunder thejurisdiction ofanother court.
TheCityCourt ofTbilisi functions withthefollowing composition: Presidium oftheCourt, Court
Board ofCivil LawCases, Court Board ofCriminal LawCases. TheMinistry ofJustice ofGeorgia
determines quantitative composition andappoints members oftheCityCourt ofTbilisi. TheCityCourt
ofTbilisi considers cases byfirstinstance within thelimits ofitspowers, byrules ofcassation, by
rules ofsupervision andproceeding from newly revealed circumstances, supervises theactivities of
regional courts ofTbilisi andcarries outother authority granted bythelegislation.
TheSupreme Courts ofAbkhazian andAjarian Autonomous Republics arethehighest judicial bodies
ofthese autonomous formations. Each ofthem, respectively, isaccountable totheSupreme Council
ofanautonomousrepublic.TheSupremeCourtsoftheautonomousrepublicsfunctionwiththefollowing
composition:PresidiumoftheSupremeCourt,CourtBoardofCivilLawCases,CourtBoardofCriminal
LawCases. Thefollowing isunder thejurisdiction oftheSupreme Courts oftheautonomous republics:
consideration ofcases byfirstinstance within thelimits oftheirpowers, byrulesofcassation, byrules
ofsupervision andproceeding fromnewly revealed circumstances, alsosupervision ofregion (town)
courts ’activities.
TheSupreme Court ofGeorgia isthehighest judicial body ofthecountry, which supervises judicial
activities ofallcourts ofGeorgia. implementation ofjustice inlawcourts ofGeorgia andbyfirstinstance
considers cases determined bylaw.TheSupreme Court ofGeorgia functions withthefollowing
composition: Plenum oftheSupreme Court, Presidium oftheSupreme Court, Court Board ofCivil
LawCases, Court Board ofCriminal LawCases. Thefollowing isunder thejurisdiction oftheSupreme
Court ofGeorgia: consideration ofcases byfirstinstance within thelimits ofitspowers, byrules of
cassation, byrulesofsupervision andproceeding fromnewly revealed circumstances, alsosupervision
ofregion (town) courts ’activities. Itcontrols implementation ofguiding provisions ofthePlenum of
theSupreme Court bycourts ofGeorgia.
Arbitration Court
TheArbitration Court ofGeorgia considers disputes ofeconomic (contractual andownership)
nature between enterprises, organizations andinstitutions, which arelegalpersons.
Thearbitration court system consists of:Supreme Arbitration Court ofGeorgia, Arbitration
Courts oftheautonomous republics.WT/ACC/GEO/3
Page24
IV. POLICIES AFFECTING TRADE INGOODS
1. Import Regulations
(a) Registration requirements forengaging inimporting
Registrationisnotrequiredforthoseengagedinimportingandnosuchregistrationisanticipated.
Allforeign anddomestic, natural andlegalpersons canengage inimportation andexportation
activities.
(b) Characteristics ofnational tariff
According totheLaw"OnCustoms Duty" of27December 1996, thecustoms tariffinGeorgia
isdifferential andisdetermined inpercents fromcustoms value ofgoods. Theratesofcustoms tariff
are0percent, 5percentand12percent.
Import ofthefollowing types ofgoods istaxable with5percentcustoms duty:
- pharmaceutical products, according tothechapter 30oftheGoods Nomenclature ofForeign
Economic Activities, except those mentioned intheeleventh paragraph ofIV.1(c);
- fixedcapital, itsspare andcomplete parts, according tothechapter, 84,85and90oftheGoods
Nomenclature ofForeign Economic Activities;
- goods ofproduction purpose, according tothefollowing items oftheGoods Nomenclature
ofForeign Economic Activities:
3808 10000-insecticides;
3808 20- fungicides;
3808 30100-herbicides;
3808 90000-spraying preparations forseeds;
3904 10000-polyvinylchloride (PVC), notmixed withother substances;
4001 - natural rubber;
4702 00000-wood cellulose, soluble degrees;
5001 - silkcocoon fitting forreeling;
5101 - wool, except combed wool;
5106 &5107 -condenser spunandcombed yarnofshawl notpacked forretail trade;
5203 00000-cotton fibre, combed;
5402 - synthesized complex filaments notpacked forretail trade;
7207 - plain steelandironsemi-finished goods;
7208 - sheet steel;
7216 - plain steelandironangle, shape andspecial profiles;
7408 - copper wire;
7606 - sheet aluminum;
8713,
8714 20000-invalids 'carriages andtheirspare parts.
Import oftherestofgoods istaxable with12percentrateofcustoms duty. Thesame rate
isapplied forimport ofoilproducts, from theCIScountries aswell.
Thecustoms dutyistobepaidbefore customs clearance ofcargoes. Thebasis forpayment
ofthecustoms dutyisthecargo customs declaration.WT/ACC/GEO/3
Page25
Thecurrent trade nomenclature usedisthatofthe1992 version oftheHarmonized System
coded uptothe9-digit level.
Theweighted average leveloftheGeorgian customs tariff isbelow 12percent.
Tariff preferences areaccorded togoods originating inthose countries withwhich Georgia
hassigned afreetrade agreement. Thus, goods imported fromtheCIScountries areexempted from
customs dutyinaccordance withthetreaty creating thefreetrade zonewiththeCIScountries.
AGeorgian Generalized System ofPreferences hasbeenapproved bytheParliament buthas
notyetbeenimplemented.
Itissupposed thatanewCustoms Code willbeconsidered bytheGeorgian Parliament
approximately inMarch.
(c) Tariff quotas andtariff exemptions
There arenotariff quotas onGeorgian imports.
According totheLaw"OnCustoms Duty" of27December 1996, import ofthefollowing goods
isexempted from customs duty:
- imported goods placed inthecustoms warehouses. Thecustoms dutyisimposed according
totheexisting rules upon going outofgoods from customs warehouses intofreeturnover;
inthecaseofdifferent customs regime -according toregulations ofthatregime;
- goods imported forthepurpose ofliquidation ofnatural calamities, accidents andcatastrophes,
alsohumanitarian aid;
- goods, import ofwhich isenvisaged byagreements ongrants, according totherulesdetermined
byadecree ofthePresident ofGeorgia;
- goods, import ofwhich isfinanced attheexpense ofgrants orattheexpense ofpreferential
credits provided byaforeign Statebodyorinternational organization, which contain minimum
25percentofgrantelement. Grant element isdetermined bytheMinistry ofFinance ofGeorgia
withagreement oftheParliament ofGeorgia, bymeans ofdiscounting ofpayments within
frames ofacredit proceeding from therateofadiscount inaccordance withconditions ofa
credit;
- goods, destined forofficial usebyforeign diplomatic andequal tothemrepresentations, also
goods destined forpersonal usebydiplomatic andadministrative-technical staff(including
members offamilies living withthem) ofthese representations;
- goods, temporarily imported totheterritory ofGeorgia;
- rawmaterials andsemi-finished goods, destined forproduction ofgoods forexport within the
limits ofavolume ofpractically exported ready goods. Upon importation ofthementioned
rawmaterials andsemi-finished goods totheterritory ofGeorgia, thecustoms dutymustbe
paidorabankguarantee mustbeprovided, however, upon exportation ofready goods from
theterritory ofGeorgia, thepaidamount mustbereturned tothepayer orabankguarantee
must beabolished according toavolume ofpractically exported ready goods;WT/ACC/GEO/3
Page26
- goods, toatotalvalue oflessthan300Lariineachentry, imported byanatural person from
abroad, according tothelistdetermined bytheResolution oftheParliament ofGeorgia
No.273-II of13June1996;
- wheat, children 'sfoodanddiabetic foodproducts;
- creative andscientific works oftheGeorgian classics andcitizens ofGeorgia published abroad;
- 16names ofpharmaceutical products according tothelistapproved bytheMinistry ofFinance,
Ministry ofHealth Protection andMinistry ofAgriculture andFood ofGeorgia;
- aviation fuel,lubricants andothersupporting technical equipment during international carriages
byairaccording totheinternational rules ofcivilaviation.
(d) Other duties andcharges
Customs procedures andtypes ofservices rendered andrates ofcustoms feesforthem are
established bytheResolution No.333of27April 1993 oftheCabinet ofMinisters oftheRepublic
ofGeorgia andtheDecree No.409ofthePresident ofGeorgia of24June1996. Inaccordance with
these twodocuments, feesfordeclarations, which must belegalized during barter ornon-barter
operations, constitute 0.3percentofcustoms value andapply toallkinds ofgoods. Moreover, the
Resolution provides foranumber oftypes ofcustoms services withtheirrespective rates. Payers of
these feesarenotonlyimporters, butalsoexporters (seeIV.2(b) below).
Customs duties, excises, andVATonimported cigarettes (class I-II)willbelevied onaspecific
rather thanadvalorem basis, beginning 1May(orJune) 1997, forathree months trialperiod. The
specific rateswillbesetatanequivalent leveltoexisting advalorem rates.
Under Article 37oftheVeterinary Law, charges aremade forveterinary border services. A
charge isimposed onquarantine services forcargo heldinquarantine (seesubsection IV.3(c) below),
including fumigation andstorage.
Veterinary services require payment ingeneral, except measures contradicting theprinciples
oftheOffice International desEpizooties (OIE). Veterinary services andother veterinary measures
areimplemented attheexpense oftheowner ofacargo infrontier passing points (customs), according
tothetariffs ofservices requiring payment. Thetariffvalue ofthefrontier veterinary services proceeding
from thevolume ofeachconsignment isthefollowing: during exportation 75-125 Lari, during
importation 70-120 Lari, during transit transportation 60-110 Lari. Theabove-mentioned values may
besupplemented withunforeseen feeswhen cargo issuspected indiseases oftransported animals, in
fitness andtrustworthiness ofanimal produce andrawmaterials orother cargoes subject toveterinary
control, when rulesofitstransportation areviolated, alsointheformofexpenditure forcarrying out
quarantine arrangements andlaboratory examination (byrelevant tariff ofresearch method).
(e) Quantitative import restrictions
Theonlyquantitative restrictions applied atpresent arethose inaccordance withtheLaw"On
Transit andImport ofWastes ontheTerritory oftheRepublic ofGeorgia" of2August 1995. This
prohibits thetransit orimport oftoxicandradioactive industrial anddomestic wastes andotherindustrial
anddomestic wastes forthepurpose oftheirdisposal, burning orinterment. Georgia isnotacontracting
party totheBasel Convention, butitisgoing tobecome inthenearfuture.WT/ACC/GEO/3
Page27
Georgia doesnotintend tointroduce anyadditional restrictions inthenearest future, which
arenotincompliance withtherelevant WTO rules.
Under Article 30oftheVeterinary Law, acountry exporting animals oranimal products to
Georgia must bedeemed dependable asregards dangerous infectious diseases.
Export, import andtransit ofanimals having disease orsuspected inhaving disease, products
andrawmaterials ofanimal origin, forage andother cargoes subject toveterinary control suspected
intrustworthiness andfitness, areprohibited withthepurpose ofprotection ofterritory ofthecountry;
prevention ofimport andspreading ofcommon foranimals andhuman beings acute infectious and
contagious, alsoparasitic diseases; also, inaccordance withtherequirements oftheinternational
conventions, prevention ofexport ofsuchdiseases from Georgia.
Export, import andtransit ofobjects andcargoes subject toveterinary control areallowed on
thebasis ofinformation oftheOffice International desEpizooties (OIE) bythepermission ofthe
Department ofVeterinary andwithagreed routfromtrustworthy countries andregions, provided that
veterinary requirements ofGeorgia areprotected.
(f) Import licensing procedures
Import licences arerequired onlytoprotect public health, safety andtheenvironment, consumer
welfare andnational security. Thelicensing system isnotintended torestrict thequantity orvalue
ofimports.
Licences forimports forspecific products mustbeobtained from theMinistry ofTrade and
Foreign Economic Relations ortheMinistry ofHealth Protection, withtheconsent oftherelevant
ministryordepartment(seeAnnex3).Theseproductsincludechemicalsusedinagriculture,wildanimals
andplants, medicines, arms, explosives andnuclear materials.
(g) Other border measures
There arenoother border measures having effects similar tothose listed under IV.1(e) above.
(h) Customs valuation
Instructions ontherules ofdetermining customs value ofgoods imported intotheterritory
ofGeorgia were adopted bytheResolution No.843oftheCabinet ofMinisters oftheRepublic of
Georgia of5December 1994.
Thesystemofcustomsvaluationisbasedongeneralprinciplesandmethodsofcustomsvaluation,
subject onlytotheprovisions foranti-dumping andcountervailing duties (seeIV.1(m-n) below) which
havenever beeninvoked. Theyprovide forsixmethods ofvaluation, ofwhich thatbased ontransactions
value istheprimary. (SeeAnnex 4.)
(i) Other customs formalities
Importers mustpresent animport declaration, accompanied bytheimport contract, commercial
invoice and,where required, import licences, certificates oforigin, quarantine licences and/or other
documents forspecific types ofgoods.WT/ACC/GEO/3
Page28
(j) Pre-shipment inspection
Georgia doesnotregularly usepre-shipment inspection services, nordoesithaveanylegal
regulations onpre-shipment inspection. However, insome cases pre-shipment inspection hasbeenused
byprivate sector importers tomeet consumer protection requirements andtechnical standards.
Pre-shipment inspection forveterinary controls isalsoused(seesubsection IV.3(c)).
(k) Application ofinternal taxes onimports
Most imports ofgoods aresubject toVAT andsome, also,toexcise duties. These arelevied
atthesame ratesasonequivalent goods produced domestically.
TherateofVAT forimport ofgoods is20percentofthecustoms value ofgoods. Import
ofwheat orryebread, wheat, rye,orwheat orryeflour istaxed atarateof10percent.
Import ofthefollowing types ofgoods isexempted from VAT:
- postage stamps (except forcollectors 'items);
- national andforeign currency (except forthatusedfornumismatic purposes), andofsecurities;
- valuables thatareconfiscated orhavenoowner, treasure andbought-up valuables, aswell
asvaluables thatareinherited bytheState, theproceeds from which gototheBudget;
- goldtobetransferred totheNational Bank ofGeorgia;
- gasoline anddiesel fuel;
- books andjournals onscience, artandfiction, theauthors ofwhich areGeorgian citizens;
- school books thatareapproved bytheMinistry ofEducation ofGeorgia inagreement with
theMinistry ofFinance;
- goods thataregiven toStatebodies ofGeorgia forliquidation ofnatural disasters, accidents,
andcatastrophes, orforthepurpose ofhumanitarian assistance andcharitable purposes;
- goods, contemplated bycontracts ongrants, approved according totheprocedure specified
byadecree ofthePresident ofGeorgia;
- goods, financed bygrants orconcessional loans, containing aminimum 25percentgrant
element,providedbybilateralormultilateralinternationalorganizations.TheMinistryofFinance
determines thegrant element ofaloanbydiscounting thepayments under theloanusing a
discount rateappropriate totheterms oftheloanandthecurrency inwhich loanisissued;
- medicines specified inchapter 30oftheHarmonized System;
- medical technology specified incodes 9018 through 9022 oftheHarmonized System;
- wheat andbabyfood;
- fixedassets andspare partsdescribed inchapters 84,85and90oftheinternational harmonized
classification system;WT/ACC/GEO/3
Page29
- goods brought across theterritory ofGeorgia intransit;
- re-imported goods;
- goods,importedbyphysicalpersonsinanamountthatisbelowtheexemptthresholdforcustoms
duty;
- re-import ofgoods usedintheactivity ofdiplomatic representative offices andotherinstitutions
ofGeorgia inforeign countries;
- temporary entry ofgoods ontotheterritory ofGeorgia;
- import ofgoods intended fortheofficial useofforeign diplomatic andsimilar representative
offices, andalsoforthepersonal useofdiplomatic, administrative, andtechnical personnel
ofthese representative offices, including family members living withthem, totheextent that
theexemption isrequired byrelevant international agreements towhich Georgia isaparty;
- goods, imported byaperson whoexported therawmaterials forthepurpose oftheirprocessing;
- rawmaterials guaranteed bycollateral forthepurpose oftheirprocessing andexport;
- goods guaranteed bycollateral intended forre-export.
TheGeorgian Parliament iscurrently discussing thenewdraftLaw"OnValue Added Tax"
where theproblem ofbringing Georgian system ofVAT intolinewithArticle 1oftheGATT 1994
willbeenvisaged.
Alistofallproducts subject toexcise dutyandtheirratesaregiven insection II.2.above.
(l) Rules oforigin
Therules oforigin arecontained intheCustoms Code.
TheGeorgian legislation requires theindication ofthecountry oforigin ofgoods (bothimported
andofdomestic production). Acertificate confirming thecountry oforigin ofgoods isnecessary for
thedetermination oftheregime tobeapplied toimported goods. Therefore, itisrequired onlyfor
goods imported from thecountries included inthepreferential programme.
Inparticular, theCIScountries havetheunified formofcertificate C-1onthebasisofwhich
preferences stipulated bytheAgreement concerning theestablishment offreetrade zoneareapplied
tothem. TheAgreement onthegeneral rules ofdetermination ofthecountry oforigin ofgoods was
concluded among theCIScountries.
Certificate oforigin must beissued bythecompetent authority ofthecountry oforigin.
Methods ofdetermination ofacountry oforigin ofgoods aregiven intheDecree of
21October 1992 oftheRepublic ofGeorgia "OnCustoms Tariff", according towhich acountry of
origin isacountry where goods were completely produced orsufficiently processed.
Thefollowing types ofgoods areconsidered ascompletely produced inthecountry:
- minerals extracted ontheterritory ofthiscountry oritseconomic zone;WT/ACC/GEO/3
Page30
- plant products grown onthesoilofthiscountry;
- livestock bredinthiscountry;
- livestock products made inthiscountry;
- products ofhunting, fishery andseafishery produced inthiscountry;
- seafishery products obtained andprocessed intheworld ocean bymeans ofshipsofthiscountry
orships leased (freighted) bythiscountry;
- secondary rawmaterials andwastes obtained from manufacturing andother operations
implemented inthiscountry;
- goods produced inthiscountry onlyfrom products mentioned in1-7paragraphs.
Goods areconsidered sufficiently processed inthecountry if:
- declared goods areclassified bydifferent tariff position thanmaterials andarticles produced
inthirdcountries which areusedfortheirproduction;
- costofdeclared goods exceeds costofmaterials andarticles produced inthird countries by
fixed amount;
- defined technological operations wereperformed withmaterials andarticles produced inthird
countries which were usedforproduction ofdeclared goods.
Goods cannot beconsidered sufficiently processed ifthefollowing technological operations
areused:
- protection ofgoods during storage andtransportation;
- preparation (distribution and/or formation ofconsignments, sorting, re-packing) ofgoods for
storage andtransportation;
- simple assembling operations;
- mixing ofgoods (components) without giving tofinalproduct suchcharacteristics, which
essentially defer itfrom original consisting parts.
(m-n) Anti-dumping andcountervailing regimes
Georgia hasnever applied anti-dumping orcountervailing duties.
Under existing customs legislation (Decree oftheCouncil ofStateoftheRepublic ofGeorgia
of21October 1992"OnCustoms Tariff" -Article 10-13) suchduties maybelevied. Georgia intends
induecourse tointroduce thenecessary legislation thatwillconform toWTO rules.
According totheDecree oftheCouncil ofStateoftheRepublic ofGeorgia of21October 1993
"OnCustoms Tariff", thecontents ofanti-dumping andcountervailing customs duties isformulated
asfollows:WT/ACC/GEO/3
Page31
Anti-dumping customs duties
Anti-dumping customs duties areimposed inthefollowing cases:
- iftheprice ofgoods imported intothecustoms territory ofGeorgia isessentially lower than
theircompetitive priceintheexporting country inthemoment ofexport, ifsuchimport damages
orthreatens todamage domestic producer ofsimilar ordirect competitive goods, orhampers
organization andextension ofproduction ofsimilar goods inGeorgia;
- iftheprice ofgoods exported fromthecustoms territory ofGeorgia inthemoment ofexport
isconsiderably lower thantheprice ofsimilar ordirect competitive goods ofother exporters
inthemoment ofexport, ifsuchexport damages orthreatens todamage interests ofGeorgia.
Therateoftheanti-dumping customs dutymustnotbemore thanthedifference between the
competitive wholesale price ofdumping object intheexporting country inthemoment ofexport and
itsexport price inthemoment ofentering thecustoms territory ofGeorgia, orthedifference between
thepriceofdumping object exported fromtheterritory ofGeorgia anddirect competitive goods 'average
export price.
Rates ofanti-dumping customs duties areestablished forevery separate case bythe
Customs-Tariff Council existing under theGeorgian Government.
Countervailing customs duties
Countervailing customs duties areimposed inthefollowing cases:
- ifdirect orindirect subsidy hasbeenusedforproduction orexport ofgoods entering thecustoms
territory ofGeorgia, ifsuchimport damages orthreatens todamage domestic producers of
similar ordirect competitive goods, orhampers organization andextension ofproduction of
similar goods inGeorgia;
- ifdirect orindirect subsidy hasbeenusedforproduction orexport ofgoods leaving thecustoms
territory ofGeorgia, ifsuchexport damages orthreatens todamage interests ofGeorgia.
Rates ofcountervailing customs duties must notbeabove theexposed amount ofasubsidy.
Rates ofcountervailing customs duties areestablished forevery separate casebythe
Customs-Tariff Council existing under theGeorgian Government.
(o) Safeguard regime
There iscurrently nolegislation toimplement asafeguard regime, butinforthcoming Law
ofForeign Trade there willbeprovisions foraWTO-consistent safeguard regime.
(p) Reference prices
Asystem ofminimum reference prices hasbeenintroduced for20product groups. Thesystem
isactually oneofcompulsory minimum import prices. Inaddition, most oftheproducts inthelist
areheterogeneousratherthanhomogeneousandinternationallyquotedpricesareunavailableorirrelevant
formostofthem. TheMinistry ofEconomy isresponsible forpreparing andapproving thelistofgoods
andprices, following consultation ofParliament (Chairmen ofthetwoeconomic commission). The
problemsencounteredtodatearetypical:somepricesareabovelowcostsuppliers(redwineforinstance;WT/ACC/GEO/3
Page32
ref.priceUS$3/litre); some other prices (inparticular flour) arebelow international prices andalmost
allsuppliers/importers havereacted byproducing invoices exactly attheminimum pricelevel. Pressures
toincrease thenumber ofgoods covered bythesystem aremounting (agroup of90newproducts
wassubmitted totheMinistry ofEconomy).
Thefollowing stepshavebeenagreed towards thegradual elimination oftheminimum import
prices:
- ithasbeenagreed thatnoadditional products willbeadded totheexisting listof20product
groups;
- technical assistance tofacilitate access byCustoms, bytheMinistry ofEconomy andbythe
Ministry ofTrade andForeign Economic Relations toon-line information systems above the
international prices willbeprovided overthenextthree months;
- aspartoftechnical assistance SATAC, theCustoms Department willstrengthen its
intelligence/investigation unitandprepare revised procedures forintelligence gathering, for
investigations, andintroduce expostaudits ofenterprises/importers (by30June1997);
- theWorld Bank willshare withtheMinistry ofEconomy, withtheMinistry ofTrade and
Foreign Economic Relations, andwiththeCustoms Department information onpre-shipment
inspection. Apresentation ofthestrengths andtheweaknesses oftheseservices willbeorganized
during thenexttwomonths;
- thesystem ofminimum import prices willbeeliminated bytheendof1997.
2. Export Regulations
(a) Registration requirements forengaging inexporting
According totheDecree No.710of3November 1996ofthePresident ofGeorgia "OnFurther
Liberalization ofExport andImport", therequirement toregister export contracts foranytypeofgoods
waseliminated.
Forstatistical purposes, allexporting legal andnatural persons must beregistered withthe
State Department ofSocio-Economic Information andmust present adeclaration onthenature and
value ofexports totheCustoms Department. Theprocess ofregistration withtheState Department
ofSocio-Economic Information isdecentralized, i.e.theentrepreneur maybeincluded inthebusiness
register ofanyregional statistical office afterhisregistration inalocalcourt. Forregistration inthe
statistical register theentrepreneur mustpresent acopyofthecourt'sdecision. These provisions are
applied toall,regardless ofnationality andwhether ornottheyarealegalornatural person.
Cargo customs declaration ispresented byexporters totheregional customs office before actual
export. Customs clearance ofcargoes takes place intheregional customs offices. Adeclaration is
presented tothecentral Customs Department afterfinishing customs clearance, whatisconfirmed by
setting stamps "passing ispermitted" and"taxation control", aswellasbysetting personal number
sealsofcustoms inspectors andaffixing appropriate signatures toadeclaration.
Thebasic purposes ofthedeclaration istotakestock ofexport andimport ofgoods andto
control extra charge ofcustoms duties totheState budget.WT/ACC/GEO/3
Page33
Cargo customs declaration 'sformenvisages 54questions (columns) andindication by4letters,
onwhich declarers andpartially customs officers mustgivetheiranswers andmake appropriate notes.
From thepoint ofviewofthecontents, these questions conditionally canbeunited intogroups:
- information forconducting ofcustoms statistics ofexternal trade:
- direction ofgoods flows (export, import);
- country oforigin inthemoment ofimport;
- country ofdestination inthemoment ofexport;
- statistical costofgoods, itscode;
- weight ofgoods (net);
- goods 'additional sizeunitandquantity inthese units;
- category ofgoods 'consignor (consignee);
- themoment ofstock-taking ofgoods export (import);
- information forcontrol ofextra charge ofcustoms duties totheState budget:
- timing ofdelivery ofgoods;
- contract value ofgoods;
- customs value ofgoods;
- preferences;
- customs duties andcalculation offees;
- information onresponsibility forfinancial regulation before customs:
- requisites oflegal andnatural persons responsible before customs forfinancial
regulation;
- bankrequisites oflegalandnatural persons responsible before customs forfinancial
regulation.
- otherinformationwhichprovidesanopportunityforcontrollingthelegalityofcustomsclearance
ofcargoes andtheirtransportation.
(b) Customs tariff nomenclature, types ofduties, dutyrates
Thenomenclature isthesameasforimports. Aprocedural feeforcustoms services amounting
to0.3percentofcustoms value butnoduties levied onexports (seeIV.1(d) above). AsinallCIS
countries, VATischarged onexports tootherCIScountries. VATisnotcollected onexports tonon-CIS
countries.
(c) Quantitative export restrictions, including prohibitions, quotas andlicensing systems
BytheResolution No.744oftheCabinet ofMinisters ofGeorgia of30November 1995, the
export oftimber (logs) requires alicence topreserve scarce resources forthenational industry.
There arenoother export prohibitions orrestrictions except those toprotect public health,
consumer welfare, thenational environment, thenational patrimony andnational security. Theexports
ofrawmaterials ofanimal andplantorigin formedicines, substances received fromhuman organism;
Caucasian firseeds; collections ofmaterials ofbiology, mineralogy, archaeology, paleontology,
ethnography andnumismatics aresubject tolicensing.
Quantitative element doesnotinfluence thelicensing system.WT/ACC/GEO/3
Page34
According totheResolution No.744of23November 1995 oftheCabinet ofMinisters of
Georgia andtheResolution No.637-II of21February 1995 oftheParliament ofGeorgia, export of
artwork andantiques ofmuseum value (CN9701-970300000, 970600000), weapons andgunpowder
(CN930110000,930200,9305,9306),ferrousandnon-ferrousscrapmetals(CN7204,740400,750300,
760200,780200,790200000,800200000,810191900,810291900,810310900,810420000,810510900,
810600100, 810710000, 810810900, 810910900, 811000190, 811100190, 811211000, 811220390,
811230100, 811240190, 811291390, 811300100) isprohibited.
(d) Export licensing procedures
TheMinistry ofTrade andForeign Economic Relations issues export licences, except inthe
caseofmedicines andmedical supplies inwhich casethelicences areissued bytheMinistry ofHealth
Protection. Thesame procedure isusedforallapplicants whether individuals, orprivate orState
enterprises. Foralistofthegoods subject toexport licensing requirements seeIV.2(c) above and
Annex 3(a).
(e) Other measures
There arenofurther measures restricting exports.
(f) Export financing, subsidy andpromotion policies
Atpresent therearenoofficial orother export financing arrangements (other thannormal bank
loans) orsubsidies.
(g) Export performance requirements
Nosuchrequirements existinGeorgia.
(h) Import dutydrawback schemes
Nosuchschemes existinGeorgia.
3. Internal Policies Affecting Foreign Trade inGoods
(a) Industrial policy
Georgia hasnoformal industrial policy. Thegeneral goalistocreate amarket economy through
theprivatization ofpublicly-owned commercial enterprises, through thederegulation ofprices and
through attracting foreign investment. Prices have been completely deregulated butcertain State
enterprises haveproved difficult tosell.However theynolonger receive subsidized credit from the
banking system orthegovernment, though some havefinanced theiroperations through arrears on
taxes andwages andthepayment forenergy. Thegovernment ispreparing action plans forthelargest
loss-making State enterprises.
Foreign direct investment (FDI) isneeded toregenerate thecapital stock, bring inmuch needed
foreign exchange andleadtothetransfer oftechnical know-how andmanagerial andprofessional skills.
TodatetheflowofFDIhasbeenverylimited, because oftheeconomic breakdown thatfollowed the
disintegration oftheSoviet Union, partly because ofthesecurity situation andbecause oftheweakness
oftheeconomic infrastructure, especially energy supplies. However neither therecent improvement
intheeconomic outlook andinthesecurity situation, northeopportunities provided bytheprivatization
process, hasledtoasharp increase inFDI. TheMinistry ofTrade andForeign Economic Relations
estimates thattotalFDIsince independence hasbeenoftheorder ofonlyUS$24million.WT/ACC/GEO/3
Page35
(b) Technical regulations andstandards
Georgian standards andcertification requirements arenotintended todistort tradeorestablish
technical barriers which hamper trade. Bothdomestically-produced andimported goods, regardless
ofcountry oforigin, mustcomply withthesamerequirements onstandards andcertification. Annex 5
summarizes thelegislation andprocedures inthisfield.
Thenational body ofstandardization, metrology andcertification inGeorgia istheState
DepartmentofGeorgiaforStandardization,MetrologyandCertification(hereaftercalled"Sakstandarti").
Currently "Sakstandarti" runscentres working inthestandardization, metrology andcertification in
Tbilisi andseven provincial centres. Statesupervision ofstandard requirements andmetrology norms
throughout Georgia iscarried outby"Sakstandarti" through itslocalorganizations.
Intergovernmental standards oftheCIScountries arewidely usedinGeorgia. However, Georgia
hastheintention ofmoving fromtheuseofoldStatestandards totheuseofnewinternational standards
stepbystep:forfoodproducts, environmental protection, safety oflabour protection, consumers 'and
industrial products. Thetimetable forthischange-over depends onfinancing ofworks inthesphere
ofstandardization.
TheMinistries ofConstruction andUrbanization, Protection ofEnvironment andNatural
Resources, Health Protection andother departments areincharge ofensuring product safety
requirements, requirements forconstruction norms andregulations andsanitary norms andregulations.
Toeliminate technical obstacles intrade, "Sakstandarti" hasintroduced asystem ofcertification and
documentation. Thedocuments havebeenharmonized withtheanalogous European documents and
havebeenrecognized bydepartments ofstandardization, metrology andcertification inWestern Europe.
Western countries have recognized 55certificate bodies and78testing laboratories established in
educational, research-scientific andother departments withtheassistance of"Sakstandarti".
TheMinistries ofHealth Protection andAgriculture andFood areactively involved inthe
certification procedure, inparticular intesting health, hygiene andveterinary products andthe
certification ofbread. TheMinistry ofProtection ofEnvironment andNatural Resources andtheState
Inspection forTechnical Supervision areinvolved incertification related toenvironmental protection
andsafety oftechnical processes.
"Sakstandarti" isamember oftheInterstate Council ofWestern Countries forStandardization,
Metrology andCertification. WiththehelpoftheCouncil andonthebasisofgovernmental agreements
Georgia iscooperating withwestern countries inthese three areas.
Itissupposed thatinthenearest future "Sakstandarti" willbecome acorrespondent member
intheInternational Organization forStandardization (ISO).
(c) Sanitary andphytosanitary measures
Georgian sanitary andphyto-sanitary standards areintended solely forthepurpose ofprotecting
thehealth ofhuman, animal andplant lifeandnottocreate technical barriers totrade ortoprotect
domestic producers.
TheStateSanitary Service andDepartment ofHygiene under theMinistry ofHealth Protection,
Sanitary, Quarantine andSupervision Department oftheState Inspection onPlant Quarantine and
Department ofVeterinary under theMinistry ofAgriculture andFood incooperation withtheBorder
Veterinary, Sanitary andPhyto-sanitary Service undertake theassessment ofcompliance toregulations.WT/ACC/GEO/3
Page36
Under paragraph 5oftheJointDecree (No.286;53;309/o; 55)oftheCustoms Department
andtheMinistries ofHealth Protection andAgriculture andFood, shipments subject toplantquarantine
areheldinquarantine intheevent ofsuspicion concerning infectious diseases untillaboratory research
hasbeenundertaken. Iftheshipment isfound tobeinfested orinfected anditcannot bedisinfested
ordisinfected, theshipment mustbereturned tothecountry oforigin ordestroyed withtheowner 's
consent.
Forshipments ofgoods covered byplantquarantine regulations, theimporter, which maybe
alegal ornatural person, must obtain alicence from theState Inspection ofPlant Quarantine. The
same applies toshipments forre-export ortransit.
Traded goods covered bythequarantine regulations include:
- agricultural products, timber, seeds andseedlings, plants andplant parts, andplant products
thatmaycarry infectious diseases;
- hides andunprocessed wool;
- mushrooms, bacteria, viruses, nematodes andinsects onliving cultures;
- collections ofinsects, which maybring plant diseases, herbaria andseedcollections;
- agriculturalmachinery,aggregatesforlanddevelopment,vehicles,vessels,packagingmaterials,
industrial plant andsoilsamples which maycarry plant diseases.
Pre-shipment inspection, leading toaninternational veterinary certificate, mustbecarried out
whereappropriate.TheStateBorderVeterinarySupervisionInspectionchecksallimportsofliveanimals,
meatandfish,animalandfishproducts,animalfodderandfeedsupplementsandveterinarypreparations.
Anewlawonphyto-sanitary controls hasbeensubmitted totheParliament. Thiswillreflect international
standards asestablished bytheEuropean Plant Protection Organization. Similarly anewveterinary
lawwillreflect thestandards established bytheOffice International desEpizooties (OIE).
(d) Trade-related investment measures
There arepresently nosuchtrade-related investment measures inGeorgia.
(e) State-trading practices
Alleconomic operators havetherighttocarry outforeign trade activities. Theexisting State
enterprises donothaveanyexclusive rights orspecial privileges intheirpurchases andsales, including
imports andexports. Theyactpurely onthebasisofcommercial considerations inanon-discriminatory
manner consistent withArticle XVII ofGATT 1994.
(f) Freezones
Atpresent there arenofreezones ontheterritory ofGeorgia. Noregulations existrelating
tofreezones.WT/ACC/GEO/3
Page37
(g) Freeeconomic zones
Atpresent there arenofreeeconomic zones inGeorgia. Adraftlawonfreeeconomic zones
isunder consideration intheParliament ofGeorgia. After thecreation oftheappropriate legalbasis
theGovernment ofGeorgia intends toestablish suchzones inPotiandBatumi.
Under thedraftLawcurrently before theParliament, goods produced orimported intofree
economic zones under thespecial taxandtariffregimes envisaged forthesezones aresubject tonormal
customs formalities, taxes andtariffs when entering therestofGeorgia.
(h) Trade-related environmental policies
Allenvironmental testing, certification andauthorizing requirements areequally applicable
tobothforeign anddomestically-produced products andnonehavebeenestablished todiscriminate
against foreign products orprotect localproducers. Seedetails ofexport andimport licensing systems
(Annex 3and3(a)). Thespecial regime forCaucasian firseeds isdescribed under IV.2(c) above.
(i) Mixing regulations
There arenomixing regulations inGeorgia.
(j) Government-mandated counter-trade andbarter
Thereisnosuchgovernment-mandatedactivity.Anagreementontradeandeconomiccooperation
wassigned between thegovernments ofGeorgia andoftheRussian Federation for1996-1997, inwhich
thebarter ofagricultural goods inexchange forindustrial goods bytheprivate sectors ofeachcountry
wasenvisaged. However nosuchcounter-trade orbarter hasyettaken place.
(k) Trade agreements leading tocountry-specific quotas allocation
There arenosuchquotas effective inGeorgia, either withrespect toimports ortoexports.
(l) Government procurement practices
Government procurement, whether byministry, agency orother governmental body, iscarried
outbycompetitive tender under theDecree No.162of11February 1996ofthePresident ofGeorgia.
Georgia intends tojointheGovernment Procurement Agreement infuture.
Statisticalinformationongovernmentprocurementisnotavailable,duetothefactthatestimation
ofthisinformation isnotmade bytheState Department ofSocio-Economic Information.
Alawongovernment procurement doesnotexist, itisunder theprocess ofelaboration.
Nowadays, theResolution No.264oftheCabinet ofMinisters oftheRepublic ofGeorgia of
30March 1993 "OnDelivery ofProducts andGoods forStateNeeds oftheRepublic ofGeorgia" is
inforce, which provides forthatgovernment procurement must beconducted bycontracts. Orders
forgovernment procurement aredistributed tosupplier enterprises onthebasis oftenders.
Central agency orother appropriate structure which administers thegovernment procurement
doesnotexist. Each ministry orinstitution performs thegovernment procurement from budget and
non-budget assets allotted tohim.Therules ofprocurement, ineachconcrete case, aredetermined
bytheorganofStateadministrationorcompanywhoisassignedtoperformthegovernmentprocurement.WT/ACC/GEO/3
Page38
Central agency which controls thelegalaspects ofthegovernment procurement doesnotexist
inGeorgia.
Thegeneral ruleofdispute consideration onaward ofcontract doesnotexist. Anewlawon
government procurement willinclude allprovisions connected withdispute settlement.
General requirement onpublication oftender andcontract award notice doesnotexist.
Theconducting ofclosed tenders isstipulated bythedraftnormative actsofthegovernment
procurement,whichimpliesthepreliminaryselectionofthecandidaturesofsuppliers.Theannouncement
ofclosed tenders isprovided forinthatcases when itisrequired bytheinterests ofStatesecurity or
byimplementation oflocalentrepreneurs 'supporting policy. Theconducting ofopentenders isalso
envisaged bythedraftnormative acts.
During awarding ofcontract theattention isattached to:theprice andquality ofgoods tobe
purchased, producer 'simage andfinancial situation, terms ofrealization ofcontract. Inthecaseof
necessity aneconomic advantage oftheapplication isalsoevaluated.
Freemarket prices areusedduring government procurement, because therearenotpractically
suchprices inGeorgia, which areregulated bythegovernment. Proceeding from therealsituation
ofGeorgian local industry, themaximum distribution ofgovernment procurement inGeorgia is
considered asexpedient. BytheDecree No.244ofthePresident ofGeorgia, of31March 1996, the
procurement ofclothing andbelongings forforce structures isenvisaged inrelevant Stateenterprises
ofthecountry (enterprises oflightindustry).
Foreign suppliers canparticipate intenders. Georgia doesnothaveprocurement agreements
withthirdcountries. TheResolution No.264oftheCabinet ofMinisters oftheRepublic ofGeorgia
of30March 1993 "OnDelivery ofProducts andGoods forStateNeeds oftheRepublic ofGeorgia"
doesnotdiscriminate theparticipation offoreigners inthegovernment procurement.
(m) Regulation oftrade intransit
Goods transported bytransit through theterritory ofGeorgia areexempted fromcustoms duty,
VAT andexcise taxes. Thisfollows theLaw"OnCustoms Duty" of27December 1996, theLaw"On
Value Added Tax" of24December 1993, andtheLaw"OnExcise" of24December 1993.
4. Policies Affecting Foreign Trade inAgricultural Products
(a) Imports
Thecustoms tariffs at0,5and12percentofthecustoms value apply toagricultural aswell
asindustrial goods (seesubsections IV.1(b) and(c)). Noother border measures areapplied to
agricultural goods other thanthesanitary andphyto-sanitary measures described insub-section IV.3(c)
above.
(b) Exports
Thereisnospecialexportregimeapplicabletoagriculturalgoodsandnoexportsubsidymeasures
areinplace.WT/ACC/GEO/3
Page39
(c) Export prohibitions andrestrictions
There arenoexport prohibitions orrestrictions otherthanthosementioned insubsection IV.2(c)
above, noneofwhich apply toagricultural products perse.
(d) Export credits, export credit guarantees orinsurance programmes
There arenoexport credits other thanthose available from thecommercial banks. There is
nosystem ofexport credit guarantees andanyinsurance cover mustbeprivately arranged bytheexporter
through theprivate sector.
(e) Internal policies
TheGovernment ofGeorgia isworking incooperation withtheWorld Bank tocomplete the
finalstages ofconversion ofthecollective agricultural system tothatofamarket system. Thisincludes
landreform,privatizationoffarmsandtheagro-industrialenterprises,competitivemarketsindistribution
services aswellasforinputs andoutputs andthedevelopment ofresearch, education andextension
services. Wholesale markets arebeing developed withthehelpoftheEuropean BankforReconstruction
andDevelopment. TheUnited Kingdom Know-How Fund isassisting inmarketing programmes for
teaandcitrus fruit, therehabilitation ofthemilksector andinother extension programmes. The
European Union TACIS programme issupplying technical assistance inlandreform, cadastration,
developing farmers 'associations, improving training andinformation services, and,through itsregional
Transcaucasus project, improving theseedsector andsupplying advice onagricultural investment and
regulatory boards.
Aproject using European Union counterpart funds (CPF), through thenational budget, isaimed
atintroducing asystem ofcommercial bankcredit intheagricultural sector. Thisinvolves supplying
short-term working capital totraditional suppliers ofinputs offertilizers, seeds, andenergy products
sothattheiractivities might beresumed andsupplies tofarmers ensured. Details ofthisprogramme
aregiven intheadditional tabletoTable DS1intheAppendix onagricultural support.
Inaddition European Union CPFarebeing used, through thecommercial banking system,
forshort-term credits (generally about three months) tograin (wheat andmaize) traders andgrain
producers. Thisinvolves loans atinterest ratesofapproximately 25percent(including thecommercial
banks 'margins). Thecredit riskiswiththecommercial banks cooperating inthescheme. Theofficial
estimate forinflation in1996 is18percent, sotherealrateofinterest ispositive. Itisdifficult to
assess theequivalent market rateofinterest forsuchloans, astheyarenotreadily available, butit
islikely tobeoftheorder of45to50percent.In1996, thefirstyearofoperation, GEL10.6million
isbudgeted forthispurpose.
Through thenational budget, GEL6million hasbeenbudgeted forcredits togrape producers
in1996. Theloans areadministered bythecommercial banks. Therateofinterest isabout 24percent,
including abankmargin ofnotmore than6percent. Thisisthefirstyearinwhich thescheme has
operated.
TheGeorgian Government doesnotengage inagricultural subsidies through price support,
direct payments tofarmers -whether related ornottolevels ofproduction -orinsubsidized credit
arrangements, other thantogrape producers asexplained above. Nobudgetary resources aremade
available toassist theresidual Statefarms sector. TheGeorgian Government doesnotprovide anyexport
subsidies.WT/ACC/GEO/3
Page40
5. Policies Affecting Foreign Trade inOther Sectors
(a) Textiles regime
Under theagreement between theEuropean Community andGeorgia of17November 1993
concerning exports oftextile products falling under Chapters 50to63oftheCombined Nomenclature
from Georgia totheEuropean Union, quantitative limits onexports maybeimposed when thelevel
ofGeorgian exports exceeds percentages ranging from 0.35percent to4percent ofthe
EuropeanUnion'stotalimportsofthepreviousyeardependingontheproductinquestion.Consultations
areentered withaviewtoestablishing therestraint level. While those consultations areinprogress
Georgia undertakes tosuspend exports orlimitthem tothelevel indicated bytheEuropean Union.
Iftheconsultations donotreach asatisfactory conclusion, theEuropean Union mayintroduce adefinite
quantitative limit.
Intheevent ofatextile product being exported fromGeorgia totheEuropean Union ataprice
“abnormally lower thanthenormal competitive level”andthatiscausing orthreatening tocause serious
injury toEuropean Union producers, theEuropean Union mayrequest consultations andGeorgia shall
takethenecessary measures toremedy thesituation. Ifconsultations donotresult inasatisfactory
outcome, theEuropean Union mayrefuse consignments oftheproduct inquestion atabnormally low
prices.
These provisions havenever beeninvoked since theagreement wassigned andquantitative
limits havenotbeenapplied.
(b) Policies affecting foreign trade inother major sectors
Under Article 17ofThePartnership andCooperation Agreement between theEuropean
Communities andGeorgia, trade inproducts covered bytheTreaty establishing theEuropean Coal
andSteel Community areexempted from theprovision thattrade between theEuropean Union and
Georgia befreeofquantitative restrictions Acontact group oncoalandsteelmatters istobesetup
andexchange, onaregular basis, information onallcoalandsteelmatters ofinterest totheparties.
Under Article 18ofThePartnership andCooperation Agreement between theEuropean
Communities andGeorgia, tradeinnuclear materials willbeconducted inaccordance withtdbetween
theEuropean Atomic Energy Community andGeorgia.
V. TRADE-RELATED INTELLECTUAL PROPERTY REGIME
1. General
(a) Intellectual property policy
Theprotection ofintellectual property rights isanessential element ofGeorgia 'seconomic
policy. TheArticle 23oftheConstitution ofGeorgia provides forthattheintellectual property rights
areinviolable.
Intellectual property protection system ofGeorgia isdesigned tocomply withtherequirements
ofleading multilateral treaties inthisfield, including theTRIPS Agreement, Paris Convention forthe
Protection ofIndustrial Property, BernConvention fortheprotection ofLiterary andArtistic Works.
(b) Responsible agencies forpolicy formulation andimplementation
ThePatentOfficeofGeorgia(Sakpatenti)isresponsibleformattersinvolvingindustrialproperty
(inventions, utility models, industrial designs, trade marks, service marks).WT/ACC/GEO/3
Page41
ThePatent Office ofGeorgia willbealsoresponsible formatters involving appellations of
origin andlayout designs ofintegrated circuits.
TheCopyright Agency isresponsible formatters involving copyrights andneighbouring rights.
TheMinistry ofAgriculture isresponsible formatters involving plant variety protection.
(c) Membership ofinternational intellectual property conventions andofregional orbilateral
agreements
Georgia isamember ofWIPO.
Georgia isaparty tothefollowing multilateral treaties:
- Paris Convention fortheProtection ofIndustrial Property (since 18January 1994);
- Patent Cooperation Treaty (since 18January 1994);
- BernConvention fortheProtection ofLiterary andArtistic Works (since 15May1995).
Thefollowing bilateral agreements inthefieldofindustrial property areinforce:
- Agreement between theGovernment ofGeorgia andtheGovernment ofUzbekistan onthe
cooperation inthefieldoftheindustrial property protection (since 28May1996);
- Agreement oncooperation between thepatent offices ofGeorgia andAustria.
Georgia hasintention tojointhefollowing international conventions within nextfiveyears:
- Madrid Agreement Concerning theInternational Registration ofMarks;
- Protocol Relating totheMadrid Agreement Concerning theInternational Registration ofMarks
(1989);
- Rome Convention fortheProtection ofPerformers, Producers ofPhonograms andBroadcasting
Organizations (1961);
- Budapest Treaty ontheInternational Recognition ontheDeposit ofMicroorganisms forthe
Purposes ofPatent Procedure;
- UPOV (Geneva Act,1991).
(d) Application ofnational andm.f.n. treatment toforeign nationals
Inaccordance withtheParis Convention fortheProtection ofIndustrial Property, Georgia
grants national treatment intheprotection ofindustrial property tonationals ofsignatory States ofthe
Convention (Statute OnInventions, Statute OnIndustrial Designs, Statute OnTrademarks). National
treatment inthefieldoftheprotection ofCopyright under theBernConvention isalsoprovided.
Upon accession toWTO Georgia willgrantnational andm.f.n. treatment tomembers ofWTO.WT/ACC/GEO/3
Page42
(e) Feesandtaxes
State feesforpatenting inventions, utility models, industrial designs andforregistration of
trade marks arethefollowing:
- filing feefor invention US$40;
utility model US$40;
industrial design US$40;
trademark US$70foroneclass+US$35foreachadditional
classofgoods/services.
- forgrantingapatentforinventionandmaintainingintoforcefortwoyears-US$200,increasing
scaleoffeesforthethirdtotwentieth years (US$ 500annually for18th, 19thand20thyears);
- forgranting apatent forutility model US$170,increasing scale offeesfromthirdtoeighth
years reaching US$110foreighth year;
- forgranting apatent forindustrial design US$70;
maintaining intoforce forfirst5years US$80;
maintaining intoforce fornext5years US$80;
extension ofpatent validity termfor5years US$100;
- registration oftrademark andmaintaining intoforce forfirsttwoyears - US$100;
maintaining intoforce from thirdtotenth years US$120;
extension oftrademark validity termfornext10years US$150;
There arenofeesfortheprotection ofcopyrights.
Feesforother areas ofintellectual property rights arenotyetestablished.
2. Substantive Standards ofProtection, Including Procedures fortheAcquisition and
Maintenance ofIntellectual Property Rights
(a) Copyright andrelated rights
Civil Code ofGeorgia, currently inforce, protects works initsChapter 4.Draft Civil Code
ofGeorgia, which isexpected toreplace current Code bytheendof1997, protects copyrights and
neighbouring (related) rights (Volume 4-Intellectual Property Law,Part1-Copyright Law). Protection
doesnotdepend onanykindofformal procedure. Itdoesnotdepend onthelevelofprotection inthe
country oforigin.
Moral rights areprotected.
Term ofprotection begins from themoment ofcreation ofthework andlasts50years from
thedeath ofauthor.
Article 1017ofthedraftCivil Code provides forthatcopyright lawprotects moral rights and
economical rights ofauthors, andneighbouring rights, connected withperformers, producers of
phonograms andbroadcasting organizations.
Chapter4(NeighbouringRights)isdevotedtotherightsofperformers,producersofphonograms
andbroadcasting organizations. Itconsists ofarticles 1056-1069.WT/ACC/GEO/3
Page43
Computer program issues areregulated inarticles 1021, 1038, 1044, 1045oftheDraft Civil
Code.
Copyright LawofGeorgia wasprepared according toWIPO ’sModel LawOnCopyright and
wasreviewed bytheWIPO experts.
Work onEnglish translation ofthedraftCopyright Lawistobegin soon. Itisexpected that
English version ofthedraftwillbeready byMayof1997.
(b) Trademarks, including service marks
Under theStatute onTrademarks of16March 1992, atrademark isanoriginally designed
distinguishing signintended forindividualization ofidentical orsimilar goods andtheirproducers.
Thefollowing signs mayconstitute atrademark: words, figurative signs, three-dimensional
signsoranycombination ofsignsreferred toabove. Asound signmayalsoberegistered asatrademark.
Cannot beregistered asatrademark:
- signwhich hasbecome incustomary language ageneric termofaparticular good;
- suchterms which designate exclusively ofthekind, quantity, place andtimeofproduction
orofsaleofgoods;
- signwhich consists ofindications liable tomislead thepublic;
- signwhich pursuant totheArticles 6bisand6teroftheParis Convention fortheprotection
ofindustrial Property iswellknown orconsists ofheraldic figures, State flags, emblems,
anthems andnames ofinternational andintergovernmental organizations, official hallmarks
indicating control andwarranty;
- signwhich insults thenational dignity, offends religious feelings, iscontrary tothenorms of
humanistic morality, social ethics andtraditions;
- signwhich consists ofnames, pseudonyms, facsimiles andportraits ofindividuals, except
withtheirpermission.
ProtectionoftrademarkinGeorgiaisacquiredthroughregistration.Registrationdoesnotdepend
onuse.
Anapplication forregistration ofatrademark shallbefiledwiththePatent Office ofGeorgia
"Sakpatenti". Theapplication shallbesubject toexamination astotheformal requirements andasto
theoriginality. Theapplicant shall, within twomonths fromthedateoffiling anapplication, benotified
thattheapplication isaccepted fortheexamination andthatthepriority dateisdetermined. The
examination astotheoriginality ofatrademark shallbeeffected within 6months from thedateof
filing withSakpatenti andshallconcern thesimilarity oridentity ofthetrademark toberegistered in
respect ofthealready registered orwell-known trademarks.
Assoon astheexamination isover, theSakpatenti shall decide infavour oragainst the
registration ofthetrademark.WT/ACC/GEO/3
Page44
Decision astotheregistration ofatrademark maybeopposed withtheChamber ofAppeal.
Thedecision oftheChamber ofAppeal maybeappealed before thePatent Court established under
theTbilisi CityCourt. (currently theChamber ofAppeal andthePatent Court arenotestablished
yet).
Atrademark certificate confirms theregistration ofthesignasatrademark, itspriority, the
exclusive rightoftheproprietor.
Thecertificate 'stermofvalidity is10years fromthedateofregistration. Itmayberenewed
foradditional 10years, thenumber ofrenewals being unrestricted.
Atrademark transfer agreement orthelicence contract shallberegistered withSakpatenti.
Without registration agreement hasnojuridical force.
Service marks areprotected inthesame wayastrademarks.
Wellknown marks:
Under theArticle 36oftheStatute “Atrademark shallnotberegistered orusedifthemark
orit’sessential partconstitutes areproduction ofamark, which iswellknown inGeorgia, ifitconstitutes
animitation liable tocreate aconfusion therewith.
Where thetrademark referred toabove hasbeenalready registered, anyinterested party or
arespective State body shallhavetheright, within aperiod ofatleastfiveyears, torequest forthe
cancellation ofsuchamark. ”
EnglishversionofStatuteonTrademarksof16March1992,hasbeencirculatedasanaddendum
tothismemorandum.
NewdraftlawOnTrademarks hasbeenprepared bythePatent Office incooperation with
theJustice Ministry. Currently thisdraftisunder consideration inthegovernment ofGeorgia, and
itisexpected thatbytheMayof1997 itwillbepresented totheparliament.
Draft lawwasprepared according tothestandards ofTRIPS, European Communities Council
Regulation (EC) No.40/94 of20December 1993 ontheCommunity Trade Mark, asamended by
Council Regulation (EC)No.3288/94 of22December 1994fortheImplementation oftheAgreement
Concluded intheFramework oftheUruguay Round.
Draft lawOnTrademarks hasbeenanalyzed bytheAmerican attorney withtheinternational
experience andknowledge ofTRIPS, anditistheopinion ofcounsel thatsaidlegislation conforms
withtherequirements oftheWTO ’sTrade Related Intellectual Property Provisions (TRIPS).
Work ontranslation ofthedraftlawistobegin inMarch. Itisexpected thatEnglish version
ofthedraftlawOnTrademarks willbeready bytheMay1997.
(c) Geographical indications, including appellations oforigin
Draft lawontheprotection ofAppellations ofOrigin andGeographical Indications hasbeen
prepared bythePatent Office ofGeorgia andpresented totheState Minister ’sOffice bytheendof
1996.WT/ACC/GEO/3
Page45
Currently draftisunder consideration inthegovernment ofGeorgia anditisexpected that
inMayof1997 itwillbepresented totheparliament.
Draft lawwasprepared according tothearticles 22to24oftheTRIPS, andaccording tothe
European Communities Council Regulation (EEC) No.2081/92 of14July1992ontheProtection of
Geographical Indications andDesignations ofOrigin forAgricultural Products andFoodstuffs.
Work ontranslation ofthedraftlawwillbegin inMarch 1997. Itisexpected thatEnglish version
ofthedraftlawOntheProtection ofAppellations oforigin andonGeographical Indications willbe
ready byMay1997.
Draft lawOntheProtection ofAppellations oforigin andonGeographical Indications has
beenanalyzed bytheAmerican attorney withtheinternational experience andknowledge ofTRIPS,
anditistheopinion ofcounsel thatsaidlegislation conforms withtherequirements oftheWTO ’sTrade
Related Intellectual Property Provisions (TRIPS).
(d) Industrial designs
Under theStatute onIndustrial Designs of16March 1992, Industrial designs inGeorgia are
protected bygranting ofapatent.
Term ofpatent validity is10earsfrom thedateoffiling anapplication. Thistermmaybe
extended fornext5years.
Anapplication forregistration ofanindustrial design shallbefiledwiththe"Sakpatenti".
"Sakpatenti" shallexamine whether theapplication complies withtheformal requirements, andinthe
casetheapplication hasnotbeenrejected, itshallregister theindustrial design.
Licence agreement shallberegistered with"Sakpatenti".
Aperson engaged inunauthorized useofanindustrial design shallbeliable tothesuspension
oftheuseofit,ifsorequired bytheowner ofthepatent, andtothecompensation ofthedamages
suffered.
Statute onIndustrial Designs doesnotcontain anyspecial provisions regarding textile designs.
Rules onPreparing andFiling ofApplications onIndustrial Designs provide forthatapplication on
textile design must consist ofoneexample ofrapport (fragment oftherepeated picture (design)) in
dimensions ofnobigger than40sm x50sm.
English version oftheStatute onIndustrial Designs hasbeencirculated asanaddendum to
thismemorandum.
Draft ofthenewPatent Law(including inventions, utility models andindustrial designs) has
beenanalyzed bytheAmerican attorney withtheinternational experience andknowledge ofTRIPS,
anditistheopinion ofcounsel thatsaidlegislation conforms withtherequirements oftheWTO ’sTrade
Related Intellectual Property Provisions (TRIPS).
(e) Patents
Under theStatute onInventions of16March 1992, inorder tobepatentable, aninvention
shallbenovel, shallinvolve aninventive stepandshallbeindustrially applicable.WT/ACC/GEO/3
Page46
Apatent shallnotbegranted inrespect ofaninvention which would provoke orencourage
inhumane, immoral orantisocial actions.
Apatent shallprotect authorship andpriority, shallgivetheowner ofthepatent theexclusive
righttoaninvention.
Therighttoapatent shallbelong totheinventor orhissuccessor intitle.
TheStatute provides forgranting ofapatent andofapatent ofaddition. Thetermofapatent
shallbe20years fromthefiling dateoftheapplication. Apatent ofaddition shallbevalid within the
remaining period oftheprincipal patent.
Employee 'sinvention
When theinvention ismade inexecution ofacommission, theright tothepatent forthat
invention shallbelong totheinventor. Inthiscaseemployer shallbeentitled to:
- thenon-exclusive licence from thedateofpriority;
- thefirstrefusal rightincaseofpatent alienation.
Ifaperson washired especially forconducting theinventive activity, therighttothepatent
shallbegranted toanemployer. However, theinventor shallhavetherighttoanextra remuneration
equal tothescope oftheinvention use.
Compulsory licensing
Under article 70“Incaseifthepatented invention isnotused orisusedinsufficiently onthe
territory ofGeorgia, the"Sakpatenti" shall, upon arequest ofanyperson, beentitled tooblige the
patentee tothegrant ofalicence toathird party aftertheexpiration ofaperiod offouryears from
thedateofgranting theletters patent (compulsory licence).
Thecompulsory licence shallbegranted onlyinexchange fortheappropriate compensation. ”
Article 71
“Thecompulsory licence shallbegranted where:
(a) therequirements fortheuseofthepatented invention arenotmet;
(b) theuseoftheinvention isimpeded andisdependable onthepreviously granted valid
patent;
(c) patentee refuses togrant alicence voluntarily onfairterms. ”
Article 72
“Proceeding from theinterests oftheState orsociety, theState shallhavetherighttoeffect
compulsory licensing ofanypatent ”WT/ACC/GEO/3
Page47
Article 73
“Proceeding fromtheinterests ofhuman health protection, patents issued onpharmaceutical
preparations andthemethods oftheirmanufacture maybesubject totheofficial licensing regime, if
thepreparation issupplied tothecustomer ininsufficient quantities, orisofpoorquality orunjustified
expensive, andwhere thenonuse ofthemethods oftreatment anddiagnosis endangers human health.
The4yearterm, provided forinthearticle 70,doesnotconcern thecompulsory licensing
regime, provided inthefirstparagraph ofthisarticle andinthearticle 72.”
Diagnostic, therapeutic andsurgical methods arepatentable under current legislation. There
arenospecial regulations inregard therewith.
There arenospecific provisions onthepatentability ofproducts intheStatute.
English translation oftheStatute onInventions hasbeencirculated asanaddendum tothis
memorandum.
Patent Office hasprepared draftofthenewPatent Law(including inventions, utility models
andindustrial designs) hasbeenanalyzed bytheAmerican attorney withtheinternational experience
andknowledge ofTRIPS, anditistheopinion ofcounsel thatsaidlegislation conforms withthe
requirements oftheWTO ’sTrade Related Intellectual Property Provisions (TRIPS).
Draft wasconsidered inthegovernmental bodies ofGeorgia. Patent Office hasreceived and
reviewed theircomments. Itisexpected thatthedraftwillbepresented toparliament byMay1997.
Efforts ontranslation ofthedraftlawaretobegin soon. Itisexpected thatEnglish version
ofthedraftlawOnPatents willbeready byMay1997.
(f) Plant variety protection
LawonProtection ofSelection Achievements protects plant variety andanimal breeders by
granting acertificate. Certificate confirms exclusive rightofit’sholder onselection achievement.
Lawconsists of34articles, which aregrouped in8chapters.
Lawwasprepared according toUPOV standards.
(g) Layout designs ofintegrated circuits
Patent Office ofGeorgia ispreparing thedraftlawonProtection oflayout designs forintegrated
circuits.
(h) Requirements onundisclosed information, including trade secrets andtestdata
Article 9.7ofthelawontheMonopolistic Activity andCompetition provides forthatobtaining,
use,or/and distribution oftrade related information orofthecommercial secrets without consent of
theproprietor, isprohibited.
Under thePresidential Decree of24January 1994, thelistofinformation, regarded asState
secrets includes “...Information onthelicences tobesoldorpurchased, ontechnological processes,
technical documentation ontheequipment models, onpurchases offoreign patents andtechnicalWT/ACC/GEO/3
Page48
documentation, onlicensing conditions ofspecific domestic inventions andscientific-technical
achievements ”.
(i) Anyother categories ofintellectual property
LawOnTheMonopolistic Activity andCompetition initsarticle 9.5alsoprohibits unlawful
useofcompetitor 'sorthethirdperson 'scompany name.
Statute oninventions provides fortheprotection ofutility models. Patent ontheutility model
isgranted for8years. Rules ofprocedure fortheutility models arethesame asforinventions.
Protection ofutility models isalsoenvisaged inthedraftlawonpatents.
3. Measures toControl Abuse ofIntellectual Property Rights
Anti-monopoly organ ofGeorgia isentitled totakemeasures against factsofunfair competition.
4. Enforcement
(a) Civil judicial procedures andremedies
TheCivil Code ofGeorgia, currently inforce, willbeabolished inafewmonths, newCivil
Code hasbeenpassed bytheparliament byfirstreading anditisexpected tobeenacted bytheend
of1997.
StatuteonTrademarksprovidesforthattheholderofatrademarkwhoserightshavebeenviolated
shallbeentitled toinstitute proceedings inthecourt. Italsostates, thataperson, whomanufactures
afalsetrademark, unlawfully exploits, appropriates orusesatrademark, deliberately putsonthemarket
unlawfully orfalsely marked goods, withthepurpose ofmisleading thepublic manufactures animitation
oftheregistered goods orusesanimitated trademark, produces goods without atrademark, anduses
inhistrademark thesigns notallowed fortheregistration shallbeliable totheconfiscation ofthe
trademark and/or tothefineorimprisonment.
Statute oninventions provides forthataperson, whoengages inunauthorized manufacture
ofapatented invention shallbeliable tothefineandindemnity fordamages suffered, aswellasto
theprohibitionoftheviolation.Deliberatedisclosureoftheessenceoftheinventionpriortoitspublishing
bytheSakpatenti, aswellastheusurpation ofauthorship shallbecriminally liable.
(b) Provisional measures
Provisional measures willbeenvisaged inthedraft Code ofCriminal Procedure anddraft
Code ofCivil Procedure.
(c) Anyadministrative procedures andremedies
Code ofAdministrative Infringements doesnotyetcontain wording onintellectual property
matters.WT/ACC/GEO/3
Page49
(d) Anyspecial border measures
Trademarks
Statute onTrademarks provides for,thatallgoods, unlawfully bearing atrademark shallbe
seized onimportation intoGeorgia where suchmark isentitled tolegalprotection. Seizure shalltake
place attherequest ofthepublic prosecutor, oranycompetent authority, oranyinterested party.
(e) Criminal procedures
Article 147oftheCriminal Code ofGeorgia provides fortheliability fortheinfringement
ofrights ofauthors ofscientific, literary, musical orcreative works andofrights ofauthors of
inventions.
Article 166oftheCriminal Code provides fortheliability forillegal useofatrademark.
Article 166Illegal UseofTrademark
Illegaluseofotherperson’strademark(servicemark),registeredfirmnameormeansofmarking,
which isdoneaftertheuseofadministrative remedies -shallbeliable topenalty intheamount ofone
thousand totwothousand times ofminimal salary.
Thesame action, done several times orifitcaused serious damage -shall beliable to
imprisonment foruptofiveyears.
Currently commission ofJustice Ministry isdrafting anewCriminal Code ofGeorgia
5. Laws, Decrees, Regulations andOther Legal ActsRelating totheAbove
Statute onInventions, Statute onIndustrial Designs andStatute onTrademarks wereapproved
bytheDecisions oftheCouncil ofMinisters oftheRepublic ofGeorgia on16March 1992 andthey
areinforce from 1May1992.
Allabove mentioned, alsoCivil andCriminal Codes aresubject tochange in1997.
Draft Patent Law, draftTrademark LawanddraftlawOntheProtection ofAppellations of
origin andGeographical Indications areunder consideration inthegovernment andareexpected to
bepresented toparliament inMay1997.
LawontheMonopolistic Activity andCompetition isinforce from October 1996.
Law onProtection ofselection Achievements isinforce from November 1997.
6. Statistical Data onApplications forandGrants ofIntellectual Property Rights, AsWell
AsAnyStatistical Data ontheir Enforcement
(BytheOctober of1996)
Applications
Trademarks 12,000
Industrial Designs 63WT/ACC/GEO/3
Page50
Inventions 3,000
Utility Models 331
Granted
Trademarks 2,850
Industrial Designs 30
Inventions 500
Utility Models 80
VI. TRADE-RELATED SERVICES REGIME
1. General Description oftheOverall Market
The volume ofproduction intheservices sectors in1996 made 1.914 million Lari. Itis
42.1percentofGross Domestic Product ofGeorgia (Annex 1).Thelistofgeneral service sectors
existing inGeorgia arepresented hereby:
- financial services;
- professional services;
- communication services;
- transport services;
- construction services.
Thedataofexport-import service sectors isgiven inpercentage inAnnex 1(seeTable).
2. Policies Affecting Trade inServices
General introductory comments according tomode ofsupply
Cross-border supply ofservices (mode 1)
Incross-border supply ofservices neither quantitative quotas, noreconomic needs testsare
applied inrespect toimports. There arenotmonopolies orexclusive supplier rights inservices that
could betraded across frontiers. Cross-border trade withservices isnottaxable; restrictions arenot
imposed upon theaccess todistribution networks (such astelecommunications).
Consumption ofservices abroad (mode 2)
Georgian nationals andGeorgians whoreside ontheterritories ofGeorgia 'strade partners
arenotsubject torestrictions intheconsumption ofservices. Nationals andindividuals arefreetotravel
outside Georgia andconsume foreign services iftheywishso.
Commercial presence (mode 3)
Establishment rights areguaranteed through theLaw"OnPromotion andGuarantees of
Investment Activity" andtheLaw"OnEntrepreneurship". Theestablishment ofacompany withforeign
investmentdoesnotrequireapproval.Registrationessentiallyfollowsthesameproceduresasfordomestic
companies. Thelawsalsoprovide foreign investors withprotection andsecurity inGeorgia. TheLaw
"OnPromotion andGuarantees ofInvestment Activities" determines thelegalbasisforimplementation
offoreign anddomestic investments andtheguarantees fortheirprotection ontheterritory ofGeorgia.
BytheArticle 6ofthislaw,after60daysfrommaking investments aninvestor isobliged toregisterWT/ACC/GEO/3
Page51
aninvestment intheAgency ofForeign Investments, thecostofwhich isUS$100thousand (or
equivalent toit)ormore, otherwise, investment activities conducted byhimareprohibited.
TheAgency ofForeign Investments registers aforeign investor during 5daysafterreceiving
anapplication.
Inaccordance withtheArticle 9oftheLaw"OnPromotion andGuarantees ofInvestment
Activities" aninvestor hasnorighttoconduct thefollowing activities, without having permission or
licence issued bytheappropriate institution: production orsaleofweapons andexplosives; production
orsaleofmedicines andother substances subject tospecial control; exploitation ofnatural resources
andforestry; establishment ofcasinos andgambling houses network, securing theorganization ofthe
games andlotteries; banking activity; insurance activity; issuance ofsecurities, which constitute apublic
distribution ofsecurities; wireless communication service andestablishment oftelevision andradio
channels; other activities stipulated bythelegislation ofGeorgia. TheArticle 16ofthislawdetermines
theruleofdispute settlement, onthebasisofwhich thedispute between foreign investor andenterprise
registered inGeorgia issettled inaccordance withruleestablished bytheagreement reached between
them, orinaGeorgian court. Adispute between foreign investor andgovernmental authorities issettled
inaGeorgian court orInternational Centre fortheResolution ofInvestment Disputes orinany
international arbitration authority which isestablished inaccordance withrules setupbytheUnited
Nations Commission forInternational Trade Law(UNCITRAL) oraninternational treaty.
Temporary presence (mode 4)
Naturalpersons(asdistinctfromlegalpersonsandincorporatedenterprises)alsoenjoyrelatively
access totheGeorgian market. Under theLaw"OnTemporary Entry, Residence andExitofForeigners
from Georgia" allindividuals, whether asemployees offoreign service suppliers orasindependent
individuals supplying services, mustacquire avisatoenterGeorgia, andmustberegistered according
toplaceoftheirliving asitisenvisaged bytheLaw"OnRegistration andIdentification RuleofGeorgian
Citizens andForeigners Living inGeorgia" of27June1996.
Visas areissued onthebasis ofaletter ofinvitation bytherelevant governmental and
non-governmentalentity,endorsedbytheMinistryofForeignAffairs.Inparticular,professionalswishing
toexercise inGeorgia must receive permission andberegistered.
Themost prominent services sectors
Theactivities ofdrafting, adopting thelawsandamending theexisting legislation active in
trade inservices, arebeing maintained inGeorgia tomake thelegislative basis consistent tothe
agreements oftheWorld Trade Organization.
Thegeneral lawsrelated totheservice sector areasfollows:
- Constitution ofGeorgia 24.08.95 No.786-rs
- Law“OnPromotion andGuarantees ofInvestment Activity ”No.473-1s 12.11.96
- Law“OnEntrepreneurship ”No.57728.10.94
- Law“Onthelegalconditions offoreigners ”No.258-2s03.06.93
- Law“Ontemporaryentry,residenceandexitofforeignersfromGeorgia”No.316-2s;27.07.93WT/ACC/GEO/3
Page52
- Law“Onmonopoly activities andcompetition ”25July1996 No.288-1
- “Bankruptcy Law”25July1996
Financial services
Insurance Services
TheMinistry ofFinance controls theinsurance activities inGeorgia.
TheState Insurance Company andprivate firms provide insurance activities inGeorgia.
Insurance Lawisnotadopted yet,butitissubmitted forconsideration intheParliament ofGeorgia.
Banking Services
TheNational Bank ofGeorgia defines theoverall policy ofservice forthewhole banking
sector existing inGeorgia. TheNational Bank makes administrative decisions onthebasisofthetwo
Laws being inforce inGeorgia. Thefirstlawis“OntheNational Bank”(adopted on28.06.95) and
theother oneis“OnCommercial Banks Activities ”(adopted inFebruary 1996). Incompliance with
these twolawstheNational Bank hasadopted thefollowing legislative acts:
- Resolution No.26“onspecifying nominal amount ofcharter capital forcommercial banks
ofGeorgia ”.(29.05.95);
- Onestablishing commission feeintheamount of1percentondepositing currency tothe
National Bank. (01.12.96.) Andtheother laws;
- Instruction "OnOpening andPerforming Accounts andDeposits forNon-Resident Legal and
Natural Persons inNational andForeign Currency bytheGeorgian Authorized Banks". No.46,
(20.11.96);
InGeorgia theCourt produces registration ofbanks butthelicences onbanking activities
areissued bytheNational Bank.
Inaccordance withtheArticle 4Paragraph 4concerning theactivities ofcommercial banks,
thelicences onbranch ordaughter companies areissued onlyincase,when theheadoffice ofthebank
isresponsible toattract deposits orother means ofpayment. Insuchcases thelicences onbanking
activities areissued onlyafternegotiating between theNational Bank andthecompetent authorities
offoreign country providing supervisory activities ofthecorresponding bank.
Inaccordance withthearticle 4,Paragraph 1ofthelaw“OnCommercial Banks Activities ”,
theNational Bank makes adecision about issuing alicence andinforms theapplicant inawritten form
notlaterthanwithin amonth, afterreceiving amotivated mediation from thecommercial bank.
Incompliance withthearticle 10,paragraph 1“Notanypartner ofthebank (shareholder)
orthegroup of(shareholders) partners acting together shallposses ordispose theamount ofshare
exceeding 25percentofstated ordeclared capital.
TheNational Bank isauthorized tomake anexception onlyfortheshareholder possessing
alicence onbanking activities orrepresents thebankitself (onitsown)”.WT/ACC/GEO/3
Page53
Onthedecision oftheNational Bank, dated from1September 1996, theratioofcompulsory/
obligatory (Resources) reservations makes 15percentandobligatory charter capital forthecommercial
banks isLari500000.
TheNational Bank isauthorized given exclusive rights toexecute theissueofbank-notes and
coins tobeusedaslegalmeans ofpayment within theterritory ofGeorgia.
Thetwo-tired banking system existing inGeorgia isrepresented bytheNational Bank from
oneparty andfrom theother number ofcommercial banks; theirquantity makes 71commercial
banks according tothedatasubmitted onAugust 30,1996.
Noextra requirements existinGeorgia forforeign banks. They operate inaccordance with
common banking legislation.
Securities
TheMinistry ofFinance represents theState authority which provides regulatory regime,
licensing andregistration inthesector ofstock markets, onthebasisoffivegovernmental decisions.
Those decisions arepresented below:
- No.812“Onestablishment andorganization ofstock markets inGeorgia ”CoM /28.XI.94/.
- No.211“Onapproving temporary resolutions concerning theissue andflowofsecurities
andthestock exchanges. ”/15.IV.95/.
- No.46“Theruleonpersonal andinstitutional licensing ofthepersonal andinstitutional
participants ofstock markets ”/1.VI.95/.
- The"Law oftheRepublic ofGeorgia ontheCheck ”/19.IV.95/.
- The“LawoftheRepublic ofGeorgia onthePromissory Notes ”/19.IV.95/.
Toprovide theactivities atthestock market legalperson aswellasanatural person mustreceive
alicence. Licence conditions arespecified inthe“Rule onpersonal andinstitutional licensing of
individual andinstitutional participants oftheorganized stock market ”.
Licences willbeissued to:
- individual participant oforganized stock market;
- legalperson, institutional participant oforganized stock market;
- create exchange activities;
- create activities ofaninvestment fund.
Under thearticle 3oftheResolution No.812oftheCabinet ofMinisters oftheRepublic of
Georgia, dated from 28November 1994, "Oncreating andorganizing stock market intheRepublic
ofGeorgia" theMinistry ofFinance ischarged tointroduce inpractice the"rule onpersonal and
institutional licensing ofindividual orinstitutional participants oforganized stock market ”andfor
thisreason undertake:
- licensing theissue ofsecurities;WT/ACC/GEO/3
Page54
- personal licensing ofplenipotentiary participants oftheorganized stock market;
- institutional licensing ofplenipotentiary participants oftheorganized stock market;
- licensing exchange activities onthestock market;
- licensing theactivities ofmanagers oftheinvestment funds;
- licensing thedissemination offoreign country company securities within theterritory ofthe
Republic;
- licensing printing companies issuing thesecurities aswellastheeconomic entities delivering
those securities ”(thetwolastissues arenotundertaken yet).
Commercial operations provided bymeans ofthesecurities arefreefrom VAT (see:”The
Value Added TaxLaw“,Republic ofGeorgia Article 5,paragraph 1,sub-paragraph “h”).Theseller
when producing (buy-selling agreements) commercial operations bymeans ofsecurities, paystax
intheamount of0,1percentofthevolume ofoperation. (see:aletter No.04-2/18 /10.I.96/ about
theState TaxInspection oftheRepublic ofGeorgia).
Thepreferences arepassed tothedividend payers. Thedividends aresubject totaxation up
to10percent(see:thelawofRepublic ofGeorgia “ontheprofit (income) payment ofthecompanies
“article 10,paragraph 1,sub-paragraph “a”andtheparagraphs 2,3).
Professional andbusiness services
Governmental andindependent companies determine thegeneral policy intheprofessional and
business services, software implementation services, services related toinvestigation anddevelopment,
services related tothesector ofrealestates andetc.WT/ACC/GEO/3
Page551. Professional Services
Responsible State Body Type ofServicesType ofActivity
Requiring Licence Main Laws
Ministry ofJustice Legal service 1.Lawyers
2.Detective
3.NotaryCriminal Process Code oftheRepublic ofGeorgia
30/12/60 (with amendments andadditions).
Civil Code oftheRepublic ofGeorgia 26/12/61
(with amendments andadditions) .
LawonNotary 23.05.96.
Lawonlawyers intheSoviet Union 30/11/79
Audit Board audit service audit activities Lawonaudit activities 7/02/95
Audit Activity Board Decision ontesting andissuing
certificates 12/07/96;
Audit Activity Board decision onlicensing audit
activities 04/09/96
Ministry of
Construction and
Urbanization-architectural services;
-urban planning andlandscape architectural
service;
-construction activities related tothebuildings;
-construction activities related tothecivil
engineering sector;
-installation andassembling work;
-building completion andfinishing work.“OnLicensing Construction Activities inGeorgia ”
16/03/96
“OnCompulsory State Expertise of
Planning-Estimation andInvestment Documentation
ofCapital Construction ”30/05/96
“OnHolding Tender inConstruction Industry in
Georgia ”12/07/96 w.
Ministry ofAgriculture andMinistry of
Protection ofEnvironment andNatural
Resources-services related to
theAgriculture,
Forestry and
Fish-breedingAllkinds ofservices connected withnatural
resources andhuman healthThe Laws "On
Environmental Protection" No.424-1s and
No.425-1s, 15.10.96;
TheLaw"OnLeasing ofAgricultural Land"
No.538-1s, 13.12.96WT/ACC/GEO/3
Page562. Software Implementation Services
Responsible State Body Type ofServices Type ofActivity Requiring
LicenceMain Laws
State andPrivate
companies-Consultancy services related totheinstallation
ofthehardware;
-Software implementation services;
-Data baseservices;.None Notstipulated byanylegislation
Department ofSocial
Economical
InformationDatabaseservices; None Notstipulated byanylegislation
3. Services Related toInvestigation andDevelopment
Responsible State Body
Type ofServicesType ofActivity Requiring
Licence Main Laws
Academy ofScience
Department ofScience and
Technology-services related tonatural sciences andsocial
humanitarian sciences;
-interdisciplinary servicesNone Law“OnDevelopment of
Sciences andTechnologies ”
4. Services Related toRealEstates
Responsible State Body Type ofServices Type ofActivity Requiring
LicenceMain Laws
Private Companies services related torealestate None Notstipulated byanylegislationWT/ACC/GEO/3
Page575. Rental/Leasing Services without Operators
Responsible State Body Type ofServices Type ofActivity Requiring
LicenceMain Laws
Ministry ofTransportation;
Ministry ofState Property
ManagementServices related torental sector
without performanceNone -Law onLeasing 24.05.94
-Law onMortgage 30.06.94
-Law ontheRuleofTransfer State Property through
Leasing ”20.09.94.
-AirCode ofGeorgia No.462-1s, 29.10.96WT/ACC/GEO/3
Page58
Ministry ofJustice regulates legalservices. Theservices intrade isregulated bytheCourt,
Arbitrage, Administrative Tribunal andAppeal Court. Georgian Legislation gives authority toproduce
legal services toGeorgian citizens withhighjuridical education, whoattended training courses for
lawyers andpassed special qualifying exams andarethemembers oftheLawyers Colleague (incase
ofproviding lawyer services).
Thelegalservice produced byforeign lawyers isnotregulated bytheGeorgian Legislation
inforce.
Audit Service isregulated bytheAudit Board.
TheAudit Board isresponsible to“Legalize documentation related toaudit activities issued
bytheother country ”,under theArticle 2,paragraph “g”.
Taxservice isprovided bytheAuditors andtheAudit Firms onthebasis oftheagreement
made withtheorderer. Thissector isregulated bythelaws“OnthePrinciples oftheTaxSystem ”
adopted inDecember 1993 and“OntheAudit Activities ”.
TheMinistry ofConstruction andUrbanization
Thedraft“OnArchitectural Activities ”andsome other onesareprepared bytheMinistry and
willbesubmitted totheInstruction bodies within theshortest period.
According tothesectors related totheMinistry, thelegalandnatural persons ofGeorgia and
foreign countries aretoreceive anappropriate licences toundertake construction activities within
theterritory ofGeorgia. Toreceive thatkindoflicence theyareobliged tosubmit thefollowing
documentation totheLicensing Centre existing attheMinistry:
- permission issued bytheStateInspection Bodies onperforming special activities; receipt for
thelicence feepayment andsome other information;
- thecharge isestablished forthree kinds ofconstruction, forforeign firms intheamount of
US$10000andtheextra foreachtypeUS$2000;
- among the214companies existing intheMinistry Sector 195companies arealready privatized
and29companies arestillState-owned.WT/ACC/GEO/3
Page596. Other Business Services
Responsible State Body Type ofServicesType ofActivity
Requiring Licence Main Laws
Ministry ofEconomy Advertising services None Decree No.60“OnProtecting Consumers from
Unfair Advertisements ”;10.03.95
Centre ofSocial Information and
ManagementMarket andpublic Opinion Research None Notstipulated byanylegislation
Department ofStandardization and
Metrology-technical testing andanalyses
-certification ofservicesNone "Law onStandardization"; 17/01/94.
"Law onCertification ofProducts andServices"
No.376-1s, 18.09.96
Private Companies and
"Charkhmshenebeli"
-factory-services related totheindustrial sector;
-maintenance andrepair ofinstallationsNone Notstipulated byanylegislation
Scientific Organizations ofthe
Corresponding Industryconsultancy services related toscience
andtechnologyNone Notstipulated byanylegislation
television andRadio Corporation -Advertising services;
-radio andtelevision services;
-motion picture production and
distribution services.None Notstipulated byanylegislationWT/ACC/GEO/3
Page60
TheMinistry ofAgriculture controls economic services ofagriculture. Thisregulatory activity
isprovided bytheLogistical Support State Corporation -Sakagrotechservice ”,bymeans ofother
amalgamations compiled in:“Sopltechservice ”,“Soplmomarageba ”,“Agrotrans ”,“Agromontage ”.
These amalgamations dispose companies formaintenance andrepair oftechnology, companies for
mechanical activities, motor transport companies, material procurement bases, assembling- maintenance
companies.
State Energy company “Sakenergo ”,State Holding Company “Saknavtobproducti ”,JSC
“Satransgaz ”and“Sakenergogeneration ”(thelatest controls allthepower stations andsome subsidiary
structures) compiled intheMinistry ofEnergy areincharge toundertake theservices related toenergy
distribution.
According tothe“LawonForeign Investments ”,51percentofshares fromtheconstructions
undertaken byforeign investments (gaspipeline, pipeline, wires forthetelecommunication, electricity
transmission wires) belongs totheState.
Thefueltransportation isproduced through theKhashuri-Batumi main oilpipeline (pumping
diesel forexport, petrol andaviaceresine). Itsannual capacity is3,69milltones peryear.
Thecapacity ofKhashuri terminal is60tank-cars atthesametimeandunloading usually takes
2hours.
TheBatumi terminal capacity is47thousand tones.
TheMinistryofSocialProtection,LabourandEmploymentandtheLabourExchangeundertakes
theplacement andsupply services ofpersonnel.
"The Lawinforce onEmployment ”25/07/91; defines thegeneral policy foremployment
ofthepopulation ofGeorgia, economical, social, organizational andlegal basis forprotecting the
unemployed. Thelawisspread overallthepopulation ofGeorgia, allthecompanies, organizations
andinstitutions, notwithstanding theproperty andorganizational-legislative basis.
Theworking activities offoreign citizens inGeorgia isregulated under theagreement made
between Georgia andthecorresponding countries. Thelicence ontheworking activities isissued by
theMinistry ofSocial protection, labour andemployment.
TheMinistry ofSocial Protection andEmployment ofGeorgia controls thesector ofSocial
Services.
TheMinistry makes decisions onpension provision onthebasis ofthefollowing laws:
- TheLawoftheSoviet Union adopted on15May1990 “About providing thecitizens ofthe
Soviet Union withpensions ”etc.
Investigation andSafety -thissector isregulated bytheMinistry ofInternal Affairs.
Property Protection Main Department attheMinistry ofInternal Affairs isauthorized toprotect
tradestorage, banking andallkindofmaterial values, money, citizens, legalpersons aswellasnatural
persons, inaccordance withthemutual Decree (dated 30May1996) oftheProperty Protection main
DepartmentattheMinistryofInternalAffairs,lawonPolice,Policeregulationaboutpropertyprotection,
theNational Bank ofGeorgia andtheMinistry ofInternal Affairs.WT/ACC/GEO/3
Page61
Communication Services
Under theLaw "On thetelecommunication" No.568 12.10.94, theMinistry of
Telecommunication andPostal services isdetermined astheauthorized body inthesector of
telecommunication andpostal services.
TheMinistry performs thetariff regulation andcontrol, creation thelegislative basis ofthe
industry andparticipates inestablishing thetechnical-economical norms standards.
Themainpartners oftheMinistry ofTelecommunication areRussia, Germany, United States, Bulgaria.
Under theDecree No.334,(dated 20May1996) ofthePresident ofGeorgia, TheMinistry
ofTelecommunication andPostal Services hasthenatural monopolies:
- inthesector ofState Postal services;
- indistribution ofthefrequency spectrum.
Inaccordance withtheArticle 7,paragraph 2ofthelaw“OntheTelecommunication ”,The
Ministry ofTelecommunication provides provisional regulated State monopoly intheservices of
interconnection inthenetwork ofgeneral use.
Georgian andforeign firms areinequal conditions forreceiving alicence; afirmwhoisto
receive alicence must beregistered intheterritory ofGeorgia.
Decisions onlicensing aretaken during 30daysafterreceiving anapplication.
Thefollowing firms areengaged inthemodernization ofGeorgian telecommunication network:
Alcatel, Siemens, Telerad, Deutelecom etc.
Communication Services
Responsible
State BodyType ofServices Type ofActivity
Requiring LicenceMain Laws
Ministry of
Tele-
communicationpostal services;
courier services;
telecommunication services:
voice telephone services;
packet-switched datainformation
services;
telexservices;
telegraph services;
faxservices;
private leased circuit services;
electronic mail;
Software networks;
electronic datainterchange (EDI);
codeandprotocol conversion;
radio andtelevision services.-producing means of
telecommunication;
-construction
telecommunication
networks;
-planning anddrafting of
networks;
-services related to
networks andutilities;
-interconnection in
general
telecommunication
networks. SLaws onTele-
communication
12.10.94WT/ACC/GEO/3
Page62
Theorganizations:“GeorgianTelecom”,“SakartvelosPosta”and“SakartvelosElektrokavshiri”
andothers areresponsible forproviding services inthesector oftelecommunications inGeorgia.
“IBERIAPAC ”datatransmission network forthegeneral useregistered intotheInternational
Union ofElectrotelecomunication isoperating inGeorgia.
Thecompanies operating attheMinistry ofTelecommunication arefreefrom paying VAT.
Thelicences areissued bytheMinistry ofTelecommunication, onthebasis ofthedecision
oftheLicensing Committee approved bytheMinister. Thedecision ismade within amonth after
submitting theapplication anddocumentation.
Audiovisual Services
JSC“Kartuli Pilmi”determines theaudiovisual service policy intheparagraphs (a)and(b)
andtakes theadministrative decisions.
(a) Motion picture andvideo tapeproduction anddistribution services;
(b) Motion picture projection service.
Nolawsaremaintained inthissector andtherelations arenotregulated under thelegislation
aswell.
InGeorgia thereexists onefilmstudio, which iscapable toproduce about 20full-length films,
2cartoon studios andstudio popular-science films, 125movie theatres, studio “Telefilm ”.TheState
Television compiles anumber ofprivate andabout 10video studios. (Thecinema network exists also
intheTrade unions).
RadioandtelevisionCorporationproducesRadioandtelevisiontransmissionservices,production
anddistribution oftelevision-films.
Radio andtelevision Corporations provides services under theDecree No.617oftheCabinet
ofMinisters oftheRepublic ofGeorgia, dated 4October 1995“TheRegulation ofTelevision andRadio
Broadcasting ”.
Sound recording service isnotregulated under thelegislation inGeorgia.
Transport Services
InGeorgia allkindofservices including cabletransportation services, except thepipeline service
iscontrolled bytheMinistry ofTransportation.
Pipelines services arecontrolled bytheMinistry ofEnergy.
Maritime Transport Services:
TheMaritime Transport Department attheministry ofTransportation isauthorized toperform
themaritime transport services inGeorgia.
Passenger transportation inports ofBatumi, Poti, Sukhumi -there aregood passenger
terminals. Attheeffectiveness oftheCrimean-Caucasus passenger linethenumber ofpassengersWT/ACC/GEO/3
Page63
complied nearly 1,5million person peryear, atthepresent time because ofdefinite problems
1991-1995 thetraffic compiled 150.000 person peryear.
Goods transportation -goods transportation incabotage arecarried outbythenational fleet,
export andimport areentirely bythevessels ofUkraine andTurkish flag.AlsotheRepublic hasno
appropriatetonnage,especiallyforgeneralcargoeswhichcomplied90percentfromthecargoturnover.
Georgian Shipping Co.-operation thefleet of44vessels (about 850000DWT).
Thecompany hasonly bulker andtanker andastheRepublic hasnobulk andoil
cargoes ofsuch volume inthenomenclature, allvessels operate atthewould freight market,
being only thesource ofthehard currency fortheRepublican budget.
Rental ofthevessels with thecrew members -ingeneral thevessels ofGesco work
inthissphere which work under charter/party ortimecharter. Theprivet ship-owners who
control ofsmall tonnage fleet ingeneral areprovided with their cargo basis, butthey often
pass thevessels intocharter.
Maintenance andrepair -terms forservice aregood asthepresence oftwoprofessional
marine institutions allow toestablish good qualified marine staff-which may order service
toanykinds ofvessels (excluding gascarrying vessels).
Repair -thepossibilities oftherepair arerestricted, ports ofPotiandBatumi have
small shipyards which cancarry outrepairs ofmiddle difficulty, theportofPoihasfloating
dock for5000 dwt.
Pushing andtowage services -ports ofGeorgia have good porttugfacilities (4tugs
ineach port), however thetugs foropen seamarine towage areabsent.
Supporting services formarine transport -inports ofPotiandBatumi there areabout
10shipping agencies, forwarding andsurveying companies (thelistofthemostimportant is
attached).
Internal Waterways Transport
Georgia does nothave river ways oftransportation, andinaccordance with thisthere
isnotexisting structure.
AirTransport Services
AirTransportDepartmentprovidesAirTransportServicesinGeorgia.AirTransportDepartment
hasdeveloped thenormative legislative acts(short listisattached):
- Regulations onoperating theforeign country representation ofAirCargo Transportation within
theterritory ofGeorgia;
- Resolution No.643,dated 10October 1995, "Onlicensing theactivities related toAirFreight
Transportation andAircraft Transportation";
- Resolution No.365,dated 18June1995, "Onlicensing theagencies producing therealization
ofvolumes offreight transportation andpassenger transportation ontheairlinesandairroutes
oftheRepublic ofGeorgia", etc.WT/ACC/GEO/3
Page64
Tousethesignificant airlineforbusiness tripsregularly ornon-regularly, Georgian orforeign
country legalornatural person istohaveapermission (licence);
Thebackground forthelicence onimport ofservice inAirTransportation onaregular basis
isthemutual agreement made between thegovernments ofGeorgia andaforeign country, concerning
AirTransportation services andpassing through theprocedures forenacting thisagreement.
Theservices provided intheairspace andintheairports located within theterritory ofGeorgia
arefreefrom charge for:
- air-crafts, providing rescue-research activities;
- technically non-repaired air-crafts, landing down intheairports ofGeorgia inorder toavoid
disaster.
Status ofGeorgia withRegard toInternational AirLawInstruments
- Convention onInternational Civil Aviation Chicago, 7/12/44. Effective Date 20/2/94;
- Protocol ontheAuthentic Trilingual TextoftheConvention onInternational Civil Aviation,
Buenos Aires, 24/9/68, Effective Date20/2/94;
- Convention onOffenses andCertain Other ActsCommitted onBoard Aircraft Tokyo, 14/9/63,
Effective Date14/9/94.
- ConventionfortheSuppressionofUnlawfulSeizureofAircraft.TheHague,16/12/70,Effective
Date20/5/94;
- Convention fortheSuppression ofUnlawful Actsagainst theSafety ofCivilAviation, Montreal,
23/9/71. Effective Date20/5/94.
InGeorgia 12AirCompanies provide fortheservices. Among themtheonlyoneState-owned
AirCompany istheHelicopter AirCompany.
TheAirports areState-owned inGeorgia. Theprocess oftransformation intoJSCs isjust
commencing.
Road Transportation service
InGeorgia Road Transportation Service isprovided bytheRoad Transportation Department.
Joining theInternational Agreements andConventions:
- Convention “OntheInternational Road Transportation Agreements ”19/05/19556;
- InternationalConvention“Onmakingagreementsaboutthetermsofcargocontrolattheborder”
21/10/1982;
- European Convention “OntheInternational Agreement ontransportation ofdangerous freight
forthecompanies performing International Road Transportation ”30/09/1957;
- Agreement “Onrendering technical andother kindofassistance fortheautorolling-stocks
usedontheInternational Routs ”;WT/ACC/GEO/3
Page65
Thegeneral lawis:
- ”Regulations onlicensing autotransport activities inGeorgia ”.Resolution No.180,ofthe
Cabinet ofMinisters oftheRepublic ofGeorgia;
Thefollowing commercial activities aresubject tolicensing:
- freight transportation andpassenger transportation;
- transport-expedition service;
- technical influence, repair, diagnostics andother services;
- running theautostations.
Onthebasis oftheLaw"OntheRoad Fund" No.802,dated 2.09.95, article 7(“Charges
forentry andtransit traffic ofautotransportation within theterritory ofGeorgia ”).Entering charges
andcharges fortransit traffic within theterritory ofGeorgia, paytheowners ofthevehicles registered
outside ofGeorgia (including special vehicles), aswellastheowners ofthevehicles registered within
Georgia, which areloaded oraretobeloaded within theterritory ofGeorgia todeliver freight offoreign
country toaforeign country.
ThelicencesonRoadTransportationActivitiesareissuedonlybytheTransportationDepartment
ofGeorgia. Theapplicant forthelicence must havetheprofessional training, corresponding tothe
typeofactivities given intheapplication.
Grants andPreferences
Under theState Regulatory Prices andTariffs, Passenger transportation through cityor
interregional routs performed byState transport (excluding cabs) isfreefrom paying VAT.
Forkeeping/owning vehicles arefreefrom paying tax,incases of:
- theowners ofhand-operating motorcars andmotorbikes;
- thebus-owners moving through thecityrouts.
RailTransport Services
TheRailTransportation Department performs theRailTransportation Services.
Thelistofthelaws, legislative acts,State resolutions andDecrees:
- Agreement “Ontraffic ofInternational RailFreight Transportation ”,1June1990;
- Agreement “OntheRailway Cooperation ”,Warsaw, September 1995;
RailTransportation Services arenottobelicensed according tothelegislation inforce.
Inthesector ofRailTransportation Services State share makes 100percent.WT/ACC/GEO/3
Page66
Tourism andTravel Related Services
TheDepartment ofTourism provides thetourism andtravel services.
Inregulating regime oftourism sector thefollowing normative actsareinforce Georgia:
- theTourism Chart andTourism Code adopted inSeptember 1995 onthe6thsession ofthe
General Assembly oftheWorld Tourist Organization, recognized bytheParliament ofGeorgia
under theResolution, dated 27January 1995;
- thelawoftheRepublic ofGeorgia “OnTourism ”adopted on1June1995;
- theRegulation “Onlicensing International Tourist Activities within theterritory ofGeorgia ”
isapproved bytheResolution oftheCabinet ofMinisters ofGeorgia, dated 6February 1995;
Themain trade partners are-Turkey, United Arabic Emirates, Iran,Chine, Germany. The
feeforlicensing tourist activities isdefined as25times more thantheamount ofnominal salary stated
inGeorgia.
Ifthefounder ofthecompany submitting theapplication forlicensing theinternational tourist
activities isaforeigner residing inGeorgia permanently, legalperson, ortourist agency established
through participation offoreign investments, thelicensing feemakes US$2000. 210private and120
State companies areproviding Tourism Services.
Environmental Services
Theservices ofthesekindarecontrolled bytheMain Department ofPublic Utilities, producing
thefollowing services:
- hotel services;
- water supply;
- sewage services;
- sanitation andsimilar services;
- heating (individual andhousehold boilers);
Thelawinforce is“TheLawonPublic Utilities ”adopted bytheParliament ofGeorgia;
No.672-110 (7March 1995).
Construction andRelated Engineering Services
Urban andConstruction Ministry controls thesub-sector services related toconstruction
activities.
Performs thelicensing ofconstruction activities under theDecree ofthePresident ofGeorgia
“Onlicensing construction activities inGeorgia ”,dated 16March 1996. Thelicensing of
planning-research, construction-repairing, producing constructions ofbuilding material hasbeen
introduced.Themethodologiesonspecifyingcost-accountingandcontractpricesandforsettingstandards
hasbeenestablished andperformed.
(a) Judicial, arbitration oradministrative tribunals orprocedures
Under theArticle 18oftheLaw, dated 23April 1991, "OntheArbitrary Court intheRepublic
ofGeorgia ”,theapplicant inorder toreceive alicence onperforming import ofservice, cansubmitWT/ACC/GEO/3
Page67
theapplication totheCourt (incaseitisanatural person) ortotheArbitrary Court (incasetheapplicant
isalegalperson) torecognize thedecision ofthelicensing body invalid.
Theapplication isexamined bytheArbitrage Court within 15daysperiod, fromthemoment
ofsubmitting theapplication.
Inorder toreview theclaim, concerning thelicensing ofservices indebate sector, thesuppliers
ofservices ortheservice customer shallapply totheAppeal Court, which operates at“Sakstandarti ”
under thespecial rules.
(b) Qualification requirements andlicensing procedures andregistration
Qualification requirements, technical standards andprocedures forthesuppliers ofservices
areprovided bythesectoral laws, bilateral ormultilateral agreements and/or regulations issued by
theministries andDepartments, Governmental andother Stategoverning institutions oftheGeorgia.
Forallservice activities subject toalicence theministries orauthorized bodies responsible
forthesupervision ofsuchactivities maydetermine licensing orregistration procedures through
ministerial orders andinstructions. Suchorders andinstructions havetoberegistered withtheMinistry
ofJustice.
(c) Monopolies andexclusive service suppliers
Inconnection withthemonopolies thefollowing lawsandresolution areadopted inGeorgia:
- thelaw“Onthemonopoly activities andcompetition ”,(25June1996 No.288-1s).
- regulationapprovedbytheMinistryofEconomy,“OntheStateregistrarofmonopolycompanies
andassociations ”,approved under thedecision ofthecolleague meeting (on30April 1993).
- theDecree No.334,dated from 20May1996, ofthePresident ofGeorgia “OntheState
registrar ofnatural monopolies ”.
Defacto government monopoly exists:
- inthetelecommunication services -Ministry oftelecommunication;
- "Sarkinigzo khazi" --department ofrailways;
- pipeline transport -State Company “Sakgazi ”.
- thesystem ofelectricity transmission ofhighvoltage -State company “Sakenergo ”,which
iscompiled intheMinistry ofEnergy;
- route anddispatch providing ofuseairspace -State company “Sakaeronavigatsia ”;
- Poti, Batumi andSukhumi ports -Marine Transport Department ofGeorgia. Incompliance
withtheResolution No.152,(dated 20March 1996) oftheParliament ofGeorgia, “Consumer
Rights protection Law”hasbeen enacted. Thislawdetermines legal, economical, social
principles forconsumer rights protection within theterritory ofGeorgia. Inaccordance with
theArticle 30ofthesame law,“Georgian Anti-monopoly Service forconsumer rights
protection ”undertakes theStatecontrol onfulfilment oftheGeorgian legislation concerning
theprotection ofconsumers rights.WT/ACC/GEO/3
Page68
Thedrafts for26normative actsarealready prepared. These normative actsestablish therules
onproviding services inseparate sectors. Thecoordination ofregulatory bodies andoffices controlling
normative actsisproduced byMain Department ofAnti-monopoly Policy oftheMinistry ofEconomy
(Thelistofnormative actsareattached inAnnex 3).
Exclusive Service Suppliers
StateInsurance Company posses theexclusive rights toprovide theinsurance ofthefollowing
type:
- State compulsory insurance forpassengers, onthebasis oftheDecree No.747dated from
20.10.93.
- State compulsory insurance fortheemployees ofState organizations andcompanies, Decree
No.94;
- State compulsory insurance oftheproperty oftheState companies andassociations, Decree
No.154,dated from 16.03.94.
- compulsory insurance ofagriculture crops; Decree No.523,(26.08.95)
TheMinistry ofTelecommunication andPostservices ortheorganizations established bythe
MinistrypossesstheexclusiverightsonproducingInternationaloperations.Theactivityisdemonopolized
intheother services.
(a) Safeguard measures
Georgia hasnolegalframework uponwhich itmight apply safeguard measures related totrade
inservices. Nosuchmeasures havebeenapplied.
(i) International transfers andpayment forcurrent transactions ofservices
Theinternational transfers andpayment related toproviding services, including capital transfer
arenotlimited inGeorgia. Inaccordance withtheDecree No.579,dated 3September 1996, ofthe
President ofGeorgia, theMinistry ofTrade andforeign-economic relations isauthorized toprovide
licensing andregistration offoreign investments, legalexpertise ofcontracts, licensing export-import
activities andregistration ofcontracts, specifying thequality andorigin oftheproduct. Thepurpose
istosupervise thetransactions ofthatkind.
(ii) Government procurement ofservices
TheregulatingregimeofStateprocurementintheservicessectoristhesameaswhilepurchasing
thegoods.
Consumer Subsidies forEssential Services
Inaccordance withtheamendment toNo.5intheInstruction No.(dated 31January 1994)
“Oncalculating VAT payment andspecifying therules forproducing thepayment ”aredetermined
theservice sectors where thesuppliers arefreefrom paying VAT.
Twenty percentofthepopulation exercises thepreferences inpaying theenergy charge. From
theother services onlybread factories paycharge onelectricity, withtariffs reduced to22percent.WT/ACC/GEO/3
Page69
Market Access andNational Treatment
(a) Limitations onthenumber ofservice suppliers
Limitations onthenumber ofservice suppliers areindicated inChapter (d)“Monopolies or
exclusive service suppliers ”.
(b) Limitations onthetotalvalue ofservices transactions orassets
Nolimitations existinGeorgia onthetotalvalue ofservice transactions orassets.
(c) Limitations onthetotalnumber ofservice operations oronthetotalquantity ofservice
output
Nosuchlimitations existinGeorgia.
(d) Limitations onthetotalnumber ofnatural persons thatmaybeemployed inaparticular
service sector
Thelimitations aredetermined under thelaw(27.07.93), “Onthetemporary entry, being
andexitofforeigners intheRepublic ofGeorgia ”.Onthebasis oftheArticle 5,paragraph 3ofthe
hereby law,incaseofarriving inGeorgia toperform jobactivities under thecontract basis, thevalidity
period ofvisaisdetermined bythecontract duration ”Working agreement canbemade onlyincase
ifthesame activity withthesame qualification cannotbeproduced bythecitizen ofGeorgia ornot
anycitizen ofGeorgia expressed thedesire toproduce thiswork. Thedecision about thisissueisgiven
bytheMinistry ofSocial Welfare, Labour andEmployment “.
(e) Restrictions on,orrequirements ofspecific types oflegal entity through which aservice
maybesupplied
Thatkindoflimitations areactive inthesub-sector ofJudicial services, where onlythecitizens
ofGeorgia canproduce notary, lawyer anddetective services.
(f) Limitations ontheparticipation offoreign capital
Nolimitation onparticipation offoreign exist.
(g) Measures providing forlessthanthetreatment accorded tonational services orservice
suppliers
Nomeasures orlawsaremaintained byGeorgia thatprovide forforeign services orservice
suppliers tobeaccorded treatment lessfavourable thanthatprovided tonational services orservice
suppliers.
Most-Favoured-Nation Treatment
NoregulationsaremaintainedbyGeorgia,contradictingtherequirementsofprimarysupporting
regime.
TheAgreement creating anEconomic Union between Georgia andtheother CIScountries
signed on24September 1993 provides forthefreecirculation notonlyofgoods butalsoofservices,
capital andmanpower.WT/ACC/GEO/3
Page70
VII. INSTITUTIONAL BASE FOR TRADE AND ECONOMIC RELATIONS WITH THIRD
COUNTRIES
1. Bilateral Agreements Relating toForeign Trade inGoods andTrade inServices
Under theConstitution ofGeorgia, ratification byParliament ofinternational agreements is
required, among otherconditions, iftheagreement envisages entrance intoaninternational organization
orrequires achange inGeorgian law.These would apply toanybilateral agreement including anm.f.n.
clause, anational treatment clause orafreetrade provision.
Georgiahassigned30bilateralagreementscontainingoneormoresubstantiveprovisionsdirectly
affecting foreign trade ingoods and/or services. Freetrade agreements havebeenconcluded with
Armenia, Azerbaijan, Russia, Turkmenistan, Ukraine andUzbekistan. Twenty-two agreements ontrade
andeconomic cooperation oreconomic relations havebeensigned (seeAnnex 7)ofwhich 7arewith
CIScountries.
Mutual investments havebeenprotected under theprovisions ofinvestment promotion and
protectionagreementsandtreatiesconcludedwithArmenia,Azerbaijan,theBelgo-LuxembourgEconomic
Union,Bulgaria,China,Greece,Iran,Israel,Turkmenistan,Ukraine,Uzbekistan(agreements),Germany,
Turkey, theUnited Kingdom, theUnited States ofAmerica (treaties).
Partnership andCooperation Agreement between Georgia andtheEuropean Communities andtheir
Member States
On22April1996thePartnershipandCooperationAgreementbetweenGeorgiaandtheEuropean
Union wassigned. According tothisagreement theparties shall accord tooneanother
most-favoured-nation treatment inallareas inrespect of:
- customs duties andcharges applied toimports andexports, including themethod ofcollecting
suchduties andcharges;
- provisions relating tocustoms clearance, transit, warehouses andtransshipment;
- taxes andother internal charges ofanykindapplied directly orindirectly toimported goods;
- methods ofpayment andthetransfer ofsuchpayments;
- therulesrelating tothesale,purchase, transport, distribution anduseofgoods onthedomestic
market.
These provisions donotapply to:
- advantages granted withtheaimofcreating acustoms union orafree-trade areaorpursuant
tothecreation ofsuchaunion orarea;
- advantages granted toparticular countries inaccordance withtheGATT andwithother
international arrangements infavour ofdeveloping countries;
- advantages accorded toadjacent countries inorder tofacilitate frontier traffic.
Theeconomic components ofthePCAcameintoeffect onthesigning oftheAgreement through
anInterim Agreement.WT/ACC/GEO/3
Page71
Georgia isabeneficiary oftheGeneralized System ofPreferences (GSP) provided bythe
European Union, Canada, Japan, Czech Republic, Slovak Republic andSwitzerland. TheGovernment
oftheUnited States ofAmerica considers nowtheissue ofincluding Georgia intoitsScheme of
beneficiaries ofGSP.
2. Economic Integration, Customs Union andFree-Trade Area Agreements
Georgia hassigned theAgreement ontheCreation ofanEconomic Union of24September 1993
(theCISEconomic Union Agreement), buttheParliament hasnotratified ityet.However itdidsign
theCISFreeTrade AreaAgreement under which theparties agree nottoimport orexport duties, levies
ofequivalent effect orquantitative restrictions ongoods originating intheterritory ofoneparty and
destined fortheterritory ofanother party. TheAgreement foresees thattheparties willmutually agree
onwhatgoods willbeexcluded from thefreetrade regime. Thishasnotyetbeendone and,inthe
meantime, theparties arefreetospecify thesegoods onabilateral basis(see1above). TheAgreement
prohibits aparty from re-exporting goods imported from another party under thefreetrade regime,
ifthatparty itself prohibits there-export tonon-CIS countries unless authorized bytheparty where
thegoods originated. TheAgreement alsorequires eachparty toauthorize freetransit overitsterritory
ofgoods originating inanother party anddestined forathirdparty.
TheAgreement alsorequires thesignatories toaccord national treatment withrespect to(i)
domestic taxes andlevies ofafiscal character, (ii)other restrictions orrequirements, and(iii)rules
ontransit, warehousing andpayment. Inaddition, parties arefreetotakequantitative orotherprotective
measures (i)ifnecessary because ofashortage, (ii)forbalance ofpayments reasons, or(iii)toredress
significant injury cause byimports, orthreat thereof, todomestic producers. Eachparty remains free
toadopt measures toprotect public health, morals, order andsecurity, plants andanimals, national
treasures andintellectual property.
TheCoalandMetal Association Agreement: ThisAgreement, signed by11CIScountries,
provides fortheestablishment oftheEurasian Association forCoal andMetal. Thegoals ofthe
association aretherational development ofthecoalandmetal-producing industries, thecoordination
ofscientific, technical andinvestment policies, andthepromotion ofconditions ofsupply andterms
ofsalebeneficial tobothseller andbuyer. TheAssociation isrequired totakeintoconsideration the
interests ofallmember countries, inamanner thatprevents unfair competition andthecreation of
monopolies.
3. Labour Markets Integration Agreements
On15April 1994, Georgia signed anagreement withtheother CIScountries entitled the
AgreementonCooperationintheSphereofLabourMigrationandontheProtectionofWorkerMigratory
Rights.
4. Multilateral Economic Cooperation, Membership intheMultilateral Economic
Organizations, Trade-Related Programmes ofOther Multilateral Organizations
Georgia isaparticipating State intheBlack SeaEconomic Cooperation (BSEC) which was
established on25June1992.
On9December 1993Georgia became amember oftheCommonwealth ofIndependent States
(CIS).
Georgia isamember inthefollowing multilateral economic organizations: CCC -Customs
Cooperation Council; EBRD -European BankforReconstruction andDevelopment; ECOSOC -United
NationsEconomicandSocialCouncil;EUTELSAT-EuropeanTelecommunicationSatelliteOrganization;WT/ACC/GEO/3
Page72
FAO -Food andAgriculture Organization; IAEA -International Atomic Energy Agency; ICAO -
International Civil Aviation Organization; IFAD -International Fund forAgricultural Development;
ILO-International Labour Organization; IMF-International Monetary Fund; IMO -International
MaritimeOrganization;INMARSAT-InternationalMaritimeSatelliteOrganization;IOM-International
Organization forMigration; IRTO -International Road Traffic Organization; ITC-International Trade
Centre; ITU-International Telecommunication Union; OCSE -Organization forSecurity and
Cooperation inEurope; UNCTAD -United Nations Conference onTrade andDevelopment; UNDP
-UnitedNationsDevelopmentProgramme;UNECE-UnitedNationsEconomicCommissionforEurope;
UNEP -‘United Nations Environmental Programme; UNIDO -United Nations Industrial Development
Organization; UPU -Universal Postal Union; WFP -World Food Programme; WHO -World Health
Organization; WIPO -World Intellectual Property Organization; WMO -World Meteorological
Organization; World Bank: IBRD -International Bank forReconstruction andDevelopment, IDA-
International Development Association, IFC-International Finance Corporation, MIGA -Multilateral
Investment Guarantee Agency; WTO -World Tourism Organization.WT/ACC/GEO/3
Page73
ANNEX 1
Statistics andPublications
Foreign trade statistics forgood andservices: responsible agencies
According totheLaw"OnStatistics", which wasadopted bytheParliament ofGeorgia on
24May1994, theState Department ofSocio-Economic Information ofGeorgia isresponsible for
collection, processing anddelivery oftheofficial statistical information totheconsumer.
Publications related tostatistics
TheStateDepartmentofSocio-EconomicInformationofGeorgiaanditsinformationalpublishing
centre publish thefollowing kinds ofpublications:
Name ofPublication Periodicity
1 Socio-Economic Situation ofGeorgia monthly
2 Georgia inFigures annual
3 Georgia inFigures, 1994 (prepared inaccordance withtheTACIS
programme) -English
4 Social andDemographic Situation ofGeorgia (published firsttime
onthebasis ofeight months results of1996)
5 Balance ofPayments ofGeorgia quarterly
6 Georgian 1994 (prepared together withGerman experts)
7 Socio-Economic Situation ofRegions ofGeorgia (publishing started
from thefourth quarter of1996)quarterly
8 Basic Socio-Economic Indicators ofGeorgia monthly
9 Basic Indicators ofIndustrial Development ofGeorgia monthly
10 Results ofCensus ofLive-Stock annual
11 Final Report onProduction ofFood annual
12 Areas Sown toAgricultural Cultures annual
13 Areas andCrop Capacity ofAnnual Agricultural Cultures and
Perennial Plantations
14 Live-Stock Raising Situation inGeorgia annual
15Readiness ofAgricultural Machinery andConsumption ofFuel quarterly
16 Live-Stock Raising Situation inGeorgia monthly
17 Course ofProduction ofFood monthly
18 Course ofSowing ofAgricultural Cultures monthly
19 Harvest ofAgricultural Cultures monthly
20 Express Information onPrices weekly
21 Statistical Observation overPrices ofBread andFlour weekly
22 Volume ofRetail Trade Turnover inGeorgia monthly
23 Volume ofPaidService forPopulation inGeorgia monthly
24 Volume ofWholesale Trade Turnover inGeorgia monthlyWT/ACC/GEO/3
Page74
Statistical data:
(a) Main economic indicators
(i) Gross Domestic Product (GDP)
Table: Gross Domestic Product andItsElements for1990-1995
(million US$)
1990 1991 1992 1993 1994 1995 1996
Total 11264 9000 4968 2195 1683 2440 3602
%toprevious year
among them:- 79.9 55.2 70.7 109 103.3 111.2
Industry 2602 2411 628 139 138 352 489
%toprevious year - 74.6 43.2 80.4 87.4 94.5 107
Agriculture 3373 2396 2707 1487 1085 925 1135
%toprevious year - 83.8 61.6 59.6 121.9 125.3 105
Construction 991 706 333 14 27 98 178
%toprevious year - 67.1 55.7 20.7 121.3 114.6 125
Health care, physical culture
andsocial security 295 305 90 20 18 37 58
%toprevious year - 96.3 87.8 54.3 130.0 61.0 -
Education 496 469 149 25 25 50 86
%toprevious year - 96.2 79.7 95.9 111 94.1 -
Source: State Department ofSocio-Economic Information1
1US$1wasequal to0.58Russian Rouble in1990, to0.57Russian Rouble in1991, 0.57Russian
Rouble in1992, 12,280.4 Georgian Coupons in1993, 1,073,326.5 Georgian Coupons, 1.2895 Georgian
Lari.
Dataof1990, 1991, 1992arecalculated according tothefollowing courses because ofunreal
exchange rateofcurrency: 1990-US$1=1.32Russian Rouble, 1991-US$1=2.12Russian Rouble,
1992 -US$1=27.84 Russian Rouble.
Percent toprevious yeariscalculated incomparative prices.
InGeorgia, aswellasinother countries intransition, systematic decline inexchange efficiency
ofUSDollar takes place (theprice ofUSDollar grows much slower withrespect tothenational
currency, thanwithrespect totheprice ofgoods). Theprocess ofquick approach oftheprices ofthe
internalmarketofthecountrytothepricesoftheworldmarketcontinues.Therefore,theGrossDomestic
Product anditselements, calculated inthenational currency, expose veryofteninterms ofUSDollars
according totheofficial exchange ratethenominal growth evenunder conditions oftheirrealdecrease.WT/ACC/GEO/3
Page75
(ii) GDP percapita
1990 1991 1992 1993 1994 1995 1996
mln.US$ 11,264 9,000 4,968 2,195 1,683 2,440 3602
percapita, US$ 2,063 1,647 911 404 310 451 665
Source: State Department ofSocio-Economic Information
Table: Georgia: GDP intheField ofServices
1993 1994 1995 1996
%mln.Lari %mln.Lari %mln.Lari % mln.Lari
GDP Total 100 27.0 100 1806.6 100 3147.0 100 4547.0
from this:
inthefieldofservices 17 4.621.4 386.6 36.2 1139.0 42.1 1914.0
Source: State Department ofSocio-Economic Information
(iii) Budget
Table: General Government Budget for1996
(inthousand Lari)
Revenues Total Central
BudgetLocal
BudgetsState
Funds
Revenues andgrants 555,089 335,047 135,091 93,691
Total revenues 505,989 276,106 136,192 93,691
Total taxrevenues 377,794 252,807 124,987 -
Income tax 39,300 18,450 20,850 -
VAT 149,024 106,687 42,337 -
Excise 34,200 34,200 - -
Taxonprofit andtaxfrom enterprises 69,170 34,920 34,250 -
Customs duties 26,900 26,900 - -
Other taxes, total 59,200 31,650 27,550 -
Capital revenues 3,000 1,800 1,200 -
Non-tax revenue 31,504 21,499 10,005 -
Revenue ofState Special Funds 93,691 - -93,691
ofwhich:
United State Social Security andMedical
Insurance Fund 72,800 - -72,800
United State Employment Fund 2,200 - - 2,200
State Roads Fund 11,497 - -11,497WT/ACC/GEO/3
Page76
Revenues Total Central
BudgetLocal
BudgetsState
Funds
Central State Health CareFund 7,194 - - 7,194
Grants 49,100 58,941 -1,101 -
ofwhich:
from saleofwheat supplied bytheUSA 20,200 20,200 - -
from saleofwheat supplied bytheEU 17,300 17,300 - -
from saleofwheat supplied bytheEU
directed forinvestment inagriculture 11,600 11,600 - -
Transfers from localbudgets - 9,841 -9,841 -
Transfers tolocalbudgets - -8,740 8,740 -
(inthousand Lari)
Central budget expenditure 564,575 As%oftotal
central expenditure
Sectoral financing 19,867.9 3.52%
Education 21,262 3.77%
Science 11,948 2.12%
Culture andmedia 17,328 3.07%
Health Care(State Health Fund) 16,957 3.00%
Sport 2,138 0.38%
Social Security 82,605.6 14.63%
Defense 65,032.2 11.52%
Lawenforcement bodies 67,230 11.91%
Legislative bodies 5,249.7 0.93%
Executive bodies 20,491.6 3.63%
State debtservicing 61,606 10.91%
domestic debt 10,887
foreign debt 12,559
rescheduled debt 38,160
Membership ofinternational bodies 6,100 1.08%
Budgetary wages andsocial benefits 45,834.6 8.12%
Other expenses 63,670.2 11.28%
foreign arrears 29,327
domestic arrears 20,004
Presidential Reserve Fund 6,000 1.06%
Ministry ofFinance Reserve Fund 2,000 0.35%
Capital Expenditure 47,459 8.41%WT/ACC/GEO/3
Page77
Central budget expenditure 564,575 As%oftotal
central expenditure
investment projects financed byforeign credits
21,117
Georgia 'sshare inthese projects 4,566
EUinvestment inagriculture 11,700
Fund from privatization receipts 1,800 0.32%
As%ofgeneral
government
expenditure
State funds totalexpenditure 154,844 19.7%
Pensions fund 111,000
Employment fund 2,200
Health carefund 24,147
Roads fund 17,497
States funds transfers from central budget 61,153
State funds expenditure minus transfers from centre 93,691
Local budget totalexpenditure 135,091 17.2%
Transfers from centre 8,740
Local budget expenditure minus transfers from centre 126,351
General Government expenditures 784,617
General Government Deficit -229,528 -29.25%
Financing 229,528
NBG credit 110,921
World Bank credit 118,607
Source: State Department ofSocio-Economic InformationWT/ACC/GEO/3
Page78(iv) Production andconsumption ofthebasic goods
Table: Production ofseveral kinds ofindustrial products inkind(1989-1995)
1989 1990 1991 1992 1993 1994 1995 1996*
Electrical energy, bln.kwthour 15.8 14.2 13.4 11.5 10.2 7.0 7.1 7.1
Coal, thsd. tons 1,152.0 956.0 689.0 181.0 82.2 44.5 42.6 22.5
Oil,thsd. tons 184.8 186.0 180.9 125.0 88.2 66.9 42.7 127.9
Natural gas,mln.cub.m 59.4 59.9 44.9 37.9 21.8 11.4 3.3 3.3
Petrol, thsd. tons 404.0 398.5 342.4 71.9 18.6 8.8 3.3 -
Diesel fuel,thsd. tons 641.9 657.6 494.7 110.8 34.5 17.9 6.4 4.5
Mazut, thsd. tons 910.4 898.2 763.6 189.1 72.8 24.8 11.7 6.8
Castiron, thsd. tons 665.8 624.8 500.8 242.3 4.3 - 1.7 -
Steal, thsd. tons 1,428.8 1,315.3 966.5 532.0 221.7 121.3 88.4 82.7
Steal tubes,
thsd. m 26,453 26,681 24,585 12,394 5,536 2,202 1,721 -
tons 503,982 499,374 452,809 208,047 110,203 39,289 37,844 32,717
Manganese ore(forcommodities), thsd. tons 1,650.3 1,251.6 491.0 292.5 36.8 29.3 41.9 99.9
Carbon electroferrous manganese (76%), tons 84,041 42,405 16,309 9,973 6,893 2,444 64 1041.0
Metal electro-manganese (90%), tons 2,095 1,736 1,003 290 164 171 80 -
Alternating current motors, thsd. pieces 236.2 187.7 63.3 17.5 23.3 0.7 3.5 3.3
Metal-cutting machine tools, pieces 1,984 1,568 1,417 1,001 348 109 57 18
Electric welding equipment, thsd. pieces 18.0 16.1 10.4 5.7 3.9 1.1 0.3 0.1
Mineral fertilizers, (interms of100% nutrient
substance), thsd. tons 155.1 130.0 134.5 76.6 58.6 34.0 42.7 67.9
Chemical fibres andfilaments, thsd. tons 37.8 32.4 20.0 4.5 8.0 0.9 0.2 0.9
Synthetic ammonia, thsd. tons 261.8 219.2 187.4 117.3 91.0 52.5 65.6 93.2
Synthetic resins andplastics, thsd. tons 39.6 40.1 26.4 7.6 10.2 2.1 0.6 -
Synthetic detergents andcleansing soap, tons 25,696 20,580 13,040 2,479 2,154 1200.1 436 88.3
*Preliminary dataonthebasis ofurgent calculationWT/ACC/GEO/3
Page791989 1990 1991 1992 1993 1994 1995 1996*
Sown timber, thsd. cubm 531.0 551.0 313.1 35.6 8.5 4.4 7.1 6.0
Paper, thsd. tons 28.0 26.6 20.5 2.2 0.03 0.1 - 0.02
Corrugated asbestos board, mln.conventional tiles 35.4 26.4 12.6 9.9 4.1 0.6 0.1 -
Precast reinforced concrete constructions and
products, thsd. cub.m 2,230.4 2,449.6 1,451.2 208.3 85.8 13.0 11.3 3.8
Cement, thsd. tons 1,530 1,290 820.9 425.9 277.6 86.8 59.0 84.7
Ceramic tiles, thsd. sq.m 813.0 678.8 348.3 2.0 0.3 ... ... ...
Building brick, mln.pieces 271.3 264.7 170.6 47.3 22.8 9.1 6.6 17.4
Porcelain-faience andmajolica plates anddishes,
mln.pieces 13.5 11.7 5.9 0.8 0.1 0.1 0.3 0.3
Colour television set,thsd. pieces 63.2 51.3 39.2 8.0 0.9 0.1 0.2 0.6
School writing-books, mln.pieces 72.3 71.0 39.7 11.8 - - 0.02 0.1
Silkthread, tons 316.0 268.0 171.2 110.0 37.2 11.6 28.3 -
Cotton yarn, thsd. tons 10.9 10.5 6.6 5.0 2.6 0.8 0.6 0.6
Shawl yarn, thsd. tons 8.4 8.0 4.1 2.4 1.5 0.3 0.3 0.2
Sock wear, mln.pairs 31.9 30.4 14.1 9.5 6.2 1.1 0.4 0.2
Knitted wear, mln.pieces 56.2 51.5 24.3 7.8 3.2 1.0 0.5 0.2
Foot-wear, mln.pair 16.5 17.0 12.2 2.6 1.0 0.2 0.05 0.02
Cloths (total), mln.sq.m 122.8 111.3 66.4 31.7 15.9 3.5 2.0 1.2
cotton 44.5 34.1 16.7 12.9 7.5 1.5 0.6 0.5
shawl 9.5 9.6 6.1 3.6 1.9 0.6 0.4 0.2
silk 48.2 45.9 27.1 10.1 4.7 0.9 0.8 0.5
Carpet andcarpet articles, thsd. sq.m 912 826 549 128 89 24.3 - 5.7
Granulated sugar, thsd. tons 32.0 33.8 11.3 2.0 0.8 0.2 0.2 19.6
Meat, thsd. tons 98.2 76.7 31.2 6.5 3.4 0.4 0.07 0.07
Sausages, thsd. tons 35.6 27.1 12.7 4.3 0.5 0.2 0.2 0.3
Fishing, thsd. tons 148.4 104.7 56.1 1.9 1.4 0.3 0.8 0.1
Butter, thsd. tons 1.2 0.9 0.6 0.2 0.08 0.03 0.02 0.02WT/ACC/GEO/3
Page801989 1990 1991 1992 1993 1994 1995 1996*
Plant oil,thsd. tons 9.3 14.3 7.4 1.4 0.5 0.01 0.01 0.01
Natural tea,thsd. tons 140.2 125.6 89.2 32.9 16.4 4.5 2.7 2.5
Non-alcoholic drinks, decalitres 14.3 14.4 7.9 2.7 0.6 0.4 0.6 1.5
Mineral water, mln.0.5litre 243.1 224.2 158.6 61.6 26.6 9.0 8.8 32.9
Cigarettes, bln.pieces 11.8 11.2 9.8 5.0 3.6 3.3 1.8 1.1
Soap, thsd. tons 19.9 12.7 6.9 1.2 1.4 1.1 0.4 0.1
Liquor-vodka products, thsd. decalitres 667.0 822.0 774.0 647.0 1.187 229.1 81.3 180.6
Grape wine, thsd. decalitres 17,339 16,283 12,696 17,970 10,860 4,363 4,123 2,241
Champaign, thsd. bottles 18,080 18,143 13,801 9,736 5,912 214.3 61.5 44.3
Cognac, thsd. decalitres 2,278.0 2,165.0 1,460.0 1,358.0 1,023.0 282 116.8 84.7
Beer, thsd. decalitres 9,103.0 9,477.0 6,011.0 2,352.0 1,204.0 632.1 662.0 491.3
Source: State Department ofSocio-Economic Information
*Preliminary dataonthebasis ofurgent calculationWT/ACC/GEO/3
Page81
Table: Production ofseveral kinds ofagricultural products inkind, during ninemonths
(1995-1996)
1995 1996 %
Live-stock andpoultry, tons 124 150 121
Milk, tons 475 530 112
Eggs, thousand pieces 269 350 130
Silkcocoon, metric centners 50 50 100
Tea,tons 38 34 89
Grapes, tons 422 350 83
Fruits, tons 384 250 65
Source: State Department ofSocio-Economic Information
(v) Annual changes inprices
Table: Dynamics ofconsumer prices, inrespect ofprevious year(%)
1994 1995 1996
Consumer price index 6,500 157.4 113.5
Source: State Department ofSocio-Economic Information
(vi) Employment indifferent sectors
(vii) Levels ofemployment
Table: Employment bysector (yearly average, inthousands)
1990 1992 1994 1995 1996
Total population 5,417.60 5,412.40 5,380.30 5,374.3 -
Labour resources 3,175.50 3,138.00 3,063.90 3,033.90 3,100
Total employment 2,763.30 1,984.20 1,749.7 1,730.00 1,730
Material sphere 1,919.30 1,367 1,202.50 1,169.10 1,185
Industry 559.8 354.6 277.3 254 226
Agriculture 695 639.8 539 510 560
Construction 280.6 135.4 64.1 89.8 60
Transport/communication 114.9 74.9 89.7 90.3 114
Trade andcatering 257.3 146.7 226.5 219 221
Other 11.7 9.5 5.9 6 4
Non-material sphere 844 617.2 547.2 560.9 548
Education/culture/art 310 239.3 231.7 239.8 241
Healthcare 183.8 159.4 154.6 160.1 150WT/ACC/GEO/3
Page82
1990 1992 1994 1995 1996
Science/research 73.2 42.1 36.4 36 25
Other 277 176.4 124.5 125 132
Source: Ministry ofEconomy
(viii) Balance ofpayments
Table: Balance ofPayments in1992-1995 (US$ millions)
1992 1993 1994 1994:
H11994:
H21995: 1996:
Current Account -247.7 -354 -276.0 -237.7 -38.3 -363.5 -406.1
Trade Balance -377.9 -448.3 -363.2 -225.6 -137.6 -421.6 -419.7
Exports 266.6 457 380.7 118.9 261.8 289.5 290.4
Imports -644.5 -905.3 -743.9 -344.5 -399.4 -711.1 -710.1
Non-factor services 22.7 -17.2 -47.4 -42.2 -5.2 4.9 0.1
Credits 102.0 49.8 52.2 110.5 93.9
Debits -149.4 -92 -57.4 -105.6 -93.8
Factor services 36.3 -19.7 -35.4 -5.7 -29.7 -60.7 -70.8
Credits 4.0 5.2
Debits -64.5 -76.0
Transfers (net) 71.2 131.2 170.0 35.8 134.2 113.9 84.1
Capital Account 248 305.6 159.4 266.0 -106.6 210.3 323.9
Direct Investment
Portfolio Investment
Other Capital 183.1 236.4 -53.3 -91.2 276.9
Loans 94.1 33.4 60.7 45.5 45
Debt service -117.8 -3.8 -114.0 256.0 231.9
Errors andOmissions 20.2 20.2 112.5 106.3
Total Balance 0.3 -48.4 -96.4 48.5 -144.9 -40.7 24.1
Source: State Department ofSocio-Economic InformationWT/ACC/GEO/3
Page83(ix) Foreign exchange
Table: Nominal andRealExchange Rates oftheLariagainst theUSDollar
Nominal Exchange Rate*Consumer Price Index RealExchange Rates
Rebased toDecember 1994=100 December 1994=100
GEL/USD Georgia USA GEL/USD
TICEX FXB FXB
1994 Dec 1.4047 1.5616 100.00 100.00 100.00
1995 Jan 1.2856 1.4920 113.03 100.40 84.87
Feb 1.3000 1.3780 113.91 100.80 78.09
Mar 1.3000 1.4000 110.45 101.14 82.09
Apr 1.3000 1.3750 109.33 101.47 81.72
May 1.3000 1.3750 114.94 101.67 77.88
Jun 1.3000 1.3550 113.59 101.87 77.82
Jul 1.3000 1.3235 114.61 101.87 75.33
Aug 1.3000 1.3150 118.36 102.14 72.67
Sep 1.3000 1.2750 123.17 102.34 67.84
Oct 1.2500 1.2500 152.00 102.67 54.07
Nov 1.2500 1.2605 152.20 102.61 54.42
Dec 1.2300 1.2375 157.40 102.54 51.62
1996 Jan 1.2490 1.2645 161.49 103.14 51.71
Feb 1.2600 1.2685 167.05 103.47 50.32
Mar 1.2620 1.2640 172.20 104.01 48.89
Apr 1.2580 1.2565 174.24 104.41 48.21
May 1.2600 1.2615 174.87 104.61 48.32
Jun 1.2550 1.2475 176.24 104.67 47.44
Jul 1.2640 1.2610
Aug 1.2670 1.2630
Sep 1.2700 1.2720WT/ACC/GEO/3
Page84Nominal Exchange Rate*Consumer Price Index RealExchange Rates
Rebased toDecember 1994=100 December 1994=100
GEL/USD Georgia USA GEL/USD
TICEX FXB FXB
Oct 1.2700 1.2784
Nov 1.2750 1.2875
Dec 1.2805 1.2872
1997 Jan 1.2835 1.3000
Feb 1.2870 1.2940
Sources: Nominal Exchange Rates -National Bank ofGeorgia;
Consumer Price Index: Georgia -State Department ofSocio-Economic
Information; USA -Government oftheUSA, Department ofLabor,
Bureau ofLabor Statistics.
Notes: UptoSeptember 1995 theGeorgian Lari=1,000,000 Georgian Coupons
*AsoftheendofeachmonthWT/ACC/GEO/3
Page85
Table: GEL/USD Rates onTICEX andFXBMarkets, September 1995-February 1997
TICEX EndofPeriod Period Average High Low
1995 September 1.3000
October 1.2500 1.2715 1.2500 1.3000
November 1.2500 1.2551 1.2450 1.2700
December 1.2300 1.2485 1.2300 1.2600
1996 January 1.2490 1.2431 1.2300 1.2500
February 1.2600 1.2542 1.2500 1.2600
March 1.2620 1.2601 1.2570 1.2620
April 1.2580 1.2572 1.2520 1.2620
May 1.2600 1.2592 1.2550 1.2600
June 1.2550 1.2594 1.2550 1.2610
July 1.2600 1.2640 11.2670 1.2600
August 1.2670 1.2670 1.2690 1.2650
September 1.2700 1.2720 1.2780 1.27
October 1.2700 1.2700 1.2700 1.2700
November 1.2800 1.2750 1.2800 1.2700
December 1.2740 1.2805 1.2820 1.2740
1997 January 1.2870 1.2835 1.2870 1.2740
February 1.2900 1.2870 1.2920 1.2850
FXB
1995 September 1.2750
October 1.2500 1.2596 1.2500 1.2650
November 1.2605 1.2545 1.2450 1.2650
December 1.2375 1.2494 1.2325 1.2575
1996 January 1.2645 1.2601 1.2520 1.2855
February 1.2685 1.2645 1.2625 1.2685
March 1.2640 1.2680 1.2640 1.2705
April 1.2565 1.2617 1.2550 1.2645
May 1.2615 1.2613 1.2570 1.2640
June 1.2475 1.2563 1.2475 1.2625
July 1.2630 1.2610 1.2650 1.2570
August 1.2680 1.2670 1.2680 1.2650
September 1.2780 1.2720 1.2780 1.2700
October 1.2880 1.2784 1.2880 1.2820
November 1.2890 1.2875 1.2890 1.2840
December 1.2800 1.2872 1.2900 1.2800
1997 January 1.294 1.3000 1.3200 1.2940
February 1.293 1.2940 1.2930 1.2950
Source: National Bank ofGeorgiaWT/ACC/GEO/3
Page86
(b) Foreign trade statistics
(i) Foreign trade (aggregates atthetwo-digit HSlevel)
Table: Georgia: Export-Import ofServices bysector (thousand US$)
Export (Credit) Import (Debit)
1994 1995 1996 1994 1995 1996
Total 102020 110544 93937 155379 105620 93675
Transport service 95239 100281 70407 153710 80995 77557
Maritime transport 70695 51658 33486 61835 43427 51231
Freight 66460 37148 19007 9801 21821 38284
Passengers ’service - - - - - -
Other services 4235 14510 14479 52064 21606 12947
Airtransport 7491 19947 13209 5372 13744 17078
Freight 318 806 836 3069 6793 11883
Passengers ’service 6770 16027 9372 - - -
Other services 403 3114 3001 2303 6951 5195
Railway transport 16626 19815 13593 1599 3407 5880
Freight - - 13593 1599 3407 5880
Passengers ’service - - - - - -
Other services 16626 19815 - - - -
Road transport 428 4 55 904 1947 3368
Freight - - - 904 1947 3368
Passengers ’service - - - - - -
Other services 428 4 55 - - -
Pipelines - 8857 10064 84000 18471 -
Tourism 5654 5732 7515 90 22950 10010
Business 5654 5732 7515 90 - -
Other - - - - 22950 10010
Foreign armforces - - - - - -
Communications 1127 4531 13251 1017 1039 394
Construction - - - - - -
Insurance - - - 38 35 -
Financial service - - - - - -
Computer and
information service - - - - - -
Patent andcopyright
service - - - - - -
Governmental service - - 2764 524 601 5714
Source: State Department ofSocio-Economic InformationWT/ACC/GEO/3
Page87
Table: Georgia: Export-Import ofServices bysector
(percent)
Export (Credit) Import (Debit)
1994 1995 1996 1994 1995 1996
Total 100.0 100.0 100.0 100.0 100.0 100.0
Transport service 93.4 90.7 75.0 98.9 76.7 82.8
Maritime transport 69.3 46.7 35.6 39.8 41.2 54.7
Airtransport 7.3 18.1 14.1 3.5 13.0 18.2
Railway transport 16.4 17.9 14.5 1.0 3.2 6.3
Road transport 0.4 0.0 0.1 0.6 1.8 3.6
Pipelines - 8.0 10.7 54.0 17.5 0.0
Tourism 5.5 5.2 8.0 - 21.7 10.7
Communications 1.1 4.1 14.1 0.8 1.0 0.4
Insurance - - - - - -
Governmental service - - 2.9 0.3 0.6 6.1
Source: State Department ofSocio-Economic Information
(ii) Export statistics
Table: Export ofGeorgia according tothegroups ofproducts (thousand ofUS$)
Name ofProduct 1993 1994 1995 1996
1 Livecattle andproducts ofanimal origin 98.1 37.4 413.4 835
2 Products ofplant origin 55673.5 19974.3 19735.5 37144.9
3 Fatsandoilsofanimal andplant origin 145.0 486.0 139.1 434.4
4 Ready foodproducts; alcohol andsoft
drinks, tobacco anditssubstitutes 22778.2 11625.7 19111.3 21635.3
5 Mineral products 20103.8 14520.4 21231.8 52159
6 Products ofchemical industry 15186.0 13931.9 13138.7 19900.5
7 Plasmas anditsproducts 1679.5 3740.6 1790.7 2155.1
8 Rawmaterial ofleather, leather, natural fur
anditsproducts 455.5 1242.5 986.7 1766.9
9 Wood anditsproducts, wooden coal 527.0 35.6 463.4 2494.1
10 Paper mass, remains ofpaper andpaste
board, spoilt sheet, paper, paste board and
itsproducts 1022.2 2670.5 2536.2 10341
11 Clothes andtextile products 15511.9 13601.2 5183.9 5696.7
12 Shoes, scarves, umbrellas, walking-stick 4139.5 862.7 41.4 631.8
13 Stone, gyps, cement products 553.2 714.2 889.8 825.2
14 Pear, precious andsemiprecious stones,
precious metals, coins 10067.0 976.7 1185.6 681.1WT/ACC/GEO/3
Page88
Name ofProduct 1993 1994 1995 1996
15 Nonprecious metals andtheirarticles 66785.9 49423.1 56428.7 30429.4
16 Machinery, equipment andmechanisms 8133.1 18075.8 7485.4 7703,5
17 Overland, airandmaritime transport means 3021.7 2991.1 2973.7 3528.6
18 Optical, medical, measuring equipment and
apparatus,316.8 167.7 216.9 389.2
19 Weapons, fighting means andtheirparts 0.0 25.0 3.8 0.0
20 Other industrial goods 559.8 1491.6 296.4 632
21 Works ofart,collection andantique articles 0.3 2.0 2.4 14.1
Humanitarian anddiplomatic cargo 0.0 149.7 59.4 0
Total 226758.0 155745.7 154314.2 199397.6
Source: State Department ofSocio-Economic Information
(iii) Import statistics
(iv) Imports from main suppliers, preferably atatariff linelevel
Table: Import ofGeorgia according tothegroups ofproducts (thousand ofUS$)
Name ofProduct 1993 1994 1995 1996
1Livecattle andproducts ofanimal origin 4752.5 4297.3 9301.8 14478.9
2Products ofplant origin 4928 4186.8 21982.9 123322.5
3Fatsandoilsofanimal andplant origin 5523.9 3938.6 9192.3 5815.7
4Ready foodproducts; alcohol andsoftdrinks,
tobacco anditssubstitutes 20881 18042.2 66913.5 85905.4
5Mineral products 166247.3 267872.1 194836.6 254937.4
6Products ofchemical industry 5161 2753 8561.3 28689.5
7Plasmas anditsproducts 897.9 4283.2 4286.8 7130.3
8Rawmaterial ofleather, leather, natural fur
anditsproducts 236.5 269.5 300.2 124.0
9Wood anditsproducts, wooden coal 329.3 425.4 214.2 1149.6
10Paper mass, remains ofpaper andpaste
board, spoilt sheet, paper, paste board andits
products 593.8 350.9 1729.3 9813.0
11Clothes andtextile products 4626.1 1687.4 4091.1 8411.4
12Shoes, scarves, umbrellas, walking-stick 1189.4 706.7 1930.7 2595.5
13Stone, gyps, cement products 4003.1 2510 3747.7 10677.1
14Pear, precious andsemiprecious stones,
precious metals, artificial jewelry, coins 3250 81.9 628.8 197.8
15Nonprecious metals andtheirarticles 3921 1329.1 2154.2 10551.6
16Machinery, equipment andmechanisms 6786.7 10056.6 17717.4 49502.9
17Overland, airandmaritime transport means 3484.9 1520.1 2741.4 10029.1WT/ACC/GEO/3
Page89
Name ofProduct 1993 1994 1995 1996
18Optical, medical, measuring equipment and
apparatus, 284.4 1460 678 5144.0
19Weapons, fighting means andtheirparts 0 109.5 79.2 393.7
20Other industrial goods 1356.2 1281.2 1167.1 5207.5
21Works ofart,collection andantique articles 0 1.1 25.1
Humanitarian anddiplomatic cargo 263.5 3592.5 22477.9
Total 238453 327425 355848.3 656580.1
Source: State Department ofSocio-Economic Information
Table: Georgia: Structure ofExport andImport, 1996 inthousands US$
CISCountries Non-CIS Countries Total
Export
Goods 128622 70775 199397
ofwhich:
Electric energy 5703 7410 13113
Natural gas 0 0 0
Cross-border trade 31000 60000 91000
Shipsupplies 0 0 0
Humanitarian aid 0 0 0
Total Exports 159622 130775 290397
Import
Goods 167474 403283 570757
ofwhich:
Electric energy 12127 2253 14280
Natural gas 85823 0 85823
Cross-border trade 16000 28000 44000
Shipsupplies 3119 6113 9232
Humanitarian aid 0 84118 84118
Total Imports 186593 521514 708107
Trade balance -26971 -390739 -417710
Source: State Department ofSocio-Economic InformationWT/ACC/GEO/3
Page90
(v) Trade bygeographic areas (main trade partners)
Table: Georgia: main trade partners in1995
mln.US$ %oftotal
Foreign trade turnover, total 510.2 100.0
Turkey 111.4 21.8
Russia 94.2 18.5
Azerbaijan 51.7 10.1
Turkmenistan 48.1 9.4
Bulgaria 30.0 5.9
Armenia 29.6 5.8
Romania 28.2 5.5
USA 13.6 2.7
Ukraine 12.5 2.5
United Kingdom 11.0 2.2
Main partner countries, total 430.5 84
Source: State Department ofSocio-Economic Information
Table: Georgia: main trade partners in1996
million US$ %oftotal
Foreign trade turnover, total 856.0 100
Russia 179.7 21.0
Turkey 98.4 11.5
Azerbaijan 95.4 11.1
Bulgaria 51.2 6.0
USA 44.8 5.2
Ukraine 40.3 4.7
United Kingdom 39.3 4.6
Romania 38.8 4.5
Armenia 37.1 4.3
Italy 31.5 3.7
Main-partner countries, total 656.5 76.7
Source: State Department ofSocio-Economic InformationWT/ACC/GEO/3
Page91
Table: Georgia: external trade balance bycountry (thousand US$)
(1995-1996 January-June)
Export (fob) Import (fob) Balance
1995 1996 1995 1996 1995 1996
Total 154314 199398 355848 656580 -201534 -457183
withFSUcountries 96121 128624 147120 253297 -50999 -124673
Azerbaijan 12743 24856 38961 70559 -26219 -45703
Armenia 18908 20518 11095 16535 7813 3983
Belarus 2106 1398 954 2385 1153 -987
Estonia 146 171 65 110 67 61
Kazakstan 1785 2425 138 761 1646 1664
Kyrgyzstan 506 316 - 35 506 281
Latvia 11 333 31 69 -21 263
Lithuania 85 0 409 955 -323 -955
Moldova 154 104 155 119 -1 -14
Russia 47023 56819 47208 122902 -185 -66083
Tajikistan 252 486 4 6 247 480
Turkmenistan 6917 13432 41218 4197 -34301 9235
Ukraine 5606 5413 6910 34918 -1303 -29506
Uzbekistan 628 2857 477 881 151 1976
withother countries 58193 70774 208728 403283 -150535 -322509
Afghanistan 26 88 - - 26 88
Albania 267 - 267
Anguilia 375 - - 1216 375 -1216
Australia - - 131 839 -131 -839
Austria 30 42 9120 7531 -9091 -7489
Bahamas - - 599 - -599 -
Belgium 30 176 1626 4594 -1596 -4418
Bulgaria 5657 12181 23974 38976 -18316 -26795
Butane - - - -
Canada 9 - 3 70 5 -70
China 662 342 48 1257 614 -915
Korea, PDR - 61 - 1085 - -1023
Korea, Republic - 0 13 1248 -13 -1248
Cyprus 5 9 362 593 -357 -584
Czech Republic 4 47 407 2128 -404 -2081
Denmark 287 613 1853 3079 -1566 -2467
Egypt - 14 - 88 - -73
Finland - - 4 137 -4 -137
France 892 75 1406 22895 -514 -22819WT/ACC/GEO/3
Page92
Export (fob) Import (fob) Balance
1995 1996 1995 1996 1995 1996
Germany 1160 4558 9531 24405 -8371 -19848
Greece 369 433 9600 16003 -9231 -15570
Grenada - - 29 - -29 -
Hong Kong - 259 5 78 -5 181
Hungary - - 740 2586 -740 -2586
Iceland - - - 149 - -149
India 317 189 103 7494 214 -7305
Indonesia - - - 3228 - -3228
Iran 807 2217 1142 2489 -334 -272
Ireland - 136 195 2805 -195 -2669
Iraq - - 105 - -105 -
Israel 12 121 3686 1405 -3674 -1245
Italy 2758 1740 992 29771 1767 -28031
Japan 59 37 911 176 -852 -139
Jordan 15 - - - 15 -
Kuwait - - 3 46 -3 -46
Lebanon 5 3 476 6247 -471 -6244
Liberia - 253 33 255 -33 -2
Liechtenstein 40 354 135 228 -95 126
Maldives - - - 163 - -163
Mongolia 204 188 6 - 198 188
Netherlands 1095 640 3521 11587 -2425 -10948
Norway - - 101 -100 -101 -100
Oman - 1 - -1 -
Pakistan - - 8 17 -8 -17
Poland 94 218 319 940 -225 -722
Portugal 107 197 954 1110 -847 -912
Romania - 2110 28246 36683 -282446 -34573
Singapore 35 - 1094 1906 -1059 -1906
Slovakia - 18 132 139 -132 -121
Slovenia - - 272 - -272 -
Spain 14 - 3372 272 -3358 -272
Sweden - - 20 226 -20 -226
Switzerland 6137 7204 2167 8126 3971 -922
Syria - 11 311 390 -311 -379
Taiwan 78 - 3 55 75 -55
Thailand 3 77 - 8 3 69
Tunisia - - - 363 - -363WT/ACC/GEO/3
Page93
Export (fob) Import (fob) Balance
1995 1996 1995 1996 1995 1996
Turkey 34852 25886 76526 72503 -41674 -46617
United Arab Emirates - - 304 1282 -304 -1282
United Kingdom 428 8382 10594 30891 -10166 -22509
USA 623 1347 13014 43482 -12390 -42135
Venezuela - - - 137 - -137
Yugoslavia - 28 30 2304 -30 -2276
Source: State Department ofSocio-Economic Information
(c) Government procurement statistics
Statisticalinformationonthegovernmentprocurementisnotavailablebecauseofmanystructural
changes which tookplace during recent years inGeorgia.WT/ACC/GEO/3
Page94
ANNEX 2
ListofLaws andLegal Acts
1. Laws, Regulations andNormative ActsRegulating Customs System
1.1. CabinetofMinistersResolutionNo.849of11November1991onCustomsFeesReimbursement
Rules onTransit Cargo andRe-export.
1.2. Amendment toCabinet ofMinisters Resolution No.185of19February 1992.
1.3. Cabinet ofMinisters Resolution of7March 1992 onState Duties.
1.4. Cabinet ofMinisters Resolution No.951of23September 1992onIntensifying LawandOrder
Measures atCustoms Zones.
1.5. CabinetofMinistersResolutionof22September1992onCreationoftheCustoms/TariffCouncil
attheGovernment oftheRepublic ofGeorgia.
Amendment:
1.5.1. No.279of12April 1993
1.6. State Council Decree of21October 1992 onCustoms Tariffs.
1.7. Decree of21December 1992 onCustoms Code oftheRepublic ofGeorgia.
1.8. CabinetofMinistersResolutionNo.333of27April1993onCustomsProcedures,Classification
ofServices andRates oftheCustoms Fees.
Amendments:
1.8.1. No.537of9August 1994.
1.8.2. No.11of18January 1995.
1.8.3. No.672of19September 1994
1.9. Cabinet ofMinisters Resolution No.596onImposition ofCustoms DutyonTobacco Exports.
1.10. Cabinet ofMinisters Resolution No.279of10May1994 onState Customs department.
Amendments:
1.10.1. No.379of16June1994.
1.10.2. No.309of2June1995.
1.11. Cabinet ofMinisters Resolution No.48026July1994 onCustoms TaxRegime forthe
Transportation Means, theirSpare PartAcquired Abroad orRe-Exported.
1.12. Cabinet ofMinisters Resolution No.711of3October 1994on"Sakterminal" StateCustoms
Servicing Agency atCustoms Department.
1.13. Cabinet ofMinisters Resolution No.811of11November 1994onProvisional Customs Duties
onExports, Imports andBarter Trade (translation available -L10).
1.14. Cabinet ofMinisters Resolution No.193of11April 1995onApplication ofCustoms Duties,
VAT andExcise Taxes onimports from CISoriginated innon-CIS countries.
1.15. President 'sDecree No.409of24June1996onMeasures toImprove Customs Service through
Restructuring andEnhance Foreign Trade.
1.16 Lawof27December 1996 onCustoms Tariffs.WT/ACC/GEO/3
Page95
Currently inpreparation:
Customs Code
2. Taxation
2.1. Lawof12December 1993 onthePrinciples ofTaxation System (translation available -L8).
Amendments:
2.1.1. No.475of1994.
2.1.2. No.597of11November 1994.
2.1.3. No.760of15June1995.
2.1.4. No.107of2February 1996.
2.1.5. No.197of19April 1996.
2.1.6. 27December 1996
2.2. Lawof12December 1993 onProfit TaxforEnterprises (translation available -L8).
Amendments:
2.2.1. No.107of9February 1996.
2.2.2. 27June1996.
2.2.3. 27December 1996.
2.3. LawNo.240of24December 1993 (translation available -L8)onValue Added Tax.
Amendments:
2.3.1. No.471of11November 1994.
2.3.2. No.712of5April 1995.
2.3.3. No.638of15June1995.
2.3.4. No.106of9February 1996.
2.3.5. No.197of19April 1996.
2.3.6. 26June1996.
2.3.7. No.44818October 1996.
2.3.8. 27December 1996.
2.4. Excise LawNo.242of24December 1993 (translation available -L8).
Amendments:
2.4.1. No.263of25January 1994.
2.4.2. No.479of1994.
2.4.3. No.601of11November 1994.
2.4.4. No.711of5April 1995.
2.4.5. No.638of15June1995.
2.4.6. 9February 1996.
2.4.7. No.448of18October 1996.
2.4.8. 27December 1996.WT/ACC/GEO/3
Page96
2.5. LawNo.234of23December 1993 onState TaxService.
Amendments:
2.5.1. No.467of11October 1994.
2.5.2. No.638of15June1995.
2.5.3. 27December 1996
2.6. LawNo.244of24December 1995 onProperty TaxforEnterprises (translation available -
L15).
2.7. LawNo.248of24December 1993 onPersonal Property Tax(translation available -L15).
2.8. LawNo.298of24December 1993 onPersonal Income tax(translation available -L15).
Amendments:
2.8.1. 9February 1996.
2.8.2. 27June1996.
2.8.3. 27December 1996
2.9. Head ofState Decree No.398of18December 1994, onTaxforUseofAgricultural Land
(translation available -L15).
2.10. Head ofState Decree of26December 1994 onFixed Provisional TaxforSmall Shops and
Other Commercial Outlets.
Amendment:
2.10.1 No.144of3May1995.
2.11. Cabinet ofMinisters Resolution of31December 1994 onCreation ofState Register of
Taxpayers.
2.12. Lawof21March 1995 onMedical Tax(translation available -L10).
2.13. Lawof4April 1995 onTaxforProduction andSales ofHealth Hazardous Production
(translation available -L10).
2.14. LawNo.769of28June1995 onElimination of2percentPenalty forLateTaxPayments.
Currently inpreparation:
LawonVAT
TaxCode
3. Laws onInvestment andEnterprises
3.1. Cabinet ofMinisters Resolution No.322onProvisional Regulations forPermit Acquisition
forSpecific Entrepreneurial Activities.WT/ACC/GEO/3
Page97
Amendments:
3.1.1. Cabinet ofMinisters Resolution No.544of7May1992.
3.1.2. Cabinet ofMinisters Resolution No.568of18May1992.
3.1.3. Cabinet ofMinisters Resolution No.683of23June1992.
3.1.4. Cabinet ofMinisters Resolution No.937of21September 1992.
3.1.5. Cabinet ofMinisters Resolution No.1000 of20October 1992.
3.1.6. Cabinet ofMinisters Resolution No.668of6September 1993.
3.1.7. Cabinet ofMinisters Resolution No.568of12August 1994.
3.2. LawNo.455of28October 1994 onEntrepreneurship (translation available -L15).
Amendments:
3.2.1. 13May1996.
3.2.2. 13December 1996.
3.3. Lawof12November 1996 onPromotion andGuarantees ofInvestment Activity (translation
available).
3.4. President 'sDecree No.243of16March 1996 onEstablishment oftheForeign Investment
Agency.
4. Laws onBudget andFinance
4.1. GovernmentResolutionNo.888of4September1992onProvisionalRegulationsforAccounting
andPayments Systems.
Amendments:
4.1.1. No.334of27April 1993.
4.1.2. No.46of21January 1994.
4.1.3. No.297of2June1995.
4.1.4. No.619of5October 1995.
4.2. LawNo.764of26June1995 onNational Bank OfGeorgia (translation available -L15).
Amendments:
4.2.1. No.805of19September 1995.
4.2.2. No.245of28May1996.
4.2.3. No.418of4October 1996.
4.2.4. No.560of27December 1996.
4.3. LawonCommercial Bank Activities (translation available -L15).
Amendments:
4.3.1. No.165of21March 1996.
4.4. LawNo.392of27July1993onPrices andPricing Fundamentals (translation available -L15).WT/ACC/GEO/3
Page98
4.5. LawNo.456of30June1995 onCollateral (translation available -L25).
4.6. LawNo.719of19April 1995 onPromissory Notes.
4.7. LawNo.721of19April 1995 onChecks.
4.8. LawNo.249of29May1996 onBudget System andBudget Responsibilities.
5. Laws onTransportation
5.1. Cabinet ofMinisters Resolution No.281of7March 1992 onProvisional Regulations and
Licensing Procedures forTransportation Services.
Amendments:
5.1.1. Cabinet ofMinisters Resolution No.281of25March 1994.
5.1.2. Cabinet ofMinisters Resolution No.180of25March 1994 onRegulation andLicensing for
Auto-transport Service inGeorgia.
5.2. Cabinet ofMinisters Resolution No.332of27April 1993 onTransit Fees.
5.3. Cabinet ofMinisters Resolution of5July1993 onMilitary Cargo Shipments.
Amendments:
5.3.1. 2June1995.
5.4. Cabinet ofMinisters Resolution No.170of23March 1994 onAirTransportation Licensing
Procedures.
Amendments:
5.4.1. No.643of10October 1995.
5.5. Cabinet ofMinisters Resolution No.180of25March 1994 onAutomobile Transportation
Licensing Procedures.
5.6. LawNo.493of12May1994 onRailway Transportation.
5.7. Cabinet ofMinisters Resolution No.347of3June1994 onRailway Transportation Service
Fees(translation available -L15).
Amendments:
5.7.1. No.286of23May1995.
5.7.2. No.435of8July1996.
5.8. LawNo.585of11November 1994 onRoads.
5.9. LawNo.100of4April 1995 onAutomobile Transportation.
5.10. Cabinet ofMinisters Resolution No.356of16June1995 onLicensing Procedures forthe
Agencies Involved inPassenger andCargo AirTransportation.
5.11. LawNo.802ofSeptember 1995 onRoad Fund (translation available L-10).
President 'sDecree No.696of30October 1996 onApproving theProvisions andStructure ofthe
Ministry ofTransport ofGeorgia.WT/ACC/GEO/3
Page99
President 'sDecree No.834of25December 1996onApproving theDetermining Indicators andList
ofRoads ofInternational, Intrastate andLocal Importance ofGeorgia.
6. Import, Export andForeign Trade
6.1. Cabinet ofMinisters Resolution No.264of30March 1993 onSupply ofGoods forState
Purposes.
Amendments:
6.1.1. No.358of10May1993.
6.2. Cabinet ofMinisters Resolution No.14of21January 1994onTemporary Cessation oftimber
Re-Export.
6.3. Cabinet ofMinisters Resolution No.166of23March 1994 onIssuance ofgeneral Licence
forConducting Intergovernmental Commercial Agreements to"Samtrest" Amalgamation.
6.4. Cabinet ofMinisters Resolution No.620of1September 1994onLicensing Requirement for
Re-Export ofCalcinated Soda.
6.5. LawonTransit through Georgia andImport ofIndustrial Waste.
6.6. Head ofState Decree No.203of30May1995 onTrade Chamber.
6.7. Cabinet ofMinisters Resolution No.544of6September 1995onTrade Balance Improvement.
6.8. Cabinet ofMinisters Resolution No.618of5October 1995 onPrecious Stones Businesses.
6.9. Cabinet ofMinisters Resolution No.744of30November 1995 onFurther Liberalization of
Export/Import Activities.
6.10. Cabinet ofMinisters Resolution No.164of11February 1996 ontemporary Cessation of
Licensing Export ofTimber, Ferrous andNon-Ferrous Metals Scrap, andSilicon-manganese.
7. Insurance
7.1. Cabinet ofMinisters Resolution No.373of17May1993onRegulations forStateInsurance
Agency.
7.2. CabinetofMinistersResolutionNo.747of20October1993onMandatoryPassengerInsurance.
8. Industrial Designs, Trademarks
8.1. CabinetofMinistersResolutionNo.303of5March1992onRegulationsConcerningIndustrial
Designs andtheirEnactment Provisions.
8.2. Cabinet ofMinisters Resolution No.304of16March 1992onregulations Concerning Trade
Marks andtheirEnactment Provisions.
8.3. Cabinet ofMinisters Resolution No.784of29October 1993 onRemuneration Rates and
Payment Rules forPerformers andWriters.
9. Other Laws andLegislative ActsAffecting Economy andCommerce
9.1. LawNo.289of15July1993 onProperty Rights (translation available -L15).
9.2. Cabinet ofMinisters Resolution of21January 1994 onAuction SalePrinciples oftheState
Property Subject toPrivatization.
9.3. President 'sDecree No.828of19December 1996onPrivatization ofElectro-Energy Sector.WT/ACC/GEO/3
Page100
9.4. President 'sDecree No.235of21February 1996 onMandate andStructure oftheMinistry
ofState Property Management ofGeorgia andonCreation ofCoordination-Controlling
Commission toAvoid Possible Mistakes inPrivatization Process.
9.5. President 'sDecree No.299of30April 1996 onRules ofManagement, Disposing and
Registration ofStocks Existed intheState Property oftheJoint-Stock Companies.
9.6. LawNo.504of24May1994 onRent(translation available -L15).
9.7. LawNo.535of20September 1994 onState Property Leasing.
9.8. Lawof12December 1994onConcessions toForeign Countries andCompanies (translation
available L-15).
Amendments:
19September 1996.
9.9. LawNo.623of7February 1995 onAudit.
9.10. HeadofStateDecree of10March 1995onUnfair Advertising andConsumer Rights Protection.
9.11. Cabinet ofMinisters Resolution of27March 1995onUnfair Advertising andConsumer Rights
Protection.
9.12. Parliament Decree No.164of30June1995onCreation ofAuditing Council attheParliament
ofGeorgia.
9.13. Lawof8December 1995 onGovernment ’sExecutive Branch Structure andActivities.
9.14. President ’sDecree No.221of16March 1996 onIntroducing Licensing Requirement on
Construction Activities.
9.15. LawNo.151of20March 1996 onConsumer Rights Protection.
9.16. Law No.182of2April 1996 onLegal Principles ofOilTransportation andSpecific
Construction, Maintenance, Servicing andExploitation Outlines.
9.17. LawNo.209of3May1996 onNotary Services.
9.18. President ’sDecree No.334of20May1995 onState Registration ofNatural Monopolies.
9.19. LawNo.278of25June1996 onBankruptcy.
9.20. Lawof24December 1993 onRegulations forApplication, Claim andAppeal Processing at
theState Agencies, Enterprises andOrganizations.
10. Arbitrage Tribunals
10.1. Lawof23March 1991 onArbitrage Tribunal.
10.2. Lawof28December 1990 onJudicial System.
11. International Conventions andTreaties
11.1. Parliament Decree No.280of3February 1994 onJoining theUNConvention International
Trade inGoods.
11.2. Parliament Decree No.282-283 of3February 1994 onJoining theInternational Convention
onAdoption ofForeign Arbitrage Tribunals ’Decisions andtheirEnforcement.
11.3. CabinetofMinistersResolutionNo.527of5August1994onJoiningtheInternationalMaritime
Convention.
11.4. Cabinet ofMinisters Resolution No.538of5September 1995onJoining theEuropean Treaty
of1February 1991 onTransportation.
11.5. Cabinet ofMinisters Resolution No.539of5September 1995 onJoining theTreaty of
1September 1970 onInternational transportation Requirements ofDisposable Foodstuffs.WT/ACC/GEO/3
Page101
11.6. Cabinet ofMinisters Resolution of9September 1995 onJoining theInternational Maritime
Convention.
12. Non-resident ’sLegal Status
12.1. LawNo.258of3June1993 ontheLegal Status ofForeigners.
12.2. Lawof26June1996 onRules ofRegistration andIdentity Confirmation forCitizens and
Resident Foreigners.
Laws tobeadopted:
1. Civil Code
2. Customs Code
3. LawonPrecious Metals andStones Exploration andProcessing
4. LawonLicensing theEntrepreneurial Activities
5. Civil Procedure code
6. LawonVAT
7. TaxCode
8. Conflict Law
9. LawonFreeEconomic Zones
10. LawonExport/Import ofCultural Valuables
11. LawonJudicial System
12. Criminal Code
Newly adopted Laws:
1. LawNo.267-IIs of11June1996 onBibliography;
2. LawNo.284-IIs of14June1996 onStateRegulation ofPartnership Relations withForeign
Scientific, Educational, Cultural Centers andInvestors.
3. LawNo.286-IIs of25June1996 onPerforming ofBankruptcy Activities.
4. LawNo.303-IIs of27June1996 onTaxation ofGoods andMonetary Assets Received by
Grant.
5. LawNo.323-IIsof27June1996onRuleofRegistrationandIdentificationofGeorgianCitizens
andForeigners Living inGeorgia.
6. LawNo.329of28June1996 onRentofAgricultural Land.
7. LawNo.331of28June1996 onGrant.
8. LawNo.372of6September 1996 onStandardization.
9. LawNo.374of6September 1996 onEnsuring Unified Measuring.
10. LawNo.376of6September 1996 onCertification ofProducts andServices.
11. LawNo.424of15October 1996 onPermissions ofEnvironmental protection.WT/ACC/GEO/3
Page102
12. LawNo.426of15October 1996 onState Ecological Expertise.
13. LawNo.448of18October 1996onRegulation ofTaxation byCustoms Duties andFeesand
Amending andChanging some Legislative Acts.
14. LawNo.455of29October 1996 onState Secret.
15. LawNo.458of29October 1996 onNormative Acts.
16. LawNo.462of29October 1996 onAirCode ofGeorgia.
17. LawNo.490of13November 1996 onRegistration ofLand.
18. LawNo.512of28November 1996onUsing Civil Code ofGeorgia inJudicial Activities of
Arbitration Courts ofGeorgia.
19. LawNo.555of27December 1996 onCustoms Tariffs.
20. LawNo288-1 onmonopoly activities andcompetition ”of25July1996WT/ACC/GEO/3
Page103
ANNEX 3
Information onImport Licensing Procedures
I. Purposes andcoverage oflicences
1. Theimport ofthefollowing goods issubject tolicensing inGeorgia:
(a)Chemical agents forprotection ofplants: 3808. licence isgranted withtheconsent ofthe
Ministry ofProtection ofEnvironment
andNatural Resources, theMinistry of
Agriculture andFood.
(b)Wild animals andbirds, fish,bones andhoofs of
extinct animals, wildplants, seeds ofwood
species offorest andsimilar materials: 010119;
010290900; 010391900; 010392900; 010410900;
010420900; 010599; 010600910; 010600990
(only wildanimals); 0301-0303; 040700 (poultry
except eggs); 0507; 050800000; 0604;
080221000; 080222000; 120999100; 1211;
121220000; 1401-1404; 9601.licence isgranted withtheconsent ofthe
Ministry ofProtection ofEnvironment
andNatural Resources, theDepartment
ofForestry, theMinistry ofAgriculture
andFood.
(c)Remedies, medicines andtheirrawmaterials,
narcotic andpsychotropic remedies, poisons:
020610100; 020622100; 020629100; 020630100;
020641100; 020649100; 020680100; 020690100;
121220000; 150420; 29(only pharmacological
preparations andtheirrawmaterials); 3001-3004;
300660; 0507; 051000000; 1211; 1302.licence isgranted bytheMinistry of
Health Protection.
(d)Weapon andmilitary equipment, special
completing products, works fortheirproduction,
services inthefieldofmilitary technical
cooperation: 871000000; 8802 (except:
880211100; 880212100; 880220100; 880230100;
880240100); 8803 (except: 880310100;
880320100; 880330100; 880390910); 8805
(except 880520100); 890600100; 930100000;
930200; 9305 (only forfighting arms); 9306
(except: 930610100; 930629100; 930629200;
930629400; 930630900); 901310000;
901320000; 901380000; 9014; 8506 -onlyfor
military purpose.licence isgranted onthebasis ofthe
decision oftheCabinet ofMinisters on
thebasis oftheapplication ofthe
Ministry ofDefense.WT/ACC/GEO/3
Page104
(e)Gunpowder, explosives, pyrotechnic substances:
360100000 (except gunpowder forhunting);
360200000-3604.licence isgranted withtheconsent ofthe
Ministry ofInternal Affairs.
(f)Nuclear materials, technologies, equipment and
installations, special non-nuclear radioactive
radiation sources: 3612; 2344; 2845; 8401.licence isgranted onthebasis ofthe
decision oftheCabinet ofMinisters on
thebasis ofthereports oftheMinistry of
Protection ofEnvironment andNatural
Resources andtheMinistry ofHealth
Protection.
(g)Industrial wastes. licence isgranted onthebasis ofthe
consent oftheMinistry ofProtection of
Environment andNatural Resources.
Theimportofnon-toxicindustrialwastesisallowedonlyforthepurposeofindustrialprocessing.
Import oftoxic andradioactive industrial wastes forthepurpose oftheirutilization, safedisposal,
processing, interment andanyother purposes isprohibited.
2. Thissystem applies toanycountry, anyproducer andanyimporter.
3. Thelicensing requirement doesnotinclude anyrestrictions relating tovalue. Itsaimisthe
establishment ofState control overtheabove-mentioned specific goods, protection oflegislation in
force inthecountry, protection ofinternational commitments taken bythecountry, protection offlora
andfauna.
4. BytheResolution No.35oftheCabinet ofMinisters oftheRepublic ofGeorgia of
23January 1995“OnPerfection ofStateRegulation ofExport andImport ofGoods (Works, Services) ”
thelistofgoods (works, services), import andre-export ofwhich issubject tolicensing, wasadopted
(Annex 5).
According tothe2ndparagraph oftheabove-mentioned Resolution, amendments toannexes
oftheResolution canbemade onthedecision oftheCabinet ofMinisters oftheRepublic ofGeorgia,
onthebasis ofthesubmission bytheMinistry oftheEconomy, inagreement withtheMinistry of
TradeandForeignEconomicRelationsandotherrelevantministries,inordertoeffecttheirliberalization
inthefuture.
Theimport licensing procedures weredetermined bytheResolutions No.475“Onliberalization
ofexport-import activities intheRepublic ofGeorgia ”of10August 1995andNo.744“Onthefurther
liberalization ofexport-import activities intheRepublic ofGeorgia ”of30November 1995. After the
Cabinet ofMinisters oftheRepublic ofGeorgia wasabolished bytheDecree No.07ofthePresident
ofGeorgia of4December 1995 “Onstructure andrules ofactivities oftheexecutive authority ”,
implementation ofnon-tariff regulation including import licensing andregistration issues fallsunder
thejointcompetence oftheMinistry oftheEconomy andtheMinistry ofTrade andExternal Economic
Relations.
II. Procedures
1.(a) Thelicensing rules were published inpress ofthecountry.
(b) Quantitative quotas havenotbeenestablished.WT/ACC/GEO/3
Page105
(c) Licensing requirements areapplied togoods listed inparagraph 1.
(d) Decisiononthegrantingoflicencesistakennotlaterthan15daysafteracceptanceofapplication.
(e) Theminimum period between thegranting oflicences andactual import isthatperiod that
ittakes totransport goods from theexporting country.
(f) Anapplication isconsidered bytheMinistry ofTrade andForeign Economic Relations after
theconsent ofseveral organizations which isnecessary. Thelistoftheorganizations isgiven in
paragraph 1“Purposes andCoverage ofLicensing ”.
(g) Thefirst-come-first-served principle isusedinthegranting oflicences.
(h) Ifthere arerestrictions ontheimport ofanygoods theauthorities, which takethedecision
onlicensing, cantakeintoconsideration applicant ’sexperience.
(i) Import licence isnecessary forimport ofgoods, import ofwhich issubject tolicensing, even
iftheyareintended forexport.
2. Anapplication foralicence mayberefused onlyiftheprincipal criteria arenotsatisfactory.
Areason ofrefusal isexplained. Explanation isgiven inawritten form. Anapplicant canappeal against
adecision inacourt.
III. Eligibility ofimports toapply forlicence
1. InGeorgia anyperson, firmororganization hastherighttomake anapplication forobtaining
animport licence.
IV. Documentation andother requirements forapplication forlicence
1. Anapplication maybewritten inanyform. Thefollowing details should beindicated init:
what kindofgoods aretobeimported, inwhat quantities andfrom which country. Thefollowing
documents should beattached totheapplication:
- import contract, StateDepartment ofSocio-Economic Information (SDSEI) code, noteofbank
onexistence ofbankaccount, receipt confirming payment oflicensing fees,written permission
oftheorganization identified bytheResolution oftheCabinet ofMinisters ofGeorgia forimport
ofeither goods (mentioned above initem1ofparagraph I).
2. Theanswer isgiven intheprevious paragraph.
3. Thelicensing feeamounts toequivalent ofUS$50innational currency.
4. Payment ofthelicensing feeismade inadvance. Thereceipt ofpayment must beattached
totheapplication. Intheevent oftheapplication foralicence being refused foranyreason theamount
paidwillbereimbursed totheapplicant.
V. Conditions oflicensing
1. Thelicence isgranted fortheperiod fixedinthecontract, butnotmore thanonecalendar year.
Thevalidity ofthelicence canbeextended onrequest oftheapplicant.
2. There arenopenalties forthewhole orpartial non-utilization ofalicence.WT/ACC/GEO/3
Page106
3. Thetransfer ofthelicence toanother importer isprohibited.
4. There arenoanyadditional conditions attached totheissue ofalicence.
VI. Other procedural requirements
1. Besides licensing, customs clearance isnecessary fortheimport.WT/ACC/GEO/3
Page107
ANNEX 3(a)
Purposes andCoverage ofExport Licensing
1. Export ofthefollowing kinds ofgoods issubject tolicensing inGeorgia:
collection materials ofbiology, mineralogy,
archaeology, paleontology, ethnography and
numismatics: 970500000licence isgranted inagreement withthe
Ministries ofFinance, Protection of
Environment andNatural Resources, Culture
andtheDepartment ofGeology respectively.
timber (logs): 4403 licence isgranted onthebasis ofissued
permission onmanufacturing oftimber.
rawmaterials ofanimal andplant origin for
medicines, substances received from human
organism: 020610100; 020622100; 020629100;
020630100; 020641100; 020649100; 020680100;
020690100; 051000000; 1211; 13021; 150420;
1505; 3001; 3002licence isgranted inagreement withthe
Ministry ofHealth Protection.
Caucasian firseed: 120999101 licence isgranted onthebasis oflicence for
theirlaying-in issued bytheMinistry of
Protection ofEnvironment andNatural
Resources.
2. Thelicensing system isthesame regardless ofcountry ofdestination, ofproducer andof
exporter. Theexport licensing ruleapplies onlytodomestically produced goods.
3. Thelicensing requirement doesnotinclude anyrestrictions relating tothevalue ofexports.
Itsaimistomaintain State control overtheabove-mentioned specific goods, tosupport existing
legislation, toprotect international commitments andtoprotect floraandfauna.
4. Licensing rules aredetermined bytheResolution No.35oftheCabinet ofMinisters ofthe
Republic ofGeorgia of23January 1995 “OnPerfection ofStateRegulation ofExport andImport of
Goods(Works,Services)”.Thelistofgoodswhicharesubjecttolicensingisdeterminedbytheexecutive
authority (Cabinet ofMinisters). Amendments canbemade bytheDecision oftheCabinet ofMinisters
ofGeorgia onthebasis ofpresentation bytheMinistry ofEconomy andtheMinistry ofTrade and
Foreign Economic Relations inagreement withrelevant branch ministries.
Procedures
1. Export quotas arenotestablished. Thesupply quotas areestablished ontwokinds ofproducts
-Caucasian firseedandwooden logs.Licences onthesegoods canbegranted onthebasisofdocuments
confirming quotas fortheirsupply.
2. Thedecision onthegranting oflicences must betaken within 15daysoftheacceptance of
theapplication (with attached documents).WT/ACC/GEO/3
Page108
3. Anapplication isconsidered onlyafterthewritten consent ofseveral organizations. Thelist
oftheorganizations isgiven inparagraph 1“Purposes andCoverage ofLicensing ”.
4. Anapplication foralicence mayberefused onlyiftheprincipal criteria arenotsatisfied. The
reasons forarefusal must begiven inwritten form. Anapplicant canappeal against adecision toa
court.
Eligibility ofexports toapply forlicence
1. InGeorgia anyperson, firmororganization hastherightforexport andtomake anapplication
forobtaining alicence.
Documentation necessary forapplication forlicence
1. Anapplication maybewritten inanyform. Thefollowing details should begiven: thenature
ofgoods tobeexported, inwhatquantity andtowhich country. Thefollowing documents should be
attached totheapplication:
- export contract, StateDepartment ofSocio-Economic Information (SDSEI) code, noteofbank
onsubmission ofonecopyofcontract bytheapplicant, receipt confirming payment oflicensing
fee,certificate oforigin ofgoods, written permission oftheorganization identified bythe
Resolution oftheCabinet ofMinisters ofGeorgia (only forgoods forwhich thisisnecessary,
mentioned above inparagraph 1).
2. Theexport licensing feeamounts totheequivalent ofUS$50innational currency forall
countries except theCIScountries. Thelicensing feeforexport toCIScountries istheequivalent of
US$25.
3. Thepayment ofthelicensing feeismade inadvance. Thereceipt ofpayment ofthelicensing
feeshould beattached during thepresentation ofapplication andother documents tothelicence issuing
organization. Inthecaseofrefusal togrant licence totheapplicant duetoanyreason theamount paid
willbereimbursed totheapplicant.
Conditions forlicensing
1. Thelicence isgranted fortheperiod fixed inthecontract, butnotformore thanonecalendar
year. Thevalidity ofthelicence canbeextended onrequest ofapplicant.
2. There arenopenalties forthewhole orpartial non-utilization ofalicence.
3. Thetransfer ofalicence toanother exporter isprohibited.
4. There arenoanyadditional conditions attached totheissue ofalicence.WT/ACC/GEO/3
Page109
ANNEX 4
Information onImplementation andAdministration
oftheCustoms Valuation Agreement
1.(a) (i) Inasalebetween related persons theimporter hastoprove thattheirrelationship did
notinfluence thetransaction value.
Ifanyrelative orclose relationship exists among persons engaged inasale,thenthe
importer isobliged toreferabout thisincustoms value declaration.
(ii) Incaseofabsence ofevidence ofopposite theexistence ofintercompany prices isnot
considered asgrounds forregarding therespective prices asbeing influenced.
(iii) Iftheimporter sorequests, thecustoms authority ofGeorgia istogiveawritten
explanation ofgrounds totheimporter within three months, because ofwhich the
customs value declared bytheimporter cannotbeusedbythecustoms authority as
basis forimposing ofaduty.
(iv) Iftheimporter grounds truthfulness ofthetransaction value declared byhim,such
atransaction value isacceptable forthecustoms authority.
(b) There arenospecial provisions orpractical arrangements concerning thevaluation oflostor
damaged goods.
2. Ifthecustoms value oftheimported goods cannot bedetermined bythefirst,second andthird
methods, thenitsdetermination iscarried outbythefourth method, andifthecustoms value cannot
bedetermined bythatmethod, thenthefifthmethod isused. Thefourth andfifthmethods canbeused
inanysequence.
3. Ifidentical orsimilar goods arenotsoldinthecondition asimported, then, iftheimporter
sorequests, thecustoms value shallbebased ontheunitpriceofprocessed goods changed bytheadded
value.
4. Article 6.2oftheCustoms Valuation Agreement isimplemented incurrent legislation.
5.(a) Ifthecustoms value oftheimported goods cannot bedetermined bythefirstfivemethods of
determination ofthecustoms value, thenthecustoms value shallbedetermined onthebasis
ofdataavailable inthecountry taking intoaccount theworld experience.
(b) When thereserve method isapplied, thecustoms authority ofGeorgia provides theimporter
withavailable information onprices.
(c) During determination ofthecustoms value thefollowing cannot beused:
(i) price ofgoods ontheinternal market ofGeorgia;
(ii) price ofgoods imported intothethirdcountry from theexporter country;
(iii) price ofgoods ofGeorgian origin ontheinternal market ofGeorgia;
(iv) price ofgoods fixed inaself-willed orungrounded way.WT/ACC/GEO/3
Page110
6. During determination ofthecustoms value thetransaction value includes thefollowing
components iftheyhavenotbeenincluded intoitearlier:
(a) thecostofdelivery oftheimported goods totheairport, portorplace ofimportation ofthe
Georgian customs territory:
- costoftransport;
- loading, unloading, reloading andhandling charges associated withthetransport of
theimported goods;
- costofinsurance;
(b) expenditure made bybuyer:
- commission andbroker (mediation) expenses, except commission expenses made for
purchase ofgoods;
- costofcontainers andmulti-circulated tare,iftheyareconsidered asintegral partof
goods tobeevaluated inaccordance withthenomenclature ofgoods;
- costofpacking, including thecostofpacking materials andcostofpacking works;
(c) partofrelevant costofgoods andservices, which weredirectly orindirectly offered bybuyer
forthepurpose ofproduction, using orsale(during export) ofgoods tobeevaluated inlow
orfreeprices:
- partofcostofrawmaterials, materials, semi-finished goods andother complete parts
which areconsisting parts ofgoods tobeevaluated;
- partofcostofinstruments, stamps, moulds andother similar subjects usedduring
production ofgoods tobeevaluated;
- partofcostofmaterials (lubricants, fuel,etc.)utilized during production ofgoods
tobeevaluated;
- relevant partofcostofengineering calculation, testing anddesigning works, drafts,
necessary forproduction ofgoods made andevaluated outside theterritory ofGeorgia;
(d) relevant partofcostofgoods (works andservices rendered) which willbedirectly orindirectly
undertaken byimporter, onexport ofgoods tobeevaluated withthepurpose oftheirsale
(alienation) orusing forproduction byloworpreferential prices:
- rawmaterials, materials, parts, semi-finished goods andother complete parts, which
areconsisting parts ofgoods tobeevaluated;
- engineering andtesting anddesigning works, designs, drafts, implemented onthe
territory ofGeorgia which arenecessary forproduction ofgoods tobeevaluated;
- instruments, stamps andother similar equipment which wereusedduring production
ofgoods tobeevaluated;WT/ACC/GEO/3
Page111
- accessory materials (lubricants, etc.), utilized during production ofgoods tobe
evaluated;
- engineering andtesting anddesigning works, designs, drafts, implemented onthe
territory ofGeorgia, which arenecessary forproduction ofgoods tobeevaluated;
- licensing andother feesforuseofintellectual property objects, which willbedirectly
orindirectly undertaken bybuyer asacondition ofsale(alienation) ofgoods tobe
evaluated;
- partofincome ofimporter gained from every subsequent sale(alienation) orusing
ofgoods tobeevaluated, which issubject toreturn toexporter.
(e) amount ofapartofdirect orindirect income ofbuyer, gained ontheterritory ofGeorgia from
anysubsequent sale,transfer orusing ofgoods tobeevaluated.
Inthecaseoff.o.b. application ex-factory prices arenotaccepted.
7. Information ontherateofexchange ispublished inthepress.
8. Information provided bytheimporter, which isdefined asacommercial secret orisconfidential,
canbebythecustoms authorities ofGeorgia onlyforcustoms purposes andcannot besubmitted to
thethirdperson, including other governmental bodies without thepermission oftheimporter, except
cases specified bythelegislative actsofGeorgia. Incaseofdisclosing ofcommercial secret or
confidential information thecustoms authority ofGeorgia anditsofficials shallbearresponsibility in
accordance withtheGeorgian legislation.
9.(a) During determination ofcustoms value, incaseofdissent oftheimporter withthedecision
taken bythecustoms authority, thisdecision canbeappealed according totherulesspecified
bytheCustoms Code ofGeorgia.
(b) Theimporter shallbeinformed ofrights ofappeal inaccordance withtherules specified by
theCustoms Code.
10.(a) Alllegalactsarepublished inpress inthemoment oftheiradoption. There isalsoaspecial
publication "Collection oftheLegal ActsofGeorgia", which contains alllegalacts.
(b) Thepublication oftheLaw"OnCustoms Tariff" ofGeorgia isanticipated inthefuture. Except
issues connected withcustoms tariff, therules ofdetermination ofthecustoms value willbe
provided bythislaw.
11.(a) Incaseofnecessity ofthefurther determination ofthecustoms value oftheimported goods
bythecustoms authority, theimporter hastherighttoaddress theGeorgian customs authority
withrequest towithdraw thegoods onthesecurity ofproperty orwithguarantee ofauthorized
bank or,iftheimporter payscustoms taxes according tothecustoms value ofthegoods
determined bytheGeorgian customs authority.
(b) Additional explanations havenotbeenlaiddown.
12.(a) TheGeorgian customs legislation envisages delivery ofanexplanation inwriting from the
customs authority concerning thecustoms value.
(b) There arenotanyfurther regulations concerning theabove-mentioned request.WT/ACC/GEO/3
Page112
13. Interpretative Notes havenotbeenincluded inthecurrent legislation. Georgia 'swillingness
istobroadly reflect theInterpretative Notes totheAgreement incurrent legislation.
14. Theissue ofwhether ornottoinclude interest payments incustoms value hasnotyetbeen
considered byGeorgia.
15. Theissue ofwhether ornottoinclude thevalue ofsoftware inthevaluation ofcarrier media
fordataprocessing equipment hasnotyetbeenconsidered byGeorgia.WT/ACC/GEO/3
Page113
ANNEX 5
Information onTechnical Barriers toTrade
Thelegal actsinGeorgia intended toprevent technical barriers intrade impose thesame
requirements onlocalandimported product. Iftheregulations inGeorgian legislation donotcorrespond
totheregulations ofaninternational agreement, theadvantage would begiven totheregulations
envisaged intheagreement. Inthelegalacts,normative documents andadministrative decisions included
intheAnnex therearenorequirements andprocedures which discriminate against imported products;
theyenvisage theprinciples ofmarket economy andareharmonized withtheexperience ofthewestern
countries. Some ofthem, inparticular asregards certification, areharmonized withEuropean standards.
Listoflaws, regulations, standards andprocedures
1. State system ofcertification:
(a)general provisions sd02570339-001-94
(b)requirements tocertification agency andrules ofitsaccreditation sd02570339-002-94
(c)rules ofimplementation ofcertification ofproducts, general
requirements sd02570339-003-94
(d)requirements fortesting laboratories andrules oftheiraccreditation sd02570339-004-94
(e)rules ofconducting oftheState register ofthesystem sd02570339-005-94
2. State system ofstandardization:
(a) general provisions sst1.0-94
(b) rules ofelaboration ofState standards sst1.2-94
(c) standards ofeconomic objects sst1.4-94
(d) general requirements fororder, transfer, registration andmatter of
standards sst1.5-94
(e) national mark ofcompliance sst1.11-94
3. State system ofensuring thecommon measuring:
(a) metrology control, general provisions sst8.004-94
(b) testing ofmeasuring means andapproving oftheirtypes sd02570339-016
(c) requirements totesting State centers ofmeasuring means andrules
oftheiraccreditation sd02570339-017
(d) conducting oftheState register ofmeasuring means sd02570339-018
4. TheGeorgian Laws "OnStandardization" and"OnCertification ofProducts andServices"
were adopted bytheParliament ofGeorgia on6September 1996.
TheLaw"OnStandardization"establishesthelegalbasisofstandardizationinGeorgia,regulates
relations inthesphere ofstandardization, protection ofconsumers 'andgovernment 'sinterests bymeans
ofelaboration andusing ofnormative documents ofstandardization. Iftherules established bythe
Georgian legislation donotcorrespond totherulesestablished bytheinternational agreement, inwhich
Georgia isacontracting party, thentheinternational agreement willbegiven thepriority. TheLaw
includes therulesofelaboration, approval, publication andapplication ofnormative documents, also
therulesofapplication ofinternational andother countries 'normative documents. TheLawconsidersWT/ACC/GEO/3
Page114
theprinciples ofsupervision overtheobservance ofmandatory requirements ofstandardization and
therights ofthenational organ ofstandardization, theresponsibilities forviolation ofstandardization
legislation andaspects offinancing works inthesphere ofstandardization.
Normative documents onstandardization inGeorgia areasfollows: Georgian Statestandards,
international (regional) standards, standardization rules, norms andrecommendations thatareapplied
according totheestablished rules; standards ofadministrative organs, organizations andeconomic
organizations, Georgian classifiers oftechnical-economic information. Necessary revision ofstandards
mustbeconducted every fiveyear.About 5,000 standards areusednowadays intheGeorgian economy,
including 3000forproducts (services), 1000basic(organizational-methodical) standards and1000for
testing methods. According tobranches ofeconomy standards areapplied: infoodindustry -1000,
textile industry -500,engineering industry -2000, heavy industry andchemical industry -500,
construction -500.
Standards currently usedinGeorgia aremandatory. Their mandatory character isevinced in
theprocess ofapplication ofthefollowing types ofstandards:
- basic (organizational-methodical) standards;
- standards forproducts (services);
- testing standards;
- standards forprocesses.
Thelegalbasisformandatory andvoluntary certification ofproducts, services andotherobjects,
alsotherights andresponsibilities ofparticipants ofcertification areestablished inGeorgia bytheLaw
"OnCertification ofProducts andServices". TheLawprovides forrelations inthesphere ofcertification
taking intoconsideration international agreements, principles ofmandatory andvoluntary certification,
sphere ofparticipants incertification works, authority, commitments, issues, connected withcontrol
andsupervision ofcertified products andresponsibility forviolation ofthementioned legislation.
"Sakstandarti" andState organs ofexecutive power determine within theframes oftheir
competence thelistofproducts subject tomandatory certification. Provisions ofacontract (agreement)
ondelivery ofproducts toGeorgia mustspecify theexistence ofacertificate confirming theconformity
ofproducts withtheestablished requirements andamark ofconformity ifthese products aresubject
tomandatory certification inGeorgia. These certificate andmark ofconformity oradocument of
recognition areissued byappropriate authorized organ ofGeorgia. During importation ofgoods into
Georgiaacertificateordocumentofrecognitionmustbepresentedtogetherwiththecustomsdeclaration.
Thecertification system envisages useofstatement-declarations. Advertisement ofproducts subject
tomandatory certification isprohibited without certificate ofconformity.
Georgia recognizes certificates onproducts fromthirdcountries iftheseproducts areimported
through asecond country certification system ofwhich isrecognized byGeorgia.
Asarule,normative documents usedinGeorgia stipulate guarantee requirements onproducts '
(services ')quality indices under conditions ofconsumption andexploitation.
According totheStatecertification system ofGeorgia, which isharmonized withtheEuropean
standards, anaccreditation organ isenvisaged onthebasis of"Sakstandarti". Thisorgan isapproved
by"Sakstandarti" andconducts accreditation ofcertification organs andtesting laboratories (centers),
aswellasgives permission (licence) forcarrying outcertain types ofworks. Abodyofexecutive power,
which according totheGeorgian legislation isobliged toorganize certification works, representativesWT/ACC/GEO/3
Page115
ofthenational standardization organizations oftheCIScountries maytakepartintheprocess of
accreditation. Theresponsibilities ofcertification organs andtesting laboratories areenvisaged bythe
legislation. Anorgan ofaccreditation andother specially authorized Statebodies ofexecutive power
carry outState control andsupervision overprotection ofmandatory certification rules intesting
laboratories (centers) andcertification bodies.
Listofproducts imported totheterritory ofGeorgia subject tomandatory certification
# Description ofProduct Position Code
1 meatandmeatproducts group 2
2 fish,crustaceans, marine mammals andother aquatic invertebrates group 3
3 milkanddairy products, birds’eggs, natural honey, edible products of
animal origingroup 4
4 vegetables andbulbs, tuberous roots group 7(except
0701 10000
0703 10110)
5 edible fruitornuts, citrus anditsshells andpeel group 8
6 coffee, tea,spices group 9
7 grain forbread group 10
8 cereals, starch, inulin (except wheat gluten) group 11(except
1109 00000)
9 foliage beet, edible roots, lucern, edible cabbage, haywhether ornot
granulated1214
10 fats,oilsandtheirfractions, offishormarine mammals whether ornot
refined, butnotchemically modified.1504
11 other oilstheirfractions obtained solely from olives, whether ornot
refined, butnotchemically modified, including blends oftheses oilsor
fractions withoilsofother type.151000
12 lardandpoultry fatwhether ornotpressed orsolvent extracted 1501 (except
1501 00110)
13 fatsofbovine animals, sheep orgoats raworrendered 1502 (except
1502 00100)
14 Soya-bean oilanditsfractions, whether ornotrefined butnot
chemically modified1507 (accept
1507 10100
1507 90100)
15 peanut oilanditsfractions, whether ornotrefined butnotchemically
modified1508 (except
1508 10100
1508 90100)
16 olive oilanditsfractions, whether ornotrefined butnotchemically
modified1509 (except
1509 10100)
17 palm treeoilanditsfractions, whether ornotrefined butnot
chemically modified1511 (except
1511 10
1001511 90
910)WT/ACC/GEO/3
Page116
# Description ofProduct Position Code
18 sunflower-seed, safflower orcotton-seed oilandfractions thereof
whether ornotrefined, butnotchemically modified1512 (except
1512 11100
1512 19100
1512 21100)
19 coconut oil,palm kernel orbabassu oilandfractions thereof, whether
ornotrefined, butnotchemically modified1513 (except
1513 11100
1513 19300
1513 21110
1513 29300
1513 29990
1513 21190)
20 rape, colza ormustard oilandfractions thereof, whether ornot
refined, butnotchemically modified1514 (except
1514 10100
1514 90100)
21 vegetable fatsandoilsandtheirfractions 1515 20(except
1515 20100)
22 animal fatandtheirfractions 1516 10
23 cornoilanditsfractions (edible) 1515 21900
24 margarine 1517
25 meat, fishorcrustaceans orother aquatic invertebrates group 16
26 caneorbeatsugar andchemically puresucrose, insolid form 1701 (except
1701 11900
1701 99900
27 glucose andglucose syrup, notcontaining fructose orcontaining inthe
drystatelessthan20%byweight offructose1702 40(except
1702 40100)
28 other fructose andfructose syrup, containing inthedrystatemore than
50%byweight offructose1702 06
29 sugar confectionery (including white chocolate), notcontaining cocoa 1704
30 cocoa andcocoa preparations group 20
31 preparations ofcereals, flour, starch ormilk, pastrycook products group 19
32 preparations ofvegetables, fruit, nutsorother parts ofplants group 20
33 miscellaneous edible preparations group 21
34 beverages, spirits andvinegar group 22
35 residues andwaste from thefoodindustry usedforanimal feed,
prepared animal foodgroup 23
36 tobacco andmanufactured tobacco substitutes group 24
37 edible salt 2501 00910
38 engine andaviation petroleum 2710 00310
39 engine petroleum containing leadnomore than 0.013 g/l 2710 00330
40 engine petroleum containing leadmore than0.013 g/l 2710 00350
41 kerosene 2710 00510
42 diesel fuel 2710 00690
43 liquid fuel(mazut) 2710 00790WT/ACC/GEO/3
Page117
# Description ofProduct Position Code
44 lubrication andother oils 2710 00990
45 medical oxygen 2804 40000
46 gauze anditspreparations 3005 90310
47 ammonium sulfate 3102 21000
48 superphosphates 3103 10000
49 essential oilsandresinoids, perfumery, cosmetic ortoilet preparations group 33(except
3303 3307 10
0003307 30
0003307 41
0003307 49
0003307 90000
50 toilet soap 3401 11000
51 detergents, packed forretail sale 3402 20900
52 detergents andother cleansing materials 3402 90900
53 lubrication means forcars, equipment andtransportation means 3403 19910
54 matches 3605 00000
55 photographic orcinematographic goods group 37
56 copper sulfate, packed forretail prices 3808 20100
57 herbicides 3808 30100
58 disinfectants, foruseinhealth protection andveterinary 3808 40000
59 flexible insulation tubes ofethylene, vinilchloride orother plastic
polymers3917 31900
60 diaphragm ofpolymers ofethylene 3920 10
61 insulation materials from tarandother plastic 3921 90
2003921 90
3003921 90500
62 plastic bags 3923 21000
63 plastic bagsandcontainers ofmore than2liters involume 3923 30900
64 rubber 4011 (except
4011 30)
65 contraceptives 4014 90
66 latexbaby’sdummy, rubber icebubbles, rubber hothouses, medical
rubber tubes4014 990
67 appliances forindividual safety reasons, rubber masks 4015 90000
68 surgical gloves 4015 11000
69 timber boards 4410
70 plywoodveneer sheets ofleaf-bearing sortswithoutward layers, veneer
sheets ofconiferous sortswithoutward layers44124412 12
0004412 19000
71 veneer preparations 4415 10000
72 filter forgrocery products 4805 40000
73 wrapping paper forgrocery products 4805 80900
74 wallpaper 4814WT/ACC/GEO/3
Page118
# Description ofProduct Position Code
75 hardpaper boxes 4819 10000
76 hardandsoftpaper boxes, including bending ones, paper bagsand
bagsofcombined materials, glass andpaper bottles4819 50100
77 insulation fabric 5903 90100
78 male, female andchildren knitted garments, including theclothing for
babies andchildren before school age-knitted garments- male, female
andchildren swimming andskiing suits- footware(socks, warm pants
andsweat pants)6107610861096
111/61126115
79 male, female andchildren sewing garmentsmale, female andchildren
sewing suitsforswimming andskiing purposes6207 /
620862096211
110006211 12
000
80 male, female andchildren jersey ware 61056106
81 children shoes(leather, rubber polymer, rubber textile, woolen) 6401;
64026403;
6404;6405
82 uncut diamond instruments -sewing discs, cutting discs 6804 21000
83 abrasion instruments -sewing discs, cutting discs 6804 22
84 abrasion powder instruments 6805
85 friction materials andpreparations 6813 (except
6813 10
1006813
901000)
86 china dinner, kitchen, other household andtoilet articles 6911
87 dinner, kitchen, other household ceramic dishes andtoilet articles 6912
88 multi-layer glass forground transport 7007 11
0007007 21910
89 glass containers forstorage, transportation andpackaging (formedical,
foodandindustrial use)7010 90
90 metal cansforpreserves andchemical products, cisternas 7310
(except7310 10
000)
91 ferrous metal containers withmore then50lcapacity 7310 10010
92 airballoons of50litrecapacity atburst pressure of1.6Pa 7311 00
(except7311 00
990)
93 heaters, kitchen ovens, foodheaters andother similar nonelectrical
equipment made offerrous metal, related supplies7321 (except
7321 90000)
94 copper enameled household articles 7323 92000
95 articles outofrustproof metal 7323 93
96 ironenameled household articles 7323 94
97 steeldishes 7418 10000
98 aluminum containers notexpanding the50litres capacity 7612 90990
99 aluminum kitchenware anddishes 7615 10WT/ACC/GEO/3
Page119
# Description ofProduct Position Code
100 manual garden tools(knifes, etc.) 8201 10
0008201 20
00008201 30
0008201 50000
101 wood-cutting instruments -platesaws 8202 32
102 screwdrivers 8203 20
103 hammers, planes 8205 20
0008205 30000
104 guts 8205 40000
105 milling cutters 8207 70900
106 capsforglass bottles, corks, etc. 8309 90900
107 internal burning engine 8407 21
108 motorcycle andcarengines 8407 31
0008407 32
0008407 33
(except8407 33
100)8407 34
(except8407 34
1008407 34
300)8407 90
(except 8407 90
5008407 90700
109 carinternal burning engines 8408 20
(except8408 20
1008408 20
3109408 20
3508408 20
370)
110 household liquid pumps, manual 8413 20900
111 manual household pumps 8414 20990
112 compressors usedinrefrigerating plants 841430
113 electronic engine airconditioners fortables, wall, floor, ceiling with
capacity of125kW8414 51
(except8414 51
100)
114 airconditioner supplies formeasuring airtemperature and
humidity;conditioners without aseparate regulator ofhumidity;- for
wallorwindow- other8415 10
0008415 82
9008415 83900
115 refrigerator closets andcontainers 8418 10900
116 family refrigerators- compressive- electric, absorbing- other 8418 218418 22
0008418 29000
117 refrigerator shelves 8418 50190
118 water heaters orwater accumulators 8419 19000
119 medical, surgical sterilizers 8419 20000WT/ACC/GEO/3
Page120
# Description ofProduct Position Code
120 machines, equipment andother forpreparing warm drinks orheating
updishes8419 81
(except8419 81
100)
121 electric milkseparators withcapacity of1kWandmanual capacity of
50litre/hour8421 11000
122 household aircleaning machine 8421 39300
123 household dishwashers 8422 11000
124 machines forweighting andacknowledging thewrapped goods 8423 81300
125 motor operated cultivators 8432 29100
126 machines forcutting thehay,grass, etc. 8433 118433 19
127 machines usedinmilkindustry 8434
(except8434 90
000)
128 electric incubators withcapacity of4kw 8436 21000
129 mixers andrelated machines infoodindustry 8438
(except8438 30
0008438 40
000)
130 binding machines forbrochures 8440
131 machines fortextile fibreweaving: -carding machines;- looms 8445 11
0008446
132 household orlaundry washing machines 8450
(except8450 90
000)
133 dryers forclothing 8451 21
134 automatic orother sewing machines 8452 21
0008452 29000
135 electric household sewing machines 8452 10
136 metal cutting machinery 84588459
137 household wood work machinery 8465
138 non-electric, manual tools 8467
(except8467 91
0008467 92
0008467 99
000)
139 automatic andelectrical typing machines,machinery fortextile work 8469
(except8469 31
0008469 39
000)
140 calculators, counting machines, ticket apparatus, etc. 8470
(except8470 10
0008470 30
0008470 40
0008470 90
000)WT/ACC/GEO/3
Page121
# Description ofProduct Position Code
141 machines andblocks forautomatic information processing; magnetic
andoptical counting machines, machines fortransmitting coded
messages8471
(except8471 10
1008471 20
1008471 91
1008471 92
1008471 93
1008471 90
100)
142 electronic machines forcounting, sorting, binding andwrapping
banknotes8472 90100
143 other office electrical equipment:document binding machines, paper
disposal machines, electric pencil sharpeners andetc.8472 90900
144 concrete mixer 8474 31000
145 equipment formaking mixtures ofbuilding materials 8474 39000
146 rubber andrubber product making machinery 8477
(except8477 90)
147 tapsandother products fortubes, pipes, reservoirs, cisterns andother
containers including thermoregulators8481
148 general machinery reductors andtransmissions 8483 40930
149 general machinery moto-reductors 8483 40990
150 electric engines (except aviation ones)- engines withcapacity not
expanding 37.5w- AC/DC Universal engines withcapacity not
expanding 37.5w8501 108501 20
(except8501 20
100)
151 -engines withconstant electricity supply withcapacity notextending
750w- engines withconstant electricity supply withcapacity over750w
butbelow 75kw- onelineengines withchangeable electricity supply
andcapacity notexpanding 7.5kw- multi lineengines withchangeable
electricity supply8501 31
(except8501 31
100)8501 32
(except8501 32
100)8501 40
9008501 51
(except8501 51
1008501 51
910)
152 complex electrogenerating equipment withinternal engine ofcapacity
notexpanding 7.5kw8502 20910
153 throttles fordischarge lamps andtubes 8504 10
(except8504 10
100)
154 liquid dielectric operated transformators (3000v)- capacity not
expanding 650kW-capacity more than650kw butbelow 1000 kW8504 21
0008504 22
155 measuring transformators withcapacity notexpanding 1kW 8504 31
(except8504 31
100)
156 other transformators withcapacity more than500w(with electricity
more than3000v)8594 24000
157 welding 8504 40910
158 charging machinery, accumulating equipment 8504 40930WT/ACC/GEO/3
Page122
# Description ofProduct Position Code
159 basic elements andbatteries 8506 (except
8506 20
0008506 90
000)
160 electric accumulators including theirapparatus ofdifferent shapes 8507
(except8507 10
1008507 20
1008506 30
1008507 40
1008507 80
1008507 90)
161 electrical engine operated manual electric-mechanical instruments with
indulged8508
(except8508 10
1008508 80
1008508 80
3008508 90
000)
162 electrical engine operated household electric mechanical machines 8509
(except8509 90)
163 electrical engine operated electric shavers andhaircutters; 8510
(except8510 90
000)
164 electrical equipment withinternal burnengine forautomobile transport
(ignition coils, spark-plugs, starters);generators (ofconstant and
changeable electricity supply)8511
(except8511 10
1008511 208511
301008511 40
1008511 50
1008511 808511
90000)
165 alarm andlighting equipment 8512
(except8512 10)
166 industrial orlaboratory usedelectric ovens andcontainers including
special machinery forthermo-works8514 (except
8514 10
9908514 90
0008514 90)
167 soldering irons andsoldering apparatuses 8515 11000
168 automatic andhalfautomatic machines andapparatus forarcwelding
ofmetals8515 31000
169 electric accumulating water heaters; sinking electric boilers; heating
systems forhouses; electric irons andother electric household items8516
(except8516 80
8516 90000)
170 electric phone system 8517 10100
171 electric doorbellsystems 8517 81100
172 electrical voice devices, microphones 8518 50900WT/ACC/GEO/3
Page123
# Description ofProduct Position Code
173 tapeplayers andsimilar devices notincluding recording supplies (more
than363v)8519 (except
8519 91
1008519 91
910)
174 taperecorders andother recording devices withorwithout players 8520
(except8520 31
1108520 31
3008520 90)
175 video recording andplaying devices withorwithout videotuner 8521
(except8521 10
100)
176 broadcasting devices andapparatus forradio/ television, TVcameras 8525
(except8525 10
1008525 20
100)
177 radio-phone devices, radio-telegraph devices andother apparatus for
radio broadcasting8527
(except8527
118527 19
0008527 90)
178 television receivers including video monitors andvideo projectors, with
orwithout voice recording andplaying devices8528
179 fireandsafety electronic alarms 8531 10900
180 electronic bellsandindicative panels 8531 80900
181 constant electric network condensators of50/60Hz. 8532 10000
182 electric devices forturning on/off theelectricity, contacts, withvoltage
over1000 V(switches, switchboards, power reducers, fluctuation
reducers, electric load, using equipment, etc.)8535
(except8535 90
000)
183 electric devices forswitching on/off, breaking andprotecting the
electricity supply orforconnection toelectric circuits(switches,
sockets, cords, etc.)8536
(except8536 10
9008536 20
9008536 30
9008536 418536
90)
184 electric andair-discharge incandescent lamps, including hermetically
sealed lamps ofdirected light, alsoultra-violet andinfra-red lamps8539
(except8539 10
1008539 40
9008539 90)
185 electric-laser hoses fortelevision receivers including video
monitorswith:- colored vision- black andwhite vision- vacuum display
hoses8540 118540
128540 89110WT/ACC/GEO/3
Page124
# Description ofProduct Position Code
186 isolated electric tubes withorwithout connective details, optic cables 8544
(except8544 11
9008544 208544
301008544
418544 498544
601108544 60
9108544 70
000)
187 small trucks foragricultural works 8701 108701 20
100
188 new10people vehicles 8702
189 cars(except used, sport, snow equipped, fieldgames vehicles) 8703
190 trucks (except used, onesfortransporting radioactive products) 8704
191 cement mixing vehicles 8705 40000
192 trucks specifically usedforcitycommunication purposes 8705 90000
193 cardevices anddetails:bumpers, safety belts, breaks, amortizators,
noise reductors, wheel related mechanisms8708 10
9008708 21
9008708 80
9008708 92
9008708 93900
194 electrical transport devices fortransporting goods toware-houses 8709 11900
195 motorcycles, bikes withsupporting engines withorwithout additional
seats(except theusedandsport cars)8711
(except8711 10
000)
196 twowheel bikes without engine 8712 00
197 children cabs 8715 00100
198 yachts andother swimming devices likeboats andcanoe(except sport
ones)8903
199 photo cameras withflashes 9006
(except9006 10
0009006 20
0009006 30
0009006 919006
99000)
200 cineprojectors 9007 21000
201 slideprojectors 9008 40000
202 electric devices andapparatus formedical, surgical, dental,
veterinarian, etc.uses9018
203 individual safebreathing devices 9020 00900
204 cardostimulator 9021 50000
205 changeable electricity measurers- oneline-multi line 9028 30
1109028 30190
206 electricity measurers andother 9018 30900
207 automobile speedometers 9029 20310
208 cathode-beam oscilloscopes andoscillographs 9030 20900WT/ACC/GEO/3
Page125
# Description ofProduct Position Code
209 mixed electromeasuring devices 9030 31900
210 voltmeters, ampermeters andother electric devices 9030
(except9030 39
100)
211 electric clocks 9105
(except9105 11
1009105 299105
910009105 99)
212 electrical music instruments withelectrical sound frequency generators
orsound improving devices (likeguitar, organ)9207
213 seating furniture 9401
(except9401 10
9401 50
000940190)
214 medical, surgical, dentist, veterinarian furniture 9402
215 other furniture (except theonesforpublic aviation usage) 9403
(except9403 20
1009403 70
1009403 80
0009403 90)
216 lighting devices:- forstage, TVandmovie studios- forphoto and
movie filming- forindustrial purposes- fortables andprojectors9405
(except9405 10
0009405 50
000\9405 60
1009405 919405
929405 99)
217 children ’stoysonwheels (likethree wheel bike, littlemanual cars),toy
cabs9501 00
218 human liketoys 9502
219 other toysofreduced shapes, funmovable orstraight devices, puzzles 9503
220 receiver operated video games 9504 10000
221 coinortoiloperated toys 9504 (except
9504 30900)
222 rubber masks andrelated diving gear 9506 29900
223 chargeable electronic lighter forstove, forcigarettes 9613 80000
224 building material outofcement andmetal Group 686813
(except2515;
2516; 2517;
2523; 6904;
6908
225 lightindustrial goods incontact withhuman body 6105; 6106;
6107; 6108;
6109; 6115
226 liquid gas 2711 11
0002711 12110
227 coal 2701WT/ACC/GEO/3
Page126
# Description ofProduct Position Code
228 artificial leather 4111 00000
229 curing remedies 3003; 3004
230 synthetic ammonia 2814
231 calcium carbide 2819 10000
232 stealtubes 7304 10
233 caprolactum
234 chemical fibreandthread
5. RecommendationsanddecisionsoftheIntergovernmentalCouncilofstandardization,metrology
andcertification.
6. Resolution No.605oftheCabinet ofMinisters oftheRepublic ofGeorgia of20August 1994
“Ongradual introduction ofmandatory certification ofproducts intheRepublic ofGeorgia ”andlist
ofproducts subject tomandatory certification adopted bythisResolution.
7. Decrees oftheHead ofState ofGeorgia:
- No.7of17January 1994 “Onstandardization andcertification intheRepublic ofGeorgia ”;
- No.10of17January 1994 “Onmeasuring intheRepublic ofGeorgia ”;
- No.353of13September 1994“Onmeasures ofpromotion andfinancial maintenance ofthe
development ofstandardization, metrology andcertification intheRepublic ofGeorgia ”.
8. “Rules ofimport ofgoods which aresubject tomandatory certification ontheterritory of
Georgia ”approved on15May1995, bytheCustoms Department and“Sakstandarti ”andregistered
intheMinistry ofJustice ofGeorgia.
9. Joint Decree oftheMinister ofAgriculture andFood andHead ofthe“Sakstandarti ”,in
accordance withtheDecree ofthePresident ofGeorgia No.252,“Onconducting ofsupervision, control
andcertification ofgrain andproducts ofitsprocessing bytheState Inspection ofBread andBread
Products ”of3April 1996.
10. Law“Onprotection ofconsumers ’rights ”hasbeeninforce since 1June1996.
TheGeorgian State Department forStandardization, Metrology andCertification (further
"Sakstandarti")hasmadestepsforbecomingthecorrespondentmemberoftheInternationalOrganization
forStandardization (ISO). Aunited informational bankinthesphere ofcertification isintheprocess
ofestablishment. "Sakstandarti" considers necessary togetpackage ofnormative-legal documents to
become familiar withthem, which arethebasis forformation oftechnical barriers oftheWTO.
TheLaw“Onensuring ofcommon measuring ”isunder consideration intheappropriate
committees oftheParliament ofGeorgia.
2. Information regarding:
(a) names ofpublications, ifany,onwork relating todrafttechnical regulations orstandards and
proceduresWT/ACC/GEO/3
Page127
InGeorgia information oninterstate standards (ÃÎÑÒ)ispublished intheStandard Information
Directory oftheInterstate Council forStandardization, Metrology andCertification oftheCIS
countries. Information onStatestandards andondecisions andprocedures isbeing published
inthebulletin of“Sakstandarti ”.
(b) thename andaddress oftheinquiry point(s) foreseen inArticles 10.1and10.3oftheWTO
Agreement onTechnical Barriers toTrade (theAgreement) withanindication astowhether
itis/they arefullyoperational
Information onstandards andprocedures inGeorgia isbeing collected in“Sakstandarti ”,a
State executive body (67,Chargali St.,Tbilisi, tel.:612530).
(c) thename andaddress oftheagency dealing withconsultations asforeseen intheArticle 14
oftheAgreement
Consultation anddiscussion ofdisputes withregard tostandardization andproduct certification,
connected withtheAgreement onTechnical Barriers inTrade iscarried outby“Sakstandarti ”
anditslocalorganizations. See(b)above.
(d) thename andaddress ofagencies thataredealing withother specific functions foreseen inthe
Agreement
See(b)above.
(e) thescope ofresponsibility ofthecentral government authorities intheareaofnotification
requirements foreseen intheArticle 10.11 oftheagreement andofindividual government
authorities, iftheresponsibility isdivided among twoormore suchauthorities
Thisdoesnotapply inGeorgia.
(f) measures andarrangements toensure thatnational andsub-national authorities preparing new
technical regulations orsubstantial amendments toexisting ones, provide early information
ontheirproposals
Measures, connected withmaking amendments andadditions tostandards, areelaborated in
thestandardization system which willbeimplemented inthenearfuture.WT/ACC/GEO/3
Page128
ANNEX 6
Information onState-Trading
I.1. Enterprises covered bytheprovisions ofArticle XVII
There isnoenterprise withspecial orexclusive privileges intheproduction ofanygoods or
theprovision ofanyservices inGeorgia.
InGeorgia, allpublic sector monopolies onthesupply ofgoods andservices have been
eliminated. Norarethere anyparastatal orgovernment-mandated private sector monopolies. For
example, there isnolawagainst theprivate supply ofutility ortransport services. Thegovernment
isexamining howtheprivate sector might contribute further inthesesectors. Thelastremaining State
monopoly among product industries wasthebread industry. Thishasnowbeenprivatized andprices
liberalized.
II.1 andfollowing questions: Noenterprises hasexclusive rights inthesupply ofanygoods or
services, andnoneofthese issues arise.WT/ACC/GEO/3
Page129
ANNEX 7
A. FreeTrade Agreements
FreeTrade Agreement between theGovernment oftheRepublic ofGeorgia andtheGovernment of
Ukraine. Tbilisi, 19January 1992.
FreeTrade Agreement between theGovernment oftheRepublic ofGeorgia andtheGovernment of
theRussian Federation. Tbilisi, 3February 1992.
FreeTrade Agreement between theGovernment oftheRepublic ofGeorgia andtheGovernment of
theRepublic ofUzbekistan. Tashkent, 4September 1995.
FreeTrade Agreement between theGovernment oftheRepublic ofGeorgia andtheGovernment of
theRepublic ofArmenia. Tbilisi, 14August 1995.
FreeTrade Agreement between theGovernment oftheRepublic ofGeorgia andtheGovernment of
theRepublic ofAzerbaijan. Tbilisi, 8March 1996.
FreeTrade Agreement between theGovernment oftheRepublic ofGeorgia andtheGovernment of
theRepublic ofTurkmenistan. Tbilisi, 12March 1996.
FreeTrade Agreement between theGovernment oftheRepublic ofGeorgia andtheGovernment of
theRepublic ofUzbekistan. Tbilisi, 28May1996.
Agreement onCreation ofZone ofFreeTrade oftheCommonwealth ofIndependent States. Moscow,
15May1993.
B. Other trade-related agreements
Agreements inthefieldofinvestments:
Agreement between theGovernment oftheRepublic ofGeorgia andtheGovernment ofUSA onthe
Promotion ofInvestments -27June1992;
Agreement between theGovernment oftheRepublic ofGeorgia andtheGovernment oftheRepublic
ofTurkey onthePromotion andReciprocal Protection ofInvestments -30July1992;
Agreement between theGovernment oftheRepublic ofGeorgia andtheGovernment ofthePeoples '
Republic ofChina onthePromotion andReciprocal Protection ofInvestments -1March 1995;
Agreement between theGovernment oftheRepublic ofGeorgia andtheBelgo-Luxembourg Economic
Union onthePromotion andReciprocal Protection ofInvestments -23June1993;
Agreement between theGovernment oftheRepublic ofGeorgia andtheGovernment oftheFederal
Republic ofGermany onthePromotion andReciprocal Protection ofInvestments -25June1993;
Agreement between theGovernment oftheRepublic ofGeorgia andtheGovernment oftheHellenic
Republic onthePromotion andReciprocal Protection ofInvestments -9November 1994 ;
Agreement between theGovernment oftheRepublic ofGeorgia andtheGovernment ofUkraine on
thePromotion andReciprocal Protection ofInvestments -9January 1995;WT/ACC/GEO/3
Page130
Agreement between theGovernment oftheRepublic ofGeorgia andtheGovernment oftheRepublic
ofBulgaria onthePromotion andReciprocal Protection ofInvestments -19January 1995;
Agreement between theGovernment oftheRepublic ofGeorgia andtheGovernment ofGreat Britain
onthePromotion andReciprocal Protection ofInvestments -15February 1995;
Agreement between theGovernment oftheRepublic ofGeorgia andtheGovernment ofIsrael onthe
Promotion andReciprocal Protection ofInvestments -19June1995;
Agreement between theGovernment oftheRepublic ofGeorgia andtheGovernment oftheRepublic
ofUzbekistan onthePromotion andReciprocal Protection ofInvestments -4September 1995;
Agreement between theGovernment oftheRepublic ofGeorgia andtheGovernment oftheIslamic
Republic ofIranonthePromotion andReciprocal Protection ofInvestments -26September 1995;
Agreement between theGovernment ofGeorgia andtheGovernment oftheRepublic ofAzerbaijan
onthePromotion andReciprocal Protection ofInvestments -8March 1996;
Agreement between theGovernment ofGeorgia andtheGovernment oftheRepublic ofTurkmenistan
onthePromotion andReciprocal Protection ofInvestments -20March 1996;
Agreement between theGovernment ofGeorgia andtheGovernment oftheRepublic ofArmenia on
thePromotion andReciprocal Protection ofInvestments -4June1996;
Agreement between theGovernment ofGeorgia andtheGovernment oftheRepublic ofFrance on
thePromotion andReciprocal Protection ofInvestments -3February 1997;
Agreement between theGovernment oftheRepublic ofGeorgia andtheGovernment ofUSA onthe
Promotion andReciprocal Protection ofInvestments -7April 1994.
Thelistofagreements ontheAvoidance ofDouble Taxation withrespect toTaxes onIncome and
onProperty
Convention onAvoiding ofDouble Taxation andthePrevention ofFiscal Evasion withrespect ofTaxes,
Income andproperty between theGovernment ofGeorgia andtheGovernment oftheRepublic of
Uzbekistan. -28May1996;
Agreement between theGovernment ofGeorgia andtheGovernment oftheIslamic Republic ofIran
fortheAvoidance ofDouble Taxation andthePrevention ofFiscal evasion withrespect totaxes and
income. Tbilisi, 3November 1996.
Convention fortheAvoidance ofDouble Taxation andthePrevention ofFiscal evasion withrespect
totaxes andincome between theGovernment ofGeorgia andtheGovernment ofUkraine. -
14February 1995.
Convention fortheAvoidance ofDouble Taxation andthePrevention ofFiscal evasion withrespect
totaxes andincome between theGovernment ofGeorgia andtheGovernment oftheRepublic of
Azerbaijan. -Baku, 18February 1997.
Convention between USSR andtheRepublic ofFrance fortheAvoidance ofDouble Taxation -
4October 1985 (Succession -3February 1997).WT/ACC/GEO/3
Page131
TheListofAgreements onTrade-Economic Cooperation:
Agreement onTrade Relations between theRepublic ofGeorgia andtheUnited States ofAmerica -
1April 1993.
Trade -Economic Agreement between theGovernment ofthePeople 'sRepublic ofChina andthe
Government oftheRepublic ofGeorgia -3June1993.
Treaty onEconomic Cooperation andTrade Relations between theGovernment oftheRepublic of
Poland andtheGovernment oftheRepublic ofGeorgia -29April 1992.
Treaty onTrade -Economic Relations andTechnical-Scientific Relations between theGovernment
ofCzech andSlovak Federal Republic andtheGovernment oftheRepublic ofGeorgia -20May1992.
Agreement onTrade -Economic Relations between theGovernment oftheRepublic ofHungary and
theGovernment oftheRepublic ofGeorgia -2November 1992.
Agreement between theGovernment oftheRepublic ofGeorgia andtheGovernment oftheRepublic
ofIndia onTrade andEconomic Cooperation. -Tbilisi, 15August 1995.
TradeAgreementbetweentheGovernmentoftheRepublicofGeorgiaandtheGovernmentoftheIslamic
Republic ofIran-20January 1993.
Treaty between Georgia andtheRepublic ofTurkey onTrade andEconomic Cooperation. -Tbilisi,
30July1992.
Treaty between theGovernment oftheRepublic ofHungary andtheGovernment oftheRepublic of
Georgia onTrade -Economic Relations andTechnical-Scientific Cooperation. -24March 1992.
Agreement onTrade andEconomic Cooperation between theGovernment oftheRepublic ofGeorgia
andtheGovernment oftheRepublic ofBulgaria. -25August 1994.
Trade andEconomic Agreement between theGovernment ofTurkmenistan andtheGovernment of
theRep.ofGeorgia. -17August 1993.
Agreement intheSphere ofRegulation ofTransit Transportation between theRepublic ofUzbekistan,
theRepublic ofAzerbaijan, Turkmenistan andGeorgia. -13May1996.
Agreement onthePrinciples ofTrade andEconomic Cooperation between theGovernment ofthe
Republic ofGeorgia andtheGovernment oftheRepublic ofMoldova. -1992.
Protocol between theGovernment oftheRepublic ofAzerbaijan andtheGovernment oftheRepublic
ofGeorgia Relating totheTransportation ofAzerbaijan OilThrough theRepublic ofGeorgia.
Agreement between Georgia andAzerbaijan Republic Relating totheDevelopment andRefurbishment
ofCertain Existing Petroleum Transportation Facilities, theDevelopment ofNew Petroleum
Transportation Facilities, andtheTransportation ofPetroleum ViaSuchFacilities Beyond theTerritory
ofGeorgia. -Tbilisi, 8March 1996.
Agreement between theGovernment oftheRepublic ofAzerbaijan andtheGovernment ofGeorgia
onthePrinciples ofTrade andEconomic Cooperation. -8March 1996.WT/ACC/GEO/3
Page132
AgreementbetweentheGovernmentoftheRepublicofGeorgiaandtheGovernmentofHellenicRepublic
onTrade andEconomic Cooperation -November 1994.
Agreement between theGovernment ofGeorgia andtheGovernment oftheRepublic ofAustria on
Trade andEconomic Cooperation -24May1994.
Agreement between theGovernment oftheRepublic ofGeorgia andtheGovernment oftheRussian
Federation onTrade andEconomic Relations -3April 1996.
Treaty onCreation oftheEconomic Union oftheCommonwealth ofIndependent States -
24September 1993.