WORLD TRADE
ORGANIZATIONWT/REG114/3
12 November 2001
(01-5567)
Committee on Regional Trade Agreements Original:  English
FREE TRADE AGREEMENT BETWEEN THE KYRGYZ REPUBLIC AND ARMENIA
Communication by the Kyrgyz Republic
I. BACKGROUND INFORMATION ON THE AGREEMENT
1. Membership and Dates of Signature, Ratification and Entry into Force
The Parties to the Agreement are the Government of the Republic of Armenia on one side and
the Government of the Kyrgyz Republic on the other.  The Agreement was signed on 4 July 1994.
On 10 October 1995, the Government of the Republic of Armenia notified the Government of
the Kyrgyz Republic on the completion of its inte rnal procedures required for the Agreement to
become effective.  The Agreement became effective on 27 October 1995, when a similar note was
submitted by the Government of the Kyrgyz Republic to the Government of the Republic of Armenia.
2. Type of Agreement
The Agreement creates a free-trade area.  It provides for the elimination of customs duties,
taxes and charges which have an equivalent effect, and quantitative restrictions on substantially all the
trade between the Parties.
3. Scope
The Protocol on Exceptions to the Free Trade Regime with Armenia was signed on
4 July 1994.  The Protocol states that exceptions to the free trade regime shall be determined by the
domestic legislation of each of the Parties and that the Parties shall notify changes in their domestic
legislation.  Domestic legislation of the Kyrgyz Re public does not contain exceptions from free trade
regime in trade with Armenia.  Thus, currently there are no exceptions to the free trade regime intrade with Armenia maintained by the Kyrgyz Repub lic.  Furthermore, according to the Protocol, of
2 April 1999, on Amendments and Supplements to the Commonwealth of Independent States (CIS)
Agreement on the Creation of a Free-Trade Area (FTA), the Parties to the CIS FTA Agreement have
agreed not to introduce new quantitative and tariff restrictions on imports and/or exports in trade
between them.  Therefore, the Kyrgyz Republic and Armenia as the Parties to the CIS FTAAgreement will maintain a free-trade area with no exceptions.WT/REG114/3
Page 2
4. Trade Data
Kyrgyz Republic – Trade with Armenia
Imports (Thousand US$) Exports (Thousand US$) H.S.
Chapter 1998 1999 2000 1998 1999 2000
50 122.1 - - … … …
85 172.1 - - - 59.1 -
95 8.1 17.6 - … … …
Other 62.3 2.6 15.27 1.1 1.0 912.7
Total 364.6 10.2 15.27 1.1 60.1 912.7
Source:  National Statistics Committee
II. TRADE PROVISIONS
1. Import Restrictions
Currently, the Kyrgyz Republic applies no customs duties or tariff quotas and charges having
an equivalent effect to customs and fiscal duties to imports from the territory of Armenia.  Neither
there are quantitative restrictions on imports from the territory of Armenia applied by the KyrgyzRepublic.  According to the changes to the CIS FTA Agreement introduced by the Protocol of
2 April 1999, no restrictions will remain in effect after this Protocol is fully implemented.
2. Export Restrictions
Currently, the Kyrgyz Republic applies no customs duties or tariff quotas and charges having
an equivalent effect to customs and fiscal duties on exports to the territory of Armenia.  Neither there
are quantitative restrictions on  exports to the territory of Armenia applied by the Kyrgyz Republic.According to the changes to the CIS FTA Agreement introduced by the Protocol of 2 April 1999, no
restrictions will remain in effect after this Protocol is fully implemented.
3. Rules of Origin
The country of origin of a product shall be a state in which the product was wholly produced
or substantially transformed.  The substantial transformation criterion can be determined by change in
tariff classification at the level of one of the first four digits or by ad valorem  percentages.  The
Agreement does not contain provisions on any type of cumulation of origin.
The Agreement does not contain extensive provisio ns related to determining rules of origin.
It refers to a separate agreement to be develope d for the detailed provisions regarding the rules of
origin.  Under the CIS Free-Trade Area Agreement, of 15 April 1994, the country of origin of goods
in trade between the Parties to the Agreement is  determined in accordance with the CIS Rules of
Determining a Country of Origin of Goods (hereinafter referred to as the Rules).
1  The CIS countries
signed the Rules on 24 September 1993.  The country of origin of a product is considered a CIScountry in which the product was wholly produced or subject to substantial transformation.  The
Rules provide for a list of goods, which are considered wholly produced.  Substantial transformation
may be manifested through (i) an ad valorem  portion, (ii) a list of production or technological
processes and (iii) changes of tariff headings.  The list of production or technological processes is still
being negotiated among the Parties to the Agreement.  In cases where there are no criteria specified
                                                     
1 The text of the Rules was circulated in document WT/REG82/1.WT/REG114/3
Page 3
with respect to a particular product, the general criterion of changes in tariff heading is applied.  A
product is considered substantially transformed if its tariff classification has changed at any of the first
four digits with a list of exceptions.  Such exceptions are being developed and may contain a list of
production or technological operations which, though cause a change in tariff line, are not considered
a sign of substantial transformation, or are considered such only if certain conditions are followed.  Itmay also contain a list of production or technological operations, which though do not cause a change
in tariff line, are considered a sign of substantial transformation, which provided that certain
conditions are followed.
The Rules provide for a possibility of using a cumulative principle of origin while applying
the criterion of substantial transformation.  The cumulative principle can be used with respect to the
CIS countries.  However, the Rules do not contain detailed provisions regarding cumulation.
4. Standards
The Parties to the Agreement may unilaterally introduce measures generally accepted in
international practice and necessary to protect humans, animal and plant health.  The Agreement does
not provide for common standards or mutual recognition of certificates.  However, in accordance withthe Agreement on the Uniform Policy on Standardization, Metrology and Certification, which was
executed by the CIS countries, the Parties to the Agreement mutually accept certificates issued by
accredited institutions of the Parties.
5. Safeguards
The Parties to the Agreement may unilaterally introduce quantitative restrictions or other
special restrictions with respect to the products covered by the Agreement as a safeguard measure in
the following cases:
- Critical deficit of the balance-of-payment;- An acute deficit of this product in the domestic market, until the market situation is stabilized;- With a view to carrying out the measures stip ulated for re-exportation according to Article 4
of the Agreement.  According to this Article, a written permission of the country of origin is
required for re-export by either Party to the Agreement to third countries of food originating
from the territory of the other Party on which the latter applies tariff and/or non-tariffmeasures or grants foreign trade privileges upon exportation form its territory.  Where failure
to fulfil this requirement causes damage to the economy of the country of origin, such a Party
may introduce measures on exportation of goods to the territory of a Party, which fails to
fulfil.
A Party to the Agreement which applies a re striction shall provide, in advance, full
information on reasons for introduction, forms and estimated terms of applying the measure,
following which consultations are to be held.  There is no specific safeguard provision related to
agriculture.
6. Anti-Dumping and Countervailing Measures
The Agreement does not contain any specific provisions concerning anti-dumping and
countervailing measures.  Nevertheless, the Parties have acknowledged the incompatibility of unfair
business practices with the objectives of the Agreement (Article 6).WT/REG114/3
Page 4
7. Subsidies and State-Aid
The Parties have agreed not to use State-aid in the form of subsidies if such measures have a
result of violating the normal economic conditions on the territory of the other Party.  There are no
provisions in the Agreement regarding the remedies available to counter their effects on intra-trade
(Article 8).
III. GENERAL PROVISIONS OF THE AGREEMENT
1. Exceptions and Reservations
The Agreement does not preclude the Parties from using measure generally accepted in
international practice and necessary to fulfill inte rnational agreements, if they are related to the
following:
- protection of health of people, animals and plants;
- protection of public moral and order;
- trade in gold, silver or other precious metals and stones;
- protection of industrial and intellectual property;
The Agreement does not preclude the Parties from using measures generally accepted in
international practice and necessary to fulfill inte rnational agreements and to protect its security
interests, if they are related to the following:
- information concerning the national security interests;
- trade in arms, ammunition and military equipment;
- research or production related to the needs of defense;
- supplies of materials and equipment used in the nuclear industry.
2. Accession
Any country may join the Agreement if the Parties agree on it.  The Agreement does not
provide for the terms and conditions of joining it, which are to be agreed between the Parties to the
Agreement and an acceding country.
3. Dispute Settlement Procedures
Disputes between the Parties shall be settled through negotiations.
4. Relations with Other Trade Agreements
The Agreement does not establish any specific relation with other bilateral, plurilateral and/or
multilateral trade agreements.
5. Institutional Framework
The Parties to the Agreement have agreed to form a Joint Kyrgyz-Armenian Commission for
the implementation of the Agreement and development of recommendations to improve the trade and
economic relations between the Parties to the Agreement.WT/REG114/3
Page 5
IV. OTHER
Other provisions of the Agreement refer to the following:
- Storage, reloading, warehousing, transportation, payments and transfer of payments:  no
measures discriminating the products of other Party are applied;
- Special restrictions or requirements are applied on a non-discriminatory basis;- Obligation not to allow unfair business practices, including but not limited to certain practices
of use by certain enterprises of their dominant position intending to limit competition on the
territories of the Parties to the Agreement;
- Re-exportation:  each Party to the Agreement undertakes not to re-export goods, originating
from the territory of the other Party to third countries unless it gets permission from the latter.
This provision applies with respect to the goods to which the Party, where these goods
originate from, applies measures of regulation of foreign economic activity or grants
privileges upon exportation from its territory;
- Freedom of transit;- The Parties have agreed to use the CIS Goods Nomenclature of Foreign Economic Activity
based on the Harmonized Commodity Description and Coding System and the CombinedTariff-Statistical Nomenclature of the European Union.
__________