RESTRICTED
WORLD TRADE WT/ACC/SPEC/LVA/3/Rev.11
15September 1997
ORGANIZATION(97-3631)
DRAFT REPORT OFTHE WORKING PARTY ON
THE ACCESSION OFLATVIA
TOTHE WORLD TRADE ORGANIZATION
Revision
Introduction
1. TheGovernment ofLatvia 'srequest foraccession totheGeneral Agreement onTariffs and
Trade (GATT 1947) wascirculated toContracting Parties inNovember 1993. Atitsmeeting on
17December 1993, theGATT 1947Council ofRepresentatives established aWorking Party toexamine
theapplication oftheGovernment ofLatvia toaccede totheGeneral Agreement under Article XXXIII,
andtosubmit totheCouncil recommendations which mayinclude adraft Protocol ofAccession.
Membership oftheWorking Party wasopentoallContracting Parties indicating theirwishtoserve
onit.Inpursuance oftheMinisterial Decision of14April 1994 onAcceptance ofandAccession to
theMarrakesh Agreement Establishing theWorld Trade Organization (WTO) andtotheDecision of
31May1994ofthePreparatory Committee fortheWTO, theWorking Party examined theapplication
ofLatvia formembership intheWTO andagreed topursue themarket access negotiations forgoods,
including anagricultural country schedule, andforservices. Inpursuance oftheDecision adopted
bytheWTO General Council on31January 1995, theexisting GATT 1947Accession Working Party
wastransformed intoaWTO Accession Working Party. Theterms ofreference andthemembership
oftheWorking Party arereproduced indocument WT/ACC/LVA/6/Rev.2.
2. The Working Party meton28-29 March and13November 1995; 22March and
16September 1996; 27February and........... 1997 under theChairmanship ofMr.F.Theilgaard
(Denmark).
1Inorder tofacilitate theidentification ofchanges totheearlier version oftheReport additions
tothetextareshaded anddeletions arestruck out.WT/ACC/SPEC/LVA/3/Rev.1
Page2
Documentation
3. TheWorking Party hadbefore it,toserve asabasis foritsdiscussions, aMemorandum on
theForeign Trade Regime ofLatvia (L/7526 withAddenda 1,2and3)andthequestions submitted
byMembers ontheforeign trade regime ofLatvia, together withthereplies thereto (WT/L/49 and
Corrigendum 1andAddendum 1;WT/ACC/LVA/3, WT/ACC/LVA/4, WT/ACC/LVA/8 and
Corrigendum1;WT/ACC/LVA/12,WT/ACC/LVA/16)andotherinformationprovidedbytheLatvian
authorities (WT/ACC/LVA/5, WT/ACC/LVA/20, WT/Spec(95)6; WT/SPEC/26). TheGovernment
ofLatvia made available totheWorking Party thefollowing documentation:
- theLawonCustoms Duty withAnnexes I(Import dutytariffs) andII(Export dutytariffs);
- Latvia 'sNational Tariff Schedule;
- LawontheBank ofLatvia;
- LawonCredit Institutions;
- LawonCompetition andRestriction ofMonopoly;
- LawonTrademarks;
- LawonIndustrial Design Protection;
- Patent Law;
- Resolution andLawonBookkeeping;
- Decree andLawonJoint Stock Companies;
- Resolution andLawonIncome Tax;
- Resolution andLawonLimited Liability Companies;
- Resolution andLawonForeign Investment intheRepublic ofLatvia;
- Resolution andLawonExcise Tax;
- Resolution andLawonTurnover Tax;
- Resolution andLawoftheRepublic ofLatvia onEntrepreneurial Activity;
- RegulationoftheGovernmentofLatviaNo.434of19November1996OnLicensingofSeparate
Forms ofEntrepreneurial Activity;
- Regulation onFood;
- Regulations oftheCabinet ofMinisters No.208of1November 1994 ontheOrder of
Establishment andAdministration ofImport andExport Tariff Quotas;
- Regulations oftheCabinet ofMinisters No.24of17January 1995 OnOrder ByWhich the
Special Authorizations (Licences) Shall BeIssued inAccordance WiththeQuotas ofCustoms
Tariffs;
- Regulations oftheCabinet ofMinisters No.20of17January 1995Regulations toProtect the
Domestic Market forFood Stuff Produced inLatvia;
- RegulationsoftheCabinetofMinistersNo.27of31January1995OnDeterminingtheCustoms
Value ofImport andExport Goods orOther Items;
- RegulationsoftheCabinetofMinistersNo.87of12April1994OntheMandatoryCertification
ofFoodstuff, Perfumery andToys;
- Programme ofReforms fortheNational Economy ofLatvia "Latvia 2000";
- Regulations oftheCabinet ofMinisters No.37of25January 1994 OnState Monopoly of
Alcohol andAlcoholic Beverages;
- Regulation bytheBank ofLatvia OnGranting Licences (Permissions) toPerform Activities
ofCredit Institutions;WT/ACC/SPEC/LVA/3/Rev.1
Page3
- Regulation bytheBank ofLatvia OnRegulation onAmending theCharter, Changing
Shareholders, theInitial Capital, theManagement, theChief Accountant, theLegal Address,
theName ofaCredit Institution, andUndertaking Merger orSplit-up ofCredit Institutions;
- Regulations oftheCabinet ofMinisters No.185 of23August 1994 OnFormation ofPrices
andTariffs ofGoods andServices;
- LawonForeign Investment intheRepublic ofLatvia;
- theOfficial ListofQuarantinable Pests;
- Founding LawoftheLatvian Food Centre;
- Statutes ofInformation, Consultation andTraining Centre ofGoods andServices;
- Draft Customs Code;
- LawonSafety onProducts, Services andLiability ofProducer, Supplier of26September 1996;
- LawonUniformity ofMeasurements of11March 1997;
- LawonConformity Assessment of20August 1996;
- Draft LawonSafety onProducts, Services andLiability ofProducer, Supplier;
- Draft LawonUniformity ofMeasurements;
- Draft LawonConformity Assessment;
- Law oftheRepublic ofLatvia OnGovernment andMunicipal Procurement, effective
1January 1997;
- LawonPharmaceutical Operations of27April 1993;
- LawonVeterinary Medicine of6March 1995;
- LawonFoodstuff Circulation Procedures andSupervision of29June1995;
- LawontheProtection ofConsumer Rights of28October 1992;
- LawonPlant Protection of20October 1994;
- Regulation OntheIndication ofDurability DateofPre-packaged Foodstuffs (25June1996);
- Regulation OnProcedure ofRecognition intheRepublic ofLatvia ofConformity Assurances
andApprovals Issued Abroad inMandatory Area (24December 1996);
- Regulation No.463of24December 1996 OntheAuthorization ofTesting andCalibration
Laboratories, Certification andInspection Bodies intheMandatory Area;
- Regulation oftheCabinet ofMinisters No.106of25March 1997OnRegulations ofQuotas
ofCustoms Tariffs;
- LawonAgriculture;
- Conception onUseofAgricultural Subsidies andtheProgram Rationales for1998-2002;
- Latvia 'sImport Totals under eachHarmonized System 8-digit category (f.o.b. values); and
- Latvia 'sImport Datafor1994.
Introductory Statements
4. Therepresentative ofLatvia stated thatLatvia hadachieved considerable results intransforming
acentrally-planned economy toamarket-based economy since restoration ofindependence in1991.
Latvia haddrafted several newtrade lawsandregulations modelled onWTO principles toestablish
auniform andpredictable trading environment forimporters, exporters andinvestors. Thefifteen
countries oftheEuropean Communities had,counted asoneentity, become Latvia 'sprincipal trading
partner. External traderelations wereemphasized byLatvia 'sgeographical position between Eastand
West;severalbilateraltradeagreementsbasedonthemost-favoured-nationprinciplehadbeenconcluded
andmore were inprogress. Latvia hadalso concluded free trade agreements with the
European Communities andother countries inEurope. However, bilateral andregional arrangementsWT/ACC/SPEC/LVA/3/Rev.1
Page4
alone could notprovide thenecessary stability forexternal trade relations. Latvia hadtherefore made
astrong commitment tobecome aMember oftheWTO. TheWTO principles ofnational andMFN
treatment hadbeenincorporated innational legislation withparticular attention totransparency inthe
publication ofalllawsandregulations andatariff-based trade regime. Minimal tariffs wereimposed
onimported rawmaterials, spare parts andcapital goods, thebasic average MFN import tariff was
15percent,andexport tariffs wereimposed onlyonsome rawmaterials. Non-discrimination between
imported anddomestically produced items applied intheimposition ofexcise taxes andtheturnover
tax,thelatter hadbeenreplaced byavalue-added tax.Anyperson orenterprise registered inLatvia
could perform anylegalimport operation. Exports ofspirits, ferrous andnon-ferrous metals were
subject tolicensing withnounderlying quotas. Finally, hepointed outthatLatvia 'seffort tobecome
aMember oftheWTO wassupported byallthemajor political institutions andthatabroad national
consensusexistedregardingtheimportanceofWTOmembershipandthepursuitofliberaltradepolicies.
5. Many members oftheWorking Party welcomed Latvia 'srequest foraccession totheWTO
andexpressed theirreadiness towork withLatvia inelaborating terms ofaccession thatwould support
theprogramme oftransition toamarket-based economy andLatvia 'sintegration intothemultilateral
trading system. Some members welcomed thedocumentation provided andthestatement made by
therepresentativeofLatvia.TheyalsosaidthattheylookedforwardtoadetailedexaminationofLatvia's
policies andofthereasons fortheadoption ofcertain measures, e.g.licensing requirements. Some
members oftheWorking Party noted thatLatvia hadraised tariffs andintroduced newtraderestrictions
aftertherequest foraccession hadbeensubmitted andthatfurther restrictions appeared tobeunder
consideration. Thiswasadisturbing trend, asapplicant countries were expected nottoimplement
anymeasures during accession negotiations thatcould beconsidered inconsistent withtheWTO or
thatalterthebasis fornegotiations. Latvia wasaccordingly requested toremove these measures and
notifytheWorkingPartyofproposednewrestrictionsandtosupplyallnewrelevantlawsandregulations
toitsmembers.
6. TheWorking Party thenproceeded toreview theeconomic policies andforeign trade regime
ofLatvia andthepossible terms ofadraftProtocol ofAccession totheWTO. Theviews expressed
bymembers oftheWorking Party aresummarized below inparagraphs 7to126125.WT/ACC/SPEC/LVA/3/Rev.1
Page5
ECONOMIC POLICIES
Foreign Exchange andPayments
7. Therepresentative ofLatvia saidthathiscountry hadestablished oneofthemostliberal foreign
exchange regimes intheworld. Latvia hadbeenamember oftheInternational Monetary Fund (IMF)
since 1992. Thenational currency -theLat-wasfreely convertible, backed bythecurrency reserves
oftheBank ofLatvia. Foreign exchange andlocal currency could bebrought intoortaken outof
Latvia inunlimited amounts. Foreign entrepreneurs were freetorepatriate profits inanycurrency
having paidtheapplicable taxes. Corporate income taxamounted to25percent,incomes ofphysical
persons were taxed at25or35percentanda10percentwithholding taxwaslevied ondividend
payments tonon-residents. Some members welcomed thefactthattheLatwasfreely convertible and
stressed theimportance ofcontinuing current policies.
8. Therepresentative ofLatvia stated thatLatvia hadnotified theInternational Monetary Fund
thatithadaccepted theobligations ofArticle VIII,sections 2,3and4oftheIMFArticles ofAgreement
witheffect from10June1994. Byaccepting theobligations ofArticle VIII, Latvia gaveconfidence
totheinternational community thatitwould pursue sound economic policies thatwould obviate the
needtorestrict payments andtransfers forcurrent international transactions, andthereby contribute
toamultilateral payments system freeofrestrictions.
Investment Regime
9. Some members oftheWorking Party asked Latvia todescribe thebasicprovisions oflegislation
regulating investment andinparticular identify anyrestrictions orregistration measures affecting foreign
investment.
10. Therepresentative ofLatvia referred totheLaw"OnEntrepreneurial Activity" which provided
forlicensing ofseveral types ofbusiness activities (see"Trading Rights", paragraphs 30to32)(see
"Quantitative Import Restrictions, including Prohibitions, Quotas andLicensing Systems", paragraph
47). Such licences were issued forenterprises registered inLatvia onanon-discriminatory basis,
irrespective ofnationality, toanyapplicant meeting thespecific requirements. Allissues pertinent
toforeign investment -registration, investment protection, taxation, repatriation, dispute settlement,
restrictions oninvestment, safeguards andtheapplicability ofinternational treaties -were regulated
through theLaw"OnForeign Investment intheRepublic ofLatvia".WT/ACC/SPEC/LVA/3/Rev.1
Page6
11. Therepresentative ofLatvia added thattheLawonForeign Investment intheRepublic ofLatvia
stated thatforeign investors weregranted therights andduties provided forbythenational laws. The
LawonForeign Investment contained norestrictions onforeign investment inanysector ofthenational
economy. TheGovernment hadamended theLawonForeign Investment inApril 1996, deleting its
Articles 3,5and6andthusterminating allrestrictions onforeign investment. On4September 1996,
ParliamenthadapprovedthisamendmentandrequestedtheGovernmenttoprepareadjustmentstocertain
other lawstobring theminlinewiththenewLawonForeign Investment. Asaresult ofthisreview,
thelimitonforeign ownership inradio andtelevision companies intheLawonRadio andTelevision
hadbeenraisedfrom20percentto49percent.Foreignownershipofwoodcutting(logging)companies
andgambling business wasalsolimited to49percentinaccordance withtheLawonForestry and
theLawonLotteriesandGambling,respectively.Lawsonlandownershipallowedwholly-ownedforeign
companies toownlandiftheowners ofthecompany werefromcountries withwhich Latvia hadsigned
investment promotion andprotection agreements (25countries atpresent). Legal orprivate persons
from other countries could ownlandifatleast51percentoftheshares inthecompany registered
inLatvia belonged toLatvian citizens ortoforeigners fromcountries withwhich investment protection
agreements hadbeensigned. On5December 1996, theSaeima hadpassed amendments totheLaw
onLand Privatization inRural Regions andon8May1997amendments totheLawonLand Reform
intheRepublic ofLatvia Cities 13January 1997 theCouncil ofMinisters hadadopted Regulation
No.26"OnLand Privatization andAlienation inCities oftheRepublic ofLatvia" which liberalized
thelandmarket inLatvia toaconsiderable extent. According tothenewrules, statutory companies
registered intheEnterprise Register could obtain landinruralareas andlandunder Stateormunicipal
ownership incitieswithout restriction evenwhen morethanhalftheirshare capital wasowned byforeign
persons. Legal entities could obtain landownership withonlyfewrestrictions.
State Ownership andPrivatization
12. Some members oftheWorking Party requested details concerning thepaceofprivatization
inLatvia, noting aninitial statement thatprivatization ofagriculture hadbeencompleted by1995and
that75percentofState-owned enterprises would beprivatized by1996. Latvia wasalsoasked to
enumerate sectors orenterprises where State ownership would beretained foralongperiod or
permanently. Questions were alsoraised concerning theparticipation offoreign investors. Some
members requested areport fromLatvia onprogress achieved todateinitsprivatization programme.
Inaddition, Latvia should beprepared toprovide information onaperiodic basis onitsprivatization
efforts,economicreforms,andimplementationofanytransitionalarrangementsnegotiatedintheProtocol
ofAccession.WT/ACC/SPEC/LVA/3/Rev.1
Page7
13. Therepresentative ofLatvia saidthatnoparticular sector would beexcluded fromprivatization.
Themain considerations weretoimprove company performance andtoavoid thecreation ofprivate
monopolies. A"List ofCurrently Non-Privatizable State Specialized Agricultural Enterprises" was
linked torestitution ofproperty toformer owners. Enterprises operating inindustry, agriculture, trade
andconstruction services would beprivatized first,while sectors suchasmedical care,social welfare
services, medicine wholesale andcertain agricultural sub-sectors would beprivatized overalonger
timeperiod. TheGovernment hadalsodecided thatasell-off ofinfrastructure (roads, railway, public
transport, postal services, etc.)would notbereasonable during thefirstyears ofprivatization. Latvia
provided adocument (WT/L/49/Add.1) onprivatization ofagriculture. InJuly1996, from atotal
of613agricultural statutory associations created atthefirststage ofprivatization offormer collective
andState farms byallocating shares according toinitial contributions ofcapital andlabour, 207had
beenfullyprivatized andexcluded fromtheEnterprise Register, 275hadchosen thevoluntary decision
forselfliquidation and131werestilloperating. Privatization offarms usedfortraining andresearch
would beconsidered onanindividual basis. Foreign firms could participate inprivatization; Latvia
hadheldfourinternational tenders. Foreign natural andlegalpersons could buyprivatization certificates
onlyafterhaving wonthetender foracompany undergoing privatization. Thisrestriction didnotapply
tojointventures orbranches offoreign companies registered inLatvia.
14. Regarding privatization ofindustry, therepresentative ofLatvia saidthatasat1January 1997,
824State enterprises (asset units) hadbeenassigned forprivatization, 68State enterprises assigned
forliquidation, State-owned equity holdings of144enterprises assigned forprivatization, and37real
estates and9plots oflandassigned forsalebytheCabinet ofMinisters. ThePrivatization Agency
wasinvolved invaluation of224restitution cases ofproperty. Privatization regulations hadbeen
approved for720State enterprises (asset units) ortheirparts, 49State-owned equity holdings, and
23realestates. Sales agreements hadbeenconcluded for511State enterprises (asset units) ortheir
parts, 31State-owned equity holdings, 23enterprises tobeliquidated andfor15realestates. The
privatization process would generally becompleted bytheendof1997, excluding large State-owned
companies, where privatization would becompleted bymid-1998. Completion ofprivatization implied
mass privatization, i.e.involving allinhabitants ofLatvia andincluding ,ofState-owned enterprises
andcovered 95percentofallState-owned enterprises land, apartments andState-owned minority
holdings ofshares inprivate companies.
15. According toArticle 4oftheLawonthePrivatization ofStateandMunicipal Property, any
person orlegalentity eligible topurchase liquid and/or fixed assets inLatvia could beaprivatization
subject. Theterm"privatization subject" wasdefined according totheLawonPrivatization ofStateWT/ACC/SPEC/LVA/3/Rev.1
Page8
andMunicipal Asset Units asanyspecific person orlegalentity eligible toobtain Stateormunicipal
property during theprivatization process. TheLatvian State oramunicipality, aState ormunicipal
enterprise,aStateormunicipalcompany,oracompanyinwhichprivatefundsdidnotexceed25percent
oftheequity capital, could notbeprivatization subjects. Therepresentative ofLatvia confirmed that
national treatment applied fortheparticipation offoreigners inprivatization programmes. There were
norestrictions ontheacquisition ofprivatized State andmunicipal property.
16. Asof1January 1997, 1,126 Stateenterprises hadbeenassigned forprivatization (93.8 percent
ofallState enterprises), among them 302in1992-1994, 238in1994, 215in1995 and376in1996.
[Previous table deleted -replaced byTable 1below.]
Inall,some 65percentofallLatvian employees wereworking intheprivate sector atthebeginning
of1997. Intotal, 1,147 units hadbeensoldand53units placed forliquidation. Inorder toattract
foreign investments, thePrivatization Agency hadorganized fourinternational tenders, offering 153
medium andlarge enterprises. Aspecial Public Offering Programme hadbeencreated toencourage
participation ofLatvia 'spopulation. During several fiverounds ofthePublic Offering Programme
5136large enterprises hadbeenoffered tothepublic. Therepresentative ofLatvia provided further
up-dated information onprogress inprivatization inTable 1.
Table 1Information ontheProgress ofthePrivatization Process ofState Enterprises
by5June1997
Activity Total Small objects
(less than50
employees)Medium-sized
objects
(50-500
empl.)Large objects
(More than
500empl.)
Enterprises transferred forprivatization 839 567 237 35
Repeated privatization 10 9 1 0
Privatization objects after splitof
enterprises1512 1205 272 35
Privatization cancelled orenterprises
merged withother companies157 151 5 1
Privatization temporarily stopped 13 10 3 0
Restitution process initiated 68 61 7 0
Liquidation orinsolvency procedure
initiated166 128 34 4
Privatization Regulations approved 741 573 149 19
Transactions concluded:
- purchase agreements signed 635 487 136 12WT/ACC/SPEC/LVA/3/Rev.1
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Activity Total Small objects
(less than50
employees)Medium-sized
objects
(50-500
empl.)Large objects
(More than
500empl.)
- invested intoprivate companies 3 1 2 0
- privatized without majority owner 4 0 2 2
Proceeds ofsaleinLVL million:
- cash 46.2
- privatization vouchers 60.6
17. Therepresentative ofLatvia confirmed thereadiness ofLatvia toensure thetransparency
ofitsongoing privatization programme andtokeepWTO Members informed ofitsprogress inthe
reform ofitstransforming economic andtrade regime under theregular trade policy reviews ofthe
WTO andtoprovide further information onrequest inaccordance withthenotification andconsultation
provisions oftheWTO. Hestated thathisGovernment would provide annual reports toWTO Members
ondevelopments initsprogramme ofprivatization aslongastheprivatization programme would be
inexistence [along thelinesofthatprovided totheWorking Party.] [,andonother issues related to
itseconomic reforms asrelevant toitsobligations under theWTO.] TheWorking Party tooknote
ofthiscommitment assurance.
Pricing Policies
18. Noting thatLatvia hadrelaxed price controls onmany goods andservices, some members of
theWorking Party requested Latvia toprovide details onremaining restrictions, including minimum
andmaximum prices, particularly forsectors notconsidered natural monopolies. Latvia wasasked
tolisttheimported products subject topricecontrols byHarmonized System (HS)tariffline.Amember
noted thatLatvia exercised price controls inanumber ofsectors, including some which were not
traditionally considered natural monopolies, butintended toreduce itsprice controls totheextent
possible. Thismember stated thatpricecontrols should belisted inanAnnex. Moreover, Latvia should
exercise itsauthority inthisareainamanner thatdidnotdamage imports orotherwise acttoinhibit
trade. Thismember alsosought acommitment from Latvia thatcurrent andfuture price controls be
applied inaWTO-consistent fashion andwould bepublished intheofficial journal andthatLatvia
would takeaccount oftheinterests ofexporting WTO Members asprovided forinArticle III.9of
theGATT 1994.
19. Therepresentative ofLatvia replied thatpricecontrol andregulation wascarried outaccording
toseparate lawsandaffected products related toenergy; agriculture (recommended prices forpurchasesWT/ACC/SPEC/LVA/3/Rev.1
Page10
fortheState grain reserve); theforestry sector (theprice ofstumpage); publishing ofschool books
financed from theState budget; pharmaceuticals; postal services; portservices; airport services;
archives; andhousing rents, power-supply andresidential services. Minimum andmaximum prices
werestipulated forthefollowing domestic andimported services: transit services foroilandoilproducts
bypipeline; reloading ofoilandoilproducts inports; transit shipment ofoilandoilproducts by
railway transport; long-distance transportation ofpassengers andluggage bymotor transport;
transportation ofpassengers andluggage bymotor transport ininternational lines; international
transportation ofcargo andpassengers byrailway transport according tointernational agreements;
transportation ofcargo andpassengers bydomestic railway; shipservices inports; andrents(maximum
level). TheStatedidnotcontrol theprices ofimported goods. However, theprofit margin wasregulated
withrespect topharmaceutical products; thefinalprice could notexceed theimport orproduction
price bymore than20percent. Thegoods andservices subject toStateprice controls inLatvia are
listed inTable 21.Therepresentative ofLatvia stated thattheprices ofgoods andservices inevery
sector ofLatvia weredetermined freely bymarket forces withtheexception ofthose noted inTable 2
andthatprice control andregulation wascarried outaccording toparticular laws, allofwhich were
published intheofficial journal oftheRepublic ofLatvia "Latvijas Vèstnesis". Price controls were
carried outinaccordance withseparate lawspassed byLatvia 'sParliament (Saeima) andprice levels
weredetermined bytherespective bodies authorized bylaw.Further pricecontrols could beintroduced
inorder toprotect consumers.
Table 21Goods andServices Subject toState Price Controls
Classification (Harmonized
System orCommon Products
Classification)Product orSector
HS2711 11 Natural gas(tothepopulation);
HS2716 00 Electrical power;
HS2716 00 Heating energy;
CPC ex91131 Theforestry sector (stumpage fees);
CPC ex88442 Publishing ofschool books financed from theState budget;
HS3002; 3004; 3005; 3006 Pharmaceuticals;
CPC 7511 Postal services;
CPC 74510; 74520; 74530;
74540Portservices;
CPC 74610; 74620 Airport services;
CPC 96312 Archives;WT/ACC/SPEC/LVA/3/Rev.1
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Classification (Harmonized
System orCommon Products
Classification)Product orSector
CPC 82101; 82102 Housing rents andresidential services;
Minimum andmaximum prices arestipulated forthefollowing domestic
andimported services:
CPC 71310 Transit services foroilandoilproducts bypipeline;
CPC 74190 Reloading ofoilandoilproducts inports;
CPC 71122 Transit shipment ofoilandoilproducts byrailway transport;
CPC ex71211 Long-distance transportation ofpassengers andluggage by
motor transport;
CPC ex71211 Transportation ofpassengers andluggage bymotor transport
ininternational lines;
CPC 7111; 7112 International transportation ofcargo andpassengers byrailway
transport according tointernational agreements;
CPC 7111; 7112 Transportation ofcargo andpassengers bydomestic railway;
CPC 72140; 72130 Shipservices inports andrents (maximum level).
20. Therepresentative ofLatvia stated thattheprices ofgoods andservices inevery sector ofLatvia
weredetermined freely bymarket forces withtheexception ofthosenoted inTable 1.Iintheapplication
ofpricecontrols noworinthefuture, Latvia would apply suchmeasures inaWTO-consistent fashion,
andtakeaccount oftheinterests ofexporting WTO Members asprovided forinArticle III.9ofthe
GATT 1994. Latvia would publish thelistofgoods andservices subject toState controls andany
thatareintroduced orre-introduced inthefuture initsOfficial Journal. TheWorking Party tooknote
ofthese commitments.
Competition Policy
21. Some members oftheWorking Party noted thatLatvia intended toharmonize itslegislation
oncompetition withthatoftheEuropean Communities overafour-year period. Latvia wasasked
toprovide information onthepresent status ofdraftlegislation, outline existing provisions regarding
mergers andtoprovide alistofsectors considered "natural monopolies".
22. TherepresentativeofLatviarepliedthattheLaw"OnCompetitionandRestrictionofMonopoly"
of1991 would berevised. InJune1997, theSaeima (Parliament) hadadopted anewCompetition
Lawwhich would enterintoeffect on1January 1998. ThenewLawprohibited restrictive arrangements
andabuse ofdominant position andcontained provisions onmerger control andprohibition ofunfair
competition. TheLawprovided fortheCabinet ofMinisters toestablish aCompetition Council to
supervise implementation oftheLaw. TheCompetition Council would beempowered toascertainWT/ACC/SPEC/LVA/3/Rev.1
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violations oftheCompetition Lawandenterprises would bebound byitsdecisions. TheCouncil would
alsobeauthorized tosetpenalties. Anenterprise gaining control ofmorethan25percentoftheLatvian
market forgroups ofgoods orservices asaresult ofamerger ortheformation ofapartnership would
needtonotify theInstitution fortheControl ofMonopoly Action andDevelopment ofCompetition.
ThenewCompetition Lawstipulated thatnotifications would needtobemade ifthecombined turnover
oftheentity resulting fromthemerger amounted toatleast25million Latsinthefinancial yearpreceding
themerger, andatleastoneofthemerger participants heldadominant position intherelevant market
priortothemerger. Nosystem hadbeenestablished tomonitor take-overs andmergers, buttheAnti-
Monopoly Committee cooperated closely withtheCompany Register oftheRepublic ofLatvia and
couldinterceptregistrationsresultingfrommergersortake-overs.Naturalmonopoliesexistedinenergy,
communication services, transport, water supply andsewerage. Monopoly enterprises included the
Statestock companies "Latvijas gâze" (Latvian Gas), "Latvenergo" and"Latvijas dzelzceî ø"(Latvian
Railways); "Lattelekom" -alimited liability company; suppliers ofheating; andself-government
enterprises inwater-supply andsewerage. However, competition (including foreign participation) was
present inthesupply ofnatural gasandinenergy andtelecommunication sub-sectors.
FRAMEWORK FOR MAKING AND ENFORCING POLICIES
23. Amember asked thatLatvia indicate which bodies wereresponsible fortheadministration of
trade policies andindicate thatsub-central governments didnotmake policies affecting international
trade.
24. Therepresentative ofLatvia replied thatthelegislative body oftheRepublic ofLatvia was
theSaeima (Parliament), theconstitutional basisofwhich wasprovided insection 2oftheSatversme
(Constitution). Theregulation ofinternal proceedings oftheSaeima wascontained intheRules of
Procedure. TheSatversme stated thattheSaeima wasthehighest legislative bodyanditpossessed the
discretionary power. TheSaeima wasthehighest body ofState power, and,according tosection 5
oftheSatversme, itpossessed therighttoadopt lawsandstatements withthehighest legalforce after
theSatversme. Thisprerogative included adoption oflawsrelated totradeandmonopolies andguidelines
forthetrade policy oftheRepublic ofLatvia. Inthisfield, thepowers oftheSaeima werenotlimited
totheextent thattheywere compatible withtheSatversme.WT/ACC/SPEC/LVA/3/Rev.1
Page13
25. Executive power inLatvia wasgiven totheCabinet ofMinisters. Thegeneral principles of
thefunctioning oftheCabinet werecontained insection 4oftheSatversme. TheCabinet would discuss
alldraftlawsdrawn upbyMinistries andallquestions concerning thecompetence ofvarious Ministries,
thenumber andthefunctions ofwhich werestated according tospecial rules. Thefunctioning ofthe
Cabinet ofMinisters wasregulated bytheLaw"OntheComposition oftheCabinet ofMinisters" of
15July1993 (asamended on23May1996), Regulation No.5oftheCabinet ofMinisters andby
special by-laws orgoverning regulations ofeachMinistry, always approved byarelevant Regulation
oftheCabinet ofMinisters. TheCabinet ofMinisters wasformed byaperson entrusted tothattask
bythePresident ofState. Inorder tofulfil theirduties, thePrime Minister andtheMinisters hadto
receive avoteofconfidence bytheSaeima. TheSaeima expressed avoteofconfidence bymeans of
special resolution afterthereport ofthePrime Minister onthecomposition andtheplanned activities
oftheCabinet incaseofapproval. Theimportant point wasthat,according toRegulation No.160
"OntheInternal Order andtheFunctioning oftheCabinet ofMinisters" of1June1996, every draft
regulation orstatement submitted totheState Chancellery forapproval bytheCabinet ofMinisters
would receive legal opinions from interested Ministries andother institutions toensure thatdraft
legislation would becompatible withthelawsinforce andinternational treaties andconventions signed
andratified bytheRepublic ofLatvia. ThetaskoftheStateChancellery wastoverify whether adraft
wascompatible withtheDeclaration oftherelevant Cabinet ofMinisters where theprincipal guidelines
ofitsactivities were mentioned. TheDeclaration wasbinding ontheCabinet.
26. Cabinet decisions were presented intheform ofregulations, instructions, orders or
recommendations.TheCabinetcouldissueregulationswhen:(i)alawspecificallyauthorizedtheCabinet
toissue regulations. Such authorization would needtoprovide details ofthemain rules andoutline
thecontent oftheregulations; (ii)arelevant issuewasnotregulated byalaw;and(iii)inaccordance
withtheArticle 81oftheSatversme, ifthere wasanurgent necessity between sessions oftheSaeima,
theCabinet wasentitled toissue regulations having theforce oflaw.However, Article 81stated that
suchregulations could notmodify lawsconcerning theprocedure andthejudicial issues andthe
Constitution, thebudget, lawsalready passed bytheSaeima inpower, taxes, customs, issuance of
Treasury notes, etc.
27. Therights ofthejudiciary power werestated bytheLaw"OntheJudicial Power", bytheCodes
ofCivilandCriminal Procedure, bytheCivilCode andbyspecial lawsonvarious judicial institutions
"OntheBar", "OnthePublic Prosecutor Service", etc.International tradeandmonopoly issues wereWT/ACC/SPEC/LVA/3/Rev.1
Page14
qualified bythejudicial institutions asother similar cases. Thejudiciary institutions hadtherightto
settle disputes arising fromquestions ofinternational trade andmonopoly inaccordance withthelaws
andregulations inforce intheRepublic ofLatvia. Thesystem ofCourts ofJustice hadthree levels.
Thefirstinstance wastheDistrict Court orCityCourt, theinstance ofappeal wastheRegional Court,
andtheinstance forcausation wastheSupreme Court. Theveryimportant point wasthat,specially
concerning questions ofinternational commercial relations, settlement ofdisputes could bereached
bymeans ofthearbitral arbiter court.
28. TheMinistry ofEconomy wasthecompetent institution fortheadministration oftradepolicies
according toArticle 4.3ofRegulation No.47oftheCabinet ofMinisters "The Governing Regulations
oftheMinistryofEconomy"(of7March1995).TheMinistryofEconomyformulatedandimplemented
thegeneral principles ofthedomestic andforeign trade policy oftheState. Trade-related powers of
local andmunicipal governments were defined inArticles 14,15and21oftheLaw"OnLocal
Governments" andconcerned theintroduction oflocal taxes andissuance ofactivity licences when
suchactivities weresubject tolicensing bylocalandmunicipal governments under therespective Laws.
TheLaw"OnTaxes andDuties" (Article 12)provided alistofduties which could bedetermined by
local governments, andtheLaw "On Entrepreneurial Activity" andRegulation No.434of
19November1996stipulatedthatlocalandmunicipalgovernmentsissuedactivitylicencesforpre-school
educational institutions, shooting galleries, cremation activities andlocaltransportation ofpassengers.
29. Therepresentative ofLatvia confirmed stated thatsub-central administrative authorities, e.g.
localadministrative bodies, havenojurisdiction orauthority toestablish regulations ortaxes ongoods
andservices inLatvia independent ofthecentral authorities andthatapplication ofthese measures are
exclusively theresponsibilities oftheexecutive andlegislative branches ofthecentral government.
Central authorities willeliminate ornullify measures taken bysub-central authorities inLatvia that
conflict withWTO provisions fromthedateofaccession governments werenotentitled toestablish
polieies affecting international trade under thelegal rules regulating theirfunctions. TheWorking
Party tooknoteofthiscommitment assurance.WT/ACC/SPEC/LVA/3/Rev.1
Page15
POLICIES AFFECTING TRADE INGOODS
Trading Rights
30. Amember asked Latvia toconfirm theabolition oftheState-trading monopoly andthatno
restrictions existed ontherightofforeign anddomestic individuals andenterprises toimport andexport
goods andservices within Latvia 'scustoms territory, except asprovided forinWTO Agreements.
Latvia should alsoconfirm thatindividuals andfirms werenotrestricted intheirability toimport or
export based ontheirregistered scope ofbusiness andthatthecriteria fortheregistration ofcompanies
inLatvia were generally applicable andpublished intheofficial journal.
31. Therepresentative ofLatvia replied thatinaccordance withtheLaw"OnEntrepreneurship",
enterprises andentrepreneurships should beregistered inEnterprise Register oftheRepublic ofLatvia.
Therequirement toregister concerned entrepreneurial associations andenterprises, including branches
andrepresentation offices performing entrepreneurial activity ontheterritory oftheRepublic ofLatvia.
Allregistered entrepreneurs, i.e.enterprises andentrepreneurial associations, carried outtheiractivities
under equal rights. Anyactivity ofunregistered entrepreneurial associations andenterprises was
prohibited. Theregistration procedure andtheinformation tobesubmitted wasregulated bytheLaw
"OnEnterprise Register". Foreigners could alsocarry outentrepreneurship inaccordance withthe
Law"OnForeign Investment inRepublic ofLatvia". Inaccordance withtheLaw"OnEntrepreneurship"
andtheRules oftheCabinet ofMinisters "Onrestriction ofentrepreneurship", onlyStateenterprises
hadtherighttoproduce andpress securities, banknotes, coins, stamps andcards ofgambling games.
Forother kinds ofentrepreneurship restrictions wereprescribed bytheissuing oflicence orcertificate.
Thekinds ofentrepreneurship requiring certificate orlicence werelisted intheabove-mentioned Rules
oftheCabinet ofMinisters. Theactivity licensing system isdiscussed infurther detail inparagraphs 49
to5150to56.
32. Therepresentative ofLatvia confirmed thattheformer State monopoly inforeign trade had
beenabolished andthatnorestrictions existed ontheright offoreign anddomestic individuals and
enterprises toimport andexport goods andservices within intoLatvia 'scustoms territory, except as
provided inWTO Agreements. Heconfirmed thatindividuals andfirms werenotrestricted intheir
ability toimport orexport based ontheirregistered scope ofbusiness andthecriteria forenrolment
intheRegister ofEnterprises inLatvia weregenerally applicable andpublished intheofficial journal
oftheRepublic ofLatvia "Latvijas Vèstnesis". TheWorking Party tooknoteofthese commitments.WT/ACC/SPEC/LVA/3/Rev.1
Page16
(Market Access Negotiations
Paragraph 33ofdocument WT/ACC/SPEC/LVA/3 hasbeenredrafted andmoved to"Customs Tariff")
Market Access Negotiations
33. Therepresentative ofLatvia announced hisGovernment 'sreadiness toenter intobilateral
negotiations onmarket access forgoods andservices inMarch 1995(document WT/L/57) andpresented
aninitial offerongoods (WT/L/57/Add.1) together withsupporting dataonimports (WT/L/57/Add.2).
Anumber ofmembers entered intomarket access negotiations withLatvia. Theconcessions and
commitments onimported andexported goods agreed between Latvia andmembers oftheWorking
Party areannexed totheProtocol ofAccession ofLatvia which isreproduced intheAppendix tothis
Report. Asindicated intheconclusions ofthisReport, theWorking Party tooknoteofthemarket
access commitments ofLatvia.
1. Import Regulation
Customs Tariff
33. Amember oftheWorking Party noted thatthecollection ofcustoms duties appeared tohave
beeninefficient inLatvia andwondered whatplans Latvia might haveforimproving itscustoms system
aspartoftheaccession totheWTO. Therepresentative ofLatvia replied thatorganizational
improvements hadbeendiscussed withtheWorld Customs Organization andincluded therevision of
legislation, thereview ofthestructure andfunctions ofthecustoms administration, further training
ofcustoms staffandadditional technical equipment. Theorganizational improvements ofthecustoms
system would befinalized by1July1997 withtheentry intoforce ofthenewCustoms Law.
34. Therepresentative ofLatvia announced hisGovernment 'sreadiness toenterintobilateral tariff
negotiations inMarch 1995 (document WT/L/57). Thetariff concessions resulting from these
negotiations areincluded initsSchedule ofConcessions andCommitments onGoods annexed tothe
draft Protocol ofAccession ofLatvia which isreproduced intheAppendix tothisReport (see
paragraph 128below). [TheWorking Party noted thatthisschedule alsocontains concessions on"other
duties andcharges".]WT/ACC/SPEC/LVA/3/Rev.1
Page17
Customs Duties
35. Some members oftheWorking Party requested Latvia todescribe thelegal basis forthe
imposition ofcustoms duties, submit acopyofitsCustoms Tariff, identify products attracting duties
ofmore than20percent, listproducts subject tospecific duties (andtheestimated advalorem
equivalent), outline plans toconvert specific duties intoadvalorem rates, andprovide estimates of
trade-weighted average duties onagricultural andindustrial products.
35. Therepresentative ofLatvia saidthattheLaw"OnCustoms Duties (Tariffs)" hadbeeninforce
since 1December 1994. Duties were generally setat15to20percent. Minimal duties (0.5or
1percent)werelevied ongoods withnodomestic production andhigher duties applied forsensitive
agricultural commodities. Latvia listed products withm.f.n. duties exceeding 20percent(WT/L/49,
pp.27-28) andproducts subject tospecific duties andtheadvalorem equivalents (WT/ACC/LVA/12).
Latvia hadnospecific timetable fortheconversion ofspecific duties toadvalorem rates. Thesimple
average duties amounted to5.69percent; 13percentforagricultural products and3.74percentfor
industrial goods.
[Other Duties andCharges
36. Amember oftheWorking Party asked Latvia toclarify thesituation concerning anyother
duties andcharges related toimportation.
37. Therepresentative ofLatvia confirmed thatLatvia levied noduties andcharges onimports
other thanordinary customs duties. Anysuchcharges applied toimports afteraccession would be
inaccordance withWTO provisions. Hefurther confirmed thatLatvia would notlistanyother charges
initsGoods Market Accession Schedule under Article II:1(b) oftheGATT 1994, binding suchcharges
at"zero". Latvia would ensure thatanyfeesandcharges forservices rendered introduced inthefuture
would onlybeapplied inconformity withtherelevant obligations ofGATT 1994. TheWorking Party
tooknoteofthiscommitment.]WT/ACC/SPEC/LVA/3/Rev.1
Page18
Tariff RateQuotas, Tariff Exemptions
38. Some members oftheWorking Party noted thatLatvian legislation authorized theopening
oftariffquotas tofacilitate importation ofgoods intemporary shortsupply andrequested further details.
Amember urged Latvia tobring thissystem intoconformity withWTO provisions andtoconsider
using tariff protection onlyandallow market forces todetermine trade.
39. Therepresentative ofLatvia saidthatthelegalbasis fortheopening oftariff quotas onany
itemwastheLaw"OnCustoms Duties (Tariffs)" andRegulations No.208"Establishment and
Administration ofImport andExport Tariff Quotas" andNo.24"Authorizations forLicences".
Exceptionally, theCabinet ofMinisters hadapproved atariff quota forimports ofhigh-quality seeds
inApril 1995 and1996 duetoashortage ofdomestic supply. TheState Cereals Bureau could open
tariff quotas withanin-quota tariff of0.5percentwhen itsannual forecasts indicated ashortfall in
Latvian production ofcertain types ofgrain. TheCabinet ofMinisters hadissued Regulation No.85
"OnCustoms Tariff Quotas forGrains" stipulating that20,000 tonnes ofryeand50,000 tonnes of
feedgrain could beimported at0.5percenttariff until1June1997. Thetariff quotas hadbeen
distributed bypublic tender organized bytheStateCereals Bureau withimport licences issued bythe
Ministry ofAgriculture.
40. Therepresentative ofLatvia agreed thatthetariff quota regime forgrain imports wasnot
consistent withWTO requirements andLatvia wasrevising itslegislation toensure conformity with
theAgreement onImport Licensing Procedures. Regulations Nos.208and24hadbeenrevoked and
replaced byRegulation No.106"OnCustoms Tariff Quotas", issued inaccordance withtheLaw"On
International Agreements oftheRepublic ofLatvia", effective 2530March 1997. TheLaw"On
Customs Duties (Tariffs)" would beamended toabolish thetariff-rate quota system. Theamendments,
whichwouldremovequantitativerestrictionsassociatedwithlicensingproceduresandallowforautomatic
licensing inaccordance withtheAgreement onImport Licensing Procedures, hadbeenpresented to
theSaeima, which wasexpected toapprove thechanges intimefornewprocedures tocome intoeffect
on1July1997. Therepresentative ofLatvia saidthatinJune1997theSaeima (Parliament) hadadopted
amendments totheLaw"OnLatvia 'sGrain Market andState Grain Reserves" according towhich
quantitative restrictions ongrain wereabolished andthelicensing system replaced byautomatic import
licensing. TheSaeima hadalsoadopted amendments totheLaw"OnCustoms Duties (Tariffs)" in
June1997, abolishing theorder enabling theCabinet ofMinisters toestablish tariffquotas. RegulationWT/ACC/SPEC/LVA/3/Rev.1
Page19
No.106"OnCustoms Tariff Quotas" of25March 1997determined theprocedure forimplementing
tariff quotas, established inaccordance withinternational treaties, ontheterritory oftheRepublic of
Latvia aswellastheprocedure forissuing special permits (licences) ensuring theadministration of
tariff quotas. Tariff quotas established inaccordance withinternational treaties provided forlimited
amounts ofgoods imported under reduced orzerotariff rate. Thefulfilment ornon-fulfilment of
preferential tariff quotas didnotrestrict imports from MFN trading partners attheMFN tariff rate.
Therepresentative ofLatvia confirmed thatintheevent thatLatvia useMFN tariffquotas inthefuture,
imports under preferential arrangements would notbecounted against MFN tariff ratequotas.
FeesandCharges forServices Rendered
41. Amember oftheWorking Party asked Latvia toclarify whatfeesandcharges, ifany,were
applied forservices rendered related toimportation. Therepresentative ofLatvia confirmed thatLatvia
levied nofeesorcharges forservices rendered related toimportation.
42. Therepresentative ofLatvia saidconfirmed thatLatvia levied nofeesorcharges forservices
rendered related toimportation andconfirmed thatanyfeesorcharges levied inthefuture onorin
connection withimports would beimposed inconformity withArticle VIIIoftheGATT 1994. The
Working Party tooknoteofthiscommitment.
Application ofInternal Taxes
43. Some members oftheWorking Party asked fordetails ontheexcise taxsystem inLatvia and
itsapplication onimports anddomestic goods. Latvia wasrequested toindicate, byHStariff line,
thelevels andpoints ofsaleatwhich taxes were applied toimports anddescribe thecomponents of
thetaxable base.
44. Inreply, therepresentative ofLatvia saidthatexcise taxes werelevied onalcohol, tobacco,
motorvehicles,petroleumproductsandjewellery.Taxrateswereidenticalforimportedanddomestically
produced items. ThetaxbaseforLatvian products wasthesalesprice indomestic currency, taxes
onimports were levied onatariff-inclusive basis. Theratesofexcise taxwere thefollowing:WT/ACC/SPEC/LVA/3/Rev.1
Page20
Table 3Rates ofExcise Tax
Product
ClassificationDescription Taxrate
HS2207 Rectified ethyl alcohol of200100-proof
alcoholLVL 3.50 4.00 perlitre
HS2204, 2205,
2206Champagne andallother types ofwine
(upto14degrees)LVL 0.25 perlitre
Other alcoholic beverages, beerover7
degreesLVL 3.50 4.00 perlitrepure alcohol
HS2203,2204,
2205, 2206, 2208Beer 5.5-7degrees perhectolitre LVL 4.00 perhectolitre
HS2402 20 Cigarettes, withfilter LVL 0.0035 perpiece
HS2402 Cigarettes, without filter LVL 0.05 perpiece
HS2402 Cigars andcigarillos LVL 0.01 perpiece
HS2403 Other tobacco products forretail sale 100percent
HS2709, 2710,
3811, 3814Unleaded petrol, from 1June 1996 LVL 0.10 perlitre
" 1January 1997 LVL 0.12 perlitre
" 1January 1998 LVL 0.14 perlitre
" 1January 1999 LVL 0.16 perlitre
" 1January 2000 LVL 0.18 perlitre
" 1January 2001 LVL 0.20 perlitre
HS2710, 3811 Leaded petrol, from 1June 1996 LVL 0.10 perlitre
" 1January 1997 LVL 0.13 perlitre
" 1January 1998 LVL 0.16 perlitre
" 1January 1999 LVL 0.19 perlitre
" 1January 2000 LVL 0.21 perlitre
" 1January 2001 LVL 0.23 perlitre
HS2710 Gasoline, from 1January 1997 LVL 0.02 0.08 perlitre
" 1January 1998 LVL 0.04 0.10 perlitre
" 1January 1999 LVL 0.10 0.13 perlitre
" 1January 2000 LVL 0.16 perlitre
" 1January 2001 LVL 0.17 perlitre
HS2710 Heavy oil,from 1January 1998 LVL 2.00 per1000kg
" 1January 1999 LVL 4.00 per1000kg
" 1January 2000 LVL 8.00 per1000kg
" 1January 2001 LVL 10.00 per1000kgWT/ACC/SPEC/LVA/3/Rev.1
Page21
Product
ClassificationDescription Taxrate
HS2710 Kerosene, from 1July1997 LVL 0.08 perlitre
" 1January 1998 LVL 0.10 perlitre
" 1January 1999 LVL 0.13 perlitre
" 1January 2000 LVL 0.16 perlitre
" 1January 2001 LVL 0.17 perlitre
HS8703 Motor cars 10percent
Chapter 71,
excluding No.
7117Goods made from goldandother
precious metals, jewellery including
diamonds, precious orsemi-precious
stones30percent
Only tobacco products carrying taxlabels could besoldinLatvia. Enterprises licensed toimport or
manufacture tobacco products forsaleordered labels fromtheStateRevenue Service. Therequested
quantity oflabels would besupplied within 14daysagainst payment ofexcise taxandVAT. Thelabels
themselves were notsubject toanyseparate charge asthecostofissuing taxlabels wasincluded in
therateofexcise tax. Exports, re-exports andgoods intransit were exempt from excise taxin
accordance withArticle 4oftheLaw"OnExcise Tax". Exemptions fromexcise taxes hadalsobeen
established foranumber ofproducts, enumerated inTable 42.
Table 4Exemptions from Excise Tax
Excise taxshall notbelevied onthefollowing:
Precious metals, precious stones andproducts from saidmetals andstones imported andpurchased for
theneeds ofthePrecious Metal Fund oftheRepublic ofLatvia;
Goods used forproduction (technological needs) ofgoods listed inArticle 3;
Rectified alcohol:
(i) forthepurposes ofmedicine andveterinary medicine;
(ii) fortheneeds ofresearch anddevelopment;
(iii) forpharmaceutical industry.
Tobacco dustandtobacco products used forproduction ofinsecticides;
Precious metals formaking dentures;
Goods forexport;
Cars withspark-ignition internal combustion reciprocating engine, working volume ofengine cylinders of
which does notexceed 1,600 cm3;
Cars withcompression ignition internal combustion reciprocating engine (diesels orsemi-diesels),
working volume ofengine cylinders ofwhich does notexceed 1900 cm3;
Cars older than7years from thedateofindustrial production;
Cars withelectrical engine (electrocars).
TheCabinet maydetermine themaximum amount ofgoods thatareexcise tax-exempt when imported for
consumption intothecustoms territory oftheRepublic ofLatvia.
Excise taxshall notbelevied ontransit cargo shipping andreexport.WT/ACC/SPEC/LVA/3/Rev.1
Page22
Excise taxshall notbelevied onthefollowing:
Excise taxshall notbelevied onnatural persons importing alcoholic drinks uptoonelitreoroneunitin
original packaging thatdoes notexceed 3litres intotal amount, aswellascigarettes -upto200
cigarettes perperson.
Excise taxshall notbelevied onnatural andlegal persons selling carsifexcise taxfortherespective car
hasalready been paidonce.
Ifanenterprise (entrepreneurial company) exports self-produced orunused goods forwhich rawmaterial
excise taxhasbeen paid, theexcise taxtransferred intothebudget shall bereimbursed from theState
budget.
Theexcise taxpaidforcarsexported from theRepublic ofLatvia within three months after their import
shall bereimbursed from theState budget.
45. Noting thataValue Added Tax(VAT) would replace theturnover taxinLatvia, some members
oftheWorking Party requested information ontheapplication oftheVAT, including product- oruser-
specific exemptions. Therepresentative ofLatvia replied thatVAT hadreplaced theturnover taxon
1May1995. VAT waslevied attherateof18percent. VAT waslevied onatariff-inclusive basis
andexcise taxes were added tothetaxbaseofimported anddomestic products. Exemptions from
VAT were determined inaccordance withArticles 6and7oftheLaw"OntheValue Added Tax".
Inall,26types ofgoods andservices wereexempt fromVAT while nineservices related toexporting
andinternational transport were zero-rated (Annex 1Table 3).
46. Inresponse tospecific questions bysome members oftheWorking Party inpursuance of
Article IIIoftheGATT 1994 regarding VAT exemptions forbooks andmass-media items published
or(inthecaseofmass media) registered inLatvia, heassured theWorking Party thattheexemption
wasalsoapplicable toimported films. Headded thattheMinistry ofFinance wasdrafting amendments
totheLaw"OntheValue Added Tax" thatwould provide equal regulations andthusequal treatment
fordomestic andimported massmedia. Therepresentative ofLatvia stated thattheVAT exemptions
offered onpublications andmass media would berevoked from 1January 1998 andthatnational
treatment would beapplied bothfordomestic andforeign publications andmass media.
(Table 3:Goods andServices Exempt fromVATorZero-rated hasbeenmoved toAnnex 1)
47. TherepresentativeofLatviastatedthat,fromthedateofaccession,Latviawillapplyitsdomestic
taxes, including those onproducts listed inparagraphs 44to46andTable 4Tables 2and3instrict
compliance withArticle IIIoftheGATT 1994, inanon-discriminatory manner toimports regardless
ofcountry oforigin andtodomestically-produced goods. TheWorking Party tooknoteofthis
commitment.WT/ACC/SPEC/LVA/3/Rev.1
Page23
Quantitative Import Restrictions, including Prohibitions, Quotas andLicensing Systems
48. Some members oftheWorking Party asked Latvia tospecify thebusiness activities subject
tolicensing. Latvia wasrequested tosupply information inaccordance withthequestionnaire onimport
licensing andspecifically asked toprovide acomprehensive list,byHStariffline,ofproducts subject
tonon-tariff measures, citing themeasure applied (prior import approval requirements, mandatory
import licences, import quotas, prohibitions, etc.), itslegal basis, anditsjustification under WTO
provisions. Further questions addressed specific issues suchasquantitative restrictions onimports
ofsugar andimport arrangements affecting grain, ethyl alcohol andspirits, andtobacco. Concerned
about potential barriers totrade, some members asked Latvia toelaborate onhowitslicensing system
-which restricted imports ofcertain goods certain aspects ofbusiness -worked andsought aclear
commitmentfromLatviathatallmeasuresappliedtoenforcequantitativerestrictionswouldbeeliminated
asofthedateofaccession.
49. Therepresentative ofLatvia saidthatcertain forms ofentrepreneurial activity required aspecial
permit (licence). Limitations onentrepreneurial activity applied when suchlimitations weresetforth
ininternational treaties, conventions oranyother norms ofinternational lawwhich werebinding to
Latvia, orwhen deemed necessary byLatvia fortheprotection oftheinterests ofsociety, i.e.the
protection ofpublic morals, human, animal andplantlife,andhealth orpublic security. public security
orhealth. Thefollowing restrictions onentrepreneurial activity hadbeendetermined inaccordance
withArticle 32oftheLaw"OnEntrepreneurial Activity":
(i) restrictions laiddown bytheStateGovernment orlocalgovernment laworregulations issued
bytheCabinet ofMinisters aiming atprotecting essential Statesecurity interests securing of
State interests;
(ii) restrictions effected within thecompetence determined bylocalgovernment law;
(iii) restrictions onindividuals carrying outanyformofentrepreneurial activity orintellectual work
requiring special qualifications concerning special knowledge andtesting ofit,asdetermined
byspecial lawsorregulations issued bytheCabinet ofMinisters; and
(iv) restrictions determined bytheBank ofLatvia concerning financial andcredit operations and
banking activity.WT/ACC/SPEC/LVA/3/Rev.1
Page24
Therestrictionsonentrepreneurialactivitywereenforcedthroughspecialpermits(licences)orcertificates
ofprofessionalqualificationissuedbytheCabinetofMinisters,MinistriesorStateinstitutionssubordinate
toandsupervised byMinistries inaccordance withstatutory Acts; theauthorized representative of
theStrategic Importance Export andImport Control Board; localgovernments (municipal authorities
ofcities, towns, pagasts andcitydistricts); professional associations; ortheBank ofLatvia. The
maximum validity ofaspecial permit (licence) wasfiveyears, theminimum validity oneyear. The
special permit (licence) could alsobeissued foranindividual transaction. Licence feespayable to
theState weredetermined bythelaworregulations issued bytheCabinet ofMinisters. Permission
(licence) orcertificate feeswould beestablished bytheissuing authority inaccordance withruleslaid
down bytheCabinet ofMinisters. TheStatereserved therighttomake certain types ofentrepreneurial
activity connected withsecurity oftheState anditscitizens subject toState monopoly.
50. Therepresentative ofLatvia saidthatanydisputes arising fromtheapplication ofrestrictions
onentrepreneurial activity, suchasrefusals toissueaspecial permit (licence) orcancellations, would
besettled byahigher institution oraCourt ofJustice. Adecision toreject anapplication toperform
anentrepreneurial activity would needtobeissued within 30daysupon receipt bytheresponsible
authority; thistimelimitwould bereduced to10daysasfromSeptember 1997. Anissuing authority
wasentitled tocancel aspecial permit (licence) issued onthebasisoffalseinformation, oriftherecipient
violated anynormative actsorconditions specified inthespecial permit (licence). Therecipient of
aspecial permit (licence) wasresponsible foritsproper useandwasnotentitled toassign ittoany
other person.
51. Therepresentative ofLatvia saidthatthescope ofthelicensing system hadbeen reduced
gradually; in1996 ithadcovered 47business activities. Latvia continued toreduce thenumber of
businessactivitieslicensedaccordingtoRegulations"OnLicensingofSeparateFormsofEntrepreneurial
Activity". TheGovernment wasreviewing thelicensing system andintended toelaborate special
regulationsonimportlicensinginaccordancewiththeWTOAgreementonImportLicensingProcedures.
Thenewregulations would beadopted bySeptember 1997. These regulations would provide for
automatic licensing withnolimitation onthenumber oflicences granted. Import licences would not
beusedtorestrict tradeandrequirements would beapplied inanon-discriminatory manner. Animport
licence should beissued within 10days, application forms should beassimple aspossible, andthe
licence feewould constitute thecostofservices rendered.WT/ACC/SPEC/LVA/3/Rev.1
Page25
52. InTable 54,therepresentative ofLatvia provided theinformation onnon-tariff measures
affecting imports andthelegal basis forthese measures, which issummarized. Heconfirmed that
animport banonwhite sugar hadbeeninforce since May1993, buttheprohibition didnotapply
torawsugar. Import licences wereissued onanon-discriminatory basisregarding thecountry oforigin;
sugarhadbeenimportedfromDenmark,Estonia,Germany,Lithuania,UkraineandtheUnitedKingdom.
Hestated thatimport restrictions onsugar hadbeenmaintained toprotect localmanufacturers while
theindustry wasrestructured. Heagreed thattheexisting regime didnotcorrespond totheWTO
Agriculture Agreement andLatvia wasready toprepare adoption ofthenecessary legalamendments
tobring thesugar regime inlinewithWTO requirements. Latvia wasready toeliminate theimport
banonwhite sugar andtherestrictive import licensing onother sugar products bythetimeofits
accession totheWTO.
Table 54Products Subject toNon-Tariff Measures (Import Licensing)
HStariff line Description Legal basis
Chapter 10 Cereals Law"OntheLatvian grain market and
State grain reserves" (Article 4)
Chapter 11 Products ofthemilling industry Law"OntheLatvian grain market and
State grain reserves" (Article 4)
Chapter 12 Oilbased plane seeds andoleaginous
fruit, various grain, seeds andfruit,
straw andfodder.Law"OntheLatvian grain market and
State grain reserves" (Article 4)
Chapter 1701 Cane orbeetsugar andchemically
puresucroseLaw"OnEntrepreneurial Activity"
(Article 32), Law"OnSugar", and
Regulation No.61
Chapter 22 Alcoholic beverages, spirits and
vinegarLaw"OnEntrepreneurial Activity" and
Regulation No.37of25January 1994
Chapter 23
except 2301, 2303
and2307.Residues andwaste from thefood
industries; prepared animal foddersLaw"OntheLatvian Grain Market and
State Grain Reserves" (Article 4)
Chapter 24 Tobacco products Law"OnEntrepreneurial Activity"
(Article 32)andRegulation No.86of14
April 1994
53. Therepresentative ofLatvia saidthatquantitative restrictions concerned onlyHSproduct groups
1001to1004and1701. Licensing ofother products wasmaintained forstatistical purposes onlyand
wasautomatic. TheState Cereal Bureau prepared anannual balance sheet ofgrain production and
consumption fortheGovernment. Tendering procedures forimport licences wererequired onlyfor
wheat. Public tenders would beorganized when theproposed imported quantity exceeded 1,000 tons.
Actual import volumes occasionally fellshort ofapproved quantities asimporters wereunable touseWT/ACC/SPEC/LVA/3/Rev.1
Page26
theirentitlements duetounforeseen problems. Therepresentative ofLatvia saidthatquantitative
restrictions ongrain hadbeenabolished bytheamendments totheLaw"OnLatvia 'sGrain Market
andStateGrain Reserves" adopted bytheSaeima (Parliament) inJune1997. Quantitative restrictions
onsugar were abolished byamendments totheLaw "OnSugar" (adopted bytheSaeima in
November1996)andRegulationsNo.61,adoptedbytheCabinetofMinistersinMarch1997.Licensing
forallproducts would beautomatic according totheWTO Agreement onImport Licensing.
54. Therepresentative ofLatvia noted thattheAlcohol Monopoly Department oftheMinistry of
Finance keptalistofofficially approved importers ofalcoholic beverages andintended tobegin regular
publication ofthelist.Thenumber oflicensed importers andtraders wasnotcontrolled orlimited
byanyother administrative means. Thelicensing system wasmaintained forreasons ofhealth and
social policy (toreduce illegal production andimportation); these objectives could notbeattained
byother measures. Imported anddomestic products were subject tothesame requirements. The
representative ofLatvia provided additional information onthelicensing regime inaQuestionnaire
onImport Licensing ofAlcoholic Beverages andTobacco (document WT/ACC/LVA/27).
55. Amember understood thatLatvia hadmade tobacco products subject toactivity licensing to
control theinternal market andimport licensing toenforce thecollection ofexcise taxes. Thismember
wasconcerned thatcontrols ontheinternal market operated asabarrier totradeandtheuseoflicensing
toassure collection ofexcise taxeswasanunnecessary border aberration. Therepresentative ofLatvia
replied thattheimport licensing served statistical purposes only; thecollection ofexcise taxesontobacco
products andother items wasregulated bytheLaw"OntheExcise Tax". Entrepreneurial activity
related totobacco goods waslicensed toprotect thelegaldomestic market against illegal production
andprotect consumers 'interests against low-quality ordangerous products. Headded thatlicensing
ofentrepreneurial activities wasnotamechanism fordirect market control, butthatthelegaldomestic
market required regulation toensure thatuniform conditions applied inproduction, importation,
exportation, sale,storage andtransportation, andfortheStatetoobtain thenecessary statistical basis
tomaintain proper order. Hestressed thatthedistribution ofimported tobacco products wasnot
restricted. AsperDecember 1995, 76enterprises hadbeenlicensed forwholesale trade, 11enterprises
forimporting and2enterprises fortheproduction oftobacco products.
56. Therepresentative ofLatvia saidthatprocedures governing production, manufacture and
distribution ofpharmaceutical products contained intheDrugs Register orVeterinary Drugs Register
oftheRepublic ofLatvia, including licensing provisions forspecific pharmaceutical activities, were
outlined intheLaw"OnPharmaceutical Activities". TheLawrequired entrepreneurial activity licencesWT/ACC/SPEC/LVA/3/Rev.1
Page27
tooperate apharmacy, apharmaceutical orveterinary wholesale company, ortomanufacture medical
andveterinary medical products. Therequirements forobtaining theselicences werebased oncriteria
toensure consumer protection andproduct quality.
57. Some members oftheWorking Party requested thatLatvia undertake toeliminate allmeasures
applied toenforce quantitative restrictions, including thenon-automatic import licensing forgrains
andthebanonsugar imports, asofthedateofaccession andcommit nottointroduce, re-introduce
orapply quantitative restrictions onimports ornon-tariff measures suchaslicensing, quotas, bansand
other restrictions having equivalent effect thatcannotbejustified under theprovisions oftheWTO
Agreements onTechnical Barriers toTrade, Sanitary andPhytosanitary Measures, Import Licensing
Procedures andAgriculture. Additionally, Latvia wasasked toconfirm thatimport licensing onother
commodities, especially wheat flour, cereal flour, cereal groats, cereal grains otherwise worked, sugar
andanimal feed, alcoholic beverages andtobacco products, wereissued forstatistical purposes only
andadministered inconformity withArticle XIoftheGATT 1994 andtheAgreement onImport
Licensing Procedures.
58. TherepresentativeofLatviaconfirmedthatasfrom1July1997Latviamaintainednoquantitative
import restrictions onanyproducts other thanthose mentioned inparagraphs 50to58.
59. Therepresentative ofLatvia confirmed thatLatvia would, fromthedateofaccession, eliminate
andshallnotintroduce, re-introduce orapply quantitative restrictions onimports orother non-tariff
measures such aslicensing, quotas, bans, permits, prior authorization requirements, licensing
requirements andother restrictions having equivalent effect thatcannot bejustified under theprovisions
oftheWTO Agreement. Thiswillinclude thecurrent licensing restrictions oncertain products in
Chapters 10,11and12andtheimport banonsugar products insection 1701ofLatvia 'stariffschedule.
Headded thatthespecial import permits required fortheimportation ofalcoholic beverages andtobacco
aregrantedautomaticallytoallwhorequestthemandwouldnotrestricttherighttoimporttheseproducts
intoLatvia orinanywaydiscriminate against imported products. Hefurther confirmed thatthelegal
authority oftheGovernment ofLatvia tosuspend imports andexports ortoapply licensing requirements
thatcould beusedtosuspend, ban,orotherwise restrict thequantity oftrade willbeapplied from
thedateofaccession inconformity withtherequirements oftheWTO, inparticular Articles XI,XIII,
XVIII, XIX, XXandXXIoftheGATT 1994, andtheMultilateral Trade Agreements onAgriculture,
Sanitary andPhytosanitary Measures, Import Licensing Procedures, Safeguards andTechnical Barriers
toTrade. implement theAgreement onImport Licensing Procedures onthedateofaccession tothe
WTO. Hefurther confirmed thatallquantitative restrictions, including non-automatic import licensingWT/ACC/SPEC/LVA/3/Rev.1
Page28
forproducts falling under HSChapter 10andthebanonsugar imports, would beeliminated upon
accession,asrequiredbyArticleXIoftheGATT1994andtheAgreementonAgriculture.Heconfirmed
thatimport licensing onother commodities, especially wheat flour, cereal flour, cereal groats, cereal
grains otherwise worked, sugar andanimal feedwereadministered inconformity withArticle XIand
theAgreement onImport Licensing Procedures. Latvia would alsoensure thatlicensing andspecial
permit requirements ontheimportation ofalcoholic beverages andtobacco products would not,infact,
restrict theright toimport these products intoLatvia orinanywaydiscriminate against imported
products. TheWorking Party tooknoteofthese commitments.
Customs Valuation
60. Some members oftheWorking Party asked Latvia toprovide additional information onits
customs valuation methods, noting inparticular thatterminology suchas"approximate valuation" and
valuation "according tothegoods ofthesame type" hadnocounterpart intheWTO Agreement on
Implementation ofArticle VIIoftheGATT 1994(theCustoms Valuation Agreement). Suchvaluation
practices were specifically prohibited inArticle 7.2oftheCustoms Valuation Agreement andthe
Agreement authorized nodelay intheimplementation ofthisprovision. Amember sought Latvia 's
commitmenttoapplyfullytheWTOprovisionsconcerningcustomsvaluationfromthedateofaccession,
including, inaddition totheAgreement ontheImplementation ofArticle VIIoftheGATT 1994, the
provisions fortheValuation ofCarrier Media Bearing Software forDataProcessing Equipment and
theprovisions ontheTreatment ofInterest Charges inCustoms Value ofImported Goods.
61. Therepresentative ofLatvia saidthatcurrent valuation practices hadbeenwerebased onthe
Law"OnCustomsDuty(Tariffs)"andRegulationNo.27"OnEstimationsofCustomsValuationRelating
toImported andExported Goods andOther Subjects" which, interalia,allowed theuseofreference
prices. Latvia hadacknowledged thedisparity between itslegislation andtheWTO Agreement on
ImplementationofArticleVII.Amendmentstoexistingruleshadaccordinglybeendraftedandsubmitted
forratification byParliament. Amendments totheLaw"OnCustoms Duty(Tariffs)" hadentered into
force on1July1997andtheArticles related tothedetermination ofcustoms value, including theuse
ofreference prices, hadbeendeleted. ThenewCustoms Law(Customs Code) hadbeenadopted by
Parliament andentered wasexpected toenter intoforce on1July1997. Thevaluation methods in
thenewlawwerebased ontransaction value; thevalue ofidentical goods; thevalue ofsimilar goods;
theunitprice method andthecomputed value method. Acopyofthedraftlawwasprovided tothe
Working Party. Secondary legislation toimplement theCustoms Lawhadbeensubmitted totheCabinet
ofMinisters forapproval. TheCustoms Lawprovided themethods fordetermining customs valueWT/ACC/SPEC/LVA/3/Rev.1
Page29
inaccordance with therequirements ofArticle VIIoftheGATT 1994 andtheAgreement on
Implementation ofArticle VIIoftheGATT 1994. Heconfirmed thattheuseofreference prices for
thedetermination ofcustoms value hadbeeneliminated bytheintroduction ofthenewlegislation.
62. Therepresentative ofLatvia saidthatLatvia would undertake tointroduce, implement and
enforce customs valuation legislation inaccordance with therequirements ofArticle VIIofthe
GATT1994andtheAgreementontheImplementationofArticleVIIoftheGATT1994by1July1997.
Heconfirmed thatLatvia would fullyapply theWTO provisions concerning customs valuation from
thedateofaccession without recourse toatransition period, including theAgreement onthe
Implementation ofArticle VIIoftheGATT 1994including itsprovisions onmethods ofappraisement
andAnnex I(Interpretative Notes) andArticle 13oftheAgreement, aswellastheprovisions forthe
Valuation ofCarrier Media Bearing Software forDataProcessing Equipment (Decision 4.1). The
Working Party tooknoteofthese commitments.
Other Customs Formalities
63. Therepresentative ofLatvia saidthatLatvia wasamember oftheWorld Customs Organization.
Adraftlawonaccession totheKyoto Convention hadbeensubmitted totheGovernment. Norms
laiddown intheKyoto Convention hadbeentaken intoaccount inthedevelopment ofthenewCustoms
Law.
Anti-Dumping, Countervailing Duties andSafeguard Regimes
64. Some members oftheWorking Party referred totheprovisions regarding anti-dumping and
countervailing duties inChapter IIoftheLaw"OnCustoms Duties (Tariffs)" andrequested information
onLatvia 'sintentions concerning theestablishment ofnew, broader legislation inthisarea. The
representative ofLatvia saidthatatpresent nodraftlegislation existed related tothisissue. Latvia
wasatthestageofexamining possibilities fortheintroduction ofanti-dumping andcountervailing duty
legislation, taking intoaccount itsspecific situation asasmall country andtheresources available in
theStatebudget forthepurpose ofeventual investigations. According totheexisting timetable, draft
legislation oncountervailing duties would bepresented totheCabinet ofMinisters by1998andastudy
ontheintroduction ofanti-dumping legislation would becompleted inthebeginning of1998.
65. Some members oftheWorking Party asked Latvia todescribe itssafeguards regime and
questioned whether existing legislation would beconsistent with GATT Article XIX andtheWT/ACC/SPEC/LVA/3/Rev.1
Page30
WTO Agreement onSafeguards. Therepresentative ofLatvia replied thatthecurrent safeguards regime
wasbased onRegulation No.20"Regulations toProtect theDomestic Market forFoods StuffProduced
inLatvia". Theregulation addressed onlyagricultural products -inparticular liveanimals, grain,
milk, meat, fish,potatoes andproducts made thereof -andhadbeenintroduced astherecent economic
transition haddisrupted sectors which normally would supply competitive products. However, the
regulations hadyettobeapplied. Theexisting regime wastemporary andwould bereplaced bynew
legislation. Currently, Latvia hadnotimetable fordrafting andintroducing newsafeguard legislation.
66. Therepresentative ofLatvia saidthatLatvia would notapply anyanti-dumping, countervailing
orsafeguard measure untilithadimplemented appropriate lawsinconformity withtheprovisions of
theWTO Agreements ontheImplementation ofArticle VI,onSubsidies andCountervailing Measures,
andonSafeguards. Intheelaboration ofanylegislation concerning anti-dumping duties, countervailing
duties andsafeguards, Latvia would ensure theirfullconformity withtherelevant WTO provisions,
includingArticleVIandXIXoftheGATT1994andtheAgreementontheImplementationofArticleVI,
theAgreement onSubsidies andCountervailing Measures andtheAgreement onSafeguards. After
suchlegislation wasimplemented, Latvia would alsoapply anyanti-dumping duties, countervailing
duties andsafeguard measures infullconformity withtherelevant WTO provisions. TheWorking
Party tooknoteofthese commitments.
2. Export Regulation
Customs Tariffs, FeesandCharges forServices Rendered, Application ofInternal Taxes toExports
67. Some members oftheWorking Party requested details onexport taxratesandplans tophase
outsuchtaxes.
68. Inresponse, therepresentative ofLatvia saidthatallgoods werezero-rated withtheexception
ofcertain wood products, metal waste andscrap, andantiquities. Thelistofconcerned products, by
HStariffline,andtherespective tariffratesisreproduced inTable 5.Export duties oncertain mineral
products falling within HSChapter 25wereeliminated witheffect from17July1996. Latvia would
abolish export duties byyear2000, withtheexception ofduties onspecific antiques. Amendments
totheLaw"OnCustoms Duties (Tariffs)" hadentered intoforce on1July1997. According tothese
amendments, Parliament hadestablished atimetable fortheelimination ofexport tariffs onitems falling
within HSChapters 44and72.Thelistofproducts subject toexport taxes, byHStariff line,and
therespective tariff ratesisreproduced inAnnex 2.WT/ACC/SPEC/LVA/3/Rev.1
Page31
(Table 5indocument WT/ACC/SPEC/LVA/3 hasbeenreplaced byanewtable, contained inAnnex 2.)
69. Therepresentative ofLatvia confirmed thatLatvia would abolish allexport duties by
1January 2000 withtheexception ofthedutyonantiques. Ppresent export tariff ratesrelated only
tothegoods listed inAnnex 2Table 5Export Duty Tariffs ies.Allcustoms tariff changes were
published intheofficial journal oftheRepublic ofLatvia -thenewspaper "Latvijas Vèstnesis". Latvia
would abolish allexport duties by1January 2000 withtheexception ofthedutyonantiques. The
timetable forelimination ofexport duties would besimilar forregional trade agreement partners and
partners towhich MFN treatment wasapplied. [TheWorking Party tooknoteofthiscommitment.]
Export Restrictions
70. Some members oftheWorking Party requested details onthelicensing regime onexports,
notably withregard totradeinmetals andpyrotechnical materials. Therepresentative ofLatvia replied
thatbusiness licences wereissued toregistered enterprises fordomestic purchasing andexports ofmetal
scrap inaccordance withtheLaw"OnEntrepreneurial Activity". Licensing oftradeinstrategic goods,
products, services andtechnologies hadbeenestablished forreasons ofinternal security andtofulfil
internationalobligationsonnon-proliferation.LatviahadestablishedanExportControlSystemcovering
munitions andexports ofdualusegoods based oninternational guidelines, incorporating theformer
COCOM Munitions ListandCouncil Regulation (EC) No.3381/94. Therepresentative ofLatvia
confirmed thatthelicensing ofexported metals wasusedforstatistical purposes onlyandthatthenumber
ofexport licences issued wasnotlimited.
Export Subsidies
71. Amember oftheWorking Party asked Latvia todescribe itsdutydrawback system. The
representative ofLatvia replied thatdutydrawback wasavailable fortemporary importation ofgoods
forprocessing, improvement, repair orreplacement duetospoilage andre-exports inaccordance with
ChapterVIIoftheLaw"OnCustomsDuties(Tariffs)"withRegulationNo.87"ImportofCommodities
andOther Items forProcessing" providing more specific procedures. Additional documentation was
required tocertify thatgoods would notbesoldinthedomestic market andtoindicate theforegone
amount ofimport taxes andVAT. Heconfirmed thatLatvia maintained noquantitative restrictions
related tothedutydrawback scheme.WT/ACC/SPEC/LVA/3/Rev.1
Page32
72. Therepresentative ofLatvia saidthathisGovernment intended tosupport anexpansion ofthe
activities ofthe"Latvian Export Credit", aState Joint-Stock Company. Thiscompany hadbeen
established on20January 1995according toOrder No.519-r oftheCabinet ofMinisters oftheRepublic
ofLatvia "OntheState JointStock 'Latvian Export Credit '".Themain aimofthecompany wasto
promote exports ofmanufactured goods, services andtechnology offered byLatvian entrepreneurs
toother countries andtoenable Latvian entrepreneurs tomanage export andimport transactions,
providing themwiththecorresponding insurance andguarantee system. Latvian Export Credit (LEC)
offeredexportguarantees-exportpaymentguarantees,exportfinanceguarantees,buyercreditguarantees
andletter ofcredit guarantees -andimport guarantees, i.e.import payment guarantees andimport
finance guarantees. LEC hadthusfarnotprovided "classical" export credits, i.e.credits extended
bytheexport credit agency oftheexporting Stateorbytheexporter directly tobuyers ofgoods and
services abroad, butrather made short-term credits available toproducer-exporters tohelpstabilize
theircashflowwhile theywereawaiting receipt ofduepayments fromtheircustomers abroad. These
credits wereextended onthebasisofcommercial principles andonconditions similar tothose offered
bycommercial banks. Hestated thatthese credit services didnotdistort competition astheStatedid
notsubsidize export crediting activities andLECoperated withaprofit. LEC wasplanning tostart
providing "classical" export credits onconditions (interest rate,duration, etc.)which would comply
withtheOECD Arrangement onGuidelines forOfficially Supported Export Credits.
74. Therepresentative ofLatvia stated thatLatvia didnotmaintain anyexport subsidies which
metthedefinition ofaprohibited subsidy within themeaning ofArticle 3oftheAgreement onSubsidies
andCountervailing Measures, andwould notintroduce suchsubsidies inthefuture. TheWorking
Party tooknoteofthiscommitment.
Internal Policies Affecting Foreign Trade inGoods
Industrial Policy, including Subsidies
73. Amember oftheWorking Party noted thattheLatvian Government hadsignalled plans for
extensive investments ininfrastructure andwondered what thelikely effect would beonLatvia 's
exporting sectors. Herequested thatindustrial support programmes benotified inaccordance with
theAgreement onSubsidies andCountervailing Measures. Therepresentative ofLatvia replied that
theGovernment aimed atimproving infrastructure generally andwould nottarget anyparticular industry
orenterprise.WT/ACC/SPEC/LVA/3/Rev.1
Page33
74. Therepresentative ofLatvia added thatthestructural policy ofhisGovernment aimed at
successful transition toacompetitive market economy operated byviable industrial enterprises. The
Ministry ofEconomy haddrafted a"Concept ofGovernment Strategy inIndustry andNational
Programme ofSmall andMedium Enterprise Development" which discussed issues suchasinvestment
promotion, industrial cooperation, industry restructuring andjobcreation. Thedevelopment ofsmall
andmedium-sized enterprises wasconsidered particularly important andtheGovernment encouraged
andsupported entrepreneurship through training andnetwork programmes. Business Advisory Service
Centres, enterprise foraandeducational "workbooks" hadbeenestablished tofacilitate management
training andbusiness networks. Higher education institutions alsooffered special training courses for
entrepreneurs. TheGovernment hadalsoelaborated aregional development policy under which grants
andloans would beprovided fortheestablishment andexpansion ofsmall andmedium-sized enterprises
andthedevelopment ofenergy-saving technology. Riskfinancing would beprovided through anew
institution, theRegional Development Fund. Another important element ofLatvia 'sindustry policies
wastherestructuring andprivatization ofStateenterprises withemphasis ontheparticipation offoreign
investors.
75. Therepresentative ofLatvia confirmed thatLatvia didnotmaintain subsidies which metthe
definition ofaprohibited subsidy, within themeaning ofArticle 3oftheAgreement onSubsidies and
Countervailing Measures andthatitdidnotintend tointroduce suchprohibited subsidies inthefuture.
Therepresentative ofLatvia confirmed thatanysubsidy programmes would beadministered inline
withtheAgreement onSubsidies andCountervailing Measures andthatallnecessary information on
programmes tobenotified, ifsuchexist, would beprovided totheCommittee onSubsidies and
Countervailing Measures inaccordance withArticle 25oftheAgreement upon entry intoforce of
Latvia 'sProtocol ofAccession. TheWorking Party tooknoteofthiscommitment.
Technical Barriers toTrade, Sanitary andPhytosanitary Measures
76. Regarding technical barriers totrade, some members oftheWorking Party asked about the
system ofstandards andproduct certification inLatvia, including participation ininternational standards
organizations,planstoadoptandimplementtheCodeofGoodPractice(Annex3oftheWTOAgreement
onTechnical Barriers toTrade), theacceptance ofcertificates issued byforeign bodies andaccreditation
ofprivate certification bodies.
77. Therepresentative ofLatvia provided information ontechnical barriers totrade indocument
WT/ACC/LVA/4, Annex 5.Headded thatinorder tofulfiltheobligations laiddown bytheAgreementWT/ACC/SPEC/LVA/3/Rev.1
Page34
onTechnical Barriers toTrade (theTBTAgreement), notably itsArticle 2"Technical Regulations
andStandards", Latvia haddeveloped aNational Standardization System approved bytheCabinet of
Ministers on8August 1995. TheLatvian National Centre ofStandardization andMetrology hadbeen
established toperform allactivities related totheadoption ofstandards. TheCentre wasanaffiliated
member oftheEuropean Standardization Committee (CEN) andacorresponding member oftheISO.
TheCentre applied ISOGuide 21which outlined theprinciples regarding adoption ofinternational
standards. Inall,21technical committees hadbeenestablished under theauspices oftheCentre and
theirmaintasksweretoimplement andharmonize theLatvian standardization system withinternational
standards. Membership inthetechnical committees reflected allinterested parties concerned, i.e.
representatives ofrelevant Ministries, producers andother experts. Latvia waspreparing mass
implementation ofinternational standards using the"cover sheet" method, allowing theadoption of
approximately500standardsperyear.SpecificLatvianstandardswereimplementedonlyinverynarrow
areas ofpurely national interest. InviewofArticle 4oftheTBTAgreement, Latvia waspreparing
toadopt andimplement theCode ofGood Practice forthePreparation, Adoption andApplication of
Standards. TheLatvian National Centre ofStandardization andMetrology would betheresponsible
body forimplementing theCode ofGood Practice.
78. Concerning Article 5oftheTBTAgreement, Parliament hadadopted laws"OnConformity
Assessments", "OntheSafety ofProducts, Services andLiability ofProducer, Services Supplier" during
1996andaLaw"OnUniformity ofMeasurements" in1997. Latvia hadadopted asnational standards
EN45000, ISO9000andISOGuides 21,22,25and58toensure harmonized conformity assessment
procedures (forproducts) andquality systems (formanufacturers). Conformity assessment inthe
mandatory area,i.e.related totheprotection ofhuman health, safety andtheenvironment, wascarried
outbycompetent testing andcalibration laboratories andcertification andinspection bodies authorized
bytheCabinet ofMinisters. Thecompetence oftesting andcalibration laboratories andcertification
andinspection bodies wasassured bymeans ofaccreditation orequivalent procedures inaccordance
withISO/IEC Guides 25and58.Latvia operated aunified accreditation system inaccordance with
internationalprinciplesandrelevantISOprovisions.AccreditationwasaccordedbytheLatvianNational
Accreditation Office (LATAK), anindependent bodyunder thesupervision oftheMinistry ofEconomy.
LATAK assured thedetermination ofcompetence oftheconformity assessment bodies.
79. Therepresentative ofLatvia saidthatconformity assessment ofgoods wasprescribed inthe
Law"OntheProtection ofConsumer Rights", "OntheSafety ofProducts, Services andLiability of
Producer, Service Supplier", "OnConformity Assessment" andtheLaw "OnUniformity of
Measurements". Three third-party certification centres hadsofarbeennominated bytheCabinet ofWT/ACC/SPEC/LVA/3/Rev.1
Page35
Ministers:theLatvianNationalCertificationCentreforFood,CosmeticsandToys;theLatvianNational
Standardisation Centre forHousehold Electric Equipment; andtheBaltic Machinery Experimental
Station forAgricultural andWood Equipment. These Centres wereunder accreditation procedures.
Conformity assessment inthemandatory area, i.e.related totheprotection ofhuman health, safety
andtheenvironment, wascarried outbycompetent testing andcalibration laboratories andcertification
andinspectionbodiesauthorizedbytheCabinetofMinisters.TheNationalAccreditationOfficeintended
tojoinISOCASCO. Certificates issued byforeign institutions wererecognized inaccordance with
bilateral agreements andcorresponding regulations onunilateral recognition. Safety standards and
requirements wereidentical forimported anddomestic products. Draft standards weredisseminated
among allinterested parties andwere available foranydiscussion andcomments.
80. Referring toArticle 10oftheTBTAgreement, therepresentative ofLatvia saidthatLatvia
would ensure theexistence ofanenquiry pointtohandle allreasonable enquiries fromortoother WTO
MemberStatesandinterestedparties.Theenquirypointwouldalsoberesponsibleforprovidingrelevant
documents regarding technical regulations, standards andconformity assessment procedures inLatvia.
81. Some members oftheWorking Party asked Latvia todescribe itsregime ofsanitary and
phytosanitary measures inthelightofWTO requirements andoutline howtheprovisions oftheWTO
Agreement ontheApplication ofSanitary andPhytosanitary Measures (SPS Agreement) would be
implemented afteraccession. Amember wasparticularly concerned about transparency, asitappeared
thatnewregulations were notalways published prior toimplementation.
82. Therepresentative ofLatvia saidLatvia participated intheactivities oftheCodex Alimentarius
Commission, theIOE(Office International desEpizooties) andtheEuropean andMediterranean Plant
Protection Convention andhoped tojointheInternational Plant Protection Organization in1996 or
1997. Latvia based itssanitary andphytosanitary measures onrecommendations oftheseorganizations
andonregulations inforce intheNordic countries. Latvia reported monthly tointernational
organizations (FAO, WHO andIOE)onprogress inimplementing international norms. Acompleted
questionnaire onsanitary andphytosanitary measures wasprovided totheWorking Party
(WT/ACC/LVA/12, Annex 2).
83. Therepresentative ofLatvia added thattheLaw"OnPlantProtection" provided theframework
foradministering phytosanitary measures. Sanitary measures werecovered intheLaw"OnVeterinary
Medicine", the"Pharmaceutical Law" andthe1995 "Food Law". Latvia wasintheprocess of
establishing adequate approval, control andinspection procedures asrequired bytheWTO Agreement.WT/ACC/SPEC/LVA/3/Rev.1
Page36
Imported products wereaccompanied bycertificates issued bytheveterinary authorities oftheexporting
countryinaccordancewithLatvianqualityrequirements.Theproductscoveredbyveterinaryregulations
fellunder HSChapter headings 0100, 0200, 0300, 0400, 0407, 0409, 0410, 0500, 0714, 1000, 1200,
1201, 1202, 1204-1208, 1211, 1212, 12149010, 1500, 1600, 2100, 2300, 2302, 2304-2306, 2308
and2309. TheState plant protection service wasresponsible forthecontrol ofproducts groups
0601-0603, 0701, 0703, 0706, 0708, 0713, 0714, 0801-0806, 0808, 0809, 0813, 090111, 090130,
0904, 0906-0908, 0910, 1000, 1101-1103, 1107, 1200, 1201, 1202, 1203, 1204, 1205, 1206, 1207,
1208, 1209, 1210-1212, 1214910, 1400, 1802, 1802, 2302-2306, 2308 and2404. TheEnvironment
Health service institutions inspected products under HSheadings 0200, 0300, 0400, 0409, 0410, 0500,
0700, 0701, 0703, 0706, 0708, 0713, 0714, 0800-0806, 0808, 0809, 0813, 0900, 090111, 0904,
0906-0908, 0910, 1000, 1100-1103, 1107, 1201, 1202, 1204-1207, 1210-1212, 1300, 1500, 1600,
1700, 1800, 1801, 1900, 2000, 2100, 2200, 2402and2403. Latvia would accept exporters 'certificates
forprocessed foodproducts conforming toLatvia 'sregulations. Theofficial listofquarantinable pests
(plant) anddiseases (animals) wasprovided totheWorking Party. Thesanitary andphytosanitary
measures applied byLatvia andthecorresponding product coverage ispresented inTable 6.
Table 6Products Subject toSanitary andPhytosanitary Measures
HStariff
lineProduct description Measure
0100 Live animals; animal products Veterinary regulations
0200 Meat andedible meat offals Veterinary regulations
0300 Fishandcrustaceans, molluscs andother aquatic
invertebratesVeterinary regulations
0400 Dairy produce; bird’seggs; natural honey; edible products
ofanimal origins, notelsewhere specified orincludedVeterinary regulations;
Environment Health
regulations
0500 Products ofanimal origin, notelsewhere specified or
includedVeterinary regulations
0601 Bulbs, tubers, tuberous roots, corms, crowns and
rhizomes, dormant ingrowth orinflower; chicory plants
androots other thanroots ofheading No12.12Plant protection regulations
0602 Other liveplants (including their roots), cuttings andslips,
mushroom spawnPlant protection regulations
0603 Cutflowers andflower buds ofakindsuitable forbouquets
orforornamental purposes, fresh, dries, dyed, bleached,
impregnated orotherwise preparedPlant protection regulations
0700 Edible vegetables andcertain rootandtubers Plant protection regulations;
Food control regulations
0800 Edible fruitandnuts; peelofcitrus fruitormelons Environment Health
regulations;
Plant protection regulationsWT/ACC/SPEC/LVA/3/Rev.1
Page37
HStariff
lineProduct description Measure
0900 Coffee, tea,mate andspices Plant protection regulations
1000 Cereals Plant protection regulations
1100 Products ofmilling industry; malt; starches; inulin Plant protection regulations
1200 Oilseeds andoleaginous fruits; miscellaneous grains, seeds
andfruit; industrial ormedicinal plants; straw andfodderVeterinary regulations;
Plant protection regulations
1201 Soya beans, whether ornotbroken Environment Health
regulations
1202 Ground -nuts, notroasted orotherwise cooked, whether or
notshelled orbrokenEnvironment Health
regulations
1300 Lac; gums; resins andother vegetable sapsandextracts Plant protection regulations;
Food control regulations
1400 Vegetable plaiting materials; vegetable products not
elsewhere specified orincludedPlant protection regulations
1500 Animal orvegetable fatsandoilsandtheir cleavage
products; prepared edible fats;animal orvegetable waxesVeterinary regulations;
Plant protection regulations;
Food control regulations
1600 Preparations ofmeat, offishorofcrustaceans, molluscs or
other aquatic invertebratesVeterinary regulations;
Plant protection regulations;
Food control regulations
1700 Sugar andsugar confectionery Environment Health
regulations;
Food control regulations
1800 Cocoa andcocoa preparations Environment Health
regulations;
Food control regulations
1801 Cocoa beans, whole orbroken, raworroasted Plant protection regulations
1802 Cocoa shells, husks, skins andother cocoa waste Plant protection regulations
1900 Preparations ofcereals, flour, starch ormilk; pastrycooks '
productsEnvironment Health
regulations;
Food control regulations
2000 Preparations ofvegetables, fruit, nutsorother parts of
plantsPlant protection regulations;
Food control regulations
2100 Miscellaneous edible preparations Food control regulations
Veterinary regulations
2200 Beverages, spirits andvinegar Environment Health
regulations
2300 Residues andwaste from thefood industries; prepared
animal fodderVeterinary regulations;
Plant protection regulations
2401 Unmanufactured tobacco; tobacco refuse Plant protection regulations
2402 Cigars, cheroots, cigarillos andcigarettes, oftobacco orof
tobacco substitutesEnvironment Health
regulations
2403 Other manufactured tobacco andmanufactured tobacco
substitutes; "homogenized" or"reconstituted" tobacco;
tobacco extracts andessencesEnvironment Health
regulations
2703 Peat(including peatlitter), whether ornotagglomerated Plant protection regulationsWT/ACC/SPEC/LVA/3/Rev.1
Page38
HStariff
lineProduct description Measure
3002 Human blood; animal blood prepared fortherapeutic;
prophylactic ordiagnostic usesVeterinary regulations
Environment Health
regulations
3101 Animal orvegetable fertilizers, whether ornotmixed
together orchemically treated; fertilizer produced bythe
mixing orchemical treatment ofanimal orvegetable
productsPlant protection regulations
Veterinary regulations
3808 Insecticides, rodenticides, fungicides, herbicides,
anti-sprouting products andplant-growth regulators,
disinfectants andsimilar products, putupinforms or
packing forretail salePlant protection regulations
4403 Wood intherough, whether ornotstripped ofbarkor
sapwood, orroughly squaredPlant protection regulations
4407 Wood sawn orchipped lengthwise, sliced orpeeled,
whether ornotplaned, sanded orfinger jointed, ofa
thickness exceeding 6mmPlant protection regulations
4415 Packing cases, boxes, crates, drums andsimilar packing,
ofwood, cable drums ofwood; pallets, boxpallets and
other loadboards ofwoodPlant protection regulations
4501 Natural cork, raworsimply prepared; waste cork;
crushed, granulated orground corkPlant protection regulations
4600 Manufactures ofstraw, ofesparto ortoother materials;
basketware andwickerworkPlant protection regulations
5001 Silk-worm cocoons suitable forreeling Plant protection regulations
5003 Silkwaste (including cocoons unsuitable forreeling, yarn
waste andgarnetted stock)Plant protection regulations
5101 Wool, notcarded orcombed Plant protection regulations
5103 Waste ofwool oroffineorofcoarse animal hair,
including yarnwaste butexcluding garnetted stockPlant protection regulations
5201 Cotton, notcarded orcombed Plant protection regulations
5202 Cotton waste (including yarnwaste andgarnetted stock) Plant protection regulations
5301 Flax, raworprocessed butnotspun; flaxtowandwaste
(including yarn waste andgarnetted stock)Plant protection regulations
5302 True hemp, raworprocessed butnotspun, towandwaste
oftruehempPlant protection regulations
5303 Juteandother bast, raworprocessed butnotspan, tow
andwaste ofthese fibresPlant protection regulations
5304 Sisal andother textile fibres ofthegenus Agave, rawor
processed butnotspunPlant protection regulations
5305 Coconut, abaca, ramie andother vegetable textile fibres,
notelsewhere specified orincluded, raworprocessed but
notspunPlant protection regulations
84. SummarizingLatvia'seffortsthusfartoimplementtheAgreementontheApplicationofSanitary
andPhytosanitary Measures, therepresentative ofLatvia saidthatfivelaws-theLawonProtectionWT/ACC/SPEC/LVA/3/Rev.1
Page39
ofConsumer Rights, theLawonVeterinary Medicine, theLawonPharmaceuticals, theLawonFood
andtheLawonPlant Protection -hadbeenadopted since 1992. These lawsandtheiramendments
constitutedthebasisforLatvia'scompliancewiththeSPSAgreement.Latviawaspreparingamendments
totheLawonFoodtomeettherequirementsoftheSPSAgreementtakingintoaccountrecommendations
made byagroup ofexperts inrelation toanFAO project onfoodquality improvement inLatvia and
aproject onLatvia 'sfoodlegislation sponsored byDenmark. Laws would berevised toclarify
authorities 'areas ofcompetence andresponsibility intheelaboration andharmonization ofregulations
andrequirements aswellasinmarket surveillance toavoid duplication andensure more effective food
control. Theveterinary andphytosanitary border control administration waswould bereorganized
atthebeginning of1997 inthenearfuture toimprove coordination andmeetinternational standards.
Asaresult oftheprocess toharmonize foodlegislation, Latvia hadrecently adopted anewregulation
onmaximum residue level ofveterinary drugs infoodandaregulation ona"positive listoffood
additives" wasinpreparation. Bothregulations wereinfullcompliance withinternational rules. Latvia
observed theprinciple oftransparency asitrequired alladopted regulations related tosanitary and
phytosanitary measures tobepublished intheofficial newspaper oftheRepublic ofLatvia "Latvijas
Vèstnesis". Prior totheiradoption alldraftregulations werediscussed byintheAdvisory Board of
theStateVeterinary Service andpublished inthemedia oftheveterinary profession toencourage wide
discussion. TheFood Council hadrecently begun activities asLatvia 'sexpert panel fordrafting
legislative actsandamendments. Themembers oftheCouncil were responsible officials and
representatives ofproducers, traders, consumers andother involved institutions. Latvia hadalso
developed atraining system forveterinary inspectors inorder toimprove thestandards ofcontrol,
inspection andapproval procedures according totheSPSAgreement.
85. Therepresentative ofLatvia confirmed thatLatvia would apply allobligations under theWTO
Agreements onSanitary andPhytosanitary Measures andTechnical Barriers toTrade from thedate
ofaccessionwithoutrecoursetoanytransitionperiod.TheWorkingPartytooknoteofthiscommitment.
Trade-Related Investment Measures (TRIMs)
86. Some members oftheWorking Party enquired about Latvia 'sintentions regarding notification
andelimination ofmeasures notinconformity withtheprovisions oftheWTO Agreement onTrade-
Related Investment Measures (TRIMs).WT/ACC/SPEC/LVA/3/Rev.1
Page40
87. Therepresentative ofLatvia saidthatLatvia didnotmaintain anymeasures inconsistent with
theTRIMs Agreement andwould apply theTRIMs Agreement fromthedateofaccession didnotintend
tointroduce suchmeasures inthefuture. [TheWorking Party tooknoteofthiscommitment.]
State-Trading Entities
88. Noting thatmore than500State-owned enterprises were involved inforeign trade in1994,
some members oftheWorking Party asked Latvia toprovide alistofallfirms wholly orpartly owned
ormanaged bytheState, specifying anyexclusive orspecial rights accorded totheseenterprises. Latvia
wasrequested tocomplete thequestionnaire onState-trading. Amember feltthattheState Cereal
Bureau could meetthecriteria ofaState-trading enterprise under Article XVII oftheGATT 1994 and
thatthedefinition might alsocover otherenterprises engaged inagricultural production anddistribution,
including trade insugar; metals; alcoholic beverages; andthenatural monopolies managed bythe
State. Latvia wasalsoasked toprovide details onthetrading firms Interlatvija andLatvijas Labiba.
89. Therepresentative ofLatvia provided anotification onState-trading totheWorking Party in
document WT/ACC/LVA/12 (Annex 3)describing thefunctioning oftheState Cereal Bureau. The
StateCereal Bureau wasaninstitution notengaged inregular grain trade; onoccasion, grain hadbeen
boughttoreplenishreservesheldforfoodsecurityreasons.Domesticgrainwasfavouredinprocurement
fortheStatereserve.InstitutionssuchastheStateAlcoholMonopolyBoardandtheTobaccoDepartment
didnotengage intrade, butissued business licences toother operators intheirrespective areas. Other
State-owned enterprises onlyheldthesamerights totradeastheprivate sector. Thetrading companies
Interlatvija andLatvijas Labiba werefullyprivatized in1991andtheGovernment hadnoroleintheir
activities. Therepresentative ofLatvia stated thatnoenterprises, other thantheStateCereal Bureau,
operated under special orexclusive rights inLatvia. Latvia hadestablished anExcise TaxBoard dealing
withlicensing andexcise marking ofalcohol, tobacco andlicensing ofother goods subject toexcise
tax.TheStateAlcohol Monopoly Board andtheTobacco Department wereincorporated intotheExcise
TaxBoard andhadceased toexistasseparate institutions.
90. TherepresentativeofLatviaconfirmedthathisGovernmentwouldapplyitslawsandregulations
governing thetrading activities ofState-owned enterprises andotherenterprises withspecial orexclusive
privileges andwould otherwise actinfullconformity withtheprovisions oftheWTO Agreement,
inparticular Article XVII oftheGATT 1994 andtheUnderstanding onthatArticle andArticle VIIIWT/ACC/SPEC/LVA/3/Rev.1
Page41
oftheGATS. Hefurther confirmed thatLatvia would notify anyenterprise falling within thescope
ofArticle XVII. TheWorking Party tooknoteofthese commitments.
FreeZones, Special Economic Areas
91. Therepresentative ofLatvia saidthat3special economic regimes hadbeenestablished inLatvia
byAugust 1997. Thefreezones inRigaCommercial PortandVentspils Portwere traditional free
customs zones, established according tospecial lawsandinconsistence withthenewCustoms Law.
Thespecial economic zoneinLiepaja, aformer Soviet Navy basearea,hadbeenestablished byspecial
lawtopromote development andrecovery inadestroyed region. AdraftLaw"OnRezeknes Special
Economic Zone" hadbeenpassed insecond reading inParliament. Thepolicy ofLatvia 'sGovernment
wasnottoextend thedevelopment ofspecial economic zones andnottoestablish newfreeeconomic
zones inLatvia, buttogainexperience from existing zones anddevelop more detailed regulations
regarding thefunctioning ofthese zones. Headded thatthere were noexport performance ortrade
balancing requirements associated withestablishment ofcompanies inthezoneandpurchases ofgoods
produced inthezonebytherestofLatvia would bearnormal taxes andtariff requirements. Further
information onthefreeeconomic zones isprovided inTable 7.
Table 7FreeEconomic Zones
Riga Free Trade
PortLiepaja Special Economic
ZoneVentspils Free
PortRezekne Special
Economic Zone
Territory PartofRiga port Liepaja Port, partofLiepaja
industrial port, military port
(former military baseand
campus)Ventspils Port Rezeknes industrial
region
Area approx. 200ha approx. 2,000 ha approx. 1,300 haapprox. 500ha
Tax
exemptionsFree customs
zone regime in
thetotalterritoryPossibility tocreate free
customs zone regime
(meeting therespective
conditions) insome parts of
zone. VAT -0for
investments into
infrastructure; Company
income tax-5%,Land and
realestate tax-0%,Social
tax-max. 15minimal
wages.Free customs
regime inthe
total areaPossibility tocreate
freecustoms zone
regime insome
parts ofzone.
Company income
tax-10%. Land
andrealestate tax-
0%.WT/ACC/SPEC/LVA/3/Rev.1
Page42
Riga Free Trade
PortLiepaja Special Economic
ZoneVentspils Free
PortRezekne Special
Economic Zone
landproperty Possible tolease Possible tobuyifinvestment
exceeds 100,000 Latsper
1haPossible tolease Possible tobuy
Therepresentative ofLatvia saidthataFreePortrégime existed inonepartoftheRigaTrading Port,
established bytheLaw"OnRigaFreePort", passed byParliament inNovember 1996. Projects were
under waytoestablish aFreePortrégime intheVentspils portandaSpecial Economic Zone inthe
Liepaja region. TheLiepaja project wasdesigned topromote regional economic development ina
depressed region, andtohelprestructure andrebuild thetotally destroyed environment intheformer
Soviet Navy basearea. Theexisting andplanned FreePortrégimes andSpecial Economic Zoneprojects
were inalldetails corresponding tothenewLatvian Customs Code. Twolawsinpreparation "On
promotion ofdepressed regions" and"OnSpecial Economic Zones" would regulate andcoordinate
theprocess oftheestablishment ofSpecial Economic Zones inorder topromote economic development
inthedepressed areas.
92. Therepresentative ofLatvia stated thatthefreezones andspecial economic zones authorized
bythelegislation described inparagraph 91arefullysubject tothecoverage ofLatvia 'scommitments
initsProtocol ofAccession totheWTO Agreement andthatLatvia would ensure enforcement ofits
WTO obligations inthose zones. Inaddition, goods produced inthese areas under taxandtariff
provisions thatexempt imports andimported inputs from tariffs andcertain taxes willbesubject to
normal customs formalities when entering therestofLatvia, including theapplication oftariffs and
taxes. TheWorking Party tooknoteofthese commitments
Government Procurement
93. Some members oftheWorking Party asked about thestatus andcontent ofLatvian legislation
onpublic procurement including clarification oftheexceptions concerning thecaseof"exclusive rights"
and"urgent necessity" andLatvia 'sposition regarding possible membership ofthePlurilateral Trade
Agreement onGovernment Procurement. Intheirview, Latvia should commit itselftoaspecific date
bywhich tojointheAgreement onGovernment Procurement iftheoutcome ofthenegotiations on
anentity listwassatisfactory toall.
94. Therepresentative ofLatvia saidthatLatvia hadadopted anewlawonGovernment and
Municipal Procurement based ontheAgreement onGovernment Procurement andtheUNCITRALWT/ACC/SPEC/LVA/3/Rev.1
Page43
Model LawonProcurement. TheLawallowed theaward ofsupply contracts without bidorcompetition
incases associated withthecreation ofState reserves ornational security anddefence inaccordance
withspecific decisions bytheCabinet ofMinisters, orincases ofprocurement oflessthanLVL 5,000.
Single tendering could takeplace when certain suppliers heldexclusive rights ongoods andservices;
incircumstances ofurgent necessity; when pastpurchases required thesame source foradditional
supplies; andfortheconclusion ofresearch anddevelopment contracts.
95. TheLawonPublic Procurement waspassed byParliament on24October 1996. AnEnglish
version oftheLawwould beprepared andsubmitted totheWTO Secretariat. ThenewLawonPublic
Procurement, entering intoforce on1January 1997, stated thattendering withparticipation offoreign
competitors wasmandatory iftheexpected value ofconstruction works exceeded LVL 4million
(SDR5million)ortheexpectedvalueofotherworksorsuppliesexceededLVL104,000(SDR130,000).
National treatment applied inthefieldofgovernment procurement.
96. Therepresentative ofLatvia recalled thatLatvia wasgranted observer status intheCommittee
onGovernment Procurement on4June1996 (document GPA/W/16). Latvia intended tocommence
negotiations onaccession totheAgreement onGovernment Procurement inthesecond halfof1997
andhadbegun preparation oftheaccession documents. However, additional consultations would be
required withWTO experts before negotiations could start.
97. Therepresentative ofLatvia confirmed thatLatvia willinitiate negotiations formembership
intheAgreement onGovernment Procurement during thesecond halfof1997 bytabling anentity
offernolaterthan31December 1997. Healsoconfirmed that,iftheresults ofthenegotiations are
satisfactory toLatvia andtheother members oftheAgreement, Latvia willcomplete negotiations for
membership intheAgreement by30June1998. TheWorking Party tooknoteofthiscommitment.
Transit
98. Some members oftheWorking Party asked Latvia todescribe theregime relating togoods
intransit. Therepresentative ofLatvia saidthatgoods carried intransit werechecked attheborder.
Customs offices keptacopyofthecargo dispatch notesandcollected information forstatistical purposes.
Thesame procedures were followed forallgoods, including metals. Latvia charged notransit fee
atpresent, however, aconvoy fee-paidbythetransporter -waslevied ondangerous goods, tobacco,WT/ACC/SPEC/LVA/3/Rev.1
Page44
foodproducts orperfume transported through Latvia. Certain non-dangerous goods weresubject to
asecurity deposit equal totheamount oftaxesdueonimportation ofsuchgoods inLatvia. Thesecurity
deposit would berefunded within twomonths provided thetransit regulations were adhered to.
99. TherepresentativeofLatviaconfirmedthathisGovernmentwouldapplyitslawsandregulations
governingtransitoperationsandwouldactinfullconformitywiththeprovisionsoftheWTOAgreement,
inparticular Article VoftheGATT 1994. TheWorking Party tooknoteofthiscommitment.
Agricultural Policies
100. Some members oftheWorking Party asked Latvia toelaborate onitsagriculture regime,
includingtariffprotection,budgetarysupport,concessionalcredits,exportsubsidiesandtheprocurement
ofgrain. Some members noted tariffincreases onsome products andnewsupport measures ofrecent
date. Amember sought acommitment thatLatvia would eliminate export subsidies andpricecontrols
ongrain products.
101. TherepresentativeofLatviasaidthattheweightedaveragedutyinagriculturewas14.8percent,
byHStwo-digit product categories weighted average duties were asfollows:
Liveanimals 16.5percent
Meat andby-products 26.6 "
Milk anddairy products, eggs, natural honey, etc. 27.1 "
Products ofanimal origin 12.1 "
Livetreesandother fruit 16.9 "
Vegetables, root-vegetables andtuberous plants 15.9 "
Fruit andnuts 0.8 "
Coffee, tea,mateandspices 0.5 "
Cereal crops 10.9 "
Products ofthemilling industry 18.5 "
Oilplant seeds andfruit 12.1 "
Lacquer, resin andother plant juices andextracts 13.3 "
Wadding material ofplant origin 15.0 "
Animal andvegetable fatsandoils 2.1 "WT/ACC/SPEC/LVA/3/Rev.1
Page45
Meat products andmarine products 30.7 "
Sugar andsugar confectionery 9.2 "
Cocoa anditsderivatives 11.4 "
Cereal, flour, starch anddairy derivatives 20.7 "
Fruit, vegetable, nutderivatives, etc. 14.0 "
Miscellaneous foodstuffs 10.8 "
Non-alcoholic beverages, alcoholic drinks, vinegar 24.9 "
Food processing industry residues, ready-made animal feed 13.5 "
Tobacco anditssubstitutes 15.0 "
102. Regarding domestic support, therepresentative ofLatvia saidthatLatvia maintained amarket
pricesupport forflax.According totheclassification suggested indocument WT/ACC/4, Statesupport
forflaxwasconsidered asprovided intheformofdirect payments totheproducers andinformation
wasgiven insupporting tables DS:1 andDS:9. Support forflaxwould besubject toreduction
commitments under theWTO Agreement onAgriculture. Subsidies forcereals inspecific regions,
seedmaterials andinputs weredeminimis support. Subsidies forpotatoes, cattle andseeds werealso
deminimis support. Latvia considered financing ofagricultural research, pestanddisease control,
advisory services andinfrastructure as"green box"measures. Farmers hadaccess tocredits atmarket
interest rates through aWorld Bank facility operated through theLatvian Agricultural Finance
Corporation. TheState itself didnotprovide credits butissued loanguarantees.
103. Therepresentative ofLatvia saidthattheGovernment hadguaranteed theprice offoodgrain
purchased fortheStatereserve. In1995theprice guarantee covered 32,000 tonsbutonly5,700 tons
wereactually purchased andtheStateGrain Reserve hadimported 14,000 tons. Domestic grain prices
hadrecently beenlower thantheworld market prices. Inresponse toaspecific question onelimination
ofthese guaranteed prices, therepresentative ofLatvia saidthatamendments totheLaw"OnLatvia
Grain Market andStateGrain Reserves", which would eliminate thesystem ofguaranteed grain prices,
hadbeensubmitted totheSaeima andwasexpected tocome intoeffect on1July1997.
104. TherepresentativeofLatviaaddedthatimportedagriculturalinputsinexportedfinishedproducts
wereexempt fromimport duties andVAT. Suchimports accounted for2.2percentofLatvia 'simports
ofagricultural products in1995. Latvia hadprovided export subsidies formilkpowder, canned wholeWT/ACC/SPEC/LVA/3/Rev.1
Page46
milk, cheese, butter andryein1994and1995. [Hestressed thatLatvia wasnotprepared toeliminate
export subsidies, butwould reduce them consistently withtheWTO Agreement.]
[105. Latvia 'scommitments onagricultural tariffs andondomestic support andexport subsidies for
agricultural products areincluded initsschedule ofconcessions andcommitments annexed tothedraft
Protocol ofAccession ofLatvia reproduced intheAppendix tothisreport (seeparagraph 128below).]
[tobecompleted]
Trade inCivil Aircraft
106. Therepresentative ofLatvia saidthatLatvia would implement theAgreement onTrade inCivil
Aircraft without exceptions ortransitional period atthetimeofaccession. Therepresentative ofLatvia
confirmed thatLatvia would become asignatory totheAgreement onTrade inCivil Aircraft upon
accession totheWTO. TheWorking Party tooknoteofthiscommitment.
Trade-Related Intellectual Property Rights (TRIPS)
107. Some members oftheWorking Party asked Latvia tocompare itsexisting regime withthe
WTO Agreement onTrade-Related Aspects ofIntellectual Property Rights (TRIPS). Specific questions
addressed thetimeschedule forthefullimplementation oftheTRIPS Agreement, theenforcement
ofintellectual property rights, theprotection ofcopyright andtheacceptance oftheBerne
Convention (1971) andtheRome Convention.
108. Therepresentative ofLatvia saidthatLatvia hadbeenworking toinstall anewlegalsystem
intheareaofintellectual property protection since1991. Thenumber ofnational experts onthesubject
waslimited andLatvia alsolacked experience withcertain aspects ofintellectual property suchas
geographical indications, undisclosed information, andprovisional andborder measures. Henoted
that,asstated indocument WT/ACC/LVA/8 (pp.39-40), existing legislation wasinconformity with
theWTO Agreement onTRIPS withtheexception oftheprotection ofgeographical indications and
layout-designs (topographies) ofintegrated circuits -which Latvia hadbeencommitted toimplement
bytheendof1995under abilateral agreement -andPartIII,sections 3and4oftheTRIPS AgreementWT/ACC/SPEC/LVA/3/Rev.1
Page47
(provisional andborder measures). Anoverview ofLatvia 'sintellectual property legislation andan
ongoing revision programme wasprovided totheWorking Party, andisreproduced inTable 86.
Table 86Status ofLegislation OnIntellectual Property inLatvia (April 1997)
TRIPS AgreementLaws andother legal provisions addressing and
covering thesubject mattersDraft legislation relating to
requirements oftheTRIPS
Agreement notfully metby
existing legislation
PartII,Section 1 - Copyright Lawof11May 1993
- LawonAmendments oftheLatvian
Criminal Code of6October 1955
- Cabinet ofMinisters Regulation on
Distribution (Reproduction) andPublic
Performance ofCinematographic Works
(1996)
PartII,Section 2 Trademark Lawof9March 1993
PartII,Section 3 LawonCompetition andmonopoly Restriction of
3December 1991 including provisions onunfair
competitionDraft LawonUnfair
Competition ornew(amended)
Trademark Lawincluding
provisions onProtection of
Geographical Indications
PartII,Section 4 LawonIndustrial Design Protection of
4May 1993
PartII,Section 5 Patent Lawof2March 1993 asamended on
30March 1995
PartII,Section 6 Draft LawonProtection of
Topographies ofIntegrated
Circuits
PartII,Section 7 LawonCompetition andMonopoly Restriction of
3December 1991 including provisions on
protection ofundisclosed informationDraft LawonUnfair
Competition including
provisions onprotection of
unclosed information
PartII,Section 8 Provisions ofthePatent Law, Trademark Law,
LawonIndustrial Design Protection anddraft
LawonUnfair Competition
PartIII,Section 3
(provisional
measures)Draft LawonUnfair
Competition
PartIII,Section 4
(special
requirements
related toborder
measures)Draft LawonUnfair
Competition
PartIII,Section 5
(criminal
procedures)LawonAmendment ofthe
Latvian Criminal Code with
regard toprotection of
topographiesWT/ACC/SPEC/LVA/3/Rev.1
Page48
109. Regarding thestatus ofintellectual property legislation inspecific areas therepresentative of
Latvia added that,oncopyright andrelated rights, Latvia adopted aCopyright LawinMay1993which
includedprovisionsoncomputerprogrammesandprotectionofdatabases.However,thebasicprinciples
regarding rental rights forcomputer programmes would berefined toensure better implementation.
TheCriminal Code wasamended inOctober 1995inregard toviolation ofcopyright andneighbouring
rights. Latvia hadacceded totheBerne Convention inAugust 1995 andtheGovernment ofLatvia
hadstarted thenecessary procedures forLatvia 'saccession totheRome Convention. Legislation on
theprotection ofgeographical indications (Part II,section 3oftheTRIPS Agreement) hadbeendelayed
becausethecompetentLatvianauthoritieshaddecided,afterpreliminaryconsiderationofdraftlegislation,
nottointroduce aLawonProtection ofGeographical Indications, buttoinclude therelevant provisions
inanewLawonUnfair Competition ortoamend theTrademark Lawaccordingly. Alternative draft
legislation would becompleted toallow afinaldecision onthepreferred option totakeplace bythe
endofMay1997. Concerning theprotection oflayout-designs ofintegrated circuits (Part II,section 6
oftheTRIPS Agreement), hesaidthatLatvia wasdrafting aLawonProtection ofIntegrated Circuits
based onCouncil Directive (87/54/EEC) oftheEuropean Communities onthelegal protection of
topographies ofsemiconductor products of16December 1986. Thelawhadbeensubmitted tothe
Saeima andwasexpected tobeadopted by1July1997. Protection ofundisclosed information in
accordance withtherequirements ofPartII,section 7oftheTRIPS Agreement would becovered in
thenewLawonUnfair Competition, which Latvia expected tosubmit forapproval byParliament by
October 1997. Provisions already existed intheLawonCompetition andMonopoly Restriction of
3December 1991, butthenewLawwould refine theprovisions related totheprotection ofundisclosed
information.
110. Referring toPartIIIoftheTRIPS Agreement -Enforcement ofIntellectual Property Rights
-therepresentative ofLatvia saidthatthenewLawonUnfair Competition would alsoinclude provisions
onprovisionalmeasures(PartIII,section3)andspecialrequirementsrelatedtobordermeasures(PartIII,
section 4),which would refine theprovisions onprovisional measures contained intheamended Latvian
Civil Procedural Code. Latvia would alsoamend itsCriminal Code withregard totheenforcement
ofprotection oftopographies ofintegrated circuits tobeinconformity withPartIII,section 5ofthe
TRIPS Agreement oncriminal procedures. ThenewLawonUnfair Competition wasmodelled on
legislation oftheEuropean Communities, notably Council Regulation (EC) No.3295/94 of
22December 1994laying down measures toprohibit forrelease forfreecirculation, export, re-export
orentryforasuspensiveprocedureofcounterfeitandpiratedgoods,andCouncilRegulationNo.1367/95
of16June1995. Provisions inexisting legislation relating toenforcement ofintellectual property
rights included:WT/ACC/SPEC/LVA/3/Rev.1
Page49
- Part4,Articles 54to57oftheCopyright Law which specified thenotion ofinfringement
ofcopyright andrelated rights aswellascivilprocedures provided forunder thislawand
relating toenforcement ofthesaidrights, and(Article 57)administrative andcivilliability
andcriminal responsibility incaseofinfringement ofcopyright orrelated rights;
- Chapter 9(Articles 40and41)ofthePatent Lawonpatent infringement andresponsibility
thereof, Chapter 10(Articles 42to45)onprotection ofrights derived fromapatent, andChapter
11(Articles 46to49)onreview ofdisputes incourt;
- Chapter 3(Articles 9and10)oftheLawonCompetition andRestriction ofMonopolies on
protection ofcompetition andChapter 4(Articles 11to13)onresponsibility forviolation of
restrictions onmonopolies andillegal competition;
- similar provisions provided forbytheTrademark LawandtheLawonDesign Protection;
and
- provisions inthesaidLaws referring toprocedures andmeasures provided forbycivilor
criminal law.
Inaddition toamending theLatvian CivilProcedural Code in1995toprovide forprovisional measures,
Latvia hadalsoamended theCriminal Code of6October 1955 toprovide formore severe measures
incaseofinfringement ofintellectual property rights and,inparticular, copyright andneighbouring
rights. Latvia hadbegun areform ofthecourt system tostrengthen itscapability toenforce intellectual
property rights. Theformer judiciary law,education andpractice hadgiven Latvia noexperience in
reviewing intellectual property disputes andLatvia considered asoneofitsmost important tasks to
educate anewgeneration ofexperts intheareaofintellectual property protection andenforcement
andtotrainitspractitioners (judges, advocates, patent attorneys andtrademark agents).
111. Asageneral point, therepresentative ofLatvia noted thateachlawpertaining tointellectual
property included ageneral clause stating thattheprovisions ofaninternational agreement prevailed
overnational legislation incases ofcontradiction. Theprovisions oftheTRIPS Agreement would
thusprevail overdomestic lawonLatvia 'saccession totheWTO.
112. Therepresentative ofLatvia confirmed thathisGovernment would fullyapply theprovisions
oftheAgreement onTrade-Related Aspects ofIntellectual Property Rights (TRIPS) bythedateof
itsaccession totheWTO without recourse toatransitional period. TheWorking Party tooknoteof
thiscommitment.WT/ACC/SPEC/LVA/3/Rev.1
Page50
Policies Affecting Trade inServices
113. Therepresentative ofLatvia provided adescription ofLatvia 'sservices regime indocument
WT/L/63 (L/7526/Add.3). Specific questions bymembers oftheWorking Party focused onregulations
inthefinancialsectorandclarificationoflawswithimportantprovisionsregardinginvestmentinservices
sectors.
114. Withregard tothefinancial sector, therepresentative ofLatvia stated thatlicensing requirements
werethesamefordomestic andforeign entities. However, procedurally, anapplication fromaforeign
banktoestablish abranch orrepresentative office wasconsidered bytheBoard ofGovernors ofthe
Bank ofLatvia while other applications wereconsidered bytheExecutive Board oftheBank ofLatvia.
Applications could bedismissed ifthedocuments submitted forregistration didnotmeet thelegal
requirements orifthefoundation ofabankwasconsidered nottobeintheinterest ofLatvia.
115. TherepresentativeofLatviasaidthatParliamenthadadoptedanewLaw"OnCreditInstitutions"
inOctober 1995. Under theLaw"OnInsurance" foreign investors could perform insurance activities
inLatviathroughtheestablishmentofcompaniesorpartnershipswithLatvians,i.e.joint-stockcompanies
inwhich theparticipation offoreign investors wasnotrestricted. Heconfirmed thatlicences were
issued exclusively foronetypeofinsurance activity; insurers involved inlifeinsurance wereprohibited
fromoffering non-life insurance andviceversa. Aninsurer could notconduct lifeandnon-life insurance
operations simultaneously, without establishing anewcompany. However, thisrestriction didnot
refertoaccident andhealth insurance operations concluded byaninsurer withalicence toperform
lifeinsurance.Adirectlifeinsurerwasallowedtoreinsurelife,accidentandhealthinsuranceoperations.
Adirect non-life insurer wasprohibited fromreinsuring lifeinsurance operations. Hestated thatthe
criteria forregistration ofcredit institutions orenrolment ofbroker companies werenotinconsistent
withArticle XVIoftheGeneral Agreement onTrade inServices.
116. Therepresentative ofLatvia saidthatmany service activities were subject tolicensing.
Regulation No.321of31October 1995"OnLimitation ofEntrepreneurial Activity" hadbeenannulled
andreplaced byRegulation oftheCabinet ofMinisters "OnLicensing ofSeparate Forms of
Entrepreneurial Activity" inNovember 1996. Certification hadbeenintroduced toensure aprofessional
levelofservice andtheprotection ofconsumers. Foreigners were granted national treatment inthe
issuanceofcertificatestosupplyindividualprofessionalservices.However,theLaw"OnEntrepreneurial
Activity" allowed licences forsworn auditors, sworn landsurveyors, sworn estimate practice, inspector
activities, legal adviser practice, notary practice, coach, sports instructor andspecialist practice,WT/ACC/SPEC/LVA/3/Rev.1
Page51
pharmaceutical practice, insurance mediation services andother entrepreneurship mentioned inpart4
ofitsArticle 32tobeissued onlytophysical persons. Heconfirmed thatLatvia hadnolegislation
onsafeguard measures related totrade inservices andthatnorestrictions were applied ondomestic
orinternational transfers andcurrent payments forservices.
117. Therepresentative ofLatvia saidthattheStateenterprise "Latvijas Pasts" (Latvian Post) held
monopolyrightsonpostalservices."Lattelekom",ajointventurebetweenTiltsCommunications(British
andFinnish ownership) andtheLatvian Government, hadbeengranted anexclusive rightfor20years
toprovide telecommunication services.
[118. Latvia 'sSchedule ofconcessions andcommitments onservices isannexed toitsdraftProtocol
ofAccession reproduced intheAppendix tothisReport (seeparagraph 128below.)]
[tobecompleted]
Transparency
Publication ofInformation onTrade
119. [Therepresentative ofLatvia stated that,atthelatest fromthedateofaccession, alllawsand
other normative actsrelated totrade would bepublished intheOfficial Journal promptly. Hefurther
stated thatnolaw,rule, etc. related tointernational trade would become effective prior tosuch
publication. TheWorking Party tooknoteofthiscommitment.]
Notification
120. Therepresentative ofLatvia saidthatatthelatest upon entry intoforce oftheProtocol of
Accession, Latvia would submit allnotifications (other thanthose required tobemade onanadhoc
basis) required byanyAgreement constituting partoftheWTO Agreement. Anyregulations
subsequently enacted byLatvia which gaveeffect tothelawsenacted toimplement anyAgreement
constituting partoftheWTO Agreement would alsoconform totherequirements ofthatAgreement.
TheWorking Party tooknoteofthiscommitment.WT/ACC/SPEC/LVA/3/Rev.1
Page52
Trade Agreements
121. Some members oftheWorking Party inquired about Latvia 'spreferential trade agreements.
Some members wereconcerned about theconsistency withArticle XXIV oftheGATT 1994ofthese
freetrade agreements, [noting thatthematter wasbeing examined intheappropriate body][which
excluded trade inagricultural products].
122. Therepresentative ofLatvia saidthatagreements fortheavoidance ofdouble taxation and
prevention offiscal evasion hadentered intoforcewithCanada, theCzech Republic, Denmark, Estonia,
Finland, Iceland, Lithuania, theNetherlands, Norway, Poland andSweden. Latvia hadentered into
intergovernmental agreements ontrade andeconomic cooperation, providing forMFN status, with
Armenia,Australia,Azerbaijan,CzechRepublic,Hungary,India,Moldova,Poland,RussianFederation,
Tadjikistan, Turkmenistan, Ukraine, United States andUzbekistan. Freetrade agreements hadbeen
concluded withtheEuropean Communities, EFTA, theCzech Republic, theSlovak Republic, Slovenia,
andEstonia andLithuania. These trading partners accounted fornearly 60percentofLatvia 'sforeign
trade in1996.
123. Latvia hadconcluded asetoffreetradeagreements withtheEuropean Communities, theEFTA
States, theCzech Republic, theSlovak Republic, Slovenia, Estonia andLithuania inorder todevelop
intra-regional trade. Thescope oftheseagreements covered HSChapters 1to97.AEurope Agreement
betweentheEuropeanCommunitiesandLatviawassignedon12June1995.TheFreeTradeAgreements
withNorway andSwitzerland werereplaced byaFreeTrade Agreement between Latvia andEFTA
which entered intoforce on1June1996. TheFreeTrade Agreements withtheCzech Republic and
theSlovak Republic hadentered intoforceon1July1996, andwithSlovenia on1August 1996. These
agreements were notified totheWTO concluded under theprocedures ofArticle XXIV ofthe
GATT 1994 andhadbeen notified totheWTO. ATrilateral FreeTrade Agreement ontrade in
agricultural goods between Latvia, Estonia andLithuania wassigned on16June1996 andentered
intoforce on1January 1997. Theagreement provided forelimination ofallcustoms tariffs and
quantitative restrictions between theBaltic States.
124. Therepresentative ofLatvia saidthatthefreetradeagreement withtheEuropean Communities
hadbeennotified totheWTO (document WT/REG7/N/1) andcirculated inJuly1995 indocument
WT/REG7/1. Latvia was committed toreduce tariffs onagricultural imports from the
European Communities inequal annual stepsbetween 1995and2000. Reductions weregranted through
tariffquotas; Annex XIoftheAgreement enumerated theproducts concerned andtherespective quotas,WT/ACC/SPEC/LVA/3/Rev.1
Page53
while thetariff rateswerelisted inAnnex X.Forprocessed agricultural products therelevant parts
oftheAgreement wereAnnexes 3and4ofProtocol 2.Latvia hadestablished tariff quotas formeat
andmeatproducts, yoghurt, flowers, cabbage, cauliflower andmargarine while thetariff reductions
applied forunlimited quantities ofvarious fruitandfruitjuices, petfood, hairandsome processed
products. ThemainLatvian products subject toconcessions intheEuropean Communities weremeat
andmeatproducts, dairy products, chocolate andsweets. Therepresentative ofLatvia confirmed that
theFreeTrade Agreement between Latvia andtheEuropean Communities included clauses onfurther
liberalization oftrade. Thepreferential tariff-rate quotas usedintheFreeTrade Agreements between
Latvia andtheEuropean Communities, theEFTA States, theCzech Republic, theSlovak Republic
andSlovenia hadbeenestablished tofacilitate further liberalization oftrade inproducts forwhich the
parties considered thatsome transitional period wasrequired toachieve freetrade. Allimporters were
freetoimport goods attheMFN tariff rateatanytime, irrespective ofwhether anytariff-rate quotas
hadbeenexhausted ornot.
125. Therepresentative ofLatvia noted thatLatvia 'sfreetrade agreements hadtraditionally not
covered trade inservices. However, Latvia 'sAssociation (Europe) Agreement with the
EuropeanCommunitiesincludedtradeinservicesandestablishmentissues.Latviahadsignedagreements
onemployment offoreign labour withGermany andSweden. Heconfirmed thatLatvia wasnota
party toanyagreement concerning mutual recognition ofprofessional qualifications.
126. Therepresentative ofLatvia stated thathisGovernment would observe theprovisions ofthe
WTO including Article XXIV oftheGATT 1994andArticle VoftheGATS initstrade agreements,
andwould ensure thattheprovisions oftheseWTO Agreements fornotification, consultation andother
requirements concerning preferential trading systems, freetrade areas andcustoms unions ofwhich
Latvia wasamember weremetfromthedateofaccession, insofarasthese provisions hadnotalready
beenmetbyoneoftheother Parties tosuchanagreement. TheWorking Party tooknoteofthese
commitments.
Conclusions
127. TheWorking Party tooknoteoftheexplanations andstatements ofLatvia concerning itsforeign
traderegime, asreflected inthissummary. TheWorking Party tooknoteofthecommitments assurances
given byLatvia inrelation tocertain specific matters which arereproduced inparagraphs [17,20,
and29ofthisreport. TheWorking Party tooknoteofthecommitments given byLatvia inrelation
tocertain specific matters which arereproduced inparagraphs 20,32,[37,] 38,42,43,47,48,59,WT/ACC/SPEC/LVA/3/Rev.1
Page54
60,,62,63,66,67,[69,] 74,75,77,85,[87,] 89,90,92,97,98,99,100,106,112,118,119,
120and125126]ofthisReport. TheWorking Party tooknotethatthese commitments hadbeen
incorporated inparagraph 2oftheProtocol ofAccession ofLatvia totheWTO.
128. Having carried outtheexamination oftheforeign trade regime ofLatvia andinthelightof
theexplanations, commitments andconcessions made bytherepresentative ofLatvia, theWorking
Party reached theconclusion thatLatvia beinvited toaccede totheMarrakesh Agreement Establishing
theWTO under theprovisions ofArticle XII.Forthispurpose, theWorking Party hasprepared the
draftDecision andProtocol ofAccession reproduced intheAppendix tothisReport, andtakes note
ofLatvia 'sSchedule ofSpecific Commitments onServices (document .......) anditsSchedule of
Concessions andCommitments onGoods (document .......) thatareannexed totheProtocol. Itis
proposed thatthese textsbeadopted bytheGeneral Council when itadopts theReport. When the
Decision isadopted, theProtocol ofAccession would beopenforacceptance byLatvia which would
become aMember thirty daysafteritaccepts thesaidProtocol. TheWorking Party agreed, therefore,
thatithadcompleted itswork concerning thenegotiations fortheaccession ofLatvia totheMarrakesh
Agreement Establishing theWTO.
[Tobecompleted ]WT/ACC/SPEC/LVA/3/Rev.1
Page55
ANNEX 1
Goods andServices Exempt from VAT orZero-Rated
Exemptions (Article 6)
1. Thetaxshall notbelevied onthefollowing:
(i) services ofnursing homes;
(ii) services ofday-care centres andkindergartens;
(iii) catering inpenitentiaries;
(iv) services ofeducational establishments directly connected withtheprocess ofeducation, including
tuition atState andlocal government artandmusic schools;
(v) services oftraining farms incatering forstudents atagricultural educational establishments;
(vi) services ofpublic libraries;
(vii) tuition atprivate educational establishments accredited bytheState;
(viii) visits totheatres, movies (except video), circus shows, concert activities, events incultural
establishments, visits tomuseums, exhibitions, zoological andbotanical gardens, events for
children andcharity events, events ofamateur artandsports;
(ix) medical services, supplies ofmedicine andmedical goods inaccordance withthelistadopted by
theMinistry ofWelfare andapproved bytheMinistry ofFinance.
(x) supplies ofgold, coins andbank notes totheBank ofLatvia;
(xi) betting, lotteries andother types ofgambling;
(xii) burial services, andreligious, ritual andother services provided byreligious organisations
registered intheRepublic ofLatvia provided theyhave nopurpose ofsystematic gaining of
profit;
(xiii) insurance services supplied byinsurance companies inaccordance withtheLawOnInsurance;
(xiv) payments ofindividuals onapartment rentcontracts signed, except payments forrentofhotels,
motels andsimilar establishments onheating, onsupply ofhotandcoldwater, onsanitation, on
work ofscavenger andservices provided bypublic bath-houses;
(xv) specialised baby-food inaccordance withthelistadopted bytheMinistry ofWelfare and
approved bytheMinistry ofFinance;
(xvi) scientific research financed bypublic foundations, orbyfunding from theState andlocal
government budget, orinternational institutions;
(xvii) thefollowing goods andfinancial services:
(a) extension ofloans andtheir monitoring, aswellasservices connected withloan
guarantees orother financial guarantees andtheir monitoring, except debtcollection;
(b) services ofloaninstitutions connected withdeposit andcurrent account operations,
payments, transfers, debts, checks andother negotiable instruments;
(c) negotiable instruments andservices connected withpurchase orsaleofnegotiable
instruments incirculation, except items (money, coins) supplied forcollection, orthat
contain precious metal;
(d) securities andcapital investments, aswellasservices supplied atpurchase andsaleof
securities andcapital investments;
(xviii) humanitarian aidandgiftsinaccordance withtheCabinet regulations, butifsaidgoods aresold,
thetaxshall bepaidinaccordance withlaw;
(xix) consular services;
(xx) school books andscientific literature, firstpublications ofworks oforiginal literature inLatvian
andpublications forchildren published andprinted inLatvia inaccordance withlistsadopted by
theMinistry ofEducation andScience;WT/ACC/SPEC/LVA/3/Rev.1
Page56
(xxi) mass media registered intheRepublic ofLatvia aswellasmovies, documentaries andcartoon
films, making anddistribution ofthem ifthatiscarried outbythedistributor officially
registered intheRepublic ofLatvia ;
(xxii) services provided bycompanies forjoint processing andsaleofagricultural andfishery
products, aswellascompanies forjoint usage andmaintenance ofagricultural equipment,
machinery andother tools (hereinafter -agricultural cooperatives) tofarmers holdings thatare
nottaxable persons;
(xxiii) saleofrealestate, except saleortransfer ofanunused real estate toitsowner after completion
ofconstruction;
(xxiv) supplies ofimported goods notsubject tocustoms duties inaccordance withChapters 6and7of
theLawOnCustoms Duty (Tariffs) under aprocedure setbytheCabinet, except supplies of
goods towhich the0%rateofcustoms dutyisapplied*;
(xxv) fire-fighting services provided bytheFirefighting andRescue Service department oftheMinistry
ofInterior, firefighting services ofinstitutions, enterprises (entrepreneurial companies) and
organizations, voluntary firefighters 'unions andformations offirefighting volunteers;
(xxvi) postal services provided bytheState enterprise "Latvian Post" inaccordance withtheLaw"On
Post"
2. Aperson supplying saidservices (goods) maysubject them tothetaxbyregistering attheState
Revenue Service.
3. Fixed assets imported intheRepublic ofLatvia byataxable person, shall notbesubject tothe
taxontheborder. Incaseimported fixed assets donotcreate distortions ofcompetition inthecountry,
forexample, duetoproduction ofanalogous fixed assets inLatvia, thetaxshall bewritten off.Otherwise
thecancelled taxshall becollected from aperson whohasimported thefixed assets. Theprocedure for
taxwrite-off andcollection shall bedetermined bytheCabinet regulations. Ifataxable person supplies
goods andservices notsubject tothetaxinaccordance withPart1ofthisArticle, thetaxmaybewritten
offonlyfortheportion ofthetaxthatcorresponds totheratio established byPart5ofArticle 10.
Application ofZero Rate toExports andInternational Transport (Article 7)
1. 0%taxrateshall beapplied to:
(i) supplies ofgoods outside theRepublic ofLatvia;
(ii) services related tosupplies ofgoods referred toinParagraph 1ofthisPart;
(iii) supplies ofservices outside thedomestic territory;
(iv) supplies ofgoods andservices related tosupply andmaintenance ofvessels that:
(a) operate oninternational shipping lines;
(b) perform emergency andrescue missions, orprovide assistance onsea;
(v) delivery, reconstruction, repairs, maintenance, chartering andlease ofvessels referred toin
Paragraph 4ofthisPart, andsupplies andservices inthisregard;
(vi) delivery, reconstruction, repairs, maintenance, chartering andlease ofaircraft operating on
international routes, andsupplies andservices inthisregard;
(vii) agent services andservices forcargo handling oftransportation vehicles listed inParagraphs 1-6
ofthisPart;
(viii) onthebasis ofparity, goods andservices supplied todiplomatic andconsular establishments in
theRepublic ofLatvia, their diplomatic andconsular agents andtheir underage family members
residing withthem, inaccordance withtheprocedure setbytheCabinet.
2. Ifanagent representing anatural orlegal person ofLatvia provides supplies ofgoods outside
theborders oftheRepublic ofLatvia, 0%rateshall apply fortheagent onsupplies ofgoods in
accordance withtheprocedure setbytheCabinet.
3. Toreceive input taxrefund, aVAT taxable person registered attheState Revenue Service shall
submit documentary evidence substantiating thatthesupply ofgoods orservices referred toinPart1of
thisArticle hasoccurred.WT/ACC/SPEC/LVA/3/Rev.1
Page57
4. TheVAT amount paidbynatural persons forgoods (iftheir value exceeds LVL 100) exported
from thedomestic territory shall berefunded inaccordance withtheCabinet regulations.
5. Ifataxable person thathassupplied goods orservices inaccordance withPart1ofthisArticle
cannot produce documents certifying toexport, itshall besubject tothetaxforgoods andservices
supplied inaccordance attheratesetbyPart1,Article 5.
* Goods exempt from VAT under thispoint aregoods which areexempt from thepayment ofcustoms
duty(tariff) andgoods imported temporarily intotheRepublic ofLatvia.WT/ACC/SPEC/LVA/3/Rev.1
Page58ANNEX 2
Export Duty Tariffs
Basic Rate
(%)Most favoured nation
(%)Free trade regime
(%)
CNcode Description Supple-
mentary
unitSince
1July
19971998 1999Since
1July
19971998 1999Since
1July
19971998 1999
1 2 3 5 6 7 8 9 10 11 12 13
Chapter 44 WOOD AND ARTICLES OFWOOD; WOOD
CHARCOAL
4403 Wood intherough, whether ornotstripped of
bark orsapwood, orroughly squared:
4403 20 -Other, coniferous:
4403 20100 --Spruce ofthekind"Picea abies Karst." or
silver fir(Abies albaMill.)
4403 20101 ---round timber withthelength over 2metres
andthediameter 14to24centimetresblm3 3,0 3,0 0 3,0 3,0 0 3,0 3,0 0
4403 20102 ---round timber withthelength over 2metres
andthediameter 26centimetres ormoreblm3 4,0 4,0 0 4,0 4,0 0 4,0 4,0 0
4403 20109 ---Other m3 0 0 0 0 0 0 0 0 0
4403 20300 --Pineofthekind"Pinus sylvestris L."
4403 20301 ---round timber withthelength over 2metres
andthediameter 14to24centimetresblm3 3,0 3,0 0 3,0 3,0 0 3,0 3,0 0
4403 20302 ---round timber withthelength over 2metres
andthediameter 26centimetres ormoreblm3 4,0 4,0 0 4,0 4,0 0 4,0 4,0 0
4403 20309 ---Other m3 0 0 0 0 0 0 0 0 0
4403 20900 --Other:
4403 20901 ---round timber withthelength over 2metres
andthediameter 14to24centimetresblm3 3,0 3,0 0 3,0 3,0 0 3,0 3,0 0
4403 20902 ---round timber withthelength over 2metres
andthediameter 26centimetres ormoreblm3 4,0 4,0 0 4,0 4,0 0 4,0 4,0 0
4403 20909 ---Other m3 0 0 0 0 0 0 0 0 0WT/ACC/SPEC/LVA/3/Rev.1
Page59Basic Rate
(%)Most favoured nation
(%)Free trade regime
(%)
CNcode Description Supple-
mentary
unitSince
1July
19971998 1999Since
1July
19971998 1999Since
1July
19971998 1999
4403 91000 --Ofoak(Quercus spp.)
4403 91001 ---oak-tree round timber withthelength over1
metre andthediameter over14centimetresblm3 25,0 25,0 0 25,0 25,0 0 25,0 25,0 0
4403 91009 ---Other m3 0 0 0 0 0 0 0 0 0
4403 92000 --Ofbeech (Fagus spp.)
4403 92001 ---beech round timber withthelength over 1
metre andthediameter over14centimetresblm3 30,0 30,0 0 30,0 30,0 0 30,0 30,0 0
4403 92009 ---Other
m30 0 0 0 0 0 0 0 0
4403 99 --Other:
4403 99500 ---Ofbirch
4403 99501 ----round timber withthelength over 1.6metres
andthediameter 16to24centimetres (veneer
blocks, match blocks andA-rate sawn logs)blm3 8,0 8,0 0 8,0 8,0 0 8,0 8,0 0
4403 99502 ----round timber withthelength over 1.6metres
andthediameter 26centimetres ormore (veneer
blocks, match blocks andA-rate sawn logs)blm3 10,0 10,0 0 10,0 10,0 0 10,0 10,0 0
4403 99503 ----round timber withthelength over 1.6metres
andthediameter 16to24centimetres (except
veneer blocks, match blocks andA-rate sawn
logs)blm3 2,0 2,0 0 2,0 2,0 0 2,0 2,0 0
4403 99504 ----round timber withthelength over 1.6metres
andthediameter 26centimetres ormore (except
veneer blocks, match blocks andA-rate sawn
logs)blm3 3,0 3,0 0 3,0 3,0 0 3,0 3,0 0
4403 99509 ----Other m3 0 0 0 0 0 0 0 0 0
4403 99990 ---Other:
4403 99991 ----ofother deciduous trees (soft):WT/ACC/SPEC/LVA/3/Rev.1
Page60Basic Rate
(%)Most favoured nation
(%)Free trade regime
(%)
CNcode Description Supple-
mentary
unitSince
1July
19971998 1999Since
1July
19971998 1999Since
1July
19971998 1999
4403 99992 -----round timber withthelength over1.6metres
andthediameter 16to24centimetres (veneer
blocks, match blocks andA-rate sawn logs)blm3 8,0 8,0 0 8,0 8,0 0 8,0 8,0 0
4403 99993 -----round timber withthelength over1.6metres
andthediameter 26centimetres ormore (veneer
blocks, match blocks andA-rate sawn logs)blm3 10,0 10,0 0 10,0 10,0 0 10,0 10,0 0
4403 99994 -----round timber withthelength over1.6metres
andthediameter 16to24centimetres (except
veneer blocks, match blocks andA-rate sawn
logs)blm3 2,0 2,0 0 2,0 2,0 0 2,0 2,0 0
4403 99995 -----round timber withthelength over1.6metres
andthediameter 26centimetres ormore (except
veneer blocks, match blocks andA-rate sawn
logs)blm3 3,0 3,0 0 3,0 3,0 0 3,0 3,0 0
4403 99996 -----Other m3 0 0 0 0 0 0 0 0 0
4403 99998 ----ash-tree, elm, hornbeam, maple andother
Latvia origin harddeciduous treeround timber
withthelength over1metre andthediameter
over 14centimetresblm3 25,0 25,0 0 25,0 25,0 0 25,0 25,0 0
4403 99999 ----Other m3 0 0 0 0 0 0 0 0 0
Chapter 49 PRINTED BOOKS, NEWSPAPERS, PICTURES
AND OTHER PRODUCTS OFTHE PRINTING
INDUSTRY; MANUSCRIPTS, TYPESCRIPTS
AND PLANS
4901 Printed books, brochures, leaflets andsimilar
printed matter, whether ornotinsingle sheets:
4901 10000 -Insingle sheets, whether ornotfolded
4901 10001 --notolder than50years - 0 0 0 0 0 0 0 0 0
4901 10002 --published 50to100years ago - 50 50 50 50 50 50 0 0 0
4901 10003 --older than100years - 100 100 100 100 100 100 0 0 0
-Other:WT/ACC/SPEC/LVA/3/Rev.1
Page61Basic Rate
(%)Most favoured nation
(%)Free trade regime
(%)
CNcode Description Supple-
mentary
unitSince
1July
19971998 1999Since
1July
19971998 1999Since
1July
19971998 1999
4901 91000 -Dictionaries andencyclopedias, andserial
instalments thereof
4901 91001 --notolder than50years - 0 0 0 0 0 0 0 0 0
4901 91002 --published 50to100years ago - 50 50 50 50 50 50 0 0 0
4901 91003 --older than100years - 100 100 100 100 100 100 0 0 0
4901 99000 --Other:
4901 99001 ---notolder than50years - 0 0 0 0 0 0 0 0 0
4901 99002 ---published 50to100years ago - 50 50 50 50 50 50 0 0 0
4901 99003 ---older than100years - 100 100 100 100 100 100 0 0 0
Chapter 72 IRON AND STEEL 0 0 0 0 0 0 0 0 0
7204 Ferrous waste andscrap; remelting scrap ingots
ofironorsteel:- 100 100 0 100 100 0 100 100 0WT/ACC/SPEC/LVA/3/Rev.1
Page62Theapplicable codedescription andcustoms tariffs after1July1997:
CNcode DescriptionSupplementary
unitBasic Rate
(%)Most favoured
nation (%)Free trade
regime (%)
1 2 3 5 6 7
Chapter 97 WORKS OFART, COLLECTORS 'PIECES AND ANTIQUES
9701 Paintings, drawings andpastels, executed entirely byhand, other thandrawings
ofheading No4906¦andother thanhand-painted orhand-decorated
manufactured articles; collages andsimilar decorative plaques:
9701 10000 -Paintings, drawings andpastels
9701 10001 --made inLatvia andolder than50years - 20 20 0
9701 10002 --made inabroad andolder than 100years old - 10 10 0
9701 10009 --other - 0 0 0
9701 90000 -Other:
9701 90001 --made inLatvia andolder than50years - 20 20 0
9701 90002 --made inabroad andolder than 100years old - 10 10 0
9701 90009 --other - 0 0 0
9702 00000 Original engravings, prints andlithographs
9702 00001 --made inLatvia andolder than50years - 20 20 0
9702 00002 --made inabroad andolder than 100years old - 10 10 0
9702 00009 --other - 0 0 0
9703 00000 Original sculptures andstatuary, inanymaterial
9703 00001 --made inLatvia andolder than50years - 20 20 0
9703 00002 --made inabroad andolder than 100years old - 10 10 0
9703 00009 --other - 0 0 0
9706 00000 Antiques ofanageexceeding onehundred years -
9706 00001 -made inLatvia - 20 20 0
9706 00002 -made inabroad - 10 10 0
Chapters
01-98Goods andother articles notcomplying withtheabove mentioned codes 0 0 0WT/ACC/SPEC/LVA/3/Rev.1
Page63
APPENDIX
ACCESSION OFLATVIA
Draft Decision
TheGeneral Council,
Having regard totheresults ofthenegotiations directed towards theestablishment oftheterms
ofaccession oftheRepublic ofLatvia totheMarrakesh Agreement Establishing theWorld Trade
Organization andhaving prepared aProtocol fortheAccession ofLatvia,
Decides, inaccordance withArticle XIIoftheMarrakesh Agreement Establishing theWorld
Trade Organization, thattheRepublic ofLatvia mayaccede totheMarrakesh Agreement Establishing
theWorld Trade Organization ontheterms setoutinthesaidProtocol.WT/ACC/SPEC/LVA/3/Rev.1
Page64
PROTOCOL OFACCESSION OFLATVIA
TOTHE MARRAKESH AGREEMENT ESTABLISHING
THE WORLD TRADE ORGANIZATION
Draft
TheWorld Trade Organization (hereinafter referred toasthe"WTO"), pursuant totheapproval
oftheGeneralCounciloftheWTOaccordedunderArticleXIIoftheMarrakeshAgreementEstablishing
theWorld Trade Organization (hereinafter referred toas"WTO Agreement"), andtheRepublic of
Latvia (hereinafter referred toas"Latvia"),
Taking noteoftheReport oftheWorking Party ontheAccession ofLatvia totheWTO in
document WT/ACC/LVA/.... (hereinafter referred toasthe"Working Party Report"),
Having regard totheresults ofthenegotiations ontheaccession ofLatvia totheWTO,
Agree asfollows:
PartI-General
1. Upon entry intoforce ofthisProtocol, Latvia accedes totheWTO Agreement pursuant to
Article XIIofthatAgreement andthereby becomes aMember oftheWTO.
2. TheWTOAgreementtowhichLatviaaccedesshallbetheWTOAgreementasrectified,amended
orotherwise modified bysuchlegalinstruments asmayhaveentered intoforce before thedateofentry
intoforce ofthisProtocol. ThisProtocol, which shall comprise thecommitments referred toin
paragraph 127oftheWorking Party Report, shallbeanintegral partoftheWTO Agreement.
3. Except asotherwise provided forintheparagraphs referred toinparagraph ...126ofthe
Working Party Report, those obligations intheMultilateral Trade Agreements annexed totheWTO
Agreement thataretobeimplemented overaperiod oftimestarting withtheentry intoforce ofthat
Agreement shallbeimplemented byLatvia asifithadaccepted thatAgreement onthedateofitsentry
intoforce.WT/ACC/SPEC/LVA/3/Rev.1
Page65
4. Latviamaymaintainameasureinconsistentwithparagraph1ofArticleIIoftheGATSprovided
thatsuchameasure isrecorded inthelistofArticle IIExemptions annexed tothisProtocol andmeets
theconditions oftheAnnex totheGATS onArticle IIExemptions.
PartII-Schedules
5. TheSchedules annexed tothisProtocol shall become theschedule ofConcessions and
Commitments annexed totheGeneral Agreement onTariffs andTrade 1994 (hereinafter referred to
asthe"GATT 1994") andtheSchedule ofSpecific Commitments annexed totheGeneral Agreement
onTrade inServices (hereinafter referred toas"GATS") relating toLatvia. Thestaging ofconcessions
andcommitments listed intheSchedules shallbeimplemented asspecified intherelevant partsofthe
respective Schedules.
6. Forthepurpose ofthereference inparagraph 6(a)ofArticle IIoftheGATT 1994tothedate
ofthatAgreement, theapplicable dateinrespect oftheSchedules ofConcessions andCommitments
annexed tothisProtocol shallbethedateofentry intoforce ofthisProtocol.
PartIII-Final Provisions
7. ThisProtocol shallbeopenforacceptance, bysignature orotherwise, byLatvia until.........
8. ThisProtocol shallenter intoforce onthethirtieth dayfollowing thedayofitsacceptance.
9. ThisProtocol shallbedeposited withtheDirector-General oftheWTO. TheDirector-General
oftheWTO shallpromptly furnish acertified copyofthisProtocol andanotification ofacceptance
thereto pursuant toparagraph 7toeachMember oftheWTO andLatvia.
10. ThisProtocol shallberegistered inaccordance withtheprovisions ofArticle 102oftheCharter
oftheUnited Nations.
11. Done atGeneva this...dayof....onethousand ninehundred andninety [seven], inasingle
copyintheEnglish, French andSpanish languages eachtextbeing authentic, except thataSchedule
annexed hereto mayspecify thatitisauthentic inonlyoneormore ofthese languages.WT/ACC/SPEC/LVA/3/Rev.1
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ANNEX
SCHEDULE -REPUBLIC OFLATVIA
PartI-Goods
[Tobecirculated ]
PartII-Services
[Tobecirculated ]
[Tobecompleted]