RESTRICTED
WORLD TRADE WT/ACC/SPEC/EST/1
11September 1996
ORGANIZATION(96-3522)
Original: English
ACCESSION OFESTONIA
Elements ofaDraft Report
oftheWorking Party oftheAccession ofEstonia
ThefollowingcommentshavebeenreceivedfromEstoniainresponsetodocumentWT/SPEC/39.
(Changes aremarked inboldandinbrackets.)
_______________
1. InMarch 1994, theGovernment ofEstonia requested accession totheGeneral Agreement on
Tariffs andTrade (GATT 1947). Atitsmeeting on23-24 March 1994, theGATT Council of
Representatives established aWorking Party toexamine theapplication oftheGovernment ofEstonia
toaccedetotheGeneralAgreementunderArticleXXXIII,andtosubmittotheCouncilrecommendations
which mayinclude adraftProtocol ofAccession. Membership oftheWorking Party wasopentoall
contracting parties indicating thewishtoserve onit.Inpursuance oftheMinisterial Decision of14
April1994onAcceptanceofandAccessiontotheAgreementEstablishingtheWorldTradeOrganization
(WTO) andtothedecision of31May1994ofthePreparatory Committee fortheWTO, theWorking
Party examined theapplication ofEstonia formembership intheWTO andagreed topursue themarket
access negotiations forgoods, including anagricultural country schedule, andforservices. TheWTO
Agreement entered intoforce on1January 1995. Inpursuance ofthedecision adopted bytheWTO
General Council on31January 1995, theGATT 1947Accession Working Party wastransformed into
aWTO Accession Working Party. Theterms ofreference andthemembership oftheWorking Party
arereproduced indocument WT/ACC/EST/7.
2. TheWorking Party meton25November 1994, 6-7Juneand14November 1995, 28March
and.....(Insert: 18September) 1996, under theChairmanship ofH.E.Mr.D.Kenyon (Australia).
3. TheWorking Party hadbefore it,toserve asabasis foritsdiscussions, aMemorandum on
theForeign Trade Regime ofEstonia (L/7423) andthequestions submitted bycontracting parties on
theforeign trade regime ofEstonia, together withthereplies thereto, andother information provided
bytheEstonian authorities (L/7529 andAddenda 1and2,WT/ACC/EST/2, WT/ACC/EST/4,WT/ACC/SPEC/EST/1
Page2
WT/ACC/EST/9 andCorrigendum 1).TheGovernment ofEstonia made available totheWorking
Party thefollowing documentation:
- TheCustoms Lawof24September 1993;
- LawonAmending theCustoms Lawof1December 1993;
- LawonForeign Relations of16November 1993;
- LawonCompetition of7July1993;
- LawontheState Border of30June1994;
- LawonState Budget (amended version of20April 1994);
- LawonMunicipal andTown Budget of28June1993;
- LawonCorrelation between Municipal andTown Budgets andtheState Budget
(amended version of2February 1994) ;
- LawonPrivatization of7July1993;
- LawonExport andTransit ofStrategic Goods of21April 1994;
- LawonAmending theLawoftheCentral Bank oftheRepublic ofEstonia of20April 1994;
- TheFood Lawof9February 1995;
- TheLawoftheRepublic ofEstonia onForeign Investments (inWT/ACC/EST/2, Annex IV);
- Statutes oftheEstonian Foreign Investment Agency (9May1994);
- LawonBankruptcy oftheRepublic ofEstonia of10June1992;
- LawonTaxation of29December 1993;WT/ACC/SPEC/EST/1
Page3
- LawonAmending theLawonTaxation of30March 1994;
- Income TaxLawof21December 1993 ;
- LawonLand Taxof12May1993;
- LawonLocal Taxes of10October 1994;
- LawoftheCentral Bank oftheRepublic ofEstonia of31May1993;
- LawonMotor Vehicle Excise Taxof8February 1995;
- LawonAlcohol Excise Tax(with 1994 amendments);
- LawonTobacco Excise Tax(new version of13July1994);
- LawonRevenue Stamps of28March 1994;
- LawonValue Added Tax(amended version of30June1994);
- ActonCustoms Valuation (SGI1995) of8February 1995;
- AdraftLawonPublic Procurement;
- Copyright Lawof23November 1992;
- Patent Lawof30March 1994;
- Utility Model Lawof30March 1994;
- LawonSecurities Market of14June1993;
- Insurance Lawof18November 1992;
- Memorandum ontheExport Control System inEstonia;WT/ACC/SPEC/EST/1
Page4
- Rules ofOrigin inFree-Trade Agreements withtheEuropean Union, theUkraine andthe
Trilateral Free-Trade Agreement withLatvia andLithuania;
- Rules ofOrigin inFree-Trade Agreements withEFTA countries (Norway and
Switzerland);
- Economic bulletins.
Introductory Statements
4. Therepresentatives ofEstonia noted thatEstonia hadbeenanobserver totheGATT 1947since
June1992andhadaccordingly witnessed thesuccessful conclusion oftheUruguay Round andlooked
forward toitsimplementation. Estonia hadadopted newlawsandregulations forming asolidlegislative
foundation. Moreover, Estonia ’seconomy, which encouraged competition andanentrepreneurial spirit
through liberal trade regime foragricultural andindustrial products andopenness regarding foreign
investment andforeign exchange, wasexpanding steadily. Estonia ’sfreeandopened market hadbeen
underpinned bybilaterally binding andmutually beneficial market opening commitments intrade
agreements covering more thantwothirds ofEstonia ’strade. Bilateral freetradeagreements hadbeen
concluded withLatvia, Lithuania, EFTA countries (Insert: “Ukraine, Czech Republic, Slovak
Republic ”)andtheEuropean Union andEstonia hadtradeagreements based ontheGATT withseveral
othercountries.HavingfollowedthecodeofconductlaiddownbytheGATTprinciples,fullmembership
intheGATT 1947 anditssuccessor -theWorld Trade Organization- wastheoneimportant missing
aspect inEstonia ’stradepolicy. Estonia intended tojointheGATT 1947anduponitsentry intoforce
theWTO Agreement asadeveloped country, fullyaware of,andready toassume, alltheobligations
andresponsibilities thisentailed. Estonia ’saccession totheWTO should, however, alsobeviewed
inthecontext ofanoverall political objective tointegrate withtheEuropean Union. Therepresentative
ofEstonia looked forward tothebeginning ofanactive negotiating process which should beconcluded
byEstonia ’saccession totheWTO intheverynearfuture.
5. MembersoftheWorkingPartywelcomedEstonia’sinitialapplicationforaccessiontotheGeneral
Agreementand,uponconclusionoftheUruguayRound,totheWTO.Solidgrowthandrisinginvestment
(Delete: “Solid growth andrising investment ”;Insert: “Theriseinexports andforeign direct
investment ”)wereindicative oftherelative success ofEstonia ’sliberal economic policies. Membership
intheWTO would offer Estonia theopportunity toconsolidate itssmall, open economy within a
multilateral framework. Thefree(Delete: “free”;insert: “liberal ”),openmarket principles adoptedWT/ACC/SPEC/EST/1
Page5
byEstonia would alsofacilitate itsassumption ofobligations andcommitments arising fromtheUruguay
Round. Several members accordingly expected theestablishment ofmarket access conditions forgoods
andservices toproceed smoothly andlooked forward tothesuccessful andtimely conclusion ofthe
tasks oftheWorking Party.
6. TheWorking Party reviewed theeconomic policies andforeign trade Regime ofEstonia and
thepossible terms ofadraftProtocol ofAccession totheWTO. Theviews expressed inthecourse
ofthedeliberations oftheWorking Party aresummarized below inparagraphs 5to83(Delete: “in
paragraphs 5to83”).
ECONOMIC POLICIES
Monetary andFiscal Policy
7. QuestionsbysomemembersoftheWorkingPartyfocusedonthetaxcomponentsofgovernment
revenue andthescope forraising revenue fromtaxes ontrade inEstonia inthelightofimportant free
trade agreements which covered alarge share ofEstonia 'sforeign trade.
8. Inresponse, therepresentative ofEstonia recalled thatasawaytoimprove thecompetitiveness
ofthedomestic industries atthepresent timeEstonia didnotapply import orexport duties. Hesaid
thatthemainsources ofgovernment revenue in1995weretheValue Added Tax(46.3 percent), income
taxes (31.8 percent), andexcise taxes (12.4 percent). Heconfirmed thatexemptions would onlybe
those accorded inthecontext offreetrade agreements asprovided forinArticle XXIV oftheGATT
1994 should Estonia apply import duties inthefuture. Estonia confirmed thatalltaxes including the
corporate income taxes wereapplied equally todomestic andforeign products andenterprises. Inthe
caseofamendments tothetaxregime inthefuture Estonia would continue tocomply withthenational
treatment principle. TheWorking Party tooknoteofthese commitments.
Foreign Exchange andPayments System
9. Some members oftheWorking Party requested up-to-date information onEstonia 'sforeign
exchange regime, i.e.thedetermination oftheexchange rate,convertibility, availability offoreign
exchange fortrade andpayments purposes, andtheretention offoreign currency.
10. (Insert: “Therepresentative ofEstonia confirmed thatasamember oftheInternational
Monetary Fund Estonia hasfollowed internationally accepted monetary rules. ”)TherepresentativeWT/ACC/SPEC/EST/1
Page6
ofEstonia replied (Delete: “Therepresentative ofEstonia replied ”;insert: “Healsosaid”)that
theBank ofEstonia guaranteed freeexchange within Estonia ofthekroon attheofficial rateaccording
tocurrent needs ofcustomers forconvertible currencies. Non-convertible currencies were obtained
atthecommercial banks. Thelastrestrictions oncurrent account transactions were lifted inMarch
1994. Capital account transactions wereunrestricted, butexports ofcashandsecurities weresubject
tocustoms regulations, andpurchase oflandbynon-residents required permission oftheGovernment
and(Delete: “theGovernment and”)thelocal authority. (Insert: “Thepurchase oflandbythe
foreign commercial undertaking required permission ofthelocalauthority andispermitted only
ifthebranch offoreign commercial undertaking isentered intheEstonian commercial register.
Thepermission isobtainable ifthepurchase oflandisnotincontradiction withthepublic interests
andsafety. Incertain areas thepurchase oflandbynon-residents wasprohibited. Inthese areas
thepurchase oflandrequired special permission oftheGovernment. ”)Since June1992, theEstonian
kroon hadbeenpegged against theDeutsche mark attheofficial rateof8kroon toDM1,witha
technical fluctuation limitof3percent.Thefixedexchange ratewasenshrined inthelawontheSecurity
oftheEstonian Kroon; adevaluation required approval byParliament.
Competition Policy
11. Some members oftheWorking Party requested adetailed description ofEstonia 'scompetition
policy, including theprovisions intheLawonCompetition which prohibits unfair trade practices and
theauthority oftheCompetition Board topermit agreements restricting competition.
12. Inresponse, therepresentative ofEstonia saidthattheCompetition Act(Delete: “Competition
Act”;insert: “LawonCompetition ”)of1993prohibited unfair tradepractices withspecific reference
tothefollowing sixtypes ofpractices:
(i) misleading advertising;
(ii) incorrect useofthedesignation ofafirm, trade mark orother attributes;
(iii) disparaging acompetitor orhisgoods;
(iv) abuse ofbusiness secret;
(v) using ofanemployee ofanother market participant in;(Delete: “in”;Add: “ifthat
influences himtoactintheinterest oftheinfluencer, ortheactual useofhimhelps
toobtain competition preferences; ”)
(vi) unlawful restricting orfavouring ofthesaleofgoods andservices.WT/ACC/SPEC/EST/1
Page7
Provisions concerning abuse ofdominant market position hadentered intoforce on1October
1993andagreements andconcerted practices restricting competition on1January 1994. TheEstonian
Competition Board wasestablished under theMinistry ofFinance inDecember 1993. Initsprocedural
wayofmaking decisions theBoard gavepriority totheinterest oftheconsumers. Supervision ofbanking
andinsurance wascarried outbyaseparate Statebody. Theterms ofinternational agreements ratified
byParliament prevailed overprovisions intheCompetition Actincases ofcontradiction. Upon entry
intoforce, theWTO Agreement would havethestatus ofaninternational agreement.
Pricing Policy
13. Some members oftheWorking Party requested information ontheprocess ofpriceliberalization
inEstonia andtheextent ofanyremaining controls onprices forgoods andservices. Estonia was
requested toprovide adescription ofexisting price controls; listtheaffected products byHStariff
linewithreference tothelegalprovisions under which controls wereapplied; provisions, ifany,for
border charges thatincrease import prices; andtheconditions under which theauthority tocontrol
prices wastobeexercised.
14. (Insert: “Therepresentative ofEstonia confirmed that, withtheexception oil-shale and
electricity prices, allprices arefreely determined bymarket forces. Theabove mentioned price
controls ofoil-shale andelectricity aresubject togradual decontrol programmes which would
have tobegin from approaching theworld prices ’level withproper regard oftheinterests of
Estonia ’selectricity consumers ontheonehand andtheinterests ofprospective investors onthe
other hand. Healsonoted thatreferring tothepresent producers asmonopolies isnotentirely
correct since there isnoprohibition foranybody tostart similar operations inEstonia oroffer
acompetitive solution fortheentire Estonian energy system reconstruction, including aprice
reform.”)TherepresentativeofEstoniarepliedthatpricesofmost(Delete:“most”;insert:“allother”)
goodsandserviceshadbeenderegulated.Pricecontrolsremainedinthedomainsof"naturalmonopolies",
i.e.(Delete: “domains of“natural monopolies ”,i.e.”)supply ofenergy, heating, oil-shale andto
some extent onurban transport. (Insert: “Thelegal basis ofprice control -thegradual movement
towards world price level-isregulated inthefollowing laws:
- Price Law, 1989 (ENSV Teataja 1989, 36,610;Riigi Teataja 1992, 30,400
Decree oftheMinistry ofEconomic Affairs No.7; May15,1996”).WT/ACC/SPEC/EST/1
Page8(Insert table)
Electricity prices inEstonia (Since June 1,1996)
Active energy Reactive energy
Consumer
groupPayment
variantsCapacity charge
EEK/kW
permonthConsumer charge
EEK/A permonth Main price
sent/KWhTime price sent/kWh consumption /kvarh releasing tothe
network sent/kvarh
day
07.00
-
12.00day
12.00
-
23-00night
I
Consumer
with
capacityAvoltage
in
connection
point51.00 - 27.6 31.2 29.6 19.4 3.8 7.6
400kW 110kV or
more30.4 30.4
ormore
peroneBvoltage
in
connection
point56.00 - 30.8 34.6 32.8 21.6 4.3 7.6
substation 6-35kV 33.7 33.7WT/ACC/SPEC/EST/1
Page9or
measuring
systemCvoltage
in
connection
point61.00 - 33.5 37.8 35.8 23.6 5.0 7.6
unit lessthan
6kV36.8 36.8
II
Consumer
with
capacity
belowAvoltage
in
connection
point less- 1-phase
2.50
3-phase37.7 42.6 40.4 24.7 5.0 7.6
400kW than6kV 7.50 41.5 41.5
perone
substation
or
distribu-
tion
unit.Bvoltage
in
connection
point less
than6kV- - 48.6 53.5 53.5 33.0 5.0 7.6
Atthe
choice of
the
consumer
either A,
B,orC.Cvoltage
in
connection
point
6-35kV- - 43.2 47.5 47.5 30.5 4.3 7.6WT/ACC/SPEC/EST/1
Page10III
Reseller- 7.00 C C+
2.0C+
2.00.61C 4.1 6.8
IVHouse-
holds- - 38.1/
45.038.1/
45.038.1/
45.018.6/
22.0- -
V
ConsumerA(1-phase) - 53.00 - - - - - -
without
measuringB(2-
phase)- 159.00 - - - - - -
VINight
consumers
consump-
tion
regulatorsAvoltage
in
connection
point 6kV
ormore- 3.00 - - - 19.3 4.3 7.6
100kW
ormoreBvoltage
in
connection
point
lessthan
6kV- 3.00 - - - 22.4 5.0 7.6
EEK=100 *sentWT/ACC/SPEC/EST/1
Page11
Oil-shale Prices inEstonia (Since June1,1996)
Quality class
MJ/kgPrice forastable
client
EEK/tPrice forclients
without contract
EEK/t
1. PK over11.51 68.93 98.43
2. 1PK over10.97 68.07 97.21
3. 2PK 10.26 -10.97 67.12 95.86
4. 3PK 9.59-10.25 66.27 94.65
5. 4PK 8.54-9.58 65.33 93.03
6. P over9.21 64.40 92.00
7. 1P over8.79 63.55 90.78
8. 2P 7.79-8.79 62.68 89.55
9. 3P 7.29-7.78 61.74 88.23
10. 4P 6.28-7.28 60.88 87.00
11. 5P 6.07-6.27 59.96 85.67
15. [Therepresentative ofEstonia confirmed thatprices ofgoods andservices inevery sector of
Estonia were determined freely bymarket forces withtheexception ofthose listed inparagraph 14
above. Headded that, except inthecase ofcritical situations, theexistence ofnatural or
government-sanctioned monopolies, ortheprotection ofconsumers, prices forgoods andservices would
notbesubject toStatecontrol. (Delete: “critical situations, theexistence ofnatural orgovernment
sanctioned monopolies, or”)Hefurther confirmed thatintheapplication ofsuchcontrols nowor
inthefuture, Estonia would apply suchmeasures inaWTO-consistent fashion, andtakeaccount of
theinterests ofexporting WTO members asprovided forinArticle III.9oftheGATT 1994. Estonia
would publish thelistofgoods andservices subject toState price controls intheofficial journal,
including anychanges from thelistinparagraph 14above. TheWorking Party tooknoteofthese
commitments.] (Delete square brackets)WT/ACC/SPEC/EST/1
Page12
Privatization
16. Some members oftheWorking Party requested details concerning progress inEstonia 's
privatization programme andplans toretain Stateownership inenterprises orsectors. Further questions
addressedrelationsbetweentheStateandcompanymanagement,theapplicationofcompetitionlegislation
toState-owned enterprises, bankruptcy ordissolution provisions inEstonian legislation andgeneral
orexclusive funds available forState-owned enterprises.
17. Therepresentative ofEstonia saidthatanenterprise wasconsidered privatized when themajority
share holding wasinprivate hands. According tothisdefinition allagricultural enterprises hadbeen
privatized byJanuary 1995, andabout 70percentofindustrial enterprises hadbeenprivatized byJuly
1995. (Insert: “ByAugust 1996over90percentoftheindustrial enterprises hadbeenprivatized ”)
Companies hadbeensoldineight (Delete: “eight”;insert: “eleven ”)tender rounds withsuccessful
bidders offering guarantees withregard toinvestment andemployment. Public offering ofshares began
inmid-1994; inapublic offerthemajority stake wassoldtoalocalorforeign "core" investor. Recent
privatization plans concerned (Delete: “plans concerned ”;insert: “concerns were”)air,maritime
andlandtransportation. (Insert: “State ownership would beretained inEstonian railways andpower
stations. Estonia 'ssoleoilshale mine, theelectricity distribution companies andtheservice
structures ofrailway depots weretobeprivatized .”)Some tenders hadonlybeenpublished inEstonia,
butforeign investment hadonlybeen restricted inthecaseofenterprises processing agricultural
commoditiesorofferingservicestofarmers.Thesecompanieswerenowownedbyfarmers'co-operative
societies. State ownership would beretained inEstonian railways andpower stations. Estonia 'ssole
oilshale mine, theelectricity distribution companies andtheservice structures ofrailway depots were
tobeprivatized. (Delete: “State ownership would beretained inEstonian railways andpower
stations. Estonia 'ssoleoilshale mine, theelectricity distribution companies andtheservice
structures ofrailway depots were tobeprivatized .”)
18. Inresponse toquestions concerning theappointment anddismissal ofthemanagement of
State-owned enterprises, therepresentative ofEstonia saidthattheadministrative council orboard and
themanagement ofaState-owned enterprise orjointstock company wasappointed inaccordance with
thecompany 'sby-laws orbytheresponsible Ministry. Theadministrative council orboard could dismiss
thegeneral director oftheenterprise; council orboard members were released bytheGovernment
ortheappointing Ministry. Theprovisions oftheCompetition Law, including itssanctions, applied
equally toprivate andState-owned enterprises. Since 1September 1995, theCivil Code andthe
Commercial Code contained procedures fortheliquidation ofenterprises. (Insert: “Therepresentative
ofEstonia confirmed thatstate owned enterprises actonpurely commercial basis andthattheirWT/ACC/SPEC/EST/1
Page13
directors arenotgovernment employees. Healsostated thatpurchases bythestate enterprises
cannotbeconsidered asgovernment procurement. These stateenterprises cannottobeconsidered
tobeinstate trading activities because theydidnotenjoy anyexclusive orspecial privileges in
thesense ofArticle XVII ofGATT 1994. They were notsubject toanycontrol bygovernment,
nortoGovernment directives inrelation totheir operations. their operations were notfunded
bythestate budget. Therepresentative ofEstonia assured thatthenational trade policy and
practices under theregular trade policy reviews intheWTO would betransparent. ”)
19. State-owned andprivate enterprises hadequal access tomovement funds, i.e.theExport Credit
Fund, theFund ofCrediting Agriculture andRural Life,theFund ofCrediting Small Enterprises and
theInnovation Fund.
(Insert newheading: Commercial Code)
(Insert paragraph 23)
Investment regime
20. Some members oftheWorking Party sought information onEstonia 'sstrategies inattracting
foreign investment andrestrictions orconditions attached toinvestment.
21. Therepresentative ofEstonia replied thatnospecific promotion programmes wereenvisaged;
investments wereencouraged through anopen, non-restrictive regime. TheGovernment hadestablished
aForeignInvestmentAgencyin1994,providingvariousservicestoforeigninvestors,andhadconcluded
bilateral agreements oninvestment promotion andprotection withthefollowing countries: Austria,
Belgium, China, Czech Republic, Denmark, Finland, France, Germany, Israel, Latvia, Lithuania,
Netherlands, Norway, Poland, Sweden, Switzerland, Ukraine, United Kingdom, United States. -He
added thattheprocedures forregistration ofcompanies inEstonia distinguished between domestic and
foreign investment inonlysixareas namely, mining; power engineering, gasandwater supply;
administration ofwaterways, ports, dams andsimilar structures; railways andairtransport;
telecommunication andcommunication network; andretail tradeinmedicines; where foreign investors
would needa"Foreign Investment Licence" fromtheMinistry ofFinance while a"Licence ofActivity"
wasrequired fordomestic investors. Thelicences carried thesame rights, theprocedural difference
being theissuing authority. (Insert: “Thecriteria fordetermining whether ornottogrant thetwo
typesoflicensearethesame.”)WhenStateenterprisesweresoldagainstprivatizationvouchersmajority
stakes wereoffered to"core" investors (Insert: “i.e.majority share holders ”)(domestic orforeign)
whowereselected byanopenbid.Inpurchasing State-owned enterprises investors (domestic orforeign)WT/ACC/SPEC/EST/1
Page14
might undertake specific commitments withregard totheamount ofcapital tobeinvested andminimum
workforce ("performance guarantee"). TheContract Control Department oftheEstonian Privatization
Agency checked thecompliance withagreed conditions. Theperformance guarantee didnotextend
tolocalcontent orexport requirements.
22. Therepresentative ofEstonia confirmed thatEstonia applied national treatment withrespect
totaxation. Theincome taxlawallowed losses tobecarried forward uptofiveyears. Revenue could
berepatriated freely.
(Insert newheading: “FRAMEWORK FOR MAKING POLICIES AFFECTING TRADE ”)
(Insert newparagraph: “Therepresentative ofEstonia stated thattheactivities oftheRiigikogu
(TheParliament ofEstonia), thePresident oftheRepublic, theGovernment oftheRepublic, and
thecourts arecarried outinalinewith theprinciple ofseparation andbalance ofpowers.
Legislative power isvested intheRiigikogu. Executive power isvested intheGovernment ofthe
Republic. Justice isadministered solely bythecourts. Thecourts areindependent intheiractivities
andtheyadminister justice inaccordance withtheConstitution andthelaws. Themain government
entities responsible formaking andimplementing policies affecting foreign trade areMinistry
ofEconomic Affairs, Ministry ofForeign Affairs, Ministry ofFinance, Ministry ofAgriculture
andMinistry ofTransport andCommunications. Alllocal issues areresolved andmanaged by
local governments, which operate independently. Theunits oflocal government arerural
municipalities andtowns. Therepresentative body oflocal government isthecouncil, which is
elected infreeelections foraterm ofthree years. ”)
FOREIGN TRADE REGIME (Delete. FOREIGN TRADE REGIME)
(INSERT: POLICIES AFFECTING TRADE INGOODS)
Registration (Delete: Registration)
(Insert paragraph 23after paragraph 19)
23. Therepresentative ofEstonia saidthatfrom 1September 1995, theCommercial Code had
replaced theEnterprise Law. TheCommercial Code defined fivetypes ofbusiness association (general
partnership, limited partnership, limited liability company, joint stock company andco-operative
association) andtheIndividual Private Entrepreneur, andstipulated procedures foropening aforeign
company 'sbranch office inEstonia. TheCommercial Registry wastobekeptbylocal citycourts.
Enterprises setupunder previous legislation, notmeeting therequirements ofthenewCode, wouldWT/ACC/SPEC/EST/1
Page15
needtoberestructured orterminated by1September 1997. Stricter mandatory capital requirements
wouldapplyfrom1September1999.(Insert:“TheCommercialCodedoesnotcontainanyprovisions
which would beinconsistent withnational treatment principle. ”)
1.Import Regulation
Market Access Negotiations
24. Intheinterest ofaccelerating theprocess ofaccession totheWTO Agreement, therepresentative
ofEstoniasubmittedEstonia'sdraftscheduleofspecificcommitmentsintradeandinservices(WT/L/59)
(Delete: “andinservices ”)andtheinitial offerformarket access negotiations ongoods (WT/L/60)
which werecirculated toWTO Members inApril 1995. Estonia 'sinitial offerforthemarket access
negotiations proposed bound m.f.n. ratesinagriculture intheorder of50percentandinsome cases
alower advalorem ratewithaspecific supplement. Bound m.f.n. rates intheinitial offer for
manufactured goods ranged fromfreeto29percent.Theinitial offerwaspresented attheHSfour-digit
levelforagricultural products andatthetwo-digit levelformanufactures. Estonia submitted aRevised
GeneralOfferforMarketAccessNegotiationsonGoods(WT/ACC/EST/3)andaRevisedDraftSchedule
ofSpecificCommitmentsinTradeinServices(WT/ACC/EST/6)(Delete:andaRevisedDraftSchedule
ofSpecific Commitments inTrade inServices (WT/ACC/EST/6)) inAugust 1995. Themarket access
schedules ofEstonia ongoods andservices (Delete: andservices) areannexed totheProtocol of
Accession ofEstonia which isreproduced intheAppendix tothisReport. Asindicated intheconclusions
ofthisReport, theWorking Party tooknoteofEstonia 'smarket access commitments andtheservices
commitments ofEstonia. (Delete: andtheservices commitments ofEstonia)
Customs Duties andCharges (Delete heading: “Customs Duties andCharges ”)
(Insert newheading: “Customs Tariff ”)
25. Noting thatthecurrent absence ofacustoms tariff demonstrated Estonia 'sfreetrade
determination, some members oftheWorking Party commended thesuccessful andeffective outcome
ofEstonia 'sfreetradepolicies. Expressing thehopethatEstonia would continue topursue thesepolicies,
thesemembersrequestedinformationabouttheimpositionofcustomsdutiesandotherchargesinEstonia,
criteria forapplication ofzeroandnon-zero rates, andEstonia 'sfuture intentions inthisarea,particularly
inthelightofitsmarket access offeringoods. Some members oftheWorking Party noted thatEstonia
hadapplied anadvalorem taxtocustoms clearance operations andwondered whether therevised fee
wascommensurate withtheapproximate costsoftheservices rendered asprovided forinArticle VIII
oftheGATT 1994. (Delete: “Some members oftheWorking Party noted thatEstonia hadapplied
anadvalorem taxtocustoms clearance operations andwondered whether therevised feewasWT/ACC/SPEC/EST/1
Page16
commensurate withtheapproximate costs oftheservices rendered asprovided forinArticle VIII
oftheGATT 1994. ”)
26. TherepresentativeofEstoniareaffirmedthefreetradeorientationofhiscountrynoting,however,
thatEstonia would reserve therighttoimpose customs duties when economic circumstances sowarrant.
According totheLawonCustoms Tariffs inpreparation, zeroduties would beapplied torawmaterials
forthedomestic industry andproducts withnoorinsufficient domestic production. Thelawallowed
imposition ofspecific duties andmixed duties, theapplied ratesofdutyweretobedetermined bythe
Government. (Delete: theapplied rates ofdutywere tobedetermined bytheGovernment. ”)At
thepresent time, Estonia hadzeroduties onallitems except certain furs,furproducts, yachts andwater
skisonimportation (andobjects ofcultural value onexportation).
27. Therepresentative ofEstonia added thatcustoms duties hadnotbeenrequired sofarsinceprices
oflocalresources hadyettoreach theapproximate international level. Aceiling tariff binding would
offerEstonia thesameregulatory opportunities inexternal tradeasitsmaintrading partners. Therefore,
Estonia would prefer tobinditstariffs atlevels comparable totheaverage dutylevels prevailing in
WTO Members inlinewiththeagreements andcommitments onmarket access achieved intheUruguay
Round. (Insert: “Duties andcharges other thantheordinary customs duties arebound atzero.
TheEstonia ’stariff schedule isprovided inAnnex. ”)
(Insert newheading: “FeesandCharges forService Rendered ”)
(Insert newparagraph: “Some members oftheWorking Party noted thatEstonia hadapplied
anadvalorem taxtocustoms clearance operations andwondered whether therevised feewas
commensurate withtheapproximate costsoftheservices rendered asprovided forinArticle VIII
oftheGATT 1994. ”)
28. Therepresentative ofEstonia informed theWorking Party that,inthefirsthalfof1995, the
0.5percentcustoms procedure taxhadbeenreplaced byaflatEEK200feepercustoms declaration.
(Insert: “Therepresentative ofEstonia confirmed thatthecustoms declaration feeistheonly
feeorcharge forservices rendered subject toGATT Article VIIIwhich iscurrently inforce. ”)
Thefeewascollected bytheNational Customs Board asaprocedure feecovering customs formalities.
(Insert newparagraph number) Heassured theWorking Party thatthisfee,which represented the
approximate costoftheservices rendered, wasfullyconsistent withtheprovisions ofArticle VIIIof
theGATT 1994. After accession, Estonia would notreintroduce anadvalorem customs fee.(Insert:
“Therepresentative ofEstonia confirmed thatafter accession thecustoms declaration feewouldWT/ACC/SPEC/EST/1
Page17
betheonlyfeeorcharge forservices rendered andthatitwould beinconformity withWTO
obligations, inparticular Articles VIIIandXofGATT 1994. ”)[TheWorking Party tooknoteof
these commitments. ](Delete square brackets)
Excise Taxes (Delete heading: “Excise taxes”)
(Insert newheading: “Application ofinternal taxes onimports ”)
29. SomemembersoftheWorkingPartynotedthattheexcisetaxesforcertaindomesticandimported
tobacco products andalcoholic beverages weredifferent. These members requested Estonia tophase
outallmeasuresinconsistentwithGATT1994ArticleIII.Somemembersalsoquestionedtheconformity
ofEstonia 'sexcise taxonautomobiles withArticles II,VIIandVIIIoftheGATT 1994andtheWTO
Agreement onCustoms Valuation andrequested details about thenewtaxregime.
30. Therepresentative ofEstonia described theratesofexcise taxapplied in1996 ontobacco,
petroleum products, alcohol andmotor vehicles (Table 1).These taxlevels wereconsidered optimal
andnoreductions wereforeseen uponaccession totheWTO. Estonia confirmed thatthedifferent excise
taxrateslevied ondomestic andimported tobacco products andspirits hadbeendesigned toprotect
localproducers. Fortobacco products, theexcise rateswereequalized on1January 1996bybringing
taxesondomestic products uptothelevelapplied toimports. According tothe(Insert: “amendments
tothe”)LawonAlcohol Excise Tax,theratesondomestic andimported beerwould beequalized
on1July(Delete: “July”;Insert: “December ”)1996. (Insert: “Asaregional development measure
adistinction oftheexcise ratewasintroduced tosmall scale producers. Thelower excise rate
isavailable totheproducers whose annual production doesnotexceed 300thousand dekalitres.
These small scale producers cover only9%oftheEstonian domestic beermarket “)Anexcise
dutyof16percentonfursandfurproducts hadonlybeenlevied ondomestic producers. Atpresent
thistaxwaseliminated.WT/ACC/SPEC/EST/1
Page18
(Insert newreproduction ofTable 1)
Table 1
Excise Duties inEstonia
Excise taxratesonalcohol
Taxable product
TheNomenclatureHeading, subheading
ofEstonian goodsTaxrate
1.Sparkling wines andother wines offresh
grapes withanalcoholic content byvolume up
to15%2204 10110-2204 21840
2204 29120-2204 29840
ex2205 10101-2205 10109
ex2205 90101-2205 9010910.40*
-unbottled wines offresh grapes ex2204 29120-2204 29990
ex2205 90101-2205 901098.00*
2.Sparkling wines andother wines offresh
grapes withanalcoholic content byvolume
exceeding 15%2204 21870-2204 21990
ex2204 29100
2204 29870-2204 29990
ex2205 10101-2205 10109
2205 10901-2205 10909
ex2205 90101-2205 90109
2205 90901-2205 9090915.60*
-unbottled wines offresh grapes 2204 29870-2204 29990
ex2205 90101-2205 90109
ex2205 90901-2205 9090912.50*
3. Other fermented drinks (e.g.cider,
berry, wineetc.)andtheirblends:2206 00100-2206 00510
2206 005914.90*
1)withanalcoholic content byvolume
upto15%vol.2206 00810
2206 008914.90*
2)withanalcoholic content byvolume
exceeding 15%vol.2206 00592
2206 008926.50*WT/ACC/SPEC/EST/1
Page19
Taxable product
TheNomenclatureHeading, subheading
ofEstonian goodsTaxrate
4. Other alcohol ex2207 10000
2208
2106 90200
3302 101001.15**
5. Rectified spirits produced inEstonia,
usedinmedicine, pharmaceutics, veterinary
medicine forscientific andstudy purposes, the
production ofperfumeryex2207 10000
ex2208 90910
ex2208 909900.20**
*perlitre
**perone%vol. ofabsolute alcohol alitre
Excise taxonbeer HS from Dec1,1996 from Dec1,1996
1)withanalcoholic content by
volume upto4.7%vol.incase
ofannual production inthousands
ofdekalitres:
upto300(incl.)
over3002203 00019
2203 00099
2203 00909
1.50*
2.00*2.00*
2.50
2)withanalcoholic content by
volume exceeding 4.7%vol.in
caseofannual production in
thousands ofdekalitres:
upto300(incl.)
over3002203 00011
2203 00091
2203 00901
2.00*
2.50*2.50*
3.00*
5. Imported beer:
1)withanalcoholic content by
volume upto4.7%vol.2203 00019
2203 00099
2203 009096.00* After December
1,1996 noseparate
excise taxexists on
imported beer. BothWT/ACC/SPEC/EST/1
Page20
Excise taxonbeer HS from Dec1,1996 from Dec1,1996
2)withanalcoholic content by
volume exceeding 4.7%vol.2203 00001
2203 00091
2203 009019.00* domestic and
imported beerwill
becovered bythe
same excise rate
*perlitre
Motor Fuel
Taxable product HS Taxrate
1.Petrol 2710 00271,2710 00272
2710 00290,2710 00320
2710 00341,2710 00342
2710 00343,2710 003441.20EEK perlitre
2.Diesel Oil 2710 00691 0.75EEK perlitre
3.Aviation petrol andgasoline 2710 00510,2710 00260
2710 003701.50EEK perlitre
4.Liquid gasusedasmotor fuel 2711 12940,2711 12960
2711 12980,2711 13910
2711 13930,2711 139800.75EEK perlitre
5.Compressed gasusedasmotor fuel 2711 21000 0.75EEK perm3
6.Motor oil 2710 00871 0.15EEK perlitre
Tobacco products
Filtered cigarettes 2402 20 3*
Unfiltered cigarettes 2402 20 3*
Russian cigarettes 2402 20 3*
Cigarillos 2402 10001 3*
Cigars 2402 10009 3**
Smoking tobacco 2403 10 3***WT/ACC/SPEC/EST/1
Page21
Tobacco products
Snuff 2403 99100 3***
Chewing tobacco 2403 99100 3***
Other tobacco products 2402 90000,2403 99900 3***
* applies toupto20cigarettes orcigarillos; apackage containing 21-40cigarettes orcigarillos
ismarked withtworevenue stamps etc.
** applies toonecigar
*** applies toupto50grams ofatobacco product; apackage containing 51-100grams ofatobacco
product ismarked withtworevenue stamps etc.
Motor vehicles
1.Excise taxbased onthecylinder capacity ofmotor vehicles
Description oftheMotor Vehicle HS EEK/cc
Motor carsandother motor vehicles principally designed forthe
transport ofpersons (other thanthose ofheading No.8702), including
station wagons andracing cars:8703
Motor vehicles specially designed fortravelling onsnow; golfcarsand
similar vehicles70310 1
Other vehicles, withspark-ignition internal combustion reciprocating
piston engine:
Ofacylinder capacity notexceeding 1,000 cc 8703 21 1
Ofacylinder capacity exceeding 1,000 ccbutnotexceeding 1,500 cc 8703 22 1
Ofacylinder capacity exceeding 1,500 ccbutnotexceeding 3,000 cc 8703 23 1
Ofacylinder capacity exceeding 3,000 cc 8703 24 3
Other vehicles withcompression-ignition internal combustion piston
engine (diesel orsemi-diesel):1
Ofacylinder capacity notexceeding 1,500 cc 8703 31 1
Ofacylinder capacity exceeding 1,500 ccbutnotexceeding 2,500 cc 8703 32 1
Ofacylinder capacity exceeding 2,500 cc 8703 33 1WT/ACC/SPEC/EST/1
Page22
Description oftheMotor Vehicle HS EEK/cc
Motorcycles (including mopeds) andcycles fitted withanauxiliary
motor, withorwithout side-cars; side-cars (except those specified in
subheading 8711 90)8711 1
2.Excise taxbased ontheageofthemotor vehicle
Used motor vehicle
ofupto12years ofage 100EEK/year
from 13years ofage 150EEK/year
3.Excise taxonnewmotor vehicle
Newmotor vehicle, irrespective ofage 1000 EEK
31. Concerning thetaxation ofautomobiles, therepresentative ofEstonia referred totheLawon
Motor Vehicle Excise Tax,inforce since 1April 1995, replacing a10percentimport taxwhich had
beenlevied inaccordance withoriginal invoices forlegalpersons andavaluation listfornatural persons
inorder toavoid fraud. Thenewsystem taxed vehicles infixed amounts according tovehicle ageand
engine cylinder capacity. Theexcise taxonmotor vehicles wasconsistent withgeneral principles of
imposing excise tax.
(Insert: “Automobiles payexcise taxbased bothoncylinder capacity andage.Inorder toexplain
howexcise duties onautomobiles arecalculated, thefollowing example wasprovided:
Ausedautomobile, cylinder capacity 2000cm3, age10years andprice according tothepurchase
documents is10000EEK:
10000-price according tothepurchase documents
2000-excise taxonthebasis ofthecylinder capacity
1000-excise taxonthebasis ofage
-------------------------------------------------------------------------------
13000
2340-VAT (18% from 13000)
------------------------------------------------------------------------------
15340-price forimporter after importation ”)WT/ACC/SPEC/EST/1
Page23
32. TheLawonStamp Duty prescribed revenue stamps, issued against payment oftaxes bythe
National TaxBoard atnoextracharge, forgoods subject toexcises, atpresent affecting onlyimported
anddomestically produced tobacco products.
Value Added Tax(VAT)
33. Some members ofWorking Party requested information ontheapplication ofvalue-added tax,
including product anduser-specific exemptions andequal treatment forimported anddomestic products.
Questions were alsoraised regarding thecalculation ofVAT onmotor vehicles.
34. Therepresentative ofEstonia saidthatthevalue-added taxata18percentratewasapplied
equally todomestic goods andtoallimports regardless ofcountry oforigin. VAT onmotor vehicles
imported bynatural persons hadbeenbased onastandard valuation listuntiltheexcise taxsystem
waschanged on1April 1995. Headded thatthefollowing goods andservices wereexempt fromVAT:
education andadvanced training, postal services, medical services, banking andinsurance, funerals,
gambling andlotteries, rents, medical equipment, treatment ofdangerous waste andsince February
1995reusable packaging andmunicipal sauna services. Exports, subscriptions toperiodicals published
andprinted inEstonia, andtheatre tickets hadaVAT zerorate.Certain legalentities (turnover below
EEK 130,000 (Delete: “130,000 ”;insert: “250,000 ”))were notregistered asobligatory payers of
VAT. Theturnover ofgoods suchasmedicines, medical goods, medical treatment equipment andlottery
tickets wastaxfreeandimports fornon-profit purposes weretaxexempt. Imports required forofficial
purposes offoreign representations anddiplomats werenotsubject toVATprovided theforeign country
granted thesame righttoEstonia 'srepresentations abroad.
(Insert newparagraph: “Therepresentative ofEstonia confirmed that,asofthedateofaccession
theonlydomestic taxes applied toimports would beexcise taxes andVAT. Hefurther stated that,
from thedateofaccession, anyapplication toimports ofdomestic taxes orother internal charges
ofanykindwould beinaccordance withtheprovisions oftheWTO. theWorking Party took
noteofthese commitments. ”)
Customs Valuation
35. Some members oftheWorking Party asked about thestatus oftheCustoms Valuation Law
anditscontent. Relating therequest forinformation toEstonia 'simplementation oftheWTO AgreementWT/ACC/SPEC/EST/1
Page24
ontheImplementation ofArticle VIIoftheGATT 1994, these members enquired whether Estonia 's
Lawwasfullyconsistent withtheWTO Agreement.
36. Therepresentative ofEstonia explained thattheCustoms Valuation Lawhadbeenadopted
on8February 1995 andhadentered intoforce on1January 1996. Thedelay hadbeennecessary to
undertake preparatory workforitsimplementation, including practical arrangements suchastheprinting
ofdocuments, thetraining ofcustoms officers, informing traders, etc.Estonia considered thattheLaw
wasinfullconformity withtheWTO Agreement ontheImplementation ofArticle VIIoftheGATT
1994. Estonia 'sresponse tothequestionnaire on"Information onImplementation andAdministration
oftheAgreement" wassubmitted inAugust 1995 (document WT/ACC/EST/5).
37. Therepresentative ofEstonia confirmed thatEstonia nolonger used(Delete: “nolonger used”;
insert: ”doesnotuse”)anyform ofreference price orfixed valuation schedule forthevaluation of
imports ortoapply duties andtaxes, andthatallmethods ofvaluation usedwereinstrict conformity
withthose provided forintheWTO Agreement ontheImplementation ofArticle VIIofGATT 1994.
Headded thatEstonia intended toimplement Decision 4.1.oftheCustoms Valuation Committee
concerning thevaluation ofcarrier media bearing software fordataprocessing equipment (theSoftware
Decision) by[date). (TheWorking Party tooknoteofthese commitments.) (Delete: “Headded that
Estonia intended toimplement Decision 4.1.oftheCustoms Valuation Committee concerning
thevaluation ofcarrier media bearing software fordataprocessing equipment (theSoftware
Decision) by[date). (The Working Party tooknoteofthese commitments. ”)
(Insert newparagraph: TheRepresentative ofEstonia stated thatfrom thedateofitsaccession
Estonia would notuseanyform ofreference price orfixed valuation schedule toestablish the
value forcustoms purposes ofimports andexports. Estonia ’scustoms valuation legislation and
practice would beinfullconformity withtherelevant provisions ofGATT 1994, including Article
VIIandtheAgreement ontheImplementation ofArticle VII,from thedateofitsaccession to
WTO. Estonia would implement Decision 4.1.of theCustoms Valuation Committee concerning
thevaluation ofcarrier media bearing software fordataprocessing equipment from thedateof
itsaccession. Working Party tooknoteofthese commitments.)
(Insert newparagraph: “Therepresentative ofEstonia confirmed thatother customs formalities
areapplied inaccordance with internationally accepted rules andarebased ontheKyoto
Convention. HealsosaidthatEstonia isthemember oftheWorld Customs Organization since
June 1992. ”)WT/ACC/SPEC/EST/1
Page25
Non-Tariff Measures (Delete heading: “Non-Tariff Measures ”)
(Insert newheading: “Quantitative import restrictions, including prohibitions, quotas andlicensing
systems ”)
38. SomemembersoftheWorkingPartysoughtinformationaboutthescopeof"licencesofactivity”
andrelated requirements; licensing arrangements fortrade inmetals, spirits, tobacco andtobacco
products, medicaments, weapons, ammunition, andexplosives; andtheuseofquantitative restrictions.
Some members expressed theconcern thatunder certain circumstances theconditions ofsaleofimported
products could beaffected inamanner notconsistent withArticle IIIoftheGATT 1994, forinstance,
trade inalcohol andtobacco required prior declaration.
(Insert newparagraph: “Therepresentative ofEstonia confirmed thatnoquotas, licenses, prior
permitsorotherrequirementsormeasuresthatactasquantitativerestrictionsonimportsorexports
areapplied. Norarethebalance ofpayments measures envisaged atthisstage. ”)
(Insert newparagraph: “Therepresentative ofEstonia confirmed that,from thedateofaccession,
Estoniawouldnotintroduce,re-introduceorapplyquantitativerestrictionsonimportsornon-tariff
measures suchaslicensing, quotas, bansandother restrictions having equivalent effect thatcannot
bejustified under theprovisions oftheWTO Agreement. Ifbalance-of-payment measures were
evernecessary inthefuture, Estonia would impose them inamanner consistent withtherelevant
WTO provisions, including Article XII ofGATT 1994 and theUnderstanding on
Balance-of-Payments provisions ofGATT 1994. The Working Party took note ofthese
commitments. ”)
39. TherepresentativeofEstoniasaidthatlicensingwasnotappliedtorestrictimports,theproduction
orthewholesale ofanyproduct. The"prior declaration" requirement simply implied thatallcustoms
procedures andformalities needed tobecompleted before goods could cross theborder.
40.Indocument WT/ACC/EST/9 (Annex II),therepresentative ofEstonia provided theinformation
onimport licensing procedures according totheformat applicable toWTO Members. Hestressed that
general government policy wastomaintain thefree-(Delete: “free-“;insert: “liberal ”)market economy
andtoreduce theareas ofactivity subject tolicensing. Henoted thatEstonia considered thelicensing
arrangements tobeconsistent withtheWTO Import Licensing Agreement. Initssubmission, Estonia
listed 41economic activities inwhich operators needed a"Licence ofActivity" forproduction and/or
trade, valid formaximum fiveyears, andthecorresponding regulatory authority (Table 2).Among
thejustifications listed weresafety (e.g.medicaments); atechnological leveladequate tocomply withWT/ACC/SPEC/EST/1
Page26
compulsory standards (e.g.alcoholic beverages); registration requirements toprevent threats tosecurity
andtheenvironment (e.g.firearms andvehicles); andregistration andaccounting requirements for
taxpurposes (alcoholic beverages, tobacco, metals, etc.). Thecriteria forissuing oflicences were
published intheOfficial Journal "Riigi Teataja" (Legal ActsofEstonia). Thenumber oflicences was
notrestricted. Licences weregranted tonational andforeign operators under equal conditions. (Insert:
”Criteria forengaging inimport andexport trade ineachoftherestricted sectors arethesame
asthecriteria forengaging indomestic trade inthesector concerned. ”)
Table 2
Activities subject tolicensing (Activity Licence) inEstonia
Activity Issuing Authority
1. Management ofaviation andseatransport (exclude small
private boats),international carandrailway transport
(excludes intra-enterprise railtransport)Ministry ofTransport and
Communications
2. Geology-related activities, mining ofnatural resources Ministry ofEconomic Affairs
3. Production andtrade inobjects containing precious metals
andprecious stonesMinistry ofFinance
4. Production, possession andtrade inweapons, parts thereof,
ammunition, orpyrotechnic equipment; repairs ofweaponsMinistry ofInternal Affairs
5. Production andtrade inmedical narcotic, highly toxic,
radioactive, andpoisonous substances. Growing plants that
contain narcotic, highly toxic andpoisonous substances
Purchase andpossessing ofmedical narcotic, highly toxic,
radioactive, andpoisonous substancesMinistry ofSocial Affairs
6. Allforms ofmedical treatment Ministry ofSocial Affairs
7. Production ofandtrade inmedicines Ministry ofSocial Affairs
8. Import andexports wellasproduction andwholesale of
tobacco andproduction thereof, andalcohol; andretail of
alcoholMinistry ofEconomic Affairs;
Municipal Governments
9. Printing andminting ofmoney Bank ofEstonia
10. Printing ofsecurities Ministry ofFinance
11. Printing ofpostage stamps Ministry ofTransport and
CommunicationsWT/ACC/SPEC/EST/1
Page27
12. Building andmanagement ofpublic communications '
networks ofanykindMinistry ofTransport and
13. Management ofaneducational institution ofahigher or
general level, bothvocational, orprofessional; together
withtherighttoissue nation wideaccepted certificates of
educationMinistry ofCulture and
Education
14. Management ofsecurity services 'firms, installation of
security, guard, andsignalization systemsMinistry ofInternal Affairs
15. Opening andmanagement ofprivate detective agencies Ministry ofInternal Affairs
16. Collation ofmeasuring instruments Ministry ofFinance
17. Production andtrade inmicro-organisms, plants, and
animals created bygenetic engineeringMinistry ofAgriculture
18. Insurance Ministry ofFinance
19. Projecting, expertise andinspection ofbuildings,
construction contracting activitiesMinistry ofEnvironment;
Ministry ofAgriculture
20. Geodetic andcartographic activities Ministry ofEnvironment
(Delete: “Ministry of
Environment ”;insert:
“Ministry ofAgriculture ”)
21. Ecological expertise Ministry ofTransport and
Communications (Delete:
“Ministry ofTransport and
Communications ”;insert:
“Ministry ofEnvironment ”)
22. Management ofenvironmentally harmful substances Ministry ofTransport and
Communication (Delete:
“Ministry ofTransport and
Communication ”;insert:
“Ministry ofEnvironment ”)
23. Transmission orbroadcasting ofradio andtelevision
programmes bymeans oftheradio andtelevision networksMinistry ofCulture and
Education
24. Management ofcasinos (gambling) Ministry ofFinance
25. Reproduction oftheState symbols ortheirparts ofthe
Republic ofEstoniaState Chancellery
26. Exchange management Ministry ofFinanceWT/ACC/SPEC/EST/1
Page28
27. Tourism Ministry ofEconomic Affairs
28. Ships'agencies andorganizing seatransport Ministry ofTransport
29. Lotteries Ministry ofTransport and
Communications
30. Assessment oflandproperty, selling andbuying land Ministry ofAgriculture
31. Activities onthesecurities 'market Ministry ofFinance
32. Veterinary activities, veterinary practice Ministry ofAgriculture
33. Temporary storage ofcommercial goods, customs-storage
proceduresMinistry ofFinance
34. Commercial trade (imports, re-exports),wholesale and
retail, andstorage ofimported fuelsandlubricantsMinistry ofEconomic Affairs
35. Production andrepairs ofweapons, ammunition, and
technology fornational defence purposesMinistry ofDefence
36. Experiments withanimals Ministry ofAgriculture
37. Management ofimports andexports, aswellasother
trade, services, repairs, anddissembling ofmotor vehicles
andtrailersMinistry ofEconomic Affairs
38. Assessment ofpersonal protective equipment types, quality
certification; assessment ofmachinery andequipment typesNational Labour Inspection
Board
39. Logopedical aid Ministry ofSocial Affairs
40. Conservation, restoration, creating ofrepairs projects, and
carrying outthecorresponding activities ontheobjects of
cultural importance (theobjects ofarchaeological,
architectural, technological, andhistorical value, objects of
finearts)Ministry ofCulture and
Education
41. Classification ofgoods andmeasuring ofgoods for
customs 'purposesMinistry ofFinance
41. Therepresentative ofEstonia explained thatEstonia intended toestablish ageneral framework
forlicensing which would ensure conformity withWTO provisions andallow harmonization with
European Union legislation. Activity licences hadsofarbeenestablished under different regulations;
anewLicensing Actwould beelaborated by1997toregulate activity licences. Nofurther areas would
besubject tolicensing while thenewlawwasinpreparation.WT/ACC/SPEC/EST/1
Page29
42. [TherepresentativeofEstoniastatedthattheimportationofproductssubjecttoactivitylicences
weresubjectonlytorequirementsconsistentwiththeWTOAgreement.Heconfirmedthatnorestrictions
existed ontherightofforeign anddomestic individuals andenterprises toimport andexport goods
andservices within Estonia 'scustoms territory[, withtheexception ofthose specifically listed inTable
2,)andthatthecriteria forengaging inimport andexport tradeintherestricted sectors wereconsistent
withgenerally applicable restrictions placed ontradeinsimilar domestically produced goods andbased
oncriteria thatwere published intheOfficial Journal.] (Delete square brackets)
(Insert newparagraph: “Therepresentative ofEstonia confirmed thatactivity licensing relating
totrade ingoods iscarried outfully inlinewith theWTO Agreements, including with the
Agreement onImport Licensing Procedures andArticle VIIIoftheGATT 1994. ”)
Rules ofOrigin
43. Some members oftheWorking Party requested information about theelaboration ofrules
oforigin inEstonia whether inthecontext offreetrade agreements orotherwise.
Therepresentative ofEstonia saidthatthedrafting ofrulesoforigin wasacontinuous process
andwasdeveloping inaccordance tothedevelopments intheframe ofthework oftheTechnical
Committee onRules ofOrigin oftheWTO. Duetotheextremely (Delete: “extremely ”)liberal foreign
traderegime theuseofnational rulesoforigin wasnotessential (Delete: “wasnotessential ”;insert:
“hasnotconsidered tobeessential ”).Theagreed rulesoforigin wereusedintheframe offreetrade
agreements. TheEstonian authorities hadforeseen theelaboration ofalawonrules oforigin bythe
endof1995(Delete: “bytheendofthe1995) along thelinesofexisting rulesoforigin inpreferential
tradeagreements andthesuggestions anddecisions oftheCommittee onRules ofOrigin oftheWorld
Customs Organization andtheWTO Agreement onRules ofOrigin. (Insert: “Therepresentative
ofEstonia informed thatEstonia hasunified therules oforigin intheframework ofdiagonal
cumulative origin system between thecountries ofEuropean Economic Area, Switzerland and
tenassociated Central andEastern European Countries. ”)Members oftheWorking Party were
supplied copies oftherulesoforigin ofEstonia 'sfreetradeagreements withEFTA countries (Norway
andSwitzerland); theEuropean Union, theUkraine andthetrilateral free-trade agreement withLatvia
andLithuania.
Anti-Dumping, Countervailing Duties, Safeguards andBalance ofPayments Measures (Delete:
“andBalance-of-Payment Measures ”)WT/ACC/SPEC/EST/1
Page30
45. Some members oftheWorking Party noted thatEstonia appeared nottohaveanyspecific
anti-dumping legislation, butthatanAnti-dumping Law, including countervailing duties procedures,
wasinpreparation. Inviewoftheuncertainty regarding thedateofentry intoforce ofsuchalawand
itscontent, Estonia wasasked tosubmit draftlegislation forcomment tomembers oftheWorking
Party.
46. Therepresentative ofEstonia saidthatnotextoftheAnti-Dumping Lawexisted yet,but
ensured (Delete: ”ensured ”;insert: “assured ”)theWorking Party thattheAnti-Dumping Lawwould
bedrafted inlinewithArticle VIoftheGATT 1994. Healsoclarified thatwhile price dumping was
mentioned among abuses ofdominant position inChapter III,Article 17oftheCompetition Act,the
listed unfair trade practices intheActdidnotoverlap withthepending anti-dumping statute.
47. Therepresentative ofEstonia saidthatintheelaboration oflegislation concerning non-tariff
measures related toArticles VI,XIIandXIXoftheGATT 1994 andtheAgreement onSafeguards,
Anti-Dumping andSubsidies andCountervailing Measures, Estonia would ensure theirconformity
withtheGATT 1994andother WTO Agreements. Estonia would apply anyfuture safeguard measures
infullconsistency withArticle XIXoftheGATT 1994 andtheWTO Agreement onSafeguards. No
balance-of-payments measures wereenvisaged atthisstage; ifeverneeded inthefuture Estonia would
impose them inamanner fullyconsistent withtheGATT 1994. (Delete paragraph number 47and
insert: “Therepresentative ofEstonia saidthatintheelaboration ofanylegislation concerning
anti-dumping duties, countervailing duties andsafeguards, Estonia would ensure their full
conformity withtherelevant WTO provisions, including Articles VIandXIXofGATT 1994and
theAgreements ontheImplementation ofArticle VI,theAgreement onSubsidies and
Countervailing Measures andtheAgreement onSafeguards. Estonia would alsoapply any
anti-dumping duties, countervailing duties andsafeguards measures infullconformity withthe
relevant WTO provisions. TheWorking Party tooknoteofthese commitments. ”)
2.Export Regulation
Export Duties
48. Some members oftheWorking Party noted thatEstonia applied export taxes onmetals and
objects ofcultural value andasked foradescription andjustification ofthese taxes. Inresponse, the
representative ofEstonia replied thata100percentexport taxwaslevied onobjects ofcultural value,
i.e.dating from before 1950. Export taxes onmetals hadbeenabolished, butexports were strictly
controlled through thelicensing ofexporters andaState monopoly onscrap metal exports.WT/ACC/SPEC/EST/1
Page31
Export Licensing
49. Noting thattheMinistry ofEconomy (Delete: “Ministry ofEconomy ”;insert: “Ministry
ofEconomic Affairs ”)hadtherighttoimpose export quotas oncertain goods, some members ofthe
Working Party asked therepresentative ofEstonia toclarify licensing arrangements affecting trade
inmetals, spirits, tobacco products andmedicaments andtojustify export quotas/licences ongravel
andclay.Some members alsosought clarification onEstonia 'sintentions regarding theuseofnon-tariff
measures onexports foremergency purposes.
50. Therepresentative ofEstonia replied thattheMinistry ofEconomy ’s(Delete: “Ministry
ofEconomy ’s”;right(Insert: “oftheMinistry ofEconomic Affairs ”)todetermine export quotas
hadbeeneliminated. Thelastremaining export quota (onquartz sand) hadbeenabolished andEstonia
didnotforesee anyfurther quantitative regulation offoreign trade. Astheexport quota/licence ongravel
andclayhadbeenterminated on1January 1995, nojustification would berequired under GATT or
WTO provisions andEstonia would seeknotransitional period forthismeasure. Export andimport
licences assuchdidnotexist, buthereferred totheearlier response regarding "Licence ofActivity"
(seeparagraph xx).Headded thatEstonia would notapply regulations onexports beyond WTO
mechanisms.
Export Incentives
51. Some members oftheWorking Party sought information about subsidies, including tax
incentives related toexports, theactivities oftheExport Credit Fund, theconsideration ofwideranging
useofexport incentives, andexisting orplanned measures totackle market disturbances orbalance-of
payments problems.
52. Therepresentative ofEstonia saidthatnotaxincentives, including taxholidays, existed to
promote exports. Heconfirmed thatloans from theExport Credit Fund carried 18percentannual
interest, comparing theratetocommercial interest ratesof16to25percentforshort-term loans in
Estonia in1994. Plans existed todevelop theFund intoanExport Credit andGuarantee Board which
would receive theinitial capital injection fromtheNational Budget. Estonia would notconsider wide
ranging export incentives, but,duetoanincreasingly negative trade balance, hadtheintention to
introducemoderateexportincentiveschemestobringEstonianexportersnearertotheconditionsenjoyed
bytheexporters ofdeveloped countries. (Insert: “Themoderate export incentive schemes involve
onlynon-specific subsidies which areavailable onanobjective basis. These schemes arebased
onneutral criteria which donotfavour certain enterprises overothers, andwhich areeconomicWT/ACC/SPEC/EST/1
Page32
innature andhorizontal inapplication. Therepresentative ofEstonia saidthattheincentives
schemes would beapplied inconformity withtheWTO requirements. ”)Thiswould bedone in
conformity withtherulessetbytheWTO. (Delete: “Thiswould bedoneinconformity withtherules
setbytheWTO. ”)
(Insert newparagraph: ”Therepresentative ofEstonia stated thatEstonia doesnotmaintain
subsidies which meet thedefinition ofaprohibited subsidy within themeaning ofArticle 3of
theAgreement onSubsidies andCountervailing Measures, andwould therefore notinvoke the
provisions intheAgreement thatprovide fortheprogressive elimination ofsuchmeasures within
afixed period oftime. TheWorking Party tooknoteofthese commitment. ”)
Internal Policies
Industrial Policy
53. Some members oftheWorking Party requested details onanysubsidies toprivate or
State-owned enterprises andasked whether Estonia maintained anyindustry support tobenotified in
accordance withtheAgreement onSubsidies andCountervailing Measures. Some members alsoasked
Estonia tostateitsattitude regarding future resort tosubsidies inthepursuit ofindustrial policy and
clarification oftheintention torestore historical trade links.
54. Therepresentative ofEstonia stated thatEstonia presently hadnoindustry support tobe
notified inaccordance withtheAgreement onSubsidies andCountervailing Measures. (Delete: “The
representative ofEstonia stated thatEstonia presently hadnoindustry support tobenotified in
accordance withtheAgreement onSubsidies andCountervailing Measures ”;insert: “Estonia
confirmed thatitdoesnotmaintain subsidies which meet thedefinition ofaprohibited subsidy,
within themeaning ofArticle 3oftheAgreement onSubsidies andCountervailing measures, and
would therefore notinvoke provisions intheAgreement thatprovide fortheprogressive elimination
ofsuchmeasures within afixedperiod oftime. TheWorking Party tooknoteofthiscommitment. ”)
EstoniaconsideredfinancialsupportprovidedbyitsInnovationFundtobeinlinewithcriteriaestablished
byArticle 8.2(a)oftheAgreement. TheLawonStateSupport forEntrepreneurship regulated State
supporttosmallandmediumsizedenterprises.Support-loansandloanguarantees-weremadeavailable
from funds managed byaneleven-member Council. Therestoration ofhistorical trade links would
involve ashiftfromthepasttradepatterns created bythecentrally planned economy ofEstonia 'seastern
neighbour, towards free,balanced economic linkswithcountries offering Estonia thebestpossibilities
andrealpotential formutually beneficial economic partnership. (Insert: ”Therepresentative ofEstoniaWT/ACC/SPEC/EST/1
Page33
stated thathisgovernment would notify itsInnovation Fund onaccession. TheWorking party
tooknoteofthiscommitment. ”)
Agricultural Policy
55. Some members oftheWorking Party requested information onEstonia 'scurrent agricultural
policy, including main principles, andspecific policies regarding tariffs andtariff bindings, trade
measures inthegrainsector, safeguards, farmsupport programmes andincomes policy, pricecontrols,
export subsidies, privatization andpreferential trade arrangements.
56. Therepresentative ofEstonia saidthatthereturn oflandtoformer owners hadbeen a
cumbersome process butthemajor panofagriculture hadbeenprivatized. Remaining Stateenterprises
stillplayed animportant roleinthedevelopment ofseeds andbreeds. Foreign ownership existed in
thefoodprocessing industry. Estonia hadnotariffs ornon-tariff measures affecting agricultural imports
andnosubsidies orprice controls onfood. However, theLawonMarket Arrangements would allow
introduction oftariffs. The1994 FreeTrade Agreement between Estonia, Latvia andLithuania did
notcover HSChapters Ito24.Aseparate agreement orsupplementary protocol covering farmproducts
wassubject tofurther negotiation. (Delete: ”Theseparate agreement orsupplementary protocol
covering farm products wassubject tofurther negotiation ”;insert: ”ByAugust 1996Agricultural
component ofthetrilateral agreement wasratified byEstonia andLithuania. Itwasexpected
thatLatvia would ratify thetrilateral agreement ontrade inagricultural products before October
1,1996 andtheagreement would gointoforce asofOctober 1,1996. ”)Estonia hadreserved the
possibilitytoregulateagriculturalimportswithtariffsuntil1996or1997undertheFreeTradeAgreement
withtheEuropean Union. Theinitial offerforthemarket access negotiations (WT/L/60) included no
zero-tariff bindings inagriculture andEstonia indicated thatitstariffs would bebound atalevelsimilar
tothesurrounding countries. The1994LawonGrain allowed theGovernment torestrict grain imports
when domestic demand wasfully covered bylocal production. However, quotas hadnotbeen
implemented untilnow.Estonia confirmed itsawareness oftheWTO requirement toconvert quantitative
importrestrictionsintocustomsdutiesandtherulewouldbefollowedinfuturepolicy.Therepresentative
ofEstonia added thatlicensing arrangements forfoodimports would befinalized inthefirsthalfof
1996 (Delete: “inthefirsthalfof1996”;Insert: “intheDecember 1996”)Licences would notact
torestrict thequantity ofimports ;theywould begranted automatically withtheexception ofconditions
related tophytosanitary requirements.
57. Therepresentative ofEstonia added thatEstonia would notexclude anyfuture resort tospecial
safeguard measures, butwasnotabletoindicate anyspecific areaswhere suchmeasures might beused.WT/ACC/SPEC/EST/1
Page34
Lackoffinancial resources hadsofarprevented subsidization ofagricultural exports, butEstonia would
reserve therighttointroduce domestic support programmes andexport subsidies. Anofferondomestic
support andexport subsidies foragriculture wascirculated tomembers oftheWorking Party in
September 1995 (WT/SPEC/13) including export subsidy ceilings forbutter, cheese, milkpowder,
beef,pigmeatandpoultrymeat;incomesupportmeasuressubjecttoreductioncommitments;andvarious
"green box"measures. Estonia alsolisted anumber ofcurrent support programmes itconsidered "green
box"supportinWT/ACC/EST/4.(Insert:“Thebaseperiodforcommitmentsonagriculturaldomestic
support andexport subsidies is1988-1990. Thedataofthemost recent baseperiod (1992-1994)
would notberepresentative. In1991acomplete reform process ofEstonian agriculture wasstarted,
including suchradical measures asrestoration ofnationalised property (including land) toformer
owners ortheirsuccessors, monetary reform, reorganisation andprivatisation ofsoviet typefarms,
price liberalisation, creation ofcompetitive environment duetoincreasing imports etc.Those
processes arestillundergoing. Support toagriculture during these years cannotbeconsidered
asanexpressionofGovernmentpolicyonsubsidizingagriculture.Allsubsidyschemeswererevoked
inthebeginning ofagricultural reform aiming nottosupport oldstructures. Thenewsupport
schemes havenotbeenintroduced because ofongoing agricultural reforms, political debates and
thelack oflegislative measures. Thus themost recent time period cannotbetaken as
representative. Onthecontrary, theperiod since 1991uptodayshould betaken asextraordinary
andexceptional forEstonian agriculture. Estonia cannot therefore accept themost recent time
period 1992-1994 asabaseperiod forthedetermination ofthedomestic support inEstonian
agriculture because ofnotbeing representative. ”)
Technical Barriers toTrade andSanitary andPhytosanitary Measures
58. Some members oftheWorking Party inquired about theapplication ofinternational and
national standards inEstonia. Regarding agriculture, some members asked about theobjectives ofthe
FoodLawandtheresorttosanitaryandphytosanitarymeasures,withparticularreferencetoGovernment
Regulations 300and340of1992.
59. InWT/EST/ACC/9(AnnexIII),therepresentativeofEstoniasuppliedinformationontechnical
barriers totrade andanotification onsanitary andphytosanitary measures. Headded thatatpresent
nolegalactregulated theadoption andapplication ofstandards, andEstonia hadnotconcluded any
agreement withother countries inthisarea. Current Estonian standards werebased onISOstandards
andgenerallyvoluntary,exceptformandatorystandardsonspirits(whitevodka)andconstructioncement.
Estonia aimed atjoining theEUSynchronized Standard System. (Delete: “Estonia aimed atjoining
theEUsynchronized standard system. ”)Conformity assessments wereorganized inaccordance withWT/ACC/SPEC/EST/1
Page35
European requirements (EN45000). Former USSR criteria, theso-called GOST standards, remained
insomeareastemporarily validbutwerenolonger mandatory. Allstandards applied equally todomestic
andimported products. Draft standards andregistration notices werepublished in"Standards ofthe
Republic ofEstonia".
60. Therepresentative ofEstonia saidthat"high quality" and"internationally competitive food"
werekeyobjectives citedinEstonia 'sFood Law, which wastoserve asabasisforfurther legislation
regulating foodhandling, quality, safety, control andinspection. Estonia didnotenvisage theuseof
minimum import prices, butnon-automatic import licensing might beemployed inthepursuit offood
policy objectives. ANational Food Board hadbeenestablished todealwithallmatters concerning
foodandnutrition policy.
61. Therepresentative ofEstonia added thatborder controls onplants andplantproducts were
effected bytheStatePlant Quarantine Inspection inaccordance withGovernment Regulation 300(of
17October1992)on"RegulationofarrangingphytosanitarycontrolontheStateborder"andamendments
tothisdoneon19October 1992 (Regulation No.340)and31March 1995 (Regulation No.147)as
wellastheLawonPlant Protection andtheTemporary Regulation ontheStateControl, Sale, Export
andImport oftheSeeds ofField Crops. Goods subject toveterinary controls, border check points,
requirements forveterinary certificates andtheprocedures forsettling claims werelaiddown inaDecree
oftheMinister ofAgriculture of3August 1994andGovernment Regulation No.17 of10April 1995.
Theauthorities considered thehealth andsafety provisions oftheFood Lawtobeconsistent withthe
WTO Agreement onSanitary andPhytosanitary Measures.
62. Some members oftheWorking Party noted thatEstonia hadadopted nolaws, regulations
oradministrative procedures relating totheimplementation andadministration oftechnical barriers
totrade. Intheirview, these procedures should beenacted bythetimeofEstonia 'saccession tothe
WTO. Estonia would thusapply theWTO Agreements onSanitary andPhytosanitary Measures and
Technical Barriers toTrade fromthedateofaccession without recourse toanytransition period. 63.
Therepresentative ofEstonia confirmed thatprocedures togrant licences toimport foodwould be
finalized inthefirsthalfof1996 (Delete: “inthefirsthalfofthe1996”;insert: “bytheendofthe
1996”)andwould beinfullconformity withtheprovisions oftheWTO Agreement onImport Licensing
Procedures, notably itsArticles 2,3and5.WT/ACC/SPEC/EST/1
Page36
Trade-Related Investment Measures
64. Therepresentative ofEstonia saidthattheForeign Investment Lawconformed fullywith
WTO rules ascontained intheTRIMs Agreement. HisGovernment applied theprinciple ofnational
treatment anddidnotresort toperformance requirements which could affect trade.
(Delete paragraph 64;Insert newparagraph asfollows: “Therepresentative ofEstonia saidthat
Estonia didnotmaintain anymeasures inconsistent withtheTRIMS Agreement andwould not
invoke provisions intheAgreement thatprovide fortheprogressive elimination ofsuchmeasures
within afixed period oftime. HisGovernment would apply theprinciple ofnational treatment
andwould notresort toperformance requirements which could affect trade. theWorking Party
tooknoteofthiscommitment. ”)
State Trading
65. Some members oftheWorking Party noted thatasignificant portion ofEstonia 'soutput
andtrade remained inState hands andthattobacco andalcohol hadbeensubject toState monopoly.
Estonia wasrequested tonotify under Article XVII anydefacto ordejuretrade monopoly andtrade
activities ofanyState-owned firmbenefiting from selective support orsubject toState intervention.
66. Therepresentative ofEstonia replied thatfollowing extensive privatization State-owned firms
accounted forlessthan5percentofdomestic trade. Estonia notified under Article XVII ofGATT
1994initsInformation onState-trading (WT/ACC/EST/9 (Annex IV))thataStatemonopoly hadbeen
established onscrap metal tocontrol metal trade forreasons consistent withArticle XXI(Security
Exceptions). (Insert: “Except forthescrap metal export monopoly there arenoenterprises with
special orexclusive rights. Therepresentative ofEstonia confirmed thatthescrap metal monopoly
willbeoperated inaccordance withtherelevant provisions oftheWTO Agreements, including
Article XVII andXIoftheGATT 1994. Theimmediate reason forestablishing EMEX tocontrol
trade inscrap metals wastheintention ofEstonia ’sGovernment tohinder serious crime since
theboom inscrap metal handling resulted inextensive damages toEstonian communications,
energy, andtransportation companies permanent unguarded metal installations andconstructions.
Especial harm wasdone toEstonian Railways, Estonian Energy, andEstonian telephone by
endangering theirability tooperate. Therepresentative ofEstonia confirmed thatafterstabilization
ofthesituation themonopoly willbeabolished. Presently themonopoly alsohastohandle the
issues oftrade inradioactive scrap materials which alsohave posed aserious threat toEstonia
inrecent times. Therepresentative ofEstonia confirmed thatthiswould apply itslaws and
regulations governing thetrading activities ofState-owned enterprises withspecial orexclusiveWT/ACC/SPEC/EST/1
Page37
privileges andwould otherwise actinfullconformity withtheprovisions oftheWTO Agreements,
inparticular Article XVII andXIoftheGATT 1994 andtheUnderstanding onthatArticle and
Article VIIIoftheGATS. TheWorking Party tooknoteofthiscommitment. ”)
(Insert newparagraph: “Therepresentative ofEstonia confirmed thathisgovernment would apply
itslawsandregulations governing thetransit operations andwould actinfullconformity with
theprovisions oftheWTO agreement, inparticular Article VoftheGATT 1994. TheWorking
Party tooknoteofthiscommitment. ”)
Government Procurement
67. Some members oftheWorking Party asked whether Estonia intended tojointheAgreement
onGovernment Procurement andrequested details about Estonian procurement legislation, itscoverage
anditsconformity withWTO principles.
68. Therepresentative ofEstonia replied thatEstonia hadyettomake adecision onwhether
tojointheWTO plurilateral Agreement onGovernment Procurement. TheLawonPublic Procurement
wasadopted inMayI995andentered intoforce on1January 1996. TheGovernment hadestablished
aPublic Procurement Board tocoordinate andadminister public procurement activities. Thelegislation
defined fiveprincipal methods ofprocurement; opentender, two-stage tendering, request forproposals
(Delete: “request forproposals ”;insert: “negotiated tendering ”),request forquotations and
single-source procurement. (Insert: “Inthecaseofopen tendering isused allwhowish may
participate andthere must notoccur anynegotiations between procuring entity andanytenderer.
Two-staged tendering shall beusedifitisnotpossible beforehand todetermine allthetechnical
andeconomic indicators ortheobject oftheprocurement isthecarrying outofresearch and
experiments, theresults andcosts ofwhich arenotclearly prognosticated. Negotiated tendering
isusedinthecasewhere notenders weresubmitted oralltenders wererejected atopentendering
orinthecases theprocurement isinvolving astate secret. Therequest forquotations canbe
implemented ifadeveloped market exists fortheprocurement which isexpressed bytheabundance
oftenderers andexistence ofcompetitive prices orifbyseeking fortheprice quotation theprice
fortheprocurement willbelower from theestablished market one.Single-source procurement
maybeapplied onlyiftherequired procurement isavailable from onlyonesupplier orifan
extraordinary need forcertain procurement hasoccurred, andtheuseofother procurement
methods isnotpossible duetotimerestrictions, oronthebasis ofpreviously concluded contract
ortheprocuring entity isapplying acontract withtheaimofcarrying outresearch work oranWT/ACC/SPEC/EST/1
Page38
experiment which would leadonlytoaprocurement ofasample ofaproduct oriftheprocurement
isinvolving astate secret. ”)Theinvitation fortenders might specify preferences tobeaccorded to
domestic suppliers (Delete: ”Theinvitation fortenders might specify preferences tobeaccorded
todomestic suppliers. ”)
(Insert newparagraph: “Therepresentative ofEstonia confirmed that, upon itsaccession, his
government would notify theCommittee onGovernment procurement ofitsintention toaccede
totheAgreement onGovernment procurement andseekobserver status inthatCommittee. He
alsoconfirmed thatEstonia willcomplete negotiations formembership intheAgreement bythe
year2002. ”)
Trade-Related Aspects oftheIntellectual Property regime
69. Some members oftheWorking Party requested details about legislation andenforcement
ofintellectual property rightprotection inEstonia andthecompatibility withrequirements oftheTRIPS
Agreement. Specific questions wereaddressed regarding exceptions fromnational orm.f.n. treatment,
non-patentable inventions, protection ofplantvarieties, patent holders 'rights, extension ofpatent terms,
granting ofcompulsory licences, judicial review, semiconductors, copyright, trademarks, industrial
design andcompetition andanti-trust.
70. TherepresentativeofEstoniasaidthatEstoniadeemeditsintellectualpropertyrightprotection
compatible withtheTRIPS Agreement withnoexceptions totheprinciples ofnational andm.f.n.
treatment. ThePatent Office opened inMarch 1992. Legislation onindustrial property wassaidto
bemodelled oncorresponding lawsoftheNordic countries. Estonia hadbecome fullmember ofWIPO,
joined thePatent Cooperation Treaty andrestored itsmembership totheParisConvention andtheBerne
Convention.
71. Inresponse tofurther questions, therepresentative ofEstonia saidthatplantvarieties were
protected under the1994Variety Protection Lawandpatent protection formicroorganism strains could
begranted following Estonia 'saccession totheBudapest Treaty. Certain inventions werenon-patentable
(inventions contrary topublic order andmorality, treatment anddiagnostic methods practised onhumans
oranimals,topologyofmicro-circuitandsubstancesderivedfrom'splittingatoms').Provisionsregarding
apatentee 'sexclusive rights andexceptions were found inChapter IV(sections 15,17,45and46)
ofEstonia 'sPatent Law. There werenorestrictions onapatent owner 'srights toassign, transfer or
licence rights, butalicensing agreement needtoberegistered withthePatent Office tobevalid.
Compulsory licences could begranted bycourtorder only(section 47).Estonia considered thisprovisionWT/ACC/SPEC/EST/1
Page39
tofulfilentirely therequirements ofArticle 31(b)and(c)oftheTRIPS Agreement. Patents werenot
extendable under present legislation. Provisions corresponding toArticle 34oftheTRIPS Agreement
(Process Patents: Burden ofProof hadnotyetbeenestablished.)
72. TherepresentativeofEstoniaaddedthatthedraftingandenactmentoflegislationonprotection
ofsemiconductor layout design wasscheduled for1996. Theconditions governing freeuseandfee
compilation ofcomputer programs weresetoutinChapter IV,Sections 24and25,oftheCopyright
Law. Thelawdidnotcontain provisions oncompulsory licensing ofcopyrightable works andsound
recordings; fullretroactive protection wasprovided under Sections 38and74.Section 75prescribed
thelimitations onrights neighbouring oncopyright. Thecollection ofalevytocompensate forthe
useofaudiovisual works andsound recordings began inJanuary 1996. Accession tothe1961 Rome
Convention wasunder consideration.
73. Withregard totrademarks, therepresentative ofEstonia saidthatsigns registrable astrade
marks wereenumerated inSection 6oftheTrade Marks Law. Thelawprotected wellknown marks
whether ornotregistered intheRepublic ofEstonia. Section 5ofthelawsetouttherights (and
limitations) granted toholders oftrademarks; registration satisfied notice oftheexclusive right, and
nospecificprovisionsrestrictedthelicensingortransferoftrademarks.Theregistrationofanassignment
wasnotmandatory, butitwasnotconsidered validwithout registration. Registrability ofatrademark
generally didnotdepend onuse.Applications werelodged withthePatents Office, itsrefusal toregister
atrademark (contravention ofsections 7and8)might becontested through theBoard ofAppeals of
Industrial Property. Decisions oftheAppeal Board could bebrought before acourt oflaw.Estonia
foresaw nochanges tothetrademark lawatthisstage.
74. Therepresentative ofEstonia saidthatEstonia wasdrafting newlawsonindustrial design,
geographical indication andsemiconductor layout designs. Trade secrets werenotprotected byseparate
legislation, butcovered under Article 148oftheCriminal Code. TheSecond PartofEstonian
Competition Law: unfair Competition wasinconsistence withtheParis Convention andArticle 40
oftheTRIPS Agreement. TheCustoms Lawformed thelegalbasis fortheprevention ofimports of
infringing goods. Amendments totheCriminal Code andtheCode ofInfringement ofAdministrative
Lawtoinclude specific provisions onlegal protection ofindustrial property awaited approval by
Parliament.
[75.Amember asked Estonia tobecome amember oftheGeneva Phonograms Convention, noting
thattherestoration ofprotection forcopyrighted works wasrequired under Article 18oftheTRIPS
Agreement. Protection ofindustrial designs, semiconductor chiplayout designs andnewplantvarietiesWT/ACC/SPEC/EST/1
Page40
wasalsorequired under TRIPS. Onpatents, themember needed confirmation thatacourt, indeciding
onacompulsory licence, would follow theprocedures outlined inArticle VIII.6 ofitsbilateral agreement
withEstonia.( (Delete square brackets) (Insert: “Therepresentative ofEstonia stated thatEstonia
would fully apply alltheprovisions oftheAgreement onTrade related Aspects ofIntellectual
property Rights bythedateofitsaccession totheWTO, without recourse toanytransitional
period. TheWorking Party tooknoteofthiscommitment. ”)
Services Regime
(Insert newparagraph: “Intheinterest ofaccelerating theprocess ofaccession totheWTO
Agreement,therepresentativeofEstoniasubmittedEstonia’sdraftscheduleofspecificcommitments
inservices (WT/L/59), aRevised Draft Schedule ofSpecific Commitments inTrade inServices
(WT/ACC/EST/6). Therequired activity licenses andthecorresponding regulatory authorities
areprovided inTable 2.Themarket access schedules ofEstonia onservices areannexed tothe
Protocol ofAccession ofEstonia which isreproduced intheAppendix tothisReport. Asindicated
intheconclusions ofthisReport. TheWorking Party tooknoteoftheservices commitments of
Estonia. ”)
76. Some members oftheWorking Party commented onEstonia 'sdraftschedule ofcommitments
ontrade inservices. Intheirview, theofferwasnot(Because ofthedifferent present situation we
suggest todelete: “not”)sufficient since thedocumentation indicated anopenservices Regime while
(Delete: “while”;insert: “and”)Estonia hadentered unbound (Delete: “unbound ”;insert: “none”)in
almost every mode ofdelivery. Specific questions covered procedures orrestrictions ontheentry of
foreign labour, including lawyers, architects andaccountants andcross-border trade insuchservices;
market access conditions, cross-border trade, theeffect oftheeconomic stabilization programme, and
recent legislation inthefinancial services sector; licensing ofoperators intelecommunications andair
transport; restrictions onforeign investment; establishment oftrade ofservices andthecoverage of
services inpreferential trading arrangements.
77. Therepresentative ofEstonia presented arevised services schedule undertaking further
commitments. According totherepresentative ofEstonia theunbound entries inthefirstdraftreflected
thelackofspecific regulations withregard toforeign suppliers (Delete: “foreign suppliers ”;insert:
“specific services ”).Headded thatvisaregulations governed thetemporary entry offoreigners; a
residencepermitandaworkpermitwasrequiredforforeignpersonneltotakeupemploymentinEstonia.
Theannual immigration quota was1,000 persons (Delete: “1,000 persons ”;insert: “0.1percent
ofEstonia ’spopulation ”).Foreign lawyers, architects andaccountants could actasconsultant toWT/ACC/SPEC/EST/1
Page41
Estonian firms andthere were nolegal obstacles tothepurchase ofsuch services abroad. The
representative ofEstonia stated thatthefinancial services sector wasfreefrom restrictions andthat
norestrictive measures wereplanned forthenearterm. Estonia confirmed thatforeign suppliers were
nottreated lessfavourably thannational providers offinancial services, withtheexception ofsome
special requirements concerning foreign-owned insurance companies indicated initsdraftSchedule
ofSpecific Commitments (WT/L/59). Applications toestablish representation offices orsubsidiaries
wereaddressedtotheBankofEstonia.Recentamendmentsinfinancialsectorlegislationincludedfurther
regulations onprudential requirements andtheadoption ofanewCredit Institution Lawwithadditional
instruments forthesupervisory authority andprovisions onmoney laundering. TheEstonian securities
marketwasinitsearlystagesofdevelopment,butgrowthhadbeensubstantial.Thedemandforinsurance
hadbeenboosted bycompulsory insurance formotor vehicles.
78. With regard totelecommunications, therepresentative ofEstonia saidthataforeign firm
would needaforeign investment licence andregister asalegal person inEstonia todobusiness in
telecommunications. Aconcession conferring monopoly rights to"Eesti Telefon" wasvaliduntilyear
2000. TheLawofBroadcasting (Article 22)limited foreign ownership andpossession ofbroadcasting
transmitters tolessthan50percentoftheshares.
79. Withregardtotransportation,therepresentativeofEstoniasaidthatonlycompaniesregistered
inEstonia could obtain alicence forconveyance ofgoods andpassengers; aferry hadtobeowned
byacitizen ofEstonia oracompany withheadquarters inEstonia andminimum 51percentnational
ownership. "Estline" currently hadamonopoly concession, valid forafurther three years, onthe
conveyance ofpassengers between Estonia andSweden. Aviation licences wereissued topermanent
residents ofEstonia orlegalpersons withminimum 51percentresident ornational ownership. Foreign
aircarriersoperatinginEstoniaincludedLufthansa,Aeroflot,FinnairandSAS(Insert:“MaerskAir”).
80. Therepresentative ofEstonia stated thatEstonia didnotprohibit foreign services suppliers
fromestablishing tradeoffices inanysector andthatnoservices sectors andactivities werecompletely
closed toforeign companies.
81. Headded thatEstonia 'sfreetradeagreements mainly covered goods; nocurrent agreement
gaveanycountry preferential status inservices trade inEstonia. Anyfuture association agreement or
Europe Agreement withtheEuropean Union would include trade inservices.WT/ACC/SPEC/EST/1
Page42
Economic Relations withThird Countries
82. Some members oftheWorking Party enquired about Estonia 'spreferential agreements with
theEuropean Union andEFTA members, Latvia andLithuania, further plans toconclude such
agreements,includingaBalticCustomsUnion,andtheexistenceofcountertradeagreementswithformer
CMEA members. Questions were alsoraised concerning theconsistency ofEstonia 'sfreetrade
agreements withtherequirements ofArticle XXIV, inparticular theobligation tocover substantially
allthetrade between theconstituent territories.
83. (Insert: “Therepresentative ofEstonia replied thatEstonia haspreferential trade
agreements withEFTA, EU,Baltic countries, Ukraine, Czech Republic andSlovak Republic.
Based ontheperiod January-March 1996 about 73percentofexports and73,3percentofour
imports were subject topreferential trade agreements. ”)Therepresentative ofEstonia estimated
that,inthebeginning of1995, about 61percentofexports and56percentofimports weresubject
topreferential agreements. (Delete “Therepresentative ofEstonia estimated that, inthebeginning
of1995, about 61percentofexports and56percentofimports were subject topreferential
agreements) TheFreeTrade Agreement withtheEuropean Union hadentered intoforce on1January
1995, alsocovering newmembers Finland andSweden (Insert: “(WT/REG8/N/1) ”).Theconclusion
offreetrade agreements withcountries inCentral andEastern Europe wasbeing considered. (Delete:
“Theconclusion offreetrade agreements withcountries inCentral andEastern Europe wasbeing
considered. ”;insert: “Estonia hadmade propositions forconclusion offreetrade agreement to
Poland (November 1995), Hungary (October 1995) andSlovenia (August 1995) ”)Hestated that
Estonia hadnocountertrade agreements withthese (Delete: “these”;insert: ”Central andEastern
European”)countries.Thefreetradeagreementsgenerallygranteddutyfreeimportationandexportation
ofmanufactures (HSChapters 25-97) while trade inagricultural goods were covered inseparate
agreements orprotocols. Some quantitative andqualitative requirements applied toEstonia 'sagricultural
exports. ThemainaimoftheBaltic Customs Union would betheabolition ofinternal customs controls;
anassessment ofitseffect onEstonia 'sliberal trade policy wasnotpossible atthisstage.
(Insert newparagraph: “Therepresentative ofEstonia sated thathisgovernment would observe
theprovisions oftheWTO including Article XXIV oftheGATT 1994 andtheArticle Vofthe
GATS initstrade agreements, andwould ensure thattheprovisions ofthese preferential trading
systems, freetrade areas andcustoms unions ofwhich Estonia isamember aremetfrom the
dateofaccession, insofarasthese provisions hadnotalready beenmetbyoneoftheother Parties
tosuchanagreement. ”)
(Insert newheading: ”Publication ofInformation onTrade ”)WT/ACC/SPEC/EST/1
Page43
(Insert paragraph: “Therepresentative ofEstonia stated thatatthelatest from thedateof
accession, alllaws, andother normative actsrelated totrade willbepublished intheOfficial
Journal promptly. Hestated further thatnolaw,ruleetc.related tointernational trade willbecome
effective prior suchpublication. ”)
(Insert newheading: “Notifications ”)
(Insert paragraph: “Therepresentative ofEstonia saidthatatthelatest upon entry intoforce
oftheProtocol ofAccession, Estonia would submit allnotifications (other thanthose required
tobemade onanadhocbasis) required byanyAgreement constituting partoftheWTO
agreement. Anyregulations subsequently enacted byEstonia which gaveeffect tothelawsenacted
toimplement anyAgreement constituting partoftheWTO Agreement would alsoconform to
therequirements ofthatAgreement. ”)
Conclusions
84. TheWorking Party tooknoteoftheexplanations andstatements ofEstonia concerning its
foreign trade regime, asreflected inthisreport. TheWorking Party tooknoteoftheassurances given
byEstonia inrelation tocertain specific matters which arereproduced inparagraphs. .........
......................ofthisreport. TheWorking Party tooknoteofthecommitments
given byEstonia inrelation tocertain specific matters which arereproduced inparagraphs. .....
................ofthisreport. TheWorking Party tooknotethatthese commitments hadbeen
incorporated inparagraph 2oftheProtocol ofAccession ofEstonia totheWTO.
85. Having carried outtheexamination oftheforeign trade regime ofEstonia andinthelight
oftheexplanations, commitments andconcessions made bytherepresentative ofEstonia, theWorking
Party reached theconclusion thatEstonia beinvited toaccede totheAgreement Establishing theWTO
under theprovisions ofArticle XII.Forthispurpose, theWorking Party hasprepared thedraftDecision
andProtocolofAccessionreproducedintheAppendixtothisreport,andtakesnoteofEstonia'sSchedule
ofSpecific Commitments onServices (document. .....)anditsSchedule ofConcessions and
Commitments onGoods (document. ......)thatareannexed totheProtocol. Itisproposed that
thesetextsbeadopted bytheGeneral Council when itadopts thereport. When theDecision isadopted,
theProtocol ofAccession would beopenforacceptance byEstonia which would become aMember
thirty daysafteritaccepts thesaidProtocol. TheWorking Party agreed, therefore, thatithadcompleted
itswork concerning thenegotiations fortheaccession ofEstonia totheAgreement Establishing the
WTO.WT/ACC/SPEC/EST/1
Page44
APPENDIX
ACCESSION OFESTONIA
Draft Decision
TheGeneral Council ,
Having regard totheresults ofthenegotiations directed towards theestablishment ofthe
terms ofaccession oftheRepublic ofEstonia totheAgreement Establishing theWorld Trade
Organization andhaving prepared aProtocol fortheAccession ofEstonia,
Decides ,inaccordance withArticle XIIoftheAgreement Establishing theWorld Trade
Organization, thattheRepublic ofEstonia mayaccede totheAgreement Establishing theWorld Trade
Organization ontheterms setoutinthesaidProtocol.WT/ACC/SPEC/EST/1
Page45
PROTOCOL OFACCESSION OFESTONIA
TOTHE AGREEMENT ESTABLISHING THE WORLD TRADE ORGANIZATION
DRAFT
TheWorldTradeOrganization(hereinafterreferredtoasthe"WTO"),pursuanttotheapproval
oftheGeneralCounciloftheWTOaccordedunderArticleXIIoftheMarrakeshAgreementEstablishing
theWorld Trade Organization (hereinafter referred toas"WTO Agreement"), andtheRepublic of
Estonia (hereinafter referred toas"Estonia"),
Taking noteoftheReport oftheWorking Party ontheAccession ofEstonia totheWTO
indocument WT/L.... (hereinafter referred toasthe"Working Party Report"),
Having regard totheresults ofthenegotiations ontheaccession ofEstonia totheWTO,
Agree asfollows:
PartI-General
1. Upon entry intoforce ofthisProtocol, Estonia accedes totheWTO Agreement pursuant
toArticle XIIofthatAgreement andthereby becomes aMember oftheWTO.
2. TheWTO Agreement towhich Estonia accedes shallbetheWTO Agreement asrectified,
amended orotherwise modified bysuchlegalinstruments asmayhaveentered intoforce before the
dateofentry intoforceofthisProtocol. ThisProtocol, which shallcomprise thecommitments referred
toinparagraph ...oftheWorking Party Report, shallbeanintegral partoftheWTO Agreement.
3. Except asotherwise provided forinparagraphs ...oftheWorking Party Report:
(a) Those obligations intheMultilateral Trade Agreements annexed totheWTO Agreement
thataretobeimplemented overaperiod oftimestarting withtheentry intoforce ofthat
Agreement shallbeimplemented byEstonia asifithadaccepted thatAgreement onthedate
ofitsentry intoforce;WT/ACC/SPEC/EST/1
Page46
(b) Those notifications thataretobemade under theMultilateral Trade Agreements annexed
totheWTO Agreement within aspecified period oftimestarting withthedateofentry into
force oftheWTO Agreement shallbemade byEstonia within thatperiod oftimestarting
withthedateofentry intoforce ofthisProtocol.
PartII-Schedules
4. 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 toEstonia. Thestaging ofconcessions
andcommitments listed intheSchedules shallbeimplemented asspecified intherelevant partsofthe
respective Schedules.
5. Forthepurpose ofthereference inparagraph 6(a)ofArticle IIoftheGATT 1994 tothe
dateofthatAgreement, theapplicable dateinrespect oftheSchedules ofConcessions andCommitments
annexed tothisProtocol shallbethedateofentry intoforce ofthisProtocol.
PartIII-Final Provisions
6. ThisProtocol shallbeopenforacceptance, bysignature orotherwise, byEstonia until.........
7. ThisProtocol shallenter intoforce onthethirtieth dayfollowing thedayofitsacceptance.
8. ThisProtocolshallbedepositedwiththeDirector-GeneraloftheWTO.TheDirector-General
oftheWTO shallpromptly furnish acertified copyofthisProtocol andanotification ofacceptance
thereto pursuant toparagraph 6toeachmember oftheWTO andEstonia.
9. ThisProtocol shallberegistered inaccordance withtheprovisions ofArticle 102ofthe
Charter oftheUnited Nations.
Done atGeneva this...dayof....onethousand ninehundred andninety six,inasingle
copyintheEnglish, French andSpanish languages eachtextbeing authentic, except thataSchedule
annexed hereto mayspecify thatitisauthentic inonlyoneormore ofthese languages.