RESTRICTED
WORLD TRADE WT/ACC/ARM/8
3April 1997
ORGANIZATION(97-1353)
Original: English
ACCESSION OFARMENIA
Additional Questions andReplies totheMemorandum
ontheForeign Trade Regime
(Document WT/ACC/ARM/1)
TheMinistry ofEconomics oftheRepublic ofArmenia hassubmitted thefollowing replies
toadditional questions.
_______________
TABLE OFCONTENTS
Subject
PART I-MATERIAL PROVIDED INTHE WT/ACC/1 FORMAT
III. FRAMEWORK FOR MAKING AND ENFORCING POLICIES
AFFECTING FOREIGN TRADE INGOODS AND TRADE IN
SERVICESQuestion
NumberPage
Number
1. Powers ofexecutive, legislative andjudicial branches of
Government1-3 3
IV. POLICIES AFFECTING FOREIGN TRADE INGOODS
3. Internal policies affecting foreign trade ingoods
(e) State-Trading Practices 4-14 4
(h) Trade Related Environmental Policies 15-19 9
(j) Government-Mandated Counter-trade andBarter 20-21 10
V. TRADE-RELATED INTELLECTUAL PROPERTY REGIME 22-24 10
QUESTIONNAIRE ONIMPORT LICENSING 25-35 13
QUESTIONNAIRE ONCUSTOMS VALUATION 36-42 20
QUESTIONNAIRE ONTECHNICAL BARRIERS TOTRADE 43-57 22
PART II-REPLIES TOSPECIFIC QUESTIONS
III. FOREIGN TRADE REGIME
3.1. Import Regulation
3.1.1. Thecustoms tariff 58 26
3.1.2 Import charges andfees 59-63 27
3.1.4 Taxrégime 64-67 28
3.1.5 Non-tariff measures, quotas andlicensing 68 30
3.1.8 Rules oforigin 69-76 30
3.1.10 Sanitary andphytosanitary measures 77-82 32WT/ACC/ARM/8
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Subject
3.3. Export incentives 83-85 34
IV. OTHER POLICIES AFFECTING FOREIGN TRADE
4.2 Agricultural policy 86-94 34
4.3 Financial, budgetary andfiscal policy 95 36
4.5 Foreign investment policy 96-98 36
4.6 Government procurement 99 37
4.8 Price controls 100-101 37
V. INSTITUTIONAL BASE FOR TRADE AND ECONOMIC
RELATIONS WITH THIRD COUNTRIES
5.1 Bilateral trade relations andintegration agreements
5.1.2 Bilateral freetrade agreements andtrade andeconomic
cooperation agreements withCIScountries102-104 37WT/ACC/ARM/8
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PART I-MATERIAL PROVIDED INTHE WT/ACC/1 FORMAT
III. FRAMEWORKFORMAKINGANDENFORCINGPOLICIESAFFECTINGFOREIGN
TRADE INGOODS AND TRADE INSERVICES
1. Powers ofExecutive, Legislative andJudicial Branches ofGovernment
Q.1 Theresponse toquestion 6ofWT/ACC/5 states thattheWTO Agreement willhave the
force oflawinside Armenia after theaccession isratified.
Howwillconflicts between WTO provisions andexisting lawsandregulations beaddressed
byexecutive agencies? Cantheyenforce theWTO directly, orwillcomplaints ofconflicts have
tobepursued judicially?
Article 6oftheConstitution oftheRepublic ofArmenia states thatinternational treaties that
havebeenratified areaconstituent partofthelegalsystem oftheRepublic. Ifnorms areprovided
inthese treaties other thanthose provided bythelawsoftheRepublic, thenthenorms provided in
thetreaty shallprevail.
InternationaltreatiesthatcontradicttheConstitutionmayberatifiedaftermakingacorresponding
amendment totheConstitution. Atthesame time, within theframework ofArmenia 'sobligations
assumed withrespect toaccession totheWTO there isaspecific reference tothefactthatfollowing
theratification ofaccession allWTO agreements shalldirectly havetheauthority oflawwithin the
Republic ofArmenia. Moreover, thelawsandlegislative instruments necessary fortheapplication
oftheprovisions oftheabove-mentioned agreements shallbeadopted within sixmonths following
suchratification.
Q2. Please describe, anddistinguish between, thejurisdiction andoperation ofthe“economic
courts ”referred tointheresponse toquestion 7setupunder thenewConstitution, including
butnotlimited totheirrespective rolesandappeals process from thatoftheregular courts. Please
giveparticular attention intheresponse tohowappeals from customs authorities, from cases
involving intellectual property protection andfrom rulings inanti-dumping andcountervailing
dutyinvestigations arehandled bythejudicial system.
Inouranswer toquestion 8ofWT/ACC/ARM/5 wehavestated thattheConstitution ofthe
Republic ofArmenia contains transitional provisions thatarecurrently ineffect, andtheseshallcontinue
tobevalid untiltheestablishment ofthejudiciary system provided bytheConstitution.
Atthesametimetherespective Committees oftheNational Assembly, aswellastheinterested
ministries andagencies oftheGovernment oftheRepublic ofArmenia areelaborating theCodes and
Laws necessary fortheimplementation ofthejudiciary system. Thebulkofthese provisions are
scheduled tobeadopted bytheendofthefirsthalfof1988. Economic litigation inparticular shall
behandled through theCriminal litigation andtheCivil litigation Codes under preparation.
Q3. CanArmenia guarantee thatallcommitments undertaken inthecontext ofherWTO
accession willbeimplemented andenforced throughout itsterritory?
WithintheframeworkoftheprocessofArmenia'saccessiontotheWTO,theobligationsassumed
bytheGovernment oftheRepublic ofArmenia aresubject toimplementation throughout theRepublic
ofArmenia. Inindividual cases when theimplementation ofsuchobligations requires theintroductionWT/ACC/ARM/8
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ofamendments inthelawsineffect ortheadoption ofnewlaws, theGovernment oftheRepublic of
Armenia willsubmit therelevant legislative proposal totheNational Assembly, foritsapproval.
IV. POLICIES AFFECTING FOREIGN TRADE INGOODS
3. Internal Policies Affecting Foreign Trade inGoods:
(e) State-Trading Practices
Q4. Theresponse toquestion 10isnotcomplete anddoesnotaddress tobasic question ofthe
residual presence androleofthestateinArmenia ’seconomy. Weareseeking abroader knowledge
ofthestructure ofownership andenterprise operation inArmenia.
With theexception ofthejointventure established bytheGovernment withaprivate foreign
company,whichhasbeengivenamonopolyfortheprovisionofcertainbasictelecommunicationservices,
noother enterprises inArmenia aregiven special rights andprivileges.
Approximately 30percentofallenterprises inArmenia arepublicly owned, while 70percent
arenon-public. Thelatter figure maybebroken down into64percentofprivate enterprises and6
percentofsemi-public enterprises.
Intheframework ofthe1996-1997programme ofprivatization anddenationalization ofpublic
enterprisesandunfinishedconstructionsites,itisestimatedthat4,927enterprisesfunctionintheterritory
ofArmenia. Ofthese 3,809 aresubject toprivatization.
According tothelastdataontheprivatization process, during 1994-19971,243 medium and
largesizeenterprises havebeenevaluated, and898medium andlargeenterprises havebeenprivatized.
Inaddition, 4,978 “small”establishments havebeenevaluated, and4,138 havebeenprivatized. As
regards incomplete construction sites, 162havebeenevaluated and4privatized.
Inrelation totheprivatisation ofagricultural enterprises, itisnotable that147enterprises were
privatised completely during 1995-1996. Among theseenterprises werethewinefactories ofYerevan
andArtashat, thebrewery ofYerevan, andtheMineral water factory ofJermuk. Among the10biggest
enterprises, presented intheanswer toQuestion 90ofWT/ACC/ARM/5, twoenterprises arestill
State-owned: theBrandy distillery andtheSaltfactory ofYerevan. TheBrandy distillery istobe
privatised bytheendoftheyearthrough international tender.
Q5. Forexample, Armenia ’sresponse toquestion 33indicates thatcertain telecommunications
services arereserved toasingle firm. InpartIIofWT/ACC/ARM/5, Armenia states thattelephone
services prices remain under statecontrol because ofthedominant roleofthestateinsupplying
these services. Clearly, there areenterprises thatreceived government benefits andmonopolies
inArmenia.
Asstated intheprevious reply, ajoint venture hascertain monopoly rights inthebasic
telecommunications sector, butthisistheonlyfirminanysector thatenjoys suchrights.WT/ACC/ARM/8
Page5
Q6. Inaddition, asnoted intheresponses toquestion 86and87,there isextensive overlap
between thelistofArmenia ’slargest firms andthelistsofthelargest trading entities. Itwould
appear thatmost ofthese firms remain state owned andmanaged atthistime. “Privatization ”
inagricultural trading firms consists ofdistribution of20percentofthestock toemployees, leaving
open thequestion ofhowthefirms aremanaged.
In1996,theeconomiccorporations"Hayagrospasarkum"(Armagroservice)and"Hayberriutyun"
(ArmProsperity)werepartiallyprivatised.Thirty-fourpercentofeachoftheseenterprisesisstate-owned
intheform authorised bytheMinistry ofAgriculture (holding), while sixty-six percenthasbeen
privatised. Each enterprise isdirected byaboard of5-7persons.
Q7. Armenia hasalsoindicated intheresponses toquestions 88and89thatitbankruptcy
lawhasnotfunctioned well, thatitwillbereplaced byother regulations, andthatthestatefirms
thatshould havegoneoutofbusiness are,instead, being reorganized under statesupervision with
adifferent procedure. Thiswould seem toindicate thatthestateintervenes rather thanpermitting
abankruptcy. Armenia hasalsodeclined todiscuss thepositive impact ofitsrefinancing operations,
both“directed ”andotherwise, onenterprise viability.
On3December 1996 theNational Assembly oftheRepublic ofArmenia adopted aLawon
Insolvency (Bankruptcy) andFinancial Recovery ofLegal Entities, Enterprises Without theStatus of
aLegal Entity andIndividual Entrepreneurs.
Thislawestablishes thebasisandprocedures forrecognizing insolvency (bankruptcy) oflegal
entities, enterprises without thestatus ofalegal entity andindividual entrepreneurs, procedures for
financial recovery anddissolution ofinsolvents (bankrupts), aswellastherights andobligations of
theirparticipants.
Nostructural reform support isprovided totheprivatized enterprises bythestate, i.e.thetrust
funding policy isnolonger used.
Thefinancial recovery programme isanystructural modification ofthebankrupt orsaleas
alotnotresulting intheliquidation oftheenterprise which isaimed atsatisfaction ofthecreditor claims.
Afinancial recovery programme canbesubmitted byabankrupt, themanager (whoshould bealicensed
auditor, accountant, orinsolvency manager), debtors holding atleast1/3ofsecured liabilities, debtors
holding atleast1/3ofunsecured liabilities, aswellaspersons holding atleast1/3oftheregistered
capital ofthecreditor company.
Thecostsassociated withtheimplementation ofafinancial recovery programme proposed by
persons holding atleast1/3oftheregistered capital ofthecreditor company andthecostsoftherequired
legal proceedings areborne bytheproponent party. Thecosts ofafinancial recovery programme
proposed byamanager orbyabankrupt arededucted from thedebtor assets.
Q8. While weunderstand thefactors thathavecreated these three circumstances, inlightof
this,wewould appreciate Armenia ’sreconsideration ofitsresponse toquestion 10,andafuller
description oftherolebeing taken bythestate atthepresent time tofoster certain inward
investments, maintenance ofemployment, andorderly industrial restructuring.
Theparticipation oftheArmenian Government inthepromotion ofdomestic investments, job
creation andsustainable economic rehabilitation islimited toafacilitating rolewhich aimstoensure
conditions conducive toentrepreneurial, commercial, andinvestment activity. TheGovernment isfully
committed toensuring anorderly transition toafullmarket economy asquickly aspossible, andhasWT/ACC/ARM/8
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nointerests inintervening inproductive sideoftheeconomy inamanner which would undermine
thisobjective.
Q9. Please provide alistofwholly orpartially Government-owned firms inArmenia.
According tothe1996 -1997 programme ofprivatization anddenationalization ofpublic
enterprises andunfinished construction sites, asofnowthefollowing arenotsubject toprivatization
inArmenia:
- civildefense andmobilization establishments
- target ranges andmilitary sites
- minting, statedecorations, sealsandstamps producing enterprises
- basic research institutions
- geographic, cartographic, topographic, hydrometeorological enterprises, enterprises exercising
control overconditions andprotection ofenvironmental andnatural resources
- statestrategic reserves andstorage facilities
- enterprises involved inextraction andconcentration ofraremetals, precious andsemi-precious
stones andmetals
- enterprisesprovidingsanitary-epidemiological,veterinary,plantsandforestryprotectionservices
- pedigreeenterprisesandcentres,grain-growingstationsandlaboratories,specialcropcultivation
enterprises, statenurseries
- standardization andmeasurements services
- railways, public highways, Yerevan metro
- TVandradio broadcasting enterprises
- R&Denterprises andenterprises producing radioactive anddecomposing matters
- enterprises ofreformatories andcorrective labour establishments
- stateenterprises andsitesabroad.
Another enterprises aresubject toprivatization andtheGovernment ispushing ahead withits
privatization programme asquickly aspracticable.
Q10. Please provide alistofanyfirms, whether ornotGovernment-owned, thataregranted
special rights orprivileges bytheGovernment. Inthislatter category, itisclear thata
state-sanctioned monopoly hasbeen granted inthefieldoftelecommunications. Please listany
other enterprises thathaveagovernment -sanctioned monopoly ontheinternational ordomestic
trade inanygood orservice.
With theexception ofArmenian Telephone Company, there arenoenterprises thatpossess
amonopoly endorsed bythestate.
Q11. Pleasedescribethetradingactivitiesofenterprises,whetherornotstateowned,thataccount
forasignificant portion ofinternational trade inanycommodity orservice. Inthisregard, we
areparticularly interested inthecurrent trade activities ofanyofthesurviving large trade and
production firms thatconducted trade forArmenia prior to1992.
Thefollowing enterprises account forthebulkofforeign tradeingoods andservices inArmenia:
Intheareaofexports:
- closed joint-stock company “Cologriv ”“Gagik ”-private;
- Plant “Shoghakn ”-state-owned (isinthe1996 -1997 privatization program);
- closed joint-stock company “Aghavni ”-private;
- “Lori”LTD -private;WT/ACC/ARM/8
Page7
- Zangezur Copper-Molybdenum Enterprise -state-owned;
Intheareaofimports:
- State Concern Haygazard -State-owned;
- closed joint-stock company “Cologriv ”“Gagik ”-private;
- SEHayhatshatik -State-owned;
- Plant “Shoghakn ”-State-owned;
- Armenian Telephone Company -joint-venture (51percentofthecompany isState-owned and
isinthe1996-1997 privatization program through international tender);
- closed joint-stock company “Aghavni ”-private.
Among theenterprises thatprovided trade forArmenia until1992, andatpresent retain an
extensive production andlarge commercial capacities, theYerevan Brandy Distillery, theAvan Salt
Factory andthemineral water factories ofJermuk andBjnishould bementioned.
TheYerevan Brandy Distillery isastate-owned enterprise, andhasabout 11representative
officesindifferentcountries,mainlyintheCIS.During1996,itexported1,306,000decalitresofbrandy,
thatmakes about USD 8million.
TheAvan SaltFactory isalsostate-owned. Itsexports were mainly toGeorgia. Lastyear,
accounting tosome 7,600 tonsofsalt,equivalent ofUSD 140,000.
During thesame period (1996), themineral water factories ofJermuk andBjniexported to
theUSA, Russia, Belarus, theUkraine, andTurkmenistan about 2,500,000 bottles ofmineral water
foracostofUSD 700,000.
Among exporting enterprises figure three private stock companies: theArarat Wine Factory,
theArmenianConfectionFactory,YerevanSoapFactory,aswellastheYerevanSparklingWineFactory
andtheYerevan Brewery.
Among importing enterprises figure thestate-owned flourmills ofYerevan andBaghramian,
aswellasthree private stock companies: theYerevan SoapFactory, theArmenian Tobacco Factory,
andtheOriental Specialities Factory.
Q12. Initsresponses toquestions 85-87, Armenia claims nottoknow ofwhich firms, either
stateowned ordomestic ,thathavedeclared bankruptcy. Webelieve thatArmenia isinaposition
toprovide information onwhich state-owned firms have gone bankrupt andceased operation.
Hasthisoccurred? Ifnot,what arethefactors enabling state-owned firms toendure when some
other firms have ceased operation? Areanyofthetenlargest industrial enterprises inArmenia
notstate-owned enterprises?
Fifty-eight enterprises havebeenrecognized bankrupt inArmenia, and35enterprises areunder
bankruptcy procedures. Bankruptcy actions for28enterprises havebeenfiledbytheTaxInspectorate
ofArmenia.
Asregards totheprivatization ofthetenlargest enterprises inArmenia:
- closed joint-stock company Armelectromachine -State-owned (isinthe1996-1997 privatization
program);
- closed joint-stock company Yerevan Electrolamp Plant -State-owned (isinthe1996-1997
privatization program through international tender);WT/ACC/ARM/8
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- closed joint-stock company Nairit Research Production Plant-State-owned (isinthe1996-1997
privatization program);
- Plant Saphire -State-owned (isinthe1996-1997 privatization program);
- closed joint-stock company Yerevancable -State-owned (isinthe1996-1997 privatization
program);
- Gyumri Sock Factory -private;
- Zangezur Copper-Molybdenum Enterprise -State-owned;
- Open joint-stock company Yerevan Automobile Production Plant -private;
- closed joint-stock company Yerevan Jewellery Plant -State-owned (isinthe1996-1997
privatization program);
- closed joint-stock company Armenmotor -private.
Q13. Pertheresponse toquestion 92,please listtheother enterprises inthemarket offering
thesame goods andservices forsaleasArmAgroService andArmProsperity. What istheir
ownership, andwhat portion ofthemarket dotheyrepresent.
Thelistofenterprises thathaveproduction orrender services similar tothose produced or
rendered bytheagglomerations Armagroservice andArmProsperity (byproduction, services andform
ofownership) isasfollows:
Fertilisers
- stock company Dvin -private;
- closed joint-stock company Nairit Research Production Plant -State-owned;
- Avan SaltFactory -State-owned;
- individual entrepreneurs.
Thesefirmsaccountforsome70percentofthefertilisersmarketofArmenia.Theremaining30percent
belongs toArmProsperity.
Spare parts
- openstock company Agrocomplect -State-owned;
- Electromashmatir -private;
- Individual entrepreneurs.
Theabove-mentioned enterprises account forapproximately 30percentofthemarket forspare parts
inArmenia. Theremaining 70percentbelongs toArmagroservice.
Pesticides
Individual entrepreneurs account forabout 30percentofthemarket forpesticides inArmenia. The
remaining 70percentbelongs toArmProsperity.
Liquid fuel
- Haynaftamterq -State-owned;
- Stock company Cobra -private.
These firms account forthe80percentthemarket forliquid fuelinArmenia. Theremaining 20per
centbelongs toArmagroservice.
Q14. Please report onstatesupport being provided forsome firms pending reorganization, per
theresponse toquestions 88and89.Please describe howmanagement ofthese firms isselected,
withparticular attention tothegovernment ’sroleaspartorfullowner.WT/ACC/ARM/8
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TheGovernment isnotproviding subsidies oranyotherkindoffinancial support tostate-owned
firms pending theirreorganization. Theenterprises mentioned inresponse toquestions 88and89of
WT/ACC/ARM/5 subject toreorganization andprivatization under theGovernment ’senterprise
restructuring programme were included inthemass privatization programme. Atthesame timethe
Ministry ofEconomy ismaking preparations toselltenlargestate-owned enterprises toforeign investors
through international tender. Itisexpected thattheses saleswilltakeplace during 1997, bringing in
bothprivatization revenues forthebudget, andmuch needed foreign capital andknow-how.
(h) Trade-Related Environmental Policies
Q15. Concerning theresponse toquestion 11,List2ofResolution 415of1995 indicates that
thesaleofpharmaceuticals andalcoholic beverages requires license. Does theterm“sale”inthis
regard include theimportation ofthese commodities, i.e.,would theimporter notengaged in
retail salealsoberequired toobtain suchalicense? Ifso,please indicate howmany suchlicenses
havebeengranted. Please outline therequirements forimportation ofthese goods intoArmenia.
TheList2ofResolution 415indicates thetypes ofactivities thataresubject tolicensing in
theterritory oftheRepublic ofArmenia. ByResolution 415thelicensing isnotrequired forimport
ofpharmaceuticals andalcoholic beverages totheRepublic ofArmenia. Inregard ofpharmaceuticals
importandexportareregulatedbyResolution124(seeanswertoQ25).Atthesametimepharmaceuticals
andbeverages aresubject tomandatory certification byResolution 205(seeanswer toQ47).
Q16. Theresponsetoquestion13statesthatthePresidentialDecree4January1992,“OnForeign
Economic Activity ”,provided that“allenterprises registered andoperating intheterritory of
Armenia ”,mayconduct foreign economic activity anddonotrequire additional registration
requirements. Theresponse toquestion 72states further thatregistration inArmenia asjuridical
person orsoleentrepreneur involves anautomatic procedure, subject tonorestrictions.
Thestateregistration ofenterprises andprivate entrepreneurs intheRepublic ofArmenia, as
wellastheprocedure andconditions fortheuseofinformation provided through theregistration process
aredefined intheLawonState Register ofEnterprises of2September 1993. Itisthecasethatno
additionalregistrationrequirementsareimposedwithrespecttotheconductofforeigneconomicactivity,
andthattheregistration procedure isautomatic.
Q17. Please outline these “automatic ”procedures andlisttherequirements forregistration
ofenterprises.
Theregistration ofenterprises andprivate entrepreneurs intheRepublic ofArmenia is
implemented through thefollowing procedure: thefounder oftheenterprise, inaccordance toArticle 12
oftheLawonState Register ofEnterprises, submits tothelocal division ofthestateregister of
enterprises thefollowing documents: theapplication oftheperson founding theenterprise, thefounding
documents drawn upincompliance withthelegislation oftheRepublic ofArmenia, and,ifneeded,
thelicense toengage inthetypeofactivity inquestion, towhich effect anentry ismade intherecord
log.Upon theverification ofsubmitted documents theinformation required byArticle 11ofthesame
law(thenumber andthedateofstateregistration, theorganizational-legal typeoftheenterprise, its
name andlocation, thetypeofoperation anditsduration, thecomposition ofthefounders ofthe
enterprise, itstypeofproperty etc.)isentered onastateregistration cardwhich isforwarded tothe
central bodyofthestateregister forthepurpose ofcodification, granting ofthestateregister number
andissuing thecertificate ofstateregistration. Auniform system ofcodification ofenterprises isin
operation intheRepublic ofArmenia. Thiswastheprocedure fortheinitial registration ofenterprises.
Inthecasewhen alterations andadditions aremade inthefounding instruments oftheenterprise, asWT/ACC/ARM/8
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wellasfounding subsidiaries anddetached divisions, reorganizing theenterprises itisnecessary to
undergo current stateregistration. Thelatter procedure requires submission ofrelevant documentation
about thechanges.
Q18. Mayindividuals thatarenotregistered as‘enterprises ’alsoimport freely? How would
someone whodidnothave enterprise registration goabout importing?
Individuals areallowed toimport limited quantities ofitems intoArmenia forpersonal use
without registration, although uponthesalethereof theymustberegistered asindividual entrepreneurs.
Asfortheeconomic operations ofindividual entrepreneurs, therearepermitted following registration
inaccordance withArticle 4oftheLawonState Register ofEnterprises.
Q19. Would anexporter berequired toregister asanArmenian enterprise inorder todevelop
export sales totheArmenian market?
Inorder toconduct economic activity intheterritory oftheRepublic ofArmenia theimporter
mustestablish branches, subsidiaries, representations orcreate jointventures thatareregistered inthe
stateregisteroftheRepublicofArmenia.NoregistrationcouldberequiredinArmeniaforanyenterprise
operating from outside thenational territory asanexporter toArmenia.
(j) Government- Mandated Counter-trade andBarter
Q20. Concerning barter andclearing arrangements referred tointheresponse toquestion 15,
Armenia confirms inpartIIofWT/ACC/ARM/5 thatallbilateral clearing arrangements have
been eliminated.
Armenia affirms thatallbilateral clearing settlements haveceased.
Q21. Whatprovisionsoflaworregulationwouldbeinvokedforthegovernmentorforindividuals
toconduct barter trade orenforce clearing arrangements inthefuture? How would
government-to-governmentagreementsthatrequirebalancedexportvaluesorotherwiseguaranteed
theavailability ofexports under suchanagreement beenforced bytheGovernment ofArmenia?
TheGovernment ofArmenia doesnotenvisage conducting barter orclearing settlements in
thefuture.
V. TRADE-RELATED INTELLECTUAL PROPERTY REGIME
Q22. InWT/ACC/ARM/5, Armenia states thatitwillneedatransition period of18to24months
from thedateofaccession forthefullimplementation ofvarious parts oftheWTO Agreement
ontheTrade Related Aspects ofIntellectual Property Protection (TRIPs). Since 1992 Armenia
hashadbilateral commitments fortheprotection ofintellectual property covering most TRIPs
requirements. Why thenshould thetiming oflegislation toimplement TRIPs provisions related
tothedateofArmenia ’saccession? CanArmenia indicate (a)thecurrent status ofanylegislation
necessary toimplement theTRIPs agreement and(b)thespecific datewhen itexpects these laws
tobeimplemented?
Since 1992, inaccordance withbilateral commitments several stepswereundertaken: in1993
theLawonPatents wasadopted; in1995theProvisional Resolution onTrademarks andService Marks
wasissued; in1996 theLawonCopyright andrelated rights wasadopted. These lawsandlegislativeWT/ACC/ARM/8
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actsareinfullconformity withtheprovisions oftheWTO TRIPs Agreement, except withrespect to
somecivil,administrativeandcriminalproceduresandenforcementarrangements.Themissingprovisions
areexpected tobeincluded intheCivil, Criminal andLitigation Codes, which arenowunder preparation
bytherelevant commissions oftheNational Assembly andMinistry ofJustice. TheCodes areplanned
tobeadopted bythesecond quarter of1998. ThelawsonUndisclosed Information, Layout-designs
ofIntegrated Circuits andProtection ofPlant Varieties weredrafted andarenowunder consideration
ofthecorresponding ministries andGovernment agencies. These lawsareexpected tobepassed by
mid-1998. Atthesametime, thedraftlawsonProtection ofTrade andService marks andAppellations
ofOrigin andonTradenames areunder Parliament ’sconsideration areexpected tobeadopted bythe
endof1997. Alltheabove-mentioned drafts areelaborated onthebaseoftherelevant provisions of
theTRIPs Agreement.
Inviewoftheamount ofpreparatory work involved, Armenia would liketoseektheagreement
ofMembers forthefinalimplementation ofitscommitments inthisareawithin sixmonths ofaccession..
Q23. Please further substantiate itsanswers toquestions No.125to128inWT/ACC/ARM/2
regarding theprotection oftrademarks, service marks, appellations oforigin, patents including
licensing procedures, industrial design andtextile design, astheanswers given inWT/ACC/ARM/5
inthisrespect arestillincomplete.
Inaddition totheanswer toquestion 125ofWT/ACC/ARM/2 wecanreport thatthedraft
oftheLawonProtection ofTrade andService marks andAppellations ofOrigin iscurrently under
review intheNational Assembly andthattheprovisions ofParagraphs 2and3ofArticle 16ofthe
TRIPs Agreement relating to'well-known 'trade andservice marks, havebeentaken account ofin
thisdraftandshallbeelaborated insub-legislative instruments tobedefined inthefuture.
InArticle 16oftheLawonPatents, referred tointheanswer toquestion 126,itstates that:
"based ontheinterests ofthedefense oftheRepublic ofArmenia andtheprotection ofcivilorder,
aswellasinemergency situations thegovernment oftheRepublic ofArmenia reserves theright, without
theagreement ofthepatent holder, toallow thirdpersons tousetheinvention, theefficacious appliance,
ortheindustrial sample, binding thelattertopaymonetary compensation tothepatent holder (obligatory
license)".
Pursuant toArticle 13(b) oftheTRIPs Agreement, thiscanbeviewed asacaseofextreme
necessity forthecountry orofanother urgent critical situation, thusignoring therequirement thatsuch
usemybepermitted onlyprovided reasonable effort hasbeenexerted bythepotential usertoobtain
anauthorization from theholder oftherights.
With respect toquestions 127and128weclarify thatArticle 7oftheLawonPatents defines
theterms ofpatentability ofanindustrial sample, andareincomplete conformity withArticle 25of
theTRIPs Agreement. ThisArticle 7alsoguarantees theprotection ofsamples ofthetextile industry
inthemanner provided forbyArticle 25(b) oftheTRIPs Agreement. There isalsoareference tothe
same effect inArticles 2(Thetypes ofindustrial samples) and5(Thecomposition oftheapplication)
oftheProcedure onTheformulation andsubmission ofanapplication forissuing apatent forthe
industrial samples adopted bythePatent office oftheRepublic ofArmenia onFebruary 10of1994.
Assetforth inArticle 4oftheLawonPatents theright relating toanindustrial sample is
protected bythestateandisverified byapatent. Thepatent verifies theauthorship oftheobject of
industrial property, theprovenance ofsuchobject andtheexclusive righttouseit.Thepatent foran
industrial sample isvalid foraperiod of15years beginning fromthereceipt ofanapplication bythe
Patents office oftheRepublic ofArmenia. Article 25oftheLawonPatents confirms thatanexpertWT/ACC/ARM/8
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examination determines theconformity ofanapplication forissuing apatent foranindustrial sample
totherequirements offormat, thecompliance ofthesample tothelocalinnovation terms.
Q24 Asregards “enforcement ”,please explain indetail theArmenian government ’sprocedures,
remedies andpenalties, including possible amendments ofthepresent legislation asmentioned
inanswer toquestion No.23inWT/ACC/ARM/5, astheinformation submitted byArmenia in
documents WT/ACC/ARM/5 and2(questions No135to138)isagain incomplete.
With respect toquestions on"application" weclarify thatArticle 33oftheLawonPatents
andArticles 18,26,32-35 oftheProvisional Resolution onTrade andService Marks provide references
tothedisputes thatmayberesolved inacourt oflaw.Inthisrespect foreign nationals enjoy conditions
equal tothose oftheArmenian nationals. Nevertheless theprocedures, sanctions andfinescurrently
ineffect withrespect totheapplication oftheprotection ofintellectual property havebeendefined
bythelegislation oftheformer Soviet Union. Incaseoftheinfringement ofexclusive rights ofthe
patent holder therules ofcivillegislation ontheresponsibility forinflicting damage apply, aswell
asthegeneral rulesonobligations, which donotentirely conform withtheconditions andrequirements
ofthemarket economy. Forexample:
i. Article 502oftheCivilCode presently ineffect states thattheowner ofacopyright isreserved
therighttodemand restoration oftheinfringed rightordemand prohibition ofthepublication ofthe
work orcessation ofitsdissemination. Theprohibition orcessation oftheabove-mentioned actions
maybeimposed byjudicial bodies only, whereas administrative bodies arenotreserved suchauthority.
ii. Articles 525and526oftheCivilCode provide thatnoonecanuseaninvention oranindustrial
sample without theagreement ofthepatent holder, i.e.theperson thatowns thepatent. Thismeans
thatanobligation emerges, incaseofthebreach ofwhich, according toArticle 217oftheCivil Code,
thedebtor must indemnify thedamage thuscaused tothecreditor.
iii. Article 140oftheCriminal Code states thattheviolation ofthecopyright, thepublication of
theinvention before submitting theapplication, appropriation oftherighttowards theinvention, as
wellascoercion intojointauthorship orinclusion intothejointauthorship ofindividuals thathave
notparticipated inthecreation oftheinvention arepunishable bycorrection work ofupto2years
orafineofupto300drams.
iv. Article 157oftheCriminal Code states thatcheating thebuyers andtheclients ispunishable
bycorrection work ofupto2years orafineofupto400drams.
v. Article 132oftheCivil litigation Code (‘bases forsecuring aclaim’)provides forthecourt
orthejudge, upon petition ofthepersons participating inthecaseoronhis/her owninitiative, to
undertake measures tosecure theclaim. Thesecuring oftheclaim ispermitted throughout theduration
ofthecaseincases when failure toapply suchmeasures mayimpede ormake theaward bythecourt
impossible. Article 133ofthesame Code provides forthefollowing measures forsecuring aclaim:
- arrestingthepropertyorthefundsbelongingtothedefendantunderhisorotherpersons’disposal
- restricting thedefendant from performing certain actions
- prohibiting otherpersons fromtransferring property tothedefendant orfulfilling otherliabilities
towards thelatter.
Where necessary several measures tosecure aclaim maybeapplied concurrently. Article 138
oftheCivil litigation Code states thatcomplaints maybefiledagainst alldecisions withrespect to
securing claims andsuchdecisions maybeappealed. Article 139provides fortheindemnification of
damage caused tothedefendant asaresult ofsecuring theclaim.WT/ACC/ARM/8
Page13
Asforthesystem ofapplication ofborder measures against theviolation ofintellectual property
rights, thelegislation currently ineffect doesnotprovide forsuchasystem.
Theprocedures, sanctions andfinesthatarecurrently lacking shallbeprovided forinthenewCivil,
Criminal andLitigation Codes under elaboration bytherespective Committees oftheMinistry ofJustice
andtheNational Assembly. According tothecommitments thatArmenia undertakes itslegislation will
beinconformity withtheWTO provisions within sixmonths following itsaccession.
QUESTIONNAIRE INANNEX 3OFWT/ACC/1 ONIMPORT LICENSING
Q25. Neither theresponses toquestions 39-43 about this information contained in
WT/ACC/ARM/5 northeannexes listed inWT/ACC/ARM/6 fully respond tothequestion in
thissection. Forexample: there isnoinformation given onthefixed criteria applied bythese
Ministries fortheissuance ofthelicenses ortowhere suchinformation ispublished andavailable
toimporters andforeign exporters.
Thecriteria ofissuing licences bytheMinistry ofHealth areregulated by:
Resolution 124andResolution 315,according towhich theexportation oftheproducts "Pharmaceuticals
13.2, 29.41, 30.03, 30.04" and"Pharmaceuticals 05.10, 12.11, 13.02, 29.38, 29.41" iscarried out
through authorisation issued bytheMinistry ofHealth oftheRepublic ofArmenia. Thesameresolutions
stipulate that"permission forimportation andexportation ofdrugs isgiven bytheGovernment of
Armenia".
Theby-law onissuing authorisation forimporting andexporting pharmaceuticals, stipulates
that:
- authorisationforimportationandexportationofpharmaceuticalsareissuedbythePharmaceutical
Inspection oftheMinistry ofHealth oftheRepublic ofArmenia;
- theauthorisations areforsingle useonly;
- toissue anauthorisation thefollowing documents andconditions arerequired:
a) alicenceforcommercialactivitiesinvolvingpharmaceuticalproductsintheRepublicofArmenia
(Resolutions 161/415 and36).TheResolutions stipulate thattheproduction andwholesale andretail
trade inpharmaceutical products andmedical utensils issubject toState licensing intheRepublic of
Armenia;
According toResolution 36:
- pharmaceutical andmedical activities aresubject tolicensing intheRepublic ofArmenia;
- licensing iscarried outbytheMinistry ofHealth;
- licences areissued foraperiod of5years.
Licences forproducing pharmaceutical products andmedical utensils areissued bythePharmaceutical
Department oftheMinistry ofHealth. Theprocedures forissuing licences arebeing elaborated atpresent
andwillbeready forapproval shortly.
Licences forwholesale andretail trade inpharmaceutical products andmedical utensils areissued by
theStateLicensing Committee oftheMinistry ofHealth. Theprocedures issuing licences wereapproved
byResolution 188.
Licensing iscarried outbytheMinistry ofHealth through itsagencies:
- theStateLicensing Centre systematises licensing procedures, prepares thenecessary documents
andexamines theprofessional knowledge ofapplicants withacomputerised testing system.WT/ACC/ARM/8
Page14
Thecomputerised testing iscarried outwithsoftware approved bytheMinistry ofHealth. The
testisconsidered tobesuccessful iftheapplicant answers correctly atleast50of100questions.
Theapplicants whodonotpassthetestcantakeitagain within aperiod ofonemonth. During
thatperiod theapplicant mayattend courses, andparticipate inseminars andconferences of
professional associations;
- theSector Licensing Commissions gives professional advice, through procedures fixed bythe
Ministry ofHealth, ontheconformity ofapplicants tothelicensing criteria;
- theCentral Licensing Commission decides toissue alicence ortorefuse it,upon theresults
ofthecomputerised testing andtheprofessional advice. Thedecisions acquire legalstatus after
being signed bytheMinister ofHealth.
According totheabove-mentioned procedures, theprocess oflicensing begins withsubmission bythe
applicant oftherequired documents, determined bytheMinistry ofHealth. Thelistofrequired
documents comprises:
- anapplication;
- aspecial form drawn upbytheMinistry ofHealth withonephotograph;
- acopyofadiploma issued byanestablishment having alicense forproviding medical education;
- acopyofacertificate issued byanestablishment having alicence fororganising clinical studies;
- copies ofother certificates about post-graduate studies;
- copies ofother licences forprofessional activities;
- copyoftheemployment record;
ifthelicensee isanestablishment:
- copies ofdocuments onthelegalorganisational status oftheestablishment;
- theplanofthepremises theestablishment occupies;
- information about medical equipment andtools theestablishment possesses;
- information about theestablishment 'sstructure andcapacities;
- acertificate from theState Hygienic andEpidemiological Service;
- information about thetypes ofprofessional activities oftheestablishment;
- copies ofother licences ofprofessional activities oftheestablishment;
ifthelicensee isanindividual entrepreneur:
- acopyoftheregistration certificate intheState register;
- copy(ies) oflicence(s) ofprofessional activities;
- aplanofthepremises where theindividual entrepreneur carries outhisactivities;
- information about medical equipment andtools theindividual entrepreneur possesses;
- acertificate from theState Hygienic andEpidemiological Service.
b) Imported orexported pharmaceutical products mustberegistered intheRepublic ofArmenia
(fortheprocedures ofregistration seebelow).
c) There mustbeconformity ofthequality ofimported orexported pharmaceutical products to
thequality standards accepted intheRepublic ofArmenia.
Theverification ofconformity ofquality iscarried outaccording toDecree 725oftheMinistry of
Health, which stipulates:
- before theadoption oftheLawonpharmaceuticals andother legislative andnormative acts
pertaining tothedomain, consider asvalid theActsadopted andusedintheFSU;
- before theadoption oftheArmenian Pharmacopoeia, thequality ofpharmaceuticals is
standardised bytheInterim State Standard System (ISSS) ofpharmaceuticals;
- theISSS isbased ontheFSUState, private andtemporary pharmacopoeias;WT/ACC/ARM/8
Page15
- theRepublic ofArmenia accepts international andEuropean pharmacopoeias: pharmacopoeias
oftheUSA, theUK,Germany, andFrance;
- thequality certificates ofthepharmaceutical products andmedical utensils presented for
registration intheRepublic ofArmenia areaccepted without preliminary testing iftheymeet
therequirements oftheabove-mentioned pharmacopoeias;
- theadoption, revision, andapproval ofallpharmacological clauses, technical conditions and
provisions areperformed bythePharmaceutical Inspectorate oftheMinistry ofHealth;
- foreachpharmaceutical, there exists onlyonequality certificate, which hasbeenprepared by
therelevant producing enterprise andbywhich itwasregistered intheRepublic ofArmenia.
Theevaluation ofpharmaceutical products iscarried outonthebasisofthatnormative technical
document.
d) Imported andexported pharmaceuticals mustbegoodforuseforatleasttwo-thirds oftheperiod
oftheirvalidity.
Toreceive anauthorisation, thefollowing documents arerequired:
- anapplication
- acertificate relating totheacquisition ofthepharmaceutical products
- alicence totrade inpharmaceutical products inArmenia
- acertificate ofquality issued bytheproducer
Authorisations areissued fortheperiod necessary tocarry outtheengagements, butnolonger
thanoneyear. Thevalidity ofanauthorisation canbeextended upon thesubstantiated request ofan
applicant. Thebody issuing theauthorisation cansuspend itsvalidity orcancel it.
Within 10daysafterimportation orexportation, anapplicant should present samples tothe
Pharmaceutical Inspectorate forverifying thequality ofthepharmaceutical products.
Requests forauthorisation canberefused andissued authorisations canbesuspended if(a)
thereisincorrect information inthepresented documents, (b)theperiod ofvalidity ofthepharmaceutical
products isover, (c)theproduction serial numbers ofimported pharmaceuticals donotcorrespond
withthesubmitted quality certificates, (d)theimported pharmaceuticals arenotregistered inArmenia.
Authorisations areissued within 15daysform thedateoftheapplication. Unjustified delays
andrefusal toissue authorisation, aswellsuspending andcancelling issued certificates, cangiverise
tojudicial procedures.
Resolutions 417and205:
- provides fortheobligatory certification ofcertain products introduced intoArmenia
- establishes thatcertificates areissued andrecognised bytheAgency ofStandardisation,
Measurement andCertification (SARM) oftheGovernment ofArmenia
- defines theprocedures ofimportation ofproducts subject tocertification
- liststheproducts subject tocertification
Information about licensing canbeobtained fromtherelevant departments oftheMinistry of
Health, which areresponsible forissuing licences andregistering pharmaceuticals, aswellasfrom
theInformation Centre oftheMinistry, which isresponsible forpublishing anddistributing thelists
ofpharmaceuticals registered intheRepublic ofArmenia. TheInformation Centre publishes the
periodical “Medicine andmedicaments ”(4issues ayear), aswellastheregularly updated listsof
substances controlled intheRepublic ofArmenia andofpharmaceuticals allowed forsalewithout aWT/ACC/ARM/8
Page16
prescription. TheInformation Centre isplanning tohaveaHome Page inInternet in1997 sothat
foreign organisations havequick access toinformation from Armenia.
Theimportation ofpesticides intoArmenia isregulated bytheProtocol onissuing authorisation
fortheimportation ofpesticides intotheRepublic ofArmenia, elaborated onthebasisofResolution 124.
According tothese procedures:
a) authorisations areissued toenterprises (independently oftheirformofownership) andcannot
betransferred toother persons
b) toissueanauthorisation, anamount, equivalent totheminimum salary fixedbythelegislation
oftheRepublic ofArmenia, iscollected andpaidintotheState budget
c) onlysingle-use authorisations areissued toenterprises
d) thedocuments required forissuing authorisations are:
- anapplication from theenterprise
- thecertificate ofquality andorigin oftheproduct issued bytheproducer
e) authorisations aregiven foraperiod ofoneyearandcanbeextended atthesubstantiated request
oftheapplicant
f) applications canberefused andissued authorisations canbesuspended ifincorrect information
isfound inthepresented documents (e.g.iftheproducts prove tobeforbidden oroutdated
ornotregistered intheRepublic ofArmenia);
g) unjustified delays andrefusal toissue, orsuspending orcancelling ofauthorisations cangive
risetojudicial procedures (seeintheanswer toQ28)
Authorisations areissued afteralaboratory testperformed bytheService ofPhitoprotection
oftheMinistry ofAgriculture confirms thattheproduct corresponds tothecertificate oftheproducer.
Information onissuing authorisations canbeobtained from theDirection ofServices ofthe
Ministry ofAgriculture, theLicensing Direction oftheMinistry ofAgriculture ,andtheService of
Phitoprotection oftheMinistry ofAgriculture.
Q26. There isnoinformation onhowthelistofpermissible imports isdeveloped.
Thelistofpesticides allowed forimportation isbased onthe1992-1996 Listofchemical and
biological products, regulators ofplant growth andferments allowed foruseagainst blight, insects
andweeds infarms ,approved bytheStateChemical Commission oftheCIScountries inOctober 1991.
Thelistofpharmaceuticals allowed forimportation ismade onthebasis oflistsofproducts
registered inArmenia and/or products subject toobligatory certification (Resolutions 417and205),
i.e.those products canbeimported which areregistered andhavepassed certification intheRepublic
ofArmenia. There arenootherrestrictions forimportation ofproducts, except fordrugs, theimportation
andexportation ofwhich areregulated byResolution 124oftheGovernment ofArmenia,
Q27. Itwould appear thatthedecision togrant ordeny importation ofthese products canbe
made without suchcriteria, onadiscretionary basis, bytheMinistries ofHealth andAgriculture.
Licences toimport pesticides areissued onthebasisofcriteria specified intheResolution 124
andtheProtocol onissuing authorisations fortheimportation ofpesticides intotheRepublic ofArmenia .
Decisions allowing orrefusing importation ofpharmaceutical products intotheRepublic ofArmenia
aretaken onthebasisofthecriteria determined bytheabove-mentioned Resolutions oftheGovernment.WT/ACC/ARM/8
Page17
Q28. Please listtheobjective criteria useddodetermine which agricultural chemicals maybe
imported, e.g., what sound scientific basis isused bytheAgricultural Ministry todevelop the
listofpermitted imports? How doesArmenia ensure thatthese criteria areapplied? How isthe
feeofamonth ’sminimum salary related tothecostofprocessing thelicense application? What
percentage oflicensing applications foragricultural chemicals aredenied? Please describe the
process ofjudicial appeal fortherejection oflicensing applications.
Thelistofpesticides allowed toimportation isbased onthe1992-1996 Listofchemical and
biological products, regulators ofplant growth andferments allowed foruseagainst blight, insects
andweeds infarms ,approved andregistered bytheStateChemical Commission oftheCIScountries
inOctober 1991.
Asascientificbasisforcompilingthelist,themethodology,criteriaandproceduresofevaluation
ofpesticides accepted intheFSUareused. Other pesticides canbeadded tothelistifnecessary.
Importation ofpesticides notregistered intheabove-mentioned listisforbidden according totheProtocol
onissuing importation authorisations ,based onResolution 124.
Theamount collected forissuing licences isequal totheminimum salary fixed intheRepublic
ofArmenia plusthepriceofrendered services. Allpayments aredetermined bytheprices ofrendered
services fixed inrelevant tariffs. Forexample, 10,600 drams arecollected foranimportation licence.
Thatamount comprises theprice ofrendered services andtheprice ofthelicence itself (paper, etc.).
Sofar,only2percentofapplications forimportation licences havebeenrefused. Unjustified delays
andrefusal toissue, orsuspending orcancelling ofauthorisations andlicences cangiverisetojudicial
procedures, within 30daysaftertherefusal orsuspension.
Q29. What objective criteria applied todetermine which firms orindividuals may import
pharmaceutical products? Please listallpharmaceutical/chemical products that require
“registration ”anddescribe howsuch“registration ”isobtained, bybothdomestic producers and
importers.
Thecriteria thatdetermine theright ofindividuals orenterprises topursue activities of
importation andexportation ofpharmaceutical products areregulated byResolutions 124and315and
theProtocol onissuing authorisations, Resolutions 417and205,andResolutions 415/161/ and36.
Theregistration ofpharmaceutical products andmedical utensils isperformed intheRepublic
ofArmenia according toProvisions ontheregistration ofpharmaceutical products andmedical utensils
intheRepublic ofArmenia andtheProtocol ofregistration ofpharmaceutical products andmedical
utensils intheRepublic ofArmenia approved bythePharmaceutical Department oftheMinistry of
Health. TheProvisions andtheProtocol stipulate that:
- pharmaceutical products andmedical utensils registered intheproducing country andhaving
adequate production conditions aresubject toregistration intheRepublic ofArmenia. The
registration isperformed byaproducing organisation orbyanational authority ifthesame
product ismanufactured indifferent countries;
- thePharmaceutical Inspectorate oftheMinistry ofHealth, asamember oftheWHO
Accreditation System ofPharmaceuticals, accepts WHO suggestions andrecommendations.
Theregistration ofpharmaceutical products andmedical utensils produced inthemember
countries oftheSystem, particularly intheEuropean Union andtheUSA, isperformed in
asimplified way,without additional pharmaceutical andclinical tests. Fortheproducts ofother
origin, these testscanberequired byadecision ofthePharmaceutical Inspectorate;WT/ACC/ARM/8
Page18
- thequality requirements ofthepharmaceutical products andmedical utensils registered inthe
RepublicofArmeniashouldbeinconformitywiththerequirementsoftheInterimStateStandard
System ofpharmaceuticals oftheRepublic ofArmenia;
- ifthere isurgent demand forapharmaceutical product oramedical utensil notregistered in
theRepublic ofArmenia, thePharmaceutical Inspectorate cantakeadecision toregister
temporarily thatproduct andgiveapermission forsingle medical useonly. Suchtemporarily
registered pharmaceuticals andmedical utensils arenotlisted intheArmenian Pharmacopoeia
andnocertificate ofregistration isissued.
Fortheregistrationofpharmaceuticalproducts,theproducingestablishmentmakesanapplication
attheDepartment ofRegistration, submitting thenecessary documents andsamples foreachproduct.
Afeeiscollected forthetesting ofthesamples. Testing iscarried outbythespecialists ofthe
Pharmaceutical Inspectorate. Ifnecessary, other specialists canbeinvolved inthetesting.
Submitted documents passapreliminary examination, toverify whether alltherequired
documents arepresented (duration: 1month aftertheapplication issubmitted). Then thedocuments
andthesamples areexamined indetail (duration: 2months). Iftheresults ofthedetailed examination
andlaboratory testsarepositive, thePharmacological andPharmacopoeia Councils takeadecision
onregistration. Thedecision isapproved bytheDirector ofthePharmaceutical Agency.
Apharmaceutical product isconsidered registered aftertherequired feesarecollected. The
collected feesareindicated inaspecial list.Acertificate ofregistration isvalid for5years (forlocal
products) and10years (forforeign products).
Thelaboratory testing ofbothforeign andlocalpharmaceutical products isperformed according
tothetechnical documents oftheproducing firm, which should bebased oninternationally accepted
pharmacopoeias.
Theresponsible bodyforregistering pesticides intheRepublic ofArmenia istheStateChemical
Commission oftheRepublic ofArmenia, thecreation ofwhich willbecompleted in1997. Atpresent,
theoldmethodology, criteria andregulations ofevaluation andregistration ofpesticides accepted in
theFSUisstillinuse.TheStateChemicalCommissionoftheRepublicofArmeniawillhavelaboratories
accredited tomake experiments, liketheToxicological Control Laboratory andtheService of
Phitoprotection.
Registration isperformed oncontractual bases. Theparties tothecontract aretheenterprise
producing pesticides andthebody performing registration. Thecontract comprises thevolumes and
thetime-table ofexperiments, aswellastheprices ofthework done. Registration consists ofthe
following phases:
- study oftheapplication forregistration;
- registration tests;
- approval ofbiological regulations fortheuseofthepesticide;
- approval ofsanitary norms andrules andhygienic norms;
- approval ofregulations inecological terms, including approval ofenvironmental norms and
rules;
- preparation ofdocuments forregistration.
Theresults oftestsshould besenttotheState Chemical Commission forafinalconclusion.
Theprocedures ofregistration arethesame bothforinternal andexternal producers.WT/ACC/ARM/8
Page19
Q30. Please listtheobjective criteria usedtogrant import licenses forpharmaceuticals, i.e.,
what sound scientific basis isusedtocreate thelistofproducts eligible forimportation? What
percentage oflicensing applications forimport ofpharmaceuticals aredenied?
Theprinciples ofcertification ofpharmaceutical products andtheprinciples forestablishing
thelistofproducts permitted toimportation aregiven inResolutions 205and417.
Thecertification system oftheRepublic ofArmenia willbeapproved shortly. Atpresent the
provisions oftheWHO certification system areapplied andtheprovisions ofthenational certification
system elaborated bytheSARM, which arenotapproved yet.
Iftheexteriorofimportedpharmaceuticalproductsseemsdoubtful,independentlyofthecountry
where theproduct passed primary certification, itistested inArmenia whereupon acertificate of
conformity isissued. According tothetariffs ofcertification ofproduction volumes ofResolution 417,
10,800 drams arecollected. Alltheexpenses oflaboratory testsarepaidbytheimporter. Ifthe
application issubmitted byanintermediary, thePharmaceutical Agency carries outselective orcomplete
testing oftheproduct, independently ofthecountry oforigin. Ifantibiotics, vaccines, pharmaceuticals
ofbiological origin, andinsulin areimported, theyaresubject tolaboratory analysis independently
ofthecountry oforigin. Since September 1996, 2to5percentofapplications havebeenrejected because
ofthefactthattheproducts were notregistered.
Q31. Later inWT/ACC/ARM/5, inresponse toquestion 78,Armenia states thatitintends to
develop sanitary andphytosanitary measures andtoadopt theWTO Agreement ontheApplication
ofSanitary andPhytosanitary Measures. What hasArmenia done since thistextwasforwarded
totheWTO Secretariat inspring 1996 toachieve these objectives?
Please seetheanswer toQ80.
Q32. Arelicenses required onlyinrespect ofimports andexports, orisdomestic production
oftheproducts concerned alsosubject toalicensing requirement? Ifthere isnodomestic
production, would suchproduction besubject toalicensing requirement? Iflicenses arerequired
onlyinrespect ofimports andexports, please givetheprecise nature oftherequirement foreach
product andtheWTO justification fortherequirement itselfandforitsapplication onlytoimports
andexports. Iflicenses arerequired onlyinrespect ofimports andexports andofdomestic
production, please indicate whether therequirement is(would be)thesame forimported goods,
exported goods anddomestically produced goods and,ifnot,thereasons forthedifferences.
Theconditions ofregistration andlicensing areobligatory forimporters, exporters anddomestic
producers. Theprocedures forissuing licences andauthorisations arethesame bothforinternal and
external producers. Therequirements arealsothesame forimported andexported products.
Q33. Further information onthesystem forgranting licenses foragricultural chemicals falling
within HS38.08 isrequested. Specifically on1)howthesystem of“prior registration ”works
and2)howthe“scientific assessment ofenvironmental risk”isconducted, bywhom itisconducted
andifforeign certificates, testresults etc.areaccepted inthisprocedure.
Aswasmentioned above, theSystem ofPreliminary Registration isbased ontheprinciple that
unregistered pesticides must notenter Armenia. Thescientific evaluation ofenvironmental risks is
given byspecialised agencies oftheMinistry ofAgriculture theAgency forCultivation, theVeterinary
Agency andtheMinistry ofEnvironment andtheState Chemical Commission thatisbeing created.
Theprocedure ofpesticide registration involves alsotheevaluation ofenvironmental risks (seetheWT/ACC/ARM/8
Page20
answer toQ29). Theresults oftestscarried outforthose purposes areexamined bytheabove-mentioned
Agencies forafinalconclusion withrespect toenvironmental risks.
Q34. Armenia states inconnection withlicenses forpharmaceuticals that“TheMinistry intends
todevelop andstreamline these arrangements bytheof1996”.Could Armenia provide further
information onthisintended work including thescope andtiming?
Concerning therationalisation oflicensing pharmaceutical activities, theMinistry ofHealth
hasadopted orwillsoonadopt thefollowing acts:
- Order 5oftheMinistry ofHealth ofJanuary 91997, which defines thelistofpharmaceutical
products andmedical utensils subject toregistration, aswellasthefeesforregistration and
re-registration;
- theProtocol onissuing authorisations forexportation ofpharmaceuticals from theRepublic
ofArmenia ofJune201996, which defines theprocedures forissuing authorisations for
importation andexportation ofpharmaceutical products andmedical utensils;
- theSARM iselaborating theprovisions oftheNational certification system, which willbe
presented forapproval shortly;
- theProtocol onissuing licences fortheproduction ofpharmaceuticals andmedical utensils
isbeing elaborated andwillbepresented toapproval shortly. Theprotocol takes intoaccount
internationally accepted criteria fortheproduction ofpharmaceuticals andmedical utensils;
- Resolution 188oftheGovernment ofArmenia ofJune241996 onapproving theprocedures
ofState professional licensing ofmedical andpharmaceutical activities intheRepublic of
Armenia;
- theLawonpharmaceuticals isbeing elaborated andwillsoonbepresented forapproval.
Q35. Could Armenia comment onhow“alicense feeofmonth ’sminimum salary ”corresponds
toGATT Article VIII.1, which stipulates thatfees“shallbelimited inamount totheapproximate
costofservices rendered ”.
Thefeecollected forissuing licences isequal totheminimum salary fixed intheRepublic
ofArmeniaplusthepriceofrenderedservices.Theoverallamountisdeterminedbyapplyingcoefficients
reflecting thecostoftheservice.
QUESTIONNAIRE INANNEX 3OFWT/ACC/1 ONCUSTOMS VALUATION
Q36. Section 3.1.6. oftheMemorandum oftheForeign Trade Regime provides thatArmenia ’s
customs valuation regulations arefullybased ontheprovisions oftheagreement onImplementation
ofArticle VIIoftheGATT, nowtheWTO Agreement onCustoms Valuation. Armenia ’scustoms
valuation regulations describing theappraisment lawarecontained inGovernment Decree No.615
dated 6December 1993.
TheArmenian regulations relating tocustoms valuation arecontained intheResolution 615
of6December 1993andareentirely based ontheprovisions oftheWTO Agreement ontheCustoms
Valuation.AtthesametimetheArmenianregulationsforestablishingthecustomsvaluearealsoreflected
intheLawonCustoms Tariffs of18August 1993. Thelatter doesnotcontradict theprovisions of
theWTO Agreement ontheCustoms Valuation.WT/ACC/ARM/8
Page21
Q37. Areview oftheEnglish translation ofthecustoms valuation regulations confirmed by
Decree No.615 of6December 1993, reveals thatthelegislation, while tracking some oftheconcepts
oftheWTO Agreement onCustoms Valuation, lacks many oftheprovisions oftheWTO
Agreement, andalsoappears toprovide forvaluation methods thatmaybedirectly contrary to
theAgreement.
Theregulations donotcompletely include theprovisions oftheWTO Agreement, although
theResolution isentirely based ontheprovisions oftheWTO Agreement anddoesnotcontradict it.
Nevertheless, theGovernment ofArmenia plans toadopt anewResolution oncustoms valuation within
thefirstsixmonths of1997, which shallinclude alltheprovisions, aswellastheprocedures forthe
application oftheWTO Agreement onCustoms Valuation.
Q38. ThereisalsoaproblemoftranslationconsistentwiththeterminologyusedintheAgreement,
e.g.,“bargain price”instead of“transaction value”and“liable price ofpayment against the
actual payment ofimported goods ”instead of“price paid orpayable ”.Onthebasis ofthe
documentation provided, weareunable todetermine whether thisisasubstantive oratranslation
problem.
Thisissuesolely relates totranslation errors, sincetheterminology usedintheresolution does
notcontradict theterminology oftheWTO Agreement onCustoms Valuation.
Q39. InWT/ACC/ARM/5, Armenia acknowledged thelackofspecificity incertain keyareas
ofDecree No.650 anddeclared itsintention toensure thatthenecessary legal basis isinplace
toimplement theWTO Customs Valuation Agreement fullybythefirstquarter of1997 andthe
“Decision of24September 1984 ontheValuation ofCarrier Media Bearing Software forData
Processing Equipment ”bytheendof1997.
TheGovernment oftheRepublic ofArmenia iselaborating anewResolution onCustoms
Valuation, which shallalsocover theprocedures relating tocustoms valuation. Atthesame time, until
theendof1997 itisalsoplanned toadopt andapply theresolution of27September 1984 onCarrier
Media Bearing Software forDataProcessing Equipment.
Q40. WhywillArmenia needthismuch timetorevise asystem thatithasidentified asessentially
inconformity withtheprevious GATT Customs Valuation Agreement.
Taking intotheaccount thattheregulations ineffect donotcover anumber offundamental
provisionsoftheWTOitisdeemedmoreexpedienttodefinenewregulationsthatwouldentirelyconform
withtheWTO Agreement onCustoms Valuation. Forthispurpose theendofthefirsthalfof1997
issetasthedeadline.
Q41. Please describe actions taken byArmenia tobring itscustoms valuation regime intoWTO
conformity andadopt theprovisions oftheSoftware Valuation Decision since thetextof
WT/ACC/ARM/5 wastransmitted toGeneva inthespring of1996.
Please refertotheanswer toQ39.
Q42. Please explain whythenecessary changes intheregulations cannot beimplemented within
thescope ofcurrent legislation.WT/ACC/ARM/8
Page22
Thenecessary amendments totheregulations cannot beimplemented within theexisting legal
framework, since these amendments aregoing toberather lengthy andithasbeendeemed more
expedient todefine anewlegislative instrument thanadjust theexisting one.
QUESTIONNAIRE INANNEX 3OFWT/ACC/1 ONTECHNICAL BARRIERS TOTRADE
Q43. Initsresponse toquestion 50,Armenia refers totheLaw onStandardization and
Certification andtheLawonUniformity ofMeasurements. Please provide copies ofthese laws
totheWTO Secretariat sothatwemayreview thislegislation andtheconsistency withWTO
TBTprinciples. InWT/ACC/ARM/5, Armenia states thattheonlyproducts subject tomandatory
licensing forstandards purposes inArmenia arebeverages, alcohol, vinegar andcertain tobacco
products. Weunderstand, however, thatinJuly, Armenia expanded itscompulsory certification
system (perResolution 205of4July1996) scheduled forimplementation inJanuary 1997, tocover
awidevariety ofproducts. Inaddition tothefourproduct categories products listed intheannex
toWT/ACC/ARM/5 oTechnical Barriers toTrade, newproducts covered include meat, fish,
fishproducts, dairy products, eggs, honey, certain vegetables, fruits, andnuts,petroleum products,
vitamins, andpharmaceuticals. Wewould liketohave acopy ofthisResolution andthelistof
items covered bereported byHSnumber.
Therelevant information isbeing submitted.
Q44. Please describe howArmenia implements thiscertification system vis-avissimilar domestic
products. Please indicate theprecise criteria thatthese products must meet.
TheResolution 205refers tomandatory certification ofanumber ofgoods imported into
Armenia. TheResolution hasbeenamended toprovide thatsimilar goods produced intheRepublic
ofArmenia arealsosubject totherequirement ofmandatory certification. Therevised Resolution is
currently under review inrelevant ministries andshould beadopted within thenextthree months.
Theprincipal requirements thatgoods subject tomandatory certification havetomeetrelate
tosafety, health andtheprotection oftheenvironment. Pursuant totheabove requirements, distinctive
criteria aredefined andapplied toeachindividual product inorder toperform thecertification.
Mandatorycertificationoftheabove-mentionedgoodsisperformedinaccordancewithguidelines
defined bySARM, which provide reference tothetariff codeoftheproduct inquestion, thecriteria
bywhich thecertification isperformed, aswellasthenormative instruments thatdefine thesafety
indices andthemethods fortesting.
Q45. Arethere other countries whose Certificates ofConformity arerecognized byArmenia
besides those listed intheresponse toquestion 49?
Inaddition totheCIScountries andIran,thatarereferred tointheanswer toquestion 49of
WT/ACC/ARM/5, Armenia isconducting negotiations withBulgaria andChina torecognize their
certificates ofconformity anditrecognizes theUSDA certificates onmeatproducts.
Q46. Armenia should discuss itsplans concerning conformity assessment withtheWorking Party
andprovide thedraft lawsforreview.
Presently thereare8certification bodies inArmenia thatcorrespond totheEuropean EN45011
standard, andthatperform certification ofproducts. Apart fromthat,there arenumerous laboratoriesWT/ACC/ARM/8
Page23
thatcorrespond totheinternational standards (ISO/IEC Guide 25)andareaccredited bytheSARM
forperforming assessments. They allmeettherequirements setforthbyArticles 5to10oftheWTO
TBTAgreement. Thedraft lawsonStandardization andCertification, aswellasonUniformity of
Measurements havebeensubmitted totheconsideration oftheNational Assembly andshallbeadopted
within thesecond trimester ofthisyear.
Q47. Please giveastatus report onplans outlined inWT/ACC/ARM/5 toexpand mandatory
standards from theinitial fourcategories toarange ofother products, including toys, food
containing preservatives, medical equipment, consumer chemical goods, electric tools, household
electric goods, construction materials, andautomobile tires. Allimports subject tomandatory
standards should bereported totheWorking Party, withthejustification fortherequirement,
andlisted byHSnumber.
Thelistofgoods subject tomandatory certification bytheResolution 205oftheGovernment
oftheRepublic ofArmenia (onamending theResolution 417)ispresented below.
LIST
oftheimported goods, subject tocompulsory certification
confirming thesafety requirements intheRA
CNcode Description
1 2
02.01 -02.04, 02.06 -02.10 Meat andedible meatoffal
03.02 -03.07 Fishandcrustaceans, molluscs andother aquatic
invertebrates
04.01 -04.06 Milk andcream
04.07, 04.08 Birds’eggs
04.09 Natural honey
07.01 -07.13 Edible vegetables andcertain roots andtubers
08.01 -08.14 Edible fruitandnuts; peelofcitrus ormelons
15.01 -15.20 Animal orvegetable fatsandoilsandtheircleavage
products; prepared edible fats;animal orvegetable waxes
16.01 -16.05 Preparations ofmeat, offishorofcrustaceans, molluscs or
other aquatic invertebrates
17.01 -17.04 Sugar andsugar confectionery, gums
20.01 -20.09 Preparations ofvegetables, fruit, nutsorother parts ofplants
22.01 -22.09 Beverages, spirits andvinegar
24.01 -24.03 Tobacco andmanufactured tobacco substitutes
27.07, 27.10, 27.11 Oilproducts
29.36 Vitamins
30.01 -30.06 Pharmaceutical products
40.14.90 Babies dummiesWT/ACC/ARM/8
Page24
Q48. Armenia should beprepared tousetheprovisions oftheWTO Agreement onTechnical
Barriers toTrade todevelop itsstandards, including theprocedural requirements forprior
notification forreview andcomment.
Inview oftheobligations assumed bytheRepublic ofArmenia intheprocess ofaccession
totheWTO, Armenia willbeprepared tosatisfy therequirements oftheTBTAgreement, including
theprovisions onprocedural requirements foradvance notification.
Q49. Regarding Armenia ’sdraft legislation (Law onStandardization andCertification andLaw
onIdentity ofMeasurements). Please explain indetail howthislegislation incorporates thecore
principles oftheWTO TBTAgreement. What istheprocess under which newtechnical regulations,
standards, andconformity assessment procedures aredeveloped andimplemented? DoesArmenia
intend tonotify acceptance oftheTBT Code ofGood Practice?
ThedraftLawonStandardization andCertification provides thelegalbasis intheRepublic
ofArmenia forthestandardization aswellascertification ofentities engaged inproduction, services
andlabour. These shallbemandatory forthebodies ofstategovernance, aswellasforenterprises,
institutions andprivate entrepreneurs andshall define themeans fortheprotection ofinterests of
consumers andthestate through theelaboration andapplication ofnormative documents on
standardization. They alsodefine therights, obligations andresponsibility oftheparticipants inthe
certification process.
ThedraftLawonUniformityofMeasurementsdefinesthelegalbasisforensuringtheuniformity
ofmeasurements, regulates therelations ofthebodies ofstategovernance withenterprises, institutions
andprivate entrepreneurs onissues relating totheproduction andissuance ofmeasurement instruments,
andtheuseandrepairs thereof. Itisdirected atprotecting therights andrightful interests ofconsumers
andthestatefrom thenegative impact ofinaccurate results ofmeasurements. Thedraft lawson
Standardization andCertification, aswellasonUniformity ofMeasurements entirely comply with
theprincipal provisions ofTBT.
Thedefinition ofstandards involves thefollowing procedure: theSARM setsuprespective
technical committees thatinclude representatives from theinterested organizations andinstitutions,
aswellasspecialists fromtherelated bodies ofgovernance andthese committees define thenecessary
standard. Thestandard thusdefined issubsequently submitted fordiscussion totherelevant ministries,
major enterprises andother institutions thatdisplay aninterest init.Thetechnical committee, upon
taking intoaccount theopinions expressed asaresult ofsuchdiscussion, adopts thestandard, following
which itisforwarded forendorsement bytheSARM.
Thedefinition oftechnical regulations andtheprocedures forconformity assessment follow
thesame routine asthatforstandards, following which theyareendorsed bythegovernment andare
applied bytheproducer, theservice provider andtherespective body ofstategovernance authorized
byGovernment.
ItwilltakeoneyearforArmenia toadopt theCode ofGood Practice.
Q50. Weexpect Armenia tohave implemented anylegislation required toimplement TBT
obligations prior toitsWTO accession.
Asmentionedbefore,theRepublicofArmeniahasassumedtheobligationtodefinethenecessary
legislation prior toaccession, ensuring itscomplete conformity withtheWTO TBTprovisions. At
thesame time, thedraft laws onStandardization andCertification, aswellasonUniformity ofWT/ACC/ARM/8
Page25
Measurements havealready beensubmitted totheNational Assembly fordiscussion andshallbeadopted
inthefirsthalfofthisyearwiththeirsubsequent application.
Q51. Armenia alsoindicates itsplantoestablish fiveseparate TBT enquiry point -onlyone
ofwhich ispresently operational. Please elaborate whyArmenia proposes tooperate somany
enquiry points. How areresponsibilities tobedivided between these proposed points? How are
WTO Members toknow theappropriate contact?
Taking intotheaccount thefactthatonlythefirstoneoftheinformation points referred to
inWT/ACC/ARM/2 Answer 175(b) isoperable, andbased ontheneed forprompt provision of
information, itisdeemed expedient tohaveoneinformation point which isSARM. Theother four
information points mentioned areitsbranches.
Q52. Weremind Armenia thatunder Article 10.2oftheTBT requires members toprovide
complete andclear information onthescope ofresponsibility ofeachpoint andensure thatany
enquiry point isdirected tothecorrect enquiry point.
Theonlyinformation point operating inArmenia istheSARM, which shallimplement the
obligations accorded toitinaccordance withArticle 10ofTBT.
Q53. Armenia hasindicated thatitwillbeunable toimplement allobligations under theTBT
prior toitsWTO accession. Please describe forwhich WTO obligations Armenia isseeking a
transition period andexplain indetail therationale foralonger implementation period.
Weestimate thatArmenia needs atransitional period ofoneyeartodefine, adopt andlaunch
standards inaccordance withtheCode ofGood Practice. Certain problems emerge especially with
respect totheimplementation ofclauses F,G,J,KandOoftheCode. Theuseofexisting international
standards orrespective fragments thereof intheprocess ofthedefinition ofnational standards (F),
aswellastheobjective ofharmonizing national standards withinternational ones(G)requires technical
means andrelevant personnel. Thecreation ofinformation systems shallallow national authorities to
linkupwithinternational databases. Theuseofinternational standards shallalsohelpArmenia toaccede
tovarious international standardization organizations. Presently, Armenia isamember ISOandCAC.
Itshallaccede totheICE, ISONET (K)inorder tomake useoftheirstandards.
Another group ofissues relates totheimplementation ofclauses JandOoftheCode ofGood
Practice.Accordingtotheseclauses,thestandardizationbodymustpublishtheprogrammeofitsactivities
atleastonceevery sixmonths (J),andeachadopted national standard mustbepublished immediately
(O).Theimplementation ofthese requirements isconstrained bythescarcity ofpublishing resources.
Inorder toapply international methods oftesting during certification, Armenia needs tohave
thetechnicalbasisfortesting,moderntestinglaboratoriesandequipmentinparticular,aswellasrelevant
specialists.
Q54. Armenia states thatitis"considering todevelop technical regulations" forarange of
different products. Could Armenia givemore information onthelegislative work being done in
thisfield, andmore specifically givedetails on1)thecontent ofthese potential technical regulations
and2)thetimetable forthiswork.
Thework plans ofSARM aresofardrawn foraspanofoneyear. Thework planfor1997
hasalready beenendorsed anditincludes thetechnical protocols tobedefined. Thelatter relate to
thesystem forensuring quality andcertification, thestandardization ofproduction, mostspecificallyWT/ACC/ARM/8
Page26
forthemachine tool,electrotechnical, chemical andfoodindustries. Thenewlistofproducts subject
tomandatory certification hasalsobeenapproved, anditwillbepassed nolaterthanin1998.
Q55. Could Armenia alsoprovide more detailed information, including scope andtimetable,
ontheharmonization work being done withaviewtoalign national (inpractice Russian GOST)
standards tointernational standards.
Thisyear'sprogram ofwork instandardization andcertification isalready defined andit
establishes theframework fortheharmonization efforts. Itincludes thedefinition ofnewstandards
ortheapplication ofrespective ISOstandards inthedomains ofthesystem forensuring thequality
andcertification, definition ofnormative instruments forthenational system ofstandardization,
terminology, information technologies, systems ofengineering, economic, accounting andstatistical
documentation, aswellasindefining thestandards forcertain types ofproducts.
Q56. Concerning theDecree oftheMinistry ofHealth oftheRAonregulation ofpharmaceutical
activity andensuring thequality ofdrugs andmedical facilities, could Armenia provide information
inmore detail ontheInterim State Standards System (ISSS), including itsscope, development
oftechnical regulations, procedures andbodies ofstandardization andconformity assessment,
etc.
Please seetheanswers toQ25-Q30.
Q57. Could Armenia provide more detailed information onthecontent ofdraft laws on
“Standardization andCertification ”and“Uniformity ofMeasurements ”.Armenia states that
these lawswillnotbeadopted untilafter Armenia ’saccession totheWTO. What arethereasons
forwaiting until theaccession process isovertointroduce these laws?
Please seetheanswers toQ49andQ50.
PART II.REPLIES TOSPECIFIC QUESTIONS
III. FOREIGN TRADE REGIME
3.1. Import regulation
3.1.1. Thecustoms tariff
Q58. Thereply toquestion 60indicates thatwhile thenewConstitution requires parliamentary
approval ofalltax(andtherefore tariff) changes, there currently exists atransition period for
thefullimplementation ofthisconstitutional provision, during which timetheParliamentary
Permanent Financial, Credit, Budgetary andEconomic Commission istoapprove taxchanges.
What isthestatus ofthattransition period andhowmuch longer isitlikely tolast?
Alllegislation relating totaxmatters must beapproved byParliament upon presentation by
theCommission.WT/ACC/ARM/8
Page27
3.1.2. Import charges andfees
Q59. Armenia hasstated thatithasraised itsimport andexport customs feefrom .15percent
to.3percenttoraise revenue tofinance thedevelopment ofitscustoms facilities. Thisclearly
indicates thatthefeehasnothing todowiththecostofservices, butisrather arevenue measure
applied totraded goods thatisnotlevied ondomestic production consumed within Armenia. As
such, thefeeisclearly inconsistent withArticle VIII.
While agreeing thatsuchpayments areincompatible withArticle VIIIoftheWTO agreement,
theRepublic ofArmenia nevertheless maintains that,based onthenecessity toimprove theconditions
ofthecustoms service, theRepublic ofArmenia presently needs acertain timetoensure thecomplete
conformity ofcustoms operations withtheWTO provisions.
Q60. Armenia hasstated thatitintends tointroduce amaximum andminimum ratetolimit
theinconsistency ofthefeewithWTO provisions bytheendofthefirstquarter of1997, but
requires anadditional fiveyears after thedateofaccession tofullyconform toWTO provisions
inorder tocontinue tousetherevenue fornon-customs processing purposes.
TheRepublic ofArmenia needs afiveyeartransition period during which itcanbring the
customs service uptothenecessary leveltoensure afullysatisfactory andefficient service.
Q61. Inaddition,Armeniaindicatesthatthereareanumberofcategoriesofimportsandexports,
e.g.,financed byinternational aidorthestate, thatarenotsubject tothecustoms fee.
According totheResolution 615products shipped within theframework ofloans provided
totheRepublic ofArmenia, aswellaswithin theframework ofhumanitarian assistance areexempted
from feescharged forcustoms services.
Q62. Inaddition totheintroduction ofamaximum andminimum amount payable onanygiven
import orexport transaction, doesArmenia alsointend toensure thatrevenues from thefeeare
usedexclusively forimport andexport processing ofgoods subject tothefee,andnotforgeneral
customs requirements orprocessing goods notsubject tothefee?Ifso,how?
TheResolution 282onendorsing theStatute ofthereserve fundoftheCustoms Department,
clearly outlines howthefeeslevied aredisbursed (being oneofthesources oftheformation ofthe
reserve fund).
i. Seventy percentofthemoneys inthereserve fundareallocated forandspent onthecreation
andstrengthening ofthematerial andtechnical basis ofthesystem, withtheobjective ofimproving
anddeveloping thecustoms domain.
ii. Twenty-five percentofthemoneys inthereserve fundareallocated forandspent onthepayroll
oftheemployees ofthecustoms service, providing themwithmaterial incentives andimproving their
social conditions.
iii. Fivepercentofthemoneys inthereserve fundareallocated tothefundoftheheadofthe
Customs Department, which he/she usesforcontingency expenses within his/her jurisdiction.
Q63. Arethere anycountries, e.g.,preferential trading partners, whose trade isnotsubject to
thisfee?Ifso,revenues collected ontrade subject tothefeeshould notbeusedtoprocess trade
from exempted countries.WT/ACC/ARM/8
Page28
TheRepublic ofArmenia hasentered intofreetraderelations withanumber ofCIScountries,
that,according totheResolution 615,areexempted from theimport duty, although these counties
arenotexempted from thecustoms fee.
3.1.4. Taxregime
Value Added Tax(VAT)
Q64. What steps hasArmenia taken sincethelastWorking Party toapply itsVAT toallimports
onanMFN basis?
Following thelastmeeting withtheWorking Party andinorder toensure conformity oflevying
VAT onimported goods withtheMFN principles, Armenia hasdeveloped adraftforanewlawon
VAT. Itdraws oninternational experience, inparticular theprinciples ofthe6-the directive ofthe
European Union (with thelateramendments). ThedraftisnowintheNational Assembly andshall
beconsidered soon.
Thenewdraftprovides for:
- atransition totheconsumption (destination) principle forallcountries inauniform manner,
including theCIScountries;
- atransition totheprinciple oftaxing ofimports atthecustoms border;
- introduction ofadedicated system ofregistration ofVAT payers;
- introduction ofasystem oftaxbills.
Excise Taxes
Q65. Initsresponse toquestion 66,Armenia indicates thatitintends tobring itsdiscriminatory
excise taxes onalcoholic beverages, automobiles, andtiresintoconformity withWTO provisions
inthefirstquarter of1997. What steps hasArmenia taken since thelastWorking Party toachieve
thisobjective?
Withrespect totheassurances offered byArmenia concerning ensuring theconformity inthe
firstquarter of1997 oftheexcise taxlevied onalcoholic beverages, automobiles andtireswiththe
provisions oftheWTO, wereport, thatArmenia hasadopted theLawonExcise TaxinDecember
18of1996. According tothislaw:
- passenger vehicle tiresand‘handwoven carpets ’arenolonger subject toexcise tax;
- theexcise taxrateshavebeenconsolidated intoauniform system, i.e.thereisnodiscrimination
between thedomestically produced andimported goods (theratesareattached);
- thetaxbaseoftheexcise taxongoods produced intheterritory oftheRepublic ofArmenia
isthesalesprice (without theexcise taxandtheVAT);
- thebasefortheexcise taxonimported goods intotheterritory oftheRepublic ofArmenia
istheirvalue upon importation (without theVAT).
TheLawofRepublic ofArmenia on
Amendments oftheLawon“Excise Taxes ”oftheRepublic ofArmenia
Article 1. From theArticle IIoftheLawon“Excise Taxes ”oftheRepublic ofArmenia exclude
thephrases “tiresforpassenger vehicles ”and“handwoven carpets ”.
Article 2. State theArticle 3oftheLawon“Excise Tax”inthefollowing edition:
“Article III.TheExcise Taxispaidfrom theproceeds oftherealization oftheproducts subject to
taxation.WT/ACC/ARM/8
Page29
Forthegoods produced intheRepublic ofArmenia subject toanexcise taxation, theturnover ofthe
realization ofthegoods, based ontherealization price (without excise taxes andVAT), isthesubject
oftaxation.
Forthegoods imported intheRepublic ofArmenia, subject toanexcise taxation, theimportation price
isthesubject oftaxation ”.
Article 3. State theArticle 5oftheLawinthefollowing edition:
“Article 5. Determine thefollowing excise taxschedule:
HSnumber Product description Advalorem duty
22.07; 22.08 Strong alcohol 125
22.03 Beer 75
22.04; 22.05 Grape wine 50
16.04 30100 Caviar 200
24.02 Tobacco products: 100
Filter cigarettes 100
Cigarettes without filters 50
71.13 -71.17 Jewelry 30
43.42.03 Furs, natural leather 25
87.03 Passenger vehicles 15
69.71; 70.13.31 Glass Crystal andchina 25
27.10 00200 Gasoline 25”
Article 4. Implement thisLawfrom 1January 1997.
Q66. Inaddition, theresponse toquestion 68seems toindicate thatwhile imports paytheexcise
taxatthepoint ofentry, domestic goods areassessed atretail sale. Ifthisisso,itimplies that
theretail seller must collect theexcise dutyand,presumably, report ittothetaxauthorities. How
istheretailer todistinguish between agood thatisdomestically produced, andtherefore subject
toanexcise taxwhich hemust collect, andanimported good onwhich theexcise taxhasbeen
collected byCustoms upon entry intoArmenia?
Asforthesecond partofthequestion, wemaintain thattheprocedure forthecalculation of
theexcise taxinArmenia ondomestically produced goods hasbeenmisinterpreted. Thepoint isthat
accordingtotheLawonExciseTaxofDecember18of1996theexcisetaxondomesticallymanufactured
goods iscalculated andpaidnotbythewholesaler orretailer, butbytheenterprise ortheindividual
entrepreneur producing thegoods inquestion. Moreover, thebasis forcalculating theexcise taxis
thesalesprice oftheproducer (exclusive oftheVAT andtheexcise tax).Thismeans thatthebasis
isthecostplustheprofit oftheproducer. Armenia hasbeenapplying thisprocedure forthecalculation
oftheexcise taxondomestically manufactured goods since 1992.
Q67. What steps isArmenia taking toensure auniform system levying VAT andexcise duties
onallimports?
Please seetheanswers toQ64-Q66.WT/ACC/ARM/8
Page30
3.1.5. Non-tariff measures, quotas andlicensing
Q68. Please givestatus report onthedevelopment oflegislation toapply safeguard, subsidy,
orantidumping duties orother measures toaddress excessive imports orunfair trade practices.
Arethere anyresent legislative developments inArmenia withrespect todumping, subsidies,
countervailing duties andsafeguards, orplans forfuture legislation?
Armenia isplanning toelaborate therespective lawsandlegislative actstoaddress excessive
imports andunfair trade practices inaccordance withthetimetable declared during thelastWorking
Party andsubmitted totheWTO Secretariat asapartofArmenia ’scommitments intheprocess of
accession.
3.1.8. Rules oforigin
Q69. Wehavenotfound inArmenia ’scustoms regulations (Order 615ofDecember 1993) any
indication thatcurrent lawsorregulations conform totherequirements oftheWTO Agreement
onRules ofOrigin.
Theregulation ineffect inArmenia withrespect totherules oforigin (attached tothe
Resolution 615)doesnotcover certain provisions oftheWTO Agreement onRules ofOrigin, although
itdoesnotcontradict withtherequirements oftheabove-mentioned Agreement. Therefore, taking into
theaccount thedeficiencies oftheregulations currently ineffect, itisplanned toadopt anewResolution
oftheGovernment oftheRepublic ofArmenia ontherules oforigin inthesecond halfof1997, and
thisshall incorporate theprocedures necessary fortheapplication oftheprovisions oftheWTO
Agreement.
Q70. Armenia hasprovided copies ofitscustoms regulations totheWorking Party forreview.
Theydescribetheuseofcriteriatodetermineoriginthrougha“sufficientprocessing”test,involving
achange ofHS4--digit classification category andavalue -added test.There isnotenough
information, however, tobeabletoseetowhat extent thisisadministered inaWTO-consistent
fashion.
According totheprocedure ofdetermination ofthecountry oforigin attached totheResolution
oftheGovernment 615,thecountry oforigin isconsidered tobethecountry where theentire product
hasbeen manufactured orwhere ithasundergone sufficient processing. Thefollowing goods are
considered tobeentirely produced inacountry:
- theminerals mined intheterritory ofacountry orinside itsterritorial waters;
- theplant produce grown orharvested ontheterritory ofacountry;
- theanimals bornorbredontheterritory ofacountry;
- theproducts received from theanimals bornorbredontheterritory ofacountry;
- theproduct ofhunting, fishing orseaoperations ontheterritory ofacountry;
- theproduct ofthehighseasoperations, thatisproduced inthehighseasbyvessels belonging
tothecountry orleased byit;
- thesecondary rawmaterials orthewaste resulting from theproduction andother activities
carried outontheterritory ofacountry;
- theproduct ofhightechnologies received intheopen space onspaceships belonging tothe
country orleased byit;
- thegoodsproducedinthecountryinquestion,thathavebeenexclusivelyproducedinaccordance
withthepoints above.WT/ACC/ARM/8
Page31
Incasewhen twoormore countries haveparticipated intheproduction ofaproduct, theorigin
ofthegoods isdetermined based onthecriteria ofsufficient processing. Thefollowing arethecriteria
forthesufficient processing ofgoods:
- anyalteration inthefirstfourdigits intheposition oftheclassification ofaproduct (theproduct
description code) thathasoccurred asaresult ofprocessing theproduct;
- theimplementation ofproduction ortechnological operations thatareeither sufficient or
insufficient toconsider theproduct asoriginating from thecountry where suchoperations
havetaken place,
- theadvalorem rule-thealteration inthevalue oftheproduct, when theproportion ofthe
added value orthevalue ofthematerials usedexceeds acertain measure oftheprice ofthe
product.
Moreover, thefollowing areconsidered asnotmeeting therequirement ofthecriteria on
sufficient processing:
- operations geared towards thepreservation oftheproduct during itsstorage ortransportation;
- operations ofpreparation ofthegoods forsaleortransportation (taking apart, consolidation,
sorting, repackaging oftheproducts);
- simple assembly operations;
- merging, smelting oftheparts (components) ofproducts without lending them suchfeatures
aswould essentially differ from theinitial components.
Q71. HasArmenia reviewed theAgreement onRules ofOrigin withaview toimplementing
itsprovisions intheArmenian regime?
TheGovernmentoftheRepublicofArmeniaisworkingonanewResolutiononRulesofOrigin.
TheResolution shallincorporate theprocedures necessary forthedetermination ofthecountry oforigin
oftheproduct, andtheseshallbeentirely based ontheprovisions oftheWTO Agreement. Itisplanned
toenter thisResolution intoeffect within thesecond halfof1997.
Q72. Does Armenia have regulations thatgobeyond therather simple descriptions inthe
December 1993 order?
Please seetheprevious answer.
Q73. DoesArmenia issueassessments (i.e.,rulings) oforigin toimporters, orprovide independent
appeal rights fordeterminations oforigin?
Theevaluation withrespect totheorigin ofimported goods iscarried outbytheArmExpertise
subsidiary oftheChamber ofCommerce ofArmenia. Incaseofdoubts astotheorigin ofgoods imported
intotheRepublic ofArmenia thecustoms refer totheArmExpertise, which examines theproduct,
thewaybills andthecertificates oforigin oftheproduct andpasses adecision ontheorigin ofthe
product. Atthesame time, according topoint 2ofthedirective #478MV of26April 1996ofthehead
ofthecustoms directorate oftheRepublic ofArmenia, incaseofabsence oftheabove-mentioned
certificate,thecertificatesissuedSARMorbytheArmExpertisesubsidiaryoftheChamberofCommerce
ofArmenia areaccepted asdocuments confirming theorigin oftheproduct.
Inaccordance withthelegislation oftheRepublic ofArmenia currently ineffect, importers
havetheright toappeal controversial issues toasuperior customs authority. Itisalsonecessary to
mention thattherightofimporters toappeal thedisputes thatemerge inrelation totheorigin ofthe
product inanindependent body shallbeincluded inthenewResolution oftheGovernment onRules
ofOrigin thatisplanned tobeadopted within thesecond halfof1997.WT/ACC/ARM/8
Page32
Q74. Does Armenia ’slegislation andimplementation ofitsregime intheareaofrules oforigin
provide forrulings within 150daysofinitiation ofcustoms formalities? Doimporters have the
rightofappeal? Aretheadministrative andjudicial rulings thatemerged from thisprocess binding
onallparties involved?
ThenewResolution under elaboration bytheGovernment oftheRepublic ofArmenia onthe
rules oforigin states thatthedeclaring entity shallbeassured ofruling nolaterthat150daysfrom
customs clearance.
According tothelegislation oftheRepublic ofArmenia, importers havetherighttoappeal (seethe
answer toquestion 73).Theadministrative andjudicial obligations withrespect tothisprocedure apply
toallentities.
Q75. What isthelevelof“percentofvalue”criteria required byArmenia todetermine origin?
What happens ifnoonecountry ’svalue meets thatcriteria? What isthebasis fordetermining
thecomposition ofthepercentofvalue, i.e.,what components ofthevalue ofthegood were
counted -onlyinputs/materials? direct andindirect labour? profit? interest? depreciation? How
canArmenia ’sprovision thatimports beaccompanied byacertificate oforigin issued inthecountry
oforigin meet therequirement foruniformity ofstandard oforigin under theAgreement ifthese
certificates areissues bydifferent authorities based ondifferent criteria?
Armenia hasnotasyetdefined thepercentage proportion ofthevalue oftheproduct thatshall
beusedasacriterion fordetermining theorigin oftheproduct. Itisextremely unlikely thatnoone
country ’svalue willmeetthepercentage ofvalue criterion tobedetermined. Theother criteria referred
tohavealsoyettobedefined, butArmenia shallensure thatthemethodology adopted willconform
withcommon international practice andshallbeconsistent withtheWTO Agreement onthissubject.
Q76. What provisions existinArmenia ’scustoms regime toensure confidentiality ofinformation
provided byimporters toprove origin oftheir goods asrequired bytheAgreement?
Suchprovisions arenotreflected intheexisting regulations. Theyare,however, tosome extent
reflected inArticle 50(oncommercial secrets) oftheLawonEnterprises andEntrepreneurial Activities
of14March 1992.
ThenewResolution onRules ofOrigin shallprovide forthepreservation ofconfidentiality
ofinformation submitted byimporters attesting theorigin oftheirimports, based ontheprovisions
oftheWTO Agreement.
3.1.10. Sanitary andphytosanitary measures
Q77. Armenia stated inWT/ACC/ARM/1 and2thatithadnotdeveloped anyseparate policies
orprovisions relating tosanitary andphytosanitary measures. InWT/ACC/ARM/5, however,
inresponse toquestions 49and50,Armenia made reference toanexpanded listofproducts,
including pharmaceuticals, agricultural chemicals, alcoholic beverages andtobacco products as
subject tolicensing forhealth reasons. Please giveastatus report onthisissue, inlight ofthe
Julyenactment ofregulation 205mandating Conformity Certification foralonglistofproducts
onthebasis ofhealth andsafety considerations.
Theextended listofproducts subject toobligatory certification ispresented inResolution 205
oftheGovernment ofArmenia. Themainrequirements tobemetbytheproducts subject toobligatory
certification pertain tosafety, health andprotection ofenvironment.WT/ACC/ARM/8
Page33
Theobligatory certification oftheproducts inquestion iscarried outaccording toGuidelines elaborated
bySARM. TheGuidelines specify thetariff code oftheproduct, thecriteria according towhich
certification isdone, aswellasthenormative documents thatdefine safety indices andtesting methods.
Q78. Please provide acopy ofregulation 205anddescribe howitwillbeimplemented. Please
listallproducts subject tolicensing orother nontariff import requirements duetosanitary and
phytosanitary requirements, byHSline.
Theobligatory certification oftheproducts listed inResolution 205oftheGovernment of
Armenia iscarried outbySARM inlaboratories accredited byitself, which correspond tointernational
standards (ISO/IEC Guide 25).
Q79. Intheresponse toquestion 102,Armenia stated thatitwillseekagrace period ofeighteen
months from thedateofitsaccession inorder todevelop provisions andprocedures consistent
withtheWTO Agreement onSanitary andPhytosanitary Measures.
Atpresent, Armenia isintheprocess oftheelaboration ofSanitary andPhytosanitary Measures
draftlaws, by-laws, andregulations pertaining tothespheres ofagriculture, veterinary medicine, and
protection ofplants. Armenia willneedatransition period of6months afteritsadherence totheWTO
forthecomplete elaboration ofallprovisions andprocedures inconformity withtheAgreement on
Sanitary andPhytosanitary Measures.
Q80. What hasArmenia doneinthelastyeartomove towards theobjective ofaWTO consistent
regime inthisarea? Why willitbenecessary towait18months from thedateofaccession, which
atthispoint isnotknown, toimplement appropriate measures?
NowArmenia isintheprocess ofelaboration ofSanitary andPhytosanitary Measures. Two
draft lawsonPhitoprotection andVeterinary Medicine arebeing discussed currently. In1996, the
National Assembly adopted theLawonStateAgrarian Inspections. Thelawdefines thelegal, economic
andorganisation principles ofStateAgrarian Inspections intheRepublic ofArmenia. Articles 6and
7oftheLaw, particularly outline theactivities oftheState Inspection forAgriculture, concerning
cultivationoflands,useoffertilisers,thestruggleagainstplantdiseases,insectsandweeds,transportation
oftoxicsubstancesandmineralfertilisers,conditionsofconservationandannihilation,aswellaslivestock
breeding withrespect toveterinary services. Thelatter dealwiththeprotection ofpopulation from
diseases common tomanandanimals, theprevention anderadication ofcontagious andnon-contagious
animal diseases, transportation, conservation, useandannihilation ofveterinary medicaments and
disinfectants. Fortheimplementation oftheLaw onState Agrarian Inspections, draft laws on
Phitoprotection andVeterinary Medicine havebeenworked out.
TheLawonPhitoprotection defines thelegal, economic andorganisation principles oftheState
ServiceofPhitoprotectionoftheRepublicofArmenia,andregulatesrelationsbetweenfarms,enterprises,
organisations andindividuals within theterritory oftheRepublic ofArmenia.
TheLawonVeterinary Medicine defines thelegal, economic andorganisation principles of
theState Service ofVeterinary Medicine oftheRepublic ofArmenia, fixes theregulation forthe
prevention ofdiseases ofanimals, fortheprotection ofpopulation fromdiseases common tomanand
animals, andforproviding thepopulation withquality products according toveterinary andsanitary
conditions. Thelawregulates relations between theState body incharge ofveterinary medicine and
enterprises, organisations, entrepreneurs, andindividuals ontheterritory oftheRepublic ofArmenia.WT/ACC/ARM/8
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Q81. HowisArmeniareconcilingDecisionNo.205,anditssubsequentimplementationprocedures,
withitsstated goaltohaveinplace provisions andprocedures consistent withtheWTO Agreement
onSanitary andPhytosanitary Measures eighteen months after itsaccession?
Resolution 205oftheGovernment ofArmenia presents theextended listofagricultural products
subject toobligatory certification, onthebasis ofsafety requirements. Thisisevidence forthefact
thatArmeniahasstartedtheprocessofelaborationofSanitaryandPhytosanitaryMeasures.Theproposal
foradelay ofeighteen months afteraccession forafullyconsistent regime inthisareawasbased on
theperception thatthrough preparation isessential toawellfunctioning regime. Theauthorities are
concerned thatitmaytaketimetoreach thisobjective, butwould bewilling toreduce thedelayed
implementation period tosixmonths following accession.
Q82. Armenia states itsintent to“develop sanitary andphytosanitary measures ”etc.Please
givedetails. What timetable isforeseen forthislegislative work? Does thismean fullapplication
oftheSPSAgreement?
Armenia willneed6months afteritsaccession totheWTO forthecomplete elaboration of
provisions andprocedures oftheAgreement onSanitary andPhytosanitary Measures. Simultaneously
withtheelaboration oflaws, regulations arebeing worked outfortheimplementation oflaws. Armenia
iscarrying outthenecessary changes forraising existing laboratories tointernational standards, for
capacity building atfrontier points ofveterinary andplant-growing control, andforthecreation of
theState Chemical Commission.
3.3. Export incentives
Q83. Does Armenia maintain anysubsidies which meet thedefinition ofaprohibited subsidy,
within themeaning ofArticle 3oftheAgreement onSubsidies andCountervailing Measures?
Armenia doesnotmaintain anysuchsubsidies.
Q84. Ifso,please outline Armenia ’splantoeliminate suchmeasures.
Please seeprevious answer.
Q85. Please report onanysubsidies thatArmenia plans tonotify under theAgreement on
Subsidies andCountervailing Measures prior tocompletion oftheWorking Party discussion, to
ensure thatallparticipants areinformed ofthescope ofsuchmeasures inplace.
Please seeanswer toQ83.
IV. OTHER POLICIES AFFECTING FOREIGN TRADE
4.2. Agricultural policy
Q86. Armenia stated inWT/ACC/ARM/2 thatthere arenobarriers toexport ofagricultural
products toArmenia. Itwould seem from theresponse toquestions 90and91,however, that
afewvery large firms, some with domestic production, effectively dominate import trade in
agricultural goods inArmenia. Most ofthefirms listed areeither entirely state-owned (i.e.,Yerevan
Brewery), ormajority-state-owned (i.e.,Artashat Wine). DoesArmenia plantoprivatize thewholly
state-owned firms, andtofurther privatize themajority-state-owned firms? Ifso,please describe
theschedule fortheir privatization.WT/ACC/ARM/8
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In1997, itisplanned toprivatise 116enterprises intheagricultural sector, including
4flour-mills,25bakeriesand13bread-sellingenterprises.During1998-1999,27enterprisesspecialising
ingrain selection willbedenationalised. By2000, themajority ofthese enterprises willhavebeen
privatised. Thestatewillretain 20enterprises ofgrain selection, 8enterprises ofpedigree livestock
breeding, 10nurseries, andoneflour-mill toassure thenecessary stock ofbread. By2000, itisplanned
toprivatise 65-70 percentofallagricultural enterprises. Theremaining partofstateenterprises will
notbeprivatised during thatperiod because oftheirstrategic significance.
Q87. Doanyofthese firms haveadefacto ordejuremonopoly intheproduction, distribution,
domestic sale,orimport orexport intheir respective products?
TheYerevan Brewery andtheArtashat Wine factory donothaveamonopoly, dejureorde
facto, inthespheres ofproduction, distribution, marketing, importation orexportation. Themarket
oftheRepublic ofArmenia isopen, andthere arenorestriction forother importers.
Q88. HowdoesArmenia ensure thatthese firms donotlimitimports toprotect theirownoutput?
Have other suppliers infactentered themarket, andifso,what istheir market share relative
tothese twoenterprises?
Thetwoenterprises cannot, withtheaimofprotecting theirproduction, exercise pressure upon
other suppliers, astheRepublic ofArmenia hasnorestrictions upontheimportation ofwineorbeer.
Theother suppliers ofthatproduction, mainly individual entrepreneurs, havenearly 45per centofthe
market.
Q89. Concerning agricultural trade withother Republics oftheformer Soviet Union:. Are
exports tothese countries done onacashbasis, barter orsome combination ofboth? Ifexports
aremade onabarter basis, what types ofgoods areimported inreturn? If“combination ”,what
istheratio ofcashtobarter sales? Please describe howexports tonon-CIS countries arepaid
for.
Asfarastradeinagricultural products withotherFSUcountries isconcerned, during 1995-1996
there werenoclearing orbarter activities. Exportation tothose countries iscarried outbyletters of
credit, while enterprises make theirpayments forcommercial activities incashorbybanking transfers.
Q90. Concerning theresponse toquestion 101,Armenia hasstated thattheprivatization process
forArmProsperity andArmAgroService isexpected tobecompleted in1996. Please describe
what progress hasbeen made towards thisgoalthisyear, andifArmenia continues toexpect
privatization tobecompleted in1996. Ifcompletion isexpected in1997, could Armenia provide
arevised timetable forprivatization?
During 1996, theenterprises comprising partoftheagglomerations Armagroservice and
ArmProsperity wereprivatised upto66per cent, withthestateretaining 34per centofshares. Upon
further consideration bytheGovernment ofitsposition theprivatisation ofthese agglomerations will
bestopped during thecoming 3years forstrategic reasons.
Q91. Could Armenia describe howthese twofirms arecurrently organized?
Theenterprises within Armagroservice andArmProsperity aremanaged byboards consisting
of5-7persons. Each member hasonevote. Themembers oftheboard arechosen inproportion to
shareholdings.
Q92. Areallexisting barter arrangements eliminated?WT/ACC/ARM/8
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Since 1995-1996, nocommercial activities havebeencarried outbybarter intheRepublic
ofArmenia.
Q93. Does theminimum price forflour alsoapply toimported products? Does Armenia intend
toeliminate thissystem?
BytheDecree 262cof19March 1995, oftheGovernment ofArmenia, theprices offlour,
bread andbaked products areliberalised inArmenia. Thatmeans therearenorestrictions ontheprices
offlour, bread, andbaked products.
Q94. Could Armenia confirm thatallstatetrading companies involved intrade inagricultural
products donothave special rights anddonotundermine Article 4oftheAgreement on
Agriculture?
None ofthestate-owned commercial enterprises, involved inthetradeofagricultural products,
hasspecial rights andprivileges granted bytheGovernment. Theclauses ofArticle 4oftheAgreement
onAgriculture arenotviolated, asonlytariffs areimposed upontheproducts imported intoArmenia.
4.3. Financial, budgetary andfiscal policy
Q95. InWT/ACC/ARM/1, Armenia states that“directed refinancing isbeing phased out”.
SubsequentstatementsinWT/ACC/ARM/2andWT/ACC/ARM/5avoideddiscussionofthedirected
refinancing ofenterprise debt. Please describe how“directed financing ”works, andtowhat
extent Armenia hasbeenengaged inbuying upthedebtofstateenterprises thatwould otherwise
notbeabletosustain themselves economically. Please indicate thestatus of“phasing out”this
practice andhowrefinancing iscurrently carried out.
Since thecommencement ofoperation oftheLawonBankruptcy theGovernment ofArmenia
hasrefrained from buying upthedeptofthestateenterprises.
4.5. Foreign investment policy
Q96. Article 18oftheforeign investment lawstates that“Privileges established bythislawshall
apply tothose enterprises withforeign investment where suchinvestment isnolessthan30per
centatthemoment offoundation. ”Wewould beinterested inanexplanation forthis30percent
minimum. Asweseeit,ifsmaller investments arenotaccorded theprotections oftheinvestment
lawortheinvestment incentives, thenthis30percentminimum willdiscourage investment that
maybeuseful toArmenia.
Itshould benoted thatfirms notqualifying foradditional privileges because theforeign equity
isbelow 30percentstillbenefit from alltheprotections oftheinvestment law.
Q97. Wewould likeaclarification ofwhat ismeant by“privileges established bythelaw”?
Does thisphrase refer totheprovisions ofthelawordoesitrefer totheinvestment incentives
thegovernment ofArmenia hasoffered toforeign investors?
Thisphrase refers totheinvestment incentives being offered.
Q98. Does Armenia maintain anymeasures which might beinconsistent with theTRIMs
Agreement?WT/ACC/ARM/8
Page37
Armenia considers thatitdoes notmaintain anymeasures inconsistent withtheTRIMs
Agreement.
4.6. Government procurement
Q99. What isArmenia ’sposition onjoining theAgreement onGovernment Procurement?
ArmeniaintendstojointotheAgreementonGovernmentProcurementfromthedateofaccession
totheWTO.
4.8. Price Controls
Q100. Armenia reports thatalmost allgovernment-mandated price controls have removed.
Domestic prices thatremain subject tocontrol areforirrigation, urban electrical transport,
electricity,hotwater,gas,heating,sewageservices,garbagecollection,rentinState-ownedhousing,
andtelephone services, andthere aredirect price controls onflour(through thesetting ofmaximum
profit margins forflour mills). Minimum export prices arealsoestablished forferrous and
non-ferrous metal scrap, butonlyforthepurpose ofcalculating thecorporate taxliabilities of
enterprisesdealinginthesescrapmetals.CanArmeniapleaseindicateanyadditionalpricemeasures
ongoods orservices thathave been established?
There arenoanyadditional price measures.
Q101. Could Armenia please expand ontheminimum export prices offerrous andnon-ferrous
metals andscrap itusesasareference basefortaxpurposes. Inparticular, canitplease explain
which taxes thereference to“corporate taxliabilities ”covers. Canitalsocontrast thistaxation
system withtaxbaseforcompanies which onlysellmetals andmetal scrap domestically.
Thetaxreferred to,which iscalculated onthebasis ofanotional minimum export price, is
thecorporation tax.Thisarrangement applies onlytometals andscrap thatleaves thecountry andnot
tothedomestic salesofthesame items.
V. INSTITUTIONAL BASE FOR TRADE AND ECONOMIC RELATIONS WITH THIRD
COUNTRIES
5.1. Bilateral freetrade agreements
5.1.2 Bilateral freetrade agreements andtrade andeconomic cooperation agreements withCIS
countries
Q102. Theresponse toquestion 126states thatRussia maintains certain tariffs andquotas on
imports ofArmenia ’strade under theFTA, butdoes notrespond totherequest fordetailed
information onthese measures. Please listtariff categories excluded from theduty-free provisions
oftheFTA withRussia, what nontariff measures areapplied, andtheduration oftheFTA as
provided forintheAgreement. What plans toArmenia andRussia have, either intheAgreement
oragreed subsequently, tocomplete theFTA?
Taking intotheaccount thatwithin theperiod since thesigning ofabilateral FreeTrade
Agreement withArmenia Russia hassubstantially liberalized itsforeign traderegime (removed quotas,
export taxes etc.)andthatpresently thenational legislation ofthetwocountries ontariffandnon-tariffWT/ACC/ARM/8
Page38
regulation ofexports donotprovide foralistofspecific products, webelieve thattheabove-mentioned
Agreement isinconformity withtheWTO rules onfreetrade areas.
Atthesame timeadraftprotocol hasbeenprepared bytheauthorized representatives oftheparties,
verifying thefactthatintradebetween Russia andArmenia therearenodeviations fromthefreetrade
regime. Thebilateral verification ofthisprotocol isexpected totakeplace bytheendofthethirdquarter
of1997. There isnodateenvisaged forthetermination ofFTAbetween Russia andArmenia.
Q103. Theanswer tothisquestion indicates thatVAT andexcise duties maycome under the
scope ofArticle XXIV ofGATT 1994. Howexactly could suchadeparture from MFN bejustified
under Article XXIV?
Armenia ismoving away fromtheorigin principle inrespect ofitsindirect taxarrangements
withRussia andother CIScountries, which willrender moot anyconsistency ofArticle XXIV
consistency.
Q104. What partofArmenia ’sagricultural trade iscarried outinthecontext ofFTAs withCIS
countries? What isthelatest situation withregard toArmenia ’sparticipation intheCISCustom
Union? What consequences doesthishave fortheaccession negotiations?
ThesituationconcerningArmenia’sjoiningtheCustomsUnionisthat:negotiationsarecurrently
inprocess. Armenia ’sposition isthatco-operation withthecountries oftheCISshould begin with
integration, intheform ofthesimplest freetrade regime. Thus, itisnecessary tohaveafreetrade
agreement inconformity withinternational norms. Theissueofadherence ofArmenia totheCustoms
Unionshouldbelefttofutureexamination.ThissituationdoesnotconstituteanimpedimenttoArmenia’s
accession totheWorld Trade Organisation asanyeventual participation inaCustoms Union shallbe
consistent withArmenia ’sWTO obligations.
Within theframework ofFreeTrade Agreements, thetrade ofagricultural products withthe
member countries oftheCIS,constitutes inimports 13per centandinexports 81per centofArmenia ’s
trade.