WORLD TRADE  
ORGANIZATION  WT/REG175/1 
27 July 2004 
 
 (04-3240) 
Committee on Regional Trade Agreements Original:   English 
  
 
FREE TRADE AGREEMENT BETWEEN ARMENIA AND TURKMENISTAN 
 
 
 The following communication, dated 17 June 2004,  is being circulated at the request of the 
Delegation of Armenia. 
 
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AGREEMENT 
BETWEEN THE GOVERNMENT OF REPUBLIC OF ARMENIA AND 
THE GOVERNMENT OF TURKMENISTAN ON FREE TRADE 
  The Government of  Republic of Armenia  and the Government of  Turkmenistan , hereafter 
referred to as the Contracting Parties,    Striving  to develop trade and economic coopera tion between Republic of Armenia and 
Turkmenistan based upon equality and mutual benefits,  
  Based  upon the sovereign right of each state to  conduct its independent foreign economic 
policy,   
 Creating  conditions for free movement of goods and services,  
  Ensuring  equilibrium in mutual trade and stabili sation of national economic potential of both 
states,    Guided  by endeavour to improve standard of living for the population of their states,  
 
 HAVE AGREED as follows:  
 
Article 1 
 1. Contracting Parties shall not apply customs duties, taxes and charges having equivalent 
impact on exportation and importation of goods orig inating from the customs territory of one of 
Contracting Parties and destined for the customs te rritory of the other Contracting Party. Exceptions 
to this trade regime on the basi s of the agreed commodity nomenclature shall be formalized by 
documents, which shall be an integral part of this  Agreement, in case Contracting Parties consider it 
necessary.  
2. For the purposes of this Agreement, and for its effective term, goods originating from the 
territories of Contracting Parties shall be deemed to be: 
(a) Completely produced in the territory of Contracting Parties or;  WT/REG175/1 
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 (b) Having been processed on the territory of a Contracting Party by utilizing raw 
materials and components of third country origin, whose classification under the Commodity Nomenclature of Foreig n Economic Activities (CN FEA) changed 
thereafter in at least one of the first four digits due to this processing;  
(c) Produced with the use of raw materials a nd components listed in "b" above provided 
that their total cost does not exceed a fixed proportion of the export price of 
commodities sold.  
 Detailed rules on establishing commodity origins shall be coordinated by Contracting Parties 
and included in a document that shall become an integral part of this Agreement.   
Article 2 
 
 Each Contracting Party shall not:   
- directly or indirectly impose any internal taxes or charges on commodities covered by 
this Agreement, in excess of correspondi ng taxes and charges imposed on similar 
commodities of domestic production or of third country origin;  
 - apply any special limitations or conditions to commodities covered by this Agreement, 
in excess of limitations or conditions applie d under similar circumstances to similar 
commodities of domestic production or of third country origin;  
 
- apply rules to warehousing, reloading, st orage, and transportation of goods that 
originating from the territory of the other C ontracting Party, as well as to payments and 
payment transfers, other than those applie d in similar situations regarding goods of 
domestic production or of third country origin.  
 
Article 3 
 
 Contracting Parties in their mutual trade shall refrain from discriminatory measures, introduction of quantitative restrictions or simila r measures for exportation and/or importation of 
goods within the framework of this Agreement.  
 
 Parties may introduce unilaterally quantitative or other special restrictions only within 
reasonable limits, arid for a strictly defined time period.    These restrictions shall be of exceptional natu re and may only be applied in cases of sharp 
deficit in the balance of payment.  
  A Contracting Party which applies quantitative r estrictions under this Ar ticle shall provide the 
other Contracting Party, if possible, in advan ce with full information on the main reasons for 
introduction, forms and expected terms of applica tion of the abovementioned restrictions, whereupon 
the consultations shall be set.  
 
Article 4 
 
 All settlements and payments related to the trade/economic cooperation between the Republic 
of Armenia and Turkmenistan shall be carried out  under the agreement between en the authorized 
banks of the Contracting Parties.  
  WT/REG175/1 
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 Article 5 
 
 Contracting Parties shall on a regular basi s exchange information on laws and other 
regulations related to economic activity, including fo reign trade, investment, taxation, banking and 
insurance and other financial services, on transport and customs issues, including customs statistics.  
 
 Contracting Parties shall inform each other without delay on any changes in the national 
legislation, which may influence im plementation of this Agreement.  
  Authorized bodies of the Contracting Parties shall coordinate the way to exchange such 
information.  
 
Article 6 
 
1. Contracting Parties shall endeavour to bring toge ther the levels of customs tariffs applied to 
trade with the third countries and to this purpose have agreed to conduct regular consultations.  
2. Contracting Parties shall inform each other on existing customs tariffs and all exceptions 
thereto. 
Article 7 
 
 Contracting Parties shall consider incompa tible with the purposes of this Agreement any 
unfair business practices and shall not allow and elimin ate inter alia the following methods thereof:  
 
- agreements between enterprises, decisions ma de by the associations of enterprises, and 
general methods of business practices aime d at hindering or limiting competition or 
disrupting the competitive environment in the territories of the Contracting Parties;  
 
- actions by means of which one or a few enterprises use their dominant position, 
limiting competition within the entire territory of the Contracting Parties or a significant part thereof.  
 
Article 8 
 
 For the purposes of applying measures of ta riff and non-tariff regulation in the bilateral 
economic relationships, statistical information exchange, and for carry ing out customs procedures, the 
Contracting Parties will use the unified, nine-dig it Commodity Nomenclature of Foreign Economic 
Activities (CN FEA), based upon the Harmonized Commodity Description and Coding System and 
Combined Tariffs and Statistics Nomenclature of  the European Economic Community. For their own 
needs Contracting Parties may expend this Comm odity Nomenclature beyond the nine digits if 
necessary.   
Article 9 
  Contracting Parties agree that the adherence to the principle of freedom of transit is the major 
condition for achieving goals of this Agreement a nd a substantial element in the process of their 
integration into the system of interna tional division of labour and cooperation.  
  Thereupon each Contracting Party shall provide unimpeded transit through its territory and 
shall not subject to unjustified delays and restric tions goods originating from the customs territory of 
the other Contracting Party or third countries and destined for the customs territory of the other Contracting Party or any third country, and shall supply exporters, importers , and carriers with all WT/REG175/1 
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 facilities and services available and necessary for en suring transit on terms not worse than those 
granted to national exporters, importe rs, or exporters, importers or carriers of any other third state.  
  Contracting Parties shall conclude a special agreement on transit.   
Article 10 
 
 This Agreement shall not impede the right of an y of the Contracting Par ties to take generally 
accepted in the international practice measures whic h it considers necessary for protecting its vital 
interests or which are undoubtedly necessary for compliance with intern ational agreements to which it 
is or intends to become a party, if these measures relate to:  
 
- information affecting the interests of nati onal defence, trade in arms, munitions and 
military equipment;  
 
- research or production related to the defence needs;  
 - supply of materials and equipment used in nuclear industry;  
 - protection of public morali ty and public order;  
 
- protection of industrial and intellectual property;  
 - gold, silver, and other precious metals and stones;  
 - protection of human, animal and plant life.  
 
Article 11 
 
 With the goal of pursuing coordinated polic y of export control in relation to the third 
countries Contracting Parties shall conduct regular c onsultations and take mutually agreed measures 
for creation of effective system of export control.  
 
Article 12 
 
 Provisions of this Agreement shall replace the provisions of agreements concluded earlier by 
the Contracting Parties insofar as the latter are incompatible or identical with the former.  
 
Article 13 
 
 Nothing in this Agreement shall prevent C ontracting Parties from establishing relationships 
which do not contradict the goals and terms of this Agreement with the states which are not parties to 
this Agreement and with their associati ons and internationa l organizations.  
 
Article 14 
 
 Disputes between Contracting Parties related to interpretation or application of provisions of 
this Agreement shall be resolved by means of negotiations.  
 
 Contracting Parties shall endeavour to avoid conflicting situations in mutual trade.    Contracting Parties establish that claims and disputes between economic entities of both 
countries resulting from interpretation or implementation of commercial contracts or transactions, in  WT/REG175/1 
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 case they cannot be settled amicably on the basis of consultations and nego tiations and unless agreed 
otherwise, will be the exclusive co mpetence of arbitration tribunals (permanent or ad hoc) established 
in the territory of Contracting Parties or the territory  of the third states specified by the Parties having 
signed the contract.   
 The latter can also define the applicable s ubstantive law, norms and procedures as well as the 
premises for the hearing of the case.   Each Contracting Party shall assure in its terr itory effective means to recognise and enforce 
arbitration awards.  
 
Article 15 
 
 To achieve the goals of this Agreement a nd to elaborate recommendations for developing 
trade and economic cooperation between the two c ountries, Contracting Parties have agreed to 
establish a joint Armenian-Turkmen commission which w ill have its meetings at the request of one of 
the Parties alternately in the Republic of Armenia and Turkmenistan.   
Article 16 
 
 Contracting Parties have agreed that th e Republic of Armenia may establish its trade 
representation in Turkmenistan, and Turkmenistan  may establish its trade representation in the 
Republic of Armenia. The legal status of these trad e representations, their functions and residence will 
be established by the Contracting Parties in a separate agreement.  
 
Article 17 
 
 This Agreement becomes effective upon ex change of notices of completion by the 
Contracting Parties of intra-state proced ures necessary for its entry into force.  
  This Agreement will become invalid after six months from the date, when one of the 
Contracting Parties notifies the other Contracting Pa rty in writing of its desire to terminate this 
Agreement.  
  This Agreement after its termination shall apply to the contracts among the enterprises and 
organizations of both countries, concluded, bu t not implemented during the period when the 
Agreement is in force.  
 
 Done in the City of Ashgabat, on October 3, 1995 in two originals, each in Armenian, 
Turkmen, and Russian, all texts being equally authentic.    In case of differences in interpretation of the te xt of this Agreement the text. in Russian shall 
have prevalence.  
 
 The Agreement came into force on July 7, 1996.    
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