RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/ACC/SPEC/ARM/1/Rev.41 
14 June 1999 
 (99-2379) 
Working Party on the  
Accession of Armenia  
 
 
 
DRAFT REPORT OF THE WORKING PARTY 
ON THE ACCESSION OF ARMENIA 
 
Revision  
 
I. Introduction 
 
1. At its meeting on 17 December 1993, the Counc il of Representatives established a Working 
Party to examine the application of the Government of Armenia to accede to the General Agreement on 
Tariffs and Trade (GATT 1947) under Article XXXIII,  and to submit to the Council recommendations 
which might include a draft Prot ocol of Accession.  In a co mmunication dated 31 January 1995 
(WT/L/25), the Government of Arme nia applied for accession to the Agreement Establishing the World 
Trade Organization (WTO) pursuant to Article X II of the WTO Agreement. Following Armenia's 
application and having regard to the Decision adopted by the General Council on 31 January 1995 
(WT/GC/M/1),  the Working Part y on the Accession of Armenia to  the GATT 1947 was transformed 
into a WTO Accession Working Party.  The terms of reference of the Working Party were also contained in document WT/L/25.  
2. The Working Party met on 24 January a nd 23-24 September 1996, 14 May 1997 [and ...] under 
the Chairmanship of H.E. Mr. D. Kenyon (Australia). 
 
Information  3. The Working Party had before it, to serve as  a basis for its discussions, a Memorandum on the 
Foreign Trade Regime of Armenia (WT/ACC/ARM/1), and the questions submitted by Members on the 
Armenian foreign trade regime together with th e replies of the Armenian authorities thereto 
(WT/ACC/ARM/2 and Corr.1;  WT/ACC/ARM/5;  and WT/ACC/ARM/8).  In addition the 
representative of Armenian made available to the Working Party the following material: 
                                                     
 
1 In order to facilitate the identification of changes to the earlier version of the Report, additions to the 
text are underlined and deletions are struck out. WT/ACC/SPEC/ARM/1/Rev.4 
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 - Decree of the Government of the Republic of  Armenia No. 40 of 13 February 1993, "Additional 
 Measures on State Regulation of International Economic Activities"; 
- Resolution No. 31 of 21 February 1995, "On Regulation Regarding the Establishment, 
Registration, Licence and Suspension of Activitie s of Banks and Their Branches and Agencies 
and Those of Foreign Banks Opera ting in the Republic of Armenia” 
- Law on Amendments and Additions to the Republic of Armenia Law on the "Value-Added 
 Tax" of 10 December 1994; - Law of the Republic of Armenia on Property Tax; - Law on Making Amendments in the Rep ublic of Armenia Law on Excise Tax of 
 30 November 1994; 
- Law on Pledge Collateral; 
- Law on Bankruptcy of Enterprises and Indi vidual Entrepreneurs of 15 June 1995; 
- Law on Making Amendments in the Republic of Armenia Law on Corporation Tax of 19 
December 1994; 
- Draft Law on Standardiza tion and Certification; 
- Law on Patents of 21 August 1993; 
- Law on Income Tax of 8 February 1995; - Law on Land Tax of 27 April 1994; - Law on State Agrarian Inspections; - Statute of the Peasant and Collec tive Peasant Farms of 22 January 1991; 
- The Land Code of 29 January 1991; 
- Supreme Council Resolution on the Maximum Sizes of the Land Lots in Property of the Peasant 
and Peasant Collective Farms; 
- Resolution No. 581 of 16 December 1994, “On Co rroboration of the Tem porary Regulations for 
Auditing Activities in the Republic of Armenia”; 
- Government Decision of 17 January 1995, "On the Procedure of Granting Licenses for 
Importation and Exportation of Goods (Works, Services) in the Republic of Armenia"; 
- Government Resolution No. 67 of 8 February 1995, "On the State Procurement Order of 1995 
of the Republic of Armenia"; 
- Government Resolution No. 4 of 19 August 1995, "On Confirmation of the Temporary 
Regulations for Trademarks and Service Marks"; 
- Government Resolution No. 606 of 29 Decembe r 1994, "On Rates of  the Exci se Tax"; 
- Government Resolution No. 88 of 23 February  1994, "On the Order of Submitting Statistical 
Reports Regarding the Importation and Exportati on of Services in the Republic of Armenia"; 
- Council of Ministers Resolution No. 161 of 5 Ma rch 1991, "On the Order of Exercising Diverse 
Types of Economic Activities on the Te rritory of the Republic of Armenia"; 
- Decree of the Government of the Republic  of Armenia No. 124 of 29 December 1995 On 
Non-Tariff Regula tion of the Commodities (Operations, Services) Import and Export in the 
Republic of Armenia; 
- Statement of the Central Bank of  the Republic of Armenia on Jo ining to Article VIII of the IMF 
Agreement.; 
- The Law of the Republic of Armenia of 30 June 1996, "O n Central Bank of Armenia"; 
- The Law of the Republic of  Armenia of 30 June 1996, "On Banks and Banking"; 
- The Law of the Republic of  Armenia of 10 June 1996, "On Bankruptcy of Banks"; 
- Decree of the Government of the Repub lic of Armenia No. 124 of 29 December 1995, "On 
Non-Tariff Regula tion of the Commodities (Operations, Services) Import and Export in the 
Republic of Armenia"; 
- Amendments to the Law, "On Privatization a nd Denationalization of St ate-Owned Enterprises 
and Unfinished Construction Sites"; 
- List 2 of the Resolution of the Government of the Republic of Armenia No. 415 of 1995,"On 
types of Activities that are Subject to Licensing in the Territory of the Republic of Armenia"; 
- Statute of the Ministry of Economy of the Re public of Armenia of 20 June 1996, "On Issuing 
Inferences on Minimal Pricing of Exports of Pr oducts from Ferrous and Non-ferrous Metals not 
Produced in Armenia, as  well as their Scrap";  WT/ACC/SPEC/ARM/1/Rev.4 
 Page 3 
 
 
 - Statute of the Ministry of He alth of the Republic of Armeni a of 20 June 1996, "On Issuing 
Inferences on Import and Export of Pharmaceuticals into and from the Republic of Armenia"; 
- Statute of the Ministry of Environment Prot ection and Mineral Resources of the Republic of 
Armenia of 20 June 1996, "On Issuing Inferences on Export of  Wild Animals and Plants 
Included in the Red Book (Endangered Specie s Listing) of the Republic of Armenia"; 
- Statute of the Ministry of Agriculture and F ood of the Republic of Armenia of 20 June 1996 On 
Issuing Inferences on Import of  Plant Protection Agents into the Republic of Armenia. 
- Decree of the Ministry of Health of the Republ ic of Armenia, "On Regul ation of Pharmaceutical 
Activity and Ensuring the Quality of Drugs and Medical Facilities"; 
- Programme of the Government of the Republic  of Armenia, "On Pr ivatization of State 
Enterprises and Unfinished Construction sites of the Republic of Armenia for 1996-1997";  and 
- Amendment of 1 May 1996 to Annex N 1 to Decr ee of the Government of the Republic of 
Armenia No. 615 of 6 December 1993, "On Determining the Cu stoms Duties"; 
- Law of the Republic of Armenia "On Customs Duties" of 30 December 1998; 
- Law of the Republic of Armenia "On Customs User Fees of 30 December 1998; 
- Decree of the Government of Armenia "To Defi ne the Rules for Determining the Country of 
Origin of Goods"; 
- Civil Code of the Republic of Armenia of 5 May 1998; 
- Civil Procedure Code of 20 January 1998; 
- Criminal Procedure Code of 20 January 1998; 
- Law of the Republic of Armenia "On Trade Names" of 12 May 1997; 
- Law of the Republic of Armenia "On Trade and Service Marks and Appellations of Origin of 
Goods"; 
- Patent Law of 21 August 1993; 
- Law of the Republic of Armenia "On Copyrigh t and Neighbouring Rights" of 27 May 1996; 
- Draft Law of the Republic of Armenia "Protection of Secret Information"; 
- Draft Law of the Republic of Armenia "On Protection of Selection Achievements"; 
- Law of the Republic of Armenia "On Legal Protection of Topographies of Integrated 
Circuits" of 3 February 1998; 
- Draft Proposals on the Amendments in the Armenian Law on Patents Dealing with the 
Provisions of the WTO Component Agreement TRIPS; 
- Regulation "On Importation of Goods Subject to Ce rtification in the Republic of Armenia into 
the Customs Territory of the Republic of Armenia" of 16 January 1998; 
- Decree No. 15 of the Government of the Republic  of Armenia "On Compulsory Certification 
of Goods and Services in the Republic of Armenia" of 16 January 1998; 
- Regulation "On Application of Certificate of  Compliance when Realising and Advertising 
(Rendering Services) the Certifie d Goods Subject to Compulsory Certification in the Republic 
of Armenia" of 16 January 1998; 
- Regulation "On Fees for the Compulsory Certif ication in the Republic of Armenia" of 16 
January 1998; 
- Decree No. 171 of the Republic of Armenia "On Establishment of Agrarian Regulations" of 
11 March 1998; 
- List of Toxic and Biological Means Permitted for the Use in the Republic of Armenia to 
Struggle Against Pests, Diseases and Weeds of Ag ricultural Cultivated Plants, Forestry and 
Ornamental Plants; 
- List of Quarantine Pests, Diseases of Plants  and Weeds for the Republic of Armenia; 
- List of Quarantine Plants, Food, Seeds and Seedlings of Plant Origin for Quarantine 
Protection Purposes; 
- Law of the Republic of Armenia "On Agrarian State Inspections" of 15 May 1996; 
- Regulation "On Cooperation Between the Customs Authorities, Border Veterinary Inspection 
Stations and State Plant Quarantine Services of the Republic of Armenia" of 27 January 1998; 
- Draft Law of the Republic of Armenia  "On Plant Protection and Plant Quarantine"; 
- Law of the Republic of Armenia "On Veterinary Medicine"; WT/ACC/SPEC/ARM/1/Rev.4 
Page 4  
 
 - Government Decree No. 26 of the Republic of  Armenia "On the Measures to Ensure the 
Implementation of the Separate Articles of the Laws of the Republic of Armenia on 
"Standardization and Certification"  and the "U niformity of Measures" of 20 January 1998;  
and 
- Decree of the Government of Armenia No. 26 "Procedure on the Implementation of State 
Metrology Control Over the Quantity of Withdrawn Commodities" 20 January 1998. 
  
Introductory statements 
 
4. In an introductory statement, the repres entative of Armenia said that since declaring 
independence from the former Soviet Union in 199 1, Armenia had vigorousl y pursued free market 
reforms within a democratic framework, notwithst anding acute political and economic difficulties.  
Economic decline had been reflected in sharp reductions in output, falli ng incomes, reduced trade flows, 
severe shortages of energy, and sc arcity of food and other consumer goods.  Despite this adversity, the 
Government had persevered with  the economic reform programme, placing particular emphasis on 
liberalization, stabilization, and economic restructuring.  Most agricultural land was privatized shortly 
after independence and privatization in other sectors was moving ahead.  Demonopolization and 
deregulation had remove d barriers to private sector participa tion in all but a few areas of economic 
activity.  Price controls were only applied to a limit ed number of essential goods  and services, and were 
being phased out.  Foreign investment was encouraged.  On the macroeconomic side, stabilization 
policy was a government priority, given the challenge of the difficult budgetary position, combined with 
the need to contain inflationary pressures and maintain exchange ra te stability.  The Government had 
successfully brought monthly inflation down to a single digit level, from the triple-digit levels prevailing 
at the end of 1993.  By the end of 1997 the annual in flation was 21.9 per cent, and the expected annual 
inflation for 1998 would fall to a level of 1 to 3 per cent.  The Government was strongly committed to 
securing a sound and stable macroeconomic framework for future economic growth and development.  
Fuller integration into the world economy, and continuing diversification of Armenia's economic 
relations with other countri es, were central planks of the Governme nt's reform efforts.  The Government 
of Armenia believed that  these objectives could only be atta ined through open trade policies that 
emphasized specialization on the basis of international comparative advantage.  It was for this reason 
that the Government of Armenia attached priority to its accession to the World Trade Organization, and 
wished to complete negotiations for membership at the earliest opportunity.  
5. The Working Party welcomed Armenia's application for accession to the Agreement 
Establishing the WTO.  Several members of th e Working Party acknowledg ed that Armenia had 
undergone a rapid process concerning reform and trade liberalization wh ich, notwithstanding internal 
and external difficulties, appear ed to be succeeding in permitting economic growth.  These members  WT/ACC/SPEC/ARM/1/Rev.4 
 Page 5 
 
 
 expressed support for Armenia's inte gration into the multil ateral trading system and indicated their 
readiness to pursue the negotiations in earnest. 
 
II. Economic Policies - Foreign exchange and payments  6. In response to questions from members of the Working Party concerning Armenia’s foreign 
exchange reserves and the convertibility of the Dram , the representative of Ar menia stated that gross 
official reserves made up US$ 225.7 million as of 28 October 1997 and covered about 2.8 months of 
imports. Gross official reserves had risen from 0.7 months of import cover in 1994 to 2.3 months in 
1996. Gross official reserves had risen to 3.5 months of import co ver by the end of 1998. On 29 May 
1997, Armenia had accepted the  Ar ticle VIII of the Inte rnational Monetary Fund's Agreement and the 
obligations implied by Sections 2, 3 and 4 thereof and has committed to refrain from imposing 
restrictions on carrying out payments and transfer s, and from engaging in discriminatory currency 
arrangements or multiple currency practices wit hout IMF approval. According to the Resolution No. 
141 "On Foreign Exchange Regulation and Administration of Control", there were no restrictions on 
current account operations. After bei ng licensed by the Central Bank natural persons and legal entities 
were allowed to act as foreign exchange dealers. The Central Bank of Armenia (CBA) determined the daily exchange rate as a midpoint of the previ ous day’s buying and selling operations in foreign 
exchange market (the participants of foreign exch ange market are those dea ling with over-the-counter 
market, stock exchanges, foreign exchange bureaus, etc.). Foreign exchange dealers and banks were free to establish their own ex change rates for transact ions. Non-resident banks could be authorized to 
participate in the domestic foreign exchange market on conditions equal to those set for resident banks. 
Legal entities and natural persons, residents and non-residents of Ar menia could open and hold their 
current accounts in foreign bank s without any restrictions.  Resi dents of Armenia could implement 
operations related to movement of capital without any restrictions unless ot herwise specified by CBA. 
Non-residents could implem ent operations related to movement of capital according to the "Law on 
Foreign Investments" of the Republi c of Armenia.  All bilateral clea ring arrangements based on barter 
had been eliminated. 
 
- Income Tax 
 
7. The representative of Armenia stated that acco rding to the Law on Income Tax, which entered 
into force on 1 January 1998, personal income tax w as determined   based upon the annual amount of 
the taxpayer’s income. In determining the taxable income the following deductions could be made 
from a gross income: deductible income, persona l deductions, and expenses. Gross income was WT/ACC/SPEC/ARM/1/Rev.4 
Page 6  
 
 deducted by dram 8,000 for each month during which an income was earned. The following income 
tax rates were levied on annual taxable income: 
 
Annual taxable income Amount of income tax 
Less than dram 120, 000  15 per cent of the amount of income 
More than dram 120,000 but less than or equal 
to dram 320,000 dram 18,000 added to 25 per cent of the amount 
of income exceeding dram 120,000 
More than dram 320,000 dram 68,000 added to 30 per cent of  the amount 
of income exceeding dram 320,000 
 
The following categories of receipts were exempti ons from income for tax considerations: social 
security allowances under Armenian legislation, lump-sum allowances to families of military 
servicemen killed or  handicapped, alimony payments, earnings of individuals for delivering blood and pectoral milk or for other type of donor activities.  
- Land Tax 
 
8. The representative of Armenia stated, that the land usage in Armenia was charged. The land tax was imposed on the private landowners and users of land under State property. The land tax was 
determined as an annual fixed charge for a land pl ot unit. For agricultural land the land tax rate was 
established at 15 per cent of calculated net income de termined by the estimated cadastre value of the 
land, and for the land for non-agricultural usage the land tax rate was established at 1 per cent of the 
estimated cadastre value of the land. In order to pr omote the development of plant-raising, the newly 
established and immature orchards and vineyards  we re exempted from payment of land tax.  In the 
event of adverse agricultural circumstances, in or der to reduce a tax burden, the Government, by 
consent of the National Assembly of Armenia, may  grant certain tax exemptions to some taxpayers or 
to groups of taxpayers.  In a new Draft of the Law on Land Tax, which was submitted to the National 
Assembly of Armenia, the property character of land tax was accentuated, and tax calculation 
methods were simplified. In particular, for bot h agricultural and non-agricultural land plots the 
amount of tax would be calculated based on their value, and that value would be determined 
according to the same Law.  
Profit Tax 
 9. The representative of Armenia stated that  according to the new Law on Profit Tax, which 
entered into force on 1 January 1998, profit tax w as imposed on residents and non-residents.   For 
residents the profit tax would be charged on taxabl e profit obtained in Armenia and abroad. For non-
residents the profit tax would be charged on ta xable profit obtained from Armenian sources. For  WT/ACC/SPEC/ARM/1/Rev.4 
 Page 7 
 
 
 residents the amount of profit tax charged on taxa ble profit would be determined according to the 
following table: 
 
Amount of Taxable profit  Profit tax  
Less than dram 7 million  15 per cent of taxable profit 
More than dram 7 million dram 1.05 million added to 25 per cent of the 
amount of profit exceeding dram 7 million  
 
The amount of the profit tax, charged on the income from organizing and running gambling and 
lottery games, would be equal to 70 per cent of the profit obtained.  The following types of revenues 
were contemplated to be obtained from Armenian sources: 
- income obtained by non-residents from their entrepreneurial activities within Armenian 
territory; 
- passive income obtained by non-residents from residents or non-residents; 
- other income obtained by non-residents within the Armenian territory; 
The tax charged on income obtained by non-residents from the Armenian sources would be levied 
according to the following rates: 
 
Type of Income: Profit tax rate
Interests 0 per cent 
  
Insurance offsets received in a result of insurance; payments received for 
reinsurance, incomes recei ved from shipment (freight) 5 per cent 
Dividends, Royalties; income received from property rent; property value  
increment and other passive incomes (e xcept incomes received from shipment 
(freight)), as well as incomes received from other Armenian sources 15 per cent 
 
Taxpayers  engaged in production of agricultural products would be exempted from the profit tax 
payments  , as well as the following entities  regi stered in the Tax Inspectorate would be exempted 
from the profit tax payments:  
- public and religious organizations ; Armenian political parties; 
- condominiums; non-profit organizations, est ablished and operated exclusively for 
religious, benevo1ent, scientific purposes,  for testing for public security purposes, for 
environmental protection, development and propaganda of literature, culture and 
education,  protection of consumer rights, pr omotion and organization of  amateur sports,  
for protection of human, women's, children's a nd old people's rights  , in case if any part WT/ACC/SPEC/ARM/1/Rev.4 
Page 8  
 
 of the income of these organizations was not distributed among their members or other 
persons and was used  exclus ively for statutory purposes; 
- libraries, museums, secondary schools, boarding schools, asylums for old people and 
children, in case if any part of the income of these organizations was not distributed among their members or other persons and was used exclusively for the statutory purposes. 
 
If after 1 January 1998, the actually invested share of the foreign investor in the statutory fund of the  
resident enterprise with foreign investments is at  least dram 500 mi1lion the amount of the profit tax 
levied on that resident enterprise would be reduced by: 
In case of termination of the taxpayer’s activities in  the period of privileges, the amount of the profit 
tax for this period would be calculated at th e full rate for the whole period of activities. 
 
Year when the established investment 
benchmark in the statutory fund of a 
resident enterprises would be fulfilled Proportion of profit tax reducti ons from the tax liability of 
the resident enterprise with foreign investment, allowed 
for the respective years 
 100 per cent 50 per cent 
1998 1999 and 2000 2001-2008 inclusive 
1999 2000 and 2001 2002-2009 inclusive 
2000 2001 and 2002 2003-2008 inclusive 
2001 2002 and 2003 2004-2007 inclusive 
2002 2003 and 2004 2005-2006 inclusive 
2003 2004 and 2005  
2004 2005 and 2006  
2005 2006 and 2007  
2006 2007 and 2008  
2007 2008 and 2009  
 
- Property tax 
 
10. The representative of Armenia added that by the adoption of the Law on Property Tax the fixed 
assets tax was replaced by the property tax..   The property tax was a direct tax, levied on buildings and 
vehicles that belonged to natura l and legal entities as private property or property for commercial 
usage. The calculation of the tax levied on buildi ngs was determined based on their value (which was 
also determined according to Law on Property Ta x), whereas the calculation of the tax levied on 
vehicles was determined based on the power capacity of its engine. The revaluation of buildings was 
carried out once every three years, according to pr ocedures, set out by the same Law. In cases where 
the value of residential building was less than 3 million dram, it was exempted from property tax. For 
residential buildings with a value above 3 milli on dram, respective tax rates were determined 
according to a rate scale, varying w ithin a range of 0.1-0.8 per cent.   WT/ACC/SPEC/ARM/1/Rev.4 
 Page 9 
 
 
  
11. The representative of Armenia stated that in accordance with the Law on Property Tax, the 
property tax  levied on buildings for public and production usage was established at 0.6 per cent of 
their value. For vehicles, respective tax rates were  determined at rates of  dram 50-500, depending on 
their type. In the case of motor vehicles, propert y tax was determined, based not only on power 
capacity but also on age.  
 - State ownership and privatization 
 
12. In response to requests for information con cerning the privatization of State owned asses, the 
representative of Armenia stated that the process of privatization started in Armenia since the beginning of 
1991, when according to decision of the Government 335 small enterprises in the sphere of distribution, 
meals and catering, and other services had been priv atized. The Law on Privatization and Denationalization 
of Enterprises and Unfinished Construction Sites wa s adopted in 1992 which served as legal base for the 
whole legislation in field of privatization in the en suing period.  The national Assembly adopted a number 
of Privatization Programmes, under the guidance of wh ich the privatization process has been carried out.  
The first annual Programme on Privatization and Denationalization of Enterprises and Unfinished 
Construction Sites was adopted by Parliament on 12 January 1994. That programme envisaged 
privatization of 1,985 large and me dium enterprises representing various branches of Armenian industry, as 
well as 2,754 small enterprises (in the sp here of distribution, meal and catering, and other services).  On 27 
September 1995 the National Assembly also adopted the Programme on Privatization of 1995, and the 
adoption of that Programme was based on the Pr ogramme of Privatization of 1994 with certain 
amendments and changes. The next Programme of Priv atization, adopted by the National Assembly on 20 
March 1996, was envisaged for the years 1996-1997.  The following privatization targets were set by that 
Programme: 3,809 entities were offered for privatiza tion, of which 195 were in industry, 22 in 
transportation, 82 in construction, 3 in telecommunica tions, 70 in agriculture, 3 in material and technical 
logistics, 191 in the public utilities sector, 2,385 in  the social sector, 5 in the automobile maintenance 
sector, 16 in the natural deposits sector, 66 enterpri ses of the Yerevan Municipality, 1,763 in the 
distribution and meal serving sector, 760 in the hous ehold services sector, as well as 395 unfinished sites of 
housing construction.  The Privati zation Programme which is currently in force was adopted by the 
National Assembly in 26 December 1997 and was envisag ed for the years 1998-2000.  Taking into account 
that the previous Programmes of Privatization of  1995 and 1996-1997 were still being implemented, the 
Privatization Programme of 1998-2000 wa s designated to incorporate in its  privatization targets all those 
companies and small enterprises, which were included in the privatization schedules of the previous two 
programmes but of which privatization was not acco mplished by the date of enactment of the new 
Programme.  This amendment was stipulated by the n ecessity to ensure the uniformity of guidance in the WT/ACC/SPEC/ARM/1/Rev.4 
Page 10  
 
 privatization process.  It should be mentioned that either previous Laws and Programmes on Privatization 
or the Law on Privatization of State owned Assets , approved by the National Assembly in 17 December 
1997 did not create any legal barriers for the participa tion of foreign natural a nd legal persons in the 
privatization of State-owned assets and did not discr iminate between foreign and Armenian natural and 
legal persons.  By 1 November 1998, 1,430 medium a nd large enterprises had been privatized, of which 
1,007 enterprises had been privatized through the open  subscription of shares - 62 through share auctions, 
127 were privatized to employees - 49 through tenders 7 of which were international, 16 through auctions, 
and 169 were privatized to lessees. For this group of  enterprises the major form of privatization was open 
subscription of shares (practiced for 75 per cent of privatized entities) .  Privatization of 503 enterprises 
failed, mainly because of high prices, poor business pros pects and heavy indebtedn ess, privatization of 169 
also failed at a second attempt.  The Government adopted Decisions on privatization of 1,858 large and 
medium enterprises (including 15 Decisions on dissoluti on of enterprises).  The following enterprises were 
privatized through international te nders: "Armentel" State Enterprise,  Yerevan Brandy plant, Hotel 
"Armenia" and Hotel "Ani".  The privatization of th e State power, production and distribution network, as 
well as "Armenian Airlines" Company was anticipated.  In the power sector ten hydro-electric power 
stations had been already privatized, two of which to foreign persons.  The Armenian network of gas 
distribution was privatized, resulting in the establis hment of "ArmRusGasArd" CSC.  The table below 
represents more detailed information on the process of the privatization accomplished in Armenia during 
years 1995-1998.   
  WT/ACC/SPEC/ARM/1/Rev.4
 Page 11 Open stock 
companies Closed stock 
companies Sale of assets to 
the lessee Auctions Tenders International 
tenders Companies 
dissolved In 1998 Total Unfinished 
construction 
sites 
           
Government’s decision 1,346  141  174  36  126  20 1 4 178  1.858  474 
Total: of which 1,315  141  174  34  121  19    1,819  93  
Privatization in process 17  2  1   12  7    39  
Privatization suspended 229  12   19  67     196  336  66  
Privatization finished 1,069  127  169  16  42    187  1,430  27  
Total: of which 1,315  141   34  121     1,819  93 3 
Industry 409  50   6  6     476   
Agriculture 351  36   10  10     408   
City construction 188  8    15     211   
Culture 30  6        36   
Trade and services 37 6  2     45  
Transportation 27  14        41   
Communication 11  1        13    
Health 1  4        5  
Others 21  5   9    35   
 
 Evaluations made Privatized 1994-1997 Privatized through auction Subject to sale through auction 
Small  enterprises 7.989  6,576  247  253  
 
 Paid 
(thousand drams) 
Total of which by certificates by drams Number  of certificates paid of which in 1997 by 
certificates (thousand drams) 
by drams 
Medium to large enterprises 78,195,961 35,082,916.4 39,294,740 34,893,460 38,901,221 189,456.4 1,964,737 1,744,673 1.642,880 7, 978,180 38,711,111 1,929.4 
Unfinished construction site 184,240 89,568 175,300 88,800 8.940 768 8,765 4,440 62,220 73,820 3.293 748 
 Small  enterprises 24,063,215 19,156,172.7 23,405,940 18,959,980 657,275 196,192.7 1,207,776 985,478 2,054,660 5,732,900 449,5 46 30,666.4 
Total 102,.443,417 54,328,657.1 62,875,980 53,942,240 39,567,443 386,417.1 3,181,278 2,734,591 3,759,760 13,784,900 39,163,951 3 3,343.8 WT/ACC/SPEC/ARM/1/Rev.4 
Page 12  
 
 13. The representative of Armenia added that th e  there was still concern with effective 
implementation of the privatization programme, par ticularly in connection with changing the overall 
concept of privatization, and the desirability of certificate versus money privatization was deeply 
questioned.  As in other transition economies, prompt positive effects (in two to three years) from privatization proved to be oversta ted, and a more realistic appro ach currently prevailed which was 
oriented at maximization of money gains from priva tization.  From this point of view the mixed 
approach recently became more preferable, simulta neously ensuring a progressive increase of the 
share of money privatization in total.  Accordi ng to the new Law on Privatization of State-owned 
Assets the Authorized Privatization Body, and th erefore the Government, was entitled to a greater 
flexibility in privatizing each single, with respect to the choice of the form of privatization, as well as 
with respect to the terms of payment for privatized  assets.  The Government also began the process of 
dissolution of those enterprises whic h had been offered for privatization according to legislation and 
of which the privatization had failed.  The tran sparency of information relating to privatized 
enterprises was ensured.  Detailed information on pr ivatized enterprises was r eadily available in the 
mass media.   
 
14. In response to a further question, the repr esentative of Armenia stated that Armenia had 
privatized almost 90 per cent of agricultural land and made land titles freely transferable.  The small share of land still in State hands is reserve land and land used for certain kinds of agricultural support 
activities described in paragraphs  101-104 below.  The Government of Armenia did not have a 
timetable for the privatization of agricultural land still in State hands.  15. The representative of Armenia confirmed that to ensure full transparency and to keep WTO 
members informed of its progress in the reform of its transforming economic and trade regime, 
Armenia would provide annual reports to WTO Me mbers on developments in its programme of 
privatization along the lines of the information provi ded to the Working Party, and on the other issues 
related to its economic  reforms as relevant to its  obligations under the WTO.  The Working Party took 
note of this commitment.  
- Investment regime 
 
16. The representative of Armenia stated that the 1994 Law on Foreign Investments regulated 
Armenia’s policies towards foreign investment.  The Law was designed to attract investment from 
foreign sources.  It provided guarantees against na tionalization and provided that confiscation could 
only take place following a judicial decision.  In th e unlikely event of confiscation, full compensation 
would be payable.  Foreign investors were inde mnified against damages resulting from illegal actions  WT/ACC/SPEC/ARM/1/Rev.4 
 Page 13 
 
 
 by Government, or from the improper performance by  Government of its obligations (as determined 
in a Court of Law).  The Law also guaranteed investors the right to repatriate profits and assets without hindrance.  In the event that foreign invest ment legislation was cha nged after an investment 
has occurred, the investor concerned was entitled to  an exemption from any less favourable provisions 
during a five-year period.  17. The representative of Armenia further noted that  from 1 January 1998 the Law on Profit Tax 
introduced a new order for the taxation of the profit of enterprises with foreign investments in accordance with which, if the share of foreign invest ors in the statutory fund is  at least 500 million dram, 
the profit tax of enterprises with foreign investment s will be reduced by 100 percent of the amount of 
profit tax for the two years following the year of investment.  The reduction of the profit tax for the following years is shown in the Table in paragraph 9 above.  In case of termin ation of the enterprises 
with foreign investments in the period of these ten ye ars the profit tax for the privileged period would be 
calculated at full amount for the whole period of th eir activity. Enterprises with any foreign ownership 
had been entitled to indefinite duty-free treatment on all their imports of capital equipment and recurrent 
inputs. According to the Decree No. 124 the privileg es for foreign investors on the licensing of the 
products for import and export activiti es were exempted, and the follo wing procedure es tablished: the 
non-tariff regulations of the unified system of expor t and import of goods and services was extended to 
all economic entities of the Republic of  Armenia, irrespective of the fo rm of ownership and the place of 
registration.  Foreign investors we re free to choose their own insu rers.  No investment performance 
requirements are maintained.  There were no requirements for foreign investors to export a certain 
amount of product, and the Government did not inte nd to introduce any such  requirements. Foreign 
investors received full national treatment. 
18. The representative of Armenia stated that any restrictions on investment  were generally applied 
on a non-discriminatory basis as be tween national and foreign investor s. By the Constitution of the 
Republic of Armenia the fore ign citizens and persons without citizenship did not have the right to own 
land. 
 
- Pricing policies  19. In response to requests for an update on th e progress of price reform, the representative of 
Armenia stated that since 1995, al most all government-manda ted price controls had been removed.  The 
only domestic prices that were still subject to  re gulation were those for irrigation, urban electrical 
transport, electricity, hot water, gas, heating, sewa ge services, garbage collection, rent in State-owned 
housing, and telephone services.  T hose prices were still subject to  regulation because State-owned 
enterprises were the exclusive or dominant suppli ers, or in case of tele phone services, the private WT/ACC/SPEC/ARM/1/Rev.4 
Page 14  
 
 supplier enjoyed exclusive rights on provision of services
.  All administered prices were adjusted on a 
regular basis to maintain their real value.  The only remaining direct price control was on flour  (through 
the setting of maximum profit margins for flour mills) .  Minimum export prices were in place for ferrous 
and non -ferrous metal scrap, but only for the purpose of calculating the corporate tax liabilities of 
enterprises dealing in these scrap meta ls. 
 
20. The representative of Armenia added that subsidies on bread, municipal electric transport and 
garbage collection, and cross-subsidies on water and sewerage had been eliminated.  The subsidies on district heating and hot water (the only remaining consum er subsidies) were under review.  In the case of 
district heating, which less than one-third of househ olds actually receive, the issue of provision of 
targeted heating subsidies to vulnera ble groups would be resolved as part  of the overall reform of social 
assistance. 
 21. The representative of Armenia confirmed that as of the date of accession price controls on 
products and services in Armenia have  been eliminated with the excepti on of those listed in paragraphs 
19 and 20 of this report, and that in the application of such controls, and any that are introduced or re-
introduced in the future, Armenia will apply such measures in a WTO-consis tent fashion, and take 
account of the interests of expor ting WTO members as provided for in  Article III:9 of the GATT 1994. 
He also confirmed that the goods a nd services listed in paragraph 19  and 20 had been published in the 
Government’s official newspaper and any products subject to State price controls in the future, including 
any changes in the initial list reported at the time  of accession, would be published in the official 
newspaper.  The Working Party took note of this commitment. 
 
III. Framework for Making and Enforcing Policies 
 Powers of executive, legislative and judiciar y, administration of policies on WTO-related 
issues 
 
22. The representative of Armenia said that that   the legislature of the Republic of Armenia is the 
National Assembly, which consiste d of 190 deputies.  Upon parliamentary elections in 1999 the 
number of deputies will be 131.  The plenary powers of the National Assembly terminate in June of 
the fourth year after its elections, on an opening day of a first session of the newly elected National Assembly when its plenary powers commence. The deputies and the Government are authorized to 
submit Bills for approval by the National Assembly.  The National Assembly elects the Chairman by 
majority vote for the whole period of its plenary powers.  The Chairman conducts sessions, 
administers material and financial resources of th e National Assembly and ensures the performance of  WT/ACC/SPEC/ARM/1/Rev.4 
 Page 15 
 
 
 its ordinary activities.  Armenian laws were adopt ed by the National Assembly.  Laws entered into 
force upon signing by the President of the Republic and following promulgation,  if no other date was 
stipulated by respective Law.  This procedure applie d to all legislative amendments and rectifications, 
including those relating to the establishment or altera tion of tariffs and taxes.  The President of the 
Republic observed the adherence to Constitution, ensur es ordinary conduct of activities of legislative, 
executive and judiciary powers. The President of th e Republic was elected by popular vote every five 
years.  The President issued decrees and orders, wh ich were subject to impl ementation throughout the 
Republic of Armenia.  These decrees and orders sh ould not be in conflict with the Constitution and 
laws.  23. The representative of Armenia  added that th e Government carried out the executive power in 
the Republic of Armenia and comprises the Prime Minister and Ministers. The President of the 
Republic appointed and dismissed the Prime Mini ster, as well as upon recommendation of the Prime 
Minister appointed and dismissed the members of the Government. Resolutions of the Government 
were signed by the Prime Minister, and were ratified by the President. The Prime Minister was 
responsible for the day-to-day running of the Gove rnment and for coordination of  activities of other 
Ministers. The Prime Minister issued resolutions , which should be signed also by the Ministers, 
responsible for implementation, in cases, envisag ed by the Order of Governmental Activities. 
 
24. The representative of Armenia said that in c onformity with the Constitution of the Republic 
of Armenia, the judiciary powers were executed ex clusively by the Courts, in accordance with the 
Constitution and legislation.  In executing justice Judges were independent and obeyed only to law. 
The guarantor of the independence of judicial bodi es was the President of the Republic, who was the 
Head of the Council of Justice.  The Minister of Justice and the Procurator General were the Deputy 
Heads of the Council of Justice.  The Courts of ge neral competence were the C ourts of First Instance, 
the Review Courts and the Court of Appeals.  Th e Constitutional Court  comprised nine members,  
five of which were appointed by the National As sembly, and another four were appointed by the 
President of the Republic.  The Constitutional C ourt adopted resolutions and verdicts.  These 
resolutions were final, could not be challenged a nd entered into force upon promulgation.  According 
to the Constitution of the Republic of Armenia, th e Constitutional Court should decide on conformity 
of the provisions of the Agreement Establishing the WTO and of other WTO Agreements with the 
Constitution of the Republic of Armenia before submitting them for ratification to the National 
Assembly.  If norms, other than those provided by the laws of the Republic, were provided in these 
Agreements then the norms provided in that Agre ement shall prevail.  International treaties and 
agreements that contradicted the Constituti on may be ratified after making a corresponding 
amendment to the Constitution. WT/ACC/SPEC/ARM/1/Rev.4 
Page 16  
 
  
25. The representative of Armenia said that according to 
the Constitution of the Republic of 
Armenia contains transitional provisions  .  According to Armenian legislation, all economic disputes 
between legal persons of the Republic of Armeni a and those of other countries, including CIS 
countries, were referred to the Stare arbitrati on.  Bbeginning  from 1 January 1999 these  all economic 
disputes would should  also be referred to the jurisdiction of the Courts of general competence First 
Instance .  Disputes between legal pers ons and individual citizens were  referred to the Courts of 
gene ral competence  First Instance and may be appealed by order sti pulated by Armenian legislation. 
Armenian legislation did not contemplate any diffe rential treatment between CIS and non-CIS legal 
persons. Resulting on-going judicial and legal reforms a number of legislative acts were developed 
and adopted.  In particular, econom ic litigation shall be handled through the new Civil Procedure and 
new Criminal Procedure Codes, which had been  enacted on 17 June 1998 and 1 July 1998 
respectively, and had entered into force on 1 January and  12 January 1999 respectively .  Thus 
Armenia established judicial review by the courts of general competence of administrative decisions 
taken in the area of intellectual property rights prot ection and customs issues.  By 1 October 1999, the 
Courts of First Instance will be authorized to revi ew administrative decisions in all areas covered by 
WTO provisions, including rulings in antidumping, safeguard and countervailin g duty investigations.  
 26. The representative of Armenia added that  as a result of the changes in the structure of the 
Government in mid 1997, the Ministry of Industry and Trade  undertook the primary responsibility in 
most aspects of policy affecting international trad e in goods and services. The Ministry of Finance 
and Economy  was responsible for fiscal policy, but d ecisions on tariffs were made together with the 
Ministry of Industry and Trade.    The Central Bank was responsible for monetary policy, exchange 
rate policy and the banking system. Within the structure of the Ministry of Industry and Trade the 
Armenian Patent Office was res ponsible for industrial property prot ection matters, and the Armenian 
National Copyright Agency was responsible for copyright protection.  27. The representative of Armenia said that in matters of policy affecting trade in goods and 
services, the Central Government retained full authority.  Local administrative bodies have no 
jurisdiction or authority to establish regulations  or taxes on goods and services in Armenia 
independent of the central authorities.   Within the framework of the process of Armenia's accession to 
the WTO, the obligations assumed by the Government  of the Republic of Armenia were subject to 
implementation throughout the Republic of Ar menia.  The Working Party took note of these 
commitments.  
  WT/ACC/SPEC/ARM/1/Rev.4 
 Page 17 
 
 
 28. The representative of Armenia informed the Working Party that after the signing of the WTO 
Accession Protocol by the Government  of Armenia, all WTO Agreements will be submitted for review 
to the Constitutional Court of Armenia.  Lega l conclusion of Armenia's WTO Accession will be 
accomplished upon ratification of all WTO agreements by the National Assembly.  The representative 
of Armenia further confirmed that after upon  the legal conclusion of Armenia’s WTO Accession and 
entering into force of all WTO Agreements  in Armenia they would be immediately  enacted within the 
Republic of Armenia.  All  and the laws and legislative instruments necessary for the application of the 
provisions would be adopted as provided in the Prot ocol of Accession and will be in place prior to 
that time . The Working Party took note of these commitments. 
 
IV. Policies Affecting Trade in Goods 
- Market Access Negotiations 
 
29. Armenia undertook negotiations on market acc ess in goods with interested members of the 
Working Party.  The Schedule of Concessions and Commitments resulting from those negotiations is in 
Annex I to the Appendix of the Draft Protocol of Access ion of Armenia. 
 
- Registration requirements 
 
30. The representative of Armenia informed the Working Party that with certain exceptions 
necessary to safeguard human, animal and plant he alth and the environment, the former State monopoly 
in foreign trade in Armenia was abolished in 1989, and was replaced by a regi stration requirement for 
the conduct of such activity. Ente rprises or private entr epreneurs engaging in trading (including 
importation) were required to be registered in the State Register of Enterprises. By a Decree of the 
President of the Republic of Armenia of 4 Janu ary 1992 entitled On Foreign Economic Activity, all 
enterprises or branches, subsidiaries and representati ons thereof registered and operating in the territory 
of Armenia, regardless of their fo rm of ownership, were granted th e right to conduct foreign economic 
activity without any additional registration requireme nts. The State registra tion of enterprises and 
private entrepreneurs in the Republic of Armenia, as  well as the procedure and conditions for the use of 
information provided through the registration proce ss were defined in the La w on State Register of 
Enterprises of 2 September 1993. The founder(s) of an enterprise or authorized  persons thereof, in 
accordance to  Article 12 of the Law on State Register of Enterprises, should  submit the following 
documents to the regional department of the State Re gister: application;  statutory documents;  license 
on activity if necessary;  the resolution on the regist ration of the firm's name by the Patent Office of 
Armenia, as well as the document affirming the payment of the State fee.  Upon the verification of WT/ACC/SPEC/ARM/1/Rev.4 
Page 18  
 
 submitted documents the information required by  Article 11 of the same la w was entered on a State 
registration card and forwarded to  the central body of the State Re gister for the purpose of uniform 
codification, granting of State regist er number and issuing a certificate of State registration.  The State 
registration was verified by the State Registration Certificate given by the State Register.  Any changes and amendments in statutory documents, or  changes in any data entries verified by State 
registration, were also subject to State registra tion. For the purpose of intermediate, the following 
documents should be submitted to th e regional department of the State Register:  application;  
resolution of the governing body of enterprises on making changes and amendments in statutory documents;  document containing these changes and amendments, as well as the document affirming the payment of the State fee.    Any entrepreneur al activities without State registration were prohibited 
in the Republic of Armenia.  Natural persons were permitted to import limited quantities of items into 
Armenia for personal use wit hout registration, although for a sale ther eof they must be registered as sole 
entrepreneurs.  Individual  entrepreneurs could conduct business operations following registration in 
accordance with Article 4 of the Law on State Register of Enterprises.    Foreign enterprises are entitled to carry out entrepreneural activities in the Republic  of Armenia through their branches, affiliates and 
subsidiaries, registered in the State register of Enterprises of Armenia, as well as through joint 
ventures.  No registration was required in Armenia fo r any enterprise operating from outside the 
national territory as an exporter to Armenia.  
31. The representative of Armeni a confirmed that the former St ate monopoly in foreign trade in 
Armenia had been abolished and that no restrictions on the right of fo reign and domestic individuals and 
enterprises to import and export goods and services within Armenia’s customs territory existed, except 
as provided for in WTO Agreements; that individuals and firms were not restricted in their ability to 
import or export based on their registered scope of business; and that the  criteria for registration of 
companies in Armenia were genera lly applicable and published offici ally and generally available to 
traders for their review. The Working Party took note of these commitments. 
 
- Customs tariff  32. The representative of Armenia stated that the Law on Customs Tariffs, approved by Parliament in August 1993, provided legislative authority for setting tariffs and dealing with customs matters.  
Decree No. 615 issued by the Government in Dece mber 1993 introduced new customs duties, and these 
were further modified by Decree No. 224 issued in May 1994 and by Decree No. 39 issued in January 
1995. According to the new Constitution of the Republic  of Armenia, adopted in 1995, the alterations to 
the Tariff were required to be  approved by the National Asse mbly upon presentation of the  WT/ACC/SPEC/ARM/1/Rev.4 
 Page 19 
 
 
 Parliamentary Permanent Financial Credit, B udgetary and Economic Commission. The Law on 
Customs Tariffs Rates, adopted by the National Asse mbly in April 1997, introduced the new list of 
customs duties, which were now in operation. The latest rectification of the Law on Customs Tariffs was 
accomplished by the adoption of the Law on Amendments to the Law on Customs Tariffs in September 1997.  The Draft
 In December 1998, the Law on Customs Duties h ad been submitted for 
approval  was adopted by the National Assembly.  The Draft  Law on Customs Duties covered the 
following sections:  customs duties and types thereof;  customs valuation; and  customs tariffs rates.  
Thus an integration of several existing  laws and legislative acts  had been made, including  the Law on 
Customs Tariffs of the Republic of Armenia and th e Law on Customs Tariffs Rates of the Republic of 
Armenia had been made . The Draft  Law was in full compliance with the relevant WTO provisions.  
Armenia had been using the Harmonized System of Commodity Classification since 1991. 
 
33. The representative of Armenia said that customs tariffs were expressed in ad valorem terms and levied on c.i.f. values.  At pres ent, 195 items were specified in Arme nia’s tariff schedu le, reflecting the 
fact that majority of product categories identified  at the two-digit level of the Harmonized System 
carried the same rate of duty. In response to questions from Working Part y members concerning the 
possibility of disaggregating the tariff to the four or  greater digit level, the representative of Armenia. 
stated that as a result of ongoing disaggregation the former number of 132 items had been increased up 
to the present number of 195. The representative of Armenia further added that if it proved necessary the 
Government of Armenia would cont inue disaggregating its tariff sche dule from its present level. After 
adoption of the new Law on Customs Tariffs Rates th e previous system of five tariff rates was 
terminated and only two tariff rates remained - zero and 10 per cent.  More than fifty per cent of the 
items in the tariff schedule were subject to duty rate  of zero (98 items) with  remaining 97 items subject 
to 10 per cent duty rate.    Taking into account th e volume of imported goods belonging to each of those 
groups, the weighted average tariff was about 4 per cent. Tariff revenue was pr ojected to account for 
about  9.79 per cent of the Government's total tax co llections and about  8.19 per cent of the total budget 
revenue in 1998.  Estimated figures for 1999 were  10.05 per cent and 8.63 per cent, respectively. 
 
34. The representative of Armenia stated that the rates of customs duty would not be increased 
beyond levels bound in Armeni a’s WTO Schedule of Concessions, whic h is annexed to the Protocol of 
Accession of Armenia.  The Working Party took note of this commitment. 
 WT/ACC/SPEC/ARM/1/Rev.4 
Page 20  
 
 - Other duties and char ges levied on imports 
 35. The representative of Armenia informed the Working Party
  confirmed that there were no other 
duties and charges levied on imports except the fe es for services rendered by Customs agencies 
described in paragraphs 39-41 below.   Any such ch arges applied to imports af ter accession would be in 
conformity with WTO provisions.  [The representative of Armenia stated that Armenia would bind all 
duties and charges, other than ordinary customs duties,  at zero in Armenia's Market Accession WTO  
Schedule under Article II of the GATT 1994 of Concessions ,  annexed to the Protocol of Accession of 
Armenia.]  The Working Party took note of this commitment.  
 
- Tariff rate quotas  36. The representative of Armenia stated that Ar menia did not apply [any import quotas, including] 
tariff rate quotas.  The represen tative of Armenia confirmed that his Government had no plans to 
introduce tariff rate quotas. 
 - Tariff exemptions 
 
37. The representative of Armenia stated that all tariff exemptions other than those granted in the 
context of free trade area agreements were granted on a MFN basis. Such exemptions were granted in 
respect of the following:  - essential equipment imported by  foreign enterprises and joint ve ntures (with at least 30 per cent 
foreign ownership) and designated for a suppl ement of enterprises’ statutory funds;  
- goods in transit thr ough Armenian territory; 
- trucks and vehicles, regularly operating as fr eight and passenger carrie rs through the Armenian 
territory, as well as fuel, food, tools and othe r minor items necessary for temporary use to 
perform these operations; 
- foreign exchange, bonds and other securities; 
- humanitarian supplies; 
- specific goods temporarily impor ted to the Armenian territory and further exported without 
being processed, such as fair and exposition exhibits, commodity patterns and package, 
professional equipment of temporary visitors, advertising materials, live animals, etc.; 
- prosthetic and orthopaedic equi pment and spare parts thereof; 
- goods imported to duty-free s hops or to bonded warehouses for subsequent exportation from the 
Armenian customs territory;  WT/ACC/SPEC/ARM/1/Rev.4 
 Page 21 
 
 
 - goods and articles, imported at expense of cred its, received by the Republic of Armenia; 
- any other instances foreseen in international agreements, including free trade agreements; 
 
- Customs fees and charges for services rendered 
 
38. Some members of the Working Party stated the ad valorem  customs fee levied by Armenia on 
imports was inconsistent with the provisions of the WTO, in particul ar, Article VIII of  the GATT 1994.  
They also noted that a transition period to bring the fee into conformity with  Article VIII was not 
appropriate.  Armenia shoul d conform with the requirements of  Article VIII from the date of its 
accession, and from that time the proceeds of the fee should only be used for the operation of customs 
clearance facilities and total annual revenues fro m the fee should not exceed the cost of customs 
clearance of the imported goods.  Fo llowing accession, information on th e method of calculation of the 
fee and the cost of provision of customs clearanc e facilities should be provided to WTO Members upon 
request.  
39. In response to questions from Working Party Me mbers about Armenia's system of customs fees, 
the representative of Armeni a stated that a customs fee of 0.15 per cent was charged on imported goods.  
The 0.15 per cent tax was calculated on the c.i.f. value plus applicable customs duty.  No customs fee was charged on importation by the Armenian Government on clearing operations made on the basis of 
international agreements, on temporary imports, on imports of raw materi als for construction under 
bilateral inter-republican cont racts, on goods imported directly  through the State budget, and on 
humanitarian aid.  Imports subject to clearing arra ngements under inte r-republican contracts signed with 
countries of the Former Soviet Un ion (FSU) had previously been exem pted from the customs fee, but 
this exemption had been discontinued, and FSU c ountries were no longer exempted from the customs 
fee.  No other import charges or fees were le vied.  Under an amendment to Decree No. 615 of 
6 December 1993, which entered into force on 1 Ma y 1996, the customs user fee was increased from 
0.15 per cent to 0.3 per cent.  In 1995, approximately  US$1 million was collecte d as customs charges.  
This revenue was used for the development of the customs administration in Armenia.  Resolution 282 
concerning the endorsement of the Statute of the re serve fund of the Customs Department, outlined how 
the fees levied were disbursed (being one of the s ources of the formation of the reserve fund): 70 per 
cent of the moneys in the reserve fund were alloca ted for and spent on the creation and strengthening of 
the material and technical basis of the system, with the objective of improving and developing the 
customs domain; 25 per cent of the moneys in th e reserve fund were allocated for and spent on the 
payroll of the employees of the customs service, pr oviding them with material incentives and improving 
their social conditions; 5 per cent of the moneys in the reserve fund were allocated to the fund of the WT/ACC/SPEC/ARM/1/Rev.4 
Page 22  
 
 head of the Customs Department, which he/she uses for contingency expenses within his/her 
jurisdiction. The Government of the Republic of Armenia adopted the Law on the Implementation of the 
Amendments and the Supplements to the Law on Cu stoms Tariffs of 18 August 1993, which entered 
into force on 19 September 1997. Under this Law th e customs user fee was charged on declared goods 
of an amount equal to 0.3 per cent of the custom s value, but no more than dram 600,000 (about 
US$1,200). The customs fee was not charged on importa tions made under credits given to the Armenian 
Government, on humanitarian aid, as well as fo r benevolent purposes.  The Law on Customs Fee, 
adopted by the National Asssembly on 30 December 1998, had abandoned the ad valorem  principle for 
charging of customs fees.  The representative of Armeni a stated that from the date of its accession to the 
WTO the customs fee would be brought into conform ity with the provisions of Article VIII of the 
GATT 1994.  
 
40. Some members of the W orking Party questioned whether the 0.3 per cent fee was consistent 
with the requirements of Article VI II of the GATT 1994, in particular, whether the fee represented the 
cost of the services rendered. While agreeing that such payments are incompatible wit h  Article VIII of 
the WTO Agreement, the representative of Armenia said that the present customs fee was based on the 
necessity to improve the conditions of the customs servic e.  Armenia needed a certain period of time   to 
ensure the complete conformity of the customs fee with the WTO provisions.  
 
41. The representative of Armenia further informed that by 30 December 1998 Armenia confirmed 
that Armenia  on 31  December 1998  had revised its customs fee, currently  previously 0.3 percent ad 
valorem, with a maximum fee level of dram 600,000  (about US$1,200), replacing it with a uniform fee 
of dram 3,500 (about US$6.5) for customs processing  and specific weight-rel ated fee of dram 300 per 
ton (about US$0.55) for freight inspection.   , As of 10 January 1 999,  In this regard, Armenia would 
implement a  fee level that would ensure that the fee collected would approximate the cost of the 
customs services rendered in processing imports. The fee would  has also been  applied to exports and to 
import purchases by the Government of Armenia. Pr oceeds from application of the fee only would  be 
used to fund import and export processing activities and only  to process trade subject to the fee. Total 
annual revenues from the fee would not exceed the cost of the customs services provided. Following 
accession, information on the met hod of calculation of the fee and the cost of provision of customs 
processing would be provided to WTO Members upon request.  The Working Party took note of these 
commitments. 
  WT/ACC/SPEC/ARM/1/Rev.4 
 Page 23 
 
 
 - Application of internal taxes to imports 
 
42. The representative of Armenia informed the Wo rking Party that Armenia's tax system had been 
completely overhauled since 1992, as part of the Government's overall policy of economic 
transformation towards a market economy. On 14 April 1997 the National Assembly of the Republic of Armenia adopted the new Law on Taxes. Under this Law the taxes, applied in Armenia, were as 
follows: 
- value added tax; 
- excise tax; 
- profit tax; 
- income tax; 
- property tax;  
- land tax. 
 In particular, two indirect taxe s were imposed on imports and dome stic production in Armenia - the 
value added tax, which was charged on the turnover of goods and services, and the excise tax, which 
was charged on realization of certain goods. The direct taxes   were included in paragraphs 9-13 above, 
where the following taxes were described:  profit ta x and income tax, which were levied on the 
residents and non-residents;  property tax which was levied on the buildings and vehicles of natural 
and juridical persons owned as a private property or for commercial usage;  and land tax imposed on 
private landowners and users of land under State property.  
- Value Added Tax 
 
43. The representative of Armenia informed that after the Law on Value Added Tax entered into 
force on 1 July 1997, the destination principle of  VAT application was valid in relation to any 
country, which meant that Armenian exports to a ny destination were charge d at zero rate, and any 
imports to Armenia were charged at the rate of 20 per cent.  In this regard, Armenia ensured MFN 
treatment in the application of VAT to imports.  The VAT was uniformly charged  at the rate of 20 per 
cent on the turnover  sales of domestic and imported goods and services.  In th e full value of the taxable 
turnover of goo ds and services (including 20 per cent rate ) the amount of the value added tax was 
determined on 16.67 per cent  of the calculation rate.   The value added tax was not  calculated and levied 
by customs bodies on goods im ported to Armenia with above zero customs tariff rates, determined by 
the Law on Customs Tariff Rates. On goods imported to  Armenia with zero customs tariff rates, the 
value added tax was calculated and levied by the Ta x Inspectorate upon sale or  utilization of goods.  The WT/ACC/SPEC/ARM/1/Rev.4 
Page 24  
 
 items exempted from VAT, in particular, included: the urban electrical transport,  tuition for education in 
secondary schools, exercise books and music books for schoolchildren; realization of children's food; 
scientific research work; realiz ation of the veterinary drugs; r ealization of domestically produced 
agricultural products by the producer  activities re lated to provision of pensions; some financial 
operations and services, etc.  In addition, zero-rate tax was applie d to: the taxable turnover of goods 
exported outside of the customs territory of Arme nia; the goods  imported for official usage by 
diplomatic and consular representatio ns or by equated with them othe r international, intergovernmental 
(interstate) organizations, as well as goods and services acquired by these organiza tions on the territory 
of Armenia; transit of foreign pa y-loads through the territory of Ar menia; construction and relevant 
(designing, research, etc.) works  performed at the expense of the resources of Armenian Diaspora communities, foreign countries, foreign and international interg overnmental (int erstate) and non-
governmental (public) and religious organizations within the scope of  humanitarian aid and benevolent 
or other social programmes.  The full list of VAT exemptions was provided to the Working Party in the 
Law on Value Added Tax. 
 - Excise Tax 
 
44. In response to the questions concerning excise tax the representative of Armenia added, that according to the Law on Excise Tax,  excise tax wa s imposed on domestic and imported goods.    Excise 
tax on imported goods was collected  by the custom s authorities, and excise tax charged on local 
production was collected by the Tax In spectorate  According to  the Law on Excise Tax, excise tax  
imposed on natural persons and legal entities, as well as those enterprises without the status of legal 
entity, which were producing/realizing in the Republ ic of Armenia or importing into the Republic of 
Armenia the following goods: 
- caviar;  
- beer; 
- grape and other wine; 
- wine spirits, spirits and strong alcohol; 
- cigars, cigarillos and cigarettes with tobacco and substitutes thereof; 
- gasoline; 
- diesel fuel; 
- natural leather garments and accessories; 
- fur and furskin articles (excluding workers' and military semi-coats made of sheep furskin); 
- glass crystal; 
- china, jewellery;  and    WT/ACC/SPEC/ARM/1/Rev.4 
 Page 25 
 
 
 - bijouterie.  
For the goods produced in Armenia the subject of taxa tion was the turnover of the realization of the 
goods, based on the realization prices (without excise and value added ta xes) was the subject of taxation.    
In the Republic of Armenia the taxpayers produci ng/realizing taxable goods in Armenia were paying 
the tax charged on domestically produced goods during ten working days following the realization of goods  For goods imported into Armenia the subject of taxation was the customs value of the goods 
declared by the importer (applicant) of the goods (without value added taxes and customs tariffs).  In 
the Republic of Armenia  excise taxes charged on imported goods were levied by the customs bodies in ten days after importation.   45. The excise taxes were as follows: 
 
HS number Product description Ad valorem tax 
1604 30 100 Caviar 200 
2203 Beer 50 
2204 - 2206 Grape wine 50 
2207;  2208 Strong alcohol 125 
2402 Cigars, cigarillos and cigarettes with 
tobacco and substitutes thereof 
 100 
2710 00 270 Gasoline 35 
2710 00 290   
0 320   
0 00 340   
0 00 360   
0 00 690 Diesel fuel 10 
4203 Natural leather garments  25 
4301 -  4303 Fur and  articles of furskin:  of 
which:  
430310 300 workers’ and military semi-coats 
made of sheep furskin 25 
6911 
7013 31 Glass crystal and china 25 
7113 - 7117 Jewellery 15 
   
 
46. The representative of Armenia stated that th e Armenian Government recognized that it was a 
violation of the national treatment principle for excise  taxes on domestic products to be lower than on 
imports of the same or a like product.  Therefore,  on 1 January 1997 Armenia eq ualized excise taxes on 
domestic goods and imports of the same or like produ cts as part of the accession commitments (see the 
table in paragraph 45 above). 
 WT/ACC/SPEC/ARM/1/Rev.4 
Page 26  
 
 47. Some members of the Working Party noted that  the non-application of these taxes to imports 
from FSU States may be s een to give rise to discrimination against products from non-FSU countries.  
The representative of Armenia stated that Armenia had switched to the destination principle of taxation 
with respect to imports from all s ources.  Armenia was therefore attempting to persuade its CIS trading 
partners of the desirability of charging these taxes at destination and not origin.  
48. The representative of Armenia confirmed that, from the date of accession, Armenia would apply 
its domestic taxes, including value- added and excise taxes, in a non- discriminatory ma nner consistent 
with Articles I and III of the GA TT 1994. In this regard, in accordan ce with the new Laws on VAT and 
on Excise tax, these taxes were applied at an equa l rate on domestic and imported goods and Armenia 
applied the destination principle to value-added an d excise taxes with respect to imports from all 
sources. In addition, the method of application of  all indirect taxes appl ied to imports would be 
published and readily available to importers, expor ters, and domestic produ cers. The Working Party 
took note of these commitments. 
 - Non-tariff measures and import licensing 
 
49. The representative of Armenia stated th at pursuant to the Resolution No. 124, 
29 December 1995, which regulates non-ta riff measures in Armenia,  mo st imports were free of any 
prohibitions or quotas. The import restrictions were  imposed for health, secu rity, and environmental 
reasons. The items affected we re all kinds of weapons, militar y technique and the consumables 
necessary for its production, tec hnologies, equipment and locators of nuclear materials (including 
heating materials), special non - nucle ar materials and services related to it, ionizing ra diation sources, 
the importation of which was carried out through au thorization issued by the Government of the 
Republic of Armenia. 
 50. The representative of Armenia stated that according to the Resolution No. 124 the following 
imports are subject to licensing:  
 HS number 
Pharmaceutical products, medicines 13.02, 29.38, 29.41, 30.03, 30.04;  
 Phytoprotection chemicals 38.08 
 
Pharmaceutical products, which were imported into th e territory of the Republic of Armenia, were 
subject to mandatory certification in accordance wi th Resolution No. 15 (19 January 1998) of the 
Government.  For this purpose, the inspection of pharmaceutical products shoul d be accomplished in  WT/ACC/SPEC/ARM/1/Rev.4 
 Page 27 
 
 
 order to verify their conformity with standards, a dopted in the Republic of Armenia, and a conformity 
certificate should be issued. The following groups  of products were listed for certification: 
 
Pharmaceutical products  30.01-30.06 
Vitamins 29.36 
 
51. In response to questions concerning the impor tation of pharmaceutical products and medicines, 
the representative of Armenia stated that these have to  be authorized by the Ministry of Health of the 
Republic of Armenia (except for veterinary drugs and related pr oducts).  The importation  of 
phytoprotection chemicals and veteri nary drugs (HS 38.08) should be authorized by the Ministry of 
Agriculture, moreover the authorization for impor tation of phytoprotection chemicals should also be 
sanctioned by the Inspection of Plant Protection in th e Ministry of Agriculture .. The by-law on issuing 
authorization for importing and exportin g pharmaceuticals, stipulated that: 
- authorizations for importati on of pharmaceuticals were issu ed by the Pharmaceutical  
Department of the Ministry of Health of the Republic of Armenia (except for veterinary drugs and related products), and authorizations for im portation of phytoprotection 
chemicals and veterinary drugs  and related products were is sued by the Ministry of 
Agriculture  respectively; 
- the authorizations were  for single use only; 
- to issue an authorization the following documents and conditions were required: 
(a)  the licence for commercial activities involv ing pharmaceutical products in the Republic 
of Armenia (Resolutions 161/415 and 36). The Resolutions stipulated that the 
production and wholesale and retail trade in pharmaceutic al products and medical 
utensils were subject to State licensing in  the Republic of Armenia. Resolution 36 
stipulated that: - pharmaceutical and medi cal activities were subject to licensing in the Republic of 
Armenia; 
- licensing was carried out by the Ministry of Health; 
- licences were issued for a period of 5 years. 
 Licences for wholesale and retail trade in pharmaceutical products and medical utensils 
were issued by the State Licensing Commi ttee of the Ministry of Health. The 
procedures for issuing licences were a pproved by the Resolution 188. The same 
licensing (including importation of pharmaceut icals and chemicals) procedures applied 
to individuals who have received medical and pharmaceutical e ducation in foreign 
countries. And in the case of the existence of international agreements signed by the WT/ACC/SPEC/ARM/1/Rev.4 
Page 28  
 
 Republic of Armenia the procedures specified in the agreement applied 
(Resolution 188, 24 July 1996). Foreign specia lists invited to impl ement programmes of 
international and intergovernmental agr eements were not subject to licensing. 
(b) Imported or exported pharmaceutical produc ts and agricultural chemicals must be 
registered in the Republic of Armenia. The registration of pharm aceutical products and 
medical utensils was performed in the Repub lic of Armenia  in accordance with the 
recently passed Law "On Medicines" and in compliance with registration requirements, 
approved by the Pharmaceutical Department of  the Ministry of Health.  The authority to 
make changes and amendments in the list of registered phytoprotection chemicals 
allowed for importation was delegated to th e Inspection of Plant Protection in the 
Ministry of Agriculture, pending the esta blishment of the State Interdepartmental 
Committee for Registration of  Phytoprotective chemicals. 
(c) There must be conformity of the qua lity of imported or exported pharmaceutical 
products to the quality standards accepted in the Republic of Armenia. In this respect 
Resolutions 417 and 205 regulated the proc edures of importati on and exportation of 
products subject to obligatory certifica tion.  Resolution #15 of the Government 
stipulated the list of those products,  import ation and exportation of  which were subject 
to mandatory certification . 
(d) Imported and exported pharmaceuticals  s hould have at least one year of expiration 
period, except for the pharm aceuticals whose period of e xpiration was less than one 
year (the latter should have at least two-thirds  of the period of expiration at the time of 
importing). 
 52. The representative of Armenia further stated th at any person, firms and institutions wishing to 
apply for an import licence may do so provided they  are registered as a juridical person or a sole 
entrepreneur undertaking a business activity in Armenia,  subject to  possession of  appropriate license to 
perform pharmaceutical activities.  Registration as a juridical pers on or sole entrepreneur was an 
automatic procedure, subject to no restrictions, except of those activities which require a state licensing.   
The applications for licenses were required to be determined within fifteen days of receipt of an 
application.  In response to questions from some me mbers regarding whether licences could be issued 
more quickly, the representative of Armenia stated that since the fifteen day stipulation was a maximum period, in practice licenc es could be obtained within a shorter ti me period.  If goods arrived without a 
licence, they could only be cleared through custom s upon production of the necessary import licence. 
  WT/ACC/SPEC/ARM/1/Rev.4 
 Page 29 
 
 
 53. The representative of Armenia sa id that requests for authorizat ion could be refused and issued 
authorizations could be suspended if  (a  there wa s incorrect and/or insufficient information in the 
presented documents,  (b)  the period of validity of the pharmaceutical products was exceeded,  (c)   the 
actual quantity of product did not correspond   to the quantity stated in importat ion documents  (d)  the 
imported pharmaceuticals were not registered in Armenia  (e)  th e quality of imported pharmaceutical 
products did not correspond to quality standards acce pted in the Republic of  Armenia. Unjustified 
delays and refusal to issue authorization, as well  suspending and cancelling i ssued certificates, could 
give rise to judicial procedures within  30 days after the refusal or suspension. 
 
54. The representative of Armeni a added that to receive an au thorization for importation of 
pharmaceutical products the follo wing documents were required: an application form, a  
document/contract relating to the acquisition of th e pharmaceutical products, a licence to trade in 
pharmaceutical products in Armenia, a certificate of quality issu ed by the producer  The importation 
license and the conformity certificate were issued after the collection of a corresponding fee.  
 
55. The representative of Armenia further noted th at authorizations were issued for the period 
necessary to carry out the engagements, but no longe r than one year. The validity of an authorization 
could be extended upon the substantia ted request of an applicant. The body issuing the authorization 
could suspend its validity or cancel it. Li cences were not transf erable among importers. 
 
56. The representative of Armeni a confirmed that, from the date of accession, Armenia would 
eliminate and would not introduce, re-introduce or ap ply quantitative restrictio ns on imports or other 
non-tariff measures such as licensing, quotas, bans, permits, prior authorizati on requirements,  licensing 
requirements, and other rest rictions having equivalent effect that cannot be justified under the provisions 
of the WTO Agreement. He further confirmed that th e legal authority of the Government of Armenia to 
suspend imports and exports or to a pply licensing requirements that coul d be used to suspend, ban, or 
otherwise restrict the quantity of trade would be applied from the date  of accession in conformity with 
the requirements of the WTO, in particular Articles XI, XII, XVIII, XIX, XX, and XXI of the GATT 1994, and the Multilateral  Trade Agreements on Agriculture, Sa nitary and Phytosanitary Measures, 
Import Licensing Procedures, Safeguards and Technical Barriers to Trade.  In this regard he also stated 
that the same kind of requiremen ts contained in Resolution No. 124, 29 December 1995 relating to 
imports  would be equally applied to  imports and to the purchase or sa le of similar do mestic products.  
Any exemptions from those requirements would be equally applied to impor ts and the output of 
domestic firms. The Working Part y took note of these commitments. 
 WT/ACC/SPEC/ARM/1/Rev.4 
Page 30  
 
 - Minimum import prices 
 
57. The representative of Armenia noted that Ar menia did not maintain a system of minimum 
import prices.  
- Customs Valuation 
 58. Some members of the Working Party referred to the Agreement on Customs Valuation and to 
certain inconsistencies of the Customs Regulations of  Armenia in respect of customs valuation.  These 
Members requested more detailed explanations with regard to the implementation by Armenia of specific provisions of the Customs Valuation Agreement, in particular  Articles 7, 8, 10, 11 and 12 
thereof. 
 59. The representative of Armenia informed the Working Party that Armenia's system of customs valuation was based on the transaction value. The Ar menian regulations relating to customs valuation 
were contained in the Government Order attached  to Decree No. 615, 6 December 1993 and were 
entirely based on the provisions of the WTO Agreemen t on the Customs Valuation. At the same time the 
Armenian regulations for establishing the customs value were also reflected in the Law on Customs 
Tariffs of 18 August 1993. The latter  did not contradict the provisions of the WTO Agreement on the 
Customs Valuation.  The Regulation Order provided fo r the same six methods of valuation laid out in 
the Agreement on Implementation of  Article VII of the GATT 1994, and stipulated that the first method (transaction value) should genera lly be used.  Armenia was a member of the World Customs 
Organization.  He added that Decree No. 615 cont ained many detailed prov isions relating to the 
valuation of goods by the Customs.  In response to  questions from some members of the Working Party 
concerning Armenia's sales be tween related persons, the representative of Armenia stated that the fact 
that sales took place between relate d persons would not, of itself, prev ent use of the transaction value, 
unless it was determined that the declared invoice value did not represent the price actually paid or 
payable for goods.  Paragraph 8 of Decree No. 615 perm itted importers to seek a written explanation of 
any rejection by the customs authorit ies of a declared invoice  value as the price actually paid or payable 
in respect of an import transaction between relate d parties.  In response to  questions concerning the 
obligation contained in Article 1.2(b) of the Ag reement on Implementation of Article VII of the 
GATT 1994, the representative of Ar menia stated that Decree No. 615 did not contain a provision 
giving effect to Article 1.2(b) of  the Agreement on Implementation of Article VII of the GATT 1994.  In 
response to further questions he st ated that Decree No. 615 provided  that damaged goods were valued 
taking into account the effects of the damage, and duties were charged on the assessed value.  No duties  WT/ACC/SPEC/ARM/1/Rev.4 
 Page 31 
 
 
 were payable on lost goods.  In response to further que stions, the representative of Armenia stated that 
no provision had been made in Decree No. 615 for the reversal of the order of application of the 
valuation methods specified in Arti cles 5 and 6 of the WTO customs va luation agreement.  Paragraph 24 
of Decree No. 615 provided for the circumstances envisaged in Article 5.2 of the WTO customs 
valuation agreement.  There were no cases so far in which the provisions of Article 5.2 have been 
implemented.  Article 6.2 of the Agreement, dealin g with access to information possessed by residents 
of other countries in the context of determining co mputed values had not been implemented by Decree 
No. 615.  The representative of Armenia further added that in In accordance with Paragraph 3 of 
Article 12 of the Draft Law on Custom  Duties, adopted in December 1998, the sequence of 
implementation of the customs valu ation methods 4 and  5 can be ch anged upon the request of importer. 
 
60. The representative of Armenia said that in relation to Article 7 of the Customs Valuation 
Agreement, paragraphs 27 and 28 of Decree No. 615 pr ovided for the determination of customs values 
when none of the other five methods  available can be applied.  Pa ragraph 27 of Decree No. 615 required 
that the customs authorities make available relevant information when the value was determined by any 
method other than one of the five available.  In  relation to the prohibitions found in Article 7.2, 
paragraph 28 of Decree No. 615 stated that neither retail prices in the do mestic market, nor the prices of 
locally produced goods, nor export prices to third countr ies, nor any other price de termined at will or on 
an inexact basis, may be used for customs valuation purposes when  none of the five available valuation 
methods are applicable.  In response to concerns ra ised by some members of the Working Party that 
Decree No. 615 was insufficiently precise, the representative of Armenia stated that paragraph 28 of 
Decree No. 615 referring to th e determination of prices at will or on an inexact basis is intended to rule 
out the use of minimum customs values, arbitrary or fi ctitious values, or computed values not using the 
provisions of the Agreement.  The Government of Armenia recognized, however, that Decree No. 615 
lacks specificity in certain key areas, and was commit ted to remedying this situation.  In relation to 
further legislative approximation to Article 7 of the Customs Valuation Agreement, the representative of 
Armenia said that the Draft of  Law on Customs Duties submitted to  adopted by the National Assembly 
incorporated a separate Chapter on Customs Valuation.   Accordingly, Paragraph 6 of Article 12 of the 
Draft  Law stipulated the following:  
 
"In cases when  the customs value of goods imported to the Republic of Armenia cannot 
be determined in accordance with paragraphs 1-5 of the present Article, then the 
customs value should be determined by any other relevant method in accordance with 
provisions of the present Article, and on the basis of relevant info rmation available in 
the Republic of Armenia. No customs value shall be determined on the basis of : WT/ACC/SPEC/ARM/1/Rev.4 
Page 32  
 
 (a) the selling prices of domestically produced  products in the Republic of Armenia; 
(b) [any system which provides for the accept ance for customs purposes of the higher 
of two alternative values  
(c) selling price of goods on the domestic ma rket of the country of exportation; 
(d) the cost of production other than computa tion values determined for the identical 
or similar products, in accordance with the Paragraph  5 of the present Article; 
(e) prices of goods designated for importation to other countries; 
(f) minimal customs values; 
(g) arbitrary prices." 
 
The present list entirely conformed to the corresponding article of the Agreement. 
 
61. The representative of Armenia said that in relation to Article 8 of the Customs Valuation 
Agreement, paragraph 12 of Decree  No. 615 required that the transaction value applied for customs duty 
purposes should include all the additional costs referr ed to in Article 8.2 of the WTO Customs Valuation 
Agreement  The representative of Armenia added that in relation to Article 8 of the Customs Valuation Agreement, Paragraph 2 of Article 7 of the Draft
  Law on Custom Duties provided for the following:  
Customs value includes: 
(a) contract price of goods acquired in the country of exportation. 
(b) freight expenses, including loading, unloading,  handling and insurance, incurred during the 
shipment of goods to the customs border of the Republic of Armenia 
(c) commission and mediation (broker commissi on) expenses incurred in the country of 
exportation or in connection with the shipme nt of goods to the customs border of the 
Republic of Armenia 
(d) value of the following goods or services, rendered  to the supplier by the importer, directly 
or indirectly, in full or partially, in conne ction with the manufacturing of the imported 
goods: 
(e) materials, components and other part s incorporated in imported goods; 
(f) tools and other similar items used in  the production of the imported goods; 
(g) materials consumed in the pr oduction of the imported goods; 
(h) engineering, development, design work and artwork, undertaken outside the Republic of 
Armenia, and necessary for the production of the imported goods; 
(i) royalties and license fees that the importer must pay, directly or indirectly, for selling 
imported goods.  
In response to questions concerning the rate of exch ange applied by the Customs, the representative of 
Armenia stated that the exchange rate used was de rived from the daily foreign exchange auctions held  WT/ACC/SPEC/ARM/1/Rev.4 
 Page 33 
 
 
 by the Central Bank of Armenia.  The Central Bank announced exchange ra tes daily and these rates 
are published in the press, as required by Article  9.1 of the Customs Valuation Agreement.  
Confidentiality, was assured by paragraph 5 of Decr ee No. 615.  In response to questions concerning 
the mechanisms for protection of confidential inform ation, the representative of Armenia stated that 
paragraph 5 of Decree No. 615 provided that confiden tial information shall only be used for customs 
purposes and not divulged to third parties except by prior consent.  This met the obligation contained 
in Article 10 of the Customs Valuation Agreement. 
 62. In response to requests for a detailed description of the  process for review of customs valuation 
decisions, the representative of Armenia said that in relation to Article 11 of the Customs Valuation Agreement, paragraph 9 of Decree  No. 615 provided for administrative appeal of a customs decision 
to a higher customs authority.  Legal persons (firm s or sole entrepreneurs) could make judicial 
appeals to a special arbitration authority in cases involving valuation decisions.  That arbitration was 
binding. The special arbitration authority was the same as the national courts.    The representative of 
Armenia added that the Paragraphs 2 and 3 of the Article 13 of the Draft
 Law on Customs Duties 
provided provisions for appeal procedures con cerning the decisions and actions of Customs 
authorities.  63. The representative of Armenia said that as required by Article 12 of the Customs Valuation 
Agreement, relevant national laws, regulations, decisi ons and rulings were published in the Bulletin of 
Decrees of the Government of Armenia or in the Manual of the Supreme Council of the Republic of 
Armenia.  In relation to the obligation contained in  Article 13 (last sentence) of the Customs Valuation 
Agreement, when the customs value of goods can not be immediately dete rmined, importers were 
entitled to remove their goods from customs cont rol upon payment of provisional duties based on the 
assessment of the customs authorities .  The importer then had three mo nths in which to challenge the 
assessment.  Alternatively, an importer could provisionally clear goods  against a bank guarantee valid 
for one month.  If a valuation i ssue was not settled within one mont h, a further two-month period was 
provided for an importer to challe nge an assessment, against provis ional payment of the assessment 
made by the customs authorities.  The duty assessm ent, whether adjusted or not from the original 
assessment of the customs authorities, became final af ter the three-month period .  Paragraph 8 of Decree 
No. 615 provides that an importer is entitled, within se ven days of a written request, to receive a written 
explanation of a valuation decision of the customs authorities.  The interpretative notes of the WTO 
Agreement on Customs Valuation had not been sy stematically included in Decree No. 615. The 
representative of Armenia added th at in relation to Article 13 of Customs Valuation Agreement, 
Paragraph 11 of Article 12 of the Draft
 Law on Custom Duties provided for the following: WT/ACC/SPEC/ARM/1/Rev.4 
Page 34  
 
  
In case when the customs bodies deemed  necessary a verification or further 
scrutiny of the customs value, declared  by the applicant in the corresponding 
declaration, importers were entitled to remove their goods from customs control 
against a bank guarantee valid for one mont h, in an amount equal to the disputed 
value, on condition of subsequent clearance in accordance with the final decision. 
 
64. Following questions and comments from Workin
g Party members reflecti ng concerns about the 
need for improvements to Decree No. 615, the representative of Armenia stated that Decree No. 615 
would be revised prior to  accession to address the concerns e xpressed by Working Party members and 
that The representative of Armenia stated that all the provisions of the WTO Agreement on the 
Implementation of Article VII of  GATT 1994 would be adopted as an  integral part of Armenia’s 
national law  Customs Code upon Armenia’s accession to the WTO . All relevant laws, and particularly, 
the Customs Code of Armenia,  would be in full conformity with the  requirements of the Agreement on 
Implementation of Article VII of the GATT 1994 at the time of accession  before 1 October 1999 . In 
particular, the interpretative notes of the Agreemen t would be fully incorporated in Armenia’s customs 
valuation laws, and the Decision of 24 September 1984 on the Valuation of Carrier Media Bearing 
Software for Data Processing Equipment" would be a dopted to ensure that valuation of software was 
based on the value of the media.   The Wo rking Party took note of these commitments. 
 
- Other customs formalities  - Rules of origin 
 
65. The representative of Armenia stated that the rules of origin applied by Armenia followed the 
principles stated in the Agreement on Rules of Orig in. Origin rules were defined in terms of wholly 
originating products,  a change in the tariff classification of the good, processing criteria, and the value-
added criterion.  The choice of approach for de termining origin depended on the product concerned and 
any relevant international agreement in respect of whic h origin rules were being applied.  However, with 
the exception of wholly originating products, the change in tariff heading criterion (at 4-digit level in the 
HS classification) was used unless an alternative was stipulated. According to the procedure of determination of the country of origin attached to the Resolution of the Govern ment 615, the country of 
origin was considered to be the country where the entire product has been manufactured or where it had 
undergone sufficient processing. The following goods we re considered to be entirely produced in a 
country: 
- minerals mined in the territory of a c ountry or inside its territorial waters;  WT/ACC/SPEC/ARM/1/Rev.4 
 Page 35 
 
 
 - plant produce grown or harvested in the territory of a country; 
- animals born or bred in the territory of a country; 
- products received from the animals born or  bred in the territory of a country; 
- product of hunting, fishing or sea opera tions in the territory of a country; 
- product of the high seas operati ons, that is produced in the hi gh seas by vessels belonging to 
the country or leased by it; 
- secondary raw materials or the waste resu lting from the production and other activities 
carried out in the territory of a country; 
- product of high technologies received in th e open space on spaceships belonging to the 
country or leased by it; 
- goods produced in the country in question, that have been exclusively produced in 
accordance with the points above. 
In case when two or more  countries have participated in the pr oduction of a product, the origin of the 
goods is determined based on the criter ia of sufficient processing. The fo llowing were the criteria for the 
sufficient processing of goods: 
- any alteration in the first four digits in the position of the classification of a product (the 
product description code) that has occurre d as a result of processing the product; 
- implementation of production or technological operations that were either sufficient or 
insufficient to consider the product as origin ating from the country where such operations 
have taken place; 
- ad valorem rule - the alteration in the value of  the product, when the proportion of the added 
value or the value of the materials used exceeded a certain measure of the price of the product 
Moreover, the following were considered as not mee ting the requirement of the criteria on sufficient 
processing: 
- operations geared towards the preservati on of the product during its storage or 
transportation; 
- operations of preparation of the goods for sale or transportation (taking apart, consolidation, 
sorting, repackaging of the products); 
- simple assembly operations; 
- merging, smelting of the parts (components) of products without lending them such features 
as would essentially differ from the initial components. 
The customs authorities were entitled  to require origin ce rtificates in respect of: (i) goods subject to 
quantitative limitation; the change in tariff;  (ii) im ports under preferential trading arrangements;  (iii) 
for the protection of the environment, public health  and safety and national security; and (iv) in WT/ACC/SPEC/ARM/1/Rev.4 
Page 36  
 
 situations where the authorities cons ider that inadequate information as  to origin has been supplied.  
Certificates of origin must be si gned by suppliers and verified by the relevant national certifying body. 
The evaluation with respect to the origin of imported goods was carried out by the ArmExpertise 
subsidiary of the Chamber of Commer ce of Armenia. In case of doubt as to the origin of goods imported 
into the Republic of Armenia the Customs referred to th e ArmExpertise, which examined the product, 
the waybills and the certificates of origin of the product and passes a decision on the origin of the 
product. At the same time, according to Point 2 of the directive No. 478MV of 26 April 1996 of the head 
of the Customs Directorate of the Republic of Armenia, in case of absence of the above mentioned certificate, the certificates issued SARM or by the ArmExpertise subsidiary of the Chamber of Commerce of Armeni a were accepted as documents confirming th e origin of the product. In accordance 
with the legislation of the Republic of Armenia curre ntly in effect, importers had the right to appeal 
controversial issues to a superior customs authority . The administrative and j udicial obligations with 
respect to this procedur e applied to all entities. 
 66. The representative of Armenia  added that at present the Draft Law "On Rules of Origin" of the 
Republic  Draft Customs Code of Armenia which  was being  elaborated, which incorporated relevant 
provisions on Rules of origin.  The Customs Code was drafted would be  in full conformity with relevant 
WTO provisions.  In particular th e precise definitions for goods fully  originated from the country’s 
natural recourses, tariff classifica tion changes, added value principle,  and sufficient recycling principle 
were given. Rules of origin, which were presented in the Draft Decree  of the Governme nt of Armenia, 
did not pursue, directly or indirectly, any trade objec tives, were described in positive standards and did 
not create obstacles for free trade, in accordance w ith WTO provisions.  The representative of Armenia 
added that the Government of Armenia would bring all its laws and regulatio ns, and particularly the 
Customs Code, into full conformity with the requirements of  the Agreement on Rules of Origin before 1 
October 1999 and would act in full conformity with the pr ovisions of that Agreement from the date of 
its accession to WTO. The Working Pa rty took note of this commitment.  
 
 - Pre-shipment inspection 
 67. In response to questions, the re presentative of Armenia stated that Armenia did not at present 
employ the services of any pre-shipment inspection companies.  However, th e Government of Armenia 
had recently announced an international tender to s ubmit competitive bids fo r selecting a company in 
charge of implementing pre-shipment in spection to imports from all directions.  
  WT/ACC/SPEC/ARM/1/Rev.4 
 Page 37 
 
 
 68. The representative of Armenia stated that if any pre-shipment inspection system was 
introduced in the future it would be applied in conf ormity with the requirements of the Agreement on 
Pre-shipment Inspection. The Working Party took note of this commitment. 
 
- Anti-dumping, countervailin g and safeguards regimes 
 
69. In response to questions, the representative of Armenia stated that Armenia did not, at 
present, have an anti-dumping, co untervailing or safeguards regime . The representative of Armenia 
confirmed that, from the date of accession, Ar menia would not apply measures for safeguard, 
anti-dumping or countervailing duty purposes if conf orming legislation to apply such measures 
consistent with the provisions of the WTO Agre ement on Safeguards, Anti- dumping, and Subsidies 
and Countervailing Measures was not in effect in Armenia. The Working Party took note of this 
commitment. 
 
- Export regulations 
 - Export restrictions and export licensing system 
 
70. The representative of Armenia stated th at the Resolution No. 124, 29 December 1995 on Non-
Tariff Regulation of the Commodities  (Operations, Services) Import a nd Export in the Republic of 
Armenia regulated Arme nia’s export licensing regime. Export licenc es were required fo r textiles (to the 
European Communities only), for medicines, and fo r certain live animals and plants. The export licences 
on textiles were required pursuant to an agreement with the European Communities, but no restrictions 
on these exports were currently in place. The licenc es for medicines, live  anions and planets were 
generally not restrictive - rather, they were d esigned to ensure public health and safety. The 
exportation and importation of wea pons, military technique and the consumables necessary for its 
production, technologies equipment and locators of nuc lear materials (including heating materials), 
special non-nuclear materials and services related to  it, ionizing radiation sources were carried out 
through authorization issued by the Government of the Republic of Armenia. All other products may 
be freely exported from Armenia.  Th e system applied to exports to all destinations, except in the case of 
the licensing requirement for exports  of textiles and clothing to the  European Union.  The licensing 
requirements were not intende d to restrict the quantity or value of exports.  Rather, they were intended 
to protect the national interest and human, animal or plant life or health, and the environment.  The 
representative of Armenia stated that the Government did not consider that at this time, a better way 
existed of achieving these objectives.  
 WT/ACC/SPEC/ARM/1/Rev.4 
Page 38  
 
 71. The representative of Armenia noted that Armeni a’s export licensing syst em closely paralleled 
the import licensing system. As on the import side, exportation of pharmaceuticals and rare animals 
and plants were subject to non-restrictive licensing,  designed to protect health and the environment. 
Export licensing procedures for pharmaceutical products were the same as import licensing 
procedures, and were regulated by the same Resolu tions. In addition, exports of textiles and clothing 
to the European Communities were subject to licen sing under a bilateral agreement with the European 
Communities, and licences are also required for exports of rare objects or artifacts considered part of 
the national patrimony. The licensing of textile and clothing exports to the European Communities allowed these items to be monitored, but they are not currently subject to re strictions of any kind. 
 72. The representative of Armeni a said that Ar menia maintained export licensing requirements on 
the following items: 
 
 HS number 
Pharmaceutical products 05.10;  12.11; 13.02; 29.38; 29.41;  
Raw materials for pharmace utical production 30.00 
Textiles and clothing to European Union  
Objects considered part of the national patrimony  
Rare wild animals and plants included in the Red 
Book of the Republic of Armenia  
 
The Red Book of the Republic of Armenia identifies  approximately one hundred rare animals and birds, 
and 390 rare plants in respect of which licence s would be required and whose exportation may be 
controlled. 
 73. The representative of Armenia stated that according to the Resolution No. 124, the exportation 
of pharmaceutical products and medicine  had to be au thorized by the Ministry of Health of the Republic 
of Armenia. The  exportation  of rare wild animals and plants includ ed in the Red Book of the Republic 
of Armenia was carried out through au thorization issued by the Minist ry of Nature and Environment. 
Exports of objects considered of inte rest to the national patrimony must be authorized by the Ministry of 
Culture. In the case of textile and clothing exports to the European Communities European Communities, the Ministry of Industry and Trade  would have exclusive responsibility for issuing 
export licences.  Requests for au thorization could be re fused and issued authorizations could be 
suspended if (a) there was incorrect information in th e presented documents, (b) the period of validity of 
the pharmaceutical products was exceeded, (c ) the production serial numbers of imported 
pharmaceuticals did not correspond with the submitted quality ce rtificates, (d) the imported 
pharmaceuticals were not re gistered in Armeni a. The Ministry of Industry and Trade may deny an  WT/ACC/SPEC/ARM/1/Rev.4 
 Page 39 
 
 
 export licence to an applicant in respect of exports to the European Communities if exports of the items 
concerned were to exceed a certain quantitative limitati on. Since this has not occurred so far, Armenia 
has not developed any mechanisms for administering export quotas. 
 74. The representative of Armenia said that any pe rsons, firms and instituti ons wishing to apply for 
an export licence may do so provided they are registered as a juridical person or a sole entrepreneur 
undertaking a business activity in Ar menia. As in the case of th e importation of pharmaceutical 
products, to receive an authorization for expor tation of pharmaceutical products the following 
documents  were required: an application form , a certificate relating to the acquisition of the 
pharmaceutical products, a licence to trade in pharmaceutical products in Armenia, documents relating to the acquisition and sale of pharmaceu tical products (contract, invoice, etc.), and a 
certificate of quality issued by the producer. Authoriza tions are issued within 15 days from the date of 
the application. Since the fifteen-day stipulation is a maximum period, in practice licences may be 
obtained within a shorter period. An export licen ce will generally not be granted immediately upon 
request, but in practice the necessary procedures may be completed within a day or two. The fee for 
an export licence is equal to the month’s minimum salary in the republic of Armenia. Licences are not 
transferable among exporters.  A lice nce application and/or an export ation could be made at any time 
during the year. Authorizations are issued for the pe riod necessary to carry out the engagements, but no 
longer than one year. The validity of an authorizati on can be extended upon the substantiated request of 
an applicant.  The body issuing the authorization can suspend its validity  or cancel it. Unjustified delays 
and refusal to issue authorization, as well suspendi ng and cancelling  certific ates, can give rise to 
judicial procedures.  75. The representative of Armenia stated that any export licensing requirements or other export 
restrictions would applied be in  conformity with WTO requirements. The Working Party took note of 
this commitment. 
 
 - Other measures  76. The representative of Armenia noted that in orde r to prevent exports at artificially low prices, 
or the under-invoicing of exports, the Resolution 124 established a list of minimum prices each quarter for a list of selected commodities as a reference base for tax purposes. The reference prices 
were equally applied to all export destinations.  With effect from 29 December 1995, this list only 
covered ferrous and non-ferrous me tals, (HS 72.00, 72.04, 74.0-74.14.  75. 76.0-76.14, 78.80, 81.0, 
81.13).  According to Resolution 124 commodities of the mentioned list could be exported at prices less WT/ACC/SPEC/ARM/1/Rev.4 
Page 40  
 
 than the minimum established prices. However, the cor porate tax liabilities of firms that export ferrous 
and non-ferrous metals and sc rap were calculated on the basis of these reference prices if the declared 
export price is below the reference am ount. In this case the exporter was required also to present the 
certificate of conformity of the Agency of Standardization Measurem ent and Certification (SARM). The 
Customs Bodies of the Republic of Armenia must in form the Tax Inspectorate about the transaction 
within a month.  With effect from 21 April 1999, the list of minimum referenc e prices was eliminated.
 
 
 - Export subsidies 
 
77. The representative of Armenia st ated that Armenia did not offer any export incentives or export 
subsidies of any kind at the present time, nor di d Armenia have any duty drawback or temporary 
admission arrangements in respect of dutiable imports used in export production.  The Government 
believed that export expansion wa s vital to Armenia’s future econo mic viability.  For this reason, 
consideration was being given to various ways of st imulating exports, particularly through promotional 
activities.  The Government did not, however, intend to rely on export subsidies as part of an export 
expansion programme. 
 78. The representative of Armenia confirmed that the Government did not maintain subsidies which 
met the definition of a prohibited subsidy, within the meaning of Article 3 of the Agreement on 
Subsidies and Countervailing Measur es, and did not seek transitions to provide for the progressive 
elimination of such measures within a fixed pe riod of time. The Working Party took note of this 
commitment.  
- Internal policies affecting trade in goods   - Industrial policy, including subsidies 
 
79. The representative of Armenia stated that Armenia’ s industrial policy aimed to ensure more 
efficient use of domestic resources within a mark et-oriented framework.  A central policy objective 
affecting industry was privatization.  Approximate ly 30 per cent of all en terprises in Armenia are 
publicly owned, while 70 per cent are non-public. He  stated that the Government estimated that 
approximately 95 per cent of industr ial output  emanated from the public  sector.  The representative of 
Armenia added that as a result of ongoing privatiz ation, as well as due to registration of newly 
established private enterprises, the share of publicly owned enterprises in Armeni a gradually declined to 
8 per cent of the total by the end of 1997, and to further 7 per cent by  the end of 1998.  Correspondingly, 
the public sector accounted for 57 per cent of indu strial output by the end of 1997, which declined  WT/ACC/SPEC/ARM/1/Rev.4 
 Page 41 
 
 
 further to 52 per cent of industrial output in the end of 1998.  In response to questions the representative 
of Armenia stated that pending completion of the privatization programme, the Government required 
State-owned enterprises to operate according to ma rket principles.  Enterp rises in Armenia were 
required to acquire their inputs on the open market.  Most firms had not yet put proper market-economy 
accounting systems into use, but they were developi ng them.  In response to requests for information 
concerning the payment of direct subsidies, the representative of Armenia stated that since the beginning 
of 1995, almost no direct subsidies had been granted to  industry.  In previous years direct subsidies had 
been provided on a fairly large scale via concessionary credits to firms.  He further noted that the Government in general did not retain production su bsidies in the industrial sector, and no indirect 
subsidies were applie d on water and electricity supplies in the agricultural after 1996. 
 
80. The representative of Armenia said that the only beneficiaries of direct subsidies in 1995 were 
the firms engaged in the production of strategic (military) equipment,  for whom subsidies are to be 
granted for further construction and the equipping of plant.  The beneficiary firms do not export their 
products.  Any remaining indirect su bsidies that might arise as a resu lt of clearing arrangements were 
disappearing because of the contraction (and eventu al elimination) of in ter-government al clearing 
contracts.   The procurement via State orders, whic h could also entail indirect subsidies, was being 
replaced by competitive tendering procedures, howe ver, the Government maintained the freedom to 
grant certain privileges to domestic bidders.  In  1998 the Government recommenced the practice of 
write-offs of tax fine arrears in order to support the rehabilitation and restru cturing of a few selected 
large enterprises, such as Armenmotor Company and Yerevan Je wellery Plant.  For analogous purposes, 
tax fine arrears were written off for those enterpri ses which incurred indebtedness because of default 
against shipments being made wi thin the framework of inter-gove rnmental cleari ng contracts and 
procurements vi a State orders. 
 
81. The representative of Armeni a further added that because th e continuing reform of policies 
might indirectly confer subsidie s on industries, the Government al so maintained a substantially 
deregulated business environment which, when co mbined with the Government's open investment 
policies, meant that there were effectively no barriers to market contestability.  Firms were free to enter 
and exit sectors on the basis of their own market-based decisions.  Additional measur es designed to 
safeguard and strengthen this business environmen t were the establishmen t of anti-monopoly and 
bankruptcy laws. The  Law on the Bankruptcy of Bank s  and the  Law on the Bankruptcy  of Juridical 
Persons, of Enterprises Without the Status of a Juri dical Person, and of Entrep reneurs entered into force 
respectively on 1 October 1996 and on 1 March 1997. Th e relevant statutes were under preparation. 
 WT/ACC/SPEC/ARM/1/Rev.4 
Page 42  
 
 82. The representative of Armenia stated that the Government of Armenia would ensure that its 
subsidy regime was in full conformity with the Agreement on Subsidies and Countervailing Measures 
from the date of its accession to the WTO.  The Working Party took note of this commitment. 
 
- Technical Barriers to Trade/Sa nitary and Phytosanitary Measures 
 
83. The representative of Armenia noted that, afte r the declaration of inde pendence, Armenia took 
steps to establish and develop its national systems of standardization, metr ology and certification. 
Relevant laws regulating those systems are the Law on Standardization and Certification and the Law on 
Uniformity of Measurements accepted by the National Assembly on 30 April 1997. The two laws 
incorporated the core principles of the WTO TBT Agreement. The Law on Standardization and 
Certification provided the legal basis in the Republic  of Armenia for the standardization as well as 
certification of products, services, labour (processes) and quality system s. This would be mandatory for 
the bodies of State governan ce, as well as for enterprises, ins titutions and private entrepreneurs and 
would define the means for the protection of in terests of consumers a nd the State through the 
elaboration and application of nor mative documents on standardization.  It also defined the rights, 
obligations and responsibility of the participants in the certification process. The Law on Uniformity of 
Measurements defined the legal basis for ensuri ng the uniformity of meas urements, regulated the 
relations of the bodies of State gov ernance with enterprises, institu tions and private entrepreneurs on 
issues relating to the production and issuance of measurement instruments, and the use and repairs 
thereof. It was directed at protecting the rights and rightful interests of cons umers and the State from the 
negative impact of inaccurate results of measuremen ts. The Department for Standardization, Metrology 
and Certification (SARM) wa s denoted as coordinator of standardiz ation, metrological and certification 
activities in Armenia, and its right s and obligations were defined by the Law on Standardization and 
Certification and the Law on Unifor mity of Measurements. Being the national body in charge of the 
administration related to standardization, certific ation and metrology in Arme nia its responsibilities 
included the creation and administration of nationa l standardization and certification systems; the 
adoption of national standards and classifications; the application of  international standards; the 
publication of official information in the fields of  standardization and certif ication; accreditation of 
certification bodies and te sting laboratories; dealing with appeals and disputes on cert ification matters, 
etc. SARM was in the structure of the Ministry of I ndustry and Trade.  SARM was  presided over by the 
State Chief Inspector, whose rights and obligatio ns were contained in Article 27 of the Law on 
Standardization and Certification a nd Article 24 of the Law on Uniform ity of Measurements. SARM is a 
collegial body that takes decisions by majority vote. 
  WT/ACC/SPEC/ARM/1/Rev.4 
 Page 43 
 
 
 84. The representative of Armenia added that the National Standardization System was established 
with a mission to provide: 
- the safety of the products, labour (processes) and services for the natural environment, 
human life, health and property; 
- the technical and informative compatibility and interchangeability of products;  
- the  improvement in quality of the pr oducts, labour standards and services ; 
- uniformity of measurements; 
- preserving of all types of resources; 
- the security of economic objects, in the event of occurrence of technical and other disasters 
and emergencies; 
- the necessary conditions to ensure the defe nse of the country and the readiness for 
mobilization. 
The main provisions of that system  and its procedures for preparati on, adoption  and application of 
Armenian standards were establis hed by national basic standards of  AST 1 series. About 210 Armenian 
standards had been developed by the technical committees and adopt ed by SARM since 1993. The great 
part of the standards applied in Armenia were international and regi onal standards. More than 18,000 
interstate standards of CIS countries were included  in the national fund of standards. 860 international 
standards have been accepted in Armenia at present and 30 per cent of national standards would be 
aligned to international standards by 2000. For the pr eparation, adoption and ap plication of standards, 
SARM followed the TBT Code of Standards Good Prac tice and will sign it from the date of Armenia’s 
accession to WTO. SARM was cooperating with sta ndards organizations in ot her countries and is a 
member of the International Orga nization for Standardization from 1 January 1997. Presently SARM is 
member of ISO, EASC, which enables Armenia to  participate through technical committees in the 
elaboration of international and re gional standards and to apply thes e standards in Ar menia. The only 
enquiry point operating in Armenia and the only body responsible for notific ations was SARM, which 
would implement the obligations established in accordance with Articled 10 of the TBT Agreement. Besides the publication of a monthly journal (Hayas t), which provides current  information on issues 
relating to standards and certifications. SARM used the INTERNET communication system for 
notification. A new resolution of the Government was being prepared for the cl arification of rights and 
responsibilities of SARM as an e nquiry point, and those of the WTO Af fairs Department in the Ministry 
of Industry and Trade as a notification.  85. The representative of Armenia further adde d that the National Certification System was 
established according to the Law on Standardization and Certification taking into consideration the WT/ACC/SPEC/ARM/1/Rev.4 
Page 44  
 
 international experience in the field of certification,  particularly ISO/IEC Guides 7, 22, 23, 25, 27, 28, 
58, 60, 65  and European standards of EN 45000 series . The objectives of certif ication were as follows: 
- creation of conditions for activit ies of the economic entities in the internal market of the 
Republic of Armenia, as well as in the in ternational economic, scientific- technical 
cooperation and international trade; 
- support of consumers in right selection of products, labour, services  and in access of 
objective information about them; 
- control over the safety of produc ts, labour, services for the na tural environment, the human 
life, health and property; 
- conformation of the product, labour , services with the quality ch aracteristics cl aimed by the 
producer; 
- protection of consumers’ rights. 
The accreditation of certificati on bodies and testing laboratories in  Armenia were operated by SARM. 
The provisions on national certification system, th e criteria and procedures for accreditation and 
certification were es tablished by national standards of AST 5 series. About a dozen certification bodies 
and a hundred testing laboratories were accredited. The accredited ce rtification bodies  were operating 
product certification national program me that had its own certificate and mark of conformity, product 
certification procedure, register of certificates and procedure for dealing with appeals that were 
established by Armenian standards. The conformity assessment procedures applied in Armenia 
corresponded to international cr iteria and TBT Articles 5-9. 
 86. In response to questions concerning to mandato ry certification, the representative of Armenia 
stated that Armeni a applied manufacturer’s de claration supported by pos t-market surveillance 
procedures, as well as inte rnationally accepted pre-ma rket certification, which concerned to the products 
subject to mandatory certification. Both certif ication mechanisms were fixed in the Law on 
Standardization and Certification. Su ch less expensive and less trade re stricctive methods of conformity 
assessment, as manufacturer's declaration and conformity mark, are also being foreseen in the Draft Law 
on the "Conformity Assessment of Pr oducts and Services".  According to the Draft Law, domestic and 
foreign manufacturers and service providers will be granted similar rights in applying declarations on 
conformity of products or services.  Mandatory certification activities were coordinated by SARM and 
conducted by certification bodies an d testing laboratories accredited by it according to the Law on 
Standardization and Certification and regulated by Resolutions 417, 205, 136, which proceeded from the 
law and introduced the list of pr oducts subject to mandatory certific ation in the Republic of Armenia 
taking into consideration the necessity of the contro l over the safety of products , labour, services for the 
natural environment, the human life, health and property, as well as th e protection of consumers’ rights.  WT/ACC/SPEC/ARM/1/Rev.4 
 Page 45 
 
 
 Presently this is the full list of  products subject to  pre-market certification. These products we re selected 
taking into consideration the reports received from th e inspection bodies, the toxins received from the 
Ministry of Agriculture, Sanitary-Anti-epidemiological State Centre, from media, consumers and data 
from Statistics Department. The drafts of these Resolutions were submitted for discussion and 
comments to the relevant ministries, major enterprises and traders, other institutions that displayed  an 
interest in it. The following products were subject to mandatory certification according to Resolution 
No. 15, 16 January 1998:  
 
Description  CN code  
Meat and edible meat offal  0201-0204, 0206- 0210  
 
Fish and crustaceans, molluscs and other aquatic 
invertebrates  0302-0307  
 
Milk and cream  0401-0406  
Birds’ eggs  0407, 0408  
Natural honey  0409  
Edible vegetables and certain roots and tubers  0702-0704, 0706 10 000, 0707, 
0709-0712,  
0713 10 900  
Edible fruit and nuts; peel of citrus or melons  0801-0812, 0813 10 000-0813 40 
300 
Coffee, tea  0901, 0902  
Rice 1006  
Wheat and production of wheat and other cereals  1101-1104, 1108  
Animal or vegetable fats and oils and their cleavage 
products; prepared edible fats ; animal or vegetable waxes  1501, 1502, 1507 10 900,1509-
1512, 1515 19 900,1516, 1517  
Preparations of meat, of fish or of crustaceans, mollusks or 
other aquatic invertebrates  1601-1605  
Sugar and sugar confectionery, gums  1701-1704  
Cocoa and preparations containing cocoa  1801, 1804-1806  
Preparations of cereals, flour, starch or milk; pastry  
products  1901, 1902, 1905  
Preparations of vegetables, fruit, nuts or other parts of plants  2001-2009  
Miscellaneous edible preparations, yeast, ice-cream  2101-2105, 2106 90 100  
Beverages, spirits and vinegar  2201-2209  
Tobacco and manufactured tobacco substitutes  2401-2403  
Table salt  2501 00 910  
Oil products  2707, 2710, 2711  
Vitamins  2936  
Pharmaceutical products  3001-3006  
Fertilizers  3101-3105  
Perfumes, beauty or make-up preparations, preparations for 
use on the hair, dental pastes and powders  3303, 3304, 3305, 3306  
Soap, organic surface-active agents  3401, 3402  
Matches  3605  
Insecticides, hydraulic brake fluids, anti-freezing 
preparations and prepared de-icing fluids  3808, 3819, 3820  WT/ACC/SPEC/ARM/1/Rev.4 
Page 46  
 
 Articles of plastics
 3923, 3924  
Pneumatic tires of rubber of a kind used on motor cars and 
lorries  4011 (ex. 4011 30 100), 4013  
Babies dummies of rubber  4014 90 100  
Articles of apparel and clothing accessories, knitted or 
crocheted, including briefs and panties, babies’ sportswear,  
swimwear, stockings, socks, gloves  6107-6109, 6111, 6112, 6115, 
6116  
Boys’ or girls’ underpants, sportswear, ski suits, swimwear, 
other garments  6207, 6211  
Babies’ bed linen  6302  
Cooking or heating apparatus of a kind used for domestic 
purposes, non-electric  7417  
Table, kitchen or other household articles and parts thereof, 
of aluminum; sanitary ware and parts thereof, of aluminum  7615  
Spoons, forks, knives and similar kitchen or tableware  8215  
Electro-mechanical tools for working in the hand, with self-
contained electric motor; electro-mechanical domestic 
appliances, with self-contained electric motor; electric space 
heating apparatus; electric filament or discharge lamps  8508, 8509, 8516, 8536, 8539 (ex. 
8508 10, 8508 80, 8508 90. 8509 
90, 8516 80, 8516 90, 8536 10, 
8536 20, 8536 30, 8536 41, 8536 
90, 8539 10, 8539 40, 8539 90)  
Instruments and appliances used in medical, surgical, dental 
or veterinary sciences  9018  
Gas arms (for example, spring, air or gas guns and pistols, 
truncheons); gas revolvers  9304  
Electric chandeliers  9405 (ex. 9405 10, 9405 50, 9405 
60, 9405 91, 9405 92, 9405 99)  
Toys  9502, 9503  
Cigarette lighters, gas fuelled  9613  
 
 
Requirements for products covered by  mandatory certificatio n in Armenia were kept to a minimum.    
They were established in accordan ce with the technical regulations, adopted by SARM in coordination 
with the interested ministries and departments, according to Resolution No.15 of the Government.  
Compulsory were only the requirements concerning  to safety, health and the protection of the 
environment. Mandatory certification procedures app lied were the same for bo th imported and domestic 
products. Certificates were issued for product types or batches based on testing of samples, analysis of 
production system, quality system cert ification or declaration of supp lier depending on the scheme of 
certification.   These internationally accepted ce rtification schemes were fixed by AST 5.3.  The 
procedures of mandatory certific ation were established with refe rence to the AST 5.1 standards, 
application of which became mandatory, according to  the Resolution No. 15 of the Government.  Unlike 
to most of CIS countries, certific ation activities in Armenia due to  the Law on Standardization and 
Certification were regulated by the only authorized body - SARM, so  avoiding overlap of requirements 
set by different regulatory bodies. SARM had signed coopera tion agreements on mutual recognition of 
conformity assessment wi th appropriate bodies of several countries such as Russian Federation,  WT/ACC/SPEC/ARM/1/Rev.4 
 Page 47 
 
 
 Ukraine, Belarus, Georgia, Turkmenistan, Kazaks tan, Moldova, Kyrgyz Republic, Tadjikistan, 
Uzbekistan, Slovak Republic, China and Iran.  Th ese were Agreements on Mutual Recognition of 
Conformity Assessment Re sults.  SARM was carryin g out negotiations with a ppropriate bodies of other 
countries, particularly with Bulgaria,  India, Romani a and the United States, to  sign similar agreements 
on cooperation.  
87. The representative of Armenia added that SARM  cooperated with the Ministries of Health and 
Agriculture in matters relating to sanitary and phyto sanitary measures. Having the objective to protect 
human health, safety and environment, the Govern ment of Armenia had introduced the list of goods, 
some of which fall in the scope of SPS Agreement, subject to mandatory certification (Resolution   15 of 16 June 1998) which was evidence for the fact that Armenia had started the process of elaboration of 
Sanitary and Phytosanitary Meas ures. In 1996, the National Asse mbly adopted the Law on State 
Agrarian Inspections. The law defined the legal, econo mic and organisation princi ples of State Agrarian 
Inspections in the Republic of Armenia. Articles 6 an d 7 of the Law, particular ly outlined the activities 
of the State Inspection for Agriculture, concerning cu ltivation of lands, use of fertilizers, the struggle 
against plant diseases, insects and weeds, transpor tation of toxic substances  and mineral fertilizers, 
conditions of conservation and annihilation, as well as livestock breeding with respect to veterinary 
services.  Resolution No.17 of the Government (11 March, 1998) the "National Agrarian Rules" were 
established.  The latter dealt with the protec tion of population from diseases common to man and 
animals, the prevention and eradication of co ntagious and non-contagious animal diseases, 
transportation, conservation, use and annihilation of veterinary medicaments and disinfectants.  For the implementation of the Law on State Agrarian Inspec tions,  a draft Law on Plant Protection and Plant 
Quarantine , as well as  the Draft Law on  Veterinary Medicine had been worked out. The Law on  Plant 
Protection and Plant Quarantine defined the legal, ec onomic and organisation prin ciples of the State  
Services of Plant Protection and Plant Quarantine of  the Republic of Armenia, and regulated relations 
between farms, enterprise s, organizations and indi viduals within the territory of the Republic of 
Armenia.  At present the Draft Law on Plant Prot ection and Plant Quarantine has been submitted to 
the Government.  The Law on Veterinary Medicine define d the legal, economic and organisation 
principles of the State Service of Veterinary Me dicine of the Republic of Armenia, fixed the 
regulation for the prevention of diseases of animal s, for the protection of population from diseases 
common to man and animals, and for providing the population with quality products according to 
veterinary and sanitary conditions. The law regulated relations between the State body in charge of 
veterinary medicine and enterprises, organizations, entrepreneurs, and individuals on the territory of the 
Republic of Armenia.  The Draft Law on Veterina ry Medicine had been submitted to the National  
Assembly for approval. WT/ACC/SPEC/ARM/1/Rev.4 
Page 48  
 
  
88. The representative of Armenia informed the Wo rking party that the following legislative acts 
related to Technical Barriers to Tr ade and Sanitary and Phytosanitary Measures were be ing drafted and 
will be enacted in the Republic of Armenia upon the date of its WTO Accession:  
 
Legislative act  Projected date of enactment  
Armenian Law on Conformity Assessment  01.09.99  
Armenian Law on Veterinary Medicine  01.09.99  
Armenian Law on Plant Protection and Plant Quarantine  01.10.99  
Armenian Law on Standardization  01.10.99  
 
The representative of Armenia stated that all relevant laws relating to Technical Barriers to Trade and 
Sanitary and Phytosanitary Measures  would be brought into conformity  with the requirements of the 
Agreements on Technical Barriers to Trade and Sanitary and Phytosanitary Measures by the date of 
Armenia's accession to the WTO with out recourse to any transition period.  The Working Party took 
note of these commitments. 
 
- Trade-Related Investment Measures (TRIMs) 
 
89. The representative of Armenia stated that Armenia did not maintain measures that were not in 
conformity with the Agreement on Trade-Related Investment Measures and would therefore not seek a 
transition for the progressive elimination of such m easures within a fixed period of time.  The Working 
Party took note of this commitment. 
 
- State Trading Enterprises 
 
90. In response to questions the representativ e of Armenia stated that the State monopoly over 
foreign trade of the Former Soviet Union was abol ished in 1989, and was repl aced by a registration 
requirement for the conduct of such activity.  By  a decree of the Presid ent of the Republic of 
4 January 1992 entitled On Foreign Ec onomic Activity, all enterprises registered and operating in the 
territory of Armenia, regardless of their form of ownership, had the right to conduct foreign economic 
activity, and are not subject to any additional registration requirements. 
 
91. Some members of the Working Party noted that  certain telecoms enterprises were engaged in 
State-trading pursuant to Article XVII of the GATT 1994.  In resp onse to requests for information on 
enterprises engaged in State trading in the Republic of Armenia, the representative of Armenia stated 
that based on the definition of State-trading set out in the Interpretation of Article XVII of the General  WT/ACC/SPEC/ARM/1/Rev.4 
 Page 49 
 
 
 Agreement on Tariffs and Trade 1994, Armenia maintained one State trading enterprise in the 
telecommunications sector. Basic telecommunicati on services, mobile and international data 
transmission and value-added services   have been reserved to Arment el, a  a joint-stock company owned 
by the Government of Armenia and a foreign pr ivate supplier, in exch ange for commitments by 
Armentel to develop Ar menia’s telecommunicatio ns infrastructure.  
 
92. The representative of Armeni a stated however that  Resolution 161 of March 1991, as amended 
by Resolution 415 of June 1995, reserved certain activ ities exclusively to the State and required that 
certain other activities were  licensed by the authorities.  List 1 attached to Resolution 161 identified 
eight types of activities that were reserved exclusively for the State.  These were: (i) the sale and purchase of weapons, arma ments, narcotics, explosives, radi oactive materials and other strong 
substances; (ii) the production and re pair of weapons, arma ments and explosives; (i ii) the preparation of 
drugs, narcotics, poisonous and strongly acting substances; (vii) the issuing of money and preparation of 
State medals; and storage, preservation and utilization of gold and other precious metals and substances 
of military significance.  All these reserved activities involved the Stat e in the exercise of its unique 
responsibilities, including the preservation of national se curity, public order, and the health and safety of 
the population.  List 2 of Resolution 415 indicated those activities that required prior authorization and 
the body responsible for providing the authorization.   As with the items on  List 1, few involved 
manufacturing activity.  All the item s on list 2 were controlled for si milar reasons to those items in 
List 1.   Licensing of economic activities include d under List 2 is non-restrictive in the sense that 
licensing decisions are not motivated by trade protecti on considerations.  In resp onse to questions from 
Working Party members, the representative of Armeni a stated that the coverage of these reservation 
powers was under review.  No State monopoly existed in respect of the product ion of pharmaceuticals.  
However, both State and private enterprises required licences from the Ministry of Health in order to 
produce pharmaceuticals. 
 93. In response to questions whether Armenia inte nded to report its State monopoly of natural gas 
distribution under Article XVII, the representative of Armenia replied that Armg as had not been granted 
exclusive or special rights or privileges in the market for natural gas distribution.  Armgas was 
State-owned and the Government had determined that this enterprise would be the only State-owned 
enterprise to distribute gas.  But this does not prevent any other entity  with majority private ownership 
from purchasing gas or from involvement in gas distribution.  In light of this situa tion, the Government 
of Armenia did not believe it was require d to notify Armgas under Article XVII. 
 WT/ACC/SPEC/ARM/1/Rev.4 
Page 50  
 
 94. The representative of Armenia said that no Stat e or private enterprises operating in Armenia had 
exclusive or special rights or privil eges granted by the Government of  Armenia to conduct international 
trade in goods or services except those mentioned in paragraph  92. However, he noted that a 
low-interest loan had been granted to the State en terprise Hayhatsahatik (A rmCereal) in February 1996 
to acquire and stockpile wheat from the  European  Union Counterpart joint assistance wheat fund. 
 
95. The representative of Armeni a confirmed that his Governme nt would apply its laws and 
regulations governing the trading ac tivities of State-owned enterprises and other enterprises with special 
or exclusive privileges and would otherwise act in  full conformity with the provisions of the WTO 
Agreements, in particular  Article XVII of the GATT 1994 and the Understanding on that Article; and 
Article VIII of the GATS.  The Working Party took note of these commitments. 
- Free zones, special economic zones 
 
96. The representative of Armenia stated that Ar menia did not maintain any free trade zones in 
which special duty privileges of any kind were grante d.  Armenia had, however , established a Frontier 
Trade Area in the Meghri Region, on the border with Iran.  The zone
 Frontier Trade Area was 
established to promote trade between Armenia and Iran.  Under the arrangement, Armenian enterprises were encouraged to establish a presence in the border area and Iranian enterprises were encouraged to do the same on their side of the fr ontier.  Forty citizens from each country were entitled to freely 
enter 
each other’s zones border areas in order to explore business and trading opportunities, but no special 
customs regime or privileged duty treatment was associated with any exchanges agreed on the basis of these contacts. 
 
- Government procurement  97. The representative of Armeni a informed the Working Party that government procurement in 
Armenia was governed by Governme nt Resolution number 67 if 8 February 1995 "On the State 
Procurement Order of the Republic of Armenia".  Purs uant to that Resolution, when government entities 
wished to procure goods, they could do so either through any procurement agent or directly from the 
marketplace on their own behalf.  Under the new appr oach to procurement introduced in that Resolution, 
no procurement entity, either State-owned or private, enjoyed special rights or privileges.  All interested 
parties could participate in proc urement activities under the common rules.  These purchases, which 
were given effect through  State Orders, were fina nced directly from th e budget, and involved the 
acquisition of goods and services by government entities  for their own consumption (i.e. not for resale or 
use as inputs into production).  In the past, these ar rangements had sometimes in volved implicit subsidy  WT/ACC/SPEC/ARM/1/Rev.4 
 Page 51 
 
 
 elements for the suppliers concerned, since prices  under State Orders had not  necessarily corresponded 
to market prices.  As markets developed, howe ver, and more competition occurred, both among 
Armenian enterprises and with imports, subsidized procurement was becoming a less frequent 
occurrence.  98. The representative of Armenia said that with effect from 1995,  State Orders in excess of 
US$50,000 for items including:  electric energy, va rious health services training and education, 
geological exploration, television broadcasting, water suppl ies and sewerage were subject to competitive 
tender.  In response to questions, the representativ e of Armenia stated that  tender announcements are 
made in official periodicals of th e Government of  Armenia.  The main criteria for selecting bids 
included the prices, the quality of the products or services offered, operationa l, technical and service 
characteristics, national security  requirements, terms and conditi ons of payment, and terms and 
conditions of delivery.  Foreign enterprises receive d equal treatment to Armenian enterprises.  The 
tenders were administered by the Ministries and Depa rtments concerned, or by their representatives. The 
representative of Armenia informed the Worki ng Party that currently the Law on Government 
Procurement was under preparation in the Ministry of Finance and Economy (recently formed upon the 
structural changes of the Governme nt of Armenia). Pursuant to th is Law, a governmental authority 
regulating the field and supervising all kinds of St ate procurements would be  established. Stringent 
criteria would be set governing qua lification, tendering, bidding, ev aluation, performance and appeal 
procedures. The provisions of the Law on Governme nt Procurement of the Republic of Armenia would 
be in conformity with the WTO Agreement on Gove rnment Procurement, in particular the national 
treatment and non-discrimination prin ciples would be guara nteed consistent with  Article III of the 
Agreement on Government Procurement. The adoption of the Law was projected prior to the date of 
Armenia’s accession to the WTO. 
 
99. In response to questions from members of the Working Party, the re presentative of Armenia 
stated that the Government of Armenia had decided to commence negotiations to join the Agreement on 
Government Procurement from the date of accession. In this connection, Armenia would request 
observer status in the Committee on Government  Procurement prior to accession to the WTO and 
would submit an entity offer within three months of accession to the WTO.  The Working Party took note of  this commitment. 
 WT/ACC/SPEC/ARM/1/Rev.4 
Page 52  
 
 - Transit 
 
100. The representative of Armenia stated that Ar menia permitted the unimped ed and tax-free transit 
of goods through its territory, with the exception of those goods whose importation is prohibited, i.e. 
weapons, components used in the production of we apons, explosives, nuclear materials, poisons, 
narcotics, strong psychotropic subs tances, devices for use in opium smoking, and pornographic material.  
These items would only be able to  transit Armenian territory with the explicit consent of the 
Government of Armenia.  Transi t goods remain under customs supervis ion while they are on Armenian 
territory.  Armenia was party to a plurilateral agreem ent on transit trade within the framework of the CIS 
Treaty on Economic Union.  This agreement provided that signatories should not tax or impede transit 
trade through their territories.  Armenia had also signed a bilatera l agreement on this subject with 
Georgia.  Similar agreements with Iran and the Ukraine were under consideration. 
 
- Agricultural policy 
 
101. The representative of Armenia said that as in the case of industry, the Government of Armenia 
does not maintain State planning of any kind in th e agricultural sector.    The Government provided 
indirect subsidies, such as:  charging only variable  costs on water and electricity supplies from farmers; 
provision of low-interest loans to consumers of agricu ltural water for the redemption of their debts to the 
energy suppliers;  provision of sh ort-term low-interest project loan s to farmers through the Agricultural 
Cooperative Bank;  provision of cere al seeds through "seed-loans"; and granting tax exemptions for 
producers of basic agricultural produc ts,  as a main means of support  to the agricultural sector. The 
support provided to agricultural produc ers was aimed to assi st farmers to overco me structural and 
operational difficulties during the transition toward the market oriented economy. In contrast to the slow 
pace in industry, Armenia has pr ivatized almost 90 per cent of ag ricultural land, and made land titles 
freely transferable. Agricu ltural support tables were being prep ared using the  1995-1997 period as the 
base period for the calculations of the aggregate measurement of support wh ich would be used to 
specify Armenia’s domest ic support commitments. 
 
102. The representative of Armenia added that as far as inputs were conc erned, two large State 
enterprises,  Hayagrospasarkum  (Armagroservice) and  Hayberriutyun  (ArmPr osperity) were dominant 
suppliers of agricultural services a nd inputs such as agricultural machin es and spare parts thereof, seeds, 
chemicals and fertiliz ers. In 1996, 66 per cent of each of these enterprises had been privatized while 34 
per cent had remained State-owned in the form auth orized by the Ministry of Agriculture (holding). 
Despite the fact that the competition remained somewhat  constrained in  the input  market, there  were  WT/ACC/SPEC/ARM/1/Rev.4 
 Page 53 
 
 
 no restrictions to stop other suppliers from entering  it. More new private enterprises have been entering 
the market and increasing their market shares, particular ly in the market of fertilizers. This tendency was 
expected to be continued with the development of conditions of competition in the market. He further 
added that these enterprises had no exclusive or speci al rights or privileges granted by the Government 
of Armenia in the field in which they operated.  
103. The representative of Arme nia said that in the past 
the Government of Armenia does  did not 
consider direct subsidies as a part  of the development programme of th e agricultural sector.  Indirectly, 
however, farmers have benefited fro m the Government’s policy of char ging only variable costs on water 
and electricity supplies, from the provision of low-interest loans to consumers of agricultural water for 
the redemption of their debts to the energy suppliers ;  short-term low-interest project loans to farmers 
through the Agricultural Cooperative Bank;  "seed-loan s"; and from the granting of tax exemptions for 
producers of basic agri cultural products. Variable  cost pricing policies have applied to all users of 
electricity and water.  However, full cost pricing (cos t recovery pricing) was introduced for electricity in 
1995, and for water during the course of 1996.  .  In addition, the Government supported a range of 
activities dedicated to reparation of  irrigation network, to restructur ing of financial and communication 
infrastructure, to training farmers in improved agri cultural techniques, to upgrading seed and livestock 
quality, to conducting pest and disease control, and to  providing technical advice  and extension services. 
These measures fit with the  green box  of domestic support tables as far as the provided services were 
available to all farmers and involve d budgetary outlays.  The Government intends to further increase the 
direct support to agricultural producers.  
 104. The representative of Armenia stated that the Government of Armenia paid no export subsidies 
on exports of agricultural products.  Accordingly th e Government of Armenia would bind its agricultural 
export subsidies at zero level in the relevant part  of the Schedule of Concessions on Goods.  The 
Working Party took note of this commitment. 
 
V. Trade Related Intellectual Property Rights (TRIPS)  105. The representative of Armenia st ated that the first st ep in the direction of intellectual property 
protection was the establis hment of the Armenian Patent Office  in 1992. Since December 1992, it has 
been possible to file applications for patents in  respect of inventions, and as from August 1993, to 
register utility models and industrial designs. During 1 993-96, the Armenian Patent Office received 695  
applications for inventions from local Armenians and 364 applications from fore igners. An applicant not WT/ACC/SPEC/ARM/1/Rev.4 
Page 54  
 
 a national of Armenia and not domici led in Armenia must c onduct his affairs through a patent attorney 
registered with the Armenian Patent Office. 
 
Industrial property protection
Intellectual property policy  
 
106. In response to requests for information c oncerning the intellectual property policy of the 
Government of Armenia, the repr esentative of Armenia stated that the Government of Armenia was 
currently engaged in a substantial programme of le gislative reform. During 1993- 4, the Armenian Patent 
Office received some 3,000 applica tions for trade marks, service mark s and appellations of origin. By 
1 December 1998 the Armenian Patent  Office had received about 1,300 appl ications for inventions - of 
which 850 were submitted by local Armenians a nd 450 by foreigners, and approximately 5,500 
applications for trademarks accor ding to National Procedure - of  which 4,874 applications were 
submitted by foreigners and 626 by lo cal Armenians.   Howe ver,  the reception of these applications for 
registration began after the issu e of Resolution No. 4 of 19 August, 1995, "On Confirmation of the 
Temporary Regulations for Trademar ks and Service Marks" and Patent  Office Order of 24 October 
1995, "On re-registration of former Soviet Union valid certificates fo r trade and service marks". In May 
1997, the Armenian National Assembly  adopted the Law on Protection of Trade and Service Marks and  
Appellations of Origin, and the Law on Protection of Trade Names. The provisions of the adopted 
statutes were fully consistent with international norms  in this area. A distinctive feature of the first of 
these Laws was the legal equality established between trademarks and service marks.  The 
representative of Armenia confirmed that the following  legislative acts related to intellectual property 
protection were currently enforc ed in the Republic of Armenia:  
 
Legislative act  Date of enforcement  
1. Armenian Law on Patents  25. 08.93  
2.  Armenian Law on Copyright and Neighboring Rights  27.05.96  
3.  Armenian Law on Trademarks, Service Marks and 
Appellations of Origin of the Goods  21.06.97  
 
4.  Armenian Law on Protection of Trade Names  01.07.97  
5.  Armenian Law on  Protection of Topographies of 
Integrated Circuits  14.03.98  
6.  Civil Code  01.01.99  
7.  Civil Procedure Code  01.01.99  
8.  Criminal Procedure Code  12.01.99   WT/ACC/SPEC/ARM/1/Rev.4 
 Page 55 
 
 
  
The representative of Armenia further confirmed that the following legislative acts related to 
intellectual property protection were  being drafted and will be enacted in the Republic of Armenia upon 
the date of its WTO Accession:  
 
Legislative act  Projected date of enactment  
1. Amendments to Armenian Law on Patents  01. 09.99  
2.  Amendments to  Law on Copyright and Neighboring 
Rights  01. 09.99  
3.  Amendments to  Law on Trademarks, Service Marks 
and Appellations of Origin of the Goods  01. 09.99  
4.  Amendments to Law on Protection of Trade Names  01. 09.99  
5.  Amendments to Civil Procedure Code  01.10.99  
6.  Amendments to Criminal Procedure Code  01.10.99  
7.  Customs Code (provisions related to the “Special 
Requirements related to Border Measures” provided by 
Section 4, Part III of  the TRIPs Agreement)  01.10.99  
8.  Criminal Code  01.10.99  
9.  Armenian Law on Selection Achievements (related to 
the protection of plant varieties and animal breeding)  01.10.99  
10.  Armenian Law on  Competition (including the 
regulation of unfair competition and protection of 
undisclosed information)  01.11.99  
 
The Working Party took note of these commitments.  
 
- Responsible agencies for policy formulation and implementation 
 
107. The representative of Armenia sa id that  policy formulation in the field of  industrial property 
was the responsibility of the Patent Office of the Republic of Armenia, and policy formulation in the 
field of copyrights was the responsibility of the  Ministry of Industry and Trade through the Armenian 
National Copyright Agency  within its system.  The policy implementation in the area of industrial 
property (patents, utility models, indus trial designs, trademarks  and se rvice marks, trade names, layout 
designs of integrated circuits and appellations of origin) was the res ponsibility of the Armenian Patent 
Office. The Patent Office was re sponsible for approving industrial  property right applications, 
maintaining the State Register of industrial property rights, issuing an official bulletin reflecting its 
decisions, and cooperating with foreign institutions and internatio nal organizations. The Patent Office 
was also responsible for the regime covering trademarks. 
 WT/ACC/SPEC/ARM/1/Rev.4 
Page 56  
 
 - Participation in international in tellectual property agreements 
 
108. The representative of Armenia stated that on 22 April 1993, Armenia  became a Member of the 
World Intellectual Property Or ganization (WIPO).  On 17 May 1994, Armenia also deposited a 
declaration of continued application of the Paris Convention for the Protection of Industrial Property, 
Madrid Agreement Concerning the International Re gistration of Marks and the Patent Cooperation 
Treaty.  
- Application of national and MFN treatment to foreign nationals 
 
109. Some members of the  Working Party noted that although the represen tative of Armenia had 
stated that foreigners enjoy national treatment in both civil and criminal procedures before the courts, its 
replies to questions concerning admi nistrative review proceedings, dea ling with the powers of judicial 
branches of government, suggested that the jurisd iction of economic courts  was not available to 
foreigners from outside the CIS.  The representative of Armenia stated that all c itizens enjoy equal rights 
under the law, for example, the Law on Patents provided that all foreig ners enjoyed the same rights as 
nationals of Armenia in relation to all patent matter s, including protection of patents and legal remedies 
against infringement. The above mentioned Law on Protection of Trade and Service Marks and 
Appellations of Origin, and the Law on Protection of  Trade Names similarly e nvisaged full national and 
MFN treatment for foreigners. This was also the case  in respect to the Law on Copyright, and any future 
laws and regulations adopted in the sphe re of intellectual property protection. 
 
- Fees and taxes 
 
110. The representative of Armenia stated that fees were payable upon  filing of an application and 
granting of a patent. Similar arra ngements were in place for trademarks and service marks and 
copyright. All fees were set so as to  be limited in amount to the appr oximate cost of services rendered, 
and the granting and protection of intellectual property rights  was not subject to taxation, as any fee is 
collected on behalf of the budget.  The fees for legal protection of I ndustrial property, established by 
the Law on State Fees of the Republic of Armenia,  were identical for resident Armenians and non-
residents.   WT/ACC/SPEC/ARM/1/Rev.4 
 Page 57 
 
 
 - Substantive standards of pr otection, including procedu res for the acquisition and 
maintenance of intellectual property rights 
 - Copyright protection 
 
111. The representative of Armenia stated that the National Copyri ght Agency was established in 
1993. More than 2,000 authors  and their artworks  were  registered with the Agen cy.    In the framework 
of its activities the Agency also registered those organizations which made use of artworks, such as 
theatres, concert organizations, or organizations using works of arts and crafts for i ndustrial purposes.  
Copyright policy implementation was the responsi bility of the National Copyright Agency, which 
registered copyrights, assisted individuals to secure copyrights,  provided advisory services, and 
collected and paid royalties due to authors and their successors in title. 
 
112. The representative of Armenia added that  in accordance with the Law on Copyright and Neighbouring Rights, which was adopted by the National Assembly in May 1996, the National Copyright Agency provided protection for copyrights in the territory of the Republic of Armenia   The 
present Law on Copyright and Neig hbouring Rights had been elaborated in accordance with the 
provisions of the Bern Convention on  Protection of Wo rks of Art and Literature.  It provided protection 
for the property rights of computer programs and comp ilations of data, as well as for the neighbouring 
rights, i.e., the rights of phonogram  and videogram producers and broadcasting and television stations.   
 
 - Trademarks, including service marks 
 
113. The representative of Armenia informed the Working Party that in May 1997, the Armenian 
National Assembly adopted the Law on Protection of  Trade and Service Marks and Appellations of 
Origin and the Law on Protection of Trade Names. As mentioned earlier, a distinctive feature of the first 
of these Laws was the legal equal ity established between trademarks and service marks. The Law set out 
the terms and conditions of trademark protection, the ki nds of trademarks that may not be registered, the 
procedures for registering trademarks, the rights of appeal against decisions relating to trademarks, the 
circumstances in which trademarks may be used, and the documentary require ments for registering a 
trademark. Trademark protection  was granted for 10  years, renewable for successive periods of 10 
years. The provisions of the Law were in full co nformity with Articles 15,16.1 and 17–21 of the TRIPS 
Agreement. As regards the provisions of   Arti cle 16.2 and 16.3 of the TR IPS Agreement concerning 
established trade and service marks, these were also taken into account in the adopted Law on Protection 
of Trade and Service Marks and Appellations of Or igin (unlike the  former Resolution No. 4 of 
19 August, 1995), and they would be deta iled in further elaborated regulations. WT/ACC/SPEC/ARM/1/Rev.4 
Page 58  
 
  
114. The representative of Armenia stated that the abov e-mentioned Law on Protection of Trade and 
Service Marks and Appellations of Origin and the La w on Protection of Trade Names came into force in  
July 1997. 
 
 - Geographical indications, incl uding appellations of origin 
 115. Some members of the Working Party as ked how Armenia would protect geographical 
indications under the Law on Protection of Trade an d Service Marks and Appellations of Origin, and 
whether that legislation would be in conformity with Articles 22 to 24 of the TRIPS Agreement. The 
representative of Armenia stated that geographical indications were not explicitly mentioned in 
Resolution No 4 of 19 August, 1995, so the protection  for this kind of property would not be provided 
until the Law on Protection of Trade and Service Ma rks and Appellations of Origin became operative. 
The representative of Armenia stated that the provisions of this adopted Law were in conformity with Articles 22 to 24 of the TRIPS Agreement. The re levant provisions in the mentioned Law had been 
developed in compliance with the provisions of th e Paris Convention (Articles 1(2), 10, 10ter, 10bis, 
6quinquies B.3), the Madrid Agreemen t on the Repression of False or De ceptive Indications of Source 
on Goods (Articles 1(1), 1(2)), and the Lisbon Agreem ent for the Protection of Appellations of Origin 
and their International Registrati on (Articles 2(1), 2(2), 3, 6). 
 
 - Industrial designs 
 
116. The representative of Armenia stated that industrial designs were protected  by the Law on 
Patents.   In particular, the Ar ticle  of the Law, which estab lished the necessary  conditions for 
patentability of industrial designs, was consistent with  Articles 25 and 26 of the TRIPS Agreement.  In 
response to requests for information concerning the spec ific protection for textil e designs provided for in 
Article 25(2) of the TRIPS Agreemen t, the representative of Armenia stated that although textile designs 
were not explicitly mentioned in Article  8 of the Law on Patents, they were nevertheless covered under 
that provision. There was also a similar reference in Article 2.  ("The Types of  Industrial Design") and 
Article 5 (d) ("The Composition of Application") of The Rules of Preparation and Filing the Application 
of Industrial Design", adopted by Arme nian Patent Office  on 10 February 1994. 
  WT/ACC/SPEC/ARM/1/Rev.4 
 Page 59 
 
 
  - Patents 
 
117. The representative of Armenia stated that the Law on Patents was adopted in August 1993. 
Under the law, patents are granted for inventions, utility models and industrial designs. The term of 
patent  was 5 years for inventio ns (temporary patent, which was granted on a basis of limited 
examination of the invention), and 20 years, when th e patent was granted on a basis of comprehensive 
examination.  These periods were counted from the date  of filing and as far as patents granted on a basis 
of comprehensive examination were concerned, the Law provided for a three-year period of deferred 
examination after the date of initial filing.  Patent s were granted subject to requirements that the object 
of the patent is new, involves an inventive step a nd is capable of industrial application, and that no 
conflict arose with respect to public order and secu rity, good morals and law. Where a patentee fails to 
exploit the patented object within four years from the da te the patent was secured,  any party interested in 
the use of the invention, utility model or industria l design may request that a compulsory licence be 
issued. As far as patents for inve ntions were concerned, the Law pr ovides for the so-called "deferred 
examination" for a three-year period. A full examinati on of a patent application was carried out as a rule 
only upon request and payment of a fee by the applicant or any other interested party. Some members of 
the Working Party asked whether Arme nia’s Law on Patents was in full conformity with Articles 27 to 
34 of the TRIPS Agreement, and re quested further information on the conformity of Ar menia’s system 
of compulsory licensing.  
 
118. The representative of Armeni a stated that the Law on Pate nts was in conformity with 
Articles 27 to 34 of the TRIPS Agreement, and amen dments concerning compulsory licensing would be 
made to the Law on Patents  from the da te of Armenia's accession to the WTO 1 September 1999 .  The 
Working Party took note of this commitment. 
 
119. The representative of Armenia sa id that the owner of a security deed (patent or certificate) for 
invention or industrial design granted by the Patent Office of the Soviet  Union , which was still in force, 
could file with the Armenian Patent  Office for an Armenian patent at  any time during the validity period 
of the exclusive rights (20 years after the initial filing). Further, an applicant who had filed an 
application before 8 Decem ber 1992, to obtain a security deed on an invention or an industrial design 
with the intention of obtaining protection also in Arme nia, and if the applicati on was still pending with 
the Patent Office of the Russian Federation, had a ri ght, before 30 December  1996, to file a request with 
the Armenian Patent Office that the application be further processed under Arme nian legislation. In the 
ten-year period to 1990, residents of  Armenia registered 6,000 inventions  with the Patent Office of the 
Soviet Union. The Law on Patents specified the na ture of patentable mate rial, the conditions for WT/ACC/SPEC/ARM/1/Rev.4 
Page 60  
 
 patentability, the rights of patent holders, the conditions of compulsory  licensing, the procedures for 
granting patents, and dispute settlement. 
 
 - Plant variety protection 
 
120. The representative of Armenia stated that Armenia currently has no laws dealing with plant 
variety protection. In response, some members of the Working Part y asked how it was proposed plant 
varieties would be protected in the future. The re presentative of Armenia stated that legislation t
o cover  
a Draft Law on Selection Achievements, covering both the protection of plant varieties and animal 
breeding  was being drafted and would be submitted to  the National Assembly for approval. It was 
intended that this legislation would enter into fo rce from the date of Armenia’s accession to the WTO 1 
September 1999 . The Working Party took note of this commitment. 
 
 - Layout designs of integrated circuits 
 
121. In response to questions conc erning the system for protection of  layout designs of integrated 
circuits, the representative of Armenia stated that   the Law on Protection of Layout Designs of 
Integrated Circuits which had been adopted on 3 February 1998 and entered into force on 
14 March 1998.  
 
 - Requirements on undisclosed information,  including trade secrets and test data 
 
122. In response to requests for information concerning the protecti on of trade secrets and 
undisclosed information in Armenia, notably in vi ew of  Article 39 of th e TRIPS Agreement, the 
representative of Armenia stated that Armenia had not yet developed provisions for the protection of 
trade secrets and undisclosed informat ion. Legislation to cover the prot ection of undisclosed information 
was under  preparation  being drafted by the Ministry of Industry and Trade . It  was intended that this 
legislation would  will cover both the regulation of unfair competition and protection of undisclosed 
information and will enter into force from 1 November 1999 the date of Armenia’s accession to the 
WTO .  The Working Party took note of this commitment. 
  WT/ACC/SPEC/ARM/1/Rev.4 
 Page 61 
 
 
 - Measures to control abuse of intellectual property rights 
 123. In response to a question, the representative of Armenia stated that legislation regulating unfair 
competition was stil l under preparation
 being drafted and will enter into force from 1 November 1999   
from the date of Armenia’s accession to the WTO .   The Working Party took note of this commitment. 
 
124. The representative of Armenia also stated that compulsory licensing was provided for under the 
Law on Patents. In cases involving national security, p ublic order or emergencies, the Government could 
insist on compulsory licensing, provided the patent ho lder had not worked the patent within four years 
of registration.  Article 16 of the Law on Patents stated that in the interests of national defense, 
maintenance of public order or in an extreme situati on, the Government without the authorization of the 
right holder, could permit a third party to use the subj ect matter of a patent, obliging the latter to provide 
compensatory remuneration to the right holder.  An y dispute over the amount of compensation had to be 
settled in the courts. A compulsory  licence could only be obtained if a patent has not been used within 
four years and if the proposed user has made effo rts to obtain authorization from the right holder.  A 
licence could not be awarded to a third party if the owne r of a patent could establish that the failure to  
use the patent was attributable to  factors beyond the owner’s control.  Similarly, under the adopted Law 
on Protection of Trade and Service Marks and Appellations of Origin, at the request of any person 
trademark protection could be nullified  by a court decision, if a trademar k has not been used within five 
years of the date of registration or preceding the date  of request for nullification.  A trademark owner has 
the right to defend the non-use of a trademark, and bloc k a decision to remove the property right if the 
reasons for not using the trademark we re beyond the control of the owner. 
 
- Enforcement 
 - Civil judicial procedures and remedies 
 
125. The representative of Armenia stated that civil court procedures were al ways available to deal 
with legal matters relating to intellectual property protection. The courts were  empowered to order the 
payment of damages and court expenses. The other remedies envisioned in the TRIPS Agreementare 
also within the decision-making auth ority of Armenian courts.   In  response to questions concerning 
foreigners' rights to enforce inte llectual property rights, and whet her the remedies, procedures and 
penalties were in conformity with Articles 42 to 49 of the TRIPS Agreement, the representative of 
Armenia stated that the civil courts in Armenia were  fully empowered to provide the remedies referred 
to in the above mentioned Articles of the TRIPS Agre ement.  Civil remedies co uld not be ordered as a 
result of administrative procedures. Foreigners enjoye d the same rights as Armenian nationals in this WT/ACC/SPEC/ARM/1/Rev.4 
Page 62  
 
 area. Remedies against criminal behaviour were available under Armenia’s courts and penal system. 
Foreigners have the same access to these reme dies as Armenian nationa ls. The Government was 
considering the amendment of existing legislation an d introduction of additional legislation containing 
remedies that were framed in more specific terms fo r the enforcement of intellectual property rights. The 
missing provisions were  included in the   Civil Procedure and Criminal Procedure Codes, which  had 
been adopted on 17 June 1998 and 1 July 1998 re spectively and had entered into force on 
12 January 1999.   
 126. Some members of the Working Party asked wh ether Armenian judicial  authorities had the 
authority to order injunctions or provisional measures against infri ngement of intellectual property 
rights, as provided for in Articles 44 and 50 of  the TRIPS Agreement, and whether administrative 
authorities enjoyed similar authority. In response the representative of Armenia stated that the judicial 
authorities had the power to order injunctions or provi sional measures.  Article 33 of the Law on Patents 
indicated the areas in which remedies  may be sought through the courts in  the area of patent protection. 
Article 45 of the Law on Protection of Trade and Serv ice Marks and Appellations of Origin, as well as 
Articles 42 to 44 of the Law on Copyright and Neig hbouring Rights provided similar provisions in the 
case of trademarks , service marks,  copyrights and neighbouring rights.  
 
 - Provisional measures  127. The representative of Arme nia stated that the civil
 Courts of First Instance also have the 
necessary authority to take the provisional measures envisioned in  Article 50 of the TRIPS Agreement. 
 
 - Administrative procedures and remedies  128. The representative of Armenia stated that civil remedies coul d not be ordered as a result of 
administrative proce dures in Armenia. 
  - Special border measures 
 
129. Some members asked whether Armenia had a system of border enforcement against intellectual 
property rights infringements in accordance with Articles 51 to 60 of the TRIPS Agreement. The 
representative of Armenia replied th at although no explicit provisions had so far been developed in this 
area, the judicial authorities were empowered to take the kinds of measures envisioned in  Articles 51 to  WT/ACC/SPEC/ARM/1/Rev.4 
 Page 63 
 
 
  60 of the TRIPS Agreement. The part of the proce dures, sanctions and fines that were  previously 
lacking were provided for in the above-mentioned ne w Civil Procedure and Criminal Procedure Codes.  
The remaining will be covered by the Criminal a nd Customs Codes respectively which were now under 
preparation by the relevant commissions of the Nati onal Assembly,  the Ministry of Justice, and the 
Ministry of Finance and Economy.  According to the commitments undertaken by Armenia its 
legislation would be in c onformity with the WTO provisions from 1 October 1999.  the date of 
Armenia’s accession to WTO. The Working Party took note of these commitments. 
 
 - Criminal procedures 
 
130. The representative of Armenia stated that at pr esent  Article 140 of the Criminal Code provided, 
that infringement of copyright, publication (disclosur e) of an invention before the application filing, 
appropriation of invention’s authorsh ip, as well as coercion or inclusi on into collaboration of persons 
not participating in the creation of an invention, s hould be punished by imprisonment not to exceed two 
years or by a fine not to exceed dram 300.  Arti cle 157 of the same Code stated that deceiving 
purchasers and customers should be punished by imprison ment not to exceed two years or by a fine not 
to exceed dram 400. In addition, as mentioned ab ove, the missing provisions  were expected to be 
included in the new Criminal Code, which is now unde r preparation by the relevant commissions of the 
National Assembly and the Ministry of Justice. The la tter would be in conformi ty with the provisions of 
Part III of the TRIPS Agreement. The relevant legi slation would enter into force from 1 October 1999  
from the date of Armenia’s accession to WTO .The Working Party took note of these commitments. 
 
- Laws, decrees, regulations and other legal acts relating to the above. 
 
131. Some members of the Working Party stated  that since 1992, Arme nia had had bilateral 
commitments for the protection of in tellectual property rights.  Armeni a should accelerate  its legislative 
process to ensure the full implementation of the TR IPS Agreement from the date of its accession to the 
WTO.  In addition, some members of the Working Part y requested clarification of  the status of the draft 
Law on Trade Marks, Service Marks and Appellati ons of Origin in Parliament, and whether the 
legislation was in full conformity with Articles 15 to  21 of the Agreement on Trade-Related Aspects of 
Intellectual Property Rights.  The representative of  Armenia replied that on   May 1997, the Armenian 
National Assembly adopted the Law on Protection of  Trade and Service Marks and Appellations of 
Origin and the Law on Protection of Trade Name which were in full conformity with Articles 15 to 21 
of the TRIPS Agreement, including the rights specified in Article 16.  WT/ACC/SPEC/ARM/1/Rev.4 
Page 64  
 
 - Statistical data on applications  for and grants of intellectual property rights, as well as any 
statistical data on their enforcement 
 132. In response to requests for information concerning the numbers of  patent applications filed in 
Armenia, the represen tative of Armenia stated th at during 1993-96,  1059  patent applications had been 
filed with the Patent Office. In 544  cases a decision  for granting a provisional patent was adopted, in 
128 cases a patent was refused or the application was withdrawn, and 515  applications were under 
examination. During 1994-96, 15 applications for obtai ning industrial design patent s were filed, 8 from 
foreigners, and each was granted a patent. As regards trade and service marks and appellations of origin, 
after adoption of the Law on National Duty in  September 1996, 1513 applications passed the 
preliminary examination and 513 trad e and service marks we re registered by th e Armenian Patent 
Office. Under the new legislation more than 1200 au thors, theatre and concer t  organizations were 
registered by the Natio nal Copyright Agency. 
 133. The representative of Armeni a stated that the Government  of Armenia would apply the 
provisions of the Agreement on TRIPS no later than the date of its accession to the WTO, without 
recourse to any transitional periods .  The Working Party took note of this commitment. 
 
VI. Policies Affecting Trade in Services 
- General 
 
134. In response to questions, the representative of Armenia inform ed members of the Working Party 
that Armenian laws and regulations, and the polic y framework did not genera lly distinguish between 
trade in goods and trade in services.  The rights to trade were enshrined in the Law on Enterprises and 
Entrepreneurial Activities.   All enterp rises must be registered and the re gister is open to public scrutiny.  
These requirements apply to all juridical persons, whet her they are corporations or sole entrepreneurs. 
 135. In reply to requests for an explanation of the Government of Armenia's understanding of the 
different modes of supply, the repr esentative of Armenia noted that in terms of the modes of supply 
identified in the General Agreement on Trade in Services (GATS), the Law on Enterprises and 
Entrepreneurial Activities was releva nt for enterprises selling services across frontiers (mode 1), for 
service supply through commercial presence (mode 3), and for natu ral persons who are independent 
service suppliers (mode 4).  Consumption abroad (mode 3) was not covered in this context.   Armenia 
had not developed any policies that restricted the consumption of services abroad.  Moreover, Armenian  WT/ACC/SPEC/ARM/1/Rev.4 
 Page 65 
 
 
 nationals and residents were at liberty to travel abro ad and consume services within foreign jurisdictions 
if they so wish. 
 
136. As far as commercial presence (mode 3) and natural persons who are independent service 
suppliers (excluding that part of mo de 4 dealing with employees of se rvice suppliers) are concerned, the 
Law on Foreign Investments covered investment in both goods and serv ices.  The law established the 
legal framework for all types of investment involv ing foreign capital, incl uding joint ventures and 
wholly-owned enterprises and subsidiaries, whether the fo reign investor is an indi vidual or an enterprise.  
No restrictions were im posed on the temporary presence of natu ral persons in Armenia, whether as 
employees of foreign service supplie rs or as independent suppliers of services.  In the latter case, 
however, the service supplier would be required to  register in Armenia as a business or sole 
entrepreneur. 
 137. Armenia's Schedule of Sp ecific Commitments in Se rvices is reproduced in Part II of the Annex 
to the Draft Protocol of Accession. 
 
VII. Trade Agreements  
138. Some members of the Working Party requested  that Armenia provide detailed information on 
the range of Free and Barter Trade Agreements to which Armenia was a party.  Other members 
requested information so that the Working Party could examine whether Arme nia’s plurilateral and 
bilateral Free Trade Agreements were consistent with Article XXIV of the GATT 1994.   In response to 
these requests, the representative of Armenia inform ed the Working Party that Armenia had developed a 
network of plurilateral and bila teral trade agreements with vari ous countries.  A number of the 
arrangements were short-term in na ture, designed to respond to particul ar needs, other agreements were 
viewed as more durable, representi ng the Armenian Government’s percep tion of the directions in which 
future trade relations should develop.  As a member  of the World Trade Organization, Armenia would  
keep its bilateral and regional tr ade agreements under review, not only to ensure legal consistency, but 
also to ensure the coherence of Armenia’s trade relations with a broad multilateral framework. 
 
- Plurilateral or regional agreements 
 
139. In response to further requests for informati on on Armenia's trade regiona l trade agreements, the 
representative of Armenia stated that the Treaty of  Economic Union was a framework agreement signed 
by nine Heads of State of the Commonwealth of Independent States (CIS) in 1993 (Azerbaijan, WT/ACC/SPEC/ARM/1/Rev.4 
Page 66  
 
 Armenia, Belarus, Kazakst an, Kyrgyz Republic, Moldova, Russia, Ta djikistan, and Uzbekistan).  The 
treaty  envisaged that signatories will move to the eventual establishment of a customs union and 
common market among CIS countries, ho wever, each signatory might exer cise its own discretion on the 
pace and timing of integration into economic struct ures of the CIS.  Other economic and financial 
components of the CIS treaty related to a paymen ts union, cooperation on  investment, industrial 
cooperation, and an agreement on customs procedures.  The treaty set out quite specific commitments in 
many of these areas (as well as on cultural, scient ific, and defence matters).  Because the treaty was 
essentially an evolving fram ework document, it did  not  "operationalize" these commitments.  Instead, 
the specifics of preferential trading relationships were  defined in bilateral free  trade agreements and in 
clearing agreements.  
140. Also in response to requests for further info rmation, the representative of Armenia explained 
that Armenia was also a member of the Black Sea Economic Cooperation (BSEC) Organization, along with ten other countries (Albania , Azerbaijan, Bulgaria, Georgia, Greece, Moldova, Romania, Russia, 
Turkey and Ukraine).  This agreement covered a numb er of fields, including economic cooperation and 
trade, investment, scientific and technical coop eration, the establishment of a BSEC Bank, and 
cooperation on transport and communications.  The agreement did not make any provision for 
preferential trade, although it envisaged the possibility of free trade zones in the future.  More generally, 
the organization seeks to cement relations among neighbouring countries  through cooperation in such 
areas as transport, international pa yments and industrial development. 
 141. Some members asked whether Armenia had concluded an economic cooperation agreement 
with the  European Union.  The representative of Armenia confirmed that the Partnership and 
Cooperation Agreement between the  European Union and Armenia ha d been signed on 22 April 1996, 
and the Interim Agreement on Trade and Trade Rela ted Issues between the  European Union and 
Armenia had been signed on 20 D ecember 1996.  The Interim Agreement  entered into force  from the 
end of 1997,  after exchange of ra tification instruments.  The Agreem ent did not provide for any trade 
preferences. 
 
- Bilateral free trade agreements and trade a nd economic cooperation agreements with CIS 
countries 
 
142. In response to questions of some members about Armenia's bilatera l agreements with CIS 
countries, the representative of Arme nia stated that bilateral free tr ade agreements (FTAs) had been 
signed with Georgia, Kyrgyz Republic, Moldova, Russian Federation, Tadjik istan, Turkmenistan and  WT/ACC/SPEC/ARM/1/Rev.4 
 Page 67 
 
 
 Ukraine. The initial bilateral free trade agreement had been authenticat ed with Kazakstan.  The bilateral 
free trade agreements had been ratified with th e Russian Federation (1993), Kyrgyz Republic (1995), 
Turkmenistan (1995), Georgia (1996), Ukrain e (1996) and became legally binding.  When the free trade 
agreements were esta blished and operationalized, tariffs were set up at zero level, and non-tariff 
restrictions were eliminated. However, under the FTA with the Russia Fede ration, each party could 
exempt from duty free treatment any export items subj ect to quotas, licences an d export taxes.  Since 
Armenia did not maintain any export restrictions (o ther than those generall y applicable for public 
security, health and safety reas ons), there was nothing on Armenia’s exception list unde r the free trade 
agreement.  Russia maintained ce rtain export restrictions which c ould be covered by the exception 
provisions of the FTA, but in pr actice, these often did not apply because of the trade and economic 
cooperation agreements that Arme nia also signed annually with Ru ssia (see below).  No other  
exceptions to duty-free treatment for imports were contemplated in the Russian-Armenian free trade 
agreement.  Within the period after signing of a bilateral Free Trade Agre ement with Armenia (1992-
1997), the Russia Federation had subs tantially liberalized its foreign trade (removed quotas, export taxes 
etc.).  Its legislation on  tariff and non-tariff regulation of exports did not provide for a list of specific 
products.  This ensured the conformity of the FT A between Armenia and the Russian Federation with 
the WTO rules on free trade. The b ilateral protocol, signed on 28 Augus t 1997, confirmed the fact that 
substantial deviations from the free trade regime between Armenia and Russia were eliminated.  There 
are no exemptions from duty free treatment in the ra tified bilateral agreements with Turkmenistan, 
Ukraine, Kyrgyz Republic and Georgia.  
 
143. The representative of Armenia further responded that the FTAs we re an outgrowth of the trade 
and economic cooperation agreemen ts that Armenia signed with CIS countries immediately after 
independence, and which in many cases are still oper ational.  Most of these early agreements were 
negotiated annually, they envisaged fr ee trade and they included lists of products that the parties agreed 
to trade with one another.  The pur pose of these agreements was to try to ensure that pre-existing trade 
links were not ruptured altogether in the disarray that followed the breakup of the Soviet Union.  The 
specificity of product-wise commitments varied consider ably, including as to the identification of prices 
and quantities to be exchanged.  Pa rticularly after 1992, product lists tended to become indicative, with 
no prior agreement on prices, and th e commitments were only partially fulfilled.  In 1993, for example, 
product commitments under these agre ements were met to the extent of 20-50 per cent, and figures for 
1994  were considerably lower.  From 1995 the practice of product commi tments was eliminated. 
 
- Bilateral clearing arrangements 
 WT/ACC/SPEC/ARM/1/Rev.4 
Page 68  
 
 144. In response to requests for information in re lation to Armenia's barter  trade agreements with 
other countries, the representative of Armenia stated  that barter was the e ssence of the remaining 
clearing arrangements maintained by Armenia.  Bart er was borne of necessity and was not a preferred 
policy.  Barter was deemed essential in the immediat e post-independence period, in order to preserve the 
only trade links that Armenia had at that time, a nd was a feature of the trade and economic cooperation 
agreements described above.  Moreover, barter offers a modicum of energy security, which in that 
environment remained of paramount importance to the Government.  In addition, transport difficulties 
and a poorly functioning payments system had ofte n made governmental support a sine qua non of 
doing business with FSU countries.  As  these kinds of constraints were relaxed, barter was expected to 
disappear. The Government was committed to eliminating barter arrangements as soon as practicable and recognized that its role as tr ader or as intermediary in trad e inhibited the establishment of 
independent networks and contac ts with foreign buyers by enterprises which was an essential 
determinant for exporting su ccess.  In1995 the only barter arrangem ents were those with Turkmenistan 
for gas, and with Russia for crude oil and maz out. The agreement with Turkmenistan involved the 
purchase of 2.2 billion cubic meters of gas at US$80  per thousand cubic meters.  Payment for the gas 
was in both cash (US$30 per thousand cubic meters ) and in counterpart products (US$50 per thousand 
cubic meters). Counterpart  products included such items as me tals, chemical products, machinery, 
products of light industry,  and products of food industries (includi ng brandy, wine, jams, and cigarette 
filters).  The clearing arrangements stated the quantities and prices of  goods guaranteed in exchange for 
the energy.  In the case of the 1995 Agreement wi th Turkmenistan, however,  an additional list of 
products that might be exchanged had been included,  in order to provide additional flexibility. The 
agreement with Russia involved the purchase by Armenia of 200,000 tons of mazout and 200,000 tons 
of crude oil under the contract.  The terms of th is agreement were more rigid than those for 
Turkmenistan, and the composition, quantity and prices  of goods fixed in the contract negotiation were 
not subject to any change.  This latt er feature is akin to what a prod uct list represents under a trade and 
cooperation agreement.  Thus, the final compositio n of goods for exchange is  established during the 
currency of the contract.  
145. In response to requests fo r amount of trade flows arising from barter trade agreements,  the 
representative of Armenia said that the 1993 clearing arrangement s (which existed with Georgia, the 
Russian Federation and Turkmenistan, and include d metals, paper wood produc ts and industrial raw 
materials as well as energy) involved 74 per cent of total exports and 56 per ce nt of total imports. The 
respective figures in 1994 were 46 per cent for expo rts and 29 per cent for imports. Domestic producers 
were at liberty to choose whether or not to supply goo ds for the clearing arrangements.  But in view of 
the difficulties many enterprises faced in overc oming transport and payments problems relating to  WT/ACC/SPEC/ARM/1/Rev.4 
 Page 69 
 
 
 exports, the Government generally encountered little difficu lty in securing the necessary supplies from 
local industries to fulfill the clearing contracts. As  far as transport and paym ents problems were being 
settled, the importance of barter tr ade gradually decreased and by la te 1995 deliveries under the clearing 
arrangements were abandoned in practice.  In response to requests for current state of barter trade arrangements the representative of  Armenia stated that in 1996 the Government announced its intention 
to cease the barter trade, and none of former ba rter arrangements was reco mmenced. The Government 
of Armenia does not envisage  conducting barter or clearing settlements in the future. 
 
- Bilateral trade and cooperation agreements 
 
146. The representative of Armenia also stated that trade and coope ration agreements had also been 
signed with many non-CIS countries, including Argentin a, Austria, Bulgaria, China, Estonia, Greece,  
Hungary, India, Iran, Latvia, Lithuania, Poland, Roma nia, Syria, the United States and Vietnam.  The 
possibility of such agreements with a number of other countries is under active consideration. These 
agreements seek to strengthen ec onomic links, but do not contain any pr ovisions for preferential trade. 
 
- Other non-trade bilateral agreements  
147. The representative of Armenia noted that Armenia had also signe d a series of other agreements 
on investment and on customs relations.  The re ciprocal investment promotion and protection 
agreements sought to encourage investment between the parties, primarily by  guaranteeing national and 
more favourable treatmen t, non-expropriation (expropriation, an extremely rare measure, may be 
executed only due to public needs, upon providing prel iminary adequate and effective  compensation 
for the confiscated investments), and unrestricted transfers of investment funds and returns from the 
investments, implementation of international arbitr ation practices in the case of disputes between 
parties, as well providing guarantees against legislative changes.  Investment agreements had been signed with 22 countries:  Argentina, Austria, Bulg aria, Canada, China, Cyprus  Egypt, France, Georgia, 
Germany, Greece, Iran, Ir eland, Italy, Kyrgyzstan, Lebanon, Ro mania, Turkmenist an, Ukraine, the 
United Kingdom, the United States and Vietnam.  Agreements on customs relations are intended to 
ensure cooperation and smooth working relations between the customs services of the signatories.  Such agreements have been signed w ith Georgia, Iran, Tadjikistan,  Turkmenistan and  Ukraine. 
 148. In response to further reques ts for clarification of the compa tibility of Armeni a's free trade 
agreements with the CIS  States  with Article XXIV of the GATT 1994, the representative of Armenia 
stated that within the framework of the 1994 Fr ee-Trade Agreement among the countries of the WT/ACC/SPEC/ARM/1/Rev.4 
Page 70  
 
 Commonwealth of Independent States (CIS), Armenia’s plurilateral and bilateral free-trade agreements 
eliminated duties and other restrictive regulations on substantially all trade between the parties.  
Armenia considered that th ese arrangements were cons istent with  Article XX IV of GATT 1994.  It  
may be noted that at present Armenia  does not conduc t trade with all of the CI S countries, but in respect 
of those countries with which Arme nia  does trade, Armenia  impos es no taxes or barri ers on its imports 
and exports.  These agreements  do not cover trade in services. 
 
149. The representative of Armeni a confirmed that Armenia would observe the provisions of the 
WTO including  Article XXIV of th e GATT 1994 and  Article V of th e GATS in its trade agreements, 
and that it would ensure that the provisions of th ese WTO Agreement for notific ation, consultation, and 
other requirements concerning prefer ential trading systems, free trade areas, and customs unions of 
which Armenia was a member were met from the da te of accession. The Working Party took note of 
these commitments. 
- Plurilateral trade agreements 
 
150. The representative of Armenia informed the Working Party that the Government of Armenia 
had decided to
 will accede to the Agreements on Government Procurement and  Trade in Civil Aircraft.  
The Government of Armenia would also acce de and to the Information Technology Agreement, 
reflecting corresponding tariff commitments in its Schedule of Conc essions on Trade in Goods.  Upon 
the legal conclusion of Armenia's WTO accession, Armenia will commence negotiations to join the 
Agreement on Government Procurement.  Correspondi ngly, Armenia will request observer status in the 
Committee on Government Procurement prior to acces sion to the WTO and will submit an entity offer 
within 3 months of accession to the WTO .  The Working Party took note of these commitments. 
 VIII. Transparency- Publication of Information 
 
151. Some members of the Working Party requested that the Government of Armenia confirm that 
from the date of accession, all laws, regulations, rulin gs, decrees or other measur es related to trade in 
goods or services will be published in  its official publicati on for public review at least two weeks prior 
to implementation, unless a longer period is sp ecified under the releva nt WTO Agreement. The 
representative of Armenia confirme d that, from the date of accession, all laws, regulations, rulings, 
decrees or other measures related to trade in goods or services would be published in its official 
publication for public review at le ast  two weeks prior to implemen tation, unless a longer period is 
specified under the relevant WTO Agr eement, that in accordance with   Article X of the GATT 1994, the 
published measures would be accessible to traders prio r to implementation, and that no law, rule, etc.,  WT/ACC/SPEC/ARM/1/Rev.4 
 Page 71 
 
 
 related to trade would become effective prior to su ch publication. The Working Party took note of these 
commitments. 
 
Notifications 
 
152. The representative of Armenia sa id that at the latest upon  entry into force of the Protocol of 
Accession, Armenia would submit all notifications  required by an Agreement constituting part of the 
WTO Agreement.  Any regulations subsequently enacted by Armenia which gave effect to laws enacted to implement any Agreement constituting part of the WTO Agreement would also conform to the requirements of that Agreement.  The Work ing Party took note of these commitments. 
 Conclusions 
 
153. The Working Party took note of the explanatio ns and statements of Armenia concerning its 
foreign trade regime, as reflected in this report. The Working Party took note of the commitments given 
by Armenia in relation to certain specific matters, which are reproduced in paragraphs, 15, 21, 28, 31, 
34, 41, 48, 56, 64, 66, 68, 69, 75, 78, 82, 88, 89,  95, 99, 104, 118, 120, 122, 123, 129, 130, 133, 149, 
150, 151 and 152 of this Report.  The Working Pa rty took note that these commitments had been 
incorporated in paragraph 2 of the Protoc ol of Accession of Armenia to the WTO. 
 
154. Having carried out the examination of the forei gn trade regime of Armeni a and in the light of 
the explanations, commitments and concessions made by the representatives of Armenia, the Working Party reached the conclusion that, Armenia should be invited to acced e to the Agreement Establishing 
the WTO pursuant to the provisions of  Article XII.   For this purpose the Working Party has prepared 
the draft Decision and Protocol of Accession reproduced in the Appendix to this report,  and takes note 
of Armenia's Schedule of Specif ic Commitments on Services (doc ument ... ) and its Schedules of 
Concessions and Commitments on Agriculture and Goods (document ... )  that are attached to the Protocol of Accession.  It is proposed that these texts be approved by the General Council when it 
adopts the Report.  When the Deci sion is adopted, the Protocol of Accession w ould be open for 
acceptance by Armenia, which would become a Member thirty days after it accepts the said Protocol. The Working Party agreed, therefore, that it had co mpleted its work concerni ng the negotiations for the 
accession of Armenia to the Ag reement Establishing the WTO. 
 
[to be completed] WT/ACC/SPEC/ARM/1/Rev.4 
Page 72  
 
  
APPENDIX 
 
ACCESSION OF ARMENIA 
 
Draft Decision 
 
  The General Council,   Having regard to the results of the negotiations directed towards the accession of Armenia to the 
Marrakesh Agreement Esta blishing the World Trade Organization and having prepared a Protocol for 
the Accession of Armenia.   Decide, in accordance with Article XII of the Marrakesh Agreement Establishing the World 
Trade Organization, that Armenia may accede to the Marrakesh Agreement Establishing the World 
Trade Organization on the terms se t out in the said Protocol.  WT/ACC/SPEC/ARM/1/Rev.4 
 Page 73 
 
 
 PROTOCOL FOR THE ACCESSI ON OF ARMENIA TO THE 
MARRAKESH AGREEMENT ESTABLISHING THE WORLD TRADE ORGANIZATION 
 
DRAFT 
  The World Trade Organization (hereinafter referr ed to as the "WTO"), pursuant to the approval 
of the General Council of the WTO accorded under  Article XII of the Marrakesh Agreement 
Establishing the World Trade Organiza tion (hereinafter referred to as the "WTO Agreement"), and the 
Government of Armenia, (hereinafter referred to as "Armenia"),   Taking note of the Report of the Working Party on the Accession of Armenia to the WTO 
Agreement in document ...  (hereinafter re ferred to as the "Wor king Party Report"), 
  Having regard to the results of the negotiatio ns on the Accession of Armenia to the WTO,  
 
 Agree as follows: 
 
Part I -  General 
 
1. Upon entry into force of this Protocol, Ar menia accedes to the WTO Agreement pursuant to 
Article XII of that Agreement and thereby becomes a Member of the WTO.  2. The WTO Agreement to which Armenia accede s shall be the WTO Agreement as rectified, 
amended or otherwise modified by such legal instrume nts as may have entered into force before the date 
of entry into force of this Protocol.  This Protoc ol, which shall include the commitments referred to in 
paragraph  153 of the Working Party Report (documen t WT/ACC/ARM/1/Rev.3), shall be an integral 
part of the WTO Agreement.  
 
4. Except as otherwise provided for in the paragr aphs referred to in paragraph  153 of the Working 
Party Report, those obligations in the Multilateral  Trade Agreements annexed to the WTO Agreement 
that are to be implemented over a period of time st arting with the entry into force of that Agreement 
shall be implemented by Armenia as if  it had accepted that Agreement on the date of its entry into force. 
 WT/ACC/SPEC/ARM/1/Rev.4 
Page 74  
 
 5. Armenia may maintain a measur e inconsistent with paragraph 1 of Article II of the GATS 
provided that such a measure is recorded in the list of  Article II Exemptions annexed to this Protocol and 
meets the conditions of the Annex to the GATS on Article II Exemptions. 
 
Part II - Schedules 
 
6. The Schedules annexed to this Protocol shall become the Schedule of Concessions and 
Commitments annexed to the Genera l Agreement on Tariffs and Trade 1994 (hereinafter referred to as 
the "GATT 1994") and the Schedule of Specific Co mmitments annexed to th e General Agreement on 
Trade in Services (hereinafter referred to as "GATS") relating to Armenia.  The staging of the concessions and commitments listed in  the Schedules shall be implemented as specified in the relevant 
parts of the respective Schedules. 
 7. For the purpose of the reference in paragraph 6( a) of  Article II of the GATT 1994 to the date of 
that Agreement, the applicable date in respect of the Schedules of Con cessions and Commitments 
annexed to this Protocol shall be the date  of entry into force of this Protocol. 
 
Part III - Final Provisions 
 
8. This Protocol shall be open for acceptance , by signature or otherwise, by Armenia until ... 
 9. This Protocol shall enter into force on the thirtieth day following the day upon which it shall 
have been accepted by Armenia.  
10 This Protocol shall be deposited with the Dire ctor-General of the WTO.  The Director-General 
of the WTO shall promptly furnish a certified copy of  this Protocol and a notification of acceptance by 
Armenia  thereto pursuant to paragraph 8 to each Member of  the WTO and to Armenia. 
 
11. This Protocol shall be regist ered in accordance with the provisions of  Article 102 of the Charter 
of the United Nations.   Done at Geneva this .... day of .... one thousand nine hundred and ninety ..., in a single copy in 
the English, French and Spanish languages, each text being authentic.  WT/ACC/SPEC/ARM/1/Rev.4 
 Page 75 
 
 
 ANNEX I 
 
SCHEDULE ...  - ARMENIA 
 
Part I - Goods 
To be circulated in document ... . 
 
Part II - Services 
To be circulated in document ... . 
 
[to be completed] 
__________