RESTRICTEDWORLD TRADE
ORGANIZATIONWT/ACC/AZE/4
14 July 2000
(00-2888)
Working Party on the
Accession of AzerbaijanOriginal:  English
ACCESSION OF AZERBAIJAN
Questions and Replies
The Permanent Mission of the Republic of Azerbaijan has provided the replies reproduced
hereunder to questions submitted by Members on the Memorandum on the Foreign Trade Régime.
_______________WT/ACC/AZE/4
Page i
CONTENTS
Page
NumberQuestion
Number
I. INTRODUCTION 1 1-3
II. ECONOMY, ECONOMIC POLICIES AND FOREIGN
TRADE
2. Economic Policies
(a) Main directions of the ongoing economic policies 2 4-19
(b) Monetary and fiscal policies 12 20-26(c) Foreign exchange and payments system 16 27-30(d) Foreign and domestic investment policies 18 31
(e) Competition policies 18 32
III. FRAMEWORK FOR MAKING AND ENFORCING
POLICIES AFFECTING FOREIGN TRADE IN GOODS AND
TRADE IN SERVICES
2. Government entities responsible for making and implementing
policies affecting foreign trade20 33
3. Division of authority between central and sub-central
governments20 34-35
4. Any legislative programmes or plans to change the regulatory
régime21 36-37
6. Description of judicial, arbitral  or administrative tribunals or
procedures22 38-39
IV. POLICIES AFFECTING TRADE IN GOODS
1. Import regulation 25 40
(a) Registration requirements for engaging in importing 25 41
(b) Characteristics of national tariff 26 42
(c) Tariff quotas, tariff exemptions 27 43-45(d) Other duties and charges, specifying any charges for 
services rendered31 46-49
(f) Import licensing procedures 32 50-52
(h) Customs valuation 35 53-56(j) Pre-shipment Inspection 36 57-58
(k) Application of internal taxes in imports 37 59-60
(l) Rules of origin 38 61-62(m) Anti-dumping régime 38 63-64(n) Countervailing régime 39 65WT/ACC/AZE/4
Page ii
(o) Safeguard régime 39 66-67
2. Export regulation
(d) Export licensing procedures 40 68-70
3. Internal policies affecting foreign trade in goods
(a) Industrial policy, including subsidy policies 41 71
(b) Technical regulations and standards 41 72-90
(c) Sanitary and phytosanitary measures 50 91-94(f) Free zones 52 95-97(l) Government procurement practices 53 98-109
(m) Regulation of trade in transit 58 110
4. Policies affecting foreign trade in agricultural products
(b) Exports 59 113-114
V. TRADE-RELATED INTELLECTUAL PROPERTY RÉGIME
5. Laws, decrees, regulations and other legal acts 60 115-116
VI. TRADE-RELATED SERVICES RÉGIME1. General 63 117-1303. Market Access and National Treatment 69 131
4. Most-Favoured-Nation Treatment 69 132-135
VII. INSTITUTIONAL BASE FOR TRADE AND ECONOMIC
RELATIONS WITH THIRD COUNTRIES
2. Economic integration, customs union and free-trade area
agreements71 136-143WT/ACC/AZE/4
Page 1
I. INTRODUCTION
Question 1.  
How will Azerbaijan be able to fully apply the tr ansparency requirements prescribed in Article
GATT 1994, Article III of the GATTS and other arti cles regarding transparency in the WTO
Agreement.
Answer:
In accordance with the current legislation of the Republic of Azerbaijan, Laws of Azerbaijan,
Orders and Decrees of the President of the Republic of Azerbaijan are being published in the official
papers like "Azerbaijan" newspaper and "Collection of the legislation of the Republic of Azerbaijan".
Resolutions of Milli Mejlis of the Republic of Azerbaijan are being published in the
"Azerbaijan" newspaper and in "Information from Milli Mejlis of the Republic of Azerbaijan".
Resolutions of the Cabinet of Ministers of the Republic of Azerbaijan are being published in
the official papers like "Collection of the legislation of the Republic of Azerbaijan" and "Republic"
newspaper.  If it is necessary to provide their immediate and wide broadcast, they are being circulated
by other mass media agencies.
Normative legal acts of the central executive bodies are being published in the official paper
"Bulletin of normative acts of central executive bodies" by the corresponding executive body.
It is set by the legislation of the Republic of Azerbaijan that the normative legal acts proved
by the Milli Mejlis and corresponding executive bodies can be officially published.
Normative legal acts mentioned above are being published in as much editions as it is needed
for the wide range of citizens, by the bodies proved these acts or by the corresponding executivebodies.
Normative legal acts can also be published by any publishing houses or broadcasted by mass
media.
Question 2.  
A reasonable interval between the enactment and the implementation of laws and regulations
should be maintained.
Answer:
Laws of the Republic of Azerbaijan, Decrees of the President of the Republic of Azerbaijan
and Resolutions of the Cabinet of Ministry become effective after their promulgation date, if it is not
foreseen otherwise therein.  After the official registration, the normative legal acts of corresponding
executive bodies, normative acts of local executive bodies, local authorities and the National Bank ofthe Republic of Azerbaijan become effective after their official promulgation, if it is not foreseen
otherwise therein.  The date of the enactment of the part (section, article, paragraph) of the normative
legal act could be different from the date of the enactment of the whole normative legal act.
Question 3.  
The timetable that Azerbaijan will fully apply to the notification requirements in the WTO
Agreement should be provided as soon as possible.WT/ACC/AZE/4
Page 2
Answer:
Azerbaijan will apply to the corresponding notification requirements in the WTO Agreement
in the accession process to the WTO.  Thus, for example, appropriate works on the establishment of
the National Information Center of the Republic of Azerbaijan related to technical barriers is beingcarried out.  It is difficult to predict the exact date of its full working regime, because it requires
financial resources and specialists.
II. ECONOMY, ECONOMIC POLICIES AND FOREIGN TRADE
2. Economic Policies
(a) Main directions of the ongoing economic policies
Question 4.  
Please explain to the Working Party how you will strengthen State’s capacity to deal with
corruption.
Answer:
The anticorruption measures in the Republic of Azerbaijan are stipulated in the Decree of the
President of the Republic of Azerbaijan “On improvement of the state control system and removal ofartificial barriers in development of enterpreneurship” (7 January 1999).  The following measures are
reflected in the Decree:
- All central and local executive bodies, including legal protection bodies are charged
to cease ungrounded cases of intervention, and to provide favourable environment for
widening entrepreneurial activity;
- The office of the prosecutors, internal affairs and national security agencies are
requested to cease creating artificial barriers for business people, and to prevent
ungrounded criminal cases connected with local and foreign businesses;
- Those officials of executive bodies, which run the registration of juridical persons,
engaged with the entrepreneurial activities, and bodies, engaged with licensingprocedures are requested to cease abuse of power;
- The Ministry of Justice is charged to avoid all kinds of bureaucracy while registering
the juridical persons, and to prevent all illegal requests against entrepreneurs and
illegal rejection cases;
- The Cabinet of Ministers is charged to analyse activities of the central executive
bodies, engaged with licensing to remove the obstacles;
- The controlling and auditing structures at the ministries, committees and other central
executive bodies of the Republic of Azerbaijan are to be liquidated;
- Activity of the  legal protection bodies in economy is to be limited to the investigation
of criminal cases and the respective controlling structures are to be liquidated;
- “The Control Book“ is to be applied to record results of examinations and audits that
are carried out at enterprises and organisations regardless to their type of ownership;
- According to the legislation of the Republic of Azerbaijan leading officials of the
state bodies mentioned in this Decree are to take appropriate measures against abuse
of power and against other law violations made by the personnel of these bodies.
Question 5.  
Please explain to the Working Party how reform of the banking sector will be expanded.WT/ACC/AZE/4
Page 3
Answer:
The national bank system in Azerbaijan has been forming since 1992 after approval of the
laws “On the National Bank of the Republic of Azerbaijan” and “On banks and banking activity in the
Republic of Azerbaijan”.  Considering the above-mentioned laws with international financial-creditinstitutions, they had been renewed in June 1996 to bring them in conformity with the international
standards.
As a result of the adopted bank legislation, two-level banking system has been established; the
first level includes the National Bank, the second  level includes the private commercial banks and
non-bank credit organisations.
Reforming both the state-owned banks and private banks in the republic has always been
under surveillance.  The reforms of the private banks have been mainly directed to increase theirequity capital, while the reforms of the state-ow ned banks have been aimed to privatise them.
Question 6.  
Please explain in detail the “newly establish marketing principles“ and financial relations
between the oil sector and the state that will operate in the market energy sector.
Answer:
Relations (including financial relations) between the State Oil Company of the Republic of
Azerbaijan and the state are determined by the legislation of the Republic of Azerbaijan  (the laws
“On Enterprises“ (1 July 1994), “On tax on profits of enterprises and organisations“
(24 December 1996), etc.), and this legislation provides free activity for enterprises in exploring,processing and selling of oil and gas.  Considering that oil field is a natural monopoly, domestic
wholesale and retail prices and tariffs of oil products, crude oil and gas are regulated by the state.
Besides, the State Oil Fund of the Republic of Azerbaijan has been established to collect
profits obtained from a joint exploitation of the country’s oil fields with the foreign companies,
financial resources coming from selling oil, other incomes and their effective governing, as well as to
apply these resources to develop priority fields, and to conduct projects important for social-economic
development.
Question 7.  
Are there restrictions on the ownership of la nd by foreigners?  If there are any restrictions,
please provide details.
Answer:
The “Land Code“ (Article 48 (3)) of the Republic of Azerbaijan stipulates that non-citizens
and persons without citizenship, foreign juridical persons, international unions and organisations, as
well as foreign countries can obtain plot of land only by applying the right of tenancy.  According to
Article 49 property rights passed as a result of inheritance, presenting and hypothecate for foreign
juridical and physical persons is to be alienated in one year according to the legislative procedures ofthe Republic of Azerbaijan.
According to the Law “On Property in the Republic of Azerbaijan“ (Article 4 (3)) properties
of foreign states, of their juridical persons and citizens, as well as properties of internationalWT/ACC/AZE/4
Page 4
organizations are permissible within the determined limits stipulated by the legislation of the Republic
of Azerbaijan.
Question 8.  
Please provide details to the Working Party about price control policies.Answer:
The basis of state price policies and pricing policy is the state regulation of prices and tariffs
of the services provided by the natural monopolies.  According to the Law of the Republic of
Azerbaijan “On Natural Monopolies“ (15 December 1998) the followings are the spheres of activity
of natural monopolies:
- Transportation of crude oil and oil products through the main pipelines;
- Services on transportation of natural gas through the pipelines, its storage and
distribution;
- Services on transmission and distribution of electric and thermal power;
- Services on operation of main and branch railroads, road terminals and structures,
traffic control and safety, railroad terminals and passenger stations;
- Airport services, operation of airports, runways and structures, aviation and air-
navigation services for aircraft;
- Operation of roads, tunnels and underground stations, services on traffic control and
safety;
- Services to sea-ports, operation of port terminals, cargo transportation and safety;
- Services on electric and post communications in public use, operation and control
over transmitters and receivers of radio and TV-stations, HV units;
- Operation of main facilities on water treatment, main pipelines, systems of water
pipelines and pressure-regulation stations thereon;
- Aeration, operation of plants of mechanical cleaning, pumping units, main and
rainfall run-offs in utility systems, operation of sewage lines;
- Operation of water reservoirs, canals, headers, main pipelines and dams related to
irrigation and melioration systems;
- Services on heat-supply.
Whenever competitors to existing economic subjects appear in the spheres of activity listed
above, subjects carrying out activity in conditions of competition shall not be regarded the subjects of
natural monopoly and their activity is no longer controlled by this Law.
Control policy over prices (tariffs) of products related to activities of natural monopolies is
formed according to the requirements of this Law and within the frame of the state regulation controls
price elements, i.e. costs and benefits, in order to get the prices right from economic standpoint.
Besides, the draft law “On rules and formation of prices and tariffs of goods supplied by Natural
Monopolies” is under governmental consideration.
Question 9.  
Please, provide a list to the Working Party of those enterprises, which have been privatised.
Please, provide a timetable for those industries which are in the process of, or will be,
privatised.WT/ACC/AZE/4
Page 5
Answer:
21,864 small state enterprises and objects had been privatised till 1 August 1999.  There were
9,434 entities and enterprises of everyday services, 2,231 trading and catering enterprises, 462 petrol
stations, 574 bread trade and bread-baking entities (equipment), 636 industrial enterprises and
equipment, 324 construction enterprises and equipment, 6,207 transportation means, 104 constructioncompleted entities and construction ceased entities, 178 chemistries and chemistry equipment, 370
leased entities, 1,285 non-housing objects, 59 enterprises belong to other fields.
At least 70 per cent of established 954 joint-stock companies on basis of middle and large
state enterprises had been sold at cheque and cas h auctions till 1 August 1999.  According to their
activity, they were divided into agricultural, industrial, construction, transportation, trade, service and
other enterprises.
Privatization of small state enterprises has been started since 1996, privatization of created
joint-stock companies on basis of medium and large state enterprises has been started in May 1997.
Timetable of privatization in certain sectors was not considered in “The State Program on
privatization of state property in the Republic of Azerbaijan in 1995-1998”.  This timetable was
mentioned in the draft “State Program on privatization of state property in the Republic of Azerbaijan
in 2000-2003”, prepared by the Ministry on State Property of the Republic of Azerbaijan.  The draftprogram has not adopted yet.
Question 10.  
Are there any plans to privatise the “natural monopolies” in the following industries: electrical
power, heating energy, gas, oil and gas transpor tation, railway transport, telephone and mail
communication services, public utilities, housing rent.
Answer:
According to the “State Program on privatization of state property in the Republic of
Azerbaijan in 2000-2003” prepared by the Ministry  on State Property of the Republic of Azerbaijan
enterprises of a national importance, i.e. gas enterprises and units (including offices administratingthem), urban and regional engineering-infrastructure units (including electricity, heating, gas, water,
sewage and city lights services) and enterprises,  which are exploiting, servicing, and maintaining
them are to be privatised by the Degree of the President of the Republic of Azerbaijan .
Question 11.  
Please provide a list to the Working Party of those enterprises which fall under the five
categories described on page 7 of WT/ACC/AZE/2, paying special detail to those industries
categories as: “prohibited to privatise”; “privatised by President’s Decree”, “privatised bydecision of the Cabinet”.
Answer:
According to “The State Program on privatization of state property in the Republic of
Azerbaijan in 1995-1998” state-owned enterprises and objects are classified for 5 categories asfollows:
I. Enterprises and objects prohibited for privatization.
II. Enterprises and objects privatised by decision of the President of the Republic of
Azerbaijan.WT/ACC/AZE/4
Page 6
III. Enterprises and objects privatised by decision of the Cabinet of Ministers of the
Republic of Azerbaijan.
IV. Enterprises and objects privatised by decision of the Ministry on State Property after
agreement with local executive power bodies.
V. Enterprises and objects liable to obligatory privatization.
I. Enterprises and objects prohibited for privatization
1. Subsurface mineral resources, forests, water resources, air space, resources of continental
shelf, territorial waters and resources of marine economic zone of the Republic of Azerbaijan
and also right for installation and use of satellite communication facilities on geo-stationary
orbits.
2. Protected and specially used nature territories.
3. Objects of history and cultural inheritance of the Azerbaijani people (historical and natural
memorials, historical places, science and techni que objects, including values kept in state
museums, Archives and libraries, buildings and areas of their locations).
4. Budgetary funds, national hard currency reserves, pension fund and state extrabudgetary
funds of the Republic of Azerbaijan, money re sources of National Banks, treasury and also
golden reserves of the Republic of Azerbaijan.
5. National Bank of the Republic of Azerbaijan, enterprises, companies and organisations
providing emission of money, state treasu ry notes, bonds and other state securities.
6. Permanent and reserve property under control of Military Forces and also troops of the
Ministry of National Security and Ministry of Internal Affairs of the Republic of Azerbaijan.
7. Enterprises and objects producing and repairing any systems and parts of weapons,
ammunition, explosive substances and pyrotechnics, and also scientific-research and
experimental-design organisations operating in said areas (said areas and objects may be
privatised by decision of the President of the Republic of Azerbaijan and agreement of
National Assembly of the Republic of Azerbaijan in accordance with state program of
conversion).
8. Objects of civil defence and mobilisation agencies.
9. All types of educational institutions belonging to the state, irrespective on the source of
financing (higher institutions and vocational schools may be privatised by decision of the
President of the Republic of Azerbaijan and agreement of National Assembly of the Republic
of Azerbaijan).
10. All enterprises, companies and organisations financed from the budget.
11. Enterprises and agencies of geology, cartography, geodesy, hydrometeorology, environmental
control and nature protections
12. Sanitary-epidemiological, veterinary enterprises, companies and agencies dealing with
protection of forests and vegetation, state inspection on quarantine of plants, inspection body
on technical control.
13. Patent service bodies, organisations of sta ndardisation and metrology, and also machine-
testing stations.
14. Objects and structures of reclamation and water economy services of state value, and
enterprises and objects engaged in their operation.
15. Automobile roads and railroads, bridges and tunnels of state value, and also servicing
enterprises and organisations.
16. Enterprises producing narcotic and poisonous substances, and also enterprises sowing,
growing, processing and storing them.
17. Property of the fleet that is involved in trai ning, hydrographic, stead, rescue operations and
cleaning areas where there is oil spillage, inspection body of navigation.
18. State companies on pedigree stockbreeding and selected seeds production, selection-hybride
centres, state inspection bodies on seed production, experimental stations testing grades
(quality) and agricultural stations.WT/ACC/AZE/4
Page 7
19. Enterprises, objects and equipment engaged in bringing solid industrial and domestic wastes,
liquid and solid radioactive wastes, burial sites for animals.
20. Medical treatment and corrective-labour enterprises and objects.
21. Baku underground.
22. Cemeteries and crematoriums.23. Organisations and agencies involved in social protection of people, children's homes, babies'
homes, homes of aged people, hospitals and sanatorium for disabled people, children and old
people; organisations and agencies on medical treatment and prophylactics of psychiatric,
psychoneurological, infectious, oncology, narcotic and skin-venereal diseases, people with
AIDS.
II. Enterprises and objects privatised by decision of the President of the Republic of Azerbaijan
Decisions on these applications will be taken by the President of the Republic of Azerbaijan
on presentation by the Cabinet of Ministers.
1. Objects of state property outside the territory of the Republic of Azerbaijan.
2. Enterprises and objects of gas economy of national significance and organisations servicing
them.
3. Enterprises and companies servicing objects of civil defence and mobilisation agencies.4. Special grain enterprises, refrigerators, warehouses providing permanent keeping state
reserves and storing mobilisation reserves.
5. Enterprises and objects of extractive industry (except those extracting local raw materials).
6. Enterprises and companies of fuel-power complex (except construction directorates and
enterprises of construction industry), includin g enterprises of electric power producing and
processing electric power, oil, natural gas, enterprises engaged in oil export and also oil bases
of national significance.
7. Chemical, petrochemical and biochemical enterprises.
8. Enterprises of communication, state information and telegraph agencies.
9. Self-supporting enterprises and organisations of the Academy of Sciences and Ministry of
Health of the Republic of Azerbaijan.
10. Enterprises, companies and objects of social-cultural sphere which belong to the state.
11. TV and radio broadcasting centres.
12. Enterprises of air, sea and river transport.
13. Engineering-municipal economy objects of cities  and districts (including electric power, heat
supply objects, gas supply facilities, water supply and sewage systems, city illumination) and
also enterprises operating, servicing and maintaining said objects.
14. Structure of water economy and reclamation system, enterprises operating them and also
specialised companies and organisations engaged in their construction.
15. Ports, port structures and objects.
16. Enterprises and objects of ferrous and non-ferrous metallurgy, machine-bulging and
metalworking industry, including secondary metal working.
17. Printing industry and publishing houses.
18. Plants producing sparkling wines, wine and brandy, ginneries, tobacco-processing
(fermentation) plants, tea-processing and tea-packaging plants, fisheries.
19. Commercial banks and financial institutions and also joint ventures with state share in the
partnership fund.
20. State sanitary-recreation companies and organisations, hotels and related organisations and
companies.WT/ACC/AZE/4
Page 8
III. Enterprises and objects privatised by decision of the Cabinet of Ministers of the Republic of
Azerbaijan
Decisions about privatization of enterprises and objects included into this category are taken
by the Cabinet of Ministers of the Republic of Azerbaijan after submitting them by the Ministry on
State Property.
1. All enterprises and objects of state economy dominating in the market of commodities, works
and services.
2. Enterprises where average number of employees exceeds 1,500 persons and balance cost of
main funds on 1 January, 1992 was more than 15 thousand roubles.
3. Construction enterprises and organisations of state significance related between themselves
technologically, enterprises and organisations producing building materials.
4. Enterprises maintaining, repairing and servicing public roads.
5. Enterprises supplying and selling oil and oil products.
6. Enterprises on processing wool, fur and leather and also carpet weaving and textile mills.
7. Self-supporting scientific-research, design, design-experimental companies (according to their
meaning).
8. Enterprises and objects of medicine industry (including enterprise and objects of
pharmaceutical industry and those producing medical-biological preparations).
9. Enterprises and objects producing baby-food.
10. Meatpacking factories.
11. Enterprises of people's (folk) art.
12. Bases (warehouses) of chemist's shops, bases of medicine equipment.
IV. Enterprises and objects privatised by decisi on of the Ministry on State Property, on agreement
with local bodies of Executive Power
1. Enterprises and objects of city public transport, except taxi companies and enterprises
engaged in their repair.
2. Public baths and laundries.
3. Enterprises, companies and organisations providing funeral services.
4. Plants and units on processing garbage (wastes).
V. Enterprises and objects liable to obligatory privatization upon decision of the Ministry on
State Property
1. Enterprises of wholesale and retail trade (including enterprises and objects selling industrial-
technical products).
2. Enterprises and objects of public catering and public services (including objects of retail
trade, catering and public services of specific subordinance).
3. Construction and repair-construction companies, enterprises and objects producing building
materials, plants producing reinforced concrete articles and structures and, bricks, industrial
works.
4. Enterprises and objects of processing industry and production infrastructure, poultry plants
(except plants growing pure-strain animals, etc.).
5. Enterprises servicing agriculture and supplying it with industrial-technical products.6. Enterprises of light industry, enterprises producing raw silk and silk articles.
7. Enterprises of food industry, creameries, cheese dairy, canneries, fish canneries,
confectioneries.
8. Enterprises and objects of woodworking and wood pulp and paper industry, including those
fabricating tare and packaging.
9. Enterprises producing breads and bread products mixed feed and food concentrates.WT/ACC/AZE/4
Page 9
10. Objects with “frozen” construction and objects where normative (project) construction term
has already expired, objects of uncompleted construction.
11. The property of enterprises liquidated without identification of legal heir.
12. Enterprises of automobile transport.
13. Pawnshops.14. Tourist organisations.
15. Foreign trade companies and enterprises on wholesale trade with respect to state equipment.
16. Pharmacies (with obligatory licensing of their activity).
Question 12.  
Please report to the Working Party about th e circumstances under which foreigners can
participate in the privatization process.
Answer:
The participation of foreign investors in the privatization process is allowed by "The State
Program on privatization of state property in 1995-1998".
The followings are recognised foreign investors in privatization:
- foreign legal entities;
- joint venture with share of foreign investor in the partnership capital over 25 per cent
(which allows to put restrictions on taking necessary decisions at general meetings of
shareholders);
- foreign physical persons;
- persons without citizenship.
Foreign investors can participate in the privatization of joint stock companies established on
the basis of medium and large state-owned enterprises, through state privatization options.  State
privatization options allow foreign investors to purchase privatization checks (each option allows to
purchase one privatization check) and stocks of the privatised enterprise.
Privatization shares of foreign investors and stocks of enterprise privatised at the first and
second markets can be procured after submission of the state privatization options for writing them
off.  Term of circulation of an option is 3 (three) years.
When concluding deals with foreign investors, the Ministry on State Property acts as the only
seller of state property.
Participation of foreign investors in privatization of small enterprises is allowed only on
consent of working collectives (authorised person) of these enterprises.  Foreign investor can not act
as authorised person in privatization (in particular, in privatization of small enterprises).
Decisions about possibility for foreign investors to participate in privatization of enterprises
and objects privatised by decision of the President of the Republic of Azerbaijan can be undertaken by
the President of the Republic of Azerbaijan, after presentation by the Ministry on State Property.
Mutual settlements with foreign investors (residents and non-residents) shall be done by
means of the national currency of the Republic of Azerbaijan — Manat (AZM), or by means ofprivatization shares (cheques) through presenting options for writing them off.WT/ACC/AZE/4
Page 10
Question 13.  
Please give more details to the Working Party on regional control of finances. (eg. What taxes, if
any, are levied by regional authorities? How are these resources collected? Are there any
product-specific taxes levied by regional authorities?)
Answer:
According to paragraph 4 of section 1 of Ar ticle 144 of the Constitution of the Republic of
Azerbaijan and the Law of the Republic of Azerbaijan “On the bases of financing of municipalities”
municipalities are authorised to impose local taxes.  At present all taxes are determined by the law of
the Republic of Azerbaijan and are applied entirely on all the territory of the Republic of Azerbaijan.
Question 14.  
Can Azerbaijan provide further information on the development of the appropriate legal and
institutional structure for its oil industry?
Answer:
Since 1993 the legislative body of the Republic of Azerbaijan Milli Majlis has adopted six
laws in energy sector.  These are "On utilizat ion of energy resources" (17 November 1996), "On
Electro-energy" (3 April 1998), "On Energy" (24 November 1998), "On gas supply" (30 June 1998),
"On the subsurface mineral resources" (13 February 1998), “On electric and heating stations”
(28 December 1999).
Relationships between the State Oil Company of the Republic of Azerbaijan and the state are
regulated by the legislative acts "On Enterprises"  (1 July 1994), "On income taxes from enterprises
and organisations" (24 December 1996), and etc. laws.  In oil sector this legislation provides a free
activity of companies involved in extracting, processing and selling of oil and gas.  Considering the
fact that oil sector is a natural monopoly, the government regulates the wholesale and retail prices andtariffs for oil products, gas and crude oil within the country.
In addition, the State Oil Fund of the Republic of Azerbaijan was established in order to
provide collection, rational administration of currency resources and other incomes obtained from
selling of oil received from a mutual co-operation wi th foreign companies, as well as to direct these
resources to develop priority industries and undertake the projects important from social-economic
standpoint.
Question 15.  
What are the reasons for Azerbaijan preventing its State Owned Energy Enterprises from
participating in commercial activities?
Answer:
As well as all advanced countries, the Republic of Azerbaijan has adopted the laws stipulating
the existence of three types of ownership: state, private and joint.  Any juridical person, therefore, can
participate in commercial activities in energy sector of the Republic of Azerbaijan.
Question 16.  
Can Azerbaijan provide more information on the proposed establishment of new market energy
sector?WT/ACC/AZE/4
Page 11
Answer:
Both liberalisation of prices for energy products and integration into the world prices created
an environment for the establishment of the en ergy market in Azerbaijan.  The energy market
complying with the world regulations and rules exists in Azerbaijan to date.  We inform you that thecontracts for exploration, operation, exploitation and production sharing of 19 oil fields have been
signed until the 1 June 1999 between foreign companies and the Azerbaijan State Oil Company.
Moreover, the joint ventures to exploit 5 oil shore fields at the second working stage have been
established in Azerbaijan with the oil companies from Germany, England, the United States, and
Turkey.
Question 17.  
Azerbaijan indicates that it has a strategic objective to establish a market based agricultural
sector.  Can Azerbaijan provide further information on the programs it has in place or plans to
introduce to achieve this objective?
Answer:
During last years the following laws have been adopted to provide normal functioning of
agrarian sector in a transition to a market economy: "On essentials for the agrarian reforms"
(18 February 95), “On reform of collective farms and state-owned households” (18 February 95), “On
land reforms” (16 July 1996), “On peasantry (farm er) household” (8 April 1992), “On entrepreneur
activity” (15 December 1992), “On deposit” (3 July 1998), “On rent” (30 April 1992), “On co-
operation” (7 February 1996), the Land Code of the Republic of Azerbaijan, etc.  "The state programon accelerating of the agrarian reforms and support for enterpreneurship in the agriculture in 1999-
2000 in the Republic of Azerbaijan" was approved by the Decree of the President of the Republic of
Azerbaijan (9 November 1999).  This program is intended to complete the privatization process in the
agrarian sector, complete the land reforms, accel erate the reforms in melioration and water systems,
support development of enterpreneurship in the agrarian sector, reform the management system,promote to a social development in rural areas, provide the agrarian sector with scientific, legal and
personnel training.  In addition, the following programs aimed at completing the second stage of the
agrarian reforms are being prepared at present:
- The program on Agrarian Policy;
- The program on Food Safety.
Question 18.  
When does Azerbaijan expect to complete its privatization program?
Answer:
The main document that regulates the privatization process in Azerbaijan is “The State
Program on privatization of the state property in the Republic of Azerbaijan in 1995-1998”.  In
accordance with this Program the majority of the st ate-owned small, medium-sized enterprises and a
number of large enterprises have been already privatised, and despite the completion of the duration
of this Program, the privatization process is still proceeded.  In "The State Program on privatization of
the state property in the Republic of Azerbaijan in 2000-2003" prepared by the Ministry on StateProperty along with the privatization of small, me dium and large state owned enterprises, the ways
and manners of denationalisation of strategically important enterprises are also reflected.WT/ACC/AZE/4
Page 12
Question 19.  
Can Azerbaijan explain in more detail what measures it undertakes to attract foreign
investment into the energy sector?
Answer:
As it was shown in “The Memorandum on Foreign Trade Regime of the Republic of
Azerbaijan” submitted to the WTO the legislative body of the Republic of Azerbaijan (Milli Mejlis)
had adopted six laws to establish transparent relations between the state and the energy sector since
1993.  They are the followings: “On utilizati on of energy resources” (17 November 1996), “On
Electro-energy” (3 April 1998), “On power” (24 November 1998), “On gas supply” (30 June 1998),
“On the subsurface mineral resources” (13 February 1998), “On electric and heating stations”
(28 December 1999).
The attractive environment for foreign investments has been created in the energy sector by
the adopted laws connected to this sector, by the Laws “On protection of foreign investments”
(15 January 1992) and “On investment activity” (13 January 1995).  The contracts concluded for
exploration, operation, exploitation and production sharing of 19 oil fields are the examples of this
process.  Moreover, the joint ventures to exploit five oil shore fields at the second working stage havebeen established in Azerbaijan with the oil companies from Germany, Great Britain, the United
States, and Turkey.  At present negotiations on pr oduction and sale of electric energy, extraction and
processing of gas are being conducted with a number of foreign investors.
(b) Monetary and fiscal policies
Corporate Income Tax and Taxes on other Sources of IncomeQuestion 20.  
Could Azerbaijan provide more information on the 6 percent freight tax?  How does this tax
impact on imported goods and exported goods?  Are imports and exports treated equally
compared to domestic produce?  For imported goods, how does the freight tax relate to the
customs tariff?
Answer:
The 6 per cent freight tax is levied according to the Law of the Republic of Azerbaijan “On
profit tax from enterprises and organizations” (24 December 1996).  The 6 per cent freight tax is
imposed on freight profits obtained by foreign legal persons, which are not established in Azerbaijan
and whose main business activities are outside Azerbaijan and have no permanent representation in
the Republic of Azerbaijan.
According to the existing legislation freight expenses together with customs tariffs and duties
are added to a price of exported and imported goods.  The tax applies to freight services regardless of
the origin of the goods.
Value Added Tax
Question 21.  
Please, provide details to the Working Party on  the exceptions to “foreign trade operations”,
and a complete list of VAT-free imported good s and the legislation governing these VAT-free
imported goods.WT/ACC/AZE/4
Page 13
Answer:
According to the Law of the Republic of Azerbaijan “On Value Added Tax”
(31 December 1991), both goods (works, services) expo rted from the CIS countries and goods (works,
services) exported to those CIS countries which apply VAT for imported from the Republic of
Azerbaijan are imposed VAT at a rate of 0 per cent.
According to paragraph 2 of Resolution 61 of the Cabinet of Ministers of the Republic of
Azerbaijan (16 June 1997) “On the list of VAT-ex empt goods produced outside the territory of the
CIS and imported to the territory of the Republic of Azerbaijan”, the following goods are exempt
from VAT:
- seeds, fertiliser, feed, pedigree cattle, medicinal preparations, medicines used in
veterinary science, biological preparations and veterinary equipment for agriculture;
- wrapped children’s food, syringes, pharmacology products;
- goods and property officially used by diplomatic representatives and the same kind of
organisations; and also by the diplomatic and administrative personnel, and goods
and property privately used by their family members;
- humanitarian help brought to the Republic of Azerbaijan by the humanitarian
organisations which are officially registered on the territory of Azerbaijan, and also
by the legal and natural persons in agreement with the Republican Commission on
International Humanitarian Help with the purpose of disinterestedly being spread;
- goods, disinterestedly brought as the technical help by the International organisations;
- different technical equipment (except auto-transport facilities) for disability
precautions, its treatment and also raw materials and finished products for their
production;
- goods brought with the purpose of being passed to the state property on the base of
confiscation, no owner and also on the right of inheritance;
- property brought as the deposit of foreign investor into the fund of the joint-stock
company or property brought in order to create the company which totally belongs to
foreign investor;
- goods, temporarily brought to the territory of the Republic of Azerbaijan, and
appointed to be sent to the country it is brought to with no changes during the period
set by the sending conditions (in case if the guarantee on returning the  goods to the
country it is brought to is given to the customs or if the VAT is paid, the amount of
the paid VAT will be returned to the payers when the goods are taken out of theterritory of the Republic of Azerbaijan);
- transit goods (under customs control);
- goods brought for duty-free trade shops;
- property brought to Azerbaijan Republic by foreigners for their own needs which
work in the companies with foreign investment;
- payment means as currency, money, banknotes (except numismatics usage), official
state document forms, citizen passports and also securities brought on the base of the
confirmation document given by the Ministry of Finance or National Bank;
- goods temporarily brought to the territory of the Republic of Azerbaijan with the aim
of being exported again or treated (in case if the bank guarantee on the export ofgoods after being treated to the third count ry without changing is passed to the
Customs or in case if VAT is paid. When the same goods are taken out of the territory
of the Republic of Azerbaijan, the paid VAT amount returns to the payers).
- special imported guard-patrol facilities in order to provide transport safety.
Besides, according to the same Resolution, the following list of VAT-exempt goods produced
outside the CIS countries and imported to territory of the Republic of Azerbaijan was approved:WT/ACC/AZE/4
Page 14
Codes of goods related to foreign
economic activity according to their
nomenclatureName of product
Group 84 Nuclear r eactors, boilers, equipment and mechanical devices, and
parts thereof, except the following positions - 841451900;841510000; 841581900; 841720; 841810900; 841821; 841829000;841830910; 841830990; 841840910; 841840990; 841850;
841891000; 842211000; 842310100; 842381500; 8450; 845210;
8469; 8470; 847110; 847120000; 847120600; 847191000-847191900; 847199; 8472; 8476
Group 85 Electric machinery and equipment, and parts thereof, except the
following positions - 850710910; 850810; 8509; 8510; 8511; 8512;8516; 851710-851720000; 851781100; 8518; 8519; 8520; 8521;8522; 8523; 8524; 852719000; 852721; 852731; 852732; 852739;
85281000-852810690; 852810730-852810980; 852820000;
852820200; 852820730-852820990; 852910200-852910700; 8539
Group 86 Railway locomotives and coaches, trams, their parts and accessories,
road installations for railway and tram networks
Group 87 Land (except railway and tram facilities) transportation vehicles
except the following positions - 8702; 8703; 8711; 8712; 8714
Group 88 Aircraft equipment, sp acecraft equipment, and parts thereof
Group 89 Ships, boats and other floating structures, except the position – 8903
It is worth noting that the Tax Code of the Republic of Azerbaijan is under approval at
present.
Question 22.  
Can Azerbaijan provide more information on the manner in which VAT is applied to imported
goods?
Answer:
While crossing the border of the Republic of Azerbaijan VAT is levied by the customs
authorities in a certain order prescribed in the legislation from imported goods produced in the
countries outside the CIS, and from imported goods (works and services) produced in the CIS
countries, which apply VAT to products exported from the Republic of Azerbaijan.  VAT is also
levied from goods produced in the CIS countries, but imported from other countries.
When calculating VAT for goods imported to the territory of the Republic of Azerbaijan and
produced outside the CIS, as well as for goods produced in the CIS, but imported from other
countries, a sum of customs value and the customs tariff, and the excise tax, if goods are subject forexcise tax, is taken as a base.
Question 23.  
Does Azerbaijan have a VAT rebate system for exported goods?
Answer:
According to the Law of the Republic of Azerbaijan “On Value Added Tax” (31/12/91), both
goods (works, services) exported from the CIS count ries and goods (works, services) exported to
those CIS countries which apply VAT for importe d from the Republic of Azerbaijan are imposed
VAT at a rate of 0 per cent.
Excise taxesWT/ACC/AZE/4
Page 15
Question 24.  
Can Azerbaijan advise whether the rates of excise  and the methods of excise collection are the
same for imported products and domestic produce?
Answer:
Rates of excise tax applied to imported goods differ from the rates of excise tax applied to the
same locally produced goods.  Calculation of amount of excise tax for imported products, which are
subject to excise tax, is the same as for domestic products.
Question 25.  
In the rate column a number of goods have 2 rates of excise specified.  What does this mean?
Answer:
It is worth noting that there are new rates for excise tax listed in the tables below.
Table 1.  The rates of excise for products, subject to excise tax, that produced
outside the CIS countries
The name of products subject to excise tax Rates, %
Automobiles, older than one year from the date of
production, imported from the countries other thanthe CIS, with no concern to declaration date, and to
the country of origin15
Vodka 65
Drinkable alcohol 90
Cognac 65
Champagne 45
Strong drinks 40
All kinds of wines 40
Liquor 65
Beer 40
All kinds of tobacco products 50
Table 2.  The oil products subject to excise tax with no concern to country of origin
and importing territory
The name of products subject to excise tax Rates, %
Aircraft petrol B-92, B-91 65.49
Gasoline AU-95,AU-98 65.03
Gasoline AU-92, AU-93 65.23
Gasoline AU-72, AU-76 64.76
Diesel fuel 26.4
Reactive engine fuel 0
Kerosene 33.45
The products listed in “The Memorandum on Foreign Trade Regime of the Republic of
Azerbaijan” submitted to the WTO are not levied by two rates of excise taxes.  Simply, there shouldhave been a point between the numbers instead of a comma.WT/ACC/AZE/4
Page 16
Question 26.  
Are excise duties applied on a uniform basis to both locally produced and imported goods?
Please also specify how the classification of cigarettes for the purposes of excise operates.
Answer:
Rates of excise tax applied to imported goods differ from the rates of excise tax applied to the
same locally produced goods.  Calculation of amount of excise tax for imported products, which are
subject to excise tax, is the same as for domestic products.
The classification of cigarettes for the purpose of excise depends on the quality of goods and
is applied according to the former GOST system.
(c) Foreign exchange and payments system
Question 27.  
Are there any limitations or restrictions on foreign accounts for businesses or private citizens?
Answer:
There are no restrictions on opening of any kind of foreign accounts in authorised banks of
the Republic of Azerbaijan for resident and non-resident legal and natural persons in the Republic of
Azerbaijan.
According to the Law No. 910 of the Republic of Azerbaijan (21 October 1994) on “Currency
regulation”, foreign currency transactions are di vided into the current currency transactions and
capital movement-related currency transactions.  It can be said that at the moment the current
currency transactions are completely liberalised and according to the “Regulations on the regime of
foreign currency accounts in the authorised banks of the Republic of Azerbaijan of the residents andnon-residents of the Republic of Azerbaijan” No. 98 (25 July 1997) of the National Bank of the
Republic of Azerbaijan, there are no restrictions on international transfers of foreign currency through
current transactions and on their amounts made by resident and non-resident legal and natural persons
(including incoming resources to foreign currency accounts).
However, there are certain indicative limits for paying in advance and other transactions.
These limits can be increased according to the individual agreement of the National Bank of theRepublic of Azerbaijan, if there is no doubt that the transactions are made according to the existing
legislation.
At present, currency transactions on capital movement are limited and the National Bank of
the Republic of Azerbaijan individually considers each case.
Question 28.  
Under which circumstances can foreign accounts be  frozen? Is it a judicial order necessary? If
yes, please describe the conditions for an appeal against such an order.WT/ACC/AZE/4
Page 17
Answer:
Accounts of legal persons-residents in non-resident (foreign) banks can only be opened with
the permission of the National Bank of the Republic of Azerbaijan.  As a rule, such permissions
issued by the National Bank of the Republic of Azerbaijan are valid for over three years.
Such permissions are not required if natural persons open the accounts in non-resident
(foreign) banks.
There are no limitations on the quantity of accounts of legal and natural persons.
According to Article 36 of the Law of the Republic of Azerbaijan “On Banks and banking
activities in the Republic of Azerbaijan” (14/06/96), money and other resources of legal and natural
persons in credit organisations can be arrested only by judicial order in accordance with the existing
legislation.  Money and other resources of the legal and natural persons in credit organisations can
only be requested on the basis of executive documents according to the legislation.  Money and otherresources can be confiscated on the basis of the enforced court verdict.
Besides, according to the legislation, the state tax services, customs bodies and social
protection fund are authorised to stop the transactions at the banking accounts of the legal and natural
persons.
According to the Civil Procedure Code of the Republic of Azerbaijan, complaints as an
appeal can be made against orders of all the courts of the Republic of Azerbaijan, Court of Baku city
and Supreme Court of Nakhchivan Autonomous Republic; orders, decisions and verdicts which are in
power can be re-heard again under the court control on the basis of the protests made by the
appropriate officials.  Besides, enforced orders, decisions and verdicts for recent cases can be
reconsidered.
According to the Economic Procedure Code of the Republic of Azerbaijan, the legality and
validity of the order of Economy Court can be verified if one of the sides presents the application, or
appropriate officials can make protests against the order.  Orders, decisions and verdicts of all
economic courts can be re-heard again with a purpose of a control.  Besides, in accordance with the
Code orders, decisions and verdicts of economic courts for recent cases can be reconsidered.
Question 29.  
The Working Party notes that Azerbaijan states that, in the case of “domestic” investment, any
profits gained may be reinvested in local currency  held in Azerbaijan or converted into foreign
currency transferred withou t restrictions.  Is this actually a reference to foreign investment
rather than domestic investment (i.e. invest ment made by foreigners into Azerbaijan)?
Answer:
According to the Law of the Republic of Azerbaijan “On protection of foreign investments”
(15 January 1992) investment-related profits can be repatriated without restrictions.  In accordance
with the existing currency regime both investment s and investment-related profits can be converted
into the local and foreign currency without any restrictions and reinvested again.
Question 30.  
Please confirm that there are no restrictions on foreign investment, including real estate.WT/ACC/AZE/4
Page 18
Answer:
According to the Law of the Republic of Azerbaijan “On protection of foreign investments“
(15 January 1992) foreign investors can put investments to the territory of the Republic of Azerbaijan
by certain ways, i.e.:
- participating in enterprises, organisations established mutually on the sharing basis
with juridical persons and citizens of the Republic of Azerbaijan;
- establishing enterprises wholly-owned by foreign investors;
- purchasing enterprises, proprietary complexes, buildings, structures, shares of
enterprises, stocks, bonds, and other securities, as well as other properties which
according to legislation of the Republic of Azerbaijan might be owned by foreign
investors;
- acquiring rights for use or lease of land and other natural resources, as well as other
rights for properties.
- conclusion of agreements with legal entities and citizens of the Republic of
Azerbaijan providing for other forms of realisation of foreign investments.
The legislative acts of the Republic of Azerbaijan can identify territories where foreign-
owned enterprises can be restricted or prohibited for defence and national security reasons.
(d) Foreign and domestic investment policies
Question 31.  
Please clarify your statement on pg.12 of WT/ACC/AZE/2: “Foreign investment is up to
68.8 per cent of the total“. Does this refer to the foreign proportion of total investment in
Azerbaijan, or does it refer to a ceiling for foreign investment?
Answer:
The statement on pg.12 of WT/ACC/AZE/2, “Foreign investment is up to 68.8 per cent of the
total“, refers to foreign proportion of total investment during the period of 1993-1998 in Azerbaijan.
There is no ceiling on the amount of foreign investment and the official policy of the government is toattract foreign investment.
(e) Competition policies
Question 32.  
Azerbaijan indicates there it has a number of laws on competition policy in relation to
monopolistic activity and natural monopolies.  Can Azerbaijan describe the nature of its
competition laws, provide more information on how these laws are applied in practice, and
outline its plans for future activity in this area?
Answer:
To establish a market economy, the Republic of Azerbaijan has adopted the antimonopoly or
competition protection legislation, as an integral part of the legislation, in order to pursue a
competition policy, which directed to protect a competition in the national markets, stop, restrict andremove an illegal monopolistic activities, unfair competition and unfair advertising.  The legislative
basement for regulation of the natural monopoly has been established.  The main principles of
protection a competition are reflected in the Constitution of the Republic of Azerbaijan (Articles 15,
29, and 59).  To date, the following laws form a legal basement to protect and develop a competition:WT/ACC/AZE/4
Page 19
- The Law “On entrepreneurial activity”;
- The Law “On enterprises”;
- The Law “On stock company”;
- The Law “On antimonopoly activity”;
- The Law “On unfair competition”;- The Law “On natural monopolies”;
- The Law “On advertising”;
- The Law “On consumer rights protection”;
- The Law “On trademarks and geographical sings”;
- The Law “On standardization”;
- The Law “On finance-industrial groups”;
- The Law “On tender” and other legal-normative norms.
The State Committee on Antimonopoly Policy and Support for Enterpreneurship (AMC) is a
central executive body, which carries out antimonopoly and competition policies in the Republic of
Azerbaijan.  The Committee’s responsibilities are determined by the above-mentioned legislative
norms, the Decrees of the President of the Repub lic of Azerbaijan No. 152 (26 August 1992) and
No. 647 (2 December 1997), “The Rules on issues related to violation of antimonopoly legislation”and other legal-normative documents.
AMC implements the state control functions given below:
- State control over observance of the following laws of the Republic of Azerbaijan:
“On antimonopoly activity”, “On unfair co mpetition”, “On natural monopolies”, “On
advertising”, and “On finance-industrial groups”;
- State control over observance of the antimonopoly legislation while establishing,
reestablishing, shutting down, and merging economic entities;
- State control over observance of the antimonopoly legislation while implementing
transactions concluded between economic entities to determine conditions for stocks
(shares) and enterpreneurship, or to apply rights obtained while implementing itsfunctions as a Supreme administration body;
- The antimonopoly legislation prohibits abuse of monopolistic position by entities,
activities, decision making, and adoption of normative documents, that can create
discrimination among economic entities, as well as agreements, which can restrict a
competition.  Once the requirements of the legislation are violated, the above
described agreements can be abrogated by a prescription of AMC in line with the
rules of court;
- The antimonopoly legislation does not allow unfair competition.  According to the
Law of the Republic of Azerbaijan “On unfair competition” the following forms of
unfair competition are existed:
- imitation of competitor’s activity;
- discrediting competitor’s activity;- interference into competitor’s activity;
- unfair entrepreneurial activity;
- unfair business behavior;
- consumers misleading.
According to the requirements of the above-me ntioned laws, actions determined as the form
of unfair competition is prohibited and entities applied such a practice bear prescribed responsibilities.
The state regulation of natural monopoly is carried out according to the Law of the Republic
of Azerbaijan “On natural monopolies” and other normative norms.  The state control over the
compliance to the requirements of the legislation in this area is implemented by AMC as well.WT/ACC/AZE/4
Page 20
According to the legislative requirements concerning natural monopolies both AMC and
Ministry of Economy of the Republic of Azerbaijan pursue the state regulation of natural monopolies’
activity.
The objectives of the Law of the Republic of Azerbaijan “On advertising” are to protect area
of advertising against unfair advertising, to stop and remove advertising that can mislead citizens anddamage human health and safety, properties of legal and physical persons, and their business
reputation.
The state control over advertising activity is one of the AMC’s responsibilities as well.
The different responsibilities for the violation of  the laws are stipulated in the following laws:
“On antimonopoly activity”, “On unfair compe tition”, “On advertising”, and “On natural
monopolies”.  AMC can give obligatory instructions, financial and fine sanctions through determined
ways against entities, which violated the requirements of these laws.
At present AMC is preparing the law drafts “On issuance of permission (licence) for some
entrepreneurial activities” and “On protection of a competition at financial markets”.
III. FRAMEWORK FOR MAKI NG AND ENFORCING POLICIES AFFECTING
FOREIGN TRADE IN GOODS AND TRADE IN SERVICES
2. Government entities responsible for making and implementing policies affecting foreign
trade
Question 33.  
Please outside to the Working Party the pro cess needed to complete national procedures
relating to WTO accession. Will implementing le gislation be required, and if so, please outline
how this legislation will be passed.
Answer:
As a rule, according to the experience of the existing legislation, once the Republic of
Azerbaijan accedes to any international orga nization or joins any international agreement,
amendments and changes are made to corresponding legislative norms.  Thus, according to Articles148 (section 2) and Article 151 of the Constitution of the Republic of Azerbaijan, the international
agreements, that the Republic of Azerbaijan is participating in, are an integral part of the legal system
of the Republic of Azerbaijan.  In case, if there are inconsistencies between normative legal norms
included into the legislative system of the Republic of Azerbaijan (except norms adopted by the
Referendum and the Constitution of the Republic of Azerbaijan), and interstate agreements that the
Republic of Azerbaijan is participating in, then international agreements will be applied.
Along with this, amendments and changes according to the WTO Agreement will be made to
the legislation of the Republic of Azerbaijan in the accession process.
3. Division of authority between central and sub-central governments
Question 34.  
Please confirm that local authorities have no ju risdiction over policies that would affect trade.WT/ACC/AZE/4
Page 21
Answer:
We confirm that local authorities have no jurisdiction over policies that would affect trade.
Question 35.  
How will the provisions of the WTO Agreement be applied uniformly throughout its territory
including the sub-central governments?
In accordance with the Constitution of the Republic of Azerbaijan, Azerbaijan is a unitary
republic.  After Azerbaijan's accession to the WTO, its Agreement will be fully applied in its
territories, including the sub-central governments.
4. Any legislative programmes or plans to change the regulatory régime
Question 36.  
The Working Party are pleased to note Azerbaijan’s commitment to strive to remove existing
inconsistencies between its laws and WTO requirements.  Is Azerbaijan able to indicate those
laws that are in need of amendment, and provide details of its legislative plans?
As a rule, according to the experience of the existing legislation, once the Republic of
Azerbaijan accedes to any international orga nization or joins any international agreement,
amendments and changes are made to corresponding legislative norms.  Thus, according to Articles
148 (section 2) and Article 151 of the Constitution of the Republic of Azerbaijan, the international
agreements, that the Republic of Azerbaijan is participating in, are an integral part of the legal system
of the Republic of Azerbaijan.  In case, if there are inconsistencies between normative legal norms
included into the legislative system of the Republic of Azerbaijan (except norms adopted by theReferendum and the Constitution of the Republic of Azerbaijan), and interstate agreements that the
Republic of Azerbaijan is participating in, then international agreements will be applied.
Along with this, amendments and changes according to the WTO Agreement will be made to
the legislation of the Republic of Azerbaijan in the accession process.
Question 37.  
Please update the Working Party on any changes to the regulatory regime.
Answer:
“The Regulation of import-export operations in the Republic of Azerbaijan “ was approved by
the Presidential Decree No. 609 of “On the further liberalisation of foreign trade in the Republic of
Azerbaijan “ (24 June 1997), and the Presidential Decree “On additional measures on foreign trade
regulations in the Republic of Azerbaijan“ (23 July 1999) was adopted to liberalise further and expand
country’s foreign relations, including trade relations, and to apply new regulations to meet demands ofa market economy in this sphere.  In addition, the Resolution No. 91 “On the rates of custom duties
for import-export operations in the Republic of Azerbaijan“ (22 April 1998) of the Cabinet of
Ministers was adopted and some changes and amendments to this Resolution (27 February 1999)
were made by the Cabinet of Ministers by adopting the Resolution No. 25.
Besides, some laws have recently been adopted as well, i.e. “On Police“, “On Lawyers and
lawyers’ activity”, “On Land market“, “On Tourism“, “On Rules for municipal elections“, “On status
of municipalities“, etc.WT/ACC/AZE/4
Page 22
6. Description of judicial, arbitral or administrative tribunals or procedures
Question 38.  
Please provide to the Working Party greater de tails about the composition, functions, and
processes of the Economic Court of the Republic of Azerbaijan, including information about the
representation of foreign individuals and firms to this Court.
Answer:
According to the recently adopted Law of the Republic of Azerbaijan “On Courts and Judges“
(10 June 1997), when the court reforms are completed in the country, the composition and structure of
the Economic Court of the Republic of Azerbaijan will function according to the rules given below.
Being a high judicial body for economic dispute-settlement cases, the Economic Court of the
Republic of Azerbaijan, as an appellation instance, controls work of economic courts over disputes
arising between international agreements and lo cal economic courts according to the procedures
stipulated by the Law.
The Economic Court of the Republic of Azerbaijan includes chairman of court, deputy-
chairman and judges.
The Economic Court consists of the Presidium and the Court Personnel organised to hear
cases.
Besides, some local economic courts (Baku Economic Court, Nakhchivan Economic Court,
Gandja Economic Court and Ali-Bayramli Economic Court which function as the first instance
courts) and the economic court which is organised with regard to disputes arising from international
agreements, but its jurisdiction concerns all the territory of the Republic of Azerbaijan and situated in
Baku city will function as well.
In its activity the Economic Court mainly gives superiority to the Constitution of the Republic
of Azerbaijan, legislative acts on arbitration, as well as to bilateral and multilateral agreements and
contracts concluded between the Republic of Azerbaijan and other states.
Settlement of various types of disputes can be determined by other legislative acts of the
Republic of Azerbaijan.
When there is no legislation regulating disputed matter, the Economic Court applies
legislation regulating the similar matter, if there isn’t such legislation; it takes a decision based on
general articles of legislation.
According to the Law of the Republic of Azerbaijan “On the Arbitration Court of the
Republic of Azerbaijan “ and the Arbitration Procedural  Code of the Republic of Azerbaijan (the Law
and Code were adopted on 25 February 1992), the duties of the economic court are as follows:
- To provide protection of rights of subjects of legal relations, who are juridical persons
based on the justice court to protect their interests ensured by the law;
- To provide legal assistance to economic relations in order to conform to the
legislation;
- To provide equal and correct application of legislation during solution of economic
disputes.
Composition of the Economic Court of the Republic of Azerbaijan:WT/ACC/AZE/4
Page 23
According to Article 13 of the Law of the Republic of Azerbaijan “On Arbitration Court of
the Republic of Azerbaijan“ the Economic Court of the Republic of Azerbaijan composed of judges of
the Economic Court of the Republic of Azerbaijan.
The following bodies function in the Economic Court of the Republic of Azerbaijan:
- The Plenium of the Economic Cour t of the Republic of Azerbaijan;
- The Presidium of the Economic Court of the Republic of Azerbaijan, the Court
College  on solution of economic disputes;
- The Court College on examination of legality and validity of laws.
The following economic disputes are included to the economic courts of the Republic of
Azerbaijan:
- Disputes arising from concluding, changing and liquidation of economic transactions;
- Property related disputes;- Non-property related disputes;
- Land disputes, including disputes arising from land purchasing and from payment of
damages related with violation rights of landowners and land users;
- Considering invalid of acts adopted by state and other bodies, and violating the rights
of enterprises and organisations stipulated in the legislation, as well as disputesarising from compensation of losses appeared as a result of implementation of illegal
actions of these bodies and their officials;
- Requirements of financial, bank and other control bodies on imposing of economic
sanctions and other amounts from enterprises, organisations, as well as private
entrepreneurs;
- Disputes over repayment of taxes and non-tax payments levied from enterprises,
organisations, individual entrepreneurs to the state budget in indisputable way;
- Other economic disputes, except those issues which are to be considered by other
bodies according to the legislation of the Republic of Azerbaijan;
- Cases on bankruptcy of enterprises in debt, other legally recognised as a legal person
in debt, as well as of individual entrepreneurs in debt.
Enterprises, offices and organisations, co-operatives, farmers, entrepreneurs, owners, owners
that conduct entrepreneurial activity without establishment of juridical person, international unites,
joint enterprises of the Republic of Azerbaijan and other states, state bodies and other bodies which all
considered as juridical persons, and foreign juridical persons, individual entrepreneurs and persons
without citizenship within the cases stipulated by the legislation have the rights to apply respectively
to the economic courts of the Republic of Azerbaijan to protect their violated or disputed rights orlegal interests.
Appeal to the economic court should be in the form of written claim application.
Pretension and receipts for sending of pretension and claim application to respondent, bank
document given for payment of state duties, charter and other necessary documents are to be enclosed
to the claim application.
After being entered to the court, during 5 days, claim application is to be considered by
judges for acceptation to execution, and after acceptation claim documents is to be looked through
within a month and if there are enough proofs and gathered documents, then adequate decision is to
be adopted on the matter.WT/ACC/AZE/4
Page 24
The decision  of the Economic Court of the Republic of Azerbaijan is effective from the date
of adoption.  The decision is executed according to the order of the Economic Court.  The order is an
executive document and it is sent together with the decision.
The order concerning withdrawal of money is pr esented to petitioner.  In case of withdrawal
of money in favour of budget the order is sent to the tax authorities and executed in determinedprocedures by bank.  Other orders are executed by court executors.
The party that doesn’t agree with the decision of the first instance court can submit a
complaint or a protest to the second instance court within one month from the date of adoption of
decision.
The party that doesn’t agree with the decision of the second instance court can submit a
petition to the Chairman or the deputies of the Economic Court of the Republic of Azerbaijan to give
a protest to the Presidium and the Plenium within a year from the date of adoption of a decision.
The party that doesn’t agree with the judgement of the first instance court can lodge a
complaint to Chairman of the Court, deputies of Chairman, the Head Prosecutor Office of the
Republic to make a protest against the Presidium and the Plenium.
As a rule, at the first instance economic court economic disputes are looked over by one
judge.  In necessary cases, according to the consideration of the Chairman of the economic court or ofhis Deputy, suggestion of judge or application of part ies issues can be looked through by three judges.
The economic court provides assistance to make agreement connected with the solution of
economic disputes between parties (arbitration principle).  According to this agreement relevant
decision is adopted.
Judges are free in making a decision over economic disputes.  They obey only to the law.Disputes in the court should be solved irrespective to the subordination of organization, its
location, types of property, and on the base of legal equality before the court and law, as well as for
individual entrepreneurs.
Cases in the economic court are solved transparently, except for cases connected to protection
of state interests or commercial secrets.
Court procedures are carried out in Azeri language.  In case if representatives of parties or
other participants of the court process do not know the language, they are provided with the rights to
use interpretation and translation of all documents of a case and to participate in court session.
There are no additional restrictions or concessions on the cases, which are looked through
with participation of foreign citizens, legal entities, entrepreneur citizens and persons without
citizenship, thus, all judicial rules and other cases are also applied to them.
If the claim applications submitted to the economic court is property-related, then 10 per cent
of the total amount of the claimed property, if it is not-property related the amount equivalent to sums
of several minimal wages must be charged.
Question 39.  
Relating to the appeals processes for customs, investment and other issues covered by the WTO
agreement, is the right of foreigners to appeal to an independent tribunal, whether juridical orarbitral, granted in a non-discriminate manner?WT/ACC/AZE/4
Page 25
Answer:
In accordance with Article 69 of the Constitution of the Republic of Azerbaijan and Article 4
of the Law “On the legal status of the foreigners and non-citizens”, if it is not provided otherwise in
the Constitution of the Republic of Azerbaijan, the Law “On the legal status of foreigners and non-
citizens”, other laws of Azerbaijan and in any intern ational agreements that Azerbaijan is participating
in, foreigners and no-citizens are using the same rights and exemptions and are applying all duties
same as Azerbaijan citizens.
IV. POLICIES AFFECTING TRADE IN GOODS
1. Import regulation
Question 40.  
Please update the Working Party on the status of the trade agreement signed with the CIS
countries, namely as preferential trade rates have entered into force.
Answer:
The Republic of Azerbaijan has signed bilateral free trade agreements with 7 CIS countries
(Russian Federation (30 September 1992), Uzbe kistan (27 May 1996), Ukraine (28 July 1995),
Georgia (10 June 1996), Moldova (26 May 1995), Kazakstan (10 June 1997) and Turkmenistan
(18 March 1996)).  According to the articles of these agreements the states that signed the Agreementundertake a commitment not to apply duties, taxes and charges that equivalently affect exports and
imports between them.
At present custom duties are not applied to imported goods only from three (Georgia,
Kazakstan and Ukraine) out of the above-mentioned states.
The Republic of Azerbaijan joined the Agreement on the establishment of free trade zone on
15 April 1994.  As the Agreement had not been im plemented, the CIS countries signed the Protocol
on making amendments and additions to the same Agreement on 2 April 1999.  At present the
Protocol hasn’t come into force yet.  The states that signed the Agreement undertake a commitment
not to apply duties, taxes and charges equivalently affecting exports and imports between them.
(a) Registration requirements for engaging in importing
Question 41.  
Are the ad valorem  charges listed under (d) pg. 22 additional  to customs duties? If the answer is
“yes“, please note that Art. VIII of GATT states  that charge(s) imposed on the import of goods
must correspond to the cost of a service rend ered. Please, therefore, specify the service rendered
to the importer for each of the charges levied. Plea se note that fees that cover the cost of the
service rendered cannot be in ad valorem  format. In addition, please outline for the Working
Party the manner in which you will reform your ad valorem  charges to bring them into
conformity with GATT Art. VIII.
Answer:
The amount of customs fees levied for customs registration had been adopted by the
Resolution No. 91 of the Cabinet of Ministers of the Republic of Azerbaijan “On customs tariff rates
for import-export operations in the Republic of Azerbaijan” (22 April 1998) in addition to thead valorem  charges.WT/ACC/AZE/4
Page 26
The amount of customs charges levied for customs registration had been adopted by the
Resolution of the Cabinet of Ministers of the Republic of Azerbaijan “On custom tariff rates for
import-export operation in the Republic of Azerbaijan” dated April 22 1998 numbered under 91.
Changes and amendments were made to the above Resolution by the Resolution dated February 27,
1999 numbered under 25:
- For customs registration of goods (including transport means supplied through the
customs border of the Republic of Azerbaijan), as well as goods and loads, and
transport means designated for non-commercial purposes and transported in non-
accompanied luggage, and international mail sendings, the customs fees are levied in
amount 0.15 per cent of their customs value (no less than US$10) in Manats (AZM)
at exchange rate of the National Bank of the Republic of Azerbaijan.
- For customs registration of goods and transport means, transported through the
customs border of the Republic of Azerbaijan for the purposes of humanitarian and
technical assistance, and inter-transmission of electric energy, as well as for formal
use by diplomatic representatives, located in the Republic of Azerbaijan and personal
use of the personnel members of these representatives, the customs fees are not
levied.
- For each additional sheet of the Customs cargo declaration, irrespectively to the type
of transaction the payment is levied in the amount of $5 payable in Manats (AZM) at
exchange rate of the National Bank of the Republic of Azerbaijan.
- For customs registration of goods, transferred across the customs border of the
Republic of Azerbaijan under the customs regime of transit, the customs fees in theamount of $30, and $10 for each additional Customs cargo declaration are levied in
Manats (AZM) at exchange rate of the National Bank of the Republic of Azerbaijan.
- For issuance of the document for the registration of transport means, imported (as
well as temporary imported) by physical persons to the customs territory of the
Republic of Azerbaijan, the customs payment is levied in the following amounts:
- $20 for trucks and cars, minibuses and buses;
- $15 for other transport means.
The payment is delivered in Manats (AZM) at exchange rate of the National Bank of the
Republic of Azerbaijan.
For registration of goods and transport means out of the working time of the customs bodies
of the Republic of Azerbaijan and outside the authorized place the customs fees are levied twofold.
(b) Characteristics of national tariff
Question 42.  
The Working Party hopes that Azerbaijan will provide an initial offer on goods as soon as
possible.
Answer:
At present time rates of the customs duties are regulated by the Decree No. 91 of the Cabinet
of Ministers “On customs duties levied on import and export in the Republic of Azerbaijan”
(22 April 1998), and by the Decree No. 25 of the Cabinet of Ministers on the additions and changes to
the above mentioned Decree (27 February 1999).  In accordance with the procedures of accession,
Azerbaijan will submit its first offer on customs duties to the WTO during the accession process.WT/ACC/AZE/4
Page 27
(c) Tariff quotas, tariff exemptions
Question 43.  
Can Azerbaijan provide a copy of its tariff (or otherwise advise which specific products are
subject to the two rates of 5 and 15 percent)?
Answer:
The customs tariff rates for imported products had been approved by the Resolution No. 25 of
the Cabinet of Ministry of the Republic of Azerbaijan (27 February 1999) “On amendments and
changes to the Resolution No. 91 of the Cabinet of Ministers "On customs tariffs for import and
export operations in the Republic of Azerbaijan"(22 April 1998)”.  According to this Resolution, there
is the list of goods and import customs tariffs, given in the table below.  However, import customs
rate in maximum amount of 15 per cent was impos ed on imported goods.  It is worth noting that
according to the accession procedures of the WTO the offer on customs tariff rates is being preparedat present and currently applied tariff rates in the Republic of Azerbaijan will be indicated in the offer.
Question 44.  
Can Azerbaijan provide further information on the preferential trade agreements it has signed
with the seven states of the CIS?  In particular, can Azerbaijan advise which sectors have been
included, which sectors are not included, the leve l of trade that is covered, and details on the
implementation process to a full free trade agreement as required under Article XXIV of GATT
1994?
Answer:
The bilateral free trade agreements, which are in conformity with Article XXIV of GATT
1994, stipulate that the majority of exported and imported goods will be under an influence of freetrade regime.  According to the agreements, the countries, which has signed them will not apply
tariffs, taxes, and duties that have an equivalent impact on bilateral import and export between these
countries.  At present, from the free trade agreements that Azerbaijan signed with seven states of the
CIS only three agreements came into a force and customs tariffs from three countries, i.e. Ukraine,
Georgia and Kazakstan are not imposed on goods imported under this regime.
From these three countries, which are not applying customs tariffs the Protocol of exceptions
to the free trade regime has been signed only with Kazakstan.  In the Protocol signed with Kazakstan
the list of goods imported to the customs territory of the Republic of Azerbaijan and excluded from
the free trade regime is based on the commodity codes.  The goods imported to the customs territory
of the Republic of Azerbaijan and excluded from free trade regime are liquor, vodka, and other
alcohol products and tobacco cigarettes.
The share of the goods excluded from the free trade regime made up 0.14 per cent of the
commodity turnover between Azerbaijan and Kazakstan in 1999.WT/ACC/AZE/4
Page 28
Question 45.  
Please list all products exempt from duties an d/or VAT in order to complete the list you have
begun in your submission. Are VAT exemptions applied with full respect for the national
treatment and MFN principles?
Answer:
According to the Law of the Republic of Azerbaijan “On customs tariff” (submitted to the
WTO Secretariat) the following are exempted from customs duties:
- transport means used for international transportation of cargo, luggage and
passengers, and also articles of supplies and accessories, fuel, food and other products
required for normal functioning on the road, in stop points, or articles purchased
abroad for liquidation of accident (breakage) of said transport means;
- articles of supplies and accessories, fuel, food and other property exported outside the
customs territory of the Republic of Azerbaijan, in order to provide normal operation
of Azerbaijanian vessels leased (rented) by legal entities and physical persons of the
Republic of Azerbaijan which carry out fishing, and also products of their activity
imported to the customs territory of the Republic of Azerbaijan;
- commodities imported to the customs territory of the Republic of Azerbaijan and
exported from this territory for official or personal use by representatives of foreign
countries, physical persons having the right for duty-free importation and duty-free
exportation of such commodities in complian ce with international agreements of the
Azerbaijan Republic and legislation of the Republic of Azerbaijan;
- currency of the Republic of Azerbaijan exported from the customs territory of the
Republic of Azerbaijan and foreign currency (except that used for numismatics),
securities imported to this territory in accordance with legislation of the Republic of
Azerbaijan;
- commodities which are subject to expropriation in favour of the state in cases
envisaged by legislation of the Republic of Azerbaijan;
- commodities imported to the customs territory of the Republic of Azerbaijan and
exported from this territory with the objective of elimination of consequences of
accidents and catastrophes, natural calamities or as humanitarian aid, including free
text-books for schools, nursery schools and medical institutions;
- commodities imported to the customs territory of the Republic of Azerbaijan and
exported from this territory as free aid and charity at a level of states, governments,
international organisations, including technical assistance;
- commodities transported under the control of customs authorities, as a transit, through
the customs territory of the Republic of Azerbaijan and intended for third countries;
- commodities exported by physical persons from the customs territory of the Republic
of Azerbaijan for personal use, and not intended for production and commercial
activity in accordance with the Customs Code of the Republic of Azerbaijan;
- national cultural values returned to the territory of the Republic of Azerbaijan.
According to Article 2 of Resolution No. 61 (16 June 1997) “On the List of VAT-exempt
imported goods produced outside the CIS countries and imported to the territory of the Republic of
Azerbaijan” of the Cabinet of Ministers of the Re public of Azerbaijan the following goods are VAT-
exempt:
- Seeds, fertiliser, feed, pedigree cattle, medicines, and medicines used in veterinary
treatment, biological medicines and veterinary equipment for agriculture;
- Packaged baby food, syringes, and pharmaceutical products;WT/ACC/AZE/4
Page 29
- Goods and property officially used by diplomatic representatives and the same kind
of organizations; and also by the diplomatic and administrative personnel, and goods
and property privately used by their family members;
- Humanitarian help brought to the Republic of Azerbaijan by the humanitarian
organisations, which are officially registered  on the territory of Azerbaijan, and also
by the legal and natural persons in agreement with the Republican Commission on
International Humanitarian Aid with the purpose of disinterestedly being spread;
- Goods, gratuitously brought as a technical assistance by the international
organisations;
- Various technical equipment (except auto-transport facilities) for disability
precautions, and treatment, as well as raw materials and finished products for their
production;
- Goods brought to be transferred to the ownership of the state on the basis of
confiscation, no ownership and also on the right of inheritance;
- Assets brought as a share of foreign in vestor in joint-stock company or for
establishment of enterprise fully owned by foreign investor;
- Goods temporarily brought to the territory of the Republic of Azerbaijan, and defined
by import conditions to be sent to the exporting country without any changes made
during identified period (in case, if the guarantee on returning goods to the exporting
country is submitted to the customs authorities, or in case if the VAT was paid before,
the paid amount of VAT would be paid back to the payers when goods are taken out
of the territory of the Republic of Azerbaijan);
- Transit goods (under customs control);
- Goods brought for duty-free trade shops;
- Properties brought to the Republic of Azerbaijan by foreigners for their personal
needs, which work for companies estab lished with participation of foreign
investments;
- Payment means as currency, money, banknotes (except numismatics usage), official
state document forms, citizen passports and also securities brought on the base of the
confirmation document given by the Ministry of Finance or National Bank;
- Goods temporarily brought to the territory of  the Republic of Azerbaijan with the aim
of being exported again or treated (in case if the bank guarantee on the export of
goods after being treated to the third count ry without changing is passed to the
Customs or in case if VAT is paid. When the same goods are taken out of the territoryof the Republic of Azerbaijan, the paid VAT amount returns to the payers);
- Special imported guard-patrol facilities in order to provide transport safety.
If goods mentioned in items 3, 8 and 12 of the list above are sold, then VAT is to be paid
within ten days from the date of their sale.
The list of goods produced in the country and VAT-exempt is given below:- cost of the property redeemed in the course of privatization of property of state
enterprises, as well as rental payment for leased enterprises established on the base of
state property;
- operations on insurance and reinsurance, granting and transfer of subsidies and also
operations with money contributions, current and other accounts;
- operations in connection with circulation of currency, money, banknotes being legal
payment means (except those used with numismatic objectives) and also securities
(bonds, shares, certificates, bills, etc.);
- sale of post stamps (except collector pieces), postcards with stamps, envelopes,
lottery tickets;
- actions accomplished by authorised bodies that are subject to state taxes;WT/ACC/AZE/4
Page 30
- services in the sphere of public education related to educational-productive process,
payment for education of children and teenagers in groups, studios, for use of sport
facilities and also services on keeping children in kindergartens, services in
connection with nursing ill and aged people;
- issuing, transferring and receiving of patents, author’s certificates, licenses, as well as
providing preferences;
- services of undertaker’s offices, cemeteries, accomplishment of ritual ceremonies by
religious organisations;
- services of cultural and artistic companies, religious organisations, theatre
performances, concerts, sport, cultural-educational events including demonstration of
video-tapes;
- scientific-research, design-research and experimental-design works accomplished at
the expense of budget of the Republic of Azerbaijan and works accomplished by
institutions of the sphere of public education on contractual basis (for third parties);
- commodities (works, services) produced by enterprises, organisations and co-
operatives of societies of disabled people;
- commodities, services sold by legal and physical entities, paying tax in an order
envisaged by the legislation of the Republic of Azerbaijan in the form of licence
obtaining;
- works on fulfilment of social-cultural prog rams (projects) on house-building, erection
of objects of housing, service purpose, infrastructure, house-building integrated plants
and technological lines at the expense of gratuitous financial assistance, credits andloans, allocated by international organisations, governments of foreign states, and
also foreign legal and physical entities on the basis of interstate and
intergovernmental agreements, on rendering of services by consulting enterprises of
foreign countries and the Republic of Azerbaijan, and also on delivery of materials
and equipment;
- turnovers on sale of newspapers and magazines, publication and polygraph activities
on production of press mass media (except advertisement services);
- turnovers on sale of products produced by the juridical persons (except products
produced in processing factories) – for the period of five years starting from 1999.
The following commodities (works, services) are subject to value added tax at a rate of
0 per cent:
- commodities (works, services) exported outside states — the CIS members; and
commodities (works, services) exported to the CIS countries applying VAT on
products imported from the Republic of Azerbaijan;
- commodities and services intended for official use of foreign diplomatic
representations, organisations equated with them and also their diplomatic and
administrative-technical personnel;
- services of city public transport (except taxi) and also services on passenger
transportation using local (suburban) trains and buses;
- text-books for secondary schools, literature for children;
- rental payments for apartments and hostels.
- All kinds of services, donations in a form of financial means aimed to purchase raw
materials, commodities, materials and equipment presented by foreign physical and
juridical persons, international organisations, governments of foreign countries upon
the permission of appropriate executive body and according to the interstates and
intergovernmental agreements.WT/ACC/AZE/4
Page 31
(d) Other duties and charges, specifying any charges for services rendered
Question 46.  
Do any of the charges mentioned in the Memorandum constitute a fee for a service that has
been rendered?  Does Azerbaijan have any plans to  eliminate any of these charges or to simplify
them?
Answer:
The amount of new customs fees levied for customs registration had been adopted by the
Resolution No. 91 of the Cabinet of Ministers of the Republic of Azerbaijan “On customs tariff rates
for import-export operations in the Republic of Azerbaijan” (22 April 1998):
- For customs registration of goods (including transport means supplied through the
customs border of the Republic of Azerbaijan), as well as goods and loads, and
transport means designated for non-commercial purposes and transported in non-accompanied luggage, and international mail sendings, the customs fees are levied in
amount 0.15 per cent of their customs value (no less than $10) in Manats (AZM) at
exchange rate of the National Bank of the Republic of Azerbaijan.
- For customs registration of goods and transport means, transported through the
customs border of the Republic of Azerbaijan for the purposes of humanitarian andtechnical assistance, and inter-transmission of electric energy, as well as for formal
use by diplomatic representatives, located in the Republic of Azerbaijan and personal
use of the personnel members of these representatives, the customs fees are not
levied.
- For each additional sheet of the Customs cargo declaration, irrespectively to the type
of transaction the payment is levied in the amount of $5 payable in Manats (AZM) at
exchange rate of the National Bank of the Republic of Azerbaijan.
- For customs registration of goods, transferred across the customs border of the
Republic of Azerbaijan under the customs regime of transit, the customs fees in the
amount of $30, and $10 for each additional Customs cargo declaration are levied inManats (AZM) at exchange rate of the National Bank of the Republic of Azerbaijan.
- For issuance of the document for the registration of transport means, imported (as
well as temporary imported) by physical persons to the customs territory of the
Republic of Azerbaijan, the customs payment is levied in the following amounts:
- $20 for trucks and cars, minibuses and buses;
- $15 for other transport means.
The payment is delivered in Manats (AZM) at exchange rate of the National Bank of the
Republic of Azerbaijan.
For registration of goods and transport means out of the working time of the customs bodies
of the Republic of Azerbaijan and outside the authorized place the customs fees are levied twofold.
Question 47.  
Given that various WTO provisions prohibit quantitative import restrictions, what WTO
Justification is there for Azerbaijan’s import licensing and quantitative restrictions on imports
of alcohol, alcoholic beverages and tobacco substitutes?  Can Azerbaijan explain its plans to
reform these measures?WT/ACC/AZE/4
Page 32
Answer:
According to the legislation, the import of ethyl alcohol, alcohol beverages and tobacco
substitutes is carried out through licensing procedures.  The purpose of this measure is to establish an
order in a circulation of alcohol beverages and tobacco products.  The import licensing of these
products is implemented in order to prevent their illegal import to the country, deviation from taxes,unfair competition practices and also to protect consumer’s rights.
Taking into consideration a possible danger of alcoholic beverages and tobacco products for
human life and health, it is worth noting that the implemented licensing doesn’t reflect restrictions to
import, but it is aimed to establish an efficient control system in this sphere and to protect health of
population.
We consider this import licensing to be in conformity with the exceptions reflected in the
Article XX paragraphs (b) and (d) of GATT 1994.
We also would like to note that the import licensing for these products is also used as a
control system over import quota procedures.
We would like to inform you that the licenses issued in 1999 made up a small proportion of
the set import quotas.  Thus, the import licenses for champagne, grape wine, alcohol and other strong
alcohol beverages, ethyl alcohol, cigarettes and cigars, beer and cognac products had been issued.  Itmade up respectively 1.2 per cent, 10.2 per cent, 36.8 per cent, 26.4 per cent, 84 per cent,
33.8 per cent, 0.1 per cent of the set quotas for these products.
Question 48.  
Can Azerbaijan advise why the import of alcoholic drinks and tobacco substitutes is dependent
on the attainment of specified domestic production levels (see Annex 3 Section VII)?
Answer:
The licensing requirements shown in Section VII of Annex 3 of the Memorandum on Foreign
Trade Regime are not applied for imported products to the Republic of Azerbaijan, but they are the
licensing requirements for domestically produced products.
Question 49.  
Are foreign and domestic alcoholic beverages and tobacco substitutes subject to the same retail
conditions of availability, display, sale and distribution?
Answer:
Foreign and domestic alcoholic beverages and tobacco substitutes are subject to the same
retail conditions of availability, display, sale and distribution.
(f) Import licensing procedures
Question 50.  
Please outline the procedures, in detail, for the issuing of a licence for the import of chemical
elements. If there are any other products subject to import licensing procedures, please inform
the Working Party of these products, and detail the licensing procedure for these products.WT/ACC/AZE/4
Page 33
Answer:
Medicines used in veterinary treatment, biological medicines and veterinary equipment,
medicines, medical equipment, and chemicals used in  plant protection are approved in Annex 2 of the
“Rules on regulation of import-export operations in  the Republic of Azerbaijan” approved by the
Decree of the President of the Republic of Azerbaijan (24 June 1997).  Transactions (contracts) onimportation of these products are implemented after expertise and registration at the Ministry of
Trade.  The Ministry of Trade should get a conclusion from the Ministry of Agriculture on
importation while carrying out expertise on chemicals used in plant protection.
“Regulations on licensing of importation of ethyl spirits (eatable), alcoholic beverages and
tobacco products to the territory of the Republic of Azerbaijan” was approved by Resolution No. 33
of the Cabinet of Ministers (4 March 1999).  Imported products subject to licensing are ethyl spirits,
alcoholic beverages (except beer) and tobacco products.  The Ministry of Trade of the Republic ofAzerbaijan issues licenses for these products.
An applicant should submit the following documentation to the Ministry of Trade to get a
licence:
1) An application to get a licence;
The following should be reflected in the application:- For juridical persons - name of the juridical person, legal structure of organization,
statistic code, legal address, account number, name of bank, code of product and type
of activity with indication of volume (if activity type carried in the territory and is
being carried out by different units, then number and address of these units should be
indicated in application).
- For physical persons – first name, middle name, and last name, information on
documents verifying personality (series, number, date and place of issuance, address),
code of product and type of activity with indication of volume (if activity type carried
in the territory and is being carried out by different units, then number and address of
these units should be indicated in application).
2) Original or copy of an agreement (in case of absence of agreement, then
documentation that approves this transaction) concluded with foreign persons
(counterparts);
3) Copy of a licence, which is still in force for retail or wholesale according to the
activity type mentioned in the application (in cases stipulated by the legislation);
4) Copy of documentation establishing organization;5) Copy of a certificate on state registration of organization;
6) Copy of a certificate on the registration of physical persons involved in
entrepreneurship by tax authorities;
7) Document verifying the payment of state duties to the state budget for getting licence;
8) Copy of a document verifying rights (property rights, tenant rights, usage, etc.) of an
applicant for usage of units mentioned in application.
Licenses are issued for one-year period.WT/ACC/AZE/4
Page 34
Question 51.  
Please note that under GATT Art. XI quotas are not allowed, except in cases specified therein.
Please confirm that Azerbaijan will not introd uce QRs on any products except in the manner
permitted in GATT Art. XI and that it will remove the QRs on ethyl alcohol, alcoholic
beverages, and tobacco products.
Answer:
According to the legislation, importation of ethyl alcohol, alcohol beverages and tobacco
products is carried out through licensing procedures.  The purpose of this measure is to establish an
order in a circulation of alcohol beverages and tobacco products.  The import licensing of these
products is implemented in order to prevent their illegal import to the country, deviation from taxes,
unfair competition practices and also to protect consumer’s rights.
Taking into consideration a possible danger of alcoholic beverages and tobacco products for
human life and health, it is worth noting that the implemented licensing doesn’t reflect restrictions to
import, but it is aimed to establish an efficient control system in this sphere and to protect health of
population.
We consider this import licensing to be in conformity with the exceptions reflected in Article
XX paragraphs (b) and (d) of GATT 1994.
We also would like to note that the import licensing for these products is also used as a
control system over import quota procedures.
We would like to inform you that the licenses issued in 1999 made up a small proportion of
the set import quotas.  Thus, the import licenses for champagne, grape wine, alcohol and other strong
alcohol beverages, ethyl alcohol, cigarettes and cigars, beer and cognac products had been issued.  Itmade up respectively 1.2 per cent, 10.2 per cent, 36.8 per cent, 26.4 per cent, 84 per cent,
33.8 per cent, 0.1 per cent of the set quotas for these products.
Question 52.  
The import licensing requirements for ethyl alcohol, alcohol beverages and tobacco products
seem, in our view, to be inconsistent with the prohibition of quantitative restrictions prescribed
by Article XI of the GATT 1994.  Please explain in detail the justification of the licensing
requirements for importing those products in relation to Articles XX and XXI of the GATT
1994.
Answer:
According to the legislation, the import of ethyl alcohol, alcohol beverages and tobacco
substitutes is carried out through licensing procedures.  The purpose of this measure is to establish an
order in a circulation of alcohol beverages and tobacco products.  The import licensing of theseproducts is implemented in order to prevent their illegal import to the country, deviation from taxes,
unfair competition practices and also to protect consumer’s rights.
Taking into consideration a possible danger of alcoholic beverages and tobacco products for
human life and health, it is worth noting that the implemented licensing doesn’t reflect restrictions to
import, but it is aimed to establish an efficient control system in this sphere and to protect health ofpopulation.WT/ACC/AZE/4
Page 35
We consider this import licensing to be in conformity with the exceptions reflected in the
Article XX paragraphs (b) and (d) of GATT 1994.
We also would like to note that the import licensing for these products is also used as a
control system over import quota procedures.
We would like to inform you that the licenses issued in 1999 made up a small proportion of
the set import quotas.  Thus, the import licenses for champagne, grape wine, alcohol and other strong
alcohol beverages, ethyl alcohol, cigarettes and cigars, beer and cognac products had been issued.  It
made up respectively 1.2 per cent, 10.2 per cent, 36.8 per cent, 26.4 per cent, 84 per cent,
33.8 per cent, 0.1 per cent of the set quotas for these products.
(h) Customs valuation
Question 53.  
Can Azerbaijan provide a copy of its customs valuation law?
Answer:
The customs valuation rules are stipulated in 11-23 Articles of the Law of the Republic of
Azerbaijan "On Customs tariff" (20 June 1995), which has been submitted to the WTO Secretariat.
Question 54.  
Can Azerbaijan provide an undertaking that it will commit itself fully to applying GATT
Article VII and WTO Agreement an implementation of Article VII from the date of its
accession to the WTO?
Answer:
Determining customs value (customs valuation system) is based on the Law of the Republic
of Azerbaijan “On customs tariff” (submitted to the WTO Secretariat) and according to this Law“Rules on application of customs valuation system for imported into and exported from the customs
territory of the Republic of Azerbaijan” approved by the Resolution No. 7 of the Cabinet of Ministers
of the Republic of Azerbaijan (12 January 1998), which already comply to general principles of the
world practice, i.e. to the Agreement of Application of Article VII of the GATT.
Question 55.  
Can Azerbaijan confirm that the fees for cust oms clearance represent the actual cost of
providing such services?  Can Azerbaijan provide a comprehensive list of such fees?
Answer:
The amount of new customs fees levied for customs registration had been adopted by the
Resolution No. 91 of the Cabinet of Ministers of the Republic of Azerbaijan “On customs tariff rates
for import-export operations in the Republic of Azerbaijan” (22 April 1998):
- For customs registration of goods (including transport means supplied through the
customs border of the Republic of Azerbaijan), as well as goods and loads, and
transport means designated for non-commercial purposes and transported in non-
accompanied luggage, and international mail sendings, the customs fees are levied inWT/ACC/AZE/4
Page 36
amount 0.15 per cent of their customs value (no less than $10) in Manats (AZM) at
exchange rate of the National Bank of the Republic of Azerbaijan.
- For customs registration of goods and transport means, transported through the
customs border of the Republic of Azerbaijan for the purposes of humanitarian and
technical assistance, and inter-transmission of electric energy, as well as for formaluse by diplomatic representatives, located in the Republic of Azerbaijan and personal
use of the personnel members of these representatives, the customs fees are not
levied.
- For each additional sheet of the Customs cargo declaration, irrespectively to the type
of transaction the payment is levied in the amount of $5 payable in Manats (AZM) at
exchange rate of the National Bank of the Republic of Azerbaijan.
- For customs registration of goods, transferred across the customs border of the
Republic of Azerbaijan under the customs regime of transit, the customs fees in the
amount of $30, and $10 for each additional Customs cargo declaration are levied in
Manats (AZM) at exchange rate of the National Bank of the Republic of Azerbaijan.
- For issuance of the document for the registration of transport means, imported (as
well as temporary imported) by physical persons to the customs territory of theRepublic of Azerbaijan, the customs payment is levied in the following amounts:
- $20 for trucks and cars, minibuses and buses;
- $15 for other transport means.
The payment is delivered in Manats (AZM) at exchange rate of the National Bank of the
Republic of Azerbaijan.
For registration of goods and transport means out of the working time of the customs bodies
of the Republic of Azerbaijan and outside the authorized place the customs fees are levied twofold.
Question 56.  
Does Azerbaijan have intentions of introducing a scheme to refund customs duty paid on
imported goods when these goods are subseque ntly re-exported, including after further
manufacture or processing within Azerbaijan?
Answer:
According to the customs regimes described in the Customs Code of the Republic of
Azerbaijan (submitted to the WTO Secretariat) there already exist a mechanism to refund customs
tariffs under certain conditions in re-export, temporary import and all types of processing regimes.
(j) Pre-shipment Inspection
Question 57.  
Can Azerbaijan confirm that there is a govern ment-imposed requirement for preshipment
inspection for veterinary controls, and that there are no other government requirements?  Can
Azerbaijan explain the nature of the PSI requirements on veterinary controls?  Can Azerbaijan
advise whether fees are charged for PSI and if so provide details? Does Azerbaijan have any
plans to widen the application of the PSI to areas other than veterinary controls?WT/ACC/AZE/4
Page 37
Answer:
As it was mentioned in paragraph 1 (a) of Section IV of the Memorandum "On Foreign Trade
Regime of the Republic of Azerbaijan" submitted to the WTO, at present preshipment inspection is
not used in Azerbaijan and is not expected to be used in the future.
State veterinary control over imported and exported raw materials of animal origin is applied,
and laboratory inspections of these products are carried out only for veterinary-sanitary purposes.
Question 58.  
Please, provide a more detailed description of Azerbaijan’s PSI system, including explanations
as to how this system is in conformity with th e relevant WTO Agreement, in particular on the
Pre-shipment Inspection and Customs Valuation.
Answer:
As shown in Paragraph 1 (a) of Part IV of the Memorandum on “Foreign Trade Regime of the
Republic of Azerbaijan” submitted to the World Trade Organization pre-shipment inspection is not
carried out in the Republic Azerbaijan and it is not expected to be used in the future.
(k) Application of internal taxes in imports
Question 59.  
The Memorandum mentions Azerbaijan’s policy on  National Treatment on  internal taxation,
but not on regulatory aspects of sale, offering for sale, purchase, transportation, distribution or
use. What is the content of Azerbaijan’s policy  in this area, and please explain how these
policies comply with Art III of GATT.
Answer:
The principles of the national treatment on regulatory aspects of sale, offering for sale,
purchase, transportation, distribution and use shown in Article III of GATT are completely consistent
with the trade policy of the Republic of Azerbaijan.
Question 60.  
Internal taxes including VAT and excise tax, if any, should be exempted in a non-discriminatory
manner between domestically produced and imported products.
Answer:
Duties levied in the territory of the Republic of Azerbaijan are consisted of Value Added Tax
(VAT) and excise taxes.
VAT is levied on imported products and domestically produced products based on equal rules
and rates.  Preferences in this sphere are not allowed.
At present time rates of the excise taxes levied on imported products and on domestically
produced products are different.
It is worth noting that the Tax Code of the Republic of Azerbaijan is under approval at
present.WT/ACC/AZE/4
Page 38
(l) Rules of origin
Question 61.  
The Memorandum notes that Azerbaijan does not have a fully developed system for
determining the origin of imports.  Could Azerbaijan explain how it proposes to administer the
obligations it will assume under the WTO Agreement on Rules of Origin and the timetable itenvisages for development and implementation of  legislation and regulations in this area?
Answer:
According to Articles 24-32 of the Law of the Republic of Azerbaijan “On Customs tariffs”
(submitted to the WTO Secretariat) the country of origin of products is determined in order to
implement tariff and non-tariff regulation of products imported into and exported from the customs
territory of the Republic of Azerbaijan.  Recently draft rules for issuance of certificate on origin of
exported goods, and draft rules for determination of country of origin of goods imported to thecustoms territory of the Republic of Azerbaijan have been elaborated.
Question 62.  
Under what circumstances might a “group of coun tries be considered as one country for origin
purposes”? For example, does the European Community count as one country for origin
purposes? Please provide the Working Party wi th a copy of the law on Rules of Origin.
Answer:
According to Articles 24 to 32 of the Law of the Republic of Azerbaijan “On Customs Tariff”
(submitted to the WTO Secretariat), country of origin of goods, importation of goods to the customs
territory of the Republic of Azerbaijan and exportation of goods out of the territory are determined
with a purpose to apply tariff and non-tariff measures.
The European Communities are not counted as one country for origin purposes.
(m) Anti-dumping régime
Question 63.  
The Working Party are interested to ensure that Azerbaijan’s anti-dumping regime is
consistent with WTO requirements.  The Workin g Party note that Azerbaijan allows for price
undertakings.  Are undertakings made prior to a preliminary affirmative determination of
dumping and injury caused by such dumping?  Does Azerbaijan have antidumping legislation
and procedures in place to enable such price undertakings?  When is the draft law to be
finalized?
Answer:
The application of anti-dumping duties  is stipulated in the Article 8 of the Law of the
Republic of Azerbaijan "On customs tariff" (submitted to the WTO).  Concerning this, it is worthnoting that information given in the Memorandum "On Foreign Trade Regime of the Republic of
Azerbaijan" doesn’t indicate price undertakings, but refer to application of anti-dumping duties.
As it was mentioned in the Memorandum the draft law on anti-dumping is currently under
approval.WT/ACC/AZE/4
Page 39
Question 64.  
Please explain the current situation concerning the introduction of anti-dumping legislation.
Answer:
As it was mentioned in the Memorandum “On Foreign Trade Regime of the Republic of
Azerbaijan” submitted to the World Trade Organization draft law on anti-dumping is still in theratification process.
(n) Countervailing régime
Question 65.  
Does Azerbaijan intend to develop a countervailing duty regime?
Answer:
The application of countervailing duties is reflected in Article 9 of the Law of the Republic of
Azerbaijan "On customs tariff" (submitted to the WTO Secretariat).
The draft law on anti-dumping mentioned above includes the application of countervailing
duties.
(o) Safeguard régime
Question 66.  
Please confirm that Azerbaijan will submit any legislation on CVD or safeguards to the
Working Party for review, should such legislatio n be proposed. Please also confirm that any
legislation introduced will be in conformity with the WTO agreements.
Answer:
Application of countervailing duties is stipulated in Article 9 of the Law of the Republic of
Azerbaijan “On Customs tariff” (the Law was submitted to the WTO Secretariat).
As it was mentioned in the Memorandum on “Foreign Trade Regime of the Republic of
Azerbaijan” submitted to the WTO the draft law on anti-dumping is still under approval at present.
Application of countervailing duties is shown in this draft law as well.  The draft law will be sent to
the WTO Secretariat.
Question 67.  
Please submit to the Working Party the draft law on anti-dumping. How are AD duties
currently applied?
Answer:
Application of antidumping duties in the Republic of Azerbaijan is stipulated in Article 8 of
the Law of the Republic of Azerbaijan “On Customs Tariff” (submitted to the WTO Secretariat).  At
present the draft law on anti-dumping is still under approval as it was mentioned in the Memorandum
on “Foreign Trade Regime of the Republic of Azerbaijan” submitted to the WTO.  At present,antidumping duties are not applied in any form.WT/ACC/AZE/4
Page 40
The draft law will be sent to the WTO Secretariat.
2. Export regulation
(d) Export licensing procedures
Question 68.  
Please explain the process for designation as a “legal entity”. Please confirm to the Working
Party that foreign individuals and firms may obtain this legal status.
Answer:
Along with Article 2 of the Law of the Republic of Azerbaijan “On Enterprises” the Law of
the Republic of Azerbaijan that regulates activities of enterprises established through attraction of
foreign investments, both the Law of the Republic of Azerbaijan “On protection of foreign
investments” and international agreements of the Republic of Azerbaijan regulate their activities.
According to Article 16 of the Law of the Republic of Azerbaijan “On protection of foreigninvestments” enterprises with foreign investments can be established as joint-stock companies,
companies with limited responsibilities, other operat ing companies and partners, or in any other form
that doesn’t contradict with the legislation of the Republic of Azerbaijan.  Companies with shares of
foreign investors (joint venture companies); comp anies wholly owned by foreign investors (foreign
companies); representatives of foreign juridical persons (bureau, offices, agencies) can be establishedon the territory of the Republic of Azerbaijan.  Joint venture companies and foreign companies are
juridical persons of the Republic of Azerbaijan.  Companies with foreign investment can establish
subsidiaries, branches and representations that have the rights of foreign juridical persons according to
certain conditions of the legislation of the Republic of Azerbaijan and relevant legislation of foreign
countries.
Question 69.  
For each product subject to export licensin g, please provide the Working Party with a
description of the procedures for obtaining such a licence.
Answer:
As it was mentioned in the Memorandum on “Foreign Trade Regime of the Republic of
Azerbaijan” submitted to the World Trade Organization, licence is not required for exported products
(services).  We would like to note that the refere nce to paragraph (c) in paragraph (d) of the Part on
“Export Regulation” of the Memorandum does not describe issuing of licence.  Procedures for
exportation of goods listed in paragraph (c) are described in the same paragraph.
Question 70.  
Please confirm that Azerbaijan has no intentions of introducing export financing, subsidy
and/or promotional policies in the future.
Answer:
There is no direct export financing or subsidising in Azerbaijan.  The Government of the
Republic of Azerbaijan considers that it would be ex pedient to discuss application of export financing,
subsidy and/or promotional policies during negotiation period of accession of the Republic of
Azerbaijan to the WTO.WT/ACC/AZE/4
Page 41
3. Internal policies affecting foreign trade in goods
(a) Industrial policy, including subsidy policies
Question 71.  
Can Azerbaijan explain in more detail the nature of government involvement in infrastructure
development?  By what means the government encourage such development?
Answer:
Along with the creation of all conditions to attract foreign investment into the infrastructure,
the Government of Azerbaijan plays a role of guarantor by providing state guarantees for investments
directed to these industries.
(b) Technical regulations and standards
Question 72.  
Would Azerbaijan advise what plans it has to in troduce the changes to its laws and procedures
that would be required to meet its obligations under the WTO TBT Agreement?  Would
Azerbaijan advise its timetable and detailed work plan to implement the obligations of the
WTO TBT Agreement?  Does Azerbaijan envisage any problems in meeting these requirements
and, if so, in what respect?
Answer:
In relation to the Republic of Azerbaijan’s accession process to the WTO, Azerbaijan State
Standardization and Metrology Center is working on the program of arrangements in order to
implement the requirements of TBT Agreement connected to its sphere.
The followings are included to the program of arrangements:
- Expansion and improvement of legal base in standardization and certification spheres.
- Expansion and improvement of national standardization and certification systems.
- Establishment of the inquiry point and its future upgrading.
At present the Laws “On Standardization” and “On consumers rights protection” are effective
in the Republic of Azerbaijan.  The draft laws on “On Certification” and “On Metrology” have been
prepared by Azerbaijan State Standardization and Metrology Center submitted to the Milli Mejlis forratification.  Moreover, concerning Azerbaijan’s accession to the WTO the draft laws listed below are
to be prepared:
- Draft Law on “On Technical Barriers to Trade”;
- Draft Law on amendments and changes to the Law “On Standardization”.
At present, there is a lack of financial resources to set the necessary equipment, and train
personnel to start a full activity of the inquiry point.
Question 73.  
Please confirm Azerbaijan’s intentions to acced e to the TBT upon accession to the WTO. Please
outline the steps being taken to conform to this agreement, and a timetable for their
implementation.WT/ACC/AZE/4
Page 42
Answer:
Azerbaijan confirms its intentions to accede to the TBT upon accession to the WTO.  In
relation to the Republic of Azerbaijan’s accession process to the WTO, Azerbaijan State
Standardization and Metrology Center “Azdovlatstandart” is working on the program of arrangements
in order to implement the requirements of TBT Agreement connected to its sphere.
The followings are included into the Program of Arrangements:
- Expansion and improvement of legal base in standardization and certification spheres.
- Expansion and improvement of national standardization and certification systems.
- Establishment of the inquiry point and its future upgrading.
At present the Laws “On Standardization” and “On consumers rights protection” are effective
in the Republic of Azerbaijan.  The draft laws on “On Certification” and “On Metrology” have been
prepared by Azerbaijan State Standardization and Metrology Center submitted to the Milli Mejlis forratification.  Moreover, concerning Azerbaijan’s accession to the WTO the draft laws listed below are
to be prepared:
- Draft Law on “On Technical Barriers to Trade”;
- Draft Law on amendments and changes to the Law “On Standardisation”
Question 74.  
 Are there standards used in Azerbaijan of a voluntary or mandatory nature? If they are
mandatory, please state the rational behind this policy, and please state whether Azerbaijan has
the intention of gradually moving away from the use of former GOST-standards to the use of
international standards? If Azerbaijan confirms that it will move to the use of international
standards, please provide a timetable for this changeover.
 Answer:
 The standards used in Azerbaijan are of a mandatory nature.  The standards are prepared
according to the State Standardisation System.  There are mandatory and advisable requirements in
the standards.  The period of time is required to  move from mandatory to voluntary standards.  This
transition period is shown in the Program of Arrangements.
 International standards can be used according to the Law “On Standardisation”.
 There is the Information Centre and database on the EU standards, regulations and laws
established in Minsk under the EU’s Tacis Program, and our Centre directly uses it.  At the same time
according to the bilateral Agreement with the Turkis h Standards Institution (TSE) we can directly use
these standards.
 In addition it is worth noting that the Republic of Azerbaijan is a member of the International
Standardization Organization (1998).  According to the requirements of ISO/IEC intensive works are
being undertaken to adapt GOST-standards used between the CIS countries.
Question 75.  
 To what degree is the national standardisation body today an independent body; e.g. has the
symbiosis between regulatory and implementing functions been dissolved and has a distinction
between accreditation and certification functions been made?WT/ACC/AZE/4
Page 43
 Answer:
 Azerbaijan State Standardisation and Meteorology Centre “Azerdovlatstandart” is determined
by the government and executes functions on standardisation of governmental bodies.
“Azerdovlatstandart” does not depend on producer and consumer and is wholly an independent
organization.  There is no symbiosis between the structures implementing the functions.  At presentaccreditation and certification activities are carried out by the structural division of
“Azerdovlatstandart”.  Accreditation and certification works are carried out on the basis of the
differentiated documentation of the National Certification System.  The future plans consider
separation of these systems in conformity with th e international standards and conversion them into
independent systems.
Question 76.  
 Could Azerbaijan please provide more in-depth information to the Working Party on the
procedures and requirements connected with the mandatory and voluntary systems of
certification? For example: does the certification system contain the possibility of using a
manufacturer's declaration? Does Azerbaijan use pre-market certification in any product
areas?
 Answer:
 AZS National Certification System is applied in the Republic of Azerbaijan.  The System
includes mandatory and voluntary certifications.
 Mandatory certification is applied for products, which can cause harm to human life or the
environment.  Voluntary certification is the certif ication applied by the customer’s initiative on the
voluntary basis.
 In the process of the preparation the current AZS System didn’t consider to allow producers
to use declaration of conformity.  This matter will be taken into account during the process of the
making changes to the main documents of AZS National Certification System in the future.
 According to the legislation of the Republic of Azerbaijan sale and use of non-certified
products is prohibited in the Republic of Azerbaij an (The Law of the Republic of Azerbaijan “On
consumers rights protection”).
Question 77.  
 Are fees and standard processing times for conformity assessment procedures publicly
published?
 Answer:
 Information on the current certification and standardisation systems, bodies regulating these
systems, certificates, standards, conformity signs and their rules of their application is freely spread bythe National Body on Certification and Standardisation among producers (operators), trade
organisations, consumers and other persons involved.
 Depending on the amount of work price of standardising and certifying of product is counted
according to the current normative documentation.  The same documents were agreed and approved
by both the Ministry of Finance and the Ministry of Economy.WT/ACC/AZE/4
Page 44
Question 78.  
 Does Azerbaijan accept as equivalent certificates from third country certification bodies?
 Answer:
 The Republic of Azerbaijan accepts certificates from the countries that have mutual
agreements with the Republic of Azerbaijan on recognising works on accreditation and certification.Such agreements were signed with the CIS c ountries and Turkey.  Goods imported from other
countries must be certified according to the requirements of AZS National Certification System.
Question 79.  
 Does Azerbaijan have a list of goods subject to mandatory certification? Could Azerbaijan
provide a copy of this list and indicate if any changes to this list are foreseen.
Question 80.  
Please provide an exhaustive list of items subject to a certificate of conformity based on the HS
nomenclature should be provided.
 Answer:
 To questions 76 and 77, above.
 
 The list of types of items subject to mandatory certification of conformity in the Republic of
Azerbaijan is approved by the Resolution No. 343 of the Cabinet of Ministers of the Republic of
Azerbaijan (1 July 1993).  Changes to this list can be made in necessary cases.
The list of products subject to mandatory certification from 1 January 1994:
- Meat, preparations of meat, milk and dairy products
- Fish and preparations of fish- Bird’s meat, chicken eggs
- Grain, flour cereals
- Bread-roll and macaroni preparations
- Coffee, tea, mint and spices
- Natural honey- Fruits, vegetables and products made from them
- Animal and plant oil
- Animal or vegetable fats
-M a r g a r i n e
- Sugar, sweetens and other sugar confectionery
- Beer, non-alcoholic drinks, vinegar
- Food salt- Tobacco and tobacco products
- Perambulator
- Children toys on whiles such as three while bicycle, children’s automobiles, carriages
for toys
- Human toys- Other children toys, small size models, puzzles
- Children soothers, footwarmers
- Rubber masks for swimming, flippers
- Maximum 44 size children underwear, night-shirts pyjamasWT/ACC/AZE/4
Page 45
- Maximum 44 size combinations, underwear skirts and shorts
- Shirts, sweaters and similar tied wares with sizes up to 44
- Underwear for just born children and for children under school age.
- Maximum 44 size swimming suits and trunks for young kids
- Maximum 22 size socks and tights for children- Maximum 24 size children shoes
- Washing, bleaching and cleaning manufactories
- Rubber gloves and gloves used for medical purposes
- Not more than 1 kilowatt strong transformers except measures not considered for
private aviation
- Utilized Electro-mechanical machines made out of electrical motors
- Accumulated and non-inertial electrical water heaters, electrical boilers, electrical
carpet heaters, apartment heaters, electrical hands drying machine, electrical irons,
other socially used heating equipment.
- Electrical telephone sets
- Not more than 1000 V strong equipment for connection, to open safety-locks or to
connect in the electrical lines (knife-switc h, transformers, relays, vibration switcher,
plugs and wall outlets, lamp-sockets for electrical lamps, connecting boxes etc.).
- Hooks and half-hooks, other not moveable by itself transport means and their parts
- Instruments and means used in medicine, surgery, dentist and veterinary practice,
other electrical medicine devices, equipment aimed to identify the sight
- Socially used cleaning machines- Electrical motors and generators except ones aimed for private aviation
- Socially used welding machines
- Audio players and other audio recording equipment
- Gas and electric incandescenting lamps
- Insulated wires, cables and electric conductors with and without connecting parts- Radio television equipment
- Automobile and special types
- Pneumatic rubber tiers
- Wood-sawdust wicks and similar wood wicks hewed or not hewed from the soot
- Heating furnaces, heating cookers, kitchen stoves and ovens (including central
heaters made of small boilers), ovens, heaters for food and socially used similar
electrical equipment not made of black metal.
- Refrigerators and other refrigerating and freezing equipment or other types, heating
pumps
- Ammonium sulfate
- Exposured and identified cinema tapes
- Insecticides, roudenticides, herbicides, disinfecting medicine and their analogues
effecting germination and growth of plans
- Clothes drying machines
- Dish washing machines
- Machines automatically analyzing information and their block parts
- First elements and batteries- Soling equipment
- Distance telephone, radiogram, sets receiving and broadcasting radio and television
channels
- Melting safety-locks and melting connectors
- Motorcycles (including mopeds) and bicycles with fixed support engines- Two wheels and other types of unengaged bicycles
- Baby-carriages and their parts
- Yachts and other sport, relaxation sailing equipment, boats with oars and canoe
- Breathing sets, gas masks (except protecting masks)
- Orthopedic correctionsWT/ACC/AZE/4
Page 46
- Meter
- Electrical music instruments
- Single-barreled small calibre sport and hunting rifles
- Rivet instruments and bullets for painless animal killing or deafening guns
- Videogames shown by television- Motorcycle helmets
- Steal bottles heated up to 1,6 m Pa pressure
- Instruments with diamond
- Fluid substance pumps used under 36 V electrical transformer
- Utilized for social purposes air and vacuum pumps, air and gas compressors
- Clothes washing machines
- Wood processing machines- Drossels for luminous bulbs
- Electrical accumulators
- Different types of screws
- Socially used round saw
- Socially used polishing devices working at 36V and higher- Haircut and shaving electrical instruments working at 36 V and higher
- Equipment aimed to transfer electrical vibrations to the sound and not recording the
sound working at 36 V and higher
- Oscilloscopes, siectmeters and other equipment and sets constructed to measure and
control the voltage (except meters).
- Equipment and sets constructed to identify cosmic and other ion beams alpha-, beta-,
gamma-, and roentgen-.
- Threadless dangerous two-barreled sport and hunting rifles
- Small calibre guns
- Bullets for small shot guns- Lighting equipment
- Games working on coins or counters except machines used in automatic bowling
bars.
The list of goods subject to mandatory certification from 1 July 1994:
- Cognac, Champaign, alcohol-wine beverages and wine products
- Tines for child food
- Milk mixtures for child food- Dishes made from aluminum, cast-iron steal, copper-brass, enamelled, matted and
from nickel
- Oil-clothes and other types of products made of polyethylene
- Artificial leather and goods made from it
- Plastic goods- Mineral fertilizers
- Varnish and paint products, ticks and putties
- Socially used electrical devices
- Audio-video technology
- Air-conditions- Electrical pumps and compressors
- Socially used devices and electrical sets
- Agricultural machines, techniques and components
- Road building machines
- Equipment for oil wells- Glasses for windows and car windows
- Non-ferrous and ferrous metals, their alloys
- FurnitureWT/ACC/AZE/4
Page 47
- Gas equipment
- Sanitary techniques
- Facing materials
- Linoleum
- Oil refining goods- Cotton-fibre
- Stockinet underwear
- Goods made of leather and leather substitutes
- Leather-fur goods
- Shoes
- Incubators
- Natural and compressed gas
Question 81.  
Has Azerbaijan developed a quality assurance system? Could Azerbaijan please provide more
information to the Working Party on this system, or the plans to develop such a system in the
future?
Answer:
The Republic of Azerbaijan has a quality assurance system, but cannot use this system
properly because of economic crisis.  Application of this system is expected in the future.
Question 82.  
Could Azerbaijan please provide to the Working Party further information on its accreditation
system, or any plans to introduce such a system.
Answer:
Accreditation system in the Republic of Azerbaijan is included into certification system.  We
note that this system includes independent documentation on accreditation of testing laboratories and
units as well.  It is intended to separate accreditation system from certification system and convert itinto independent system in the future.
Question 83.  
Has Azerbaijan developed a post-market surveillance system? Could Azerbaijan please provide
further information on this system or on any plans to develop such a system?
Answer:
Post-market surveillance system is regulated by the Law of the Republic of Azerbaijan “On
consumers rights protection”.  This Law was submitted to the WTO Secretariat.WT/ACC/AZE/4
Page 48
Question 84.  
Could Azerbaijan please describe the work carrie d out to establish the National Enquiry Point?
Will it be fully operational on the date of accession to the WTO?
Answer:
Certain amount of work has been carried out in order to establish the National Enquiry Point.
At present we are going to obtain necessary equipment for establishment of the Point.  At the moment
it is difficult to show the date when it will be fully operational due to that establishment of the
National Enquiry Point requires resources and trained personnel.  However, we hope that it will be
fully operational on the date of Azerbaijan’s accession to the WTO.
Question 85.  
Can Azerbaijan agree to uphold the standstill commitment also in this area, in that new
technical regulations, standards, conformity assessment procedures and labelling requirements
introduced as from 1 July 1999 should be fully TBT compatible?
Answer:
No changes inconsistent with the Agreement on TBT in new technical regulations, standards,
conformity assessment procedures and labelling requirements will be introduced from 1 July 1999.
Question 86.  
Does the legislative system allow sufficiently long lead times for phasing in of new legislation in
order to allow economic operators to adapt their products or production methods? What is the
average lead time given from the adoption of the new rules to their entry into force?
Answer:
Legislative system allows sufficient lead time for phasing in new legislation in order to allow
economic operators to adapt their products or production methods.
Laws of the Republic of Azerbaijan, Decrees of the President of the Republic of Azerbaijan
and Resolutions of the Cabinet of Ministers become effective after their promulgation date, if it is not
foreseen otherwise therein.  After the official registration, the normative legal acts of corresponding
executive bodies, normative acts of local executive bodies, local authorities and the National Bank ofthe Republic of Azerbaijan become effective after their official promulgation, if it is not foreseen
otherwise therein.  The date of the enactment of the part (section, article, paragraph) of the normative
legal act can differ from the date of the enactment of the whole normative legal act.
While approving standards date of entry into force is determined taking into account
arrangements necessary for application of standards.  Usually duration of standards usually is not
indicated.
Question 87.  
Does the legislation explicitly provide for non-discrimination and national treatment between
foreign exporters and domestic producers and their goods? Please indicate relevant references.WT/ACC/AZE/4
Page 49
Answer:
The legislation of the Republic of Azerbaijan transparently provides legal equality and
national treatment between foreign exporters, domestic producers and their goods.  They were
stipulated in the Decree No. 26 (22 November 1998 ) of the President of the Republic of Azerbaijan
“On Rules of acceptation and application of international (regional) and intergovernmental standards,norms, rules and recommendations at the territory of the Republic of Azerbaijan”, as well as in the
Law “On standardisation”.
Question 88.  
Could Azerbaijan please provide an overview of regulations relating to different product(s)
areas if such legislation exists?
Regulations relating to different product(s) areas do not exist in the Republic of Azerbaijan.
Question 89.  
Please explain in detail on what kind of int ernal standards have been introduced so far.
Answer:
At present time the following domestic standards are being implemented:
- Intergovernmental standards – GOST standard;
- State Standards of the Republic of Azerbaijan – AZS;- Sphere Standards of the Republic of Azerbaijan – SSAZ – applied for products,
works and services of the corresponding sphere
- Standards of enterprises – ES – applied only for domestically produced and internally
used products, processes and services.
- Standards of scientific-technical, engineering societies and other public associations –
STESPAS.  Science-technology and engineering organization standards are being
used through rules set by these organizations.
- Technical conditions – TC AZ, sets requirements for certain products and services,
regulates relationships between producer and consumer.
Question 90.  
Information on the inquiry point required by the TBT Agreement should be provided.  The
detailed action-plan for establishing the inquiry point should be given.
Answer:
Certain works on the establishment of national i nquiry point are being carried out.  At present
time necessary equipment needed for the inquiry point is getting purchased.  Considering that the
implementation of these issues requires financial resources and personnel it is difficult to tell the exact
starting date of its full activity.
The followings will be responsibilities of inquiry point:
- Provide legislative bodies, executive power and all types of ownership of enterprises
with appropriate directions for the technical regulation of the acting Agreement,
information on national, regional and foreign standards, accreditation system,
certification of products, processes and services;WT/ACC/AZE/4
Page 50
- Provide member countries to the Agreement with contexts of acting normative
documents, conformity assessment procedures, information on national accreditation,
normative documents implemented or used by regional executive or non-state body
upon their request;
- Provide local involved bodies with comment reports to the national standard project
draft come from the WTO Secretariat, ISO/IEC Information Center and foreign
country members to the Agreement;
- Provide member countries to the Agreem ent with comments to the acting normative
documents and implemented projects, which on Azerbaijan side opinion are creating
obstacles in trade relationships.
(c) Sanitary and phytosanitary measures
Question 91.  
Does Azerbaijan anticipate any difficulties in applying the SPS Agreement in full upon
accession?
Question 92.  
Does Azerbaijan envisage any problems in meet ing these requirements and, in what respect?
Answer:
To questions 88 and 89, above.
Difficulties that the Republic of Azerbaijan can face with in complying with the commitments
under the SPS Agreement of the WTO are listed below:
- Absence of financial resources and corresponding institutions to carry out scientific
researches in the sphere of biology and bioecology of the quarantine organisms, theiradaptation to the local environment, identification of their infection areas and to
forecast development etc. of foreign quarantine organisms in the local environment;
- Shortage of high-qualified local experts and modern technologies to carry out the
Phytosanitary quarantine control;
- Absence of storage's, disinfecting cameras and store houses to carry out initial
Phytosanitary check-measures complying with the world standards, which are basis
of the Phytosanitary quarantine control, i.e. check-points at the state borders.
Main problems of the Ministry of Health of the Republic of Azerbaijan in complying with the
commitments are absence of modern more sensitive methodologies and laboratory equipment based
on express methods, collection of international standards and exchange with the information regarding
quality of products.
Question 93.  
Would Azerbaijan advise what plans it has to in troduce the changes to its laws and procedures
that would be required to meet its obligations under the WTO SPS Agreement, and the
timetable for these?
Answer:
The Ministry of Health and the Ministry of Agriculture take the Laws of the Republic of
Azerbaijan "On Sanitary-Epidemiological welfare"  (25 February 1992), “On veterinary medicine”,WT/ACC/AZE/4
Page 51
“On food products” as a priority in fulfilling the commitments of the WTO Sanitary  and Phytosanitary
Agreement, as well as the Law "On protection of consumers rights" (19 September 1995) to prevent
production and importation of products potentially dangerous for human life.
Sanitary protection measures in the territory of the Republic of Azerbaijan are regulated by
the Resolution No. 140 of the Cabinet of Ministry (09 March 1993).  It should be noted that the draftof new improved rules instead of the Resolution No. 140 of the Cabinet of Ministry is in the co-
ordination process at present.
The existing laws, rules and instructions of the Ministry of Agriculture of the Republic of
Azerbaijan in the phytosanitary quarantine sphere fully comply with the existing international laws
and procedures.  Therefore, there is no need to make any changes in this sphere.
Question 94.  
Could Azerbaijan provide more information on requirements relating to “quality” of imports
and the certification required for this purpose?
Answer:
The certification in the Republic of Azerbaijan is regulated by the Resolution No. 343 of the
Cabinet of Ministers "On application of the certification of products (works and services) through
stages" (01 July 1993).  The certification of imported products states that conditions of agreements(contracts) concluded on imported products to be used directly by its destination in the Republic of
Azerbaijan should note presence of the certification of a product and a certificate acceptable by the
national certification authorities.  Obtained national certificates of conformity, or accepted foreign
certificates and conformity signs together with cargo customs declaration are to be submitted to the
customs authorities and are considered as necessary documents to obtain a permission for a product toenter the territory of the Republic of Azerbaijan.
The main requirement for imports to Azerbaij an is respective documents from the foreign
countries containing safety indications of imported products that can have a potential danger for
human organism.  Along with this, in order to determine safety of exported and imported products the
Ministry of Health carries out hygienic certification of products according to the Regulation “On theMinistry of Health of the Republic of Azerbaijan” adopted by the Decree No. 48 of the President of
the Republic of Azerbaijan (29 December 1998).
Furthermore, state veterinary control over imported and exported raw materials of animal
origin is applied, and laboratory inspections of these products are carried out for veterinary-sanitary
purposes.
According to the requirements of the Law of  the Republic of Azerbaijan "On Veterinary
Medicine" and within a framework of the international rules the State Veterinary Committee of theRepublic of Azerbaijan has worked out eight veterinary certificate forms related to different types of
products of animal origin comprising requirements of the state veterinary body of the Republic of
Azerbaijan and sent to the 43 trade partner countries, including Australia.  Raw materials of animal
origin and products obtain permission for export from the Republic of Azerbaijan based on the
requirements of importing country or "The International Veterinary Code", if such requirements donot exist.WT/ACC/AZE/4
Page 52
(f) Free zones
Question 95.  
Please submit to the Working Party the draft law "About Free Zones" as soon as it is available.
Answer:
There is no draft law "About Free Zones" available in the Republic of Azerbaijan at present.
Question 96.  
Does Azerbaijan anticipate that free zones will be created? If so, please confirm that free zones
will be fully subject to the coverage of Azerbaijan's future commitments as a WTO member.
Answer:
At present the issue on creation of free zones in the Republic of Azerbaijan is not being
considered.
Question 97.  
Can Azerbaijan provide more details on the exte nt to which barter trade is engaged, the
products and entities concerned, volumes of this trade, and the conditions under which such
trade takes place?
Answer:
Barter trade in the Republic of Azerbaijan is carried out in the order reflected in the ”Rules on
import-export regulation in the Republic of Azerbaijan" approved by Decree No. 609 of the President
of the Republic of Azerbaijan (24 June 1997):
- Barter operations are considered a mutual exchange of goods (services or intellectual
property) in an equivalent am ount without payment of cost.
- Duration of barter operations in an equi valent amount of goods sent and received is
up to 90 days.  In case if exchange of goods in an equivalent amount don’t terminate
within this period, then settling is to be carried out in ten bank days by currency
indicated in contract and resources are to be transmitted to a bank account of exporter
in the Republic of Azerbaijan;
- One copy of customs declarations for barter operations of goods sent and received is
to be transferred to authorized banks and the Ministry of Trade by customs authorities
in seven days from date of declaration of goods;
- Barter contracts concluded by state-owned enterprises and other enterprises with over
that 50 per cent of a state share are to be registered at the Ministry of Trade, barter
contracts concluded by other residents are to be declared at the customs authorities;
- If goods are not received in an equivalent amount within the periods indicated in the
second paragraph and mutual settling is not carried out, then cost of goods that havenot been received is considered as hidden profits, and residents exporting goods are
made responsible for it.
Barter trade was up to US$ 20,2005.6 in 1997, and US$ 13,3961.7 in 1998.  Barter operations
are conducted primarily in oil equipment, machinery and chemical products.WT/ACC/AZE/4
Page 53
(l) Government procurement practices
Question 98.  
Does Azerbaijan intend to join the Government Procurement Agreement?  If not, why not?
Answer:
At present the Republic of Azerbaijan is analyzing the issue concerning joining the
Government Procurement Agreement.
Question 99.  
Does the Azerbaijan government collect statistics on procurement?
Answer:
Governmental procurement of goods and services can be carried out inside of the country and
imported from outside of the country.  The statistics on foreign trade of the Republic of Azerbaijan
with other countries is based on customs declarat ion and reflects relationships between enterprises,
companies and organizations of any other country and enterprises, companies and organizations of the
Republic of Azerbaijan.  The existing declaration does not permit the use of statistics gathered on
behalf of the government.  Along with this, while composing the national accounts system purchases
of goods and services necessary for the Office of the President, Cabinet of Ministers and law
defending bodies are taken in a value form from the state budget.
Government procurement policy in the Republic of Azerbaijan is carried out by the State
Agency on Procurement.  The State Agency colle cts information on state procurement of goods,
works and services and  reports to the Cabinet of Ministers.  A quantity of procurement carried out on
the competition basis, names of the organizations carrying out of procurement transactions, financing
resources and allocated financial means (state and local budgets, credits and grants from internationalfinancial institutions, financial means of organizations themselves etc.) organizations received
procurement contract, supposed value of the items subjects to the procurement, amount of saved
government expenses etc. are reflected in the report.
Information collected on the procurement carried within the country and in the foreign
countries is analyzed and used for carrying out of beneficial procurement transactions in the future.
Question 100.  
What is the overall value of publi c sector purchasing in Azerbaijan?
Answer:
The total sum of the procurement transactions carried out by tendering at the state budget
expenses in 1998 and registered by the State Agency (the State Agency on Procurement works since
June 1998) constituted 369.7 billion manats which is about 92425 thousand of US dollars.  The total
sum of state procurement carried by tendering in 1998 constituted 998.0 billion manats, which isabout 249500 thousand US dollars.
Question 101.  
Please provide a breakdown to the Working Party of the public procurement market both by
contracting entity and product type.WT/ACC/AZE/4
Page 54
Answer:
In accordance with the Regulation "On Procurement of goods (works and services) by the
budget organizations" approved by the Decree No. 524 (19 December 1996) of the President of the
Republic of Azerbaijan state procurement concerning participation of contractors is divided into
domestic and international procurements.
Domestic procurements are carried out in the following cases:
- In cases of limitation of number of participants in the procurement by only the
contractors of the Republic of Azerbaijan in cases provided in the normative acts on
the procurement; or
- In cases when procuring organization decided that since the price of the procured
goods are low enough that only contractor s of the Republic of Azerbaijan would be
interested
The division of market by the type of goods is not carried out upon the state origin of the
contractors participating in the state procurement.
Question 102.  
Is price the only criterion for evaluating bids, or are contracts also evaluated by reference to an
"economically most advantageous offer" approach?  If so, under what conditions are thedifferent evaluation methods used?
Answer:
The followings are the criteria for evaluating bids according to the Regulation "On
Procurement of goods (works and services) by the budget organizations" approved by the Decree
No. 524 (19 December 1996) of the President of the Republic of Azerbaijan:
Buyer determines criteria for evaluating bids and determines the relative price for each
criterion and rules to use them in the evaluating process.  These criteria are given to the contractors
and have only concern to the following issues:
- professional qualities, experiences, reputation, trustworthiness, knowledge of work
and administrative abilities of contractor and his personnel;
- efficiency of an offer made by contractor to meet the needs of buyer;
- Price of offer, taking into account any preferential corrections made according to the
second item below, including any supporting or related expenses;
- Impact of acceptance of tender-bid on the balance of payment and currency resources
of the Republic of Azerbaijan; participation of local contractors; agreement on mutual
trade offered by contractors; offer-related opportunities for economic development, as
well as domestic investments and other types of enterpreneurship, elimination ofunemployment, inflow of technologies and training of personnel.
- Defense and security issues.
In the process of evaluating and comparing of offers buyer reserves the right to make
preferential corrections in favour of domestic service suppliers in the cases determined in the
legislation acts on procurement and with the condition the relative decision to be approved by theState agency.  Result of this matter is reflected in the report of procedures on procurement.
In accordance with the Regulation "On Procurement of goods (works and services) by the
budget organizations" approved by the Decree No. 524 (19 December 1996) of the President of theWT/ACC/AZE/4
Page 55
Republic of Azerbaijan the criteria for the evaluation of contractor’s bids are provided in the tender
documents.  Therefore, procuring organization should note in the tender documents criteria and their
comparative importance it is going to consider while determining the winner tender also any
preferential corrections and any factors other than price.
At the same time, the evaluation of tender offers is carried out in the following manner,
complying with the Article 32 of the Regulation:
Buyer does not accept the tender bids in the following matters:
- If the contractor biding the tender doesn’t comply with the professional requirements;
- If the contractor biding the tender disagrees with financial corrections made to any of
accounting issues;
- If the tender application doesn’t comply with the formal requirements;
- in the cases of submission of dumping prices for the tender goods which are less than
the normal price, initial value, preparation or service provided, which is injuring the
economy of the Republic of Azerbaijan or creates a danger of or reason for it
appearance or prevents the development of the national economy.
In order to determine the winner of the tender, buyer evaluates and compares accepted tender
bids according to the criteria and procedures reflected in the process of documentation of the tender.Criteria not reflected in the tender documentation are not being used.
In cases shown below tender offer is considered to be the winner:
- tender offer based on the lowest prices considering preferential corrections; or
- tender offers evaluated by the buyer as the most beneficial on the basis of criteria
shown in the tender documentation if it was provided thereof (these criteria should beobjectively evaluated by the quantity and comparative determinations and if possible
value equivalency should be determined while evaluation).
The buyer considers only the issues listed below while evaluating the most beneficial offer:
- the cost of the tender offer taking into consideration any preferential corrections;
- exploitation of goods (works ands services), technical service and maintenance
expenses, sending of goods, terms for completion of works and provision of services,
functioning characteristics of goods (works and services), payment and guarantee
conditions for goods (works and services);
- possible impact of acceptation of the tender offer to the payment balance and
currency resources of the Republic of Azerbaijan; agreement on the mutual trade
offered by the contractor; amount of domestic components of goods (works and
services) including processing, labor and materials offered by the contractors;opportunity opened for the development of the economy related with the tender
offers, for internal investments and other ki nds of enterpreneurship activity, abolition
of unemployment, granting exclusive rights to the local contractors in preparation of
specific types of goods, for awarding technology and preparation of professional
staff;
- security and protection issues.
The buyer can make preferential corrections in favour of works of local executives, domestic
production of goods or tender offers related to the provision of domestic services while evaluation and
comparison of tender offers provided that St ate Agency would approve a relative decision.
Preferential corrections are reflected in the reports related to the procurement procedures.WT/ACC/AZE/4
Page 56
Question 103.  
Does Azerbaijan legislation contain detailed rules on the requirement to publish tender and
contract award notices?  If so, what informatio n must these notices contain, and where are they
publish?
Answer:
According to the Regulation "On Procurement of goods (works and services) by the budget
organizations" approved by Decree No. 524 (19 December 1996) of the President of the Republic of
Azerbaijan the procedure to attract the tender bids consists of the following items:
Buyer publishes the invitation in the "Halg Gazeti" newspaper to attract tender bids to participate in
auctions or in preliminary specialty selection or attracts tender bids for preliminary specialty
selection.
In order to extend the range of contractors-participants of procurement procedures and to
expand competition strongly the invitation for par ticipation in auctions and preliminary specialty
selection is also being published in internationally distributed newspapers or by specialized
publication agency, technical or specialized publication agency or in technical or specialized
magazine in one of the languages used in international trade.
According to the same Regulation the invitation for participation in auctions at least should
contain the following information:
- Name and address of the buyer;
- Characteristics, amount and place of destination of sent goods, characteristics of and
place where works to be done, characteristics of and place where services to be
supplied;
- Wished or demanded date by when goods should be delivered and works should be
finished or schedule of services to be supplied;
- Criteria and procedures needed in the process of evaluation of specialty qualifications
of contractors;
- Information given on the possibility of the contractors to participate in the
procurement procedures regardless of the country of origin or limitation on the
amount of participants depending on the country of origin and on the case;
- Methods and place of obtained tender documentation;
- Fees that buyer charge for getting tender documentation (if any);
- Type of currency and mode of payment of fee for getting tender documentation;
- Language or languages that tender documentation are typed in;
- The closing date and place for submission of tender bids.
Question 104.  
Can suppliers who dispute the award of a contract seek redress through national courts, or a
tribunal system?
Answer:
All disputes raised during notification and execution of tendering are being settled by the
Economy Court of the Republic of Azerbaijan.WT/ACC/AZE/4
Page 57
Question 105.  
Is there any offset policy and, if so, how often are offset arrangements negotiated on a case-by-
case basis?
Answer:
Contractor, that has a right to claim, can complain to the Cabinet of Ministers.  After the
Cabinet of Ministers receives such a claim, it immediately notifies buyer or the State agency.  If the
Cabinet of Ministers doesn't reject the claim, it can force buyer to compensate to contractor the
reasonable expenses caused by illegal action, decision or illegal procurement procedure carried out by
the buyer.  If the claim is not submitted to the court in a proper way, this decision is considered to be a
final decision.
In accordance with Article 23.3 of the Law of the Republic of Azerbaijan “On Tender”
material losses suffered by the tenderer(s) as a result of illegal actions of the chairman or member(s)of tender commission and if it is proved by the court, will be reimbursed by organizer of the tender.
Whereas organizer of the tender should place official statement about such reimbursement in the same
newspaper where announcement about tender was published.
Question 106.  
Does Azerbaijan's procurement law make provision for a system of domestic and price
preferences?  If so, are these mandatory or optional and how precisely do they work and how
are they managed?
Answer:
In the process of evaluation and comparison of tender proposals the buyer has the right to
make preferential corrections in favour of tender bids related to work of domestic operators, domesticgoods or/and services.
Question 107.  
Does a policy to support local industry exist in Azerbaijan, and is the procurement of certain
products reserved for local industry?
Answer:
A policy to support local industry does not exist and procurement of certain products is not
reserved for local industry.
Question 108.  
What are the procedures and the criteria to short-list candidates in the cases of limited
tendering?
Answer:
The followings are conditions used in cases of limited number of participants in accordance
with the Regulation "On Procurement of goods (wor ks and services) by the budget organizations"
approved by Decree No. 524 (19 December 1996) of the President of the Republic of Azerbaijan:WT/ACC/AZE/4
Page 58
In order to provide efficiency and economy according to the second item buyer can carry out
the procurement by means of auctions with limited number of participants, but with corresponding
decision on approval made by the State agency in cases shown below:
- Extremely difficult goods (works and services) or goods (works and services) with
special characteristics are available only from limited number of contractors;
- Time and expenses needed for consideration and evaluation of tender bids are more
expensive than initial value of procured goods (works and services).
If buyer carries out the limited auction under conditions described in the item above, then it
attracts tender proposals from all contractors that have goods (works or services) ready for sale.
In case if buyer carries out the limited auction under conditions described in the item above,
then it selects tender proposals of contractors without discrimination and attracts sufficient number of
contractors to have adequate competition.
If buyer carries out the limited auction, it should publish notification about the procedure of
the limited auction in the "Halg Gazeti" newspaper.
In accordance with the legislation regulating procurement when closed tender is carried out,
initial list of contractors (short list of candidates) is being prepared based on the following matters:
- if list of potential tenderers is restricted and known;
- if subject of tender is related to defence and security of the country;
- is specified funds have been allocated for implementation of tender;
- if expenses and time necessary for the review and evaluation of many tender bids are
more than the value of the procurement goods (works and services).
Question 109.  
Does Azerbaijan have any trade agreements with other countries which cover public
procurement? If so, please provide a list of countries and details of procurement agreements.
Answer:
Azerbaijan has not signed any trade agreement covering public procurement with other
countries.
(m) Regulation of trade in transit
Question 110.  
Please detail for the Working Party the charges levied on the transit in goods.
Answer:
In accordance with the Resolution No. 91 of the Cabinet of Ministers of the Republic of
Azerbaijan "On amount of customs fees for Custom s Registration" (22 April 1998) while passing the
customs border of the Republic of Azerbaijan goods under the customs transit regime are leviedUS$ 30 for customs registration, and US$ 10 for each extra Transit Cargo Declaration at the exchange
rate determined by the National Bank of the Republic of Azerbaijan.
Transit goods listed below are not levied for customs registration:WT/ACC/AZE/4
Page 59
- Azerbaijan goods in transit coming from the territory of foreign countries;
- Goods in transit in cases determined by the international agreements and Contracts of
the Republic of Azerbaijan;
- Goods in transit transferred by railway;
- Goods in transit transferred by applying book of International Cargo Carriage;- Goods in transit transferred by the customs carrier;
- Goods in transit, which are exempt from duties and taxes at the territory of the
Republic of Azerbaijan.
4. Policies affecting foreign trade in agricultural products
Question 111.  
When will Azerbaijan be in a position to submit the information required in WT/ACC/4?
Answer:
The Republic of Azerbaijan is preparing the “Information to be provided on domestic support
and export subsidies in agriculture” (WT/ACC/4) at present.
Question 112.  
How does the artificial irrigation system influence prices and profits?
Answer:
Starting from 1997, charges for usage of important surface and subsoil water units, including
water reservoirs, main water pipelines and water pipelines between entities, channels, and other
irrigation systems, which remain state-owned during the period of transition to a new production
relations and make up approximately 90-95 per cent of purposeful fixed assets involved in water
economy of the republic have been gradually established for water irrigation, water supply, and otherpurposes.  From this point of view the cost of water given by the irrigation systems is also taken into
account in obtaining the gross income and in forming of prices of agricultural products produced by
farmers, cooperatives, leased and other kinds of entities.
Calculated differentially for various irrigation systems, water fees (collection of which is
envisaged to be collected at 10-15 percents of total exploitation expenses) and foreseen budgetresources do not provide a normal and constant operation of the systems.  In the nearest future, under
conditions of full payment for cost of water given for irrigation, water fees will make up
approximately 10-15 per cent of agricultural product’s cost formed during production period.
A chargeable usage of water has been gradually carried out by the Resolution the Cabinet of
Ministers of the Republic of Azerbaijan No. 150 “The Provisions on the rules of chargeable usage of
water in the Republic of Azerbaijan”, of 26 October 1996.
(b) Exports
Question 113.  
The Working Party hopes that Azerbaijan will confirm that it will continue not to impose
export subsidies on agricultural products al though Azerbaijan currently has no export credit
guarantees.WT/ACC/AZE/4
Page 60
Answer:
Not imposing the export subsidies on agricultural products in Azerbaijan is mentioned in the
Memorandum of the Republic of Azerbaijan on Foreign Trade Regime submitted to the World Trade
Organization.  At present time imposition of those subsidies is not foreseen in any future
corresponding state programs as well as in any measures implemented by the Government of theRepublic of Azerbaijan.  The government of the Republic of Azerbaijan believes that the issue on
continuation of not imposition of subsidies on agricultural products in the future should be discussed
in the process of accession of Azerbaijan to the WTO.
Question 114.  
Please provide the information requested in WT/ACC/4 on domestic support and export
subsidies.
Answer:
The Republic of Azerbaijan is now working on the information required in "Domestic support
and export subsidies in agriculture" (WT/ACC/4).
V. TRADE-RELATED INTELLECTUAL PROPERTY RÉGIME
5. Laws, decrees, regulations and other legal acts
Question 115.  
Please provide all TRIPs-related legislation to  the Working Party as soon as such draft or
passed legislation is available.
Answer:
TRIPs-related laws of the Republic of Azerbaij an "On Copyrights and related rights", "On
Antimonopoly activity", "On Unfair competition", “O n Trademarks and geographical indicators" and
the "Customs Code" related to the Agreement have  already been submitted to the WTO Secretariat.
The Law of the Republic of Azerbaijan "On Paten t" is enclosed.  The Republic of Azerbaijan will
submit TRIPs-related draft laws and legislation to be adopted to the WTO Secretariat.
Since 2 April 1999 the Republic of Azerbaijan has been making changes and additions to the
Civil Code and the Code of the Republic of Azerbaijan "On administrative offences" with regard toimplement the Law "On Copyrights and related rights" to make them in conformity with new law
concerning copyrights and with international standards.
In addition the Republic of Azerbaijan is a member to an Agreement on "Cooperation in the
sphere of Copyrights and related rights" signed between the CIS countries (07 February 1996).  The
Republic of Azerbaijan is a party to the World Geneva Convention "On Copyrights" (since
7 February 1996 and since 27 May 1973 (the date when the USSR became a member to the
Convention)) and a member of "The Berne Convention for the Protection of Literary and ArtisticWorks" (27 November 1998) as well.
It is essential for Azerbaijan to join the Agreements "On Copyrights" and "Performances and
Phonograms" (the Internet Agreements) of the World Intellectual Property Organization.  It is also
worth for the Republic of Azerbaijan to join the Geneva Convention "On the Protection of phonogram
producers against illegal reproduction of phonograms".WT/ACC/AZE/4
Page 61
Question 116.  
Please detail the procedures for the restoratio n of intellectual related rights, should these be
violated in Azerbaijan. Please confirm that foreign individuals and firms have the right to
address themselves to the bodies, which administer the Civil-Procedural and Criminal-
Procedural Codes of the Republic of Azerbaijan in intellectual property and related rightscases.
Answer:
In compliance with the legislation of the Republic of Azerbaijan, a civil, administrative and
criminal responsibility sets in for the violation of copyrights and related rights.
Civil legal measures
The owners of copyrights and related rights can appeal to the court for restoration of their
violated rights.
In accordance with the legislation of the Republic of Azerbaijan in addition to the general
methods of civil-legal protection (acceptance of civil rights, restoration of situation before violation of
rights, prevention of actions violating the rights, compensation of damages, etc. - Articles 6, 491-493
of the Civil Code) and according to Article 45 of the Law on "Copyrights and related rights" the
sanctions listed below can be applied upon the demand of complainant:
- Penalty on the profit, received by the infringe in the result of copyrights and
cooperate rights breaking, in place of compensation of losses.
- Payment of compensation in the amount of from 100 to 50 thousand minimal wages
in place of losses compensation or penalty on profit.
Criminal legal measures
(According to Article 140 of the Criminal Code) are the followings:
- reformatory works up to 2 years;
- Payment of penalty in the amount of from 250 to 280 minimal wages.
Administrative legal measures
(Article 186-1 of the Code "On Administrative offences"):
- Payment of penalty in the amount of twenty minimal wages
- Demand to stop the actions causing danger and breaking of copyrights and related
rights of the authorized officials.
Article 137 of the Civil Procedural Code contai ns the measures to satisfy the claim and when
a writ of the judge is made then it is stipulated in cases of temporary measures to put arrest on money
and property of the defendant or/and property of defendant at other persons’ disposal and to prohibit
defendant to undertake certain actions.
The procedures of the recovery of violated copyrights and related rights in Azerbaijan are
carried out according to the general rules described be low.  It is provided in legislation that owner of
intellectual property and related rights have the right to demand directly to stop actions violating its
rights and recover its violated copyrights and related rights.  Owner of violated copyrights and related
rights can implement the recovery of its rights through the corresponding executive bodies orWT/ACC/AZE/4
Page 62
organizations, managing these rights on the collective bases.  Along with this the authorized state
bodies and organizations, managing these rights on the collective bases have the demand-right to stop
the actions either violating copyrights and related rights or containing a danger of their violation
(Article 44).
When the corresponding executive body of the Republic of Azerbaijan dealing with
copyrights submits a claim to protect copyrights and related rights, then it doesn't pay a state duty
(Article 46).
The legislation of Azerbaijan exempts complainant from paying a state duty in case of
appealing to the court with the claim for the protectio n of the copyrights and related rights (Article 3
of the Law "On State duties").
The above-mentioned procedures of recovery of the copyrights and related rights have also
concern to the authors and owner’s rights of the countries-members of the international agreementsthat the Republic of Azerbaijan participates in.
In accordance with Article 453 of the Civil Procedural Code of the Republic of Azerbaijan
foreign citizens, foreign enterprises and organizations have the right to apply to the courts of the
Republic of Azerbaijan and use the same civil procedural rights as any citizen of the Republic of
Azerbaijan to protect their interests.
In accordance with Article 23-3 of the Criminal Procedural Code of the Republic of
Azerbaijan court procedures concerning criminal actions of foreigners and persons without citizenship
in the territory of the Republic of Azerbaijan are regulated according to the rules reflected in the
Criminal-Procedural Code.  Therefore we confirm that, according to the Civil Procedural and the
Criminal-Procedural Codes of the Republic of Azerbaijan (the regulations for representatives ofcompanies and other juridical persons) physical and juridical persons of the countries-members of the
bilateral and multilateral agreements that Azerbaijan is participating in have the right to apply to the
corresponding bodies of the Republic of Azerbaij an concerning copyrights and related rights.
It also necessary to note that in accordance with the legislation of the Republic of Azerbaijan
foreigners can take the following three main legal forms:
- those that demonstrated their works at the territory of the Republic of Azerbaijan for
the first time.  In this case, provisions of the Law consider them as the authors of the
Republic of Azerbaijan
- those physical persons that permanently live in Azerbaijan, but are non-citizens of the
Republic of Azerbaijan.  In this case their author’s rights don't differ from the rights
of the citizens of the Republic of Azerbaijan and provisions of the Law concern to
them as well.
- citizens of foreign countries.  In this case their author's rights are regulated by
bilateral and multilateral agreements that Azerbaijan is participating in.
In accordance with Article 36 of the Law of the Republic of Azerbaijan "On Trademarks and
geographical indicators" and Article 42 of the Law "On Patents" all foreign physical and juridical
persons use the rights provided in these laws equally with citizens of Azerbaijan.
In accordance with Article 33 of the Law of the Republic of Azerbaijan "On Trademarks and
geographical indicators" and Article 40 of the Law "On Patents" disputes arising from regulation of
rights related to subjects of industrial property are considered in the court based on regulations
provided in the legislation of the Republic of Azerbaijan.WT/ACC/AZE/4
Page 63
VI. TRADE-RELATED SERVICES RÉGIME
1. General
Question 117.  
Azerbaijan is requested to provide the Working Party with a substantial initial offer on services
in the GATs framework, binding liberal market access conditions and national treatmentguarantees on an MFN basis fo r foreign services suppliers.
Answer:
The Republic of Azerbaijan will submit the list of commitments in GATS schedule of
commitments during accession period to the WTO.
Question 118.  
Please outline in detail the “ ecological, sanitary and other relevant standards” which may be
conditional for the issuance of licence for various services. Please provide this information in the
form of a list of service sectors, and the neces sary standards required to  obtain a licence in each
sector.
Answer:
According to Decree No. 637 of the President of  the Republic of Azerbaijan “On approval of
the list of activities demanding special permission (licence)” (04 October 1997) starting from 1998 theCabinet of Ministers of the Republic of Azerbaijan has been adopting the rules for issuance of special
permission (licence) for conducting activities in services sector.
While conducting their types of activity owners of  licence are to comply  with the legislation
acts of the Republic of Azerbaijan, regulations and rules, including ecological, sanitary and other
relevant standards regulating certain activities.
During issuance of licence person wishing to provide certain services should confirm that
means to be used for conducting this activity ar e in conformity with these standards.  The
requirements of this kind are applied in a limited number of services.
For instance, for issuance of special permission (licence) for design, construction and
exploitation of main pipelines for transportation of gas, oil and oil products the documents mentionedbelow are to be submitted to relevant governmental body:
- project or other techical documents confirming protection of environment and
population for enterprises conducting potentially dangerous type of activity and
comlping with technical safety rules existing in certain economies and industries
within the territory of points (regions) and with requirements of normative acts;
- copies of projects and certificates of conformity assesment issued for explosive-fire
preventive equipment, engines and machines produced and used in potentiallydangerous production spheres.
However, because of the information in the form of a list of service sectors and on necessary
standards required to obtain a licence in each sector is very comprehensive, it is not possible to send it
to the Working Party now.  This process involves information gathering form with many ministries
and organisations.WT/ACC/AZE/4
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Question 119.  
Please state Azerbaijan’s intention to create info rmation sources as stipulated in the GATS, and
a timetable for their creation and implementation. (pg. 53 of Azerbaijan’s submission
WT/ACC/AZE/2).
Answer:
At present the Republic of Azerbaijan analyzes the matter of establishment of information
sources as stipulated in the GATS.  Therefore, it is impossible to show a timetable for their creation
and implementation at present.
Question 120.  
Please confirm that there are no limitations on foreign participation in, and ownership of,
services.
Answer:
Trade in services is an emerging area where regulations are being constantly modernized
according to the present world standards.  Thus, the Law of the Republic of Azerbaijan “On
Insurance” approved after submitting the “Memorandum on the Foreign Trade Regime of the
Republic of Azerbaijan” to the WTO stipulated that foreign juridical and physical persons could only
establish joint ventures for insurance on the territory of the Republic of Azerbaijan with juridical andphysical persons of the Republic of Azerbaijan.  A total share of foreign juridical and physical persons
in equity of a joint venture should not exceed 49 per cent.  Activity of foreign insurers directly in
capacity of an insurer is forbidden in the Republic of Azerbaijan.
As for the limitations for foreign service suppliers, it is necessary to note that these limitations
will be indicated in the schedule of commitments.
Question 121.  
The Working Party are grateful for the listing of relevant licence issuing bodies, requirements
and legal acts in Annex 7.  Can Azerbaijan describe the processes by which these requirements
are made available to the public and transpa rency of the methods by which licenses are
acquired? (These processes are critical to whether these requirements serve as market accessbarriers).
Answer:
According to the existing legislation, the laws of the Republic of Azerbaijan, decrees and
orders of the President of the Azerbaijan Republic are published in the official state newspaper
“Azerbaijan” and in the “List of Legislation of Azerbaijan Republic”.
The laws of Milli Mejlis of the Republic of Azerbaijan are published in the newspaper
“Azerbaijan” and in the “Information of Milli Mejlis of the Republic of Azerbaijan”.
The resolutions of the Cabinet of Ministers of the Republic of Azerbaijan are published in the
official edition “List of Legislation of Azerbaijan Republic” and in the newspaper “Republic”.  If
necessary, they are circulated by other mass media services to provide an immediate and wide
distribution of information.WT/ACC/AZE/4
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Normative legal acts of the central executive bodies are published in "The bulletin of
normative acts of the central executive bodies", that is formally accepted by the relevant executive
bodies.
According to the rules of the legislation of the Republic of Azerbaijan, normative legal acts
adopted by Milli Mejlis and the relevant executive bodies of the Republic of Azerbaijan can beofficially published.
Normative legal acts mentioned above are published by bodies adopted these acts or by
relevant executive bodies in editions required for the wide range of people.
Normative legal acts can also be published by any mass media and publishing-house.
Question 122.  
Does the term “no” used in the columns in Annex 7 mean that there are no licensing
requirements or acts governing that particular service?
Answer:
The term “no” used in Annex 7 means that there are no any licensing act, requirement or
regulatory body governing that particular service.  However, acts and licensing requirements
governing some of the services shown in  Annex 7 can be adopted in the future.
Question 123.  
The Working Party note in Annex 7 under Transport services that Caspian Marine Stream-
navigation and Azerbaijan Hava Yollari are resp onsible for issuing licenses in the transport
sector.  What is the nature of these organiz ations?  Do they provide transport services
themselves, thereby potentially having a conflict of interest in the granting of licenses to other
suppliers?
Answer:
Both the State Caspian Marine Stream-navigation and the State Concern “Azerbaijan Hava
Yollari” are the central executive bodies of the government in the transport sector.  It is also worth to
be mentioned that the establishment of the Ministry of Transport governing all the transport sectors is
stipulated in the Decree of the President of the Republic of Azerbaijan “On establishment of theMinistry of Transport of the Republic of Azerbaijan” (5 August 1998).  Establishment of this Ministry
of Transport will remove a potential conflict of interest in the granting of licenses.
Question 124.  
Does Azerbaijan propose that Annex 7 will serve as the basis of its GATS schedule?  If so, it is
not clear from the present Annex what Azerbaijan’s commitments under each sector would be,
any whether these are “unbound” (i.e. without any binding commitments or where the mode of
supply is not possible) or “none” (i.e. it is committing to not impose any restrictions on thatmode within the particular sector).  When will Azerbaijan be able to provide its offers in
schedule format so that we can comment on them?
Answer:
The Republic of Azerbaijan does not propose Anne x 7 to be the basis of its GATS schedule.
As it is mentioned above, the Republic of Azerbaijan will submit the list of commitments in GATSWT/ACC/AZE/4
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schedule of commitments according to the procedure of applying to the WTO during accession
period.
Question 125.  
What is the planned legislative timetable for bringing the laws of the Republic of Azerbaijan
into compliance with the TRIPs Agreement, with particular reference to:
- copyright and related rights;
- geographical indications;
- enforcement provisions (please note, especially, the obligations of Article 46, 50,
51-60, and 111 of TRIPs including administrative procedures and remedies, and
provisional and special requirements related to border measures); and
- legal protection of semiconductor layouts ?
Answer:
Proposals on relevant changes and additions to the Law of the Republic of Azerbaijan "On
copyright and related rights" concerning joining to the TRIPs Agreement have been prepared and will
be submitted to the corresponding body with the legislative initiative in the first quarter of 2000.
Timetable for the procedure of bringing the laws of the Republic of Azerbaijan into
compliance with the TRIPs Agreement, can be described in the order listed below:
- Changes and additions to the Law "On copyright and related rights" - the first quarter
of 2000
- The Law of the Republic of Azerbaijan No. 504-IQ "On Trademarks and
geographical indicators" was approved on 12 May of 1998, and came into force from
the date of its publication on 27 August of 1998.
- Guarantee rules concerning author's rights (Articles 46, 50, 51-60 and third division
of TRIPs) - third quarter of 2000.
Sanctions applied in cases of violation of rights are reflected in Article 34 of the Law of the
Republic of Azerbaijan "On trademarks and geographical indicators", copy of which has been
submitted to the WTO Secretariat.
It is forbidden to imitate activity of competitor in Article 4 of Law of the Republic of
Azerbaijan "On Unfair competition".  In case if actions prohibited in Article 4 of the Law take place,
the financial sanctions in the amount of one, in  the repeated case in the amount of two sums of
illegally gained profits are imposed on market operator.
The draft law on schemes of half-conductor rights protection ("On protection of topographies
of integrated circuits") is being elaborated and will be submitted to the Milli Majlis in the first quarter
of 2000 for ratification.
Question 126.  
Please provide details of the areas in whic h the present copyright and related law requires
amendment to bring it into conformity with  the TRIPs Agreement.  If new acts may be
expected, please notify the Working Party of th e dates these will be enacted and provide copies
to the Working Group.WT/ACC/AZE/4
Page 67
Answer:
It is planned to make amendments to laws on copyrights and related rights to bring them into
conformity with the TRIPs Agreement through the European Union’s TACIS Program in March
2000.  This period coincides with the end of the first stage of "TACIS-Intellectual Property" Program.
These amendments have concern to protect copyrights and related rights through court procedures(means) and border measures.
Question 127.  
Could Azerbaijan please confirm to the Working Party that their law on Copyrights and
Related Rights provides the following protection:
- retroactive protection for sound recordings, including existing recordings, for at
least 50 years from the end of the ca lendar year in which the recording was
made, in according with Article 14 of TRIPs;
- rental rights in respect of at least computer programs and cinematographic
works, in accordance with Article 11 of TRIPs;
- computer programs and compilations of data in accordance with Article 10 of
TRIPs; and
- limitations and exceptions to exclusiv e rights in certain special cases, in
accordance with Article 13 of TRIPs.
Answer:
The Law of the Republic of Azerbaijan "On Copyrights and related rights" is in conformity
with the following principles contained in the Bern Convention and the TRIPs Agreement:
- Protection period of past sound recordings for 50 calendar years from the date of
production that is reflected in Article 14 of TRIPs Agreement, is also stipulated in
Article 39 of the Law of the Republic of Azerbaijan "On Copyrights and related
rights".
- Requirements foreseen in Article 11 of the TRIPs are provided in Article 12 of the
Law "On Copyrights and related rights" (author's rights for audio-visual works), andproperty (economic) rights are stipulated in Article 15.
- Principle of protection of computer programs and compilation of data foreseen in the
TRIPs Agreement is reflected in Articles 6 and Article 10.
- Corresponding exceptions and limitations applied for exclusive rights in special
situations foreseen in Article 13 of TRIPs are provided in Articles 17-24 of the Law
"On Copyrights and related rights".
Question 128.  
Can Azerbaijan please confirm that the term of protection for a patent shall not end before the
expiration of a period of twenty years counted from the filing date, in accordance with Article
33 of TRIPs.
Answer:
In accordance with paragraph 2 of Article 10 of the Law of the Republic of Azerbaijan "On
patent", terms of validity of patent in the Republic of Azerbaijan are established from the date of
submission of claim-document to the corresponding executive body, the State Committee on Science
and Techniques, for 20 years for inventions, ten years for useful model, ten years for industrial
pattern, which complies to Article 33 of the TRIPs.WT/ACC/AZE/4
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Question 129.  
Could Azerbaijan please confirm that the term of protection for a trademark will be ten years
from the date of filing, renewable for additional periods of ten.
Answer:
In accordance with Article 21 of the Law of the Republic of Azerbaijan "On trademarks and
geographical indicators" (12 June 1998) trademarks are valid within ten years.  This period can be
extended for every ten years for an additional ten years period on the basis of trademark owner's
application and provided that state duty is paid.
Question 130.  
How will Azerbaijan establish the relevant legislat ion regarding the border measures as well as
provisional measures?
Answer:
It is expedient to plan to enact additional legislative and administrative acts along with
making changes and enclosures concerning border measures as well as provisional measures etc.
shown in TRIPs to several effective legislation ac ts such as the Civil Code, Customs Code, Civil
Procedural and Criminal Procedural Codes as nece ssary.  At present time corresponding measures to
guarantee the claim are shown in Article 137 of Civil Procedural Code.  In accordance with theprovisional measures indicated in this Article when the judge makes the decisions defendant's
property at other people's or at the defendant's di sposal as well as any money amount are to be put
under arrest and it prohibits defendant from carrying out of certain activity.
According to the Law of the Republic of Azerbaijan "On Trademarks and geographical
signs", while import of goods in the Republic of Azerbaijan which have illegal trademarks andgeographical signs on them, except goods in transit, the arrest is to be effected in the order specified
by the legislation of the Republic of Azerbaijan at the demand of the prosecutor, court, The State
Customs Committee or other interested party.
While the direct or indirect use of false characteristics about the origin of goods or personality
of owner the arrest is also to be applied on goods in the order, specified by the legislation of theRepublic of Azerbaijan.
The legislation of the Republic of Azerbaijan considers the right to address to customs
authorities with a grounded request to suspend the passing of these goods through the border, as well
as get information about the quantity of goods and name of the sender of them in cases when goods
cross the border of Azerbaijan with illegally applied trademarks of goods owners or licensees sing.
If the owner of the sign or licensee does not submit a copy of the court resolution about the
arrest of goods or the document about the beginning of court case, a pawn for the coverage ofexpenses for their arrest, such goods can be kept for only 15 days.
In case of goods being kept at the customs border illegally, the quality party should
recompense the damage caused to its owner.
Work on applying changes to the laws related to copyright and cooperate rights in order to
adjust them to the requirements of the TRIPs Agreement is planed to be continued until March 2000through the EU’s TACIS Program.  This period coincides with the end of the first stage of theWT/ACC/AZE/4
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"TACIS-Intellectual Property" Program.  These changes are connected to court procedures concerning
copyrights and related rights protection as well as to border measures.
3. Market Access and National Treatment
Question 131.  
Will Azerbaijan list all its polices in Section VI (3) as horizontal commitments in its GATS
schedule of commitments, thereby insuring that  these polices are implemented in all service
sectors and across all modes of supply?
Answer:
The Republic of Azerbaijan will submit the list of commitments in GATS schedule of
commitments according to the procedure of applying to the WTO during accession period.
4. Most-Favoured-Nation Treatment
Question 132.  
In Section VI (3), does paragraph (a) mean that there are no restrictions on the presence of
foreign suppliers in Azerbaijan?
Answer:
Trade in services is an emerging area where regulations are being constantly modernized
according to the present world standards.  Thus, the Law of the Republic of Azerbaijan “OnInsurance” approved after submitting the “Memorandum on the Foreign Trade Regime of the
Republic of Azerbaijan” to the WTO stipulated that foreign juridical and physical persons could only
establish joint ventures for insurance on the territory of Azerbaijan Republic with juridical and
physical persons of the Republic of Azerbaijan.  A to tal share of foreign juridical and physical persons
in equity of a joint venture should not exceed 49 per cent.  Activity of foreign insurers directly incapacity of an insurer is forbidden in the Republic of Azerbaijan.
As for the limitations on the number of foreign service suppliers, it is necessary to note that
these limitations will be indicated in the schedule of commitments.
Question 133.  
Will Azerbaijan implement its MFN policy noted in Section VI (4) by not listing any MFN
exemptions in an annex to its schedule of commitments?
Answer:
The Republic of Azerbaijan fully appreciates the importance of the MFN principle in its trade
policies.  However, comprehensive information regarding the schedule of commitments is not
available yet.  Drafting the schedule of specific commitments on services is a gradual, complex and
time-consuming process.  This process involves information gathering and consultations with many
ministries and organisations of the government.  The government of the Republic of Azerbaijan is
involved in this process at present.  The Republic of Azerbaijan reserves the right to list of Article II
of the GATS will be attached to the draft schedule.WT/ACC/AZE/4
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Question 134.  
In relation to MFN and national treatment, WT/ACC/AZE/2 only mentions the patent law.
However, if Azerbaijan is a party to the Bern Co nvention, national treatment must also apply to
authors and works from other Bern Union countries.   Please explain what rights foreign authors
have in Azerbaijan compared to national authors.
Answer:
Because of the Republic of Azerbaijan is a party to the Bern Convention (27 November 1998)
and the level of the Law of the Republic of Azerbaijan "On Copyrights and related rights" is not softer
than the requirements of the Bern Convention the na tional treatment is applied as well to protect the
author's rights and the rights of owners-citizens of the countries-parties to the same Convention.
According to the requirements of the Bern C onvention rights of the authors-citizens of the
countries-parties to the Bern Convention are protected at the same level as the rights of Azerbaijan'sauthors (owners of rights).
As a party of the World Geneva Convention and the Bern Convention, the Republic of
Azerbaijan applies regime of the national treatment to the authors-citizens of the countries-parties to
the same Conventions.
Question 135.  
Please confirm to the Working Party that the Azerbaijan law on intellectual property provides
the following protection:
- national treatment, in accord ance with Article 3 of TRIPs;
- full compliance with Article 39 in regard to the protection of undisclosed
information;
- full compliance with Article 40 in regard to anti-competitive practices in
contractual licensing.
Answer:
Principle of the national treatment provided in Article 3 of TRIPs is reflected in the Law of
the Republic of Azerbaijan "On copyrights and related rights".  In accordance with Article 3 of theLaw scientific, literary and artistic works, performances, phonograms, programs of broadcasting
organizations are protected by this Law in confor mity with the international agreements that the
Republic of Azerbaijan participates in.  Therefore, since the Republic of Azerbaijan is a party to the
Bern Convention it applies the regime of national treatment to the citizens of the countries-parties of
this Convention.
Protection of undisclosed information according to Article 39 of TRIPs is reflected in Article
7 of the Law of the Republic of Azerbaijan "On unfair competition".  Illegal obtaining, using and
distributing of the information on the scientific-technical, production or commercial activity of the
market operators, including the commercial secrets are prohibited by the Law.
In case, if the prohibited actions described above take place the financial sanctions in the
amount of up to 10 per cent, and if the repeated action takes place within a year, then up to 20 per cent
of the gross profits obtained by the market operator are imposed on the market operator.WT/ACC/AZE/4
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According to Article 33 of the Law of the Republic of Azerbaijan “On Trademarks and
geographical indicators” when the disputes are considered at the court, then commercial secrets of the
owner of trademark related with production of goods and/or services are kept confidentially.
In accordance with the Law of the Republic of Azerbaijan "On Antimonopoly activity"
(04 March 1993), the followings are regarded as illegal actions of administrative bodies and economicsubjects abusing, with the objective of restoration or elimination of competition in some market, their
monopolistic right on patens and licenses:
- Failure to use the patent by its owner and ungrounded refusal in granting licence
thereto;
- Restrictions in technical policy of the licensee
- Restrictions in use of licensed technology by the licensee;
- Restrictions in commercial activity of the licensee;- Making more difficult terms of payment for the licence by its owner.
VII. INSTITUTIONAL BASE FOR TRADE AND ECONOMIC RELATIONS WITH
THIRD COUNTRIES
2. Economic integration, customs union and free-trade area agreements
Question 136.  
Azerbaijan explains that no exporter from any single country has preferential access to
Azerbaijan’s domestic market.  It seems, in our vi ew, to be logistically contradictory to the fact
that Azerbaijan has concluded a free-trade ag reement with CIS member states.  What kind of
different and preferential treatments are established between member states of the free trade
agreement and other countries?
Answer:
The Republic of Azerbaijan has signed bilateral free trade agreements with 7 CIS countries
(Russian Federation (30 September 1992), Uzbe kistan (27 May 1996), Ukraine (28 July 1995),
Georgia (10 June 1996), Moldova (26 May 1995), Kazakstan (10 June 1997) and Turkmenistan
(18 March 1996)).  According to the articles of these agreements the states that signed the Agreementundertake a commitment not to apply duties, taxes and charges that equivalently affect exports and
imports between them.
At present custom duties are not applied to imported goods only from three (Georgia,
Kazakstan and Ukraine) out of the above-mentioned states.
The Republic of Azerbaijan joined the Agreement on the establishment of free trade zone on
15 April 1994.  As the Agreement had not been implemented, the CIS countries signed the Protocol
on making amendments and additions to the same Agreement on 2 April 1999.  At present theProtocol hasn’t been ratified by the Republic of Azerbaijan.  The states that signed the Agreement
undertake a commitment not to apply duties, taxes and charges equivalently affecting exports and
imports between them.
Question 137.  
The Memorandum notes that no country has pref erential access to the Azerbaijan market.  Is
this likely to change when Azerbaijan implem ents its bilateral trade agreements with CIS
countries, and the CIS Customs Union?  Can Azerbaijan provide information on any plans toWT/ACC/AZE/4
Page 72
provide such preferred access, the extent of it , and the likely timing?  Will such arrangements
be consistent with Article XXIV of the GATT and Article 5 of GATS?
Answer:
The Republic of Azerbaijan is not a member  of the CIS Customs Union.  The Republic of
Azerbaijan signed both the Agreement on creation of free trade zone among the CIS countries(15 April 1994) and the Protocol on making additions and amendments to this Agreement
(02 April 1999).  Both this Agreement and the Protocol are consistent with Article XXIV of the
GATT and Article 5 of GATS.  After the terms of the above-mentioned documents come into force
the above-mentioned countries will not apply tariffs, taxes, and duties, that equivalently affect exports
and imports, and all the barriers on movement of goods and services will be removed as well.
According to the Protocol, when it comes into fo rce in the country, this country can not apply
new quantitative restrictions and tariffs to other member-countries of the document.  After thedocument comes into force, a gradual abolition of  the exceptions between the countries will be
considered bilaterally in the period of 12 months.
Question 138.  
Which trade agreements does Azerbaijan consider will need to be notified under Art XXIV of
the GATT 1994 or under Article V of GATS?
Answer:
The Republic of Azerbaijan has signed bilateral free trade agreements with seven CIS
countries (Russian Federation (30 September 1992), Uzbekistan (27 May 1996), Ukraine (28 July
1995), Georgia (10 June 1996), Moldova ( 26 May 1995), Kazakstan (10 June 1997) and
Turkmenistan (18 March 1996)).  According to the articles of these agreements the states that signedthe Agreement undertake a commitment not to apply duties, taxes and charges that equivalently affect
exports and imports between them.
At present custom duties are not applied to imported goods only from three (Georgia,
Kazakstan and Ukraine) out of the above-mentioned states.  The Republic of Azerbaijan joined the
Agreement on the establishment of free trade zone on 15 April 1994.  As the Agreement had not beenimplemented, the CIS countries signed the Protocol on making amendments and additions to the same
Agreement on 2 April 1999.  At present the Protoc ol hasn’t been ratified by the Republic of
Azerbaijan.  The states that signed the Agreement undertake a commitment not to apply duties, taxes
and charges equivalently affecting exports and imports between them.
Question 139.  
Please provide the Working Party with the te xts of all foreign trade agreements to which
Azerbaijan is a Party.
Answer:
The list of the bilateral documents on trade and economic co-operation of the Republic of
Azerbaijan is given in the table below.  The text s of signed trade agreements that interested the
Working Party can be provided in the future.WT/ACC/AZE/4
Page 73
No. Date of signature Name of the document Country signed the
document
1 June 1995, Sofia Agreement on trade-economic and scientific-
technical cooperation between the Government of theRepublic of Azerbaijan and the Government of the
Republic of BulgariaRepublic of Bulgaria
2 3 February 1993, Baku Agreement on principles of trade-economic
cooperation between the Government of the Republic
of Azerbaijan and the Government of GeorgiaRepublic of Georgia
3 8 March 1996, Tbilisi Agreement on free trade between the Government of
the Republic of Azerbaijan and the Government of
GeorgiaRepublic of Georgia
4 27 December 1997,
TbilisiAgreement on principles of indirect taxes during
export and import of goods (works, services) between
the Government of the Republic of Azerbaijan and
the Government of GeorgiaRepublic of Georgia
5 28 October 1993, Baku Agreement on mutual trade between the Government
of Azerbaijan Republic and Islamic Republic of IranIslamic Republic of Iran
6 26 May 1995, Minsk Agreement on free trade between the Government of
the Republic of Azerbaijan and the Government of
the Republic of MoldovaRepublic of Moldova
7 8 September 1995,
BakuAgreement on principles of trade-economic
cooperation between the Government of the Republic
of Azerbaijan and the Government of the Republic of
MoldovaRepublic of Moldova
8 27 May 1996 Agreement on free trade between the Government of
the Republic of Azerbaijan and the Government of
the Republic of UzbekistanRepublic of Uzbekistan
9 26 February 1998, Baku Agreement on principles of indirect taxes during
export and import of goods between the Government
of the Republic of Azerbaijan and the Government of
the Republic of UzbekistanRepublic of Uzbekistan
10 9 October 1995, Baku Agreement on trade-economic cooperation between
the Government of Azerbaijan Republic and the
Government of Islamic Republic of PakistanIslamic Republic of
Pakistan
11 26 August 1997,
WarsawAgreement on economic cooperation and trade
between the Government of the Republic of
Azerbaijan and the Government of PolandRepublic of Poland
12 10 June 1997, Almaty Agreement on principles of indirect taxes during
export and import of goods (works, services) between
the Government of the Republic of Azerbaijan andthe Government of KazakstanRepublic of Kazakstan
13 10 June 1997, Almaty Agreement on free trade between the Government of
the Republic of Azerbaijan and the Government ofKazakstanRepublic of Kazakstan
14 28 August 1992, Baku Protocol of the economic-trade Agreement between
the Government of the Republic of Azerbaijan andthe Government of Guinea-Bissau RepublicRepublic of Guinea-
Bissau
15 24 March 1996,
BucharestAgreement on trade-economic relations and scientific
and technical cooperation between the Governmentof the Republic of Azerbaijan and the Government ofthe Republic of RomaniaRepublic of Romania
16 30 September 1992,
BakuAgreement on free trade between the Government of
the Republic of Azerbaijan and the Government ofRussian FederationRussian Federation
17 22 October 1992, Baku Additional Protocol to the Agreement dated 30th
September, 1992 on free trade between theGovernment of the Republic of Azerbaijan and the
Government of Russian FederationRussian FederationWT/ACC/AZE/4
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18 26 November 1992,
MoscowProtocol of the Agreement dated 30th September,
1992 on the exceptions to the free trade regime
between the Government of the Republic ofAzerbaijan and the Government of RussianFederationRussian Federation
19 July 1994, Jidda Main Agreement on cooperation in economy, trade,
investment, techniques, culture, sport and youth
between the Government of the Republic of
Azerbaijan and the Government of Kingdom of SaudiArabiaKingdom of Saudi Arabia
20 4 July 1994 Agreement on trade-economic cooperation between
the Government of the Republic of Azerbaijan andthe Government of SudanRepublic of Sudan
21 02 November 1992,
AnkaraAgreement on mutual providing legal assistance in
property, trade and crime related matters between theGovernment of the Republic of Azerbaijan and theGovernment of TurkeyRepublic of Turkey
22 02 November 1992,
AnkaraAgreement on trade-economic cooperation between
the Government of the Republic of Azerbaijan andthe Government of TurkeyRepublic of Turkey
23 08 December 1995,
BakuMemorandum on economic cooperation between the
Republic of Azerbaijan and TurkeyRepublic of Turkey
24 09 February 1994,
AnkaraAgreement on cooperation in science, techniques,
social sphere, culture and economy between theRepublic of Azerbaijan and the Republic of TurkeyRepublic of Turkey
25 18 March 1996 Agreement on free trade between the Government of
the Republic of Azerbaijan and the Government ofTurkmenistanRepublic of Turkmenistan
26 February 1994,
AshkhabatAgreement on trade-economic cooperation between
the Government of the Republic of Azerbaijan andthe Government of TurkmenistanRepublic of Turkmenistan
27 28 July 1995 Agreement on free trade between the Government of
the Republic of Azerbaijan and the Government ofUkraineRepublic of Ukraine
28 26 July 1994, Baku Agreement on cooperation in economy, industry and
technology between the Government of the Republicof Azerbaijan and the Government of GreeceRepublic of Greece
Question 140.  
For each trade agreement, FTA and Customs-Union Agreement to which Azerbaijan is a Party,
please provide to the Working Party details of the percentage of trade covered in each
agreement, and the percentage of trade in each major sector, which is excluded from theagreement.
Answer:
The Republic of Azerbaijan has not signed the CIS Customs-Union Agreement.  At present,
out of 7 bilateral agreements and multilateral agreement on creation of free trade zone, signed by the
Republic of Azerbaijan, only 3 bilateral agreements are implemented.  These are the agreements
signed with Ukraine, Uzbekistan and Kazakstan.  According to these agreements the states that signed
the agreement undertake a commitment not to apply duties, taxes and charges that equivalently affectexports and imports between them.
Out of these 3 countries the Protocol on exceptions to free trade regime was only signed with
Kazakstan.  According to the Protocol signed with Kazakstan the list of the goods excluded from free
trade regime and brought to the customs territory of the Republic of Azerbaijan is determined
according to their commodity codes.  The goods brought to the customs territory of the Republic ofAzerbaijan, which are excluded from free trade regime, are the followings: liqueur, vodka, other spiritWT/ACC/AZE/4
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products and tobacco cigarettes.  In addition, these goods are under import licensing and quantitative
restriction contained in the legislation of the Republic of Azerbaijan.
Share of goods excluded from free trade re gime between Azerbaijan and Kazakstan was
0.14 per cent of commodities’ turnover in 1999.
For more information see section “Import Regulation” above.
Question 141.  
Which trade agreements does Azerbaijan consider will need to be notified under Art XXIV of
the GATT 1994 or under Article V of GATS?
Answer:
The Republic of Azerbaijan has signed bilateral free trade agreements with seven CIS
countries (Russian Federation (30 September 1992), Uzbekistan (27 May 1996), Ukraine (28 July
1995), Georgia (10 June 1996), Moldova ( 26 May 1995), Kazakstan (10 June 1997) and
Turkmenistan (18 March 1996)).  According to the articles of these agreements the states that signed
the Agreement undertake a commitment not to apply duties, taxes and charges that equivalently affect
exports and imports between them.
At present custom duties are not applied to imported goods only from three (Georgia,
Kazakstan and Ukraine) out of the above-mentioned states.  The Republic of Azerbaijan joined theAgreement on the establishment of free trade zone on 15 April 1994.  As the Agreement had not been
implemented, the CIS countries signed the Protocol on making amendments and additions to the same
Agreement on 2 April 1999.  At present the Protoc ol hasn’t been ratified by the Republic of
Azerbaijan.  The states that signed the Agreement undertake a commitment not to apply duties, taxes
and charges equivalently affecting exports and imports between them.
Question 142.  
Please provide the Working Party with the te xts of all foreign trade agreements to which
Azerbaijan is a Party.
Answer:
The list of the bilateral documents on trade and economic co-operation of the Republic of
Azerbaijan is given in the table below.  The text s of signed trade agreements that interested the
Working Party can be provided in the future.
No. Date of signature Name of the document Country signed the
document
1 June 1995, Sofia Agreement on trade-economic and scientific-
technical cooperation between the Government of the
Republic of Azerbaijan and the Government of theRepublic of BulgariaRepublic of Bulgaria
2 3 February 1993, Baku Agreement on principles of trade-economic
cooperation between the Government of the Republicof Azerbaijan and the Government of GeorgiaRepublic of Georgia
3 8 March 1996, Tbilisi Agreement on free trade between the Government of
the Republic of Azerbaijan and the Government ofGeorgiaRepublic of Georgia
4 27 December 1997,
TbilisiAgreement on principles of indirect taxes during
export and import of goods (works, services) betweenthe Government of the Republic of Azerbaijan andthe Government of GeorgiaRepublic of GeorgiaWT/ACC/AZE/4
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5 28 October 1993, Baku Agreement on mutual trade between the Government
of Azerbaijan Republic and Islamic Republic of IranIslamic Republic of Iran
6 26 May 1995, Minsk Agreement on free trade between the Government of
the Republic of Azerbaijan and the Government ofthe Republic of MoldovaRepublic of Moldova
7 8 September 1995,
BakuAgreement on principles of trade-economic
cooperation between the Government of the Republicof Azerbaijan and the Government of the Republic ofMoldovaRepublic of Moldova
8 27 May 1996 Agreement on free trade between the Government of
the Republic of Azerbaijan and the Government ofthe Republic of UzbekistanRepublic of Uzbekistan
9 26 February 1998, Baku Agreement on principles of indirect taxes during
export and import of goods between the Governmentof the Republic of Azerbaijan and the Government ofthe Republic of UzbekistanRepublic of Uzbekistan
10 9 October 1995, Baku Agreement on trade-economic cooperation between
the Government of Azerbaijan Republic and theGovernment of Islamic Republic of PakistanIslamic Republic of
Pakistan
11 26 August 1997,
WarsawAgreement on economic cooperation and trade
between the Government of the Republic ofAzerbaijan and the Government of PolandRepublic of Poland
12 10 June 1997, Almaty Agreement on principles of indirect taxes during
export and import of goods (works, services) betweenthe Government of the Republic of Azerbaijan and
the Government of KazakstanRepublic of Kazakstan
13 10 June 1997, Almaty Agreement on free trade between the Government of
the Republic of Azerbaijan and the Government of
KazakstanRepublic of Kazakstan
14 28 August 1992, Baku Protocol of the economic-trade Agreement between
the Government of the Republic of Azerbaijan and
the Government of Guinea-Bissau RepublicRepublic of Guinea-
Bissau
15 24 March 1996,
BucharestAgreement on trade-economic relations and scientific
and technical cooperation between the Government
of the Republic of Azerbaijan and the Government of
the Republic of RomaniaRepublic of Romania
16 30 September 1992,
BakuAgreement on free trade between the Government of
the Republic of Azerbaijan and the Government of
Russian FederationRussian Federation
17 22 October 1992, Baku Additional Protocol to the Agreement dated 30th
September, 1992 on free trade between the
Government of the Republic of Azerbaijan and the
Government of Russian FederationRussian Federation
18 26 November 1992,
MoscowProtocol of the Agreement dated 30th September,
1992 on the exceptions to the free trade regime
between the Government of the Republic ofAzerbaijan and the Government of RussianFederationRussian Federation
19 July 1994, Jidda Main Agreement on cooperation in economy, trade,
investment, techniques, culture, sport and youthbetween the Government of the Republic of
Azerbaijan and the Government of Kingdom of Saudi
ArabiaKingdom of Saudi Arabia
20 4  July 1994 Agreement on trade-economic cooperation between
the Government of the Republic of Azerbaijan and
the Government of SudanRepublic of Sudan
21 2 November 1992,
AnkaraAgreement on mutual providing legal assistance in
property, trade and crime related matters between the
Government of the Republic of Azerbaijan and theGovernment of TurkeyRepublic of Turkey
22 2 November 1992,
AnkaraAgreement on trade-economic cooperation between
the Government of the Republic of Azerbaijan andthe Government of TurkeyRepublic of TurkeyWT/ACC/AZE/4
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23 8 December 1995, Baku Memorandum on economic cooperation between the
Republic of Azerbaijan and TurkeyRepublic of Turkey
24 9 February 1994,
AnkaraAgreement on cooperation in science, techniques,
social sphere, culture and economy between theRepublic of Azerbaijan and the Republic of TurkeyRepublic of Turkey
25 18 March 1996 Agreement on free trade between the Government of
the Republic of Azerbaijan and the Government ofTurkmenistanRepublic of Turkmenistan
26 February 1994,
AshkhabatAgreement on trade-economic cooperation between
the Government of the Republic of Azerbaijan and
the Government of TurkmenistanRepublic of Turkmenistan
27 28 July 1995 Agreement on free trade between the Government of
the Republic of Azerbaijan and the Government of
UkraineRepublic of Ukraine
28 26 July 1994, Baku Agreement on cooperation in economy, industry and
technology between the Government of the Republic
of Azerbaijan and the Government of GreeceRepublic of Greece
Question 143.  
For each trade agreement, FTA and Customs-Union Agreement to which Azerbaijan is a Party,
please provide to the Working Party details of the percentage of trade covered in each
agreement, and the percentage of trade in each  major sector, which is excluded from the
agreement.
Answer:
The Republic of Azerbaijan has not signed the CIS Customs-Union Agreement.  At present,
out of seven bilateral agreements and multilateral agreement on creation of free trade zone, signed by
the Republic of Azerbaijan, only three bilateral agreements are implemented.  These are theagreements signed with Ukraine, Uzbekistan a nd Kazakstan.  According to these agreements the
states that signed the agreement undertake a commitment not to apply duties, taxes and charges that
equivalently affect exports and imports between them.
Out of these three countries the Protocol on exceptions to free trade regime was only signed
with Kazakstan.  According to the Protocol signed with Kazakstan the list of the goods excluded from
free trade regime and brought to the customs territory of the Republic of Azerbaijan is determined
according to their commodity codes.  The goods brought to the customs territory of the Republic of
Azerbaijan, which are excluded from free trade regime, are the followings: liqueur, vodka, other spirit
products and tobacco cigarettes.  In addition, these goods are under import licensing and quantitative
restriction contained in the legislation of the Republic of Azerbaijan.
Share of goods excluded from free trade re gime between Azerbaijan and Kazakstan was
0.14 per cent of commodities’ turnover in 1999.
For more information see section “Import Regulation” above.
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