RESTRICTED
WORLD TRADE WT/ACC/KGZ/13
27October 1997
ORGANIZATION(97-4696)
Working Party ontheAccession Original: English
oftheKyrgyz Republic
ACCESSION OFTHE KYRGYZ REPUBLIC
Additional Questions andReplies
Additional questions submitted byMembers andthereplies thereto provided bytheauthorities
oftheKyrgyz Republic arereproduced hereunder.
_______________
TABLE OFCONTENTS
Page
No.Question No.
II. ECONOMY, ECONOMIC POLICIES AND FOREIGN
TRADE
2. Economic Policy 3 1
(b)(c) Monetary andfiscal policy/Competition policy 3 2-16
III. FRAMEWORK FOR MAKING AND ENFORCING
POLICIES AFFECTING FOREIGN TRADE INGOODS
AND INSERVICES
4. Legislative Programmes orPlans toChange theRegulatory
Regime13 17
IV. POLICIES AFFECTING TRADE INGOODS
1. Import Regulation
(b) Characteristics ofnational tariff, customs tariff nomenclature
(HS), types ofduties, general description ofthecustoms
tariff structure, weighted average level ofduties onmain
customs tariff groupings, application ofMFN rates, tariff
preferences15 18
(c) Tariff quotas, tariff exemptions 15 19
(d) Other duties andcharges, specifying anycharges forservices
rendered16 20
(f) Import licensing procedures 18 21-22
(h) Customs valuation 19 23
(k) Application ofinternal taxes onimports 19 24-25
(l) Rules oforigin 20 26-27WT/ACC/KGZ/13
Page 2
Page
No.Question No.
(m-o) Anti-dumping, countervailing andsafeguard measures 21 28
2. Export Regulation
(d) Export licensing procedures 21 29-31
(f) Export financing, subsidy andpromotion policies 23 -
3. Internal Policies Affecting Trade inGoods
(f-g) Free zones, Free economic zones 23 32-33
(l) Government procurement 25 34
4. Policies Affecting Trade inAgricultural Products
(a) Imports 26 35
(b) Exports 26 36
(e) Internal policies 27 37-39
V. TRADE-RELATED INTELLECTUAL PROPERTY
REGIME31 -
VI. TRADE RELATED SERVICES REGIME 31 -
VII. INSTITUTIONAL BASIS FOR TRADE AND ECONOMIC
RELATIONS WITH THIRD COUNTRIES32 40-42
Attachment A:Supplement toQuestion 20 34
Attachment B:Legal texts available forconsultation 41WT/ACC/KGZ/13
Page 3
II. ECONOMY, ECONOMIC POLICIES AND FOREIGN TRADE
2. Economic Policy
Question 1:
Please respond totherequest foracommitment concerning theabolition oftheforeign trade regime
contained inpage 3ofWT/ACC/KGZ/10.
Answer:
Statetradingmonopoliescurrentlyexistinthealcohol,tobacco,andelectricalenergy:Kyrgyzalco
(dejure),Kyrgyztamekesi (dejure),andKyrgyz Energy Holding (defacto). There arenoregulatory
barriers toentry intheelectrical energy sector. Asforalcohol andtobacco, theKyrgyz Republic is
notready tocommit atthispoint thatstate trading willbeabolished inthese twosectors butwillcommit
tocomply with therelevant provisions ofArticle XVII oftheGATT 1994 andthecorresponding WTO
understanding.
Forother goods, norestrictions currently exist ontheright offoreign ordomestic individuals
andenterprises toimport orexport goods within thecustoms territory oftheKyrgyz Republic. In
addition, theKyrgyz Republic confirms thatfirms arenotrestricted intheir ability toimport orexport
basedontheirregisteredscopeofbusiness.TheKyrgyzRepublicwillcommitinitsprotocolofaccession
nottointroduce anyrestrictions, except asprovided forbytheWTO Agreements.
Asforrestrictions intheservice sectors, theKyrgyz Republic ’sobligations andcommitments
willbeprovided initsSchedule ofSpecific Commitments inServices.
TheKyrgyz Republic confirms thatthecriteria foranytype ofbusiness ortrade registration
orlicensing ofcompanies intheKyrgyz Republic aregenerally applicable andpublished inofficial
publications.
TheKyrgyz Republic willconfirm initsprotocol ofaccession thatitagrees thatitisimportant
toensure fulltransparency andtokeep WTO Members informed ofitsprogress inthereform ofits
transforming economic andtrade regime, andintheprogress ofvarious privatization programmes on
anannual basis.
(b) Monetary andfiscal Policy
(c) Competition policy
Question 2:
According totheinformation provided intheresponse toquestion 2(c)ofWT/ACC/KGZ/10 and
inWT/ACC/KGZ/10/Add.1 (Information onState Trading), licences arerequired toimport and
export, andproduce alcohol andalcohol products. Kyrgyzalco istheonly body intheKyrgyz
Republic authorized toissue these licences. Any entity (including entities outside ofthestructure
ofKyrgyzalco) may obtain alicence from Kyrgyzalco toimport andexport alcoholic products
(except ethyl alcohol).
(a) Please describe theprocedures andeligibility requirements forobtaining import andexport
licences foralcohol andalcoholic products from Kyrgyzalco intheform ofaresponse
totheQuestionnaire onImport Licensing.WT/ACC/KGZ/13
Page 4
(b) Please describe theprocedures andeligibility requirements forcoming under thestructure
ofKyrgyzalco, arequirement forenterprises which intend toimport ethyl alcohol.
(c) How does theGovernment oftheKyrgyz Republic ensure thattheoperation ofKyrgyzalco
intheissuance ofimport and export licences foralcohol and alcoholic products are
administered inamanner consistent with WTO requirements, including
most-favoured-nation treatment andnational treatment?
Answer:
(a) Procedures andEligibility requirements forObtaining Import andExport Licences forAlcohol
andAlcoholic Products ("licences")
Procedures
Responses areaccording toSection III(Procedures) oftheQuestionnaire onImport
Licensing (QIL).
Toobtain alicence forimport orexport ofalcohol andalcoholic products itisnecessary, to
submit thefollowing documents:
- application foralicence;
- acopy ofthecertificate ofstate registration;
- contract onexport orimport ofalcohol andalcoholic products;
- certificate oforigin ofgoods;
- certificate ofconformity with safety requirements;
- hygienic certificate ofsafety forhealth ofpeople;
- invoice;
- licence forsaleofalcoholic products; and
- document confirming payment forthelicence.
1. Currently, noquotas, connected with theimport andexport ofalcohol oralcoholic products,
areineffect. Therefore, Section III.1 ofQIL does notapply.
2.(a) There isnorequirement astohow farinadvance anapplication foralicence must bemade.
Theduration toobtain such licences should notexceed tendays (usually ittakes 2-3days). Licences
may beobtained after goods arrive attheborder.
2.(b) Alicence maybeobtained inavery short period oftime (notexceeding 2-3days). Itispossible
thatlicences may begranted immediately onrequest.
2.(c) No,there arenotlimitations astotheperiod oftheyearduring which anapplication forlicence
and/or importation may bemade.
2.(d) Only Kyrgyzalco isresponsible forreviewing thelicence application. Anumber ofdocuments,
however, arerequired forobtaining alicence. These include (i)hygiene certificate which must be
obtained from theMinistry ofHealth and(ii)certificate ofconformity tostandards which must be
obtained from theState Inspectorate onStandardization andMetrology orother accredited private or
State entities.WT/ACC/KGZ/13
Page 5
3. Anapplication foralicence may berefused if(i)itisnotcomplete and(ii)information isnot
reliable. Thereasons forrefusal areprovided totheapplicant inwriting. Incaseofrefusal, applicants
have theright toappeal tocourt.
Eligibility Requirements
Responses areaccording toSection IV(Eligibility) oftheQIL.
Allpersons, firms, institutions areeligible toapply forlicences.
(b) Procedures andEligibility Requirements forComing under theStructure ofKyrgyzalco
Acompany wishing tocome under thestructure ofKyrgyzalco must have alicence from
Kyrgyzalco toproduce alcohol. Kyrgyzalco isajoint stock company. Shares ofacompany wishing
tobeunder thestructure ofKyrgyzalco areexchanged forshares inKyrgyzalco (Kyrgyzalco willhave
shares inthecompany under itsstructure andthecompany will, inturn, have shares inKyrgyzalco).
TheState share inKyrgyzalco must notbelessthan 51percent.
(c) Consistency with theWTO Requirements
Article 8oftheLaw onLicensing states thatforeign legal entities orindividuals, aswell as
individuals without citizenship shall receive licences onthesame conditions andinthesame procedure
aslegal entities andindividuals oftheKyrgyz Republic, unless otherwise stipulated bylegislative acts.
Currently, nolegislative actsstipulate otherwise.
Article 18oftheLaw onLicensing of3March 1997 permits licence applicants tohave judicial
appeal. Any MFN ornational treatment violations may beappealed tocourt bylicence applicants.
Question 3:
According totheinformation provided inparagraph 1D. ofWT/ACC/KGZ/10/Add.1, only
companies under thestructure ofKyrgyzalco areallowed toobtain licences forimporting and
exporting ethyl alcohol. There isnocompetition with anyprivate traders with respect totheimport
ofethyl alcohol andtheproduction ofalcoholic products. The main factor forimporting ethyl
alcohol isthelevel ofdemand byKyrgyzalco producers.
What istheWTO justification formaintaining import restrictions onethyl alcohol?
Answer:
There arenoimport restrictions imposed bythegovernment orKyrgyzalco onthelevel of
import ofethyl alcohol byKyrgyzalco companies. Thelevel ofimport ofethyl alcohol isdetermined
according todemand bythe14producers under Kyrgyzalco. Such demand isdetermined bythese
producers according tocommercially sound market demand principles.
Question 4:
According totheinformation provided intheresponse toquestion 2(c) ofWT/ACC/KGZ/10,
there arewholesale price controls onproducts sold byenterprises under Kyrgyzalco. Are
enterprises notunder theKyrgyzalco subject towholesale price controls? Arethese enterprisesWT/ACC/KGZ/13
Page 6
required toreport their wholesale prices andprofitability totheAnti-Monopoly Department in
theMinistry ofFinance? Since domestic producers ofalcohol andalcoholic products arenot
required tobeunder Kyrgyzalco control, how does theKyrgyz Government assure national
treatment forimported products with respect toprice controls?
Answer:
Enterprises (under andnotunder Kyrgyzalco) arenotsubject towholesale price controls. Only
enterprises under Kyrgyzalco arerequired tosimply report their wholesale prices andprofitability to
theAnti-Monopoly Department intheMinistry ofFinance. Alcoholic products imported totheKyrgyz
Republic arenotsubject toprice control.
Inallprevious communications, itwasconsistently stated thatdomestic producers ofalcohol
andalcoholic products arerequired tobeunder Kyrgyzalco, except domestic beerproducers. Therefore,
thethird question isunclear totheKyrgyz Republic andweappreciate further clarifications.
Question 5:
According totheresponse toquestion 2(c)ofWT/ACC/KGZ/10, wholesale prices ofalcoholic
beverages areestablished separately byeach oftheenterprises under Kyrgyzalco. However, the
response tothesame question also includes aschedule ofwholesale prices forproducts sold by
enterprises under Kyrgyzalco.
What isthepurpose ofthewholesale price schedule, iftheenterprises under Kyrgyzalco areable
toestablish separately wholesale prices foralcoholic beverages? Does theKyrgyzalco price schedule
represent maximum orminimum prices thatmay becharged bytheenterprises under Kyrgyzalco?
Answer:
Thewholesale price schedule provided inresponse toquestion 2(c)ofWT/ACC/KGZ/10 does
notrepresent maximum orminimum prices thatmay becharged byenterprises under Kyrgyzalco.
Such table wascompiled forthepurpose ofresponding toquestion 2(c)ofWT/ACC/KGZ/10 andit
simply provides theactual wholesale prices ofvarious products sold byvarious companies under
Kyrgyzalco asof1May 1997. TheKyrgyz Republic confirms again thatwholesale prices ofalcoholic
products areestablished separately byeach oftheenterprises under Kyrgyzalco.
Question 6:
According totheschedule ofwholesale prices provided intheresponse toquestion 2(c) of
WT/ACC/KGZ/10, there appears tobeseveral different prices forvodka. How does Kyrgyzalco
determine theprice itsetsforthese different vodkas?
Answer:
Each enterprise under Kyrgyzalco produces adifferent brand ofvodka and, asstated earlier,
each enterprise under Kyrgyzalco independently establishes itsownwholesale prices. Kyrgyzalco does
notsetprices forcompanies under itsstructure.WT/ACC/KGZ/13
Page 7
Question 7:
Please describe theregime fortheimportation, production andsaleofbeer (which isnotcovered
byKyrgyzalco). Arethere anyrestrictions, prohibitions orimport licensing requirements for
theimportation ofbeer? Please describe thelicensing requirements fortheimportation ofbeer,
ifany, intheform ofaresponse totheQuestionnaire onImport Licensing.
Answer:
Currently, there arenoquantitative restrictions (e.g. quotas), prohibitions, orimport licensing
requirements fortheimportation orexportation ofbeer. Thedomestic saleandproduction ofbeer,
however, requires licensing. Licences forproduction andsaleofbeermust beapplied forandobtained
from Kyrgyzalco.
(a) Licence forProduction ofBeer
Toobtain alicence forproduction ofbeer, thefollowing documents must besubmitted to
Kyrgyzalco:
- application foralicence forproduction ofbeer;
- anticipated annual volume ofbeer production;
- certificate ofState registration;
- certificate ofconformity with standards issued byKyrgyzstandard;
- sanitary-hygienic conclusion issued bytheState Sanitary andTechnical Inspection;
- protocol ofthemeeting oftheRepublic Tasting Commission;
- conclusionoftheindependentexpertcommissionexaminingenterprisesandtechnicalequipment
ofenterprises andtechnological equipment forcompliance with requirements forproduction
ofalcoholic products, aswell aswith safety requirements forlifeandhealth ofindividuals
oftheKyrgyz Republic.
Alicence must beissued within 30days after receiving allmaterials. Incase ofrefusal, the
applicant may appeal tothecourt.
(b) Licence forSale ofBeer
Toobtain alicence forsaleofbeer thefollowing documents must besubmitted toKyrgyzaclo:
- application foralicence forsaleofbeer (wholesale orretail);
- certificate ofState registration;
- documents ontrade unit(lease agreement, purchase andsalecontract orcertificate onthe
property right);
- card ofcontrolling cash boxes;
- sanitary-hygienic conclusion oftheState Sanitary Inspection;
- hygienic certificate issued bytheState Sanitary Inspection;
- certificate ofconformity with standards issued byKyrgyzstandard; and
- contract with thesupplier (notrequired iftheseller isaproducer).
Alicence must beissued within 30days after receiving allmaterials. Incase ofrefusal, the
applicant may appeal tothecourt.WT/ACC/KGZ/13
Page 8
Question 8:
According toparagraph 1E.ofWT/ACC/KGZ/10, Kyrgyzalco andcompanies under itsstructure
areengaged intheimportation ofalcoholic products (except ethyl alcohol). Inaddition, itisclear
from theinformation provided inWT/ACC/KGZ/10/Add.1, inparticular inthestatistical
information provided, that Kyrgyzalco controls virtually allrecorded imports ofalcohol and
alcoholic beverages into theKyrgyz Republic.
Paragraph 1E.ofWT/ACC/KGZ/10/Add.1 (rather than WT/ACC/KGZ/10) states thefollowing:
"Currently, Kyrgyzalco andcompanies under thestructure ofKyrgyzalco arenotengaged in
theimport ofalcoholic products, except theimport ofethyl alcohol fortheir own use". The
statistical information provided isconsistent with such statement andindicates that noalcoholic
products (except spirits) were imported bycompanies under Kyrgyzalco.
GATT Article XVII requires State-trading enterprises shall make purchases orsales solely in
accordancewithcommercialconsiderationsandshallaffordenterprisesofotherMembersadequate
opportunity, inaccordance with customary business practices, tocomplete forparticipation in
such purchases orsales. Itdoes notappear that such opportunities have been provided.
Please explain why Kyrgyzalco isnotcurrently importing alcoholic products, other than ethyl
alcohol.
What steps istheKyrgyz Government taking toensure that Kyrgyzalco affords adequate
opportunity forforeign sellers ofalcoholic products toparticipate initspurchases andsales?
Answer:
Companies under Kyrgyzalco may obtain alicence toimport alcohol andalcoholic products.
Also, anyother company intheKyrgyz Republic mayobtain alicence toimport alcohol andalcoholic
products (except ethyl alcohol). There arenorestrictions orbarriers bythegovernment fortheimport
ofalcoholic products.
Companies under Kyrgyzalco aremainly producers ofalcoholic products andsuch companies
import ethyl alcohol forthepurpose ofproducing alcoholic products. Itisabusiness decision by
companies under Kyrgyzalco nottoimport alcoholic products.
There arenoprohibitions onanycompany (domestic orforeign) notunder thestructure of
Kyrgyzalco, to,under contract withKyrgyzalco, (1)import alcoholic products onbehalf ofKyrgyzalco
or(2)purchase alcoholic products produced bycompanies under Kyrgyzalco andsellthem domestically
orexport them. Inaddition, foreign investors maypurchase shares in,orfully own, companies under
Kyrgyzalco. Currently, foreign investors have shares inoneofthecompanies under Kyrgyzalco.
Question 9:
According toparagraph 1E.ofWT/ACC/KGZ/10/Add.1, companies under Kyrgyzalco areonly
exporting toother CIS countries onabarter basis.
Does Kyrgyzalco oritscontrolled enterprises import alcoholic products orethyl alcohol from CIS
countries pursuant tobarter transactions?WT/ACC/KGZ/13
Page 9
Dotheimport licensing andprice control systems apply onanMFN basis totheimportation of
alcoholic products from CIS countries?
Answer:
Noalcoholic products areimported onabarter basis from CIScountries byKyrgyzalco or
itsassociate enterprises. Ethyl alcohol isimported onabarter basis from Ukraine andRussia.
There isnoprice control system connected with theimportation ofalcoholic products. Import
licensing applies onaMFN basis totheimport ofalcoholic products.
Question 10:
Concerning theother State-trading enterprises listed anddescribed inWT/ACC/KGZ/10/Add.1:
Kyrgyztamekesi isthesoleprovider oflicences fortheproduction oftobacco products intheKyrgyz
Republic andtheexport offermented tobacco. Importation, however, does notrequire alicence,
and"any person may obtain alicence toengage intheproduction oftobacco products" andthe
import/export offermented tobacco."
Please outline theconditions under which imported tobacco products aremarketed intheKyrgyz
Republic.
Answer:
Imported tobacco products aremarketed freely intheKyrgyz Republic. There arenospecial
conditions.
For health protection and sanitary reasons there arecurrent plans tointroduce licence
requirements fortheexport offermented tobacco andimport oftobacco products.
Question 11:
Concerning Kyrgyzgasmunaizat:
What firms, inaddition toKyrgyzgasmunaizat, import andexport ofoilproducts andnatural
liquefied natural gas? Arethese firms State owned, inwhole orinpart?
Answer:
There arenofirms (including Kyrgyzgasmunaizat) currently exporting oilproducts, natural,
andliquefied gas. Themain reason isthatdemand inthedomestic market outweighs thesupply. Note,
however, thatthere arenoprohibitions bythegovernment ontheexport ofoilproducts, natural gas,
andliquefied gas.
There arefiveprivately-owned companies engaged intheimportation ofoilproducts: Lukoil
Kyrgyzstan, Tyan-Shan Oil,Sato Petroleum, Datka, andEkooil.
Inaddition toKyrgyzgasmunaizat which imports approximately 50percentofthenatural gas
andliquefied gastotheKyrgyz Republic, anumber ofState companies (e.g. Kadamjai Antimony Group,WT/ACC/KGZ/13
Page 10
Maili SuuLamp Plant) arecurrently importing natural gastomeet their own demand. These State
companies have their owncontracts with Uzbekistan forimporting natural gasandhave acommercial
contracts with Kyrgyzgasmunaizat totransport gasfrom Uzbekistan totheKyrgyz Republic.
Question 12:
Concerning Kyrgyz Energy Holding Company:
Itappears from thestatistical table attached thatthere isnotrade electrical power energy inthe
Kyrgyz Republic that does notoriginate with thiscompany.
Please describe thelicensing procedures andcriteria necessary forafirm toshare inthistrade.
Please indicate how many licences have been requested, granted, and/or denied.
Iselectrical power freely available equally toallfirms andindividuals intheKyrgyz Republic
attheinternal, concessional, price? Including foreign firms? Ifnot,please outline therestrictions.
How istheexport price ofbartered electrical energy established with Uzbekistan andKazakstan?
While there may notbeanydejure barriers totrade inelectrical energy intheKyrgyz Republic,
itwould appear that there isatleast adefacto monopoly inthehands oftheKyrgyz Energy
Holding Company.
Answer:
Currently theproduction andsaleoftheelectrical energy arecarried outde-facto onlybyKyrgyz
Energy Holding. There arenoregulatory barriers toentry. Any person may apply forlicence for
generation, transmission, distribution, andsaleofelectrical energy. Thedraft regulations outlining
theprocedures, criteria, andrequirements forobtaining such licences arecurrently being developed
inaccordance with theLaw onLicensing of3March 1997. Acopy ofthislawwasprovided tothe
Secretariat inJune 1997.
Asoftoday noapplication forlicences have been submitted totheLicensor (the"State Energy
Agency under theCabinet ofMinisters").
Electrical power isequally available toallfirms andindividuals intheKyrgyz Republic. The
rates forhouseholds arelower than therates forfirms (legal persons) only iftheconsumption level
ofahousehold isbelow 300KWpermonth during summer and700KWpermonth during winter.
Iftheconsumption level ofahousehold ishigher thanthese twofigures thentherates willbethesame
asfirms. Therates forallfirms arethesame. There isnodifference intherates charged to(1)a
legal person (without foreign ownership), (2)alegal person (fully orpartially foreign-owned), and
(3)arepresentative orbranch office.
Export prices ofbartered electrical energy established with Uzbekistan andKazakstan are
negotiated onannual basis anddepend onthetraded volume andconditions oftheinter-governmental
agreement. Thevolume andthecommercial value ofbartered goods areconsidered during negotiation.WT/ACC/KGZ/13
Page 11
Question 13:
Concerning Kyrgyzaltyn: Please correct thetable onpage 10.
Answer:
Antimony
(tons)National
ProductionProduction-
KyrgyzaltynTotal
ImportImport-
KyrgyzaltynTotal
ExportExport-
Kyrgyzaltyn
1996 6,001.9 6,001.9 0.0 0.0 4,700.1 4,700.1
1995 7,053.2 7,053.2 99.0 99.0 6,283.4 6,283.4
1994 9,588.0 9,588.0 0.0 0.0 8,687.1 8,687.1
Question 14:
Concerning theinformation provided inWT/ACC/KGZ/9/Add.1:
Wesupport thenotification ofthe"natural monopoly" firm listed inthisdocument, whether or
notthere isalegal basis forthemonopoly. This includes (a)theKyrgyz Energy Holding Company
(electricity), Kyrgyzalco (alcohol), Kyrgyztamekesi (tobacco andproducts).
Wecommend theKyrgyz Republic forthisdecision, inthatitwillgreatly assist WTO Members
inbetter understanding thenature ofthemarket inthecommodities produced and/or traded
bythese firms.
Thereasons given fornon-notification "ofthepermitted monopolies" arenotsufficient todetermine
whether ornotthat decision istheright one.
Weseek more information onthe"permitted" monopolies listed andthenature oftheir monopoly
rights. Arethey State owned? Dothey trade with oronbehalf ofthegovernment?
Answer:
Permitted Monopoly State
ShareTrade with State Trade onbehalf State
1. Jalal Abad OilProcessing
Plant50% No No
2. Kyrgyzgasmunaizat 100% Yes(State enterprises,
government institutions)Yes(please see1(F) of
WT/ACC/KGZ/10/Add.1)
3. Kyrgyzkomur 70% No No
4. Kyrgyzstan Aba Joldoru 100% Yes(2-3% oftotal
business--servicing
government functions)No
5. Uchkun 100% Yes(25% with other State
enterprises)No
6. Akyl 80% Yes(80-85% with state
enterprises)NoWT/ACC/KGZ/13
Page 12
Permitted Monopoly State
ShareTrade with State Trade onbehalf State
7. Kyrgyzaltyn 100% Information notavailable per
instructions oftheMinistry
ofNational SecurityInformation notavailable
perinstructions ofthe
Ministry ofNational
Security
Privatization
Question 15:
The Kyrgyz Republic hasstated inresponse toquestion 6,WT/ACC/KGZ/7 that "Currently,
theprivatizationprogrammefor1997isbeingdeveloped.During1997theprivatizationprogramme
for1998 and 1999 will bedeveloped. Itistooearly topredict thedate onwhich theentire
programme willhave been completed, butitisenvisaged that theprogramme willbecompleted
before 2005." The response toquestion 4ofWT/ACC/KGZ/9 states that "The Privatization
programme for1998-1999 iscurrently being developed. Itisexpected that theGovernment
complete itswork toward theendof1997. Atthat time, information willbeprovided".
Theongoing nature oftheprivatization programme makes periodic reporting onthestatus and
progress toward completion theprogramme allthemore useful necessary.
Werenew ourrequest made onpage 3ofWT/ACC/KGZ/10. Will theKyrgyz Republic commit
toperiodic reporting, confirming thatitisimportant toensure fulltransparency andtokeep WTO
Members informed ofKyrgyz Republic 'sprogress inthereform ofitstransforming economic
and trade regime, and that theKyrgyz Republic will provide annually toWTO Members
information ondevelopments initsprivatization along thelines ofthat provided totheWorking
Party during theaccession process, andonother issues related toitseconomic reforms asrelevant
toitsobligations under theWTO.
When formulating itsresponse tothequestions onthestatus ofprivatization, weaskthat the
information ontheprogress theprogress andstatus oftheprogramme bedisplayed intabular
form aswell asintext, intheformat used byBulgaria inWT/ACC/BGR/5, Information on
Progress ofthePrivatization Process ofState Enterprises.
Answer:
TheKyrgyz Republic willcommit toperiodic reporting, confirming thatitisimportant toensure
fulltransparency andtokeep WTO Members informed ofKyrgyz Republic 'sprogress inthereform
ofitstransforming economic andtrade regime, andthattheKyrgyz Republic willprovide annually
toWTO Members information ondevelopments initsprivatization along thelines ofthatprovided
totheWorking Party during theaccession process, andonother issues related toitseconomic reforms
asrelevant toitsobligations under theWTO.
Information regarding thestatus ofprivatization willbeprovided onanannual basis. Anupdate
onprivatization status willbeprovided during thefirsthalfof1998 based ontherecommended format
mentioned above.WT/ACC/KGZ/13
Page 13
Price Controls
Question 16:
Please respond totherequest forappropriate commitments onthePricing policy andprice controls
contained onpage 9ofWT/ACC/KGZ/10.
Answer:
TheKyrgyz Republic willcommit initsprotocol ofaccession tothefollowing:
- enhanced transparency inthearea ofprice control over goods andservices subject toState
price controls notified intheaccession process. Anychanges inprice control willbepublished
inofficial publications;
- allprices forgoods andservices inevery sector thatarenotclearly notified asunder control
willbedetermined bymarket forces. Allprice controls onproducts andservices stillineffect,
atthecentral andsub-central level, willbelisted byHSnumber. Thecontrols inplace will
bedescribed, andtheauthority toapply these andanyother such controls clearly cited, including
thereasonsfortheexistingcontrols,andtheconditionsunderwhichtheKyrgyzRepublicexpects
tousesuch controls inthefuture;
- itsprice controls willbeapplied inaWTO-consistent fashion, taking account theinterests of
exporting WTO Members asprovided forinArticle III:9 oftheGATT 1994.
TheKyrgyz Republic does nothave anyimport reference prices inplace andcommits that
such measures willnotbereintroduced after accession, except inaccordance with WTO Agreements.
III. FRAMEWORKFORMAKINGANDENFORCINGPOLICIESAFFECTINGFOREIGN
TRADE INGOODS AND INSERVICES
4. Legislative Programmes orPlans toChange theRegulatory Regime
Question 17:
Thank youforproviding translated drafts oftheextensive volume oftrade legislation that ison
theParliament 'swork programme for1997. Wewillreview thisdraft legislation andwritten
comments onitprior tothenext Working Party meeting.
Answer:
Since thelastsetofquestions andanswers which wasforwarded totheWTO inJune 1997,
thefollowing legislation were enacted:
(i) TheCustoms Code, 30July 1997
(ii) Amendments totheCustoms Tariff Law, 28July 1997
(iii) TheLaw onForeign Investment, 24September 1997
(iv) TheLaw onBanks andBanking Activities, 29July 1997
(v) TheLaw onNational Bank, 29July 1997
(vi) TheLaw onCollateral, 27June 1997
(vii) TheLaw onSubsurface Resources, 2July 1997WT/ACC/KGZ/13
Page 14
(viii) TheLaw onState Regulations ofForeign Trade Activities, 2July 1997
Copies oftheabove laws areprovided inAttachment B.Resulting from theenactment ofthe
aforementioned laws, thefollowing laws became invalid:
(i) TheLaw ontheNational Bank oftheKyrgyz Republic, 12December 1992
(ii) TheLaw onBanks andBanking Activity intheKyrgyz Republic, 11December 1992
(iii) TheCustoms Code, 2July 1992
(iv) TheLaw onSubsurface Resources, 15December 1992
(v) TheLaw onCollateral, 6March 1992
(vi) TheLawonGeneral Principles ofForeign-Economic Activity oftheKyrgyz Republic, 18April
1991.
Perrequest ofworking party members, theKyrgyz Republic isproviding alistofalldraft
laws relevant toitsforeign trade regime:
Draft Law Status Date ofsubmission to
WTO
1. TheLaw on
Anti-DumpingBeing approved bythe
GovernmentProvided inAttachment B
2. TheLaw on
CountervailingBeing approved bythe
GovernmentProvided inAttachment B
3. TheLaw onSafeguards Being approved bythe
GovernmentProvided inAttachment B
4. TheCivil Code (Section
onIntellectual Property)Approved byParliament during
thefirst reading (June 1997).Provided inJune 1997
5. TheCriminal Code
(Section onIntellectual
Property)Being reviewed byParliament. Provided inAttachment B
6. TheLaw OnCopyright
andNeighbouring RightsApproved byParliament during
thefirst reading (June 1997).Provided inAttachment B
7. TheLaw On
Trademarks,
Servicemarks and
Appellation ofPlaces of
OriginApproved byParliament during
thefirst reading (June 1997)Provided inAttachment B
8. ThePatent Law Approved byParliament during
thefirst reading (June 1997)Provided inAttachment B
9. TheLaw onSoftware
andDatabaseApproved bytheGovernment
andsubmitted toParliament.Provided inAttachment B
10. TheLaw onIntegrated
Circuit TopographyApproved bytheGovernment
andsubmitted toParliament.Provided inAttachment B
11. TheLaw onSelection
AchievementsApproved bytheGovernment
andsubmitted toParliamentProvided inAttachment BWT/ACC/KGZ/13
Page 15
Draft Law Status Date ofsubmission to
WTO
12. TheLaw onCommercial
SecretsBeing drafted byParliament Tobeprovided assoon as
itisfinalized
IV. POLICIES AFFECTING TRADE INGOODS
1. Import Regulation
(b) Characteristics ofnational tariff, customs tariff nomenclature (HS), types ofduties, general
description ofthecustoms tariff structure, weighted average level ofduties onmain customs
tariff groupings, application ofMFN rates, tariff preferences
Question 18:
According totheresponse toquestion 5ofWT/ACC/KGZ/10, dated 5June 1997, thecustoms
tariff schedule provided inWT/ACC/KGZ/3 isnolonger valid, andtheKyrgyz Republic isentering
negotiations with theWTO Working Party onthebasis ofthetariff rates ineffect intheKyrgyz
Republic on1June 1997 (flat 10percent mentioned inSection IV.1.b. ofWT/ACC/KGZ/3).
However,theKyrgyzRepublicalsosubmittedWT/ACC/SPEC/KGZ/4on30June1997,indicating
that thisdocument contains Kyrgyz Republic 'sgoods market access offer.
Please clarify which ofthese "offers" isineffect. IfitisWT/ACC/SPEC/KGZ/4, please indicate
why, ifapplied rates aremostly atthelevel ofa10percent tariff rate across theboard, isthe
initial access offer from the Kyrgyz Republic somuch higher, e.g., asoutlined in
WT/ACC/SPEC/4?
Please respond totherequest onpage 12that theKyrgyz Republic negotiate andestablish its
WTO Goods Schedule inHS96nomenclature.
Answer:
WT/ACC/SPEC/KGZ/4, published bytheWTO Secretariat on30June 1997, isthe
Kyrgyz Republic ’soffer ongoods. TheKyrgyz Republic isready todiscuss thereasons forhigher
rates intheoffer than currently applied rates (flat 10percent) during bilateral negotiations.
Theoffer inWT/ACC/SPEC/KGZ/4 wasprepared according toHS96nomenclature.
(c) Tariff quotas, tariff exemptions
Question 19:
Inorder toensure transparency, theKyrgyz Republic should eliminate itsextensive useoftariff
exemptions andapply zero orlowtariff rates onimports oftechnical equipment, rawmaterials,
material reagents, components, replacements, spare parts, semi-manufactures andother articles
fortheproduction offinal products.
According totheresponse toquestion 36ofWT/ACC/KGZ/7, theproposed Customs Tariff Law
will retain theduty exemption onimports oftechnical equipment, raw materials, materials,
reagents, components, replacements, spare parts, semi-manufactures andother articles, used by
domestic business enterprises fortheproduction offinal products.WT/ACC/KGZ/13
Page 16
Will these duty exemptions also beavailable toforeign manufacturers producing final products
intheKyrgyz Republic?
Please describe theprocess forreceiving theexemptions andanyrestrictions orconditions imposed
onforeign manufacturers seeking toobtain alicence from theMinistry ofIndustry andForeign
Trade toreceive these exemptions.
How does theKyrgyz Republic define "final products" forpurposes oftheduty exemptions?
Would repackaging orsimple assembly constitute production offinal products forpurposes of
theduty exemptions?
Please describe thefees, ifany, toobtain thelicence toobtain theduty exemptions.
Answer:
TheKyrgyz Republic currently provides toKyrgyz legal entities (aKyrgyz legal entity may
be100percentforeign owned) tariff exemptions onimports oftechnical equipment, rawmaterials,
material reagents, components, replacements, spare parts, semi-manufactures andother articles for
theproduction offinal products.
Manufacturers seeking toobtain such exemptions must submit anapplication totheMinistry
ofIndustry andForeign Trade describing theitems andthequantity oftechnical equipment, raw
materials, materials, reagents, components, replacements, spare parts, semi-manufactures andother
articles necessary forproduction offinal products. Theapplication isreviewed bytheMinistry for
assessing (i)whether ornotthose items areindeed used inmanufacturing finalproducts bythepetitioning
enterprise and(ii)whether ornotthequantities described intheapplication aregrounded. Ifthe
application isapproved bytheMinistry, then theCabinet ofMinisters includes such enterprise onthe
listofexempted manufacturers. Themanufacturers may notimport duty freemore than thequantity
requested intheoriginal application.
Thesame procedure toobtain these duty exemptions applies toKyrgyz legal entities with or
without foreign participation. There arenorestrictions orconditions imposed onKyrgyz legal entities
which arepartially orfully foreign owned.
TheKyrgyz Republic defines "final products" forpurposes oftheduty exemptions asproducts
originating intheKyrgyz Republic according totherules oforigin described intheexisting customs
legislation. Repackaging orsimple assembly donotconstitute production offinal products forpurposes
oftheduty exemptions
Nofeesarecharged bytheMinistry ofIndustry andForeign Trade ortheCabinet ofMinisters
forobtaining these duty exemptions.
(d) Other duties andcharges, specifying anycharges forservices rendered
Question 20:
Weappreciate theKyrgyz Republic 'scommitment toamend theproposed Customs Code toensure
that thecustoms feestructure andimport licence feesconform toGATT Article VIII from the
date ofaccession.WT/ACC/KGZ/13
Page 17
Please respond totherequest inWT/ACC/KGZ/10, page 13,foradetailed description ofthe
advalorem customs processing feesitsapplies andthemeasures Kyrgyz Republic intends totake
tobring them into conformity with Article VIII oftheGATT 1994.
Please provide theWTO Secretariat aschedule oftherevised customs duties feesand/or method
ofassessment that addresses their WTO compatibility attheearliest opportunity.
Please respond totherequest onpage 14ofWT/ACC/KGZ/10 forinformation onhowtheKyrgyz
Republic intends tobring into WTO conformity itsfeestructure forsanitary certification of
imports.
Answer:
When changing thefeestructure forcustoms processing, phytosanitary certificate, veterinary
certificate, andexport/import licensing, theKyrgyz Republic willusethemethods described herein
using actual data atthattime.
(i) Customs Processing Fee-Proposal forConformity with Article VIII oftheGATT 1994
TheKyrgyz Republic willbring upon accession itscustoms processing feeintoconformity
with Article VIII oftheGATT 1994.
TheKyrgyz Republic proposes tomaintain anadvalorem feeof0.15 percentwith aminimum
ofsom 180(approximately US$10) andamaximum ofsom 550(approximately US$31). Thefee
structure willbereviewed every twoyears. TheKyrgyz Republic proposes tocontinue theexisting
rateof0.15 percentalthough theexpense/revenue ratio was3.6percentforfiscal year 1996 andis
estimated at2.4percentforfiscal year1997. Theminimum andmaximum feesaredetermined using
amethodology thatisbased oninternationally recognized cost accounting principles andpractices.
Computational details areprovided inAttachment A.I.
Determining Minimum Fee: Thefeeconsists oftwocomponents: Direct costs andIndirect
costs. Direct costs arethose thatareexclusively incurred toprocess import declaration. These consist
ofemployee costtoprocess animport declaration. Thetime spent byanemployee toprocess various
categories ofimport goods wasanalyzed andtheaverage employee costtoprocess animport declaration
wascomputed. Indirect costs arethose thatareincurred forvarious customs activities including import
processing. These costs, alsocalled overhead costs, areallocated based onapproximate total time
spent bycustoms employees. Itisestimated thatonaverage, Kyrgyz Customs employees spent about
50percentoftheir time processing import declarations. Asaresult, 50percentofthetotal overhead
costs wasallocated toimport processing.
Determining Maximum Fee: Thefeeisbased onthetotal costs ofKyrgyz Customs. Itis
estimated thatapproximately 50percent ofCustoms resources areconsumed toprocess import
declarations. Asaresult, about 50percent oftotal costs areallocated toimport processing.
TheKyrgyz Republic proposes tocreate arevolving fund tofinance theimport processing
activities. Allrevenues collected from import processing feewillbecredited tothisfund. Theproceeds
from thisfund may beused only tomeet thecosts ofimport processing.WT/ACC/KGZ/13
Page 18
(ii) Phytosanitary Certificate
Thecurrent costs ofissuing Phytosanitary Certificate (minimum fee:som 70;maximum fee:
som 223) exceed thefeecharged (minimum fee:som 36;maximum fee:som 265) forsuch acertificate.
Adetailed analysis isprovided inAttachment A.II showing current costs ofissuing Phytosanitary
certificate.
TheKyrgyzrepublicbelievesthatthecurrentfeestructureisinfullcompliancewithArticleVIII.
We, therefore, propose tokeep thecurrent feestructure forissuing phytosanitary certificates.
(iii) Veterinary Certificate
Thecurrent costs ofissuing Veterinary Certificate (minimum fee:som 250; maximum fee:
som 3,272) exceed thefeecharged (minimum fee:30Som; maximum fee:som 500) forsuch a
certificate. Adetailed analysis isprovided inAttachment A.III showing current costs ofissuing
Veterinary certificate.
TheKyrgyzrepublicbelievesthatthecurrentfeestructureisinfullcompliancewithArticleVIII.
We, therefore, propose tokeep thecurrent feestructure forissuing veterinary certificates.
(iv) Import/Export Licensing Fee
Thecurrent feetohave animport orexport licence issom 900(US$52.94). Adetailed analysis
isprovided inAttachment A.IV showing thatthecurrent feereflect thecostofservices rendered.
(f) Import licensing procedures
Question 21:
According toWT/ACC/KGZ/11, theKyrgyz Republic submitted thetextoftheLaw onImport
Licensing totheWTO Secretariat forreview bytheWorking Party. Isthisdraft legislation or
hastheImport Licensing Law already been enacted byParliament? What istheeffective date
forthislaw?
Answer:
Currently, there isnolawordraft Law onImport Licensing intheKyrgyz Republic. In
June 1997, theKyrgyz Republic submitted totheWTO Secretariat acopy oftheLaw onLicensing
which wasenacted on3March 1997 andbecame effective on10April 1997. Chapter IIofthislaw
deals with import andexport licensing.
Question 22:
AccordingtotheinformationprovidedinWT/ACC/KGZ/10/Add.1(onStateTradingEnterprises),
licences arerequired fortheimportation andexportation ofgold, antimony andmercury. A
licence toengage intheexport ofmercury andantimony willnotbegranted iftheexport contract
does notstipulate saletothefinal consumer. What istheWTO rationale formaintaining the
useofimport andexport licensing formercury andantimony?WT/ACC/KGZ/13
Page 19
Answer:
TheWTO rationale formaintaining theuseofexport licensing formercury andantimony is
environmental andhealth protection. Permission toimport mercury andantimony isnolonger required.
(h) Customs valuation
Question 23:
According totheresponse toquestion 7ofWT/ACC/KGZ/10, thedraft Customs Code willcontain
specific provisions implementing WTO requirements forcustoms valuation. Unfortunately, we
have notyethad anopportunity toreview thedraft legislation, which was attached to
WT/ACC/KGZ/Add.2 asAnnex 1-4,butwewillprovide comments onthecompatibility ofthis
legislation with theWTO Customs Valuation Agreement prior tothenext working Party meeting.
Answer:
Please findinattachment Bacopy oftheCustoms Code of30July 1997.
(k) Application ofinternal taxes onimports
Question 24:
Weappreciate theKyrgyz Government 'sacknowledgment inWT/ACC/KGZ/10 thatthecurrent
excisetaxregime,withdifferentlevelsormethodsofcalculationforimporteddomestically-produced
goods, isnotcompatible with GATT Article III, andwelcomes thecommitment toestablish,
upon accession totheWTO, oneequal excise taxregime forimported anddomestically-produced
goods.
According totheresponse toquestion 77ofWT/ACC/KGZ/7, theKyrgyz Republic currently
supports theconcept ofbringing itsVAT system into conformity with accepted world practice:
i.e.,applying theVAT toallgoods sold orimported intotherepublic regardless oftheir country
oforigin, andexempting exported goods regardless ofcountry ofdestination.
WeseekacommitmentfromtheKyrgyzRepublicthatitwillimplementVATandexcisetaxsystems
thatareinfullconformity with WTO most-favoured nation requirements prior toWTO accession.
Answer
Currently, excise taxsystems areinfull conformity with WTO most-favoured-nation
requirements. AsforVAT, theKyrgyz Republic commit toimplement VAT systems thatareinfull
conformity with WTO most-favoured-nation requirements atthetime ofWTO accession. Appropriate
taxlegislation willbeamended during early 1998.
Question 25:
The response toquestion 9(c)ofWT/ACC/KGZ/10 only increases theuncertainly ofthelevel
ofborder charge tobeapplied toimports under excise tax.WT/ACC/KGZ/13
Page 20
Please citetheprovisions oftheCustoms Code thatpermit thediscretionary application oftariffs
towith excise taxes. Please elaborate ontheconditions that would activate these measures.
Answer
Currently, noimported goods totheKyrgyz Republic aresubject tobothexcise taxes andimport
duties atthesame time. Itisnotcontrary tointernational practices orWTO rules tohave excise taxes
andimport duties apply together foranimported good.
TheCustoms Code does nothave anyprovisions which permit thediscretionary application
oftariffs with excise taxes. IncasetheCabinet ofMinisters decides inthefuture tointroduce excise
taxes forproducts subject tocustoms duties (orvice versa), agovernment resolution willbeissued
andpublished atleast 15days before theapplication ofthese duties ortaxes comes intoeffect.
(l) Rules oforigin
Question 26:
According totheresponse toquestion 81ofWT/ACC/KGZ/7, acertificate oforigin issued by
theauthorized body intheexporting country toissue such certificates isrequired forimports
ofallproducts. Please explain, along with examples, what isaconsidered tobean"authorized
body."
Answer:
TheKyrgyz legislation does notprovide forthedefinition ofthe“authorized body. ”Inpractice,
Customs authorities oftheKyrgyz Republic accept certificates issued byChambers ofCommerce of
thecountry oforigin.
Question 27:
Annex II.3(d) oftheWTO Agreement onRules ofOrigin requires that Members aretoensure
that exporters, importers, oranyperson with justifiable cause willbeprovided upon request
assessments ofpreferential origin assoon aspossible butnolater than 150days after arequest
forsuch anassessment ismade. Asimilar requirement exists inArticle 2(h)oftheWTO Agreement
onRules ofOrigin applicable tonon-preferential trade regimes.
Please describe indetail theprocess bywhich theKyrgyz Government provides such assessments
incompliance with theWTO Agreement onRules ofOrigin. Please describe howsuch assessments
arepublicly available, asalso required under Article 2(h) oftheWTO Agreement.
Please describe indetail theprocedures thatprovide prompt independent review ofadministrative
actions taken bytheKyrgyz Republic inrelation todeterminations oforigin, asrequired under
Annex II.3(3) andArticle 2(j)oftheWTO Agreement onRules ofOrigin.
Ifthere arenorules oforigin applicable toMFN trade other than review ofacertificate oforigin,
how does theKyrgyz Republic ensure compliance with Article 2(e)oftheWTO Agreement, which
requires thatrules oforigin areadministered inauniform manner, such asinasituation whereby
countries areissuing certificates oforigin using different standards?WT/ACC/KGZ/13
Page 21
According totheresponse toquestion 82ofWT/ACC/KGZ/7, theproposed Customs Code includes
themethods specified intheKyoto Convention Annex.
Answer:
Requests forassessment ofpreferential origin willberesponded towithin 150days. Regulations
willbedrafted toaddress thetime within which responses willbeissued.
Chapter 55oftheadopted Customs Code oftheKyrgyz Republic provides forissuance of
preliminary decisions onvarious issues including thecountry oforigin. Assessments willstayeffective
forthree years. Implementing instructions describing theprocess indetail willbedeveloped bySCI.
Chapters 58,59and60oftheNew Customs Code provides thatadministrative actions taken
bycustoms bodies canbeappealed intwosteps. Preliminary appeal may befiled inwriting tothe
Superior Customs Body ("Headquarters") orSuperior official. This appeal willbereviewed within
amonth. Appeals should besubmitted within three months from themoment ofnotification, andsix
months -iftheapplicant wasnotnotified. Ifappellant isnotsatisfied with adecision ofhigher customs
authority, hecanappeal tothedistrict (city) court where thecustoms body islocated.
TheCustoms Code provides thatgoods thatarewholly produced inacountry areconsidered
asoriginating inthatcountry. The listofwholly produced goods was adopted from theKyoto
Convention Annex. TheCustoms Code provides forthree methods ofdetermining origin asspecified
intheKyoto Convention Annex. However, thetariff shift method ofdetermining origin istheonly
method inuse. There arenoregulations implementing theadvalorem orspecific manufacturing or
processing methods. TheKyrgyz Republic plans toadopt theHarmonized Rules ofOrigin once finalized
bytheWorld Customs Organization.
(m-o) Anti-dumping, countervailing andsafeguard measures
Question 28:
Wenote intheresponse toquestion 36ofWT/ACC/KGZ/9 andquestion 12inWT/ACC/KGZ/10
that theKyrgyz Republic nolonger plans toadopt anew Customs Tariff Law, that theexisting
Customs Tariff Law willbecome invalid upon enactment ofthenew Customs Code, andthat
additional legislation willbeadopted toaddress safeguards, anti-dumping, andcountervailing
duty cases. The United States appreciates theefforts being made bytheKyrgyz Government
toensure that theanti-dumping, countervailing and safeguards measures will bedrafted in
conformity with respective WTO Agreements. Wewillprovide comments onthedraft legislation
attheearliest opportunity after itissubmitted totheWTO Secretariat.
Answer:
Please find inAttachment Bacopy ofthedraft lawonanti-dumping, thedraft lawon
countervailing, andthedraft lawonsafeguards.WT/ACC/KGZ/13
Page 22
2. Export Regulation
(d) Export licensing procedures
Question 29:
According totheresponse toquestion 15ofWT/ACC/KGZ/10, theKyrgyz reviews licences for
theexportation offerrous, precious andrare-earth metals extracted orprocessed intheKyrgyz
Republic toevaluate theprices relative tothequality oftheproducts. While theexport licences
arenotrefused onthebasis oflowprices, recommendations aremade totheapplicant toensure
that prices arecomparable toworld market prices.
What sanctions does theKyrgyz Government impose onexporters who continue toexport these
products atthat areconsidered tobelow world market prices? Does theKyrgyz Government
consider theexport ofthese products atlowprices initsdecision togrant orrenew enterprise 's
licence topurchase orsellfragments andwaste ofnon-ferrous andferrous metals?
Answer:
Nosanctions areimposed onexporters whocontinue toexport these products thatareconsidered
tobebelow world market prices. TheKyrgyz Government does notconsider theexport ofthese products
atlowprices initsdecision togrant orrenew enterprise 'slicence topurchase orsellfragments and
waste ofnon-ferrous andferrous metals.
Question 30:
According totheresponses toquestions 101and102ofWT/ACC/KGZ/7, theCabinet ofMinisters
Resolution No.56of6February 1996 provides forlicensing requirements andcontrols onexports
oftextile goods, wearing apparel, silicon carbide, ammonium nitrate andrawaluminum, required
bybilateral agreements between theRussian Federation andtheEuropean Communities, and
forgeneral exports ofprecious stones, precious metals, articles containing precious metals, and
precious metal wastes. TheResolution willcome intoeffect upon ratification oftheCustoms Union
Agreement andcontinue throughout thetransition period during which internal customs barriers
areeliminated. TheKyrgyz Government justifies theuseofthese export restriction onthebasis
ofnational security controls.
Please elaborate onthenational security interests thatwould beprotected bytheuseofthese export
restrictions.
Please explain indetail howthecreation ofthecustoms union with Russia, Belarus andKazakstan
would justify theuseofrestrictions onexports ofgoods totheEuropean Communities andother
third countries.
Answer:
These restrictions areintroduced bytheKyrgyz Republic andother Customs Union countries,
inconnection with thecreation oftheCustoms Union andaccording totheAgreement with the
Russian Federation "On Uniform Procedure forRegulation ofForeign Economic Activity".WT/ACC/KGZ/13
Page 23
TheCustoms Union does notonly stipulate thecreation ofanunified external tariff andafree
tradeareabetweenmembercountries,butalsounifiedprocedureforregulatingforeigneconomicactivity,
including issuance ofimport andexport licences.
Question 31:
According totheresponse toquestion 61ofWT/ACC/KGZ/5/Add.2, thedraft lawrequiring
licensing forthepurchase and/or export ofelectric transmission communication lines and ferrous
andnon-ferrous metal items istoprotect theitems from theft bypersons desiring toresell those
metals toscrap metal processing firms.
Does thedraft lawprovide forthelicensing ofcompanies purchasing andselling these items for
scrap processing fordomestic uses? Ifnot, why not?
What istheWTO justification forthislicensing requirement ontheexportation andsaleforexport
ofthese items?
Answer:
Thedraft lawprovides forthelicensing ofcompanies purchasing andselling these items for
scrap processing fordomestic uses.
This licensing system isnotintended torestrict exports ofsuch items. Itisdesigned tocontrol
thelegality ofthesources ofsuch wastes, i.e.whether such items were plundered ornot.
(f) Export financing, subsidy andpromotion policies
We welcome theKyrgyz Government 'sdecision, noted intheresponse toquestion 16of
WT/ACC/KGZ/10, toadopt anewforeign investment lawthatwilleliminate taxincentives based
onexport performance. Wealso commend theKyrgyz Government 'sforitscommitment, in
theresponse toquestion 106ofWT/ACC/KGZ/7, tonotmaintain anyother export subsidies.
3. Internal Policies Affecting Trade inGoods
(f-g) Free zones, free economic zones
Question 32:
According totheresponse toquestion 21(b) ofWT/ACC/KGZ/10, theDirectorate oftheBishkek
Free Economic Zone (Information Bulletin No.2)provides exemptions from lease payments for
upto15years forestablishments which are(1)engaged inexport-oriented andimport substitution
production activities, (2)usedomestic raw materials and spare parts, and (3)employ certain
number ofpeople peryear. Inaddition, export-oriented production isexempt from quantitative
restrictions.
IstheDirectorate oftheBishkek Free Economic Zone aentity ofthegovernment orother public
body? Ifyes, please explain why thelease payment exemption forexport-oriented production
isnotaprohibited export subsidy under theWTO Agreement onSubsidies andCountervailing
Measures.WT/ACC/KGZ/13
Page 24
Please explain why thelease exemption, anadvantage that isconditioned onimport substitution
production activities, useofdomestic rawmaterials andspare parts, andemploy acertain number
ofpeople peryear, isnotaTRIM inconsistent with theobligation ofnational treatment. (TRIMs
Illustrative listnumber 1(aandb))
Please explain why theexemption from quantitative forexport-oriented production isnotaTRIM
inconsistent with theobligation ofgeneral elimination ofquantitative restrictions. (TRIMs
Illustrative listnumber 2(a))
Answer:
TheDirectorate oftheBishkek Free Economic Zone isanentity ofthegovernment. Thelease
payment exemption forexport-oriented andimport substitution production isaprohibited export subsidy
under theWTO Agreement onSubsidies andCountervailing Measures (SCM) andwillbeeliminated
upon accession totheWTO.
Thelease payment conditioned onemployment ofacertain number ofpeople peryear isnot
TRIMs inconsistent. TheTRIMs Agreement refers only toproducts.
TheleasepaymentconditionedonimportsubstitutionproductionaloneisnotTRIMsinconsistent
butitisSCM inconsistent. Thesource ofinput forproduction purpose isnotrestricted. Anenterprise
(i)isnotprohibited orlimited initsability toimport products used inorrelated toitslocal production
and(ii)isnotrequired touselocal products asinput foritsproduction.
Thelease payment conditioned onuseofdomestic rawmaterials andspare parts isTRIMs
inconsistent andwillbeeliminated upon accession totheWTO.
Currently, theexemption from quantitative restrictions forexport-oriented production isTRIMs
inconsistent andwillbeeliminated upon accession totheWTO
Appropriate legislation willbeprepared during thefirst halfof1998 toeliminate allabove
mentioned TRIMs andSCM inconsistencies.
Question 33:
According totheresponse toquestion 21(b) ofWT/ACC/KGZ/10, forproducts thatareshipped
from Bishkek Free Economic Zone totherestoftheKyrgyz Republic, only the0.15 percent
customs processing feeisapplied. Normal taxes, tariffs, andother restrictions apply forgoods
notfrom thezone andimported from thezone totherestoftheKyrgyz Republic. However,
intheresponse toquestion 153ofWT/ACC/KGZ/7, theKyrgyz Government confirmed that all
goods produced orimported intofreezones willbesubject tonormal customs formalities, taxes
andtariffs when entering thecustoms territory oftheKyrgyz Republic.
How does theKyrgyz Government intend toeliminate thepreferential access into theterritory
oftheKyrgyz Republic forproducts originating intheBishkek Free Economic Zone?
Weseek acommitment toensure that allsales from theFree Economic Zone intotherestofthe
Kyrgyz Republic bears normal tariffs andtaxes assessed onother domestic andimported goods.WT/ACC/KGZ/13
Page 25
Answer:
TheKyrgyz Republic willamend theLaw onFree Economic Zone during early 1998 toensure
thatgoods originating intheFree Economic Zones andimported totheKyrgyz Republic willbesubject
tothesame customs duties, taxes, andformalities asother goods imported totheKyrgyz Republic.
Consideration, however, willbegiven tothose goods produced inthezone using products ofKyrgyz
origin.
TheKyrgyz Republic commits toensure thatallsales from theFree Economic Zone intothe
restoftheKyrgyz Republic bears normal tariffs andtaxes assessed onother domestic andimported
goods.
(l) Government procurement
Question 34:
Wearedisappointed toread intheresponse toquestion 22ofWT/ACC/KGZ/10 that the
Kyrgyz Republic will not consider joining theGovernment Procurement Agreement until
January 1999, twoyears after thedate ofestablishment oftheKyrgyz Government Procurement
Agency.
Wearestrongly urging allacceding countries tojointheWTO GPA. TheKyrgyz Government
should reconsider itsdecision andcommit toacceding totheGPA prior toWTO accession for
thefollowing reasons:
Agreements ongovernment procurement arebeing negotiated inavariety ofinternational fora.
Besides theWTO GPA agreement, work isalso ongoing intheAPES and FTAA onsimilar
government procurement rules. The WTO GPA offers acohesive framework inwhich these
regional initiatives could develop, minimizing theriskofregional fragmentation oninternational
procurements issues.
Additionally, negotiations arealready beginning intheGATS Rules Group onGovernment
Procurement pursuant toGATS Article XIII:2.
TheWTO GPA works toassure that countries bidding ongovernment procurement projects in
foreign countries willhave atransparent and open process with recourse tounbiased dispute
settlement procedures. Greater transparency andrule oflawreinforce good government and
economic efficiency.
Inthefuture, there may beanoccasion inwhich aKyrgyz company would submit abidfora
government procurement project inaWTO GPA member country.
AccordingtoWT/ACC/KGZ/11,theKyrgyzRepublicsubmittedthetextoftheLawonGovernment
Procurement ofGoods, Works andServices totheWTO Secretariat forreview bytheWorking
Party.
IsthisdraftlegislationorhasthegovernmentprocurementlawalreadybeenenactedbyParliament?
What istheeffective date forthislaw?WT/ACC/KGZ/13
Page 26
Answer:
TheGovernment Procurement lawwasadopted bytheParliament on15April 1997, signed
bythePresident on13May 1997, andcame intoeffect on1June 1997. Acopy ofthislawwasprovided
inJune 1997 totheWTO Secretariat (WT/ACC/KGZ/11).
TheKyrgyz Republic isreconsidering itsdecision regarding considering accession totheGPA
prior toJanuary 1999. Ifachange indecision ismade, itwillbenotified during thethird working
party meeting.
4. Policies Affecting Trade inAgricultural Products
(a) Imports
Question 35:
According totheresponse toquestion 183ofWT/ACC/KGZ/7, theKyrgyz Republic nolonger
isapplying aflat10percent customs duty onagricultural products. However, according tothe
response toquestion 5(e)ofWT/ACC/KGZ/10, theKyrgyz Republic isentering negotiations with
theWTO Working Party onthebasis ofthetariff rates ineffect on1June 1997 (flat 10percent
onallproducts).
Please confirm thatallagricultural products arecurrently subject toatenpercentcustoms duty.
Please identify allagricultural products notsubject tothetenpercent duty andtheapplicable
rate.
Answer:
TheKyrgyzRepublicconfirmsthatallagriculturalproductsarecurrentlysubjecttoa10percent
customs duty.
(b) Exports
Question 36:
According totheresponse toquestion 185 ofWT/ACC/KGZ/7, theKyrgyz Government is
considering theeffects ofbinding export subsidies foragricultural products atzero. Export
subsidies arethemost trade distorting forms ofagricultural support. Westrongly encourage
theKyrgyz Republic tomaintain itssubsidy-free regime andbinds itexport subsidy commitment
atzero. Wealso strongly encourage theKyrgyz Republic tobind itsexisting policies ofnot
requiring licences forexport ofagricultural products andnotimposing tariffs orquotas onthe
export ofagricultural products.
Answer:
TheKyrgyz Republic commits tobind itsexport subsidy atzero foragricultural products.
TheKyrgyz Republic alsocommits tobind itsexisting policies ofnotrequiring licences forexport
ofagricultural products andnotimposing tariffs orquotas ontheexport ofagricultural products, except
inaccordance with WTO Agreements.WT/ACC/KGZ/13
Page 27
(e) Internal policies
Question 37:
Comments ontherevised AMS submission (WT/ACC/SPEC/KGZ/1/Rev.1)
Weappreciate theKyrgyz Republic 'srevised submission ofitsdomestic support andexport subsidy
measures (WT/ACC/SPEC/KGZ/1/Rev.1), andhave thefollowing general follow-up questions:
Although theKyrgyz Republic included deminimus calculations fortheir total AMS, wewould
also appreciate receiving separate deminimus calculations forboth products-specific andnon
product-specific AMS.
Insupporting table DS:1, column 3,theKyrgyz Republic continues tobevery vague about the
specific nature oftheprogrammes listed under General Services.
Please provide adetailed andspecific explanation oftheprogrammes listed under thiscategory.
Asageneral comment, wecontinue tobeconcerned with thelack ofspecific information in
supporting tables DS:1.
Specifically, theKyrgyz Republic only lists word-for-word what iswritten inAnnex 2ofthe
Agriculture Agreement, without explaining how their policies comply with these criteria in
column 3.This isespecially true for1.f,infrastructural services.
Wewould appreciate itiftheKyrgyz Republic could provide thisinformation indetail incolumn 3
ofDS:1.
Theitems intables DS:6toDS:9labelled "Support toagricultural producers" arevery vague.
Could theKyrgyz Republic please provide amore detailed explanation ofthetypes ofmeasures
listed inthese tables. Forexample, intable DS:6,please clarify whether thissubmission implies
that seed producers arebeing subsidized, orifseeds areprovided toagricultural producers as
aninput subsidy.
Again, weseekfurther clarification from theKyrgyz Republic over theitem "reschedule ofarrears"
that appears intable DS:9.
Dothese figures represent theamount ofrevenue foregone, ortheactual amount oftheloans
provided? Please explain whether these figures represent atotal write-off ofallloans, orwhether
thefiguresassumethattheloanswillberepaidwiththegovernmentsubsidizingprincipalorinterest
payments foraperiod oftime.
Answer:
I. Table DS:1
2. General Services
(a) Research, including general research, research inconnection with environmental programmes,
andresearch programmes relating toparticular productsWT/ACC/KGZ/13
Page 28
Scientific Research Institute ofLive Stock Farming: creation ofnewhigh-productive breeds,
types, lines ofagricultural animals anddevelopment ofeffective technologies oftheir raising;
improvement andrational useofpastures oftheKyrgyz Republic.
Scientific Research Veterinary Institute: development andimprovement ofmethods andmeans
ofprophylactics andtreatment ofmost wide-spread diseases ofanimals forthepurpose ofproviding
stable veterinary well-being oflive-stock farming intheKyrgyz Republic.
Scientific Research Institute ofSoilandAgricultural Chemistry: agricultural melioration service
provision ofagriculture byapplication ofmodern technologies; thetechnology ofobtaining anduse
oflocal fertilizers toimprove fecundity ofsoils andproductivity ofagricultural crops; examination
ofsoilanddevelopment ofdevices forimprovement offecundity.
(b) Pest anddisease control, including general andproduct-specific pest anddisease control
measures, such asearly-warning systems, quarantine anderadication
TheVeterinaryDepartment:controloverimplementationofveterinarymeasuresintheRepublic;
performance ofprophylactic measures forthepurpose ofprevention ofinfectious diseases ofanimals
intheRepublic, theRepublican veterinary laboratory.
State Inspectorate onQuarantine ofPlant: control forthepurpose ofidentification ofquarantine
objects (pests, weed).
TheDepartment ofChemical andPlant Protection: performance ofmeasures onprotection
ofplants anderadication ofpests, weeds anddiseases.
(c) Training services, including both general andspecial training
Agricultural special institutions, including theinstitute oftraining farmers, agricultural
entrepreneurs andmanagers.
(d) Extension ofadvisory services, including theprovision ofmeans totransfer information and
results
TheRepublican Scientific Agricultural Library.
(e) Inspectionservices,includinggeneralinspectionservicesandtheinspectionofparticularservices
forhealth, safety, grading orstandardization purposes
Subsidies aregranted totheState Seed Inspectorate, Central Asian laboratory ondetermination
ofquality ofveterinary medicines andcotton seed station forexamination ofseeds andveterinary
medicines forquality, safety andconformity with standards.
(f) Infrastructural services
Construction ofagricultural water pipes andrepair ofthewater supply network.WT/ACC/KGZ/13
Page 29
3. Creation ofState Reserves toProvide Food Security
Grains and flour were issued ashumanitarian aid from the Commission ofthe
European Communities.
4. Structural Adjustment Assistance Provided Through Investment Aids
Thementioned means aregranted forsupport ofreform ofstate agricultural enterprises into
private ones, inparticular:
- organization ofre-registration ofeconomic entities inAgriculture;
- completion ofthedenationalization ofstate agricultural enterprises;
- re-organization ofcollective farms;
- liquidation ofloss-making entities;
- reforming breeding andseeds farms;
- expenses connected with television, radio, press, publication ofbooklets andbrochures;
- organization andcreation ofcredit cooperatives andtheir associations;
- organization ofmethodological andpractical assistance topeasant farms increation ofservice
departments;
- mass publication ofpackages ofdocuments ofpeasant farms (forms, certificates foruseof
land plot);
- organization ofmodel farms ineach oblast.
II. Table DS:6
Support ofagricultural producers
Credits were granted directly toagricultural producers intheform ofgoods, inparticular,
intheform ofseeds ofagricultural crops. They were granted intheform ofinterest freecredit in
proportion tothesizeofthecultivated land persolicitation ofthemanagement offices ofoblasts and
rayons.
III. Table DS:9
Review ofterms ofloans
Thementioned figures present theamounts ofoverdue credits including interests.
IV. Table DS:4
Minimal calculation ofNon-Product-specific AMS
1994 1995 1996
Non-Product-specific AMS 6.2% 2.8% 3.1%
Share ofAMS inGross Product of
Agriculture6.4% 3.0% 3.3%WT/ACC/KGZ/13
Page 30
Agricultural Export Subsidies
Question 38:
Wereiterate ourdesire toseetheKyrgyz Republic bind itsexport subsidies foragricultural
products atzero. Uptothispoint theKyrgyz Republic hasonly signalled itsintention to"consider
theeffects" ofthispolicy. IstheKyrgyz Republic now prepared tocommit topermanently bind
itsagricultural export subsidies atzero?
Answer:
TheKyrgyz Republic commits tobind itsagricultural export subsidies atzero.
State Trading
Question 39:
Weappreciate thedetailed information thattheKyrgyz Republic hassubmitted onitsstate trading
enterprises inWT/ACC/KGZ/10/Add.1. Concerning thenotifications ofKyrgyzalco, thestate
alcohol board, andKyrgyztamekesi, theState tobacco board, could theKyrgyz Republic please
respond tothefollowing questions:
Can theKyrgyz Republic describe fully itsexcise taxsystem forimported alcohol andtobacco
products, including specific taxrates forimported versus domestically produced alcohol? Are
Kyrgyzalco orKyrgyztamekesi involved inanywaywith theadministration ofthese excise taxes?
Areeither Kyrgyzalco orKyrgyztamekesi involved inthedomestic sales and/or distribution of
international brands ofalcohol orcigarettes, either directly orindirectly, orareprivate companies
free tosellordistribute these brands onthedomestic market asthey wish without restriction?
Except forKyrgyzalco andKyrgyztamekesi, cantheKyrgyz Republic please confirm that state
trading does notexist foranyother agricultural orfood products?
Answer:
EXCISE TAX RATES
forAlcoholic andTobacco Products Produced and
Imported byLegal Entities andNatural Persons oftheKyrgyz Republic
produced, inUS$ ofthe
volume (litre, unit)imported inUS$ ofthe
volume (litre, unit)
Drinking ethyl spirits, refined ethyl
spirits, produced offood rawproduct
(except forthatsold tospecial users
within norms)US$1.4/l US$1.4/l
Vodka US$0.90/l US$0.90/l
Liqueur -vodka products US$0.90/l US$0.90/l
Beverages with alcohol, juice with
alcohol andbalsamUS$0.90/l US$0.90/l
Grape wine US$0.35/l -WT/ACC/KGZ/13
Page 31
produced, inUS$ ofthe
volume (litre, unit)imported inUS$ ofthe
volume (litre, unit)
Other wines US$0.29/l -
Wines - US$0.35/l
Cognac US$0.60/l US$0.80/l
Champaign wines US$0.40/l US$0.45/l
Packed beer US$0.08/l -
Unpacked beer US$0.05/l -
Beer - US$0.25/l
Wine products US$0.15/l US$0.20/l
Tobacco articles:
cigarettes with filter US$1.5/ 1000 units US$5/1000 units
cigarettes without filters US$0.75/1000 units US$2/1000 units
Kyrgyzalco orKyrgyztamekesi arenotinvolved inanywaywith theadministration ofexcise
taxes.
Kyrgyzalco andKyrgyztamekesi arenotinvolved inthedomestic sales and/or distribution of
international brands ofalcohol orcigarettes, either directly orindirectly.
Private companies arefreetosellanddistribute international brands ofalcohol andcigarettes
onthedomestic market asthey wish without restriction.
Except forKyrgyzalco andKyrgyztamekesi, theKyrgyz Republic confirms thatState-trading
does notexist foranyother agricultural orfood products.
V. TRADE-RELATED INTELLECTUAL PROPERTY REGIME
1. General
Weappreciate thesubmission totheWTO Secretariat ofthedraft provisions oftheCivil Code
applying tointellectual property (WT/ACC/KGZ/11). Wehave notyethadanopportunity to
reviewthisdraftlegislation,butwewillprovidecommentspriortothenextWorkingPartymeeting.
VI. TRADE-RELATED SERVICES REGIME
Weappreciate theefforts oftheKyrgyz Republic inWT/ACC/SPEC/KGZ/3 todescribe itsservices
regime andtheoffer inWT/ACC/SPEC/KGZ/5. Wehave responded bilaterally totheoffer and
look forward toreviewing arevised offer forcommitments inservices assoon aspracticable
reflecting theimprovements made asaresult ofbilateral discussions onthemargins ofthismeeting.
Therevised market access offer inservices submitted bytheKyrgyz Republic hasbeen circulated in
document WT/ACC/SPEC/KGZ/5/Rev.1.WT/ACC/KGZ/13
Page 32
VII. INSTITUTIONAL BASIS FOR TRADE AND ECONOMIC RELATIONS WITH THIRD
COUNTRIES
Question 40:
Please respond tothecomment onpage 34ofWT/ACC/KGZ/10 seeking Kyrgyz Republic 's
membership intheWTO Agreement onTrade inCivil Aircraft.
Answer:
TheKyrgyz Republic isstillintheprocess ofevaluating whether ornotitwilljointheWTO
Agreement onTrade inCivil Aircraft.
Question 41:
Please update reporting onthestatus under Kyrgyz Republic 'sfree trade agreements ofgoods
with export taxes, i.e., have these items outside thecoverage ofthefreetrade agreements? We
would appreciate clarification ofthestatus ofthegoods listed intheresponse toquestion 51of
WT/ACC/KGZ/10 under Kyrgyz Republic 'sfree trade arrangements and theportion oftotal
trade accounted forbythese products inarecent representative period. Asofnow, what products
arenotcovered bytheagreements?
Answer:
Goods subject toexport taxes arenotoutside thecoverage ofthefreetrade agreements. Products
which were listed asresponse toquestion 51ofWT/ACC/KGZ/10 arestilltheonlyproducts notcovered
byfreetrade between theKyrgyz Republic ononehand andKazakstan andRussia ontheother hand.
Percentage ofTotal Export toRussia andKazakstan PerGroup
Exports bygroups 1994 1995 1996
Copper andarticles thereof
Russia - 0.2 -
Kazakstan - 0.9 0.02
Waste andfragments ofcopper
Russia - - -
Kazakstan - 0.03 -
Aluminium andarticle thereof
Russia - 0.04 0.04
Kazakstan - 0.02 0.04
Waste andfragments ofaluminium
Russia - - 0.02
Kazakstan - - -
Lead andarticles thereof
Russia - - -WT/ACC/KGZ/13
Page 33
Exports bygroups 1994 1995 1996
Kazakstan 0.04 0.0002 0.04
Lead waste andfragments
Russia - - -
Kazakstan - 0.0002 0.04
Antimony andarticles thereof, incl. waste andfragments
Russia 5.2 4.3 3.5
Kazakstan 0.7 0.2 0.3
Mercury
Russia 0.1 0.04 0.1
Kazakstan 0.06 - 0.04
Gold
Russia - - 0.002
Kazakstan - - -
Thepercentages oftotal export accounted forbyallofthese products in1994, 1995, and1996
isprovided inthefollowing table.
1994 1995 1996
Russia 5.2 4.6 3.6
Kazakstan 0.8 1.2 0.4
Publication
Question 42:
Theresponse toQuestion 77ofWT/ACC/KGZ/9 indicates that "There isnolegal requirements
topublish alllegislation andadministrative acts onWTO related issues".
Itwould seem thattheKyrgyz Republic lacks alegislative basis fortheimplementation ofArticle X
oftheGATT 1994 andother publication requirements ofWTO Agreements, e.g., therequirement
thatstandards bepublished forprior review andcomment before finalization andimplementation.
Webelieve theKyrgyz Republic should make efforts toinstitute appropriate legislation onthese
points.
Answer:
TheKyrgyz Republic isintheprocess ofdrafting legislation toensure conformity withArticle X
oftheGATT 1994 andother publication requirements ofWTO Agreements. Draft legislation will
beprovided totheWTO Secretariat assoon asitisfinalized.WT/ACC/KGZ/13
Page 34
ATTACHMENT A
(Supplement toQuestion 20)
I. DETERMINATION OFCUSTOMS PROCESSING FEE
Method 1
(Employee costbased ontime spent andoverhead costs at50percent)
(Insom)
Description Severnaya Bishkek Republic
Average FTE cost(refer toTable 6)
Number ofdeclarations processed10,42
5,3947.06
5678.74
14,520
Total FTE cost
Allocable Overhead Costs (at50% oftotal
overhead cost(refer toTable 1)126,904.80
2,461,400.00
Total Processing Costs 2,588,304.80
Total costs perdeclaration 178.26
Method 2
(Total costs allocated at50percent)
(Insom)
Description FY1996
Employee cost(Table 1)
Overhead costs (Table 1)11,143,700
4,922,800
Total Costs 16,066,500
Import processing costs at50% ofTotal Costs
Number ofdeclarations processed8,033,250
14,520
Total costs perdeclaration 553.25
Minimum andMaximum Import Processing Fee
Import Processing Fee Insom InUS$
Minimum
From Method 1
Rounded-off tothenearest 10178.26
180 10.59
Maximum
From Method 2
Rounded-off tothenearest 10553.25
550 32.35
Current Rate 0.15%WT/ACC/KGZ/13
Page 35
TABLE 1
Annual Budget ofCustoms -Kyrgyz Republic FY1996
Description Insom
Salary 8,066,100
Social Fund 3,077,600
Employee cost 11,143,700
Commercial expenses -incountry 135,200
Commercial expenses -abroad 100,000
Equipment andstock purchase 1,000,000
Water, power, gas, heating 2,316,100
Vehicle maintenance 971,500
Other purchases 400,000
Other (overhead) costs 4,922,800
Total costs 16,066,500
TABLE 2
Expense/Revenue Ratio
(Insom)
Description FY1996 FY1997
Customs revenue (excluding enforcement) 448,929,600 830,000,000
Customs expenses 16,066,500 19,653,400
Expense/Revenue ratio 0.0357884622 0.0236787952
Expense/Revenue ratio in% 3.58% 2.37%
II. DETERMINATION OFPHYTOSANITARY CERTIFICATE FEE
Method 1
(Minimum Cost)
(Insom)
Description 1996 1997
(projected)
Number ofcertificates issued 14,202 9,011
Employee cost
Number ofemployees 87 87
Yearly average peremployee costs (Table 2) 4,889 11,486
Average total employee costs 425,343 999,282
Average employee costpercertificate 30 111
Average forlasttwoyears 70WT/ACC/KGZ/13
Page 36
Method 2
(Maximum cost)
(Insom)
Description 1996 1997
(projected)
1. Total employee cost(Table 1) 425,343 999,282
2. Total overhead costs (Table 1) 968,300 2,143,600
3. Total costs (1+2) 1,393,643 3,142,882
Number ofcertificates issued 14,202 9,011
Total costs percertificate 98 349
Average forlasttwoyears 223
Minimum andMaximum Phytosanitary Certificate Fees
Certificate ofPhytosanitary Fee Insom InUS$
Minimum
From Method 1 70 4.14
Maximum
From Method 2 223 13.15
Current FeeofCertificate
Minimum 36 2.12
Maximum 265 15.59
TABLE 1
Annual Budget oftheState Inspectorate onPlant Quarantine
(Insom)
Description 1996 1997
(projected)
Salary 425,300 999,300
Total employee cost 425,300 999,300
Equipment/Furniture purchases 349,100 400,000
Office expense 27,000 150,000
Other overhead costs 592,200 1,593,600
Total allocable overhead costs 968,300 2,143,600
Total costs 1,393,600 3,142,900WT/ACC/KGZ/13
Page 37
TABLE 2
Employee cost
(Insom)
Salary Data 1996 1997
(projected)
Total salary 425,300 999,300
Number ofemployees 87 87
Average annual salary peremployee 4,888.51 11,486.21
Average monthly salary peremployee 407.38 957.18
III. DETERMINATION OFVETERINARY CERTIFICATE FEE
Method 1
(Minimum cost)
(Insom)
Description 1995 1996 1997
(projected)
Number ofcertificates issued 458 386 600
Employee cost
Number ofemployees inveterinary certification 30 30 30
Yearly average peremployee costs 3,839 3,871 3,984
Average total employee costs 115,170 116,130 119,520
Average employee costpercertificate 251 301 199
Average forthree years 251
Method 2
(Maximum cost)
(Insom)
Description 1995 1996 1997
(projected)
1. Total employee cost 115,170 116,130 119,520
2. Total overhead costs 2,462,500 3,408,800 2,353,000
3. Allocable overhead costs at50%** 1,231,250 1,704,400 1,176,500
4. Total costs (1+3) 1,346,420 1,820,530 1,296,020
Number ofcertificates issued 458 386 600
Total costs percertificate 2,940 4,716 2,160
Average forthree years 3,272
** Overhead costs areallocated at50% oftotal employees areengaged inissuing veterinary certificates.WT/ACC/KGZ/13
Page 38
Minimum andMaximum Veterinary Certificate Fees
Certificate ofVeterinary Fee Insom InUS$
Minimum
From Method 1 250 14.74
Maximum
From Method 2 3,272 192.47
Current FeeofCertificate
Minimum 30 1.76
Maximum 500 29.41
Average 100 5.88
TABLE 1
Annual Budget oftheDepartment onOrganization ofVeterinary Business
(Insom)
Description 1995 1996 1997
(projected)
Salary 238,000 240,000 247,000
Total employee cost 238,000 240,000 247,000
Equipment/Furniture purchases 95,000 110,000 120,000
Other overhead costs 2,367,500 3,298,800 2,233,000
Total overhead costs 2,462,500 3,408,800 2,353,000
Total costs 2,700,500 3,648,800 2,600,000
TABLE 2
Employee cost
(Insom)
Salary Data 1995 1996 1997
(projected)
Total salary 238,000 240,000 247,000
Number ofemployees 62 62 62
Average annual salary peremployee 3,838.71 3,870.97 3,983.87
Average monthly salary peremployee 319.89 322.58 331.99WT/ACC/KGZ/13
Page 39
IV. DETERMINATION OFIMPORT/EXPORT LICENCE FEE
Method 1
(Minimum cost)
(Insom)
Description 1995 1996 1997
(projected)
Number ofcertificates issued 170 332 708
1. Total employee cost 24,786 38,610 71,383
2. Allocable overhead costs 63,388 75,872 38,147
3. Total costs (1+2) 88,174 114,482 109,530
Total costs percertificate 519 345 155
Average forthree years 340
Method 2
(Maximum cost)
(Insom)
Description 1995 1996 1997
(projected)
Number ofcertificates issued 170 332 708
1. Total employee cost 24,786 38,610 71,383
2. Allocable overhead costs 237,705 284,520 132,540
3. Total costs (1+2) 262,491 323,130 203,923
Total costs percertificate 1,544 973 288
Average forthree years 935
Minimum andMaximum Certificate Fee
Certificate Fee Insom InUS$
Minimum
From Method 1 340
Rounded-off tonearest 10 340 20.00
Maximum
From Method 2 935
Rounded-off tonearest 10 940 55.29
Current FeeofCertificate 900 52.94WT/ACC/KGZ/13
Page 40
TABLE 1
Annual Budget oftheMinistry ofForeign Trade andIndustry
(In'000 som)
Description 1995 1996 1997
(projected)
Total employees 150 150 138
Employee salary 0.00 999.30 2,350.00
Overhead expenses 1,584.70 1,896.80 883.60
Total expenses 1,584.70 2,896.10 3,233.60
TABLE 2
Employee cost-Department ofLicensing
(Insom)
Description 1995 1996 1997
(projected)
Number ofemployees 6 6 6
Total annual salary 24,786 38,610 71,383
Average annual employee cost 4,131 6,435 11,897
TABLE 3
Allocable Overhead (Method 1)
(Insom)
Description 1995 1996 1997
(projected)
Total employees 150 150 138
Number ofemployees inLicensing Department 6 6 6
%ofemployees inlicensing 4.00% 4.00% 4.35%
Total overhead expenses 1,584,700 1,896,800 883,600
Allocable overhead attheabove rate 63,388 75,872 38,417
TABLE 4
Allocable Overhead (Method 2)
(Insom)
Description 1995 1996 1997
(projected)
Total overhead expenses 1,584,700 1,896,800 883,600
Approximate %ofresources consumed in
issuing licenses15.00% 15.00% 15.00%
allocable overhead attheabove rate 237,705 284,520 132,540WT/ACC/KGZ/13
Page 41
ATTACHMENT B
The following additional legal texts areavailable intheSecretariat (Accessions Division,
Room 1126) forconsultation.
1. Draft Law onAnti-Dumping
2. Draft Law onCountervailing
3. Draft Law onSafeguards
4. Draft Civil Code (Section onIntellectual Property)
5. Criminal Code (Section onIntellectual Property)
6. Draft Law onCopyright andNeighbouring Rights
7. Draft Law onTrademarks, Servicemarks andAppellation ofPlaces ofOrigin
8. Draft Patent Law
9. Draft Law onSoftware andDatabase
10. Draft Law onIntegrated Circuit Topography
11. Draft Law OnSelection Achievements
12. Draft Law onCommercial Secrets
13. Law OnForeign Investment, 24September, 1997
14. Law OnBanks andBanking Activities, 29,July 1997
15. Law OntheNational Bank, 29July 1997
16. Law OnCollateral, 27June, 1997
17. Law OnSubsurface Resources, 2July 1997
18. Law OnState Regulation ofForeign Economic Activities, 2July 1997
19. Amendments totheCustoms Tariff Law, 30July 1997