RESTRICTEDWORLD TRADE
ORGANIZATIONWT/ACC/EST/28
9 April 1999
(99-1412)
Working Party on the
Accession of Estonia
REPORT OF THE WORKING PARTY ON
THE ACCESSION OF ESTONIA
TO THE WORLD TRADE ORGANIZATION1
Introduction
1. In March 1994, the Government of Estonia requested accession to the General Agreement on
Tariffs and Trade (GATT 1947).  At its meeting on 23-24 March 1994, the GATT Council of
Representatives established a Working Party to examine the application of the Government of Estonia
to accede to the General Agreement under Article XXXIII, and to submit to the Councilrecommendations which may include a draft Protocol of Accession.  Membership of the Working
Party was open to all contracting parties indicating the wish to serve on it.  In pursuance of the
Ministerial Decision of 14 April 1994 on Acceptance of and Accession to the Marrakesh Agreement
Establishing the World Trade Organization (WTO) and to the decision of 31 May 1994 of the
Preparatory Committee for the WTO, the Working Party examined the application of Estonia formembership in the WTO and agreed to pursue the market access negotiations for goods, including an
agricultural country schedule, and for services.  The WTO Agreement entered into force on
1 January 1995.  In pursuance of the decision adopted by the WTO General Council on
31 January 1995, the GATT 1947 Accession Working Party was transformed into a WTO Accession
Working Party.  The terms of reference and the membership of the Working Party are reproduced in
document WT/ACC/EST/7/Rev.1.
2. The Working Party met on 25 November 1994;  6-7 June and 14 November 1995;  28 March
and 18 September 1996;  11 February 1997;  and 24 March and 7 April 1999 under the Chairmanship
of H.E. Mr. D. Kenyon (Australia). 
Documentation
3. The Working Party had before it, to serve as a basis for its discussions, a Memorandum on the
Foreign Trade Regime of Estonia (L/7423) and the questions submitted by Members on the foreigntrade regime of Estonia, together with the replies thereto, and other information provided by the
Estonian authorities (L/7529 and Adde nda 1 and 2, WT/ACC/EST/2, WT/ACC/EST/4,
WT/ACC/EST/9 and Corrigendum 1, WT/ACC/EST/11, WT/ACC/EST/12 and
WT/ACC/SPEC/EST/3).  The Government of Estonia made available to the Working Party the
following documentation:
- Law of the Central Bank of the Republic of Estonia of 31 May 1993;
- Law on Amending the Law of the Central Bank of the Republic of Estonia of 20 April 1994;
- The Law of the Republic of Estonia on Foreign Investments of 11 September 1991;
- Restrictions on Transfer of Immovable Property Ownership to Aliens, Foreign States and 
Legal Persons Act of 29 May 1996;
- Law on Bankruptcy of the Republic of Estonia of 10 June 1992;
- Statutes of the Estonian Foreign Investment Agency (9 May 1994);
                                                     
1 The Working Party adopted the Report on an ad referendum  basis.WT/ACC/EST/28
Page 2
- Law on Privatization of 7 July 1993;
- Privatization in Estonia (summary);
- Competition Act of 11 March 1998;
- Law on Foreign Relations of 16 November 1993;
- Law on the State Border of 30 June 1994;- Public Service Act of 25 January 1995;
- Law on State Budget (amended version of 20 April 1994);
- Law on Municipal and Town Budget of 28 June 1993;
- Law on Correlation between Municipal and To wn Budgets and the State Budget (amended 
version of 2 February 1994);
- Commercial Code, consolidated on 12 June 1996;
- The Customs Act of 17 December 1997, consolidated on 13 May 1998;- The Customs Tariff Act of 14 October 1997;
- Law on Taxation of 29 December 1993;
- Law on Amending the Law on Taxation of 30 March 1994;
- Income Tax Law of 21 December 1993;
- Law on Land Tax of 12 May 1993;- Law on Local Taxes of 10 October 1994;
- Law on Motor Vehicle Excise Tax of 8 February 1995;
- Law on Alcohol Excise Tax (with 1994 amendments);
- Law on Amending the Law on Alcohol Excise Tax;
- Alcohol Excise Duty Act of 8 November 1995, consolidated on 15 April 1997;- Law on Tobacco Excise Tax (new version of 13 July 1994);
- Tobacco Excise Duty Act of 29 June 1994, consolidated on 22 October 1997;
- Law on Revenue Stamps of 28 March 1994;
- Packaging Excise Duty Act of 19 December 1996;
- Law on Value Added Tax (amended version of 30 June 1994);- The Food Law of 9 February 1995;
- Resolution No. 249 of 5 November 1998 – Approv al of the Order for Issuing State Licence
for Importing Foodstuffs into Estonia;
- Law on Customs Valuation of 8 February 1995;
- Draft Act Amending the Customs Valuation Act;
- Rules of Origin in Free-Trade Agreements with the European Communities, the Ukraine and
the Trilateral Free-Trade Agreement with Latvia and Lithuania;
- Rules of Origin in Free-Trade Agreements with EFTA countries (Norway and Switzerland);
- Law on Export and Transit of Strategic Goods of 21 April 1994;
- Memorandum on the Export Control System in Estonia;
- Information on the Estonian Innovation Foundation;
- Medicinal Products Act, consolidated on 15 October 1996;- Draft Law on Standardization;
- Draft Technical Regulations and Standards Act of the Republic of Estonia;
- Information on standardization in Estonia (July 1998);
- Harmonization of the TBT Notification Requirements in Estonia;
- Estonian legislation on sanitary and phytosanitary measures (October 1998);- Animal Protection Act of 17 December 1992, consolidated on 22 February 1998;
- Farm Animal Breeding Act of 25 June 1995, consolidated on 9 December 1997;
- Plant Protection Act No. 332 of 1 January 1999;
- Legislation and draft legislation in the field of veterinary measures (April 1997);
- Veterinary conditions for importing goods into Estonia (April 1997);- Regulations for the import of plants and part of plants to Estonia (April 1997);
- Law of the Republic of Estonia on Veterinary Services of 1 January 1993;
- Draft Veterinary Services Act;
- The Order of Registration for Veterinary Medicines of 15 September 1994;
- Law on Public Procurement of 1 January 1996;WT/ACC/EST/28
Page 3
- Public Procurement Amendment Act of 1 January 1997;
- Grains Act of 8 June 1994, as amended;
- A comparison of the old and new version of the Food Act, concerning food control in Estonia;
- Fertilizers Act of 1 July 1998;
- Organic Agriculture Act of 17 July 1997;- Legislation on the Agreement on Trade-Related Aspects of Intellectual Property Rights;
- Copyright Law of 23 November 1992;
- Trade Marks Act of 27 August 1992, consolidated on 17 December 1997;
- Packaging Act of 3 May 1995, consolidated on 30 June 1997;
- Patent Law of 30 March 1994;
- Industrial Design Protection Act of 18 November 1997;
- Utility Model Law of 30 March 1994;- Plant Variety Rights Act of 1 July 1998;
- Copyright Act, Code of Administrative Offe nces, Criminal Code, Consumer Protection Act
and Customs Act Amendment Act;
- Explanatory Note to the Act Amending the Copy right Act, Code of Administrative Offences,
Criminal Code, Consumer Protection Act and Customs Act;
- Law on Securities Market of 14 June 1993;
- Insurance Law of 18 November 1992;
- Law of Property Act, consolidated on 8 October 1996;
- Order of Declaring, Determining and Adjusting the Customs Value of Goods, Regulation 
No. 4 of 11 January 1996;  and
- Economic bulletins.
Introductory Statements
4. The representative of Estonia noted that Estonia had been an observer to the GATT 1947
since June 1992 and had accordingly witnessed the successful conclusion of the Uruguay Round and
looked forward to its implementation.  Estonia had adopted new laws and regulations forming a solidlegislative foundation.  Moreover, Estonia's economy, which encouraged competition and an
entrepreneurial spirit through a liberal trade regime for agricultural and industrial products and
openness regarding foreign investment and foreign exchange, was expanding steadily.  Estonia's free
and open market had been underpinned by bilaterally  binding and mutually beneficial market opening
commitments in trade agreements covering more than  two thirds of Estonia's trade.  Bilateral free
trade agreements had been concluded with Latvia, Lithuania, EFTA States, Ukraine, Czech Republic,
Slovak Republic, the European Communities, Faroe Islands, Slovenia, Turkey, Poland and Hungary,and Estonia had trade agreements based on the GATT 1947 principles with several other countries.
Having followed the code of conduct laid down by  GATT 1947 principles, full membership in the
GATT 1947 and upon its entry into force in the Marrakesh Agreement Establishing the World Trade
Organization - was the one important missing aspect in Estonia's trade policy.  Estonia intended to
join the multilateral trading system embodied in the WTO Agreement as a developed country, fully
aware of, and ready to assume, all the obligations and responsibilities this entailed.  The
representative of Estonia looked forward to the beginning of an active negotiating process which
should be concluded by Estonia's accession to the WTO in the very near future.
5. Members of the Working Party welcomed Estonia's initial application for accession to the
General Agreement and, upon conclusion of the Uruguay Round, to the WTO.  The rise in exportsand foreign direct investment were indicative of the relative success of Estonia's liberal economic
policies.  Membership in the WTO would offer Estonia the opportunity to consolidate its small, open
economy within a multilateral framework and to develop and increase trade exchanges with WTO
Members worldwide.  The liberal, open market principles currently being implemented by Estonia
would also facilitate its assumption of obligatio ns and commitments arising from the Uruguay Round.
Several members accordingly expressed the expectation that the establishment of market accessWT/ACC/EST/28
Page 4
conditions for goods and services would proceed in an expeditious manner and looked forward to the
successful and timely conclusion of the tasks of the Working Party.
6. The Working Party reviewed the economic policies and foreign trade regime of Estonia and
the possible terms of a draft Protocol of Accession to the WTO.  The views expressed in the course of
the deliberations of the Working Party are summarized below in paragraphs 7-140.
ECONOMIC POLICIES
Monetary and Fiscal Policy
7. Questions by some members of the Working Party focused on the tax components of
government revenue and the scope for raising revenue from taxes on trade in Estonia in the light of
important free trade agreements which covered a large share of Estonia's foreign trade.
8. In response, the representative of Estonia recalled that as a way to improve the
competitiveness of domestic industries at the present time Estonia did not apply import or exportduties.  The main sources of government revenue in 1997 were the Value Added Tax (47.9 per cent),
income taxes (25.4 per cent), and excise taxes (17.2 per cent).
Foreign Exchange and Payments
9. Some members of the Working Party requested up-to-date information on Estonia's foreign
exchange regime, i.e. the determination of the exch ange rate, convertibility, availability of foreign
exchange for trade and payments purposes, and the retention of foreign currency.
10. The representative of Estonia confirmed that Estonia, as a member of the International
Monetary Fund, followed internationally accepted monetary rules. Since June 1992, the
Estonian Kroon had been pegged against the Deutsche mark at the official rate of 8 kroon to 1 DM,
with a technical fluctuation limit of 3 per cent.  The fixed exchange rate was enshrined in the Law on
the Security of the Estonian Kroon;  a devaluation required approval by Parliament.  He also said that
the Bank of Estonia guaranteed free exchange within Estonia of the Kroon at the official rate
according to current needs of customers for convertible currencies.  Non-convertible currencies were
obtained at commercial banks.  The last restrictions  on current account transactions had been lifted in
March 1994, when Estonia accepted the obligations under Article VIII of the Articles of Agreementof the International Monetary Fund.  Capital account transactions were unrestricted, but exports of
cash and securities were subject to a customs declaration.
Investment Regime
11. Some members of the Working Party sought information on Estonia's strategies in attracting
foreign investment and in the application of any restrictions or conditions attached to foreign
investment and to land ownership.  The representative of Estonia replied that no specific promotion
programmes were envisaged;  foreign investments were encouraged through an open, non-restrictiveregime.  The Tallinn Stock Exchange had been established on 31 May 1996.  The Government had
established a Foreign Investment Agency in 1994, providing various services to foreign investors.
The Agency had been restructured in 1997, and was now operating under the Estonian Trade and
Investment Board.  Estonia had concluded bilateral agreements on investment promotion and
protection with the following countries: Austria, Belgo-Luxembourg Economic Union, China, CzechRepublic, Denmark, Finland, France, Germany, Greece, Israel, Italy, Latvia, Lithuania, Netherlands,
Norway, Poland, Spain, Sweden, Switzerland, Turkey, Ukraine, United Kingdom, and the United
States.  He added that the procedures for registration of companies in Estonia distinguished between
domestic and foreign investment in only six areas namely, mining;  power engineering, gas and water
supply;  administration of waterways, ports, dams and similar structures;  railways and air transport;WT/ACC/EST/28
Page 5
telecommunication and communication network;  and retail trade in medicines;  where foreign
investors would need a "Foreign Investment Licence" from the Ministry of Finance while a "Licence
of Activity" was required for domestic investors.  The Foreign Investment Licence and the Licence of
Activity carried the same rights, the procedural difference being the issuing authority.  The criteria for
determining whether or not to grant these two types of  licence were identical.  He confirmed that the
differentiation between foreign and domestic  investment in the communications and
telecommunications sector was of technical nature and did not affect negatively the market access and
national treatment commitments made in Estonia's GATS schedule.
12. The representative of Estonia added that when State enterprises were sold against
privatization vouchers majority stakes were offered to "core" investors, i.e. majority shareholders
(domestic or foreign), who were selected by an open bid.  In purchasing State-owned enterprises
investors (domestic or foreign) might undertake sp ecific commitments with regard to the amount of
capital to be invested and minimum workforce ("performance guarantee").  The Estonian Privatization
Agency checked the compliance with agreed conditions.  The performance guarantee did not extend
to local content or export requirements.
13. Regarding purchase of land, the representative of Estonia said that foreign commercial
undertakings would need permission from local author ities, and permits would only be granted when
the branch of a foreign commercial undertaking had been entered in Estonia's Commercial Register.
Non-residents were not allowed to purchase land in border areas and on Estonia's islands, except on
the four largest islands (Saaremaa, Hiiumaa, Vormsi  and Muhu).  In these areas the purchase of land
required special permission of the Government.  Non-residents would be permitted to buy land
provided the purchase was not in conflict with the interests of the State, local governments or national
security.
14. Concerning taxation of foreign investment the representative of Estonia said that the Income
Tax Law allowed losses to be carried forward up to five years.  The Income Tax Law applied to
income earned in and outside Estonia by residents,  and income derived from Estonian sources by non-
residents.  Revenue could be repatriated freely.
15. The representative of Estonia confirmed that Estonia applied national treatment with respect
to direct taxation and Estonia would continue to apply the national treatment principle in the case of
amendments to the tax regime in the future.  He further confirmed that Estonia did not use national
taxation for export promotion or performance.  The Working Party took note of this commitment.
State Ownership and Privatization
16. Some members of the Working Party requested details concerning progress in Estonia's
privatization programme and plans to retain State ownership in enterprises or sectors.  Furtherquestions addressed relations between the State and company management, the application of
competition legislation to State-owned enterprises, bankruptcy or enterprise dissolution provisions in
Estonian legislation and general or exclusive funds available for State-owned enterprises.  A member
requested a detailed report on firms remaining in Government hands, the nature of goods they
consumed, exported or distributed; and a report on plans, as appropriate, to complete the privatizationprocess.  To ensure full transparency, Estonia should keep WTO Members informed about progress in
privatization, and provide periodic reports on developments in privatization and economic reform
issues as relevant to its obligations under the WTO.
17. The representative of Estonia said that an enterprise was considered privatized when the
majority share holding was in private ownership (i.e. not including assets held by the Estonian
Privatization Agency).  According to this definition all agricultural enterprises had been privatized by
January 1995, and more than 90 per cent of all industrial enterprises by August 1996.  Companies had
been sold in 16 tender rounds with successful bidd ers offering guarantees with regard to investmentWT/ACC/EST/28
Page 6
and employment.  The public offering of shares had begun in mid-1994;  in a public offer the majority
stake was sold to a local or foreign "core" investor.  The Estonian Privatization Agency became the
temporary owner of the shares in the interim period needed for selection of "core" investors or sale of
minority stakes.
18. The representative of Estonia provided information on progress in privatization of State
enterprises, summarized in Table 1.  Privatization wa s entering its final stage, involving privatization
of major infrastructure services such as communications, transportation and energy supply.  These
enterprises would be privatized in accordance with a program established through Government Order
No. 155-k of 20 February 1996. The Government had confirmed a final list of companies to be
privatized.  In all, 18 enterprises were sold in 1997.  However, the main task in 1997 was to prepare
the privatization of Eesti Energia , Eesti Põlevkivi , the operational parts of Estonian Railways and the
privatization of land.  Eesti Energia  and Eesti Põlevkivi  were complex privatization projects which
were unlikely to be completed before 2000.  Estonia also intended to privatize the Port of Tallinn and
Estonian Telecom.  Estonia provided a summary of privatization in Estonia (1993-1998), circulated in
document WT/ACC/EST/25.  According to the most recent data available (1998, third Quarter),
Estonia had 160 state enterprises employing 37,954 persons.  The Estonian Privatization Agency
(EPA) became the holder of the shares of a firm upon th e inclusion of the firm in the list of companies
to be privatized.  The EPA did not hold shares in infrastructure companies.  The Privatization Agency
kept the shares until privatization contracts had been signed;  the time period for this varied case-by-
case, on average lasting from one to six months.  At present, the EPA held shares in 4 companies
(31.9 per cent of the shares of Eesti Buss , 35 per cent of Meie Meel , 30.4 per cent of Valga Autoveod ,
and 100 per cent of Kunda Tehased ) to the total value of approximately EEK 1 million.  According to
the privatization program, the companies to be privatized in 1999 were Liviko , Narva Elektrivõrk ,
Edelaraudtee , Eesti Raudtee , Moe Piiritustehas , Eesti Gaas  (State share 11.38 per cent), Tarmeko
(State share 33.4 per cent), and Eesti Merelaevandus  (State share 30 per cent).  The output (net sales)
of State-owned firms in per cent of GDP had declin ed from nearly 60 per cent of GDP in 1994 to just
over 20 per cent in 1997.  Further details are provided in Table 1.  During 1993-1998, a total of 1,857enterprises, structural units, and objects had been certified for privatization, and 39 enterprises had
been liquidated.  As of 1 January 1999, 6 firms remained to be privatized.WT/ACC/EST/28
Page 7
Table 1:  Information on Progress in Privatization of State Enterprises
(a) Data on enterprises sold and revenue raised
Year 1993 1994 1995 1996 1997 1998
State Enterprises
Total no. at year end 1,116 805 496 303 206 160
Privatized during the year 306 342 278 143 88 32
Of which:
Services/Small Business 21 23 75 36 18 6
Manufacturing 59 116 61 51 24 5
C o n s t r u c t i o n 3 31 56 82 11 4 0
Agricultural/Fisheries 167 96 24 8 11 3
O t h e r 2 69 25 02 72 11 8
Sold through:
privatization contracts 54 215 142 43 17 13
open bids 252 126 120 84 64 19
public sales of shares 0 1 16 16 6 0
Revenue raised from: (EEK million)
privatization contracts 353.2 1,330.4 919.1 474.5 1,295.4 318.1
liabilities accepted by the
buyers195.6 700.2 617.9 230,3 416.3 8.2
investment guarantees 236.8 858.5 1,002.9 453.6 1,714.9 281.1
total obligations accepted
by new owners922.0 3,272.7 2,799.1 1,177.5 0 0
open bids 122.8 68.2 79.8 148,7 160.6 287.4
public sale of shares 0 99.9 604.5 662.1 944.5 0
Privatization contracts:
number of jobs under
employment guarantees9,099 25,573 17,279 1,274 2,929 72WT/ACC/EST/28
Page 8
(b) Economic Indicators of Enterprises in 1997
Economic sector Total net sales
(EEK million)Net sales of
State
enterprises
(EEK
million)Net sales of
State
enterprises in
per cent of
total net salesTotal
exports
(EEK
million)Exports of
State
enterprises
(EEK million)Exports of
State
enterprises in
per cent of
total exportsNet sales of
State
enterprises in
per cent of
GDP
Agriculture, hunting and forestry 5,021.375 43.547 0.02 1,304.891 0.118 0.0003 0.07
Construction 12,805.869 34.948 0.02 960.200 11.066 0.003 0.05
Education, health and social work,
and other community, social and
personal service activities2,957.871 389.630 0.22 160.065 7.157 0.02
Electricity, steam, gas and water
supply7,765.850 3,764.637 2.08 419.692 398.774 0.97 5.78
Financial intermediates 1,616.040 -- -- 54.070 -- -- --
Fishing 783.755 -- -- 264.773 -- -- --
Hotels and restaurants 2,091.068 69.316 0.04 162.557 1.752 0.004 0.1
Manufacturing 40,420.902 840.759 0.46 17,256.623 92.476 0.22 1.29
Mining 2,521.490 2,181.817 1.21 145.056 0.112 0.0003 3.35
Real estate, renting and business
activities8,622.751 525.070 0.29 586.366 6.726 0.02 0.8
Transport, storage and
communication20,583.161 4,780.199 2.65 12,305.940 1,537.964 3.74 7.34
Wholesale and retail trade; repair of
motor vehicles, motorcycles and
personal and household goods75,428.046 859.573 0.47 7,494.341 423.975 1.03 1.32
Total 180,618.178 13,489.496 7.46 41,114.574 2,480.120 6.03 20.73WT/ACC/EST/28
Page 9
(c) Economic Indicators of Enterprises 1994-1997
1994 1995 1996 1997
Total number of enterprises 28,113 23,858 24,609 27,627
Number of state enterprises 805 496 303 206
Percentage of State enterprises in
total number of enterprises2.86 2.07 1.23 0.74
Total output of enterprises
(net sales in EEK million)76,443.030 114,124.372 135,932.342 180,618.178
Output of state enterprises
(net sales in EEK million)17,527.179 16,805.778 14,233.674 13,489.496
Output of State enterprises in per
cent of total output (net sales)22.92 14.72 10.47 7.46
GDP in current prices (EEK million) 29,644.700 40,705.100 52,445.900 65,079.900
Output (net sales) of State enterprises
in per cent of GDP59.1 41.2 27.1 20.7
19. The representative of Estonia said that some privatization tenders had only been published in
Estonia, but foreign investment had only been restricted in the case of enterprises processing
agricultural commodities or offering services to farmers.  These companies were now owned by
farmers' co-operative societies.
20. In response to questions concerning the appointment and dismissal of the management of
State-owned enterprises, the representative of Estonia said that both the Minister of Finance and the
Minister in charge of the Ministry managing the State-owned shares of a company had the right to
appoint the members (State representatives) of th e administrative council or board of a State-owned
enterprise or joint stock company.  The management was appointed by the board according to thecompany's by-law.  The administrative council or board could dismiss the general director of the
enterprise;  council or board members were released by the Government or the appointing Ministry.
The provisions of the Law on Competition, including its sanctions, applied equally to private and
State-owned enterprises.  Since 1 September 1995, the Civil Code and the Commercial Code
contained procedures for the liquidation of enterprises.  The representative of Estonia confirmed thatState-owned enterprises acted on a purely commercial basis and were required to make their
purchases and sales solely in accordance with commercial considerations, and the purchases and sales
of State firms, either for their own use or for use in the production process, were not considered
government procurement.  The representative of Estonia further confirmed that their directors and
administrative council or board were not government employees, even though they could bedismissed or released by the Government or the appointing Ministry.  The State-owned enterprises
could not be considered to be in State trading activities because they did not enjoy any exclusive or
special privileges and were not subject to any control by the Government, nor to Government
directives in relation to their operations in the sense of Article XVII of GATT 1994 (see also
paragraph 102 in the section "State-trading").  Their operations were not funded by the State budget,and the Government had no right to intervene in the daily operations of these enterprises.
State-owned and private enterprises had equal access to Government funds, i.e. the Export Credit
Fund, the Fund of Credit to Agriculture and Rural Life, the Fund of Credit to Small Enterprises and
the Innovation Fund.
21. The representative of Estonia confirmed the readiness of Estonia to ensure the transparency of
its ongoing privatization programme and to keep WTO Members informed of its progress in the
reform of its transforming economic and trade regime.  He stated that his Government would provideWT/ACC/EST/28
Page 10
annual reports to WTO Members on developments in its programme of privatization as long as the
privatization programme would be in existence along the lines of that provided to the Working Party.
He also stated that his Government would provide annual reports on other issues related to its
economic reforms as relevant to its obligations under the WTO until 31 December 2003. The
Working Party took note of these commitments.
Pricing Policies
22. Some members of the Working Party requested information on the process of price
liberalization in Estonia and the extent of any remaining controls on prices for goods and services.
Estonia was requested to provide a description of existing price controls;  list the affected products by
HS tariff line with reference to the legal provisions under which controls were applied;  provisions, if
any, for border charges that would increase import prices;  and the conditions under which the
authority to control prices was to be exercised.
23. The representative of Estonia confirmed that prices of all goods and services were determined
freely by market forces except for oil-shale and electricity.  The prices set for these items, valid as of
18 November 1997 for electricity and as of 1 May 1997 for oil shale, are reproduced in the Annex
(Tables 2 and 3).  He added that price controls on oil-shale and electricity were subject to gradual
deregulation programs;  prices would approach world market levels with due regard to the balancebetween the required return on the invested capital and the interests of consumers.  He also noted that
the present producers of energy, heating and oil-shale were not monopolies since there was no
prohibition for anybody to start similar operations in Estonia or offer a competitive solution for the
entire Estonian energy system including price reform.  The legal basis for the price controls were the
Price Law of 1989 and the Decree of the Minist ry of Economic Affairs No. 7 of 15 May 1996.
Heating and local transport charges were regulated to some limited extent at the level of
municipalities.  The representative of Estonia confirmed that price controls on oil-shale and electricity
were applied only to final products, not to the imports of Eesti Energia  and Eesti Põlevkivi .
24. The representative of Estonia said that Estonia could not foresee any further conditions for the
application of any price controls, including those for imports, except for those in place for electricityand oil-shale.  These incumbent price controls covered only domestic transactions via the facilities of
Eesti Energia  and Eesti Põlevkivi .  The representative of Estonia confirmed that prices for goods and
services in every sector of Estonia were determined freely by market forces with the exception of
those listed in Tables 2 and 3 attached to this report.
25. The representative of Estonia confirmed that prices for goods and services other than for oil-
shale and electricity would not be subject to State control.  He confirmed that Estonia would apply
such controls, from the date of accession without recourse to a transition period, in a WTO-consistentfashion, and would take account of the interests of exporting WTO Members as provided for in
Article III.9 of the GATT 1994.  Estonia would publish any list of goods and services subject to State
price controls in the Official Journal " Riigi Teataja"  (State Gazette), including any changes regarding
existing price controls on oil-shale and electricity.  The Working Party took note of these
commitments.
Competition Policy
26. Some members of the Working Party requested a detailed description of Estonia's competition
policy, including the provisions in the Law on Competition which prohibits unfair trade practices and
the authority of the Competition Board to permit agreements restricting competition.WT/ACC/EST/28
Page 11
27. In response, the representative of Estonia said that a new Competition Act had entered into
force on 1 October 1998.    The purpose of the Act was to safeguard free competition in the extraction
of natural resources, manufacture of goods, provision of services, sale and purchase of services
products, and to prevent and eliminate the restriction of competition in other economic activities
based on the interests of free enterprise.  The Act could also be applied against anti-competitive
practices taking place outside Estonia insofar as these practices  resulted in restrictions on competition
within the territory of Estonia.  The Act prohibited agreements and concerted practices restrictingcompetition and abuse of dominant position, and contained provisions regarding individual
exemptions on restrictive agreements;  market domination;  undertaking with special or exclusive
rights or natural monopoly;  State aid;  merger control;  unfair competition;  State supervision;
liability;  and implementing provisions.  Unfair trade practices were dealt with in a separate chapter
and referred to the following types of activities:
(i) publication of misleading information, or presentation or requests for publication of
misleading information;
(ii) disparaging a competitor or his/her goods;
(iii) abuse of confidential information;
(iv) abuse of an employee or representative of another enterprise;  and(v) unfair restriction or promotion of the sale of goods.
The Competition Board had been established in 1993 and currently employed some 38 officials.  The
Competition Board supervised the implementation of the Competition Act except in respect of credit
institutions, securities brokers and insurance companies.  State supervision of credit institutions,
securities brokers and insurance companies was exercised by the State supervision authorities in therelevant sector.  However, the Competition Board maintained the right to present recommendations
and exercise control on mergers in all sectors.  The rights and obligations of the Competition Board
under the Competition Act to supervise competition was also extended to the sectorial State
supervision authorities.
FRAMEWORK FOR MAKING AND ENFORCING POLICIES28. The representative of Estonia stated that, in accordance with the Constitution, the activities of
the Riigikogu  (Parliament), the President of the Republic, the Government of the Republic, and the
judiciary courts were based on the principle of separation and balance of powers.  Legislative power
was vested in the Riigikogu and executive power in the Government of the Republic.  Justice was
administered solely by the courts which acted independently as provided in the Constitution and the
laws.  The main government entities responsible for the formulation and implementation of policies
affecting foreign trade were the Ministries of Economic Affairs;  Foreign Affairs;  Finance;Agriculture;  and Transport and Communications.  All local issues were resolved and managed by
local governments  - municipalities and townships - operating autonomously.  The representative
body of local government was the council, elected in free elections for a term of three years.
29. Municipal and town councils had the right to  impose local taxes according to the Law on
Local Taxes.  Considered as local taxes were the poll tax, local income tax, sales tax, boat tax, motorvehicles tax, commercial and advertisement tax, tax on closing roads and streets, taxes for keeping
pets and entertainment tax.  Sub-central Governments also had the right to provide "green box" and
non-actionable subsidies from local budgetary revenues.
30. The representative of Estonia stated that if Estonian laws or other acts should be found to
contradict international treaties ratified by the Riigikogu  (Parliament), the provisions of the
international treaty would apply.  The WTO Agreem ent would have the status of an international
treaty.  The representative of Estonia confirmed that sub-central entities had no autonomous authority
over issues of subsidies, taxation, trade policy or any other measures covered by WTO provisions.  HeWT/ACC/EST/28
Page 12
confirmed that the provisions of the WTO Agreement, including Estonia's Protocol, shall be applied
uniformly throughout its customs territory and other territories under its control, including in regions
engaging in border trade or frontier traffic, special economic zones, and other areas where special
regimes for tariffs, taxes and regulations are established.  He added that when apprised of a situation
where WTO provisions were not being applied or were applied in a non-uniform manner, central
authorities would act to enforce WTO provisions without requiring affected parties to petition through
the courts.  The Working Party took note of these commitments.
POLICIES AFFECTING TRADE IN GOODS
Trading Rights
31. The representative of Estonia said that from 1 September 1995, the Commercial Code had
replaced the Enterprise Law.  The Commercial Code defined five types of business association
(general partnership, limited partnership, limited liability company, joint stock company and co-operative association) and the individual private entrepreneur, and stipulated procedures for opening a
foreign company's branch office in Estonia.  A firm obtained the relevant rights and obligations,
becoming legally a subject of Estonian law, through registration in the Commercial Register.  An
entry in the Commercial Register was made upon application.  Registration was applied uniformly to
all firms, including those which had applied for a Foreign Investment Licence, covering all types ofbusiness operations.  A trader submitted the required documents and the application, with notarized
signatures, to the registrar.  An enterprise wish ing to perform business in an area which required a
Licence of Activity would also need to obtain such a licence and submit it to the registrar.  The
Commercial Register was to be kept by local city courts.  The registrar had no right to deny an entry if
the applicant had submitted all necessary documentation in compliance with the requirements.
32. Enterprises set up under previous legislation, not meeting the requirements of the new Code,
had to be restructured or terminated by 1 September 1997.  Stricter mandatory capital requirements
would apply from 1 September 1999.  The Commercial Code did not contain any provision which was
inconsistent with the national treatment principle;  all its provisions applied equally to domestic and
foreign-owned companies.
33. Some members of the Working Party noted that laws and regulations relating to the right to
trade in goods (also sometimes referred to as "registration requirements" or "activity licensing")
should not restrict imports of goods in violation of the general prohibition on quantitative restrictions
in GATT Article XI:1, nor should they discrimina te against imported goods in violation of the
non-discrimination provisions of GATT Article III:4.  Furthermore, fees and charges levied on the
right to import should be limited to the approximate cost of services rendered (Article VIII:1(a)) and
taxes and charges on the right to trade in imported goods should not lead to discrimination in favourof like domestic products (Article III:2).
34. The representative of Estonia confirmed that the former State monopoly in foreign trade had
been abolished and that no restrictions existed on the right of foreign and domestic individuals and
enterprises to import and export goods within Estonia's customs territory, except as provided in WTO
Agreements.  He confirmed that individuals and firms were not restricted in their ability to import andexport based on their registered scope of business, and the criteria for enrolment in the Commercial
Register of companies in Estonia were generally regulated in the Commercial Code which was
published in the Official Journal " Riigi Teataja"  (State Gazette).  There was no special system of
registration of persons or firms to engage in importation, except for those businesses covered by
activity licences, in which case anybody fulfilling a set of objective criteria (e.g. relevant education, a
place to carry out the activity, fulfilling the sanitary requirements, clean tax record, etc.) could have
such a licence.  There was no differentiation betwee n foreign-owned and domestic firms for either theWT/ACC/EST/28
Page 13
non-automatic or automatic (obligation to announce the beginning of the business activity) activity
licences.
35. The representative of Estonia stressed that general government policy was to maintain a
liberal economic policy and to reduce the areas of activity subject to licensing.  He noted that Estonia
considered the licensing arrangements to be co nsistent with the WTO Import Licensing Agreement.
In its submission, Estonia listed 43 economic activities in which operators needed a "Licence of
Activity" for production and/or trade, valid for up to five years, and the corresponding regulatoryauthority (Table 4 which is reproduced in the Annex).  Among the justifications listed were safety
(e.g. medicaments);  a technological level adequa te to comply with compulsory standards (e.g.
alcoholic beverages);  registration requirements to prevent threats to security and the environment
(e.g. firearms and vehicles);  and registration and accounting requirements for tax purposes (alcoholic
beverages, tobacco, metals, etc.).  The criteria for the issuing of licences were published in theOfficial Journal " Riigi Teataja " (State Gazette).  Any person or firm fulfilling a set of objective
criteria (e.g. regarding relevant education, proper place of business, sanitary requirements, a clean tax
record, etc.) could obtain a "Licence of Activity".  He confirmed that the number of licences was not
restricted and that licences were granted to national and foreign operators under equal conditions.  In
each licensed sector identical criteria, objectively neutral and systematically administered, wereapplied regarding importation, exportation and domestic trade.  An expired licence could be renewed
or replaced by a new valid licence.  The fees for issuing licences were no higher than necessary to
cover the relevant costs.  In most cases the fee did not exceed EEK 2,000 while alcohol and tobacco
licences cost EEK 15,000.
36. The representative of Estonia confirmed that Estonia undertook to observe the relevant WTO
provisions, in particular the Agreement on Import Licensing Procedures, in different acts covering
specific fields of activity.  Activity licences had so far been established under different regulations
dealing separately with specific fields of activity.
37. The representative of Estonia confirmed that procedures to grant licences for importing food
had been finalized, and the Government Resolution No. 249 on "the Order for Issuing State Licencefor Importing Foodstuffs into Estonia" had entered into force on 1 December 1998.  In his view, the
procedures were in full conformity with the pr ovisions of the WTO Agreement on Import Licensing
Procedures, notably its Articles 2, 3 and 5.
38. A member expressed concerns about the conformity of this Resolution with WTO
requirements.  The Resolution appeared to institute a system of discretionary, non-automatic licences
approved by majority vote by a commission which included representatives of the domestic industry.
The Resolution also appeared to omit a mechanism for appeal, required by the Import LicensingAgreement in the case of non-automatic licences.  Estonia was encouraged to amend its legislation to
establish an automatic licensing system for foodstuff imports in conformity with Articles 1 and 2 of
the WTO Agreement on Import Licensing Procedures.
39. In reply, the representative of Estonia said that Resolution No. 249 had been amended on
16 March 1999 to ensure compliance with WTO requirements.  Licences would be issuedautomatically within ten working days to importe rs submitting correct and complete applications.
The representative of Estonia added that licences granted for importing food would not act to restrict
the quantity of imports.  The requirements applied to foodstuff importers were identical to those
applied to domestic foodstuff manufacturers.  The composition of the licensing committee would be
modified to ensure that the committee wa s formed exclusively of civil servants.
40. The representative of Estonia stated that the importation of products covered by activity
licences were subject only to requirements consis tent with the WTO Agreement.  He confirmed thatWT/ACC/EST/28
Page 14
no restrictions existed on the right of foreign and domestic individuals and enterprises to import and
export goods within Estonia's customs territory, with the exception of those specifically listed in
Table 4.  The activity licenses enumerated in Table 4 did not restrict foreign participation as they
applied equally to foreign and domestic businesses.  Activity licences were administered for the
purpose of ensuring product safety.  The criteria for granting activity licences differed according to
the area of activity and had been published in the Official Journal " Riigi Teataja " (State Gazette).
Upon request, the representative of Estonia would provide a more detailed table containing referencesto relevant Government Regulations.  The criteria for engaging in import and export trade in the
restricted sectors were consistent with generally applicable restrictions placed on trade in similar
domestically produced goods and based on criteria published in the Official Journal " Riigi Teataja "
(State Gazette).  The availability of activity licences was not restricted nor was the licensing applied
to restrict imports, the production, wholesale or retail trade in any product.
41. The representative of Estonia confirmed that from the date of accession Estonia would ensure
that its laws and regulations relating to the right to trade in goods and all fees, charges or taxes levied
on such rights would be in full conformity with its WTO obligations, including Articles VIII:1(a),
XI:1 and III:2 and 4 of the GATT 1994 and that it would also implement such laws and regulations in
full conformity with these obligations.  The Working Party took note of this commitment.
1. Import Regulations
Customs Tariff
42. The representative of Estonia presented an initial offer for market access negotiations on
goods in April 1995 and submitted a Revised General Offer for Market Access Negotiations on Goods
in August 1995.  A number of members entered into market access negotiations with Estonia.  Thecommitments agreed between Estonia and members of the Working Party are annexed to the Protocol
of Accession of Estonia which is reproduced in the Appendix to this Report.
Customs Duties
43. Noting that the current absence of a customs tariff demonstrated Estonia's free trade
determination, some members of the Working Party commended the successful and effective outcomeof Estonia's free trade policies and hoped that Estonia would continue to pursue these same sound and
progressive policies in the future. Some members also asked Estonia to provide details about the
imposition of customs duties and the criteria for application of zero and non-zero rates.  A member
expressed concern about Estonia's intentions in this area and requested further clarification, noting
that the Estonian authorities had drafted a Law on Customs Tariff although the draft law apparently
had remained unadopted at that time.  This member requested that the draft law be provided to the
Working Party for review and comment, noting that progress on market access negotiations wascontingent upon review of this document by members of the Working Party.
44. The representative of Estonia said that Parliament had adopted the Law on Customs Tariff on
14 October 1997, and it had been in force since 22 November 1997.  The Law on Customs Tariff,
which was a framework law laying down the legal basis for the application of customs tariffs,
included tariff ceiling rates for all commodities (at the four-digit level of the Harmonized System), butactual application of customs duties had to be enacted by a separate law.  Prior to the adoption of the
Law, Estonia had imposed import duties on furs (16 per cent), sea scooters, small vessels and
snow-scooters (10 per cent), and the exports of vintage cars presenting a cultural value (100 per cent)
as provided for in Government Decree No. 200 of 10 July 1993.  In accordance with the Law on
Customs Tariff, his Government had decided to abolish all customs tariffs in accordance withWT/ACC/EST/28
Page 15
Government Decree No. 115 of 2 June 1998, effective as of that date, and there are no tariffs currently
applied on imports into Estonia.
45. The representative of Estonia reaffirmed the free trade orientation of his country noting,
however, that Estonia would reserve the right to impose customs duties in the future, in full
consistency with its concessions and commitments as a member of the WTO.  A ceiling tariff binding
would offer Estonia the same regulatory opportunities in external trade as its main trading partners.
When the Estonian Parliament ratifies Estonia's Protocol of Accession to the WTO, the commitmentsannexed thereto in its schedule of concessions will prevail over the tariff ceiling rates provided in the
Law on Customs Tariff, the text of which has been provided to the Working Party.
Other Duties and Charges
46. The representative of Estonia stated that Estonia levied no duties and charges on imports
other than ordinary customs duties and charges for services rendered.  Any such charges applied toimports after accession would be in accordance with WTO provisions.  He further confirmed that
Estonia would not list any other charges in its Goods Market Access Schedule under Article II:1(b) of
GATT 1994, binding such charges at "zero".
Fees and Charges for Services Rendered
47. Some members of the Working Party noted that Estonia had applied an ad valorem  tax to
customs clearance operations and questioned whether the revised fee was commensurate with the
approximate costs of the services rendered as provid ed for in Article VIII of the GATT 1994.  Estonia
was also asked to provide details on the exemptions from the fee.
48. The representative of Estonia informed the Working Party that, as of 1 April 1995, a
0.5 per cent customs procedure tax had been replaced by a flat fee per customs declaration.  Therepresentative of Estonia confirmed that a fixed fee of EEK 200 per import and export declaration was
charged as a State fee for customs declaration and that this was the only fee or charge for services
rendered currently in force.  The fee was collected by the National Customs Board as a procedure fee
covering the cost of customs formalities.  He confirmed that the State fee for customs declaration was
applied on a non-discriminatory basis to trade with all Estonia's trading partners.
49. The representative of Estonia said that the fee related only to the cost of customs formalities,
and represented some 1.14 per cent of all revenue collected by Estonian Customs during 1997;  other
revenue was derived from excise taxes (19.51 per cent), value added tax (79.22 per cent), customs
duties (0.01 per cent) and other fees (0.12 per cent).  The fee was levied on imports from all trading
partners, but not on transit trade or goods in customs warehouses, re-exports after customs
warehousing, goods declared by physical persons, or  preliminary declarations.  Also exempt were
goods for official use by foreign diplomatic representations, consular representations or internationalorganizations;  printed matter and information carriers addressed to libraries;  irrecoverable economic
aid;  humanitarian aid received by the Estonian Red Cross;  containers, pallets or other kind of
transferable containers and medical and laboratory equipment for emergency aid (exported with an
obligation to re-import in unchanged state and imported with an obligation to re-export in unchanged
state).
50. The representative of Estonia confirmed that , from the date of accession, Estonia would not
reintroduce an ad valorem  customs fee.  The State fee for customs declaration would be applied in
conformity with WTO obligations,  in particular Articles VIII and X of the GATT 1994.  The level of
the applied fee would not exceed the approximate co st of processing import and export declarations,
revenues from the fee would be used solely for customs processing of imports and exports, and totalWT/ACC/EST/28
Page 16
annual revenue from collection of the fee would not exceed the approximate cost of customs
processing operations for the items subject to the fees.  He confirmed that revenues from the State fee
were not used for customs processing of imports exempted from the fee.  Information regarding the
application and level of the fee, revenues collected and their use, would be provided to WTO
Members upon request.  The Working Party took note of these commitments.
Application of internal taxes to imports
51. Some members of the Working Party noted that the excise taxes for certain domestic and
imported tobacco products and alcoholic beverages we re different.  These members requested Estonia
to phase out all measures inconsistent with Article III of the GATT 1994.  Some members also
questioned the conformity of Estonia's excise tax on automobiles with Articles III, VII and VIII of the
GATT 1994 and the WTO Agreement on Customs Valuation and requested details about the new tax
regime.  Estonia was also asked to provide details on excise tax exemptions.  Some members held theview that excise tax exemptions for small domestic producers of beer (annual domestic production not
exceeding 5,000 dekalitres) and of wine (annual production not exceeding 100 dekalitres), and the
exemption from the excise tax on domestically-owned second-hand motor vehicles, were inconsistent
with the national treatment provision of Article III of the GATT 1994.  In their view, Estonia would
need to change its excise tax legislation to bring it into conformity with Article III of the GATT 1994.
52. The representative of Estonia described the rates of excise tax applied on tobacco, petroleum
products, alcohol, motor vehicles and packaging materials (Tables  5 and 6).  These tax levels were
considered optimal and no reductions were foreseen upon accession to the WTO.  An excise duty of
16 per cent on furs and fur products, levied only on domestic producers, had been eliminated.
53. The representative of Estonia said that according to amendments to the Law on Alcohol
Excise Tax, the excise rates on domestic and imported beer had been equalized on 1 December 1996.
However, in support of regional development, small-scale producers of beer and wine had been tax
exempt, and the excise tax on beer had been differentiated depending on the annual output of the
manufacturer.  In addition, the excise tax on wi nes had distinguished between bulk and bottled
imports to encourage bottling and further processing in Estonia.  Estonia had no domestic productionof wine from fresh grapes.  He confirmed that the tax rates for bulk and bottled wine had been
equalized at EEK 10.40 per litre (up to 15 per cent  alcohol content by volume) and EKK 15.40 per
litre (over 15 per cent alcohol content by volume) on 1 December 1998, and that the tax exemption for
small-scale producers of wine (annual production no t exceeding 100 dekalitres) had been abolished as
from the same date.  A new taxation system for beer would enter into force on 1 April 1999;  the
excise tax would amount to EEK 0.55 per litre by vo lume of pure alcohol.  Thus, the excise tax would
no longer be differentiated according to the output of the manufacturer, and the tax exemption forsmall-scale beer producers (annual production not exceeding 5,000 dekalitres) would lapse as from
the same date.
54. The excise tax on alcoholic beverages was fixed in Estonian Kroon per litre, by volume of
pure alcohol (e.g. the tax on 1 litre of vodka (40 per cent vol.) amounted to EEK 1.45 x 40 = EEK 58),
and assessed on the amount of alcohol sold, exchanged, for free transfer or own consumption.Domestic manufacturers paid the tax to the State Budget through the local Tax Board three times per
month - on the third day following each ten-day period - on the basis of their actual turnover during
that period.  Importers were required to pay the excise tax upon importation, before release for free
circulation in Estonia.
55. The representative of Estonia added that excise taxes on alcoholic beverages were not
collected on domestically produced alcohol exported by the manufacturer directly or through a
customs warehouse;  supplies to maritime or air transport vessels engaging in foreign travel;WT/ACC/EST/28
Page 17
temporary importation by foreign juridical persons of limited amounts of alcohol for fairs and
exhibitions;  alcohol to be included in a data base on alcohol brands;  and alcohol imported for official
functions under diplomatic status.  The Estonian National Tax Board supervised compliance with the
rules.
Table 5 :  Excise Taxes in Estonia
Tariff Heading, subheading Product description Tax rate (EEK)
Alcohol
2203 00 011, 2203 00 091, 2203 00 101,
2203 00 019, 2203 00 099, 2203 00 1091. Beer 0.55**
(from 1 April
1999)
2204 10 110 - 2204 21 101,2204 21 110 - 2204 21 840,
2204 29 101, 2204 29 105,
2204 29 121-2204 29 849, 2205 10 101, 2205
90 101, 2205 90 103.2. Sparkling wines and other
wines of fresh grapes with an
alcoholic content by volume up
to 15%10.40*
2204 21 109, 2204 21 870 - 2204 21 990,
2204 29 103, 2204 29 109,
2204 29 871- 2204 29 999,
2205 10 109 – 2205 10 900, 2205 90 105,2205 90 109, 2205 90 901, 2205 90 902.3. Sparkling wines and other
wines of fresh grapes with an
alcoholic content by volume
exceeding 15%15.60*
4. Other fermented drinks (e.g.
cider, berry, wine etc.) and their
blends:
2206 00 810, 2206 00 891 a)   with an alcoholic content by
volume up to 15 %vol.4.90*
2206 00 592, 2206 00 892, 2204 30 109,
2204 30 969, 2204 30 989b)   with an alcoholic content by
volume exceeding 15 %vol.6.50*
2207 10 009, 2208
2106 90 200, 3302 10 1005. Other alcohol 1.45**
ex2207 10 000
ex2208 90 910ex2208 90 9906. Rectified spirits  used in
medicine, pharmaceutics,veterinary, scientific research
and study purposes, the
production of perfumery0.20**
* per litre
** per one %vol. of absolute alcohol in a litre
Motor Fuel (from 1 December 1998)
2710 00 271, 2710 00 272, 2710 00 290,2710 00 320, 2710 00 341, 2710 00 3422710 00 343, 2710 00 344, 2710 00 360Petrol, per 1,000 litre 3,000
2710 00 660, 2710 00 671, 2710 00 681 Diesel oil, per kg 2.32
2710 00 260, 2710 00 370 Aviation gasoline, per kg 1.50
2710 00 510 Aviation petrol, per kg 3.50
2711 12 940, 2711 12 970
2711 13 910, 2711 13 970Liquid gas used as motor fuel,
per kg1.50
2711 21 000 Compressed gas used as engine
fuel, per kg1.20
2710 00 871 Motor oil, per kg 0.38
2710 00 679, 2710 00 689 Light motor oil, per kg 0.24WT/ACC/EST/28
Page 18
Tariff Heading, subheading Product description Tax rate (EEK)
Tobacco products (from 1 Jan. 99/from 1 July 99)
2402 20 Filtered cigarettes 5.00*/5.50*
2402 20 Unfiltered cigarettes 5.00*/5.50*
2402 20 Russian cigarettes 5.00*/5.50*
2402 10 001 Cigarillos 5.00*/5.50*
2402 10 009 Cigars 5.00**/5.50**
2403 10 Smoking tobacco 6.35***/7.00***
2403 99 100 Snuff 6.35***/7.00***
2403 99 100 Chewing tobacco 6.35***/7.00***
ex2403 99 900 Other tobacco products 6.35***/7.00***
*per package containing up to 20 (incl.) cigarettes, Russian cigarettes or cigarillos
**per one cigar
***per package containing up to 50 (incl.) grams of a tobacco product
Packaging
Alcohol and soft drink packaging, depending
on the materialPer unit Per litre
Glass and ceramics 0.50 2.00
Plastics 1.00 2.00
Metal 0.75 2.00
Other 0.25 1.00
Excise is calculated according to both rates and summarized.  As from 1 January 1999, excise tax is
not imposed on packaging of which at least 60 per cent is recycled.
56. The representative of Estonia said that the Law on Stamp Duty established revenue stamps,
issued against payment of taxes by the National Tax Board at no extra charge, for goods subject to
excises.  At present the Stamp Duty concerned only imported and domestically produced tobacco
products.  For example, the excise tax per package of 20 cigarettes amounted to EEK 5.00 (EEK 5.50from 1 July 1999).  Domestic firms paid excise taxes to the local Tax Board three times per month,
taxes on imported tobacco products were payable before release for free circulation in Estonia.  The
representative of Estonia confirmed that excise rates for imported and domestically-produced tobacco
products had been equalized on 1 January 1996 by bringing taxes on domestic products up to the level
applied to imports.
57. Concerning the taxation of automobiles, a member said that the exemption of used
domestically owned automobiles from the excise tax on used automobiles was inconsistent with
Article III of the GATT 1994 and should be ch anged to bring it into conformity with WTO
requirements.  In response, the representative of Estonia said that used automobiles imported into
Estonia had been subject to a 10 per cent import tax levied in accordance with original invoices forlegal persons and a valuation list for natural persons in order to avoid fraud.  The import tax had been
replaced by excise taxes levied in accordance with the Law on Motor Vehicle Excise Tax, in force
since 1 April 1995.
58. All new motor vehicles and used motor vehicles imported into Estonia were subject to excise
tax.  Passenger automobiles were subject to a tax based on age and cylinder capacity either at the time
they were imported or at the point of manufacture within Estonia.  The tax was therefore applied at
the point of first sale, i.e. either at the time of importation or sale by domestic manufacturer.  Thesubsequent sale was not taxed.  There were no manufacturers of motor vehicles in Estonia except that
buses were assembled in small quantities.  At present there were no sales of domestically produced
new or used motor vehicles.  According to the Law, if there would be manufacturers of motorWT/ACC/EST/28
Page 19
vehicles, they would pay the excise tax upon sale, exchange, gratuitous transfer or self-consumption
of motor vehicles.  According to the Law on Motor Vehicle Excise Tax buses were not subject to
excise tax.  Estonia considered the Law on Motor Vehicle Excise Tax to be in conformity with
Article III of GATT 1994 because imported motor vehicles were treated as favourably as domestically
produced motor vehicles.  In order to explain how  excise duties on automobiles were calculated an
example was included in Table 6.  The excise tax was designed to encourage importation of modern
vehicles.
Table 6:  Motor Vehicles
Tariff heading,
subheadingProduct description Tax rate applicable
from 1 April 1999
1. Excise tax based on the cylinder capacity of motor vehicles
8703 Motor cars and other motor vehicles principally
designed for the transport of persons (other than those
of heading No. 8702), including station wagons and
racing cars:
ex8703 10 Motor vehicles specially designed for travelling on
snow; golf cars and similar vehiclesEEK 15/cc
Other vehicles, with spark-ignition internal
combustion reciprocating piston engine of a cylinder
capacity:
8703 21 not exceeding 1,000 cc EEK 1/cc
8703 22 exceeding 1,000 cc but not 1,500 cc EEK 2.5/cc
ex8703 23ex8703 23
ex8703 23 and ex8703 24
ex8703 23
ex8703 23exceeding 1,500 cc but not 1,600 cc
exceeding 1,600 cc but not 2,000 cc
Station wagons, land rovers of a cylinder capacityexceeding 1,600 cc
exceeding 2,000 cc but not 2,500 cc
exceeding 2,500 cc but not 3,000 ccEEK 2.5/cc
EEK 4/cc
EEK4/cc
EEK 8/cc
EEK 15/cc
8703 24 exceeding 3,000 cc EEK 30/cc
Other vehicles with compression-ignition internal
combustion piston engine (diesel or semi-diesel) of a
cylinder capacity:
8703 31 not exceeding 1,500 cc EEK 2.5/cc
8703 32ex8703 32 and
 ex8703 33exceeding 1,500 cc but not 2,500 cc
Station wagons, land rovers of a cylinder capacity
exceeding 1,600 ccEEK 4/cc
EEK 4/cc
ex8703 33
ex8703 33exceeding 2,500 cc
exceeding 3,000 ccEEK 8/cc
EEK 15/cc
8711
(except under sub-
heading 8711 90)Motorcycles (including mopeds) and cycles fitted with
an auxiliary motor, with or without side-cars; side-carsEEK 2.5/cc
2. Excise tax on used motor vehicles
of up to 10 years of age EEK 500/year
from 11 years of age EEK 1,000/year
3. Excise tax on new motor vehicles EEK 1,000
Example:
A used automobile, cylinder capacity 2 000 cm³, age 10 years and price according to the purchase
documents is 35,000 EEK:WT/ACC/EST/28
Page 20
Tariff heading,
subheadingProduct description Tax rate applicable
from 1 April 1999
35,000 - price according to the purchase documents
8,000 - excise tax on the basis of the cylinder capacity
5,000 - excise tax on the basis of age
48,0008,640 - VAT (18% of EEK 48,000)
56,640 - price for importer after importation
59. Some members of Working Party requested information on the application of the value-added
tax, including product and user-specific exemptions and equal treatment for imported and domestic
products.  Questions were also raised regarding the calculation of the VAT on motor vehicles.
60. The representative of Estonia confirmed that the value-added tax at an 18 per cent rate was
applied equally to domestic goods and to all imports regardless of country of origin.  VAT on motor
vehicles imported by natural persons had been based on a standard valuation list until the excise tax
system was changed on 1 April 1995.  He also confirmed that the exemptions for certain goods andservices from the VAT were applied equally to domestic and imported goods and services.  The
following goods and services were exempt from VAT:  education and advanced training, postage
stamps and public postal services, medical services, banking and insurance, funeral services and
requisites, organization of gambling and lottery tickets, residential rent (letting of housing),
medicines, medical goods, medical equipment, tr eatment of dangerous waste (since February 1995),
social services and scientific research activities of universities and State research establishments
funded from the State budget, and municipal sauna services.  Exports, subscriptions to periodicals
published and printed in Estonia, theatre tickets, tickets to concerts of State concert organizations and
State collectives of performers, textbooks and workbooks for basic schools and gymnasiums, had
zero-rate VAT.  The Government had the right to grant exemptions from VAT on imports for non-profit purposes.  Imports required for official purposes of foreign representations and diplomats were
not subject to VAT provided that foreign country granted the same right to Estonia's representations
abroad.  Regarding the VAT exemption on subscriptions to periodicals, the representative of Estonia
stated that national treatment will be applied to subscriptions to foreign periodicals by the date of
accession to the WTO.
61. Noting that certain legal entities with a turnover below EEK 250,000 were not registered as
obligatory payers of VAT, a member questioned the rationale for this provision and its conformity
with Article III of the GATT 1994.  In his view, this exemption would appear to constitute a subsidy
program for sales of domestic goods by small Estonian businesses since imports were assessed for the
VAT in any case upon importation.  Estonia should revise its legislation in the near term or propose a
method by which the deficiencies identified in its excise tax and VAT application would be
addressed.  The representative of Estonia replied that legal persons whose taxable base (exceptimports) exceeded the threshold value of EEK 250,000 in a calendar year were obliged to register
with the Tax Board as persons liable to taxation.  Legal persons with a taxable base below the
threshold value could also seek registration as liable to taxation at the Tax Board.  In his view,
non-registration did not amount to a subsidy program for small Estonian companies for sales of
domestic goods and services since only registered tax payers could claim a refund for VAT paid ongoods and services used as inputs in their production.  Experience suggested that most firms making
use of the threshold were small services providers with relatively low input costs.
62. The representative of Estonia confirmed that, from the date of accession, Estonia will apply
its domestic taxes, including those on products listed in paragraphs 52 to 61 in strict compliance with
Article III of the GATT 1994.  The Working Party took note of this commitment.WT/ACC/EST/28
Page 21
Quantitative Import Restrictions, including Prohibitions, Quotas and Licensing Systems
63. Some members of the Working Party sought information about the use of quantitative
restrictions and import licensing arrangements.  Some members expressed the concern that under
certain circumstances the conditions of sale of imported products could be affected in a manner not
consistent with Article III of the GATT 1994, for instance, trade in alcohol and tobacco required a
preliminary declaration.
64. The representative of Estonia said that no product was subject to quantitative import
restrictions in Estonia and that licensing was not applied to restrict imports, the production or the
wholesale of any product.  The "preliminary declara tion" requirement simply implied that all customs
procedures and formalities needed to be completed before goods could cross the border.  The
representative of Estonia stated further that licences were required to engage in certain activities,
including importation of certain products as described in paragraphs 34 to 40 of this report.  Theserequirements, including licensing arrangements for food imports, were of automatic nature and did not
have restrictive effect on imports.  In Estonia's view, the procedures for activity licensing were in full
conformity with the provisions of the WTO Agreement on Import Licensing Procedures, notably its
Articles 2, 3 and 5.
65. The representative of Estonia confirmed that , from the date of accession, Estonia would not
introduce, re-introduce or apply quantitative restrictions on imports, or other non-tariff measures such
as licensing, quotas, bans and other restrictions having equivalent effect that could not be justified
under the provisions of the WTO Agreement.  If ba lance-of-payment measures were ever necessary in
the future, Estonia would impose them in a manner consistent with the relevant WTO provisions,
including Article XII of the GATT 1994 and the Understanding on Balance-of-Payments Provisionsof the GATT 1994.  The Working Party took note of these commitments.
Customs Valuation
66. Some members of the Working Party asked about the status of the Customs Valuation Law
and its content.  Relating the request for information to Estonia's implementation of the WTO
Agreement on the Implementation of Article VII of the GATT 1994, these members enquired whether
Estonia's Customs Valuation Law was fully consistent with the WTO Agreement.  A member
understood that Estonia was considering legislation which could provide for minimum prices on
importation of certain food products and questioned the conformity of such legislation with GATT
rules.  Estonia also appeared to use price lists of reference prices to verify invoices.  This member
reminded Estonia that the use of minimum import prices or reference prices was a violation of
Article VII.
67. The representative of Estonia explained that the Customs Valuation Law had been adopted on
8 February 1995 and had entered into force on 1 January 1996.  The delay had been necessary to
undertake preparatory work for its implementation, including practical arrangements such as the
printing of documents, the training of customs officers, informing traders, etc.  Estonia considered  the
Law to be in full conformity with WTO rules,  including the WTO Agreement on the Implementation
of Article VII of the GATT 1994.
68. Estonia's response to the questionnaire on "Information on Implementation and
Administration of the Agreement" was submitted in  August 1995 (WT/ACC/EST/4, annexes 1 and 6,
listed in document WT/ACC/EST/5).  The representative of Estonia was asked to clarify provisions in
the Customs Valuation Law relating to the use of transaction value between related parties
(Article 4(3));  verification of transaction values between related parties based on test values(Articles 4(5)(4) and (5));  and a reference to minimum customs values in Article 9(2)(4) of the Law.WT/ACC/EST/28
Page 22
Estonia was also asked about the implementation of Decision 4.1 of the Customs Valuation
Committee concerning the valuation of carrier media bearing software for data processing equipment
(the Software Decision).
69. The representative of Estonia said that Estoni a had introduced the provisions of the Software
Decision.  A decree, issued by the Ministry of Finance on 11 January 1996, stipulated that only the
cost of the carrier medium itself would be accounted for in the customs value.  He stated that the
value of imported merchandise was determined in conformity with GATT Article VII (2)(a) also intransactions between related parties;  test values were used for the verification of the declared value
with the actual value only at the request of the importer. Estonia agreed to incorporate a number of
specific requests made by a member in connection with its draft Act Amending the Customs
Valuation Act and the draft Order amending its 1995 Order relating to Customs Valuation.  These
changes included:  clarity that Article 3 of the draft Act would incorporate the words "related" ratherthan "dependent on each other";  language to more clearly reflect royalties and licensing fees under
the WTO Agreement in Article 14 of the draft Law;  changes to paragraph 32 of the draft Order to
clarify its application to situations where transaction value does not apply;  and, clarifying language in
paragraph 49 of the draft Order into conformity with WTO provisions with respect to the use of test
values.
70. The representative of Estonia assured members of the Working Party that the Law on
Customs Valuation would be applied in full  conformity with the WTO Agreement on the
Implementation of Article VII of the GATT 1994.  In  addition, he confirmed that Article 9(2)(4) of
the Law would be applied consistent with Article VII (Valuation for Customs Purposes).  He stressed
that Article 9(2)(4) of the Customs Valuation Law prohibited the setting up of minimum import
values.  He underlined that these and other issues raised by members of the Working Party were also
addressed in the provisions of the "Order of decl aring, determining and adjusting the customs value of
goods", enacted in 1995, and in draft legislation.  The draft Act Amending the Customs Valuation Act
would be presented to Parliament as soon as possible, and no later than June 1999.  Following
adoption of these amendments, the Government would revise the 1995 Order.  This legislation wouldbe enacted prior to Estonia's accession.  With this additional legislation, Estonia would not have any
measures in place at the time of accession which would be inconsistent with WTO rules, nor would
Estonia introduce such measures in the future.  Estonia did not use measures such as minimum prices,
reference prices or lists of prices in order to calculate customs value or to verify invoices.
71. The representative of Estonia confirmed that, from the date of accession, Estonia would apply
fully the WTO provisions concerning customs valu ation, including in addition to the Agreement on
the Implementation of Article VII of the GATT 1 994, the provisions on the Treatment of Interest
Charges in Customs Value of Imported Goods and for the Valuation of Carrier Media Bearing
Software for Data Processing Equipment.  In accordance with these latter provisions, only the cost of
the carrier medium itself would be accounted for in the customs value.  He stated that Estonia would
not use any form of reference price or fixed valuation schedule for the valuation of imports or to apply
duties and taxes, and that all methods of valuation us ed were in strict conformity with those provided
for in the WTO Agreement on the Implementation of Article VII of the GATT 1994.  He further
confirmed that, as an international agreement,  the provisions of the WTO Agreement on the
Implementation of Article VII of the GATT 1994 would supersede domestic law upon accession.  The
Working Party took note of these commitments.
Other Customs Formalities
72. The representative of Estonia confirmed that other customs formalities were applied in
accordance with internationally accepted rules and were based on the Kyoto Convention.  He added
that Estonia had been a member of the World Cust oms Organization since June 1992.  In reply to aWT/ACC/EST/28
Page 23
specific question, he confirmed that Estonia did not require authentication of import/export documents
by its consulates overseas.
Rules of Origin
73. Some members of the Working Party requested information about the elaboration of rules of
origin in Estonia whether in the context of free trade agreements or otherwise.  A member requested
Estonia to confirm that its rules of origin for both preferential  and non-preferential trade complied
fully with the WTO Agreement on Rules of Origin.  Estonia was asked to describe, in particular,measures consistent with the disciplines under Article 2 of the Agreement and the Common
Declaration in Annex II of the Agreement.
74. The representative of Estonia said that the drafting of rules of origin was a continuous process
evolving in accordance with developments in the Technical Committee on Rules of Origin of the
WTO.  Due to the liberal foreign trade regime the elaboration of national rules of origin had not beenconsidered essential in Estonia, but agreed rules of origin were used in the framework of free trade
agreements.  Estonia applied unified rules of origin within the system of diagonal cumulative origin
among the countries of the European Economic Area, Switzerland and ten associated countries in
central and eastern Europe.  Members of the Working Party were supplied copies of the rules of origin
of Estonia's free trade agreements with EFTA coun tries;  the European Communities, the Ukraine and
the trilateral free-trade agreement with Latvia and Lithuania.  He said that the preferential rules of
origin complied fully with the disciplines under the Common Declaration in Annex II of the WTO
Agreement on Rules of Origin.  The Estonian authorities envisaged the elaboration of legislation on
rules of origin along the lines of existing rules of  origin in preferential trade agreements and the
suggestions and decisions of the Committee on Rule s of Origin of the World Customs Organization
and the WTO Agreement on Rules of Origin.  Estonia had not developed its own non-preferential
rules of origin and was waiting for the new set of ru les of origin to be elaborated by the WTO.  The
new Customs Act that entered into force on 19 January 1998 provided the basis for enactment of those
rules.  Regarding both non-preferential and preferential rules of origin, when legislation was enacted,
it would address the requirements of Article 2(h) and Annex II, paragraph 3(d), which requireprovision upon request of an assessment of the origin of the import and outline the terms under which
it will be provided.
75. The representative of Estonia stated that the Government Regulation establishing Estonia's
non-preferential rules of origin would be adopted by 30 June 1999, or in any case no later than by the
date of accession.  He confirmed that from the date of accession the non-preferential rules of origin
would comply fully with the WTO Agreement on Rules of Origin.  The Working Party took note of
this commitment.
Anti-Dumping, Countervailing Duties, and Safeguard Regimes
76. Some members of the Working Party noted that Estonia appeared not to have any specific
anti-dumping legislation, but that an Anti-dumping  Law, including countervailing duties procedures,
was in preparation.  In view of the uncertainty regard ing the date of entry into force of such a law and
its content, Estonia was asked to submit draft le gislation for comment to members of the Working
Party.
77. The representative of Estonia confirmed that, at this point, Estonia did not have legal
authority to apply anti-dumping duties, countervailing duties, and safeguards, and therefore did not
use these measures to regulate trade.  Chapter 4, Article 14 of the Law on Competition mentioned
among abuses of dominant position the imposition of unfair pricing conditions or other unfair tradingconditions.  However, the listed unfair trade practices in the Act did not overlap with any pendingWT/ACC/EST/28
Page 24
anti-dumping statute.  He added that no text of  any Anti-dumping Law existed yet.  Provisions on
anti-dumping and countervailing measures were  not included in the Law on Customs Tariff.
78. The representative of Estonia confirmed that  Estonia would not apply any anti-dumping,
countervailing or safeguard measure until it had implemented and notified appropriate laws in
conformity with the provisions of the WTO Agreements on the Implementation of Article VI, on
Subsidies and Countervailing Measures, and on Safeguards.  In the elaboration of any legislation
concerning such anti-dumping, countervailing and safeguard measures Estonia would ensure their fullconformity with the relevant WTO provisions, including Article VI and XIX of the GATT 1994 and
the Agreements on the Implementation of Article VI, the Agreement on Subsidies and Countervailing
Measures and the Agreement on Safeguards.  After such legislation was implemented, Estonia would
also apply any anti-dumping duties, countervailing duties and safeguard measures in full conformity
with the relevant WTO provisions.  The Working Party took note of these commitments.
2. Export Regulations
Customs Tariffs, Fees and Charges for Services Rendered, Application of Internal Taxes to Exports
79. Some members of the Working Party noted that Estonia had applied export taxes on metals
and objects of cultural value.  In response, the representative of Estonia said that a 100 per cent export
tax had been levied on objects of cultural value, i.e. dating from before 1950, but this tax had beenabolished by Government Decree No. 115, which entered into force on 2 June  1998.  Export taxes on
metals had also been abolished, thus Estonia did not impose export taxes on any product at present.
80. The representative of Estonia confirmed that after accession to the WTO, Estonia would
minimize the use of export taxes and any such taxes applied would be in accordance with the
provisions of the WTO Agreement and published in the Official Journal " Riigi Teataja " (State
Gazette).  Changes in the application of such measures, their level, scope, or justification, would also
be published in the Official Journal " Riigi Teataja " (State Gazette).  The Working Party took note of
these commitments.
Export Restrictions
81. Noting that the Ministry of Economic Affairs had the right to impose export quotas on certain
goods, some members of the Working Party asked the representative of Estonia to clarify licensing
arrangements affecting trade in metals, spirits, tobacco products and medicaments and to justify
export quotas/licences on gravel and clay.  Some members also sought clarification on Estonia's
intentions regarding the use of non-tariff measures on exports for emergency purposes.  The
representative of Estonia replied that the Ministry of Economic Affairs' right to determine export
quotas had been eliminated.  The last remaining export quota (on quartz sand) had been abolished and
Estonia did not foresee any further quantitative regulation of export trade.  As the export quota/licenceon gravel and clay had been terminated on 1 January 1995, no justification would be required under
GATT or WTO provisions and Estonia would seek no transitional period for this measure.  Export
and import licences as such did not exist, but he referred to the earlier response regarding "Licence of
Activity" (in paragraphs 34 to 40 above).  He added that Estonia would not apply regulations on
exports beyond WTO mechanisms.
82. Export control measures (licences) on scrap metal and radioactive waste material did not
carry any limitation of quantity.  Licences were issued automatically provided the applicant could
prove that the goods had been obtained legally.  Failure to do so could constitute a criminal offence.
The monopoly rights of the former State Monopoly on trade in scrap metals and dangerous metal
waste had been abolished by Government Regulation  No. 200 "On the Approval of the Order ofWT/ACC/EST/28
Page 25
Issuing Activity Licences for Commercial Intermediation of Scrap Metal and Metal Waste" as of
15 September 1998, and the enterprise itself had been privatized. The regulation granted access to any
private enterprise to trade in scrap metal, provided the enterprise fulfilled the conditions stipulated in
the Regulation.  All firms trading in scrap metal or radioactive metal waste were required to follow
the rules established by the regulation.  The representative of Estonia confirmed that all export quotas
and licences and measures having similar effect had been eliminated.
83. The representative of Estonia confirmed that any remaining export control requirements were
fully consistent with WTO provisions, including those contained in Articles XI, XVII, XX and XXI of
the GATT 1994.  The Working Party took note of this commitment.
Export Subsidies
84. Some members of the Working Party sought information about subsidies, including tax
incentives related to exports, the activities of the Export Credit Fund, the consideration of wideranging use of export incentives, and existing or planned measures to tackle market disturbances or
balance-of-payments problems.  The representative of Estonia said that no tax incentives, including
tax holidays, existed to promote exports.  He confirmed that loans from the Export Credit Fund
carried 12 to 16 per cent annual interest, comparable to the commercial interest rates of 12 to
18 per cent in effect for short-term loans in Estonia in 1996.  Plans existed to develop the Fund into anExport Credit and Guarantee Board which would receive the initial capital injection from the National
Budget.  Estonia would not consider wide rangin g export incentives, but, due to an increasingly
negative trade balance, had the intention to introduce moderate export incentive schemes.  Enterprise-
or sector-specific subsidies were not envisaged;  the schemes would be of horizontal nature and
allocations would be based on objective economic criteria.  The representative of Estonia added thatthe incentives schemes would be applie d in conformity with WTO requirements.
85. The representative of Estonia stated that from the date of accession Estonia would not
maintain any subsidies, including export subsidies, which met a definition of a prohibited subsidy
within the meaning of Article 3 of the Agreemen t on Subsidies and Countervailing Measures, and
would not introduce such prohibited subsidies from the day of accession.  The Working Party tooknote of this commitment.
3. Internal Policies Affecting Foreign Trade in Goods
Industrial Policy, including subsidies
86. Some members of the Working Party requested details on any subsidies to private or State-
owned enterprises and asked whether Estonia maintained any industry support to be notified in
accordance with the Agreement on Subsidies and Countervailing Measures.  Some members also
asked Estonia to state its attitude regarding future re sort to subsidies in the pursuit of industrial policy
and clarification of the intention to restore historical trade links.
87. The representative of Estonia said that the restoration of historical trade links would involve
free and balanced economic links with countries offering Estonia the best possibilities and real
potential for mutually beneficial economic partnership.  Estonia confirmed that it had some
programmes providing subsidies to industries, in particular the Innovation Foundation, whichprovided grants for research and development activities, and the Law on State Support for
Entrepreneurship, which regulated State support to small and medium sized enterprises.  In this latter
case support - loans and loan guarantees  - were made available by an eleven-member Council.  The
Estonian Innovation Foundation was a non-profit orga nization, established by the Government.  Its
operations were coordinated by the Estonian Research and Development Council, a collectiveWT/ACC/EST/28
Page 26
advisory body to the Government.  The main functions of the Foundation were to initiate and fund
State technology programmes;  finance projects to improve production technology at the pre-
industrial stage;  promote technical and technological research and development;  and to support the
development of science and technology parks and production infrastructure.  The Foundation
provided grants for applied research (up to 50 per cent of project costs) and loans for industrial
projects (maximum 75 per cent of project costs).  In the period 1991-1997, the Estonian Innovation
Foundation had supported 257 projects, providing grants totalling EEK 27 million and loans of morethan EEK 84 million;  the Foundation's budget for 1998 amounted to EEK 30 million.  Estonia
provided a draft notification under Article 8.3 (Non-actionable subsidies) of the Agreement on
Subsidies and Countervailing Measures regarding the activities of the Estonian Innovation Foundation
to the Working Party (document WT/ACC/EST/20).
88. The representative of Estonia confirmed that any subsidy programmes would be administered
in line with the Agreement on Subsidies and Countervailing Measures and that all necessary
information on notifiable programmes would be  notified to the Committee on Subsidies and
Countervailing Measures in accordance with Article 25 of the Agreement upon entry into force of
Estonia's Protocol of Accession.  The Wo rking Party took note of this commitment.
Technical Barriers to Trade, Sanitary and Phytosanitary Measures
89. Some members of the Working Party inquired about the application of international and
national standards in Estonia and the compliance with various provisions of the Agreement on
Technical Barriers to Trade (TBT) and on Sanitary and Phytosanitary Measures (SPS).  Regarding
agriculture, some members asked about the objectives of the Food Law and the resort to sanitary and
phytosanitary measures, with particular reference to Government Regulations 300 and 340 of 1992.
90. The representative of Estonia supplied information on technical barriers to trade in document
WT/ACC/EST/9 (Annex III) and a notification on sanitary and phytosanitary measures.  The National
Standards Board of Estonia (EVS) was responsible for standardization issues.  The EVS was a
correspondent member of ISO and an affiliated member of CEN, the Estonian Electrotechnical
Committee was an associated member of IEC and an affiliated member of CENELEC, and theEstonian Telecommunications Board had become a member of ETSI.  The EVS had accepted the
Code of Good Practice for the Preparation, Adoption and Application of Standards (Annex 3 to the
WTO TBT Agreement), and this had encouraged the application of international and European
standards.  Current Estonian standards were based mainly on standards of international organizations
and on national standards of other countries.  Estonian standards were harmonized with the regulation
of the European Communities and were generally voluntary, except the application of some standards
(e.g. on purchasing requirements of milk, on fire safety, etc.) made mandatory by ministries'regulations and in the case of technical regulations on spirits (white vodka) and construction cement.
Former USSR criteria, the so-called GOST standards, remained temporarily valid in some areas but
were no longer mandatory.  All standards applied equally to domestic and imported products.  EVS
prepared its standards programme twice a year (1 January and 1 July);  the latest standards
programme had also been submitted to the ISO/IEC information unit.  All European standardsimplemented by Estonia were registered and submitted to CEN.  All draft standards presented for
adoption as Estonian standards, including those received from international standardization
organizations, were published in the official bulletin of the National Standards Board "EVS Teataja"
for comment.
91. Conformity assessments were organized in accordance with European requirements
(EN 45000).  Acceptance of foreign certification was based on the principle of mutual recognition
between the relevant body in Estonia and its counterpart in another country.  Estonia was harmonizing
its conformity assessment legislation to ensure  compliance with the requirements of the TBTWT/ACC/EST/28
Page 27
Agreement, including the acceptance of foreign conformity assessment without a mutual recognition
agreement, by the date of accession.
92. The representative of Estonia said that "high quality" and "internationally competitive food"
were key objectives cited in Estonia's Food Law, which was to serve as a basis for further legislation
regulating food handling, quality, safety, control and inspection.  A National Food Board had been
established to deal with all matters concerning food and nutrition policy, however, its tasks had been
transferred to the Ministry of Agriculture in accordance with the amendments to the Food Law of26 June 1996.  The responsibilities of the Ministry thus included planning and analysis of the status of
food and nutrition, elaboration of relevant strategic proposals, drafting laws on food and food
handling, organization of food safety inspection, advising authorities certifying and testing food
quality and safety, and elaboration and implementation of food monitoring programmes.
93. The representative of Estonia added that border controls on plants and plant products were
effected by the Plant Quarantine Department of the Plant Protection Inspectorate in accordance with
Government Regulation No. 300 (of 19 October 1992) on "Regulation of arranging phytosanitary
control on the State border" and amendments to this done on 15 December 1992 (Regulation No. 340)
and 31 March 1995 (Regulation No. 147) as well as the Law on Plant Protection and the Temporary
Regulation on the State Control, Sale, Export and Import of the Seeds of Field Crops, and the Law onVeterinary Services of 1992.  Sanitary and phytosanitary measures and the work of veterinary services
were in accordance with the Codex of the OIE (Off ice International des Epizooties), in which Estonia
had been member since 1992.  Goods subject to veterinary controls, border check points, requirements
for veterinary certificates and the procedures for settling claims were laid down in a Decree of the
Minister of Agriculture of 3 Au gust 1994 and Government Regulation No. 17 of 10 April 1995.  The
authorities considered the health and safety provisions of the Food Law to be consistent with the
WTO Agreement on Sanitary and Phytosanitary Measures.  Amendments to the Food Law, adopted
by Parliament in February 1999, included acceptance of exporters' certificates, issued in conformity
with international principles of certification, at the border.
94. Some members of the Working Party noted that Estonia had adopted no laws, regulations or
administrative procedures relating to the implementation and administration of the WTO obligations
on  technical barriers to trade and that regulations concerning SPS were being developed.  In their
view, these procedures should be enacted by the time of Estonia's accession to the WTO.
95. The representative of Estonia provided copies of draft legislation related to technical barriers
to trade and sanitary and phytosanitary measures to Members for comment.  He confirmed that
Estonia had established an Enquiry Point as required in Article 10 of the WTO Agreement on
Technical Barriers to Trade and the Agreement on the Application of Sanitary and PhytosanitaryMeasures (Annex B).  The Enquiry Point at the National Standards Board of Estonia (EVS) was fully
operational at present, and covered both TBT and SPS issues.  The EVS had accepted the Code of
Good Practice established in Annex 3 of the TBT Agreement.  Programmes on the drafting of
standards in Estonia were submitted to the ISO/IEC twice a year.  Agencies drafting standards and
conformity assessment or certification procedures took into account existing international standards orguidelines prior to drafting domestic legislation, and would notify WTO Members at the draft stage
and take into account comments from WTO Members before finalizing regulations.  Estonia
submitted information on national enquiry points to the Working Party in document
WT/ACC/EST/19.
96. The representative of Estonia provided a draft notification under Article 15.2 of the TBT
Agreement in April 1997 (document WT/ACC/EST/17).  The Law on Technical Regulations and
Standards, adopted by Parliament on 22 February 1999, provided the legal and organizational basis
for standardization activities and notification procedures in Estonia.  Technical regulations wereWT/ACC/EST/28
Page 28
published in the Official Journal "Riigi Teataja"  (State Gazette).  According to the Law on Technical
Regulations and Standards, a technical regulation could make reference to existing standards, which
could remain voluntary, or be made mandatory standards.  Detailed procedures for the notification of
technical regulations would be provided in a Government Regulation, to be presented to the
Government for adoption in May 1999.  Preparations had begun to establish a Notification Centre at
the Ministry of Economic Affairs.  The Notification Centre would be responsible for the notification
of technical regulations, collection of incoming notifications, collection of comments, andconsultations with the authors of technical regulations on notification requirements.  Institutions
drafting technical regulations would be required to provide all relevant information and
documentation to the Notification Centre, which would decide on notification in close co-operation
with the drafting institution.  The Notification Cent re would forward the notification form to the WTO
Secretariat, and the TBT Enquiry Point (EVS) would file the documentation and publish a note in itsofficial bulletin "EVS Teataja" about the draft technical regulation being available for comment.  The
Notification Centre would forward any requirement fo r consultations to the drafting institution, the
Enquiry Point and the Ministry of Foreign Affairs, and the agencies would prepare a common position
on the comments/requirements for consultations.  The drafting institution was required to submit the
adopted text of a technical regulation to the Notification Centre, which forwarded it to the EnquiryPoint for filing.  Concerning incoming notifications, notifications sent by the WTO Secretariat to the
Notifications Centre would be forwarded to the Enquiry Point for publication, and to the relevant
Ministry.  Interested parties would present their comments to the Notification Centre, which would
prepare the comments/requirements for consultations in close co-operation with the relevant Ministry
and the Ministry of Foreign Affairs.  The Notification Centre would send Estonia's comments,requirements for consultations and detailed opinions to the WTO Member.
97. The representative of Estonia said that the Ministry of Agriculture had reviewed the Food
Law, the Law on Veterinary Services, the Law on Plant Protection, the Law on Grain, the Law on
Consumer Protection and the Law on Common Health w ith a view to ensuring their conformity with
WTO requirements upon accession to the WTO, including the Agreement on Technical Barriers toTrade and the Agreement on Sanitary and Phytosanitary Measures.
98. The representative of Estonia confirmed that Estonia would apply all obligations under the
WTO Agreements on Sanitary and Phytosanitary Measures and Technical Barriers to Trade from the
date of accession without recourse to any transi tion period.  The Working Party took note of these
commitments.
Trade-Related Investment Measures (TRIMs)
99. The representative of Estonia said that Estoni a would not maintain any measures inconsistent
with the TRIMs Agreement and would apply the TRIMs Agreement from the date of accession
without recourse to any transitional period.  The Working Party took note of this commitment.
State-trading
100. Some members of the Working Party noted that a significant portion of Estonia's output and
trade remained in State hands and that tobacco and alcohol had been subject to State monopoly.Estonia was requested to notify under Article XVII any de facto or de jure trade monopoly and trade
activities of any State-owned firm benefitting from selective support or subject to State intervention.
101. The representative of Estonia replied that following extensive privatization State-owned firms
accounted for less than 5 per cent of domestic trade.  The process of privatization was continuing and
shares in privatized companies were traded activel y on the Tallinn Stock Exchange.  He stressed that
the influence on international trade of the shares remaining in Government ownership was difficult toWT/ACC/EST/28
Page 29
estimate as Estonian law did not allow the customs authorities to disclose enterprise-specific trade
information to any third party except the tax authorities.  Estimates based on trade per share were not
meaningful in practice because of rapid changes in share ownership.  Therefore, he could only
confirm a strong tendency for State-ownership to decrease as the State sold shares to the public to
encourage the development of Estonia's stock market.  With the exception of Eesti Energia  and Eesti
Põlevkivi , the representative of Estonia said that enterprises part-privatized through the sale of State-
owned shares did not constitute a State trading enterprise in the sense of Article XVII since they hadno special rights or privileges in relation to any other enterprises.
102. Estonia notified under Article XVII of the GATT 1994 in its Information on State-trading
(WT/ACC/EST/9 (Annex IV)) that a State monopoly had been established on scrap metal to control
metal trade.  The purpose of the scrap metal monopoly (EMEX) was to prevent serious crime;  i.e.
trade in metal stolen from unguarded installations and construction sites.  Such thefts had causedextensive damage to domestic infrastructure, in particular to the operations of Estonian Railways,
Estonian Energy and Estonian Telephone.  The monopoly could also be used to control trade in
radioactive scrap materials.  However, the monopoly rights on trade in scrap metals and radioactive
metal waste had been abolished by Government Regulation  No. 200 "On the Approval of the Order
of Issuing Activity Licences for Commercial Intermediation of Scrap Metal and Metal Waste", inforce since 15 September 1998, and the enterprise itself had been privatized.  The representative of
Estonia stated that his Government had identified the trading activities of the firms Eesti Energia  and
Eesti Põlevkivi  as subject to the provisions of Article XVII of the GATT 1994.
103. The representative of Estonia confirmed that it was the intent of his Government to eventually
eliminate its State trading rôle.  He further confirmed that after accession to the WTO, Estonia wouldobserve the provisions of Article XVII of the GATT 1994, the WTO Understanding on that Article,
and Article VIII of the GATS regarding State trading, in particular abiding by the provisions for
notification, non-discrimination, and the applica tion of commercial considerations for trade
transactions.  The Working Party took note of these commitments.
Free Zones, Special Economic Areas
104. The representative of Estonia said that there were currently no free trade zones in Estonia.
Government Procurement
105. Some members of the Working Party asked whether Estonia intended to join the Agreement
on Government Procurement and requested details about Estonia's procurement legislation, its
coverage and its conformity with WTO principles. The representative of Estonia said that the Law on
Public Procurement had been adopted in May 1995 and entered into force on 1 January 1996.  The
Law was in line with WTO provisions.  The Government had established a Public Procurement Officeto coordinate and administer public procurement activities.  The legislation defined four principal
procedures of procurement;  open tender, two-stage tendering, negotiated tendering, and single-source
procurement.  Open tender implied that any interested supplier could submit a bid and no negotiation
would take place between the procuring entity and any tenderer.  Two-stage tendering would be
applied when all technical and economic factors could not be assessed a priori  or the procurement
carried uncertainty regarding research and development costs.  Negotiated tendering would be
organized in procurement subsequent to an inconclu sive round of open tender (no bids received or all
tenders rejected) or in case public procurement involved urgent works or public procurement was
performed by the diplomatic representation of the Republic of Estonia, i.e. procurement taking place
outside Estonia.  Prior to the commencement of the tendering the procuring entity should notify the
Public Procurement Office in writing about th e performance of the tendering.  Single-source
procurement could only take place in the existence of sole suppliers, extraordinary needs or timeWT/ACC/EST/28
Page 30
pressure;  as a continuation of previous procurement contracts;  and when the supplier would carry out
research and development resulting in prototypes.  Again, the relevant notice in writing should be sent
to the Office prior to the tendering procedure.  In accordance with the amendments to the Law on
Public Procurement of 1 January 1997, the observance of the rules established in the Law on Public
Procurement was not obligatory when the objective of the public procurement was;  (i) public
procurement involving State secrets;  (ii) printed matter and articles of virtue;  (iii) scientific research
and special programmes;  (iv) elaboration of legal acts and legal assistance;  (v) purchase of anexisting building or any part thereof from a natural person;  and (vi) public procurement established
by other laws.
106. Estonia requested observer status in the Committee on Government Procurement in a letter
dated 1 October 1998 and obtained observer status in that committee on 7 October 1998.
107. The representative of Estonia confirmed th at, upon accession to the WTO, Estonia would
initiate negotiations for membership in the Ag reement on Government Procurement by tabling an
entity offer.  He also confirmed that, if the results of the negotiations were satisfactory to the interests
of Estonia and the other members of the Agreement, Estonia would complete negotiations for
membership in the Agreement by 31 December 2000.  The Working Party took note of these
commitments.
Transit
108. The representative of Estonia said that Estonia had joined the "Convention on Customs for
Goods in International Transit under the TIR Carnet" in April 1993.  Departure and arrival formalities
were completed at the customs inspection stations at the border. No customs duty, customs clearance
charge, sales tax or excise tax were levied on goods in transit.
109. The representative of Estonia confirmed that  his Government would apply its laws and
regulations governing transit operations and would act in full conformity with the provisions of the
WTO Agreement, in particular Article V of the GATT 1994.  The Working Party took note of this
commitment.
Agricultural Policies
110. Some members of the Working Party requested information on Estonia's current agricultural
policy, including main principles, and specific policies regarding tariffs and tariff bindings, trade
measures in the grain sector, safeguards, farm support programmes and incomes policy, price
controls, export subsidies, privatization and preferential trade arrangements.
111. The representative of Estonia said that the return of land to former owners had been a
cumbersome process but the major part of agriculture had been privatized.  Remaining State
enterprises still played an important role in the development of seeds and breeds.  Foreign ownershipexisted in the food processing industry.  Estonia had no tariffs or non-tariff measures affecting
agricultural imports and no subsidies or price controls on food.  However, the Law on Market
Arrangements, adopted by Parliament on 25 September 1995, would allow the introduction of tariffs.
The 1994 Law on Grain had allowed the Government to restrict grain imports when domestic demand
was fully covered by local production, although no quotas had ever been implemented.  Agreeing thatthe Law on Grain was inconsistent with the WTO and the Agreement on Agriculture, the
representative of Estonia informed the Working Party that the provisions in the Grain Law authorizing
the use of import quotas when domestic demand was fully covered by local production had been
abolished by Parliament on 25 November 1998.  Estonia used tax exemptions in the years prior to
accession as a measure of domestic support.WT/ACC/EST/28
Page 31
112.  The representative of Estonia confirmed Estonia's awareness of the WTO requirement not to
use quantitative restrictions and to rely on customs duties and said that this rule would be followed in
future policy.  The representative of Estonia said that drafting of a Law on Food Licensing had not
been completed as foreseen by the end of 1996 due to amendments made in the Food Law.  Rather
than prescribing food licensing by law, it had been decided to develop secondary legislation
regulating the issuance of licences for importing food.  The Government Resolution No. 249 "on the
Order for Issuing State Licence for Importing Foodstuffs into Estonia" had entered into force on1 December 1998.  He stressed that licensing arrangements for food imports were of automatic nature
and did not have restrictive effect on imports.
113. A member was concerned about the conformity of Government Resolution No. 249 with
WTO requirements.  The regulation appeared to institute a system of discretionary licensing,
prohibited in Article 4.2 of the Agreement on Agriculture.  In reply, the representative of Estonia saidthat Resolution No. 249 had been amended on 16 March 1999 to ensure that licences would be issued
automatically to all importers submitting a complete licence application.
114. Estonia's commitments on agricultural tariffs, on domestic support and export subsidies for
agricultural products are in the Schedule of Concessions and Commitments on Goods annexed to
Estonia's Protocol of Accession to the WTO.
Trade in Civil Aircraft
115. A member of the Working Party sought a commitment that Estonia would implement the
Agreement on Trade in Civil Aircraft without exceptions or transition periods at the time of accession.
116. The representative of Estonia confirmed that  Estonia would become a signatory to the
Agreement on Trade in Civil Aircraft upon accession to the WTO.  The Working Party took note ofthis commitment.
TRADE-RELATED ASPECTS OF INTELLECTUAL PROPERTY RIGHTS
117. Some members of the Working Party requested details about legislation and enforcement of
intellectual property right protection in Estonia and the compatibility with requirements of the TRIPS
Agreement.  Specific questions were addressed regarding exceptions from national or MFN treatment,non-patentable inventions, protection of plant varieties, patent holders' rights, extension of patent
terms, granting of compulsory licences, judicial review, semiconductors, copyright, trademarks,
industrial design and competition and anti-trust.
118. The representative of Estonia said that Estonia deemed its intellectual property right
protection compatible with the TRIPS Agreement with no exceptions to the principles of national and
MFN treatment.  The status of legislation on intellectual property in Estonia as per January 1999 is
presented in Table 7.  He added that the Patent Office had opened in March 1992.  During 1992 and1994 Estonia had enacted  a Patent Law;  a Utilit y Model Law;  a Trademark Law; and a Copyright
Law, and provisions related to TRIPS-obligations had been included in the Law on Competition of
11 March 1998.  A Law on Industrial Design Protection had been prepared and adopted by Parliament
on 18 November 1997;  the Law had entered into force on 11 January 1998.  The Trademark Law had
been amended in 1995, 1996 and 1997.  Legislation on industrial property was said to be modelled oncorresponding laws of the Nordic countries and European and international legislative acts.
According to the Constitution, the provisions of an international treaty ratified by Parliament
prevailed over national law.  An indication of this rule was included in all intellectual and industrial
property laws.WT/ACC/EST/28
Page 32
Table 7:  Status of Legislation on Intellectual Property in Estonia (January 1999)
TRIPS Agreement Laws and other legal provisions
addressing and covering the subject
mattersEffective and draft legislation relating to
requirements of the WTO TRIPS
Agreement
Part II, Section 1
Copyright and related
rightsCopyright Act of 1992
The Act Amending the Criminal Code
and the Code of AdministrativeOffences of 1995Effective and full compliance with WTO
TRIPS requirements ensured
Part II, Section 2
TrademarksTrade Marks Act of 1992 as amended
in 1997Effective and full compliance with WTO
TRIPS requirements ensured
Part II, Section 3Geographical IndicationsTrade Marks Act of 1992
Competition Act of 1998Requirements of TRIPS Art. 22-23 are
covered.
Protection of geographical indications
will be addressed more specifically in anew act to be adopted in 1999.
Part II, Section 4Industrial DesignsIndustrial Design Protection Act of
1997Effective and full compliance with WTO
TRIPS requirements ensured
Part II, Section 5PatentsPatent Act of 1994 as amended in 1998
Utility Model Act of 1994Effective and full compliance with WTO
TRIPS requirements ensured
Part II, Section 6Layout DesignsProtection of Layout-Design of
Integrated Circuits Act of 1998Effective and full compliance with WTO
TRIPS requirements ensured
Part II, Section 7Protection of
Undisclosed InformationPatent Act of 1994
Trade Marks Act of 1992 Industrial
Design Protection Act of 1997
Protection of Layout-Design ofIntegrated Circuits Act of 1998Effective and compliance with WTO
TRIPS requirements ensured (protection
of undisclosed information during
registration procedures and fromdatabases)
Part II, Section 8Control of Anti-Competitive Practices inContractual LicensesDraft Regulation on Block Exemptions
of Some Categories of TechnologyTransfer and Draft Regulation on BlockExemptions of Certain Categories of
Franchise Agreements
Part III, Section 3
Provisional measuresCode of Civil Procedure of 1998
Competition Act of 1998, Chapter 9"State Supervision" andChapter 10 "Liability"Effective and full compliance with WTO
TRIPS requirements ensured
Part III, Section 4
Special requirementsrelated to border
measuresCustoms Act of 1997
Act of 1999 Amending the CopyrightAct, the Code of Administrative
Offences, the Criminal Code, the
Consumer Protection Act and theCustoms ActEffective and full compliance with WTO
TRIPS requirements ensured
Part III, Section 5
Criminal proceduresCode of Criminal Procedure of 1995
Criminal Code of 1992Act of 1999 Amending the CopyrightAct, the Code of AdministrativeOffences, the Criminal Code, the
Consumer Protection Act and the
Customs ActEffective and full compliance with WTO
TRIPS requirements ensured
119. In 1994, Estonia had become full member of the World Intellectual Property Organization,
joined the Patent Cooperation Treaty and restored its membership to the Paris Convention for theProtection of Industrial Property and the Berne Convention for the Protection of Literary and Artistic
Works which Estonia originally joined in 1924 and 1927, respectively.  The Ministry of Culture wasWT/ACC/EST/28
Page 33
preparing Estonia's accession to the 1971 Geneva Convention and the 1961 Rome Convention.  The
texts of the Rome and Geneva Conventions had been translated into Estonian, and Estonia was
expected to join the Conventions by the end of 1999.  The Protocol relating to the Madrid Agreement
on International Registration of Marks had entered into force in Estonia on 18 November 1998.  In
response to further questions, the representative of Estonia said that plant varieties were protected
under the 1994 Variety Protection Law and patent protection for micro-organism strains could be
granted following Estonia's accession to the Budapest Treaty.  As of 14 September 1996, Estonia hadbeen a member of the Budapest Treaty on the International Recognition of the Deposit of Micro-
organism for the Purposes of Patent Procedure.  From that date, the Estonian Patent Office had
accepted patent applications on the micro-organism  strains and the novel use of micro-organism
strains.  Estonia intended to accede to the Union for the Protection of New Plant Varieties (UPOV)
and the Variety Protection Law would be harmonized with the 1991 UPOV Convention.
120. Certain inventions were non-patentable (inventions contrary to public order and morality, and
treatment and diagnostic methods practised on humans or animals).  Patent protection was provided to
equipment, methods, substances or micro-organism  strains, including their combination and use for
novel purposes, in accordance with Article 6 of th e Estonian Patent Law.  Supplementary protection
certificates for pharmaceutical and agricultural chemical products would be introduced throughpassage of the Law on Amending the Patent Law in the first half of 1999.  Provisions regarding a
patentee's exclusive rights and exceptions were found in Chapter IV (sections 15, 17, 45 and 46) of
Estonia's Patent Law.  There were no restrictions on a patent owner's rights to assign, transfer or
licence rights, but a licensing agreement needed to be registered with the Patent Office to be valid.
Compulsory licences could be granted by court order only (section 47) under terms and conditionsconsistent with Article 31 of the WTO Agreement on TRIPS.  Patents were not extendable under
present legislation.  Parliament had adopted the Law on Amending the Patent Law on 16 June 1998 in
order to establish provisions corresponding to Articles 27 and 34 of the TRIPS Agreement.  In regard
to Article 39.3 of the TRIPS Agreement requiring that members protect data submitted to obtain
marketing approval for pharmaceuticals and agricultural chemicals that utilize new chemical entities,the Estonian Patent Office had initiated the procedur e for including this provision into the Patent Law.
The Estonian Patent Office had submitted the draf t Law Amending the Patent Law to the Ministry of
Economic Affairs for review on 16 March 1999.  The draft Law would be submitted to the
Government for approval on 20 April 1999.  The adoption of the Law by the Parliament was
scheduled before the end of 1999.  According to paragraph 2 of Article 11 of the Patent Law, Estonia
recognized the right of priority on the basis of an earlier patent application filed within a period of
twelve months in any other WTO Member or in a Member of the Paris Convention.  The Protection of
Layout-Design of Integrated Circuits Act had be en adopted by Parliament on 25 November 1998.
121. With respect to copyright and related rights, the representative of Estonia said that Estonia
applied the principle of national treatment in the protection of works.  The Copyright Law also
protected works originating in countries where international treaties did not apply, provided that the
other country guaranteed similar protection to the works of Estonian authors or works first published
in Estonia.  On 25 November 1998, Parliament had adopted the Protection of Layout-Design of
Integrated Circuits Act, which also covered the protection of semi-conductor layout design.  The
conditions governing free use and free decompilation of computer programs were set out in
Chapter IV, Sections 24 and 25, of the Copyright Law.  The Law did not contain provisions on
compulsory licensing of copyrightable works and sound recordings;  full retroactive protection wasprovided under Sections 38 and 74.  Section 75 prescribed the limitations on rights neighbouring on
copyright.  While Section 79 of the Copyright Act dealing with the management of cable
retransmission by a collective management organization at the moment applied only to cable
retransmission in that it had not yet been determ ined how the system would be applied regarding
reprography rights, eg., whether any organization was needed or if the Estonian Authors' Associations
role would be enlarged.  It was expected that this decision would be made by 31 December 1999 andWT/ACC/EST/28
Page 34
implemented through the year 2000.  The collection of a levy to compensate for the use of audiovisual
works and sound recordings had begun in January 1996.
122. With regard to trade marks, the representative of Estonia said that signs registrable as trade
marks were enumerated in Section 6 of the Trade Marks Law.  The Law protected well known marks
whether or not registered in the Republic of Estonia.  Section 5 of the Law set out the rights (and
limitations) granted to holders of trademarks;  registration satisfied notice of the exclusive right, and
no specific provisions restricted the licensing or transfer of trademarks.  The registration of anassignment was not considered valid without registration.  Registrability of a trademark generally did
not depend on use.  Applications were lodged with the Patents Office, its refusal to register a
trademark (contravention of sections 7 and 8) mi ght be contested through the Board of Appeals of
Industrial Property.  Decisions of the Appeal Board could be brought before a court of law.  The
Government intended to draft a new Trademark Law in 1999.
123. The representative of Estonia said that the Law on Industrial Design Protection had entered
into force in January 1998.  The legislative aspects of geographical indications of origin would be
provided in a new Law, which would be drafted in 1999.  For the time being, geographical indications
of origin were protected indirectly through th e Trademark Law and the Law on Competition.  Trade
secrets were not protected by separate legislation, but were covered under Article 148 of the CriminalCode.  Undisclosed information was protected under the provisions governing the abuse of business
secrets in the Law on Competition.  Information submitted to government agencies was protected
under the Public Service Law.  Chapter 8 of Estonia's Competition Law:  Unfair Competition was
consistent with the Paris Convention and Article 40 of the TRIPS Agreement.  The Customs Law
formed the legal basis for the prevention of imports of infringing goods.  In accordance withArticle 46 of the Customs Law, customs officers examined goods to check that their nature, origin,
condition, quantity and value corresponded to the information provided in the customs declaration.
Proceedings could be instituted in cases of forged, falsified or incomplete documentation.
Amendments to the Criminal Code and the Code of  Infringement of Administrative Law to include
specific provisions on legal protection of industrial property had been approved by Parliamentin 1996.
124. A member asked Estonia to become a member of the Geneva Phonograms Convention, noting
that the restoration of protection for copyrighted works was required under Article 14 of the TRIPS
Agreement which applies Article 18 of the Berne Convention, mutatis mutandis, to sound recordings.
Protection of industrial designs, semiconductor chip layout designs and new plant varieties was also
required under TRIPS.  On patents, this member asked for confirmation that a court, in deciding on a
compulsory licence, would follow the procedures out lined in Article 8, paragraph 6 of its bilateral
agreement with Estonia.
125. In reply, the representative of Estonia said that Estonia was preparing to accede to the 1971
Geneva Convention, the 1961 Rome Convention and the Union for the Protection of New Plant
Varieties (UPOV).  Accession to the Geneva and Rome Conventions, and to UPOV, was scheduled to
take place before the end of 1999.  Parliament had adopted the Law on Industrial Design Protection inNovember 1997, and the Protection of Layout-Design of Integrated Circuits Act in November 1998.
126. The representative of Estonia stated that Estonia would fully apply all the provisions of the
Agreement on Trade-Related Aspects of Intellectual Property Rights from the date of its accession to
the WTO, without recourse to any transitional period.  The Working Party took note of this
commitment.WT/ACC/EST/28
Page 35
POLICIES AFFECTING TRADE IN SERVICES
127. In the interest of accelerating the process of accession to the WTO Agreement, the
representative of Estonia submitted Estonia's draft Schedule of Specific Commitments in Services
(document WT/L/59), and a Revised Draft Schedule of Specific Commitments in Trade in Services
(document WT/ACC/EST/6).
128. Some members of the Working Party commented on Estonia's draft schedule of commitments
on trade in services.  In their view, the initial offer was not sufficient since the documentationindicated an open services regime and Estonia had entered unbound in several modes of delivery.
Specific questions covered procedures or restrictions on the entry of foreign labour, including
lawyers, architects and accountants and cross-border trade in such services;  market access conditions,
cross-border trade, the effect of the economic stabilization programme, and recent legislation in the
financial services sector;  licensing of operators in telecommunications and air transport;  restrictionson foreign investment;  establishment of trade offices and the coverage of services in preferential
trading arrangements.
129. The representative of Estonia presented a revised services schedule undertaking further
commitments.  According to the representative of Estonia the unbound entries in the first draft
reflected the lack of specific regulations with regard to specific services.  He added that visaregulations governed the temporary entry of foreigners;  a residence permit and a work permit was
required for foreign personnel to take up employment in Estonia.  The annual immigration quota
corresponded to 0.1 per cent of Estonia's population.  Foreign lawyers, architects and accountants
could act as consultants to Estonian firms and there were no legal obstacles to the purchase of such
services abroad.  Estonia confirmed that foreign suppliers were not treated less favourably thannational providers of financial services, with the exception of some special requirements concerning
foreign-owned insurance companies indicated in its draft Schedule of Specific Commitments
(WT/L/59).  Applications to establish representation offices or subsidiaries in banking were addressed
to the Bank of Estonia.  Recent amendments in financial sector legislation included further regulations
on prudential requirements and the adoption of a new Credit Institution Law with additional
instruments for the supervisory authority and provisions on money laundering.  The Estonian
securities market was in its early stages of development, but growth had been substantial.  The
demand for insurance had been boosted by compulsory insurance for motor vehicles.
130. With regard to telecommunications, the representative of Estonia said that a foreign firm
would need a foreign investment licence and register as a legal person in Estonia to do business in
telecommunications. A concession conferring monopoly rights to "Eesti Telefon" (Estonian
Telephone) was valid until year 2003.  The Law of Broadcasting (Article 22) limited foreignownership and possession of broadcasting transmitters to less than 50 per cent of the shares.
131. With regard to transportation, the representative of Estonia said that only companies
registered in Estonia could obtain a licence for conveyance of goods and passengers;  a ferry had to be
owned by a citizen of Estonia or a company with headquarters in Estonia and have a minimum
51 per cent national ownership.  The shipping company "Estline" currently had a monopolyconcession, valid until August 1999, on the conveyance of passengers between Estonia and Sweden.
Aviation licences were issued to permanent residents of Estonia or legal persons with minimum
51 per cent resident or national ownership.  Air carriers operating in Estonia included Estonian Air
and several foreign carriers.
132. The representative of Estonia stated that Estonia did not prohibit foreign services suppliers
from establishing trade offices in any sector and that no services sectors and activities wereWT/ACC/EST/28
Page 36
completely closed to foreign companies.  Certain se rvices activities were subject to licensing;  the
required licences and the corresponding regulatory authorities are listed in Table 4.  Licensing
requirements such as the Foreign Investment Licence and the Licence of Activity fell under GATS
Article VI (Domestic Regulation) and were accordingly not indicated in the GATS Schedule of
Estonia.  In sectors in which Estonia would unde rtake specific commitments, Estonia would not apply
technical standards, licensing or qualification requirements that nullify or impair such specific
requirements in a manner not complying with the criteria outlined in subparagraph 4 of Article VI ofthe GATS, or which could not reasonably have been expected of Estonia at the time the commitments
were made.  Regarding Estonia's commitments on professional services, Estonia would provide for
adequate procedures to verify the competence of professionals of any other Member.
133. Estonia's Schedule of Specific Commitments on Services is annexed to its draft Protocol of
Accession reproduced in the Appendix to this Report (see paragraph 142 below).  This Schedule ofSpecific Commitments on Services contains the legally binding market access commitments of
Estonia in respect of services.
TRANSPARENCY
Publication of Information on Trade
134. The representative of Estonia said that Article 2 of the Law on Official Journal " Riigi
Teataja " (State Gazette) stipulated 14 different groups of legislative acts (normative acts) to be
published in the Official Journal " Riigi Teataja " (State Gazette), including:  (i) Laws, decisions, and
declaration of Parliament;  (ii) decisions and regulations of the President;  (iii) regulations and orders
of Government;  (iv) regulations of ministers;  and (v) the annual report and general regulations of the
Central Bank.  Prompt publicati on of laws and normative acts ensured the highest transparency
possible.  He added that the Official Journal "Riigi Teataja"  (State Gazette) was available on the
internet (www.rk.ee/~teataja).
135. The representative of Estonia said that, at the latest from the date of accession, all laws and
other normative acts related to trade would be published in the Official Journal " Riigi Teataja " (State
Gazette) promptly and no law, rule, etc. related to  international trade would become effective prior to
such publication.  He further stated that Estonia would fully implement Article X of the GATT 1994,
Article III of the GATS, and the other transpar ency requirements in WTO Agreements requiring
notification and publication.
Notification
136. The representative of Estonia said that, at the latest upon entry into force of the Protocol of
Accession, Estonia would submit all initial notifications required by any Agreement constituting part
of the WTO Agreement.  His Government would not ify its Innovation Fund at the latest upon entry
into force of Estonia's Protocol of Accession.  An y regulations subsequently enacted by Estonia which
gave effect to the laws enacted to implement any Agreement constituting part of the WTO Agreement
would also conform to the requirements of that Agreement.  The Working Party took note of this
commitment.
TRADE AGREEMENTS137. Some members of the Working Party enquired about Estonia's preferential agreements with
the European Communities and EFTA States, Latvia and Lithuania, further plans to conclude such
agreements, including a possible Baltic Customs Union, and the existence of countertrade agreements
with former CMEA members.  Questions were also raised concerning the consistency of Estonia's freeWT/ACC/EST/28
Page 37
trade agreements with the requirements of Article XXIV of the GATT 1994, in particular the
obligation to cover substantially all the trade between the constituent territories.  A member requested
information on the scope of Estonia's preferential agreements with particular attention to sectors
where all measures and charges on trade had not yet been eliminated.
138. The representative of Estonia replied that Estonia had preferential trade agreements with
EFTA States;  the EU;  Faroe Islands;  Latvia and Lithuania;  the Czech Republic;  the Slovak
Republic;  Poland;  Slovenia;  Turkey;  Ukraine and Hungary.  In 1998, about 73 per cent of Estonia'sforeign trade was subject to preferential agreements.  The Free Trade Agreement with the
European Communities had entered into force on 1 January 1995, also covering new members
Austria, Finland and Sweden.  Estonia's Free Trade Agreement with the European Communities had
been notified to the WTO in document WT/REG8/ N/1 and was being examined in accordance with
normal practice (document WT/REG8/1 containe d the Agreement and document WT/REG8/2 the
Terms of Reference). He added that Estonia's Europe Agreement with the European Communities
also covered trade in services.  The services provisions of that Agreement had entered into force on
1 February 1998 and included disciplines for movement of workers, establishment and supply of
services.  The services provisions of the Agreement would be notified once Estonia became a member
of the WTO.  The Free Trade Agreement with EFTA States had been notified to the WTO indocument WT/REG28/N/1;  additional relevant documentation included document WT/REG28/1 (the
Agreement), document WT/REG28/2 (Standard Fo rmat) and document WT/REG28/3 (Terms of
Reference).  The Free Trade Agreements with Slovenia, the Czech Republic and the Slovak Republic
had been notified to the WTO in documents  WT/REG37/N/1, WT/REG62/ N/1 and WT/REG63/N/1,
respectively.  He stated that Estonia had no countertrade agreements with countries in central andeastern Europe.  The free trade agreements generally provided  duty free importation and exportation
of  industrial goods (HS Chapters 25-97) while trade in agricultural goods were covered either in
separate agreements or related protocols.  Some quantitative and qualitative requirements applied to
Estonia's agricultural exports.
139. The representative of Estonia said that the 1994 Free Trade Agreement between Estonia,
Latvia and Lithuania did not cover HS Chapters 1 to 24, but an agreement covering trade in farm
products had entered into force on 1 January 1997.  The two agreements complemented each other
and, taken together, constituted a free trade area in terms of Article XXIV of the GATT 1994.  He
noted that Estonia had had the possibility, until the end of 1997, to regulate agricultural imports with
tariffs under the Free Trade Agreement with the European Communities.  Should Estonia apply
import duties in the future under the terms of any of its free trade agreements, he confirmed that
preferential treatment would only be accorded in the context of free trade agreements as provided forin Article XXIV of the GATT 1994.
140. The representative of Estonia stated that his Government would observe the provisions of the
WTO including Article XXIV of the GATT 1994 and Article V of the GATS in its trade agreements,
and would ensure that the provisions of these WTO Agreements for notification, consultation and
other requirements concerning preferential trading systems, free trade areas and customs unions ofwhich Estonia was a member were met from the date of accession.  The Working Party took note of
these commitments.
Conclusions
141. The Working Party took note of the explanations  and statements of Estonia concerning its
foreign trade regime, as reflected in this report .  The Working Party took note of the commitments
given by Estonia in relation to certain specific matters which are reproduced in paragraphs 15, 21, 25,
30, 41, 50, 62, 65, 71, 75, 78, 80, 83, 85, 88, 98, 99, 103, 107, 109, 116, 126, 136 and 140 of thisWT/ACC/EST/28
Page 38
Report.  The Working Party took note that these commitments had been incorporated in paragraph 2
of the Protocol of Accession of Estonia to the WTO.
142. Having carried out the examination of the foreign trade regime of Estonia and in the light of
the explanations, commitments and concessions made by the representative of Estonia, the Working
Party reached the conclusion that Estonia be invited to accede to the Marrakesh Agreement
Establishing the WTO under the provisions of Article XII.  For this purpose, the Working Party has
prepared the draft Decision and Protocol of Accession reproduced in the Appendix to this report, andtakes note of Estonia's Schedule of Concessions and Commitments on Goods (document
WT/ACC/EST/28/Add.1) and its Sc hedule of Specific Commitments on Services (document
WT/ACC/EST/28/Add.2) that are annexe d to the Protocol.  It is proposed that these texts be adopted
by the General Council when it adopts the Report.  When the Decision is adopted, the Protocol of
Accession would be open for acceptance by Estonia which would become a Member thirty days afterit accepts the said Protocol.  The Working Party agreed, therefore, that it had completed its work
concerning the negotiations for the accession of Estonia to the Marrakesh Agreement Establishing the
WTO.WT/ACC/EST/28
Page 39
ANNEX
Table  2:  Electricity prices (since 18 November 1997)
Consumers with capacity 400kW or more per one substation or measuring system unit (group I)
IA IB IC Category
descriptionUnit
(1EEK = 100 sent)voltage in connection point
110kV or
more6-35 kV less than 6kV
Capacity charge EEK/kW per month 53.00 58.00 64.00
and Active Energy main
pricesent/kWh 29.6 38.9 49.8
or daytime price
(07.00.-23.00)sent/kWh 32.6 42.8 54.8
and night time pricesent/kWh 20.4 26.8 32.4
or daytime price
(07.00.-12.00)sent/kWh 33.0 43.9 56.3
daytime price
(12.00.-23.00)sent/kWh 31.4 41.7 53.3
and night time pricesent/kWh 20.4 26.8 32.4
and Reactive Energy
consumptionsent/kvarh 3.8 4.6 6.0
and releasing to the
networksent/kvarh 7.6 8.1 8.1
Consumers with capacity less than 400kW per one substation or measuring system unit (group II)
voltage in connection point
less than 6kV 6-35kVCategory
descriptionUnit
(1EEK = 100 sent)
Variant A Variant B II C
Consumption charge for 1-
phase consumerEEK/A per month 2.80 - -
Consumption charge for3-phase consumerEEK/A per month 8.40 - -
and Active Energy mainpricesent/kWh 61.0 74.6 53.2
or daytime price
(07.00.-23.00)sent/kWh 66.9 82.2 58.5
and night time price sent/kWh 36.4 44.9 36.7
or daytime price
(07.00.-12.00)sent/kWh 68.7 - -
daytime price
(12.00.-23.00)sent/kWh 65.1 - -
and night time price sent/kWh 36.4 - -
and Reactive Energy
consumptionsent/kvarh 6.0 6.0 4.6
and releasing to the
networksent/kvarh 8.1 8.1 8.1WT/ACC/EST/28
Page 40
Resellers (group III)
The category
descriptionUnit
(1EEK = 100 sent)
Active Energy main price sent/kWh C
or daytime price (07.00.-23.00) sent/kWh 1.06C
and night time price sent/kWh 0.62C
and Reactive Energyconsumptionsent/kvarh 4.6
and releasing to the network sent/kvarh 7.7
Households (group IV)
The category
descriptionUnit
(1EEK = 100 sent)without VAT VAT included
Active Energy main
pricesent/kWh 55.1 65.0
or daytime price
(07.00.-23.00)sent/kWh 55.1 65.0
and night time price sent/kWh 33.1 39.0
Consumers without measuring (group V)
The category description Unit
(1EEK = 100 sent)
Consumption charge for
1-phase consumerEEK/A per month 77.40
Consumption charge for
3-phase consumerEEK/A per month 232.20
Night consumers and consumption regulators 100kW or more (group VI)
voltage in connection point The category
descriptionUnit
(1EEK = 100 sent) 6 kV or more less than 6 kV
Consumption charge EEK/A per month 3.00 3.50
and Active Energy during
night timesent/kWh 24.0 28.5
and Reactive Energy
consumptionsent/kvarh 4.6 6.0
and releasing to the network sent/kvarh 8.1 8.1WT/ACC/EST/28
Page 41
Table 3: Oil-shale Prices (since 1 May 1997)
Quality class MJ/kg Price for clients with
the deviation from
the average monthly
shipment by less than
±15%
EEK/tPrice for clients
without contract or
for those with the
deviation from the
average monthly
shipment by more
than ±15%
EEK/t
1 PK over 11.51 71.63 127.27
2 1PK over 10.97 70.73 125.70
3 2PK 10.26 - 10.97 69.75 123.95
4 3PK 9.59 - 10.25 68.86 122.39
5 4PK 8.54 - 9.58 67.89 120.29
6 P over 9.21 66.92 118.96
7 1P over 8.79 66.04 117.38
8 2P 7.79 - 8.79 65.13 115.79
9 3P 7.29 - 7.78 64.16 114.09
10 4P 6.28 - 7.28 63.26 112.50
11 5P 6.07 - 6.27 62.31 110.78
Table 4:  Activities subject to licensing (Activity Licence)
Activity Issuing Authority
1. Management of aviation and sea transport (exclude small
private boats), international car and railway transport
(excludes intra-enterprise rail transport)Ministry of Transport and
Communications
2. Geology-related activities, mining of natural resources Ministry of Economic Affairs
3. Production and trade in objects containing precious metals and
precious stonesMinistry of Finance
4. Production, possession and trade in weapons, parts thereof,
ammunition, or pyrotechnic equipment; repairs of weaponsMinistry of Internal Affairs
5. Production and trade in medical narcotic, highly toxic,
radioactive, and poisonous substances. Growing plants that
contain narcotic, highly toxic and poisonous substances.
Purchase and possessing of medical narcotic, highly toxic,radioactive, and poisonous substancesMinistry of Social Affairs
6. All forms of medical treatment Ministry of Social Affairs
7. Production of and trade in medicines Ministry of Social Affairs
8. Import and export, as well as production and wholesale of
tobacco and production thereof, and alcohol; and retail of
alcoholMinistry of Economic Affairs;
Municipal GovernmentsWT/ACC/EST/28
Page 42
Activity Issuing Authority
9. Printing and minting of money Bank of Estonia
10. Printing of securities Ministry of Finance
11. Printing of postage stamps Ministry of Transport and
Communications
12. Building and management of public communications'
networks of any kindMinistry of Transport and
Communications
13. Management of an educational institution of a higher or
general level, both vocational, or professional; together with
the right to issue nation wide accepted certificates of educatio nMinistry of Education
14. Management of security services' firms, installation of
security, guard, and signalization systemsMinistry of Internal Affairs
15.  Opening and management of private detective agencies Ministry of Internal Affairs
16. Collation of measuring instruments Ministry of Economic Affairs
17. Production and trade in micro-organisms, plants, and animals
created by genetic engineeringMinistry of Environment
18. Insurance Ministry of Finance
19. Projecting, expertise and inspection of buildings, construction
contracting activitiesMinistry of Environment
20. Geodetic and cartographic activities Ministry of Environment
21. Ecological expertise Ministry of Transport and
Communications
22. Management of environmentally harmful substances Ministry of Transport and
Communications
23. Transmission or broadcasting of radio and television
programmes by means of the radio and television networksMinistry of Culture
24. Management of casinos (gambling) Ministry of Finance
25. Reproduction of the State symbols or their parts of the
Republic of EstoniaState Chancellery
26. Exchange management Ministry of Finance
27. Tourism Ministry of Economic Affairs
28. Ships' agencies and organizing sea transport Ministry of Transport
29. Lotteries Ministry of Transport and
Communications
30. Assessment of land property, selling and buying land Ministry of Environment
31. Activities on the securities' market Ministry of Finance
32. Veterinary activities, veterinary practice Ministry of Agriculture
33. Temporary storage of commercial goods, customs-storage
proceduresMinistry of FinanceWT/ACC/EST/28
Page 43
Activity Issuing Authority
34. Commercial trade (imports, re-exports), wholesale and retail,
and storage of imported fuels and lubricantsMinistry of Economic Affairs
35. Production and repairs of weapons, ammunition, and
technology for national defence purposesMinistry of Defence
36. Experiments with animals Ministry of Agriculture
37. Management of imports and exports, as well as other trade,
services, repairs, and dissembling of motor vehicles andtrailersMinistry of Economic Affairs
38. Assessment of personal protective equipment types, quality
certification; assessment of machinery and equipment typesNational Labour Inspection
Board
39. Logopedical aid Ministry of Social Affairs
40. Conservation, restoration, creating of repairs projects, and
carrying out the corresponding activities on the objects of
cultural importance (the objects of archaeological,architectural, technological, and historical value, objects of
fine arts)Ministry of Culture
41. Classification of goods and measuring of goods for customs'
purposesMinistry of Finance
42. Commercial mediation of scrap metal and metal waste Ministry of Economic Affairs
43. Importation of food stuffs Ministry of AgricultureWT/ACC/EST/28
Page 44
APPENDIX
ACCESSION OF ESTONIA
Draft Decision
The General Council,Having regard to the results of the negotiati ons directed towards the establishment of the
terms of accession of the Republic of Estonia to the Marrakesh Agreement Establishing the World
Trade Organization and having prepared a Protocol for the Accession of Estonia,
Decides, in accordance with Article XII of the Marrakesh Agreement Establishing the World
Trade Organization, that the Republic of Estonia may accede to the Marrakesh Agreement
Establishing the World Trade Organization on the terms set out in the said Protocol.WT/ACC/EST/28
Page 45
PROTOCOL OF ACCESSION OF ESTONIA
TO THE MARRAKESH AGREEMENT ESTABLISHING THE
WORLD TRADE ORGANIZATION
Draft
The World Trade Organization (hereinafter referred to as the "WTO"), pursuant to the
approval of the General Council of the WTO accorded under Article XII of the Marrakesh Agreement
Establishing the World Trade Organization (hereinafter referred to as "WTO Agreement"), and the
Republic of Estonia (hereinafter referred to as "Estonia"),
Taking note of the Report of the Working Party on the Accession of Estonia to the WTO in
document WT/ACC/EST/28 (hereinafter referred to as the "Working Party Report"),
Having regard to the results of the negotiations on the accession of Estonia to the WTO,
Agree as follows:
Part I - General
1. Upon entry into force of this Protocol, Estonia accedes to the WTO Agreement pursuant to
Article XII of that Agreement and thereby becomes a Member of the WTO.
2. The WTO Agreement to which Estonia accedes shall be the WTO Agreement as rectified,
amended or otherwise modified by such legal instru ments as may have entered into force before the
date of entry into force of this Protocol.  This Protocol, which shall include the commitments referredto in paragraph 141 of the Working Party Report, shall be an integral part of the WTO Agreement.
3. Except as otherwise provided for in the para graphs referred to in paragraph 141 of the
Working Party Report, those obligations in the Mu ltilateral Trade Agreements annexed to the WTO
Agreement that are to be implemented over a period of time starting with the entry into force of that
Agreement shall be implemented by Estonia as if it had accepted that Agreement on the date of its
entry into force.
4. Estonia may maintain a measure inconsistent with paragraph 1 of Article II of the GATS
provided that such a measure is recorded in the list of Article II Exemptions annexed to this Protocol
and meets the conditions of the Annex to the GATS on Article II Exemptions.
Part II - Schedules
5. The Schedules annexed to this Protocol shall become the schedule of Concessions and
Commitments annexed to the General Agreement on Tariffs and Trade 1994 (hereinafter referred to
as the "GATT 1994") and the Schedule of Specific Commitments annexed to the General Agreementon Trade in Services (hereinafter referred to as "GATS") relating to Estonia.  The staging of
concessions and commitments listed in the Schedules shall be implemented as specified in the
relevant parts of the respective Schedules.
6. For the purpose of the reference in paragraph 6(a) of Article II of the GATT 1994 to the date
of that Agreement, the applicable date in respect of the Schedules of Concessions and Commitments
annexed to this Protocol shall be the date of entry into force of this Protocol.WT/ACC/EST/28
Page 46
Part III - Final Provisions
7. This Protocol shall be open for acceptance, by signature or otherwise, by Estonia until
31 October 1999.
8. This Protocol shall enter into force on the thirtieth day following the day of its acceptance.
9. This Protocol shall be deposited with the Director-General of the WTO.  The Director-
General of the WTO shall promptly furnish a certified copy of this Protocol and a notification of
acceptance thereto pursuant to paragraph 7 to each member of the WTO and Estonia.
10. This Protocol shall be registered in accordance with the provisions of Article 102 of the
Charter of the United Nations.
Done at Geneva this ... day of  .... one thousa nd nine hundred and ninety nine, in a single copy
in the English, French and Spanish languages each text being authentic, except that a Scheduleannexed hereto may specify that it is authentic in only one or more of these languages.WT/ACC/EST/28
Page 47
ANNEX
SCHEDULE – REPUBLIC OF ESTONIA
Part I - Goods
[Circulated in documen t WT/ACC//EST/28/Add.1]
Part II - Services
[Circulated in documen t WT/ACC/EST/28/Add.2]
__________