WT/REG245/R/I  
 
13 July 2015  
(15-3592) Page: 1/7  
Committee on Regional Trade Agreements  Original: English  
 
 UKRAINE-AZERBAIJAN IMPLEMENTATION REPORT  
 This Implementation Report has been draf ted in accordance with Article 15 of the 
Transparency Mechanism Decision and following the draft guidelines contained in JOB/REG/4 
issued in January 2013. 
  This report does not prejudge the Parties' po sition on the concept and the duration of the 
implementation periods in FTAs and their relationship to the "reasonable length of time" within the 
meaning of Art. XXIV:5(c) of the GATT 1994 or "the reasonable time-frame" within Art. V:1(b) of the GATS.  
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1  BACKGROUND INFORMATION ON THE AGREEMENT 
1.1.  The Free Trade Agreement between the Cabi net of Ministers of Ukraine and the Government 
of the Azerbaijani Republic was signed on 28 Ju ly 1995 and entered into force since 2 September 
1996. 
1.2.  The Agreement covers trade in goods and is based on Article XXIV of GATT. 
1.3.  Statistical data on trade in goods between the Parties as well as some indications on Parties' 
import coverage after full implementation of th e FTA can be found in Annex 1 of this report.  
2  PROVISIONS ON TRADE IN GOODS 2.1  Import duties and charges,  and quantitative restrictions 
2.1.  No import tariffs, or taxes and charges of equivalent effect, should be applied by Parties in 
bilateral merchandise trade. 
2.2.  Parties committed not to impose on imports from another Party domestic taxes and charges 
higher than those imposed on domestic goods or imports from the third countries.  
2.3.  Rules for transportation, storage and payments for goods originating in another Party should 
not differ from those applied for goods from the third countries. 
2.4.  Parties should avoid introduction of quanti tative restrictions in mutual trade. However, 
quantitative restrictions could be imposed unilaterally on a temporary basis in the following cases: 
 significant shortage of a good in the domestic market – until stabilization in the 
domestic market; 
 significant deficit of balance of payments – until stabilization of balance of payments; 
 huge expansion of imports into the Party's market, which damage or threaten 
domestic producers of similar goods or close substitutes; 
 as it is regulated by the Agreement on re-exports of goods and the procedure for 
issuing permits for re-exports. WT/REG245/R/I 
 
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  2.5.   Party introducing quantitative restrictions should, if possible, beforehand provide another 
Party with full information on the main reasons, forms and expected period of restrictions; afterwards, consultations should begin.  
2.1.1  Tariffs 
2.6.  Duty-free trade regime is applied for all goods. 
2.1.2  Tariff quotas 2.7.  No tariff quotas are applied. 
2.1.3  Products excluded from liberalization 
2.8.  Issued exemptions from duty-free trade regime  for agreed list of goods should be an integral 
part of the Agreement. So far, no exemptions were applied. 
2.9.  Principle of reciprocity is not envisaged in the text of Agreement. 
2.1.4  Final tariff schedule applied by RTA parties 
2.10.  Duty-free trade is implemented over the entire tariff schedule. 2.2  Export duties and charges,  and quantitative restrictions 
2.11.  No export duties, or taxes and charges of eq uivalent effect, should be applied by Parties in 
bilateral merchandise trade. 
2.12.  No quantitative restrictions on exports should be applied in mutual trade except for 
situations provided in paragraph 2.4. 
2.13.  For exports of selected grains, mostly wheat and maize, since 2012 voluntary export 
restrictions have been applied. Each marketing year the Ministry of Agriculture and Food and exporters sign Memoranda of Understanding spec ifying the consensus amounts of agricultural 
exports.  
2.3  Regulatory provisions on trade in goods 2.3.1  Rules of origin  
2.14.  Initially, rules of origin in bilateral trade were regulated by Rules of Origin of Goods dated 
24 September 1993, signed by the representative s of the Commonwealth of Independent states 
(CIS) members and applied in CIS trade.
1 
2.15.  However, because of plurilateral free trade negotiations within the CIS, the contractual 
framework on rules of origin has changed a few times.  
2.16.  After the conclusion of the CIS FTA-1994, updated Rules of Origin of Goods were passed on 
30 November 2000.2 In 2009 an Agreement on Rules of Origin of Goods in the CIS3 was signed. It 
was ratified on 7 July 2011, and came into force for Ukraine on 14 September 2011.  
2.17.  No special references on WTO legal documents are included in rules of origin applied in 
Ukraine-Azerbaijan bilateral trade.  
                                               
1 http://zakon4.rada.gov.ua/laws/show/997_055 . 
2 http://zakon4.rada.gov.ua/laws/show/997_484 . 
3 http://zakon4.rada.gov.ua/laws/show/997_m65 . WT/REG245/R/I 
 
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  2.3.2  Non-tariff barriers 
2.18.  No specific commitments regarding standards, technical regulations and conformity 
assessment are included in the Agreement. 
2.3.3  Sanitary and phytosanitary measures 
2.19.  No specific commitments regarding sanitary and phytosanitary measures are included in the 
Agreement.  
2.3.4  Trade defence instruments 
2.20.  No specific commitments are included in the Agreement.  
2.21.  Analysis of Ukraine's trade defense instruments application shows that Azerbaijan products 
were subject to four safeguard measures applied by Ukraine irrespective of the country of origin. More specifically, Azerbaijan metal and machinery products were subject to safeguard measures. 
3  PROVISIONS ON TRADE IN SERVICES 
3.1  Commitments 3.1.  The Agreement does not contain any specific commitments on trade in services. 
4  OTHER PROVISIONS IN THE AGREEMENT  
4.1  Export control 4.1.  Parties agreed to coordinate policy on export control regarding third countries. In order to 
maintain such cooperation, an effective system of export control should be created by facilitating 
regular consultations and mutually agreed measures. Ukrainian and Azerbaijani customs use the GUAM (Organization for Democracy and Economic Development) as a platform of cooperation.  
4.2  Transit 
4.2.  Free transit principle is an important precon dition for implementation of the Agreement. Both 
Parties committed to ensure free transit of goods originating from the customs territory of another Party or third countries. Also, free movement of goods shipped to another Party or any third 
country should be guaranteed. 
4.3.  Exceptions from commitments on transit include goods whose import are banned or require a 
special permit according to national legislation.  
4.4.  Party should provide another Party's exporters, importers and shippers (transport operators) 
with most-favored nation (conditions not worse that for those from third countries) as well as national (conditions not worse than for corresponding national agents) regimes. 
4.5.  Procedures and conditions of transit are regulated according to international rules.  
4.3  Re-exports 
4.6.  Re-exports-related issues are regulated according to the Agreement on re-exports of goods 
and the procedure for issuing permits for re-exports of 15 April 1994. Re-exports here is defined 
as exports of goods originating in and imported from another Party to third countries, which are 
not the signatories of the Agreement on Re-Exports.  
4.7.  Only approved re-exports is allowed. Part ies have to exchange their lists of goods, which 
require specials permits for re-exports. Goods within this list could be re-exported only in case if a 
special permit was issued by a competent body. WT/REG245/R/I 
 
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  4.8.  However, this Agreement didn't come into force.  
4.4  Trade and competition 4.9.  Unfair business practices are recognized as those which contradict the Agreement. These 
unfair business practices include those, which aim at hindering or restricting competition in the 
Parties markets, as well as using market power.  
4.5  Common classification  4.10.  Initially, for the purposes of tariff and non-tariff measures, customs operations as well as 
exchange of statistics Parties committed to use 9-digit commodity nomenclature based on the 
Harmonized Commodity Description and Coding System. 
4.11.  This 9-digit commodity nomenclature wa s regulated by the Agreement on the Single 
Commodity Nomenclature of Foreign Economic Activity of the CIS dated 3 November 1995.  
4.12.  The most recent commodity classification used by Ukraine and Azerbaijan is based on the 
2012 edition of the Harmonized System Nomenc lature by the World Customs Organization 
(HS classification). 
4.6  Economic cooperation and capacity building 
4.6.1  Information exchange 4.13.  The competent authorities of the Parties agreed to establish a mechanism of information 
exchange. Changes in national legislation, whic h can affect implementation of the Agreement, 
should be immediately provided to another Party. Regular exchange should be maintained for legislation on economic activity (including issues related to trade, investments, taxation, banking, insurance and other financial services), transportation and customs (including customs statistics). 
Such information exchange occurs through officials, ministries of economy and international 
relations, relevant state services, Joint Intergovernmental Ukrainian-Azerbaijani Commission on Economic Cooperation, international organizations. 
4.6.2  Joint commission 
4.14.  Parties agreed to establish a joint Ukrainian-Azerbaijani commission in order to monitor the 
realization of the Agreement and work on impr ovement of trade and economic cooperation. 
4.15.  Joint Intergovernmental Ukrainian-Azerbaijani Commission on Economic Cooperation was 
established on 28 July 1995, according to Articl e 13 of Ukraine-Azerbaijan FTA agreement.  
4.16.  As of the first quarter of 2015, ten Commission meetings occurred: the first one – on 
22 April 1997, the most recent one – on 14 November 2013.  
4.17.  Issues discussed during Commission meetin gs include evaluation of bilateral economic 
cooperation programs, revision of current state and perspectives of trade and economic cooperation, policy advice on bilateral cooperation, including energy, SMEs, transports, 
humanitarian sphere, aircraft, agriculture.  
4.18.  Also Commission works on development of  further agreements. For example, agreement on 
competition policy cooperation and memorandum on  business regulation were developed by the 
Commission and signed by the Parties.  
4.7  Protection of legitimate objectives 4.19.  Agreement allows Parties to apply measures commonly acceptable by international practice 
in order to protect their legitimate objectives or implement their commitments according to their 
international agreements. WT/REG245/R/I 
 
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  4.20.  Other cases which allow Parties to implement defence measures include: information that 
affects national defence; trade in arms; defe nce-related R&D; trade in raw materials and 
equipment used in nuclear industry; protection of public morality and order; protection of 
industrial and intellectual property; gold, silver and other precious metals and stones; protection 
of human, animals and plant health.  
4.8  Dispute settlement  4.21.  Parties declare the intention to avoid disputes in mutual trade. If needed, disputes on 
interpretation and implementation of Agreement's pr ovisions should be settled with consultations. 
Every Party ensures effective mechanism for recognition and implementation of arbitration awards in its territory. 
 
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 WT/REG245/R/I 
 
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  ANNEX 1 
STATISTICS ON TRADE IN GOODS 
Table A1.1 Ukraine: Imports fr om Azerbaijan (US$ million)  
Year Total Agricultural products* Non-agricultural products* 
1996 30.8 2.1 28.7 
1997 47.0 4.6 42.4 
1998 27.7 2.3 25.4 
1999 33.8 3.0 30.8 
2000 23.8 3.9 19.9 
2001 8.1 2.9 5.2 
2002 5.3 3.2 2.0 
2003 8.4 4.7 3.6 
2004 8.9 3.5 5.4 
2005 27.8 11.9 15.9 
2006 41.0 11.6 29.4 
2007 31.1 7.3 23.8 
2008 75.7 13.5 62.2 
2009 282.8 10.7 272.1 
2010 951.2 12.8 938.4 
2011 643.3 11.5 631.8 
2012 79.7 25.3 54.4 
2013 77.8 29.9 47.8 
2014 43.7 8.5 35.2 
*WTO definition. 
Source: UN ComTrade.  
Table A1.2  Azerbaijan: Import s from Ukraine (US$ million)  
Year Total Agricultural products* Non-agricultural products* 
1996 94.4 53.4 41.0 
1997 85.6 23.1 62.5 
1998 93.0 15.6 77.4 
1999 38.4 12.6 25.9 
2000 35.8 6.4 29.4 
2001 39.3 5.7 33.4 
2002 80.0 24.2 55.6 
2003 118.8 36.9 82.3 
2004 170.4 37.0 133.8 
2005 226.3 36.4 190.5 
2006 317.5 51.6 265.2 
2007 465.6 76.8 375.0 
2008 567.2 130.9 433.6 
2009 511.7 103.6 398.1 
2010 465.6 119.6 346.3 
2011 557.8 138.1 420.4 
2012 539.1 111.3 429.7 
2013 605.4 181.6 426.5 
2014 419.6 217.6 202.4 
*WTO definition. 
Source: UN ComTrade.  WT/REG245/R/I 
 
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  Table A1.3 Ukraine import coverage afte r full implementation of the Agreement 
Coverage 1996 1997 2013 2014 
% of tariff lines 100 100 100 100 
% of imports 100 100 100 100 
Note: 
Line coverage (% tariff lines) is calculated as duty-free quota-free Ukraine's tariff lines on imports 
from Azerbaijan divided by total Ukraine's tariff lines on imports from Azerbaijan. 
Trade coverage (% imports) is calculated as  duty-free quota-free Ukraine's imports from 
Azerbaijan divided by total Ukraine's imports from Azerbaijan. 
For calculation of the coverage rates the preferential tariffs in force on 1 January of the indicated 
years has been used. 
Source: Ukraine-Azerbaijan FTA. 
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