WORLD TRADE ORGANIZATION  
ORGANISATION MONDIALE DU COMMERCE  
ORGANIZACIÓN MUNDIAL DEL COMERCIO WT/TPR/M/224/Add.1 
8 February 2010 
 (10-0673) 
Trade Policy Review Body 
8 and 10 December 2009 Original: English/ 
 anglais/  inglés 
 
TRADE POLICY REVIEW 
GEORGIA 
Record of Meeting
 
Addendum  
Chairperson:  H.E. Dr. István Major (Hungary) 
 This document contains the advance writte n questions, and replies provided by Georgia.1 
__________________________________________________________________________________  
Organe d'examen des politiques commerciales 
8 et 10 décembre 2009 
 
EXAMEN DES POLITIQUES COMMERCIALES 
GEORGIE 
Compte rendu de la réunion
 
Addendum  
Président:  S.E. Dr. István Major (Hongrie) 
 
 Le présent document contient les questions écrites communiquées à l'avance et les réponses fournies par la Georgie.
1 
__________________________________________________________________________________ 
 
Órgano de Examen de las Políticas Comerciales 
8 y 10 de diciembre de 2009  
EXAMEN DE LAS POLÍTICAS COMERCIALES 
GEORGIA 
Acta de la reunión
 
Addendum  
Presidente:  Excmo. Dr. István Major (Hungaría) 
 
 En el presente documento figuran las pr eguntas presentadas anticipadamente por escrito, 
junto con las respuestas facilitadas por Georgia.1
                                                      
1 In English only./En anglais seulement./En inglés solamente. WT/TPR/M/224/Add.1 
Page 3 
 
 
  REPLIES PROVIDED BY GEORGIA 
 
CANADA – QUESTIONS 
Report by the Government of Georgia (WT/TPR/G/224 ) 
 
Part III. Trade Policy Objectives and Developmen t: (3.2) Trade Agreements and Arrangements; 
(a) World Trade Organization: paragraph 44, page 11  The report notes that Georgia is ready to join the Agreement on Government Procurement (GPA) in 
the near future.  
 
1.  Could Georgia please indicate  when it plans to begin the process of accession to the GPA? 
 
Response
 
 Currently, Georgia is fundamentally reforming the state procurement legislation by abolishing paper-
based procurement procedures and introducing elect ronic government procurement from September 1, 
2010. Therefore, after the full revision of proc urement system, GoG will provide additional 
information regarding its decision on accession to the GPA.  
 
Report by the Secretariat (WT/TPR/S/224
) 
 
Part I. Economic Environment: (3) Main  Economic Developments; (i) Macroeconomic 
performance: paragraph 19, page 7:  and,   Part I. Economic Environment: (3) Main Econom ic Developments; (iv) Structural Reforms and 
Private-Sector Development: paragraph 29, page 10  
 The report states that the August 2008 conflict and th e on-going global economic crisis continue to 
cast a shadow over Georgia's growth prospects.  Further on, it notes that since 2004 Georgia has 
implemented a policy of wide-ranging economic refor m to foster economic growth through private-
sector investment.   
 
2. Could Georgia please clarify whether the pace of the reform process would be impacted by 
the negative economic growth and the current political uncertainty? 
 Response
 
 Throughout the last years Government of Geor gia (GoG) implemented br oad and comprehensive 
reforms including economic reforms that touched every aspect of the country’s life.   Based on the above-mentioned reforms, Georgian  economy has been diversified showing more 
resilience to new challenges. Despite the global fina ncial crisis and August conflict in Georgia, in 
2008, country’s Gross Domestic Product (GDP) growth amounted to 2.3%.  
 It is, notable, that in IIQ of 2009 GDP growth comp ared to IQ amounted to 11%. This tendency shows 
that Georgian economy is more resilient to ne w challenges. For 2010 2% economic growth is 
estimated.    
 Georgia’s progress in international ratings proves on country’s commitment for further streamlined policy of reformation process. In 2009 Fitch moved Ge orgia one step up and gave country stable long 
term outlook instead of previous negative (which  was given after August conflict with Russia).  WT/TPR/M/224/Add.1 
Page 4  
 
 The World Bank Doing Business (for 2010) moved Georgia on 11
th place instead of 15th in 2009. This 
means that business environment is favorable and institutional barriers for business activities are 
further minimizing.    According to Transparency International Corruptio n Perception Index 2009 Georgia is on 66-th place, 
instead of 67-th in 2008. This means, that Georgia continues its policy against corruption.  
 Moreover, main directions for maintenance of resu lts achieved and insurance irreversibility of reforms 
was attracted in new initiative of the Government of  Georgia – "Liberty Act" – based on principles of 
economic liberty, opportunities and dignity. The major aim of the act is to provide the stability of the 
implemented reforms, strengthen free market ec onomy in Georgia through democratic, transparent 
and predictable governance coupled with social res ponsibility and coherence. Act is focused on stable 
future development of the country in order to set the Georgia’s economy free from burdening 
regulations despite of the governmental changes.   
In addition to abovementioned, Go G continues reforms in the frame work of preparation process for 
future DCFTA with the EU.  All above-mentioned means, that Georgia’s refo rm process was not impacted by the negative 
economic growth (in 2009) and the current political s ituation, but it became as a stimulus for further 
extension of reformation policy.  Part III. Trade Policies and Practices by Measu re: (2) Measures Directly Affecting Imports; 
(vi) Government procuremen t: paragraph 37, page 44 
 The report states that emergency provisions for so le sourcing are applied widely and that the World 
Bank estimates that more than 50% of all signed co ntracts are single sourced. The report then notes 
that this situation may be changing.    3.  Could Georgia please provide more information on the measures it has taken to ensure that 
government procurement is conducte d in an open, competitive manner? 
 
Response
 
 
Unfortunately, World Bank estimations do not correspond to the reality. According to State 
Procurement Agency (SPA), the share of single source procurement in the total amount of the signed contracts is 21%, which is largely caused by emer gency situations resulting from Russian invasion 
and subsequent global financial crisis. It should be also mentioned, that this indicator represents the 
number of procurement contracts and not the vol ume. If expressed in money amount, the biggest 
share of public procurement falls on tenders and not on the single source procurement. 
 Government of Georgia made a firm decision to fu rther improve the situation in state procurement. 
Currently, procurement legislation of Georgia is undergoing fundamental reforms that aim at 
introduction of electronic procurement system from March 1, 2010 and subseq uent abolition of paper-
based procurement procedures from September 1,  2010. According to the amended Law on State 
Procurement (the amendments were adopted by th e Parliament of Georgia on November 19, 2009 at 
the third reading and will enter into force at the mid of December 2009), single source procurement as 
a method of procurement will be abolished from Se ptember 1, 2010 and will be substituted by a 
simplified electronic tender that will ensure much  more competitiveness and transparency of state 
procurement procedures. 
  WT/TPR/M/224/Add.1 
 Page 5 
 
 
  Part III. Trade Policies and Practices by Measu re: (2) Measures Directly Affecting Imports; 
(v) Standards and SPS requirements; paragraph 72, page 52  The report states that Georgia acknowledges the st andards of 36 countries, whose products may enter 
the Georgian market without any further conform ity assessment or legalization procedures.   
 
4. Could Georgia please specify which countries’ products enter the Georgian market without 
any further conformity assessment or legaliz ation procedures, and could Georgia explain 
what criteria were used in selecting these countries? 
 
Response
 
 
Government of Georgia (GoG) enacted the resolution #45 of February 24, 2006 "On 
Acknowledgment of Technical Regulations of Other Countries in Georgia and Rule of Application 
thereof". According to this resolution parts and re quirements of documents of  technical regulation of 
European Union and OECD member-countries concer ning mandatory parameters ensuring products 
safety are being recognized. The main criteria were the existence of developed and recognized quality 
infrastructure in those countries.   In particular, New and Global Approach Europ ean Directives, European norms, international 
normative acts and documents of technical regulations  harmonized with them, documents in force in 
the filed of technical regulation of 36 countries are acknowledged in Georgia; only requirement is that 
they should be registered in the register  of standards and technical regulations.  
 As provided under Article 2.7 of TBT agreement,  Georgia understands the importance of giving 
positive consideration to accepting as equivalent tec hnical regulations of other Members. Moreover 
the equivalency can be an element of good regulator y practice and is also relevant to conformity 
assessment as foreseen under Article 6.1 of TBT agreement in respect of transparency and non-
discrimination requirements.  The list of the countries is provided in Annex 1.  Part III. Trade Policies and Practices by Measu re: (2) Measures Directly Affecting Imports; 
(v) Standards and SPS requirements; paragraph 75, page 52  According to the report, under the 2005 reform, Ge orgia established a "national system for approving 
competence of conformity assessment bodies".     
 
5.  Could Georgia elaborate on the nature of this  national system and how the competence of 
conformity assessment bodies is approved?  
 
Response
 
 
Legal Entity of Public Law "Georgian National A ccreditation Body - Accreditation Centre" (GAC) 
was established in 2005 on the basis of Georgian La w on Certification of Products and Services, for 
implementation of accreditation in the field of conformity assessment. GAC independently carries out its activities and is under the state supervision of the Ministry of Economic Development.  
 
GAC carries out accreditation and surveillance in the field of testing, calibration, verification and 
certification. GAC implements accreditation in both vo luntary and mandatory fi elds. To ensure these 
activities, GAC:  WT/TPR/M/224/Add.1 
Page 6  
 
 - maintains and develops Georgian National A ccreditation System, ensuring that it complies 
with the international principles of conformity assessment and accreditation; 
- operates actively to achieve recognition on in ternational level of its accreditation activities; 
- acts to ensure that the Georgian  National Accreditation System is organised in accordance 
with all relevant requirement s and the economic expediency; 
- makes publicly available the accreditation crite ria, the GAC guidance and other relevant 
documents on accreditation requirements and pro cedures and all other re quired information; 
- carries out assessment and surveillance of CABs  operating either in voluntary or mandatory 
area; 
- keeps up-to-date the database of its accredited CABs and makes it publicly available; 
- regularly issues surveys about its activities; 
- develops special training service, in particular  for technical and lead assessors, to ensure that 
measurement, testing, certification and inspection as well as accreditation assessments are carried out on an exquisite a nd internationally required level; 
- shall avoid offering or providing any service th at could harm its impartiality, such as the 
conformity assessment services provided by  the accredited bodies and consultancy. 
 GAC follows ISO/IEC 17001 requirements and provi des accreditation work according to following 
normative acts:  - For Laboratories: 
 - ISO/IEC 17025:2006 "General requirements for the competence of testing and 
calibration laboratories"; 
 - Guide: Technical regulation of accred itation center:" General requirements for 
accreditation of laboratories – "GAC 1.2:  2006" (Guide for using standard SST 
ISO/IEC 17025:2006). 
- For certification bodies certifying products:  
 - EN 45011 : 2006 – "General requirements for bodies operating product certification 
systems" 
 - Guide: Technical  regulation of  accreditation system" general requirements for 
accreditation of  conformity assessment bodies (certification bodies ) –"GAC 1.3: 2006"(Guide for using standards SST EN 45011:2006). 
- For the quality system’s certification bodies: 
 - EN 45012:2006 "General requireme nts for bodies operating assessment and 
certification/registration of quality systems". 
- For bodies performing certification of persons: 
 - ISO IEC – 17024: 2006 – "Conformity assessment -- General requirements for bodies 
operating certification of persons".  
- For testing centers providing testing of motor transport for its validity on roads: 
 - Technical regulation - "Requirements to testing centers which provides vehicles 
roadworthiness testing". 
 
GAC executes surveillance on accred ited entity, according to technical regulations GAC 1.4: 2006 
"Rule on conducting surveillance and superv ision on accredited  entity’s activates"; 
 GAC maintains register of accreditation system acco rding to the technical regulation GAC 1.5: 2006 
"register rules on accredited legal and physical entities, participants of accreditation system and 
accreditation requirements containing documents". 
 
Since 2006 accreditation centre has accredited:  - testing laboratories – 99; - calibration laboratories – 4;  WT/TPR/M/224/Add.1 
 Page 7 
 
 
  - verification laboratories – 8; 
- product certification bodies – 13; - personal certification body – 1; - car inspection centres – 23.  Part III. Trade Policies and Practices by Measu re: (2) Measures Directly Affecting Imports; 
(v) Standards and SPS requirements; paragraph 77, page 53  The report notes that the Georgian National Agency for Standards, Technical Regulations and 
Metrology (GEOSTM), became a corresponding me mber of ISO (International Standardization 
Organization) in 2006, and an associate member of CEN (European Committee for Standardization) 
in 2008.      6.  Does GEOSTM also have plans to seek membe rship in the International Electrotechnical 
Committee (IEC), and the European Committe e for Electrotechnical Standardization 
(CENELEC)? 
 Response
 
 
Communication with IEC is established, Georgian  National Agency for Standards, Technical 
Regulations and Metrology (GEOSTM) created Technical Committee on Electrotechnical issues. 
Application regarding becoming a member of IEC submitted by GEOSTM, representatives of 
GEOSTM participated in 73rd IEC general meeting on 16-22 October held in Tel-Aviv Israel, where 
the issues of membership were discussed.   Membership in CENELEC is possible after becoming a member of International Electrotechnical 
Committee (IEC). Georgia intends to become a memb er of European Committee for Electrotechnical 
Standardization (CENELEC) as well, as the energy sector  is one of the priority fields for the country. 
 
Part III. Trade Policies by Measure: (4) Me asures Directly Affecting Production and Trade, 
(v) Standards and SPS requirements; paragraph 77, page 53  
Canada applauds efforts by Georgia to meet its WT O obligations and align its standardization system 
to international practice though legislative reforms . Canada further notes that the Secretariat’s report 
states that GEOSTM is "responsible for the WTO TBT enquiry point." In reviewing Georgia’s notifications, Canada noticed an overall low level of notifications since 2005.     
7. Could Georgia advise or elaborate on the systems or methods it is puttin g in place to enhance 
compliance with the WTO TBT transparency obligations: in particular, notification of a draft measure when comments can s till be taken into account? 
Response
 
 
For enhancing and refining the process of elaboration and further notification of technical regulations 
and ensuring fulfillment of transparency oblig ations under WTO TBT, Governmental decree #170 
(18.09.09) has been issued laying down the rules of  notification on standards, technical regulations, 
conformity assessment procedures and drafts thereo f. According to the mentioned decree, GEOSTM 
will carry out functions of WTO TBT enquiry point. All drafts of elaborated technical regulations 
should be submitted to enquiry point for analyses on compliance with the international standards and 
in case of non-compliances respective corrections shoul d be carried out or justifications for such 
differences provided, before adoption thereof.  
 WT/TPR/M/224/Add.1 
Page 8  
 
 Part III. Trade Policies by Measure: (4) Me asures Directly Affecting Production and Trade, 
(v) Standards and SPS requirements; paragraph 81, page 54  According to the report, Georgia "effectively has  no legislation governing food safety because of 
institutional incapacity and the food industry itself is  either incapable of or has no incentive to adhere 
to it."     
 8. When does Georgia foresee an improvement in this situation? 
 
Response
 
 
Regarding the concern, that Georgia "effectively has no legislation governing food safety", it should 
be mentioned that, only some provisions (inspec tions, traceability, registration of food business 
operators) of the Law on Food Safe ty and Quality are suspended a nd not the whole legislation. 
Accordingly, Law on Food Safety and Quality is not suspended fully and the rest of the issues 
covered by the Law are implemented (for ex ample: taking samples, monitoring, etc).  
 The aim of Government of Georgia (GoG) as dem onstrated in Comprehensive Strategy in Food 
Safety is to further develop le gal and institutional framework in the food safety sector and implement 
suspended food safety legislation in  line with the EU and internati onal standards. Implementation of 
existing food safety legislation will start in 2010. Implementation of the suspended provisions of the 
Law on Food Safety and Quality will be carried out gradually.  
 As for the concern related to the institutional incap acity, number of steps is being provided. With the 
support of GEPLAC, trainings for public officials involved in the preparation process for negotiation 
on the DCFTA were initiated. The purpose of these trainings was facilitation of better understanding 
of the main points of the SPS chapter of DCFTA  and reaching of the appropriate knowledge and 
competence. Further TAIEX joint trainings for the Ministry of Agriculture, the National Service and 
customs officials providing food safety checks at th e border have been requested by Georgia.   
 To ensure the strengthening of capacity building,  the Government of Georgia (GoG) and SIDA are 
working on special training programs, which will  be continued during one year starting from 
1
st quarter of 2010.  The aim of the above-mentioned training programs is to raise the awareness of 
public officials and facilitate better understanding of  the main points of the EU legislation on food 
safety issues.   IFC, a member of the World Bank Group will provide  Food Safety Improvement Project in Georgia 
during the next 3 years. Target group of the programs will be food processing enterprises. The goal of 
the project is to increase the competitiveness of Georgian food producers by improving their food 
safety practice and arising their awareness on Food Safety Management Systems. The project will achieve this goal by the pursing the following objectives: 
- Facilitating access to markets for Georgian food processors by increasing awareness of food 
safety issues.  
- Piloting implementation of food safety management systems. 
 The GoG will organize donors’ roundtable to ensure  donor coordination on technical assistance issues 
before the end of 2009.  
  WT/TPR/M/224/Add.1 
 Page 9 
 
 
  Part III. Trade Policies by Measure: (4) Me asures Directly Affecting Production and Trade, 
(v) Standards and SPS requirements; paragraph 83, page 54  Could Georgia please elaborate on its SPS tr ansparency activities. In particular:      
 
9. Could Georgia specify how the authorities (e.g. WTO SPS Enquiry Point/Notification 
Authority) monitor the creation or modification of  SPS measures from the various institutions 
within the National Service (NS) of Food Safety, Veterinary and Plant Protection in order to determine those to notify to the WTO?   
 
10. Canada notes that Georgia has not issued any SPS notifications since 2004.  Could Georgia 
elaborate on systems/methods it is putting in  place to overcome past challenges with 
compliance to WTO SPS transparency obligatio ns, in particular notification of a draft 
measure when comments can s till be taken into account? 
 
Response
 
 
Starting from 2010, WTO SPS Enquiry Point will be estab lished within the Ministry of Agriculture of 
Georgia to ensure the timely notification on creation or modification of SPS measures to the WTO. 
 
Annex #1 
# 45 Government Resolutions of February 24, 2006  
# COUNTRY CODE 
1 Australia 036 
2 Austria 040 
3 New Zealand 554 
4 USA 840 
5 Belgium 056 
6 United Kingdom and North Ireland  826 
7 Germany 276 
8 Denmark 208 
9 Spain 724 
10 Estonia 233 
11 Iceland 352 
12 Ireland 372 
13 Italy 380 
14 Japan 392 
15 Cyprus 196 
16 Canada 124 
17 Korea  410 
18 Latvia 428 
19 Lithuania 440 
20 Luxemburg 442 
21 Malta 470 
22 Mexico 484 
23 The Netherlands 528 
24 Norway 578 
25 Poland 616 
26 Portugal 620 
27 Greece 300 
28 France 250 
29 Slovakia 703 
30 Slovenia 705 
31 Hungary 348 
32 Czech 203 
33 Finland 246 
34 Sweden 752 
35 Switzerland 756 
36 Israel 376 WT/TPR/M/224/Add.1 
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 CANADA – FOLLOW-UP QUESTIONS 
 Canada notes that, in its protocol of accession to the WTO, Georgia committed to initiating negotiations for membership in the Agreement on Government Procurement upon accession to the 
WTO and, if the results of the negotiations were satis factory to the interests of Georgia and the other 
members of the Agreement, to completing nego tiations for membership in the Agreement by 
31 December 2000. Please explain why it is necessa ry to complete Georgia's domestic procurement  
reforms prior to beginning the process of accession to the GPA.  
 
Response
 
 As it was mentioned in the previous response, currently, procurement system of Georgia is 
undergoing fundamental reforms. The amended Law on State Procurement has already been adopted 
by the Parliament and published on December 7, 2009. This amended law introduces electronic 
procurement system from March 1, 2010 and s ubsequent complete abolition of paper-based 
procurement procedures from September 1, 2010.  
 With this reform, Government of Georgia (GoG) introduces a common electronic system of state procurement in order to: a) decrease the time of procurement procedures; b) increase transparency of procurement procedures; c) simplify and make mo nitoring system of procurement process more 
effective; d) establish procurement data collection system; e) eliminate problems connected with 
territorial distance between bidders and suppliers ; f) make the information on procurement easily 
accessible for local as well as foreign suppliers; g)  increase competitiveness and rational spending of 
budgetary funds for state procurement; h) define  accountability of officials  involved  to the 
procurement decisions.  
Based on the abovementioned, reformed Georgian  procurement system was approximated with 
international standards.  Currently, GoG undertakes comparative analysis of national legislation on public procurement and 
GPA. As the analysis revealed so far, in a numbe r of areas (e.g. types of tendering procedures, time-
limits for tendering, etc.), Georgian national legislation introduces more modern mechanisms of 
procurement compared with GPA. 
 Due to abovementioned, the date of application in the GPA will be de termined after the finalization of 
the comparative analysis.    TURKEY – QUESTIONS  Report by the Secretariat (WT/TPR/S/224
)  
 (II) TRADE POLICY REGIME, (4) Main Trade Agreements and Arrangements, (iii) European 
Union, para. 45, p. 29 
 
Could the Government of Georgia provide an update on the developments regarding the conclusion of 
a free trade area (DCFTA) with the EU? 
 
Response
 
 Based on the recommendations of the Europ ean Commission, GoG decided to prepare 
Comprehensive Strategies in the following areas: SPS, competition and TBT. In the beginning of 
September, the draft strategies were sent for co mments to the EC. The EC sent the GoG comments on 
the above-mentioned draft strategies. It should be  emphasized, that expert meetings between  WT/TPR/M/224/Add.1 
 Page 11 
 
 
  Commission services and Georgian Authorities on Food Safety, Competition and TBT issues were 
held during November, 2009. The aim of meetings wa s discussion and examination of draft strategies 
in food safety, competition and TBT in a more detailed manner.  
 
(III) TRADE POLICIES AND PRACTICES BY MEASURE, (i) Measures Directly Affecting 
Imports, Procedures, para. 12, p. 37  
The Secretariat’s report notes that "in 2009, the RS  will complete the implementation of the risk 
management system and will initiate risk assessment based tax audits".  Could Government of Georgia provide any progress  related to the implementation of the risk 
assessment system? 
 
Response
 
 
Decisions on implementation of tax audit are taken based on risk assessment. 
 
(III) TRADE POLICIES AND PRACTICES BY MEASURE, (iii) Customs Valuation, rules of 
origin, and preshipment inspection, para. 27, p. 42 
 The Secretariat’s report notes that "a number of additions are made to the price paid or payable if those elements have not been already included in the selling price"   Could the Government of Georgia clarify how tho se additions are calculated in cases when such 
additions are required?   
Response
 
 
This issue is regulated by the Georgian Customs Code, through which the provisions of Agreement on 
Implementation of Article VII of the General Ag reement on Tariffs and Trade (GATT) of 1994 were 
fully implemented.  In determining the customs value under the provis ions of Article 38 of Georgian Customs Code, 
following shall be added to the price actually  paid or payable for the imported goods:  
 
1. To the extent, they are incurred by the buyer but  are not included in the price actually paid or 
payable for the goods:  
 
i. commissions and brokerage , except buying commissions;  
 ii. cost of containers, which are treated as being one for customs purposes with the 
goods in question;  
 iii. cost of packing, for labour or materials.  
 2. Value, apportioned as appropriate, of th e following goods and services where supplied 
directly or indirectly by the buyer free of charge  or at reduced cost for use in connection with 
the production and sale for exported of imported goods , to the extent that such value has not 
been included in the price actually paid or payable:  
 
i. materials, components, parts and sim ilar items incorporated  in, and materials 
consumed in the production of the imported goods;  
 ii. tools, dies, moulds and similar items used in the production of the imported goods;  WT/TPR/M/224/Add.1 
Page 12  
 
  iii. engineering, development, artwork, design work, and plans and sketches undertaken 
elsewhere than in the country of import and necessary for the production of the imported goods. 
 3. For the purposes of paragraph 2 of this Article , the value of goods and services, which should 
be included in customs value, must be defined in the price, at which the buyer has purchased 
them. If the goods are produced by the buyer, their price is determined on the basis of book-keeping documentation. If the given goods are depreciated, their value will be determined 
with the consideration of depreciation norms.  
 
4. Royalties and license fees related to the goods be ing valued that the buyer must pay, either 
directly or indirectly, as a condition of sale of goods being valued, to the extent that such royalties and fees are not included in th e price actually paid or payable. 
 5. The value of any part of the proceeds of an y subsequent resale, disposal or use of the 
imported goods that accrues directly or indirectly to the seller.  
 6. In case of determination of goods customs price on the basis of Article 32 of the present 
Code, to the transaction price, the share of profit should be added, which directly or indirectly 
belongs to the seller in the case of ea ch re-sale, disposal or usage. 
 
7. The following expenses, appear ed before the crossing of border  of Georgian customs territory 
by imported goods will be include d in customs value of goods: 
 
 a. cost of transport, loading-unloading a nd handling (including storage in a warehouse). 
If the consignment of goods is transported by the same transport, transport costs will 
be proportionally divided; 
 b. cost of insurance. 
 
(IV) TRADE POLICIES BY SECTOR, (4) S ervices, (iii) Construction para.34, p. 68 
 Could the Government of Georgia provide more details with regard to the "Resolution 57 on 
Construction Permit Issuance Procedure and Permit Ti mes", in particular to the legislative changes 
this new Resolution has brought about, compared to the previous Resolution 140? 
Response
 
 
According to the Resolution 57 on "Constructi on Permit Issuance Procedure and Permit Terms", 
structure of Resolution 140 was changed and form ed in a more acceptable and simplified form in 
respect to legal techniques that do es not result in essential change in th e content of the last version of 
the resolution and provision. Acco rding to the Resolution 57, each cl ass of buildings and structures 
has a separate chapter, where char acteristics, permit terms and com ponents of construction documents 
of a relevant class are defined.   
In general, Resolution 57 regulates the process of issuance of building permits and rules for putting 
completed premises as fit for use (issue occupancy certificate).   FYI: last four changes in GoG Resolution #140 (11.08.2008 #176; 27.10.2008 #214; 21.11.2008 #226 and 29.12.2008 #261.  
  WT/TPR/M/224/Add.1 
 Page 13 
 
 
  The most significant was the first one. According to this amendment:  
 1. The requirement of confirming the engineer ing and public utility connections is removed 
from the procedure of putting the object into exploitation. Thus, the legislation provides a construction owner the freedom of choosing the arrangement of sources of energy at his own 
discretion - either registering as a customer of public utility companies or looking for 
alternative sources of energy (generator, arranging power station, etc.).  
 2. The town-planning conditions are no longer prep ared by the administra tive authority. Instead, 
the permit-seeker is responsible for ela borating the conditions in the application 
documentation according to the legislation and s ubmitting this to the authority for approval at 
the 1st stage of the procedure.  
 3. The II stage of construction permit issuance pr ocedure (approval of the architectural project) 
is mandatory only in the zones of cultural her itage. Until recent changes this requirement was 
relevant for any type of construction. Thus , the provision shall limit unnecessary interference 
and disputes over architectural resolutions, whic h depends on the creativity of the architect.  
 For issuance of construction permit and commissioni ng of the object, building complexity is divided 
into five classes according to various risk factor s associated with the structure. The 1st class is 
regarded as the low risk, while the 5th class is  regarded as the highest risk object. List of 
documentation required for permit issuance procedure is specified for each class of the building. 
 
(IV) TRADE POLICIES BY SECTOR, (4) Services, (iv) Transit and Services, para. 69 and 70, 
p. 78  
Could the Government of Georgia explain the cont ainer handling capacity of Poti and Batumi ports?  
 
Response
 
 Poti Seaport  
Design capacity of Poti Seaport is 600 000 TEU pe r year. 209 614 TEU was handled in 2008 i.e. only 
35% of the design capacity is used. At the same time, 8.0 million tons cargo was handled in 2008, 
7.0 million tons of which is dry cargo. 
Batumi Seaport   
 Container terminal of the Batumi Seaport st arted operation in 2008 with design capacity of 
320 thousand TEU per year and 44 197 TEU was handled.  
TURKEY – ADDITIONAL QUESTIONS 
 
Report by the Secretariat (WT/TPR/S/224
)  
 
(II) TRADE POLICY REGIME, (4) Main Trade Agreements and Arrangements, (iii) European 
Union, para. 45, p. 29   We would appreciate if the Government of Georgia could provide further information on the possible 
scope of the deep and comprehensive free trade area (DCFTA) to be negotiated with the EU in terms 
of the sectors to be covered?  
 WT/TPR/M/224/Add.1 
Page 14  
 
 Response
 
 
The following issues are covered by the DCFTA: 
 - Tariff and Non-tariff Barriers (NTBs) 
- Technical Barriers to Trade (TBTs) 
- Sanitary and Phyto-sanitary (SPS) Measures - Trade Facilitation and Customs Administration - Rules of Origin (RoO) - Services and Investment 
- Intellectually Property Rights (IPR) 
- Public Procurement - Competition - Sustainable Development (Social and Labour Issues; Environment)  Government Report (WT/TPR/G/224), para.52, p. 12
 
 Could the Government of Georgia provide informa tion on the expected benefits of the prospective 
"EU-Georgia Bilateral Agreement on Protection of  Geographical Indications for Agricultural 
Products and other Foodstuff"? 
 
Response
 
 
Georgia is an agricultural country and development and promotion of geographical indications is one 
of the priority areas for Georgian Government. As EU is one of the main trade partners of Georgia, protection of Georgian GIs in the member states of  EU will add value to the products protected under 
GIs and raise their export potential. It will also pr event illegal use of Georgian protected names in 
member states. The last issue is very important  for Georgia, as in some member states several 
companies have already registered Georgian famous GIs as trademark and produce wines under 
Georgian names.  
EUROPEAN UNION - QUESTIONS 
 
Report by Georgia
 
 2.1 Macroeconomic overview Page 5, Paragraph 4 
 
The Report states that Georgia is projected to grow  by -1.5% in 2009. In fact, the projections have 
been at -4% for quite some time and co nfirmed most recently by the IMF. 
 
Response
 
 
At an earlier stage, the projection of growth for 2009 was -1.5%. Later, taking into account some 
changes in different parameters the projection was changed to -4% and currently, GoG and IMF 
projections of growth for 2009 are the same. 
 
2.5 Labour market reform 
Page 8, Paragraph 22 
 Georgian authorities claim that Georgia's Labour Code  is in compliance with the ILO core standards. 
However, the ILO has repeatedly expressed a d ifferent opinion, notably as regards the issues of 
collective bargaining and right to organize. With a view of deepening their cooperation and ensuring  WT/TPR/M/224/Add.1 
 Page 15 
 
 
  a proper implementation of the core ILO standards  in Georgia, the Georgian government, ILO and 
the representatives of Georgian employers and em ployees concluded a Joint Statement on 
30 October 2008.  1. Could Georgia provide an update on the implementati on of this Joint Statement, including on 
preparations of possible changes to its labour legislation in line with the ILO's 
recommendations? 
 Response
 
 
In December, 2008 a memorandum was signed between the Ministry of Labour, Health and Social 
Affairs (MoHLSA), the Georgian Trade Union Conf ederation (GTUC) and the Georgian Employers 
Association (GEA) that established provisions to start a social dialogue process in Georgia. This 
process was facilitated by the ILO expert consultant w ho participated in most of the meetings held by 
the parties and streamlined the process in general. 
 
Social partners have been holding sessions regularly  since December 2008, at least once a month (in 
some cases several times a month) to discuss issues concerning the labor legislation and other issues of labor relations.   An ILO social dialogue roundtable was held in Tbilisi end October 2009. The two day roundtable was 
chaired by the ILO Executive Director, Mr. Kari  Tapiola. Participants included high level 
representatives of the Georgian Government, Tr ade Unions and Employers’ Association.  
 Based on the conclusions of the roundtable, the Prim e Minister of Georgia issued a decree that 
formalized and institutionalized a Na tional Social Dialogue Commission. 
 Report by the Secretariat
 
 SUMMARY OBSERVATIONS  Page ix, Paragraph 11 &  Page 28, Paragraph 40 
 
In the sentence "Previously Georgia was allowed to  export only 3,300 products  without any customs 
duty and 6,900 produc ts under certain preferences", the figure 6,900 is incorrect. It should be 3,900. 
 Response
 
 
We agree to this comment.  
Page ix, Paragraph 11 & Page 20, Paragraph 28 
 In line with the new Eastern Part nership, it should be clarified that  negotiations on a possible future 
EU-Georgia DCFTA will start only when Georgia beco mes ready for it. The before-last sentence of 
paragraph 11 should therefore be amended so t hat it reads:"[…] trade-related regulatory policy 
acquis, as well as the negotiation of a deep and comprehensive free trade area once Georgia is 
deemed ready for it." The same amendment also applies to the last sentence of paragraph 3 on 
page 20. 
 
Response
 
 
Government of Georgia (GoG) sugge sts to amend this statement in the following way: ":[…] trade-
related regulatory policy acquis , as well as the negotiation of a deep and comprehensive free trade  WT/TPR/M/224/Add.1 
Page 16  
 
 agreement when Georgia makes sufficient progress in implementation of the key recommendations 
related to the DCFTA." 
 
I. ECONOMIC ENVIRONMENT  (1) INTRODUCTION 
Page 1, Paragraph 4 & Page 8, Paragraph 22 
 2. Could Georgia elaborate on its plans to ac hieve the necessary divers ification and increase of 
its exports? 
 
Response
 
 
Government of Georgia (GoG) works hard on ne cessary diversification and increase of Georgian 
Export. Georgia has implemented far-reaching struct ural reforms, aimed at developing a competitive 
private sector as the main engine of growth. As a key to raise productivity and competitiveness, GoG 
considers continued efforts to improve in frastructure and the business environment. 
 Georgia works actively to improve the internatio nal contractual basis that will facilitate export 
growth. Georgia has free trade agreements with all CIS countries. An FTA was concluded with 
Turkey and entered force in 2008. Preparatory work s for the start of nego tiations on the Deep and 
Comprehensive Free Trade Agreement with the EU are underway, including legislative 
approximation effort aimed at increasing Georgia’s export to the EU.  
 Important steps in export support are Bilateral Tr eaties on Investment Promotion and Protection and 
Double Taxation Treaties. Currently, Georgia ha s concluded bilateral treaties on investment 
promotion and protection with 30 countries and launc hed negotiations to conc lude bilateral treaties 
with 24 countries. As for double taxation treaties, Georgia has concluded double taxation treaties with 
26 countries and launched to conclude double taxation treaties with 9 countries. 
 Georgian exporters have high level support from th e government in terms of promotion. Business 
forums are held in frames of visits of state de legations and intergovernmental economic commissions.  
 
The Ministry of Economic Development of Georgia (MoED) works closely with the private sector. 
MoED organizes workshops, where the world market  trends are examined, the necessary information 
on preferential trade regimes and their usage is pr ovided, monthly updates information on its website 
on export and foreign trade related statistics. MoED delivers individual consultations for the 
interested entrepreneurs regularly.  
 
Currently, MoED together with the foreign expert s works on creation of a trade portal which will be 
very useful tool for the local producers to get access to the outer world and will promote the Georgian 
export diversification.   
II. TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES  
(3) TRADE POLICY AND IMPLEMENTATION 
(ii) Main institutions Page 25, Paragraph 24  3. Could Georgia provide an update on the state of pl ay of the reforms in the area of statistics, 
including transformation of the statistical  department of the Ministry of Economic 
Development in an independent agency? 
  WT/TPR/M/224/Add.1 
 Page 17 
 
 
  Response  
 
In order to develop a concept for the reform of  the Georgian Statistics System, a commission was 
created by the Prime Minister of Georgia in D ecember 2008. The Commission developed a concept, 
based on which a draft law on Official Statistics was prepared by the Government of Georgia (GoG). 
The draft law was submitted to the Parliament in  March, 2009 and currently has passed the third 
hearing.   GoG has been actively cooperating with EURO STAT and Georgian-European Policy and Legal 
Advise Centre (GEPLAC) in order to improve quality of the draft law on Official Statistics and other 
related legislation. In a follow-up of the EU -Georgian Sub-Committee Meeting, GOG has sent the 
draft law on State Statistics to the EUROSTAT and received recommendations. Taking into account 
these recommendations, GoG has updated the draft Law on Official Statistics. The aim of the reform 
is to establish a new system of State Statistics by  February 2010, according to which Department of 
Statistics of Georgia will no longer be under the Mini stry of Economic Development of Georgia. It 
will be established as National Statistics Service (Saqst at), which will be a Legal Entity of Public Law 
and will carry out its activities independently.  
(3) MAIN TRADE AGREEMENTS AND ARRANGEMENTS 
(ii) Commonwealth of Independent States (CIS) Page 27, Paragraph 36 & Page 29, Paragraph 46 
 
Georgia has a free-trade regime with members of Commonwealth of Independent States (CIS). CIS 
constitutes Georgia's largest trading partners. Furt hermore, Georgia has a free-trade agreement with 
the Republic of Turkey. 
4. Could Georgia elaborate on if and how social and labour issues are addressed within the 
above mentioned trade agreements? 
 Response
 
 
Social and labour issues are not addressed within th e mentioned trade agreements, as they are the so 
called simple free trade agreements.  
 
(iii) European Union 
Page 28, Paragraph 40  Granting of the EU GSP+ to Georgia for the p eriod 2009-2011 was conditional also on Georgia's 
undertaking to ensure proper implementation of th e core ILO Conventions . Therefore we suggest 
amending the before-last sentence of this paragraph as follows:   "[…] Cartagena Protocol on Biosafety, and co mmitted to ensuring compliance of its labour 
legislation and practices with the core ILO con ventions (also listed in the GSP regulation)." 
 
Response
 
 
GoG thinks that the original stat ement is correct and should not be changed. In our view no specific 
reference should be made to ILO conventions as these conventions are not the only precondition for 
granting or extending the GSP+ regime.  
 
GoG will continue its activities for proper implemen tation of taken obligations  based on all relevant 
international conventions and w ill carry out measures for further strengthening of good governance 
and sustainable development.   WT/TPR/M/224/Add.1 
Page 18  
 
 Page 28, Paragraph 41 
 The ENP Action Plan for Georgia was concluded not in October, but in November 2006.  
 Response
 
 GoG agrees to the comment. 
 
Page 28, Paragraph 44 
 
As noted before, in line with the new Eastern Part nership, the negotiations on a possible future EU-
Georgia DCFTA will start only when Georgia become s ready for it. Furthermore, it should be 
clarified further that trade-related regulatory appr oximation will be an essential element of such a 
DCFTA. The text should also distinguish between the Eastern Partnership's  bilateral and multilateral 
tracks. We therefore suggest redrafting of paragraph 44 as follows 
 
"[…] Association Agreements also planned in this  framework.  These Association Agreements will 
include the establishment or objective of establishi ng a deep and comprehen sive free trade area 
(DCFTA) once the necessary conditions for it have been  met. Trade related regulatory approximation 
will be an essential  element of these DCFTAs and in or der to help the partner countries to reach the 
necessary level of preparedness on which DCFTA negotia tions could build, the EU is proposing, inter 
alia substantial assistance concerning institutional  and administrative capacity development in areas 
such as TBT and SPS rules, customs and trade fa cilitation, taxation, intellectual and industrial 
property rights, public procurement, competitio n, and services, including financial services; 
cooperation on enforcement of IP protection, in particular as regards counterfeited and pirated 
goods;  exploration of possibilities for partners to participate in a system of diagonal cumulation of 
origin;  and increased cooperation on customs and trade facilitation a nd border management to 
ensure a smooth flow of goods and enhance security  and safety, and to combat customs fraud. As a 
longer-term goal, the EU supports also the creatio n of a network of bilateral DCFTAs among the 
partner countries themselves"  
 Response
 
 Georgia proposes the following wording, taking into account bilateral consultations between the EU 
Commission and the Georgian Government: These Association Agreements will include the 
establishment or objective of establishing a D eep and Comprehensive Free Trade Agreement 
(DCFTA) when Georgia makes sufficient progress in implementation of the key recommendations 
related to the DCFTA. 
 (7) TECHNICAL ASSISTANCE  (ii) Technical assistance needs Page 33, Paragraph 62  
5. Could Georgia inform if it is  considering any applications for training in WTO procedures or 
SPS issues? In particular, are any applications considered for capacity-building in the area 
of Hazard Analysis and Critical Control Points (HACCP) food safety system?  
 
Response
 
 Capacity building through trainings  on SPS related issues is one of th e key points of Comprehensive 
Strategy in Food Safety drafted by the Gove rnment of Georgia on the recommendation of the 
European Commission. To ensure the strengthening of capacity of relevant institutions the following 
steps are made by the GoG:  WT/TPR/M/224/Add.1 
 Page 19 
 
 
  With the support of GEPLAC, trainings for public  officials involved in the preparation process for 
negotiation on the DCFTA were initiated. The purpo se of these trainings was facilitation of better 
understanding of the main points of the SPS chap ter of DCFTA and reaching of the appropriate 
knowledge and competence.   
- Further TAIEX joint trainings for the Minist ry of Agriculture, the National Service and 
customs officials performing food safety check s at the border have been requested by 
Georgia.   
- Georgia is working with the Swedish Agency for Development Assistance (SIDA) to prepare 
a technical assistance project in food safety. The project will be focused on capacity building 
of relevant institutions and will start in 2010. The aim of the above-mentioned training 
program is to raise the awareness of public officials and facilitate better understanding of the 
main points of the EU legislation on food safety issues. 
- Georgian authorities will cooperate with th e food safety project on food safety implemented 
by the International Finance Corporation. One of  the target groups of the three year project 
will be food processing enterprises. The goal of th e project is to increase the competitiveness 
of Georgian food producers by improving their food safety practice and raising their awareness on Food Safety Management Systems (including HACCP). 
 Further technical assistance initiatives and appli cations for training to the EU and WTO will be 
prepared as a follow up of the technical meetin g in food safety organized between Georgian 
Government and EU Commission officials in Brussels on the 12
th of November 2009. 
 
II.TRADE POLICIES AND PRACTICES BY MEASURE (2)  MEASURES DIRECTLY AFFECTING IMPORTS (ii) Tariffs and other charges affecting imports  
(b) Tariffs   
Page 39, Paragraph 19  6. We understand that Georgia has undertaken, as  part of its accession commitments, to reduce 
the bound import duty rate on most spirits from 5 Euros to 1.5 Euros per % vol per hectoliter. 
Could Georgia clarify whether the implementa tion of this commitment has commenced, and if 
it has not, could Georgia explain the reasons?  
 Response
 
 
Government of Georgia decided to undertake autonom ous liberalization of import tariffs. In 2006, all 
import tariffs were reduced and only 3 import tariff ra tes remained (0%, 5%, 12%). In order to ensure 
balanced budget revenues, GoG refrained fro m reducing import duty rate on the spirits.  
 
(c) Other charges affecting imports  Page 40, Paragraph 23  
The Secretariat report states that the Georgian aut horities plan to equalize the excise tax on imported 
and domestically produced tobacco products.  7. Could Georgia clarify when they intend to do this, what – if any - steps have been already 
taken in this regard and when the equal rates would come into force? 
 WT/TPR/M/224/Add.1 
Page 20  
 
 Response
 
 
The draft amendments to the Georgian Tax Code regarding the equalization of excise tax on imported 
and domestically produced tobacco products were prepared by the Ministry of Finance and adopted 
by the Parliament of Georgia. These amendments will become effective from January 1, 2010.   
 Page 41, Paragraph 25  Georgia's excise tax is understood to discrimi nate between spirit categories as follows: 
 
All spirits except wine-based spirits and vodka    2.5 Laris per litre 
Wine-based spirits       2.3 Laris per litre Vodka         1.5 Laris per litre  8. Could Georgia clarify the situation and in form whether/when it plans to remove this 
discrimination?  
 
Response
 
 
Georgia’s excise tax is not discriminative, but it diffe rentiates between spirits. It should be mentioned, 
that national treatment of the spirits is guaranteed , as Georgia implies the same rates to local and 
imported spirits.  
(iii) Customs valuation, rules of origin, and preshipment inspection 
(a)Rules of origin  Page 42, Paragraph 29  
According to the Secretariat's Report, Georgia determines origin for non preferential purposes in 
accordance with "WTO rules on determ ination of country of origin".  
 9. Which of the criteria allowed in the WTO Agreement on Rules of Origin is applied by 
Georgia? 
 
Response
 
 
The following criteria are applied by Georgia: 
 
a) Criterion of "wholly obtained products"; 
b) Criterion of "change of tariff code"; 
c) Criterion of " ad valorem  percentage"; 
d) Criterion of "manufacturing or processing operation".  
 
10. Does Georgia’s legislation include a detaile d non preferential origin rule for every product? 
 
Response  
 
Yes it does. The Order #256 of the Government of Georgia includes a detailed non preferential origin 
rule for every product.  11. Is a certificate or other proof of or igin required for non preferential imports? 
  WT/TPR/M/224/Add.1 
 Page 21 
 
 
  Response  
 
No specific certificate or other proof of orig in is required for non preferential imports. 
 
12. Does Georgia apply trade defense me asures based on non preferential origin? 
 
Response  
 
No trade defence measures are applied by Georgia based on non preferential origin. 
 13. Are there any obligations to label importe d products with their country of origin? 
 
Response
 
 
Yes, the norms of labeling are envisaged by the Ge orgian legislation according to which the country 
of origin should necessarily be indicated on the product imported or produced locally. 
 The norms of labeling are defined by the Georgian  Law of 1996 on Protection of Consumers’ Rights" 
(Part 1, Article 6). The amendment was made to  the mentioned Law on the 21st of November, 2002 
according to which providing the necessary, authenti c and comprehensive information to a consumer 
is required. 
 
14. What is the procedure for the issuance of  an assessment on origin in accordance with 
Article 2 (h) and Annex II-3(d) of the WTO Agreement on Rules of Origin? 
Response
 
 Assessment of origin of goods is perfo rmed under Government Resolution #256 form 
27 December 2006 on Setting up of Instructions fo r Defining Criteria of a Country of Origin, Rules, 
Forms of Certificates of Origin, Rules of Issuing and Filling in Certificates of Origin. Assessment of origin is carried out within three days after re ceiving exporter’s application. Exporter’s commercial 
secrets are guaranteed by the Administrative Code. The exporter has a right to file an appeal against a decision to certifying body’s supervisi ng authority, and in case of denial can take an appeal to court. 
 
(iii) Government procurement 
Page 44, Paragraph 37  The Secretariat’s Report states that, while Georgia' s legislative framework in the area of public 
procurement is partially aligned with international standards, weak nesses remain, in particular in 
terms of over-reliance on single source procurem ent and poor working of the complaint mechanism. 
 15. Could Georgia info rm on its plans to rectify these problems? 
 Response
 
 
GoG would like to inform, that procurement le gislation of Georgia is  undergoing fundamental 
reforms that aim at introduction of electronic pr ocurement system from March 1, 2010 and subsequent 
abolition of paper-based procurement procedures from September 1, 2010. According to the amended 
Law on State Procurement (the am endments were adopted by the Parliament of Georgia on 
November 19, 2009 at the third hearing and will ente r into force at the mid of December 2009), single 
source procurement as a method of procurement w ill be abolished from Sept ember 1, 2010 and will 
be substituted by a simplified electronic tender that will ensure a higher level of competitiveness and transparency in state procurement procedures. WT/TPR/M/224/Add.1 
Page 22  
 
 According to the same amendments, complain ts review mechanism will be changing from 
March 1, 2010 – the Dispute Review Board will be created, comprising the representatives of State Procurement Agency and non-governmental organizati ons (they shall have e qual representation). The 
composition and operating regulation of the Board shall be defined by secondary legislation.  
 (4) MEASURES AFFECTING PRODUCTION AND TRADE (iv) Competition policy Page 51, Paragraph 70  The EU disagrees with Georgia’s view as reporte d by the Secretariat that the regulations on 
protection of competition provided in Georgian le gislation "adequately reflect a comprehensive and 
targeted approach to anti-monopoly regulation in specific sectors." Given the numerous exemptions and exceptions, and an applic ation of antitrust rules spread out amongst various sector regulators, 
the present competition law regime does not prov ide a sufficient general framework for the 
application of a modern competition policy. In addi tion, as can be concluded from the information 
provided in the report of the Secretariat, th e competition agency does not have adequate powers to 
implement the law.   16. Could Georgia inform when it intends to adopt a framework competition law which 
incorporates all necessary aspects, and to ensu re its coherent and effective enforcement? 
 
Response
 
 
In the framework of preparation process for DCFTA w ith the EU, GoG elaborated a draft Strategy in 
Competition Policy. The main aim of the Strategy is to promote competition and thus strengthen the 
efficiency of production and distribution of goods and services through the greatest possible 
transparency and equity of competitive conditions. 
 The Strategy addresses all the issues regarding antitr ust and state aid. The Strategy envisages 
elaboration of the general framework law in compet ition area. The framework law will cover all the 
fundamental principles in the area of competition.  
The Strategy also foresees effective enforcemen t of all basic aspects in the competition area. 
Currently, consultations are held with EC on the fi nalization of the Strategy. Its implementation will 
start in follow-up of the adoption of the Strategy. 
 
(v) Standards and SPS requirements 
(a) Standards and certification 
Page 96, Appendix Tables - Table AII.2 
 
According to Table AII.2, Georgia’s most recent WTO notification on TBT issues is dated 
19 January 2004. However, it would seem that so me new and/revised legislation on TBT issues has 
been introduced since then. 
 
17. Could Georgia confirm that any new legisla tion and/or changes in legislation on TBT issues 
will be notified to WTO before it enters into force, allowing WTO members to provide 
comments?  
 
Response
 
 
Georgia confirms that any new legislation and/or ch anges in legislation on TBT issues will be notified 
to WTO before it enters into force. Governmental  decree #170 (18.09.09) has been issued laying  WT/TPR/M/224/Add.1 
 Page 23 
 
 
  down the rules of notification on standards, tec hnical regulations, conformity assessment procedures 
and drafts thereof. According to the mentioned decree, Georgian Agency for Standardisation, 
Technical Regulations and Metrology (GEOSTM) will carry out functions of WTO TBT enquiry 
point.  
 
(b) Sanitary and phytosanitary measures 
Page 53, Paragraph 79 & Page 54, Paragraphs 81 and 83  18. Could Georgia inform about its plans to achieve full implemen tation of its new laws covering 
food safety, veterinary, and plant protection issues? 
 
Response
 
 
Government of Georgia (GoG) demonstrates a genui ne political commitment to establish a solid food 
safety system and  proper implementation of food safet y regulations through elaborating 
Comprehensive Strategy in Food Safety. The main ai m of the Strategy is to gradually approximate 
Georgia’s food safety legal framework with that of  the EU. The Strategy should guide the GoG and 
private sector activities in the short and long term.  The Strategy considers the gradual implementation of food safety related legislation starting from 
January, 2010.  
Currently, consultations are held with EC  on the finalization of the Strategy.  
 
19. In particular, when does Georgia foresee to make operational the food-safety institutional 
structures necessary to ensure mini mum international standards?   
Response
 
 According to the above mentioned Strategy, impl ementation of suspended articles of food safety 
legislation will start in 2010. Full implementati on will be achieved by 2018. The Government of 
Georgia commits to streamline and approximate Georgian  food safety legislative basis with that of the 
EU and gradually establish and implement food safety provisions based on a proposed program.   
The Strategy covers all main issues necessary fo r establishment of solid food safety system. 
Currently, consultations are held with EC  on the finalization of the Strategy.  
 
20. Could Georgia elaborate on the foreseen implementation on OECD-based Hazard Analysis 
and Critical Control Points (HACCP) food safety system? 
 
Response
 
 
The above-mentioned draft Strategy in Food Safety considers implementation of Hazard Analysis and 
Critical Control Points (HACCP). A Separate sectio n is dedicated to the HACCP implementation in 
the Strategy. It should be emphasized, that a surv ey of food processing enterprises was conducted. It 
was undertaken with the assistance of IFC (Interna tional Finance Corporation) funded TA project 
"Business Enabling Environment in Georgia". Accord ing to the survey, the level of awareness on 
Food Safety Management Systems (including HACCP ) is very low and only 15,2% of respondent 
entrepreneurs is  familiar with HACCP.    
As a follow-up to the survey and to raise f ood business operators' awareness on Food Safety 
Management Systems (including HACCP) IFC will implement Food Safety Improvement Project in 
Georgia during the next 3 years. The project will achieve this goal by the pursing the following objectives: WT/TPR/M/224/Add.1 
Page 24  
 
 - Facilitating access to markets for Georgian food processors by increasing awareness of food 
safety issues 
 - Piloting implementation of food safety management systems.  
Georgian Government plans to work actively with  private sector and relevant donors to increase 
awareness of the private sector assist them in HACCP implementation in their companies. This effort 
should be an important part of food safety project s implemented with the assistance of the EU or its 
member states.   
The above mentioned draft Food Safe ty Strategy envisages gradual establishment of official control of 
HACCP starting from 2011. Therefore, requirement of HACCP implementation for private companies 
will be implemented accordingly.   
 
Page 54, Footnote 26 
 
It seems the Georgian legislation does not introduce,  at least not in an equivalent and sole manner, 
the principles of the EU regulation. For example , the Georgian Joint Order 987 introduces two types 
of regimes for meat: import permission, which is not within EU legislation, as well as import 
conditions as described in EU legislation. 
Response
 
 This question has been previously  raised by the EC in the frame work of the DCFTA preparatory 
process. The Georgian side would like to clarify that the mentioned Joint Order does not introduce 
two types of regimes for import permission. At the technical meeting on food safety held in Brussels 
on the 12
th of November, the Georgian side requested th e Commission to specify this statement. Upon 
the receipt by the Georgian side of these speci fications, we will provide the answer to the 
Commission.   
21. Could Georgia explain whether the Join t Order 987 is considered to be introducing 
legislation based on the principles of EU legislation?  
Response
 
 The very purpose of the Joint Order 987 is to intr oduce legislation based on the principles of EU 
legislation. This Joint Order is one of the legal acts regulating the food safety area and aims to ensure 
coordinated action among the Customs Revenue Serv ice and the National Service for Food Safety, 
Veterinary and Plant Protection. By implementin g the provisions of the Joint Order 987, Georgia 
enforces principles of SPS border control, such as the NS defining import conditions for goods subject 
to veterinary SPS border control, pre-notif ication of incoming consignments etc.  
 The draft Government Strategy on Food among ot hers analyses current food safety legislation of 
Georgia and identifies shortcomings. The final ve rsion of the Strategy will include a plan of 
approximation of the Georgian legislation in the food safety area with that of the EU and of 
eliminating these shortcomings. Joint Order is one of the pieces of secondary legislation serving this 
aim.   
Page 54, Paragraph 82 & Page 55, Paragraph 86 
 
22. Could Georgia clarify which authority is providing instructions for SPS border inspection?  
  WT/TPR/M/224/Add.1 
 Page 25 
 
 
  Response  
 
Policy definition in the SPS area is the responsibility of  the Cabinet of Ministers, and in particular the 
Ministry of Agriculture. Implementation of SPS measu res in undertaken jointly by the latter and the 
Revenue Customs Department of the Ministry of  Finance. Officials doing SPS checks at the border 
are employed by the Revenue Service. Officials in  charge of inland SPS control are employed by the 
National Service for Food Safety, Veterinary and Plan t Protection (NS). Particular effort is dedicated 
to strengthen coordination between these agencies. Whereas policy in the SPS area is defined mainly 
by the Ministry of Agriculture, implementation of  SPS measures is dine jointly. For details see GoG 
response to question 8 below. The Government is committed to further strengthen cooperation in this 
area. 
 Relevant legislative acts are elaborated and implem ented jointly by the Revenue Service and the NS, 
such as the Joint Order 987, monitoring plans, SOP.   All other rules are elaborated by NS of the 
Ministry of Agriculture (MoA). 
 
From the overall management point of view, Nationa l Service for Food Safety, Veterinary and Plant 
Protection under the Ministry of Agriculture has the obligation to give RS instructions regarding type 
of SPS control measures for specific goods, and/or g oods originated from certain countries, regarding 
level and type of SPS control measures in specific BIP, etc.  
A risk-based Monitoring Plan fo r the reduced frequency of physical checks and sampling were 
introduced since July 1, 2009. This plan was elabor ated based on analysis of data on goods subject to 
SPS border control and agreed between the NS and the Revenue Service.  
 
23. Could Georgia clarify which authority will carry out the training of border inspection 
officers?  
 Response
 
 
Training of border inspection officers will be undertak en either jointly by the Revenue Service of the 
Ministry of Finance (of which Customs Department  is part) and Ministry of Agriculture/National 
Service for Food Safety, Veterinary and Plant Prot ection, or depending on the topic separately by 
these institutions.    
24. Could Georgia explain the inter-administra tive link, including procedures, between the 
Revenue Custom Service and the rest of the "inland" SPS authorities in all spheres of activity described in the legislation?  
 
Response
 
 
According to the Joint Order 987, Revenue Serv ice (RS) and National Service of Food Safety, 
Veterinary and Plant Protection (NS) exchange intelligence and information pertaining to the 
performance of border checks, and results thereof, in particular: 
 
a) NS shall regularly inform, electronically or by other suitable means of data transmission, the 
Customs Control Department of the RS on issu ed import or transit permits, the current and 
applicable lists of third countries and establishm ents and specimens of veterinary certificates 
or other relevant documents , as well as safeguard.   
 
b) The Customs Control Department of the RS sh all provide NS with information on relevant 
parts thereof recording checks on commodities subj ect to veterinary or phyto-sanitary border WT/TPR/M/224/Add.1 
Page 26  
 
 controls entering into or transiting through the territory of Georgia. For each consignment, the 
following minimum information shall be communicated to the NS: 
 
- serial number of the Inspection Report referring to the consignment 
 - date of arrival of the consignment concerned at the border inspection post 
 - size or quantity of the consignment 
 - species and category of use of the animals, and age where applicable  - type and quantity of product  - reference number of the certificate accompanying the consignment  - country of origin 
 - place of destination 
 - decision concerning the consignment  - reference to sampling, where carried out. 
 RS and NS shall cooperate and coor dinate with a view to enhance th e efficiency of veterinary border 
checks, address particular situations arising in th e course of such checks, respond to emergencies and 
render mutual assistance on any occasion warranting coordinated action.  Both Agencies have access to th e same electronic database. 
 The above mentioned Food Safety Strategy will out line in greater detail how and in which manner 
Revenue Customs and Service and inland SPS au thorities will collaborate with each other. 
Page 55, Paragraph 87 
 9. Does Georgia have any concrete plans to enhan ce the quality of inspections and testing with 
regard to food safety in order to avoid risks for consumers? 
 
Response
 
 
Georgia plans to enhance the quality of inspections and testing with regard to food safety first through improving/creating respective legislative basis,  and second through increased capacity building in 
order to facilitate proper implementa tion of respective legislation.  
 
In the framework of preparation process for DCFTA w ith the EU, GoG elaborated a draft Strategy in 
Food Safety. The key issues addressed in the Strate gy are inspections and testing. Accordingly, 
separate chapter is dedicated to the inspection related issues. Inspections and testing will be 
implemented stage by stage. Currently, consultatio ns are held with EC on the finalization of the 
Strategy.  
 
Page 96, Appendix Tables - Table AII.2 
 
According to Table AII.2, Georgia’s most recent WTO notification on SPS issues is dated 
13 October 2003. However, it would seem that a subs tantial amount of new and/revised legislation on 
SPS issues has been in troduced since then. 
 
26. Could Georgia confirm that any new legisla tion and/or changes in legislation on SPS issues 
will be notified to WTO before it enters into force, allowing WTO members to provide 
comments?  
  WT/TPR/M/224/Add.1 
 Page 27 
 
 
  Response  
 
Georgia confirms that any new legislation and/or changes in legislation on SPS issues will be notified 
to WTO.  
 (v) Intellectual property rights (b) IPR legislation Page 58, Paragraph 102  27. When does Georgia plan to implemen t Article 39.3 of the Trips Agreement? 
 
Response
 
 
Article 39.3 of TRIPS Agreement is already implemente d in the Georgian legislat ion. In particular, on 
10.08.2009 amendments were made to the Article 4 of Georgian law on Drugs and Pharmaceutical 
Activities", which are in force since 15.10.2009. 
 
(b) Implementation 
 Page 59, Paragraph 104  
28. Could Georgia outline how it plans to stre ngthen its IPR enforcement? 
 
Response 
 
 
Responsibility for enforcement of IP  rights is shared between differe nt authorities: "Sakpatenti", a 
legal entity of public law, which provides the legal pr otection of the rights of natural persons and legal 
entities in the area of intellectual property protection.  "Sakpatenti" deals with all intellectual property 
titles. "Sakpatenti" performs three functions. It is an industrial property office, a copyright office and 
an agency for the protection of new plant varie ties and breeders rights. Responsible authorities for 
enforcement of IPR protection are: The Minist ry of Interior, Financial Police and Customs 
Department of the Ministry of Finance. 
 
As regards the IPR enforcement at Georgia’s bor ders, the Customs Depart ment has developed an 
Intellectual Property Objects Register to assist in identification of counterfeited goods at the border. 
Accordingly, the ex-officio  activities are carried out by customs regarding the IP objects that are 
registered in Customs register. Any intellectual prope rty right holder has the right to register objects 
of intellectual property and the right to require th at the customs suspend goods produced in violation 
of intellectual property. When procedures of regist ration are initiated this in formation is published on 
the web-site of Ministry of Finance www.mof.ge. The information about all registered IPR objects is 
available on this website.    Despite the fact that Georgian authorities, except Customs Department, do not have ex-officio  power 
to act against enforcement cases, Georgian legislati on offers flexible possibilities for IP right holders 
to enforce intellectual property rights. Right holder s have the right to sue for infringement of their 
rights and to claim termination of the acts infringing their rights or creating a risk of their infringement, damages and destruction of infringing devices. The Criminal Code of Georgia stipulates fines with respect to violation of intellectual prope rty rights and imprisonment from 6 months to up to 
2 years.  
 It is noteworthy, that the amendments to the Georgian law on Drugs and Pharmaceutical Activities were adopted by the parliament in October 2009, acco rding to which IP right holders enjoy right to WT/TPR/M/224/Add.1 
Page 28  
 
 control parallel import on their initiative and regulat e this issue by distribution agreements or 
according to the exhaustion of rights clause.   For further harmonization of Georgian IPR legislati on with EU standards "Sakpatetni" in cooperation 
with office of the Prime Minister is currently wo rking on draft amendments to the Patent Law of 
Georgia. Amendments foresee streamlining the pr otection of the industrial design. Besides, 
Government of Georgia is ready to sign the Agreement between the European Community and 
Georgia on Protection of Geographical Indications  of Agricultural Products and Foodstuffs. The 
preparing process is almost finalised.   
For the purpose of improving the IPR enforcement,  Georgian Government with assistance of UNDP 
carries out the study in order to assess circulation of pirated and counterfeit products on the Georgian 
market. The study will be completed in early 2010.  
EUROPEAN UNION – FOLLOW-UP QUESTIONS 
 
2.5 Labour market reform Page 8, Paragraph 22  Follow up to Q1: 
 
Could Georgia specify whether it is preparing any amendments to  its labour legislation aiming at 
bringing this legislation in full comp liance with the ILO's core Conventions?  
 Response
 
 
In December, 2008, a memorandum was signed between the Ministry of Labour, Health and Social 
Affairs (MoHLSA), the Georgian Trade Union Conf ederation (GTUC) and the Georgian Employers 
Association (GEA), which established provisions to start a social dialogue process in Georgia. This 
process was facilitated by the ILO expert consultant w ho participated in most of the meetings held by 
the parties and streamlined the process in genera l. Social partners have been holding sessions 
regularly since December 2008, at least once a month (in some cases several times a month) to 
discuss issues concerning the labour legisla tion and other issues of labour relations.  
 An ILO Tripartite Roundtable was held in Tbilis i, Georgia on October 21-22. An ILO high level 
delegation, representatives of the Government of Georgia (GoG), the Georgian Trade Unions Confederation (GTUC) and the Georgian Employ ers Association (GEA) attended the Roundtable. 
Following the Roundtable, several practical steps were made by the GoG: 
 
- Prime Minister of Georgia issued a decree th at formalized and institutionalized a National 
Social Dialogue Commission (Decree #335, November 12, 2009). 
- A working group consisting of 2 representatives of each constituent was created to review and 
analyze the Georgian labour legislation’s conf ormity with the 2008 Committee of Experts on 
the Application of Conventions and Recommendations (CEACR) findings and 
recommendations and to draft proposed status  of the newly established social dialogue 
council. 
 
The GoG is taking into account the CEACR findi ngs and recommendations on the compliance of 
Georgian labour legislation with ILO Conventio ns. The purpose of the abovementioned working 
group is to ensure effective work of the social dialogue commission and address all concerns of the 
partners of social dialogue. The working group al ready started its work and will meet intensively 
during next several months to produce its report to  the Tripartite Social Dialogue Commission with  WT/TPR/M/224/Add.1 
 Page 29 
 
 
  the participation of the ILO expert. Specific amen dments to the labour legislation if needed are 
discussed in the framework of the social dialogue a nd are subject to a consensus between the parties. 
In December, 2009, working group intensively work ed on the elaboration of charter of the National 
Social Dialogue Commission. The charter was drafte d and will be submitted to the National Social 
Dialogue Commission by the end of January, 2010.  Report by the Secretariat
 
 I. ECONOMIC ENVIRONMENT (1) INTRODUCTION 
Page 1, Paragraph 4 & Page 8, Paragraph 22 
 Follow-up comment to Georgia's reply to Q2:  The EU would like to invite Georgia to improve fu rther its use of the enhan ced preferences offered to 
it under the EU GSP+ arrangement in order to diversify and increase its exports to the EU.   
 
Response
 
 
GoG fully realizes that the preferences offered unde r the EU GSP+ arrangement are very important 
for Georgian export diversification and further increase.  
 
In order to make the information on the preferenc es available for the interested parties, during the 
recent years, GoG has placed advertisements in Georgian TV channels and organized several 
meetings and seminars with private sector.   
In cooperation with non-governmental organizati ons and international donors, GoG issued and 
distributed several information booklets and organized roundtables.   As a result of GoG activities, Georgian exporters intensively use the GSP+ scheme. This fact is 
proved by the statistics of the last years, which s hows that on average, 95% of Georgian exporters use 
the preferences when exporting to the EU. 
 
GoG continues its activities towards the promotion of  the GSP+ arrangement and has planned several 
projects in this direction:   - Preparation of a special Export Guidebook 
 - Development of Trade Portal 
 - Regular meetings with the business community  
 
II. TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES, (3) MAIN TRADE 
AGREEMENTS AND ARRANGEMENTS, (iii) European Union Page 28, Paragraph 40 
 
Response to Georgia's comment on the EU drafting suggestion:  The EU would like to insist on its drafting amendment. At the time of the EU's deciding on the GSP+ beneficiaries for 2009-2011 the ILO was reporting on serious deficiencies in Georgia's 
implementation of the 8 ILO's core conventions lis ted in the EU GSP Regulation. Therefore the EU 
requested an explicit commitment by Georgia to ensu re that these shortcomings would be rectified in 
order to be able to grant the GSP+ to Georgia for 2009-2011.  
 WT/TPR/M/224/Add.1 
Page 30  
 
 Response
 
 
GoG proposes to maintain the formulation in the existing form on page 28,  paragraph 40 of the 
Secretariat report. Hereby, it should be emphasized, that GoG stands ready to cooperate with ILO and 
EU, as well as its social partners on labour related i ssues. In this regards, see also GoG response to 
question 1. 
 
III. TRADE POLICIES AND PRACTICES BY MEASURE, (2) MEASURES DIRECTLY AFFECTING IMPORTS, (ii) Tariffs and other charges affecting imports, (b) Tariffs  
Page 39, Paragraph 19 
 
Follow up to Q6:   2. Could Georgia clarify what commitments it undertook on accession to the WTO as regard the 
initial bound rate, the forward bound rate and th e implementation period for import tariffs on 
spirits?  
 
Response
 
 
See Annex 1  3. What is the import tariff rate currently applied on spirits? 
 
Response
 
 
See Annex 2 
 
III.TRADE POLICIES AND PRACTICES BY MEASURE, (4) MEASURES DIRECTLY 
AFFECTING PRODUCTION AND TRADE,  (v) Standards and SPS requirements(b) Sanitary and 
phytosanitary measures Page 53, Paragraph 79 & Page 54, Paragraphs 81 and 83  
Follow up to Q18-20: 
 4. When does Georgia expect to achieve full implem entation of all provisions of its law on food 
safety? 
 
Response
 
 
As it was mentioned in previous responses, based on the recommendations of the European 
Commission, GoG decided to prepare a Comprehensive Strategy of Food Safety (hereafter "Strategy"). The aim of the Government of Georgia (GoG) as demonstrated in the draft Comprehensive Strategy in Food Safety is to furt her develop legal and ins titutional framework in the 
food safety sector and implement suspended food safety legislation in line with the EU and 
international standards.   On 12
th November, 2009 expert meeting between Co mmission services and Georgian authorities on 
Food Safety issues was held, where issues related to the Strategy were discussed in a detailed manner. 
 
As it was agreed between Commission services and Georgian authorities, the implementation of suspended provisions of food legislation (regist ration, traceability and HACCP, inspections) will be 
carried out gradually.   WT/TPR/M/224/Add.1 
 Page 31 
 
 
  Georgia decided to intensify the implementa tion of food safety legislation from 2010 as it was 
indicated in the Strategy, namely:   - The first stage of implementation of food safety legislation will focus on the registration of 
food business operators, starting from 2010. Al ready existing authority responsible for 
company registration (National Agency of P ublic Registry) will register food business 
operators, as it has adequate institutional cap acity and experience in handing registers and 
databases.  
 
- As for the official control related provisions , the implementation will be undertaken in the 
following sequence: 
 
 1. The first phase (from 2011) – official  control will be introduced on products 
designated for export. The inspection will c over any kind of products designated for 
export, including high risk food production, ot her food production industries and feed 
products.  
 2. The second phase (from 2013) – official contro l will cover high risk food production.  
 3. The third phase (from 2015) – official control will start for other food production 
industries.  
 4. The fourth phase (from 2017) – official control will start for feed production 
industries, which is last group.  
 
Parallel to business registration, active legislativ e streamlining and awareness raising campaign for 
entrepreneurs will be undertaken in 2010. Current ly existing legislative s hortcomings, as underlined 
in the Strategy, will be eliminated this year.   
A special attention will be dedicated to the ins titutional improvement of National Service of Food 
Safety, Veterinary and Plant Protection (NS) and effective cooperation betw een Revenue Service and 
the NS. Specific technical assistance projects in food safety will be designed in cooperation with the EU and its member states.  
 
5. Could Georgia provide more details on its plans to improve and st rengthen administrative 
capacities and competences of the institutions in the food safety area and linkages and 
cooperation between these institutions, in order to ensure that the institutional system will be 
able to introduce and implement food safety legi slation approximated with the international 
standards? 
 
Response
 
 
The improvement and strengthening of administra tive capacities and competences of the institutions 
in the food safety area, as well as effective c ooperation between these institutions are the main 
priorities of the Government of Georgia (GoG). These  goals are explicitly emphasized in the Strategy.  
 
Further improvement of capacity of SPS specialists w ill be achieved by intensive joint trainings of the 
staff of the National Service of Food Safety, Ve terinary and Plant Prot ection (NS) and Revenue 
Service specialists, performing SPS control at the bor der. With this aim, the GoG requested TAIEX 
training on food safety, which should involve em ployees of the NS and the Revenue Service.  
 
In order to ensure effective implementation of food safety provisions, a high level of cooperation 
between the NS and Revenue Service needs to be achieved.  Important part of this cooperation is a regular ex change of relevant inform ation and establishment of 
unified electronic data basis, which will be accessible for both institutions. WT/TPR/M/224/Add.1 
Page 32  
 
 Comprehensive assessment of the abovementioned needs, including institutional strengthening, 
establishment of electronic data basis, etc. is be ing currently undertaken and will be included in the 
Strategy.  
 
III. TRADE POLICIES AND PRACTICES BY MEASURE, (4) MEASURES DIRECTLY 
AFFECTING PRODUCTION AND TRADE, (v) Intellect ual property rights, (b) Implementation 
Page 59, Paragraph 104  Follow-up to Q28:  
6. The ongoing UNDP study on piracy and counterfe iting is supposed to be completed in early 
2010. Does Georgia foresee preparing concrete measures aiming at improving the fight 
against these phenomena on the basis of this st udy immediately/shortly after it has been 
finalized? 
 
Response
 
 
The independent UNDP study once finalized will probably contain certain recommendations for 
improving the existing situation rega rding piracy and counterfeiting in  Georgia. GoG plans to take 
appropriate measures based on these recommenda tions and specific country priorities. 
 
Annex 1 
HS96 Description Bound rate at the 
date of accession Final bound rate Implementation 
220820 - Spirits obtained by distilling grape wine or 
grape marc 5 euro/%vol/HL 1.5 euro/%vol/HL See footnote 2 
220830 - Whiskies 5 euro/%vol/HL 1.5 euro/%vol/HL See footnote 1 
220840 - Rum and tafia 5 euro/%vol/HL 1.5 euro/%vol/HL See footnote 1 
220850 - Gin and Geneva: 
-- Gin, in containers holding:    
220850110 --- 2 litres or less 5 euro/%vo l/HL 1.5 euro/%vol/HL See footnote 2 
220850190 --- More than 2 litres 5 euro/% vol/HL 1.5 euro/%vol/HL See footnote 2 
 -- Geneva, in contai ners holding:    
220850910 --- 2 litres or less 5 euro/%vo l/HL 1.5 euro/%vol/HL See footnote 2 
220850990 --- More than 2 litres 5 euro/% vol/HL 1.5 euro/%vol/HL See footnote 2 
220860 - Vodka 5 euro/%vol/HL 1.5 euro/%vol/HL See footnote 3 
220870 - Liqueurs and cordials 5 euro/% vol/HL 1.5 euro/%vol/HL See footnote 2 
220890 - Other:    
ex220890 -- Tequila and Mezcal 5 euro/%vo l/HL 1.5 euro/%vol/HL See footnote 1 
ex220890 - Other: 5 euro/%vol/HL 1.5 euro/%vol/HL See footnote 2 
 
Footnote 1:   
Duty rates will be implemented under the following schedule: 
 YEAR   Tariff Rate      (net volume of alcohol)  
1 Jan. 2000–  5,0 euro/%vol/HL 
31 Dec. 2002  1 Jan. 2003–  4,735 euro/%vol/HL 31 Dec. 2003 
  WT/TPR/M/224/Add.1 
 Page 33 
 
 
  1 Jan. 2004–  3,75 euro/%vol/HL 
31 Dec. 2004  as of 1 Jan. 2005 1,5 euro/%vol/HL 
Footnote 2:  
 Duty rates will be implemented under the following schedule: 
 YEAR   Tariff Rate     (net volume of alcohol) 
 
1 Jan. 2000–  5,0 euro/%vol/HL 31 Dec. 2002  1 Jan. 2003–  4,735 euro/%vol/HL 
31 Dec. 2003 
 1 Jan. 2004–  3,75 euro/%vol/HL 31 Dec. 2004  1 Jan. 2005–  2,5 euro/%vol/HL 
31 Dec. 2005 
 as of 1 Jan. 2006 1,5 euro/%vol/HL  
Footnote 3: 
 Duty rates will be implemented under the following schedule: 
 YEAR   Tariff Rate      (net volume of alcohol)  
1 Jan. 2000–  5,0 euro/%vol/HL 
31 Dec. 2002  
Annex 2 
N° Code Description Import tariff rate 
1 2204 10 - Sparkling wines 1,5 euro/lit 
2 2204 21 - In containers holding 2 l or less: 0,5 euro/lit 
3 2204 29 - Other 0,2 euro/lit 
4 2204 30 - Other grape must 0,2 euro/lit 
5 2205 - Vermouth and other wine of fr esh grapes flavoured with plants or aromatic substances 0,5 euro/lit 
6 2206 00 - Other fermented beverage s (for example, cider, perry, mead); mixtures of fermented 
beverages and mixtures of fe rmented beverages and non-alcoho lic beverages, notelsewhere 
specified or included 0,5 euro/lit 
7 2207 - Undenatured ethyl alcohol of an alcoholic  strength by volume of 80 % vol or higher; ethyl 
alcohol and other spirits, de natured, of any strength. 3 euro/lit 
8 2208 20 - Spirits obtained by distilling grape wine 5 euro/lit 
9 2208 30 - Whiskies 5 euro/%vol/HL 
10 2208 40 - Rum and tafia 5 euro/%vol/HL 
11 2208 50 - Gin and Geneva: 5 euro/%vol/HL 
12 2208 60 - Vodka 5 euro/%vol/HL 
13 2208 70 - Liqueurs and cordials 5 euro/%vol/HL 
14 2208 90 - Other 5 euro/%vol/HL 
15 2209 00 - Vinegar and substitutes for vine gar obtained from acetic acid 0,4 euro/lit WT/TPR/M/224/Add.1 
Page 34  
 
 UNITED STATES – QUESTIONS 
 WT/TPR/S/224
 
 Section 2.5, "Labor Market Reform," of the govern ment’s report asserts that Georgia’s 2006 labor 
code is in compliance with the International Labor Organization’s core labor standards.  However, 
the ILO has observed as recently as 2008 that Geor gia’s labor code does not adequately provide for 
freedom of association, including by requiring 100 me mbers to form a trade union.  What steps is the 
government taking to address ILO concerns? 
 
Response
 
 
Existing legislation (e.g. Constitu tion, Labour Code, Civil Code, Law on Trade Unions) provides for 
freedom of establishment of association and member ship to any association, including trade unions .  
 
The right of establishment of trade unions and the ri ght of membership to trade union is ensured by 
the Constitution of Georgia. Article 26 of the C onstitution stipulates that "Everyone shall have the 
right to form and join civil associations, including trade unions ." According to the Article 2, 
Paragraph 3 of Law on Trade Unions, trade union can be established in any enterprise, establishment, 
organization and other employment facility.   
Everyone in Georgia has the right to set up asso ciations (including trade unions), because law 
provides for it (unless the objective of their est ablishment is against constitutional order and 
sovereignty). Establishment of associations means not only formation of the trade unions, but also 
establishment of any kind or form of association, organization, federation, including labour related 
bodies. 
 
Establishment of civil association means any type of association including trade unions
.  Accordingly, 
legal definition of civil associations includes trad e unions and all the rights of civil association are 
fully applicable to the trade uni ons as well without any reservation. 
 Current Georgian legislation stipulates the issu es related to the free dom of association and 
membership to the trade union in much more free manner as compared to the previous Soviet Labour 
Code abolished in 2006. Existing le gislation permits the establishment of any kind of association or 
membership to any association, including trade unions
. As under the Soviet Labor Code, then existing 
trade union had a monopolistic position, workers had no other alternative than to become a member of 
this particular Trade Union (Article 2, paragraph 3.d). 
 
Under the Georgian legislation, procedures of establishment of an association are simple. Establishment of an association needs at least 2 members and only registration fee of 26 EUR equivalent is to be paid.   Georgia is characterized with one of the highest association density in the region. At the same time 
Georgian legislation does not limit activities of  associations unless it violates basic rights and 
freedoms of others and/or public order.  
 
The civil association means any type of association including trade union and all the rights of civil 
association are applicable to the trade unions to full extent .  
 
The discrimination based on membership to any asso ciation is a subject of a criminal liability. 
According to section 142 of the Criminal Code, violat ions of the equality based on membership of any 
civil association is punishable by imprisonment for a period of up to two years.   WT/TPR/M/224/Add.1 
 Page 35 
 
 
  A number of Laws provide for freedom of associations, e.g.:  
 - Constitution of Georgia - Labour Code - Law on Trade Unions 
- Law on Public Service 
- Civil Code  According to the above-mentioned, Georgian legisl ation stipulates issues related to the freedom of 
association fully.  
 
Regarding the concern that the limitation related to the number of members to form a trade union, it 
should be mentioned that according to the labour le gislation, requirement of 100 persons to form a 
trade union is related to the confederation of trad e unions and not to the primary trade unions. This 
argument is supported not only by legislation itself,  but more importantly by practice. There are 
numerous of primary trade unions in Georgia with membership lower than 100, e.g.:  
 - Ministry of Culture, Monument Protection and Sport – 80 primary trade union members - Ministry of Justice – 40 primary trade union members - Ministry of Economic Development - 80 primary trade union members - JSC Bank of Georgia – 80 primary trade union members. 
An ILO Tripartite Roundtable was held in Tbilis i, Georgia on October 21-22. An ILO high level 
delegation, representatives of the Government of Georgia (GoG), the Georgian Trade Unions Confederation (GTUC) and the Georgian Employer s Association (GEA) attended  the Roundtable. 
Each party to the Roundtable was represented by 6 persons.  
 
It should be emphasised, that Prime Minister of Georgia issued a decree  that formalized and 
institutionalized a National Social Dialogue Commis sion. Currently, members of tripartite committee 
are working on elaboration of chapter of National Social Dialogue Commission.   The Roundtable agreed on the following issues:  
- To continue the enhancement of c ooperation between the ILO and the GoG. 
- To strengthen social dialogue within Georgia by continuing discussing labour relations related 
issues. 
- To establish a secretariat for supporting an  effective and productive cooperation between 
social partners. This issue was also touche d upon in during the discussion between the Prime 
Minister of Georgia and the Executive Director of the ILO.  
 
WT/TPR/S/224
 
 III. TRADE POLICIES AND PRACTICES BY MEASURE (2) Measures Directly Affecting Imports 
(i) Customs documentation and administration 
 Page 36, paragraph 9:   The Secretariat report indicates that in  2008, amendments were made to the 
Customs Code of Georgia, dealing with issues such as valuation. Does Georgia  intend to notify this 
amendment to the Committee on Customs Valuation?  
 WT/TPR/M/224/Add.1 
Page 36  
 
 Response
 
 
Georgia intends to notify the amendments to the Cust oms Code of Georgia dealing with issues such as 
valuation in 2010.  (iii) Customs valuation, rules of origin and preshipment inspection (a) Customs valuation  Page 42, paragraph 28:   The report indicates that Georgia uses fixed rates for determining the 
customs value of cars, instead of the price actua lly paid or payable.  Do the fixed customs values 
apply to imports of new cars, or used cars? Do th e fixed customs values apply to imports of new cars, 
used cars, or both? How are the fixed rates determined?  
 Response
 
 Georgia uses fixed rates (not ad valorem ) of import tax for both new and used cars. 
 The calculation is done in the following way: it depends on the volume of the motor and the exploitation period of the car. The cu stoms tax rate is 0.05 GEL per 1cm
3 of motor volume plus 5% of 
customs tax amount per each year of the exploitation of the car.   
Excise tax rate varies from 0.5 GEL to 1.5 GEL according to the years of exploitation.   
 
(b) Rules of origin 
 Page 42, paragraph 29:   Does Georgia provide for advance rulings on the country of origin of a 
good? If so, are these rulings available to the public and how does the public access them?  
 
Response
 
 
The Order N256 of December 27, 2006 of the Government of Georgia determines the regulations, standards and instructions on rules of issuing an d completing the forms of certificates of origin. 
According to the 1st Paragraph of Article 2 of this instruction, the standards defining the origin of a 
good are the following:  a) Criterion of "wholly obtained products"; b) Criterion of "change of tariff code"; 
c) Criterion of " ad valorem  percentage"; 
d) Criterion of "manufacturi ng or processing operation".  
 The instruction approved by the abovementioned Or der was published in the legislative gazette of 
Georgia and is also available on the web-site of th e Ministry of Economic Development of Georgia.  
(iv) Import prohibitions, restrictions and licensing 
 
Page 42, paragraph 32 :  Since Georgia’s last notification to the Committee on Import Licensing 
Procedures was in 2002, when will Georgia submit a copy of its new Law on licenses and permits, 
issued in June 2005, to the Committee? 
 
Response
 
 
GoG will provide English version of the law as soon as possible. 
  WT/TPR/M/224/Add.1 
 Page 37 
 
 
  (3) Measures Directly Affecting Exports 
(v) Free industrial zones  Page 45, paragraph 45 :  In light of the fact that the Law of Georgia on Free Industrial Zones 
contains provisions for preferential corporate tax,  property tax, duty, and licensing procedures, in 
particular at Articles 3, 8 and 9 of the law, when will Georgia submit its notification of these 
incentives, in light of its obligations under Article 25 of the SCM Agreement?   
 
Response
 
 GoG will provide its notification of these incentives by June, 2010. 
 
Page 45, paragraph 46:   In its Report, the Secretariat mentions  the following legislation and rules:  
(1) Act on Determining the Amount of the Guarantee to be Submitted for Creation of Free Zones, Conditions for Creation of Free Zones, their Operati on, Storage of Goods and Customs Control Rule" 
(Government’s Resolution No. 157), and (2) Rules on Establishment, Arrangement and Operation of 
Free Industrial Zones (Government’s Reso lution #131). Where are these published?   
 
Response
 
 Both Acts (131 and 157) are Decrees of Governme nt of Georgia and are published in the official 
gazette - official edition where all the legislative acts are published.  
(4) Measures Affecting Production and Trade 
(ii) Incentives 
(a) Special taxation regimes  Page 47, paragraph 56 :  According to the Report, under the Tax Code of Georgia, International 
Financial Companies (IFCs) are subject to special tax regimes, including exemption from the profit 
tax.  Besides an IFC designation, what are the e ligibility criteria for these special tax regimes? In 
light of its obligations under Article 25 of the WTO SCM Agreement, when will Georgia notify these 
incentives?  
 
Response
 
 
According to the Tax Code of Georgia the special tax regimes are used for: 
 - International Financial Company (IFC)  - International Company of Free Industrial Zone - Company of Free Warehouse   
The eligibility criteria for IFC are the following : IFC designation, which is granted by the 
corresponding certificate of Ministry of Finance (M oF) based on the request of the representative of 
company. Besides, IFCs should not receive more th an 10% of total revenue from activities in Georgia. 
In case the revenue of the company from activities in Georgia exceeds 10%, the special tax regime 
will be abolished for such company.  
 
According to the Tax Code of Georgia, the status  of Company of Free Warehouse is granted by the 
corresponding certificate of Ministry of Finance based on the request of the representative of 
company. The status of Company of Free Ware house is abolished in case the company carries out 
other economic activities, which are not allowed for warehouses or the foreign goods, preserved in 
free warehouses.  
 WT/TPR/M/224/Add.1 
Page 38  
 
 International Company of Free Industrial Zone, registered and carrying out its activity in free 
industrial zone, is exempted from profit tax regi me, if it is designated as International Company 
according to the Tax Code of Georgia. Internationa l Company is limited in its activities, as it should 
not import goods/services from free industrial zone to the rest of the territory of Georgia or buy or sell 
goods/services from or to non-international company within the free industrial zone, excluding some 
goods/services, stipulated by the decree of Government of Georgia.   
 As for the notification, GoG will provide its notification of these incentives by June, 2010. 
 
(b) State aid 
 
Page 48, paragraphs 57-58:  The Report describes state aid as one-time aid conferred for a definite 
period, consisting of tax exemptions, payment de ferrals, debt clearance, preferential credit and 
guarantees, revenue guarantees, land at below-market pri ce, etc.  In light of its obligations under 
Article 25 of the SCM Agreement, when  will Georgia notify these incentives?  
 
Response
 
 
Georgia will notify these incentives by June, 2010. 
 
(v) Standards and SPS requirements 
(a) Standards and Certification 
 Page 52, paragraph 74:  We note that the TBT Agreement requir es members to base their technical 
regulations on relevant international standards (not regional standards such as EN) except when such 
international standards would be ineffective or  an inappropriate means for fulfilling the legitimate 
objectives pursued.  How does Georgia accord prior ity to international standards over regional and 
national standards?   
 
Response
 
 
While elaborating technical regulations, priority w ill be given to international standards e.g. ISO 
standards. In 2006 Georgia has unilaterally acknowl edged technical regulations of 36 EU and OECD 
countries. In case where no international standard exis t or when international standard or relevant 
parts would be an ineffective or inappropriate mean s for the fulfilment of the legitimate objectives 
pursued then priority will be given to regional sta ndards (with providing appr opriate justifications). 
 (b) Sanitary and phytosanitary measures  Page 54, paragraph 81:   Footnote 26 indicates that "all norma tive acts regarding food safety were 
elaborated on the basis of EU regulations…."  We note that the SPS Agreement calls on WTO 
Members to base their measures on international stan dards.  In the case of food safety, the Agreement 
cites those international standards contained in the Codex Alimentarius or, if a Member elects a 
higher level of protection, that the Member base th e measures on a risk assessment.  Please indicate 
why Georgia’s food safety measures have been ba sed on EU regulations instead of Codex, and 
whether such safety measures have been subject of a scientific  risk assessment where Georgia’s 
regulations are different from those of Codex?   
Response
 
 
According to the Georgian Law on Food Safety a nd Quality, Government of Georgia shall ensure 
registration of the international standards – Codex Alimentarius . From 1992, Government of Georgia 
started registration of the international standards combined in the Codex Alimentarius.  There is a  WT/TPR/M/224/Add.1 
 Page 39 
 
 
  contact point to the Codex Alimentarius Commission within the National Service (NS) of Food 
Safety, Veterinary and Plant Protection, Ministry of Agriculture of Georgia.  Accordingly, Georgia’s regulations are not different from Codex Alimentarius.  
 
EU regulations on food safety are relevant in partic ular in the context of negotiations on the Deep and 
Comprehensive Free Trade Agreement with the EU.  
 The Comprehensive Strategy in Food Safety prepar ed by the GoG in the fra mework of preparation 
process for future DCFTA with the EU, aims at further development of legal and institutional 
framework in the food safety sector and implementati on of suspended food safety legislation in line 
with the EU and International st andards (Codex Alimentarius).  
 
Also, according to paragraph 81, the core articles of the Food Safety and Quality Law have been 
suspended but will be gradually rei nstated in 2010 and 2012.  What step s is Georgia taking to be in a 
position to implement its law when the core articles are reinstated?  Since the food safety legislation 
has not yet been implemented, what legislation is  currently in place governing food safety?  Does the 
suspension of food safety measures apply equa lly to imported and domestic products?  
 
Response 
 
GoG decided to prepare a Comprehensive Strategy of Food Safety. In order to involve relevant 
government institutions and agencies in the drafting process of the Strategy, and at the same time 
ensure active dialogue with stakeholders, the In ter-agency Working Group has been created by the 
decision of the EU Integration Commission chaired by  the Prime Minister of Georgia. The Working 
Group is chaired by the Minister of Agriculture. Th e one of the main tasks of the Working Group is 
elaboration of a Comprehensive Strategy for the development of the food safety system and coordination of preparatory works for its implementation.  It should be mentioned that, only some provision s (inspections, traceability, registration of food 
business operators) of the Law on Food Safety a nd Quality are suspended and not the whole 
legislation. Accordingly, Law on Food Safety and Quality is not suspended fully and the rest of the 
issues covered by the Law are implemented (for example: taking samples, monitoring, etc).   The aim of Government of Georgia (GoG) as dem onstrated in Comprehensive Strategy in Food 
Safety is to further develop le gal and institutional framework in the food safety sector and implement 
suspended food safety legislation in  line with the EU and internati onal standards. Implementation of 
existing food safety legislation will start in 2010. Implementation of the suspended provisions of the 
Law on Food Safety and Quality will be carried out gradually.  
 As for the suspended provisions of food safety legi slation related to the control, they are being 
implemented gradually for the domestic products. Cu rrently, imported products are controlled on the 
border according to the Joint Order 987 of Ministry of Finance and Ministry of Agriculture.  
 
Page 54, paragraph 83:   Please elaborate on the current proce dures in place regarding inspections.  
 
Response
 
 
Currently, 13 Border Inspection Posts (BIP) ar e functioning at customs check points (BCP). 
Inspectors of BIP should implement the following:  - Documentary and identity check should be unde rtaken in any case (identity check is not 
implemented regarding consignment, which fa lls under monitoring plan) regarding any goods WT/TPR/M/224/Add.1 
Page 40  
 
 subject to SPS border control. However, if the officer will find out any non-compliance, 
suspicious in the process of documentary and identity check, he/she should implement 
physical check and taking of laboratory samples  additionally. Goods may be released into 
import only if results of physical check and laboratory samples taking will not reveal any threat for society. 
 
- Only documentary check should be implemented if consignment will be chosen according to 
the reduced frequency of physical checks monito ring plan for laboratory test. In this case the 
identity check will be implemented in the inland customs office and if the officer: 
 
a) Finds out any non-compliance, or suspic ion in the process of identity check, officer 
should implement physical check and taking of laboratory samples. Goods may be released into import only if results of physical check and laboratory samples taking will not reveal any threat. 
b) Not finds out any non-compliance, or su spicios in the process of identity check, 
officer should implement physical check a nd taking of laboratory samples (the same 
will apply to the physical check). Goods may be released after laboratory samples 
taking, without waiting for results of laboratory samples. 
 
 As for the inland inspections, separate chapter is dedicated to the inland inspections in the 
Comprehensive Strategy in Food Safety. The ma in aim of the Strategy is to gradually 
approximate Georgia’s food safety legal framework  with international standards. Currently, 
consultations are held with the EC on the finalization of the Strategy.  
 
Pages 54-55, paragraph 85 : We note that the measures described in paragraph 85 are applied to 
imported products. Are similar meas ures imposed on domestic products?  
 
Response
 
 
Suspended provisions of food safety legislation related to the contro l are being implemented gradually 
for the domestic products. Currently , imported products are controlled on the border according to the 
Joint Order 987 of Ministry of Finance and Ministry of Agriculture.  
 
Page 55, paragraph 87:   Please elaborate on the standards that  Georgia is developing with regard to 
food products of animal origin.   
 
Response  
 
Georgia has registered a number of food products of  animal origin, e.g. butter, milk, cheese, some 
kinds of tinned fish, honey, oil, etc. Georgia c ontinues the registration of Codex Alimentarius, 
including standards on food products of animal origin.  
(vi) Intellectual property rights  
 
Patents 
 
Page 56, paragraph 91:   According to the Report, "Non- exclusive compulsory licences can be 
granted after 4 years of patent issuance upon the re quest of any interested persons (Article 61), 
provided that the proposed user has made effo rts to obtain a licence from the right holder on 
reasonable terms." Please explain the provisions of Article 61 of the Law on Patents in light of TRIPS 
Article 31.   WT/TPR/M/224/Add.1 
 Page 41 
 
 
  Response  
 
According to Georgian Patent Law, compulsory licenses can be granted for public requirements after 
4 years from the date when the patent is granted. The compulsory license can be issued only in case 
when the interested party tried to obtain the licen se on the basis of reasonable conditions and terms 
but his efforts have not been successful. Compul sory license shall be non exclusive. Thus, the 
provisions of the Georgian Patent Law on com pulsory license are fully in line with TRIPS 
requirements. 
 
Copyright 
 
Page 56, paragraph 96:    According to the Secretariat, copyrightable material includes 
"(ix) collection of works or data representing results of intellectual creative activity."  What, in Georgia’s view, do the phrases "intellectual creati ve activity" and "results of intellectual creative 
activity" mean? Could the government please provide examples of such works or data? 
 
Response 
 
 
Georgian law on Copyright and Neighbouring Rights protects literary and artistic works which exist 
in objective forms. Under the terms "intellectual cr eative activity" and "results of intellectual creative 
activity" is meant the same as under the requirement of "originality" in legislations of some other 
countries. In particular, the work should be author ’s own creation and reflect his/her own creativity 
and effort. The examples of this can be any literary and art works. 
 
Enforcement 
 
Page 58, paragraph 103:   Does the Criminal Code include pr ovisions for seizure, forfeiture and 
destruction of the infringing goods and of any ma terials and implements used to commit the offense? 
 
Response  
 
According to the Criminal Code of Georgia, it is  possible to seize and forfeit infringing goods as an 
additional sanction (article 41).  
Page 59, paragraph 105:   When does the Government expect that  the UNDP study will be completed? 
 
Response  
 According to the data provided by UNDP the study will be in early 2010. 
 
UNITED STATES – FOLLOW-UP QUESTIONS 
 
Please confirm Georgia’s responses to our questions indicating that notifications are in preparation 
and will be tabled for the following: 
 - The amendments to the Customs Code of Ge orgia dealing with customs valuation to the 
 Committee on Customs Valuation - The new Law on Licenses and Permits, issued  in June 2005, to the Committee on Import 
 Licensing Procedures 
- A revised notification (per Article 25 of th e Agreement) to the Committee on Subsidies and 
 Countervailing Measures describing the following measures:  WT/TPR/M/224/Add.1 
Page 42  
 
 - preferential corporate tax, property tax, duty, and licensing procedures as provided 
for in the Law on Free Industrial Zones,  in particular Articles 3, 8 and 9; 
- special tax regimes, including exemption from the profit tax for International 
Financial Companies (IFCs) as provided for in the Tax Code of Georgia; and 
- various state aids to enterprises, defined as one-time aid conferred for a definite 
period, consisting of tax exemptions, payment  deferrals, debt clearance, preferential 
credit and guarantees, revenue guarantees, land at below-market price.   
 Response
 
 Georgia confirms that the notifications are in preparation and will be tabled in 2010. 
 
Georgia’s response to our original question concern ing its use of fixed values in the valuation of 
automobiles requires clarification. We sought an exp lanation as to why Georgia uses fixed values for 
determining the customs value of cars, instead of ta king the invoice price as the "price actually paid 
or payable" as required by the WTO Agreement on Customs Valuation.  Georgia’s response was to 
indicate that its applied tariff rate on passenger au tomobiles is a specific rate of duty. We note, 
however, that Georgia’s bound tariff rate in its WTO GATT Schedule on passenger automobiles is, in 
general, 12 percent ad valorem. In light of th is, we have the following follow-up questions: 
 
- How does Georgia determine that the specific tariff rate applied to imported new and used 
automobiles is within its ad valorem GATT binding of 12 percent? 
 
Response
 
 
GoG would like to present the information (see Tabl e 1), which clearly demonstrates that amount of 
collected customs tariffs based on the specific tariff rate applied to imported new and used 
automobiles is far below its ad valorem  GATT binding of 12 percent.  
 
Year Imported Automobiles Declared Customs Valuation (GEL) Customs Tariff 
Paid (GEL) Percent 
New 112,479,772 292,365 0.25 2006 
Used 343,970,955 5,929,440 1.72 
New 216,825,795 643,641 0.29 2007 Used 425,981,337 6,307,769 1.48 
New 303,192,784 1,036,014 0.34 2008 Used 777,824,979 11,279,077 1.45 
New 84,118,207 250,363 0.29 2009 Used 345,172,149 5,667,745 1.64 
 
It is obvious from Table 1. that for these imports ad valorem tariff rate is less than 2 percent and thus 
is within its ad valorem  GATT binding of 12 percent.  
 
- In determining an ad valorem  equivalent rate  to the specific applied tariff rate, does Georgia 
use WTO-sanctioned methods for valuation of th ese imports, i.e., the price paid or payable, or 
are fixed or arbitrary values used? 
 
Response  
 Georgia uses WTO-sanctioned methods for valuation of these imports. No fixed or arbitrary values 
are used.     WT/TPR/M/224/Add.1 
 Page 43 
 
 
  Georgia did not answer our question concerning the provision of advance rulings  on the country of 
origin of a good.  The availability of such ruli ngs "upon the request of an exporter, importer or any 
person with a justifiable cause" is required by Ar ticle 2(h) and Annex II, Article 3(d) of the WTO 
Agreement on Rules of Origin. "Requests for such a ssessments shall be accepted before trade in the 
good concerned begins and may be accepted at any later point in time. Such assessments shall remain 
valid for three years provided that the facts and c onditions, including the rules of origin, under which 
they have been made remain comparable."  - Please confirm that Georgia’s customs legisla tion contains such provisions and provide the 
legal citation where they can be found. 
 
Response
 
 
Government of Georgia (GoG) and particularly, th e Ministry of Finance is currently working on a 
new draft package of secondary legislation, whic h will determine the regulations, standards and 
instructions on rules of issuing and completing the forms of Certificates of Origin. This package 
includes the draft order of the Minister of Finance, which stipulates standards, forms and instructions 
for Advance Ruling on Rules of Origin. As soon as th is legislative package en ters into force, GoG 
will notify WTO on the changes. 
- Are these rulings available to the public?  How does the public gain access to them?  
 
Response  
 
Publicity and availability of all legal texts, includi ng those about rules of origin, are established under 
the Georgian Law on legal texts, according to whic h a legal text enters into force only after its 
publication. The Order N256 of December 27, 2006 of  the Government of Georgia which determines 
the Regulations, Standards and Instructions on Rules of Issuing and Completing the Forms of 
Certificates of Origin and all related legal acts were  published in the legislative herald of Georgia. 
 As soon as the Ministerial Order determining advan ce ruling is adopted, it will be also published. 
 
At the time of its accession to the WTO in 2000,  Georgia committed to initiate negotiations for 
accession to the Agreement on Government Procurement by tabling an entity list.  Ten years later, 
this has not been done.  When will Georgia initiate its negotiations for accessi on to the Agreement by 
submitting its initial offer of coverage to the Committee on Government Procurement? 
 
Response
 
 As it was mentioned in the previous response, currently, procurement system of Georgia is 
undergoing fundamental reforms. The amended Law on State Procurement has already been adopted 
by the Parliament and published on December 7, 2009. This amended law introduces electronic 
procurement system from March 1, 2010 and s ubsequent complete abolition of paper-based 
procurement procedures from September 1, 2010.  
 
With this reform, Government of Georgia (GoG) introduces a common electronic system of state procurement in order to: a) decrease the time of procurement procedures; b) increase transparency of procurement procedures; c) simplify and make mo nitoring system of procurement process more 
effective; d) establish procurement data collection system; e) eliminate problems connected with 
territorial distance between bidders and suppliers ; f) make the information on procurement easily 
accessible for local as well as foreign suppliers; g)  increase competitiveness and rational spending of 
budgetary funds for state procurement; h) define accountability of officials involved  to the 
procurement decisions. WT/TPR/M/224/Add.1 
Page 44  
 
 Based on the abovementioned, reformed Georgian  procurement system was approximated with 
international standards.  Currently, GoG undertakes comparative analysis of national legislation on public procurement and 
GPA. As the analysis revealed so far, in a numbe r of areas (e.g. types of tendering procedures, time-
limits for tendering, etc.), Georgian national legislation introduces more modern mechanisms of 
procurement compared with GPA.  Due to abovementioned, the date of application in the GPA will be de termined after the finalization of 
the comparative analysis.   
 
CHINESE TAIPEI – QUESTIONS 
 
Report by Georgia (WT/TPR/G/224
) 
2. RECENT ECONOMIC DEVELOPMENTS AND REFORMS 
2.3. State-owned enterprises and privatization  
(Page 7, paragraph 16) 
 
According to the report, in an effort to attrac t more foreign investment in the Georgian economy, the 
Government plans to continue a transparen t yet aggressive policy of privatization. 
 
Our questions are as follows: 
 
i) What is the privatization policy as it relates to foreign investment? 
Response  
 
It should be mentioned, that Georgia applies equal treatment of local and foreign natural persons and 
legal entities in the privatization process.  Key features of Georgia’s privatization policy include:  
- Flexibility - use of various methods of sale. In  order to promote an efficient privatization 
process, the Government of Georgia (GoG) u se various methods to privatize state-owned 
property such as tender, auction, lease-redemption and direct sale. 
- Transparency - to ensure a high level of fairness and transparency, GoG actively works 
towards establishment of international contract s with interested organizations and potential 
investors. Special web-site www.privatization. ge has been created to provide information 
related to privatization. 
- Fairness - equal opportunities for all potential buyers. Any Georgian or foreign person or 
company has the right to take part in the pr ivatization process in compliance with Georgian 
legislation. 
- Investor-initiated privatization - investor s can initiate an expedited, transparent and 
competitive privatization of particular as sets necessary to an investment project. 
 
ii) Is there any limit on foreign investors’ participation in the privatization? 
 
Response
 
 
There is no limit on foreign investors’ participation in the privatization.  
  WT/TPR/M/224/Add.1 
 Page 45 
 
 
  MEXICO – QUESTIONS 
 
Georgia is requested to respond to the following  questions based on the content of document 
WT/TPR/S/224 of 3 November 2009.  
IV. TRADE POLICIES BY SECTOR, (4) Services,  (ii) Financial services, (a) Main features 
 In paragraph 40, it is stated that the financial sector  is among the smallest in the Europe and Central 
Asia region in terms of GDP, that it continues to  be dominated by banks, and that according to the 
Central Bank, nearly 99 per cent of financial in termediation takes places through the banking system, 
meaning that the mobilization and transformation of financial resources into investment resources is 
carried out by banking institutions and not throu gh the securities market, the situation that "is 
unlikely to change in the foreseeable future".  In th is connection, does Georgia plan to introduce any 
programme whereby most of its twelve component  regions may have access to banking operations? 
 
Response  
 It should be noted that there are no state-owned banks in Georgia and all the commercial banks are 
private-owned. Commercial banks have their own development plans. Most of the big commercial 
banks have wide network of regional branches in all regions of Georgia. For instance, one of the 
biggest commercial bank in Georgia – "Bank of Georgia" has 59 branches in Georgian regions. 
Therefore, Georgian regions do not face any problems regarding access to bank services. 
 
IV. TRADE POLICIES BY SECTOR, (4) Services, (ii)  Financial services, (e) Financial regulatory 
framework  In paragraph 54, it is stated that the aim of  banking supervision, according to the Georgian 
authorities, is to balance safety and efficiency of  the financial system (to avoid inappropriate or 
over-regulation) with being forwar d-looking in detecti ng and managing risks, thus protecting bank 
depositors' and other creditors' funds while upholdi ng the principles of competition in the banking 
system.  Could Georgia explain how it balances safety and efficiency in the banking system? 
 
Response
 
 
In times of the Global Financial Crisis, Georgian banking system showed exceptional resilience: none 
of the commercial banks have bankrupted or been baile d out by the state. This practice evidenced that 
the Georgian financial system proved efficien t and the regulations in place – effective. 
 
IV. TRADE POLICIES BY SECTOR, (4) Services, (iii) Telecommunications, (b) Legislative 
framework 
 
Paragraph 63 explains that interconnection charges a re one of the biggest cost items for new entrants 
and could constitute a significant barrier to deve lopment of potential competition as existing 
operators have an incentive to raise th e cost of making/receiving calls to new networks, thus making it 
unattractive for consumers to switch to newer opera tors in the market.  Could Georgia comment on 
how it plans to promote competiti on between operators in the sector? 
 
Response  
 
The important component of the State strategy of development of the telecommunications field is a 
creation of a competitive environment and minimally regulated system for the operators. Therefore, 
there are no barriers for private sector investments in  any kind of projects. Legislative amendments in WT/TPR/M/224/Add.1 
Page 46  
 
 2004-2006 had simplified licensing procedures. According to the law of Electronic Communications 
new entrants on the market only have to get author ization to start an operation. Licensing is needed 
only for acquiring radio frequenci es and numbering recourses. Simple procedures for companies 
willing to start operations in this field promote the competition on the market.   
On the 21
st of October 2009 under the resolution #525/ 23, Georgian National Communications 
Commission conducted a market rese arch and analysis of telecommunication market and according to 
the current tendencies on the local access network in  telecommunication segment plans to change the 
obligations of relevant service operators.   IV. TRADE POLICIES BY SECTOR, (4) Services, (iv)  Transit and transport, (a) Transit, Georgian 
ports  69. Poti and Batumi, Georgia's two major Black Se a ports, play a major role in the transit 
corridor system and in regional economic development.   Poti, the main port facility for the entire 
region, handled 8 million tonnes in general liquid and dry cargoes in 2008, and 210,000 containers 
(Table IV.7).  Poti terminal can handle 45,000 t ankers and has a capacity for 60,000 bpd.  The port is 
being refurbished to develop new terminals and in crease freight capacity;  on an annual basis, the sea 
port can handle 6.7 million tonnes of  dry cargo and 3 million tonnes of liquid cargo.  Could Georgia 
explain what refurbishments are being carried out to develop new terminals and increase freight 
capacity? 
Response
 
 Poti Seaport  
Design capacity of Poti Seaport is 600 000 TEU pe r year. 209 614 TEU was handled in 2008 i.e. only 
35% of the design capacity is used. At the same time, 8.0 million tons cargo was handled in 2008, 
7.0 million tons of which is dry cargo.  
Batumi Seaport   
 
Container terminal of the Batumi Seaport st arted operation in 2008 with design capacity of 
320 thousand TEU per year and 44 197 TEU was handled. 
 Considering the above-said, today, seaport capacities fu lly comply with expected demand. In parallel, 
it is planned to construct new container terminal in  the Poti seaport in order to fully realize transit 
potential of Georgia and attract additional cargo. 
 
IV. TRADE POLICIES BY SECTOR, (4) Services, (iv) Transit and transport, (a) Transit, railways 
and roads  It is noted in paragraph 73 that Georgia's non-o il transit potential remains largely untapped;  
Georgia accounts for a relatively small share of the non-oil trade of the Central Asian republics and 
that of the two other South Caucasus countries, Ar menia and Azerbaijan.  Factors that contribute to 
underperformance include poor road conditions and l ong transit times.  In this connection, could 
Georgia specify the possible service activities that w ould have to be developed to exploit the non-oil 
transit potential?  WT/TPR/M/224/Add.1 
 Page 47 
 
 
  Response  
 ROADS  
International Roads:  Total length - 1,495km.
 
 
Construction/rehabilitation of Georgian roads in accord ance with international standards is one of the 
most important priorities of the Government of Georgia.  Today, in the frame of East-West Highway Impr ovement I, II and III projects financed by World 
Bank credit and state budget, approximately 110 km of the highway have already been constructed 
(from Tbilisi to Ruisi), with the design capacity of 40 000 vehicles per day. In the frame of East-West 
Highway Improvement III project, highway constr uction on Ruisi-Agara road section is ongoing and 
will continue till Rikoti (incl. Rikoti Tunnel rehabilitati on). In parallel, there are two main developing 
infrastructure projects which will start in 2010: (i) construction of Highway on Zestaponi-Kutaisi-
Samtredia (70 km) road section by the JICA ( Japanese International Cooperation Agency) loan and 
(ii) construction of highway on Gr igoleti-Sarpi (57 km) road section in the frame of Adjara Bypass 
project financed by Asian Development Bank (ADB) loan.  International roads are mainly in good condition: 80% in good conditions (IRI less than 4). Road from 
Poti/Batumi to Red Bridge (border with the Republic  of Azerbaijan) via Tbilisi is totally in good 
condition. 
 Other Roads:  Internal (3,354km) and Local roads (15,480km
) 
 Construction/rehabilitation of internal and local ro ads is one of the governmental priorities as well. 
More than 900 km of internal roads were rehabilita ted in recent years. Moreover, rehabilitation of 
more than 700 km of roads is underway.  
RAILWAY 
 
Operational length of the Georgian Railway is  1 558 km with the track gauge 1520 mm (R-65), 
including 527 km totally electrified main line (300 km of which is double track line). Transportation 
is available during the whole year.  It is planned to construct Tbilisi bypass and increase sp eed limits on the main railway line, in order to 
improve railway infrastructure capacity. At the same time, refurbishment and renewal of rolling stock 
fleet is in progress. 
 Transported dry cargo in transit regime by Railway  and Road increased by 22% in 2008 compared to 
2007.   
Dry cargo transported by Railway and Road 
Transit regime, million tons 
Transport sectors 2006 2007 2008 
Railway 3.5 3.8 4.7 
Road 0.8 1.1 1.3 
Total 4.3 4.9 6.0 
 WT/TPR/M/224/Add.1 
Page 48  
 
 IV. TRADE POLICIES BY SECTOR, (4) Services, (iv) Transit and transport, (b) Regulatory 
framework for the transport sector.  Paragraph 77 indicates that Georgia has proposed  changing the law on licensing aviation activities, 
so as to open investment in Georgian carriers to foreigners.  Georgia has also started negotiations 
with the European Commission on a comprehensive av iation agreement.  Could Georgia state what 
activities would be opened up to foreign investment?  Response
 
 
In 2005, Georgia announced an "open sky" policy in the civil aviation field. As a result, the 
reconsideration of existing bilateral air services agr eements and drafting of new agreements began in 
order to abolish restrictions on number of air carri ers allowed to perform flights, capacity, frequency, 
destination points and establishment of tariffs a nd make Georgia’s international flight regimes 
maximally liberal. Starting from 2004, new bilateral air services agreements were prepared with the 
countries Georgia already had agreements with and with some new countries. 
 Law of Georgia on licensing civil aviation activities had been amended in 2007. As a result, indispensable condition that the air carrier can be c onsidered as Georgian National Air Carrier only in 
case 50 percents or more of its share is owned by  Georgia or the citizens of Georgia, had been 
abolished, with a view to open investme nt in Georgian carriers to foreigners;  
 
The Batumi International Airport was modernized  and the new Tbilisi International Airport was 
opened in February 2007. The air navigation system s were modernized and re-equipped and currently 
are fully compatible with the international requirements.   
Georgian Civil Aviation Authorities actively cooperate  with International Civil Aviation Organization 
(ICAO) and other international organizations in order to ensure safety in civil aviation. ICAO 
Universal Safety Oversight Audit Program (USOAP ) was carried out in Georgia in May-June 2007. 
The deficiencies pointed out in the final report were published on ICAO web-page. For nearly two 
years after the audit, as a result of the active work  carried out by the Civil Aviation Authorities and 
with the support of the employees of the ICAO Re gional Office, the deficiencies observed by the 
audit had been almost eliminated. Meantime, r ecommendations given during the audit were fully 
implemented in the projects of the legislative regulations shortly after the completion of the audit.   In addition, Georgia started negotiations with th e European Commission in order to conclude a 
comprehensive aviation agreement (European Co mmon Aviation Area Agreement) with the EU. 
 
IV. TRADE POLICIES BY SECTOR, (4) Services, (v) Tourism 
 Paragraph 81 notes that a review of tourism policies,  institutions and infrastructure, conducted with 
the Georgia Department of Tourism and Resorts, fo und substantial tourism potential but also serious 
impediments in terms of room st ock, access to sights and attractions , and infrastructure. This being 
the case, could Georgia indicate whether it has  a policy to promote tourism development? 
 
Response
 
 
Development of tourism industry represents one of th e main priorities of the Government of Georgia. 
The Department of Tourism and Resorts, sub-divi sion of the Ministry of Economic Development of 
Georgia is responsible for creation of tourism polic y of the country and has elaborated the strategy 
which includes the following priorities:   WT/TPR/M/224/Add.1 
 Page 49 
 
 
  1.  Support the development of tourism infrastru cture in the cities as well as in the regions: 
- Hotels in the major cities - Small and medium size overnight stay places,  small size family hotels in the regions 
- Restaurants and food courts in the regions - Information centers 
2. Regular research of the internati onal tourism market trends and demands 
3. Improvement of service quality 
- Regular trainings of staff - Creation of professional training centers in  the regions with the help of foreign 
partners 
4. Attraction of low-cost air companies 
- Support to the development of internal flights 
5. Organization of International Pr omotion and Advertising Campaigns 
- Regular participation in intern ational and regional tourism fairs 
- Close cooperation with foreign media and organization of press tours 
6. Support the development of internal tourism 
7. Creation of resort development concepts and investment packages. 
Besides the ongoing projects, number of achieveme nts in Georgian tourism sector in 2004-2009 
should be particularly mentioned, namely:  -  International arrivals reached over 1,300,000 in 2008, re presenting a growth of 23%. 
International arrivals have continued to grow from 311 603 in 2004 to 983 114 in 2006, 
reaching four times growth in 2008.  
-  Investment in tourism reached over USD 171 million in 2008. Investments have grown 
substantially to over USD 1 billion since 2001. 
-  Tourism export earnings more than tr ipled from USD 147 million in 2004 to 
USD 446.6 million in 2008, which is almo st 35% of total export of services. 
-  In 2006-2009, 118 new hotels were opened. Ther e was a 25% increase in new hotels in Tbilisi 
and more than a 50% increase in Georgian regi ons. Additional extensive hotel development is 
being planned and underway throughout Ge orgia by local and foreign investors.  
-  The following international hotel brands are operating in Georgia: Marriot, Sheraton, 
Radisson. Besides, Kempinski, Park Hyatt, In tercontinental, Meridian hotels are currently 
under construction. 
-  Two international airports operate in Tbilisi and Batumi. 
-  No visas are required for citizens of the EU  member countries and the US– for stays up to 
90 days.  
-  Non-stop flights to Georgia are available from Amsterdam, Cologne, Frankfurt, Munich, 
Istanbul, London, Paris, Prague, Vienna and Kiev.  
-  There are two new tourism vocational traini ng centers in Tbilisi and sea resort Kobuleti 
satisfying all demands of tourism market. Both of them are created for training-retraining of 
low and middle-ranged professionals such as wa iter, front-desk officer, housekeeper, cook, 
barman etc.   
 WT/TPR/M/224/Add.1 
Page 50  
 
 KOREA - QUESTIONS 
 
Question 1
 
 Government Report, pages 6~9, paragraphs 10~28
 
Secretariat Report, pages 10~12, paragraphs 29~35  
Secretariat Report, pages 22~23, paragraph 12~16  
 Korea notes the great strides achieved by Georgi a in reforming its economy and its institutions since 
independence, and in particular, since the Rose revolution.  
 
1) In this context, could Georgia further el aborate how it has been able to implement these 
reform measures successfully in such a short time? 
 
Response
 
 
After the "Rose Revolution", the main key to the success of Georgia in implementing reforms in a 
short time period was the strong will of Georgian  population and Georgian Government to overcome 
the old system and strengthen corruption-free market economy. 
 
The main directions of implemented reforms include: 
 
- Fight against corruption - Civil service reform - Drastic reduction of taxes - Wide-ranging liberalisation of trade 
- Radical reduction of licenses and permits 
- Attractive property ownership rules - Privatisation of state property  Fight against corruption is one of the main goals of the Government of Georgia (GoG). Before the 
"Rose Revolution" Georgia had rather high corrupti on level in every field of interaction between the 
state and a citizen.  
 After the "Rose Revolution", decisive measures take n by the GoG drastically reduced and eliminated 
corruption in state institutions and civil service.   
Concrete steps have been taken to reduce and el iminate incentives for corrup tion. For instance, the 
salaries in the public sector have been significan tly raised, as well as in the judiciary and the 
educational system. One of the most successful anti-corruption reforms has been conducted in the 
education sphere.   The civil service reform was a part of the Governme nt comprehensive reform agenda after the ‘Rose 
Revolution’. The aim was to rati onalize the old, Soviet-type civil service. The number of the 
Ministries was reduced from 28 to 18. Eight een state departments were abolished. 
 
In order to raise the effectiveness of the public service, the salaries of public servants increased 
significantly, making it competitive with the private sector. 
 
In the area of taxation, GoG pursues the policy of reducing the state burden on the taxpayers, through 
reducing the taxes payable and the quantity of ta xes. The number of taxes was reduced from 21 in 
2005 to currently existing 6, namely Personal Inco me Tax (20%), Corporate Income Tax (15%), 
Value Added Tax (18%), Excise, Customs Tax and Pr operty Tax (a local tax established by local self- WT/TPR/M/224/Add.1 
 Page 51 
 
 
  governing bodies within marginal rates regulated by the Tax Code of Georgia). There is no payroll, 
social insurance, capital gains, w ealth, inheritance or stamp duty taxes in the country. The procedures 
have also been simplified and sophisticated.  Trade liberalization is one of the key objectives on Georgia’s economic policy agenda. Georgia has 
undertaken a large number of reform initiatives targeted at streamlining, liberalization and 
simplification of trade regulations and their impl ementation. Starting from 2004 Georgia has almost 
entirely eliminated tariff barriers and drastically reduced non-tariff barriers to trade. These reforms 
contributed to the creation of competitive mark et conditions and business enabling environment, 
diversified international trade and economic ties and thus generated grow th and development. 
 
Part of successful reforms was the drastic re duction (by almost 85%) of number of licenses and 
permits necessary for doing business.   The ownership rights were largely liberalized in th e country. Currently, there are no restrictions in 
place on business or equity ownership for non-resident s, and equal treatment of investors irrespective 
their origin is legislatively guaranteed.  The state-owned enterprises have been and are being pr ivatized. Up to date the majority of the state-
owned companies have been sold to the private inv estors. There are just sev eral large companies in 
state ownership which are generally serving strategic security interests of the country.  
 
2) How was opposition from interest groups with  strong vested interest in retaining the old 
system dealt with to ensure that th ey would not delay the reform process?  
 
Response
 
 
Despite the fact, that opposition from interest gr oups existed, strong political will and will of 
Georgian population helped Georgian Government  to successfully implement reforms. During this 
period, Government maintained public support, as proved by last presidential and parliamentary 
elections.  
 
Question 2  
 Secretariat Report, page 12, paragraphs 36~42
 
 
Korea notes that despite the strong economic p erformance since accession to the WTO, the 
merchandise trade deficit nearly doubled  from 16% of GDP in 2003 to 30% by 2008. This situation 
could pose a threat to the long term stability of the economy.    1) What are some of the measures being ta ken/to be taken to rem edy this situation? 
 
Response
 
 
Promotion and facilitation of foreign trade and especially  the export is the one of the priorities of the 
Government of Georgia’s (GoG) policy. Diversifi cation of foreign trade (mainly export) geography 
and export commodities is the crucial for decrease of trade deficit.  
During 2009 Georgia’s trading partners in e xport and number of export commodities as well has 
increased compared to 2008.  
In IIIQ of 2009 total volume of export increased by  42.2% compared to IQ of 2009. During January-
October, 2009 trade deficit was 34.9% percent less than in the same period of 2008. During the same WT/TPR/M/224/Add.1 
Page 52  
 
 period, Georgia has positive trade balance with 29 partner countries, instead of 21 countries in the 
same period of 2008.  
Deficit of the current account of the Balance of Pa yments for the IIQ of 2009 decreased considerably 
as compared to the previous quarter and IIQ of  2008 and amounted to USD 255.8 million (reduction 
comprised 34.7% and 72.8% correspondingly). 
 
Therefore balance trading with goods has improved and its deficit is 16.6% lower compared to the 
previous quarter and 48.3% less than it was in the IIQ of 2008. 
 It should be mentioned, that during the recent year s, high volume of import was mainly investment-
driven, because based on significant investment in flows, foreign investors imported machinery, 
equipment etc.   
Development of Quality Infrastructure, which is ve ry important for access to international markets by 
Georgian goods is in progress. Further approximati on of national system with EU and international 
standards will contribute to Georgian export possibilities. 
 
2) Did Georgia formulate an industrial policy as  a response to this situation? If so, could 
Georgia explain what the mid-term and long- term goal of this industrial policy is? 
 
Response
 
 
It should be mentioned, that given the rather small scale of Georgian economy, equal development 
opportunities are applied to all sectors of economy. 
 In general, establishment of attractive business environment, including development of different 
industries is crucial for future economic devel opment and international trade facilitation.  
 The Government of Georgia (GoG) implements a wi de range of reforms for further development and 
improvement of entrepreneurial environment. 
 Decision on establishment of free industrial zones was adopted in the aim to promote industrial 
development and facilitate infl ow of modern technologies. 
 Implementation of accelerated and transparent privatization policy will support to business 
development including industrial sectors. 
 
Question 3
 
 
Secretariat Report, page 14, paragraph 39  
Secretariat Report, page 30, paragraph 49  
 Could Georgia provide further info rmation on its plans to develop the hydro-energy sector? What are 
some of the opportunities that will be available to foreign investors? 
 
Response
 
 
Georgia is one of the richest countries in the worl d by hydro resources, as hydro resources take the 
first place among the natural riches of the country. Ther e are 26 000 rivers on the territory of Georgia. 
Around 300 rivers are significant in terms of energy production; their total annual potential capacity is 
equivalent to 15000 MW, while utilised rec ourses comprises only 18% of potential capacity.  
  WT/TPR/M/224/Add.1 
 Page 53 
 
 
  The Government of Georgia (GoG) created the mo st investor-friendly surrounding by offering 
Greenfield Projects based on Build-Own-Operate (BOO) principle, without involvement in any of the 
new projects in equity shares or with the conditio n to take over the Plant after. By signing the 
memorandum of understanding (M oU) with the GoG, investor gains its full support at all the stages of 
the investment. 
 
The Ministry of Energy of Georgia is consideri ng the effective utilization of the country's major 
energy potential - hydropower resources and the construction of small, medium and large hydro 
power stations, creating attractive export opportunities for the country. 
 
In this respect, 75 Greenfield HPP sites with sma ll and medium scale capacity have been identified 
and offered based on Build-Own-Operate (BOO) prin ciple. For up-to-date information, please visit 
the official site of the Ministry of Energy of Georgia: www.minenergy.gov.ge.  
Question 4
 
 
Secretariat Report, page 31, paragraphs 51~53  
 1) Could Georgia confirm whether the specific a reas listed in footnote 26 of page 31 of the 
Secretariat report is an exhaustive list of areas in which Georgia limits foreign investment?  
 
Response
 
 
The restrictions and prohibitions in investment acti vities are stipulated in Article 9 of the Law of 
Georgia on the Promotion of Investment Activities and Guarantees (1996). Besides, the investment activity must be in harmony with all the othe r norms of the Georgian legislation.   
 
Article 9. Ban and Restriction in the Sphere of Realization of Investment 
 
1. On the territory of Georgia placement of inv estments shall be prohibited in the following 
sectors: 
 
a) Designing, production and distribution of nuclear, bacteriological and chemical 
weapons; 
 b) Construction of firing ground for testi ng nuclear, bacteriological and chemical 
weapons; 
 c) Import of nuclear and toxic waste from abroad for the purpose of  burying / 
neutralizing; 
 d) Conducting scientific research  related with human cloning; 
 e) Production of drugs (narcotics);  f) Cultivating plants of poppy, coca bush and cannabis;  g) Activities prohibited under the in ternational treaties of Georgia. 
 h) Import or selling lead containing (over 0.0013 gr per liter) petrol, tetraethyl lead, 
falsified (substandard) household liquid gas (i nvestments in import of tetraethyl lead 
shall be permitted only in cases allowed by  the production technology). (22.07. 99 N 
2299 Sakanonmdeblo Macne N 40 (47)). 
 2. Only the Georgian state shall be permitted to invest in: 
 
a) Production of banknotes, coins, state award badges, postage stamps; 
 b) Activities related with marking of items made of precious metals;  c) Activities related with import, export,  transportation, wholesale realization of 
narcotics of medical designation and in vention of new narcotic substances; WT/TPR/M/224/Add.1 
Page 54  
 
  d) Production, processing, import, export, transporting, wholesale realization and 
development of new types of psychotropic drugs subject to special control; 
 e) Dispatching activities in energy sector. 
 3. On the territory of Georgia placement of investments without granting the right of 
management to foreign and privat e investors shall be permitted in: 
 
a) Activities related with regulation of move ment of marine – transportation means in 
the territorial waters of Georgia and sea port harborage, ensuring their safety and control; 
 b) Dispatching activities of rail transport; 
 c) Activities related with regulation of aircra fts in the Georgian airspace, ensuring flying 
safety and control; 
 d) Production and sale of new military – fighting equipment for the purpose of raising 
defense of the country in agreement with the National Security Council with the 
President of Georgia, designing and testing of new types and modified arms; 
 e) Military – Industrial Complex;  
Activities related with application of nuclear  energy for peaceful purposes (26. 06. 98 N 1513 
Parlmentis Utskebani N 25 -26). 
 
2) As for "trade in drugs for medical purposes" in  footnote 26, could Georgia further explain the 
scope of this limitation?  
 
Response
 
 
Article 9, paragraph 2 of the Ge orgian Law on the Promotion of I nvestment Activities and Guarantees 
(1996) stipulates that only state is empowered to ma ke investment in activities related to the import, 
export, transportation and retail r ealization of narcotic drugs for medical purposes and creation of new 
narcotic drugs for medical purposes.    
 
JAPAN – QUESTIONS  
 
Secretariat Report (WT/TPR/S/24)  
 
I. THE ECONOMIC ENVIRONMENT 
(3) MAIN ECONOMIC DEVELOPMENTS 
(i) Macroeconomic Performance 
 
Question 1: page 7, paragraph 18  
 According to the Secretariat’s report, the unemplo yment rate rose from 12.6% in 2002 to 16.5% in 
2008, and the ratio of poverty is estimated 22.1% in  2008, most of which are in rural areas where 
people continue to rely on low-produc tivity subsistence agriculture.  
 Judging from such a situation, it seems that the urgent issue for job creation and poverty alleviation is to regenerate the rural areas.   Could Georgia explain its plan for the development of the rural economy? 
  WT/TPR/M/224/Add.1 
 Page 55 
 
 
  Response  
 
One of the main goals of Government of Ge orgia (GoG) is to stipulate attractive business 
environment in order to enhance foreign investme nts, facilitate employment generation, stimulate 
entrepreneurial activities in various fields of ec onomy and increase the welfare of citizens throughout 
the country. The main principles of this policy are stipulated in Governmental Program – "United Georgia without Poverty". Another document of Go G - the strategy of "Basic Data and Trends" 
represents the extension of the above-mentioned Progr am and is aimed at further clarification of 
priorities in the light of the achieved pr ogress and considering the new challenges. 
 For development of rural areas GoG is implementing several programs.  GoG pays particular attention to the development of local infrastructure in Georgian regions and 
promotes investments made in rural areas, which help to increase employment level in Georgian 
regions. 
 One of the main challenges for labor market in Georgia is job mismatch and structural unemployment caused by structural changes of economy. At this  regard GoG is implemen ting program "Vocational 
Education and Training Infrastructure Development for Employment". The basis of this program is 
creation of modern and demand orie nted educational centers, which will decrease disparity of demand 
and supply and will promote satisf action of labor market needs in professional human resources.  
 Investment in local infrastructure is one of the com ponents of government strategy against crisis that 
will support the improvement of competitiveness of rural areas.  
 
Despite this, attraction of investment in agricu lture and food processing is foreseen. The strategic 
document "Basic Data and Trends" (2010-2013) states that for increase of agriculture output the 
rehabilitation of land-reclamation system should be implemented. For this direction several programs 
are already implemented with total amount of G EL 16.5 million. Renovation of agricultural technique 
for total amount of GEL 22.4 million is in progress. 
   
Improvement of local infrastructure will support the reduction of disparities in regional development, 
and will increase employment through local population.      Furthermore different projects that support entrep reneurial activities and starting business in rural 
areas are implementing by different internati onal donor organizations (UNDP, MCG -Millennium 
Challenge Georgia, GTC - German Technical Coope ration) and NGO-s with strong support of GoG. 
Representatives of different ministries are the members of Steering Committees and Supervisory Boards.  
(4) DEVELOPMENTS IN TRADE AND INVESTMENT 
(iii) Trends in foreign direct investment (FDI) 
 
Question 2: page 9, paragraph27 ; page17, paragraph 44
 
 According to the Secretariat’s report, the estimated  FDI inflows in 2009 will be decreased by 40% 
compared to the figure in 2008. For furth er economic development and improved business 
environment, could Georgia explain the plan and pr ospect for the restoration of the FDI as well as 
the investor’s confidence on the security and politic al circumstances in Georgia after the armed 
conflict of August 2008?  
 WT/TPR/M/224/Add.1 
Page 56  
 
 Response
 
 
The brief war with Russia in August 2008 and the glob al financial crisis have had a negative effect on 
Georgia’s economic performance and on the inflow of  FDI. However, it should be noted that virtually 
all the investment projects with rare exceptions c ontinue. Foreign investors have remained in the 
country and have kept to their investment plans.  The Georgian economy itself has also proved to be 
surprisingly shock-resilient and has survived the armed conflict with relatively smaller harm. One 
reason for this can be the fact that the Georgian  economy has long been exposed to various internal 
(such as existence of separatist regions, corruption, weak institutions during the previous government) 
and external shocks (such as the Russian embargo of Georgian products and energy pressure) and has 
adapted to them.     
 
After the war, the Government of Georgia has been  working hard to bring the pre-war stability and 
security back. It has work ed closely with both local and foreign investors, providing active investment 
campaign, to re-boost their confidence. The Governme nt of Georgia has used the international support 
it received in the aftermath of Russia’s invasion to stabilize its economy and recover its investment climate. It secured 4.5 billion USD worth of donors’  support, which it will use to rebuild and further 
develop its infrastructure, to support the work of banking institutions and to make sure there is no 
financial gap in the budget. Until now, Georgia entered into agreements for or received 46.9% 
(US$2,125 million, 19% of 2009 forecasted GDP) of the total pledge, for private and public sector 
operations. Georgia will be receiv ing the pledged aid in 2009-2012, which means that the economy 
will be boosted by guaranteed injections of foreign capital.   
After the August 2008 war the international community  has been actively involved in Georgia to help 
restore peace and stability in the country. Most notably the European Union Monitoring Mission 
(EUMM) has been deployed around the conflict zon es to monitor the situation on the ground and to 
contribute to stabilization and normalization in post-conflict Georgia. The four key tasks of the mission are: stabilization, normalization, confidence building, information gathering and delivery. 
Through the mission the European Union receives obj ective information view of the situation on the 
ground.  
The US has also reaffirmed its desire for a close pa rtnership with Georgia, in particular with regards 
to energy security issues. On Janua ry 9th the US and Georgia signed a charter on strategic partnership 
that offers support to Georgia in its conflict with Russia. One of the most significant parts of the 
charter is the section that refers to energy security , as it contains a pledge by the US to support the 
development of a new "Southern Corridor" to help Georgia and the rest of Europe diversify their 
supplies of natural gas by securing imports from Azerbaijan and Central Asia. 
 
Recently the Government has initiated an economic liberty act with the aim to enshrine the key 
economic policies Georgia has successfully pursued  over the recent years in the constitution. The 
liberty act seeks to ensure the i rreversibility of economic reforms a nd to guarantee that taxes remain 
low and flat. The main features of the economic liberty act include: fiscal responsibility, freedom 
from bureaucratic discretion and interference, ensu ring choice in social programs and granting the 
power to tax to people. The latter means that no ne w taxes or increase in tax rates may be introduced 
other than following an affirmative vote in a nationwide referendum. 
  WT/TPR/M/224/Add.1 
 Page 57 
 
 
  III. TRADE POLICIES AND PRACTICES BY MEASURE 
(4) MEASURES AFFECTING PRODUCTION AND TRADE (vi) Intellectual property rights 
 
Question 3: page 59, paragraph 105
 
 
According to the Secretariat’s report, the aut horities do not have ex officio powers to enforce IPR 
protection, except for Customs regarding IP objects in the Customs Register.   If Georgia has any plan to establish or authorize any authorities to enforce IPR protection, please 
provide its detail. If not, please indicate the reason. 
 Response 
 
 
Responsibility for enforcement of IP  rights is shared between differe nt authorities: "Sakpatenti", a 
legal entity of public law, which provides the legal pr otection of the rights of natural persons and legal 
entities in the area of intellectual property protection.  "Sakpatenti" deals with all intellectual property 
titles. "Sakpatenti" performs functions of three agen cies – an industrial property office, a copyright 
office and an agency for the protection of new plant varieties and breeders rights. Responsible 
authorities for enforcement of IPR protection are: The Ministry of Interior, Financial Police and 
Customs Department of the Ministry of Finance. 
 
As regards the IPR enforcement at Georgia’s bor ders, the Customs Depart ment has developed an 
Intellectual Property Objects Register to assist in identification of counterfeited goods at the border. 
Accordingly, the ex-officio  activities are carried out by customs regarding to the IP objects that are 
registered in Customs register. Any intellectual prope rty right holder has the right to register objects 
of intellectual property and the right to require th at the customs suspend goods produced in violation 
of intellectual property. When procedures of regist ration are initiated this in formation is published on 
the web-site of Ministry of Finance www.mof.ge. The information about all registered IPR objects is 
available on this website.    Despite the fact that Georgian authorities, except Customs Department, do not have ex-officio  power 
to act against enforcement cases, Georgian legislati on offers flexible possibilities for IP right holders 
to enforce intellectual property rights. Right holder s have the right to sue for infringement of their 
rights and to claim termination of the acts infringing their rights or creating a risk of their infringement, damages and destruction of infringing devices. The Criminal Code of Georgia stipulates fines with respect to violation of intellectual prope rty rights and imprisonment from 6 months to up to 
2 years.  
 Besides abovementioned, currently Georgia discusses the possibility of ex officio  IPR enforcement (in 
addition to the customs authorities) in the framewo rk of preparation process for future DCFTA with 
the EU.   
Noteworthy, that the amendments to the Georgian  law on Drugs and Pharmaceutical Activities were 
adopted by the parliament in October 2009, according to which IP right holders enjoy right to control 
parallel import on their initiative and regulate this i ssue by distribution agreements or according to the 
exhaustion of rights clause.   
For further harmonization of Georgian IPR legislati on with EU standards "Sakpatetni" in cooperation 
with office of the Prime Minister is currently wo rking on draft amendments to the Patent Law of 
Georgia. Amendments foresee streamlining the pr otection of the industrial design. Besides, 
Government of Georgia is ready to sign the Agreement between the European Community and WT/TPR/M/224/Add.1 
Page 58  
 
 Georgia on Protection of Geographical Indications  of Agricultural Products and Foodstuffs. The 
preparing process is almost finalised.   For the purpose of improving the IPR enforcement,  Georgian Government with assistance of UNDP 
carries out the study in order to assess circulation of pirated and counterfeit products on the Georgian 
market. The study will be completed in early 2010. 
 
IV. TRADE POLICIES BY SECTOR 
(4) Services 
(i) General Agreement on Trade in Services (GATS)  
 Question 4: page 69, para 38
 
 
According to the Secretariat’s report, in the trans portation, construction and insurance sector, which 
are among the few cases subject to restrictions , reforms were implemented during 2004-09.  
 
We would like to know the evaluation of these ref orms. In addition, if you have any plan for further 
reform, could you provide its outline and schedule?  
 
Response  
 
Reforms in Transportation Sector  
Road Transport 
 
In the course of the liberalization policy, pursued by the Georgian Government bilateral agreements 
on road transport are being reviewed. The draft in tergovernmental agreement on International Road 
Transport was prepared, which lifts quantitative and other forms of restrictions as well as fees. The 
agreement will be signed with several countries,  amongst them with the Czech Republic, Hungary, 
Slovakia, Poland, Estonia and Finland. Currently the negotiations are held with the above listed 
countries and their competent authorities for the arrangement of working sessions and finalization of the agreements.  
 
At the same time, the "Law of Georgia on Licenses and Permits" had been amended and nowadays only 3 permits, from previously existing 7, exist in the international road transport sector of Georgia. 
At the same time, transit fee, phyto-sanitary, vete rinary and road fund taxes had been abolished. 
Hereby, in order to maximally facilitate and lib eralize border-crossing procedures, the number of 
controlling services on border-crossing points had been decreased to minimum.  
 
Civil Aviation 
 
In 2005, Georgia announced an "open sky" policy in the civil aviation field. As a result, the 
reconsideration of existing bilateral air services agr eements and drafting of new agreements began in 
order to abolish restrictions on number of air carri ers allowed to perform flights, capacity, frequency, 
destination points and establishment of tariffs a nd make Georgia’s international flight regimes 
maximally liberal. Starting from 2004, new bilateral air services agreements were prepared with the 
countries Georgia already had agreements with and with some new countries.  
Law of Georgia on licensing of civil aviation activ ities had been amended in 2007. As a result, 
indispensable condition that the air carrier can be c onsidered as Georgian National Air Carrier only in 
case 50% or more of its share is owned by Georgia or the citizens of Georgia, had been abolished, 
with a view to open investment in Georgian carriers to foreigners;    WT/TPR/M/224/Add.1 
 Page 59 
 
 
  The Batumi International Airport was modernized  and the new Tbilisi International Airport was 
opened in February 2007. The air navigation system s were modernized and re-equipped and currently 
are fully compatible with the international requirements.   Georgian Civil Aviation Authorities actively cooperate  with International Civil Aviation Organization 
(ICAO) and other international organizations in order to ensure safety in civil aviation. ICAO 
Universal Safety Oversight Audit Program (USOAP ) was carried out in Georgia in May-June 2007. 
The deficiencies pointed out in the final report were published on ICAO web-page. For nearly two 
years after the audit, as a result of the active work  carried out by the Civil Aviation Authorities and 
with the support of the employees of the ICAO Re gional Office, the deficiencies observed by the 
audit had been almost eliminated. Meantime, r ecommendations given during the audit were fully 
implemented in the projects of the legislative regulations shortly after the completion of the audit.   In addition, Georgia started negotiations with th e European Commission in order to conclude a 
comprehensive aviation agreement (European Co mmon Aviation Area Agreement) with the EU. 
 
Maritime Transport 
 
Batumi Seaport  
 
The Government of Georgia transferred "Batumi Oi l Terminal" Ltd. and "Batumi Sea Port" Ltd. for 
49 years to KazMunaiGas (company of Kazakhstan) in 2006. 
 
Poti Seaport 
 
In 2008, the Port of Poti Corporation was priva tized by selling 100% of the shares to the Ras Al 
Khaimah (RAK) Company (United Arab Emirates), in  order to build new port facilities with the Free 
Industrial Zone next to the existing port in the North.  Considering the above-mentioned, maritime transport sector and appropriately, transport of good as 
well as regulation of transportation fees directly depends on negotiations between the cargo owner 
and the private company (owner of the seaport)  and is based on free market and free competition 
principles. 
 In order to present clear picture of positive results of the implemented reforms and their influence on 
the development of the transit potential of Geor gia, please see the following figures (mln tons): 
 
 2004 2005 2006 2007 2008 
Civil Aviation 0.006 0.007 0.008 0.012 0.017 
Road Transport 25.7 26.9 27.2 27.5 27.8 
Sea Ports of Georgia      
Batumi Sea Port 8.2 10.9 13,2 11.2 8.6 
Poti Sea Port 6.1 6.1 6.7 7.7 8.0 
 
Reforms in Construction Sector  
Since Georgia’s accession to the WTO, Government of Georgia (GoG) took obligation of ensuring 
market access without restrictions  and discrimination for foreigners. 
 
Under these obligations, GoG undertook reforms abolishi ng number of restrictions in the construction 
sector. Namely, currently, there are:    WT/TPR/M/224/Add.1 
Page 60  
 
 - No requirements for allowance of only five years to stay in the country for natural 
person entering Georgia,; 
- No restrictions of foreign services except of consultation service; - No requirements for one third of board of directors of Joint Stock Company to be the 
citizens of Georgia (living in Georgia); 
- No requirements for at least one manager of Limited Liability Company to be person 
living in Georgia; 
- No requirements for no less than one third of  administrators of cooperative society to 
be citizens of Georgia; 
- No obligations to be the citizen of Georgia upon foundation of branch; 
- No requirements for no less than 50% of servi ce staff to be the citizens of Georgia.  
 
Reforms in Insurance  
 
Main reforms in the area of insurance were implem ented in 2007-2009. Before that, the regulation of 
insurance system was rather weak and ineffective.  As a result of implemented reform, amendments 
were made in insurance legislation and effective system of supervision was established within the 
National Bank of Georgia (NBG).  One of the main aspects of the reform was the ch anges made in licensing and regulation rules. The 
regulations (e.g. rules of reserves allocation, barrier s for market entrance etc.) were improved. One of 
the main innovations is that currently, insurance companies registered in OECD countries do not need 
additional licensing in order to enter Georgian in surance system. As a result of this reform, well-
known international insurance companies entered Ge orgian insurance market, among them insurance 
giant AIG.  
It is noteworthy, that Government of Georgia set the development of insurance system as one of its 
priorities. The positive step in this direction was state heath insurance program, which involved all the 
private insurance companies in Georgia. This pr ogram assisted the change in insurance market 
structure and its diversification and devel opment of insurance system in Georgia. 
 As a result of implemented reform, culture of  insurance among Georgian population increased 
significantly. Based on the recent available data of  2009, the overall number of the insured population 
in Georgia is 1.6 mln. people. For the reference,  in 2006 just under 60 thousand people were insured. 
 
(iii) Telecommunications  
(a) Main features  
 
Question 5: page 75, paragraph 58
 
 
According to the Secretariat’s report, in the fi xed-line telecommunications  services, there appears to 
be little competition with a quite limited teledensity of 14.7%.  
 
Could Georgia please provide its plan for furth er competition promotion and investment facilitation 
in the area of fixed-line teleco mmunications services, as well as of the mobile telecommunications 
services?   
 
Response  
 
Limited density in fixed-line telecommunication services can be explained by the geographical 
specificity of Georgia, the large territory of whic h is mountainous. For this reason, in the mountainous  WT/TPR/M/224/Add.1 
 Page 61 
 
 
  regions of Georgia, fixed-line communication servi ces are rather rarely used substituted by other 
means of communication (cell-phone communication, etc.).  There are three major operators on the fixed-line communication market: United Georgian Telecom, 
"Akhali Kselebi" and Akhtel Communications. These co mpanies mainly cover big cities of Georgia as 
demand for fixed-line communication in Georgian regi ons is rather low. United Georgian Telecom is 
the market leader, which has 350,000 fixed-line s ubscribers, most of which are in Tbilisi.  
 The cell-phone communication market has been growing rapidly during the recent years. Currently three mobile operators (Geocell, MagtiCom and M obitel) provide services on this market for over 
2.7 million subscribers.  
 
The important component of the state strategy for development of the telecommunications field is a 
creation of competitive environment and minimally regulated system for the operators. So, there are no barriers for private sector investments in any ki nd of projects. Legislative amendments in 2004-
2006 had simplified licensing procedures. According to the law of "Electronic Communications" new 
entrants on the market only have to get authoriza tion to start an operation.  Licensing is needed only 
for acquiring radio frequencies and numbering recourses. Simple procedures for companies willing to 
start operations in this field promote the competition on the market.   On the 21
st of October 2009 under the resolution #525/ 23, Georgian National Communications 
Commission conducted a market rese arch and analysis of telecommunication market and according to 
the current tendencies on the local access network in  telecommunication segment plans to change the 
obligations of relevant service operators.   
__________