RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/ACC/AFG/4 
31 March 2009 
 (09-1636) 
Working Party on the  
Accession of Afghanistan Original:   English 
 
 
 
ACCESSION OF AFGHANISTAN 
 
Memorandum on the Foreign Trade Regime  
 
 
 In a communication circulated in document WT/ACC/AFG/1 on 10 April 2003, the Government of the Islamic Republic of Afghanist an applied for accession under Article XII of the 
Agreement Establishing the World Trade Organization (WTO).  
 The General Council established a Working Party (WT/ACC/AFG/3) on 13 December 2004  
with the following terms of reference:  "To
 examine the application of the Government of the Islamic 
Republic of Afghanistan to accede to the WTO Agre ement under Article XII, and to submit to the 
General Council recommendations which may include a draft Protocol of Accession."   In accordance with the established procedures (W T/ACC/1), the Secretariat is circulating the 
attached Memorandum on the Foreign Trade Regime received from the Government of the Islamic 
Republic of Afghanistan.  WTO Members wishi ng to submit questions on the Memorandum are 
invited to do so by 30 April 2009 for transmission to the Afghan authorities. 
 
  
_______________ 
 
   WT/ACC/AFG/4 
 Page i 
 
 
  TABLE OF CONTENTS 
 
I. INTRODUCTION ................................................................................................................... .1 
II. ECONOMY, ECONOMIC POLICIES AND FOREIGN TRADE ......................................4  
1. Economy ........................................................................................................................ ............4  
(a) General description............................................................................................................ .......4  
(b) Current economic situation..................................................................................................... .8 
2. Economic Policies.............................................................................................................. ......12  
(a) Main directions of the ongoing economic policies................................................................12  
(b) Monetary and fiscal policies................................................................................................... 16 
(c) Foreign exchange and payments system, relations with International Monetary 
Fund, application of foreign exchange controls ...................................................................20  
(d) Foreign and domestic investment policies ............................................................................20  
(e) Competition policies........................................................................................................... .....21  
3. Foreign trade in goods and services ......................................................................................21  
4. Domestic trade in services including va lue and composition of foreign direct 
investment..................................................................................................................... ...........26  
5. Information on financial movements related to nationals working abroad, 
remittances .................................................................................................................... ..........27  
6. Information on growth in trade in goods and services over recent years and 
forecasts for years to come.................................................................................................... .27 
III. FRAMEWORK FOR MAKING AND ENFORCING POLICIES AFFECTING 
FOREIGN TRADE IN GOODS AND TRADE IN SERVICES .........................................28  
1. Powers of executive, legislative and judicial branches of government...............................28  
2. Government entities responsible for maki ng and implementing policies affecting 
foreign trade .................................................................................................................. ..........30  
3. Division of authority between cent ral and sub-central governments.................................31  
4. Legislative programmes or plans to change the regulatory regime ...................................32  
5. Laws and Legal Acts............................................................................................................ ...32 
6. Description of judicial, arbitral, or ad ministrative tribunals or procedures ....................32  
IV. POLICIES AFFECTING TRADE IN GOODS ...................................................................34  
1. Import Regulations ............................................................................................................. ....34  
(a) Registration requirements for engaging in importing.........................................................34  
(b) Characteristics of national tariff ...........................................................................................34  
(c) Tariff quotas, tariff exemptions.............................................................................................35  
(d) Other duties and charges, specifying any charges for services rendered ..........................36  
(e) Quantitative import restrictions, includi ng prohibitions, quotas and licensing 
systems ........................................................................................................................ .............36  
(f) Import licensing procedures ..................................................................................................36  WT/ACC/AFG/4 
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  (g)
 Other border  measures.......................................................................................................... .37 
(h) Customs valuation.............................................................................................................. .....37  
(i) Other customs formalities ...................................................................................................... 37 
(j) Pre-shipment inspection ........................................................................................................ .37 
(k) Application of internal taxes on imports...............................................................................37  
(l) Rules of origin ................................................................................................................ .........38  
(m) Anti-dumping regime............................................................................................................ ..38 
(n) Countervailing duty regime ...................................................................................................38  
(o) Safeguard regime ............................................................................................................... .....38  
2. Export Regulations ............................................................................................................. ....38  
(a) Registration requirements for engaging in importing.........................................................38  
(b) Customs tariff nomenclature, types of dut ies, duty rates, weighted average of 
rates.......................................................................................................................... ................38  
(c) Quantitative export restrictions, includi ng prohibitions, quotas and licensing 
systems ........................................................................................................................ .............39  
(d) Export licensing procedures...................................................................................................3 9 
(e) Other me asures ................................................................................................................. ......39  
(f) Export financing, subsidy and promotion policies...............................................................39  
(g) Export performan ce requirements........................................................................................39  
(h) Import duty drawback schemes ............................................................................................39  
3. Internal policies affecting foreign trade in goods.................................................................39  
(a) Industrial policy, including subsidy policies.........................................................................39  
(b) Technical regulations and standards, including measures taken at the border 
with respect to  imports ........................................................................................................ ...40 
(c) Sanitary and phytosanitary measures, in cluding measures taken with respect to 
imports ........................................................................................................................ .............40  
(d) Trade-related investment measures ......................................................................................40  
(e) State-trading practices........................................................................................................ ....41  
(f) Free zones ..................................................................................................................... ...........41  
(g) Free economic zones ............................................................................................................ ...41 
(h) Trade-related environmental policies ...................................................................................41  
(i) Mixing regulations ............................................................................................................. .....42  
(j) Government-mandated counter-trade and barter...............................................................42  
(k) Trade agreements leading to country-specific quotas allocation........................................42  
(l) Government procurement practices, including general legal regime and 
procedures for tendering, dealing with  tenders and award of contracts ...........................42  
(m) Regulation of trade in transit................................................................................................. 42  WT/ACC/AFG/4 
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  4. Policies affecting foreign trade in agricultural products.....................................................43  
(a) Imports – i.e. comprehensive descript ion of the types of border protection 
maintained:  customs duties and/or any other border measures........................................43  
(b) Exports – i.e. description of, and the budgetary expenditure and any revenue foregone involved in each of the export bord er measures...................................................43
 
(c) Export prohibitions and restrictions.....................................................................................43  
(d) Export credits, export credit guarantees or insurance programmes .................................43  
(e) Internal policies – i.e. description of, and the budgetary expenditure and any 
revenue foregone involved in each of the domestic support measures in place.................43  
5. Policies affecting foreign trade in other sectors ...................................................................44  
(a) Textiles regime ................................................................................................................ ........44  
(b) Policies affecting foreign trad e in other major sectors........................................................44  
V. TRADE–RELATED IN TELLECTUAL PROPERTY REGIME......................................44  
1. General........................................................................................................................ .............44  
(a) Intellectual property policy................................................................................................... .44 
(b) Responsible agencies for policy formulation and implementation .....................................44  
(c) Membership of international intellectua l property conventions and of regional 
or bilatera l agreements........................................................................................................ ...45 
(d) Application of national and m.f.n. treatment to foreign nationals .....................................45  
(e) Fees and taxes................................................................................................................. .........45  
2. Substantive standards of protection, including procedures for the acquisition 
and maintenance of intellectual property rights ..................................................................45  
(a) Copyright and related rights, including rights of performers, producers of 
phonograms and broadcasting organizations.......................................................................45  
(b) Trademarks, including  services marks .................................................................................45  
(e) Patents........................................................................................................................ ..............46  
(f) Plant variety protection....................................................................................................... ...46 
(g) Layout designs of integrated circuits ....................................................................................46  
(h) Requirements on undisclosed information, including trade secrets and test data............46  
(i) Other categories of in tellectual property..............................................................................46  
3. Measures to control abuse of intellectual property rights...................................................46  
4. Enforcement .................................................................................................................... ........46  
(a) Civil judicial procedures and remedies.................................................................................46  
(b) Provisional measures ........................................................................................................... ...47 
(c) Administrative procedures and remedies.............................................................................47  
(d) Special border measures........................................................................................................ .47 
(e) Criminal procedures............................................................................................................ ...47 
5. Laws, decrees, regulations and other legal acts relating to the above................................47  WT/ACC/AFG/4 
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  6.
 Statistical data on applications for and grants of intellectual property rights, as 
well as any statistical data on their reinforcement...............................................................47  
VI. TRADE-RELATED SE RVICES REGIME .........................................................................47  
1. General........................................................................................................................ .............47  
2. Policies affecting Trade in Services .......................................................................................50  
(a) Government departments, agencies, professional associations or other bodies 
with authority or a role relevant to the conduct of service activities .................................50  
(b) Judicial, arbitral or administrative tr ibunals or procedures providing for the 
review of, or remedies in relation to, admi nistrative decisions affecting trade in 
services ....................................................................................................................... ..............50  
(c) Provisions, including those in internat ional agreements, concerning qualification 
requirements and procedures, technical standards and licensing and/or registration requirements for the supply of services ...........................................................50
 
(d) Provisions governing the existence and operation of monopolies or exclusive 
service s uppliers .............................................................................................................. ........51  
(e) Provisions relating to safeguard measures as they apply to trade in services ...................51  
(f) Provisions relating to international transfers and payments for current 
transactions of services....................................................................................................... ....51  
(g) Provisions relating to capital transactions affecting the supply of services.......................51  
(h) Provisions governing the procurement by  governmental agencies of services..................51  
(i) Provisions concerning any form of aid, gran t, domestic subsidy, tax incentive or 
promotion scheme affectin g trade in services.......................................................................51  
3. Market Access and National Treatment ...............................................................................51  
(a) Limitations on the numb er of service suppliers ...................................................................51  
(b) Limitations of the total value of service transactions or assets...........................................51  
(c) Limitations on the total number of servi ce operations or on the total quantity of 
service output ................................................................................................................. .........51  
(d) Limitations on the total number of natural persons that may be employed in a 
particular service sector ...................................................................................................... ...51 
(e) Restrictions on, or requirements of specifi c types of legal entity through which a 
service may be  supplied........................................................................................................ ..52 
(f) Limitations on the participation of foreign capital ..............................................................52  
(g) Measures providing for less than the trea tment accorded to national services or 
service s uppliers .............................................................................................................. ........52  
4. Most-Favoured-Nation Treatment ........................................................................................52  
VII. INSTITUTIONAL BASE FOR TRAD E AND ECONOMIC RELATIONS 
WITH THIRD COUNTRIES ................................................................................................52  
1. Bilateral or plurilateral agreements relati ng to foreign trade in goods and trade 
in services.................................................................................................................... .............53  
2. Economic integration, customs union  and free-trade area agreements.............................53  
3. Labour markets integration agreements ..............................................................................58   WT/ACC/AFG/4 
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  4. Multilateral economic cooperation, memb ership in the multilateral economic 
organizations, trade-related programmes of other multilateral organizations.................58  
ANNEX 1 ........................................................................................................................ ......................61  
ANNEX 2 ........................................................................................................................ ......................64  
ANNEX 3 ........................................................................................................................ ......................68  
ANNEX 4 ........................................................................................................................ ......................73  
ANNEX 5 ........................................................................................................................ ......................77  
ANNEX 6 ........................................................................................................................ ......................78  
ANNEX 7 ........................................................................................................................ ......................79  
ANNEX 8 ........................................................................................................................ ......................88  
ANNEX 9 ........................................................................................................................ ......................91   WT/ACC/AFG/4 
 Page 1 
 
 
  I. INTRODUCTION 
The Islamic Republic of Afghanistan emerged in  late 2001 as a country that was devastated 
like few others in modern history.  During nearly  three decades of conflict there was extensive 
damage, or in many areas complete destruction, to the country's physical, institutional, human and 
social infrastructure.  As a result, Afghanistan today stands as one of the world's poorest and least 
developed countries, faced with enormous  social and economic challenges.   
Afghanistan's economic outlook has improved significantly during the last seven years.  The 
democratically elected government remains firmly  committed to the re-establishment of a viable, 
private sector-led market-based economy as the most effective means for raising the living standards 
of the Afghan people.  Since 2001 there has been significant social and economic progress in a 
number of areas, including: 
− Macroeconomic stability has been established, based upon disciplined fiscal and monetary 
policies; a new currency was successfully introd uced; inflation has ge nerally remained low 
while the exchange rate has been stable; 
− Sixteen licensed private commercial banks are operating; a leasing and financing company 
has been established; thirteen microfinance in stitutions are providing credit to almost 200,000 
active clients in 27 provinces; 
− State-owned enterprises are being privatized, corporatized or liquidated; 
− Free, privately-owned media outlets have been established; 
− Modern commercial laws and regulations that re flect international standards are being put in 
place; 
− Electricity generation capacity has almost doubled compared to 2002; 
− Over 12,000 kilometres of roads have been  rehabilitated, improved, or newly built; 
− Kabul International Airport has been expanded a nd extensively rehabilitated.  Private airlines 
have entered the aviation sector and estab lished air links thro ughout the region; 
− An important new bridge has opened up direct road links to Tajikistan and greatly reduced 
transportation times through to Urumqi in China,  one of the fastest growing trade hubs in the 
world; 
− Two million urban residents have benefited fro m investments in water supply; more than 
three million people have benefited directly  from the rural water supply and sanitation 
activities in the country; 
− Rehabilitation of irrigation infrastructure is being given high priority; of some 2,100 
rehabilitation projects, approximately  1,200 have been completed; 
− Major advances have been made in opening up  the telecommunications sector to private 
sector investment under an "investment friendly" regulatory framework; the number of phone subscribers has increased from fewer than 20,000 to more than five million in less than six 
years; and 
− The exploration and development of Afghanistan 's substantial mineral deposits has begun in 
earnest.  The first major investment for the development of the Aynak copper deposits was 
recently announced. 
Despite the considerable economic progress that has been made in recent years, a great deal 
more needs to be done before the economy will have  the capacity to sustain the high levels of 
economic growth that will be re quired to provide adequate empl oyment opportunities and incomes for 
the Afghan people.   WT/ACC/AFG/4 
Page 2  
 
 In 2008 the government completed the Af ghanistan National Development Strategy
1 (ANDS), 
which was undertaken with extensive consultation w ith Afghans from all provinces and all walks of 
life.  The ANDS was subsequently endorsed by th e international community at the International 
Conference in Support of Afghanistan, held in Paris in June 20082.  
The ANDS represents an important milestone in Afghanistan's social and economic 
development.  The government has for the first tim e been able to comprehensively put forward the 
country's detailed development prio rities and set out the policies, projects and programs that will be 
required to achieve these objectives.   
A core objective of the ANDS is the creation of a sound foundation for sustainable economic 
growth.  For these efforts to succeed there are a num ber of major challenges that must be overcome; 
and included among the critical steps that must be  taken to build a strong economy in the coming 
years are: 
− Afghanistan's commercial ties with the re gional and global econom ies were severely 
disrupted during the period of political and econom ic isolation and must be re-established and 
strengthened.  Substantially increased levels  of trade will be essential for accelerating 
economic growth and development. 
− The country's "hard infrastructure", including ro ads, reliable supplies of water and power is 
currently inadequate to support hi gh levels of economic activity or  to enable critical economic 
linkages to domestic and foreign markets.  To  address this, substantially increased investment 
in infrastructure will be maintained  over the next one to two decades. 
− Economic governance is still weak, in la rge part because the corresponding "soft 
infrastructure", which includes the necessary human and institutional capacity necessary for 
an economy to function, is largely lacking.  Hi gh levels of investment in education, vocational 
training and institutional capacity development w ill remain a high priority for the government 
and the international community. 
A strategic objective of the ANDS is to enable  the private sector to lead the country's 
economic development within a competitive mark et-based economy in which the role of the 
government is policy maker and regulator, not direc tly engaged in production.  To achieve this, the 
government is firmly committed to the establishmen t of a strong enabling environment that will 
support a competitive private sector3.  Progress is being made in a number of areas, including for 
example, the enactment and implementation of ke y commercial laws and regulations.  A specific 
focus of these efforts is to create conditions that will encourage increased private investment in the 
development of natural resources and infrastructure.   
- The Role of International Trade  
With its strategic central location, Afghanistan has a very long history of active participation 
in trade throughout Asia and with the West.  The count ry was once an integral part of the fabled Silk 
Road trade route connecting China with Europe and the Middle East.  Located at the heart of one of 
the most economically dynamic regions in the world, Afghanistan now has the opportunity to 
                                                      
1 The ANDS also serves as Afghanistan's Poverty Reduction Strategy Paper.  This document can be 
obtained at www.ands.gov.af. 
2 See the Declaration of the Intern ational Conference in Support of Afghanistan, issued under the 
authority of the Three Co-chairs:  the President of the Fr ench Republic, the President of the Islamic Republic of 
Afghanistan, and the Secretary-General of the United Nations, Paris; 12 June 2008.  
3 For more details, see the government's A Policy for Private Sector Growth and Development , 
presented at the Enabling Environment Conference, June 2007, and the ANDS  Private Sector Development 
Sector Strategy;  both are available at www.ands.gov.af .    WT/ACC/AFG/4 
 Page 3 
 
 
  stimulate its own economic growth through increased trad e, but also to contribute to increased trade 
within South and Central Asia that will help to en hance future political stability within the region.   
A key element in the Afghan government's strate gy for economic growth and development is 
the continuance of an open trade policy that w ill encourage a competitive commercial environment; 
provide a basis to attract increased investment in activities that will do business in regional markets; 
avoid the high costs incurred with pr otectionist policies.  In addition, very high priority is being given 
to efforts to expand regional economic cooperation,  including initiatives aimed at further developing 
regional transportation and transit infrastructure; f acilitating regional trade and investment flows; and 
developing Afghanistan as a regional "trade hub" li nking Central and East Asia with the Middle East 
and South Asia4. 
A critical element in Afghanistan's strategy to expand international trade is successful 
accession to the WTO.  Due to earlier geo-political constraints, Afghanistan did not accede to the 
General Agreement on Tariffs and Trade (GATT).  When the WTO was established in 1995, the 
country was suffering from a civil war and the sub sequent conflict that continued until late 2001.  
With the establishment of the Transitional G overnment in June 2003 and the support of the 
international community, Afghanistan was given Obser ver status to the WTO on 13 December 2004.  
Preparations to formally accede have been  actively underway since that date.   
Membership in the WTO is expected to greatly  strengthen the environment for international 
trade essential for Afghanistan's effective integrati on into the world economy.  As a relatively small 
country, Afghanistan stands to benefit from th e reliance on well established rules concerning 
international trade among WTO members and from equa l access to the markets of member countries.  
An immediate benefit from the accession process is derived from the process of reviewing all laws 
and regulations relating to interna tional trade to ensure that they are consistent with international 
standards and WTO requirements.   
In the light of the foregoing, the Government of the Islamic Republic of Afghanistan submits 
this Memorandum on its Foreign Trade Regime  in accordance with the WTO procedures for 
negotiations under Article XII of the Marrakesh  Agreement on Establishing the World Trade 
Organization.  The main purpose of this Memorandum  is to furnish the WTO with information on the 
current state of the Afghan economy and preva iling commercial laws, re gulations and economic 
policies relating to international trade.  The Af ghan government is prepared and willing to provide 
additional information if and when requested  by the members of the Working Party. 
When considering this Memora ndum and Afghanistan's bid to join the WTO,  Members are 
encouraged to consider the unique legal and regula tory situation of the country at this time.  
Afghanistan's trade in goods and services, as well as  intellectual property righ ts protection, is still 
under-regulated as a result of its recent history.  Many areas of national legislation and regulation pertaining to WTO rules and principles are in the process of being strengthened and reformed in order to meet international standards.  An absence of re gulation at this point in time is not necessarily 
intentional and should therefore not be interpreted as a decision to abstain from appropriate regulation 
in the future.  
- Managing Afghanistan's Accession Process 
 
The Afghan government remains committed to joining the WTO.  It is recognized that the 
accession process will entail the active participation of many ministries and agencies within the 
government as well as civil society organizations, the private sector and the general public.  To 
                                                      
4 Two important Regional Economic Cooperation Conferences were held in Kabul (2005) and New 
Delhi (2006).  Information on these conferen ces can be obtained at www.ads.gov.af.  WT/ACC/AFG/4 
Page 4  
 
 provide overall guidance for this process the govern ment will establish a Presidential Commission on 
WTO Accession in the Office of the President.  Th is Commission will regularly brief the President 
and the Cabinet on the trade related issues being addressed during the accession process and will 
serve as the principal point of contact between the WTO and the Afghan government.   
The Ministry of Commerce and Industry (MoCI) w ill continue to be the central institutional 
focal point for the development and implementation of Afghanistan's trade policies and will be the 
agency with primary long term responsibility for maintaining the relationship between the Afghan 
government and the WTO.  The MoCI, the Ministry of Finance and the Ministry of Economy will provide institutional support for the Commission throughout the accession process.   
- Economic Data
 
Due to the long and nearly complete disruption of statistics collection systems in Afghanistan, 
the reliability and consistency of av ailable data and statistics are still very limited.  Significant efforts 
are underway to rectify this situation; however re -establishing these institutio ns and procedures will 
require time.  For the purpose of this Memorandum  official data published by Afghan government 
institutions was used to the maximum extent possible.   The government is aw are that in some cases 
there are significant discrepancies between offici al data or statistics and those published by 
international institutions, such as the Interna tional Monetary Fund (IMF) and the World Bank. 
II. ECONOMY, ECONOMIC POLICIES AND FOREIGN TRADE  
1. Economy (a) General description 
- Geography
 
Afghanistan is a land-locked and mountainous  country with an area of 652,864 square 
kilometres situated in South-Central Asia.  Its climat e is arid to semi-arid with cold winters and hot 
summers.  The Hindu Kush mountain range runs from  northeast to southwest through the middle of 
the country.  The north-western, western, and s outhern border areas are primarily desert plains and 
rocky ranges.  The southeast and northeast borders rise into the major, glacier-covered peaks of the 
Hindu Kush, creating meadows and pasture lands, and extension of the western Himalayas, with the 
highest peak in Nowshak (7,485m).  The northern border is formed by the river Amu Darya.  Only 12 per cent of its total land area is arable and l ess than 6 per cent is currently cultivated.   
The country is bound in the north by Turkmenistan, Uzbekistan, and Tajikistan; on the east by China; 
on the south by Pakistan; and in the west by Ira n.  The capital Kabul lies in the east and is 
1,800 meters above sea level.  There are 34 prov inces under a unitary structure of government.  The 
democratic government is based on a presidential system.    WT/ACC/AFG/4 
 Page 5 
 
 
  Table 1 - Land Boundaries with Afghanistan5 
Country Land Boundary 
China 76 km 
Iran 936 km 
Pakistan 2,430 km 
Tajikistan 1,206 km 
Turkmenistan  744 km 
Uzbekistan 137 km 
 
- Population  
Although there is a lack of accurate census  and economic data, according to the Central 
Statistics Office (CSO) the estimated population in 2008/09 is more than 25 million.  In addition, 
more than 2.7 million Afghans still remain outside the country, many as refugees due to the decades 
of conflict and political turmoil.  It is noteworthy  however that more than 5.3 million Afghans have 
returned since the establishment of  the Interim Administration in 2002.  The annual population growth 
is estimated at 2.03 per cent6.  The literacy rate in 20077 was 36.4 per cent.  According to the Ministry 
of Education, the rate of literacy is expected  to reach 50 per cent within five years.   
Table 2 - Provinces with Area and Population (2008/09)  
No. Provinces Area8 
(sq km) Population9  
(thousands) 
1 Balkh 16,777.97 11,144.8 
2 Badakhshan 43,436.36 845.9 
3 Baghlan 20,778.61 804.0 
4 Badghis 20,316.54 441.4 
5 Bamyan 14,893.86 398.0 
6 Dia Kundi 16,744.98 410.3 
7 Faryab 20,518.98 884.4 
8 Farah 49,828.45 456.6 
9 Ghazni 21,752.23 1,092.6 
10 Ghor 37,049.53 614.9 
11 Helmand 58,349.04 821.8 
12 heart 54,622.77 1,642.7 
13 Jowzjan 44,860.59 476.7 
14 Kandahar 54,005.95 1,057.5 
15 Kabul 4,600.85 3,449.8 
16 Kunduz 7,949.92 882.9 
17 Kapisa 1,883.76 392.9 
18 Khust 4,288.28 511.6 
19 Kunar 4,863.42 401.0 
20 Logar 4,383.94 349.0 
21 Laghman 3,929.84 396.8 
22 Nemroz 41,811.18 139.9 
23 Nengarhar 7,364.14 1,333.5 
24 Nuristan 8,951.47 131.9 
25 Parwan 5,570.58 589.7 
                                                      
5 Source:  Cartography Agency of Afghanistan, 1385 (2006). 
6 Source: Afghanistan Statistical Yearbook 2007/08, Issue 29, September 2008, page 7. 
7 Source: Ministry of Education (Letter No: 1820 Date: 2 Nov 2008).  
8 Source: General Department of Geodesy and Cartography Year (2006/07). 
9 Source: Estimated Population of Afghanistan CSO Year (2008-2009). WT/ACC/AFG/4 
Page 6  
 
 No. Provinces Area8 
(sq km) Population9  
(thousands) 
26 Paktia 5,280.21 490.9 
27 Paktika 19,069.62 387.3 
28 Panjsher 3,738.79 136.7 
29 Samangan 12,905.17 344.4 
30 Sar-i-Pul 15,058.93 496.9 
31 Takhar 12,307.93 870.9 
32 Urzgan 10,893.12 311.9 
33 Wardak 10,592.78 531.2 
34 Zabul 17,316.02 270.6 
 
- Comparative Advantage and Economic Potential  
Afghanistan's economic potential is reflected in the human and natural resources with which 
the country is well endowed.  Some of the areas wh ere Afghanistan currently has, or is expected to 
develop comparative advantage include: 
− The development of abundant mineral resources,  including natural gas, petroleum, coal, 
copper, chromate, talc, barites, sulphur, lead, zinc, iron ore, salt, silver, precious and semi-
precious stones and marble;  
− The development of fertile agricultural areas w ith the demonstrated potential for producing 
high quality fruits and vegetables; 
− Activities that utilize Afghanistan's strategic location offering the potential to become a 
significant energy transit corridor between the en ergy surplus countries of Central Asia and 
the markets of South Asia where there is a rapidly growing demand for imported energy 
supplies; 
− Commercial activities that will make use of a gr owing industrial parks program that provides 
access to commercial land to enable indust rial investment and expansion; and 
− A robust traditional handicrafts sector pr oducing carpets, rugs, flooring and karakul. 
According to a 2006 survey carried out by the United States Geological Survey (USGS) and 
the Afghan Ministry of Mines, previously undiscove red natural gas reserves in northern Afghanistan 
are estimated to range from 3.6 to 36.5 trillion cubic feet; estimates of oil reserves range from 0.4 to 
3.6 billion barrels; and estimates for natural g as liquids range from 126 to 1,325 million barrels10.  
Despite these potentially rich resources, Afghanistan  still largely utilizes traditional sources of energy 
such as coal, wood and charcoal. 
Electricity consumption (per capita) remains well below international averages.  Currently, 
Afghanistan is severely deficient in electric ity generating capacity, relying on power purchase 
agreements with neighbouring countries.  It is est imated that less than 20 per cent of the population 
have access to public power (grid-supplied), but even wh en available, this service is limited, operating 
only on certain days and for a limited number hours.   
The Afghan economy continues to be based pr edominantly on agriculture, despite only 
12 per cent of land being arable and less than half of  this being currently cu ltivated.  The share of 
GDP derived from the agriculture and livestock sector was 31.4 per cent (2007/08), the main products 
being wheat, corn, barley, rice, cotton, fresh and dry fruits, nuts, karakul pelts, carpets, wool and 
mutton.  Agricultural production is constrained by  a high dependence on unreliable winter snows and 
                                                      
10 United States Geological Survey (2006) prepared in cooperation with the Afghanistan Ministry of 
Mines and Industry and the U.S. Trade and Development Agency:  U.S. Geological Survey and Afghanistan 
Ministry of Mines and Industry Cooperative Assess ment of Afghanistan's Undiscovered Oil and Gas .  WT/ACC/AFG/4 
 Page 7 
 
 
  spring rains for water.  Irrigation infrastructure was neglected and in many areas destroyed or heavily 
damaged, during the years of conflict.  As a resu lt irrigation facilities are currently unable to meet 
current needs.  Limited use is made of mach inery, chemical fertilizers and pesticides.   
The services sector, consisting mainly of transport, government, wholesale and retail trade 
and telecommunications, makes the largest contribut ion to GDP.  Within the industrial sector, which 
accounts for approximately one quarter of the economy, manufacturing a nd construction activities 
were the main contributors to GDP.  Constructio n has grown significantly in recent years, based 
largely on foreign-funded reconstruction activities a nd investment in physical infrastructure.   
Table 3 - Sectoral Contribution to GDP (percentages)11 
Sectors 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 
Agriculture 49.8 48.5 37.2 35.9 30.9 31.4 
Industry 20.1 21.3 24.4 24.4 26.2 25.1 
Services 30.1 30.2 38.3 39.7 42.9 43.5 
 
Figure 1: Sectoral Contribution to GDP 2007/08  
 
- Main Economic Indicators  
Since 2002/03 Afghanistan's economy has consiste ntly experienced high rates of growth.  
Between 2002/03 and 2007/08, GDP grew at an annual average rate of 15.7 per cent, albeit starting 
from a very low base in 2001, (see Table 4).  Th is strong economic performance has been based 
largely on the recovery of agriculture; the genera l revival of economic activity after the end of a 
prolonged period of conflict and ec onomic isolation; and substantial international financial support for 
ongoing reconstruction activities.   
Afghanistan's strong economic performance has been supported by consistently sound 
macroeconomic policies, which included a highly successful currency reform in late 2002; a prudent 
"no-overdraft" policy prohibiting dom estic financing of the budget de ficit; prudent monetary policies 
and management of the exchange rate that brought inflation down to 4.4 per cent in 2006/0712.  (Note 
                                                      
11 Source:  Da Afghanistan Bank and IMF (Letter No. 161 date, 21/1/1387/March 2008). 
12 Da Afghanistan Bank, letter No. 35 dated 21/1/1387/March 2008. Sectoral Contribution to GDP (per cent) 2007-08
Services, 43.5
Industry, 25.1Agriculture, 
31.4WT/ACC/AFG/4 
Page 8  
 
 however, that inflation as measured by the overall consumer price index, increased sharply in 2007/08 
to 20.6 per cent
13).  
Table 4 - Economic Indicators14 
Indicator 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 
Nominal Official GDP 
(US$ Million) 4,389.8 4,767.4 5,732.7 6,851.7 8,186 10,170 
Deflator for GDP 100 103.8 110.9 120 130 139 
Annual growth of real GDP (%) 28.6 14.3 9.4 14.5 11.2 16.2 
Population in Million 21.8 22.2 23.2 23.6 24.1 24.5 
Nominal GDP per capita 201 215 247 290 340 415 
 
Progress has been made in mobilizing domestic re venue, which rose from negligible levels in 
2003/04 to 6.7 per cent of GDP in 2007/0815.  In trade reform – import duties have been rationalized 
and customs administration reforms are underway.  In  the financial sector, the Central Bank has been 
made legally autonomous; 16 commerc ial banks have been licensed and are currently operating.  
(b) Current economic situation 
- Economic Reforms  
While the economic response of the private sect or has been encouraging, moving into a 
period of sustainable market-driven growth will re quire overcoming substan tial obstacles arising not 
only from the effects of the civil conflict but also from two decades of significant state control of the 
economy.  In addition to the major efforts over the past few years to increase security and rehabilitate 
basic infrastructure, the government has focused  on the establishment of a sound business enabling 
environment to encourage increased private sector growth.  Significant accomplishments in this area 
include the following: 
- Banking and Macroeconomic Policy Reforms  
Afghanistan has successfully introduced a new currency, and instituted sweeping reforms at 
Da Afghanistan Bank (the central bank), includi ng for example, a new central bank law; a new 
banking law; consistent monetary  and exchange rate policies.  
Important initiatives have been implemented to reform fiscal policy and management, 
including for example, the centralization of re venue collection and management; customs clearance 
automation; the introduction of an income tax; and the reform of custom laws16.  
Da Afghanistan Bank has adopted substantial reforms in banking operations (including 
payment systems); bank supervision; and monetary policy.  Institutional strengthening at DAB has 
entailed branch modernization and broad-based cap acity development programs for bank staff.  In 
addition, assistance to private commercial banks h as been provided in some cases for staff capacity 
development. 
                                                      
13 Afghanistan Statistical Yearbook 2007/2008, Issue 29, September 2008, page 222. 
14 Source: Afghanistan Statistical Yearbook 2007/2008, Issue 29, September 2008, page 148 and 
Statistical Yearbook 2006, page 154.  
15 Ibid, page 249 and Afghanistan Statistical Yearbook 2006, page 261. 
16 Source: Da Afghanistan Bank and IMF (Letter No, 161 date, 21/1/1387/March 2008).  WT/ACC/AFG/4 
 Page 9 
 
 
  Afghanistan has maintained a liberal foreign exch ange regime with mini mal restrictions and a 
highly stable exchange rate.  Reasonable price stab ility has been maintained, with only moderate rates 
of inflation.   
- Financial Sector Reforms  
Reforms in the financial sector have included the passage and implementation of modern 
banking legislation in 2004 and expanded opportunities in the financial sector for greater private 
sector participation.  As of the end of 2008, 16 licensed commercial banks were in operation.  
Nevertheless, access to credit continues to be a significant impediment to economic growth.  The 
deepening of financial markets, particularly for credit, insurance and leasing continue to be high 
priorities for the government's ANDS Private Sector Development Sector Strategy.   
- Public Sector Institutional Reforms  
The Afghan government is engaged in an ongoi ng comprehensive program of civil service 
reform to rationalize the size of government, strengthe n the capacity of civil servants; and increase the 
efficiency of public institutions.  
- Reforms of Business Procedures and Administrative Barriers to Trade  
Business licensing procedures were streamlined  in 2004.  This process, which once required 
up to three months, has been reduced to a few days.   
Investment procedures have been streamlined w ith the implementation of modern investment 
legislation and establishment of the Afghan Investme nt Support Agency (AISA) as a "one stop shop" 
for investors.   
Extensive reforms and modernization initiatives ha ve been introduced in import and export 
procedures increasing transparency, reducing comp lexity and enhancing trade facilitation.   
The Export Promotion Agency of Afghanistan (EPAA) was established in September 2006.  
The EPAA serves as a "first stop shop" for export ser vice deliveries for Afghan exporters and as a 
centre of an on and offshore network of export related services.  
The Afghanistan Central Business Registry (ACBR) established at the MoCI in 2008 is 
intended as a single window to register all types of businesses.  The ACBR streamlines and 
consolidates the varied processes required for regist ering a business, whether done by businessmen or 
women, their agents or through the Afghanistan  Investment Support Agency.  Businesses can now 
register, obtain a Tax Identification Number (TIN), publish their business name in the Gazette, pay one fee, and get a referral letter to any licensing ag ency (if needed) all at one central location.   
- Establishment and Expansion of Industrial Parks
 
A major program to rehabilitate existing industria l parks and to invest in the establishment of 
a number of new facilities is underway.  Significan t achievements have included the completion of 
industrial parks in Bagrami, Kanda har and Mazar.  Currently, the work on the industrial park in 
Helmand, Badakhshan is nearly comp lete.  The construction of Jalalabad Industrial Park has started 
and is expected to be finished by mid-2009. 
Increased investment in industrial parks is exp ected to be an important factor in attracting 
private investment to Afghanistan.  The use of i ndustrial parks as a means to provide increased access WT/ACC/AFG/4 
Page 10  
 
 to commercial land allows developers to efficiently  provide utilities and services to a large number of 
businesses.   
The broad range of economic reforms undertaken in these areas have led to a substantially 
improved climate for private investment and have c ontributed to the robust GDP growth rates realized 
in recent years.  (Between 2003 and 2007, AI SA facilitated over US$2.9 billion in projected 
investment.)  While substantial progress has been made towards the establishment of a strong 
enabling environment for the private sector, there is still a great deal more that needs to be done.  As 
clearly presented in detail in the ANDS, the Afghan government remains firmly committed to 
completing the economic reforms that are necessary for efficient economic gr owth and development. 
- International Aid for Trade
 
The Afghan Government recently submitted the Ai d for Trade questionnaire to the OECD and 
the WTO addressing donor assistance for trade-related activities.  Some of the key issues that were 
addressed in the questionnaire are briefly reviewed in this section. 
In 2008, the government completed a key policy document, viz. the Afghanistan National 
Development Strategy (ANDS) which also acts as the Poverty Reduction Strategy Paper (PRSP) for 
Afghanistan.  In the ANDS and in various sectoral strategies trade is identified as a key priority, but 
trade-related priorities and implementation actions are still in the process of being developed.  
Afghanistan's accession to the WTO is also seen as a high priority for the Afghan government. 
The Ministry of Commerce and Industry, which has lead responsibility for trade policy and 
facilitation, is currently developing work plans w ith the support of international donors to implement 
the identified priorities.  These initiatives will a ddress the existing challenges limiting Afghanistan's 
trade within the region and globally.  Work plans w ill include benchmarks, timelines, prioritization of 
objectives, costing, and identify additional donor assistance needed  to effectively achieve the 
priorities. 
Afghanistan was accepted as a beneficiary count ry to the Enhanced Integrated Framework 
(EIF) process in January 2008 by the EIF Board.  The first EIF Awareness workshop was held in the 
Ministry of Commerce and Industry in May 2008.  Afghanistan is still waiting for the EIF Board to 
assist with the establishment of the National Implem enting Unit in order to start the process.    
The structures that the government uses to di scuss financing needs for trade-related priorities 
are still evolving.  Bilateral governmental consulta tions and negotiations are generally conducted on 
an annual basis.  Multilateral donor meetings, fo r example the Joint Coordination and Monitoring 
Board (JCMB), which is responsible for overall strategic coordination and oversight of the 
implementation of the Afghanistan Compact and ANDS, meets at least four times a year.  (Trade and 
private sector development will be major topics for the upcoming JCMB meeting scheduled for March 2009.)  Consultations with multilateral donor organizations also  include, among others, regular 
meetings with the World Bank, IMF and regional institutions on a range of issues, including trade-
related topics.  
In January 2009 the MoCI has convened a donor  round table to discuss priorities, including 
trade policy and facilitation, and to outline n eeds for additional trade-related assistance. 
While the Ministry of Commerce and Industry has the overall responsibility for the 
formulation of trade strategies, the government has envisioned the establishment of a coordination, 
evaluation and monitoring committee for the implemen tation of these strategies.  However, currently 
the overall ANDS implementation is  being coordinated by the high  level Government Coordinating 
Committee (GCC) under the President.  WT/ACC/AFG/4 
 Page 11 
 
 
  The Afghan government is taking steps to more  extensively engage the private sector in 
policy discussions on regular basis, (e.g., thr ough the Afghanistan Chamber of Commerce and 
Industry).  In addition, the government is planning  to establish a sub-committee on trade, as part of 
the Joint Coordination and Monitoring Board process. 
Some of the key accomplishments that have  been achieved due to donor support for 
expanding trade include, inter alia : 
− The drafting and enactment of a number of  key commercial laws, including a new the 
investment law, laws on corporations and pa rtnerships and laws that provide bases for 
alternative commercial dis pute resolution mechanisms; 
− The establishment of the Central Registry Office for more efficient registration of businesses; 
− The establishment of the Export Promotion Agen cy of Afghanistan and Afghan Investment 
Support Agency;  
− The introduction of the ASYCUDA System in some important border ports; 
− The establishment of a telecommunication re gulatory framework which led the way for 
substantial private investment in the sector;  
− The creation of conditions enabling the establishment of a new largely private banking system 
vital for the financing of international trade: and  
− Establishment the Afghan National Standard Agency (ANSA). 
It is the view of the Afghan government that fo r aid for trade projects to be more successful 
the following should take place: 
− More donor support should be directed through the government budget to allow the 
government to better set priorities according to th e country's needs.  This will ensure that 
Afghanistan maintains full ownership of the activities and their goals.  
− Greater emphasize should be given to ensure more systematic use of joint donor partner 
monitoring and evaluation of Aid for Trade ac tivities to guarantee mutual accountability of 
partner and donor country. 
− The Afghan government should from the beginni ng be actively involved in the detailed 
planning, implementation and monitoring of tr ade-related donor assistance and interventions. 
- The Development and Implementation of the ANDS  
The Afghanistan National Development Stra tegy (ANDS) is based upon the government's 
vision, principles and goals for including the commitment to achieve the Millennium Development 
Goals by 2020 and to implement of the Afghanistan Compact benchmarks by 2011.  It represents the combined efforts of the Afghan people and the gove rnment with the support of the international 
community to address the major challenges facing the country.   
The ANDS offers an assessment of current  social and economic conditions; establishes 
intermediate objectives; and identifies the actions th at must be taken to achieve these national goals.  
The ANDS focuses on the next five years, but refl ects Afghanistan's long term goals which include 
the elimination of poverty through the emergence of  a vibrant middle class, an efficient and stable 
democratic political environment a nd security throughout the country. 
Despite the full commitment of the Governme nt and the considerable assistance being 
provided by the international community, it will not be  possible to fully achieve all of these objectives 
during the next five years.  Therefore the ANDS ai ms to identify priorities that reflect the relative 
contributions of potential policies, programs and projects towards stimulating economic growth and 
reducing poverty.  The government recognizes that the contribution of any project towards increasing WT/ACC/AFG/4 
Page 12  
 
 economic growth is uncertain and is inevitably contin gent on progress in other areas.  It also requires 
a careful analysis of benefits versus costs with alternative allocations of resources.  It should be 
emphasized that the ANDS aims to establish mechan isms that will include the Afghan people, the 
government, civil society and the international comm unity in identifying changing priorities in an 
evolving environment. 
A comprehensive "bottom-up" approach was used in the development of the ANDS that 
attempted to take into account all aspects of social  and economic life as well as fully reflecting the 
diversity of people in all parts of the country.  Consid erable efforts were made to ensure that extensive 
consultations were undertaken to identify the prior ities of the Afghan people living in each of the 34 
provinces.  The result of this inclusive process is a national strategy that is fully reflective of the 
aspirations of the Afghan people.  The governme nt remains committed to effectively implement 
programs and projects that directly target the poorest and most vulnerable groups for assistance.   
The ANDS was formally approved by the Afghan government in April 2008.  It was endorsed 
by the World Bank and IMF (as the country's PRSP ) in June 2008 and subsequently presented to the 
International Conference in Support of Afghanistan, in  Paris, (12 June 2008).  At the Paris Conference 
the international Community pledged US$22 billion towards the implementation of the ANDS during 
the next five years. 
With the completion of the ANDS and its endor sement, the Afghan government has shifted its 
focus towards the implementation of the policy re forms, projects and programs proposed in the 
Strategy.  The principal body overseeing the implementation of the ANDS is the Government Coordinating Committee (GCC), which is comprised of twelve key ministers.  The GCC reports 
regularly to the President and to the JCMB on progress.  Lead responsibility for managing the 
budgeting of resources needed for the implementation of the ANDS has been assigned to a new unit in 
the Ministry of Finance.  Lead responsibility for the monitoring and evaluation of progress in implementation has been assigned to the Ministry of Economy.   
The ANDS was built upon seventeen sector strate gies, including private sector development, 
energy, transport, mining, education, culture, yout h and media, agriculture and rural development, 
public health, social protection and refugees, retu rnees and internally displaced persons.  Primary 
responsibility for the implementation of these sector st rategies will lie with sectoral inter-ministerial 
committees that will ensure a high degree of cooperation among ministries and agencies involved.   
2. Economic Policies  
(a) Main directions of the ongoing economic policies 
The foundation of the government's economic po licies has remained consistent since 2002 
and provides the basis for the ANDS.  The commitm ent to a private sector oriented market-based 
economy is enshrined in the Constitution, Article 10,  which states that:  "The State encourages and 
protects private capital investments and enterprises based on the market economy and guarantees their 
protection in accordance with the provisions of law." 
The strategy to foster private sector-led  economic development and increase domestic and 
foreign investment consists of three main components:  
− Continued efforts to build a strong and stable  enabling environment that will encourage a 
competitive private sector;  
− Expand the scope for private investment in de veloping national resources and infrastructure; 
and   WT/ACC/AFG/4 
 Page 13 
 
 
  − Strengthen efforts to promote investment from domestic sources, the Afghan diaspora and 
foreign investors. 
- Strengthening the Enabling Environment  
The primary objective of a supportive enabling envi ronment is to reduce to the extent possible 
the costs of doing business.  This entails the el imination of excessive or unnecessary impediments to 
business activity that raise costs and improving the "soft" and "hard" infrastructure essential to 
competitive economic activity.  This requires that th e private sector have acc ess to necessary inputs at 
reasonable cost, including land for commercial purposes, credit and imported raw materials and intermediate goods.  Economically efficient land,  labour and financial markets and a stable, open 
trade regime have a major impact on the ability of firms to operate competitively. 
Economic development requires macroeconomic st ability and an environment where there is 
a general reliance on the rule of law.  While it is  relatively easy to introduce a suitable legal and 
regulatory framework, it is considerably more difficult to ensure that it is implemented effectively.  
This requires that all parties, both public and private,  reliably abide by the legal system.  It is critical 
that contracts can be entered into and enfor ced with disputes readily resolved.  The Afghan 
government gives a high priority to the strengthening of the institutions, including the establishment 
of effective commercial courts, responsible fo r the implementation of commercial laws.  The 
government will continue to control inflation at low le vels similar to those achi eved in recent years.  
The growth of a supportive financial sector that is  able to extend credit to viable firms will be 
supported through legal and regulatory reforms, incl uding the implementation of secured transactions 
laws.  
Attracting private investment is the responsib ility of the entire government and will continue 
to be an integral part of all projects and pr ograms implemented under the ANDS.  This requires 
ongoing institutional strengthening of agencies and mi nistries, including the Afghanistan Investment 
Support Agency as the lead investment promotion ag ency.  All ministries have the scope to expand 
the opportunities for private business activities and to  increase their contribution to the growth and 
development of the economy.  Donors are being encouraged to expand their reliance on goods and 
services obtained within the country. 
- Legal Reforms
 
With regard to ongoing legislative reform, the government will continue to enact and 
implement key commercial laws and amendments  to establish the basic legal and regulatory 
framework consistent with the Afghan conditions.  A number of reformed commercial laws have 
recently been enacted, including new laws covering i nvestment, partnerships, co rporations, arbitration 
and mediation.  Priorities in this area include: 
− The government will draft and enact key additiona l commercial laws that meet international 
standards, including laws covering secured tran sactions, mortgages, negotiable instruments, 
leasing, contracts, agency, intellectual propert y (trademarks, copyright and patents) and 
product standards.  During this process the gove rnment will consult with representatives from 
private business and civil society in a meaningful and timely manner; 
− All necessary steps will be taken to rapidly estab lish the authority of me diation and arbitration 
tribunals to resolve private-private and private-public disputes, including land issues; 
− The government will ensure that no law will be  implemented unless it has been published in 
the newspapers, and made available electroni cally and in hard copy to the public.  
Regulations, including import tariff rates, will be  made readily available on the Ministry of 
Finance website. WT/ACC/AFG/4 
Page 14  
 
 To strengthen administrative roles and res ponsibilities, the government will ensure that 
ministries and agencies are able to competently ad minister commercial laws and regulations in an 
unbiased and predictable manner.  Initiatives w ith these objectives that are underway include: 
− Invest in capacity development for the Nationa l Assembly so that MPs are better informed 
and supported in their role and un derstanding of proposed laws. 
− Ensure the competency and transparency of tribunals by establishing standards and 
developing the capacity of arbitrators, mediators and lawyers. 
− Undertake financial audits of st ate owned assets and corporations. 
− Implement effective programs to provide in stitutional strengthening  and public sector. 
- Privatization and Corporatization of State Owned Enterprises
 
The government will continue the program of priv atization and corporatization of state owned 
enterprises, a process that is presently underway.  This will: improve the level of efficiency in the 
economy; assist in eliminating corruption; enco urage better resource allocation; and generate 
increased government revenue.  In accordance with th e privatization policy, enterprises have been 
classified into the following two categories: 
(i) Enterprises currently recommended remaining in  state ownership: Enterprises in this group 
provide important services, including public tran sportation, water distribution, electricity 
production and distribution, and incarceration services.  
− Water distribution: Government-operated servi ces through various ministries and agencies 
(Agriculture, Energy and Water, Urban Development, Mines, Municipalities).  
− Electricity:  Government-operated services through government enterprises operating in 
Ministry of Energy and Water.  
− Incarceration: Government-operated services through Ministry of Interior, and Ministry of 
Justice.  
− Transportation: Government-operated services th rough government and private sector guilds.  
(ii) Enterprises recommended for divestiture:  This group is composed of enterprises which 
would benefit from a transfer of ownership to the private sector, or enterprises with limited or no economic viability and which would otherwise c ontinue to be a drain on public resources.  
The state proposes to divest these enterprises. 
Various divestiture options are being assessed fo r the transfer of state owned enterprises, 
including transfer of assets, sale of shares in co rporatized enterprises, and long-term leases or 
management contracts.  The divestiture option u ltimately selected for each enterprise will depend on 
the specific characteristic of that enterprise.   
The Ministry of Finance (MoF) has assumed th e responsibility for preparing proposals for the 
economic restructuring and divestiture of state-owne d assets.  As part of this process, an extensive 
review of the operations and assets of the state-owned enterprises was completed in December 2004.  In addition to the adoption of this policy statemen t, the Cabinet of Ministers approved the necessary 
changes to the Law on State Owned Enterprises to allow for the vari ous divestiture options included 
in the policy statement.  It should also be noted that a social safety net program was approved to 
address the needs of workers disp laced by privatization.    WT/ACC/AFG/4 
 Page 15 
 
 
  The Afghan government remains committed to the effective privatization of all state owned 
enterprises (SOEs) by March 2010.  Out of a total of  the 65 SOEs, 56 are expected to be liquidated.  
The following steps have been taken to date17: 
− The Cabinet of Ministers has approved the privatization proposals of 15 SOEs and the 
corresponding Liquidation Committees have been a ppointed by the Ministry of Finance.  
− The Ministry of Finance has approved the privatization plans for seven SOEs and the 
respective Liquidation Committees are implementing these plans. 
− Nine auctions have been held so far and fi ve more auctions are planned to take place. 
- Formalization of Economic Activity  
A large share of economic activity, including a larg e share of international trade, continues to 
take place in the informal sector.  The government  aims to increasingly formalize private sector 
activity by introducing taxpayer number identificat ion and more consisten tly applying commercial 
laws and regulations.   
- Improving Access to Finance  
In order to improve private sector access to finance, the government will implement a well 
defined strategy to expand the availability and ra nge of financial products and services, especially 
targeting small and medium enterpri ses.  Priority actions include: 
− Passage and enactment of key financial laws , including laws covering secured transactions, 
mortgages, leasing and negotiable instruments; 
− Establish an independent banking and business tr aining institute as a joint commercial bank – 
DAB initiative; 
− Establish a credit information bureau to fac ilitate commercial and consumer lending; and 
− A financial tribunal will be established to provid e swift legal resolution of financial disputes. 
- Environment for International Trade  
The government is committed to maintaining an  open trade environment that embodies trade 
policies with low barriers for imports and exports  and a liberal foreign exchange system.  The 
government's trade policies will continue to take into account the need to meet domestic revenue 
requirements as well as to support increased dom estic production by the private sector.  The 
government is currently undertaking systematic ta riff reform as part of the budget process and in 
consultation with the private sector and will avoi d ad hoc changes in tariff rates and regulatory 
requirements.   
In addition to the government's firm commitment to WTO accession and support for the 
multilateral trade negotiation process, efforts will c ontinue to vigorously seek to increase access for 
Afghan goods and services in foreign markets t hough bilateral, regiona l and multilateral trade 
agreements.  A high priority is being given to  expanding trade with neighbouring and regional 
countries in order to establish Afghanistan as an important "trading hub" in the region. 
Programs to reduce unnecessary trade related transac tions costs will continue to be pursued 
vigorously as a means to facilitate trade.  In th is area the government will pursue trade facilitation 
measures to reduce the costs of moving goods within the country and across borders, including 
endeavouring to relax restrictions arising from tr ansit agreements with neighbouring countries.  
                                                      
17 See the report of the privatization project to the Joint Coordination and Monitoring Board (JCMB), 
14 July 2007. WT/ACC/AFG/4 
Page 16  
 
 Institutional capacity to support the export of dom estically produced goods and services will be 
increased, including for example the technical resour ces to establish that Afghan agricultural products 
meet sanitary and phytosanitary (SPS) requireme nts of importing countries and meet international 
product standards.  The government will reduce th e burden of export documentation, processes will 
be further streamlined and essential services for ex porters will be made more available through the 
Export Promotion Agency of Afghanistan. 
- Expanding Opportunities for Private Investme nt in Infrastructure and Natural Resources 
Development  
Afghanistan requires enormous investment in  infrastructure, including roads, power 
generation, water supply, and irrigation.  A substan tial part of these requirements could be undertaken 
profitably by private investors with an appropriate regulatory environment.  Private investment in the 
development of natural resources, particularly minerals development will become viable when 
suitable regulations are in place. 
The government is currently establishing regulat ory authorities that will establish appropriate 
fees and royalties, public purchase agreements (e.g. for power), ensure transparent procedures and 
dispute resolution mechanisms.  Its mandate will be to maximize private investment in these areas.  
Opportunities for entering into public-private partne rships for investment in  infrastructure projects, 
such as roads and bridges, will be developed based on international best practices.  In addition, the 
government will encourage private provision of pub lic services wherever it will be feasible, including 
areas such as health, education and municipal services.   
- Concerted Private Sector Investment Promotion  
The government gives high priority to the prom otion of investment from foreign and domestic 
sources, including from the Afghan diaspora.  After a long period of economic isolation, Afghanistan 
must rebuild commercial ties and demonstrate that there are considerable profitable opportunities for 
investors in the country.  The Afghanistan Investment  Support Agency will play a central role in this 
process and will be strengthened.  
(b) Monetary and fiscal policies18 
As stated in the Law of the Central Bank of  Afghanistan (2003), the principal mission of 
Da Afghanistan Bank (DAB) is to determine and direct monetary po licy aimed at maintaining price 
stability to facilitate economic development within  the framework of the government's economic 
policies.  
In accordance with the government's policy on price stabilization, the new currency of 
Afghanistan was introduced in October 2002.  Th e new Afghani (Af) was worth 1,000 old Afghanis 
and valued at Af 43 per US$1.  The current excha nge rate is about Af 52/US$1 (i.e. January 2009).  
The restrained monetary policy together with ot her exogenous factors have  brought the rate of 
inflation down from an annual average of 150 per cent in 1999-2001 to 4.4 per cent in 2006/0719.  
However, in 2007/08 the inflation rate increased to 20.6 per cent largely as a result of the rise of 
domestic food prices due to drought20.   
                                                      
18 Source:  Da Afghanistan Bank, Latter No: 161-35 date: March 2008 (21/1/1387) 
19 Afghanistan Statistical Yearbook 2007/2008, Issue 29, September 2008, page 224. 
20 Afghanistan statistics yearbook, 2007-08, page 222.  WT/ACC/AFG/4 
 Page 17 
 
 
  The current instruments of monetary policy in clude limits on bank financing of the budget; 
reserve requirements; the sale of foreign currency by the Da Afghanistan Bank; and a positive real 
interest rate underpinned by th e bank's prime refinance rate.  
Table 5 - Domestic Revenue (millions US dollars)21 
Year 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 
GDP 4,389.8 4,767.4 5,732.7 6,851.7 8,186 10,170 
Domestic 
Revenue  112.76 195.5 244.02 434.35 596.03 677 
Revenue (% 
of GDP) 3.2 4.6 5.1 6.7 7.6 6.7 
 
The increase in domestic revenues since 2002/03 can be attributed mainly to increases of 
custom duties and domestic taxes; custom duties comprised 39.2 per cent of the total revenue in 
2007-08.  It is expected that the collection of re venues will be fully centralized before 2010 as the 
government gains increased fiscal control in the provi nces.  It is forecast that this will result in 
revenue growth gradually incr easing to 10.6 per cent in 2010. 
- The Government Budgetary Process  
National development priorities established in th e ANDS are reflected in the budget, which is 
currently divided into two main components: the Core  Budget, which is under the direct control of the 
Afghan government; and, the External Budget, which is  funded directly by international donors.  (The 
External Budget includes financial resources administered by Provincial Reconstruction Teams and funds made available through civil and military cooperation agreements.)  The Core Budget is 
comprised of two functional budgets, the Operationa l and Development Budgets.  Sixty per cent of 
the Core Budget is funded by donors and 40 per cent comes from national revenues.  It is an 
immediate goal of the Afghan government to bring the generate sufficient revenues to fully fund the 
Core Budget while moving as much of the External  Budget under the Core Budget as is possible.  A 
longer term goal is to generate sufficient revenu es from domestic sources to fully fund a unified 
government budget.   
In recent years the high levels of insecurity have increased the costs of many development 
and reconstruction activities, which have led to the fragmentation of the policy development process, 
lower levels of aid effectiveness and a failure to  effectively utilize the national budgetary process as 
an effective tool for coordination and prioritization.  Strengthening the role of the budget as the instrument of national policy making is critical to the implementation of the ANDS.  An integrated approach is being taken that relies on the budget as the principal tool for economic stabilization and 
development.  All public expenditures aimed at enhancing economic growth and reducing poverty are 
formulated and executed through the annual budget formulation and execution process.  
With the endorsement of the ANDS in June 2008 by the international community, donors 
have made a commitment to align their projects a nd programs with the priorities established in the 
ANDS.  Donor assistance will increasingly be integrat ed into the government planning and budgeting 
cycles.  This will ensure that priorities and potential synergies across projects and programs are 
identified at an early stage and are developed to the maximum extent feasible.  This integrated 
approach will also establish conditions that will enable  external funding to be more easily aligned to 
the national priorities established in the ANDS. 
                                                     
 
21 Source: Afghanistan Statistical Yearbook 2007/2008, page 249 and Statistical Yearbook 2006, 
page 261. WT/ACC/AFG/4 
Page 18  
 
 A forward-looking partnership between Afghani stan and the international community is 
needed to ensure external aid is managed in lin e with the ANDS and the recommendations of the Paris 
Declaration.  As noted, the Afghan government in tends for donors to implement an increasing share 
of programs and projects through the Core Budget.  Th is will lead to:  (i) enhanced Afghan ownership 
of the development process; (ii) more effective public expenditure manageme nt; (iii) an increased 
focus on outcomes and service delivery; (iv) gr eater harmonization between government and donor 
policies, and (v) more mutual accountability between the government and the international 
community. 
The Afghan government is in the process of implementing a comprehensive program 
budgeting system and through fundamental reforms of the Public Finance Management (PFM) 
system, including procurement, accounting, reporting and auditing.  These steps are intended to lead 
to greater realism in budgetary targets, improve local financial manageme nt, more engagement by 
stakeholders and increased transparency.  The gover nment is also making considerable efforts to 
involve sub-national bodies from the provinces, district s and communities, in this process.  With the 
assistance of the international community, the capacity  to conduct internal and external audits of 
budgets is being significantly increased.   
Ongoing budgetary reforms will emphasize the following: 
− Strengthening aggregate fiscal discipline:  The government aims to (i) increase the revenue to 
GDP ratio; (ii) reduce the ratio of operating expe nditures to revenues, and (iii) make progress 
according to fiscal targets established through the MTFF. 
− Enhancing resource allocation a nd utilization based on strategic priorities:  Currently, the 
Ministry of Finance uses program budgeting in a number of key sectors and ministries.  This activity will expand to include all ministries, which will significantly support the integrated 
approach.   
− Improving the rationale for public spending:   The budgetary process will better prioritize 
spending based on criteria such as whether a project directly addressed poverty reduction; economic growth; contribute to easing tensions  in the communities; and address cross-cutting 
issues such as gender.   
− Increasing cost-effectiveness:  This approach w ill enable the government to more accurately 
assess multi-year cost implications (sustainab ility) and determine whether the least cost 
alternative has been identified. 
− Strengthening cost-benefit assessment of projects:   The capacity to eval uate economic, social 
and environmental benefits as costs is being increased.  Projects will be undertaken only when 
the rate of return justify expenditure. 
− Improving risk mitigation: Greater attention is  being devoted to determine whether, for 
example, project management capabilities exist to allow successful project implementation 
within the projected time frames and have risks been adequately identified and assessed. 
− Expanding implementation of sector-wide appro aches and national programs:  The success of 
many of the major development initiatives of the government will depend on the prior 
establishment of an appropriate enabling lega l framework, sufficient institutional capacity, 
infrastructure, human resources, technical assi stance, finance, baseline data and data 
management systems, risk management strate gies, and standard audit and PFM procedures. 
− Further integration of existing trust funds and PRTs into the budgetary process: Efforts will 
continue to incorporate the Afghan Reconstr uction Trust Fund (ARTF), Law and Order Trust 
Fund (LOTFA) and the Counter Narcotics Trust Fund (CNTF) into the budgetary process.  
This will ensure these trust funds contribute to the effectiveness of broader sector wide approaches.  To the maximum extent possibl e, appropriations will be made through the 
treasury system.  WT/ACC/AFG/4 
 Page 19 
 
 
  − Improved integration of budgetary processes with  cabinet-level policy-making and legislative 
planning:  The linkages among policy-making, planning and budgeting will be strengthened 
to promote more results-based performance management.  Medium-term expenditure priorities will receive expedited treatment in  the cabinet policymaking and legislative 
processes.  Program and provincial budgeting will provide multi-year budget proposals which 
integrate recurrent and capital expenditures. These processes will also integrate the Provincial 
Development Plans (PDPs) and address any provincial or regional imbalances. 
- Tax Policy and Administration Reform
 
The recent amendments to the Income Tax La w of 1965 incorporated a number of new tax 
policies including the introduction of a 20 per cent tax ra te for all parties deemed to be legal residents 
of Afghanistan.   
A major tax reform law was introduced in 2007 which sought to comprehensively overhaul 
the tax system and bring it into compliance with inte rnational best practices.  It is anticipated that 
these reforms will reduce tax related investment barriers by eliminating a number of taxes and simplifying tax structures and procedures. 
With respect to tax administration, the govern ment has undertaken the following reforms:  
− Creation of Large Taxpayers and a Medium-sized Taxpayers Offices; 
− Accelerated the nationwide introduction and of the Taxpayer Identification Number (TIN) in 
the major provincial centres; and  
− Consolidated tax legislation to clarify the status of tax and customs legislation.  
In addition, the government remains committe d to ending unjustif ied and ad hoc tax 
concessions and tax holidays, which undermine the tax base. 
- Customs Reform
 
A number of important customs reforms have been implemented, including:  
− The introduction of the Afghanistan National Tariff Schedule, which reduced the number of 
tariff bands from 25 to six, although this w as subsequently increased to 12 bands.  The 
Schedule classifies goods according to interna tional standards and mandates the use of the 
official exchange rate as published by the central bank for valuation purposes.  
− The introduction of new procedures to control and monitor exemptions;  
− Implementation of several modules of the ASYCUDA (Automated System of Customs Data) 
computerized system;  
− Infrastructure development at main customs stations; 
− Capacity building and training of customs officials;  
− The enforcement of mobile verification team wh ich is operating at important customs routes;  
− Support to facilitate legitimate trade and tr ansit, including the introduction of the bonded 
carrier system;  
− Increase the number of licensed customs brokers; and  
− The establishment of regional customs valuati on units in the major provincial centres.  WT/ACC/AFG/4 
Page 20  
 
 (c) Foreign exchange and payments system, relations with International Monetary Fund, 
application of foreign exchange controls 
As part of the transition from a centrally-pla nned to a market economy, the foreign exchange 
regime and payments system has been extensively reformed.  All measures have been taken that are 
necessary to fully meet the obligations include d in the Memorandum of Economic and Financial 
Policies
22.  Current exchange rate arrangements are in compliance, as approved by the Da Afghanistan 
Bank's Supreme Council, which establishes regul ations related to currency accounts and the 
conditions of conversion,  repatriation and expatriation of assets invested in the economy.  More 
specifically, according to the Da Afghanistan Bank Law: 
− Imports (declared to customs officials) and transf ers of foreign currency to the territory of the 
Islamic Republic of Afghanistan are carried out without restrictions; 
− All currency conversion operations are to be ca rried out through authorized banks which have 
been licensed by the Da Afghanistan Bank for conduct of foreign exchange operations; 
− Conversion of foreign currency into Afghani  for residents and non-residents is conducted 
without restrictions by authorized banks at currency exchange offices and through internal 
banking conversion by authorized banks; 
− Da Afghanistan Bank determines the official ex change rate against the US dollar on a daily 
basis; 
− In the case of domestic investment, any profits earned may be reinvested in local currency 
held in Afghanistan or converted into forei gn currency and transferred without restrictions; 
− Afghanistan has maintained a very close relations hip with the IMF since joining in 1955.  The 
IMF is assisting Afghanistan in restoring macroeconomic stability and establishing market-supporting institutions. 
In order to establish the conditions necessary fo r accepting the obligations under Article VIII 
of the IMF Articles of Agreement, the government is  committed not to impose or intensify restrictions 
on making of payments and transfers for current international transactions, or introduce or modify 
multiple currency practices, or conclude bilateral pa yments agreements inconsistent with Article VIII, 
or impose or intensify import restrictions for balance of payments purposes. 
(d) Foreign and domestic investment policies  
A key element in the ANDS Private Sector Deve lopment Sector Strategy entails actions by 
the government to significantly increase the level a nd effectiveness of efforts to promote private 
investment from both domestic and foreign sources.  The country requires enormous investment in 
infrastructure, including roads, power generation, wa ter supply, and irrigation.  In order to attract 
investment the government will establish appropria te regulatory authorities following an approach 
similar to that used to develop the telecommuni cations industry; and to  expand opportunities for 
entering into public private partnerships for invest ment in infrastructure pr ojects, such as roads and 
bridges based on international best practices.   
The government is actively pursuing medium and large scale investors in commercial 
agriculture-related businesses, including producers a nd processors, in order to increase employment 
and market opportunities in rural areas and to  develop export markets for Afghan products. 
                                                     
 
22 Source: Da Afghanistan Bank Dated 2003.  WT/ACC/AFG/4 
 Page 21 
 
 
  The government is implementing the following polic ies in order to attract and promote private 
investment: 
− Strengthening the Afghanistan Investment S upport Agency (AISA).  Investment procedures 
have been streamlined with the implementa tion of modern investment legislation and 
establishment of the AISA as a "one-stop shop" for investors; 
− Developing the necessary legal and regulatory re quirements to effectively implement public-
private partnerships; 
− While land ownership is reserved for Afghan citizen s, the legal basis for long term leasing of 
land for commercial activities is being implemented; 
− Facilitation of private sector investment thro ugh the establishment of a suitable enabling 
environment;  
− Privatization of state owned enterprises; and  
− Extensive reforms and modernization initiatives introduced for import and export procedures 
to increase transparency, reduce comple xity and enhance trade facilitation. 
- Establishment of Industrial Parks  
The accelerated development of industrial parks is an important factor in attracting investment 
to Afghanistan.  AISA with the support of inte rnational donors has cons tructed three modern 
industrial parks in Kabul, Kandahar and Mazar that  include utilities.  It also helped in the 
rehabilitation and development of the industrial park in Helmand,  Badakhshan and started a new 
industrial park in Jalalabad and is planning several pilot projects.  Long-term objectives are to provide 
investors with land, energy, water and road access in a timely and transparent manner by creating 
industrial parks throughout the country.  
(e) Competition policies23 
The Ministry of Commerce and Industries (M oCI) has prepared a draft law on competition 
policy that is currently being reviewed.  This draf t law attempts to balance Afghanistan's need for 
foreign direct investment against the need to ensu re fair and effective co mpetition consistent with 
modern competition law.  The law recommends phasing in of competition rules, specifically, a three-
step approach to implementation that would enta il an initial phase to encourage investment; a second 
phase to introduce competitive principles; and a thir d phase that would establish international best 
practices.  
3. Foreign trade in goods and services 
- The Structure of Trade  
Successful economic development will require exte nsive integration of Afghanistan's markets 
with the global and regional economies.  The rapid increase in the country's international trade since 
2002/03 indicates that significant progress is being made in this regard.  Table 6 and Figure 2 (below) present estimates of Afghan trade flows in recent year s and provides summary statistics regarding the 
external balance.  
While the nominal value of exports declined by nearly two-thirds between 1978 and 2002, 
export growth is increasing rapidly with exports mo re than quadrupling from 2002/03 to 2007/08.  By 
contrast, imports grew by about 23 per cent fro m 2002 to 2007, but from a much higher level, 
contributing to the substantial trade deficit.  A lthough a significant portion of imports reflects donor 
                                                     
 
23 Legal and regulatory committee, MoCI. WT/ACC/AFG/4 
Page 22  
 
 financed reconstruction initiatives, the long term sust ainability of this deficit is a growing concern to 
policy makers. 
Figure 2 - Structure of Foreign Trade
 
 Structure of Foreign Trade (USD Million)
05001000150020002500300035004000
 2002-03  2003-04  2004-05  2005-06  2006-07  2007-08
YearExports Imports 
 
Table 6 - Structure of Foreign Trade24 
Year 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 
Exports  
(US$ million) 100 144 305 384 416 454 
Imports  
(US$ million) 2,452 2,101 2,177 2,471 2,744 3,022 
Trade Balance -2,352 -1,957 -1 ,872 -2,087 -2,328 -2,568 
 
- Exports  
Table 7 (below) describes the pattern of Afghanist an's exports by country of destination.  
SAARC member states, Pakistan and India are th e largest markets for Afghan exports accounting for 
84 per cent of total exports in 2007.  (No exports to the other SAARC member  states are recorded in 
the Afghan statistics.)  Russia, with 5 per cent of ex ports in 2007, is the third most important market 
for Afghanistan exports.   
Goods destined for Pakistan and India dominat e the Afghan export sector.  The majority of 
exports of carpets and fresh and dried fruits are de stined for the Pakistani market as well as nearly 
90 per cent (2007) of animal skins, mostly cow hides.   Due to the lack of finishing facilities, Afghan 
carpets are sent to Pakistan for cutting and washing and then re-exported to their final markets.   
Table 7 - Exports by Destination, 2006/08 (US$ Millions)25 
Country 2006/07 % 2007/08 % 
Pakistan  265 63.7 301 66.3 
India  79 19 81 17.8 
                                                      
24 Source: Afghanistan Statistical Yearbook 2007-08, page, 243. 
25 Source: Afghanistan Statistical Yearbook 2007/2008, Issue 29, September 2008, page 243.  WT/ACC/AFG/4 
 Page 23 
 
 
  Country 2006/07 % 2007/08 % 
Russian Federation  29 6.9 22 4.8 
Finland 8 1.9 2 0.4 
Iran 5 1.2 9 2.0 
Germany 4 1.0 7 1.5 
UAE 4 1.0 7 1.5 
Belgium 3 0.2 1 0.2 
USA 2 0.15 1 0.2 
Uzbekistan  2 0.5 2 0.4 
Other 15 3.6 21 4.6 
Total 416 100 454 100 
 
Table 8 - Main Exports by Commodity Group26 
2006/07 2007/08 
Commodities Export 
(US$ Millions) % of total 
Exports Export 
(US$ Millions) % of total 
Exports 
Carpets 186.53 44.8 211.76 46.6 
Dry fruits 126.12 30.3 117.48 25.9 
Fresh fruits 39.03 9.4 41.38 9.1 
Medical herb 10.33 2.5 20.22 4.5 
Oil seeds 8.08 1.9 11.45 2.5 
Skin and fur excl., Karakul  14.1 3.4 9.24 2 
Karakul Skins 9.34 2.2 8.46 1.9 
Wool and animals hair  4.47 1.1 6.2 1.4 
Others  18.46 4.4 27.86 6.1 
Total 416.46 100 454.05 100 
 
India recently granted preferential access th rough the Afghanistan India Preferential Trade 
Agreement for Afghan dried fruits and nuts, which h as resulted in a significant increase in exports for 
this sector, although the amount is small compared to  exports Pakistan.  While this market was once 
dominated by Afghanistan, dried fruits and nuts from California now have a substantial share of the 
Indian import market.  However, with preferen tial access, the share of Afghan products has risen 
substantially. 
It is expected that exports of traditional agri cultural products will c ontinue to grow, with 
regional markets likely to be the most significant de stination.  As Afghan exporters develop capacity 
for successfully competing in international markets and meeting international standards, exports to 
developed countries' markets are anticipated to e xpand and constitute a significant source of economic 
growth.   
Initiatives in the carpet industry are underway  to expand market opportunities based on the 
unique characteristics of Afghanistan's traditional carpet industry.  Specifically, priority is being 
placed on increasing the level of value added in car pet production through the development of cutting 
and washing facilities.   
Afghanistan's mining sector offers enormous opportunities to substantially increase exports.  
A recent major investment in the development of a large copper deposit in eastern Afghanistan will 
lead to a large increase in exports in the coming years.  In addition, investment opportunities for 
marble, gemstones and lapis lazuli are expected to lead to export growth in the short and medium 
term.  
                                                      
26 Source: Afghanistan Trade Statistical Yearbook 2007-2008, page 93. WT/ACC/AFG/4 
Page 24  
 
 - Imports
 
Table 9 (below) describes the pattern of Afghanistan's imports by country of origin.  The 
sources for imports are far more di verse than for exports.  China a nd Japan have consistently been 
among Afghanistan's largest sources of imports.  Fr om within SAARC, Pakistan and India are the 
largest sources for imports within SAARC but toge ther accounted for only 17.5 per cent of total 
imports in 2007/08.  Passenger cars, tyres and spare parts for vehicles, account for the large share of 
imports from Japan and China.  These shares however  have tended to decline as imports have grown 
and diversified.   
Table 9 - Imports by Country of Origin (top 10 countries)27 
Year 
2004/05 2005/06 2006/07 2007/08 Country 
Value % of 
total 
Import Value % of 
total 
Import Value % of 
total 
Import Value % of 
total 
Import 
China  385 17.7 317 12.8 473 17.2 611 20.2 
Japan  353 16.2 314 12.7 418 15.2 495 16.4 
Pakistan  326 15.0 394 15.9 419 15.3 431 14.3 
Russian 
Federation  134 6.2 227 9.2 310 11.3 359 11.9 
Uzbekistan  95 4.4 204 8.3 144 5.2 167 5.5 
Iran  123 5.6 194 7.9 189 6.9 138 4.6 
Korea of 
Republic 79 3.6 64 2.6 113 4.1 101 3.3 
India  83 3.8 68 2.8 125 4.60 99 3.3 
United 
States  24 1.1 58 2.3 47 1.7 26 0.9 
United Arab 
Emirates  46 2.1 61 2.5 98 3.6 106 3.5 
Others 529 24.3 470 19.0 408 14.9 489 16.2 
Total 2,177 100 2471 100 2,744 100 3,022 100 
 
Table 10 (below) indicates the commodity composition of imports.  As is typically the case, 
imports are far more diverse than exports.  Afghan imports are composed primarily of raw materials, 
intermediate goods and consumer goods.  India and Pakistan are significant sources for clothes and 
food products.  In 2007, India accounted for 56 per cent of garment imports and over a fifth of 
medical imports. 
The commodity composition and sources of Afghanistan 's imports have shifte d substantially over the 
course of the last three years.  The 2007/08 data from customs indicates that China is now the leading 
import source with over 20 per cent of the Afghan market.  Pakistan's share of the market for construction materials also shows a substantial rise in the 2007/08 data  with nearly 36 per cent of the 
market.  Japan and China's share of  the import market has reached over 36 per cent.  The 2007/08 data 
also indicates a drop in India's share of the Afghan import market to only 3.3 per cent from more than 
4.5 per cent of imports.  Over time, while the boom ing demand for construction materials is likely to 
continue in light of the ongoing r econstruction efforts, the composition of imports is likely to continue 
to shift in favour of consumer goods as incomes increase.     
                                                     
 
27 Source: Afghanistan Trade Statistical Yearbook 2007-08, September 2008 page 1.  
   WT/ACC/AFG/4
 Page 25Table 10 - Imports by Commodity Groups, 2004 -200728 
(in US$ million) 
Commodity 2004/05 % of total 
imports 2005/06 % of total 
imports 2006/07 % of total 
imports 2007/08 % of total 
imports 
Vehicles, aircraft, vessels transport equipment 417 19.2 570 23.1 505 18.4 580 19.2 
Base metals and articles of base 
metal 140 6.4 271 11.0 346 12.6 419 13.9 
Miscellaneous manufactured 
articles 41 1.9 277 11.2 251 9.1 351 11.6 
Machinery and mechanical 
appliances 428 19.7 330 13.4 489 17.8 308 10.2 
Prepared foodstuffs 101 4.6 318 12.9 211 7.7 299 9.9 
Textiles and textile articles 244 11.2 88 3.6 156 5.7 233 7.7 
Minerals products 205 9.4 179 7.2 221 8.1 203 6.7 
Products of chemical or allied 
industries 110 5.1 84 3.4 123 4.5 199 6.6 
Vegetable products 124 5.7 133 5.4 154 5.6 122 4.0 
Animal and vegetable fats and 
oils 125 5.7 101 4.1 90 3.3 85 2.8 
Others 242 11.1 471 4.9 198 7.2 223 7.4 
Total 2,177 100 2571 100 2744 100 3022 100 
                                                      
28 Source:  Central Statistics Office, Afghanistan Statistics Year Book 2004 -2007.   WT/ACC/AFG/4 
Page 26  
 
  4. Domestic trade in services including value and composition of foreign direct investment 
The share of services in GDP has been stead ily increasing, reaching 36.5 per cent in 2007.  
The increase in the share of services is mainly attrib uted to the expansion of  communications, retail 
and wholesale trade, construction, health and edu cational services.  The provision of security services 
has also gained increasing importance.  Based on in itial capital, services attracted 39 per cent of the 
total foreign direct investment, while constructi on took second position with a share of 33 per cent 
and industries with 9 per cent of the total foreign direct investment from 2003-2007.  
Figure 3 - Composition of Foreign Investment, 2003-2007
29 
 
Table 11 - Composition of Private Investment, 2003-200730 
Total Investment Registered in Afghanistan, 2003-2007 (thousand US$) 
Sector 2003 2004 2005 2006 2007 Total 
Total Initial capital   721,991  656,696 565,419 1,179,458 646,708  3,770,271 
Domestic 239,031  421,884 388,496 770,215 439,342  2,258,968 
Construction 52,091  195,430 201,453 131,589 141,420  721,982 
Services 37,915  92,309 43,509 99,360 243,187  516,280 
Industry 131,760  125,040 130,521 531,163 45,399  963,882 
Agriculture 17,266  9,105 13,013 8,104 9,336  56,825 
Foreign 482,960  234,812 176,923 409,243 207,366  1,511,303 
Construction 188,751  112,639 74,629 86,618 33,676  496,314 
Services 63,428  88,613 52,539 256,854 130,115  591,549 
Industry 14,874  32,280 48,100 29,627 7,615  132,496 
Agriculture 215,906  1,280 1,654 36,143 35,960  290,944 
 
Industrial Sector Foreign Direct Investment :  According to AISA, between 2004 and 2005 
new FDI in the industrial sector increased from US$32.3 million to US$48.1 million, but fell in 2006 
to US$29.6 million and in 2007 to US$7.6 million; wh en it reached its lowest level since 2003.   
Construction :  Available data indicate that invest ment in construction increased sharply 
during 2004 and 2005.   However, the number of fo reign companies investing in this sector decreased 
                                                      
29 AISA Annual Report 2008. 
30 AISA Annual Report 2008. Composition of Foreign Investment in Afghanistan 
2003-2007
39%9%19% 33%
Construction  Services Industry Agriculture WT/ACC/AFG/4 
 Page 27 
 
 
  by 16 per cent and 30 per cent during 2006 and 2007, respectively, evidently due to security, 
corruption and reductions in large scale c onstruction contracts funded by donors. 
 Services : Foreign investment in this sector fluctu ated significantly during this period, ranging 
from a low of US$37.9 million in 2003 to a high of US$243.2 million in 2007.  Most of this investment was concentrated in the capital, Kabul.  
Agriculture
: Relative to other sectors, private invest ment in agriculture remained very low, 
falling from US$17.3 million in 2003 to US$8.1 million in  2006.  (Investment rose slightly in 2007)   
- Geographic Distribution of Domestic Investment  
Approximately 80 per cent of total investme nt between 2003 and 2007 was concentrated in 
Kabul; similarly domestic investment during this  period was also predominantly in Kabul.   
Figure 4 - Distribution of Domestic Investment by Province 2003-2007 (in US$)  
 
Approximately, 80 per cent of the total investment is concentrated in Kabul while 5 per cent 
in Herat, 4 per cent in Kandahar, 3 per cent in Ma zar and 3 per cent in Jalalabad as in the following 
figure.  The distribution of domestic investment s hows that 57 per cent were concentrated in Kabul, 
5 per cent in Herat, 5 per cent in Kandahar, 4 per cent in Mazar and 4 per cent in Nangarhar and the 
rest is in the other provinces of the country. 
5. Information on financial movements rela ted to nationals working abroad, remittances 
No data is available regarding remittances or  other financial movements of Afghanistan 
citizens working outside of Afghanistan.  
6. Information on growth in trade in good s and services over recent years and forecasts for 
years to come 
According to the Central Statistics Yearbook the officially recorded level of exports was 
approximately US$454 million during 2007/08.  (T his does not include smuggled and re-exported 
goods.)  The official recorded level of imports fo r 2007/08 was US$3,021 million.  Note that official Distribution of Domestic Investment 2003-2007
Kabul
Kandahar
1 Zabul
WardakUruzgan
Takhar Sari Pul  
Samangan  Parwan 
Panjshir  Paktya 
Paktika Nuristan
NimrozNangarhar
LogarLaghman
KunduzKunar
KhostKapisa Jawzjan
HiratHilmand
GhorGhazni 
Faryab Farah 
Bamyan  Balkh Badakhshan  
BadghisBaghlan
-200,000,000  0 200,000,000  400,000,000  600,000,000  800,000,000  1,000,000,000  1,200,000,000  1,400,000,000  1,600,000,000  1,800,000,000  
0 5 10 15 20 25 30 35
Province
Distribution of InvestmentWT/ACC/AFG/4 
Page 28  
 
  estimates of imports include some goods that were  re-exported, but exclude smuggling and duty-free 
goods. 
- Exports 
 
With the Transitional Government in place in  end 2003, Afghanistan's exports more than 
doubled in its first year of existence.  The relaxa tion of trade restrictions, the adoption of a proper 
valuation system and a stable exchange rate with currency reform completed in 2003 helped generate 
the high growth in exports.  St rong fiscal discipline, prudent debt  policy and fiscal policy reforms 
contributed towards the established of a stable  macroeconomic environment by the government. 
The positive effects of trade liberalization on e xports were evident in a quick upsurge in 
exports.  Exports of carpets, dry and fresh fruits, medical herbs, karakul skins and fur accounted for 
over 90 per cent of total exports in 2006/07 and 2007/0831.  However, Afghanistan has yet to take 
advantage of the preferential trade agreements alre ady in place, for example, GSP and the bilateral 
trade agreement with India. 
Pakistan, India, Russia and Finland have been  the major destinations for Afghan exports 
during recent years, accounting for over 90 per cent of  total exports.  Pakistan alone accounted for 
over three fifths of exports and is likely to continue as one of the country's largest trade partners in the 
coming years.   
- Imports  
In recent years over half of the total imports  to Afghanistan consisted of spare parts, 
machinery and vehicles, metal products, petroleum o ils, fabric and clothing and tyres and tubes.  
Cement, wheat flour, vegetable oil, sugar and tea we re significant imports.  With a limited industrial 
base these products will likely continue to dominate th e structure of imports for the foreseeable future. 
The People's Republic of China was the major expo rter of goods in recent years.  Other major 
exporting countries have included Japan, Pakistan, Russi a, Iran, Uzbekistan and Korea.  Due to the 
relatively close proximity and high competitiveness  of Chinese products, China can be expected to 
remain as the major source of Afghan imports.  It should be noted that trade with China will be 
facilitated by the opening of an important new br idge between Afghanistan and Tajikistan greatly 
reducing transportation costs. 
III. FRAMEWORK FOR MAKING AND ENFORCING POLICIES AFFECTING 
FOREIGN TRADE IN GOODS AND TRADE IN SERVICES 
1. Powers of executive, legislative and judicial branches of government 
- The National Assembly  
On 3 January 2004, the Constitutional Loya Ji rga (with the support of the international 
community) approved Afghanistan's new constitution.  According to Article Five of the constitution, 
the National Assembly consists of two houses:  the Wolesi Jirga (House of the People) and the 
Meshrano Jirga (House of the Elders).  The Nationa l Assembly has the power to make decisions on 
issues fundamental to the country and to superv ise and oversee the activ ities of the executive and 
judicial branches.  
                                                      
31 Carpets and dry fruits accounted for over two thirds of exports during the last few years.  WT/ACC/AFG/4 
 Page 29 
 
 
  The National Assembly has extensive powers including the powers:  
− To enact, amend, ratify, and modify laws and/or legislative decrees;  
− To approve plans for economic, social, cu ltural and technological development;  
− To establish or abolish taxes;  
− To approve the government's budget;  
− To grant permission for loans; and 
− To ratify or abrogate interna tional treaties and agreements. 
In addition, the National Assemb ly has the authority to set up commissions and/or special 
commissions to examine issues and to inquire about government actions.   
- The Executive  
The executive branch of government consists of  the President, Ministers and Governors of the 
provinces.  The President, who is both the head of  state and the head of government, exercises his 
authority with respect to all branches of govern ment in accordance with the provisions of the 
constitution.  The President has two Vice-Presidents a nd is elected by a simple majority through direct 
voting.  The presidential term of office is five years.  
The President has vested in him various powers, including: 
− Issuing decrees and promulgating laws;  
− Supervising the implementation of th e provisions of the constitution;  
− Determining the fundamental policies of the St ate, subject to the approval of the National 
Assembly;  
− Acting as the commander–in-chief of the armed forces; 
− Declarations of war and ceasefire, subject to the approval of the National Assembly; 
− Sending contingents of the armed forces to fore ign countries, subject to the approval of the 
National Assembly; 
− Appointing ministers, the attorney general, th e Governor of the Cent ral Bank, and provincial 
governors; 
− Acting as head of the National Security directorate; 
− Acting as the president of the Red Crescent Society; and  
− Appointing the head and members of the Supreme Court with the approval of the Wolesi 
Jirga.  
The President can call for a referendum on importa nt national, political, social and economic 
issues, which shall not be contrary to the provisions  of the constitution or for the amendment of such 
issues.  
The government includes the ministers under the ch airmanship of the President.  Ministers are 
appointed by the President, subject to approval by the National Assembly.  As heads of administrative 
units and members of the government, the ministers perform their duties within the limits determined 
by the constitution and other laws.  The government's functions include:  
− The implementation of the constitution, laws, re solutions adopted by the National Assembly, 
and decrees of the President;  
− To create and submit to the National Assemb ly plans on socio-economic development and 
annual state budgets; and 
− To organize and supervise the function of all branches of the government and of the local 
administration.   WT/ACC/AFG/4 
Page 30  
 
  The ministers are responsible to the President and to the Wolesi Jirga for their particular 
duties.  
- The Judiciary
 
Under the constitution the judicial branch is an independent branch of the Government of the 
Islamic Republic of Afghanistan.  The judicial branch  consists of the Supreme Court, Appeal Courts 
(Provincial Courts), and Primary Courts (District Co urts).  The Supreme Court is the highest judicial 
organ.  
The hierarchy of legislation in the Islamic Republic of Afghanistan is as follows:  
− Constitution; 
− Laws (that both Houses of the National Asse mbly approve and the President endorses); 
− Presidential Legislative decrees; 
− Regulations which are enacted by the Government (Cabinet) according to the laws; and 
− Resolutions and/or approvals by the Council of Ministers. 
The laws of the country are subject to a process of ongoing reform.   
2. Government entities responsible for making  and implementing policies affecting foreign 
trade 
The Ministry of Commerce and Industries has primary responsibility for the formation and 
management of international trade policy.  It advises on licenses for import and exports and 
administers import and export licenses and quotas, where applicable. 
The High Commission on Investment (the "Commi ssion") is the government's focal point for 
policy-making on investment and is the highest administrative authority with respect to the 
implementation of the Private Investment Law.  To  assist in carrying out its duties, the Commission 
has established the Afghanistan Investment Su pport Agency as a limited liability company32. 
The administration of customs, including its classification and valuation of goods is the 
responsibility of the customs department of the Ministry of Finance.  
The Afghanistan National Standardization Aut hority (ANSA) is the principal standards 
setting body, which was established by the Presiden tial Decree No. 952 in June 2004.  In August 2007 
the Council of Ministers approved the ANSA as an independent public agency.  Based on this decree and the council of ministers' approval, ANSA is pursuing the following objectives: 
− Develop and maintain Afghan national product standards; 
− Safeguard human health and safety through testing and certification; 
− Develop a metrology function to calibrate measuring instruments; 
− Promote technical progress; 
− Facilitate trade via standardization activities; and, 
− Act as regulator in specified fields and activities by developing and monitoring technical 
regulations. 
To support its functions ANSA is establishing fac ilities and labs for inspection and testing.  It 
will cooperate with all stakeholde rs in regulating the trade in g oods to comply with the national 
standards and technical regulations.  Currently ANSA is undertaking a number of structural reforms to 
                                                     
 
32 Afghanistan Private Investment Law 2005   WT/ACC/AFG/4 
 Page 31 
 
 
  develop a variety of norms and standards in the areas of health and safety, agriculture and food, 
housing and construction materials.  A draft law of Standards Law is being prepared to be submitted 
for approval by the Parliament and promulga ted by the President in the coming year.  
The Ministry of Finance is responsible for government procurement.  The following have responsibilities for issues relating to trade in services: 
− The Ministry of Commerce and Industries;  
− The Ministry of Finance; 
− The Ministry of Justice; 
− The Ministry of Foreign Affairs,  
− The Ministry of Transport and Civil Aviation;  
− The Ministry of Information, Culture and Youth;  
− The Ministry of Telecommunication and Information Technology; 
− The Ministry of Education,  
− The Ministry of Higher Education; 
− The Ministry of Labour; 
− The Ministry of Mines; 
− The Ministry of Rehabilitation and Rural Development; 
− The Ministry of Agriculture, Irrigation and Livestock;  
− The Ministry of Public Health; 
− The Ministry of Public Works; and  
− The National Environmental Protection Agency. 
Responsibility for issues concerning trade in fina ncial services rests with the Da Afghanistan 
Bank.  
Responsibility for intellectual property rights r ests with the Board of Intellectual Property 
Rights.  The Board, established in late 2007, is led by the Ministry of Commerce and Industries and 
includes a number of relevant ministers. 
The Ministry of Agriculture, Irrigation and Li vestock is responsible for phytosanitary 
measures.   
The Afghanistan Investment Support Agen cy under the High Commission on Investment, 
which is chaired by the Minister of Commerce and Industries, is responsible for issuance of 
investment licenses and investor registration relati ng to domestic and foreign investment and covering 
all sectors.  
3. Division of authority between central and sub-central governments 
Under Article 8 of the Constitution, for admi nistrative purposes, the Islamic Republic of 
Afghanistan shall be based on central and local admi nistrative units in accordance with the law.  The 
central administration is divided into a number of administrative units, each of which shall be headed 
by a minister.  
The local administrative unit is the province.  Currently the country is divided into 34 
provinces.  The number, area, parts, and structure of province-related administrative units are regulated by law on the basis of population, social  and economic conditions and geographic location.  
Each province is administered by a governor.  There are provincial administrative units in each WT/ACC/AFG/4 
Page 32  
 
  province, usually comprising of representatives of the appropriate ministries.  These officials 
administer polices that are solely determined by the central government.  
Local governments are not delegated any econom ic authority.  Local governments do not 
have taxation authority and cannot tax imported go ods.  All goods are taxed upon entry into the 
country (customs duties).   
The Ministry of Commerce and Industry has business licensing directorates in 16 provinces: 
Balkh, Kandahar, Herat, Nangarh ar, Kundoz, Parwan, Ghazny, Paktya ,  Jouzjan, Faryab, Khoust, 
Badeghes, Andkhoy, Nemroz , Badakhshan and Farah. 
4. Legislative programmes or plans to change the regulatory regime 
During the last six years, the Afghan governme nt has been engaged in the process of updating 
and transforming the legal and regulatory system.  The reformed system of commercial laws and 
regulations are intended to meet international standa rds and are expected to be consistent with WTO 
requirements.  
5. Laws and Legal Acts 
The list of the laws and legal acts, documents  and other normative legal decrees, regulating 
the activity of the Customs Authorities, imports, exports, transit, rules on foreign investments, and 
economic questions influencing trade in goods and services is presented in Annex 2 of this 
Memorandum.  
6. Description of judicial, arbitral, or administrative tribunals or procedures 
Afghanistan's court system is comprised of: 
- The Supreme Court
 
 Supreme Court is the court of cassation for the Court of Appeals and at the provincial level.  
The Supreme Court is headed by the Chief Justice and has nine members, all of which are appointed 
by the President subject to the approval by the Wolesi Jirga.  
 The Supreme Court has the following Tribunals: 
− General Criminal Tribunal; 
− Public Security Tribunal; 
− Civil and Public Rights Tribunal; and 
− Commercial Tribunal. 
- Judicial Duties and Responsibilities of the Supreme Court  
 The Supreme Court has the following duties a nd responsibilities in the area of judicial issues 
and interpretation of laws: 
− Assessment on conformity of laws, decrees, legal documents, international contracts and 
conventions in accordance with the Constitution an d their interpretation, based on requests by 
the government or courts in accordance with the law. 
− Propose laws on regulating the judicial affair s to the national assembly through government.  WT/ACC/AFG/4 
 Page 33 
 
 
  − Revising the rulings of courts due to presence  of new reasons based on complaints by the 
Attorney General's Office (AGO) or by a party to the claim, according to the provisions in the 
law. 
− Resolving courts' conflict of jurisdiction and submitting jurisdiction of resolving a case from 
one court to the other based on proposal by the AGO or party to the claim when reasonable grounds arise. 
− Studying reasons and making decision on extraditing criminals to foreign states in accordance 
with law. 
− Studying reasons of a charge made, and making decision on submitting an Afghan citizen to 
the foreign state in the light of Article 28 of the Constitution. 
− Ensuring uniformity in judicial treatment. 
− Taking measures on criminal and disciplinary offences by judges. 
− Evaluating the courts inquiries on judicial issues and providing responses accordingly. 
- The Appeals Courts (Provincial Courts)
 
 Appeals Courts are established in each province of the country in accordance with the law.  
The Appeals Court shall oversee and review the d ecisions made or judgments given by a primary 
court in accordance with the provisions of the law.   Appeal courts have the following tribunals: 
− General Criminal Tribunal; 
− Public Security Tribunal; 
− Civil and Family Tribunal; 
− Public Rights Tribunal; 
− Commercial Tribunal; and 
− Juvenile Tribunal. 
 The Supreme Court may establish other tribunals as needed within the structure of the Appeal 
Courts with the approval of the President. 
- The Primary Courts (District Courts)  
 The primary courts are the lowest courts, primarily dealing with civil and criminal cases.  The 
hierarchy of the primary courts is: 
− Central Provincial Court; 
− Juvenile Court; 
− Commercial Court; 
− District Court; and 
− Family Court. 
 The Central Provincial Primary Court has the following tribunals: 
− General Criminal Tribunal; 
− Civil Tribunal; 
− Public Rights Tribunal; 
− Public Security Tribunal; and 
− Traffic Crimes Tribunal. 
 Each province has a commercial court. WT/ACC/AFG/4 
Page 34  
 
   There are no administrative tribunals.  A certain number of cases concerning the civil 
responsibility of the state are dealt with by the courts. 
 Commercial arbitration was established under Ministry of Commerce and Industries within 
the framework of the recently enacted Mediation Law. 
 In commercial courts a case is first subm itted to the Primary Commercial Court in the 
respective district.  A panel of three judges is assigned to each case.  After standard documentation, 
presentation of arguments, witnesses, and the review  of evidence, the judges deliberate and announce 
their decision.  If either of the parties is not satisfi ed with the decision, they may appeal to the Appeals 
Court.  A similar process is undertaken and a decisi on is announced.  Either party may wish to appeal 
the decision to the Commercial Tribunal of the Supr eme Court.  This court with three judges only 
reviews the case to make sure that the rule of law was applied.  They do not receive witnesses or 
review evidence.  The decision of the Commercia l Tribunal of the Supreme Court is final.  
 It is recognized that the legal administrative st ructure, which supports enforcement procedures 
in the judicial system, requires institutional strengthening.  Efforts are underway to improve systems and organization and to develop incr eased capacity throughout the system. 
- Relation with WTO Agreements
  
 The constitution provides for the National Asse mbly to ratify international treaties and 
agreements.  International treaties that necessitate  the amendment of domestic laws or the enactment 
of new domestic laws require ratification.  In the case of the Marrakech Agreement Establishing the 
WTO and the protocol of accession to the WTO, it would be necessary to submit any agreement to the 
National Assembly for ratification.  After ratifica tion the President's office through the Ministry of 
Justice Official Gazette will notify the line  ministries and publicize the ratification.  
IV. POLICIES AFFECTING TRADE IN GOODS 
1. Import Regulations  (a) Registration requirements for engaging in importing  
In accordance with the prevailing Commercial Code of Afghanistan (1955), individuals and 
businesses engaging in import and export activities ar e required to register.  Import and export 
companies or individuals need to obtain a Busi ness licence from the Licensing Department of 
Ministry of Commerce and Industries.  
Business licence applicants for import/export registration are required to meet the criteria 
explained in the Business Licensing Regulation
33. 
(b) Characteristics of national tariff 
Afghanistan's customs tariffs are based on in ternationally accepted principles for commodity 
classification.  The Afghanistan National Tariff Schedule (ANTS) uses the Harmonized Commodity 
Description and Coding System (HS 2007). 
The tariff structure currently maintains 12 tariff rates:  0, 1, 2.5, 3.5, 5, 8, 10, 12, 16, 20, 25 
and 40 per cent.  The tariff structur e allows/provides for the use of: 
                                                      
33 For further detail please refer to Annex 3 of this Memorandum and Business Licensing Regulation 
2004.   WT/ACC/AFG/4 
 Page 35 
 
 
  − Ad valorem  tariffs, calculated in relation to the cust oms value (usually invoice, see Annex 4); 
− Specific duties, calculated at the fixed cost per unit of goods; and 
− A combination of ad valorem  and specific tariff rates. 
At present only ad valorem tariff rates are applied. 
A limited number of imports from India receive preferential tariff rates consistent with the 
preferential trading agreement between Afghanistan and India.  
The currently applied tariff rate structure is made up of relatively low tariff rates and is a 
reflection of Afghanistan's intention to establish an open market-based economy.  As the process of 
economic development following decades of conflict and economic isolation is still in its early stages, 
Afghanistan may be required in the future to ad just tariff rates overall as well as on certain goods, or 
categories of goods, to provide for adequate target ed protection for a limited period of time for the 
development of specific local industries.  If any su ch changes do take place, the government will take 
into consideration the economy-wide impacts that ma y result, including in particular the impact on 
consumers.  These factors would be reflected in Afghanistan's specific market access commitments. 
(c) Tariff quotas, tariff exemptions 
 There are no tariff quotas in Afghanistan. 
 Imported goods can be exempted from customs duty in the following ways by: 
− A legal act by the Afghan government, i.e., Pr esidential Decree, laws and regulations, and 
government agreements; and 
− Ratified international agre ements or conventions. 
 In accordance with the Article 27 (2) of the Custom Law the following imported goods shall 
be exempted from paying customs duty: 
− Goods imported by Officials of the State during official travels;  
− Office materials and equipment of political representatives and international agencies, 
intended to be used in residences and offi ces of representatives of foreign countries in 
Afghanistan, after confirmation of permission to do so by competent authorities; 
− Items intended for personal use by foreigners working in Afghanistan according to the terms 
and conditions of their contract; 
− Permitted books, gazettes, magazines and newspapers; 
− Goods provided for government projects funded by loans or imported into the country by or 
for public and private foreign and internationa l relief and development agencies approved by 
the government;  
− Personal effects used by Afghan delegations or Afghan international workers and their family 
members while abroad; 
− Travellers' personal goods in accord ance with the customs tariff; 
− Commercial samples and advertising gifts; 
− Post parcels valued at less than Af 5,000; 
− Honorary decorations or awards; 
− Samples sent to organizations protecting copyri ghts or industrial or commercial patent rights; 
− Used movable property belonging to natural pe rsons, who transfer their normal place of 
residence from another country to Afghanistan, as provided in the customs tariff; 
− Pure-bred breeding animals and insects and la boratory animals; biological or chemical 
substances needed for scientific researches; WT/ACC/AFG/4 
Page 36  
 
  − Therapeutic substances of human origin a nd blood grouping and tissue typing reagents; 
− Substances for the quality control of medicinal products; 
− Fuels, lubricants and equipments carried w ith and necessary for the normal functioning of 
transport vehicles in accordance with the relevant procedure; and 
− Other goods may be included as exempted goods upon recommendation of the Minister of 
Finance and approval by Council of Ministers as required. 
 An approved application form needs to be pr esented to the Customs Office when claiming an 
exemption. 
(d) Other duties and charges, specify ing any charges for services rendered 
- Non-Tax Measures (NTM)
 
 A levy is imposed on all imports except food ite ms, calculated as 2 per cent of the CIF (Cost 
Insurance and Freight) value to the government.  This amount is given to The Afghan Red Crescent 
Agency in order to support this charity organization.  
(e) Quantitative import restrictions, including  prohibitions, quotas and licensing systems 
 The importation of the following goods is currently prohibited: 
− Alcoholic drinks; 
− Live pork; 
− Meat and edible offal of pork; 
− Pork fat; 
− Cotton seeds; and 
− Narcotics and illegal drugs. 
 The importation of the following goods into Afgha nistan is further subject to substantive and 
procedural limitations:  
− The import of medicine is subject to permissions  and regulations of the Ministry of Public 
Health and the Ministry of Agriculture. 
− The import of arms, and military equipment is s ubject to regulations and the import of arms, 
ammunitions, military equipment, spares require d for their manufacturing, military related 
scientific-technical information and are not allowed unless a special permit is obtained from the Ministry of Defence. 
− There are a number of non-tariff measures in cluding quantitative restrictions, absolute 
prohibition, quantity control measures, techni cal measures, discretionary import licenses, 
import licensing, automatic import licensing, non-automatic licensing prior to authorization 
for sensitive products, inspection, and quarantin e.  The goods subject to these measures are 
determined by the Ministry of Finance.  For details please refer to the Annex 9.  
(f) Import licensing procedures  
 At present the import of goods is not subject to licensing, except as indicated under sub-
paragraph "e" above.  Anne x 3 of this Memorandum gives details of licensing procedures for imports 
of medicine.  WT/ACC/AFG/4 
 Page 37 
 
 
   The current situation reflects Afghanistan's li mited control over and re gulation of imports.  
Afghanistan's import regime, including its import licensi ng regime, is expected to evolve in the future, 
keeping in line with international obligations. 
(g) Other border measures 
 There are no other border measures. 
(h) Customs valuation 
The system of customs valuation in Afghanistan is broadly in line with the general principles 
set out in the Agreement on Implementation of Ar ticle VII of GATT.  Valuation is based on the 
transaction value of the goods subject to adjustments due to the inclusion of cost insurance and freight 
charges.  In case of dispute over accuracy of the transactions value, one or more of standard GATT 
valuation options are to be used.  There is no valu e added tax and excise tax applicable at the customs 
stations.   
Annex 4 provides a detailed description of appr opriate order of determination of customs 
value (customs valuation). 
Afghanistan will require additional technical as sistance in the implementation of the Custom 
Valuation Agreement from the international co mmunity, in particular from WTO members. 
(i) Other customs formalities 
Importers have to submit a customs declara tion for imports accompanied by an invoice or 
other proof of the price actually paid, certifi cate of origin, and shipment documentation.  
(j) Pre-shipment inspection 
Afghanistan does not regularly use pre-shipment inspection services, nor does it have any 
legal regulations on pre-shipment inspection.  Ho wever, in some cases pre-shipment inspection has 
been used by private sector importers to meet consumer protection requirements and technical standards. 
(k) Application of internal taxes on imports  
In accordance with the Article 70 of the Income  Tax Law of 2005, administered by Ministry 
of Finance, fixed taxes, in addition to import duties, are payable on imports.  
- Fixed taxes on imports
 
Persons who import goods and have a business li cence are subject to 2 per cent fixed tax on 
the total cost (including custom duties) of the goods imported.  The tax paid will be allowed as a 
credit in the calculation of the person's annua l income tax assessment in accordance with the 
provisions of this Law.  
Persons who import goods without having a business licence are subject to 3 per cent fixed 
tax on the total cost (including customs duties) of  the goods imported in lieu of income tax on such 
activities.  WT/ACC/AFG/4 
Page 38  
 
  Persons who import goods and ha ve an interim business licence but do not provide their 
business declaration form to the Ministry of Finan ce are subject to 3 per cent fixed tax on the total 
cost (including customs duties) of goods imported in lieu of income tax on such activities.  
These taxes shall be paid at the location where customs duties on the goods are paid.  
(l) Rules of origin  
The principles and rules for identifying the country of origin embodied in the Law on 
Customs Tariff are broadly in line with the Kyoto Convention. The tests or criteria used to assess 
"sufficiency of transformation" adopted in the Law include, among others: 
− A change in tariff heading; 
− Determining a list of specific processing operations, which do or do not, confer upon the 
products involved the origin of the countr y in which the operation was realized; and 
− The use of the percentage of value-added genera ted (or the percentage of materials utilized in 
transforming the product) in a country. 
Afghanistan will require additional technical assistance in the development and enforcement 
of rules of origin from the international co mmunity, in particular from WTO members.   
(m) Anti-dumping regime 
Afghanistan does not currently have an anti-dumping law.  
(n) Countervailing duty regime 
At present, Afghanistan has not developed a countervailing duty regime and countervailing 
duties are not imposed. 
(o) Safeguard regime 
There is currently no safeguards regime in Afghanistan. 
2. Export Regulations 
(a) Registration requirements for engaging in importing 
The Licensing Department of the Ministry of  Commerce and Industries administers licenses 
for conducting trade activities in Afghanistan. The MoCI  regards a trader as any entity that engages in 
import-export operations, regardless of whether they are sole proprietors or companies and whether 
they are domestic or international businesses. These businesses must obtain a licence from the MoCI 
before they commence their activities. In order to obtain a Trading licence the applicant must also 
register with the Afghanistan Central Business Re gistry, obtain Tax Identification Number, publish in 
the Official Gazette and complete a criminal check process. 
(b) Customs tariff nomenclature, types of duti es, duty rates, weighted average of rates 
Customs duties are not imposed on export ed goods regardless of their type.  WT/ACC/AFG/4 
 Page 39 
 
 
  (c) Quantitative export restrictions, including  prohibitions, quotas and licensing systems 
There are no export restrictions currently bein g applied.  However, the Head of Custom 
Department has the authority to adopt prohibitions  or restrictions for reasons of public morality; 
public security; protection of the environment; protecti on of the health and life of humans, animals or 
plants; the protection of national treasures possessing ar tistic, historic or archaeological value; or the 
protection of industrial and commercial property and other state policies (Article 53 of the Custom 
Law).  
(d) Export licensing procedures 
The export of goods is currently subject to the procedures explained under the "Business 
Licensing Regulation 2004" and the procedures ex plained under clause (a) of the above export 
regulation.   
(e) Other measures 
There are currently no such export restricting measures. 
(f) Export financing, subsidy and promotion policies 
Presently, there are no government sponsored schem es that promote exports through the use 
of subsidies.  
In order to increase exports and address obstacles facing exporters, the Export Promotion 
Agency of Afghanistan (EPAA), an executive agen cy of the Ministry of Commerce and Industry 
(MoCI), was established in September 2006.  EPAA acts as an implementing agency of the export 
promotion policies of MoCI, promoting exports throu gh exportable offer development tools, advising 
and advocacy, marketing, coordinating both the pub lic and private sector initiatives to create an 
enabling environment for competitive exports while contributing to job creation.  Other areas that 
have been identified for reform of export procedures include: 
− Streamlining and simplification of admi nistrative regulations and procedures; 
− Increasing awareness and understanding of ex porters with regard to documentation 
requirements and necessary bureaucratic requirements; and 
− To eliminate illegal fees (bribes) that reported arise at various stages of the export process. 
(g) Export performance requirements  
No such requirements currently exist in Afghanistan. 
(h) Import duty drawback schemes 
There is currently no duty-dra wback mechanism in Afghanistan. 
3. Internal policies affecting foreign trade in goods 
(a) Industrial policy, including subsidy policies 
Except for the development of infrastructure,  the privatization of large state owned 
enterprises, and the establishment an enabling envi ronment supportive of private sector development, 
the government is not directly involved in shapin g the performance of industrial sectors.  Afghanistan 
currently does not have any subsidy programs. WT/ACC/AFG/4 
Page 40  
 
  (b) Technical regulations and standards, in cluding measures taken at the border with 
respect to imports 
There are currently no technical regulations a nd standards in place, but the Afghan National 
Standardization Authority (ANSA) as the regulating body is developing technical regulations and 
standards on food safety, constructions materials, petroleum and gas, medicines and metrology with 
the intention of avoiding the creation of unnecessary barriers to trade.   
ANSA is a Corresponding Member of the International Standards Organization (ISO) from 
2005.  ANSA attends the annual General Assembly of  the ISO and DEVCO meetings.  Furthermore, 
ANSA participates in workshops and trainings conducted by ISO in the region.  ANSA is not currently a member of the International Office of Epizootics (OIE).  ANSA is planning to join the 
Codex Alimentarius Commission and the Inte rnational Plant Protection Convention.  
Due to the complexity and highly technical nature of these issues, Afghanistan requires 
additional technical assistance with regard to techni cal barriers to trade (TBT) from the international 
community, in particular from WTO members.   
(c) Sanitary and phytosanitary measures, incl uding measures taken with respect to imports 
Afghan customs requires certificates confirming the quality and origin of imported goods 
before clearing.  These measures ar e used to ensure that imported agricultural products comply with 
sanitary standards.  However, Afghanistan has out dated SPS regulations and limited testing facilities 
to enforce such standards.  The government is currently updating and m odernizing SPS regulations; 
the Ministry of Agriculture, Irrigation and Livestoc k, the Ministry of Public Health and ANSA are 
working together to develop new SPS measures ( see above with regard to joining the Codex 
Alimentarius Commission and the Intern ational Plant Protection Convention). 
(d) Trade-related investment measures 
Afghanistan provides concessions to foreign invest ors in accordance with the Article 18 of the 
Investment Law, enacted in December 2005, as we ll as in accordance with the Income Tax Law and 
Customs Law.  Under current rules, trade perform ance or local content requirements are not set as 
conditions for investment.   
The following concessions have been consider ed for both foreign and domestic investors 
under the Investment Law: 
- Tax Concessions for Registered Enterprises
 
− A Registered Enterprise which incurs a net oper ating loss in any fiscal year may carry this 
loss forward and apply it as a deduction from its ta xable income to the extent permitted in the 
Income Tax Law. 
− A Registered Enterprise shall be entitled to an accelerated deduction for depreciation on 
capital assets to the extent perm itted in the Income Tax Law. 
- Import-Export Duty and Tax Concessions for Registered Enterprises  
− A Registered Enterprise shall be exempt from export duties a nd export taxes on products that 
it manufactures or assembles in Afghanistan to the extent permitted under the Customs Law.  
An export licence shall be required for such exports, but such licence shall be granted 
automatically upon submission of such documentation as is required by law.  WT/ACC/AFG/4 
 Page 41 
 
 
  − Afghanistan has signed preferential trading and investment agreements with the European 
Union, India, USA, Japan, and Canada, wh ich provide incentives for those investing in 
Afghanistan. 
− Zero or no tax on the import of machinery for i ndustries and 1 per cent tariff on the import of 
raw material needed for industrial products. 
While recognizing the limited economic case for trade performance or local content 
requirements for investments or investment incenti ves, Afghanistan as an LDC reserves its rights 
under applicable WTO rules, including waivers accord ed to LDCs, to introduce targeted measures in 
the future. 
(e) State-trading practices 
There are currently no governmental or non-g overnmental enterprises, including marketing 
boards, with exclusive rights or privileges in export or import operations. 
(f) Free zones 
There are currently no free zones on the territory of the Islamic Republic of Afghanistan.  
(g) Free economic zones 
There are currently no free economic zones in  Afghanistan.  However the Reconstruction 
Opportunity Zones (ROZ) program, an initiative of th e Governments of Afghanistan, Pakistan and the 
United States, is currently under consideration.  Th is program would provide duty free access to final 
products processed in specified economic zones in d esignated areas of both Afghanistan and Pakistan.   
(h) Trade-related environmental policies 
Afghanistan's President Hamid Karzai estab lished the National Environmental Protection 
Agency (NEPA) in April 2005, the country's first such body.  In December 2005 the Afghan Cabinet 
approved environmental legislati on which was approved by the Nati onal Assembly and promulgated 
by the President in January 2007.  
The environmental law clarifies administrative rules at the national level and the means for 
coordination with provincial authorities.  It pr ovides a framework for managing natural resources, 
conservation, maintaining biodiversity, prot ecting drinking water, pollution control, and 
environmental education.  The primary goal of the e nvironmental law is to facilitate the reconstruction 
and sustainable development of the national economy.  
Article 54 of the Environment Law says: "(1)  all trade in specimens of species listed in the appendices I, II and III of the 
Convention on International Trade in E ndangered Species of Wild Fauna and Flora 
(CITES) shall be carried out in accordance with the provisions of that Convention.   
(2)  The State shall confiscate any specimens, containers, equipments or vehicles involved 
in international trade of species listed in appendix CITES." 
The new law will promote institutional reform and the development of regimes for pollution 
control and environmental impact assessment.  In  addition, under Articles 54-57, it will provide 
measures to prevent imposing unnecessary limitations a nd barriers to trade both internationally and 
domestically.    WT/ACC/AFG/4 
Page 42  
 
  (i) Mixing regulations 
There are no mixing regulations in Afghanistan. 
(j) Government-mandated counter-trade and barter 
Government-mandated counte r-trade and/or barter practices do not exist.   
(k) Trade agreements leading to co untry-specific quotas allocation 
Afghanistan has not entered into any such agreements. 
(l) Government procurement practices, includi ng general legal regime and procedures for 
tendering, dealing with tenders and award of contracts 
Government procurement policy and practices ar e administered nationally by the Procurement 
Monitoring Office, Department of Fiscal Policy of th e Ministry of Finance.  Government procurement 
is governed by the Procurement Law enacted in October 2005.  
All Ministries, public agencies, Provinces and a ll state owned enterprises are bound to adhere 
to the Procurement Law and accompanying regulations .  The objectives of the Procurement Law are: 
− Ensuring transparency; 
− Achieving regularity and uniformity in procurement; 
− Maximizing efficiency; and 
− Guaranteeing suppliers and contractors fair and equal access to the award of contracts.  
(m) Regulation of trade in transit  
The transit of goods can be realized by any pub lic route and is covere d by related provisions 
of the Customs Law; international and domes tic transit procedures based on the ASYCUDA++ 
System; and the Law on Road Transportation and Freight Forwarding Regulation.   
Goods in transit between two customs stations  of Afghanistan should be delivered into a 
customs station on arrival within terms established by the customs authorities at the point of departure.  The Custom Law establishes procedures applied to goods that have entered Afghanistan 
with the intent of moving through Afghanistan to another country.  Transit procedures are applied to 
goods placed under customs control or supervision a nd are moved from one point to another within 
the customs territory of the State.  
Goods in transit will not involve the assessment of duties or application of commercial policy 
measures.  Transit procedures may be used in co mbination with other customs designations or may 
include such alternative arrangements as may be established by relevant procedure pursuant to 
international conventions and ag reements.  When the Customs De partment determines that non-
Afghan goods are in transit to a destination in Afghanistan and have not complied with transit 
procedures, the relevant customs officials will collect the appropriate amount due from the security 
and may seize the goods in accordance with law.  
Transit procedures will apply to goods passi ng through a third country and re-entering 
Afghanistan without assigning a new customs designation, in cases provided for by international 
agreement.   WT/ACC/AFG/4 
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  Afghanistan is party to the Economic Coope ration Organization (ECO) Multilateral Transit 
Trade Agreement.  This Agreement relates to the tr ansportation of goods with or without transfer of 
cargo, via one or more borders between the cust oms points of a member country and the customs 
destination point of another member country, bein g subject to jurisdiction of other ECO member 
countries.  The agreement covers transportation by ro ad, rail, sea, and/or air.  To implement the ECO 
Transit Trade Agreement, the ECO Transit Trad e Committee has been established, which includes 
one representative from each member  country of the Agreement. 
4. Policies affecting foreign trade in agricultural products  
(a) Imports – i.e. comprehensive description of  the types of border protection maintained:  
customs duties and/or any other border measures 
All import procedures described in Section IV appl y equally to agricultural imports.  No other 
border measures are applied to agricultural goods othe r than sanitary and phytosanitary measures.   
(b) Exports – i.e. description of, and the budgetary expenditure and any revenue foregone 
involved in each of the export border measures 
At present there is no special export regime applicable to agricultural goods and no export 
subsidy measures are currently in place. 
(c) Export prohibitions and restrictions 
Currently there are no export prohibitions or  restrictions for agriculture products. 
(d) Export credits, export credit guarantees or insurance programmes 
At present there are no export credits other than those available from commercial banks.  
There is no system of export credit guarantees or rele vant insurance programs for agricultural goods.   
(e) Internal policies – i.e. description of, and the budgetary expenditure and any revenue 
foregone involved in each of the domestic support measures in place 
The majority of the population lives in rura l areas and depends on agriculture for their 
livelihood.  Because of the central role of agri culture in determining national welfare, the Afghan 
government pursues a strategy designed to increas e food production and enhance food security.  This 
strategy includes the following domestic support measures:  
− Provision of infrastructure services including electricity, roads and water reticulation and 
management; 
− Provision of extension services;  
− Research; and 
− Local level programs aimed at increasing f ood production, the stabilization of shifting 
cultivation (slash and burn), sustainable community based resource management and 
diversification of farming systems. 
Many of these services are the policy responsibilit y of the Ministry of Agriculture, Irrigation 
and Livestock and the Ministry of Rehabilitation and Rural Development.  These programs are often 
carried out in conjunction with fo reign aid and other donor projects.  These programs are of the types 
which are classified as Green Box domestic s upport under the WTO Agreement on Agriculture. WT/ACC/AFG/4 
Page 44  
 
  5. Policies affecting foreign trade in other sectors  
(a) Textiles regime 
There is no special textiles regime in place. 
(b) Policies affecting foreign trade in other major sectors 
The Afghan government has developed as the basi s of the ANDS a number of comprehensive 
sector strategies
34.  Among the areas covered that will contri bute to increased international trade are 
the strategies aimed at improving regional econo mic cooperation; private sector development; 
agriculture and rural developmen t; banking and fina ncial sector development: telecommunication; and 
transportation.   
V. TRADE–RELATED INTELLECTUAL PROPERTY REGIME 
1. General  
The legal base for intellectual property right pr otection is currently not fully developed in 
Afghanistan.  In mid-2007 a Board of Intellectual Property Rights, led by the Ministry of Commerce 
and Industries, was established to support and protect intellectua l property rights.  New laws 
consistent with minimum standards of intellectual property protection, as set out in the Trade-Related 
Aspects of Intellectual Property Rights (TRIPS) Agreement, are currently being drafted. 
Notwithstanding the goal of eventual full TR IPS conformity, Afghanistan, as an LDC, 
reserves the right to use the fl exibilities accorded to LDCs by th e TRIPS Agreement and through 
relevant decisions taken by the responsible WTO bodies.  
(a) Intellectual property policy  
The Afghan government is committed to a stra tegy for economic growth and development 
based on private sector leadership and integration in to the global economy.  To achieve these national 
objectives the government aims to provide, in due course, effective legal protection for intellectual 
property rights, including trademarks, industrial designs , the designs of integrated circuits, copyright 
and patent protection.  Notwithsta nding this goal, Afghanistan will c onsider the implications for its 
development needs.   
At present Afghanistan has one law on trademarks rights, which is the only law that protects 
intellectual property.  This law was enacted in 1960 .  New laws that meet international standards on 
copyrights, trademarks and patent s are currently being developed. 
(b) Responsible agencies for policy formulation and implementation 
The National Board on Protecting Intellectual Property Rights, which is chaired by the 
Ministry of Commerce and Industry and includes the Ministries of Mines, Culture and Youth, and 
Justice, is developing policies to a ddress intellectual property rights.   
                                                      
34 ANDS Sector Strategies may be obtained at www.ands.gov.af .  WT/ACC/AFG/4 
 Page 45 
 
 
  (c) Membership of international intellectua l property conventions and of regional or 
bilateral agreements 
Afghanistan became a Member of the World Intellectual Property Organisation (WIPO) in 
September 2005. 
(d) Application of national and m.f. n. treatment to foreign nationals  
The only law that covers aspects of intellectua l property rights in Afghanistan entitles foreign 
nationals engaged in lawful production, commercia l and service activities to register a trademark on 
the same basis as Afghan nationals (Article 5 of the Law on Trademarks).  Afghanistan is aware of the 
importance of granting national and Most Favoured Na tion treatment to foreign nationals, and there is 
an expectation that these principles will be honoured once Afghanistan becomes bound by the TRIPS 
Agreement. 
(e) Fees and taxes 
The fees for trademark registration are set out in the Law on Trademarks (see Table 12).  
Table 1235 -  Fees With Respect to Trademarks (Amounts in Af)  
Trademark registration or trademark renewal  1,000  
Registration of joint-venture companies   500-5,000  
Trademarks registration of foreign companies  500-5,000 
For registration of trademarks of fo reign companies' agencies  1,000 
 
The protection of other categories of intellect ual property is still under consideration and 
consequently fees and taxes related to these other areas have yet to be fixed. 
2. Substantive standards of protection, incl uding procedures for the acquisition and 
maintenance of intellectual property rights 
(a) Copyright and related rights, including rights of performers, producers of phonograms 
and broadcasting organizations 
There are presently no laws on copyright and rela ted rights in Afghanistan and there are no 
general legal principles which grant and protect copy right.  Legislation is being prepared to accede to 
the Berne Convention.  Currently a draft law on copy rights is being prepared and is in the process of 
finalization and approval.  
(b) Trademarks, including services marks  
While the existing trademark laws and regulations  are still in effect, a new law being prepared 
by the Ministry of Commerce and Industry.  The objectives of the new trademarks law will be to: 
− Unify trademark protection throughout the country; 
− Encourage commerce and foreign investment; 
− Stimulate production of quality goods;  
− Protect consumers; and 
− Suppress the infringement of trademar ks and illegal commercial practices. 
                                                      
35 Trademark Law of 1960. WT/ACC/AFG/4 
Page 46  
 
  (e) Patents  
Afghanistan does not, at present, provide patent protection. A new law on patent and 
industrial designs has been drafte d and is awaiting approval by the National Assembly.  The new draft 
law will provide protection for: 
− Any invention shall be patented which is new, involves an inventive step and is industrially 
applicable; and 
− Any product for use in any of the methods re quired to achieve novelty, inventive step and 
industrial applicability may be consid ered as a patentable invention. 
(f) Plant variety protection 
No protection is currently provided.  Legislati on on plant variety protection is expected to be 
drafted in the future. 
(g) Layout designs of integrated circuits  
At present, there is no legal protection for the la yout designs of integrated circuits.  It is 
anticipated that legislation will be drafted in the future. 
(h) Requirements on undisclosed information,  including trade secrets and test data 
No protection is currently provided.  It is antic ipated that legislation will be drafted in the 
future. 
(i) Other categories of intellectual property 
There are at present no specific laws regardi ng any other category of intellectual property 
rights.  However, progress is being made through the preparation of relevant legislation to enable 
Afghanistan to meet all its obligations under the relevant conventio ns and under the TRIPS 
Agreement in due course and to take into account of  flexibilities accorded to LDCs where appropriate. 
3. Measures to control abuse of intellectual property rights  
The abuses which have occurred in relation to intellectual property rights are generally dealt 
with through the Commercial Court and/or administra tive mechanisms.  A related complaint first gets 
recorded at the Commercial Court, and then fo llows the legal and administrative channels.  
4. Enforcement  
(a) Civil judicial procedures and remedies  
There are formal procedures which provide for enforcement of civil judgments.  Under the 
commercial procedural code of Afghanistan and under the existing trademark regulations, if an 
infringement takes place, the dispute can be take n to the Commercial Court for adjudication.  A 
complainant has the option to either  pursue an administrative resolutio n or to take the matter to the 
Commercial Court.   
The process begins with the plaintiff filing a petitio n and the court begins the judicial process.  
Three judges are assigned to the case.  Both parties present their case to the court (each party has the 
right to hire an attorney, if any of the parties does not have funds to hire attorney, per their request the 
State assigns a Public Defender to the case).  W itnesses may be called and evidence is produced and  WT/ACC/AFG/4 
 Page 47 
 
 
  submitted to the court.  The court issues a judgment based on evidence.  If either of the parties is not 
satisfied with the court decision, they may appeal to the Appeals Court.   
(b) Provisional measures 
Provisional measures are not applied. 
(c) Administrative procedures and remedies  
In accordance with the commercia l procedural code of Afghanistan and under the trademark 
regulation a complainant has the option to either pur sue an administrative resolution on dispute or to 
take the matter to Commercial Court.   
(d) Special border measures 
At present, no special border measures exist or are envisaged.  
(e) Criminal procedures 
Criminal penalties, as well as civil procedures, for breach of trademark are set out in the Law 
on Trademarks (1960).  Individuals who intentiona lly use a trademark belonging to someone else can 
be punished by fine and imprisonment in  addition to payment of the damages. 
5. Laws, decrees, regulations and other legal acts relating to the above 
The Decree of the President of Afghanistan on Printing and Circulation of Bank Notes (New 
Afghani Currency).  
6. Statistical data on applications for and gr ants of intellectual property rights, as well as 
any statistical data on their reinforcement 
Statistical data on applications for and grants of intellectual property rights are not collected.  
It can be assumed that the current applications and grants are low. 
VI. TRADE-RELATED SERVICES REGIME  1. General 
Until relatively recently, the public sector was the primary supplier of services in 
Afghanistan, with the role of the private sector hi ghly limited.  With the government's commitment to 
a strategy of economic growth and developmen t based on an open, private sector-led market 
economy, there has been a substantial increase in trad e in services in a number of areas.  The aim of 
the government's policy is to efficiently meet consumer needs by ensuring effective competition 
among service providers subject to the regulation of services sectors via licensing.  Regulations related to the provision of services are equally appl icable to both domestic and foreign providers of 
services.  
Economic development in Afghanistan is hampered  by the poor state of infrastructure which 
limits all types of activities including services.  Particular concerns expressed in the ANDS with 
respect to the development strategy for services are improvements in transport, communications and banking as well as education, tourism, construction and health services.   WT/ACC/AFG/4 
Page 48  
 
  The growth and development of the services sector is viewed as a priority.  Foreign 
investment in services and foreign companies in gene ral are currently leading the development of the 
service sector, especially in the telecommunication, hotel industry, banking, construction, media, 
courier and postal, environmental services and education.  
Note that the key features of the policies relati ng to trade in services and the relevant aspects 
with respect to market access and national treatment are explained in parts 2 and 3 of this section.  
Foreign commercial presence is regulated by  the Investment Law and the prevailing 
commercial laws.  These laws require all foreign investors to obtain investment licenses from the 
Afghanistan Investment Support Agency and business licenses from the Business Licensing 
Directorate of the Ministry of Commerce and Industr ies.  Both licenses are obligatory for investors 
(domestic and foreign) if they engage in investment as well as in business. 
There is at present relatively low levels of re gulation with respect to services.  However, 
Afghanistan confronts unique challenges as steps ar e being taken to transfor m economic conditions in 
the country.  There is a great need for substantia lly increased investment and significant levels of 
donor support will continue to be required.  Th erefore, current efforts to reform commercial 
legislation must be subject to review and future revisions may be required that are in line with the 
country's economic and social development needs.   
Table 13 - Gross Domestic Product by Industrial Origin 2002/03 to 2007/08 (% of GDP)
36 
Year Indicators 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 
Agriculture 44.6 45.1 40.7 38.2 37.7 36.4 
Cereals and others 35.7 34.9 30.6 30.3 27.5 26.9 
Fruits 3.1 2.9 2.7 2.1 2.0 2.0 
Livestock 5.8 7.2 7.4 5.9 8.1 7.5 
Industry  19.5 18.3 22.8 24.5 25.9 24.2 
Mining and quarrying 0.1 0.1 0.2 0.2 0.3 0.4 
Manufacturing 14.8 12.8 14.9 15.2 16.7 15.3 
Food, beverage, and tobacco 14.1 12.0 14.1 14.3 15.9 14.6 
Textile, wearing apparel and leather  0.1 0.2 0.1 0.2 0.2 0.1 
Wood and wood prod. incl. furniture 0.0 0.0 0.0 0.0 0.0 0.0 
Paper, paper prods, printing, publishing 0.0 0.0 0.0 0.0 0.0 0.0 
Chemicals and chem. petroleum, coal, 
rubber, plastic  0.4 0.3 0.4 0.4 0.4 0.3 
Non-metallic mineral except petroleum 
and coal 0.2 0.2 0.2 0.2 0.3 0.2 
Metal basic 0.0 0.0 0.0 0.0 0.0 0.1 
Electricity, gas, and water 0.1 0.1 0.1 0.1 0.1 0.1 
Construction 4.4 5.2 7.6 8.9 8.7 8.4 
Services 34.7 34.6 34.3 34.1 33.6 36.5 
Wholesale and retail trade, restaurants 
and hotels 9.8 8.9 8.9 8.4 10.0 10.3 
Wholesale and retail trade 9.2 8.3 8.2 7.6 9.1 9.3 
Restaurants and hotels 0.6 0.6 0.7 0.7 0.9 1.0 
Transport, storage and communication 10.3 11.4 8.9 9.3 7.5 8.9 
Transport and storage 9.9 11.0 8.4 8.8 7.0 8.0 
Post and telecommunications 0.4 0.4 0.5 0.5 0.5 0.9 
Finance, insurance, real estate and 
business  0.7 1.0 1.2 1.3 1.6 1.9 
                                                      
36 Central Statistics Office 2008.  WT/ACC/AFG/4 
 Page 49 
 
 
  Year Indicators 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 
Ownership of dwellings 5.4 5.2 5.1 4.4 3.6 3.3 
Community, social and personal service  1.1 1.0 1.0 0.9 0.9 1.0 
Producers of Government Services 5.1 5.1 5.2 6.5 6.6 7.9 
Other services 2.3 2.0 3.9 3.4 3.3 3.3 
Total 98.7 98.0 97.8 96.7 97.2 97.2 
Less: Imputed bank service charge  0.0 0.0 0.0 0.0 0.0 0.0 
Taxes on imports 1.3 2.0 2.2 3.3 2.8 2.8 
GDP at Market Prices 100.0 100.0 100.0 100.0 100.0 100.0 
 
Table 14 - Gross Domestic Product by Industrial Origin 2003/04 to 2007/08  
(% change year on year, constant prices)37 
Year 
1382 1383 1384 1385 1386 Indicators 
2003/04 2004/05 2005/06 2006/07 2007/08 
Agriculture 17.1 -4.9 6.7 0.6 24.6 
 Cereals and others 20.9 - 7.5 9.5 0.05 28.7 
 Fruits 2.1 2.6 0.4 5.0 8.0 
 Livestock 1.3 10.3 - 7.3 2.0 5.0 
 OP         5.9       16.7      - 2.4         48.8         34.4 
Industry  6.1 32.1 23.9 20.1 7.3 
Mining and quarrying - 2.9 92.4 17.7 10.0 37.0 
Manufacturing - 2.9 21.7 19.5 14.5 5.1 
Food, beverage, and tobacco - 3.8 22.1 19.5 14.5 5.0 
Textile, wearing apparel and leather  41.5 - 22.4 77.4 14.5 8.0 
Wood and wood prod. incl. furniture 20.6 142.7 0.1 15.0 16.0 
Paper, paper prod. printing, publishing 4.5 11.6 9.8 9.0 5.0 
Chemicals and chem. petroleum, coal, 
rubber, plastic  - 7.9 22.7 7.8 14.5 4.4 
Non-metallic mineral except petroleum 
and coal 36.3 16.4 11.0 14.5 6.3 
Metal basic 162.6 195.7 11.4 14.5 2.0 
Electricity, gas, and water 43.2 - 5.9 20.0 1.3 6.6 
Construction 36.1 56.2 32.2 30.0 10.0 
Services 13.7 16.2 14.6 16.9 14.2 
Wholesale and retail trade, restaurants 
and hotels - 6.7 5.4 6.7 9.7 5.3 
Wholesale and retail trade - 7.3 4.1 6.0 8.7 5.0 
Restaurants and hotels 1.9 23.4 14.3 20.0 8.0 
Transport, storage and communication 45.4 12.9 10.5 26.6 19.3 
Transport and storage 46.9 12.4 10.4 22.0 12.0 
Post and telecommunications 7.3 30.9 13.1 162.0 120.0 
Finance, insurance, real estate and 
business  60.6 27.6 20.6 22.8 24.8 
Ownership of dwellings 5.4 5.2 5.1 4.4 3.6 
Banking       62.3       27.8       20.8         23.0         25.0 
Insurance        7.8       10.5         0.5         16.0           5.6 
Real estate and business services       -6.8       13 .2         9.7           4.8         10.0 
Community, social and personal service  - 0.7 17.5 10.1 11.4 10.0 
Producers of Government Services - 3.0 17.1 59.9 22.6 22.7 
Other services 2.2 103.3 7.1 1.2 2.3 
                                                      
37 Central Statistics Office 2008. WT/ACC/AFG/4 
Page 50  
 
  Year 
1382 1383 1384 1385 1386 Indicators 
2003/04 2004/05 2005/06 2006/07 2007/08 
Total 13.7 9.3 13.5 11.5 16.0 
Less: Imputed bank service charge        0.0         0.0        0.0           0.0           0.0 
Taxes on imports 58.2 15.4 67.6 1.3 24.6 
GDP at Market Prices 14.3 9.4 14.5 11.2 16.2 
Note: Solar year ending 20 March.  For e.g. 1386 is from 21 March 2007 to 30 March 2008 
2. Policies affecting Trade in Services  
(a) Government departments, agencies, prof essional associations or other bodies with 
authority or a role relevant to the conduct of service activities 
According to the existing commercial laws of Afghanistan, licenses are required for the 
conduct of all business activities including services.  The following ministries and agencies are 
responsible for issuing licenses within their ar ea of responsibility and supervising activities (see 
explanatory note provided on page 92). 
− Commerce and Industries; 
− Finance; 
− Justice; 
− Transport; 
− Culture, Information and Youth; 
− Telecommunication and Information Technology; 
− Education; 
− Higher Education; 
− Mines; 
− Urban Development; 
− Agriculture, Irrigation and Livestock; 
− Public Health; 
− Public Works;  
− The National Environmental Protection Agency; and  
− Da Afghanistan Bank. 
(b) Judicial, arbitral or administrative tribuna ls or procedures providing for the review of, 
or remedies in relation to, administrative  decisions affecting trade in services 
 Such procedures are the same as  those described in Section III. 
(c) Provisions, including those in intern ational agreements, concerning qualification 
requirements and procedures, technical sta ndards and licensing and/or registration 
requirements for the supply of services 
 Annex 7 lists qualification requi rements and procedures.  Note that most professional services 
require a university degree, with the most stringent requirements tend to be in finance, health, legal 
and aviation services.  WT/ACC/AFG/4 
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  (d) Provisions governing the existence and opera tion of monopolies or exclusive service 
suppliers 
 The general policy is to promote open competition in all sectors, including for services.  The 
Afghan government does not grant any entity owners hip of, or exclusive or monopolistic rights to 
provide services except drinking water and electricity distribution. 
(e) Provisions relating to safeguard measures as they apply to trade in services 
 Afghanistan does not have any safeguard measures relating to trade in services. 
(f) Provisions relating to international transfers  and payments for current transactions of 
services 
 The policies and provisions discussed under Secti on II. 2 (c) apply to international transfers 
and payments for current transactions of services. 
(g) Provisions relating to capital transa ctions affecting the supply of services 
 The rules discussed in Section II. 2 (c) apply to capital transactions concerning payments for 
the supply of services.  
(h) Provisions governing the procurement by governmental agencies of services 
 The provisions for government procurement of  services are the same as those governing the 
procurement of goods (Section IV. 3 (l)). 
(i) Provisions concerning any form of aid, gr ant, domestic subsidy, tax incentive or 
promotion scheme affecting trade in services 
 There are no such provisions.  
3. Market Access and National Treatment  
(a) Limitations on the number of service suppliers   There are no limits on the number of service providers, with the exception of water supply. 
(b) Limitations of the total value of service transactions or assets 
 There are no such limitations.   
(c) Limitations on the total number of service operations or on the total quantity of service 
output 
 There are no such limitations.   
(d) Limitations on the total number of na tural persons that may be employed in a 
particular service sector 
 There are no such limitations.  Investors or companies may employ foreign personnel or 
experts.  However, it is expected that priority woul d be given to Afghan nationa ls if equally qualified, 
as stipulated in the regulation of employment of  foreign citizens in Afghan organizations.   WT/ACC/AFG/4 
Page 52  
 
  (e) Restrictions on, or requirements of specifi c types of legal entity through which a service 
may be supplied 
 There are no such requirements. All legal en tities must obtain a licence from the Afghanistan 
Investment Support Agency and register at the Afgha nistan Central Business Registry at the Ministry 
of Commerce and Industry.  
(f) Limitations on the participation of foreign capital 
 There are no such limitations. 
(g) Measures providing for less than the treatm ent accorded to national services or service 
suppliers 
 Land ownership is limited to the citizens of Af ghanistan as established under the Constitution.  
Foreign persons conducting legal activities in Afghanistan may lease land from the state for up to 90 
years (which may be extended).  
4. Most-Favoured-Nation Treatment  
 The same principles apply to all supplie rs of services, regardless of nationality. 
VII. INSTITUTIONAL BASE FOR TRADE AND ECONOMIC RELATIONS WITH 
THIRD COUNTRIES 
Under Article 90 of the Constitution and the firs t provision of Article (3) of the Afghanistan 
Law on Treaties dated 1989, the National Assembly ratifies or abrogates international treaties and 
agreements, as well as membership in internationa l and intergovernmental organizations.  Under the 
Law of Treaties, the government is authorized to contract agreements with foreign countries, and 
accede to international organizations. 
Articles 4 and 12 of the Afghanistan Law on Treaties outline the procedures of Afghanistan's 
conclusion of/accession to bilateral or multilate ral treaties and membership in multilateral 
organizations as the following: 
− Article 4 of Afghanistan Law on Treaties 
(i) The proposal for accession to international tr eaties shall be submitted by the Ministry of 
Foreign Affairs to the Council of Ministers.  
(ii) Ministries, relevant agencies and organi zations can submit their proposals for accession to 
international treaties to the Council of Ministers, if the Ministry of Foreign Affairs and other responsible authorities agree. 
− Article 12 of Afghanistan Law on Treaties 
(i) International treaties must be approved by th e Council of Ministers, ratified by the National 
Assembly and enacted by the president.  WT/ACC/AFG/4 
 Page 53 
 
 
  1. Bilateral or plurilateral agreements relat ing to foreign trade in goods and trade in 
services 
Since the establishment of the Interim Administration of Afghanistan in December 2001, the 
government has signed more than three dozen  Agreements, Protocols and Memoranda of 
Understanding relating to trade, commerce, re gional cooperation, transit and transport, 
telecommunications, civil aviation, the promoti on and protection of investment and customs 
cooperation.  The list of agreements  is presented in Annex 8.  Most agreements are not yet fully 
implemented and/or effective. 
Agreements with the European Union, United States, India, Canada, and Japan provide for 
preferential treatment for Afghanistan's exports, granted under the GSP Scheme. 
- Preferential Trade Agreement between Afghanistan and India   
Effective May 2003, products are eligible fo r preferential access provided they satisfy the 
rules of origin requirement. India reduced tariffs on 38 HS 6-digit tariff lines, with margins of 
preferences of 50 and 100 per cent of the MFN tari ffs applicable.  Afghanistan awarded concessionary 
rates for 8 HS 6-digit tariff lines. 
- Preferential Access to the European Union (EU) through the Everything-But Arms (EBA) 
initiative  
The European Union's Everything-But-Arms (EBA) initiative grants duty and quota-free 
access for all goods (with the exception of arms) originating from Afghanistan. 
- The U.S. Generalized Scheme of Preferences (GSP) Program  
The United States GSP program provides duty free treatment for 5,000 products from 
Afghanistan.  A 35 per cent value addition is requi red.  Afghanistan also qualifies for additional 
products such as milk, yogurt, food preparations with flour, candy (candied nuts, sugar candy, 
chocolate) and many Afghan handicr afts if certified by the government. 
- Other  
 Afghan products enjoy duty and quota free market access under a LDC market access 
initiative with Canada, and GSP with Japan.  Afgha nistan has a bilateral treaty with Germany. 
- Transit Agreements  
 Afghanistan has signed several transit agreem ents.  The key transit agreements are with 
Pakistan, Iran, Uzbekistan, and Tajikistan.  The Af ghanistan-Pakistan transit agreement was signed in 
1965.  Negotiations to extend and update th is agreement are currently underway.  
2. Economic integration, customs union and free-trade area agreements 
Afghanistan has recognized the importance of region al cooperation and is a member of the Economic 
Cooperation Organization (ECO), South Asia A ssociation for Regional Cooperation (SAARC) and 
Central Asia Regional Ec onomic Programs (CAREC). WT/ACC/AFG/4 
Page 54  
 
   
- The Economic Cooperation Organization (ECO)
 
 Afghanistan joined the Economic Cooperation Organization (ECO) in 1992.  Membership has 
encouraged regional cooperation with other me mber countries, including neighbouring countries 
(Iran, Pakistan, Tajikistan, Turkmenistan and Uz bekistan) and other countries of the region 
(Azerbaijan, Kazakhstan, Kyrgyz Republic and Turkey).  Key areas of cooperation under ECO 
include: 
− Trade and environment; 
− Transport and telecommunications;  
− Energy; 
− Minerals and environment;  
− Agriculture; 
− Industry and tourism;  
− Human resources and sustainable development;  
− Economic research and statistics; and 
− International relations.  
 
 The objectives of ECO are: 
− Sustainable economic development of member states;  
 WT/ACC/AFG/4 
 Page 55 
 
 
  − Progressive removal of trade barriers and expanded inter-regional trade;  
− Economic liberalization and privatization;  
− Mobilization and utilization of EC O regions natural resources; and 
− The effective utilization of the agricultural a nd industrial potentials of the ECO region.  
 One of the main objectives in the basic charter of ECO is the "progressive removal of trade 
barriers".  The aim is to establish a free trade area among the ten member states.  The ECO trade 
agreement (ECOTA) was signed in 2003, but is not yet effective.   
 Afghanistan is a party to the following ECO agreements: 
− Treaty of Izmir (the basic charter of Ec onomic Cooperation Organi zation) Islamabad, 
28 November 1996; 
− Economic Cooperation Organization Trade Agreem ent (ECOTA), Islamabad, 17 July 2003; 
− ECO Transit Transport Framework Agr eement (TTFA), Almaty, 9 May 1998; 
− Agreement on Simplification of Visa Procedures for the Businessmen of Member States of 
Economic Cooperation Organizati on, Islamabad, 15 March 1995; 
− Agreement relating to the Establishment of ECO Air Company, Islamabad, 15 March 1995.  
- The South Asian Association for Regional Cooperation (SAARC)  
SAARC was established in 1985 by Bangladesh, Bhut an, India, the Maldives, Nepal, Pakistan 
and Sri Lanka with the goal of promoting economic  growth, social progress and cultural development 
within the region.  
Cooperation among SAARC member states includes a number of initiatives ranging from 
environmental and forestry issues to biotec hnology.  Increasing economic cooperation, regional 
integration and intra-SAARC trade flows are the ce ntral goals of the member states with a long run 
aim of creating a South Asian Economic Union (SAEU).  
 
 In 1993 the member states implemented the SAARC Preferential Trade Agreement (SAPTA).  
In January 2004, SAARC member states formed th e South Asia Free Trade Area (SAFTA) with the 
goal of eliminating trade barriers within SAARC.  SAFTA was implemented in January 2006 with the 
member states agreeing to reduce tariff and non-tariff barriers over the next ten years.  
WT/ACC/AFG/4 
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   SAFTA framework agreement signed in January 2004 became effective from 1 January 2006.  
In April 2007, Afghanistan became member of th e South Asian Association for Regional Cooperation 
(SAARC).  Afghanistan joined the South Asian Fr ee Trade Area (SAFTA) Agreement in August 2008 
and is in the process of ratifying and implementing it.  SAFTA is expected to providing preferential 
market access for Afghan products in member countries through reduced import duties.  More 
specifically: 
Top-down reduction in tariffs 
− For non-LDCs 
- Reduction of existing tariffs to 20 per cent in two years; 
- Reduction to 0 – 5 per cent over the next five years; and - Reduction to 0 – 5 per cent in three years towards LDCs. 
− For LDCs 
- Reduction of existing tariffs to 30 per cent in two years; and 
- Reduction to 0 – 5 per cent over the next eight years. 
Non-tariff barriers 
− No commitment 
Sensitive List 
− 20 per cent of the tariff lines to be permitted for inclusion for non-LDCs; and 
− To be reviewed every four years; No commitment to phase out. 
Rules of Origin 
− At the 4-digit level; 
− 30 per cent for LDCs; and 
− 40 per cent for non-LDCs (Sri Lanka 35 per cent). 
Revenue Compensation 
− From India:  LDCs four years, Afghanistan and Maldives six years; From Pakistan:  LDCs 
four years, Afghanistan and Maldives five years; From Sri Lanka:  LDCs three years, Afghanistan and Maldives four years. 
- Central Asia Regional Econom ic Cooperation (CAREC) Program
 
 The Central Asia Regional Economic Coopera tion (CAREC) program was initiated in 1997 
focusing on transport, energy, trade facilitation and trade policy.  CAREC consists of eight countries: 
Afghanistan, Azerbaijan, China, (focusing on Xi njiang Uygar Autonomous Regions), Kazakhstan, 
Kyrgyz Republic, Mongolia, Tajikistan and Uzbekistan.   WT/ACC/AFG/4 
 Page 57 
 
 
   
 CAREC's goal is to promote economic grow th and raise living standards through regional 
economic cooperation.  CAREC's principal objectives are:  
− Securing access to profitable markets in neighbouring countries for exports from Central 
Asian Republics; 
− Reducing transaction costs and facilitating tr ansit and transport across the region; 
− Improving energy supplies; and  
− Preventing negative regional outcomes such as environment degradation, desertification, 
human and drug trafficking, and the spread of communicable diseases.  
- The Shanghai Cooperation Organization (SCO)  
 Since November 2005, Afghanistan has been serving on the Contact Group of the Shanghai 
Cooperation Organization (SCO).  In accordance w ith the protocol, the Contact Group between SCO 
and Afghanistan is established with the purpo se of elaborating proposals and recommendations on 
realization of cooperation between SCO and Afgh anistan on issues of mutual interest.  Seven 
preferential working groups  in the areas of custom s; technical rules, standards and cooperation in 
quality assessment of processes; electronic business; i nvestment promotion; developing potential for 
borders; energy; and modern information and tel ecommunication technology.  These working groups 
have been set up to coordinate and further the regional cooperation among member countries. 
 
WT/ACC/AFG/4 
Page 58  
 
  3. Labour markets integration agreements 
 Afghanistan does not belong to any labour market integration agreements.   
4. Multilateral economic cooperation, me mbership in the multilateral economic 
organizations, trade-related programmes of other multilateral organizations 
 Since the establishment of the Interim Administ ration in 2001, Afghanistan has rejoined and 
participated in a number of regiona l and international institutions.   
 Afghanistan is a member of the follo wing multilateral econom ic organizations: 
− Agency for International Trade In formation and Cooperation (AITIC); 
− Asian Development Bank (ADB); 
− Centre on Integrated Rural Development for Asia and the Pacific (CIRDAP); 
− Central Asia Regional Econom ic Cooperation (CAREC); 
− Colombo Plan; 
− Common Fund For Commodities (CFC); 
− United Nations Economic and Social Commissi on for Asia and the Pacific (UNESCAP); 
− United Nations Economic a nd Social Council (ECOSOC)
38;  
− Economic Cooperation Organization (ECO); 
− Food and Agriculture Organization (FAO); 
− Group of 77 (G-77);  
− International Atomic Energy Agency (IAEA); 
− International Bank for Reconstr uction and Development (IBRD); 
− International Centre for Integrated  Mountain Development (ICIMOD); 
− International Centre for Settlement of Investment Disputes (ICSID); 
− International Civil Aviation Organization (ICAO); 
− International Centre for Genetic  Engineering and Biotechnology  (ICGEB);  
− International Development Association (IDA); 
− International Finance Corporation (IFC); 
− International Fund for Agricultural Development (IFAD); 
− International Labour Organization (ILO); 
− International Monetary Fund (IMF); 
− International Office of Epizootics (OIE); 
− International Organization for Standardization (ISO); 
− International Road Transport Union (IRU); 
− International Telecommunications Satellite Organization (ITSO); 
− International Telecommunication Union (ITU); 
− International Trade Centre (ITC); 
− Islamic Development Bank (IDB); 
− Islamic Centre for Development of Trade (ICDT); 
− Multilateral Investment Guarantee Agency (MIGA); 
− Organization for the Prohibition of Chemical Weapons (OPCW); 
− South Asia Cooperative Environment Program (SACEP); 
− OIC Standing Committee for Economic and Commercial Cooperation (COMCEC); 
− OIC Standing Committee on Scientific and Technical Cooperation (COMSTECH); 
− United Nations Conference on Trad e and Development (UNCTAD); 
− United Nations Development Program (UNDP); 
                                                      
38 Membership of ECOSOC and some other UN Agencies is on a rotating basis.  WT/ACC/AFG/4 
 Page 59 
 
 
  − United Nations Drug Control Program (UNDCP); 
− United Nations Environment Program (UNEP); 
− United Nations Population Fund (UNFPA); 
− United Nations Office of Project Services (UNOPS); 
− United Nations Industrial Develo pment Organization (UNIDO); 
− United Nations Institute for Training and Research (UNITAR); 
− United Nations Educational, Scientific , and Cultural Organization (UNESCO); 
− Universal Postal Union (UPU); 
− World Customs Organization (WCO); 
− World Federation of Trade Unions (WFTU); 
− World Food Program (WFP); 
− World Health Organization (WHO); 
− World Intellectual Property Organization (WIPO); 
− World Meteorological Organization (WMO); and 
− World Tourism Organization (WToO). 
- Multilateral Trade/Economic Conventions  to which Afghanistan is a Party  
 Afghanistan is a party to the following interna tional conventions related to foreign trade and 
economic cooperation: 
− Convention on the Settlement of Investment Di sputes between States and Nationals of Other 
States (ISCID); 
− Customs Convention on the Temporary Impor tation of Commercial Road Vehicles; 
− Convention on the Prevention of Marine Pollution by Dumping of Wastes and Other Matters 
(London Convention); 
− Convention on the Recognition and Enforc ement of Foreign Arbitral Awards; 
− United Nations Convention against Illicit Tra ffic in Narcotic Drugs and Psychotropic 
Substances; 
− The Convention on International Trade in Endangered Species of Wild Fauna and Flora; 
− Convention on Biological Diversity; 
− Basel Convention on the Control of Trans boundary Movements of Hazardous Wastes and 
Their Disposal; 
− Convention Establishing a Cu stoms Cooperation Council; 
− Convention for the Suppression of Unlawful Ac ts against the Safety of Civil Aviation; 
− Convention for the Suppression of Unlawful Acts  against the Safety of Maritime Navigation; 
− Convention on Transit Trade of Land Locked States; 
− Convention on International Civil Aviation (also known as Chicago Convention); 
− United Nations Framework Convent ion on Climate Change (UNFCCC); 
− Convention on the Prohibition of the Use, Stoc kpiling, Production and Transfer of Anti- 
Personnel Mines and on Their Destruction (APM Convention); 
− Convention on the Valuation of Goods for Customs Purposes; 
− International Convention for Safe  Containers (CSC Convention); 
− Vienna Convention for the Protection of the Ozone Layer; 
− Convention on the Marking of Plastic Explosives for the Purpose of Detection; 
− Convention on Psychotropic Substances; 
− Convention on the Prohibition of the Develo pment, Production, St ockpiling and Use of 
Chemical Weapons and on Their Destruction; 
− Convention on the International Transport of  Goods under Cover of TIR Carnets (TIR 
Convention); WT/ACC/AFG/4 
Page 60  
 
  − Convention Establishing the World Intellectua l Property Organization (WIPO Convention); 
− Convention on the Prohibition of the Develo pment, Production, St ockpiling and Use of 
Chemical Weapons and on Their Destruction; 
− WHO Framework Convention on Tobacco Control; 
− International Convention on Econom ic, Social and Cultural Rights; 
− United Nations Convention to Combat Desertification (UNCCD); 
− International convention for suppression of acts of nuclear; 
− United Nations Convention against Corruption; 
− International Convention on the prevention and punishment of crimes against internationally 
protected persons including diplomatic agents; 
− United Nations Convention agai nst Organized Crimes; and 
− International Convention against the taking hostages.
 
  WT/ACC/AFG/4 
 Page 61 
 
 
  ANNEX 1 
STATISTICS AND PUBLICATIONS  
1. Foreign trade statistics for good and services:  responsible agencies 
 The Central Statistics Office is responsible for collecting and analyzing statistics on trade in 
goods and services. 
2. Publications related to statistics 
 Afghanistan Statistical Yearbook, Afghanistan  Trade Statistical Year Book, Afghanistan 
Quarterly Statistical Book and the National Cons umer Price Index are the main statistical 
publications on foreign trade in goods and ser vices. The Central Statistics Office also 
publishes relevant information in official announcements. 
3. Statistical Data 
(a) Main economic indicators 
Table 1 - Population, Area and Gross Domestic Product (GDP)  
Year Description 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 
Population 
(Million) 20.4 21.8 22.2 23.2 23.6 24.1 24.5 
Area (square km) 652,864 652,864 652,864 652,864 652,864 652,864 652,864 
Density 
(inhabitants per sq km) 31 33 34 35 36 37 38 
GDP nominal 
(US$ billions) 2.6 4.4 4.8 5.8 6.9 8.2 10.2 
GDP nominal per 
capita (US$) 106 187 206 231 290 340 415 
Source:  Afghanistan Statistical Yearbook 2007/2008, Issue 29, September 2008, p. 148.  
Table 2 - Gross Domestic Product by Expenditure Categories (‘000 US$)  
Year Description 2005/06 2006/07 2007/08 
Total final consumption expenditure  7,866,883 8,867,490 11,056,677 
Gross Domestic Investment 2,142,895 2,687,209 3,110,097 
Resource Balance -3,156,721 -3,368,474 -3,997,245 
GDP at (market price) 6,853,057 8,186,205 10,169,549 
Domestic absorption  10,009,757 11,554,699 14,166,774 
Source:   Afghanistan Statistical Yearbook 2007/2008, Issue 29, September 2008, p. 148. 
Table 3 - Gross Domestic Product by Economic Activity (‘000 US$)  
Year Sectors 2005/06 2006/07 2007/08 
Agriculture  2,106,964 2,101,988 2,623,934 
Industry 1,345,101 1,602,851 1,722,446 
Services 2,089,858 2,423,173 2,770,977 
GDP at constant prices (2002/03)  5,701,073 6,287,932 7,316,935 
Source:   Afghanistan Statistical Yearbook 2007/2008, Issue 29, September 2008, p. 147. WT/ACC/AFG/4 
Page 62  
 
  Table 4 - Gross Domestic Product Growth Rates
 
Year Description 2002 2003 2004 2005 2006 2007 
Real GDP Growth Rate 29 14.3 9.4 14.5 11.2 16.2 
Source:  Afghanistan Statistical Yearbook 2007/2008, Issue 29, September 2008, p. 148 and Statistical 
Yearbook 2006, p.149. 
Table 5 - Average Exchange Rates (AF/US$)1 
Year Month 2004/Rates 2005/Rates 2006/Rates 2007/Rates 
January 48.71 50.09 49.85 49.53 
February 49.36 49.98 49.95 49.40 
March 48.91 49.77 49.95 49.39 
April 49.79 48.84 49081 50.09 
May 50.17 49.61 49.74 50.06 
June 48.73 49.77 49.53 49.91 
July 47.37 49.70 49.61 49.71 
August 45.89 49.16 50.02 49.77 
September 44.35 48.99 49.85 49.79 
October 45.16 48.67 50.01 49.77 
November 45.41 48.64 49.74 49.87 
December 47.06 49.67 49.76 49.67 
 
(b) Foreign trade, export and import statistics 
Table 6 - Value of merchandise export and import2 (Million US$)  
 
Table 7 - Value of Main Import Commodities3 (Million US$)  
Commodity 2004/05 
(US$ 
Million) % of 
total 
imports 2005/06 % of 
total 
imports 2006/07 % of 
total 
imports 2007/08 % of 
total 
imports 
Vehicles, 
aircraft, 
vessels transport 
equipment 417 19.2 570 23.1 505 18.4 580 19.2 
Base metals 
and articles of base metal 140 6.4 271 11.0 346 12.6 419 13.9 
                                                      
1 Source:  Central Statistics Office, Afghanista n Statistics Year Book 2002-2007 and National 
Consumer Price Index 2008. 
2 Source:  Central Statistic Office, Afghanistan Statistics Year Book 2002-2007. 
3 Source:  Afghanistan Trade Statis tical Year Book 2007, page 3. Year Description 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 
Exports 100 144 305 384 416 454 
Imports 2,452 2,101 2,177 2,471 2,744 3,022 
Value of trade balance -2,332 -1, 957 -1,872 -2,087 -2,328 -2,568  WT/ACC/AFG/4 
 Page 63 
 
 
  Commodity 2004/05 
(US$ 
Million) % of 
total 
imports 2005/06 % of 
total 
imports 2006/07 % of 
total 
imports 2007/08 % of 
total 
imports 
Miscellaneous 
manufactured 
articles 41 1.9 277 11.2 251 9.1 351 11.6 
Machinery and 
mechanical 
appliances 428 19.7 330 13.4 489 17.8 308 10.2 
Prepared 
foodstuffs 101 4.6 318 12.9 211 7.7 299 9.9 
Textiles and 
textile articles 244 11.2 88 3.6 156 5.7 233 7.7 
Minerals 
products 205 9.4 179 7.2 221 8.1 203 6.7 
Products of 
chemical or 
allied 
industries 110 5.1 84 3.4 123 4.5 199 6.6 
Vegetable 
products 124 5.7 133 5.4 154 5.6 122 4.0 
Animal and 
vegetable fats 
and oils 125 5.7 101 4.1 90 3.3 85 2.8 
Others 242 11.1 120 4.9 198 7.2 223 7.4 
Total 2,177 100 2571 100 2,744 100 3,022 100 
 
Table 8 - Value of Main Export Commodities (Million US$)4 
2006/07 2007/08 
Commodities Export   
(US$ Million) % of total 
Exports Export   
(US$ Million) % of total 
Exports 
Carpets 186.53 44.8 211.76 46.6 
Dry fruits 126.12 30.3 117.48 25.9 
Fresh fruits 39.03 9.4 41.38 9.1 
Others  18.46 4.4 27.86 6.1 
Medical herbs 10.33 2.5 20.22 4.5 
Oil seeds 8.08 1.9 11.45 2.5 
Skin and far excl. Karakul  14.1 3.4 9.24 2 
Karakul Skins 9.34 2.2 8.46 1.9 
Wool and animals hair  4.47 1.1 6.2 1.4 
Total 416.46 100 454.05 100 
 
(c) Government procurement statistics 
 The Islamic Republic of Afghanistan does not maintain any government procurement 
statistics. 
                                                      
4 Source:  Afghanistan Trade Statis tical Year Book 2007, Page, 98. WT/ACC/AFG/4 
Page 64  
 
  ANNEX 2 
LIST OF LAWS AND LEGAL ACTS
 
Table 1 - Laws  
No. Title Effective Date 
1 Banking Law of Afghanistan 19 February 2004 
2 Business Partnership Law  30 January 2007 
3 Civil Aviation Law  22 July 2003 
4 Civil Code  1976 
5 Civil Procedure Code  19761998 
6 Civil Service Law  11 September 2005 
7 Commercial Arbitration Law  30 January 2007 
8 Commercial Code of Afghanistan  1955 
9 Commercial Mediation Law  30 January 2007 
10 Commercial Procedure Code 1964/1976 
11 Counter Narcotics Law  4 February 2006 
12 Criminal Code  1976 
13 Criminal Procedure Code  19761965 
14 Customs Law 4 April 2005 
15 Da Afghanistan Bank Law 19 February 2004 
16 Election Law  30 May 2004 
17 Election Law for Municipa lity  21 December 2003 
18 Electoral Law  30 April 2005 
19 Environment Law 25 January 2007 
20 Forensic Medicine Law  24 February 2007 
21 Hydrocarbons Law (Gas and Petroleum) 11 March 2006 
22 Income Tax Law 26 November 2005 
23 Insurance Law 17 November 2005  
24 Interim Criminal Procedure Code 25 February 2004 
25 Labour Law  4 February 2007 
26 Law on Business Corporation and Limited Liability Companies   30 January 2007 
27 Law on Management of Financial Affairs and Public Expenditures 27 June 2005 
28 Law on Non-Governmental Organizations (NGOs) 6 July 2005 
29 Law on Organization and Jurisdiction of Courts of the Islamic 
Republic of Afghanistan 21 May 2005 
30 Law on Organization of the Telecommunication 
Services 23 February 2006 
31 Law on Prisons and Detention Centres  31 May 2005 
32 Law on Road Transportation 1977 
33 Law on the Campaign Against Bribery and Administrative 
Corruption 11 October 2004 
34 Law on the Campaign Against Money 
Laundering and Its Proceeds 31 October 2004 
35 Law on the Campaign Against Financing Terrorism  21 October 2004 
36 Law on the Preservation of Afghanistan's Historical and Cultural 
Heritages 20 May 2004 
37 Mass Media Law  3 April 2004  
38 Medicine Law  24 February 2007 
39 Minerals Law of Afghanistan 11 August 2005 
40 Private Investment Law 21 December 2005 
41 Procurement Law 25 October 2005  
42 Public Health Law  24 February 2007 
43 Secured transaction law  2008  WT/ACC/AFG/4 
 Page 65 
 
 
  No. Title Effective Date 
44 Social Organizations Law  12 January 2003 
45 Statistics Law 26 January 2006 
46 The Advocate Law 17 December 2007 
47 The Bankruptcy Law 1942 
48 The Constitution of Islamic Republic of Afghanistan  28 January 2004 
49 Trade Marks Law 1960 
 
Table 2 - Legislative Decrees  
No. Title Effective Date 
1 Decree Repealing Decrees and Legislative Documents before the 
1st of Jadi 1380 (2001/12/22) 16 March 2002 
2 Decree on the Prevention of Distribution of Government Virgin 
Lands 24 April 2002 
3 Decree Establishing the Special  Court for Resolving Disputes 
Concerning Real Property 22 September 2002 
4 Decree on Printing and Circulation of Bank Notes (New Afghani 
Currency) 6 October 2002 
5 Decree on Management and Implementation of an Administrative 
Reform Program Within the Mini stries and Civil Agencies and 
Institutions 10 June 2003 
6 Decree on Primary Reforms w ithin the Ministries and Civil 
Agencies 11 January 2004 
7 Decree on Convening a Loya Jirga for Approval of the Constitution 15 July 2003 
8 Decree Establishing a Special Court for Resolving Disputes 
Concerning Real Property 30 November 2003 
9 Decree on Revision of Decisions an d Judicial Rulings of the Special 
Court for Resolving Disputes Concerning Real Property 22 February 2004 
10 Decree on Formation of an  Interim Supreme Court and 
Appointment of Its Members 4 January 2005 
11 Decree on Formation of an In terim Secretariat of the National 
Council 4 March 2005 
12 Decree on the enforcem ent of the Law on Road Transportation 14 May 2004 
13 Decree on standards and metrology  6 May 2004 
14 Presidential Decree and Approvals of the Council of Ministers on 
Census  21 January 2007 
 
Table 3 - Amendment, Addition, a nd Repeal of Certain Law Articles  
No. Title Effective Date 
1 Decree on Addition of Paragrap h 4 the Article 11 of the City 
Services Taxation law 30 April 2002 
2 Decree Amending Article 44 of th e Law on Travel and Residence of 
Foreign Citizens 21 May 2004 
3 Decree Amending and Repealing Ce rtain Articles of the Property 
Dealers Law 28 September 2004 
4 Decree Amending and Repealing Certain Articles of the Income 
Tax Law 18 March 2005 
5 Decree Amending Certain Articles of the Land Expropriation Law 3 April 2005 
6 Decree on Addition and Amendments in Certain Articles of the 
Government Enterprises Law 3 April 2005 
7 Decree on Amendment of Article 6, Repeal of Part 2 of Paragraph 1 
of Article 11, Amendment of Article 15, and Addition to Paragraph 
2 of Article 35 of the Insurance Law 3 April 2005 WT/ACC/AFG/4 
Page 66  
 
  No. Title Effective Date 
8 Decree on the on the Regulation of Public Finance and Expenditure 
Management  27 July 2006 
9 Decree of the President on Su spension of article (2) of the 
regulation on the Educational Institutions Hostels; Charter of Ariana 
Afghan Airlines 27 August 2006 
 
Table 4 - Regulations  
No. Title Effective Date 
1 Regulation on Fees of Mass Communication Equipment Services 
and Artistic Activities in Afghanistan 9 November 2003 
2 Regulation on Fees of Scientific, Research, and Publication 
Activities of Scientific Research Institutions 9 November 2003 
3 Regulation on the Use of Radio Frequency and Wireless 
Telecommunication Equipment in Afghanistan 1 December 2004 
4 Regulations on the authorization for import/export  operation  2004 
5 Prohibited Goods for Import (Customs Tariff)  2005 
6 Regulations on the control and use of Plant Pesticides in 
Afghanistan  
7 Regulations on the Quarantine of plants in Afghanistan   
8 Regulation on livestock Management in the Islamic Republic of 
Afghanistan   
9 Regulation on Foreign Currency exposure   
10 Regulation for Establishing Commercial Banks in  Afghanistan 
(Licensing) 7 March 2006 
11 Regulation on establishing of Transportation Shipping  1979 
12 Regulation on the establishment and management of Tourism 
Service Operators  7 March 2006 
13 Foreign Exchange Dealers  7 March 2007 
14 Money Service Providers  2006 
15 Reserve Requirement for Monetary Purposes  2006 
16 Protection of the Payment System  2006 
17 Standing Facilities  2006 
18 Capital Notes Issuance and Auction  23 March 2006 
19 Defining Operating rules for the Clearing and Settlement of 
Interbank Payments  5 January 200 
20 Regulation on Market Risk Management  7 June 2008 
21 Corporate Governance  7 March 2006 
22 Control Regulation  7 March 2006 
23 Prohibited and Authorized Activities  7 March 2006 
24 Capital Adequacy  7 March 2006 
25 Liquidity  7 March 2006 
26 Open Foreign Exchange Position  7 March 2006 
27 Regulation on Private Educational Institution  6 March 2007 
28 Classification and Loss Reserve Regulation   7 March 2006 
29 Related Person  7 March 2006 
30 Enforcement  7 March 2006 
31 DMFI Regulation  1 July 2006 
32 Responsibilities of Financial Institutions Under the Laws on 
Combating of Financing of Terrorism and Anti-Money Laundering 
and Proceeds of Crime  2006 
33 Regulation on Dispatching Labourers Abroad  21 November 2006 
34 Regulation on Vehicle Registration  21 August 2007 
35 Regulation on Pharmacies  24 February 2007 
36 Regulation on manufacturing and importing and medical appliances  24 February 2007  WT/ACC/AFG/4 
 Page 67 
 
 
  No. Title Effective Date 
37 Regulation on private medical laboratories  24 February 2007 
38 Regulation on private X-Ray Clinics  24 February 2007 
39 Regulation on the Public Finance and Expenditure and Management 27 July 2006 
40 Regulation on Determination of Customs Value  20 March 2006 
41 Regulation for the Customs Arbitration  20 March 2006 
42 Regulation on the Recruitment of Foreign Citizens in Afghanistan's 
Administration  21 July 2005 
43 Regulation on Convening Historical and Cultural Antiquities 
Exhibitions 15 January 2006 
44 Regulation on Culture, Artistic, Remuneration of Mass Media 
Services, Artistic Activities, Remuneration of Scientific Researching and Publication Activities in the Scientific Researching 
Institutions in Afghanistan 23 December 2003 
45 Regulation on Credit Risk Management 7 June 2008 
46 Supervision of Country, Sovereign and Transfer  7 June 2008 
47 Regulation on Operational Risk Management  7 June 2008 
48 Regulation on Foreigners Employment in Afghanistan 6 July 2005(issue #858) 
 
Table 5 - Amendment, Addition, and Rep eal of Certain Articles of Regulations  
No. Title Effective Date 
1 Decree Amending Articles 7,22, and 30 of the Commercial 
Arbitration Regulation 25 April 2002 
2 Decree Amending Article 31 of the Purchasing Regulation 18 November 2002 
3 Decree Amending Certain Articles  and Parts of the Regulation on 
the Import and Exhibition of Motion Pictures and the Monitoring of 
Cinemas 5 March 2005 
 
Table 6 - Charters  
No. Title Effective Date 
1 Model Charter for Government Enterprises 27 March 2005 
2 Afghan Telecom Charter 15 August 2005 
3 Charter the Institute of Legislative Drafting and Academic  Legal 
Research  1 July 2007 
4 Charter of the Afghan Urban Water Supply and Sewerage 
corporation  1 July 2007 
5 Charter of Afghanistan Breshna Corporation  2 May 2008 
6 Amendment No 13 to the Regulation on the commercial  banks 
Reserves  10 December 2005 
7 Amendment to the Regulation on limitations on macro loans  2 February 2008 
8 Amendment to the Regulation on authorized activities and 
prohibited activities of bank  2 February 2008 
 
- Publications or information sources concerning mo des of general application, if relevant to 
the GATS  
 There are no such publications or sources. 
- Enquiry points, if any, as prescribed in Article III of GATS  
 There are no informational sources in Afghanist an as stipulated in GATS. However, general 
information related to the existing market for services is available at the Central Statistics 
Office, Ministry of Communication and In formation Technology, Central Bank (Da 
Afghanistan Bank), Ministry of Finance, Afghanistan Investment Support Agency and 
Ministry of Commerce and Industries. WT/ACC/AFG/4 
Page 68  
 
  ANNEX 3 
INFORMATION ON BUSINESS LICENSING PROCEDURES FOR EXPORT AND IMPORT 
OPERATIONS  
A. DOMESTIC CORPORATION LICENCE FOR TRADERS  
1. Outline of the system  
 Businesses wishing to engage in internationa l trade are required to register as import/export 
companies.  (See details in section IV.1(a ) on Policy Affecting Trade in Goods.)  
2. Purposes and coverage of licensing 
 Ministerial decree issued by the Minister of  Commerce and Industries in 2004 is the principle 
instrument under which import and export licensing is administered by the Ministry of 
Commerce and Industries.  
 Applications for licenses which meet the criteria are not refused. 
3. Eligibility of Imports and Exports to Apply for Licence  
 All business applicants must complete the application form provided by the Ministry of 
Commerce and Industry's Department of Business Licensing.  
4. Additional Licence requirements For Foreigners  
 All foreign business applicants must pr ovide the following additional information: 
- Passport and a valid business visa; and 
- Notarized and/or certified financial statem ent by the business applicant's bank and/or 
accredited account. 
5. Documentation and Other Requirements for Application for Licence 
Documentation required: 
- Application letter from the investor; 
- National ID card of the investor; - Measurement form (forma e sanjesh) from the Business Licensing Directorate of the 
Ministry of Commerce and Industries; 
- Corporate Statutes (Articles of Associati on) on the form from the Business Licensing 
Directorate for the Ministry of Commerce and Industries; 
- Corporate Identity form from the Business Licensing Directorate of the Ministry of 
Commerce and Industries; and 
- Letter to the Afghanistan Central Busi ness Registry (ACBR) from the Business 
Licensing Directorate of the Ministry of Commerce and Industries to proceed with the 
registration. 
 The same process is followed by domestic and foreign investors. The time to complete the 
process ranges from one to seven days.  Five signa tures are required, the final signature being 
that of the Director of the Business Licensing Directorate.   WT/ACC/AFG/4 
 Page 69 
 
 
  6. Cost (Fee)  
 The cost of licence itself is US$10.  Other fees and amounts payable are: 
- Licence privilege right fee US$20; 
- Registration fee US$10; - Stamp fee US$5; 
- Photocopy fee US$4; and 
- Costs of forms US$4. 
 Total cost including the cost of licence becomes US$54.    This licence must be renewed each year.  Renewal requirements are as follows:  
- Application letter; 
- Measurement form (forma e sajesh); and 
- Corporation Identity Form. 
 The renewal process is similar to the initial process of obtaining the licence. For renewal 
however, confirmation from Mostufiat Department s that the company has paid its taxes is 
necessary.  There is no need for a criminal background check from Criminal Department of 
the Ministry of Interior Affairs and Commercia l Court offices and there is no need to present 
the company's Articles of Association. Renewal takes one to two days to complete and costs 
US$25. 
7. Step by Step Process of Acquiring the Licence 
- The businessmen present an application le tter to the Director of the Business 
Licensing Directorate of the Ministry of Commerce and Industries. 
- The Director reviews the application to en sure that it is within the mandate of the 
directorate, stamps and signs it on the back and gives it to the investor to take to the General Department of Corporations.   
- The manager of the General Corporations  Department reviews the application to 
determine the correct routing; signs and gives it to the investor to take to the 
applicable department. The assessment stage is segmented (new or renewal). 
- This office gives the applicant a Measu rement Form, a form for the company's 
Articles of Association, and the company's Identity Form. 
- In accordance to the Measurement Form , a fee determined by the Revenue and 
Collecting Office of the Ministry of Commerce and Industries is paid at Branch No.12 of the Da Afghanistan Bank within the Ministry of Commerce and Industries. 
The payment receipt is confirmed by Cont rol and Collection Department of MoF and 
then brought to the office.  
- The bank branch signs and stamps the back  of the Measurement Form in addition to 
providing the receipt. 
- The Business Licensing Directorate a ttaches the company's Identity Form and 
Articles of Association to an official letter and the investor takes these documents to 
the Afghanistan Central Business Registry (ACBR) at MoCI. 
- The company Identity Form (which cont ains the identity of the owner) must be 
signed by the Criminal Offices of Ministry of Interior Affairs as well (after a criminal background check it is signed and stamped and is returned back).  
- The ACBR keeps the original copy of th e Articles of Association and registers the 
company.  WT/ACC/AFG/4 
Page 70  
 
  - The trader/investor takes this business registration form and the Articles of 
Association to ACBR where the representa tive of Ministry of Justice  publishes 
business key information in the official gazette  
- The investor also takes these to the Ta x identification Number (TIN) office seconded 
to the ACBR of the Ministry of Finance for determination of a Tax Identification 
Number (TIN) for the company.  This number is written on the Identification Form 
and a copy of Articles of Association.  
- The investor brings a copy of the Tax Identification Number (TIN) and a copy of the 
Identification Form to the Business Licen sing Directorate where they are filed and 
kept.  
- The relevant office of the Business Li censing Directorate at the Ministry of 
Commerce and Industries based on these docum ents and the computation of the fees 
and amounts that have been calculated starts to draft the licence. 
- The draft licence, along with the related file , is taken by the Trader to the General 
Corporation Department of the Ministry of Commerce and Industries to write the 
original licence after being registered in the relevant section. The licence or Sukook 
number is registered and the draft form is ta ken by the trader to the relevant section of 
the Business Licensing Directorate in order for it to be filled out. 
- The relevant section fills out the draft form  with the investor's name, father's name, 
grand father's name, address, telephone number, e-mail address, and other information related to the investor, incl uding the Tax identification Number (TIN) 
number. 
- The trader takes the form b ack to the General Corporati ons Department for signature. 
- The file will be given to the secretary for registration, lamination, press, stone seal 
and signature of the Director of the Business Licensing Directorate. 
- Then the licence is ready to  be given to the trader.  
 Note:  The Measurement Form, (forma e sanjesh) is a printed form given to the Businessmen by the 
Business Licensing Direct orate.  It contains: 
- Company/trader's name; 
- Date; 
- Licence No.; - Mostufiat sukook (small payment); 
- Cost of the licence; 
- The privilege right (royalty) of the licence; - stamp fee; 
- photocopy fee; 
- Registration fee; - Fee for right to increase the initial capital; 
- Fee of photocopy of trade agent; and 
- Cost of licence in  previous years. 
  At the bottom it has the total amount payable and the applicant's signature. 
B. M EDICINE IMPORTS LICENCE  
1. Documentation required 
- Application letter from the trader; 
- Trader's Business licence from the Ministry of Commerce and Industries; 
- Pro forma statement of drugs to be imported from the foreign selling company.   WT/ACC/AFG/4 
 Page 71 
 
 
   The process differs for Afghans and for foreigners  but a procedure has not been established in 
this regard. 
Note:  A pro forma is an early permission for importing goods.  This is prepared and maintained and 
kept in the Procurement and Planning Departme nt of Pharmacy Affaires Directorate when 
they register medicine producing/importing companies.  A pro forma contains information 
such as: 
 - Name of selling company and home country address; 
 - Name of purchaser;  - Specifications of medicines; 
 - Quantity, kind of medications and prices; 
 - Types of payment;  - Types of packing; and 
 - Validity duration of the pro forma. 
 The process takes from two to five months. Seven signatures are required, the final signature 
being that of Director of the Pharmacy Affaires Directorate 
2. Cost (Fee) 
 - Pro forma registration commission 0.075 times the total cost changed to Af according 
the market exchange rate; and 
 - US$100 registration fee of each new item (drug) charged only once. 
 The licence is renewable each year.  The renewal process is lodged with the Ministry of 
Public Health (including its costs). 
3. Step by step process of acquiring the licence 
 - The trader who plans to import the medici nes submits an application letter attached 
with his/her Business licence of the Ministry  of Commerce and Industries to Minister 
of Health stating he/she needs a permit to import specific medicines into the country. 
 - Minister of Public Health reviews the letter; 
 - If the request is within the Ministry's mandate, the Minister issues a letter approving 
the permit, which the importer takes to the Pharmacy Affairs Directorate; 
 - As all pharmaceutical (medicine produci ng) companies are registered with this 
directorate, the Pharmacy Affairs Direct orate checks whether or not the company 
from which the trader plans to import the medicines is a registered company; and 
 - If the company is registered with the Pharmacy Affairs Directorate, the pro forma is 
processed.  The pro forma is then referred to the Experts Board of the Generic Drug Department for review a nd subsequent approval. 
 After the medicines have been imported into  the country and are at the Customs House: 
 - The trader informs the Pharmacy Affairs Di rectorate via letter about the arrival of the 
medicines at customs; 
 - An expert panel or a professional representative of this Directorate already assigned 
to the Customs House tak es samples of medicines; 
 - The representative takes the samples to th e Pharmacy Affairs Directorate Laboratory 
Department for testing; and 
 - When the quality of the medicines is conf irmed, the Directorate issues the trader with 
an import permit for the medicines allowing them to be taken from the Customs 
House. WT/ACC/AFG/4 
Page 72  
 
  - Sale of medicines
 
 When the medicines have been taken from Customs House: 
- The importing company or the trader submits an application letter to Pharmacy 
Affaires Directorate requesting a sales price for the medicines; and 
 - The directorate issues an order and the trader/importer takes it to the Procurement 
Department, from which the necessary documents for price determination are 
attached to a letter and sent to the acc ounting department. Then the prices are 
determined.  
C. A NIMAL MEDICINES IMPORT PERMIT  
1. Documents Required 
 - Application letter from the trader; 
 - Business licence from the Ministry of Commerce and Industries;  - "Conditions statement" from the Genera l Directorate of Animal Husbandry and 
Animal Health; 
 - Veterinary Rulings from the General Dir ectorate of Animal Husbandry and Animal 
Health; and 
 - Letters to the MoF and the Ministry of Commerce and Industries from the General 
Directorate of Animal Husbandry and Animal Health. 
 This process takes from one to two weeks. Five or more signatures are required with the final 
signature that of the Minister of Agriculture, Animal Husbandry and Food Stuffs.  The licence 
must be renewed annually, but only the stamp of the Animal Husbandry and Animal Health 
Directorate is needed for renewal which takes one to two hours.  
2. Step by Step Process of Acquiring the Licence 
 - An application is submitted by the trader to the General Directorate of Animal 
Husbandry and Animals' Health or to the Minister of Agriculture; 
 - The Directorate examines the Business licence issued by the Ministry of Commerce 
and Industries; 
 - The Directorate then gives the investor the "Conditions Statement" for signing;  - The Directorate of Chemical Fertilizers and Agriculture Services (part of the Ministry 
of Agriculture, Animal Husbandry and Food Stuffs) distributes the Conditions Statement with a list of medicines that can be imported. This Conditions' Statement is 
given to all applicants who ask for a permit to import animal medicines; 
 - When the medicines are imported, the importer requests permission from the General 
Directorate of Animal Husbandry and Animal  Health to take the medicines from the 
Customs House; 
 - General Directorate of Animal Husbandry and Animal Health gives the importer an 
order to deliver to the Department of Pr ophylaxis and Treatment to obtain samples of 
the imported medicines in order to check their quality; and 
 - If the tests performed by the Department of Prophylaxis and Treatment confirm that 
the imported medicines are of good quality, then the General Animal Husbandry and 
Animal Health Directorate issues an official letter for the applicant/importer to take to 
the MoF and the Customs Hou se to instruct them to let the importer remove the 
medicine from the Customs House.  WT/ACC/AFG/4 
 Page 73 
 
 
  ANNEX 4 
INFORMATION ON IMPLEMENTATION AND ADMINISTRATION OF THE CUSTOMS 
VALUATION AGREEMENT  
The determination of the customs value of goo ds is outlined in the Customs Tariff Law of 
Afghanistan. 
When goods are transmitted through the custom territory of Afghanistan by the person 
(declaring) who applied for the declaration, the customs value is identified based on principles and 
rules for customs valuation determined by the Ge neral Agreement on Tariffs and Trade (GATT, now 
WTO).  
"The customs value of goods for the purpose of  collecting customs debts, subject to the 
provisions of Article 24(1) of the Customs Law, sha ll be determined using one  of the six methods of 
valuation provided that the value of the good was not published on the list of goods subject to 
provisions of Articles 24(3) for the reasons stipulated in Article 24(2): 
The methods of customs valuation must be applie d in a sequential order except reversal of the 
order of Method 4 and 5, at the importer's request, if so agreed by Customs. 
Method 1 - The Transaction Value of goods 
1. The customs value of imported goods is the price actually paid or payable for the goods when 
sold for export to Afghanistan. 
 The price actually paid or payable is the total payment made or to be made by the buyer to or 
for the benefit of the seller for the imported goods, and includes all payments made as a condition of sale of the imported goods by the buye r to the seller, or by the buyer to a third 
party to satisfy an obligation of the seller. 
2. The transaction value method is used provided. (a) There is evidence of a sale for export to Af ghanistan, i.e. commercial invoices, contracts, 
purchase order, or any other document recognized by Customs; 
(b) There are no restrictions on the use of the goods by the buyer which: 
- other than restrictions imposed or required by law in Afghanistan, e.g. licence, end-
use, etc.; 
- limit the geographical area in which the goods may be resold;  - affect the value of the goods; 
(c) The sale price is not subject to conditi ons for which a value cannot be determined; 
(d) No part of the proceeds of any subsequent re sale, disposal or use of the goods by the buyer 
will accrue directly or indirectly to the seller; 
(e) The buyer and seller are not related. If the bu yer and the seller are related, the use of the 
transaction value method is acceptable provide d that the importer demonstrates that: 
- the relationship did not influence the price paid or payable; or 
- the transaction value closely approximat es a test value previously accepted by 
Customs administration or acceptable by using a subsequent method of valuation. WT/ACC/AFG/4 
Page 74  
 
   Where, in relation to the goods being valued, th e appropriate officer is of the opinion that the 
importer has not demonstrated that the relations hip did not influence the price or that the 
declared price at which the goods are importe d does not approximate to one of the test 
acceptable values mentioned, the officer shall in form the importer of his reservations in 
writing and give the importer an opportunity to justify the price difference. 
 If the importer fails to justify the price diffe rence, the customs value cannot be determined 
under the provisions of transaction valu e and Method 2 should be followed. 
3. If not already included in the price, additional information must be available for use of the 
transaction method: 
- commissions and brokerage paid in th e country of exportation except buying 
commissions; 
- packing and container costs and charges; - assists and subsequent proceeds; - royalties and fees; - loading, unloading, and handling charg es associated with the transport of the 
imported goods to the Port, Airport or place of exportation; and 
- the cost of transport, insurance and rela ted charges up to the Customs of destination 
in Afghanistan. 
 If sufficient information is unavailable for any reason, the transaction value cannot be 
determined and the Method 2 should be applied.  
4. The following charges or costs will not be incl uded if they are separate from the price actually 
paid or payable for the goods: 
- charges of construction, assembly, mainte nance or technical assistance undertaken 
after importation; 
- the costs of transport after importation into Afghanistan; - duties and taxes of Afghanistan. 
Method 2 - Transaction value of identical goods 
1. If the customs value cannot be determined based on the actual transaction value (Method 1), 
the customs value is based on the transaction valu e of goods of identical quality and quantity.  
2. Where there is no customs valuation of iden tical goods, the transaction value of goods of 
different quality or quantity is used and adjust ed to account for the differences attributable. 
Adjustments can only be made on the basis of demonstrated evid ence which outlines the 
reasoning and accuracy of the adjustment. 
3. Where costs and charges referred to in clau se 3 of Method 1 are included in the transaction 
value, an adjustment will take account of differences in cost due to distance and mode of transport. 
4. Where there are two or more transaction valu es of identical goods, the customs value of the 
imported goods shall be the lowest value, ad justed as necessary in accordance with clauses 2 
and 3. 
Method 3 - Transaction value of similar goods 
1. If the customs value of the imported goods cannot be determined under the provisions of 
Method 2, the transaction value of similar goods  sold for export to Afghanistan about the  WT/ACC/AFG/4 
 Page 75 
 
 
  same time as the goods being valued is used. Clauses 1, 2, 3 and 4 of Method 2 apply in 
respect of similar goods. 
Method 4 - Deductive Value 
1. If the customs value cannot be based on sim ilar goods, it is based on the value of goods in 
Afghanistan identical or similar to the imported goods, less costs resulting from the 
importation and sale of the goods provided:  
- the goods have been resold in Afgha nistan in the same condition as imported; 
- the sale of the identical or similar goods h as occurred at the same  or effectively the 
same time of importation of the goods being valued; 
- if no sales took place at or about the time of importation, it is permitted to use sales 
up to 90 days after importation of the goods being valued; 
- if there are no sales of identical or similar imported goods that meet all the above 
requirements, the importer may choose to u se a valuation based on goods which have 
been further processed; 
- the purchaser in Afghanistan must not ha ve assisted directly or indirectly; and 
- the purchaser must not be related to the importer from whom he buys goods at the 
first commercial level after importation. 
2. The unit price at which the greatest number of units is sold must be established. Commercial 
invoices will serve as the primary basis for establishing the price per unit. 
3. A value is determined by making a deducti on from the established price per unit for the sum 
of the following elements: 
- the commissions generally earned on a unit b asis for sales of goods of the same class 
or kind into Afghanistan for;  
- the profit and general expenses usually refl ected on a unit basis for goods of the same 
class or kind; 
- transport, insurance and associated  costs incurred within Afghanistan; 
- customs duties and taxes of Afghanistan; 
- value added by assembly or further processing, where applicable; and - transport, insurance and other charges from the place of export to the place of import. 
Method 5 - The Computed Value 
1. If the customs value of the imported goods ca nnot be determined under Method 4, it is based 
on computed value which consists of the sum of: 
- the cost of materials, fabrication and any processing in production of the imported 
goods; 
- an amount for profit and expenses as reflected in sales of goods of the same class or 
kind made in the country of exporta tion for export to Afghanistan; and 
- all other expenses as specified in clause 3 of Method 1. 
Method 6 - The Fall Back Method 
1. When Customs value cannot be determined unde r any of the previous methods of valuation, it 
may be calculated by applying in a fl exible manner the previous methods. WT/ACC/AFG/4 
Page 76  
 
  2. In determining Customs value under this residua l method, no arbitrary, fictitious or prohibited 
methods of valuation are to be used. The Cust oms value should be fair, reasonable, uniform 
and neutral, and should reflect commercial reality to the extent possible. 
Customs value of exported goods 
The customs value of an exported good is the mark et value at the prescribed time for export to the 
country to which the goods are consigned.  The following applies: 
- The goods are treated as having been delivered to the buyer on board the conveyance in which 
they are to be exported;  
- The seller bears packing, commission, transpor t, loading and all other costs (including any 
chargeable export duty) incidental to  the sale and delivery of the goods; 
- Where goods are manufactured in accordance with any pate nted invention or where a 
protected design has been applied, the custom s value shall be determined taking into 
consideration the value of the right to use the design; and 
- Where goods are exported for sale, disposal or use under an Afghan trade mark, whether or 
not after further manufacture, the customs value considers the value of the right to use the 
patent, design or trade mark.  WT/ACC/AFG/4 
 Page 77 
 
 
  ANNEX 5 
INFORMATION ON TECHNICAL BARRIERS TO TRADE  
 
Legal acts are neither intended to establish techni cal barriers to trade nor disrupt trade and do 
not have provisions which discriminate against imported goods.  The main goals are to ensure 
citizens' safety, health, property rights and the protection of environment.  
The Customs Law provides the Customs General Directorate with the authority to examine 
imports and to restrict the import of goods whic h do not meet Afghanistan's standards.  The 
Presidential Decree No. 952 of May 2004 established the Afghanistan Standardization and Metrology 
Authority and its regulatory powers.  Information on particular standards can be obtained from the 
Afghanistan Standardization and Metrology Authority. 
 WT/ACC/AFG/4 
Page 78  
 
  ANNEX 6 
INFORMATION ON STATE-TRADING
 
 
Afghanistan does not support enterprises covere d under the provisions of Article XVII of 
GATT 1994.  There is no legislation which grants privileges to any private or State enterprise for 
trade operations. 
Any purchases made by executive bodies, State ente rprises and partly State-owned enterprises 
are regulated by the Law on Procurement (2005).   WT/ACC/AFG/4 
 Page 79 
 
 
  ANNEX 7 
SERVICES SECTORAL CLASSIFICATION LIST  
1. BUSINESS SERVICES 
1.1 Professional Services 1.1.1 Legal Services  
The Ministry of Justice and AISA regulated legal services until the estab lishment in July 2008 
of Afghanistan's first ever bar association, the Independent Afghan Bar Asso ciation (IABA).  This 
followed five years of effort by national and inte rnational stakeholders.  The bar association will act 
as a necessary counterpoint to the government and the c ourts in the delivery of justice and the rule of 
law.  It is anticipated the number of trained lawy ers will continue to rise significantly, having already 
doubled in the past 12 months, and the scope of their work will expand as a direct result of the 
establishment of the IABA. 
IABA regulates and supervises legal services. The by-laws for the association, governing 
ethics, discipline, admission requirements and con tinuing legal education were passed at the General 
Assembly. Afghan lawyers are trained in the law fa culties of universities in Afghanistan.  To provide 
legal services, Afghan lawyers must complete an inte rnship with the IABA and obtain a licence.  To 
serve as a judge, Afghan lawyers must complete an in ternship for 12 months at the Supreme Court. 
Foreign nationals can practice as legal consultant s and represent foreign clients directly in the 
courts if it complies with the Advocate Law. Lega l consultancy services may also be provided by 
foreign nationals under contract.  
1.1.2 Accounting and auditing services 
The Ministry of Finance is responsible for overseeing the accounting services
 and the 
National Audit Office is responsible  for overseeing auditing services.  
Table 1 – Professional Services  
Type of services Licence Issuing Body Requirements 
a) Legal Services Afghan Bar 
Association/AISA Verification of higher ju ridical education is 
required 
b)  Accounting, auditing and book 
keeping services AISA A certificate on special education is required 
c) Taxation Services  Ministry of Finance No 
d) Architectural Services Afghan Investment 
Support Agency Approval from the relevant  government agencies 
e) Engineering services AISA Approval from the relevant government agencies 
f) Integrated engineering services Afghan Investment 
Support Agency Approval from the relevant  government agencies 
g) Urban planning and landscape 
architectural services  Afghan Investment 
Support Agency Approval from the relevant  government agencies 
h) Medical and dental services  Afghan Investment 
Support Agency Approval from the Ministry of Public Health 
i) Veterinary services Afghan Investment 
Support Agency Approval from the Ministry of Agriculture, 
Irrigation and Livestock 
j) Nurses, midwives, 
physiotherapists, personnel on 
psychotherapy Afghan Investment 
Support Agency Approval from the Ministry of Public Health 
 WT/ACC/AFG/4 
Page 80  
 
  Table 2 - Computers and Related Services
 
Type of services Licence Issuing Body Requirements 
a)  Consultation services related to 
the installation of computer 
hardware Afghan Investment 
Support Agency Approval from the Ministry of 
Communication and Information Technology 
b)  Services on software provision Afghan Investment 
Support Agency/ MCIT Approval from the Ministry of 
Communication and Information Technology 
c) Services on information 
processing  Afghan Investment 
Support Agency Approval from the Ministry of 
Communication and Information Technology 
d)  Database services Afghan Investment 
Support Agency Approval from the Ministry of 
Communication and Information Technology 
 
Table 3 - Research and Development Services  
Type of services Licence Issuing Body Requirements  
a) R&D services on natural 
sciences Afghan Investment 
Support Agency Approval from the  Ministry of 
Communication and Information Technology 
b) R&D services on social and 
humanitarian sciences  Afghan Investment 
Support Agency Approval from the relevant government 
agencies 
c) Inter-industry R&D serv ices Afghan Investment 
Support Agency Approval from the relevant government 
agencies 
 
Table 4 - Real Estate Services  
Type of services Licence Issuing Body Requirements 
a) Related to private or leased 
property1 Afghan Investment 
Support Agency/ 
Ministry Approval from the relevant government 
agencies 
b) On a payment or contract basis  Afghan Investment 
Support Agency Approval from the relevant government 
agencies 
 
Table 5 - Rental/Leasing Services without Operators  
Type of services Licence Issuing Body Requirements 
a)  On ships Afghan Investment 
Support Agency Approval from the relevant government 
agencies 
b) On aircraft Afghan Investment 
Support Agency Approval from the relevant government 
agencies 
c)  On other transportation  Afghan Investment 
Support Agency Approval from the relevant government 
agencies 
d) On other machinery and 
equipment Afghan Investment 
Support Agency Approval from the relevant government 
agencies 
 
                                                      
1 This licence is not issued to foreigners and is only available to Afghans.  WT/ACC/AFG/4 
 Page 81 
 
 
  Table 6 - Other Business Services  
Type of services Licence Issuing Body Requirements 
a)  Advertising services Afghan Investment 
Support Agency Approval from the relevant government 
agencies 
b) Market research and public 
opinion polling services Afghan Investment 
Support Agency Approval from the relevant government 
agencies 
c) Management  consulting 
services Afghan Investment 
Support Agency Approval from the relevant government 
agencies 
d) Services related to 
management –consulting Afghan Investment 
Support Agency Approval from the relevant government 
agencies 
e) Technical testing and analysis  
services Afghan Investment 
Support Agency Approval from the relevant government 
agencies 
f) Services to agriculture, hunting 
and forestry  Afghan Investment 
Support Agency Approval from the relevant government 
agencies 
g) Services related to fishing Afghan Investment 
Support Agency Approval from the relevant government 
agencies 
h) Services to mining Afghan Investment 
Support Agency Approval from the Ministry of Mines 
i) Services to manufacturing Afghan Investment 
Support Agency Approval from the relevant government 
agencies 
j) Services to energy distribution Afghan Investment 
Support Agency Approval from the Ministry of Energy and 
Water 
k) Placement and supply services 
of Personnel  Afghan Investment 
Support Agency Approval from the Ministry of Labour and 
Social Affairs 
l) Investigations and security Afghan Investment 
Support Agency Approval from the relevant government 
agencies 
m) Scientific and technical 
consulting services Afghan Investment 
Support Agency Approval from the relevant government 
agencies 
n) Maintenance and repair of 
equipment  Afghan Investment 
Support Agency Approval from the relevant government 
agencies 
o) Building-cleaning services Afghan Investment 
Support Agency Approval from the relevant government 
agencies 
p) Photographic services Afghan Investment 
Support Agency Approval from the relevant government 
agencies 
q) Packaging services Afghan Investment 
Support Agency Approval from the relevant government 
agencies 
r) Printing, publishing Afghan Investment 
Support Agency Approval from the Ministry of Information, 
Culture, Tourism and Youth 
s) Convention services AISA Approval from the relevant government 
agencies 
 
2. COMMUNICATION SERVICES 
2.1 Courier services  
A number of foreign companies, such as DHL, FedEx and TNT provide courier services in 
Afghanistan.  They are established under the ge neral rules and economy-wide regulations and are 
licensed by the Afghanistan Investment Support Agency and the Afghan Post Authority under the 
Ministry of Communication and Information Technology.  
2.3 Telecommunication services  
The Ministry of Telecommunication is responsib le for regulation of the telecommunications 
sector.  The regulatory framework for telecommuni cations has been introduced and establishes the WT/ACC/AFG/4 
Page 82  
 
  institutional structure, regulatory principles and creat es the legal basis for opening up of the market in 
mobile services.  
The Ministry of Communication and In formation Technology established the 
Telecommunications Regulatory Board (TRB) to regulate and supervise mobile companies' activities. The Telecommunications Law has been approved and implemented.  
Table 7 – Communication Services
 
Type of services Licence Issuing Body Requirements 
1. Postal services AISA Ap proval from the Ministry of 
Communication and Information 
Technology 
2. Courier services AISA Ap proval from the Ministry of 
Communication and Information Technology 
3. Telecommunications services 
 a)  Voice telephone services AISA 
 b)    Mobile and Internet 
services AISA Approval from the Ministry of 
Communication and Information 
Technology 
4.  Audiovisual services 
 a)   Motion picture and video 
tape production and distribution services AISA Approval from relevant government 
agencies 
 b) Motion picture production 
services AISA Approval from relevant government 
agencies 
 c)    Radio and television2 AISA Approval from Ministry of Information, 
Culture, Tourism and Youth 
 d)    Radio and television 
transmission services AISA Approval from Ministry of Information, 
Culture, Tourism and Youth 
 e)    Sound recording AISA Approval from Ministry of Information, 
Culture, Tourism and Youth 
 f)    Others  AISA Approval from Ministry of Information, 
Culture, Tourism and Youth 
 
3. CONSTRUCTION AND RELA TED ENGINEERING SERVICES 
Construction services are regulated by the Afghan Investment Support Agency.  Major 
construction projects often include substantial ex ternal financing from official bilateral and 
multilateral donors.  There is open bidding for tender s on large projects and international construction 
companies often receive contracts to perform the co nstruction work.  Construction work for buildings 
and related to civil engineeri ng may be provided by foreign owned enterprises or companies 
established in Afghanistan as joint ventures.  
Table 8 – Construction Services  
Type of services Licence Issuing Body Requirements 
1. General construction work for 
buildings AISA Approval from the relevant public agency  
2. General construction work for civil 
engineering  AISA Approval from the relevant public agency 
3. Installation and assembly work AISA Approval from the relevant public agency 
4. Building completion and finishing 
work AISA Approval from the relevant public agency 
                                                      
2 According to the Public Media Law, a foreign investor cannot own a radio or TV network.   WT/ACC/AFG/4 
 Page 83 
 
 
  4. DISTRIBUTION SERVICES 
Table 9 – Distribution Services  
Type of services Licence Issuing Body Requirements 
1. Commission agent's services AISA Approval from the relevant public agency 
2. Wholesale trade services AISA  Appr oval from the relevant public agency 
3. Retailing services AISA Approval from the relevant public agency 
4. Franchising AISA Approval from the relevant public agency 
 
5. EDUCATIONAL SERVICES 
 Afghanistan recognizes the importance of edu cation and has been supportive of foreign 
participation in the supply of private education.  
Table 10 – Education Services  
Type of services Licence Issuing Body Requirements 
1.  Primary education services AISA Ministry of Education   
2.  Secondary education services AISA Ministry of Education   
3.  Higher Education services AISA Ministry of Higher education 
 
6. ENVIRONMENTAL SERVICES 
Table 11 – Environmental Services  
Type of services Licence Issuing Body Requirements 
1.  Sewage services AISA Approval from the relevant public agency 
2.  Refuse disposal services AISA Approval from the relevant public agency 
3.  Sanitation and similar services AISA Approval from the relevant public agency 
 
7. FINANCIAL SERVICES 
The financial system of Afghanistan plays a significant part in the transition process to the 
market economy.  During the transition period the system has implemented a number of very 
important functions: 
− The system has strengthened the financial cont rol of State enterprises, which are in the 
process of privatization.  
− The new mechanism of supervision and control of borrowers (as well as State and private) has 
been developed within the financial system. It allows for the control of activities according to 
contracts concluded. 
− The enterprises which have been privatized with in the frame of the finance system and the 
newly formed class of entrepreneurs have  to be provided by financial services. 
− The work is proceeding in the field of devel opment of financial services in the private, 
effective and stable financial sector, which f acilitates the effective collection of savings and 
serving of investments on the whole territory of the Islamic Republic of Afghanistan, leading to economic growth. 
7.1 Insurance and insurance-related services 
Some services, such as insurance of property, authorization and re-insurance are not available 
due to the weak insurance and insurance-related se rvices market. Nevertheless, there is a full legal WT/ACC/AFG/4 
Page 84  
 
  base for the regulation of insurance and insuran ce-related services, including a High Commission for 
Insurance in the Ministry of Fi nance. In accordance with the insurance law and insurance policy 
established by the Ministry of Finance, there are three private insurance companies are operating in 
the country.  
7.2 Banking and other financial services 
The activities of banks and the banking system is  follows the legislation "On Central Bank of 
the Islamic Republic of Afghanistan" of 2003, a nd "Banking Law of the Islamic Republic of 
Afghanistan" of 2004.  
The Da Afghanistan Bank can issue licenses for ot her banks, legal entities, and individuals to 
perform banking services, that is: 
− Savings of legal entities; 
− Savings of individuals; 
− Maintenance of accounts for clients, banks, a nd non-bank financial in stitutions, as well as 
coinage of banks; 
− Treasury transactions, such as acceptance, coun ting, exchange, packing, storing of paper 
money and coinage; 
− Transfers, fulfilment of orders of legal entities and individuals with regard to money transfers; 
− Discount transactions: bill and other debentures discounting of legal entities and individuals; 
− Credit transactions; granting credits; 
− Provision of funds following orders of ow ners or authorized investment funds; 
− Trust transactions; management of funds, securities for the benefit and following an 
instruction of the proxy; 
− Legal transactions such as collection, examin ation, differentiation by  type and approval of 
payments, as well as mutual payments and defi ning positions of clearing participants; 
− Safe transactions, such as storing documents and valuables of clients, lease of safe boxes, 
apartments, etc.; 
− Lombard transactions, granting short-term credits  based on pledge of securities and liquidity 
property; 
− Issuing checks; 
− Collection orders, acceptance, payment and approval of payment documents, opening and 
approving commercial letters of credits; 
− Issue of payment cards; 
− Acceptance and sending paper money, coins and valuables; and 
− Exchange transactions with a foreign currency. 
Asset management (including pension funds, portf olio investment, trust services) is not yet 
developed in Afghanistan due to the lack of deve lopment of a corporate market, technical capacity, 
and organizational structures. There is however a regulatory structure to check investment fund and 
deposit activity. Banks can perform deposit activ ities within the framework of their licence. 
- Investments
 
Receipt of investments from the population can be made by authorized banks within the limits 
of regulation, established by the Central Bank of Afghanistan.  WT/ACC/AFG/4 
 Page 85 
 
 
  - Lending  
Lending is carried out by banks according to the "Banking Law of Afghanistan" and central 
bank regulations.  
- Financial leasing  
There is no legislation covering financial leasing.  Legislation covers leases for real estate, 
office buildings and vehicle/vessels (with or w ithout operators or crews). The Central Bank has 
developed draft laws on mortgages of mov eable and immovable property which are waiting 
parliamentary approval.  
- The market for futures, forwards and options  
 The market for futures, forwards and opti ons are at the initial stage of development. 
- Operations with precious metal  
 Precious metal operations are not prohibited,  but there is not an internal market. 
8. HEALTH RELATED AND SOCIAL SERVICES 
The Ministry of Public Health is committed to  the provision of cost effective, quality services 
through efficient health services. There are two servi ce delivery mechanisms:  the Ministry of Public 
Health strengthening mechanism (MoPH-SM) and contracting out to NGOs. These will be rigorously 
evaluated and other mechanisms explored. The Mi nistry of Public Health will further develop 
medium and long term policies for at  least three different situations: 
− Geographical areas where there are no government health services; 
− Populations living in underserved areas; and 
− Emergency withdrawal or collapse of contracted out services.  
The Ministry is exploring payment exemption strategies for the poor.  The following clinical 
care is provided free of charges to any citizen of  Afghanistan:  immunization, maternal delivery, 
antenatal care, family planning, treatment of TB , and nutrition interventions. In the future when 
antiretroviral drugs for HIV/AIDS are needed these will also be provided free. 
The public system of hospitals includes some  central university hospitals, 34 provincial 
hospitals and other district level hospitals and clinics throughout the country.  Foreign specialists are 
allowed to work in hospitals in Afghanistan pr ovided they are suitably qualified according to the 
Ministry of Public Health.  
Table 12 – Health Services  
Type of services Licence Issuing Body Requirements 
1.  Hospital services  AISA/Ministry of 
Public Health  Determined by Ministry of Public Health 
2.  Other Human Health  Services AISA/Ministry of 
Public Health Determined by Ministry of Public Health 
 WT/ACC/AFG/4 
Page 86  
 
  9. TOURISM AND TRAVEL RELATED SERVICES 
A licence issued by AISA and the Ministry of Information, Culture, Tourism and Youth is 
required for international tourism activities. 
10. RECREATIONAL, CULTURAL AND SPORTING SERVICES 
Table 13 – Entertainment, Culture and Sport Services
 
Type of services Licence Issuing Body Requirements 
1.  Entertainment services (incl. 
Theatre, concerts and circus services) AISA/Ministry of 
Information, Culture, Tourism and Youth Ministry of Information, Tourism, Culture 
and Youth  
2. News agency services AISA/Ministry of 
Information, Culture, 
Tourism and Youth Ministry of Information,  Tourism Culture 
and Youth 
 
3. Libraries, archives, museums 
and other cultural services AISA/Ministry of 
Information, Culture 
Tourism and Youth Ministry of Information,  Tourism Culture 
and Youth  
4. Sports and other entertainment 
services AISA/Olympic 
Department Olympic Department 
 
11. TRANSPORT SERVICES 
Road transportation is essential and the most important sub-sector of transport services.  The 
Law on Road Transportation provides the legal basis for commercial activities in the transport sector.  
There is no railway system in Afghanistan.  
Table 14 – Transport Services  
Type of services Licence Issuing Body Requirements 
1.  Air Transport services 
 a)  Passenger transporta tion AISA/ MoT Ministry of Transport and Civil Aviation 
 b)  Freight transportation AISA/ MoT Ministry of Commerce and Industries 
 c)  Rental of aircraft with cr ew AISA/ MoT with approval of MoT 
 d)  Maintenance and repair of 
aircraft AISA/ MoT MoT 
 e)  Supporting services for air 
transport AISA/ MoT MoT 
 f)  Space Transport AISA/ MoT MoT 
2.  Rail Transport Services 
 a) Passenger transportation N/A N/A 
 b) Freight transportation N/A N/A 
 c) Pushing and towing 
services N/A N/A 
 d) Maintenance and repair of 
rail transport equipment N/A N/A 
 e)   Supporting services for rail  
transport services N/A N/A 
3.  Road Transport Services 
 a)   Passenger transport: 
  - inter city 
  - city AISA/ Ministry of 
Transport and Civil 
Aviation Ministry of Transport and Civil Aviation  WT/ACC/AFG/4 
 Page 87 
 
 
  Type of services Licence Issuing Body Requirements 
 b)  Freight transportation Ministry of 
Commerce and Industries Ministry of Commerce and Industries 
 c)  Rental of commercial 
vehicles with operator MoT MoT 
 d)  Maintenance and repair of 
road transport equipment AISA/ MoPWs AISA/ MoPWs 
 e)  Supporting services for 
road transport services AISA/ MoPWs  
4.  Pipeline Transport 
 a)  Transportation of oil MoCI MoCI 
 b)  Transportation of other 
goods MoCI No 
5.  Services auxiliary to all modes of transport 
 a)  Cargo-handling services MoCI MoCI 
 b)  Storage and warehouse 
services MoCI MoCI 
 c)  Freight transport agency  
services MoCI MoCI 
6.  Other transport Services MoCI/MoT MoCI/MoT 
 WT/ACC/AFG/4 
Page 88  
 
  ANNEX 8 
LIST OF FOREIGN TRADE AGREEMENTS
 
Table 1 - Bilateral Trade and Investment Agreements and Memoranda of Understanding  
No Name of The Agreement Country Date 
1 Agreement between the Kingdom of Afghanistan and 
Islamic Republic of Pakistan for Regulation of Traffic and 
Transit Pakistan  1965 
2 Memorandum of Understanding between the Interim 
Administration of Afghanistan and the Government of the 
Islamic Republic of Iran on Trade Cooperation  Iran  25 February 2002 
(solar) 
3 Preferential  Trade Agreement between the Government of  
the Transitional Islamic State of Afghanistan and  the Government of the Republic of  India  India  6 March 2003 
4 MoU on International Trade Administration of the 
Department of Commerce and the office of US Trade 
Representative of the US between Afghanistan and US USA  6 June 2003 
5 MoU on Least Developed countries Initiative between 
Canada and Afghanistan Canada  5 September 2003 
6 Memorandum of Understanding  between the Afghan 
Chamber of Commerce and British Chamber of Commerce  UK  23 October 2003 
7 Agreement between the Gove rnment of Ukraine and the 
Government of the Transitional Islamic State of 
Afghanistan on Trade and Economic Cooperation Ukraine  4 April 2004 
8 Agreement between the Government of the Transitional 
Islamic State of Afghanistan and the Government of the 
Republic of Kazakhstan on Trade and Economic 
Cooperation  Kazakhstan  15 April 2004 
9 Investment Incentive Agreement between the Government 
of the Transitional Islamic State of Afghanistan and the 
Government of the United States of America USA  17 April 2004 
10 Agreement on Trade and Economic Cooperation between 
the Government of the Repub lic of Turkey  and the 
Government of  the Transitional Islamic State of 
Afghanistan      Turkey  10 July 2004 
11 Agreement on Trade between the Government of the 
Republic of Tajikistan and the Government of the 
Transitional Islamic State of Afghanistan  Tajikistan  13 September 2004 
12 Agreement between the Govern ment of the United States 
of America and the Government of the Transitional Islamic State of Afghanistan Concerning the Development 
of Trade and Investment Relations USA  19 October 2004 
13 Agreement on Promotion of Regional Supply of Goods, 
Services and expertise for Afghanistan Reconstruction between Afghanistan and UNDP UNDP 30 November 2004 
14 Agreement on Cooperation between Chamber of 
Commerce and Industry of Uzbekistan and Chamber of 
commerce and Industry of Afghanistan  Uzbekistan  2 March 2005 
15 Memorandum of Understanding between the Government 
of Kingdom of Netherlands and the Government of 
Islamic Republic of Afghanistan on the Program for 
Cooperation with Emerging  Markets (PSOM)    Netherlands  15 March 2005 
16 Investment Incentive Agreement between Afghanistan and 
Germany  Germany  20 April 2005  WT/ACC/AFG/4 
 Page 89 
 
 
  No Name of The Agreement Country Date 
17 Agreement on Cooperation between Afghan Chamber of 
Commerce and Industries and The Czech-Afghan Joint Chamber of Commerce Czech Republic  26 June 2005 
18 MoU on the Promotion of Investment between the 
Afghanistan Investment Support Agency of the 
Government of the Islamic Republic of Afghanistan and 
the Board of Investment of the Islamic Republic of 
Pakistan  Pakistan  24 July 2005 
19 Grant Agreement between Af ghanistan and US through 
USTDA USA  30 August 2005 
20 Investment Agreement between Afghanistan and China  China  19 June 2006 
21 Economic and Trade Agreement between Afghanistan and 
China China  19 June 2006 
22 Agreement between Ch amber of Commerce of 
Afghanistan and Chamber of Commerce of China  China Chamber of 
Commerce  19 June 2006 
23 Agreement on Transport and Transit between Islamic 
Republic of Afghanistan and Republic of Turkmenistan Turkmenistan  3 June 2007 
24 Economic and Trade Agreement between Afghanistan and 
Turkmenistan  Turkmenistan  3 June 2007 
25 Protocol between the Islamic Republic of Afghanistan and 
Republic of Turkmenistan on Mutual Consultations Turkmenistan  1 July 2007 
26 Joint Declaration of Presiden ts of Islamic Republic of 
Afghanistan and Republic of Turkmenistan Turkmenistan  1 July 2007 
27 Agreement on Economic and Trade Cooperation between 
Islamic Republic of Afghanistan and Republic of 
Turkmenistan Turkmenistan  1 July 2007 
28 Protocol of the first session of Joint Intergovernmental 
Commission on Trade and Economic Cooperation between 
Islamic Republic of Afghanistan and Republic of Uzbekistan Uzbekistan  1 July 2007 
29 Joint Statement on Commerci al Cooperation between US 
Department of Commerce and Afghanistan Ministry of 
Commerce and Industry USA  30 July 2007 
30 Protocol of Economic, Trade and Technical Cooperation 
between Afghanistan and Kazakhstan  Kazakhstan  16 September 2007 
31 Agreement on "Everything But Arms" between 
Afghanistan and EU  EU   
 
Table 2 - Other Bilateral Economic Agre ements and Memorandum  of Understandings  
No Name of The Agreement Country Place and Date 
1 Agreement between the Government of Transitional 
Islamic State of Afghanistan and the Government of the 
Islamic Republic of Iran on Mutual Cooperation on 
Customs Matters  Iran  Tehran,  
8 September 2003 
2 Agreement on Implementati on of Fibre Optic Project 
between the Transitional Islamic State of Afghanistan and 
the Islamic Republic of Iran Iran  Kabul  
21 May 2004 
3 Agreement on Cooperation in  the Field of Transit and 
Transport between the Government of the  Transitional Islamic State of Afghanistan and the Government of the 
Republic of Uzbekistan  Uzbekistan  Tashkent  
29 August 2004 
4 MoU between the Ministry of Civil Aviation and Tourism 
of Transitional Islamic State of Afghanistan and Department of Civil Aviation of the Government of United 
Arab Emirates  UAE Dubai,  
13 October 2004 WT/ACC/AFG/4 
Page 90  
 
  No Name of The Agreement Country Place and Date 
5 Protocol on Technical, Scientific and Economic 
Cooperation in the Field of  Agriculture between the 
Government of  the of Transitional Islamic State of 
Afghanistan and the Government of Republic of Turkey Turkey  Anatolia,  
6 December 2004  
6 Agreement between the Government of the Transitional 
Islamic State of Afghanistan and the Government of the 
Republic of Uzbekistan on Cooperation in Railway 
Transport Uzbekistan  Kabul,  
8 December 2003 
7 Cooperation Agreement for the postal, IT and 
Communication Services between the Ministry of Industry 
of  the French Republic and the Ministry of  
Telecommunications of the Transitional Islamic State of Afghanistan France  Kabul,  
DATE 2004  
8 MoU between the Government of Islamic Republic of 
Afghanistan and the Government of Republic of India on 
Cooperation on Civil Aviation  India New Delhi 
24 February 2005 
9 Agreement between the Government of the Islamic 
Republic of Afghanistan and the Government of  the 
Republic of Turkey on Coop eration and Mutual Assistance 
in Customs Matters  Turkey  Ankara,  
26 April 2005 
10 International Road Transport Agreement between the 
Government of the Islamic Republic of Afghanistan and 
the Government of the Republic of Turkey   Turkey  Ankara,  
27 April 2005 
 
Table 3 - Tripartite Agreements  
No Name of The Agreement Country Place and Date 
1 Agreement between the Government of the Transitional 
Islamic State of Afghanistan  and the Government of 
Turkmenistan and the Government of Islamic Republic of 
Pakistan on Turkmenistan-Afghanistan- Pakistan Natural Gas and Crude Oil Pipeline Project Turkmenistan 
Pakistan Islamabad, 
30 May 2002 
2 Agreement on International Transit-Transport between the 
Transitional Islamic State of Afghanistan, the Islamic 
Republic of Iran and Republic of Uzbekistan   Iran  
Uzbekistan  Tehran,  
17 May 2004 
3 Agreement on International Trans-Afghan Transport 
Corridor between the Transitional Islamic State of 
Afghanistan, the Islamic Republic of Iran and Republic of  
Tajikistan Iran  
Tajikistan Tehran, 
18 June 2003 
4 Tehran Dialogue Joint Communiqué on Cooperation 
between Afghanistan, Iran and Pakistan on Controlling 
Ozone Depleting Substances Trade in the Sub region Iran 
Pakistan Tehran, 
18 August 2004 
5 Agreement on International Transit- Transport between the 
Transitional Islamic State of Afghanistan, the Islamic Republic of Iran and India  Iran 
India  Tehran  
5 January 2003 
  WT/ACC/AFG/4 
 Page 91 
 
 
  ANNEX 9 
AFGHANISTAN'S NON TARIFF MEASURES  
Table 1 - Database of Non-Tariff Measures of Islamic Republic of Afghanistan  
HS Code No. 4 digit HS Description NTMs Description Source of 
Identification 
1 01.03 Live swine Prohibited Religious purposes 
2 01.05 Live poultry Quality in spection is required MAAH 
3 02.01 Meat of bovine animals, fresh or ch illed Quality inspecti on is required MAAH 
4 02.02 Meat of bovine animals, frozen Quality inspection is required MAAH 
5 02.03 Meat of swine, fresh, chilled or frozen Prohibited Religious purposes 
6 02.04 Meat of sheep or goats, fresh, chilled or 
frozen Quality inspection is required MAAH 
7 02.08 Other meat and edible meat offal, fresh, 
chilled or frozen Quality inspection is required MAAH 
8 02.09 Pig fat, fresh, chilled, frozen, salted, in 
brine, dried or smoked Prohibited Religious purposes 
9 03.01 Live fish Quality in spection is required MAAH 
10 03.02 Fish, fresh or chilled, Qu ality inspection is  required MAAH 
11 04.01 Milk and cream, Quality inspection is required MoPH 
12 04.03 Buttermilk, curdled milk and cream and 
yogurt Quality inspection is required MoPH 
13 04.04 Whey Quality inspection is required MoPH 
14 04.05 Butter and other fats and oils derived from 
milk Quality inspection is required MoPH 
15 04.06 Cheese and curd Quality inspection is required MoPH 
16 04.07 Birds' eggs, in shell, fresh Quality inspection is required MoPH 
17 05.02 Pigs', hogs' or boars' bristles and hair and 
waste thereof Prohibited Religious purposes 
18 08.02 Almonds, walnuts Prohibited MoCI 
19 12.11 Liquorice roots  Prohibited MoCI 
20 15.01 Pig fat including lard Prohibited Religious purposes 
21 16.02 Hams and cuts thereof Prohibited Religious purposes 
22 22.03 Beer made from malt Prohibited Religious purposes 
23 22.04 Wine of fresh grapes, including fortified 
wines Prohibited Religious purposes 
24 22.05 Vermouth and other wind of fresh grapes 
flavoured with plan ts or aromatic 
substances Prohibited Religious purposes 
25 22.06 Other fermented be verages (for example, 
cider, perry, mead); and mixtures of 
fermented beverages Prohibited Religious purposes 
26 25.01 Table salt Prohibited MoM 
27 25.15 Marble and travertine Prohibited MoM 
28 25.20 Gypsum; anhydride and plasters Prohibited MoM 
29 27.10 Petroleum oils (Aviation Fuel, Petrol, 
Diesel, Kerosene) Quality Inspection is required MoCI 
30 29.03 Halogenated Derivatives of hydr ocarbons Import is subject to product 
registration, labelling, 
advertisement control, inspection 
and quarantine requirement National Ozone 
Unit 
31 29.15 Acetic anhydride and other 
precursors/narcotics Controlled item Narcotics Law 
32 29.39 Alkaloids of opium and their derivatives; 
salts thereof Controlled items MoPH 
33 30.04 Medicaments A ll importations of 
pharmaceutical products are 
subjected to test on samples 
compulsorily MoPH WT/ACC/AFG/4 
Page 92  
 
  HS Code No. 4 digit HS Description NTMs Description Source of 
Identification 
34 31.03 Mineral or chemical fertilizers, p hosphatic Quality inspec tion is required MAAH 
35 31.04 Mineral or chemical fe rtilizers, potassic Quality inspection is required MAAH 
36 31.05 Mineral or chemical  fertilizers containing 
two or three of the fertilizing elements 
nitrogen, phosphorus and potassium Quality inspection is required MAAH 
37 38 Insecticides, fungicides, herbicides, 
disinfectants Testing, inspection and 
quarantine requirements MAAH 
38 41.13 Leather of swine Prohibited Religious purposes 
39 49.01 Printed books, brochures, leaflets and 
similar printed matter All books are subjected to take 
certificate from the Ministry of 
Culture and Information Ministry of Culture 
and Information 
40 52.01 Seed cotton Prohibited For protection of 
human health 
41 57.01 Carpets and rugs of wool or fine animal 
hair Prohibited MoCI 
42 84 Up to five years new machinery  Despite zero import duty rating 
certification is needed AISA/MoF 
43 84.18 Refrigerators and freezers of compression 
type-CFC  Prohibited NOU 
44 85 Telecommunication apparatus, 
equipments, All telecommunication apparatus 
and equipments are subjected to 
take certificate from the Ministry 
of Communication and 
Technology  MoCT 
45 85.24 Indecent or obscene records, tapes and 
other recorded media Prohibited For Moral 
Protection 
46 93.01 Military weapons For Security Purposes MoI/MoD 
47 93.02 Revolvers and pistols Fo r Security Purposes MoI/MoD 
48 93.06 Bombs, grenades, torpedoes, mines, 
missiles and similar munitions of war and 
parts thereof; cartridges and other 
ammunition For Security Purposes MoI/MoD 
49 97.05 Collections and collectors' pieces of 
zoological, botanica l, mineralogical, 
anatomical, historical, archaeological, 
palaeontological, ethnographic or 
numismatic interest Import licence is required Ministry of Culture 
and Information 
50 97.06 Antiques of an age exceeding one hundred 
years Import licence is required Ministry of Culture 
and Information 
 
Acronyms:  MoF = Ministry of Finance, MoI = Ministry of Interior , MoD = Ministry of Defenc e, MoCT = Ministry of 
Communication and Technology, MAAH = Ministry of  Agriculture and Animal Husbandry, MoCI = 
Ministry of Commerce and Industry, AISA = Afgha nistan Investment Support Agency, NOU = National 
Ozone Unit 
  Types of Non-Tariff Measures (NTMs) = Quantitati ve Restriction, Total/Abso lute Prohibition, Quantity 
Control Measure, Technical Measur es, Discretionary Import Licence, Import Licensing, Automatic Import 
Licensing, Non-Automatic Licensing prior to aut horization for sensitive product, Inspection, Export 
restriction, Acceptance under defi ned condition, Quarantine, Multip le Exchange Rates, etc.,    WT/ACC/AFG/4 
 Page 93 
 
 
  ACRONYMS 
 
ACCD Afghan Custom Clearance 
Document 
ACCI Afghanistan Chamber of Commerce 
and Industry  
ADB Asian Development Bank AGO Attorney General's Office 
AISA Afghanistan Investment Support 
Agency 
ANDS Afghanistan National Development 
Strategy 
ANSA Afghanistan National 
Standardization Authority 
ANTS Afghanistan National Tariff 
Schedule 
ASYCUDA  Automated System for Customs 
Data 
CAREC Central Asia Regional Economic 
Cooperation 
CARs Central Asia Republics CBA Central Bank of Afghanistan CBR Central Business Registry CSO Central Statistics Office 
DABDa  Afghanistan Bank 
EBA Everything-but-Arms ECO Economic Cooperation Organization ECOTA Economic Cooperation Organization 
Trade Agreement  
EPAA Export Promotion Agency of 
Afghanistan 
FDI Foreign Direct Investment GATS General Agreement on Trade and 
Services 
GATT General Agreement on Trade and 
Tariff 
GDGC General Department of Geodesy and 
Cartography 
GSP Generalized System of Preference IABA Independent Afghan Bar Association 
IMF International Monetary Fund 
IPR Intellectual Property Rights JCMB Joint Coordination and Monitoring 
Board 
MFTR Memorandum on the Foreign Trade 
Regime 
MoCI Ministry of Commerce and 
Industries  
MoE Ministry of Education MoF Ministry of Finance MoFA Ministry of Foreign Affairs 
MoJ Ministry of Justice 
MoM Ministry of Mines MoPH Ministry of Public Health 
MoPH-SM   Ministry of Public Health 
Strengthening Mechanism 
MoPW Ministry of Public Works MoRRA Ministry of Repatriation and 
Refugee Affairs 
MoT Ministry of Transport 
MoWE Ministry of Water and Energy NEPA National Environmental Protection 
Agency 
NGOs Non-Governmental Organizations 
NTBs Non-Tariff Barriers 
PSD Private Sector Development ROZ Reconstruction Opportunity Zones SAARC South Asian Association for 
Regional Cooperation 
SAEU South Asian Economic Union 
SAFTA South Asia Free Trade Area 
SOEs State Owned Enterprises SPS Sanitary and Phytosanitary TBT Technical Barriers to Trade TIN Tax Identification Number 
TRB Telecommunication Regulatory 
Board 
TRIPS Trade Related Aspects of 
Intellectual Property Rights 
TTFA Transit Transport Framework 
Agreement 
UNDP United Nations Development 
Program 
WB World Bank WIPO World Intellectual Property 
Organization 
WTO World Trade Organization 
 WT/ACC/AFG/4 
Page 94  
 
  Currency Unit = Afghanis (Af) 
Currency Equivalent as of 30 January 2009 US$1 = Af 52.15 Fiscal Year  The Fiscal Year is based on the Persian or Is lamic Solar Year (SY), which runs 621¼ years 
behind the Gregorian equivalent , and starts on 21 March. 
E.g. SY 1384 = 21 March 2005 – 20 March 2006 
 SY 1384 is 2005/06 
 
__________