98-2211The representative of the Kyrgyz Republic has proposed the deletion of the texts in
square brackets in paragraphs 14, 81, 87 and 100.
Members are invited to submit to the Secretariat (H.A. Millan, fax 739 57 76) any
comments or proposals concerning the text of the draft Report well in advance of the
meeting of the Working Party scheduled to take place on 23 June 1998.RESTRICTEDWORLD TRADE
ORGANIZATIONWT/ACC/SPEC/KGZ/9/Rev.1
28 May 1998
(98-2211)
Working Party on the Accession
of the Kyrgyz Republic
DRAFT REPORT OF THE WORKING PARTY
ON THE ACCESSION OF THE KYRGYZ REPUBLIC
Revision
I. INTRODUCTION
1.  On 13 February 1996, the Government of the Kyrgyz Republic requested accession to the
World  Trade Organization (WTO).  At its meeting on 16 April 1996 the General Council established aWorking Party to examine the application of the Go vernment of the Kyrgyz Republic to accede to the
WTO Agreement under Article XII, and to submit to the General Council recommendations which couldinclude a draft Protocol of Accession.  Membership of the Working Party was open to all WTOMembers.  The terms of reference and the membership of the Working Party were reproduced indocument WT/ACC/KGZ/2/Rev.2.
2. The Working Party met on 10 and 11 March, and 18 July 1997, 5 February, 6 May  and .... 1998
under  the Chairmanship of Mr. J.-M. Metzger (France).
II. DOCUMENTATION
3. The Working Party had before it, to serve as a basis for its discussions, a Memorandum on the
Foreign Trade Regime of the Kyrgyz Republic (WT/ACC/KGZ/3) and the questions submitted byMembers of the Working Party on the foreign trade regime of the Kyrgyz Republic, together with thereplies thereto (WT/ACC/KGZ/5 and Adde ndum 2, WT/ACC/KGZ/7, WT/ACC/KGZ/9,
WT/ACC/KGZ/10 and Addendum 1, WT/ACC/KG Z/13, WT/ACC/KGZ/15 and WT/ACC/KGZ/16)
and other information provided by the Kyrgyz Republic authorities.  The Government of theKyrgyz Republic  made available to the Working Party the following documentation:
- The Constitution of the Kyrgyz RepublicWT/ACC/SPEC/KGZ/9/Rev.1
Page 2
Laws
- The Civil Code of the Kyrgyz Republic,
- Bankruptcy Law in force since 19 April 1994 Law on Bankruptcy of 15 October 1997
- Law No. 1057-XII of 12 December 1992 On Banks and Banking (with amendments No. 1394-
XII of 12 January 1994)
- Law No. 1357-XII of 10 January 1994 On the Principles of the Budget- Law No. 6 of 2 April 1996 On Certification of Goods and Services
- Resolution of the Government of the Kyrgyz Republic No. 520 of 2 December 1995 On
Adoption of the Regulation on the Procedure of Control of the Goods Imported to the Kyrgyz
Republic
- Resolution of the Government No. 260 of 28 April 1994 On Adoption of the List of Goods
(Works and Services), Produced On the Territory of the Kyrgyz Republic and Imported to its
Territory, Which are Subject to Certification On the Indicators of Safety
- Law No. 915-XII of 29 June 1992 On Commodity Exchange and Exchange Trade in the Kyrgyz
Republic
- Law On Pledge of 6 March 1992
- Law No. 768-XII of 28 February 1992 On Prot ection of Consumer Rights of 10 December
1997(as amended by the Law of the Kyrgyz  Republic No. 1426-XII of 14 January 1994)
- Law of 6 March 1992 On Concessions and Foreign Concession Enterprises
- Law of 7 February 1992 On Customs Code of 30 July 1997
- Resolution On implementation of the Custom Code
- Resolution of the Supreme Soviet of the Republic of Kyrgyzstan No 769-XII of
28 February 1992 -  On Implementing the Law On Consumers Rights Protection
- Law No. 683-XII of 20 December 1991 On General Principles of Denationalization,
Privatization and Undertakings in Kyrgyz Republic (to be extended and specified by Laws as of
6 March 1992 No. 876-XII;  2 July 1992 No. 939-XII; 8 May No. 1229-XII;  12 January 1994
No. 1382-XII;  16 April 1994 No. 1501-XII;  23 June 1995 No. 5-I;  28 September and
11 October 1995 No. 30-I; Resolution of Parliament of 12 January 1994 No. 1386-XII).
- Resolution of Supreme Soviet of the Republic  of Kyrgyzstan No. 684-XII of 20 December 1991
On the Procedure of Putting into Force of the Law of the Republic of Kyrgyzstan About the
General Principles of Denationalization, Privatization and Undertakings - Law No. 1385-XII of
12 January 1994 On Denationalization and Privatization of State Ownership in the Kyrgyz
Republic
- Decree of the Zhogorku Kenesh of the Kyrgyz Republic No 1386-XII of 12 January 1994 On the
Procedure for the Introduction into Operation of the Law of the Kyrgyz Republic On
Denationalization and Privatisation of State Ownership in the Kyrgyz Republic
- Law No. Y16-XII of 17 April 1991 On Protection of the Environment
- Law No. 6-1 of 5 July 1995 On Operations in Foreign Currency
- Law No. 1076 of 16 December 1992 On Free Economic Zones in the Kyrgyz Republic (as
amended by the Law of the Kyrgyz Republic No. 2 of 15 March 1996)
- Resolution of the Supreme Soviet of the Kyrgyz Republic No. 1077-XII of 16 December 1992
On implementation of the Law of the Kyrgyz Republic On FEZ in the Kyrgyz Republic
- Law No. 536-XII of 28 June 1991 On Foreign Investments in the Kyrgyz Republic (as amended
by the Law of the Kyrgyz Republic No. 1221-XII of 7 May 1993 and No. 20-1 of
26 September 1995)
- Resolution of the Supreme Soviet of the Kyrgyz Republic No. 537-XII of 28 June 1991 On
Order of Implementing the Law of the Kyrgyz Republic On Foreign Investments in the Kyrgyz
Republic
- Law of 18 April 1991 On Common Principles of Foreign Economic Activity
- Law No. 943-XII of 2 July 1992 On People's Health Protection (as amended by Law of the
Kyrgyz Republic No. 1091-XII of 18 December 1992)WT/ACC/SPEC/KGZ/9/Rev.1
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- Resolution Of the Supreme Soviet of the Kyrgyz Republic No 944-XII Regulations for
Enforcement of the Law of the Kyrgyz Republic On People's Health Protection in the Kyrgyz
Republic
- Law No. 670-XII of 18 December 1991 On Insurance
- Resolution of the Supreme Soviet of the Republic of Kyrgyzstan No. 671-XII of
18 December 1991 On implementation of the Law of the Republic of Kyrgyzstan On Insurance
- Law No. 1548-XII of 27 May 1994 On Making, Ratifying, Implementing and Denouncing
International Agreements of the Kyrgyz Republic
- Resolution No. 1549-XII of 27 May 1994 On bringing into force the Law of the Kyrgyz
Republic On making, ratifying, implementing and denouncing the International Agreements of
the Kyrgyz Republic
- Law No. 1478-XII of 14 April 1994 On the Local Taxes and Fees
- Resolution of the Parliament of the Kyrgyz Republic of the 14 April 1994 On the
implementation procedure of the Law of the Kyrgyz Republic On local taxes and fees
- Law No. 7 of 2 April 1996 On Providing Unity of Measurements
- Law of the Kyrgyz Republic (enforced by Resolution of the Supreme Soviet No. 949-XII) of
3 July 1992 On Medical Insurance of the Citizens of the Kyrgyz Republic (as amended by the
Law of the Kyrgyz Republic No. 27-I of 28 July and 26 September 1995)
- Law of 15 December 1992 On Mineral Resources
- Resolution of the Kyrgyz Republic Supreme Soviet of 15 December 1992 On the Manner of
Implementation of the Kyrgyz Republic Law On Mineral Resources
- Draft Law of the Kyrgyz Republic On the Limitation of Monopolistic Activities and the
Development and Protection of Competition of 15 April 1994
- Law On the National Bank
- Law No. 1481-XII of 14 April 1994 On Non-Tax Payments
- Law No. 34 of 1 July 1996 On Normative Legal Acts of the Kyrgyz Republic
- Law of the Kyrgyz Republic (enforced by Resolution of the Supreme Soviet No. 946-XII) of
2 July 1992 On Sanitary-Epidemic Welfare of the Kyrgyz Republic's Population
- Law of the Kyrgyz Republic On Securities and Stock Exchanges of 21 December 1991
- Law of the Kyrgyz Republic of 2 April 1996 On Standardization
- Law No. 1072-XII (enforced by Resolution of the Supreme Soviet of the Kyrgyz Republic
No. 1073-XII of 16 December 1992) of 16 December 1992 On the State Fee
- Law No. 874-XII of 6 March 1992 On the State Tax Service- Law No. 1553-XII of 28 May 1994 On the Basic Principles of the Treasury of the Kyrgyz
Republic
- Law No. 660-XII of 17 December 1991 On Taxes from Companies, Associations and
Organizations (as amended by Laws:  No. 872-XII of 6 March 1992, No. 925-XII of
30 June 1992, No. 1088-XII of 17 December 1992, No. 1237-XII of 8 May 1993, No. 1416-XII
of 13 January 1994, No. 1525-XII of 25 May 1994, No. 25-I of 27 July and 26 September 1995
and No. 24 of 26 June 1996)
- Law of the Kyrgyz Republic On Taxes from Population of 27 December 1991
- Law No. 1472-XII of 14 April 1994 On Principles of Taxation System in the Kyrgyz Republic
- Law on Subsurface Resources of 2 July 1997
- Law on State Regulations of Foreign Economic Activities of 2 July 1997
- Law on Banks and Banking Activities of 29 July 1997- Law on National Bank of 29 July 1997
- Amendments to the Customs Tariff Law of 30 July 1997
- Law on Foreign Investment of 24 September 1997
- Civil Code Part II (section on intellectual property) of 5 January 1998
- Criminal Code (section on intellectual property) of 1 January 1998- Law on Copyrights and Neighbouring Rights of 14 January 1998
- Law on Trademarks, Servicemarks and Appellation of Places of Origin of 14 January 1998WT/ACC/SPEC/KGZ/9/Rev.1
Page 4
- Patent Law of 14 January 1998
- Amendments to Part I of the Civil Code of 15 October 1997
- Law on Integrated Circuits Topology of 30 March 1998
- Law on Commercial Secrets of 30 March 1998
- Law on PC, Software and Databases of 31 March 1998
Presidential Decrees
- Presidential Decree No. 134 of 5 May 1993 On Regulating Currency Transactions
- Presidential Decree of 9 June  6 September 1994 On Additional Guarantees for Foreign
Investors in the Kyrgyz Republic
- Presidential Decree No. 246 of 27 July 1992 On the State Commission of the Kyrgyz Republic
for Foreign Investments and Economic Assistance
- Presidential Decree No. 270 of 9 September 1992 On Measures for Organization of Expert
Examinations of Foreign Investments
- Presidential Decree No. 280 of 23 September 1992 On Changing the Procedure for Licensing
Raw Materials, Consumer Goods and Products of Productional and Technical Purpose
- Presidential Decree No. 35 of 9 February 1993 On Changes in the State Regulation of Foreign
Economic Activities in the Kyrgyz Republic (as amended by Presidential Decrees No. 219 of
30 July 1993, No. 5 of 12 January 1994, No. 32 of 23 March 1994 and No. 36 of9 February 1995)
- Presidential Decree No. 121 of 2 April 1992 On Regulation of Foreign Economic Activity in the
Kyrgyz Republic
- Presidential Decree No. 140 of 11 April 1996 On Measures to Improve Coordination of
Privatization with Attraction of Foreign Investment to the Kyrgyz Republic
- Presidential Decree No. VII-165 of 13 May 1996 On Additional Measures on Introduction of
State Monopoly to the Production, Storage,  Sale of Alcohol and Alcoholic Products
- Presidential Decree No. 207 of 19 June 1992 On Licensing Certain Kinds of Businesses (as
amended by Presidential Decrees:  No. 302 of  27 October 1992, No. 106 of 6 April 1993, No. 6
of 12 January 1994, No. 22 of 22 February 1994, No. 74 of 7 May 1994, No. 148 of 4 July 1994,No. 177 of 15 July 1994, No. 235 of 7 September 1994, No. 254 of 6 October 1994, No. 36 of
9 February 1995, No. 70 of 11 March 1995, No. 177 of 17 July 1995, No. 322 of
25 November 1995)
- Presidential Decree No. 234 of 9 June 1994 On Additional Guarantees for Foreign Investors in
the Kyrgyz Republic
- Presidential Decree No. VII-301 of 12 November 1994 On the Arrangements for Increasing
Control Over the Market of Securities of the Kyrgyz Republic
- Presidential Decree No. 319 of 9 December 1994 On the Bishkek Foreign Investments
Attraction Zone
- Presidential Decree No. 34 On Some Measures for Protection and Development of Private
Entrepreneurship of 25 March 1994
- Presidential Decree No. 42 of 27 February 1995 On Improving Taxation in Agriculture- Presidential Decree No. 45 of 4 March 1996 On the Structure and Composition of the Cabinet of
Ministers of the Republic
Resolutions
- Resolution of the Cabinet of Ministers No. 373 of 25 August 1995 On Strengthening
Responsibility for Unauthorized Purchase, Sale of Scrap and Fragments of Non-Ferrous andFerrous Metals and Their Industrial Scrap (as amended by Resolution of the Cabinet of
Ministers No. 268 of 17 June 1996)WT/ACC/SPEC/KGZ/9/Rev.1
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- Resolution of the Cabinet of Ministers No. 383 of 12 September 1995 On the Programme of
State Investments for 1996-1998
- Resolution of the Government No. 408 of 13 June 1994 On the Establishment of Provisions on
the Procedure of Export and Import Licensing Goods in the Kyrgyz Republic
- Resolution of the Cabinet of Ministers No. 440 of 23 October 1995 On Approving the
Regulations on the Procedure for Delivery of Goods and Rendering Services within the
Framework of Productional Cooperation of Enterprises and Branches of the Kyrgyz Republic
and Other States - the CIS Participants
- Resolution of the Government No. 484 of 14 November 1995 On Creation of the Consulting
Agency on International Procurement Under the General Directorate of the State Commissionfor Foreign Investments and Economic aid of the Kyrgyz Republic
- Resolution of the Cabinet of Ministers No. 49 of 1 February 1996 On the Draft Law of the
Kyrgyz Republic On the Customs Tariff of the Kyrgyz Republic
- Resolution of the Cabinet of Ministers No. 52 of  2 February 1996 On Measures of Extraordinary
Financial Support of Agriculture
- Resolution of the Government No. 520 of 2 December 1996 On Adoption of the Regulation on
the Procedure of Control of the Goods Imported to the Kyrgyz Republic
- Resolution of the Government No. 523 of 18 July 1994 On the Rates of the Author's Award for
Public Performance and Other Kinds of Usag e the Productions of Literature and Arts
- Resolution of the Government No. 56 of 6 February 1996 On the Procedure for the Export and
Import of Commodities (Goods and Services) in the Kyrgyz Republic
- Resolution of the Government No. 57 of 5 Februa ry 1993 On Procedures of Transfer of Articles,
Property, Currency, Auto-motor Vehicles and Other Valuables Through the Customs Border of
the Kyrgyz Republic
- Resolution of the Government No. 57 of 6 February 1996 On Confirmation of the List of
Country-Users of the Preference Scheme in the Kyrgyz Republic
- Resolution of the Cabinet of Ministers No. 571 of 27 December 1995 On Introduction of
Applying Excise Marks on Production, Importati on and Sale of Tobacco Products and Alcoholic
Beverages in the Kyrgyz Republic
- Resolution of the Cabinet of Ministers No. 613 of 30 December 1993 On Temporary Customs
Tariff (as amended by Resolutions of the Cabinet of Ministers No. 26 of 21 January 1994 andNo. 358 of 28 May 1994)
- Resolution of the Government No. 622 of 18 August 19942 On Customs Regime of Processing
of Tolling Raw Materials and Goods Within the Customs Territory of the Kyrgyz Republic
- Resolution of the Government No. 119 of 20 March 1996 On Adoption of Regulations on
Equipping Transport Vehicles (Containers) for Carriage of Goods with Customs Stamps and
Seals
- Resolution of the Government No. 725 of 23 September 1994 On Regulations on the State
Inspection for Standardization and Metrology at the Government of the Kyrgyz Republic
- Government Decree No. 82 of 28 February 1996 On Programme of Denationalization and
Privatization of State Property in the Kyrgyz Republic for 1996-1997
- Resolution of the Government No. 9 of 8 January 1996 On Approval of the Resolution on
Procedures of Use of the Excise Marks in the Kyrgyz Republic on Production, Import andRealization of Tobacco Goods and Alcoholic Drinks
- Resolution of the Government No. 901 of 30 December 1994 On Regulating the Import of
Goods, Things and Other Objects by Physical Persons in the Kyrgyz Republic
- Resolution of the Government No. 97 of 22 March 1995 On Main Directions of Foreign
Economic Activity of the Kyrgyz Republic
- Resolution of the Government No. 10 of 9 January 1996 On Temporary Regulation On Applying
Excise Seals On Oil Products Imported to the Kyrgyz Republic
- Resolution of the Government No. 109 of 30 March 1992 On Ratification of Resolutions on
Procedures for Registration of Securities, on Procedures of Licensing the Right for ProfessionalWT/ACC/SPEC/KGZ/9/Rev.1
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Stock Market Activities, on Procedures for Collecting Securities Registration Fees, Licensing
and Certifying the Right for Implementation of Professional Stock Market Activities and for
Collecting Other Fees, on Procedures for Maintaining the General State Registry of Joint Stock
Companies, Recording and Accountability in Joint Stock Companies
- Resolution of the Supreme Soviet of the Republic of Kyrgyztan No. 1126-XII of
18 December 1992 On Introduction of State Licensing in Construction Activity in the Kyrgyz
Republic
- Resolution of the Government No. 29 of 24 January 1994 On Creation of the State Regulation of
Production, Storage and Distribution of Ethyl Spiritus and Establishing Control over Production
and Sale of Strong Drinks in the Kyrgyz Republic
- Resolution of the Government No. 120 of 14 March 1994 On the Results of the Reconstruction
and Privatization in 1991-1993 and on the Programme of the Reconstruction and Privatization of
State Property in the Kyrgyz Republic in 1994-1995
- Presidential Decree No. 121 of 2 April 1992 On Regulation of Foreign Economic Activity in the
Kyrgyz Republic
- Resolution of the Supreme Soviet No. 1220-XI I of 7 May 1993 On Karakol, Alai, Chon-Alai
and Kara-Kuldji Free Economic Zones
- Resolution of the Cabinet of Ministers No. 135 of 27 March 1996 On Clarification of the List of
Subjects-Monopolists for 1996
- Resolution of the Government No. 146 of 5 April 1996 On Supplement of the List of the
Productions (Works, Services) Produced in the Kyrgyz Republic and Imported to its Territory
Be Subject to Obligatory Certification of the Index Safety, Stipulated to Introduce on the III
Stage, Approved by the Resolution of the Go vernment of the Kyrgyz Republic No. 260 of
28 April 1994
- Resolution of the Legislative Assembly of Jogorku Kenesh of the Kyrgyz Republic No. 151-1 of
23 June 1995 On Creation of Free Economic Zones of Bishkek City
- Resolution of the Cabinet of Ministers No. 559 of 21 December 1995 On the Development
Programme for Export of the Kyrgyz Republic for 1996 and Middle-Term Prospects
- Resolution of the Cabinet of Ministers No. 167 of 16 May 1995 On the Work of the Ministry of
Communication on Carrying Out First Project of Telecommunication in the Republic Financedby the World Bank/MAR and European Bank of Reconstruction and Development
- Resolution of the Government No. 209 of 10 May 1996 On the Concept of Development of Free
and Private Market for Grain in the Kyrgyz Republic
- Resolution of the Cabinet of Ministers No. 242 of 2 June 1993 On Approving the Regulation on
the Procedure of Licensing Attracti on (Hiring) of Manpower from Abroad
- Resolution of the Government No. 260 of 28 April 1994 On Approval of the Products' List
(Works, Services) Produced in the Territory of the Kyrgyz Republic and Imported to its
Territory, Being Subject for Compulsory Certification on Safety Indications
- Resolution of the Cabinet of Ministers No. 270 of 7 July 1995 On Approving the Procedure for
Calculation and Collection of Excise Tax on Produced and Imported Alcohol and Liquor-Vodka
Products
- Resolution of the Cabinet of Ministers No. 290 of 7 May July 1993 On Creation of Customs-
Tariff Council Under the Cabinet of Ministers
- Resolution of the Government No. 298 of 21 July 1995 On Implementation of the State
Regulation of Production, Storage and Distribu tion of Ethyl Spiritus and Strong Drinks
- Resolution of the Government No. 3 of 5 January 1996 Regulations On the Procedures of
Imposition of Penalties and Economic Sanctions for Violations of the Anti-MonopolisticLegislation, Pricing Discipline a nd Consumers' Rights Protection
- Resolution of the Cabinet of Ministers No. 300 of 1 July 1996 On State Customs Inspectorate
Under the Cabinet of MinistersWT/ACC/SPEC/KGZ/9/Rev.1
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- Resolution of the Cabinet of Ministers No. 32 7 of 17 July 1996 On the Course of Implementing
Regulations of the Parliament and the Cabinet of Ministers On Issues of Introduction of State
Monopoly in the Sphere of Production, Storage and Sale of Alcohol and Alcoholic Products
Instructions and Regulations
- Instruction On Customs Procedures for Transit Cargo (approved by Order No. 145 of the State
Customs Inspection on 23 August 1993)
- Instruction of the Order to Fill the Cargo Cu stoms Declaration (approved by Decree No. 05-
06/13 of the State Customs Inspection  on 24 January 1996)
- Instruction On Application of Personal Examinat ion  (approved by Order No. 176-1 of the State
Customs Inspection on 17 September 1993)
- Order No. 45 of 14 February 1994 On the Procedure for Licensing Entrepreneurship Activity of
Paid (i.e. for pay) Medical, Pharmaceutical and Educational Institutions and Persons Engaged in
Private Medical, Pharmaceutical Practice and Paid Training
- Instruction No. 99-p of 19 March 1993 to approve "Statute on the Order of Design, Expert
Examination and Adoption of Investment Projects for the Construction Sector in the Territory of
the Kyrgyz Republic"
- Regulations for Opening Commercial Banks in the Kyrgyz Republic (approved by the Board of
the National Bank of the Kyrgyz Republic No. 1/8 of 23 July 1994 with amendments andadditions No. 16/4 of 30 June 1995
- Regulation on State Licensing the Construction Activity Implemented on the Territory of the
Kyrgyz Republic by Enterprises with Foreign Investment (approved by Resolution of the
Collegium of the State Construction of 10 February 1995)
- Order No. 05-06/12 of 24 January 1996 On Approv al of the Regulation on Procedure of Control
Over the Goods Exported from the Territory of the Customs Union (State Customs Inspectorate
Under the Government of the Kyrgyz Republic)
- Temporary Regulations On Drawing, Submittin g and Considering Applications On Official
Registration of Software, Databases and Topo graphies (Main Department of Intellectual
Property of the Ministry of Education and Science of 29 August 1995)
- Document Regulations On Activities of the Branches Representative Offices of Foreign Banks
in the Kyrgyz Republic of 30 June 1994
- Regulation On State Licensing of Construction Activities in the Kyrgyz Republic (with
amendments by Decree of the Gosstroi of th e Kyrgyz Republic No. 16 of 30 March 1994 and
No. 30 of 28 September 1995)
- Temporary Provisions on Industrial Property of the Kyrgyz Republic (adopted by Decree of the
State Committee on Science and New Technologies No. 3 of 2 August 1993)
- Temporary Provisions On Work Inventions, Utility Models and Industrial Designs
- Order of Receiving Payments for Licence Extradition
- Regulations On the Procedures of Imposition of Penalties and Economic Sanctions for
Violations of the Anti-Monopolistic Legislation, Pricing Discipline and Consumers' Rights
Protection (passed by Resolution of the Government No. 3 of 5 January 1996)
- Temporary Provisions On Selection Achievements of 24 July 1995
- Regulations on the State Inspection for Standard ization and Metrology At the Government of the
Kyrgyz Republic (passed by Resolution of the Government No. 725 of 23 September 1994)
- Temporary Regulations On the State Fund of Industrial Property (approved by the Ministry of
Education and Science on 24 July 1995)
- Regulation On Department of Patent Agency for Trademark and Industrial Model Examination
- Regulation on Equipping Transport Vehicles (Con tainers) for Carriage of Goods With Customs
Stamps and Seals (approved by the Resolution of the Government of the Kyrgyz Republic
No. 119 of 20 March 1996)WT/ACC/SPEC/KGZ/9/Rev.1
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Draft laws and regulations
- Draft Law on Anti-Dumping
- Draft Law on Subsidies and Countervailing Measures
- Draft Law on Safeguards
- Draft Law On Selection Achievements
- Draft Amendments to the Law On Certification- Draft Amendments to the Law On Standardization
- Draft Amendments to the Law On Plant Quarantine
- Draft Amendments to the Law On Veterinary
- Draft Amendments to the Customs Code
- Draft Amendments to the Tax Code
- Draft Regulations On Import/Export Licensing
- Draft Regulations on Amendments to Certain Decisions of the Government- Draft Amendments on Introducing Changes and Amendments to some Legislative Acts of the
Kyrgyz Republic (amendments to the Law on Normative Acts and the Law on Publication of
Laws)
III. ECONOMIC POLICIES
- Foreign exchange and payments system
4. In response to requests for information, the representative of the Kyrgyz Republic informed
members of the Working Party that a highly pro-active monetary policy was being pursued by theNational Bank of the Kyrgyz Republic (NBKR) to stab ilize the foreign exchange value of the Som.  The
Kyrgyz Republic did not maintain any exchange restrictions on current account or capital transactions.Individuals and legal entities could import and export  foreign currency without limitations provided they
declared the amount to the customs.
5. The representative of the Kyrgyz Republic added that the Kyrgyz Republic had joined the IMF
on 8 May 1992.  The Kyrgyz Republic accepted the obligations of Article VIII of the IMF Articles ofAgreement in March 1995 and maintained a fully convertible currency.  The Kyrgyz Republic's quotawas Special Drawing Rights (SDR) 64.5 million (about US$96 million) and its outstanding use of IMFcredit currently totalled SDR 83.6 million (about US$120 million).   He further noted that on11 December 1995, the International Monetary Fund (IMF) had approved a first Enhanced StructuralAdjustment Facility (ESAF) loan in the amount of  SDR 88.15 million.
- Investment regime
6. Some members of the Working Party enquired whether there were any restrictions to the
national treatment principle in relation to investments by foreign persons in the Kyrgyz Republic.  Therepresentative of the Kyrgyz Republic stated that the new Law on Foreign Investment ofWT/ACC/SPEC/KGZ/9/Rev.1
Page 9
16 September 1997 provided guarantees of national treatment, equitable and fair treatment, and full and
constant protection for foreign investors.  Exceptions from national treatment, according to the same law,were restrictions connected with defence and the protection of national security, the health of thepopulation, and public moral.  At this point, no such restrictions had been introduced.  The Law onDenationalization and Privatization of State Property of 12 January 1994 provided the Cabinet ofMinisters with the authority to restrict or otherwise limit foreign investors from participating in theprivatization of certain industries; however the Cabine t of Ministers had not yet exercised this authority.
The Kyrgyz Republic would not use such authority in a manner that was inconsistent with its obligationsas a future member of the WTO.  Foreign investors could freely repatriate investments made or profitsearned in the Kyrgyz Republic in a freely convertible currency.
7. Some members of the Working Party asked whether foreign investors were protected against
expropriation or nationalisation of their assets.  In response, the representative of the Kyrgyz Republicstated that Article 5 of the new Law on Foreign Investment of September 1997 guaranteed foreign
investments from expropriation (nationalization, requisition or any other equivalent measure), except incases when such expropriation is carried out for an overriding public purpose, on a non-discriminatorybasis.  In the event of expropriation of a foreign investment, the Law on Foreign Investment requires thata foreign investor be paid prompt, adequate and effective compensation.  Such compensation is freelytransferable and payable in a freely useable currency.  Rights established under the Law on ForeignInvestment are enforceable against the governmental  bodies with any applicable procedure agreed upon
between the foreign investor and the authorized governmental bodies of the Kyrgyz Republic.  Whensuch agreement is absent an investment dispute between the authorized governmental bodies of the
Kyrgyz Republic and a foreign investor shall be settled through arbitration in accordance with one of thefollowing procedures:
- Regulations of the Arbitration Court under the Chamber of Industry and Commerce of the
Kyrgyz Republic;
- Convention for the Settlement of Investment Disp utes between States and Citizens of any other
States, ("Convention ICSID" signed in Washi ngton DC on 19 March 1965) if applicable;
- Arbitration (Auxiliary) Regulations of the International Centre for the Settlement of the
Investment Disputes (ICSID), if applicable;  and
- Arbitration Regulations of the United Nations Commission on International Trade Law
(UNCITRAL Regulations);  in this case the appointing body shall be the General Secretary ofthe ICSID.WT/ACC/SPEC/KGZ/9/Rev.1
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8. In response to questions concerning the ownership of land by foreign investors, the
representative of the Kyrgyz Republic noted that the Constitution of the Kyrgyz Republic prohibited theprivate ownership of land by private persons or legal entities, either foreign or local.  There were noplans to eliminate that restriction.  Foreign citizens and legal entities could purchase residentialimmovable property attached to land - such as apartments and houses - only with the specific permissionof the Cabinet of Ministers.  Foreign citizens and legal entities could rent immovable property on thesame basis as Kyrgyz citizens and legal entities.
- State ownership and privatization
9. The representative of the Kyrgyz Republic stated that the Government’s privatization plans were
organized according to industrial and sectoral priorities.  In the electric energy sector, the plan was toattract foreign investment for the development of hydroelectric power engineering, to privatize sectoralenterprises and to modernize and reconstruct electric gr id networks.  In the coal industry, the plan was to
restructure the sector and sector enterprises by reorganizing and, where  necessary, liquidating sectorenterprises, to develop coal open-pit mining with th e aim of decreasing production costs and to promote
energy saving technologies.  In the oil and gas sector, the plan was to construct and bring into operationtwo small oil refineries in the next two years and to develop a package of documents for conducting an
international tender intended for the purpose of attracting foreign investment into the exploration andexploitation of oil and gas deposits, to conduct the tender.  In the gold extracting industry, the plan wasto attract foreign investment into the explorati on and exploitation of gold deposits.  Non-ferrous
metallurgy (mercury, antimony, tin, tungsten) would be reformed to attract foreign investment into thedevelopment of the antimony and mercury metallurgy industry.
10. The representative of the Kyrgyz Republic further added that in the machine building and metal
processing sector, the Government planned to reorganize the production of machines, equipment (andthe parts thereof) for (i) processing agricultural products, (ii) mechanizing small peasant and familyfarms and (iii) use in the  coal mining industry.  The Government also planned to reform theelectrotechnical sector to orient enterprises toward the production of complex electrical appliances andequipment for the electric energy industry.    Light i ndustry would be reformed to speed up the structural
transformation of the sector and to find new market s both within and outside the CIS.  More modern
equipment would be purchased with the aid of German and  Japanese loans.  Food production andprocessing industries would be reformed to establish small and medium-sized on-siteproduction/processing facilities for milk, meat, fruit and vegetable production and processing.  Thepharmaceuticals sector would be reformed to attract foreign investment into the domestic pharmaceuticalWT/ACC/SPEC/KGZ/9/Rev.1
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industry generally and to complete the construction of "bishkekbiofarm", a chemical pharmaceutical
plant.  The agriculture sector would be reformed to attract foreign investment for the purpose ofdeveloping export-oriented agricultural enterprises; and to create joint ventures with foreign investors forthe production of agricultural products.  The construction sector would be reformed to attract foreigninvestment into the housing construction industry and to encourage the manufacturing of energy-savingconstruction materials.
11. In response to requests for information concerning restrictions on foreign investors participation
in privatisation, the representative of the Kyrgyz Republic stated that Article 8 of the Law onDenationalization of State Property of 12 January 1994, pr ovided that during the privatization of State
owned assets, the Cabinet of Ministers could "reduce the number of purchasers to guarantee the priorityrights of citizens and legal entities of the Kyrgyz Republic."  He noted, however, that this power had notyet been exercised.
12. The representative of the Kyrgyz Republic stated that the status of privatization in the Kyrgyz
Republic was provided in Tables 1 and 2 below.  As of 1 January 1998, approximately 64 per cent ofState-owned objects (base is 1 January  1991) had been privatized. The total value of privatized stateobjects since 1991 was som 13,418,900 million.  The mass privatization program was completed on30 June 1997.  The shares of 1,056 Joint-Stock Companies were sold using coupon auctions.  Accordingto Article 4 of the Kyrgyz Republic Constitution of 5 May 1993, land, minerals, water, air space, forests,plant and animal life and all other natural resources were the exclusive property of the State.  Accordingto Article 3 of the Law on Privatization and Denationalization of 12 January 1994, objects in exclusiveownership of the Kyrgyz Republic could not be subject to privatization.  The lease of such property was,however, possible.   The Law on Privatization and Denationalization also authorized the Cabinet ofMinisters to specify additional objects not subject to denationalization and privatization, even thoughtheir privatization and denationalization might not be specifically prohibited in the Kyrgyz RepublicConstitution and the Kyrgyz Republic Law On Privatization and Denationalization.  The current list ofobjects not subject to privatization is the following:
- mineral resources, forest fund, water resources, air space;
- protected or used in a special manner natural territories;- objects of historical and cultural heritage of the people of Kyrgyzstan (unique cultural and
natural monuments, objects of nature, history, culture, science and technology, as well as raritieskept in state museums, libraries and their subsidiaries, the association of folk art production"Kyial");
- property compounds of state power and management bodies;WT/ACC/SPEC/KGZ/9/Rev.1
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- funds of the republican budget and [foreign] currency reserve of the Kyrgyz Republic, Social
Fund under the Kyrgyz Republic Government, other State out-of-the-budget funds, as well as thegold reserve;
- National Bank of the Kyrgyz Republic, Treasury, Monetary chamber;- arms, military equipment and other property of military use, budget-financed entities and
organizations (including arsenals), as well as vehicle columns of military type under theoperative management of the Ministry of Defense of the Kyrgyz Republic, Ministry of NationalSecurity of the Kyrgyz Republic; Ministry on emergencies and civil defense of the KyrgyzRepublic, Ministry of interior of the Kyrgyz Republic, other ministries and agencies that havemilitary units;
- military objects of CIS countries located on the Kyrgyz Republic territory in accordance with
existing inter-state agreements;
- objects of the civil defense of the Ministry of Emergencies and Civil Defense of the Kyrgyz
Republic;
- science-technical entities and organizations within the system of the State agency on forests
under the Kyrgyz Republic Government;
- enterprises and science-technological entities and organizations within the system of the State
inspection on standardization and metrology under the Kyrgyz Republic Government and Statearchive agency under the Kyrgyz Republic Government;
- entities and organizations subordinate to the National Committee on Statistics of the Kyrgyz
Republic;
- enterprises and organizations of hydro-meteorological service, services of control over the state
of environment and protection of the nature;
- enterprises and organizations of the mapping-geodesic service;- enterprises and entities of sanitary-epidemiological and quarantine service of the Kyrgyz
Republic, plant protection service;
- objects and equipment for permanent storage of hard industrial and household wastes, hard and
liquid radioactive wastes, animal cemeteries;
- cemeteries, enterprises on their service and provision of ritual services;  and,- technical inventory bureau.The Law on Denationalization and Privatization of State Property of 12 January 1994 provided the
Cabinet of Ministers with the authority to restrict or otherwise limit foreign investors from participatingin the privatization of certain industries; however the Cabinet of Ministers had not yet exercised thisauthority.   The Kyrgyz Republic would not use such authority in a manner inconsistent with itsWT/ACC/SPEC/KGZ/9/Rev.1
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obligations as a future member of the WTO.  Foreign investors currently participated in the privatization
process in the Kyrgyz Republic according to the same rules applied to domestic investors.  Privatization
methods which will be used for privatizing remaining State assets, subject to privatization were:
(i) corporatization (turning a State-owned en terprise into a Joint Stock Company-JSC)
followed by privatization through sales of shares using auctions or commercial tenders(used mainly for the privatization of medium and large scale enterprises);
(ii) transformation of a State-owned object in to a limited liability partnership followed by
sale of partnership rights;
(iii) direct sale (including bidding) to strate gic investors (especially foreign companies) of
large-scale objects.  Companies are invited to bid through international press;
(iv) direct sale (including bidding), aucti ons, and commercial tenders of any objects;
(v) lease (contract management) for a period of time including the right of purchase by
lessee.
During 1998, the Kyrgyz Republic planned to begin privatization and denationalization of  large
enterprises in strategic sectors of the economy including mining, energy, telecommunications, andsystems of supply (oil and gas).  These include companies such as Kyrgyztelecom-telecommunicationscompany, Kyrgyz Aba Zholdoru-National airline company, Karabalta-Mining, Kadmajay Antimony,Uchkun JSC-Printing, Akyl JSC-Printing, Kyrgyz Energy Holding, Kyrgyzgasmunaizat, and Bishkek
Machinery JSC.  Also, the Kyrgyz Republic plans to privatize and denationalize companies and facilitiesof the non-productive sphere (e.g. movie theatres, recreation objects, resorts) in 1998-2000.
Table 1:  Sectoral Privatization Data Profile for 1991-1997
Sector Number of Objects of
State Property as of
1 January 1991Number of Privatized
Objects as of
31 December 1997Percentage of
Privatized Objects as
of 1 January 1998
Industry 602 531 88.2
Consumer Services 1919 1917 99.9
Oil Production Sector 1253 434 34.6
Trade and Public Catering 1949 1894 97.1
Agriculture 855 354 41.4
Construction 730 418 57.3
Transport 295 154 52.2
Other sectors 2306 673 28.2
Total 9989 6375 63.8WT/ACC/SPEC/KGZ/9/Rev.1
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Table 2:  Sectoral Privatization Data Profile by Privatization Modes For 1991-1997
Sector Privatization ModeNumber of
Privatized Objects
Industry Lease with subsequent buy-out
Auctioning
Sale through auctions
Sale through tendersGratis transfers
Direct sale to private entities
Direct sale to labour collectives (bodies)
Incorporation (Joint-Stock Companies)8
400
16
12
1
18
49
27
Consumer Services Lease with subsequent buy-out
Auctioning
Sale through auctionsSale through tenders
Direct sale to private entities
Direct sale to labour collectives (bodies)
Incorporation (Joint-Stock Companies)17
36
170529
717
440
8
Non-production sector Lease with subsequent buy-out
Auctioning
Sale through auctions
Sale through tenders
Direct sale to private entitiesDirect sale to labour collectives (bodies)
Incorporation (Joint-Stock Companies)2
277
30
8
4128
48
Trade and public catering Lease with subsequent buy-out
Auctioning
Sale through auctions
Sale through tenders
Direct sale to private entities
Direct sale to labour collectives (bodies)
Incorporation (Joint-Stock Companies)41
213
151
581
307
549
52
Agriculture Lease with subsequent buy-out
AuctioningSale through auctions
Sale through tenders
Direct sale to private entities
Direct sale to labour collectives (bodies)
Incorporation (Joint-Stock Companies)4
128
6
1
30
177
8
Construction Lease with subsequent buy-out
Auctioning
Sale through auctions
Sale through tendersDirect sale to private entities
Direct sale to labour collectives (bodies)
Incorporation (Joint-Stock Companies)2
298
11
3
13
69
22WT/ACC/SPEC/KGZ/9/Rev.1
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Sector Privatization ModeNumber of
Privatized Objects
Transport Auctioning
Direct sale to private entitiesDirect sale to labour collectives (bodies)
Incorporation (Joint-Stock Companies)137
3
11
3
Other sectors Lease with subsequent buy-out
Auctioning
Sale through auctions
Sale through tenders
Direct sale to private entitiesDirect sale to labour collectives (bodies)
Incorporation (Joint-Stock Companies)24
151
77
28
171193
28
13. The representative of the Kyrgyz Republic stated that the Kyrgyz Republic would provide
annually to WTO Members information on developments in its privatization for as long as itsprogramme of privatization is in existence along th e lines of the information provided to the Working
Party during the accession process, and on other issues related to its economic reforms as relevant to itsobligations under the WTO.    The Working Party took note of this commitment.
- Pricing policy
14. At the earlier stages of the deliberations, the representative of the Kyrgyz Republic stated that all
prices had been liberalized except when the concerned item was supplied by an entity that has beenclassified as either a natural, permitted or tem porary monopoly. [Certain natural monopolies (electricity,
gas pipelines, telecommunications, railroad and aviation) were regulated through either price or profitrestrictions by the Anti-monopoly Department within the Ministry of Finance.  Prices of water supply,heat, hot water and public transport were set by city or oblast administrations.  Non-natural monopolieswith  a dominant position in the market (more than 35 per cent market share) were subject to profitability
control.  The allowable margin of profitability had ranged from 25 per cent to 50 per cent.  At that time,there were 105 companies (mostly goods producers) subject to profitability control.  Companies whichexceeded their allowable profitability margin had had to provide a written justification to the Anti-Monopoly Department.]
15. Some members of the Working Party requested further information on which "natural
monopolies" were subject to pricing or profit controls, and how such controls were operated.  In
response, the representative of the Kyrgyz Republic later on, describing the current situation, stated thattariff rates were required to be approved by the Anti-Monopoly Department at the Ministry of Finance(AMD), on the basis of levels and norms of profitability: cost of operating a specific infrastructure (e.g.WT/ACC/SPEC/KGZ/9/Rev.1
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power transmission line, pipeline) or producing a specific product plus a profit margin set by the AMD.
The following natural monopolies were subject to price and profit controls:
- Kyrgyz Energy Holding production, transmissio n, and distribution of electricity and thermal
power);
- Kyrgyzgasmunaizat (natural gas);
- Kyrgyztelecom (communication services);
- Kyrgyzalco (alcohol and alcoholic products);
- Kyrgyztamekesei (tobacco and tobacco products);- Kyrgyz Aba Joldoru (air transport of passengers and cargo); and
- Kyrgyzrailroad (rail transport of passengers and cargo).
In addition, the prices of services provided by Kyrgyztelecom (e.g. cost for installing a phone, rate of
long distance calls/per minute) were set by the AMD.  The prices of services provided by
Kyrgyzgasmunaizat (only gas for population) and Kyrgyz Energy Holding (e.g. electricityHS 2716 rate/kwh) were established by the State Agency on Energy.  Prices for using sewage systems,water, and city public transport are set by city or oblast administrations.   All fees for services provided
by the state were subject to control (e.g. fee for driver’s license, fee for obtaining phytosanitarycertificate, fee for obtaining veterinary certificate).   Permitted monopolies (eight companies) andtemporary monopolies (34 companies) - these are companies which have dominant position in themarket (more than 35 per cent market share) - are not subject to price or profitability control.  Permittedmonopolies were required to notify their prices to the Anti-Monopoly Department at the Ministry ofFinance.  All other natural monopolies were permitted to set their prices freely.
16. The representative of the Kyrgyz Republic stated that the Kyrgyz Republic's regime for price
and profit control for natural monopolies would be op erated in conformity with the requirements of
Articles II and III of the GATT 1994 and Article VIII of the GATS.
17. Some members of the Working Party noted that two of the covered entities dealt with the
production and sale of alcohol and tobacco: Kyrgyzalco and Kyrgyztamekesi.  They requested additional
information on the price controls applied.   In response, the representative of the Kyrgyz Republic statedthat Kyrgyzalco was a State Joint Stock Company within which there were currently 14 joint stockcompanies.  The domestic market share of companies under the structure of Kyrgyzalco in the sale ofWT/ACC/SPEC/KGZ/9/Rev.1
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alcoholic products was approximately 60 per cent.  Wholesale prices of alcoholic products were
established separately by each of the enterprises under Kyrgyzalco.  Enterprises under Kyrgyzalco wererequired to declare their prices to the Anti-Monopoly Department under the Ministry of Finance andwere subject to profitability control by the Anti-Monopoly Department. Profit could not exceed20 per cent.  There were no plans to eliminate Kyrgyzalco and take away its authority to license the tradeand production of alcohol and alcoholic products.
18. In relation to Kyrgyztamekesi, the representative of the Kyrgyz Republic added that it was a
State Joint Stock Company with seven companies under its structure (six were joint stock companies andone was a State enterprise).  The domestic market share of Kyrgyztamekesi was approximately16 per cent for tobacco products.  Kyrgyztamekesi was required to declare its prices to the Anti-Monopoly Department under the Ministry of Finance and was subject to profitability control by the Anti-Monopoly Department.  Its profit was not permitted to exceed 20 per cent.
19. In response to requests from some members of the Working Party, the representative of the
Kyrgyz Republic explained that the controls mentioned above were authorized by the Law of the KyrgyzRepublic on Limitation of Monopolistic Activities and the Development and Protection of Competitionof 15 April 1994 and sub-central authorities applied such controls in accordance with the same law.  Thepurpose of price and profits control was to regulate natural monopolies and fees for services charged byState bodies.  In general, the Government of the Kyrgyz Republic wished to avoid application of such
measures, and intended to do so in the future in accordance with the law.
20. The representative of the Kyrgyz Republic stated that the all price controls on products and
services still in effect, at the central and sub-central level were listed in paragraph 15 above by HSnumber where applicable. All other prices for goods and services in the Kyrgyz Republic weredetermined by market forces.  Any changes in price controls or additional controls would be published in
official publications.  All price controls would be applied in a WTO-consistent fashion, taking intoaccount the interests of exporting WTO Members as provided for in Article III:9 of the GATT 1994.The Working Party took note of these commitments.WT/ACC/SPEC/KGZ/9/Rev.1
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IV. FRAMEWORK FOR MAKING AND ENFORCING POLICIES
- Powers of executive, legislative and judiciary, administration of policies on WTO-related
issues
21. The representative of the Kyrgyz Republic stated that under the Constitution of the
Kyrgyz Republic, governmental power was divided among the executive, legislative and judicialbranches, with the President being afforded the most  significant power.   The President was the Head of
State and the highest government official.  The executive powers were exercised by the Government(principally, the Cabinet of Ministers) formed by the President.  The head of the Government was thePrime Minister.  The President was elected to a 5-year term of office on the basis of universal (persons18 years of age and older), equal and direct suffrage by secret ballot.  The Constitution gave thePresident wide-ranging powers:  he was the highes t representative of the Kyrgyz Republic both within
the country and in international relations; he dete rmined the basic direction of domestic and foreign
policy and had the right to propose and veto legislation;  his assent was required for any bill passed bythe Parliament to become law (unless the Parliament was exercising a presidential veto).  He had thepower to issue decrees and to suspend or invalidate acts of the Cabinet of Ministers and other executivebodies.  The President was responsible for appointing members of the Cabinet of Ministers.
22. The representative of the Kyrgyz Republic further added that the Cabinet of Ministers was the
principal institution of Government.  Executive power was exercised by the Cabinet of Ministers, as well
as the individual ministries, State committees, admi nistrative departments, other central executive bodies
and local State administrations under the control of the Cabinet of  Ministers.  The Cabinet of Ministersconsisted of the Prime Minister, all Vice-Prime Mini sters, all Ministers and Heads of State Committees.
The Government was the highest body within the executive power system of the Kyrgyz Republic,
(except the President) and as such directly controls activities of local state administrations on a range of
issues, including those involving external trade matters  and implementation of provisions of international
treaties to which the Kyrgyz Republic is a party.  Ar ticle 6 of the Civil Code provided that international
agreements ratified by the Kyrgyz Republic were to take precedence over conflicting provisions in civillegislation.  The Kyrgyz Republic Law "On Government" of 25 March 1997 No. 17 set out the functionsand authority of the central government and provides in Article 20 and 21 that the Government shalldirect the implementation of all laws and decrees of the Kyrgyz Republic.  The Kyrgyz Republic Law"On local self-government and local state administrations in the Kyrgyz Republic" of 19 April 1991 N-WT/ACC/SPEC/KGZ/9/Rev.1
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437-XII set out the powers of the local governments.  These powers were subordinate to those of the
national government and did not entail authority concerning trade policy, which is the sole purview ofthe central authorities.
23. The representative of the Kyrgyz Republic stated that the Parliament exercised legislative power
was implemented by the Parliament which consisted of two chambers:  the Legislative Assembly and theAssembly of People’s Representatives.  Judicial authority was exclusively exercised by the Courts.  TheCourt system consisted of a commercial division and an ordinary division.  Generally, the commercialdivision dealt with business and commercial disputes between legal entities, whereas the ordinarydivision had exclusive jurisdiction over all other types of disputes, including civil, criminal andadministrative law matters, as well as commercial disputes where at least one of the litigants was anindividual or a collective farm.  Both Court systems were divided into tiers.  The commercial divisionhad two tiers.  Seven regional commercial Courts of general primary jurisdiction (one for the city ofBishkek and one for each of the six oblasts) constituted the lower tier.  The Supreme Commercial Courtconstituted the upper tier.  It had appellate jurisdiction over the decisions of  the regional commercialCourts, and primary jurisdiction over disputes involving any "non-normative" aspect of an act of anygovernmental body, institution or official.  The ordi nary Court system was divided into three tiers.  The
lower tier was composed of district Courts.  The mi ddle tier was composed of seven regional Courts (one
for the city of Bishkek and one for each of the six oblasts), which had initial appellate jurisdiction overthe decisions of the district Courts.  The Supreme Court alone had final appellate jurisdiction over thedecisions of the regional Courts.    By virtue of  the Constitution judges had immunity when acting in
their official capacity.  Any member of the three high Courts (the Constitutional Court, the SupremeCourt and the Supreme Commercial Court) coul d be removed from his/her post upon a formal
presentation to the Parliament by the President.  Lower Court judges could be removed if they failed  aqualification test.   Agency actions affecting trade were subject to administrative and appellate review.Article 2(3) of the Civil Code provided for the right to appeal an administrative decision in court.Specifically, Articles 417 to 428 of the Customs Code provided for the right to appeal decisions of thecustoms bodies.  Article 57 of the Tax Code provided for administrative appeals of decisions of anofficial of the Tax Service.   Article 58 provided fo r appellate review of any final decision of the Tax
Service.  Article 18 of the Law on Licensing provided for the right to appeal issues relating to the refusal
in the issue of a license.WT/ACC/SPEC/KGZ/9/Rev.1
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24. The representative of the Kyrgyz Republic stated that the Kyrgyz Republic would provide a
right of appeal to an independent body for foreign and domestic importers and exporters of officialmeasures affecting trade.  The Working Party took note of this commitment.
- Authority of sub-central governments
25. The representative of the Kyrgyz Republic stated that the Kyrgyz Republic was divided into
seven regional executive administrations, under the direct supervision and control of the Cabinet ofMinisters.  Within each  regional executive administration were a number of departments havingregional competence over certain specified matters, e.g., a Department of Agriculture, a Department ofEconomy, which reported both to the regional executive administration and to its corresponding nationalMinistry.  Because the regional executive administrations were under the control and supervision of theCabinet of Ministers and each national Ministry, local governmental policy affecting trade in goods andservices was  exclusively determined by the central Government.  Governors headed the oblast regionalexecutive administrations, and were appointed by the President with the consent of the correspondingkenesh.  At the lowest level of government were the rayon (district) executive administrations.  ThePresident, with the consent of the kenesh of the rayon, appointed the head of each rayon administrationafter considering the recommendation of the concerned governor or mayor.  The President could alsoremove the head of the local rayon administration after taking into account the recommendation of the
concerned governor or mayor.  In addition to the regional executive administrations, Bishkek and theoblasts each had a locally elected unicameral legislature called a kenesh.  Each regional kenesh wasresponsible for legislation dealing with regional social and economic matters.  Each kenesh must alsoapprove the budget prepared by its corresponding regional executive administration.  If a kenesh passeda piece of legislation on a matter within its competence, it automatically became law.  Each rayon had alocal kenesh composed of 15-25 elected representatives, the primary responsibility of which was toadopt legislation dealing with a small range of local matters.
26. The representative of the Kyrgyz Republic confirmed that central authorities would be solely
responsible for establishing foreign trade policy and that the central Government would implement theprovision of the WTO relevant to sub-central governments, including Article XXIV:12 of theGATT 1994, the corresponding WTO Understanding and Ar ticle I:3(a) of the GATS;  that sub-central
administrative authorities, e.g. local administrative bodies, had no jurisdiction or authority to establishregulations or taxes on goods and services in the Kyrgyz Republic independent of the central authoritiesand that the central government would eliminate or nullify measures taken by sub-central authorities inWT/ACC/SPEC/KGZ/9/Rev.1
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the Kyrgyz Republic that conflict with WTO provisions from the date of accession.  The Working Party
took note of these commitments.
V. POLICIES AFFECTING TRADE IN GOODS
- Registration and right to trade
27. The representative of the Kyrgyz Republic stated that all natural and legal persons engaging in
any type of economic activity in the Kyrgyz Republic were required to be registered.  He noted that theKyrgyz Republic had no special registration requirements for persons engaging in importing or exportingnor were individuals or firms restricted in their ability to import or export based on the scope of businessof their registration.  There were no restrictions, such as capital or nationality requirements, on personswishing to engage in foreign trade.  The representa tive of the Kyrgyz Republic also confirmed that the
former State monopoly in foreign trade had been abolished.
28. The representative of the Kyrgyz Republic confirmed that the Kyrgyz Republic would ensure
that, should any laws and regulations relating to the ri ght to trade in goods, and all fees, charges or taxes
levied on such rights, be introduced in the future , they would be in full conformity with its WTO
obligations, including Articles VIII:1(a), XI:1 and III:2 and 4 of the GATT 1994 and that it would also
implement such laws and regulations in full conformity with these obligations.  The Working Party tooknote of this commitment.
- Customs tariff
- Ordinary customs duties
29. The Kyrgyz Republic engaged in market access negotiations on goods.  The tariff concessions
resulting from these negotiations are reproduced in the Schedule annexed to the draft Protocol ofAccession of the Kyrgyz Republic which is reproduced in the Appendix to this Report.
30. In response to requests for information, the representative of the Kyrgyz Republic stated that the
Customs Tariff of the Kyrgyz Republic was contained in the Customs Tariff Law.  The temporary tariffwas a flat 10 per cent tariff on all imported goods, except those for which an explicit exemption had beencreated by law.  Under the temporary flat 10 per cent regime, the average trade-weighted level of importWT/ACC/SPEC/KGZ/9/Rev.1
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duties (after adjusting for exempted items and items qualifying for the Kyrgyz Republic’s preference
scheme) was 8.4 per cent in 1995.  In 1997, the Kyrgyz Republic adopted HS 96 as its tariffnomenclature, retaining the tariff rate of 1992.  Tariff descriptions were coded at the 6 and 9-digit levels.In response to further questions, he noted that the Kyrgyz Republic was engaged in negotiations to jointhe World Customs Organization.
31. He further added that under the Kyrgyz Republic’s System of Preferences, goods originating in
developing countries were subject to a duty rate which was 50 per cent of the tariff rate while goodsproduced in and imported from least developed countries were free of duty.  The system of preferencesmay be modified from time to time, in accordance with the provisions of the Customs Code.
32. In response to questions concerning the seasonal duties, the representative of the
Kyrgyz Republic stated that according to the Cust oms Code which incorporated the matters previously
covered by the Tariff Law of 1992, the Cabinet of Ministers of the Kyrgyz Republic may establishseasonal duties.  The representative of the Kyrgyz Republic stated that if imposed, seasonal duties wouldnot exceed the bound level of tariffs and would be applied in a manner consistent with the requirementsof the WTO Agreement.  Also, adequate notice would be provided before imposing seasonal  duties.The Working Party took note of these commitments.
- Tariff quotas, tariff exemptions
33. In response to questions from some members of the Working Party, the representative of the
Kyrgyz Republic stated that any business enterprise  operating in the Kyrgyz Republic, (including wholly
or partially foreign owned enterprises) could apply to the Ministry of Industry and Foreign Trade toreceive tariff exemptions for imports of certain items used in the production of final products.Applications for tariff exemptions were not automatically approved by the Ministry of Industry andForeign Trade.  The criteria applied in consideration of an application were whether the items will beused in the production of final products. Import substitution or export performance were not factors inconsideration of the requests.  The exemptions were granted to the requesting enterprise alone.  Since 30March 1994, 436 businesses had enjoyed the benefits of the duty exemptions.WT/ACC/SPEC/KGZ/9/Rev.1
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34. Some members of the Working Party noted that exemptions were granted to some products
originating in CIS countries.  They recalled that Article I of the GATT 1994 required application of theMFN principle, whilst Article XXIV permitted exceptions to Article I in the case of regional integrationinitiatives provided that the conditions of Article XXIV and the Understanding were complied with.They asked if the Kyrgyz Republic was prepared to  enter a commitment that tariff exemptions would
only be given to third countries in the context of a WTO compatible Free Trade Agreement or CustomsUnion Agreement.
35. The representative of the Kyrgyz Republic stated that upon accession to the WTO, any tariff
exemptions would only be implemented in conform ity with the relevant WTO provisions including
Articles I and XXIV of the GATT 1994.  The Working Party took note of this commitment.
- Other duties and charges
36. The representative of the Kyrgyz Republic confirmed that the Kyrgyz Republic levied no duties
and charges on imports other than ordinary customs duties.  He further confirmed that the KyrgyzRepublic had bound other duties and charges within the meaning of Article II:1(b)of the GATT 1994  atzero in its Schedule of Concessions on Goods which is reproduced in Part I of the Annex to the Protocolof Accession.
- Fees for services rendered
37. Some members of the Working Party requested information on any fees applied to imported
products.  In response, the representative of the Kyrgyz Republic stated that an ad valorem  customs
processing fee was levied on imported goods.  In response, some members of the Working Party statedthat the fee did not appear to be consistent with Article VIII of GATT 1994, which required that fees andcharges related to importation be limited to the cost of services rendered.  The representative of theKyrgyz Republic stated that the government was cons idering how to alter the current customs clearance
fee from an ad valorem  fee into a fee that recovered the actual cost of the service provided.  The
Kyrgyz Republic was attempting to calculate the actual cost of the services rendered in connection withimportation.  The representative of the Kyrgyz Republic added that the Kyrgyz Republic would ensurethat all fees and charges related to importation reflected the cost of services rendered.WT/ACC/SPEC/KGZ/9/Rev.1
Page 24
38. Following further requests for information, the representative of the Kyrgyz Republic noted that
the Kyrgyz Republic proposed to use the ad valorem  rate of 0.15 per cent with minimum and maximum
limits.  The limits would be determined on an annual basis to account for inflation. The existing rate of0.15 per cent would be continued, even though the expense/revenue ratio was 3.6 per cent for fiscal year1996 and was estimated at 2.4 per cent for fiscal year 1997.  The minimum and maximum fees weredetermined using a methodology that was based on internationally recognized cost accounting principlesand practices.  The minimum fee consisted of two com ponents: direct costs and indirect costs.  Direct
costs were those that were exclusively incurred to process import declaration, and consisted of employeecosts to process an import declaration.  The time spent by an employee to process various categories ofimport goods was analyzed and the average employee cost to process an import declaration wascomputed.  Indirect costs were those that were incurred for various customs activities including importprocessing.  These costs, also called overhead costs, were allocated based on approximate total timespent by customs employees.  On average, Kyrgyz Customs employees spent about 50 per cent of theirtime processing import declarations.  As a result, 50 per cent of the total overhead costs were allocated toimport processing.  The maximum fee was based on the total costs of Kyrgyz Customs. It was estimatedthat approximately 50 per cent of Customs resources were consumed to process import declarations. Asa result, about 50 per cent of total costs were allocated to import processing.  The Kyrgyz Republicwould create a revolving fund to finance import processing activities. All revenues collected from importprocessing fee would be credited to this fund. The proceeds from the fund would be used only to meetthe costs of import processing.
39. Following further requests for information on the customs processing fee, the representative of
the Kyrgyz Republic stated that in pursuance of Article VIII of the GATT 1994, the new Customs Codeof the Kyrgyz Republic put into effect on 1 October 1997, provided that customs fees collected forcustoms clearance must not exceed the approximate cost of the services provided.
40. The representative of the Kyrgyz Republic also noted that an import/export License Fee was also
charged.  The current fee was som 1,000 (US$56).  Analysis had revealed that the current fee reflectedthe cost of services rendered.
41. The representative of the Kyrgyz Republic stated that prior to the date of accession to the WTO,
the Government of the Kyrgyz Republic would adopt, through implementing regulations, the provisionsand methodology for the application of the customs processing fees as described in paragraphs 38 and 39WT/ACC/SPEC/KGZ/9/Rev.1
Page 25
above.  He confirmed that all fees and charges for services related to importation or exportation and
would be operated in conformity with the provisions of Article VIII of the GATT 1994 from the date ofaccession. The Working Party took note of these commitments.
- Tariff rate quotas
42. In response to questions from some members of the Working Party, the representative of the
Kyrgyz Republic stated that the Kyrgyz Republic maintained no tariff quotas, and did not intend tointroduce tariff rate quotas in the future.  Any tariff rate quotas introduced in the future would beoperated in conformity with the relevant WTO provisions, including Article XIII:5 of the GATT 1994.
- Application of internal taxes on imports
- Value Added Tax
43. In response to requests for information, the representative of the Kyrgyz Republic stated that a
20 per cent VAT was imposed on all sales of goods within the Kyrgyz Republic, as well as on goodsimported from non-CIS countries. The VAT was imposed on non-CIS imports at the time of importation,and was collected by the customs authorities. The base for assessment of the VAT was the sum of (i) thecustoms value of the goods plus (ii) transportation, insurance and other costs related to the importation ofgoods where applicable.  With respect to goods imported from CIS countries, no VAT was collecteduntil the good was sold within the Kyrgyz Republic;  and the seller was permitted to claim a VAT creditfor the amount of VAT paid in the exporting CIS country.  This VAT-credit mechanism for imports fromCIS countries was in effect in all CIS countries.  In addition, VAT exemptions were granted for (i) goodsimported to render assistance in connection with natural disasters, armed conflicts, or accidents;(ii) goods imported as humanitarian assistance as specified under an order of the Cabinet of Ministers;(iii) imported goods which the importer had previously exported;  (iv) goods temporarily imported underbond, provided such goods were exported in an unaltered condition within twelve months;  (v) goodsmistakenly imported into the Kyrgyz Republic and being returned to the original exporter;  (vi) goods in
transit through the Kyrgyz Republic;  (vii) imported goods intended for official use by foreign embassiesor similar representative offices of foreign governments and imported goods intended for the personaluse of the diplomatic, administrative or technical personnel of such embassies or representative officesor the family members of such personnel; (viii) pharmaceuticals and medicinal supplies specified byWT/ACC/SPEC/KGZ/9/Rev.1
Page 26
Cabinet of Ministers;  (ix) educational supplies and school equipment;  (x) baby food;  (xi) capital goods
imported by a legal entity or entrepreneur for use in its/his productive economic activity;  and (xii) otherimported goods specified as  VAT-exempt pursuant to the customs legislation of the Kyrgyz Republic.
44. Some members of the Working Party stated that Article XXIV of the GATT 1994 does not
exempt regional integration agreements from application of the MFN principle with regard to internaltaxation.  They requested an indication when the Kyrgyz Republic would bring its system of VATapplication into line with Article I of the GATT 1994.  In response the representative of theKyrgyz Republic stated that the Kyrgyz Republic understood the need to bring its VAT system intoconformity with accepted world practice, i.e. applying the VAT to all goods sold or imported into theKyrgyz Republic regardless of their country of origin, and exempting exported goods regardless of theircountry of destination.  However, he noted that because it was necessary to obtain the agreement of otherCIS countries to do so it was not possible to give a date for elimination of the practice.  A bilateralagreement had been reached with Kazakstan, with the result that Kazakstan was treated as a "non-CIS"country with respect to the application of VAT.  Mo reover, analogous agreements have been signed with
Armenia, Azerbaijan, Belarus, Tadjikistan, Ukraine and Uzbekistan, and initialled with Georgia.  A
Protocol signed with the Russian Federation recently would change this practice in their trade as of1 January 1999.
45. The representative of the Kyrgyz Republic stated that the Law on Making Amendments and
Supplements to the Tax Code of the Kyrgyz Republic would be adopted no later than 1 January 1999and that as soon as possible from the date of accession, in accordance with the legislative programmeoutlined in paragraph 44 above, the Kyrgyz Republic would ensure that value added taxes would beapplied to imports in full conformity with WTO re quirements, in particular, the most-favoured-nation
requirements of Article I and the national treatment provisions of Article III of the GATT 1994.  TheWorking Party took note of this commitment.
- Excise Taxes
46. In response to requests for information on the excise taxes applied in the Kyrgyz Republic, the
representative of the Kyrgyz Republic stated that excise taxes were imposed on certain goods whetherproduced in or imported into the Kyrgyz Republic.  He further added that the new Tax Code specifiedthat the following goods were subject to excise taxes:  (i) alcoholic beverages, drinks, spirits and liquors;WT/ACC/SPEC/KGZ/9/Rev.1
Page 27
(ii) items destined for wine production;  (iii) tobacco and tobacco products;  (iv) gold, silver and
platinum jewellery;  (v) processed and non-processed fur hides (except for the hides of moles, rabbits,dogs, deer, or sheep);  (vi) clothing made of natural fur (except for apparel made of the hides of moles,rabbits, dogs, deer, or sheep);  (vii) coats, short coats, jackets and cloaks trimmed with fur (except for thefur of moles, rabbits, dogs, deer or sheep);  (viii) clothes made from natural leather;  (ix) crystal items,including lighting appliances made of crystal;  and (x ) firearms, including gas weapons (other than those
procured by State authorities).  The following imported goods were exempted from excise tax:  (i) goodsneeded to operate or repair vehicles being used for the international conveyance of passengers, baggageor cargo;  (ii) goods which were damaged and thereby made useless prior to their entry into theKyrgyz Republic;  (iii) goods imported as humanitarian aid;  (iv) goods imported for charitable or aidpurposes, including technical assistance supplied by foreign States and international organizations;(v) goods confiscated by or escheated to the State;  (vi) goods in transit through the Kyrgyz Republic;and (vii) goods intended for official use by foreign embassies or similar representative offices of foreigngovernments and imported goods intended for the personal use of the diplomatic, administrative ortechnical personnel of such embassies or representative offices or the family members of such personnel.
47. The representative of the Kyrgyz Republic added that some excise taxes were assessed on an ad
valorem  basis, while others were assessed on a quantity basis.  Domestic and imported goods were
subject to differing excise tax rates.  Imported goods subject to excise tax were exempted from customsduties.  Some members also requested information on the methodology used to calculate excise rates fordomestic,  CIS and other imported products.  In response, the representative of the Kyrgyz Republicstated that the Cabinet of Ministers Resolution No. 557 of 26 September 1997, and Resolution No. 702of 4 December 1997 established the methodology to be used for calculating excise taxes.  Thismethodology was the same for goods produced in the Kyrgyz Republic and imported from othercountries including CIS countries.
In cases where the excise tax rate was established in proportion of the wholesale price of goods:
H= C x A:100%whereH = the amount of excise taxC = the wholesale price of goods (or their customs value at the point of import)A = the rate of excise tax in per cent.WT/ACC/SPEC/KGZ/9/Rev.1
Page 28
In cases where the excise tax rate was established in US$ to the physical volume of goods:
H = O x T x KwhereH = the amount of excise taxO = the physical volume of manufactured or imported goods (kilogram, litre, units, tons)T = the rate of excise tax in US$ per unitK = the US$ exchange rate to the Kyrgyz Som.
The Som was the only currency that could be used for payment of excise taxes for both imports and
domestic products.  Conversion into Soms was based on the official exchange rate of the National Bankof the Kyrgyz Republic.
48. The representative of the Kyrgyz Republic further added that the new Tax Code, which came
into effect on 1 July 1996, substantially changed the list of goods subject to excise tax.  However, norates had been set for the items newly subject to excise tax.  In the interim, customs duties applicable tosuch items had temporarily been increased.  He stated that the current system of excise taxation treatedimported and domestic products differently.  In response, some members of the Working Party statedthat although they welcomed the Kyrgyz Republic's recognition that the current excise tax system treateddomestic and imported products differently, which was inconsistent with Article III of the GATT 1994,they asked that the system be brought into conformity with that provision and requested a progress reporton the reform of the system.   In response, the representative of the Kyrgyz Republic stated thatfollowing a review of excise tax rates, the Legi slative Assembly had in December 1996 approved the
following table of excise tax rates.
Table 3:  New Excise Tax Regime
Goods Domestic
RatesImported
RatesHS Codes
Ethyl alcohol and purified ethyl alcohol
produced from raw materials (except thoseimported by special consumers within
stipulated limits)$1.4/litre $1.4/litre 2207
Vodka $0.90/litre $0.90/litre 220890110-
220890390WT/ACC/SPEC/KGZ/9/Rev.1
Page 29
Goods Domestic
RatesImported
RatesHS Codes
Liqueurs and vodka products $0.90/litre $0.90/litre 220810,
220830,220890510-
220890790,
220890910,
220890990
Alcoholized beverages, juice and balsam* $0.90/litre $0.90/litre 220840,
220850
Grape wineother wines$0.35/litre
$0.29/litre
Wine $0.35/litre 220421-220429,
2205,
2206
Cognac $0.60/litre $0.80/litre 220820100
Sparkling wines $0.40/litre $0.45/litre 220410
Beer:- packaged- unpackaged$0.80/litre
$0.05/litre$0.25/litre 2203
Raw materials for wine production $0.15/litre $0.20/litre 220430
Tobacco products**
- filter cigarettes
- unfiltered cigarettes$1.5/1000
each
$0.75/1000
each$5/1000 each
$2/1000 each2402
2402
Other tobacco-containing items, includingfermented tobacco12% 240110,
240120, 2403
Gold, platinum or silver jewellery 20% 30% 7113-7118
Processed and raw fur hides (other than mole,
rabbit, deer, dog and sheep skin)0% 10% 4110,
4103-4104,
4106-4109
Wearing apparel made of natural fur,including coats, short-coats, jackets, capes,
stoles, scarves, headgear, collars, fur coats and
fur pieces (other than apparel made of hides ofmode, rabbit, dog, deer or sheep skin)0% 10% 4303
Coats, short-coats, jackets and capes trimmed
with fur (other than mole, rabbit, dog, deer or
sheep skin)0% 10% 4303
Clothing made of natural leather 0% 10% 4203
Crystalware 0% 30% 701321,
701331,701391
Firearms and gas weapons (other than thoseacquired for the needs of State agencies)10% 20% 9301-9393,
9305-9306WT/ACC/SPEC/KGZ/9/Rev.1
Page 30
Goods Domestic
RatesImported
RatesHS Codes
Oil products:
- gasoline, soft and medium distillates$45/ton $45/ton 2707,
271000330,271000350,
271000390,
271000110,
271000150,
271000210,271000250,
271000410,
271000450
Aircraft fuel $45/ton 271000510-
271000590
Diesel fuel $0/ton $45/ton 271000610,
271000650,
271000690
Black oil $0/ton $0/ton 271000710,
271000750,
27100790
Other $0/ton $0/ton 271000550,
271000910,
271000930,
271000990
Coffee and cocoa products 10% 0901, 1801, 1803-
1805
Carpets and rugs (except floor coverings) 0% 35% 57
* Excise tax rates were calculated based on the content of ethyl alcohol in such items, the base
being a beverage containing 45 per cent alcohol.
** Pursuant to Resolution No. 430 of 23 July 1997 of the Kyrgyz Republic for imported tobacco
products (topped cigarettes and without tops) with excise stamps, the rate of excise tax is U$1.5
per 1000 cigarettes, pursuant to Resolution No. 430 of 23 July 1997 of the Kyrgyz Republic.
49. Some members of the Working Party stated that the proposed new rates of excise taxation did
not appear to resolve the problems of inconsistent rates of taxation, in particular higher rates of taxationfor certain imported products.  They requested that the system be brought into conformity withArticle III of the GATT 1994, and that imported products not be subject to tax rates in excess of thoseapplied to domestic products.  In response, the representative of the Kyrgyz Republic stated that theexcise tax system prevailing in the Kyrgyz Republic was already in full conformity with WTO most-favoured-nation requirements.  He noted that no imported goods to the Kyrgyz Republic were subject toboth excise taxes and import duties at the same time, although it was not contrary to internationalpractices or WTO rules to have apply both excise taxes and import duties to an imported good.WT/ACC/SPEC/KGZ/9/Rev.1
Page 31
50. The representative of the Kyrgyz Republic stated that by the date of accession to the WTO, the
Government of the Kyrgyz Republic would comply with the provisions of Articles I and III of theGATT 1994 with regard to the application of excise taxes and would adopt a decision establishing asingle excise tax regime with the same rates applied equally to imported and domestically producedgoods.  The Working Party took note of these commitments.
- Quantitative import restrictions
51. In response to questions, the representative of the Kyrgyz Republic stated that the
Kyrgyz Republic maintained no quantitative import restrictions and it did not plan to introduce importquotas except in those circumstances permitted by the WTO Agreements. The Kyrgyz Republic did notforesee balance of payment problems in the next 2 years provided that the current economic situationcontinued to evolve favourably.  Currently, the only import restrictions applied in the Kyrgyz Republicapplied to military arms and goods;  explosives;  nuclear materials and technology for military use;virulent poisons;  and narcotics (including those used in pharmaceuticals) and psychotropic substances.The system applied to goods originating in and coming from all countries, including other CIS countries.
52. The representative of the Kyrgyz Republic stated that if the Kyrgyz Republic introduced import
quotas as an emergency measure in the future they would be in conformity with Article XIX of the
GATT 1994;  and if import quotas were introduced for balance of payment purposes they would be inconformity with Articles XII and Article XVIII of the GATT 1994 and the WTO Agreement.
- Import licensing procedures
53. In response to requests for information, the representative of the Kyrgyz Republic stated that
previously, import licences had been required for fi ve broad categories of goods.   A Draft Regulation
finalised and submitted to the Working Party specified in greater detail the goods subject to licensing,and broke down the covered goods into 19 sub-items.  The representative of the Kyrgyz Republicprovided the Working Party, with the fo llowing table listing the covered goods:WT/ACC/SPEC/KGZ/9/Rev.1
Page 32
Table 4:  List of Specific Goods Imported under Licenses
contained in the Draft Regulation on Import/Export Licensing
Goods HS Code Rationale/Justification
1. Ciphering devices
(including cipheringequipment, spare parts
for the  ciphering
equipment, ciphering
programs), normative
and technical documentsto the ciphering devices
(including designing and
exploiting)8471 (ciphering equipment only),
847330000 (for the cipheringequipment only), 854380900
(ciphering equipment only),
854390900 (ciphering equipment
only)To protect the Republic’s
national security
2. Arms and weapons,
specific parts for their
production, works and
services in the area of
military - technological
cooperationby the list of the Ministry of
Defense of the Kyrgyz RepublicTo protect the Republic’s
national security
3. Protection devices from
the battle poisoning
substances, parts and
accessories thereofby the list of the Ministry of
Defense of the Kyrgyz RepublicTo protect the Republic’s
national security
4. Military uniform,
clothing and attributesby the list of the Ministry of
Defense of the Kyrgyz RepublicTo protect the Republic’s
national security
5. Normative and technical
documents to the military
products (construction
and exploitation)by the list of the Ministry of
Defense of the Kyrgyz Republic To protect the Republic’s
national security
6. Gun powder and
explosives, explosive
devices and pyrotechnics3601 (except for the hunting
powder), 3602, 3603, 3604To protect the Republic’s
national security
7. Nuclear materials,
technologies, equipment
and plants, special non -
nuclear materials,
sources for theradioactive radiation,
including radioactive
wasteby the list approved by the
President of the Kyrgyz Republic
(Resolution No. 55, 2 June 1996,
the Government of the Kyrgyz
Republic)To maintain the Republic’s
national security, as well as to
adhere to international
commitments related to non-
proliferation of mass destructionand production technologies
thereofWT/ACC/SPEC/KGZ/9/Rev.1
Page 33
Goods HS Code Rationale/Justification
8. Materials, equipment and
technologies which areintended for peaceful
purposes but can not be
used while creating
weapons for mass
exterminationIn accordance with the list passed
by the President of the KyrgyzRepublic (Resolution No. 55,
2 June 1996, the Government of
the Kyrgyz Republic)To maintain the Republic’s
national security, as well as toadhere to international
commitments related to non-
proliferation of mass destruction
and production technologies
thereof -
9. Certain types of raw
materials, equipment,
technologies and
scientific informationwhich can be applied
while creating weapons
and military techniquesby the list approved by the
President of the Kyrgyz Republic
(Resolution  No. 55, 2 June 1996,
the Government of the KyrgyzRepublic)To maintain the Republic’s
national security, as well as to
adhere to international
commitments related to non-proliferation of mass destruction
and production technologies
thereof
10. Precious metals, alloys,
goods made from them,
metals plated   with
precious metals and
goods made from them;
ores; concentrates; scrapand waste2616 (ores and concentrates),
2843 (metals, junctions,
amalgams), 300640000 (from
precious metals only), 7106-
7112, 711311000, 711319000,
711411000, 711419000,711510100, 711590100,
711590900, 7118 (from precious
metals only), 8544 (only with
conductors from precious
metals), 960810300, 960839100To protect the financial position
and the balance of payments of
the Republic
11. Precious natural stones
and goods from them,
powder and recuperate
of precious naturalstones, goods from them.7101, 7102, 7103 (precious
stones only), 7105 (from precious
stones only), 7116 (from precious
stones only).To protect the financial position
and the balance of payments of
the Republic
12. Narcotics and
psychotropic drugs,
virulent and stupefying
concoctionsby the list of the State
Commission for Drug Control
under the Government of the
Kyrgyz RepublicTo protect the population’s life
and welfare
13. Virulent poisons by the list approved by the
Government of the KyrgyzRepublic (Resolution of the
Government of the Kyrgyz
Republic of 6 February 1996,
No.  55)To protect the population’s life
and welfare, as well as flora andfauna in general
14. Hazardous wastes by the list of the Basil
Convention on the Control over
Trans-border Transportation of
hazardous cargo of 22 March 
1989, approved by Resolution ofthe Parliament of the Kyrgyz
Republic of 18 January 1996,
No. 304-1)To protect the population’s life
and welfare, as well as flora and
fauna in generalWT/ACC/SPEC/KGZ/9/Rev.1
Page 34
Goods HS Code Rationale/Justification
15. Chemical means of
protection of plants3808 (preparations for the plant
protection only)To protect the population’s life
and welfare, as well as flora andfauna in general
16 Pharmaceuticals by the list of the Ministry of
Health of the Kyrgyz RepublicTo protect the population’s life
and health
17. Service and civil guns by the list of the Ministry of
Internal Affairs of the Kyrgyz
RepublicTo maintain public order
18. Tobacco by the list of "Kyrgyztamekisi" To protect the health and life of
the population
19. Spirits and alcoholic
products by the list of the State Joint
Stock Company "Kyrgyzalco"To maintain public order and
protect the health and life of the
population
The import licensing system was required to protect public health and safety, the environment, consumer
welfare and national security.  The licensing procedure was not intended to restrict the quantity or valueof imported goods.   Imports subject to licensing amounted to about 2 per cent of the value of theKyrgyz Republic’s total imports.  Goods subject to import licensing were designated by the Cabinet ofMinisters upon recommendation by interested ministries and government bodies and were not subject toadministrative discretion.
54. The representative of the Kyrgyz Republic further added that to obtain a licence for import (and
also for the export) of alcohol and alcoholic products (except beer, for which there were no import orexport licensing requirements) and importer was required to submit an application for a license and thefollowing documents:  (i)  import or export contract;  (ii)  a copy of the purchase-sale contract if theapplicant does not own the goods;  (iii)  a copy of the certificate of registration;  (iv)  certificate ofcompliance;  (v)  certificate of origin;  (vi)  conclusion of expert-organization;  (vii)  copy of tax-payerregistration card.  There were no quotas connected with the import and export of alcohol or alcoholicproducts.  A licence was required to be issued within ten days of application.  A licence could beobtained after goods had arrived at the border.  For imports of alcoholic beverages,  Kyrgyzalco was thesole agency with responsibility for determination of  the licence application.  Licenses were required to
be granted unless the application for a licence was not complete or the information contained therein wasnot reliable.  Article 8 of the Law on Licensing provided that foreign legal entities or individuals, as wellas individuals without citizenship were entitled to receive licences on the same conditions and pursuantto the same procedures as legal entities and individuals of the Kyrgyz Republic.  Whenever a licenceapplication was refused, reasons for the refusal were required to be provided to the applicant in writing.In the case of a refusal, applicants had a  right of appeal to a Court, per Article 18 of the Law onLicensing of 3 March 1997.WT/ACC/SPEC/KGZ/9/Rev.1
Page 35
55. In response to further questions concerning the procedure for granting of an import licence, he
added that none of the items subject to import licensing were restricted as to the quantity or value ofthose imports.  Licence applications were normally approved in about 1 week.  In urgent cases anapplication could be approved in a shorter time.  Applications for an import licence could only berefused in an application did not meet the stipulated criteria.  The reasons for refusal were required to beprovided in writing to the applicant.  A decision to  refuse to grant a licence could be appealed to the
Ministry which refused the application and further appeal ed to an independent Court.   All persons, firms
and institutions were eligible to apply for an import licence under the system of the Kyrgyz Republic.There was no system of registration of persons or firms permitted to engage in importation.  The licencewas valid for up to six months, or one year in the case of importers having long-term relationships withforeign exporters.  The licence could be renewed for a further period of six months.  There was nopenalty for non-utilization of the licence or a portion of a licence.  The licence was not transferable.The current fee to obtain an import license was som 1000 (approximately US$ 56.00).  He providedmembers of the Working Party with a detailed analysis of the cost of provision of the service recoveredby the fee in Attachment A.IV to document WT/ACC/ KGZ/13.  In his view that fee reflected the cost of
services rendered.
56. Some members of the Working Party asked whether the import licensing would be brought into
conformity with the Agreement on Import Licensing.  In response, the representative of theKyrgyz Republic stated that the Government of the Kyrgyz Republic was in the process of draftingregulations to establish new import licensing procedures in conformity with WTO requirements,including the Agreement on Import Licensing.  A draft regulation on Import/Export Licensing wasprovided to the Working Party.  The regulation would be enacted by the date of accession.
57. The representative of the Kyrgyz Republic confirmed that the Kyrgyz Republic would, from the
date of accession, eliminate and shall not introduce, re-introduce or apply quantitative restrictions onimports or other non-tariff measures such as licensing, quotas, bans, permits, prior authorizationrequirements, licensing requirements and other restrictions having equivalent effect that cannot bejustified under the provisions of the WTO Agreements.  He added that the special import licenses listedin items 10 and 11 of Table 4 were granted automatica lly to all who request them and would not restrict
the right to import these products into the Kyrgyz Re public or in any way discriminate against imported
products.  He further confirmed that the legal authority of the Government of the Kyrgyz Republic tosuspend imports and exports or to apply licensing requirements that could be used to suspend, ban or
otherwise restrict the quantity of trade would be applied from the date of accession in conformity withWT/ACC/SPEC/KGZ/9/Rev.1
Page 36
the requirements of the WTO, in particular Articles XI, XII, XIII, XIX, XX and XXI of the GATT 1994,
and the Multilateral Agreements on Agriculture, Sanitary and Phytosanitary Measures, Import LicensingProcedures, Safeguards and Technical Barriers to Trade.  The Working Party took note of thesecommitments.
- Customs valuation
58. In response to requests for information concerning the customs valuation system, the
representative of the Kyrgyz Republic stated that the Customs Code put into effect on 1 October 1997provides for six methods to determine the custom s value according to the WTO Customs Valuation
Agreement.  He further added that the Kyrgyz Republic did not have any import reference prices in placeand any such measures would not be reintroduced after accession, except in accordance with WTOAgreements.
59. The representative of the Kyrgyz Republic also stated that the rules to determine the customs
value contained in the Customs Code which came into force on 1 October 1997 were largely incompliance with the WTO requirements.  Amendments and corrections would be made to the newCustoms Code by the Law of the Kyrgyz Republic "On Changes and Amendments to the Customs Codeof the Kyrgyz Republic" which would be adopted by the date of accession, and would bring the CustomsCode valuation rules into full conformity with the WTO.  The Working Party took note of these
commitments.
60. The representative of the Kyrgyz Republic indicated that the Kyrgyz Republic would fully apply
the WTO provisions concerning customs valuation from the date of accession, including, in addition tothe Agreement on the Implementation of Article VII of the GATT 1994, the provisions for the Valuation
of Carrier Media Bearing Software for Data Processing Equipment and the provisions on the Treatmentof Interest Charges in Customs Value of Imported Goods.  He further confirmed that, as an internationalagreement, the provisions of the WTO Agreemen t on the Implementation of Article VII of the
GATT 1994 would supersede domestic law after acces sion.  The Working Party took note of this
commitment.WT/ACC/SPEC/KGZ/9/Rev.1
Page 37
- Rules of origin
61. In response to questions from some members of the Working Party, the representative of the
Kyrgyz Republic stated that the Kyrgyz Republic had no country of origin marking requirement.  Acertificate of origin certified by an authorized governmental body in the country of origin was requiredfor all imported goods.  Pursuant to the Customs Code, origin was determined by methods specified inthe Kyoto Convention Annex.  Once the Customs Code  was passed by Parliament, the Kyrgyz Republic
would require time to develop implementing regulations on the determination of origin. It was envisagedthat the primary method used would be the tariff shift method.  The Customs Code did not define the listof operations that would be considered as sufficient to confer origin.  No other specific implementingregulations or rules had been developed.  He also added that the Kyrgyz Republic intended to adopt therules of origin that were being developed in the WTO.
62. In response to further requests for information on the customs origin provisions of the Customs
Code, the representative of the Kyrgyz Republic stat ed that Chapter 55 of the Customs Code provided
for issuance of preliminary decisions on various issues including the country of origin. Assessmentsremained effective for three years.  Implementing instructions describing the process in detail would bedeveloped at a later stage.  Chapters 58, 59 and 60 of the Customs Code provided that administrativeactions taken by customs bodies could be appealed.  The Customs Code also provided that goods that arewholly produced in a country are considered as orig inating in that country.  A list of wholly produced
goods was adopted from the Kyoto Convention Annex.  The Customs Code provided for three methodsof determining origin as specified in the Kyoto C onvention Annex.  However, the tariff shift method of
determining origin was, at present, the only method in use.  There were no regulations implementing thead valorem  or specific manufacturing or processing methods.
63. The representative of the Kyrgyz Republic confirmed that the Kyrgyz Republic would remedy
any departures from full conformity with the WTO Agreement on Rules of Origin prior to its accession,and that by that time, the Kyrgyz Republic's application of rules of origin for both MFN and preferentialtrade would be administered in conformity with the provisions of the Agreement.  The Kyrgyz Republicwould adopt the Harmonized Rules of Origin once finalized by the WTO in co-operation with the WorldCustoms Organization.  The Working Party took note of this commitment.WT/ACC/SPEC/KGZ/9/Rev.1
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- Pre-shipment inspection
64. In response to questions, the representative of the Kyrgyz Republic stated that the
Kyrgyz Republic had no plans to introduce any preshipment inspection requirements; however, if suchrequirements were introduced, they would be consistent with the requirements of the Agreement onPreshipment Inspection.  The Working Party took note of this commitment.
- Anti-dumping, countervailing and safeguards
65. Some members of the Working Party expressed concern that both the current Customs Tariff
Law in force and the proposed law departed from WTO rules on imposition of anti-dumping duties inseveral respects.  These members requested that the legislation be amended so as to be WTO-consistentfrom the date of the Kyrgyz Republic's accession to the WTO.   In response, the representative of theKyrgyz Republic stated that dumping, countervailing, and safeguard measures would be governed bynew laws currently being drafted in conformity with respective WTO agreements.  Draft laws ondumping, countervailing, and safeguard measures were submitted in October 1997 to the Working Party.
66. Some members of the Working Party requested that the Government of the Kyrgyz Republic
undertake a commitment that any anti-dumping, count ervailing or safeguards measures would only be
taken pursuant to legislation in conformity with the WTO Agreement on Subsidies and CountervailingMeasures, the Agreement on Interpretation of Article VI of the GATT 1994, and the Agreement onSafeguards.
67. The representative of the Kyrgyz Republic stated that the Laws on Anti-Dumping, Safeguards
and on Subsidies and Countervailing Measures would be adopted in October 1998.  Any legislation inplace at the time of accession or implemented in the future providing for the application of measurestaken for anti-dumping, countervailing duty, or safeguard purposes would conform to the provisions ofthe WTO Agreements of Anti-Dumping, on Subsidie s and Countervailing Measures, and on Safeguards.
In the absence of such legislative authority in place at the time of accession, the Kyrgyz Republic wouldnot apply measures for anti-dumping, countervailing duty, of safeguard purposes until legislation in
conformity with the provisions of these WTO Agreements had been implemented.  The Working Partytook note of these commitments.WT/ACC/SPEC/KGZ/9/Rev.1
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- Export Regulation
- Customs tariffs, fees and charges and internal taxes applied to exports
68. In response to requests for information the representative of the Kyrgyz Republic stated that
there were no export duties;  although like all CIS countries - a VAT was charged on exports destined forother CIS countries. The importing CIS country was required to grant the person who first sold the gooda VAT credit in the amount of the VAT paid to the Kyrgyz Republic.  VAT does not apply on exports tonon-CIS countries.
- Export restrictions
69. The representative of the Kyrgyz Republic stated that with the exception of quantitative
restrictions specified in an Agreement with the European Communities on Textiles, the Kyrgyz Republicmaintained no quantitative export restrictions, nor prohibitions on exports.
- Export licensing
70. The representative of the Kyrgyz Republic info rmed members of the Working Party that export
licences were required for the export of military arms and goods;  explosives;  nuclear materials andtechnology for military use;  virulent poisons;  narcotics (including those used in pharmaceuticals) andpsychotropic substances;  works of art and antiquities having historical, cultural or scientific value;ferrous, precious and rare-earth metals extracted and produced in the Kyrgyz Republic and theirfragments;  and rare types of raw materials of vegetable or animal origin having pharmacologicalapplications.  Except for non-ferrous metal fragments and waste, the licensing requirement was notintended to restrict the quantity or value of the exports of these goods, but rather to protect public health,consumer welfare, the environment, national patrimony and national security.  He further noted thatlicensing was mandatory for textile exports to the European Communities.
71. In response to requests for more information concerning the requirement to obtain a licence for
the exportation of ferrous, precious and rare-earth metals extracted and/or processed in theKyrgyz Republic, the representative of the Kyrgyz Republic stated that any manufacturing/mining entityor intermediary entity (regardless of form or owners hip) was eligible to apply for such a licence.  The
licence application was required to be submitted to the Ministry of Industry and Trade. When applyingfor an export licence, an applicant must submit:  (i) an application on a standard form;  (ii) a copy of theexport contract;  (iii) a copy of the applicable bilateral agreement on deliveries, if any;  and (iv) a shortWT/ACC/SPEC/KGZ/9/Rev.1
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description of how the transaction benefits the Kyrgyz Republic.  The licence was required to be granted
within 20 days of the receipt of the complete application. The licence was non-transferable.  Once thelicence was granted, the recipient must provide it to the  State Customs Inspectorate together with acustoms declaration.  A "single shipment" licence must be used within six months from the date ofissuance. A "multiple shipment" licence must be used within 12 months.
72. The representative of the Kyrgyz Republic stated that the following non-ferrous metal and
wastes and scrap thereof, and HS tariff number,  were subject to export licensing:
7404 Copper wastes and scrap
7503 Nickel wastes and scrap7802 Lead wastes and scrap7602 Aluminum wastes and scrap9702 Zinc wastes and scrap8002 Tin wastes and scrap8101 Wolfram and articles thereof, including wastes and scrap
2611 Tungsten ores and concentrates
8102 Molybdenum and articles thereof, including wastes and scrap2613 Molybdenum ores and concentrates8103 Tantalum wastes and scrap8104 Magnum wastes and scrap8105 Cobalt wastes and scrap8106 Bismuth wastes and scrap8107 Cadmium wastes and scrap8108 Titanium wastes and scrap 8109 Zirconium wastes and scrap8110 Antimony and articles thereof, including wastes and scrap2617 Antimony concentrates
2825 Antimony oxides
8111 Manganese wastes and scrap8112 Rhenium and articles thereof, including wastes and scrap8112 Chrome, germanium, vanadium, beryllium and niobium wastes
and scrap
73. Some members of the Working Party requested information on Cabinet of Ministers Resolution
No. 56 of 6 February 1996.  They noted that the resolution provided for licensing requirements andcontrols on exports, including  textile goods, wearing apparel, silicon carbide, ammonium nitrate, andraw aluminum, required by bilateral agreements between the Russian Federation and theEuropean Communities, and for general exports of precious stones, precious metals, articles containingprecious metals, and precious metal waste.  The representative of the Kyrgyz Republic stated that theWT/ACC/SPEC/KGZ/9/Rev.1
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restrictions set out in that draft Resolution would co me into force only if the Kyrgyz Republic became a
member of the Customs Union.  The goal of the draft legislation would be to protect electrictransmission and communication lines and ferrous and non-ferrous metal items from theft by personsdesiring to resell those metals to scrap metal proces sing firms.  In the view of the Government of the
Kyrgyz Republic, the measures were justifiable on national security grounds.
74. In response to further questions concerning the reason for the requirement to obtain export
licences for exports of non-ferrous metal and wastes and scrap thereof, the representative of theKyrgyz Republic stated that when an application for an export licence was received, theKyrgyz Republic reviewed the prices of the products to be exported.  While the export licences were notrefused on the basis of low prices, recommendations were made to the applicant to ensure that priceswere comparable to world market prices.  He confirmed that no sanctions were imposed on exporterswho continue to export these products that were considered to be below world market prices. The
Kyrgyz Government did not consider the export of thes e products at low prices in its decision to grant or
renew an enterprise's licence to purchase or sell fragments and waste of non-ferrous and ferrous metals.
75. The representative of the Kyrgyz Republic stated that the Kyrgyz Republic would ensure that its
system of export licensing was in conformity with the requirements of Article XI of the GATT 1994 asfrom the date of accession.  The Working Party took note of this commitment.
- Export subsidies
76. In response to questions, the representative of the Kyrgyz Republic stated that the
Kyrgyz Republic had no policies or measures to finance exports.  Certain limited export promotionprogrammes were maintained.  The Kyrgyz Republic imposed no export performance requirements.Drawback on goods imported for completion, assembly, or processing for re-export must be claimedwithin a time limit set by the SCI and the processed goods must be exported within two years after the
importation of the concerned items.   He further added that the Customs Code also exempted from dutiesand taxes goods re-exported within six months of importation.  If the goods were not re-exported withinsix months, customs duties, taxes and interest were collected on the goods.
77. Some Working Party members noted that the 1991 Foreign Investment Law granted profit tax
exemptions for Kyrgyz legal entities for two to five years based on foreign participation, depending onthe nature of its activity.  After the expiration of the profits tax exemption, varying reductions in the
applicable profits tax are provided for under certain circumstances, including a 25 per cent reduction if atleast 50 per cent of the entity's production is export ed.  In addition, the Directorate of the Bishkek FreeWT/ACC/SPEC/KGZ/9/Rev.1
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Economic Zone (Information Bulletin No. 2) provides exemptions from lease payments for up to
15 years for establishments which (i)  are engaged in export-oriented and import substitution productionactivities;  (ii)  use domestic raw materials and spare parts;  and (iii)  employ a certain number of peopleper year.  In addition, export-oriented production is exempt from quantitative restrictions.  SomeWorking Party members sought a commitment from the Kyrgyz Republic to eliminate these measures,which constituted prohibited subsidies within the meaning of Article 3 of the WTO Agreement onSubsidies and Countervailing Duties.
78. In response to further questions, the representative of the Kyrgyz Republic stated that certain
lease payment provisions of the Bishkek Free Economic Zone were concerned with import substitution.The representative of the Kyrgyz Republic stated that the source of input for production purpose was notrestricted.  An enterprise (i) was not prohibited or limited in its ability to import products used in orrelated to its local production and (ii) was not required to use local products as input for its production.Some members of the Working Party stated that the tax incentives based on export performanceprovided by Article 24 of the previous Foreign Inve stment Law of June 1991 should be eliminated prior
to accession to the WTO.  In response, the represen tative of the Kyrgyz Republic stated that the new
Foreign Investment Law of September 1997 does not provide any tax incentives.  He confirmed that hisGovernment did not intend to apply any export subsidies to industrial goods.  He added that those taxincentives based on export performance were currently used by foreign firms under a previous foreigninvestment law.  It was foreseen that those incentiv es would continue to apply until the expiration of the
term of their validity.  Any attempt at this point to terminate such incentives prior to the term of their
validity would cause significant problems to existing foreign investors.
79. The representative of the Kyrgyz Republic stated that the lease payment exemption for export-
oriented and import substitution production which could be considered to conflict with the requirementsof the Agreement on Subsidies and Countervailing Measures would be eliminated upon accession to theWTO.   He further stated that the Regulations On the Amendments to Certain Decisions of theGovernment would be in conformity with the re quirements of the Agreement on Subsidies and
Countervailing Measures and would be adopted by the date of accession.  The Working Party took noteof these commitments.
80. The representative of the Kyrgyz Republic stated  that his Government would eliminate, by the
date of accession, all measures which meet the definition of a prohibited subsidy, within the meaning ofArticle 3 of the Agreement on Subsidies and Countervailing Measures, [including those subsidiesdiscussed in paragraphs 77 and 78 covered under  the Foreign Investment Law of 1991 and the
Regulations on the Amendments to Certain Decisions of the Government as and would terminate by theWT/ACC/SPEC/KGZ/9/Rev.1
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date of accession any incentives [previously granted] under these [and prior] laws].  The Working Party
took note of these commitments.
- Internal Policies Affecting Trade in Goods
- Industrial policy, including subsidies
[81. In response to requests for information, the representative of the Kyrgyz Republic stated that the
Government had a general policy to create a broad-based market economy and to privatize allgovernment-owned commercial enterprises and assets.  The Government also had a general policy toattract foreign investment into the country and to  involve, as far as possible, foreign investors,
technology and know-how in all sectors of the economy for the purpose of furthering the creation of abroad-based market economy and the privatization of government-owned commercial enterprises andassets.   The Government did not intend to maintain any policies which would distort trade;  nor protectany industry, market or business entity.]
82. Some members of the Working Party asked whether the Kyrgyz Republic would maintain
subsidies prohibited by Article 3 of the Subsidies and Countervailing Measures Agreement upon itsaccession to the WTO and whether it would have recourse to Article 29 of the same Agreement to justifysuch subsidies.  In response, the representative of the Kyrgyz Republic stated that, excepting othersubsidies described above, the only subsidies had been certain tax exemptions provided by the ForeignInvestment Law of 1991.  The new foreign investment  law which eliminated tax exemptions based on
export performance had been adopted in September 1997.
- Technical Barriers to Trade
83. In response to requests for information, the representative of the Kyrgyz Republic stated that
standards and certification requirements in the Kyrgyz Republic were not intended to distort or establishtechnical barriers or to disrupt trade.  The object of such standards and certification requirements were to
(i) ensure the safety and/or quality of goods, works and services, (ii) to protect the environment and thehealth, life, work and property of citizens, (iii) to ensure uniformity of measurement and the technicalcompatibility and interchangeability of products;  and (iv) to preserve all types of resources.  Bothdomestic-origin and foreign-origin goods were equally subject to the same requirements on standardsand certification.    Importers of goods subject  to obligatory certification of conformity with nationalsafety requirements and other technical requirements were required to present a certificate at the borderWT/ACC/SPEC/KGZ/9/Rev.1
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stating that the goods met the applicable requirements, along with the import declaration and other
supporting documents.  If an international agreement to which the Kyrgyz Republic is a party providesfor other rules other than those stipulated by the legislation of the Kyrgyz Republic on standardizationthen the rules of the international agreement would prevail.
84. The representative of the Kyrgyz Republic added that the State Directorate on Standardization
and Metrology under the Cabinet of Ministers (Kyrgyzstandard) was the agency responsible fordeveloping, realizing and administering the Kyrgyz Republic’s policy on technical regulations, standardsand certification requirements.  The Cabinet of Ministers Resolution No. 260 of 28 April 1994, asamended by Resolution No.146 of 5 April 1996, listed seven general product categories that requirecertification prior to sale, without regard to the origin of the concerned products. For health-relatedproducts, sanitary/hygiene test results  were used as the basis for granting the certificate of compliance.Kyrgyzstandard was responsible for accrediting certification and testing bodies.  As of 1 January 1998,there were 11 accredited certifying bodies and 19 accredited testing laboratories in the Kyrgyz Republic.In addition, the four regional branches of Kyrgyzstandard were also authorized to conduct certificationprocedures.  In accordance with the Agreement On a Uniform Policy on Standardization, Metrology andCertification, which was executed by all CIS countries, Kyrgyzstandard now accepted certificates issuedby any accredited institution of Armenia, Azerbaijan, Belarus, Georgia, Kazakstan, Moldova, theRussian Federation, Tajikistan, Turkmenistan and Uzbekistan.  He further added that it was possible forforeign companies to be accredited as certification bodies or testing laboratories by Kyrgyzstandard;however, no such companies had yet applied. The requirements for accreditation and the procedures tobe followed were the same for both domestic and foreign certification bodies.    In response to requestsfor further information, the representative of the Kyrgyz Republic stated that the Law "On Protection ofConsumers’ Rights", set mandatory requirements for products which posed a substantial potential threatto the environment or the safety, lives and/or health of citizens.  Kyrgyzstandard would issue a certificateof compliance and a licence to mark the concerned goods with a "mark of compliance.”  Sale or importof such goods in the Kyrgyz Republic without such prior certification and marking was prohibited.Goods imported for personal use did not require certification.  Other requirements (indications) werevoluntary.  Goods subject to voluntary certification could be certified on the basis of an agreementbetween the applicant and Kyrgyzstandard.  Voluntar y certification could also be performed by any body
authorized by Kyrgyzstandard to do so.  The method of voluntary certification was chosen by theapplicant from those accepted by Kyrgyzstandard.   In response to requests for information on theprocess for obtaining a certificate and mark of compliance the representative of the Kyrgyz Republicstated that the issuance of a certificate and mark of compliance required:  (i) the filing of an applicationwith the responsible ministry or State body;  (ii) a review of the application,  including the choice of
certification method;  (iii) the identification and selection of samples and their testing;  (iv) a review ofthe test results and a comparison with the applicable standards;  and (v) the issuance of a certificate ofWT/ACC/SPEC/KGZ/9/Rev.1
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compliance and a licence to use the mark of compliance.  It was generally possible for the certifying
body to accept the declaration of a manufacturer or producer, but the acceptance of a declaration wassubject to the discretion of the Ministry or State body responsible for certifying the compliance of thegoods.  Pursuant to document KMS40.03-97 "System of Certification Kyrg. St. Procedure forCertification of Products", the certifying body woul d accept manufacturers' declarations of compliance.
85. In response to requests for information on the bringing of standards used in the Kyrgyz Republic
into compliance generally accepted international sta ndards, the representative of the Kyrgyz Republic
stated that Kyrgyzstandard was currently a corresponding member of the International StandardsOrganization (ISO).  The Kyrgyz Republic was in the process of moving from the use of GOST-standards to the use of international standards.  The Kyrgyz Republic was a member of the CIS Inter-Governmental Council on Standardization, Metrology and Certification, which was recognized by ISOas a regional organization moving towards eventual implementation and usage of international standards.A timetable for the change-over had not been finalised.  The Kyrgyz Republic had also adopted over 120standards of the International Electrotechnical Commission (IEC).  The acceptance of certificates issuedby foreign certification bodies was generally dependent on the existence of a bilateral or multilateralagreement on the matter.  The Government was currently in the process of negotiating bilateralagreements on standards with Austria, the People’s Republic of China, Germany, India, Iran and Turkey.
86. The representative of the Kyrgyz Republic further added that accreditation of a certification and
testing organization was performed by Kyrgyzstandard and other State bodies authorized to conductmandatory certification within their area of competence (for example, the Kyrgyz Ministry ofConstruction and Architecture was responsible for certifying the compliance of construction materials).An applicant must provide Kyrgyzstandard with its organizational documents, the desired scope ofaccreditation, a brief description of its legal status, as well as a description of its organizational structure.An organization applying for an accreditation must:  (i) be independent and unbiased; and (ii) besufficiently competent, i.e. possess sufficient means, qualified professionals, etc.
87. In response to requests for information on the fee structure for certificates, the representative of
the Kyrgyz Republic stated that the Kyrgyz Republic had conducted a detailed assessment of all feesconnected with issuance of certificates (including the certificate of compliance, certificate of origin,phytosanitary certificate, and veterinary certificate) to determine whether or not such fees were inconformity with the WTO requirements, especially Article VIII of the GATT 1994.  He provideddetailed analysis supporting the following report:WT/ACC/SPEC/KGZ/9/Rev.1
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- Phytosanitary Certificate:  the current costs of issuing a Phytosanitary Certificate (minimum fee
som 70, maximum fee som 223) exceeded the fee currently charged (minimum fee som 36,
maximum fee som 265) for such a certificate.  Accordingly, the Kyrgyz Republic consideredthat the current fee structure was in full conformity with Article VIII.  In response to requests bysome members of the Working Party, the Kyrgyz Republic provided the list of goods (using HSCode) subject to Phytosanitary Certificates along with the fees charged for each category.  Thiscertificate was issued by the Ministry of Agriculture;
- Veterinary Certificate:  the currents costs of issuing the Veterinary Certificate (minimum
fee som 250, maximum som 3,272) exceeded the fee currently charged (minimum fee som 30,
maximum fee som 500) for such a certificate.  Accordingly, the Kyrgyz Republic consideredthat the current fee structure was in full conformity with Article VIII.  In response to requests bymembers of the Working Party, the Kyrgyz Republic provided the list of goods (using HS Code)subject to Veterinary Certificates.  This certificate was issued by the Ministry of Agriculture;
- Certificate of Origin:  currently the following fees are charged for obtaining the certificate of
origin:  (a)  CIS countries - som 100 for natural persons and som 300 for legal entities;  and (b)
non-CIS countries - som 200 for natural persons and som 400 for legal entities.  The KyrgyzRepublic recognized that the fee structure was in violation of Article I and Article VIII of theGATT 1994.  The representative of the Kyrgyz Republic stated that, as of the date of accessionto the WTO, the fee for issuing the certificat e of origin would be som 160 (reflecting the
approximate cost of issuing a certificate of origin) for all legal and natural persons in conformitywith Article I of the GATT 1994.  This certificate was issued by the Chamber of Commerce andIndustry;
- Certificate of Compliance:  the current cost for the Certificate of Compliance ranges from
approximately US$50 to US$1,390 depending on the ty pe of products and required tests.  The
representative of the Kyrgyz Republic provided detailed information of various schemes fortesting and the cost of using different schemes.  The Kyrgyz Republic considered that the currentcost of issuing the Certificate of Compliance was in conformity with Article VIII of theGATT 1994 and reflected the cost of services rendered.  In response to requests by someWorking Party members, the Kyrgyz Republic provided a list (using HS Code) of all goodsrequiring a Certificate of Compliance);WT/ACC/SPEC/KGZ/9/Rev.1
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[- Import Export licensing:  the current fee for issuing import/export licensing is som 1,000
(approximately US$56).  Analysis showed that such  a fee reflected the cost of services rendered
and was in conformity with Article VIII of the GATT 1994.]
88. Some members of the Working Party asked whether any difficulties were foreseen in the
application of the Agreement on Technical Barriers to Trade upon accession.  In response, therepresentative of the Kyrgyz Republic stated that the Kyrgyz Republic does not foresee difficulties in the
application of the TBT Agreement.  He noted that, at present, draft standards, technical regulations, andconformity assessment procedures were not publis hed for public comment.  There were at present no
formal notice requirements, although within the CIS, regulations have been developed that operate likenotice provisions.  The Law on Standardization and th e Law on Certification was being amended to meet
the TBT requirements for publication of draft standards and technical regulations. Kyrgyzstandardpublished a quarterly periodical entitled the Information Bulletin of Kyrgyzstandard where such noticeswill be published.  Under Resolution No. 12  of 6 January 1997 the Cabinet of Ministers of the KyrgyzRepublic officially established the Information Centre of the State Inspectorate on Standardization andMetrology (Kyrgyzstandard) as the Inquiry Point for standards and sanitary and phytosanitary measuresin the Kyrgyz Republic.  This Inquiry Point met WTO requirements, it contained all adopted andproposed standards and conformity assessment procedures and information concerning the membershipand participation of the Kyrgyz Republic in regional and international standardizing bodies as well as inbilateral and multilateral arrangements.  The Inquiry Point received questions and sends responses bytelephone, mail, fax and e-mail.  Kyrgyzstandard had hired employees, fluent in Russian and English,who would receive and transmit information in Engl ish.  To the extent that resources will allow,
Kyrgyzstandard will participate in international standards activities.  The Kyrgyz Republic was a
corresponding member of the ISO.  It was also a member of the CIS Inter-Governmental Council on
Standardization, Metrology and Certification.  This body was recognized by the ISO as a regionalorganization moving towards the eventual implementation and usage of international standards.
89. The representative of the Kyrgyz Republic stated that the Law on Making Amendments and
Supplements to the Law of the Kyrgyz Republic on Standardization which would be fully consistentwith the WTO Agreement on Technical Barriers to Trade would be adopted in May 1998.   The WorkingParty took note of this commitment.
90. The representative of the Kyrgyz Republic st ated that his Government would apply the WTO
Agreement on Technical Barriers to Trade from the date of accession without recourse to any transitionperiod.  He further confirmed that, in particular, the Kyrgyz Republic would apply the same controls,WT/ACC/SPEC/KGZ/9/Rev.1
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criteria, and rules regarding technical regulations, standards, certification, and labelling requirements to
imported and domestic goods, and would not use such regulations to restrict imports.  The KyrgyzRepublic would ensure that its technical regulations, standards, certification and labelling requirementsare not applied to imports in an arbitrary manner, in a way that discriminates between supplier countrieswhere the same conditions apply or as a disguised restriction on international trade, and would also
ensure that from the date of accession its criteria for granting licenses or securing required certificationfor imported products will be published and available to traders, and that its sanitary and othercertification requirements are administered in a transparent and expeditious manner.  The KyrgyzRepublic would be willing to consult with WTO Members concerning the effect of these requirementson their trade with a view to resolving specific problems.  The Working Party took note of these
commitments.
- Sanitary and phytosanitary measures
91. The representative of the Kyrgyz Republic stated that it was the policy of the Government to
develop and maintain sanitary standards solely for the purpose of  protecting the health of human, animaland plant life and not for the purpose of creating technical barriers to foreign products or for protectingdomestic producers.  Development of sanitary standards was the responsibility of several technicalcommittees in cooperation with the Ministry of Health. The consent of the Ministry of Health wasrequired before Kyrgyzstandard could issue any standard constituting a sanitary measure.  He furtherexplained that Cabinet of Ministers Resolution No. 260 of 28 April 1994, as amended by ResolutionNo. 146 of 5 April 1996, listed seven general product categories that require certification prior to sale,without regard to the origin of the concerned products. All covered products required certification ofsafety indicators, sanitary and environmental reasons.  For health-related products, sanitary/hygiene testresults were used as the basis for granting the certificate of compliance.  Product categories subject tosanitary measures were included in this list.  Any  accredited certification body could certify a product asbeing in conformity with the applicable sanitary re quirements if the required sanitary/hygiene tests had
been performed by a competent testing laboratory and the required test results obtained.  He provided theWorking Party with a list of goods subject to phyt osanitary and veterinary certificates together with
corresponding fees in document WT/ACC/KGZ/16.WT/ACC/SPEC/KGZ/9/Rev.1
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92. The representative of the Kyrgyz Republic further added that importers of goods subject to
sanitary and/or phytosanitary measures were required to present a certificate at the border stating that the
goods met the applicable requirements, along with the import declaration and other supportingdocuments.  If the container or packaging was damaged, or was not accompanied by the requireddocumentation, the product could not be cleared through customs.
93. Some members of the Working Party requested information on whether the Kyrgyz Republic’s
procedures for adopting trade measures relating to concerns with human, animal and plant health were in
conformity with the requirements of the SPS Agreement.  In response, the representative of theKyrgyz Republic stated that the appropriate ministries and State bodies (particularly, the Ministry ofHealth, the Ministry of Agriculture and Food, the Ministry of Environmental Protection, and theVeterinary-Sanitary Supervisory Office) had reviewed the provisions of the SPS Agreement and hadbrought [in order to bring] their respective procedures into conformity with the SPS Agreement.   Theamendments to the Law on Veterinary and the Law on Plant Quarantine necessary to implement theprovisions of the SPS Agreement were provided to the Working Party.
94. Some members of the Working Party asked whether proposals for SPS measures were published
in advance, and whether there was an opportunity for public comment by interested parties, both
domestic and foreign.  They also asked whether there was a requirement to conduct risk assessmentsprior to the adoption of SPS measures, including a requirement that such measures be based on scientificevidence.  In response, the representative of the Kyrgyz Republic said that the draft Amendments to theLaw on Plant Quarantine and the Law on Veterinary provide that notifications on draft developedphytosanitary measures significantly affecting trade,  if not substantially the same as international
standards, guidelines and recommendations, or if international standards, guidelines and
recommendations do not exist, shall be published at an early stage in such a manner as to enableinterested parties to make their comments and suggestio ns.  He also stated that draft amendments to the
Law on Plant Quarantine and the Law on Veterinary require that risk assessments be employed and thatSPS measures be based on scientific evidence.
95. Some members of the Working Party asked whether the sanitary and phytosanitary standards in
the Kyrgyz Republic were in conformity with international standards, in particular those developed bythe Codex Alimentarius Commission, the International Office of Epizootics, and the international andregional organizations operating within the framewor k of the International Plant Protection Convention.
In response, the representative of the Kyrgyz Republic stated that the appropriate ministries and Statebodies (particularly, the Ministry of Health, the Ministry of Agriculture and Food, the Ministry ofWT/ACC/SPEC/KGZ/9/Rev.1
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Environmental Protection, and the Veterinary-Sanitary Supervisory Office) had been conducting
comparisons of their standards with international standards through the Eurasian Organization onStandardization, and were engaged in the necessary work to ensure the harmonization of their standardsin conformity with the SPS Agreement.  The Kyrgyz Republic would report annually progress in thework on harmonization.
96. Some members of the Working Party expressed concern that Cabinet of Ministers Resolution
No. 260 required that safety certificates be obtained for imports of "agricultural and food industryproducts".  They requested details of the scientific evidence or risk assessments upon which ResolutionNo. 260 was based.  In response, the representative of the Kyrgyz Republic stated that ResolutionNo. 260 was based on the evaluation of the possibility of entry of pests and diseases and potentialbiological consequences. Certification requirements for items listed in Resolution No. 260 were based onscientific studies and were imposed only to the extent necessary to protect human life and health and theenvironment.
97. The representative of the Kyrgyz Republic stated that the Kyrgyz Republic would apply the SPS
Agreement in full upon accession.  He noted that the Law On Amendments to the Law on Veterinary andthe Amendments to the Law on Plant Quarantine which were fully consistent with the SPS Agreementand were adopted in May 1998.
98. The representative of the Kyrgyz Republic stated that from the date of accession to the WTO his
Government would apply all its sanitary requirements consistently with the requirements of the WTOAgreements on Sanitary and Phytosanitary Measures and Import Licensing Procedures [without recourseto any transitional arrangements].  [In particular, he stated that if a decision was taken to requirenotification of diseases other than those listed in OIE Classes A and B, any such decision would be taken
in conformity with the requirements of the Agreement on Sanitary and Phytosanitary Measures.]  Headded that the Kyrgyz Republic [had a system to r ecognize certificates of compliance issued by the
accredited certifying bodies pursuant to treaties concluded with countries who are trading partners of theKyrgyz Republic.  In the absence of such treaties it is allowed to recognize certificates of compliance or
certificates of quality of internationally known firms and organizations.  However, controlling testingmay be conducted in cases where the documentation submitted is analyzed and found to be inadequateand where upon inspection of the products in question it is discovered that the required transportationand storage conditions have been violated, and] [would not require additional certification or sanitaryregistration for products which have been certified as safe for human use and consumption by recognizedforeign or international bodies, and] the Kyrgyz Republic would ensure that from the date of accessionWT/ACC/SPEC/KGZ/9/Rev.1
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its criteria for granting prior authorization or securing the required certification for imported products
would be published and available to traders.  He confirmed that sanitary and other certificationrequirements in the Kyrgyz Republic were administered in a transparent and expeditious manner, andthat his Government would be willing to consult with WTO Members concerning the effect of theserequirements on their trade with a view to resolving specific problems.  The Working Party took note ofthese commitments.
- Trade Related Investment Measures (TRIMs)
99. Some members of the Working Party noted that bids to purchase State owned assets were scored
according to a number of factors,  Included among the factors considered was the commitment by thebidder "to maintain certain employment levels".  They asked whether this requirement was inconsistentwith obligations in the TRIMs Agreement   In response, the representative of the Kyrgyz Republic statedthat giving weight to a bidder’s willingness to make a commitment to maintain a certain employment
level did not contradict the TRIMs Agreement.  There was no trade-related aspect imposed by the Stateon the buyer in connection with this commitment.  The State was currently the major stock-holder inthese entities, and in that role could require a potential purchaser to maintain certain employment levels.Furthermore, a requirement to maintain employment levels did not mean that a buyer was required to useonly local labour.  The requirement was imposed on the buyer for the purpose of avoiding de-stabilizingsimultaneous mass lay-offs during an initial period of transition and mass privatization.  Thisrequirement was phased out within a limited time after the transaction. In his view nothing in thearrangements violated the TRIMs Agreement.
[100. Following questions in relation to the compatibility of certain aspects of the Bishkek Free
Economic Zone with the requirements of the TRIMs Agreement, the representative of theKyrgyz Republic stated that the lease payment which required the employment of a certain number ofpeople per year was not TRIMs inconsistent, because the TRIMs Agreement referred only to products.The lease payment conditioned on use of domestic raw materials and spare parts could be TRIMsinconsistent and would be eliminated upon accession to the WTO.  The Kyrgyz Republic would adoptregulations eliminating all WTO-inconsistent measures in connection with the free economic zones.]
101. The representative of the Kyrgyz Republic stated that the Amendments to the Regulations on
Free Economic Zones which would be in conformity  with the requirements of the TRIMs Agreement
would be adopted by the date of accession to the WTO, and that the Kyrgyz Republic would ensure thatthe operation of the free economic zones would be WTO-consistent after accession.  The Working Partytook note of these commitments.WT/ACC/SPEC/KGZ/9/Rev.1
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102. The representative of the Kyrgyz Republic stated that from the date of accession, the Kyrgyz
Government would not maintain measures that were not in conformity with the Agreement on Trade-
Related Investment Measures.  The Working Party took note of this commitment.
- State-trading practices
103. Some members of the Working Party noted that the Kyrgyz Republic had earlier described
enterprises that enjoyed  natural monopolies.  They asked whether the trade activities of those enterprises
were State-trading in terms Article XVII of the GATT 1994 of Article VIII of the GATS.  In response,
the representative of the Kyrgyz Republic stated that the Government of the Kyrgyz Republic was
reviewing the operations, legal status and privileges of the listed natural monopolies to determinewhether they should be notified as State-trading entities within the meaning of Article VIII of the GATSor Article XVII of the GATT.  If the Government determ ines that an entity fell within the definition of a
State-trading enterprise, that entity would be notified as such to the WTO.  At present, the Governmentwas examining the following enterprises:
- Management Department of Kyrgyzrailroad (intra-republic passenger and goods transportation);- Ministry of Communication (telecommunication services rendered to public);
- Kyrgyz Energy Holding Company (electric power and thermal energy);- "Kyrgyzgas" (natural and liquefied natural gas);
- "Kyrgyzjilkommunsojuz" (thermal energy, water-pipe water and sewage);
- "Kyrgyzalco" (alcohol and alcohol products, other than beer); and- "Kyrgyztamekesi" (tobacco fermentation, manufacture of tobacco products, sale of fermented
tobacco).
He further added that Kyrgyzpharmacia had no role whatsoever in the issuance of licenses and,
therefore, would not be notified as a State trading company.  Later, the representative of theKyrgyz Republic stated that further examination of the State trading sector had revealed that State
trading monopolies currently existed in the alcohol, tobacco, and electrical energy sectors: Kyrgyzalco
(de jure ), Kyrgyztamekesi ( de jure ), and Kyrgyz Energy Holding (de facto).  In response, some members
of the Working Party stated that Kyrgyzaltyn should also be notified as a state trading enterprise,because since 1994, that fully State owned enterprise had been the only producer, importer, or exporterof antimony.  In response, the representative of the Kyrgyz Republic stated that although Kyrgyzaltynhad been the only, de facto, producer, importer, and exporter of antimony, the Kyrgyz Republic did notWT/ACC/SPEC/KGZ/9/Rev.1
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believe that this company fell under the definition of Article XVII of the GATT 1994.  Kyrgyzaltyn did
not have any exclusive or special rights or privileges in conducting foreign trade.  Any person couldapply for and obtain a license to export antimony.  Licenses were not required for the import ofantimony.
104. Concerning the tobacco sector, Kyrgyztamekesi  was the sole provider of licences for the
production of tobacco products in the Kyrgyz Republic.  Any person could obtain a licence to engage inthe production of tobacco products.  Imported tobacco products were marketed freely in theKyrgyz Republic, licenses were not required for the domestic distribution or sale of tobacco products.
105. The representative of the Kyrgyz Republic stated  that concerning the alcohol sector, Article 8 of
the Law on Licensing of 3 March 1997 stated that foreign legal entities or individuals, as well asindividuals without citizenship should receive licenses on the same conditions and in the same procedureas legal entities and individuals of the Kyrgyz Republic, unless otherwise stipulated by legislative acts.Currently, no legislative acts stipulated otherwise for licenses issued by Kyrgyzalco.  Article 18 of thesame law permitted license applicants to have judicial appeal.  Any MFN or national treatment(Article III) violations may be appealed to the court by license applicants.  Policy decisions with respectto any quantitative restrictions and prohibitions are made by the Government and not by Kyrgyzalco.The Kyrgyz Republic commits to ensure that the opera tions of Kyrgyzalco in the issuance of import and
export licenses for alcohol and alcoholic products are administered in a manner consistent with WTOrequirements.
106. Concerning the energy sectors, there were no prohibitions by the government on the export of oil
products, natural gas, and liquefied gas.  Currently, there were no firms (including Kyrgyzgasmunaizat)engaged in the exportation of oil products, natural, and liquefied gas, due to high domestic demand andinsufficient supply.  There were five privately-owned companies engaged in the importation of oilproducts: Lukoil Kyrgyzstan, Tyan-Shan Oil, Sato Petroleum, Datka, and Ekooil.  In addition toKyrgyzgasmunaizat which imported approximately 50 per cent of the natural gas and liquefied gas to theKyrgyz Republic, a number of State companies (e.g . Kadamjai Antimony Group, Maili Suu Lamp Plant)
were currently importing natural gas to meet thei r own demand.  These State companies had their own
contracts with Uzbekistan for importing natural gas and had a commercial contracts withKyrgyzgasmunaizat to transport gas from Uzbekistan to the Kyrgyz Republic.
107. Some members of the Working Party requested further information on trade in the electrical
energy sector.  These members welcomed the recognition that although there were no de jure  barriers to
trade in electrical energy in the Kyrgyz Republic, there was a de facto monopoly in the hands of theWT/ACC/SPEC/KGZ/9/Rev.1
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Kyrgyz Energy Holding Company.  In response, the representative of the Kyrgyz Republic stated that
the production and sale of the electrical energy was carried out by Kyrgyz Energy Holding.  There wereno regulatory barriers to entry.  Any person could apply for a licence for the generation, transmission,distribution, and sale of electrical energy.  The draft regulations outlining the procedures, criteria, andrequirements for obtaining such licences were currently being developed in accordance with the Law onLicensing of 3 March 1997.    He noted that no applications for such licences had been submitted to theLicensor (the "State Energy Agency under the Cabinet of Ministers").  He added that electrical powerwas equally available to all firms and individuals in the Kyrgyz Republic.  In general, the rates forhouseholds were lower than the rates for legal persons.  There was no difference in the rates charged to(1) a legal person (without foreign ownership), (2) a le gal person (fully or partially foreign-owned), and
(3) a representative or branch office.   Export prices of bartered electrical energy established withUzbekistan and Kazakstan were negotiated on annual basis and depended upon the traded volume andconditions of the inter-governmental agreement.  The volume and the commercial value of barteredgoods were considered during negotiation.
108. Some members of the Working Party requested that the Kyrgyz Republic undertake a
commitment  that, upon accession to the WTO, all State trading enterprises would be eliminated.   Inresponse, the representative of the Kyrgyz Republic stated that Article XVII of the GATT 1994authorized State trading activities.  The Kyrgyz Republic was not prepared to undertake a commitment
that State trading would be abolished in the alcohol and tobacco sectors.
109. The representative of the Kyrgyz Republic confirmed that his Government would apply its laws
and regulations governing the trading activities of State-owned enterprises and other enterprises withspecial or exclusive privileges, listed in paragraph 103 of this report, in conformity with the relevant
provisions of the WTO Agreement, and would abide by the provisions for notification, non-discrimination, and the application of commercial cons iderations for trade transactions for any enterprise
whose activities were subject to Article XVII of the GATT 1994, the WTO Understanding on thatArticle, and Article VIII of the GATS.  He further confirmed that the Kyrgyz Republic would notify anyenterprise falling within the scope of Article XV II at the time of accession.  The Working Party took
note of these commitments.WT/ACC/SPEC/KGZ/9/Rev.1
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- Free zones
110. In response to requests for information on free zones operating in the Kyrgyz Republic, the
representative of the Kyrgyz Republic stated that existing legislation and the Customs Code authorized
the establishment of free economic zones, which offered special customs, tax, labour relations andprocedural benefits to enterprises locating within such a zone.  Each free economic zone was required tobe established by an act of Parliament.  Specific benefits included:  (i) exemption from the imposition ofcustoms duties and other payments on foreign-origin goods entered into such a zone and intended forreexport;  (ii) simplified border clearances;  (iii) abolition of non-tariff restrictions on import and export;(iv) exemption from all taxes and charges (however, entities were required to pay the GeneralDirectorate an annual fee of 0.1 - 2 per cent of the proceeds generated from the sale of goods andservices);  (v) collective labour agreement and individual contracts;  (vi) free circulation and use offoreign currency, including payments between legal entities and natural persons in the zone;  and(vii) simplified entrance, departure and salary transfer abroad for foreign citizens.  Four economic zoneshad been created by law, but only the Bishkek zone was operational.  In response to that information,some members of the Working Party asked whether or not any free or free economic zones established inthe future would be fully consistent with all WTO obligations relating to free and free economic zones.
111. The representative of the Kyrgyz Republic stated that the free zones and special economic zones
authorized by the legislation described in paragraph 110 above were fully subject to the coverage of thecommitments of the Kyrgyz Republic in its Protocol  of Accession to the WTO Agreement and that the
Kyrgyz Republic would ensure enforcement of its WTO obligations in those zones.  In this regard, heconfirmed that the draft Regulations on the Amendments to Certain Decisions of the Government wouldbe adopted by the date of accession to the WTO.  In addition, goods produced in these zones under taxand tariff provisions that exempt imports and im ported inputs from tariffs and certain taxes would be
subject to normal customs formalities when enteri ng the rest of the Kyrgyz Republic, including the
application of tariffs and taxes.  The Working Party took note of these commitments.
- Government procurement
112. In response to requests for information, the representative of the Kyrgyz Republic stated that in
the past there was no specific law regulating government procurement practices.  Each branch, ministry,agency, or other governmental body was free to utilize whatever method it desired to acquire requiredgoods and services.  Open competitive bidding was not required.  Details of Government purchasing inWT/ACC/SPEC/KGZ/9/Rev.1
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recent years were provided to the Working Part y in Tables 1-29 and 1-30 of Annex 1 of document
WT/ACC/KGZ/3.  He further added that as part of the reform process, the Law on State Procurementwas adopted by the Parliament of the Kyrgyz Republic on 15 April 1997, enacted on 13 May 1997, andcame into force on 1 June 1997.
113. In response to requests for information on the purchasing process under the proposed law on
government procurement, the representative of the Kyrgyz Republic stated that the law would requiredthat procedures and criteria for the evaluation of bids be set forth in the solicitation documents issued for
each procurement.  The proposed law required procuring entities to act in strict accordance with theapplicable solicitation documents.  Price, subject to any margin of preference applied pursuant to the
law, was the only criterion unless the solicitation documents stated that the award will be based on otherobjective and quantifiable criteria. Alternative criteria must be specified in advance in the solicitationdocuments.  The State Procurement Agency under the Cabinet of Ministers was established according toPresidential Decree No. 31 of 29 January 1997. This new central agency would control the application of
the legal system, supervise the decisions of all purchasing organizations, monitor infringements of publiclaw and settle disputes.  Disputes could be pursued in the economic Court system; however, judicialredress was generally  available only after the exhaustion of administrative remedies. He noted, however,that the following matters were not subject to judicial review:
- the selection of the method of procurement;
- the choice of a selection procedure;- the limitation of procurement proceedings on the basis of nationality;- a decision by the procuring entity to reject all tenders, proposals, offers, or quotations;- a refusal by the procuring entity to respond to an  expression of interest to participate in request-
for-proposal proceedings; and
- an omission of reference to laws and regulations in the solicitation documents.
114. In response to questions concerning whether the procurement of certain products was reserved
for local industry, the representative of the Kyrgyz  Republic stated that with respect to the MFN
principle, the law does not permit the procuring entity to discriminate among foreign bidders.  If thereare enough suppliers on the territory of the Kyrgyz Re public to carry out the deliveries of goods, works,
and services, a purchasing organization shall have the right to limit participation in the procedures ofpurchases to domestic suppliers.WT/ACC/SPEC/KGZ/9/Rev.1
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115. Some members of the Working Party asked that as part of its protocol accession commitments,
the Kyrgyz Republic accede to the Government Procurement Agreement (GPA) and submit a scheduleof commitments to the GPA Committee to initiate nego tiations no later than three months after the date
of accession to the WTO.  These members expressed concern that the new law would allow for domesticpreferences, either by limiting procurement procedures to national bidders, or by giving preferentialmargins to domestic goods or service providers.  In  their view, such a provision would create a trade
barrier in contradiction with the future obligations that the Kyrgyz Republic would assume uponaccession to the Government Procurement Agreement.  In response, the representative of theKyrgyz Republic stated that the last version of the draft law did not limit procurement procedures tonational bidders and did not give preferential margins to domestic goods or service providers.  He alsoadded that the Kyrgyz Republic did plan to accede to the Agreement on Government Procurement.
116. During the early stages of the deliberations the representative of the Kyrgyz Republic stated that
the Kyrgyz Republic would initiate the process of joining the Government Procurement Agreement twoyears after the establishment of the Kyrgyz Government Procurement Agency (KGPA).  KGPA wasestablished in January 1997.  He further added that the Government Procurement law was adopted by theParliament on 15 April 1997, signed by the President on 13 May 1997, and came into effect on1 June 1997.  Later on he added that in response to requests from some members of the Working Party,the Kyrgyz Republic was reconsidering its position regarding accession to the Government ProcurementAgreement.
117.  The representative of the Kyrgyz Republic stated that the Kyrgyz Republic would initiate
negotiations for membership in the Government Procurement Agreement upon accession by tabling anentity offer at that time.  He also confirmed that, if the results of the negotiations were satisfactory to theKyrgyz Republic and the signatories of the Agreement, the Kyrgyz Republic would completenegotiations for membership in the Agreement by 31 December 1999.  The Working Party took note ofthis commitment.
- Trade in civil aircraft
118. In response to the request by some members of the Working Party, the representative of the
Kyrgyz Republic stated that his Government would [consider the issue of joining] [adhere to] thePlurilateral Trade Agreement on Trade in Civil Aircraft [after accession] [at the time of accession] to theWTO.  [The Working Party took note of this commitment.]WT/ACC/SPEC/KGZ/9/Rev.1
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-T r a n s i t
119. The representative of the Kyrgyz Republic stated that under the Customs Code, goods in transit
through the territory of the Kyrgyz Republic were require d to be declared to the SCI at the point of entry.
Upon release from the entry point, the goods could move freely through the customs territory of theKyrgyz Republic.  No payment of duties or taxes was required on goods in transit.  Goods classified as"goods in transit," were required to remain unchange d except for normal wear and tear and should not be
used for any economic purpose.  The goods were required to be transported to their customs destinationaccording to the routes and directions established by th e SCI.  If  the goods were not presented to the SCI
at the point of exit within a reasonable time, the carrier was responsible for the payment of all duties andtaxes due as if the goods had been released into free circulation (the carrier may also be assessed anadministrative penalty), unless the goods can be proved to have been exported, destroyed, or lost as aconsequence of an accident or force majeure event.
- Policies Affecting Trade in Agricultural Products
- Imports - description of the types of border protection maintained
120. In response to requests for information, the representative of the Kyrgyz Republic stated that
agricultural products were not subject to import licensing, or other restrictions such as quotas.  Certaincategories of agricultural products, specified in the li st approved by Cabinet of Ministers Resolution No.
260 of 28 April 1994 were subject to certification, the purpose of which was to protect the health ofKyrgyz citizens by restricting the importation of poor quality products and raw material.  Importedagricultural products were subject to rates of duty not exceeding ten per cent.
-E x p o r t s
121. He further added that no licence was required to export agricultural products.  There were no
export tariffs, quotas, restrictions or prohibitions on the export of agricultural products.  No exportcredits, export credit guarantees, export credit insurance, or other financial support or assistance wasavailable for agricultural exports.WT/ACC/SPEC/KGZ/9/Rev.1
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- Internal policies - i.e. description of and the budgetary expenditure and any
revenue foregone involved in each of the domestic support measures in place
122. In response to requests for information, the representative of the Kyrgyz Republic stated that one
of the basic aims of the Kyrgyz Republic’s policy in agriculture was to ensure the stability and growth of
the supply of agricultural products to the domestic market.  The Kyrgyz Republic was therefore pursuinga process of de-collectivization, reorganization and privatization of  agricultural enterprises.Agricultural prices had been liberalized.  From the end of 1995, all direct State financial supportpayments to all agricultural enterprises, had ceased - with the exception of 6 special animal breeding and26 seed producing farms.  He further noted however, that due to a lack of funds, even those enterprisesdid not receive regular financial support from the State.   In partial replacement of direct State financialsupport, funds loaned to the Government of the Kyrgyz Republic by various international organizationsand institutions were being used by the Government to provide low-interest credit facilities toagricultural enterprises to enable them to make purchases of key inputs, e.g., seeds, fertilizer, equipment,etc.  The loans had annual interest rates of between 7 per cent and 12 per cent.  The follow-on loans tothe agricultural enterprises had rates of between 1 per cent and 5 per cent.  In this connection he notedthat annual interest rates charged by private commercial lenders, currently ranged between 50 per centand 60 per cent.
123. In response to this information, some members of the Working Party asked whether the average
tariff rate for agricultural products under the new tariff regime would exceed the existing 10 per centaverage rate.  In response, the representative of the Kyrgyz Republic stated that the average tariff rate foragricultural products under the proposed tari ff regime would remain at about 10 per cent.
124. Some members asked whether the Kyrgyz Republic would enter a commitment to not require
licences for export of agricultural products and to not impose tariffs or quotas on the export ofagricultural products.  In response, the representative of the Kyrgyz Republic stated that theKyrgyz Republic would bind its existing policies of not requiring licences for export of agriculturalproducts and not imposing tariffs or quotas on the export of agricultural products, except in accordancewith WTO Agreements.
125. The representative of the Kyrgyz Republic provided information on domestic support and export
subsidies in document WT/ACC/SPEC/KGZ/1.  He stat ed that the Kyrgyz Republic would bind export
subsidies at zero for agricultural products.WT/ACC/SPEC/KGZ/9/Rev.1
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126. Some members  of the Working Party asked whether the direct State financial support payments
to the special animal breeding and seed producing farm s would be stopped in the future.  In response, the
representative of the Kyrgyz Republic stated that due to a lack of financial resources, the State currentlyprovided no support to the above-mentioned farms. Breeding farms engaged in raising pedigree horseshad been able to cover their costs without State a ssistance, but farms for the production of seeds were
supported by the European Commission on Technical Issues.  The assistance rendered in 1995 was an
estimated som 15-20.  In 1997 assistance for such farms was provided for in a government programmefor sheep breeding.
127. The Kyrgyz Republic's commitments on agricultural tariffs, on domestic support and export
subsidies for agricultural products are reproduced in Part I of the Schedule of concessions andcommitments annexed to the Protocol of Accession of the Kyrgyz Republic to the WTO.
- Textiles regime
128. In response to requests for information on textile products, the representative of the
Kyrgyz Republic stated that imported textile products were subject to rates of duty ranging from 0 to30 per cent, and that textile products for children must comply with the applicable safety standards.  This
certification requirement was established by Cabinet of Ministers Resolution No. 520 of2 December 1995 and applied equally to locally produced children’s textiles.  The export of textileproducts was only to an Agreement between the Kyrgyz Republic and the European Communities onTrade in Textile Products (the EC Textile Agreement) imposing a quota on Kyrgyz-origin textiles intothe European Communities.  The EC Textile Agreement provided that the quotas did not take effect until1 January 1997.  According to the EC Textile Agreement, the Kyrgyz Republic could export textiles tothe European Communities according to the following quotas (established as percentages of the totalimports of such goods into the European Communities during the previous year):
- 0.35 per cent for category I goods;
- 1.20 per cent for category II goods;  and- 4.00 per cent for category  III, IV a nd V goods.WT/ACC/SPEC/KGZ/9/Rev.1
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VI. TRADE-RELATED INTELLECTUAL PROPERTY REGIME (TRIPS)
1. General(a) Intellectual property policy
129. The representative of the Kyrgyz Republic stated that the intellectual property system of the
Kyrgyz Republic was still undergoing a transition from the system inherited from the formerSoviet Union.  It was the policy of the Government to put into place a system of intellectual propertyprotection modeled on the systems found in develope d market economy countries.  In pursuit of this
policy the Kyrgyz Republic has adopted (i) Part 2 of the Civil Code, (adopted 5 December 1997,effective 1 March 1998) containing provisions establishing basic intellectual property rights andprotections, (ii) the Patent Law (adopted 16 December 1997, effective 4 February 1998), (iii) the Law onCopyright and Related Rights (adopted 16 December 1997, effective 23 January 1998), (iv) the Law onTrademarks, Service Marks and Appellations of Places of Origin of Goods (adopted 16 December 1997,effective 28 January 1998).  In addition, separate laws covering:  integrated circuits, software anddatabases, selective breeding achievements and the law on commercial secrets had been adopted by theParliament.  The Anti-Monopoly law enacted on 15 April 1994 contained provisions regarding unfair
competition as well as the misappropriation of intellectual property.  The Criminal Code (Section onIntellectual Property) entered into force 1 January 1998;  the Law on PC, Software Programs, andDatabases, the Law on Integrated Circuits, and the Law on Commercial secrets were adopted by theParliament on 2 March 1998 and were signed by the President at the end of March 1998.  The Law onSelection Achievements was currently being reviewed by the Parliament and was expected to be adoptedby the Parliament in May 1998.  He further added that in preparing those laws, the Kyrgyz Republic hadtaken into account the requirements of the TR IPS Agreement.  The representative of the
Kyrgyz Republic stated that Part 2 of the Civil Code  had come into force 1 March 1998, and includesChapter V - Intellectual Property, which comp lies with the TRIPS Agreement requirements.
130. Some members of the Working Party said that the Kyrgyz Republic should enter a commitment
to fully apply the TRIPS Agreement by the date of its accession to the WTO.
(b) Responsible agencies for policy formulation and implementation
131. In response to requests for further information, the representative of the Kyrgyz Republic stated
that on 4 March 1996, the President issued a decree, which established a central intellectual propertyagency, the  State Agency for Intellectual Property (also known as Kyrgyzpatent).  This agency wasresponsible for the registration of patents, trademarks, industrial designs, copyrights and associatedWT/ACC/SPEC/KGZ/9/Rev.1
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rights and breeding achievements (i.e. new varieties of  plants and new breeds of animals).  The Anti-
monopoly Department within the Ministry of Fina nce was responsible for the administration and
enforcement of the Anti-monopoly Law, which, at section 5, prohibited "unscrupulous competition",defined as  including  the unauthorized use of trademarks, trade dress and confidential/proprietarybusiness information.
(c) Membership of international intellectual property conventions
132. The representative of the Kyrgyz Republic stated that as of 20 February 1998 the Kyrgyz
Republic was a member of the following multilateral treaties, agreements and conventions:
- Convention Establishing the World Intellectual Property Organization (WIPO):
- Paris Convention for the Protection of Industrial Property, (signed by the Kyrgyz Republic
Prime-Minister 6 January 1994, deposited with WIPO 14 February 1994);
- Madrid Agreement Concerning the International Registration of Marks, (signed by the Kyrgyz
Republic Prime-Minister 6 January 1994, de posited with WIPO 14 February 1994);
- The Patent Cooperation Treaty, (signed by the Kyrgyz Republic Prime-Minister 6 January 1994,
deposited with WIPO 14 February 1994);
- Eurasian Patent Convention (the translation is being adjusted to conform to the official version
of 1994);
Moreover, the Kyrgyz Republic was in the process of acceding to:
- Berne Convention for the Protection of Literary and Artistic Works;
- WIPO Copyright Treaty;
- Locarno Agreement Establishing an International Classification for Industrial Designs (ratified
by the Jogorku Kenesh (Upper House) 26 January 1998, and submitted to the Chamber of thePeople's Representatives for ratification);
- Strasbourg Agreement Concerning the International Patent Classification (ratified by the
Jogorku Kenesh (Upper House) 26 January 1998 and submitted to the Chamber of the People's
Representatives for ratification);
- Vienna Agreement Establishing an International Classification of the Figurative Elements of
Marks (ratified by the Jogorku Kenesh (Upper House) 26 January 1998 and submitted to the
Chamber of the Peoples Representatives for ratification);
- Nice Agreement Concerning the International Classification of Goods and Services for the
Purposes of Registration of Marks (ratified by the Jogorku Kenesh (Upper House) 26 January
1998, and submitted to the Chamber of People's Representatives for ratification).
In addition to these multilateral treaties, the Kyrg yz Republic had entered into bilateral agreements
concerning industrial property with the following countries:WT/ACC/SPEC/KGZ/9/Rev.1
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- Russian Federation (1995)
- Uzbekistan (1996)
- Kazakstan (1997)
- Armenia (1997)
- Azerbaijan (1997).
The Kyrgyz Republic has yet to take the necessary steps to accede to the following conventions for
reasons unrelated to the substance of the conventions themselves.
- International Convention for the Protection of Performers, Producers of Phonograms and
Broadcasting Organizations (Rome Convention);
- Convention for the Protection of Producers of Phonograms Against Unauthorized Duplication of
Their Phonogram (Geneva Convention);
- WIPO Performances and Phonograms Treaty;
- Treaty on Intellectual Property in Respect of Integrated Circuits (Washington Agreement);
- Universal Copyright Convention.
Nevertheless the Kyrgyz Republic passed this Law on Integrated Circuits on 2 March 1998 which has
been sent to the President for the signature.  This Law provides the protections listed in the Washington
Agreement and comports to the requirements of the TRIPS Agreement.  Moreover, Chapter 55 of theCivil Code covers neighbouring rights as did the Law on Copyright and Neighbouring Rights adopted on
16 December 1997.  These laws protect the right of performers, producers of phonograms andbroadcasting organizations for a term of fifty years and are consistent with requirements of TRIPS.
133. The rights of producers of phonograms were protected by the Law "On Copyright and
Neighbouring Rights", which included basic provisions protecting the rights of these producers incompliance with applicable WTO requirements.  The re presentative of the Kyrgyz Republic said that the
Kyrgyz Republic was in the process of acceding to the Berne Convention on Protection of Literary andArtistic Works and, upon accession, would ratify the WIPO Copyright Agreement (1996).  Thisaccession would be concluded by  1 July 1998.  [The Working Party took note of these commitments.]
(d) Application of national and MFN treatment to foreign nationals
134. The representative of the Kyrgyz Republic noted that the policy of the Kyrgyz Republic
regarding application of its intellectual property laws to foreign nationals was to accord nationaltreatment to foreign citizens, stateless persons and foreign legal entities, unless such treatment wascontrary to the provisions contained in other intern ational agreements to which the Kyrgyz Republic was
a party.  The exception to this "national treatment policy" was that Article 17 of the adopted Patent Lawand Article 6 of the Law On Trademarks, Service Marks and Appellations of Origin of Goods providethat applications filed by foreign legal entities and natural persons residing outside of the KyrgyzRepublic shall be through a patent agent registered with State Agency on Intellectual Property(Kyrgyzpatent).WT/ACC/SPEC/KGZ/9/Rev.1
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135. Some members asked how the Kyrgyz Republic intended  to comply with Article 4 of the TRIPS
Agreement.  In response, the representative of the Kyrgyz Republic stated that in order to ensure nationaltreatment, the State Agency for Intellectual Prop erty (Kyrgyzpatent) was now reviewing all laws and
regulations to ensure national treatment of foreign persons.  For example, a uniform fee structure wascurrently being developed.  With respect to the MF N principle, the Kyrgyz Republic intended to follow
the requirements of Article 4 of the TRIPS Agreement.
(e) Fees and taxes
136. He noted that fees were charged for the processing of trade mark and service mark registration
applications, patent applications for inventions and industrial designs and applications for thecertification of utility models.   Levies would also be collected for the extension of the term of a patentfor an industrial design, a utility model, and for an extension of the registration of a trademark, servicemark and the use of an appellation of the place of origin of the good.  He noted in this regard that section18 of the Temporary Regulations set different methods for calculating the application/registration andother fees to be paid by Kyrgyz citizens and CIS nationals (fees set in varying shares of the "minimumsalary") and those to be paid by non-CIS nationals (fees set in varying amounts of US Dollars).  Pursuantto the Patent Law and the Law On Trademarks, Service Marks and Appellations of Origin of Goods,regulations were being developed which would provide for a unified method to accrue levies.  However,prior to the adoption of this regulation, the rules of the temporary regulation on levies applied for thepatenting of inventions, utility models, industrial designs, registration of trademarks and service marks(1994).
2. Substantive Standards of Protection, Including Procedures For the Acquisition and
Maintenance of Intellectual Property Rights
137. The representative of the Kyrgyz Republic noted that the basic legal recognition of intellectual
property rights was established under several articles of the Civil Code.  Article 22 of the Civil Code
listed the objects of civil rights, namely protected undisclosed information and other results ofintellectual activity, trade names, trademarks and other means of individualization of goods.  Article 53of the Civil Code stated that a citizen can have the right to intellectual property as well as personal non-economic property rights. Article 22 specifically dealt with brands, trademarks and other means ofdistinctively marking articles.  Article 53 of the Civil Code provided, inter alia, that a person may haveauthorship rights in scientific works, works of art, literature, inventions and other results of intellectual
activity.  Article 32  provides that a person has the exclusive right in and to the resultant objectiveexpression of their intellectual activity, including any means created and used for identifying  a legalWT/ACC/SPEC/KGZ/9/Rev.1
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entity, or a product, work, or service produced or offered by a physical person or legal entity (e.g., firm’s
name, product brand, trade mark, service mark, etc.).   Article 32 also provided that a third person coulduse such an "objective expression" only with the consent of the person/entity holding the right thereto.These intellectual property provisions were contained in Part I of the Civil Code. The Anti-monopolyLaw, which proscribed "unscrupulous competition," included "the unauthorized use of  a trademark,name or marking of goods;  the unauthorized duplication of  a form, package or appearance of goods"and "the unauthorized use or disclosure of confidential scientific, technical, engineering or commercialinformation".
(a) Copyright and related rights, including rights of performers, producers of phonograms
and broadcasting organizations
138. The representative of the Kyrgyz Republic furthe r added that Part I of the Civil Code provides
generally for the protection of rights of authorship.  Article 7 provides that intellectual property rights
arise as a consequence of the creation of works of science, literature, arts, invention and other productsof intellectual activity.  Kyrgyzpatent’s Temporary Regulations on the Official Registration of ComputerPrograms, Databases and Integrated Circuit Topologies extend copyright protection to computerprograms - other than computer programming languages - and to databases, which were treated ascompilations. These Temporary Regulations had provided the owner of such  a program, data base ortopology with the option of formally registering his copyright therein.  The Temporary Regulations hadbeen replaced by the Law on Copyright and Neig hbouring Rights, effective 23 January 1998, which
regulated relations resulting from the creation of works of science, literature and art (copyright),phonograms, performances, productions and broadcasts by cable and broadcast organizations(neighbouring rights).
139. The representative of the Kyrgyz Republic stated that the Law on Copyright and Neighbouring
Rights  which had entered into effect 23 January 1998 was in full conformity with the requirements of
TRIPS Agreement.
(b) Trademarks, including service marks
140. The representative of the Kyrgyz Republic said that the Law on Trademarks, Service Marks and
Appellations of Origin of Goods provided for the registration of a trademark, which was valid for ten
years from the date a conforming application is filed with the State Agency on Intellectual Property(Kyrgyzpatent).  Article 20 of this law provided for the nullification of the registration of a trademark ifWT/ACC/SPEC/KGZ/9/Rev.1
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it had not been used for three years.  Pursuant to Article 6 bis of the Paris Convention on Protection of
Industrial Property, Article 5 of the Kyrgyz Republic Trademark Law provided that trademarks whichare similar to the extent likely to cause confusion with well-known trademarks within the territory of theKyrgyz Republic may not be registered.  Article 41 of the Trade Mark Law provides liability for theillegal use of a trademark.  Seizure and destruction of goods in respect of which a trademark had beenillegally used were listed among legal remedies.  Article 5 of the law provided for the rejection of anapplication to register a trademark, which reproduced a trade name (in full or in part) owned by otherswho have been granted an earlier ownership right.
141. The representative of the Kyrgyz Republic stated that the Law of the Kyrgyz Republic on
Trademarks, Service Marks and Appellations of Origin  of Goods, passed by the Legislative Assembly of
the Parliament of the Kyrgyz Republic on 16 December 1997, signed by the President of the KyrgyzRepublic on 14 January 1998, which had entered into effect 28 January 1998, was in compliance withthe requirements of the TRIPS Agreement.
(c) Geographical indications, including appellations of origin
142. The representative of the Kyrgyz Republic said that the newly adopted Law of the Kyrgyz
Republic On Trademarks, Service Marks and Appellation of Origin of Goods enacted in December 1997which had entered into force on 28 January 1998 governed relations involving the registration, legalprotection and use of trademarks, service marks and appellations of origin of goods.  For example,Articles 27-38 of this law contained provis ions on appellations of origin of goods.
143. The representative of the Kyrgyz Republic stated that the Law on Trade Marks, Service Marks
and Appellation of Origin of Goods had brought the regime on appellations of origin of goods in theKyrgyz Republic into full conformity with the requirements of the TRIPS Agreement.
(d) Industrial designs
144. The representative of the Kyrgyz Republic said that the recently adopted Patent Law of the
Kyrgyz Republic provided for the protection of industrial designs for ten years from the priority date.Article 21 of the law provided an opportunity to establish a priority date from the date an application wasfiled in a member state of the Paris Convention on Protection of Industrial Property (conventionalpriority), if the application was filed with the State Agency on Intellectual Property (Kyrgyzpatent)within 6 months from the indicated date. A limited grace period was provided for disclosures by theWT/ACC/SPEC/KGZ/9/Rev.1
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author or person who obtained the disclosed information from the author.  Excluded from protection
were architectural structures and works contradicting the public interest or the principles of humanity.  Inresponse to requests for clarification of the concepts of contradiction of  "principles of humanity", therepresentative of the Kyrgyz Republic stated that the definitions were not  based on official normativedocuments and could only be accompanied by references to sources which had a statement of humaneideas and moral-ethic standards formed in the society,  in conformity with the international standards set
forth in the applicable international agreements.
(e) Patents
145.  The representative of the Kyrgyz Republic noted that the Patent Law of the Kyrgyz Republic
provided that the term of a patent was 20 years from the priority date. An invention was patentable if itwas new, has an inventive level and was industrially applicable.  Applications were to be filed withKyrgyzpatent and were examined on request of the applicant.  A grace period was established fordisclosures made by the inventor or a person who obtained the disclosed information from the inventor.Integrated Circuits were protected in a separate Act currently pending before Parliament.  Similarly,patent protection was excluded for works contradicting the public interest or the principles of humanity.Importation satisfied the working requirement.
146. The representative of the Kyrgyz Republic stated that the Patent Law of the Kyrgyz Republic
passed by the Legislative Assembly of the Parliament of the Kyrgyz Republic on 16 December 1997,signed by the President of the Kyrgyz Republic on 14 January 1998 which had become effective on 4February 1998 had brought the patent regime of the Kyrgyz Republic into full conformity with therequirements of the Agreement on Trade Related Aspects of Intellectual Property Rights.
(f) Plant variety protection
147. The representative of the Kyrgyz Republic said that plant varieties were not patentable pursuant
to the Patent Law of the Kyrgyz Republic.  However, the legal protection for plant varieties and animalbreeds was provided by the temporary regulation of breeding achievements.  The draft Law of theKyrgyz Republic on Legal Protection of Breeding Achievements was [pending before Parliament andwas expected to be] passed in May 1998.WT/ACC/SPEC/KGZ/9/Rev.1
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(g) Layout designs of integrated circuits
148. The representative of the Kyrgyz Republic stated that layout designs of integrated circuits were
the subject matter of a specific law that incorporates the requirements of TRIPS.  The law had beenadopted by Parliament and enacted in March 1998.
149. The representative of the Kyrgyz Republic stated that the Law On Topologies of Integrated
Circuits [that would be] adopted in April 1998 [would bring] [had brought] the regime on protection oflayout designs of integrated circuits into full conformity with the requirements of the TRIPS Agreement.[The Working Party took note of this commitment.]
(h) Requirements on undisclosed information, including trade secrets and test data
150. The representative of the Kyrgyz Republic stated that pursuant to Articles 22 and 34 of the
Civil Code, protected undisclosed information, which is a trade secret, was also listed among the objectsof civil rights.  Such information must have actual or potential commercial value due to its secrecy tothird parties, it cannot be accessed on any legal basis and its holder must undertake measures to keep itconfidential.  Commercial secrets were the subject of separate legislation which was enacted on30 March 1998.  Damages were available for misappropriation of such information by persons who hadobtained it illegally or who had divulged it in violation of a contractual obligation.  Article 202 of theCivil Code obliged a commercial representative to keep confidential all information learned about salestransactions, even after the completion of his or her employment.  The Criminal Code also providedpenalties for copying information from computers.
151. The representative of the Kyrgyz Republic stated that the Law on Commercial Secrets enacted
on 30 March 1998 had brought the regime on protection of commercial secrets into full conformity withthe requirements of the TRIPS Agreement.
(i) Any other categories of intellectual property
152. The representative of the Kyrgyz Republic stated that under Kyrgyzpatent’s Temporary
Regulations on the Procedure for the Registration of Licensing Agreements of 24 July 1995,relationships on "know-how" were protected.  Trade names were protected under Article 89 of the CivilCode which provides that a legal entity, whose firm name has been registered, has an exclusive right to
its use.  Article 89 provided that a legal entity which had first registered a particular business name hadWT/ACC/SPEC/KGZ/9/Rev.1
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the exclusive right to use that name.  A person who unlawfully uses another firm's registered name was
obliged to stop using the name upon demand and to indemnify the registered owner for any damage
caused by such use.  Kyrgyz patent had submitted for approval the draft regulation on firm names whichwould be in force until the adoption of the appropriate law.
3. Measures to Control Abuse of Intellectual Property Rights
153. The representative of the Kyrgyz Republic stated that Article 12 of the Patent Law provided that
in cases where an invention, utility model or industrial design was not used or used insufficiently withinthree years from the date the patent is granted, any entity willing or prepared to use the protected object(if the patent holder refuses to enter into a licensi ng agreement with the entity) shall have the right to
resort to court and file a petition requesting the grant of a compulsory license.  Such license shall begranted if the patent holder fails to prove that insufficient use or non-use of the object is caused byjustifiable reasons.
4. Enforcement
(a) Civil judicial procedures and remedies
154. The representative of the Kyrgyz Republic stated that Article 10 of the Civil Code provides for
Court enforcement of recognized by the Civil Code.  Article 11 provided that the Court could order
(i) specific performance of an obligation, (ii) compensation of losses, (iii) exaction of penalties and otherpenalties. Article 14 stated that losses included both direct and consequential damages, including lostprofits, as well as the profits made by the violator from the violation of the right.  Compensation formoral harm was available under Article 16. The protection of honour, dignity and business reputationwas provided under Article 18, where remedies included both the right of refutation and compensationfor  losses and/or moral harm.
(b) Provisional measures
155. The representative of the Kyrgyz Republic said that Article 35 of the Patent Law provided that
courts, within the limits of their authority, had jurisdiction to hear the following disputes:  actionsinvolving copyright to industrial property, disputes involving the issuance of protection documents,determinations as to who holds the patent, issues involving compulsory licenses, actions for breach of
the exclusive rights to the object of industrial property, as well as disputes concerning other economicrights of the patent owner.WT/ACC/SPEC/KGZ/9/Rev.1
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(c) Any administrative procedures and remedies
156. The representative of the Kyrgyz Republic stated that Article 10 of the Civil Code provided that
administrative enforcement of rights could be exercised only in cases stipulated by law and suchdecisions were appealable in Court.  The Patent Law and the Law on Trademarks, Service Marks andAppellations of Origin of Goods provides for Appellate Council review of disputes involving:
inventions, utility models, industrial designs, trademarks and service marks, as well as appellations oforigin of goods.  The Appellate Council was the first body of review for these disputes. The consumerprotection agency had administrative authority to address various forms of unscrupulous businessactivity, including passing off, the sale of items not fit for ordinary use (including mislabelled items offood and drink) and trade mark counterfeiting.  Under Article 20 of the Anti-Monopoly Law, the Anti-Monopoly Department had the power to levy and collect fines for engaging in unscrupulous businessactivity, including acts of passing off, trade mark misappropriation and unauthorized use/disclosure ofproprietary information.  In addition to fines, Article 22.1 provided that, upon successful application bythe Anti-Monopoly Department to a commercial Court, a violator may be required to surrender allprofits made from the concerned activity.  Finally, Article 22.2 permitted  the damaged person or legalentity to recover losses in an action filed in an appropriate Court.
(d) Any special border measures
157. The representative of the Kyrgyz Republic stated that Articles 28 to 31 of the Customs Code,
enacted on 29 July 1997, and effective on 1 October 1997, provided for border measures related tointellectual property.  These measures include the suspension of the release of goods where there is anindication the goods violate intellectual property rights.
(e) Criminal procedures
158. The representative of the Kyrgyz Republic stated that the new Criminal Code, passed
18 September 1997, had entered into force on 1 January 1998.  Articles 150 and 191 detailed theoffenses for violation of copyright, neighbouring rights and the rights of a patent holder, as well as forillegal use of trademarks, service marks and appellations of origin of goods.
159. The representative of the Kyrgyz Republic confirmed that his Government would fully apply the
provisions of the TRIPS Agreement by the date of its accession to the WTO without recourse to atransitional period.  The Working Party took note of this commitment.WT/ACC/SPEC/KGZ/9/Rev.1
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VII. POLICIES AFFECTING TRADE IN SERVICES
160. The Government of the Kyrgyz Republic entered into bilateral negotiations on market access in
Services, on the basis of the offer circulated to Working Party members in documentWT/ACC/SPEC/KGZ/3.  The results of those negotiations are reproduced in the Schedule of SpecificCommitments contained in Part II of the Annex to the Protocol of Accession of the Kyrgyz Republic.
161. In response to requests for information, the representative of the Kyrgyz Republic stated that
since independence, the type, quality and number of service providers had been expanding rapidly.Private companies and individual suppliers now dominated the sector.   As of 1 January 1998, the servicesector accounted for approximately 40 per cent of total employment.  The service sector accounted forapproximately 30 per cent of GDP in 1996 and approx imately 32 per cent in 1997.  He provided the
Working Party with a detailed description of select ed service industries and the legal regime governing
each.  He noted that the primary goals of State regulation of the services sector were:  protection of thelife, health and economic interests of consumers, protection of the environment and suppression of unfaircompetition.  The Kyrgyz Republic pursued these goals through a system of regulation intended toimpose a minimum of burdens on service suppliers.   The regulatory system, with a relatively few minorexceptions, was imposed equally on both foreign and domestic suppliers (including foreign-owneddomestic suppliers).  Therefore, foreign suppliers generally enjoyed national treatment.  In addition, theKyrgyz Republic did not discriminate among foreign suppliers of services on any basis.
VIII. TRANSPARENCY
162. In response to questions from some members of the Working Party, the representative of the
Kyrgyz Republic stated that there was no legal requirement to publish all legislation and administrativeacts on WTO related issues.  However, in practice, all laws, decrees, and resolutions were published innational newspapers.  In response, some members of the Working Party stated that the Kyrgyz Republicappeared to lack a legislative basis for the implementation of Article X of the GATT 1994 and otherpublication requirements of WTO Agreements, e.g., the requirement that standards be published for priorreview and comment before finalization and implementation.  These members stated that theKyrgyz Republic should make efforts to institute appropriate legislation on these points.  In response tothose requests, the representative of the Kyrgyz Republic stated that amendments to the Law onNormative Acts and Amendments to the Law on Publication of Laws had been prepared to ensure thetransparency of trade laws and regulations, and to ensure conformity with Article X of the GATT 1994and other publication requirements of WTO Agreements.WT/ACC/SPEC/KGZ/9/Rev.1
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163. The representative of the Kyrgyz Republic said that upon entry into force of the Protocol of
Accession, the Kyrgyz Republic would submit all initial notifications required by any Agreementconstituting part of the WTO Agreement.  Any regulations subsequently enacted by the Kyrgyz Republicwhich gave effect to the laws enacted to impl ement any Agreement constituting part of the WTO
Agreement would also conform to the requirements of that Agreement.  The Working Party took note ofthese commitments.
IX. INSTITUTIONAL BASE FOR TRADE AND ECONOMIC RELATIONS WITH THIRD
COUNTRIES
164. The representative of the Kyrgyz Republic stated that the Kyrgyz Republic had signed some 27
bilateral agreements relating to foreign trade in goods  and/or services.  He provided the Working Party
with a list of those agreements and a summary of th e terms of the agreements.  The agreements had been
signed with 21 foreign countries (six of which were CIS countries).  All of the agreements werecurrently in force and were generally concerned with the granting of mutually advantageous terms andconditions for trade and economic cooperation.  The Kyrgyz Republic has free trade with the followingcountries:  CIS countries according to the CIS Fr ee Trade Area Agreement;  Kazakstan and Uzbekistan
according to the Central Asia Economic Area Agreement (20 April 1994);  Kazakstan, Belarus and theRussian Federation;  Bilateral Agreement with Armenia (4 July 1994);  Bilateral Agreement withKazakstan (22 June 1995);  Bilateral Agreement with Moldova (26 May 1995);  Bilateral Agreementwith the Russian Federation (8 October 1992);  Bilateral Agreement with Ukraine (26 May 1995).
165. Some members of the Working Party requested further information on whether the Parliament
expected to ratify the Customs Union with Russia, Kazakstan and Belarus by the Kyrgyz Republic.  Therepresentative of the Kyrgyz Republic stated that the agreement on joining the Customs Union wasratified by the Legislative Assembly;  however, internal procedures on its enforcement had not beenadopted.  Currently, within the Customs Union, expert consultations were being held on this issue.
166. Some members of the Working Party asked how the Government of the Kyrgyz Republic
planned to meeting the requirement contained in the Customs Union Agreement that theKyrgyz Republic harmonise its customs and trade legislation with that of the other parties to theCustoms Union.  In response, the representative of the Kyrgyz Republic stated that the harmonisation ofthe Kyrgyz Republic's legislation connected with foreign trade with the Customs Union's requirementswere currently being studied at the level of ministries and State agencies of the Kyrgyz Republic.WT/ACC/SPEC/KGZ/9/Rev.1
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167. The representative of the Kyrgyz Republic st ated that his Government would observe the
provisions of the WTO including Article XXIV of the GATT 1994 and Article V of the GATS in itsparticipation in trade agreements, and would ensure that the provisions of these WTO Agreements for
notification, consultation and other requirements concerning free trade areas and customs unions ofwhich the Kyrgyz Republic was a member were met from the date of accession.  [He confirmed that theKyrgyz Republic would, by the date of accession, submit notifications and copies of its Free Trade Areaand Customs Union Agreements to the Committee on Regional Trade Agreements (CRTA).  He furtherconfirmed that any legislation or regulations required to be altered under its Trade Agreements wouldremain consistent with the provisions of the WT O and would, in any case, be notified to the CRTA
during its examination of the same.]  The Working Party took note of these commitments.
X. CONCLUSIONS
168. The Working Party took note of the explanations and statements of the Kyrgyz Republic
concerning its foreign trade regime, as reflected in this Report.  The Working Party took note of thecommitments given by the Kyrgyz Republic in relation to certain specific matters which are reproducedin paragraphs 13, 20, 24, 26, 28, 32, 35, 41, 45, 50, 57, 59, 60, 63, 64, 67, 75, 79, [80], 89, 90, [98], 101,102, 109, 111, 117, [118], [133], [149], 159, 163 and [167] of this Report.  The Working Party took notethat these commitments had been incorporated in paragraph 2 of the Protocol of Accession of theKyrgyz Republic to the WTO.
169. Having carried out the examination of the foreign trade regime of the Kyrgyz Republic and in
light of the explanations, commitments and concessions made by the representative of theKyrgyz Republic, the Working Party reached the conclusion that the Kyrgyz Republic be invited toaccede to the Marrakesh Agreement Establishing the WTO under the provisions of Article XII.  For thispurpose, the Working Party has prepared the draft Decision and Protocol of Accession reproduced in theAppendix to this Report, and takes note of the Kyrgyz Republic's Schedule of Concessions andCommitments on Goods (document WT/ACC/SPEC/KGZ/ 9/Rev.1/Add.1) and its Schedule of Specific
Commitments on Services (document WT/ACC/SPE C/KGZ/9/Rev.1/Add.2) that are annexed to the
Protocol.  It is proposed that these texts be adopted by the General Council when it adopts the Report.When the Decision is adopted, the Protocol of Accession would be open for acceptance by theKyrgyz Republic which would become a Member thirty days after it accepts the said Protocol.  TheWorking Party agreed, therefore, that it had completed its work concerning the negotiations for theaccession of the Kyrgyz Republic to the Marrakesh Agreement Establishing the WTO.WT/ACC/SPEC/KGZ/9/Rev.1
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APPENDIX
ACCESSION OF THE KYRGYZ REPUBLIC
Draft Decision
The General Council,
Having regard to the results of the negotiations  directed towards the establishment of the terms
of accession of the Kyrgyz Republic to the Marrakesh Agreement Establishing the World Trade
Organization and having prepared a Protocol for the Accession of the Kyrgyz Republic,
Decides, in accordance with Article XII of the Marrakesh Agreement Establishing the World
Trade Organization, that the Republic of the Kyrgyz Republic may accede to the Marrakesh Agreement
Establishing the World Trade Organization on the terms set out in the said Protocol.WT/ACC/SPEC/KGZ/9/Rev.1
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PROTOCOL OF ACCESSION OF THE KYRGYZ REPUBLIC
TO THE MARRAKESH AGREEMENT ESTABLISHING
THE WORLD TRADE ORGANIZATION
DRAFT
The World Trade Organization (hereinafter referred to as the "WTO"), pursuant to the approval
of the General Council of the WTO accorded under Article XII of the Marrakesh AgreementEstablishing the World Trade Organization (hereinafter referred to as "WTO Agreement"), and theKyrgyz Republic,
Taking note of the Report of the Working Party on the Accession of the Kyrgyz Republic to the
WTO in document WT/ACC/KGZ/ .... (hereinafter referred to as the "Working Party Report"),
Having regard to the results of the negotiations on the accession of the Kyrgyz Republic to the
WTO,
Agree as follows:
Part I - General
1. Upon entry into force of this Protocol, the Kyrgyz Republic accedes to the WTO Agreement
pursuant to Article XII of that Agreement and thereby becomes a Member of the WTO.
2. The WTO Agreement to which the Kyrgyz Republic accedes shall be the WTO Agreement as
rectified, amended or otherwise modified by such legal instruments as may have entered into forcebefore the date of entry into force of this Protocol.  This Protocol, which shall comprise thecommitments referred to in paragraph 168 of the Work ing Party Report, shall be an integral part of the
WTO Agreement.
3. Except as otherwise provided for in the paragra phs referred to in paragraph 168 of the Working
Party Report, those obligations in the Multilateral Trade Agreements annexed to the WTO Agreementthat are to be implemented over a period of time starting with the entry into force of that Agreement shallbe implemented by the Kyrgyz Republic as if it had accepted that Agreement on the date of its entry intoforce.WT/ACC/SPEC/KGZ/9/Rev.1
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4. The Kyrgyz Republic may maintain a measure inconsistent with paragraph 1 of Article II of the
GATS provided that such a measure is recorded in the list of Article II Exemptions annexed to thisProtocol and meets the conditions of the Annex to the GATS on Article II Exemptions.
Part II - Schedules
5. The Schedules annexed to this Protocol shall become the schedule of Concessions and
Commitments annexed to the General Agreement on Tariffs and Trade 1994 (hereinafter referred to asthe "GATT 1994") and the Schedule of Specific Commitments annexed to the General Agreement onTrade in Services (hereinafter referred to as "GAT S") relating to the Kyrgyz Republic.  The staging of
concessions and commitments listed in the Schedules shall be implemented as specified in the relevantparts of the respective Schedules.
6. For the purpose of the reference in paragraph 6(a) of Article II of the GATT 1994 to the date of
that Agreement, the applicable date in respect of the Schedules of Concessions and Commitmentsannexed to this Protocol shall be the date of entry into force of this Protocol.
Part III - Final Provisions
7. This Protocol shall be open for acceptance, by signature or otherwise, by the Kyrgyz Republic
until .........
8. This Protocol shall enter into force on the thirtieth day following the day of its acceptance.9. This Protocol shall be deposited with the Director-General of the WTO.  The Director-General
of the WTO shall promptly furnish a certified copy of this Protocol and a notification of acceptancethereto pursuant to paragraph 7 to each Member of the WTO and the Kyrgyz Republic.
10. This Protocol shall be registered in accordance with the provisions of Article 102 of the Charter
of the United Nations.
11. Done at Geneva this ... day of  .... one thousand nine hundred and ninety eight, in a single copy
in the English, French and Spanish languages each text being authentic, except that a Schedule annexedhereto may specify that it is authentic in only one or more of these languages.WT/ACC/SPEC/KGZ/9/Rev.1
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ANNEX
SCHEDULE CXLII  - THE KYRGYZ REPUBLIC
Part I - Goods
[To be circulated in document WT/ACC/SPEC/KGZ/9/Rev.1/Add.1 ]
Part II - Services
[To be circulated in document  WT/ACC/SPEC/KGZ/9/Rev.1/Add.2]
__________