RESTRICTED
WORLD TRADE WT/ACC/LVA/16
16December 1996
ORGANIZATION(96-5325)
Original: English
ACCESSION OFLATVIA
Additional Questions andReplies
ThePermanent Mission oftheRepublic ofLatvia hassubmitted thereplies toquestions raised
bymembers following themeeting oftheWorking Party heldon16September 1996. Thequestions
andreplies arereproduced hereunder.
_______________WT/ACC/LVA/16
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TABLE OFCONTENTS
Question Page
ECONOMIC POLICIES
Investment Regime (question 1) 3
State ownership andprivatization (question 2) 3
POLICIES AFFECTING TRADE INGOODS
(1) Import regulation
Ordinary Customs Duties (questions 3-5) 3
Tariff RateQuotas, Tariff Exemptions (questions 6-7) 4
Application ofInternal Taxes toImports (questions 8-10) 7
Quantitative Import Restrictions, including Prohibitions,
Quotas andLicensing Systems (questions 11-18) 8
Customs Valuation (question 19) 10
Anti-dumping, Countervailing Duties, Safeguard
Regimes (question 20) 11
(2) Export Regulation
Customs Tariffs, FeesandCharges forServices
Rendered, Application ofInternal Taxes toImports (question 21) 11
Export Subsidies (question 22) 11
(3) Internal Policies Affecting Foreign Trade in
Goods
Industrial Policy, including Subsidies (question 23) 12
Technical Barriers toTrade, Sanitary andPhytosanitary
Measures(question 24)
12
State Trading Entities (question 25) 12
Government Procurement (questions 26-27) 13
Agricultural Policies (questions 28-30) 13
Trade-Related Intellectual Property Regime (questions 31-36) 14
POLICIES AFFECTING TRADE INSERVICES (question 37) 18
TRADE AGREEMENTS (question 38) 19WT/ACC/LVA/16
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ECONOMIC POLICIES
Investment Regime
Question 1 Please givereasons forlimitations toforeign investment listed inparagraph 19
oftheFactual Summary ofpoints raised.
Reply
TheLaw"OnForeign Investment intheRepublic ofLatvia" states thatforeign investors are
granted therights andduties provided forbythenational laws. TheLawOnForeign Investments"
contains norestrictions forforeign investment inanysector ofthenational economy. TheLaw"On
Forestry" islimiting foreign ownership inthecompanies inwood cutting (logging) activities by
49percent.TheLaw‘’OnRadio andTelevision ’’islimiting foreign ownership inRadio andTelevision
companies by20percent. TheLaw"OnLotteries andGambling" islimiting foreign ownership in
gambling business by49percent. There isdecision oftheSaeima (theParliament ofLatvia) made
on4September thattheGovernment should submit proposals toadjust thementioned lawstotheLaw
"OnForeign Investments" within twomonths. Law"OnLandOwnership" permits 100percentforeign
owned companies toownthelandiftheowners ofthecompany arefrom thecountries withwhich
Latvia hassigned investment promotion andprotection agreements (presently 17countries). Legal or
private persons from other countries mayowntheland, ifatleast51percentoftheshares inthe
company registered inLatvia belong toforeigners fromthecountries withwhich investment protection
agreements aresigned ortotheLatvian citizens.
TheLaw"OnForeignInvestment"wasamendedbytheGovernmentinApril1996,amendments
approved bytheParliament on4September 1996, excluding Articles 3,5,6thusanyrestrictions for
foreign investment inanysectors ofthenational economy areexcluded.
State Ownership andPrivatization
Question 2 Does national treatment apply fortheparticipation offoreigners? Ifnot,please
provide details ofanyrestrictions onforeign participation intheprivatisation programme.
Reply
There arenorestrictions forforeigners toacquire State andmunicipal property through
privatisation process. According totheArticle 4oftheLaw"OnPrivatisation ofStateandMunicipal
Property" anyperson orlegalentity whoiseligible topurchase liquid and/or fixed assets inLatvia
canbeaprivatisation subject. Theprivatisation subjects cannot beLatvian State oramunicipality,
aStateandmunicipal enterprise, aStateormunicipal company oracompany inwhich private funds
donotexceed 25percentofequity capital.
POLICIES AFFECTING TRADE INGOODS
(1) Import regulation
Ordinary Customs Duties
Question 3 Latvia didnotclarify what itmeant by"atthistime" initslisting ofsensitive
products (WT/ACC/LVA/12, reply 7).Arethese products denoted assensitive foraspecific time
frame only? What isthetimeframe?WT/ACC/LVA/16
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Reply
Asformany other WTO member countries agriculture ispolitically sensitive branch inthe
whole national economy ofLatvia. Ourcountry isintransition fromcentrally planed toafreemarket
economy andisobjectively affected bytherapid privatisation, substantial structural changes asaresult
ofmany social problems arisen intheruralarea.Theensuring ofstability ofinternal political situation
required todefine alistof"economically important" products.
Latvia isnotgoing toextend thelistpublished inLVA/12 (#7)andwearelooking forward
tounderstanding ofourpartners during discussion oftheterms ofaccession taking intoaccount the
whole process ofnegotiations onagricultural market access, domestic support andexport subsidies
ofLatvia.
Question 4 Pleaseconfirmthattheonlyconsequenceofsensitivityisthattariffsmayberelatively
high. Arethere anyother duties andcharges, including charges forservices rendered applied
toimports apart from regular customs duties?
Reply
There arenoother duties andcharges forservices rendered applied toimports apart fromthe
regular customs duties.
Question 5 Wedonotunderstand theconversion method usedtoexpress equivalence between
thespecific andadvalorem equivalent rates intheresponse toquestion 9inWT/ACC/LVA/12.
Latvia indicates thatthespecific rates aremultiplied by100,thendivided bythecustoms value
ofthegood. Wedonotunderstand howthisformula isrelated totheadvalorem equivalent tariffs
listed inAnnex I,since theadvalorem rates would varyforeachindividual import, depending
onitsunique valuation. Wewould appreciate further clarification from Latvia intheWorking
Party about theadvalorem equivalent rates listed inAnnex IandhowLatvia intends toaddress
specific rates inestablishing itsWTO tariff bindings.
Reply
Conversion ofcustoms tariff rateshasbeenmade onthebasis offormula presented byWTO
Secretariat toLatvia. Theaverage customs value foreachofproducts wasusedinthisformula. In
bilateral negotiations Latvia willnegotiate themaximum tariff levelthatisrequired fortheimported
goods.
Tariff Rate Quotas, Tariff Exemptions
Question 6 TheinformationprovidedindocumentWT/ACC/LVA/12(reply13)doesnotexplain
howtheimport quota, foreachofthese products, iscalculated. Latvia should indicate thelevel
andthefactors taken intoaccount indetermining thelevelandyear-to-year changes. Thiswill
explain thevarious steps and provide thevariables involved inthecalculation. The
determination/explanation ofin-quota rates could alsobedone inthesame way. How often are
import quotas set?How isthelevelofquota applicable made known toexporters?
Reply
Thequantitative restrictions aresetforHSgroups 1001, 1002, 1003, 1004, 1701. The
quantitative restrictions aredetermined bytheCabinet ofMinisters incaseofcereal groups mentionedWT/ACC/LVA/16
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above orbyMinistry ofEconomy incaseofsugar. Amounts aresettaking intoaccount thetradebalance
ofproducts.
Latvia confirms thatallquantitative restrictions, including import licensing forgrains andthe
banonsugar imports, willbeeliminated uponaccession, asrequired byArticle XIoftheGATT 1994
andtheAgreementonAgriculture.Latviaconfirmsthatimportlicensingonothercommodities,especially
wheat flour, cereal flour, cereal groats, cereal grains otherwise worked, sugar andanimal feedare
administered inconformity withArticle XIandtheAgreement onImport Licensing Procedures.
Question 7 Latvia hasindicated that"The State Cereals Bureau could opentariff quotas when
itsannual forecast indicate ashortfall inLatvian production ofcertain types ofgrain" (Factual
Summary ofpoints raised, paragraph 25)and"The SCBannually draws uptheGrain Production
andConsumption Balance Sheet where itfixes grain quantities needed forimport andexport.
Intheevent there isagrain shortage, thevolume ofimported grains withreduced entrance tariff
rateisfixed" (document WT/ACC/LVA/12 reply 50).Theterms andconditions ofaccess will
needtobemade certain through thebinding ofmarket access commitments. Forthese products,
could Latvia provide theleveloflicences issued andactual imports andthetariff rates applying
tothese imports forthemost recent three-year period? Please alsoprovide information onannual
production andexports forthesame breakdown ofproducts, forthesame period.WT/ACC/LVA/16
Page6Reply
HSCodeVOLUME
(thsd. tons)TARIFF
RATEVOLUME
(thsd. tons)TARIFF RATE VOLUME
(thsd. tons)TARIFF RATE
allowed
by
licencesactually
importedbasic rate
ofdutyallowed
by
licencesactually
importedbasic rate
ofdutyreduced
rate
within
in-quota
tariffallowed
by
licencesactually
importedbasic rate
ofdutyreduced
rate
within
in-quota
tariff
1994 1995 1996 (January --October)
1001 (wheat)
milling wheat 60,1 45,0***
0,025 Ls/kg 81,6 34,9 0,025 Ls/kg 0,5% 124,7 79,7 0,025 Ls/kg 0,5%
feedwheat 6,1 0,9 55,6 23,3
1002 (rye) 0,075 Ls/kg 0,075 Ls/kg 0,5% 59,8 42,0 0.075 Ls/kg 0,5%
1003 (barley) 0.075 Ls/kg 13,4 4,9 0,075 Ls/kg 0,5% 77,5 38,2 0.075 Ls/kg 0,5%
1004 (oats) 0,075 Ls/kg 0,075 Ls/kg 3,5 1,6 0,075 Ls/kg 0,5%
1005 (corn) 59,9 5,7 0,5% 11,8 9,6 0,5% 14,2 11,7 0,5%
1006 (rice) 0,5% 2,9 1,5 0,5% 6,4 2,6 0,5%
1007 (sorghun) 0,5% 0,5% - - o,5%
1008 (buck-wheat) 5,3 1,o 0,5% 4,5 0,9 0,5% 6,9 1,1 0,5%
1008 (millet) 0,5% 1,7 0,4 0,5% 1,9 0,2 0,5%
1101 (wheat flour) 12,6 12,0 0,075 Ls/kg 0,075 Ls/kg 0,2 0,02 0,075 Ls/kg
hardwheat flour 0,075 Ls/kg 0,075 Ls/kg 0,4 0,1 0,5%
1102 (ryeflour) 0,075 Ls/kg 0,075 Ls/kg 0,075 Ls/kg
1103 (cereals) 5,6 1,3 0,075 Ls/kg 10,3 1,3 0,075 Ls/kg 6,7 0,8 0,075 Ls/kg
1104 (ground grain)
corn 0,5% 11,6 4,2 0,5% 5,9 0,6 0,5%
1107 (malt) 3,5 1,8 0,075 Ls/kg 22,3 11,5 0,5% 19,4 5,4 0,5%
***Formilling wheat withgluten content notlessthan25percentwasfixed areduced tariff rate0,5percentvalid till01.07.1994WT/ACC/LVA/16
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Application ofInternal Taxes toImports
Question 8 Areonlythose books andmass media items published or(inthecaseofmass media)
registered inLatvia exempt from VAT?
Latvia notes thatitisamending theLawontheValue Added Taxtoprovide national treatment
forimported mass media products. What isthestatus oftheamendment? Please confirm that
therevised statute willbeinfullconformance withGATT/WTO rules.
Please confirm thatLatvia 'sVAT andexcise taxareapplied equally todomestic andimported
goods andservices. Ifthisisnotthecase, please listspecific exceptions.
Reply
Theamendments totheRegulations oftheCabinet ofMinisters oftheRepublic ofLatvia On
theApplication ofProvisions oftheLawOntheValue Added Tax(effective since1July1996) provide
thattheterm"mass media shallbeapplicable tothenewspapers, journals andother periodic editions,
aswellastotelevision andradioprogrammes thathavebeenentered inthelistapproved bytheMinistry
ofFinance.
Mass media registered intheRepublic ofLatvia aswellasmass media registered abroad are
includedinthelistmentionedinthisprovision.Massmediawhicharenotincludedinthislistaretaxable.
LawOntheValue Added Taxdoesnotprovide exemptions fromVATforanybooks published
inLatvia, butonlyforschool books andscientific literature, firstpublications ofworks oforiginal
literature inLatvian andpublications forchildren published inLatvia inaccordance withthelistaccepted
bytheMinistry ofEducation andScience. Alltheother books published inLatvia orintheforeign
countries aretaxable.
Latvia confirms thatVAT andexcise taxareapplied equally todomestic andimported goods
andservices,
Question 9 Regarding goods andservices ruled exempt from excise tax,please explain how
andwhytheCabinet would determine themaximum amount ofgoods thatareexcise tax-exempt
when imported forconsumption intoLatvia. Arethere similar provisions addressing thesizeof
exemptions fordomestic goods?
Reply
TheCabinet ofMinisters shall determine themaximum quantity ofgoods thatare
excise-tax-exempt when imported forconsumption intothecustoms territory oftheRepublic ofLatvia.
Thisprovision means thatexcise taxshallnotbelevied onnatural persons importing alcoholic
drinks uptoonelitreoroneunitinoriginal packaging thatdoesnotexceed 3litres intotalamount,
aswellascigarettes -upto200cigarettes perperson. Thisamount ofmentioned goods isallowed
toimport without anydeclaration andtaxpayments ifthese goods areimported fornatural persons
needs (notforsale).
Question 10 Latvia didnotrespond indocument WT/ACC/LVA/12 toourquestions onexcise
taxation ofautomobiles andexcise taxexemptions. Please review these questions andprovide a
written response. DoesLatvia assemble ormanufacture autos orother transportation equipment?
Ifso,what engine capacity dothese vehicles have? WhydoesLatvia exempt suchvehicles (vehiclesWT/ACC/LVA/16
Page8
withengines smaller than1600cc orl900cc) from itsexcise tax?Why areusedcarsover7years
oldexempt from theexcise tax?
Reply
Onlymini-buses aremanufactured inLatvia. Imported anddomestically produced mini-buses
areexempt from excise tax.
Excise taxislevied onluxury goods. Newcarsandcarswithengines more than1600cc or
1900cc areconsidered asaluxury goods andarelevied withexcise tax.
Quantitative Import Restrictions, including Prohibitions, Quotas andLicensing Systems
Question 11 Inreply 8ofdocument WT/ACC/LVA/12, Latvia provides alistofcommodities
thataresubject toimport licensing requirements. Since thelistisaggregated, itisnotclear if
alltheChapters listed, orsome commodities under theChapters, arealsosubject tolicensing.
Please provide adisaggregated list,preferably byspecific HSlines.
Inaddition, what isthebasis oflicensing byproducts (e.g.Chapters 10,11,12,17,22,23and
24)Forexample, later inthereply, quantitative restrictions arementioned forsome, butnot
allproducts inChapter 10,andforsugar. What isthelevel ofthese quantitative restrictions,
andhowaretheydetermined? Isthisthepurpose oftheimport licensing referred toinparagraph 2
ofthereply?
What isthepurpose andsignificance oftheimport licensing fortheother products mentioned
inparagraph 2ofreply 8indocument WT/ACC/LVA/12, e.g.Chapters 11,12,17,22,23and
24?Please describe themeasures applicable foreachproduct andhowimport levels areregulated
bytheuseoflicences.
Reply
Thelicences arenecessary forthefollowing positions ofChapters 22and24:2204; 2205;
2206; 2207; 2208; 2402 and2403.
Thelicenceforproduction,importandwholesaleoftobaccogoodscanbeissuedtoanyenterprise
(company) registered intheRepublic ofLatvia andwhich hassubmitted itsapplication andtherequired
documents according totheprocedure accepted bytheMinistry ofFinance, Order No.355,dated
1August 1995 "The Procedure ofIssuing Special Permits (Licences) forProduction, Import and
Wholesale ofTobacco Goods", Article 8,andfulfilled alltheobligations stated intheprocedure.
Thereason oflicensing tobacco goods according totheLaw"OntheExcise Tax"iscollection
oftheexcise taxdetermined bytheStatetotheStatebudget, aswellascontrol oftheinternal market
oftheRepublic ofLatvia.
Thesystem oflicences doesnotsetanylimits astoimport from acertain country, aswell
asthequantity orvalue oftheimport.
Thequantitative restrictions aresetforHSgroups 1001, 1002, 1003, 1004, 1701. The
quantitative restrictions aredetermined bytheCabinet ofMinisters incaseofcereal groups mentioned
above orbyMinistry ofEconomy incaseofsugar. Amounts aresettaking intoaccount thetradebalance
ofproducts.WT/ACC/LVA/16
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Licensing necessity fortherestoftheproducts falling under HSgroups 11,12,17,23isjustified
forthepurpose ofstatistical needs.
Alcohol licensing procedure does notsetanylimitations tothevolume ofalcohol import.
Allthecereals listed intheChapters 10and11andsome ofthecommodities under Chapter 23
(2302, 230230, 23040000000, 2306, 2309) aresubject toimport licensing requirements. Quantitative
restrictions havebeenapplied onlytotheChapter 10HSlines 1001, 1002, 1003, 1004. Therest
commodities under theabove mentioned Chapters arelicensed solely forstatistical purposes.
Latvia reaffirms itsreadiness toeliminate allkinds ofquantitative restrictions forgrains under
importation.
Quantitative restrictions forthepreviously mentioned HSlinesunder Chapter 10havebeen
established proceeding from thegovernmental balance sheet ofgrain production andconsumption.
Question 12 Isitthecasethatquantitative restrictions onHSgroups 1001, 1002, 1003, 1004
areadministered bynon-automatic licensing? Please describe thelicensing usedforHSgroups
1101, 1102, 1103, 1104 and2300. Arethese automatic licences consistent withArticle 2ofthe
Agreement onImport Licensing Procedures?
Reply
Yes,itisthecasethatquantitative restrictions onHSgroups 1001, 1002, 1003, 1004 are
administered bynon-automatic licensing. Licensing forHSgroups 1101, 1102, 1103, 1104and2300
areautomatic licensing according totheArticle 2oftheAgreement onImport Licensing Procedures.
Question 13 Please confirm thatnoquantitative restrictions, including non-automatic licences,
norother non-tariff barriers apply toimports offishandfishproducts (HS03,1604-5) .
Reply
Weclearly confirm thatquantitative restrictions onfishandfishproducts (HS03,1604-5)
arenotapplied andhavenever beenapplied.
Question 14 Concerning labelling oftobacco products, please confirm thatthesame rules apply
tobothlocal goods andimported goods. Cananyeconomic operator apply foralabel ormust
theoperator beregistered? Ifyes,dothenormal rules fortheregistration ofcompanies apply?
Reply
Theexcise taxstamps areissued according totheprocedure accepted byLatvian StateRevenue
Service, Order No.105,dated 19June1995 "OnIssuance ofTaxStamps forTobacco Goods inthe
Republic ofLatvia". Excise taxstamps fortobacco goods canbeobtained byanyenterprise (company)
registered intheRepublic ofLatvia andholding aspecial permit (licence) forproduction oftobacco
goods orimport oftobacco goods forsales. Thevalue oftheexcise taxstamp isthesame fortobacco
goods imported andproduced inLatvia. Thesamelawsareapplied bothtoimported andhome produced
tobacco goods.
Inorder toperform entrepreneurial activity oftobacco production, import andwholesale the
company hastoobtain business activity licence from theMinistry ofFinance.WT/ACC/LVA/16
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Question 15 Accordingtothe"FactualSummary"(paragraph33),activitylicencescanbedenied
firms which donothavethenecessary experience toimport. How, inthiscase, canfirms develop
thisexperience?
Reply
Thevalid rules onimportation donotrequire anyprevious experience inimport operations.
Question 16 InWT/ACC/LVA/12(reply13),Latviastatesthattoimportgrains,onemustobtain
animport licence andpayan"entrance tax". Isan"entrance tax"aprecondition toreceiving
alicence? Ifso,willtheentrance taxbeeliminated when thelicensing requirements areeliminated?
How much isthe"entrance tax"andhowisitcalculated?
Reply
Latviawouldliketoclarify,thatentrancetaxdoesnotexist.InthiscontextLatviameanspayment
ofimport duty. Thismistake could occur duetotechnical misunderstanding, e.g.incorrect translation
intoEnglish.
Question 17 Latviastates(inWT/ACC/LVA/12,reply14)that"ifanentrepreneurfailstoexercise
hisrights, hislicence hasbeen annulled andisgiven toother entrepreneurs." Forhowlongis
thelicence valid before itisannulled? Areimporters aware ofthelength ofvalidity ofthelicence?
Reply
Thisisaspecific situation, when licence isissued incaseofquota ortariffquota. Eachimport
licence forcereals bears indication ofthelength ofvalidity. Since 1993 notasingle licence hasbeen
annulled prior toexpire ofitsterm, onthelicenser ’sinitiative. There arecases when animporter
renounces alicence notbeing abletoexecute importation.
Theamendments havebeenworked outtotheLaw"OnLatvia Grain Market andStateGrain
Reserves" anticipating licensing forstatistical andaccounting purposes.
Question 18 Latvia states (document WT/ACC/LVA/12, replies 21and51)thatbytheendof
theyear, itisready toprepare foradoption allnecessary changes inappropriate legal actsto
bringitsimportregimeforsugarintoconformitywithWTOregulations.Howwillthesugarregime
bebrought intoconformity?
Reply
Latvia currently works onpreparation foradoption ofallnecessary changes inappropriate
legalactstoeliminate thequantitative restrictions upon thedateofaccession.
Customs Valuation
Question 19 Latvia hasstated thatthenewCustoms Code willcome intoforce in1997. Could
Latvia bemore specific onthetiming andonwhen adraft Code willbeavailable forreview by
trading partners?
Reply
ThenewCustoms Code thatisnowrenamed asCustoms Lawwillcome intoforce in
1July1997. Thedraft Customs Law(Customs Code) waspublished inthenewspaper "MuitasWT/ACC/LVA/16
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Vèstnesis". After coming intoforce theCustoms Lawwillbepublished intheofficial edition ofthe
Republic ofLatvia inthenewspaper "Latvijas Vèstnesis". ThedraftCustoms Code hasalready been
made available through WTO Secretariat.
Anti-Dumping, Countervailing Duties, Safeguard Regimes
Question 20 Does Latvia have atimetable fordrafting legislation onanti-dumping and
countervailing measures?
Reply
Latvia hasatimetable fordrafting legislation onCountervailing Duties. TheDraft willbe
introduced totheCabinet ofMinisters by1998. Latvia hascontinued theexamination ofpossibilities
forintroduction thelegislation onAnti-dumping Duties. Theanalyses willbecompleted atthebeginning
of1998.
(2) Export Regulation
Customs Tariffs, FeesandCharges forServices Rendered, Application ofInternal Taxes
toExports
Question 21 Please confirm thatrawhides andskins ofbovine orequine animals, whether or
notdehaired orsplitarenotsubject toexport tariff.
Please specify which antiques Latvia wishes tomaintain export duties on,andthereasons for
these.
Reply
Latvia confirms thatrawhides andskins ofbovine orequine animals, whether ornotdehaired
orsplitarenotsubject toexport tariff.
Table 5infactual summary indicates allproducts having export tariffs.
Latvia willmaintain export tariffs forthefollowing positions ofantique goods ofChapter 97:
9701 10002
9701 10003
9701 90002
9701 90003
9702 00002
9702 00003
9703 00002
9703 00003
9706 00000
Thereason ofmaintenance ofexport tariffs forthementioned positions isthatLatvia iswilling
torestrict export ofantiques astheyarenational values andassuchshould bemaintained forfuture
generations.
Export Subsidies
Question 22 Please confirm thatthere arenoquantitative restrictions related totheduty
drawback scheme.WT/ACC/LVA/16
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Reply
When temporally importing goods forprocessing noquantitative restrictions areapplied.
(3) Internal Policies Affecting Foreign Trade inGoods
Industrial Policy, including Subsidies
Question 23 Weseekadditional information onLatvia 'sindustrial policy, tobereflected in
theworking party report. Does Latvia maintain anyindustrial support programme tobenotified
inaccordance withtheAgreement onSubsidies andCountervailing Measures?
Reply
Latvia doesnothaveanindustrial support programme thatshould benotified inaccordance
withtheAgreement onSubsidies andCountervailing Measures.
Technical Barriers toTrade, Sanitary andPhytosanitary Measures
Question 24 How isconformity ofexporters 'certificates established? Does every individual
exporter have toapply forrecognition totheLatvian Certification authorities?
Reply
Everyindividualexporterdoesnothavetoapplyforrecognitionofcertificates.Latviarecognises
certificates issued bythethirdparties which arecorresponding totheestablished conformity assessment
system.
State Trading Entities
Question 25 Please provide theoperating budget fortheTobacco Labelling UnitintheLatvian
State Revenue Service andtheoperating budget fortheState Alcoholic Monopoly Board.
Latvia hasexplained what theState Alcoholic Monopoly Board doesnotdo.However, wewould
appreciate adetailed explanation oftheState Alcoholic Monopoly Board activities andoperations.
Why wasitestablished andwhat areitsprimary functions?
Reply
Tobacco Labelling Division isoneofLatvian State Revenue Service ’sstructural units.
i.e.,Tobacco Labelling Division doesnothaveaseparate budget.
Alcohol Monopoly Department isaStateadministrative bodysubordinated totheMinistry of
Finance andformed bytheCabinet ofMinisters. Ithasthestatus ofalegalperson andseparate budget
funding. In1996 thebudget financing assigned totheAlcohol Monopoly Department constituted
96304,00 LVL (salaries +social tax).Alcohol Monopoly Department intheform ofState control
bodywasfounded withanaimtoputinorder theprocesses ofalcohol production, import, wholesale
andstorage according tothevalid legislative acts.Thecirculation ofalcohol inLatvia isregulated
bytheRulesoftheCabinetofMinistersNo.248"OnStateMonopolyonSpiritandAlcoholicBeverages",
dated 20June1996.
Themain functions ofTheAlcohol Monopoly Department arethefollowing :
(a) licensing ofentrepreneurs dealing withalcohol;WT/ACC/LVA/16
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(b) State control ofthelicensed entrepreneurs ’economic activities;
(c) protection ofconsumers ’interests against tradeinalcohol which isdangerous tohuman health.
Inorder toascertain thestatus oftheStateCereal Bureau asaStatetrading enterprise therelevant
amendments havebeenworked outtotheLaw"OnLatvia ’sGrain Market andStateGrain Reserves".
Government Procurement
Question 26 Does national treatment apply inthefieldofgovernment procurement? Ifnot,
please provide more information.
Reply
ThenewLatvian LawonPublic Procurement (inforce starting from 1January 1997) states
thatatendering withparticipation offoreign competitors ismandatory, iftheexpected value of
construction works exceeds Ls4,000,000 Ls(i.e.5,000,000 SDR) ortheexpected value ofotherworks
orsupplies exceeds Ls104.000-(i.e.130.000 SDR). Thenational treatment applies inthefieldof
Government Procurement.
Question 27 The"factual summary" states thatLatvia isprepared tobegin negotiations for
membershipintheWTOAgreementonGovernmentProcurement,andhopestobecomeasignatory
"shortly after accession". CanLatvia confirm thisinformation? HasLatvia submitted acopy
ofitsdraft legislation totheWTO Secretariat forreview?
Reply
ThenewLatvian Law"OnPublic Procurement" ispassed bytheParliament (24October 1996).
TheEnglish version oftheLawwillbeprepared andsubmitted totheWTO secretariat.
Latvia intends tostarttonegotiate accession totheAgreement onGovernment Procurement
atthesecond halfof1997andhasbegun toprepare accession documents. However weneedadditional
consultations withWTO experts before negotiations start.
Agricultural Policies
Question 28 Regarding themanner inwhich Latvia determines shortages (document
WT/ACC/LVA/12, reply 46),themain problem weseeisthatagricultural trade inLatvia isnot
wholly theresult ofmarket forces. TheState stillhasenormous control indetermining which
products andtheamount ofwhich maybeimported based onestimated future shortages. Likewise,
theLatvian Government setstariff-rate quotas tofacilitate trade instead ofallowing market forces
todetermine trade. Istheultimate goalofLatvia tohaveamarket based trading system? Ifso,
when doesLatvia foresee thishappening?
Reply
During theregaining ofindependence, Latvia hasalways declared thatitsultimate goalisa
freemarket orientated system. Forsometime,ourcountry isintransition fromcentrally planed economy
toafreemarket economy andisobjectively affected byrapid privatisation andsubstantial structural
changes. Stillthere arecertain regulations concerning trade regime, buttheyarerelatively small and
onlysome products areaffected.
Tariff ratequotas areintroduced tofacilitate trade inawayoftariff reduction, which are
distributed among importers inanon-discriminatory fashion.WT/ACC/LVA/16
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Question 29 Indocument WT/ACC/LVA/12 (replies 49and55),Latvia states thatitisnecessary
fortemporary measures toremain ineffect until thenewlegislation onSafeguard measures is
upgraded toWTO standards. When willthenewlegislation onsafeguard measures beupgraded
toWTO standards?
Reply
Thenewlegislation onSafeguards willbedrafted by1January 1998.
Question 30 Theinformation provided indocument WT/ACC/LVA/12, reply 11istoogeneral.
While itisgoodtoknow that2.2percentofimports areforprocessing, whatproducts areincluded
inthistotal? Please provide abreakdown toshow thedistribution (shares). Information byHS
lineshould beprovided.
Reply
In1995 thefollowing agricultural products were temporarily imported forprocessing.
Chapter Description Customs value
(Ls)
02 Meat andedible meatoffal 235909,-
03 Fishandcrustaceans, molluscs andother aquatic invertebrates 497659,-
04 Dairy produce; birds'eggs; natural honey; edible products of
animal origin, notelsewhere201405,-
05 Products ofanimal origin; notelsewhere specified orincluded 42071,-
07 Edible vegetables andcertain roots andtubers 81933,-
08 Edible fruitandnuts; peelofcitrus fruits ormelons 569240,-
09 Coffee, teamateandspices 344596,-
11 Products ofthemilling industry, malt, starches, inulin, wheat
gluten6543,-
12 Oilseeds andoleaginous fruits; miscellaneous grains, seeds and
fruits, industrial ormedicinal plants, straw andfodder20122,-
15 Animal orvegetable fatsoilsandtheircleavage products, prepared
edible fats,animal orvegetable waxes12131,-
17 Sugars andsugar confectionery 21250,-
18 Cocoa andcocoa preparations 11033,-
20 Preparations ofvegetables, fruit, nutsorother parts ofplants 114540,-
22 Beverages, spirits andvinegar 2438269,-
Total: 4596701,-
Trade-Related Intellectual Property Regime
Question 31 Pursuant toArticle 65paragraph 3willLatvia apply forthedelay ofapplication
ofselected provisions oftheTRIPS agreements?WT/ACC/LVA/16
Page15
Reply
Yes,Latvia isstillwilling toapply forthedelay ofapplication ofselected provisions ofthe
TRIPS Agreement. Latvia willendeavour tofullyimplement theTRIPS Agreement from thedateof
accession. However, itshould betaken intoaccount, thattheimplementation oftheTRIPS requirements
doesnotincorporate onlyenactment ofappropriate legislation acts.Tobeeffective itshould besupported
aswellbycertain administrative andother measures suchasdevelopment ofimplementing regulations,
training ofexecutive officers, judges, attorneys, etc.Therefore initsoriginal statement Latvia expressed
itswillingness toapply, inaccordance withArticle 65paragraph 3oftheTRIPS Agreement, forthe
delay ofapplication ofselected provisions oftheTRIPS Agreement.
Question 32 Does Latvia apply anyorganised system ofborder control toprevent influx of
commodities thatwould infringe therights ofthirdpersons (what preventive measures arecurrently
being used)?
Reply
No,insofarasPartIII,section 4(Special Requirements toBorder Measures) oftheTRIPS
Agreement isconcerned, itdoesnot.Asalready mentioned inthelastsentence ofthesecond partof
theanswer toquestion 36,Latvia hasnotyetimplemented thisprovisions oftheTRIPS Agreement.
Anyhow,theexistingnationallegislationcovers,toacertainextent,alikemeasures.Forexample,
theLawonCopyright andNeighbouring Rights of11May1993, provides (Article 57ofSection IV)
that"Depending onthenature andconsequences oftheviolation ofcopyright and/or neighbouring
rights, theviolator maybecharged withcivil, administrative orcriminal responsibility pursuant to
legislation ineffect intheRepublic ofLatvia". Similar provisions arecovered bytheTrademark Law
of9March 1993(Article 20).TheLatvian Criminal Code includes Articles 136(amended), 136and
136,adopted on21September 1995, which provide forcriminal responsibility incaseofviolation
ofcopyright and/or neighbouring rights (acopyofArticles 130,136and136oftheLatvian Criminal
Code (inLatvian) were earlier submitted totheWTO Secretariat).
Atlast,some ministerial measures haverecently beentaken toreduce theillegal reproduction
andinflux ofcommodities thatwould infringe therights ofthirdpersons (forexample, withregard
toaudio-visual works andphonograms).
Question 33 DoesLatvia provide patent protection inpharmaceutical, chemical andagricultural
(food)sectors?DoesLatviaintendtointroducetheinstitutionofsupplementaryprotectioncertificate
forpharmaceutical products andagricultural chemical products which isbecoming practice in
western Europe?
Reply
Yes,Latviaprovidespatentprotectioninpharmaceutical,chemicalandagricultural(food)sectors.
Neither thePatent Lawof1993, northeArticle 3(“Object ofinvention andnon-patentable objects)
oftheamended Patent Lawof1995 contain anylimitations astopatentability ofthesaidproducts.
(i) Latvia hasintroduced supplementary protection forpharmaceutical products inApril 1995when
theamended Patent Lawentered intoforce. According toArticle 30(5)ofthePatent Law
ifthesubject ofthepatented invention isasubstance (medical orveterinary product) covered
bytheprovisions oftheexisting Lawonpharmaceuticals, oraprocess formanufacturing such
asubstance, oranewapplication ofaknown substance, thePatent Office may, ontherequest
oftheofthepatent owner, extend thepatent term...(20years) ...butnomore thanfor5years.WT/ACC/LVA/16
Page16
(ii) Latvia ’sPatent Lawhasnoprovisions withregard tosupplementary protection foragricultural
chemical products.
Question 34 Please inform ifLatvia anticipates acceding tothose international conventions on
intellectual property rights towhich itisnotaparty yet,ifsotowhich ones? Especially, isLatvia
anticipating becoming aparty totheProtocol totheMadrid Agreement onInternational
Registration ofMarks (Madrid 1989)?
Reply
AsLatvia hasalready informed theWTO Working Party ithasacceded totheConvention
Establishing theWorld Intellectual Property Organisation, re-established itsmembership intheParis
Union bywayofaccession totheStockholm ActoftheParisConvention fortheProtection ofIndustrial
Property, acceded tothePatent Co-operation Treaty, Madrid Agreement Concerning theInternational
Registration ofMarks, Budapest Treaty ontheInternational Recognition oftheDeposit of
Micro-organisms forthePurposes ofPatent Procedure, NiceAgreement Concerning theInternational
Classification ofGoods andServices forthePurposes oftheRegistration ofMarks, BernConvention
fortheProtection ofLiterary andArtistic Works. Italsosigned theTrademark LawTreaty (notyet
ratified).
Atpresent Latvia ’sGovernment considers thedraftinstruments ofaccession totheInternational
Convention fortheProtection ofPerformers, Producers ofPhonograms andBroadcasting Organisations
(Rome, 1961) andtheGeneva Convention fortheProtection ofProducers ofPhonograms against
Unauthorised Duplication oftheirPhonograms.
Latvia alsoplanstoaccede totheProtocol totheMadrid Agreement concerning theInternational
Registration ofMarks andratify theTrademark LawTreaty inthenearest future.
Question 35 Please clarify thefirstsentence ofparagraph 72oftheFactual Summary ofpoints
raised. Which rights wasLatvia committed toimplement under abilateral agreement (any
geographical indications andlayout designs orallintellectual property rights asforeseen inthe
TRIPS Agreement)? Istheyear1995 correct? Ifthetextmeans thatacommitment wasmade
in1995 toimplement geographical indications andlayout designs bytheendoftheyear, then
some information should beadded about thestate ofplayatpresent.
Reply
Thefirstsentence ofparagraph 72should beunderstood asfollows:
"Latvia considers thatitsexisting legislation is,inprinciple, inconformity withthe
main requirements oftheTRIPS Agreement."
Yet,ithasnotimplemented theprovisions ofPartII,sections 3(Geographical Indications)
and6(Layout-Designs (Topographies) ofIntegrated Circuits). According toitsbilateral agreements
Latviawascommittedtoimplementprotectionofgeographicalindicationsandlayout-designs/topographies
ofintegrated circuits bytheendof1995.
Besides, Latvia isnotready tofullymeettherequirements ofPartIII,sections 3(Provisional
Measures) and4(Border Measures) oftheTRIPS Agreement.
Atpresent thedraftLawonProtection ofTopographies ofIntegrated Circuits andadjoining
draftLawamending theLatvian Criminal Code withrespect toprotection oftopographies arestillWT/ACC/LVA/16
Page17
under consideration ofcompetent authorities. They aresupposed topasstheParliament bytheend
of1996 oratthebeginning of1997.
ThedraftLawonProtection ofGeographical Indications hasnotbeenpassed forconsideration
ofcompetent national authorities for,onestimating some conceptual versions thereof, itwasdecided
toinclude itsrelevant provisions intoanew(amended) Trademark Law. Thefirstdraftoftheamended
Trademark Lawcomprising theprovisions onprotection ofgeographical indications is,atthepresent,
under consideration ofnational experts (additional explanations aregiven alsointheanswer to
question 36).
Question 36 Latvia states thatitslegislation onintellectual property protection isinconformity
withtheWTO TRIPS Agreement withtheexception ofprotection ofgeographical indications
andlayout design ofintegrated circuits. Latvia states thatitiscommitted toimplement legislation
addressing these points bytheendof1995. What isthestatus ofthislegislation? Please submit
thislegislation totheWTO Secretariat forreview byinterested Members.
Reply
With regard tothepreviously made statement concerning theprotection ofgeographical
indications andlayout-design ofintegrated circuits which Latvia wascommitted toimplement bythe
endof1995 Latvia should explain that:
1. ThedraftLawonProtection ofTopographies ofIntegrated Circuits anddraftLawamending
theLatvian Criminal Code withrespect toprotection oftopographies arestillunder consideration
ofcompetent authorities. Theyaresupposed topasstheParliament bytheendof1996oratthebeginning
of1997.
Theprovisions ofthedraftLawarebased onandinclude substantial provisions oftherelevant
DirectiveoftheEuropeanEconomicCommunityCouncil(87/54/EEC:CouncilDirectiveof16December
1986 onthelegal protection oftopographies ofsemiconductor products )andareadequate tothe
provisions ofsection 6oftheTRIPS Agreement. Atthepresent thedraft isavailable andmaybe
submitted totheWTO Secretariat onlyinLatvian;
2. ThedraftLawonProtection ofGeographical Indications isstillinthestage ofdrafting. The
reason ofthedelay inimplementing thisLatvia ’scommitment isthatafterthepreliminary consideration
ofthefirstversion ofthedraftinquestion thenational competent authorities havecome toaconclusion
thatinstead ofadoption ofanexpress LawonProtection ofGeographical Indications itisworthwhile
toinclude itsrelevant provisions intoanew(amended) Trademark Law. Thefirstdraftoftheamended
Trademark Lawcomprising theprovisions onprotection ofgeographical indications is,atthepresent,
under consideration ofnational experts. Itissupposed thatthefinaldraftwillbesubmitted tocompetent
national authorities atthebeginning of1997.
Itisthefirmintention ofLatvia toaccelerate asmuch aspossible itslegislation making process
inorder toensure fullimplementation oftheTRIPS Agreement atthetimeofaccession anditendeavours
tofacilitate theprocess.
InsofarasPartIII,sections 3and4oftheTRIPS Agreement areconcerned Latvia caninform
thatanother draftLaw, i.e.,theexpress draftLawonUnfair Competition, hasrecently beenprepared
andisunder consideration ofnational experts. Thisdraftwhich isintended tosubstitute therelevant
provisions oftheexisting Lawof1991onCompetition andMonopoly Restriction comprises, besides
all,provisions thatareadequate totheprovisions ofPartIII,sections 3(Provisional Measures) and
4(Border Measures) oftheTRIPS Agreement.WT/ACC/LVA/16
Page18
POLICIES AFFECTING TRADE INSERVICES
Question 37 Wehaveasked whether issuance ofwork permits forforeigners inLatvia issubject
toaneconomic needs test(WT/ACC/LVA/12, question 71).Initsreply, Latvia stated that"to
getwork permit -foreigner whohassigned contract withLatvian company hastopresent tothe
Employment State Office theeducation certificate. Ifthiseducation certificate comforts tothe
future job,person canreceive thework permit". Inouropinion theanswer given byLatvia refers
onlytoonecategory offoreigners, i.e.itdeals withforeigners whohave signed acontract with
aLatvian company. With respect tothese persons weunderstand thatissuance ofwork permits
fortheforeigners, whohave signed acontract withaLatvian company, isnotasubject toan
economic needs test.Could Latvia confirm this?
Furthermore, wewould liketogetmore detailed information about thesystem ofapproval of
education certificates mentioned intheLatvian answer tothequestion. Weareparticularly
interested toknow whether thissystem isbased onnon-discriminatory basis.
Finally, wewould liketoknow whether issuance ofwork permits fortheother categories of
foreigners, such asself-employed persons andintra-corporate transferees, isnotsubject toan
economic needs testinLatvia?
Reply
Thefollowing istheinformation ontheorder forobtaining awork permit:
1. Inorder toreceive aconfirmation ofajobsummon anemployer must submit tothelocal
institution oftheStateEmployment Office (tothecorresponding department ofadistrict oritsbureau)
afilled jobsummon form-acopyforeachforeigner orperson without acitizenship willing towork
intheRepublic ofLatvia anddocuments confirming thespecialisation orqualification ofthisperson;
2. Thelocal institution oftheState Employment office examines thedocuments submitted by
employer notlaterthaninatimeoftwoweeks.
3. Ajobsummon isconfirmed byasignature oftheHead oftheStateEmployment Office, which
hastobecertified byaseal.
4. Ajobsummonshallbeconfirmedifthefreeworkingplaceorvacancyofaspecialistisregistered
inthelocalinstitution oftheStateEmployment Office andifithasbeenfreeformore thanamonth
before anarrangement ofasummon, andifnounemployed ofcorresponding qualification havebeen
registered.
5. Ajobsummon shallnotbeconfirmed incasewhen anemployer hasrejected more thentwo
pretenders ofappropriate qualification tothevacancy forwarded bytheState Employment Office.
6. Theactual employment relations ofaforeigner orperson without citizenship withemployers
oftheRepublic ofLatvia maynotbetaken asabaseforaconfirmation ofajobsummon.
7. Ifthetermofajobsummon hasexpired, butaforeigner orperson without citizenship and
employer wanttoprolong it,thematter ofprolongation hastobedealtwithaccording tothisregulation.
Theterm ofajobsummon maybeprolonged onlyifthere arenounemployed ofcorresponding
qualification registered inthelocalinstitution oftheState Employment Office.
Incaseofassignment byacorporation asanofficial representative inLatvia, person
(intra-corporate transferee) doesnotneedaworkpermit andmustonlyregister intheMinistry ofJustice.WT/ACC/LVA/16
Page19
Thecategories offoreigners, suchasself-employed persons andintra-corporate transferees
aresubject toaneconomic needs test,i.e.thegeneral rules concerning obtaining work permits are
applied, except somecategories ofintra-corporate transferees occupying senior managerial andexecutive
positions.
TheLawonUniversities provides thatanexpertise oneducation acquired abroad shallbecarried
outbytheCentre ofAcademic Information. Thisinstitution wasfounded inDecember of1994 and
people working therehavegained experience inexpertise ofdiplomas oreducational sections acquired
abroad andtheypractically carry outanexpertise afterorder ofprivate persons andinstitutions.
Inorder tosignin1997EC/UNESCO/EU Common Convention onRecognition ofDiplomas,
Latvia hadtofulfil thefollowing conditions:
(a) inthesphere ofinformation. Eachcountry mustregularly andprecisely inform other countries
ontheowneducational system andamendments init.Since 1994Latvian Centre ofAcademic
Information hasentered thenetwork ofEuropean National Information Centre ofAcademic
Recognition andMobility ofECUNESCO andEUandregularly provides information onthe
university education inLatvia. In1997 itwillofficially enter theEUNARIC network of
recognition ofdiplomas. TheCentre ofAcademic Information hassummarised alldescriptions
ofuniversity study programmes recognised bytheLatvian State, intheform ofdiskette itis
available fortheinstitutions ofrecognition ofdiplomas inother countries; partly itisavailable
inINTERNET andsoon willbeprinted. TheCentre ofAcademic Information provides
consultations ondiplomas acquired inLatvia afterrequest ofENIC orNARIC centres;
(b) inthesphere ofensuring ofthequality oftheuniversity degree. Taking intoaccount thediversity
ofeducational systems ofpotential Members oftheConvention, itisnomore required for
thequalification acquired abroad tobewholly equivalent tothatofhome country, butitmust
beacceptable inthecountry where thepretender wants tocontinue hiseducation. Suchapproach
requires areciprocal trustofMember countries. Oneofthepreconditions forareciprocal trust
isthesystem ofevaluating ofuniversity education (study programmes, educational institutions)
byforeign experts. Inthesphere ofevaluating oftheuniversity degree theCabinet ofMinisters
hasaccepted regulations onaccreditation, aCentre ofEvaluating oftheQuality ofUniversity
Degree hasbeenestablished, thebasic documents havebeenprepared.
TRADE AGREEMENTS
Question 38 Does Latvia have anypreferential trade agreements withanycountry orentity
otherthantheEU,Norway,Switzerland,LithuaniaandEstonia?Ifso,pleaselistthemanddescribe
them.
How canLatvia 'spreferential trade agreements withthese countries andtheEUbeconsidered
tobeconsistent withGATT Article XXIV given thatagricultural products areexcluded from
thecoverage ofsome oftheagreements? How willLatvia conform these arrangements tobe
consistent withArticle XXIV oftheGATT 1994?
Which ofthearrangements provide foraplanleading tofullfreetrade inagricultural products?
Which ofthese arrangements willleadtozerotariffs foragriculture?
CanLatvia advise oftheoutcome oftheagriculture negotiations under thetrade agreements with
theother Baltic countries (document WT/L/49, reply 63)?WT/ACC/LVA/16
Page20
What isthestatus oftheTrilateral Agreement onTrade inAgricultural Products being negotiated
among theBaltic nations? Asnecessary, please discuss plans forcompleting thisagreement.
Forthecustoms tariff quotas resulting from theFreeTrade Agreement withtheEU,referred
toindocument WT/ACC/LVA/12 reply 53,please provide thetariff rates andamounts ofthe
tariff quotas byHSlineapplying totheEU.Please explain therelationship between these tariff
quotas andtheEUpreferential tariffs contained indocument WT/L/53 of9March 1995.
Reply
Currently Latvia hasfreetrade agreements withtheEU,EFTA, Lithuania, Estonia, Czech
Republic, Slovak Republic andSlovenia. Alloftheabove mentioned agreements include bothindustrial
andagricultural products; theagreements havebeenconcluded under Article XXIV oftheGATT 1994
andsome ofthem(EU,EFTA) havebeennotified totheWTO inorder topassappropriate examination
procedures ontheirconformity withtheArticle XXIV oftheGATT 1994.
Latvia hasnofreetrade agreements excluding agricultural products from thescope. The
agreement between Estonia, Latvia, Lithuania onfreetrade inagricultural products hasbeensigned
on16June1996, andwilltakeeffect from 1January 1997.
TheFreeTrade Agreement withtheEUprovides forcustoms tariff quotas. That means a
moreliberal traderegime oncertain amounts ofcertain products. Asimilar tariffreduction inconnection
toamounts canbesetoutside ofthese customs tariff quotas approved bytheFreeTrade Agreement,
butthisdoesnotmean trade-limiting, ineffect, itisactually trade-liberalising, duetothefact,that
therelaxed trade regime issetonlyatthepoint when acertain products 'deficit isoccurred inthe
localmarket, andinorder tostimulate import ofthisproducts. Theamounts ofcustoms tariff quotas
aredistributed bywayofcompetition onequal conditions forallimporters.
Latvia hassubmitted itsFTAwiththeEUaswellasAnnexes tothisAgreement totheWTO
Secretariat. Thelistoftheproducts covered bytariff-rate quotas andquantities foragricultural products
aresetinAnnex XIofthisAgreement. Thein-quota tariff andout-of quota tariffratesforAgricultural
products aresetinAnnex XofthisAgreement. Thelistofproducts covered bytariff ratequotas and
quantities forprocessed agricultural products aresetinAnnex 4toProtocol 2ofthisAgreement. The
in-quota tariff andout-of quota tariff ratesforprocessed agricultural products aresetinAnnex 3to
Protocol 2ofthisAgreement.