 
  WORLD TRADE  
ORGANIZATION  WT/REG174/1 
27 July 2004 
 
 (04-3239) 
Committee on Regional Trade Agreements Original:   English 
 
  
FREE TRADE AGREEMENT BETWEEN ARMENIA AND THE RUSSIAN FEDERATION 
 
 
 The following communication, dated 17 June 2004, is being circulated at the request of the 
Delegation of Armenia.  
_______________ 
 
AGREEMENT 
BETWEEN THE GOVERNMENT OF REPUBLIC OF ARMENIA AND  
THE GOVERNMENT OF RUSSIAN FEDERATION ON FREE TRADE 
 
 The Government of Republic of Armenia  and the Government of Russian Federation , 
hereafter referred to as the Contracting Parties,  
 
 Guided by the provisions of the Treaty on Friendship, Co-operation and Mutual Security 
between the Republic of Armenia and the Russian Federation signed on 26 December 1991,   
 Taking  into consideration the multilateral Agreemen t on Co-operation in the Area of Foreign 
Trade Activities of 15 May 1992,  
 
 Keeping  in mind the multilateral Agreement on Co-ordination of Work on Issues Related to 
Export Control of Raw Materials, Equipment, Te chnologies and Services Which Can Be Used to 
Create Weapons of Mass Destruction and Missile s for Delivery Thereof of 26 June 1992,  
  Striving  to develop trade and economic cooperatio n between Republic of Armenia and the 
Russian Federation based upon equality and mutual benefits,    Based  upon the sovereign right of each Contracti ng Party to conduct its independent foreign 
economic policy and enforce relevant international obligations,  
 
 Aiming  at fostering economic activities, providing full employment, increasing productivity 
and rational use of resources,  
 
 Intending  to promote the establishment of common market for goods, services, capital and 
labour,  
  HAVE AGREED  as follows:  
 
Article 1 
 
1. Contracting Parties shall not apply customs du ties, taxes and charges having equivalent 
impact on exportation and/or importation of goods originating from the customs territory of one of 
Contracting Parties and destined for the custom s territory of the other Contracting Party.  WT/REG174/1 
Page 2  
 
 Special cases of application of this trade regime between the two countries to commodities on 
the basis of the agreed nomenclatu re shall be formalized by annual documents, which shall be an 
integral part of this Agreement.  
 
2. For the purposes of this Agreement, and for its effective term, goods originating from the 
territories of Contracting Par ties shall be deemed to be: 
(a) Completely produced in the territory of Contracting Parties;  
(b) Having been processed on the territory of Contracting Parties by utilizing raw 
materials and components of third country origin, whose classification under the 
Harmonized System of Commodity Description and Coding changed in at least one 
of the first four digits due to this processing;  
(c) Produced with the use of raw materials and components listed in "b" above provided 
that their total cost does not exceed a fixed proportion of the export price of 
commodities sold.  
 Detailed rules on establishing commodity origin s shall be coordinated by Contracting Parties 
and included in a document that shall become an integral part of this Agreement.  
 
Article 2 
 
 Contracting Parties shall not: 
 
 
- directly or indirectly impose any internal  taxes or charges on commodities covered by 
this Agreement, in excess of corresponding taxes and charges imposed on similar 
commodities of domestic production or of third country origin;  
 
- apply any special limitations or conditions to commodities covered by this Agreement, 
in excess of limitations or conditions appl ied under similar circumstances to similar 
commodities of domestic production or of third country origin;  
 - apply rules to warehousing, reloading, storage, and transportation of goods that 
originating from the territory of the other Cont racting Party, as well as to payments and 
payment transfers, other than those applied in similar situations regarding goods of 
domestic production or of  third country origin.  
 
Article 3 
 
1. Contracting Parties shall refrain from intro ducing quantitative restrictions on export and/or 
import of goods within the framework of this Agreement.  
2. Quantitative restrictions referred to in Para graph 1 of this Article  may be introduced 
unilaterally with strictly defined time frames only in the event of sharp deficit in the balance of 
payment -until the balance of payment situation st abilizes, for the purpose of implementing measures 
provided for in article 4 of this Agreement.  
3. Quantitative restrictions referred to in Paragrap h 1 of this Article may also be introduced by 
mutual agreement of the parties and shall be included in the annual docum ents referred to in Article 1, 
paragraph 1 of this Agreement.   WT/REG174/1 
 Page 3 
 
 
 4. A Contracting Party using quantitative restricti ons under Paragraph 2 of  this Article shall, 
upon request of the other Contracting Party, provide the necessary information on the reasons, forms, 
and possible time frames for using the abovementioned restrictions.  
5. Contracting Parties shall endeavour to solve all issues arising in relation to application of 
quantitative restrictions under Paragraph 2 of this Article by means of consultations.  
Article 4 
 
 Neither Contracting Party sha ll permit re-export of goods in relation to export of which the 
other Contracting Party where these goods originate from applies measures of tariff-based or non-
tariff-based regulation.  
 
 Re-export of such goods into third countries is permitted only upon written consent and on 
conditions stipulated by an authorized state agency of the country of origin of these goods. In the 
event of non-compliance with this provision, the Cont racting Party whose interests have been violated 
has the right for unilateral introduction of measures to  regulate export of goods into the territory of the 
state that permitted the non-sancti oned re-export. In addition the la tter shall repay the full amount of 
such re-export proceeds to the country of origin of relevant goods.  
 
 The term "re-export" refers to the export of goods originating from the customs territory of 
one Contracting Party, as defined in Article 1,  paragraph 2 of this Agreement, by the other 
Contracting Party to the outside of the customs territory of the latter, for the purpose of exporting it into a third country.  
 
Article 5 
 
 Contracting Parties will on a regular basis exchange information on customs issues, including customs statistics. Relevant authorized bodies of the Contracting Parties shal l coordinate the way to 
exchange such information.  
 
Article 6 
 
 Contracting Parties will inform each other of all exceptions to the existing customs tariffs 
applied unilaterally.   
Article 7 
 
 Contracting Parties shall consider incompatib le with the purposes of this Agreement any 
unfair business practices and shall not allow an d eliminate the following methods thereof:  
 
- agreements between enterprises, decisions made by the associations of enterprises, and 
general methods of business practices aimed at hindering or limiting competition or 
disrupting the competitive environment in th e territories of the Contracting Parties;  
 
- actions by means of which one or a few enterprises use their dominant position, 
limiting competition within the entire terr itory of the Contracting Parties or a 
significant part thereof.  
 
Article 8 
 
 For the purposes of applying measures of ta riff and non-tariff regu lation in the bilateral 
economic relationships, statistical information exch ange, and for carrying out customs procedures, the WT/REG174/1 
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 Contracting Parties will use the unified, nine-d igit Commodity Nomenclature of Foreign Economic 
Activities (CN FEA), based upon th e Harmonized Commodity Descri ption and Coding System and 
Combined Tariffs and Statistics Nomenclature of the EEC. For their own needs Contracting Parties 
may expend this Commodity Nomenclature beyond the nine digits if necessary.  
 
 Introduction of the reference original of th e Commodity Nomenclature is carried out by the 
Russian Federation through the exis ting representations in the releva nt international organizations, 
until the Republic of Armenia declares its independent introduction of such an original.  
  
Article 9 
  Contracting Parties shall not use state aid in the form of subsidies to enterprises or in any 
other form if the result of such state aid would be the distortion of normal economic conditions in the 
territory of the other Contracting Party.  
 
Article 10 
 
 Contracting Parties agree that the adherence to the principle of freedom of transit is the major 
condition for achieving goals of this Agreement and a substantial element in the process of their 
integration into the system of international division of labour and cooperation.  
  Thereupon each Contracting Party shall provide  unimpeded transit through its territory for 
goods originating from the customs territory of th e other Contracting Party or third countries and 
destined for the customs territory of the other Contracting Party or any third country, and shall supply 
exporters, importers, and carriers with all facilitie s and services available and necessary for ensuring 
transit on terms not worse than those granted to nation al exporters, importers, or carriers, or exporters, 
importers or carriers of any other third state.  
 
 Transit tariffs for all types of transportati on, including tariffs for loading and unloading 
operations, shall be economically justified and shall not exceed normal operational expenses, 
including reasonable profit rates. Contracting Pa rties shall not request payment for warehousing, 
reloading, storage, and transportation of goods in the currency of any third state.  
 
 Contracting Parties shall conclude a special agreement on transit.  
 
Article 11 
 
 Contracting Parties have the right to take measures which they consider necessary for 
protecting their vital interests or which are undoub tedly necessary for compliance with international 
agreements to which they are or intend to be come parties, if these measures relate to:  
 
- information affecting the inte rests of national defence;  
 
- trade in arms, munitions and military equipment;  
 
- research or production related to the defence needs;  
 
- supply of materials and equipment used in nuclear industry;  
 - protection of public morality and public order;  
 
- protection of industrial and intellectual property;  
  WT/REG174/1 
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 - gold, silver, and other precious metals and stones; 
 
- protection of human, animal and plant life.  
 
Article 12 
 
 With the goal of pursuing coordinated polic y of export control in relation to the third 
countries on goods and services included in common check lists, Contracting Parties shall establish an 
Inter-State Coordination Council on Export Control consisting of the heads of national bodies of 
export control and support staff. Functions of Inter-State Coordination Council shall include the approval of common check lists of goods and services, examination of cases of export control requirements violation, as well as elaboration of proposals to introduce or to call off sanctions.  
 
Article 13 
 
 Provisions of this Agreement shall replace th e provisions of agreements concluded earlier by 
the Contracting Parties insofar as th e latter are incompatible or identical with the former. Contracting 
Parties will instruct their competent authorities to pr epare an appropriate prot ocol on this matter.  
 
Article 14 
  This Agreement shall not affect other Agre ements concluded earlie r by the Contracting 
Parties with third countries.  
 
Article 15 
 
 Nothing in this Agreement shall prevent Cont racting Parties from esta blishing relationships 
which do not contradict the goals and terms of this Agreement with the states which are not parties to 
this Agreement and with their associa tions and international organizations. 
  
Article 16 
 
 Disputes between Contracting Parties related to interpretation or application of provisions of 
this Agreement shall be resolved  by means of negotiations.  
 
 Contracting Parties shall endeavour to avoid conflicting situations in mutual trade.  
 
 Contracting Parties establish that claims and disputes between economic entities of both 
countries resulting from interpretati on or implementation of commercial contracts or transactions, in 
case they cannot be settled amicably on the basis of  consultations and negotiations and unless agreed 
otherwise, will be the exclusive competence of arbitration tribunals (permanent or ad hoc) established 
in the territory of Contracting Parties or the territory  of the third states specified by the Parties having 
signed the contract.  
 
 The latter can also define the applicable subs tantive law, norms and procedures as well as the 
premises for the hearing of the case.  
 
 Each Contracting Party shall assure in its te rritory effective means to recognise and enforce 
arbitration awards.   WT/REG174/1 
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 Article 17 
 
 To achieve the goals of this Agreement and to elaborate recommendations for developing 
trade and economic cooperation betw een the two countries, Contract ing Parties have agreed to 
establish a joint Armenian-Russian commission.  
 
Article 18 
 
 Contracting Parties have agreed that the Republic of Armenia may establish its trade 
representation in the Russian Federation, and the Russian Federation may establish its trade 
representation in the Republic of Armenia. The le gal status of these trade representations, their 
functions and residence will be agreed by the Contracting Parties in a separate agreement.  
 
Article 19 
  
 Any state may accede to this Agreement on terms and conditions which would be agreed between the acceding state and the Contracting Parties.  
 
Article 20 
 
 An integral part of this Agreement shall be a Protocol on exceptions to free trade regime 
which the Parties shall sign in one month after the signature of the Agreement.  
 
Article 21 
 
 This Agreement becomes effective upon exchange of notices of completion by the 
Contracting Parties of intra-state procedur es necessary for its entry into force.  
 
 This Agreement will become invalid after twel ve months from the date, when one of the 
Contracting Parties notifies the ot her Contracting Party in writing of its desire to terminate this 
Agreement.  
 
 This Agreement after its termination shall ap ply to the contracts among the enterprises and 
organizations of both countries, concluded, but not implemented during the period when the 
Agreement is in force.  
  Done in the City of Erevan, on September 30, 1992 in two originals, each in Armenian and 
Russian, both texts being equally authentic.  
 
 The Agreement has come into force on March 25, 1993.  
 
 
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