RESTRICTED
WORLD TRADE WT/ACC/LVA/8
19February 1996
ORGANIZATION(96-0602)
Original: English
ACCESSION OFLATVIA
Additional Questions andReplies
ThePermanent Mission oftheRepublic ofLatvia hassubmitted thereplies toquestions raised
atthemeeting oftheWorking Party heldon13November 1995, withtherequest thattheybecirculated
tothemembers oftheWorking Party. Thequestions andreplies arereproduced hereunder.
_______________
TABLE OFCONTENTS
page number
I. INTRODUCTION AND SUMMARY OBSERVATION
2. Institutional framework
(b) price system (questions 1-3) 2
(e) financial sector (questions 4-12) 5
II. ECONOMY AND FOREIGN TRADE
1. Economy
(b) privatization (questions 13-15) 8
III. FOREIGN TRADE REGIME
1. Import regulations
(a) evaluation ofthecustoms tariff regulation (questions 16-19) 10
(b) customs tariff nomenclature,
types ofduties, etc. (question 20) 13
(c) taxation regime (question 21) 14
(d) non-tariff measures and
import licensing procedures (questions 22-30) 14
(e) customs valuation (questions 31-32) 24
(h) standards andcertification (questions 33-44) 24
(j) anti-dumping andcountervailing duty (questions 45-46) 27
(I) sanitary andphytosanitary measures (questions 47-50) 27
2. Export regulations
(b) export licensing systems (question 51) 28
3. Export initiatives, including subsidies (question 52) 29WT/ACC/LVA/8
Page2
4. Regulations oftrade intransit (question 53) 29
IV. OTHER POLICIES AFFECTING FOREIGN TRADE
2. Agricultural policy (questions 54-63) 29
5. Foreign anddomestic investment policy (question 64) 35
6. Government procurement (question 65) 35
7. State trading enterprises (questions 66-68) 36
9. Trade related aspects ofintellectual property rights (questions 69-71) 38
V. INSTITUTIONAL BASE FOR TRADE AND
ECONOMIC RELATIONS WITH
THIRD COUNTRIES (questions 72-74) 40
VI. LAWS AND LEGAL ACTS 41
_______________
I. INTRODUCTION AND SUMMARY OBSERVATIONS
2 Institutional framework
(b) Price System
1. Please listallthesectors which areorcould beconsidered "natural monopolies" under
Latvian law,regulation, ordecree.
- Please listallenterprises thatareacting as"natural monopolies" under these provisions.
Doanyofthese agencies import orexport goods orservices?
- Arethere anyspecific sub-sectors ofsuch"natural monopolies" which areopentoforeign
participation?
- Areprice controls only applied forproducts considered output ofsuch "natural
monopolies," oraretheyapplied inother sectors?
Reply
Thenatural monopolies areacting inthese sectors:
-energetic;
-communication services;
-transport;
-water-supply andsewerage.
Enterprises, thatareacting asnatural monopolies are:WT/ACC/LVA/8
Page3
*inenergetic sector:
-State Stock Company "Latvijas gâze" (Latvian Gas);
-State Stock Company "Latvenergo";
*incommunication services sector:
-Limited Liability Company "Lattelekom";
*intransport sector:
-State Stock Company "Latvijas dzelzceî ø"(Latvian Railways) ;
*water-supply andsewerage sector:
-heating-supply enterprises;
-water-supply andsewerage self-government enterprises.
StateStockCompanies"Latvijasgâze"and"Latvenergo"provideimportofenergyresources,butLimited
Liability Company "Lattelekom" andState Stock Company "Latvijas dzelzceî ø"import andexport
accordingly communication andtransport services.
There arealsosameopened sub-sectors ofnatural monopolies openforcompetition byother operators,
including foreign participation:
-energetic sectors;
-telecommunication;
-natural gassupply.
Price control andregulation iscarried outaccording totheRegulations No185"Formation ofprices
andtariffs ofgoods andservices" accepted bytheCabinet ofMinisters on23August 1994. Inorder
tomaintain availability ofservices forpopulation andatthesame timetoguarantee acceptable level
ofthese services price regulation isusedinthese sectors:
-energy;
-agriculture;
-forestry sector;
-school books publishing, financed from State budget;
-pharmacy;
-mailservices;
-portservices;
-airport services;
-archives services;
-housing rent,power-supply andresidential services.
2. Weremain interested inLatvia ’sprice liberalisation efforts (questions 27-29 ofWT/L/49)
andfollow upinWT/ACC/LVA/4. Please update information ontheapplication ofprice controls,
minimum ormaximum levels, toimported anddomestic goods andservices.
- Does thegovernment maintain guaranteed prices foranyother sectors?
- What sectors, goods andservices, remain subject toState price control? Please listby
HSlineitemtheimported goods categories subject tosuchrestrictions.
Reply
Minimum ormaximum price levels arestillusedtosome domestic andimported services:
- transit services foroilandoilproducts bypipelines;WT/ACC/LVA/8
Page4
- reloading ofoilandoilproducts inports;
- transit shipment ofoilandoilproducts byrailway transport;
- long-distance transportation ofpassengers andluggage bymotor transport;
- transportation ofpassengers andluggage bymotor transport ininternational lines;
- international transportation ofcargoes andpassengers byrailway transport according to
international agreements;
- transportation ofcargoes andpassengers byrailway indomestic lines;
- shipservices inports;
- rent(maximum level).
Yes,thegovernment maintains guaranteed prices forfoodgrain purchased forgovernment reserve.
Prices ofimport goods arenotcontrolled byState. Onlyforthepharmaceutical sector aspecial order
forprice formation isestablished. Thisorder means thatthefinalprice cannot exceed theimport or
production price formore than20percent.
3. Aregrains andpharmaceuticals theonlytwocategories ofgoods currently under price
control? How arethese controls enforced, e.g.,vis-a-vis imports anddomestic output?
- Please elaborate onthetimetable fortheelimination offixed prices. Inparticular, what
isthestatus ofefforts toliberalise prices inthehousing, energy, and transportation
sectors?
- Theresponse onpage 5(WT/ACC/LVA/4) states thatprices have been fullyliberalised
-including grain prices -andthatLatvia doesnotmaintain either minimum ormaximum
prices. Yetthegovernment purchases grain atguaranteed prices which seems tobe
inconsistent withtheabove claim. Please elaborate onthisapparent discrepancy.
Reply
Recently there hasbeencreated suchasituation inLatvia thatgrain prices onthedomestic market
havebeenlower thanthecorresponding world market prices. Every successive yearthegovernment
fixeshigher andhigher buying-in grain prices inorder toachieve levelling ofdomestic grain prices
andtoreach world market prices.
Control onpharmaceutical sector prices isenforced inthewaythatfinalpricecannotexceed theimport
price orproduction price formore than20percent.Control isunder thesupervision oftheMinistry
ofWelfare.
TheRegulation oftheCabinet ofMinisters No.185,passed on23August 1994, states thefields in
which thegovernment canregulate anddetermine prices. Grains andpharmaceuticals areamong these
fields.
Pricetariffs areregularly revised inthehousing, energy andtransportation sectors bylocal-governments
according toproduction costs services.
According totheRegulation oftheCabinet ofMinisters No.185,passed on23August 1994, "On
Forming ofPrices andTariffs ofGoods andServices" thedetermining oftheguaranteed priceatwhich
theState buysfood-quality grain lieswithin thecompetence oftheCabinet ofMinisters.
Simultaneously theRegulation "OntheStateBudget for1995" doesnotforesee orinclude thefinancial
resources needed toguarantee theabove mentioned fixed prices.WT/ACC/LVA/8
Page5
Resources werenotprovided fromtheStatebudget intheprevious years aswell. Hence, upuntilthis
time, food-quality grain prices (aspertains totheState guaranteed prices) were really aguide-line,
andgrain waspurchased (forprices thatdeveloped intheopen market simultaneously) byprivate
entrepreneurs.
During 1995, theStatesetthepriceatwhich grain waspurchased forStatereserves, which are32000
tons,which, inturn,is3.55percentofthetotalannual crop. However, only19300 tonswereactually
purchased, andthatis12700 lessthanexpected.
(e) Financial Sector
4. Wearepleased thatLatvia doesnotintend tointroduce anynewrestrictions intheservice
sector. Document WT/L/63 listsanextensive array ofservice activities thatrequire business
licences.
- What isthecurrent status ofLatvian government efforts tonarrow thescope ofactivities
requiring suchlicensing?
- Inreviewing thepossible reasons forrefusal foralicence, itseems thattwopoints are
somewhat vague andarbitrary, i.e.,point (I)thefirmhasnoexperience necessary for
import operation performance; andpoint (ii)thedescription oftheactivities ofthefirm
anddocuments submitted create doubt about thesecurity andstability ofthefirmare
subjective.
- Does notsuchauthority create barriers totrade bylimiting those thatcantrade onan
arbitrary andhidden basis?
- How isonetoknow when theissuance ofaspecial permit hasbeen "detained without
motivation" asnoted intheresponse toquestion 74inWT/L/49?
Reply
According totheRegulation no.321of31October 1995"Onlimitation ofEntrepreneurial Activity"
service activities arethemain subject tolicensing. Thislicensing isameasure toensure professional
levelofservices andguarantee consumer rights.
Stateandlocal-government institutions, professional unions andcorporations, authorized byrelevant
legislation andcompetent inissuing thespecial licences, establish thecriteria, inorder ofthereceipt
ofthespecial licences. Import licensing hasmainly statistical functions.
Procedure thattheentrepreneurial activity shallbeconsidered permitted iftheissue ofspecial permit
isdetained without motivation after30dayssince theapplication hasbeensubmitted, isusedtoavoid
thesituation where anentrepreneur isnotprovided witharesponse bytheauthorities longer than30
days.
5. InL/7526/Add.3, onpage5,Latvia notes thatthere arerestrictions ontheability offoreign
servicesupplierstoobtainprivatisationcertificatesandtoengageinactivitiesintheprimarymarket
forgovernment securities.
- Whatisthecontentoftheserestrictionsastheyapplytoforeignfinancialservicesproviders?
Reply
According tothelegislation oftheRepublic ofLatvia every foreign legal ornatural entity cantake
partintheprivatisation process andcanbeapproved asaprivatisation subject. After thatitisallowed
toobtain precise amount ofcertificates necessary fortheparticular privatisation act.WT/ACC/LVA/8
Page6
Onlybanks registered inLatvia (including branches andsubsidiaries offoreign banks licensed inLatvia)
areentitled toparticipate intheprimary market forgovernment securities. Foreign banks thathave
notestablished branches/subsidiaries inLatvia aswellasother foreign institutions andnatural persons,
mayparticipate inthesecondary market forsaidsecurities.
Foreign natural orlegalpersons canbuyprivatisation certificates onlyiftheyhavewonintheauction
(tender) ofacompany undergoing privatisation. Jointventures aswellasbranches offoreign companies
registered intheRepublic ofLatvia havenorestrictions forbuying privatisation certificates.
Foreign service suppliers canobtain privatisation certificates from licensed privatisation certificate
intermediaries.
6. Concerning theresponse toquestion 8inWT/L/49, have anynewbanking regulations
beenimposed since thefailure ofBank Baltija? Ifso,please provide copies. Howwillthisfailure
affect foreign firms seeking tooffer financial services inLatvia?
Reply
AnewLaw"OnCredit Institutions" (English language translation provided) hasbeenadopted bythe
Latvian Parliament (Saeima) inOctober 1995. Neither theLaw, noranyother regulations impose
restrictions onforeign institutions seeking toprovide financial andbanking services inLatvia. Full
national treatment isapplied toforeign suppliers ofbanking services thatarelicensed inLatvia (branches
orsubsidiaries offoreign banks); these institutions areallowed toprovide allbanking andfinancial
services onthesame conditions asdomestic banks.
7. Inquestion 31inWT/L/49, theUnited States notes thereply ofLatvia which states that
there arelicensing requirements forcertain financial activities, including, licence bytheCabinet
ofMinisters fortheoperation ofstock exchanges; activities insecurities andprivatisation certificate
market; andlicence bytheBank ofLatvia for(i)purchase andsaleofforeign currency; (ii)
activities ofbanks andcredit institutions; and(iii)bank operations andcredit operations with
precious metals andtheir products.
- Arethere activities defined inpara5,(v)through (xvi), oftheAnnex onFinancial Services
thatcannot beundertaken byaforeign financial service provider thatisestablished and
appropriately licensed tooperate inLatvia?
- Arecredit institutions permitted toengage insecurities activities directly orbya
directly-owned subsidiary?
Reply
There arenoactivities defined inpara5(v)through (xvi), oftheAnnex onFinancial Services that
cannot beundertaken byafinancial service provider thatisestablished andappropriately licensed in
Latvia.
Banking institutions (including branches andsubsidiaries offoreign banks) dulyauthorised inLatvia,
arepermitted toengage insecurities activities directly. Foreign banks mayengage insecurities activities
byadirectly-owned subsidiary authorised inLatvia.
8. Could Latvia provide thetextofanylawsorregulations notyetprovided thatgovern
theapproval forentry orestablishment ofacommercial presence, acquisition ofexisting financialWT/ACC/LVA/8
Page7
institution, expansion ortheundertaking ofnewactivities byforeign financial institutions where
foreign institutions maybetreated differently (i.e.,maybeatadisadvantage compared todomestic
institutions inlikecircumstances), orwhere there arelimitations ofthetypelisted inArticle XVI
oftheGATS?
Reply
SeetheLaw"OnCredit Institutions", Section IIandIII.Inrespect toestablishment ofacommercial
presence, acquisition orexpansion ofanexisting financial institution, undertaking newactivities, foreign
institutions aretreated inaccordance withgeneral requirements (national treatment). Inwhatconcerns
banking andfinancial services, there arenolimitations ofthetypelisted inArticle XVIoftheGATS.
9. Theresponse toquestion 2indicates thattheapplications foralicence toprovide credit
institution services byforeign banks arereviewed bytheBank ofLatvia Council, rather than
bytheBank ofLatvia Board, fordomestic banks..
- What aretheinstitutional andoperational differences between theBank ofLatvia Council
andBank ofLatvia Board? Please explain theimportant differences inconsideration
undertaken bytheCouncil compared toconsideration bytheBoard.
- How does thereview offoreign applications differ byCouncil review? Aredifferent
requirements applied?
- What criteria areapplied bytheBank ofLatvia Council when itconsiders anapplication
foralicence byaforeign bank? Arethese thesame ordifferent from thecriteria applied
bytheBank ofLatvia Board when itconsiders theapplication ofadomestic entity?
Reply
TheCouncil oftheBank ofLatvia (generally corresponds totheinternationally usedterm"Board of
Governors") isthehighest authority oftheBankofLatvia. Thechairman oftheCouncil isthePresident
(Governor) oftheBankofLatvia. Themembers oftheCouncil areappointed bytheSaeima (Parliament
ofLatvia). TheBoard oftheBank ofLatvia consists oftheBanks ’executives ("Executive Board"),
anditisheaded bytheVicePresident ("Deputy Governor").
Except fortherequirements thatthebranches/subsidiaries offoreign banks havetobeauthorised by
theCouncil (domestic banks -bytheBoard) oftheBank ofLatvia, there arenodifferences inthe
procedures andrequirements forlicensing foreign anddomestic entities. Thecriteria, review procedures
ofapplication, timeframe etc.areestablished bytheLaw, applied equally bytheCouncil andtheBoard,
anddonotdiffer fordomestic andforeign institutions.
10. WT/ACC/LVA/3 states that"tobeissued alicence forstarting business inthesecurities
market, arealperson should takeanexamination..." Does thisanswer refer exclusively to
individuals licensed tobesecurities brokers? Could anyother business activity (asdefined in
para5oftheAnnex onFinancial Services) bestarted ifalicence were obtained? Areanyofthe
conditions forgranting alicence inconsistent withGATS Article XVI?
Reply
Yes,tobesecurities broker, anatural person should takeanexamination. Thelicensed person can
startanyother business activity. There arenoconditions forgranting alicence inconsistent withGATS
Article XVI.WT/ACC/LVA/8
Page8
11. WT/ACC/LVA/3statesthat"theenterpriseswhichareenrolledontotheEnterpriseRegister
oftheRepublic ofLatvia, areeligible toinvolve inbusiness activities intheLatvian securities
market asbroker companies." What business activity (asdefined inpara 5oftheAnnex on
Financial Services) could beundertaken bybroker companies? Areanyoftheconditions for
enrolment inconsistent withGATS Article XVI?
Reply
Broker companies canopen, holdandmanage securities account ofissuers, investors andtheirown
aswellasperform intermediary activities (purchase, saleandexchange ofsecurities andother legally
permitted trading activities, aswellthedistribution ofsecurities). There arenoconditions forenrolment
inconsistent withGATS Article XVI.
12. Concerning theLaw"OnBanks", WT/ACC/LVA/5 states that"Commercial banks and
other credit institutions maybegin activities upon thereceipt ofalicence from theBank ofLatvia
andupon registration attheRegister ofEnterprises oftheRepublic ofLatvia. TheBank ofLatvia
determines theprocedure forregistering andissuing licences."
- Must criteria bemetforregistration? Ifyes,areanyofthecriteria inconsistent withGATS
Article XVI? Or,isregistration automatic forlicensed credit institutions?
Reply
Thecriteria forregistration ofcredit institutions attheRegister ofEnterprises arenotinconsistent with
Article XVIoftheGATS.
II. ECONOMY AND FOREIGN TRADE
1. Economy
Privatisation
13. InWT/L/49/Add.1 Latvia provides anupdate ofprivatisation efforts underway inthe
agriculturalsector.InWT/ACC/LVA/4,LatviaindicatesthattheinformationprovidedinWT/L/49
isnolonger valid.
- Please provide updated andco-ordinated responses tothequestions inWT/L/49 concerning
thescope andpaceofprivatisation forbothagricultural andindustrial enterprises.
- Please elaborate onthesectors thegovernment ofLatvia doesnotplantoprivatise, and
thebasis fornotprivatising.
Reply
Privatisation ofagricultural companies proceeded under supervision oftheMinistry ofAgriculture
pursuant tothelaw"Onprivatisation ofAgricultural Enterprises andFishermen ’sCollective Farms",
21June1994.WT/ACC/LVA/8
Page9
Privatisation ofEnterprises oftheMinistry ofAgriculture (asof1November 1995)
Branches orgroups Number ofState
Companiesofwhich
privatisedPrivatisation
started
1.Companies tobeprivatised in
compliance withspecial laws
1.1.dairy companies
1.2.meatproducing companies
1.3.bakeries
1.4.grain processing companies
1.5.agricultural service companies182
15
14
14
17
12296
15
11
13
5
5283
---
2
---
11
70
2.Companies tobeprivatised
according tothegeneral
legislation, including 2sugar
factories 92 35 4
184of613agricultural statute societies arecompletely privatised andhence excluded fromtheEnterprise
register,but275enterpriseshaveoptedforvoluntaryself-bankruptcy.Thisyearwillmarkthecompletion
ofagricultural-service enterprise privatisation. Milk andmeet-processing enterprises areprivatised,
forming stock companies. 6grain-processing enterprises areprivatised andtheremaining 11willbe
privatised inthebeginning of1996. Mass-privatisation ofscientific-research farms andtraining research
farms isnotanticipated. Thepossible privatisation ofthesefacilities isbeing examined onanindividual
basis.
Generally, there arenospecific sectors which thegovernment ofLatvia doesnotplantoprivatise.
14. Inearlier documents Latvia advised thatprivatisation intheagricultural sector would
becompleted by1995 andby1996, 75percentofState owned enterprises would beprivatised.
canLatvia provide report onhowthese aspects ofprivatisation areprogressing?
Reply
Atpresent 176,fromtheaggregate of613,agricultural statutory associations areprivatised, but218
associations havestarted privatisation. Theprivatisation ofagriculture service enterprises willbe
completedpracticallybeforetheendofthisyear.Theenterprisesofdairyandmeatindustryareprivatised
byforming ofjointstock companies. Sixenterprises ofgrain processing industry areprivatised, but
theremaining 11enterprises willbeprivatised atthebeginning of1996.
Itisnotprovided forthemass privatisation ofscientific-research farms andtraining-research farms.
Theopportunities relevant toprivatisation ofsuchfarms areconsidered individually.
15. InWT/ACC/LVA/4, Latvia indicates thatsome sectors -medical care, social welfare
services, medicine, specific agricultural sub-sectors -willbeprivatised overlonger timeperiod.
- Over what timeperiod doesthegovernment ofLatvia envisage suchaprivatisation?
- Please confirm thatforeign firms willbeabletoparticipate inthisprivatisation. Please
elaborate onwhether andhowLatvia plans toallow foreign companies toprovide goods
andservices inthese sectors -including health, culture, science andcommunications -
prior toprivatisation, andafterwards.WT/ACC/LVA/8
Page10
Reply
AccordingtoNationalProgramme"PrivatisationProgramme,thewayofit’srealisationandtargets",
accepted bytheCabinet ofMinisters on21February 1995, there should beprivatised 75percentof
State enterprises tilltheendof1996.
Themain criteria ofprivatisation are:
1. Enterprise should beabletooperate better afterprivatisation
2. There should notcome private monopolies instead ofprevious natural orregional ones.
Thefirstoneisthereason whysome sectors -medical care,social welfare services, medicine, specific
agricultural sub-sectors willbeprivatised overlonger timeperiod.
Thesecond oneisthereason whyinfrastructure objects (roads, railroads, public transport, mailetc.)
arenotplanned tobeprivatised inthefirststage ofprivatisation.
Thetimeperiod isnotdetermined yet,butthetarget oftheGovernment ofLatvia istoendthe
privatisation process assoonaspossible.
Yes,foreign firms areabletoparticipate inprivatisation. Twointernational tenders uptonoware
organised byPrivatisation Agency withsupport oftheMinistry ofFinance ofGermany. 91facility
wasoffered and358bidswere received.
III. FOREIGN TRADE REGIME
1. Import regulation
(a) Evaluation oftheCustoms Tariff Regulation
16. Intheresponses toquestions 5and7inWT/ACC/LVA/3, Latvia states thatincreased
tariff rates willremain forgoods where theproduction ofsuchgoods is‘economically important ’
forLatvia. Wewould beinterested inlistofsuchproducts.
Reply
Atpresent thefollowing items areof"economic importance" toLatvia: livecattle, livepigs, beef,
pork, poultry flesh, edible meatoffalofcattle, pigandpoultry, several dairy produce, eggs, grains
ofwheat, barley, rye,oataswellasflour andmeals thereof, sugar.
17. Although Latvia hasnotmade aformal tariff offer, itappears from document
WT/L/57/Add.l thatLatvia isthinking oftariff binding intheagricultural sector of50percent
andatalevelof30percentfornon-agricultural products. Suchamarket access offerfrom Latvia
would notbeafornegotiation formydelegation, norconsistent withLatvia ’sstatement concerning
itseconomic andpolicy objectives injoining theWTO.
- Please explain therationale formaintaining agricultural tariffs above 20percentlevel.
- Themember encourages Latvia tomaintain lowcustom ’stariff duties, andtousethe
temporary protection provides byArticle XIXfordomestic procedures which have been
injured byimport surges. Article XIX exists inorder toprovide analternative to
establishing apermanently hightariff level.WT/ACC/LVA/8
Page16
I. Outline ofthesystem
The Latvian Export Control System, based onCouncil Regulations (EC) No3381/94 of
19December 1994setting upaCommunity regime forthecontrol ofexports ofdual-use goods, also
includes licensing ofimport ofstrategic goods, products, services andtechnologies.
II. Purposes andcoverage oflicensing
1. Thelicensing ofimport ofstrategic goods, products, services andtechnologies within Latvian
Export-ImportControlSystemcoversmunitionsanddual-usegoodsinaccordancewiththeInternational
Munitions ListandEUListofDual-Use Goods.
2. Thelicensing system applies toallstrategic goods onthecontrol listsregardless oftheirorigin.
3. Thelicensing system issetupfornational security andnon-proliferation reasons andisnot
intended torestrict quantity orvalue ofimports.
4. ThelegalbaseoftheLatvian Export Control System consists of"Regulations ofExport, Import,
andTransit ofStrategic Goods, Products, Services andTechnologies" and"Regulations oftheControl
Committee ofStrategic Export andImport" adopted bytheCabinet ofMinisters in27June1995, which
areinforce inLatvia since 1July1995 withaforce oflaw.Thelistofcontrolled goods (annexes to
the"Regulations") contains former COCOM Munitions ListandListofDual-use Equipment, Materials
andTechnologies. Thelatest isadirect translation ofAnnex 1oftheCouncil Regulations (EC) No
3381/94 of19December 1994 setting upaCommunity regime forthecontrol ofexports ofdual-use
goods. Thelistsofcontrolled goods aredesignated bytheGovernment. TheGovernment canabolish
theSystem without legislative approval.
III. Procedures
1. Forproducts under restrictions:
(a) Information ontheLatvian Export -Import Control system andthelistsofcontrolled goods
werepublishedintheofficialNewspaper"LatvijasVèstnesis".Besidesthatthereisaprogramme
ofawareness which includes seminars andpublishing ofinformation forrepresentatives of
industry andtrade.
(b) There arenoquotas forimport ofstrategic goods.
(c) Thenames ofimporters towhom licences have been allocated aremade known tothe
governments andexport control authorities ofexporting countries bymeans ofEndUser
Statements andImport Certificates ofstrategic goods issued bytheLatvian Export andImport
Control Department. Therestofthequestion (c)isnotrelated tothelicensing system ofstrategic
goods.
(d) Seeanswer toquestion (d).
(e) Inthesimplest cases theimport licence isissued onthesameday,themaximum length oftime
forprocessing applications inaccordance withthe"Regulations" is20daysincluding expertise
and50daysifthere isadenial bytheExport andImport Control Department andanappeal
before theControl Committee ofStrategic Export andImport.
(f) Theimport licences forstrategic goods arevalid 6months from thedateofissue andvalid
forasingle shipment ofgoods only-there arenogeneral licences.WT/ACC/LVA/8
Page17
(g) Thelicence application isconsidered bytheExport andImport Control Department. Inthe
caseofdenialimportermayappealbeforetheControlCommitteeofStrategicExportandImport.
Thedenial bytheCommittee maybeappealed before theCabinet ofMinisters. Thedenial
bytheCabinet ofMinisters isfinal.
(h) Seeanswer toquestion (c).
(I) Seeanswer toquestion (c).
(j) Import licences forstrategic goods areissued ongrounds ofexport licences oftheexporting
country andtheexporting country receives Delivery Verification Certificate.
(k) Forstrategic goods there arenoconditions thatgoods should beexported andnotsoldinthe
domestic market, butquite contrary.
2. Where thereisnoquantitative limitonimportation ofaproduct oronimports fromaparticular
country:
(a) Making anapplication foranimport licence inadvance itisnecessary toconsider thatlicence
isvalid for6months from thedateofissue. Forthetimelimittoobtain licences seeanswer
1.(e).Import ofstrategic goods without licences arenotallowed regardless ofother
circumstances.
(b) Seeanswer 1.(c).
(c) There arenoseasonal limitations forimport ofstrategic goods.
(d) Theimporter have toapproach oneadministrative organ -Export andImport Control
Department. Thedecision toissueortodenylicence ismade bytheDepartment. Incomplicated
casestheDepartmentemploysateamoftechnicalexperts.LicencesareauthorisedbytheControl
Committee ofStrategic Export andImport.
3. Anapplication foranimport licence ofstrategic goods maybedenied because offailure to
meetthecriteria stated inthe‘’Regulations ’’orongrounds ofnational security. Inthelater
casethereasons fordenial maynotbegiven. Inthecaseofdenial importer mayappeal before
theControl Committee ofStrategic Export andImport. Thedenial bytheCommittee maybe
appealed before theCabinet ofMinisters. Thedenial bytheCabinet ofMinisters isfinal.
IV. Eligibility ofimports toapply forlicence.
1. Handing inthedeclaration oftheapplication forimport ofstrategic goods theperson shall
produce apermit forentrepreneurial activities withcertain goods orforperforming another activities
withthem, ifitisnecessary inaccordance withthelegislative acts.Allpersons whomeetthesafety
requirements setupbytheresponsible ministries areeligible toobtain permits forentrepreneurial
activities withstrategic goods. There isaregistration fee.Thelistsofauthorised importers arenot
published, butthelistsarenotconfidential.
VI. Documentation andother requirements forapplication
forlicence
1. Inorder toreceive alicence theperson (ortheagent authorised bytheperson) shallfillout
thedeclaration oftheapplication forimport ofstrategic goods.WT/ACC/LVA/8
Page18
Handing inthedeclaration oftheapplication forimport ofstrategic goods totheDepartment, theperson
shallproduce thefollowing documents:
- anagreement orexport licence ofthecountry sending thegoods;
- EndUseStatement signed bytheperson;
- description ofthegoods;
- theregistration certificate oftheperson oranequal document;
- licence (special permit) forentrepreneurial activity connected withcertain strategic goods or
forperforming another activities withthem.
2. Upon actual importation ofstrategic goods intoLatvia theimport licence ofstrategic goods
andthecustoms declaration arerequired.
3. Thefeeforaimport licence ofstrategic goods is2,5percentfrom thevalue ofthegoods.
4. Thefeeforimport licence ispaidonreceiving ofthelicence.
VII. Conditions oflicensing
1. Theimport licence ofstrategic goods isvalidfor6months. Ifanextension ofthetermofthe
validity ofthelicence isnecessary, allthedocuments mentioned inVI.1.shallbesubmitted onceagain.
2. There isnopenalty forthenon-utilisation ofalicence.
3. Theissued licence maybeusedonlybytheperson named inthelicence.
4. There arenoother conditions attached totheissue oflicences.
VIII. Other procedural requirements
1. There arenoother administrative procedures, apartfromimport licensing priortoimportation.
2. There arenorestrictions orspecial conditions forbanking operations withforeign exchange
forimports inLatvia, except thenormal banking procedure.
24. Latvia responses toquestions inWT/L/49 andWT/ACC/LVA/4 concerning restrictions
ontheimportation ofethyl alcohol andspirits, tobacco, grain, andsugar arecontradictory.
Information supplied inWT/ACC/LVA/4 indicates thattheright totrade inthese products is
controlled bylicence. Please elaborate onhowthese goods aretraded inLatvia, withspecial
emphasis on(a)whocanqualify; (b)howmany traders aresanctioned; (c)whythelistof
permissible importers isnotpublished; (d)howthese products aredistributed internally; and
(e)whether trade insimilar domestic goods issubject tothesame requirements.
Reply
1. Licences issued fortrading donotserve onlyforcontrol, theydemonstrate Statecontribution
toestablishcertainorderinthemarket,providingforproduction,importandconsumergoodstendencies,
activities aimed atraising thequality ofgoods forsaleandprotecting theconsumers ’interests. The
above mentioned becomes more urgent astogoods likealcoholic beverages, where atthesame time
oneistofindtheoptimum balance between theproduction, import, sales andimplementing the
programme forlimiting theconsumption. Alongside import licensing ofalcoholic beverages obviouslyWT/ACC/LVA/8
Page19
setsupcertain limits concerning illegal production orimport andsoleads toreduction inconsumption
oflow-quality orevendangerous tohuman health beverages.
(a) TheListofImporters ofalcoholic beverages isaccepted byAlcohol Monopoly Department
ofTheMinistry ofFinance according totheapplications ofimporting companies andtheir
wishes tohavebusiness inthisareaofentrepreneurship.
(b) Besides that,thenumber oflicensed importers andtraders isnotcontrolled orlimited by
administrative means.
(c) TheListofLicensed Companies isnotpublished asthisprocess isinfluenced bythecontinuous
changes inthenumber ofsuchcompanies depending onhome market demand, butLatvia is
intending tostartregular publication oftheList.Theofficially accepted ListofImporters is
available toanyinterested person being directly involved inproduction, import orsales of
alcoholic beverages.
(d) Bothhome-made andimported goods aredistributed inthedomestic market through theretail
trade andwholesale netandaccording tocompletely equal organisational andeconomic
regulations.
(e) There arenoextra demands forsalesanddistribution oftheimported alcoholic beverages if
compared todomestic products.
2. Incompliance withtheLaw"OnLatvia Grain Market andState Grain Reserves", theState
Cereal Bureau annually prepares theBalance Sheet forGrain Production andConsumption andsubmits
ittotheGovernment oftheRepublic ofLatvia whoapproves it.Ifthere isadeficit forcertain types
ofgrain, theStateCereals Bureau opens atariff quota ofdetermined value within quota tariff rateof
0.5%. After theBalance Sheet provided bytheState Cereal Bureau hasbeenapproved within one
week, theState Cereal Bureau places inthemass media theinformation about tenders forthenext
yeartoimport certain types ofgrain which areinsortie inthenextyear.
Theenterprises wishing toimport grains toLatvia havetoapply totheStateCereal Bureau, indicating
intheirapplications thegrain volume theysuggest toimport within theyearandtheestimated timetable
fordeliveries. TheState Cereal Bureau summarises thesubmitted applications, andtheState Cereal
Bureau Board considers them andappoints theentrepreneurs forperforming grain importation. The
State Cereal Bureau issues import licences oftheapproved pattern totheentrepreneurs chosen.
Therights toimport grainvolumes exceeding 1.000 tonsperyeararegranted totheenterprises appointed
inconsequence ofatender arranged bytheState Cereal Bureau Board.
(a) Thevolume ofimported grain iscontrolled bylicence.
(b) Thenumber ofsanctioned traders isnotdetermined -itdepends ondemand
(c) After theforeign trade volume hasbeenapproved, atender isannounced. Thetender results
having beensummed up,thelistoftheentrepreneurs allowed toperform foreign trade is
published inthemass media.
(d),(e) Thegiven products aredistributed without anyrestrictions inthedomestic market.
3.(a) Enterprises (companies) which havegotthespecial permit (licence) (further on"licence") issued
bytheMinistry ofFinance havethelegalrighttoproduce, import forsalesandwholesalesWT/ACC/LVA/8
Page20
tobacco goods, butenterprises (companies) holding thelicence issued bythecityorlocal
municipality havetherighttoforretail trade oftobacco goods. Theimport licence forsales
ofimported tobacco goods canbeissued toanyenterprise (company) registered inLatvia which
hasapplied tothelicensing committee byhanding indocuments specified byRegulations
No.335,Article 8oftheMinistry ofFinance, dated 1August, 1995 "OnOrder Regulating
Issue ofSpecial Permits (Licences) forProduction forSales, Import forSales andWholesale
ofTobacco Goods" andobserving alltherespective conditions;
(b) Atpresent (09.12.95) 2enterprises areproducing tobacco goods forsales, 11enterprises are
importing forsalesand76enterprises (companies) areinbusiness forwholesale;
(c) Thelistofenterprises (companies) having therighttoimport tobacco goods forsaleshasbeen
published several times innewspapers "Latvijas Vestnesis" (official Government newspaper),
"Diena", "Dienas Bizness";
(d) Thedistribution ofimported tobacco goods inthehome market isnotlimited. Anyenterprise
registered inLatvia anddealing withwholesale orretail trade intobacco goods hastheright
topurchase themfromenterprises (companies) holding thelicence forimporting tobacco goods
forsale.Intheregions thesefunctions arebasically performed byco-operative societies which
signcontracts withthebiggest importers oftobacco goods;
(e) Latvian producers oftobacco goods likeanyother enterprise (company) aretoobserve allthe
regulationsaccordingto‘’OrderofIssuingSpecialPermits(Licences)forProductionofTobacco
Goods forSale, Import forSales andWholesale ’’.
4. Inaccordance withtheorder ofdistribution ofsugar wholesale andimport licences, regulations
onthedistribution ofthenamed licences arepassed bytheSugar Wholesale andImport Licensing
Committee. Licences arevalid for5years andtheyareissued byMinistry ofAgriculture. Inorder
toobtain alicence onemustsubmit asubstantiated request tothelicensing committee, providing the
following pertinent information:
(1) Acopyofenterprise registration certificate;
(2) Taxinspection documents;
(3) Declaration ofamounts ofsugar instorage warehouses, submitting documents ofselling/buying;
(4) Product delivery contracts/invoices, andcopies ofintention protocol;
(5) Information onprojected purchase/import volume assortment.
Enterprises which havereceived licences forimport ofsugar havetoprovide every quarter (within
10days’timeintheendofthequarter) informational updates tothelicensing committee ontheuse
androute ofthelicence
25. Theimport licensing system applied tocertain grains andprocessed products isfor
‘statisticalpurposesinconnectionwithevaluation(comparisonofdomesticproductionwithdomestic
consumption) andtoensure thatimported grains meetquality requirements ’.(WT/ACC/LVA/4,
pages 13-14). Intheprocedures section, paragraph 1(b)page 14,itisnoted thatthesizeofthe
quotas isdetermined onanannual basis. CanLatvia explain whyitsimport licensing system on
grains should notbeconsidered animport quota?. CanLatvia advise why‘inpractice, import
licensing forgrains arerequested veryrarely ’(page 13)?Would Latvia please advise ofthedetails
ofgrain imports overrecent years?WT/ACC/LVA/8
Page21
Reply
Some import regulations aremaintained forthefollowing HSnumbers: 1001(wheat), 1002(rye), 1003
(barley), 1004(oats), 1101(wheat flour), 1102(other cereal flours), 1103(cereal grouts), 1104(cereal
grains otherwise worked), 2300 (residues andwaste from foodindustries). Licensing fortherestof
grain products aremerely forstatistical purposes.
Incompliance withtheLaw"OnLatvian Grain Market andStateGrain Reserves" thefollowing grains
andcereal products arelicensed forstatistical purposes:
HS VOLUME (thsd. tons) OFIMPORTED GRAINS
actually
importedfixed by
the
Cabinetallowed
by
licencesactually
importedfixed by
the
Cabinetallowed
by
licencesactually
imported
1993 1994 1995
1001 (wheat)
milling wheat
feedwheat44,0 50,0 60,1 45,0 90,0
100,072,0
5,534,3
0
1002 (rye) 23,0
1003 (barley) 80,0 13,4 1,8
1004 (oats)
1005 (corn) 2,0 59,9 5,7 10,1 7,1
1006 (rice) 1,27
1007 (sorghum)
1008 (buck-wheat) 5,3 1,0 4,1 0,9
1008 (millet) 1,6 0,4
1101 (wheat flour) 12,6 12,0
1102 (ryeflour)
1103 (cereals) 5,6 1,3 0,2
1104 (ground grain) 11,6
(corn)3,4
1107 (malt) 3,5 1,8 21,1 2,5
26. Latviamaintainsaprohibitiononsugarimports(page13,WT/ACC/LVA/4),whichappears
tocover rawandrefined sugar ofHS1701. Would Latvia confirm thisorprovide details? Import
licences canbeissued toimplement exceptions totheprohibition (page 14),hasLatvia imported
sugar since theprohibition wasincreased? Ifso,provided bysource country? Wastheprohibition
implemented inMay 1993? How doesLatvia justify thisprohibition interms oftherelevant
provisions oftheGATT/WTO.
Reply
Latvia confirms thatwhite sugar import intoLatvia wasputunder banasofMay1993, butthe
prohibition doesnotapply torawsugar. Since entering intoforce ofthisbansugar isimported only
forproduction use.Sugar wasimported fromGermany, Denmark, Estonia, Great Britain, Lithuania
andUkraine. Theissuance ofimport licences isnon-discriminatory asconcerns thecountry of
importation.WT/ACC/LVA/8
Page22
27. Concerning theresponses inWT/ACC/LVA/3 onLatvia ’simport banonsugar:
- Why doesLatvia bantheimportation ofsugar?
- Arethelicences forsugar scheduled tobeeliminated?
- These restrictions appear tobeinconsistent withWTO provisions. Please explain how
Latvia intends tomodify thenon-tariff measures applied onsugar andsugar products
consistent withWTO obligations?
- Latvia should immediately being reorganising itsprotection forthisproduct tobring into
conformity with WTO provisions, inparticular theprovisions oftheAgreement on
Agriculture asitrelates toquantitative restrictions, andtherequirements oftheImport
Licensing Agreement.
Reply
Theutilization ofsugar licences asameans toprotect localsugar manufactures wastheenterprise of
theState economy arranging intheperiod ofreorganisation andwithin areasonable period oftime
itcould beadjusted according toWTO requirements.
Weagreethattheexistingsugar-importlicensingproceduredoesnotcorrespondtotheWTOAgricultural
Agreement. Wecannegotiate theabolition oflicensing within areasonable period oftime, provided
adecent tariff protection prevents thisindustrial sector from totaldislocation.
28. Concerning import licensing requirements foralcoholic beverages.
- Thedocumentation requirements forobtaining animport licence foralcohol andspirits
appears prohibitive (Annex 3,WT/ACC/LVA/4, p.17).HowdoesLatvia intend tojustify
thisnon-tariff measure? Please listthecomparable requirements forthesaleofdomestic
alcoholic beverages. Arethere anyadditional requirements forindividuals orfirms to
import alcoholic beverages? Ifso,please listthecomparable requirements forsaleand
distribution ofsimilar domestic products.
- PleaseexplainhowtheStatemonopolyreferredtoinRegulation37‘‘OntheStateMonopoly
forSpirits andAlcoholic Drinks" operates.
Reply
Theimporters ofalcoholic beverages inLatvia arecompletely independent todetermine thechoice
oftheexporting country, concrete trading partner aswellasbrands, variety andquantity oftheimported
beverages. Therefore licensing, firstofall,ismeant forputting upacertain order andsystem ofregulated
basic principles themaingoalofitbeing fulfilment oftheconsumers ’andnational economy interests.
During thefirststage oftheprocess ofputting upthesystem, i.e.in1993-1994, theobjective reason
formoredetailed information onthepotential importers, thetechnical andeconomic stability ofacertain
company aswellasmostsignificant previous activities wasdetermined bytheneedtoguarantee that
thequality ofimported beverages satisfies therequirements ofhealth careauthorities. Theorder of
licensing becoming moreandmore stable, thedemands oftheofficial authorities concerning documents
ofapplication were simplified andthenumber ofsuchdocuments willgradually decrease.
There arenoextrademands forsalesanddistribution oftheimported alcoholic beverages ifcompared
todomestic products.
TheState monopoly onspirit andalcoholic beverages inthesense ofthepresent regulations means
ageneral order concerning theproduction ofspirit andalcoholic beverages, theirexport, import,WT/ACC/LVA/8
Page23
wholesale, retail trade, storage, localandtransit transportation aswellasStatecontrol onkeeping to
thisorder.
Thisorder includes initself compulsory licensing ofallbusinesses concerning spirit andalcoholic
beverages which notonlyregulates thesebusinesses (general order ofstock-taking andsettling accounts),
butalsostates theresponsibility andregulates control andsupervision.
29. Concerning theresponses inWT/ACC/LVA/4 toquestion 14ontheapplication ofTRQs:
- Within quotas currently applied toprotect thedomestic market foragricultural products,
tariff ratequotas (TRQs) areapplied forimports from theEuropean Union. If,asit
appears, these TRQs areapplied onadiscriminatory basis, please explain howthisis
consistent withWTO provisions.
- Please indicate howTRQs areactually allocated. Isthere atendering process?
Reply
Thequotas asameans ofimport limitation willbeutilised according totheRegulations oftheCabinet
ofMinisters No.20"Regulations toprotect thedomestic market forfoodstuff produced inLatvia"
(17.01.1995) (seereply 62).However theimport-tariff quotas anticipated inthefree-trade agreements
(including agreement withEU)aretheenterprise ofmarket liberalisation, because certain quantities
ofproduction haveaconcessional tariff regime forimporting toLatvia, andthatisinnoaspect a
discriminatory enterprise. Import-tariff quotas arenotapplied onadiscriminatory basiswithin Latvia 's
FTAwiththeEU.Thisagreement inaccordance withprocedure oftheArticle XXIV ofGATT has
beennotified inWT/REG/7/1 on12July1995.
TheRegulations oftheCabinet ofMinisters No.208determine theconditions forimplementing the
custom-tariff quotas established intheinternational agreements oftheRepublic ofLatvia.
Theprocedure forimplementing thecustom-tariff quotas isthefollowing:
- TheConsulting Customs-Tariff Council distributes theanticipated custom-tariff quota
amounts among concrete competing importers andexporters;
- TheMinistry ofAgriculture issues special permits forimporting andexporting
agricultural products; theMinistry ofEconomy, fortheother goods;
- TheCustoms Department oftheState Revenue Service controls utilisation ofevery
special permit according totheorder setbytheCabinet ofMinisters.
30. Concerning other licences:
- Dothelicensing requirements forenterprises involving pyrotechnical materials andmetals
distinguish between theuseofdomestic orimported products? How many firms are
authorisedtoproduceandselltheseproducts?Aretheselicencesavailabletoforeign-owned
firms orindividuals?
- Would Latvia please respond totheenquiry whether anyimport regulations (besides import
licences) govern non-ferrous metals?
Reply
Fivefirms havespecial permits (licences) forimporting ofpyrotechnic materials andselling ofactions
(seereply 22andquestionnaire onimport licensing).WT/ACC/LVA/8
Page24
Ninefirms havespecial permits (licences) forexporting ofnon-ferrous metal scraps, which arebought
inLatvia. Import ofnon-ferrous metals scraps hasnolimitations. Export andimport ofmetal production
havenolimitations. Export andimport ofmetal scraps, which arenotbought inLatvia, haveno
limitations.
Import ofnon-ferrous metals hasnolimits.
(e) Customs valuation
31. Please submit acopy ofthenewlegislation oncustoms valuation aswellasRegulation
20totheWorking Party prior tothenextmeeting.
32. ThebulkofLatvia 'sresponses inAnnex 4,WT/ACC/LVA/4, consist ofstatements tothe
effect thatwhile theLatvian government isaware ofinconsistencies between itslegislation and
theWTO Valuation Agreement (the‘Code'),itrequires additional timetostudy theproblems
and/or reasonable transition period inwhich tomodify thecurrent law.Inviewofimplementing
theAgreement.
- Ofparticular concern isLatvia ’sfailure toimplement theprohibitions setforth inArticle
7.2.Noauthority exists intheCode foradelayed implementation ofthisprovision.
- Moreover, asnoted inourearlier comment, weareconcerned about Latvia 'suseof
reference pricing. Although Latvia hasusedasasubstitute forthemethods setforth in
theCode, itstillasksfortimeinwhich tocontinue using reference prices while itbrings
itslawintoconformity withtheCode. However, weregard anyuseofreference prices
asunambiguously contrary totheprovisions oftheCode.
- Latvia should undertake areview ofitscurrent lawsandpractices forcustoms valuation
inlightoftherequirements oftheAgreement, inorder tobeinaposition toimplement
itsprovisions from thedateofaccession.
- What doesLatvia consider tobereasonable transition period tobring itsvaluation regime
intoconformity withtheCustoms Valuation Agreement? What isLatvia doing nowto
implement theprovisions oftheAgreement?
Reply
IntheRepublic ofLatvia theestimation ofcustoms valuation isregulated bytheLawonCustoms Duty
(tariffs)andRegulationNo.27"OnEstimationsofCustomsValuationRelatingtoImportedandExported
Goods andOther Subjects", which provides adjusting ofreference pricing.
Latvia realises thedisparity ofthislegislation withtheWTO Agreement onImplementation ofArticle
VIIoftheGATT 1994. Therefore changes intheRules relating toestimation methods ofcustoms
valuation, which correspond totheWTO requirements arebeing prepared. Atthepresent moment
thesechanges areattheprocess ofapproval bytheCabinet ofMinisters, andaccording withthecurrent
legislation thosecancome inforceonlyafterratification intheLatvian Parliament (Saeima). Atransition
period oftwoadditional years isnecessary aftertheaccession totheWTO.
(h) Standards andcertification
33. What istherelationship between theLatvian National Standardisation andMetrology
Centre andtheNational Accreditation Office, ifany?WT/ACC/LVA/8
Page25
Reply
TheLatvian National Standardisation andMetrology Centre andtheLatvian National Accreditation
Office areunder thesupervision oftheMinistry ofEconomy. Both ofthem areinthehorizontal
relationship.
34. What isthecomposition (members) ofthetechnical committees responsible forformulating
"regulations andstandards?
Reply
Members ofthetechnical committees responsible forformulating "regulations andstandards" areall
interestedparties.Membersarerepresentativesfromdifferentministries,commercialstructures,Latvian
National Standardisation andMetrology Centre andrelevant experts involved inthisarea.
35. Isthere aplanforaccrediting private Standards Developing Organisations fordeveloping
voluntary standards?
Reply
TheRepublic ofLatvia iscreating aLatvian accreditation system inaccordance withthesimilar systems
inEurope, therefore there isnotplanned toaccredit private Standards ’Developing Organisation for
developing voluntary standards. Allstandards arevoluntary except State regulated sphere -human
health, lifeandenvironment. Latvian National Standardisation andMetrology Centre isresponsible
forpreparing ofstandards. Itregulates withestablishing Technical Committees.
36. Which agency isresponsible forimplementing Article 30oftheLaw"OntheProtection
ofConsumer Rights" which requires thecertification ofgoods forwhich technical regulations
exist?
Reply
TheCabinet ofMinisters oftheRepublic ofLatvia isresponsible forimplementing Article 30ofthe
Law"OntheProtection ofConsumer Rights". TheCabinet ofMinisters nominates theresponsible
certification centre forevery kindofgoods forwhich mandatory certification exists. Thefollowing
agencies arealready existing :
-Latvian National Certification Centre forFood, Cosmetic andToys;
-Latvian National Standardisation Centre forHouse Hold Electric Equipment;
-Baltic Machinery Experimental Station forAgricultural andWood Equipment.
37. What isthestatus ofimplementation ofRegulation No.181bytheNational Accreditation
Office? Forexample isthere aplanforaccreditation ofprivate testing laboratories orcertification
organisations?
Reply
TheLatvian National Accreditation Office isunder thesupervision oftheMinistry ofEconomy for
thetimebeing. There isplaned toaccredited private testing laboratories andcertification centres. At
thetimethisprocess isunder development.WT/ACC/LVA/8
Page26
38. ArecertificationsissuedbyforeignorganisationssuchastheCanadianStandardsAssociation
ortheUnderwriters Laboratories ofCanada accepted?
Reply
Foraccepting ofcertificates issued atforeign certification institutions theapplicant hastoconsult with
theinstitutions inLatvia which aredealing withrecognition ofcertificates (forexample forfoodstuff,
cosmetics andtoysconformity marks "ULC" and"CSA" issued inCanada arerecognised inLatvia).
Forrecognition offoreign certificates there canbestarted discussions about agreement onbilateral
recognition ofcertificates afterexamination oftherequirements intherespective countries.
39. Arethere anyplans foraccrediting private Quality registrar forimplementation ofQuality
standards suchasISO9000?
Reply
Atthistimetheprocess isunder development. Inthenearest future there willbeaccredited thefirst
private certification institutions willbeaccredited forimplementation ofQuality standards suchas
ISO9000.
40. Areallregulations andstandards developed atthefederal levelorarethere anysubfederal
organisations developing standards?
Reply
Latvian National Standardisation andMetrology Centre isresponsible forthecoordination ofpreparing
ofstandards. ThisCentre regulates itbyestablishing Technical Committees.
41. Arethere anyplans foradopting andimplementing theCode ofGood Practice contained
inAnnex 3oftheWTO TBT Agreement
Reply
TherearemadethefirststepsforadoptingandimplementingtheCodeofGoodPractise.LatvianNational
Standardisation andMetrology Centre willbetheresponsible bodyforimplementing theCode ofGood
Practice.
42. Arethere anyplans onthepartoftheLatvian National Standardisation andMetrology
Centre tojoininternational standards organisations suchastheISO, IEC.
Reply
Latvian National Standardisation andMetrology Centre istheaffiliated member ofCEN (European
Committee ofStandardisation) aswellascorresponding member ofISO.
There isLatvian National Committee ofIEC.Since 1October 1995Latvian Electrotechnical Committee
istheassociated member ofIEC.
43. Isthere anagency which participates intheactivities oftheCodex Alimentarius
Commission?WT/ACC/LVA/8
Page27
Reply
Ministry ofAgriculture, Ministry ofWelfare, Ministry ofEconomy andNational Certification Centre
forFood, Cosmetic andToys aretaking partinactivities ofCodex Alimentarius Commission.
44. Arethere anyplans onthepartoftheNational Accreditation Office tojoinISOCASCO?
Reply
Latvian National Accreditation Office would liketojoinISOCASCO. Therelevant legislation isalready
based ontherequirements ofISOCASCO, butduetothefinancial problems itisnotpossible atpresent
tojoinISOCASCO.
(j) Anti-dumping /CVD
45. What isthestatus ofthenew, broader safeguards andanti-dumping/countervailing duty
legislation thatLatvia hasstated should beinplace bytheendof1995 ?
Reply
seeanswer 46
46. Latvia alleges thatitisexperiencing thedumping ofsame lowquality agricultural products
WT/ACC/LVA/4, page 5.
- HastheLawonCustoms Duties beenchanged toincorporate rules foranti-dumping and
countervailing duties? Isthere atimeframe under which these regulations willbedrafted?
Reply
Amendments inrespect ofintroduction ofprovisions foranti-dumping andcompensation system have
notbeenmade intheLawoftheRepublic ofLatvia "OnCustoms Duties (Tariffs)".
TheLaw"OnInternal Market Protection Measures" isbeing drafted andwillbesubmitted forapproval
by1July1996. ThisLawwillreplace allexisting legislation relating tothisissueandthisLawisbeing
drafted according totheWTO requirements.
(i) Sanitary andPhytosanitary Measures
47. Please explain the‘special certification procedures 'required forallnon-processed foods.
Arethese requirements applied todomestic aswellasimported products? Which agency
administers these requirements forimported andfordomestic goods?
Reply
TheVeterinary Department oftheMinistry ofAgriculture isresponsible forveterinary control for
bothdomestic andimported goods. Forthedistribution ofanyanimal origin -non-processed (raw)
product aveterinary certificate isrequested. Forthedomestic market thecertificates areissued by
licensedveterinaries,forimportedproductsbythegovernmentthecertificatesareissuedbytheveterinary
authority ofthecountry exporting theproducts according tothequality requirements oftheRepublic
ofLatvia.WT/ACC/LVA/8
Page28
Thissystem isbased onlawsaccepted bytheSaeima (Parliament oftheRepublic ofLatvia) -Law
"OnVeterinary medicine", 1992, andlaw"OntheOrder andSurveillance ofFood handling", 1995.
48. Latvia states inWT/ACC/LVA/4 thatitunderstands thatsanitary andphytosanitary
measures should bepublished inadvance. Weseekaspecific commitment from Latvia thatit
willpublish SPSregulations withaperiod oftimemade available forcomment before theyare
implemented.
Reply
Latvia understands andagrees thatsanitary andphytosanitary measures should bepublished inadvance
within aperiod oftimemade available forcomment before theyareimplemented.
49. Which products arespecifically restricted orbanned thatanimal orplant health reasons?
Aresimilar restrictions inplace fordomestic products?
Reply
Prohibited imports:
- Anyplant orplant product infected byquarantine pest;
- Plants pathogens, living insects andnematodes;
- Liveplant withsoil,underground parts withsoilandsoil;
- Plants forplanting andgrafting material offruitcrops, forest crops andornamental
crops, intended forindustrial plantations from allcountries where pests occur.
Similarrestrictionsareinforceforbothdomesticandimportedproducts.Therearespecificrequirements
fordifferent animal origin products tobedistributed orimported inLatvia.
50. With reference topage25-Appendix 5(Sanitary andPhytosanitary Measures): Theonly
issue thatisofconcern isthetransparency obligation, since Latvia states thattheydonotalways
publish newregulations inadvance ofimplementation. Canweexpect thatLatvia willconform
toArticle 7,andAnnex BoftheSPSAgreement?
Reply
Latvia willbeabletoconform toArticle 7andAnnex BoftheSPSAgreement aftertheestablishment
oftheNational Food Centre -specialized institution responsible forthedistribution ofinformation.
2. Export regulations
(b) export licensing systems
51. L/7527 states thatthere areexport duties andlicences applied tonon-ferrous metals and
notes thattrade inalcohol andspirits requires anexport licence.
- Does theexport dutyrequirement alsoapply toalcohol andspirits?
Reply
Export dutyrequirements donotapply toalcohol andspirits.WT/ACC/LVA/8
Page29
3. Export incentives, including subsidies
52. (80.) InWT/L/57/Add.1. theGovernment ofLatvia states thattheycontinue work on
draft schedules fordomestic subsidies andexport subsidies. Please confirm thatLatvia plans to
phase-out existing export subsidies andrefrain from introducing newsubsidies. What isthe
transition period envisioned forsubsidy reduction? Ifnot,thenforwhat products doexport
subsidies continue tobeconsidered?
Reply
Latvia confirms thatitisnotplanning tousenewexport subsidies. However Latvia wants tonotify
thecurrent export subsidy levelasbound baselevelandagrees indiminishing itaccording toWTO
Agreement onAgriculture.
4. Regulations oftrade intransit
53. Latvia states intheresponse toquestion 111ofWT/L/49 thatitdoesnotcharge atransit
fee.However L/7526 notes a‘special customs convoy ’fee.
- Please explain what thisissince itdoesnotappear tobecategorised asatransit fee.Who
pays thisfeeandhow? Isitcharged separately from thecustoms duty? Also, explain
howthe"security deposit" functions.
Reply
Forthesecurity ofthecarriers aswellasinorder tolimitthepossibility forillegal saleofthegoods
intheRepublic ofLatvia thetransit delivery ofsome kinds ofgoods bytrucks iscarried outbyconvoy
ofcustoms officials orbythepaying ofthe"security deposit".
The"security deposit" means thesumofthetaxes thatneedtobepaidaccording thelegislation for
theimporting ofthegoods intotheRepublic ofLatvia. The"security deposit" isfullypaid, ifallthe
determinations oftransit regulations areobserved. The"security deposit" mustberepaid within two
months aftermaking customs clearance forthetransporting ofthegoods through theborder customs
check points. The"Security deposit" ischarged separately from thecustoms duty.
Thecustoms convoys feefortheonetruck through theterritory oftheRepublic ofLatvia is50Ls.
Thementioned feeincludes thecustoms administrative expenses fortheconvoy service. Theconvoy
feeispaidbythetransport organisation.
IV. OTHER POLICIES AFFECTING FOREIGN TRADE
2. Agricultural policy
54. Concerning theresponse toQuestion 3inWT/ACC/LVA/3, related toQuestion 10in
WT/L/49,andtheresponsetothefirstquestionsinWT/ACC/LVA/4:(26)theinformationprovided
byLatvia concerning agricultural supports isscattered andcontradictory, butweappreciate
Latvia 'sefforts toclarify theissue.
- Isittruethatthissortoffunding isrelatively new, i.e.,1994-95 andnotpreviously?
- Towhatextent areproducts-s receiving subsidies alsoprotected withquantitative measures.WT/ACC/LVA/8
Page30
- What isthenature oftheWorld Bank lineofcredit available forfarmers, i.e.,isthecredit
linegranted toLatvia bytheWorld Bank? Who isresponsible incaseofdefault? Who
administers payouts under theloanandwhowillabsorb thedifference between theapplied
rates fortheloanandmarket rates?
Reply
Agriculturalsubsidyofthistypeisrelativelyrecent(accordingtotheRegulations‘’OntheStateBudget’’)
andwasbegun during the1994-95 fiscal year. 24.6thousand Lsinsubsidies wereplanned in1994
forthefinancing ofconsultations onimproved growing methods forsugar-beets. In1995thesubsidies
amounted to234thousand Ls,ofwhich 200thousand Lswerebudgeted fortheearly intervention of
seedling diseases, andtimely guaranties oftheabove mentioned.
In1994, subsidies forgrain werebudgeted at922.8 thousand Ls,ofwhich 653.3 thousand Lswere
allotted tocrops fromhybrid cultures thatreceived timely andcorrect disease-intervention therapies.
Another 269.5 thousand Lswasallotted tothedevelopment andstimulation totheregional production.
In1995, theanticipated grain subsidy budget wassetat4059 thousand Ls,ofwhich 500thousand
Lswasallotted todevelopment andstimulation ofproduction, andtheremaining 3559 thousand Ls
forthedevelopment ofhybrid cultures.
Currently, themost-favoured credit institution among farmers istheState share-holding company
"Latvian Agricultural Finance Corporation" founded on28,December 1993, according totheCabinet
ofMinisters Regulation No.171-r, toservice anddirect thelineofcredit thattheWorld Bank allotted
forthedevelopment andstimulation ofprivate agricultural production companies. Theprincipal
shareholder ofthisfinance corporation istheMinistry ofAgriculture. Thecorporation ’sgoverning
bodyistheCabinet ofMinisters, which appoints theauthorised Stateemployees, whoarealsomembers
ofthecorporations governors body.
Theprojected agricultural credit is25million US$, ofwhich 11.9million US$forfarmers, 11.9million
US$foragricultural processing andforestry, and1.2million US$forthereal-estate department for
thestimulation andspeeding upofland-ownership registration.
Thecredit hastobedivided andutilised during 3to4years. Thecombined termoftheloanis17
years, andinitial payments mustbegin during the6year. TheWorld Bank issues loans at7,5percent
annually, butitcosts approximately thesame toprocess theloan, hence, bringing thetotal percent
upto12-15 percent, nearly double.
From 10January 1994to1November 1995thecorporation hasworked onprivate-sector agricultural
production financing according totheWorld Bank’sconditions; distributing liquid assetshort-term
loans, andbeginning on1July1994, long-term investment loans forthepurchase ofagricultural
equipment, livestock, andalsofortheconstruction ofagricultural buildings.
By1July1995, 2,811,434 Lsinloans hadbeenapproved andweredistributed among 566farmers.
Theactual distribution oftheloans isaslowprocess duetothefollowing facts:
(1) There isariskofunstable currency exchange. -Theagricultural loans fromtheWorld Bank
areindollars, butthepayment farmers make areinLatsandaftertheconversion therepayment
isindollars.
(2) Oneoftheconditions oftheloanistheapplicant ’srightto20percentparticipation.
(3) Collateral guarantees arecalculated at150percentofthepayee ’stotalloan.WT/ACC/LVA/8
Page31
55. Latvia states thatnosubsidies aregranted fortheintention ofincreasing exports. However,
inreviewing theanswer provided inWT/L/49, question 10,itappears thatthesubsidies forcheese,
butter andgrain aredistributed withtheintention ofincreasing exports. WT/L/LVA/4 alsoreports
export subsidies fordairy products andryegrain. Please explain.
- This member seeks assurance thatLatvia willeliminate these export subsidies inits
agriculturalscheduleandmaketherequiredreductions.Additionally,thismemberreminds
Latvia thatestablishing newsubsidy programmes isnotconsistent withtheprocess that
achievedtheUruguayRoundAgreementsnortheGovernmentofLatvia'scurrentaccession.
Reply
Asummary ofexisting export subsidies inLatvia istobefound (intheformofatable) intheschedule
ofinitial commitments concerning agricultural support andsupplementing documents. According to
these figures itisapparent thatLatvia in1995 (ascompared to1994) hassignificantly decreased the
volume ofthese subsidies, bothinvalue andintheamount ofsubsidised export. Butter in1995
(subsidised export butter), ascompared to1994, hadtheanticipated decrease of0.9thousand tons,
i.e.53percent,buttheprojected subsidy volume hadtheplanned decrease of285.6 thousand LSor
52.7percent.
Processed dairy products accordingly havea92percentsubsidised export amount decrease, subsidy
volume, 93percent.Subsidy volume forcheese isprojected ata4percentdecrease, dry(powdered)
milkat36.7percent. Subsidised ryeexport in1995 wasdecreased by38percent, subsidy volume
at41percent.
Thelisting oftheproducts which benefit fromthese subsidies areincluded inthisdocument aswell.
However, despite thesignificant export subsidy decrease inthelast2years, Latvia isnotprepared
toeliminate thesubsidies, buttodecrease theminconsistency withtheUruguay Round Agreements.
56. Onexport subsidies, Latvia hasidentified theagricultural products (milk powder, canned
whole milk, cheese butter andrye)onwhich suchsubsidies were paidin1994 andwhich were
tobemaintained in1995. Information hasbeen provided onsubsidies paidsofarin1995 are
alsorequired.
Reply
Thetabulated summary oftheexport promotion subsidies currently active inLatvia canbefound in
theSchedule ofinitial Commitments concerning agricultural support andsupplementing documents.
These tabulated datashow considerable decrease intheamount ofLatvian 1995 export subsidies as
compared with1994, bothinterms ofvalue andofvolume ofthesubsidised exports.
57. Ondomestic support, Latvia states thatitmaintains other support policies forpotatoes,
cattle, grain variety seeds, grass seeds, andvegetable seeds, butthattheywillnotbesubject to
reduction commitments since theyare"deminimis" (ref.Article 6oftheWTO Agreement on
Agriculture). Could Latvia provide detailed information inthisregard. Furthermore, Latvia
provides anumber of"green box"supports. What arethese "other support policies? Would Latvia
please explain itsgreen boxsupport programmes?WT/ACC/LVA/8
Page32
Reply
Thesummary ofpolicies concerning support ofthe"green box"wassubmitted andisavailable inthe
WTOSecretariat.Weincludethissummaryinthescheduleofinitialcommitmentsconcerningagricultural
support andsupplementing documents.
58. Latvia 'sdraft schedule ofagricultural commitments ondomestic support andexport
subsidies would needtoinclude supporting dataandsources, aswellasprogramme descriptions,
thatwould permit programme classification tobeconfirmed. Onexport subsidies, Latvia indicated
itprovided 1.67million Lsinterms ofexport subsidies in1994, could abreakdown ofthevarious
commodities which benefited from these allocations beprovided? Latvia states indocument LVA/3
thattheyallocated export subsidies tocheese, butter andcereals in1994. Could Latvia confirm,
foreachoftheproducts forwhich itoffered export subsidies in1994, thatthelarge reductions
cited onpage3(53percentcutinbutters, 38percentcutforrye,and92percentcutfortinned
milk) havebeenmetorexceeded? Alsowewould appreciate receiving thedetails ofthedescription
oftheexport subsidy mechanisms used. (101.) When willLatvia provide theworking party with
these documents, including supporting tables?
Reply
Thetabular summary oftheexport promotion subsidies currently active inLatvia canbefound in
theschedule ofinitial commitments concerning agricultural support andsupplementing documents.
These tabulated datashow considerable decrease intheamount ofLatvian 1995 export subsidies as
compared with1994, bothinterms ofvalue andinterms ofvolume ofthesubsidised exports. This
Table alsoshows thelistofgoods deriving benefit from these subsidies. Nevertheless, taking into
account theconsiderable decrease intheamount ofexport subsidies during last2years, Latvia generally
isprepared toreduce suchsubsidies inaccordance withtheprocedure provided inthedocuments of
theUruguay Round.
Thegranting ofsubsidies totheexporters which export products ofLatvian origin shallbeconditional
tothefollowing:
presenting theContract onexportable products;
presenting thedocument evidencing theLatvian origin oftheproducts;
presenting theinvoice ofdispatched products, withnotebycustoms;
presenting thedocument onpayment forexportable products.
59. Could Latvia please provide alistofitstariff reductions onagricultural imports from
theEU,pursuant toitsFTA withtheEU,bysixand/or eight digitHSline?
Reply
Lists ofLatvia ’stariff reductions onagricultural imports from theEU,areintegral partofLatvia ’s
freetradeagreement withtheEUandthisagreement hasbeennotified inWT/REG/7/1 of12July1995.
60. Would Latvia please confirm thatonlygrains, sugar, spirits andalcoholic beverages, and
tobacco products need import licences forimportation, andprovide HScodes forallproducts
soaffected. What wasthevolume ofeachofthese products forwhich import permits wereissued
inthelasttwoyears?WT/ACC/LVA/8
Page33
Reply
TheMinistry ofAgriculture confirms thatgrains andsugar areincluded inthelistofproducts subject
totheimport licensing.
Theimporting licences were issued relevant tothefollowing volumes:
1994 1995
Sugar 1625t 10887t
Grain
-bread wheat 45000t 34261t
-fodder grain (barley) 1816t
Strict import regulations aremaintained forthefollowing HSnumbers: 1001, 1002, 1003, 1004, 1101,
1102, 1103, 1104, 2300. Licensing fortherestofgrain products aremerely forstatistical purposes.
Incompliance withtheLaw"OnLatvian Grain Market andStateGrain Reserves" thefollowing grains
andcereal products arecontrolled bylicence:
HS VOLUME (thsd. tons) OFIMPORTED GRAINS
actually
importedfixed by
the
Cabinetallowed
by
licencesactually
importedfixed by
the
Cabinetallowed
by
licencesactually
imported
1993 1994 1995
1001 (wheat)
milling wheat
feedwheat44,0 50,0 60,1 45,0 90,0
100,072,0
5,534,3
0
1002 (rye)0 23,0
1003 (barley) 80,0 13,4 1,8
1004 (oats)
1005 (corn) 2,0 59,9 5,7 10,1 7,1
1006 (rice) 1,27
1007 (sorghum)
1008 (buck-wheat) 5,3 1,0 4,1 0,9
1008 (millet) 1,6 0,4
1101 (wheat flour) 12,6 12,0
1102 (ryeflour)
1103 (cereals) 5,6 1,3 0,2
1104 (ground grain) 11,6
(corn)3,4
1107 (malt) 3,5 1,8 21,1 2,5
During theperiod 1January 1994 -1November 1995 theimports ofalcoholic beverages toLatvia
constituted 8million litres. Thevolume ofspirit imports during thisperiod wasinsignificant.
Inorder toimport tobacco goods inLatvia enterprises (companies) aretogetaspecial permit (licence)
issued bytheMinistry ofFinance. Theimport licence forsalesofimported tobacco goods canbeissued
toanyenterprise (company) registered inLatvia which hasapplied tothelicensing committee byhandingWT/ACC/LVA/8
Page34
indocumentsspecifiedbyRegulationsNo.355,article8oftheMinistryofFinance,dated1August1995
"OnOrder Regulating theIssue of(Permits) Licences forProduction forSales, Import forSales and
Wholesales ofTobacco Goods" andobserving alltherespective conditions.
Theissueofspecial permits (licences) forimport oftobacco goods forsalewasstarted in11May1994.
Duetothecondition thattheyonlysalesofspecially labelled tobacco goods ispermitted intheterritory
ofLatvia, intheperiod May1994 -1December 1995, thetotalimport oftobacco packages bearing
theexcise taxlabelwas16,110 million.
61. Inanswering thequestion no.3Latvia saidthatin1992theGovernment fixed‘unjustifiably
highState guaranteed buying-in prices ’which were much higher thanworld prices. Inorder to
decrease storage costs itwasdecided thentogrant export subsidies intheamount of10Lsper
eachtonofexported rye.WilltheLatvian Government seektoavoid sucharrangements inthe
future? Please indicate when Latvia isgoing tosubmit thedraft schedule ofexport subsidy
commitments inagriculture?
Reply
Theintroduction ofsucharrangement wasanextraordinary measure, andtheGovernment ofLatvia
isnotplanning toreturn tosucharrangements again.
Thetabular summary oftheexport promotion subsidies currently active inLatvia canbefound inthe
schedule ofinitial commitments concerning agricultural support andsupplementing documents. These
tabulated datashow considerable decrease intheamount ofLatvian 1995export subsidies ascompared
with1994, bothinterms ofvalue andinterms ofvolume ofthesubsidised exports.
62. Theresponse toquestion 14ofWT/ACC/LVA/4 indicates thatRegulation 20isatemporary
measure which applies onlytospecific agricultural products, i.e.,forgrain, milk, meat, fish,
potatoes andforproducts made from them.
- Please supply alistbyHSnumber ofallitems under quota, thesizeofthequota, and
detailed information onhowtraders canbepermitted toexport goods covered bythese
restrictions, e.g.,howisthequota distributed andadministered?
- What istherelationship between these restrictions andtheTRQs applied toimports from
theEuropean Union? Has Latvia allocated TRQs totheEuropean Union ona
discriminatory basis vis-a-vis imports from other sources? Ifso,onwhat basis under
WTO provisions doesLatvia plantojustify thisdeparture from MFN treatment?
Reply
TheRegulations oftheCabinet ofMinisters No.20(17.01.95.) states that,ifitisnecessary inthe
caseofimport, which makes significant losses, interference, orproblems which would initiate a
substantial worsening ofthepresent situation offoodproducers (aspertains totheirsocial-economical
situation) temporary measures would betaken tosetupthequota ofspecific products. Since sucha
situation hasnotyetarisen, these temporary measures havenotbeenpassed, anditisnotpossible to
hardtheminforreview atthistime. Hence itisnotalsopossible tocompare themwithtariff-quotas,
which arecurrently being puttouseinEUfortheEUnations, because these quotas aremeant for
theAgreement between EUandtheRepublic ofLatvia asamethod ofliberalising themarket, i.e.
asignificant decrease oftariffs onasetquantity ofproducts. Latvia 'sfreetrade agreement hasbeen
notified inWT/REG/7/1 of12July1995.WT/ACC/LVA/8
Page35
63. Concerning theresponse toQuestion 14ofWT/L/49:
- Which Government office determines ashortage ofsupply andhowisitdetermined?
- Why arethetemporary measures onlyapplicable forgrain, milk, meat, fish,potatoes
andproducts made from them? Arethese commodities processed orproduced by
State-owned entities? Arethese basic basket items inLatvia?
Reply
Onceaquarter theMinistry ofAgriculture, utilising theinformation presented byLatvia ’sStatestatistics
bureau andCustoms Department willcollect andanalyze information onproduction levels inLatvia,
aswellascurrent import-export flows. TheMinistry ofAgriculture willexamine situation asregards
import fromtheabsolute, aswellastherelative ratiotowards localproduction, andwillpredict whether
ornotthatwillthreaten orseriously harm localmanufacturing thatproduces equal orcompetitively
superior products. TheMinistry ofAgriculture willthensendtheresults ofitsresearch toother Latvian
Stateinstitutions, andtheCabinet ofMinisters hastherighttosetsupplementary protective measures
according tothecorresponding WTO Agreement.
Temporary measures could beutilised forgrain, milk, meat, fish,potatoes andother products derived
fromthesestaples, because theseproducts areincorporated inthecategory ofsensitive products. Latvia
hasgotgood traditions aspertains totheproduction ofthese products anditcansatisfy thedemand
ofthisproduction inthelocalmarket.
5. Foreign andDomestic Investment Policy
64. Document WT/L/63 notes thatcertain provisions ofLatvia ’sLawonForeign Investment
arenotconsistent withtheWTO.
- HasLatvia modified itsLawonForeign Investment tomake itcomply withtheWTO
TRIMs provisions?
- Please provide bythenextmeeting oftheWorking Party alistoffallTRIMs currently
inforce thatarenotconsistent withtheAgreement. Inparticular, wewould appreciate
knowing what iscontemplated under paragraph 6oftheLawonForeign Investment with
respect totheapplication oftheTRIM Agreement.
Reply
Only article 6oftheLaw"OnForeign Investment intheRepublic ofLatvia" contains provisions not
consistent withtheTRIMS Agreement. Currently theissuing ofpermission, asitisprovided in
paragraph 1,part1oftheArticle, haslostitsimportance, because investment ismade inaccordance
withthelaw"OnPrivatisation ofStateandMunicipalities Objects", which provides adifferent order.
With aviewofbringing theLaw"OnForeign Investments intheRepublic ofLatvia" inconformity
withtheTRIMs requirements andwiththeLaw"OnPrivatisation ofStateandMunicipalities Objects",
thedraftamendments arebeing prepared. Latvia expects these amendments tocome intoforce bythe
endof1996 -firstquarter of1997.
6. Government Procurement
65. Latvia notes thatitiscurrently developing aLawonPublic Procurement which isbased,
inpart, ontheWTO Agreement onGovernment Procurement.WT/ACC/LVA/8
Page36
- What isthestatus ofthislegislation which Latvia indicates willlikely beimplemented
bytheendof1995?
- HasLatvia applied foraccession oftheGPA? IsLatvia anobserver inthatAgreements
Committee?
- IsLatvia prepared tobegin bilateral discussions onthecontent ofitsentity list?
Reply
ThedraftLawonPublic Procurement hasbeenadopted bytheGovernment Committee onEconomy
andFinance; on12December 1995itwasontheagenda oftheCabinet ofMinisters, andthenitwill
bepresented totheLatvian Parliament.
TheGovernment Regulations andtherespective Instructions oftheMinistry ofFinance havebeen
prepared, buttheywillnotbepublished untiltheLawitself ispassed bytheParliament.
Latvia hasnotyetapplied foraccession totheGPA and,atthetimebeing, doesnothaveobserver
status.
Latvia isready tobegin bilateral discussions onitsentities ’list.
7. State Trading Enterprises
66. WT/L/49 (question 138)states thatin1994, 546State-owned companies dealt inforeign
trade.
- Please provide alisting ofState-owned firms currently involved intrade, andthe
commodities inwhich theytrade.
- What arethetrading rights ofthese enterprises? Dothese enterprises have exclusive or
special rights?
Reply
Asalready stated inthereply totheQuestion 15,theprivatization program iscurrently underway;
itisplanned toprivatize 75%ofState-owned enterprises bytheendof1996. Thenewlistof200
enterprises hasbeenrecently submitted forprivatization. Asignificant partofenterprises arestillunder
theprivatization process; several enterprises aresubject tobankruptcy procedures under law. Due
tothese substantive changes thecomplete listofState-owned enterprises currently isnotavailable.
Moreover, according tothecurrent legislation theStatehasnorighttoinfluence directly theconduct
ofbusiness (i,e,production, marketing, purchase andsales) ofaState-owned enterprise. Theabove
legislation provides forthelegalprocedure ofStateparticipation inStateenterprises andStatejoint-stock
companies. Ingeneral theprocedure isasfollows -theStateappoints thedirector-general inthecase
ofaState enterprise andtheauthorized person-holder ofState-owned stocks ataState joint-stock
company.
The largest enterprises incompliance with theRegulations oftheCabinet ofMinisters
No.203(15.08.1995) areunder theauthority oftheState Property Fund.
None oftheseenterprises haveanyexclusive orspecial rights astheyarenotprescribed bythelegislation
oftheRepublic ofLatvia.WT/ACC/LVA/8
Page37
Ascompared totheenterprises intheprivate sector theState enterprises havenospecial treatment,
rights oradvantages intheforeign trade.
67. Theresponsestoquestions11and12(WT/ACC/LVA/3)seemtoindicatethatthoughLatvia
maintains numerous State enterprises, none ofthese enterprises exercise anyspecial rights inthe
exercise ofwhich theyinfluence through thepurchase orsales affecting exports orimports.
- How isthisstatement consistent withthespecial rights exercised bytheGrain Board?
- Arethere other entities which exercise similar special rights?
Reply
State-owned enterprises havethesame rights totrade asanyprivate company.
TheStateCereal Bureau istheStateinstitution acting under supervision oftheMinistry ofAgriculture
andrealising theStatepolicy ingrain according tothelaw"OnLatvia Grain Market andStateGrain
Reserves". TheStateCereal Bureau procures grain onlyforreplenishment oftheStateGrain Reserves,
which in1995 constituted 9,8percentofthetotalyearconsumption.
There arenoother entities which exercise similar rights.
68. Latvia states inthissection thatisdoesnotmaintain anyState trading enterprises asdefined
bytheGATT Article XVII. Latvia hasstated thatitdoesnotoperate State-trading enterprises
within themeaning ofArticle XVII oftheGATT, buthasalsotabled information onlicensing
requirementsandmonopoliesthatappeartoindicatethatState-sanctionedandprotectedproduction
andtrade remain, andthatthefirms involved operate asState agents orunder State protection.
- Ataminimum itwould appear thattheState Grain Board maymeet thedefinition of
aState Trading Enterprise under Article XVII Latvia should elaborate onthereasons
whytheState Grain Board should notbeconsidered aState trading entity.
- Other areas where thismaybetrueinclude agricultural production, distribution, and
trade insugar; metals; alcoholic beverages; andthe"natural monopolies" managed by
theState.
- Weurge Latvia review more carefully itsconnections withenterprises inthese sectors
andtosubmit revised responses toquestions concerning theapplication ofArticle XVII
inLatvia.
Reply
Answering tothese questions wewould liketoemphasise thattheState Grain Board isnotaState
enterprise, butaStateinstitution, who’sdutyaccording totheRegulations "OnLatvian Grain Market
andState Grain Reserve" is:
-toanalyze andpredict formation ofLatvian grain-market prices;
-toensure grain product quality;
-toorganise State grain reserve purchase andstorage;
-toorganise State grain inspection.
Hence StateGrain Board cannotbeviewed asagovernment enterprise involved inactual buying and
selling ofgrain.WT/ACC/LVA/8
Page38
Latvia hasseveral similar State institutions, i.e.theState Alcohol Monopoly Board, theTobacco
Department andsoforth.
Grain procured fortheState Grain Reserves issoldinthedomestic market without anyrestrictions
attheprice corresponding tothemarket price. TheState Cereal Bureau should notbeconsidered a
State trading entity because theydonotperform trade operations yielding aprofit.
There isnoother State Trading Enterprises inLatvia which corresponds tothedefinition of
"Understanding ontheInterpretation ofArticle XVII, Paragraph 1a,i.e.there arenogovernmental
andnon-governmental enterprises which havebeengranted exclusive orspecial rights orprivileges
intheexercise ofwhich theyinfluence through theirpurchases orsalesthelevelordirection ofimports
andexports, asaStatemonopoly initstraditional sense concerning spirit andalcoholic beverages does
notexistinLatvia (seeanswer toquestion No.65). TheStatemonopoly onspirit andalcoholic beverages
inthesense ofthepresent regulations means general order concerning theproduction ofspirit and
alcoholic beverages, theirimport, wholesale, retail trade, storage, localandtransit transportation as
wellasState control onkeeping tothisorder. TheAlcohol Monopoly Department isaspecial State
authority which inco-operation withother State authorities performs thesupervision andcontrol of
thisorder andissues licences forbusinesses withspirit andalcoholic beverages. Itisnotengaged in
anykindofentrepreneurship, i.e.doesnotproduce, purchase orsellspirit andalcoholic beverages.
Licences areissued toallenterprises intending tohavebusiness inproduction, import, export orsales
ofspirit andalcoholic beverages irrespective oftheir property form, (both forState andprivate
enterprises), i.e.theyaretomeetequal requirements inorder togetalicence andwhen itisissued
allofthem possess equal rights andaretoobserve thesame order.
9. Trade related aspects ofintellectual property rights
69. Could, Latvia discuss theprovision forofcopyright protection initslawsandregulations.
Reply
1)Copyright protection
Asindicated inthepreviously submitted documents (WT/ACC/LVA/4 andinparticular WT/L/49,
Section IV(9)-replies toquestions 140to145oftheContracting Parties, pp.66-70) Latvia has,in
11May1993, adopted theCopyright Lawincluding provisions oncomputer programs anddatabases
protection.
Since thenLatvia hasacceded toBernConvention (1971) fortheProtection ofLiterary andArtistic
Works (asfrom 11August 1995). Besides, ithasrecently adopted some newlawsandplans topass
several newlegislation actsandregulations developing, implementing orrelated totheCopyright Law
of1993. Among these, firstofall,theLawofOctober 6,1995onAmendments totheLatvian Criminal
Code should bementioned asthisLawprovides forcriminal responsibility incaseofviolation of
copyright andneighbouring rights. Onadopting thisLawLatvia hascovered aswellcertain deficiencies
initssystem ofenforcement ofintellectual property rights.
Thus, comparing theprovisions ofPartII,Article 9to14oftheTRIPS Agreement withthose ofthe
Latvian legislation actsinthefieldofcopyright protection, aconclusion canbemade thatprovisions
oftheLatvian legislation actsareconsistent withtherequirements oftheTRIPS Agreement.WT/ACC/LVA/8
Page39
2)Protection ofother categories ofintellectual property
Thescope ofprovisions oftheLatvian legislation actsthatareconsistent withtherequirements ofthe
TRIPS Agreement isindicated inthetabulation included inWT/ACC/LVA/4 (pp.28-29)
Thetabulation shows thatLatvia ’sexisting TRIPS regime ascompared withtheTRIPS Agreement
meets therequirements oftheTRIPS Agreement withrespect toPartI,PartII(Sections 1-2,4-5,7-8),
PartIII(Sections 1,2,5), PartIVandPartVthereof.
Taking intoaccount thatsince thedateofpreparing andsubmitting ofWT/L/49 andWT/ACC/LVA/4
Latvia haspassed certain legalinstruments andacceded totheBernConvention, thetabulation needs
tobecorrected. Forexample, theadoption oftheLawof13September 1995, onAmendments tothe
Latvian Civil Procedural Code covers some deficiencies ofLatvia ’slegislation withregard toSection
3(Provisional Measures) ofPartIIIoftheTRIPS Agreement. Thedraft LawonProtection of
Topographies ofIntegrated Circuits which hasbeenrecently passed fortheconsideration bycompetent
Latvian authorities willensure thefulfilment oftherequirements ofSection 6ofPartII,etc.(refer
alsotoreply toquestion 96).
Thereplies toquestions 141and143inWT/L/49 canserve asafurther commentary tothe
WT/ACC/LVA/4 tabulation.
70. InWT/ACC/LVA/4,inthesectiononTRIPS,LatviaappearstoindicatethatitsIntellectual
Property Protection regime isconsistent withtheTRIPs Agreement.
Reply
Seeanswer 71.
71. Please provide more detail inrelation tothose provided onpage28,indicating inprecise
terms what lawsandother legal provisions address thevarious parts oftheTRIPS Agreement.
Reply
Thefollowing lawsandother legalprovisions address theParts oftheTRIPS Agreement:
PartI,Article 2-Stockholm ActoftheParis Convention fortheProtection ofIndustrial Property
entered intoforce, withrespect totheRepublic ofLatvia, on7September 1993
-BernConvention (1971) fortheProtection ofLiterary andArtistic Works (11August 1995);
PartII,section 1-Copyright Law(11May1993);
-LawonAmendments totheLatvian Criminal Code (6October 1995);
PartII,section 2-Trademark Law(11May1993);
PartII,section 3-provisions oftheLawonCompetition andMonopoly Restriction (3December 1991)
including provisions onunfair competition
PartII,section 4-LawonIndustrial Design Protection (4May1993);WT/ACC/LVA/8
Page40
PartII,section 5-Patent Law(March 2,1993) andamendments (30March 1995);
PartII,section 7-LawonCompetition andMonopoly Restriction (3December 1991) including
provisions onprotection ofundisclosed information;
PartII,section 8-Patent Law, Trademark Law, LawonIndustrial Design Protection;
PartIII,section 2-Intellectual Property Laws, above mentioned;
PartIII,section 3-LawonAmendments totheLatvian CivilProcedural Code providing forprovisional
measures (13September 1995);
PartIII,section 4-LawonAmendments totheLatvian Civil Procedural Code (13September 1995);
PartIII,section 5-Latvian Criminal Code;
-LawonAmendments totheLatvian Criminal Code (6October 1995);
PartIV-Patent Law, Trademark Law, LawonIndustrial Design Protection andCopyright Law;
PartV,Article63-lawsandregulations,finaladministrativerulingsarepublishedinofficialpublications;
finaljudicial decisions arepublicly available intheLatvian language.
V. INSTITUTIONAL BASE FOR TRADE AND ECONOMIC RELATIONS WITH THIRD
COUNTRIES
72. HowcanLatvia ’sfreetrade agreements (FTA ’s)beconsidered tobeconsistent withGATT
ArticleXXIVgiventhatagriculturalproductsareexcludedfromthecoverageofsomeoftheFTA’s?
Which oftheFTA’sprovide foraplanleading tofullfreetrade inagricultural products? Which
ofitsFTA’swillleadtozerotariffs foragriculture? CanLatvia advise oftheoutcome ofthe
Agriculture negotiations under thetrade agreements with theBaltic countries? (reply on
question 63,WT/L/49).
Reply
Latvia would liketoclarify thesituation withLatvia ’sfreetradeagreements currently inforce. Latvia ’s
freetrade agreements withNorway andSwitzerland have been notified to,andexamined under
Article XXIV bytheGATT Working Party.
Latvia ’sfreetrade agreement withtheEUhasbeennotified inWT/REG/7/1 of12July1995 for
examination under Article XXIV.
Thetrilateral freetradeagreement between Latvia, Estonia andLithuania covers industrial goods (HS
25-97) andanAgreement onTrade inAgricultural Products iscurrently being negotiated.
Inorder tofulfilobligation ofaWTO Member, afterLatvia ’saccession totheWTO, Latvia willnotify
under Article XXIV allFTAs which willbecurrently inforce.
73. What isthestatus oftheTrilateral Agreement onTrade inAgricultural Products being
negotiated among theBaltic nations?
Thetrilateral Agreement onTrade inAgriculture Products iscurrently being negotiated.WT/ACC/LVA/8
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74. Latvia hasfailed onseveral occasions toadequately address thequestions oftheWorking
Party concerning thestructure andimpact ofitsFTA withEUorother States, eg.,questions
14,52,62,63,and 64ofWT/L/49. WeseekLatvia ’sco-operation inlaying outinstraight-forward
terms where tariff preferences orother non-MFN provisions havebeenestablished inconnection
withthese agreements. Please respond tothese previous questions.
- How willLatvia conform itsfree-trade arrangements tobeconsistent withArticle XXIV
oftheGATT? WillLatvia notify these agreements under Article XXIV?
- IntheFTM, Latvia state thatagriculture isexcluded from itsFreeTrade Agreements.
However, theresponse toquestion 147inWT/L/49 seems toindicate thatthere isprovision
foragriculture inthese agreements. Why isitnoted thatagriculture isif,infact, itis
not?
Reply
Seeanswer 72.
VI. LAWS AND LEGAL ACTS
75. Please listpending, planned, orrecently passed legislation andother legal instruments
thatwillbring Latvia 'strade regime intocompliance withWTO provisions.
According totheSatversme (Constitution oftheRepublic ofLatvia) andtheLaw"OnInternational
Agreements",internationalAgreementsprevailovernationallaws.Ifthenationallawcontainsprovisions
notconforming withinternational obligations, theprovisions oftheinternational agreement haveto
beapplied. Nevertheless, forimplementation reasons, there areseveral lawsandregulations listed
below which havetobepassed bytherelevant Latvian authorities:
- LawonAmendments totheLatvian Criminal Code (6October 1995);
- LawonAmendments totheLatvian CivilProcedural Code providing forprovisional measures
(Part III,Section 3oftheTRIPS Agreement);
- LawonProtection ofTopographies ofIntegrated Circuits (pending);
- LawonAmendments totheLatvian Criminal Code referring totheprotection oftopographies
(pending);
- LawonCinematographic Works (pending);
- LawonAmendments totheLatvian Administrative Offence Code (pending);
- Regulation onDistribution (reproduction) andPublic Performance ofCinematographic Works
(pending);
- LawonProtection ofGeographical Indications (planned);
- LawonProtection ofUndisclosed Information (planned);
- amendments tothePatent Law, Trademark Law, LawonIndustrial Design Protection are
planned tofullymeettheprovisions ofPartII,Section 8;
- amendments tothePatent Law, Trademark Law, LawonIndustrial Design Protection and
Copyright Lawareplanned tofullymeettheprovisions ofPartIII,Sections 3and4.
SaeimahasacceptedtheLaw"Onprotectionofconsumerrights"on28October1992.Inthepreliminary
stage there areLaws:
"Onuniformity ofmeasures";
"Onconformity assessment";
"Onsafety ofproducts, services andliability ofproducer, service supplier".WT/ACC/LVA/8
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Latvia isamong theStates, which havesigned theEnergy Charter Treaty on17December 1994 in
Lisbon. InSeptember 1995theETCandrelated documents wereaccepted bytheParliament. Thepart
oftheTreaty relating totrade (energy materials andproducts) isconsistent withWTO provisions.
Atpresent theContracting Parties arenegotiating concern onexceptions tothebetter National orMost
Favoured Treatment asregards themaking ofinvestments intheirareas.