RESTRICTED
WORLD TRADE G/STR/N/1/CYP
17October 1995
ORGANIZATION(95-3115)
Original: English
STATE TRADING
Notification Pursuant toArticle XVII:4(a) oftheGATT 1994 and
Paragraph 1oftheUnderstanding ontheInterpretation ofArticle XVII
CYPRUS
Thefollowing communication, dated 29August 1995, hasbeenreceived fromthePermanent
Mission ofCyprus.
_______________
Ihavethehonour torefertotheDecision oftheCouncil forTrade inGoods of20February 1995
andtosubmit herewith pursuant toArticle XVII:4(a) oftheGATT 1994 andParagraph 1ofthe
Understanding ontheInterpretation ofArticle XVII, theresponses oftheGovernment ofCyprus to
thequestionnaire onstatetrading.G/STR/N/1/CYP
Page2
ANSWERS TOTHE QUESTIONNAIRE ONSTATE TRADING
I. ENUMERATION OFSTATE TRADING ENTERPRISES
InCyprus stateenterprises aremaintained forthefollowing products:
Products State enterprise
Feed barley
Maize
Wheat (forhuman consumption)Cyprus Grain Commission
Milk Cyprus Milk Industry Organization
Rawgrape alcohol (Zivania)
Raisins (dried grapes)VineProducts Commission
Potatoes Cyprus Potato Marketing Board
Carrots
BeetrootCyprus Carrot andBeetroot Marketing
Board
Olives
Olive oilCyprus Olive Products Marketing Board
II. REASON AND PURPOSE FORINTRODUCING AND MAINTAINING STATE TRADING
ENTERPRISES
Feed Barley, Maize, Wheat -Cyprus Grain Commission
TheCyprus Grain Commission wasestablished byLawNo.7of1953, asasemi-government
organization forthepurpose ofsecuring sufficiency ofgrain andequitable distribution oravailability
atfairprices forthebenefit ofbothproducers andconsumers.
Themain objectives oftheCommission arethefollowing:
(a) toprovide, secure andpromote theprovision oftherequired supply ofgrain;
(b) toestablish stores forthestorage, purchase, sale,distribution anddelivery ofgrain;
(c) tosecure interests ofbothproducers andconsumers;
(d) toestablish afund(stabilisation account) forthepurpose ofmaintaining auniform price
forgrain;
(e) tosecure ahighlevel ofquality ofgrain being bought, stored andsoldbythe
Commission;
(f) tofixmaximum prices atwhich grain shallbepurchased orsold.G/STR/N/1/CYP
Page3
Milk -Cyprus Milk Industry Organization
TheCyprus Milk Industry Organization isaMarketing Board established byLawNo.4of
1969, forthepurpose ofmilkcollection anddistribution.
Themain objective oftheOrganization istosecure theinterests ofthemilkproducers, the
dairy industry andtheconsumers.
TheOrganizationalsoperformsasystematicqualitycontrolduringthecollectionanddistribution
ofmilkinorder toensure thebestpossible milkquality. Italsoplays animportant roleintheprocess
ofplanning andcontrolling milkproduction, byintroducing milkquotas tothefarmers.
RawGrape Alcohol, Raisins -VineProducts Commission
TheVineProductsCommissionwasestablishedbytheenactmentoftheVineIndustry(Regulation
andControl) LawNo.52of1965. Theobjective forestablishing theCommission wastoadminister,
regulate, control anddevelop thevineproduct industry ingeneral. Themain functions oftheVine
Products Commission arethefollowing:
(a) regulation andcontrol ofvineproduction;
(b) concentration ofsurplus vineproducts suchasrawgrape alcohol (Cyprus Zivania)
andraisins;
(c) marketing surplus production onlyintheform ofrawgrape alcohol (Zivania) and
raisins;
(d) administration ofsubsidy schemes andpayment ofsubsidies tothevinegrowers;
(e) control ofvineplantation;
(f) regulation andcontrol ofallmatters related toproduction, consumption, presentation,
origin andquality ofwines.
TheCommission isanindependent bodywithexecutive powers butultimately responsible to
theGovernment which finances allitsactivities.
TheVineProducts Commission actsasanintervention body topurchase surplus production
ofgrapes intheform ofrawgrape alcohol (Zivania) and/or raisins. When thewineries arenotin
aposition toabsorb thetotalannual cropofgrapes, theVineProducts Commission encourages the
growers toproduce rawgrape alcohol (Zivania) andraisins. These surplus products arethenpurchased
bytheVineProducts Commission andsoldeither locally orabroad. Inthiswaythegrower hasalways
aplace todispose hissurplus production ofgrapes andstabilize hisincome.
Potatoes -Cyprus Potato Marketing Board
TheCyprus Potato Marketing Board isasemi-state organization incorporated byLawNo.59
of1964. Itsobjective isthehandling ofthePotato Industry inCyprus, including theexports ofpotatoes.
Theneedfortheestablishment oftheCyprus Potato Marketing Board became evident in1964
forthefollowing reasons:G/STR/N/1/CYP
Page4
(a) thepotato growers were uncertain astowhether ornottheywould dispose oftheir
production;
(b) duetothisuncertainty therewasstrong competition among thegrowers which resulted
indisposing theirproduction atlower prices;
(c) there wasadestructive competition among theCypriot exporters duetothelackof
coordination intheirexport marketing programmes;
(d) duetothefactthatproduction wasnotplanned andcontrolled, agreat percentage of
thecropwasoften leftunsold inthehands ofthegrowers;
(e) ingeneral, therelationship between thegrowers, theCypriot exporters andtheforeign
importers wasnotsatisfactory. Thelackofplanning inproduction andmarketing
usually caused greatproblems tothegrowers andalsototheexporters andtheforeign
importers.
According tothelaw,theBoard hasthefollowing duties:
(a) tosecure forandonbehalf oftheproducers ofpotatoes, bysuchregulation andcontrol
asmaybenecessary, themostfavourable andeconomical arrangements forthegrading,
packing, transporting, marketing, export, shipping andsaleofpotatoes andgenerally
todoallsuchthings andtakeallsuchstepsasappear totheBoard requisite orexpedient
forthepromotion ofstable andorderly potato industry intheRepublic andofthe
producers inthatindustry;
(b) tosecure, asfarasispracticable, theenhancement ofthefinancial returns toproducers
ofpotatoes onalong-term basis;
(c) tostabilize thefinancial returns ofproducers ofpotatoes byreducing, asfaras
practicable, through theoperation ofaStabilization Fund, theeffects ofshort-term
fluctuation inworld market prices ofpotatoes;
(d) toregulate, asfarasispracticable, thesupply ofpotatoes inrelation toeffective demand
and,should theneed arise, tomake, within thelimitations oftheworld market
conditions thenprevailing andoftheBoard 'sfinancial resources, themostequitable
arrangements forthedisposal ofsurplus potatoes.
Carrots, Beetroot -Cyprus Carrot andBeetroot Marketing Board
TheCyprus Carrot andBeetroot Marketing Board isasemi-state organization incorporated
byLawNo.71of1966.
Theneedfortheestablishment oftheCyprus Carrot andBeetroot Marketing Board became
evident in1966 forthefollowing reasons:
(a) thecarrot andbeetroot growers wereuncertain astowhether ornottheywould dispose
oftheirproduction;
(b) duetothisuncertainty therewasstrong competition among thegrowers which resulted
indisposing theirproduction atlower prices;G/STR/N/1/CYP
Page5
(c) there wasadestructive competition among theCypriot exporters duetothelackof
coordination intheirexport marketing programmes;
(d) duetothefactthatlocalproduction wasnotplanned andcontrolled, agreatpercentage
ofthecropwasoften leftunsold inthehands ofthegrowers;
(e) ingeneral, therelationship between thegrowers, theCypriot exporters andtheforeign
importers wasnotsatisfactory. Thelackofplanning inproduction andmarketing
usuallycausedgreatproblemstothegrowersandalsototheexportersandtheimporters.
According tothelaw,theBoard hasthefollowing duties:
(a) tosecure forandonbehalf oftheproducers ofcarrots andbeetroot, bysuchregulation
andcontrol asmaybenecessary, themostfavourable andeconomical arrangements
forthegrading, packing, transporting, marketing, export, shipping andsaleofcarrots
andbeetroot andgenerally todoallsuchthings andtakeallsuchsteps asappear to
theBoard requisite orexpedient forthepromotion ofstable andorderly carrot and
beetroot industry intheRepublic andoftheproducers inthatindustry;
(b) tosecure, asfarasispracticable, theenhancement ofthefinancial returns toproducers
ofcarrots andbeetroot onalong-term basis;
(c) tostabilize thefinancial returns ofproducers ofcarrots andbeetroot byreducing, as
faraspracticable, through theoperation ofaStabilization Fund, theeffects ofshort-term
fluctuations inworld market prices ofcarrots andbeetroot;
(d) toregulate, asfarasispracticable, thesupply ofcarrots andbeetroot inrelation to
effective demand and,should theneedarise, tomake, within thelimitations ofthe
world market conditions thenprevailing andoftheBoard 'sfinancial resources, the
most equitable arrangements forthedisposal ofsurplus carrots andbeetroot.
Olives, Olive Oil-Cyprus Olive Products Marketing Board
TheCyprus Olive Products Marketing Board wasestablished byLaw24of1968forthepurpose
ofregulating andcontrolling theolive produce industry forthebenefit oftheproducers taking also
intoconsideration thepublic interest. Inorder topursue these objectives theBoard ismandated to
usethemostbeneficial andeconomical arrangements forthegrading, packing, transport, marketing,
exportation, loading andsaleofolive produce andgenerally totakeanymeasures thatitconsiders
necessary orexpedient forthepromotion anddevelopment oftheolive produce industry inCyprus.
III. DESCRIPTION OFTHE FUNCTIONING OFTHE STATE TRADING ENTERPRISES
Cyprus Grain Commission
- TheCyprus Grain Commission dealswiththeimports offeedbarley, maize andwheat.
- Private traders arenotallowed toimport anyoftheabove-mentioned products. They
areallowed, however, toexport grain. Theselling prices aredetermined bytheCyprus
Grain Commission aftertheapproval oftheGovernment. There isnofreecompetition
between private traders andtheCommission.G/STR/N/1/CYP
Page6
- Thecriteria usedfordetermining thequantities tobeimported aretheneeds forthe
localconsumption. Thebuying lotsarebetween 18,000 mtonsto25,000 mtonsfor
eachtender.
- International prices aretaken intoconsideration when therearequantities forexports.
Export quantities however, areminimal andrarely occur.
- Nolong-term contracts arenegotiated either bytheCommission orbytheGovernment.
Cyprus Milk Industry Organization
- TheCyprus MilkIndustry Organization doesnotusually dealwithexports orimports.
Inexceptionalcases,however,somequantityofdairyproductsproducedoutofsurpluses
maybeexported.
- Private traders arefreetoexport unlimited quantities ofdairy products. Forsome
products suchasCyprus Halloumi Cheese, long-life milk, yoghurt etc.,exports are
subsidized. There isnocompetition between theOrganization andtheprivate traders
asfarasdairy products areconcerned because theOrganization doesnotimport or
export anyofthose products.
- There arenocriteria indetermining thequantities tobeexported.
- Export prices aredetermined freely bytheexporters. Themark-up onimported dairy
products isdetermined bytheMinistry ofCommerce, Industry andTourism. Cheese
isnotexported atpresent. Theresale price oftheimported cheese inmost cases is
lower thanthatlocally produced.
- Nolong-term contracts arenegotiated.
VineProducts Commission
(a) RawGrape Alcohol (Cyprus Zivania)
- TheVineProducts Commission isinvolved intheexports ofrawgrape alcohol
(Zivania)incaseswherethereissurplusproductionofgrapes.TheCommission
doesnotdealwithimports ofrawgrape alcohol.
- Private trading ofrawgrape alcohol (Zivania) forthetimebeing isnotallowed.
AstheCommission isnotinvolved intheimportation ofrawgrape alcohol
nodataonthemark-up prices isavailable.
- International prices aretaken intoconsideration when there arequantities for
export.
- Long-term contracts arenotnegotiated.
(b) Dried Grapes -Raisins
- TheVineProducts Commission deals onlywithexports ofraisins. Itisnot
involved inimports.G/STR/N/1/CYP
Page7
- Private trading inraisins isnotprohibited. Imports andexports ofraisins is
free. There isfreecompetition inthelocalmarket butwithrespect toexports
theCommission issubsidized bytheGovernment.
- Long-term contracts arenotnegotiated.
TheCyprus Potato Marketing Board
- Theenterprise deals bothwithimports andexports.
- Private traders areallowed toexport potatoes tocertain destinations onlythrough the
Board andwiththepermission oftheBoard. Private traders areallowed toimport
potatoes onlyafter obtaining thenecessary import licences from theMinistry of
Commerce, Industry andTourism.
- Thecriteria fordetermining thequantities tobeexported isasfollows: theproduction
isprogrammed bytheCyprus Potato Marketing Board afterestimating thequantity
forexport andtheneeds ofthelocalmarket. Thecriteria fordetermining thequantities
forimports ismerely theavailability ofpotatoes fortheneeds ofthelocalmarket.
- Export prices ofpotatoes aredetermined bysupply anddemand oftheimporting
country. Themark-up onimported potatoes isdetermined bysupply anddemand in
thelocalmarket. Theexport prices andtheresale prices ofimports areabout thesame.
- Long-term contracts arenotnegotiated bytheCyprus Potato Marketing Board.
TheCyprus Carrot andBeetroot Marketing Board
- Theenterprise deals onlywithexports.
- Private traders areallowed toexport carrots andbeetroot tocertain destinations only
through theBoard andwiththepermission oftheBoard.
- Thecriteria fordetermining thequantities tobeexported isasfollows: theproduction
isprogrammed bytheCyprus Carrot andBeetroot Marketing Board afterestimating
thequantity forexport.
- Export prices ofthecarrots andbeetroot aredetermined bysupply anddemand inthe
importing country.
- Long-term contracts arenotnegotiated bytheCyprus Carrot andBeetroot Marketing
Board.
Cyprus Olive Products Marketing Board
- TheCyprus Olive Products Marketing Board deals bothwithexports andimports.
- TheBoard authorises private traders toimport orexport oliveproducts depending on
thevolume andquality ofthelocalproduction. There isnocompetition between private
traders andtheBoard.G/STR/N/1/CYP
Page8
- Thecriteria usedfordetermining thequantities tobeexported orimported arebased
onthevolume ofthelocalproduction andtherequirements ofdomestic consumption.
- Nosignificant quantities ofoliveproducts havebeenexported inrecent years. World
prices ofoliveproducts aremuch lower thandomestic prices, which arefixed bythe
Government periodically. Theprices ofimported olive products areinlinewiththe
prices fixed forthedomestic market.
- Nolong-term contracts arenegotiated bytheCyprus Olive Products Marketing Board.
IV. STATISTICAL INFORMATION
Feed Barley, Maize, Wheat -Cyprus Grain Commission
YearNational production Imports Exports
Quantity
(tons)Value
(£C'000)Quantity
(tons)Value
(£C'000)Quantity
(tons)Value
(£C'000)1
1992-93 170,260 19,396 427,190 23,866 - -
1993-94 191,830 21,851 463,035 24,641 - -
1994-952150,680 17,994 509,426 26,853 - -
1 Please notethat£C1.00 corresponds toUS$2.30
2 Provisional
Note: Allimports andnational production were effected bytheCyprus Grain Commission.
Milk -Cyprus Milk Industry Organization
Notapplicable astheMilk Industry Organization deals withexports orimports, onlyin
exceptional cases.
RawGrape Alcohol, Raisins -VineProducts Commission
RawGrape Alcohol (Zivania)
YearNational production Imports Exports
Quantity
(tons)Value
(£C'000)Quantity
(tons)Value
(£C'000)Quantity
(tons)Value
(£C'000)
1992 142 60 - - - -
1993 150 69 - - - -
1994 280 134 - - - -G/STR/N/1/CYP
Page9
Raisins
YearNational production Imports Exports
Quantity
(tons)Value
(£C'000)Quantity
(tons)Value
(£C'000)Quantity
(tons)Value
(£C'000)
1992 355 202 - - 255 136
1993 366 220 - - 268 134
1994 674 438 - - 574 324
Note: Allexports ofraisins were effected bytheVineProducts Commission.
Potatoes -Cyprus Potato Marketing Board
YearNational production Imports Exports
Quantity
(tons)Value
(£C'000)Quantity
(tons)Value
(£C'000)Quantity
(tons)Value
(£C'000)
1991/92 207,000 24,500 - - 150,000 18,800
1992/93 176,000 29,750 - - 145,000 25,130
1993/94 137,000 36,200 3,000 630,000 108,000 31,843
Note: Allexports ofpotatoes were effected bythePotato Marketing Board.
Regarding imports, 2,000 tonswereimported bytheBoard while 1,000 tonsbyprivate traders.
Carrots, Beetroot -Cyprus Carrot andBeetroot Marketing Board
Carrots
YearNational production Imports Exports
Quantity
(tons)Value
(£C'000)Quantity
(tons)Value
(£C'000)Quantity
(tons)Value
(£C'000)
1992 740 60 - - 435 53
1993 350 N.A. - - - -
1994 400 6 - - 19 5G/STR/N/1/CYP
Page10
Beetroot
YearNational production Imports Exports
Quantity
(tons)Value
(£C'000)Quantity
(tons)Value
(£C'000)Quantity
(tons)Value
((£C'000)
1992 1,700 265 - - 1,065 233
1993 1,600 273 - - 1,063 246
1994 2,000 374 - - 1,436 346
Note: Allexports ofcarrots andbeetroot wereeffected bytheCarrot andBeetroot Marketing Board.
Olives, Olive Oil-Cyprus Olive Products Marketing Board
Olives
YearNational production Imports Exports
Quantity
(tons)Value
(£C'000)Quantity
(tons)Value
(£C'000)Quantity
(tons)Value
(£C'000)
1992 5,000 5,000 100 50 - -
1993 4,000 4,000 - - - -
1994 5,000 5,500 - - - -
Olive Oil
YearNational production Imports Exports
Quantity
(tons)Value
(£C'000)Quantity
(tons)Value
(£C'000)Quantity
(tons)Value
(£C'000)
1992 2,000 4,400 300 375 - -
1993 3,000 6,600 - - - -
1994 2,500 5,500 - - - -
V. REASON WHY NOFOREIGN TRADE HAS TAKEN PLACE INPRODUCTS
AFFECTED
Feed Barley, Maize, Wheat
Thereason fornoteffecting exports istheinsufficient production ofgrain inCyprus.G/STR/N/1/CYP
Page11
Milk
Notapplicable astheMilk Industry Organization, deals withimports orexports, onlyin
exceptional cases.
RawGrape Alcohol, Raisins
Fortheyears 1992-1994 noexports ofrawgrape alcohol (Zivania) havetaken place asthe
whole quantity produced hasbeenabsorbed bythelocalproducers ofalcoholic drinks. During this
period thegrape crophasbeenadversely affected bythecontinued drought.
Potatoes
Thereason fornoteffecting imports isduetothefactthatCyprus isselfsufficient inpotatoes.
Carrots, Beetroot
Thereason fornoteffecting imports isduetothefactthatCyprus isselfsufficient incarrots
andbeetroot.
Olives, Olive Oil
Exports ofolives andolive oilhavenotbeeneffected duetothehighcostofproduction.
Normally localprices aretwice theaverage ofinternational prices.