RESTRICTED
WORLD TRADE WT/L/34
21February 1995
ORGANIZATION(95-0361)
Original: French
REQUEST BYTHE PEOPLE 'SDEMOCRATIC REPUBLIC OFALGERIA
FOR OBSERVER STATUS INWTO BODIES
Thefollowing communication, dated 30January 1995, hasbeenreceived fromthepermanent
Mission ofthePeople 'sDemocratic Republic ofAlgeria totheUnited Nations Office andOther
International Organizations inSwitzerland.
_______________
ThePermanent Mission ofthePeople 'sDemocratic Republic ofAlgeria totheUnited Nations
andother International Organizations inSwitzerland presents itscompliments totheWorld Trade
Organization (WTO) and,withreference totheforthcoming meeting oftheGeneral Council ofthe
World Trade Organization, tobeheldon31January 1995, hasthehonour torequest thatitbegranted
observer status tothisbody andtotheother relevant organs oftheWTO.
Asaparticipant intheUruguay Round negotiations, Algeria welcomed themultilateral impetus
stimulated bythesuccessful outcome oftheRound and,pending theconclusion ofitsinternal initiatives
withaview toitsadmission totheWTO, wishes tocontinue todisplay itsinterest inthenewly
established multilateral system anditsfundamental objectives.
Inthatrespect, Algeria willnotfailtohonour theobligations inherent inthestatus which it
isrequesting.
Inaccordance withtheguidelines concerning thestatus ofGovernment Observers totheWorld
Trade Organization, abriefmemorandum describing Algeria 'spolicies intheeconomic andcommercial
fields isattached tothiscommunication.
ThePermanent Mission ofthePeople 'sDemocratic Republic ofAlgeria takesthisopportunity
toreiterate theassurances ofitshighest consideration totheWorld Trade Organization.WT/L/34
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TRADE AND INVESTMENT REFORM
Algeria iscurrently engaged inprofound reforms aimed atintroducing amarket economy and
progressively integrating thecountry intothemultilateral trading system. These reforms, which began
in1988, havealready hadthefollowing results:
- Public enterprises becoming autonomous, through theirtransformation intoeconomic
entities governed bytheTrade Code andsubject totherulesoffinancial profitability;
- demonopolization ofcommercial activities; and
- opening ofinvestment totheprivate sector.
Thepragmaticandprogressiveapproachadoptedandthesustainedeffortstoadapttheinstitutional
framework have, through theintroduction ofthestabilization programme, made itpossible tosetthe
framework andconditions foranopeneconomy based onmarket rules.
More specifically, these reforms havebeenreflected inchanges inorganization andinthe
legislative andregulatory framework inallareas, particularly trade andinvestment.
1. TRADE
Intrade, thereforms haveledtoliberalization offoreign tradeandprices andtheintroduction
ofalegalframework topromote andprotect competition.
1.1 Foreign trade
Foreign trade policy isbased ontheprinciple offreedom oftrade. Thecurrent provisions
donotinclude anynon-tariff barriers toforeign trade operations.
Theimport andexport regime andthetariff regulations applicable tothem aresummarized
below:
1.1.1 Import andexport regime
Access toforeign trade, which foralongtimewasrestricted toStatecompanies, isnowopen
toallnatural andlegal persons acting inthecontext oftheiractivity andbylaws andincompliance
withtrade regulations.
(a) Imports
Thenewprovisionshaveresultedintheabolitionofthepriorcontrolandspecificationsapplicable
toproducts destined forresale intheirexisting state.
Thenewarrangements, mainly introduced byInstruction No.20/94 of12April 1994 ofthe
Bank ofAlgeria setting thefinancial conditions forimport operations, provide forthefreeimportation
ofallproducts, withtheexception ofthose which areprohibited orsuspended:
- Prohibition mainly concerns products which might constitute athreat tosecurity, health
andtheenvironment;WT/L/34
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- suspension concerns products whose importation might seriously injure aninfant
domestic industry. Currently, following abrogation, from 1January 1995, ofthe
negative listestablished bytheDecree of10April 1994, asamended andsupplemented,
noproduct isonthesuspension list.Protection ofdomestic industry will,inthefuture,
beensured essentially bycustoms tariffs.
Theallocation offoreign exchange, previously carried outbytheAdministration, hasnow
beendevolved tocommercial banks, subject tocompliance withtheforeign exchange regulations and
theprudential standards andrules issued bytheBank ofAlgeria.
Under theforeign exchange regulations, imports maybesettled incashorbecharged toa
credit line.However, withregard tocapital goods, importation issubject totheobligation offinancing
byforeign credits whose length matches thenature oftheequipment andmayinnocasebelessthan
three years.
Infact,import operations arenowdealt withdirectly between banks andtheir customers
essentially onthebasis ofcriteria ofsolvency andeconomic andfinancial profitability.
TheroleoftheAdministration, which nolonger intervenes atthisstage, hasbeenredirected
towards preparation andintroduction ofinstruments foreconomic regulation andmonitoring themarket.
(b) Exports
Export operations arealsofreeandthusnotsubject toanyprior administrative authorization.
Thelistofproducts whose export hasbeensuspended isrestricted topalm plants, breeding
animals andobjects ofnational interest from thestandpoint ofhistory, artandarchaeology.
Forexports,theobjectiveistoachievedevelopmentanddiversificationofnon-petroleumexports,
byestablishing aneffective andstimulating regulatory framework.
Apart fromthebeneficial effects expected fromthedevaluation oftheAlgerian dinar andthe
measures forrestructuring industry byimproving product competitiveness, itisplanned to:
- Revive andrealize theproject forcreating anexport guarantee andinsurance company;
- tointroduceanofficeforpromotingforeigntrade,whichwillberesponsibleinparticular
forsupporting andassisting exporters.
Inaddition, considering thattradepromotion includes restructuring andsimplifying therelevant
procedures throughout theforeign tradechain (banks, customs, transit, transport etc.)procedures which
currently areanimportant factor incausing hold-ups, delays andexcess costs, acommittee tofacilitate
trade hasbeensetup.
Thetasksofthiscommittee, which comprises representatives oftheadministrations andbodies
concerned aswellastraders, are:
- Simplifying procedures forforeign trade operations;
- encouraging economic operators andtheadministration toadopt thebestpractices in
organizing, regulating andmanaging foreign trade;WT/L/34
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- contributing toupgrading theprofessional skills ofthose involved inforeign trade
operations.
Finally, itshould bepointed outthatadraftlawonforeign trade iscurrently being adopted.
Thedraftlaw:
- Enshrines theprinciple ofliberalization offoreign trade;
- setsoutsafeguard andanti-dumping measures, andestablishes themeans andconditions
fortheirimplementation;
- defines theframework forforeign trade.
1.1.2 Tariff regulations
(a) Customs Tariff Nomenclature
TheCustoms Tariff Nomenclature hasbeenbased since 1January 1992 ontheHarmonized
Commodity Description andCoding System.
TheNomenclature includes, inaddition tothesixdigitcodes oftheHarmonized System, a
seventh digitusedinthecontext oftheMaghreb Arab Union andaneighth digitfornational use.
Types ofduties .Customs duties under theTariff areduties based onvalue (advalorem duties).
General description ofthestructure oftheCustoms Tariff .TheTariff consists ofthe
following customs duties: exempt, 3,7,15,25,40and60percent.
TheTariff iscomposed ofeight groups ofproducts totalling 6,108 tariff subheadings.
Distribution ofsubheadings byproduct group :
1. Food 656
2. Energy andlubricants 88
3. Rawproducts 514
4. Semi-finished goods 1988
5. Agricultural equipment 52
6. Industrial capital goods 1113
7. Consumer goods 1690
8. Industrial gold 7
Distribution ofcustoms duties (in1994) :
Exempt 3 7 15 25 40 60%
137 660 1,151 1,263 946 857 1WT/L/34
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(b) Import charges andfees
Thecustoms duesare2percent.Theyarelevied onalloperations which aresubject tocustoms
declaration onthebasis ofthevalue ofthegoods.
Operations giving risetoadetailed declaration ofgoods arenotsubject tothischarge:
- Goods admitted freeofduties andcharges;
- goods admitted under aregime suspending payment ofduties;
- goods whose customs value doesnotexceed 1,000 dinars;
- goods imported orexported bypost, parcel postorbytravellers; and
- goods reimported afterbeing displayed atanexhibition, fairorother event.
Inaddition, thefeeforcustoms formalities is4percent.
(c) Other charges under theCustoms Code
- Surcharges (supplementary customs duties). These surcharges, intheform of
supplementary customs duties, areprovided forinArticle 8bisoftheCustoms Code
toprevent aState taking discriminatory measures suchastotreatAlgerian products
lessfavourably thanthoseofotherStates, ortaking measures thatmight hinder Algerian
trade. Surcharges oncustoms duties aredecided byexecutive decree.
- Countervailing oranti-dumping duties .These duties areprovided forinArticle
8teroftheCustoms Code toprevent imports causing orthreatening injury toanexisting
orplanned domestic industry.
(d) Exemption from customs duties under specific provisions
Exemptions fromcustoms duties aregranted under international agreements orinapplication
ofmeasures taken under theFinance Law.
(e) Tariff preferences
Thecustoms tariff consists ofonlyasingle column ofcustoms duties. Tariff preferences are
provided forinthecontext oftariff andtrade agreements concluded byAlgeria. These agreements
provide forfreedom fromcustoms duties andequivalent charges fortheoriginating products traded.
1.2. Prices
In1986, 80percentoftheprices intheconsumer price index basket were controlled and
20percentfree.
Theabove proportions havenowbeenreversed, since currently 90percentofprices arefree.WT/L/34
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Onlytheprices ofcertain products, which aresensitive orforwhich conditions ofcompetition
havenotyetbeenbrought about, aremaintained under asystem ofprice ormargin ceilings. This
mainly concerns basic foodproducts (corn, milk, seeds) andenergy products.
Theobjective istophase outtheabove listsuntilthere istotalprice liberalization.
1.3. Competition
Alawoncompetition hasbeenadopted andpromoted. Thislawestablishes thelegalframework
ofcompetition andmechanisms forprotection.
A"national competition council", essentially responsible forensuring compliance withrules
ofcompetition, hasbeenincluded intheprovisions ofthislaw.
2. Investment
Alegislative decree aimed atpromoting investment wassigned in1994. Itestablishes more
openarrangements andincludes liberalization ofinvestment forforeign capital andnational private
capital byintroducing aframework ofincentives withapackage ofguarantees toprotect andattract
investors.
Thedecree oninvestment provides forfreedom toinvest inallsectors ofactivity, except those
expressly reserved bylawtotheState.
Theformofinvestment (direct investment, inpartnership withalocalcompany, participation,
takeover, etc.)islefttothefreechoice oftheinvestor.
Investment issubject toasimple declaration essentially intended toidentify andmonitor
investments, particularly those entitled tofavourable treatment bythelaw.
Inaddition, thedecree introduces promotion instruments andincentives consisting offinancial,
fiscal orcustoms advantages.
Tworegimes areestablished: ageneral regime applicable toallinvestments andaspecial regime
applicable toinvestments inspecific zones.
Thelawalsograntsaseriesofguaranteesconcerningthetransferofincomefromcapitalinvested
aswellasthecapital itselfinthecaseoftransfer ofownership, andprovides forrecourse tointernational
arbitration forsettlement ofdisputes related totheinvestment.
Finally, itprovides fortheestablishment ofanagency responsible forpromoting, supporting
andmonitoring investments.
Inorder tofacilitate theinstallation ofinvestors, theagency hasorganized asingle window
atwhich investors cancomplete allthenecessary formalities (trade register, customs, etc.).