RESTRICTED
WORLD TRADE WT/ACC/ARM/2
27September 1995
ORGANIZATION(95-2800)
Original: English
ACCESSION OFARMENIA
Questions andReplies totheMemorandum
ontheForeign Trade Regime
(Document WT/ACC/ARM/1)
Inacommunication dated 6December 1993, circulated asL/7334, theGovernment ofthe
Republic ofArmenia applied foraccession totheGeneral Agreement onTariffs andTrade onthebasis
ofArticle XXXIII oftheGeneral Agreement. Having regard totheDecision adopted bytheGeneral
Council on31January 1995, theWorking Party ontheAccession ofArmenia totheGATT 1947 was
transformed intoaWTO Accession Working Party. Theterms ofreference oftheWorking Party are
reproducedindocumentWT/L/25.IndocumentWT/ACC/ARM/1,membershadbeeninvitedtosubmit
questions inwriting concerning theforeign trade regime ofArmenia. Thequestions submitted by
members andthereplies thereto provided bytheauthorities ofArmenia arereproduced hereunder.
DelegationswishingtoraiseadditionalquestionsconcerningtheforeigntraderegimeofArmenia
might inform thedelegation ofArmenia (with acopy totheSecretariat) ofsuch questions inadvance
ofthemeeting oftheWorking Party, sothatconsidered replies canbemade available byArmenia
tomembers atthetime oftheWorking Party meeting.WT/ACC/ARM/2
Page 2
CONTENTS
Page
INTRODUCTORY COMMENTS 4
PART I: MATERIAL PROVIDED INTHE WT/ACC/1 FORMAT 5
ECONOMY, ECONOMIC POLICIES AND FOREIGN TRADE 5
FRAMEWORK FOR MAKING AND ENFORCING
POLICIES AFFECTING FOREIGN TRADE IN
GOODS AND TRADE INSERVICES 6
POLICIES AFFECTING TRADE INGOODS 7
TRADE-RELATED INTELLECTUAL PROPERTY REGIME 11
TRADE-RELATED SERVICES REGIME 14
Answers toQuestionnaire inAnnex 3ofWT/ACC/1
onImport Licensing 20
Replies toExport Licensing Regime 26
Answers toQuestionnaire inAnnex 4ofWT/ACC/1
onCustoms Valuation 30
Answers toQuestionnaire inAnnex 5ofWT/ACC/1
onTechnical Barriers toTrade 34
PART II: REPLIES TOSPECIFIC QUESTIONS 36
Economy andForeign Trade 36
Current economic situation 36
Economic policy 36
Trade flows byorigin anddestination 39
Foreign Trade Regime 39
The customs tariff 39
Import charges andfees 40
Tax regime 41
Non-tariff measures, quotas andlicensing 43
Standards andcertification 45
Sanitary andphytosanitary measures 45
Export licensing system 46
Other measures 46
Other Policies Affecting Foreign Trade 47WT/ACC/ARM/2
Page 3
Page
Industrial policy 47
Agricultural policy 48
Financial, budgetary andfiscal policy 50
Foreign exchange andpayments system 51
Foreign investment policy 51
Government procurement 52
Privatization andstate trading enterprises 54
Price controls 56
Trade inservices 56
Protection ofintellectual property rights 59
Institutional base forTrade andEconomic Relations
with Third Countries 62
Bilateral free trade agreements 62
Bilateral clearing arrangements 63
Laws andLegal Acts 63
ANNEX 1: Laws andLegal Acts 65
ANNEX 2: Statistical Information 67WT/ACC/ARM/2
Page 4
INTRODUCTORY COMMENTS
1. Thepresent submission ismade inresponse towritten question received from delegations on
Armenia ’sMemorandum onForeign Trade Regime (WT/ACC/ARM/1). Armenia ’sMemorandum
wassubmitted totheWTO Secretariat before the24March 1995 guidelines onAccession totheWorld
Trade Organization (WT/ACC/1) were issued. Forthisreason, Armenia ’sMemorandum didnotfollow
thestructure setoutinthatdocument.
2. Attherequest ofonedelegation, Armenia hasattempted inthissubmission topresent certain
information along thelines prescribed inWT/ACC/1. Some ofthisinformation isadditional towhat
was provided earlier. Inother instances, theinformation sought hasalready been provided in
WT/ACC/ARM/1, andinthese cases thenecessary cross references areprovided. Inaddition, the
present submission replies tospecific written questions posed bydelegations. Insome cases, the
provision ofinformation intheWT/ACC/1 format hasalsoanswered thespecific questions posed by
delegations, andwhere thisoccurs cross references alsoareused.
3. The submission hasbeen structured intwoparts. Part Iisorganized along thelines of
WT/ACC/1, addressing theparticular questions inthatdocument thatwere identified bythedelegation
requesting asupplementary submission inthisformat.1Annexes onimport licensing, export licensing,
customs valuation, andtechnical barriers totrade arealsoincluded inPartI.PartIIofthesubmission
provides answers tothespecific written questions posed bydelegations. Forthesake ofconvenience,
allanswers presented inthisdocument have been numbered consecutively.
ThesectionsofWT/ACC/ARM/1thatwereidentifiedareSectionII4-6;SectionIII1-6;SectionIV.1(a),
1(f)including licensing questionnaire, 1(g), 1(h)including valuation questionnaire, 1(j), 2(a), 2(g), 2(i), 3(b)
including technical barriers totrade questionnaire, 3(e)including State trading questionnaire, 3(h)-(k), 4(a)-(e),
5(a), 5(b), 6;Section V;andSection VI.WT/ACC/ARM/2
Page 5
PART I:MATERIAL PROVIDED INTHE WT/ACC/1 FORMAT
II. ECONOMY, ECONOMIC POLICIES AND FOREIGN TRADE
4. Domestic trade inservices including value andcomposition offoreign direct investment.
4. Available statistics indicate thatdomestic trade inservices amounted tosome US$67.3 million
in1994, andUS$33.8 million inthefirst sixmonths of1995. Total foreign direct investment was
US$5.5 million in1994 andisexpected tobeasmuch asUS$20 million in1995. Unfortunately, no
disaggregated data onservices trade orforeign direct investment areyetavailable.
5. Itmaybementioned thattheGovernment ofArmenia isaccording priority totheimprovement
ofthestatistical base. Tothisend, aworking group atthedeputy minister level from theState
Department ofStatistics, theMinistry ofFinance, theMinistry oftheEconomy andtheCentral Bank
isbeingestablished.Thisworkinggroupwilldevelopacomprehensiveworkprogrammeinthestatistical
areaby30June 1996. Atthesame time, legislation isbeing prepared toempower theState Department
ofStatistics tocollect statistical information. This legislation willbeenacted bythefirstquarter of
1996. Inaddition, mention should bemade ofResolution No.88of24February 1994 onstatistical
reporting forexternal services trade (attached). TheResolution establishes procedures andobligations
forreporting statistics onimports andexports ofservices.
5. Information onfinancial movements related tonationals working abroad, remittances,
etc.
6. Asindicated intheSummary Balance ofPayments table onpage 31ofArmenia ’sMemorandum
(WT/ACC/ARM/1), private transfers amounted toUS$36 million in1994. Nodisaggregation ofthis
amount isavailable, butasignificant partofitrepresents transfers from theArmenian Diaspora. On
thebasis ofprojections prepared inconjunction with theInternational Monetary Fund, these transfers
areexpected tostabilize ataround US$50 million perannum from 1995 to1997, andperhaps riseto
some US$60 million bytheturn ofthecentury.
6. Information ongrowth intrade ingoods andservices over recent years andforecasts for
years tocome.
7. Exports ofgoods areexpected togrow incurrent price (dollar) terms byapproximately 22per
centin1995, 25percentin1996, 20percentin1997, 16percentin1998, 14percentin1999, and
12percentintheyear 2000. Thecomparable figures forimports are23percent, 13percent, 11per
cent, 10percent, 9percent, and8percent. Theslower rateofpredicted import growth willreduce
themerchandise trade account deficit from approximately US$225 million in1995 toUS$208 million
in2000. Please seestatistical tables inAnnex 2.
8. Ontheservices side, thesituation ispredicted tobeconsiderably lessstable. Exports ofservices
(netofinterest payments) arepredicted toincrease byapproximately 30percent in1995 and7per
centin1996, then todecrease by38percentin1997, andtoincrease by3percentin1998, 15per
cent in1999, and12percent in2000. Imports ofservices (netofinterest payments) areprojected
todecrease by8percent in1995, andthen increase by19percent and28percent respectively in
1996 and1997, before decreasing again by4percent, 11percentand14percentin1998, 1999 and
2000 respectively. Theimplications ofthese trends fortheservices balance onthecurrent account
areariseinthedeficit from US$45.6 million in1995 toUS$123.6 in1997, andthen areduction to
US$68.1 bytheyear 2000. Thus, both goods trade andservices trade areexpected tomake positive
contributions toareduction ofthecurrent account deficit inthemedium term.WT/ACC/ARM/2
Page 6
III. FRAMEWORKFORMAKINGANDENFORCINGPOLICIESAFFECTINGFOREIGN
TRADE INGOODS AND TRADE INSERVICES
1. Powers ofexecutive, legislative andjudicial branches ofgovernment.
9. Theexecutive branch ofgovernment intheRepublic ofArmenia comprises thePresident of
theRepublic, thePrime Minister andMinisters. ThePresident oftheRepublic isthehighest executive
authority. ThePrime Minister isappointed bythePresident oftheRepublic. ThePrime Minister
recommends theappointment ofMinisters, whomust beapproved bythePresident. ThePrime Minister
isresponsible fortheday-to-day running ofthegovernment, and presides over theCabinet. The
President oftheRepublic iselected bypopular vote every fiveyears. With theexception offiscal
matters, thePresident isempowered tomake andsigndecrees without theauthorization ofParliament.
Resolutions aregenerally signed bythePrime Minister andtheresponsible Minister, andmayrequire
presidential approval. Administrative Orders aresigned byMinisters. AnyDecree orResolution with
fiscal implications, such aschanges intariff rates, must beapproved bytheparliamentary Permanent
Financial Credit, Budgetary andEconomic Commission, which ispresided over byaMember of
Parliament.
10. Thelegislature oftheRepublic ofArmenia istheNational Assembly, orParliament, which
comprises 190deputies. Deputies areelected bypopular voteevery fouryears. TheNational Assembly,
under theauthority and guidance ofitsChairman, isresponsible forapproving alllaws and
inter-governmental agreements.
11. Inconformity with theConstitution oftheRepublic ofArmenia, thejudiciary isindependent
oftheexecutive andlegislative branches. Thecourts ofgeneral competence arethetribunal courts
offirstinstance, thereview courts andtheSupreme Court. Appeals areheard bytheSupreme Court,
andtheSupreme Court alsoactsasacourt oforiginal jurisdiction inmore serious cases. Theguarantor
oftheindependence ofjudicial bodies isthePresident oftheRepublic, who isHead oftheCouncil
ofJustice. TheMinister ofJustice andtheProcurator General aretheDeputy Heads. TheConstitutional
Court, comprising ninemembers, isresponsible, among other things, forensuring theconstitutionality
ofdecisions oftheNational Assembly, decrees ofthePresident, resolutions oftheGovernment, and
treaties entered intobytheRepublic.
12. Asystem ofstate arbitration oreconomic courts exists inparallel tothenational courts system.
Disputesunderthissystemareresolvedonaninformalbasisthroughbindingarbitration.Thejurisdiction
oftheeconomic courts covers disputes between juridical persons intheRepublic ofArmenia, although
when adispute involves aforeigner from outside theCommonwealth ofIndependent States (juridical
ornatural person) thecase isheard inthenational courts andnotintheeconomic courts system.
2. Government entities responsible formaking andimplementing policies affecting foreign
trade.
13. TheMinistry oftheEconomy hasprimary responsibility inmost aspects ofpolicy affecting
international trade ingoods andservices. TheMinistry ofFinance hasoverall responsibility forfiscal
policy, buttariffs areproposed bytheMinistry oftheEconomy. Allfiscal policy must beapproved
bytheparliamentary Permanent Financial Credit, Budgetary andEconomic Commission. TheCentral
Bank isresponsible formonetary policy, exchange ratepolicy andthebanking system. TheArmenian
Patent Office isresponsible forindustrial property protection matters, andtheArmenian National
Copyright Agency forcopyright protection.WT/ACC/ARM/2
Page 7
3. Division ofauthority between central andsub-central governments.
14. Inmatters ofpolicy affecting trade ingoods andservices, thecentral government retains full
authority.
4. Any legislative programmes orplans tochange theregulatory regime.
15. Nolegislative programmes orplans exist tochange theregulatory regime inanyfundamental
way. However, reference ismade intheparagraphs thatfollow tovarious changes inpolicy thathave
been made since thesubmission ofArmenia ’sMemorandum (WT/ACC/ARM/1), andthatareplanned
inthefuture.
5. Laws andLegal Acts.
16. Please refer toSection VIofArmenia ’sMemorandum (WT/ACC/ARM/1), which contains
alistoflaws andlegal actswhich were appended totheMemorandum. Additional laws andlegal
acts, relevant tovarious aspects ofArmenia ’strade andtrade-related policy regime, areappended to
thepresent submission (Annex 1).
17. Asregards enquiry points foreseen inArticle IIIoftheGeneral Agreement onTrade inServices,
theGovernment ofArmenia willestablish anenquiry point within theMinistry oftheEconomy.
6. Description ofjudicial, arbitral oradministrative tribunals orprocedures, ifany.
18. Please refer totheanswer totheanswers inparagraphs 11and12above.
IV. POLICIES AFFECTING TRADE INGOODS
1. Import Regulation:
(a) registration requirements forengaging inimporting;
19. Please refer tothereplies totheimport licensing questionnaire (seepage 20).
(f) import licensing procedures (Annex 3refers) (including licensing questionnaire);
20. Please seetheimport licensing questionnaire.
(g) other border measures, e.g.anyother schemes that have border effects similar
tothose ofthemeasures listed under (e)above; (e.g. quantitative import restrictions, including
prohibitions, quotas andlicensing systems);
21. Please seesection 3.1.5 ofArmenia ’sMemorandum (WT/ACC/ARM/1), theimport licensing
questionnaire, andparagraph 221ofPart IIofthissubmission.
(h) customs valuation (WTO Customs Valuation Agreement (Annex 4refers), the
Brussels Definition ofValue, oranyother system) whether used only forpurposes oflevying ad
valorem rates ofduty orforother purposes (including valuation questionnaire);
22. Please refer tothereplies tothecustoms valuation questionnaire.WT/ACC/ARM/2
Page 8
(j) preshipment inspection.
23. Armenia does notemploy theservices ofanypreshipment inspection companies.
2. Export Regulation:
(a) registration requirements forengaging inexporting;
24. Please seethereplies provided inthequestionnaire onArmenia ’sexport licensing regime
(seepage 26).
(c) quantitativeexportrestrictions,includingprohibitions,quotasandlicensingsystem;
25. Please seethereplies toexport licensing questionnaire andtoparagraph 234inPartIIofthe
present submission, together withtheinformation provided insection 3.2.2 ofArmenia ’sMemorandum
(WT/ACC/ARM/1).
(d) export licensing procedures;
26. Please seereplies toexport licensing questionnaire.
(g) export performance requirements;
27. Armenia does notimpose anyexport performance requirements.
(i) import duty drawback schemes;
28. Armeniadoesnotmaintainanyimportdutydrawbackordutyremissionschemelinkedtoexports.
3. Internal policies affecting foreign trade ingoods:
(b) technical regulations andstandards, including measures taken attheborder with
respect toimports (Annex 5refers) (including TBT questionnaire);
29. Pleaserefertotherepliestothequestionnairerelatingtotechnicalbarrierstotrade(seepage34).
(e) State-trading practices (Annex 6refers) (including State trade questionnaire);
30. Based onthedefinition ofState trading setoutintheInterpretation ofArticle XVII oftheGeneral
Agreement onTariffs andTrade 1994, Armenia maintains noState trading enterprises. Inother words,
Armenia maintains nolaw, regulation ormeasure thatgrants exclusive orspecial rights orprivileges
toanyenterprise, intheexercise ofwhich such enterprises might influence through their purchases
orsales thelevel ordirection ofimports orexports. Given theabsence ofState trading inArmenia,
thequestionnaire onState trading hasnotbeen completed.
31. Itmay beuseful tomention, however, thatResolution 161ofMarch 1991, asamended by
Resolution 415ofJune 1995, reserves certain activities exclusively totheState andrequires thatcertain
other activities arelicensed bytheauthorities. List1attached toResolution 161identifies eight types
ofactivities thatarereserved exclusively fortheState. These are:(i)saleandpurchase ofweapons,
armaments, narcotics, explosives, radioactive materials andother strong substances; (ii)production
andrepair ofweapons, armaments andexplosives; (iii)preparation ofdrugs, narcotics, poisonous andWT/ACC/ARM/2
Page 9
strongly acting substances; (iv)conducting court examinations; (v)diagnosis ofthepsychical state of
citizens; (vi)patenting andconferring copyright; (vii) issuing money andpreparation ofState medals;
andstorage, preservation andutilization ofgold andother precious metals andsubstances ofmilitary
significance. Allthese reserved activities involve theState intheexercise ofitsunique responsibilities,
including thepreservation ofnational security, public order, andthehealth andsafety ofthepopulation.
List2ofResolution415indicatesthoseactivitiesthatrequirepriorauthorizationandthebodyresponsible
forproviding theauthorization. Aswith theitems onlist1,fewinvolve manufacturing activity and
allofthem relate tosimilar consideration mentioned above inrelation toList1.Licensing ofeconomic
activities included under List2isnon-restrictive inthesense thatlicensing decisions arenotmotivated
bytrade protection considerations.
(h) trade-related environmental policies;
32. Trade-related environmental policies maintained byArmenia relate tothelicensing ofimports
andexports ofrarewildanimals andplants included intheRedBook oftheRepublic ofArmenia (please
seethereplies tothequestionnaires onimport andexport licensing). Inaddition, import licensing
onagricultural chemicals isdesigned asanenvironmental (andhealth) protection measure. Theimport
andexport prohibitions onnuclear materials arealsorelated toenvironmental (and national security)
considerations.
(i) mixing regulations;
33. Armenia does notmaintain anymixing regulations.
(j) government-mandated counter-trade andbarter;
34. Asdescribedinsection5.1.3ofArmenia’sMemorandum(WT/ACC/ARM/1),Armeniamaintains
barter orclearing arrangements with Turkmenistan andRussia forgasandoilrespectively. The
arrangements aredesigned tosecure Armenia ’ssupplies ofessential commodities. With effect from
January 1996, theclearing arrangement with Russia will beeliminated. The arrangement with
Turkmenistan willalsobediscontinued in1996.
(k) trade agreements leading tocountry-specific quota allocation;
35. Theonly trade agreement maintained byArmenia thatmight leadtoacountry-specific quota
allocation isthe1993 agreement with theEuropean Union under which Armenia could berequired
torestrict exports oftextiles andclothing totheEU. Nosuch restrictions have ever been applied.
(l) government procurement practices, including general legal regime andprocedures
fortendering, dealing with tenders andaward ofcontracts;
36. Please seesection 4.6ofArmenia ’sMemorandum (WT/ACC/ARM/1) andtheanswers to
questions 70to76ofPart IIofthissubmission.
(m) regulation oftrade intransit.
37. Please seesection 3.4ofArmenia ’sMemorandum (WT/ACC/ARM/1).WT/ACC/ARM/2
Page 10
4. Policies affecting foreign trade inagricultural products:
(a) imports-i.e.comprehensivedescriptionofthetypesofborderprotectionmaintained:
customs duties and/or anyother border measures;
38. AgriculturalproductsmaybeimportedfreelyintoArmenia,withoutanyquantitativerestrictions.
Afewitems aresubject toimport duties, which invirtually nocase exceed 10percent (please see
thecopy ofArmenia ’scustoms tariff submitted with Armenia ’sMemorandum).
(b) exports-i.e.descriptionof,andthebudgetaryexpenditureandanyrevenueforegone
involved ineach oftheexport subsidy measures inplace;
39. Armenia maintains nosubsidies onexports.
(c) export prohibitions andrestrictions;
40. Armenia does notmaintain export restrictions orprohibitions onagricultural exports.
(d) export credits, export credit guarantees orinsurance programmes;
41. TheGovernment ofArmenia does notprovide anyexport credits, export credit guarantees
orexport insurance programmes.
(e) internalpolicies-i.e.descriptionof,andthebudgetaryexpenditureandanyrevenue
foregone involved ineach ofthedomestic support measures inplace.
42. TheGovernment ofArmenia does notmaintain anydirect subsidies totheagricultural sector.
Indirectly, however, farmers have benefited from theGovernment ’spolicy ofcharging only variable
costs onwater andelectricity supplies. These policies have applied toallusers ofelectricity andwater.
However, fullcostpricing (cost recovery pricing) willbeintroduced forelectricity before theendof
1995, andforwater during thecourse of1996. After that, nodirect orindirect subsidies willbe
provided totheagricultural sector. Thevalue oftheindirect water andelectricity subsidies tofarmers
hasnotbeen calculated bytheauthorities. Inaddition, theGovernment supports alimited range of
activities dedicated totraining farmers inimproved agricultural techniques, toupgrading seed and
livestock quality, andtoproviding technical advice andextension services. These services areavailable
toallfarmers andinvolve very modest budgetary outlays.
5. Policies affecting foreign trade inother sectors:
(a) textiles regime;
43. Armenia does notmaintain aspecial regime fortrade intextiles.
(b) policies affecting foreign trade inother major sectors.
44. Nospecial policies orregimes affect trade inanymajor sector.WT/ACC/ARM/2
Page 11
V. TRADE-RELATED INTELLECTUAL PROPERTY REGIME
1. General:
(a) intellectual property policy;
45. TheGovernment ofArmenia iscommitted todeveloping aneffective national system forthe
protection ofintellectual property. Asindicated below (please refer alsotosection 4.11 ofArmenia ’s
Memorandum (WT/ACC/ARM/1)), astarthasbeen made indeveloping thisregime. TheGovernment
intends thatArmenia ’sintellectual property regime willbefully consistent with theWTO Agreement
onTrade-Related Aspects ofIntellectual Property Rights.
(b) responsible agencies forpolicy formulation andimplementation;
46. Policy formulation andimplementation intheareaofindustrial property (patents, utility models,
industrial designs, trademarks, trade names, andappellations oforigin) istheresponsibility ofthe
Armenian Patent Office, established in1992. ThePatent Office isresponsible forapproving industrial
property right applications, maintains aState Register ofindustrial property rights, issues anofficial
bulletin reflecting itsdecisions, andcooperates with homologue foreign institutions andinternational
organizations. ThePatent Office isalsoresponsible fortheregime covering trademarks.
47. Inthecaseofcopyrightprotectionandneighbouringrights,theresponsibleagencyistheNational
Copyright Agency. TheNational Copyright Agency registers copyrights, assists individuals tosecure
copyrights,providesadvisoryservices,andcollectsandpaysroyaltiesduetoauthorsandtheirsuccessors
intitle.
(c) membership ofinternational intellectual property conventions andofregional or
bilateral agreements;
48. Please seesection 4.11.3 ofArmenia ’sMemorandum (WT/ACC/ARM/1).
(d) application ofnational andMFN treatment toforeign nationals;
49. TheLaw onPatents provides thatallforeigners enjoy thesame rights asnationals ofArmenia
inrelation toallpatent matters, including protection ofpatents andlegal remedies against infringement.
Resolution No.4of19August 1995 “OnConfirmation oftheTemporary Regulations forTrademarks
and Service Marks ”(please seeparagraph 52below) similarly envisages full national and
most-favoured-nation treatment forforeigners. Thesame willalsobethecase inrespect oftheLaw
onCopyright, andanyfuture laws andregulations adopted inthesphere ofintellectual property
protection.
(e) feesandtaxes.
50. Fees arepayable upon thefiling ofanapplication andthegranting ofapatent. Similar
arrangements areinplace fortrademarks andservice marks. Fees willalsobechargeable under the
legislation tobedeveloped ontrademarks andcopyright. Allfeesaresetsoastocover costs ofthe
servicesprovided,andthegrantingandprotectionofintellectualpropertyrightsisnotsubjecttotaxation.WT/ACC/ARM/2
Page 12
2. Substantive standards ofprotection, including procedures fortheacquisition and
maintenance ofintellectual property rights:
(a) copyright and related rights, including rights ofperformers, producers of
phonograms andbroadcasting organizations;
51. Adraft Law onCopyright hadbeen prepared intheearly 1990s andsubmitted totheNational
Assembly foritsconsideration. After examination oftheproposed legislation, however, itwasfelt
thatitsprovisions were inadequate foramodern system ofcopyright protection. New legislation is
therefore under preparation.
(b) trademarks, including service marks;
52. PendingthefinalizationandadoptionoftheLawonTrademarks,ServiceMarksandAppellations
ofOrigin, Resolution No.4of19August 1995 “OnConfirmation oftheTemporary Regulations for
Trademarks andService Marks ”hasbeen introduced. This resolution setsouttheterms andconditions
oftrademarkprotection,thekindsoftrademarksthatmaynotberegistered,theproceduresforregistering
trademarks, therights ofappeal against decisions relating totrademarks, thecircumstances inwhich
trademarks may beused, andthedocumentary requirements forregistering atrademark. Trademark
protection isgranted for10years, renewable forsuccessive periods of10years.
(c) geographical indications, including appellations oforigin;
53. Geographical indications arenotexplicitly mentioned intheabove-mentioned Resolution No.4,
soprotection forthiskind ofproperty willnotbeprovided until theLawonTrademarks, Service Marks
andAppellations ofOrigin becomes operative.
(d) industrial designs;
54. Industrial designs areprotected under Article 7oftheLaw onPatents.
(e) patents;
55. Please seesection 4.11.1 ofArmenia ’sMemorandum (WT/ACC/ARM/1) andtheanswers
inparagraph 322ofthepresent submission. Thelawspecifies thenature ofpatentable material, the
conditions forpatentability, therights ofpatent holders, theconditions ofcompulsory licensing, the
procedures forgranting patents, anddispute settlement.
(f) plant variety protection;
56. Armenia currently hasnolaws dealing with plant variety protection.
(g) layout designs ofintegrated circuits;
57. Armenia currently hasnolaws dealing with layout designs ofintegrated circuits.
(h) requirements onundisclosed information, including trade secrets andtestdata;
58. Armenian legislation currently does notcover thissubject matter.WT/ACC/ARM/2
Page 13
(i) anyother categories ofintellectual property.
59. None.
3. Measures tocontrol abuse ofintellectual property rights.
60. Compulsory licensing isprovided forunder theLaw onPatents. Incases involving national
security, public order oremergencies, theGovernment caninsist oncompulsory licensing, provided
thepatent holder hasnotworked thepatent within four years ofregistration.
61. Similarly, under theresolution ontrademarks, trademark protection canbenullified byacourt
decision ifatrademark hasnotbeen used within fiveyears ofthedateofregistration ofthetrademark
orthedateofapplication forregistration. Atrademark owner hastheright todefend thenon-use of
atrademark, andblock adecision toremove theproperty right ifthereasons fornotusing thetrademark
were beyond thecontrol oftheowner.
4. Enforcement:
(a) civil judicial procedures andremedies;
62. Civil court procedures arealways available fordealing withlegal matters relating tointellectual
property protection. Thecourts areempowered toorder thepayment ofdamages andcourt expenses.
Theother remedies envisioned intheAgreement onTrade-Related Aspects ofIntellectual Property
Rights (TRIPS) arealsowithin thedecision-making authority ofArmenian courts.
(b) provisional measures;
63. Thecivil courts alsohave thenecessary authority totaketheprovisional measures envisioned
inArticle 50oftheTRIPS Agreement.
(c) anyadministrative procedures andremedies;
64. Civil remedies cannot beordered asaresult ofadministrative procedures inArmenia.
(d) anyspecial border measures;
65. Thejudicial authorities inArmenia have theauthority totake border measures ofthekind
envisioned inArticle 51.
(e) criminal procedures.
66. Criminal procedures canbeapplied where necessary.
5. Laws, decrees, regulations andother legal acts relating totheabove.
67. Please seereferences above totheLaw onPatents andResolution No.4ofAugust 1995 on
trademarks andservice marks.WT/ACC/ARM/2
Page 14
6. Statistical data onapplications forandgrants ofintellectual property rights, aswell as
anystatistical data ontheir enforcement.
68. Since thebeginning of1993, 408patent applications have been filed with thePatent Office.
In207cases aprovisional patent wasgranted, in59cases apatent wasrefused ortheapplication
withdrawn, and142applications areunder examination.
VI. TRADE-RELATED SERVICES REGIME
1. General
General description oftheoverall market andregulatory structures ofthemost prominent
services sectors (e.g., financial services, telecommunications, professional services, construction,
tourism, transportation). Acomplete list ofservices sectors isfound indocument
MTN.GNS/W/120, the“Services Sectoral Classification List”(Annex 7refers).
69. Asreported insection 4.10.1 Armenia ’sMemorandum (WT/ACC/ARM/1), Armenian laws
andregulations,andthepolicyframeworkmoregenerally,doesnotforthemostpartdistinguishbetween
trade ingoods andtrade inservices. Therights totrade areenshrined intheLaw onEnterprises and
Entrepreneurial Activities. Itshould benoted, however, thatthislawdoes notcover banks andfinancial
institutions, forwhich other legislation exists (seebelow). Thelawcontemplates some 20different
kinds ofbusiness organization. Italsospecifies theconditions under which anenterprise ’sactivities
may beterminated, including ontheinitiative oftheowners, where theenterprise hasbeen illegally
established, pursuant toacourt ruling ofinvalid registration, andpursuant toacourt ruling of
bankruptcy. Allenterprises must beregistered andtheregister isopen topublic scrutiny. These
requirements apply toalljuridical persons, whether they arecorporations orsoleentrepreneurs.
70. Interms ofthemodes ofsupply identified intheGeneral Agreement onTrade inServices
(GATS),theLawonEnterprisesandEntrepreneurialActivitiesisrelevantforenterprisessellingservices
across frontiers (mode 1),forservice supply through commercial presence (mode 3),andfornatural
persons whoareindependent service suppliers (mode 4).Consumption abroad (mode 3)isnotcovered
inthiscontext. Aspreviously noted insection 4.10.1 Armenia ’sMemorandum (WT/ACC/ARM/1),
Armenia hasnotdeveloped anypolicies thatrestrict theconsumption ofservices abroad. Moreover,
Armenian nationals andresidents areatliberty totravel abroad andconsume services within foreign
jurisdictions ifthey sowish
71. Asfarascommercial presence (mode 3)andnatural persons who areindependent service
suppliers (excluding thatpartofmode 4dealing with employees ofservice suppliers) areconcerned,
theLaw onForeign Investments, described insection 4.5ofArmenia ’sMemorandum (WT/ACC/
ARM/1), isalsorelevant, asitcovers investment inboth goods andservices. Thelawestablishes
thelegal framework foralltypes ofinvestment involving foreign capital, including joint ventures and
wholly-owned enterprises andsubsidiaries, whether theforeign investor isanindividual oranenterprise.
TheLaw onForeign Investments wasappended toWT/ACC/ARM/1.
72. Atpresent,norestrictionsareimposedonthetemporarypresenceofnaturalpersonsinArmenia,
whether asemployees offoreign service suppliers orasindependent suppliers ofservices. Inthelatter
case, however, theservice supplier would berequired toregister inArmenia asabusiness orsole
entrepreneur.WT/ACC/ARM/2
Page 15
Banking services
73. TheCentral Bank ofArmenia isresponsible forregulating thebanking sector (please seealso
section 4.10.2 ofWT/ACC/ARM/1). The Central Bank grants licences fortheestablishment of
commercialbanksandtheiractivities,andsetsandmonitorsprudentialrequirements.ResolutionNo.31
ofFebruary 1995 (attached) establishes theCentral Bank ’sauthority inthisarea. Banks may be
joint-stock orcooperative banks, andmay beresident ornon-resident. Banks may belocal iftheir
statutory capital isowned byresidents ofArmenia, foreign iftheir capital isowned bynon-residents,
andjoint-venture ifownership ismixed between resident andnon-resident owners. Anindividual
shareholding inabank shall notexceed 35percentofthestatutory capital, except where, inthecase
ofnon-resident shareholders, individual shareholdings may exceed 35percentbyspecial resolution
oftheBoard oftheCentral Bank.
74. TheCentral Bank isrequired toconsider alicence application within onemonth. Alicence
mayberefused ifthedocuments required forsubmission upon application foralicence donotconform
with statutory requirements, ifthebank willbeunable tomeet thenecessary prudential standards, or
ifthequalifications oftheproposed topmanagement areinappropriate. Licences may subsequently
bewithdrawn ifinitial declarations prove false, ifbanking activity hasnotcommenced within oneyear
ofalicence being granted, iftheinitial capital hasnotbeen paid upwithin oneyear, ifactivities are
carried outoutside theauthorized sphere ofactivities, orifabank fails toabide byCentral Bank
regulations. Theareas ofauthorized activity forresident banks aremaking loans, maintaining accounts,
issuing, buying andselling shares, bonds, promissory notes, letters ofcredit, cheques andcredit cards,
factoring, foreign currency transactions, consulting services, andtransactions involving precious stones,
metals andother valuables. Banks areexplicitly forbidden from dealing ininsurance. Non-resident,
oroffshore banks, areonly entitled tooffer foreign-exchange related services, andrequire special
authorization from theCentral Bank toservice residents ofArmenia ortoengage indram operations.
75. Prudential requirements forresident banks aredefined inResolution No.78ofApril 1995
(attached). They relate tominimum statutory capital, acapital toassets ratio, aliquidity ratio, the
maximum exposure toasingle borrower, theration between household deposits andtotal capital, and
aminimum reserve requirement withtheCentral Bank. Theminimum statutory capital isUS$100,000,
andwillrisetoUS$1,000,000 by2000. Thecapital toassets ratio is6percent, andwillriseto10per
centbymid-1996. Theliquidity ratio (liquid tototal assets) is20percent, butwillriseto35percent
bymid-1996. Themaximum exposure toasingle borrower inrelation tothetotal capital ofthebank
is50percent, butthiswilldrop to20percentbymid-1996. Theratio ofhousehold deposits tothe
bank’scapital isninetoone. Theminimum reserve requirement with theCentral Bank is15percent.
76. Some 44resident commercial banks areoperating inArmenia, most ofthem being joint-stock
companies. About 15banks have closed inthelasttwoyears, either voluntarily, orupon theinsistence
oftheCentral Bank. There arefivebranches ofRussian banks operating inArmenia asnon-resident
banks. TheGovernment ofArmenia isseeking tostrengthen thefinancial system byensuring that
resident banks areviable. Mergers among small banks areencouraged, andstandards aregradually
being raised through more stringent prudential requirements. Asnoted previously, nobarriers exist
totheestablishment offoreign-owned resident banks, provided theymeet theCentral Bank ’slicensing
andprudential requirements. Non-resident banks, however, only enjoy limited access tothebanking
market.
Insurance services
77. Theinsurance industry inArmenia issupervised bytheMinistry ofFinance, which alsodefines
regulations governing theindustry. Thesector remains under-regulated andwillbesubject tofurther
legislative attention inthenear future. Work isproceeding intheMinistry ofFinance onalawonWT/ACC/ARM/2
Page 16
insurance, butnodraft isyetavailable. During thelastfiveyears, theMinistry ofFinance hasissued
71licences toinsurance providers inArmenia. Ofthese, three have subsequently ceased operations.
Threeinsurancecompanieshaveforeignequityparticipation(twoRussianandoneSwedish).Companies
donottend tospecialize, although specialization may beexpected todevelop inthefuture. While
Armenian nationals facenorestrictions inpurchasing insurance abroad, andforeign insurance companies
mayadvertise their services inArmenia, insurance providers must establish andbelicensed inArmenia
iftheywish tosellinsurance onArmenian territory. Norestrictions exist forforeign enterprises wishing
toestablish inthismanner, provided they meet thenecessary regulatory requirements.
Telecommunications
78. The Ministry ofTelecommunications isresponsible forpolicy and regulation inthe
telecommunications sector. Inview ofthepoor state ofArmenia ’stelecommunications infrastructure,
theGovernment ofArmenia decided totender foraforeign partner inajoint venture thatwould have
monopoly rights tosupply certain basic telecommunication services inreturn forexplicit commitments
oninfrastructural development. Thetender waswonbyaU.S. company andtheresultant joint-venture
company, Armentel, wasestablished on1July1995. TheGovernment ofArmenia holds 51percent
oftheequity andtheforeign partner holds 49percent. The services which have been reserved
exclusively forArmentel areinternational basic telecommunications services, allwire-based services
inMunicipal Yerevan, andcellular telephony services inYerevan. Thecontract hasaduration of20
years, butcanberescinded iftheforeign partner does notdeliver onthestipulated infrastructure
development commitments within theagreed time-frame. Armentel willlease lines fortheprovision
ofvalue-added services byother suppliers, andmaysubcontract various services tointerested parties.
79. TheState telephone company, Armentelecom, isresponsible forallother telecommunication
services throughout Armenia, both local andlong-distance. Nobarriers toentry exist inthese sectors
ofthemarket.
Professional services
Accounting andauditing services
80. Accountancy andauditing services areregulated bytheMinistry ofFinance, onthebasis of
Resolution No.581of1994, which isregarded asatemporary measure, pending theestablishment
ofalawonauditing. AState enterprise, Finaudit, isresponsible forauditing government departments
thatspend money from thebudget. Finaudit may alsooffer auditing services tothepublic sector in
general ortheprivate sector, butincompetition with other auditing enterprises. Intheprivate sector,
domestic andforeign auditors areatliberty toestablish operations domestically, subject tomeeting
Armenia ’sregulations andpassing anexamination. Successful candidates areprovided withacertificate
thatallows them tobelicensed andtooffer auditing services. Some 15individuals currently hold
licences. TheMinistry ofFinance isresponsible forthislicensing process, except inthecaseofauditors
ofbanks, who must acquire acertificate from theCentral Bank.
Legal services
81. Themain lawyers ’organization inArmenia istheCollegia ofAttorneys, which isintheprocess
ofbecoming independent oftheMinistry ofJustice. Itrepresents about 250lawyers who practice in
court andhasoffices allover thecountry. TheCollegia isseeking toexpand itsroleanditsmembership.
Membership oftheCollegia isnotobligatory forpractising lawyers, butallpractising lawyers must
belicensed bytheMinistry ofJustice, whether they areinvolved incourt representation oracting in
anadvisory role. Apart from thegeneral legal basis foractivities provided bytheLaw onEnterprises
andEntrepreneurial Activities, noother legislation hasbeen established inthissphere. Alessactive,WT/ACC/ARM/2
Page 17
butmore widely representative body, istheLawyers Association ofArmenia, whose membership runs
tosome 5,000 individuals. TheAssociation encompasses abroad range oflaw-related professions,
including attorneys, judges, academics andstudents. Approximately 50lawoffices operate inArmenia,
most ofwhich areregistered assoleentrepreneurs.
2. Policies affecting Trade inServices
General reference tomain laws, regulations, rules, procedures, decisions, administrative
action,andotherlegalinstrumentsandadescriptionofspecificmeasuresaffectingtradeinservices.
Distinctions based onmodes ofsupply and/or sectors could bemade whenever relevant:
(a) Government departments, agencies, professional associations orother bodies with
authority orarole relevant totheconduct ofservice activities;
82. Please refer tosector-specific material presented intheprevious section.
(b) Judicial, arbitral oradministrative tribunals orprocedures providing forthereview
of,orremedies inrelation to,administrative decisions affecting trade inservices;
83. Thecourt system, asdescribed inparagraphs 11and12above, canbeused forlitigation (regular
courts) andarbitration (arbitral courts). Service suppliers with grievances relating toadministrative
decisions would notnormally seek remedies through litigation orarbitration, however, before they
hadexhausted their right toappeal totheadministrative organ directly responsible forthedecision
inrespect ofwhich they hadagrievance.
(c) Provisions, including those ininternational agreements, concerning qualification
requirements andprocedures, technical standards andlicensing and/or registration requirements
forthesupply ofservices;
84. Pleaseseesector-specificmaterialpresentedaboveasregardslicensing/registrationrequirements
andtechnical standards. Ingeneral, thecompetent governmental authorities intheparticular areaof
activity isresponsible forpolicies and procedures inthese matters. Astheapproach to
licensing/registration andtechnical standards isdeveloped tocover newareas ofservice activities, the
Government willensure thattheprovisions ofGATS Article VIarefully respected. Itshould benoted
thatfewforeign service suppliers have sofarestablished inArmenia, andthattheGovernment would
welcome greater foreign participation inthese activities. Armenia isnotparty toanyinternational
agreements forthemutual recognition ofqualifications, andhasnotyetfully developed itsownpolicy
regime inthisarea.
(d) Provisions governing theexistence andoperation ofmonopolies orexclusive service
suppliers;
85. With theexception theexclusive arrangements described above inrelation tocertain
telecommunicationsservices,Armeniaretainsnomonopolyorexclusivesupplyarrangementsinservices
trade.
(e) Provisions relating tosafeguard measures asthey apply totrade inservices;
86. Armenia hasnolegislative orregulatory basis upon which itmight apply safeguard measures
totrade inservices, andnosuch measures have been applied.WT/ACC/ARM/2
Page 18
(f) Provisions relating tointernational transfers andpayments forcurrent transactions
ofservices;
87. Asdescribed elsewhere, Armenia does notretain anyrestrictions oncurrent account transactions
asthese relate totrade inservices.
(g) Provisions relating tocapital transactions affecting thesupply ofservices;
88. TheLaw onInvestments guarantees therights ofinvestors freely totransfer capital.
(h) Provisions governing theprocurement bygovernmental agencies ofservices;
89. Thesame provisions forprocurement ofgoods apply toprocurement ofservices. Please see
section 4.6ofArmenia ’sMemorandum (WT/ACC/ARM/1) andtheanswers given inparagraphs 272
to280ofPartIIofthissubmission fordetails ofArmenia ’sgovernment procurement arrangements.
(i) Provisions concerning anyform ofaid,grant, subsidy, taxincentive orpromotion
scheme affecting trade inservices.
90. NoState aidsareprovided toservice suppliers.
3. Market Access andNational Treatment
Limitations orconditions applied tomarket access andnational treatment. Please specify,
whether applied onahorizontal (e.g., measures relating toforeign investment regime, movement
ofpersons supplying aservice, realestate ownership andconditions ofestablishment) orsectoral
basis:
(a) Limitations onthenumber ofservice suppliers;
91. Theonly limitation onthenumber ofservice suppliers issector-specific, relating tocertain
telecommunications services.
(b) Limitations onthetotal value ofservice transactions orassets;
92. Nolimitations exist onthetotal value ofservice transactions orassets.
(c) Limitations onthetotal number ofservice operations oronthetotal quantity of
service output;
93. Nolimitations exist onthetotal number ofservice operations oronthetotal quantity ofservice
output.
(d) Limitations onthetotal number ofnatural persons that may beemployed ina
particular service sector;
94. Nolimitations exist onthetotal number ofnatural persons thatmaybeemployed inaparticular
service sector.WT/ACC/ARM/2
Page 19
(e) Restrictions on,orrequirements ofspecific types oflegal entity through which
aservice may besupplied;
95. TheLaw onEntrepreneurs andEntrepreneurial Activities defines 20kinds oforganizational
forms thatenterprises maytake. Thedefinition oflegal entities through which services maybesupplied
istherefore very wide anddoes notseek todiscourage anyparticular type oflegal entity.
(f) Limitations ontheparticipation offoreign capital;
96. Nolimitations ontheparticipation offoreign capital exist, although Regulation No.31of
February 1995 does give discretion totheBoard oftheCentral Bank tolimit thesizeofindividual
shareholdings inresident commercial banks.
(g) Measures providing forlessthan thetreatment accorded tonational services or
service suppliers.
97. Nomeasures aremaintained byArmenia thatprovide forforeign services orservice suppliers
tobeaccorded treatment lessfavourable than thatprovided tonational services orservice suppliers.
Itmay benoted, however, thatoffshore banks arenotentitled toprovide retail banking services in
thesame unrestricted manner asresident banks.
4. Most-Favoured-Nation Treatment
Indicate anyexisting measures inconsistent with MFN treatment.
98. ArmeniadoesnotmaintainanymeasuresinconsistentwithMFNtreatmentinthefieldofservices.WT/ACC/ARM/2
Page 20
Answers toQuestionnaire inAnnex 3ofWT/ACC/1 onImport Licensing
I. OUTLINE OFSYSTEMS
1. Give abrief description ofeach licensing system asawhole.
99. Asexplainedinsection3.1.5oftheMemorandum(WT/ACC/ARM/1),DecreeNo.17ofJanuary
1995 regulates Armenia ’simport licensing system. Only afewitems aresubject tolicensing (seebelow).
Thelicences donotrestrict quantities orprices, butareintended tosafeguard health andtheenvironment.
II. PURPOSES AND COVERAGE OFLICENSING
1. Identify each licensing system maintained andstate what products, appropriately grouped,
arecovered.
100. Armenia does notmaintain animport licensing regime forthevastmajority ofitsimports.
Only thefollowing imports aresubject tolicensing:
HSnumber
Pharmaceutical products 29.41; 30.00
Raw materials forpharmaceutical production 05.00; 12.11; 13.02; 29.38
Agricultural chemicals 38.08
Rare wild animals andplants included inthe
RedBook oftheRepublic ofArmenia
101. TheRedBook oftheRepublic ofArmenia contains alistofrareanimals andplants. Any
restrictions imposed onthese items aremore likely toaffect exports from Armenia. TheRedBook
identifies approximately onehundred rareanimals andbirds, and390rareplants, inrespect ofwhich
licences would berequired.
102. TheMinistry ofEconomy issues licences forpharmaceutical products andrawmaterials used
intheir production onthebasis ofrecommendations bytheMinistry ofHealth. Inthecaseofagricultural
chemicals, theMinistry ofAgriculture isexclusively responsible forgranting import licences. The
Ministry ofEconomy issues licences fortheimportation ofrarewild animals andplants listed inthe
RedBook onthebasis ofarecommendation oftheMinistry ofNature andEnvironment.
2. The system applies togoods originating inandcoming from which countries?
103. Thesystem applies toimports from allorigins.
3. Isthelicensing intended torestrict thequantity orvalue ofimports, and
ifnot, what areitspurposes? Have alternative methods ofaccomplishing thepurposes been
considered andifsowhich? Why have they notbeen adopted?
104. Thelicensing requirements identified above arenotintended torestrict thequantity orvalue
ofimports. Rather, they areintended toprotect human, animal orplant lifeorhealth, andthe
environment. Thegovernment does notconsider thatatthistime, abetter way exists ofachieving
these objectives.
4. Citethelaw,regulationand/oradministrativeorderunderwhichthelicensingismaintained.
Isthelicensing statutorily required? Does thelegislation leave thedesignation ofproducts toWT/ACC/ARM/2
Page 21
besubjected tolicensing toadministrative discretion? Isitpossible forthegovernment (orthe
executive branch) toabolish thesystem without legislative approval?
105. Thefollowing legal instrument underlies Armenia ’simport licensing system:
Decree oftheGovernment oftheRepublic ofArmenia No.17of17January 1995 OnLicensing
andAllocation ofImport andExport ofCommodities (Jobs/Services).
106. There isnostatutory requirement toapply alicensing regime. Thedesignation ofproducts
subject tolicence isatthediscretion oftheexecutive branch ofgovernment. Itisatthediscretion
oftheexecutive branch toremove oradditems from thelistofthose subject tolicensing.
III. PROCEDURES
1. Forproducts under restriction astothequantity orvalue ofimports (whether applicable
globally ortoalimited number ofcountries orwhether established bilaterally orunilaterally):
107. Questions 1(a)-(k)arenotapplicable, asArmenia does notmaintain anylicensing arrangements
which restrict thequantity ofimports byquota orthevalue ofimports.
(a) Isinformation published, and where, concerning theallocation ofquotas and
formalities offiling applications forlicences? Ifnot,how isitbrought totheattention ofpossible
importers? Ofgovernments andexport promotion bodies ofexporting countries andtheir trade
representatives? Istheoverall amount published? The amount allocated togoods from each
country? The maximum amount allocated toeach importer?
(b) How isthesizeofthequotas determined: onayearly, six-monthly orquarterly
basis? Arethere cases where thesizeofquota isdetermined onayearly basis butlicences are
issued forimports onasix-monthly orquarterly basis? Inthelatter case, isitnecessary for
importers toapply forfresh licence onasix-monthly orquarterly basis?
(c) Arelicences allotted forcertain goods partly oronly todomestic producers oflike
goods? What steps aretaken toensure that licences allocated areactually used forimports?
Areunused allocation added toquotas forasucceeding period? Arethenames ofimporters to
whom licences have been allocated made known togovernments andexport promotion bodies
ofexporting countries upon request? Ifnot,forwhat reason? (Indicate products towhich replies
relate).
(d) From thetime ofannouncing theopening ofquotas, asindicated inIabove, what
isthetime allowed forthesubmission ofapplications forlicences?
(e) What aretheminimum andmaximum lengths oftime forprocessing applications?
(f) How much time remains, ataminimum, between thegranting oflicences andthe
date ofopening oftheperiod ofimportation?
(g) Isconsideration oflicence application effected byasingle administrative organ?
Ormust theapplication bepassed ontoother organs forvisa, note orapproval? Ifso,which?
Does theimporter have toapproach more than oneadministrative organ?
(h) Ifthedemand forlicences cannot befully satisfied, onwhat basis istheallocation
toapplicants made? First come, first served? Past performance? Isthere amaximum amountWT/ACC/ARM/2
Page 22
tobeallocated perapplicant and, ifso,onwhat basis isitdetermined? What provision ismade
fornew importers? Areapplicants examined simultaneously oronreceipt?
(i) Inthecaseofbilateralquotasorexportrestraintarrangementswhereexportpermits
areissued byexporting countries, areimport licences also required? Ifso,arelicences issued
automatically?
(j) Incases where imports areallowed onthebasis ofexport permits only, how is
theimporting country informed oftheeffect given bytheexporting countries totheunderstanding
between thetwocountries?
(k) Arethere products forwhich licences areissued oncondition that goods should
beexported andnotsold inthedomestic market?
2. Where there isnoquantitative limit onimportation ofaproduct oronimports from a
particular country:
(a) How farinadvance ofimportation must application foralicence bemade? Can
licences beobtained within ashort time-limit orforgoods arriving attheport without alicence
(forexample, owing toinadvertence)?
108. Licences must begranted within tendays ofreceipt ofanapplication. Since theten-day
stipulation isamaximum period, inpractice licences may beobtained within ashorter time period.
Ifgoods arrive without alicence, they may only becleared through customs upon production ofthe
necessary import licence.
(b) Can alicence begranted immediately onrequest?
109. Animport licence willgenerally notbegranted immediately upon request, butinpractice the
necessary procedures may becompleted within adayortwo.
(c) Arethere anylimitations astotheperiod oftheyear during which application
foralicence and/or importation may bemade? Ifso,explain.
110. Nolimitations exist inrelation totheperiod oftheyear during which alicence application
and/or animportation may bemade.
(d) Isconsideration oflicence applications effected byasingle administrative organ?
Ormust theapplication bepassed ontoother organs forvisa, note orapproval? Ifso,which?
Does theimporter have toapproach more than oneadministrative organ?
111. Import licences forpharmaceuticals andrawmaterials fortheproduction ofpharmaceuticals
must berecommended bytheMinistry ofHealth andapproved bytheMinistry oftheEconomy.
Similarly, import licences forrareanimals andplants must berecommended bytheMinistry ofNature
andtheEnvironment andapproved bytheMinistry oftheEconomy. Inthese cases, theimporter is
required toapproach twoadministrative organs. Inthecaseofagricultural chemicals, importers need
only approach theMinistry ofAgriculture forlicence approval.WT/ACC/ARM/2
Page 23
3. Under what circumstances may anapplication foralicence berefused other than failure
tomeet theordinary criteria? Are thereasons foranyrefusal given totheapplicant? Have
applicants aright ofappeal intheevent ofrefusal toissue alicence and, ifso,towhat bodies
andunder what procedures?
112. TheMinistry ofHealth orMinistry ofNature andtheEnvironment, asappropriate, may not
recommend theissuance ofanimport licence incases where human, animal orplant lifeorhealth,
ortheenvironment may becompromised. Arecommendation foralicence willbewithheld ifa
proposed importation involves aproduct notincluded ontheapproved listmaintained bytheMinistry
ofHealth. Thesame considerations apply inthecase oflicence approvals granted bytheMinistry
ofAgriculture.
113. Inaddition, paragraph 9ofDecision No.17stipulates thatanimport licence may bedenied
where animportation would: (i)becontrary toanintergovernmental agreement; (ii)result inunfair
competitionasdefinedunderArmenianlegislation;(iii)bebasedonincorrectinformation;or(iv)involve
anyother case, asdefined inthelegislation ofArmenia. Points (ii)and(iv)above have notbeen used
asgrounds fordenying alicence, since nounderlying legislation requiring such actions hasbeen
developed.
114. Importersareentitledtomakerepresentationstotherespectivelicensingauthoritiesuponrejection
ofanimport licence. Importers arealsoentitled tomake representations through thecourts ifthey
aredissatisfied with anadministrative decision involving refusal togrant alicence.
IV. ELIGIBILITY OFIMPORTERS TOAPPLY FOR ALICENCE
1. Areallpersons, firms andinstitutions eligible forlicences:
(a) under restrictive licensing systems?
(b) under non-restrictive systems?
Ifnot, isthere asystem ofregistration ofpersons orfirms permitted toengage inimportation?
What persons orfirms areeligible? Isthere aregistration fee? Isthere apublished listof
authorized importers?
115. Anypersons, firms andinstitutions wishing toapply foranimport licence maydosoprovided
theyareregisteredasajuridicalpersonorasoleentrepreneurundertakingabusinessactivityinArmenia.
V. DOCUMENTATION AND OTHER REQUIREMENTS FOR APPLICATION FOR
LICENCE
1. What information isrequired inapplications? Submit asample form. What documents
istheimporter required tosupply with theapplication?
116. Aprospectiveimporterofaproductsubjecttolicensingmustsubmitanimportlicenceapplication
form (sample attached), together with acertificate oforigin, aproforma invoice orother agreement
indicating thenature oftheproduct, itsprice andtheterms andconditions oftheproposed transaction,
andacertificate ofquality.
2. What documents arerequired upon actual importation?
117. Import clearance oflicensed imports requires theoriginal copy oftheimport licence, acertificate
oforigin, andthefinal invoice.WT/ACC/ARM/2
Page 24
3. Isthere anylicensing feeoradministrative charge? Ifso,what istheamount ofthefee
orcharge?
118. Anadministrative charge islevied foranimport licence, amounting toonemonthly minimum
wage. This amounted to540Drams (approximately US$1.30) inmid-1995.
4. Isthere anydeposit oradvance payment requirement associated with theissue oflicences?
Ifso,state theamount orrate, whether itisrefundable, theperiod ofretention andthepurpose
oftherequirement.
119. Nodeposit oradvance ispayable upon issuance ofimport licences.
VII. CONDITIONS OFLICENSING
1. What istheperiod ofvalidity ofalicence? Can thevalidity ofalicence beextended?
How?
120. Theperiod ofvalidity ofalicence isamaximum ofoneyear. Licences maybere-issued after
thisperiod, butnotextended. Ifalicence isissued forlessthan themaximum period ofoneyear,
then such alicence canbeextended automatically uptothemaximum permitted period.
2. Isthere anypenalty forthenon-utilization ofalicence oraportion ofalicence?
121. Nopenalties exist forthenon-utilization oflicences.
3. Arelicencestransferableamongimporters?Ifso,areanylimitationsorconditionsattached
tosuch transfer?
122. Licences arenottransferable among importers.
4. Areanyother conditions attached totheissue ofalicence:
(a) forproducts subject toquantitative restriction?
(b) forproducts notsubject toquantitative restriction?
123. Noadditional conditions areattached totheissue ofanimport licence.
VIII. OTHER PROCEDURAL REQUIREMENTS
1. Arethere anyother administrative procedures, apart from import licensing andsimilar
administrative procedures, required prior toimportation?
124. Noother administrative procedures arerequired prior toimportation.
2. Isforeign exchange automatically provided bythebanking authorities forgoods tobe
imported? Isalicence required asacondition toobtaining foreign exchange? Isforeign exchange
always available tocover licences issued? What formalities must befulfilled forobtaining the
foreign exchange?WT/ACC/ARM/2
Page 25
125. Foreign exchange isautomatically provided forgoods tobeimported. Animport licence does
nothave tobepresented inorder toobtain foreign exchange. Foreign exchange isalways available
tocover licences issued, unless foreign exchange isingeneral short supply. This, however, isunlikely
tooccur inview ofArmenia ’sliberalized foreign exchange markets. Noformalities need tobefulfilled
inorder toobtain foreign exchange.WT/ACC/ARM/2
Page 26
Replies Relating toExport Licensing Regime
I. OUTLINE OFSYSTEMS
1. Give abrief description ofeach licensing system asawhole.
126. Armenia ’sexport licensing system closely parallels theimport licensing system, andisalso
regulated byDecree No.17ofJanuary 1995. Asontheimport side, pharmaceuticals andrareanimals
andplants aresubject tonon-restrictive licensing, designed toprotect health andtheenvironment.
Inaddition, exports oftextiles andclothing totheEuropean Union aresubject tolicensing under a
bilateral agreement with theEU,andlicences arealsorequired forexports ofrareobjects orartifacts
considered partofthenational patrimony. Thelicensing oftextile andclothing exports totheEUallows
these items tobemonitored, butthey arenotcurrently subject torestrictions ofanykind.
II. PURPOSES AND COVERAGE OFLICENSING
1. Identify each licensing system maintained andstate what products, appropriately grouped,
arecovered.
127. Armenia maintains export licensing requirements onthefollowing items:
HSnumber
Pharmaceutical products 29.41; 30.00
Raw materials forpharmaceutical production
Textiles andclothing toEU 05.00; 12.11; 13.02; 29.38
Objects considered partofthenational patrimony
Rare wild animals andplants included inthe
RedBook oftheRepublic ofArmenia
128. TheRedBook oftheRepublic ofArmenia identifies approximately onehundred rareanimals
andbirds, and390rareplants inrespect ofwhich licences would berequired andwhose exportation
may becontrolled.
129. TheMinistry ofEconomy issues licences forpharmaceutical products andrawmaterials used
intheir production onthebasis ofrecommendations bytheMinistry ofHealth. TheMinistry of
Economy issues licences fortheexportation ofrarewild animals andplants listed intheRedBook
onthebasis ofarecommendation oftheMinistry ofNature andEnvironment. Inthecase oftextile
andclothing exports totheEuropean Union, theMinistry ofEconomy hasexclusive responsibility
forissuing export licences. Exports ofobjects considered ofinterest tothenational patrimony must
beauthorized bytheMinistry ofCulture.
2. The system applies togoods destined towhich countries?
130. Thesystem applies toexports toalldestinations, except inthecaseofthelicensing requirement
forexports oftextiles andclothing totheEU.
3. Isthelicensing intended torestrict thequantity orvalue ofexports, andifnot, what are
itspurposes? Have alternative methods ofaccomplishing thepurposes been considered andif
sowhich? Why have they notbeen adopted?WT/ACC/ARM/2
Page 27
131. Thelicensing requirements identified above arenotintended torestrict thequantity orvalue
ofexports. Rather, they areintended toprotect thenational interest andhuman, animal orplant life
orhealth, andtheenvironment. Thegovernment does notconsider thatatthistime, abetter wayexists
ofachieving these objectives.
4. Citethelaw,regulationand/oradministrativeorderunderwhichthelicensingismaintained.
Isthelicensing statutorily required? Does thelegislation leave thedesignation ofproducts to
besubjected tolicensing toadministrative discretion? Isitpossible forthegovernment (orthe
executive branch) toabolish thesystem without legislative approval?
132. Thefollowing legal instrument underlies Armenia ’sexport licensing system:
Decree oftheGovernment oftheRepublic ofArmenia No.17of17January 1995 OnLicensing
and/allocation ofImport andExport ofCommodities (Jobs/Services).
133. There isnostatutory requirement toapply alicensing regime. Thedesignation ofproducts
subject tolicence isatthediscretion oftheexecutive branch ofgovernment. Itisatthediscretion
oftheexecutive branch toremove oradditems from thelistofthose subject tolicensing.
III. PROCEDURES
1. Wherethereisnoquantitativelimitonexportationofaproductoronexportstoaparticular
country:
(a) How farinadvance ofexportation must application foralicence bemade? Can
licences beobtained within ashort time-limit?
134. Licences must begranted within tendays ofreceipt ofanapplication. Since theten-day
stipulation isamaximum period, inpractice licences may beobtained within ashorter period.
(b) Can alicence begranted immediately onrequest?
135. Anexport licence willgenerally notbegranted immediately upon request, butinpractice the
necessary procedures may becompleted within adayortwo.
(c) Arethere anylimitations astotheperiod oftheyear during which application
foralicence and/or exportation may bemade? Ifso,explain.
136. Nolimitations exist inrelation totheperiod oftheyear during which alicence application
and/or anexportation may bemade.
(d) Isconsideration oflicence applications effected byasingle administrative organ?
Ormust theapplication bepassed ontoother organs forvisa, note orapproval? Ifso,which?
Does theexporter have toapproach more than oneadministrative organ?
137. Export licences forpharmaceuticals andrawmaterials fortheproduction ofpharmaceuticals
must berecommended bytheMinistry ofHealth andapproved bytheMinistry oftheEconomy.
Similarly, export licences forrareanimals andplants must berecommended bytheMinistry ofNature
andtheEnvironment andapproved bytheMinistry oftheEconomy. Inthese cases, theexporter is
required toapproach twoadministrative organs. Inthecase oftextiles andclothing, theMinistry of
theEconomy issolely responsible forissuing licences.WT/ACC/ARM/2
Page 28
2. Under what circumstances may anapplication foralicence berefused other than failure
tomeet theordinary criteria? Are thereasons foranyrefusal given totheapplicant? Have
applicants aright ofappeal intheevent ofrefusal toissue alicence and, ifso,towhat bodies
andunder what procedures?
138. TheMinistry ofHealth (orMinistry ofNature andEnvironment, asappropriate) may not
recommend theissuance ofanexport licence incases where human, animal orplant lifeorhealth,
ortheenvironment may becompromised. Arecommendation foralicence willbewithheld ifa
proposed exportation involves aproduct notincluded ontheapproved listmaintained bytheMinistry
ofHealth.
139. Inaddition, paragraph 9ofDecision No.17stipulates thatanexport licence may bedenied
where anexportation would: (i)becontrary toanintergovernmental agreement; (ii)result inunfair
competitionasdefinedunderArmenianlegislation;(iii)bebasedonincorrectinformation;or(iv)involve
anyother case, asdefined inthelegislation ofArmenia. Points (ii)and(iv)above have notbeen used
asgrounds fordenying alicence, since nounderlying legislation requiring such actions hasbeen
developed.
140. Inthecase oftextiles andclothing, theMinistry oftheEconomy may deny anexport licence
toanapplicant inrespect ofexports totheEUifexports oftheitems concerned were toexceed acertain
quantitative limitation. Since thishasnotoccurred sofar,Armenia hasnotdeveloped anymechanisms
foradministering export quotas.
IV. ELIGIBILITY OFEXPORTERS TOAPPLY FOR ALICENCE
1. Areallpersons, firms andinstitutions eligible forlicences:
(a) under restrictive licensing systems?
(b) under non-restrictive systems?
Ifnot, isthere asystem ofregistration ofpersons orfirms permitted toengage inexportation?
What persons orfirms areeligible? Isthere aregistration fee? Isthere apublished listof
authorized exporters?
141. Anypersons, firms andinstitutions wishing toapply foranexport licence maydosoprovided
theyareregisteredasajuridicalpersonorasoleentrepreneurundertakingabusinessactivityinArmenia.
V. DOCUMENTATION AND OTHER REQUIREMENTS FOR APPLICATION FOR
LICENCE
1. What information isrequired inapplications? Submit asample form. What documents
istheexporter required tosupply with theapplication?
142. Aprospectiveexporterofaproductsubjecttolicensingmustsubmitanexportlicenceapplication
form (identical toimport licence application form), together with acertificate oforigin, aproforma
invoice orother agreement indicating thenature oftheproduct, itsprice andtheterms andconditions
oftheproposed transaction, andacertificate ofquality.
2. What documents arerequired upon actual exportation?
143. Exports subject tolicensing must beaccompanied bytheoriginal copy oftheexport licence,
acertificate oforigin, andthefinal invoice.WT/ACC/ARM/2
Page 29
3. Isthere anylicensing feeoradministrative charge? Ifso,what istheamount ofthefee
orcharge?
144. Anadministrative charge islevied foranexport licence, amounting toonemonthly minimum
wage. This was540Drams (approximately US$1.30) inmid-1995.
4. Isthere anydeposit oradvance payment requirement associated with theissue oflicences?
Ifso,state theamount orrate, whether itisrefundable, theperiod ofretention andthepurpose
oftherequirement.
145. Nodeposit oradvance ispayable upon issuance ofexport licences.
VII. CONDITIONS OFLICENSING
1. What istheperiod ofvalidity ofalicence? Can thevalidity ofalicence beextended?
How?
146. Theperiod ofvalidity ofalicence isamaximum ofoneyear. Licences maybere-issued after
thisperiod, butnotextended. Ifalicence isissued forlessthan themaximum period ofoneyear,
then such alicence canbeextended automatically uptothemaximum permitted period.
2. Isthere anypenalty forthenon-utilization ofalicence oraportion ofalicence?
147. Nopenalties exist forthenon-utilization oflicences.
3. Arelicences transferable among exporters? Ifso,areanylimitations orconditions attached
tosuch transfer?
148. Licences arenottransferable among exporters.
4. Areanyother conditions attached totheissue ofalicence:
(a) forproducts subject toquantitative restriction?
(b) forproducts notsubject toquantitative restriction?
149. Noadditional conditions areattached totheissue ofanexport licence.
VIII. OTHER PROCEDURAL REQUIREMENTS
1. Arethere anyother administrative procedures, apart from export licensing andsimilar
administrative procedures, required prior toexportation.
150. Noother administrative procedures arerequired prior toexportation.WT/ACC/ARM/2
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Answers toQuestionnaire inAnnex 4ofWT/ACC/1 onCustoms Valuation
1. Questions concerning Article 1:
(a) Sales between related persons:
(i) Aresales between related persons subject tospecial provisions?
151. Armenia hasnotdeveloped specific provisions inanylaws orregulations dealing with sales
between related parties. Under Decree No.615(6December 1993), theauthorities would normally
apply thetransactions value, unless itwasdetermined thatthedeclared invoice value didnotrepresent
theprice actually paid orpayable forgoods.
(ii) Isthefactofintercompany prices prima facie considered asgrounds forregarding the
respective prices asbeing influenced?
152. Theauthorities donotmake aprima facie assumption thatintercompany transactions occur
atprices thatareinfluenced.
(iii) What istheprovision forgiving thecommunication oftheaforementioned grounds in
writing iftheimporter sorequests? (Article 1.2(a)).
153. Paragraph 8ofDecree No.615permits importers toseekawritten explanation ofanyrejection
bythecustoms authorities ofadeclared invoice value astheprice actually paid orpayable inrespect
ofanimport transaction between related parties.
(iv) How hasArticle 1.2(b) been implemented?
154. DecreeNo.615doesnotcontainprovisionsrelatingtotheconditionsspelledoutinArticle1.2(b)
oftheWTO customs valuation agreement.
(b) Price oflostordamaged goods:
Arethere anyspecial provisions orpractical arrangements concerning thevaluation of
lostordamaged goods?
155. Damaged goods must bevalued taking intoaccount theeffects ofthedamage, andduties are
then charged ontheassessed value. Noduties arepayable onlostgoods.
2. How hastheprovision ofArticle 4toallow theimporter anoption toreverse theorder
ofapplication ofArticles 5and6been implemented?
156. Noprovision hasbeen made inDecree No.615forthereversal oftheorder ofapplication
ofthevaluation methods specified inArticles 5and6oftheWTO customs valuation agreement. Such
aprovision hasnot,therefore, been implemented inArmenia.
3. How hasArticle 5.2been implemented?
157. Paragraph 24ofDecree No.615provides forthecircumstances envisaged inArticle 5.2of
theWTO customs valuation agreement. There arenocases sofarinwhich theprovisions ofArticle 5.2
have been implemented.WT/ACC/ARM/2
Page 31
4. How hasArticle 6.2been implemented?
158. Decree No.615does notcontain provisions dealing with access toinformation possessed by
residents ofother countries inthecontext ofdetermining computed values.
5. Questions concerning Article 7:
(a) What provisions have been made formaking value determinations pursuant to
Article 7?
159. Paragraphs 27and28ofDecree No.615provide forthedetermination ofcustoms values when
none oftheother fivemethods available canbeapplied.
(b) What istheprovisions forinforming theimporter ofthecustoms value determined
under Article 7?
160. Paragraph 27ofDecree No.615requires thatthecustoms authorities make available relevant
information when value isdetermined byanymethod other than oneofthefiveavailable.
(c) Aretheprohibitions found inArticle 7.2delineated?
161. Paragraph 28ofDecree No.615states thatneither retail prices inthedomestic market, nor
theprices oflocally produced goods, norexport prices tothird countries, noranyother price determined
atwilloronaninexact basis, may beused forcustoms valuation purposes when none ofthefive
available valuation methods areapplicable.
6. How have theoptions found inArticle 8.2been handled? Inthecase off.o.b. application
areex-factory prices also accepted?
162. Paragraph 12ofDecree No.615requires thatthetransaction value applied forcustoms duty
purposes should include alltheadditional costs referred toinArticle 8.2oftheWTO customs valuation
agreement.
7. Where istherate ofexchange published, asrequired byArticle 9.1?
163. Theexchange rates applied arederived from thedaily foreign exchange auctions held bythe
Central Bank ofArmenia. TheCentral Bank announces exchange rates daily andthese rates are
published inthepress.
8. What steps have been taken toensure confidentiality, asrequired byArticle 10?
164. Paragraph 5ofDecree No.615provides thatconfidential information shall only beused for
customs purposes andnotdivulged tothird parties except byprior consent.
9. Questions concerning Article 11:
(a) What rights ofappeal areopen totheimporter oranyother person?
(b) How ishetobeinformed ofhisright tofurther appeal?
165. Administrative appeal toahigher customs authority isprovided forinparagraph 9of
Decree No.615. Juridical persons (firms orsoleentrepreneurs) maymake judicial appeals toaspecial
arbitration authority incases involving valuation decisions. This arbitration isbinding. IncasesWT/ACC/ARM/2
Page 32
involving anymatter other than valuation, juridical persons may appeal tothecivil courts. Natural
persons may only make appeals tothecivil courts.
10. Provide information onthepublication, asrequired byArticle 12,of:
(a) (i) therelevant national laws;
(ii) theregulations concerning theapplication oftheAgreement;
(iii) thejudicialdecisionandadministrativerulingsofgeneralapplicationrelating
totheAgreement;
(iv) general orspecific laws being referred tointherules ofimplementation
orapplication.
166. Relevantnationallaws,regulations,decisionsandrulingsarepublishedintheBulletinofDecrees
oftheGovernment ofArmenia orintheManual oftheSupreme Council oftheRepublic ofArmenia.
11. Questions concerning Article 13:
(a) How istheobligation ofArticle 13(last sentence) being dealt with intherespective
legislation?
167. When thecustoms value ofgoods cannot beimmediately determined, importers areentitled
toremove their goods from customs control upon payment ofprovisional duties based ontheassessment
ofthecustoms authorities. Theimporter hasthree months inwhich tochallenge thisassessment.
Alternatively, animporter mayprovisionally clear goods against abank guarantee valid foronemonth.
Ifavaluation issue isnotsettled within onemonth, afurther two-month period isprovided foran
importer tochallenge anassessment, against provisional payment oftheassessment made bythecustoms
authorities. Theduty assessment, whether adjusted ornotfrom theoriginal assessment ofthecustoms
authorities, becomes final after thethree-month period.
(b) Have additional explanations been laiddown?
168. Noadditional explanations have been laiddown.
12. Questions concerning Article 16:
(a) Does therespective national legislation contain aprovision requiring customs
authorities togive anexplanation inwriting astohow thecustoms value wasdetermined?
169. Paragraph 8ofDecree No.615provides thatanimporter isentitled, within seven days ofa
written request, toreceive awritten explanation ofavaluation decision ofthecustoms authorities.
(b) Arethere anyfurther regulations concerning anabove-mentioned request?
170. Nofurther regulations have been developed inregard tothismatter.
13. How have theInterpretative Notes oftheAgreement been included?
171. The interpretative notes oftheWTO Agreement onCustoms Valuation have notbeen
systematically included inDecree No.615.WT/ACC/ARM/2
Page 33
14. How have theprovisions oftheDecision of26April 1984 ontheTreatment ofInterest
Charges intheCustoms Value ofImported Goods (Val/6/Rev.1) been implemented?
172. Theprovisions oftheabove-mentioned Decision have notbeen included inDecree No.615.
15. Forthose countries applying paragraph 2oftheDecision of24September 1984 onthe
Valuation ofCarrier Media Bearing Software forData Processing Equipment (Val/8), how have
theprovisions ofthisparagraph been implemented?
173. Armenia does notapply theabove-mentioned Decision.WT/ACC/ARM/2
Page 34
Answers toQuestionnaire inAnnex 5ofWT/ACC/1 on
Technical Barriers toTrade
1. Description ofrelevant laws, regulation, administrative orders, etc., relating to
implementation andadministration oftechnical barriers totrade. Allnecessary references should
beprovided.
174. The relevant laws regulating Armenia ’stechnical certification system aretheLaw on
Standardization andCertification andtheLaw onIdentity ofMeasurements. Both these laws arestill
indraft andunder theconsideration ofParliament. The lawonstandards defines therights and
obligations oftheNational Body onStandardization andCertification, ArmStateStandard, andofthe
producers andimporters ofgoods subject tocertification. Thecertification system inArmenia is
coordinated bytheGOST standards oftheSeries 5andanumber ofregulating documents (listattached).
Thecertification system isbased ontherequirements ofISO/IEC 2,25,28,40. Atpresent compulsory
certification isonly required, through Resolution No.417of1994, forarange oftobacco products
andbeverages (theResolution andlistofproducts isattached). Please alsorefer tosection 3.1.9. of
WT/ACC/ARM/1 foradditional information. Please note thatitwasincorrectly stated inthefirst
paragraph ofsection 3.1.9. thatcompulsory standards existed inArmenia forarange offoodstuffs,
electricalgoodsandchildren’sclothes.Thepossibilityofdevisingcompulsorycertificationrequirements
forthese andother products isunder consideration, butnodecisions have yetbeen taken.
2. Information regarding:
(a) names ofpublications, ifany, onwork relating todraft technical regulations orstandards
andprocedures.
175. ArmStateStandardpublishesamonthlyjournalcalledHayastwhichprovidescurrentinformation
onissues relating tostandardization andcertification.
(b) thename andaddress oftheenquiry point(s) foreseen inArticles 10.1 and10.3 ofthe
WTO Agreement onTechnical Barriers toTrade (theAgreement) with anindication astowhether
itis/they arefully operational.
Theenquiry points thatarenotfully operational lackappropriate facilities andpersonnel. It
isestimated thatthey may take four tofiveyears tobecome fully operational.WT/ACC/ARM/2
Page 35
Name Address
Armenian Center forStandardization,
Certification andMeasurementKomitas St.49/2, 375054,
Yerevan, Armenia.
Tel.: 23-46-60Fully
operational
Gumri Center forStandardization,
Certification andMeasurementShirakatsu St.68,337018,
Gumri, Armenia.
Tel.: 2-03-46Notfully
operational
Vanadzor Center forStandardization,
Certification andMeasurementYerevanian St.94,377200,
Vanadzor, Armenia.
Tel.: 28-11-17Notfully
operational
Kapan Center forStandardization,
Certification andMeasurementMarx St.41,Kapan, Armenia.
Tel.: 4-49-02Notfully
operational
Kamo Center forStandardization,
Certification andMeasurementMayisian St.62,Kamo,
Armenia.
Tel.: 2-29-02Notfully
operational
(c) thename andaddress ofagencies that aredealing with consultations asforeseen
inArticle 14oftheAgreement;
Name Address
Committee oftheDepartment of
Standardization, Certification and
Measurement.Komitas St.49/2, 375054, Yerevan,
Armenia.
Tel.: 23-46-60
(d) thename andaddress ofagencies that aredealing with other specific functions
foreseen intheAgreement;
Name Address
Department ofStandardization,
Certification andMeasurement.Komitas St.49/2, 375054, Yerevan,
Armenia.
Tel.: 23-46-60
(e) thescopeofresponsibilityofthecentralgovernmentauthoritiesinareaofnotification
requirements foreseen inArticle 10.11 oftheAgreement andofindividual government authorities,
iftheresponsibility isdivided among twoormore such authorities;
176. ArmStateStandard istheonly body responsible fornotifications.
(f) measures andarrangements toensure that national andsub-national authorities
preparing new technical regulations orsubstantial amendments toexisting ones, provide early
information ontheir proposals.
177. Fifteen specialized commissions have been established toexamine proposed new technical
regulations. Themembers ofthecommission areinvited experts indifferent product fields. Relevant
information isalsoprovided tointerested parties andorganizations inorder tosolicit their opinions
onthesubject. Decisions aremade onthebasis ofthesuggestions ofthecommission andtheview
ofinterested parties.WT/ACC/ARM/2
Page 36
PART II:REPLIES TOSPECIFIC QUESTIONS
Chapter II:Economy and Foreign Trade
2.1.2 Current economic situation
1. Itisstated that itwasessential forArmenia tofind ways ofmaintaining some continuity
intrade flows, inview ofthefactthat inthepast there was ahigh degree ofintegration within
theSoviet system. What steps were taken? Does Armenia now intend todiversify itstrade and
ifso,what steps arebeing taken tothisend?
178. Asexplained insection VofArmenia ’sMemorandum (WT/ACC/ARM/1), Armenia relied
heavily onbarter clearing arrangements with Former Soviet Union countries, especially Russia and
Turkmenistan, intheperiod immediately following independence. Such arrangements were theonly
means available atthattimeofensuring access toessential supplies ofcertain commodities, most notably
fuel. Asindicated elsewhere inthissubmission, theremaining barter arrangements maintained by
Armenia willbeeliminated in1996. Asameans ofdiversifying itstrade, Armenia hasadopted apolicy
ofopen trade with alltrading partners.
2. Insection 2.1.2 itisstated that 47percent ofexports and25percent ofimports in1994
took place onthebasis ofbarter arrangements. CanArmenia please provide information ontrends
inbarter trade inrecent years andanassessment astolikely developments inthenear future?
179. Preliminary figures forthefirstsixmonths of1995 indicate that25percent ofexports and
20percent ofimports took place onthebasis ofbarter arrangements. Barter hasrepresented an
ever-diminishing component ofArmenia ’sexternal trade since independence, andasindicated inthe
answer totheprevious question, allbarter arrangements willbeeliminated in1996.
2.1.3. Economic policy
3. Does Armenia consider itself tobeaneconomy intransition oradeveloping country?
180. Armenia isaneconomy intheprocess oftransition. However, Armenia isalsoacountry with
alowpercapita income, which isforecast toreach approximately US$370 in1995.
4. The Law onEnterprises andEntrepreneurial Activities defines government guarantees
inrespect oftheright totrade. Does everyone, individuals andcompanies, have theright totrade
(imports andexports)?
181. Alljuridical persons --thatis,enterprises andsoleentrepreneurs --have theright totrade.
5. Could Armenia explain inmore detail what measures itistaking orintends totake in
order toreach thefivegeneral economic policy priorities listed inthefirst paragraph ofsection
2.1.3.? Further information inparticular onthefollowing would beappreciated:
-theliberalization ofprices andforeign trade andexchange regimes;
-thedismantling ofState trading andinter-State clearing arrangements;
-theelimination ofobstacles toprivate sector development?WT/ACC/ARM/2
Page 37
Areanyofthemeasures forachieving these objectives already approved orunder examination?
182. Armenia submits thattheanswers tothese questions arecontained insubsequent sections of
itsMemorandum (WT/ACC/ARM/1), andarefurther elaborated inresponse tomaterial presented
inthepresent submission, both inPartI,andinresponses tothemore specific questions inPartII.
Naturally, Armenia stands ready tosupply anyfurther clarifications required.
183. Armenia would liketoemphasize toitstrading partners thatinthespace oflessthan halfa
decade, thecountry hasundergone afundamental political, social andeconomic transformation, on
thebasis ofanunswerving commitment tothedevelopment ofamarket-based economy, andoften
atthecostofconsiderable hardship forthepopulation atlarge. Theprocess oftransformation isnot
yetcomplete,despitetherapidpaceofchange.Withvaluablesupportfromtheinternationalcommunity-
both from governments andfrom intergovernmental institutions -thecommitment ofArmenia to
continued reform remains strong. Inthiscontext, theGovernment ofArmenia attaches great importance
toWTO accession asameans ofcontinuing andconsolidating thereform process.
6. Please provide aprogress report ontheachievement oftheshort-term stabilization
objectives mentioned inthesecond paragraph of2.1.3. Please explain theobstacles toprivatization
referred tointhissection.
184. Mostoftheshort-termstabilizationobjectivesmentionedinthesecondparagraphofsection2.1.3
ofWT/ACC/ARM/1 areontarget orhave been achieved. Thematters referred toincluded aninflation
ratetarget, liberalization oftheforeign exchange market, anincrease inforeign exchange reserves,
establishment ofamarket-oriented approach tointerest ratedetermination, afiscal deficit target,
rationalization ofthefiscal system, improvements intaxadministration, areduction inconsumer
subsidies, improved banking supervision, andtheplanned elimination ofexport surrender requirements.
These arebriefly summarized here, andsome ofthem willbereferred toagain below inthecontext
ofanswers tospecific questions.
185. Theobjective ofbringing inflation down to1percentpermonth isnotfarfrom realization,
with theconsumer price index rising from 1,129 inJanuary 1995 (January 1994 =100) to1,276 by
theendofJuly. TheGovernment isforecasting anaverage monthly rateofinflation during 1995 of
2.2percent. Themagnitude ofthesuccess inreducing inflation may beappreciated bycomparison
with theyear 1994, when theindex rose from 100inJanuary 1994 to1,087 inDecember 1994,
representing anaverage monthly inflation rateof28percent.
186. Foreign exchange reserves arecurrently at1.6months ofimports, compared totheend-1995
target of1.7months. Exchange rates arenow market-determined through daily foreign exchange
auctions, andthefactthattheDram hasbeen stable against thedollar forthewhole of1995 attests
tothesoundness oftheGovernment ’smonetary policy andtherelatively lowrate ofinflation.
Confidence inthestability oftheDram hasincreased significantly, leading toareversal oftheprevious
trend ofsubstitution ofDrams fordollars incirculating currency andbank deposits. Before theend
oftheyear, theGovernment willeliminate restrictions ondirect foreign currency trading among the
commercial banks.
187. Interest ratepolicy isincreasingly market-determined, with theCentral Bank ’srefinance rate
being adjusted frequently tokeep itequal toorgreater than theratedetermined inthecredit auction.
Ifauction-determined interest rates become negative inrealterms, theCentral Bank willconsider a
further tightening ofitscredit policies. After theelimination ofdirected credits atthebeginning of
1995, theCentral Bank now holds twice-weekly credit auctions. Thefrequency oftheauctions will
beincreased during 1995. AstheArmenian economy strengthens, theCentral Bank will moveWT/ACC/ARM/2
Page 38
increasingly tostandard open-market operations andaway from refinance credit mechanisms asthe
means ofcontrolling liquidity intheeconomy.
188. Thetarget ofreducing thefiscal deficit to12percentofGDP hasbeen reduced downwards,
anditisnow hoped tobring thedeficit down tobelow 10percent ofGDP bytheendof1995 (on
anaccrual basis). Measures aimed atrationalizing thetaxsystem arealsointrain, most notably through
theremoval ofexemptions from VAT onbutter, sugar, oil,sewerage andwater, theestablishment
ofapresumptive taxonsmall businesses, theplanned introduction ofacomprehensive taxonhouseholds
toreplace theenterprise fixed asset taxandother taxes (1January 1996), andtheplanned unification
ofcorporate taxrates ondifferent economic activities (by1January 1996).
189. Taxadministration measures taken toimprove collection performance include theprogrammed
introduction oftaxpayer identification numbers, theintention tocollect VAT onimports atcustoms
(by31March 1996), improved techniques forselecting taxpayers tobeaudited, andthecomputerization
ofthetaxadministration.
190. Subsides have been removed onbread. Cross-subsidies ondrinking water forhouseholds and
direct subsidies ongarbage removal, district heating andhotwater have alsobeen removed. Charges
forelectricity andwater willbebased onfull-cost pricing before theendof1995. Rents onhousing
willbeliberalized with theprivatization ofhousing bytheendof1995, butanyhousing remaining
tobeprivatized willbesubject torents settoensure fullcostrecovery.
191. Banking supervision hasbeen markedly improved andnewprudential requirements have been
introduced (seematerial ontrade inservices inPartIabove). Finally, theexport surrender requirement
waseliminated atthebeginning ofApril 1995.
7. One ofthegovernment 'sshort term stabilization objectives is"the removal ofdistortions
affecting interest rates andexchange rates". What kinds ofdistortions aremeant here andwill
therates befully commercially determined inthenear future?
192. Please seeprevious answer.
8. Please provide more details ontheremaining subsidies onbread and other consumer
products, including alistofthese products andanindication oftheir economic importance, the
level ofthese subsidies, theamount ofmoney involved andtheanticipated timetable fortheir
reduction andphasing out.
193. Thedetails oftheGovernment ’sprogramme forremoving consumer subsidies hasbeen referred
tointhelastquestion butone. Asnoted, bread subsidies, which were themost significant ofthe
consumption subsidies were eliminated inJune 1995. Other direct subsidies andcross-subsidies to
consumption have either been removed already, orwillhave been removed bytheendof1995.
9. Please provide more details onhow theCentral Bank intends toimprove itssupervision
ofthebanking sector.
194. Please seereplies dealing with banking intheservices section ofPart Iofthissubmission
(paragraphs 73to76).WT/ACC/ARM/2
Page 39
10. Itisstated that Armenia hasnoquantitative restrictions ontrade. However, therules
oforigin applied byArmenia seem toindicate apossibility torequire anorigin certificate inrespect
of"goods" subject toquantitative limitation (p.14). Please clarify theapparent contradiction.
195. Theprovisions relating totherules oforigin specify allthecircumstances inwhich certificates
oforigin might inprinciple berequired. Itdoes notfollow thatbecause certificates oforigin might
berequired where quantitative restrictions areapplied thatquantitative restrictions areactually applied
inpractice. Asstated previously, Armenia does notmaintain quantitative restrictions ontrade other
thanthosejustifiedunderhealth,safety,environmental,andnationalsecuritygrounds(pleaseseerelevant
sections ofMemorandum andthissubmission).
2.2.2. Trade flows byorigin anddestination
11. What aretherecent trends intrade between Armenia andtheFSU countries? Istheshare
ofthese countries inArmenia ’strade expected toincrease ordecrease? (section 2.2.2).
196. Unfortunately, notmuch additional information ontrade flows hasbecome available since the
submissionofArmenia’sMemorandum(WT/ACC/ARM/1).Forthefirstsixmonthsof1995,however,
FSU countries accounted for64percentofArmenia ’sexports and51percentofthecountry ’simports
(please seeAnnex 2).According totheGovernment ’strade forecasts, trade shares asbetween FSU
countries andtherestoftheworld willremain fairly stable over thenextfiveyears, with ananticipated
decrease intheFSU export share from 75percent in1996 to69percent in2000 (Annex 2).On
theimports side, theFSU share ispredicted torisefrom 61percentin1996 to68percentin2000.
Thelatter figures mayinpartreflect ananticipated decline infood aidfrom western countries, making
theFSU import share higher over theperiod.
Chapter III: Foreign Trade Regime
3.1.1. The customs tariff
12. Itisourunderstanding that, onthebasis ofthelawontariffs approved byParliament
inAugust 1993, theauthority tomodify customs duties lieswith theGovernment ofArmenia.
Please confirm this. Isitourunderstanding thatthemaximum customs duty rateis50percent?
Isthissetbylaworcould thisbechanged bythegovernment?
197. Tariff rates arerecommended bytheGovernment, butasafiscal measure, they must be
confirmed bytheparliamentary Permanent Financial Credit, Budgetary andEconomic Commission.
Themaximum tariff currently applied is50percent(only oncaviar andpetfood --please seetariff
schedule submitted with WT/ACC/ARM/1). Asindicated, tariff changes must beapproved bythe
parliamentary Permanent Financial Credit, Budgetary andEconomic Commission.
13. Given theoverall lowlevel oftariffs canweseek clarification astowhy thetwospecified
items (section 3.1.1) -petfood andcaviar -incur a50percent tariff.
198. Thereason oflevying the50percent oftariff rateontheproducts mentioned isfiscal and
distributional innature. These areregarded asluxury products. Atthebeginning of1996, these, and
perhaps other high tariffs, willbereplaced byexcise taxes.WT/ACC/ARM/2
Page 40
14. Why isitthat ‘only 132items ’have been identified inArmenia ’stariff schedule, given
thattheHarmonized Tariff System contains more mandatory headings than this? Can Armenia
please provide acopy ofitscurrent tariff?
199. Thereason thatonly 132items have been identified inArmenia ’stariff schedule isthatnearly
allproduct categories identified atthetwo-digit level ontheHarmonized System carry thesame rate
ofduty. Ithastherefore been unnecessary togofurther thantwodigits, except inafewcases, toprovide
acomplete picture oftheArmenian tariff. Thecurrent tariff schedule isprovided intheAnnex N1
oftheDecree No.615, andwasattached totheMemorandum.
15. What criteria areinvolved where anindividual wishes totake advantage oftheentitlement
to‘export ortoimport new goods uptothevalue ofonethousand U.S. dollars (section 3.1.1.)? ’
Wepresume thatthisisnotintended toactasaconstraint ontherights ofenterprises orindividuals
toengage inforeign trade? What requirements, ifany, must bemetbefore anindividual oran
enterprise canengage inforeign trade?
200. There arenorestrictions upon enterprises orindividuals engaging inforeign trade inArmenia.
Thelastsentence ofthethird paragraph ofsection 3.1.1. should have pointed outthattheUS$1,000
limit referred toduty-free import allowance fornatural persons, andnottoanyfundamental right to
import. Enterprises orsoleentrepreneurs engaging intrading must beregistered intheState Register
ofenterprises.
16. Does Armenia have alevel ofceiling binding inmind foritstariff? IsArmenia willing
tobind allofitstariff upon accession totheWTO?
201. Armenia hasnotyetdetermined theappropriate level foraceiling binding ofitstariff, but
theGovernment iswilling tobind theentire tariff upon accession totheWorld Trade Organization.
3.1.2. Import charges andfees
17. The customs feeof0.15 percent does notappear tobeconsistent with Article VIII of
theGATT. What steps does Armenia intend totake tobring itssystem into linewith GATT
practice?
202. Inview oftheprovision inArticle VIIIofGATT 1994 requiring thatfeesforservices rendered
must correspond roughly tothecostoftheservices rendered, andinview ofthepractical difficulties
ofstructuring theArmenian customs feeinterms ofactual costs incurred forrendering customs services,
theGovernment ofArmenia hasdetermined thatthebestcourse ofaction would betobind thecustoms
userfeeof0.15 percentasan“extra dutyorcharge ”under Article II.1(b) intheschedule ofconcessions
18. AreFSU countries exempt from thecustoms fee?
203. No,theFSU countries arenotexempted from thecustoms fee.
19. How dotheexemptions from thecustoms feegranted toclearing operations made on
thebasis ofinternational agreements andimports ofrawmaterials forconstructions under bilateral
inter-republican contracts correspond with theMFN principle?
204. Theexemption from thecustoms user feeforbilateral clearing operations willberendered
moot asanMFN issue with theelimination ofinter-governmental clearing arrangements in1996.WT/ACC/ARM/2
Page 41
3.1.4. Tax Regime
20. Forthose goods andservices which areVAT zero-rated: does thisexemption apply equally
toimports anddomestic produced goods?
205. Zero-rating under VAT applies equally toimports anddomestically produced goods.
21. VAT andexcise duties areapplied todomestically produced goods andimports from all
countries except theFSU States. Please explain theeconomic rationale fornotapplying these
taxes toimports from FSU States. Does thisgive risetodiscrimination against products from
non-FSU countries?
206. Imports from FSU countries areexempted from VAT andexcise tax,while exports tothese
countries payVAT, butnotexcise tax.Imports from non-FSU countries payVAT andexcises, and
exports tothesame countries paynoVAT orexcise. Inrespect ofFSU trade, theorigin principle
oftaxation applies, andfornon-FSU trade itisthedestination principle. Noclear economic rationale
exists forpreferring oneapproach totheother, butthedestination principle isused inmost countries
intheworld (i.e.these indirect taxes areapplied totrade bytheimporting country andnottheexporting
country). Theuseoftheorigin principle inintra-FSU trade isafeature oftrade relations among former
FSUcountries.Theoriginanddestinationprinciplesareonlyneutralastotaxincidenceincircumstances
where countries coming under thetwodifferent systems charge thesame taxes onthesame products.
Otherwise, thetaxburdens facing theimports andexports ofacountry willvary asbetween thesources
anddestinations inrespect ofwhich either theorigin orthedestination principle isapplied. Moreover,
inthisparticular case, theexemption ofexports toFSU countries from excise taxcreates anadditional
asymmetry. TheGovernment ofArmenia intends tonegotiate with former FSU countries inorder
tosecure agreement fortheadoption ofthedestination principle approach totaxation. This would
mean thatintheframework ofthefreetrade agreement with CIScountries, VAT andexcises would
becharged onimports inthesame way asthey arecharged onimports from non-FSU sources and
ondomestic production inArmenia.
22. Please explain thereasons forapplying anexcise duty ontires.
207. Theinclusion oftires inthelistofproducts subject toexcise taxreflects thefactthatatthe
time thetaxwasintroduced, theindustry wasworking with very high profits.
23. Please explain themeaning ofthesentence "The differentials indicated intheabove listing
willdisappear induecourse, astheGovernment hasdecided tounify taxrates onimports and
equivalent domestic goods". Theinclusion ofthissentence appears tocontradict thepreceding
paragraphs which state thatindirect taxes areapplied equally toimports anddomestically produced
goods. Please explain what thedifferentials areandwhen unification willtake place.
208. Uniform rates ofexcise taxarenow applied toimports anddomestic output. Theschedule
ofexcise taxisasfollows:WT/ACC/ARM/2
Page 42
Name ofproduct Rate
Wine-Vodka 50
Beer, grape wines, wine stuff 25
Tobacco 25
Jewellery, golden products 25
Furs, leather products 25
Tires 25
Crystal, Porcelain 25
Handmade carpets 50
24. What percentage oftheir profits doState farms payasincome tax?
209. Nodifferentiation ismade between enterprises onthebasis ofownership inrelation totaxation
intheagricultural sector. Both State farms andprivate farms paytheland tax,which isestablished
attherateof15percent ofcalculated netincome determined bythecadastre value oftheland.
25. Please explain why adifferent system forlevying income taxhasbeen developed forthe
agricultural sector .
210. Thedifferent system oftaxation fortheagricultural sector reflects thedesire toimpose alesser
taxburden onthesector. Aslong asfarmers donotderive more than 25percent oftheir incomes
from non-agricultural sources, they areexempt from income tax
26. What arethecriteria fordeciding when, andtowhat extent, farmers 'taxliabilities are
reduced?
211. InaccordancewiththeLawonPeasantandCollectiveFarms(attached),farmersinmountainous,
remote orabandoned countryside areas maybegranted taxrelief. Atpresent, taxexemptions arebeing
granted tofarmers inborder areas affected bytheconflict with Azerbaijan.
27. Exemptionstotheenterpriseprofitstaxcanbegrantedfortheproductionofgoods"deemed
ofnational importance". Which goods arecovered bythisphrase andwhat arethecriteria for
determining which goods arecovered?
212. These exemptions nolonger exist.
28. What arethecriteria tobeused tosecure ataxexemption onincome derived from a
business activity during thefirst twoyears ofoperation? Does thisbusiness taxexemption apply
tojoint ventures andforeign businesses (section 3.1.4)?
213. Thereason forgranting taxholidays tonewly established enterprises during thefirsttwoyears
istopromote entrepreneurship andbusiness activity inthecountry. Theexemption applies equally
todomestic enterprises, joint ventures, andforeign enterprises.
29. Please explain why banks andinsurance companies payaflatrate enterprise profits tax
of45percent asopposed tothegraduated levels applied toother enterprises. Does Armenia
have anyplans toeliminate thisdiscrimination?
214. With effect from 1January 1996, taxrates forbanks andinsurance companies willbethesame
asforother enterprises.WT/ACC/ARM/2
Page 43
30. Please provide aprogress report ontheestablishment ofasingle corporate taxrate.
215. Please refer toprevious answer.
31. Please provide more details onthetaxregime applied toState enterprises.
216. Armenian taxlegislation applies equally toallenterprises regardless ofownership. Thepublic
sector does notenjoy special taxrates.
32. Does theenterprise profits taxapply also toState enterprises?
217. Theenterprise profits taxalso applies toState enterprises. Newly created enterprises are
exempted from profits taxinthefirsttwoyears after official registration. Incasetheenterprise isshut
down within aperiod ofthree years, taxwillbelevied inthefullamount forthewhole period of
activity.
218. Theabove-mentioned privilege does notapply toState enterprises, reorganized andprivatized
enterprises. Joint ventures andforeign enterprises areaccorded anadditional taxcredit, depending
ontheamount offoreign equity intheenterprise. Enterprises established after 1995 willpaytaxes
intheamount of50percentofthetaxliability iftheforeign capital ismore than 50percentofthe
authorized capital oftheenterprise, andamounts toatleast US$100,000. Iftheforeign equity inan
enterprise comprises 30-50 percent(US$40,000-100,000) oftotal capital, theninaddition totheabove,
ataxrateof30percentofthenormal taxliability willbepaid between thethird andtenth years of
operation.
33. Please provide asummary ofthe Law "On Property Tax" containing more details on
how itoperates anditsrelationship with other taxlaws.
219. Asnoted previously, theproposed Law onProperty Taxwillbeintroduced attheendof1995,
andwillreplace thefixed assets tax. Thetaxistoapply to:(i)theassets ofallenterprises asdefined
intheLaw onEnterprises andEntrepreneurial Activities, unless particular assets arethesubject of
aspecificexemptionbytheGovernment;(ii)housesandotherdwellingsinArmeniabelongingtocitizens
andnon-citizens, orleased bythem; (iii)cattle; and(iv)certain vehicles. Arange ofassets andpersons
areexempted from thetax,asindicated inArticle 9andArticle 10oftheLaw (attached).
3.1.5. Non-tariff measures quotas andlicensing
34. This section needs clarification asitisbeing stated inthefirst paragraph thatmost imports
arefree ofanyquotas orlicensing requirements, andthen repeated inthesecond paragraph
that most imports arealso free ofanylicensing requirements.
220. Thefirstreference toimport licensing, inthefirstparagraph ofsection 3.1.5., wasanerror.
Thesecond paragraph ofthesection wasintended asadescription ofimport licensing arrangements.
35. Please provide acopy ofDecree No.17January 1995 andasummary tothemembers
oftheWorking Group.
221. Resolution No.17 hasbeen annexed tothissubmission (having been inadvertently omitted from
theMemorandum). Itscontents aresummarized insections 3.1.5., 3.2.2., and 3.2.3. of
WT/ACC/ARM/1, together withtheanswers totheimport andexport licensing questionnaires appended
toPart Iofthissubmission.WT/ACC/ARM/2
Page 44
36. Pleaseprovideafulllist(includingtheHStariffclassificationcodeto6digitswherepossible)
oftheproducts towhich non-tariff measures (e.g. prohibition, quotas, licensing) oftheproducts
towhich anindication ofthetype ofnon-tariff measure applied, thereason foritsapplication
andplans -ifany-foritselimination.
222. Onlicensing, please seeprevious reply, including cross references. Asindicated inthefirst
paragraph ofsection 3.1.5. ofWT/ACC/ARM/1, import prohibitions apply toweapons, components
usedintheproductionofweapons,explosives,nuclearmaterials,poisons,narcotics,strongpsychotropic
substances, devices used inopium smoking, andpornographic materials. Allthese prohibitions are
justifiedongroundsofhealth,safety,environmental,publicmoralsornationalsecurity.TheGovernment
hasnoplans toeliminate these restrictions. Noimport quotas areapplied inArmenia.
37. Please provide amore detailed description ofanymeasures taken forhealth, security or
environmental reasons.
223. Please refer totheprevious reply.
38. Please provide aclear table providing listing products byHScode with thelicensing
requirements forexports orimport and aresponse tothequestionnaire onimport licensing
procedures (See WT/ACC/1, pages 12to15).
224. Please seethereplies totheimport licensing andexport licensing questionnaires appended to
Part Iofthissubmission.
39. Pleaseprovidemoredetailsonthelicensingregimeformedicinesandagriculturalchemicals
andinclude alistoftheinformation/documentation which theimporter isrequired tosupply.
225. Please seethereplies totheimport licensing andexport licensing questionnaires appended to
Part Iofthissubmission.
40. Areallpersons -natural andlegal, domestic andforeign -eligible toapply forimport
licences? Ifnot, please explain what restrictions exist.
226. Anypersons, firms andinstitutions wishing toapply foranimport licence maydosoprovided
theyareregisteredasajuridicalpersonorasoleentrepreneurundertakingabusinessactivityinArmenia.
41. Arethere anyplans tointroduce Countervailing, Anti-dumping orSafeguards legislation
ormeasures? Ifyes, please elaborate.
227. Armeniahasnoplansatpresenttointroducecountervailing,anti-dumpingorsafeguardsmeasures
orlegislation. Asstated inthethird paragraph ofsection 3.1.5. ofWT/ACC/ARM/1, anyaction in
these directions inthefuture would befully consistent with therelevant WTO provisions.
42. Arethere anyother customs formalities apart from the"pro forma invoice" or"contract"
indicating thespecification, quantity andvalue ofthegoods tobeimported?
228. Asindicated insection 3.1.6. ofWT/ACC/ARM/1, importers must alsocomplete acustoms
declaration.WT/ACC/ARM/2
Page 45
43. What istheprocedure ofgranting acertificate ofquality fortobacco andspirits? What
criteria areapplied indetermining that thecertificate may beissued?
229. Certificates ofquality fortobacco andspirits areissued byArmStateStandard, thenational
certification body. These certificates, which arecompulsory forthese products, aresubject toperiodic
renewal onthebasis ofatechnical examination oftheproducts concerned, andtherelevant certificates
must beproduced atthetime ofimportation. Thecriteria forissuing certificates arespecified inthe
relevant technical standards.
3.1.9. Standards andcertification
44. Please provide details onthenewlegislation being drafted onStandards andCertification.
What istheanticipated timetable foritsadoption andimplementation?
230. Atpresent thesecond versions ofthedraft laws onStandardization andCertification andon
theIdentity ofMeasurements (referred toinWT/ACC/ARM/1 asthelawonProvision ofUnified
Measures) areboth under discussion inParliament. The draft laws areattached tothepresent
submission. Thetimetable fortheir adoption isasyetunclear, butthiswilloccur during thecourse
of1996.
45. Wewould appreciate receiving detailed explanations onthecertification system laws and
technical regulations presently applied inArmenia, and theobligations resulting forforeign
exporters toArmenia. Ofparticular interest would betoknow towhat extent certification is
voluntary orcompulsory, whether italways need tobedone byathird party (certification body)
orifitcanbebased onamanufacturer 'sdeclaration.
231. Please refer totheanswers tothequestionnaire ontechnical barriers totrade, appended toPart I
ofthis submission. Compulsory certification fortheproducts indicated intheanswers tothe
questionnaire istheresponsibility oftheNational Body onStandardization andCertification, although
thisbody isempowered toappoint another third party toundertake certification work. Atpresent,
mutual recognition agreements exist between Armenia andseveral CIScountries, aswell asbetween
Armenia andIran.
46. Please explain how theNational Certification Body, ArmStateStandard, isappointed and
how ittakes itsdecisions.
232. TheNational Body onStandardization andCertification isunder thejurisdiction oftheMinistry
oftheEconomy. Itispresided over bytheState Chief Inspector, whose rights andobligations are
spelled outindetail inArticle 27ofthedraft law. TheNational Body isacollegial body thattakes
decisions bymajority vote.
3.1.10. Sanitary andphytosanitary measures
47. Please provide further details onhow ArmStateStandard deals with sanitary and
phytosanitary measures.
233. TheNationalBodyonStandardizationandCertificationcooperateswiththeMinistriesofHealth,
Agriculture andFood inmatters relating tosanitary andphytosanitary measures. Asstated in
section 3.1.10. ofArmenia ’sMemorandum (WT/ACC/ARM/1), however, Armenia hasnotsofar
developed anyseparate policies orprovisions dealing with sanitary andphytosanitary measures.WT/ACC/ARM/2
Page 46
3.2.2. Export licensing system
48. Please give thereasons fortheimposition ofeach export prohibition orrestriction.
234. Export prohibitions onweapons, components formanufacturing weapons, explosives, nuclear
materials, andconfidential information arejustified onnational security grounds. Export prohibitions
onworks ofartorhistoric interest arejustified ongrounds ofprotection ofthenational patrimony.
Exportprohibitionsonpoisons,narcotics,strongpsychotropicsubstances,anddevicesforopiumsmoking
arejustified ongrounds ofhealth andsafety. Theexport prohibition onused machinery wasputin
place after independence toensure thattheproductive assets ofState-owned enterprises were notsold
abroad without appropriate authorization.
49. Please provide information onexport licensing using theformat provided bythe
questionnaire onimport licensing.
235. Please seetherelevant questionnaire replies attached toPart Iofthesubmission.
50. What arethecriteria forgranting export licences formedicines, liveanimals andplants?
236. Please seetheanswers totheexport licensing questionnaire.
51. Please explain thereason forexempting enterprises with foreign participation ofatleast
30percent from theexport licensing requirements formedicines, liveanimals andplants. This
exemption does notappear tobeconsistent with theearlier statement thatexport licensing isapplied
forreasons ofpublic health andsafety means?
237. This exemption wasinitially conceived asameans ofencouraging foreign investment, butfor
thereason stated inthisquestion, theexemption willbeeliminated bytheendof1995.
3.2.3. Other measures
52. Please explain infurther details how theminimum prices areestablished. Can Armenia
confirm thatonly ferrous andnon-ferrous metals aresubject tominimum prices? Does Armenia
have anyplans toaddproducts tothelistofselected commodities? Does Armenia have anyplans
toeliminatetheseminimumprices?DoesArmeniaintendtointroduceminimumpricesforimports?
238. Armenia confirms thatminimum export prices only apply toferrous andnon- ferrous metals.
Asindicated insection 3.2.3 ofWT/ACC/ARM/1, theminimum prices forexports aredetermined
bythequotations fortherelevant metals ontheLondon Metal Exchange, lessadiscount ranging between
20percentand30percent. These minimum prices willbeeliminated bytheendof1995. Armenia
hasnoplans tointroduce additional minimum prices either with respect toexports orimports.
53. Inthearea ofresearch anddevelopment
Arelegal private orpublic entities entitled tohold ECU orother hard currency which isstrictly
dedicated forjoint R&TD activities, inappropriate bank accounts inArmenia?
Areresearch equipment orfinancial means which arededicated forjoint R&TD subject toany
customs duties, taxation orsurrender requirements?
239. Legal private orpublic entities areentitled tomaintain hard currency accounts inbanks in
Armenia, including inrespect ofjoint research anddevelopment activities. Research equipment orWT/ACC/ARM/2
Page 47
financial resources dedicated tojoint research anddevelopment activities arenotsubject toanycustoms
duties, taxes orsurrender requirements.
54. Does Armenia apply anyVoluntary Export Restraints?
240. Armenia does notapply anyvoluntary export restraints, butasdescribed elsewhere, Armenia
hassigned anagreement with theEUontextiles andclothing thatcould incertain circumstances lead
totheapplication ofsuch measures.
3.3. Export incentives
55. Please provide more details onhow Armenia intends tostimulate exports and, ifpossible,
ontheamount ofmoney involved (inabsolute amounts andasapercentage oftheturnover in
acertain product).
241. Armenia ’sexport development plans focus primarily upon export promotion, through the
provision andencouragement oftraining, andexport marketing information. These plans arenotfar
enough advanced forittobepossible togiveanyindication ofbudgetary outlays thatmight beinvolved
inthese broad-based export stimulation measures.
242. TheGovernment isalsostudying thepossibility ofestablishing arrangements fortherefund
orremission ofduties falling onimported inputs inexport production. Thispolicy hasnotbeen accorded
high priority, inview ofthefactthatrawmaterial imports aregenerally freeofduties.
243. TheGovernment ofArmenia isalsoworking withtheWorld Bank andEBRD onplans toextend
long-term credits toexport-oriented enterprises andtoprovide certain export-related credit guarantees
against theriskofchanges ingovernment policy. These programmes arestillinthedevelopment stage.
Chapter IV:Other Policies Affecting Foreign Trade
4.1. Industrial policy
56. Please explain indetail what isbeing done bytheGovernment tooblige State-owned
enterprises tooperate according tomarket principles .
244. State-owned enterprises areobliged tooperate according tomarket principles because they
areaccorded nospecial monopoly privileges andtheydonotreceive subsidies. Thus, theyarerequired
tofunction inacompetitive environment. Moreover, theGovernment isvigorously pursuing its
privatization policies (please seeanswers below toquestions onprivatization), inthecourse ofwhich
State enterprises areliquidated iftheycannot generate positive cashflow andbesoldasgoing concerns.
57. Please indicate inmore detail what subsidies toindustry stillexist. section 4.1.refers to
firms engaged inmilitary production. What steps aretheauthorities taking towards theconversion
ofthese industries into civilian factories?
245. The subsidies tofirms engaged inmilitary production referred toinsection 4.1of
WT/ACC/ARM/1 arenolonger being given. There isnointention atthepresent time toconvert these
production facilities intocivilian factories. Noother subsides areprovided toindustry.WT/ACC/ARM/2
Page 48
58. Please provide details ontheanti-monopoly andbankruptcy legislation currently under
preparation. What istheanticipated timetable foradoption andimplementation ofthislegislation?
246. TheParliament ofArmenia adopted theLaw on“Bankruptcy ofEnterprises andIndividual
Entrepreneurs ”on15June 1995 (attached). Thelawestablishes procedures fordeclaring bankruptcy
(insolvency), forpreventing possible insolvency, forrestructuring insolvent enterprises, andforselling
assets ofinsolvent enterprises. Thelawcreates alegal basis forcompulsory liquidation orrestructuring,
aswellasforthecompulsory termination ofindividual entrepreneurs ’activities. Mention should also
bemade oftheLaw onPledge Collateral (attached), passed byParliament atthesame time asthelaw
onbankruptcy. This lawdeals with rights oflenders intheevent ofloan default, established through
collateral.
247. Thedraft Law on“Competition andMonopolistic Activity Restriction Commodity Market ”
isunder theconsideration oftheParliament andtheexpectations arethatitwillbeadopted during the
course of1996. Theoriginal draft ofArmenia ’scompetition lawisbeing substantially revised.
59. Does Armenia intend tojoin theCivil Aircraft Code and afuture multilateral steel
agreement?
248. Armenia does nothave current plans tojointheCivil Aircraft Code. Astopossible membership
ofamultilateral steel agreement, thiswould depend, firstly, onwhether such anagreement comes into
being, andsecondly, ontheprovisions ofsuch anagreement inthelight ofArmenia ’snational interests.
4.2. Agricultural policy
60. Please provide more information about thestructure ofagriculture, itsdistribution system
(input andoutput); supporting services andtheinfluence ofthegovernment asregards thecredit
system inagriculture orbymeans ofthe"strategic (public) enterprises".
249. Followingtheabruptfallinindustrialoutputimmediatelyafterindependence,agriculturaloutput
hascome torepresent asmuch as50percentofnational income inrecent years. There wasasevere
drop inagricultural output in1990. However, after thesuccessful privatization ofagricultural land,
beginning in1991, thesituation gradually improved andbecame more stable. In1994, some 54per
centofagricultural output wasattributable totheplant growing sector, and23percenttothelivestock
sector (mainly cattle). Approximately 95percent ofagricultural output emanates from theprivate
sector.
250. Farmers areatliberty todetermine their own output mix. Asfarasthedistribution ofoutput
isconcerned, farmers arealsofreetodetermine towhom they willsell, andprices arenotregulated
inanyway. Aspointed outinsection 4.2ofWT/ACC/ARM/1, some farmers arestillusing partof
their output topayforinputs supplied byagricultural enterprises.
251. Ontheinput side, theenterprise ArmAgroService isthemain supplier ofsuch inputs asfuel,
lubricants,andagriculturalmachineryandequipment.TheenterpriseArmProsperityisthemainsupplier
offertilizers andchemicals, anddelivers maintenance andtransportation services. These enterprises
have private equity participation of20percent, andareslated forfullprivatization in1996. Inthe
meanwhile, theenterprises enjoy nospecial privileges, andother suppliers arefreetoenter themarket.
TheState enterprises ArmWaterConstruction andArmWaterReservoir areresponsible forsupplying
andmaintaining water supplies. Theenterprise ArmWaterConstruction willbeprivatized, butnoplans
exist atpresent toprivatize ArmWaterReservoir.WT/ACC/ARM/2
Page 49
252. While markets remain poorly developed, andfarmers face shortages ofcredit andworking
capital, poor infrastructure, andalack oftechnical expertise ofvarious kinds, theexport prospects
oftheagricultural sector remain poor. Moreover, there iscurrently noinsurance system forcovering
agricultural risks, such asfrosts anddroughts. Inthemedium andlong-term, however, when these
kinds ofdeficiencies areattended to,Armenia should beabletoexport various agricultural commodities
successfully, inparticular fruit andvegetables.
253. Atpresent, theGovernment does notextend anycredits orcredit guarantees totheagricultural
sector. Aspointed outearlier, farmers receive nodirect subsidies. Indirectly, however, farmers have
benefited from indirect subsidies onwater andelectricity supplies. Theindirect subsidies willbe
eliminated bytheendof1995, with theintroduction offullcostrecovery pricing forthese amenities
(please seesection onagriculture inPart Iofthissubmission --paragraph 41).
61. Can Armenia provide more detailed information onthe‘indirect subsidies ’referred to
insection 4.2?
254. Please seethereply totheprevious question.
62. More information isneeded about theconsequences of,andtheneed for,humanitarian
aidinthefuture.
255. Humanitarian aidwill still beneeded forsome years tocome. Increasingly, however,
humanitarian aidisbeing targeted tospecific vulnerable population groups. Aseconomic conditions
improve, theneed forthisassistance willbecome less.
63. Alistwith alltariff andnontariff measures inagriculture attariff-line level isneeded,
aswell asinformation ontheexport licensing system anddirect andindirect domestic support
measures expressed inAMS.
256. Please seethetariff schedule submitted with Armenia ’sMemorandum (WT/ACC/ARM/1) for
tariff rates affecting agricultural products. Nonon-tariff measures affect trade inagriculture. All
information onimport licensing (see, inparticular, theanswers totheimport licensing questionnaire)
andimport andexport prohibitions hasbeen provided inresponse toprevious questions. Armenia ’s
export licensing regime isexplained inthequestionnaire onexport licensing appended toPartIofthis
submission. Aspreviously noted, with theelimination ofsubsidies onelectricity attheendof1995,
andonwater during thecourse of1996, Armenia willnolonger maintain anydirect orindirect domestic
support measures. Theonlyexception tothisistheprovision ofbasic support services, such astraining
andtechnical support, which were referred toearlier. ItisArmenia ’sunderstanding thatsuch measures
areexempted from domestic support reduction commitments under theUruguay Round Agreement
onAgriculture.
64. Please indicate any possible difficulties inapplying theAgreement onSanitary and
Phytosanitary Measures.
257. Aspreviously noted, Armenia hasnotyetdeveloped anynorms thatspecifically address sanitary
andphytosanitary measures. Asthisisdone, therelevant provisions andprocedures willbeconsistent
with theWTO Agreement onSanitary andPhytosanitary Measures.WT/ACC/ARM/2
Page 50
65. Can Armenia bemore specific onthematters which will becovered bytheLaw on
“Agricultural Policy ”?When isitexpected thatthisdocument willbeavailable toWTO members?
When isitexpected that thetwoState enterprises referred toinsection 4.2willbeprivatized?
258. Anerror wasmade insection 4.2ofWT/ACC/ARM/1 inreferring tothepreparation ofa
lawonagricultural policy. What was, ineffect, under preparation atthattime wasanagricultural
programme thatforms partofArmenia ’seconomic development programme fortheperiod 1996 to
2000. This programme consists basically ofastatement oftheGovernment ’sexpectations ofhow the
agricultural sector willdevelop during thenextfiveyears, aswellasanindication oftheGovernment ’s
policies affecting agriculture. Asindicated intheMemorandum, these policies willbeconfined to
theprovision oftraining, technical support, andextension services. Asindicated above, theState
enterprises referred toinsection 4.2oftheMemorandum now have 20percent private equity
participation, andwillbefully privatized in1996. Mention should alsobemade ofanumber ofongoing
projects intheagricultural sector, which theGovernment believes willmake auseful contribution to
thedevelopment ofthesector; theWorld Bank isinvolved inalarge irrigation project, theEBRD is
supporting aproject designed todevelop wholesale markets intheagricultural sector, andTACIS is
assisting with theestablishment ofanAgricultural Cooperative Bank.
4.3. Financial, budgetary andfiscal policy
66. What subsidies stillexist inproduction andinconsumption? How does Armenia intend
tophase outthese subsidies? What isthetime-frame forthis?
259. Aspreviously indicated, itisnotthepolicy oftheGovernment ofArmenia toprovide production
subsidies toenterprises orindividual entrepreneurs. Theonlyremaining production subsidies arethose
thatbenefit users ofwater andsubsidized energy, butthese subsidies willallbeeliminated bytheend
of1996. Consumption subsidies alsoarise onthesame items forhousehold users, andthese willalso
beremoved within thesame time-frame.
67. Inthisparagraph itisstated that"amajor contribution tolower government expenditure
issubsidy reduction". The statistical data supplied inAnnex 2tothememorandum indicate
indeed areduction intotal expenditure from 79.7 million USdollars in1993 to61.2 million US
dollars in1994. However, these data also indicate anincrease ofsubsidies expenditures from
11.4 million dollars in1993 to20.3 million dollars in1994. Please clarify this apparent
contradiction.
260. Theriseinsubsidy expenditures in1994 canbeaccounted forbythecontinuing useof(mainly)
consumption subsidies atthattime. Asprices ofparticular commodities were being liberalized,
particularly bread, theGovernment attempted tocushion poorer consumers byincreasing subsidies.
Thus, until thedecision toremove these subsidies onmajor items entered intoforce, expenditures tended
torisewith theprices ofthecommodities orservices concerned. Asstated previously, thisquestion
isnolonger relevant asallsubsidies have been removed orwillshortly beremoved.
68. What aretheresults todate ofthestabilization programme launched in1993?
261. Please seetheinformation provided inreply toquestion number 6ofthissection ofthe
submission.
69. Please provide details about thelaws onthebanking sector.
262. Please seesection 4.10.2 ofWT/ACC/ARM/1 andthematerial onthebanking sector inPart I
ofthissubmission (paragraphs 73to76).WT/ACC/ARM/2
Page 51
70. Onpage 17oftheMemorandum itisstated thattheCentral Bank ofArmenia "refinances
credits". However, itisnotclear how thissystem willwork. Please elaborate and, ifpossible,
supply anexample ofhow thissystem functions andwhat benefit would result foranindividual
exporting company.
263. TheCentral Bank ’srefinancing mechanism isameans ofcontrolling liquidity intheeconomy
viatheuseofcredit auctions inwhich thecommercial banks participate. Thesystem isanimprovement
ontheprevious arrangements involving direct financing, butislesssatisfactory thanregular open market
operations bytheCentral Bank. Asthefinancial system andtheeconomy ingeneral strengthen, it
willbepossible fortheCentral Bank torelyonopen market operations tocontrol themoney supply.
Thus, thecredit refinancing mechanism isamacroeconomic management toolandhasnothing todo
directly with theaccess offirms tocredit
4.4. Foreign exchange andpayments system
71. When does Armenia anticipate being inaposition tomove tofullcurrent account
convertibility?
264. Armenia hasmoved tofullcurrent account convertibility.
72. Atpresent, Armenia maintains an"exchange restriction" under Article XIV IMF. Please
supply afulldescription ofalltherestriction arrangements Armenia currently retains, e.g.,
arrangements inconsistent with Article VIII sections 2,3,and4IMF, asummary oftheSystematic
Transformation Facility andanexplanation ofwhyArmenia considers thatthere arenosignificant
trade effects (orpotential trade effects) caused bythese restrictions.
265. These restrictions were introduced only todeal with payments difficulties encountered with
other FSU countries. Their elimination isacondition oftheESAF loan thatArmenia isnegotiating
with theInternational Monetary Fund. theSystemic Transformation Facility wasacredit operation
conducted with theIMF in1995.
4.5. Foreign investment policy
73. Please provide asummary ofthe1994 Law onForeign investments.
266. Please seesection 4.5ofWT/ACC/ARM/1, which summarizes themain provisions oftheLaw
onForeign Investments. Thelawwasappended totheMemorandum.
74. Please provide some detailed figures onthelevel offoreign investments inArmenia.
267. Please seetheanswer inparagraph 4ofthissubmission. Unfortunately, disaggregated figures
onforeign direct investment areunavailable.
75. Thememorandum notes that, forforeign enterprises andcertain joint ventures, allprofits
arefree oftaxes thefirst twoyears, andafter that, aprofit taxischarged at70percent ofthe
fullrate. Please, elaborate onthetaxsystem onprofits (e.g.: what isthenormal taxrateonprofits?
Isourunderstanding correct that foreign companies willalways paylower taxes?).
268. There aredifferent rates ofprofit taxation depending onthesizeofenterprise profit (ranging
from 12-30 percent). Foraforeign investor there arecertain privileges which were mentioned in
section 4.5ofArmenia ’sMemorandum (WT/ACC/ARM/1). Itiscorrect that under present
arrangements, foreign enterprises enjoy anopen-ended taxconcession.WT/ACC/ARM/2
Page 52
76. Section 4oftheLaw onForeign Investments lays down conditions governing Foreign
Investments. Inparticular Article 14foresees that legislation forbids access tocertain sectors of
activity. Which sectors areforbidden toforeign investors, inparticular inthearea ofservices?
What arethesectors inwhich foreign investors must obtain alicence todobusiness? What
conditions areattached totheissuance ofsuch licences? Arethese discriminatory ordothey take
theform ofquantitative restrictions?
269. Pleaseseeparagraph31ofthepresentsubmissionfortheanswertothisquestion.Allinvestment
restrictions areapplied onanon-discriminatory basis asbetween national andforeign investors.
77. Article 19ofthesame lawforesees future regulations ontheregime applicable toforeign
investors intheareas ofacquisition ofrealestate andnatural resources. Have such regulations
been drafted orpassed intolaw? Under what conditions canaforeign investor acquire realestate
andnatural resources? Onwhat terms canthese berented (Article 20).
270. According toexisting Armenian law, foreign investors donothave aright topurchase land.
Ownership rights arerestricted toproperty andassets ontheland, andthelanditself canonly berented.
Theacquisition ofownership rights inrespect ofother natural assets istoberegulated byalawon
concessions, which isstillunder discussion.
78. Article 23ofthesame law: arethere anyexceptions toaforeign investor 'sfreedom to
obtain insurance ortochoose thecompany which hewishes toinsure with?
271. Foreign investors arefreetochoose their insurers.
4.6. Government Procurement
79. Does Armenia intend toregulate public procurement bylaw? Ifso,please provide some
details.
272. Armenia willregulate procurement bylaw. Atpresent, Armenian specialists areworking
incooperation with experts ofUNCITRAL todevelop alegislative package. This effort isbeing
supported with financing from theWorld Bank.
273. Inthemeantime, procurement isregulated byResolution No.67of8February 1995 “OnThe
State Procurement Order of1995 ”(attached). Theregulation pertains only toprocurement in1995,
followingthepreviouslysetpatternofcoordinatingprocurementneedsonanannualbasis.Theresolution
contains aseries ofappendices setting outthenature ofgoods andservices tobeprocured, the
governmental authorities entitled toprocure, themost significant goods andservices tobeprocured,
thegoods andservices thatwillnotbeprocured through tenders (irrespective ofthevalue ofthe
purchase), therules fordevising procurement orders, therules forsigning procurement agreements,
andthesizebyvolume ofanticipated procurement needs for1995.
274. Asnoted insection 4.6ofWT/ACC/ARM/1, procurement inexcess ofavalue ofUS$50,000
issubject tocompetitive tender. Exceptions tothisrulecontained inAppendix 3-1toResolution No.67
include such items aselectric energy, various health services training andeducation, geological
exploration, television broadcasting, water supplies andsewerage. Inthese cases, asforbidsofless
than US$50,000, procurement orders areplaced directly with suppliers.WT/ACC/ARM/2
Page 53
80. What factors will betaken into account inmaking procurement decisions? How do
Government purchasing entities decide from whom tobuy? How dothey choose between foreign
anddomestic sources ofsupply?
275. Please seeprevious reply. Forprocurement contracts notsubject tobidding, theresponsible
government agency willmake adetermination astothemost suitable source ofsupply, which may
bedomestic orforeign. Forprocurement contracts based ontendering, both national andforeign
enterprises areentitled tobidonequal terms.
81. Does Armenia intend toparticipate intheGovernment Procurement Agreement?
276. TheGovernment ofArmenia hasnotreached adecision onthismatter.
82. Doforeign enterprises currently receive thesame treatment asArmenian enterprises as
faraspublic procurement isconcerned?
277. Foreign enterprises arenotsubject tolimitations withrespect topublic procurement inArmenia.
They receive equal treatment toArmenian enterprises.
83. Could theArmenian authorities provide alistofthegovernment entities which fallwithin
thescope ofparagraph 4.6.andindicate their administrative level ofauthority (i.e.central, regional
ormunicipal)?
278. Please refer toAppendix 2ofResolution No.67of8February 1995, which listsallauthorized
procurement bodies.
84. Could theCommission receive some further information ontheregime introduced in1995
fortenders inexcess ofUS$50,000? Isthere anypublication ofsuch tenders andifsoinwhich
periodical? What istheevaluation criteria foreseen insuch new regime?
279. Please seereplies toimmediately preceding questions. Tender announcements aremade in
official periodicals oftheGovernment ofArmenia. Themain criteria forselecting bids include the
prices, thequality oftheproducts orservices offered, conditions ofpayment, andterms andconditions
ofdelivery.
85. Could theArmenian authorities provide some information with respect tothepurchasing
procedures followed byArmcontract when procuring onbehalf ofgovernment entities?
280. Under thenewapproach toprocurement introduced in1995, Armcontract enjoys nospecial
rights orprivileges. Armcontract canparticipate inprocurement activities under thecommon rules.
Entities authorized toprocure may decide tousetheservices ofArmcontract, may procure ontheir
own behalf (always subject toapproval form theMinistry oftheEconomy), ormay useanyother
procurement agent.
86. Could theCommission receive alistofState-owned enterprises inArmenia andsome initial
information regarding theprocurement procedures followed bysuch entities when they purchase
fortheir own consumption?
281. According toavailable figures, there aresome 2,650 medium andlarge-scale enterprises in
Armenia, ofwhich alittle over 1,600 areState-owned, 660arepartially privatized, 40areprivatized,
170 areprivate sector joint ventures with foreign equity participation, andabout 140 arefully
foreign-owned enterprises. There aresome 4,500 small-scale enterprises inArmenia. Over 15,000WT/ACC/ARM/2
Page 54
soleentrepreneurs areregistered, butitisunclear what proportion ofthese iseconomically active.
Please note thatthese figures aresubject toverification. State-owned enterprises make their own
purchasing decisions intheopen market, independent from anygovernmental guidance.
4.7. Privatization andState-trading enterprises
87. What mechanism does theGovernment useto"ensure thatthemany enterprises remaining
inthepublic sector arefully accountable torigours ofthemarket" (section 4.7)? Can Armenia
provide anassurance thatState enterprises willoperate inaccord with Article XVII oftheGATT
andtheWTO Understanding ontheImplementation ofArticle XVII?
282. Please seeprevious answers referring totheremoval ofsubsidies toenterprises andthecreation
ofamarket-oriented economic environment. TheGovernment ’sprivatization programme isalsomaking
acontribution tothese objectives, asmore andmore enterprises areremoved from State ownership.
Asexplained inparagraphs 30and31ofthesubmission, there iseffectively noState-trading inArmenia.
88. What percentage ofindustry isintheprivate sector andwhat plans dotheauthorities
have forfurther privatization? Explain theobstacles toprivatization referred toinsection 2.1.3,
par. 1.
283. Thefirst paragraph under section 2.1.3. ofWT/ACC/ARM/1 refers toobstacles toprivate
sector development, notobstacles toprivatization. With theremoval ofpolicy-induced obstacles to
private sector development (i.e.theelimination ofexcessive government intervention inmarkets), the
mainobstaclethatremainsisprobablythelackofphysicalandhumaninfrastructure.Theseshortcomings
canonly beovercome through time, against abackground ofsound economic policy andincreasing
levels ofinvestment.
284. Asfarastheprivatization programme isconcerned, theGovernment remains fully committed
toprivatization, andthepace ofprivatization isdictated only bypractical considerations relating to
theprocess itself. BytheendofJuly 1995, 1,093 small-scale enterprises hadbeen privatized. The
latest privatization targets fortherestof1995 callfortheprivatization of3,000 small-scale enterprises
between August andDecember. Progress hasbeen slower with medium andlarge-scale enterprises,
where only 10enterprises hadbeen fully privatized byJune 1995. However, progress with medium
andlarge scale enterprises issettoincrease sharply, with atarget ofanadditional 700enterprises by
theendof1995. Theyear-end target forprivatizing unfinished construction sites isfor600such sites
tohave been sold. Inaddition, theGovernment hasselected 10critical loss-making enterprises tobe
placed inarestructuring programme. Under theprogramme, enterprises thatcangenerate apositive
cash flow willbeprivatized, andthose thatcannot willbeliquidated.
89. According totheMemorandum, some 65percent ofproductive assets currently held by
theState willremain under State control until atleast 1997. Does Armenia have anyplans to
privatize this65percent aswell? Ifso,how much willbeprivatized andwhat istheanticipated
timetable?
285. Thereference to65percent ofproductive assets, which would remain under State control
in1997, referred toallassets intheeconomy, including basic infrastructure, andwas based on
projections from the1994 privatization programme. Thevastbulk ofindustrial enterprises willbe
privatized bytheendof1997. Privatization willnot,however, extend tostrategic industries such as
armaments, certain mining, metallurgical andenergy-related industries, andthebasic transport network.
Moreover, asprivate investment inindustry andtheservices sector picks up,theshare ofthepublic
sector intotal output willfalleven further.WT/ACC/ARM/2
Page 55
90. How successful hadthevoucher privatization programme been todate? Forexample,
what hasbeen thepercentage take-up bythepublic?
286. Thevoucher distribution programme for1995, which wascompleted inMarch, isregarded
ashaving been largely successful. Each citizen ofArmenia hadtheright toreceive onevoucher.
Ofthe3.7million vouchers made available, some 3.2million (or86percent) have been taken up.
Vouchers were initially valued at10,000 Drams, butwere subsequently doubled to20,000 Drams.
Thevouchers were discounted toaround 85percent oftheir face value inthesecondary market.
Vouchers maybeused fordirect purchase ofsmall-scale assets, inauctions formedium andlarge-scale
enterprises, indirect trade andstreet sales, andforinvesting through investment funds.
91. Please provide more details ontheauctions. How dothey operate?
287. Two kinds ofauctions operate, oneformedium andlarge-scale industries andtheother for
small-scaleindustries.Inthecaseofmediumandlarge-scaleenterprises,theauctionfunctionsessentially
asanoffer forsubscription toshares orblocks ofshares inanenterprise. Theprice oftheshares offered
isindicated before-hand bytheGovernment. Then value atsaleoftheenterprise isdetermined by
theamount ofshares purchased bythepublic. Ifmore subscribers buyshares thantheamount indicated
bytheGovernment ’svaluation oftheenterprise, thentheenterprise willhave avalue greater thanthat
placed upon itattheoutset. Aslongas25percentoftheshares ofanenterprise offered forprivatization
aretaken up,theenterprise isconsidered sold. This isnotaclassic kind ofauction, butitfacilitates
privatization andpermits theGovernment todivest itself ofassets atlessthanmarket value. Thesecond
kind ofauction isamore classical kind, with small enterprises simply being offered forsaletothe
highest bidder.
92. Arethere anyrestrictions onforeign investors wishing toparticipate intheprivatization
programme?
288. There arenorestrictions onforeigners participating intheprivatization programme.
93. DotheState-trading companies make their purchases andsales inamanner consistent
with commercial considerations according toArticle XVII? Ifso,how isthisensured?
289. Aspreviously mentioned, State-owned companies arenotState-trading companies inArmenia,
according tothedefinition ofState trading intheUnderstanding ontheInterpretation ofArticle XVII
oftheGeneral Agreement onTariffs andTrade 1994.
94. Does Armenia have anyimport monopolies?
290. Armenia hasnoState-mandated import monopolies, although theimportation ofnatural gas
inanatural monopoly.
95. Please provide details ontheanticipated anti-monopoly andinsolvency laws.
291. Please seetheanswer provided inparagraphs 246and247above.
96. Please provide details onhow thegovernment intends toensure that theprivatized
enterprises willbefully accountable tomarket principles.
292. Please seetheanswer provided inparagraph 244.WT/ACC/ARM/2
Page 56
97. Arethemarkets inArmenia free ofbarriers totheentry andexitofenterprises? How
does thegovernment seek toensure that barriers donotexist?
293. Armenian markets arelargely freeofanygovernment-mandated barriers toentry andexit,
theexceptions being inthose activities reserved fortheState which were mentioned inparagraph 31
ofthissubmission. Itismore difficult todetermine what entry andexitbarriers might result from
private sector behaviour oraconfluence ofparticular circumstances. Asfarasbarriers induced by
theprivate sector areconcerned, theGovernment willuseitscompetition laws, when these areinplace,
tocounter anti-competitive behaviour.
4.8. Price controls
98. Please describe thefunctioning andthefinancing oftheremaining price control system
inmore detail. Forinstance when, andforwhat products, willminimum ormaximum prices
apply?
294. ArmeniaeliminatedpricecontrolswitheffectfromJune1995,withtheexceptionoftheminimum
export price established forcertain ferrous andnon-ferrous metals. This measure willbephased out
bytheendof1995 (please refer toparagraph 238above).
99. Does theArmenian government intend tophase outthese price controls? Ifso,when?
295. Please seeprevious reply.
100. Please explain thereason why "salt" iscurrently subject toprice control.
296. Please seethereply tothelastquestion butone.
4.10. Trade inServices
102. Please produce acomprehensive memorandum onitstrade inservices and itspolicies
relating thereto which replies atleast tothefollowing questions.
297. Please refer totheservices section inPart Iofthissubmission (paragraphs 69to98).
4.10.1. Overview
103. Concerning cross-border supply itisstated that theGovernment does notmaintain any
monopoly orexclusive supplier rights services that could betraded across thefrontier. Could
Armenia please explain theinterpretation ofwhat could orcould notbesupplied under mode 1?
298. Since Armenia ’sMemorandum (WT/ACC/ARM/1) wassubmitted, theGovernment hassigned
anexclusive supply agreement forcertain basic telecommunication services, which includes cross-border
delivery ofthese services (please seeparagraphs 78and79). Intheinsurance field, anyjuridical person
wishing tosellinsurance inArmenia must beregistered asanenterprise orsoleentrepreneur, justas
anyother firm orbusiness person isrequired todo,butthisdoes notprevent Armenian residents from
contracting insurance services abroad. Thesituation issimilar with banking, where retail banking
inArmenia requires acommercial presence, butnothing prevents Armenian residents from contracting
banking services abroad. Itisnotentirely clear whether thepossibility ofcross-border supply of
insurance andfinancial services, where theconsumer isnotrequired totravel abroad tocontract the
services, should count asmode 1ormode 2transactions.WT/ACC/ARM/2
Page 57
104. Astocommercial presence, what utilities areexplicitly inthe public domain andthus
supplied under restricted market access?
299. Noutilities areexplicitly ormandatorily inthepublic domain.
105. What aretherules ofapproval ofnatural persons supplying services?
300. Please seeparagraph 72above.
4.10.2 Financial Services
106. Does Armenia intend tosubmit asubstantial offer onfinancial services intheframework
oftheGATS, binding liberal market access conditions andnational treatment guarantees onan
MFN basis forforeign financial institutions?
301. Armenia willbewilling tomake agood offer onfinancial services, including inrespect of
national andmost-favoured-nation treatment.
Asafirst step, Armenia should specify thesubsectors itwould beprepared tobind, as
wellasanyreservation onmarket access ornational treatment itintends tointroduce initsfuture
schedule ofcommitments. Inorder toevaluate themeaning ofnational treatment guarantees
and thescope ofmarket access commitments, itwould bevery helpful toreceive adetailed
description oftheArmenian banking, securities andinsurance market, inparticular asregards
thebasic legal conditions.
302. Armenia would prefer toaddress thespecifics ofitsfinancial services offer when itmakes
itsoverall offer onservices.
107. Insectorswherereformsarenotyetconcluded(e.g.insurance),wouldArmeniabeprepared
tousethepossibility ofphase-in arrangements? Armenia could thus take additional commitments,
providing fortheinclusion offuture reforms into itsschedule once they areadopted.
303. Armenia would bewilling toconsider phase-in arrangements initsservices offer.
108. In4.10.1(overviewofpoliciesaffectingtradeinservices),Armeniastatesthat"manyservice
industries remain largely unregulated, particularly inrelation tothedistinction between foreign
anddomestic supply. Aspolicies aredeveloped, thesituation described below may change". Can
Armenia setoutwhat these announced changes may look like? Could it,forexample, lead to
alessfavourable treatment offoreign financial institutions?
304. Itisdifficult topredict thenature ofregulatory structures inindustries that arelargely
unregulated, butArmenia does notintend tousetheneed todevelop regulations asapretext forproviding
less-favourable treatment toforeign service suppliers.
109. Asregards commercial presence, thememorandum simply states thattheright toestablish
isguaranteed through the1994 Law onForeign Investments which provides non-discriminatory
access forforeign service suppliers. Does thiscover allforms ofcommercial presence, including
theestablishment ofwholly-owned subsidiaries, acquisition ofshares byforeign institutions and
direct branching?
305. Therighttonon-discriminatoryaccesstoArmenia’smarketthroughcommercialpresencecovers
allofthe20forms ofenterprise contemplated intheLaw onEnterprises andEntrepreneurial Activities.WT/ACC/ARM/2
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110. CanArmeniaconfirmthatcross-bordersupplyandconsumptionabroadofbankingservices
ispossible without anylimitations?
306. Please seeparagraph 298above. Retail banking inArmenia canonly beundertaken byresident
banks.
111. Amore detailed description ofrecent reforms would bevery helpful.
307. Please seeparagraphs 73to76inPart Iabove.
112. Please clarify reserve requirements inbanking.
308. Please seeparagraphs 73to76inPart Iabove
113. Inbanking, how many foreign companies areestablished today inArmenia? According
tothetext, foreign andlocal companies area given equal treatment. Does "local" mean "domestic"?
Isbanking inanyrespect under local/regional regulation? Does theMFN principle apply to
thissector aswell?
309. There arefourforeign non-resident banks operating inArmenia andoneforeign resident bank.
“Local ”inthiscontext wasintended tomean nationally-owned asopposed toforeign-owned banks.
Banking isnotunder anylocal orregional regulation. TheMFN principle applies inthissector.
114. The memorandum does notcontain anyspecific information with regard tosecurities
activities. Armenia should provide further details about theexisting regime inthesector andits
possible binding intheGATS.
310. Please seeparagraph 74onthepermitted sphere ofactivities ofresident banks, which includes
securities trading. Securities markets arerelatively undeveloped inArmenia, which iswhy the
commercial banks predominate insecurities markets. Armenia hasnotyetestablished astock exchange.
Noimpediments exist forfinancial institutions wishing toenter thesecurities business inArmenia.
4.10.3. The insurance sector
115. Can Armenia confirm that cross-border supply and consumption abroad ofinsurance
activities ispermitted notably asregards maritime, airand transport insurance, aswell as
reinsurance?
311. Please seeparagraph 298above. Consumption abroad ofinsurance isnotsubject toany
restriction, butaprerequisite ofthesaleofinsurance inArmenia isregistration asajuridical person.
116. Can Armenia provide more details about thedraft lawwhich isunder consideration?
312. Work isproceeding onlegislation inthisarea within theMinistry ofFinance, butasyetno
draft isavailable.
117. Ininsurance, how many foreign companies areestablished inArmenia today?
313. Please seeparagraph 77above. Three companies have foreign participation.WT/ACC/ARM/2
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118. According tothetext, foreign andlocal companies aregiven equal treatment. Does "local"
mean "domestic"? Isinsurance inanyrespect under local/regional regulation? Does theMFN
principle apply tothissector aswell?
314. “Local ”refers tonational ownership. Allregulation ofinsurance iswith theCentral
Government. TheMFN principle applies tothissector.
4.10.4. The telecommunication sector
119. Itisstated thatthetelecommunications system isowned bytheState. Does thisrefer only
totechnical systems interms ofinfrastructure? Isthere apublic monopoly forsupplying services
aswell? What kind ofagreements have been signed with foreign companies asfarasservices
areconcerned?
315. Please refer toparagraphs 76and79inPart I.
4.10.5 Other sectors -professional services
120. Thememorandum does notcontain anydetailed information about theregime applying
toprofessional services, apart from onesingle statement in4.10.1, according towhich professionals
wishing toexercise their profession inArmenia must beapproved andregistered.
316. Please refer toparagraphs 80and81above. This sector remains largely unregulated atpresent.
121. Armenia isrequired tosubmit adetailed description ofitsregulations applying inthe
field ofprofessional services. Areforeigners granted freemarket access andnational treatment?
Ifnot, which arethespecific limitations?
317. Foreigners aregranted freemarket access andnational treatment inmost professional services
atthepresent time
122. Does Armenia intend tosubmit asubstantial offer onprofessional services intheframework
oftheGATS, binding liberal market access conditions andnational treatment guarantees onan
MFN basis forforeign service suppliers?
318. Armenia isfavourably disposed tomaking agood offer inthearea ofprofessional services.
4.11. Protection ofintellectual property rights
123. Armenia should produce acomprehensive memorandum ontheprotection ofintellectual
property rights initsterritory which replies, atleast, tothefollowing questions.
319. Please seereplies toquestions onprotection ofintellectual property rights inparagraphs 45
to68inPart Iofthesubmission, together with theanswers tothequestions thatfollow.
124. When willArmenia beinposition tofully implement theWTO provisions onTRIPS
(section 4.11)?
320. TheGovernment ofArmenia isaware thatasignificant legislative programme isnecessary
inorder toencompass alltheintellectual property rights covered bytheTRIPS Agreement. Armenia
would propose tocomplete such aprogramme within nomore than three years following itsWTO
accession.WT/ACC/ARM/2
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125. HasthedraftLawonTradeMarks,ServiceMarksandAppellationsofOriginbeenadopted
bytheParliament? IsthisActinfullconformity with Articles 15to21oftheAgreement onTrade-
Related Aspects ofIntellectual Property Rights (TRIPs)? Inparticular, arealltherights specified
inArticle 16oftheTRIPs Agreement provided forinArmenia 'strade andservice mark legislation?
321. Asindicated earlier, theDraft LawonTrade Marks, Service Marks andAppellations ofOrigin
hasbeen substituted, pending thecompletion andentry intoforce ofthelaw, byatemporary regulation
ontrademarks andservice marks, contained inResolution No.4of19August 1995. This regulation
isinfullconformity with Articles 15to21oftheTRIPS Agreement, including therights specified
inArticle 16.
126. IsArmenia 'sLaw onPatents infullconformity with Article 27to34oftheTRIPS
Agreement? Armenia 'smemorandum (section 4.11.) refers tothepossibility ofgranting a
non-compulsory licence after four years ofnon-use ofthepatent. CanArmenia explain itscurrent
rules oncompulsory andnon-voluntary licences? Dothese rules comply with theprovisions
ofArticle 31oftheTRIPs Agreement e.g.therequirement that such useonly bepermitted if
theproposed user hasmade efforts toobtain authorization from theright holder, that such use
benon-exclusive; that such xxx benon-assignable; that theright holder bepaid adequate
remuneration, etc.?
322. TheLawonPatents isinconformity withArticles 27to34oftheTRIPS Agreement. Article 16
ofthelawstates thatintheinterests ofnational defence, protection ofpublic order orinanemergency
situation, theGovernment maypermit athird party towork apatent without theagreement ofthepatent
holder, while obliging such licensee toprovide compensatory remuneration tothepatent holder. Any
dispute over theamount ofcompensation istobesettled inthecourts. Theeventuality ofcompulsory
licensing canonly arise ifapatent hasnotbeen worked within four years andafter anattempt has
been made tosign alicence agreement with thepatent holder. Alicence may notbeawarded toa
third party iftheowner ofapatent canestablish thatafailure towork thepatent isattributable tofactors
beyond theowner ’scontrol.
127. Can Armenia explain itssystem ofprotection ofindustrial design, notably inview of
Article 25and26oftheTRIPs Agreement?
323. Industrial designs areprotected under Article 7oftheLaw onPatents, andthese provisions
areconsistent with Articles 25and26oftheTRIPS Agreement.
128. How does Armenia ensure thespecific protection oftextile designs, provided forin
Article 25(2) oftheTRIPs Agreement ?
324. Textile designs arenotexplicitly mentioned inArticle 8oftheLaw onPatents, butthey are
nevertheless covered under thisprovision.
129. Can Armenia explain itssystem ofprotection oflay-out (topographies) ofinternational
circuits? Isitinconformity with Article 35to38oftheTRIPs Agreement? Are there any
registration requirements? Which isthebody responsible forthese matters?
325. Armenia does notyethave legislative protection forthiskind ofintellectual property.WT/ACC/ARM/2
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130. Has theCopyright Law been passed bytheParliament? Istheprotection ofcopyright
andrelated rights inArmenia fully inlinewith Articles 9to14oftheTRIPs Agreement?
326. Asnoted earlier (please seeparagraph 51), Armenia ’sfirst draft ofacopyright lawwas
considered inadequate, andthelawistherefore being redrafted.
131. Can Armenia explain itscurrent administration ofcopyright andrelated rights? Isthe
National Copyright Agency thesole entity responsible forprotecting these rights? How does
thecollection system work? How areforeign right-holders represented?
327. Please seetheprevious answer.
132. Does Armenia 'scopyright legislation provide forrental andlending rights? Who may
enjoy these rights andtowhat extent?
328. Please seetheanswer tothelastquestion butone.
133. Can Armenia explain theprovisions initslegislation concerning theprotection oftrade
secrets andundisclosed information, notably inview ofArticle 39oftheTRIPs Agreement?
329. Armenia hasnotyetdeveloped provisions fortheprotection oftrade secrets andundisclosed
information.
134. ArethereanylegislativeprovisionsinArmeniaontheprotectionagainstunfaircompetition?
Can Armenia explain these provisions?
330. Legislation onunfair competition isstillunder preparation.
135. Which arethecivil and administrative procedures and remedies available toenforce
intellectual property rights? Doforeigners enjoy thesame treatment asArmenian nationals in
thisrespect? Arethese remedies and procedures andpenalties inconformity with Article 42
to49oftheTRIPs Agreement?
331. The civil courts inArmenia arefully empowered toprovide theremedies referred toin
Articles42to48oftheTRIPSAgreement.Civilremediescannotbeorderedasaresultofadministrative
procedures. Foreigners enjoy thesame rights asArmenian nationals inthisarea.
136. Which arethecriminal procedures and penalties available against infringements of
intellectual property rights? Doforeigners enjoy thesame treatment asArmenian nationals in
thisrespect? Are these procedures and penalties inconformity with Article 61oftheTRIPs
Agreement?
332. Remedies against criminal behaviour areavailable under Armenia ’scourts andpenal system.
Foreigners have thesame access tothese remedies asArmenian nationals.
137. DoArmenian judicial authorities have theauthority toorder injunctions orprovisional
measures against infringements ofintellectual property rights, asprovided forinArticles 44and
50oftheTRIPs Agreement? What exact measures arepossible andwhat istheprocedure to
follow? Doadministrative authorities enjoy similar authority?
333. Thejudicial authorities have thepower toorder injunctions orprovisional measures. Article 33
oftheLaw onPatents indicates theareas inwhich remedies may besought through thecourts intheWT/ACC/ARM/2
Page 62
area ofpatent protection. Paragraph 36ofResolution No.4of1995 provides similar provision in
thecase oftrademarks andtrade secrets.
138. Does Armenia already have inplace asystem ofborder enforcement against intellectual
property rights infringements inaccordance with Articles 51to60oftheTRIPs Agreement?
Isso,what except rights arecovered bysuch asystem? Does italsocover goods forexportation
andgoods intransit? Ifnosuch system isinplace, arethere anyplans toadopt it?
334. Thejudicial authorities areempowered totakethekinds ofmeasures envisioned inArticles 51
to60oftheTRIPS Agreement, butnoexplicit provisions have been developed inthisarea.
139. Could Armenia submit copies ofallitslegislation related totheprotection ofintellectual
property rights and asummary ofthelegislation (including, notably legislation onpatents,
industrial designs, trade marks, topographies ofintegrated circuits, geographical indications,
copyright andrelated rights, trade secrets andundisclosed information andtheprotection against
unfair competition)?
335. Available legislation isappended tothissubmission. Themain features ofthislegislation have
been summarized inanswer totheabove questions andthesection onTRIPS inPartIofthissubmission.
Chapter V: Institutional Base forTrade andEconomic Relations with Third Countries
5.1.2. Bilateral free-trade agreements
140. Are Armenia ’splurilateral and bilateral Free Trade Agreements consistent with
Article XXIV oftheGATT? How extensive aretheexceptions tothese arrangements? What
proportions oftrade between theparties arefreeoftariffs andquantitative import restrictions?
Dothese arrangements cover services trade aswell astrade ingoods?
336. Within theframework ofthe1994 Free-Trade Agreement among thecountries ofthe
CommonwealthofIndependentStates(attached),Armenia’splurilateralandbilateralfree-tradeagreements
eliminate duties andother restrictive regulations onsubstantially alltrade between theparties. Armenia
considers thatthese arrangements areconsistent with Article XXIV ofGATT 1994. Itmay benoted
thatatpresent Armenia does notconduct trade with alloftheCIScountries, butinrespect ofthose
countries with which Armenia does trade, Armenia imposes notaxes orbarriers onitsimports and
exports. These agreements donotcover trade inservices.
141. Please explain thepractical consequences ofnot"operationalizing" theFree-Trade
Agreements with Ukraine, Moldova, Kyrgyzstan andTajikistan.
337. Thereason these agreements arenot“operationalized ”isthatlittle ornotrade iscurrently
taking place between Armenia andthese countries. There aretherefore nopractical consequences of
notoperationalizing theagreements.
142. AretheFTAswhetherornotoperationalized,compatiblewithWTO,includingArticleXXIV
oftheGATT? Please justify your response.
338. Please seethereply given inparagraph 336above. Armenia considers thatitsfree-trade
agreements arecompatible with Article XXIV.
143. Please list,with theHSCode where appropriate, theexemptions from duty-free treatment
foreseen intheAgreement with Russia.WT/ACC/ARM/2
Page 63
339. Armenia does notexempt anyimports from orexports toRussia from duty-free treatment.
Russia hasdeveloped alistofexempted goods upon which export taxes may beapplied, butbyvirtue
ofArmenia ’sbilateral clearing agreement with Russia, noexports have been taxed because thevolumes
ofsuch exports have fallen within thequotas established forduty-free treatment. With theforthcoming
elimination ofclearing arrangements (seeparagraph 34above), andtheprogressive removal ofexport
taxes, itisexpected thatbilateral trade between Armenia andRussia willtake place onaduty free
basis inthefuture.
144. Please explain inmore details therelationship between theFTA with Russia andthetrade
andeconomic-cooperation agreements.
340. Theagreement ontrade andeconomic cooperation with Russia provides theframework within
which trade between Russia andArmenia which isnotguaranteed trade (i.e.isincluded onanexception
list)isregulated. Asindicated inparagraphs 336and339above, Armenia does notmaintain any
exception list,andRussia ’sexception listhasnotoperated inpractice because Armenia ’simports from
Russia have been within theestablished quotas forduty-free (i.e. export tax-free) treatment.
145. Does Armenia have anyjoint Commissions foreconomic cooperation orother similar kind
ofmutual cooperation organizations with third countries. Ifthey exist, what istheir function
andhow dothey work?
343. SeveralofthebilateralagreementstowhichArmeniaisapartyenvisageconsultativemechanisms
orcommissions intended topromote further cooperation among theparties. There isaJoint Committee
with theEU,established within theframework ofthe1989 Trade andCooperation Agreement (signed
bytheSoviet Union). The Joint Committee hasmettodiscuss bilateral cooperation. Asimilar
arrangementoperateswithIran,whichisbecominganincreasinglysignificanttradingpartnerofArmenia
5.1.3. Bilateral clearing arrangements
146. How transparent areArmenia ’sbilateral clearing arrangements (section 5.1.3)? Is
documentation onthese arrangements publicly available? Are these arrangements purely
commercial driven? Are they consistent with WTO rules and principles? How long arethese
arrangements expected tobemaintained?
344. Agreements establishing bilateral clearing arrangements arepublicly available documents.
Asexplained insection 5.1.3. ofWT/ACC/ARM/1, barter agreements were used intheimmediate
post-independence period tomaintain some continuity intrade flows following thedemise oftheSoviet
Union, andalsotoguarantee essential supplies forArmenia. There willnolonger beaneed forsuch
arrangements after 1996, which iswhy they arebeing eliminated. Since thebilateral arrangements
neither discriminate against third parties, norconstitute quantitative restrictions ontrade, itmay be
argued thattheyareconsistent with WTO rules. This issue isrendered moot, however, bythedecision
oftheArmenian Government todiscontinue such arrangements.
Chapter VI: Laws andLegal Acts
147. Where alawislisted asbeing "not available", please provide copies assoon aspossible.
Armenia should atleast provide asummary explanation ofthecontent andeffect ofeach ofthe
laws.
345. Ofthefour laws listed asunavailable inWT/ACC/ARM/1, Armenia would liketopoint out
thatDecreeNo.422of12August1993(item16onpage26ofWT/ACC/ARM/1)isnotincludedbecause
itdeals with clearing arrangements fortheyear 1993 andisofpurely historical interest. Similarly,WT/ACC/ARM/2
Page 64
thedraft Law ofArmenia OnEnterprises with Foreign Capital (item 19)isirrelevant, since ithasbeen
superseded bytheLaw onForeign Investments. Decree No.40of13February (item 14)willbe
included, along with Decree No.474of17September 1993 (item 18).WT/ACC/ARM/2
Page 65
ANNEX 1
LAWS AND LEGAL ACTS
1. Resolution oftheGovernment oftheRepublic ofArmenia #31of21February 1995, On
Regulation Regarding theEstablishment Registration Licence andSuspension ofActivities of
Banks.
2. TheLaw oftheRepublic ofArmenia 10December 1994 OnAmendments andAdditions to
theLaw oftheRepublic ofArmenia ontheValue-Added Tax.
3. TheLaw oftheRepublic ofArmenia ofFebruary 1995 OntheProperty Tax.
4. TheLaw oftheRepublic ofArmenia of30November 1994 OnMaking Amendments in
theLaw oftheRepublic ofArmenia onExcise Tax.
5. TheLaw oftheRepublic ofArmenia of15June 1995 OnPledge Collateral.
6. TheLaw oftheRepublic ofArmenia of15June 1995 OnBankruptcy ofEnterprises and
Individual Entrepreneurs.
7. Draft oftheLaw OnStandardization andCertification.
8. ThelistofProducts Subject toCompulsory Certification intheRepublic of
Armenia.
9. ThelistofNormative Documents oftheSystem ofCertification Devised andActing
intheRepublic ofArmenia Standards ofArmenia.
10. Draft temporary listofGoods Produced intheRepublic ofArmenia andImported
totheRepublic ofArmenia Subject toCompulsory Certification.
11. Draft oftheLaw OnUnification ofMeasures .
12. TheLaw oftheRepublic ofArmenia OnPatents.
13. TheLaw oftheRepublic ofArmenia of8February 1995 OnIncome Tax.
14. TheLaw oftheRepublic ofArmenia of27April OnLand Tax
15. Draft oftheLaw oftheRepublic ofArmenia OnAgrarian State Inspection.
16. TheLaw oftheRepublic ofArmenia of22January 1991 OnPeasant and
Collective Peasant Farms .
17. TheLaw oftheRepublic ofArmenia of29January OnLand Code .
18. TheLaw oftheRepublic ofArmenia OntheMaximum Sizes oftheAllocated Land
Lots.WT/ACC/ARM/2
Page 66
19. Resolution oftheGovernment oftheRepublic ofArmenia #17of17January 1995
OntheProcedure ofGranting Licences forImportation andExportation ofGoods (Works,
Services) intheRepublic ofArmenia.
20. Resolution oftheGovernment oftheRepublic ofArmenia #581of
16December 1994 OnCorroboration oftheTemporary Regulations forAuditing Activities
intheRepublic ofArmenia.
21. Resolution oftheGovernment oftheRepublic ofArmenia #67of8February
1995 OntheState Procurement Order for1995.
22. Resolution oftheGovernment oftheRepublic ofArmenia #36of25May 1994,
OntheRegulation forLicensing theBanking Transaction oftheFinancial Crediting
Enterprises inArmenia.
23.Resolution oftheGovernment oftheRepublic ofArmenia #4of19August 1995 On
theTemporary Regulation forTrade Marks andService Marks.
24.Resolution oftheGovernment oftheRepublic ofArmenia #606 of29December 1994
OnRates oftheExcise Tax.
25.Resolution oftheGovernment oftheRepublic ofArmenia #88of23February 1994
OntheOrder ofSubmitting Statistical Reports Regarding theImportation andExportation
ofServices intheRepublic ofArmenia.
26.Resolution oftheGovernment oftheRepublic ofArmenia #161 of5March 1991 On
theOrder ofExercising Diverse Types ofEconomic Activities ontheTerritory ofthe
Republic ofArmenia.ANNEX 2
STATISTICAL INFORMATION
Structure ofExport andImport in1995-2000
(Million U.S. dollars)WT/ACC/ARM/2
Page 67Product Category Export Import
1995 1996 1997 1998 1999 2000 1995 1996 1997 1998 1999 2000
Prepared foodstuffs, animal and
vegetable products 14.4 18.1 21.72 25.19 28.7 32.1 180.8 205.3 227.9 250.7 273.2 286.9
Mineral products 21.3 26.6 31.9 30.1 30.1 30.1 159.3 180 199.8 219.8 239.5 244.3
Products ofthechemical and
allied industries 15.8 19.7 23.64 27.4 31.2 34.9 24.4 27.5 30.5 33.6 36.6 39.8
Raw hides and skins, leather,
furskins andarticles thereof 1.58 1.97 2.36 2.74 3.12 3.49 0.8 1.3 1.44 1.58 1.72 1.85
Wood and articles ofwood 0.26 0.33 0.4 0.46 0.52 0.58 3.2 3.6 3.99 4.39 4.78 5.16
Textiles and textile articles 17.3 34.6 41.5 48.5 54.8 61.4 11.8 13.3 14.8 16.3 17.7 19.1
Footwear, headgear, umbrellas 18.9 23.6 28.3 32.8 37.4 41.9 0.9 1.1 1.22 1.34 1.46 1.58
Articles ofstone, gypsum,
precious andsemi-precious
stones 94.6 118.3 141.9 164.6 182.6 197.2 23.4 26.4 29.3 32.2 35.2 45.7
Base metals andarticles ofbase
metals 13.4 16.8 20.2 30.3 45.4 68.1 6.4 7.2 7.8 8.58 9.35 14.1
Machinery and mechanical
appliances 43.8 54.5 65.4 77.2 88.0 92.8 67.2 74.9 83.2 91.5 99.7 107.6
Instruments andapparatus 1.3 1.82 2.18 2.52 2.87 3.2 3.2 3.6 3.8 4.18 4.55 7.28
Other products 20.14 12.2 14.67 15.88 16.77 18.03 5.9 6.67 7.4 8.11 8.36 18.1
TOTAL 262.2 328.5 394.2 457.3 521.3 583.8 487.3 550.6 611.2 672.3 732.8 791.4Trade Balance
(1996-2000)
(Million U.S. dollars)WT/ACC/ARM/2
Page 68
1995 95/94 % 1996 96/95% 1997 97/96% 1998 98/97% 1999 99/98% 2000 00/99%
EXPORT 262.8 122.0 328.5 125.0 394.2 120.0 457.3 116.0 521.3 114.0 583.8 112.0
IMPORT 487.3 123.8 550.6 113.0 611.2 111.0 672.3 110.0 732.8 109.0 791.4 108.0
TURNOVER. 750.1 123.2 879.1 117.2 1,005.4 114.4 1,129.6 112.4 1,254.1 111.0 1,375.2 109.7
TRADE
BALANCE -224.5 -222.1 -217.0 -215.0 -211.5 -207.6
CIS Trade byDestination andOrigin
(1995-2000)
(Million U.S. dollars)
Export Import
1995 1996 1997 1998 1999 2000 1995 1996 1997 1998 1999 2000
Russia 50.0 57.0 62.0 67.0 72.0 78.0 127.0 130.1 127.7 126.4 123.5 122.0
Ukraine 4.5 4.9 5.2 5.7 6.3 7.0 4.8 5.1 5.5 6.2 6.8 7.0
Turkmenistan 88,0 89.4 90.9 92.5 95.4 98.8 84.4 88.5 93.4 92.5 96.0 98.8
Georgia 3.2 4.1 5.6 6.9 7.5 9.2 16.0 17.2 18.5 20.1 22.6 25.5Non-CIS Trade byDestination andOrigin
(1995-2000)
(Million U.S. dollars)WT/ACC/ARM/2
Page 69Export Import
1995 1996 1997 1998 1999 2000 1995 1996 1997 1998 1999 2000
Iran 15.2 18.3 22.2 27.6 33.9 42.4 43.4 46.2 49.4 52.1 55.0 57.6
Belgium 32.3 34.1 36.0 38.2 39.1 42.2 10.2 11.4 11.6 12.4 13.8 15.1
USA 0.47 0.51 0.7 0.98 1.3 1.8 95.2 95.0 86.3 75.0 58.0 45.0
Balance ofForeign Trade with CIS Countries in1995 (January-June)
(Million U.S. dollars)
State Foreign trade turnover Export Import Trade balance
Ofwhich
clearingOfwhich
clearingOfwhich
clearingOfwhich
clearing
Russia 98.4 1.3 33.4 1.3 65.0 0 -31.7 1.3
Turkmenistan 74.5 74.1 21.2 20.8 53.3 53.3 -32.1 -32.5
Georgia 15.0 0 0.8 0 14.2 0 -13.4 0
Ukraine 3.3 0 1.4 0 1.9 0 -0.5 0
TOTAL 191.2 75.4 56.8 22.1 134.4 53.3 -77.6 -31.2Balance ofForeign Trade with non-CIS Countries in1995 (January-June)
(Million U.S. dollars)WT/ACC/ARM/2
Page 70
State Foreign Trade Turnover Export Import Trade Balance
Ofwhich
humanitarian aid
USA 51.4 0.6 50.8 48.2 -50.2
Iran 38.1 11.2 26.9 0.1 -15.7
Belgium 15.9 10.8 5.1 0.4 5.7
Italy 15.4 0 15.4 7.0 -15.4
Germany 12.1 5.1 7.0 0.9 -1.9
France 11.9 0.1 11.8 9.2 -11.7
United Arab Emirates 2.9 0.1 2.8 0.1 -2.7
Netherlands 2.7 1.1 1.6 1.1 -0.5
Switzerland 2.3 1.1 1.2 0.9 -0.1
Greece 2.2 0.1 2.1 0.2 -2.0
Ireland 1.6 0.5 1.1 0 -0.6
Denmark 1.3 0 1.3 0.9 -1.3
Romania 0.9 0 0.9 0 -0.9
United Kingdom 0.9 0.1 0.8 0.5 -0.7
Turkey 0.8 0.4 0.4 0 0
Bulgaria 0.8 0.1 0.7 0.1 -0.6
Finland 0.6 0.1 0.5 0.1 -0.4
TOTAL 161.8 31.4 130.4 69.8 -99