RESTRICTED
WORLD TRADE WT/SPEC/14
ORGANIZATION23 October 1995
(95-3220)
Original:  English
DRAFT REPORT OF THE WORKING PARTY ON
THE ACCESSION OF BULGARIA1
1. At its meetings on 5-6 November 1986, and 20 February 1990, respectively, the Council
established a Working Party to examine the applicati on of the Government of Bulgaria to accede to the
General Agreement under Article XXX III, and to submit to the C ouncil recommendations which might
include a draft Protocol of Acce ssion.  It was understood that in its examination, the Working Party
would consider the compatibility of Bulgaria's fore ign trade regime with the General Agreement with
regard inter alia, to the provisions concerning  national treatment, non-disc rimination, State-trading,
subsidies and safeguards.  On 11 April 1995,  the Government of Bulgaria advised that it had decided to
negotiate the terms of accession of the Republic of Bu lgaria to the Agreement Establishing the World
Trade Organization (hereinafter referred to as th e "WTO") under Article XII of the Agreement.  In
pursuance of the decision adopted by the Genera l Council on 31 January 1995, the Working Party on the
Accession of Bulgaria to the GATT 1947 was transformed into a WTO Accession Working Party.
2. The Working Party met on 15-16 July 1991, 12-13 July 1993, 4-5 November 1993,
28-29 March 1994, 7-8 July [and ...November]  1994, 5 and 7 July and ........... 1995  under the
chairmanship of H.E. Mr. E.C. Selmer (Norway).  The terms of reference and the membership of the
Working Party are set out in document L/6667/Rev.2.  WT/L/58.
3. The Working Party had before it, to serve as a basis for its discussion, the Memoranda on
Bulgaria's Foreign Trade Regime (L/6364 and Corr.1  and Add.1, L/6512, L/6880 and Add.1- 5, L/7244)
and the questions submitted by members  contracting parties  on the foreign trade regime of Bulgaria
together with the replies of the Bulg arian authorities ther eto (L/6867, L/7309/Rev.1,
L/7309/Rev.1/Add.1  and WT/SPEC/12 ).  In addition, the Government of the Republic of Bulgaria made
available to the Working Party the following material:
* Constitution of the Republic of Bulgaria, adopted in 1991
                                          
    1Proposed revisions to document Spec(94)20/Rev.1 ar e shaded; proposed deletions are crossed out.WT/SPEC/14
Page 2
* Law on Commerce, adopted in 1991
* Law on the Ownership and the Use of Agricultural Lands, adopted 1991
* Law on Accountancy, adopted in 1991* Law on Value Added Tax, adopted in 1993* Law on the Excise Duties, adopted in 1994* Law on the Protection of Competition, adopted in 1991* Law on the Bulgarian National Bank, adopted in 1991* Law on the Economic Activity of Foreign Persons and on the Protection of
 Foreign Investments, adopted in 1992
* Law on Transformation and Privatiza tion of State-owne d and Municipal
  Enterprises, adopted in 1992
* Law on Banks and Credit Activity, adopted in 1992* Patent Law, adopted in 1993*  Law on Copyright and neighbouring rights, adopted in 1993* Tax Administration Law, adopted in 1993* Tax Procedure Law, adopted in 1993*Act on the Settlement of Non-Performing Loans Contracting Prior to 31 December 1990,
  adopted in 1993
* The Tobacco and the Tobacco Products Act, adopted in 1993* Customs Tariff of the Republic of Bulgaria, in force from 1 July 1992* The Bulgarian foreign trade regime under Ordinance 241 of December 1993 of the Council ofMinisters*Regulations 180/1993 and 181/1993 on safeguard measures and on protection against dumped
  and subsidized imports
* Bulgarian 1992 import statistics* Information on progress of the privatization process of State and Municipal Enterprises
  by 28 February 1994.
* Information concerning companies offered for privatization*  Information concerning the consistency of the fo reign trade regime with the WTO Multilateral Trade 
      Agreements
*  Note on Trade Related Aspects of Intellectual Property Rights
*  Note on services régime
4. In his initial introductory statemen ts to the Working Party, the representative of Bulgaria noted
that the accession to GATT 1947  was a priority for his Government and an important objective of the
reform programme currently under way in Bulgar ia with the whole-hearted support of the new
democratic structures in place since 1991. Later on, prior to the conclusion of the Uruguay Round, he
emphasized Bulgaria's intent to become a full fledge d member of the WTO preferably at the same time
and on the same bases as the  original members.   He stressed that the Bulgarian economy was in
transition.  Since 1991 his Governme nt had pursued decidedly the tr ansformation to a market economy
through a far reaching process of st ructural adjustment and liberaliza tion which needed the firm support
of the international community.  Even though in 1992 GDP per capita was only US$983, Bulgaria had
chosen not to claim developing c ountry status on the expectation that  members  contracting parties  could
recognize this position as a significant contribution on the part of Bulgaria towards full participation in
the multilateral trading system.  He added that in 1993 due to the considerable liberalization of the
Bulgarian foreign trade regime and to the absen ce of trade policy instruments to deal with theWT/SPEC/14
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importation of goods in such increased quantities and under such conditions as to cause or threaten to
cause serious injury to domestic producers, the Go vernment had had to introduce, as a temporary
measure, a system of reference import prices affec ting some agricultural imports. This measure aimed at
preventing distortions in the domestic market in th e meat, fresh fruit and vegetable sector resulting from
the importation of heavily subsidized agricultural pr oduction.  Bulgaria would align these measures with
the Agreement Establishing the WTO's  GATT  requirements upon Bulgarian accession.  In the case of
imports of beverages and tobacco products the measur e was aimed at avoiding under invoicing.  Since
the earlier meetings of the Working Party, the descri ption and the established levels of export taxes for
some tariff lines had been changed;  the quota amount  for ice cream had been increased by 50 per cent;
two eight-digit tariff lines had been  introduced in the Bulgarian Custom s Tariff.  He also stated  that
Bulgaria was presently in a difficult economic situati on.  This was partly due to the unresolved debt to
the private banks and partly to the severe reperc ussions in the Bulgarian economy of the trade and
economic sanctions against Serbia and Montenegr o.  In observing the UN Security Council embargo
against Serbia and Montenegro, Bulgaria had suffe red huge direct and indirect losses.  Bulgaria
considered that the prompt conclusion of the proceedings of accession to the Agreement Establishing
the WTO  GATT  would represent in a way an indirect comp ensation for some of these losses.  Noting
that the Bulgarian economy and foreign trade were  undergoing profound transformations, he said that
this process would continue with additional structural adjustment m easures to avoid internal economic
and social tensions.  Bulgaria considered the accession to the Agreement Establishing the WTO GATT
as a very important stage in the adjustment proce ss of the Bulgarian economy to the principles of the
world economy and the multilateral trading system which would further the participation of Bulgaria asa reliable trade and economic partner in the interna tional community and also contribute to the country's
stability.  Finally, he stressed that Bulgaria's incorporation into th e multilateral trading system should
also be seen as a step towards consolidatin g the democratization of the Bulgarian society.
5. Noting that Bulgaria had been implementing fa r reaching reforms aimed at liberalizing the
foreign trade regime and bringing it into conformity  with the multilateral trading system, members of the
Working Party welcomed the initial  application of Bulgaria for accession to the General Agreement
1947 and later on to the Agreement Establishing the WTO .  In expressing support and encouragement
for Bulgaria's efforts to continue to reform a nd liberalize its economy, members stated their firm
conviction that accession to the GATT  1947 and to the Agreement Establishing the WTO  would
facilitate the country's transition to a market econom y and would contribute to improving the standard of
living of the Bulgarian people by ensuring stability  and attracting further investments which would be
job creating and lead to better competitive conditions fo r Bulgaria's exports in world markets.  In this
regard they noted that the market access concessi ons negotiated in the context of the Uruguay RoundWT/SPEC/14
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which were significant would be available to Bu lgaria upon becoming a Member of the World Trade
Organization.
I VII  Agreement Establishing the World Trade Organization (WTO)
6.43.     Prior to Bulgaria's formals application for accession to the WTO  some members of the Working
Party noted that with the formal adoption of th e Final Act of the Uruguay Round at Marrakesh, GATT
accession deliberations must contemplate the expansi on of the negotiations to encompass the expanded
scope of GATT institutions under the WTO.  They sought confirmation of Bulgaria's intent to adhere tothe WTO and stated that a protocol package for Bulgaria that  contemplates WTO membership would
have to include the schedules required for WTO memb ership, i.e., an agricultural schedule that includes
commitments in the areas of market access, domestic supports, and export subsidies, and commitmentson market access for goods and services;  the initia l submissions/notifications required by the WTO
Agreements on Import Licensing Pr ocedures, Technical Barriers to Trade, Customs Valuation, and
TRIMs;  a list of non-tariff barriers by tariff line that  are subject to import or export quotas, automatic or
non-automatic licensing requirements, certifications, surc harges or taxes, or any restrictions that require
GATT
 WTO justification in order to (1) comply with  the requirements of the Agreement on Import
Licensing Procedures, and (2) negotiate, as necessa ry, their elimination or transformation towards
GATT  WTO  conformity.  In their view the preparati on of the required WTO schedules and the list of
the non-tariff measures by HS line and their GATT  WTO  justification would facilitate the negotiation of
a protocol for Bulgaria.  In this connection some members requested information on Bulgaria's
commitments concerning intellectual property rights a nd its intentions concerning participation in the
Agreement on Trade Related Aspects of Intellectual Property Rights and in the General Agreement onTrade in Services.
VIII
     Protocol of Accession
7.45. A member suggested that in this case, with th e consent of the Government of Bulgaria, accession
to GATT and the World Trade Organization might be addressed jointly.  Therefore, he suggested that
the Protocol of Accession of Bulg aria might include the following additional  elements:  ( i) 
establishment of market access schedules on goods a nd services;  (ii) a country schedule on agriculture
that includes commitments on market access, domestic  support, and export subsidies;  (iii) ability to
implement the WTO Uruguay Round Agreements on Im port Licensing, Procedur es, Customs Valuation,
Technical Barriers to Trade, TRIPs, TRIMs, Subsidies, Anti-Dumping, and Application of Sanitary and
Phytosanitary Measures;  (iv) (i) GATT   WTO consistent application of taxes and charges applied toWT/SPEC/14
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imports and non-tariff restrictions on imports and exports; and  (v)  (ii) an assurance that periodic
updates  will be provided covering the process of privatization and trade by State-owned enterprises.
8.44. In response the representative of Bulgaria said that as a country acceding to GATT 1947
Bulgaria had been associated with the concluding phase of the Uruguay Round Multilateral Trade
Negotiations and had since that time envisaged commencing the process of accession to the Agreement
Establishing the WTO  World Trade Organization  in the near future . His Government was  had been
negotiating accession to the General Agreement 1947 with  the clear intention of becoming as well an
original member of the World Trade Organization in accordance with the provisions of Article XI
thereof.  Therefore, the tariff   market access negotiations currently under way  undertaken  between a
number of GATT 1947  contracting parties and Bulgaria would be  had been  expected to lead to the
establishment of a schedule of market access commitm ents which would be annexed to the Protocol of
Accession to the  GATT 1947, as well as to the GATT 1994 following the approval of the Preparatory
Committee for the Establishment of the World Trade Organization as foreseen in the Ministerial
Decision of 14 April 1994 on Acceptance of an Acce ssion to the Agreement Establishing the World
Trade Organization.  Due to the complexity of th e negotiating process, for reasons independent of
Bulgaria this objective had not been attained.  Th erefore, on 11 April 1995, the Government of Bulgaria
had applied for accession to the WTO Agreement in pursuance of Article XII thereof and the Working
Party on Accession to GATT 1947 had been transfor med into a WTO Accession Working Party.  In
document WT/ACC/BGR/2, Bulgaria had submitted to the Working Party, information on the
consistency of the foreign trade regime of Bulgar ia with the WTO Agreement as well as  Notes on
TRIPS and Services.
Tariff Negotiations
9.6 The Working Party noted that in response to the invitation of Bulgaria, a number of members
contracting parties  had entered into tariff  market access  negotiations with Bulgaria relating to its
accession  to the Agreement Establishing the WTO .  Some members of the Working Party said that in
the bilateral tariff negotiations they would seek the bi nding of the whole Bulgarian tariff as well as other
tariff concessions at a rate commensurate with Bulgar ia's development level and participation in world
trade.  In response the representative of Bulgaria  said that his Government was ready to bind the
country's tariff at a level consistent with Bulgaria 's financial, development and trade needs, on the
understanding that the resulting package of  tariff and trade concessions would also  constitute the
contribution of Bulgaria to the Uruguay Round market access negotiations for the purpose of
membership in the WTO  World Trade Organization .WT/SPEC/14
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III  Economic Transition
10.7In response to questions concerning recent economic  developments in Bulgaria, in particular the
role of the State, its share in the productive cap acity of the economy and the manner in which the
ownership responsibility over firms was exercised, the re presentative of Bulgaria said that the Bulgarian
economy was heavily dependent on foreign trade.  In the past several years, Bulgarian foreign trade haddeclined mainly due to the collaps e of trade with its partners from Central and Eastern Europe and due
to the strict application of the embargoes toward s Iraq, Serbia and Montenegro in accordance with UN
Security Council resolutions.  Followi ng the disruption of trade with the former CMEA countries, trade
flows with the OECD countries had gained momentum.  He added that in parallel with the elaboration
of a new legislative framework, the Government of Bulgaria had embarked on a comprehensivemacroeconomic stabilization and structural reform  programme with support from the international
financial institutions.  The programme aimed at two main policy objectives. First, to achieve progress
towards a sustainable external pos ition, including the revival of fore ign trade, the diversification of
external markets and an improvement in Bulgaria's  international reserves position, as well as progress
towards resolving Bulgaria's external debt situa tion.  Second, to move towards restoring macroeconomic
equilibrium through the appropriate mix of fiscal, m onetary and incomes policies.  A key step in this
regard was to reduce the size of the fiscal deficit,  to tighten the monetary supply and credit expansion
and to limit the uncontrolled income growth.  The expectation being that progress towards
macroeconomic stability would create a favourable envi ronment for the emerging private sector and for
non-inflationary growth.  The following results  had been achieved in implementing the above-
mentioned programme.  In 1991-1994 important reforms had been undertaken towards priceliberalization, the liberalization of the trade regime and the process of privatization, as well as in the
financial sector and in agriculture.  The Governme nt had freed virtually all prices in the economy. 
Nevertheless, the 1991 three-digit inflation rate ha d been substantially reduced and remained under
control.  Thus, the 1993 yearly inflation rate of 63.9% had decreased in February 1994 to a 4.6%
monthly level.  He recalled that in July 1992 Bulg aria had introduced a new customs tariff based on the
Harmonized Commodity Description a nd Coding System.  Since then the customs tariff had become the
main trade policy instrument in the economy.  All economy units, irrespec tive of their ownership
whether private or public had acquired the right to  carry out foreign trade activities.  The licensing
system applied in the past which had involved direct  government regulation of almost all foreign trade
had been eliminated.  In the financial sector, a two-tier banking system had been established.  The
national currency, the leva (BGL), had attained in ternal convertibility for current account transactions. 
The rate of the BGL quoted daily by the Bulgarian Na tional Bank reflected the average weighted rate of
sales and purchases of foreign currencies on the inte r bank market.  The exchange rate of the BGLWT/SPEC/14
Page 7
quoted by the Bulgarian National Bank, served only as a reference to the licensed commercial banks and
exchange bureaux.  Customers could freely negotiate the exchange rate with commercial banks and the
foreign exchange agents licensed for carrying out such operations.
11.8In his statements to the Working Party, the repres entative of Bulgaria also recalled that since the
establishment of parliamentary democracy in the early 1990s, fundamental political and economic
changes had taken place in Bulgaria.  The country had embarked upon a radical economy reform
programme aimed at transformation to a market ec onomy.  The trade reform had opened the economy to
external competition and the Law on the Economic Activity of Foreign Persons and on the Protection ofForeign Investments had also Bulgaria's economy opened to foreign investors.  The main reformsalready in place were as follows:  the elimination of the State monopoly of foreign trade in 1989, free
access to foreign exchange for current account transac tions in 1991, the central role of the tariff and the
virtual removal of quantitative restrictions on impor ts, the rationalization of the taxation regime, the
decentralization of the State-owned sector and the tr ansfer of productive propert y to the private sector. 
Foreign Exchange Regime
12.9In response to questions concerning current foreign exchange regulations , the conditions for its
acquisition and use , and whether there was any discrimination in the availability of or the exchange rates
for imports of capital equipment, intermediate goods, consumer goods or new materials, the
representative of Bulgaria said that following the es tablishment in 1991 of an inter bank market the rate
of the BGL against the US$ was quoted daily by th e Bulgarian National Bank (i.e. the Central Bank)
and reflected the average weighted rate of sales and purchases of foreign currencies on the inter bankmarket.  The exchange rate of the BGL, quoted by the BNB, was applied for the purposes of statistics,
accounting and customs valuation.  It was not obligator y for transactions and served only as a reference
to the licensed banks and exchange bureaux.  Custom ers freely negotiated the ex change rate with the
commercial banks and the foreign exchange agents.  They had the right to sell or purchase foreign
exchange without any restrictions.  Companies coul d freely buy from the inter bank market the foreign
exchange needed for payments in connection with imports and other types of current account
transactions, as well as trade  foreign currencies among themselves.  There was no surrenderrequirement for the foreign currency earned.  Local persons and foreigners could freely trade foreign
currencies on the interbank currency ma rket for current account transactions.  No restrictions existed for
nationals and foreign persons to open accounts in foreign currencies with commercial banks and to
dispose of the funds in their accounts.  WT/SPEC/14
Page 8
13. Some members noted that Bulgaria maintained bilateral payment agreements with a number of
countries, including Albania, Belarus, Cam bodia, China, Ethiopia,  Finland, Ghana, Greece,
Mozambique, Peru, Romania, the Russian Federati on and Ukraine and asked whether trade payments
and/or foreign exchange provisions in these ag reements differed from such arrangements/provisions
with other countries.  In response the representative of Bulgaria said that the Republic of Bulgaria did
not maintain at present any operational bilateral payments agreements denominated in non-convertible
currencies.  No intergovernmental barter, import/e xport balancing or payment in kind agreements and
clearing arrangements were in effect in Bulgaria at present.  there were no operational payments
agreements denominated in non-convertible currencies.   Trade with all countries was conducted under
normal commercial considerations in convertible currencies.  Some members of the Working Party
noted that Bulgaria maintained barter agreemen ts and import/export balancing arrangements.  The
representative of Bulgaria inform ed the Working Party that no intergovernmental barter, import/export
or payment in kind agreements and clearing arrangements were in effect.
Price Policy
14.11Some members enquired whether the State C ouncil Decree of February 1988 which authorises
the State to "prevent unlawful increases in prices" was in force and asked for a detailed description of
the price control mechanism.  In response the repr esentative of Bulgaria said that the 1991 Constitution
stipulates in its Article 19 paragraphs 1 and 2 that the Bulgarian economy is based on freeentrepreneurship and the Law creates and guarantees  to all citizens and legal persons equal juridical
conditions for economic activity, preventing the abuse of monopolies and the unfair competition.  Theapplication of State Decr ee 115/1988 was envisaged as long as some  fixed prices as well as monitoring
existed.  The price control mechanism which was i rrespective of the ownership embodied fixed prices,
ceiling prices and prices under Govern ment monitoring.  Fixed prices had applied to the following
energy products:  electricity; heating energy; co al for production purposes and for home heating,
briquettes (imported coal for produc tion purposes was not subject to fi xed prices).  These products were
estimated to account for less than 10 per cent of reta il and wholesale turnover.  The fixed prices had
been raised several times since the initial increase in 1991.  The number of products under fixed-pricehad been reduced and the restric tion on petroleum prices lessened.  Some members of the Working
Party asked that Bulgaria notify the Working Party of  its timetable and plans for abolition of the price
controls.  In 1995 the representative of Bulgaria info rmed the Working Party that prices of goods and
services in the Republic of Bulgaria had been liberaliz ed.  Prices were determined by the market.  Prices
could only be regulated in order to avoid the establishment of monopolies, to prevent abuse of a
dominant market position, and to protect consumers.  As of 1995, price regulation was of the followingWT/SPEC/14
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types:  fixed prices for electricity, heating en ergy (for the population);  domestic coal (for production
purposes), postal and basic telecommunication servi ces, tobacco products for internal sale.  These
products can be sold only at the prices fixed by the government;  ceiling prices for gasoline, diesel oil,
gas oil (for production purposes), fuel oil, gas propa ne-butane.  The prices of these products cannot
exceed the level determined by th e Council of Ministers monthly and  on the basis of the international
market prices and the changes in  at the US$/BGL exchange rate of the BGL ,;  price monitoring
(surveillance) for goods that are of vital importan ce to the living standards of the population and the
national economy.  These are the following:  food pr oducts (bread, meat, milk, yoghurt, cheese, oil,
butter, eggs, macaroni, noodles, sugar, beans,  lentils, rice and potatoes), non-food products
(pharmaceuticals for human consumption, coal and briquettes for the population), the passenger (rail,
urban and interurban) road transport services.  The regulation of the prices under monitoring is applied
actually only on profit margins and not on the prices  themselves.  The profit margins for different
products cannot exceed:  for producers:  12 per cen t for food products, 20 per cent for pharmaceuticals
and mineral waters, 7 per cent for heating energy for production purposes, coal and briquettes,
12 per cent for transport services, 30 per cent for drinking water and water for production purposes and
15 per cent for other non-food products;  for sellers:  14 per cent for food products and 25 per cent for
non-food products.  Bulgaria stated that the price controls did not  breach the WTO national treatment
principle - domestic and imported products were tr eated in a uniform manner that did not afford
protection to domestic production, nor  was there differential treatment based on the origin of the
products.   The policy was to gradually liberalise fixed prices [with a view to their abolition in 1995. 
Ceiling prices were set by the Government for the sale of the following goods :  crude oil; gasoline;
diesel oil; gas oil for industrial purposes and fuel oil; gas propane-butane.   The ceiling prices were
calculated  considering the customs duty and  the excise tax .  The ceiling prices were determined on a
fortnight basis, and thus reflected changes that mi ght occur.  Government monitoring through a ceiling
on profit margins was maintained in respect  of the prices of the following goods :  two types of flour;
two types of bread; meat with bone; cow's milk; chicken; Bulgarian yoghurt from cow's milk; white
cheese in brine from cow 's milk; pharmaceutical preparations.  The Government was fully aware that in
the long term price controls depress supply and th e goods under price control are substituted by the
traders on the market, whenever po ssible, by products with fully liberalized prices.  The price control
was regarded as a temporary measure in the economy in transition, applied to cushion social problems. 
The system of food price monitoring was introduced with the view to suppre ssing the tendency towards
steep increases in profits on the sale of some goods  and establishes a tax on excessive profits.  However,
this mechanism had not been enforced effectively.   Fresh drinking water for household consumption,
and passenger railway and road transport fares had been included in the group of goods and services
under government price monitoring.   The representative of Bulgaria said that currently the goods andWT/SPEC/14
Page 10
services with fixed prices account for 2.20%  2.06%  of GDP, goods with ceiling prices 1.13%  1.74%  and
goods and services under price monitoring 8.94%   5.11% .  Thus the total equals to 12.27%  8.91%  of
GDP.  The representative of Bulgaria assured the Work ing Party that the price policy pursued by the
Republic of Bulgaria aimed at transparent rules and regulating mechanisms directed to overcome market
imperfections, imbalance of supply and demand and the n eed to maintain control over prices of natural
monopolies.   The price control measures which Bulgaria maintained  expected to abolish by 1995  did not
discriminate against imports.  The Workin g Party took note of these assurances. 
State-Owned Enterprises and Privatization
15.12Some members requested a comprehensive list of enterprises wholly or substantially owned by
the State and the products in which they traded as well as their trade volume and value and asked for
information on the role of the State in management  and decision making, the bankruptcy and liquidation
of State-owned firms.  Members also requested a de scription of the Privatization Law, and the functions
and operations of the Agency on Privatization as well as the current status and the future prospects of
the privatization process.  In response, the repres entative of Bulgaria said that the number of State
enterprises was about 4,500.  The Privatization Prog ramme for 1993 had envisaged privatization of 318
enterprises, including 150 differentiated assets.  Priv atization was one of the most essential elements in
the structural reform in Bulgaria.  This process ha d started at the beginning of 1992 with the restitution
laws which affected mainly industrial and residential property, small shops and agricultural land.  Thelegal regulation of privatization in Bulgaria was contained in the Law on Transformation and
Privatization of State and Municipal Enterprises ( published in State Gazette No. 38 of 1992).  The State
authorities engaged in the privatization process are as follows: (i) The Parliament:  adopts legislative
acts, adopts the annual privatization programme s ubmitted by the Council of Ministers, appoints six
members of the Supervisory Board of the Agency fo r Privatization, supervises the fulfilment of the
annual privatization programme, and in particular approves the report on its fulfilment given by theAgency for Privatization.  (ii)  The Council of Mi nisters:  adopts regulati ons on the implementation of
legislative acts,  authorises the relevant government  bodies for small-scale privatization (less than BGL
10 million balance sheet value of assets of the enterp rise under privatization), approves the privatization
of enterprises with balance sheet value of the long-term assets exceeding BGL 200 million,  appoints
five members of the Supervisory Board of the Ag ency for Privatization.  (iii)  The Agency for
Privatization is a government body authorized to or ganize and control the privatization of State-owned
enterprises as well as to carry out privatizations in the cases provided by the law.  It is a budget-financed
legal person; licenses Bulgarian and foreign appraise rs, drafts the annual privatization programme and
submits it to the Council of Ministers,  organizes a nd controls privatization effected by other bodies, WT/SPEC/14
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privatises State-owned enterprises with a balan ce sheet value of long-term assets exceeding BGL 10
million (about 30 per cent of the total number of Stat e-owned enterprises).  (iv)  Government bodies,
authorised to carry out small scale privatization:  The Council of Ministers has granted privatization
competence to some ministries and committees with respect to State-owned enterprises with a balance
sheet value of long-term assets up to 10 million BG L.  Those government bodies take decisions for
privatization, carry out the privatization proce ss and conclude the privatization transactions. 
(v) Municipal Councils:  the Municipal Councils are responsible of  for the privatization of municipal
enterprises, regardless of their ba lance sheet value of long-term assets.  The Law regulates the basic
framework within which the process of privatiz ation is effected.  The competence for taking
privatization decisions is allocated to the Stat e or to municipal bodies depending on the form of
ownership and assets to be privatized.  The Law provides for equal treatment of all participants inprivatization.  The right of preferential particip ation has been established only for workers and
employees with a minimum length of service at the enterprise undergoing privatization prior to the date
of declaration of the privatization decision.  In cases of selling of sh ares and stock owned by the State
and Municipalities, the employees have the right to buy up to 20 per cent of the shares of the commonstock of the capital of the company at a 50 per cent discount on the fixed price.  Only if 30 per cent of
the employees declare that they will participate in the auction or competition,  they become owners of
the assets with a 30 per cent reduction of the price, d eclared as definitive.  The original selling price of
shares, the initial price of the auctions and the te nder price at holding comp etition or negotiations are
determined on the basis of a value appraisal of the enterprise.  The Law regulates the following methods
of organizing the sale of shares and stock ow ned by the State and the Municipalities which may be
applied simultaneously: open sale (applied only for shar es and after preliminary co-ordination with the
Privatization Agency), public auction, publicly a nnounced competition and negotiations with potential
buyers.   The sale of State and municipal enterpri ses or parts thereof is effected through auction or
competition.  The ownership can be transferred by renting for a period up to 25 years with a clause forbuying out; management with clause for buying out or selling to third person; sale by paying byinstalments with retention of ownership; sale under deferment and discontinuation conditions such as
maintaining the previous activity of the enterprise, the work places , making investments, obtaining
certain results etc.  The provisions of the La w on Transformation and Priv atization of State and
Municipal Enterprises were applied also with re spect to selling property of State and municipal
enterprises that have been closed down owing to insolvency or for other reasons, left after paying off all
debts in accordance with the rules of closing down in  case of insolvency, as well as whole enterprises
transformed into commercial compan ies or differentiated parts which are fully owned by the State and
the Municipalities with a book value of the fixed assets below BGL 10 million.  Privatization waspossible through restitution as well.WT/SPEC/14
Page 12
16.        The representative of Bulgaria said that in 1994 the Privatization Agency and the central
governmental bodies have undertaken a total numbe r of 610 privatization procedures (489 for whole
state enterprises and 121 for parts of state enterprise s), distributed per sectors as follows:  industry - 198,
trade - 127, agriculture - 115, tourism - 85, construc tion - 42, transport - 20, others - 23.  The total
number of the privatization transactions conclude d in 1994 is 171 (sales of whole enterprises - 90
(52.6%), sales of parts of state enterprises - 81 (47.4 %), distributed per sectors as follows:  trade - 55,
construction - 15, transport - 10, touris m - 8, others - 2.  During the first five months of 1995 the total
number of initiated privatization procedures is 218, whereas the total number of the transactions
concluded is 97.  There is a clear tendency of acceler ation in the privatization process demonstrated by
the index of the transactions concluded.  At the end of May 1995 the total number of initiated
privatization procedures is 1228 and that of the concluded privatization transactions is 337.  The
objectives, priorities and figures relevant to the priva tization process for the current year are set in the
1995 Privatization Programme (SG 54/1995) adopted by the National Assembly.  The "exemption list"
of some sectors that are excluded from the scope of the privatization under this programme does not
constitute by itself a prohibition but a temporary excl usion of a limited number of sectors for the current
year.  Privatization of basic teleco mmunications is not scheduled as i mminent because of the projects for
their modernization financed with investment cr edits of the World Bank and other international
financial institutions that are state guaranteed.  Th e machine building sector is not in "the exemption
list".  Moreover, it is among the sectoral prio rities under the 1995 privatization programme.  As of
mid 1995 the land under private ownership or contro l accounts for 65 per cent of the land subject to
restitution.   The representative of Bulgaria dist ributed a table on the progress of the privatization process
in Bulgaria.  By 28 February 1994 the share of the private sector in the Bulgarian economy was
increasing not only because of privatization, but also due to the em ergence of new private firms.  The
share of the private sector was as follows: in re tail trade - 56% of sales (semi-annual figure for 1993) ;  in
construction - 16%  of sales (semi-annual figure for 1993);  in transport - 5% of sales (semi-annual
figure for 1993);  in GDP produced in agriculture - 45% (annual figure for 1992).  Recent estimates put
at 25% the contribution of the private sector to GDP .
17.13The representative of Bulgaria added that the present  status as of 30 June 1995  (by February
1994) and the forecast for the implementation  of the privatization process  Programme until the end of
1994 by Ministries, other Government al departments and Municipalities  was as follows:                                                                                 INFORMATION ON PROGRESS OF THE PRIVATIZATION PROCESS OF STATE ENTERPRISES  BY 28.02.1994
STEP UNDERTAKENPrivatization
agencyMinistry of
IndustryMinistry
 of
AgricultureMinistry
of
ConstructionMinistry
of
TradeMinistry
of
TransportCommittee
on
tourismCom. on
Posts  and
Telecom.Com.
on
energyTOTAL
1 Decision to open the procedure 73 68 39 16 105 80 12 1 1 395
-on whole enterprises 65 66 17 10 86 68 12 1 1 326
-on separate enterprises 8 2 22 6 19 12 69
2 Tenders for evaluation announced 40 63 37 13 48 61 9 271
3 Evaluations assigned 32 51 38 14 50 47 9 241
4 Evaluations accepted 29 26 31 13 37 17 5 158
-returned 1 1 2
5 Under preparation - total 23 7 11 12 55 3 111
-auctions 1 1 1 1 4
-tenders 2 1 6 10 19
-direct negotiations 20 6 5 1 2 34
6 Tenders,  auctions or direct
negotiations5 25 19 11 10 2 3 75
-auctions 1 8 1 1 11
-tenders 1 6 5 9 5 3 29
-direct negotiations 3 19 6 1 4 2 35
7 Transactions concluded - total 16 6 9 8 40 79
-auctions 7 5 15 27
-tenders 3 5 3 7 22 40
-direct negotiations 6 1 1 1 3 12                                                                                        INFORMATION ON PROGRESS OF THE PRIVATIZATION PROCESS OF MUNICIPAL BY 28.02.1994 G.
STEP UNDERTAKEN Sofia
CitySofia
(Surond)Burgas Varna Lovech Montana Plovdlv Ruse Haskovo TOTAL
1 Decision to open the procedure 66 144 44 66 41 193 33 64 124 775
-on whole enterprises 4 1 4 1 3 4 5 4 26
-on separate enterprises 66 140 43 62 40 190 29 59 120 749
2 Tenders for evaluation announced 9 5 2 48 3 1 1 1 12 82
3 Evaluations assigned 38 83 41 27 16 3 10 22 56 296
4 Evaluations accepted 31 6 20 27 11 3 22 8 18 146
-returned
5 Under preparation - total 27 4 18 21 6 3 8 8 6 101
-auctions 22 4 17 19 5 1 6 7 6 87
-tenders 4 1 2 1 1 2 1 12
-direct negotiations 1 1 2
6 Tenders,  auctions or direct
negotiations18 2 18 19 6 3 4 4 7 81
-auctions 14 2 17 15 5 1 4 4 7 69
-tenders 2 1 4 1 1 9
-direct negotiations 2 1 3
7 Transactions concluded - total 19 12 19 16 6 3 2 7 84
-auctions 12 10 19 14 5 2 7 69
-tenders 5 2 1 1 1 2 12
-direct negotiations 2 1 3INFORMATION ON PROGRESS OF THE PRIVATIZATION PROCESS OF STATE ENTERPRISES BY 30.06.1995
STEP UNDERTAKEN Privatizat Ministry of Committee of TOTAL
Agency Industry Agricult. Construct. Trade Transport. Culture Tourism Telecom. Energy Forestry
1 Decision to open procedure 280 199 170 76 277 109 14 91 1 8 3 1228
- on whole enterprises 229 166 98 30 141 78 13 73 1 6 3 838
17 7 9 5 4 6 48
- on separated parts of enterprises 51 33 72 46 136 31 1 18 2 390
25 15 21 15 59 8 6 149
2 Suspended procedures 14 4 11 12 5 2 2 50
3 Tenders for evaluation announced 150 159 55 29 127 72 7 36 1 4 1 641
4 Evaluations assigned 127 150 151 61 189 76 6 34 1 4 799
5 Evaluations accepted 116 113 104 55 122 48 3 29 2 592
- returned 5 1 14 20
6 Tenders, auctions, direct negotiat. 23 37 45 39 18 2 3 167
- auctions 6 6
- tenders 3 3 22 4 2 34
- direct negotiations 20 34 17 39 14 3 127
87 3 9 6 60
7 Transactions concluded - total 63 34 73 38 90 17 2 18 1 1 337
a/. on whole enterprises by: 34 33 33 15 24 7 2 11 1 1 161
- auctions 5 5
- tenders 4 7 11 10 15 2 49
- direct negotiations 30 26 17 3 9 7 2 9 1 1 105
62 2 3 1 6 2 0
b/. on separated parts of enterprises
by20 1 40 23 66 10 7 167
- auctions 7 2 19 28
- tenders 11 20 10 30 3 1 75
- direct negotiations 9 1 13 11 17 7 6 64
71 5 1 0 1 6 3 5 4 7
c/. assets 9 9
8 Transactions suspended 2 1 1 2 6
9 Expenditures in thous.leva 37855 10913 6159 5712 7295 4837 405 2951 123 532 34 76816.1
10 Proceeds of sales - in thous.leva 3399423 195571 136332 127904 224406 29331 5100 180915 2849 80 4301912.4
- paying in securities 4082956 114893 66357 42292 342551 77291 15001 35821 8606 2445 4787813.6WT/SPEC/14
Page 16
Due to technical reasons Bulgaria was not in a pos ition to provide exact data on the share of State-
owned companies in foreign trade.  However, the sh are of the private sector in Gross Domestic Product1
was as follows:
                                     The share of the private sector in Gross Domestic Product
                                                               (computed at current price)
(percentage shares)
1990 1991 1992 1993 19942
Economic activity
Private sector - total 9.5 11.9 18.3 25.0 27.2
Agriculture and Forestry 6.7 5.3 6.7 7.2 8.9
Industry31.7 2.7 4.3 6.3 5.9
Services41.1 7.3 7.3 11.5 12.4
(Per cent)
Economic activity 1990 1991
 1992 2/
Private sector - total  9.5 11.9  15.6 
Agriculture and
forestry                 6.7                  5.5                 4.5
Industry 3/ 1.7  3.9  6.1
Services 4/  1.1    2.5   5.0 
1/ Computed at current prices.
2/ Data based on estimate.
3/ Incl. construction, etc.
4/ Incl. transport, communication, trade, housing, public utilities and household services, science and
technology, education, culture and art, health, so cial insurance, finance, credit and insurance.
18.         The representative of Bulgaria said that th e total number of privatization transactions
scheduled for conclusion by the Privatizati on Agency under the 1995 Privatization Programme
accounts for a total of 170 transactions.  Besides, there were 34 large State-owned enterprises which
will be subject to privatization by the Agency for Privatization upon approval by the Council of
Ministers.  At the enterprise level the national st atistics account for trade in general and not according
                                          
    2Computed at basis prices
    3Including construction
    4Including transport, communica tion, trade, housing, public utilities a nd household services,
science and technology, education, culture and art, health, social insurance, finance, credit andinsurance.WT/SPEC/14
Page 17
to entities.  The total share of th e private enterprises was 60 per cen t.  The share of foreign trade
accounted by the largest State-owned enterprise s in major sectors (Bulgartabac, Balkancar,
Bulgarplodexport, Bulgarian Meat Company, Electroimpex, Industrialimport, Intercommerce,
Isotimpex, Lesoimpex, Mineralimpex, Pharmachim, Rudmetal, Vinimpex) in 1994 was 7 per cent.
19.14 The representative of Bulgaria added that Stat e intervention in the economic activity of all
companies has been abolished.  Article 19 of the C onstitution of Bulgaria states, inter alia, that the
economy of Bulgaria is based on the principles of the free entrepreneurship and that the legislation
shall create and assure equal legal conditions fo r carrying out economic activities for all legal and
natural persons, thus establishing the principl e of non-discrimination be tween State-owned and
private enterprises. Privileged protection of Stat e property has been deleted in the Penal Code. 
Moreover, the Law on the Protection of Compe tition of 1991 prevented enterprises from abusing
their dominant position which could lead to a restriction of competition.  The 1991 Law on
Commerce and all other legislation provide for a le gal status of State-owned enterprises entirely
identical with that of private en terprises. Upon the "corporatization" , i.e. the transformation of State
organizations into joint-stock or limited liability companies, their autonomy from the Government is
guaranteed so that their activity is based on commerc ial considerations only. Thus the State's role in
State-owned enterprises is restricted to that of an  ordinary shareholder. The State-owned enterprise is
an independent legal person being a titular of its property and acting on its own economic and legalresponsibility. State-owned enterprises are in a pos ition to define independently their own market
behaviour, to implement it through the respective operational decisions and to conclude commercialtransactions of any kind in accordance with the customary business practice and the legislation in
force.  Neither economic nor legal privileges are granted to them by the Government. The legalstatus, the position of the State as a regular shareholder and the identical legal and economic
treatment of State-owned and private enterprises are guarantees that the State will not be involved in
enterprise policy making.  The members of the Management and Supervisory boards of the State-
owned enterprises are appointed pursuant to Ar ticle 137, paragraph 1, subparagraph 5 and Article
221, paragraph 1 of the Law of Commerce. The sel ection process is based on certain requirements
with respect to education, qualification, business e xperience, etc. The candidates for an appointment
should meet the above mentioned criteria.  Indi vidual candidacies are considered on a competitive
basis.  The selected candidates or candidate nego tiate a Management Contract with the respective
governmental body. This contract regulates the re lations between the Management and Supervisory
Boards and the relevant governmental body. As a ru le the Management Contracts are of three years
duration and can be terminated on grounds strictly de fined so that a stable management of the State-
owned enterprises is guaranteed in accordance with  the general requirement of compliance with the
labour legislation in force.  Parliament was in  the process of adoption of the Bankruptcy Law.
  TheWT/SPEC/14
Page 18
Bankruptcy Law had been adopted in 1994, as SG 63/1994. It formed Part IV of the Commercial Law
and was entitled "Insolvency"  In the draft  law, there were no privileges for State-owned firms or
interference of the State in the bankruptcy procedur es.  At present bankruptcy and liquidation are still
governed by Chapter 3 (Articles 65 to 81) of Decree 56.   Insolvent companies can be offered for
liquidation by the State or by the servicing banks.  However there is a difference in the procedure: the
Council of Ministers or the appropr iate Minister simply issues a formal decision to such effect,
whereas the banks and creditors have to start formal proceedings before the court.
20.15 Finally, the representative of Bulgaria said that in December 1993, the Parliament had
adopted the Law on the Settlement of Non-Perfor ming Loans Contracted Prior to 31 December 1990.
 Loans contracted by companies and banks with  State-ownership over 50% before 31 December 1990
and with arrears of more than 180 days would be  replaced by long-term bonds denominated in BGL
and in US$.  The bonds issued in pursuance of the provisions of this La w could be used both as
securities and in the process of privatization.  W ithin three months from the transformation of the
loans, the managing bodies of the companies s hould develop programs for restructuring aimed at
stabilizing the financial situa tion of the enterprises.  The representative of Bulgaria confirmed that
the Ministry of Finance and the Bulgarian Nati onal Bank maintained a policy of not granting or
guaranteeing loans to State owned enterprises for operational purposes.  He added that the break-up
of most large State-owned enterprises into smalle r units had been virtually completed.  These new
enterprises were registered under the 1991 Law on Commerce (the Company Act) as commercial
companies (both joint-stock companies and limited liability companies) with the State as a single
shareholder, thus legally prepared for privatiza tion.  In conclusion, the representative of Bulgaria
expressed the view that the restitution of many urban properties and privatization had created a
dynamic private sector which already accounts for a third of all economic activity in the country.  
21.16 A number of members of the Working Party e xpressed appreciation for the clarifications
concerning the status and prospects for Bulgaria's efforts to privatize State-owned enterprises and the
manner in which the State exercised its ownership in  State-owned firms and the role of state-owned
enterprises in international tr ade.  These members noted, however, that while Bulgaria was
constructing the legal framework for equality of treat ment of private enterprises with State firms and
the eventual separation of former State firms fro m government association after privatization, the
current rules for the management of State-owned firms contemplated a State role in enterprise
operations.  For example, Government ministries appointed the Management and Supervisory Boards
that select the management of St ate firms and that negotiate the te rms of a Management Contract with
the selected individuals.  These contracts regula ted the relationship between management, labour, andWT/SPEC/14
Page 19
the State, and there were areas, such as the estab lishment of subsidiaries, where the management was
required to consult with the Government.  Even t hough Bulgaria had stated that the Government was
not liable for State enterprises debt, the most recent regulations had transferred the ultimate
responsibility for a great deal of State enterprise debt from the banks to the Government, in order to
allow the banks to reorganize their role in Bulgaria's economy and free up resources for new loans. 
In 1994,  At the present time,  a full separation of the State from the still sizeable and economically
critical State-owned sector was not possible, and the enactment of a Bankruptcy Law had been
delayed.  Moreover, in their view, Bulgaria's privatization process was proceeding very slowly
because of the approximately 4,500 St ate firms slated for transfer to  private ownership under the Law
on Transformation and Privatization of  State and Municipal Enterprises, Bulgaria was currently in the
earliest stages of  preparing some 400 State firms  for sale and the reasons for cautious progress were
clear.  It would appear, therefore, that the se tting up of an economic basis independent of the
Bulgarian State would be a long-t erm project.  While respecting Bulgaria's statements concerning its
ultimate goals and intent to establish a market -driven economy based on private ownership, these
members believed that for accession both to GATT and  the Agreement Establishing the WTO the
relationship between the Bulgarian State and its tr ade and industry had to be clear.  As a minimum
they expected transparency and dialogue as Bu lgaria's economic transition progressed and would
intend to address these issues in the Protocol of Accessi on of Bulgaria.  [A member recalled that
Bulgaria had the commitment to keep the WTO  CONTRACTING PARTIES  informed of these
developments. ]  The representative of Bulgaria affirmed his Government's intention to ensure the
transparency of its national trade policies and prac tices under the regular trad e policy reviews in the
WTO, including the wider background of national a nd economic development.  This was not to be
regarded as a basis for the imposition of specific ob ligations under the Agreements or as a basis for
the adoption of new special policy commitments .  Bulgaria could not undertake commitments
exceeding the regular membership obligations.  The Republic of Bulgaria was committed to fulfil the
notification requirements ensuing from the existin g procedures in the WTO Agreements.  The
Working Party took note of this commitment.
IIIII  Tariff Policy
Customs Tariff
22.17 Some members of the Working Party noted that Bulgaria had relatively high and recently
increased average tariff levels which for some items had reached 40-55%, particularly in the
agricultural sector. They requested that Bulgaria  justify these rates and describe how the tariff
structure would develop over the ne xt 5-10 years.  In response the representative of Bulgaria said that
as a result of the price reform the removal of the import restrictions and the drastic changes in importWT/SPEC/14
Page 20
licensing, tariffs had become the main trade po licy instrument.  A new import tariff based on the
Harmonised Commodity Description a nd Coding System was in force in Bulgaria as of 1 July 1992. 
The new customs tariff contained ninety-six chapters, 1,241 four-digit headings, 5,018 six-digit
headings and 812  845 eight-digit headings.  The Tariff cont ains two columns.  The first column
specifies rates under Bulgaria's Generalized Syst em of Preferences scheme.  The second column
specifies most-favoured-nation rates (m.f.n.).  Imports  from least-developed countries were subject to
zero tariff rates.  The tariff for imports from count ries which do not apply m. f.n. treatment to Bulgaria
were 200 per cent of the m.f.n. rate.  The average nominal m.f.n. tariff rate was 17.96 per cent.  Thetrade weighted average for m.f.n. imports was 13.72 per cent.  For industrial products, the average
nominal rate was 16.69 per cent and the trade weighted average was 12.50 per cent.  For agriculturalproducts, the levels were 25.97 per cent and 30.91 per cent, respectively.   Bulgaria's maximum tariffof 55% applied to three agricultural items.  Bulgar ia's tariff had five basic m.f.n. rates ranging from
5 to 40 per cent.  The most common rate was 25 per cent representing almost 31 per cent of all tarifflines.  Only 8 per cent of tariff lines fell under th e rate of 40 per cent accounting for less than 5 per
cent of total 1992 imports.  The greatest share of imports (34 per cent) fell under the lowest rate of 5per cent.  The preferential margin under Bulgaria's Generalized System of Preferences scheme variedfrom 20 to 40 per cent of the most favoured nation (m .f.n.) rates.  As a future  member of GATT and
the World Trade Organization, Bulgaria would ai m at further development of the process of
liberalization under the conditions and in conformity with the GATT 1994 and the Agreement
Establishing the WTO  Uruguay Round Agreement  rules and practices.
Surcharges
23.18 Some members requested information on the 3% import surcharge introduced in 1 August
1993 as well as the calendar for its elimination.  The representative of Bulgaria said that as of 1
August 1993, a temporary import surcharge was introdu ced in order to forestall the imminent threat
of a serious decline in the foreign exchange reserv es.  The surcharge affected equally all trade except
some products essential for the economy (energy products and base raw materials) and was appliedon an erga omnes basis including the trading partne rs with whom Bulgaria's commercial relations are
based on free trade agreements.  The representative of Bulgaria added that a schedule of elimination
was announced at the time of the introduction of the measure in 1993, and Bulgaria had complied
with this schedule strictly.   Until the end of 1993, the import surcharge was 3 per cent.  It had been
reduced to 2 per cent for the year 1994, and  to would be  1 per cent for 1995.  The import surcharge
would be eliminated as  discontinued from the beginning  of 1 January 1996.  In the view of Bulgaria,WT/SPEC/14
Page 21
the import surcharge was consistent with Article XII of the GATT 1994 General Agreement . Upon
request, Bulgaria would be prepared to enter into  consultations on this matter.  The Working Party
took note of this assurance.
Import Taxes
24.19 In response to questions concerning import taxes,  the representative of Bulgaria said that the
15 per cent import tax applied in 1991 in addition to  the import duty had been abolished with the
introduction of the new import tariff.  However, as  of 1 July 1992 an import tax had been introduced
for a limited number of agricultural  products.  The list had been reduced in 1993 and at present
import taxes were applied to frozen beef, veal, pork and poultry meat, yoghurt, butter, fresh grapes(from 1 July to 31 October), fresh apples (from 1 August to 31 December), fresh tomatoes,cucumbers, peppers, processed fruit, fruit juices.  The import tax was applied also on imports of some
perfumery and cosmetics items.  The import tax had varied from 5 per cent (juices and perfumes) to
25 per cent (frozen pork, veal, beef and poultry meat).  As of 1 July 1993, Bulgaria had either
eliminated or, in the case of a few agricultural ite ms, incorporated the import taxes into the customs
tariff.  This change was erga omnes and affected  trade under preferential agreements.  The Working
Party took note of this statement.  Finally, the representative of Bulgaria said that an import tax of
10 per cent of the customs value was payable on second-hand motor vehicles which had been
registered for not less than 10 years.
Duty Exemptions
25.20 Some members requested information on duty exemptions for certain imports , as w ell as
information on how tariff rate quotas were allocated .  The representative of Bulgaria said that some
goods were temporarily exempted from import duties for social and ecological considerations.  The
list of exemption s was being gradually reduced.  Exempted from duties were the imports of baby
food, raw materials and substances for the production of medicines, animal feed, farming equipment
and spares, plant protection chemicals and so me fertilizers, ambulance cars, equipment for
environmental protection as well as measurement and control devices for environmental analysis,
molasses, non-processed timber, medical appliances  and equipment.  All tariff exemptions were
implemented on a erga omnes basis without any diffe rentiation as to the origin and/or conditions of
importation.  The tariff rate quotas were allocated on a "first come, first served" basis.  The list of
products subject to temporary duty suspension or under tariff quotas were determined by the annexes
of the Regulation of the C ouncil of Ministers No. 307/1994.WT/SPEC/14
Page 22
Customs Fee
26.21 Referring to the 0.5%  customs fee levied by Bulgaria, some members stated that this fee was
not consistent to the provisions of Article VIII of the GATT 1994  General Agreement .  In their view,
minimum and maximum fees should correspond to the approximate cost of the services rendered.  In
response, the representative of Bulgaria recalled that customs valuation was based on the Agreementon Implementation of Article VII of the GATT 1994 .  He said that the initial
 as of 1995 the  customs
fee rate of  was set at  1% of the customs value  had been reduced to 0.5% .  with a maximum amount of
US$ 700.  This fee was applied to both exports and imports.  The amount paid pursuant to the fee
were at the disposal of the Gene ral Customs Directorate to cover th e respective administrative costs. 
After becoming a contracting party,  In this manner  Bulgaria would, at the latest 6 months after
accession,  had adapt ed the customs fee to and make it consistent with the cost of services limitation
requirement set out in  provisions of  Article VIII of the GATT 1994  General Agreement  while
continuing to comply with the provisions of Article VII of the GATT 1994 .  The Working Party took
note of these  assurances.
Export Taxes
27.22 In response to questions concerning the export taxes levied by Bulgaria and their rates, the
representative of Bulgaria said that as of November 1993 export taxes were levied on eleven groups
of product, notably raw materials su ch as sunflower seed and oil, hides and skins, timber, firewood,
wood in the rough, waste and scrap paper,  wool, grain flour and other products.  In reply to a question
asking why the export taxes were necessary, the representative of Bulgaria said that   these were
specific taxes applied to prevent or   t o relieve critical shortages of foodstuffs and other essential
products , consistent with Article XI of the GATT 1994 .  This tax was temporary and would be
dismantled when the domestic supply situation im proved. The Working Party took note of this
statement.
Implementation of Article X
28.23 The representative of Bulgaria confirmed that all regulations and measures of an economic
nature or affecting trade were published in the "State Gazette" prior to implementation, and that
Bulgaria would apply the provisi ons of Article X and other GATT 1994  provisions on transparency
and notification from the date of its accession to the  Agreement Establishing the WTO  General
Agreement.  Moreover, upon becoming a member of  After accession to  the Agreement Establishing
the WTO  World Trade Organization , Bulgaria would comply with  fulfil  the notification requirements
under the WTO Agreement and provide the necessary information and documentation wheneverWT/SPEC/14
Page 23
required under WTO.   agreed in the Uruguay Round . The Working Party took note of these
assurances.
III IV Fiscal Policy
29.24 In response to some members who requested in formation concerning internal taxes and the
treatment of imports in Bulgaria's fiscal legisl ation, including the treatme nt of inputs and other
exemptions thereof, the representative of Bulgaria sa id that fiscal policy was playing a crucial role in
the stabilization and restructuring effort.  Its pr incipal objectives were to contain and reduce the
budget deficit in relation to GDP, to reduce the redi stributive role of the State budget through a sharp
decrease of both revenues and expenditures in re lation to GDP, and to contribute to keeping
inflationary processes under control.  Important  steps had been taken in the context of a
comprehensive fiscal reform in line with the principles of a market economy and Bulgaria had
introduced a value-added tax.  The percentage of revenues form taxes and other duties in relation toGDP had fallen from 42.9 per cent in 1990 to 29.8 per cent  in 1992 and to 32.2 per cent for 1993. 
30.25
Pursuant to the Law on Excise Tax, effec tive on 1 April 1994, the following goods and
services are subject to excise tax at the rates listed below:
A.GOODS:
1. Beer - ordinary 1.5 BGL/litre; 2. Beer - stabilized - 2 BGL/litre; 3. Wines - up to 15%, vol. with the
exception of natural sparking wines - 6 BGL/litr e; 4. Ordinary brandies from fruits, ordinary
brandies, desert and aromatized wines, natu ral sparking wines, natural fruit liquors - 30
BGL/litre; 5. Alcoholic beverages including brandy and wine brandy - 40 BGL/litre; 6.
Luxurious beverages with high content of al cohol including whisky and cognac (V.S.O.P.) -
160 BGL/litter; 7. Tobacco products: 7.1.  Ci garettes - Luxurious - 1000 BGL/1000 pieces, 
7.2. Cigarettes - representative  - 600 BGL/ 1000 pieces, 7.3. Cigarettes - ordinary - 300
BGL/1000 pieces, 7.4. Cigarettes without f ilter - 100 BGL/1000 pieces, 7.5. Cigars - 400
BGL/100 pieces, 7.6. Tobacco for cigarettes, pipe s, for chewing and snuff - 1000 BGL/1 kg.;
8. Coffee and tea (with the exception of the he rb and fruit teas) - 30%; 9. Leather and fur
clothing - 40%; 10. Passenger cars with  a cylinder capacity from 1800 to 2500 cm3 - 10%; 11.
Passenger cars more than 2500 cm3- 40%; 12. Articles of precious metals, including
jewellery - 20%; 13. Perfumery and cosmetics in aerosol containers - 40%; 14. Gasoline withan octane number up to 96 - 70%, 14.1. Lead free gasoline with an octane number up to 96 -60%; 15. Gasoline with an octane number mo re than 96 - 110%, 15.1. Lead free gasolineWT/SPEC/14
Page 24
with an octane number more than 96 - 100%; 16. Diesel fuel - 30%; 17. Erotic and
pornographic works - 70%; 17. Audi o - visual devices - 10%;
B. SERVICES:19. Entry tickets for bars, music halls, erotic and other like performances - 50%;C.WINES AND OTHER SPIRITS PRODUCED BY NATURAL PERSONS FROM THEIR OWN
PRIME MATERIALS FOR THEIR OWN CONSUMPTION:
20. Wines - 2 BGL per litre;  21. Brandies  - 0.3 BGL per every alcoholic degree.
D. HAZARDOUS GAMES:22. Lotteries and raffles 50%; 23. Bets on the results  of competitions and other accidental events -5
time the max. gain; 24. Coin and disk operated games, class B 15000 BGL each threemonths;  25. Coin and disk operated games, class C in casino 30000 BGL each three months;
26. Casino roulettes - 3000000 BGL each three m onths; 27. Other casino operated games and
tables 500000 BGL each three months; 28. Bingo 300000 BGL each three months.
31.26
The representative of Bulgaria added that the Law on Value Added Tax (VAT) had entered
into force on 1 April 1994.  The Law had established a uniform 18% rate for goods and services with
a short list of temporary exceptions including a sc hedule for their elimination. Bulgaria had submitted
detailed information on the Law on VAT.  In response to a question, the representative of Bulgaria
stated that t he VAT and excise tax laws made no differentiation between imported and domestically
produced goods.  Some members said that in the area of certain distilled spirits significant volume
importations tended to be more heavily taxed than domestic products.  The representative of Bulgaria
replied that the products subject to excise taxa tion were described by their physical commercial
characteristics and not in terms of origin.  Bulgaria 's excise tax regime complied with the m.f.n. and
national treatment.  Domestic and imported goods were  subject to equal excise tax rates.  Concerning
VAT, he said that no exemptions were provided for domestic agricultural products sold by producers.
 There was a temporary list of some food products namely, bread, milk, cheese which were not
subject to VAT until the VAT law had been in pl ace for three years.  This temporary exemption
applied to both domestic and imported products. 
32.27 In conclusion some members of the Working Part y said that, in their view, Bulgaria levied
some border charges which, if not cons istent with the provisions of the GATT 1994 General
Agreement , should be either modified, or eliminated as  a result of Bulgaria's commitments in the
Protocol of Accession.  Those me mbers acknowledged, nonetheless, that the new Value Added Tax
Law had greatly improved the transparency and equity of Bulgaria's tax system vis-a-vis imports. The representative of Bulgaria said that upon accession to the Agreement Establishing the WTOWT/SPEC/14
Page 25
General Agreement , his Government would use the author ity to apply taxes and surcharges on
imports and exports in conformity with the provisions of the GATT 1994 General Agreement , in
particular Articles III, VI, VIII, XII, XVIII and XIX thereof .  The Working Party took note of these
commitments. 
VIV  Non-Tariff Measures
Import and Export Licensing
33.28 Some members of the Working Party requested that Bulgaria provide a list of non-tariff
measures by tariff lines including licensing, quotas  and any other restrictions and explain their
justification.  In their view a number of the quot as and licensing requirements on products such as
tobacco, citrus, etc. appeared to be substantively a nd/or procedurally not in conformity with existing
GATT or future  WTO obligations.  In response the representative of Bulgaria submitted a list of non-
tariff measures by tariff lines, including the list of products subject to automatic and non-automatic
import licensing.   With regard to licensing, he said that the Council of Ministers was the body
authorized to determine the range of goods subject to licensing.  Licensing was applied in a fair and
equitable manner.  The information that is strictly necessa ry for a licensing regime in accordance
with Article 1.5 of the Agreement on Import Licensing Procedures was required to be submitted in
support of an application for a licence, for instan ce commercial and tax registration certificates, and
documents necessary to certify the date in  the import licensing application form.  Automatic licences
were applied for monitoring purposes and were i ssued within one day. Non-automatic licences were
granted within five working days from the date of application.  No fees were charged for the issuing
of licences.  Licences were issued by  the Ministry of Trade.  The import licensing regime in force has
been established by Government Ordinance No. 72/1993 (published in State Gazette No. 30/1993)
and its respective amendments.  Imports into Bulgaria were liberalized and were not subject to importlicensing, unless explicitly stated.  Exceptions were s tipulated for  (a) goods subject to control regime
under international commitments undertaken by Bulg aria;  (b) goods under quantitative restrictions if
import quotas were established.  Automatic licensing was applied for monitoring purposes on importsof the following items: coal, crude oil and liquid fuels, alcoholic beverages, meat, dairy products,
ferrous and non-ferrous metals  tobacco products .  Imports of tobacco products (HS Chapter 24),  and
alcoholic beverages (HS 22030000, ex2204, 2205, 2207, 2208) were subject to automatic licensing
for monitoring purposes.  There had been import quota of 12,000 tons for tobacco (HS 2401,
24039100).  This quota had been eliminated by th e end of 1993.  Exports of tobacco and products
thereof (Chapter 24 of the HS) were subj ect to automatic licensing.  Imports of nuclear materials,
dangerous waste, plant protecti on chemicals, asbestos, and manuf actured tobacco, tobacco products,
natural gas, etc.  were subject to non-automatic licensing.  Imports of  essential oils were not subjectWT/SPEC/14
Page 26
to licensing.  The restrictions on tobacco and products thereof had been introduced on the ground that
certain imports, by the quantity and conditions under which they were performed, caused orthreatened to cause a serious injury to domestic  producers of like or directly competitive products. 
The non-automatic licensing of imports of pharmaceu tical products, raw materials and substances for
their production was aimed at prot ecting human and animal health.  The measure was applied for
monitoring purposes and did not constitute a disguise d restriction on trade.  The sole requirement for
granting the licences was the registration of the product with the Ministry of Health.  He added that at
present there was no product prohibited for import in Bulgaria.  However, imports of materials and
waste dangerous to the environment were subject  to non-automatic licensing, and to approval in
writing from the Ministry of Environment.  The im portation of plant protec tion chemicals had to be
approved by the Ministry of Agriculture.  The appr oval was subject to the chemicals being registered
in Bulgaria.  Import licenses were granted by the Ministry of Trade within 5 days from the
application.
Import and Export Quotas
34.29 Some members enquired about the GATT  consistency of certain quotas with the GATT 1994 .
 In response the representative of Bulgaria said that pursuant to the Law on Establishment of Single-
person State-owned Enterprises (State Gazette 55/ 1991), the Bulgarian Government could establish
quantitative restrictions on imports and exports.  As of 1 January 1994 Bulgaria applied an importquota on the following produc t only: HS 21050000, ice cream ready for consumption , 1,500 tons. 
The import quota on ice cream had been introduced  by the Government on a temporary basis to
support an infant industry in an economy in transition.  The import ceiling was administered through
an import licensing system.  Bulgaria would consider the tariffication of this quota pursuant to the
terms of the Uruguay Round Agreement on Agriculture .  Due to a deterioration in the economic 
conditions for domestic production of tobacco in recen t years, and with the view to avoiding serious
social tension in some underdeveloped regions of  the country, the Government had replaced the
import quota on tobacco with import licensing.  The Government had established temporary
quantitative restrictions on certain exports, to ensu re adequate supplies in the domestic market and
prevent or relieve critical shortages.  Presently Bulgaria applied export quotas on the following items:
 ex 0104000 Female livestock for breeding, bovine live animals of more than 12 months:  4,800;  ex01042000 ex 0102 Ovine and caprine live animals, of  more than 18 months:  750.  Certain quota
amounts under VERs were defined in the respectiv e agreements: with the European Communities on
textiles and clothing, ferrous metals, live sheep and go at and meat thereof;  with the United States on
textiles and clothing;  with Canada on textiles a nd clothing.  A list of cereals essential for the
nutrition of the population as well as a few tariff lines covering basic fodder had been  were
temporarily prohibited for export.  With the exception of maize, the export ban on certain grains hadWT/SPEC/14
Page 27
been replaced by automatic licensing.   (till September 30, 1994 when the new crop was expected) . 
Some tariff  lines of scrap were under  An export ban for ferrous and  non-ferrous scrap and copper
ingots and billets was in place except for stainless steel scrap  with the view to solving transitional
problems in the economy.  Export restrictions were applied to Christmas trees, and rough hewn
timber because they were exhaustible natural resour ces;  and to sunflower seeds because they were an
essential foodstuff in critical shortage.   The agricultural export restrictions currently in effect were
temporarily applied to prevent or relieve criti cal shortages on the domestic market and would be
dismantled in response to an improved domestic market situation.
35.30 In conclusion the representative of Bulgaria c onfirmed that in the context of its accession to
the Agreement Establishing the WTO  General Agreement and also as a member of the World Trade
Organization , the Bulgarian Government would use its au thority to suspend or prohibit imports and
exports or otherwise restrict their quantities in conformity with the provisions of the GATT 1994
General Agreement  in particular Articles XI, XII, XIII, XIX, XX and XXI. The Working Party took
note of this commitment.
Unfair Trade Practices and Safeguards  Agreement on Implementation of Article VI of GATT
1994 and Agreement on Subsidies and Countervailing Measures
36.31 In response to questions concerning Bulgaria 's regulations on safeguards and unfair trade
practices, the representative of Bulgaria said that  the Regulation of the C ouncil of Ministers No. 181
dated 15 September 1993 which had established the general legal framework attempted to incorporatethe basic elements of the relevant GATT 1994  provisions including in particular the Agreement on
the Implementation of Article VI of the GATT 1994 and the Agreement on  Subsidies  and
Countervailing Measures Interpretation and Application of Articles VI, XVI and XXIII .  The
Regulation contains definitions of  dumping, subsidy, serious injury, the extent of the offsetting
measures (duty) and the procedures to be followed in order to apply the offsetting measures.  Underthe provisions of the Regulation, an anti-dum ping duty may be imposed on any product whose
importation in Bulgaria through the effects of dumping causes or threat ens to cause serious injury to a
Bulgarian industry. A product is considered as bein g dumped if its export price to Bulgaria is less
than the normal value of the like product in the ordina ry course of trade in the country of origin or
export. A countervailing duty may be imposed for th e purpose of offsetting the effect of a subsidy
bestowed in the country of origin or export whose importation in Bulgaria causes serious injury to a
Bulgarian industry. The Regulation stipulates that the determination of serious injury shall be made
only if the dumped or subsidized imports through th e effects of dumping or subsidization are causing
injury. Injuries caused by other factors which indivi dually or in combination also adversely affect theWT/SPEC/14
Page 28
Bulgarian industry under consideration must not be attributed to the dumped or subsidized imports. 
Up to now safeguard measures had only been implemented on the imports of matches where a
reference price had been established.  
37.         Some members of the Working Party expressed c oncern that the provisions of the Regulation
were imprecise and did not reflect the precise requirements of the Agreement on Subsidies and
Countervailing Measures and the Antidumping Ag reement in matters such as conversion of
currencies, sales below cost, price averaging, domestic judicial review, time limits, etc.  The
representative of Bulgaria said that when certain provisions did not specify  particular procedures,
administrative practice would ensure complian ce with the requirements of the Agreement on
Implementation of Article VI of the GATT 1994 (Antidumping Agreement).  Subsequent
amendments to the Regulation to make it compa tible with the WTO Agreement on Subsidies and
Countervailing Measures and the Antidumping Agreement were currently under consideration. 
Finally, the representative of Bulgaria said that pur suant to Article V, paragraph 4 of the Constitution
duly ratified and published international treaties became part of domestic law, and had priority over
the rules of domestic law in the event of a cont radiction.  Thus, compatibility with WTO obligations
would be guaranteed in a general way through th e ratification of the accession of Bulgaria to the
WTO by the National Assembly.
38.32 In response to questions by members of the Working Party, the representative of Bulgaria
said that as a result of the price liberalization, s ubsidies had been drastically curtailed - from 16-17
per cent of GDP in 1990 to less than 2 per cent of GDP in 1992 and 1.69 per cent in 1993.  Since1991, no export subsidies were being applied in Bulgaria.  Some members requested clarification of
this statement.  The representative of Bulgaria  stated that no subsidies contingent on export
performance,  Government export credits at more favourable than ordinary rates, tax exemption
schemes related to the production and distribution of  exported products were made available.  The
statement did not envisage explicitly the provisions  of Article 3 of the Subsidies and Countervailing
Measures Agreement.  Bulgaria would apply Artic le 29 and the respective provisions of Articles 3,
and 6.1 of the Subsidies and Countervailing Measures Agreement.  As a country in the process of
transformation from centrally planned into a market  and free enterprise economy, Bulgaria would like
to benefit from the special treatment provided in Article 29 of the Subsidies and Countervailing
Measures Agreement, upon appropriate notificati on.  The representative of Bulgaria noted that
production subsidies were applied primarily for:  (i) compensating higher production costs in some
vital sectors (energy and transportation) with c onsiderable social implications;  (ii) social
considerations (including support for producers in mountainous regions and for disadvantaged
regions of the country).  The Bulgarian Governme nt would continue its policy of further scaling
down subsidies.  He added that as a result of the unprecedented scale of economic reform andWT/SPEC/14
Page 29
exclusively to alleviate social problems the fo llowing sectors of the economy received financial
assistance from the State:  (i) Energy production:  The 1993 5 State budget allocated 2590
3564 million BGL for the production of energy.  Self -financing of energy production was envisaged
in the future.  (ii) Agriculture.
Agreement on Agriculture
39.32     In documents Spec(95)4 and addenda and WT/SPEC/ 12, the representative of Bulgaria
submitted the Agriculture Country Schedule of Bulgaria .  In response to some members, he explained
the meaning of the terms applied administered pr ices, external reference price and product specific
bonus used in some of the supporting tables.  He c onfirmed that the system of reference prices had
been eliminated as of 1 January 1995.  Since 1991, Bulgarian agriculture was undergoing a reform
process consisting of the restitution of land and the privatization of the food industry.  The collapse
of the former centrally planned economy and the lack  of proper market structures had led to a drop in
agricultural production.  The main instrument fo r support of agriculture in the 1991-1994 period was
the  subsidization of the interest rate.  The level of the AMS relative to GDP in the agriculture sector
for the period 1991-1994 was as follows:
Year GDP agriculture AMS (%)
1991 993 mln.XEU 161.7  mln.XEU 16
1992 791 mln.XEU 156     mln.XEU 19
1993 837 mln.XEU 130.4  mln.XEU 16
1994 1 150 mln.XEU 69.3  mln.XEU 6
The representative of Bulgaria added that the 1993 State budget had allocated 964 million BGL as
technical assistance for the agrarian reform that in cludes:  Restoration of the property rights on farm
lands;  Legal procedures at the established Commissi ons for the restoration of the lands and at the
courts.  For the land owners there was a five-year income tax and profit tax relief from the entry intoforce of the Law on the Ownership and Use of  Agricultural Land, i.e. from 1 March 1991. The
recovery of the ecologically polluted areas was fi nanced by the State.  The 1993 State budget had
allocated 63 million BGL in subsidies for the m ountainous areas, the break-down of the amount was
as follows:  transportation of bread: 15 million BGL;   transportation of other basic foodstuffs: 48
million BGL.  Other assistance granted to agriculture  in 1993 was as follows:  (1) 1 billion BGL -  for
credits,   (2) 750 million BGL - for the constructi on, reconstruction, modernization and maintenance
of the irrigation system;  (3) 276 million BGL - for fi nancing expenses in the veterinary field; (4) 22
million BGL - allocated under the Law on the preserva tion of cultivated lands and pastures (ArticleWT/SPEC/14
Page 30
15 and 17) for financing the soil conservation.  The representative of Bulgaria added that progress in
the restitution of arable land had necessitated the establishment of support for the emerging
agriculture sector.  Because of the reform of the agricultural sector, an "Agricultural Fund" had been
established in 1995.  The Fund directed a certain pe rcentage of GDP for ag ricultural support through
guaranteed minimum prices, export subsidies, subsid ies for fuel, storage and other related activities. 
In addition, proceeds from the privatization of the food industry would also be allocated for
agricultural development.  Tobacco growers also received  support.   There were no export subsidies
in Bulgaria.   He added that Bulgarian law ensured non-discriminatory access to credits.  As banks
determined their credit policy independently, th e access to credits did not depend on the type of
ownership of the borrower.  Priv ate and State-owned companies as well as joint ventures had equal
access to credit. There was no obligation for the ba nks to make loans to State enterprises as a
percentage of the bank capital or on any other basis.  In 1992 Government support amounting to 16
million BGL had been extended to private Small and Medium-size Enterprises.
40. The representative of Bulgaria confirmed that after accession to the Agreement Establishing
the WTO  GATT , his Government would observe the provisions of Article XVI of the GATT 1994 ,
including the notification pr ovisions of paragraph 1 of Article XVI of the GATT 1994 and of the
Agreement on Subsidies and Countervailing Measures.  In pursuance of the agriculture country
schedule, the Government of Bulgar ia would also comply with the provisions of the WTO Agreement
on Agriculture .  While acceding to the General Agreement, Bulgaria would also consider accession to
the GATT Subsidies Agreement.   The Working Party took note of these assurances.
Agreement on Safeguards
41.         Some members of the Working Party expressed concern that the administration of the Law on
Safeguards set out in Regulation No. 180 in some re spects such as the use of the designations critical
circumstances, market disruption, br oad section of consumers, provisional measures, etc. failed to
conform to the provisions of the WTO Agreem ent on Safeguards and requested clarification
concerning Bulgaria's safeguards regime.  In res ponse, the representative of Bulgaria said that the
Ministry of Trade and Foreign Economic Coopera tion was the authority competent to make the
serious injury finding (Article 5, paragraph 1 of  the Regulation).  For the purpose of conducting the
investigation an ad-hoc commission is establishe d including representatives of the Ministry of
Industry, the Ministry of Agriculture and the F ood Industries, the Ministry of Finance (General
Customs Directorate), the Minist ry of Foreign Affairs and the Ministry of Trade and Foreign
Economic Cooperation.  The investigation is car ried out under an administrative non-judicialWT/SPEC/14
Page 31
procedure.  The Council of Ministers is authorized to adopt the safeguard measure (Article 6 of the
Regulation).  The Ministry of Fi nance (General Customs Directorate) is empowered as to the
enforcement of the safeguard measure (§ 1 of the Transitional and Final Provisions of the
Regulation).  During safeguard investigations, the authority was required to give interested parties
opportunities to make submissions.  The authority wa s required to establish that there had been a
volume increase in either absolute  or relative terms, and that those imports had, through factors such
as loss of production, productivity, decline in capacity utilization, etc., had caused serious injury to
the domestic industry.  When an allegation of a thr eat of serious injury was made, the investigating
authorities were required to examine whether it was cl early foreseeable that the rate of imports would
increase, and that actual injury was likely to re sult.  The current Regulation provided a maximum
period of two years for the application of safegu ard measures.  A safegu ard measure could not be
renewed,  however, if a safeguard measure was in place for less than two years, it could be extended.
   The representative of Bulgaria stated that th e Regulation establishing the regime did not presently
permit the taking of provisional measures.  Amendments were currently being prepared to make the
Regulation fully compatible with the Agreement on Safeguard Measures, in respect of provisional
safeguard measures.   Up to now safeguard measures had only been implemented on the imports of
matches where a reference price had been established.
Agreement on Technical Barriers to Trade   Standards
42.34 Some members requested additional informa tion on standards and enquired how Bulgaria
intended to implement the requirements of the Agr eements on Technical Barriers to Trade Standards
and Sanitary and Phytosanitary Measures (SPS) .  In response, the representative of Bulgaria provided
information on the procedure in effect under the Implementation Rules concerning the submission of
the draft standards to the relevant governmental bodies;  the consideration of the comments received
the approval by technical standardization committ ees, the evaluation of the draft standards and the
final adoption by the Committee on Standardizati on and Metrology.  Under Regulation No. 1/1994 of
the Committee on Standardization and Metrolo gy (SG 7/1994) there was a mechanism for the
implementation of international and regional standa rds in the Republic of Bulgaria.  The Regulation
of the Council of Ministers on Cer tification of the Manufactured Produc ts in the Republic of Bulgaria
(SG 40/1988) laid down the rules for certification en suring a positive assurance of conformity with
the national standards ("technical regulations") by  a certificate and/or a verified compliance mark. 
He also provided information setting out the chan ges being made to the Bulgarian standards regime
which would be brought into conformity with the WTO Agreement.  The Bulgarian Committee on
Standardization and Metrology monitored international standards.  Bulgaria would  requested an 18
month transitional period for implementation of accept  the Agreement on Technical Barriers to TradeWT/SPEC/14
Page 32
and Sanitary and Phytosanitary Measures  when accepting the WTO Agreement .  Bulgaria explained
that it required the transitional period in order to re organize its national standards system, to be able
to comply with the notification requirements of the Agreement.  A draft regulation of the Council of
Ministers on Certification of Products for their Assessment for C onformity with Standards was being
prepared and a new Standardiza tion Law would be drafted base d on the ISO/IEC Code of Good
Practices for Conformity Assessment.  He noted that  Bulgaria would be prepared to comply with the
transparency requirements and the obligation to  establish an enquiry point.  Finally, the
representative of Bulgaria said that there were ot her acts relating to the sale of goods in the Republic
of Bulgaria (e.g. labelling, packaging, weights and measures, etc.).  These laws and regulations were
applied uniformly to domestic and imported products and were not administered so as to constitute an
arbitrary or disguised restricti on on international trade.  The Working Party took note of these
assurances.
Agreement on Sanitary and Phytosanitary Measures  (SPS)
43.34     Some members requested information on h ow Bulgaria intended to implement the
requirements of the Agreement on Sanitary and Ph ytosanitary Measures (SPS).  In response the
representative of Bulgaria said that Bulgarian sanitary and phytosanitary measures conformed in
principle with international standards, guidelines or recommendations.  Bulgaria was a signatory to
the following conventions and agreements in this  field:  Codex Alimentarius;  International
Agreement for the Establishment of the Internationa l Office of Epizootics;  International Convention
for Plant Protection;  Convention on the Establis hment of the European and Mediterranean Plant
Protection Organization;  Convention on the International Trad e in Endangered Species of Wild
Fauna and Flora.  Improvements might be necessary in some areas, e.g. the publication of regulations,
in particular to allow a reasonable interval betw een the publication of a sanitary or phytosanitary
measure and its entry into force.  However,  such improvements which would fundamentally
strengthen transparency did not c ontradict the existing regulations in  Bulgaria.  Therefore, Bulgaria
did not expect substantial difficulties in adapting sanitary and phytosanitary regulations to the
requirements of the Agreement on SPS.  With refe rence to regulation No. 87 of 19 February 1993 on
quality control at the border, he said that the qua lity control was effected by the officers of the
Directorate of Border Quality Control within the Committee for Standardization and Metrology. 
Imports and exports were released at the border upon presentation by the exporter or importer of a
quality certificate or protocol for the preliminary test of samples.  Such certifi cates or protocols could
be issued by any authorized laborator y in the territory of the country.  He added that the draft Law on
Plant Protection was at an initial stage of preparati on.  The draft had been debated internally in the
Ministry of Agriculture and Food Industries and would be submitted to the relevant governmental
bodies.  The draft law was consistent with th e WTO Agreement on Sanitary and PhytosanitaryWT/SPEC/14
Page 33
Measures, as well as with the international conven tions for plant protection and quarantine of which
Bulgaria was a signatory.  The Working Party took note of these assurances.
Free Trade Zones
44.38 In response to questions concerning the free trade zones, the representative of Bulgaria said
that these zones had been established by Decr ee No. 2242 of 1987.  The Decree defines a free trade
zone as an area in which foreign economic entities or joint ventures may conduct economic activitieswithout the obligation to pay customs duties on their imports and with certain tax advantages.  There
was a 5 year profit tax relief for activities in the z ones.  Upon the expiry of the grace period, the rate
of the profit tax was 20%.  There was no time limit for the existence of the zones.  There were seven
free trade zones  in the regions of the cities of Rousse, Vidin, Bourgas, Plovdiv, Dragoman, Haskovoand Svilengrad.  The activities most common in the free trade zones included handling, storage andwarehousing.  Goods and services exported from th e free trade zones to the customs territory of
Bulgaria were subject to the customs duties, char ges and taxation currently in force in the customs
territory of Bulgaria, i.e. normal tariffs and ta xes were applied to exports from the zones into
Bulgarian customs territory.  There were no excepti ons to this rule. The representative of Bulgaria
added that as of 1 October 1993, the profit tax relief for firms that locate in the free trade zones was
no longer in effect.  The common profit tax of 40 pe r cent in force on the territory of Bulgaria was
applied.  However,  legal persons who had started using these incentives would continue to benefit
from them until the expiration of the period accord ed.  The Working Party took note of these
assurances.
State Enterprises
45.39 Recalling the provisions of Article XVII of the GATT 1994  General Agreement , several
members of the Working Party noted that while Bulgaria had abolished the State legal monopoly on
foreign trade at least 60 % of Bulgaria's exports and imports were still generated by State-ownedenterprises and in many cases were still carried out by the same trading enterprises that formerly had
defined and controlled this trade.  In the view of some members of the Working Party , a full
separation of the State from the still sizable and economically critical Stat e-owned sector did not
seem possible.  Even the current rules for the ma nagement of State-owned firms clearly contemplated
a role for the State in the operations of certain en terprises.  In addition Bulgaria's privatization
process was proceeding slowly.  Out of the 4,500 St ate-owned firms which would be transferred to
private ownership under the Law on Transformati on and Privatization of State and Municipal
Enterprises, Bulgaria was still in the early stages of  preparing some of them for sale.  These membersWT/SPEC/14
Page 34
requested that Bulgaria provide full details of th e role of the State in management and decision
making in enterprises wholly or substantially owned by the State, and the products which they traded.
 In this regard special reference was made to  the State trading companies on tobacco and tobacco
products (Bulgartabac) and wines and spirits (Vinimpex).
46.40 The representative of Bulgaria pointed out that as of 1 July 1991, the Commercial Law
(Company Act) was in force.  Pursuant to this law, economic activities could be carried out on the
basis of various forms of owners hip including private, municipal,  State and joint ventures with
foreign participation.  Article 1.1 of the Company Act defined the conduct of trade (domestic or
international) as "commercial activ ity".  To carry on that activity, businesses must be incorporated,
pursuant to the Company Act. This required that a ll natural and legal persons, whether Bulgarian or
with foreign participation, have their business entered in a commercial register held registered  at a
court  in a District Court.  Following  incorporation, businesses acquired had the right to carry out
economic activities, including foreign trade activity .  No companies had exclusive or privileged
import rights.  The importation of all goods may be effected by any economic entity, irrespective ofits ownership.  State-owned trading companies performed foreign trade activities solely on the basisof commercial considerations, competing with each other and with the private companies.  Noting
that State intervention in the economic activity of all companies had been abolished,  he reiterated
that Article 19 of the Constitution of Bulgaria states , inter alia, that the economy of Bulgaria is based
on the principle of the free entrepreneurship and th at the legislation shall create and assure equal
legal conditions for carrying out economic activ ities for all legal and natural persons, thus
establishing the principle of non-discrimination between State-ow ned and private enterprises.  
Therefore, State-owned enterprises were in a position to define independently their own market
behaviour, to implement it through the respective operational decisions and to conclude commercialtransactions of any kind in accordance with the cu stomary business practices and the legislation in
force.  Neither economic nor legal privileges were granted to them by the Government.  He addedthat at present there were no State trading monopolies in Bulgaria.  It seemed that Bulgaria had had
only one State trading enterprise w ithin the meaning of Article XVII of the GATT 1994 , Bulgartabac.
 There were no enterprises having the principal responsibility for import or export of any
commodities and products.  Neither private nor St ate-owned enterprises in Bulgaria were bound by
any obligation concerning production or trade in any products or goods, nor with respect to the
volume, value of trade, product composition of their sales and purchases, etc.  All enterprises acting
under Bulgarian legislation are entitled to include in the scope of their activities foreign trade with no
limitations with respect to the product coverage of their trade.  For the first half of 1993 according to
an estimate of the Ministry of Trade the following companies had had a significant activity in foreign
trade: Balcancar, Pharmachim, Nephtochim, Bulg artabac, Energoimpex, Chimimport, Kremikovtzy,WT/SPEC/14
Page 35
Ruen, Plama. The principal activity of some  of them (Balcancar, Pharmachim, Nephtochim,
Bulgartabac) was in the field of production.  A list of the enterprises in which the State had
ownership participation was in preparation,  even though there were difficulties, resulting from the
changes in the statistical system, and of the id entification numbers of enterprises.  The Law on
Commerce and the Law on the Protection of Compe tition did not permit the Government to instruct
State-owned enterprises in the conduct of domestic or foreign trade operations.  The Government was
not in a position to prevent any enterprise unde r its jurisdiction from acting as normal market
operators in accordance with th e principles of Article XVII of the GATT 1994 and especially with its
paragraph 1 (c).  All other laws, ordinances and regulations dealing with the activity of the economic
operators in Bulgaria were consistent with the Law on Commerce and provisions of the Constitutionwhich excluded State monopolies on trade. 
47.41
The representative of Bulgaria added that w ithin the meaning and under the conditions set
out in Article XVII of the GATT 1994 , Bulgaria had had only one State-trading company,
Bulgartabac, which according to the 1947 Law on State Monopoly on Tobacco had exclusive rights
on trade in raw tobacco and the manufacturing of tobacco products.  However, the 1947 Law on State
Monopoly on Tobacco had been repealed by the 1993 Tobacco and the Tobacco Products Act and the"Bulgartabac" enterprise had been transformed in to a holding of smaller joint-stock and limited
liability companies registered under the 1991 Law on Commerce. Bulgartabac did not have dominantmarket positions in internal and foreign trade in  tobacco products but enjoyed a dominant position in
the production of tobacco products and trade in raw tobacco.  Vinimpex did not have a monopoly
position in foreign trade in wines and spirits. Vini mpex could not be considered a State-trading
enterprise within the meaning of  Article XVII as it was not granted by the State any exclusive or
special privileges and had statutory author ity for deciding on imports and exports.   T h e
representative of Bulgaria additionally noted that parts of Vinimpex had recently been privatized. 
"Vinimpex" continued to trade in alcoholic be verages but did not have a dominant position on the
market.  It was one of the many companies that trad e in alcoholic beverages.  He reiterated there was
no State monopoly in trade in alcoholic beverages in Bulgaria.  As of November 1990, the Council of
Ministers had discontinued the existence of the en terprise Vinprom, and the producers of wines and
alcoholic beverages were registered as independent  legal persons with the right to conduct foreign
and domestic trade on their own or through intermedia ries.  Any firm or individual was free to import
alcoholic beverages.  The 1992 imports of alcoholic beverages effected by private companies hadaccounted for 75.8 per cent of  total imports of alcoho lic beverages.  He noted also that in 1992 noted
also that the share of some of the former ma jor foreign trade organizations responsible for
agricultural commodity imports and exports had been as follows:WT/SPEC/14
Page 36
Company Commodity Imports Exports
BULGARPLODEXPORT fresh vegetables 0 0.73%
L B BULGARICUM dairy products 3.84% 7.99%
BULGARIAN MEAT Co live animals and meat
thereof0 4.74%
RODOPAIMPEX live animals and meat
thereof4.24%
48.41 In conclusion the representative of Bulgaria undertook to submit at the time of accession a
comprehensive list of State-trading enterprises gran ted exclusive or special privileges and thus falling
under the relevant provisions of the GATT 1994 General Agreement  in particular Article XVII
thereof.  He noted, however, that Bulgaria would abide by the substantial obligations of Article XVII
of the GATT 1994  but would not wish to undertake additiona l obligations concerning the ownership
or management regime of the State-ow ned enterprises which would go beyond the GATT and WTO
rules , principles and requirements of the Agreement Establishing the WTO  and the GATT 1994 . 
The Working Party took note of these assurances.
VIV  Trade Agreements
Regional Trade Agreements
49. Some members of the Working Party expresse d the concern that the relatively high and
recently increased m.f.n. tariff levels would lead to  trade distortions against Bulgarian m.f.n. trading
partners and requested detailed information and trad e data on the agreements establishing preferential
access to the Bulgarian market.  In response the representative of Bulgaria said that in March 1993,Bulgaria had signed the Europe Agreement w ith the European Community providing for the
establishment of a free-trade area in a ten-year  period.  This Agreement would eliminate trade
barriers for industrial goods and improve market access for agricultural products.  The process oftrade liberalization was asymmetrical due to the economic disparities between Bulgaria and the EC. Also in March 1993, Bulgaria had signed a Free Tr ade Agreement with the EFTA States covering
trade in industrial products, fish and processed agricultural goods.  The Agreement paralleled theEurope Agreement with the EC.  There was also an asymmetry in the implementation schedule oftrade liberalization in favour of Bulgaria.  Bila teral Agreements on trade in agricultural goods with
each individual EFTA State had been signed on th e same date.  Bulgaria's Free Trade Agreement
with Finland from 1974 would remain in force until the benefits under that Agreement wereWT/SPEC/14
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overtaken by the Agreement between Bulgaria and the EFTA States.  In 1992 Bulgaria's imports from
EFTA States and the EC had accounted for 6.8 per cent and 32.6 per cent respectively of total
imports.  Their relative shares had increased in 1992 as a consequence of the contraction of Bulgarian
trade and the partial reorientation to the OECD  markets following the CMEA dissolution.  The
representative of Bulgaria added that at this mo ment his Government was not in a position to submit
information on trade flows in the framework of the FTAs for the following reasons:  both agreements
had recently entered into force so there was not  enough empirical evidence for analysis;  the
implementation of both agreements had been strong ly hampered because of UN sanctions imposed on
Serbia and Montenegro, so trade flows were heavily  distorted;  the statis tical system was undergoing
a process of transformation.  However, new informa tion would be submitted as soon as available. The
representative of Bulgaria said that in Bulgaria's  view the free trade agreements were in conformity
with the rules and conditions of Article XXIV of the GATT 1994   General Agreement  and his
Government was ready to comply with the releva nt Understanding agreed in the context of WTO
Agreement.  The Working Party took note of these assurances.
Bilateral Trade Agreements
50.44 With reference to bilateral tr ade agreements, the representative of Bulgaria said that an
Agreement for Trade Relations between the Republic of Bulgaria and the United States had been
signed on 22 April 1991. By virtue of this Agreem ent the two countries had extended to each other
m.f.n. treatment.  As from 1 January 1991, trade w ith the former CMEA countries was conducted in
convertible currencies and at world prices.  The new trade agreements with the former CMEAcountries were consistent with the requirements of GATT 1994 and contained the m.f.n. clause. 
Identical trade agreements had been signed with some of the States of the former Soviet Union,
namely Belarus, Lithuania, Russia, and Ukraine.
VIIVI   Multilateral and Plurila teral Trade Agreements   MTN Codes
51.45     At the initial stages of the deliberati ons, s everal members of the Working Party  noted that
Bulgaria was a member of Tokyo Round Arrang ements on Bovine Meat and Dairy Products. 
Recalling that Bulgaria had had observer status in   a number of MTN Agreements, e.g. the Codes on
Import Licensing Procedures, Tec hnical Barriers to Trade, Subsidies and Anti-Dumping, these
members later on  requested that Bulgaria clarified its intentions as to joining the Multilateral Trade
Agreements negotiated in the context of the Uruguay Round as well as other agreements negotiated in
parallel, like the Government Procurement Agreement.   In response the representative of Bulgaria
informed the Working Party, that Bulgaria was read y,  to become a signatory to the Agreements onWT/SPEC/14
Page 38
Import Licensing Procedures and Customs Valuation  at the time of accession to the Agreement
Establishing the WTO, to accept the WTO Ag reement and the Multilateral Trade Agreements
annexed thereto.  In document WT/ACC/BGR/2, the representative of Bulgaria submitted detailed
information concerning the consistency of his country's foreign trade régime with the WTO
Multilateral Trade Agreements.   GATT and was considering becoming a signatory to the Agreement
on Technical Barriers to Trade .  With regard to the GATT Subsidies  Agreement  on Subsidies and
Countervailing Measures  and the Agreement on Implementation of Article VI of the GATT 1994
Anti-Dumping Agreement , he stated that in the context of the Uruguay Round results  some
transitional period s would be required taking into consideration the provisions for economies in
transition. He added that  Bulgaria would consider acceding to the Agreement on Government
Procurement after the adoption of the necessary lega l basis.  He recalled that Bulgaria was a member
of the Arrangements on Bovine Meat and Dairy Products and the Protocols thereof and that his
Government had signed, subject to ratification, the modified Plurilateral Trade Agreements in
Marrakesh.  Bulgaria would comply with the cond itions for membership in the WTO which included
acceptance of all the Multilateral Trade Agreemen ts.  The Working Party took note of these
assurances.
Agreement on Trade Related Investment Measures (TRIMs)
52.         In response to questions concerning the consistency of the foreign trade regime of Bulgaria
the Agreement on TRIMs, the representative of Bulgar ia said that current Bulgarian legislation did
not provide for local content and trade balancin g requirements.  Bulgaria would undertake not to
maintain measures inconsistent with the provisions of Articles III and XI of GATT 1994.  However,
due to the process of transition in the economy, if  need be when becoming a member of the WTO,
Bulgaria would notify within the prescribed time limits all the TRIMs being applied at that time
which would not be in conformity with the provis ions of the TRIMs Agreement, to benefit from the
two year transition period stipulated in this Ag reement.  The Working Party took note of this
statement.
VIII       Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS)
53.44     Some members of the Working Party requested information on Bulgaria's acceptance of
international agreements on intellectual property, the compliance with their substantive obligations,
the protection of computer programs , rental rights, the rights of pe rformers, the terms of protection,
the rights of broadcasters, compulsory licensing, exclusions from patentability, etc.   Concerning
TRIPS,  the representative of Bulgaria  he said that Bulgaria is a signatory to the following
international treaties, conventions and ag reements related to intellectual property:WT/SPEC/14
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A. World Intellectual Property Or ganization: 1. Convention Estab lishing the World Intellectual
Property Organization (since 8 January 1970);  2. Pa ris Convention for the Protection of Industrial
Property Ratification (since 13 June 1921);  3. Madr id Agreement for the Repression of False or
Deceptive Indications of Source on Goods (s ince 12 August 1975);  4. Madrid Agreement
Concerning the International Registration of Ma rks (since 1 August 1985);  5. Lisbon Agreement for
the Protection of Appellations of Origin and thei r International Registration (since 12 August 1975); 
6. Patent Cooperation Treaty (since 21 May 1984);  7.  Budapest Treaty on the International
Recognition of the Deposit of Microorganisms for th e Purposes of Patent Procedure (since 8 May
1978);  8. Nairobi Treaty on the Pr otection of the Olympic Sym bol (since 6 May 1984);  9. Bern
Convention for the Protection of Literary and Artistic Works (since 5 December 1921) ;  10. 
International Convention for the Protection of Performers, Producers of Phonograms and
Broadcasting Organizations, adopt ed at Rome on 26 October 1961;  and 11.  Convention for the
Protection of Producers of  Phonograms Against Unauthorized Duplication of Their Phonograms,
adopted at Geneva on 29 May 1971.  The Government of the Republic of Bulgaria intended to join
the Hague Agreement Concerning the International Deposit of Industrial Designs of
6 November 1925 .  B.  UNESCO :  1.  Universal Copyright Convention as revised at Paris on 24 July
1971 (since 5 December 1921).  The representative of Bulgaria said that in order to become a
member of the World Trade Organization, Bulgaria would accept the Agreement on Trade-Related
Aspects of Intellectual Property Ri ghts, including Trade in Counterfeit Goods (TRIPS) as well as the
General Agreement on Trade in Services (GATS)  set out in Annexes  1B and 1C  of the Agreement
Establishing the WTO Agreement Establishing the World Trade Organization .    The r epresentative
of Bulgaria said that the Law on Copyright a nd Neighbouring Rights and the Patent Law complied
with the rules of the TRIPS Agreement.  He conf irmed that an opportunity for judicial review was
provided.  He added  therefore, Bulgaria would adapt its domestic legislation as necessary.  The 1991
Law on Protection of Competition provides for th e protection of trade secrets.  The Law on
Protection of Competition has provisions on anticom petitive practices in contractual licences.  Under
Bulgarian legislation there were no restrictions on the licensing of intellectual property.  The
administrative system for enforcement of intellect ual property rights in place included units in the
Ministry of Culture (for copyright and neighbouring rights) and in the Patent Office (for industrial
property rights).  Under the Penal Code charges ma y be pressed against copyright infringers in case
they use illegally a trademark or service mark, appellation of origin or industrial design with the
purpose of unfair competition.  Article 227 of the Penal Code provides for such cases imprisonment
of not more than one year of community servi ce or a fine of 10,000BGLs.  The Law on Amendment
to the Penal Code adopted by the National Assembly on 17 May 1995 (SG 50/1995) had introduced
criminalization for copyright and neighbouring rights' infringers.  Bulgarian legislation provided for
the full ranges of relief required by the TRIPS Ag reement, with the exception of border measures. WT/SPEC/14
Page 40
The new draft Law on Customs in cluded specific provisions and procedures in compliance with
Articles 50-60 of the TRIPS Agreement.   The Working Party took note of these assurances. 
IXGeneral Agreement on Trade in Services (GATS)
54.44     Some members of the Working Party requested information concerning emergency safeguard
measures and restrictions on international paym ents and transfers for current transactions.   In
document WT/ACC/BGR/2, the representative of Bulgaria submitted a note concerning trade in
services.   Bulgaria also invited interested members to submit as soon as possible their request lists
concerning possible services commitments.   In document Spec(95)4, the representative of Bulgaria
submitted a revised draft schedule concerning initial commitments on trade in services which would
be annexed to the GATS.  The representative of Bulg aria said that in respect of emergency safeguard
measures and restrictions on international payments  and transfers for current transactions, Bulgaria
would comply with the GATS and the requirements specified thereunder.  He added that being an
economy in transition and having serious extern al financial difficulties, Bulgaria maintained
restrictions on capital transfers in order to ensure the maintenance of the level of financial reserves
adequate for the servicing of its external debt.  These restrictions were applied on a non-
discriminatory and temporary basis consistent with  the Articles of Agreement of the International
Monetary Fund.  The Working Party took note of these assurances.
Conclusions
55.46. The Working Party took note of the explanations  and statements of Bulgaria concerning its
foreign trade regime, as reflected in this report.  The Working Party took note of the statements and
assurances given by Bulgaria in relation to certain specific matters which are reproduced in
paragraphs 14, 23, 24, 26, 27, 28, 40, 42, 43, 48, 49, 51, 52, 53 and 54   11, 18, 19, 21, 23, 33, 35, 39,
40, 42  and 44   of this report.  The Working Party took note and noted that the  of the commitments
given by Bulgaria in relation to certain specific matters which are reproduced in paragraphs 21, 32
and 35  27 and 30  of this Report.  The Working Part y took note that these commitments had been
incorporated in Paragraph 2(a)  of the Protocol of Accession of Bulgaria to the WTO .
56.47.    Having carried out the examination of the foreig n trade régime of Bulgaria and in the light of
the explanations, statements, assurances, commitments and concessions made by the representative of
Bulgaria, the Working Party reached the conclusi on that Bulgaria be invited to accede to the
Agreement Establishing the WTO under the provisions  of Article XII.  For this purpose the Working
Party has prepared the draft Deci sion and Protocol of Accession re produced in the Appendix to thisWT/SPEC/14
Page 41
Report, and takes note of Bulgaria's Schedule of  Specific Commitments on Services (document .......)
and its Schedule of Concessions and Commitments on Goods (document ......) that are annexed to the
Protocol.  It is proposed that these texts be a dopted by the General Council when it adopts the Report.
 When the Decision is adopted, the Protocol of Accession would be open for acceptance by Bulgaria
which would become a Member 30 days after it accepts the said Protocol.  The Working Party agreed
therefore, that it had completed its work concerni ng the negotiations for the accession of Bulgaria to
the Agreement Establishing the WTO.  Having carried out the examination of the foreign trade regime
of Bulgaria and in the light of the explanations, assurances and commitments given by the Bulgarian
representatives, the Working Party reached the conc lusion that, subject to the satisfactory conclusion
of the relevant tariff negotiations, Bulgaria be in vited to accede to the Agreement Establishing the
WTO under the provisions of Article XII General Agreement under the provisions of Article XXX III.
 For this purpose the Working Party has prepared  the draft Decision and Protocol of Accession
reproduced in the Appendix to this  report.  It is proposed that these texts be approved by the Council
when it adopts the report.  When the tariff a nd services negotiations between Bulgaria and
contracting parties in connection with accession have been concluded, the resulting Schedules of
Specific Commitments on Services and Conce ssions and Commitments on Goods Schedule of
Bulgaria and any concessions granted by contracting parties as  result of negotiations with Bulgaria
would be annexed to the Protocol .  The Decision would then be submitted to a vote by contracting
parties in accordance with article XXX III.  It is pr oposed that those texts would be adopted by the
General Council when it adopts the report.  When th e Decision is adopted, th e Protocol of Accession
would be open for acceptance and Bulgaria would b ecome a contracting party [thirty days] after it
accepts the said Protocol.  Having regard to the Ministerial Decision of 14 April 1994 on Acceptance
of and Accession to the Agreement Establishing the World Trade Organization   (WTO), the Working
Party agreed that the market access and services  negotiations should be initiated and concluded
without delay in order that the GATT 1994 and GAT S schedules be submitted to the Preparatory
Committee of the WTO for approval in the near futu re, thus enabling Bulgaria to become an original
member of the World Trade Organization .  The Working Party agreed, therefore, that it had
completed its work concerning the negotiations fo r the accession of Bulgaria to the WTO Agreement.
                                                 [TO BE COMPLETED]WT/SPEC/14
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APPENDIX5
ACCESSION OF BULGARIA
Draft Decision
The General Council,
Having regard to the results of the nego tiations directed towards the accession of the
Republic of Bulgaria to the Agreement Estab lishing the World Trade Organization and having
prepared a Protocol for the Accession of Bulgaria.
Decide, in accordance with Article XII of th e Agreement Establishing the World Trade
Organisation, that the Republic of Bulgaria may accede to the Agreement Establishing the World
Trade Organisation on the terms set out in the said Protocol.
                                          
    5The draft Decision and Protocol of Accession have been revised in the light of consultations
concerning WTO Accession.WT/SPEC/14
Page 43
 PROTOCOL FOR THE ACCESSION OF BULGARIA
TO THE AGREEMENT ESTABLISHING THE WORLD TRADE ORGANIZATION
DRAFT
The World Trade Organization (hereinafter referre d to as the "WTO"), pursuant to the approval
of the General Council of the WTO accorded unde r Article XII of the Marrakesh Agreement
Establishing the World Trade Organization (hereinaft er referred to as the "WTO Agreement"), and the
Republic of Bulgaria, (hereinaft er referred to as "Bulgaria"),
Taking note of the Report of the Working Part y on the Accession of Bulgaria WTO Agreement
in document .......................................... (her einafter referred to as the "Working Party Report"),
Having regard to the results of the negotiations on the Accession of Bulgaria WTO,Agree as follows:
Part I -  General
1. Upon entry into force of this Protocol, Bulg aria accedes to the WTO Agreement pursuant to
Article XII of that Agreement and thereby becomes a Member of the WTO.
2. The WTO Agreement to which Bulgaria accedes shall be the WTO Agreement as rectified,
amended or otherwise modified by such legal instrume nts as may have entered into force before the date
of entry into force of this Protoc ol.  This Protocol, which shall comp rise the commitments referred to in
paragraph 55 of the Working Party Report, shall be an integral part of the WTO Agreement.
3. Except as otherwise provided for in the paragra phs referred to in paragraph 55 of the Working
Party Report:
(a) Those obligations in the Multilateral Trad e Agreements annexed to the WTO Agreement
that are to be implemented over a period of time starting with the en try into force of that
Agreement shall be implemented by Bulgaria as if it had accepted that Agreement on the dateof its entry into force.WT/SPEC/14
Page 44
(b) Those notifications that are to be made under the Multilateral Trade Agreements annexed to
the WTO Agreement within a specified period of tim e starting with the date of entry into force
of the WTO Agreement shall be made by Bulgaria  within that period of time starting with the
date of entry into force of this Protocol.
Part II - Schedules
4. The Schedules annexed to this Protocol sh all become the Schedule of Concessions and
Commitments annexed to the General Agreement on Tariffs and Trade 1994 (hereinafter referred to asthe "GATT 1994") and the Schedule of Specific Commitments annexed to the General Agreement on
Trade in Services (hereinafter referred to as " GATS") relating to Bulgaria.  The staging of the
concessions and commitments listed in the Schedules shall be implemented as specified in the relevant
parts of the respective Schedules.
5. For the purpose of the reference in paragraph 6(a) of Article II of the GATT 1994 to the date of
that Agreement, the applicable date in respect  of the Schedules of Concessions and Commitments
annexed to this Protocol shall be the date  of entry into force of this Protocol. 
Part III - Final Provisions
6. This Protocol shall be open for acceptance, by signature or otherwise, by Bulgaria until ..........
7. This Protocol shall enter into force on the th irtieth day following the day of its acceptance.
8. This Protocol shall be deposited with the Direct or-General of the WTO.  The Director-General
of the WTO shall promptly furnish a certified copy of this Protocol and a notification of acceptance by
Bulgaria  thereto pursuant to paragraph 6 to each Member of the WTO and to Bulgaria. 
9. This Protocol shall be registered in accordance w ith the provisions of Article 102 of the Charter
of the United Nations. 
Done at Geneva this .... day of .... one thousand nine hundred and ninety ......, in a single copy in
the English, French and Spanish languages, each text being authentic. WT/SPEC/14
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ANNEX I
SCHEDULE .... - BULGARIA
Part I - Goods
[To be circulated in document .... ]
Part II Services
[To be circulated in document .... ]
[TO BE COMPLETED]