ORDER OF THE GOVERNMENT OF THE KYRGYZ REPUBLIC

of April 18, 1998 No. 200

About results of the third meeting of working group of the WTO, bilateral negotiations with member countries of the WTO and measures for preparation of the fourth meeting of working group of the WTO

Having considered the report of the Interdepartmental commission under the Government of the Kyrgyz Republic on negotiations with the WTO on results of the bilateral negotiations with member countries of the WTO, the third meeting of working troupe of the WTO which were taking place from February 2 to February 7, 1998 in mountains. To Geneva, and the bilateral negotiations of the Kyrgyz Republic with member countries of the WTO which were taking place from March 9 to March 14, 1998 and also in view of importance of the entry of the Kyrgyz Republic into the World Trade Organization, the Government of the Kyrgyz Republic decides:

1. Approve the draft of the report on accession of the Kyrgyz Republic to the World Trade Organization according to appendix No. 1.

2. Approve protocols of bilateral negotiations of the Kyrgyz Republic with WTO member countries according to appendix No. 2.

3. Approve the list of specific obligations of the Kyrgyz Republic specified during the bilateral negotiations with delegations of member countries of the WTO held in February, 1998 on services according to appendix No. 3.

4. Accept the proposals of delegation of the Government of the Kyrgyz Republic on accession of the Kyrgyz Republic to sectoral initiatives approved with WTO member countries during negotiations according to appendix No. 4.

5. Approve answers of the Kyrgyz Republic to the questions of the USA, Japan and Australia concerning the mode of foreign trade of the Kyrgyz Republic according to appendix No. 5.

6. Approve the actions plan of the Government of the Kyrgyz Republic on accomplishment of obligations of the Kyrgyz Republic on reduction of the legislation of the Kyrgyz Republic in compliance with regulations and requirements of the WTO according to appendix No. 6.

Control of execution of actions of the Government of the Kyrgyz Republic for reduction of the legislation of the Kyrgyz Republic in compliance with regulations and requirements of the WTO to assign to the Ministry of Justice of the Kyrgyz Republic.

7. Approve the estimate of part of expenses of the Interdepartmental commission under the Government of the Kyrgyz Republic on negotiations with the WTO for 1998 according to appendix No. 7 and carry anticipated expenses in the amount of 172 thousand som for the reserve fund account of the Government of the Kyrgyz Republic.

8. Provide to the chairman of the Interdepartmental commission under the Government of the Kyrgyz Republic on negotiations with the WTO the right to make decisions during the fourth meeting of working group of the WTO and bilateral negotiations with WTO member countries in May, 1998.

9. Approve delegation of the Kyrgyz Republic for participation in the fourth meeting of working group of the WTO which will take place from May 3 to May 7, 1998 in mountains. To Geneva, in structure according to appendix No. 8.

10. Traveling expenses of members of delegation of the Kyrgyz Republic to charge to the relevant ministries and administrative departments of the Kyrgyz Republic.

 

Appendix №1

to the order of the Government of the Kyrgyz Republic of April 18, 1998 No. 200

Draft of the report on accession of the Kyrgyz Republic to the World Trade Organization

1. INTRODUCTION

1. On February 13, 1996 the Government of the Kyrgyz Republic submitted the application for the accession to the World Trade Organization (WTO). At the meeting on April 16, 1996 the General council of the WTO created working group for studying of the statement of the Government of the Kyrgyz Republic on the introduction in the Agreement of the WTO according to article XII and for representation in the General council of recommendations which can include the draft of the Protocol on the introduction. Membership in working group is open for all members of the WTO. Conditions of powers and membership in working group are reproduced in the document WT/ACC/KGZ/2/Rev.2.

2. Meetings of working group took place on March 10 and 11, 1997, on July 18, 1997, on February 5, 1998 and under the chairmanship of Mr. Dzh. - M. Mettsger (France).

2. DOCUMENTATION

3. At the Working group are had near at hand as basis for discussions the Memorandum of the Foreign trade Mode of the Kyrgyz Republic (WT/ACC/KGZ/3) and questions provided by members of the WTO on the foreign trade mode of the Kyrgyz Republic together with answers to them and other information provided by authorities of the Kyrgyz Republic. The government of the Kyrgyz Republic provided to the Working group the following documents:

- Constitution of the Kyrgyz Republic;

- Civil code of the Kyrgyz Republic;

Laws:

The law of the Kyrgyz Republic "About bankruptcy", become effective on October 15, 1994,

The law of the Kyrgyz Republic "About the principles of the budget" of January 10, 1994, No. 1357-XII;

The law of the Kyrgyz Republic "About certification of goods and services" of April 2 199b, No. 6;

The law of the Kyrgyz Republic "About commodity exchange and exchange trade in the Kyrgyz Republic" of June 29, 1992 No. 915-Х11;

The law of the Kyrgyz Republic "About protection of consumer's laws" of December 10, 1997;

The law of the Kyrgyz Republic "About concessions and the overseas concessionary enterprises" of March 6, 1992;

The customs code of July 30, 1997;

The law of the Kyrgyz Republic "About the general beginnings of privatization, privatization and entrepreneurship in the Kyrgyz Republic" of December 20, 1991, No. 683-Х11 (it is added and changed by the Law of the Kyrgyz Republic of March 6, 1992, No. 876-Х11; of July 2, 1992, No. 939-Х11; of May No. 1229-Х11 8; of January 12, 1994, No. 1382-Х11; of April 16, 1994, No. 1501-Х11; of June 23, 1995, No. 5-1; of September 28 and on the II of October, 1995, No. 30-1; the resolution of Jogorku Kenesh of the Kyrgyz Republic of January 12 1994, No. 1386-X11);

The law of the Kyrgyz Republic "About privatization and privatization of state-owned property" in the Kyrgyz Republic of January 12, 1994, No. 1385-Х11;

The law of the Kyrgyz Republic "About conservation", of April 17, 1991, No. 416-Х11;

The law of the Kyrgyz Republic "About foreign currency transactions" of July 5, 1995, No. 6-I;

The law of the Kyrgyz Republic "About free economic zones in the Kyrgyz Republic" of December 16, 1992, No. 1076 (with changes, the Law of the Kyrgyz Republic of March 15, 1996. No. 2);

The law of the Kyrgyz Republic "About health protection of the people in the Kyrgyz Republic" of July 2, 1992, for No. 943-Х11 (with changes the Law of the Kyrgyz Republic of December 18 of 1992, № 1091-X11);

The law of the Kyrgyz Republic "About insurance in the Kyrgyz Republic" of December 18, 1991, No. 670-Х11;

The law of the Kyrgyz Republic "About the conclusion, ratification, execution and denouncement of international treaties to the Kyrgyz Republic" of May 27, 1994,№ 1548-Х11;

The law of the Kyrgyz Republic "About ensuring unity of measurements" of April 2, 1996, No. 7;

The law of the Kyrgyz Republic "About medical insurance of citizens of the Kyrgyz Republic" (costituted by the resolution of the Supreme Council of the Kyrgyz Republic No. 949 - XII) of July 3, 1992 (with changes, the Law of the Kyrgyz Republic of July 28 and on September 26, 1995, No. 27-1);

the bill of the Kyrgyz Republic "About restriction of monopolistic activities and development and protection of the competition" of April 15, 1994;

The law of the Kyrgyz Republic "About non-tax payments" of April 14, 1994, No. 1481-XII;

The law of the Kyrgyz Republic "About regulatory legal acts of the Kyrgyz Republic" of July 1 1996, No. 34;

The law of the Kyrgyz Republic "About sanitary and epidemic wellbeing of the population of the Kyrgyz Republic" (costituted by the resolution of the Supreme Council No. 946-XII) of July 2, 1992;

The law of the Kyrgyz Republic "About securities and stock exchanges" of December 21, 1991;

The law of the Kyrgyz Republic "About standardization" of April 2, 1996;

The law of the Kyrgyz Republic "About the state fee" of December 16, 1992 No. 1072 - XII (costituted by the resolution of the Supreme Council of the Kyrgyz Republic of December 16, 1992, No. 1073-XII);

The law of the Kyrgyz Republic "About the State Tax Service" of March 6, 1992, No. 874-XII;

The law of the Kyrgyz Republic "About basic provisions of treasury of the Kyrgyz Republic" of May 28, 1994, No. 1553 - XII;

The law of the Kyrgyz Republic "About taxes on the companies, the organizations and associations" of December 17, 1991 No. 660-Х11 (with changes, the Law of the Kyrgyz Republic: of March 6, 1992, No. 872 - XII; of June 30, 1992, No. 925 - XII, on December 17, 1992, No. 1088 - XII. of May 8, 1993, No. 1237 - XII. of January 13, 1994, No. 1416 - XII, of May 25, 1994, No. 1525 - XII, of July 27 and on September 26, 1995, No. 25 - 1 and of June 26, 1996, No. 24);

The law of the Kyrgyz Republic "About taxes on the population" of December 27, 1991;

Presidential decrees of the Kyrgyz Republic

"About additional guarantees for foreign investors in the Kyrgyz Republic" of September 6, 1994;

"About state commission of the Kyrgyz Republic on foreign investments and the economic help" of July 27, 1992, No. 246;

"About measures of the organization of examinations of foreign investments" of September 9, 1992, No. 270;

"About change of procedure for licensing of raw materials, consumer goods and industrial goods" of September 23, 1992, No. 280;

"About changes in public administration of foreign economic activity in the Kyrgyz Republic" of February 9, 1993, No. 35 (with changes, presidential decrees of the Kyrgyz Republic of July 30, 1993, No. 219, on January 12 1994, No. 5, of March 23, 1994, No. 32, of February 9, 1995, No. 36);

"About streamlining of foreign economic activity in the Kyrgyz Republic" of April 2, 1992, No. 121;

"About measures for increase in coordination of processes of privatization and privatization with processes of attraction of foreign investments to the Kyrgyz Republic" of April 11, 1996, No. 140;

"About additional measures for introduction of the state monopoly for production, storage, realization of alcohol and alcoholic products" of May 13, 1996, No. UP-165;

"About measures for strengthening of control over the security market in the Kyrgyz Republic" of November 12, 1994, No. UP-301;

"About zone of attraction of foreign investments in the city of Bishkek" of December 9, 1994, No. 319;

"About some measures for protection and development of private entrepreneurship" of March 25, 1994, No. 34;

"About measures for enhancement of the taxation in agricultural industry" of February 27, 1995, No. 42;

Orders of the Government

of August 25, 1995 No. 373 "About strengthening of responsibility for unauthorized buying up, realization of scrap and waste of non-ferrous and ferrous metals and their industrial scrap" (with changes, the order of the Government of the Kyrgyz Republic of June 17, 1996, No. 268);

of September 12, 1995 No. 383 "About the program of the state investments for 1996-1998";

of October 23, 1995 No. 440 "About approval of the Regulations on procedure for deliveries of goods and provision of services within production cooperation of the companies and industries of the Kyrgyz Republic and other State Parties of the CIS;

of November 14, 1995 No. 484 "About formation of Consulting agency on the international purchases under General directorate of State commission of the Kyrgyz Republic on foreign investments of N of the economic help";

of February 2, 1996 No. 52 "About measures of extraordinary financial support of agricultural industry";

of December 2, 1996 No. 520 "About approval of the Regulations on procedure for control of products imported into the Kyrgyz Republic";

of July 18, 1994 No. 523 "About rates of award for public performance and other types of use of literary works and art";

of February 6, 1996 No. 56 "About export procedure and commodity import (works and services) in the territory of the Kyrgyz Republic";

of February 5, 1993 No. 57 "About procedure for the omission of goods, property, currency, automotor-vehicles and other values through customs border of the Kyrgyz Republic";

of February 6, 1996 No. 57 "About approval of the list of the countries users the scheme of preferences of the Kyrgyz Republic";

of December 27, 1995 No. 571 "About introduction of application of excise stamps on production, import and realization of tobacco products and alcoholic beverages in the Kyrgyz Republic";

of December 30, 1993 No. 613 "About temporary customs tariff of the Kyrgyz Republic" (with changes, the Orders of the Government of January 21, 1994, No. 26 and 28 of May, 1994, No. 358);

of August 18, 1992 No. 622 "About customs regime of conversion of raw materials supplied by the customer and goods in customs area of the Kyrgyz Republic";

of March 20, 1996 No. 119 "About approval of rules of the equipment of vehicles (containers) for transportation of goods with customs seals and seals";

of February 28, 1996 No. 82 "About the program of privatization and privatization of state-owned property in the Kyrgyz Republic for 1996-1997";

from of December 30, 1994 No. 901 "About streamlining of import (import) of goods, things and other objects by physical persons to the Kyrgyz Republic";

of March 22, 1992 No. 97 "About the main directions of foreign economic activity of the Kyrgyz Republic";

of January 9, 1996 No. 10 "About provisional regulations for application of excise seals on the oil products imported into the Kyrgyz Republic";

of March 30, 1992 No. 109 '"About approval of regulations on order of registration of securities, about procedure for issue of licenses for the right of conducting professional activity on securities, rules of collection of the registration fees of securities, issue of licenses and certificates for the right of conducting professional activity on securities and other charges, maintaining the unified state register of joint-stock companies, accounting and the reporting in joint-stock companies";

of January 24, 1994 No. 29 "About establishment of state regulation of production and realization of alcohol and establishment of control of production and realization of alcoholic drinks in the Kyrgyz Republic";

of March 14, 1994 No. 120 "About results of privatization and privatization in 1991-1993 and about the Program of privatization and privatization of state-owned property in the Kyrgyz Republic for 1994-1995";

of April 2, 1992 No. 121 "About streamlining of foreign economic activity in the Kyrgyz Republic";

of March 27, 1996 No. 135 "About refining of the list of subjects monopolists for 1996";

of April 5, 1996 No. 146 "About amendment of the List of the products (works, services) made in the Kyrgyz Republic and imported on its territory, which are subject to obligatory certification on indicators of safety, provided to introduction at III stage, approved by the Order of the Government of the Kyrgyz Republic";

of December 21, 1995 No. 559 "About the development program of export of the Kyrgyz Republic for 1996 and the medium term";

of May 16, 1995 No. 167 "About work of the Ministry of Communications of the Kyrgyz Republic on implementation of the first project of telecommunication in the republic financed by the World Bank / MAR and the European Bank for Reconstruction and Development";

of May 10, 1996 No. 209 "About the concept of development of the free and private market of trade in grain in the Kyrgyz Republic";

of April 28, 1994 No. 260 "About approval of the List of products of works, services), the obligatory certification on safety indicators made in the territory of the Kyrgyz Republic and imported on its territory, subject";

of July 7, 1995 No. 270 "About approval of the Procedure for charge and collection of the excise tax on the made and imported alcohols and alcoholic beverage products";

of July 7, 1993 No. 290 "About creation of Customs and tariff council under the Government of the Kyrgyz Republic";

of July 21, 1995 No. 298 "About introduction of state regulation of production, storage and realization of ethyl alcohol and alcoholic beverages";

of January 5, 1996 No. 3 "About approval of regulations on procedure for application of penal and economic sanctions for antitrust violation of the Kyrgyz Republic, price discipline and consumer protection":

of July 1, 1996 No. 300 "About the State customs inspection under the Government of the Kyrgyz Republic".

Instructions and Provisions

The instruction about carrying out personal inspection (The state customs inspection, the Order of September 17, 1993, No. 176-1);

The instruction about procedure for development, examination and approval of investment projects in construction in the territory of the Kyrgyz Republic of March 19, 1993, No. 99-r

About procedure for creation of commercial banks in the territory of the Kyrgyz Republic (it is approved by the resolution of board of National Bank of the Kyrgyz Republic of July 23, 1994, for No. 1/8, with changes and amendments of June 30, 1995, No. 16/4)

Procedure for receipt of payment for licensing;

Regulations on procedure for imposing of penalties and economic sanctions for violation anti-monopoly the Law of the Kyrgyz Republic, the Law of the Kyrgyz Republic on price control and on consumer protection (No. 3) is approved by the order of the Government of the Kyrgyz Republic of January 5, 1996,

Provisional regulations on selection achievements of July 24, 1995.

Rules of the equipment of vehicles (containers) for transportation of goods with customs seals and seals (it is approved by the order of the Government of the Kyrgyz Republic of March 20, 1996, for No. 119)

The bill of the Kyrgyz Republic "About anti-dumping"

The bill of the Kyrgyz Republic "About subsidies and countervailing measures"

The bill of the Kyrgyz Republic "About protective measures"

The civil code, Part II (Section "Intellectual property") of January 5, 1998;

The criminal code (Section "Intellectual property") of January 1, 1998.

The law of the Kyrgyz Republic "About copyright and the related rights" of January 14, 1998;

The law of the Kyrgyz Republic "About trademarks, service marks and the name of places of goods origin" of January 14, 1998;

The law of the Kyrgyz Republic "About the patent" of January 14, 1998;

The law of the Kyrgyz Republic "About the software for the COMPUTER and the database", accepted on March 2, 1998;

The bill of the Kyrgyz Republic "About topology of integral chips", approved on March 2, 1998;

The bill of the Kyrgyz Republic "About selection achievements"

The bill of the Kyrgyz Republic "About trade secret"

The law of the Kyrgyz Republic "About foreign investments" of September 24, 1997.

The law Kyrgyz, the Republics "About banks and banking activity" of July 29, 1997.

The law of the Kyrgyz Republic "About National Bank" of July 29, 1997.

The law of the Kyrgyz Republic "About pledge" of June 27, 1997

The law of the Kyrgyz Republic "About subsoil", of July 2, 1997.

The law of the Kyrgyz Republic "About state regulation of foreign economic activity" of July 2, 1997.

Changes to the Law of the Kyrgyz Republic "About customs tariffs" of July 30, 1997.

Changes to part one of the Civil code, on October 15, 1997.

The draft of amendments to the Law of the Kyrgyz Republic "About standardization"

The draft of amendments to the Law of the Kyrgyz Republic "About certification"

The draft of amendments to the Law of the Kyrgyz Republic "About veterinary science"

The draft of amendments to the Law of the Kyrgyz Republic "About quarantine of plants"

Draft of amendments to the Customs code

Draft of amendments to the Tax code

Draft of the resolution on import/export licensing

The draft of amendments to the Law of the Kyrgyz Republic "About free economic zones".

3. ECONOMIC POLICY

- System of currency exchange and payments

4. In response to requests to provide information the representative of the Kyrgyz Republic gave workgroup members that the National Bank of the Kyrgyz Republic (NBKR) pursues initiative monetary management for stabilization of the exchange rate of som. The Kyrgyz Republic does not set any exchange restrictions on the current account and cash transactions. Physical persons and legal entities can import and export foreign currency without restrictions provided that they specified the amount in the customs declaration.

5. The representative of the Kyrgyz Republic added that the Kyrgyz Republic entered the IMF on May 8, 1992. The Kyrgyz Republic assumed liabilities of article VIII of the Agreement of the IMF in March, 1995 and entered freely convertible currency. The quota of the Kyrgyz Republic constituted 64.5 million. Special drawing rights (SDR) (about one million 596) and its use of overdue loan of the IMF make 83.6 million SDR (about $120 million) now. Further he noted that on December 11, 1995. The International Monetary Fund (IMF) approved the credit of advanced funding mechanism for structural adjustment (MRFSP) * in the amount of SDR of 88.15 million.

* MRFSP - the concessionary tool of the IMF for rendering assistance to the developing members undertaking economic reforms on strengthening of their paying balance and assistance of growth.

Investment regime

6. Some workgroup members were interested whether there are any restrictions of national treatment on investments by foreign persons in the Kyrgyz Republic. Representatives of the Kyrgyz Republic noted that the new Law "About Foreign Investments" of September 16, 1997 provides guarantees of national treatment, equal and fair regime, and also complete and permanent protection of foreign investors. Exceptions of national treatment, according to the same Law, are restrictions which are connected with sewn up and protection of homeland security, health of the population and public morals, and all of them fall under exceptions of articles XX and XXI GATTs for 1994. At the moment no such restrictions are introduced. The law "About Privatization and Privatization of State-owned Property" of January 12, 1994 provides the right of the Government to impose restriction or to otherwise limit participation of foreign investors in the course of privatization of certain industries; however, the Government did not use such power yet. The Kyrgyz Republic will not apply such powers in such a way that would contradict its obligations as future member of the WTO. Foreign investors can freely repatriate the enclosed investments or the profit got in the Kyrgyz Republic in freely convertible currency.

7. Some workgroup members asked whether foreign investors are protected from expropriation and nationalization of the assets. In reply the representative of the Kyrgyz Republic specified that Article 7 of the Foreign investment law in the Kyrgyz Republic of June 28, 1991 guarantees protection of investments (foreign and internal) from nationalization, except case when (1) nationalization is necessary for protection of health and/or life of the population or for ensuring the state and public security from the threat proceeding from investment and (ii) the foreign investor refuses or cannot observe the decree of responsible state body to eliminate threat during the period of time specified in such decree. In case of nationalization or requisition of foreign investment according to the Foreign investment law it is required that compensation in the amount equal to actual value of this property was paid to the foreign investor. Such compensation shall is made in currency in which investment or - with the consent of the investor - in national currency of the Kyrgyz Republic was made. The foreign investment law created the rights of submission of claims to the Government and state bodies in commercial court of the Kyrgyz Republic.

8. In response to questions concerning land ownership for foreign investors the representative of the Kyrgyz Republic noted that according to the Constitution of the Kyrgyz Republic private ownership of the earth of individuals or the companies, foreign or local is forbidden. There are no plans to eliminate such restriction. Foreign citizens and legal entities can buy the residential real estate attached to the earth - such as apartments and houses - only according to the special government authorization. Foreign citizens and legal entities can lease real estate on those conditions, as citizens and legal entities of the Kyrgyz Republic.

9. The representative of the Kyrgyz Republic noted that the new Law "About Foreign Investments" was adopted in September, 1997.

State-owned property and privatization

10. The representative of the Kyrgyz Republic noted that plans of the Government for privatization are constituted according to industrial and sectoral priorities. In the energy sector it is planned to attract foreign investments for development of the hydroenergy equipment, to privatize the sectoral companies and to modernize and reconstruct systems of the power supply network. In the coal industry it is planned to reconstruct the sector and the sectoral companies, including reorganization and, if necessary, liquidation of the sectoral companies, to develop coal production by open method for reduction of production cost and development of technology of economy of electricity. In the oil and gas industry the construction and enforcement of two small overworking plants in the next two years and carrying out the international tender for the purpose of attraction of foreign investments in research and operation of oil and gas fields is planned, to hold the tender. In gold mining it is planned to attract foreign investments in research and operation of gold deposits. The non-ferrous metallurgy (mercury, antimony, tin and tungsten) will be reformed for attraction of foreign investments in development of antimonial and mercury metallurgical industry.

11. The representative of the Kyrgyz Republic added that in machine-building of N of metalworking industry the Government plans to reorganize production of machines, the equipment (and spare parts to them) for (i) conversion of agricultural products, (ii) of mechanization of small peasant and family economy and (iii) of use in the coal mining industry. The government also plans to reform electrotechnical industry for orientation of the companies on production of complex electric devices and the equipment for power industry. Light industry will be reformed for acceleration of structural adjustment of industry and for finding of the new markets and in the near and far abroad. More new equipment by means of the credits of Germany and Japan will be purchased. Food and processing industries will be reformed for installation of the small and medium production / overworking constructions on places for production of milk, meat, fruit and vegetables. The pharmaceutical industry will be reformed for attraction of foreign investments in domestic pharmaceutical industry generally and for completion of construction of the chemist - the pharmaceutical plant "Bishkekbiofarm". The agricultural sector will be reformed for attraction of foreign investments for the purpose of development of export-oriented agricultural enterprises and for creation of joint businesses with foreign participation on production of agricultural goods. The construction sector will be reformed for attraction of foreign investments in construction of apartment houses and support of production of the construction materials keeping energy.

12. In response to requests to provide information concerning participation of foreign investments in the course of privatization the representative of the Kyrgyz Republic noted that in article 8 of the Law "About Privatization of State-owned Property" of January 12, 1994 it is said that in case of privatization of public funds the Government can "reduce the number of buyers for guarantee of the priority rights of citizens and legal entities of the Kyrgyz Republic". However he noted that this provision was not applied yet.

13. The representative of the Kyrgyz Republic noted that the privatization condition in the Kyrgyz Republic is reflected in Tables 1 and 2 of Appendix A. For January 1, 1998 about 64% of the state objects (proceeding from data for January 1, 1991) were privatized. The total cost of the state objects privatized since 1991 constitutes 13 418 900 million som. The program of mass privatization was complete on June 30, 1997. Shares of 1056 joint-stock companies were sold through coupon auctions. According to article 4 of the Constitution of the Kyrgyz Republic of May 5, 1993, the earth, its minerals, water, air, the woods, plant and animal life, all natural resources are only in state-owned property. Besides, according to article 3 of the Law on privatization and privatization of January 12, 1994 the objects which are in exclusive property of the Kyrgyz Republic are not subject to privatization. However, lease of this property is possible. The law on privatization and privatization confers powers to the Government to determine the additional objects which are not subject to privatization and privatization even if their privatization and privatization can be specially not prohibited by the Constitution of the Kyrgyz Republic and the Law of the Kyrgyz Republic on privatization and privatization. Now the list of the objects which are not subject to privatization and privatization includes:

natural resources, forest fund, water resources, airspace;

the protected natural grounds or grounds of special purpose;

objects of historical and cultural heritage of the people of Kyrgyzstan (unique natural and cultural monuments, natural objects, objects of history, science, culture and technology, and also the values which are in the state museums, libraries and their departments, the companies for production of objects of folk art "Kyyal);

property of state governing bodies;

funds of the republican budget and currency reserve of the Kyrgyz Republic, Social fund of the Kyrgyz Republic, other budgetary funds, and equally gold stock;

National Bank of the Kyrgyz Republic, Treasury, Mint;

weapon, the military equipment and other military property, state-financed organizations and persons (including arsenals), and equally militarized transport columns under operational management of the Ministry of Defence of the Kyrgyz Republic, the Ministry of homeland security of the Kyrgyz Republic, the Ministry for Emergency Situations and Civil Defense of the Kyrgyz Republic, the Ministry of Internal Affairs of the Kyrgyz Republic, the other ministries and bodies having military units;

the military facilities of the CIS countries located in the territory of the Kyrgyz Republic according to the existing interstate agreements;

objects of civil defense of the Ministry for Emergency Situations and Civil Defense of the Kyrgyz Republic;

scientific and technical divisions and the organizations in system of the State agency on forestry under the Government of the Kyrgyz Republic;

the companies and scientific and technical divisions and the organizations in system of the State inspectorate for standardization and metrology under the Government of the Kyrgyz Republic;

divisions and the organizations under National Statistical Committee of the Kyrgyz Republic;

the companies and the organizations of hydrometeorological service, control service behind the state conservation and environments;

companies and organizations of cartographic and geodetic service;

companies and organizations sanitary эпидемеологического and quarantine control of the Kyrgyz Republic, service of protection of plants;

objects and equipment for permanent storage of heavy industrial and house wastes, heavy and liquid radioactive waste, burials of animals;

cemeteries, companies for their servicing and ensuring funeral services;

bureau of technical inventory count,

The law "About Privatization and Privatization of State-owned Property" of January 12, 1994 provides the right of the Government to limit or to otherwise limit participation of foreign investors in privatization of some industries; however the Government did not use this right yet. The Kyrgyz Republic will not apply this right in a way contradicting its obligations as future member of the WTO. Foreign investors participate in the course of privatization in the Kyrgyz Republic by the same rules now, as local investors. Privatization methods which will be used in case of privatization of the remained state assets, privatizeable:

1. incorporating (transformation of the state company to joint-stock company - the joint-stock company) with the subsequent privatization by sale of shares at auctions and commercial tenders (it is generally applied in case of privatization of medium and large enterprises);

2. transformation of the state object to limited liability partnership with the subsequent sale of the rights of partnership;

3. direct sale (including the biddings) large objects to strategic investors (especially foreign companies). The companies are invited to take part in the biddings through the international press;

4. direct sale (including the biddings), auctions, commercial tenders of any objects;

5. lease (on contractual basis) for period of time, including the right of purchase by the lessee.

In 1998. The Kyrgyz Republic plans to privatize large enterprise monopolists in strategic sectors of economy, including mining, energy, telecommunication and system of supply (oil and gas). Their number includes such companies as JSC Kyrgyztelekom - the telecommunication company, JSC Aba Kyrgyzstan National Airlines to Zholdor, mining company in Kara-Balta "Kadamdzhaysky antimonial plant", JSC Uchkun - printing the edition, JSC Akyl - the printing edition, JSC Kyrgyzenergo, GAO "Kyrgyzgazmunayzat", JSC Bishkek Engineering Plant. Also, the Kyrgyz Republic plans to privatize and denationalize the companies and objects of the non-productive sphere (for example, movie theaters, improving organizations, resorts) in 1998-2000g.

 

Table 1

Data on privatization by by sectors for the period 1991-1997

+---------------------------------------------------------------------+
¦     Сектор      ¦Кол-во объектов ¦Кол-во           ¦Процент         ¦
¦                 ¦государственной ¦приватизированных¦приватизации на ¦
¦                 ¦собственности на¦объектов на 31   ¦1 января 1998 г.¦
¦                 ¦1 января 1991 г.¦декабря 1997 г.  ¦                ¦
+-----------------+----------------+-----------------+----------------¦
¦Промышленность   ¦     602        ¦      531        ¦     88.2       ¦
¦Потребительские  ¦     1919       ¦      1917       ¦     99.9       ¦
¦услуги           ¦                ¦                 ¦                ¦
¦Нефтяной сектор  ¦     1253       ¦      434        ¦     34.6       ¦
¦Торговля и       ¦     1949       ¦      1894       ¦     97.1       ¦
¦общественное     ¦                ¦                 ¦                ¦
¦питание          ¦                ¦                 ¦                ¦
¦Сельское         ¦     855        ¦      354        ¦     41.4       ¦
¦хозяйство        ¦                ¦                 ¦                ¦
¦Строительство    ¦     730        ¦      418        ¦     57.3       ¦
¦Транспорт        ¦     295        ¦      154        ¦     52.2       ¦
¦Прочие секторы   ¦     2306       ¦      673        ¦     28.2       ¦
¦Всего:           ¦     9989       ¦      6375       ¦     63.8       ¦
+---------------------------------------------------------------------+

TABLE 2

Sectoral privatization by privatization methods for 1991 - 1997

+---------------------------------------------------------------------+
¦      Секторы       ¦      Метод приватизации       ¦ Кол-во         ¦
¦                    ¦                               ¦ приватизирован ¦
¦                    ¦                               ¦ ных объектов   ¦
+--------------------+-------------------------------+----------------¦
¦Промышленность      ¦ Аренда с последующим выкупом  ¦     8          ¦
¦                    ¦ Акционирование                ¦     400        ¦
¦                    ¦ Продажа через аукционы        ¦     16         ¦
¦                    ¦ Продажа тендером              ¦     12         ¦
¦                    ¦ Безвозмездная передача        ¦     1          ¦
¦                    ¦ Прямая продажа частным лицам  ¦     18         ¦
¦                    ¦ Прямая продажа рабочим        ¦                ¦
¦                    ¦ коллективам (органам)         ¦     49         ¦
¦                    ¦ Объединение (акционерные      ¦     27         ¦
¦                    ¦ общества)                     ¦                ¦
+--------------------+-------------------------------+----------------¦
¦Потребительские     ¦ Аренда с последующим выкупом  ¦     17         ¦
¦услуги              ¦ Акционирование                ¦     36         ¦
¦                    ¦ Продажа через аукционы        ¦     170        ¦
¦                    ¦ Продажа тендером              ¦     529        ¦
¦                    ¦ Прямая продажа частным лицам  ¦     717        ¦
¦                    ¦ Прямая продажа рабочим        ¦                ¦
¦                    ¦ коллективам (органам)         ¦     440        ¦
¦                    ¦ Объединение (акционерные      ¦     8          ¦
¦                    ¦ общества)                     ¦                ¦
+--------------------+-------------------------------+----------------¦
¦Непроизводственная  ¦ Аренда с последующим выкупом  ¦     3          ¦
¦сфера               ¦ Акционирование                ¦     277        ¦
¦                    ¦ Продажа через аукционы        ¦     30         ¦
¦                    ¦ Продажа тендером              ¦     8          ¦
¦                    ¦ Прямая продажа частым лицам   ¦     41         ¦
¦                    ¦ Прямая продажа рабочим        ¦                ¦
¦                    ¦ коллективам (органам)         ¦     28         ¦
¦                    ¦ Объединение (акционерные      ¦     48         ¦
¦                    ¦ общества)                     ¦                ¦
+--------------------+-------------------------------+----------------¦
¦Торговля и          ¦ Аренда с последующим выкупом  ¦     41         ¦
¦общественное питание¦ Акционирование                ¦     213        ¦
¦                    ¦ Продажа через аукционы        ¦     151        ¦
¦                    ¦ Продажа тендером              ¦     581        ¦
¦                    ¦ Прямая продажа частным лицам  ¦     307        ¦
¦                    ¦ Прямая продажа рабочим        ¦                ¦
¦                    ¦ коллективам (органам)         ¦     549        ¦
¦                    ¦ Объединение (акционерные      ¦     52         ¦
¦                    ¦ общества)                     ¦                ¦
+--------------------+-------------------------------+----------------¦
¦Сельское хозяйство  ¦ Аренда с последующим выкупом  ¦     4          ¦
¦                    ¦ Акционирование                ¦     128        ¦
¦                    ¦ Продажа через аукционы        ¦     6          ¦
¦                    ¦ Продажа тендером              ¦     1          ¦
¦                    ¦ Прямая продажа частным лицам  ¦     30         ¦
¦                    ¦ Прямая продажа рабочим        ¦                ¦
¦                    ¦ коллективам (органам)         ¦     177        ¦
¦                    ¦ Объединение (акционерные      ¦     8          ¦
¦                    ¦ общества)                     ¦                ¦
+--------------------+-------------------------------+----------------¦
¦Строительство       ¦ Аренда с последующим выкупом  ¦     2          ¦
¦                    ¦ Акционирование                ¦     298        ¦
¦                    ¦ Продажа через аукционы        ¦     11         ¦
¦                    ¦ Продажа тендером              ¦     3          ¦
¦                    ¦ Прямая продажа частным лицам  ¦     13         ¦
¦                    ¦ Прямая продажа рабочим        ¦                ¦
¦                    ¦ коллективам (органам)         ¦     69         ¦
¦                    ¦ Объединение (акционерные      ¦     22         ¦
¦                    ¦ общества)                     ¦                ¦
+--------------------+-------------------------------+----------------¦
¦Транспорт           ¦ Акционирование                ¦     137        ¦
¦                    ¦ Прямая продажа частным лицам  ¦     3          ¦
¦                    ¦ Прямая продажа рабочим        ¦     11         ¦
¦                    ¦ коллективам (органам)         ¦     3          ¦
¦                    ¦ Объединение (акционерные      ¦                ¦
¦                    ¦ общества)                     ¦                ¦
+--------------------+-------------------------------+----------------¦
¦Прочие сектора      ¦ Аренда с последующим выкупом  ¦     24         ¦
¦                    ¦ Акционирование                ¦     151        ¦
¦                    ¦ Продажа через аукционы        ¦     77         ¦
¦                    ¦ Продажа тендером              ¦     28         ¦
¦                    ¦ Прямая продажа частным лицам  ¦     171        ¦
¦                    ¦ Прямая продажа рабочим        ¦                ¦
¦                    ¦ коллективам (органам)         ¦     193        ¦
¦                    ¦ Объединение (акционерные      ¦     28         ¦
¦                    ¦ общества)                     ¦                ¦
+---------------------------------------------------------------------+

14. The representative of the Kyrgyz Republic noted that the Kyrgyz Republic will provide every year to members of the WTO information on development of privatization and on other questions connected with its economic reforms in their ratio with obligations on the WTO. Workgroup members noted this obligation of the Kyrgyz Republic.

 

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