DECISION OF ECONOMIC COUNCIL OF COMMONWEALTH OF INDEPENDENT STATES

of September 12, 2008

About the overview of trade policy of the Republic of Armenia

The economic council of the Commonwealth of Independent States solved:

1. Take into consideration the Overview of trade policy of the Republic of Armenia.

2. Send the specified Overview to the governments of the State Parties of the CIS for informing the interested ministries and departments.

3. Charge to Executive committee of the CIS to place in a month the specified Overview on the website of Executive committee of the CIS on the Internet.

 

EXECUTIVE COMMITTEE OF COMMONWEALTH OF INDEPENDENT STATES

Overview of trade policy of the Republic of Armenia

The overview of trade policy of the Republic of Armenia is constituted according to the Procedure for carrying out reviews of trade policy of the State Parties of the CIS approved by the Decision of Economic council of the Commonwealth of Independent States of March 15, 2002.

The overview is prepared by Executive committee of the CIS based on the national report provided by the Ministry of Economic Development of the Republic of Armenia, and information on the matter which is available for Executive committee of the CIS.

The purpose of reviews of trade policy is achievement by the State Parties of the CIS of transparency of trade policy, assistance to observance of the rules, regulations and obligations fixed in international treaties and documents concerning forming and effective functioning of the free trade area and also regular carrying out objective assessment of the main indicators of trade policy and practice of the State Parties of the CIS, their influence on development of mutual trade.

1. Mode of trade policy

Trade policy of the Republic of Armenia is regulated by the modes set legislative and regulations, two - both multilateral interstate and intergovernmental agreements.

The purposes of trade policy of the Republic of Armenia are:

- liberalization of foreign trade, simplification of the mechanism of export and import, tariff and non-tariff regulation;

- protection of interests of producers, assistance to increase in export of local products;

- assistance to development of external commercial relations;

- assistance to purposeful actions for quality assurance of the imported products for the purpose of consumer protection;

- assistance to prevention of illegal promotion through customs border of drugs, weapon, objects of historical, ethnographic and cultural value, and also to being liable destruction of plants and animals.

Regulatory framework of trade policy of the Republic of Armenia:

- The presidential decree of the Republic of Armenia of April 1, 1992 "About foreign trade activity of the Republic of Armenia";

- The law of the Republic of Armenia of July 31, 1994 "About foreign investments";

- The law of the Republic of Armenia of May 14, 1997 "About the value added tax";

- The law of the Republic of Armenia of December 27, 1997 "About the income tax";

- The civil code of the Republic of Armenia of May 5, 1998;

- The customs code of the Republic of Armenia of July 6, 2000;

- The law of the Republic of Armenia of July 27, 2000 "About the excise tax";

- The anti-monopoly law of the Republic of Armenia of November 6, 2000;

- The law of the Republic of Armenia of April 18, 2001 "About protection of the domestic market";

- The law of the Republic of Armenia of June 26, 2001 "About consumer protection";

- orders of the Government of the Republic of Armenia and other regulations.

1.1. Armenia and WTO

The Republic of Armenia finished negotiations on accession to WTO in November, 2002 and became the full-fledged member of this organization on February 5, 2003.

The trade and economic legislation of the Republic of Armenia is according to regulations and the principles of the WTO. For the purpose of ensuring qualitatively new level of economic integration and globalization the Government of the Republic of Armenia supports the liberalization principles fixed during negotiation round in Doha and within the WTO takes active part in the current negotiation processes.

Between Armenia and other members of this organization the most favored nation treatment in foreign trade is effective. From the countries which are not members of the WTO based on signed trade agreements the most favored nation treatment is applied with Vietnam, Iran, Lebanon and Syria.

In 2005 the decision of the Government of the Republic of Armenia created permanent mission and the permanent representative of the Republic of Armenia in the WTO is appointed.

Armenia takes active part in daily work of the secretariat of the WTO, and also in work of working groups on accession to the WTO of the main trading partners.

1.2. Agreements on creation of the free trade area of the CIS

The Republic of Armenia, being agreement party about creation of the free trade area of the CIS of April 15, 1994, in trade with the State Parties of the CIS is guided by signed bilateral agreements about free trade with the Republic of Belarus, Georgia, the Republic of Kazakhstan, the Kyrgyz Republic, the Republic of Moldova, the Russian Federation, the Republic of Tajikistan, Turkmenistan and Ukraine. These agreements provide mutual non-use of customs duties and taxes.

With the Republic of Belarus and the Russian Federation Protocols on withdrawals from free trade regime are signed. Effective period of the specified Protocols expires on January 1, 2012.

In Armenia the open trade regime with the State Parties of the CIS is set. The government of the Republic of Armenia supports the Concept of economic integration development of the CIS and is supporter of development of bilateral ties within arrangements of the CIS taking into account real situation in each State Party of the CIS and international experience of forming of regional economic communities.

2. Measures of trade policy

2.1. Import regulation

Requirements to registration and documentation

The organizations and the certain entrepreneurs who are engaged in foreign trade activity shall be registered in those customs authorities where customs clearance of the goods transported from their party through customs border is made. In these bodies for each participant of foreign trade activity the individual folder of the organization where copies of all documents submitted from their party to Customs Services are stored opens.

For the purpose of implementation of customs control according to the Order of the Government of the Republic of Armenia of May 15, 2001 N 413 from Customs Services the following documents are required:

- articles of organization;

- document on state registration;

- account of the taxpayer;

- the reference issued by the servicing bank about the settlement account of the company;

- the power of attorney from the organization about permission to establishment of the relations with Customs Services;

- customs declaration;

- the copy of the document of customs clearance of the goods taken through customs border of the Republic of Armenia;

- declaration on details of customs value;

- the document proving transportation of goods (commodity-transport delivery note);

- originals of documents of non-tariff regulation;

- passport or other identity document;

- document testimonial of customs payments, and checks;

- receipt on acquisition of excise stamps;

- other documents for the purpose of provision of privileges, stipulated by the legislation the Republic of Armenia.

 

Customs procedures

Goods and vehicles can move through customs border of the Republic of Armenia on 15 modes set by the Customs code of the Republic of Armenia.

The goods imported by the organizations and entrepreneurs in customs clearance station are exposed to preliminary external examination then on the basis of accompanying documents the sheet of transportation according to which goods and vehicles are allocated in that customs authority where their customs clearance shall be made is filled in. In the customs authority making customs clearance, the load is declared on the computer system "ASIKUDA 15". On the basis of documents and the customs declaration in the course of documentary registrations survey of goods is performed by the following procedures:

- goods issue and vehicles without survey;

- partial survey;

- thorough survey of goods and vehicles.

After completion of documentary registrations and representation by the customs applicant of the document certifying payment of the corresponding customs payments, goods and vehicles are provided. Customs payments can be made through the departments of banks located on customs territory.

The goods moved through customs border with physical persons are also subject to declaring according to the current law.

If necessary also other types of control can be performed by state bodies of the Republic of Armenia veterinary, sanitary.

 

Non-tariff regulation

Non-tariff restrictions of import

Foreign economic activity in the Republic of Armenia is not subject to licensing.

In case of commodity import to the Republic of Armenia quoting is not applied.

The order of the Government of the Republic of Armenia N 902 of December 31, 2000 and Amendment to it of September 29, 2001 N 913 establishes the Inventory, prohibited for transportation on customs regimes through the territory of the Republic of Armenia.

 

Country of source

Determination of the country of goods' origin, passing through customs border of Armenia, is performed according to the Customs code of the Republic of Armenia on the basis of the regulations guaranteed to the WTO. Determination of the country of goods' origin from the State Parties of the CIS is performed according to provisions of the Rules of determination of the country of goods' origin approved by the Decision of Council of CIS Heads of Government of November 30, 2000.

 

Pre-shipment inspection

In the Republic of Armenia pre-shipment inspection is not performed.

Sanitary and phytosanitary measures, standards and technical requirements

To customs authorities in the cases established by the legislation of the Republic of Armenia, leave of separate goods is made in the presence of the conclusions about compliance to the standards and technical requirements issued after completion of veterinary, phytosanitary and environmental control.

According to the legislation of the Republic of Armenia for the limited list of goods the Order of the Government N 1149-H of the Republic of Armenia of July 29, 2004 approves the List of goods and services, subject to obligatory certification.

 

Tariff regulation

Excise tax

The goods which are subject to excise tax liability: beer, grape and other wines, wine materials, alcohol and alcoholic drinks, industrial substitutes of tobacco, cigar, cigarillo and cigarette from tobacco or its substitutes, gasoline, crude oil and oil products, diesel fuel, gas condensate and other gaseous hydrocarbons (except for natural gas).

Import of the specified goods is assessed with the excise tax from customs authorities.

The quantity (amount) of goods expressed in the physical units of measurement established by the law concerning which the amount of the excise tax is estimated according to the rates and to procedure is considered taxable basis.

The excise tax is paid at the following rates:

------------------------------------------------------------------
|Код        |Наименование группы      |Единица базы   |Ставка    |
|продукции  |товаров                  |налогообложения|акцизного |
|по ТН ВЭД  |                         |               |налога (в |
|           |                         |               |драмах)   |
|-----------+-------------------------+---------------+----------|
|2203       |Пиво                     |1 литр         |70        |
|-----------+-------------------------+---------------+----------|
|2204       |Виноградные и прочие     |Таможенная     |10%, но не|
|           |вина, виноматериал       |стоимость      |менее чем |
|           |                         |               |100 драмов|
|           |                         |               |за 1 литр |
|-----------+-------------------------+---------------+----------|
|2205       |Вермут и прочие          |1 литр         |500       |
|           |виноградные вина,        |               |          |
|           |содержащие растительные и|               |          |
|           |ароматические экстракты  |               |          |
|-----------+-------------------------+---------------+----------|
|2206       |Прочие напитки,          |1 литр         |180       |
|           |сброженные (сидр         |               |          |
|           |яблочный), перру (сидр   |               |          |
|           |грушевый), напиток       |               |          |
|           |медовый                  |               |          |
|-----------+-------------------------+---------------+----------|
|2207       |Этиловый спирт           |1 литр (в      |600       |
|           |                         |пересчете на   |          |
|           |                         |100% спирт)    |          |
|-----------+-------------------------+---------------+----------|
|2208       |Спиртные напитки         |Таможенная     |30%, но не|
|           |                         |стоимость      |менее чем |
|           |                         |               |380 драмов|
|           |                         |               |за 1 литр |
|-----------+-------------------------+---------------+----------|
|2403       |Промышленные заменители  |1 килограмм    |1500      |
|           |табака                   |               |          |
|-----------+-------------------------+---------------+----------|
|2709       |Сырая нефть и            |1 тонна        |27000     |
|           |нефтепродукты            |               |          |
|-----------+-------------------------+---------------+----------|
|2711 (за   |Нефтяные газы и прочие   |1 тонна        |1000      |
|исключением|газообразные углеводороды|               |          |
|271111 и   |(за исключением          |               |          |
|271121)    |природного газа)         |               |          |
------------------------------------------------------------------

For types of goods with alcohol content over 40% included under code 2208, tax rate for each percent point exceeding 40% of content of alcohol increase by 7,5 the drama, and for drinks with alcohol content less than 9% are established 100 dram for each liter.

The excise tax is paid for the goods imported into the Republic of Armenia which are subject to excise tax liability within 10 days from the date of their import according to the procedure, established by the Government of the Republic of Armenia.

 

Value added tax

In the Republic of Armenia the value added tax (VAT) assesses commodity importation in customs regime - commodity importation for free circulation. The VAT on the goods imported for the internal territory of Armenia is estimated and levied by customs authorities on border of the Republic of Armenia, except for:

- the goods imported by the organizations and individual entrepreneurs, included in the list approved by the law for which import the rate of customs duty is established by 0% and which are not subject to excise tax liability;

- goods delivered by foreign states, international intergovernmental organizations, international, foreign and public (including charitable), religious and other organizations of the Republic of Armenia of similar nature, certain philanthropists within programs of the humanitarian assistance and charitable programs;

- the goods exported from the Republic of Armenia.

For the goods imported to Armenia, liable to VAT at the time of import, the total amount of their customs value, customs duty and excise tax is considered. The VAT rate is established by 20%.

In case of commodity importation to Armenia calculation and collection of the VAT by customs authorities is proved by the customs declarations and payment documents completed in case of customs clearance.

The legislation of the Republic of Armenia establishes the list of products for which the procedure for payment deferral of the VAT acts on customs border.

 

Customs valuation

For determination of customs value transaction price (actually paid amount or the amount which is subject for payment goods) is assumed as a basis. Customs value of goods is determined according to the Customs code of the Republic of Armenia which provisions meet standards of the Agreement on determination of customs value of goods of the WTO (article VII GATT).

 

Rates, duties, charges

When importing consumer goods the ad customs duty in the amount of 0 and 10% is effective. The import duty of 0% is established generally for the goods which are not goods of final consumption.

For carrying out customs procedure and registration from customs authorities fixed rates of customs fee are applied.

According to the Customs code of the Republic of Armenia on the gasoline and diesel fuel imported into Armenia single fixed payments on the value added tax and the excise tax are established.

On gasoline and diesel fuel the legal entities and individual entrepreneurs importing gasoline and diesel fuel into Armenia are considered as payers of fixed payments.

The size of fixed payment for each imported ton is established:

- for gasoline - 112 000 dram,

- for diesel fuel - 32 500 dram.

The fixed payment is paid in the procedure established by the Government of the Republic of Armenia within 10 days from the date of their import in Armenian drams.

Single fixed payments of the value added tax, the excise tax and customs duty are established on the cigars imported into the Republic of Armenia, cigarettes and cigarillos (further - tobacco products).

The physical persons and legal entities importing tobacco products into Armenia are considered as payers of fixed payments. The citizens importing tobacco products are considered as payers concerning part of products exceeding 400 cigarettes or cigarillos and 10 cigars.

Payers estimate and pay fixed payments in the following sizes:

------------------------------------------------------------------
|Код товара по |Наименование товара    |Размер фиксированного    |
|ТН ВЭД        |                       |платежа за ввозимую      |
|              |                       |продукцию (в драмах за   |
|              |                       |1000 штук)               |
|--------------+-----------------------+-------------------------|
|240210001     |Сигары                 |1 500 000                |
|--------------+-----------------------+-------------------------|
|240210009     |Сигариллы              |15 000                   |
|--------------+-----------------------+-------------------------|
|240220900     |Сигареты с фильтром    |5500                     |
|--------------+-----------------------+-------------------------|
|240220910     |Сигареты без фильтра   |3000                     |
------------------------------------------------------------------

The settlement value added tax in the total amount of fixed payment for the tobacco products imported into the Republic of Armenia is accepted to 15%, and settlement customs duty - to % 8,5.

The fixed payment for the tobacco products imported into Armenia is paid within 10 days from the date of their import according to the procedure, established by the Government of the Republic of Armenia.

Citizens two times a year without customs duty payment are allowed to import into the Republic of Armenia and to export from the Republic of Armenia goods as the accompanied load no more than 50 kg and on the amount no more than 300 dollars, on international carriages to transport goods no more than 20 kg and on the amount no more than 100 dollars. In these limits by the Order of the Government of the Republic of Armenia N 251 of March 29, 2001 extreme goods quantity over which citizens are not allowed to transport goods through customs border of the Republic without customs duty payment is established.

The order of the Government N 502-H of the Republic of Armenia of March 20, 2003 establishes the extreme goods quantity permitted for import by foreign citizens and physical persons. Over the specified quantity for foreign citizens import is allowed on condition of availability of the contract with residents of the Republic of Armenia or registration in the Republic of Armenia, and for physical persons of the Republic of Armenia - on condition of registration of business activity.

2.2. Export regulation

Non-tariff regulation

The restrictions operating in case of commodity export from the Republic of Armenia are caused by bilateral international agreements and the international obligations of the Republic of Armenia.

Export from the Republic of Armenia of wild animals and plants is made based on the conclusions issued by the Ministry of ecology of the Republic of Armenia (the Commodity Nomenclatures of Foreign Economic Activity codes 0102 90 350, 0601 - 0604 of the 99th 900).

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