RESTRICTEDWORLD TRADE
ORGANIZATIONWT/ACC/SPEC/ARM/1/Rev.61
16 March 2001
(01-1296)
Working Party on the
Accession of ArmeniaOriginal:  English
DRAFT REPORT OF THE WORKING PARTY
ON THE ACCESSION OF ARMENIA
Revision
I. Introduction1. At its meeting on 17 December 1993, the Council of Representatives established a Working
Party to examine the application of the Government of Armenia to accede to the General Agreementon Tariffs and Trade (GATT 1947) under Article XXXIII, and to submit to the Councilrecommendations which might include a draft Protoc ol of Accession.  In a communication dated 31
January 1995 (WT/L/25), the Government of Armenia applied for accession to the AgreementEstablishing the World Trade Organization (WTO) pursuant to Article XII of the WTO Agreement.Following Armenia's application and having regard to the Decision adopted by the General Councilon 31 January 1995 (WT/GC/M/1),  the Working Party on the Accession of Armenia to the GATT
1947 was transformed into a WTO Accession Working Party.  The terms of reference of the Working
Party were also contained in document WT/L/25.
2. The Working Party met on 24 January and 23-24 September 1996, 14 May 1997 [and ...]
under the Chairmanship of H.E. Mr. D. Kenyon (Australia).
Information
3. The Working Party had before it, to serve as a basis for its discussions, a Memorandum on the
Foreign Trade Regime of Armeni a (WT/ACC/ARM/1), and the questions submitted by Members on
the Armenian foreign trade regime together with the replies of the Armenian authorities thereto
(WT/ACC/ARM/2 and Corr.1;  WT/ACC/ARM/5 ;  and WT/ACC/ARM/8).  In addition the
representative of Armenian made available to the Working Party the following material:
                                                     
1 In order to facilitate the identification of changes to the earlier version of the Report, additions to the
text are in bold and deletions are struck out.WT/ACC/SPEC/ARM/1/Rev.6
Page 2
- The Customs Code of the Republic of Armenia of 1 January 2001;
- Decree of the Government of the Republic of  Armenia No. 40 of 13 February 1993, "Additional
Measures on State Regulation of International Economic Activities";
- Resolution No. 31 of 21 February 1995, "On Regulation Regarding the Establishment,
Registration, Licence and Suspension of Activitie s of Banks and Their Branches and Agencies
and Those of Foreign Banks Operating in the Republic of Armenia”
- Law on Amendments and Additions to the Republic of Armenia Law on the "Value-Added
Tax" of 10 December 1994;
- Law of the Republic of Armenia on Property Tax;
- Law on Making Amendments in the Republic of Armenia Law on Excise Tax of
30 November 1994;
- Law on Pledge Collateral;
- Law on Bankruptcy of Enterprises and Individual Entrepreneurs of 15 June 1995;- Law on Making Amendments in the Republic of Armenia Law on Corporation Tax of
19 December 1994;
- Draft
 Law on Standardization and Certification  of 9 December 1999 ;
- Law on Conformity Assessment of 9 December 1999;
- Law on Patents of 21 August 1993;- Law on Income Tax of 8 February 1995;
- Law on Land Tax of 27 April 1994;
- Law on State Agrarian Inspections;
- Statute of the Peasant and Collective Peasant Farms of 22 January 1991;
- The Land Code of 29 January 1991;- Supreme Council Resolution on the Maximum Sizes of  the Land Lots in Property of the Peasant
and Peasant Collective Farms;
- Resolution No. 581 of 16 December 1994, “On Corr oboration of the Temporary Regulations for
Auditing Activities in the Republic of Armenia”;
- Government Decision of 17 January 1995, "On the Procedure of Granting Licenses for
Importation and Exportation of Goods (Works , Services) in the Republic of Armenia";
- Government Resolution No. 67 of 8 February 1995, "On the State Procurement Order of 1995
of the Republic of Armenia";
- Government Resolution No. 4 of 19 August 1995, "On Confirmation of the Temporary
Regulations for Trademarks and Service Marks";
- Government Resolution No. 606 of 29 Decemb er 1994, "On Rates of the Excise Tax";
- Government Resolution No. 88 of 23 February 1994, "On the Order of Submitting Statistical
Reports Regarding the Importation and Exportation of Services in the Republic of Armenia";
- Council of Ministers Resolution No. 161 of 5 Ma rch 1991, "On the Order of Exercising Diverse
Types of Economic Activities on the Territory of the Republic of Armenia";
- Decree of the Government of the Republic  of Armenia No. 124 of 29 December 1995 On
Non-Tariff Regulation of the Commodities (Operations, Services) Import and Export in theRepublic of Armenia;
- Statement of the Central Bank of the Republic of Armenia on Joining to Article VIII of the IMF
Agreement.;
- The Law of the Republic of  Armenia of 30 June 1996, "On Central Bank of Armenia";
- The Law of the Republic of Armenia of 30 June 1996, "On Banks and Banking";
- The Law of the Republic of Armenia of  10 June 1996, "On Bankruptcy of Banks";
- Decree of the Government of the Republic of Armenia No. 124 of 29 December 1995, "On
Non-Tariff Regulation of the Commodities (Operations, Services) Import and Export in the
Republic of Armenia";
- Amendments to the Law, "On Privatization a nd Denationalization of State-Owned Enterprises
and Unfinished Construction Sites";
- List 2 of the Resolution of the Government  of the Republic of Armenia No. 415 of 1995,"On
types of Activities that are Subject to Licensing in the Territory of the Republic of Armenia";WT/ACC/SPEC/ARM/1/Rev.6
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- Statute of the Ministry of Economy of the Republic of Armenia of 20 June 1996, "On Issuing
Inferences on Minimal Pricing of Exports of Pr oducts from Ferrous and Non-ferrous Metals not
Produced in Armenia, as well as their Scrap";
- Statute of the Ministry of Health of the Republic of Armenia of 20 June 1996, "On Issuing
Inferences on Import and Export of Pharmaceutical s into and from the Republic of Armenia";
- Statute of the Ministry of Environment Protection and Mineral Resources of the Republic of
Armenia of 20 June 1996, "On Issuing Inferen ces on Export of Wild Animals and Plants
Included in the Red Book (Endangered Species  Listing) of the Republic of Armenia";
- Statute of the Ministry of Agriculture and Food of the Republic of Armenia of 20 June 1996 On
Issuing Inferences on Import of Plant Protec tion Agents into the Republic of Armenia.
- Decree of the Ministry of Health of the Republ ic of Armenia, "On Regulation of Pharmaceutical
Activity and Ensuring the Quality of Drugs and Medical Facilities";
- Programme of the Government of the Republic  of Armenia, "On Privatization of State
Enterprises and Unfinished Construction sites of the Republic of Armenia for 1996-1997";  and
- Amendment of 1 May 1996 to Annex N 1 to Decree of the Government of the Republic of
Armenia No. 615 of 6 December 1993, "On Determining the Customs Duties";
- Law of the Republic of Armenia "O n Customs Duties" of 30 December 1998;
- Law of the Republic of Armenia "On Cu stoms User Fees of 30 December 1998;
- Decree of the Government of Armenia "To Define the Rules for Determining the Country of
Origin of Goods";
- Civil Code of the Republic of Armenia of 5 May 1998;
- Civil Procedure Code of 20 January 1998;
- Criminal Procedure Code of 20 January 1998;
- Law of the Republic of Armenia "On Trade Names" of 12 May 1997;
- Law of the Republic of Armenia "On Trade and Service Marks and Appellations of Origin of
Goods";
- Patent Law of 21 August 1993;
- Law of the Republic of Armenia "On Copyri ght and Neighbouring Rights" of 27 May 1996;
- Draft Law of the Republic of Armenia "Protection of Secret Information";
- Draft Law of the Republic of Armenia "On Protection of Selection Achievements";
- Law of the Republic of Armenia "On Lega l Protection of Topographies of Integrated
Circuits" of 3 February 1998;
- Draft Proposals on the Amendments in the Armenian Law on Patents Dealing with the
Provisions of the WTO Component Agreement TRIPS;
- Regulation "On Importation of Goods Subject to Certification in the Republic of Armenia into
the Customs Territory of the Republic of Armenia" of 16 January 1998;
- Decree No. 15 of the Government of the Repub lic of Armenia "On Compulsory Certification
of Goods and Services in the Republic of Armenia" of 16 January 1998;
- Regulation "On Application of Certificate of Compliance when Realising and Advertising
(Rendering Services) the Certified Goods Subject to Compulsory Certification in the Republicof Armenia" of 16 January 1998;
- Regulation "On Fees for the Compulsory Certification in the Republic of Armenia" of
16 January 1998;
- Decree No. 171 of the Republic of Armenia "O n Establishment of Agrarian Regulations" of
11 March 1998;
- List of Toxic and Biological Means Permitted for the Use in the Republic of Armenia to
Struggle Against Pests, Diseases and Weeds of Agricultural Cultivated Plants, Forestry and
Ornamental Plants;
- List of Quarantine Pests, Diseases of Pl ants and Weeds for the Republic of Armenia;
- List of Quarantine Plants, Food, Seeds and Seedlings of Plant Origin for Quarantine
Protection Purposes;
- Law of the Republic of Armenia "On Ag rarian State Inspections" of 15 May 1996;
- Regulation "On Cooperation Between the Customs Authorities, Border Veterinary Inspection
Stations and State Plant Quarantine Services of the Republic of Armenia" of 27 January 1998;WT/ACC/SPEC/ARM/1/Rev.6
Page 4
- Draft  Law of the Republic of Armenia  "On Plant Protection and Plant Quarantine" of
20 March 2000 ;
- Law of the Republic of Armenia "On Veterinary Medicine " of 26 October 1999 ;
- Government Decree No. 26 of the Republic of Armenia "On the Measures to Ensure the
Implementation of the Separate Articles of the Laws of the Republic of Armenia on
"Standardization and Certification"  and the "Uniformity of Measures" of 20 January 1998;and
- Decree of the Government of Armenia No. 26 "Procedure on the Implementation of State
Metrology Control Over the Quantity of Withdrawn Commodities" 20 January 1998 ; and
- Government Decree No. 29 of 11 January 2000 on Preparation, Adoption and
Application of Technical Regulations .
Introductory statements
4. In an introductory statement, the representative of Armenia said that since declaring
independence from the former Soviet Union in 1 991, Armenia had vigorously pursued free market
reforms within a democratic framework, notwithstanding acute political and economic difficulties.
Economic decline had been reflected in sharp reductions in output, falling incomes, reduced tradeflows, severe shortages of energy, and scarcity of food and other consumer goods.  Despite thisadversity, the Government had persevered with the economic reform programme, placing particularemphasis on liberalization, stabilization, and economic restructuring.  Most agricultural land wasprivatized shortly after independence and privatization in other sectors was moving ahead.Demonopolization and deregulation had removed barriers to private sector participation in all but afew areas of economic activity.  Price controls were only applied to a limited number of essentialgoods and services, and were being phased out.  Foreign investment was encouraged.  On the
macroeconomic side, stabilization policy was a government priority, given the challenge of the
difficult budgetary position, combined with the need to contain inflationary pressures and maintainexchange rate stability.  The Government had suc cessfully brought monthly inflation down to a single
digit level, from the triple-digit levels prevailing at the end of 1993.  By the end of 1997 the annualinflation was 21.9 per cent, and the expected annual inflation for 1998 would fall to a level of 1 to 3per cent.  The Government was strongly committed to securing a sound and stable macroeconomicframework for future economic growth and developm ent.  Fuller integration into the world economy,
and continuing diversification of Armenia's econom ic relations with other countries, were central
planks of the Government's reform efforts.  The Government of Armenia believed that these
objectives could only be attained through open trade policies that emphasized specialization on the
basis of international comparative advantage.  It was for this reason that the Government of Armeniaattached priority to its accession to the World Trade Organization, and wished to completenegotiations for membership at the earliest opportunity.
5. The Working Party welcomed Armenia's application for accession to the Agreement
Establishing the WTO.  Several members of the Working Party acknowledged that Armenia hadWT/ACC/SPEC/ARM/1/Rev.6
Page 5
undergone a rapid process concerning reform and trade liberalization which, notwithstanding internal
and external difficulties, appeared to be succeeding in permitting economic growth.  These membersexpressed support for Armenia's integration into the multilateral trading system and indicated theirreadiness to pursue the negotiations in earnest.
II. ECONOMY, ECONOMIC POLICIES AND FOREIGN TRADE
- Foreign exchange and payments
6. In response to questions from members of the Working Party concerning Armenia’s foreign
exchange reserves and the convertibility of the Dram, the representative of Armenia stated that gross
official reserves made up US$ 225.7
 303 million by the end of 1999 as of 28 October 1997 and
covered about 2.8  4 months of imports. Gross official reserves had risen from 0.7 months of import
cover in 1994 to 2.3 months in 1996 , 2.7 months in 1997 and 3 months in 1998 . Gross official
reserves had risen to 3.5 months of import cover by the end of 1998.  On 29 May 1997, Armenia had
accepted the Article VIII of the International Monetary Fund's Agreement and the obligations implied
by Sections 2, 3 and 4 thereof and has committed to refrain from imposing restrictions on carrying outpayments and transfers, and from engaging in discriminatory currency arrangements or multiplecurrency practices without IMF approval. According to the Resolution No. 141 "On Foreign
Exchange Regulation and Administration of Control", there were no restrictions on current account
operations. After being licensed by the Central Bank natural persons and legal entities were allowedto act as foreign exchange dealers. The Central Bank of Armenia (CBA) determined the dailyexchange rate as a midpoint of the previous day’s buying and selling operations in foreign exchangemarket (the participants of foreign exchange mark et are those dealing with over-the-counter market,
stock exchanges, foreign exchange bureaus, etc.). Foreign exchange dealers (including banks)  and
banks  were free to establish their own exchange rates for transactions. Non-resident banks could be
authorized to participate in the domestic foreign ex change market on conditions equal to those set for
resident banks. Legal entities and natural persons, residents and non-residents of Armenia could open
and hold their current accounts in foreign banks without any restrictions.  Residents of Armenia could
implement operations related to movement of capital without any restrictions unless otherwisespecified by CBA. Non-residents could implement operations related to movement of capitalaccording to the "Law on Foreign Investments" of the Republic of Armenia.  All bilateral clearingarrangements based on barter had been eliminated.
-I n c o m e  T a x
7. The representative of Armenia stated that according to the Law on Income Tax, which entered
into force on 1 January 1998, personal income tax was determined based up
on the basis of the annualWT/ACC/SPEC/ARM/1/Rev.6
Page 6
amount of the taxpayer’s income earned during the reporting period . In determining the taxable
income the following deductions could be made from a gross income: deductible income, personaldeductions, and expenses. Gross income was deducted by Dram 8,000
 20,000 for each month during
which an income was earned. The following income tax rates were levied on annual taxable income:
The income tax rates were as follows:
Annual taxable income Amount of income tax
Less than dram 120, 000 15 per cent of the amount of income
More than dram 120,000 but less than or equal
to dram 320,000dram 18,000 added to 25 per cent of the amount
of income exceeding dram 120,000
More than dram 320,000 dram 68,000 added to 30 per cent of the amount
of income exceeding dram 320,000
Monthly taxable income Amount of income tax
Less than Dram 80,000 10 per cent of the amount of income
More than Dram 80,000 Dram 8,000 added to 20 per cent of the
amount of income exceeding Dram 80,000
Annual taxable income Amount of income tax
Less than Dram 960,000 10 per cent of the amount of income
More than Dram 960,000 Dram 96,000 added to 20 per cent of the
amount of income exceeding Dram 960,000
Rate of income tax for income received from royalties, payments of interest and property rent is
10 per cent.  The following categories of receipts were exemptions from income for tax
considerations: social security allowances under Armenian legislation, lump-sum allowances tofamilies of military servicemen killed or handicapped, alimony payments, earnings of individuals for
delivering blood and pectoral milk or for other type of donor activities, as well as income from
agricultural activities .
- Land Tax
8. The representative of Armenia stated, that the land usage in Armenia was charged. The land
tax was imposed on the private landowners and users of land under State property. The land tax wasdetermined as an annual fixed charge for a land plot unit. For agricultural land the land tax rate wasestablished at 15 per cent of calculated net income determined by the estimated cadastre
 cadasteral
value of the land, and for the land for non-agricultural usage the land tax rate was established at 1 percent of the estimated cadastre value of the land (0.5 per cent if outside residential area) . In order to
promote the development of plant-raising, the newly established and immature orchards and vineyardsWT/ACC/SPEC/ARM/1/Rev.6
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were exempted from payment of land tax.  In the event of adverse agricultural circumstances, in order
to reduce a tax burden, the Government, by consent of the National Assembly of Armenia, may grantcertain tax exemptions to some taxpayers or to groups of taxpayers.  In a new Draft of the Law onLand Tax, which was submitted to the National Assembly of Armenia, the property character of the
land
 tax was accentuated, and tax calculation methods were simplified. In particular, for both
agricultural and non-agricultural land plots the amount of tax would be calculated based on theirvalue, and that value would be determined according to the same Law.
- Profit Tax
9. The representative of Armenia stated that according to the new Law on Profit Tax, which
entered into force on 1 January 1998, profit tax was imposed on residents and non-residents.   Forresidents the profit tax would be
 was charged on taxable profit obtained in Armenia and abroad. For
non-residents the profit tax would be  was charged on taxable profit obtained from Armenian sources.
For residents the amount of profit tax charged on taxable profit would be  was determined at 20 per
cent tax rate.  according to the following table:
Amount of Taxable profit Profit tax
Less than dram 7 million 15 per cent of taxable profit
More than dram 7 million dram 1.05 million added to 25 per cent of the
amount of profit exceeding dram 7 million
The amount of the profit tax, charged on the income from organizing and running gambling and
lottery games, would be equal to 70 per cent of the profit obtained.   The following types of revenues
were contemplated to be obtained by non-residents from Armenian sources:
- income obtained by non-residents from their entrepreneurial activities within Armenian
territory;
- passive income obtained by non-resident s from residents or non-residents;
- other income obtained by non-residents within the Armenian territory;
The tax charged on income obtained by non-residents from the Armenian sources would be  was
levied according to the following rates:WT/ACC/SPEC/ARM/1/Rev.6
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Type of Income: Profit tax rate
Interests 0 per cent
Insurance offsets received in a result of insurance; payments received for
reinsurance, incomes received from shipment (freight)5 per cent
Dividends, Royalties; income received from property rent; property value
increment and other passive incomes  (except incomes  received from shipment
(freight)), as well as other incomes  received from other  Armenian sources15 10 per cent
Taxpayers engaged in production of agricultural products would be exempted from the profit tax
payments.  , as well as the following entities registered in the Tax Inspectorate Authorities would be
exempted from the profit tax payments:
- public and religious organizations; Armenian political parties;
- condominiums; non-profit organizations, established and operated exclusively for
religious, benevo1ent, scientific purposes,  for testing for public security purposes, for
environmental protection, development and propaganda of literature, culture and
education,  protection of consumer rights, promotion and organization of amateur
sports,  for protection of human, women's, children's and old people's rights, in case if
any part of the income of these organizations was not distributed among their
members or other persons and was used exclusively for statutory purposes;
- libraries, museums, secondary schools, boarding schools, asylums for old people and
children, in case if any part of the income of these organizations was not distributed
among their members or other persons and was used exclusively for the statutory
purposes.
If after 1 January 1998, the actually invested share of the foreign investor in the statutory fund of the
resident enterprise with foreign investments is at least Dram 500 mi1lion the amount of the profit tax
levied on that resident enterprise would be reduced by:
In case of termination of the taxpayer’s activities in the period of privileges, the amount of the profit
tax for this period would be calculated at the full rate for the whole period of activities.
Year when the established investment
benchmark in the statutory fund of a
resident enterprises would be fulfilledProportion of profit tax reductions from the tax liability of
the resident enterprise with foreign investment, allowed
for the respective years
100 per cent 50 per cent
1998 1999 and 2000 2001-2008 inclusive
1999 2000 and 2001 2002-2009 inclusive
2000 2001 and 2002 2003-2008 inclusive
2001 2002 and 2003 2004-2007 inclusive
2002 2003 and 2004 2005-2006 inclusive
2003 2004 and 2005
2004 2005 and 2006WT/ACC/SPEC/ARM/1/Rev.6
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Year when the established investment
benchmark in the statutory fund of a
resident enterprises would be fulfilledProportion of profit tax reductions from the tax liability of
the resident enterprise with foreign investment, allowed
for the respective years
100 per cent 50 per cent
2005 2006 and 2007
2006 2007 and 2008
2007 2008 and 2009
In case of termination of the taxpayer’s activities  in the period of privileges, the amount of the
profit tax for this period would be calculated at the full rate for the whole period of activities.
- Simplified tax
10. The representative of Armenia said that ac cording to the Law on Simplified Tax, which
entered into force on 5 June 2000, Simplified Tax is the tax substituting VAT and (or) Profit Tax(Income Tax) paid to State Budget for entrepreneurial activities. For legal persons simplified taxsubstitutes VAT and (or) Profit Tax.  For individual entrepreneurs simplified tax substitutes VAT and(or) Income Tax.  Tax privileges for VAT and Profit Tax (Income Tax) defined by tax legislationshall be terminated for simplified taxpayers.  Legal persons and individual entrepreneurs shall be
considered to be simplified taxpayers if during the previous reporting year the total amount of
turnover of sale of goods supplied and services rendered by taxpayers (exclusive VAT) have not
exceeded AMD 30 million. This restriction shall not apply to the sphere of trade and public
catering activities carried out in shops and counters.
The following taxpayers shall not be considered as simplified taxpayers:
- Producers of goods subject to excise tax;
- Taxpayers owing outstanding liabilities (including fines and penalties envisaged
by Tax legislation) exceeding 100 thousand Drams as of the moment ofsubmitting application;
- Loan and insurance companies, investment funds, specialized parties of stock
market, organizers of casinos, cash winni ng games or lotteries, persons carrying
out audits or consulting services, etc.
Simplified taxable object is considered to be the sale turnover of goods supplied and services
rendered by taxpayers during the reporting quarter.  For taxable object determined for eachreporting period of current year for the part of  trading activity realized by shops and counters
the simplified tax rate is 4 per cent, and for public catering activities 7 per cent. For the othertrading activity the simplified tax payers calculate the tax for taxable object determined for thecurrent year at the following rates:
- 7 per cent for the amount under AMD 30 million;WT/ACC/SPEC/ARM/1/Rev.6
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- 12 per cent for the amount over AMD 30 million.
- Property tax
11. 10.        The representative of Armenia added that by the adoption of the Law on Property Tax
the fixed assets tax was replaced by the property tax.   the property tax was a direct tax, levied on
buildings and vehicles that  belong inged to natural and legal entities as private property or property for
commercial usage. The calculation of the tax levied on buildings was determined based on their value
(which was also determined according to Law on Property Tax), whereas the calculation of the taxlevied on vehicles was determined based on the power capacity of its engine. The revaluation ofbuildings was carried out once every three years, according to procedures, set out by the same Law. Incases where the value of residential building was less than 3 million Dram, it was exempted fromproperty tax. For residential buildings with a value above 3 million Dram, respective tax rates weredetermined according to a rate scale, varying within a range of 0.1-0.8 per cent.
12. 11.        
The representative of Armenia stated that in accordance with the Law on Property Tax,
the property tax levied on buildings for public and production usage was established at 0.6 per cent of
their value. For vehicles, respective tax rates were determined at rates of Dram 50-500, depending on
their type. In the case of motor vehicles, property tax was determined, based not only on powercapacity but also on age.
- State ownership and privatization
13. 12.        
In response to requests for information concerning the privatization of State owned
assets, the representative of Armenia stated that the process of privatization started in Armenia sincethe beginning of 1991, when according to decision of the Government 335 small enterprises in thesphere of distribution, meals and catering, and other services had been privatized. The Law onPrivatization and Denationalization of Enterprises and Unfinished Construction Sites was adopted in
1992 which served as legal base for the whole legislation in field of privatization in the ensuing
period.  The national Assembly adopted a number of Privatization Programmes, under the guidance ofwhich the privatization process has been carried out.  The first annual Programme on Privatization
and Denationalization of Enterprises and Unfinished Construction Sites was adopted by Parliament on
12 January 1994. That programme envisaged privatization of 1,985 large and medium enterprises
representing various branches of Armenian industry, as well as 2,754 small enterprises (in the sphere
of distribution, meal and catering, and other services).  On 27 September 1995 the National Assembly
also adopted the Programme on Privatization of 1995, and the adoption of that Programme was based
on the Programme of Privatization of 1994 with certain amendments and changes. The next
Programme of Privatization, adopted by the National Assembly on 20 March 1996, was envisaged forWT/ACC/SPEC/ARM/1/Rev.6
Page 11
the years 1996-1997.  The following privatization targets were set by that Programme: 3,809 entities
were offered for privatization, of which 195 were in industry, 22 in transportation, 82 in construction,
3 in telecommunications, 70 in agriculture, 3 in material and technical logistics, 191 in the public
utilities sector, 2,385 in the social sector, 2.38 in the automobile maintenance sector, 16 in the natural
deposits sector, 66 enterprises of the Yerevan Municipality, 1,763 in the distribution and meal serving
sector, 760 in the household services sector, as well as 395 unfinished sites of housing construction.
The Privatization Programme which is currently in force was adopted by the National Assembly in 26
December 1997 and was envisaged for the years 1998-2000.
Four privatization programmes were conducted starti ng from the beginning of the privatization
process in Armenia, which were adapted by the National Assembly as a law. The first twoprivatization programmes were written on the year basis (1994 and 1995 year programmes).This was followed by the adoption of the 1996-1997 and 1998-2000 privatization programmes.  Itmust be mentioned that the privatization programmes included the main portion of companiesin the fields of industry, agriculture and transport as well as all the "small" (in the sphere ofdistribution, meals and catering, and other services) and unfinished construction sites.  Theprivatization programme for the next years (2001-2003) is in the process of finalisation.  The
Privatization Programme of State assets for the 1998-2000, which is currently in force was
adopted by the National Assembly in 26 December 1997.   Taking into account that the previous
Programmes of Privatization of 1995 and 1996-1997 were still being implemented, the PrivatizationProgramme of 1998-2000 was designated to incorporate in its privatization targets all those companiesand small enterprises, which were included in the privatization schedules of the previous twoprogrammes but of which privatization was not accomplished by the date of enactment of the newProgramme.  This amendment was stipulated by the necessity to ensure the uniformity of guidance in
the privatization process.   It should be mentioned that either previous Laws and Programmes on
Privatization or the Law on Privatization of State owned Assets, approved by the National Assembly
in 17 December 1997 did not create any legal barriers for the participation of foreign natural and legal
persons in the privatization of State-owned assets and did not discriminate between foreign andArmenian natural and legal persons.  By 1 July 1999, 1,492 medium and large enterprises had been
privatized, of which 1,101 enterprises had been privatized through the open subscription of shares - 62
through share auctions, 132 were privatized to employees - 57 through tenders 9 of which were
international, 18 through auctions, and 184 were privatized to lessees. For this group of enterprises the
major form of privatization was open subscription of shares (practiced for 75 per cent of privatized
entities).  Privatization of 304 enterprises failed, mainly because of high prices, poor business
prospects and heavy indebtedness, privatization of 62 also failed at a second attempt.  The
Government adopted Decisions on privatization of  1,967 large and medium enterprises (including 47WT/ACC/SPEC/ARM/1/Rev.6
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Decisions on dissolution of enterprises).   By 1 September 2000 1,533 medium and large enterprises
had been privatised, of which 1,111 through the op en subscription of shares, 62 through share
auctions, 134 were privatised by employees - 63 through tenders 9 of which were international,18 through auctions, and 189 were privatised to less ees.  For this group of enterprises the major
form of privatization was the open subscription of shares (practiced for 75 per cent of privatized
entities).  Ten companies, the privatization of which failed, were dissolved.  Privatization of 333enterprises failed, mainly because of high prices, poor business prospects and heavy
indebtedness.  By 1 September 2000 the Govern ment of Armenia had already adopted 2,067
decrees concerning the privatization of compan ies (including 170 decrees on dissolution of
enterprises).  The following enterprises were privatized  through international tenders: "Armentel"
State Enterprise, Yerevan Brandy plant, Hotel "Armenia" and Hotel "Ani" during the privatization
of which there was an international mediator .  The privatization of the State power, production and
distribution network, as well as "Armenian Airlines" Company was anticipated.  In the power
 energy
sector ten hydro-electric power stations had been already privatized, two of which to foreign persons.The Armenian network of gas distribution was privatized, resulting in the establishment of"ArmRusGasArd" CSC.  The table below represents more detailed information on the process of the
privatization accomplished in Armenia during years 1995- 2000 (August) 1999
.
According to the “Privatization programme for 1998-2000” enterprises of the following sectors (over
150 enterprises) are not subject to privatization:
- civil defence and mobilization establishments;
- target ranges and military sites;
- minting, state decorations, seals and stamps producing enterprises;
- basic research institutions;
- geographic, cartographic, topographic, hydrometeorological enterprises, enterprises
exercising control over conditions and protection of environmental and natural
resources;
- state strategic reserves and storage facilities;
- enterprises providing sanitary-epidemiological, veterinary, plant and forestry
protection services;
- pedigree enterprises and centres, grain growing stations and laboratories, special crop
cultivation enterprises, state nurseries;
- standardization and metrology services;
- railways, public highways, Yerevan metro;
- enterprises producing radioactive materials (and appliances for them) as well as
enterprises involved in research and constructing activities in this area;
- enterprises of reformatories and corrective labour establishments;
- secondary and high educational entities, scientific- pedagogic institutes under the
Ministry of Education and Science of Armenia.
Additionally, those units subject to the Privatizatio n, will not be privatized, if those are located
in:WT/ACC/SPEC/ARM/1/Rev.6
Page 13
- administrative buildings and in the State Body buildings;
- engineering - technical buildings, transp ort structure (bridges, tunnels, dams,
under grounds and etc.) and being parts of them adjacent areas, such as
railways, social sphere units (schools, institutes, cultural units, etc.);
- defense and security units.
These sectors mainly cover the activities reserved to the State in the exercise of its unique
responsibilities, including the preservation of national security, public order, and the health and safety
of the population.WT/ACC/SPEC/ARM/1/Rev.6
Page 14 Open stock
companiesClosed stock
companiesSale of assets
to the lesseeAuctions TendersInternational
tendersCompanies
dissolvedIn 1998
2000TotalUnfinished
construction
sitesNot
privatized,
included in
1998-2000
programme
Government’s decision 1.267
1,341147144 194192 3133 152193 17 170
47109 2.087
1.967117
Total: of which 1.316
1,294146144 194191 3033 158192 17 47 90 1.951
1,918117
Privatization in process 5
6-1
375 - 14
13
Privatization suspended 199
18812 4 12
1597
13985 7 389
33682
Privatization finished 1.111
1,101134132 189184 1819 5448 93 3 1.548
1,49235
Total: of which 1.086 139
132184 20
185448 9 10 1.386
1,492117 709
Industry 394
4095447 75 11
616 499 177
Trade and services 37 6 2 45
Agriculture 333
35936 10 11
101 94 3 1
416150
City construction 185
1888 18
17217213 120
Culture 30 6 36 27
Transportation 31
3014 1 25 0
4537
Communication 11 1 1 15
13
Health 1 6 18
711
Others 64 8 11 1 85 187
Evaluations made Privatized 1994 - 1997  1999 Privatized through auction Subject to sale through auction
Small enterprises 8,139 6,769 255 67
Paid
(thousand Drams)
Totalof which by certificates by Drams
Medium to large enterprises 100,019,385.70 39,770,740.00 60,248,645.70
Unfinished construction site 492,410.00 176,180.00 316,230.00
 Small enterprises 25,465,049.30 23,841,780.00 1,623,269.30
Total 125,976,845.00 63,788,700.00 62,188,145.00WT/ACC/SPEC/ARM/1/Rev.6
Page 15
14. 13.        The representative of Armenia added that there was still concern with effective
implementation of the privatization programme, particularly in connection with changing the overallconcept of privatization, and the desirability of certificate versus money privatization was deeplyquestioned.  even in 1997.  As in other transition economies, prompt positive effects (in two to threeyears) from privatization proved to be overstated, and a more realistic approach currently prevailedwhich was oriented at maximization of money gains from privatization. It is clear that the finaldistinguishment of profitable proprietors (during th is process the enterprise passes from one owner to
another) can take up to 8 or ten years, which is a relatively long period of time for seeing the results of
privatization. At the same time a lot of countries anticipate to receive large quantities of funds byselling the privatised assets.  From this point of view the mixed approach recently became morepreferable, simultaneously ensuring a progressive increase of the share of money privatization in total.Presently the main objectives of the state privatization policy are the investments and theimplementation of new managing structures as well as the fulfilment of the state budget by means offunds received from privatization.   In contrast to the previous years the tender method (includinginternational) of company privatization is widely used in the country, which allows to sell the
companies to strategic investors, anticipating for l ong-term investments, as well as to solve problems
concerning the creation of new jobs and social improvements.   According to the new Law on
Privatization of State-owned Assets the Aut horized Privatization Body, and therefore the
Government, was entitled to a greater flexibility in privatizing each single, with respect to the choice
of the form of privatization, as well as with respect to the terms of payment for privatized assets.  TheGovernment also began the process of dissolution of those enterprises which had been offered forprivatization according to legislation and of which the privatization had failed.  The transparency ofinformation relating to privatized enterprises was ensured.  Detailed information on privatizedenterprises was readily available in the mass media and specially designed Internet Web page(www.privatization.am).
15. 14.        
In response to a further question, the representative of Armenia stated that Armenia
had privatized almost 90  70 per cent of agricultural land and made land titles freely transferable.  The
small share of land still in State hands is reserve land and land used for certain kinds of agriculturalsupport activities described in paragraphs 101-104
 106-108  below.  The Government of Armenia did
not have a timetable for the privatization of agricultural land still in State hands.
16. 15.        The representative of Armenia confirmed that to ensure full transparency and to keep
WTO members informed of its progress in the reform of its transforming economic and trade regime,Armenia would provide annual reports to WTO Members on developments in its programme of
privatization along the lines of the information provided to the Working Party, and on the other issuesWT/ACC/SPEC/ARM/1/Rev.6
Page 16
related to its economic reforms as relevant to its obligations under the WTO.  The Working Party took
note of this commitment.
- Investment regime
17. 16.        The representative of Armenia stated that the 1994 Law on Foreign Investments
regulated Armenia’s policies towards foreign investment.  The Law was designed to attractinvestment from foreign sources.  It provided guarantees against nationalization and provided thatexpropriation could only take place following a judicial decision.  In the unlikely event of
expropriation, full compensation would be payable.  Foreign investors were indemnified against
damages resulting from illegal actions by Government, or from the improper performance byGovernment of its obligations (as determined in a Court of Law).  The Law also guaranteed investorsthe right to repatriate profits and assets without hindrance.  In the event that foreign investmentlegislation was changed after an investment has occurred, the investor concerned was entitled to anexemption from any less favourable provisions during a five-year period.  The representative of
Armenia further noted that the new Investment Law was drafted, which provided equal
treatment to domestic and foreign investors, a nd established a flexible mechanism for dispute
settlement in compliance with international practice.
18. 17.        
The representative of Armenia further noted that from 1 January 1998 the Law on
Profit Tax introduced a new order for the taxation of the profit of enterprises with foreign investmentsin accordance with which, if the share of foreign investors in the statutory fund is at least 500 million
Dram, the profit tax of enterprises with foreign investments will be reduced by 100 percent of the
amount of profit tax for the two years following the year of investment.  The reduction of the profit
tax for the following years is shown in the Table in paragraph 9 above.  In case of termination of the
enterprises with foreign investments in the period of  these ten years the profit tax for the privileged
period would be calculated at full amount for the whole period of their activity. Enterprises with anyforeign ownership had been entitled to indefinite
 duty-free treatment on all their imports of capital
equipment and recurrent inputs  goods imported into Armenia for the contribution to their
statutory fund, which were included in the list of goods established by the Government of the
Republic of Armenia.  According to the Decree No. 124 the privileges for foreign investors on the
licensing of the products for import and export activities were exempted, and the following procedureestablished: the non-tariff regulations of the unified system of export and import of goods and serviceswas extended to all economic entities of the Republic of Armenia, irrespective of the form ofownership and the place of registration.  Foreign investors were free to choose their own insurers.  Noinvestment performance requirements are maintained.  There were no requirements for foreignWT/ACC/SPEC/ARM/1/Rev.6
Page 17
investors to export a certain amount of product, and the Government did not intend to introduce any
such requirements. Foreign investors received full national treatment.
19. 18.        The representative of Armenia stated that any restrictions on investment were
generally applied on a non-discriminatory basis as between national and foreign investors. By theConstitution of the Republic of Armenia the foreign citizens and persons without citizenship did nothave the right to own land.  The representative of Armenia further added that according to the LandCode of the Republic of Armenia foreign citizens, juridical persons, other economic entities,
international organizations had the right to lease land on the territory of the Republic of Armenia.
- Pricing policies
20. 19.        
In response to requests for an update on the progress of price reform, the
representative of Armenia stated that since 1995, almost all government-mandated price controls hadbeen removed.  The only domestic prices that were still subject to regulation were those for irrigation,urban electrical transport, electricity, hot water, gas, heating, sewage services, garbage collection, rentin State-owned housing, and telephone services.  Those prices were still subject to regulation becauseState-owned enterprises were the exclusive or dominant suppliers, or in case of telephone services, theprivate supplier enjoyed exclusive rights on provision of services.  All administered prices were
adjusted on a regular basis to maintain their real value.
21. 20.        
The representative of Armenia added that subsidies on bread, municipal electric
transport and garbage collection, and cross-subsidies on water and sewerage had been eliminated.The subsidies on district heating and hot water (the only remaining consumer subsidies) were underreview.  In the case of district heating, which le ss than one-third of households actually receive, the
issue of provision of targeted heating subsidies to vulnerable groups would be resolved as part of theoverall reform of social assistance.
22. 21.        
The representative of Armenia confirmed that as of the date of accession price
controls on products and services in Armenia have been eliminated with the exception of those listed
in paragraphs 19 and 20  20 and 21  of this Report, and that in the application of such controls, and any
that are introduced or re-introduced in the future, Armenia will apply such measures in a WTO-consistent fashion, and take account of the interests of exporting WTO members as provided for inArticle III:9 of the GATT 1994. He also confirmed that the goods and services listed in paragraph 19
20 and 20  21 had been published in the Government’s official newspaper and any products subject to
State price controls in the future, including any ch anges in the initial list reported at the time of
accession, would be published in the official newspaper.  The Working Party took note of thiscommitment.WT/ACC/SPEC/ARM/1/Rev.6
Page 18
III. FRAMEWORK FOR MAKING AND EN FORCING POLICIES AFFECTING
FOREIGN TRADE IN GOODS AND TRADE IN SERVICES
- Powers of executive, legislative and judiciar y, administration of policies on WTO-related
issues
23. 22.        The representative of Armenia said that that the legislature of the Republic of
Armenia is the National Assembly, which consisted of 190  131 deputies.  Upon parliamentary
elections in 1999 the number of deputies will be 131.   The plenary powers of the National Assembly
terminate in June of the fourth year after its elections, on an opening day of a first session of thenewly elected National Assembly when its plenary powers commence. The deputies and theGovernment are authorized to submit Bills for approval by the National Assembly.  The National
Assembly elects the Chairman by majority vote for the whole period of its plenary powers.  The
Chairman conducts sessions, administers material and financial resources of the National Assemblyand ensures the performance of its ordinary activities.  Armenian laws were adopted by the NationalAssembly.  Laws entered into force upon signing by the President of the Republic and followingpromulgation, if no other date was stipulated by respective Law.  This procedure applied to alllegislative amendments and rectifications, including those relating to the establishment or alteration oftariffs and taxes.  The President of the Republic observed the adherence to Constitution, ensuresordinary conduct of activities of legislative, executive and judiciary powers. The President of the
Republic was elected by popular vote every five years.  The President issued decrees and orders,
which were subject to implementation throughout the Republic of Armenia.  These decrees and ordersshould not be in conflict with the Constitution and laws.
24. 23.        
The representative of Armenia added that the Government carried out the executive
power in the Republic of Armenia and comprises the Prime Minister and Ministers. The President ofthe Republic appointed and dismissed the Prime Minister, as well as upon recommendation of thePrime Minister appointed and dismissed the members of the Government. Resolutions of theGovernment were signed by the Prime Minister, and were ratified by the President. The PrimeMinister was responsible for the day-to-day r unning of the Government and for coordination of
activities of other Ministers. The Prime Minister issued resolutions, which should be signed also by
the Ministers, responsible for implementation, in cases, envisaged by the Order of GovernmentalActivities.
25. 24.        
The representative of Armenia said that in conformity with the Constitution of the
Republic of Armenia, the judiciary powers were ex ecuted exclusively by the Courts, in accordance
with the Constitution and legislation.  In executing justice Judges were independent and obeyed onlyWT/ACC/SPEC/ARM/1/Rev.6
Page 19
to law. The guarantor of the independence of judicial bodies was the President of the Republic, who
was the Head of the Council of Justice.  The Minister of Justice and the Procurator General were theDeputy Heads of the Council of Justice.  The Courts of general competence were the Courts of FirstInstance, the Review Courts and the Court of Appeals.  The Constitutional Court comprised ninemembers,  five of which were appointed by the National Assembly, and another four were appointedby the President of the Republic.  The Constitutional Court adopted resolutions and verdicts.  Theseresolutions were final, could not be challenged and entered into force upon promulgation.  According
to the Constitution of the Republic of Armenia, the Constitutional Court should decide on conformity
of the provisions of the Agreement Establishing the WTO and of other WTO Agreements with theConstitution of the Republic of Armenia before submitting them for ratification to the NationalAssembly.  If norms, other than those provided by the laws of the Republic, were provided in theseAgreements then the norms provided in that Agr eement shall prevail.  International treaties and
agreements that contradicted the Constitution may be ratified after making a correspondingamendment to the Constitution.
26. 25.        
The representative of Armenia said that according to the Constitution  new Civil
legislation of the Republic of Armenia beginning  from 1 January 1999 all economic disputes should
be referred to the jurisdiction of the Courts of First Instance.  Disputes between legal persons and
individual citizens were referred to the Courts of First Instance and may be appealed according to theorder, stipulated by Armenian legislation. Armeni an legislation did not contemplate any differential
treatment between CIS and non-CIS legal persons. Resulting on-going judicial and legal reforms anumber of legislative acts were developed and adopted.  In particular, economic litigation shall behandled through the new Civil Procedure and new Criminal Procedure Codes, which had been enactedon 17 June 1998 and 1 July 1998 respectively, and had entered into force on 1 January and 12 January1999 respectively.  Thus Armenia established judicial review by the courts of general competence ofadministrative decisions taken in the area of intellectual property rights protection and customs issues.
By 1 October 1999,
 The Courts of First Instance will be authorized to review administrative decisions
in all areas covered by WTO provisions, including rulings in antidumping, safeguard andcountervailing duty investigations. The representative of Armenia informed that according to the Lawon Administrative Infringements administrative decisions could be appealed to the higher authoritywithin the administrative body after which it could be appealed to the court.
27. 26.        
The representative of Armenia confirmed that from the date of accession Armenia's
laws would provide for the right of appeal of administrative rulings on matters subject to WTOprovisions to an independent tribunal in conform ity with WTO provisions, including Article X:3(b) of
the GATT 1994. The Working Party took note of this commitment.WT/ACC/SPEC/ARM/1/Rev.6
Page 20
28. 27.        The representative of Armenia added that as a result of the changes in the structure of
the Government in mid 1997, the Ministry of Industry and Trade undertook the primary responsibilityin most aspects of policy affecting international trade in goods and services. The Ministry of Financeand Economy was responsible for fiscal policy, but decisions on tariffs were made together with theMinistry of Industry and Trade.  The Central Bank was responsible for monetary policy, exchangerate policy and the banking system. Within the structure of the Ministry of Industry and Trade theArmenian Patent Office was responsible for industrial property protection matters, and the Armenian
National Copyright Agency was responsible for copyright protection.
29. 28.        
The representative of Armenia said that in matters of policy affecting trade in goods
and services, the Central Government retained full authority.  Sub-central and Local administrativebodies have no jurisdiction or authority to establish regulations or taxes on goods and services inArmenia independent of the central authorities in matters covered by provisions of the WTOAgreement.  Within the framework of the process of Armenia's accession to the WTO, the obligationsassumed by the Government of the Republic of Armenia, including the WTO Agreement andArmenia’s Protocol of Accessi on were subject to implementation throughout the Republic of
Armenia.  The Working Party took note of these commitments.
30. 29.        
The representative of Armenia informed the Working Party that after the signing of
the WTO Accession Protocol by the Government of Armenia, all WTO Agreements will be submittedfor review to the Constitutional Court of Armenia.  Legal conclusion of Armenia's WTO Accessionwill be accomplished upon ratification of all WTO agreements by the National Assembly.  Heconfirmed that international treaties and agreements ratified by the National Assembly, includingWTO Agreements, had precedence over domestic laws or other acts in Armenia.  The representativeof Armenia further confirmed that upon the legal conclusion of Armenia’s WTO Accession andentering into force of all WTO Agreements in Armenia they would be immediately enacted within theRepublic of Armenia.  All the laws and legislative instruments necessary for the application of the
provisions would be adopted as provided in the Protocol of Accession and will be in place prior to
that time. The Working Party took note of these commitments.
IV. POLICIES AFFECTING TRADE IN GOODS- Market Access Negotiations
31. 30.        
Armenia undertook negotiations on market access in goods with interested members
of the Working Party.  The Schedule of Concessions and Commitments resulting from thosenegotiations is in Annex I to the Appendix of the Draft
 Protocol of Accession of Armenia.WT/ACC/SPEC/ARM/1/Rev.6
Page 21
- Registration requirements
32. 31.        The representative of Armenia informed the Working Party that with certain
exceptions necessary to safeguard human, animal and plant health and the environment, the formerState monopoly in foreign trade in Armenia was abolished in 1989, and was replaced by a registrationrequirement for the conduct of such activity. Enterp rises or private entrepreneurs engaging in trading
(including importation) were required to be registered in the State Register of Enterprises. By aDecree of the President of the Republic of Armenia of 4 January 1992 entitled On Foreign Economic
Activity, all enterprises or branches, subsidiaries and representations thereof registered and operating
in the territory of Armenia, regardless of their form of ownership, were granted the right to conductforeign economic activity without any additional registration requirements. The legislation
governing company incorporation and registration consists of:  The Law on State Register of
Enterprises, 1993; The Armenian Civil Code, 1999; The Law on Foreign Investment, 1994; TheLaw on State Fees, 1997.  The Law on State Register of Enterprises regulates the procedures forcompany registration. Additional provisions can be found in the Civil Code, and for foreign
investors in the Law on Foreign Investment.   The State registration of enterprises and private
entrepreneurs in the Republic of Armenia, as well as the procedure and conditions for the use of
information provided through the registration process were defined in the Law on State Register of
Enterprises of 2 September 1993. The founder(s) of an enterprise or authorized persons thereof, inaccordance to Article 12 of the Law on State Register of Enterprises, should submit the followingdocuments to the regional department of the State Register: application;  statutory documents;  licenseon activity if necessary;  the resolution on the registration of the firm's name by the Patent Office ofArmenia, as well as the document affirming the payment of the State fee.  Upon the verification ofsubmitted documents the information required by Article 11 of the same law was entered on a Stateregistration card and forwarded to the central body of the State Register for the purpose of uniformcodification, granting of State register number and issuing a certificate of State registration.  The State
registration was verified by the State Registration Certificate given by the State Register.  Any
changes and amendments in statutory documents, or changes in any data entries verified by Stateregistration, were also subject to State registra tion. For the purpose of intermediate, the following
documents should be submitted to the regional department of the State Register:  application;resolution of the governing body of enterprises on making changes and amendments in statutorydocuments;  document containing these changes and amendments, as well as the document affirmingthe payment of the State fee.    Any entrepreneural activities without State registration were prohibitedin the Republic of Armenia.  Natural persons were permitted to import limited quantities of items intoArmenia for personal use without registration, although for a sale thereof they must be registered as
sole entrepreneurs.  Individual entrepreneurs could conduct business operations following registrationWT/ACC/SPEC/ARM/1/Rev.6
Page 22
in accordance with Article 4 of the Law on State Register of Enterprises.  Foreign enterprises are
entitled to carry out entrepreneurial activities in the Republic of Armenia through their branches,affiliates and subsidiaries, registered in the State register of Enterprises of Armenia, as well as throughjoint ventures.  No registration was required in Armenia for any enterprise operating from outside thenational territory as an exporter to Armenia.  For the improvement of registration procedures, the
Ministry of Justice drafted the Law on State Regi stration of Legal Persons, which is anticipated
to be adopted by the National Assembly in the 1
st quarter of 2001.  The Draft Law shortens the
time necessary for the registration of legal and natural persons and would introduce a unified
registration system.
33. 32.        The representative of Armenia confirmed that the former State monopoly in foreign
trade in Armenia had been abolished and that no restrictions on the right of foreign and domesticindividuals and enterprises to import and export goods and services within Armenia’s customsterritory existed, except as provided for in WTO Agreements; that individuals and firms were notrestricted in their ability to import or export based on their registered scope of business; and that thecriteria for registration of companies in Armenia were generally applicable and published officiallyand generally available to traders for their review. He further confirmed that from the date of
accession, Armenia would ensure that all of its laws and regulations relating to trade in goods and all
fees, charges or taxes levied on such rights would be in full conformity with its WTO obligations,including Articles VIII:1(a), XI:1 and III:2 and 4 of the GATT 1994 and that it would also implementsuch laws and regulations in full conformity with these obligations.  The Working Party took note ofthese commitments.
- Customs tariff
34. 33.        
The representative of Armenia stated th at the Law on Customs Tariffs, approved
adopted  by the Parliament in August 1993, provided legislative authority  framework  for setting
tariffs and dealing with customs matters.  Decree No. 615 issued by the Government in December
1993 introduced new customs duties, and these  which were  further modified by Government  Decree
No. 224 issued in  of May 1994 and by Government  Decree No. 39 issued in  of January 1995.
According to the new Constitution of the Republic of Armenia, adopted in 1995, the alterations to theTariff were required to be approved
 adopted  by the National Assembly. upon presentation of the
Parliamentary Permanent Financial Credit, Budgetary and Economic Commission.  The Law on
Customs Tariffs Rates, adopted by the National Assembly in April 1997, introduced the new list ofcustoms duties. The rectification of the Law on Customs Tariffs was accomplished by the adoption of
the Law on Amendments to the Law on Customs Tariffs in September 1997.   In December 1998, theLaw on Customs Duties was adopted by the National Assembly.  The Law on Customs DutiesWT/ACC/SPEC/ARM/1/Rev.6
Page 23
covered the following sections:  customs duties and types thereof;  customs valuation; and customs
tariffs rates.  Thus an integration of the Law on Customs Tariffs of the Republic of Armenia and theLaw on Customs Tariffs Rates of the Republic of Armenia had been made. The Law was in fullcompliance with the relevant WTO provisions.  Armenia had been using the Harmonized System of
Commodity Classification since 1991.  In July 2000, the new Customs Code Republic of Armenia
was adopted by the National Assembly, which incorporated the provisions of the Law on
Customs Duties, including the customs duty rates.  The Customs Code entered into force on
1 January 2001.
35. 34.        
The representative of Armenia said that the customs tariffs were expressed in ad
valorem terms and were levied on c.i.f. values , except for the tobacco products, on which the
customs duties, according to the new Republic of Armenia Law “On Fixed Charges for Tobacco
Products” of 31 March 2000, were levied at a fixed rate.  This law stipulated that importers oftobacco products into the Republic of Armenia should pay fixed charges for tobacco products,consisting of a value added tax, an excise ta x and customs duties, according to the following
rates:
CN Code Brief Description of ProductsAmount of fixed
charges (US$ for
1,000 items)
2402 10 001 Cigars 3,000
2402 100 09 Cigarillos 30
2402 20 900 Cigarettes with filters 10
2402 20 910 Cigarettes without filters 3
The amount of the customs duties formed 8.5 per cent of the total amount of the fixed charges
for imported tobacco products.   Apart from that, according to the Law on Amendment to the
Customs Code of the Republic of Armenia of 26 December 2000, customs duties for thefollowing goods were levied on specific base:
Customs Duty Rate
(AMD) HS number Product descriptionUnit
MeasureImport Export
2203 Beer 1 litre 50 0
2204 Grape wines 1 litre 100 0
220410 Sparkling wines 1 litre 75 0
2205 Vermouth and other wine of fresh grapes flavoured
with plants or aromatic substances1 litre 140 0
2206 Other brewed drinks (for example, cider, perry,
mead);1 litre 60 0
2207 Ethyl spirit 1 litre (by
recalculationof 100%
spirit)70 0WT/ACC/SPEC/ARM/1/Rev.6
Page 24
Customs Duty Rate
(AMD) HS number Product descriptionUnit
MeasureImport Export
2208 Spirit drinks, including
220820 Made from distillation of grape wine and wine
ingredients (cognac, armanyak, etc.)1100 0
220830 Whiskies 370 0
220840 Rum & tafia 420 0
220850 Gin & Geneva 450 0
220860 Vodka 240 0
220870 liquor, and fruit-vodka 600 0
220890 Other1 litre (by
recalculation
of 100%spirit)
240 0
At present, 258  279 items were specified in Armenia’s tariff schedule, reflecting the fact that majority
of product categories identified at the two-digit level of the Harmonized System carried  had the same
rate of duty. In response to questions from Working Party members concerning the possibility ofdisaggregating the tariff to the four or greater digit level, the representative of Armenia. stated that as
a result of ongoing disaggregation the former number of 195 items had been increased up to thepresent number of 258
 279. The representative of Armenia further added that if it proved necessary
the Government of Armenia would continue disaggregating its tariff schedule from its present level.After
 Following the  adoption of the new  Law on Customs Tariffs Rates the previous system  existing
practice  of a five tariff rates system  was terminated and only two tariff rates remained - zero and 10
per cent.  More than sixty per cent of the items in the tariff schedule were subject to duty rate of zero
(161 items) with remaining 97 items subject to 10 per cent duty rate.    Taking into account thevolume of imported goods belonging to each of those groups, the weighted average tariff was about
less than  4 per cent. Tariff revenue was  made about  projected to account for about 9.79  5 per cent of
the Government's total tax collections and about  8.19 per cent of the total budget revenue in 1998  in
1999 .  Estimated figures for 1999 were 10.05 per cent and 8.63 per cent, respectively.   A slight
increase was foreseen as for the year 2000 .
36. 35.        The representative of Armenia stated that the rates of customs duty would not be
increased beyond levels bound in Armenia’s WTO Sche dule of Concessions, which is annexed to the
Protocol of Accession of Armenia.  The Working Party took note of this commitment.
- Other duties and charges levied on imports
37. 36.        The representative of Armenia confirmed that there were no other duties and charges
levied on imports except ordinary customs duties and the fees for services rendered by customsagencies
 bodies as  described in paragraphs 39-41  40-42  below.   Any such charges applied to imports
from the date of accession would be in conformity  with WTO provisions of Armenia's Protocol ofWT/ACC/SPEC/ARM/1/Rev.6
Page 25
Accession.  The representative of Armenia confirmed that regarding import/export documentation
there was no requirement for authentication of the documentation by Armenian consulates overseas,and there was no fee charged in this respect. The representative of Armenia stated that Armenia wouldbind all duties and charges, other than ordinary customs duties, at zero in Armenia's Market AccessionSchedule under Article II:1(b) of the GATT 1994, annexed to the Protocol of Accession of Armenia.The Working Party took note of this commitment.
- Tariff rate quotas
38. 37.        
The representative of Armenia stated that Armenia did not apply [any import quotas,
including] tariff rate quotas.  The representative of Armenia confirmed that his Government had noplans to introduce tariff rate quotas.
- Tariff exemptions
39. 38.        
The representative of Armenia stated that all tariff exemptions other than those
granted in the context of free trade area agreements were granted on a MFN basis.  According to
Article 18 of the Republic of Armenia La w on Customs Duties of 30 December 1998, such
exemptions were granted in respect of the following:
- capital assets imported by foreign investors and designated for a statutory fund of
joint ventures and enterprise s with foreign investments essential equipment
imported by foreign enterprises and joint ventures (with at least 30 per cent foreign
ownership) and designated for a suppl ement of enterprises’ statutory funds ;
- goods in transit through the Armenian territory;
- trucks and vehicles, regularly operating as freight and passenger carriers through the
Armenian territory, as well as fuel, food, tools and other minor items necessary for
temporary use to perform these operations;
- foreign exchange, bonds and other securities;
- humanitarian supplies the goods imported into the Republic of Armenia within the
framework of humanitarian aid or charity programmes ;
- specific goods temporarily imported into the  Armenian territory and further exported
without being processed, such as fair and exposition exhibits, commodity patterns and
package, professional equipment of tempor ary visitors, advertising materials, live
animals, etc.;
- prosthetic and orthopaedic equipment and spare parts thereof;
- goods imported into duty-free shops or to bonded warehouses  for subsequent
exportation from the Armenian customs territory;
- goods imported into the Republic of Armenia as a property of foreign clients with
a view of processing in the Republic of Armenia’s territory and subsequent
exportation;
- goods and articles, imported at expense of credits, received by the Republic of
Armenia;
- goods and articles imported by the Central Bank of the Republic of Armenia;
- any other instances foreseen in intern ational agreements., including free trade
agreements;WT/ACC/SPEC/ARM/1/Rev.6
Page 26
According to Article 104 of the new Republic of Armenia’s Customs Code, which would replace
the Law on Customs Duties, the following goods should be exempt from the customs duties:
- goods released under the regime of transit shipment;
- goods released under the regime of temporary importation;
- goods released under the regime of temporary exportation;
- goods released under the regime of temporary importation for inward
processing;
- goods released under the regime of temporary exportation for outward
processing;
- goods released under the regime of importation into a customs warehouse;
- goods released under the regime of importation into a free customs warehouse;
- goods released under the regime of re-importation and re-exportation, except for
the cases foreseen by the Code;
- goods released under the regime of destruction;
- goods released under the regime of importation into a duty free shop;
- the means of transport used for regular interstate transport of freight,  luggage
and travellers, as well as tools, fuel, foodstuffs, which may necessarily be needed
during the trip, at stopovers or for fi xing the malfunctions of the mentioned
means of transport;
- currency, foreign currency and securities;
- the goods imported into the Republic of Armenia within the framework of
humanitarian aid or charity programmes;
- goods imported into the Republic of Armenia for the contribution to the
statutory fund of commercial organizations and included in the list of goods
established by the Government of the Republic of Armenia;
- sample quantities of goods imported into the Republic of Armenia within the
framework of exhibitions, international fairs and similar events.
- Customs fees and charges for services rendered
40. 39.        Some members of the Working Party stated the ad valorem  customs fee levied by
Armenia on imports was inconsistent with the provisions of the WTO, in particular, Article VIII ofthe GATT 1994.  They also noted that a transition period to bring the fee into conformity with ArticleVIII was not appropriate
 adequate.  Armenia should conform with the requirements of Article VIII
from the date of its accession, and from that time the proceeds of  from the collection of fees should
only be used for the operation of customs clearance facilities and total annual revenues summed up
from the amounts of the fees should not exceed the cost of customs clearance of the imported goods.
Following the accession, information on the method of calculation of the fee and the cost of provision
of customs clearance facilities should be provided to WTO Members upon request.
41. 40.        In response to questions from Working Party Members about Armenia's system of
customs fees, the representative of Armenia stated that according to the amendment to GovernmentDecree No. 615, which had entered into force on 1 May 1996, ad valorem , customs fee of 0.3 per cent
had been charged on imports, with the upper li mit of AMD 600,000 (approximately US$1,200).  The
Law on Customs Fee, adopted by the National Asssembly on 30
 28 December 1998, abandoned theWT/ACC/SPEC/ARM/1/Rev.6
Page 27
ad valorem  principle for charging of customs fees replacing it with a uniform fee of Dram 3,500
(about US$6.5) for customs processing and specific  weight-related fee of Dram 300 per ton (about
US$0.55) for freight inspection.  According to Article 3 of the Law on Customs Fee, starting from1 January 1999 the following customs fees were applicable:
1. For carrying out customs formalities (except cargo processing) related
 in respect to
goods and other articles carried across the Republic of Armenia’s customs border
as well as to transportation of currency and foreign currency by banks, crossing the
customs border of the Republic of Armenia,  the customs fee should amount to
3,500 Drams.
2. The amount of customs user fees paid for cargo processing:
a) 1,000 Drams for carrying out customs control for each  the cargo under 1 ton
of weight;
b) 300 Drams for each additional (or incomplete) ton for  of cargo over 1 ton of
weight,
3. When customs formalities related  in respect to the goods, or some parts  of these
formalities are  were carried out elsewhere than in places determined by customs
bodies, for each corresponding action customs user fees shall  should be twice the
amount determined by Article 3 of the Law on Customs Fee.
4. For issuing the documents (forms) by Customs bodies the customs fee should be
1,000 Drams.
5. For Customs escorting on the territory of the Republic of Armenia the customs fee
should be 10,000 for each 100 km.
6. For providing Customs warehousing by Customs bodies:
a) 1,000 Drams daily for cargo under 1 ton of weight, but not exceeding 0.01%
of customs value of cargo.
b) 1,000 Drams daily per ton for cargo weighing 1 ton or more but it should  not
exceed ing 0.01% of customs value of cargo.
7. For the purposes of Customs inspection of vehicles, the amount of customs user fee is
should be :
a) 2,000 Drams for a car with less than 10 passenger seats,
b) 5,000 Drams for all other vehicles.
According to Article 4 of the Law on Customs Duties the following goods are exempt
from Customs user fees:
a) those goods that during transportation enter customs territory of the Republic
of Armenia within the framework of humanitarian aid programs;
b) accompanying goods, transported by natural persons (other than
entrepreneurs) across the Customs border of the Republic of Armenia except
vehicles for individual  personal use;WT/ACC/SPEC/ARM/1/Rev.6
Page 28
c) the part of  goods imported by physical  natural persons other than
entrepreneurs, which was not subject to Customs duties  in the amounts not
more than allowed for duty-free imports;
d) cultural values, temporarily exported with a notification of intended return;
e) vehicles carrying out regular international conveyances  transport in the
process of transportation.
The Republic of Armenia’s Customs Code, which incorporated the provisions of this Law,
replaced it after the adoption of relevant seconda ry legislative acts.  According to Article 110 of
the new Code, the following rates of customs fees were applicable starting from 1 January 2001:
1. A customs fee of AMD 3,500 for the customs formalities (apart from the
inspection and registration) in respec t of the goods and means of transport
carried across the customs border of the Republic of Armenia, as well ascurrency and foreign currency carried by the banks.
2. A customs fee levied on the inspection and registration of the goods, except the
goods transported through pipeline and electric transmission circuits, should
add up to:
- AMD 1,000 for the customs control of cargo declared under the same
declaration and having up to one ton of weight;
- AMD 300 for each additional (or incomplete) ton of weight of cargo
declared under the same declaration and having above one ton of weight.
3. A customs fee of AMD 500,000 monthly for the customs control and registration
of the goods transported through pipeline and electric transmission circuits.
4. If the customs formalities are performed in places other than those specified by
the customs bodies, the customs fees should  be levied in the two-fold amount of
the rates prescribed by this Article.
5. A customs fee of AMD 1,000 for each document form distributed by the customs
bodies.
6. A customs fee of AMD 10,000 per each 100 km for the customs escort of the
goods throughout the customs territory of the Republic of Armenia.
7. A daily customs fee for the cargo stored by the customs bodies:
- AMD 1,000 for the cargo under 1 ton of weight;
- AMD 300 for each additional one (or incomplete) ton of cargo;
8. A customs fee for the customs co ntrol of the means of transport:
- AMD 2,000 for a car with up to 10 seats;
- AMD 5,000 for other means of transport.
According to Article 111 of the new Customs Code, the following goods would be exempt from
the customs fees:
- goods that enter into the customs territory of the Republic of Armenia within the
framework of humanitarian aid and charity programmes;WT/ACC/SPEC/ARM/1/Rev.6
Page 29
- all the goods carried across the customs border of the Republic of Armenia by
natural persons and allowed for duty free importation;
- cultural values exported under the regime of temporary exportation and subject
to re-importation;
- means of transport involved in regu lar international transport operations
pending the transportation.
The fee was also applied to exports and to im port purchases by the Government of Armenia.
Proceeds from customs fee collection were transferred to the State budget.
41.         The r epresentative of Armenia further informed that by 30 December 1998 Armenia  had
revised its customs fee,  previously 0.3 percent ad valorem, with a maximum fee level of dram
600,000 (about US$1,200), replacing it with a uniform fee of dram 3,500 (about US$6.5) for customs
processing and specific weight-related fee of dram 300 per ton (about US$0.55) for freight inspection.
In this regard, Armenia would implement a  fee level that would ensure that the fee collected would
approximate the cost of the customs services rendered in processing imports. The fee  has also been
applied to exports and to import purchases by the Government of Armenia. Proceeds from application
of the fee only would  be used to fund import and export processing activities and  to process trade
subject to the fee. Total annual revenues from the fee would not exceed the cost of the customs
services provided. Following accession, information on the method of calculation of the fee and the
cost of provision of customs processing woul d be provided to WTO Members upon request.  The
Working Party took note of these commitments.
42. 41.        The representative of Armenia confirmed that from the date of accession, Armenia
would not reintroduce an ad valorem customs fee. The fee for customs processing established underthe Law on Customs Fee adopted on
 of 30 December 1998 and starting from 1 January 2001, by the
new Republic of Armenia’s Customs Code, which in principle incorporated the provisions of the
mentioned Law, would be applied in conformity with WTO obligations, in particular with Articles
with VIII and X of the GAT T 1994. The level of applied fee would not exceed the approximate cost
of customs processing of individual import and export transactions. Revenues from the collection of
the fees would be used solely for customs processing of imports and exports, and total annual revenue
from collection of the fee would not exceed the appr oximate cost of customs processing operations for
the items subject to fees. He also confirmed that revenues from the fee were not used for customsprocessing of imports exempted from the fee.   Information on application and level of the fee,revenues collected and their use, would be provided to WTO Members upon request. The WorkingParty took note of these commitments.WT/ACC/SPEC/ARM/1/Rev.6
Page 30
- Application of internal taxes to imports
43. 42.        The representative of Armenia informed the Working Party that Armenia's tax system
had been completely overhauled since 1992, as part of the Government's overall policy of economictransformation towards a market economy. On 14 April 1997 the National Assembly of the Republicof Armenia adopted the new Law on Taxes. Under th is Law the taxes, applied in Armenia, were as
follows:
- value added tax;
- excise tax;
- profit tax;
- income tax;
- property tax;
- land tax
- simplified tax .
In particular, two indirect taxes were imposed on imports and domestic production in Armenia - the
value added tax, which was charged on the turnover  of goods and services, and the excise tax on , which
was charged on realization of  certain goods. The direct taxes were included in paragraphs 9-13 14
above, where the following taxes were described:  profit tax and income tax, which were levied on theresidents and non-residents;  property tax which was levied on the buildings and vehicles of natural
and juridical persons owned as a private property or for commercial usage;  simplified tax,
substituting VAT and (or) profit (income) fax, and land tax imposed on private landowners and
users of land under State property.
- Value Added Tax
44. 43.        
The representative of Armenia informed that after the Law on Value Added Tax
entered into force on 1 July 1997, the destination principle of VAT application was valid in relation toany country, which meant that Armenian exports to any destination were charged at zero rate, and anyimports to Armenia were charged at the standard rate of 20 per cent
.  In this regard, Armenia ensured
MFN treatment in the application of VAT to imports.  The VAT was uniformly charged at the rate of
20 per cent on sales of domestic and imported goods and services.  The value added tax was calculated
and levied by customs bodies on goods imported to  Armenia with above non zero customs tariff duty
rates and/or subject to excise tax, listed in the Law on Customs Duties ,  irrespective of the countries of
exportation.  On goods imported to Armenia with zero  customs tariff duty rates, listed in the Law on
Customs Duties, the value added tax was calculated and levied by the Tax Inspectorate Authorities upon
sale or utilization of goods .  With respect to certain imported  goods with zero customs duty rate
and non-subject to excise tax, listed in Government Decree No. 913 of 31 December 2000, the
value added tax was calculated and levied by the Tax Authorities upon their sale or utilization.WT/ACC/SPEC/ARM/1/Rev.6
Page 31
The items exempted from VAT, in particular, included: the urban electrical transport,  tuition for
education in secondary schools, exercise books and music books for schoolchildren; realization of
children's food;  scientific research work; realization of the veterinary drugs; realization of domestically
produced agricultural products by the producer activities related to provision of pensions; somefinancial operations and services, etc.  In addition, zero-rate tax was applied to: the taxable turnover ofgoods exported outside of the customs territory of Armenia; the goods imported for official usage by
diplomatic and consular representations or by equate d with them other international, intergovernmental
(interstate) organizations, as well as goods and serv ices acquired by these organizations on the territory
of Armenia; transit of foreign pay-loads through the territory of Armenia; construction and relevant
(designing, research, etc.). works performed
 at the expense of the resources of Armenian Diaspora
communities, foreign countries, foreign and intern ational intergovernmental (interstate) and non-
governmental (public) and religious organizations with in the scope of humanitarian aid and benevolent
or other social programmes.   The full list of VAT exemptions was provided to the Working Party in the
Law on Value Added Tax.
-E x c i s e  T a x
45. 44.        In response to the questions concerning excise tax the representative of Armenia
added, that according to the new Law on Excise Tax,  which entered into force on 1 August 2000,
excise tax was imposed on domestic and imported goods.  Excise tax on imported goods was collectedby the customs authorities, and excise tax charged on local production was collected by the taxauthorities.Tax Inspectorate
  According to the Law on Excise Tax, excise tax imposed on natural
persons and legal entities, as well as those enterprises without the status of legal entity,  which were
producing/realizing in the Republic of Armenia or importing into the Republic of Armenia thefollowing goods:
-
 caviar;
- beer;
- grape and other wine;
- wine spirits, spirits and strong alcohol;
- cigars, cigarillos and cigarettes with tobacco and substitutes thereof ;
- gasoline;
- diesel fuel;
- natural leather garments and accessories;
- fur and furskin articles (excluding workers' and military semi-coats made of sheep furskin);
- glass crystal;
- china, jewellery;  and
- bijouterie.
-  Beer;
- Grape and other wines, wine ingredients, including:
- sparkling wines;
- champagne;WT/ACC/SPEC/ARM/1/Rev.6
Page 32
- Vermouth and other wine of fresh grap es flavoured with plants or aromatic
substances;
- Other brewed drinks, including:
- made from distillation of grape wine and wine ingredients (cognac, armanyak,
etc.);
- vodka, liquor, and fruit-vodka;
- Tobacco substitutes;
- Primary oil and oil
- Diesel fuel;
- Oil gas and other gaseous hydrocarbons (except for natural gas).
For the goods produced in Armenia the subject of taxation was the sales value of the turnover of the
realization of the goods, based on the realization prices (without excise and value added taxes) wasthe subject of taxation.    In the Republic of Armenia the taxpayers producing/realizing taxable goodsin Armenia were paying the tax charged on domestically produced goods during ten working daysfollowing the realization of goods.  For goods imported into Armenia the subject of taxation was thecustoms value of the goods declared by the importer (applicant) of the goods (without value addedtaxes and customs tariffs).  In the Republic of Armenia excise taxes charged on imported goods were
levied by the customs bodies in ten days after importation.
46. The excise taxes were as follows:
HS number
Product description Ad valorem tax
1604 30 100 Caviar 200
2203 Beer 50
2204 – 2206 Grape wine 50
2207;  2208 Strong alcohol 125
2402 Cigars, cigarillos and cigarettes with
tobacco and substitutes thereof100
2710 00 270 Gasoline 35
2710 00 290
0 320
0 00 340
0 00 360
0 00 690 Diesel fuel 10
4203 Natural leather garments 25
4301 -  4303 Fur and articles of furskin:  of which:
430310 300 workers’ and military semi-coats
made of sheep furskin25
6911
7013 31Glass crystal and china 25
7113 – 7117 Jewellery 15WT/ACC/SPEC/ARM/1/Rev.6
Page 33
HS number Product description Taxable base Rate(AMD)
2203 Beer 1 litre 70
2204
220410Grape and other wines, wine ingredients,
includingSparkling wines,Champagne1 litre 100
180
300
2205 Vermouth and other wine of fresh grapes
flavoured with plants or aromatic substances.1 litre 500
2206 Other brewed drinks (for example, cider, perry,
mead);1 litre 180
2207 Ethyl spirit 1 litre (by
recalculation of100% spirit)600
2208
220860, 220870Spirit drinks, including
Made from distillation of grape wine and wineingredients (cognac, armanyak, etc.)Vodka, liquor, and fruit-vodka1 litre 1,500
1,200
300
2403 Tobacco substitutes 1 kilogram 1,500
2709 Primary oil and oil 1 ton 27,000
271000690 Diesel fuel 1 ton 11,500
2711 (excluding
271111 and271121)Oil gas and other gaseous hydrocarbons (except
for natural gas)1 ton 1,000
For goods under code 2208 with spirit concen tration over 40 per cent the tax rate shall be
increased by additional AMD 7.5 for each percent exceeding 40 per cent.  The excise tax rate oftobacco products and petrol are determined by a separate law.  The Law  “On Fixed Chargesfor Tobacco Products” of 31 March 2000 establishes fixed fees on tobacco products. Accordingto the Law the fixed fees on imported tobacco products substitute the value added tax, the excisetax and customs duties, and the fees on tobacco products produced in Armenia substitute the
value added tax and the excise tax. The law st ipulates the following rates for imported and
domestically produced tobacco products:
Amount of fixed fees
($US for 1,000 items)
CN code Brief Description of Products
On imported
productsOn domestically
produced products
2402 10 001 Cigars 3,000 2,200
2402 100 09 Cigarillos 30 22
2402 20 900 Cigarettes with filters 10 8
2402 20 910 Cigarettes without filters 3 2.2
47. 46.        The representative of Armenia stated that the Armenian Government recognized that
it was a violation of the national treatment principle for excise taxes on domestic products to be lower
than on imports of the same or a like product.  Therefore, on 1 January 1997 Armenia equalizedexcise taxes on domestic goods and imports of the same or like products as part of the accessionWT/ACC/SPEC/ARM/1/Rev.6
Page 34
commitments (see the table in paragraph 45  46 above).   Furthermore, effective 1 August 2000 the
new law on Excise Tax has defined specific tax rates, being the same for both domestically-
produced and imported goods, for all products subject to Excise Tax, and has limited the itemssubject to tax to only alcohol and alcoholic beverages (including wine, beer), tobacco andtobacco products, and fuel products such as gasoline, diesel and crude oil, liquid petroleum gas.
48. 47.        
Some members of the Working Party noted that the non-application of these taxes to
imports from FSU States may be seen to give ri se to discrimination against products from non-FSU
countries.  The representative of Armenia stated that Armenia had switched to the destination
principle of taxation with respect to imports from all sources.  Armenia was therefore attempting topersuade its CIS trading partners of the desirability of charging these taxes at destination and notorigin.
49. 48.        
The representative of Armenia confirmed that, from the date of accession, Armenia
would apply its domestic taxes, including value-added and excise taxes, in a non-discriminatorymanner consistent with Articles I and III of the GATT 1994. In this regard, in accordance with thenew Laws on VAT and on Excise tax, these taxes were applied at an equal rate on domestic andimported goods and Armenia applied the destination principle to value-added and excise taxes with
respect to imports from all sources. In addition, the method of application of all indirect taxes applied
to imports would be published and readily available to importers, exporters, and domestic producers.The Working Party took note of these commitments.
- Non-tariff measures and import licensing
50. 49.        
The representative of Armenia stated that pursuant to the Resolution No. 124,
29 December 1995, which regulates non-tariff measures in Armenia,  most imports were free of anyprohibitions or quotas. The import restrictions were imposed for health, security, and environmentalreasons. The items affected were all kinds of weapons, military technique and the consumablesnecessary for its production, technologies, equipment and locators of nuclear materials (including
heating materials), special non - nuclear materials and services related to it, ionizing radiation sources,
the importation of which was carried out through authorization issued by the Government of theRepublic of Armenia.
50.         The representative of Armenia stated that according to the Resolution No. 124 the following
imports are subject to licensing:
HS number
Pharmaceutical products, medicines 13.02, 29.38, 29.41, 30.03, 30.04;WT/ACC/SPEC/ARM/1/Rev.6
Page 35
 Phytoprotection chemicals 38.08
51. The representative of Armenia stated that the list of pharmaceutical products and
medicines subject to import and export permissi on is defined by Government Resolution 581 of
20 September 2000 as follows:
HS number
Pharmaceutical products,
medicines051000; 1211; 2941; 3001; 3002; 3003; 3004; 3005; 300630 000;
300650 000; 300660; 380840;1108*; 1301; 1302; 1504; 152000 000; 1702; 1804; 1805; 2207;
2209; 2501; 2520; 2712; 2801-2802; 280440 000; 281000 000;
284700 000; 285100;  2904-2909; 2912-2940; 2942; 3301.
*  1108 and the following categories of products in the list used for pharmaceutical purposes, are
subject to import and/or export permission
Pharmaceutical products, which were imported into the territory of the Republic of Armenia, were
subject to mandatory certification in accordance with Resolution No. 15 (19 January 1998) of the
Government.  For this purpose, the inspection of pharmaceutical products should be accomplished in
order to verify their conformity with standards, adopted in the Republic of Armenia, and a conformity
certificate should be issued. Certificates of conformity were issued by certification bodies accredited
by the Department of Standardization, Metrology and Certification (SARM) according to procedures
stipulated in Resolution #15 of the Government.  The following groups of products were listed for
certification:
Pharmaceutical products 30.01-30.06
Vitamins 29.36
52. 51.        In response to questions concerning the importation of pharmaceutical products and
medicines, the representative of Armenia stated that these have to be permitted by the Ministry ofHealth of the Republic of Armenia (except for veterinary drugs and related products).  The
importation of phytoprotection  chemicals and veterinary drugs (HS 38.08) should be permitted by the
Ministry of Agriculture, moreover the permission for importation of phytoprotection chemicals should
also be sanctioned by the Inspection of Plant Protection in the Ministry of Agriculture. The by-law
Resolution 581 on issuing permissions  for importing and exporting pharmaceuticals, stipulated that:
- permissions for importation of pharmaceuti cals were issued by the Pharmaceutical
Department of the  Ministry of Health of the Republic of Armenia (except for veterinaryWT/ACC/SPEC/ARM/1/Rev.6
Page 36
drugs and related products), and authorizations for importation of phytoprotection
chemicals and veterinary drugs and related products were issued by the Ministry of
Agriculture  respectively ;
- the permissions were for single use only;
- to issue an permission the following documents and conditions were required:
- permissions can be obtained by:
- those importers that have a licence for conducting exportation and importation
activity in pharmaceutical products and (or) medicines, given by the Ministry of
Health;
- those importers that have a licence for pr oduction of pharmaceutical products and
(or) medicines, given by the Ministry of Health;
- those importers who have no licence, but  whose activity is connected to the
pharmaceutical products and medicines research, experimental testing, quality,effectiveness and safety control;
- to issue permission the following documents and conditions were required:
(a) the licence for commercial activities involv ing pharmaceutical products in the Republic
of Armenia (Resolutions 161/415 and 36). The Resolutions stipulated that the
production and wholesale and retail trad e in pharmaceutical products and medical
utensils were subject to State licen sing in the Republic of Armenia.  The Law “On
Medicines” stipulates that importation and exportation activity has to be licensed.
Specific requirements for importation and ex portation activity licensing are being
elaborated by the Government.  Presen tly, a licence for wholesale trade gives to
business entities also a right to conduct importation and exportation activities.
Resolution 36 stipulated that:
- pharmaceutical and medical activities were subject to licensing in the Republic of
Armenia;
- licensing was carried out by the Ministry of Health;
- licenses were issued for a period of 5 years.
Licenses for wholesale and retail trade in pharmaceutical products and medical utensils
were issued by the State Licensing Co mmittee of the Ministry of Health. The
procedures for issuing licenses were approved by the Resolution 188. The same
procedures (including import permi ssion for pharmaceuticals and chemicals
) applied to
individuals who have received medical and pharmaceutical education in foreign
countries. And in the case of the existence of  international agreements signed by the
Republic of Armenia the procedures specified in the agreement applied
(Resolution 188, 24 July 1996). Foreign specialists invited to implement programmes of
international and intergovernmental agreements were not subject to licensing.
(b) Imported or exported pharmaceutical products and agricultural chemicals  must be
registered in the Republic of Armenia. The registration of pharmaceutical products and
medical utensils was performed in the Re public of Armenia in accordance with the
recently passed Law "On Medicines" and in compliance with registration requirements,
approved by the Pharmaceutical Department of  the Ministry of Health.  The authority to
make changes and amendments in the list of registered phytoprotection chemicals
allowed for importation was delegated to the Inspection of Plant Protection in theWT/ACC/SPEC/ARM/1/Rev.6
Page 37
Ministry of Agriculture, pending the esta blishment of the State Interdepartmental
Committee for Registration of Phytoprotective chemicals.
(c) There must be conformity of the quality of imported or exported pharmaceutical
products to the quality standards accepted in the Republic of Armenia  In this respect
Resolution #15 of the Government regulated the procedures of importation and
exportation of products subject to mandatory certification and stipulated the list of those
products,  importation and exportation of whic h were subject to mandatory certification .
(d)     Imported and exported pharmaceuticals should have at least one year of expiration
period, except for the pharmaceuticals whose period of expiration was less than one
year (the latter should have at least two-th irds of the period of expiration at the time of
importing).
53. 52.        The representative of Armenia further stated that any person, firms and institutions
wishing to apply for an import permission may do so provided they are registered as a juridical personor a sole entrepreneur undertaking a business activity in Armenia, subject to possession of appropriate
license to perform pharmaceutical activities. Registration as a juridical person or sole entrepreneur
was an automatic procedure, subject to no restrictions, except of those activities which require a statelicensing.   The applications for permissions were required to be determined within fifteen
 ten days of
receipt of an application.  In response to questions from some members regarding whetherpermissions could be issued more quickly, the representative of Armenia stated that since the fifteen
ten day stipulation was a maximum period, in practice permissions could be obtained within a shorter
time period.  If goods arrived without permission, they could only be cleared through customs upon
production of the necessary import permission.
54. 53.        The representative of Armenia said that requests for permission could be refused and
issued authorizations could be suspended  if  (a) there was incorrect and/or insufficient information in
the presented documents,  (b) the period of validity of the pharmaceutical products was exceeded,(c) the actual quantity of product
 pharmaceuticals and (or) medicines did not correspond to the
quantity  specifications stated in the importation documents  (d) the imported pharmaceuticals were
not registered in Armenia  (e) the quality of imported pharmaceutical products did not correspond toquality standards accepted in the Republic of Armenia. Unjustified delays and refusal to issuepermission, as well suspending and cancelling issued certificates,
 could give rise to judicial
procedures within 30 days after the refusal or suspension .
55. 54.        The representative of Armenia added that to receive permission for importation of
pharmaceutical products the following documents were required: an application form, a
document/contract relating to the acquisition of the pharmaceutical products, a licence to trade inpharmaceutical products in Armenia, a certificate of quality issued by the producer.  The importationpermissions and the conformity certificate
 were issued after the collection of a corresponding fee.WT/ACC/SPEC/ARM/1/Rev.6
Page 38
56. 55.        The representative of Armenia further noted that permissions were issued for the
period necessary to carry out the engagements, bu t no longer than one year of three months. The
validity a permission could be extended upon the substantiated request of an applicant. The bodyissuing the permission could suspend its validity or cancel it. Permissions were not transferableamong importers.  The representative of Armenia stated that the importation of phytoprotection
chemicals (HS 38.08) should be permitted by the Ministry of Agriculture, moreover the
permission for importation of phytoprotection ch emicals should also be sanctioned by the
Inspection of Plant Protection in the Ministry of  Agriculture.  The authority to make changes
and amendments in the list of registered phytoprotection chemicals allowed for importation wasdelegated to the Inspection of Plant Protection  in the Ministry of Agriculture, pending the
establishment of the State Interdepartmental Co mmittee for Registration of Phytoprotective
chemicals. Imported or exported agricultural chemicals must be registered in the Republic of
Armenia.   According to the Rules on issuing inferences on import of plant protection agents into
the Republic of Armenia to issue a  permission the following documents were required: a)
Application by the importer; b) Certificate of origin and quality certificate issued by theproducer or an appropriate organization.  Import permission for agrochemical products is
given for an import transaction (for single use). Permission is given only to those agrochemicals
which are included in the list of phytoprotection chemicals registered in Armenia.
57. 56.        
The representative of Armenia confirmed that, from the date of accession, Armenia
would eliminate and would not introduce, re-intr oduce or apply quantitative restrictions on imports or
other non-tariff measures such as licensing, quotas, bans, permits, prior authorization requirements,licensing requirements, and other restrictions having equivalent effect that cannot be justified underthe provisions of the WTO Agreement. He further confirmed that the legal authority of theGovernment of Armenia to suspend imports and exports or to apply licensing requirements that couldbe used to suspend, ban, or otherwise restrict the quantity of trade would be applied from the date of
accession in conformity with the requirements of the WTO, in particular Articles XI, XII, XVIII,
XIX, XX, and XXI of the GATT 1994, and the Mu ltilateral Trade Agreements on Agriculture,
Sanitary and Phytosanitary Measures, Import Licensing Procedures, Safeguards and TechnicalBarriers to Trade.  In this regard he also stated that the same kind of requirements contained inResolution No. 124, 29 December 1995 relating to imports would be equally applied to imports and tothe purchase or sale of similar domestic products .  Any exemptions from those requirements would be
equally applied to imports and the output of domestic firms. The Working Party took note of thesecommitments.WT/ACC/SPEC/ARM/1/Rev.6
Page 39
- Minimum import prices
58. 57.        The representative of Armenia noted that Armenia did not maintain a system of
minimum import prices.
- Customs Valuation
59. 58.        Some members of the Working Party referred to the Agreement on Customs
Valuation and to certain inconsistencies of the Customs Regulations of Armenia in respect of customsvaluation.  These Members requested more detailed explanations with regard to the implementation
by Armenia of specific provisions of the Customs Valuation Agreement, in particular Articles 7, 8,
10, 11 and 12 thereof.
60. 59.        
The representative of Armenia informed the Working Party that Armenia's system of
customs valuation was based on the transaction value. The Armenian regulations relating to customsvaluation were contained in the Government Order
 Procedure for the Calculation of the Customs
Value of Imported Goods attached to Government  Decree No. 615,  of 6 December 1993. At the
same time the Armenian regulations for establishing the customs value were also reflected in the Law
on Customs Tariffs of 18 August 1993.  The current regulations relating to customs valuation werecontained in the Law on Customs Duties adopted by the National Assembly on December 1998.  The
new Republic of Armenia’s Customs Code was adopted by the National Assembly on
6 July 2000 which entered into force on 1 January 2001 replaced the Law on Customs Duties.
According to the Law, a primary method for determination of the customs value was the transaction
value method. The Law , as well as the new Republic of Armenia’s Customs Code,  provided for the
same six methods of valuation laid out in the Ag reement on Implementation of Article VII of the
GATT 1994.  In response to further questions, the representative of Armenia stated that Paragraph 3of the Article 12 of the Law on Customs Duties provided a possibility of reversal of the order ofapplication of the valuation methods specified in Article s 5 and 6 of the Customs Valuation
Agreement upon request of an importer. This provision was included in the Article 94 (Paragraph
2) of the new Republic of Armenia’s Customs Code.   In response to questions of some members of
the Working Party concerning sales between related pe rsons, the representative of Armenia stated that
the provisions concerning sales between related persons  were not incorporated in the Law on Customs
Duties. Provisions concerning the sales between related persons were incorporated in Article 78  of
the Draft  new Customs Code of the Republic  of Armenia. which was currently under consideration
of the Government.   The representative of Armenia said that in relation to Article 11 of the Customs
Valuation Agreement, Paragraphs 2 and 3 of Article 13 of the Law on Customs Duties , as well as
Article 96 of the new Customs Code,  provided for appeal procedures concerning the decisions andWT/ACC/SPEC/ARM/1/Rev.6
Page 40
actions of Customs authorities  bodies as regards the customs valuation of goods .  Paragraph 4 of
Article 12 of the Law on the Customs Duties included provisions regarding the circumstancesspecified in Article 5.2 of the Valuation Agreement.  The relevant provisions were incorporated in
the Article 91 (Paragraph 4) of the new Republic of Armenia’s Customs Code.   The
representative of Armenia also added that the concept of “price paid or payable” was also
 covered by
Paragraph 1 of Article 7 of the Law on the  Customs Duties adopted in December 1998, as well as by
Article 81 of the Customs Code . The representative of Armenia informed that Armenia was a
member of the World Customs Organization .
61. 60.         The representative of Armenia said that in relation to Article 7 of the Customs
Valuation Agreement, paragraphs 27 and 28 of Decree No. 615 provided for the determination of
customs values when none of the other five methods available can be applied.  Paragraph 27 of
Decree No. 615 required that the customs authoritie s make available relevant information when the
value was determined by any method other than one of the five available.  In relation to the
prohibitions found in Article 7.2, paragraph 28 of Decree No. 615 stated that neither retail prices in
the domestic market, nor the prices of locally produced goods, nor export prices to third countries, nor
any other price determined at will or on an inexact basis, may be used for customs valuation purposes
when none of the five available valuation methods are applicable.  In response to concerns raised by
some members of the Working Party that Decree No. 615 was insufficiently precise, the
representative of Armenia stated that paragraph 28 of Decree No. 615 referring to the determination
of prices at will or on an inexact basis is intended to rule out the use of minimum customs values,
arbitrary or fictitious values, or computed values not using the provisions of the Agreement.  The
Government of Armenia recognized, however, that Decree No. 615 lacks specificity in certain key
areas, and was committed to remedying this situation.  In relation to further legislative approximation
to Article 7 of the Customs Valuation Agreement, the representative of Armenia said that the Law on
Customs Duties adopted by the National Assembly incorporated a separate Chapter on Customs
Valuation.  The representative of Armenia said that in relation to Article 7 of the Customs Valuation
Agreement, Article 12 of the Law on Customs Duties provided for the determination of customsvalues when none of the other five methods available can
 could  be applied.  Accordingly,  to
Paragraph 6 of Article 12 of the Law: stipulated the following:
"In cases when the customs value of goods imported into the Republic of Armenia
cannot be determined in accordance with paragraphs 1-5 of the present Article, then
the customs value should be determined by any other relevant method in accordancewith provisions of the present Article, and on the basis of relevant information
available in the Republic of Armenia. No customs value shall be determined on the
basis of :
(a) the selling prices of domestically produ ced products in the Republic of Armenia;WT/ACC/SPEC/ARM/1/Rev.6
Page 41
(b) any system which provides for the acceptance for customs purposes of the higher of
two alternative values
(c) selling price of goods on the domestic ma rket of the country of exportation;
(d) the cost of production other than comput edation values determined for the identical or
similar products, in accordance with the Paragraph  5 of the present Article;
(e) prices of goods designated fo r importation to other countries;
(f) minimal customs values;
(g) arbitrary prices."
The above list entirely conformed to Article 7 of the Customs Valuation Agreement.  Similar
provisions were provided for by Article 93 of the new Customs Code of the Republic of Armenia
adopted by National Assembly on 6 July 2000.
62. 61.         The representative of Armenia said that in relation to Article 8 of the Customs
Valuation Agreement, paragraph 12 of Decree No. 615 required that the transaction value applied for
customs duty purposes should include all the additional costs referred to in Article 8.2 of the WTO
Customs Valuation Agreement.   The representative of Armenia said added  that in relation to Article 8
of the Customs Valuation Agreement, Paragraph 2 of Article 7 of the Law on Custom Duties providedfor the following:
The C
customs value should includes :
(a) contract price  transaction value of goods acquired  purchased in the country of
exportation;
(b) freight expenses, including loading, unloadi ng, handling and insurance, incurred during
the shipment of goods to the custom s border of the Republic of Armenia;
(c) commission and mediation (broker commission)  brockerage expenses incurred in the
country of exportation or in connec tion with the shipment of goods up to the customs
border of the Republic of Armenia;
(d) value of the following goods or services, rendered to the supplier by the importer,
directly or indirectly, in full or partially , in connection with the manufacturing of the
imported goods;
(e) materials, components and ot her parts incorporated in the imported goods;
(f) tools and other similar items used in  the production of the imported goods;
(g) materials consumed in the production of the imported goods;
(h) engineering, development, design work and artwork, undertaken outside the Republic
of Armenia, and necessary for the production of the imported goods;
(i) royalties and license fees that the importer mu st pay, directly or indirectly, for selling
imported goods.
The same provisions were incorporated in Articl e 83 of the Customs Code, which stipulated that
the customs value should include:
a) the transaction value of the goods in the country of exportation;
b) transport, loading, unloading, transhipme nt, insurance and other related costs
made in connection of the goods’ carriage up to the customs border of the
Republic of Armenia;WT/ACC/SPEC/ARM/1/Rev.6
Page 42
c) commission and brokerage accrued in rela tion to the carriage of the goods up to
customs border of the Republic of Armenia, except buying commissions;
d) the costs of the following goods and servi ces where supplied directly or indirectly
by the buyer to the supplier free of charge or at reduced cost for use in connection
with the production and supply of the goods carried across the customs border of
the Republic of Armenia:
i) the value of materials, components , parts and similar items incorporated
in the goods;
ii) the value of tools and other similar items used in the production of the
goods;
iii) the value of materials consumed  in the production of the goods;
iv) the value of engineering, artwork, design work, and other similar work
necessary for the production of the goods;
e) royalties and licence fees related to th e sale of the goods being valued paid or
payable by the buyer, either directl y or indirectly, to the supplier;
f) the value of tare, packing and packaging;
g) the amounts payable to the supplier by the buyer for the further sale, use and
disposal of the goods carried across the customs border of the Republic of
Armenia.
In response to questions concerning the rate of  exchange rate applied by the Customs, the
representative of Armenia stated that the exchange rate used was derived from the daily foreign
exchange auctions held by the Central Bank of Armenia.  The Central Bank announced exchangerates daily and these rates are
 were published in the press, as required by Article 9.1 of the Customs
Valuation Agreement.  In response to questions concerning the mechanism for protection ofconfidential information, the representative of Armenia stated that the provisions concerningconfidentiality of information were incorporated in Article 95 (Paragraph 2) of the Draft
 new
Customs Code in conformity with provisions of  Article 10 of the Customs Valuation Agreement.
63. 62.        In response to requests for a detailed description of the process of review of the
decisions made on  customs valuation decisions of goods, the representative of Armenia said that in
relation to Article 11 of the Customs Valuation Agreement, paragraphs 2 and 3 of Article 13 of the
Law on Customs Duties provided for appeal procedures on the decisions and actions of the C customs
authorities  bodies .  The Article provided for appeal of a customs  decision by the customs body to a
higher customs authority  body  or to a court.  The higher customs authority  body  should make its
decision regarding the appeal and inform the applicant about the decision within one month.
Respectively, paragraphs 2 and 3 of Article 96 of the new Code provided for similar appeal
procedures on the decisions and actions of the customs bodies.
64. 63.        The representative of Armenia said that as required by Article 12 of the Customs
Valuation Agreement, relevant national laws, regulations, decisions and rulings were published in the
Bulletin of the Government of Armenia or in the Manual of the National Assembly of the Republic of
Armenia.  In relation to the obligation contained in Article 13 (last sentence) of the CustomsWT/ACC/SPEC/ARM/1/Rev.6
Page 43
Valuation Agreement, when the customs value of goods cannot be immediately determined,
paragraph 11 of Article 12 of the Law on Custom Duties provided for the following:  In case when  the
customs bodies deemed necessary a  to verif yication  or further scrutin izey of the customs value,
declared by the applicant in the corresponding  respective  declaration, importers were entitled to
remove their goods from the customs control against a bank guarantee valid for one month, in an  the
amount equal to the disputed value, on condition of subsequent clearance in accordance with the finaldecision.  The analogous provision was contained in Article 96 (Paragraph 1) of the new
Republic of Armenia’s Customs Code.  Paragraph 8 of Article 12 of the Law on customs duties
provided that an
 the importer upon a written request should be entitled, within five business  working
days upon a written request , to receive a written explanation of a valuation decision and a method used
by the customs authorities bodies .  The relevant provisions were incorporated in Article 95
(Paragraph 1) of the Republic of Armenia’s Customs Code.
65. 64.        The representative of Armenia stated that all the provisions of the WTO Agreement
on the Implementation of Article VII of GATT 1994 would be adopted as an integral part ofArmenia’s Customs Code upon Armenia’s accession to  the WTO. All relevant laws, and particularly,
the Customs Code of Armenia,  would be in full conformity with the requirements of the Agreement
on Implementation of Article VII of the GATT 1994 before 1 October 1999 . In particular, the
interpretative notes of the Agreement would be fully incorporated in Armenia’s customs valuationlaws.  Besides , and 
the Decision of 24 September 1984 on the Valuation of Carrier Media Bearing
Software for Data Processing Equipment would be was incorporated into the new Customs Code
(Article 85, Paragraph (d))  adopted to  ensur inge that valuation of the software was based on the
value of the media.   The Working Party took note of these commitments.
- Other customs formalities
- Rules of origin
66. 65.        The representative of Armenia stated that the rules of origin applied by Armenia
followed the principles stated in the Agreement on Rules of Origin. Origin rules were defined in terms
set forth the definitions  of the goods  wholly originating in one country  products , a change in the
tariff classification of the good s, sufficient  processing criteria, and the value-added criterion.  The
choice of approach  a method  for determining origin depended on the product  goods  concerned and
any relevant international agreement in respect of  which origin rules were being applied.  However,
with the exception of the goods  wholly originating in one country  products , the change in tariff
heading criterion (at 4-digit level in the HS classification) was used unless an alternative wasstipulated. According to the procedure of determin ation of the country of origin attached to theWT/ACC/SPEC/ARM/1/Rev.6
Page 44
Resolution of the  Government  Decree No. 615 of 6 December 1993 , the country of origin was
considered to be the country where the  entire product  goods hads  been manufactured or where it had
undergone sufficient processing. The following goods were considered to be wholly obtained in a
country:
- minerals mined in the territory of a country or inside its territorial waters;
- plant produce grown or harvested in the territory of a country;
- animals born or bred in the territory of a country;
- products received from the animals born or bred in the territory of a country;
- product of hunting, fishing or sea operations in the territory of a country;
- product of the high seas operations, that is produced in the high seas by vessels belonging to
the country or leased by it;
- secondary raw materials or the waste resulting from the production and other activities
carried out in the territory of a country;
- product of high technologies received in th e open space on spaceships belonging to the
country or leased by it;
- goods produced in the country in question, that have been exclusively produced in
accordance with the points above.
In case when two or more countries have participat ed in the production of a product, the origin of the
goods is was determined based on the criteria of sufficient processing. The following were the criteria
for the sufficient processing of goods:
- any alteration in the first four digits in th e position of the classification of a product (the
product description code) that has occurred as a result of processing the product;
- implementation of production or technological operations that were either sufficient or
insufficient to consider the product as orig inating from the country where such operations
have taken place;
- ad valorem rule - the alteration in the value of the product, when the proportion of the added
value or the value of the materials used exce eded a certain measure of the price of the
product
Moreover, the following were considered as not m eeting the requirement of the criteria on sufficient
processing:
- operations geared towards the preservation of the product during its storage or
transportation;
- operations of preparation of the goods for sale or transportation (taking apart, consolidation,
sorting, repackaging of the products);
- simple assembly operations;
- merging, smelting of the parts (components) of  products without lending them such features
as would essentially differ from the initial components.
The customs authorities were entitled to require orig in certificates in respect of: (i) goods subject to
quantitative limitation; the change in tariff;  (ii)  imports under preferential trading arrangements;
(iii) for the protection of the environment, public h ealth and safety and national security; and (iv) in
situations where the authorities consider that inade quate information as to origin has been supplied.WT/ACC/SPEC/ARM/1/Rev.6
Page 45
Certificates of origin must be signed by suppliers and verified by the relevant national certifying body.
The evaluation with respect to the origin of imported goods was carried out by the ArmExpertise
subsidiary of the Chamber of Co mmerce of Armenia. In case of doubt as to the origin of goods imported
into the Republic of Armenia the Customs referred to the ArmExpertise , which examined the product,
the waybills and the certificates of origin of the product and passes a decision on the origin of the
product. At the same time, according to Paragraph 2 of the directive No. 478MV of 26 April 1996 of the
head of the Customs Directorate of  the Republic of Armenia, in case of absence of the above mentioned
certificate, the certificates issued by SARM or by the ArmExpertise  subsidiary of the Chamber of
Commerce of Armenia were accepted as documents conf irming the origin of the product. In accordance
with the legislation of the Republic of Armenia curre ntly in effect, importers had the right to appeal
disputable issues to a superior customs authority . The administrative and judicial obligations with
respect to this procedure applied to all entities.
67. 66.        The representative of Armenia added that at present  the Draft  Republic of
Armenia’s  new Customs Code of Armenia was elaborated,  incorporated relevant provisions
regulating the field of  which incorporated relevant provisions on  Rrules of O origin.  The Customs
Code was drafted  in full conformity with relevant WTO provisions.  In particular the precise
definitions for  of goods that were to be considered as being wholly obtained from the  in one
country’s natural recourses , criteria of sufficient processing in terms of change of tariff
classification changes, value added principle, and sufficient processing principle were given  and the
value added percentage criterion; and  minimal operations or processes that did not by
themselves confer origin to goods  were given.  According to Article 160 of the Republic of
Armenia’s Customs Code the following goods shou ld be deemed as wholly obtained in one
country:
a) live animals born and raised in that country;
b) animals obtained by hunting, trapping, fishing in the territorial and internal
waters of that country or by performing other similar activities;
c) produce obtained from live animals in that country;
d) plants and plant products harvested, picked or gathered in that country;
e) minerals and other naturally occurring substances not included in items (a)-(d),
which are obtained from the territory, entrails or territorial and internal watersof that country;
f) waste and recoverable resources derived from manufacturing and processing
operations or from consumption in that country and fit only for disposal or as
raw material;
g) products obtained by fishing in neutral waters by vessels lawfully flying the flag
of that country;
h) produce made from the products referred to in (g) on board of the country's
factory ship;
i) products obtained on board of a spaceship owned or rented by that country
pending the flight;WT/ACC/SPEC/ARM/1/Rev.6
Page 46
j) goods obtained or produced in that count ry solely from products referred to in
items (a)-(i).
According to Article 161 of the new Customs Code , in case,  where more than one country were
concerned in the production of the good the count ry of origin of a good should be the country
where the good has undergone the last sufficient processing. As criteria of sufficient processingshould be deemed:
a) the processing operations, wherein they le ad to a change in any of the four digits
in the classification of goods;
b) the processing operations, wherein the value of the incorporated in the given
good materials, which originate in the given country and the value-added in
percents add up at least 30 per cent of the ex-works price of the manufacturedgoods, whereas indirect taxes, commissions,  transport, insurance, security and
other similar costs are disregarded in the ex-works price.
Further, Paragraph 3 of Article 162 of the Customs Code stipulated the definition of the
country of origin for goods, which were classified as sets (goods in sets) or were viewed as such,
as a country where the set had been assembled or  put together, if the overall value of the non-
originating parts of the set did not exceed 45 p er cent of the value of the set.  According to
Article 163 of the Republic of Armenia’s Customs Code, the following should not be deemed as
criteria of sufficient processing:
a) changes made exclusively in the me aning of the goods,  for instance the
modification of a minibus into a lorry and the like;
b) mere packaging, in any form, includi ng bottling, wrapping and the like;
c) classification of incomplete goods under finished goods, or the classification of
finished, but not assembled products under assembled products pursuant to the
rules of the Harmonized System;
d) simple assembling operations, particularly, mere plugging together of units to
form a good classifiable in another head ing, such as the joining of a monitor,
CPU, keyboard and mouse to the end of making a computer and the like;
e) the mere addition of preservatives;
f) obtaining of goods classifiable under meat and meat offal, from the goods
classifiable live animals;
g) preparatory works for the sale or transp ortation of the goods (making into lots,
sorting, wrapping and the like),
h) necessary operations for the protection , transportation and storage of the
products;
i) affixing of marks, labels or other distinguishing signs of the like on products or
their packaging;
j) obtaining of products through mixi ng of goods (components), whereas the
characteristics of these products little vary from the initial characteristics of the
components;
k) combination of two or more actions referred to in subparagraphs (a) to (j)
above.
Article 162 of the Customs Code set forth the se quence of application of the rules of origin.
Rules of origin, which were presented in the Draft
 Customs Code as well as in the Draft Decree of theWT/ACC/SPEC/ARM/1/Rev.6
Page 47
Government of Armenia on Determination of the Origin of Goods,  did not pursue, directly or
indirectly, any trade objectives, were described in positive standards and did not create obstacles forfree trade, in accordance with WTO provisions.  The representative of Armenia added that theprovisions of the new Customs Code on rules of origin were applied to CIS imports as well as toimports of other countries and that certificates of origin were accepted for imports from CIS countriesas well as from non-CIS countries.  According to Article 168 of the new Customs Code t he absence
of the
 a certificate of origin by itself could not be the only reason to deny the entry of the goods into
the territory of the Republic of Armenia.  The provisions of Article 167 (Paragraph 2) of the Draft
Customs Code on rules of origin  comply with the requirements of Article 2(h) and Annex II,
paragraph 3(d) of the WTO Agreement on Rules of Origin.  Article 169 contained provisions on
appeal against actions, inactivity and decisions of the State bodies and the officials thereof in
relation to the determination and confirmation of the country of origin, provided that thedeclarant might apply to the Superior Bodies or to  court, if it did not agree with the method of
determination or confirmation of the country of  origin of the goods by the competent bodies of
the Republic of Armenia.  The Superior Body should be liable to consider the request within one
month and notify the applicant .
68. The representative of Armenia confirmed that from the date of accession its laws and
regulations on rules of origin would be in conf ormity with provisions of the Agreement on Rules
of Origin and other WTO provisions.  Concerning the requirements of Article 2(h) and AnnexII, paragraph 3(d), i.e., that for non-preferential  and preferential rules of origin, respectively,
the relevant Armenian authorities would provide, upon request, an assessment of the origin ofthe import and outline the terms under which it would be provided.  The Working Party tooknote of this commitment.
- Pre-shipment inspection
69. 67.        
In response to questions, the representative of Armenia stated that Armenia did not at
present employ the services of any pre-shipment inspection companies.  However, the Government of
Armenia had recently announced an international tender to submit competitive bids for selecting acompany in charge of implementing pre-shipment inspection to imports from all directions.
70. 68.        
The representative of Armenia stated that any pre-shipment inspection system
introduced in the future it  would be applied in conformity with the requirements of the Agreement on
Pre-shipment Inspection and that Armenia would ta ke into account the recent WTO review of this
Agreement.  The representative of Armenia stated that any pre-shipment inspection system would beWT/ACC/SPEC/ARM/1/Rev.6
Page 48
temporary until such time as the Armenian customs authorities  bodies would be able to carry out
these functions properly. The Working Party took note of this commitment.
- Anti-dumping, countervailing and safeguards regimes
71. 69.        In response to questions, the representative of Armenia stated that Armenia did not, at
present, have an anti-dumping, countervailing or safeguards regime. The representative of Armenia
confirmed that, from the date of accession, Armenia would not apply measures for safeguard,anti-dumping or countervailing duty purposes if conforming legislation to apply such measures
consistent with the provisions of the WTO Agreement on the Implementation of Article VI, on
Safeguards, and on Subsidies and Countervailing Measures was not in effect in Armenia. The
representative of Armenia stated that Armenia drafted the Law on Anti-dumping and
Countervailing Measures and the Law on Safeguards Measures in In
 the elaboration of any
legislation concerning such anti-dumping, count ervailing and safeguard measures, Armenia would
ensure their  full conformity with the relevant WTO provisions, including Articles VI and XIX of the
GATT 1994 and the Agreements on the Implementation of Article VI, the Agreement on Subsidiesand Countervailing Measures and the Agreement on Safeguards.  After such legislation wasimplemented, Armenia would apply any anti-dumping duties, countervailing duties and safeguard
measures in full conformity with the relevant WTO provisions.  The Working Party took note of this
commitment.
- Export regulations
- Export restrictions and export licensing system
72. 70.        
The representative of Armenia stated that the Resolution No. 124, 29 December 1995
on Non-Tariff Regulation of the Commodities (Ope rations, Services) Import and Export in the
Republic of Armenia regulated Armenia’s non-tariff measures on export licensing regime . Export
licences were required for textiles (to the European Communities only), for medicines, and for certain
live animals and plants . The export licences on textiles were required pursuant to an agreement with
the European Communities, but no restrictions on these exports were currently in place. For
medicines, and for certain live animals and plants, permission of the relevant authorities were
required.  The licences  permission for medicines, live anions  animals and planets  plants were
generally not restrictive - rather, they were designed to ensure public health and safety. Theexportation and importation of weapons, military technique and the consumables necessary for itsproduction, technologies equipment and locators of nuclear materials (including heating materials),special non-nuclear materials and services related to it, ionizing radiation sources were carried outthrough authorization issued by the Government of  the Republic of Armenia. All other products mayWT/ACC/SPEC/ARM/1/Rev.6
Page 49
be freely exported from Armenia.  The system applied to exports to all destinations, except in the case
of the licensing requirement for exports of textiles and clothing to the European Union.  The licensing
permission requirements were not intended to restrict the quantity or value of exports.  Rather, they
were intended to protect the national interest and human, animal or plant life or health, and theenvironment.  The representative of Armenia stated that the Government did not consider that at thistime, a better way existed of achieving these objectives.
73. 71.        
The representative of Armenia noted  that Armenia’s export licensing  non-tariff
regulation system on export closely paralleled the import licensing system  that, applied to import .
As on the import side, exportation of pharmaceuticals and rare animals and plants were subject tonon-restrictive licensing
 regulation , designed to protect health and the environment. Export licensing
permission procedures for pharmaceutical products were the same as import licensing  permission
procedures, and were regulated by the same Resolutions. Permissions are required for exports of
rare objects or artifacts considered part of the national patrimony.  In addition, exports of textiles
and clothing to the European Communities were subject to licensing under a bilateral agreement withthe European Communities, and licences are also required for exports of rare objects or artifacts
considered part of the national patrimony . The licensing of textile and clothing exports to the European
Communities allowed these items to be monitored, but they are not currently subject to restrictions of
any kind.
74. 72.        The representative of Armenia said that Armenia maintained export licensing
requirements on the following items:
HS number
Pharmaceutical products 05.10; 12.11; 13.02; 29.38; 29.41;
Raw materials for pharmaceutical production 30.00
Textiles and clothing to European Union
Objects considered part of the national patrimony
Rare wild animals and plants included in the Red
Book of the Republic of Armenia
HS number
Objects considered part of national patrimony
Pharmaceutical products, medi cines 051000; 1211; 2941; 3001; 3002; 3003;
3004; 3005; 300630 000; 300650 000;
300660; 380840;
1108*; 1301; 1302; 1504; 152000 000;1702; 1804; 1805; 2207; 2209; 2501; 2520;
2712; 2801-2802; 280440 000; 281000 000;
284700 000; 285100;  2904-2909; 2912-
2940; 2942; 3301.WT/ACC/SPEC/ARM/1/Rev.6
Page 50
HS number
Objects considered part of national patrimony
Rare wild animals and plants included in the Red
Book of the Republic of Armenia
* 1108 and the following categories of products in the list used for pharmaceutical purposes, are subject
to import and/or export permission.
The Red Book of the Republic of Armenia identifie s approximately one hundred rare animals and birds,
and 390 rare plants in respect of which licences  permissions would be required and whose exportation
may be controlled.
75. 73.        The representative of Armenia stated that according to the Resolution No. 124  581,
the exportation of pharmaceutical products and medicine had to be authorized  permitted by the
Ministry of Health of the Republic of Armenia.  According to Resolution No. 124, the exportation of
rare wild animals and plants included in the Red Book of the Republic of Armenia was carried outthrough authorization
 permission issued by the Ministry of Nature and Environment. Exports of
objects considered of interest to the national patrimony must be authorized  permitted by the Ministry
of Culture. In the case of textile and clothing exports to the European Communities  European
Communities, the Ministry of Industry and Trade would have exclusive responsibility for issuingexport licences. Requests for authorization could be refused and issued authorizations could be
suspended  The importation or exportation of pharmaceuticals and/or medicines could be refused
if (a) there was incorrect and/or insufficient information in the presented documents, (b) the period
of validity of the pharmaceutical products was exceeded, (c) the actual pharmaceuticals and (or)
medicines production serial numbers of imported pharmaceuticals  did not correspond with the
submitted quality certificates  to the specifications stated in the importation documents , (d) the
imported pharmaceuticals were not registered in Armenia , (e) the quality of imported
pharmaceutical products did not correspond to quality standards accepted in the Republic of
Armenia.  Unjustified delays and refusal to i ssue permission could give rise to judicial
procedures .  The Ministry of Industry and Trade may deny an export licence to an applicant in
respect of exports to the European Communities if exports of the items concerned were to exceed acertain quantitative limitation. Since this has not occurred so far, Armenia has not developed any
mechanisms for administering export quotas.
76. 74.        
The representative of Armenia said that any persons, firms and institutions wishing to
apply for an export licence may do so provided they are registered as a juridical person or a soleentrepreneur undertaking a business activity in Armenia. As in the case of the importation ofpharmaceutical products, to receive an authorization
 permission for exportation of pharmaceutical
products the following documents were required: an application form, a certificate relating to theacquisition of the pharmaceutical products, a licence to trade in pharmaceutical products in Armenia,WT/ACC/SPEC/ARM/1/Rev.6
Page 51
documents relating to the acquisition and sale of pharmaceutical products (contract, invoice, etc.), and
a certificate of quality issued by the producer. Authorizations  Permissions are issued within 15  ten
days from the date of the application. Since the fifteen-day stipulation is a maximum period, inpractice licences
 permission may be obtained within a shorter period. An export licence  permission
will generally not be granted immediately upon request, but in practice the necessary procedures maybe completed within a day or two. The fee for an export licence
 permission is equal to the month’s
minimum salary in the Republic of Armenia. Licences  Permissions are not transferable among
exporters.  A licence  permission application and/or an exportation could be made at any time during
the year. Authorizations  Permissions are issued for the period of three months.  necessary to carry
out the engagements, but no longer than one year. The validity of an authorization can be extended
upon the substantiated request of an applicant.  The body issuing the authorization can suspend its
validity or cancel it. Unjustified delays and refusal to issue authorization, as well suspending and
cancelling  certificates, can give rise to judicial procedures.   The refusal for exportation can give
rise to juridical procedures.
77. 75.        The representative of Armenia stated that any export licensing requirements or other
export restrictions would applied be in conform ity with WTO requirements. The Working Party took
note of this commitment.
- Other measures
78. 76.        The representative of Armenia noted that in order to prevent exports at artificially low
prices, or the under-invoicing of exports, the Resolution 124 established a list of minimum prices eachquarter for a list of selected commodities as a reference base for tax purposes. The reference priceswere equally applied to all export destinations.  With effect from 29 December 1995, this list onlycovered ferrous and non-ferrous metals, (HS 72.00, 72.04, 74.0-74.14. 75. 76.0-76.14, 78.80, 81.0,81.13).  According to Resolution 124 commodities of the mentioned list could be exported at prices less
than the minimum established prices. However, the corporate tax liabilities of firms that export ferrous
and non-ferrous metals and scrap were calculated on the basis of these reference prices if the declared
export price is below the reference amount. In this case the exporter was required also to present thecertificate of conformity of the Agency of Standa rdization Measurement and Certification (SARM). The
Customs Bodies of the Republic of  Armenia must inform the Tax Inspectorate about the transaction
within a month.  With effect from 21 April 1999, the list of minimum reference prices was eliminated.
- Export subsidies
79. 77.        
The representative of Armenia stated that Armenia did not offer any export incentives
or export subsidies of any kind at the present time, nor did Armenia have any duty drawback orWT/ACC/SPEC/ARM/1/Rev.6
Page 52
temporary admission arrangements in respect of dutiable imports used in export production .  The
Government believed that export expansion was vital to Armenia’s future economic viability.  For thisreason, consideration was being given to various ways of stimulating exports, particularly throughpromotional activities.  The Government did not, however, intend to rely on export subsidies as partof an export expansion programme.
80. 78.        
The representative of Armenia confirmed that the Government did not maintain
subsidies which met the definition of a prohibited subsidy, within the meaning of Article 3 of the
Agreement on Subsidies and Countervailing Measures, and did not seek transitions to provide for the
progressive elimination of such measures within a fi xed period of time. He further stated that Armenia
would apply export promotion measures in confor mity with WTO requirements.  The Working Party
took note of this commitment.
- Internal policies affecting trade in goods
- Industrial policy, including subsidies
81. 79.        The representative of Armenia stated that Armenia’s industrial policy aimed to ensure
more efficient use of domestic resources within a market-oriented framework.  A central policyobjective affecting industry was privatization.  Approximately 30 per cent of all enterprises in
Armenia are publicly owned, while 70 per cent are non-public.  Approximately 70 per cent of
formerly public-owned enterprises in Armenia were privatized and 30 per cent remained under
State control.  He stated that the Government estimated th at approximately 95 per cent of industrial
output  emanated from the public sector.   The representative of Armenia added that as a result of
ongoing privatization, as well as due to registration of newly established private enterprises, the shareof publicly owned enterprises in Armenia gradually declined to 8 per cent of the total by the end of
1997, and to further 7 per cent by the end of 1998.  Correspondingly, the public sector accounted for57 per cent of industrial output by the end of 1997, which declined further to 52 per cent of industrialoutput in the end of 1998.  In response to questions the representative of Armenia stated that pending
completion of the privatization programme, the Government required State-owned enterprises to
operate according to market principles.  Enterprises in Armenia were required to acquire their inputson the open market.  Most firms had not yet put proper market-economy accounting systems into use,but they were developing them.  In response to requests for information concerning the payment ofdirect subsidies, the representative of Armenia stated that since the beginning of 1995, almost no
direct subsidies had been granted to industry.  In previous years direct subsidies had been provided on
a fairly large scale via concessionary credits to firms.  He further noted that the Government inWT/ACC/SPEC/ARM/1/Rev.6
Page 53
general did not retain production subsidies in the industrial sector, and no indirect subsidies were
applied on water and electricity supplies in the agricultural after 1996 .
82. 80.        The representative of Armenia said that the only beneficiaries of direct subsidies in
1995 were the firms engaged in the production of strategic (military) equipment, for whom subsidiesare to be granted for further construction and the equipping of plant.  The beneficiary firms do notexport their products.  Any remaining indirect subsidies that might arise as a result of clearingarrangements were disappearing because of the contraction (and eventual elimination) of inter-
governmental clearing contracts.   The procurement via State orders, which could also entail indirect
subsidies, was being replaced by competitive tendering procedures, however, the Governmentmaintained the freedom to grant certain privileges to domestic bidders.  In 1998 the Governmentrecommenced the practice of write-offs of tax fine arrears in order to support the rehabilitation andrestructuring of a few selected large enterprises, such as Armenmotor Company and YerevanJewellery Plant.  For analogous purposes, tax fine arrears were written off for those enterprises whichincurred indebtedness because of default against shipments being made within the framework of inter-governmental clearing contracts and procurements via State orders.
83. 81.        
The representative of Armenia further added that because the continuing reform of
policies might indirectly confer subsidies on industries, the Government also maintained a
substantially deregulated business environment which, when combined with the Government's openinvestment policies, meant that there were effectively no barriers to market contestability.  Firms werefree to enter and exit sectors on the basis of thei r own market-based decisions.  Additional measures
designed to safeguard and strengthen this business environment were the establishment of anti-monopoly and bankruptcy laws. The Law on the Bank ruptcy of Banks and the Law on the Bankruptcy
of Juridical Persons, of Enterprises Without the Status of a Juridical Person, and of Entrepreneursentered into force respectively on 1 October 1996 and on 1 March 1997. The relevant statutes were
under preparation.
84. 82.        The representative of Armenia stated that  the Government of Armenia would ensure
that its subsidy regime was in full conformity with the Agreement on Subsidies and CountervailingMeasures from the date of its accession to the WTO.  The Working Party took note of thiscommitment.
- Technical Barriers to Trade
85. 83.        
The representative of Armenia noted that, after the declaration of independence,
Armenia took steps to establish and develop its national systems of standardization, metrology andcertification. Relevant laws regulating those systems are
 were the Law on Standardization andWT/ACC/SPEC/ARM/1/Rev.6
Page 54
Certification and the Law on Uniformity of Measurements accepted by the National Assembly on 30
April 1997. The two laws incorporated the core principles of the WTO TBT Agreement. The Law onStandardization and Certification provided the legal basis in the Republic of Armenia for thestandardization as well as certification of products, services, labour (processes) and quality systems.This would be mandatory for
 was applicable to the bodies of State governance, as well as for
enterprises, institutions and private entrepreneurs and would  define the means for the protection of
interests of consumers and the State through the elaboration and application of normative documents
on standardization. It also defined the rights, obligations and responsibility of the participants in the
certification process. The Law on Uniformity of Measurements defined the legal basis for ensuringthe uniformity of measurements, regulated the relations of the bodies of State governance withenterprises, institutions and private entrepreneurs on issues relating to the production and issuance of
measurement instruments, and the use and repairs thereof. It was directed at protecting the rights andrightful interests of consumers and the State from the negative impact of inaccurate results ofmeasurements. The Department for Standardization, Metrology and Certification (SARM) wasdenoted as coordinator of standardization, metrological and certification activities in Armenia, and itsrights and obligations were defined by the Law on Standardization and Certification and the Law on
Uniformity of Measurements. Being the national body in charge of the administration related to
standardization, certification and metrology in Armenia its responsibilities included the creation andadministration of national standardization and certific ation systems; the adoption of national standards
and classifications; the application of international standards; the publication of official information inthe fields of standardization and certification; accreditation of certification bodies and testinglaboratories; dealing with appeals and disputes on certification matters, etc.  SARM was presided overby the State Chief Inspector, whose rights and obligat ions were contained in Article 27 of the Law on
Standardization and Certification and Article 24 of the Law on Uniformity of Measurements. SARM
is a collegial body that takes decisions by majority vote.  In order to further strengthen the
compliance of Armenia’s legislation with the principles of the WTO Agreement on Technical
Barriers to Trade two new laws were adopted by the National Assembly on 9 December 1999:the Law on Standardization and the Law on Conformity Assessment of Products and Servicesto the Normative Requirements (hereinafter Law on Conformity Assessment). GovernmentalDecree No 9 of 11 January 2000 on Preparation, Adoption and Application of TechnicalRegulations was also adopted. Definitions of st andards and technical regulations in these acts
were in full compliance with the respective definitions in Annex 1 to the TBT Agreement.
Relevant Ministries should be responsible for th e preparation of technical regulations according
to the Law on Standardization. Technical regulations shall be enacted at least two months after
their promulgation and notified to the relevant international organizations and national bodies.
Non-discrimination principle as it concerns the treatment of domestic and foreign products andWT/ACC/SPEC/ARM/1/Rev.6
Page 55
services, as well as the principle of equivalency of the other countries regulations are foreseen
by Decree No. 9, of 11 January 2000. International and regional standards, directives andguidelines should be taken into account while elaborating national standards and regulations.The Law on Conformity Assessment regulated the activities for voluntary and compulsoryconformity assessment of production, goods, labours and services to normative requirements,established legal bases for State activity in this  field, as well as determined the modules for
conformity assessment, conditions of product marketing, the rights and obligations of parties to
conformity assessment.  The three Laws currentl y in force (the Law on Standardization, the
Law on Conformity Assessment, the Law on the Uniformity of Measurements) served as thelegal basis for development of QSMCA (Quality Standardization, Metrology and ConformityAssessment) policy, pursued by SARM.
The main principles of this policy were:
- harmonization of the legislation in the field of the standardization, metrology
and conformity assessment,
- ensuring the safety of products, processes and services through State regulating
mechanism (technical regulations),
- harmonization of national standards wi th the international, regional and
interstate ones,
- direct implementation of ISO/IEC and European (EN) standards in the field of
conformity assessment,
- widening the scope of cooperation with international organizations,
- improvement of relevant accreditation systems to comply with international
rules and procedures,
- providing uniformity of measurement through State regulation mechanism,
- assisting the removal of unnecessary barriers to trade,
- ensuring the protection of consumers rights.
SARM is cooperating with the Ministries of Health and Agriculture in matters relating to
sanitary and phytosanitary measures.
86. 84.        
The representative of Armenia added that the National Standardization System was
established with a mission to provide:
- the safety of the products, labour (processes)  and services for the natural environment,
human life, health and property;
- the technical and informative compatibility and inter exchangeability of products;
- the improvement in quality of the products, labour standards  and services ;
- uniformity of measurements;
- preserving of all types  preservation of resources;
- the security of economic objects, in the event of occurrence of technical and other disasters
and emergencies;
- removal of technical barriers to trade;
- the essential conditions for the state of defence and mobilization readiness.WT/ACC/SPEC/ARM/1/Rev.6
Page 56
- the necessary conditions to ensure the defense of the country and the readiness for
mobilization.
The National Standards Institute (CJSC) was established under the SARM to perform
standardization activities.  The main provisions of that system  and its procedures for preparation,
adoption and application of  Armenian standards were established by national basic standards of AST 1
series.  About 210  270 Armenian standards had been devel oped by the technical committees and
adopted by SARM since 1993.  The great part of the standards applied in Armenia were international
and regional standards. More than 18,000 interstate standards of CIS countries were  are included in the
national fund of standards.   Fifty per cent of national standards would be aligned to international
standards by 2002.  860 international standards have been accepted in Armenia at present and 30 per
cent of national standards would be aligned to in ternational standards by 2000. The representative of
Armenia informed that the new Draft Law on St andardization and Draft governmental Decree on
Technical Regulations were elaborated in conf ormity with provisions of the TBT Agreement.
Definitions of standards and technical regulations in  these acts were in full compliance with respective
definitions in Annex 1 of the TBT Agreement.
The following were priorities in the field of standardization activities:
- establishment of quality and environment management systems’ normative base
in compliance with in ternational standards,
- development of standards in the fields of military industry,
- standardization in the field of saving of resources in fuel power engineering
system,
- standardization of information techno logies complied with international
standards,
- improvement of national metering standards base
- personnel training and qualification improvement.
In the field of conformity assessment:
- quality system introduction accordin g to the requirements of ISO 9000 series
standards,
- environmental management system introd uction according to the requirements
of ISO 14000 series standards,
- reduction of the list of products subject to mandatory conformity assessment,
- development of the process of conformity assessment results mutual and partial
recognition,
- harmonization of conformity assessment rules and regulations with the
international requirements,
- cooperation with internationally recogniz ed organizations and companies in the
field of conformity assessment,
- improvement of accreditations system according to the international
requirements,
- development of certification bodies and test laboratories systemized
privatization procedures.WT/ACC/SPEC/ARM/1/Rev.6
Page 57
For the preparation, adoption and application of standards, SARM  followed the TBT Code of Good
Practice and will sign it from the date of Armenia’s accession to WTO. SARM was cooperating withstandards organizations in other countries and is  a member of the International Organization for
Standardization from 1 January 1997. Presently SA RM is member of ISO, EASC, which enables
Armenia to participate through technical committees in the elaboration of international and regional
standards and to apply these standards in Armenia.  The only enquiry point operating in Armenia and the
only body responsible for notifications was SARM, wh ich would implement the obligations established
in accordance with Articled 10 of the TBT Agreemen t. Besides the publicati on of a monthly journal
(Hayast), which provides current information on issu es relating to standards and certifications. SARM
used the INTERNET communication system for notif ication. A new resolution of the Government was
being prepared for the clarification of rights and re sponsibilities of SARM as an enquiry point, and those
of the WTO Affairs Department in the Minist ry of Industry and Trade as a notification.
85.         In response to questions concerning to mandatory certification, the representative of Armenia
stated that Armenia applied manufacturer’s decl aration supported by post-market surveillance
procedures, as well as internationally accepted pre-market conformity assessment such as product
type and sample testing, which concerned to the products subject to mandatory certification. Both
certification mechanisms were fixed in the Law on Standardization and Certification. Such less
expensive and less trade restrictive methods of conformity assessment, as manufacturer's declaration
and conformity mark, are also being foreseen in the Draft Law on the "Conformity Assessment of
Products and Services".  According to the Draft Law, a certificate on conformity and a registered
declaration on conformity had the same legal power, and domestic and foreign manufacturers and
service providers were granted similar rights in applying declarations on conformity of products or
services.  Mandatory certification activities were coordinated by SARM and conducted by
certification bodies and testing laboratories accredited by it according to the Law on Standardization
and Certification and regulated by Resolutions 417, 205, 136, which proceeded from the law and
introduced the list of products subject to mandatory certification in the Republic of Armenia taking
into consideration the necessity of the control over the safety of products, labour, services for the
natural environment, the human life, health and property, as well as the protection of consumers’
rights. Presently this is the full list of products subject to pre-market certification. These products
were selected taking into consideration the reports received from the inspection bodies, the list of
toxins received from the Ministry of Agriculture, Sanitary-Anti-epidemiological State Centre, from
media, consumers and data from Statistics Department. The drafts of these Resolutions were
submitted for discussion and comments to the relevant ministries, major enterprises and traders, other
institutions that displayed an interest in it. The following products were subject to mandatory
certification according to Resolution No. 15, 16 January 1998:WT/ACC/SPEC/ARM/1/Rev.6
Page 58
Description CN code
Meat and edible meat offal 0201-0204, 0206- 0210
Fish and crustaceans, molluscs and other aquatic
invertebrates0302-0307
Milk and cream 0401-0406
Birds’ eggs 0407, 0408
Natural honey 0409
Edible vegetables and certain roots and tubers 0702-0704, 0706 10 000, 0707,
0709-0712,
0713 10 900
Edible fruit and nuts; peel of citrus or melons 0801-0812, 0813 10 000-0813 40
300
Coffee, tea 0901, 0902
Rice 1006
Wheat and production of wheat and other cereals 1101-1104, 1108
Animal or vegetable fats and oils and their cleavage
products; prepared edible fats; animal or vegetable waxes1501, 1502, 1507 10 900,1509-
1512, 1515 19 900,1516, 1517
Preparations of meat, of fish or of crustaceans, molluscs or
other aquatic invertebrates1601-1605
Sugar and sugar confectionery, gums 1701-1704
Cocoa and preparations containing cocoa 1801, 1804-1806
Preparations of cereals, flour, starch or milk; pastry
products1901, 1902, 1905
Preparations of vegetables, fruit, nuts or other parts of plants 2001-2009
Miscellaneous edible preparations, yeast, ice-cream 2101-2105, 2106 90 100
Beverages, spirits and vinegar 2201-2209
Tobacco and manufactured tobacco substitutes 2401-2403
Table salt 2501 00 910
Oil products 2707, 2710, 2711
Vitamins 2936
Pharmaceutical products 3001-3006
Fertilizers 3101-3105
Perfumes, beauty or make-up preparations, preparations for
use on the hair, dental pastes and powders3303, 3304, 3305, 3306
Soap, organic surface-active agents 3401, 3402
Matches 3605
Insecticides, hydraulic brake fluids, anti-freezing
preparations and prepared de-icing fluids3808, 3819, 3820
Articles of plastics 3923, 3924
Pneumatic tires of rubber of a kind used on motor cars and
lorries4011 (ex. 4011 30 100), 4013
Babies dummies of rubber 4014 90 100
Articles of apparel and clothing accessories, knitted or
crocheted, including briefs and panties, babies’ sportswear,
swimwear, stockings, socks, gloves6107-6109, 6111, 6112, 6115,
6116
Boys’ or girls’ underpants, sportswear, ski suits, swimwear,
other garments6207, 6211
Babies’ bed linen 6302
Cooking or heating apparatus of a kind used for domestic
purposes, non-electric7417WT/ACC/SPEC/ARM/1/Rev.6
Page 59
Description CN code
Table, kitchen or other household articles and parts thereof,
of aluminum; sanitary ware and parts thereof, of aluminum7615
Spoons, forks, knives and similar kitchen or tableware 8215
Electro-mechanical tools for working in the hand, with self-
contained electric motor; electro-mechanical domestic
appliances, with self-contained electric motor; electric space
heating apparatus; electric filament or discharge lamps8508, 8509, 8516, 8536, 8539 (ex.
8508 10, 8508 80, 8508 90. 8509
90, 8516 80, 8516 90, 8536 10,
8536 20, 8536 30, 8536 41, 8536
90, 8539 10, 8539 40, 8539 90)
Instruments and appliances used in medical, surgical, dental
or veterinary sciences9018
Gas arms (for example, spring, air or gas guns and pistols,
truncheons); gas revolvers9304
Electric chandeliers 9405 (ex. 9405 10, 9405 50, 9405
60, 9405 91, 9405 92, 9405 99)
Toys 9502, 9503
Cigarette lighters, gas fuelled 9613
Requirements for products covered by mandatory cer tification in Armenia were kept to a minimum.
They were established in accordance with the technical regulations, adopted by SARM in coordination
with the interested ministries and departments,  according to Resolution No.15 of the Government.
Compulsory were only the requirements concerning  to safety, health and the protection of the
environment. Mandatory certification procedures applied were the same for both imported and domestic
products. Certificates were issued for product types or batches based on testing of samples, analysis of
production system, quality system cer tification or declaration of supplier depending on the scheme of
certification.   These internationally accepted certification schemes were fixed by AST 5.3.  The
procedures of mandatory certification were esta blished with reference to the AST 5.1 standards,
application of which became mandatory, according to the Resolution No. 15 of the Government.  Unlike
to most of CIS countries, certification activities in Armenia due to the Law on Standardization and
Certification were regulated by the only authorized body - SARM, so  avoiding overlap of requirements
set by different regulatory bodies. Procedures on recognition of certificates issued by foreign
certification bodies were specified in AST 5.8 standa rd.  SARM had signed cooperation agreements on
mutual recognition of conformity assessment with  appropriate bodies of several countries such as
Russian Federation, Ukraine, Belarus, Georgia, Tu rkmenistan, Kazakstan, Moldova, Kyrgyz Republic,
Tadjikistan, Uzbekistan, Slovak Republic, China and Iran.  These were Agreements on Mutual
Recognition of Conformity Assessment Results.  SA RM was carrying out negotiations with appropriate
bodies of other countries, particularly with Bulgaria ,  India, Romania and the United States, to sign
similar agreements on cooperation.  In response to questions regarding compliance with provisions of
Article 6.1 of the TBT Agreement the representative of Armenia stated that in the absence of agreements
on mutual recognition, AST 5.8 standards allow for si mplified procedures on acceptance of certificatesWT/ACC/SPEC/ARM/1/Rev.6
Page 60
and conformity marks issued by certification bodies of other countries if Armenian authorities were
satisfied that conformity assessment procedures in those countries offered adequate assurance of
conformity.
87. In response to questions concerning to mandatory certification the representative of
Armenia stated that the Law On Conformity Assessment of products and services to theNormative Requirements provided the legal basis for the conformity assessment of products,services, labour (processes) and quality systems. It defined the rights, obligations and
responsibility of the participants in the co nformity assessment process. The conformity
assessment mechanisms were fixed in this law. Such less expensive and less trade restrictivemethods of conformity assessment, as manufacturer’s declaration and conformity marks, arealso included in the law.  According to this La w, a certificate on conformity and a registered
declaration on conformity have the same legal power, and domestic and foreign manufacturersand service providers were granted similar rights in applying declarations on conformity ofproducts or services. Mandatory certificatio n activities are coordinated by SARM and
conducted by the accredited certification bodies and testing laboratories.  Taking intoconsideration the necessity of the control over th e safety of products, labour, services for the
national environment, the human life and health , as well as the protection of consumer rights
some products are subject to mandatory conformity assessment according to ResolutionNo. 239, 12 May 2000. These products were selected  taking into consideration the reports
received from the inspection bodies, the Ministry  of Agriculture, Sanitary-Anti-epidemiological
State Center, consumers, based also on data of research institutes and laboratories.Requirements for products covered by mandatory conformity assessment in Armenia are keptto the minimum. Mandatory certification proc edures are the same for both imported and
domestic products. Certificates are issued fo r product types based on testing of samples,
analysis of production system, quality system certification or declaration of supplier depending
on the scheme of certification. These internationally accepted certification schemes were fixed
by AST 5.3. Procedures on recognition of certificates issued by foreign certification bodies areregulated by the Resolution No. 247, 18 May 2000 of the Government. SARM had signedcooperation agreements on mutual recognition of conformity assessment with appropriate
bodies of several countries such as the Be larus, China, Georgia, Iran, Kazakstan, Kyrgyz
Republic, Moldova, Russian Federation, Slovak Republic, Tajikistan, Turkmenistan, Ukraineand Uzbekistan. SARM is carrying  out negotiations with appropriate bodies of other countries,
particularly with Bulgaria, India, Romania and th e United States, to sign similar agreements, on
cooperation. In the absence of agreements on mutual recognition, the Resolution No. 247, 16
May 2000 allowed for simplified procedures on acceptance of certificates and conformity marksWT/ACC/SPEC/ARM/1/Rev.6
Page 61
issued by certification bodies of other countries, if the Armenian authorities were satisfied that
conformity assessment procedures in those countries offered adequate assurance of conformity.
The Decree No. 239 of 12 May 2000 of the Government of the Republic of Armenia “On
Compulsory Conformity Assessment Of Products and Services in the Republic of Armenia”directed the following:
Description CN code
Meat of bovine animals, frozen. 0202
Meat of swine, frozen 020321-020329
Edible offal of bovine animals and swine,
frozen020621 000, 020622, 020641
Meat and edible offal of poultry, frozen 020712, 020714, 020725, 020727, 020733, 020736
Pig fat 020900 110
Meat and edible meat offal, salted, in brine,
dried or smoked0210
Fish, fish meat, frozen, dried, salted, smoked 0303, 030420, 0305
Milk and milk products 0401, 0402, 040310, 040510, 040590, 0406
Birds' eggs 040700
Natural honey 040900 000
Peas, chickpeas, lentils 0713-071340
Bananas, dates, pineapples, dried grapes,
melons, dried fruit080300, 080410 000, 080430 000, 0805,
080620, 0807, 0813
Coffee, tea 0901, 0902
Rice 1006
Cereal flours 110100, 1103
Sunflower seeds 120600
Soya-bean, olive, sunflower-seed, maize oil 150710 900, 150990 000, 151219 910, 151529 900
Vegetable fats and oils, margarine 1516, 1517
Preparations of meat, fish or crustaceans,molluscs and other aquatic invertebrates1601-1605
Sugar, sugar confectionery 1701, 170290, 1703, 1704
Cocoa, preparations containing cocoa 180500 000, 1806
Infant food 190 110 000
Preparations of cereals, flour, starch and milk,
pastry cooks' products1902-1905 (ex. 190590 300)
Preparations of vegetables, fruit, nuts or other
parts of plants2001-2009
Miscellaneous edible preparations, yeast, ice-
cream, cheese fondues2101-2105, 210690 100
Beverages, spirits and vinegar 2201-2209
Tobacco and manufactured tobacco
substitutes2401-2403
Table salt 250 100 910
Natural sands of all kinds, whether or not
coloured2505
Road-metal used for concrete 251 710 100
Portland cement, not coloured and pozzolanic 252321 000, 252390 300
Oil products 2707, 2710, 2711WT/ACC/SPEC/ARM/1/Rev.6
Page 62
Description CN code
Fertilizers 3102-3105
Paints 3208, 3209
Perfumes, beauty or make-up preparations
and preparations for use on the hair,preparations for oral hygiene, shaving,
deodorants and antiperspirants3303-3306, 330710 000, 330720 000
Soap, washing and cleaning preparations 3401, 3402 20, 3402 90
Modelling pastes, preparations for use in
dentistry340 700 000
Photographic plates for medical X-ray use 370 110 100
Hydraulic brake, anti-freezing fluids and their
components381900 000, 382000 000
Articles of plastics for the conveyance,
packing, tableware and kitchenware392310-392330, 392410 000
Pneumatic tires of a kind used on motor cars,
lorries and buses401110 000, 401120
Retreated or used pneumatic tires 4012
Contraceptives, teats for babies 401410 000, 401490 100
Surgical gloves 401 511 000
Household and sanitary articles of paper,
cellulose wadding or webs of cellulose fibres481810, 481820, 481840
Men's, women's and children's pyjamas,
underpants, knitted or crocheted6107-6109, 6207, 6208
Babies' garments, knitted or crocheted 6111, 6209
Brassieres, girdles, corsets and similar articles 6212
Glasses for corrective spectacles 701 510 000
Bars, hot-rolled, in irregularly wound coils, of
iron or non-alloy steel, of circular cross-
section measuring less than 14 mm in
diameter, for reinforced concrete721 391 100
Bars and rods, hot-rolled, for reinforced
concrete721 499 100
 Electrodes and cored wire of base metal, for
electric arc-welding831110 900, 831120 000
Electro-mechanical domestic appliances 8509 ( ex. 850990)
Electro-shavers, hair clippers 851010 000, 851020 000
Domestic electric heating apparatus, water
heaters, immersion heaters8516 (ex. 851680, 851690)
Transmission apparatus, for radio and
television of a voltage exceeding 1 kV852510 900, 852520 990
Electric signalling apparatus for burglar or
fire alarms853 110 300
Electric apparatus for switching, protecting
electric circuits, for making connections to orin electric circuits853620 100, 853661, 853669, 853690
Electric lamps 853922, 853931
Electric cables 854 459 800
Contact lenses for spectacles of glass and of
other materials900130 000, 900140, 900150
Spectacles with "glasses" optically worked 900 410 100WT/ACC/SPEC/ARM/1/Rev.6
Page 63
Description CN code
Syringes of plastics, with or without needles 901 831 100
Hearing aids, pacemakers for stimulating
heart muscles902140 000, 902150 000
metal prefabricated building structures
(reinforced preparations, bush parts welded
on, their connections for ferro-concrete
structures)940 600 390
prefabricated building ferro-concrete
structures (logs for coverings and anvils,
posts, slide-valves, farms)94 06 00 900
Toys 9502, 9503 (ex. 950291 000, 950299 000)
Gas fuelled 961 310 000
88. 86.        The representative of Armenia informed the Working Party that the following
legislative acts related to Technical Barriers to Trade were being drafted and would be  adopted and
enacted in the Republic of Armenia upon the date of its WTO accession :
Legislative Act Projected  Date of enactment
Armenian  Law on Conformity Assessment of Products and
Services to the Normative Requirements1.10.99
9.11.99 adopted by National
Assembly
Armenian  Law on Standardization 15.11.99
9.11.99 adopted by National
Assembly
Law on Uniformity of Measurements 30.4.97
The representative of Armenia stated that all relevant laws relating to Technical Barriers to Trade
would be brought into conformity with the requi rements of the Agreement on Technical Barriers to
Trade by the date of Armenia's accession to the WTO  without recourse to any transition period.  The
Working Party took note of these commitments.
- Sanitary and Phytosanitary Measures
89. 87.        The representative of Armenia added that SARM cooperated with the Ministries of
Health and Agriculture in matters relating to sanitary and phytosanitary measures. Having theobjective to protect human health, safety and environment, the Government of Armenia hadintroduced the list of goods, some of which fall in the scope of SPS Agreement, subject to mandatorycertification (Resolution 15 of 16 June 1998) which was evidence for the fact that Armenia had startedthe process of elaboration of Sanitary and Phytosanitary Measures. In 1996, the National Assemblyadopted the Law on State Agrarian Inspections. The law defined the legal, economic and organisation
principles of State Agrarian Inspections in the Republic of Armenia. Artic les 6 and 7 of the Law,WT/ACC/SPEC/ARM/1/Rev.6
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particularly outlined the activities of the State In spection for Agriculture, concerning cultivation of
lands, use of fertilizers, the struggle against plant diseases, insects and weeds,  transportation of toxic
substances and mineral fertilizers, conditions of conservation and annihilation, as well as livestockbreeding with respect to veterinary services.  According to Resolution No.17 of the Government
(11 March 1998) the "National Agrarian Rules" were es tablished.  The latter dealt with the protection of
population from diseases common to man and animals,  the prevention and eradi cation of contagious and
non-contagious animal diseases, transportation, conservation, use and annihilation of veterinary
medicaments and disinfectants.  The li st of plant pests, weeds and diseases of quarantine significance for
the Republic of Armenia was also established by th is Resolution.  For the implementation of the Law on
State Agrarian Inspections,  a draft
 Law on Plant Protection and Plant Quarantine , as well as the Draft
Law on Veterinary Medicine  had been worked out. The Law on Pl ant Protection and Plant Quarantine
defined the legal, economic and organisation principl es of the State Services  of Plant Protection and
Plant Quarantine of the Republic of Armenia, a nd regulated relations between farms, enterprises,
organizations and individuals within the territory of the Republic of Armenia.  The Law regulated
procedures of phytosanitary control during importation/exportation of plants or products of plantorigin.  Main concepts and requirements of the International Plant Protection Convention were taken
into account in the Draft
 Law.  The possibility for taking into consideration the phytosanitary
conditions and requirements of an importing country for issuing phytosanitary certificates were alsoprovided in this Draft
 Law.  At present the Draft  Law on Plant Protection and Plant Quarantine has
had been submitted to the Government  enacted on 20 March 2000 .
90. 88.        The Law on Veterinary Medicine  defined the legal, economic and organisation
principles of the State Service of Veterinary Medicine  of the Republic of Armenia, fixed the
regulation for the prevention of diseases of animals, for the protection of population from diseasescommon to man and animals, and for providing the population with quality products according toveterinary and sanitary conditions. The law regulated relations between the State body in charge of
veterinary medicine and enterprises, organizations, entrepreneurs, and individuals on the territory of the
Republic of Armenia.  The law established pro cedures of state veterinary inspection during
importation/exportation of animals and pr oducts of animal origin.  The Draft
 Law on Veterinary
Medicine  had been submitted to the National  Assembly for approval.  Armenia is  has been a member
of the International Epizootic Office since December 1997 and follows guidance and standards of this
organization.  Both Draft  Laws were compatible with requirements of the SPS Agreement.
91. 89.        The representative of Armenia informed that Armenia is a member of the
International Codex Alimentarius commission and shall follow its standards and guidance inestablishing procedures on food safety.  At present the main document establishing sanitary rules and
norms, allowed limits of toxic compounds, additives, contaminants in the food and foodstuffs are soWT/ACC/SPEC/ARM/1/Rev.6
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called SanPins (Sanitary and Hygienic Rules and Norms), issued by the Ministry of Health of the
Republic of Armenia based on the scientific data and risk assessment conducted by research institutes.
The Food Safety Law provided stabilization relati ng to food activities, particularly concerning
the production and reproduction, importing, ex porting, exchanging, keeping, packaging, selling
as well as usage of the products.
92. 90.        The representative of Armenia informed the Working party that the following
legislative acts related to Sanitary and Phytosanitary Measures were adopted  being drafted  and will
be enacted in the Republic of Armenia upon the date of its WTO Accession:
Legislative Act Date of Enactment
Armenian Law on Veterinary Medicine 01.09.99
26.10.99 by National Assembly
Armenian Law on Plant Protection and Plant Quarantine 01.10.99
20.3.2000 by National Assembly
Armenian Law on Food Safety 8.12.99 by National Assembly
The representative of Armenia stated that all rele vant laws relating to Sanitary and Phytosanitary
Measures would be brought into conformity with the requirements of the Agreement on Sanitary and
Phytosanitary Measures by the date of Armenia's accession to the WTO without recourse to anytransition period.  The Working Party took note of these commitments.
- Trade-Related Investment Measures (TRIMs)
93. 91.        
The representative of Armenia stated that Armenia did not maintain measures that
were not in conformity with the Agreement on Trade-Related Investment Measures and wouldtherefore not seek a transition for the progressive elimination of such measures within a fixed periodof time.  The Working Party took note of this commitment.
- State Trading Enterprises
94. 92.        
In response to questions the representative of Armenia stated that the State monopoly
over foreign trade of the Former Soviet Union was abolished in 1989, and was replaced by aregistration requirement for the conduct of such activity.  By a decree of the President of the Republicof 4 January 1992 entitled On Foreign Economic Activity, all enterprises registered and operating inthe territory of Armenia, regardless of their form of ownership, had the right to conduct foreigneconomic activity, and are not subject to any additional registration requirements.WT/ACC/SPEC/ARM/1/Rev.6
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95. 93.        Some members of the Working Party noted that certain telecoms enterprises were
engaged in State-trading pursuant to Article XVII of the GATT 1994.  In response to requests forinformation on enterprises engaged in State trading in the Republic of Armenia, the representative ofArmenia stated that based on the definition of State-trading set out in the Interpretation of ArticleXVII of the General Agreement on Tariffs and Trade 1994, Armenia maintained one State tradingenterprise in the telecommunications sector. Basic telecommunication services, mobile andinternational data transmission and value-added services have been reserved to Armentel, a joint-stock
company owned by the Government of Armenia and a foreign private supplier, in exchange for
commitments by Armentel to develop Arme nia’s telecommunications infrastructure.
96. 94.        
The representative of Armenia stated however that Resolution 161 of March 1991, as
amended by Resolution 415 of June 1995, reserved certain activities exclusively to the State andrequired that certain other activities were licensed by the authorities.  List 1 attached to Resolution161 identified eight types of activities that were reserved exclusively for the State.  These were: (i) thesale and purchase of weapons, armaments, narcotics, explosives, radioactive materials and otherstrong substances; (ii) the production and repair of weapons, armaments and explosives; (iii) thepreparation of drugs, narcotics, poisonous and strongly acting substances; (vii) the issuing of money
and preparation of State medals; and storage, preservation and utilization of gold and other precious
metals and substances of military significance.  A ll these reserved activities involved the State in the
exercise of its unique responsibilities, including the preservation of national security, public order,and the health and safety of the population.  List 2 of Resolution 415 indicated those activities thatrequired prior authorization and the body responsible for providing the authorization.  As with theitems on List 1, few involved manufacturing activity.  All the items on list 2 were controlled forsimilar reasons to those items in List 1.   Licensing of economic activities included under List 2 isnon-restrictive in the sense that licensing decisions are not motivated by trade protectionconsiderations.  In response to questions from Working Party members, the representative of Armenia
stated that the coverage of these reservation pow ers was under review.  No State monopoly existed in
respect of the production of pharmaceuticals.  However, both State and private enterprises requiredlicences from the Ministry of Health in order to produce pharmaceuticals.
97. 95.        
In response to questions whether Armenia intended to report its State monopoly of
natural gas distribution under Article XVII, the representative of Armenia replied that Armgas had notbeen granted exclusive or special rights or privileges in the market for natural gas distribution.Armgas was State-owned and the Government had dete rmined that this enterprise would be the only
State-owned enterprise to distribute gas.  But this does not prevent any other entity with majorityprivate ownership from purchasing gas or from involvement in gas distribution.  In light of thisWT/ACC/SPEC/ARM/1/Rev.6
Page 67
situation, the Government of Armeni a did not believe it was required to notify Armgas under Article
XVII.
98. 96.        The representative of Armenia said that no State or private enterprises operating in
Armenia had exclusive or special rights or priv ileges granted by the Government of Armenia to
conduct international trade in goods or services except those mentioned in paragraph  93. However, henoted that a low-interest loan had been granted to  the State enterprise Hayhatsahatik (ArmCereal) in
February 1996 to acquire and stockpile wheat from the European Union Counterpart joint assistance
wheat fund.
99. 97.        
The representative of Armenia confirmed that his Government would apply its laws
and regulations governing the trading activities of State-owned enterprises and other enterprises withspecial or exclusive privileges and would otherwise act in full conformity with the provisions of theWTO Agreements, in particular Article XVII of the GATT 1994 and the Understanding on thatArticle; and Article VIII of the GATS.  The Working Party took note of these commitments.
- Free zones, special economic zones
100. 98.        
The representative of Armenia stated that Armenia did not maintain any free trade
zones in which special duty privileges of any kind were granted.  Armenia had, however, established a
Frontier Trade Area in the Meghri Region, on the border with Iran.  The Frontier Trade Area was
established to promote trade between Armenia and Iran.  Under the arrangement, Armenian
enterprises were encouraged to establish a presen ce in the border area and Iranian enterprises were
encouraged to do the same on their side of the frontier.  Forty citizens from each country were entitledto freely enter each other’s border areas in order to explore business and trading opportunities, but nospecial customs regime or privileged duty treatment was associated with any exchanges agreed on thebasis of these contacts.
- Government procurement
101. 99.        
The representative of Armenia informed the Working Party that government
procurement in Armenia was governed by Government Resolution number 67 if 8 February 1995 "On
the State Procurement Order of the Republic of Armenia".  Pursuant to that Resolution, whengovernment entities wished to procure goods, they could do so either through any procurement agentor directly from the marketplace on their own be half.  Under the new approach to procurement
introduced in that Resolution, no procurement entity , either State-owned or private, enjoyed special
rights or privileges.  All interested parties could participate in procurement activities under thecommon rules.  These purchases, which were given effect through State Orders, were financedWT/ACC/SPEC/ARM/1/Rev.6
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directly from the budget, and involved the acquisition of goods and services by government entities
for their own consumption (i.e. not for resale or use as inputs into production).  In the past, thesearrangements had sometimes involved implicit subs idy elements for the suppliers concerned, since
prices under State Orders had not necessarily corresponded to market prices.  As markets developed,however, and more competition occurred, both among Armenian enterprises and with imports,subsidized procurement was becoming a less frequent occurrence.
102. 100.      
The representative of Armenia said that with effect from 1995,  State Orders in excess
of US$50,000 for items including:  electric energy, various health services training and education,
geological exploration, televisi on broadcasting, water supplies and sewerage were subject to
competitive tender.  In response to questions, the representative of Armenia stated that tenderannouncements are made in official periodicals of the Government of Armenia.  The main criteria forselecting bids included the prices, the quality of the products or services offered, operational,technical and service characteristics, national security requirements, terms and conditions of payment,and terms and conditions of delivery.  Foreign enterprises received equal treatment to Armenianenterprises.  The tenders were administered by the Ministries and Departments concerned, or by theirrepresentatives. The representative of Armenia informed the Working Party that currently the Law on
Government Procurement was under preparation in the Ministry of Finance and Economy (recently
formed upon the structural changes of the Government of Armenia). Pursuant to this Law, a
governmental authority regulating the field and supervising all kinds of State procurements would be
established. Stringent criteria would be set governing qualification, tendering, bidding, evaluation,
performance and appeal procedures. The provisions of the Law on Government Procurement of the
Republic of Armenia would be in conformity w ith the WTO Agreement on Government Procurement,
in particular the national treatment and non-discrimination principles would be guaranteed consistent
with Article III of the Agreement on Government Procurement. The adoption of the Law was
projected prior to the date of Armenia’s accession to the WTO.   The representative of Armenia
informed the Working Party that in its efforts to bring the internal legislation into full compliance
with WTO regulations, the Government had initia ted the adoption of the Law on Procurement,
which was adopted by the Parliament on 5 J une 2000, and signed by the President on 19 June
2000.  As required by the law the State Procuremen t Agency was established as the single agency
responsible for Government Procurement (i n excess of Armenian Dram 250,000) from 2001
onward. For 2000 budget all Government procurement was made in a non-centralized manner,while all agencies made their procurements accordin g to the regulations speci fied in the Law.  The
Law defined clear and transparent procurement rules and regulations which are in conformity
with the WTO Agreement on Govern ment Procurement, in particul ar the national treatment andWT/ACC/SPEC/ARM/1/Rev.6
Page 69
non-discrimination prin ciples are guaranteed consistent with Article III of the Agreement on
Government Procurement.
103. 101.      In response to questions from members of the Working Party, the representative of
Armenia stated that the Government of Armenia had decided to commence negotiations to join theAgreement on Government Procurement from the da te of accession. In this connection, Armenia
would request observer status in the Committee on Government Procurement prior to accession to theWTO and would submit an entity offer within three months of accession to the WTO.  He also
confirmed that, if the results of the negotiations would be satisfactory to the interests of Armenia and
other members of the Agreement, Armenia would complete negotiations for membership in theAgreement by [31 July 2001].  The Working Party took note of this commitment.
-T r a n s i t
104. 102.      
The representative of Armenia stated that Armenia permitted an unimpeded and tax-
free transit of goods through its territory, with  the exception of those goods whose importation was
prohibited, i.e. weapons, components used in the production of weapons, explosives, nuclearmaterials, poisons, narcotics, strong psychotropic substances, devices for use in opium smoking, andpornographic material.  These items would only be able
 allowed to be transited  through the
Republic of Armenia’s Armenian  territory with the explicit consent of the Government of Armenia.
Transit goods remained under customs supervision  control while they were on Armenian  the
Republic of Armenia’s territory.  The new Republic of Armenia’s Customs Code adopted in July
2000 regulated also the regime of transit shipment through territory of the Republic of
Armenia. According to Article 27 of the Custom s Code, within the framework of the transit
shipment regime, customs charges should not be  levied, except for the customs fees and other
fees in cases foreseen by law; non-tariff measur es should not be applied, except where otherwise
prescribed by this Code, other laws and internat ional treaties to which the Republic of Armenia
is a party.   Armenia was party to a plurilateral agreement on transit trade within the framework of the
CIS Treaty on  Economic Union Treaty .  This agreement provided that signatories should not tax or
impede transit trade through their territories.  Ar menia had also signed a bilateral agreement on this
subject with Georgia.  Similar agreements with Iran and the Ukraine were under consideration.
105. 103.      The representative of Armenia confirmed that the Government would apply the laws
and regulations governing transit operations and woul d act in full conformity with provisions of the
WTO Agreement, in particular with Article V of the GATT 1994.  The Working Party took note ofthis commitment.WT/ACC/SPEC/ARM/1/Rev.6
Page 70
- Agricultural policy
106. 104.      The representative of Armenia said that as in the case of industry, as well as the
agricultural sector,  the Government of Armenia does not maintain State planning of any kind in the
agricultural sector.  The Government provided indirect subsidies, such as: charging only variable costs
on water and electricity supplies from farmers  covering electricity charges on irrigation water
supply ; provision of low-interest loans to farmers;  consumers of agricultural water for the
redemption of their debts to the energy suppliers ;  provision of short-term low-interest project loans to
farmers  through the Agricultural Cooperative Bank;   tax exemptions, particularly exemption of
VAT for producers of basic agricultural products, as a main means of support to the
agricultural sector.  P rovision of cereal seeds through "seed-loans" was also carried out in the
past.  ; and granting tax exemptions for producers of basic agricultural products,  as a main means of
support  to the agricultural sector.  The support provided to agricultural producers was aimed to assist
farmers to overcome structural and operational difficulties during the transition toward the marketoriented economy.  In contrast to the slow pace in industry, Armenia has privatized almost 90
 70 per
cent of agricultural land, and made land titles freely transferable. Agricultural support tables werebeing prepared using the 1995-1997 period as the base period for the calculations of the aggregate
measurement of support which would be used to  specify Armenia’s domestic support commitments.
107. 105.      
The representative of Armenia added that as far as inputs were concerned, two large
State enterprises,  Hayagrospasarkum  (Armagroservice) and Hayberriutyun  (ArmProsperity) weredominant suppliers of agricultural services and inputs such as agricultural machines and spare partsthereof, seeds, chemicals and fertilizers. In 1996, 66 per cent of each of these enterprises had beenprivatized while 34 per cent had remained State-owned in the form authorized by the Ministry ofAgriculture (holding). Despite the fact that the competition remained somewhat constrained in the
input market, there were no restrictions to stop other suppliers from entering it. More new privateenterprises have been entering the market and increasing their market shares, particularly in the
market of fertilizers. This tendency was expected to be continued with the development of conditions
of competition in the market. He further added that these enterprises had no exclusive or special rightsor privileges granted by the Government of Armenia in the field in which they operated.
108. 106.      
The representative of Armenia said that in the past the Government of Armenia did
not consider direct subsidies as a part of the development programme of the agricultural sector.Indirectly, however, farmers have benefited from the Government’s policy of charging only variable
costs on water and electricity supplies,  covering electricity charges on irrigation water supply, and
from the  provision of shorter-term and medium-term low-interest loans to consumers  farmers as
well as tax exemptions for producers of basic agricultural products. of agricultural water for theWT/ACC/SPEC/ARM/1/Rev.6
Page 71
redemption of their debts to the energy suppliers; s hort-term low-interest project loans to farmers
through the Agricultural Cooperative Bank; "seed-loans"; and from the granting of tax exemptions for
producers of basic agricultural products. Variable cost pricing policies have applied to all users of
electricity and water.  However, full cost pricing (cost recovery pricing) was introduced for electricity
in 1995, and for water during the course of 1996.   In addition, the Government supported a range of
activities dedicated to reparation of irrigation network, to restructuring of financial andcommunication infrastructure, to training farmers in  improved agricultural techniques, to upgrading
seed and livestock quality, to conducting pest and disease control, and to providing technical advice
and extension services. These measures fit with the green box of domestic support tables as far as theprovided services were available to all farmers and involved budgetary outlays.  The Governmentintends to further increase the direct support to agricultural producers.
109. 107.      
The representative of Armenia stated that  the Government of Armenia paid no export
subsidies on exports of agricultural products.  Acco rdingly the Government of Armenia would bind its
agricultural export subsidies at zero level in the relevant part of the Schedule of Concessions onGoods.  The Working Party took note of this commitment.
V. TRADE RELATED INTELLECTUAL PROPERTY REGIME
110. 108.      
The representative of Armenia stated that the first step in the direction of intellectual
property protection was the establishment of the Armenian Patent Office in 1992. Since December
1992, it has been possible to file applications for patents in respect of inventions, and as from August1993, to register utility models and industrial designs. During 1993-96
1999 , the Armenian Patent
Office received 695  944 applications for inventions from local Armenians and 364  444 applications
from foreigners. An applicant not a national of Armenia and not domiciled in Armenia must conducthis affairs through a patent attorney registered with the Armenian Patent Office.
- Intellectual property policy
111. 109.      
In response to requests for information concerning the intellectual property policy of
the Government of Armenia, the representative of Armenia stated that the Government of Armenia
was currently engaged in a substantial programme of legislative reform. During 1993- 94, the
Armenian Patent Office received some 3,000 applications for trade marks, service marks andappellations of origin. By 1 December 1998
 1 January 2000 the Armenian Patent Office had received
about 1,300  1,388 applications for inventions - of which 850  944 were submitted by local Armenians
and 450  444 by foreigners, and approximately 5,500  6,772 applications for trademarks according to
National Procedure - of which 4,874  5,301 applications were submitted by foreigners and 626  1,471
by local Armenians.  However, the reception of these applications for registration began after theWT/ACC/SPEC/ARM/1/Rev.6
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issue of Resolution No. 4 of 19 August, 1995, "On Confirmation of the Temporary Regulations for
Trademarks and Service Marks" and Patent Office Order of 24 October 1995, "On re-registration offormer Soviet Union valid certificates for tr ade and service marks". In May 1997, the Armenian
National Assembly adopted the Law on Protection of Trade and Service Marks and Appellations ofOrigin, and the Law on Protection of Trade Names. Th e provisions of the adopted statutes were fully
consistent with international norms in this area. A distinctive feature of the first of these Laws was thelegal equality established between trademarks and service marks.  The representative of Armenia
confirmed that the following legislative acts related to intellectual property protection were currently
enforced in the Republic of Armenia:
Legislative act Date of enforcement
1. Armenian Law on Patents 25. 8.93
2. Armenian Law on Copyright and Neighbouring Rights 27 31.5.96
3. Armenian Law on Advertising 31.5.96
3.4. Armenian Law on Trademarks, Service Marks and
Appellations of Origin of the Goods21.6.97
4.5. Armenian Law on Protect ion of Trade Names 1.7.97
5.6. Armenian Law on Protection of Topographies of
Integrated Circuits14.3.98
6.7. Civil Code 1.1.99
7.8. Civil Procedure Code 1.1.99
8.9. Criminal Procedure Code 12.1.99
The representative of Armenia further confirmed that the following legislative acts related to
intellectual property protection , constituting either re-casted v ersions of above-mentioned laws or
elaborated for the first time ones,  were being  drafted with the aim to be aligned with the TRIPS
requirements, amongst which the follo wing laws were recently enacted:  and will be enacted in the
Republic of Armenia upon the date of its WTO Accession:
Legislative actProjected date
of enactment
StatusCoverage
Amendments to Armenian  Law on Patents of the
Republic of Armenia (new)15. 09.99
Entered into
force on
16.12.99(Articles 27, 30, 31, 34  of
the TRIPS Agreement)
Amendments to  Law on Copyright and
Neighbouring Rights (new)15.10.99 (Articles 12, 14ter of the
Berne Convention andArticle 10 of the TRIPS
Agreement)WT/ACC/SPEC/ARM/1/Rev.6
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Legislative actProjected date
of enactment
StatusCoverage
Amendments to  Law on Trademarks, Service Marks
and Appellations of Origin of the Goods (new)15.10.99 (Articles 5 (C), 6bis ,
6septies, 10 of the Paris
Convention and Articles
15, 16,17,19, 22, 23, 24,
46, 47  of the TRIPS
Agreement)
Amendments to  Law on Protection of  Trade Names 15.10.99 (Article 8 of the Paris
Convention)
Amendments to Civil Procedure Code 01.11.99 (Articles 46, 47, 50 of the
TRIPS Agreement)
Amendments to Civil Code Entered into
force on
14.3.2000(Articles 17, 22, 30, 39 of
the TRIPS Agreement)
Amendments to Criminal Procedure Code 01.11.99
Entered into
force on
5.4.2000(Articles 46, 47, 50, 61 of
the TRIPS Agreement)
Customs Code 01.11.99 (“Special Requirements
related to Border
Measures” provided by
Section 4, Part III of the
TRIPS Agreement)
Criminal Code 15.11.99 (Articles 10bis , 10ter of the
Paris Convention and
Articles 46, 47, 50, 61 of
the TRIPS Agreement)
Armenian Law on Selection Achievements 15.11.99
Entered into
force on
7.1.2000(related to the protection
of plant varieties.  and
animal breeding  Article
27 of the TRIPS
Agreement)
Armenian Law on Competition (including the
regulation of unfair competition and protection of
undisclosed information)01.12.99 (Articles 10bis , 10ter of the
Paris Convention and
Article 39 of the TRIPS
Agreement)
The laws mentioned below would be enacted in the Republic of Armenia upon the date of its
WTO Accession:
Legislative ActDate of
EnactmentCoverage
Armenian Law on Protection of Economic
Competition (including the regulation of unfair
competition and protection of undisclosedinformation)Adopted by the
President of the
Republic ofArmenia  on
6.12.2000(Articles 10
bis , 10ter  of
the Paris Convention
and Article 39, 40 of  theTRIPS Agreement)WT/ACC/SPEC/ARM/1/Rev.6
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Criminal Code On the date of
accession
(Passed third
reading at theNational
Assembly)(Articles 10
bis , 10ter of
the Paris Convention
and Articles 46, 47, 50,
61 of  the TRIPS
Agreement)
Amendments to Civil Procedure Code On the date of
accession
(Passed  secondreading at the
National
Assembly)(Articles 42, 46, 47, 50 of
the TRIPS Agreement)
Customs Code (Adopted by
the President of
the Republic of
Armenia  on
9.8.2000 and
entered intoforce on
1.1.2001)(“Special Requirements
related to Border
Measures” provided by
Section 4, Part III of  the
TRIPS Agreement)
The Working Party took note of these commitments.
- Responsible agencies for policy formulation and implementation
112. 110.      The representative of Armenia said that policy formulation in the field of industrial
property was the responsibility of the Patent Of fice of the Republic of Armenia, and policy
formulation in the field of copyrights was the responsibility of the  Ministry of Industry and Trade
through the Armenian National Copyright Agency acting within its system.  The policy
implementation in the area of industrial property (patents, utility models, industrial designs,trademarks and service marks, trade names, layout designs of integrated circuits and appellations oforigin) was the responsibility of the Armenian Patent Office. The Patent Office was responsible forapproving industrial property right applications, maintaining the State Register of industrial propertyrights, issuing an official bulletin reflecting its decisions, and cooperating with foreign institutions andinternational organizations. The Patent Office was also responsible for the regime coveringtrademarks.
- Participation in internationa l intellectual property agreements
113. 111.      
The representative of Armenia stated that on 22 April 1993, Armenia became a
Member of the World Intellectual Property Or ganization (WIPO).  On 17 May 1994, Armenia also
deposited a declaration of continued application of the Paris Convention for the Protection ofIndustrial Property, Madrid Agreement Concerning the International Registration of Marks and theWT/ACC/SPEC/ARM/1/Rev.6
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Patent Cooperation Treaty.  The National Assembly of the Republic of Armenia ratified the
Protocol relating to the Madrid Agreement concer ning the International Registration of Marks
on 5 April 2000 and the Berne Convention for the Protection of Literary and Artistic Works on3 May 2000.
- Application of national and MFN treatment to foreign nationals
114. 112.      
Some members of the Working Party noted that although the representative of
Armenia had stated that foreigners enjoy national treatment in both civil and criminal procedures
before the courts, its replies to questions concerning administrative review proceedings, dealing with
the powers of judicial branches of government, sugge sted that the jurisdiction of economic courts was
not available to foreigners from outside the CIS.  The representative of Armenia stated that all citizensenjoy equal rights under the law, for example, the Law on Patents provided that all foreigners enjoyedthe same rights as nationals of Armenia in relation to all patent matters, including protection ofpatents and legal remedies against infringement. The above mentioned Law on Protection of Tradeand Service Marks and Appellations of Origin, and the Law on Protection of Trade Names similarlyenvisaged full national and MFN treatment for foreigners . This was also the case in respect to the Law
on Copyright, and any future laws and regulations adopted in the sphere of intellectual property
protection.
- Fees and taxes
115. 113.      
The representative of Armenia stated that fees were payable upon filing of an
application and granting of a patent. Similar arrangements were in place for trademarks and servicemarks and copyright. All fees were set so as to be limited in amount to the approximate cost ofservices rendered, and the granting and protection of intellectual property rights was not subject totaxation, as any fee is collected on behalf of the budget.  The fees for legal protection of Industrialproperty, established by the Law on State Fees of the Republic of Armenia, were identical for residentArmenians and non-residents.
- Substantive standards of protection, including procedures for the acquisition and
maintenance of intellectual property rights
- Copyright protection
116. 114.      
The representative of Armenia stated that the National Copyright Agency was
established in 1993. More than 2,000 authors and their artworks were registered with the Agency.  Inthe framework of its activities the Agency also registered those organizations which made use ofWT/ACC/SPEC/ARM/1/Rev.6
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artworks, such as theatres, concert organizations, or organizations using works of arts and crafts for
industrial purposes.  Copyright policy implementation was the responsibility of the NationalCopyright Agency, which registered copyrights, assi sted individuals to secure copyrights, provided
advisory services, and collected and paid royalt ies due to authors and their successors in title.
117. 115.      
The representative of Armenia added that in accordance with the Law on Copyright
and Neighbouring Rights, which was adopted by the National Assembly in May 1996, the NationalCopyright Agency provided protection for copyrights in the territory of the Republic of Armenia.  The
present Law on Copyright and Neighbouring Rights had been elaborated in accordance with the
provisions of the Bern Convention on Protection of Works of Art and L iterature.  It provided protection
for the property rights of computer programs and co mpilations of data, as well as for the neighbouring
rights, i.e., the rights of phonogram and videogram producers and broadcasting and television stations.
- Trademarks, including service marks
118. 116.      
The representative of Armenia informed the Working Party that in May 1997, the
Armenian National Assembly adopted the Law on Protection of  Trade and Service Marks and
Appellations of Origin and the Law on Protection of  Trade Names which came into force in
July 1997 .  As mentioned earlier, a distinctive feature of the first of these Laws was the legal equality
established between trademarks and service marks. The Law set out the terms and conditions of
trademark protection, the kinds of trademarks that may not be registered, the procedures forregistering trademarks, the rights of appeal against decisions relating to trademarks, the circumstancesin which trademarks may be used, and the documentary requirements for registering a trademark.Trademark protection was granted for 10 years, renewable for successive periods of 10 years. Theprovisions of the Law were in full conformity with Articles 15,16.1 and 17–21 of the TRIPSAgreement. As regards the provisions of Article 16.2 and 16.3 of the TRIPS Agreement concerningestablished
 well-known trade and service marks, these were also taken into account in the adopted
Law on Protection of  Trade and Service Marks and Appellations of Origin (unlike the former
Resolution No. 4 of 19 August, 1995), and they would be detailed in further elaborated regulations
were  properly specified in the new Law on Trademarks, Service Marks and Appellations of
Origin of the Goods which had en tered into force on 15 April 2000 .
117.       The representative of Armenia stated that the above-mentioned Law on Prot ection of Trade
and Service Marks and Appellations of Origin and the Law on Protection of Trade Names came into
force in July 1997.WT/ACC/SPEC/ARM/1/Rev.6
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- Geographical indications, including appellations of origin
119. Some members of the Working Party asked how Armenia would protect geographical
indications under the Law on Protection of Trade and Service Marks and Appellations of Origin, and
whether that legislation would be in conformity with Articles 22 to 24 of the TRIPS Agreement. Therepresentative of Armenia stated that geographical indications were not explicitly mentioned inResolution No 4 of 19 August 1995, and in the former Law on Tr ade and Service Marks and
Appellations of Origin of 1997 and so the protection for this kind of property would not be provided
until the Law on Protection of Trade and Service Marks and Appellations of Origin became operative.
The representative of Armenia stated that the prov isions of this adopted Law were in conformity wi th
Articles 22 to 24 of the TRIPS Agreement were taken into account in the above-mentioned new
Law on Trademarks, Service Marks and Appellations of Origin of the Goods of 2000 . The
relevant provisions in the mentioned Law of 2000 had been developed in compliance with the
provisions of the Paris Convention (Articles 1(2), 10, 10ter, 10bis, 6quinquies B.3), the MadridAgreement on the Repression of False or Deceptive Indications of Source on Goods (Articles 1(1),
1(2)), and the Lisbon Agreement for the Protection of Appellations of Origin and their InternationalRegistration (Articles 2(1), 2(2), 3, 6).
- Industrial designs
120. The representative of Armenia stated that industrial designs were protected by the Law on
Patents of 1993 .  In particular, the Article of the Law, which established the necessary conditions for
patentability of industrial designs, was consistent with Articles 25 and 26 of the TRIPS Agreement.In response to requests for information concerning the specific protection for textile designs providedfor in Article 25(2) of the TRIPS Agreement, the representative of Armenia stated that although
textile designs were not explicitly mentioned in Article 8 of the Law on Patents of 1993 (Article 6 of
the new Law on Patents of 1999) , they were nevertheless covered under that provision. There was
also a similar reference in Article 2.  ("The Types of Industrial Design") and Article 5 (d) ("The
Composition of Application") of The Rules of Preparation
 Drawing Up and Filing the Application of
Industrial Design", adopted by Armenian Patent Office on 10 February 1994.
-P a t e n t s
121. The representative of Armenia stated that the Law on Patents was adopted in August 1993.
Under the law, patents are granted for inventions, utility models and industrial designs. The term ofpatent s for inventions  was 5
 10 years for inventions ( temporary   preliminary patent s, which was
granted on a basis of limited  preliminary examination of the invention) , and 20 years,  when the
patent was granted on a basis of comprehensive  substantive examination (principal patent) .  TheseWT/ACC/SPEC/ARM/1/Rev.6
Page 78
periods were counted from the date of filing and as far as patents granted on a basis of comprehensive
examination were concerned, the Law provided for a three-year period of deferred examination after
the date of initial filing .  Patents for intentions were granted subject to requirements that the object of
the patent is new, involves an inventive step and is capable of industrial application, and that noconflict arose with respect to public order and security, good morals and law. Where a patentee fails
to exploit the patented object within four years from the date the patent was secured, any party
interested in the use of the invention, utility model or industrial design may request that a compulsory
licence be issued. As far as patents for inventions were concerned, the Law provides for the so-called
"deferred examination" for a three-year period. A full examination of a patent application was carried
out as a rule only upon request and payment of a fee by the applicant or any other interested party.
Some members of the Working Party asked whether  Armenia's Law on Patents was in fullconformity with Articles 27 to 34 of the TRIPS Agreement, and requested further information on theconformity of Armenia's system of compulsory licensing.   The representative of Armenia said that
in the interests of national security and in the public interests or in situations of emergency of the
Republic of Armenia, as well as in case of pub lic non-commercial use, the Government of the
Republic of Armenia was empowered to use or author ize third parties to use an invention, utility
model or industrial design without the consent of the patent owner (compulsory licence), provided
the patent owner shall be notified within 10 days and paid adequate remuneration taking into
account the circumstances of each case a nd the economic value of such authorization
. The patent
application is subject to formal examination wh ich shall be carried out within two months from
the filing date. If the application satisfies the formal requirements, it is laid open to publicinspection for a period of four months from a date of publication, after which a preliminary
patent may be granted. A principal patent shall be  granted depending on the results of substantive
examination, which shall be carried out upon re quest of the applicant or any other interested
party filed before the expiration of seven years from the filing date. The request for substantiveexamination may also be submitted within one ye ar after the expiration of the said seven-year
period, providing the paymen t of an additional fee.
122. The representative of Armenia stated that the new Law on Patents was in conformity with
Articles 27 to 34 of the TRIPS Agreement, and am endments concerning compulsory licensing would
be made to the Law on Patents from 1 September 1999  were adopted on 26 November 1999 .  [The
Working Party took note of this commitment.]
123. The representative of Armenia said that the owner of a security  title deed ( title of protection
patent or certificate) for invention or industrial design granted by the Patent Office of the SovietUnion , which was still in force, could file with the Armenian Patent Office for an Armenian patent atWT/ACC/SPEC/ARM/1/Rev.6
Page 79
any time during the validity period of the exclusive rights (20 years after the initial filing). Further, an
applicant who had filed an application before 8 December 1992, to obtain a security deed on aninvention or an industrial design with the intention of obtaining protection also in Armenia, and if the
application was still pending with the Patent Office of the Russian Federation, had a right, before 30December  1996, to file a request with the Armenian Patent Office that the application be furtherprocessed under Armenian legislation. In the ten-year period to 1990, residents of Armenia registered6,000 inventions with the Patent Office of the Soviet Union. The Law on Patents specified the nature
of patentable material, the conditions for patentability, the rights of patent holders, the conditions of
compulsory licensing, the procedures for granting patents, and dispute settlement.
- Plant variety protection
124. The representative of Armenia stated that Armenia currently has no laws
 excluded the
provisions dealing with plant variety protection  from the Law on Patents . In response, some
members of the Working Party asked how it was proposed plant varieties would be protected in thefuture. The representative of Armenia stated that a Draft Law on
 the Law on Selection Achievements,
covering both the  ensuring the sui generis  protection of plant varieties and animal breeding  was
being drafted and would be submitted to the National Assembly for approval  adopted on 22
December 1999 and had entered . It was intended that this legislation would enter  into force from 1
September  on 27 December 1999. [The Working Party took note of this commitment.]
- Layout designs of integrated circuits
125. In response to questions concerning the system for protection of layout designs of integrated
circuits, the representative of Armenia stated that the Law on Protection of Layout Designs of
Integrated Circuits which had been adopted on 3 February 1998 and entered into force on14 March 1998.
- Requirements on undisclosed information, including trade secrets and test data
126. In response to requests for information concerning the protection of trade secrets and
undisclosed information in Armenia, notably in view of Article 39 of the TRIPS Agreement, the
representative of Armenia stated that Armenia had not yet developed
 ensured provisions for the
protection of trade secrets and undisclosed information in its Civil Code (Article 141 and Chapter
68).  Legislation to cover the protection of undisclosed information in the form of the Law “On
Protection of Economic Competition” was being  drafted by the Ministry of Industry and Trade and
adopted by the National Assembly of th e Republic of Armenia on 6 November 2000 .  It was
intended that this legislation will cover s both the regulation of unfair competition and protection ofWT/ACC/SPEC/ARM/1/Rev.6
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undisclosed information and will enter  had entered into force from  on 1 January 2001 November
1999 . [The Working Party took note of this commitment.]
- Measures to control abuse of  intellectual property rights
127. In response to a question, the representative of Armenia stated that legislation regulating
unfair competition  appropriate measures to prevent or control abuse of intellectual property
rights was being drafted  ensured in the above-mentioned Law “On Protection of Economic
Competition” and will enter  had entered into force from  on 1 January 2001 November 1999 .   [The
Working Party took note of this commitment.]
128. The representative of Armenia also stated that for the purpose to combat restraints on
trade and abuses of intellectual property rights compulsory licensing was provided for under the
Law on Patents. In cases involving national security, public order or emergencies, the Government
could insist on compulsory licensing, provided the patent holder had not worked the patent within
four years of registration.   Article 16 of the Law on Patents state sd that in the interests of national
defense, maintenance of public order or in an extreme situation, the Government without the
authorization of the right holder, could permit a third party to use the subject matter of a patent,
obliging the latter to provide compensa tory remuneration to the right holder  if an invention, a utility
model or an industrial design are not used or are insufficiently used within four years from the
date of filing an application or three years from  the grant of patent, any person who, on the
expiry of the mentioned term, wishes to use the invention, utility model or industrial design, buthas not succeeded in concluding a licence contract with the patent owner, may submit a request
for granting a compulsory licence to the Government of the Republic of Armenia.  In this event,the licence shall be granted, provided the pate nt owner does not furnish evidence stating valid
reasons for not using or insufficiently using the invention, utility model or the industrial design .
Any dispute in respect of compulsory licence granting and amounts, order and terms of
payments over the amount of compensation had to
 shall be settled in the courts. A compulsory
licence could only be obtained if a patent has not been used within four years and if the proposed user
has made efforts to obtain authorization from the right holder.  A licence could not be awarded to a
third party if the owner of a patent could establish that the failure to use the patent was attributable to
factors beyond the owner’s control.  Similarly, under the adopted Law on Protection of Trade and
Service Marks and Appellations of Origin, at the request of any person trademark protection could be
nullified by a court decision, if a trademark has not been used within five years of the date of
registration or preceding the date of request for nullification.  A trademark owner has the right todefend the non-use of a trademark, and block a decision to remove the property right if the reasons fornot using the trademark were beyond the control of the owner.WT/ACC/SPEC/ARM/1/Rev.6
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- Enforcement
- Civil judicial procedures and remedies
129. The representative of Armenia stated that civil court procedures were always available to deal
with legal matters relating to intellectual propert y protection. The courts were empowered to order the
payment of damages and court expenses. The other remedies envisioned in the TRIPS Agreement arealso within the decision-making authority of Armeni an courts.   In response to questions concerning
foreigners' rights to enforce intellectual property rights, and whether the remedies, procedures and
penalties were in conformity with Articles 42 to 49 of the TRIPS Agreement, the representative of
Armenia stated that the civil courts in Armenia were fully empowered to provide the remediesreferred to in the above mentioned Articles of the TRIPS Agreement.  Civil remedies could not beordered as a result of administrative procedures. Foreigners enjoyed the same rights as Armeniannationals in this area. Remedies against criminal behaviour were available under Armenia’s courtsand penal system. Foreigners have the same access to these remedies as Armenian nationals. TheGovernment was considering the amendment of existing legislation and introduction of additionallegislation containing remedies that were framed in more specific terms for the enforcement ofintellectual property rights. The missing provisions were included in the Civil Procedure and Criminal
Procedure Codes, which had been adopted on 17 June 1998 and 1 July 1998 respectively and had
entered into force on 12 January 1999.
130. Some members of the Working Party asked whether Armenian judicial authorities had the
authority to order injunctions or provisional measures against infringement of intellectual propertyrights, as provided for in Articles 44 and 50 of the TRIPS Agreement, and whether administrativeauthorities enjoyed similar authority. In response the representative of Armenia stated that the judicialauthorities had the power to order injunctions or provisional measures.  Article 33 of the Law onPatents indicated the areas in which remedies may be sought through the courts in the area of patentprotection. Article 45 of the Law on Protection of Trade and Service Marks and Appellations of
Origin, as well as Articles 42 to 44 of the Law on Copyright and Neighbouring Rights provided
similar provisions in the case of trademarks , service marks, copyrights and neighbouring rights.
- Provisional measures
131. The representative of Armenia stated that the Courts of First Instance also have the necessary
authority to take the provisional measures envisioned in Article 50 of the TRIPS Agreement.WT/ACC/SPEC/ARM/1/Rev.6
Page 82
- Administrative procedures and remedies
132. The representative of Armenia stated that civil remedies could not be ordered as a result of
administrative procedures in Armenia.
- Special border measures
133. Some members asked whether Armenia had a system of border enforcement against
intellectual property rights infringements in accordance with Articles 51 to 60 of the TRIPSAgreement. The representative of Armenia replied that although no explicit provisions had so far been
developed
 enacted in this area, the judicial authorities were empowered to take the kinds of measures
envisioned in Articles 51 to 60 of the TRIPS Agreemen t. The part of the procedures, sanctions and fines
that were previously lacking were provided fo r in the above-mentioned new Civil Procedure and
Criminal Procedure Codes.  The remaining will be covered by the Criminal and  Customs Codes
respectively  which entered into force on 1 January 2001.  were now under preparation by the relevant
commissions of the National Assembly,  the Ministry  of Justice, and the Ministry of Finance and
Economy.  According to the commitments undertak en by Armenia its legislation would be in
conformity with the WTO provisions from 1 October 1999.   [The Working Party took note of these
commitments.]
- Criminal procedures
134. The representative of Armenia stated that at present Article 140 of the Criminal Code
provided, that infringement of copyright, publication (disclosure) of an invention before theapplication filing, appropriation of invention’s authorship, as well as coercion or inclusion intocollaboration of persons not participating in the creation of an invention, should be punished byimprisonment not to exceed two years
 for a period of up to two years or by a fine in the amount of
10-20 times of the established minimal wage not to exceed dram 300 .  Article 157 of the same Code
stated that deceiving purchasers and customers should be punished by imprisonment not to exceed
two years  for a period of up to two years or by a fine not in the amount of 20-40 times of the
established minimal wage to exceed dram 400 . In addition, as mentioned above, the missing
provisions were expected to be included in the new Criminal Code, which is now under preparation
by consideration in the relevant commissions of the National Assembly and the Ministry of Justice .
The latter would be in conformity with the provisions of Part III of the TRIPS Agreement. Therelevant legislation would enter into force from 1 October 1999
 on the date of accession.   T h e
Working Party took note of these commitments.WT/ACC/SPEC/ARM/1/Rev.6
Page 83
- Laws, decrees, regulations and other legal acts relating to the above.
135. Some members of the Working Party stated that since 1992, Armenia had had bilateral
commitments for the protection of intellectual property rights.  Armenia should accelerate itslegislative process to ensure the full implementation of the TRIPS Agreement from the date of itsaccession to the WTO.  In addition, some members of the Working Party requested clarification of thestatus of the draft Law on Trade Marks, Service Marks and Appellations of Origin in Parliament, andwhether the legislation was in full conformity with Articles 15 to 21 of the Agreement on Trade-
Related Aspects of Intellectual Property Rights.  The representative of Armenia replied that on May
1997, the Armenian National Assembly adopted the Law on Protection of Trade and Service Marksand Appellations of Origin and the Law on Protection of Trade Name which
 and the recently
adopted new versions of them with the above-mentioned amendments were in full conformity
with Articles 15 to 21 of the TRIPS Agreement, including the rights specified in Article 16.
- Statistical data on applications for and grants  of intellectual property rights, as well as any
statistical data on their enforcement
136. In response to requests for information concerning the numbers of patent applications filed in
Armenia, the representative of Armenia stated that during 1993- 1999 96,  1059  1,388 patent
applications had been filed with the Patent Office. In 544  870 cases a decision for granting a
provisional  patent was adopted, in 128  422 cases a patent was refused or the application was
withdrawn, and 515  96 applications were under examination. During 1994- 1999 96, 15 42 applications
for obtaining industrial design patents were filed, 8  30 from foreigners, and each was  32 applicants
were granted a patent. As regards trade and service marks and appellations of origin, after adoption of
the Law on National  State Duty in September 1996, 1513  5,893 applications passed the preliminary
examination and 513  4,918 trade and service marks were registered by the Armenian Patent Office.
During 1997-1999, 11 applications for appellation s of origin had been filed with the Patent
Office and five appellations were registered.  Under the new legislation more than 1200  1,500
authors, theatre and concert organizations were registered by  had concluded contracts with the
National Copyright Agency.
137. The representative of Armenia stated that the Government of Armenia would apply the
provisions of the Agreement on TRIPS no later than the date of its accession to the WTO, withoutrecourse to any transitional periods.  The Working Party took note of this commitment.WT/ACC/SPEC/ARM/1/Rev.6
Page 84
VI. TRADE-RELATED  SERVICES REGIME
- General
138. In response to questions, the representative of Armenia informed members of the Working
Party that Armenian laws and regulations, and th e policy framework did not generally distinguish
between trade in goods and trade in services.  The rights to trade were enshrined in the Law on
Enterprises and Entrepreneurial Activities  Civil Code of the Republic of Armenia, enforced on
1 January 1999 .   All enterprises must be registered and the register is open to public scrutiny.  These
requirements apply to all juridical persons, whether they are corporations or sole entrepreneurs  self-
employed persons (individual entrepreneurs) or commercial organizations .
139. In reply to requests for an explanation of the Government of Armenia's understanding of the
different modes of supply, the representative of Armenia noted that in terms of the modes of supplyidentified in the General Agreement on Trade in Services (GATS), the Law on Enterprises and
Entrepreneurial Activities  Civil Code of the Republic of Armenia was relevant for enterprises
selling services across frontiers (mode 1), for service supply through commercial presence (mode 3),and for natural persons who are independent service suppliers (mode 4).  Consumption abroad (mode3
 2) was not covered in this context.   Armenia had not developed any policies that restricted the
consumption of services abroad.  Moreover, Armenian nationals and residents were at liberty to travel
abroad and consume services within foreign jurisdictions if they so wish.
140. As far as commercial presence (mode 3) and natural persons who are independent service
suppliers (excluding that part of mode 4 dealing with employees of service suppliers) are concerned,the Law on Foreign Investments covered investment in both goods and services.  The law establishedthe legal framework for all types of investment invo lving foreign capital, including joint ventures and
wholly-owned enterprises and subsidiaries, whethe r the foreign investor is an individual or an
enterprise.  No restrictions were imposed on the temporary presence of natural persons in Armenia,whether as employees of foreign service suppliers or as independent suppliers of services.  In thelatter case, however, the service supplier would be required to register in Armenia as a business or
sole entrepreneur.
141. Armenia's Schedule of Specific Commitments in Services is reproduced in Part II of the
Annex to the Draft
 Protocol of Accession.WT/ACC/SPEC/ARM/1/Rev.6
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- Trade Agreements
142. Some members of the Working Party requested that Armenia provide detailed information on
the range of Free and Barter Trade Agreements to which Armenia was a party.  Other membersrequested information so that the Working Party could examine whether Armenia’s plurilateral andbilateral Free Trade Agreements were consistent with Article XXIV of the GATT 1994.   In responseto these requests, the representative of Armenia informed the Working Party that Armenia haddeveloped a network of plurilateral and bilateral trade agreements with various countries.  A numberof the arrangements were short-term in nature, designed to respond to particular needs, other
agreements were viewed as more durable, representing the Armenian Government’s perception of the
directions in which future trade relations should develop.  As a member of the World TradeOrganization, Armenia would keep its bilateral and regional trade agreements under review, not onlyto ensure legal consistency, but also to ensure the coherence of Armenia’s trade relations with a broadmultilateral framework.
- Plurilateral or regional agreements
143. In response to further requests for information on Armenia's trade regional trade agreements,
the representative of Armenia stated that the Tr eaty of Economic Union was a framework agreement
signed by nine Heads of State of the Commonwealth  of Independent States (CIS) in 1993 (Azerbaijan,
Armenia, Belarus, Kazakstan, Kyrgyz Republic, Moldova, Russia, Tadjikistan, and Uzbekistan).  The
treaty envisaged that signatories will move to the eventual establishment of a customs union andcommon market among CIS countries, however, each signatory might exercise its own discretion on
the pace and timing of integration into economic structures of the CIS.  Other economic and financialcomponents of the CIS treaty related to a paymen ts union, cooperation on investment, industrial
cooperation, and an agreement on customs procedures.  The treaty set out quite specific commitmentsin many of these areas (as well as on cultural, scientific, and defence matters).  Because the treaty wasessentially an evolving framework document, it did not "operationalize" these commitments.  Instead,the specifics of preferential trading relationships were defined in bilateral free trade agreements and in
clearing agreements.
144. Also in response to requests for further information, the representative of Armenia explained
that Armenia was also a member of the Black  Sea Economic Cooperation (BSEC) Organization,
along with ten other countries (Albania, Azerbaij an, Bulgaria, Georgia, Greece, Moldova, Romania,
Russia, Turkey and Ukraine).  This agreement covered a number of fields, including economiccooperation and trade, investment, scientific and technical cooperation, the establishment of a BSECBank, and cooperation on transport and communications.  The agreement did not make any provisionWT/ACC/SPEC/ARM/1/Rev.6
Page 86
for preferential trade, although it envisaged the possibility of free trade zones in the future.  More
generally, the organization seeks to cement relations among neighbouring countries throughcooperation in such areas as transport, international payments and industrial development.
145. Some members asked whether Armenia had concluded an economic cooperation agreement
with the European Union.  The representative of  Armenia confirmed that the Partnership and
Cooperation Agreement between the European Union and Armenia had been signed on 22 April 1996,and the Interim Agreement on Trade and Trade Related Issues between the European Union
 and
Armenia had been signed on 20 December 1996  and entered into force on 1 July 1999 .  The Interim
Agreement entered into force from the end of 1997,  after exchange of ratification instruments .  The
Agreement did not provide for any trade preferences.
- Bilateral free trade agreements and trade a nd economic cooperation agreements with CIS
countries
146. In response to questions of some members about Armenia's bilateral agreements with CIS
countries, the representative of Armenia stated that bilateral free trade agreements (FTAs) had beensigned with Georgia, Kyrgyz Republic, Moldova, Russian Federation, Tadjikistan, Turkmenistan and
Ukraine. The initial bilateral free trade agre ement had been authenticated with Kazakstan.
  T h e
bilateral free trade agreements had been ratified with the Russian Federation (1993), Kyrgyz Republic
(1995), Turkmenistan (1995), Georgia (1996), Ukraine (1996) , Kazakstan (1999) and Belarus
(2000)  and became legally binding.  When the free trade agreements were established and
operationalized, tariffs were set up at zero level, and non-tariff restrictions were eliminated. Therepresentative of Armenia further responded that the FTAs had been an outgrowth of the trade andeconomic cooperation agreements that Armenia signed with CIS countries.  Most of these earlyagreements were negotiated annually, they envisaged free trade and they included lists of productsthat the parties agreed to trade with one another.  Particularly after 1992 product lists tended tobecome indicative with no prior agreement on prices, and the commitments were only partially
fulfilled.  From 1995 the practice of product commitments was eliminated.  However, under the FTA
with the Russia Federation, each party could exempt from duty free treatment any export itemssubject to quotas, licences and export taxes.  Since Armenia did not maintain any export restrictions(other than those generally applicable for public security, health and safety reasons), there wasnothing on Armenia’s exception list under the free trade agreement.  Russia maintained certain exportrestrictions which could be covered by the exception provisions of the FTA, but in practice, theseoften did not apply because of the trade and economic cooperation agreements that Armenia alsosigned annually with Russia.  No other exceptions to duty-free treatment for imports werecontemplated in the Russian-Armenian free trade ag reement.  Within the period after signing of aWT/ACC/SPEC/ARM/1/Rev.6
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bilateral Free Trade Agreement with Armenia (1992-1997), the Russia Federation had substantially
liberalized its foreign trade (removed quotas, export taxes etc.).  Its legislation on tariff and non-tariffregulation of exports did not provide for a list of specific products.  This ensured the conformity of theFTA between Armenia and the Russian Federation with the WTO rules on free trade. The bilateralprotocol, signed on 28 August 1997, confirmed the fact that substantial deviations from the free traderegime between Armenia and Russia were eliminated.  There are no exemptions from duty freetreatment in the ratified bilateral agreements with Turkmenistan, Ukraine, Kyrgyz Republic and
Georgia.
- Bilateral clearing arrangements
147. In response to requests for information in relation to Armenia's barter trade agreements with
other countries, the representative of Armenia stated that barter was the essence of the remainingclearing arrangements maintained by Armenia.  Barter was borne of necessity and was not a preferredpolicy.  Barter was deemed essential in the imme diate post-independence period, in order to preserve
the only trade links that Armenia had at that time, and was a feature of the trade and economiccooperation agreements described above.  Moreover, barter offers a modicum of energy security,which in that environment remained of paramount importance to the Government.  In addition,
transport difficulties and a poorly functioning payments system had often made governmental support
a sine qua non of doing business with FSU countries.  As these kinds of constraints were relaxed,barter was expected to disappear. The Government  was committed to eliminating barter arrangements
as soon as practicable and recognized that its role as trader or as intermediary in trade inhibited the
establishment of independent networks and contacts with foreign buyers by enterprises which was anessential determinant for exporting success.  In1995 the only barter arrangements were those withTurkmenistan for gas, and with Russia for crude oil and mazout.
148. In response to requests for amount of trade flow s arising from barter trade agreements,  the
representative of Armenia said that the 1993 clearing arrangements involved 74 per cent of total
exports and 56 per cent of total imports. The respective figures in 1994 were 46 per cent for exports
and 29 per cent for imports.  As far as transport and payments problems were being settled, theimportance of barter trade gradually decreased and by late 1995 deliveries under the clearingarrangements were abandoned in practice.  In response to requests for current state of barter tradearrangements the representative of Armenia stat ed that in 1996 the Government announced its
intention to cease the barter trade, and none of former barter arrangements was recommenced. TheGovernment of Armenia does not envisage conducting barter or clearing settlements in the future.WT/ACC/SPEC/ARM/1/Rev.6
Page 88
- Bilateral trade and cooperation agreements
149. The representative of Armenia also stated that trade and cooperation agreements had also
been signed with many non-CIS countries, including Argentina, Austria, Bulgaria, Canada, China,
Estonia, Greece,  Cyprus, European Union,  Hungary, India, Iran, Latvia Lebanon , Lithuania,
Poland, Romania, Syria, Switzerland, Slovenia, Slovak Republic, the United States and Vietnam.
The possibility of such agreements with a number of other countries is under active consideration.These agreements seek to strengthen economic links, but do not contain any provisions for
preferential trade.
- Other non-trade bilateral agreements
150. The representative of Armenia noted that Armenia had also signed a series of other
agreements on investment and on customs relations .  The reciprocal investment promotion and
protection agreements sought to encourage investme nt between the parties, primarily by guaranteeing
national and more favourable treatment, non-expropriation (expropriation, an extremely rare measure,may be executed only due to public needs, upon providing preliminary adequate and effectivecompensation for the expropriated investments), and unrestricted transfers of investment funds andreturns from the investments, implementation of international arbitration practices in the case of
disputes between parties, as well providing guarantees against legislative changes.  Investment
agreements had been signed with 22 countries:  Argentina, Austria, Bulgaria, Canada, China, CyprusEgypt, France, Georgia, Germany, Greece, Iran, Ireland, 
Israel , Switzerland, Italy, Kyrgyzstan
Republic , Lebanon, Romania, Turkmenistan, Ukraine, the United Kingdom, the United States and
Vietnam.  Agreements on customs relations are intended to ensure cooperation and smooth workingrelations between the customs services of the signatories.  Such agreements have been signed withGeorgia, Iran, Tadjikistan, Turkmenistan and Ukraine.
151. In response to further requests for clarification of the compatibility of Armenia's free trade
agreements with the CIS States with Article XX IV of the GATT 1994, the representative of Armenia
stated that within the framework of the 1994 Free-Trade Agreement among the countries of the
Commonwealth of Independent States (CIS), Ar menia’s plurilateral and bilateral free-trade
agreements eliminated duties and other restrictive regulations on substantially all trade between theparties.  Armenia considered that these arrangements were consistent with Article XXIV of GATT1994.  It may be noted that at present Armenia does not conduct trade with all of the CIS countries,
but in respect of those countries with which Armeni a does trade, Armenia imposes no taxes or barriers
on its imports and exports.  These agreements do not cover trade in services.WT/ACC/SPEC/ARM/1/Rev.6
Page 89
152. The representative of Armenia confirmed that Armenia would observe the provisions of the
WTO Agreement including Article XXIV of the GATT 1994 and Article V of the GATS in its tradeagreements, and that it would ensure that the provisions of these WTO Agreement for notification,consultation, and other requirements concerning preferential trading systems, free trade areas, andcustoms unions of which Armenia was a member were met from the date of accession. He confirmedthat Armenia would, upon accession, submit notifications and copies of its free-trade area andcustoms union agreements to the Committee on Regional Trade Agreements (CRTA).  He further
confirmed that any legislation or regulations required to be altered under its trade agreements would
remain consistent with the provisions of the WT O and would, in any case, be notified to the CRTA
during its examination.  The Working Party took note of these commitments.
- Plurilateral trade agreements
153. The representative of Armenia informed the Working Party that the Government of Armenia
would join the Agreements on Trade in Civil Airc raft reflecting corresponding tariff commitments in
its Schedule of Concessions on Trade in Goods. The Working Party took note of these commitments.
- Transparency - Publication of Information
154. [
Some members of the Working Party requested that the Government of Armenia confirm
that from the date of accession, all laws, regulations, rulings, decrees or other measures related to
trade in goods or services will be published in its official publication for public review at least two
weeks prior to implementation, unless a longer period is specified under the relevant WTOAgreement.]
 The representative of Armenia confirmed that, from the date of accession, all laws,
regulations, rulings, decrees or other measures related to trade in goods or services would bepublished in its official publication for public review at least two weeks prior to implementation,unless a longer period is specified under the relevant WTO Agreement,  and that no law, rule, etc.,related to trade in goods and services would become effective prior to such publication.  He furtherstated that Armenia would fully implement that in accordance with
 Article X of the GATT 1994, and
the other transparency requirements of WTO Agreements requiring notification and publication.  The
published measures would be accessible to traders prior to implementation, and that no law, rule, etc.,
related to trade would become effective prior to such publication.  The Working Party took note of
these commitments.
Notifications
155. The representative of Armenia said that at the latest upon entry into force of the Protocol of
Accession, Armenia would submit all notifications required by an Agreement constituting part of theWT/ACC/SPEC/ARM/1/Rev.6
Page 90
WTO Agreement.  Any regulations subsequently enacted by Armenia which gave effect to laws
enacted to implement any Agreement constituting pa rt of the WTO Agreement would also conform to
the requirements of that Agreement.  The representative of Armenia said that by Decree No. 321
of the Government of the Republic of Armenia of 17 June 2000 the “Notification Center with
the WTO in the Republic of Armenia” was established and is operational.  The Working Party
took note of these commitments.
Conclusions
156. The Working Party took note of the explanations and statements of Armenia concerning its
foreign trade regime, as reflected in this repo rt. The Working Party took note of the commitments
given by Armenia in relation to certain specific matters, which are reproduced in paragraphs 15, 21,
26, 28, 29, 32, 35, 36, 41, 48, 56, 64, 66, 68, 69, 75, 78, 82, 86, 90, 91, 97, 101, 103, 107, 109, 121,
123, 125, 126, 132, 133, 136, 151, 152, 153 and 154  16, 22, 27, 29, 30, 33, 36, 37, 42, 49, 57, 65, 68,
70, 71, 77, 80, 84, 88, 92, 93, 95, 99, 103, 105, 109, 111, [122], [124], [126], [127], [133], 134, 137,
152, 153, 154 and 155 of this Report.  The Working Party took note that these commitments had been
incorporated in paragraph 2 of the Protocol of Accession of Armenia to the WTO.
157. Having carried out the examination of the foreign trade regime of Armenia and in the light of
the explanations, commitments and concessions made by the representatives of Armenia, the Working
Party reached the conclusion that, Armenia should be invited to accede to the Agreement Establishingthe WTO pursuant to the provisions of Article XII.  For this purpose the Working Party has preparedthe draft Decision and Protocol of Accession reprodu ced in the Appendix to this report,  and takes
note of Armenia's Schedule of Specific Commitments on Services (document ... ) and its Schedules ofConcessions and Commitments on Agriculture and Goods (document ... )  that are attached to theProtocol of Accession.  It is proposed that thes e texts be approved by the General Council when it
adopts the Report.  When the Decision is adopte d, the Protocol of Acces sion would be open for
acceptance by Armenia, which would become a Member thirty days after it accepts the said Protocol.
The Working Party agreed, therefore, that it had completed its work concerning the negotiations for
the accession of Armenia to the Agreement Establishing the WTO.
[to be completed]WT/ACC/SPEC/ARM/1/Rev.6
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APPENDIX
ACCESSION OF ARMENIA
Draft Decision
Decision of [date of decision]
The General Council,
Having regard to paragraph 2 of Article XII and paragraph 1 of Article IX of the
Marrakesh Agreement Establishing the World  Trade Organization (the “WTO Agreement”),
and the Decision-Making Procedures under Articles IX and XII of the WTO Agreement agreedby the General Council (WT/L/93);
Conducting  the functions of the Ministerial Conference in the interval between meetings
pursuant to paragraph 2 of Article IV of the WTO Agreement;
Noting  the results of the negotiations directed toward the establishment of the terms of
accession of Armenia to the WTO Agreement and having prepared a Protocol for the Accession
of Armenia (WT/ACC/ARM/…).
Decides  as follows:
1. Armenia may accede to the WTO Agreement on  the terms and conditions set out in the
Protocol annexed to this decision.
Having regard to the results of the negotiations  directed towards the accession of Armenia to the
Marrakesh Agreement Establishing the World Trade Organization and having pr epared a Protocol for
the Accession of Armenia.
              Decide, in accordance with Article XII of the Marrakesh Agreement Establishing the World
Trade Organization, that Armenia may accede to the Marrakesh Agreement Establishing the World
Trade Organization on the terms set out in the said Protocol.WT/ACC/SPEC/ARM/1/Rev.6
Page 92
PROTOCOL FOR THE ACCESSION OF ARMENIA TO THE
MARRAKESH AGREEMENT ESTABLISHING THE WORLD TRADE ORGANIZATION
DRAFT
The World Trade Organization (hereinafter referred to as the "WTO"), pursuant to the approval
of the General Council of the WTO accorded under Article XII of the Marrakesh Agreement
Establishing the World Trade Organization (hereinafter  referred to as the "WTO Agreement"), and the
Government of Armenia, (hereina fter referred to as "Armenia"),
Taking note of the Report of the Working Pa rty on the Accession of Armenia to the WTO
Agreement in document ...  (hereinafter referred to as the "Working Party Report"),
Having regard to the results of the negotiations on the Accession of Armenia to the WTO,Agree as follows:
Part I -  General
1. Upon entry into force of this Protocol, Ar menia 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 Armenia 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 Protocol.  This Protoc ol, which shall include the commitments referred to in
paragraph 156 of the Working Party Report (docum ent WT/ACC/ARM/1/Rev.3), shall be an integral
part of the WTO Agreement.
3. Except as otherwise provided for in the paragr aphs referred to in paragraph 156 of the Working
Party Report, those obligations in the Multilatera l Trade Agreements annexed to the WTO Agreement
that are to be implemented over a period of time star ting with the entry into force of that Agreement
shall be implemented by Armenia as if it had accepted that Agreement on the date of its entry into force.
4. Armenia may maintain a measure inconsistent with paragraph 1 of Article II of the GATS
provided that such a measure is recorded in the list of Article II Exemptions annexed to this Protocol and
meets the conditions of the Annex to  the GATS on Article II Exemptions.WT/ACC/SPEC/ARM/1/Rev.6
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Part II - Schedules
5. 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 Comm itments annexed to the General Agreement on
Trade in Services (hereinafter referred to as " GATS") relating to Armenia.  The staging of the
concessions and commitments listed in the Schedules shall be implemented as specified in the relevant
parts of the respective Schedules.
6. 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
7. This Protocol shall be open for acceptance, by signature or otherwise, by Armenia until ...8. This Protocol shall enter into force on the thirtieth day following the day upon which it shall
have been accepted by Armenia.
9. This Protocol shall be deposited with the Dire ctor-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
Armenia thereto pursuant to paragraph 8 to  each Member of the WTO and to Armenia.
10. This Protocol shall be registered in accordance  with the provisions of Article 102 of the Charter
of the United Nations.
Done at Geneva this .... da y of .... two thousand and one ..., in a single copy in the English,
French and Spanish languages, each text being authentic.WT/ACC/SPEC/ARM/1/Rev.6
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ANNEX I
SCHEDULE ...  - ARMENIA
Part I - Goods
To be circulated in document ... .
Part II - Services
To be circulated in document ... .
[to be completed]
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