Tbilisi, Georgia, May, 2004
Tbilisi, Georgia, May, 2004
Armenia Armenia Present Situation as Present Situation as Experienced by Traders Experienced by Traders
Armenia Armenia Present Situation as Present Situation as Experienced by Traders Experienced by Traders
Foreign Trade Statistics
Year* Export( $ million)
Import($ million)
1999 231.67 811.2
2000 300.5 884.7
2001 341.8 877.4
2002 505.2 987.15
2003 678.1 1269.4
0
5
10
15
20
25
30
35
40
2000 2001 2002 2003
EUCIS
Export Structure (in % to total Export)
*Source of Data: State Statistics Department of the RA
Charts represent specific weights of individual countries in the export volume to CIS and EU countries in 2003
Trade Regime with Foreign Countries Trade Regime with Foreign Countries
FOREIGN TRADE REGIMEFOREIGN TRADE REGIME
FREE TRADEFREE TRADE MFNMFN GSPGSP
UEUE USAUSA JAPANJAPANCANADACANADA
Armenia has FTA with almost all CIS countries MFN: European Union India
USA Argentina Lebanon Bulgaria Canada Romania China Syria Switzerland Iran Vietnam
Export & Import Procedures
N-1779 Government Decree on 21st November, 2003 for export/import controls
To conduct import-export activities enterprises must be registered in a respective regional customs house as an entity involved in foreign economic activity
According to the customs procedures, the following
documents are required for customs clearance for all
imports and exports:• an invoice• a contract• consignment documents• a certificate on the country of origin (if an importer or exporter
asks for preferential treatment)
Export Cases: Contracts and Transportation
Apricots Textile Copper-molyb.
Contract Basic Data
Export accomplished by both natural and juridical persons
Ex works Ex works, contract cost based on Treatment Charge
Transportation Route
Lorries: Ararat valley (AV)-Bagratashen (B)-Larsi-North Caucuses. (2 days) Refrig. Cont.: AV-B-Poti-Novorosiysk-RF Airtransport: Europe & USA
Yerevan-Poti-Burgas-final destination (22-30 days)
Containers: Ayrum-Poti—Novorossiysk-Europe, South Korea
Wagons: Ayrum-Poti-Ilichevsk- railway- final destination Total transportation time: 22-30 days
Export Cases: Customs & Taxes
Apricots Textiles Copper-molibd.
Customs Procedures
No pre-declaration for natural persons, inspection lasts several minutes.
Temporary admission of materials –re-export of final product (change of customs code)
Predeclaration-1 day Shipment/Inspection-5-6 days
Declaration-1 day
Certificates Certificate for origin is required for judicial persons.
Phitosanitary Certificate
Approval from the Ministry of T& ED
Certificate of Origin
Certificate of Origin Certificate of conformity
Taxes Export is duty free and VAT exempted
Export is duty free
and VAT exempted Export is duty free
and VAT exempted
Import Cases: Contracts and Transportation
Pharmaceuticals Tobacco Candies
Contract Basic Data
CIP Yerevan & transport cost;
LC
CIP Yerevan; LC CIP Yerevan; LC
Transportation Route
By air, from European countries
Åurope-Poti-YerevanContainers
By air from different countries and
by land via Poti
Import Cases:Customs & Taxes
Pharmaceuticals Tabacco Candies
Customs Procedures
Customs clearance: 1,5-2 days
Pre-declaration
Declaration
Declaration of excise stamps
Customs clearance: 2 days
Certificates Certificate of Conformity (5-7 days)
Certificate of Origin Certificate of Conformity
Certificate of Origin
Certificate of
Conformity Taxes 0 customs duties, 20
% VATFixed tax: VAT, Excise tax and customs duties per 1000 unit
If from CIS countries-0% customs duty and 20 % VAT
Otherwise, 10% customs duty and 20% VAT
Conclusions: General Constraints Regulatory areas
- 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 90.0
Taxes and taxadministration/regulation
Infrastructure
Policy instability/uncertainty
Corruption
Complexity, non-transparencyof government policies
Price instability/inflation
Customs/foreign traderegulations
% of dissatisfied respondents
2000200120022003
Regulatory area/2003 % Average Rating*
Taxes and Tax Administration
83.6 3.26
High Tax Rate 59.4 2.70
Infrastructure 74.0 2.95
Customs 27.3 1.43
Sanitary Regulations 16.4 1.47
Standards and Certification
16.3 1.38*1 stands for no obstacle, 4-major obstacle: “Regulatory and Administrative Costs in Armenia/2003” FIAS Report
CONCLUSIONS:IMPORT There is no problem in partner identification
and contract conclusion
Artificial complications imposed by Customs-2,5 points
Excessive paperwork (procedures for obtaining necessary certificates for agricultural products, where two overlapping lists exist, in order to avoid putting additional documentary burden on traders)- 2.24 points
Explicit or implicit requirement to give bribes-2.16 points
On average, the process of import customs clearance lasts 4.8 days taking 2.4 person-days of management time and 4.3 person-days of staff time
Application of transaction value method as a
primary method for the valuation of goods imported
Very high transportation costs
EXPORT
There is no problem in partner identification and contract conclusion
Artificial complications imposed by Customs-2.57 points
Excessive paperwork -2.40 points
Explicit or implicit requirement to give bribes- 2.30 points
On average, the process of export customs clearance lasts 7 days taking 2.3 person-days of management time and 2.8 person-days of staff time
47.2% of export firms are eligible for VAT refund, which leads to excessive time lost
There are certain complications in obtaining Certificate of Origin (Form A)
Very high transportation costs
Tbilisi, Georgia, May, 2004
Tbilisi, Georgia, May, 2004
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