Implementation of WTO TFA in Central Asia and opportunities from e-commerce and paperless

trade

Prepared by Edil KalashevYerevan, June 12, 2019

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● Population over 72 mln. people (2017)

● Regional GDP in 2017 around 276 bln. USD*

● Major trading partners are EAEU, Peoples` Republic of China, EU, CIS Member States

● Tajikistan, Kazakhstan, Kyrgyzstan are WTO Members

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Doing Business Report (2018), the time needed for export/import documentary compliance (hours)

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Country Export Import

Kazakhstan 128 6

Kyrgyzstan 36 36

Uzbekistan 174 174

Tajikistan 126 126

Turkmenistan N/A N/A

Governments of Kazakhstan, Kyrgyzstan , Tajikistan took commitments to implement WTO Trade Facilitation Agreement as developing countries:

Category ACategory B Category C

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Kyrgyz Republic`s commitments on TFA Agreement (category A), notified to WTO

KG (Date of accession to the TFA 6 December 2016)Article 4: All provisions (procedures for Appeal and Review)Article 5: Paragraph 2 (Detention)Article 9: (Movement of Goods Intended for Import under Customs ControlArticle 10: Paragraph 5 (Preshipment Inspection)Article 11: Paragraphs 1 to 4 (Transit Charges, Regulations, Formalities and Non-Discrimination

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Kyrgyz Republic`s commitments on TFA Agreement (category B), notified to WTO

Article 2.2 Opportunity to Comment, Information before Entry into Force and ConsultationsArticle 7.8 “Release and Clearance of Goods” Article 7.9 “Release and Clearance of Goods” Article 10.8 Formalities connected with importation, exportation and transitArticle 11.15 Freedom of TransitArticle 12.1 Customs CooperationArticles 12.8-12.10 Customs CooperationArticle 12.11 Customs Cooperation

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Kyrgyz Republic`s commitments on TFA Agreement (category C), notified to WTO (1)

Article 1.1 – 1.3 “Publication and Availability of Information”Article 2.1 “Opportunity to Comment, Information before Entry into Force and Consultations”Article 3 “Advance Rulings”Article 5.1 “Other Measures to Enhance Impartiality, Non-Discrimination and Transparency”Article 5.3 “Other Measures to Enhance Impartiality, Non-Discrimination and Transparency” Article 6.1-6.2 “Disciplines on Fees and Charges Imposed on or in Connection with Importation and Exportation and Penalties”Article 7.1 -7.1 “Release and Clearance of Goods” Article 8.1-8.2 “Border Agency Cooperation”Article 10.1 – 10.4 “Formalities connected with importation, exportation and transit”Article 10.6 “Formalities connected with importation, exportation and transit”Article 10.7 “Formalities connected with importation, exportation and transit”

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Kyrgyz Republic`s commitments on TFA Agreement (category C), notified to WTO (2)

Article 10.9 Formalities connected with importation, exportation and transitArticle 11.5 – 11.14 Freedom of Transit Article 11.16 – 11.17 Freedom of Transit Article 12.2 – 12.7 Customs CooperationArticle 12.19 Customs Cooperation

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Republic of Kazakhstan`s commitments on TFA Agreement (category A), notified to WTO (1)

Date of accession to the TFA 26 May 2016Article 2: Opportunity to Comment, Information before Entry into Force and ConsultationsArticle 2.1Article 4: All provisions (procedures for Appeal and Review)Article 5: paragraph 1 “Notification for Enhanced Controls or Inspections”paragraph 2 “Detention”paragraph 3 “Test Procedures”

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Republic of Kazakhstan`s commitments on TFA Agreement (category A), notified to WTO (2)

Article 6: paragraph 1 “General Disciplines on Fees and Charges Imposed on or in Connection with Importation and Exportation”Paragraph 2 ”Specific disciplines on Fees and Charges for Customs Processing Imposed on or in Connection with Importation and Exportation”Paragraph 3 “Penalty Disciplines”Article 7, paragraph 1 Pre-arrival ProcessingParagraph 3 “Separation of Release from Final Determination of Customs Duties, Taxes, Fees and Charges”Paragraph 4 “Risk Management”Paragraph 5 “Post –clearance Audit”Paragraph 9 “Perishable Goods”Article 8: “Border Agency Cooperation”Article 9: “Movement of goods intended for import under customs control”

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Republic of Kazakhstan`s commitments on TFA Agreement (category A), notified to WTO (3)

Article 10: “Formalities connected with importation, exportation and transit”Paragraph 1 “Formalities and Documentation Requirements”Paragraph 2 “Acceptance of Copies” Paragraph 5 “Preshipment Inspection”Paragraph 6 “Use of Customs Brokers”Paragraph 7 “Common Border Procedures and Uniform Documentation Requirements”Paragraph 8 “Rejected Goods”Paragraph 9 “Temporary Admission of Goods and Inward and Outward Processing”

Article 11: “Freedom of transit” Paragraphs 1 to 4Paragraphs 6 to 12Paragraphs 14 to 16

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Republic of Kazakhstan`s commitments on TFA Agreement (categories B and C), notified to the WTO

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Category B (period of implementation until 2023 or to be modified)Articles 1.1, 1.2, 1.4 “Publication and Availability of Information”Article 2.2 “Opportunity to Comment, Information before Entry into Force and Consultations”Articles 7.2, 7.7 “Release and Clearance of Goods”

Category C (period of implementation until 2023 or to be modified)Article 1.3 “Enquiry points”, “Publication and Availability of Information”)Articles 7.6, 7.8 “Release and Clearance of Goods”Articles 10 .3, 10.4 (“Use of International Standards, Single Window, Formalities Connected with Importation, Exportation and Transit”)Articles 11.5, 11.13, 11.17 “Freedom of Transit”Article 12 “Customs Cooperation”

Republic of Tajikistan`s commitments on TFA Agreement (category A), notified to

WTO (1)Article 1 “Publication and Availability of Information”Paragraph 1 “Publication” Paragraph 2 “Information Available Through Internet”Article 4 All provisions “Procedures for Appeal and Review”Article 5 “Preshipment Inspection”Paragraph 2 “Detention” Paragraph 3 “Test Procedures” Article 6 All provisions “Use of Customs Brokers”

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Republic of Tajikistan`s commitments on TFA Agreement (category A), notified to WTO (2)

Article 7 “Release and Clearance of Goods”Paragraph 1 “Pre-arrival Processing” Paragraph 3 “Separation of Release from Final Determination of Customs Duties, Taxes, Fees and Charges” Paragraph 4 “Risk Management” Paragraph 5 “Post-clearance Audit” Paragraph 6 “Establishment and Publication of Average Release Times” Paragraph 8 “Expedited Shipments” Paragraph 9 “Perishable Goods”

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Republic of Tajikistan`s commitments on TFA Agreement (category A), notified to WTO (3)

Article 8, Item 1 “Border Agency Cooperation”Article 9 All provisions “Movement of goods intended for import under customs control”Article 10 “Formalities connected with importation, exportation and transit”Paragraph 1 Formalities and Documentation Requirements Paragraph 2 Acceptance of Copies Paragraph 3 Use of International Standards Paragraph 5 Pre-shipment Inspection Paragraph 6 Use of Customs Brokers Paragraph 7 Common Border Procedures and Uniform Documentation Requirements Paragraph 8 Rejected Goods Paragraph 9 Temporary Admission of Goods/Inward and Outward Processing Article 11 All provisions “Freedom of Transit”

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Republic of Tajikistan`s commitments on TFA Agreement (Categories B and C), yet to be notified to WTO

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Rate of Implementation of Category A by Kazakhstan, Tajikistan and Kyrgyz

Republic (as at 05/2019)*

Kazakhstan 44.1%Tajikistan 53.8%

Kyrgyz Republic 12.2%

* Data provided by the WTO Secretariat

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Rate of Implementation of Category B and C by Kazakhstan, Tajikistan and

Kyrgyz Republic (as at 05/2019)*

Kazakhstan: Cat B 23.5 % Cat C 32.4 %Tajikistan: Cat B 0 % Cat C 0%Kyrgyz Republic: Cat B 16.4 % Cat C 71.4%

* Data provided by the WTO Secretariat

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TFA requires strong coordination between ministries/agencies on the national level

Leading government agenciesin Tajikistan Ministry of Economic Development and Trade

in Kazakhstan the National Committee on Trade Facilitation chaired by Vice Prime Minister

in the Kyrgyz Republic the Ministry of Economy

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Recent data on TFA implementation (key observations)

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KyrgyzstanSix Working Groups established 1. Considers draft decisions by EEC and sublaws to implement national law

on “Customs Regulation”2. It covers issues on publication, information availability, “single window”,

acceptance of copies3. Customs procedures, advance rulings, e-payments, AEO, use of brokers4. Risk management systems, notification and transparency5. Fees and formalities at the border, coordination issues, general border

procedures, rejections at the border6. Freedom of transit, visa related issues, transport permissions

Recent data on TFA implementation (key observations)

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Kyrgyzstan

- Membership in the Eurasian Economic Union (EAEU)

- Long process of commenting proposals, moderate to low pace of work of several Working Groups

- Lack of centralized automation system to collect, process, distribute information related to export/import (Single Window)

Expectations if three countries implement all provisions they have

committed to WTO TFA has 36 policy measures to facilitate international trade

Kazakhstan took commitments on 21 measures (30% of total under the Agreement) under Category A 25 (almost 60%), and 14 measures (40%) under Category B and C

Kyrgyz Republic took commitment on 36 measuresCategory A 7 , Category B 6, Category C 26

Tajikistan took commitments on Category A 26 measures set out in the TF Agreement

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Problems and potential- Governments are trying to implement commitments but donors` assistance critically needed- Intra-regional/ international trade can spark when provisions of TFA are implemented- Additional impetus if Uzbekistan joins the WTO

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Opportunities from/for e-commerce and paperless trade

* Electronic commerce is growing in all the countries of the region.

* National law enforced in Kazakhstan, Uzbekistan

* In the Kyrgyz Republic draft law on “E-commerce” has been prepared, need to be adopted. Statistics not

available

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Kazakhstan`s experience

E-trade value around 708 mln. USD in 2018 vs 460 mln. USD in 2017E-trade platform has developed infrastructure, e.g. B2C provider www.chocolife.me

The law on “E-commerce” enforced in 2004

Comparing with other Central Asian countries Kazakhstan is well advanced

Online document registration, preparation, issue by government services

The work underway to connect government agencies involved in the process of export/import

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E-commerce and paperless trade in Kyrgyzstan

E-commerce continue to remain weak although the number and value of e-transactions grow

Cash based transactions remain high

Government`s attempt to improve situation. 2019 is declared the Year of Regional Development and Digitalization in the country

Concept paper on digitalization in 2019-2023 is discussed since November 2018

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Opportunities from E-commerce and paperless trade (Uzbekistan)

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Decree of the President of Uzbekistan “On improving the activity of state customs service of the Republic of Uzbekistan” No.5414 of April 12, 2018. The government is in charge to implement a “Single Window” information system to allow for ease of processing of licenses, certificates, etc.

Veterinary service, plant quarantine, Investments and Foreign Trade Ministry not yet e-connected to the National Single Window System.

Full paperless trade is estimated to start in 2021

To summarize

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TFA Implementation by three countries in the region

E-commerce and paperless trade impact

Improved trade relations between themselves and rest of the world

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THANK YOU!