International Economic Relations by chenmeixiu

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									         Uzbekistan: Trade and Trade Facilitation Review*




               Governance, Finance and Trade Division
                 East and Central Asia Department




                                    March 2003



*
  Prepared by Musleh-ud Din, Consultant, ECGF. The views expressed in this paper are the
views of the author and do not necessarily reflect the views or policies of the Asian
Development Bank (ADB), or its Boards of Directors or the governments they represent. ADB
makes no representation concerning and does not guarantee the source, originality,
accuracy, completeness or reliability of any statement; information, data, finding,
interpretation, advice, opinion, or view presented.
EXECUTIVE SUMMARY                                                                 4
I.          INTRODUCTION                                                         8
            A.   History and Politics                                            8
            B.   The Economy                                                     8
       1.    Size and Structural Features                                         8
       2.    The Macroeconomic Environment                                        9
       3.    Economic Growth                                                     10
       4.    The External Sector                                                 11
       5.    Policy Developments                                                 12
       6.    Outlook                                                             14
II.         TRADE AND TRADE FACILITATION: AN OVERVIEW                            15
            A.   Trade Performance                                               15
       1.    Trends in Exports and Imports                                       15
       2.    Composition of Exports                                              16
       3.    Composition of Imports                                              16
       4.    Direction of Trade                                                  17
       5.    Composition of Trade with Major Trading Partners                    18
       6.    Geographical Distribution of Foreign Trade                          19
            B.     Potential for Future Growth in Exports                        21
            C.     Trade Facilitation                                            22
       1.    Hard Infrastructure                                                 22
       2.    Soft Trade Infrastructure: The Customs                              23
III.        TRADE POLICY FRAMEWORK                                               26
            A.   The Constitutional and Legal Context                            26
       1.    The Executive Authority                                             26
       2.    The Cabinet of Ministers                                            26
       3.    The Parliament                                                      26
       4.    The Judiciary                                                       27
            B.     Trade Policy Formulation                                      27
            C.     Trade Laws and Regulations                                    28
       1.    Import Regulations                                                  28
       2.    Export Regulations                                                  33
       3.    Trade in Services                                                   35
       4.    Other Policies affecting Foreign Trade                              36
            D.     Trade Agreements                                              40
       1.    Bilateral and Multilateral Agreements                               40
       2.    Economic Integration, Customs Union and Free Trade Agreements       41
            E.     Exchange Rate Policy                                          43
            F.     An Assessment of the Trade Policy Framework                   44
            G.     Stability of Policy Environment                               45
IV.         KEY OBSTACLES TO TRADE                                               46
            A.   Transportation Bottlenecks                                      46
            B.   Regulatory and Procedural Barriers to Trade                     47
       1.    Import Contract Registration System                                 47
       2.    Domestic Taxes                                                      48
       3.    Technical Barriers                                                  48
       4.    Discrimination against Consumer Goods                               48
       5.    Export Prohibitions                                                 48
       6.    State Trading                                                       48
       7.    Hard Currency Surrender Requirements                                49
            C.     Customs Related Issues                                        49




                                                                             2
V.        AREAS FOR TRADE FACILITATION AND REGIONAL COOPERATION       51
          A.   Trade Facilitation                                     51
     1.    Trade Policy Reforms                                        51
     2.    Exchange Rate Reforms                                       51
     3.    Private Sector                                              52
     4.    Governance Issues                                           52
     5.    Infrastructure                                              53
          B.     Regional Cooperation                                 53
     APPENDIX A                                                        54
     APPENDIX B                                                        68
     APPENDIX C                                                        99
     APPENDIX D                                                       101
     BIBLIOGRAPHY                                                     111




                                                                  3
EXECUTIVE SUMMARY

1.      Uzbekistan is endowed with a rich natural resource base comprising chiefly of
oil, gas and gold. While agriculture is the dominant commodity producing sector,
Uzbekistan has many heavy industries, the most important of which are gas and fuel
industry, electric power generation, chemical industry, gold mining, ferrous and non-
ferrous metullergy, machine building, and textiles. In addition, industrial facilities
produce air planes, cars, and passenger and freight vehicles. The predominant light
industries are primary processing of cotton, wool and silk, food processing, footwear,
and furniture. Despite economic dislocation in its early years of inception, the
economy has managed to post a respectable growth in recent years.

2.     On the macroeconomic front, the government has strived to achieve
macroeconomic stability by promoting domestic investment and savings, controlling
the rate of inflation and monetary expansion, and curtailing the budgetary deficit.
Gross domestic investment stood at 20.2 percent of GDP in 2001, up from 15.1
percent in 1995. The substantial gap between domestic investment and savings has
narrowed as reflected by the fact that the ratio of gross domestic savings to GDP
more than doubled from 7.9 percent in 1996 to 16.5 percent in 2000.

3.       Despite a declining trend in total trade (exports plus imports), foreign trade
continues to play a key role in the economy: total trade constituted 41.3 percent of
GDP in 2001. Major export commodities include cotton, gold, natural gas, mineral
fertilizers, ferrous metals, textiles and food products. The dominance of cotton and
gold in the country’s export basket has rendered the country’s exports particularly
vulnerable to fluctuations in commodity prices as well as to adverse weather
conditions. Leading imports are machinery and equipment, chemicals and food
stuffs. Bulk of Uzbekistan’s foreign trade takes place with the former Soviet Union
States.

4.       The overall economic policy stance is based on the principle of a gradual
transition to a market-oriented economy while ensuring social and political stability.
While Uzbekistan has made some progress in implementing its economic reform
program, it has failed to undertake radical steps to transform the economy. In
particular, much of the economy remains in state hands, the process of privatization
is slow, and the government pursues an import substitution policy by controlling
access to foreign exchange. Uzbekistan’s slow pace of reforms coupled with its
failure to move toward convertibility of the soum have undermined its relations with
the donors especially the IMF.

5.      Key obstacles to trade facilitation include transportation bottlenecks, a strict
foreign trade regime, exchange controls, and cumbersome customs procedures. The
government uses an import contract registration system to enforce Uzbekistan's
import substitution development strategy and lower overall imports. The system aims
to ensure that scarce foreign currency is used primarily to import capital rather than
consumer goods. An application for import contract registration may be refused on a
variety of pretexts. The government has followed a restrictive foreign exchange
regime since 1996. The multiple currency practices and surrender requirements for
export proceeds at the over-valued exchange rate have hampered foreign trade.

6.    While tariffs have generally been reduced in Uzbekistan, high excise taxes
form an effective barrier to the legal importation of certain goods. The excise tax
schedule discriminates against imports of goods subject to the tax. For example,



                                                                                      4
imported liquor is subject to an excise tax of 90 percent, whereas the rate for
domestically produced spirits ranges from 40 percent to 65 percent.

7.     Goods imported into Uzbekistan must comply with a host of technical,
pharmacological, sanitary, veterinary, and ecological standards and requirements.
The certification requirements impose compliance costs on importers and lead to
delays in the completion of import contracts.

8.      The government seeks to limit imports of consumer goods, and instead
channel foreign exchange resources into import of high technology and capital goods
through a system of multiple exchange rates. Recently, the government has further
tightened the restrictions on imports of consumer goods. Effective August 1, 2002,
the import of non-food consumer goods by enterprises is subject to an additional fee
of 30 percent of the customs value in hard currency, in addition to VAT, customs
duty, and excise tax. Sale of all consumer goods by individuals must be
accompanied by documents showing their registration, and the goods are subject to
confiscation in the absence of such documentation. Effective July 1, 2002, import of
non-food consumer goods by individuals is subject to a single customs duty
(replacing VAT and customs duty) of 90 percent of the customs value of the goods.
The single customs duty is payable in hard currency effective August 1, 2002.

9.      The authorities prohibit the export of a variety of commodities including
grains; flour and cereals; cattle and poultry; meat and meat by-products; powdered
milk; tea and tea leaves; sugar; ethyl alcohol; antiques; vegetable oils; leather skins;
silkworms; raw silk and silk waste; and wastes of colored metals. In addition to
outright prohibition, exports of arms and military equipment, precious metals and
stones, radio-active substances, and audio-video products are regulated through the
system of export licensing.

10.     Exports of cotton, energy, black and colored metals and grain are handled by
the government through a system of centralized exports. Hard currency proceeds
from centralized exports must be surrendered at the official exchange rate, which is
lower than both the foreign exchange bureau rate and the curb market rate. Effective
January 1, 1999, 50 percent of export proceeds from decentralized exports must also
be surrendered at the official rate. The over-valued official exchange rate in
combination with the export surrender requirements have reduced production
incentives for traditional exports (cotton and gold), hindered the development of non-
traditional exports, and eroded the competitiveness of Uzbekistan’s exports in the
world market.

11.     The process of customs clearance is riddled with bureaucratic complexities
leading to delays in customs clearance. Even capital equipment imports for U.S.
Uzbek joint ventures are subject to substantial processing delays and often remain in
customs for two to three months, leading to high storage costs. As a matter of fact, all
imports are affected by the delays, particularly in the absence of any procedure for
releasing goods under bond. To circumvent these problems, many firms contract for
pre-shipment inspection (PSI), which does reduce customs clearance delays.
Arbitrary seizures of goods by the customs authorities have also been observed.
Frequent changes in customs procedures and documentation are reported by
forwarders.

12.     Clearance of many imported items including perishable commodities is
delayed owing to a host of certification requirements for technical standards including
phytosanitary tests. The problem is further compounded by the routine rejection of
foreign certifications of conformity to technical standards. In the process of examining


                                                                                      5
the goods subject to technical standards, customs officials reportedly take excess
test samples for their own consumption.

13.    Excessive documentation requirements make the customs clearance a costly
and time-consuming process. As many as 10 different documents, issued by various
departments and ministries, are required for clearance of a typical import
consignment. In the absence of both a system of pre-arrival clearing, and systematic
risk analysis, customs clearance is only possible after physical inspection of the
consignment.

14.      The regulatory framework for customs and inspections between different
Central Asian countries is not uniform. One example is a wooden packaging frame
that is accepted by the Uzbek authorities, but not by Kazakh and Russian authorities.
The software used in the customs is not compatible with internationally used
software, nor is it compatible with that of other FSU countries.

15.    The following trade policy reforms are essential to create a freer trade
environment.

   •   Import contract registration system is a major impediment to imports, and thus
       needs to be dismantled.
   •   While tariffs have generally been reduced, Uzbekistan continues to impose
       high tariffs on imports from non-MFN countries. Presently, only 38 countries
       enjoy the MFN status. For a genuine reduction in tariffs, Uzbekistan needs to
       broaden the list of MFN countries.
   •   The discriminatory domestic taxes on imports need to be abolished to create
       a level playing field both for imports and domestically produced goods.
   •   The application of arbitrary technical standards has acted as a severe
       constraint on imports. Technical standards need to be brought in line with
       internationally accepted norms. Also procedures for determining conformity
       with the technical standards need to be streamlined.
   •   Prohibitions on export of a number of commodities need to lifted, as these
       have distorted economic incentives especially for agricultural producers.
   •   A large part of Uzbekistan’s foreign trade is conducted by the state sector.
       The domination of state trading crowds out the private sector, and
       discourages traditional exports through implicit taxation. The system of
       centralized exports needs to be phased out to encourage the traditional
       exports including cotton and gold.

16.     Currency convertibility is a pre-requisite for a liberal trade regime. However,
pending full convertibility, some measures can be adopted to put in place an
exchange rate system that is supportive of a liberal trade environment. In particular,
the government needs to unify the exchange rates and reduce the spread between
the official rate and the curb market rate by lowering intervention in the foreign
exchange market.

17.     The development of the private sector has been marred by a number of
factors including pervasive intervention of the government in economic activities,
slow pace of privatization, and a restrictive business environment. The following
measures are suggested for promoting and enhancing the role of the private sector in
the economy:

   •   The production of cotton and wheat is subject to the state order system. This
       system has severely distorted economic incentives. The pricing and



                                                                                     6
       marketing system for wheat and cotton needs to be decentralized to improve
       economic incentives and encourage a more active participation of the private
       sector in these activities.
   •   The involvement of the public sector in a wide range of economic activities
       has crowded out the private sector. Competition in many sectors remains
       limited owing to the dominance of large state-owned enterprises. The role of
       the public sector needs to be curtailed in order to promote private enterprises.
   •   Private enterprises face a number of bureaucratic hurdles. The process for
       registration and licensing of enterprises is cumbersome and thus hinders the
       establishment of private enterprises. The authorities need to simplify and
       streamline the procedures for the establishment of private entities.
   •   In view of the large state-owned sector, privatization is the key to foster the
       development of the private sector. However, private investors are unlikely to
       take much interest in the privatization program unless an enabling
       environment for private business is created.

18.     There is a clear need to improve the predictability and transparency of the
regulatory system in general and trade policy framework in particular. In this respect,
the government needs to ensure policy consistency by defining clear objectives,
identifying appropriate policy instruments, and streamlining the legal and regulatory
system, all in consultation with key stakeholders. A predictable and transparent
regulatory environment will not only foster investment and economic growth, but also
eliminate the rent-seeking activities of vested interests that tend to benefit from the
existing distortions in the economy.

19.    While Uzbekistan inherited relatively good infrastructure from the Soviet
Union, most of it needs further development and modernization. Since Uzbekistan
has no direct access to a sea port, the transportation cost for international freight is
high. More attention needs to be focused on operationalizing the closest route to the
sea through Afghanistan to Pakistan. This will promote international trade by
reducing the transportation costs.

20.    Like Uzbekistan, many countries in the Central Asian region are land-locked
and hence depend critically on each other for their external trade. In this scenario,
regional economic integration and cooperation can play a vital role in economic
development of the Central Asian countries through promoting international trade and
investment in the region.

21.     To promote regional economic cooperation in Central Asia, the regional
countries need to adopt a coherent strategy to harmonize their trade regimes,
focusing in particular on transport and transit systems, and customs procedures. The
lack of uniformity in freight regulations and transit procedures is detrimental to the
smooth flow of commodities across international borders. For instance, permitted
axle loads in Kazakhstan are lower than in Uzbekistan. Consequently, the Uzbek
trade through Kazakhstan is adversely affected because of fines and illegal
payments that are levied because of high axle loads. The adoption of common freight
rules and transit procedures would greatly help in facilitating international trade of the
regional countries. Another area that ought to be high on the agenda for regional
cooperation initiatives is Customs. Customs posts in each country follow different
customs procedures, resulting in costly delays in international shipments. A uniform
customs regime can go a long way in promoting international trade of the Central
Asian countries.




                                                                                        7
                                I.   INTRODUCTION

       A. History and Politics

22.     Uzbekistan, a doubly land locked state lying at the heart of geographic and
cultural landscape of Central Asia, has a long and interesting heritage. During the
18th and 19th centuries, the region was ruled by the Khanates of Bukhara, Khiva and
Kokund. Russian interest in the region, dating back to the 18th century, grew in the
19th century when Russia managed to overthrow the region’s traditional rulers and
gained control of the whole of Central Asia. The Central Asian territories initially
backed the 1917 Bolshevik revolution, but the support soon turned to strong
opposition led by the nationalist movement, which eventually resulted in the
withdrawal of Soviet forces. However, despite armed resistance that continued into
the early 1920s, the Soviets regained control in September 1919. On 27 October
1924 the Uzbek Soviet Socialist Republic (UzSSR) was created, which formally
became part of the Union of Soviet Socialist Republics (USSR) in May 1925. Until
1991, Uzbekistan was one of the fifteen member republics of the Union of Soviet
Socialist Republics.

23.     The greater political freedom during the era of glasnost (openness) under the
leadership of Mikhail Gorbachev and the accompanying political events eventually
led to the independence of Uzbekistan in August 1991.

24.     Direct presidential elections were held on December 29 1991, which were
won by Mr. Islam Karimov, head of the People's Democratic Party of Uzbekistan. Mr.
Karimov won a referendum in 1995, which extended his tenure in office until 2000.
He was further re-elected in the January 2000 presidential election, and a
referendum in January 2002 extended the presidential term in office from five to
seven years. The government (Cabinet of Ministers) is subordinate to the president,
who appoints the prime minister and ministers subject to the approval of the
legislature.

25.     The Constitution of Uzbekistan, adopted on December 8 1992, upholds the
principles of freedom of speech, representative government, and judicial
independence. The highest legislative body is the Oliy Majlis (Parliament), a
unicameral Supreme Assembly represented by 250 deputies who are elected by a
popular vote for a five-year term. The highest judicial body is the Supreme Court.
Judges are nominated by the President and confirmed by the Oliy Majlis. Compared
to other countries in the region, Uzbekistan's political environment is generally
characterized as stable.

       B. The Economy

              1. Size and Structural Features

26.    With a population of 25 million, per capita GDP stood at UZS 150.1 thousand
in 2000, up from UZS 24.3 thousand in 1996. It is important to point out here that the
soum depreciated substantially vis-à-vis US dollar during the period. Consequently,
per-capita income, measured in dollar terms, fell from US$ 455 in 1996 to US$ 219 in
2000.

27.    Agriculture is the dominant commodity producing sector of the economy: the
share of agriculture in GDP increased from 32 percent in 1995 to 35 percent in 2001.
On the other hand, the share of industrial sector in GDP declined from 20 percent in



                                                                                    8
1995 to 16 percent in 2001. The share of services sector in GDP remained close to
50 percent during the period 1995-2001.

                          Table 1.1: Basic Economic Indicators

                                          1995    1996      1997     1998    1999     2000    2001
Nominal GDP (Billion Soum)                303     559       977      1359    2129     3256    4868
                               a
GDP Per Capita (Thousand Soum)            -       24.3      41.5     58.9    86.8     128.0   150.1
                          b
Nominal GDP (Million US$)                 -       10511     10310    9792    8175     5468    -
                      b
GDP Per Capita (US $)                     -       455       437      408     334      219     -
Sectoral Shares in GDP (%)
  Agriculture                             32      26        32       31      34       34      35
  Manufacturing                           20      21        18       17      17       16      16
  Services                                48      53        50       52      49       50      49
Source: Ministry of Macroeconomics and Statistics.
a: Pricewaterhouse Coopers: Uzbekistan: A Business and Investment guide 2002.
b: These figures are valued at weighted average exchange rate and are taken from the US Department of
Commerce: Uzbekistan Country Commercial Guide 2002.


28.      Uzbekistan has many heavy industries, the most important of which are gas
and fuel industry, electric power generation, chemical industry, gold mining, ferrous
and non-ferrous metullergy, machine building, and textiles. In addition, industrial
facilities produce air planes, cars, and passenger and freight vehicles. The
predominant light industries are primary processing of cotton, wool and silk, food
processing, footwear, and furniture. In 2001, food processing industry accounted for
20.6% of industrial output, followed by light industry (20.5%), fuel industry (12.9%),
metallurgy (12.1%), machines and metal works (10.5%), electricity generation
(8.0%), and chemical and petrochemicals (5.3%).

29.      The agricultural sector is dominated by the cotton crop. Uzbekistan is 4th
largest producer of cotton and its cotton exports account for about 40% of total export
earnings. Other agricultural products include wheat, rice, corn, barley, and a variety
of fruits and vegetables. Besides cotton, fruits and vegetables are an increasingly
important source of export income.

30.     Uzbekistan is endowed with a rich natural resource base comprising chiefly of
oil, gas and gold. According to recent estimates, the country has proven oil reserves
of 600 million barrels, amounting to 0.1% of world oil reserves. Uzbekistan ranks 14th
largest in the world in terms of its gas reserves, which are estimated at 1.87 trillion
cubic meters, equivalent to 1.3% of the world total. More than 160 oil and gas fields
have been discovered, and the annual production of oil and gas is enough to meet
the country’s energy requirements. Uzbekistan contains 4th largest reserves of gold
and is the world’s 7th largest producer. In addition, significant deposits of silver,
copper, lead, zinc, coal and uranium are also found.

                 2. The Macroeconomic Environment

31.    On the macroeconomic front, the government has strived to achieve
macroeconomic stability by promoting domestic investment and savings, controlling
the rate of inflation and monetary expansion, and curtailing the budgetary deficit.
Gross domestic investment stood at 20.2 percent of GDP in 2001, up from 15.1
percent in 1995. The substantial gap between domestic investment and savings has
narrowed as reflected by the fact that the ratio of gross domestic savings to GDP
more than doubled from 7.9 percent in 1996 to 16.5 percent in 2000.

32.     The authorities have managed to arrest the rate of inflation in recent years:
the rate of inflation fell from 64.3 percent in 1996 to 27.6 percent in 1997 and has


                                                                                                   9
stabilized at around 26 percent. Monetary growth has considerably slowed down
from 113.7 percent in 1996 to 16.4 percent in 2001. While the official unemployment
rate is reported to be around 0.5 percent of the labor force, the donor agencies and
independent analysts put the unemployment rate at about 5 percent. This is because
the official data on unemployment disguises considerable hidden unemployment in
state owned enterprises and in rural areas. State-owned enterprises and collective
farms often retain surplus employees to avoid massive layoffs and potential social
unrest. Furthermore, many unemployed people have not officially registered as such
because of low unemployment benefits. The government has achieved some fiscal
stability as the budget deficit has been brought down from 7.4 percent of GDP in
1996 to only 1 percent in 2001.

                          Table 1.2: Key Macroeconomic Indicators
                                          (Percent)

                                             1995        1996     1997     1998      1999      2000    2001
Gross Domestic Investment/GDP                            15.1     18.9     10.2      11.8      15.9    20.2
Gross Domestic Saving/GDP                                7.9      14.9     9.9       10.5      16.5    -
Inflation Rate                                           64.3     27.6     26.1      26.0      28.0    26.6
Growth in Money Supply (M2)                              113.7    36.0     28.0      31.5      17.1    16.4
Unemployment Ratea                                       0.4      0.4      0.5       0.5       0.5     -
Fiscal Balance/GDP                                       -7.4     -2.2     -3.4      -2.2      -1.0    -1.0
Source: Asian Development Bank: Asian Development Outlook 2002.
a: Pricewaterhouse Coopers: Uzbekistan: A Business and Investment Guide 2002.


                   3. Economic Growth

33.       In its early years of inception, the country experienced serious economic
difficulties owing to its separation from the rest of the Soviet Union. The economic
dislocation resulted in an immediate contraction of economic activity: on average,
during the period 1992-1996, GDP fell by 3.4 percent whereas agricultural and
industrial output declined by 1.8 percent and 2.6 percent respectively. After a modest
output growth in 1996 (1.6 percent), the economy exhibited an impressive recovery in
1997 with GDP growth at 5.2 percent. Value added in the agricultural sector grew by
5.8 percent, thanks mainly to a bumper cotton crop. The industrial output also
registered a healthy increase of 6.5 percent, due mainly to significant investments in
the textiles, electronics and auto sectors. The strong growth in the commodity
producing sectors was also helped by a respectable growth in merchandise exports.
The services sector grew at a hefty rate of 21.3 percent, which has been attributed to
the increase in service-oriented enterprises as a result of opening up of this sector for
private investment.

                                   Table 1.3: Economic Growth
                                             (Percent)
                                                     a
                                   Average 92-96           1996     1997     1998     1999      2000   2001
GDP                                -3.4                    1.6      5.2      4.4      4.4       4.0    4.5
                                       b
Value Added in Agriculture         -1.8                    -7.3     5.8      4.1      5.9       -      4.5
                                       b
Value Added in Industry            -2.6                    6.0      6.5      5.8      6.1       5.8    8.1
Value Added in Services            -                       9.9      21.3     9.5      12.6      13.0   14.2
Source: Asian Development Bank: Asian Development Outlook 2002.
a: Growth figures prior to 1996 are taken from IMF: Uzbekistan: Recent Economic Developments 1998.
b: Average pertains to 1993-1996.


34.    The growth momentum could not be maintained for long: the economy
experienced a deceleration in economic activity in 1998 with a growth rate of 4.4
percent. The slowdown was caused mainly by a poor cotton crop and the adverse


                                                                                                         10
external environment ─ the weak world commodity markets, the Asian financial crisis,
and the economic turmoil in Russia. In 1998 agricultural output grew by less than half
the 1997 rate, thanks to poor weather and lack of effective incentives which led to a
12 percent drop in the production of cotton, the country’s principal crop and export
commodity. The growth of industrial output also slowed in 1998, primarily due to the
fall in demand for Uzbekistan’s major industrial exports, gold and gas, and the
decline in their world prices. The service sector grew more slowly in 1998 than in
1997 as the government’s policy of restricting imports of consumer goods impeded
private trading activities.

35.     Despite the difficult macroeconomic environment and the fallout from the
Russian and Asian financial crises, real GDP grew by 4.4 percent in 1999 or the
same as the previous year. The agricultural sector did not experience adverse
weather as it did during 1996-1998, and hence witnessed an increase in the output of
a wide-range of agricultural commodities including cotton. Agricultural output
increased by 5.9 percent in 1999 as against 4.1 percent in 1998. However, weak
prices in international commodity markets for cotton and gold, the major export
commodities, reduced total export earnings. On the other hand, a restrictive foreign
trade regime contributed to a reduction in imports. Industrial production increased by
6.1 percent, and services by 12.6 percent, boosting overall economic growth.

36.    Though the economy almost achieved the official growth target of 4.2 percent
in 2000, both agriculture and industry registered slower rates of expansion. The
growth rate of agricultural output declined to 3.2 percent in 2000, from 5.9 percent in
1999, due mainly to a poor cotton harvest that was caused by drought. Industrial
output slowed slightly to 5.8% in 2000 from 6.1 percent in 1999, which was attributed
mainly to a lack of investment in the gold and energy sectors, drop in foreign
investment, and a decline in the production of machinery and equipment. The
services sector maintained its growth momentum (13% in 2000) as the sector
benefited from an expansion in a wide-range of private sector activities including
wholesale and retail trading, restaurants, bars, hotels, and taxi services.

37.    GDP growth of 4.5% in 2001, marginally higher than in 2000, reflected
reasonably strong growth in industrial output and in agriculture, despite continuing
drought conditions. The agricultural sector recovered after a poor performance in
2000, registering a growth rate of 4.5 percent in 2001. The recovery in agricultural
output was driven in large part by a nearly 10 percent increase in cotton yields.
Growth in industrial output accelerated to 8.1% in 2001 from 5.8% in 2000.
Production of automobiles surged, mainly as a result of better capacity utilization at
UzDaewoo Auto, a joint venture. Production of natural gas and ferrous metals also
rose, while output of oil and gas condensate decreased.

38.     Growth in the services sector accelerated to 14.2% in 2001 as against 13% in
2000, not least because of growing private activity spurred by small-scale
privatization in retail trading, restaurants, and information technology.

               4. The External Sector

39.    Despite a declining trend in total trade (exports plus imports), foreign trade
continues to play a key role in the economy: total trade constituted 41.3 percent of
GDP in 2001. In recent years, the country has witnessed a slide in its export
earnings (exports decreased from US$ 3695 million in 1997 to 2381 million in 2001),
which has been attributed to adverse external economic environment including Asian
and Russian financial crisis, weak commodity prices and poor cotton harvests owing
to recurring droughts. Thanks mainly to the import compression policy, imports


                                                                                    11
declined from US$ 3767 million in 1997 to US$ 2370 million in 2001. There has been
an improvement in the current account in recent years as indicated by a sharp
reduction in the current account deficit from 7.2 percent of GDP in 1996 to 0.5
percent in 2001. The economy is facing a mounting external debt burden: the
external debt climbed from 16.8 percent in 1996 to 39.7 percent in 2001. The
domestic currency, soum, has depreciated manifold against the US dollar: the yearly
average official exchange rate stood at UZS 421/US$ in 2001, up from UZS
40.2/US$ in 1996.

40.     Major export commodities include cotton, gold, natural gas, mineral fertilizers,
ferrous metals, textiles and food products. The dominance of cotton and gold in the
country’s export basket has rendered the country’s exports particularly vulnerable to
fluctuations in commodity prices as well as to adverse weather conditions. Leading
imports are machinery and equipment, chemicals and food stuffs.

                                Table 1.4: The External Sector

                                               1996      1997      1998      1999      2000     2001
                                                                                                       a
Merchandise Exports (Million US$)              3534      3695      3048      2777      2816     2381
                                               (1.7)     (4.5)     (-17.5)   (-8.9)    (1.4)    (-15.4)
                                                                                                       a
Merchandise Imports (Million US$)              4240      3768      2937      2586      2440     2370
                                               (31.0)    (-11.2)   (-22.0)   (-11.9)   (-5.7)   (-2.9)
Current Account Balance (Million US$)          -979      -585      -94       -164      184      -58
                  a
Exports/GDP (%)                                24.9      23.9      28.2      18.7      23.7     20.7
                 a
Imports/GDP (%)                                23.2      28.7      26.2      18.6      21.4     20.6
Current Account Balance/GDP (%)                -7.2      -4.0      -0.6      -1.3      0.8      -0.5
Foreign Direct Investment (Million US$)        55        285       140       121       100      -
External Debt Outstanding (Million             4163      4665      3467      4237      4449     4600
US$)
Official Exchage Rate (Soum/US$)               40.1      66.2      94.5      124.6     236.6    422.9
Source: Asian Development Bank: Asian Development Outlook 2002.
a: Ministry of Macroeconomics and Statistics.
Note: Figures in bracket are growth rates.


41.     Despite the potential for foreign investment in a variety of activities,
Uzbekistan has not been able to attract a significant amount of FDI, which averaged
just over 0.5 percent of GDP between 1992 and 19961. In recent years, the level of
FDI fell by more than half, from US$ 285 million in 1997 to US$ 100 million in 2000.
Most of the FDI has taken place in gold mining, automobiles, agricultural machinery,
tobacco, and textiles. Turkey and the United States are the largest foreign investors,
while South Korea, Indonesia, the United Kingdom, Germany and Japan are also
major contributors to FDI.

                   5. Policy Developments

                           a) Economic Reforms

42.      The overall economic policy stance is based on the principle of a gradual
transition to a market-oriented economy while ensuring social and political stability.
Soon after independence, the government tried to avert major economic dislocation
through continuation of state subsidies, strict price controls, and support to state
owned enterprises. While this approach initially enabled the government to contain
the economic damage resulting from the collapse of the Soviet Union, its
shortcomings became apparent in 1994 following Uzbekistan’s expulsion from the
Russian ruble zone. Confronted with myriad economic challenges, the government

1
    Pricewaterhouse Coopers (2002): Uzbekistan: A Business and Investment Guide.


                                                                                                    12
initiated a comprehensive economic reform program whose main elements included
stricter fiscal and monetary discipline, deregulation of prices, trade liberalization,
privatization, and openness to foreign investment. The government’s stated
commitment to these reforms attracted considerable support from the IMF and World
Bank, as well as other multilateral lending institutions.

43.      While Uzbekistan has made some progress in implementing its economic
reform program, it has failed to undertake radical steps to transform the economy. In
particular, much of the economy remains in state hands, the process of privatization
is slow, and the government pursues an import substitution policy by controlling
excess to foreign exchange. Uzbekistan’s slow pace of reforms coupled with its
failure to move toward convertibility of the soum have undermined its relations with
the donors especially the IMF.

44.      In July 2001, the government, in partnership with the IMF, launched a staff
monitored program of macroeconomic stabilization and structural reforms aimed at
strengthening efforts to implement market reforms, including phased removal of all
restrictions on access to foreign exchange for current account transactions and
unification of exchange rates.

                       b) Trade Liberalization

45.     Trade liberalization is a key component of the economic reform program. The
government has streamlined and rationalized its tariff structure by reducing the tariff
rates as well as the number of slabs. The average un-weighted tariff rate has been
brought down from 18 percent in July 1995 to 15.3 percent in July 2002. The
maximum tariff rate (excluding automobiles) has also been reduced to 30 percent in
July 2002, from 50 percent in July 1995. The number of tariff slabs has been
curtailed from 6 to 3 during the same period.

46.    Despite these measures, however, import substitution remains the hallmark of
the foreign trade regime. The government restricts imports through a system of
import contract registration that limits the availability of foreign exchange to
importers. In addition, imposition of excise taxes and VAT make the import of certain
commodities prohibitively expensive.

                       c) Price Liberalization

47.     In line with its overall economic strategy of a gradual transition to a market
economy, the government has followed a peacemeal approach to lift price controls.
The government decontrolled the prices of essential foodstuffs by abolishing the
rationing system with effect from January 1, 1995. In order to bring the prices of oil
and petroleum products closer to the world prices, the prices of oil were raised
significantly and were set at higher than full cost recovery level. The prices of natural
gas and electricity for industrial customers were also substantially raised for bringing
them closer to the world prices. The tariffs for electricity and gas for households are
much lower than those for industry, and the government intends to gradually
eliminate this difference. The local governments control retail prices and tariffs for
heating, electricity, and public transport.

48.     Notwithstanding these pricing reforms, the government still exercises a strong
influence on pricing and marketing policies because it controls a major share of
industrial production, transport infrastructure, and the distribution network. In
addition, the production of wheat and cotton is still under a state order system
according to which a portion of the crops must be sold to the government at state-


                                                                                      13
determined prices that are generally far below the market prices. The prices of some
essential pharmaceuticals and land are also subject to regulation by the Government.

                       d) Privatization

49.     As part of its broader structural adjustment program, the government has
endeavored to privatize a wide spectrum of state owned enterprises in a phased
manner. In the first stage, small and medium enterprises in retail trade, services, food
industries, transport and construction were privatized. In the second stage, many
medium-sized firms were privatized into joint stock companies, though the
government continued to hold controlling interest in these enterprises. In October
1995, the government announced to launch a Mass Privatization Program (MPP) in
1996 with the aim of bringing 60 percent of Uzbekistan's GDP within the private
sector. The program envisaged transformation of 3,000 state enterprises into
corporate entities with 51 percent controlling interests sold to the public and 30
percent interests sold to private investment funds. Certain strategic sectors such as
energy, fuel and gold mining were temporarily exempted from the program with the
government retaining controlling interests. The program has yet to be fully
implemented as major enterprises remain state-owned, not least because of a
lukewarm response of potential investors.

               6. Outlook

50.       Uzbekistan has the potential to emerge as a strong and prosperous economy
in the region, thanks to its dynamic, literate, and entrepreneurial population of 25
million, a strategic location in Central Asia, relatively good infrastructure, rich mineral
resources, energy self-sufficiency, and political and social stability. Unfortunately, a
combination of factors including an inconvertible currency, restrictive trade practices,
and pervasive state intervention have prevented the economy from realizing its full
growth potential. Until the government initiates radical structural reforms, foreign
investment, donor lending and economic growth are likely to remain low. However,
with the right economic policies in place, the economy is expected to grow steadily
until it attains its full growth potential.




                                                                                        14
               II. TRADE AND TRADE FACILITATION: AN OVERVIEW

        A. Trade Performance

                 1. Trends in Exports and Imports

51.    Despite a declining trend in total trade (exports plus imports), foreign trade
continues to play a key role in the economy: total trade amounted to 41.3 percent of
GDP in 2001. In recent years, the country has witnessed a slide in its export
earnings (exports decreased from US$ 3695 million in 1997 to 2381 million in 2001),
which has been attributed to adverse external economic environment including Asian
and Russian financial crises, weak commodity prices, and poor cotton harvests
owing to recurring droughts. Thanks mainly to the import compression policy,
imports declined from US$ 3767 million in 1997 to US$ 2370 million in 2001.


                            Table 2.1: Trends in Foreign Trade

                                             1996     1997      1998      1999      2000     2001
                                                                                                   a
Merchandise Exports (Million US$)            3534     3695      3048      2777      2816     2381
                                             (1.7)    (4.5)     (-17.5)   (-8.9)    (1.4)    (-15.4)
                                                                                                   a
Merchandise Imports (Million US$)            4240     3768      2937      2586      2440     2370
                                             (31.0)   (-11.2)   (-22.0)   (-11.9)   (-5.7)   (-2.9)
                  a
Exports/GDP (%)                              24.9     23.9      28.2      18.7      23.7     20.7
                a
Imports/GDP (%)                              23.2     28.7      26.2      18.6      21.4     20.6
Source: Asian Development Bank: Asian Development Outlook 2002.
a: Ministry of Macroeconomics and Statistics.
Figures in bracket are growth rates.

52.     Table 2.2 provides trends in exports by product groups. Export earnings from
cotton fiber declined by more than half from US$ 1708.5 million in 1996 to US$ 793.4
million in 2001. Exports of food products also shrank during the same period, from
US$ 241.8 million in 1996 to US$ 124.9 million in 2001. Exports of chemicals stood
at US$ 85.4 million in 2001, down from US$ 114.7 million in 1996. Energy exports
exhibited a fluctuating trend, increasing appreciably first from US$ 276.6 million in
1996 to US$ 527 million in 1997, and falling thereafter to US$ 322.9 million in 2001.
After registering an increase in 1997, exports of non-ferrous metals mostly remained
on a declining trend amounting to US$ 201.3 million in 2001. Exports of machinery
peaked at US$ 277.6 million in 1997, and then fell gradually to US$ 122.5 million in
2001. Exports of services remained on a declining course until 1999, before picking
up to US$ 448.8 million in 2000 and then to US$ 461.3 million in 2001.


                      Table 2.2: Trends in Exports by Product Groups
                                       (Million US $)

                                            1996      1997      1998       1999     2000     2001
Cotton Fiber                                1708.5    1560.8    1339.6     866.8    873.2    793.4
Food Products                               241.8     182.2     124.3      223.7    200.1    124.9
Chemicals                                   114.7     76.5      51.6       86.4     87.0     85.4
Energy                                      276.6     527.9     277.9      386.9    341.8    322.9
Non-Ferrous Metals                          160.5     200.8     181.2      139.1    217.0    201.3
Machinery                                   130.3     277.6     146.5      103.2    111.8    122.5
Services                                    379.4     360.6     309.6      307.8    448.8    461.3
Source: Ministry of Macroeconomics and Statistics.




                                                                                                 15
53.     Table 2.3 highlights trends in imports by product groups. Imports of food
products contracted sharply from US$ 1390.6 million in 1996 to US$ 337.7 million in
2001. Imports of chemicals stood at US$ 397.7 million in 2001, down from US$ 590.1
million in 1996. Energy imports witnessed a mixed trend: peaking at US$ 112.7
million in 2000 before falling to US$ 58.7 million in 2001. Imports of non-ferrous
metals, machinery and services also exhibited fluctuating trends.


                   Table 2.3: Trends in Imports by Product Groups
                                    (Million US $)

                                         1996        1997     1998     1999     2000       2001
Food Products                            1390.6      873.2    512.2    408.1    361.1      337.7
Chemicals                                590.1       567.4    407.2    363.0    399.5      397.7
Energy                                   50.4        25.1     16.2     66.6     112.7      58.7
Non-Ferrous Metals                       317.4       340.2    303.6    245.4    253.5      343.3
Machinery                                1689.0      2075.9   1553.6   1393.4   1044.1     1293.0
Services                                 9.4         337.2    164.1    269.6    251.0      322.3
Source: Ministry of Macroeconomics and Statistics.

                 2. Composition of Exports

54.     Though Uzbekistan exports a variety of commodities, its merchandize exports
are dominated by cotton, fuels, and gold. In 2001, over 58 percent of exports
consisted of cotton fiber, fuels, non-ferrous metals, food products, and services
(Table 2.4). Cotton fiber accounted for the highest share in total exports (24.3
percent) followed by services (14.1 percent), fuels and energy (9.9 percent), non-
ferrous metals (including gold and other precious metals) (6.2 percent), and food
products (3.8 percent). The high degree of commodity concentration in the country’s
export basket has rendered the country’s exports particularly vulnerable to
fluctuations in the commodity prices as well as to adverse weather conditions.

                              Table 2.4: Major Exports (2001)

Commodity                      Value (Millions US$)             Share in Total (Percent)
Cotton Fiber                   793.4                            24.3
Fuels and Energy               322.9                            9.9
Non-Ferrous Metals             201.3                            6.2
Food Products                  124.9                            3.8
Services                       461.3                            14.1
Sub-Total                      1903.8                           58.3
Total Exports                  3264.9                           100
Source: Ministry of Macroeconomics and Statistics.

55.      Other export products include fruits and vegetables, chemicals, fertilizers, silk,
textiles, non-woven materials, copper, zinc, iron and steel, nuclear machinery and
mechanical appliances, and vehicles (see Table A-1).

                 3. Composition of Imports

56.     Uzbekistan’s leading imports are machinery and equipment, land vehicles,
articles of iron and steel, and foodstuffs (Table 2.5). In 2001, nuclear machinery and
appliances accounted for 23.8 percent of total imports followed by services (10.3
percent), land vehicles (8.2 percent), articles of iron and steel (7 percent), food
products except sugar (6.3 percent), electrical machinery and equipment (5.4



                                                                                              16
percent), sugar (4.1 percent), and plastics and articles thereof (3 percent). Together
these items accounted for roughly 70 percent of total imports in 2001 (see Table A -1
for the detailed commodity composition of imports).

                              Table 2.5: Major Imports (2001)

Commodity                                   Value (Millions US$)   Share in Total (Percent)
Nuclear Machinery and Appliances            745.8                  23.8
Land Vehicles                               257.6                  8.2
Articles of Iron and Steel                  220.8                  7.0
Food Products except Sugar                  202.9                  6.3
Electrical Machinery and Equipment          170.2                  5.4
Sugar                                       129.6                  4.1
Plastics and Articles thereof               92.9                   3.0
Services                                    322.2                  10.3
Sub-Total                                   2142.0                 68.2
Total Exports                               3136.9                 100
Source: Ministry of Macroeconomics and Statistics.

                 4. Direction of Trade

57.    Uzbekistan’s exports have access to a limited number of countries, especially
outside the former Soviet states: more than one-third of Uzbekistan’s exports are
destined towards the former Soviet states (FSU), while roughly 27 percent of exports
are marketed in only 9 non-FSU countries (Table 2.6). Russia is the top market for
Uzbekistan’s exports, followed by Great Britain, Switzerland, Ukraine, Turkmenistan,
Korea, Kazakhstan, USA, Tajikistan, Turkey, Kyrgyzstan, Netherlands, Italy,
Germany and China. Uzbekistan’s exports to its neighboring countries combined
(12.7 percent) are less than its exports to Russia alone (16.1 percent).


                            Table 2.6: Destination of Exports

                                        2000                              2001
                            Value (Million Share              Value (Million Share
                            US$)            (Percent)         US$)            (Percent)
Total Exports               3264.7          100               3264.9          100

FSU countries               1172.2             35.9           1117.0           34.2
      Russia                545.5              16.7           526.2            16.1
      Kazakhstan            100.8              3.1            118.0            3.6
      Turkmenistan          175.4              5.4            138.3            4.2
      Tajikistan            100.9              3.1            85.8             2.6
      Ukraine               153.5              4.7            149.8            4.6
      Kyrgyzstan            50.9               1.6            76.4             2.3
      Other                 45.2               1.3            22.5             0.8
Non-FSU countries           2092.5             64.1           2147.8           65.8
        Switzerland         272.3              8.3            200.7            6.1
        Korea               106.4              3.3            137.1            4.2
        Turkey              99.4               3.0            81.4             2.5
        China               22.4               0.7            14.9             0.5
        Germany             36.5               1.1            38.6             1.2
        Great Britain       236.1              7.2            205.5            6.3
        Netherlands         84.6               2.6            75.4             2.3
        The USA             51.2               1.6            91.0             2.8
        Italy               70.8               2.2            49.4             1.5
Other         Non-FSU       1112.8             34.1           1253.8           38.4
countries



                                                                                          17
Source: Ministry of Macroeconomics and Statistics.



                                 Table 2.7: Origin of Imports

                                         2000                              2001
                             Value (Million Share              Value (Million Share
                             US$)            (Percent)         US$)            (Percent)
Total Imports                2947.4          100               3136.9          100

FSU countries                1125.6              38.2          1168.1          37.2
      Russia                 464.8               15.8          603.6           19.2
      Kazakhstan             215.6               7.3           194.9           6.2
      Tajikistan             19.2                0.7           20.5            0.7
      Turkmenistan           18.1                0.6           26.5            0.8
      Ukraine                178.4               6.1           222.9           7.1
      Kyrgyzstan             93.9                3.2           49.3            1.6
      Other                  135.6               4.6           50.4            1.6
Non-FSU countries            1821.8              61.8          1968.8          62.8
        Korea                287.5               9.8           348.2           11.1
        Germany              255.5               8.7           244.7           7.8
        Great Britain        58.9                2.0           79.8            2.5
        Turkey               97.1                3.3           105.9           3.4
        Netherlands          24.8                0.8           35.2            1.1
        Italy                42.0                1.4           39.7            1.3
        Switzerland          25.5                0.9           37.2            1.2
        Japan                54.9                1.9           130.9           4.2
        USA                  256.5               8.7           202.0           6.4
Other         Non-FSU        719.1               24.4          745.2           23.8
countries
Source: Ministry of Macroeconomics and Statistics.

58.     Nearly 40 percent of Uzbekistan’s imports originate from the FSU countries
(Table 2.7). Russia is a major supplier to Uzbekistan, accounting for 19.2 percent of
the latter’s total imports. Within the FSU states, Ukraine is the leading supplier after
Russia, followed by Kazakhstan, Kyrgyzstan, Turkmenistan, and Tajikistan. Among
the non-FSU countries, the share of Korea in Uzbekistan’s imports is the highest,
followed by Germany, USA, Japan, Turkey, Great Britain, Italy, Switzerland, and
Netherlands. The combined share of the neighboring countries in Uzbekistan’s
imports is less than half that of Russia.

                 5. Composition of Trade with Major Trading Partners

59.     Table 2.8 highlights the commodity composition of Uzbekistan’s exports to its
major markets in 2001. Switzerland accounted for a major proportion (22.3 percent)
of exports of cotton fiber, followed by Korea (9.4 percent), Great Britain (5.5 percent),
and United States (4.6 percent). Roughly 42 percent of cotton exports were marketed
in only 6 countries including Switzerland, Korea, Great Britain, United States, Turkey
and Germany. More than 50 percent of Uzbekistan’s exports of non-ferrous metals
were destined to Netherlands and Turkey.


           Table 2.8: Main Export Items and Destination Countries (2001)
                                     (Million US$)

Countries        Cotton Fiber      Fuel     Services    Non-Ferrous Metals   Food Products
Switzerland      177.0             -        23.6        -                    -



                                                                                           18
Great Britain     43.5             -         17.5         -                     -
Netherlands       -                -         2.5          67.0                  0.6
Korea             74.3             -         40.7         -                     0.7
Turkey            1.3              -         6.1          60.9                  4.1
Germany           1.0              -         24.2         -                     0.2
China             -                1.9       5.0          0.1                   0.4
Afghanistan       -                0.2       0.2          3.0                   4.0
USA               36.8             -         17.0         0.1                   0.3
TOTAL             333.9            2.1       136.8        131.1                 10.3
Export – all      793.4            322.9     461.3        201.3                 124.9
Source: Ministry of Macroeconomics and Statistics.

60.     In 2001, Kazakhstan was the main supplier of grain to Uzbekistan, followed
by United States and the Russian Federation (Table 2.9). United States also ranked
as the largest supplier of meat and by-products. Uzbekistan’s sugar imports were
primarily sourced in the Russian Federation, Germany, and Great Britain. Kyrgyzstan
was the top supplier of fuel followed by the Russian Federation, Kazakhstan,
Germany, and Korea. Uzbekistan’s met its import requirements of machinery and
equipment from a number of countries; the principal among them were the Russian
Federation, Germany, United States, Korea, Turkey, Switzerland, Kazakhstan,
Netherlands, Great Britain, Hungary and Kyrgyzstan. Uzbekistan’s two traditional
trading partners, the Russian Federation and Kazakhstan, accounted for a major
share of its imports of black metals and wares. Korea was the leading supplier of
transport equipment followed by the Russian Federation, Turkey, Germany and the
United States.

                Table 2.9: Main Import Items and Supplier Countries (2001)
                                       (Million US$)

Countries         Grain   Meat and     Sugar     Fuel       Machinery   Black      Transport
                          by-                    and        and         Metals     Equipment
                          products               Energy     Equipment
Korea             -       -            -         0.8        71.6        5.0        182.0
Germany           -       -            10.4      1.2        100.9       11.9       8.0
Hungary           -       -            -         -          2.9         1.8        -
Switzerland       -       -            0.3       -          11.9        0.4        -
Turkey            -       0.2          0.3       0.1        24.2        10.6       16.1
Russian           1.3     -            32.7      5.2        130.4       105.5      48.6
Federation
Kazakhstan        47.6    -            -         3.4        10.1        23.0       0.6
Kyrgyzstan        -       -            -         35.1       2.9         -          0.1
Great Britain     -       -            4.4       0.1        6.7         -          -
Netherlands       -       -            1.7       -          8.5         0.7        1.2
USA               17.7    5.3          -         0.4        82.3        2.5        6.5
Source: Ministry of Macroeconomics and Statistics.

                  6. Geographical Distribution of Foreign Trade

61.     Table 2.10 depicts the geographical distribution of Uzbekistan’s total foreign
trade (imports plus exports) in 2001. Among the European countries, only 6 countries
─ Great Britain, Hungary, Germany, Netherlands, Turkey, and Switzerland ─
accounted for nearly 28 percent of Uzbekistan’s total trade. About 42 percent of
Uzbekistan’s trade within Asia took place with only 7 countries, with Korea
accounting for a quarter of total trade with Asian countries. The United States
dominated in the North American market, whereas Egypt was the only African
country having trade relations with Uzbekistan. Among the CIS countries, Russia was




                                                                                           19
the main trading partner, followed by Ukraine, Kazakhstan, Turkmenistan,
Kyrgyzstan, and Tajikistan.

            Table 2.10: Geographical Distribution of Foreign Trade (2001)
                                   (Million US$)

                              Turnover            Share             Export             Import
EUROPE                        4043.2              100               2271.6             1771.6
          Great Britain       285.3               7.1               205.5              79.8
          Hungry              17.5                0.4               07                 10.5
          Germany             283.4               7.0               38.7               244.7
          Netherlands         110.6               2.7               75.4               35.2
          Turkey              187.3               4.6               81.4               105.9
          Switzerland         237.9               5.9               200.7              37.2
ASIA                          2007.7              100               873.2              1134.5
          Afghanistan         11.4                0.6               11.1               0.3
          India               33.5                1.7               17.5               16.0
          China               106.6               5.3               14.9               91.7
          Republic Korea      485.3               24.2              137.1              348.2
          UAE                 49.2                2.5               24.8               24.4
          Syria               2.2                 0.1               1.3                0.9
          Japan               142.8               7.1               11.9               130.9
NORTH AMERICA                 330.1               100               112.6              217.5
          USA                 293                 88.8              91.0               202.0
          Canada              19.7                6.0               17.6               2.1
AFRICA                        10.1                100               1.7                8.4
          Egypt               0.7                 6.9               0.6                0.1
CIS                           2285.1              100               1117.0             1168.1
          Russia              1129.8              49.4              526.2              603.6
          Kazakhstan          312.9               13.7              118.0              194.9
          Turkmenistan        164.8               7.2               138.3              26.5
          Tajikistan          106.3               4.7               85.8               20.5
          Ukraine             372.7               16.3              149.8              222.9
          Kyrgyzstan          125.7               5.5               76.4               49.3
Source: Ministry of Macroeconomics and Statistics.



                    Table 2.11: Uzbekistan: Main Foreign Trade Partners

Country Ranking (2001)                   Trade turnover (Million US$)     % of total trade turnover

                                         2000             2001           2000          2001
Russia                                   1010.4           1129.8         16.3          17.6
Korea                                    393.8            485.3          6.3           7.6
Ukraine                                  331.9            372.7          5.3           5.8



                                                                                                20
Kazakhstan                               316.4       312.9       5.1          4.9
USA                                      307.7       293         5.0          4.6
Great Britain                            295.0       285.3       4.7          4.5
Germany                                  292.0       283.4       4.7          4.4
Switzerland                              297.9       237.9       4.8          3.7
Turkey                                   196.5       187.3       3.2          2.9
Turkmenistan                             193.5       164.8       3.1          2.6
Kyrgyzstan                               144.9       125.7       2.3          2.0
Netherlands                              109.4       110.6       1.8          1.7
China                                    95.0        106.6       1.5          1.7
Tajikistan                               120.1       106.3       1.9          1.7
Trade Turnover with Main Partners        4105.0      3325.5      66.1         64.0
Total Trade Turnover                     6212.1      6401.8      100          100
Source: Ministry of Macroeconomics and Statistics.



62.      Table 2.11 ranks the major trading partners of Uzbekistan on the basis of its
total foreign trade in 2001. With a share of 17.6 percent in Uzbekistan’s total trade,
Russia is the leading trading partner, followed by Korea (7.6 percent), Ukraine (5.8
percent), Kazakhstan (4.9 percent), USA (4.6 percent), Great Britain (4.5 percent),
Germany (4.4 percent), Switzerland (3.7 percent), Turkey (2.9 percent),
Turkmenistan (2.6 percent), and Kyrgyzstan (2.0 percent). Netherlands, China and
Tajikistan are at the bottom of the ranking, with each accounting for 1.7 percent of
Uzbekistan’s total trade. Among the neighboring countries, Kazakhstan is the main
trading partner, followed by Turkmenistan, Kyrgyzstan, and Tajikistan. Together
these countries account for 11.2 percent of Uzbekistan’s foreign trade.

        B. Potential for Future Growth in Exports

63.    Thanks to a variety of constraints (these are discussed in section IV),
Uzbekistan has not been able to realize its full potential in exports. Uzbekistan is
endowed with cheap and literate labor, and this gives it a competitive edge in exports
of labor-intensive commodities including cotton textiles, and light industrial products
ranging from processed food to footwear. In addition, Uzbekistan has considerable
potential in exports of cotton, energy and non-ferrous metals.

64.     Uzbekistan is the fourth largest producer of cotton, but its local textile
factories can process only 12-15% of the domestically produced cotton. This has
been attributed to the lack of modern facilities as well as inadequate management
and marketing skills in the sector. A liberal trade regime coupled with technological
and entrepreneurial support to the textiles industry is expected to contribute positively
to the development of exports of cotton textiles.

65.    Uzbekistan is rich in mineral resources including gold, copper, zinc and silver.
However, dominance of state trading enterprises has stifled exports of these
commodities. Privatization of trade in this sector is expected to boost exports of gold
and other non-ferrous metals. Likewise, trade in cotton and energy is controlled by
the state enterprises. Allowing full participation of the private sector is likely to
stimulate exports of these commodities in the future.




                                                                                      21
          C. Trade Facilitation2

                   1. Hard Infrastructure

                           a) Railways

66.      The railway network has a total length of 3,645 kilometers, of which 609 is
electrified. With the support from the donors, the government has rehabilitated
railway tracks, especially Tashkent-Samarkand and Samarkand-Buchara, procured
new railcars, and modernized the rail equipment production plants. The railway
system transports the bulk of international freight: over 90 percent of Uzbekistan’s
exports and imports are handled by the railways.

67.     The main railway line runs east-west through the territory of Turkmenistan,
starting at the Kazakh border in the west to Tashkent via Buchara and Samarkand.
The Southern route provides an important connection to Iran and the Gulf through
Turkmenistan. The main north-south and east-west junction is situated South of
Bukhara on Turkmenistan territory. The main lines have spurs that provide links to
other parts of the country.

68.      The Uzbekistan railways are undergoing a restructuring process and by
resolution of the government, railways have been transformed into an unlisted joint
stock company with all shares being government owned. According to the plans,
parts of the railways are to be privatized, notably the wagons, railcars, and repair
facilities. The re-organization has resulted in a huge decline in staff members, from
79,000 a few years ago to only 39,000 in January 2002.

69.     The railway company encourages the use of the railway tracks by other
companies and agencies, and there are plans to allow private companies to use their
own fleet of wagons. Multimodal transport in Uzbekistan is still in its infancy. The
authorities have plans to set up a specialized multimodal transport organization as
well as to develop multimodal terminals throughout the country which include
Tashkent, Bukhara, and Termez.


                           b) Roads

70.   The main road is between Tashkent and Bukhara, with connections from
Bukhara to the south (Turkmenistan and Iran/Turkey), and from Tashkent to the north
(Kazakhstan and further). In the southeast, there is the connection to Afghanistan via
Termez (Mazar-i-Sharif). In addition, a desert route west of the Aral Sea provides
connection to Russia through Kazakhstan.

                           c) Freight Routes

71.       The main international freight routes are:

      •   Traceca route;
      •   Northern route through Kazakhstan to Russia; and
      •   Southern route through Turkmenistan to Iran and Gulf.



2
    While trade facilitation is a much broader concept (see section V. A), here we focus only on hard
    infrastructure and customs-related procedures.


                                                                                                  22
The Traceca route gets much political attention, but is not popular with the transport
industry. Because of difficulties in crossing Turkmenistan, a change to the Aktau
crossing is preferred above the Turkmenbashi ferry.

72.     The northern route upto Western Europe runs through Russia and the Baltics,
with two possible routings both for rail and road: the first through Chimkent in
Kazakhstan; and the second through west of the Aral Sea. The first one is the
traditional trade route for Uzbekistan and is still heavily used.

73.     The southern route through Turkmenistan provides access to the port of
Bander Abbas in Iran, and to Europe via Turkey. The railway companies of
Uzbekistan and Iran reached an agreement on launching express container trains for
the transport to Uzbek cargo to Bander Abbas. This route is also heavily used by
trucks.

74.     The high transportation costs and transit problems on some of the existing
routes have led to search for alternative transport links to sea terminals. The
proposed routes include access to China through Kyrgyzstan and to Pakistan
through Afghanistan. The route through Kyrgyzstan to China is under development
and trilateral agreements between the governments have been signed. There is a
renewed interest in establishing access to the Karachi port in Pakistan though
Afghanistan.

                 2. Soft Trade Infrastructure: The Customs

75.      The State Customs Committee is responsible for enacting customs laws and
regulations. Uzbekistan is a member of the World Customs Organization (WCO) and
strives to work in conformity with international customs practices. Customs
procedures are well established and customs facilities are located at all border
points. Uzbekistan has also adopted the Harmonized System (HS) of good
classification.

                         a) Customs Fees and Charges

76.       According to the Customs Code, fees for the following services are levied:

      •   customs registration;
      •   customs services; and
      •   issuance of the customs certificate.

These charges are set by the State Tax Committee Order No. 218 “On Rates of Fees
for Customs Procedures and Services and for the Issue of Certificates” of 31
December 1994. Proceeds are transferred to the accounts of the departments of the
State Customs Committee and are used for their development. Tables A-7 to A-9
provide information on these charges.

77.   According to Paragraph 2 of the aforementioned Order No. 218, the following
goods are exempt form charges for customs procedures:

      •   goods imported into or exported from Uzbekistan having a total value of less
          than ten minimum wages;
      •   goods imported into or exported from Uzbekistan as a humanitarian aid;
      •   military ammunition imported and exported by the Ministry of Defense, by the
          National Security or by the Ministry of the Interior of Uzbekistan; and



                                                                                       23
   •    goods intended for an official use by diplomatic missions of foreign states,
        international organizations or associations provided with customs privileges in
        the territory of Uzbekistan.

                       b) Customs Valuation

78.     The Law “On the Customs Tariff” of August 29, 1997 and the Customs Code
enforced from January 1, 1998 set forth the determination of customs value in line
with the WTO valuation principles and procedures. The customs value is used for
levying ad valorem rates of duty, customs fees, VAT and excise taxes. The customs
value is also applied in foreign trade statistics and for other trade regulation
measures by the state, if they need to have a value of goods.

79.   Article 17 of the law “On Customs Tariff” specifies the various bases that may
be used to determine customs value as follows:

   •    transaction value of imported goods;
   •    transaction value of identical goods;
   •    transaction value of similar goods;
   •    deductive value;
   •    computed value; and
   •    reserve method.

Transaction value of imported goods is the primary basis used to determine customs
value. When the transaction value of imported goods can not be used, an appropriate
alternative method is chosen from the above list in descending order, with the
exception of deducted value and computed value, the use of which may be reversed.

                       c) Other Customs Formalities

80.      The list of documents to be presented to the customs authorities for clearance
of goods is set forth in the Instruction No. 428 registered by the Ministry of Justice on
April 8, 1998.

The required documents are:

   1.  certificate of conformity;
   2.  certificate of origin;
   3.  contract, registered and stamped by AFER;
   4.  cargo customs declaration;
   5.  passport of an import deal (a document describing a contract on import and
       its terms, signed by the importer, a bank, and a customs officer);
   6. certificate of the availability of funds in foreign exchange and in the domestics
       currency that would have no liabilities or a guarantee of an authorized bank,
       according to the established form, which confirms an importers ability to pay
       for a contract;
   7. invoice of a foreign company;
   8. phytosanitary and veterinary certificates (issued in required cases by
       authorized bodies according to the established procedure);
   9. copy of import license in required cases; and
   10. permit of authorized bodies, in required cases.

81.  The Cabinet of Ministers Resolution No. 287 specifies the additional
documents that may be required for the clearance of some imported goods in specific



                                                                                      24
cases. Customs officers have the right to request the documents used for filling
declarations, should the presented data cause some queries or doubts.




                                                                             25
                          III. TRADE POLICY FRAMEWORK


        A. The Constitutional and Legal Context

82.    According to the Constitution of the Republic of Uzbekistan, which affirms the
country’s commitment to the ideals of democracy and social justice, the system of the
government is based on the division into executive, legislative, and judicial branches.

                1. The Executive Authority

83.    The President is the Head of the State and holds the executive power of the
Republic of Uzbekistan. The Constitution provides extensive authorities to the
President, who signs the country’s laws, issues decrees, resolutions and orders that
have a binding force in the Republic. The President appoints the apparatus of the
executive power and guides its activities, provides for the interaction between the
highest bodies of power and administration of the Republic, establishes and
eliminates the ministries, state committees and other bodies of the state
administration of the Republic of Uzbekistan. The President also appoints and
dismisses the Prime Minister, First Deputy Prime Minister, Deputy Prime Ministers,
members of the Cabinet of Ministers, the Procurator-General and his deputies,
subject to subsequent approval by Oliy Majlis.

                2. The Cabinet of Ministers

84.    The Cabinet of Ministers is the main governmental institution and executive
body. It is formed and headed by the President and is approved by Oliy Majlis. It
consists of the Prime Minister and Deputy Prime Ministers, the heads of ministries,
state committees and bodies of economic management. It provides an effective
leadership over the functioning of the socio-economy, and ensures enforcement of
laws or other resolutions of Oliy Majlis and of the decrees, orders and decisions of
the President.

85.      The Cabinet of Ministers guides and coordinates the work and activities of the
ministries, state committees, state administrations, and economic management
bodies. It may also delegate some powers to the ministries, state committees, and
other state administrative bodies to deal with the issues falling within its jurisdiction. It
is entitled to review or annul regulatory acts of the ministries, state committees or
other state administrative bodies, if such acts are contradictory to the law. It also
draws up the state budget and presents it for consideration by Oliy Majlis, and has
the responsibility for budget execution.

                3. The Parliament

86.      The highest state representative body having a legislative power is Oliy Majlis
(the Parliament) of the Republic of Uzbekistan, which consists of 250 deputies.
Elections to the Parliament take place every five years, on the basis of a universal
right to vote, by territorial constituencies. A session of Oliy Majlis has a quorum if not
less than the two-thirds of all deputies take part in its work. Draft laws are passed by
a majority vote of the deputies present and voting. The publication of laws and other
regulatory acts is a compulsory condition for their enforcement. The Chairman of Oliy
Majlis and his deputies are elected from the members, by a secret ballot. Oliy Majlis
establishes committees and commissions which are responsible for drafting laws,
reviewing and preparing matters to be considered by Oliy Majlis, and ensuring the
enforcement of laws and other resolutions.


                                                                                          26
87.     Oliy Majlis has an exclusive power to pass the Constitution and the laws of
the Republic and to introduce modifications and amendments to them; to define the
guidelines for domestic and external policies of the Republic and to adopt the
strategic state programs; to regulate the matters of administrative and territorial units
with the help of legislative means; to adopt the state budget and to monitor its
execution; to institute taxes and other compulsory payments; to elect the
Constitutional, Supreme and Supreme Economic courts; and to ratify and denunciate
international treaties and agreements.

               4. The Judiciary

88.     According to Article 106 of the Constitution, the judicial branch is independent
from legislative and executive branches, political parties, or other public associations.
The Constitutional Court handles the cases involving the constitutionality of the acts
of legislative and executive branches and interprets norms of the Constitution and
laws of the Republic. The Supreme Court is the highest judicial body of
administrative jurisdiction. The economic disputes are settled by the Supreme
Economic Court or by economic courts falling under its appellate jurisdiction.

89.      Courts are responsible for ensuring social justice, and upholding the rights of
the citizens. Courts are guided in their activities by the Law “On Courts” passed by
Oliy Majlis on September 2, 1993 (including modifications and amendments
introduced by laws of August 31, 1995 and December 27, 1996). Under Article 112 of
the Constitution, judges are independent and obey only the law. They cannot be the
members of any political parties or movements or occupy any other paid position.

       B. Trade Policy Formulation

90.    The trade policy is regarded as an integral part of the overall development
strategy, and is formulated and enforced by the Cabinet of Ministers with the
involvement of a number of ministries, agencies, and state bodies. The leading role
in devising the foreign trade policy belongs to the Department for Coordination of
Foreign Economic Activities, which is under the direct control and supervision of the
Cabinet of Ministers and of the Agency for Foreign Economic Relations (AFER). The
Department makes proposals about the country’s foreign economic policy and about
the improvement of the regulatory framework of the foreign economic activities. The
Department’s activities are aimed at promoting foreign economic relations,
coordinating the work of the ministries, agencies, state organs and organizations of
the Republic, strengthening cooperation with the international financial and economic
organizations, and creating a favorable investment environment.

91.     The Agency for Foreign Economic Relations has the overall responsibility for
regulating and streamlining foreign economic relations and export-import activities.
The main functions of the Agency are to:

   •   analyze international markets of goods and services;
   •   develop the strategy of the country’s foreign economic activities in a number
       of special areas, such as pricing, import, export, advertisement of goods,
       scientific and technological equipment and information, etc;
   •   regulate foreign economic activities of commercial entities, both state-owned
       and private; and
   •   design trade strategies, draft trade regulations, make preparatory or
       coordination work for the accession to the WTO and other international
       organizations.


                                                                                      27
          C. Trade Laws and Regulations

                   1. Import Regulations

                            a) Import Contract Registration

92.     The requirement to register import contracts with the AFER was introduced in
October 1996. Since February 1998, import contracts of only those economic entities
that have no foreign exchange of their own are subject to registration.3 The
government claims that the purpose of import contract registration is to protect the
interests of the state; to shield consumers from low-quality goods; and to streamline
foreign exchange operations.

93.     Registration of contracts upto (exceeding) US$ 50,000, is made within 5 (10)
working days from the date an application is received by the AFER. Registration of a
contract that involves imports under pre-shipping inspection is made within 2 working
days of the receipt of application. Requests for changes in a registered contract are
entertained within 7 working days.

94.   An application for import contract registration may be refused on a variety of
grounds, including the following:

      •   non-compliance with the standards of the international trade law or with the
          laws of the country;
      •   import of ecologically harmful technologies, equipment or other goods;
      •   over or under invoicing of imports; and
      •   import of out-dated equipment and technology.

95.     The decision to refuse registration is communicated to the applicant in writing
explaining the reasons for denial. An applicant has the right to appeal the decision in
a court of law.

                            b) Import Tariffs

96.      The Cabinet of Ministers Resolution No. 189 of May 31, 2002 approved new
rates of import customs duties with effect from July 1, 2002 (see Table B-1 for import
tariffs by products). Uzbekistan currently has 3 tariff slabs of customs duties ranging
from 0 to 30 percent, which are applied to goods from countries that are classified as
most favored nation (MFN). Customs duties for imports from non-MFN countries are
double those for MFN countries. Currently, 38 countries are accorded the MFN status
by Uzbekistan (see Table B-2).

                      Table 3.1: Rates of Customs Duties (1995-2002)
                                          (Percent)
                                     July-    Mar-     Oct-     Nov-     Feb-     Mar-      July-
                                     95       96       96       97       98       2001      2002
Average un-weighted customs          18       16       21       29       28       10.3      15.3
duty
Maximum        Tariff   Rate         50       40       30       30       30       30        30
(excluding automobiles)
Maximum        Tariff   Rate         100      100      100      100      100      100       30
(including automobiles)

3
    By Presidential Decree “On Additional Measures for Streamlining Import Operations” dated February
    18, 1998.


                                                                                                  28
No. of Slabs            (excluding   6         4        5        6        6        4   3
automobiles)
No. of Slabs            (including    10       9        10       11       11       4   3
automobiles)
Source: Ministry of Macroeconomics and Statistics.

                            c) Tariff Preferences

97.    According to an agreement between Uzbekistan and the European Union
covering trade in textiles, Uzbekistan applies preferential tariffs on imports of textiles
from the European Union. Uzbekistan is a beneficiary of the generalized system of
preferences from Canada, Czech Republic, European Union, Japan, Norway, Slovak
Republic, Switzerland, and the United States.

                            d) Tariff Quotas and Tariff Exemptions

98.     Uzbekistan presently has no tariff quotas. According to the Cabinet of
Ministers Resolution No. 137 of March 3, 1998 “On Additional Measures for
Liberalization of Foreign Trade Activities in the Republic of Uzbekistan” the following
goods have been exempted from the payment of customs duties:

      •    goods supplied under intergovernmental or credit agreements signed on
           behalf of the government or under its guarantees;
      •    goods imported from the countries which have signed agreements on a free
           trade regime with Uzbekistan;
      •    goods imported using budgetary funds according to the decisions of the
           government;
      •    goods imported by foreign legal persons making a direct foreign investment of
           more than US$ 50 million, on the condition that such imported goods are of
           their own production.

99.     The goods imported into (or exported from) Uzbekistan according to the
established procedures are not subject to customs duties, if:

      •    the goods are brought as exhibits for exhibitions, advertisement or
           presentations;
      •    the goods are raw materials or other components imported (exported) for
           processing into final products meant to be exported (imported).

100. According to Article 12 of the Republic of Uzbekistan Law of April 30, 1998
“On Foreign Investment”, the property brought for production purposes or for
personal needs of the foreign staff of enterprises with foreign investment is exempt
from customs duties.

101. Pursuant to Article 33 of the Law “On the Customs Tariff”, and various
Presidential Decrees,4 the following items are exempt from the payment of customs
duties:

      •    transportation vehicles engaged in international transportation of cargo,
           luggage and passengers as well as their logistic facilities, fuel, food and other
           property required for a regular operation in transit, in the places of stop-over
           or the property acquired abroad because of an emergency (break-down) of
           such transportation vehicles;

4
    Presidential Decrees No. UP-1702 (January 31, 1997) and UP-1987 (April 9, 2000).


                                                                                           29
   •   domestic currency of Uzbekistan, foreign exchange (except coins) and
       securities, as per the law;
   •   logistic facilities, fuel, food and other property taken outside the customs
       territory in order to ensure the operation of ships leased by legal and physical
       persons of Uzbekistan, ships engaged in fish-catching or the products of fish-
       catching brought onto the customs territory of Uzbekistan;
   •   goods subject to be transferred into the property of the state in cases
       specified by law;
   •   goods brought onto the customs territory or taken outside it for an official or
       personal use by the representatives of foreign states or by physical persons
       entitled to a duty-free importation of such objects, based on the law or
       international treaties of Uzbekistan;
   •   goods carried in or out of the customs territory of Uzbekistan for humanitarian
       assistance, grant aid or for charity purposes in which states, and international
       organizations are involved; school textbooks for free education, pre-school
       and medical institutions;
   •   transit goods moved under the customs control through the customs territory
       and intended for third countries;
   •   goods moved across the customs border by physical persons and not
       intended for manufacturing or commercial activities, pursuant to the customs
       law.
   •   technological equipment for modernization and upgradation of the production
       processes imported according to the established procedure.
   •   technological equipment imported by small and medium enterprises through
       foreign credit. The exemption also applies if the equipment is meant to be
       used in own production of the small and medium enterprises.

102. According to the Presidential Decree No. UP-3080 of May 30, 2002 “About
Further Development of Computerization and Introduction of Information
Technology”, enterprises engaged in the field of information technology are exempt
from payment of customs duties on import of equipment for creation of networks of
computer data communications and software programs.

103. Pursuant to the Cabinet of Ministers Resolution No. 137 of March 31, 1998
“On Additional Measures on Liberalization of External Economic Activity”, customs
duties are not levied on imported goods originating from countries with which
Uzbekistan has signed free trade agreements. Currently, goods from Azerbaijan,
Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Russia, Ukraine, Tajikistan and
Turkmenistan enjoy this treatment.

                       e) Import Quotas and Prohibitions

104. At present Uzbekistan does not apply import quotas. Uzbekistan prohibits
imports of published materials, manuscripts, stamps, drawings, pictures, films,
negatives, movies, video and audio products, phonographs, recordings and records
that are aimed at:

   •   undermining the state and the public order;
   •   violating the country’s territorial integrity, or its political or state sovereignty;
   •   propaganda of war, terrorism, or violence, ethnic superiority; or
   •   religious hatred, racism or its varieties (zionism, anti-semitism, fascism), or
       pornographic materials.
   •



                                                                                         30
According to the Cabinet of Ministers Resolution No. 213 of May 15, 1998, the import
and transit of ethyl alcohol is prohibited.

                      f)   Import Licensing

105. The import licensing system is authorized by the Presidential Decree No.
1871 of October 10, 1997, and applies to arms and military equipment, precious
metals alloys and precious stones, radio-active substances, audio and video
products, and professional activities carried out by foreign citizens in Uzbekistan (see
Tables B-3 and B-4). Goods imported under import licensing procedures are not
subject to quantitative limits.

106. Any economic entity, regardless of the type of ownership, has the right to
apply for an import license. An application for a license can be made at any time and
must be accompanied with an executed import contract. Applications are normally
processed within 10 working days from the date of application. A license is issued for
the period necessary to complete the transaction as indicated in the contractual
provisions, but for no more than one year. There is no minimum timeframe between
the date of the issuance of the license and the date by which the importation must
occur.

107. A decision to refuse a license must have a reasonable basis. The reasons for
refusal are provided in writing to the applicant, who may contest the decision through
the judicial system.

                      g) Domestic Taxes on Imports

108. Domestic taxes on imports include VAT and excise tax. According to the Tax
Code, a 20 percent VAT is charged on imports, with some exceptions. According to
the Presidential Decree of January 19 1998, the technological equipment brought
into Uzbekistan is exempt from VAT, if it is:

   •   intended for the priority projects of the 1998 investment program;
   •   intended for investment projects financed by means of foreign loans under
       governmental guarantees;
   •   intended for the enterprises which are in the process of construction or
       rehabilitation or are specialized in the consumer goods production;
   •   brought by foreign investors as their contribution to the statutory capital of
       enterprises with the foreign investment.

109. Pursuant to Article 82 of the Tax Code, the Cabinet of Ministers determines
the goods subject to the excise tax and establishes the rates of the excise tax. The
rates and list of goods subject to the excise tax on imports, as provided by the
Cabinet of Ministers Resolution No. 490 of December 31, 2002 and Resolution No.
215 of June 17, 2002, are provided in Table B-5.

                      h) Anti-Dumping Regime

110. Article 9 of the Law “On the Customs Tariff” allows the imposition of anti-
dumping duties on goods which are imported at lower prices than the prices
prevailing in the exporting country, if such importation is deemed to cause damage to
domestic producers of similar goods, or to create impediments for the establishment
or expansion of the production of similar goods in Uzbekistan.




                                                                                     31
111. The introduction of anti-dumping duties has to be preceded by an
investigation conducted at the initiative of the customs bodies. The rates of anti-
dumping duties are set by the Cabinet of Ministers, based on the outcomes of
investigation of every case.

112. Uzbekistan has not yet applied any anti-dumping duties. The government is
currently drafting the Law “On Antidumping Duties” which will be developed
according to the WTO rules.

                       i)   Countervailing Duty Regime

113. Article 10 of the Law “On the Customs Tariff” allows the imposition of
countervailing duties on import of goods, the production or export of which, directly or
indirectly, is found to be linked with subsidies, if such importation is deemed to cause
damage to domestic producers of similar goods, or to create impediments for the
establishment or expansion of the production of similar goods in Uzbekistan.

114. The procedural rules for introduction of countervailing duties are the same as
for antidumping duties. Uzbekistan has not yet applied any countervailing duties. The
government is drafting the Law “On Countervailing Duties” which will be developed
according to the WTO rules.

                       j)   Safeguard Measures

115. Article 8 of the Law “On the Customs Tariff” allows the introduction of special
duties (safeguard measures). Such special duties are envisaged for situations where
goods are imported in such quantities and on such terms that they are likely to
damage domestic producers of similar goods; or as a measure to respond to the
discriminatory or other actions of other countries or their allies, if such measures
concern the interests of Uzbekistan.

116. The Law “On the Customs Tariff” also allows the introduction of special duties
as a measure of retaliation against discriminatory actions taken by another country or
alliance of countries against the Republic of Uzbekistan. In addition, the Law “On the
Customs Tariff” allows retaliatory duties in response to other actions of a country or
alliance of countries against the Republic of Uzbekistan. Uzbekistan has not yet
imposed any such duties.

117. As part of the ongoing process of accession to the WTO, the government is
drafting laws on safeguard measures, countervailing duties, and anti-dumping duties
in line with WTO requirements and provisions.

                       k) Pre-shipment Inspection

118. The Cabinet of Ministers Resolution No. 534 of December 3, 1997 “ On
Measures for an Independent Examination of Contracts and Pre-shipment Inspection
of Imported Goods” provides for an independent examination to be conducted by
consulting firms as to the compliance with quality, quantity, level of prices of imported
goods and other contract terms and to ensure a pre-shipment inspection.

119. An independent examination of import contracts and a pre-shipment
inspection of imported goods must be carried out by the consulting firms pursuant to
the requirements of the International Federation of Inspection Agencies. The
consulting firms must be accredited by the State Standards Committee under the



                                                                                      32
Cabinet of Ministers, according to the procedures approved by the International
Chamber of Commerce, and the WTO Agreement on Pre-shipment Inspection5.

120. According to the Cabinet of Ministers Resolution No. 66 of February 2, 2001,
pre-shipping inspection has been made obligatory for imports in excess of US$
10,000 of the following commodities: meat and meat products; dairy products;
oilseeds; alcoholic and non-alcoholic drinks; tobacco; different types of equipment
and mechanical devices; and electric machines and equipment. Pre-shipment
inspection is not obligatory for imports valuing under US$ 10,000 and for import of
specific goods subject to licensing by the AFER.

                             l)   Rules of Origin

121. Articles 24-31 of the Law “On the Customs Tariff” establish the rules of origin
that are based on international standards in respect of two main categories of goods:
(i) the goods produced entirely in one county and only such a country may be
considered in determining the origin; or (ii) the goods that have undergone a
“sufficient processing”, or the goods manufactured, processed or assembled in one
country while some of the used components were from at least another country.

122. The first category covers mainly natural products, such as live animals,
plants, minerals, etc., whereas the second category includes the goods
manufactured in one country with the help of some components from abroad. In the
latter case, the criteria for a “sufficient level of processing” of goods are applied in
order to determine a country of origin, such as:

      •    weather a commodity position (classification of the code of goods according
           to the Commodity Nomenclature of Foreign Economic Activities) modified on
           the level of any of the 4 first digits was a result of goods processing (or of
           component or components brought from abroad for the production of final
           goods);
      •    whether the manufacturing or technological operations were sufficient or not
           sufficient for the goods to be considered originating from that country where
           such operations were made; or
      •    the rule of a share of ad valorem - modification of the value of goods (whether
           a significant share of value was added to the value of final goods in the
           country of production).

123. In order to confirm a goods origin, the customs authorities require
presentation of the certificate of origin, which must provide the following information:
(i) a written application of an exporter stating that the goods comply with the relevant
criteria of origin; and (ii) a written certificate of an authorized body of the country of
export stating that the information presented in the certificate is reliable.

                    2.   Export Regulations

                             a) Registration Requirements for Export Operations

124. An entity registered in the State Register of Enterprises is entitled to engage
in export activities, without the necessity of any further registration. For export
purposes, registration with the AFER is not required.



5
    The WTO rules on pre-shipment inspection provide for a gradual phasing out of these practices.


                                                                                                     33
                     b) Export Duties

125. Pursuant to the Presidential Decree No. UP-1871 of October 10, 1997 “On
Additional Measures to Encourage the Export of Goods,” export customs duties on all
types of goods have been abolished with effect from November 1, 1997.

                     c) Quantitative Export Restrictions, Including
                     Prohibitions, Quotas and Licensing Systems

126. Export of the following commodities is prohibited: grains including wheat, rye,
barley, oats, rice, maize and buckwheat; flour and cereals; cattle and poultry; meat
and meat by-products; powdered milk; tea and tea leaves; sugar; ethyl alcohol;
antiques; vegetable oils; leather skins and raw skins; silkworms, raw silk and silk
waste; and wastes of colore metals. The detailed list of commodities prohibited for
exports is provided in Table B-6.

127. Pursuant to the Presidential Decree No. 1871 of October 10, 1997 “On
Additional Measures to Provide Incentives for the Export of Goods,” export licensing
requirements have been abolished since November 1, 1997, except for exports of
arms and military equipment, precious metals alloys and precious stones, radio-
active substances, and audio and video products (see Tables B-3 and B-4). Export
licensing procedures are similar to import licensing procedures described above.

128. Exports of scientific (research) works, know-how and inventions, and works of
art are subject to permission by the relevant authorities (see Table B-4).

                     d) Export Financing, Subsidy and Promotion Policies

129. Pursuant to the Presidential Decree of February 18, 1997, the National
Insurance Company “Uzbekinvest,” set up in April 1994, was transformed into a
national company of export-import insurance, including the insurance of export
credits. According to Paragraph 2 of this Decree, the main objectives of Uzbekinvest
are:

   •   insurance against political or commercial risks of domestic exporters, and
   •   guarantees to export creditors.

130. Under the Tax Code, the newly created export-oriented manufacturing
enterprises with a foreign participation are temporarily exempt from income (profit)
tax:

   •   for 5 years from the beginning of production, if more than 25 percent of output
       are goods for children. Afterwards the applicable rate is half that of the
       effective rate; and
   •   for two years from the beginning of production, if the share of foreign capital
       in the statutory funds of a company is 50 percent or more.

131. The export of goods is not subject to VAT or excise taxes, except in cases
where goods are sold to the states which apply a regime of imposition of similar
taxes in respect of the export of goods to the Republic of Uzbekistan.

132. Pursuant to the Presidential Decree No.UP-1871 of October 10, 1997 “On
Additional Measures for Providing Incentives for the Export of Goods”, the following
privileges and preferences are provided to enterprises exporting goods of their own
production for a freely convertible currency since November 1, 1997:


                                                                                    34
      •    the right to export goods of their own production without an advance payment
           or opening of a letter of credit, under a guarantee of an authorized bank and
           in compliance with the period of receipt of proceeds in foreign exchange
           specified by the existing law (effective February 1, 2002 the economic entities
           can carry out export activities upon furnishing a guarantee from the buyers
           bank6);
      •    in cases where the share of exported goods is 30 percent or more of total
           sales, the rate of profit tax is two times lower than the existing one;
      •    effective January 1, 1998, the enterprises exporting goods of their own
           production to CIS countries for a freely convertible currency are exempt from
           excise and value added taxes, if otherwise not provided for by international
           agreements.

133. The stated privileges and preferences do not cover trade and intermediary
organizations or manufacturing enterprises that export raw materials (see Table B-7).

                            e) Import Duty Drawback Schemes

134. Under the Customs Code, the drawback of the paid import customs duties
may be granted in respect of the goods imported for processing of exports. For a
drawback of duty, the goods should be processed within a specified time, and the
processed goods should be exported within two years of the date of importation of
their relevant components.

135. The Customs Code also allows exemption from duties and taxes on those
goods that were declared as the goods for re-export, provided that such goods are
actually re-exported within six months of the date of their importation. If the goods
have not been re-exported within six months, they will be subject to duties, taxes and
interest. The drawback of duties and taxes may be granted if:

      •    the goods are re-exported on the same terms as when imported;
      •    re-export is within two years after importation; and
      •    re-exported goods have not been used for obtaining income.

                   3. Trade in Services

136. The regulatory system governing international trade in services is imposed
without discrimination on both foreign and domestic service providers. Therefore,
foreign service providers generally enjoy national treatment. The provision of most
services is subject to licensing and/or certification requirements which are imposed
equally on all service providers. The Cabinet of Ministers Resolution No. 287 of July
25, 1995 “On Measures for Further Liberalizing and Improving Foreign Economic
Activities,” requires foreign providers of professional services in Uzbekistan to obtain
a license from the Ministry of Labor. According to the Cabinet of Ministers Resolution
No. 175 of May 12, 1996 “On the Approval of Licensing Provisions for Transportation
and      Telecommunication        Activities   (Amended)”       enterprises   providing
telecommunication and transportation services, regardless of their form of ownership,
are required to obtain a license from the Commission on Transportation and
Telecommunications Licensing under the Cabinet of Ministers. Activities of the
licensed providers of telecommunication services are regulated by the Uzbek Agency
of Communication and Information. Licensed providers of transportation services are

6
    By the Presidential Decree No. UP-3022 dated January 31, 2002.


                                                                                       35
under the regulatory authority of one of the following three state bodies, depending
on the nature of the service: (i) the State Joint Stock Railway Company (railway
transportation); (ii) the Airline Company “Uzbekistan Khavo Yullari” (air
transportation); and (iii) the State Joint Stock Corporation (motor vehicle
transportation).

137. A detailed description of selected service industries and the legal regime
governing each is provided in Appendix C.

              4. Other Policies affecting Foreign Trade

                      a) Technical Norms and Standards

138. Goods imported into Uzbekistan must comply with the technical,
pharmacological, sanitary, veterinary, and ecological standards and requirements as
provided in the laws of the Republic. According to the authorities, standards and
requirements of certification are intended to protect the life, health and property of
citizens and the environment. Table B-8 provides a detailed description of the laws
and procedures related to the technological provisions, standards and requirements
of certification.

139. All goods subject to mandatory certification imported into (or exported from)
Uzbekistan must be accompanied by a certificate of conformity regardless of
imports/exporters nationality or departmental affiliation including goods imported as
humanitarian aid. The certificate of conformity must be issued by an accredited
certification bodies which include Ministries of Health, Agriculture and Water
Resources, and the State Committee on Environmental Protection.

140. If imported goods are accompanied by documents issued by the national
certification bodies of the countries of origin, confirming the conformity of the
imported goods with the applicable safety requirements, then such documents must
be examined by Uzgosstandart ─ the state center for standardization, metrology, and
certification under the Cabinet of Ministers.

                      b) Sanitary and Phytosanitary Measures

141. Based on the Law “On the State Sanitary Control” of July 3, 1992, the Ministry
of Health undertakes a hygienic certification and examination of many imported
goods (food, raw materials, medicines, chemicals and minerals). These goods must
meet the medical and biological standards No. 0065-96. In case of non-compliance
with these standards, the goods are prohibited for importation into Uzbekistan.

142. The organization and implementation of the veterinary control measures are
pursuant to the Law of the Republic of Uzbekistan “On Veterinary” of September 3,
1993 (including modifications and amendments as of May 6, 1995 and April 25,
1997) and other legislative acts passed on the basis of it.

143. The veterinary law defines the main objectives of the veterinary service, the
system of its management, the authority of the state veterinary inspectors, the rights
and duties of the owners of livestock and livestock products, the procedures of
imposing or lifting a quarantine in case of contagious disease of livestock, and other
organizational and legal issues related to the veterinary service.




                                                                                   36
144. The State Veterinary Department of the Ministry of Agriculture and Water
Resources manages the network of veterinary services. Its divisions regulate the
cross-border and internal transportation of animals.

145. The State Veterinary Department makes an assessment of epizootic situation
in Uzbekistan and exercises control over the protection of the territory from the
penetration of infectious diseases of animals from abroad, by means of adopting
relevant measures of control over the procurement, transportation, export and import
of livestock and its products, fodder, fodder additions and other means applied in
agriculture. This service requires the application of measures for the prevention and
elimination of transmittable disease and for the spreading of information required for
defining an epizootic condition of animals.

146. No restrictions on imports of meat and meat products exist. However, since
April 3, 1996 a temporary prohibition on the import of meat, milk products and live
animals from the United Kingdom is in effect because of the reported disease of
cattle. The importation of meat and milk products from other countries is allowed only
in case of the availability of a certificate of origin.

147. The State Inspection for Plant Quarantine under the Ministry of Agriculture
and Water Resources exercises control over the import and export of plants and
implements a uniform state quarantine control over plants. The State Inspection
arranges its work, proceeding from the requirements of plant quarantine, which
provides for an application of different governmental, social and other measures in
respect of plant protection and prevention of the spreading of their disease.

                       c) Intellectual Property Rights

148. At the most fundamental level, the intellectual property rights are enshrined in
the Constitution of the Republic of Uzbekistan: Article 23 (safeguards for the rights
and liberties of foreign nationals and stateless persons), Article 36 (property rights),
Article 42 (freedom of scientific and technical creation), Article 44 (legal protection of
rights and liberties), and Article 53 (guarantees of the inviolability of property).
Uzbekistan has added provisions on the protection of intellectual property rights to
the Civil Code and has enacted various legislative acts regulating its intellectual
property regime.

149. Responsibility for policy-making and the enforcement of intellectual property
rights protection is divided between two governmental agencies. The Uzbek Agency
for Copyright under the Cabinet of Ministers provides protection for copyrights. The
State Patent Agency of the State Committee for Science and Technology is
responsible for the protection of patent rights and rights to inventions, industrial
designs, and trademarks etc.

150. Enforcement of intellectual property rights is less than satisfactory. Sale of
pirated software, books, and audio and videotapes in the bazaars is common.
Uzbekistan is currently in the process of acceding to the WTO and faces the
challenge of adapting its intellectual property regime to the WTO standards.

                       d) State-Trading

151. State trading activities in Uzbekistan include centralized exports of cotton,
energy, non-ferrous metals and grain, purchase of domestically produced




                                                                                       37
commodities for state needs, and provision of services for facilitating foreign trade
transactions.

152.    The state trading enterprises perform the following functions:

    •   conduct centralized exports on the basis of contracts concluded with the
        manufacturers;
    •   procure imported goods for state needs; and
    •   provide services involving the forwarding and transport of export/import
        cargoes.

153. The stated purpose for state trading in cotton is to generate export earnings
for the state budget and to protect farmers’ interests. 30 percent of cotton grown in
Uzbekistan is subject to the state order system. The state joint-stock association for
the processing and sale of cotton output handles the procurement of cotton subject to
state order, for which it pays the producers the prevailing market price in domestic
currency according to the official exchange rate of the Central Bank. The sale of
cotton for exports is handled by the state-owned joint-stock companies under the
AFER and the state-owned joint-stock association. A private trader may purchase
cotton not subject to state order and export it through one of the above-mentioned
joint-stock companies if such trader has registered his export contract with the AFER.

154. Uzbekistan is actively pursuing a policy of import substitution in grains. The
procurement of the 25 percent of grain harvest produced under the state order
system is handled by the joint-stock corporations. Export of grain is currently
prohibited.

155. The National Corporation for oil and gas industry, “Uzbekneftegas”, is
responsible for the exploration, extraction, and sale of domestic oil and gas
resources. The corporation has the right to import and export oil and gas. Private
companies may also engage in the purchase and export of oil products and refined
oil on the basis of appropriate contracts registered with the AFER.

156. The export of non-ferrous metals is also handled by the state. However,
private companies may also engage in the export of non-ferrous metals in
accordance with the executed contracts registered with the AFER.

                       e) Policies Affecting Trade in Agriculture

157. The import of agricultural products is not licensed. According to the Cabinet of
Ministers Resolution No. 409 of August 12, 1994 “On Approval of the List of Goods
Subject to the Compulsory Certification, Procedures of Certification and Carrying
Goods that Need Certification of Their Safety into the Territory of the Republic of
Uzbekistan and out of It”, import of a wide range of agricultural commodities is
subject to certification by an authorized body regarding the conformity of the goods
with applicable standards or technological requirements.

158. Imported food and agricultural goods are subject to import duties ranging from
0 to 30 %. Export of some agricultural goods is made through the state and joint-
stock companies described in the section on state trading. Also export of some
agricultural commodities is prohibited (see section on export prohibitions).

159. The government provides direct support to the agricultural sector with a view
to ensuring the stability and growth of agricultural supplies to the domestic market.



                                                                                   38
                             f) Policies Affecting Trade in Textiles

160. While customs duties in Uzbekistan are generally in the range of 0 to 30%,
most imported textile products are charged a 30% customs duty. According to an
agreement between Uzbekistan and the European Union covering trade in textiles,
Uzbekistan applies preferential tariffs on imports of textiles from the European Union.
Consequently, many textile products originating from the European Union are either
duty-free or are subject to lower duties than imposed on import of textile products
from other countries.

161. According to the Presidential Decree No. UP 1871-1871 of October 10, 1997
“About Additional Measures on Stimulation of Exports”, customs duties on the export
of textiles as well as export licensing have been abolished.

162. With effect from July 1, 2002 the rates of excise duty on import of carpets,
clothing, and bed linen are respectively 90%, 15%, and 20%.
                             g) Competition Policies

163. The “Antimonopoly Law” regulates the activities of monopolies and prohibits
the use of unfair practices. The Anti-Monopoly Law is administered by the Anti-
Monopoly Committee, whose main regulatory instruments are price controls.
According to the IMF (2002), Uzbekistan has made some progress in strengthening
competition and controlling monopoly enterprises. As a result, the number of
monopoly enterprises7 came down from 945 in January 1996 to 716 in October 1999,
whereas the number of monopoly products contracted from 3096 to 1924 during the
same period. The IMF maintains that despite progress in the regulation of monopoly
enterprises, effective implementation of competition and anti-monopoly policies is
hampered by inadequate legal and regulatory framework.

                             h) Government Procurement Practices

164. Government procurement is conducted by several means including direct
contracts with the producers; purchase of goods at fairs; bidding arranged by the
“Republic Joint-Stock Association for Wholesale and Commodity Exchange”; and
tenders. The procurement of imported commodities is carried out on the basis of
competitive bidding, as is the procurement of basic foodstuffs for the state needs.
The main agency responsible for the arrangement of tender bidding, including a pre-
qualification selection of suppliers and an expert assessment of tenders, is the
Agency for Tenders (“Uzbektenderconsulting”). The agency announces tenders in
mass media, at least 20 days before the date of bidding. Instructions for the
preparation and submission of bids, basic terms of procurement contract, the list of
documents to be furnished by suppliers and other tender documents are provided to
every organization on payment of fee.


                             i)   Free Zones and Free Economic Areas

165. The Law of the Republic of Uzbekistan “On Free Economic Areas” of April 25,
1996 envisages the creation of free trade areas, which may consist of consignment
warehouses, free customs areas and the areas of goods processing, packaging,
sorting and storage. Article 3 of the Customs Code has provisions for the creation of
free customs areas and free warehouses for production and commercial activities

7
    An enterprise with a 65 percent or more market share is classified as a monopoly.


                                                                                        39
(except retail trade). Customs duties and taxes on the goods brought to such areas
and warehouses or from them are not levied, nor the economic restrictions applied,
until the goods enter the customs territory of Uzbekistan. However, no such areas
have been created yet.

                      j)   Regulation of Transit Trade

166. Transit goods must be declared to the customs authorities of Uzbekistan
upon entry, and after a release they may move in the customs territory of the
Republic of Uzbekistan only along the routes determined by the customs bodies. No
duties or taxes are charged in respect of transit goods.

167. When goods are classified as “transit,” they must remain in an unchanged
condition, except of a natural depreciation and must not be used for any economic
purposes. Such goods must be transported to the point of their customs destination,
along the routes established by the customs service of Uzbekistan.

168. If the goods have not been presented to the customs service of Uzbekistan
when released, the carrier will be responsible for the payment of all duties and taxes
accrued because of the goods release in a free circulation (and a possible imposition
of an administrative penalty on the carrier), unless it has been proved that the goods
were imported, or destroyed, or lost due to an accident.

169. The following goods are prohibited for transit through the territory of
Uzbekistan: armaments and live ammunition; aircraft and parts; machine-tools and
machines intended for making armaments, live ammunition, and aircraft; explosives;
poisons; ethyl alcohol; and objects forbidden for import into Uzbekistan. However, the
transit of prohibited goods may be undertaken with the permission of AFER.

170. In respect of the goods subject to excise which are moved through the
customs territory of Uzbekistan, the customs payment must be made into a deposit
account of the State Customs Committee. When such goods are taken out from the
territory of the Republic of Uzbekistan, the payment is returned to the payer. The
transit of alcohol and tobacco must have a customs escort through the territory of
Uzbekistan.

       D. Trade Agreements

              1. Bilateral and Multilateral Agreements

                      a) Bilateral Agreements

171. The Republic of Uzbekistan has signed 38 bilateral agreements with a view to
promoting trade and economic cooperation on mutually advantageous terms and
conditions (list of these agreements is provided in Appendix D). Uzbekistan has also
signed other bilateral agreements related to economic and business matters (e.g.,
establishment of trade and economic relations, mutual protection of investments,
avoidance of double taxation, etc.).

                      b) Multilateral Agreements

172. Uzbekistan has executed and ratified the following multilateral agreements
relating to foreign trade in goods and services:




                                                                                   40
   1. Multilateral Agreement on Cooperation in the Field of Regulation of Goods in
      Transit between the Republics of Uzbekistan, Azerbaijan, Georgia and
      Turkmenistan of May 13, 1996; and
   2. Agreement on Coordination of Railway Transport between the Republics of
      Uzbekistan, Azerbaijan, Georgia and Turkmenistan of May 13, 1996;
   3. Agreement on International Motor Transport between the Republic of
      Uzbekistan, People Republic of China and Kyrgyz Republic of February 18,
      1998.

173. Uzbekistan has also executed a number of other multilateral agreements
relating to foreign trade which are classified as agreements on economic integration
and free trade agreements. These agreements are described below in subsection 2-
a.

              2. Economic Integration, Customs Union and Free Trade
              Agreements

                      a) Economic Integration Agreements

174. The Republic of Uzbekistan is a signatory to a number of agreements on
economic integration with the CIS countries (see appendix B). Of these, the most
significant trade-related agreements are:

   1. The Agreement on Creation of Economic Union within CIS, executed on
      September 24, 1993 (“CIS Economic Union Agreement”),
   2. The Agreement Establishing an Inter-State Eurasia Association of Coal and
      Metal, also executed on September 24 1993 (“Coal and Metal Association
      Agreement”), and
   3. The Agreement on Creation of Common Economic Area between the
      Republic of Uzbekistan, Kyrgyz Republic and Republic of Kazakhstan,
      executed on April 30, 1994 (“Central Asian Economic Area Agreement”).

                             (1) The CIS Economic Union Agreement

175. The agreement was executed by nine CIS countries: Azerbaijan, Armenia,
Belarus, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, and Uzbekistan.
Ukraine has joined the agreement as an Associate Member, and Georgia and
Turkmenistan did not sign it. The agreement commits the signatories to undertake a
variety of measures intended to foster their economic integration, including creation
of the customs union, monetary union, free trade area for goods and services, and
common market for capital and labor. It also commits the signatories to formulate and
implement a uniform foreign economic policy. At this time, the parties have taken
limited steps to fulfill commitments made in the CIS Economic Union Agreement.

                             (2) The Coal and Metal Association Agreement

176. The Agreement was signed by Azerbaijan, Armenia, Belarus, Georgia,
Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Ukraine and Uzbekistan. This
Agreement provides for the creation of a charter-based interstate association, the
“Eurasian Association of Coal and Metal.” The primary purpose of the association is
to create favorable conditions for the development of coal and metal industries,
including promotion of rational use of raw materials, coordination of scientific-
technical and investment policies, and promotion of terms of supply and sale that are
mutually beneficial to the parties involved in sale/purchase transactions. The
Association is required to fulfill this primary purpose in a manner that takes into


                                                                                  41
consideration interests of all member countries, and in a manner that prevents unfair
competition and creation of monopolies.

                              (3) The Agreement on Creation of Common
                              Economic Area between the Republic of
                              Uzbekistan, Kyrgyz Republic and Republic of
                              Kazakhstan

177. The Agreement was signed on April 30, 1994, and is aimed at deepening
economic integration of the signatories. It is a basic framework agreement that
generally commits the signatories to undertake a variety of measures intended to
foster economic integration, including creation of a free trade area for trade in goods
and services, a common market for capital and labor, and mutual adoption of agreed
policies regarding budgetary, accounting, pricing, customs and currency matters. The
Agreement specifically envisions cancellation of customs duties, gradual reduction of
other import-inhibiting levies and restrictions, simplification of customs measures,
harmonization of customs legislation, unification of customs documentation, and
removal of tariff and non-tariff barriers to movement of goods, passengers and
luggage. The Agreement also specifically envisions formulation of agreed policies
and implementation of agreed measures intended to:

   •   promote establishment of a network of commercial and financial-credit
       institutions,
   •   promote foreign investment,
   •   create favorable conditions for trans-border cooperation and transactions
       among business entities,
   •   prevent unilateral action restricting market access,
   •   promote prices set by market forces,
   •   prevent monopolies and unfair competition, and
   •   promote communications and transportation of goods and persons.

                              (4) Labor Market Integration

178. On 15 April 1994, the Republic of Uzbekistan signed an agreement with other
CIS countries entitled the Agreement on Cooperation in the Sphere of Labor
Migration and on the Protection of Worker Migratory Rights. In addition, the Central
Asian Economic Area Agreement requires Kyrgyzstan, Kazakhstan and Uzbekistan
to create all necessary terms and conditions for free movement of labor. There are
also bilateral agreements between Uzbekistan and Kazakhstan on issues regulating
migration, which define procedures and mechanisms for providing employment and
social security of workers.

                      b) Free Trade Area Agreements

179. Uzbekistan has signed a number of bilateral free trade agreements with CIS
countries, i.e. with Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova,
Russian Federation, Tajikistan, Turkmenistan, and Ukraine. In addition, both the CIS
Economic Union Agreement and the Central Asian Economic Area Agreement
contain general provisions committing the parties to establish a free trade area.
Uzbekistan has signed the CIS Agreement on the Creation of a Free Trade Area
(Moscow, April 15, 1994) with Azerbaijan, Armenia, Belarus, Georgia, Kazakhstan,
Kyrgyzstan, Moldova, Russia, Tajikistan, Turkmenistan, Ukraine and Uzbekistan.




                                                                                    42
180. Under the CIS Free Trade Area Agreement, the parties agree not to impose
import or export duties, taxes, levies of equivalent effect, or quantitative restrictions
on goods originating from the territory of one party and destined for the territory of the
other party.

                       c) WTO Accession

181. Uzbekistan is in the process of acceding to the WTO. The working party on
the accession of Uzbekistan to the WTO was established on December 21, 1994.
Uzbekistan submitted its memorandum on the foreign trade regime in September
1998 and replies to questions were circulated in October 1999. Bilateral market
access contacts have been initiated. The first meeting of the working party took place
on July 17, 2002. According to some observers, this meeting could not achieve
significant results, mainly because the government officials lacked the capacity to
deal with such meetings. Next working party meeting is scheduled to he held in May
2003. Currently, the government is in the process of drafting its laws and regulations
according to the principles of the WTO.

       E. Exchange Rate Policy

182. In late-1996, the government responded to a balance of payments crisis by
imposing strict foreign exchange controls. Since then, despite commitments to
currency convertibility, the government has maintained a tight control on the foreign
exchange market by both regulating the supply and demand for hard currency and
setting the exchange rate. The restrictive foreign exchange regime has led to the
emergence of a large black market premium on foreign currency. Despite recent
measures to reduce the spread between the official rate and the rate prevailing in the
illegal curb market, there remains a sizable black market premium on foreign
currency: in December 2002, the black market rate stood at 1250 soum/$, as against
the official rate of 922 soum/$.

183. The government maintains a multiple exchange rate regime, with some
modifications introduced from time to time. In 2001, the following exchange rates
prevailed in the foreign exchange market: the official CBU rate; over-the-counter
(OTC) rate; the ‘foreign exchange bureau’ rate; and the curb market rate. In
November 2001, the government merged the official CBU and OTC rates to
introduce a new ‘free OTC’ rate (or the official rate). This constituted a devaluation of
the official CBU rate to the level of the OTC rate. In line with the IMF program, the
government was expected to unify both the ‘free OTC’ rate and the ‘foreign exchange
bureau’ rate by June 2002. However, the expected unification did not materialize and
there still exist two exchange rates i.e. the ‘free OTC’ rate, and the ‘foreign exchange
bureau’ rate. In July 2002, the ‘free OTC’ rate was about half of the ‘foreign exchange
bureau’ rate.

184. The official rate is used for surrendering the proceeds from centralized
exports, imports of priority capital and consumer goods, debt servicing and
government purchases. Effective January 1, 1999, 50 percent (previously 30
percent) of export proceeds from decentralized exports, which include all exports that
are not classified as centralized, must be surrendered at the official rate (Cabinet of
Ministers Resolution No. 538, dated December 26, 1998).

185. The ‘foreign exchange bureau’ rate is applied to imports of licensed consumer
goods and foreign exchange quota of persons traveling abroad. Effective July 16,
2002, the ‘foreign exchange bureau’ rate also applies to conversion of soum



                                                                                       43
proceeds from sales of imported consumer goods and services (including transport
and communication).

186. The government strictly regulates the import and export of hard currency.
Residents and non-residents can import any amount of foreign currency upon
declaration at the port of entry. Since April 1, 1998, a 1 percent fee has been
imposed on amounts of currency imported in excess of US$ 10,000 or its equivalent.
Export of foreign currency in excess of US$ 1500 by residents is prohibited, unless
official permission is obtained. Foreign nationals are allowed to export foreign
currency from Uzbekistan but only upto the amount initially declared upon their arrival
in Uzbekistan.

187. To control the circulation of hard currency in Uzbekistan, the government has
barred legal entities and individuals, both residents and non-residents of Uzbekistan,
from making settlements and payments in Uzbekistan in foreign currencies for any
goods or services, effective July 1, 2002.

       F. An Assessment of the Trade Policy Framework

188. Despite the fact that tariffs have been generally lowered, international trade
continues to be hampered by a variety of impediments that broadly include
transportation bottlenecks, procedural and regulatory barriers, and inefficient
customs clearance (these are discussed in more detail in section IV). While
Uzbekistan’s restrictive trade policies and practices are driven in large part by its
inward-looking development strategy, weak trade infrastructure, bureaucratic inertia,
and lack of strong commitments to initiate market-oriented reforms have not helped
either.

189. An international trade transaction can not be completed unless it passes
through a lengthy and cumbersome bureaucratic process. The first step involves the
legal registration of a business, which requires permission from multiple government
departments including the Ministry of Justice, State Customs Committee, Agency for
Foreign Economic Relations, and Ministry of Macroeconomics and Statistics.
According to the U.S. Department of Commerce (2002), the process lacks
transparency and investors’ applications can be deferred indefinitely. A registered
enterprise faces a number of regulatory hurdles in carrying out import and export
operations including, licensing and certification requirements, and foreign exchange
controls.

190. The government does not provide a level playing field to private
entrepreneurs. The regulatory framework allows authorities to favor state-owned
enterprises and other well-connected businesses through, for example, allocation of
foreign exchange at preferential rates. Excessive regulatory powers coupled with
discretion in interpreting trade rules and regulations have bred corruption and
promoted rent-seeking activities.

191. Weak implementation of policies that are designed to protect the interests of
market participants is not uncommon. For example, while there are a number of
regulations enacted to protect intellectual property rights, these are poorly enforced.
Similarly, despite regulations against anti-competitive practices, incidents of such
practices are reported by businesses especially in cases where state-owned
enterprises are involved. According to the U.S. Department of Commerce (2002),
businesses competing with state-owned enterprises confront greater hurdles and
many serious competitors are not allowed entry.



                                                                                    44
       G. Stability of Policy Environment

192. Independent analysts and observers generally characterize the overall
regulatory framework as lacking predictability and transparency. Frequent changes in
the laws and regulations are common as the process of developing the necessary
legislative and regulatory framework continues. While some changes are meant to
remove anomalies in the previous laws, the amended versions often cause problems
of their own. The result is a regulatory and legal system that lacks clarity and
contains many conflicting statutes. This situation has been attributed mainly to a
shortage of necessary skills in drafting, enacting and implementing the regulatory
laws.

193. To make the situation worse, the economic environment is characterized by
frequent shifts in the policy stance, necessitating further changes in laws and
regulations. The rapid pace of change in the regulatory environment and economic
policies contribute to uncertainty which adversely affects the overall business climate.

194. The lack of transparency in the regulatory system is also a major concern, not
least because of the government’s tendency to enact legislation through decrees,
which often have secret provisions. In addition, many government resolutions are
classified, enabling the authorities to selectively grant privileges and permissions.
The lack of a transparent regulatory framework particularly affects the small and
medium enterprises as the larger enterprises are often able to seek redress through
Presidential or Ministerial decrees.

195. There is a clear need to improve the predictability and transparency of the
regulatory system in general and trade policy framework in particular. In this respect,
the government needs to ensure policy consistency by defining clear objectives,
identifying appropriate policy instruments, and streamlining the legal and regulatory
system, all in consultation with key stakeholders. A predictable and transparent
regulatory environment will not only foster investment and economic growth, but also
eliminate the rent-seeking activities of vested interests that tend to benefit from the
prevailing distortions.




                                                                                     45
                            IV. KEY OBSTACLES TO TRADE


        A. Transportation Bottlenecks

196. International road transport is dominated by truckers from Turkey and Iran
who mostly use the southern route. Many illegal payments are reported on the
territory of Kazakhstan, especially when using the eastern route via Chimkent. These
payments are often made to avoid fines for overloading (permitted axle loads in
Kazakhstan are lower than in Uzbekistan). To circumvent fines and extortion, trucks
often prefer to choose the less-patrolled dirt road west of the Aral Sea. Visa
requirements to enter Turkmenistan, Kyrgyzstan, and Tajikistan are time consuming
and costly.

197. Shipments by the rail system are sometimes delayed by the limited availability
of rail wagons (the shortage of wagons is attributed to imbalanced freight flows
between Uzbekistan and its trading partners). Delays are also caused by the
consolidation system that is used to establish a complete train of wagons.
Reportedly, it can take upto a week to establish a complete train of wagons.

198. Freight forwarding is subject to licensing which requires ‘indemnity’ insurance
worth US$ 50,000. The government claims that the purpose of the indemnity
insurance is to keep out the unreliable forwarding companies. In practice, however,
there are no quality controls. Members of the forwarding association have stressed
the need to combine the license with quality standards. Because of the indemnity
insurance, many small companies operate illegal forwarding services.

                          a) Freight Transportation: Performance Indicators

199. The following performance indicators are quoted for the transport of one 20-
feet container by rail from Tashkent to a number of destinations:

                  Table 2.10: Performance Indictors of Rail Freight

Destination                                  Price in US$               Time in days
Baltics, St. Petersburg                      901.00                     18
Baltics Riga                                 1800.00                    23
Traceca Poti                                 1123.94                    15
Iran (Bander Abbas)                          1730.00                    15
China Druzhba                                377.47                     10
Turkey Mersin/Istanbul                       2500.00                    27
Moscow                                       878.27                     14
Almaty                                       355.05                     6
Dushanbe                                     496.87                     7
Bishkek                                      308.06                     5
Ashgabad                                     431.7                      8
Source: NEA Transport Research and Training: Central Asia Trade and Transport Facilitation Study.
Uzbekistan National Report.

200. Extra payments in the railway transport are limited, in the order of 2-5
percent. Border delays in railway traffic range from 3-5 days on average, but can
increase to 8-10 days in some cases. Problems are mentioned on the Kazakh border
and Russian borders.




                                                                                              46
201. On the southern route to Iran-Turkey through Turkmenistan, the transit time
for a truck in Turkmenistan is maximum 72 hours. A transit fee of US$ 400 (one way)
has to be paid on the southern route. In Kyrgyzstan the total transit fee is US$ 300.
While the official entry fee in Kazakhstan for Uzbek trucks is US$ 300, a transit fee of
US$ 1000 is also reported. In addition, there are unofficial charges by the traffic
police posts.

202. For road transport, the following performance indicators are quoted for the
transportation of one and two 20-feet containers from Tashkent to a number of
destinations:

                  Table 2.11: Performance Indictors of Road Freight

Destination                     Price in US $           Time in days    Illegal commission in
                                                                        %
                         1 container    2 containers
Bremen via Klaipeda      4500.00        7500.00         14              20
Iran Bander Abbas        1650.00        2500.00         7-8             0
China Urumqi             2150.00        -               5               20
Turkey Mersin            2500.00        4500.00         12              0
Moscow via Usturt        3500.00        4000.00         11-12           20
Brest                    4200.00        6100.00         14              20
Almaty                   900.00         -               3               20
Dushanbe                 1060.00        -               3               0
Bishkek                  600.00         -               2               20
Ashgabad                 1400.00        -               3.5             2
Source: NEA Transport Research and Training: Central Asia Trade and Transport Facilitation Study.
Uzbekistan National Report.



        B. Regulatory and Procedural Barriers to Trade

                1. Import Contract Registration System

203. The import contract registration system is used to implement Uzbekistan's
import substitution development strategy by discouraging imports. The current
system requires an importer to first obtain permission from the Ministry of
Macroeconomics and Statistics. If such permission is granted, the import contract
must be approved by the Agency for Foreign Economic Relations (see section on
trade policy for more details). Without registration, importers can neither purchase
foreign exchange from official sources nor obtain clearance from customs.

204. The registration system allows the authorities to limit import of consumer
goods and instead channel scarce foreign exchange to finance import of capital
goods. Bureaucratic delays in processing applications and outright refusals of
contracts constrain the growth of all imports. An application for import contract
registration may be refused on a variety of pretexts including: non-compliance with
the standards of the international trade or with the laws of the country; import of
ecologically harmful technologies or products; over or under-invoicing of imports; and
import of out-dated equipment and technology; The likelihood of an arbitrary refusal
is higher given the considerable latitude of authorities in interpreting the grounds for
refusal.

205. Excessive regulatory powers of authorities to control imports through the
system has created incentives for corruption and rent-seeking activities. According to
a report of the U.S. Department of Commerce (2002), a 1.5% percent (probably of



                                                                                              47
contract value) extra-legal payment is required to register some import contracts. The
report adds that the system is also used to favor the state-owned enterprises and
firms with close connections through priority allocation of foreign exchange.

               2. Domestic Taxes

206. While tariffs have generally been reduced in Uzbekistan, high excise taxes
form an effective barrier to the legal importation of certain goods. The excise tax
schedule discriminates against imports of goods subject to the tax. For example,
imported liquor is subject to an excise tax of 90 percent, whereas the rate for
domestically produced spirits ranges from 40 percent to 65 percent.

               3. Technical Barriers

207. Goods imported into Uzbekistan must comply with a host of technical,
pharmacological, sanitary, veterinary, and ecological standards and requirements.
Many imported goods including food, raw materials, medicines, chemicals and
minerals are subject to stringent sanitary and phytosanitary requirements. In the case
of import of meat, pre-slaughter veterinary certification of animals is required from the
country of origin. Similarly, import of milk products is allowed only after production of
veterinary certificate signed by relevant authorities in the exporting country. The
certification requirements impose compliance costs on importers and lead to delays
in the completion of import contracts, thus discouraging imports.

               4. Discrimination against Consumer Goods

208. The government seeks to limit imports of consumer goods, and instead
channel foreign exchange resources into import of high technology and capital goods
through a system of multiple exchange rates. Recently, the government has further
tightened the restrictions on imports of consumer goods. Effective August 1, 2002,
the import of non-food consumer goods by enterprises is subject to an additional fee
of 30 percent of the customs value in hard currency, in addition to VAT, customs
duty, and excise tax. Sale of all consumer goods by individuals must be
accompanied by documents showing their registration, and the goods are subject to
confiscation in the absence of such documentation. Effective July 1, 2002, import of
non-food consumer goods by individuals is subject to a single customs duty
(replacing VAT and customs duty) of 90 percent of the customs value of the goods.
The single customs duty is payable in hard currency effective August 1, 2002.

               5. Export Prohibitions

209. To ensure adequate supplies to domestic consumers at lower prices, the
government prohibits the export of a variety of commodities including grains, flour
and cereals, cattle and poultry, meat and meat by-products, powdered milk; tea and
tea leaves, sugar, ethyl alcohol, antiques, vegetable oils, leather skins, silkworms,
raw silk and silk waste, and wastes of colored metals. In addition to outright
prohibition, exports of arms and military equipment, precious metals and stones,
radio-active substances, and audio-video products are regulated through the system
of export licensing.

               6. State Trading

210. A substantial part of international trade ─ including centralized exports of
cotton, energy, non-ferrous metals, and grain ─ is conducted by the state agencies:



                                                                                      48
the share of state trading in total exports stood at 40.4 percent in 20018. The
dominance of state trading prevents the full realization of export potential in
centralized exports by crowding out the private sector.

                   7. Hard Currency Surrender Requirements

211. Hard currency proceeds from centralized exports must be surrendered at the
official exchange rate, which is lower than both the foreign exchange bureau rate and
the curb market rate. Effective January 1, 1999, 50 percent of export proceeds from
decentralized exports (all exports other than centralized exports) must also be
surrendered at the official rate. The over-valued official exchange rate in combination
with the export surrender requirements have reduced production incentives for
traditional exports (cotton and gold), hindered the development of non-traditional
exports, and eroded the competitiveness of Uzbekistan’s exports in the world market.

           C. Customs Related Issues

212. The process of customs clearance is riddled with bureaucratic complexities
leading to delays in customs clearance. According to the U.S. Department of
Commerce (2002), even capital equipment imports for U.S. Uzbek joint ventures are
subject to substantial processing delays and often remain in customs for two to three
months, leading to high storage costs. As a matter of fact, all imports are affected by
the delays, particularly in the absence of any procedure for releasing goods under
bond. To circumvent these problems, many firms contract for pre-shipment
inspection (PSI), which does reduce customs clearance delays. Arbitrary seizures of
goods by the customs authorities have also been observed. Frequent changes in
customs procedures and documentation are reported by forwarders.

213. Clearance of many imported items including perishable commodities is
delayed owing to a host of certification requirements for technical standards including
phytosanitary tests. The problem is further compounded by the routine rejection of
foreign certifications of conformity to technical standards. Delay in the clearance of
perishable items seriously affects the availability of such items to domestic
consumers including restaurants and hotels that serve imported foodstuff. In the
process of examining the goods subject to technical standards, customs officials
reportedly take excess test samples for their own consumption.

214. Excessive documentation requirements make the customs clearance a costly
and time-consuming process. As many as 10 different documents, issued by various
departments and ministries, are required for clearance of a typical import
consignment. In the absence of both a system of pre-arrival clearing, and systematic
risk analysis, customs clearance is only possible after physical inspection of the
consignment.

215. The regulatory framework for customs and inspections between different
Central Asian countries is not uniform. One example is a wooden packaging frame
that is accepted by the Uzbek authorities, but not by Kazakh and Russian authorities.
The software used in the customs is not compatible with internationally used
software, nor is it compatible with that of other FSU countries.




8
    This is based on the premise (which is not implausible) that all exports of cotton, energy, and non-
    ferrous metals are handled by the state.


                                                                                                    49
216. The authorities have expressed their willingness to adopt new procedures
and practices. In particular, the State Customs Committee is in favor of introducing a
system for pre-arrival clearing, if new technologies can be applied.




                                                                                   50
    V. AREAS FOR TRADE FACILITATION AND REGIONAL COOPERATION


       A. Trade Facilitation

217. Trade facilitation measures aim at promoting international trade through
reduction in the transaction costs associated with bringing goods and services across
borders. Trade facilitation involves a wide range of initiatives, including, for instance,
trade liberalization, exchange rate measures, regulatory reforms, and improvement in
transport infrastructure.

218. The review of trade and trade facilitation in Uzbekistan points out a number of
broad areas where reforms are necessary. These include trade and exchange rate
policies, private sector development, governance, and infrastructure.

               1. Trade Policy Reforms

219. Uzbekistan follows a stringent import compression policy that aims to
discourage overall imports in general and imports of consumer goods in particular.
The following trade policy reforms are essential to create a freer trade environment.

   •   Import contract registration system is a major impediment to imports, and thus
       needs to be dismantled.
   •   While tariffs have generally been reduced, Uzbekistan continues to impose
       high tariffs on imports from non-MFN countries. Presently, only 38 countries
       enjoy the MFN status. For a genuine reduction in tariffs, Uzbekistan needs to
       broaden the list of MFN countries.
   •   The discriminatory domestic taxes on imports need to be abolished to create
       a level playing field both for imports and domestically produced goods.
   •   The application of arbitrary technical standards has acted as a severe
       constraint on imports. Technical standards need to be brought in line with
       internationally accepted norms. Also procedures for determining conformity
       with the technical standards need to be streamlined.
   •   Prohibitions on export of a number of commodities need to lifted, as these
       have distorted economic incentives especially for agricultural producers.
   •   A large part of Uzbekistan’s foreign trade is conducted by the state sector.
       The domination of state trading crowds out the private sector, and
       discourages traditional exports through implicit taxation. The system of
       centralized exports needs to be phased out to encourage the traditional
       exports including cotton and gold.

               2. Exchange Rate Reforms

220. The government has followed a restrictive foreign exchange regime since
1996. The multiple currency practices and surrender requirements for export
proceeds at the over-valued exchange rate have hampered foreign trade. Currency
convertibility is a pre-requisite for a liberal trade regime. However, pending full
convertibility, some measures can be adopted to put in place an exchange rate
system that is supportive of a liberal trade environment. In particular, the government
needs to unify the exchange rates and reduce the spread between the official rate
and the curb market rate by lowering intervention in the foreign exchange market.




                                                                                       51
                   3. Private Sector

221. The development of the private sector has been marred by a number of
factors including pervasive intervention of the government in economic activities,
slow pace of privatization, and a restrictive business environment. The following
measures are suggested for promoting and enhancing the role of the private sector in
the economy:

      •   The production of cotton and wheat is subject to the state order system. This
          system has severely distorted economic incentives. The pricing and
          marketing system for wheat and cotton needs to be decentralized to improve
          economic incentives and encourage a more active participation of the private
          sector in these activities.
      •   The involvement of the public sector in a wide range of economic activities
          has crowded out the private sector. Competition in many sectors remains
          limited owing to the dominance of large state-owned enterprises. The role of
          the public sector needs to be curtailed in order to promote private enterprises.
      •   Private enterprises face a number of bureaucratic hurdles. The process for
          registration and licensing of enterprises is cumbersome and thus hinders the
          establishment of private enterprises. The authorities need to simplify and
          streamline the procedures for the establishment of private entities.
      •   In view of the large state-owned sector, privatization is the key to foster the
          development of the private sector. However, private investors are unlikely to
          take much interest in the privatization program unless an enabling
          environment for private business is created.

222. A market friendly environment would shore up business confidence and
create conditions for the private sector to flourish and contribute to trade and
economic growth. There is a great willingness of private entrepreneurs to engage in a
variety of economic activities, as is evident from the growth of small and medium-
sized enterprises (SMEs) in recent years. Helped by reforms aimed at promoting the
SMEs as well as donor support, the SMEs have emerged as the most dynamic
sector of Uzbekistan’s economy. There is further scope for creation and expansion of
private businesses in services, hand made carpets, light manufacturing, cotton
textiles, construction, food processing and other agriculture-related industries.
However, to harness full potential of private entrepreneurship, the government needs
to create a supportive regulatory framework and initiate programs aimed at capacity
building of the private sector9.


                   4. Governance Issues

223. There is a clear need to improve the predictability and transparency of the
regulatory system in general and trade policy framework in particular. In this respect,
the government needs to ensure policy consistency by defining clear objectives,
identifying appropriate policy instruments, and streamlining the legal and regulatory
system, all in consultation with key stakeholders. A predictable and transparent
regulatory environment will not only foster investment and economic growth, but also
eliminate the rent-seeking activities of vested interests that tend to benefit from the
existing distortions in the economy.


9
    Some donor funded programs are already in place for capacity building of the private sector. For
    example, the USAID provides modern business advice to private entrepreneurs through its business
    advisory services. It also trains entrepreneurs in modern business principles and market economics.


                                                                                                    52
               5. Infrastructure

224. While Uzbekistan inherited relatively good infrastructure from the Soviet
Union, most of it needs further development and modernization. Since Uzbekistan
has no direct access to a sea port, the transportation cost for international freight is
high. More attention needs to be focused on operationalizing the closest route to the
sea through Afghanistan to Pakistan. This will promote international trade by
reducing the transportation costs.

       B. Regional Cooperation

225. Recent decades have witnessed a proliferation of regional integration
schemes around the world involving both developed and developing countries alike.
In the context of developing economies, the promotion of regional economic
cooperation and integration is increasingly being viewed as an important instrument
for expediting the process of economic development. It is widely believed that
regional economic cooperation yields gains in production specialization, efficiency
and improved quality of exports, all of which benefit the countries participating in the
regional co-operation effort.

226. In addition to the above benefits of regional integration, the case for
promoting regional economic cooperation in Central Asia is particularly compelling for
at least two reasons. First, Like Uzbekistan, many countries in the Central Asian
region are land-locked and hence depend critically on each other for their external
trade. In this scenario, regional economic integration and cooperation can play a vital
role in economic development of the Central Asian countries through promoting
international trade and investment in the region. Second, the regional countries
provide the most accessible markets to each other, thanks to low transportation costs
and cultural similarities. These markets offer an alternative to expand trade on intra-
regional basis, given the difficulties in global market access.

227. To promote regional economic cooperation in Central Asia, the regional
countries need to adopt a coherent strategy to harmonize their trade regimes,
focusing in particular on transport and transit systems, and customs procedures. The
lack of uniformity in freight regulations and transit procedures is detrimental to the
smooth flow of commodities across international borders. For instance, permitted
axle loads in Kazakhstan are lower than in Uzbekistan. Consequently, the Uzbek
trade through Kazakhstan is adversely affected because of fines and illegal
payments that are levied because of high axle loads. The adoption of common freight
rules and transit procedures would greatly help in facilitating international trade of the
regional countries. Another area that ought to be high on the agenda for regional
cooperation initiatives is Customs. Customs posts in each country follow different
customs procedures which result in costly delays in international shipments. A
uniform customs regime can go a long way in promoting international trade of the
Central Asian countries.




                                                                                       53
APPENDIX A


                       Table A-1: Foreign Trade for 2001


HS                            Export     Import     Share in total   Share in total
CoDe   Group name             (Million   (Million   export           import
                              USD)       USD)       (percent)        (percent)
01     Living animals         0.2        0.1        0.0              0.0
02     Meat and edible -                 6.8        -                0.2
       meat by products
03     Fish              and 0.1         0.2        0.0              0.0
       crustaceans,
       mollusks and other
       aquatic
       invertebrates
04     Dairy       products; 0.4         12.5       0.0              0.4
       birds’ eggs; natural
       honey
05     Products of animal 0.6            3.4        0.0              0.1
       origin
06     Lives trees and 3.0               0.0        0.0              0.0
       other plants
07     Edible vegetables 21.3            6.1        0.7              0.2
       and certain roots
       and tubers
08     Edible fruit and nuts 37.5        3.8        1.1              0.1
09     Coffee, tea, mate 0.5             17.0       0.0              0.5
       and spices
10     Cereals                1.5        67.0       0.0              2.1
11     Products of the 0.3               9.9        0.0              0.3
       milling industry
12     Oil seeds and oil 10.9            30.2       0.3              1.0
       fruits
13     Shellac;       gums, 0.3          0.2        0.0              0.0
       resins and other
       vegetable saps and
       extracts
14     Vegetable plaiting 7.4            0.1        0.2              0.0
       materials
15     Animal or vegetable 4.8           19.0       0.1              0.6
       fats and oils
16     Preparations        of 0.0        2.9        0.0              0.1
       meat, of fish or of
       crustaceans,
       mollusks and other
17     Sugar and sugar 1.6               129.6      0.1              4.1
       confectionery
18     Cocoa and cocoa 0.2               3.4        0.0              0.1
       preparation
19     Products        made 0.5          1.5        0.0              0.0



                                                                                54
     from cereals
20   Processed products          22.4    1.0    0.7   0.0
     made               from
     vegetables,        fruit,
     nuts and other
21   Miscellaneous               0.4     14.6   0.0   0.5
     edible products
22   Beverages, spirits          4.7     2.0    0.1   0.1
     and vinegar
23   Residues            and     7.1     1.2    0.2   0.0
     waste from the food
     industries
24   Tobacco             and     10.3    8.9    0.3   0.3
     manufactured
     tobacco substitutes
25   Salt; sulfur; soils         10.2    32.9   0.3   1.1
     and stone, plaster
     materials, etc.
26   Ores,      slag     and     0.0     35.0   0.0   1.1
     ashes
27   Mineral           fuels,    322.9   58.7   9.9   1.9
     mineral              oils
     products        thereof
     and products of
     distillation
28   Inorganic chemicals         45.1    36.7   1.4   1.2
29   Organic chemicals           2.2     22.0   0.1   0.7
30   Pharmaceutical              1.9     66.6   0.1   2.1
     products
31   Fertilizers                 13.6    2.8    0.4   0.1
32   Tanning or dyeing           6.8     29.5   0.2   0.9
33   Essential oils and          2.2     7.4    0.1   0.2
     rezinoids;
     perfumery cosmetic
     and toilet products
34   Soap,          organic      0.4     14.0   0.0   0.4
     surface-active
     agents, detergents
35   Albuminous                  0.0     2.9    0.0   0.1
     substances
36   Explosive;                  0.0     16.7   0.0   0.5
     pyrotechnic
     products
37   Photographic and            0.0     1.6    0.0   0.1
     cinematographer
     goods
38   Miscellaneous               1.2     33.3   0.0   1.1
     chemical products
39   Plastics and articles       5.4     92.9   0.2   3.0
     thereof
40   Rubber and articles         0.4     60.0   0.0   1.9
     thereof
41   Raw hides an skins          2.9     1.6    0.1   0.1



                                                            55
     and leathers
42   Articles of leather        0.1    1.7    0.0    0.1
43   Fur-skins, artificial      0.7    0.0    0.0    0.0
     fur, and articles
     thereof
44   Wood and articles          0.1    33.2   0.0    1.1
     of wood
45   Cork and articles of       -      0.0    -      0.0
     cork
46   Manufactures          of   0.0    0.0    0.0    0.0
     straw,         esparto
     grass and other
     materials for plaiting
47   Paper         products     0.0    3.0    0.0    0.1
     made from wood
     pulp or other fibrous
     vegetable materials
48   Paper              and     2.1    48.2   0.1    1.5
     paperboard
49   Printed         books,     0.0    17.2   0.0    0.5
     newspapers,
     pictures and other
     products of the
     printing industry
50   Silk                       30.4   0.2    0.9    0.0
51   Wool,      fine    and     4.6    0.7    0.1    0.0
     coarse animal hair
52   Cotton                     923    3.1    28.3   0.1
53   Other        vegetable     0.0    0.5    0.0    0.0
     textile fibers
54   Man-made                   0.8    5.0    0.0    0.2
     filaments
55   Man-made        staple     6.2    5.6    0.2    0.2
     fibers
56   Wadding, felt and          29.6   1.3    0.9    0.0
     non-woven
     materials
57   Carpets and other          0.1    4.7    0.0    0.2
     textile floor covering
58   Special         woven      0.2    0.9    0.0    0.0
     fabrics and fabrics
     with sown in pile
59   Impregnated                0.2    8.4    0.0    0.3
     coated, covered or
     laminated        textile
     fabrics
60   Knitted fabrics of         0.2    4.6    0.0    0.1
     machine and hand
     knitting
61   Knitted articles of        5.9    7.3    0.2    0.2
     apparel            and
     clothing
     accessories



                                                           56
62   Textile articles of        6.9     8.9     0.2    0.3
     apparel             and
     clothing
     accessories
63   Other          finished    17.0    6.2     0.5    0.2
     textile articles
64   Footwear,        gaiters   1.3     8.9     0.0    0.3
     and the like
65   Headwear            and    0.0     1.0     0.0    0.0
     parts thereof
66   Umbrellas,        canes    0.0     0.1     0.0    0.0
     sticks-seats, whips
67   Prepared feathers          0.0     0.0     0.0    0.0
     and down, articles
     thereof
68   Articles of stone,         1.1     11.0    0.0    0.4
     plaster, cement
69   Ceramic products           0.1     19.5    0.0    0.6
70   Glass               and    4.4     8.3     0.1    0.3
     glassware
71   Natural or cultured        868.2   22.3    26.6   0.7
     pearl,        precious
     metals and stones
72   Iron and steel             19.6    79.0    0.6    2.5
73   Articles of iron or        0.9     220.8   0.0    7.0
     steel
74   Copper and articles        134.5   14.9    4.1    0.5
     thereof
75   Nickel and articles        0.3     0.2     0.0    0.0
     thereof
76   Aluminium           and    0.4     24.4    0.0    0.8
     articles thereof
78   Lead and articles          0.0     1.5     0.0    0.0
     thereof
79   Zinc and articles          58.1    0.2     1.8    0.0
     thereof
80   Tin and articles           0.0     0.2     0.0    0.0
     thereof
81   Other base metals          8.1     1.8     0.2    0.1
82   Tools, implements,         0.6     17.3    0.0    0.6
     cutlery,       spoons,
     forks of base metal
83   Miscellaneous              1.1     8.6     0.0    0.3
     articles of base
     metal
84   Nuclear       reactors,    24.7    745.8   0.8    23.8
     boilers, machinery
     and       mechanical
     appliances
85   Electrical machinery       9.1     170.2   0.3    5.4
     and        equipment,
     parts thereof
86   Locomotives,               0.7     32.8    0.0    1.0


                                                              57
          railway and rolling
          stock, parts and
          accessories thereof
87        Land vehicle               83.8            257.6    2.6    8.2
88        Aircraft, spacecraft       3.7             3.9      0.1    0.1
          and parts thereof
89        Ships, boats and           0.0             0.1      0.0    0.0
          other          floating
          structures
90        Optical devices and        0.5             82.5     0.0    2.6
          instruments etc.
91        Clocks,      watches       0.0             0.3      0.0    0.0
          and parts thereof
92        Musical instruments        0.0             0.5      0.0    0.0
94        Furniture; bedding         0.9             36.0     0.0    1.1
          and the like
95        Toys, games and            0.1             3.0      0.0    0.1
          sporting goods
93,96     Miscellaneous              1.3             14.7     0.0    0.4
          manufactured
          articles
97        Works       of      art,   0.0             0.0      0.0    0.0
          collectors’     pieces
          and articles
99        Services                   461.4           322.2    14.1   10.3
          Other goods                -               -        -      -
          Total                      3264.9          3136.9   100    100
Source: Ministry of Macroeconomics and Statistics.




                                                                            58
                     Table A-2: Main Imports from Russia in (2001)

                                                                     Value in Share in
HS        Goods                                                      million  Import
                                                                     USD
17        Sugar and pastry wares from sugar                          32.7     5.4

39        Plastic and articles thereof                               16.2     2.7

44        Wood and articles thereof                                  16.8     2.8

72        Ferrous metals                                             32.0     5.3

73        Articles made of iron and steel                            73.6     12.2

84        Boilers, equipment, devices and parts thereof              117.4    19.4

85        Electrical machinery, equipment, and parts thereof         28.5     4.7

88        Aircraft                                                   3.1      0.5

          Other groups                                               283.3    46.9

          Total Imports                                              603.6    100

Source: Ministry of Macroeconomics and Statistics.




                                                                                 59
                     Table A-3: Main Imports from Germany (2001)

                                                                   Value in Share in
HS        Goods                                                    million  Import
                                                                   USD
15        Margarine                                                1.1      0.4
17        Sugar and Sugar confectionery                            10.5     4.3
24        Tobacco and cigarettes                                   4.7      1.9
30        Pharmaceutical products                                  9.0      3.7
32        Extracts tannic or dyeing                                2.6      1.1
38        Miscellaneous chemical products                          7.3      3.0
39        Plastics and wares from them                             6.8      2.8
40        Rubber and rubber wares                                  1.6      0.7
48        Paper and articles thereof                               2.9      1.2
49        Printing books, newspapers and other                     6.0      2.5
69        Ceramic wares                                            2.5      1.0
72-73     Ferrous metals and articles thereof                      11.9     4.9
74        Copper and wares thereof                                 2.9      1.2
76        Aluminum and wares from him                              1.3      0.5
84        Boilers and mechanical equipment                         86.2     35.2
85        Electrical machinery equipment                           29.0     11.9
87        Ground Vehicles                                          7.6      3.1
90        Optical and surgical instruments                         14.7     6.0
94        Furniture                                                4.0      1.6
99        Services                                                 20.4     8.3
          Other                                                    20.7     8.5
          Total Imports                                            244.7    100
Source: Ministry of Macroeconomics and Statistics.




                                                                               60
                    Table A-4: Main Imports from Kazakhstan (2001)

                                                     Value   in   million Share in Import
HS       Goods                                       USD
10       Cereals                                     47.6                 24.4

11       Product of the milling industry             7.5                  3.8

25       Salt, sulfur, soils and stone               22.0                 11.3

26       Ores, slag & ash                            29.3                 15.0

27       Mineral fuel, oil and products of their 3.4                      1.7
         distillation
28       Products of non-organic chemistry       2.6                      1.3

44       Wood and wares thereof                      9.0                  4.6

72-      Ferrous metal and articles thereof          23.0                 11.8
73

         Other                                       50.5                 25.9

         Total Imports                               194.9                100

Source: Ministry of Macroeconomics and Statistics.




                                                                                      61
                    Table A-5: Main Imports from Switzerland (2001)

                                                         Value   in   million Share    in
HS           Goods                                       USD                  Import
Code
17           Sugar and sugar confectionery               0.3                  0.8

21           Miscellaneous edible preparations           0.5                  1.3

30           Pharmaceutical products                     2.5                  6.7

32           Extracts tannic or dyeing                   4.5                  12.1

38           Chemical products                           0.8                  2.1

39           Plastics and articles thereof               0.2                  0.5

84           Boilers and mechanical equipment            10.7                 28.7

85           Electrical     machinery                and 1.0                  2.7
             equipment
90           Optical devices                             1.3                  3.5

99           Services                                    13.9                 37.3

             Other                                       1.55                 4.2

             Total Imports                               37.25                100

Source: Ministry of Macroeconomics and Statistics.




                                                                                       62
                  Table A-6: Main Imports from Turkey (2001)

                                                Value in million Share    in
HS      Goods                                   USD              Import
Code                                            (%)              (%)
09      Coffee, tea                             0.7              0.7

11      Products of the milling industry        0.0              0.0

15      Animal fat and oils                     0.9              0.8

17      Sugar and sugar confectionery           0.3              0.3

18      Cocoa and cocoa preparations            0.3              0.3

19      Products from cereals                   0.0              0.0

21      Miscellaneous edible preparations       0.2              0.2

22      Alcoholic beverages                     0.0              0.0

24      Tobacco                                 -                -

30      Pharmaceutical products                 0.8              0.8

33      Perfumery                               0.6              0.6

34      Detergents                              2.2              2.1

38      Miscellaneous chemical products         2.3              2.2

39      Plastics and articles thereof           6.5              6.1

40      Rubber and articles thereof             1.8              1.7

44      Wood and articles of wood               0.3              0.3

48      Papers and paperboard                   2.4              2.3

57      Carpets                                 1.9              1.8

61-62   Knitted and textile clothing            3.1              2.9

63      Other finished textile articles         0.7              0.7

70      Glass and glassware                     1.8              1.7

72-73   Iron and steel                          10.6             10.0

84      Boilers and mechanical equipment        22.5             21.2

85      Electrical machinery and equipment, 5.4                  5.1
        parts thereof


                                                                          63
87          Ground vehicles                          16.1    15.2

94          Furniture                                2.5     2.4

            Other                                    22      20.8

            Total Imports                            105.9   100

Source: Ministry of Macroeconomics and Statistics.




                                                                    64
                  Table A-7: Rates of Fees for Customs Formalities

No.     Types of customs procedures                              Rates as percentage of the
                                                                 invoiced price of goods
1.      Export/import operations                                 0.15
2.      Goods for exhibition and other goods imported &          0.15
        exported temporarily
3.      Supply of grains, sugar and equipment for                0.05
        industrial units either in the process of construction
        or subject to rehabilitation
Source: Agency for Foreign Economic Relations.




                                                                                        65
                    Table A-8: Rates of Fees for Customs Services

No.    Types of customs services                         Rates as a multiple of the minimum
                                                         monthly wage
1.     Instruction provided to a specialist on           3
       declaring goods
2.     For calling a customs officer to make
       customs formalities outside a station,
       including of the goods under the customs
       control on the territory of enterprises and
       organizations that provide such a storage,
       per one man/hour:
       During working hours (9:00-18:00);                0.1
       Beyond working hours (18.00 - 9.00), on           0.2
       Saturdays, Sundays and on the days-off.
3.     Processing cargo for exhibitions, per one
       man/hour:
       During working hours (9:00-18:00);
       Beyond working hours (18.00 - 9.00), on           0.2
       Saturdays, Sundays and on the days-off.           0.4
4.     Certificate issue of the right to register and
       re-register the transportation vehicles brought
       by citizens to the Republic of Uzbekistan,
       including for a time being:
       Passenger cars;
       Lorries, vans, buses;                             3
       Transportation facilities not driven by engines   4
       (trailers, semi-trailers, summer cottages and     2
       other);
       Motorcycles, scooters, and motorbikes.            1.2
5.     Issuance of written certificates of the           0.3
       import/export      of     goods,    copies   of
       declarations, inventory journals of goods and
       foreign currency and other data
6.     Inspection of one lorry:
       With cargo;                                       0.2
       Empty.                                            0.1
7.     Inspection of one bus                             0.2
8.     Inspection of one car                             0.2
Source: Agency for Foreign Economic Relations.




                                                                                        66
        Table A-9: Rates of Fees for the Issuance of Customs Certificates

No.    Types of certificates                             Rates as a multiple of the minimum
                                                         monthly salary
1.     Qualification certificate to an expert on         5
       declaration of goods
2.     Certificate of the right to declare goods on a    25
       contractual basis as a broker
3.     Issue of a certificate of the right to open a     50
       duty-free shop
4.     Certificate of the right to establish a customs   50
       warehouse having a total area of:                 60
       Up to 500 square meters;                          70
       Up to 1,000 square meters;
       More than 1,000 square meters.
5.     Permit for processing of temporarily imported     10
       foreign goods (raw materials)
Source: Agency for Foreign Economic Relations.




                                                                                        67
APPENDIX B


                    Table B-1: Rates of Custom Duty by Product

HS     TN   FEA                           Commodity                           Rate of Duty (in
Code   Code                                                                   % or US$)
01     0101   –      Live animals                                             0
       0106
02     0201   –     Meat and edible meat                                      0
       0210

03     0301    –    Fish and crustaceans, molluscs and other aquatic          0
       0307         invertebrates

04                  Dairy produce; birds’ eggs; natural honey; edible
                    products of animal origin, not elsewhere specified
                    or included



       0401,        Milk and creams, not concentrated nor containing          0
       0402,        added sugar or other sweetening matter
       0404    –
       0406
       0403,        Butter milk, curdled milk and cream, yogurt, and          30
       0407     –   other fermented or acidified milk and cream, whether
       0410    00   or not concentrated or containing added sugar or
       000          other sweetening matter
05     0501    00   Products of animal origin, not elsewhere specified        10
       000 –
       0511
06     0601    –    Live trees and other plants; bulbs, roots and the like;   30
       0604         cut flowers and ornamental foliage


07     0701    –    Edible vegetables and certain roots and tubers            30
       0714

08     0801 –       Edible fruits and nuts; peel of citrus fruit or melons    30
       0814   00
       000
09                  Coffee, tea, mate and spices


       0901         Coffee, whether or not roasted; coffee husks and          10
                    coffee substitutes containing coffee in any proportion


       0902         Tea, whether or not flavored                              0

       0903    00   Mate, Ginger, saffron, turmeric, thyme, bay leaves,       10
       000 –        curry and other spices
       0910

10     1001    –    Cereals                                                   0
       1008




                                                                                           68
11                  Products of the milling industry; malt; starches;
                    inulin; wheat gluten


     1101      –    Wheat or meslin flour, cereal flours, groats and meal      0
     1106           of wheat and other cereals
     1107 –         Malt, whether or not roasted; starches; and wheat          10
     1109   00      gluten
     000
12                  Oil seeds and oleaginous fruits; miscellaneous
                    grains, seeds and fruit; industrial or medicinal
                    plants; straw and fodder

     1201 00        Soya beans, whether or not broken                          0

     1202           Ground-nuts, not roasted or otherwise cooked,              30
                    whether or not shelled or broken
     1203      00   Copra, linseed, rape seeds, sunflower seeds, and           10
     000        –   other oil seeds whether or not broken
     1214
13   1301      –    Lac; gums; resins and other vegetable saps and             30
     1302           extracts

14   1401      –    Vegetable plaiting materials; vegetable products not       10
     1404           elsewhere specified or included




15                  Animal or vegetable fats and oils and their
                    cleavage products; prepared edible fats; animal
                    or vegetable waxes



     1501 00 –      Pig fat, other animal fats, fats and oils of fish; other   0
     1519   00      fixed vegetable fats and oils
     000
     1520   00      Glycerol and glycerol      substances;    animal    and    10
     000 –1522      vegetable waxes
16   1601 00 –      Preparations of meat, fish or crustaceans, molluscs,       0
     1605           or other water invertebrates


17                  Sugar and sugar confectionery

     1701      –    Cane sugar or sugar beet and chemically pure               0
     1702           sucrose and other sugars

     1703           Molasses resulting from the extraction or refining of      10
                    sugar
     1704           Sugar confectionery not containing cocoa                   30


18                  Cocoa and cocoa preparations




                                                                                    69
     1801      00   Cocoa beans, paste, cocoa butter and cocoa powder          10
     000        –
     1805      00
     000
     1806           Chocolate and other food preparation containing            30
                    cocoa
19                  Preparation of cereals, flour, starch or milk;
                    pastry cooks products


     1901      –    Malt Extract; food products from starch of malt            30
     1905           extract, bread, cake and biscuits etc.



     1901      10   Preparations for infant use, put up for the retail sale    0
     000
20   2001      –     Preparation of vegetables, fruits, nuts or other parts    30
     2009           of plants

21                  Miscellaneous edible preparations

     2101      –    Extracts, essences and concentrates, of coffee, tea or     10
     2102           mate and preparations with a basis of these products
                    or with a basis of coffee, tea or mate; roasted chicory
                    and other roasted coffee substitutes, and extracts,
                    essences and concentrates thereof

     2103      –    Sauces, soups and food preparations thereof                30
     2106


22                  Beverages, spirits and vinegar

     2201      –    Waters, including natural or artificial mineral waters     30, but no less
     2202           and aerated water, not containing added sugar or           than
                    other sweetening matter or flavored; and other non-        0.15 $ for 1 liter
                    alcoholic beverages, not including fruit or vegetable
                    juices


     2203 00        Beer made from malt                                        30, but no less
                                                                               than        0.3 $
                                                                               for 1 liter
     2204    –      Wines, vermouth and other wine of fresh grapes             30, but no less
     2206 00                                                                   than
                                                                               0.5 $ for 1 liter
     2207      –    Undenatured ethyl alcohol of alcoholic strength by         30, but no less
     2208           volume of 80% or less than 80%; ethyl alcohol and          than        1.0 $
                    other spirits denatured of any strength                    for 1 liter

     2209 00        Vinegar and substitutes for vinegar obtained from          10
                    acetic acid

23                  Residues and waste           from    food    industries;
                    prepared animal fodder




                                                                                             70
     2301 –       Flour meals and pellets of meat or meat offal, of fish   0
     2308   00    or of crustaceans, or other water invertebrates unfit
     000          for the use in food; greaves and other wastes, other
                  residues of starch manufactures and vegetable
                  materials and vegetable waste



     2309         Products used for feeding of animals                     30

24                Tobacco and manufactured tobacco

     2401,        Un-manufactured tobacco; tobacco refuse                  10
     2403
     2402         Cigars and cigarettes of tobacco or of tobacco           30, but no less
                  substitutes                                              than 3.0 $ for
                                                                           1000 pieces
25                Salt; sulphurs; earths and stone; plastering
                  materials, lime and cement

     2501 00,     Salt; marble, travertine, gravel or crushed stone,       30
     2515     –   gypsum and Portland cement
     2517
     2520     –
     2523
     2523   30    Aluminous cement                                         0
     000
     2502   00    Iron pyrites unroasted whether or not containing small   10
     000 –        quantities of other oxide, dolomite whether or not
     2507 00,     calcined; asbestos, and other minerals
     2518     –
     2519,
     2524     –
     2530
     2519   90    Fused magnesia; burned magnesia, whether or not          0
     300,         containing small quantities of other oxides

     2508 –       Other clays, kyanite and silllimanite, whether or not    0
     2514   00    calcined; mullite; chamotte or dinas earths; slate,
     000          whether or not trimmed or cut into blocks or slabs




26                Ores, slag and ash

     2601-2611    Iron, copper, nickel, aluminum, tin and other ores and   0
                  concentrates

     2612-2621    Uranium and thorium and others precious metal ores       30
                  and concentrates

27                Mineral fuel, oils and products of their distillation;
                  bituminous substances; mineral waxes




                                                                                       71
     2701       –   Coal; briquettes and similar types of fuel,                10
     2716           manufactured from coal; peat (including peat litter);
                    petroleum gases; petroleum and petroleum products


     2710 11        Motor spirit                                               30

     2710 19        Spirit type jet fuel                                       30

28   2801-2851      Inorganic chemicals; organic or inorganic compounds        10
     00             of precious metals; of rate-earth metals, of radioactive
                    elements or of isotopes



29                  Organic chemicals

     2901-          Hydrocarbons and other organic compounds                   10
     2935,
     2942      00
     000
     2936       –   Provitamins and vitamins natural or reproduced by          0
     2941           synthesis (including natural concentrates) and their
                    derivatives, used mainly as vitamins, and mixture of
                    these, whether or not in any solvent

30                  Pharmaceutical products

     3001-          Glands and other organs for organo-therapeutic uses,       0
     3004,          dried up, or not powdered; extracts of glands or other
     3006           organs or their secretions for organo-therapeutic
                    uses; and medicaments for therapeutic uses.

     3005           Cotton wool, gauze, bandages and similar articles (for     10
                    example dressings, adhesive plasters, and poultices),
                    coated with the pharmaceutical substances for
                    medical, surgical purposes
31   3101      00   Fertilizers                                                10
     000 –
     3105
32                  Tanning or dying extracts; tanning and their
                    derivatives; dyes, pigments and other coloring
                    matters; paints and varnishes




     3201       –   Tanning extracts of vegetable origin; tanning and their    10
     3202           salts, ethers, esters and other derivatives; and
                    synthetic tanning substances
     3203-3214      Paints and varnishes (including enamels, polishes          30
                    and glue paints); prepared water pigments of a kind
                    used for finishing of leather

     3211      00   Prepared driers                                            0
     000




                                                                                    72
     3215         Printing ink, writing and drawing ink and other ink        0
                  whether or not concentrated or solid


33                Essential oils and resinoids; perfumery, cosmetic
                  or toilet preparations

     3301     -   Essential oils, including concentrates of essential oils   10
     3302         in fats, in fixed oil, in waxes or the like



     3303     -   Perfumes and toilet waters, shaving or after shave         30
     3307         preparations

34                Soap, organic surface-active agents, washing
                  preparations, lubricating preparations, artificial
                  waxes, prepared waxes, polishing preparations,
                  modeling pastes and candles and similar articles



     3401,        Soap; organic surface active products and                  30
     3402         preparations for use as soap; in the form of bars,
     3404-3407    pieces, whether or not containing soaps, (organic
                  surface preparation, washing preparations, and
                  cleaning preparations whether or not containing soap)

     3401    19   Other soaps                                                0
     000
     3403         Lubricating preparations and the preparations of a         10
                  kind used for the oil or grease treatment of textile
                  materials




35                Albuminoidal substances;         modified    starches;
                  glues; enzymes

     3501     -   Casein, caseinates and other casein derivatives;           10
     3505,        casein glues
     3507
     3506         Prepared glues and other prepared adhesives put up         30
                  for the retail sale as glues or adhesives not exceeding
                  a net weight of 1 kg

     3506    91   Adhesive based on rubber or plastic (including             10
     000          artificial resins)

36                Explosives; pyrotechnic products; matches;
                  pyrophoric alloys; and combustible preparations



     3601    00   Propellent powders                                         0
     000




                                                                                  73
     3602    00   Prepared explosives, other than propellent powders.       10
     000, 3603,   Safety fuses; detonating fuses; igniters; electric
     3605,        detonators
     3606
     3604         Fireworks, signaling flares, fog signals and other        30
                  pyrotechnic articles
37                Photographic or cinematographic goods

     3701         Photographic plates and films in the flat, sensitized     10
                  unexposed of any materials, other than paper,
                  paperboard or textile; instant print film in the flat,
                  sensitized, unexposed whether or not in packs



     3701   10    Plates and film for x-ray (medical uses)                  0
     100
     3702     -   Films in rolls, sensitized, unexposed of any materials,   30
     3707         other than paper, paperboard or textile; print film in
                  rolls, sensitized, unexposed


     3702   10    Film in rolls for x-ray purposes                          0
     000
38                Miscellaneous chemical products

     3801    –    Chemical products and preparations (other chemical        10
     3825         products)
     3811   21    Preparations and other prepared additives containing      0
     000          petroleum oils or oils obtained from bituminous
                  minerals
39                Plastics and articles thereof


     3901,        Polymers of ethylene in primary forms                     30
     3924
     3902    –    Polymers of propylene and other olefins, in primary       10
     3923 3925    forms
     – 3926
     3920   10    Other plates, sheets, film, foil and strip;               30
     230 -        Of polymers of ethylene
     3920   10    Of polymers of propylene
     270,
     3920   10
     400
     392113       Other plates, sheets, film, foil and strip, of            30
                  polyurethanes
     392321       Sacks and bags of polymers of ethylene and of other       30
     000, 3923    plastics
     29
     392350       Stoppers, lids, caps and other closures of plastics       30
40                Rubber and articles thereof

     4001-        Natural rubber, balata, gutta-percha, guayule, chicle     10
     4010,        and similar natural gums, in primary forms or in
     4013    -    plates, sheets or strip
     4017 00




                                                                                 74
     4011           New pneumatic tyres of rubber                             10

     4012           Retreaded or used pneumatic tyres of rubber; solid,       30
                    interchangeable tyre treads and tyre flaps of rubber.



41   4101-          Raw hides and skins (other than furskins) and leather     0
     4115

42   4201   00      Articles of leather; saddlery and harness; travel         30
     000-4206       goods, handbags and articles of animal gut




43   4301-          Furskins and artificial fur; manufactures thereof         30
     4304      00
     000
44                  Wood and articles of wood

     4401-          Fuel wood in logs, in billets or in similar forms; wood   10
     4407,          in chips or particles; sawdusts and woodwastes and
     4410-4413      scarp, whether or not agglomerated in logs,
                    briquettes, pellets or similar form



     4410      32   Particle board and other ligneous material whether or     30
     000            not agglomerated with resin or other organic binding
                    substances

     4408    -      Wooden frames for mirrors or similar objects for          30
     4409,          paintings, pictures and photographs
     4414 00 -
     4421
45   4501-4504      Cork and articles of cork                                 10

46   4601-4602      Manufacture of straw; and other plaiting material;        30
                    basketware and wickerwork


47   4701    00-    Pulp of wood or of other fibrous cellulosic material;     10
     4707           (waste and scrap) paper or paperboard


48                  Paper and paperboard; articles of paper pulp, of
                    paper or of paperboard

     4801 00        Newsprint paper in rolls or sheets                        0

     4802       -   Kraft paper and kraft paperboard, in rolls or sheets      10
     4804,          other than that of heading 4802 or 4803
     4806




                                                                                   75
     4805           Paper and paperboard not surface coated or                  30
     4807 00 -      impregnated, whether or not internally reinforced in
     4808           rolls or sheets


     4809-4818      Carbon paper, other copying or transfer paper               10
                    (including coated or impregnated paper for duplicator
                    stencils) whether or not printed in rolls or sheets

     4818 10        Toilet paper                                                30

     4819       -   Cartoons, cases bags and other packing containers           30
     4823           of paper and paperboard, cellulose wadding, box
                    files, letter trays and similar articles of paper and
                    paperboard of a kind used in offices and shops.



     4820      20   Registers, account books, note books, diaries and           0
     000            similar articles, exercise books, folders file covers and
                    other articles of stationery of paper and paperboard
49                  Printed books, newspapers, pictures and other
                    products


     4901    -      Printed books, brochures, leaflets and similar printed      10
     4907 00        matter, stamp-impressed papers, bank-notes, stock
                    shares or bond certificates and similar documents
     4908      –    Other printed matter, including printed pictures and        30
     4911           photographs



50                  Silk

     5001      00   Silk-worm cocoons, suitable for reeling, raw silk, silk     10
     000-           yarn, and silk waste
     5006
     5007           Woven fabrics of silk, or of silk wastes                    30

51                  Wool, fine and coarse hair of animals; horsehair
                    yarn and woven fabrics

     5101    –      Wool, not carded or combed.                                 10
     5105           Also wool (including combed wool in fragments)
     5106 -         Yarn of fine animal hair not put up for retail sale         30
     5113   00
     000
52                  Cotton

     5201       -   Cotton not corded or combed, cotton yarn and cotton         10
     5207           waste

     5208      –    Woven fabrics of cotton containing 85 % of cotton           30
     5209,          fiber, with a weighing not more than 200 g/m
     5210      –
     5212
     5209      49   Woven fabrics of cotton, containing 85 % or more by         10
     100            weight of cotton, weighing more than 200 g/m


                                                                                     76
     5211    49   Other woven fabrics of cotton from yarn of different      10
     100          colors

53                Other vegetable textile fibers; paper yarn and
                  woven fabrics of paper yarn

     5301-5308    Flax-raw or processed, but not spun, flax tow and         10
                  wastes (including yarn waste)


     5309-5311    Woven fabrics of flax and other vegetable textile         30
     00           fibers

54                Man-made filaments

     5401-5406    Sewing threads of man-made filaments whether or           10
                  not put up for retail sale
     5407-5408    Woven fabrics of synthetic filaments, including the       30
                  woven fabrics obtained from materials of heading
                  5404
55                Man-made staple fibers

     5501-5511    Synthetic filaments tow                                   10

     5512-5516    Woven fabrics of synthetic staple fibers, containing      30
                  less than 85% by weight of such fibers, mixed mainly
                  or solely with cotton of a weight not exceeding 170
                  g/m

56   5601-        Wading, felt and non-wovens; special yarns; twine,        30
     5609    00   cordage, ropes and cables and articles thereof
     000

57   5701-5705    Carpets and other textile floor covering                  30
     00

58   5801-        Special woven fabrics; tufted textile fabrics; laces;     30
     5811    00   tapestries; trimmings; embroidery
     000

59                Impregnated coated, covered or laminated textile
                  fabrics; textile articles of a kind suitable for
                  industrial use

     5901-5909    Textile fabrics, coated with gum of the kind used for     30
     5911         book binding, tracing paper, painting, and for painting
                  canvas




     5901    10   Textile fabrics, coated with gum of a kind, used for      10
     000          the outer cover of books or the like


     5911    20   Bolting cloth whether or not made up of textile fabrics   10
     000




                                                                                 77
     5910   00   Conveyor belts of textile material whether or not        10
     000         impregnated, coated, covered with plastics or
                 reinforced with metal or other material




60   6001    –   Knitted or crocheted fabrics                             30
     6006

61               Articles of apparel and clothing accessories,
                 knitted or crocheted

     6101-       Overcoats, caps, wind jackets and similar articles,      30
     6110,       knitted or crocheted other than those of heading
     6112-6117   No.6103


     6111        Babies garments and clothing accessories knitted or      10
                 crocheted
62               Articles of apparel and clothing accessories, not
                 knitted or crocheted


     6201-6208   Overcoats, capes, wind-jackets, and similar articles,    30
     6210-6217   other than those of heading No.6203


     6209        Babies garments and clothing accessories                 10

63   6301-6310   Other made up textile articles; worn clothing and worn   30
                 textile articles; rags


64               Foot ware; gaiter and the like; parts of such
                 articles

     6401-6405   Waterproof footwear with outer soles and upper of the    30
                 rubber or of plastics, the upper of which are neither
                 fixed to the sole nor assembled by stitching, nailing,
                 plugging or similar processes



     6406        Parts of footwear, removable in soles, heel cushions     0
                 and similar articles and parts thereof



65               Headgear and their parts

     6501   00   Hat-forms, shapes, hat bodies and hoods of felt,         10
     000-        neither blocked to shape nor with made brims; nor
     6502   00   lined nor trimmed
     000
     6507   00
     000




                                                                               78
     6503 00 –   Felt hats and other felt headgear made from the hat       30
     6506        bodies whether or not lined or trimmed



66               Umbrellas, sun umbrellas, walking-sticks, seat-
                 sticks, whips, riding crops and parts thereof


     6601-6602   Umbrellas and sun umbrellas (including walking            30
                 sticks, garden umbrellas and similar umbrellas)
     6603        Parts, trimmings and accessories of articles of           10
                 heading No.6601 or 6602
67   67011 00    Prepared feathers and articles made of feathers;          30
     000-        artificial flowers; article of human hair
     6704

68               Articles of stone, plaster, cement, asbestos, mica
                 or similar materials

     6801-6803   Setts, curbstones and flagstones for paving from a        30
     6805-6811   natural stone (except slate), worked slate and articles
     6815        of slate. And articles of asbestos cement

     6804        Millstones, grinding wheels and the like, and parts       10
                 thereof.
     6812-6814   Fabricated asbestos fibers; mixtures with a basis of
                 asbestos; articles of such mixtures or of asbestos (for
                 example, thread, woven fabrics, clothing, headgear,
                 footwear, gaskets), other than goods of heading No.
                 6811 or 6813

69               Ceramic products

     6901 00     Bricks, blocks, tiles and other ceramic goods of          30
     6904-6905   siliceous fossil meals or similar siliceous earths
     6907-6908
     6910-6914

     6902-6903   Refractory bricks, blocks, tiles and similar refracting   0
                 ceramic constructional goods, other than those of
                 siliceous fossil meals or similar siliceous earths


     6906   00   Ceramic pipes, conduits, guttering and pipe fittings      10
     000,
     6909
70               Glass and glassware

     7001 00     Waste and scrape of glass.                                10
     7011-7012   Glass bulbs and tubes and glass parts thereof,
     7015-7017   without fittings, for electric lamps, cathode-ray tubes
     7019-7020   or the like, glass inners for vacuum flasks




                                                                                79
     7002-7010    Glass in balls, rods or tubes unworked; glass bottles,   30
     7013-7014    flasks, jars, ampoules and other container of glass;
     7016-7018    glass ware of kind used for table and kitchenware;
                  glassware and optical elements of glass

     7002   31    Glass tubes from quartz and other fused silica           0
     000-
     7002   39
     000
71   7101-7118    Natural or cultured pearls, precious or semi- precious   30
                  stones, precious metals, metals clad with precious
                  metal, and articles thereof; imitation jewelry; coin




72   7201-7229    Iron and steel                                           10

73   7301-7326    Articles of iron and steel                               10

74                Copper and articles thereof

     7401-7402    Copper mattes; cement copper, copper bars, rods          10
     7404 00,     and profiles; copper waste and scrap
     7407
     7403,        Refined copper and copper alloys, copper wire and        30
     7405   00    other articles of copper
     000,
     7406
     7408    –
     7419
75   7501-7508    Nickel and articles thereof                              10

76   7601-7616    Aluminum and articles thereof                            10

78   7801-7806    Lead and articles thereof                                10
     00
79   7901 –       Zinc and articles thereof                                10
     7907    00
     000
80   8001 –       Tin and articles thereof                                 10
     8007    00
     000
81   8101–        Other base metals; cermets; articles thereof             10
     8113 00

82                Tools, implements, cutlery, spoons and forks, of
                  base metal; parts thereof of base metal


     8201    –    Hand tools; spades, shovels, forks, axes and similar     30
     8203         tools; sickles, hay knives, hedge shears, timber
     8211,        wedges and other tools used in agriculture,
     8215         horticulture and forestry
     8204    –    Hand      operated      spanners  and     wrenches,      10
     8210,        interchangeable spanner sockets, with or without
     8212    –    handles
     8214



                                                                                80
83                  Miscellaneous articles of base metal

     8301,          Locks and padlocks (key combination or electrically       10
     8311           operated) of base metal, incorporating locks of base
                    metal; keys for any of the foregoing articles of base
                    metal
     8302 –         Base metal mountings, fittings and similar articles for   30
     8310   00      furniture, doors, stair cases, windows, saddlery,
     000            caskets and the like. Base metal hat-racks, hat-pegs,
                    brackets and similar fixtures; castors with mountings
                    of base metal, automatic door closer of base metal
     8302      10    Hinges of base metal                                     10
     100,
     8302      10
     900,           Castors with mounting of base metal

     8302      20
     100,           Other mountings, fittings suitable for furniture
     8302      20
     900,           Automatic door closer of base metal

     8302      49
     100,
     8302      49
     900,

     8302      60
     100

84                  Nuclear reactors, boilers, machinery               and
                    mechanical appliances and parts thereof

     8401       –   Nuclear reactors; machinery and apparatus for             10
     8449           isotopic separation
     8451      –
     8485

     8408      90   Compression-ignition piston engines (diesel or semi-      30
     290            diesel) and other engines

     8422      11   Domestic dish washing machines, machinery for             30
     000,           cleaning or drying bottles or other containers
     8423      10
     100
     8470      10   Electronic calculators                                    30
     000
     8450           Household or laundry-type washing machines,               30
                    including machines which both wash and dry

     8452 10        Sewing machines domestic                                  10

85                  Electrical machinery and equipment and parts
                    thereof; sound recorders and reproducers,
                    television image and sound recorders and
                    reproducers, and parts and accessories of such
                    articles




                                                                                   81
8501    –   Electric motors and generators and electrical ignition    10
8507        or starting equipment for compression internal
8511    –   combustion engines
8516
8514 90     Industrial furnaces and oven; other industrial or         0
            dielectric heating equipment
8517    –   Electrical apparatus for line telegraphy including line   30
8524        telephone and telecommunication apparatus for
8527   –    digital line system
8528

8518   10   Microphones and loudspeakers whether or not               10
100,        mounted in their enclosure headphones, earphones
8518   21   and combined microphone/speaker sets, electric
100,        sound amplifier sets
8518   22   Microphone having frequency range of 300 HZ
100,        Loudspeakers having frequency range of 300 HZ and
8518   29   multiple loudspeakers mounted in the same
100,        enclosure
8518   30
100,
8518   40
100,
8518   50
100,
8518   90
100

8520   90   Magnetic tap recorder and sound recording apparatus       10
100         whether or not sound reproducing device

8521   10   Video recording and reproducing apparatus VCR and         10
100         VCP

8522   90   Parts and accessories of heading 8521                     10
100

8527   90   Reception apparatus for radio-telegraphy or radio         10
100         broadcast

8525    –   Apparatus for radio-telegraphy, radio broadcast or        10
8526        television, whether or not incorporating reception
8529   –    apparatus or sound recording or reproducing
8538        apparatus.
8540   –
8543
8546   –
8548

8539        Electric filament or discharge lamps (including sealed    30
            beam lamp units and infra-red lamps; arc-lamps)


8539   10   Electric filament including infra-red lamps               10
100




                                                                           82
     8544         Insulated wire and other electric conductors whether      30
                  or not fitted with connectors; optical fiber cables
                  made up of fibers whether or not assembled with
                  electric conductors or fitted with connectors


     8544    51   Other electric conductors for voltage exceeding 80 V      0
     000          but not exceeding 1000 V
     8544    59
     800
     8544    60
     100
     8545         Carbon electrodes, carbon brushes, lamp carbon,           0
                  battery carbon and other articles of graphite with or
                  without metal of kind used for electrical purposes


86                Vehicles, aircraft, vessels         and     associated
                  transport equipment


     8601     –   Railway locomotives, powered from              external   0
     8603,        electricity or by electric accumulators.
     8605    00
     000 –
     8609
     8604    00   Railway maintenance or service vehicle whether or         10
     000          not self propelled (for example workshops, cranes,
                  trackliners, and track inspection vehicles)

87                Vehicles other than railway or tramway, and parts
                  and accessories thereof


     8701         Tractors other than tractor of heading 8709               0

     8701    20   Road tractors for semi-trailers and other                 30
     90,
     8701    90
     500
     8702         Motor vehicles for transport of 10 or more persons        30
                  including a driver
     8702    10   Vehicles with compression piston engine (diesel or        30 + 1.2 $/ cm3
     19,          semi diesel)
     8702    10
     99,          Vehicles with other engines

     8702    90
     19,
     8702    90
     39

     8703         Motor car and other motor vehicle for the transport of    30
                  persons (other than of heading No. 8702), including
                  station wagons and cars




                                                                                        83
8703   21   Vehicles of a cylinder capacity not exceeding 1000 cc   30 + 1.2 $/ cm3
90,         Vehicles of a cylinder capacity exceeding 1000 cc but
            not 1300cc
8703   22   Vehicles of a cylinder capacity exceeding 1500 cc but
90,         not 1800cc
            Vehicles of a cylinder capacity exceeding 3000 cc
8703   23   Other vehicles of capacity exceeding 1300 cc but not
90,         exceeding 1500 cc
            Other vehicles of capacity exceeding 1800 cc but not
8703   24   exceeding 2500 cc
90,         Other vehicles of capacity exceeding 2500 cc

8703   31
90,

8703   32
90,

8703   33
90

8703   21   Vehicles in CKD/SKD condition of a cylinder capacity    30, but no less
10          not exceeding 1000 cc                                   than 1.8$ after
                                                                    sm3
8703   22   Vehicles in CKD/SKD condition of a capacity             30, but no less
10          exceeding 1000 cc but not 1300 cc                       than 2.0$ after
                                                                    sm3
8703   23   Vehicles in CKD/SKD condition of a capacity             30, but no less
110         exceeding 1500 cc but not exceeding 1800 cc             than 2.5$ after
                                                                    sm3
8703   23   Other vehicles of a capacity exceeding 1500 cc but      30, but no less
19          not exceeding 1800 cc                                   than 2.5$ after
                                                                    sm3
8703   24   Vehicles in CKD/SKD condition of a capacity             30, but no less
10          exceeding 3000 cc                                       than 3.0$ after
                                                                    sm3
8703   31   Vehicles in CKD/SKD condition of a capacity not         30, but no less
10          exceeding 1000 cc                                       than 2.0$ after
                                                                    sm3
8703   32   Vehicles in CKD/SKD condition of a capacity             30, but no less
110         exceeding 1500 cc but not exceeding 1800 cc             than 2.5$ after
                                                                    sm3
8703   32   Other vehicles of a capacity exceeding 1800 cc but      30, but no less
19          not exceeding 2500 cc                                   than 2.5$ after
                                                                    sm3
8703   33   Vehicles in CKD/SKD condition of a capacity             30, but no less
110         exceeding 2500 cc                                       than 3.0$ after
                                                                    sm3
8703   33   Other vehicles of a capacity exceeding 2500cc           30, but no less
19                                                                  than 3.0$ after
                                                                    sm3
8704        Motor vehicles for the transport of goods               30




                                                                                84
8704      21   Vehicles with compression-ignition piston engine with   30 + 1.2 $/ cm3
39,            goods carrying capacity not exceeding 5 tonnes
8704      21
990,           Vehicles with compression-ignition piston engine with
               goods carrying capacity exceeding 5 tonnes but not
               exceeding 20 tonnes
8704      22
990,           Vehicles with compression-ignition piston engine with
               goods carrying capacity exceeding 20 tonnes

               Vehicles with spark-ignition piston engine with goods
               carrying capacity not exceeding 5 tonnes
8704      23
990,           Vehicles with spark-ignition piston engine with goods
               carrying capacity exceeding 5 tonnes


8704      31
390,
8704      31
990,


8704      32
990

8705           Special purpose motor vehicles other than those for     0
               the transport of persons or goods, like breakdown
               lorries, crane lorries and fire fighting vehicles


8706 00        Chassis fitted with engine for the motor vehicles of    10
               headings 8701 to 8705
8706      00   Other motor vehicles with chassis of capacity           30
910            exceeding 2500 cc
8707           Bodies (including cabs) for the motor vehicles of       30
               heading, No.8701 – 8705
8708       –   Parts and accessories of motor vehicles of heading      10
8709           No. 8701 to 8705
8710      00   Tanks and other armored fighting vehicles motorized     0
000            whether or not fitted with weapon and parts of such
               vehicles

8711           Motor cycles                                            30


8712 00        Bicycles and other cycles (including         Delivery   30
               tricycles) not motorized
8713           Invalid carriages whether or not motorized or           0
               otherwise mechanically propelled


8714           Parts and accessories of vehicles of headings nos.      30
               87.11 to 87.13
8714      20   Of invalid carriages                                    0
000



                                                                                   85
     8715 00        Baby carriages and parts thereof                           10

     8716           Trailers and semi trailers; other vehicles; not            10
                    mechanically propelled; and their parts
88   8801 8805      Aircraft, space craft and their parts                      10


89   8901       –   Ships, boats and floating structures                       10
     8908      00
     000

90                  Optical,     photographic,  cinematographic,
                    measuring, checking precision, medical or
                    surgical instrument and apparatus; parts
                    accessories thereof



     9001           Optical fibers; optical fiber cables other than those of   0
     9018 -         heading No.85.44; sheets and plates of polarizing
     9033   00      material
     000

     9021      29   Artificial teeth and other dental fittings of precious     30
     000            metals

     9002       –   Mounting-frames for spectacles, goggles or the like        10
     9004           (glasses, protective glasses or similar) and their parts
     9011      –
     9013
     9015       -
     9017

     9003      19   Frames and mountings of other materials                    30
     100
     9005       –   Apparatus      and    equipment   for    developing        30
     9010,          photographic (including cinematographic) film on
     9014           paper in rolls or exposing developed film to roll of
                    photographic paper (photo-cameras except for movie-
                    cameras)
     9014      10   Direction finding compasses                                10
     100
91                  Clocks and watches and parts thereof

     9101       –   Wrist-watches and other watches including stop-            30
     9106           watches with case of precious metal or of metal clad
     9112      –    with precious metal
     9113

     9107  00       Time switches with clock or watch movement or with         10
     000 –          synchronous motor
     91110
     9114
     9111  10       Watch cases of precious metal or of metal clad with        30
     000            precious metal and parts thereof




                                                                                    86
92   9201      –    Musical instruments; parts and accessories of such           10
     9202           articles

93                  Arms and ammunition; parts and accessories
                    thereof

     9301      –    Military weapons other than revolvers, pistols and the       0
     9306           arms of heading No.9307
     9303 20        Other sporting, hunting or target shooting shotguns          30
                    including combination shotgun – rifles


     9307      00   Swords, cutlasses, bayonets, lances and similar arms         30
     000            and parts thereof and scabbards and sheaths
                    therefore
94                  Furniture; bedding, mattresses, mattresses
                    supports, lamps and lighting fittings not
                    elsewhere specified or included; illuminated
                    signboards, illuminated name-plates and the like




     9401           Seats (other than those of 9402) whether or not              30
                    convertible into bed and parts thereof


     9401      10   Seats of kind used for aircraft                              10
     100
     9401      10   Other                                                        10
     900
     9402           Medical, surgical, dental and veterinary furniture (for      10
                    example operating tables, hospital beds with
                    mechanical fittings, dentists chairs) and parts of these
                    articles

     9403–          Other furniture and parts thereof                            30
     9406 00
     9403    20     Other metal furniture                                        10
     100
     9403    70     Furniture of plastics                                        10
     100
     9405    10     Electric ceiling or wall lighting fittings excluding those   10
     100            of a kind used for lighting public open spaces
95                  Toys, games and sports requisites; parts and
                    accessories thereof

     9501 00 –      Wheeled toys designed for children (for example,             10
     9503,          tricycles, scooters, pedal cars); dolls carriages
     9506    –
     9508




                                                                                      87
        9504      –   Articles for funfair, table or parlor games, including   30
        9505          pintables, billiards and automatic bowling alley
                      equipment


96      9601 –        Miscellaneous manufactured articles                      30
        9618   00
        000
97      9701 –        Works of art, collectors’ pieces and antiques            30
        9706   00
        000
Source: Agency for Foreign Economic Relations.




                                                                                    88
                   Table B-2: List of Countries Having MFN Status


Austria              Finlanad      Japan         Pakistan          Switzerland
Bangladesh           France        Jordan        Portugal          The Irish Republic
Belgium              Germany       Korea         Poland            The United Kingdom
Bulgaria             Greece        Latvia        Romania           Turkey
China                Hungary       Lithuania     Saudi Arabia      USA
Czech Republic       Italy         Luxemborg     Slovak Republic   Vietnam
Denmark              India         Malaysia      Spain
Estonia              Israel        Netherlands   Sweden
Source: Agency for Foreign Economic Relations.




                                                                                        89
            Table B-3: List of Exports and Imports Subject to Licensing


No.   Brief Description of Goods                      Code, according to Trade Nomenclature of
                                                      Foreign Economic Activities
1.    Weapons and military ammunition,                8526 (only for military purposes), 8710, 8802
      special      components        for      their   (except 8802 11 100, 8802 12 100, 8802 20
      production                                      100, 8802 30 100, 8802 40 100), 8803 100
                                                      (except 8803 10 100, 8803 20 100, 8803 30
                                                      100, 8803 90 910), 8805 (except 8805 20 100),
                                                      8906 00 100, 9013 10, 9013 20, 9013 80,
                                                      9014, 9301, 9302, 9305 (only for combat
                                                      arms), 9306 (except 9306 10, 9306 29 100,
                                                      9306 29 200, 9306 29 400, 9306 30 910, 9306
                                                      30 930).
2.    Precious      metals,     alloys,    articles   2843, 3006 40 (only from precious metals),
      thereof, ores, concentrates, scrap              7106-7115, 7118 (only from precious metals)
      and   waste      of     precious     metals,    9003 19 100, 9021 29 100, 9101, 9111 10 000,
      precious natural stones and articles            9113 10 000, 9608 10 300, 9608 39 100, 9705
      thereof, waste thereof, powders and             (only coins from precious stones), 7116 (only
      recuperator     of      precious     natural    from pearl and natural precious stones), 9602
      stones, pearls and articles thereof,            (processed amber and articles thereof).
      amber and articles thereof.
3.    Uranium       and     other    radioactive      2612 (only uranium concentrates), 2844, 2845.
      substances, articles thereof, waste of
      radioactive substances.
4.    Devices and equipment employing                 2845.
      radioactive substances.
Source: Agency for Foreign Economic Relations.




                                                                                                90
      Table B-4: List of Specific Goods (and Services) the Export and Import of
                  which is subject to Permission by the Authorities


No.     Brief Description of Goods                                     Organs Authorized to
                                                                       Issue Permits
        Professional activities of citizens of the Republic of         Ministry of Labor
1.      Uzbekistan working abroad and of foreign citizens working in
        the Republic of Uzbekistan
        Imports of films, videos and audio productions                 Ministry of Culture
2.
        Export of scientific (research) works, know-how, inventions    State Committee for
3.                                                                     Science             and
                                                                       Technology
        Investment abroad                                              Agency for Foreign
4.                                                                     Economic Relations
        International transportation                                   Agency for Foreign
5.                                                                     Economic Relations
        Exports of the work of arts                                    Ministry of Culture
6.
        Exports of animals and plants entered in the Red Book of the   State Committee       for
7.      Republic of Uzbekistan                                         Nature Protection
Source: Agency for Foreign Economic Relations.




                                                                                             91
                       Table B-5: Rates of Excise Tax on Imports

                                                                            In   %    of
       Description of Goods                                                 custom price
HS                                                       TN FEA Code        of goods or
Code                                                                        in US$
04     Raw curd                                          0406               10
       Honey natural                                     0409 00 000        10
09     Coffee, roasted or unroasted, with or without a   0901               20
       caffeine
       Tea                                               0902               10
15     Vegetable oil and butter                          15                 15
16     Sausages and similar products of meat             1601     00-1602   10
                                                         (except for 1602
                                                         10 001)
       Caviar and substitutes                            160430             30

17     Sugar (except for raw sugar)                      1701 91 000,       20
                                                         170199
       Confectionery products                            170410-170490      30
                                                         300
18     Chocolate bars and candies                        180620-180690      30

19     Products from grain, starch and flour, flour      19       (except   20
       confectionery products                            190110000)
20     Products of processing of vegetables, nuts or     200110-190200,     30
       other plants                                      2002, 2006-2009


       Juices                                            2009 (except for   35, but no
                                                         2009 11 – 2009     less than 0.2
                                                         49)                US$/ liter

21     Mixed food products                               21       (except   20
                                                         210500, 2106 90
                                                         100)
22     Soft beverage, juices exception citrus)           2201, 2202         35, but no
                                                                            less than 0.2
                                                                            US$/ liter

       Beer                                              2203               45, but no
                                                                            less than 0.3
                                                                            US$/ liter
       Alcoholic drink with 25% volume (except beer)     2204-2206          90*

       Alcoholic drinks with more than 25% volume        2207**, 2208       99*

       Ethyl alcohol                                     2207               40

24     Tobacco products                                  2402               60*

27     Diesel fuel, petrol etc.                          271000250          10
                                                         271000510-
                                                         271000990
33     Perfumery                                         3303-3307          15




                                                                                      92
34   Autocar cosmetics                                     340530000           35

     Washing and cleaning products                         3402                20

40   Tires of passenger cars                               401110,             10
                                                           401210900,
                                                           401220900,
                                                           401290100
42   Products from natural and artificial leather          420212               20
     (except school brief cases and satchel)

43   Clothes and fittings from natural leather             4203                 25

     Top clothes and head-dresses from natural fur                             25
                                                           43

57   Carpets and carpet goods                              5701-5705           90

61   Knitted products of machine and hand knitting         61 (except    for   15
                                                           6111)

63   Bed linen                                             6302                20

69   Ceramic products                                      69011,      6913,   20
                                                           6914
70   Crystal crockery                                      701321              20

71   Jewelry products from precious metals etc.            7113,7114,7116      90


     Bijouterie                                                                50
                                                            7117
82   Kitchen fittings, knifes, spoons, forks and other     8211,8215           20
     from non-precious metals, including covered by
     precious metals
84   Technical Means And Equipment                         8471,8443           10
                                                             847210
85   Primary elements and primary batteries                8506                10
                                                            8520,     8521,
     Video and audio equipment                             8528                45
     Videos and audiocassette                              8523, 8524          10
     Vehicles of cellular communication              and   852520900,          10
     belonging to them                                     850440,
                                                           850720990-
                                                           850780900
87   Cars (including used cars) with volume of engine:     8703
     ***

     - up to 1000 cm3.                                     8703                2.4 US$ on
                                                                               every 1 cc of
                                                                               engine size
     - from 1000 up . to 1500 cm3                                              2.5 US$ on
                                                                               every 1 cc of
                                                                               engine size
     - from 1500 up . to 1800 cm3                                              2.6 US$ on
                                                                               every 1 cc of
                                                                               engine size




                                                                                         93
         - from 1800 up . to 3000 cm3                                               2.9 US$ on
                                                                                    every 1 cc of
                                                                                    engine size
         Over 3000 Cm3                                                              3.1 USD for
                                                                                    every 1 cc of
                                                                                    engine size
         New passenger cars produced and imported from          8703                5
         Russian Federation
         Spare parts                                            8708                10
91       Clock of all kinds                                     9101-9105           5
94       Furniture (except for medical)                         940130-940180,      15
                                                                940310-940380
         Chandeliers, lighting                                  940510              10
         Equipment
Source: Agency for Foreign Economic Relations.

Notes:

*        Rates are calculated on custom cost of goods.
**       Including ethyl alcohol, with contents of spirit in volume no less than 80 percent.
***      The specified rates are also applied to automobiles with diesel engine.




                                                                                               94
                    Table B-6: List of Goods Prohibited for Export

No.    Description                                TN FEA Code
1.     Grain: wheat, rye, barley, oats, rice,     10
       maize, corn, buckwheat
2.     Baked       products     (except     for   1905
       confectionery made of flour, pastry,
       cookies of individual production)
3.     Flour, cereals                             1101-1106
4.     Cattle, poultry                            0101-0106 (except for 0106 00 990)
5.     Meat, and meat by-products                 0201-0210
6.     Powder milk                                0402 10-0402 21
7.     Tea, tea leaves                            0902
8.     Sugar                                      1701-1702
9.     Ethyl alcohol (spirits)                    2207
10.    Antiques (paintings, sculptures and        included in group 97
       suchlike) of significant historical,
       scientific and other kind of value (as
       determined by the Ministry of Culture)
11.    Vegetable oils                             1507, 1512, 1516 (1512 11 100, 1512 21
                                                  100)
12.    Leather, skins and raw skins (except       4101-4103
       non-standard)
13.    Wastes of colored metals                   7404, 7602, 7802, 7902, 8002, 8101-8112
14.    Silkworms, raw silk, and silk waste        5001-5003
Source: Agency for Foreign Economic Relations.




                                                                                            95
 Table B-7: Exported Raw Materials not covered by Privileges and Preferences

No.    Description                                TN FEA Code
1.     Cotton, no-carded or combed; cotton        5201, 5203
       waste.
2.     Cotton yarn; cotton yarn other than        5205, 5206
       sewing thread.
3.     Cotton Lint                                1404 20 000
4.     Crude Petroleum Oil; Natural Gas           2709, 2711
5.     Petroleum Gases                            2711 21 000
6.     Electric Energy                            2716 00 000
7.     Precious metals and scrap.                 7106, 7108, 7110, 7112
8.     Non-ferrous metals, rolling of non-        7401-7411, 7413, 7501-7506, 7601, 7615,
       ferrous metals, scrap and wastes of non-   7801-7804, 7901-7905, 8001-8005, 8103-
       ferrous metals                             8112 (except 76120900)
9.     Rolling of ferrous metals, scrap and       7201-7229,       7301-7306,     (except
       wastes of ferrous metals                   721420000, 721621000, 721450990)
Source: Agency for Foreign Economic Relations.




                                                                                      96
            Table B-8: List of Goods Subject to Mandatory Certification

Description                                     TN FEA Code
Meat and edible offal, fish and shellfish,      0201-0210, 0301-0307, 99 900,
mollusks and other aquatic invertebrates,       0401-0410 00 000.
milk and milk products, birds’ eggs, natural
honey, food products of animals, not
mentioned in other places.
Vegetables and some edible roots and            0701-0714, 0801-0814, 0901-0910 99 990
tubers, edible fruits and nuts; skin and        (except for 0903), 1001-1008 90 900, 1101 00
peal of citrus and melons; coffee, tea,         000-
spices, grain, flour-grinding industry          1109 00 000.
production, malt, starch, insulin, wheat
gluten.
Animal and plant fat and oil, products of       1501 00-1522 00 990.
their splintering: prepared food fats;
animal or vegetable waxes.
Production of meat, fish or shellfish           1601 00-1605 90 900, 1701-1704 90 990,
mollusks or other aquatic invertebrates,        1801 00 000-1806 90 900, 1901-1905 90 900,
sugar and confectionery of sugar,               2001-2009 90 900, 2101-2106 90 900,
production of cereals, flour, starch and        2201-2209 00 900, 2401-2403 99 900.
milk; confectionery of flour, products of
vegetables fruits, nuts and other parts of
plants, other food products, alcoholic and
non-alcoholic drinks and vinegar, except
for ice and snow, tobacco and industrial
substitutes of tobacco.
Salt, brimstone, soils and stones, stucco       2501 00-2530 90 000.
materials, lime and cement.
Mineral fuel, oil and products of their         2701-2716 00 000.
distillation, bitumen substances, natural
wax.
Fertilizers, essential oils, perfumes,          3101 00 000-3105 90 990, 3301-3307 90 000,
cosmetic and toilet preparations, soap,         3401-3407 00 000, 3601 00-3601 00 000, 3605
organic surface-active agents, washing          00 000, 3701-3707 906 900.
preparations, lubricating preparations,
artificial and prepared waxes, polishing or
scoring preparations, candles and similar
articles, modeling pastes, “dental waxes,”
dental preparations with a basis of plaster,
explosives,       pyrotechnic      products,
matches, photographic or cinematographic
goods.
Insecticides, rodenticides, herbicides, anti-   3808-3808 90 000.
sprouting products and plant-growth
regulators, disinfectants and similar
products, put up in forms or packages for
retail sale or as preparations or articles
(for example, sulfur - treated bands, wicks
and candles, and fly-papers).
Plastics and articles thereof.                  3912-3926 90 900.
Rubber and articles thereof.                    4011 10 000, 4015 90 000.
Particle board and similar board of wood        4410-4411.
or other ligneous materials, whether or not
agglomerated with resins or other organic
binding substances.
Plywood, veneered panels and similar            4412-4412 99 900.
laminated wood.



                                                                                         97
Toilet or facial tissue stock, towel or          4803 00 4818-4823-4823 60.
napkin stock and similar paper of a kind
used for household or sanitary purposes,
cellulose wadding and webs of cellulose
fibers, paperboard.
Articles     of   apparel   and     clothing     6101-6117 90 000.
accessories (for children).
Footwear, headgear (for children).               6401-6405.
Articles of stone, plaster, cement,              6804, 6808, 6810-6811.
asbestos, mica or similar materials.
Ceramic products.                                6904, 6906 00 000, 6908-6911.
Glass and glassware.                             7008 00, 7010, 7013.
Articles of iron or steel.                       7311, 7321, 7323.
Copper and articles thereof.                     7418.
Aluminum and articles thereof.                   7615.
Nuclear reactors, boilers, machinery and         8413-8471.
mechanical appliances; parts thereof.
Electrical machinery and equipment and           8501-8548 00 000.
parts thereof; sound recorders and
reproducers, television image and sound
recorders and reproducers, and parts and
accessories thereof.
Vehicles other than railway or tramway           8701-8704, 8708, 8711, 8712,
rolling-stock, and parts and accessories         8715, 8716.
thereof.
Optical, photographic, cinematographic,          9018-9030.
measuring, checking, precision, medical or
surgical instruments and apparatus; clocks
and watches; musical instruments; parts
and accessories thereof.
Musical instruments the sound of which is        9201-9209 90 900.
produced or must be amplified electrically
(for example, organs, guitars, accordions).
Arms and ammunition; parts and                   9303-9306.
accessories thereof.
Furniture.                                       9401-9403.
Wheeled toys designed to be ridden by            9501 00-9504 30
children (for example, tricycles, scooters,      (except 9504 30 900).
pedal cars); dolls’ carriages; dolls
representing only human beings; other
toys; reduced-size (“scale”) models and
similar recreational models, video games
of a kind used with a television receiver,
other games, coin- or disc- operated, other
than bowling alley equipment.
Source: Agency for Foreign Economic Relations.




                                                                                 98
APPENDIX C

The List of Activities and Regulatory Authority Issuing Licenses
Type of Activity                                        Regulatory Authority
Development, manufacture, repair and sale of            Cabinet of Ministers
arms and ammunition, means of protection,
military equipment, spare parts and components,
devices thereof, if they are not used in other
industries, as well as special materials and
specialized equipment for production thereon
Extraction,        production,        transportation,   Cabinet of Ministers
processing, disposal and sale of uranium and
other radioactive materials as well as articles
thereof
Production of electrical energy by stationary           Cabinet of Ministers
power plants connected to the public energy
network
Liquidation (destruction, utilization, disposal) and    Cabinet of Ministers
processing of abandoned military technical
utilities
Demonstration and advertisement of military             Cabinet of Ministers
products
Tourism services                                        Cabinet of Ministers
Development, processing and marketing of oil            Cabinet of Ministers
and gas
Precious and rare metal and stone exploration           Cabinet of Ministers
services
Collection and recycling of disposable residues         Cabinet of Ministers
and wastes containing precious metals and
stones
Development, manufacture and sale of devices            Cabinet of Ministers
and        equipment      containing      radioactive
substances and isotopes
Designing and construction and assembly works,          Cabinet of Ministers
operating and repairing of atomic energy
facilities, main pipelines, bridges, tunnels as well
as military and defense facilities
Construction and exploitation of objects of highly      Cabinet of Ministers
hazardous character or facilities for the
production of potentially dangerous goods and
the production of equipment, control and alarm
systems for such facilities
Production of treasury and bank notes, coins,           Central Bank
securities (shares, bonds, etc.), orders, medals,
tokens of postal payment
Medical services                                        Ministry of Health
Sowing, cultivation and sale of crops containing        Ministry of Internal Affairs
narcotic substances
Production and sale of narcotic substances  Health Ministry upon agreement
                                            of Ministry of Internal Affairs
Production of pharmacological preparations  Health Ministry
Establishing and operating gambling houses, Finance Ministry



                                                                                       99
lotteries and the like
Transporting cargo and passengers by rail, air,      Cabinet of Ministers
sea and motor vehicles
Designing, repairing, installing, adjusting and      Ministry of Internal Affairs
servicing fire equipment and fire alarms
Production       of    movies     and    chronicle   State Joint      Stock    Company
documentaries, films on science and technology,      “Uzbekkino”
travel films, cartoons and other programs
Circulation, dubbing and sale of films and video  State Joint Stock Company
products                                          “Uzbekkino”
Film and video rental services                    State Joint Stock Company
                                                  “Uzbekkino”
Services, including intermediary services, in State Joint Stock Company
arranging production of films and video programs “Uzbekkino”
Design, construction and operation of trunk and Cabinet of Ministers
international communication lines
Legal services provided to citizens and legal Ministry of Justice
entities
Manufacture, maintenance, operation and sale of Cabinet of Ministers
ciphering and deciphering devices
Production and sale of metrological equipment     Cabinet of Ministers
Execution of topographic and cartographic works Cabinet of Ministers
Activity in the securities market as investing Central Bank
institutions
Providing expertise to construction projects      Cabinet of Ministers
Repair, construction and assembly works of high Cabinet of Ministers
construction objects through use of industrial
“mountaineering”
Services involving the certification of goods and Cabinet of Ministers
services
Engineering, architectural and surveying services Cabinet of Ministers
in connection with the construction of
manufacturing       facilities,  residential  and
agricultural projects
Educational services provided by private and Cabinet of Ministers
religious educational institutions
Repair and sale of sports rifles, firearms and Ministry of Internal Affairs
ammunition thereof and side-arms (except
national knives)
Auditing services                                 Ministry of Finance
Production of jewelry from precious metals and Cabinet of Ministers
stones
Production of perfumes, cosmetics and Ministry of Health
household chemical goods
Banking, foreign currency operations, securities, Central Bank
and credit unions
Telecommunications                                Uzbek Agency of Communication
                                                  and Information
Source: Agency for Foreign Economic Relations.




                                                                                    100
APPENDIX D


A. List of Bilateral Agreements Relating to Trade in Goods and Services with countries
other than former soviet states

   1. Agreement Between the Republic of Uzbekistan and the Republic of Austria
       On Bilateral Foreign Economic Cooperation Trade (Vienna, 7 April 1995).
   2. Economic Agreement Between the Government of the Republic of Uzbekistan
       and the Government of the Peoples Republic of China (Tashkent, 2
       January1992).
   3. Agreement Between the Government of the Republic of Uzbekistan and the
       Government of the Czech Republic on Trade and Economic Relations and
       Scientific and Technical Cooperation (Tashkent, 10 September1993).
   4. Agreement Between the Government of the Republic of Hungary on Trade
       and Economic Relations and Scientific and Technical Cooperation (Budapest,
       2 March 1992).
   5. Agreement Between the Republic of Uzbekistan and the Government of the
       Hashemite Kingdom of Jordan On Trade and Economic Cooperation
       (Amman, 23 November 1996).
   6. Trade Agreement Between the Government of the Republic of Uzbekistan
       and the Government of the Republic of Korea (Seoul, 17 June1992).
   7. Agreement between the Government of the Republic of Uzbekistan and the
       Government of the Islamic Republic of Pakistan on Trade and Economic
       Cooperation (Tashkent, 27 June 1992).
   8. Agreement between the Government of the Republic of Uzbekistan and the
       Government of the Republic of Poland on Economic Cooperation and Trade
       (Warsaw, 10 September 1992).
   9. Agreement between the Government of the Republic of Uzbekistan and the
       Government of Romania on Trade and Economic Cooperation (Tashkent, 11
       February 1994).
   10. Agreement on Cooperation in the Fields of Trade, Economics, Investment,
       Science and Technology, Culture, Sports and Youth-Related Issues Between
       the Government of the Republic of Uzbekistan and the Government of the
       Kingdom of Saudi Arabia (Riyadh, 18 November 1995).
   11. Agreement Between the Republic of Uzbekistan and the Swiss Confederation
       on Trade and Economic Cooperation (Tashkent, 16 April 1993).
   12. Agreement Between the Government of the Republic of Uzbekistan and the
       Government of the Slovak Republic on Trade, Economic, Scientific and
       Technical Cooperation (Tashkent, 16 May 1995).
   13. Agreement between the Republic of Uzbekistan and the United States of
       America on Trade Relations (Tashkent, 5 November 1993).
   14. Agreement between the Government of the Republic of Uzbekistan and the
       Government of the Socialist Republic of Vietnam on the Trade and Economic
       Cooperation (Tashkent, 3 February 1994).
   15. Trade Agreement between the Government of the Republic of Uzbekistan
       and the Government of Malaysia (Kuala-Lumpur, October 6,1997)
   16. Agreement between the Government of the Republic of Uzbekistan and the
       Government of the Republic of Bulgaria on the Trade and Economic
       Cooperation (Sofia, 24 June 1998).
   17. Agreement between the Government of the Republic of Uzbekistan and the
       Government of the Turkish Republic on the Trade and Economic Cooperation
       (Tashkent, 13 April 1998).



                                                                                  101
   18. Agreement between the Government of the Republic of Uzbekistan and the
       Government of the People’s Republic of Bangladesh on the Trade and
       Economic Cooperation (Dacca, 14 February 1998).
   19. Agreement between the Government of the Republic of Uzbekistan and the
       Government of Great Britain and Northern Ireland on Economic Cooperation
       (London, 24 November 1993).
   20. Agreement between Republic of Uzbekistan and India on the principles of
       development of economic relations and all-round cooperation (New Delhi, 5
       January 1994).
   21. Agreement between the Government of the Republic of Uzbekistan and the
       Government of the Republic of Finland on Cooperation in Trade, Economics
       and Technologies (Tashkent, 1 October 1992).
   22. Agreement between the Government of the Republic of Uzbekistan and the
       Government of the State of Israel on economic collaboration (Jerusalem,
       September 15, 1998).
   23. Agreement between the Government of the Republic of Uzbekistan and the
       Government of Vietnam on economic collaboration (Tashkent, February 3,
       1993).
   24. Agreement between the Government of the Republic of Uzbekistan and the
       Government of the Republic of Bulgaria (Sofia, June 24, 1998).
   25. Agreement between the Government of the Republic of Uzbekistan and the
       Government of the Arab Republic of Egypt on trade (Tashkent, June 19,
       2001).
   26. Agreement with the Government of the Republic of Uzbekistan and European
       community on economic cooperation (June 21, 1996).

B. List of Bilateral Agreements Relating to Trade in Goods and Services with countries
other than former soviet states

   1. Agreement between the Government of the Republic of Uzbekistan and the
   1. Government of the Republic of Azerbaijan on Free Trade (Baku, 27 May
      1996).
   2. Protocol on Withdrawals from Free Trade Treatment Attached to the
      Agreement Between the Government of the Republic of Uzbekistan and the
      Government of the Republic of Azerbaijan on Free Trade (Baku, 27 May
      1996).
   3. Agreement on Trade Relations between the Republic of Uzbekistan and the
      Republic of Bielarus (Minsk, 21 January 1993)
   4. Agreement Between the Government of the Republic of Uzbekistan and the
      Government of the Republic of Georgia on Free Trade (Tashkent, 4
      September 1995).
   5. Protocol on Withdrawals from Free Trade Treatment Attached to the
      Agreement Between the Government of the Republic of Uzbekistan and the
      Government of the Republic of Georgia on Free Trade (Tashkent, 4
      September, 1995). (Tashkent, 4 September 1996).
   6. Agreement Between the Government of the Republic Uzbekistan and the
      Government of the Republic of Kazakhstan on Free Trade (Almaty, 2 June
      1997).
   7. Protocol on Withdrawals from Free Trade Treatment Attached to the
      Agreement Between the Government of Uzbekistan and the Government of
      the Republic of Kazakhstan on Free Trade of June 2, 1997 (Amaty, 2
      June1997).
   8. Agreement Between the Government of Uzbekistan and the Government of
      the Republic of Kazakhstan on putting in order of the matters of trade and
      economic cooperation (Almaty, 24 August, 1994).


                                                                                  102
   9. 9 . Agreement Between the Government of the Republic of Uzbekistan and
       the Government of the Republic of Kyrgyzstan on Free Trade (Tashkent, 24
       December 1996).
   10. Protocol on Withdrawals from Free Trade Treatment Attached to the
       Agreement Between the Government of the Republic of Uzbekistan and the
       Government of the Republic of Kyrgyzstan on Free Trade of 24 December
       1996 (December 24 1996).
   11. Agreement Between the Government of the Republic Uzbekistan and the
       Government of the Republic of Moldova on Free Trade (Kishinev, March 30,
       1995).
   12. Protocol on Withdrawals from Free Trade Treatment Attached to the
       Agreement Between the Government of the Republic of Uzbekistan and the
       Government of the Republic of Moldova on Free Trade of 30 March 1995
       (Kishinev, March 30, 1995).
   13. Agreement on trade relations between the Republic of Uzbekistan and
       Russian Federation (Moscow, 13 November 1992)
   14. Protocol on Withdrawals from Free Trade Treatment Attached to the
       Agreement Between the Government of the Republic of Uzbekistan and the
       Government of the Russian Federation on Free Trade (Moscow, November 5,
       1993).
   15. Agreement Between the Government of Uzbekistan and the Government of
       the Republic of Tajikistan on Free Trade (Tashkent, 10 January 1996).

   16. Protocol on Withdrawals from Free Trade Treatment Attached to the
       Agreement Between the Government of Uzbekistan and the Government of
       the Republic of Tajikistan on Free Trade (Tashkent, 10 January1996).
   17. Agreement Between the Government of the Republic of Uzbekistan and the
       Government of Turkmenistan on the Main Trends of Long-Term Economic
       Cooperation (Chardjzow, 16 January 1996).
   18. Agreement Between the Republic of Uzbekistan and Ukraine on Free Trade
       (Tashkent, 29 December 1994).
   19. Protocol on Withdrawals from Free Trade Treatment Attached to the
       Agreement Between the Government of Uzbekistan and the Government of
       Ukraine on Free Trade of December 29, 1994 (Kiev, February 18, 1995).
   20. Agreement Between the Republic of Uzbekistan and Ukraine on the
       Deepening of Economic Integration (Tashkent, 20 June 1995).
   21. Agreement between the Government of the Republic of Uzbekistan and the
       Government of the Republic of Estonia on Trade and Economic Cooperation
       (Tashkent, September 17, 1992).
   22. Agreement between the Government of the Republic of Uzbekistan and the
       Government of the Republic of Lithuania on Trade and Economic
       Cooperation (Vilnius, June 7, 1995).
   23. Agreement between the Government of the Republic of Uzbekistan and the
       Government of the Republic of Latvia on Trade and Economic Cooperation
       (Tashkent, August 18, 1992)

C. List of Multilateral Agreements Relating to Trade in Goods and Services

   1. Agreement on Cooperation in the Field of Regulation of Transit Shipments
      between the Republics of Uzbekistan, Azerbaijan, Georgia and Turkmenistan
      of 13 May 1996.
   2. Agreement on the Coordination of Railway Transport between the Republics
      of Uzbekistan, Azerbaijan, Georgia and Turkmenistan of 13 May 1996.
   3. Agreement between the Government of the Republic of Uzbekistan,
      Government of the People’s Republic of China and the Government of the


                                                                             103
       Republic of Kyrgyzstan on International Motor Transport Communication
       (Tashkent, 19 February 1998).

D. List of Economic Integration Agreements

   1. CIS Agreement on the Creation of an Economic Union (Moscow, 24
       September 1993).
   2. CIS Agreement Establishing an Inter-State Eurasia Union of Coal and Metal
       (Moscow, 24 September 1993).
   3. Agreement on Cooperation in the Sphere of Copyright and related rights
       (within CIS, Moscow, 24 September, 1993).
   4. Agreement Within the CIS on Cooperation in the Sphere of Investment
       Activities (Ashgabat, 24 December 1993).
   5. CIS Agreement on Coordinated Antimonopoly Policy (Ashgabat, 23
       December 1993).
   6. Agreement Among the Governments of State-Participants in the CIS on
       Coordinated Principles of Tax Policy (Moscow, 13 March 1992).
   7. CIS Agreement on Assistance in Creation and Development of Production,
       Commercial, Credit-Financial, Insurance and Mixed Transnational
       Establishments (Moscow, 15 April 1994).
   8. CIS Agreement on Goods Turnover and Production Cooperation in the
       Sphere of Machinery on an Inter-Related Basis (Moscow, 9 December 1994).
   9. Agreement on the Creation of a Common Economic Area among the
       Republic of Uzbekistan, the Republic of Kazakhstan and the Kyrgyz Republic
       (Cholpon-Ata, 30 April 1994).
   10. Agreement between the Republic of Kazakhstan, Republic of Kyrgyzstan and
       Republic of Uzbekistan on Establishment of Central Asian Bank for
       Cooperation and Development (Almaty, July 8, 1994).
   11. Protocol decision of the Session of the Council of Prime Ministers of the
       Republic of Kazakhstan, Republic of Kyrgyzstan and Republic of Uzbekistan
       (on approval of the Program of economic integration, approval of the list of
       investment projects, approval of schedule for development and examination
       of documents for implementation of the Agreement on Creation of a Common
       Economic Area, etc. ) (Bishkek, 24 April 1995).
   12. Decision on practical measurements for further deepening of economic
       integration of the states-participants to the Agreement on Creation of a
       Common Economic Area (within the limits of CEA) (Cholpon-Ata, 24 July
       1997)
   13. Concept on principles of interaction of the Republic of Kazakhstan, Republic
       of Kyrgyzstan and Republic of Uzbekistan for establishment of international
       syndicates (Akmola, 12 December 1997).
   14. Agreement on common agrarian market of the states-participants to the
       Community of Independent States (Moscow, 6 March, 1998, with reserves in
       Preamble, Articles 1, 3, 6 and 10).
   15. Agreement on Cooperation in interruption of infringements of the law in the
       sphere of intellectual property (Moscow, 6 March 1998).
   16. Decision on the Program of immediate actions of the Republic of Kazakhstan,
       Republic of Kyrgyzstan and Republic of Uzbekistan for creation of the
       Common Economic Area for 1998 (Bishkek, 17 March 1998).
   17. Protocol on joining of the Republic of Tajikistan to the Agreement on creation
       of Common Economic Area between the Republic of Kazakhstan, Republic of
       Kyrgyzstan and Republic of Uzbekistan of 30 April 1994 (Tashkent, 26 March
       1998).
   18. Decision on International Water and Power Syndicate (Tashkent, 26 March
       1998).


                                                                                 104
   19. Agreement between the Republic of Kazakhstan, Republic of Kyrgyzstan and
       Republic of Uzbekistan on Common principles for creation of the Securities
       Market (Tashkent, 26 March 1998).
   20. Tashkent Declaration on Special UN Program for economies of Central Asia
       (SPECA) (Tashkent, 26 March 1998).

E. Other Bilateral Agreements Indirectly Relating to Trade in Goods and Services

Foreign countries:

   1. Protocol Between the Government of the Republic of Uzbekistan and the
       Government of the Islamic Republic of Afghanistan on Trade and Economic
       Cooperation (Tashkent, 13 October 1992).
   2. Agreement on Economic, Technical and Scientific Cooperation Between the
       Government of the Republic of Uzbekistan and the Government of the Arab
       Republic of Egypt (Cairo, 16 December 1992).
   3. Agreement on Economic and Technological Cooperation Between the
       Government of the Republic of Uzbekistan and the Government of the Greek
       Republic (1 April, 1997).
   4. Joint Declaration on Economic Cooperation between the Republic of
       Uzbekistan and the Italian Republic (Tashkent, 3 May 1997).
   5. Joint Protocol between the Republic of Uzbekistan and the Kingdom of
       Netherlands on Economic Cooperation (The Hague, 9 June 1993).
   6. Agreement between the Government of the Republic of Uzbekistan and the
       Government of the Republic of Indonesia on Economic and Technical
       Cooperation (Jakarta, 23 June 1992).
   7. Agreement on Trade Cooperation between the Government of the Republic of
       Uzbekistan and the Government of the Islamic Republic of Iran (Teheran, 25
       November 1992).
   8. Agreement on Economic and Technical Cooperation between the
       Government of the Republic of Uzbekistan and the Government of Malaysia
       (Kuala-Lumpur, 20 June 1992).
   9. Agreement on Copyright and Related Rights between the Government of the
       Republic of Uzbekistan and the Government of the Turkish Republic
       (Tashkent, 13 April 1998).
   10. Agreement on International Motor Transport of Passengers and Cargo
       between the Government of the Republic of Uzbekistan and Government of
       the Republic of Bulgaria (Sofia, 24 June 1998).
   11. Memorandum between the Government of the Republic of Uzbekistan and
       the Government of the Republic of Bulgaria on Cooperation in the Sphere of
       Transport (Sofia, 24 June 1998).
   12. Agreement on Partnership and Cooperation establishing partnership between
       the Republic of Uzbekistan, on the one part, and European Communities and
       their states-participants, on the other part (Florence, 21 June 1996).
   13. Intermediate Agreement on Trade and Trade Relations between the Republic
       of Uzbekistan, on the one part, and European Community, European Union of
       Coal and Steel and European Union for Atomic Energy, on the other part
       (Brussels, 14 November 1996).
   14. Agreement between the Republic of Uzbekistan and CEC on Cooperation in
       the Sphere of Trade of Textile Goods (initialized on 8 July 1993, 23 February
       1995 and 4 December 1995).
   15. Agreement on European Energy Charter (Brussels, 5 April 1995).

CIS countries:




                                                                                   105
16. Agreement between the Government of the Republic of Uzbekistan and the
    Government of Azerbaijan Republic on Industrial Cooperation (Baku, 27 May
    1996)
17. Agreement Between the Government of the Republic of Uzbekistan and the
    Government of Azerbaijan Republic on Cooperation and Mutual Assistance in
    Customs Affairs (Baku, 27 May 1996).
18. Agreement Between the Government of the Republic of Uzbekistan and the
    Government of Azerbaijan Republic on Cooperation and Mutual Assistance in
    the Sphere of Currency, Export and Import Control (Baku, 26 February 1998).
19. Agreement Between the Government of the Republic of Uzbekistan and the
    Government of Azerbaijan Republic on Principles of Indirect Tax Collection
    during export and import of goods (works, services) (Baku, 27 May 1996).
20. Agreement Between the Government of the Republic of Uzbekistan and the
    Government of Azerbaijan Republic on Cooperation in the Sphere of Struggle
    against Economic and Financial Infringements (Baku, 27 May 1996).
21. Agreement Between the Government of the Republic of Uzbekistan and the
    Government of Azerbaijan Republic on Cooperation in the Sphere of
    Protection of Industrial Property (Tashkent, 18 June 1997).
22. Agreement Between the Government of the Republic of Uzbekistan and the
    Government of Azerbaijan Republic on Cooperation in the Sphere of
    Copyright and Related Rights (Tashkent, 18 June 1997).
23. Agreement Between the Government of the Republic of Uzbekistan and the
    Government of Azerbaijan Republic on Non-Trade Payments (Baku, 27 May
    1996).
24. Agreement Between the Government, Central Bank of the Republic of
    Uzbekistan and the Government, National Bank of Azerbaijan Republic on
    Settlement of Liabilities for 1992-1994 (Tashkent, 18 June 1997).
25. Agreement Between the Government, Central Bank of the Republic of
    Uzbekistan and the Government, National Bank of Azerbaijan Republic on
    Arrangement of Settlements (Tashkent, 18 June 1997).
26. Agreement Between the Government, Central Bank of the Republic of
    Uzbekistan and the Government, National Bank of the Republic of Belarus on
    Settlement of Liabilities and Demands for 1992-1993 (March 5, 1994).
27. Agreement Between the Government of the Republic of Uzbekistan and the
    Government of the Republic of Belarus on Non-Trade Payments (Tashkent,
    22 December 1994).
28. Agreement Between the Government of the Republic of Uzbekistan and the
    Government of Georgia on Fundamentals of Relations in the Sphere of
    Customs (Tashkent, 4 September, 1995).
29. Agreement Between the Government of the Republic of Uzbekistan and the
    Government of Georgia on Cooperation and Mutual Assistance in Customs
    Affairs (Tbilisi, 28 May 1996).
30. Agreement Between the Government of the Republic of Uzbekistan and the
    Government of Georgia on Cooperation in the Sphere of Protection of
    Industrial Property (Tbilisi, 28 May 1996).
31. Agreement Between the Government of the Republic of Uzbekistan and the
    Government of Georgia on Fundamentals of the Main Principles for
    Establishment of Financial and Industrial Groups (Tbilisi, 28 May 1996).
32. Agreement Between the Government of the Republic of Uzbekistan and the
    Government of Georgia on Non-Trade Payments (Tbilisi, 28 May 1996).
33. Agreement Between the Government of the Republic of Uzbekistan and the
    Government of Georgia on Industrial Cooperation (Tashkent, 4 September,
    1995).




                                                                           106
34. Agreement Between the Government and Central Bank of the Republic of
    Uzbekistan and the Government and National Bank of the Republic of
    Georgia on Arrangement of Settlements (Tashkent, 4 September, 1995).
35. Agreement Between the Government of the Republic of Uzbekistan and the
    Government of the Republic of Kazakhstan on Non-Trade Payments (Almaty,
    29 July 1993).
36. Agreement Between the Government of the Republic of Uzbekistan and the
    Government of the Republic of Kazakhstan on Measurements for Deepening
    of Economic Integration for 1994-2000 (Almaty, 28 July 1993).
37. Agreement Between the Government and Central Bank of the Republic of
    Uzbekistan and the Government and National Bank of the Republic of
    Kazakhstan on Mutual Commitments and Mutual Support Due to Introduction
    of National Currencies by the Republic of Uzbekistan and the Republic of
    Kazakhstan (Almaty, 10 November 1993).
38. Agreement Between the Government of the Republic of Uzbekistan and the
    Government of the Republic of Kazakhstan on Regulation of Mutual
    Settlements for Results of Trade and Economic Cooperation for 1992-1993
    (Tashkent, 10 January 1994).
39. Agreement Between the Government and Central Bank of the Republic of
    Uzbekistan and the Government and National Bank of the Republic of
    Kazakhstan on Arrangement of Settlements Due to Introduction of National
    Currency by the Republic of Uzbekistan - Sum (Almaty, 24 August 1994).
40. Agreement Between the Government of the Republic of Uzbekistan and the
    Government of the Republic of Kazakhstan on Cooperation in the Sphere of
    Protection of Industrial Property (Almaty, 2 June 1997).
41. Agreement Between the Government of the Republic of Uzbekistan and the
    Government of the Republic of Kazakhstan on Transit Transportation of
    Passengers, Cargo and Luggage, Guarantee of Undamaged State and Safety
    During Movement by Roads and Railways of the Republic of Uzbekistan and
    the Republic of Kazakhstan (Tashkent, 25 July 1997).
42. Agreement Between the Government of the Republic of Uzbekistan and the
    Government of the Republic of Kazakhstan on the Use of Certain Sectors of
    Roads (Tashkent, 27 March 1998).
43. Agreement Between the Government of the Republic of Uzbekistan and the
    Government of the Republic of Kazakhstan on Transit Transportation of
    Passengers, Cargo and Luggage, Guarantee of Undamaged State and Safety
    During Movement by Roads and Railways of the Republic of Uzbekistan and
    the Republic of Kazakhstan (Tashkent, 27 March 1998).
44. Agreement Between the Government of the Republic of Uzbekistan and the
    Government of the Republic of Kazakhstan on Regulation of Liabilities and
    Demands for 1992 (Tashkent, 27 March 1998).
45. Agreement Between the Government of the Republic of Uzbekistan and the
    Government of the Republic of Kazakhstan on Supply of Kazakhstan Grain to
    the Republic of Uzbekistan (Tashkent, 27 March 1998).
46. Agreement Between the Government of the Republic of Uzbekistan and the
    Government of the Republic of Kyrgyzstan on Re-Registration of
    Indebtedness of the Republic of Kyrgyzstan for Technical Credits as per
    Results of 1992 and January – May, 1993 (Tashkent, 14 June 1993).
47. Agreement Between the Government of the Republic of Uzbekistan and the
    Government of the Republic of Kyrgyzstan on Non-Trade Payments
    (Tashkent, June 15, 1993).
48. Declaration on Development and Deepening of Integration of Economies of
    the Republic of Uzbekistan and the Republic of Kyrgyzstan for the Years
    1994-2000 (Osh, 14 August 1993).



                                                                         107
49. Agreement Between the Government of the Republic of Uzbekistan and the
    Government of the Republic of Kyrgyzstan on Industrial Cooperation
    (Bishkek, 4 September 1996).
50. Agreement Between the Government of the Republic of Uzbekistan and the
    Government of the Republic of Kyrgyzstan on Regulation of Liabilities and
    Demands for 1992 (Bishkek, 28 September 1996).
51. Agreement Between the Government of the Republic of Uzbekistan and the
    Government of the Republic of Kyrgyzstan on Exchange of Information in the
    Sphere of Currency and Export Regulation (Tashkent, 24 December 1996).
52. Agreement Between the Government of the Republic of Uzbekistan and the
    Government of the Republic of Kyrgyzstan on Protection of Industrial Property
    (Tashkent, 24 December 1996).
53. Agreement Between the Government of the Republic of Uzbekistan and the
    Government of the Republic of Moldova on Non-Trade Payments (Kishinev,
    30 March 1995).to the Republic of Uzbekistan by Supplies of Agricultural
    Products (Bishkek, 8 September 1997).
54. Agreement Between the Government of the Republic of Uzbekistan and the
    Government of the Republic of Kyrgyzstan on Principles of Collection of
    Indirect Taxes During Export and Import of Goods (Works, Services)
    (Bishkek, 20 September 1997).
55. Agreement Between the Government of the Republic of Uzbekistan and the
    Government of the Republic of Kyrgyzstan on Supplies of Natural Gas and
    Economic Cooperation in 1998 (Tashkent, 5 January 1998).
56. Agreement Between the Government of the Republic of Uzbekistan and the
    Government of the Republic of Moldova on Non-Trade Payments (Kishinev,
    30 March 1995).
57. Agreement Between the Government of the Republic of Uzbekistan and the
    Government of the Republic of Moldova on the Main Principles of
    Establishment of Financial and Industrial Groups (Tashkent, 24 May 1997).
58. Agreement Between the Government of the Republic of Uzbekistan, Central
    Bank of the Republic of Uzbekistan, and the Government of Moldova and
    National Bank of Moldova on Regulation of Liabilities and Demands for 1992
    before Opening of Correspondent Accounts (Tashkent, 24 May 1997).
59. Agreement Between the Government of the Republic of Uzbekistan and the
    Government of the Republic of Moldova on Principles of Trade and Economic
    Cooperation for the Years 1998-2000 (Kishinev, 10 February 1998).
60. Agreement Between the Government of the Republic of Uzbekistan and the
    Government of the Republic of Moldova on Cooperation and Mutual
    Assistance in the Matters of Observation of Tax Code (Kishinev, 10 February
    1998).
61. Agreement Between the Government of the Republic of Uzbekistan and the
    Government of the Republic of Moldova on Industrial Cooperation (Kishinev,
    10 February 1998).
62. Agreement Between the Government of the Republic of Uzbekistan and the
    Government of the Russian Federation on Mutual Establishment of Trade
    Representations (Moscow, 13 November 1992).
63. Agreement Between the Government of the Republic of Uzbekistan and the
    Government of the Russian Federation on Cooperation and Mutual
    Assistance in the Sphere of Currency and Export Control ( 22 October 1996).
64. Agreement Between the Government of the Republic of Uzbekistan, Central
    Bank of the Republic of Uzbekistan, and the Government of the Russian
    Federation, Central Bank of the Russian Federation on Measurements for
    Guarantee of Mutual Convertibility and Stabilization of Rates of the Uzbek
    Sum and Russian Ruble (Tashkent, 27 July 1995).



                                                                             108
65. Agreement Between the Government of the Republic of Uzbekistan and the
    Government of the Russian Federation on Establishment of Trans-National
    Financial and Industrial Group “Ilyushin” (Tashkent, 27 July 1995).
66. Agreement Between the Government of the Republic of Uzbekistan and the
    Government of the Russian Federation on Cooperation in the Sphere of
    Protection of Industrial Property (Tashkent, 27 July 1995).
67. Agreement Between the Government of the Republic of Uzbekistan and the
    Government of the Russian Federation on the Main Principles and Trends of
    Economic Cooperation for the Period of 1998-2000 (Moscow, 12 March
    1997).
68. Agreement Between the Government of the Republic of Uzbekistan and the
    Government of the Russian Federation on the Main Principles for
    Establishment of Financial and Industrial Groups (Tashkent, 17 March 1995).
69. Agreement Between the Government of the Republic of Uzbekistan and the
    Government of the Russian Federation on Cooperation in the Sphere of
    Protection of Industrial Property (Tashkent, 27 July 1995).
70. Agreement Between the Government of the Republic of Uzbekistan and the
    Government of the Russian Federation on Cooperation and Mutual
    Assistance in Customs Affairs (Moscow, 2 March 1994).
71. Agreement on Deepening of Economic Integration Between the Government
    of the Republic of Uzbekistan and the Government of the Russian Federation
    (Moscow, 2 March 1994).
72. Agreement Between the Government and Central Bank of the Republic of
    Uzbekistan and the Government and National Bank of the Republic of
    Tajikistan on Regulation of Liabilities for 1992-1993, and on Re-Registration
    of Indebtedness as the State Credit Granted to the Government of the
    Republic of Tajikistan (Tashkent, 21 April 1994).
73. Agreement Between the Government of the Republic of Uzbekistan and the
    Government of the Republic of Tajikistan on Mutual Settlements and Supplies
    of Gas in 1998, and the State Debt of the Republic of Tajikistan (Tashkent, 4
    January 1997).
74. Agreement Between the Government of the Republic of Uzbekistan and the
    Government of the Republic of Turkmenistan on the Main Principles for
    establishment of Financial and Industrial Groups (Chardjzow, 16 January
    1996).
75. Agreement Between the Government of the Republic of Uzbekistan and the
    Government of the Republic of Turkmenistan on Cooperation and Mutual
    Assistance in Customs Affairs (Chardjzow, 16 January 1996).
76. Agreement Between the Government of the Republic of Uzbekistan and the
    Government of the Republic of Turkmenistan on the Cooperation in the
    Matters of Water Management (Chardjzow, 16 January 1996).
77. Agreement Between the Government of the Republic of Uzbekistan and the
    Government of the Republic of Turkmenistan on Mutual Settlements for
    Transit of Goods by Railway Transport in 1997 (Tashkent, 10 June 1997).
78. Agreement Between the Government of the Republic of Uzbekistan and the
    Government of the Republic of Turkmenistan on Trade and Economic
    Relations and Mutual Settlements in 1997 (Tashkent, 30 March 1998).
79. Agreement Between the Government of the Republic of Uzbekistan and the
    Government of Ukraine on Industrial Cooperation (Tashkent, 6 September
    1994).
80. Agreement Between the Government of the Republic of Uzbekistan and the
    Government of Ukraine on Cooperation in the Customs Affairs (Tashkent, 5
    December 1996).




                                                                             109
    81. Agreement Between the Government and Central Bank of the Republic of
        Uzbekistan and the Government and National Bank of Ukraine on Regulation
        of Mutual Settlements for the years 1992-1993 (Kiev, 18 April 1997).
    82. Agreement Between the Government of the Republic of Uzbekistan and the
        Government of Ukraine on Non-Trade Payments (Tashkent, 20 February
        1993).
    83. Agreement Between the Government and Central Bank of the Republic of
        Uzbekistan and the Government and National Bank of Ukraine on
        Arrangement of Settlements (Kiev, 18 April 1997).
    84. Agreement Between the Government of the Republic of Uzbekistan and the
        Cabinet of Ministers of Ukraine on Cooperation in the Sphere of Protection of
        Intellectual Property (Kiev, 19 February 1998).
    85. Agreement Between the Government of the Republic of Uzbekistan and the
        Cabinet of Ministers of Ukraine on Transit to Ukraine of Turkmenistan Natural
        Gas from the Republic of Uzbekistan to Ukraine (Kiev, 19 February 1998).
    86. Agreement Between the Government of the Republic of Uzbekistan and the
        Cabinet of Ministers of Ukraine on Supplies of Natural gas from the Republic
        of Uzbekistan to Ukraine (Kiev, 19 February 1998).

Source: Agency for Foreign Economic Relations.




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                           BIBLIOGRAPHY


1. Asian Development Bank, “Asian Development Outlook”. Various Issues.

2. Economic Cooperation Organization (2000), Annual Economic Report.

3. Government of Uzbekistan (2002), “Trade Policy Document Submitted to the
   WTO”. Translated from Russian.

4. Hoekman, Bernard et. al. (ed.) (2002), “Development, Trade, and WTO: A
   Handbook”. World Bank: Washington D.C.

5. International Monetary Fund (2000), “Republic of Uzbekistan: Recent
   Economic Developments”. IMF Staff Country Report No. 00/36.

6. NEA Transport Research and Training (2002), “Central Asia Trade and
   Transport Facilitation Study: Uzbekistan National Report”.

7. NEA Transport Research and Training (2002), “Central Asia Trade and
   Transport Facilitation Study: Synthesis Report”.

8. Pricewaterhouse Coopers (2002), “Uzbekistan: A Business and Investment
   Guide”.

9. U.S. Department of Commerce (2002), “Uzbekistan Country Commercial
   Guide”.




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