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Economic policy

ECONOMIC POLICY

 

Liberal foreign trade policy is one of the major principles of the economic policy of Georgia.


The Government of Georgia implemented reforms in tariff policy as well as in technical regulations sphere. As a result, nowadays Georgia has one of the most liberal foreign trade policies in the world, which implies the facilitated foreign trade regimes and customs procedures, low import tariffs and minimal non-tariff regulations.

 

 

 Existing Trade Regimes in Georgia

 

  • Most Favored Nations (MFN)

 

Majority of the trade partners of Georgia are members of World Trade Organization (WTO), thus among the WTO member States (158 countries) trade relations are regulated on the basis of MFN principles.

 

  • Generalized System of Preferences (GSP)

 

Major essence of Generalized System of Preferences is to establish low rate tariffs of the base import on goods imported from the beneficiary countries, which facilitates access of goods from developing countries to the markets of developed countries.

Georgia is the beneficiary of GSP regime of the following countries: European Union, USA, Japan, Canada, Switzerland and Norway.

 

  • Free Trade Regime

 

Free Trade Regime implies liberation of trade from custom import taxes among the contracting parties, except the agreed exceptions.


Georgia has free trade regime with all CIS countries and Turkey.

 

 

 



Multilateral International Agreements on Free Trade

 

Free trade regimes among the CIS countries, except Russian Federation, are regulated by the Multilateral Agreement on Creation of Free Trade Zone among the CIS countries (1994), and also in bilateral format with those countries Georgia has signed the bilateral agreements thereto.


Georgia is also a member of the multilateral Agreement on Creation of Free Trade Zone in the frame of the  Organization for Democracy and Economic Development GUAM (2002).

 

Bilateral International Agreements on Free Trade

 

Georgia has signed Free Trade Agreements with the following countries: Russian Federation, Azerbaijan, Armenia, Ukraine, Moldova, Kazakhstan, Uzbekistan, Turkmenistan, and Turkey.


Thus, the existing free trade regimes with Russian Federation and Turkey, unlike the other countries, envisage exceptions, in particular,the removal of certain goods from the free trade regime.

 

 

Legislation of Georgia and International Agreements in the Sphere of Foreign Trade

 

  • ·         Tariff Policy on Import

 

Georgia has one of the worlds most liberal and competitive trade regimes.  In accordance with the changes in the legislation, from 1 September 2006 tariffs on import decreased from 16 tariff rates to 3 (0%, 5% and 12%). Tariffs on import were abolished on about 85 % of goods. There are no seasonal tariffs as well. Tariffs on imported goods are adjusted by the Article XXVIII of the Tax Code of Georgia.

 

  • ·         Tariff Policy on Export

 

According to the Georgian legislation, export and re-export from Georgia are free from customs duties. Hence, that since 1 September 1997 Georgia imposes value added tax (VAT) based on the principle of country of destination, the export from Georgia is free from VAT.

 

 

  • ·         Indirect Tax

 

According to the Tax Code of Georgia, value added tax and excise duty are equal for local and imported goods.

 

  • ·         Licenses and Permits

Based on the Law of Georgia on Licenses and Permits, the legislation does not consider any non-tariff limitations in foreign trade (licenses, quotas, prohibitions and other) except, when restrictions are necessary for healthcare, security and environment protection purposes. Specifically, the following licenses and permits are issued:

  • Permit on Import of goods subject to phytosanitary and veterinary control (Ministry of Agriculture of Georgia)
  • License on Export-Import of means of electronic surveillance (Ministry of Internal Affairs of Georgia)
  • Permit on Import, Export, Re-export or Transit of materials of limited circulation (Ministry of Environment of Georgia)
  • Permit on Import, Exportor Transit of nuclear and radioactive objects, nuclear materials, radioactive substances, radioactive wastes and minerals (subsoil) (Ministry of Energy and Natural Resources of Georgia).
  • Permit on Import, Export, Re-export, and Transit of arms and ammunition (Ministry of Defense of Georgia)
  • Permit on Import, Export, Re-export orTransit  of dual use items (Ministry of Economy and Sustainable Development of Georgia, Ministry of Finance of Georgia - law, list, rules of issuance)
  • Permit on Import or Export of medicines and pharmaceuticals subject to special control (Ministry of Labor, Health and Social Affairs of Georgia)
  • Permit on Import of non-iodized salt(Ministry of Labor, Health and Social Affairs of Georgia)
  • Permit on Import, Export, Re-export, and Introduction from the Sea of Species, Their Parts and Derivatives Included in the Annexes of the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) (Ministry of Environment Protection of Georgia).


The export of goods of cultural value, which are included in the list determined by the Ministry of Culture and Monument Protection of Georgia, is prohibited.

 

 

  • ·         Certificates of Origin

 

Exportation of goods from the economic territory of Georgia and issuance of Certificates of Origin is regulated by the provisions of the Decree №420 of the Government of Georgia, dated 29 December 2010.


For goods exported from Georgia, except the winery products, the Certificates of Origin are issued by:

  • Ministry of Economy and Sustainable Development of Georgia;
  • LEPL Revenue Service of the Ministry of Finance of Georgia  (http://www.mof.ge/);
  • LEPL Georgian Chamber of Commerce and Industry (http://gcci.ge/);
  • Ministry of Finance and Economy of the Autonomous Republic of Ajara (http://mofea.ge/).

While exporting the winery products, Certificates of Origin are issued by LEPL The National Wine Agency Ministry of Agriculture of Georgia in accordance with the regulation determined by the Ministry of Agriculture of Georgia.

 

 

Foreign Trade Analysis of Georgia

Foreign trade turnover of Georgia in 2012 compared with the 2011 year has increased by 11% and amounted to 10219 million USD.

  • Export increased by 9% and amounted to 2377 million USD.
  • Import increased by 11% and amounted to 7842 million USD.

 
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