Armenia Customs Reform and Modernization

On September 21, 1991 Armenia became independent from the Soviet Union. Since then, the country has been a model of reform among former Soviet Republics. Nonetheless, Armenia retains a large deficit, which is partially funded by multilateral and bilateral credits. However, these credits are not sufficient to liberate the Armenian economy from its burdensome deficit. The Armenian government therefore envisions the partial funding of this deficit through open-market operations. In order to liberalize trade, which will improve the welfare of the country, it is necessary for Armenia to become a fully integrated member of the World Trade Organization (WTO), signing on to the recently negotiated and ratified Uruguay Round.

One step toward WTO membership for Armenia involves bringing Armenian customs laws, regulations, and procedures into conformity with the WTO norms. Customs is an essential instrument of national and international policy that must manage ever-increasing complexity and levels of transactions with ever-decreasing resources. Realizing the need for this legislative revamping, the WTO Department of the Ministry of Trade and Industry solicited expert technical assistance to define the changes and developments that will have to be made for WTO accession. The U.S. Agency for International Development (USAID) realizes the benefits WTO Member countries share. Ttherefore, in collaboration with the Center for Economic Policy Research and Analysis (CEPRA) under the Institutional Reform and the Informal Sector (IRIS) Center, USAID has launched a Customs Reform and Modernization Program to bring Armenia in the WTO. In turn, these organizations have asked for the support and expertise of MetaMetrics to achieve their goals.

Armenia has committed to an overhaul of customs legislation and administration in its last negotiating efforts for WTO accession. This commitment includes a primary focus on legislation pertaining to the classification and valuation of imports as well as rules concerning the country of origin of products. Under Chief of Party Tom Timberg, MetaMetrics sent Mr. James Fooks to Armenia to assist in the drafting and review of this new legislation in the first phases of this CEPRA effort.

Mr. Fooks met with officials from the International Monetary Fund and UNCTAD to obtain information on recent initiatives of the Ministry of Finance of the Public of Armenia. Jim Fooks used these resources to collect data and information necessary to complete his tasks.

During his stay, two Models for the Law were formed to support implementation of the Customs Valuation and Origin. In forming these models many regulations of the Republic were reviewed to understand the current status of the legislation and the scope of the rewriting necessary. Interviews and discussions with the officials of the Ministry of Industry and Trade were held to ensure complete compliance and cooperation with the new legislation.

Recommendations to Armenia for WTO integration included the identification of training requirements and the composition of a training packet to prepare Customs Department of the Ministry of Finance to the changes that will ensue after accession to the WTO. To ensure compliance with the WTO standards, Mr. Fooks has recommended developing these Customs regulations and training procedures using materials from the World Customs Organization (WCO). It was also recommended that the Government of Armenia participate actively in the work and procedures of Origin Sub Committee and the Valuation Committee of the WCO. This will allow for a smoother implementation process.

ABOUT THE WCO

The Mission of the WCO is as follows: "The World Customs Organization is an independent intergovernmental body with world-wide membership whose mission is to enhance the effectiveness and efficiency of Customs administrations in the areas of compliance with trade regulations, protection of society and revenue collection, thereby contributing to the economic and social well-being of nations."

The World Customs Organization focuses on Customs reform; more specifically with the key strategic plan of the Customs Reform and Modernization Programme (CRM). This program consists of four encompassing steps to assist with comprehensive custom reform efforts. These four stages are entry, diagnosis and planning, implementation, and evaluation.

The benefits of the WCO include accommodating Customs administrations who are being faced with high expectations from their governments to take on complex roles due to the demand for more efficient and effect economic Customs administrations.

RECENT DEVELOPMENTS

CEPRA continues to work with the Armenian Ministry of Industry and Trade to continue the pursuit of WTO entry. It has, however, been stressed that other parts of the Armenian customs systems need to be further developed in order to compliment the existing legislation. Therefore, MetaMetrics has assigned Mr. Manuel Henriques to Armenia to support these continuing efforts. He will work on further elaboration of the Country of Origin legislation.

RELATED WEB SITES

Home Page of Armenia
This site is useful in searching for information relating to Armenia, including Armenian history and culture.

ARMENPRESS
Find recent news articles about Armenia as well as photos and business updates.

World Trade Organization
For an overview of the World Trade Organization and related organizations, visit this site.

U.S. State Department Human Rights Reports
The U.S. Department of State issues yearly reports on human rights practices throughout the world that also include recent histories and summaries of current political process. Go directly to the report for Armenia.