The European Union’s Tacis TRACECA program

1. Common Legal Basis for Transit Transportation The European Union’s Tacis TRACECA program for Armenia, Azerbaijan, Bulgaria, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Romania, Tajikistan, Turkey, Turkmenistan, Ukraine, Uzbekistan Workshop on Corridor Development for Caucasus Countries May 18-19, 2004 Tbilisi, Georgia - Trade and Transport Facilitation - EuropeAid This project is funded by the European Union A project implemented by Lamnidis & Associates

2. GENERAL The three dimensions TRADE TRANSPORT Trade Facilitation CUSTOMS

3. GENERAL Interrelation of strengthening of institutional grounds for investments and Trade and Transport turnover growth SIMPLIFICATION OF ADMINISTRATIVE PROCEDURES Institutional grounds for investments Economic development INTERNATIONAL TRANSPORT TRADE

4. GENERAL Objective of Trade Facilitation To provide a world-wide accepted, consistent, transparent and predictable environment for international trade transactions. Aims of Trade Facilitation To improve the quality of international transport and logistics, To adapt commercial trade and transport practices to international standards, To remove obstacles and non-physical barriers to trade.

5. GENERAL Trade Facilitation Goals • Implementation of WTO, WB, PCA, UN ECE, UN ESCAP, WCO / regional commitments • Automated Customs clearance with minimal data requirements • Remote filing and simplified clearance procedures • Pre-arrival processing, post-clearance controls and audits • "Fast-track" handling for authorized traders, chosen on the basis of risk assessment • Single window” solutions and “one stop” clearance by the co-ordination of activities of Government agencies to avoid multiple checks of the same cargo at different times and places

6. GENERAL Trade Facilitation Goals • A standard time limit for Customs clearance • Co-operation between Customs agencies and trade entities such as shippers, transportation operators, freight forwarders, chambers of commerce and banks • Transparency of Customs rules and procedures • Increasing border control capacity (modernization of infrastructure and computerization) • Harmonization of data elements and requirements • “E-commerce

7. STATISTICS Trade Growth

8. STATISTICS Trade GrowthMLA Parties

9. STATISTICS

10. STATISTICS

11. STATISTICS

12. STATISTICS Container transport

13. STATISTICS TRANSIB TRACECA SOUTH NOSTRAC TRANSOCEAN

14. PROJECT ACTIVITY Project Environment Project’s environment Intermediary Supplier/ Customer Customer/ Supplier Purchase Payment Transportation State authorities

15. PROJECT ACTIVITY Overall Project Objectives Facilitation of development of economic relations, trade communication in the TRACECA region by means of: • devising of a common legal framework for multimodal carriage of goods and cargo insurance; • harmonization of national legislation with international principles and requirements relevant to transit traffic; • facilitation of accession to, ratification and efficient implementation of the priority international conventions; • harmonization of legal and regulatory framework in the field of transport and customs regulation, incorporating international standards and requirements; • Improvement of the investment environment for IFI’s and particularly for private investors

16. PROJECT ACTIVITY Project Objectives • National Legal Working Groups (NLWG) established and efficient operation ensured • Bilateral and multilateral transport transit agreements collected, catalogued and analysed • Ratification of identified recommended conventions and other treaties promoted and implementation facilitated by means of, inter alia, management development and training • Guide to International conventions and agreements for transport operators and traders elaborated • Training program for IGC NLWGs conducted • Draft New Technical Annex(es) to the MLA • on multimodal transit transport • on TRACECA investments • on freight forwarding operations • TRACECA road haulage permit and quota system elaborated • Modern technical vehicle standards: needs studied, regulative innovations recommended • Legal assistance to the IGC Permanent Secretariat provided throughout the project duration • Introduction of the TRACECA Visa • Draft MainstrategicdirectionsofIntergovernmentalCommissionofTRACECAinthedevelopmentoftransportnetworksof internationaltransportcorridor “Europe-Caucasus-Asia” (TRACECA) for 2005-2010 proposed     

17. Short-term tasks (1 phase) Analysis and monitoring of the existing transport legislation; Adoption of the Rules of Procedures IGC and Statutes PS IGC TRACECA; Adoption of recommendations on accession to International Conventions (Multimodal, Kyoto Convention etc.); Approval of the “TRACECA Permits System” concept for the road transport; Identification of violations of MLA Long-term tasks (2 phase) Adoption of amendments/ annexes to the MLA; Introduction followed by approval of common technical standards on waits and dimensions for the road transport in TRACECA region; Accession to the priority international conventions in the field of transit transportation. PROJECT ACTIVITY Project Steps towards Increased TRACECA Transport Corridor Competitiveness (tasks of LWG)

18. PROJECT ACTIVITY TRACECA National Trade and Transport Facilitation Working Groups NATIONAL COMMISSIONS PROJECTS TRACECA IGC PERMANENT SECRETARIAT CLBTT PRO-COMMITTIEES NATIONAL SECRETARIES UPTFT HBCP Trade and Transport Facilitation Working Groups LEGAL TFWG TARIFFS TFWG BORDERS TFWG

19. National Legal Working Group (NLWG) Monitoring of current legislation in international transit transportation Identification of deviations from the international agreements and conventions in force Promotion of compliance of the national legislation with provisions of international agreements and conventions Facilitation of accession to the existingpriority conventions Development of recommendations for simplification of the existing regulations applicable to transit transportation Simplification of border-crossing procedures keeping sufficient administrative control preventing illicit trafficking of goods Active cooperation with Pro-Committees established by the World Bank Multilateral Legal Working Group (MLWG) Analysis of the current national TRACECA member states laws and regulations for international and transit transportation Consideration of the recommendations on simplification and harmonization of international transit transport regulations in the TRACECA member states Elaboration of the common action plan for increased competitiveness of the TRACECA transit corridor Devising recommendations to the PS and IGC on incorporation of amendments and additions to the Basic Multilateral Agreement and it’s annexes PROJECT ACTIVITY Trade & Transport Facilitation Legal Working Groups

20. PROJECT ACTIVITY Amendments, Additions and Technical Annexes to the MLA elaborated by the CLBTT project in order to Facilitate Trade and Transport

21. Milestones in Project induced harmonization process TRACECA VISA Tangible results (OVIs) achieved by the Project at Yerevan Conference The Protocol of amendments to the Basic Multilateral Agreement on international transport for development of the Europe – the Caucasus – Asia corridor signed on the Third IGC Annual Meeting in Yerevan, October 9-10, 2003 was the first amendment to MLA since its signature in 1998. In order to facilitate Trade and Transport, the above mentioned protocol with 3 amendments and a new Technical Annex have been signed by Parties of the MLA as follows: • Armenia, Azerbaijan, Kyrgyz Republic, Moldova, Romania, Tajikistan – fully endorsed; • Kazakhstan, Turkey Bulgaria, Georgia and Ukraine - endorsed with reservations; • Uzbekistan - did not sign the Protocol because the representative did not have an authority for signature.

22. Milestones in Project induced harmonization process Tangible results (OVIs) achieved by now by the CLBTT NLWGs Azerbaijan – ratified the Protocol on amendments to the MLA Kazakhstan – waived the reservation to the Technical Annex on international railway transport to the MLA Turkey – apply for accession to SMGS Agreement Ukraine – made amendments to the Low of Ukraine “On transit” about using SMGS railway bill as a single transit document Uzbekistan – signed Protocol on amendments to the MLA

23. PROJECT ACTIVITY

24. PROJECT ACTIVITY

25. PROJECT ACTIVITY CLBTT Project Recommendations: Creation of attractive investment environment • Facilitation of investment in the field of transport along the TRACECA routes Draft New Technical Annex to the Basic Agreement on TRACECA investment, Article 2 • Creation of attractive environment for IFI’s and private investors by implementation and improvement of modern and flexible form of investment: • Modern forms of concession of the transport infrastructure objects with active participation of private investors (BOT etc.); • Free economic areas or zones; • Transport logistic centers (hubs); • TRACECA Guarantee Trust Fund; • TRACECA Economic Interest Grouping; • TRACECA Industrial Advisory Forum/Panel; • Settlement of Disputes. Source: Draft MainstrategicdirectionsofIntergovernmentalCommissionofTRACECAinthedevelopmentoftransportnetworksof internationaltransportcorridor “Europe-Caucasus-Asia” (TRACECA) for 2005-2010 • Promotion of investment flows and insurance of non-commercial risks Convention Establishing the Multilateral Investment Guarantee Agency, 1985, Chapter 1, Article 2

26. CLBTT Project Recommendations:Trade and Transport facilitation Presently Article 5 “Payment of taxes, duties and other payments” of MLA reads: Taxes, duties and other payments, irrespective of their names and origin shall not be imposed for transport in transit, except payments for transport and customs services, services related to transport, as well as payments for use of transport infrastructure. Draft amendment to the article 5 of the Basic Multilateral Agreement: Taxes, duties and other payments, irrespective of their names and origin shall not be imposed for types of transport referred to in Article 1 of the Basic Agreement, except payments for transport and customs services, services related to transport, as well as payments for use of transport infrastructure.

27. CLBTT Project Recommendations:Trade and Transport facilitation Presently Clause 2 of Article 6 “Preferential Terms and Tariffs” of MLA reads: 2. The Parties have agreed that should preferential terms and tariffs be established between two Parties for types of transport referred to in Article 1 of the Basic Agreement, no less preferential terms and tariffs will be applicable between these Parties and other Parties. Draft amendment to the Clause 2 of Article 6 of the Basic Multilateral Agreement: 2. The Parties have agreed that should preferential terms and tariffs be established between two Parties or between a Party/Parties with a third country/countries, for types of transport referred to in Article 1 of the Basic Agreement, no less preferential terms and tariffs will be applicable for all Parties to the Basic Agreement.

28. PROJECT ACTIVITY Trade and Transport facilitationmeasures recommended by UN ECE and taken on board by the Project • Improvement of services on organization of transportation of goods by any kind of transport Draft New Technical Annex to MLA on Freight Forwarding Activities (CLBTT Project) •  Commercial or transport document as descriptive part of transit declaration WCO, Revised Kyoto Convention, Specific Annex E, Chapter 1 Standard 6 Technical Annex on International Customs Transit Procedures for carriage of goods by rail using “SMGS” railway bill to the MLA (CLBTT Project) • Provision of high quality services and increased economic efficiency of the multimodal transport operations New Technical Annex on multimodal transport (CLBTT Project)