ARMENIA - Changes in the customs duty rates for Armenia within the EEU

March 2019

The Republic of Armenia officially joined the Eurasian Economic Union (EEU) in 2015. As a result, it applies the EEU’s unified tariff and non-tariff regulations on imports and exports to and from non-member countries (so-called third countries).

Application of the EEU Customs Code resulted in both increases and decreases in customs duties on the import of certain goods from non-member countries. Where the duties are higher than they were, this can cause an increase in the price of goods. To avoid the immediate impact of price increases on Armenia's economy when the country entered the EEU, the Government of the Republic of Armenia negotiated with the EEU an initial grace period, which began in 2015 and will end in 2022.

In cases where import customs duties increased, a positive impact is expected, particularly given the fact that domestic producers have the opportunity to charge lower prices for the goods concerned. By doing this, domestic producers can gain advantages in the domestic market. This will promote the growth of domestic production and will lead to the introduction of new products, while contributing to the government’s policies related to import substitution.

As of 1 January 2019, the grace period ended for the products mentioned below in Paragraph A, but it continues for products listed below in Paragraph B.

Paragraph A

The grace period has ended on the following products. The duty rates shown below are applicable since 1 January 2019:

• 0%-5% on certain types of fruits (the rates represent a 2.5 -7.5% reduction from the rates effective in 2018);
• 12%-12.5% on green and black tea in teabags (1-1.5% increase in duties from those applicable in 2018);
• EUR 0.05 for kilogram on citric acid (EUR 0․05 increase from those applicable in 2018);
• 3% on certain types of pharmaceutical products: haemoglobin, clotting factors, contrast agents for x-rays, dental cements (1-3% increase in duties from those applicable in 2018);
• 5% on medical equipment: systems for taking and transfusing blood, liquid counters (3% increase in duties from those applicable in 2018); and
• 5% on greenhouses (3% increase in duties from those applicable in 2018).

Paragraph B

The grace period continues on the following products, but during the course of the remaining grace period, the rates are gradually increasing. The duty rates shown are the rates applicable during the grace period, with the figures in brackets being the change as compared to the rates that were effective in 2018:

• 2%-22% on most food (2-4% increase in duties);
• 2% on mineral and chemical products (2% increase in duties);
• 2%-4% on some pharmaceutical products (2% increase in duties);
• 4% on fertilizer (2% increase in duties);
• 2%-4% on household goods (2-3% increase in duties);
• 2%-9% on plastic, leather, wood, paper, glassware (2-4% increase in duties);
• 2%-6% on textiles (2-3% increase in duties);
• 6% on precious and semi-precious metals, stones (3% increase in duties);
• 1%-8% on non-precious metals (1-4% increase in duties); and
• 2%-6% on machinery, equipment (2-3% increase in duties).

You can find a detailed list of rates to be implemented during the grace period for goods included in the above-mentioned commodities in Annex 4 of Treaty on the Accession of the Republic of Armenia to the Treaty on the Eurasian Economic Union of 29 May 2014 at: https://docs.eaeunion.org/docs/ru-ru/0027354/itia_11102014 (in English). You can also find a detailed, comprehensive list of the expected final rates for all goods in the EEC Council Decision No 54 approved 16.07.2012. on EEA Common Customs Tariff at: http://eec.eaeunion.org/ru/act/trade/catr/ett/Pages/default.aspx (in Armenian and all languages of EEU Member countries).

Aharon Chilingaryan
a.chilingaryan@bdoarmenia.am

Anahit Simonyan
a.simonyan@bdoarmenia.am