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 A project implemented by Lamnidis & Associates EuropeAid This project is funded by the European Union Common Legal Basis for Transit Transportation Workshop on Corridor Development for Caucasus Countries May 18-19, 2004 Tbilisi, Georgia - Trade and Transport Facilitation -

Common Legal Basis for Transit Transportation 2 Trade Facilitatio n Trade Facilitatio n TRADETRANSPORT CUSTOMS The three dimensions GENERAL

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

Common Legal Basis for Transit Transportation 4 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. GENERAL

Common Legal Basis for Transit Transportation 5 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 GENERAL

Common Legal Basis for Transit Transportation 6 Trade Facilitation Goals GENERAL 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

Common Legal Basis for Transit Transportation 7 Trade Growth STATISTICS

Common Legal Basis for Transit Transportation 8 Trade Growth MLA Parties STATISTICS

Common Legal Basis for Transit Transportation 9 STATISTICS

Common Legal Basis for Transit Transportation 10 STATISTICS

Common Legal Basis for Transit Transportation 11 STATISTICS

Common Legal Basis for Transit Transportation 12 Container transport STATISTICS

Common Legal Basis for Transit Transportation 13 TRANSIB TRACECA SOUTH NOSTRAC TRANSOCEAN STATISTICS

Common Legal Basis for Transit Transportation 14 Project Environment Supplier/ Customer Transportation PurchasePayment Customer/ Supplier Intermediary Project’s environment State authorities PROJECT ACTIVITY

Common Legal Basis for Transit Transportation 15 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 PROJECT ACTIVITY

Common Legal Basis for Transit Transportation 16 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 Main strategic directions of Intergovernmental Commission of TRACECA in the development of transport networks of international transport corridor “Europe-Caucasus- Asia” (TRACECA) for proposed PROJECT ACTIVITY

Common Legal Basis for Transit Transportation 17 Project Steps towards Increased TRACECA Transport Corridor Competitiveness (tasks of LWG) 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

Common Legal Basis for Transit Transportation 18 Trade and Transport Facilitation Working Groups NATIONAL COMMISSIONS NATIONAL SECRETARIES TRACECA IGC PERMANENT SECRETARIAT UPTFT PROJECTS LEGALTFWGBORDERSTFWGTARIFFSTFWG CLBTT HBCP TRACECA National Trade and Transport Facilitation Working Groups PRO- COMMITTIEES PROJECT ACTIVITY

Common Legal Basis for Transit Transportation 19 Trade & Transport Facilitation Legal Working Groups 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 existing priority 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

Common Legal Basis for Transit Transportation 20 Protocol on Amendments to the MLA Facilitation of Trade and Transport Documentation Procedures VAT zero-rate on railway transport services on international and transit railway connection New Technical Annex on International Customs Transit Procedures for carriage of goods by rail using “SMGS” railway bill to the MLA Signed Draft Protocol on Amendments to the TAs on International Road Transport and Customs Documentation Procedures 7 additions and amendments to the Technical Annex on International Road Transport 3 additions and amendments to the Technical Annex on Customs Documentation Procedures Under consideration Draft Protocol on Amendments to the TAs on International Road Transport 8 additions and amendments to the Technical Annex on International Road Transport Under consideration Draft Protocol on Amendments to the MLA Draft New Technical Annex on multimodal transport (10 articles) Under consideration Draft Protocol on Amendments to the MLA on TRACECA Investment Draft New Technical Annex on TRACECA Investment (17 articles) Under consideration Draft Protocol on Amendments to the TA on Customs Documentation Procedures 5 additions and amendments to the Technical Annexes on Customs Documentation Procedures Under consideration Draft New Technical Annex to MLA on Freight Forwarding Activities 22 Articles Under consideration Draft Main strategic directions of IGC TRACECA in the development of transport networks of international transport corridor for Under consideration Amendments, Additions and Technical Annexes to the MLA elaborated by the CLBTT project in order to Facilitate Trade and Transport PROJECT ACTIVITY

Common Legal Basis for Transit Transportation 21 TRACECA VISA 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 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. Milestones in Project induced harmonization process Tangible results (OVIs) achieved by the Project at Yerevan Conference

Common Legal Basis for Transit Transportation 22 Milestones in Project induced harmonization process Tangible results (OVIs) achieved by now by the CLBTT NLWGs 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 Azerbaijan – ratified the Protocol on amendments to the MLA

Common Legal Basis for Transit Transportation 23 PROJECT ACTIVITY

Common Legal Basis for Transit Transportation 24 PROJECT ACTIVITY

Common Legal Basis for Transit Transportation 25 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 Main strategic directions of Intergovernmental Commission of TRACECA in the development of transport networks of international transport corridor “Europe-Caucasus-Asia” (TRACECA) for Promotion of investment flows and insurance of non-commercial risks Convention Establishing the Multilateral Investment Guarantee Agency, 1985, Chapter 1, Article 2 PROJECT ACTIVITY

Common Legal Basis for Transit Transportation 26 CLBTT Project Recommendations: Trade and Transport facilitation Presently Article 5 “Payment of taxes, duties and other payments” of MLA reads: 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. 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.

Common Legal Basis for Transit Transportation 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.

Common Legal Basis for Transit Transportation 28 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) PROJECT ACTIVITY Trade and Transport facilitation measures recommended by UN ECE and taken on board by the Project