Georgia

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MARKET ACCESS

 

Import regulations and customs duties  - Distribution - Transportation of goods - Standards - Patents and brands


Import regulations and customs duties

Regulations
On September 1, 2006 one additional and significant step was made towards trade liberalization in Georgia, when the Law of Georgia on "Customs Tariff” came into force. The laws also aims at adoptation of the Harmonized Commodity Description and Coding System HS 2002 in future.

 


Customs duties
According to the new Law of Georgia on "Customs Tariff” (adopted on September 1, 2006), all existing tariffs were reduced from 12-30% to 12%, from 5-12% to 5%, and from 0-5% to 0%. 90% of goods are in the 0% category.
It should be emphasized that except for construction materials, all kinds of raw materials and equipment delivered to Georgia will be totally exempted from custom fees.
Today Georgia’s tariff rates are the second lowest worldwide.
The Government of Georgia plans to achieve phased reduction of all existing tariff rates by 2007 and exemption from customs fees on all imported products to Georgia by 2008.

 


Import taxes
The following import taxes are applied in Georgia: customs duty, VAT, excise tax. There are also customs fees for performing customs procedures and issuing licenses. Excise tax and VAT apply equally on both import and local products. These taxes are paid at the customs prior to the completion of the customs clearance of goods in accordance with the law. The responsibility for the payment of taxes lies with the owners of goods and transportation or their authorized representatives and forwarders.

From January 2005, Georgia has 16 import tax rates instead of 22. Import tax rates fall in the range of 0-30%. There are no quantitative restrictions on imports. There are a limited number of licences on exports and imports (reduced from 14 to 8 only). Only medical products, firearms and explosives, radioactive substances and industrial waste, and a few types of agricultural chemical products are subject to import/export licensing.

 


Regulations governing payments
The exchange rate policy is implemented by the National Bank of Georgia in accordance with Main Directions of Monetary and Exchange Rate Policies, a document developed by the bank itself. Recommendations of the IMF are taken into consideration in defining the exchange rate policy.
The exchange rate policy is aimed at maintaining the stability of the national currency in order to avoid sharp fluctuations in exchange rate, devaluation of the national currency and consequently, a quick rise in inflation and drop in living standards. The official exchange rate is fixed at the Tbilisi Inter-bank Foreign Exchange (TIFEX) on the basis of demand-supply of commercial banks. The exchange rate of GEL against USD is set at a TIFEX trade. The GEL exchange rates against other foreign currencies are fixed on the basis of cross-rate calculation of the exchange rate of GEL fixed against USD and the rates of these foreign currencies against USD fixed on international foreign exchange markets at that particular moment.

It should be noted that from 1995-1998, the exchange rate was regulated, which means that the National Bank of Georgia used to carry out interventions in order to keep the Lari exchange rate stable. From September 1998 until September 2004, the central bank did not undertake interventions and the Lari was kept under the floating exchange rate regime. However, since September 2004, the Bank has resumed sale of international reserves. It sells USD to prevent Lari from sharp strengthening. At present the Lari exchange rate is still regulated to keep its nominal rate stable. The Lari exchange rate is directly affected by changes in Georgia’s balance of payments, budget revenues and expenditure, and volume of circulated money. The strict monetary policy pursued by the National Bank during the past decade is a prerequisite for keeping the rate stable.

 


Transportation of goods

By road
Georgia has 20,229 Kms of public roads, which include 1,474 km of international, 3,326 km of state and 15,439 km of local roads.
Increasing international transport flow has given rise to new quality requirements in road maintenance. Thus buidling and maintenance of roads has become the top priority of the governmnet. There is an ambitious project to construct a motorway connecting the Black Sea ports to the border with Azerbaijan, passing through Tbilisi. Under the recently enacted Millennium Challenge Compact, the Regional Infrastructure Rehabilitation Project will put nearly $102 million towards rehabilitation and construction of 245km of road in the southern region of Georgia.
Speed limits range from 80 to 100 km/h on highways, and from 30 to 60 km/h on urban thoroughfares. Motorists are not permitted to turn right on the red light at traffic lights. While legislation mandating seat belt use has yet to be enacted, drivers and passengers are nevertheless strongly advised to buckle-up on Georgian roads.


By rail
Georgian Railways (the oldest system of railroads in the region) dates back to 1865. The total railway network length is 2,554 Kms which includes 1,268 Kms of single track and 297 Kms of double track.
The Georgian railroad is directly connected to the railroads systems of Armenia, Azerbaijan and Russia. Rail travel in both the west and the north is difficult due to the conflict in Abkhazia. Rail travel in other parts of the country is possible, but services are sporadic to many destinations.
Nevertheless, trains are the best way to travel throughout the country, in spite of some risk of robbery. Tickets are available in train stations and from some travel agents outside the country. The two classes of train are distinguished primarily by the comfort of the seats. Purchase tickets in advance for the best seats. When travelling overnight, be sure to lock your cabin door, and make certain it is secured from inside by anchoring it in a closed position with strong cord or wire. Dining cars on Georgian trains may not be so good.
In April 2005, an agreement was signed to build a railway line from Turkey through Georgia to Azerbaijan using a standard gauge (1,435 mm) so that it can eventually link with China.


By sea
Situated on the Black Sea coast, the strategic ports of Batumi and Poti are playing an increasingly growing role in Georgia’s transport system.
Port of Poti : Poti is one of the oldest port cities in history, dates back to 7th centuary BC. The modern port was built in 1907. The port occupies 49 hectares and operates throughout the year including weekends. The cargo handling facilities of the port are sufficient to manage virtually all types of cargo (general, bulk, liquids, containers, etc.).
Port of Batumi : Established in 1878. It has become principally oriented towards receiving bulk cargoes. The port operates throughout the year and is characterized by a secure and stable navigation environment.


By air
Georgia took a big leap forward with the February 2007 opening of a new international terminal in Tbilisi ( Tbilisi International Airport -TBS ) hailed as one of the world's most comfortable and efficient terminals. Opening of the new terminal is expected to increase air traffic to Georgia, which is now served by four national and 14 foreign airlines, including Austrian Airlines, British Airways, Lufthansa, Germania Express, Air Baltic and Turkish Airlines. Direct air connections are available from Tbilisi to Istanbul, London, Munich, Odessa, Cologne, Riga, Tel Aviv, Kiev, Athens, Frankfurt, Paris, Amsterdam, Dubai, Vienna, etc.

Tbilisi International Airport t lies 11 miles (18km) East of Tblisi city. If arriving on the regularly scheduled international flights, the easiest way to make the eleven-mile trip is to the city-centre is to take a taxi. The more economical option is to take the bus number 37 to the city. Buses operate every 15 to 30 minutes between approximately 9 am and 5 pm.
There are 28 airports in the country.




Standards

With Georgia’s accession to the WTO in 2000 the country slowly started to overhaul its system of technical regulation. Amendments made to legislation in the summer of 2005 fundamentally changed the system of technical regulation. The key actor in the sphere of standardization up to 2005 was “Sakstandard” (Georgian National Agency of Standards, Technical Regulations and Metrology) was disbanded and its functions of metrology, accreditation, certification, and market supervision were restructured among other organizations. A new body has the function of accreditation (Accreditation Center); the function of certification will be performed by accredited bodies to be established primarily in the private sector, and market supervision will be performed by various state bodies.
At present, the old soviet GOST standards are still operational, though their use is not mandatory. A declaration of compliance is mandatory for some commodities to ensure safety and quality. The conformity of the commodity will be evaluated by the certification body on the basis of technical regulations which, according to the Law, should be in compliance with European legislation.



Patents and brands

For details on the intellectual property protection, visit the web site of National Intellectual Property Centre of Georgia called Sakpatenti.

Texts currently applying to patents/brands

  Text Date entered into law Period of validity Comment
Patent (invention) Patent law of Georgia 5th Feb 1999 20 years The patent owner can sell or issue license, but according to the approved rules.
Trademark Law on Trademarks 25 May 1999 10 years Some of the well-known trade marks in Georgia are protected without registration in Georgia under article 6bis of the Paris Convention.
Patent (utility) Patent law of Georgia 5th Feb 1999 8 years The patent owner can sell or issue license, but according to the approved rules.
Patent industrial design Patent law of Georgia 5th Feb 1999 15 years The patent owner can sell or issue license, but according to the approved rules.



 

Last modified in mai-07
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