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Country Commercial Guides for FY 2000: TurkmenistanReport prepared by U.S. Embassy Ashgabat, Released July 1999 Note* |
Chapter VI: Trade Regulations, Customs, and Standards
Trade Barriers, Including Tariff and Non-Tariff Barriers
Turkmenistan does not officially apply tariffs to imported goods, with the exception of import by individuals. However, in effect the current excise tax regime sets up excise taxes for certain imported goods but not for their corresponding domestic ones and the excise tax rates for imported goods are higher than those applied on the same domestic products.
Turkmenistan maintains a significant number of non-tariff barriers to trade. Among them is the trade contract and investment project registration requirement. Foreign companies must register with the SCRME and SAFI, the main bodies regulating foreign trade and investment. In addition, there are other agencies that also require registration of contracts and projects for various purposes including Khakimliks (mayor offices), the State Tax Inspectorate, and some sectoral ministries.
The SCRME often creates difficulties for both local and foreign traders. A special Presidential Decree has authorized the SCRME to regulate prices for goods produced in Turkmenistan and exported from the country, and to control implementation of export contracts. The SCRME also sets up prices at which local businesses are allowed to purchase goods from foreign markets and requires them to sell products at prices (not more not less) fixed in contracts registered with this body. Otherwise, businesses can be fined. Such requirements often lead to the import of products and services of low quality. The SCRME also requires goods to be received in country before they can be paid for.
Entities with foreign involvement are required to file documents for registration as legal entities in addition to those set forth for entities without foreign participation. Also, projects with foreign company involvement must obtain authorization from SAFI while projects without foreign participation are not subject to this authorization process. Registration with SAFI is normally a time-consuming process that creates delays in getting goods and services to consumers.
The commercial tax structure which includes the Law on Profit Tax, the Law on VAT, and the Law on Wage Fund Excess Levy, puts foreign investors at a disadvantage relative to domestic investors by making various exemptions applicable to domestic businesses and taxing foreign investors as to certain sources of income. The Law on VAT provides VAT exemptions to a number of domestic companies producing a wide variety of products. On the other hand, such exemptions are not provided to the same imported products. (Note: Beginning July 1, 1998, state and non-state enterprises and agricultural entities are exempted from value added tax payment on part of the profit received from export of goods and services.)
Article 37 of the Law on Hydrocarbon Resources requires contractors in the oil and gas sector to provide preferences to equipment, materials, and finished products made in Turkmenistan if they are competitive in terms of quality, price, operating parameters, and delivery conditions. Such a requirement may create an impediment to foreign investors and traders.
Customs Regulations
Foreign companies doing business in Turkmenistan consider the Turkmen customs clearance process very complicated, in terms of paper work, and lengthy (sometimes up to 2 months). Requests for bribes have been a typical occurrence in day-to-day customs operations.
To pass through customs, an importer of goods must submit the following documents:
- A trade contract registered with the SCRME. The contract should contain information about quantities and costs in hard currency that will be the basis for the customs valuation;
- A bill of lading with similar information on qualities and costs;
- A customs cargo declaration form that can be obtained in the Ashgabat-Expertisa firm of the Chamber of Commerce of Turkmenistan at the following address: "Ashgabat-Expertisa" Firm
36 Shevchenko Street
Ashgabat, Turkmenistan 744000
Tel: (993)(12) 47-17-97- A conformance certificate confirming the quality of delivered goods. The certificate can be obtained from the State Standards Inspectorate at the address below:
State Chief Standards Inspectorate
14 Seidi Street
Ashgabat, Turkmenistan 744000
Tel: (993)(12) 51-14-94, 51-14-32
Fax: (993)(12) 51-04-98- A certificate of origin.
- A Central Bank document confirming a money transfer for purchasing goods or an irrevocable Letter of Credit.
The customs cargo declaration and bill of lading are only accepted in English or Russian. Other documents can be in Russian. Translated copies must be certified by the Chamber of Commerce. The fee for certification ranges from USD 1 to 2 per page. Faxes and copies are not accepted as official documents by the customs authority.
During the customs clearance process, Customs charges a service fee of 0.2% of the contract cost and 20% of the value added tax assessed on the customs service fee sum.
Tariff Rates
A March 19, 1999 Presidential decree introduced a 5 percent customs duty for goods imported into Turkmenistan by individuals. The duty is charged against values determined by Turkmen Customs on the basis of world and domestic price information provided quarterly by the State Institute for Statistics and Prognosis. Duties are not charged on goods that have been exported previously from Turkmenistan, declared at Customs and re-imported into the country. Customs also does not charge duty on goods imported as part of passenger personal luggage though the total value of goods included in the passenger personal luggage should not exceed an amount determined by Customs. Food items except for alcohol and tobacco products, medicine and medical items, school appliances, and children's goods are not subject to the customs duties.
Turkmen Customs levies excises on a limited number of exported goods. The list includes:
Pure wool and partial wool yarn USD 100 per ton Cattle leather:leather from cows, camels, bulls, USD 100 per ton leather from sheep and goats USD 0.50 per piece non-standard leather USD 50 per ton Ammonia saltpeter USD 100 per ton Superphosphate* USD 100 per ton Ammonium phosphate* USD 100 per ton Ammonium sulphate* USD 100 per ton Turkmen sheep-dogs** USD 300 per dog * All marked products are exempt from excises when sold for hard currency through the State Commodity and Raw Materials Exchange.
**license-required from the Nature Protection Ministry
Import Taxes Including Value Added Taxes, Purchase Taxes, Uplifts and Surcharges, and Provincial Taxes
In 1996 the Government introduced Customs excises for four categories of goods including alcohol, vehicles, tobacco products, and jewelry made of precious and semi-precious stones and metals. Gradually, the list of goods subject to customs excises has grown to more than one hundred categories of goods. The Government officially claims that there are no customs tariffs charged for export/import of goods by juridical entities, however Turkmen Customs does, in fact, charge customs excises for export/import transactions in accordance with Presidential decrees regulating export/import operations. A Presidential decree of August 18, 1999 approved the updated list of goods subject to excise taxes. This list is effective October 1, 1999.
When considering importing or exporting goods from Turkmenistan, the following should be noted:
- the importation of alcohol into Turkmenistan is licensed by the Ministry of Trade and Foreign Economic Relations;
- goods and products imported in accordance with intergovernmental agreements, governmental decrees and orders, and for the implementation of projects and contracts, including those involving foreign investment, state loans, humanitarian assistance, and products and/or raw materials that are reworked or to which value is added in Turkmenistan, are exempt from excises.
Eggs 10% Natural honey 30% Fresh or cooled potatoes 10% Tomatoes, peppers, eggplants, cabbage,cucumbers, onion, garlic 100% Carrot, turnip, red beet 50% Legumes 10% Other vegetables including fresh or cooled, non-cooked or cooked, preserved for short time life, dried wholes or sliced ones 10% Fruit and nuts 20% Lemons 50% Grape 100% Watermelons, melons, gourd 100% Coffee 20% Wheat except for seed wheat and hard sorts imported by enterprises of Turkmengalaonumlery company 50%, but not less that USD 0.12 per kilo Wheat flour 50%, but not less than USD 0.17 per kilo Other types of wheat except for wheat and wheat-rye flour 10% Cereals 10% Potato flour, cereal, flakes, and granules 10% Oil-bearing seeds and fruit and other seeds and fruit except for officinal 10% Vegetable oils 10% Confectionery 10% Chewing gum USD 0.01 per one piece Cocoa and derivatives 10% Pasta 50%, but not less than USD 0.50 per kilo Ready made products of vegetables, fruit, and nuts 30% Ice cream 50%, but not less than USD 1.50 per kilo Mineral water except mineral water used for medical purposes 100% Potable water USD 0.2 per liter Non-alcoholic beverages 50%, but not less than USD 0.2 per liter Beer USD 0.50 per liter Grape wines including strong wines, vermouth, and other grape wines USD 1.50 per liter Ethyl spirit except for spirit imported by enterprises of the State Food Association of Turkmenistan and the Turkmen Union of Consumer Cooperation USD 4.00 per liter Alcohol, liquors, and other drinks USD 2.50 per liter Vinegar and its substitutes 30% Ground sulphur and brimestone 30% Cigars including cigars with cut ends cigarillos and their substitutes except cigarettes without filters 20%,but not less that USD 0.10 per pack Tobacco and its substitutes USD 0.25 per pack Coarse-ground salt 30% Sea salt 50% Gypseous and anhydride stone 30% Cement M-300 and M-400 types USD 10 per ton Natural magnesium sulphate epsomit 30% Ozocerite 20% Oil coke 30% Bitumen 30% Technical iodine A type 30% Tetrabrominedifeninololpropan 30% Ferro bromide 20% Technical carbon K-354 30% Oxygen 20% Potassium iodide 30% Technical sulfur acid 20% Technical sulfur acid 20% Carbon dioxide 20% Technical magnesium chloride bishofit 30% Sodium sulphate A and B type 30% Aluminum sulphate 20% Glauber's salt 50% Tan extracts and dying tannins and derivatives 10% Essential oils, perfume, cosmetics, and other body care products 10% Soap bars and other washi Chassis 15% Body including cab for cars of 8703 type 15% Spare parts and equipment for cars of 8703 type 15% Motor cycle and motorized bicycle 15% Trailers 15% Yacht, boats and gigs 10% 150 Photo camera, photo flash, and photo equipment 10% Copying machines 10% Watch, watch belts, and bracelets 10% Furniture 10% Mattress, blanket, and cotton pillow 100% Arts, collection items, and antiquary 50% *) Note that spirits imported by the State Food Association and Turkmen Union of Consumer Cooperation (Turkmenpotrebsoyuz), except for spirits imported by these organizations on consignment basis and/or as products and/or raw materials that are reworked or to which value is added in Turkmenistan, are not subject to excises.
Foreign and domestic legal entities and individuals must pay Value Added Tax for the import and export of goods. The VAT rate for import/export is 20%. According to regulations, the following goods are exempt from payment of VAT:
- goods for official use by foreign diplomatic representations or similar organizations and for private use of the diplomatic and administrative-operating staff of these representations as well, including the members of their families who live with them;
- goods sold by manufacturing enterprises or associations of blind and deaf people;
- goods produced and sold by the medical-productive workshops within psychiatric hospitals and public organizations of disabled people;
- goods produced and sold by enterprises, organizations and institutions where the number of disabled people is not less than 50% of total staff;
- enterprises and organizations of all types of property at all stages of production and sale (excluding export delivery) of flour, bread, rolls and buns, macaroni, grouts, including rice, mixed feed, milk, sour milk products, curds, sour cream, cream, brynza, cheese, ice-cream, oil butter, meat and meat products, including tinned foods, sausage products of all kinds, fish products (excluding delicacy ones), confectionery, baby food, salt, tea, sugar, and medicaments.VAT applies on the total value of the registered contract plus customs excise taxes, and plus customs processing fee.
Import/Export License Requirements
Issued in November 1994, a presidential decree outlines two separate sets of goods whose import and/or export must be licensed by the President and the Cabinet of Ministers. The following is the list of goods where import or export is controlled by the President:
1. Arms and military equipment and special items used for military production and services;
2. Gunpowder, explosive substances, explosive and pyrotechnic devices;
3. Radioactive materials, technology, equipment and installations, special non-nuclear materials and radioactive wastes;
4. Precious metals and alloys, ores, scrap material and wastes;
5. Precious stones and items including wastes, powder,
recuperation of precious stones, pearls and amber;
6. Narcotics;
7. Special kinds of raw materials, equipment, technology and scientific information used for arms and military equipment production;
8. Materials, equipment and technology ostensibly produced for peaceful purposes but which may be used for production of nuclear, chemical and other kinds of weapons of mass destruction;
9. Investment abroad;
10. Export of scientific and research works, expertise and innovations; and
11. Poisons (except those that are included in the list below)The Cabinet of Ministers licenses export or import of the following goods:
1. Chemicals;
2. Poisons;
3. Industrial wastes;
4. Turkmen national jewelry;
5. Cultural valuables;
6. Ancient printed products and manuscripts;
7. Archaeological findings;
8. Numismatics;
9. Art pieces;
10. Collections of materials on mineralogy and biology;
11. Central Asian sheep-dogs;
12. Ahalteke horses;
13. Pedigreed cattle;
14. Wild animals;
15. Wild plants, bones of fossil animals, ivory, horns, hoofs, corals and other such materials; and
16. Information about energy resources and minerals broken down according to regions and fields located throughout the territory of Turkmenistan and within the continental shelf and offshore zone.The Ministry of Trade and Resources issues licenses for the import of alcohol.
The Precious Stone and Metal Fund under the Central Bank of Turkmenistan provides licenses for export and/or import of precious stones and metals.
Temporary Goods Entry Requirements
According to Turkmenistan's Law on Foreign Investment, goods and properties that are imported temporarily and used for personal needs are exempted from customs duty payments. (Note that there are no customs duties levied on entities in Turkmenistan.) The regulations on temporary entry requirements approved on March 25, 1999 stipulate that any goods can be treated under the customs temporary entry regime except for: prohibited imports and exports; goods and materials that will be consumed; and industrial wastes.
The temporary entry of goods is permitted only upon submission of written confirmation about the obligatory exit of these goods from Turkmenistan. Turkmen customs authorities determine what goods can be treated under the temporary entry regime and require them be declared, certified, and submitted to any necessary sanitary, veterinary, and other checks. The terms of the temporary entry regime must not be longer than one year but can be prolonged if customs approves. A customs fee of 100,000 manats or USD 19.23 (official exchange rate at 5,200 manats per dollar) is charged for each customs cargo declaration.
Special Import/Export Requirements and Certifications
The SCRME is authorized to issue import/export licenses for all commercial transactions involving foreign participation.
To register direct trade contracts not involved in auctioning at the SCRME, three original copies of the contract along with a product quality certificate and a document confirming product availability must be submitted to the SCRME.
Goods that are auctioned at the SCRME can be exported from or imported into Turkmenistan without licensing.
To register a contract for selling or purchasing goods at the SCRME, an application should be submitted at least five days prior to the sale or purchase. The application must contain information about the goods: quantity, price, place of origin and current location, terms of delivery and payment and the seller's contact information.
In addition, the following documents must be submitted: a product quality certificate issued by the producer of goods offered for sale; a written confirmation of product availability issued by the seller; and a guarantee document containing the date and terms for delivery of goods in Turkmenistan. A buyer must present a bank confirmation of sufficient funds to cover the cost of the goods.
Contracts concluded on the basis of clearing agreements, trade credits and investment barters (as well as those entailing the import of a part of joint venture capital goods, and charitable donations) must also be registered with the SCRME.
With the exception of cotton, all goods imported into and exported from Turkmenistan must be certified as adhering to quality standards determined by the State Chief Standards Inspectorate. The process of obtaining the certificate of conformity is complicated and requires testing of imported and exported goods by the Standards Inspectorate. A fee up to 0.5% of the total value of goods to be certified is collected. The time to obtain a certificate of conformity ranges form 7 days to 30 days depending on the type of product and the time required for testing. Imported goods are placed in a bonded warehouse until the certificate of conformity is obtained.
All certificates issued by certificate bodies accredited by other CIS countries for goods originating in that CIS country are accepted by Turkmenistan. Those countries that signed a bilateral agreement on acceptance of national state certificates may enjoy mutually simplified procedures on issuing conformance certificates for imported/exported goods. There is no such agreement signed between Turkmenistan and the U.S. The fee for recognition of a foreign certificate is USD 25 (paid in manats).
A certificate of origin is required for all imported and exported goods. The customs authorities accept certificates of origin for import if they are issued by designated bodies of the exporting country (e.g. Chamber of Commerce).
Beginning May 1, 1998, the GOTX introduced a sanitary certification requirement for imported food products. The State Sanitary and Epidemiological Inspectorate (SSEI) was assigned to oversee enforcement. Radiological, radiochemical and chemical tests of imported food products must be made by the SSEI which then issues certificates provided that an appropriate document confirming product quality and issued by the country of product origin is presented. If such a document is not available, imported food products will be tested in the Central Laboratory of Hygiene and Epidemiology.
Raw and ginned cotton to be exported from Turkmenistan is certified by the Cotton Inspectorate under the State Cotton Association.
Turkmenistan does not have any Preshipment Inspection arrangement.
Labeling Requirements
So far, Turkmenistan has not introduced any restrictive packaging or labeling standard rules. However, due to the hot climatic conditions in summer, the government requires that labels for all food products, especially perishables, contain production and expiration dates. Also, the conformance certificates for food products must be accompanied with the product description in Russian language. Spirits and wines must be in glass bottles (plastic bottles are not accepted).
Prohibited Imports
The Government has developed a list of goods that cannot be imported into Turkmenistan. The list includes the following items:
(1) Handmade wool rugs (named Koshma)
(2) Yurtas
(3) Handmade carpets
(4) Astrakhan peltsStandards
Turkmenistan joined the International Standard Association in 1991, and, in 1992, began to adhere to the Interstate Council on Standard, Metrology and Certification that covers CIS countries. Also, Turkmenistan became a member of the International Standard Organization (ISO) in 1993 and signed bilateral agreements on cooperation with the National Standard Agencies of Turkey and Iran.
Intergovernmental agreements on standards, metrology and certification have been signed with Uzbekistan, Armenia and Georgia. Presently, the Turkmen conformance certificate is accepted in 14 countries.
Turkmenistan has developed "national standards" for locally produced goods. Since Turkmenistan is a member of the ISO, Turkmen national standards are developed to meet international standards requirements. As part of the CIS, Turkmenistan has accepted General Interstate Standards (GOST) and Technical Standards (TS), developed in accordance with an agreement reached between 12 CIS countries. Most of the GOST standards incorporate former Soviet Union standards.
Free Trade Zones/Warehouses
According to the Law on Free Economic Zones, a special customs regime that includes duty free treatment for goods and property imported into and exported from free economic zones, with the exception of exported goods of foreign origin, is provided in the free economic zones. All goods and properties must be declared when imported into or exported from free economic zones.
Membership in Free Trade Agreements
Turkmenistan is not a member of any free trade arrangements and is not a member of the CIS Customs Union. It has signed trilateral trade agreements with Iran and the Ukraine, Iran and Armenia, Iran and Bangladesh, Iran and the Philippines, and Iran and India and is interested in concluding more such trilateral agreements. In 1993, Turkmenistan signed and ratified a Most Favored Nation Trade Agreement with the United States, however, a dual tax treaty and bilateral investment treaty have not been signed yet. Turkmenistan is not a member of the World Trade Organization.
Customs Contact Information
Mr. Meret Khalovezov, Chairman
State Customs
7 Sona Muradova Street
Ashgabat, Turkmenistan 744000
Tel:(993)(12)47-02-21, 47-04-56
Fax:(993)(12)47-04-77Mr. Kurbangeldy Durdyev, Head
Ashgabat Customs Office (automobile and railway cargo deliveries)
7 Sona Muradova Street
Ashgabat, Turkmenistan 744000
Tel:(993)(12)47-05-00, 47-02-09
Fax:(993)(12)47-00-45Customs Post "Ashgabat-Cargo"
Tel:(993)(12)32-18-97, 32-16-47, 32-20-95Customs Post "Khova Yollary" (air transportation)
Ashgabat Airport
Tel:(993)(12)33-00-98, 51-14-73, 51-01-59
Fax:(993)(12)51-01-59, 51-01-25
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[end of document] Note* International Copyright, United States Government, 1998 (or other year of first publication). All rights under foreign copyright laws are reserved. All portions of this publication are protected against any type or form of reproduction, communications to the public and the preparation of adaptations, arrangement and alterations outside the United States. U. S. copyright is not asserted under the U.S. Copyright Law, Title17, United States Code.
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