VI.  Trade Regulations and Standards

The economic crisis and inadequate tax policies have combined to
defeat the use of tax measures to promote Georgian economic
growth.  The public was unprepared to comply, either
psychologically or technically, with tax law changes.  Government
investigations indicate that, during 1992, some 80 percent of
production enterprises understated profits and underpaid taxes.

Several categories of taxes exist for business activities,
including importing: excise taxes (between 10-90 percent),
enterprise profit tax (10,20, or 35 percent of profit),
value-added taxes (presently between 12.8 and 14 percent, with
certain exceptions), and enterprise property tax (1 percent of a
company's property costs per year).

Customs tariffs in Georgia include import/export taxes, customs
fees, and other payments (excise tax, VAT, etc.).

The import tax rate is 2 percent and for barter exchange 20
percent of bartered goods' cost as stated in the contract.  The
customs fee rate is 0.2 percent of commodity cost.

There are no prohibited imports.  However, Georgia requires
import licenses for the following items:
Medicines, medical equipment, plant protection chemicals,
industrial by-products, drugs, weapons and ammunition.  The
license may be obtained through the Committee of Foreign Economic
Relations on the basis of preliminary permission from appropriate
ministries.

The import of medicines and food products (except tobacco and
alcohol, which are considered food products in Georgia) are tax-
free.  Items imported under intergovernmental agreements are not
subject to taxes.

The export tax rate is 8 percent.  The GOG continues to ban the
export of some items, including precious and semiprecious stones,
antiques, art, dairy products, cattle and poultry, meat and meat
products, soda calcium, weapons, leather products, grain, rice,
sugar, building bricks, timber, and ferrous and non-ferrous scrap
metals.  Licensing under quota is permitted for other
commodities, such as fuels, gas, minerals, food products and
cellulose.

There are two categories of licenses: general (valid for
multiple-use) and single-use licenses.  Payment for the licenses
varies from USD 25 - 300 (or equivalent in local currency).

In July 1993, a decree on quotas and licensing of import and
export items was issued.  It applies to international trade in
Georgia with any foreign company, unless otherwise stipulated in
intergovernmental agreements.  The four categories of quotas
include: governmental, enterprise, regional or autonomous
republic state authorities, and sale by auction.

Georgia does not provide export subsidies of any significance.
In fact, government policy in 1993 was to discourage exports,
mostly through licensing requirements that are not required for
imports.   Furthermore, it is importers, not exporters, who
receive advantageous financing terms.  At most, a small number of
exporters may receive discounts on purchases of imported raw
materials, e.g. cotton from a government reserves.  This,
however, does not seem to be a systematic practice.  Georgia is
not a member of the GATT subsidies code.

Import/export documentation includes contracts, commercial
invoices, bills of lading, licenses if commodities are subject to
licensing, and sanitary certificates for goods (meat and meat
products, dairy products, vegetables, etc) that may be suspected
of bringing contagious animal or vegetable diseases into the
country or for goods for which special stipulations as to quality
are prescribed.   There is no special regulation on labeling and
marking.

-- Free Trade Zones/Warehouses and Membership in Free Trade
Arrangements

There are no free trade zones and bonded warehouses in Georgia.
Georgia is a signatory to the CIS free trade agreement, signed in
April 1994.