VI. TRADE REGULATIONS AND STANDARDS

The Latvian customs tariff system is still evolving.  Under an
interim tariff system introduced in March 1994, Latvian customs
tariffs on manufactured products are generally low, with higher
tariffs on agricultural products reflecting the desire of Latvian
farmers for protection.  While a tariff bill was defeated in the
Saeima (Parliament) in July 1994, political pressure for
protectionist tariffs from farmers can be expected to remain
high.  Latvia currently has no quantitative constraints on food
imports.  Latvia extends MFN treatment to U.S. Products.  Latvian
tariff classifications are based on the harmonized commodity
description and coding system (HCDC).

In addition to tariffs, imports are subject to excise taxes and
the 18 percent turnover tax.  The turnover tax may be waived for
the import of fixed investment goods upon application to the
Latvian development agency.  Excise taxes are applied to
alcoholic beverages, tobacco and jewelry.  Import documentation
required by Latvian customs authorities are a copy of the
contract, an invoice, a bill of lading indicating the amount,
weight and value of goods, and an original copy of a certificate
of origin (form Eur.1 or Form a).  At the border, an importer or
his agent must complete a customs declaration and a customs
freight delivery note.

For meat imports, the state veterinary department provides border
inspection controls for bovine spongiform encephalopathy,
classical swine fever, and salmonella.  Effective June 1, 1994,
imported food products were required to have conformity
certificates to guarantee quality and wholesomeness of food
products. Latvia is still formulating food safety standards.

Transit freight (mainly to and from Russia) can either be
organized in special customs convoys if they involve the shipment
of non-ferrous metal or metal scrap or hazardous cargoes such as
chemical, explosives, ammunition, or drugs.  The convoy fee is
100 lats per truck or per truck with trailer.  Shipments of
alcohol, tobacco, food products and perfume are also convoyed,
for which the convoy fee is 50 lats.  A high security deposit may
be paid at the border in lieu of using a convoy.  The security
deposit is transferred to the customer's bank account two months
after the shipment has left Latvian territory.

Some Latvian exports (mainly raw materials, metals, antiques and
art works) are subject to an export tax.

Latvia is pursuing foreign-trade policies consistent with market
reforms and the need to diversify the country's trade partners
beyond the former Soviet Union.  Latvia has free-trade agreements
with Sweden, Finland, Norway and Switzerland.  On January 1,
1995, a free-trade agreement with the European Union will begin a
phased implementation.  In April 1994, a trilateral free-trade
agreement between the three Baltic countries was implemented,
abolishing all tariffs on industrial products.  A separate
protocol on agricultural, forestry, and fishery products is still
being negotiated.  Latvia's application for GATT membership is
currently undergoing review.