Armenia

Merchandise Trade

 

 

• Armenia joined the World Trade Organization (WTO) in February 2003. It has also been a member of the Eurasian Economic Union (EAEU) since January 2, 2015, which requires the Armenian Customs Code to be in line with WTO requirements.
   
• As a member of the EAEU, Armenia is forced to apply stricter standardisation, sanitary, and phyto-sanitary requirements in line with Russia's requirements. As of January 2018, companies have to comply with EAEU technical regulations. For some products, such as wheeled vehicles, the new requirements will go into effect in 2022.
   
• Improper implementation of the Customs Code remains a barrier to trade. There is still a lack of clarity in Armenia in many areas, such as import licensing, customs procedures and intellectual property rights enforcement, which now fall under the jurisdiction of the EAEU. Due to this, international firms may face several tariff and non-tariff trade barriers, including reference pricing on customs duties when exporting to Armenia. Another potential problem is the EAEU's complex system of standardisation. International businesses are encouraged to obtain appropriate legal advice or assistance from experienced distributors or consultants on all aspects of EAEU requirements.
   
• Armenia has made trading easier by introducing self-declaration desks at customs houses and warehouses, investing in new equipment to improve border operations and introducing a risk-management system. The country has also reduced the time and cost for documentary and border compliance for trade with Russia by joining the EAEU. More recently, the country has also made exporting faster by allowing online submission of customs declarations. Almost all imports are subject to 20% value-added tax (VAT), while tobacco products, fuels and alcoholic beverages are also subject to excise duties. Exported goods are zero-rated for VAT purposes and are exempt from excise tax.
   
• Some import restrictions exist for health, security and environmental reasons. Authorisation is required for pharmaceutical products and medicines, phyto-protection chemicals, weapons, components used in the production of weapons, explosives, nuclear materials, poison, drugs, strong psychotropic substances, devices for use in opium smoking, and pornographic materials.
   
• In June 2017, the members of the EAEU suspended import tariffs on lead ores from September 2017 until May 2019.
   
• The EAEU reduced import duties on certain types of paper and paperboard from March 2017.
   
• Armenia's average tariff rate is 2.4%, the fourth lowest in the Caucasus and Central Asia region (out of eight countries). The common external tariff for the EAEU largely corresponds with Russian tariff rates.
   
• The Customs Code facilitates export transactions with much less documentation than for customs clearance of imports, and most exporters report minor issues in the customs houses.

Sources: WTO – Trade Policy Review, Fitch Solutions, Ministry of Economy and Investments of the Republic of Armenia

Multinational Trade Agreements

Active

1. The EAEU: The EAEU is a Plurilateral Customs Union and Economic Integration Agreement for trade in goods and services, which entered into force in January 2015. Its member states are Armenia (which joined on January 2, 2015), Belarus, Kazakhstan, Kyrgyzstan and Russia. The Agreement covers over 180 million people and a combined GDP of about USD4 trillion. Between 2016 and 2017, intra-EAEU trade grew by over 30%. The implementation period ends in 2025. Russia is Armenia’s largest single trade partner, purchasing 26.9% of exports and supplying 26.2% of imports in 2018.
    
2. Armenia-Kazakhstan FTA: The FTA entered into force on December 25, 2001 and covers trade in goods. As of 2018, Kazakhstan was Armenia's 20th-largest export partner, where Armenia exported 0.4% of its total exports to Kazakhstan, with the majority of products being beverages, spirits and vinegar.
    
3. Armenia-Turkmenistan FTA: The FTA entered into force on July 7, 1996 and covers trade in goods. As of 2018, Turkmenistan was Armenia's 29th-largest export partner, where Armenia exported 0.1% of its total exports to Turkmenistan, with the majority of products being natural or cultured pearls, precious or semi-precious stones and precious metals.
    
4. Armenia-Moldova FTA: The FTA entered into force on December 21, 1995 and covers trade in goods. As of 2018, Moldova was Armenia's 37th-largest export partner, with pharmaceutical products being the majority of products exported from Armenia to Moldova.
    
5. Armenia-Ukraine FTA: The FTA entered into force on December 18, 1996, and covers trade in goods. As of 2018, Ukraine was Armenia's seventh-largest import partner, where Armenia imported 3.2% of its total imports from the Ukraine, with the majority of products being tobacco and manufactured tobacco substitutes.

Signed But Not Yet In Effect

1. Mainland China-EAEU FTA: A non-preferential agreement on trade and economic cooperation was signed between Mainland China and the EAEU in May 2018 within the framework of the Astana Economic Forum. Emphasis has been placed on parties' cooperation in the sphere of e-commerce, as the digital economy era will create favourable conditions for future trade between Mainland China and the EAEU members. The FTA will make it easier to improve market access for goods between the EAEU and Mainland China in the future. In 2018, Mainland China was Armenia’s seventh-largest export market, accounting for 4.5% of total exports and the country’s second-largest import partner, supplying 13.8% of total imports.
    
2. Armenia-EU Comprehensive and Enhanced Partnership Agreement (CEPA): In April 2018, Armenia ratified the CEPA, which has been provisionally applied since June 2018, and in July 2018 the European Parliament voted overwhelmingly for its ratification. CEPA aims to strengthen cooperation between Armenia and the EU on matters of trade, politics and other areas of mutual interest. The EU is Armenia’s largest trading partner. CEPA is expected to become fully effective by mid-2019.

Sources: WTO Regional Trade Agreements database, European Commission, Silk Road Briefing

Foreign Direct Investment

Foreign Worker Permits

There are several work-related classes of visitor visas: V-5 for attending cultural, athletic, scientific or other events; V-6 for participating in humanitarian, charitable, technical assistance and similar programmes; V-7 for business, investment or work; and V-8 for crew members. These are not for the long term. Anyone needing to stay in Armenia for a longer period will need to obtain a residence permit: 1-year, 5-year and 10-year residence permits are available, and are only issued in Armenia. Armenia does not yet have a system of work permits. An employer will need to ensure that the employee has a proper residence permit. Investment, business ownership and work are all applicable circumstances for a residence permit.

Localisation Requirements

There are no performance requirements for foreign businesses in terms of mandating local employment. The processes for obtaining visas and residence or work permits are quite simple.

Visa/Travel Restrictions

Holders of all types of passports from 56 countries are not required to obtain a visa for entry to Armenia for up to 180 days a year. As of March 3, 2019, citizens of Hong Kong may visit Armenia without a visa for stays up to 180 days under the Belt and Road Initiative.

Sources: Ministry of Foreign Affairs of the Republic of Armenia, Government of Hong Kong, Fitch Solutions

Sovereign Credit Ratings

Sources: Moody's, Standard & Poor's, Fitch Ratings

Competitiveness and Efficiency Indicators

Sources: World Bank, Transparency International

Fitch Solutions Risk Indices

Source: Fitch Solutions
Date last reviewed: May 31, 2020

Hong Kong’s Trade with Armenia