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Brief Chapter Overview
The DCFTA regulates the conditions and the elimination of customs duties for bilateral trade in goods. According to the Agreement, neither Party can adopt or maintain customs or similar duties for export of goods. Import of products adheres to the following conditions:
Import into Georgia (Obligation)
At the time when the Agreement enters into force, all customs duties levied on imported products originating in the EU shall be eliminated.
Import into the European Union (Benefit)
At the time when the Agreement enters into force, all customs duties levied on imported goods originating in Georgia shall be eliminated (excluding garlic, which will be subject to annual duty free tariff rate quotas).
The following arrangements apply for certain products exported from Georgia to the EU:
Rules of Origin
Please see the information about Rules of Origin at the following link.
* On 20 March, 2018 Customs Sub-committee under Association Agreement between Georgia and EU adopted the decision according to which the Protocol I to the Association Agreement between Georgia and EU concerning the definition of the concept of “originating products” and methods of administrative cooperation was replaced by the respective annex of the Pan-Euro-Mediterranean Convention on Preferential Rules of Origin.
Trade Remedies Chapter Overview
The Agreement regulates the terms of global safeguard, anti-dumping, subsidies and countervailing measures use in trading. In case of using protective measures in trading, the parties will utilize relevant agreements from the World Trade Organization (WTO).
The Agreement defines that in cases of dumping import, exceeded and subsidized, the parties retain the right to implement protective measures as outlined under the relevant WTO agreements.
The Agreement also ensures maximum transparency in trade remedies; additionally, the DCFTA dispute settlement part does not extend to the articles in this chapter.
Brief Chapter Overview
This part of the Agreement considers the approximation of Georgian standards, technical regulation, metrology, market surveillance, accreditation and conformity assessment systems with relevant EU systems, which entails both legislative and institutional approximation.
At this stage, Georgia has adopted 6 European Directives. The remaining 15 directives will be approximated gradually, within eight years after the entry into force of the Agreement, and each of them will be subject to a transitional period in order to give local businesses sufficient time to meet the new norms.
Commitments
The annexes cover gradual approximation on horizontal and sectorial level. Approximation of horizontal legislation covers the transfer of the institutional and functional arrangements in the above-mentioned fields into Georgian legislation, while sectorial approximation covers approximation of Georgian legislation with new and global EU approach directives, including 21 EU directives related to industrial products.
At this stage, Georgia has approximated its legislation with six European directives. The remaining 15 directives will be approximated gradually, within 8 years from the moment the agreement comes into force, and each of them will provide for overlapping time periods before the law enters into force, in order to provide space for local business to adapt to the requirements for fulfilling the new norms.
According to the agreement, an efficient system of market surveillance of industrial products will be implemented, leading to delivery of safe products on the domestic market, which will strengthen environmental protection and safeguard human health.
Brief Chapter Overview
The Agreement covers measures related to products falling under sanitary and phytosanitary arrangements, as well as the arrangements for protecting the health of people, animals and plants:
The Agreement also facilitates the development of the same standard and approach to animal welfare in Georgia and the European Union.
Commitments
According the Agreement, the Georgian side committed to approximate its legislation with the relevant European sanitary and phytosanitary legislations. Six months after the Agreement enters into force, Georgia has to develop a list of the approximation-applicable European legislative acts, which must be divided by priorities and set within a timeline, set to benefit both single and multi-product trading between the Parties.
The legislative approximation is the cornerstone of trade relations between Georgia and the EU, creating the basis for establishing regulatory equivalence. Establishing equivalence will be made possible through one arrangement, a number of arrangements, or the system which relate to a sector, subsector, specific product or product group. Following the formal recognition of equivalence, it will be implemented within the trade between the parties. The decision on recognition of regulatory equivalence can be reflected through lessened physical inspection measures on items at customs checkpoints, along with simplified procedures for including certificates and manufacturing plants in export lists.
Fulfilment of the commitments under the Agreement will enable Georgia to improve its legislation in sanitary and phytosanitary measures, safeguard animal welfare, retain veterinary reliability, protect the country against the spread of harmful species, achieve a sufficient level of regulatory equivalence with the EU, enabling Georgian to trade animal and plant products with the EU under simplified arrangements.
Improving the sanitary and phytosanitary system, as well as approximation to European standards, will improve the safety of Georgian produce and raise its trustworthiness on the global market, bolstering the growth of Georgian export. Additional benefits include:
Brief Chapter Overview
The Agreement deals with transparency in cooperation and procedures regarding customs.
Commitments
Within four years from the entry into force of the Agreement, the Georgian side is obliged to approximate the Georgian legislative framework to that of the EU Council regulation of 12 October 1992 (the EU Customs Code), which includes the process of implementing European Union operative procedures into the Georgian customs system, in order to create equal customs regulatory environment for Georgian and EU businesses. This will allow possibility to implement higher standards of private sector optional law obedience (authorized economic operator), and improving the efficiency of customs control. The modernization of the customs administration system will need to be accelerated, and the associated infrastructure will need to be improved and adequately equipped.
In addition, within four years from entry into force of the Agreement, the Georgian side has the commitment to join the Convention of 20 May 1987 on the Simplification of Formalities in Trade in Goods and the Convention of 20 May 1987 on a common transit procedure.
Georgia, will also approximate regulations on customs enforcement of intellectual property rights with existing relevant EU regulations and directives.
Benefits
Georgian customs regulations will be approximated with European progress regulations. Close cooperation will be established between Georgia and the EU, to support the simplification of import/export procedures.
The legislative approximation process will enable the private sector to minimize expenses for import/export of goods due to different legal obligations in Georgia and the EU. It is notable that the Georgian documentations and guarantee will be valid across the EU (as well as Switzerland, Norway, and Turkey) and transporters will not be obliged to obtain repeat guarantees or to prepare additional documents for customs in transit countries. This will be another saving for entrepreneurs and exporters, operating in Georgia and will positively affect the competitiveness of Georgian products.
The purpose of approximating legislation in protection of intellectual property rights is to facilitate favourable conditions for both local individuals holding intellectual rights, as well those who consume them. Minimalizing copyright infringement and import of falsified products will ensure the accessibility of high quality products and improve consumer rights protection, while contributing to the competitiveness and attracting investments.
Brief Chapter Overview
The Agreement defines the conditions for establishment of enterprises and cross-border supply of services, their treatment standards, as well as the general terms for operating electronic commerce. It includes provisions according to which the Parties have to use National Treatment and Most Favored Nation Treatment for establishment and for cross-border supply of the services.
The Agreement defines general exceptions covering the protection of public order, security, health and cultural heritage. The Agreement also regulates entry and temporary stay of different natural persons for business purposes.
Commitment
The Agreement contains parts on financial, postal and courier services, e-commerce and maritime transport services, and defines conditions for providing these services. This chapter comes with an annex containing the list of EU directives that Georgia needs to implement out over multiple stages:
This Agreement defines that in case of Georgia’s successful legislative approximation in financial, postal, telecommunications and maritime transport fields, further liberalization of the relevant EU market for Georgia’s service providers will be accessible. According to the annex on services market liberalization, Georgia receives better access to the EU market than it is accorded by the EU’s obligations under World Trade Organization. As a result, once the Agreement comes into force, it will be substantially easier to export services from Georgia into the EU. Georgian service provider companies will have the right to:
The Agreement also includes mechanisms for recognizing professional qualifications Following this, providing services by Georgian specialists to in EU countries will become significantly easier.
Brief Chapter Overview
Through the given Agreement, the parties committed to ensure free movement of capital, including profit repatriation and direct investments. The Agreement also covers protective measures in cases of free movement of capital threatening the balance of payments in the country. The Parties also agree to use EU rules for free movement of capital.
Brief Chapter Overview
The agreement envisages a gradual opening of the public procurement market, bilaterally. The agreement covers public procurements within the monetary limits set in the agreement, (minimum of EUR 130,000).
The Agreement also considers the approximation requirements of the Georgian public procurement legislation to the relevant EU acquis, in particular approximation with four main directives concerning to:
Prior to the legislative approximation process, the Georgian side elaborated a roadmap and presented it to the Association Trade Committee. One of the commitments in the Agreement is the setup of an institutional mechanism regarding the formulation and enforcement of procurement policy and dispute resolution.
After the agreement enters into force, Georgian companies will be granted access to the EU public procurement market in a gradual and continuous manner, dependent on the progress made in the legislative approximation process. The annex included by this chapter contains the timeline for legislative approximation and market access.
Brief Chapter Overview
The Agreement defines the parties’ commitments of adequate and effective implementation of international agreements in the field of intellectual property, signed by Georgia and EU, including the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). Moreover, the Agreement requirements fill in and additionally specify the rights and commitments of the Parties in the TRIPS agreement.
The Parties also reinforce their commitments to effectively implement the international agreements administered by World Intellectual Property Organization (WIPO), to which both Parties are parties.
The agreement defines the obligatory standards related to intellectual property rights to be met by all the intellectual property categories provided in the articles of the Agreement, such as copyrights and related rights, trademarks, geographical indications (on this issue an agreement is already signed with the EU, which entered into force in 2012), design, patents, the norms related to data protection, obtaining authorization for medicinal products and plant protection products, and others.
The Agreement also regulates the procedural norms related to the enforcement of intellectual property rights and determines the competencies of judicial authorities and measures that they can implement.
The Agreement also deals with customs cooperation and exchange of information in regard to intellectual property rights. The commitment on approximation to the EU legislation regarding customs is included in the chapter of customs and relevant attachment.
Commitments
According to the Agreement changes need to be made in the following laws:
Regarding enforcement, the Agreement of Civil Enforcement of Intellectual Property Rights establishes the procedural norms that should be reflected in the related legislation (or a related instruction should be introduced into Georgian procedural legislation). Georgia will accede to the TRIPS amendment defined in the “Doha Declaration”.
Once approximation is complete, Georgian legislation will be in line with the EU legislation and will guarantee the protection of intellectual property rights. An effective system of intellectual property rights protection and enforcement will encourages production and commercialization of innovative and creative products.
Brief Chapter Overview
The Agreement provisions contain commitments from parties to adopt legislation regulating competition, and the necessary executive body.
The Agreement does not limit the parties, per the local legislation, to form or maintain state monopolies, state enterprises and entrust enterprises with special or exclusive rights.
Disputes related to the agreement provisions do not fall under the dispute settlement mechanism provided in the Agreement.
Commitments
Per the Agreement, the Georgian side adopts the following commitments:
Benefits
Implementing EU approximated Georgian legislation will enable Georgia to develop a free, competitive and EU-compatible market.
Brief Chapter Overview
The chapter details commitments to ensure both free trade of energy resources, as well as free transit between parties.
Trade of energy resources differs from other fields in that it includes transfer of energy through a predefined infrastructure of transport from providers to its destination, hence falling under a monopoly. Free transit is a mandatory condition for safe energy transport.
In order to ensure transparency in energy transfer (transit), non-discrimination, and access as a service for energy transfer (transit) to all interested parties under competitive conditions, the Agreement obligates the parties to:
The aforementioned will assist the growth of service quality on the competitive market and, subsequently, the safety of this service for agreeing Parties.
Benefits
Georgia has a large hydro generation potential, and its development requires investments and new export market openings, where energy produced in Georgia will be sold, further developing trade. For this reason, the Government of Georgia initiated the construction of the Black Sea Energy Transit Line, enabling the country to join in the unified energy system and supply EU member states with electric energy. As a result, the Deep and Comprehensive Free Trade Area agreement between Georgia and the European Union, one of the primary goals of which is to contribute in free energy resource trade between the parties, will play a significant role in fulfilling this aim. Adopting and executing this commitment towards the EU will serve as a guarantee for European investors to initiate projects on our market and assist in encouraging investment in the energy sector.
It is worth noting that Georgia is an important and trustworthy transit country in the region, accommodating such projects like the Baku–Tbilisi–Ceyhan pipeline, the Baku–Tbilisi–Erzurum Pipeline, etc. These projects turn Georgia into a connective bridge between the Caspian region and western states, as well as being one of the most prominent transit countries related to the development of the Southern Energy Corridor, which falls within the strategic energy safety interests of both Georgia and the EU.
The DCFTA will be an additional pillar of support bolstering similar projects and investments in Georgia.
Brief Chapter Overview
The Agreement ensures the transparency of trade-related regulation systems by way of legislative and normative acts and public accessibility to their projects. Additionally, it facilitates an efficient communication mechanism between the Parties.
Additionally, the provisions of the Agreement ensure the existence of legal, administrative and arbitration organs, which will enable appeals towards taken actions.
Benefits
The primary benefit of the Agreement is ensuring a transparent and predictable legal and regulatory system in the country.
Brief Chapter Overview
The goal of the Agreement is to develop international trade in a way that ensures fulfilment of primary tasks towards sustainable development. The basic principles and rights of labour will need to be upheld in order to ensure decent work conditions.
Labour standards cover all employments and decent work condition guarantees. Additionally, as per the International Labour Organization (ILO) Declaration, the legislation must reflect the primary standards, including:
According to the primary principles of sustainable development (economic growth, social development and environmental protection), advances in trade or internal investment must not be at the expense of local labour or environmental legislation.
Commitments
Commitments undertaken under this Agreement:
Benefits
Implementation of European and international principles will assist Georgia’s sustainable development.
Chapter Overview
The Agreement regulates dispute settlements. Specifically, the dispute settlement agreement provisions in this Agreement regulate disputes related to trade or trade matter explanation/usage in the frame of the Agreement. A special dispute settlement mechanism is implemented for such goals, which is analogous to an existing dispute settlement mechanism within the WTO in terms of structure and stages.
The dispute settlement process in frames of the Agreement has several stages:
The Agreement contains a detailed description of the arbitration competency, its rules of formation, and function. The chapter comes with three annexes that regulate he arbitration and mediation procedures, and define the rules of conduct for the arbiters and mediators.
Brief Chapter Overview
The Agreement covers assessment mechanisms for legislative approximation between Georgia and the EU, as well as exchange of information pertaining to the process.
Commitments
Commitments taken by Georgia under the Agreement:
Benefits
On the basis of legislative approximation assessment, EU will enable market liberalization, granting additional benefits to Georgia.
Preparatory Period before Agreement Negotiations
The preparatory process for the DCFTA began in 2009. The commission’s fact-finding trade mission visit to Tbilisi on 13-14 October 2008 laid the groundwork for the preparatory process to start DCFTA negotiations.
Following the visit, in March 2009, the EU Commission delivered its recommendations to the Government of Georgia regarding Georgia’s preparedness for the DCFTA negotiations, outlining four priority fields: technical barriers to trade, sanitary and phytosanitary measures (food safety), intellectual property rights, and competition.
According to EU requirements, the Government of Georgia developed comprehensive strategies for the recommended fields (excluding intellectual property rights):
Regarding the protection of intellectual property rights, study was conducted on the infringement of intellectual property rights and the state of piracy, supported by UNDP. Prior to the talks, the government of Georgia also adopted a market surveillance strategy for industrial products.
Process for Agreement Approval and Subsequent Stages
The DCFTA Agreement talks officially began in December 2011 and ended in July 2013, after six discussion rounds. The initialization of the Association Agreement was conducted on 28-29 November 2013, under the confines of the “Eastern Partnership Summit” in Vilnius.
On 27 June 2014, the Prime Minister of Georgia signed the Association Agreement in Brussels, subsequently ratified by the Georgian Parliament on 18 July 2016.
On 1 September 2014, the DCFTA part of the Association Agreement entered into force, with the remaining part of the Association Agreement entering into force in July 2016.
