DECISION OF ECONOMIC COURT OF COMMONWEALTH OF INDEPENDENT STATES

of June 19, 2006 No. 01-1/5-05

Economic Court of the Commonwealth of Independent States in structure: the chairman - the Chairman of Economic Court of the CIS Kerimbayeva A. Sh.,

judges of Economic Court of the CIS: Abdulloyeva F., Zholdybayev S. Zh., Miroshnik V. I., Molchanovy T.N., in case of the court clerk Medvedeva T. E.,

with participation of the General adviser of Economic Court of the CIS Pavlova L. V.,

having considered case on request of the Ministry of Foreign Affairs of the Republic of Kazakhstan on interpretation in proceeding in open court, ESTABLISHED:

The Ministry of Foreign Affairs of the Republic of Kazakhstan appealed to Economic Court of the Commonwealth of Independent States with request about interpretation of application of the Rules of determination of the country of goods' origin approved by the Decision of Council of CIS Heads of Government on Rules of determination of the country of goods' origin of November 30, 2000.

The Ministry of Foreign Affairs of the Republic of Kazakhstan asks to explain whether the regulations provided by Rules of determination of the country of goods' origin of November 30, 2000 extend to the goods imported from the Republic of Uzbekistan on customs areas of the State Parties of the CIS.

Having heard the judge-speaker Molchanova T. N., having discussed the conclusion of the General adviser of Economic Court of the CIS Pavlova L. V. and having researched the documents which are available in case, the Economic Court of the CIS came to the following conclusions.

The decision of Council of CIS Heads of Government on Rules of determination of the country of goods' origin of September 24, 1993 (further - Rules of September 24, 1993) is the intergovernmental act and as there are no premises for its qualification as the international treaty, has advisory nature. The decision of Council of CIS Heads of Government of September 24, 1993 is signed by all State Parties of the Commonwealth, except Georgia.

The agreement on creation of the free trade area of April 15, 1994 existing with changes and additions made by the Protocol of April 2, 1999 (further - the Agreement of April 15, 1994), belongs to open regional agreements and sets legal regime of the free trade area of the State Parties of the CIS.

The agreement of April 15, 1994 and the Protocol to it became effective for the Azerbaijan Republic, the Republic of Armenia, the Republic of Belarus, Georgia, the Republic of Kazakhstan, the Kyrgyz Republic, the Republic of Moldova, the Republic of Tajikistan, the Republic of Uzbekistan, Ukraine. The Russian Federation which signed the specified acts notified the Executive committee of the CIS performing functions of depositary, about their application from the moment of signing is temporary, before completion of interstate procedures. The agreement of April 15, 1994 is applied to Turkmenistan which did not perform interstate procedures for its entry into force temporarily. At the same time the Protocol to the Agreement of April 2, 1999 is not signed by Turkmenistan.

According to item 4 of article 3 of the Agreement of April 15, 1994 "the country of goods' origin is determined according to the Rules of determination of the country of goods' origin which are integral part of the Agreement (appendix No. 1)". At the same time, according to depositary, the document processed as appendix No. 1 to the Agreement of April 15, 1994 was not accepted.

Considering this circumstance, and also in view of that at the time of agreement signature of April 15, 1994 the single unified Rules of determination of country of source approved by the Decision of Council of Heads of Government of September 24 1993, Economic Court of the CIS were effective believes that the states considered regulations of the specified Rules as integral part of the Agreement of April 15, 1994. Therefore, Rules of September 24, 1993 owing to contractual and legal nature of the Agreement of April 15, 1994 became obligatory for execution by the State Parties of the Agreement. This conclusion is based on the conventional principles of interpretation of international treaties, provisions of article 31 of the Vienna convention on the right of international treaties of 1969, and also is confirmed by the bilateral agreements of the State Parties of the Agreement of April 15, 1994 containing the regulations of rules of determination of the country of goods' origin identical to regulations of Rules of September 24, 1993.

The decision of Council of CIS Heads of Government on Rules of determination of the country of goods' origin of November 30, 2000 approves new Rules of determination of the country of goods' origin which have excellent, in comparison with Rules of September 24, 1993, the legal nature. In particular, of November 30, 2000 demonstrates the fact that its entry into force requires accomplishment of interstate procedures to contractual nature of the Decision. According to depositary, for date of decision of the Rule of November 30, 2000 became effective for Georgia, the Republic of Kazakhstan and the Russian Federation - from the date of signing; for the Azerbaijan Republic, the Republic of Armenia, the Republic of Belarus, the Kyrgyz Republic, the Republic of Moldova, the Republic of Tajikistan, Ukraine - from the moment of deposition.

The item 4 of the Decision of November 30, 2000 containing regulations that after its entry into force the Decision of September 24, 1993 stops the action cannot be considered as the certificate for benefit of the identical status of these decisions. According to Economic Court of the CIS, the states which joined the Decision of November 30, 2000, relying on Article 30 provisions (4a) of the Vienna convention on the right of international treaties of 1969, applying by analogy of regulation of Article 59 (1a) of the Vienna convention of 1969, obviously expressed the intention to stop application of Rules of September 24, 1993 in the relations among themselves. However the Republic of Uzbekistan and Turkmenistan did not join this Decision.

Thus, concerning determination of the country of goods' origin there are two existing international agreements: Agreement of April 15, 1994 and Decision of Council of Heads of Government of November 30, 2000. Both acts contain Rules of determination of the country of goods' origin which as integral part of the relevant agreements are binding. In situation when two agreements on the same question are consistently signed, one of the general principles of the right of "lex posterior derogat priori" is subject to application - "later law cancels earlier" and the rules of item 4 of article 30 of the Vienna convention of 1969 providing: if not all participants of the subsequent agreement are participants of the previous agreement, then in the relations between them regulations of the subsequent agreement, and regulation of previous - only in that part in which they do not contradict provisions of subsequent are applied. The mutual rights and obligations in the relations between the State Party of both agreements and the State Party only of one agreement are regulated by the agreement which participants are both states.

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