Technical barriers to trade
State Policy and regulatory framework in the area
The Constitution of the Republic of Azerbaijan provides that all persons have a right for healthy life and environment. In order to develop the above provision and establish the legal basis for standardization and conformity assessment, the Parliament of Azerbaijan approved several laws and ratified international agreements.
The following laws are the primary normative acts regulating TBT issues:
- Law No 60-IQ "On standardization”, adopted on 16.04.1996
- Law No 965-IVQ "On accreditation in the field of conformity assessment”, adopted on 30.05.2014
- Law No 1113 "On protection of consumers’ rights”, adopted on 19.09.1995
- Resolution of the Cabinet of Ministers of the Republic of Azerbaijan No 343 "On Regulation on National certification system”, adopted on 01.07.1993
The WTO Agreement on Technical Barriers to Trade and the Azerbaijani legislation in the area
The Agreement on Technical Barriers to Trade ("TBT Agreement") includes features specific to the preparation and application of regulatory measures that affect trade in goods: it strongly encourages the use of international standards, and it emphasizes the need to avoid unnecessary barriers to trade. Moreover, it contains detailed provisions to clarify the entire process of preparing, adopting and applying TBT measures (the regulatory life-cycle). The TBT Agreement also shares many of its fundamental principles with other WTO agreements – non-discrimination, promoting predictability of access to markets, and technical assistance and special and differential treatment for developing countries in the implementation of the Agreement.
The TBT Agreement covers trade in all goods (both agricultural and industrial) – this is explicitly set out in Article 1.3. The following are not covered:
- Services (Article 1.3 and the opening paragraph of Annex 1 of the TBT Agreement)
- Purchasing specifications prepared by government bodies for production or consumption requirements of governmental bodies (Article 1.4 of the TBT Agreement)
- Measures covered by the Agreement on the Application of Sanitary and Phytosanitary Measures ("SPS Agreement") (Article 1.5 of the TBT Agreement)
Three categories of TBT measures
The TBT Agreement distinguishes between three categories of measures:
- Technical regulations
- Conformity assessment procedures
The precise definition of these measures is contained in the TBT Agreement.
If the measure does not fall under any of these three categories of measures, the TBT Agreement does not apply to it.
Technical regulations set out requirements with which compliance is mandatory. This is a basic difference with standards, which are voluntary. Types and product coverage may vary widely: they may be specific, for example relating to maximum permitted levels of lead in paint used on toys or prohibiting the use of certain additives in tobacco products. Other measures may be more general in nature, involving, for example, the establishment of criteria for the labelling of organic agricultural products, or emission requirements for diesel engines. What they have in common is that, through some form of government intervention (law, regulation, decree, act), market access is contingent on fulfilling the requirements set out in the technical regulation.
According to WTO jurisprudence, for a technical regulation to exist, the following three criteria must be present:
- The requirements (set out in the document containing the technical regulation) must apply to an identifiable product or group of products (even if this is not expressly identified in the document)
- The requirements must specify one or more characteristics of the product (these may be intrinsic to the product itself, or simply related to it, and they may be prescribed or imposed in either a positive or a negative form) and
- Compliance with the product characteristics must be mandatory
Example of a technical regulation:
To establish a modern legal framework for application of non-tariff measures, the draft Law "On Technical Regulation” and the new draft Law "On Standardization”, which reflect basic requirements of the TBT Agreement, have been submitted to the Parliament of the Republic of Azerbaijan.
Unlike technical regulations, standards are not mandatory and can be developed by a large number of different entities, including both governmental and non-governmental bodies. Standards are often used as the basis for both technical regulations and conformity assessment procedures and, in such cases, the requirements set out in the standard become mandatory by virtue of government intervention (via technical regulations or conformity assessment procedures).
Standards are addressed by the TBT Agreement in a separate "Code of Good Practice for the Preparation, Adoption and Application of Standards" (the Code) contained in Annex 3 of the TBT Agreement. This Code, which is open to acceptance by any standardizing body, offers guidance on the process of developing standards (e.g. these should be transparent and standardizing bodies should accept comments and avoid duplication). The TBT Agreement (Article 4) instructs Members to ensure that their central government standardizing bodies accept and comply with the Code. As of July 2018, 164 standardizing bodies (of all types) have notified their acceptance of the Code. For the many standardizing bodies that are non-governmental in nature, the TBT Agreement requires that governments "take such reasonable measures as may be available to them to ensure that local government and non-governmental standardizing bodies within their territories … accept and comply with this Code of Good Practice". Thus, the TBT Agreement attributes a certain degree of responsibility to governments to ensure that non-governmental entities within their territories abide by disciplines laid out within the Code that, to a large degree, mirror the principles in the TBT Agreement.
Example of a standard
The general framework for preparation and application of standards in Azerbaijan is provided by the Law "On Standardization" No. 60 of April 16, 1996. This Law established two types of standards – mandatory (also known as "State standards") and voluntary. 22,000 Intergovernmental Standards ("GOST") and 700 national standards ("AZS") are applicable in the territory of the Republic of Azerbaijan. Most of them were either fully mandatory or contained mandatory aspects.
As indicated above, a draft law “On Standardisation” has been submitted to the Parliament of the Republic of Azerbaijan and is currently under the procedure for adoption.
Conformity assessment procedures are used to determine whether goods such as toys, electronics, food, and beverages fulfil the requirements established by relevant technical regulations or standards. They give consumers confidence in the integrity of products and add value to manufacturers' marketing claims. Typical conformity assessment procedures include testing, inspection and certification procedures. Given that different types of conformity assessment procedures affect trade differently, a key issue from the perspective of the WTO is the choice of which conformity assessment procedure to use in a particular situation. One factor that might influence this choice is the level of risk: for instance, third-party certification (a form of conformity assessment procedure that tends to be costlier than, for example, a supplier’s declaration of conformity) may be the choice in situations in which the risk of harm is sufficiently high.
The list of products subject to mandatory certification in Azerbaijan was established by the Resolution of the Cabinet of Ministers No. 343 of July 1, 1993. You can find more information on the following link: www.e-qanun.az/framework/13985
The import of goods subject to mandatory certification is only possible on the basis of a conformity certificate issued by the relevant executive body or a recognized conformity certificate (Article 10.4 of the Law "On Protection of Rights of Consumers"). All products, including domestically produced products, subject to mandatory certification shall be certified before they could be placed in the market in Azerbaijan (Article 3.2 of the Regulations on the National Certification System). In addition, Article 3.5.1 of the Regulations on the National Certification System provides that importers shall obtain a conformity certificate or a recognized foreign certificate prior to importation. Azerbaijan only accepts as equivalent certificates from countries that have mutual recognition agreements with Azerbaijan (CIS countries, Bulgaria, Iran and Turkey). Test results from laboratories accredited according to ISO/IEC 17025 and test results submitted by conformity assessment bodies accredited by a member of International Laboratory Accreditation Co-operation ("ILAC") are also recognized in Azerbaijan.
What is important from the trade perspective is to avoid having regulations set arbitrarily and to ensure that they are not used to protect domestic producers from foreign competition. Respecting these fundamental disciplines is an essential means of ensuring that countries can attain their public policy goals while benefitting from open trade.
Under the TBT Agreement, governments must ensure that TBT measures do not discriminate against foreign products (in favour of domestic producers), or between foreign producers (for example, by favouring one country over another): products imported from the territory of any member shall be accorded "treatment no less favourable" than that accorded to "like products" of national origin and to like products originating in any other country. These disciplines apply to all three categories of measures covered by the TBT Agreement: technical regulations (Article 2.1), standards (Annex 3.D) and conformity assessment procedures (Article 5.1.1).
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Executive authorities and their competences
On December 27, 2001, the State Agency on Standardization, Metrology and Patents (AZSTAND) was established through Decree of the President of the Republic of Azerbaijan No. 623. On November 19, 2008, the Agency was transformed into the State Committee on Standardization, Metrology and Patents according to Presidential Decree No. 53. Under the responsibility of the said Committee, three separate State Services in charge of standardisation, accreditation and metrology existed.
On February 10, 2017, through the Decree of the President of the Republic of Azerbaijan No. 1234 "On additional measures on improvement of management in the spheres of standardization, metrology, accreditation and protection of patent law objects”, the following public legal entities were established:
- The Azerbaijan Standardisation Institute
- The Azerbaijan Accreditation Centre
- The Azerbaijan Metrology Institute
The changes were justified for the purpose of ensuring stability of economic reforms, improvement of quality, safety, competitiveness and the export potential of products made in Azerbaijan, bigger liberalisation of foreign trade, reduction of spheres of standardization, metrology, accreditation and protection of subjects of the patent law in compliance with modern requirements, achievements of increase in transparency and efficiency of the mechanism of control, as well as to ensure implementation of the actions provided in "The strategic roadmap on prospect of national economy of the Azerbaijan Republic".
On April 20, 2018, the President of the Republic of Azerbaijan signed the Decree “On Measures regarding the improvement of administration in the areas of consumer market supervision, standardization, metrology and protection of intellectual property rights”. According to the said Decree, following measures shall be taken:
- On the basis of the State Service for Antimonopoly Policy and Consumer Rights Protection under the Ministry of Economy of the Republic of Azerbaijan, the State Agency for the Control of Antimonopoly and Consumption Market of the Republic of Azerbaijan is to be established as a central executive body
- The State Committee for Standardization, Metrology and Patent of the Republic of Azerbaijan is to be abolished
- The authority of the abolished Committee with respect to technical regulation, standardization, metrology, conformity assessment, accreditation and quality management shall be passed to the State Agency for the Control of Antimonopoly and Consumption Market (the State Agency)
- The powers of founders of public legal entities of "Azerbaijan Metrology Institute", "Azerbaijan Institute of Standardization" and "Azerbaijan Accreditation Centre" are to be transferred to the State Agency
The liquidation of the State Committee for Standardization, Metrology and Patent started in May 2018. As of July 2018, the Charter for the State Agency for the Control of Antimonopoly and Consumption Market has not yet been approved and published. The Agency is therefore not yet functional. Until that occurs, the Ministry of Economy is in charge of the supervision of the TBT area.
WTO pages dedicated to TBT matters:
- WTO Agreement on Technical Barriers to Trade
- General page on the TBT Agreement
- TBT Information Management System (including a list of all TBT notifications)
- Enquiry Points
- E-Ping SPS and TBT notification alert system
- List of disputes related to the TBT Agreement
- Dispute settlement jurisprudence in the TBT area
- Book “The WTO Agreements Series – Technical Barriers to Trade”
- Brochure “Technical Barriers to Trade – Reducing trade friction from standards and regulations”
- Research paper “Trade, testing and toasters: Conformity assessment procedures and the TBT Committee”
International Trade Centre