Import is the entry of goods, works, services, results of intellectual activity, including exclusive rights to them, into the customs territory of the country from abroad without the obligation to re-export. And export is the exit of goods, works, services, results of intellectual activity, including exclusive rights to them, from the customs territory of the country abroad without the obligation to re-import.

The EAEU (Eurasian Economic Union) is an international organization of regional economic integration with international legal personality and established by the Treaty on the Eurasian Economic Union. The EAEU ensures the free movement of goods, services, capital and labor, as well as the implementation of a coordinated, agreed or unified policy in the sectors of the economy. The member states of the Eurasian Economic Union are the Republic of Armenia, the Republic of Belarus, the Republic of Kazakhstan, the Kyrgyz Republic and the Russian Federation. The EAEU was created for the purpose of comprehensive modernization, cooperation and increasing the competitiveness of national economies and creating conditions for stable development in the interests of improving the living standards of the population of the Member States.

Import and export of jewelry and precious metals within the EAEU is regulated by the Agreement on the Specifics of Transactions with Precious Metals and Precious Stones within the Eurasian Economic Union dated November 22, 2019. Article 2 of this agreement defines the legal relations and types of transactions to which the provisions of the presented agreement relate. Paragraph 1 of Article 2 reads: “This Agreement defines the specifics of carrying out transactions with precious metals and precious stones within the Union and applies to legal relations related to the activities of legal entities and individuals registered as individual entrepreneurs (hereinafter referred to as individual entrepreneurs) to carry out transactions with precious metals and precious stones.” It can be understood that legal relations related to the activities of ordinary citizens who are not registered as individual entrepreneurs and who do not have a registered legal entity are not regulated by this document. Article 2, paragraph 2, defines what is meant by transactions in precious metals and stones:

1. actions related to the transfer of ownership and other property rights to precious metals and precious stones (circulation of precious metals and precious stones), including the use of precious metals and precious stones as collateral;
2. changes in the physical condition or content of precious metals and precious stones in any substances and materials during the mining, production of precious metals, extraction of precious stones, subsequent processing (processing) and use of precious metals and precious stones;
3. movement of precious metals and precious stones, which are goods of the Union, through the territories of the states that are not members of the Union, and (or) by sea, as well as through the customs territory of the Union (including transportation of precious metals and precious stones to storage places, funds and reserves), their storage and exhibition;
4. import of precious metals and precious stones into the customs territory of the Union and their export from the customs territory of the Union in accordance with the procedure established by acts included in the law of the Union.

Paragraph 3 of the same article states that this agreement does not apply to activities that are not related to business, but are carried out for personal, family, household or other use.

Article 7 of the submitted agreement states: “The movement of rough natural diamonds from the territory of one Member State to the territory of another Member State shall be carried out in accordance with the requirements of the International Certification Scheme for Rough Natural Diamonds. The procedure for the registration and issuance of certificates of the International Certification Scheme for Rough Natural Diamonds (Kimberley Process Certificate*), as well as the procedure for monitoring compliance with the requirements of the International Certification Scheme for Rough Natural Diamonds, shall be established by the legislation of the Member State.”

*A Kimberley Process Certificate is a forgery-proof document in a specific format that identifies a shipment of rough diamonds as compliant with the requirements of the Certification Scheme.

Article 8 stipulates that within the framework of the Union, transactions with precious stones whose classification characteristics have not been determined shall not be permitted. Determination of classification and cost characteristics of precious stones is carried out on the basis of regulatory and technical documentation applied within the Union in the process of sorting, primary classification and primary assessment (in case of extraction in the territory of a Member State), identification (in case of import into the customs territory of the Union from the territories of states that are not members of the Union), as well as upon completion of their processing.

Article 11 states that jewellery and other articles which have been imported into the territory of the Union and released in accordance with the customs procedure of release for domestic use must comply with the fineness established by the requirements for the assay, analysis and branding of jewellery and other articles. This article also establishes provisions relating to exports to the Member States of the Union and to third countries. Paragraph 6 stipulates: “Jewelry and other articles branded with an assay mark in the territory of one Member State, if they are transferred to the territory of another Member State, shall not be subject to additional testing, analysis and branding.” Paragraph 5 stipulates: “Jewellery and other articles produced in the territory of a Member State intended for export to States that are not members of the Union shall not be subject to testing, analysis and branding if this is provided for by the legislation of the Member State in the territory of which such articles are manufactured.”

The Tax Code of the Republic of Armenia also provides regulations in this area. Article 64 of the Tax Code of the Republic of Armenia provides for transactions and operations that are exempt from value added tax. Clause 26 of Part 2 of this Article states that transactions related to the alienation of precious metals (with the exception of products (items) made of precious metals, including jewelry and other products), as well as semi-products for jewelry purposes made of precious metals classified as codes according to the Commodity Nomenclature of Foreign Economic Activity, are exempt from VAT:

• 7106 (Silver (including silver plated with gold or platinum), unwrought or semi-wrought or in powder form)
• 7108 (Gold (incl. platinum-plated gold), unwrought or semi-wrought or in powder form),
• 7109 00 000 0 (Base metals or silver, clad with gold, unwrought or semi-finished),
• 7110 (Platinum, unwrought or semi-processed, or in powder form),
• 7113 (Jewelry and parts thereof, of precious metals or metals clad with precious metals),
• 7115 (Other articles of precious metals or metals clad with precious metals)

* Commodity Nomenclature of Foreign Economic Activity (since 2017 the Commodity Nomenclature of Foreign Economic Activity of the EAEU) is a classifier used for customs operations by customs clearance specialists and customs officers.

According to paragraphs 1 and 2 of part 2 of Article 65 of the Tax Code of the Republic of Armenia, the supply of goods exported from the territory of the Republic of Armenia under the customs procedure “Export” (with the exception of ferrous and non-ferrous scrap metals) and the supply of goods (except for ferrous and non-ferrous scrap) with the status of EAEU goods from the territory of the Republic of Armenia to the EAEU member state is taxed at a VAT rate of 0% in case of submission of a document to the tax authority,  specified in Part 1 of Article 76 of the Tax Code of the Republic of Armenia (submission of an export tax declaration by the exporter to the tax inspectorate), respectively.

With regard to imports, Article 77 § 1 stipulates:

“In case of importation into the territory of the Republic of Armenia from the EAEU member states of goods that have the status of goods of the EAEU (including those established by part 6 of Article 59 of the Code), the taxpayer is obliged to submit to the tax authority only the following documents by the 20th day of the month following the month that includes the day of importation of goods into the territory of the Republic of Armenia (crossing the state border of the Republic of Armenia):

1) import tax return completed by the importer;

2) an application completed by the importer for the import of goods and payment of indirect taxes (or for exemption from payment of indirect taxes, for payment of indirect taxes in another manner) on paper (in four copies) and in electronic form, or an application completed by the importer for the import of goods and payment of indirect taxes (or for exemption from payment of indirect taxes, for payment of indirect taxes in another manner) in electronic form with the electronic (digital) signature of the taxpayer.

The Protocol on Non-Tariff Regulation Measures in Relation to Third Countries (Annex No. 7 to the Treaty on the EAEU) provides for licensing in the field of foreign trade in goods (Chapter 9):

“47. Licensing shall be carried out by issuing a license for export and (or) import of goods by an authorized body to a participant in foreign trade activity. Licences issued by the competent authority of one Member State shall be recognized by all other Member States. 

48. Licensing of export and (or) import of goods included in the unified list of goods shall be carried out in accordance with the rules provided for in the Annex to this Protocol. 

49. The following types of licenses shall be issued by authorized bodies: one-time license; general license; Exclusive License. Issuance of general and exclusive licenses is carried out in cases determined by the Commission.” In Armenia, the licensing authority is the Ministry of Economy of the Republic of Armenia.

Article 4 of the Rules for the Issuance of Licenses and Permits for the Export and (or) Import of Goods determines that licenses are issued for each product classified according to the Commodity Nomenclature of Foreign Economic Activity of the EAEU, in respect of which licensing or supervision has been introduced.

Certain regulations in this area are also provided by the RA Law “On Customs Regulation”, “On Precious Metals” and the acts attached to them.

If you need legal assistance in the field of import and (or) export of precious metals and jewelry, please contact Vardan Khechyan’s office:

☎+374 33 311 00

✉vardan@khechan.com

🏢 0002 Yerevan, Yekmalyan Street 6, floor 2

🔗 https://www.armenianlaw.com/

Tg: @VardanLaw