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Agri-Product Exporters' Toolkit

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Agri-Product Exporters' Toolkit IN PARTNERSHIP WITH Delivered by IFC/World Bank Group in partnership with the UK Government’s Good Governance Fund AGRI-PRODUCT EXPORTERS’ TOOLKIT FROM ARMENIA TO KUWAIT 1 This Report was prepared by International Center for Agribusiness Research and Education (ICARE) foundation DISCLAIMER This material has been funded by UK aid from the UK government; however the views expressed do not necessarily reflect the UK government’s official policies. This report is made possible by the generous support of the IFC. The contents are the responsibility of ICARE and do not necessarily reflect the views of the IFC. 2 Table of Contents EXECUTIVE SUMMARY .................................................................................................................................................. 4 1 HOW TO PREPARE FOR EXPORT ............................................................................................................................ 7 1.1 Export Policy of Armenia .............................................................................................................................. 7 1.2 Customs Procedure of Armenia ................................................................................................................... 7 1.3 Customs Requirements, Phyto-sanitary regulation by product category and Certificate of Origin 8 1.4 Export Value of Armenia to the Middle East Countries (in USD) ............................................................... 10 1.5 Transportation prices, packaging, temperature control, routes, duration, and key players .................... 10 2 HOW TO PREPARE FOR THE IMPORT INTO KUWAIT ............................................................................................ 12 2.1 Brief market information ........................................................................................................................... 12 2.2 Demand Structure and Distribution Channels of Kuwait ........................................................................... 13 2.3 Value chain information, advertisements and market entrance strategy ................................................. 13 2.4 Pricing and Credit Policy ............................................................................................................................ 14 2.5 Import policy of Kuwait .............................................................................................................................. 15 2.6 Customs Procedure of Kuwait.................................................................................................................... 16 2.7 The food safety and control system .......................................................................................................... 17 2.8 Labelling/Marking Requirements .............................................................................................................. 17 2.8.1 Labelling requirements in the GCC market ........................................................................................ 18 2.8.2 Prohibited and Restricted Imports ..................................................................................................... 18 3 MARKET RECOMMENDATIONS ........................................................................................................................... 19 3.1 Flowers ....................................................................................................................................................... 19 3.2 Fruits and Vegetables ................................................................................................................................. 19 3.3 Nuts ............................................................................................................................................................ 20 3.4 Berries ........................................................................................................................................................ 21 3.5 Business culture ......................................................................................................................................... 21 4 CONTACTS OF EMBASSIES ................................................................................................................................... 23 3 EXECUTIVE SUMMARY As a result of successful implementation of the Advisory Projects implemented by International Finance Corporation (IFC) since 2009, the Government of Republic of Armenia (GoAM) has requested that the IFC continue to assist in improving the investment climate in Armenia. Therefore, a new Armenia Economic Growth Project was started in October 2019, which aims to improve the GoAM’s ability to attract export-oriented foreign direct investment (FDI) in high value-added segments and promote exports of specific agricultural products. The Project will assist the GoAM in refining its investment policy to attract investments in high value-added export sectors and increase exports of specific agricultural produce. In this context, International Center for Agribusiness Research and Education (ICARE) has been contracted by IFC to conduct a “Middle East as an Alternative Market for Armenia” study. For the mapping exercise, the supply chain and its effectiveness are viewed from a business perspective, including primary producers, processors, retailers and wholesalers, exporters, and transporters. In order to compile the necessary information, meetings and discussions were held with supply chain participants, including public and private stakeholders as well as with the relevant embassies represented in Armenia. As a result, it was agreed to target the agricultural product markets of the United Arab Emirates (UAE), Egypt, Qatar, Kuwait, and Jordan, with a special focus on the UAE, as the pilot export promotion countries for Armenia’s focus. The analysis is based on local and international information sources, official statistical data, local and international reviews, and analytical materials pertaining to project- targeted product (PTP) production. The Executive Summary of the report can also serve as a standalone document that summarizes key findings and presents recommendations on how to meet the challenges. The study was conducted by ICARE foundation from January to May of 2020 under the management of Research Director Lusine Tadevosyan. The following expert team played an essential role in compiling this report: - Hasmik Hovhannisyan, PhD, Technical Lead/Policy expert - Armen Asatryan, PhD, Agricultural expert - Lusine Tadevosyan, Trade expert - David Pipoyan, Sanitary and Phytosanitary expert - Astghik Sahakyan, Senior researcher - Hasmik Hayrapetyan, Senior researcher The project team would like to thank Mr. Arsen Nazaryan, Ms. Gayane Mkrtchyan, and Ms. Siranush Iskandaryan at IFC for their collaboration throughout the project. Furthermore, the project team would like to thank Felicia Pricop (WBG, Agriculture Policy Consultant), Bekzod Shamsiev (WBG, Senior Agriculture Economist), and Christophe Ravry for their valuable comments and recommendations on the report. The project team would also like to extend its gratitude to all the stakeholders and organizations that supported project implementation through fruitful discussions and individual meetings, in particular, Arman Khojoyan, the Deputy Minister of Economy, relevant departments of the 4 Ministry of Economy of the Republic of Armenia, local producers, exporters, associations, and Non-Governmental Organizations (NGOs). 5 ABBREVIATIONS CAGR Compound Annual Growth Rate COVID-19 Coronavirus disease EAEU Eurasian Economic Union EU European Union FCL Full Container Load FDI Foreign direct investment FTZ Free Trade Zones GCC Gulf Cooperation Council GDP Gross Domestic Product GMO Genetically modified organism GoAM Government of the Republic of Armenia GSO Gulf Standardization Organization HS Harmonized system ICARE International Center for Agribusiness Research and Education IFC International Finance Corporation IPR Intellectual Property Rights LCL Less Container Load LLC Limited Liability Company ME Middle East NGO Non-governmental organization PTC project targeted countries PTP project targeted products1 UAE United Arab Emirates UK United Kingdom USD United States Dollar VAT Value-added tax WTO World Trade Organization 1 A detailed list of PTP can be found in Report on Middle East as an Alternative Market for Armenia, Table 11.1, Annex 11. 6 1 HOW TO PREPARE FOR EXPORT 1.1 Export Policy of Armenia Armenian export policy continues to be relatively open to the world economy with simplified requirements. The Republic of Armenia has been a member of the World Trade Organization (WTO) since 2003. In 2015, Armenia also became a member of the Eurasian Economic Union (EAEU) giving it free access to this large market. There are no export restrictions and export taxes in Armenia, and there is no system of minimum export prices. Exported goods and ancillary services are zero rated for value-added tax (VAT) purposes. According to the Customs Code of Armenia, all goods exported from Armenia are subject to customs declarations. Goods must be declared at the regional customs office closest to the exporter’s location, with the exception of goods exported via Zvartnots International Airport, which must be declared at the airport customs office. 1.2 Customs Procedure of Armenia Armenia’s exportation of goods is implemented through a mandatory customs procedure and, for certain products (e.g. fresh fruits,
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