Temporary Export Restrictions Imposed for Six Months: List of Products

The government has imposed a temporary export ban for six months on the export of raw hides from large livestock. According to Armenpress, this decision was made during an executive meeting.

The decision covers the following products:

• Raw hides of large livestock (including buffaloes) or equine animals (fresh or salted, dried, smoked, pickled or otherwise preserved, but not tanned, not glazed or subjected to further processing), with or without hair, repeated or not repeated.
• Raw hides of sheep or lamb skins (fresh or salted, dried, smoked, pickled or otherwise preserved, but not tanned, not glazed or subjected to further processing), with or without woolen covering, repeated or not repeated.
• Other raw hides (fresh or salted, dried, smoked, pickled or otherwise preserved, but not tanned, not glazed or subjected to further processing), with or without hair, repeated or not repeated.

Deputy Minister of Economy Avag Avanesyan stated that the decision is based on the necessity to limit the export of a product of significant importance to Armenia (raw leather), to protect local production, and to ensure raw material supply, as well as to stimulate the activity of Armenia's processing industry.

“The government of the Republic of Armenia is taking effective steps to process secondary raw materials locally and to enable local industrial enterprises to develop their own manufacturing using raw leather products,” said Avanesyan.

As per the justification, local industrial companies engaged in leather processing in Armenia currently have demand for leather raw materials, and the possibilities for the raw material base are still not being used to their full capacity. Studies have shown that under conditions of restricting the export of primary raw materials, a 1% reduction in the domestic market of primary raw materials, combined with accessibility for producers of appropriate quality and volumes, would result in an approximately 16.1% increase in the production volumes of leather and shoes, a 29.7% increase in profits from the shoe production, and a 5.9% increase in state budget revenues from relevant product categories.

With the availability of raw materials necessary for leather processing in Armenia, leather processing companies will be reactivated, potentially creating 300-350 new jobs.

According to the data from the State Revenue Committee of Armenia, in 2020, about 50,900 pieces of raw hides of large livestock were exported from the republic (4101) with a customs value of about $259.6 thousand, marking a 50.5% decline compared to 2019. The main export markets are Turkey and the Islamic Republic of Iran.

In 2020, approximately 800 pieces of raw sheep hides and lamb skins (4102) were exported from the republic with a customs value of about $3.3 thousand, marking a 70.0% increase compared to 2019. The main export markets are the Russian Federation and Italy.

According to the data from the Armenian Statistical Committee, in 2020, leather production (tanning and finishing, natural and compound leather production) was carried out by 39 companies. The production volumes reached 126.6 million AMD, marking a 7.7-fold increase compared to 2019, with sales amounting to 201.1 million AMD, which is a 13.8-fold increase compared to 2019.

The adoption of this draft will allow for the application of restrictions on the export of such products within the framework of the EAEU legislation, which, by processing them locally, will contribute to the country’s defense and security.