RESTRICTEDWORLD TRADE
ORGANIZATIONWT/ACC/HRV/49
18 May 1999
(99-2003)
Working Party on the
Accession of CroatiaOriginal:  English
ACCESSION OF CROATIA
Communication from Croatia
The following information on non-agricultural subsidies in the Republic of Croatia in 1998
and 1999, reproduced hereunder, has been received from the Permanent Mission of the Republic ofCroatia.WT/ACC/HRV/49
Page 2
SUBSIDIES BY INDIVIDUAL SECTORS
The Industrial and Shipbuilding Sector
The Ministry of Economy intervened in certain companies with the objective of rehabilitation
and financial consolidation, restructuring of chosen entities and promoting of production. The
measures did not have the character of subsidies aiming at enforcing their domestic or international
competitiveness. The purpose of these measures was to create basis for normal business activity afterthe completion of rehabilitation or restructuring process.
The need for this type of rehabilitation is due to the significant direct or indirect war damage
during the aggression against Croatia suffered by many companies which were not able to solve theemerged problems with their own resources.
Most of the these companies are predominately in state ownership with a big number of
employees and of special importance for certain regions and local communities. As there has been alack of foreign direct investment, Croatian Governme nt was forced to intervene with direct transfers
in order to, at least up to a certain point, preserve the level of employment and to avoid a number of
bankruptcies which would cause social tensions with unknown consequences.
Legal basis for the said interventions:
- Law on Rehabilitation of Certain Enterprises, Official Gazette No. 55 and 109, 1995
- Law on State Budget for 1998, Official Gazette No. 141, 1997- Law on the Execution of the State Budget for 1998, Official Gazette No. 167, 1998- Law on State Budget for 1999, Official Gazette No. 167, 1998- Law on the Execution of the State Budget for 1999, Official Gazette No., 167, 1998
Policy objectives and justification:
1. Dismissal (severance) wage to lay-offs and disabled (as a consequence of war) workers
(Legal basis is the Labor Law, Official Gazette No. 38, 1995)
2. Payment of delayed salaries in the companies that were subject to rehabilitation
3. Regulating obligations for non-paid taxes and contributionsWT/ACC/HRV/49
Page 3
4. Contribution for repayment of outstanding debts to public companies HEP (Croatian
Electricity), HPT (Croatian Post and Telecommunications), Croatian Forests etc.
5. Aid for partial payment of outstanding debts to suppliers and other creditors (banks, HGK
(Croatian Chamber of Economy), insurers etc.)
6. State guarantees to foreign and domestic banks for loans for preparation of production and
modernization of technology
7. Funds for promotion and maintaining of production - when assessed that it is necessary in
order to continue production
All measures are temporary and will not be ap plied permanently. The number of beneficiaries
is limited
So far, around 160 companies from all sectors and not only from manufacturing received the
said forms of aid. The Government intended to gradually terminate this form of direct interventionsand to introduce the horizontal measures of industrial policies. This intention is built in the 1999
budget. Only 45% of the budgetary funds of the Ministry of Economy are designated for direct
interventions for reconstruction and rehabilitation. The remaining funds are designated for horizontalmeasures of industrial policy and on the basis of the equality for all companies.
The enclosed tables contain amounts, beneficiaries and types of interventions in 1998.
Programs planned for 1999:
1
Transfers for restructuring of industry - 145 282 540 kn
Covers restructuring of shipyards Uljanik d.d., Pula; 3. Maj d.d., Rijeka; Brodogradilište
Trogir d.d., Trogir, Brodogradilište Split d.d., Split and Željezara Sisak d.d., Sisak.
Transfers for disassembly of plants according to the decisions of the Government of the Republic of
Croatia on the termination of work -  20 000 000 kn
Covers continuation of disassembly of Koksara Bakar d.d., Bakar and Tvornica elektroda i
ferolegura d.d., Šibenik.
Transfers for introduction of new technologies - 60 000 000 kn
                                                     
1 Note:  The exchange rate on 15 April 1999 was 1 US$ = 7 HRKWT/ACC/HRV/49
Page 4
Beneficiaries are not decided upon.  Transfers are to be realized through supporting of
technology centers, business innovation centers and entrepreneurial incubators for selected projects.
Transfers for the measures of active industrial policy in selected sectors of manufacturing - 111 000
000 kn
The purpose of said transfers is export promotion through joining funds with business banks
and HBOR (Croatian Bank for Reconstruction and Development) with the objective of forming
revolving funds for granting loans to exporters under conditions determined by the Berne UnionAgreement and OECD Consensus.
Transport Services
The Ministry of Maritime Affairs, Transport and Communications granted subsidies in the
areas of rail, maritime, river and air transport.
(a) Subsidies to Croatian Railways (current and capital transfers)
The policy objective of current transfers which amounted to 1.568.000.000 kuna in 1998 and
was decreased to 1.299.200.000 kuna in 1999, is to assure the functioning of Croatian Railways,
which is currently providing services under the conditions of a decreased volume of traffic as a resultof direct and indirect war damages. This is done through financial support for the restructuring of theCroatian Railways, repayment of credits, transfers for the salaries, maintenance of existing railroadinfrastructure, subsidizing of passenger transportation and support to developing of the combinedtransport network. The legal basis for this support is the Law on Croatian Railways (Official Gazette
No. 53/94) and the Law Amending the Law on Cr oatian Railways (Official Gazette No. 162/98).
Capital transfers which amounted to 96,0 million kuna in 1998 and 87,1 million kuna in 1999,
are allocated for the reconstruction and rebuilding of the railroad network and destroyed and damaged
in the war, modernization of the railway infrastructure in order to re-establish the pre-war traffic andensure the integrity, safety and enhance the efficiency of the railway transport network in Croatia. Thelegal basis for this support is the Law on Croatian Railways (Official Gazette No. 53/94) and the LawAmending the Law on Croatian Railways (Official Gazette No. 162/98) and the Laws on ratification
of the agreement on loans extended by the IBRD and EBRD to Croatia for the projects ofreconstruction, restructuring and modernization of railways.WT/ACC/HRV/49
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(b) Maritime transport services
In order to ensure the maintenance of ferry-lines between the mainland and the islands,
subsidies amounted to 175.488.500 kuna in 1998 and 179.526.00 kuna in 1999 have been granted tothe following carriers: Jadrolinija, Rijeka; Mediteranska plovidba, Kor čula; Lošinjska plovidba, Mali
Lošinj and Rapska plovidba, Rab. Measures applied include:
- bridging of the difference between the real total costs of transport and the revenues realized in the
course of maintaining obligatory ferry lines between the coast and the islands by the nationalcarrier Jadrolinija.
-  bridging of the difference between the real total costs of transport and the revenues realized in the
course of maintaining individual ferry lines between the coast and the islands by the other threecarriers.
The policy objective is to ensure regular transport between the coast and islands under
reasonable prices due to the facts that such lines are highly unprofitable, in order to secure the regular
supply of the islands and as a mean of helping the economic and demographic development of the
islands. Those subsidies are legally based on the Law on Jadrolinija (Official Gazette, No. 11/96) andthe Law on public transportation in the linear coastal maritime transport (Official Gazette No.131/97).
Other transfers include support to ports and port authorities such as Port of Rijeka, Port of
Trogir and Port authorities of Plo če and Dubrovnik. In 1998 22.781.400 kuna were transferred to the
Port of Rijeka and 7.403,700 kunas to the port Authority of Plo če. In 1999, 36 442 600 kunas is
envisaged for the Port of Rijeka, 7.0 million for the Port of Trogir, 1.5 million kuna for the Port
authority of Dubrovnik and 12 643 000kunas for the Port authority of Plo če. The legal authority for
these subsidies is the Law on Sea Ports (Official Gazette No. 108/95). The policy objective is to assistthe ports of Rijeka and Plo če to proceed with the restructuring process in the part related to the
repayment of credits for the social program for the layoffs of the surplus of previous employed workforce, one-time transfer to the Port authority of Dubrovnik in order to consolidate the deterioratedfinancial situation resulted from the decreased of traffic due to the consequences of the war in Croatiaand the current situation in the Kosovo region. In the case of the Port of Trogir budgetary transfershave been provided in order to reconstruct the basic coastal port infrastructure. Additional 36,369 000kunas in 1998 and 44 076 000 kuna in 1999 have been granted to the Port of Rijeka, Split, Zadar,
Šibenik, Plo če and Dubrovnik on the Basis of the Law on Sea Ports for reconstruction of the
infrastructure in the ports out of which 15.0 million kuna for the construction of a ferry terminalWT/ACC/HRV/49
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Resnik in the area of Split in 1999. The objective is to create and improve infrastructure preconditions
for supplying of port services and ferry transportation.  On the basis of the same Law 12.000.000kunas have been granted to the Lošinjska plovidba carrier for the establishment and functioning of aregular feeder service line Rijeka-Plo če-Gioia Tauro-Malta.
In 1998 and 1999, 81 270 000 kuna and 78,0 million kuna has been granted to the national
line carrier Jadrolinija for the reconstruction program (1996 through year 2000) of its outdated fleet inthe coastal cabotage passenger transportation for the purchase of 5 new and 17 used vessels. The mainobjective is to ensure the satisfactory level of quality and safety of transport for this carrier that isobliged by Law to provide transportation on a number of non-profitable and loss-making lines.
(c) Inland waterways (river) transport services
Based on the Law on Safety of Navigation on Sea and Inland Waters (Official Gazette
No.55/90) and the Danube Convention in 1998 5.5 million kuna have been granted to the DunavskiLloyd Company, Sisak for covering the costs of the stay of ships and crew in foreign ports during the
period when navigation on the Danube and Sava river was stopped because of the situation in the
region. Additional 5.0 million kunas was transferred to the Dunavski Lloyd in 1999, based on thesame Law, for the reconstruction of its fleet in order to re-establish the river navigation (cabotage) inCroatia between river ports.
In 1998 based on the Law on Reconstruction (Official Gazette No. 24/96), 3.8 million kuna
were granted to the ports of Vukovar and Slavonski Brod for the reconstruction of the terminal forloading of oil which were destroyed in the war. Apart from the aim to re-establish the work of thetanks for oil, the main objective is related to th e prevention of damage to the environment in the
surrounding area.
Based on the Law on reconstruction mentioned above, the Law on inland waters navigation
(Official Gazette No. 19/98) and the Law on inland waters Ports (Official Gazette No. 142/98) 40.8
million kuna in 1998 and 46.150.000 kuna is transferred to the river ports of Vukovar, Sisak, Osijekand Slavonski Brod as a financial support for the reconstruction and rebuilding of port infrastructuredamaged during the war as a precondition for re-establishing cabotage navigation between Croatianriver ports.
(d) Air transport services
Based on the Law on Airports (Official Gazette 19/98) 11.0 million kuna were transferred in
both 1998 and 1999 to the airports of Dubrovnik, Zadar, Rijeka, Lošinj, Pula, Osijek and Bra č as aWT/ACC/HRV/49
Page 7
subsidy for maintenance of airport infrastructure due  to the loss of their revenues resulting from the
decrease of traffic in the post-war period. Additionally, 8.0 million in 1998 and 7.0 in 1999 wastransferred to the airports of Zadar, Split and Rijeka on the basis of the Law on Reconstruction and theLaw on Airports. Measures including financing of the rebuilding of the airport Zadar highly damaged
during the war, reconstruction of infrastructure in Split and Rijeka and modernizing fire defense
equipment in the airport of Split.
(e) Financing road infrastructure in Croatia
Based on the Law on Public roads (Official Gazette No. 100/96), 438.625.000 kunas in 1998
and 517.000.000 kunas in 1999 was transferred to the public company Croatian Roads and to localadministrative units for the maintenance of highways, State roads and local roads. Based on the sameLaw, the State Budget and foreign loans, 1.571.640 000 kuna in 1998 and 2.540.232.000 kunas in1999 was reserved or transferred as direct investment for financing of construction of new roads andreconstruction of existing ones.
Tourism
The Ministry of Tourism granted subsidies for foreign organized tourist traffic, support for tourism for
hotels and tourist villages and for the promotion of the Croatian tourism on foreign markets.
(a) Foreign organized tourist traffic in Croatia.
As a measure to promote foreign tourist visits to Croatia, The Ministry of Tourism grants
subsidies in 1999 to Croatian or foreign organizers (tour operators, travel and tourist agencies) byfinancing a share of their expenses.
Based on a public international invitation Organizers can apply for a subsidy for package
arrangements for foreign tourists for the following:
- The stay in Croatia includes at least 3 half boards in all accommodation facilities (from hotel to
private lodging) registered for these commercial activities in Croatia in the period between 1January and 11 July (preseason) and between 25 August and 31 December (after-season) andprograms lasting at least 18 weeks without interruption at one destination in any period.
- round tours (with at least 10 person group) for organized visits from non-European destinations to
Croatia by air, bus or ship, under the condition that they stay at least 3 half-board;
- Organized group transportation by specially chartered buses, airplanes or vessels from the point of
groups departure to the point where the group will use the prescribed services in anWT/ACC/HRV/49
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accommodation facility and the return of the group following the same route (transportation
during the stay at the destination is excluded);
- Organized group transportation on regular air, ship or ferry routs in arrival and departure (at least
10 persons per group).
In case that tourist belonging to the same organized group, in arrival and departure use the
same means of transportation for several nearby destinations the subsidy can be granted for the finaldestination, but only under the condition that there are at least 10 passengers for that destination.
In case that several Organizers are involved using the same transportation vehicle chartered as
a whole, a subsidy request is to be submitted by th e Organizer who receives the charter with the entire
documentation of all Organizers. Exceptionally, a subsidy request can be submitted by individualOrganizers with the written approval of the Organizer who has chartered the transportation vehicle asa whole.
Subsidies are calculated in kunas. The Ministry of Tourism, after deducting banking costs pay
the Organizer the amount of subsidy to an account in the country in which the Organizers is
headquartered in its national currency. The subsidy is paid either by kilometers from starting point todestination for bus transportation, in a fixed amount per passenger for air transport or a percentage byticket for ferry transport or a percentage of the amount paid to the carrier in case of lease vessels.
The legal authority is provided by the Croatian State Budget with the total amount of subsidy
of 43.0 million kuna in 1998 and 46.0 million kuna in 1999.
(b) Financial support for the promotion of the Croatian tourism in foreign markets
30.0 million kunas have been reserved in the State budget for 1999, for promotional activities
of the Croatian Tourist Association in foreign tourist markets including participation on major tourist
fairs, promotional documentation and prospects and other events organized in Croatia or abroadaiming at promoting the potential of the Croatian tourism sector.
(c) Financial support for tourism for hotels and tourist villages
Based on the State Budget, 194.0 million kuna was granted in 1998 and 200 289 138 kuna in
1999 for support to the tourism industry. The objective of this support is the revitalization of tourismfacilities and companies, which recorded losses or total lack of turnover due to the war and slow-postwar recovery of tourist visits. This support by the government is essential due to the fact that theseareas and destination are largely or solely depending on tourism as the majority source of income andWT/ACC/HRV/49
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employment. The subsidies include payments and guarantees to hotel resorts for the preparation of the
season including renovating and reconstructing of fixed facilities and essential equipment, financialsupport for the development of the rural tourism in underdeveloped areas in the inland and on islands.
The Small Business Promotion Program
With the purpose of improving and promoting of crafts, cooperatives of SMEs, the Ministry
of Economy introduced the small business promotion program.
The program is based on promotion, education and realization of private entrepreneurship,
building of institutional framework, active participation of counties and local government, co-financing from state and local authorities' budgets and other sources.
The legal basis are the following Laws:
- Law on State Budget for 1997, Official Gazette No. 111, 1996- Law on the Execution of the State Budget for 1997, Official Gazette No. 111, 1996- Law on State Budget for 1998, Official Gazette No. 141, 1997
- Law on the Execution of the State Budget for 1998, Official Gazette No. 167, 1998
- Law on State Budget for 1999, Official Gazette No. 167, 1998- Law on the Execution of the State Budget for 1999, Official Gazette No., 167, 1998
The program envisages establishing of system and forming of framework for the development
of entrepreneurship:
• Expert aid to entrepreneurs through the Croatian Consultants Network. The Ministry of Economy
and the Croatian Guarantee Agency provided non-repayable support to entrepreneurs for using of
services of the Croatian Consultants Network, which is being allocated on the basis of countytenders.
• entrepreneurial centers which provide information and counseling services to entrepreneurs and
extensive support for starting and developing of business
• entrepreneurial incubator as a form of institutional support which provides business premises,
administrative service, and advice under conditions which are more favorable than the market
conditions during first years of doing businessWT/ACC/HRV/49
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• small business zones as urbanistic and architecturally designed premises with accompanying
infrastructure for the purpose of building of business premises for small entrepreneurs where
entrepreneurs obtain business premises under favorable conditions by joint building, purchase orlease.
• support funds for projects chosen on the basis of adopted county criterions and publicly
announced tenders  with favorable interest rate and other loan repayment terms
• commercialization of innovations which comprises a series of activities aimed at including
innovators into entrepreneurship and market evaluation of innovations
1997
In the course of 1997 the Ministry of Economy transferred 32.1 million kuna as incentive
funds to the counties and local governments for implementing of the Program.
Transferred funds depended on the quality of the county program, expenditures from local
budget, and overall condition of the county. Counties and local governments had set aside 22.2million kuna for the small business promotion, and banks provided additional 107.3 million kuna. Thetotal of 154.7 million kuna was collected and it is expected that through given loans 2,500 new jobs
should be created.
In counties and local governments on the basis of their respective programs, forming of 12
incubators, 28 small business zones and 8 Entrepreneurship centers.
1998
In 1998 all counties and the City of Zagreb have been included in the Small Business
Promotion Program with the growing participation of cities and municipalities.
From the local budgets 95 099 000 kuna has been set aside. The Ministry of Economy granted
to counties, cities and municipalities total the amount of 56 773 000  kuna of which 50 million kunahas been transferred. The banks participated with 310 322 000 kuna in loans with which a total credit
potential of 455 421 000 kuna was created.
1999
In 1999 the Ministry of Economy has 66 million kuna available for small business promotion.
It has been foreseen that counties, cities and municipalities should set aside round 120 million kuna.WT/ACC/HRV/49
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Activities of HBOR (Croatian Bank for Reconstruction and Development)
The Croatian Bank for Reconstruction an d Development (HBOR) is a state owned
development bank founded on the 12th June 1992 by a resolution of the Croatian Parliament.
Together with other activities (programmes for reconstruction of the economy, infrastructure,
agriculture, housing, small and medium enterprises support and other), the HBOR started to act as a
promoter of Croatian exports through export fi nancing and short term insurance in September 1998.
On behalf and for the account of the State, the HBOR insures short-term exports against
commercial and political risks while the export financing is done for HBOR`s own account. Both ofthese activities are performed under conditions determined by the Berne Union Agreement and OECDConsensus
All the decisions regarding insurance business are made by the Interministerial Committee for
Export Insurance. According to the Mandate Agr eement between Ministry of Finance and HBOR a
Guarantee Fund was established in which premiums ar e paid and out of which claims will be paid.
The maximum insurance exposure is defined in the state budget each year.
Performance of the HBOR from September 1998 to March 1999
Export credit insurance
Total exposure: US$ 2.8 million (20.027.369,87 kn)
Number of insurance polices: 36Received applications: 100Approved applications: 62WT/ACC/HRV/49
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Export financing
Total amount of financing: US$15.3 million (108.050.000,00 kn)
Recieved applications: 55Approved applications: 25WT/ACC/HRV/49
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NON-AGRICULTURAL SUBSIDIES IN THE REPUBLIC OF CROATIA IN 1998 AND 1999
1998
AMOUNT (HRK)
Ministry of Finance
CAPITAL TRANSFERS TO FINANCIAL INSTITUTIONS AND
MONETARY INSTITUTIONSCapital transfers to other financial institutions
Funds for granting supports through Croatian
Guarantee Agency7,030,000
7,030,000
3,100,000
3,930,000
Ministry of Economy
OTHER CURRENT TRANSFERS AND SUPPORTS
Other supports and transfers
Support for Croatian Chamber of Crafts
Transfers and supports for restructuring of the economy
CAPITAL TRANSFERS
Other capital transfers
Other not-mentioned capital transfers
Expenditures for promotion and rehabilitation of industry and
shipbuilding
GRANTED GOVERNMENT LOANS AND EQUITY SHARES
Granted domestic loans
Loans granted to non-financial organizations
Loan for the private sector development (IBRD)220,500,000
220,500,000
1,000,000
219,500,000
202,500,000
202,500,000
202,500,000
202,500,000
34,000,000
34,000,000
34,000,000
34,000,000
Ministry of Maritime Affairs, Transport and Communications
OTHER CURRENT TRANSFERS AND SUPPORTS
Other current transfers and supports
Transfers to Hrvatske željeznice (Croatian Railways)Funds for severance pays
Transfers for interests, compensations and loan costs
Transfers for capital repayment
Transfers for salaries and contributions
Rehabilitation of  the unit for washing and disinfecting of wagons and
cisterns  Botovo
Transfers for payment of outstanding debtsTransfers for ferry lines
Transfers for Mediteransku plovidbu, Kor čula
Transfers for Lošinjska plovidba, Mali Lošinj
Transfers for Rapska plovidba, Rab
Transfers for coastal liner maritime transport - Dunavski LloyTransfers for "Jadrolinija", Rijeka
Other supports and transfers
Vukovar port and RTC Slavonski Brod
Support for Luka Rijeka (Port Rijeka) for the payment of  outstanding
debtsSupport for Luka Plo če (Port Plo če) for the payment of outstanding1,783,973,609
1,783,973,6091,568,000,000
53,000,000
107,000,000
246,000,000
1,060,000,000
2,000,000
100,000,000
180,988,500
1,212,500
2,500,000
500,000
5,500,000
171,276,000
34,985,109
3,800,000
22,781,376WT/ACC/HRV/49
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debts
Transfers for river ferries of Sisa čko-moslava čka County
GRANTED GOVERNMENT LOANS AND EQUITY SHARES
Granted domestic loansLoans granted to non-financial organizations
Infrastructure reconstruction project for Croatian Railways (Urgent
loan II - IBRD)
Infrastructure reconstruction project for Luka Plo če (Port Plo če)
(Urgent loan II)7,403,733
1,000,000
141,245,000
141,245,000
141,245,000
98,845,00042,400,000
Ministry of Tourism
OTHER CURRENT TRANSFERS AND SUPPORTS
Other current transfers and supports
Other supports and transfers
Air and bus transport subsidies
Support for tourism for hotels and tourist villages
CURRENT TRANSFERS
Current transfers to citizens, households and non-financial
organizations
Other transfers
Tourism promotion funds237,000,000
237,000,000
237,000,000
43,000,000
194,000,000
30,000,000
30,000,000
30,000,000
30,000,000
Source: Official Gazette of the Republic of Croatia, No. 141, 30 December 1997
              Official Gazette of the Republic of Croatia, No. 90, 1 July 1998WT/ACC/HRV/49
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1999
AMOUNT (HRK)
Ministry of Finance
Costs for Croatian Network of Consultants
Outlays for support funds for housing savings banks
Funds for granting guarantees through Croatian Guarantee Agency
Funds for granting supports through Croatian Guarantee Agency
Croatian Bank for Reconstruction and Development
CAPITAL TRANSFERS TO EXTRABUDGETARY USERS AND TO
FOREIGN COUNTRIES
Capital transfers to citizens and households
Capital transfers for construction and reconstruction of family housesand apartments and for purchase of apartments etc.
Funds for the Fund for long-term financing of housing construction
GRANTED STATE LOANS AND EQUITY SHARE
Granted domestic loansGranted loans to non-financial organizations
Expenditures for reconstruction of water-supply infrastructure (Croatian
Waters - IBRD-I)
Equity share
Share in the equity of public companies and institutions
Croatian Bank for Reconstruction and Development (HBOR) - loans forexport insurance and financing
Croatian Bank for Reconstruction and Development (HBOR) - loans for
small and medium business
Croatian Bank for Reconstruction and Development (HBOR) - loans for
reconstruction of areas damaged during the warCroatian Bank for Reconstruction and Development (HBOR) - loans for
investments in the islands260 000
5 000 000
5 132 860
6 377 500
200 000 000
200 000 000
200 000 000
200 000 000
559 700 000
9 700 0009 700 000
9 700 000
550 000 000
550 000 000
250 000 000
100 000 000100 000 000100 000 000
Ministry of Economy
OTHER CURRENT TRANSFERS AND SUPPORTS
Current transfers of funds and supports for enterprises
Other supports and transfers of funds for enterprises
Transfers for restructuring of the industry
Transfers for disassembly of plants according to the Decisions of the
Government of the Republic of Croatia on the termination of work
OTHER CAPITAL TRANSFERS TO EXTRABUDGETARY USERS
Support for Croatian Chamber of Crafts
Transfers to Counties  for promoting small business
Transfers for promoting development and introduction
of new technologies165 282 540
165 282 540
165 282 540
145 282 540
20 000 000
239 000 000
2 000 000
66 000 000
60 000 000WT/ACC/HRV/49
Page 16
Transfers for measures of active industry policy in selected sectors of
manufacturing
TRANSFER OF FUNDS TO NON-PROFIT ORGANIZATIONS
Storage charges, warehouse maintenance, stocks quality control111 000 000
18 000 000
18 000 000
Ministry of Maritime Affairs, Transport and Communications
OTHER CURRENT TRANSFERS AND SUPPORTS
Other current transfers and supports
Transfers of funds to Hrvatske željeznice (Croatian Railways)
Transfers for ferry lines
Transfers for "Jadrolinija", Rijeka
Transfers for Lošinjska plovidba, Mali Lošinj
Transfers for Rapska plovidba, Rab
Transfers for Mediteransku plovidbu, Kor čula
Transfers for  promotion of transit through ports
Other supports and transfers of funds to enterprises
Support for the payment of debts of Port Rijeka
Support for Port Authority Plo če for the payment of debts
Transfers for Port Authority Dubrovnik for covering of losses
Support for Port Trogir rehabilitationCurrent transfers to airports
Support for digital satellite TV, radi o program for European Countries
CAPITAL TRANSFERS TO EXTRABUDGETARY USERS AND TO
FOREIGN COUNTRIES
Capital transfers to enterprises
Capital transfers for construction or purchase of business premises or
other buildings
Covering of costs for construction and modernization of railwaysfacilities
Capital transfers for purchase of equipment
The Republic of Croatia share in the loan for infrastructure renewal of
Croatian Railways (IBRD)
Capital transfers for purchase of means of transport
The Republic of Croatia share in the loan for the modernization of
Croatian Railways granted by World Bank
The Republic of Croatia share in the loan for the modernization of
Croatian Railways granted by European Bank
Other capital transfers to extrabudgetary users
Croatian Railways infrastructure reconstruction project (Urgent loan II -
IBRD)
The Republic of Croatia share in the loan for the Port of Plo če granted
by World BankRenewal of ports (Sisak, Vukovar, Slavonski Brod, Osijek)1 563 411 630
1 563 411 630
1 299 200 000
191 526 000
175 000 000
2 500 000
500 000
1 526 000
12 000 000
72 685 630
36 442 630
12 643 000
1 500 000
7 000 000
11 000 000
 4 100 000
315 963 459
55 099 96837 792 734
37 792 734
7 307 2347 307 234
10 000 000
7 700 0002 300 000
260 863 491
32 000 00012 500 000
46 150 000WT/ACC/HRV/49
Page 17
Renewal of Danube Lloyd fleet (Dunavski Lloyd)
Reconstruction of Zadar Airport - The Republic of Croatia share
Reconstruction of Split Airport - The Republic of Croatia share in the
renewal of the area for aircraft maintenance and purchase of fire engine
Reconstruction of Rijeka Airport - The Republic of Croatia sharePurchase and installation of additional DSC System
Rehabilitation and reconstruction of understructure and superstructure of
the Port of Rijeka
Construction and maintenance of understructure and superstructure of
the Port of Split
Construction of a marine passenger terminal in Resnik
Renewal of Jadrolinija passenger fleetCapital transfers to Flight control department
Loan for the air traffic control (EBRD)
Support for the reconstruction and adjustment of Port of Plo če
GRANTED GOVERNMENT LOANS AND EQUITY SHARESGranted domestic loansLoans granted to non-financial organizations
Loan for modernization  of Croatian Railways  (IBRD)
Infrastructure reconstruction project for Luka Plo če (Port Plo če) (Urgent
loan II)
European bank loan for modernization of Croatian Railways5 000 000
3 000 000
                     3 000 000
1 000 000
550 000
14 576 000
6 000 000
9 000 000
78 000 00035 715 000
12 372 491
2 000 000
153 291 239153 291 239153 291 239
55 039 500
58 251 739
40 000 000
Ministry of Tourism
OTHER CURRENT TRANSFERS AND SUPPORTS
Current transfers of funds and supports to enterprises
Other supports and transfers
Supports for tourism for hotels and tourist settlement
Transfers and supports for program of development of tourism in rural
areas (continent and islands)Support for loans repayment
SUBSIDIES
Other subsidies
Subsidies for bus and air transport
OTHER CURRENT TRANSFERS AND SUPPORTS
Current transfers to non-financial organizations
Other transfers of funds to non-financial organizations
Tourism promotion funds200 289 138
200 289 138
200 289 138
180 109 138
5 180 000
15 000 000
46 000 000
46 000 000
46 000 000
32 000 000
32 000 000
32 000 000
32 000 000
Source:
Law on State Budget for 1999, Official Gazette No. 167, 1998
Law on the Execution of the State Budget for 1999, Official Gazette No., 167, 1998WT/ACC/HRV/49
Page 18
FINANCIAL AND PERFORMANCE GUARANTEES
1998  ISSUED FINANCIAL G UARANTEES     4,041,402,248 HRK
Sources:
Official Gazette of the Republic of Croatia, No. 66, 6 May 1998
Official Gazette of the Republic of Croatia, No. 107, 11 August 1998
Official Gazette of the Republic of Croatia, No. 144, 4 November1998
1998   ISSUED PERFORMANCE  GUARANTEES    3,098,878,677 HRK
Sources:
Official Gazette of the Republic of Croatia, No. 66, 6 May 1998Official Gazette of the Republic of Croatia, No. 107, 11 August 1998Official Gazette of the Republic of Croatia, No.144, 4 November1998
The exchange rate on the 15 April 1999 was 1 US$= 7 HRKWT/ACC/HRV/49
Page 19Review of Budgetary Funds Allocated to Companies in Process of Rehabilitation from the Ministry of Economy Position in 1998
Textile Manufacturing
Funds allocated from the budget No
Rehabilitation subjects Contribution for
layoffs of previous
employeesContribution to
outstanding debts
repaymentsContribution for
non-paid salariesTotal Payment from
the Budget 1997 and
1998Payment 1998State guarantees
1 PAZINKA d.d.Pazin 3,969,425.93 3,969,425.93 0.00
2 DALMATINKA d.d.Sinj 12,400,600.00 2,515,116 .00 7,770,230.83 22,685,946.83 3,181,224.00
3 DIOKOM d.d. Split 23,088,621.00 2,000,000.00 25,088,621.00 0.00 18,000,000.00
4 VELEBIT d.d.Karlovac 1,898,593.00 1,898,593.00 0.00
5 REGENERACIJA Zabok 3,500,000.00 3,500,000.00 1,750,000.00
6 POUNJE, Kostajnica 300,000.00 300,000.00 0.00
7P A M U ČNA
INDUSTRIJA, Duga Resa11,203,969.00 741,192.60 2,009,609.00 13, 954,770.60 6,320,000.00 20,000,000.00
8 KONTEX, Karlovac 3,740,797.00 3,740,797.00 1,000,000.00
9 VARTEKS, Varaždin 9,000,000.00 13,471,782.00 22,471,782.00 0.00 122,600,000.00
10 SUVENIR, Sira č 12,137.73 1,299,566.28 1,311,704.01 0.00 2,500,000.00
11 NADA, Hrastovac 0.00 0.00
12 TIZ, Zadar 14,556,400.00 14,556,400.00 0.00
13 TVORNICA MREŽA,
Biograd na Moru2,075,009.00 2,075,009.00 0.00
14 RASTOVAC, Tisno 1,533,051.65 1,533,051.65 0.00
15 TRIMOT, Imotski 8,240,000.00 7,661,513.00 15,901,513.00 2,343,156.10
16 TRIKOP, Blato 1,667,857.00 1,667,857.00 0.00
TOTAL: 86,337,603.66 27,576,948.25 20,740,9 19.11 134,655,471.02 14,594,380.10 163,100,000.00WT/ACC/HRV/49
Page 20Review of Budgetary Funds Allocated to Companies in Process of Rehabilitation from the Ministry of Economy Position in 1998
Shipbuilding
Funds allocated from the budget No
Rehabilitation subjects Contribution for
layoffs of previous
employeesContribution to
outstanding debts
repaymentContribution for
non-paid salariesTotal Payment from the
Budget 1997 and 1998Payment 1998State guarantees
1 ULJANIK d.d.Pula 52,019,356.93 5,132,000.00 57,151,356.93 0.00 *
2 BRODOSPLIT d.d. Split 34,673,152.77 76,042,081.51 110,715,234.28 26,710,081.51 *
3 BRODOTROGIR
d.d..Trogir14,346,776.20 14,346,776.20 0.00 *
4 B.I. 3. MAJ Rijeka 24,312,331.11 24,312,331.11 1,350,000.00 *
5 Brodogradilište
Kraljevica d.d.3,926,824.43 3,926,824.43 0.00 *
6  REMONTNO BR.
Šibenik5,048,413.00 428,172.00 5,476,585.00 0.00
7 BRODO - REMONT,
Kali5,105,000.00 5,105,000.00 1,500,000.00
TOTAL: 139,431,854.44 81,602,253.51 0. 00 221,034,107.95 ** 29.560.081,51 0.00
*  total granted state guarantees for five shipyards is 816.285.857.10 USD (5.714.001.000.00 kn) for the construction of shipya rds in the
   period of next 4-5 years (1 USD=7.00 kn)
** The amount of 180.000.000.000 kn should be added to the funds paid out for rehabilitation of shipyards for the payment of co ntributions
    to the Pension Fund and Health Insurance Fund for Shipyards.
    Uljanik d.d. Pula Brodosplit d.d. Split Brodotrogir d.d. Tr ogir. B.I.3. Maj d.d. Rijeka Remontno brodogradilsisc SibenkiWT/ACC/HRV/49
Page 21Review of Budgetary Funds Allocated to Companies in Process of Rehabilitation from the Ministry of Economy Position in 1998
Word Processing
Funds allocated from the budget No
Rehabilitation subjects Contribution for
layoffs of previous
employeesContribution to
outstanding debts
repaymentContribution for
non-paid salariesTotal Payment from the
Budget 1007 and 1998Payment 1998State guarantees
1 FINEL, PETRINJA 2,252,068.36 2,000,000.00 4,252,068.36 0.00
2 DIP PILANA, Ogulin 1,584,000.00 1,584,000.00 0.00
3 DIP STOLARIJA,
Ogulin1,080,000.00 1,080,000.00 0.00
4 RADIN, Ravna Gora 1,260,000.00 1,260,000.00 0.00 7,000,000.00
5 TVORNICA PAPIRA,
Rijeka5,010,674.00 22,335,540.71 27,346, 214.71 17,752,614.00 35,000,000.00
6 DI VRBOVSKO,
Vrbovsko0.00 0.00 13,700,000.00
7 INO, Oto č 0.00 0.00 8,585,040.00
8 IK GAJ, Slatina 7,715,860.00 7,715,860.00 0.00
9 PAPUK DRVNA
INDUSTRIJA, Pakrac1,575,928.00 1,575,928.00 1,575,928.00
10 DI SPA ČVA, Vinkovci 6,655,000.00 770,000.00 7,425,000.00 728,679.00 20,000,000.00
11 DES, Split 1,191,197.00 1,191,197.00 235,371.00
TOTAL: 22,122,856.36 5,780,674.00 25,526,737. 71 53,430,268.07 20,292,592.00 84,285,040.00WT/ACC/HRV/49
Page 22Review of Budgetary Funds Allocated to Companies in Process of Rehabilitation from the Ministry of Economy Position in 1998
Chemicals
Funds allocated from the budget No
Rehabilitation subjects Contribution for
layoffs of previous
employeesContribution to
outstanding debts
repaymentContribution for
non-paid salariesTotal Payment from the
Budget 1007 and 1998Payment 1998State guarantees
1F O L I J A P L A S T ,  Z a d a r 0.00 0.00 157,500,000.00
2 POLIPLAST, Šibenik 4,187,184.39 2,000,000.00 6,187,184.39 955,000.00 6,040,000.00
3 CETINKA, Trilj 2,540,538.46 610,180.00 3,150,718.46 1,000,000.00 8,894,000.00
4 INAVINIL, Kaštel
Sućurac15,457,881.00 3,470,000.00 18,927,881.00 7,692,035.00
5A D R I A C H E M ,  K a š t e l
Sućurac3,040,689.50 3,040,689.50 0.00
6 DALMACIJABILJE
Dubrovnik4,000,000.00 4,000,000.00 0.00
TOTAL: 25,039,108.96 7,657,184.39 2,610,180 .00 35,306,473.35 9,647,035.00 172,434,000.00WT/ACC/HRV/49
Page 23Review of Budgetary Funds Allocated to Companies in Process of Rehabilitation from the Ministry of Economy Position in 1998
Manufacturing of Leather and Footwear
Funds allocated from the budget No
Rehabilitation subjects Contribution for
layoffs of previous
employeesContribution to
outstanding debts
repaymentContribution for
non-paid salariesTotal Payment from
the Budget 1007 and
1998Payment 1998State guarantees
1 INKOP, Poznanovec 0.00 0.00 58,800,000.00
2 BUDU ĆNOST, Ludbreg 2,100,000.00 359,008.00 2,459,008.00 199,443.92
3 ZADAR TVORNICA KOŽE,Zadar 0.00 0.00
4O S J EČKA TVORNICA KOŽE, Osijek 800,000.00 800,000.00 800,000.00
TOTAL: 2,100,000.00 1,159,008.00 0.00 3,259,008.00 999,443.92 58,800,000.00WT/ACC/HRV/49
Page 24Review of Budgetary Funds Allocated to Companies in Process of Rehabilitation from the Ministry of Economy Position in 1998
Ferrous Metallurgy and Metal Processing
Funds allocated from the budget No
Rehabilitation subjects Contribution for
layoffs of
previous
employeesContribution to
outstanding debts
repaymentContribution for non-
paid salariesTotal Payment from
the Budget 1007 and
1998Payment 1998State guarantees
1 ŽELJEZARA SISAK 12,571,795.00 65,771,982.07 199, 979,311.00 278,323,088.07 34,350,000.00 24,665,181.00
2 VALJAONICA Kumrovec 771,492.00 6,586,009.00 7,357,501.00 3,458,453.00
3 TPK EPO d.d.,Zagreb 627,980.00 1,189,981.00 1,817,961.00 0.00
4 INKOBROD, Kor čula 192,000.00 192,000.00 192,000.00
5 OMIAL d.d., Omiš 1,500,000.00 5,000,000.00 6,500,000.00 6,150,000.00
6 IMOSTROJ d.d., Imotski 8,123,121.09 4,319,204.26 12,442,325.35 7,537,720.25
7 TOF d.d., Drniš 2,000,000.00 2,000,000.00 2,000,000.00
8 ELEKTROOSIJEK PPM
d.o.o., Osijek1,000,000.00 1,000,000.00 1,000,000.00
9 OLT d.d., Osijek 2,000,000.00 2,000,000.00 2,000,000.00
10 MIO Osijek 1,500,000.00 1,500,000.00 0.00
11 BRODO-REMONT, Kali 5,105,000.00 1,500,000.00 6,605,000.00 1,500,000.00
12ĐURO ĐAKOVIĆ,
bešavne boce, Sl.Brod929,480.00 929,480.00 929,480.00
13ĐURO ĐAKOVIĆ,
Tračnička
vozila, Sl.Brod1,000,000.00 1,000,000.00 1,000,000.00
14 DALIT d.d., Daruvar 600,000.00 600,000.00 0.00
15 ITAS Ivanec 1,050,000.00 1,050,000.00 1,050,000.00
16 INAS-TAS d.o.o., Zagreb 1,000,000.00 1,000,000.00 1,000,000.00
17 TOP d.d., Kerestinec 2,600,000.00 2,600,000.00 2,600,000.00
18 IM METAL d.d., Ozalj 3,998,452.00 3,998,452.00 0.00
19 KORDUN, Karlovac 2,068,908.00 3,075,000.00 5,143,908.00 2,000,000.00 2,000,000.00WT/ACC/HRV/49
Page 25No Rehabilitation subjects Contribution for
layoffs of
previous
employeesContribution to
outstanding debts
repaymentContribution for non-
paid salariesTotal Payment from
the Budget 1007 and
1998Payment 1998 State guarantees
20 CROATIA PUMPE,
Karlovac2,700,000.00 1,300,000.00 4,000,000.00 0.00 5,500,000.00
21 ADRIADIESEL, Karlovac 4,000,000.00 3,900,000.00 7,900,000.00 3,000,000.00
22 TVORNICA
TRAKTORA, Bjelovar1,231,600.03 6,729,302.29 7,960,902.32 0.00
23 TORPEDO, Rijeka 25,000,000.00 25,000,000.00 6,250,000.00 265,930,000.00
24 RIKARD BEN ČIĆ Rijeka 5,746,000.00 3,241,778.93 9,642,707.93 18,630,486.86 5,746,000.00
25 RAPID, Virovitica 1,500,000.00 1,500,000.00 1,500,000.00
26 TANG, Nova Gradiška 7,067,000.00 5,561,996.70 12,628,996.70 1,453,996.70
27 BAGAT, Zadar 6,442,712.21 13,268, 989.36 19,711,701.57 0.00 12,960,000.00
28 TLM, Šibenik 16,000,000.00 25,62 8,000.00 41,628,000.00 25,628,000.00
29 DALMACIJA, Dugi Rat 15,092,336.00 11, 000,000.00 26,092,336.00 11,000,000.00
30 OTPAD, Split 0.00 0.00
31 ŽELJEZARA SPLIT,
Kaštel Su ćurac1,800,000.00 15,500,000.00 7,668,293.00 24,968,293.00 3,000,000.00
32 METALPLASTIKA,
Makarska3,409,200.00 3,409,200.00 0.00
33 TPS LABIN- PROGRES
Labin1,500,000.00 1,500,000.00 1,500,000.00
34 PRVOMAJSKA, Raša 2,011,510.06 2,011,510.06 0.00
35 BIG TOYS, Potpi ćan 1,843,335.52 2,218,264.50 1,302,819.42 5,364,419.44 2,218,264.50
TOTAL: 81,196,156.61 198,282,787.50 258,886, 617.26 538,365,561.37 128,063,914.45 311,055,181.00WT/ACC/HRV/49
Page 26Review of Budgetary Funds Allocated to Companies in Process of Rehabilitation from the Ministry of Economy Position in 1998
Food Industry
Funds allocated from the budget No
Rehabilitation subjects Contribution for
layoffs of previous
employeesContribution to
outstanding debts
repaymentContribution for
non-paid salariesTotal Payment from
the Budget 1007 and
1998Payment 1998State guarantees
1 CROMAX Bjelovar 911,482.00 605,660.44 1,517,142.44 0.00
2Z V EČEVO, Požega 3,032,743.00 3,032,743.00 0.00
3 ADRIA, Zadar 4,329,042.00 4,329,042.00 0.00
4 MARDEŠI Ć, Sali 2,488,573.00 1,000,000.00 3,488,573.00 2,488,573.00
5 BELJE, Darda 19,000,000.00 19, 000,000.00 0.00 30,000,000.00
6 VINARIJA ILOK, Ilok 2,540,126.43 2,540,126.43 0.00
7 IMOTA, Imotski 1,735,786.00 870,532.40 2,606,318.40 0.00
8 DALMACIJAVINO,
Split0.00 0.00 3,500,000.00
9 MIRNA, Rovinj 1,887,533.30 1,887,533.30 0.00
TOTAL: 14,385,159.30 23,410,658.83 605,660.44 38,401,478.57 2,488,573.00 33,500,000.00WT/ACC/HRV/49
Page 27Review of Budgetary Funds Allocated to Companies in Process of Rehabilitation from the Ministry of Economy Position in 1998
Production of Glass, Brick and Ceramics
Funds allocated from the budget No
Rehabilitation subjects Contribution for
layoffs of previous
employeesContribution to
outstanding debts
repaymentContribution for
non-paid salariesTotal Payment from
the Budget 1007 and
1998Payment 1998
State guarantees
1 RAZVITAK, Ilok 618,627.74 618,627.74 0.00
2 AGAN KAMEN, Split 1,758,665.97 2,742,655.00 4,501,320.97 2,742,655.00
3P K P ,  P o t p i ćan 1,032,000.00 1,753,165.48 2,785,165.48 45,621.00
4 BORAL, Pula 2,682,000.00 4,736,167.58 7,418,167.58 2,700,000.00
TOTAL: 3,714,000.00 7,113,461.29 4,495,820.48 15,323,281.77 5,488,276.00 0.00WT/ACC/HRV/49
Page 28Review of Budgetary Funds Allocated to Companies in Process of Rehabilitation from the Ministry of Economy Position in 1998
Production of Glass, Brick and Ceramics
Funds allocated from the budget No
.
SectorsContribution for
layoffs of previous
employeesContribution to
outstanding debts
repaymentContribution for
non-paid salariesTotal Payment from
the Budget 1007 and
1998Payment 1998
State guarantees
1 Textile manufacturing 86,337,603.66 27,576,948.25 20,740,919.11 134,655,471.02 14,594,380.10 163,100,000.00
2 Shipbuilding 139,431,854.44 81,602,253.51 0 221,034,107.95 29,560,081.51 0
3 Wood processing 19,010,596.36 5,780,674 25,526, 737.71 50,318,008.07 20,292,592.00 84,285,040
4 Chemicals 25,039,108.96 7,657,184.39 2,610,180.00 35,306,473.35 9,647,035.00 172,434,000.00
5 Leather and footwear
manufacturing 2,100,000.00 1,159,008.00 0 3,259,008.00 999,443.92 58,800,000.00
6 Ferrous metalurgy and
metal processing 81,196,156.61 198,282,787.50 258,886,617.26 538,365,561.37 128,063,914.45 311,055,181
7 Food industry 14,385,159.30 24,281,191.23 605,6 60.44 39,272,010.97 2,488,573.00 33,500,000.00
8 Glass, brick and
ceramics manufacture. 3,714,000.00 7,113,461.29 4,495,820.48 15,323,281.77 5,488,276.00 0
TOTAL: 371,214,479.33 353,453,508.17 312,865,935.00 1,037,533,922.50 211,134,295.98 823,174,221.00
__________