Slovenia WT/TPR/S/98
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III. TRADE POLICIES AND PRACTICES BY MEASURE
(1) MEASURES DIRECTLY AFFECTING IMPORTS
(i) Introduction
1. In face of economic difficulties resulting from the break-up of the former Socialist Federal
Republic of Yugoslavia (SFRY), Slovenia launched a process of gradual trade liberalization aimed at
re-orienting trade flows towards market-oriented economies, and restoring economic incentives fortraders and investors in the country.  Compliance with the requirements of WTO membership and
preparations for accession to the EU provided a strong anchor for these reforms, which resulted in a
major overhaul of the trading regime.  In less than a decade, Slovenia dismantled the complex system
of restrictions and direct trade controls inherited from the SFRY, adapted trade-related legislation in
line with international standards, and moved away from state-trading and other government-runactivities;  at the border, customs procedures have been simplified.  The tariff regime has been
rationalized, and applied MFN tariff rates have been reduced to a simple average of less than 11%,
albeit less rapidly than preferential tariffs.  Quantitative restrictions on imports, which affected
principally agricultural products, have been dismantled, and export taxes removed.  Conditions of
access to the Slovenian market have also been simplified by the complete overhaul of "behind-the-border" legislation in areas such as trade defence, standards, government procurement, competition,
investment, state aid, and intellectual property rights, as a result of implementation of WTO
obligations and EU accession requirements.
2. Under the EU accession process, Slovenia is  preparing itself for the adoption of the EU
Common External Tariff (CET).  To this aim, Slovenia adopted a policy to reduce MFN tariff rates to
CET levels by the date of accession, which would entail further tariff cuts in agriculture, textiles and
clothing, and metals.  These sectors, and a few others, continue to be sheltered from internationalcompetition by a combination of high tariffs, state subsidies, and in some cases residual quotas
(textiles), thereby retarding their adaptation to a very competitive European market.  The reduction of
preferential margins would also be a welcome deve lopment for third countries, as the gap between
MFN and preferential tariffs have increased in recent years.  The operation of multiple free-trade
agreements, involving frequent renegotiation of numerous product- and country-specific preferences(mostly in agriculture) contained in the agreements, has led to a complex (micro-) management of
tariff preferences.  Further simplification of the tariff regime in agriculture would be desirable for
both traders and domestic producers. Slovenia's legal framework has been largely adapted to the
requirements of a modern market-oriented economy; effective enforcement is important to ensure a
fair and open environment for all businesses regardless of origin. The strengthening of newly createdregulatory institutions in the areas of government procurement and state aid would be useful.  The
further opening up of investment restrictions and privatization processes would contribute to the
restructuring of sectors that are currently sheltered from international competition.
(ii) Customs regime
(a) Valuation, clearance, and inspection
3. Slovenia's legislation on customs valuation was amended in 1996 to conform with Article VII
of the GATT, incorporate decisions of the WTO Customs Valuation Committee, and harmonize it
with EU standards. Slovenia does  not require preshipment inspection.
4. Based on the provisions of the Customs Act of 1999, the customs value of imported goods is
determined on the basis of the agreed transaction valu e, i.e. the price actually paid or payable for the
goods sold for importation (specified in the invoice) , adding all costs and expenses related to the saleWT/TPR/S/98 Trade Policy Review
Page 32
and purchase of the goods before entering the Slovenian customs.1  When the customs value of the
imported goods cannot be determined as described, Article 18 of the Customs Act provides for the
following alternative methods:  (i) the use of the transaction value of identical or similar goods;
(ii) the deductive method (i.e. the resale price less such costs as customs duties, taxes, and
commissions);  or (iii) the computed value, utilizing costs of production, profit, and other expenses.2
The decisions of the WTO Committee on Customs Valuation on the treatment of interest charges and
on valuation of computer software were implemented by Slovenia on 1 January 1996.3
5. According to the European Commission, as a result of the successive revisions of the
Customs Act (the latest was adopted in 1999), Slovenia's customs legislation has become largely
compatible with that of the European Union, including on customs valuation.4  A  s i n g l e
administrative document, for the purposes of customs clearance, has been in use in Slovenia since1992.  According to the authorities, the estima ted time for customs clearance of an average
consignment was up to two hours in 2001.
6. In recent years, Slovenia has increased efforts to strengthen administrative and operative
capacity in the field of customs administration, in order to facilitate trade and transit operations.  Data
submission for the purpose of customs clearance has been digitalized;  declarations regarding import,export, and transit can be made electronically.  While Slovenia uses its own computerized system for
transit supervision – based on the principles of the European Common Transit Convention – it is
preparing for future participation in the EU's New Computerised Transit System (NCTS) Project,
which is aimed at reducing fraud in the common transit regime.  In order to speed up customs
procedures, Slovenia has also introduced "simplified customs procedures", access to which is reserved
to authorized traders only.  The administrative capacity of Customs has been increased, in particular
through the appointment of new staff and the reorgani zation of the relevant institutions.  For example,
the Intelligence Service of the Directorate General of Customs has obtained additional resources,
special equipment to fight smuggling and trafficking, and new computer equipment.  In addition, the
Customs Service increased computer control in most of the major routes crossing the territory of
Slovenia.
5
7. Slovenia’s Customs Act provides for the right of appeal against customs decisions.
According to Article 6 (e) of the Customs Act, decisions made by Customs authorities can be
appealed to the Administrative Court.  The next stage – administrative dispute settlement – is
submitted to the Supreme Court.6
                                                     
1 These include costs related to transport, insuran ce, packaging, agents’ commissions, loading and re-
loading;  proportionate shares of the value of raw materials, semi-manufactures and parts purchased abroad;
proportionate shares of the value of other goods, models, tools, master copies, etc., supplied to the buyer free of
charge or at reduced prices;  compensation and costs related to rights deriving from the use of patents,
prototypes, trade marks, etc.;  shares in the resale, transfer or use of imported goods payable to the seller;  andproportionate shares of the value of services performed abroad which were paid separately by the buyer andwhich were necessary for production;  and exclude all ex penses, taxes, and duties levied in the customs territory
of Slovenia (GATT document L/7492, 1 July 1994).
2 WTO document G/VAL/N/1/SVN/2, 24 July 2000.
3 WTO document G/VAL/N/ 3/SVN/1, 16 December 1997.
4 European Commission (1997), Customs section.
5 European Commission (2000).
6 GATT document L/7492, 1 July 1994.Slovenia WT/TPR/S/98
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(b) Rules of origin
8. Slovenia's non-preferential and preferential rules of origin reflect those applied by the EU and
several other EU candidates.7  Non-preferential rules of origin assign the origin to the country where
the product has been wholly obtained or where it underwent its "last substantial, economically
justified processing".  According to the Customs Ac t, preferential rules of origin may apply in the
context of Slovenia's preferential trade agreements, or for goods that could be subject to unilateraltariff preferences.  In the latter case, preferential rules of origin are subject to two sets of definition.
First, originating products are those wholly obtained in that country (mainly agricultural, fishing, and
mining products).  Second, the origin of products may be defined in terms of the location of the last
major transformation of the product ("sufficiently processed in that country", according to the Decree
on the Implementation of the Customs Act).
9. Since 1 January 1997, Slovenia has been applying new rules of origin in all free-trade
agreements to which it is a signatory, as part of the new European-wide system of diagonal
cumulation. The establishment of the new system required the harmonization of the rules of origin
among 30 participating countries, including Slovenia. The implementation of this new origin network
has two major consequences.  Firstly, semi-finished products originating in any country of the system
and further processed or assembled in any other partner country are considered as originating
products.  Secondly, originating products can be trad ed between any of the c ountries involved in the
system.  As a result of the new system of cu mulation of origin, customs procedures have been
simplified.  Once a product has been given origin of a country in this European-wide system, there is
no need for the origin to be determined again.
(iii) Tariffs and other charges affecting imports
10. Slovenia has undertaken significant consolidation of its MFN tariffs in recent years, as a
result of WTO membership and preparations for EU accession.  Upon accession to the WTO,
Slovenia replaced variable levies and import quotas in agriculture by bound duties, eliminated import
surcharges on several products, and incorporated a number of charges (including a 1% formality tax)
in its Tariff Schedule.
8  In preparation for EU accession, applied MFN rates are being reduced, albeit
less rapidly than tariff reductions on preferential trade.  Slovenia's stated objective is to harmonize itsMFN duties with the EU CET by the date of accession, which should entail further reduction of
applied rates in agriculture, textiles and clothing, and metals.  However, the difference between
Slovenia's bound and applied MFN rates remains relatively large, as a result of initially high levels of
bindings and faster reductions in applied rates.  Th is gap leaves room for increases in applied rates, as
seems to have been the case in 1998 for some agricultural products (Chapter IV(1)).  The potential forincreased tariff protection is not in accord with the predictability and stability of trading conditions in
Slovenia.  In addition, the operation of numerous free-trade agreements results in the complex micro-
management of several hundreds of country-specific and product-specific tariff quotas pertaining to
agricultural products, contained in 14 different lists, many of which carry mixed duties.  Given that
preferences may be renegotiated, traders in this sector may be subject to complex and changing accessconditions.
                                                     
7 Slovenia's rules of origin are contained in the 1999 Amendments to the Customs Act (Articles 4, 11a
to 14b) and in Chapter 3 of the 1999 Decree on the Implementation of the Customs Act (Articles 30 to 34 andAnnexes 4,5,6 and 7), as notified in WTO document G/RO/N/29/Rev.1, 21 November 2000.
8 The 1% formality tax for customs clearance, inherited from the former SFRY, was incorporated into
Slovenia's Schedule upon accession.WT/TPR/S/98 Trade Policy Review
Page 34
(a) MFN tariffs (applied and bound)
11. The large majority of Slovenia's 10,300 tariff lines at the eight-digit level, contained in the
2001 MFN applied tariff, are ad valorem  (96 % of the total).  However, there are some 400 lines
subject to compound tariffs (i.e. a combination of ad valorem  and specific tariffs), all of which are in
agriculture (WTO definition).  The share of tariff lines carrying compound rates is somewhat larger in
the bound tariff schedule for 2001 (615 lines, i.e., around 5% of the total).  Some 94 lines carry tariffquotas, all in agriculture, for which out-of-quota rates are also expressed in specific terms.  Slovenia
adopted a strategy of gradual tariff reduction, which resulted in relatively limited reduction of the
simple average tariff in the first half of the 1990s, but much faster progress since the start of EU
accession negotiations.  In 2001, Slovenia's simple (unweighted) average MFN tariff was 10.8%
(Table III.1).  The minimum ad valorem  rate is 0% and the maximum 45%.  However, when
including the ad valorem  equivalent of non- ad valorem  rates, the maximum tariff reaches 293.1%.
The number of tariff rates has been reduced, and two thirds of tariff lines are in the 0-10% range.
About 10% of tariff lines are duty free, and 27% have rates between zero and 5% (Chart III.1).
Table III.1
Key features of the Slovenian MFN tariff structure, 2001
(Per cent unless specified otherwise)
Applied Bound
Simple average tariffa10.8 23.8
Standard deviation 9.1 11.3
Duty-free lines 10.5 3.1
Maximum tariff 293.1 406.4
Domestic tariff "spikes" (number of lines subject to three
times the overall tariff average)197 31
Share of ad valorem  rates 96.1 94.9
Share of bound rates 100
By sector:
By HS: Agriculture (HS 01-24) 15.3 25.4
Industry (HS 25-97) 9.5 23.3
WTO Agricultureb16.0 25.5
WTO Non-agriculturec9.5 23.3
By ISIC: Agriculture (ISIC 1) 8.2 21.1
Mining and quarrying (ISIC 2) 1.7 23.9
Industry (ISIC 3) 11.1 23.9
Industry excluding food processing (ISIC 3-31) 9.7 23.4
a Calculations of the average tariff include all lines, including those carrying mixed ( ad valorem  and specific) duties.  The
ad valorem  equivalent of the specific component of such mixed duties have been provided by the Government of Slovenia.
b WTO definition of agriculture: HS Chapters 01-24 less fish and fishery products (HS 0301-0307, 0509, 051191, 1504, 1603-
1605 and 230120) plus some selected products (HS 290543, 290544, 290545, 3301, 3501-3505, 380910, 382311-382319,
382360, 382370, 382460, 4101-4103, 4301, 5001-5003, 5105-5103, 5201-5203, 5301 and 5302).
c Excluding petroleum.
Source : WTO Secretariat calculations, based on data provided by the Slovenian authorities.
12. There is a relatively large gap between bound and applied MFN rates.  This is a consequence
of, on the one hand, the binding of a large number of lines at the uniform rate of 27% (with peaks well
beyond 100% for lines subject to tariff quotas), and, on the other hand, the relatively rapid reduction
of applied rates.  In 2001, the margin was 13 percentage points, with an average bound rate of 23.8%
and an average applied rate of 10.8%.  The difference is 13.8 percentage points for non-agriculturalproducts, and 9.5 percentage points for agricultural products (WTO definitions).Slovenia WT/TPR/S/98
Page 35
13. In 1999, the authorities adopted a plan aimed at aligning Slovenia's applied MFN tariffs on
the EU Common External Tariff.  The authorities expect that the process will be completed by the
date of accession.  This implies further MFN tariff reductions from present levels.9 This would limit
the disadvantages for third countries, as the gap between MFN and preferential tariffs has increased in
recent years.  It would also lead economic sectors that are still protected by higher tariffs than their
competitors in the EU to adjust to th e lower protection afforded by the CET.10  Upon accession,
Slovenia has committed to adopt the EU's bound rates.
14. The simple average MFN tariffs applied on industrial goods (HS 25-97) was 9.5% in 2001.
The minimum rate was 0% and the maximum 27%.  Local manufacturing production currently subject
to restructuring is generally protected by higher-than-average duties.  This is particularly true for
articles of apparel and clothing accessories (17% at the HS 2-digit level), vehicles other than railway
equipment (15%), and furniture (16%).  At the more disaggregated level, products such as certainelectrical and non-electrical machinery are subject to the maximum rate of 27%.  More details on
individual products are presented in Tables AIII.1 to AIII.3, and Chart IV.2.
                                                     
9 The EU average MFN applied tariff was estimated at 6.9% in 2000, some 4 percentage points below
that of Slovenia. WTO (2001).
10 In its 2001 Regular Report on Slovenia's Progress Towards Accession, the European Commission
writes (p.82) that: "Upon accession Slovenia will be required to align its tariffs with those of the EC.
[According to the EC] Slovenia's applied tariffs current ly average 9% on all products, 13.7% on agricultural
products, 5.9% on fishery products, and 8.1% on industrial products.  By comparison the EC's tariffs currentlystand at 6.3% on all products, 16.2% on agricultural products, 12.4% on fishery products, and 3.6% on industrialproducts".(0.4) (0.1)(10.5)(16.5)(34.0)
(20.8)
(11.0)
(2.1)(3.1)
(0.3) (0.5) (0.7)
05001,0001,5002,0002,5003,0003,5004,000
Duty
free0 -  5 5 - 10 10 - 15 15 - 20 20 - 25 25 - 30 30 - 35 35 - 40 40 - 45 45 - 50 >500.010.020.030.040.050.060.070.080.090.0100.0
Data in parentheses is the share of total lines.
WTO Secretariat estimates, based on data provided b y the Slovenian authorities.Chart III.1
Applied MFN tariff distribution, 2001
Number of tariff lines
Note:
Source :Per cent
Number of lines (% of total)
Cumulative per centWT/TPR/S/98 Trade Policy Review
Page 36
15. Agricultural goods are protected on average by higher applied tariffs (Table III.1).  Taking
into account the ad valorem  equivalent of the specific component of compound duties, the simple
average MFN tariff for agricultural products (HS 01-24) in 2001 was 15.3%.11
16. Under an HS two-digit classification, the tariff profile shows peaks (i.e. tariff averages above
15%) in several product categories, including: meat and edible meat offal (19.4%); dairy produce
(23.1%);  products of the milling industry (16.6%); preparation of meat (22.8%); sugar and sugarconfectionery (24.6%);  cocoa and cocoa preparations (20.4%);  preparation of cereals and flour
(26.8%);  preparation of vegetable, fruit and nuts (20.5%);  and beverages, spirits and vinegar (28.3%)
(Table AIII.1).  At the four-digit level, the highest tariff rates are levied on products such as wheat,
fruit and vegetables, beef, dairy products, and certain beverages.
17. Tariff escalation is relatively significant (Table III.2).  Slovenia continues to apply a system
with lower rates on raw materials than on intermediate products or processed goods, thereby
providing higher levels of effective protection to the manufacturing sector than that reflected by the
nominal rates.  Escalation appears to exist in nearly all industries (Chart III.2), with the highest levels
affecting the food, beverages, and tobacco industries.  The 2001 average MFN rate for processed
goods is about two-and-half times that for raw materials.  By function, the Slovenian tariff systemshows a similar pattern.
Table III.2
MFN tariffs (simple average) by stage of processing, 2001
(Per cent)
Applied Bound
All products 10.8 23.8
By stage of processing
Raw materials 5.6 20.9
Intermediate goods 8.3 24.6
Processed goods 13.1 24.0
By function
Consumer goods 16.3 26.2
Intermediate goods 8.1 23.1
Capital goods 9.1 20.6
Source: WTO Secretariat calculations, based on data provided by the Slovenian authorities.
                                                     
11 Based on ISIC classification, the simple averag e MFN tariff applied to the agricultural sector
(ISIC 1) is lower than that applied to the industrial sect or (ISIC 3).  This reflects the relatively higher tariff
protection for processed agricultural goods.Slovenia WT/TPR/S/98
Page 37
(b) Tariff preferences
18. Slovenia has concluded a number of preferential trade agreements with its largest trading
partners, in particular the EU, countries linked to the EU by preferential-trade agreements (EFTA and
CEFTA countries, Baltic States, Israel, Turkey), Croatia, and the former Yugoslav Republic of
Macedonia.  According to the authorities, preferential trade accounted for around 82% of total trade in2001.  Another indication of the increased importance of preferential trade is the difference between
the collection rate (i.e. customs duty revenue divided by imports) and the average MFN rate.  The
collection rate was 1.7% in 2000, and customs duty revenues represented 2.4% of total general
government revenues.
12
19. Tariff preferences cover mainly industrial products.  Customs duties on most imports were
removed upon entry into force of the preferential agreements;  Slovenia’s current trade with its largest
trading partners is conducted under almost duty-free terms.  For example, in 2000 the average tariff
on industrial imports from the European Union was 0.5% (80% of all tariff lines were duty free).
Average tariffs on industrial imports from CE FTA and EFTA countries were also below 1%.
20. Agricultural trade is subject to a more gradual liberalization;  both the pace and depth of
liberalization depends on each agreement, although efforts have been made to harmonize tariff
schedules across agreements, in particular by applying relatively similar rates on the majority of tarifflines.  However, for sensitive products, a list of tariff quotas with limited access has been negotiated
with each trading partner, resu lting in a wide variety of product-specific and country-specific
preferences in Slovenia's import regime.  The number of lines subject to tariff quotas varies widely,
                                                     
12 Ministry of Finance.05101520Chart III.2
Tariff escalation by 2-digit ISIC industry, 2001
Per cent
Source: WTO Secretariat calculations, based on data provided b y the Slovenian authorities.
Unprocessed
Semi-processed
Fully processedWT/TPR/S/98 Trade Policy Review
Page 38
from eight tariff lines under the EFTA Agreement (2000), to 253 lines in the Europe Agreement (with
the European Union), and a maximum of 512 tariff lines in the free-trade agreement with the Former
Yugoslav Republic of Macedonia.  The products subject to restrictions also vary by country. For
example, tariff quotas affecting EU products apply mainly to live animals and cereals, while in the
free-trade agreement with Hungary they apply to wine, yellow corn, malt, and sugar beet.  Access
under these bilateral agreements is renegotiated on a regular basis through additional protocols.  Thisvariety of restrictions, combined with the form of tariffication used (widespread use of specific
tariffs), does not aid simplicity, stability or transparency in Slovenia's tariff regime.
(c) Tariff quotas and seasonal tariffs
21. Tariff quotas are managed by Slovenia under two different regimes: (i) tariff quotas resulting
from the WTO Agreement on Agriculture and applied on an MFN basis;  and (ii) preferential tariffquotas agreed under preferential trade agreements.
13  Quantities and rates for products subject to tariff
quotas are determined annually in specific decrees.  In 2001, MFN tariff-quotas covered 94 distinct
tariff lines concerning agricultural and processed agricultural goods. For the large majority of lines
(80%), out-of-quota rates carry mixed duties (with an ad valorem  and a specific component).  Most
tariff quotas apply to meat, meat products (beef and pork) and live animals, although tariff-quotas also
concern dairy products (cheese), cereals, sugar, and swine.  As indicated  above, Slovenia has
introduced a large number of preferential tariff quotas as a result of preferential trade agreements. In
most cases (agreements with Bulgaria, the Czech Republic, Hungary, the European Union, Lithuania,
Poland, and the Slovak Republic) preferential tariff quotas cover a larger number of tariff lines than
MFN tariff quotas.  The preferential margin (i.e., the difference between the MFN rate and the lowest
possible preferential rate) is largest for live animals and meat products.
22. Slovenia applies a system of seasonal tariffs on 12 tariff lines, covering fruit and vegetables
(Table AIII.4).14  During the marketing period of the year, the applied MFN tariff takes on the higher
values in the tariff range, while the lower values apply during the period when local production is not
being marketed.
(d) Tariffs concessions and exemptions
23. The Customs Act, which was last modified in 1999 and deals with incurrence and payment of
customs debt, defines several schemes under which concessional entry or relief from customs debt can
be provided.  Duty-free treatment applies to goods not directly linked to an economic activity
("customs procedures without economic impact", according to the terms of the Act), such as
diplomatic consignments and other imports enjoying privileges and immunities under international
conventions, personal luggages or items send by post.  Full or partial relief may also be granted forgoods "directly linked to economic activity".  Under an inward processing scheme, exporters may
apply either for a suspension (relief) or a drawback (refund) of duties on imported goods or inputs that
are processed in Slovenia (Article 90 of the Customs Act).  An outward processing scheme allows full
or partial relief from duty on the imported product containing Slovenian goods temporarily exported
for processing.  The other categories of suspensive arrangements include partial or full relief on(i) goods earmarked for re-export, (ii) goods in transit, (iii) goods kept in customs warehouses,
                                                     
13 The licensing of products regarding WTO obligatio ns  is governed by the Decree on Determining
Tariff Quotas, which is updated every year.
14 Products subject to seasonal tariffs are:  tomatoes, onions, cabbage lettuce, celery, cucumbers, peas,
beans, courgettes, apricots, sour cherries, cherries, and plums.Slovenia WT/TPR/S/98
Page 39
(iv) goods processed under customs supervision, and (v) goods destined for re-export within a period
of two years in an unaltered state (temporary importation).15
24. Investors may also take advantage of the 1998 Economic Zones Act and Articles 127 to 140c
of the 1999 Customs Act regarding the economic or free-trade zones.  Designated free-trade zones are
considered as separate customs territories, where goods can be imported without restriction and duty-
free, and used for production or stored for an unlimited period of time.  Equipment used for
production in these zones, such as machines and equipment, instruments and tools are also exempt
from customs duty, as long as they remain in the designated zone.16  The provision relating to imports
of equipment into the economic zones was abolished on 1 January 2002.  Importers of equipment can
claim a deduction of the VAT, paid upon importation of the equipment.
25. The list of products subject to tariff reduction or exemption is updated annually in a specific
decree (the Decree on the Autonomous Measures of Reduction or Abolition of Duty Rates for
Specific Goods), which is enacted as part of the annual Law on Customs Tariff.  These exemptions or
reductions are applied on an MFN basis. For 2001, 1,621 tariff lines at the eight-digit level (i.e.,
15.7% of the total number of tariff lines) were subject to reduction or exemptions, covering 77 out of
a total of 97 HS chapters (Table AIII.5).
(e) Other charges and indirect taxation
26. Most imports are subject to an ad valorem  VAT, which is applied uniformly on foreign and
domestically produced goods.17  The VAT replaced the sales tax system in 1999, and is based on the
principles of the VAT legislation of the EU.  On 1 January 2002, VAT rates were increased from 19%
to 20% for most goods and services, and the reduced rate from 8% to 8.5% applying to a more limited
list of "essential" supplies.18  Exported goods and services are zero-rated.  The threshold for taxation
is in the order of € 25,000 for all taxable persons, except for farmers for which a lower taxablethreshold applies (€ 7,500).  Very small firms are exempted from VAT;  certain categories of products
and services are also exempted.
19  This includes activities of public interest (broadcast, cultural,
educational, medical and social security services, as well as political, religious, philosophical
activities, and trade unions), and other specified services (insurance and financial services, real estate
and gaming).  On the basis of a decision by the Constitutional Court all postal services are taxed.Products exempted from import duties are generally also exempted from VAT.  These include
personal goods and luggage, goods in transit, and goods protected by diplomatic conventions;
imports exempted under the Economic Zones Act;  and imports exempted under customs procedures
with economic impact (goods kept in warehouses or processed under customs supervision, goods
earmarked for re-exports, etc.).  Non-resident buyers are entitled to VAT refunds on goods valued at
                                                     
15 Temporary importation procedures are defined in Sub-section 5 of the Customs Act. Article 108
provides a list of products benefiting from total relief, including, inter alia , goods for display or use at fairs and
exhibitions;  medical, surgical, and laboratory equipment;  goods of any kind to be subjected to tests,experiments, or demonstrations not constituting a gainful activity;  and works of art imported for the purpose of
exhibition.
16 This provision does not apply to office furniture, office equipment and other administrative facilities,
and motor vehicles that are not intended for exclusive use in the FTZ.
17 The Customs Administration is responsible for the collection of the VAT on imports. VAT on
imported goods is payable within 30 days.
18 The reduced rate applies to: foodstuffs;  agricultural inputs;  water;  pharmaceutical products;
accessories for the disabled;  public transport;  books;  newspapers and periodicals;   services of authors;
composers, and cultural events;  sporting events and facilities;  housing;  hotel and similar accommodation;funerals;  and waste treatment.
19 Exemption is defined as no VAT being charged, but VAT paid on goods and services used in the
production of the goods and services concerned cannot be reclaimed.WT/TPR/S/98 Trade Policy Review
Page 40
more than SIT 15,000 (about € 75).20  Refunds are also available to foreign taxable persons not
established within Slovenia (only in respect of certain goods).
27. Certain items (either imported or domestically produced) are subject to excise taxes, namely
alcoholic beverages, mineral oils and gas, and tobacco products.  Excises duties were introduced in
1999, based on EU Directives on the harmonization of excise duties in the Single Market.  The rates
of excise duties for these products are expressed in specific terms (in euro), under the conditionsdescribed in Table III.3.  The Excise Duties Act provides for increases in excise duties levied on
cigarettes to 51% of the retail selling price in July 2002, and to 57% in January 2004.  Exemptions
from customs duties and VAT may be granted for certain categories of products,
21 including goods
imported by diplomatic missions and international organizations, goods stored in customs
warehouses, goods in transit, as well as goods used in scientific research, production of medicines, airtransport, and the production of energy.
22  Exemptions apply equally to foreign and domestically
produced goods.
Table III.3
Excise duties by product, January 2002
Products Excise duties
Alcohol and alcoholic beverage Per hectolitre (euro)
Still wine 0.0
Sparkling wine 0.0
Beer (for 1% volume of alcohol) 7.4
Fermented beverages 0.0
Intermediate products 67.7
Ethyl alcohol 751.5
Per 1,000 litres unless specified (euro) Mineral oils and gas
currently maximum
(permissible under law)
Leaded petrol 406.0a643.2a
Unleaded petrol 406.0 541.6
Gas oil used as/for:
propellant
heating purpose286.4
  33.9473.9
50.8
Liquid petroleum gas and methane used as/for:
propellant
commercial/heating145.3b
    0.0b257.3b
    0.0b
Kerosene used as/for:
propellant
heating282.5
  22.6473.9
  33.9
Heavy fuel oil 13.5b33.9b
Natural gas 6.8c10.2c
Tobacco products Percentage of retail selling price
Cigarettes 49d
Cigars-cigarillos (per 1,000) 5
Fine and cut tobacco 30
Other smoking tobacco 20
a From 1 July 2001 not for sale.
b Per 1,000 kg.
c Per 1,000 m3.
d To be increased gradually up to 57%.
Source: WTO Secretariat, based on information provided by the authorities.
                                                     
20 Refunds cannot be obtained on mineral oils , tobacco products or alcoholic beverages.
21 There are no special provisions for the treatment of excisable goods in economic (free-trade) zones.
22 There can be exemptions for the excisable goods in transit, but certain guarantees need to be given to
the Customs Administration that goods will not be sold in the Slovenian territory.Slovenia WT/TPR/S/98
Page 41
(iv) Import licensing, controls, and prohibitions
(a) Trade prohibitions
28. Slovenia maintains few trade prohibitions;  those in place are based on sanitary and
phytosanitary considerations, and to implement UN resolutions.  Slovenia recently harmonized its
legislation on plant protection against harmful organisms with applicable EU regulations.  Pursuant to
the new Plant Health Act of June 2001, imports of a number of plants, plant products and relatedarticles have been banned.
23  According to Slovenian veterinary rules, imports, transit, and storage of
consignments of animals, foodstuffs, raw materials, waste, feedingstuffs, and other animal items can
be subject to restrictions, after veterinary inspection, if they present a danger for human health. On
that basis, imports of certain meat products from EU countries affected by BSE have been subject to
temporary bans in the recent past;  all BSE-related bans are now terminated.
29. Based on U.N. Security Council Resolutions, Slovenia currently maintains embargoes on
Afganistan (air embargo, financial sanctions, trade embargo on military equipment of any kind, and
trade embargo on chemical acetic anhydride), Angola (air embargo, oil embargo, trade embargo on
diamonds, and financial restrictions towards UNITA) and Iraq (trade embargo, air embargo, financial
embargo, and adjustment of Iraqi oil trade).
(b) Import licensing, with and without quantity limits
30. Slovenia's licensing system has been significantly liberalized in the past decade. Prior to
WTO accession, Slovenia maintained a number of import quotas, which, in the period of transition to
a market economy, were regarded by the authorities as "an instrument for managing and preserving
the use of economic factors through less painful restructuring".24  Most quotas concerned agricultural
goods (335 tariff lines), and textiles and clothing  products.  During WTO accession negotiations, all
import quotas for agricultural goods were abolished and converted into variable levies, andsubsequently to bound tariffs, upon entry into the WTO;  some of these tariff lines are now subject to
tariff quotas (section (iii)(c) above).  Hence, since WTO accession, the only remaining quantitative
restrictions are those on textiles and clothing products, which are being phased-out in accordance with
the programme of integration presented by Slovenia under the WTO Agreement on Textiles and
Clothing.
25  The list of products subject to import (and export) licensing is presented in Table AIII.6.
31. Slovenia's legal framework regarding import licensing is based on Article 8 of the Foreign
Trade Act, and a number of supporting decrees, such as the Decree Determining Import and Export
Regimes for Specified Goods, the Decree on the Manner, Time Periods and Conditions for the
Allocation of Import Quotas, and the annual Decree Determining Tariff Quotas and other special laws
and regulations that govern certain areas such as arms and medicines.  According to Slovenianlegislation, three categories of products are subject to import licensing:
− products affecting public security, order, health, environment and the cultural
heritage;
− textiles and clothing products that are subject to quantitative restrictions;  and
                                                     
23 Import bans apply to certain plants (such as chestnut trees, oak trees, citrus plants, quince, apple and
pear trees, rose, and strawberry), tubers (seed and ware potato), isolated bark (maple and poplar trees fromcertain countries), and soil and pl ants from selected countries.
24 GATT document L/7191, 23 March 1993, p.18.
25 WTO document G/TMB/N/186, 28 June 1996.WT/TPR/S/98 Trade Policy Review
Page 42
− agricultural products that are subject to tariff quotas.
32. The Government of Slovenia indicates that the licensing requirement regarding the first
category of products "is not intended to restrict the quantity or value of import but to protect national
security, health, environment, cultural heritage, prevent money laundering and fulfil international
commitments undertaken by Slovenia".26  Non-automatic licensing requirements (without volume
limits) apply to imports of weapons, ammunition, and explosives;  poisons, drugs, psychotropicsubstances and precursors;  substances affecting the ozone layer;  radioactive chemical elements and
radioactive isotopes, their compounds, and nuclear material and equipment;  special waste and scrap
equipment;  seeds and semen;  special objects of arts;  and gold and coins.  Licences are granted by
the competent Ministry depending on products.
27  The Slovenian authorities are preparing a new and
full notification to the WTO.
33. Slovenia maintains quantitative restrictions on 65 textiles and clothing products at the eight-
digit level (Table AIII.7).  Non-automatic licensing, in this case, is intended to restrict the quantity of
imports (volume limits).  Licences are based on annual quotas determined by the Government at the
beginning of each calendar year, and allocated to importers through the Chamber of Commerce.28
These licences are issued for importation from all sources, except countries that already benefit from
quota-free access under preferential-trade agreements.  According to the authorities, the quotas are not
applied rigidly;  unutilized quotas can be allocated to another restricted line.
34. A third licensing system is used to administer imports of agricultural products that are
currently subject to tariff quotas. In this case, the Ministry of Economy is responsible for issuing
licences for in-quota imports, after consultation with the relevant agencies (Ministry of Agriculture,
Ministry of Finance, and the Chamber of Commerce).  There are two forms of tariff quota subject to
licences:  tariff quotas linked to Slovenia's commitments under the WTO, and tariff quotas negotiatedunder preferential and free-trade agreements.  Licensing regarding the implementation of Slovenia's
Tariff Schedule under the WTO is governed by the annual Decree on Determining Tariff Quotas.
Licences for tariff quotas under bilateral agreements are subject to decrees specific to these
agreements.  Tariff-quota administration for agricultural products was transferred to the Ministry of
Agriculture, Forestry and Food.  Import licences are issued by the Agency for Agriculture Marketsand Rural Development.  The commission for the distribution of quotas was abolished on1 January 2002 and replaced by the first-come-first-served system and by an auction system.
(v) Contingency measures
(a) Anti-dumping and countervailing measures
35. In the context of its accession to the WTO, Slovenia enacted legislation on anti-dumping and
countervailing measures (Part V of the Law on the Protection of Competition, adopted on
                                                     
26 WTO document G/LIC/N/3/SVN/1, 26 June 1997, p.2.  International commitments are to be
understood as commitments related to the respect of international conventions regarding environmentalprotection, the prevention of the manufacture and trafficking of illicit drugs, and public safety.
27 For example, the Ministries of Interior and Defence for imports of explosives, arms and ammunition,
depending on their civil or military use;  the Ministry of Health for drugs, psychotropic substances andprecursors;  the Ministry of Environment and Spatial Planning for wastes and ozone-layer-depleting substances;
the Ministry of Agriculture, Forestry and Food for seeds and propagating material, breeding material, and plant-
protection products;  and the Ministry of Culture for antiques.
28 According to the authorities, the Chamber of Commerce is largely regulating the quota system, in
close cooperation with the Textiles Importers' Association and the industry.  Licences are granted on a first-come-first-served basis or among importers taking into account their past imports.Slovenia WT/TPR/S/98
Page 43
25 March 1993, complemented by the Decree on Dumped and Subsidized Imports of 23 June 1994).
The key procedures related to anti-dumping and countervailing actions are presented in Box III.1.
36. Slovenia is not an active user of its anti-dumping and countervailing measures legislation.
Since it was enacted, Slovenia has initiated only one anti-dumping case (against imports of turkey
meat from Hungary), which was concluded without the imposition of a measure, as the investigation
did not find causal link between dumping and injury (or threat of). As of January 2002, Slovenia had
neither imposed nor initiated any countervailing measures.
(b) Safeguard measures
37. Since the entry into force of the WTO Agreem ent on Safeguards, Slovenia has introduced one
provisional safeguard measure, on imports of meat of swine, fresh, chilled or frozen (HS tariff
heading 0203).  The measure was imposed on 21 November 1998 and terminated two months later(16 January 1999), after the investigation concluded that the domestic industry had not been seriously
injured by the increase in imports.
29
38. The WTO Agreement on Safeguards also provides  for the elimination of pre-existing "grey-
area" measures (Article 11.1(b)) such as voluntary export restraints and orderly marketing
arrangements, according to fixed timetables and with in four years from the entry into force of the
Agreement (i.e., 31 December 1999 at the latest). Slovenia notified a list of export taxes on wood and
wood products to be eliminated.30  It removed export taxes on all but one category of products (wood
in the rough) on 1 January 1997, and eliminated the last measure a year later (section (2)(i)(a)).31
39. In October 2000, Slovenia introduced legislation on safeguards (Decree on Safeguard
Measures) to ensure compliance with the relevant WTO Agreement.32  The Decree states that a
safeguard measure can be imposed if it has been ascertained that a product is imported in such
increased quantities and under such conditions as to  cause or threaten to cause serious injury to the
domestic industry that produces the like or directly competitive products, or serious disturbances in
any sector of the economy.  The Decree applies neither to imports of textiles and clothing products
subject to quantitative restrictions, which fall under the Agreement on Textiles and Clothing,33 nor to
products imported under free-trade agreements.  Howeve r, it covers agricultural imports. It provides
for special treatment of developing countries, by exempting their imports from safeguard measures if
their market share does not reach 3%.34  The key procedures related to safeguard measures are
presented in Box III.2.
                                                     
29 The investigation and the imposition of the provisional measure were notified in WTO document
G/SG/N/6/SVN/1, 26 November 1998, and the termination of the measure was notified in
G/SG/N/7/SVN/1/Suppl.1, 22 January 1999.
30 WTO document G/SG/N/3/SVN, 27 March 1995.
31 WTO document G/SG/N/5/SVN/Suppl.2, 1 April 1998.
32 The legislation was notified in WTO document G/SG/N/1/SVN/2, 10 January 2001.
33 Article 6 of the WTO Agreement on Textiles and Clothing allows transitional safeguards to be
introduced for products not yet integrated into the disciplines of the Agreement in the event of increased
imports, provided that such increase causes or threaten s to cause serious damage to domestic producers.  No
such safeguard has been used by Slovenia since the entry into force of the Agreement.
34 This exemption does not apply if developing countries with individual import shares smaller than
3%, collectively account for more than 9% of the imports.WT/TPR/S/98 Trade Policy Review
Page 44
Box III.1:    Key procedures related to anti-dumping and countervailing measures
According to the Slovenian legislation, an  anti-dumping duty  may be imposed when products are imported
at dumped prices and when such imports are causing injury to the domestic industry.  A dumped product isconsidered to be a product with an export price less than the "normal" value of the like product in the
exporting country;  the normal value is based on a comparable price paid or payable for the like product in
the exporting country or "the value determined in acco rdance with the international treaties to which the
Republic of Slovenia is a signatory" (Article 15 of the Law on the Protection of Competition).
The Competition Protection Office (the Office) is in charge of initiating and conducting investigations.  Itmay start an investigation on the basis of a written complaint by one or several companies.  The complaintshould contain evidence of: the existence of dumping, injury (or threat of injury), and the causal linkbetween dumped imports and the actual injury or threat of injury.  In reaching its decision on thecommencement of a procedure, the Office takes in to account the opinion delivered by the Advisory
Committee composed of representatives of government ministries (Economy, Finance, Agriculture and
Forestry, and Foreign Affairs) and of the Chamber of Commerce.  The case is published in the Official
Gazette .  An investigation is normally concluded within one year of initiation (1½ years in special
circumstances) and the decision is published in the Official Gazette .  Interested parties have the right to be
heard during the period of investigation, and to present to the Office any material evidence that may helpthe investigation.  The duty shall not be higher than the dumping margin found and shall be applied for a
maximum period of five years.  The duty can be less than the dumping margin if such lesser duty would be
adequate to remove the injury.  A provisional duty can be imposed if certain conditions have been met(those contained in Article 7 of the Anti-Dumping Agreement).  Provisional duties may not exceed themargin of dumping and shall not be imposed sooner than 60 days from the date of commencement of theinvestigation.  Provisional duties may remain in force for four months;  they are extendable to six or nine
months in exceptional circumstances.  Before proposing to the Government imposition of provisional or
definitive anti-dumping duties, the Office receives an opinion from the Advisory Committee. Decisions onthe imposition are published in the Official Gazette .
The Competition Protection Office is also the competent authority for countervailing cases.  It may impose
countervailing duties if it has been ascertained that the subsidized imports cause injury or represent a threat
to the domestic industry.  The Office may start an investigation based on a complaint, which must containevidence of the existence of subsidized imports (and of the degree of support), of the injury or threat ofinjury, and of the causal link between subsidized imports and injury.  The same Advisory Committee that
deals with anti-dumping cases delivers an opinion on the initiation of a procedure.  In its investigation, the
Office invites written inputs and may conduct hearings with  all interested parties.  As for anti-dumping, the
Office may seek cooperation from the competent authorities in the subsidizing country.  If a mutuallyagreed solution is not found (for example through th e acceptance of a price undertaking), proceedings are
initiated.  The decision to initiate a proceeding is published in the Official Gazette  and an investigation is to
be concluded within 12 months of initiation (18 months for special cases).  The duty shall not exceed the
subsidy provided and the amount sufficient for eliminating the injury or its threat.  The countervailing duty
may be applied for a maximum of five years. Countervailing duties may be either provisional or definitive.Provisional duties may be imposed if there has been  a preliminary finding that the subsidized imports
caused injury or are a threat to the domestic industry.  The duties may be imposed no sooner than 60 daysfrom the initiation of the investigation and for a period of four months.  They may be extended for a further
two months.  Countervailing import duties, provisional or permanent, are enforced by a government
decision, which is published in the Official Gazette .
While no particular provisions exist in Slovenia's legislation for appeals against decisions on anti-dumping
and countervailing duties, according to the general rules,  there is the possibility for a court review.  The
Office, or any interested parties, may request a review  if the conditions that lead to the investigation
change.  The review may commence after a period of one year from the conclusion of the initialinvestigation.  On the basis of the review, and of an opinion of the Advisory Committee, the Government
may change or abolish the measures in force.
Source:  WTO documents G/ADP/N/1/SVN/1 and G/SCM/N/1/SVN/1, 5 April 1995.Slovenia WT/TPR/S/98
Page 45
Box III.2:  Key procedures related to safeguard measures
A safeguard measure  may be imposed by the Government upon recommendation by the investigating
authority (Ministry of Economy) when a product is being imported into Slovenia in such increasedquantities and under such conditions as to cause or threaten to cause a serious injury to the domestic
industry.  The Ministry may start an investigation based on a complaint  by the domestic industry or on its
behalf by the relevant association, and, in the case of agricultural products, by the Ministry of Agriculture.In its investigation, the Ministry invites written inputs from all interested parties.  The decision to initiatean investigation is published in the Official Gazette . Interested parties have the right to be heard during the
investigation.  The measure may be applied for a period of four years, extendable to eight years in total (ifthe safeguard measure is to exceed three years, the Mi nistry of Economy should review its need no later
than in the middle of the period of application of th e safeguard measure). A provisional duty not exceeding
200 days can be imposed.
Source: WTO document G/SG/N/1/SVN/2, 10 January 2001.
(vi) Standards and technical regulations
40. Aside from fulfilling its obligations under the WTO Agreement on Technical Barriers to
Trade, Slovenia aims to harmonize its legislation and practices with those of the EU in the area of
standards, regulation, and conformity assessment.  In this context, three new laws were introduced in
1999, the Standardization Act, the Act on Accreditation, and the Act on Technical Requirements for
Products and Conformity Assessment, in order to complete the segregation of the accreditation,certification, and standardization functions that were previously performed by a single body, the
Standards and Metrology Institute of Slovenia (SMIS).  These functions are now performed by two
newly created, non-governmental agencies: the Slovenian Accreditation, and the Slovenian Institute
for Standardization (SIST).
35  The SMIS (now called Metrology Institute of the Republic of Slovenia
(MIRS)) retains an important coordinating role among these institutions, and a technical roleconcerning legal metrology and pre-packaging.  The Ministry of Economy keeps overall
responsibility for regulation, international cooperation, and implementation of the TBT Agreement.
36
41. The 1999 Standardization Act and supporting regulations confirmed ongoing efforts to
simplify the standardization processes.  Use of standards is not, in principle, mandatory in Slovenia,
unless it is so stipulated by a particular legal act.  Products for which safety is an issue (food,electrical equipment, construction material, medical devices, etc.) are generally subject to technical
regulations, and therefore can be subject to testing, certification or prior approval procedures.  Spot-
checks to ensure compliance of goods with these requirements are conducted by relevant market
surveillance authorities as stated in the particular act.  Procedures for the development and publication
of standards and the framework for setting mandatory technical requirements in specific sectors are
specified in the Standardization Act.
42. Steady progress is being achieved by Slovenia in harmonizing national standards and
technical regulations with international and EU standards and relevant legal Acts.
37  Slovenia is a full
member of the International Organization for Standardization (ISO), and of the International
Electrotechnical Committee (IEC), and an associate member of the European Committee for
                                                     
35 The Slovenian Accreditation started work in May 2001, and the SIST was established in
September 2001.
36 The Ministry of Economy is also responsible for "horizontal" legislation, such as the Act on the
General Safety of Products.  Preparation and implementation of legal acts regarding specific products is left to
specialized Ministries, such as the Ministry of Transport (vehicles safety), the Ministries of Agriculture andHealth (agricultural and food products), and the Ministry for Information Society (electro-magneticalcompatibility, telecommunication equipment, etc.).
37 European Commission (2000), p. 31.WT/TPR/S/98 Trade Policy Review
Page 46
Standardization (CEN) and the European Electrotechnical Committee for Standardization
(CENELEC).  It is also a full member of the European Telecommunication Standard Institute (ETSI).
By September 2001, Slovenia had adopted some 11,400 standards, of which 2,400 are ISO and IEC
standards, 8,800 are EU standard s (CEN, CENELEC and ETSI), and 200 are foreign standards (DIN,
BS).  There are only 16 purely national standards in force. Slovenia’s standardization organizations
also cooperate on a bilateral basis with several countries' national standardization organizations. InJuly 2000, Slovenia adopted a Decree transposing the EU Directive on the notification procedures for
standards and technical regulations.  The relevant Slovenian law on the notification procedures
concerning the TBT Agreement of the WTO has been in force since 1995.
43. While most products are subject to self-assessment procedures (i.e. performed by producers
or importers), the most dangerous products can only be marketed after conformity assessment isperformed by a third party designated by the competent Ministry.
38  Products subject to mandatory
conformity assessment include, inter alia , construction products, some personnel protective
equipment, medical devices, lifts, pressure equipment, and radio and telecommunications terminal
equipment.  Slovenia may recognize foreign documents or foreign marks as a proof of conformity
assessment, on the basis of reciprocity, and/or if the legislation of the country concerned is based onthe same principles as that of Slovenia.  Slovenia plans to conclude a mutual recognition agreement
(MRA) for the results of conformity  assessment with the European Union, covering in particular the
acceptance of test results and the recognition of certificates.
44. A series of sector-specific legislative acts and decrees have recently been adopted in
alignment with EU legislation, to establish the requirements for products that are subject to hygiene
and health testing procedures.  In early 2000, regulations were issued on the criteria for authorization
of testing organizations in foodstuffs, on additives, on erucidic acid, mineral and spring water, and on
labeling of pre-packed foodstuffs.  Other legislation was adopted to cover restrictions on marketing or
use of certain dangerous substances and preparations, classification, packaging and labeling of
dangerous preparations of chemical products. Regulations have also been adopted concerning
pharmaceutical product and cosmetics (testing, authorization requirements, etc.).  As provided by the
Health Inspectorate Act of November 1999, the Health Inspectorate is responsible for surveillance andenforcement activities in these areas.
45. The main laws governing sanitary and phytosanitary measures are the Plant Product
Protection Act, the Agriculture Act, the Veterinary Service Act, the Act Regulating the Sanitary
Suitability of Foodstuff, and Products and Materials Coming in Contact with Food.  These
regulations, which the Slovenian authorities consider to be in accordance with internationalconventions, are based on the recommendations of the European Plant Organization and the UN/FAO
regional plant protection organization.  These regulations do not discriminate against imported
products. According to Slovenian law, Slovenia's veterinary authorities may impose sanitary and
phytosanitary measures in the form of import bans.
39  Import bans apply to plants and plant products
on which listed quarantine pests occur (insects, bacteria, viruses, and parasitic plants).  Certain goodsmust fulfil special quarantine requirements to be allowed entry.  Phytosanitary certificates are
                                                     
38 In cases where mandatory certification is required, national certificates of conformity are delivered
by testing and certification bodies designated by the Ministry of Economy or the competent ministries.However, under simplified procedures producers may issu e a simple declaration of conformity if the products
are believed to be in conformity with existing standards or technical regulations.  In such cases, the producer
must show evidence of such conformity.
39 Slovenia imposed import bans on cattle and certain products originating from cattle, in relation to
bovine spongiform encephalopathy (BSE), as well as on other live animals to provide protection against thetransmission of foot-and-mouth disease.  These measures have been notified in WTO documentsG/SPS/N/SVN/2, 3, 11 and 12.Slovenia WT/TPR/S/98
Page 47
required for the importation of certain plant products, fruits, vegetables and seeds (section (1)(iv)(a)).
A veterinary certificate is required for the importation of certain animals, foodstuffs, and raw
materials of animal origin.
(vii) Government procurement
46. Potential benefits from open procurement in Slovenia would be considerable in terms of
efficiency, competition, rational use of public finances, and deficit reduction.  Total procurement ofworks, supplies, and services were roug hly estimated in 2001 at about 12% of GDP.
47. Changes have been introduced recently to Sl ovenia’s government procurement legislative
framework in order to align domestic provisions with EU Directives and the WTO Government
Procurement Agreement (GPA), to which Slovenia is an observer.
40  The Review of Public
Procurement Procedures Act was adopted in 1999, and the Public Procurement Act was revised in2000.  The former introduces a system of remedies and increases protection for bidders throughout the
tendering procedure, as required by both the GPA and the EU Directives.  The Act also provides for
the establishment of an independent review body, the National Review Commission (NRC);  its
members are appointed by Parliament to guarantee their independence.
48. The Public Procurement Act of April 2000, revising the 1997 Act, regulates public
procurement of supply, works, and services, including in the utility sector covering water,
telecommunications, energy, and transport. It applies to the central government, local governments,
public undertakings, and utilities.  One of its main features is the unification of all procedural
requirements into one single Act and the creation of a central administrative authority in charge of its
implementation (the Public Procurement Office).
41  The Office's tasks also include participation in the
preparation of rules and procedures in the field of public procurement, the provision of regular
analysis of the procurement situation, cooperation with foreign institutions, and notification to theNational Review Commission of infringement by contractors in implementing the public procurement
rules.  The revised Act also provides for increased transparency through enhanced publication
requirements, and emphasizes the principles of fair competition (Article 5) and equality among all
tenderers (Article 7), whether domestic or foreign.
42  In this context, the 10% preference for domestic
bidders that prevailed in previous legislation has been eliminated.
49. According to the new Act, public procurement contracts are awarded through public and open
tenders (involving an unlimited number of parties).  However, the Act (Article 17) also provides for
restricted procedures and negotiated procedures for procurement, depending on the situation.
Intended tenders have to be published in the Official Gazette , and, above certain thresholds, also in the
Bulletin of the European Communities  (Article 30 and 83 of the Act).  Normally, bids complying with
the conditions specified in the invitation for bids are judged on the basis of lowest price, or the most
"economically advantageous" bid (Article 51).43  Unsuccessful bidders must be informed of the
                                                     
40 Slovenia has started accession procedures for membership in the GPA.
41 The Public Procurement Office was put in place in the spring of 2001.
42 Publication requirements include the publication of the terms of tenders, the evaluation criteria for
the invitation of tenders and for the selection of bids, and the outcome of the procedure.
43 The criteria defining the most economically adva ntageous bid include the completion date, running
costs, cost-effectiveness, quality, aesthetic and functio nal characteristics, technical merit, after-sales services
and technical assistance, guarantee period, commitments regarding spare parts, post-guarantee maintenance, and
price.WT/TPR/S/98 Trade Policy Review
Page 48
reasons for their exclusion.  Appeals against the cont racting authority's decision may be brought to the
National Review Commission.  Cases may also be brought before the courts.44
50. While it has been noted that the revised Act is a significant step in the process of
harmonization with EU rules, executing regulations are still needed to guide the tender process.45
Other issues have been raised, in particular the requirement, in some cases, to use Slovenian standardsand technical specification in public procurement.
46
(viii) Other measures affecting imports
51. Slovenia has never applied import restrictions for balance-of-payments reasons.  According to
the authorities, the Government does not maintain countertrade arrangements, has no legislation on
local-content or performance requirements affecting manufacturing, and has no state-trading
enterprises within the meaning of the Understa nding on the Interpretation of GATT Article XVII.47
(2) MEASURES DIRECTLY AFFECTING EXPORTS
(i) Export duties, taxes, and restraints (controls/prohibitions, licensing)
(a) Export duties and taxes
52. Slovenia no longer imposes any duties, taxes or other charges on exported goods;  nor does it
maintain any official minimum or reference export prices.  It had notified to the WTO the list of itemson which it levied export taxes, as pre-existing "grey-area" measures covered by Article 11 of the
Agreement on Safeguards (Table AIII.8), along with the timetable for the phase-out of such measures.
Taxes of 10% or 15% were levied on exports of wood and wood products, and of 25% on ferrous,
aluminium and copper waste and scrap.  According to the authorities, the measures were aimed at
addressing shortages in the domestic market.
48  On 1 January 1997, Slovenia abolished the export tax
for all notified products, except for wood in the rough.  For this product, the export tax was reduced
from 10-15% to 4%, and eliminated one year later (1 January 1998).49
                                                     
44 Normally, decisions by the National Review Commission are final. However, the Commission
cannot judge claims for indemnification.  Cases can ther efore be started or re-started in the courts for this
purpose.
45 The authorities consider that the current legislation goes far beyond EU requirements.  Following
complaints by contractors on the complexity and length of tender procedures, the authorities are consideringpossible simplifications, without compromising transparency.
46 European Commission (2000), p.33.
47 WTO document G/STR/N/1/SVN, 29 July 1996.  Ho wever, the Slovenian authorities notified the
activities of the Agency of the Republic of Slovenia for Commodity Reserves.  The main purpose of the Agency
is to provide and maintain stocks of wheat and s ugar, the two commodities it deals with, to support market
stabilization measures.  These measures are implemented through market interventions in cases of shortage,
oversupply or in emergency situations.  However, the authorities made clear that the Agency does not assumestate-trading functions within the meaning of GATT Article XVII (WTO document G/STR/N/6/SVN,26 June 2000).
48 The Slovenian authorities  noted that the "measure is to restrict exports of domestic materials and/or
exhaustible natural resources necessary to ensure essen tial quantities of such materials to a domestic processing
industry during the period of restructuring of that industry when the domestic prices of specified materials arebelow the world prices" (WTO document G/SG/N/3/SVN, 27 March 1995, p.1).
49 WTO document G/SG/N/5/SVN/Suppl.2, 1 April 1998.Slovenia WT/TPR/S/98
Page 49
(b) Export restraints and licensing requirements
53. No export prohibitions, other than the embargos maintained in the context of UN Security
Council Resolutions, are currently in force.
54. A certain number of products are currently subject to export licensing requirements
(Table AIII.6).  Some two thirds of the tariff  lines concerned cover dangerous chemicals and
radioactive substances (contained in HS chapters 27, 28, 29 and 38), as well as other products (rawmaterials, precious metals, auxiliary chemical substances and pharmaceuticals) for which licensing is
aimed at fulfilling Slovenia's obligations under certain international treaties and conventions
(conventions on trade in endangered species, hazardous substances and other environmentally
sensitive products).  Licenses for these products are delivered essentially by the Ministries of Health
and Environment.  A quarter of tariff lines concern weapons and arms, parts and accessories(including explosives, automatic and non-automatic firearms, etc.), for which (non-automatic)
licensing is under the responsibility of the Ministries of Interior and Defence.
55. In 2000, Slovenia adopted a regulatory framework governing the control of exports of dual-
use (military and civilian) goods and technologies, composed of the Exports of Dual-Use Goods Act,
a Decree specifying the list of dual-use goods and an Administrative Order regulating the format andcontent of forms required for the issuance of export authorizations for these goods.
56. According to the authorities, Slovenia does not participate in any arrangements designed to
limit or control its exports to third countries at the request of foreign governments.  The authorities are
not aware of any such arrangements between private Slovenia's firms and foreign countries.
(ii) Export promotion and assistance
57. Slovenia does not provide any specific and direct financial assistance for exports.  The
authorities are of the view that Slovenia's compe titiveness will be best ensured by eliminating any
anti-export bias in Slovenia's trade policy.  This entailed the recent elimination of taxes affecting
Slovenia's exports, and the pursuit of a generally outward-oriented policy regarding imports.
Export subsidies
58. According to the Government, Slovenia does not provide explicit export subsidies, either on
industrial products or on agricultural products.
50
Export finance, insurance and guarantees
59. Export credit insurance is provided by the Slovene Export Corporation (SEC), a financial
institution owned by the Government (91%) and minority shareholders (mostly banks).  Its primary
purpose is to facilitate exports and contribute to the competitiveness of the Slovenian economy.  The
SEC insures export credit and investment agains t non-commercial (mostly political) and commercial
risks.  All Slovenian-based enterprises are eligible, regardless of ownership.  SEC insures export
credits and investment abroad against non-commerci al risks, and medium-term export credits against
commercial risks "on account" of the State.51  In return, the Government guarantees SEC's obligations
                                                     
50 Each year since its accession to the WTO, Slovenia has notified that it provides no export subsidies
on agricultural products (WTO documents G/AG/N/SVN/2, 7, 10, 15 and 17).
51 SEC's operations on behalf of the State are managed and accounted separately from the operations
performed by SEC on its own account.  They include: insurance of export credits and investments as well asmedium-term export credits against non-commercial risks;   insurance of short-term export credits againstWT/TPR/S/98 Trade Policy Review
Page 50
arising from insurance of those risks, and provided  the initial funds for the establishment of SEC's
"precautionary reserves".52  SEC also insures "on its own account" private companies against short-
term commercial risks, both in domestic and international trade.  This insurance is offered on a
commercial basis;  reinsurance is arranged with major reinsurance companies and, thus, exempt from
any state support.
60. SEC is also increasingly active in export finance, essentially by providing refinancing for
banks' export loans.  The value of the transactions refinanced by SEC in 2000 amounted to some 4%
of Slovenia's exports.  SEC benefits from a state guarantee when it borrows in international markets to
finance these activities.53
61. SEC participates in the management of the Interest Rate Equalization Programme, a state-
sponsored interest-rate subsidy programme allowing exporters to benefit from export credits on termsmore favourable than market conditions.  Under the programme, the Government pays the difference
between the cost of funds and the actual interest rate applied when providing officially supported
export credits.  The amount of the state subsidy for this programme is set on an annual basis in the
Budget.  It was in the order of SIT 700 million in 2000 (€ 3.5 million).
Export promotion and marketing assistance62. The Slovene Trade and Investment Promoti on Agency (TIPO), a government agency,
promotes and assists the development of mutual trade and industrial cooperation between Slovenia
and other countries.  TIPO supports Slovenian exporters through various initiatives, including the
organization of trade missions abroad, and promotes foreign investment.  It provides information on
legislation, taxes, and incentives in Slovenia, organi zes fact-finding missions, and provides links with
industry and local authorities.  In 1995 and 1997, TI PO received financial assistance from the EU's
Phare programme to strengthen its trade and investment promotion activities.
63. Slovenia has a specific trade promotion programme for agriculture, aimed at providing
assistance to net exporting activities such as wine, apples, dairy products, and poultry in their search
for new markets (Chapter IV(1)).  Budgetary allocations are granted for participation at trade fairs
abroad, co-financing marketing studies and promotional materials, introducing new varieties of
products targeted for export, and extension and co nsulting services.  According to the Government,
these measures are considered as necessary marketing tools for exports but are not contingent on any
export performance, and therefore cannot be considered as export subsidies.
Customs-free zones
64. Slovenian legislation provides for the establishment of free-trade zones into which goods may
be imported and later exported without payment of customs duties and other taxes. According to theauthorities, there are currently two free-trade zones in Slovenia, at Maribor and the seaport of Koper.
                                                                                                                                                                    
commercial (non-marketable) risks in non-OECD countries;  insurance against exchange rate risks;  and, as an
agent of the State, a contribution to the management of the Interest Rate Equalization Programme (IREP).
52 Precautionary reserves are intended to cover clai ms arising from insurance against non-commercial
and medium-term and short-term (non-marketable) commercial risk performed by SEC on account of the State.The initial funds for these reserves were provided by the State from the privatization proceeds.
53 Slovene Export Corporation (2000).Slovenia WT/TPR/S/98
Page 51
(3) OTHER TRADE -RELATED MEASURES AFFECTING PRODUCTION AND TRADE
(i) State aid
65. While Slovenia has established a functioning market economy, the State continues to provide
subsidies on economic or social grounds.  Subsidies are granted in the form of aid to industrial
restructuring (steel, coal mining, and textiles and clothing industries), direct support to output
(agriculture), or regional aid and other horizontal programmes (employment and training, researchand development aid, etc.).  The direct cost of the state aid system has been declining slowly, from
2.5% of GDP in 1998 to 2.1% in 2000.  Current figures show that the gradual reduction of subsidies
to industry and horizontal programmes is partly offset by the strong increase in subsidies to
agriculture (Table III.4).  In addition to direct costs to the budget, there are indirect costs as a result of
forgone revenues, associated with, for example, du ty and tax exemptions (duty-free zones, the large
number of autonomous MFN exemptions).
66. As part of the requirements for EU accession, Slovenia has established an independent system
for monitoring state aid. The legislative framework, the State Aid Control Act, as well as secondary
regulations, entered into force in 2000.
54  It provides extensive powers to the monitoring entity, the
Commission for State Aid Control, to assess and approve state aid (ex-ante control), as well as tomonitor its use (ex-post control).  Based on notifications made by the institutions granting subsidies,
the Commission prepares an annual review of state aid covering all sectors, including agriculture and
fisheries.  Progress in establishing a state aid in ventory and widening the notification system to all
levels of Government (local, national) are under way.
55  Major sectoral aid programmes, such as those
for the restructuring of the leather, footwear, textiles, apparel, and steel industries have been examined
by the Commission for State Aid Control, and approved under certain conditions.  Up to
September 2001, the Commission had examined 166 notifications of subsidies and approved twothirds (98, of which 57 conditionally).
56  Further work is under way to draw a detailed map of support
to regional development, and ensure that it is consistent with EU legislation.
Table III.4
State aid in Slovenia, 1998-00
(Million SIT, unless otherwise indicated)
Category 1998 1999 2000
Total state aid 82,364 88,923 83,494
Total state aid (in million euro) 442 459 407
Agriculture and fisheries 17,194 26,922 38,333
Horizontal objectives 43,615 43,155 29,505
Research and development 14,374 14,723 4,098
Environment 543 4,048 2,134
Restructuring 12,648 5,782 5,316
Small and medium-sized enterprises 2,632 2,079 2,924
Employment 5,573 13,599 13,258
Training 5,816 1,323 439
Other objectives 2,028 1,601 1,337
Particular sectors 21,106 18,301 14,889
Steel industry 3,434 2,019 784
Transport 13,629 10,985 11,481
Coal mining 3,378 4,830 2,356
Other manufacturing sectors 665 467 268
Regional aid 449 545 768
Source: Government of Slovenia, Third Survey on State Aid .
                                                     
54 Secondary regulations include the Decree on the Purposes and Conditions for the Granting of State
Aid, and the Decree on the Content and Procedure of Supplying Data for State Aid Control.
55 The Commission for State Aid Control receives technical and administrative assistance from the
State Aid Control section in the Ministry of Economy.
56 European Commission (2000), p.42;  and information provided by the Slovenian authorities.WT/TPR/S/98 Trade Policy Review
Page 52
Assistance to agriculture
67. Support to agriculture has recorded the fastest increase in recent years.  Total subsidies to the
sector more than doubled between 1998 and 2000 (Table III.4).57  In preparation  for EU accession,
Slovenia is putting in place the necessary structures and subsidy programmes to implement the EU
Common Agricultural Policy.  In1999, the Government established the Agency for Agricultural
Markets and Rural Development (ARSAMRD), under th e Ministry of Agriculture, Forestry and Food,
to carry out those tasks.  The ARSAMRD has been provided with powers to regulate markets (based
on EU common market organizations, for the main categories of production) through price support,
direct payments to farmers, and set-aside schemes.  To this aim, all domestic support programmes as
well as the EU's SAPARD pre-accession funds to support Slovenian agriculture have been placed
under the responsibility of the ARSAMRD.
68. In the past two years, the Government also adopted market organizations for all major
agricultural products, in a move aimed at aligni ng Slovenia's market regulation system with the
Common Agricultural Policy.  Market organizations have been adopted for cereals, sugar, seeds of
agricultural plants, hops, fresh fruit, vegetables and olive oil, wine grapes, must and wine, beef, sheep
and goat meat, and milk and dairy products (Chapter  IV(1)).  In most cases, the introduction of the
market organizations resulted in the eliminati on of remaining state monopolies (wheat and rye
markets), the liberalization of administrative controls on prices (sugar and sugar beet markets) and the
lowering of support prices.  To offset the impact of lower domestic prices on producers' income, the
Government also introduced direct payments to farmers for all major  crops (area payments per
surface unit, generally hectares) or animal production (support in the veal and beef markets is granted
in the form of premiums for suckler-cows, male bovines, and sheep).  Slovenia notified, for the first
time, to the WTO its "blue box" measures as well as a strong increase in "green box" measures.58
69. In addition, a number of structural support programmes exist for the renovation of agricultural
and food production (rehabilitation of enterprises and cooperatives;  modernization of training and
research centres;  programmes for young farmers;  investment programmes to reach EU veterinary
and ecological standards), environmental and rural development, the development of less-favoured
agricultural areas, and land operations (consolidation, irrigation, and draining for more efficient use ofland).  These programmes involve various forms of support, ranging from direct payments (as for
environmental programmes and aid to the less favoured areas), to subsidized credits, and guarantees
on loans from banks.
(ii) Competition policy
70. The foundation of Slovenia's legal framework for competition is Article 74, paragraph 3 of
the Constitution, which prohibits all practices that restrict competition in a manner contrary to the law.
While a first law regulating competition was enacted in 1993 (the Law on the Protection of
Competition), competition rules were recently amended, in the context of the adoption of the acquis
communautaire .  The new Prevention of the Restriction of Competition Act entered into force on 14
July 1999.  It transposes into domestic legislation EU  anti-trust rules regarding restrictive agreements
(Part II of the Act), abuse of dominant position (Par t III), and rules on concentration (Part IV).  The
Act is supported by secondary legislation, such as the Decree on the Contents and Elements required
                                                     
57 In European Commission (2000), p.27, the Commission reports that "agricultural policy is
characterized by subsidy and price levels well above the EU levels in a number of production branches and isthe most protectionist in the region."
58 WTO document G/AG/N/SVN/18, 14 September 2001.Slovenia WT/TPR/S/98
Page 53
for the Notification Form for the Concentrati on of Undertakings and the Decree on Block
Exemptions, and Instructions on the Methods an d Conditions for Defining the Relevant Market.59
71. The main features of this legislation, which covers both goods and services, are described in
Table III.5.  All legal and natural persons are treated equally under the law, irrespective of their legal
status (private and public companies) or ownership affiliation (domestically and foreign-owned
companies) (Article 2 of the Act).  The Act prohibits in principle all forms of restrictive agreements(Article 5(1)), both horizontal and vertical, with some exceptions, which are authorized under
individual or block exemptions (Article 5(3) and 9).
 60  It also prohibits the abuse of a dominant
position (Article 10). A dominant position is held by a legal or natural person (an undertaking) when
it has no competition or significant competition for a specific product or service in the Slovenian
market.  A 40% market-share threshold is used as a reference to assess market dominance, but othercriteria are also taken into account.
61  The Act also takes into account the case in which two or more
companies enjoy joint dominance of the market (duopoly or oligopoly).  The Act prohibits
concentrations, in particular through mergers, when  they may result in the elimination of effective
competition in the relevant market.  Concentrations must be notified by the companies concerned.
Merger control is exercised on companies with turnover exceeding SIT 8 billion. An alternativethreshold of 40% of the relevant market can be used.  The Competition Protection Office (see below)
publishes guidelines on how market shares are calculated and how relevant markets have been
defined. Restrictive practices covered by the law can be subject to investigation, prohibition, and
fines.  Fines for breaking competition rules are imposed by the courts, and range from SIT 10 to 30
million for concluding an agreement to restrict competition and abusing dominant position in the
market (Article 52 of the Act).
72. The Competition Protection Office  was established by Article 4 of the Act to monitor the
implementation of competition rules in all economic sectors.
62  It was conferred fairly extensive
powers to review the restrictive arrangements and concentrations described in the law, request
information, open and conduct investigations, organize hearings, and impose penalties (Part V of the
Act).63  At the same time, it was granted independence to exercise its tasks;  it does not need to report
to any executive or legislative body.  However, important decisions of the Office, such as decisions tocommence an investigation and final decisions, must be published in the Official Gazette .  Decisions
                                                     
59 The Decree on notification forms defines the content of the notification form that companies are
required to submit to the Competition Protection Office.  The Decree on Block Exemptions defines groups ofrestrictive agreements that are allowed under the law (see below).
60 Article 5(3) of the Act explicitly permits certain restrictive agreements if they "contribute to
improving production or distribution of goods or promoting technical progress, while allowing consumers a fairshare of the resulting benefits".  However, such agreements, decisions or concerted practices cannot eliminatecompetition in the market concerned or impose conditions that are not indispensable for the attainment of these
objectives.  This provision is applied through individual or block exemptions.  The Competition ProtectionOffice can provide exemptions on an individual basis, while fixing the limits and obligations imposed on the
company concerned. Article 9 of the Act allows the Government to define more broadly the categories of
agreements that meet the conditions of Article 5(3), i.e., the agreements that will be exempted from competitionrules.  The Decree on Block Exemptions covers essentially vertical agreements such as franchising, exclusivedistribution, and purchasing, and stipulates the conditions and limits of those block exemptions.
61 In determining whether there is a dominant position, the Competition Protection Office goes well
beyond the market share criteria to determine market control, in particular whether companies benefit from
particular advantages with regard to access to finance or investment.
62 The Office performs other tasks, in particular in procedures relating to dumped and subsidized
imports (Box III.1).
63 The Office only imposes "process penalties", concerning infringements to competition procedures by
non-cooperating undertakings (refusal to provide data or to comply with the Office's recommendations).WT/TPR/S/98 Trade Policy Review
Page 54
of the Office may be reviewed by the Administrative Court, and appeals can be made to the Supreme
Court.64
Table III.5
Main provisions of Slovenia's competition law
Prohibition Examples of prohibition
Agreements distorting
competition
(Article 5 = Article 81/1 of EEC
Treaty)Article 5(1) provides that: "agreements between undertakings regarding business conditions in
the market which have as their object or effect the prevention, restriction or distortion ofcompetition in the Republic of Slovenia shall be prohibited and shall be null and void".  The
prohibition applies in particular to agreements that:
directly or indirectly fix prices or set business terms; limit or control production, investment,technical development or investment;
share markets or sources of supply;
apply dissimilar conditions to equivalent transactions with other trading parties, thereby placingthem at a disadvantage;  and
make the conclusion of contracts subject to acceptance of obligations that by nature have noconnection with the subject of the contract.
Dominant market position
(Article 10=Article 82 of EECTreaty)A competitor/undertaking is deemed to have a dominant position if its share of purchasing or
selling goods or services in Slovenia amounts to at least 40% of the total. Two or moreundertakings are deemed to have a dominant position if no significant competition exist between
them, and if the aggregate share of purchasing or selling goods and services exceed 60% of the
total.
The market share represents an important, but not exclusive, criterion for determining the
dominant position in the market. According to Article 10(2), other factors should be taken into
consideration, such as the degree of competition in the market, the financial situation ofcompetitors, and barriers to entry in the market. Competition rules prohibit the abuse of a
dominant position and confer on a dominant undertaking an obligation to refrain from any
practices that restrict or prevent competition in the market without justifiable reason. The Act
does not define the notion of abuse but enumerates certain abusive practices.
Examples of prohibitions include:
- imposition of unfair terms and conditions (including prices) in contracts
- "unjustifiably increasing or reducing prices" in contracts
- applying dissimilar conditions to equivalent transactions
- making the conclusion of contracts subject to acceptance by the other parties of obligations that
have no connection with the object of the contract
Concentration
(Article 11=EEC Reg. No.4064/89)Article 11 prohibits "concentrations which strengthen the power of one or more undertakings,
individually or jointly, as a result of which effective competition on the relevant market would
be significantly impeded or excluded".
Operations that would be assumed as concentrations are:
- mergers of two or more independent undertakings- acquisitions by one or more persons or undertakings already controlling at least one
undertaking
- concentrative joint ventures
Exceptions include businesses (in particular banks, saving banks, financial institutions or
insurance undertakings) whose activities include dealing in securities holding, or holding on atemporary basis shares that they have acquired in another undertaking with a view to reselling
them, provided they do not exercise the voting rights in order to determine or influence the
competitive behaviour of such undertaking (Article 11 (5)).  In assessing whether theconcentration might lead to a dominant position, the Competition Protection Office should
examine the following criteria: the choice available to suppliers and users; market positions of
the affected undertakings; access to sources of supply and to the market itself; the structure ofmarket shares; the state of competition in the market; barriers to entry in the market; the
financial capabilities of the affected companies or undertakings; the evolution of supply and
demand for the good or service affected by the concentration; the international position of
market participants (Article 13).
Source: WTO Secretariat, based on the Prevention of the Restriction of Competition Act (1999).
                                                     
64 This procedure differs from the previous law, the Protection of Competition Act, under which the
affected company could bring an action under  civil procedures.Slovenia WT/TPR/S/98
Page 55
73. According to the Office's 2000 Annual Report, the Office has handled 20 antitrust cases:  two
concerned restrictive agreements, nine abuse of dominant position (six of which had been initiated
before the year 2000), six were applications for indi vidual exemptions and three were applications for
negative clearance.  In addition, the Office issued 39 decisions on concentrations; no infringements
were found, sometimes due to additional commitments by the parties.  Three decisions were reached
during 2001 (price cartel on investment funds;  merger in the electronic industry;  and individualexemptions on security services).
(iii) Privatization
74. Slovenia implemented a major privatization programme during the 1990s, as part of its
transition into a market-oriented economy.  The main legislation in this area, the 1992 Ownership
Transformation Act, was aimed at achieving a smooth transfer of ownership for socially ownedenterprises, which accounted for the large majority of enterprises inherited from the SFRY (socially
owned enterprises were enterprises held by the State, but run jointly by employees and management).
This process is well advanced;  more than 90% of the shares of these enterprises have been transferred
into private hands.  The share of GDP accounted for by the private sector was 64.2% in 1999.
65
75. The 1992 legislation provided for a decentralized approach to privatization, in which
individual enterprises adopted their own privatization plans under the general conditions set out by the
law.66  The law required in particular that ownership transfers followed a pre-determined formula,
allowing for a large proportion of the companies' shares to be allocated to employees and
management, or to be sold to the public.67 Public participation was encouraged by the 1993 Voucher
Program, which granted to each Slovenian citizen a voucher account that could be used to buy non-
transferable shares of privatized enterprises.68  The vast majority of privatizations therefore occurred
through direct management-employee buyouts, voucher-based purchases, and direct sales to buyers.Other methods, albeit somewhat marginal, included the acquisition of companies' assets through
liquidation, and takeovers by increase in equity.
76. The privatization process achieved one of its main objectives, i.e. the transfer of ownership of
most socially owned companies to the private sector while preserving the social consensus over
privatization.  As in neighbouring countries, the process was inevitably subject to shortcomings andproblems.  The Slovene Development Corporation (the Corporation), created to restructure companies
before offering them to the public, was not always able to sell its shares in enterprises, due to
insufficient interest from buyers.  In this regard, questions were raised regarding the auction methods
of the Corporation, and problems of transparency (even collusion) among privatization investment
funds were reported.
69  As the process developed, the authorities attempted to address each of these
                                                     
65 This is the latest official data provided by the Institute for Macroeconomic Analysis and
Development.
66 These plans were subject to authorization  by Slovenia's Agency for Restructuring and Privatization.
67 10% of the shares were to be transferred to the Compensation Fund, a fund providing compensation
payments to previous owners;  10% to the Pension Fund;  20% to the Slovene Development Corporation, which
would subsequently sell its portfolio to individual privatization investment funds (those funds have mainly beenset up to collect vouchers from the public and buy enterprise shares held by the Development Corporation);20% for internal distribution (including current and former employees in exchange for vouchers);  and 40% toeither insiders (internal buyouts where employees receive  shares at a discount value) or to the public through
commercial sales (public tenders, auctions, and offerings).
68 Ownership certificate accounts were opened for each Slovenian citizen with a nominal value between
SIT 100,000 and 400,000 (approximately US$800 and US$3,100)  The overall nominal value of certificatesissued was SIT 567 billion (some US$ 4.6 billion).
69 A description of the role of the Development Corporation and the investment funds, as well as
shortcomings of the privatization process is available in IMF (1998b).WT/TPR/S/98 Trade Policy Review
Page 56
problems through modifications of the legislation (featuring in particular increased transparency
requirements) and peer pressure on key players (such as the Slovene Development Corporation and
the privatization investment funds).
77. It has also been argued that the privatization methods, which emphasized gradualism and
preservation of social structures inherited from the past, have also resulted in slowing down the pace
of economic restructuring.  Questions have been raised on the role of institutional funds (social andcompensation funds), which hold non-controlling shares in large segments of the economy, and in the
decision-making process of individual enterprises.
70  In addition, the role of the Slovene Development
Corporation, which still manages a large number of companies to be restructured, privatized or
liquidated, has been subject to criticism.71  In both cases, the continued involvement of the State in the
economy, through its control of the funds, may have been associated with the perception of slowrestructuring in certain sectors.  At the same time, the method of privatization has also resulted in a
wide dispersion of ownership among investors (i ncluding state funds, management and employees,
and small investors), which may have impaired shareholder controls and restructuring of the
privatized enterprises.
72
78. Foreign participation in Slovenia's privatization process was limited in the early phase of the
process by various legislative provisions, including pervasive capital controls, a two-year freeze on
share transfers for newly privatized companies, which protected them from hostile takeovers,
investment restrictions in the banking and insurance businesses, and more generally the Stock
Market’s relatively limited role in the privatization process.  Since 1999, these restrictions have been
gradually relaxed, as the relationship between slow  privatization and the fall of FDI inflows became
evident.73
79. In the context of this review the authorities emphasized their desire to complete the "first
phase" of privatization (the divestment in socially owned enterprises) and "fill the privatization gap".
Efforts are currently being made to restructure the Slovene Development Corporation and to liquidate
it once its remaining portfolio of companies has been transferred, sold or liquidated.74 The second
phase of privatization, which entails the sale of state-owned companies, including the largest banks,
utilities (in particular capital-intensive energy utilities), the airport, the Adriatic seaport of Koper, therailways, the telecommunications company, and other major industrial companies is under way.
75
Parts of the national telecommunication company and of a major bank have already been sold.  Theauthorities believe that this second phase presents significant opportunities for foreign investors.
                                                     
70 European Commission (2000), p.24.
71 European Commission (2000), p. 24.  The Commission writes that "the Slovenian Development
Corporation has an increasingly unclear role as it mainta ins a large number of enterprises in its portfolio with
only slow progress in restructuring and divestment.  A new management team was appointed recently and it is
planned to speed up the divestment process in 2000 including by offering assets to foreign investors.”
72 IMF (2001), p.10.
73 European Commission (2000), p.21.  The Commission writes: "the lack of privatization has kept FDI
inflows low in 1999 and early 2000".
74 On 31 December 2000, the portfolio of the Corporation still comprised 93 companies, a third of
which was expected to be sold in the course of 2001.  The bulk of the remaining companies will be transferredto authorized investment funds for the exchange of ow nership certificates.  Since privatizing these companies is
contingent on the fulfilment of certain legal and admi nistrative procedures, companies that would not be ready
for privatization by the end of 2001 were to be temporarily transferred to the Ministry of Finance.  The process
of liquidation of the Slovene Development Corporation was to be initiated at the end of 2001.
75 A string of industrial assets are on the privati zation list. They include Slovenske Zelezarne (the steel
group), Talom (the aluminium maker), the tyre maker, and Lek and Krka, the two largest pharmaceuticalproducers.Slovenia WT/TPR/S/98
Page 57
(iv) Price controls and regulations
80. The Government is gradually liberalizing prices of all products and services considered to be
competitively established in the market to a sufficient extent, and for which price disparities between
Slovenia and comparable EU countries have already been removed.  Over the last few years, prices of
the following products have been liberalized:  me dical products (in 1998), heavy heating oils and gas
oils (1998, in 2000 regulated prices were reintroduced), compulsory automobile insurance (1999),sugar (1999), postage (2000);  the pricing of public utility services was transferred to local
communities in 2000.  Price controls still apply to some strategic products and services.  In April 2000
a model for the pricing of petrol was introduced, on the basis of which prices are adjusted every
14 days according to fluctuations in the prices of oil derivatives in the world market and the exchange
rate of the U.S. dollar.  In 2000, 14.8% of prices of products and services monitored by the Office ofStatistics were under direct or indirect Government control.  According to the authorities, the share of
controlled-price products in the statistical basket of goods (consumer price index) is falling every
year, and reached 12.7% in 2001.  The products and services under direct or indirect price control at
the end of 2001 were:  electric power;  oil derivatives;  postage for basic postal services up to 100 gr.;
basic telecommunications services;  railway passenger transport;  distance communal heating;  schooltextbooks;  basic public utility services;  and LPG (propane and butane).
(v) Protection of intellectual property rights
(a) Overview
81. Slovenia has a comprehensive legal framework for the protection of intellectual property
rights.  This includes a revised Law on Industrial Property (adopted in May 2001 and entered into
force on 7 December 2001), covering patents, industrial designs, trade marks and geographical
indications;  a law on copyright and related rights (April 1995, amended in February 2001);  a law onthe protection of topographies of integrated circuits (April 1995);  and the Protection of New Varieties
of Plants Act adopted in 1998.  The main provisions of these laws are detailed in Table III.6.
76  I n
addition to its acceptance of the obligations of the Agreement on Trade-Related Aspect of Intellectual
Property Rights (the TRIPS Agreement), Slovenia has become a party to all major international
conventions and multilateral agreements on intellectual property (Table AIII.9).  Slovenia is anobserver to the European Patent Organization, and has concluded an agreement with the European
Union on patent extension.
77
Table III.6
Summary of intellectual property protection in Slovenia, 2001
FormMain
legislationCoverageSelected
exclusionsDuration Sanctions
Copyrights and
related rightsCopyright and
Related RightsAct of February2001, amendingthe Law of April
1995Literary, scientific and
artistic works (including
computer programs)
Related rights include
rights of performers,phonograms, filmsproducers, broadcasters,
and publishersLife of author plus
70 yearsFines unlimited;
imprisonment of up tothree years;  and seizure anddestruction under Civil and
Penal Code
Table III.6 (cont'd)
                                                     
76 In their responses to questions from WTO Members during the review of  Slovenia’s intellectual
property legislation, the Slovenian authorities confirmed that the TRIPS Agreement is directly applicable underSlovenian law.
77 This Agreement provides that once a patent is filed in the EU, it is automatically extended to
Slovenia and vice versa.WT/TPR/S/98 Trade Policy Review
Page 58
FormMain
legislationCoverageSelected
exclusionsDuration Sanctions
Patents Law on
IndustrialProperty of May2001, amendingthe Laws of 1992
and 1993Any inventions, in all
fields of technology thatare new, involve aninventive step and aresusceptible of industrialapplication.  Compulsory
licences may be granted
when it is in the publicinterest or when thepatentee misuses rightsgranted under the patentPublic interest;
plant or animalvarieties;biologicalprocesses;inventions
contrary to
public order ormorality;inventions onsurgical ordiagnosticmethods or
methods of
treatmentpracticed directlyon the livingbody20 years from filing
date
Supplementary
protection, up tofive years, may begranted onceFines;  imprisonment of up
to three years;  and seizureand destruction under Civil
and Penal Code
Topographies
of integrated
circuitsLaw on
Protection ofTopographies of
Integrated
Circuits ofApril 1995Original creation of
topography, that was notcommonplace in the
semiconductor industry
(article 5). No possibilityof compulsory licence10 years from filing
date (or, if earlier,
from first use)As above
Trade marks Law on
IndustrialProperty of May2001Trade and service marks,
collective marks andwell-known marks.  Five-year use requirement10 years from filing
date, withpossibility ofrenewalindefinitely for 10-
year periodsAs above
Industrial
designsLaw on
IndustrialProperty of May
2001An industrial design, if it
is new and has individual
characterPublic interest;
principles of
moralityOne or more
periods of 5 yearsfrom the filingdate; renewable up
to a total of 25
yearsAs above
Geographical
indications(excluding
appellations oforigin)Law on
Industrial
Property of May2001Registration of
geographical indications
for goods attached to aparticular origin or ofspecial culturalimportance. Does notinclude agricultural
products and winesUnlimited As above
New plant
varietiesLaw on
IndustrialProperty of May
2001Any inventions in all
fields of technology thatare new and involve an
inventive stepSame duration as
patentsAs above
Biological
inventionsLaw on
Industrial
Property 2001Any inventions in all
fields of technology that
are new and involve aninventive stepSame duration as
patentsAs above
Source: WTO Secretariat, based on notifications by the Slovenian authorities.
82. Changes to the legal framework have been implemented by Slovenia with a view to bringing
its intellectual property rights regime in  line with both the TRIPS and the EU acquis communautaire .
According to the Slovenian authorities, as reflected by recent and regular revisions of the laws on
industrial property and copyrights, Slovenia makes every effort to incorporate in its domestic
legislation state of the art developments in international law.  To this aim, consultations are being heldon a regular basis with the WIPO, the European Union, and other bilateral partners.  According to the
European Commission, Slovenia's legislation is now "well developed",
78 and "broadly in line with the
                                                     
78 European Commission (1997).Slovenia WT/TPR/S/98
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acquis ".79  In the WTO, Slovenia did not seek the special transitional provisions available under the
TRIPS Agreement, so that the provisions of the Agreement have been applied from 1 January 1996.
In some areas, Slovenia's legislation is more stringent than the minimum standards laid down by the
TRIPS Agreement.  In the case of duration of copyright protection, for example, whereas the TRIPS
stipulates the life of the author plus 50 years, Slovenia's current copyright law provides protection for
the author's life plus 70 years.  Slovenia's IPR legislation has been subject to a comprehensive reviewby WTO Members in the TRIPS Council.
80
83. Slovenia, together with some other countries, is seeking to extend the coverage of additional
protection for geographical indications to products other than wine and spirits.81  While the authorities
have brought laws on the protection of intellectual property towards international standards,
enforcement appears to have lagged.  A newly enacted law provides for tough criminal sanctions forinfringement, but the Slovenian courts have not yet imposed such sanctions in practice.
(b) Compulsory licences
84. Slovenian courts may grant compulsory licences, i.e. the right to exploit an invention without
the authorization of the patent holder, to the Gove rnment or a third party when the public interest
(national security, protection of health and nutrition) is at stake, or when the owner of the patent or hislicensee misuses the patent rights (Article 125 of the Industrial Property Act).  The compulsory
licence may not be granted within a period specified in the Paris Convention (i.e. four years from the
date of filing or three years from the date when the patent was granted, whichever period expires last).
Owners of patents under a compulsory licence are entitled to remuneration (Article 127).  The
Slovenian laws on the protection of topographies of integrated circuits and on new plant varieties do
not provide for the possibility of compulsory licences.
(c) Parallel imports
85. Current IPR legislation does not refer expressly to parallel imports.  Regarding patents, the
patentee is granted the right to exclude others from importing the patented invention during the term
of the patent protection.  A similar prohibition concerns trade marks: no one is allowed to use a mark
without the consent of its owner.  A copyright holder enjoys the exclusive right of reproduction,
distribution, broadcast, and communication to the pub lic.  The 2001 revisions of the laws on industrial
property (Article 21 of the new law) and copyrights  (Article 50) introduced the notion of exhaustion
of rights conferred by a patent or trade mark.
82
                                                     
79 In its 2000 report, the Commission notes that "in certain areas, only slight technical and
terminological improvements are necessary" and that " th e major remaining legislative step is the adoption of an
act on border enforcement, which should cover both fight against piracy and against counterfeiting, as well as anew act on industrial property".  The latter has been followed by the adoption of a revised law  (European
Commission (2000), p.40).
80 See in particular WTO documents IP/Q/SVN/1, 29 October 1996, IP/Q2/SVN/1, 3 October 1997,
IP/Q3/SVN/1, 4 February 1998, and IP/Q4/SVN/1, 1 March 1999.
81 These countries have argued that the issue is an integral part of the built-in agenda of the TRIPS
Agreement (WTO document IP/C/W/204/Rev.1, 2 October 2000).
82 For example, Article 21 of the Industrial Property Act provides that: "the rights conferred by a patent
shall not extend to acts concerning a product covered by that patent which are done in the Republic of Slovenia
after that product has been put on the market by the owne r of the patent or with his express consent, unless there
are grounds which, under the law of the Republic of Slovenia, would justify the extension to such acts of therights conferred by the patent.  The exhaustion of rights may be extended beyond the territory of the Republic ofSlovenia, if this is in conformity with an international treaty which is binding on the Republic of Slovenia".WT/TPR/S/98 Trade Policy Review
Page 60
(d) Enforcement
86. The Slovenian authorities have recently focused their efforts on improving the enforcement of
IPR legislation.83  However, systematic collection of data on enforcement activities has started only
recently.  The data available since 1996 indicate that the number of cases initiated has increased every
year.84  The average length of proceedings at the first instance (from filing the suit to judgement) is
between one and two years.  As a result, provisional measures are often sought and are granted in themajority of copyright cases.  The number of provisional measures is quite high in trade mark cases;  it
is lower in patent cases.  Around 15 criminal cases were lodged between 1996 and 2000 (most
concerning alleged infringement of copyrights).  While the number of cases is relatively limited,
courts recognize the TRIPS Agreement as directly applicable and self-executing in the Slovenian
territory.
87. Legislation on border measures (the Law on Customs Measures Relating to Infringement of
Intellectual Property Rights, entered into force on 1 November 2001).  The Law establishes the
conditions under which the customs administration may intervene against alleged infringing or
counterfeit goods.  It allows customs officials  to withhold goods violating intellectual property rights
upon the request of the owner of the trade mark or patent (Articles 9 to 12 of the Law), or based ontheir own suspicion (ex-officio seizures) (Article 14).
                                                     
83 Further information regarding IPR enforcement can be found in Slovenia's responses to the Checklist
of Issues on Enforcement (WTO document IP/N/6/SVN/1, 13 September 1996) and the review of Slovenia'slegislation on IPR enforcement (WTO document IP/Q4/SVN/1, 1 March 1999).
84 The number of court cases initiated was 11 in 1996, 23 in 1997, 47 in 1998, 34 in 1999 and 96 in
2000.