RESTRICTED
WORL D TRAD E
ORGANIZA TIONWT/ACC/ HRV /54
22 July 1999
(99-3080)
Working Par ty on the
Accession o f Croa tiaOriginal: English
ACCESSION OF CR OATIA
Additional Questions and Replies
The following additional questions and replies have been received from the Ministry of
Economic Affair s of the Republic of Croatia. Questions refer to document
WT/ACC/SPEC /HRV /7/Rev.1 unless otherwise specified .
_________ ______
TABLE OF CONTENTS
Question Page
II. ECONOMY, ECONOMIC POLICES AND FOREIGN
TRADE
2. Economic Policies
(a) Main directions o f ong oing econ omic policies
State ownership an d privatization 1-5 3
Pricing policies 6 12
III. FRAMEWORK FOR MAKING AND ENFORCING
POLICIES AFFECTING FOREIGN TRADE IN GOODS AND
TRADE IN SERVICES
3. Division of authority between ce ntral and sub-c entral
governme nts7 12
Status of international agr eements 8 13
6. Description or judicial, arbitral or administrative tribunals or
proce dures
Right of appeal 9 13
IV. POLICIES AFFECTING TRADE IN GOODS
1. Import re gulation
(a) Registration requireme nts fo r eng aging in importing 10 15
(b) Characte ristics of n ational tariff 11 15
(d) Other duties and c harges, specifying any charges for services
rende red12-13 15
(e) Quantitat ive import restrictions, including prohibitions, quotas
and licensing sy stems14 16
(h) Customs valuation 15-23 18
(i) Other customs f ormalities 24 22
WT/ACC/HR V/54
Page 2
Question Page
(k) Application of internal taxes on imports 25 22
(l) Rules of o rigin 27-29 23
(o) Safegu ard regime 30 24
2. Export re gulation
(b) Customs tariff nomen clature 31-32 25
(c) Quantitat ive export r estrictions 33 25
3. Internal policies a ffecting for eign trade in goods
(a) Industrial policy, including sub sidy policies 34 26
(c) Sanitary and p hytosanitary me asures 35-40 27
(d) Trade -related investment measu res 29
(e) State-trading pr actices 41 29
(g) Free economic zo nes 30
(l) Government pr ocurement 42-43 30
4. Policies affe cting for eign trade in a gricultural pr oducts 30
5. Policies affe cting trade in other secto rs 30
V. TRADE-RELATED ASPECTS OF INTELLECTUAL
PROPERTY REGIME
1. General 44-50 30
VI. TRADE-RELATED  SERVICES REGIME 51 38WT/ACC/HR V/54
Page 3
II. ECONOMY, ECO NOMIC POLICIES AND FOREIG N TRADE
2. Economic Policies
(a) Main direction o f the ongoing e conomic policies
State ownership and p rivatization
Question 1.
We are pleased with the evolution of the information in this section. We remain interested,
however, in incorpo ration o f informa tion on the following in the repo rt:
Please describe the natu re of the firms (what do they make, what servic es do they provide, do
they import/expo rt?) remaining in state or other non-privat e forms of ownership (i.e., less than
50 per cent private ownership) and on the portion of Croatia’ s trade and economic activity that
is repre sented by th ese non-priva tized holdings.
Reply:
The table describing the natur e ofthe companie s in the Croatian Privatization Fund (CPF)
portfolio is enclosed .
These companies acco unt for 0.94 per cent of total Croatian imports and 2.32 per cent of total
Croatian expo rts.
However, most o f non -privatized companies that make part of CPF portf olio today arein very
poor state, and ther e wer e no intere sted buyers, except employee s who today have up to 50 per cent of
shares. Consequently, their share in Croatian overall economic activity is almost neglig ible.
Regarding companies that are 100 per cent owne d by CPF (44 comp anies) , 33 (75 per cent) are
located in the previou sly occupied parts of Croatia (Danub e region of Croatia and other parts of
Croatia- Slavonia, Dalmatia, Lika, etc.) - areas that were affected bythe war, what was the main
reason that those comp anies a re still in CPF portfolio.
Beside the companie s remaining predominantly in the CPF Portfolio, there are ten large state-
owned infrastructu re and public utilities and four state-own ed banks and compa nies in which those
banks are majo r shareholders. All those companies, which are still not privatized (less than 50 per
cent of p rivate owne rship), g enerate a bout 40 pe r cent of the GDP.
The profitabili ty of the total enterprise sector is very low in aggre gate: accounting profits
stand at about 0.3 per cent ofthe GDP, the net result of profits equivalent to 4.3 per cent of GDP and
losses to 4.0 per cent of GDP. 25 per cent of all enterp rises are lossmake rs, and almost 40 per cent of
employees are employed by a lossmake r. The subset of non-pri vatized enterprise s account only for
one-third of total profits, but for two-thirds of total losses. About 25 forme r socially-owned
enterpris es remaining in State ownership are seriou s lossmake rs and their losses amount forabout 1.3
per c ent of GDP. The se are generally large employ ers at the region al level.
50-99 PER CENT IN CROATIAN PRIVATIZATION FUND PORTFOLIO
No. Company Headqua rter Sector Subsector Equity
(Hkn)Residual CPF
PortfolioPer c ent of
Equity
1 Zagreb Studio Zagreb Finance & Others Other Business S ervic es 35.378,00 17.689,00 50,00
2 Autotrans Transp ort &
CommunicationsFreight Road Tr anspo rtation 13.376.000 ,00 6.687.418, 60 50,00
3 Trgokom-
PodravinaTrade Retail Trade – Consume r Good s 560.880,00 280.440,00 50,00
4 Ribarstvo Srb Agriculture Fishery 1.578.000, 00 789.900,00 50,06
5 Duga Resa Trade Retail Trade In Non -Specialized
Stores- Co nsume r Goods41.298.400 ,00 21.090.000 ,00 51,07
6 Maj Stil Raša Industry Clothes Production 2.667.600, 00 1.375.980, 00 51,58
7 Mogal Health & Social Care Social Care 3.503.600, 00 1.818.300, 00 51,90
8 Merk ur Karlovac Trade Wholesale T rade In Va rious P roducts,
Retail Trade In Non -Specialized Stores
- Consume r Goods13.214.880 ,00 6.919.420, 00 52,36
9 Sardina Postira Industry Proce ssing And Can ning Of Fish And
Fish Products34.101.960 ,00 17.863.420 ,00 52,38
10 Monting-
VentilatorOgulin Industry Production Of Cooling And
Ventilat ing Equipment-5.163.820, 00 2.783.500, 00 53,90
11
TjednikSisak Publishing,
Education & CultureNewspape r Publishing 669.328,20 367.080,00 54,84
12 Intal Zagreb Construction Finishing Works In Building Indu stry 61.560,00 34.200,00 55,56
13 Auto Škola
CentarSplit Publishing,
Education & CultureDriving School 136.936,80 77.520,00 56,61
14 Tang Tvornica
AlataNova Gradišk aIndustry Tool Production 79.711.800 ,00 46.000.500 ,00 57,71
15 Primošten Šibenik Tourism & Catering Hotels, Motels 186.494.12 0,00 109.433.16 0,00 58,68
16 Brodogr adilišt
e TrogirTrogir Industry Ship Building And Repairs 196.576.90 3,20 117.951.24 0,00 60,00
17 Unimal Zagreb Trade Wholesale T rade – Variou s Prod ucts 30.400,00 18.354,00 60,38
18 Strojotehna Zagreb Craft Machine R epair 592.800,00 365.058,40 61,58
No. Company Headqua rter Sector Subsector Equity
(Hkn)Residual CPF
PortfolioPer c ent of
Equity
19 Orahovica Industry Production Of Metal Structure s And
Their Parts, Doo rs, Windows, F rames
And Thres holds Fr om Iro n, Steel And
Aluminum6.771.000, 00 4.192.500, 00 61,92
20 Podravina -
Posl. UslugeFinance & Others Accounting Service s 403.560,00 250.040,00 61,96
21 Gp Dinara Knin Construction Building Stone Extraction 14.300.000 ,00 8.865.000, 00 61,99
22 S.I.G.I.T. Samobor Industry Stone Extraction 4.529.220, 00 2.811.620, 00 62,08
23 Agrokoka,
ZagrebZagreb Agriculture Poultry – Breeding, E ggs Pr oduction,
Production Of Meat Pro ducts And
Poultry Meat131.939.80 0,00 82.030.220 ,00 62,17
24 Poluotok Zadar Construction Finishing Works In Building Indu stry 111.925,20 69.661,60 62,24
25 Virovitica Industry Production Of P rocessed Toba cco And
Tobacco Substitutes , Homogenized Or
Reconstru cted Toba cco, Tob acco
Extracts And Es sences8.186.100, 00 5.144.100, 00 62,84
26 Tvornica
Olovnih
Proizvoda
(Top)Zagreb Industry Metal Packa ging Produ ction 78.511.800 ,00 49.406.460 ,00 62,93
27 Adria Diesel Karlovac Industry Production Of Electric Gene rator
Aggregate s And Rotational Converter s,
Production Of Diesel And S emi Diesel
Engines19.776.200 ,00 12.468.600 ,00 63,05
28 Adriachem Kaštel Industry Production Of Plastic Articles,
Production Of Plastic Pac kaging229.953.96 0,00 145.408.52 0,00 63,23
29 Stanousluga Rijeka Construction Structural Enginee ring
(Construction And Rep air Of
Buildings)626.620,00 397.480,00 63,43
30 Hut Grubišno
PoljeGrubišno Polje Tourism & Catering Catering 12.369.000 ,00 7.908.560, 00 63,94
No. Company Headqua rter Sector Subsector Equity
(Hkn)Residual CPF
PortfolioPer c ent of
Equity
31 Nip Revije
VjesnikZagreb Publishing,
Education & CultureNewspape r Publishing 9.701.400, 00 6.467.600, 00 66,67
32 Aerodr om
Rijeka-Rivijera
Kvarne rRijeka Transp ort &
CommunicationsAirport Service s 132.665.60 0,00 88.445.000 ,00 66,67
33 Frigoprom Split Trade Wholesale T rade --Foods 116.211,60 77.520,00 66,71
34 Agrolabin Labin Agriculture Cereals And G rains P roduction 35.398.098 ,20 23.733.660 ,00 67,05
35 Poljoprivreda
GradinaGradina Agriculture Cereals And G rains – P roduction 29.564.000 ,00 19.955.320 ,00 67,50
36 Obzor Zagreb Finance & Others Consultancy Se rvices 76.000,00 51.300,00 67,50
37 Mirna-
TrgovinaRovinj Trade Retail Sale- Fish And Meat 2.287.600, 00 1.616.900, 00 70,68
38 Tapetar, Split Split Craft Wall Covering Se rvices 104.192,20 74.480,00 71,48
39 Sali Industry Proce ssed An d Canne d Fish-
Production , Retail Trade In Non -
Specialized Stores - Cons umer Good s39.829.301 ,00 29.147.520 ,00 73,18
40 Sc Forum Solin Tourism & Catering Catering 3.488.400, 00 2.620.100, 00 75,11
41 Zagreb Trade Production, Pro cessing And Canning
Of Meat And Meat Pr oducts81.429.600 ,00 61.626.600 ,00 75,68
42 Bagat-
ElektrokomercZadar Construction Installation Of Electrical Wiring And
Fittings557.080,00 438.140,00 78,65
43 Industry Production Of Other Pla stic Articles 16.605.848 ,00 13.106.200 ,00 78,93
44 Mediplast Industry Production- Plastic Pr oducts 5.213.600, 00 4.165.940, 00 79,91
45 V. Gortan Zagreb Construction Structural Enginee ring 254.775.94 0,00 204.246.20 0,00 80,17
46 Istra-Genetski
CentarBuzet Agriculture Sheep And Go ats- Br eeding, Milk
Proce ssing And Dairy P roduction9.681.096, 60 8.035.115, 20 83,00
47 Kla-Ma Klanjec Trade Retail Sales- Consumer Goo ds 2.346.120, 00 1.956.620, 00 83,40
48 Texpartne r Buzet Industry Clothes Production 9.891.400, 00 8.394.200, 00 84,86
49 Salonstil Split Trade Retail Sale- Furniture 158.840,00 137.427,00 86,52
50 Beli Manastir Trade Building Material – Retail Sale 4.223.700, 00 3.781.800, 00 89,54
51 Pgm Ragusa Dubrovnik Industry Production - Building Material 26.234.000 ,00 24.288.000 ,00 92,58
No. Company Headqua rter Sector Subsector Equity
(Hkn)Residual CPF
PortfolioPer c ent of
Equity
52 Tvik Knin Industry Production Of Rivets, Sc rews, Ch ains
And Springs, To ol Production, I ron
Goods93.870.000 ,00 89.730.000 ,00 95,59
53 Plan Biro Rijeka Finance & Others Accounting Service s 21.660,00 21.169,80 97,74
T O T A L 1.845.493. 239,00 1.244.942. 753,60 67,46 pe r cent
100 PER CENT IN CROATIAN PRIVATIZATION FUND PORTFOLIO
No. Company Headqua rter Sector Subsector Equit (Hkn) Residual Cpf
Portfolioper c ent Of Equity
1 Ergela Agriculture Horse Br eeding 13.576.800 ,00 13.576.800 ,00 100.00
2 Razvitak Ilok Trade Production And W holesale - Building
Material11.020.000 ,00 11.020.000 ,00 100.00
3 Agrokomer cIlok Agriculture Farming Of Cattle, Poultry And Other
Animals24.700.000 ,00 24.700.000 ,00 100.00
4 Vukovar Industry Retail And Wholesale - Foo d Pro ducts 13.300.000 ,00 13.300.000 ,00 100.00
5 Bojorad Vukovar Industry Painting And Glazing Works 5.700.000, 00 5.700.000, 00 100.00
6 Elip Vukovar Industry Installation Of Electrical Wiring And
Fittings18.240.000 ,00 18.240.000 ,00 100.00
7 Otokar
Keršov aniRijeka Industry Publishing 5.132.200, 00 5.132.200, 00 100.00
8 Pounje Dvor Na Uni Industry Food Prod uction 1.118.000, 00 1.118.000, 00 100.00
9 Šamarica Dvor Industry Wood P rocessing 27.204.000 ,00 27.204.000 ,00 100.00
10 Prehr ana Glina Industry Food Prod uction, Retail Sale 12.179.000 ,00 12.179.000 ,00 100.00
11 Dip Gl ina Glina Industry Proce ssing Of Wood And W ood
Products4.621.000, 00 4.621.000, 00 100.00
12 Trgopr omet Glina Trade Retail Sale – Various  Produ cts 14.928.000 ,00 14.928.000 ,00 100.00
13 Up Central Hrvatska
KostajnicaTourism &
CateringCatering 10.064.300 ,00 10.064.300 ,00 100.00
14 Ilokturist Ilok Tourism &
CateringTourist Agency And C atering 4.560.000, 00 4.560.000, 00 100.00
15 Dalmacija Šibenik Industry Building Si te Prepar ation 360.000,00 360.000,00 100.00
16 Tvornica
Sulfatne
Celuloze I
PapiraPlaški Industry Production- P aper And Pape rboard
Articles50.778.600 ,00 50.778.600 ,00 100.00
No. Company Headqua rter Sector Subsector Equit (Hkn) Residual Cpf
Portfolioper c ent Of Equity
17 Centar Za
Industrijsko
OblikovanjeZagreb Finance & Others Resea rch In Econ omy 47.200,00 47.200,00 100,00
18 Ipz-
TermoprojektZagreb Finance & Others Architectural And Enginee ring
Services And Tec hnical Consultancy66.120,00 66.120,00 100.00
19 Inel Zagreb Industry Production Of Electric Eq uipment 39.520,00 39.520,00 100.00
20 Tvornica
Automobilski
h Djelova I
OpremeBeli Manastir Industry Production- P arts And Ac cessories F or
Motor Vehicles25.614.713 ,20 25.614.713 ,20 100.00
21 Baranjska
Tekstilna
IndustrijaBeli Manastir Industry Clothes Production 18.507.630 ,20 18.507.630 ,20 100.00
22 Slovo Beli Manastir Industry Printing And Related Services 3.301.117, 00 3.301.117, 00 100.00
23 Neimar Beli Manastir Construction Construction Of Buildings 4.690.830, 20 4.690.830, 20 100.00
24 Projektni
BiroBeli Manastir Finance & Others Engineering In Building Industry 1.110.683, 00 1.110.683, 00 100.00
25 Veterinarsk a
StanicaBeli Manastir Agriculture Veterinary Se rvice s 2.475.426, 40 2.475.426, 40 100.00
26 Likaplast Udbina Industry Production – Spe ctacle Fr ames,
Sunglasse s , Pr otective Glasses2.682.600, 00 2.682.600, 00 100.00
27 Veterinarsk a
StanicaAgriculture Veterinary Se rvice s 526.600,00 526.600,00 100.00
28 Progr es Beli Manastir Industry Structural Enginee ring 12.398.856 ,60 12.398.856 ,60 100.00
29 Dunav Beli Manastir Trade Retail Sale- Consumer Good s 26.982.169 ,80 26.982.169 ,80 100.00
30 Adica Beli Manastir Tourism &
CateringCatering 2.689.856, 60 2.689.856, 60 100.00
31 Aerodr om
OsijekOsijek Transp ort &
ComunicationsAirport Service s 28.281.880 ,00 28.281.880 ,00 100.00
No. Company Headqua rter Sector Subsector Equit (Hkn) Residual Cpf
Portfolioper c ent Of Equity
32 Mljekara Knin Industry Milk Proces sing And Dairy P roduction 1.817.000, 00 1.817.000, 00 100.00
33 Agropro dukt Benkovac Agriculture Fruit Production 23.206.000 ,00 23.206.000 ,00 100.00
34 Batina Batina Tourism &
CateringCatering 336.026,40 336.026,40 100.00
35 Sloboda Dvor Industry Textile Production 1.130.000, 00 1.130.000, 00 100.00
36 Mikrosive rit Industry Retail Sale- Textile And Clothes 5.050.000, 00 5.050.000, 00 100.00
37 Me-Ko Industry Production- Articles Made F rom
Wicker2.660.000, 00 2.660.000, 00 100.00
38 Prerada
DrvetaDarda Industry Production Of Sawn Timber 1.325.400, 00 1.325.400, 00 100.00
39 Ljevaonica Batina Industry Metal Casting 4.923.895, 60 4.923.895, 60 100.00
40 Ina-
PetrokemijaKutina Industry Mineral Fe rtilizer Production 2.471.721. 000,00 2.471.721. 000,00 100.00
41 Koksar Bakar Industry Construction Indu stry 288.317.93 8,00 288.317.93 8,00 100.00
42 Hidroprojekt-
VikZagreb Industry Engineering In W ater Fa cilities 19.682,00 19.682,00 100.00
43 Motor Zagreb Trade Retail Trade- M etal Products 71.949,20 71.949,20 100.00
44 Mex Tou rs Zagreb Tourism &
CateringTravel Agen cies And Tou r Ope rators ,
Transp ort Ser vices By To urist Buse s270.560,00 270.560,00 100.00
T O T A L 3.147.746. 554,20 3.147.746. 554,20 100 pe r cent
WT/ACC/HR V/54
Page 11
Question 2.
Please indicate the specific time frame unde r which the ten large infra structure and utility
companies previously men tioned will be “commercialized”
Reply:
It is rather difficult to indicate a specific time frame for the commercialization and
privatization of these companies, but initia l analysis indicate a mid-term period of around five y ears.
Question 3.
Please provide information on the timing of Croatia’ s privatiza tion prog ram, e.g., when did it
start, how many o f the 2,950 firms wer e privatized, e.g., in 199 5,
1996, 1997 , and 199 8, when did the second st age commence?
Reply:
From April 1991 until October 1995, about 2,200 socially-owne d enter prise s have been fully
or almost fully privatized. They account for 75 per cent of theinitial number accounting for about 50
per cent of the book value of privatizable companie s, and for more than 30 per cent of employment,
and 26 p er cent of revenues of the entire ente rprise secto r.
As of Septembe r 1996, 54 per cent of the overall equity was privatized, which togethe r with
reservations o f 5 per cent fo r restitution makes almost 60 per c ent of the p rivate ec onomy. Only in 228
companies are the majority ofcommon stock held by the CPF and two pension funds. Moreover,
employees in wholly privatized compa nies represented 42 per cent of total jobs in 1995 against only
1.7 per cent in 1990.
The remaining 750 companie s were privatized from Octobe r 1995 to May 1999.
The second stage in privatization had been implemented through mass vouche r privatization.
Voucher privatization began by distributing the first round of vouc hers in June 1998, and the process
had been concluded bySeptember 1998. Voucher privatization ensured the privatization of 50 per
cent to 60 pe r cent o f residual portf olio of the CPF, including sha resin 30 to 50 top-quality companie s
reserved for strategic investors or public offerings, which constitutes the last item in complete
privatization of the re sidual portfolio.
By completing the vouche r privatization, the process is almost completed, apart from the
small residual CPF portfolio and the large state-owned enterp rises. The process of privatization of
large state- owned enterprise s has started in 1999, and each company will be privatized in accordance
with a special law.
Question 4.
We would also appre ciate knowing abou t how long Steps 1 and 2 of thecommercialization
proces s have taken place. Over what periods of time firms have been conve rted from State or
“socially-owned” t o privat e owner ship.
Reply:
The overall process started when the Law on Transformation of Socially-Owned Enterprise s
was pas sed o n 21 April 1991 and h as proceed as follows:
WT/ACC/HR V/54
Page 12
The first step; an autonomous transformation of enterp rises was possible from April 1991 up
to 30 June 1992. Of the total about 3,000 compa nies, which had the oppo rtunity to start the process of
privatization, 2,444 enter prise s had submitted propos als to the Agency by that date, having the
possibility to conduct an autonomous tra nsformation.
The second step; selling of shares which had been transferred to the CPF, started on
1 July 1992 and the process hasn’t been completed yet. From those 556 which hadn’t gone throu gh
autonomous privatization, 97 (17 per cent) have lessthan 50 per cent private ownership (50 – 100 per
cent shares in CPF portfolio), and remaining 409 were either privatized through variou s privatization
campaigns, including vou cher privatization, went bank rupt or ceased to exist.
Question 5.
We would also appre ciate info rmation in the Working Party repor t addre ssing abou t how much
longer Croatia believes its privatization program will take place, e.g., for the nearly 40 per cent
of firms that have only 25 per cent or less private holding. We seek this information in orde r to
better unde rstand the role of the State in owner ship and outpu t and to better under stand the
market f or which we ar e seeking commitments on access.
If Croa tia can provide this information, we believe work on this part of the report can be
concluded.
Reply:
Croatia believes that CPF owners hip over comp anies will evaporate in next two years , but the
privatization of large State -owned companies would be achieved within a mid-term period of around
five yea rs.
Para 2 6: The commitment in th is parag raph is consistent with our r equests.
Pricing Policies
Question 6.
Please confirm that the list in table 2 covers all current goods and services subje ct to state price
controls. Plea se upda te it a s necessary.
Para 33 : The commitment in this pa ragraph is consis tent with our r eques ts.
Reply:
Croatia confirms that the list in table 2 covers all current goods and services subject to state
price co ntrols.
III. FRAMEWORK FOR MAKING AN D ENFOR CING POLICIES
3. Division of authority b etween central and sub -central go vernmen ts.
Central/Subcent ral Authority for WTO
Question 7.
We appr eciate Croatia’ s acceptance of the commitment on subcen tral application of the WTO.
We would like to seeit redrafted to make clear the Croatian Government ’s intent to uniformly
administer WTO provisions th roughou t the territo ries unde r its co ntrol, a s follows:
WT/ACC/HR V/54
Page 13
Para 41: The repre senta tive of Croa tia confirmed that sub-ce ntral administrative authoritie s
and entities within territor y controlled by the Croa tian Governmen t, e.g., local administrative
bodies, have noauton omous jurisdiction or authority to establish regulations over issues of
subsidies, taxation, trade policy orany other measures covered by WTO provisions in Croa tia
independent of the central authorities andthat application of these measu res areexclusively the
responsibilities of the executiv e and legislative bran ches of the central governmen t. He
confirmed that the provisions of the WTO Agreement , including Croatia’s Protocol, shall be
applied uniformly throughout its customs territory and other territ ories unde r its control,
including in regions engaging in border trade or frontier traffic, special economic zone s, and
other area s where special regimes for tariffs, taxes and regulations are established. He added
that when apprized of a situation wher e WTO provisions were not being applied or were
applied in a non – uniform manner, central authorities would act to enforce WTO provisions
without requiring affected partie s to petition through the courts and will eliminate or nullify
measures taken by sub-central auth orities in Croa tia that areinconsist ent with WTO provisions
from the date of a ccession. The Working Par ty took no te of the se commitments.
Reply:
Croatia acce pts the pro posed redrafted text of the commitment in the para 4 1.
Status of International Agre ements
Question 8.
We would like to know if, as with other coun tries currently in the accession proc ess,
international treaties and agreemen ts ratified by Croatia’ s Parliament, as Croa tia’s accession to
the WTO and acceptance of its Agre ements will require, have preceden ce over domes tic laws or
other acts in Croatia, and whether theprovisions of international agreement s have direct
applicabil ity in the national legal sys tem
If so, we would like to see this r ecord ed in this se ction o f the repo rt.
Reply:
According to the Croatian Constitution (article 134) international treaties and agreements that
are ratified and consequently published become an integral part of the intern al legislation and have
preceden ce over dome stic laws and other legal acts. Although there is a possibility of direct
application of international agreements in the Croatian legal system, the WTO Agreements and
obligations stemming from those Agre ements are incorporated in specific laws cove ring particular
areas which contain provisions that are stipulated in and are in full compliance with these
Agreements.
6. Description of judicial, arbitral or administrative tribunals or pr ocedu res
Right of Appeal
Question 9.
We appr eciate the information provided for WT/ACC/SPEC /HRV /7/Rev.1, concerning
administrative and fu rther appe al of rulings on matt ers co vered by WTO provisions.
We seek further elabora tion. This response doesn ’t really indicate wheth er or not Croatia
provides the right of appeal contemplat ed in Article X. We are trying to establish, and
incorporat e in the Working Party repor t text, whether or not trade rs have a direc t meth od of
appealing administrative rulings to autho rities notbureau cratically affiliated with the agenc y
WT/ACC/HR V/54
Page 14
that issued the original ruling, and if there is automatic right of appe al in WTO matter s to an
independent tribunal.
In the elaboration for the Working Party repor t, we would also like information that addr esses
what, in prac tice, a trade r can doto appeal an agen cy’s administrative ruling to an independ ent
tribunal and beyond, the r ole of Cr oatia’ s cou rts, h ow the High Administrative Cou rt work s.
We consider it very importan t that if Croa tia’s curre nt system doesn ’tfacilitate the right of
appeal to the judiciary or some other independen t authority, itwill be important that one be
established in th e con text of a ccession to the WTO.
Para 37 : We reserve on this c ommitment pending fur ther clarification.
Reply:
We confirm that in accordance with the Croatian legislation there is an automatic right to
appeal by tr aders an d other n atural an d legal pe rsons in all WTO related matters.
The use of the te rm ”entitled to insti tute adminis trative lawsuit” means the right of appeal of a
trader to the inde pende nt tribunal in acco rdanc e with the Article X of the GATT 94, which is the High
Administrative Court (HAC).
The High Administrative Court is part of the normal Croatian judicial System. Being part of
the judicial branch the HAC is independ ent from state administrative bodies andthe executive branch
in gener al.
The role of the HAC is to ensure legal protection of traders and other legal and natur al person
in matters related to the rulings made by administrative bodies and agencie s. In doing so, the HAC,
following an appeal by theplaintiff party rules on whether adecision or act issued by the
administrative body has been made in accordance with the law and procedures set therein. Rulings of
the HAC are final.
For all WTO issue s the right of appe al against a decision or act of an administrative body can
be automatically lodged with the HAC, except in customs and tax issues. In such cases the first
complaint (or appeal) against an act or decision issued by the lower administrative body (customs
office or local tax authority), should be lodged to central customs or tax authorities (The Customs
Directorate and the Tax Dire ctorate o f the Ministry o f Financ e).
If the trader is not satisfied with the ruling made by the central autho rities, he can
automatically file an appeal to the HAC.
From this information, we believe that it is clear that Croatia has a system that enables traders
to have a direct method of appe aling administrative rulings to authorities not bureau cratically
affiliated with the agency that issued the ruling.
IV. POLICIES AFFECTING TRA DE IN GOO DS
1. Import Regulation
(a) Registra tion requiremen ts for eng aging in importing
Question 10.
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Croatia has stated that with the enactmen t of the new law on Foreign Trad e and the Company
Law, companies engaging in foreign trade are no longe r required to regis ter separ ately with the
Commercial Court. However, Croatia has also stated that first-time applicants for import
license have to re giste r with the Commer cial Court.
Does this requirement still exist? If so, why are first-time applicant s required to regist er for a
license? Is this registra tion the only additional requirement for first-time applicant s? If so,
please indicate how an impor ter can obtain this registra tion. Ifnot, please expend on this
question.
Paras 46 and 47 : The commitment in th ese pa ragraphs is con sisten t with our reque sts.
Reply:
Croatia reconfirms that comp anies engaging in trade in Croatia are required to register only
once with the Commercial Court (when they start their business operations) and after that are allowed
to perfo rm all trade activit ies including foreign trade with all kind of goods , irrespective whethe r
those good s are subje ct to import or expo rt license ornot. Therefore, there are no additional
registration re quirement fo r first-time license applicants.
Croatia stated in previou s answ ers that first-time applicants for import license have to submit
a copy of their registration with the Commercial Court for the simple reason that the Ministry of
Economy can be certain, before issuing a licence, that this company really exists. In the event of any
subseq uent application by that company the copy of the registration would not be requir ed.
(b) Charact eristics of na tional tarif f
Question 11.
We would like to seeTable 3, which has been removed in this revision of this revision of the
Working Party report, updat ed and return ed to the repor t. It outlines the distribution of
Croatia’s applied tariff rates, information that we believe is very relevan t to Croa tia’s accession
to th e WTO.
Reply:
Croatia agrees to reinse rt the Table 3 in the Working Party Repo rt. As the Table contains the
applied tariff rates the re is no data that need s to be up dated.
(d) Other dutie s and cha rges levied on imports bu t not on domes tic produ ction
Question 12.
We appr eciate the additional informa tion provided on the stamp tax fees in HRV/51 and its
inclusion in the section o f the rep ort on cha rges and fe es applied f or services rend ered.
We seek reference in this section to the dispo sition of the 1 per cent charg e on imports from
Macedonia and parts of Bosnia-Her zego vina, as ou tlined in WT/ACC /HRV /51.
Para 53 : This parag raph is con sisten t with our reque sts.
Reply:
Croatia accept that a reference to the disposition of 1 percent customs duty applied by
Croatia in accordance with the Free Trade Agre ement with Macedonia and the 1 percent customs
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evidence feeapplied on imports from the Federation of Bosnia and Herzegovina, be includ ed in
Working P arty Repo rt, as follows:
"TheRepresentativeofCroatiaconfirmedthattheauthoritiesofCroatiaandMacedoniahad
accordinglyagreedthatCroatiawouldeliminatethe1percentcustomsdutyatthelatestbythedateof
accession,andtheFormerYugoslavRepublicofMacedoniawouldeliminatethe1percentcustoms
evidencefeeasfrom1January2000.Hefurtherconfirmedthatthe1percentcustomsevidencefeeon
importsfromtheFederationofBosniaandHerzegovinahadbeenabolishedon15May1999when
MFNtradebetweenCroatiaandBosniaandHerzegovinahadbeenreintroduced."
Question 13.
Why was the mate rial dealing with fees assessed on imported cement removed from the draft
Working Party report. Are these fees still in place? Are they applied with reference to any
particular s ervice?
Para 58 : The commitment in this pa ragraph is consis tent with members r eques ts.
Reply:
Croatia does not object to the reinse rtion of the information on fees assessed on imported
cement in the text of the Working Party Report. Forthe time being, fees on theimports of cement
include a stamp administrative fee of HRK 60 p er customs declaration, a fee of HRK 170 for the costs
of quality control and a weight based fee for sampling and testing of the cement. Following the
implementat ion of the new Law on State Inspectorate (beginning of Octobe r 1999 ), weight-bas ed fee
will be abolished and fees for quality control will be only cost-ba sed i.e. in accordance with servic es
rende red.
(e) Quantitative import restrictions, including prohibitions, quotas and licen sing sys tems
Question 14.
We believe that this section as it relat es to licensing requiremen ts on iron tubes and bars and
tractors (more than five years of age), should be edited with referen ce to the informa tion
contained in the response to Ques tion 14 in WT/ACC/HRV /51, in particular that the tractor
licenses ar e issued au tomatically.
We remain inter ested in detailed information from Croatia on the criteria and price
requirement s applied in conjunc tion with these licensing requir ements, since it addresses the
issue of Cr oatia’ s inten t to u se license s as a form of trade restriction.
In the “Decision of July 12, 1996” referred to in WT/ACC/H RV/25 the same as the Decision of
12 June 1996 referred to in Para 68 of WT/ACC/SPEC/ HRV/7/Rev.1? That Decision in the list
of documen ts reviewed by the W orking Par ty re fers only t o expo rts.May w e have a copy?
We note that WT/ACC/HRV /25 does not offer sufficient informa tion to determine that
Croatia’s trade regime is opera ted in conformity with the Impor t Licensing Procedur es
Agreement, particularly in light of the requirement s of the manda tory quality certification
system, which act as a from of import licensing regime, i.e., “requiring the submission of an
application or other document ation (other than that required for customs purpose s) to the
relevant administrative body as a prior condition for importa tion into the customs territ ory of
the importing M ember.”
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We applaud Croa tia’s decision to abolish its discre tionary import licens es for iron tubes and
bars. We note, howev er, that iron tubes and bars arestill listed as requiring import licenses in
the cha rt app ended to th e Wo rking Party repo rt.
Could Croatia review this chart to upda te it?
In parag raph 47, Croatia states that the “purpose of the import licens e regime was to monito r
and control import and expo rt of goods which for various reasons were classified as sensitive.
Discretionary impor t licensing used to pro tect sensitive pr oduct s is WTO-incon sisten t.
Croatia should re-examine the list of produc ts subject to import licensing requirement s,
eliminating any products from the list for which the restriction is intend ed to protect domes tic
output, and with a view to ensuring that these licenses are being required for the purpose
intended and to minimize the use o f licenses to the fulles t extent possible.
One item of particular concern to us is H.S. 84.22, dishwashing machines , machinery for
cleaning or drying bottles or other containe rs. It is listed on the chart appended to the draft
Working Par ty rep ort,and it is unclear on what b asis Croa tia is maintaining an import license.
For what purp ose is animport license required? We appreciat e Croa tia’s effort to address this
issue.
We objectto the changes made to para 72. Most of the subs tance ofthe commitment has been
eliminated. In light of Croa tia’s historical extensive use of quota s, license s, and other
quantitative restrictions , we would want t o see this mat erial res tored.
Para 72: The commitment in this paragraph is not consist ent with our requ ests, and is
inadequate for the pro tocol. We s eek r estoration of a commitment along th e following lines:
72: The repre sentative of Croa tia confirmed that, afteraccession, Croatia would take recours e
to quantit ative import rest rictions only in situations envisaged in WTO Agre ement, including in
article XII o f the GATT and acco rding to the WTO Agr eement on Saf eguard s.
72 bis. The representative ofCroatia confirmed that Croatia would from the date of accession,
eliminate and shall not introduce, re-introduc e or apply quantita tive restrictions on import s, or
other non-tariff measur es such as quotas, bans, permits, prior autho rization requirements ,
licensing requirements and other restrictions having equivalent effect that canno t be justified
under the provisions of theWTO Agre ement. He further confirmed that the legal authority of
the Gove rnment of Croa tia to suspend import s and expor ts or to apply licensing requirement s
that could be used to suspend, ban, or otherwise restrict the quantity of trade will be applied
from thedate of accession in conformity with therequiremen ts of the WTO, in particular
Articles XI, XII, XIII, XVIII, XIX, XX and XXI of the GATT 1994, and the Multilateral Trade
Agreement s on Agricultur e, Application of Sanit ary and Phytosanitary Measures, Impor t
Licensing Procedu res, safeguard s and Technic al Barriers to Trad e. The Working Party took
note o f these commitments.
We re serve on this sec tion pending r esolution of these issu es.
Reply:
As already stated in previous documentation and answers, Croatia applies import licensing
proce dures in compliance with the re spective WTO Agr eeme nt and on automatic basis.
Price requirements are not part of licensing requirements since Croatia abolished the import
licensing regime fo r iron tube s and bars.
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As we stressed very clearly several times before it is not Croatia's intention to use license s as
a form of trade orimport restriction, so there is no price or similar criteria in issuing import or expo rt
licenses.
The “Decision o f 12 July 1996”, referred to in HRV/25 is the same as the Decision referred to
in para 68of WT/ACC/SPEC/ HRV/7 /Rev 1. We apologize for that mistake, it should be stated in
both documents “o f July 12,1996 ” instead “o f June 1 2, 1996 ”
That decision refers to import and expo rt and its updated version (as of 9July 1999) is
attached to this document.
Croatia had never conside red themandator y quality certification system as a form of import
licensing regime and quality control system hasnever operated like a prior precondition for
importation into the Croatian customs territory. Furthe rmore , following the adoption of the new Law
on State Inspectorate, quality controls on imported items prior to customs clearance has been
completely abolished. The State Inspectorate would perform quality controls on certain imported and
domestic produ cts at the wholesale an d retail level.
From the date of its first adoption, the Decision of Goods subject to Impo rt and Export
License Regime, was amend ed several times during the past 3 years (Official Gazette Numbers:
58/96, 67/96, 15/97, 95/97, 132/98, 8/99 and 15/99) with the aim to minim ize the volume of good s
subject to license r egime and to en sure that licenses a re iss ued o n an a utomatic basis.
The machine ry for cleaning or drying bottles and dishwa shing machines is no longe r subject
to license regime according to the latest amendments of the Decision, the Decision of Good s subject
to Import and Exp ort Licens e Regime which would be pu blished in the next cou ple of we eks.
Croatia accepts the proposed wording of para 72 and 72bis above to be includ ed in the
Working Party Repo rt, although we can not agree to the statement that Croatia has historically
extensively use d quotas, licen ses and othe r qua ntitative restrictions.
Namely, Croatia's administrative history is very short and started only in 1991 when Croatia
became independe nt. The restrictive trade regime that existed at that time was inherited from the
forme r Yugoslavia. Croatia had over thepast years dismantled that regime and brought it in full
compliance with the WTO. Since July 1996, Croatia hasabolished import quotas and quantitative
restrictions on imports for all products. As explained above Croatia had amended its licensing regime
and br ought it in compliance with the WTO rules. Conse quently, it would be difficult to argue that the
extensive use of measures described above has been part of Croatia' s trade regime or intended to
restrict trade th rough their u se.
(h) Customs valuation
Question 15.
Please confirm in the Working Party repo rt that the curr ency rates “duly published” as
provided for in Article 46 of the Customs Law are published in Croa tia, and indicate in which
publication they can b e fou nd.
Reply:
The currency rates “duly published” as provided in Article 46 of the Customs Law are fixed
in accor danc e with the provisions of the Law on Foreign Exchange Operations and is set and
published by the Croatian National Bank (the central bank). The currency rates are published in the
daily newspape rs, the C roatian National Bank of ficial newsletter and are available on the Intern et.
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Question 16.
We appr eciate C roatia’ s commitment and the pledge to implement this very impor tant aspect of
WTO provisions by July 1999 .
Our examination of the new legislation and regulations indicat ed that most of the legal
requirement s of the WTO Customs Valuation Agreement have been enacted. With the chan ges
reques ted below in place, we look forwa rd to the implementation of these provisions on the
accelera ted ba sis outlined by Cro atia in WT/ACC/HR V/51.
Para 83 : The commitment in this pa ragraph is consis tent with our r eques ts.
We have examined the“Customs regulation s Determining for the Determining the Valuation
according to the Law of the Republic of Croatia (Articles 29 to 48). We have the following
comments on these regulations, focusing on areas where it is possible that they have not met
WTO requirement s. We would like to make the following points:
Croatia uses the term “cus toms valuation “ in its translation of the regulations when discussing
the “ trans action value “ valuation meth od. It is important that these terms notbe confu sed.
“Customs valuation “can mean any one of many differen t types of valua tion, including
“trans action value”. Examples of this occur in Note to article 38, para, item c, # 2; in Note to
Article 39, para 1 item d; and in Note to Article 40, item 2. Could Croa tia clarify the use of
“customs valuation” in the se inst ance s?
Reply:
Please note that the majority of the comments and remar ks made relate actually to the
translation of the Croatian text to English and that with amendments in the attached new version of
the dra ft Regulation, compliance with the WTO agre ements ha s bee n achiev ed.
We agreewith your rema rks.The misunde rstanding is due to the translation and it has been
corrected in the attache d version of the draft Regulation. Be assured that Croatia understan ds and uses
both of these terms in the same way as the member s. The use of the term "customs valuation" in the
enumerated examples has be en replac ed by the correct u se of the term "trans action value".
Question 17.
In the regulations conce rning the adjus tment s tothe price actually paid or payable in
determining transaction value, Croa tia states that additions are included in the price paid or
payable. This is technically incorr ectvis-a -vis the Agre ement, where these additions, i.e.,
royalties, packing, goods and services/as sists, etc., areto be added to the price actually paid or
payable in determining transaction value. An example of this occur s in the Note to article 38,
para 1 item c, #2, last sentence. This sentence says, “ If only one of three abov e mentioned
conditions has not been fulfilled, the cost of royalties andlicense fees shall not be included in the
price actually paid or payable." Thes e provisions and any others like them, throughou t the
Regulations should be modified t o con form th e regula tions with the WTO Agreemen t.
Reply:
We ha ve deleted the la st sentenc e in the Note to article 38, pa ra 1 item c, #2, c) in the attach ed
new version of the draft Regulation. This has been a mistake in the previous version. The Article 38
of the Customs Law clearly states that royalties and license fees related to the goods being valued are
added to the price actually paid or payable in determining transaction value. Therefore, we do have
WT/ACC/HR V/54
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the same und erstan ding of the p rovisions of the Ag reement an d the provisions of the Regulations have
been ame nded in that sen se.
Question 18.
Note toArticle 38, para 1, item a, indent 1,#1 excludes buying commissions from the price paid
or payable. Article 8 of the Agreemen t, howev er, exclud es them from being added to theprice
paid or payable to create transaction value. That p oint should be clarified in the r egulations.
Reply:
In the Note to article 38, para 1 item a, #1, the first sentenc e has been amend ed asfollows: "
When d etermining the transa ction value of imported good s it will be neces sary to include in that value
commissions and b rokerage incur red b y the buy er, except bu ying commissions".
Question 19.
Note toArticle 41, #3,2ndparagraph , appea rs to permit the use of “valid prices lists” tovalue
imported goods under Article 7 of the WTO Valuation Agreemen t. The use of prices lists,
whether valid or not, is a form of minimum valuation which is a prohibited method of valuation
under the Agre ement. We urgently seek the remov al of this paragr aph from the regulations and
confirmation from Croatia in the Working Party repo rt that it will not use any form of price
lists to value import s after acc ession.
Reply:
The Article 37 of the Customs Law stipulates that no customs value shall be determined on
the basis ofminimum customs values and this was confirmed in previous Croatian answers. In this
case the Note to Article 41, #3,2ndparagraph has been changed in the attached latest version of the
Regulation and Croatia can confirm in the Working Party Report that it will not use any form of price
lists to value imports after ac cession.
The pa ragraph in qu estion was related to the treatment of rented or leased goods andhad been
taken from the Study 2.1 of the Technical Committee on Customs Valuation of the WCO wher e the
same wording is stipulated under p oint 8.
Question 20.
The Note to Article 43, #3 and #4, concern s thevaluation ofcarrier media bearing data or
instructions for data proce ssing equipment. #3 states that sending softwar e by ground telephone
or satellite is not subject tocustoms clearance, i.e., valuation, noting WCO statemen ts and the
inabil ity to classif y under the HS. #4, howeve r, states an excep tion where the software
trans ferred shall be the customs value of the goods where the software contains engine ering,
development, artwork, design, plans and sketches , drawings, and similar material which meet
the definition of a good s or service/ assist pursuan t toArticle 8 of the WTO Agre ement. #4
contradic t #3, therefore, and creates oppor tunity for confusion and dispute. We also question
whether this provision c an be administer ed, and we r ecommended it s remov al.
Reply:
The note to Article 43, #4 has been deleted in the attached latest version of thedraft
Regulation.
Question 21.
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The note to Article 44, #1, provides that, in 2 “extreme” cases, the importe r shall have the right
to commence an appeal to the Administrative Cour t. Article 11 of the WTO Valuation
agreemen t provide s that a party liable forthe payment of duty shall have the right of appeal,
without penalty, conce rning the determination of customs value. This right is not to be
restricted to “extreme” cases. The word “extreme” should urgen tly be remov ed from the
regulations, and this section of the regula tions clarified to ensu re that the right of appeal is free
and automatic. (Earlier in therepo rt, we sough t clarification of the automatic right of appeal to
the Administrative Court in all maters cove red by WTO. It should be freely granted. If this is
not so, we will need to seek additional legislation from Croa tia that would make it so) .
Reply:
The Article 11 of the WTO Valuation Agreement has been incorporated in article 44 of the
Customs Law and is in full compliance with the Agreeme nt. In the previous version of the Regulation
there was a mistake in the translation of the Note to article 44. Namely instead of the correct term "in
the final instance" the term "in extreme cases" has been used. We would like to stress that the
importer or any other persons liable for the payment of theduty hasthe right of appeal in regards to
the determination of customs value, without penalty to the Customs Directorate of Croatia and to the
Administrative court (HAC). This is in accordance with the answe r provided under the section "Right
of Appeal".
Namely as stated in that answe r, for all WTO issue s the right ofappeal against a decision or
act of anadministrative body can be automatically lodged with the HAC, except in customs and tax
issues. In such cases the first complaint (or appeal) against an act or decision issued by the lower
administrative body (customs office or local tax authority), should be lodged to centr al customs or tax
authorities (The Customs Dire ctorate a nd the Tax Dir ectorate o f the Ministry of Finan ce).
If the tra der is not satisfied with the ruling made by the c entral autho rities, he can automatically file an
appeal to the HAC.
Question 22.
The section of the regulations conce rning “Data preservation and documen ts tobe submit ted “
establishes procedures for the use of the useof a DVC ordeclara tion on the customs value. The
technical Committee on Cu stoms valuation recently concluded that the use of such forms should
be tempora ry, on a short term basis while risk managemen t and post-impor tation audit systems
are developed and established within the Customs Administration. If Croatia is to use such a
system, it should be for only a limited period oftime. We seek confirmation of this in the
Working Party report and approp riate change s to the regulations that will make clear the
temporar y natu re of this mea sure.
Reply:
The provisions related to the data preservation and documents to besubmitted have been
deleted from the draft Regulation (pleas e refer to the attachment). The Declar ation on the customs
value (DCV) is f ully in compliance with the WTO Valuation Agreement and is similar to the one used
in the Europea n Union and other WCO membe rs. That DCV has been communicated to the Technical
Commi ttee for Customs Valuation of the WCO, and has been published and transmitted to other
WCO members. If and when the Tech nical Commit tee decides that the DCV would cease to be used,
Croatia shall acco rdingly acc ept suc h decision.
Question 23.
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The Interpre tative Note to Article 9 of the WTO Customs Valuation Agreement, defining the
term “time o f importation”, appear s to be missing fr om the r egulations and should be included.
Reply:
Based on the provision s stipulated in article 46 of the Cu stoms Law, the time of importation is
the day ofoccu rrence of the obligation to pay customs duty. The obligation to pay customs duty
begins at the time of acceptanc e of thecustoms declar ation by which the good s are released in free
circulation (on the ma rket).
(i) Other cu stoms formalities
Question 24.
We have recently received additional material from Croa tia relating tocross-bord er issue s that
we are e valuating. We will have fur ther comment s after our r eview.
We appr eciate the explanations contained in WT/ACC/HRV /51, and Croatia’ s efforts over the
last yea r to regularize it s treatmen t of trade with Bosnia and He rzegovina.
Whethe r or not Croatia and Bosnia and Herzegovina nego tiate a free trade area, we expect that
Croatia’s treatmen t of impor ts from all parts of that count ry will correspond to its WTO
obligations, and that imports will receive equal treatment as provided for in Article I of the
GATT. We would like this statemen t included in the working pa rty text.
Reply:
As previously confirme d and in particular in the reply to question 16 in WT/ACC/HRV/51
Croatia applies MFN trade to the whole ofBosnia and Herzegovina as from 15 May 1999. Therefore,
we can a ccept s uch a statement propo sed above, as follows:
"He confirmed that whether or not Croatia and Bosnia and Herzegovina conclude a FTA,
Croatia's treatment of imports from all parts of Bosnia and Herzegovina will correspo nd to its WTO
obligations, and that imports wil l receive eq ual treatment as p rovided for in Article I of the GATT."
(k) Application of internal tax es on imports
Question 25.
We appr eciate C roatia’ s work on tax is sues.
We note that the commitment paragraph has been revised to remove reference to MFN
treatment. We pr opose including re ference to Ar ticle I as w ell as Article II I in the c ommitment.
We would like to seeCroatia ’s confirmation in respo nse to Ques tion 13 in HRV/51, that it levies
only customs tariffs, VAT, and e xcise taxes on imports, recorded in par a 63.
Para 64: The commitment in this paragraph is consis tent with our reques ts, excep t with respect
to th e MFN issue identified.
Reply:
WT/ACC/HR V/54
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Croatia accepts that the commitment paragrap h include reference to both Article I and
Article III. We also agree that the confirmation in respon se to question 13 in WT/ACC/HRV/51 is
recorded in p ara63.
Question 26.
This paragraph app ears to duplicat e para 72 to some e xtent. One o f them should be eliminated.
Reply:
Croatia agr ees to delete p ara73 of the Wo rking Pa rty Repo rt.
(l) Rules of origin
Question 27.
We sugg estthat “Rules of Origin” be given a separat e subheading so that the“bord er control
issue” can b e treated se para tely.
We not e in para 88 , Croa tia indicates that it s rules of origin will be available at the end o f Jun e.
We have reviewed the draft Decr ee on rules of origin and procedure for issue of certifica te of
origin recen tly provided by Croatia. Wha t is the relationship of this propos al to the regulations
promised in the dra ft Working Par ty repor t?
Reply:
The Decr ee onRules ofOrigin and Procedure for Issue of Certificate of Origin was adopted
on June 24 with certain changes in relationship with the Draft Decr ee. Please find enclose d the final
text of the Decr ee.
Question 28.
We do not see that the draft decree submitt ed tothe WTO Secr etariat addr esses the
requirement s of Article 2(h) and Annex II, parag raph 3(d), i.e., that for both non-prefer ential
and preferen tial rules of origin, the customs autho rity will provide upon reques t an assessmen t
of the origin of the import and outline the terms under which it will be provided. Can Croa tia
indicate where that aspect of the WTO Agre ement on Rules of Origin is located in its laws?
Reply:
The Article 17 of the Decree on Rules of Origin and Procedure for Issue of Certificate of
Origin addres sesthe requirements of Article 2 (h) as well as the requirements of Anne x II, paragraph
3. (d), i. e. that Article refers to both, non-p referential and preferential rules of origin and coversall
aspects of the a bove me ntioned articles of the WTO Agr eement on Rules of Origin.
Question 29.
The treatment of this issue in paras 84 and 85 of WT/ACC/SPEC/ HRV /7/Add. 1 and the
commitment in para 87 do no t add ress our c once rns.
In addition, we look fo rward t o seeing the regulations that Croatia ha s promised in dra ft.
Para 87 : We seek revision of this commitment along the following lines:
87. The representative ofCroatia confirmed that Croatia would remedy any depa rtures from
full conformity with the WTO Agre ement on Rules of Origin prior toits accession , and that by
WT/ACC/HR V/54
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that time, Croatia’ s application of rules of origin for both MFN and preferential trade would be
administered in confo rmity with the provisions of theAgre ement. Croatia would adopt the
Harmonized Rules of Origin once finalized by the WTO in co-operation with the World
Customs Organiza tion.
87 bis. The representative ofCroatia confirmed that from the date ofaccession its laws and
regulations on rules of origin would be in conformity with the provisions of the Agreemen t. In
this regard, the requir ements of Article 2(1) and Annex II, paragraph 3(d), i.e., that for non –
prefe rential and preferen tial rules of origin, respe ctively, its customs auth ority or preshipment
inspection auth ority acting on itsbehalf will provide upon reque st an assessmen t of the origin of
the import and outline the terms under which it will be provided. The Working Party took note
of this c ommitment.
Reply:
Croatia acce pts the pro posed revision of p ara 87.
(o) Safegua rd regime
Question 30.
We do not believe that the draftamendments to the law on Trad e meet the requiremen ts of the
Agreement s on Sa fegua rds, Antidumping, and Subsidies and Coun tervailing Duties.
Para 98: We wish the textin para 93 removed in therevision of WT/ACC/SPEC/ HRV/7 to be
restored, and tha t the commitment t ext will be as f ollows:
98. The representative ofCroatia said that Croatia would not apply any anti-dumping,
counte rvailing or safeguard measure until it had notified and implemented appropriat e laws in
conformity with the pr ovisions of the WTO Agreemen ts on the Implement ation ofArticle VI, on
Subsidies and Counte rvailing Measur es, and on Safe guard s. In the elabo ration o f any legislation
concerning anti-dumping duties, counte rvailing duties and safeguards. Croatia would ensu re
their full confo rmity with the relevan t WTO provisions, including Article VI, and the
Agreement on Subsidies and Coun tervailing Measure s and the Agre ement on Safeguards . After
such legislation was implemented, Croa tia would only apply any anti-dumping duties,
counte rvailing duties and safegua rd measu res in full conformity with the relevan t WTO
provisions. The Wo rking Par ty to ok not e of these commitments .
Reply:
Croatia accepts that the text in para 98 (not 93) of theWorking Party Report be restored and
that it reads as p roposed a bove.
2. Export Regula tion
(b) Customs ta riff nomen clatur e
Question 31.
Per Croa tia’s statement s in WT/ACC/HR V/51, we suggest that para 99 be expanded to include
information that the expor t taxes on hides and skins have also been removed, and that Croa tia
intends to apply any such measur es, should they be applied or re-applied in the futu re, in a non-
discriminatory fa shion and in confo rmity with WTO provisions.
Reply:
WT/ACC/HR V/54
Page 25
Para 99 could not beexpa nded with the information that the expo rt taxes have been removed
becau se of the fact that, as stated in previous answe rs, Croatia has never applied export taxes on hides
and skins.  C roatia ac cepts  the second pa rt of the p ropos al.
Question 32.
We remain confused as to the relevan ce of Article XI in this discussion, and would appreciat e a
less cryp tic reference in para 99, e.g., that such taxes would not be used to restrict export
quantities.
Reply:
Croatia agr ees that the pa ra 99 be redrafted .
(c) Quantitative e xpor t restrictions
Question 33.
While we applaud Croatia’s elimination of expor t restrictions earlier this year, in para 101
Croatia defends its earlier use of expo rt quotas on corn , wood, raw leather, glass, and
newspaper waste “ for the purpos e of protecting non-re newable natural resourc es “. This would
not appea r tobe con sistent with th e spirit or letter of Article XI o f the GATT.
As a cons equenc e, we seek recognition in the commitment in para 104 that the earlier
restrictions a re gon e and that the pr ovisions of A rticle XI ar e relev ant, a s follows:
Para 104 104. The repr esentative of Croatia confi rmed that Croa tia had eliminated all export
quotas, bans and other forms of quan titative expo rt restrictions as of 1 Janua ry 1999, and said
that form the date ofaccession export restrictions would only be imposed in confo rmity with
relevant p rovisions o f WTO Agre ements, including Article XI of the GATT. The Working party
took no te of this c ommitment.
Reply:
Croatia accepts the abov e-proposed commitments to be included in para 104 of theWorking
Party Repo rt.
Export sub sidies
Para 107 : The commitment in this parag raph is con sisten t with our reque st.
3. Intern al polices af fecting trad e in goods
(a) Industrial policy, including subsidies
Question 34.
From Croatia’ s statemen ts in WT/ACC/HRV /49), it would appear that the Gove rnment make s
direct financial trans fers to maintain operation and promot e produc tion of “chos en entities” in
the indust rial and shipbuilding sectors. This aid is intend ed to ameliora te the impact of war
damage and other adverse circums tances faced bythese firms. It also is stated that most of the
companies receiving the aid have substantial State ownership and large employment bases.
WT/ACC/HR V/54
Page 26
Croatia states that this suppor t is intended to preserve employment and not intended to
promote e xpor ts, and p resumably none of it is dire ctly tied to expor ts.
It is likely, however, that these firms produc e for expo rt, and itis most likely that Croatia ’s
subsidies have a ffected trade.
It is importan t to bear in mind that subsidies tocover operating losses in certain circums tances
and subsidies provided for the direct forgiven ess of debt are both conside r to be“dar k amber”
subsidies giving rise to rebu ttable pr esumptions o f serious pr ejudice.
The Subsidy Agreemen t charges members to avoid providing such subsidies, and we are
anxious to have informa tion from Croatia on its over all timetable for eliminating such support s,
and, in the interim, how Croatia intends to limit such subsides and phas e them out over this
period, as no ted in WT/ACC/HRV /51.
We appr eciate Croatia’ s commitment, in para 110 ofthe draft Working Party repor t, to
observ e theprovisions of the Agre ement. We urge Croa tia to establish as soon as possible a
fixed sch edule for eliminating these sub sidies.
Para 100 : The commitment in this p aragr aph is consis tent with our r eques ts.
Reply:
As already explained in WT/ACC/HRV /49, the purpose of the measures undertaken in some
of the industrial sectors and shipbuilding companies is not aiming at enfor cing their domestic or
international competitiveness, but at cre ating basis fo r normal busines s activity after the completion of
rehabilitation and restru cturing pr ocess.
The need for this type of rehabilitat ion is absolutely due to the significant direct or indirect
war damag e during theaggression against Croatia suffered by many compa nies which were not able
to solve the emerg ed problems with their own res ources.
Most of these comp anies are predominantly in State ownership with a big number of
employees and of special importance for certain regions and local communities, becau se in many
cases they a re the only indust ry in a p articular r egion and there areno intere sted potential buyer s.
Befor e their privatization, which is the final goal of the Gove rnment policy and as there has been a
lack of foreign direct investment, the Croatian Government was forced to intervene with direct
transf ers in order to, at least up to a certain point, preserve the level of employment and to avoid a
number of bankruptcies which would cause social tensions with unknown consequences. Therefore,
the measur es undertak en have not being in case prepared with the aim of creating seriou s prejudice to
foreign indu stries an d this can b e obs erved from the info rmation in WT/ACC/HR V/49.
Croatia has already committed itself not to main tain or introduced prohibited subsidies within
the meaning of Article 3 of the SCM Agreement. Therefore, it is Croatia’s assessment that the abov e
mentioned subsidies are not prohibited. In addition, Croatia would notify its subsidy program in
accordance with Article 25 of the SCM Agreement to the Committee on SCM for examination upon
accession. With regard to the subsidies referredto in the member' s question, there are as already
noted, tempora ry by nature and related to the trans formation of the economy, restructu ring and
privatization. Being an economy in transition or transform ation into a market economy and ifthe
examination of the Committee on SCM finds that Croatia should adapt relevant parts ofits subsidy
progr am, Croatia would do so by observing the provisions ofArticle 29 of the SCM Agre ement and
the period stipulate therein.
(c) Sanitary and phy tosanitary mea sures
WT/ACC/HR V/54
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Standards and ce rtifica tion
Question 35.
We have reviewed the information provided onnew laws and decrees addr essing the issue of
conformity with WTO Agreement s on TBT and SPS.
We applaud the steps Croa tia has undertaken to codify the procedure s intended to meet its
WTO TBT obligations. Croatia appear s to be t aking the right s teps to mee t its commitments.
Unfortuna tely, the material cited by Croatia in WT/ACC/HR V/51 is the same material in the
draft Working Party repor t that raises the question as to whether thelaws and regula tions
proposed by Croa tia has actually changed its current WTO inconsist ent quality certification
system to bring it into conformity with, inter alia, the Agr eement s on TBT and SPS.
We have a number of remaining ques tions and conce rns for which we seek clarifica tion from
Croatia. The additional information will enable us to better assess the consisten cy of Croa tia’s
TBT regime with all TBT comm itments.
The Working Party report notes that, “Croatia ’s implementing regulations would include a
checklist o f points add ressing the is sues regulat ed in the TBT and SPS Agr eemen ts.
We would apprecia te if Croatia would provide promp tly this checklist to interested Membe rs –
in draft form if no t final yet -with th e spe cific legal ref erences n oted.
Reply:
The TBT-SPS check list, which has alread y been submitted to members in the last week of
June is attache d to this document. We urge the Working Party member s to recognize the fact that
Croatia has substantially changed its quality certification system. Namely, by adoption ofthe new
Law on State Inspector ate, the quality control system is no longer performed at the border, but at the
wholesale and retail sale points. This fact enable us to decla re that this system has been brought in
confo rmity with the WTO TBT and SPS Agr eements.
Question 36.
The Working Party report language on the Standa rdization Laws raises questions about
accura cy. The paragraph notes that the new Law expre ssly mandate s new standa rds be based
on interna tional or regional standard s where available. A review of the actual legislation
(Article 9 (3)) howeve r, does not appea r to establish such a preferenc e for inter national
standard s (or regional standa rds) over national st andard s.
We seek a clarifica tion from Croatia for the appa rent discrepan cy between the languag e in the
Standardiza tion Law and the Working Pa rty repor t.
Likewise, the Stand ardization Law does not appea r to stipulate a 30-da y period for public
comment on dra ft stand ards—as the Wo rking Par ty rep ort specifie s in paragra ph 112.
We would apprecia te clarifica tion fo r where such a p rovision is codified.
Reply:
WT/ACC/HR V/54
Page 28
Croatian Standar dization Law has been adopted in 1996. Since than Croatia has adopted
1,332 stand ards among which 1,330 were transpo sed intern ational standard s, and only 2 were
Croatian national standar ds. This shows very clearly which standards have preference in Croatia
despite that provisions of Article 9 (3) ofthe Standa rdization Law does not highlight precisely the
above mentioned fact.
Concerning the rema rk that the Standa rdization Law does not stipulate a 30-da y period for
public comment on draft standa rds, we would like to draw your attention to the Rules for Preparation,
Adopting and Is suing of C roatian Standa rds, which w as provided to the Working Party andwher e that
obligation is stipula ted.
Question 37.
We note that the “Regulation onProc edure s for the Adoption of Regulations for Basic
Requirements for Good s, Proc esses and Service s” requires fees char ged for conformity
asses sment procedu res be equal for domes tic and import ed produc ts (Article VII). We note,
however, that the legislation do es no t appea r torequire su ch fees be c ost-based.
We requ estclarification on how such confo rmity assessmen t fees refle ct the cost of service s
render ed.
Reply:
It is true that this legislation does not stipulate that such fees should be cost-bas ed. Howev er,
we take a commitment that future legislation concer ning the fees charged for conformity assessment
proce dures sh all be cost-b ased to cove r only co sts of services rendered.
Question 38.
Please confirm that the “Regulation on Procedur es for the Adop tion of Regulations for Basic
requirement s for Goods, p rocesses and Se rvices” h as be en adop ted and is in e ffect.
Reply:
This legislation has been adopted by theCroatian Gover nment on 27 May 1999 as the
Governmental Decision on the Procedures for the Adoption of Regulations on Basic Requir ements for
Goods, Pro cesses and Se rvice s and is in e ffect from mid June 199 9.
Question 39.
We do no t find th e exc erpt from the n ew Law on Sta te In spectorate u seful and would appreciat e
receiving th e Law itself.
Reply:
We would submit an English cop y of the L aw by mid July 1999 .
Question 40.
The Working Party report language on these issues is too long, internally contradic tory and not
helpful in addressing th e key issu es.
Para 121: The commitment in this parag raph is consis tent with our reque sts. Howe ver, we
reserve on this se ction pending r eview of the TBT ch ecklist, which we have only jus t received.
WT/ACC/HR V/54
Page 29
We do not under stand the need to redraft the commitment for SPS compliance that was in the
previous version ofthe Working Party repor t. The draft is not useful and we would sugge st
revision, as follows:
Para 134: 134. The representative ofCroatia confirmed that Croatia’ s sanita ry and
phytosanita ry standa rds system would be in compliance with WTO provisions under that
Agreement on theApplication of sanit ary and Phytosanitary Measures as of the date of
acces sion to the WTO, and that Croa tia would apply the Agre ement on the Application of
Sanitary and Phytosanitary measures from the date of accession without recour se toany
transition pe riod. The Wor king part y took note of this commitment.
Reply:
Croatia acce pts the re vision of p ara 134 a s proposed abo ve.
(d) Trade – r elated inve stment measur es
Para 136 :    The commitment in this parag raph is con sisten t with our re quests.
(e) State trading p ractices
Question 41.
We appr eciate Croatia’ s commitment to notify its State trading enterprise s, identified in para
144.
Has there been any progress on the issue of “private monopolies” since the last meeting? If not,
we would appreciate a statemen t form Croa tia in the Working Party repo rt confirming that the
governmen t does not grant monop olistic trading rights in good s or service s toany firm, other
than tho se no tified, so that this issue can be put to res t.
Para 145 : The commitment in this p aragr aph is consis tent with our r eques ts.
Reply:
With regard to the issue of "private mono polies" that has been raised by a particular member
without being based on any actual fact, we believe that the Croatian delegation hasclearly explained
and stated that there is no such a categor y in law or in practice in Croatia. Therefore, in order to put
this issue to rest, Croatia accepts the proposal above and agrees to confirm in the Working Party
Report that the Governme nt does not grant monopolistic trading rights in good s or services to any
firm, other than thos e notified.
(g) Free e conomic zone s
Para 147 :   The c ommitment in this parag raph is con sisten t with our reque sts.
(l) Government pr ocur ement
Question 42.
We appr eciate the addition o f a da te in th e commitment in this s ection
Para 155 :  The c ommitment in this parag raph is consis tent with our reque sts.
Transit
WT/ACC/HR V/54
Page 30
Question 43.
We thank Croatia for the additional informa tion and for its assuran ces as reflec ted in
WT/ACC/ HRV /51 and the r evised Dra ft Working Par ty repor t.
Para 159 : The commitment in this p aragr aph is consis tent with our r eques ts.
4. Policies affe cting fo reign tr ade in agricultu ral produc ts
We re serve pending r esolution o f out standing issu es in market access.
5. Policies affe cting fo reign tr ade in oth er sectors
Trade in civil aircraft
Para 168 : The commitment in this p aragr aph is consis tent with our r eques ts.
V. TRADE-RELATE D INTELLEC TUAL PROP ERTY RE GIME
Question 44.
We thank Croatia for the information provided in WT/ACC/HRV /51. Clearly Croatia has
worked hard to develop and enact the necessary legal structure toimplement the WTO
Agreement to TRIPS. We have noted, howev er, some aspe cts of curr ent enforcement that are
troublesome, and we seek Croa tia’s attention to these issues in the context of itsaccession to the
WTO.
We would apprecia te Croa tia’s response to these issues as soon as possible, so thatwe can agree
that Croatia will implement TRIPS upon date of accession. Pending agreement on these points,
we rese rve on this s ection.
Para 202 : the commitment in this par agraph is consist ent with ou r requ ests.
There appe ars to be a major lack of enforcemen t conc erning the piracy of computer software
(TRIPS Art. 4 1). We unders tand tha t none of Croatia’ s law enforcemen t bodies that would have
this responsibility have under taken active efforts todeal with the problem. Neither the Police
nor the Financial Police have been willing to conduct raids to stamp out this piracy, and we
underst and tha t the Sta te Inspe ctorate has, a s yet, no au thorit y to conduc t raids.
Reply:
With regard to the concerns raised in the question and comment above, wewould like to state
our assessment that the circumstanc es in the Repu blic of Croatia relating to the enforcement of rights
provided for by the TRIPS Agreeme nt do not appear to be troublesome to the extent sugg ested,
having in mind the expre ssed commitment of Croatia to protect IPR through legislation and
enforcement. In that respect all competent institut ions (Ministry of Interior - Police, State Attorney
Offices and courts) are taking on a regular basis all necessary measures for the protection of such
rights. With the new Law on State Inspectorate that institution is given the authority to combat
computer piracy and shall cond uct anti-piracy raids. Croatia’s futur e WTO membe rship shall
substantially contribute to a more vigor ous and efficient TRIPS enforcement in all aspects of TRIPS
obligations stemming from the WTO Agre ements.
WT/ACC/HR V/54
Page 31
With regard to piracy of computer softwar e, since thePenal Law of the Repu blic of Croatia
came into force (1 January 1998 ) the police has carried out a numbe r of actions and has seize d a
number of pirated softwar e andbrought a numbe r ofcriminal charges which areunder proced ure
before the State Attorney Offices. Data on these actions have already been provided by Croatia on
several occasions in previous answe rs. Croatian institutions have expressed their readine ss to work
with producer s and owner s of computer softwar e rights, such as the Busine ss software Alliance-BSA
(including MICROSOFT) onthis issues and meetings are being held with Croatian officials in order
to enhanc e this coope ration on comb ating piracy.
Question 45.
There appe ars to be an absen ce of clear civil ex parte search provisions in the law (TRIPS Art.
50).
Reply:
The Croatian Enforcement Law contains gene ral provisions concerning civil ex parte search
provisions (TRIPS Art. 50 ), as follows:
Article 293, para graph 1 o f the Law on E nforceme nt provides for:
"The provisional meas ure may be proposed before the institution and during the court or
administrative procedu re and after the termination of those procedures, and until the enfor cement is
carried out.”
However, in o rder to avoid any possible misunde rstanding s all laws which relate to the TRIPS
provisions (the Patent Law, the Tradema rk Law, the Industrial Design Law, the Law on Geographical
Indications and theCopyright Law) stipulate the kind of provisional measu res from Art. 50 of the
TRIPS.
Particular laws in the field of intellectual property have prescribed the kinds of provisional
measur es, as follows:
Article 79 of the Patent Law p rovides for:
(1) The action may contain a request for ordering, before the court decision comes into effect, a
provisional measu re comprising:
(a) the ref raining f rom actions inf ringing a patent o r actions that might infringe a p atent,
(b) the seizur e or exclusion from circulation respectively of products resulting from or
acquired by the infringement of a patent and of articles (implements and tools)
predominantly used in the creation of p roducts inf ringing a p atent,
(c) the pres ervation of eviden ce.
(2) Subject to the provision r eferred to in paragraph (1) of this Article, the propo sal for or dering a
provisional measu re may be filed even before the action, provide d that the action is broug ht within 15
days a s from the day of filing a propos al.
(3) If the re is a likelihood of ir reparable damage or likelihood that the later derivation ofevidenc e
on the infringement would bedifficult or impossible, the court shall order a provisional measu re
without previously notifying the other pa rty.
(4) To the matters concerning theordering of provisional measu res not regulated by this Law the
corresponding pro visions of the Law on En forcement sh all apply.
WT/ACC/HR V/54
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Article 53 of the Tr adema rk Law p rovides for:
(1) If the owner of a trade mark make s it likely that his right has been infringe d or that there is a
likelihood of infringement of his right which might cause the irreparable harm, may requir e from the
court:
(a) to order provisional measures of the prohibition of acts infringing the rights of the
owner o f a tra demar k;
(b) provisional seizu re of articles unlawfully designated by a trademark or the exclusion
thereof from circulation;
(c) measur es concerning the assurance of evidenc e concerning articles unlawf ully
designated by a trad emark a nd mea sures for p reserving the existing situation.
(2) The owner of a trade mark may require the ordering of provisional measures even before the
institu tion of an action, provid ed that he institutes an action within 20 working days or 31 calend ar
days, whiche ver expire s later.
(3) If the owner of a trademar k does not institute an action within the time limit referr ed to in
parag raph 2 ofthis Article, the court may, on the defendant’s reque st, suspend the procedure and lift
the requir ed meas ures.
Article 52 of the In dustrial Design Law p rovides for:
(1) If the holde r of industrial design right makes it likely that his right has been infringed or that
there is a likelihood infringement of his right which might cause an irreparable harm, he may require
from the co urt:
(a) the ordering of a provisional measu re of the prohibition of acts infringing the right of
the industrial design holder;
(b) provisional seizu re of articles which unlawfully embody, make or essentially imitate
the industrial design, or their exclusion from cir culation;
(c) measur es aimed at providing eviden ce on the articles referred to in the previous
subpa ragraph o f this pa ragra ph and mea sures aimed at maintaining the existing state.
(2) The holder of industrial design right may require the ordering of provisional measur es even
before instituting an action, provided that the action be instituted within 20 working days or 31
calenda r day s, whichev er ex pires late r.
(3) If the holder of industrial design does not institute an action within the time limit referre d to in
parag raph 2 ofthis Article, the court may, on the defendant’s reque st, suspend the procedure and lift
the requir ed meas ures.
Article 30 of the Law on Ge ographical Indic ations provide s for:
(1) Any interested person may bring charges for the protection of rights in the proce dure before the
competent Commercial Court in the Republic of Croatia against a person who infringes any right
referred to in Article 25 of this Law, requiring:
(a) establishment of the infringem ent of a right
(b) prohibition or prev ention of the inf ringement of a right
(c) compensation f or damageWT/ACC/HR V/54
Page 33
(d) seizure of the products which are made or put into circulation for the purpose of
infringing rights and the seizu re of equipment used directly for the production of such
products;
(e) submission of the infringe r’s documentation relating to the unautho rized use of
geogr aphical indications on products, or otherwise for the purposes of evaluation of
the damage.
(f) enforcement for the purpose of prohibition or prevention of the infringement of
rights, and particularly the enforcement concerning the destr uction of products or
equipment ref erred to in sub paragraph 4 o f this Article,
(g) publication of the cou rt decision on the expen se of the de fendant.
(2) The court shall deal with the disputes arising from the infringement of rights referred to in Article
25 of this Law in the ur gent pro cedu re.
Article 97 of the Copy right Law provide s for:
"On the proposal of the autho r, orother copy right holder, or their association respectively, whereby it
is made likely that the concern ed copyright was infringed or that the infringeme nt is imminent, the
court may o rder:
(1) The provisional seizur e orwithdrawal from circulation of articles or means respectively,
infringing the copy right, or used for the infringement thereof,or which res ulted from the infringement
of the cop yright, or which ma y be u sed as evide nce o f the inf ringement there of;
(2) The prohibition of the continuation of activities already started that would infringe copy right or
the prohibition of the continuation of a ctivit ies infringing it.
If there is a risk that the later provision of evidence on infringement of copy right could be
difficult or impossible, or if there is a risk of irreparable damag e, or if there is a risk that the
provisional measu res laid down in paragraph 1 of this Article would not be effective, he court shall
order suc h meas ures, without the prior notification of the othe r party to that effe ct.
The pro cedu re concerning the p roposal fo r ord ering p rovisional meas ures shall be urge nt.
The corresponding provisions of the Law on Enfo rcement shall be applied to any matter
conce rning the o rdering of provisional meas ures, not r egulated by this Law ”.
The identical provision is contained in Article 119, paragraph 3 of the Copy right Law and
shall be applied to per formers, producers of pho nograms and broadcasting organiz ations.
Question 46.
Judicial proceedings designed to addre ss cases of pirac y are subject to extremely long delays as
a result o f institu tional delays and p rocedu ral hurdles (TRIPS Art. 4 1).
Reply:
The abov e mentioned statement is not clear , and Croatia believes that there is not real groun d
for such an assessment. Furthe rmore, judicial procee dings designed to address cases of piracy and
other violations of IPR areproceeded on urgent basis. Therefore, we quote Art. 303 of the law on
Enfor cement:
Article 303 of the Law on Enfo rceme nt provides for:
WT/ACC/HR V/54
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(1) The decision ordering a provisional meas ure shall also stipulate the duration of such meas ure, and
if the measur e has been ordered prior to the action is brought or prior to the institution of any other
proce dure - also the time limit within which the propose r of the assurance shall bring charges or a
propos al for the institut ion of other p rocedure, for the pu rpose of justifying the measu re.
(2) The court shall, on the proposal of the assurance propos er, extend the duration of theprovisional
measur e, provided that the circumstan ces unde r which such measure has been ordered have not
change d.
(3) The propos al referred to in paragraph 2 of this Article may be given only prior to expiration of the
period the p rovisional measu re has been o rdered for.
Proced ures con cerning the infring ement of intellectual prope rty rights shall be u rgent.
Question 47.
Concerning injunc tive relief : Does aright holder have to institu te legal proceedings in order to
seek injunc tive relief throu gh a temporar y restraining order? How long does it typically take
for a pa rty to receive injunctive relief unde r these circumstan ces?
Reply:
A right holder’s right to seek a tempora ry restraining order is not exclusively linked to
institu ting legal proceedings. He is entitled to seek a tempor ary restraining order before, during and
after termination of legal proceeding. The tempora ry restraining order is issue d by the Commer cial
Court, either with or without hearing the alleged injuro r. If the court decide s not to hear the alleged
injuror, then the order is issued within a 30 days period. If there is a hearing, then the procedure can
be prolong ed for several months.
Question 48.
Concerning civil judicial procedure s: Has Croatia amend ed its existing civil procedur e code to
conform with TRIPS r equirement s?
Reply:
From Croatia's point of view the provisions of the Law on Civil Proced ure fully comply with
the requir ements of the TRIPS Agreement, and, in that sense it appeared to be unnec essary to amend
the mentioned Law:
For ex ample:
a) Article 42 of the TRIPS Ag reement
Article 285 of the Law on Civil Procedur e pro vides for:
“Befo re fixing the preparato ry hearing the President of the Tribun al may demand the
defen dant to submit a response to the action, if, dueto the complexity of the dispute or to the numbe r
of claims contained therein, it would be appropriate that the defendant make a written declaration
conce rning the citations contained in the a ction.
A respon se to the action shall be submitted within the time limit fixed by President of the
Tribunal, but it shouldn’t be more than fiftee n days counting from the institution of the action.
WT/ACC/HR V/54
Page 35
Exceptionally, taking into consideration the circumstances of the case, this time limit may be even up
to 30 days.
The de fenda nt may re spond to a n action in the written form although it was not or dered by the
court.”
Article 89 of the Law on Civil Proced ureprovide s for:
“The parties may take actions in the procedu re in person, or through an attorney , but the court
may invite the party represented by the attorney to make a statement in person concerning the facts to
be established in the lawsuit.
The party represented by the attorney may always come before the court to make statements
apart f rom he r/his attorney.
Article 5 of the Law on Civil Procedu re provide s for:
“The court shall give the possibility to each party to make a statement conce rning the
requireme nts and allegations of the ad verse party.
Article 7 of the Law on Civil Procedu re provide s for:
“The parties shall state all the facts on which their requirements are based on and shall
propos e eviden ce for establishing such facts.
The court shall be autho rized to establish also thefacts not presented by the parties if the
results of thehearing and pre senting of evidenc e show that they seek to dispo se with the requir ements
with which they can not dispose of (Article 3, paragraph 3), but it shall not base its decision on the
facts c oncerning which the pa rties wer e not given the po ssibility of being hea rd.
Article 299 of Law on Civil Proce dure pro vides f or:
“Each party shall state all the facts necessary for thesubstantiation of its proposals, offer
evidence necessary for the establishment of its citations and make a decla ration conc erning the
citations and evidence offered by the adversary p arty.
Parties may pr esent new facts and o ffer new eviden ce du ring the entire main he aring.”
b) Article 43 of the TR IPS Agr eement
Article 220 of the Law on Civil Procedur e pro vides for:
“The evide nce to bepresented forthe purposes ofestablishing decisive facts shall be decided
by the cou rt”
Article 7 of the Law on Civil Procedu re provide s for:
The court shall be autho rized to establish also thefacts not presented by the parties if the
results of thehearing and pre senting of evidenc e show that they seek to dispo se with the requir ements
with which they can not dispose of (Article 3, paragraph 3), but it shall not base its decision on the
facts c oncerning which the pa rties wer e not given the po ssibility of being hea rd.
Article 233 of Law on Civil Proce dure pro vides f or:WT/ACC/HR V/54
Page 36
“When a party refers to the document and claim that is in the possession of the oppo sing
party, the co urt shall invite the said party to submit the document, giving it a time lim it to that effect.
The party shall not refuse to submit the document, if it has itself referred to that docume nt to
support its allegations, or if it concerns the document which it is, according to the Law, obliged to
submit or to show, or if the document, having regard to its content, is conside red to becommon to
both parties.
Wher e a party invited to submit a document denies being in its posse ssion, the court may
present evidenc e for the pu rposes of establishing su ch a fact.
The court shall, having regard to all circumstanc es, evaluate in its own discretion what is the
importance of thefact that the party possessing the docume nt refuse to observe the court decision
ordering it to submit the document, or contra ry to the conviction of the court denies thepossession of
the document.
The court decision referred to in paragraph 1 of this Article shall not be subject to a separate
appeal.
“When a party refers to the document and claim that it is in the possession of the opposing
party, the co urt shall invite the said party to submit the document, giving it a time lim it to that effect.
Question 49.
Concerning bord er measur es: Has Croatia made the necessary amendmen ts to its Customs
Code or other related provisions to meet enforcement obligations under TRIPS, including
suspension o f relea se requirement s for posting of asecurity or equivalent assurance andright of
inspection?
Reply:
Yes, The Customs Law enacte d by the Croatian Parliament on 30 June 1999 provides for in
its Article 70:
“The Gove rnment shall presc ribe the proced ure concerning the goods with regard to which
there is a reasonable doubt that the importation thereof in the Repu blic of Croatia constitute the
infringement of intellectual prope rty rights”
The preparation of the Regulation by which the Governme nt of the Republic of Croatia will,
in detail and in compliance with the provisions of the TRIPS Agreement (Articles 51-55), prescribe
the procedure on the border is under way and will be implemented prior to Croatia’s accession to the
WTO.
Question 50.
Concerning criminal provisions: Has Croatia addr essed the TRIPS requiremen t to have in
place deterren t criminal penalties at least forwilful infringement of copyrighte d works of
trademark ed good s?
We are reviewing mate rial provided by Croa tia conc erning current violations of intellectual
proper ty right s that involve members' interests. We thank Croa tia for this informa tion, which
we have only ju st receive d.
Reply:
WT/ACC/HR V/54
Page 37
Yes, the Croatian legislation addr esses such that pa rticular TRIPS r equireme nt, as follows:
Article 285 of the Pen al Law provid es for:
(1) Whoev er, contra ry to the provisions on industrial prope rty, infring es a trade mark, an industrial
design right, an appellation of origin or any other industrial property right of another, with exception
of a p atent (Article 232), shall be punish ed by a fine o r imprisonment up to thre e yea rs.
(2) Whoev er manufacture s, imports, transfers across the border line, offers, puts into circulation,
stores or uses without authorization a product which is the subject of the protection referred to in
parag raph 1 of this Article, shall be inflicted punishment ref erred to in pa ragraph 1 of this Article.
(3) Whoev er usesa trade name of another or enters therein the indication of particular special
designations or indications of rights referred to in paragraph 1 of this Article without authorization,
shall be punished by a fine o r imprisonment up to three years.
(4) If the commitment of a criminal act referred to in paragraphs (1) and (2) of this Article has
resulted with the acquisition of a substantial financial gain or with a substantial damage, and the
perpetr ator has acted with the aim of acquiring such financial gain or causing such damage , he shall
be punishe d by imprisonment f rom six months up to five yea rs.
(5) Articles intended or used for thecommitment of a criminal act or which resulted from the
commitment of a criminal act referred to in paragraphs (1) and (2) of this Article shall be seize d and
destroye d.”
Article 230 of the Pen al Law provid es for:
(1) Whoev er, without the permission of the autho r or anothe r copyright owner when such permission
is require d by the Law, or despite their prohibition, fixes, reproduc es, multiplies, puts into circulation,
rents, imports, transfers over border-line, presents, performs, broadcasts, transmits, makes available to
the public, translates, a rrange s, adapts, or otherwise uses a copyright work, shall be punish ed by afine
or imprisonment fo r up to thre e years.
(2) By the punishment from paragraph 1 of this Article, shall be punish ed whoe ver, without the
permission of theperformer or a person who is authorized to give such permission when such
permission is required by the Law, or despite their prohibition, records, reproduces, multiplies, puts
into circulation, rents, imports, trans fers over border-line, presents, performs, broadc asts, transmits,
makes av ailable to the public, or otherwise uses a performan ce.
(3) By the punishment from paragraph 1 of this Article, shall be punish ed whoe ver, with the intent to
enable unauthorized use of a copy right work orof a performance , produces, imports, transfers over
borde r-line, puts into circulation, rents, enables another to use orexploit any kind ofequipment or
means the main or predominant purpo se of which is to enable unautho rized elimination or prevention
of any of technical means orcompute r programs the purpose of which is protection of copy right or
performe r's right from u nauthoriz ed us e.
(4) A p erson with whom the objects intended or used forthe commitment of the criminal offen ce from
parag raphs 1, 2, and 3, of this Article, or objects that have resulted from such commitment are found,
and who had known or could and should have known, shall be punish ed by a fine for up to one
hundre d daily incomes o r by imprisonment f or up to six months.WT/ACC/HR V/54
Page 38
(5) If, by the commitment of a criminal offence referred to in paragraphs 1, 2, and 3, of this Article,
very large material gain wasobtained and the perpetrator's intention was to obtain such material gain
or to cau se su ch damage, he/s he shall be punishe d by imprisonment f rom six months up to five yea rs.
(6) Objects intende d or used for the commitment of the criminal offen ce from paragraphs 1, 2,and 3,
of this Article, shall be seized and d estroy ed.”
VI. TRADE-RELATE D SERVICES RE GIME
Question 51.
We believe that this section need s tobe reviewed, to updat e thematerial to re flect the additional
market ac cess tha t has been n egotia ted in developing Croa tia’s GATS Sch edule.
We find the various references in this section tothe conditions and requiremen ts for
establishment of differen t forms of commercial presence somewhat disturbing since these issues
haven’ t been raised in sche duling Croatia’s services c ommitments.
For example, in para 205, it states “The establishment of a branc h office (or a subsidiary) wasa
precondition for any foreign person to commence busine ss activity in Croatia. “ This would
seem to indicat e tha t not all forms o f commercial pre sence by f oreign firms is allowed.
Also, the re ferenc es in para 2 07 to insuranc e establishment ar e par ticularly confu sing.
Croatia should re view this se ction t o bring it into line with the state of its n egotia tions.
Reply:
Croatia has already communicated to the WTO Secretariat the revision of the text of this
section in the Working Party Report. With regard to some specific points raised by memb ers on the
wording in para 205 and 207, we would like to point out that the various references have been made
upon request and in answe r to questions raised by the Working Party membe r in earlier stage s of the
accession pr ocess.
Namely para 205 reflects the discussion on the Company Law as the basic act for
commencing busine ss activity and establishing commercial presence in Croatia and Croatian answers
to very specific questions on branch offices, subsidiaries andrepresentatives offices. Weconfirm that
apart from these three catego ries, comme rcial form can take a form of creating a fully new comp any
or any kind of joint ventures and that commercial presence with respect to the amount of foreign
ownership is not limited (it can be 100 per cent foreign owned ). There areonly few limitat ions in few
sectors as reflected in the Croatian Se rvices offer.
Para 207 also reflects earlier discus sions and questions and answer s in the Working Party
meetings and has been update d in the revision of this para in WT/ACC/HRV/7 /Rev.2 that has been
communicated by Cro atia to the WTO Secr etariat by mid July 1999.
Transparen cy
Paras 214 and 215. The statement and commitment in these paragraph s are consis tent with
our requ ests.
Trade Agre ements
WT/ACC/HR V/54
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We thank Croatia for the additional informa tion submitted in the draft report and
WT/ACC/ HRV /51.
Para 223 :  The c ommitment in this parag raph is consis tent with our reque sts.
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