WT/TPR/S/227 Trade Policy Review 
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IV. TRADE POLICIES BY SECTOR 
(1) AGRICULTURE AND RELATED ACTIVITIES  
(i) Main features 
1. Croatia's diverse climate, landforms, and so il are favourable for agriculture and related 
activities1;  almost half of the population still lives in ru ral areas.  Out of a total of 1.3 million ha of 
agricultural land, about 1 million ha are cultivated and the remainder consists of pastures, moors, 
reeds, and fish farms.  Some 81.5% of cultivated land and around 80% of total livestock are privately 
owned.2  Most farms are small:  63.1% of 190,672 regi stered farms in May 2009 had less than three 
ha of land;  36.6% were medium to large (3 to  100 ha);  and 0.3% had over 100 ha of land.  T he 
average commercial farm has 8.5 ha, while the average of all farms has only 2.9 ha.3  Another key 
problem facing the sector is the lack of a proper irrigation system.4  As a result, productivity is low 
with little specialization of agricultural holdings.   In addition, farm holdings are highly fragmented 
with an average of 4.4 plots per farm, making it even  harder for many producers to achieve significant 
economies of scale. 
2. Crop production accounts for 49% of total agricultu ral production.  Croatia is a net exporter 
of cereals.  During 2006-08, an annual average of 3.1 million tonnes (mt) of cereals were produced;  
62% was corn, followed by wheat  (27%), and barley (8%).  S ugar is Croatia's most significant export 
product (14% of total agricultural exports during 2006-08);  a lmost 1.5 mt of sugar beet was 
produced, on average per year, during the same period.5  Over 250,000 tonnes of oil seeds (50% of 
which was soy), around 255,000 tonnes of fruit (mos tly apples and tangerines), and 297,000 of 
vegetables (led by cabbage) were produced  annually, on average (Table IV.1).6  In addition, Croatia 
has a long tradition in wine  production and olive growing.7 
                                                      
1 Croatia can be divided into three geographic and climatic zones:  the lowland with a continental 
climate, in the north, mostly used for crops and livestock production;  the mountainous area, across the central part, best used for forestry;  and the Adriatic coast, suitable for various agricultural activities, including fishing. 
2 Even during the socialist era, th e large majority of land was privately owned.  Under the 1993 Act on 
Agricultural Land and Forest Funds, State funds were set up  to administer the leasing of state agricultural land. 
3 Ministry of Agriculture, Fisheries and Rural Development (2009). 
4 Only 9,000 ha are irrigated although there is irri gation potential for around 600,000 ha.  This is not 
due to insufficient water springs or infrastructure, but the result of changes in ownership structures, the war, and 
changes in agricultural water resource management, (Ministry of Agriculture, Fisheries and Water Management, 
2007). 
5 Imports of sugar from the EU are also significant.  During 2005-07, Croatia's sugar trade with the EU 
averaged €70.6 million per year of imports and €135.3 million of exports.  (European Commission, 2008). 
6 Vegetable and fruit production satisfy less than two th irds of Croatia's consumption.  Production of oil 
plants cover less than 80% of domestic needs for raw vegetable oils and fats. 
7 There are about 150,000 vineyards with an annual average production of nearly 1.3 million hl, and 
annual olive oil production is about 60,000 hl.  In both cases, there is a large number of semi-subsistence 
farmers (Ministry of Agriculture, Fish eries and Rural Development, 2009). Croatia WT/TPR/S/227 
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Table IV.1 
Agriculture production, 2006-08 average 
(Tonnes) 
Product  Surface (ha) Production (tones) Yield (tons/ha) 
Cereals 558,763 3,098,132 5.541 
Fruit 47,643 255,862 5..375 
Grapes 32,320 187,554 5.808 
Oil seeds (soy, sunflower and oil rape) 94,502 250,154 2.629 
Potatoes 16,371 275,462 16.830 
Sugar beet 29,396 1,470,624 50.921 
Tobacco 5,612 12,119 2.162 
Vegetables 17,537 297,167 16.989 
 
Source:  Ministry of Agriculture, Fisheries, and Rural Development (2009), Croatian Agriculture , Zagreb. 
3. Livestock is present throughout Croatia and repr esents 51% of total agricultural production.  
In 2007, there were 467,000 head of cattle and 1.35 million pigs.8  The majority of cattle holdings 
have less than ten animals.  During 2006-08, an  annual average of 136.3 mt of pork meat was 
produced (Table IV.2), followed by poultry (91.5 mt), bovine meat (45.3 mt), and sheep and goat 
(6.1 mt).  Croatia is a net impor ter of all kinds of me at, although it is almost self-sufficient in poultry.9  
Croatia is a net milk importer as the pre-war pro duction level is still to be reached, although, 
production increased from about 706,000 tonnes  in 2004 to around 849,000 tonnes  in 2008.  It is 
almost self-sufficient in eggs, with about 48,000 tonnes produced annually .  Honey production, on 
average 2,600 tonnes per year during 2006-08, tak es place almost exclusively on family farms. 
Table IV.2 
Meat production, 2006-08 
('000 tonnes) 
Meat  2006 2007 2008 2006-08 average 
Bovine 43,113 44,906 47,853 45,291 
Pork 126,247 145,285 137,404 136,312 
Poultry 88,098 93,405 93,031 91,511 
Sheep and goat 6,190 5,735 6,327 6,084 
Total 263,648 289,331 284,615 279,198 
 
Source:  Ministry of Agriculture, Fisheries, and Rural Development (2009), Croatian Agriculture , Zagreb.  
4. Despite the great potential for fisheries in Cr oatia, it contributes only 0.2% to GDP, mainly 
due to the lack of modern/large vessels10, and of investment in production activities and infrastructure.  
Croatia's fisheries is 100% private by owned and includes sea fishing, aquaculture11, freshwater 
fishing12, and fish processing.  Sea fishing is divided in to commercial, small, recreational, and sport 
fishing.  There are about 3,500 authorized comme rcial fishers, whose total catch amounted to 
                                                      
8 Eurostat (2009). 
9 Two decades ago, beef production was the most important agricultural subsector, particularly, the 
Croatian baby-beef brand was widely know n.  After the war, the number of cattle was halved and it is still less 
than two thirds of the 1990s level. Simmental, a doub le purpose breed (meat/milk), represents 78% of total 
breed (Ministry of Agriculture, Fisheries and Rural Development, 2009). 
10 Most are small-size (less than 15m), rather old vessels, with inadequate storing, freezing and icing 
facilities.  FAO online information.  Viewed at:  h ttp://www.fao.org/fishery/countrysector/naso_croatia/en. 
11 Aquaculture in Croatia includes marine capture fisheries (breeding of white fish, oily fish and shell 
fish) with an annual production of about 12,000 tonnes;  and fresh water aquaculture (trout, carp), with a 
production of some 7,100 tonnes in 2008 (Ministry of Agriculture, Fisheries and Rural Development, 2009). 
12 Freshwater fishing is undertaken on the rivers Danube and Sava. WT/TPR/S/227 Trade Policy Review 
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49,006 tonnes in 2008, of which 87.4% was small oily fish (Table IV.3).  Local consumption of fish 
and fish products, estimated at 8 kg  per person, is low by Mediterran ean standards.  Croatia is a net 
exporter of fish and fish products, w ith a surplus of €36 million in 2006.13  
Table IV.3 
Sea fish catch, 2004-08 
(Tonnes) 
Category  2004 2005 2006 2007 2008 
Oily fish 26,381 28,621 31,646 33,041 42,823 
White fish 4,325 4,573 4,857 4,893 4,765 
Other 1,231 1,467 1,353 2,228 1,418 
Total 31,937 34,661 37,856 40,162 49,006 
 
Source:  Ministry of Agriculture, Fisheries, and Rural Development (2009), Croatian Agriculture , Zagreb. 
5. Forestry contributes about 1.5% to Croatia's GDP14, and is a significant source of 
employment, particularly in rural areas.  Forests cover about 2.7 million ha or around 47.5% of the 
total area of Croatia;  86% are broad-leaved tre es (mostly beech and oak), 12% are coniferous (fir, 
spruce, pines), and the rest are classified as degraded  forest (marquis, garrigue, shrub).  Some 78% of 
forest areas are state-owned and the rest are in private hands.15  The state-owned enterprise Hrvatske 
sume which manages state forests, is in the privatiz ation portfolio (Chapter III(3)(ii));  private forests 
are managed by their owners on the basis of forest management programmes where they are available.  
Wood and wood products, including wooden furniture, ac count for some 7% of merchandise exports;  
Croatia is a net exporter of forestry products.16  The main problems in the subsector include 
inaccessibility to about 12% of tota l forest due to the presence of land mines, and the use of old 
technology.17  According to the authorities, a national inve ntory of forest habitats will be completed 
soon. 
(ii) Policy developments 
6. The Ministry of Agriculture, Fisheries and Ru ral Development (MAFRD) is responsible for 
the overall running of the sector, except forestry which is under the Ministry of Regional Development, Forestry and Water Management.
18  Croatia's key policy objectives are, inter alia :  
improving efficiency, productivity, quality, and comp etitiveness; protecting consumers' interests;  
promoting rural development19;  ensuring food security and safet y;  achieving permanent, balanced 
and sustainable management of fishing resour ces in accordance with fishing capacities;  and 
managing forest resources in a sustainable manner while respecting international trends and local 
community rights.20  Furthermore, Croatia aims to bring its  policies rapidly closer to the EU Common 
                                                      
13 Eurostat (2007). 
14 In 2000, it was estimated that wood and wood pr oducts and the furniture industry accounted (each) 
for 0.5% of Croatia's GDP, while the contribution of pulp and paper was 0.4% (Government of Croatia, 2003). 
15 Croatia has certified all state-owned forests accord ing to the Forest Stewardship Council criteria. 
16 Of the total production of 580,000 cubic meters of sawnwood, 315,000 cubic meters are exported;  
imports of sawnwood amount to 180,000 cubic meters. 
17 Government of Croatia (2003). 
18 The Ministry of Regional Development, Forestry and Water Management was established in 
March 2008, and the Ministry of Agriculture, Forestry and Water Management became the Ministry of 
Agriculture, Fisheries and Rural Development. 
19 Rural areas account for almost 92% of Croatia's territory (Ministry of Agriculture, Fisheries and 
Rural Development, 2009). 
20 One of the key policy objectives is to develop forest management plans for private forests and have 
all forests under sustainable forest management by 2016.  Croatia WT/TPR/S/227 
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Agricultural Policy (CAP) and Common Fisheries Po licy (CFP), in order to facilitate accession.  
Croatia also supports the concept that agriculture is  as much a social and cultural issue as it is about 
production of food and fibres, particularly in rural areas.   
7. Government assistance is provided through a combination of border measures (tariffs and 
tariff quotas) and domestic support (mainly through direct payments to farmers and state aid).21  In 
addition, structural policies include support and investment programmes in favour of rural development and less-favoured agricultural areas.   Reflecting recent CAP trends, since 2000 Croatia 
has been shifting from market-price support to direct payments, and from direct payments to structural 
reform in the whole sector. 
8. In the last few years, the agricultural budget h as grown faster than Croatia's overall budget:  
agricultural support increased by 65% during 2005-08, while the total budget increased by 25%.  According to the authorities, th is was necessary in order to mitigate the effects of market 
liberalization in the sector, including switching the support model to decoupled direct payments .
22  
9. Agricultural products subject to strategic commodity reserve stocks, such as cereals and 
cereal products, meat and meat products, milk and milk products, fats, sweeteners, salt and spices, 
canned vegetables, marmalades, coffee, soups, a nd eggs are managed by the Commodity Reserves 
Directorate of the Ministry of the Economy, Labour and Entrepreneurship (MELE).23 
10. Trade in agriculture products, including fish a nd fish products, is greatly influenced by the 
Stabilization and Association Agreement (SAA) with the EU.  Under the SAA, the EU grants Croatia unlimited duty-free access for most agricultural produc ts with some exceptions for which tariff quotas 
apply, such as on baby beef, fisheries, wine , and sugar (since 1 January 2007 on sugar), 
(Chapter II(3)(i)). 
Border protection 
11. Import tariffs affect all agricultural products.  While the majority of tariff lines are subject to 
ad valorem  rates, agricultural products considered to be  "sensitive" (i.e. 639 lines in the MFN applied 
tariff), are subject to specific, mixed, and compound  rates.  Under Croatia's trade agreements, tariff 
preferences on agricultural products range from a bolition/reduction of duties for unlimited quantities 
to reduced/abolished duties within tariff quotas for th e most sensitive agricultural products, also with 
non-ad valorem  rates (see below).  The simple average MFN tariff on agriculture, hunting, forestry, 
and fishing is 10.8% using ISIC (Revision 2) defi nition, i.e. four percentage points higher than 
manufacturing (6.8%) (Table AIV.1).  As in other countries in the region, there is a wide variation 
between tariffs, and Croatia's rates range from zero  (e.g. on products of animal origin) up to 279.8% 
(an AVE) on cider apple, in bulk from 16 Septem ber to 15 December (Chapter III(1)(iv)(a)). 
12. Croatia bound its tariff lines on agricultural prod ucts (WTO definition) at a final simple 
average rate of 13.8%.  The Government of Croatia st ated in the context of this Review that applied 
tariffs have always been maintained  either at or below bound levels. 
                                                     
 
21 Croatia's system of guaranteed prices for some commodities and input subsidies have been 
eliminated. 
22 Ministry of Agriculture, Fisheries and Rural Development (2009). 
23 Under the Strategic Commodity Reserves Act (OG 87/02), strategic commodity reserves are kept to 
ensure basic supplies during, inter alia , war and/or extensive natural and eco logical disasters.  The Commodity 
Reserves Directorate cannot use such reserves to interfere in the domestic market. WT/TPR/S/227 Trade Policy Review 
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13. In accordance with its commitments under the WTO Agreement on Agriculture, Croatia 
maintains tariff quotas on six categories of products at the HS-four digit level, including meat of 
bovine animals, meat of swine, wheat and meslin, cane and beet sugar, and chocolate.24  In general, 
quotas are allocated in relation to quantities demanded (pro rata system) and prior to the start of the 
period during which imports are to take place;  in a ddition, past imports and some elements of size of 
economic activity are considered (Chapter III(1)(v)).  
14. The limited coverage of agricultura l products in Croatia's preferential trade agreements (EU, 
CEFTA 2006, EFTA, and Turkey) delays their exposure  to greater competition (Chapter II(3)).  Tariff 
preferences on agricultural products under these agreem ents range from abolition of duties to reduced 
or abolished duties within tariff quotas.  Each agre ement includes a specific list of (sensitive) products 
covered by tariff quotas, with large differences in tariff rates and products (Chapter III(1)(iv)(c)).  
Access conditions under these quotas are reviewed on a regular basis through the negotiation of additional protocols. 
Domestic support system (direct payments and price support)  
15. Instruments used for domestic support are being harmonized with those of the EU, in 
preparation for accession.  In particular, Croatia has gradually introduced less distorting modes of 
support since 2000, such as decoupled direct payments.
25  Nonetheless, coupled direct payments 
(support linked to production and/or prices) still constitute a significant part of Croatia's total 
domestic support aid.26  A new system of support in agriculture  entered into force in the second half 
of 2009 with s everal horizontal mechanisms necessary for the future implementation of direct 
payments in the EU, such as cross-compliance, modulation of direct payments, and an integrated 
system for administration of direct payments.27  It also introduces the basic direct payment for 
meadows and pastures and a basic payment for all other types of use of agricultural land, where 
beneficiaries receive the same amount per ha regardless of the type of production.28  
16. Croatia's average support is about €3,850 per fa rm;  beneficiaries represent 47% of total 
registered farms .  During 2004-05, crops received the largest share (over 50%) of total direct 
payments, followed by livestock (about 45%);  milk received29, individually, the biggest share (some 
25%), and fisheries (3%).  Implementation of the Integrated Administrative and Control System 
(IACS) is at an early stage.  It aims, inter alia , to ensure that direct payments for farmers are handled 
correctly from the day of accession to the EU.30 
                                                      
24 The latest notification by Croatia concerning imports under tariff quotas (Table MA:2), provided to 
the WTO Committee on Agriculture, refers to 2008, (WTO document G/AG/N/HRV/9, 30 October 2009). 
25 Act on Financial Incentives and Input Subsidies in Agriculture (OG 29/99, 105/99, 46/00, 101/00, 
12/01 and 13/02), and Act on State Support in Agriculture, Fisheries and Forestry (OG 87/02, 17/03, 82/04 and 12/05). 
26 Enhanced preparations are required particularly to apply the EU's system of decoupled direct 
payments, (European Commission, 2008a).  According to th e authorities, the share of coupled payments in total 
agricultural support was not available at the time of finishing this report. 
27 Ministry of Agriculture, Fisheries and Rural Development (2009). 
28 According to the authorities, such payments are almost completely aligned with direct payments in 
the regional model of the EU single payment scheme. 
29 A programme for restructuring the milk subsector wa s introduced in 2004 with the aim of tackling its 
key competitiveness problems due to small farm production structures (70% of cows are on small farms of five 
head or less), and limited organized collection and marketing of milk from small farms. 
30 Preparations for the Paying Agen cy are also under way with the a doption, in March 2009, of the Act 
on the Establishment of the Paying Agency in Agriculture, Fisheries and Rural Development.  It is to be Croatia WT/TPR/S/227 
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17. Agriculture and fisheries receive the hi ghest share of sector-specific state aid 
(Chapter III(3)(ii)(b)). 
18. Croatia is also moving towards the establishm ent of EU-like common market organizations 
(CMOs).  Currently, a draft act governing market or ganizations for all agricultural products produced 
in Croatia is in Parliament.  The draft act stipul ates all measures that can be applied for agricultural 
products, with the exception of direct payment.  It sets a framework for the implementation of 
intervention measures, marketing standards, pr oduction limitations, producer groups, import/export 
licensing and the allocation of tariff quotas.   
19. Since becoming a WTO Member, Croatia has abolished its system of guaranteed prices.  
According to the authorities, no guaranteed prices or input subsidies are currently applied for any 
agricultural product.31  
Structural policies 
20. Given the small average farm size and the fractured  nature of farms, restructuring policies in 
Croatia are particularly important.  The share of  the agricultural budget a llocated to structural 
adjustment and rural development support sch emes, with a focus on less favoured areas and 
investment support, rose from 8% in 2006 to almost 19% in 2008.  The goal is to achieve, by 2012, an 
average budget share for rural development, in the ov erall support, similar to the share provided in EU 
member states.32  Support to rural areas includes specifically targeted output-based support and direct 
payments.  
21. Over 50% of total agricultural surface is included in support programmes for less favoured 
areas33, including higher state support for certain coupled direct payments (e.g. milk, certain cattle 
breeds, and some  crops).  Investment support for commercial farms  is delivered in the form of capital 
grants and interest rate subsidies on loans.  More over, agri-environmental measures, such as payments 
geared to protection of landscape, reduction of nu trient and pesticides impact, and protection of  
bio-diversity will be included in the National Programme for Rural Development.  General services to 
agriculture (extension, veterinary and breeding servi ces, research and education services) also benefit 
from public support. 
22. Following the establishment of the EU Speci al Accession for Agriculture and Rural 
Development Programme (SAPARD) with financial aid of €25 million for 2 006, Croatia adopted its 
Rural Development Strategy in May 2008.  It fo resees the implementation of a national investment 
support scheme complementary to EU funds, provided  also under the Instrument for Pre-Accession 
Assistance for Rural Development (IPARD).  Fina ncial aid amounting to €76.9 million (the EU 
contributes with 75%) was allocated to the Croatia n Rural Development Strategy for 2007-09, to:  
improve market efficiency and implementation of EU standards;  develop the rural economy;  and 
                                                                                                                                                                     
complemented by the Statue of the Agency and ot her accompanying acts on its organizational structure, 
including preparation for accreditation for enforcement of the CAP. 
31 The system of guaranteed prices was applied to products such as wheat, sugar beet, sunflower, 
soybean, oil rape, tobacco leaves and milk (WTO document, WT/ACC/59, 29 June 2000). 
32 Some adjustments are envisaged in the area of di rect payments if Croatia is to use, upon accession, 
EU structural funds in a timely and efficient manner (Ministry of Agriculture, Fisheries and Rural Development, 
2009). 
33 Less favoured areas primarily include mountainous areas, the islands and the Pelješac peninsula, and 
some special care areas. WT/TPR/S/227 Trade Policy Review 
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provide technical assistance.  In addition, prepar atory actions for the implementation of the agri-
environmental measures and local development strategies will be developed during 2010-13.34 
23. A new Agricultural Land Act (OG 152/08) has b een adopted with the aim of improving the 
competitiveness of the agriculture sector..  Under the Act, state-owned agricultural land disposal must 
be implemented into two phases.  In the first phase, local self-government units must prepare 
programmes for the disposal of state-owned agricultu ral land, including data on areas for lease, long-
term lease, restitution, other uses, and other forms of disposal.35  In the second phase, they must 
implement public biding procedures for selling and leasing-out state-owned agricultural land under 
the supervision of MAFRD;  the Ministry must implement these procedures for long-term leasing-out 
state-owned agricultural land.  Moreover, the La nd Registers and Cadastral Offices Improvement 
Project was launched in 2003 in order to create an ef ficient system of land registration administration, 
and help render the real estate market more effective.   
24. A National Programme for the development of th e Land Parcel Identification System (LPIS) 
was adopted in November 2007;  the Farm Accountancy Data Network project is ongoing.36  
25. The programme for irrigation, agricultural la nd, and water resources management is being 
implemented with the aim of developing and improvi ng Croatia's irrigation infrastructure systems.  
Under the programme, 65,000 ha of agricultural la nd are expected to be irrigated during 2004-20. 
WTO 
26. Croatia's commitments on agricultural tariffs , on domestic support, a nd on export subsidies 
for agricultural products are contained in the Sc hedule of Concessions a nd Commitments on Goods 
annexed to Croatia's Prot ocol of Accession to the WTO.  Croa tia undertook a commitment to decrease 
its Aggregate Measure of Support (AMS) ceiling rela ting to the 1996-98 base period by 20% in equal 
annual instalments within five years of accession.  At  the time of finalizing this Report, Croatia was 
preparing its WTO notification regarding AMS over 2001-05.  On the basis of preliminary figures, total AMS amounted to €117.1 million in 2005 (up fr om €90.1 million in 2001).  In terms of products, 
the largest share of AMS, in 2005, was allocated to milk (57.6%), perennial crops (7.1%), and tobacco 
(6.3%).  The largest share of total domestic suppor t was for blue box measures (direct payments under 
production-limiting programmes) which amounted to €159.2 million in 2005 (€120.7 million in 
2001).  Domestic green box support reached €36.5 million in 2005 (€13 million in 2001), 37% of 
which went to general services (e.g. plant and anim al health control and protection, and extension 
services).  De minimis  support increased from €18.4 million in  2001 to €37 million in 2005. 
27. Croatia also bound nine tariff quotas for agri cultural products in its Schedule CXLVII 
(Chapter III(1)(iv)).  During the period under Revi ew, one Member raised questions, in the WTO 
Committee on Agriculture, about Croatia's fill rates for its tariff quotas.
37 
28. Since its accession, Croatia has notified the WTO that it does not provide export subsidies.38 
                                                      
34 EC MEMO 07/607, 20 December 2007. 
35 Those programmes have to be approved by MAFRD. 
36 European Commission (2008a). 
37 WTO document G/AG/R/44, 25 November 2005. 
38 WTO documents G/AG/N/HRV/1, 19 May 2005;  G/AG/N/HRV/4, 20 February 2007;  
G/AG/N/HRV/7, 6 May 2008; and G/AG/N/HRV/8, 30 October 2009. Croatia WT/TPR/S/227 
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(2) MANUFACTURING  
29. Croatia has a relatively diversified manufacturing sector, led by food products, beverages, and 
tobacco (25.4% of total manufacturing value a dded in 2006);  pulp, pa per and paper products, 
publishing, and printing (12.4%);  and chemicals (7.6%).39 In addition, Croatia's shipbuilding, which 
ranks 14th in the world with 2 billion deadweight tonnage (dwt) capacity, is one of its most important 
industries in terms of competitiveness.  Croatia's si x shipyards are being restructured before their 
privatization (Chapter III(3)(ii)).  Manufacturi ng employed 258,939 workers in 2008.  Nonetheless, 
the share of manufacturing in Croatia's total FD I inward stock has dropped below 20%, except in 
2006 and 2008 when foreign investors bought some Croatian companies in the chemicals industry and in the manufacture of coke and refine d petroleum products (Chapter I(3)(ii)). 
30. Manufactured exports accounted for 69.4% of total merchandise exports in 2008 (down from 
71.5% in 2003), and consisted mainly of machin ery and transport equipment (33.5% of total 
merchandise exports), particularly ships, boats, y achts and other vessels (Table AI.1).  Manufactured 
products represented 70.4% of total merchandise imports  in 2008, compared with 77.1% in 2003, and 
are concentrated in more capital-intensive industri es, such as machinery and transport equipment, and 
chemicals (32.5% and 10.6% of total mercha ndise imports, respectively) (Table AI.2). 
31. The Ministry of the Economy, Labour and Entr epreneurship (MELE) is responsible for the 
overall running of the sector
40, except for food processing and the wood industry, which are under the 
MAFRD and the Ministry of Regional Development,  Forestry and Water Management, respectively.  
Croatia's main long-term objective in the manufact uring sector is to raise its competitiveness and 
productivity as well as reducing direct state intervention so as to be ready for EU accession.  This is to 
be achieved through, inter alia , the privatization of SOEs, and the promotion of outward-oriented, 
technology-intensive, and high-value-added production.41  
32. Despite Croatia's privatization programme, the St ate continues to play an important role in 
manufacturing, mainly through SOEs, some of wh ich are loss-making.  The State has significant 
shares in some heavy indu stries, notably shipyards.  Moreover, manufacturing is a major beneficiary 
of government support, including through investme nt incentives (e.g. duty and tax concessions) to 
promote, inter alia , free zones, and SMEs (Chapter III(3)(i)) and (2)(v)).  In addition, during 2004-08 
most sector-specific state aid was allocated to manufacturing, part icularly shipbuilding 
(Chapter III(3)(iii)(b)).  State aid to the iron a nd steel industry was granted until 2007;  the two 
remaining state-owned mills were privatized in 2008 (Chapter III(3)(ii)). 
33. MFN customs tariffs on manufactured goods (major division 3 of ISIC, Revision 2) average 
6.8%, with rates ranging from zero to 81.5% on the manufacture of sugar products (Chart IV.1 and 
Table AIV.1).  The positive tariff escalation in some industries, i.e. food and beverages, and textiles 
and apparel, means relatively high effective rates of protection, which somewhat impede Croatia's 
export competitiveness of those manufacture d products (Chapter III(1)(iv)(a)).  
                                                      
39 Central Bureau of Statistics (2008). 
40 In particular, the Industrial Development and Restructuring Department of MELE defines goals, 
principles and measures of industrial policy (MELE on line information.  Viewed at:  http://www.mingorp.hr/ 
defaulting.aspx?id=121). 
41 Government of Croatia (2006). WT/TPR/S/227 Trade Policy Review 
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0102030405060708090
311
312
313
314321322
323
324331332
341
342
351352
353
354
355356
361
362
369
371
372381
382
383
384385
390
410Chart IV.1
Tariff protection in the manufacturing sector, 2009
Percent
WTO Secretariat calculations, based on data provided by the Croatian authorities.AverageMaximum
Minimum
International Standard Industrial Classification, Revision 2
Source :311
312
313314321322323
324
331332
341
342
351
352353Description
Food production
Other food products and animal feedsBeveragesTobacco manufacturingTextilesManufacture of wearing apparel, except footwearLeather products, except footwear and wearing 
apparel
Footwear, except vulcanized rubber or plastic footwearWood and wood products, except furnitureManufacture of furniture and fixtures, except primarily of metalPaper and paper productsPrinting, publishing and allied industriesIndustrial chemicalsOther chemicals, including pharmaceuticalPetroleum refineriesDescription
Manufacture of miscellaneous petroleum and coal
productsManufacture of rubber products n.e.s.Manufacture of plastic products n.e.s.Pottery, china and earthenwareManufacture of glass and glass productsOther non-metallic mineral products
Iron and steel basic industries
Non-ferrous metal basic industriesFabricated metal products, except machinery and equipmentNon-electrical machinery including computersElectrical machinery apparatus, appliances and suppliesTransport equipmentProfessional and scientific equipmentOther manufacturing industriesElectrical energy354
355
356361362369
371
372381
382
383
384
385390410
 Croatia WT/TPR/S/227 
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(3) SERVICES  
(i) Overview 
34. Services is a key sector of Croatia's economy in  terms of contribution to GDP, employment, 
and foreign exchange earnings (Chapter I(1)).  In  2008, financial services contributed 23% to GDP, 
followed by public administration (16.7%), trade (12. 3%), transport (9.3%), and hotels and restaurants 
(4.3%).  Croatia is a net exporter of services, with  a surplus averaging €5,803 million per year during 
2004-08 and, in 2007, Croatia ranked 25th among world exporters and 47th among importers in terms 
of commercial services trade (Chapter I(3)(i)).  Mo reover, services concentrates about two-thirds of 
Croatia's total FDI inward stock, led by fina ncial services, trade (retail and wholesale) and 
telecommunication services (Chapter I(3)(ii)). 
35. Since its WTO accession, Croatia has taken measures to tackle some of the structural 
problems in certain services subsectors:  the fina ncial services supervisory framework has been 
strengthened, and liberalization of telecommunica tions has progressed.  However, some SOEs still 
dominate services activities, including Croatian Railways  Hrvatske Zeljeznice (HŽ) which is being 
restructured.   
36. Under the General Agreement on Trade in Serv ices, Croatia scheduled extensive specific 
commitments, including on financial services, telecommunications, transport, tourism, and 
professional services.  Croatia also accepted the Reference Paper on basic telecommunications services.
42  It maintains MFN exemptions under Article II of the GATS in some areas of road 
transport and audiovisual services.  Croatia has also  tabled its initial conditional offer in the ongoing 
services negotiations.43  
37. Services are covered in Croatia's preferential trading arrangements, i.e. SAA, CEFTA 2006, 
EFTA, and Turkey (Chapter II(3)). 
(ii) Financial Services 
(a) Banking 
38. Total assets in Croatia's banking subsector amounted to HRK 370.8 million at the end of 
2008, i.e. 109% of GDP44;  the share of banks in total assets of financial intermediaries was 76.6%.45  
Bank credit, as a share of GDP, increased steadily from 44% in 2002 to 72% in 2008, due mostly to the easy access of banks (mainly foreign) to external funding from parent banks, which, in turn, encouraged strong credit growth.  According to the IMF, Croatia has a stable and resilient banking 
subsector, with relatively strong profitability a nd capital positions, aided by prudent regulatory 
requirements.  However, the banking system carri es considerable interest- and currency-induced 
credit risks as the majority of loans are based on vari able interest rates and denominated in or indexed 
                                                     
 
42 WTO document GATS/SC/ 130, 22 December 2000. 
43 WTO document TN/S/O/HRV, 27 June 2005. 
44 CNB (2009). 
45 The share of the non-banking financial subsector declined to 23% in mid 2009 largely due to poor 
the performance of investment funds, which experienced significant share price declines and money 
withdrawals in the context of the global fina ncial crisis (European Commission, 2009). WT/TPR/S/227 Trade Policy Review 
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to foreign exchange.46  In addition, loan quality may suffer as a result of the global economic crisis 
and financing conditions tightening.47 
39. As a result of several mergers and acquisitions  and of bankruptcy, the number of commercial 
banks operating in Croatia dropped from 43 in  2000 to 33 in 2008 (16 foreign-owned48, 15 private 
domestically owned, and two state-owned).  In additi on, there are five building societies, two savings 
banks49, and the state-owned Croatian Bank for Reconstruction and Development (HBOR).50  T h e  
legal reserve ratio is uniform and is set at 14%.  Banking concentration in Croatia is high, with the 
five biggest banks holding about 72.3% of total assets.51  Overall, foreign-owned banks held 90.6% of 
total banking assets at end 2008, up from about 84.1% in 2000. 
40. The legislation governing the operation of banks  in Croatia includes the Act on the Croatian 
National Bank (OG 75/08) and the Credit Institutions Act (OG 117/08 and 74/09).52  The Credit 
Institutions Act, inter alia , transposed the EC Capital Requirements Directives into Croatian 
legislation, requiring credit institu tions/banks with registered offi ces in Croatia to assess their risk 
exposure in their operation in accordance with all Basel II core principles.  Nonetheless, some 
provisions of the Act will become applicable only upon EU accession.53  
41. The Croatian National Bank (CNB), the central ba nk, is in charge of supervising banking 
activities.54  Domestic and foreign natural persons or legal entities may start a bank. Banks may only 
be established as joint-stock companies that exclusiv ely issue registered shares.  To establish a bank 
or any credit institution in Croatia, a licence is required from the CNB.  The minimum share capital 
requirement is HRK 40 million to establish a co mmercial bank;  HRK 20 million for a building 
society;  and HRK 8 million for a savings bank.  Until Croatia's accession to the EU, the CNB will 
remain in charge of competition issues resulting from banking and other cred it institutions' services 
(Chapter III(3)(iii)(a)). 
42. In principle, all banks operating in Croatia are universal banks (i.e. allowed to carry out all 
types of banking activities).  Nonetheless, foreign banks can offer banking and other financial services 
in Croatia only through a branch established on the basis of a CNB licence.  A foreign representative 
office may not provide either banking or other financial services;  it may only conduct market 
research and represent its foundi ng bank (Table AII.1).   
                                                      
46 European Commission (2009). 
47 IMF (2009a). 
48 Foreign participation in Croatia's banking subsector began in 1997. 
49 Savings banks are not allowed to operate or esta blish branches or representative offices outside 
Croatia (Article 313.3 of the Credit Institutions Act). 
50 HBOR plays the role of a development and export bank established with the objective of financing 
the reconstruction and development of the economy.  To do so, HBOR, inter alia , grants loans and other types 
of financing, issues banks and other guarantees, including insurance and reinsurance (Chapter III(2)(iv)). 
51 These are:  Zagrebacka Banka;  Privredna Ba nka Zagreb;  Erste & Steiermarkische Bank;  
Raiffeisenbank Austria;  and Hypo Alpe-Adria-Bank. 
52 The Banking Act (OG 84/02 and 141/06) ceased to have  effect with the entry into force of the Credit 
Institutions Act.  See also Table II.1 for other relevant financial services Acts and Decisions. 
53 These provisions regulate, inter alia , services by banks with register ed offices in EU member states, 
their supervision, and coordi nation of activities in the college of superv isors.  Upon accession of Croatia to the 
EU, the provisions of the Act relating to third-country credit institutions will apply mutatis mutandis  to credit 
institutions of the EU memb er states (Article 370). 
54 The CNB was established in 1990 as an autonomous institution responsible to Parliament.  Its 
primary objective is to achieve and maintain price stability, (Article 53 of the Constitution). Croatia WT/TPR/S/227 
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43. Banks in Croatia may maintain equity stakes in insurance companies or establish insurance 
companies as subsidiaries.  Pursuant to the Credit Institutions Act (Article 59), banks in Croatia must 
obtain authorization from the CNB to carry out activities related to insurance policy sale, in 
accordance with the regulations gove rning insurance (Article 6).55  There are no restrictions in Croatia 
on the share of foreign ownership in banking or on the number of foreign-owned banks.  Upon 
Croatia's accession to the EU, branches of third-co untry banks authorized by the CNB may provide 
banking services in Croatia (Article 56(3)).  As pr ovided by the Credit Ins titutions Act, following 
accession of Croatia to the EU, banks of EU me mber states may provide banking services through a 
branch established in Croatia, or may provide mutu ally recognized services directly (Article 56(2)). 
44. Under Article 4(2) of the Deposit In surance Act (OG 177/04 and 119/08), as from 
1 January 2010, the State Agency for Deposit Insura nce and Bank Rehabilitation will insure citizens' 
deposits and a part of legal pers ons' (SME's) deposits in any bank, saving bank, and building society 
up to HRK 400,000 regardless of the number of bank accounts, their size, currency, and place where those bank accounts are being held.
56 
(b) Insurance 
45. The share of insurance in total assets of financ ial intermediaries was over 5% at the end of 
2008;  they amounted to HRK 26.7 billion and repr esented 7.8% of GDP.  Croatia has 29 insurance 
companies;  7 life, 9 non-life, and 11 life and non-life insurers57, and 2 reinsurance companies.  Only 
one insurance company is state-owned.  In additi on, there are 25 insurance intermediation companies 
(insurance brokers), more than 300 insurance repr esentation companies (insurance agencies), plus the 
Croatian Pool for Insurance and Re insurance against Nuclear Risks.58  The share of gross written 
premiums to GDP in 2008 was 0.7% for life insura nce, and that 2.1% for non-life insurance.  
Premium per capita was about HRK 2,181 (about €300)  in 2008, i.e. still far below the European 
average.59 
46. A new Insurance Act (OG 151/05, 87/08 and 82/09) was adopted in July 2008 with the aim of 
aligning it with the acquis , in particular on reinsura nce.  The Insurance Act, inter alia , regulates the 
conditions for the establishment and operation of a ll insurance-related companies, performance of 
internal audit, as well as insurance and reinsuran ce companies' audit, liquidation, and bankruptcy 
procedures.  It also regulates consumer protection.60 
47. Since 2006, the Croatian Financial Services Supervisory Agency (HANFA) has been 
responsible for the supervision of all non-bank ing financial activities, including insurance and 
reinsurance companies and other insurance-related activities.61  An insurance company can be 
registered as a joint-stock company or mutual in surance company.  Domestic and foreign natural 
persons and legal entities may establish insurance companies.   Once incorporated under Croatian 
                                                      
55 CNB issues an authorization on the basis of prior approval by the Croatian Financial Services 
Supervisory Agency (HANFA). 
56 Before 1 January 2010, the Agency insured only citizens' deposits.  
57 Non-life insurance includes:  road vehicle liab ility, aircraft liability, wa tercraft liability, other 
insurance, loan, and guarantee insurance. 
58 Two or more insurance companies can establish insu rance, i.e. reinsurance association (pool) for the 
purpose of insurance and reinsurance ac tivities that cover risks of high liability against atomic damage (Croatian 
Chamber of Economy, 2009). 
59 HANFA (2008). 
60 Croatian Chamber of Economy (2009). 
61 Under the Act on Croatian Financial Services Supervisory Agency (OG 140/05), HANFA replaced 
three supervisory authorities:  the Directorate for the Supervision of Insurance Companies (DINADOS);  the 
Croatian Securities Commission (CROSEC);  and the Ag ency for Supervision of Pension Funds (HAGENA). WT/TPR/S/227 Trade Policy Review 
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legislation, companies may offer any insura nce products.  The only compulsory insurance 
requirement relates to third-party liability polici es for motor vehicles.  The minimum required share 
capital of a joint-stock insurance undertaking is:  HRK 15 million for insurance operations restricted 
only to certain types of non-life insurance62;  and HRK 22.5 million for other non-life insurance 
operations, types life insurance, and re-insurance (Table AII.1).  
48. In Croatia, insurance services may conducted by :  (i) an insurance undertaking having a 
principal place of business in Croatia, which has been granted authorization by HANFA to carry out an insurance business;  (ii) a bran ch of an insurance undertaking from a third country, which has been 
granted authorization by HANFA to operate an insu rance business;  or (iii) an insurance undertaking 
from a EU member state with the ri ght to carry out an insurance busin ess in Croatia either directly or 
through a branch.  Foreign partic ipation, which began in 1993, has raised the competitiveness of 
Croatia's insurance companies a nd increased the quality and diversity of insurance products and 
services.
63  Out of total initial capital of HRK 1.8 b illion for insurance and reinsurance companies 
registered as at 31 December 2008, HRK 863.2 milli on (47.1%) was owned by foreign legal persons 
(non-residents), and HRK 968.6 million (52.9%) by do mestic natural and lega l persons (residents).64 
(c) Securities 
49. In March 2007, the Zagreb Stock Exchange (ZSE)  incorporated the Varaždin Stock Exchange 
(VSE), forming a single Croatian capital market, and led the region in terms of market capitalization 
and trading volume.  However, as a result of the global financial crisis, in 2008, market capitalization 
decreased by about 55%, to HRK 177 billion, wh ile turnover (HRK 31,064 million) fell 53.3%.  
Moreover, at the end of 2008, the value of the share index CROBEX was 67.1% lower than at the 
beginning of the year.65  Croatia's stock market started to recover somewhat in 2009.  The capital 
market is highly concentrated, with the top-ten listed companies accounting for about 70% of total 
market value.66 
50. HANFA is responsible for regulating the capital ma rket and securities in Croatia.  Only an 
authorized company (investment firm) may deal in  securities.  All activities must be licensed by 
HANFA and be entered in a court register.  At  end October 2009, the Croatian capital market 
comprised 49 investment firms, 39 of which had a licence to trade in securities from HANFA.  In addition, there were 36 registered investment fund management companies and 132 open-end, and 
10 closed-end investments funds.
67  Securities are traded on the ZSE  via the OMX electronic trading 
system. 
51. A new Capital Market Act (OG 88/08, 146/08 a nd 74/09) and related by-laws entered into 
force in 2009 with the aim of reaching full alignment with the acquis .  Nonetheless, some provisions 
will take effect only upon EU accession (as defi ned in Article 595 of the Act).  The Act, inter alia , 
prescribes a higher minimum initial capital requirement (HRK 1 million) and organizational 
                                                      
62 These are:  personal accident insurance;  health  insurance; insurance of land motor vehicles;  
insurance of railway locomotives and rolling stock;  insura nce of aircrafts;  insurance of vessels;  insurance of 
goods in transit;  insurance against fire and natural di sasters;  other property insurance lines;  insurance of 
miscellaneous financial losses;  insurance of  legal protection;  and travel insurance. 
63 Croatian Chamber of Economy (2009). 
64 HANFA (2008). 
65 ZSE (2009). 
66 HANFA (2008). 
67 In 2008, net assets in open-end and closed-end investment funds amounted to HRK 9.9 billion (up 
from HRK 4.5 billion) and HRK 1.9 billion (up from HRK 1 billion), respectively.  Croatian Chamber of Economy, 2009a). Croatia WT/TPR/S/227 
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adjustments for investment companies, by estab lishing a fund for the protection of investors.68  The 
Act on Criminal Offences Against the Capital Mark et Act (OG 152/08) also entered into force in 
2009. 
52. The Investments Funds Act (OG 150/05), sets out conditions for the establishment of 
investment funds and investment f und management companies;  issue and sale of stock and shares;  
stock redemption;  promotion of funds;  activ ities executed for a fund by third persons;  and 
supervision of activities of funds, investment fund management companies, deposit banks, and 
persons who sell stocks and shares.  Under the Ac t, the minimum initial authorized capital of an 
investment fund management company is HRK 1 milli on.  The Act contains a number of provisions 
(defined by Article 247) that will apply as of Croatia's full EU membership.  
(iii) Telecommunications and postal services 
53. Croatia's telecommunications network has grow n considerably over the last few years, 
notably the mobile market where the number of ce llular mobile subscribers more than doubled during 
2004-08 (Table IV.4).  Similarly, the number of internet users increased from 1.4 million to 2.2 million, and broadband subscribers jumped from about 23,000 to 524,700 over the same period. In 
2008, there were 1.88 million fixed lines in service,  i.e. a teledensity of  42.34 (down from 42.42 in 
2004).  Penetration of telephone lines remains below the EC average for both fixed and mobile telephony.   
54. Croatia's telecommunications and postal services,  regulated by the Ministry of the Sea, 
Transport and Infrastructure (MSTI), are undergoing a liberalization process.  The most important 
change regarding fixed telephony has been the end of the monopoly of Croatian Telecom (HT).
69  
During the second quarter of 2005, the first alte rnative operator started operating commercially, 
building its subscribers' base on the carrier pre-selection service (CPS).70  Liberalization of services in 
fixed electronic communications network has resu lted in higher market competition (there are 
currently 11 operators) and, in tu rn, lower tariffs.  Nonetheless, HT continues to dominate the fixed 
phone market with 77.65% of subscribers in December 2008.71  
Table IV.4 
Selected telecommunica tion indicators, 2004-08 
 2004 2005 2006 2007 2008 
Telephone subscribers ('000) 4,723.1 5,532.2 6,226.2 6,881.4 7,757.9 
Telephone subscribers per 100 inha bitants 106.25 124.36 140.27 155.09 174.40 
Main fixed telephone lines ('000) 1,887.6 1,882.5 1,831.0 1,846.8 1,878.9 
Main fixed lines per 100 inha bitants 42.42 42.37 41.28 41.70 42.34 
Cellular mobile subscribers ('000) 2,835.5 3,649.7 4,395.2 5,034.6 5,879.9 
Table IV.4 (cont'd) 
                                                      
68 Articles 222 to 246 of the Capital Market Act and Ordinance on Calculation, Methods and 
Timeframes of Payment of Regular Contribution of the Members to the Investors Protection Fund (OG 81/09). 
69 HT provides fixed network telephony under the T-Com brand, and mobile communication services 
under the T-Mobile Hrvatska brand.  HT online info rmation.  Viewed at:  h ttp://www.t.ht.hr/eng/group. 
70Partial market liberalization in fixed telephony st arted in 2003, and full liberalization was completed 
on 1 January 2005.  The first call via carrier pre-selectio n was made on 1 June 2005, while the process of local 
loop unbundling started in September 2006, enabling alternative operators to connect end users directly.  Number portability in fixed networks became available in July 2005.  HAKOM  online information.  Viewed at:  
http://www.hakom.hr/default.aspx?id=21. 
71In terms of revenues, HT had 82.2% of the fixed market by December 2008.  See HAKOM online 
information.  Viewed at:  http://www.hakom.hr/default.aspx?id=29. WT/TPR/S/227 Trade Policy Review 
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 2004 2005 2006 2007 2008 
Cellular subscribers per 100 inhabitants 63.76 82.24 98.99 113.49 132.55 
Internet subscribers ('000) 854.9 953.8 1,216.0 1,324.4 1,360.6 
Internet subscribers per 100 inhabitants 19.21 21.47 27.41 29.90 30.77 
Internet users ('000) 1,375.3 1,472.4 1,684.6 1,984.8 2,244.4 
Internet users per 100 inhabitants 30.91 33.14 37.98 44.82 50.75 
Broadband subscribers  ('000) 23.0 116.0 251.8 387.0 524.7 
Broadband subscribers per 100 inhabitants 0.52 2.61 5.68 8.74 11.86 
 
Source:  ITU online information, "ICT Statis tics Database".  Viewed at:  http://w ww.itu.int/ITU-D/icteye/Indicators/ 
 Indicators.aspx#, September 2009 and information provided by the Croatian authorities.  
55. The mobile telephony market was liberalized in 1998, although the second (first private) 
mobile network operator72, VIPnet, started operating in July 1999.73  The third and latest operator to 
enter the market was Tele2 in October 2005.74  At end 2008, T-Mobile Hrvatska had 45.75% of total 
subscribers in the mobile market, followed by VIPnet (42.29%), and Tele2 (11.96%).75 
56. The Croatian Post and Electronic Communications Agency (HAKOM), an independent body 
established in 2004, is responsible for implementin g Croatia's policy for electronic communications 
and postal services.  This includes:  promoti ng competition, encouraging new investments and 
innovation, protecting users against abuse by service providers, and ensuring the right to universal 
services.76  In 2009, the Consumer Protection Unit was established as HAKOM's advisory body.77  
Under the Electronic Communications Act (OG 73/ 08), HAKOM is entitled to resolve disputes 
between operators and consumers (end-users)  related to the provisions of the Act. 
57. The Electronic Communications Act, which re place the Telecommunications Act of 2003, 
entered into force on 1 July 2008.  The Act, inter alia , aims at:  further strengthening the 
independence, administrative capacity, and supe rvisory authority of HAKOM;  providing more 
efficient legal protection mechanisms for the right s of end-users;  and promoting competition and 
                                                      
72 Croatia's first mobile operator was Cronet, the m obile subsidiary of the state-owned HT after the 
separation of Croatian Post and Telecommunications (HPT ) into Croatian Post (HP) and Croatian Telecom (HT) 
in January 1999.  In 2003, HT assembled all of its mobile activities under a single brand, HT-Mobile.  In 
October 2004, HT-Mobile became T-Mobile Croatia.  Se e Eastern Europe Telecom-W eek online information.  
Viewed at:  http://cis-russian-telecoms-news. com/mobile-telecoms-market-overviews/croatia. 
73 VIPnet, a subsidiary of the Mobilkom Austria Group, was the first privately owned company to 
launch a mobile network in Croatia.  VIPnet introduced many  services previously unavai lable in Croatia such as 
SMS and pre-paid service plans.  See Eastern Europe Te lecom-Week online information.  Viewed at:  http://cis-
russian-telecoms-news.com/mobile-t elecoms-market-overviews/croatia. 
74 Tele2 is a joint investment company of Tele2 AB from Sweden and nine local investors. 
75 In terms of revenues, T-Mobile Hrvatska had 51.75% of the mobile network, followed by VIPnet 
(41.2%), and Tele2 (7%).  See HAKOM online information.  Viewed at:  http://www.hakom.hr/default. 
aspx?id=29. 
76 HAKOM's decisions and other administrative acts may not be appealed, but administrative 
proceedings may be initiated in the Administrative Court of Croatia.  Final decisions and other administrative acts of HAKOM may not be annulled or repealed on the basis of supervision rights, or repealed under 
emergency procedures, or be made null and void by a competent body.  Before adopting decisions and other 
administrative acts with significant influence on the relevant market, HAKOM must publish a proposal on the measure with the aim of holding a public consultation to enable all interested parties to give their opinions, 
objections, and proposals. 
77 The Consumer Protection Unit replaced the Tel ecommunications Services Users Council which had 
been established under the Telecommunications Act of 2003 (OG 122/03, 158/03, 60/04 and 70/05). Croatia WT/TPR/S/227 
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prescribing remedies for operators with significant mark et power (SMP) so as to align legislation with 
the EU regulatory framework. 
58. The new general authorization regime under the Electronic Communications Act also 
replaced all existing licence (concession) agreements, telecommunications service licences, 
notifications, and other existing authorizations.  It  does not contain any legal instrument conferring 
exclusive rights on the operators, or hindering new operators from entering into the market.78  Any 
person (natural or legal) can provide electronic communications networks or services, according to 
the general authorization regime, after submitting an application to HAKOM.  Croatian and foreign 
companies are treated equally, and the licence app lication procedure is the same for fixed-line and 
mobile telephony.  Provision of electronic commun ications networks or services is subject to a 
notification and payment of an administrative fee.  Use of limited resources, like radio spectrum and numbers, are subject to general authorizations or i ndividual rights of use.  Fees for using numbers and 
radio spectrum comprise:  an administrative fee, which goes to HAKOM and a right-to-use fee, which 
goes to the state budget.
79  
59. Radio frequency spectrum management is re gulated by Chapter X of the Electronic 
Communications Act.  According to the author ities, provisions on the national radio frequency 
allocation table and radio frequency assignment pl ans are aligned with EU best practices.  
Furthermore, the Act aims at ensuring equal and non-discriminatory access to the electronic communications infrastructure and associated facilities for all operators on the market. 
60. Croatia adopted its Broadband Development Stra tegy on 13 October 2006, with the aim of 
further developing broadband Internet access by cr eating competitive conditions and stimulating new 
investments in the broadband infrastructure, technologies and services.  Grants are being provided to operators who will provide broadband Internet in certain  regions (regions of special state care, islands, 
and highland regions), in which there is insuffi cient commercial interest for development and 
investment in infrastructure. 
80 
61. The National Broadcasting Switchover Strategy (S trategy for Analogue to Digital Television 
Broadcasting Switchover) was adopted on 31 July 2008.  It stipulates fundamental strategic guidelines 
for the introduction of digital television in Croatia .  The complete digital television transmission and 
switch off of the analogue terrestrial television is scheduled for 1 January 2011.  On the proposal by 
HAKOM, in December 2008, MSTI adopted th e Ordinance (OG 148/08) on the switching from 
analogue to digital broadcasting of radio and television programmes and access to the multiplex 
positions in terrestrial digital broadcasting, whic h provides the legal basis for the introduction of 
digital television and the digita l terrestrial television switchover.81 
                                                      
78 Under Article 123(1) of the Act, the Concession Agreement for the Provision of Public Voice 
Services in Fixed Network between the Governme nt and HT, was terminated on 1 July 2008. 
79 This latter fee is calculated on the basis of formulas taking into account parameters such as number 
availability, number demand factor, coverage zone factor, and frequency bandwidth. 
80 Following the adoption of the Decision on dete rmining the reference offer conditions for excess 
telecommunications networks and infrastructure, a more efficient use of these networks and infrastructure is 
expected, enabling lower usage cost s and charges.  By granting licen ces for fixed wireless access (WiMAX) 
services throughout Croatia, HAKOM has encouraged br oadband services (public voice services and data 
services) in wireless access technology, which represents an alternative access infrastructure, thus contributing 
further to the development of broadband services. 
81 In the meantime, a public TV campaign has started with the aim of informing consumers of the 
possibilities of digital television and the switchover process.  The Switchover Strategy also enables the 
introduction and provision of new services or business models, the radio frequency spectrum will be released for new allocations and applications. WT/TPR/S/227 Trade Policy Review 
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62. As part of its efforts to harmonize with EU legislation on postal services, the Postal Services 
Act (OG 882/09) entered into force on 30 July 2009, replacing the Postal Act (OG 172/03, 15/04, 92/05 and 63/08).  The Postal Services Act aims to further liberalize the Croatian market.  Reserved universal postal services are stipulated together w ith the scope and quality of services to be provided 
to all users throughout Croatia (universal postal ser vice).  The Act on the Amendments to the Postal 
Act (OG 92/05) reduced the weight  limit for the reserved letter ser vices from 100 to 50 grams, and 
reduced the price limit from three times the public operator's tariff (fo r the first weight step) for the 
fastest letter category, to 2.5 times the public operator's tariff.
82  
63. The Strategy for Postal Services Market Deve lopment in the Republic of Croatia until 2013, 
and the Action Plan for the Implementation of th e Strategy were adopted on 19 March 2008.  The 
Strategy sets out principles and guidelines for the development of the postal services market, and the 
national priorities in maintaining and developing postal services.  The Strategy also establishes the 
gradual liberalization of postal services (full libe ralization is scheduled for 1 January 2013), while 
ensuring access to universal postal services.  
(iv) Transport 
(a) Overview 
64. Transport plays an important role in Croatia 's economic development, representing about 8% 
of GDP and employing around 80,000 people.  Du e to its geographical position, Croatia is 
strategically located to establish effective links  between western Europe and the Balkans and 
connecting central Europe and the Adriatic sea a nd the Mediterranean.  Croatia's main transport 
strategy is determined by the primary objective of integration into the Euro pean transport system.  
Transport in Croatia was first assessed in 1999 by  the Transport Development Strategy (OG 139/99).  
It foresees investment in transport of 5% of GDP (almost US$20 billion during 1998-2010), which is 
being complemented by European funds. 
65. In 2008, road transport represented 70.7% of Cr oatia's total goods transport, followed by sea 
(19.6%), railway (9.5%), and inland water (0.2%).  In terms of passenger transport, railway made up 
47.8% of the total, followed by road (41. 9%), sea (8.7%), and air transport (1.6%).83  The backbone of 
the transport network in Croatia consists of the sections of the Pan-European transport corridors V, 
VII and X and their branches.84  Croatia's existing network of primary roads, sea ports, motorways, 
and aviation is comparatively well developed and provides good area coverage, but there is a clear 
backlog of infrastructure rehabilitation and modern ization in the railway and inland waterways 
subsectors, both of which have lost out heav ily in the share of the transport market.85  
66. The Ministry of the Sea, Transport and In frastructure (MSTI), formerly known as the 
Ministry of the Sea, Tourism, Transport and Deve lopment (MSTTD), is respons ible for administrative 
and other affairs relating to general transport policy, i.e. road traffi c, railway, air traffic, maritime 
                                                      
82 The Act entered into force on 1 July 2008, with the exception of provisions on the reduction of the 
reserved services area, which were stipulat ed to enter into force on 1 January 2010. 
83 Central Bureau of Statistics (2009). 
84 The inclusion of Croatia into the wider European transport network dates back to the Third Pan-
European Transport Conference, held in Helsinki in June 1997, when ten Pan-European multimodal corridors 
were complemented by segments in countries in the south-east of Europe, including Croatia's sections of 
Corridor X (Salzburg-Villach-Ljubljana-Zagreb-Belgrade-Skopje-Solun) and Corridor VII (Danube river system 
with the Sava waterway), as well as of the Corridor branches Xa (Graz-Maribor-Zagreb), Vb (Rijeka-Zadar-
Varazdin-Budapest), and Vc (Ploce-Sarajevo-Osijek-Budapest). 
85 Ministry of Sea, Tourism, Transport and Development (2007b). Croatia WT/TPR/S/227 
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traffic, and inland waterways management;  prot ection of Adriatic Sea;  and organizing the 
preparation of strategic infrastructure projects and investment programmes.86  Transport policy 
objectives include the provision of cost-effective,  modern transport servi ces for persons and goods, 
protection of public safety and the environment, a nd the extension of trans-European networks to 
Croatia. 
(b) Air transport 67. Air transport in Croatia is dominated by Croatia  Airlines, which was established as a limited 
company and is 99% state-owned. Airports in Croatia are also majority state-owned limited 
companies;  the state owns around 55% and the rest  is divided among various local authorities acting 
as shareholders.  Croatia has nine international airports (Zagreb, Dubrovnik, Split, Zadar, Pula, 
Rijeka, Osijek, Brac, and Mali Losinj), for public ai r transport (scheduled and charter).  International 
airports are fitted with devices and equipment corresponding to international safety and security 
standards.  Nonetheless, standards in some of Croa tia's airports are below those in the EU, especially 
with respect to passenger and cargos handling proce dures.  Those airports are being modernized and 
properly equipped in line with international sta ndards in order to be competitive internationally.
87  
68. During the last few years Croatia has modified its air transport legislation in order to 
harmonize it with the acquis .  A new Aviation Act was adopted in June 2009 with the objective of 
better regulating commercial air transport activities and improving, inter alia , the functioning of 
airports, granting of aeronautical licensing, airs pace management, and civil aviation safety and 
security.  An independent Croatian Civil Aviatio n Agency (CCAA) has been established and has 
started to function. Investors in civil air trans port services require approvals and certificates from the 
CCAA.  According to the authorities, there is no discrimination, based on nationality, between local and foreign entities in the approval procedure.  The CCAA, inter alia , has responsibility for the 
regulation and oversight of Croatia's civil aviati on, including certifying civil aviation products and 
services. 
69. Public air transport services in Croatia may be performed by legal entities registered for this 
activity, on condition that gene ral requirements and requirements under the Air Transport Act 
(OG 69/09) and its secondary legislation are met, as well as other relevant requirements under EU 
regulations.  Scheduled and charter air carriers may be organized as companies registered in Croatia 
to provide air services as their main activity if they hold an operating licence and air operators 
certificate (AOC);  and are fully or majority-owned by a domestic legal entity or natural person, or by 
a natural person of any of the European Common Aviation Area (ECAA) party.  Air carriers must 
have at least one owned or leased (dry lease) aircraft, of adequate category, registered with the Croatian Register of Civil Aircraft, and must m eet economic, financial, and other requirements, 
depending on the type of transport (Table AII.1). 
70. Cabotage is not permitted (i.e. foreign airlines are not allowed to carry domestic traffic 
between locations within Croatia).
88  Air fares, routes, and capacities (domestic and international) are 
set freely, and are not subject to government contro ls.  Croatia has signed 57 bilateral agreements on 
air transport.  It is also a party to the ECAA.  An open-sky agreement with the United States has been 
agreed and initialled but not signed yet. 
                                                      
86 Other institutions concerned with transport ar e:  Croatian Roads, Croatian Highways, Croatian 
Railways Group, Agency for Inland Waterways, Port Authorities, Ministry of Culture, and Ministry for 
Environmental Protection, Physical Planning and Construction. 
87 Ministry of the Sea, Tourism, Transport and Development (2007a). 
88 According to the authorities, cabotage is the only remaining air traffic right still to be liberalized.  It 
is under discussion in  the process of Croatia's accession to the EU. WT/TPR/S/227 Trade Policy Review 
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(c) Maritime transport and ports 
71. The Croatian coastline is 1,400 km in length.   The maritime subsector comprises mainly 
seaports and river ports through inland waterways.  There are two main cargo seaports (Rijeka and 
Ploce), and three major ports for passenger traffic (Zadar, Split and Dubrovnik).  River ports open for 
international traffic are Vukovar, Osijek, Slavonski  Brod and Sisak.  Cargo turnover in Croatia's sea 
ports increased strongly from 11,833 million tonnes (mt) in 2001 to 19,113 mt in 2006.  Due to recent 
investments89, port infrastructure and equipment are approaching EU standards.  According to the 
MSTTD's Transport Operational Programme 2007-09,  one of the priorities is to upgrade port 
infrastructure.90  In addition to modernizing the basic por t infrastructure, the safety and surveillance 
system in the port area needs to be enhanced.  Ports also need better connections to main road and rail 
corridors in order to improve integration with  the economic hinterland and conditions for the 
development of inter-modal transport. 
72. The most significant inland waterways in Croatia  are the Danube waterway  and the Sava river 
inland waterway;  both are under-utilized as transport resources.  The river ports suffered heavy damage during the war; their infrastructure is in a poor state and inadequate for the provision of 
quality services.  There is a potential for the inland wa terways to be used in combination with railway 
transport as an alternative to the dominant road tran sport network.  Croatia's development strategy in 
relation to the infrastructure of inland waterways is  targeted at increasing their safety and efficiency 
and improving navigation standards through upgrading the system.  Croatian river ports also require 
qualitative and technological modernization to sa tisfy existing and expected transport demand. 
73. Croatia has signed 12 bilateral agreements on maritime trans port and 5 on inland waterway 
transport.  Ships within Croatian territorial waters (irrespective of their flags) must comply with the 
regulations of the Croatian Maritime Authority, an  autonomous entity under the MSTI.  The Authority 
is in charge of the supervision, design, and implementation of maritime regulations, including 
granting the right to sail under the Croatian flag.  Ports and navigation infrastructure are managed by 
each port administration, also under the responsib ility of the MSTI.  A EU maritime safety 
verification mission conducted in March 2009, identifie d some important shortcomings that hamper 
Croatia's ability to implement the acquis .
91  MSTI has adopted measures to deal with the identified 
shortcomings. 
74. Under Croatian legislation on civil maritime tr ansport, free and non-discriminatory access of 
international maritime and fluvial transport of goods  and/or persons is permitt ed in Croatian harbours, 
irrespective of the registration nationality of the sh ip.  Provided the required technical standards are 
fulfilled, the right to sail under the Croatian flag is  given to:  (i) ships owned by Croatian natural 
persons residing in Croatia or Cr oatian legal entities having their business seat in Croatia;  (ii) ships 
entirely or partially owned by foreign entities or Croatian natural persons residing or having their 
business seat outside of Croatia, provided the ship opera tor or company of the ship is a natural person 
residing in Croatia or Croatian legal entity having th eir business seat in Croatia or;  (iii) ships entirely 
or partially owned by foreign natural persons or fo reign legal entities on the condition that this entry 
has been authorized by MSTI.92 
75. Within Croatian territorial waters, the followi ng activities are reserved for ships flying the 
Croatian flag: carriage between Croatian harbour s (cabotage);  assistance and rescue operations;  
                                                      
89 During 2004-07, Croatia invested in those ports over €52 million for large infrastructural projects.  In 
addition, around HRK 40 million was invested in maintenance of port infrastructure. 
90 Ministry of the Sea, Tourism, Transport and Development (2007b). 
91 European Commission (2009). 
92 Article 187 of the Maritime Code sets out the criteria for entry into the ship register.   Croatia WT/TPR/S/227 
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removal of wrecks;  works of realization and conti nuation of hydro technical constructions;  fishing;  
and exploration and explo itation of resources.  However, ships registered under foreign flags may 
engage in fishing, and in  resources exploration and exploitation, subject to approval by the competent 
authorities. 
(d) Road and railway transport 
76. Croatia has a dense network of roads and mo torways, totalling about 30,000 km, of which 
1,198 km. are motorway.  Road transport represents  about 50% of total tr ansported goods.  Croatian 
road transport is largely more developed than ot her transport sectors, albe it unevenly;  a good quality 
motorway network coexists with sub-optimal national, county, and local roads.  This is mainly due to 
insufficient investment in maintenance, which also affects safety aspects of road transport.93  Since the 
adoption of the Public Roads Construction and Maintenance Programme 2005-08, the quality of the 
road network has improved.  In 2008, two new motorways were opened to traffic and one was 
widened to accommodate additional traffic.94  Motorways are operated by four companies, including 
the state-owned Hrvatske autoceste which operates all toll motorways except for those in concession. 
77. An approval is required to undertake various road transport business activities, including:  
(i) in-country road passenger transport, scheduled a nd chartered, taxi passenger and cargo transport;  
(ii) scheduled international public road trans port passenger and cargo transport;  and (iii) service 
stations.  The certificate of approval is issued by co unty offices or the City of Zagreb office competent 
for transport activities, for activities in (i) and (iii)  or by MSTI for activities in (ii), provided the 
requirements of the Road Transport Act (OG 178/04 a nd 63/08, as amended) have been met (Table 
AII.1).  Croatia has signed 34 bilateral agreements on road transport.  Cabotage is not permitted. 
78. Although Croatia exceeds the EU average regard ing the length of the railway network per 
100,000 inhabitants, only 9% of Croatian railways ha ve been fitted with double tracks, and only 36% 
of the total has been electrified, placing Croatia be hind other central and eastern European countries.95  
Following the break-up of the Former Yugoslavia, there has been minimal investment in railway 
infrastructure;  coupled with the serious damage in flicted on the railway sector as a result of the war, 
this has contributed to the fall in traffic on the ra ilways since independence.  As a result, in 2000, the 
Parliament adopted the strategy on restructuring and modernization of  HŽ, the state-owned national 
railways company.  Through assistance from the World Bank, Croatia embarked on the Railway Modernization and Restructuring Project of HŽ with the aim of making it competitive, and 
                                                     
 
93 In 2005, Croatia had 24 km of motorways per 100,000 inhabitants, ex ceeding the EU-15 average 
(14 km per 100,000 inhabitants).  No netheless, only 35% of national ro ads had a good quality asphalt surface. 
94 The two new motorways are the A1 (Zagreb-Split–Plo če;  40 km) and A4 (Zagreb–Gori čan;  1.5 
km), while the renovated motorway is the A6 (Zagreb-Rijeka;  36.9 km).  According to the Strategy of 
Transport Development, Croatia aims to have 1,365 km of motorways by 2013.  
95 The railway line between Dobova and Tovarnik, operating the length of Croatia east-west via 
Zagreb, is the country's most important, and part of the Pan-European corridor X.  It is also the most advanced 
and busiest, being completely electrified and consisting mostly of double tracks.  Most other rail lines have obsolete technical and t echnological parameters. WT/TPR/S/227 Trade Policy Review 
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diminishing its deficit and th e financial burden on the budget.96  HŽ was divided in to five independent 
companies97;  privatization is to be the final stage of the railway reform (Chapter III(3)(ii)).   
79. Croatia has signed 11 bilatera l agreements on rail transport;  cabotage is not permitted.  
(v) Tourism 
80. Croatia has a long-established tradition in touris m, with a rich and diversify natural and 
cultural heritage that includes various sites and monuments protected by UNESCO98, as well as eco-
tourism activities especially along the Adriatic coast.  It ranks 20th in the world in terms of tourism 
destinations with 11.3 million international tour ist arrivals in 2008, up from 9.4 million in 2004 
(Table IV.5).99  The subsector is an important source of  foreign exchange:  the surplus of travel 
services rose from €4,822 million in 2004 to €6,694 milli on in 2008.  The contribution of travel and 
tourism to GDP and to employment is estimated at  around 15.7% and 6%, respectively, for 2008.  The 
number of licensed tourist beds rose from 909,000 in 2005 to 967,000 in 2008.100  Most tourists are 
Europeans (78% of total visitors in 2008).  The hotels occupancy rate was 37% in 2008. 
Table IV.5 
Selected tourism indicators, 2004-08 
 2004 2005 2006 2007 2008 
Revenues from international touris m (€ million) 5,506 5,999 6,293 6,753 7,449 
Tourist arrivals ('000) 9,412 9,995 10,384 11,163 11,261 
Tourist overnights ('000) 47,797 51,421 53,006 56,006 57,103 
Number of beds ('000) 871 909 926 944 969 
Average number of nights per bed 55 57 58 59 59 
Average number of nights per arrival 5.1 5.1 5.1 5.0 5.1 
 
Source : Information provided by the Croatian authorities.  
81. The Ministry of Tourism is in charge of the subsector101, including oversight and compliance 
with the legislation102, setting up of strategies and policies;  as  well as classification and certification 
of most tourist facilities, including hotels and r estaurants.  The Croatian National Tourist Board, 
founded in 1995, is responsible for marketing and promoting tourism in  and outside Croatia.  Some of 
its main tourism policy goals include to:  profile Croa tia as one of the best tourist destinations in the 
                                                      
96 The project has seven components, including track renewal and maintenance of core routes to help 
strengthen the existing profitable transit traffic, st rengthen the prospects of new traffic, and decrease 
maintenance costs;  and rehabilitation of traction units and spare parts, to allow daily availability of the 
rehabilitated traction units to reach at least 80%.  See World Bank online information.  Viewed at: 
http://web.worldbank.org/external/projects/main?P rojectid=P039161&theSitePK=40941&piPK=64302789&pag
ePK=64330676&menuPK=64282137&Type=Implementation. 
97 These are:  Croatian Railways Holding Limited Li ability Company for Business Services;  HŽ Cargo 
Limited Liability Company for Cargo Transport;  HŽ Passenger Transport Limited Liability Company;  HŽ 
Train Traction Limited Liability Company for Train Traction;  and HŽ Infrastructure Limited Liability 
Company for Management, Maintenance and Building of Railway Infrastructure. 
98 These are:  Plitvice Lakes; Sibenik Cathedral, Euphr asian Basilica in Porec;  the old towns of Trogir, 
Dubrovnik and Split with its Diocletian's Palace. 
99 World Tourism Organization online information.   Viewed at:  http://w ww.unwto.org/index.php. 
100 About a quarter of Croatia's total hotels and a th ird of total beds are rated 4-star and 5-star. 
101 The Ministry of Tourism has been an independent ministry, except during 2004-07 when it was part 
of the Ministry of the Sea, Tourism, Transport and Development.  It was re-established in January 2008. 
102 Tourism legislation comprises:  Act on the Provision of Tourism Services (OG 68/07);  Hospitality 
and Catering Industry Act (OG 138/06, 158/08 and 43/09);  and Tourist Tax Act (OG 152/08 and 58/09). Croatia WT/TPR/S/227 
 Page 95 
 
 
Mediterranean and Europe;  create an efficient a nd internationally competitive subsector with a view 
to making it more profitable;  meet the requirement s of foreign and domestic tourists in terms of 
overall facilities; concentrate on high quality tourism;  and preserve its  natural and cultural assets.  A 
key objective under Croatia's Strategic Development Fr amework for 2006-13 is to foster tourism with 
further development of infrastructure (Chapter II(1))103, while Croatian Tourism Development 2003-
10 sets out the strategic framework for developing to urism in a sustainable manner. The Ministry of 
Tourism is currently preparing its Master Plan for the subsector. 
82. The Government is very active in tourism gr anting, various specific incentives and loans 
programmes through the Croatian Bank for Reco nstruction and Development (HBOR) and the 
participation of commercial banks.  Under th e incentive for Success, , 476 loans were approved 
during 1 December 2002 to 2 March 2009, amounting to HRK 1,957 million;  under Heritage in 
Tourism, 580 projects were co-financed amounting to  HRK 36 million over 2000-08;  under Thematic 
Routes, 128 projects were co-financed amounting to HRK 7.4 million during 2007 and 2008;  and 
under Original Souvenirs, 234 projects were co-fina nced amounting to HRK 4.1 million in 2007-08.  
Investors in tourism also have access to incen tives granted under the Investment Promotion Act 
(Chapter III(3)(i)).  A Tourism Fund is to be estab lished in 2010.  All hotel bills include 10% VAT 
(Chapter III(1)(iv)(d)). 
83. Foreign companies have increased their role in t ourism during the last few years;  there is no 
limitation on foreign investment.  Foreign and dom estic companies (e.g. hotels, restaurants, tour 
operators, guides) set their own maximum prices.  According to the authorities, the Ministry of 
Tourism does not regulate prices in the subsector. 
(vi) Professional services 
(a) Legal services 
84. The legal profession in Croatia is regulated by the Legal Profession Act (OG 117/08).  
According to the Croatian Constitution, the lega l profession is defined as an independent and 
autonomous service.  The Croatian Bar Association re presents attorneys-at-law as part of the legal 
profession.  All attorneys must be members of the Bar Association, an independent organization with 
the capacity of a legal person. 
85. Since 21 October 2008, subsidiaries of law companies that are registered in EU member states 
or any WTO Member may be established in Croatia , in line with international agreements, the 
Companies Act (OG 111/93, 34/99, 118/03, 107/07, and 146/08), and the Legal Profession Act.  
These subsidiaries are entitled to provide legal se rvices in Croatia, including counselling services on 
their domestic law, EU law and/or international la w.  National treatment will apply for attorneys and 
law companies from EU member states only,  upon Croatia's accession to the EU.  
86. Croatia's GATS commitments on legal services do not extend to the representation of parties 
before its domestic courts.  Howe ver, if international elements are involved, lawyers who are 
members of bar associations of othe r countries may represent parties in ad hoc  (arbitration) courts. 
Consultancy services on home country, foreign, and international law may be provided without 
limitation. 
                                                      
103 An additional 50,000 beds in high-rating hotels are expected during 2008-11, including through 
"Greenfield investments" to, inter alia , redevelop former military facilities and existing 2-star and 3-star hotels. WT/TPR/S/227 Trade Policy Review 
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(b) Accounting and auditing services 
87. The accounting profession is not regulated in Croatia, therefore there are no certification 
requirements for accountants.  Auditors, on the other ha nd, require certification, which is regulated by 
the Audit Act (OG 146/05, 139/08) and implemente d by the Croatian Chamber of Auditors. 
88. Certified auditors may be Croatian citizens or foreign citizens holding a foreign document 
that has been formally recognized by the Chambe r and proves that he/she is qualified as a certified 
auditor.  The foreign document will be forma lly recognized after the candidate's knowledge of 
Croatia's legislation required for carrying out aud its, has been tested in the Croatian language.  
89. Foreign audit firms may provide audit service s in Croatia, where they have established a 
branch, in accordance with the provisi ons of the Companies Act.  The provisions of this Act apply to 
the operation of foreign audit firms based on the prin ciple of reciprocity between Croatia, EU member 
states, and third countries.104  
90. According to Croatia's GATS commitments, aud iting in Croatia may be performed only by 
legal persons.  Natural persons can become legal persons through registration with a commercial 
court. Auditing firms not established in Croatia mu st perform joint final audit with domestic firms 
according to the International Standards on Auditing. 
(c) Architectural and engineering services 
91. Architectural and engineering services in Croatia  are regulated by the Act on Architectural 
and Engineering Services in Physical Planning a nd Construction (OG 152/08 and 124/09).  According 
to the Act, an architect is a person holding a degree from the appropriate technical faculty in Croatia, 
with the title of graduate architect.  Similarly,  an engineer is a person holding a degree from the 
appropriate technical faculty in Croatia, with the titl e of graduate civil engineer, graduate surveying 
engineer, graduate mechanical engin eer, or graduate electrical engineer. 
92. A foreign architect or engineer is entitled to undertake activities of designing and expert 
supervision of construction, subject to obtaining  consent from the appropriate Croatian chamber.  
Consent may be granted, under the precondition of reciprocity, to a foreign certificated person, 
provided that he/she possesses th e adequate qualifications require d for performing these activities.  
The precondition of reciprocity does not apply to a foreign certificated person from a WTO Member.  
93. Croatia has not undertaken any GATS commitm ents for architectural and engineering 
services.  
                                                      
104 Article 4(2) of the Audit Act (OG 146/05 and 139/08). Croatia WT/TPR/S/227 
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