RESTRICTEDWORLD TRADE
ORGANIZATIONWT/ACC/807/5
5 May 2000
(00-1852)
Working Party on the Accession of the
Former Yugoslav Republic of MacedoniaOriginal:  English
ACCESSION OF THE FORMER YUGOSLAV REPUBLIC OF MACEDONIA
Questions and Replies
to the Memorandum on the Foreign Trade Regime
(Document WT/ACC/807/2)
In a communication, dated 8 December 1994 (P C/W/18), the Government of the Former
Yugoslav Republic of Macedonia applied for accession under Article XII of the Marrakesh AgreementEstablishing the World Trade Organization (WTO).  Having regard to the Decision adopted by the
General Council on 31 January 1995, the existing Working Party on the Accession of Former Yugoslav
Republic of Macedonia to the GATT 1947 continued as a WTO Working Party with the following terms
of reference:  "To examine the application of th e Government of the Former Yugoslav Republic of
Macedonia to accede to the WTO Agreement under Artic le XII, and to submit to the General Council
recommendations which may include a draft Protocol  of Accession."  The membership is open to all
WTO Members indicating their wish to serve on the Working Party.
In document WT/ACC/807/2, Members had been invited to submit questions in writing
concerning the foreign trade regime of Macedonia.  The questions submitted by Members and the
replies thereto provided by the author ities of Macedonia are reproduced hereunder
1.
                                                     
1 Please note that Annexes 1 to 8 will be circul ated in Addendum 1 (WT/ACC/807/5/Add.1) to this
document.WT/ACC/807/5
Page i
TABLE OF CONTENTS
Page No. Question
No.
II. ECONOMY, ECONOMIC POLICIES AND FOREIGN
TRADE
1. Economy
(b) Current economic situation 1 1-2
2. Economic policies
(a) Main directions of the ongoing economic policies 2 3-14(b) Monetary and fiscal policies 14 15-16
(iii) Sales Tax on Goods 16 17-26
(iv) Profit tax 24 27
(c) Foreign exchange and payment system, relations with the
International Monetary Fund, application of foreign exchangecontrols24 28-36
(d) Foreign and domestic investment policies 27 37
(e) Competition policies 28 38-40
III. FRAMEWORK FOR MAKING AND ENFORCING
POLICIES AFFECTING FOREIGN TRADE IN GOODS
AND TRADE IN SERVICES
1. Powers of Executive, Legislative and Judicial Branches of
Government29 41
2. Government Entities Responsible for Making and
Implementing Policies Affecting Foreign Trade29 42-43
3. Division of Authority Between Central and Sub-central
Governments30 44
4. Any Legislative Plans to Change the Regulatory Regime 30 45-46
5. Laws and Legal Acts 31 47-52
6. Description of Judicial a nd Arbitral or Administrative
Tribunals or Procedure35 53-54
IV. POLICIES AFFECTING TRADE IN GOODS
1. Import Regulation
(a) Registration requirements for engaging in importing 39 55-64
(b) Characteristics of national tariff 42 65-71(c) Tariff quotas, tariff exemptions 43 72-73
(d) Other duties and charges 44 74-79
(e) Quantitative import restrictions, including prohibitions, quotas
and licensing systems46 80-83
(f) Import licensing procedures 47 84-103
(g) Other border measures 52 104
(h) Customs valuation 53 105-111
(i) Other customs formalities 54 112-113
(j) Pre-shipment inspection 55 114-117
(l) Rules of Origin 56 118-124(m) Anti-dumping regime 57 125-131
(n) Countervailing duty regime 59 132-134
(o) Safeguard regime 60 135-137
2. Export Regulation
(a) Registration requirements for engaging in exporting 61 138WT/ACC/807/5
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Page No. Question
No.
(b) Customs tariff nomenclature, types of duties, duty rates, etc. 62 139
(c) Quantitative export restrictions, including prohibitions, quotas
and licensing systems62 140-143
(d) Export licensing procedures 63 144-148
(e) Other measures 64 149
(i) Import duty drawback schemes 65 150-151
3. Internal Policies, Affecting Foreign Trade in Goods
(b) Technical regulations and standards 65 152-168
(c) Sanitary and phytosanitary measures 70 169-178
(d) Trade-related investment measures 76 179-181(i) Definition of foreign investors and foreign investment 77 182-183
(ii) Rights of foreign investors 77 184-186
(iv) Foreign investment incentives 79 187
(e) State-trading practices 79 188-200
(g) Free economic zones 83 201-205(j) Government-mandated counter-trade and barter 85 206-210
(l) Government procurement practices 86 211-212
4. Policies Affecting Foreign Trade in Agricultural Products 87 213
(a) Imports 87 214-225
(b) Exports 90 226-227(e) Internal policies 90 228-230
5. Policies Affecting Foreign Trade in Other Sectors 91 231-232
V. TRADE-RELATED INTELLECTUAL PROPERTY REGIME
1. General 91 2332. Substantive Standards of Protection
(a) Copyright and related rights 92 234-235
(b) Trademarks, including service marks 92 236-240
(c) Patents 94 241-242
(h) Requirements on undisclosed information, including trade
secrets and test data96 243
VI. TRADE-RELATED SERVICES REGIME
1. General 96 244-261
- Banking 101 262-266
- Insurance 102 267-269
- Telecommunications 103 270-272
VII. INSTITUTIONAL BASE FOR TRADE AND ECONOMIC
RELATIONS WITH THIRD COUNTRIES
1. Bilateral or Plurilateral Agreements Relating to Foreign Trade
in Goods and Trade in Services105 273-288WT/ACC/807/5
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Page No.
ATTACHMENT 1
The Macroeconomic Policy of the Republic of Macedonia for 2000 111
Documentation for the Macroeconomic Policy of the Republic of Macedonia 129Measures for Realization of the Macroeconomic Policy 143
ATTACHMENT 2
Privatization:  Status Report as of 31 December 1999 152
ATTACHMENT 3
Regulations on the Quality of Agricultural and Food Products 156
ATTACHMENT 4
List of Regulations under the Ministry of Health Pertaining to Health Safety of Food 159
ATTACHMENT 5
Bilateral Agreements on Protection of Investments 160WT/ACC/807/5
Page 1
II. ECONOMY, ECONOMIC POLICIES AND FOREIGN TRADE
1. Economy
(b) Current economic situation
Question 1
As outlined in WT/ACC/807/2 and 3, in an economically troubled region, Macedonia had
achieved impressive macroeconomic stabilization by mid - 1996. Macedonia’s hard won
macroeconomic stability has been weakened, howe ver, first by lagging structural reform and
recently by the severe external shocks due to the events of Kosovo. We and other members of
the international community are contributing a dditional economic assistance to Macedonia’s
efforts to manage the effects, which will require further macroeconomic adjustment, including
the external account and accelerated structural reform.
What are Macedonia’s plans for macroeconomic adjustment, including the external account?
Answer:
The Republic of Macedonia is committed to building an open economy, based on principles
of private ownership, market economy, state deregulation and liberalized foreign trade.
In spite of the difficult conditions, the Republic of Macedonia continues to implement the
policy of stabilization of the economy and structural reforms.
 The Government of the Republic of Macedonia gives a special attention to the growth in the
production as a base condition for the macroeconomic stabilization. In this context, the qualitative
restructuring of the economy depends greatly on the increase in exports and, as a result, an increase in
the employment.
To support the above-mentioned processes, changes are implemented in the monetary,
financial, tax and customs systems and the internat ional trade. Reforms are carried out in the public
administration, judiciary, education, culture, social policy, health and the protection of the
environment with an emphasis on the adjustment to the international standards.
In December 1999, the Government of the Republic of Macedonia adopted the
Macroeconomic Policy for 2000 (Official Gazette no.86/99) – see Attachment 1.
According to the Macroeconomic Policy, the English translation of which is attached,
projected macroeconomic indicators for the year 2000 are as follows:
− Real increase in the GDP of 6.0 per cent (5.0 per cent in the agriculture and 9.0 per
cent in the industrial sector)
− Nominal increase in exports of goods of 10.3 per cent
− Nominal increase in imports of goods of 13.1 per cent
− Average annual increase of 4.0 per cent in retail prices
− Maintenance of average salaries at the 1998 level and increase in the number of
employees by 2.0 per cent
The Macroeconomic Policy for 2000 describes in detail targets and measures for achieving
the macroeconomic stability and restructuring of the economy. This includes measures in income
policy regarding salaries and prices, fiscal policy - strict control of public expenditures, changes in theWT/ACC/807/5
Page 2
tax system and improvement of the tax administration, monetary policy - optimal use of money and
credits, foreign sector - creation of conditions for more dynamic exports of goods and services, real
sector - more favorable grounds for domestic and foreign investments and encouragement of small
and medium-sized enterprises, and strengthening the institutional setting and legal framework for
foreign direct investments.
The structural reforms will be addressed by an appropriate application of the market and
commercial criteria and gradually abandoning the “soft budget financing”.
The corporation management will be improved by establishing  regulations in the area of
trading with long-term securities, establishment of  investment funds and changes in the insurance
schemes.
The structural adjustment will be carried out in the banking sector, labour market and social
protection and in the health and pension sector.
The Macroeconomic Policy contains a table elaborating on directions, types of measures
(legislative, institutional or other (financing, programs, education)), ministries or bodies responsible
for the implementation and timing.
The macroeconomic adjustment of the external account will be addressed through
adjustments in the balance of payments, rational use of the foreign capital and inflow of funds toforeign currency accounts. The exports will mainly be oriented to the developed countries, as well as
Eastern European countries which have traditionally been main trading partners of the Republic of
Macedonia before the independence and in 1999 participated in the exports with only 6.3 per cent.
At present, the Republic of Macedonia is in the process of negotiating the conditions for new
credits for support of the structural reforms with  the International Monetary Fund and the World
Bank.
Question 2
Is the government considering implementing balance-of-payments-related trade measures?
Answer:
At present, the government is not intending to impose any restrictive measures for balance of
payment purposes. However, such measures are not ruled out in the future if necessary. In this case,
their implementation would be in conformity with the provisions of Article XII of GATT 1994 and
the Uruguay Understanding on Balance-of -Payment Provisions of GATT 1994.
2. Economic policies
(a) Main directions of the ongoing economic policies
Question 3
Please update the Working party on the state of privatization. What industries have and will be
privatized? Please provide a time table for those industries which will be privatized.WT/ACC/807/5
Page 3
Answer:
According to the existing legislation (Law on Transformation of Enterprises with Social
Capital - Official Gazette of RM 38/93, 48/93, 21/98, 25/99, 39/99, 81/99; Law on Transformation of
Enterprises and Co-operatives in the Agricultural Se ctor - Official Gazette of RM 19/96, 25/99; Law
on Privatization of the State Capital in Companies - Official Gazette of RM 37/96, 25/99) 1,600enterprises have been subject to privatization (1,250 non-agricultural and 350 agricultural).
The report of the Agency for Privatization of 31 December 1999, indicates that by that date
1,488 enterprises with an estimated value equivalent in US$ 2,126 billion
2 and employing 216,000
people were privatized. (See the Status Re port in Attachment 2 to the Document).
At present, privatization is not anticipated in the following entities:
− Enterprises and organizations that conduct activities of special national interest;
− Public utilities;
− Enterprises and legal entities that conserve water, forests, land and other public
goods;
− Enterprises with a monopoly status according to the Law are to be privatized under
separate laws.
The Law on Transformation of Enterprises with Social Capital provides for the following:
a) Employees are offered an initial discount of 30 per cent plus 1 per cent for each year
of work in the enterprise from the appraised value. They can buy shares at a discount
rate of up to an amount not higher than DM 25,000 and not more than 30 per cent ofthe appraised value of the company. Payment can be made in five-year instalments
without down payment and with a two-year grace period.
b) At starting the privatization procedure an enterprise must automatically transfer 15
per cent of the social capital (in a form of shares or stocks) to the Pension Fund.
These are non-voting, preferred and participating stocks and they are expected to earn2 per cent fixed dividend.
The Law on Transformation of Enterprises with Social Capital offers different privatization
methods according to the size of the enterprise
3 based on the number of employees:
1. Small enterprises (Article 41):
− Employees buyout
− Sale of a part of the enterprise (in a form of shares or stocks)
                                                     
2 According to Article 9 of the Law on Transformation of Enterprises with Social Capital, the appraised
value of companies is expressed in MDen and DM, using the average exchange rate at the day of evaluation.
3 According to the Law on Transformation of Enterprises with Social Capital, two out of three
conditions should be satisfied for classification of an enterprise in one of the following categories:
Small enterprise:  Under 50 employees, total annual revenues under 8,000 average monthly salaries in
the Republic of Macedonia and book value of operating assets up to 6,000 average monthly salaries.  (In 1999an average monthly salary was equal to 9,664.00 MDen).
Medium-sized enterprise:  Between 50 and 250 employees, total annual revenues up to 40,000 average
monthly salaries in the Republic of Macedonia and book value of operating assets up to 30,000 average monthly
salaries.
Large enterprise:  An enterprise exceeding these limits.WT/ACC/807/5
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2. Medium-sized enterprises (Article 55):
− Sale of the enterprise or a part of it
− Buy-out of the enterprise
− Management buy-out
− Issue of shares for additional investment
− Debt/equity swap
3. Large enterprises ( Article 71):
− Large enterprises use the same methods as the medium-sized enterprises,
with the only difference that the down payment for management buy-out is
10 per cent and for the issue of shares for additional investment is 15 percent.
In addition, the following methods of privatization can be applied to all enterprises,
irrespective to their size:
− Leasing (Articles 73-75)
− Sale of all assets of the enterprise (Articles 76-79);
− Transformation of enterprises under the bankruptcy procedure (Articles 80-86).
The Status Report attached (Attachment 2) overviews the status of privatization as of
31 December 1999: a) by sectors; b) methods of privatization; and c) enterprises in process of
privatization.
a) Privatized enterprises by sectors
Majority of privatized enterprises belong to the manufacturing sector (451). They account for
30.3 per cent of the total number of privatized enterprises and their share is 60.9 per cent in the
number of employees and 65.2 per cent in the estimated value.
It is followed by the agriculture sector (346 enterprises), representing 23.3 per cent of the total
number of privatized enterprises, with a share of 7.1 per cent in the number of employees and 6.4 per
cent in the estimated value. The privatization in this sector began only in 1996 and is still carried out.Enterprises that were already privatized are either  cooperatives or small enterprises with a small
number of employees and a low value.
328 privatized enterprises in the trade sector represent a share of 22.0 per cent of the total, 7.9
per cent of the total number of employees and 11.4 per cent of the total estimated value, respectively.
Though the construction sector accounts only for a small part in the total number of privatized
enterprises (112 or a share of 7.5 per cent), its share in the total number of employees is relatively
high (14.7 per cent) as it is a labour intensive sector and encompasses largest  enterprises inMacedonia.
b) Privatized enterprises by methods of privatization
Most enterprises (384 enterprises, or around 26 per cent) were privatized by the employees’
buy-out method. They employed 17,738 persons (8 per cent of the total number) and their equity
accounted for only 4 per cent in the total equity. Though the employees’ buy-out was the mostfrequent method used, only a small share of the equity has been privatized by this method.  This is
attributable to the fact that by the Law only small enterprises may use it.WT/ACC/807/5
Page 5
The next most frequently implemented method according to the number of privatized
enterprises was the management buy-out (247 enterprises or 17 per cent of the total). Compared to the
former method, the management buy-out shares were the highest with respect to the employment and
the equity value, employing 72,720 persons or around 34 per cent of the total, and with the equity of
34 per cent, respectively.
A significant part of privatization was carried out by the enterprise buy-out method. This
method was implemented in 149 enterprises (10 per cent of the total number of privatized
enterprises), employing 49,585 persons (23 per cent of the total), and accounting for 24 per cent of the
total equity of privatized enterprises.
From the data shown above it can be concluded that through the privatization process the
social capital in Macedonia has been mainly acquired by employees and management teams.
c) Enterprises under privatization
At  present, 181 enterprises are in some stage of the privatization procedure. Their value is
around US$ 225 million and they have 26,383 employees.
The manufacturing sector is the most important from all aspects, e.g. number of enterprises,
employment and estimated value (31.5 per cent of the enterprises, with 46.3 per cent of employees
and 38.3 per cent of the value) and is followed by the agriculture sector (30.4 per cent of theenterprises, with 34.7 per cent of the employees and 32.3 per cent of the value, respectively).
An acceleration of the privatization process is expected with the implementation of changes to
the Laws adopted in 1999.
Question 4
Privatization: Could the Macedonian delegation provide us an action plan on the process of
privatization with reference to the ongoing ac tivities and the restructuring of enterprises?
Answer:
The Republic of Macedonia has no action plan for the process of privatization. The Agency
for Privatization will focus its future activities on: a) the collection of matured amounts arising from
obligations under concluded contracts and subscriptions of shares with discount; b) the sale of sharestransferred to the Agency; c) the sale of the state capital; and d) the sale of shares held in the Pension
Fund if an approval is obtained for their inclusion in blocks.
Question 5
Macedonia reports in WT/ACC/807/2 and 3 that by the end of 1998, the ownership
transformation of a total number of 1,435 enterprises (or 85 per cent) was completed, while 177
enterprises were still in the process of privatiz ation. Macedonia estimated that privatisation of
these enterprises would be completed “within the next several months”. If was further statedthat “95.3 per cent of the total number of en terprises have completed or are currently
undergoing this process”.
We would appreciate information on the remainin g  state - owned enterprises, e.g., their nature,
size, and prospects for future privatization.WT/ACC/807/5
Page 6
Answer:
The latest data on the privatization are described in question 3 and the Status Report attached.
Question 6
We request that Macedonia produced a chart, si milar to those produced by Latvia, Estonia and
Kyrgyz Republic on scope and pace of privatization in Macedonia.
Answer:
A Chart and the Status Report at 31 December 1999 prepared by the Agency for Privatization
is attached. Please note, however, that numbers in tables do not necessarily match as they changed in
the course of privatization due to bankruptcy, division and/or establishment of new entities.
Question 7
Please provide more information to the Work ing Party on regional development policy,
especially  customs and tax policy. Has regional policy been extended beyond 1995, and if so,until what date?
Answer:
Under the Government policy for regional deve lopment, farmers in underdeveloped regions
are granted tax exemptions. The Decision on Determining the Economically Underdeveloped Regions
published in Official Gazette no. 56/99 determines regions which are to be consideredunderdeveloped in the period 1999-2003. Article 24 of the Law on Personal Income Tax provides for
the following:
“A taxpayer, whose primary activity is agriculture in underdeveloped regions is exempt from
taxation.
Cadastral communities with over 50 per cent of agricultural land consisting of VI to VIII
category of land are considered to be underdeveloped regions under this Law.
Underdeveloped regions indicated under paragraph 2 of this Article are determined by the
Government.”
An Agency for Development of Underdeveloped Regions established by the Law on
Encouraging Development of Underdeveloped Regions (Official Gazette 2/94, 39/99) receives fromthe Budget allocations for infrastructure faciliti es. The Budget allocation for 1999 was 578 million
Macedonian Denar (MDen) and for the year 2000 Budget allocation is 580 million MDen.
Question 8
Structural reform is widely considered to be lagging on several areas.
What are the plans to accelerate structural reforms? Please provide details specifically for;
− privatization plans, especially of state - owned banks;
− financial sector reform, particularly liquidation of insolvent banks and
development of more advanced prudential oversight;WT/ACC/807/5
Page 7
− reform of commercial law and corporate governance for banks and large
enterprises, designed to promote rest ructuring, foreign direct investment, and
marked - based, “arms - length” bank lending, and
− reform of the labour market to address harmful rigidities.
Answer:
In order to achieve long-term and sustained macroeconomic stability, the Government of the
Republic of Macedonia is aware of the necessity for deeper and accelerated structural reforms.  Theprivatization process is in the final stage, but there are still large, loss-making companies under state
control that are a main concern for the Government .  Finding strategic investors for these companies
with fresh capital is a major priority.  In genera l, the Government is attempting to attract foreign
capital for the whole of the economy to facilitate this process.  The Government also requested
support from the IMF through a new ESAF arrangement. The Government is determined to strengthen
public expenditure management, improve banking supervision, implement further enterprise reforms
and revise other relevant policies as necessary. (See question 1 on Macroeconomic policy in the year2000.)
The Republic of Macedonia inherited a large amount of external debt from former
Yugoslavia.  With assistance of international institutions, the Republic of Macedonia has managed to
service its external debt to date.  However, considerable additional assistance is needed.  For the
external debt management policy to be prudent, foreign financial assistance on concessionary terms isnecessary in order to have a workable level of fo reign indebtedness.  Also, bearing in mind the low
level of domestic savings, foreign capital is essential for the private sector to expand and become
internationally competitive.
To facilitate the structural reform process, the Republic of Macedonia is extensively utilizing
technical assistance from EU Phare, US Agency for International Development, the World Bank, theIMF and other international organizations.
Banking Sector
The restructuring of the banking sector will continue and accelerate in the forthcoming
period.  This process is intended to enhance financial stability and help to restore public confidence in
domestic banks. The restructuring process also entails the privatization of banks that have not beenprivatized and contributes to integrating the financial system into the international market.
In cooperation with one expert of the World Bank, a new Banking Law has been drafted and
is expected to be submitted to the Parliament at the beginning of July.
The National Bank of the Republic of Macedonia intensifies its supervision of commercial
banks and savings houses, by applying international standards. It established two new units, ProblemBanks Unit and Methodology Unit, in order to improve the supervision of banks and resolving their
problems.  Manuals necessary for performing supervision of banks were prepared and a strategy on
dealing with problem banks was adopted.
For faster integration in the international market, more intensive relations of domestic banks
with foreign financial institutions and their represen tations in the country are encouraged. In addition,
establishments of foreign banks and improvements of the credit rating methods for domestic banks are
promoted. In order to improve the competition in the banking sector, the development ofcommercially viable banks are encouraged. Also, the banking infrastructure will be made more
efficient through mergers, acquisitions, and by increasing the minimal capital requirements.WT/ACC/807/5
Page 8
Among other things, a share purchase agreement between the biggest Macedonian bank,
Stopanska Banka a.d. Skopje and National Bank of Greece was signed and the transaction on the
stock market was made on 4 April 2000. In Kreditna Banka a.d. Skopje, 65 per cent of the voting right
shares were purchased by Alpha Credit Bank from Greece.  The arrangement has been finalized.
It is expected that the entrance of foreign investors in these banks which will bring a better
corporate governance, will result in a significant improvement of their soundness, and better
performance.
The insurance of saving deposits will continue so as to further strengthen the confidence in
the banking sector. Also, the required value of basic capital for savings banks will be increased, new
insurance levels for savings deposits will be established and the administration of the Savings
Deposits Insurance Fund will be reformed.
Mechanisms intended to increase the funds offered through the banking sector will be applied
in order to decrease interest rates. Decreased interest rates are a necessary pre-condition for economic
growth that can be achieved primarily through extended domestic saving.
Commercial banks are resolving the issue of accumulated debt pertaining to interest rates. By
resolving this problem they will contribute to th eir own restructuring and clearing of their balance
positions which would bring to decrease in both real and nominal rates.
Privatization of banking sector in the Republic of Macedonia
The only fully state-owned bank that was recently established in the Republic of Macedonia
is the Macedonian Bank for Development Promotion. The bank was established in May 1998 with the
Law on Establishing the Macedonian Bank for Development Promotion (Official Gazette 24/98).
Reforms in the banking sector have advanced by two parallel processes:
- establishment of new banks that are primarily privately owned.
- privatization of banks that already existed. In turn, this has been realized (a) by
privatization of legal entities, e.g. the bank shareholders, and (b) mobilization of new
(private) capital through new emissions of shares.  The level of private ownership of
the banks in the Republic of Macedonia varies from 66 per cent to 100 per cent.  Onaverage, 80 per cent of the banking capital is private.  If the state owned Macedonian
Bank for Development Promotion is excluded, the privatization rate of the Macedonian
banks is 85.4 per cent.
Reform in the financial sector
Reforms in the financial sector can be identified with reforms of the banking system.The inherited economic problems and post-independence economic crisis in the Republic of
Macedonia had an adverse impact on the soundness of the banking system. This was reflected in theaccumulation of high amounts of non-performing loans (on the assets side) and the problem of
household foreign currency deposits that were frozen by the former Socialist Federative Republic of
Yugoslavia (SFRY) (the liability side).  In the banking system of former SFRY, the option was given
to households to have both Mden and foreign currency accounts.  Foreign currency deposits were
transferred into the international reserves in the Central Bank of SFRY.  After the break-down offormer SFRY, the assets were seized by Yugoslavia, while liabilities remained in the Macedonian
banks.  Therefore, the term “frozen” deposits refers to these deposits, deposited before monetary
independence.  There is a special Government program trying to solve this problem. However, foreignWT/ACC/807/5
Page 9
currency deposits opened after the monetary independence are on free disposal to the depositors in
unlimited amounts.
Since the beginning of 1995, the Government undertook decisive measures for rehabilitation
and restructuring of the banking system.  These measures can be classified into three groups:
1. Linear rehabilitation of all banks balance sheets, comprising:
a) All claims and liabilities for household’s “frozen” foreign currency deposits in the
amount of US$ 1.4 billion were written off the bank balance sheets and assumed by
the Government Budget. Banks were obliged to keep off-balance record of these
deposits and to service them for and on behalf of the Government.  However, in the
past five years the Government has made considerable efforts to gradually resolve the
problem of “frozen” foreign currency deposits.  This is being done partly by allowing
opportunities for limited amounts of these deposits to be withdrawn for specificpurposes such as social needs, the purchase of Government property, purchase of
state-owned flats, health care, purchase of enterprise shares, etc.  In this way, the total
debt of the Government to households on the basis of “frozen” foreign currency
deposits has been reduced to US$ 0.6 billion as of the end of March 1999.
b) Liabilities to some foreign official and commercial creditors (Paris Club of Creditors
and  Zurich Club of Creditors) were written off bank balance sheets and assumed by
the Government.
2. Rehabilitation and restructuring of Macedonia’s largest bank
Stopanska Banka a.d. Skopje, previously had more than two-thirds of total loans and deposits
of the banking system.  Measures have been taken to:
- Replace due, but uncollected Mden loans in the Bank balance sheet with government
bonds, amounting to Mden 4.9 billion (US$ 123 million);
- Reduce the size of the Bank through shedding five major branches.  These branches
were transformed into independent commercia l banks. In that way, the current share
of Stopanska Banka assets have been reduced to 34 per cent, which can still beconsidered to be a high level of concentration in the Macedonian banking industry:
- Privatization of the Bank was completed with the sale of stocks owned by the
Republic of Macedonia and the companies and institutions in the public sector on the
stock market. The transaction was completed on 4 April 2000;
- Implementation of measures for strengthening the management of the Bank.
3. The collection of bad loans from domestic enterprises initially assumed by the Government
was transferred to the Agency for Bank Rehabilitation, established in the beginning of 1994.  TheAgency was charged with the administration of 240 en terprises on the basis of MDen claims totalling
MDen 12.7 billion or US$ 317.5 million (for due loans outstanding and doubtful and contested claims
on the basis of principal and interest), as of the end of 1994.  In addition, the governance of over 189
firms has been assumed by the Agency for Bank Rehabilitation on the basis of loans from Paris and
Zurich Club of Creditors, in the total amount of US$ 336 million.  Priority has been given not only tothe collection of the loans from domestic firms, but al so to the restructuring of the enterprises.  The
main approaches used in this process are: 1) prompt sales of the claims with discounts; 2) debt
rescheduling, with renegotiations for the terms of payment; 3) sale of the claims to interested
investors; and 4) conversion of the claims in equity.WT/ACC/807/5
Page 10
In addition, the process of rehabilitation of the banking system in the Republic of Macedonia
includes the liquidation of the second largest commercial bank and smaller banks, as well as
permanent reform in such areas as international standards for capital adequacy, risk and credit
portfolio, foreign exchange exposure, maximum amount of credit to a single borrower, maximum
total amount of credit etc.  Necessary institutional framework adjustments were further initiated withthe establishment of the Deposits Insurance Fund at the end of 1996, and the Reforms of the Payment
System commenced in the first quarter of 1996. These last two efforts are still in the process of
development.
Insolvent Banks
In April 1998, the National Bank of the Republic of Macedonia issued a Decision on
measures and procedures against banks in temporary or permanent insolvency.  The Decision defines
the situation when an institute is treated as temporarily or permanently insolvent and measures that theGovernor is authorized to undertake in this respect.
If the bank is temporary insolvent it may be forbidden to use credits from the reserve money
issuance and its credit activities may be stopped.  Also foreign exchange operations and exchange
offices’ operations in the country may be stopped and the bank may be excluded from the foreign
exchange market.  Foreign credit use may be reduced, the process of granting credits to some of thefounders or depositors may be stopped and the process of dividend payments may be reduced.  The
Governor authorizes a person from the National Bank to organize and control the working of the bank
and also bringing infraction against the bank.
The decision for undertaking measures against the bank is also delivered to the Payment
Operations Service (ZPP).
If the bank is found to be permanently insolvent, the Governor of the National Bank of the
Republic of Macedonia can proclaim the bank insolvent.  The Governor of the National Bank of the
Republic of Macedonia can also exclude the bank from payment operations.
According to the Decision for proclaiming the bank as illiquid, the terms for pre-
rehabilitation, rehabilitation, liquidation or bankruptcy procedures will be examined as soon aspossible.
Promoting the quality of bank monitoring
If the banking institution is responsive to the suggestions of supervisors during the
examination and if inconsistencies with the law or operating problems are overcome during the
examination, measures will not be taken against the institution.
If some weaknesses are found the NBRM in cooperation with the financial institution will
develop a program to overcome the unfavorable situation.
The process of bank monitoring and bank examinations in the Republic of Macedonia is
being fulfilled by the Supervision Department of the NBRM. Supervisors conduct field (on-site) full
scope examinations. Each institution should be inspected at least once a year. Also, depending on the
needs and specific situations in certain institutions, some limited scope and sudden examinations can
be carried out. The NBRM developed a uniform examination process of banks and savings houseswith the adoption of the Examination Manual. This manual contains all necessary procedures for
qualitative and quantitative analyses for all banking operation areas.WT/ACC/807/5
Page 11
Reforms in the labour sector
Following the recommendations of the World Bank and the IMF the Republic of Macedonia
started to implement structural reform project in the social sector and labour market. The project
encompasses reforms of the pension, health and social insurance schemes, and adjustments of the
legislation governing labour and social welfare.
The main objectives of the project are the following: (1) to provide a long-term basis of the
most important social reforms; (2) to adjust and amend the legislation governing labour in order to
increase the efficiency of the labour market; (3) to reduce the poverty by improving the efficiency of
reforms in the social area.
Changes in the legislation which are underway include:
a) Amendments and revisions of laws and regulations governing pension and
unemployment insurance schemes. The proposed legislative changes had beensubmitted by the Government to the Parliament. The Law on Employment and
Insurance in Case of Unemployment (Official Gazette 37/97), changes the definition
regarding active search for work by unemployed persons and conditions and duration
of unemployment benefits.
b) Simplification of the procedures for employing and laying-off workers, a more
flexible collective bargaining system, and reduction of benefits from insurance in
case of unemployment.
The amended Law on Labour Relations which is drafted foresees that collective bargaining
agreements will no longer be binding on employers who had not signed them and that procedures for
laying-off redundant employees and their protection will be simplified.
The Ministry of Labour and Social Policy established a Unit for Evaluation of the
Employment and Social Policy.
Question 9
Prices for flour, electric power, petroleum derivatives, railway transport charges and PTT
services were subject to the regime of direct control. Is there a product of this list still subject to
the regime of price control? If yes, does the Republic of Macedonia intend to maintain such a
measure?
Answer:
The legal grounds for introducing the price control is the provision of Article 24 of the Law
on Trade which reads:
Article 24“The Government shall undertake measures against monopolistic positions and market
behaviour by determining the highest prices of particular products and services in the production and
trade, and by determining protective prices of certain agricultural products.WT/ACC/807/5
Page 12
The measure determining the highest prices of particular goods and services may not exceed
six months.
The Government shall designate the agricultural products for which protective prices are to be
assigned.”
The price control system is used because of the following two reasons: a) as an instrument to
restrict the prices determined by entities that have a monopoly on the market; and b) to provide for the
price of some strategic products that make them available for the majority of the population. The price
control is applied only periodically when needed.
A list of products and services subject to price control is determined every six months by a
decision made by the Government upon a proposal  from the Ministry of Trade. The recent list
provided in the Decision on the Highest Prices of Certain Products and Services (Official Gazette
26/00) covers the controlled prices for the period April - September 2000.
According to the Decision on the Highest Prices of Certain Products and Services, the
following products and services are subject to price control in the period from April - September
2000:
- production and marketing of flour type “500”(HS 1101 00 00 00) and bread made of
flour type “500” weighing 600 g. (HS 1905 20 00 00);
- production and marketing of oil and oil derivatives;
- production, transfer and distribution of electric power;
- services in the domestic PTT traffic and services of the public mobile telephony for
users of the existing stationary telephone network only;
- transport of passengers and goods in the railway traffic;
- production and supply of raw water for human and industrial consumption;
- production and distribution of water;
- treatment and draining away of waste water (collectors excluded);
- keeping towns, cities and settlements clean (collecting and depositing waste);
- other communal services: mortuary services, including charges for the grave site and
the funeral;
- distribution of natural gas;  and
- services for mandatory insurance of vehicles;
In order to provide real, reliable and  transparent condition in energy price  setting ,  Article 39
of the Law on Energy( Official Gazette  47/97) stipulates that prices of electricity, natural gas, heat
energy, geothermal energy, and  oil derivatives  are set in accordance with  the Methodology for
Pricing of certain forms of energy.
This Methodology was adopted in August 1998 (Official Gazette 43/98).The price structure
consists of normalized costs (depreciation, equipmen t insurance, maintenance, cost for materials and
energy, gross salary, services from others, concessions, other costs, etc.) taxes and contributions and
profit.
The prices of energy from networks ( electricity, natural gas, district heat) and derivates may
be changed if the supervised costs increase or decrease by at least 5 per cent during a 3 months period.
In an extreme case of change of the supervised costs, the price change shall take place within 15 days.
This  Methodology also stipulates that the reference prices shall be indicative for managing
the pricing policy in the energy sector. Reference prices of certain forms of energy are prices at whichWT/ACC/807/5
Page 13
a certain form of energy can be provided from impor t at the moment of forming the prices, taking into
account the protective mechanisms of the state.
The energy price changes are proposed by the relevant energy enterprises. Implementation of
the Methodology is made by Government which gives its approval with respect to price changes. For
the production prices, prior opinion is required by the Ministry responsible for energy. For retailprices, prior opinion is required by the Ministry responsible for trade.  In the case the Government for
certain reasons does not grant consent for price changes proposed by energy enterprises, and
calculated in accordance with the Methodology, the  Government shall compensate the losses which
might arise as a result of non-granting such a consistent.
Electricity, natural gas and heat prices  are st ructured  in accordance with an  appropriate
tariff structure system. Resolutions on tariff structure system are made by the Government.
The Government of the Republic of Macedonia intends to maintain these measures until the
end of the transition period or until this system is no longer needed.
The Law Against Limiting the Competition and the Law Against Unfair Competition were
adopted by the Parliament in December 1999 (Official Gazette 80/99) will be available as part of
Annex 2 (which will be circulated in Addendum 1 to this document) for examination by the Working
Party members.
Question 10
In WT/ACC/807/3, Macedonia states that “in 1999,  in principle, the policy of free price
formation will also be pursued, on the basis of demand - supply. Price control will be applied
only to small number of goods and services, whic h are of importance for the standard of living
of the population and which have a certain monopoly status on the market, as stated in theMemorandum...”
Does Macedonia maintain in domestic price controls on goods? On services?
Answer:
Please refer to Question 9.
Question 11
If so, please (a) list all goods (by HS96 number) and services subject to price or profit controls,
(b) cite the legal authority for these requirement s, (c) indicate the conditions under which such
controls are normally applied, and (d) describe Macedonia’s plans for maintaining these
requirements or increasing their scope of applications.
Answer:
Please refer to Question 9.
Question 12
Please describe how these requirements are applied to domestic and imported goods, e.g., at
what point of sale.WT/ACC/807/5
Page 14
Answer:
Please refer to Question 9.
Question 13
Please describe these requirements in relation to  the “certain monopoly status on the market, as
stated in the Memorandum” enjoyed by these products, i.e., what monopoly status?
Answer:
Please refer to Annex 6 and question 9.
Question 14
Please explain your statement in paragraph 10 about creating conditions for opening and
investment cycle on quantitatively new grounds. What does this entail?
Answer:
The investments will be particularly encouraged in the sectors that are export oriented and
ones that rely on the scientific and technological achievements. The domestic production will be
restructured to provide for more products that are finalized in the country and that satisfy the
international standards. It is anticipated that the privately owned companies will be the main carriers
of the investment activity, especially in the industrial and the agricultural sector and the small
businesses.
The Program for Stimulating Investments with a Special Emphasis on Attracting Foreign
Investments includes incentives having as an objective to encourage foreign direct investments.
Please refer to Question 187.
(b) Monetary and fiscal policies
Question 15Please provide more detailed information on wage and monetary aggregate control and on
monetary and credit policy.
Answer:
The macroeconomic policy of the Republic of Macedonia is based on coordination between
the fiscal and monetary policy and wage policy. In this context, the wage policy, as an integral part ofthe macroeconomic policy, has as a function to maintain the established price stability in the Republic
of Macedonia. Namely, the Law on Payment of Salaries (Official Gazette 70/94, 62/95, 33/97) has
“frozen” salaries in companies that have only partially been privatized. A policy of restricting increase
in salaries is maintained to achieve certain control over the range of salaries and the individual
consumption, as a component of the aggregate cons umption, and to prevent emerging of inflation.
The National Bank of the Republic of Macedonia (NBRM), as a central bank, is responsible
for formulating and implementing the monetary polic y in the Republic of Macedonia. Pursuant to the
Law on the National Bank of the Republic of Mace donia (Official Gazette 26/92, 4/93, 29/93, 17/96,
29/96, 64/96, 30/97, 37/98, 7/99) the NBRM is responsible for the stability of the domestic currency,WT/ACC/807/5
Page 15
as well as for providing and maintaining a sound banking system. Basic functions of the NBRM are
the following:
1. To regulate the quantity of money in circulation;
2. To maintain liquidity of banks and savings houses;
3. To maintain liquidity of payments abroad;4. To issue paper and hard money;
5. To perform activities on behalf of the Government bodies;
6. To supervise and inspect.
The NBRM has a relatively high level of independence which encompasses:
- Procedure for appointing Governor of the NBRM. The Governor of the NBRM is
elected by the Parliament of the Republic of Macedonia, upon proposal by the
President. The mandate of the Governor is 7 years, which is 3 years more than theterm of members of the Parliament.
- Deciding authority on loans that the NBRM gives to the state. The Central Bank
limits the direct monetization of the budget deficit in three ways: (1) the state may
take loans in value of up to 5 per cent of the budget in a fiscal year; (2)  loans are
short-term and due by the end of the fiscal year; (3) the NBRM may loan funds to thestate only within the framework of the projected monetary policy.
- independence in the implementation of the monetary and credit policy, i.e. in
selecting the monetary strategy and instru ments for accomplishing the main goal of
the monetary policy.
Control over the circulation of loaned funds and monetary aggregates, is achieved through
selection and implementation of monetary strategy and appropriate instruments of the monetary
policy. The main goal of the monetary policy is to maintain the stability of the domestic currency. For
this purpose, since October 1995, the NBRM has targeted the nominal foreign exchange rate of the
MDen to the German Mark. At the same time, main taining the foreign exchange rate of the MDen in
relation to the German Mark on the targeted level is an intermediary goal of the macroeconomicpolicy. Under such circumstances, the monetary circulation is subject to maintaining the targeted
foreign exchange rate of the MDen. This strategy has been successful, as it has reduced the inflation
rate to one-figure, similar to the inflation rates in  developed countries. A stable foreign exchange rate
of the domestic currency is very important for a small and open economy such as the Macedonian. It
helps minimize the commercial entities’ expectations of inflation. By establishing stable prices and
foreign exchange rate, the monetary policy has created an environment in which the structural reforms
of the financial and the real sectors in the commerce will contribute to an accelerated development ofthe economy.
In the implementation of the monetary policy, the NBRM uses the following monetary
regulation instruments: obligatory reserve, trade with securities of the NBRM, trade with domestic
and foreign short-term negotiable securities of the NBRM, NBRM deposit auctions, a discount
window, collateral credits, swap transactions, trad e in foreign currency and limitations on the number
of loans. The most important tools of the mone tary policy used by the NBRM are the obligatory
reserve and the open market operations such as auctions of treasury bills.
The circulation of bank and savings houses loans is controlled by a limitation on the MDen
funds. However, the permanent orientation of the NBRM towards a wide use of market-oriented tools
of monetary regulation has imposed the need to abandon this tool of monetary regulation in the courseof 2000.WT/ACC/807/5
Page 16
Question 16
A table in this section of WT/ACC/807/3 indicates that about half of government revenues are
collected from excise and turnover taxes, with an  additional 30 percents from income and profit
taxes. “Duties” supply 2.3 percent of total revenues and that “Customs and special duties “ and
additional 17.7 percent.
Are “duties” for the purpose of these table tariff revenues? If so, what are “customs and special
duties”?
Answer:
In the table on page 4 of WT/ACC/807/3 wh ere all budgetary revenues are listed, the term
“duties” was used for “administrative fees”. Administrative fees consist of court, communal and other
fees that are paid by legal entities and citizens for actions undertaken by different government bodies.
This means that the 2.3 per cent revenue is not a tariff (custom) revenue.
(iii) Sales Tax on Goods
Question 17
Please list all products subject to excise taxes by HS96 number and the level of tax applied to
domestic and to imported goods.
Answer:
Please refer to Question 18.
Question 18
Please provide in a table format, the precise excise rate applied to each good.
Answer:
A table of excise tax rates is indicated below. However, as stated in question 45, the excise
tax will be reconciled with the value added tax.
HS Number Description of Product Tax Applied
0901
0901 11 00 00
0901 12 00 00
0901 21 00 00
0901 22 00 00
0901 90 00 00 Coffee, whether or not roasted or decaffeinated;
coffee husks and skins; coffee substitutes
containing coffee in any proportion
Coffee, not roasted:
Not decaffeinatedDecaffeinated
Coffee, roasted:
Not decaffeinatedDecaffeinated
Other (Grained)80 den/kgr.
80 den/kgr.
85 den/kgr.
85 den/kgr.
90 den/kgr.
2203 00 Beer made from malt In containers holding 10
liters or less15 den/lit.WT/ACC/807/5
Page 17
HS Number Description of Product Tax Applied
2205 Vermouth and other wine of fresh grapes
flavoured with plants or aromatic substances3 den on  per cent of alcohol
2206 00 Other fermented beverages (for example, cider,
perry, mead); mixtures of fermented beveragesand mixtures of fermented beverages and non-alcoholic beverages, not elsewhere specified orincluded3 den on  per cent of alcohol
2208 Under-natured ethyl alcohol of an alcoholic
strength by volume of less than 80  per cent vol;
spirits, liqueurs and other spirituous beverages3 den on  per cent of alcohol
2402 Cigars, cheroots, cigarillos and cigarettes, of
tobacco or of tobacco substitutes  ImportedImported 1,350 den/kgr.  Domestic
40 per cent ad valorem
2403 Other manufactured tobacco and manufactured
tobacco substitutes; `homogenized' or`reconstituted' tobacco ; tobacco extracts and
essencesImported 1,350 den./kgr.
Domestic 40 per cent ad valorem
2710 00 00 12
2710 00 00 13
2710 00 00 112710 00 00 312710 00 00 322710 00 00 392710 00 00 49 Other motor spirits :
- With an octane number not exceeding  95 (MB86)
- With an octane number exceeding  95 (MB 98)
Motor spirits, unleaded (BMB 95)Diesel fuels  (D1)Ship and other fuels (D2)Other fuels (EL)With a sulphur content exceeding 2  per cent by
weight22,544 den/lit.
24,396 den/lit.
21,692 den/lit.12,121 den/lit.11,854 den/lit.3,136 den/lit.0,10   den/lit.
7113 Articles of jewellery and parts thereof, of
precious metal or of metal clad with preciousmetal - of precious metal whether or not platedor clad with precious metal15 per cent ad valorem
7114 Articles of goldsmiths' or silversmiths' wares and
parts thereof, of precious metal or of metal cladwith precious metal: - of precious metal whether
or not plated or clad with precious metal50 per cent ad valorem
7115 Other articles of precious metal or of metal clad
with precious metal50  per cent ad valorem
8703 23 10 11
8703 23 10 12-Motor  cars for the transport of persons,
assembled :With a built- in  catalyser  Others25  per cent ad valorem
25  per cent ad valorem
Question 19
Are the sales tax tariff and the excise tax synony mous, or are they two different taxes? In the
later case please specify which tax applies to which product and the rate.
Answer:
The sales and excise tax are two different taxes. The sales tax on products and services is a
general consumption tax. The excise tax introduced on 1 January, 1994 as a separate tax applies onlyto certain products. Products subject to excise tax are not taxed with the sales tax.
The sales tax is replaced by the VAT starting 1 April 2000.WT/ACC/807/5
Page 18
The Ministry of Finance is in the process of preparing amendments to the Law on Excises in
order to reconcile the excise tax with the VAT.
Please refer to Question 26.
Question 20
Please specify the exemptions from the sales tax  tariff and the excise tax.
Answer:
List of goods and services exempt from the sales tax is given below. However, note that the
sales tax is replaced by the value added tax as from 1 April 2000.
Goods:
− All types of bread;
− Milk (cow, sheep and goat milk) sold under that name in liquid, fresh, pasteurized,
homogenized, condensed state, except yogurt, cream and chocolate milk, milk forbabies, including baby food for infants made of milk, dairy products and products
made of some milk ingredients;
− Oil for cooking (obtained from sunflower, soya-bean, olives, corn sprouts and other
types of oil used for human nourishment) except margarine and butter;
− Cooking lard - produced from animals and plants used for human nourishment, such
as: melted and pressed lard, melted tallow and fat, vegetable oil, or the like;
− Products exported abroad directly by legal entities and entrepreneurs for further sale,
as well as products taken away or expor ted from the country by individuals, when
written evidence is submitted on importation that products were Macedonian and
sales taxes were paid;
− Products sold in duty free shops at  border crossings, as well as pursuant to
international agreement signed by the Republic of Macedonia (Article 25 to 30,excluding Article 28, paragraph 1, subparagraph 13 of the Customs Law exempt from
customs duty;
− Goods sold by manufacturing or trading enterp rises, that supply foreign diplomatic or
consular missions, foreign diplomatic personnel and consular officials on the basis of
a certificate issued by the Ministry of Finance, subject to reciprocity and compulsoryissuance of a certificate (Article 6);
− Arms and equipment for the armed forces (Article 6).
Services:
− Services for granting credit to maintain bank liquidity: deposits on foreign exchange
saving accounts: interest on legal entities’ deposits with commercial banks, andinterest on commercial banks’ deposits with the National Bank of the Republic of
Macedonia, interest resulting from debtor - creditor relationship;
− Life insurance: insurance whose beneficiary is foreign legal or natural person abroad:
insurance of ships sailing in international waters, aircraft flying on international pathsand additional insurance of road vehicles and driver’s liability outside the borders of
Macedonia;
− Transport of passengers and goods by railroad, city and long distance transport of
passengers by buses, regular public lake traffic and internal traffic;
− Health services and welfare services;WT/ACC/807/5
Page 19
− Services offered by the Red Cross of Macedonia in exercising the goals for which it is
founded;
− Postal, telephone and telegraph services;
− Services in the field of culture, education and sports;
− Services performed by religious institutions;
− Geological exploration, research and development activities;
− Services for accommodation in children and youth hostels;
− Utility services and services for arranging settlements and areas;
− Services performed by natural persons for legal entities and entrepreneurs;
− Consideration for performed solicitor services;
− Transportation services in international traffic; and
− Services performed for foreign diplomatic and consular mission.
A list of products subject to excise tax is provided in the answer to Question 18. Nevertheless,
the Ministry of Finance is in the process of preparing amendments to the Law on Excises in order to
reconcile the excise tax with the VAT.
Question 21
Please describe the taxable base on which excise and / or sales tax are applied.
Answer:
Products
The tax base of sales tax on goods is the selling price of goods in which the sales tax on goods
is not included. The selling price of goods deemed as a tax base for assessing sales tax represents thetotal gross amount paid to the supplier for purchased products, including all incidental expenses
charged by the supplier to the purchaser.
Services
The tax base for sales tax on services is the estimated amount for the service rendered, paid in
cash, in kind and returned favor. The sales tax on services is not incorporated in the tax base but isborne by the recipient of the service.
The excise duties are not incorporated in the tax base for the sales tax on goods and services.
The Law states that excise duties shall not be paid on goods subject to sales tax.
Nevertheless, as indicated in Questions 19 and 20, since 1 April 2000 the sales tax is replaced
by the VAT and the excise tax will be adjusted.
Question 22
Are banderoles applied to both import ed and domestically produced goods.
Answer:
Banderoles are applied to both imported and domestically produced goods.WT/ACC/807/5
Page 20
Question 23
Has the Assembly adopted the VAT Law? Can details of the new VAT arrangements be
provided? It will assist the accession if the Republic of Macedonia could provide the working
party with a copy of the Law on Value Added Tax.
Answer:
Please refer to Question 26.
Question 24
Did the Law on Value Added pass Macedonia's Parliament in May 1999, as foreseen in
WT/ACC/807/3? If so, will it be implemented in 2000?
Answer:
Please refer to Question 26.
Question 25
What is the level of the VAT provided for in the new law?
Answer:
Please refer to Question 26.
Question 26
Please provide the detailed explanation of the VAT regime as foreseen by the draft law,
including details on the rate of VAT, exemptio ns from VAT, application of VAT at origin or
destination, point of collection of VAT for imported and domestically produced goods. Please
update the Working Party on the status of the draft VAT Law. Please provide a copy of the
draft VAT Law.
Answer:
The Law on Value Added Tax was adopted in 1999 (Official Gazette 44/99, 59/99).
Originally, its implementation was scheduled as from 1 January 2000. However, due to the delay in
the preparation of regulations, the implementation was postponed until 1 April 2000.  The VAT
replaces the sales tax. The general rate of VAT is 19 per cent and the reduced rate is 5 per cent.
The customs service collects the VAT at importation, while the VAT on domestic goods is
collected by the Public Revenue Office. Taxpayers pay the tax on accounts that are prescribed by the
Minister of Finance. The accounts are administered by the Payment Operations Service (POS is an
institution that administers payment operations in the Republic of Macedonia). The POS has an
obligation to transfer the paid amounts to the budget of the Republic of Macedonia within the
prescribed time limits.WT/ACC/807/5
Page 21
A list of products (in HS) subject to a reduced VAT rate of 5 per cent:
HS Number Description of the Product
From 0101
From 0102 – 0104 0105From 0106Live animals, except wild animals:
a)  Horses, asses, mules and hinniesb) Bovine animals, swine, sheep and goats
c)  Live poultry
d)  Domestic rabbits, bees
Chapter 2 Meat and other slaughtered edible products
From Chapter 3 Fish, crustaceans, molluscs and other aquatic
invertebrates, except ornamental fish
Chapter 4 Milk and milk products; bird’s eggs; natural honey;
edible products of animal origin, not elsewherespecified or included
0504
From 0506 Other products of animal origin
a)  Guts, bladders and stomachs of animals, other
than fish
b)  Non-processed bones
0601 - 0602 Live trees and other plants
Chapter 7 Vegetables, roots and edible tubers
Chapter 8 Edible fruit; peel of citrus fruit, melons or
watermelons
Chapter 9 Coffee, tea, mate and spices
Chapter 10 Wheat
From 1101 - 1106 and 1108 Products of the flour production industry and starches
Chapter 12 Oil seeds and oleaginous fruits; various seeds, beans
and fruits; industry and medicine plants, cereal straw
and forage products
1302 20 Pectic substances, pectinates and pectates
From 1401 Vegetable materials of a kind used primarily for
plaiting, non-processed
From Chapter 15 Edible fat and oils of animal and vegetable origin, as
well as products of their decomposition; processededible fats; raw beeswax
Chapter 16 Meat products from fish, crustaceans, molluscs other
aquatic invertebrates
Chapter 17 Sugar and sugar products
1805 and 1806 Cocoa powder not containing sugar or other
sweetening substances; chocolate and other foodproducts containing cocoa
Chapter 19 Food preparations of wheat, flour, starches or milk;
confectionary products
From 2001 - 2008 Vegetable and fruit products or products from other
edible parts of plants, except juices from fruit and
vegetables
Chapter 21 Various food products
From 2201 Water, except natural or artificial mineral water and
aerated water in packages for consumption
2209 Vinegar and vinegar substitutes obtained from acetic
acid
From 2301 - 2308 Residues and waste from the food industry
From 2309 Products for feeding animals, except food for dogs
and cats and other domestic pets put up for retail sale
2401 Tobacco, raw and non-processed, tobacco refuse
2501009100 Salt suitable for human consumptionWT/ACC/807/5
Page 22
HS Number Description of the Product
2701
2702
2710 00 00 41 and 2710 00 00 49
27112716--------------Mineral fuels, mineral oils and products from their
distillation:a) Coal, briquettes and similar solid fuels
manufactured from coal
b) Dark coal and lignite, agglomerated or non-
agglomerated excluding jet
c) Fuel oils
d) Petroleum gases and other gaseous hydrocarbonse) Electrical energyf) Heatingg) Cooling 
2836 10 00 00 and2836 30 00 00Commercial ammonium carbonate and other
ammonium carbonates; sodium hydrogencarbonate
(sodium bicarbonate)
2905 44 00 003824 60 00 00D-glucitol (sorbitol)
2915 21 00 00 Acetic acid
2925 11 00 00 Saccharin and its salts
From 3003 and from 3004 Human medicines
From 3101 Animal or plant fertilizers, whether mixed or not, but
not chemically processed; fertilizers obtained by
mixing animal or plant products
From 3302 10 00 00 Mixtures of odoriferous substances and mixtures with
a basis of one or more of these substances, preparedfor a retail sale
From 3304 91 00 00From 3304 99 00 00
From 3305 10 00 00
From 3306 10 00 00From 3307 30 00 00From 3401 11 00 00From 3401 19 00 00From 3402 20 90 00Products for body care including washing
preparations:a) Powder for baby skin careb) Cream, milk and oil for baby skin care
c) Shampoo (except for pets)
d) Dentifricese) Baths (except for pets)f) Toilet soapg) Washing soaph) Detergent for laundry and dishwashing
From 3503 00 10 00 Gelatin
From 4014 10 00 00 Preservatives and other products for contraception
From 4401 10 00 00
4401 30
4402Fuel wood and charcoal
a) Fuel wood in logs, in billets, in twigs, in faggots
or in similar forms
b) Sawdust, wood waste and scrap whether or not
agglomerated in briquettes, pellets or in similarforms
c) Charcoal (including shell or nut charcoal)
whether or not agglomerated
From 4818 40 00 00 Sanitary towelsWT/ACC/807/5
Page 23
HS Number Description of the Product
From 4901
From 4902
From 4903
From 4905Books, newspapers and other products of the graphic
industry, except printed materials for advertisingpurposes and printed materials with a pornographiccontent:a) printed books, brochures and similar printed
matters, whether or not in single sheets
b) Newspapers, journals and periodicals whether or
not illustrated or containing advertising material
c) Children’s picture, drawing or coloring booksd) Maps and hydrographic or similar charts of all
kinds, including atlases, wall maps, topographicalplans and globes, printed
The evaluation whether the printed matters contain
pornography is made and issued by the Ministry ofCulture.
5101 11 00 00 and  5101 19 00 00 Wool, non-processed
8713 Invalid carriages whether or not motorized or
otherwise mechanically propelled
9021 Orthopaedic appliances, including crutches, surgical
belts and trusses; splints and other fracture appliances;artificial parts of the body, hearing aids and otherappliances which are worn or carried or implanted in
the body to compensate for a defect or disability
A list of services subject to a reduced VAT rate of 5 per cent:
Transport of people: - transport of their luggage
Dispatch of waste:
- selection,- collection- transportation- processing
- dumping of waste from the population and industry
Maintenance of public cleanness:
- public roads- streets- squares- children’s playgrounds- public pedestrian trims
- areas
-c h a n n e l s- embankments- cleaning of snow
Services rendered by lawyers, notaries, accountants and auditors:- Services rendered by lawyers, notaries, accountants and auditors shall be all services typical for the
appropriate profession performed by these persons, associations of citizens and companies
- Services of lawyers, typical for the profession according to the Law on the Bar
- Services of notaries, typical for the profession according to the Law on Notary- Services of accountants, typical for the profession according to the Law on Accounting- Services of auditors, typical for the pr ofession according to the Law on Audit
The Law on Value Added Tax is available in the WTO Secretariat, Accession Division,
Office No. 1126 for examination by the Working Party members.WT/ACC/807/5
Page 24
(iv)   Profit Tax
Question 27
Please provide more information to the Workin g Party on tax breaks for the protection of
environment and nature. How are such protective measures defined and how are they applied?
Answer:
The Law on Profit Tax (published in the Official Gazette no. 80/93, 33/95, 43/95,71/96, 5/97-
corr., 28/98) provides for tax breaks for the protection of environment and nature.
Article 30 reads:
“Taxpayers shall be entitled to accelerated depreciation of fixed assets in cases of
technological renovation and structural adaptation, not exceeding 25 per cent of the replacement,
calculated in accordance with Article 15 of this Law.
As an exception to paragraph 1 of this Article, taxpayers shall be entitled to accelerated
depreciation of assets used for protection of the environment and nature.
Taxpayers shall realize the rights provided for in paragraphs 1 and 2 of this Article by filing a
written request with the Public Revenue Office on the basis of appropriate documentation.”
Article 35 reads:
“The amount of the profit that a taxpayer has invested in the protection of the environment
and nature shall be deducted from the tax base [tax base is the amount subject to taxation].”
(c) Foreign exchange and payment system, relations with the International Monetary Fund,
application of foreign exchange controls
Question 28
Is the government considering changes to the exch ange rate or the foreign exchange regime?
Answer:
The exchange rate is freely determined at the foreign exchange market. The National Bank
can buy or sell foreign currency in order to maintain a balance at the foreign exchange market.
The current policy of pegging the MDen to  the German Mark has shown good results in
stabilizing the economy and the Government of the Republic of Macedonia is determined to continuethis policy.
Question 29
 Please confirm that Macedonia maintains cu rrent account convertibility of its currency
Answer:
The Republic of Macedonia maintains current account convertibility of its currency as
provided under Article VIII of the IMF Articles of Agreement on 19 June 1998.WT/ACC/807/5
Page 25
Question 30
Can domestic and foreign individuals and firms hold foreign exchange accounts? Are traders
required to convert foreign exchange accounts?
Answer:
Domestic and foreign individuals and firms can hold foreign exchange accounts with only one
exception: domestic companies that receive foreig n currency payments upon exporting are obliged to
convert the foreign currency into MDen at the fore ign exchange market after the expiration of ninety
days.
Question 31
Are there any restrictions or requirements on pa yments or remittance of profits in foreign
currency?
Answer:
Foreign investors can transfer their profits abroad in foreign currency without limitations.
For domestic commercial entities please refer to Question 30.
Question 32
Are their limitations or restrictions on foreign accounts for business or private citizens?
Answer:
Please refer to Question 30.
Question 33
Under which circumstances can foreign accounts be  frozen? Is a judicial order necessary ? If
yes, please describe the conditions for an appeal against such an order.
Answer:
Domestic and foreign entities have equal treatment when opening and operating a bank
account.
 Article 190 of the Law on Executive Procedure determines that a lower court in the location
of the payment operation is authorized to make a decision on any request for enforcement over
monetary assets kept on the debtor’s account with the bearer of payment operations (blockedaccount).
A remonstrance may be filed against the decision for enforcement, upon which, the judge that
made the enforcement decision shall make a ruling. The ruling may be appealed before the appellate
court.WT/ACC/807/5
Page 26
Question 34
Please describe to the Working Party in detail the rights and obligations of domestic companies
in regard to holding and using foreign currency . In particular, do these companies have to
surrender part of their earnings to pub lic authorities or to the Central Bank?
Answer:
Please refer to Question 30.
Question 35
Please detail your commercial credit program and give the reasons behind the rules which state
that domestic companies may give commercial cr edits to companies abroad only up to 90 days
and that domestics companies may receive comm ercial credits from companies abroad only up
to 180 days.
Answer:
According to the Law on Foreign Exchange Operations domestic companies are obliged to
perform current payments abroad within ninety da ys and to receive current payments from abroad
within one hundred and eighty days. Monetary transa ctions performed within a longer period of time
are considered as credit transactions and have to be registered. The registration is required in order to
keep record of financial commercial credits.
Question 36
Please describe in detail to the Working Party the rights and obligations of residents to engage
in the different kinds of capital operations with  operations abroad (examples include: foreign
direct investment, acquiring or selling securities from or to abroad,. Granting or receiving
financial loans to or from abroad, engaging in deposit accounts abroad).
Answer:
Domestic natural persons may maintain accounts abroad during their residence abroad.
Upon an approval of the NBRM, domestic legal en tities may maintain accounts abroad for the
realization of the following activities:
− investment activities abroad;
− operation of a representative office or a business unit of a domestic legal entity
abroad;
− coverage of costs of companies providing services for international traffic of goods
and passengers, insurance, and scientific activities.
Domestic legal entities may freely establish or invest in foreign companies abroad after prior
registration of such activities with the Ministry of Trade.
Pursuant to the Law on Foreign Credit Relations (Official Gazette of the Republic of
Macedonia no. 31/93), residents may obtain foreign loans. These foreign loans may be used for thefollowing purposes:WT/ACC/807/5
Page 27
− to implement export-oriented investment projects;
− to import equipment, fuels and electric power, and raw materials to be used in an
export-oriented production;
− to import goods of vital importance for the population; and
− to purchase agricultural products aimed for exports.
Domestic banks may use short-term loans to overcome periodical inconsistencies between the
foreign currency inflow and outflow.
Domestic legal entities and banks may grant loans to foreign persons for the following
purposes:
− to promote exports of domestic products; and
− to develop commercial relations with foreign countries.
(d) Foreign and domestic investment policies
Question 37
Macedonia states in WT/ACC/807/3 that in 1997, the total value of foreign direct investments
was 30.902.000 US$, of which EFTA countries participated with 54.0 percent, and the EU
countries participated with 36,3 percent.
Please indicate the top individual countries part icipating in direct investments in Macedonia in
1997 or a more recent year.
Answer:
The table shown below indicates the foreign direct investments in the Republic of Macedonia
in the year 1998.
Foreign Direct Investments in the Republic of Macedonia for 1998
Report of the Statistics Bureau of the Republic of Macedonia
Country Number of deals Participation
(in %)Value
(in thousands of US$)Value
(in %)
Total 122 100.0 112,308 100.0
Cyprus 2 1.6 62,170 55.4
European Union
AustriaNetherlandsGreece
Luxemburg
GermanyItalyGreat BritainFranceDenmark57
97
18
1
10
452146.7
7.45.7
14.9
0.8
8.23.34.11.60.821,879
8,3324,5293,539
1,837
1,4871,434
471228
2219.5
7.44.03.2
1.6
1.31.30.40.20.0
Liechtenstein 3 2.4 20,313 18.1
USA 4 3.3 3,369 3.0
Croatia 6 4.9 1,197 1.1
Slovenia 11 9.1 597 0.5
Bosnia andHerzegovina1 0.8 570 0.5WT/ACC/807/5
Page 28
Country Number of deals Participation
(in %)Value
(in thousands of US$)Value
(in %)
Turkey 4 3.3 503 0.4
Switzerland 6 4.9 435 0.4
Bulgaria 5 4.1 129 0.4
FR Yugoslavia 14 11.5 476 0.4
Israel 1 0.8 166 0.1
Australia 5 4.1 129 0.1
The Czech
Republic10 . 8 60 . 0
P o l a n d 10 . 8 30 . 0
Nigeria 1 0.8 1 0.0
(e) Competition policies
Question 38
Does Macedonia have any intention to intr oduce new law and regulations relating to
competition that replaces the Law on Trading and the Law on Foreign Trade Operations?
Answer:
The Law Against Limiting the Competition and the Law Against Unfair Competition were
adopted by the Parliament in December 1999 (Official Gazette 80/99). The Law Against Limiting the
Competition is implemented as of 1 April 2000.
Copies of these two Laws will be available as part of Annex 2 for examination by the
Working Party members.
Question 39
Please provide more details on the measures that may be undertaken by the Government to
protect firms against market disturbances.
Answer:
Please refer to Question 135.
Question 40
Please provide an update to the Working Party of the status of the Commission for the
protection against monopolistic practices.
Answer:
The Law Against Limiting the Competition provides for establishment of a Competition
Committee and a Competition Administration as an ad ministrative body within the Ministry of Trade.
The competencies of these two entities are regulated in the Law. They have been established and
started to function since April 2000.WT/ACC/807/5
Page 29
III. FRAMEWORK FOR MAKI NG AND ENFORCING POLICIES AFFECTING
FOREIGN TRADE IN GOODS AND TRADE IN SERVICES
1. Powers of Executive, Legislative and Judicial Branches of Government
Question 41
Please, specify how the Parliament proceeds to the authentic interpretation of Laws and how
this activity is consistent with the independence of the judiciary.
Answer:
According to Article 68 of the Constitution of the Republic of Macedonia, the Parliament of
the Republic of Macedonia, as a legislative body, gives authentic interpretation of laws. This
constitutional provision is implemented in Arti cle 391 to 393 of the Rules of Procedure of the
Parliament of the Republic of Macedonia. According to these provisions, a request for an authentic
interpretation of a law could be submitted by any member of the Parliament, the Government of theRepublic of Macedonia, a government official administering a State administrative body, the
Constitutional Court of Macedonia, the Supreme Court of the Republic of Macedonia, the Public
Prosecutor of the Republic of Macedonia, other State bodies, councils of the municipalities, trading
companies and enterprises, as well as other organs and institutions.  The request for an authentic
interpretation should be elaborated. The request for an authentic interpretation is submitted to thePresident of the Parliament, who conveys it to the Legislative Committee. Following the request for
an authentic interpretation of the law, the Legislative Committee can ask for an opinion from the
Parliament committees in charge of the law, the interpretation of which is requested. If the Legislative
committee considers the request justified, it elaborates  a draft authentic interpretation and presents it
to the Parliament of the Republic of Macedonia. If, according to the opinion of the LegislativeCommittee, the request for an authentic interpretation is not justified, the Committee submits a report
to the Parliament, which decides upon the request and the submitted report. The decision of the
Parliament is communicated to the requesting party.
2. Government Entities Responsible for Ma king and Implementing Policies Affecting
Foreign Trade
Question 42
Regarding the appeals process for custom, investment, import licensing requirements, pre
shipment inspection and other issues covered by the WTO Agreement, are foreigners granted a
right to appeal to an independent tribunal, whether judicial or arbitrary, in a non-
discriminatory manner? (Article X of the 1994 GATT)
Answer:
A right to appeal is a right guaranteed by the Constitution. According to Article 15 of the
Constitution of the Republic of Macedonia, a right to appeal against individual legal acts brought in a
court or an administrative procedure is guaranteed. This constitutional principle is implemented in the
Law on Criminal Procedure, the Law on Civil Procedure and the Law on Administrative Procedure.
Domestic and foreign parties benefit from the same treatment in the appeal procedure. The
Law on Administrative Disputes provides for initiating an administrative dispute before the SupremeCourt as an independent tribunal by filing a complaint against a second degree decision in an
administrative procedure.WT/ACC/807/5
Page 30
Question 43
What process will be needed to complete national procedures relating to WTO accession?
Answer:
Once negotiations for the accession of the Republic of Macedonia to the WTO are formally
completed, the Ministry of Trade in cooperation with the Ministry of Foreign Affairs prepares a DraftLaw for Ratification of the Marrakesh Agreement Establishing the World Trade Organization
(including Annexes 1, 2 and 3) and submits it to the Government of the Republic of Macedonia.  The
Government, after reviewing the Draft Law, submits it to the Assembly for ratification.  After the
adoption of the Law for Ratification, the President of the Republic of Macedonia signs a Proclamation
for the Law, upon which it is published in the Official Gazette of the Republic of Macedonia.
Following the publishing, the Ministry of Foreign Affairs shall prepare an instrument on accession in
compliance with Article 12 (a) of the Agreement Establishing the World Trade Organization.
The procedure for ratification of international agreements lasts approximately two months.
3. Division of Authority Between Central and Sub-central Governments
Question 44
In WT/ACC/07/2, Macedonia stated that local governments have no direct role in the field of
foreign trade operation or in the field of creati on of foreign economic relation, and that the
authority in this sphere is assigned to the central government of Macedonia.
Do localities have any authority in the area  of tax application to imports, subsides or
investments?
Answer:
Localities have no authority in the area of tax application to imports, subsidies and
investments.
4. Any Legislative Plans to Change the Regulatory Regime
Question 45
Macedonia indicates in WT/ACC/807/3, section III:4 that its Working Program for 1999
foresees submission to the Assembly of the following draft laws for adoption :
- Law on Trade
- Law Against Unfair Competition
- Law Against Limiting of the Competition
- Law on Foreign Exchange Operation
- Law on Excises
- Law on Value Added Tax
- Law on Consumer Protection
Please provide an update on the status of these laws. How many have been submitted for
consideration.WT/ACC/807/5
Page 31
Answer:
The Law on Trade (Official Gazette 23/95, 30/95, 43/95,23/99, 43/99) was amended in spring
1999. An English translation of the amendments is submitted to the WTO Secretariat.
The Law Against Limiting the Competition and the Law Against Unfair Competition were
adopted in December 1999 (Official Gazette 80/99). Copies of these two Laws will be available aspart of Annex 2 for examination by the Working Party members.
A draft of the new Law on Foreign Exchange Operations is being prepared by the Ministry of
Finance. It is expected that a draft law will be submitted to the Parliament for its consideration in the
first semester of 2000. A copy of the Law on Foreign Exchange Operations in force (Official Gazette
30/93, 40/96) will be available as part of Annex 2.
The Ministry of Finance is in the process of preparing amendments to the Law on Excises in
order to reconcile the excise tax  with the value added tax.
 The Law on Value Added Tax was adopted by the Parliament in July 1999 (Official Gazette
44/99). A copy of the Law will be  available as part of Annex 2.
The Law on Consumer Protection is in the initial stage of enactment. A copy of the draft Law
is submitted to the WTO Secretariat.
Question 46
Please submit these drafts for Working Party review prior to the first Working Party meeting.
Answer:
Please refer to Question 45 and Annex 2.
5. Laws and Legal Acts
Question 47In order to fulfill the transparency requiremen ts, Including Article X  of the GATT 1994 and
Article 3 of the GATS, a reasonable interval between the enactment and the implementation of
the rules and regulations should be secured.  Macedonia’s relevant regulations for transparency
purposes should also be informed.
Answer:
Pursuant to Article 52 of the Constitution of  the Republic of Macedonia, laws and other
regulations are published before they enter into force.
Laws and other regulations are published in the Official Gazette of the Republic of
Macedonia, not later than seven days of the day of their enactment.
Laws enter into force at the earliest on the eighth day of the day of their publication, or by
exception, which is determined by the Parliament, on the day of their publication.
Article 52 of the Constitution of the Republic of Macedonia reads:WT/ACC/807/5
Page 32
“Laws and other regulations may not have a retroactive effect, except in cases when this is
more favorable for the citizens.”
The Parliament of the Republic of Macedonia enacted the Law on Publishing Laws and Other
Regulations and Acts in the Official Gazette of the Republic of Macedonia (published in the Official
Gazette no.56/99). Article 3 of the Law provides for the publication of the following acts in theOfficial Gazette of the Republic of Macedonia:
1. “The Constitution of the Republic of Macedonia, laws, authentic interpretation of laws,
updated texts of laws determined by the Legislative Commission of the Parliament of the
Republic of Macedonia, the budget of the Republic of Macedonia and the final account of the
budget, the territorial plan of the Republic, international agreements, the Rules of Procedure
of the Parliament of the Republic of Macedonia, decisions, declarations, resolutions,
recommendations of the Parliament of the Republic of Macedonia, conclusions and other actsof the Parliament of the Republic of Macedonia for which it will determine to be published in
the Official Gazette of the Republic of Macedonia.
2. The promulgation of declaring laws, promulgation for appointment and recall of ambassadors
and delegates of the Republic of Macedonia abroad and of other persons determined by law,
acts for the appointment and discharge of holders of state and public offices determined by theConstitution and by law, as well as other documents passed by the President of the Republic
for which it has been defined by law and the documents for which the President of the
Republic decides to be published in the Official Gazette of the Republic of Macedonia.
3. Bylaws, decisions, instructions, and the Rules of Procedure for the work of the Government of
the Republic of Macedonia, and other documents and conclusions of the Government of theRepublic of Macedonia for which it shall decide to be published in the Official Gazette of the
Republic of Macedonia.
4. Regulations, orders, instructions, and other documents determined by law to be passed by  the
ministers, administration officials in charge of other administration bodies and organizations
determined by law upon an authorization provided by law, as well as other documents forwhich they will decide to be published in the Official Gazette of the Republic of Macedonia.
5. Decisions and other documents of the Constitutional Court of the Republic of Macedonia and
the documents of judicial organs for which it has been determined by law.
6. Regulations of the National Bank of the Republic of Macedonia and other legal persons, when
they determine matters of public interest in the field of their activity on the basis of
authorizations established by law.
7. Collective agreements [agreements concluded by the Government, the unions, as
representatives of the employees and an organization of employers which regulate labour
issues].
8. Acts of funds and bureaus [such as the Pension Fund, the Health Security Fund, the
Employment Bureau].
9. Corrections of laws and other regulations.WT/ACC/807/5
Page 33
Question 48
Macedonia states in WT/ACC/807/3/section III:5 that it is providing a list of “positive
legislation”.
What is meant by ”positive legislation”?
Answer:
The term positive legislation covers all legislation in force in the Republic of Macedonia.
Question 49
Macedonia has made available the following in WT/ACC/807/3/Add.1:
− Trade Law (published in the Official Gazette of the Republic of Macedonia
No.31/95-523);
− Customs Tariff Law of 15 August 1996;
− Customs Law (1993);
− Foreign Trade Law (published in the Official Gazette of the Republic of
Macedonia No.31/93-716);
In WT/ACC/807/3, section III.5, however , the following are listed:
− Law on Trade (“Official Gazette” no. 23/95, 30/95 and 43/95)
− Customs Tariffs Law (“Official Gazett e” no. 38/96, 45/97, 54/97, 61/97 and
26/98)
− Law on Customs (“Official Gazette“ no. 20/93 and 63/98)
− Customs Law (“Official Gazette “ no. 21/98, 26/98 and 63/98)
− Law and Foreign Trade (“Official Gazette” no. 31/93, 41/93, 78/93, 56/96, 15/97
and 13/98)
Please confirm that the documents made availab le in 807.3./Add. 1 comprehensively cover all
the materials listed for those laws in 807/3, section III: 5. If they do not, please augment the texts
circulated in 807/3/add.1.
Answer:
Please refer to Question 50.
Question 50
Please provide copies of the following laws, prio r to the first meeting of the Working  Party, to
the Secretariat for review by Working Party members:
As listed in section III:5 of 807/3:
− New Customs Valuation Law and implementing regulation
− Copyrights Law (“Official Gazette” no. 47/96 and 3/98)
− Law on Market Inspection (“Official Gazette” no. 35/97)
− Law on Special Duties on Import of Agricultural and Feeding Products in the
Foreign Trade (“Official Gazette” no. 2/94)WT/ACC/807/5
Page 34
− Law on Quality Control of Agricultural  and Feeding Products in the Foreign
Trade (“Official Gazette” no. 5/98)
− Decision-act for Dividing of the Goods in Forms of Import and Export (and list
of goods) in the Field of Foreign Trade (“Official Gazette” no. 39/96, 64/96,
66/96, 67/96,45/97,54/97, 66/97, 20/98 and 26/98)
− Decision-act for Determining Special Taxes on Import of Certain Agriculture or
Food Products (“Official Gazette” no. 66/97)
As referred to in the text of WT/ACC/807/2 and 3:
− Law on Safety Stocks;
− Law on Public Procurements;
− Law on the Protections of Topography of Integrated Circuits;
− Law on Trading Companies and Law on Trading;
− Law on Foreign Trade Operations;
− Criminal Code of the Republic of Macedonia (section related to IPR, e.g.,
penalties);
− Act of Industrial Property;
− Regulation for Procedure of Recognition of Trademark;
− Act of Industrial Property,
− Regulation for Procedure of Recognition for the Patent.
Answer:
All relevant existing and draft legislation on issues covered by the WTO listed in
WT/ACC/807/2, WT/ACC/807/3 and WT/ACC/807/4 was or is being translated into English and
copies were and will be provided to the WTO Secretariat for Working Party review. See Annex 2.
Question 51
Macedonia cites Official Gazette publication for several of the laws listed in this section.
What is the significance of this reference? Please  confirm that these are the issues of the Official
Gazette where the laws were published for comment.
Answer:
Draft laws are not published. However, laws are published in the Official Gazette following
their adoption in the Parliament.
For more information please refer to Question 47.
Question 52
Please confirm that all laws, decisions, regulatio ns and other legal instruments relevant to issues
covered by WTO Agreements are required to be published prior to implementation in
accordance with Article X of the GATT, and the other transparency provision of the WTO, e.g.,
in the GATS and the WTO Agreements on Impo rt Licensing Procedures, Customs Valuation,
TBT, SPS, etc.?WT/ACC/807/5
Page 35
Answer:
Please refer to Question 47.
6. Description of Judicial and Arbitral or  Administrative Tribunals or Procedure
Question 53
Please describe in more detail the structure of the juridical power (e.g. do administrative and
commercial court exist, what are their compet encies, are there any limitations on foreigners
seeking redress by a court, which court is compet ent for commercial cases,  which for insolvency,
describe the system of appeal, who appoints the judges, how is their independence protected).
Answer:
According to Article 8 of the Constitution, th e state power is divided into legislative,
executive and judicial power. The basis of the judicial system is established in the Constitution by the
provisions contained in Articles 98-108. The courts execute the judicial power in the Republic ofMacedonia. The courts are autonomous and independent. They judge on the basis of the Constitution,
laws and international agreements ratified in accordance with the Constitution. The types of courts,
their competencies, foundation, termination, organization and composition, as well as the court
procedure are regulated by a law adopted by a two-third majority of votes of the total number of
Parliament members.
On the basis of this constitutional provision, the Law on Courts enacted in 1995 (Official
Gazette no. 36/95, 45/95, Constitutional Co urt Decision U.no.313/ 95-Off.Gaz.no.40/96, CCD
U.no.20/96-Off.Gaz.no.60/96) elaborates in detail the c onstitutional provisions on the judiciary. The
Law establishes objectives and functions of the judiciary, which comprise of: a) impartial
enforcement of the law regardless of the situation and the capacity of the client; b) promotion, withinthe framework of the judicial function, of the protection and respect of human rights and freedoms
and c) legal security and creation of conditions for everyone to live safely in the framework of the
enforcement of the law. As far as the competencies of courts are concerned, the law determines that
courts rule through a legally prescribed procedure on: rights of the citizens and their legally based
interests; disputes between the citizens and other legal entities; punitive actions and other matterswhich are legally under the jurisdiction of courts.
According to the Law on Courts, lower courts are competent to:
− decide in the first instance on issues under court jurisdiction, except on matters which
shall be entrusted to the authority of another court;
− decide in the first instance on non-contentious matters, enforcement and security and
certification of deeds and registrations, if the authority is not entrusted to other bodies
or institutions by law;
− decide in the first instance on violations, if it is not determined by law that other
bodies may decide on certain forms of violations (customs, foreign exchangeregulations, foreign trade and tax);
− decide in the first instance and execute matters in a criminal procedure for criminal
actions for which a penalty of imprisonment of 10 years is prescribed;
− decide in commercial offences, property and other civil disputes in which the
municipalities, the City of Skopje or the Republic of Macedonia, the enterprises and
other legal entities, shop proprietors and other individuals performing registeredcommercial activities appear as parties; disputes between domestic legal entities and
foreign natural persons and between foreign natural persons and legal entities;WT/ACC/807/5
Page 36
bankruptcy proceedings, mandatory sett lement and liquidation and disputes that
would arise herewith; disputes on statutory changes (division, merger, incorporation
and organization), and enforcement of the decisions of these courts;
− decide on the legality of an individual act in administrative dispute, for the protection
against illegal activities, for recognition and enforcement of decisions of foreign
courts, as well as executing tasks of international legal assistance unless thecompetence of another body is otherwise determined.
Appellate courts are competent to:
− decide upon appeals against decisions of lower courts;
− decide on collision of competencies between lower courts under their territorial
jurisdiction;
− perform other matters determined by law.
The Supreme Court is competent to:
− decide in the second instance against decisions of its own councils when determined
by law;
− decide in the third and final instance on appeals against decisions of appellate courts
and  decisions of the Supreme Court councils reached in a second instance procedure,when determined by law;
− decide in the first and second instance on administrative disputes when determined by
law and on final decisions reached in a misdemeanor procedure;
− decide on extraordinary legal remedies against final decisions of courts and decisions
of its councils when determined by law;
− decide on collision of competencies between lower courts from the territory of
different appellate courts, appellate and lower courts, two appellate courts and decide
on the transmission of the regional competence with these courts; and
− performs other matters determined by law.
The Supreme Court of the Republic of Macedonia decides on legal remedies in a council
composed of five judges, unless otherwise determined by another law.
The current organization of the judicial power in the Republic of Macedonia does not provide
for specialized courts - administrative or commercial.
Twenty seven lower courts, three appellate courts and the Supreme Court of the Republic of
Macedonia enforce the judiciary power in the Republic of Macedonia. In the period from 1995 until
1997, judges in all courts were elected, and courts began to function on the basis of the provisions of
the new Law on Courts.
The Law on Courts contains numerous provisions that guarantee the independence of the
judiciary. Courts make decisions on the basis of the Constitution, applicable laws and international
agreements ratified according to the Constitution. In the application of a law, the judges are not boundby a legal opinion of a higher court. Judges take impartial decisions on the basis of their free judgment
of the evidence and application of the law. When deciding, judges may not be limited, influenced,
encouraged, pressured, threatened or interfered directly or indirectly by any subject or for any reason.
A re-examination of court decisions or a change of the composition of the court in order to influence
decisions of the court is not allowed neither by law nor by a regulation of the executive power. Eachbody is obligated to refrain from performing or not performing an action which obstructs making or
enforcing court decisions.WT/ACC/807/5
Page 37
The independence of the judiciary is provided for by the provisions in the Law on Courts that
determine the inviolable effect of an irrevocable court decision and by the provision according to
which a court decision can be changed or abolished only by a competent court and in a procedure
regulated by the respective law.
According to the Constitution and the Law on Courts, judges are elected without limitations
to the duration of the mandate. Judges are elected and discharged from duty by the Parliament of the
Republic of Macedonia upon a proposal of the Republic Court Council. The Republic Court Council
is a body initially introduced by the Constitution of the Republic of Macedonia of 1991. According to
Article 104 of the Constitution, the Republic Court Council is composed of 7 members elected by the
Parliament of the Republic of Macedonia from the rank of eminent lawyers.
The Republic Court Council submits proposals to the Parliament on the elections and
discharge of judges, decides on their discipline and responsibility, estimates their expertise andconscientiousness in accomplishing their function. The Council submits proposals for the nomination
of two judges of the Constitutional Court of the Republic of Macedonia. The establishment of this
body, guarantees the independent position of judges, because it has become possible for the experts
and not the political bodies to make estimations in the most sensitive area (the election and the
discharge of the judges).
The judicial function is incompatible with any other public office or profession or a
membership in a political party. Judges may establish associations for protection of their interests,
promotion of the professional improvement and  pr otection of the independence and autonomy of the
judicial function.
Judges enjoy immunity. The Parliament of the Republic of Macedonia decides upon their
immunity. A judge and a jury judge cannot be held responsible for an opinion expressed in the
decision making. A judge cannot be detained without an approval given by the Parliament of the
Republic of Macedonia, except if he/she is caught in executing a criminal deed for which a
punishment of at least 5 years of prison is foreseen. The procedure for deciding upon the immunity of
the judges is expeditious and takes place after an opinion from the Republic Court Council has beenobtained.
Judges are discharged in cases determined by the Constitution and in a procedure determined
by law. According to the Constitution, judges ca n be discharged: a) upon their request; b) if they
permanently lose the ability to perform the judicial  duties, to be determined by the Republic Court
Council; c) if they fulfill the conditions for a full retirement; d) if they are convicted of a criminal
deed on an unconditional punishment of imprisonment of at least six months; e) because of a serious
disciplinary infraction prescribed by law, which makes them unsuitable for performing the judicialduties, to be determined by the Republic Court Council, and f) because of non-professional and
unconscientious performing of the judicial duties to be determined by the Republic Court Council in a
procedure provided by law. More serious disciplinary infractions which makes judges unsuitable for
performing judicial duties, and due to which they could be discharged shall be considered the
following: 1) a serious infraction of the public order which slanders their reputation and the reputationof the court; 2) party and political activities; 3) serving a public office or profession; 4) causing a
serious infraction of the relations in the court, that have a significant influence on the performing of
judicial duties, and 5) a serious infraction of the rights of the parties and the other participants in the
procedure which slanders the reputation of the court and the judicial function.
An important step in the promotion of independence of the judiciary in the Republic of
Macedonia is the preparation of the Law on Salaries of Judges and the establishment of an
independent court budget.WT/ACC/807/5
Page 38
Question 54
Please describe, and provide legal citations for, Macedonia’s procedures for (a) administrative
appeal of customs and other government decisions on issues covered by WTO Agreements (e.g.,
Article X of GATT, Customs Valuation, Import Licensing Procedures, TBT, SPS, TRIPS, etc.),
and (b) appeal to an independent  tribunal.
Answer:
An administrative appeal on customs and other government decisions on issues covered by
the WTO Agreements, such as import licensing, TBT, SPS, TRIPS and other procedures conducted
by ministries and government agencies is conducted under general rules for appeal in the
administrative procedure and are provided in the Law on Administrative Procedure (Official Gazette
of SFRJ 47/86).
The second instance procedure is conducted by a Second Instance Government Committee.
The Rules of Procedure of the Government provide for different committees established by the
Government. According to Article 58 of the Rules:
“For deciding in the administrative procedure in the second instance, the Government shall
constitute the following committees:
1. A committee for deciding on administrative cases in the second instance in areas of
defense, internal affairs, judiciary, administration and religious issues.
2. A committee for deciding on administrative cases in the second instance in areas of
commerce and trade.
3. A committee for deciding on administrative cases in the second instance in areas of
construction and urban planning.
4. A committee for deciding on administrative cases in the second instance in areas of
traffic, connections and environment.
5. A committee for deciding on administrative case in the second instance in areas of
education, science, culture, sports, archiving, informing and health and welfare
protection.
6. A committee for deciding on administrative cases in the second instance in areas of
agriculture, forestry, waterworks and veterinary practice.
7. A committee for deciding on administrative cases in the second instance in areas of
measures, cadastre and recording liens on real property.
8. A committee for deciding on administrative cases in the second instance in areas of
property issues and granting construction land.
9. A committee for deciding on administrative cases in the second instance in the area of
hazard games and slot machines games.
10. A committee for deciding on administrative cases in the second instance in the area of
pension and disability insurance.”
The Law on Administrative Disputes (Official Gazette of SFRJ 4/77, 36/77) provides for a
procedure before the Supreme Court as an independent tribunal. Under the provisions of this Law, anunsatisfied party may file a complaint against the second instance administrative decision within thirty
days from the day of delivery of the decision. The decision of the Supreme Court is final and binding.WT/ACC/807/5
Page 39
IV. POLICIES AFFECTING TRADE IN GOODS
1. Import Regulation
(a) Registration requirements for engaging in importing
Question 55
Are there any restrictions contained in the Law on Foreign Trade Operations or elsewhere that
limit the right of individuals or enterprises to engage in the importation or exportation of goods
or services.
Answer:
The Law on Trade Companies (published in Official Gazette no.28/96, 7/97, 21/98, 37/98,
63/98, 39/99) provides for the following types of trading companies: general partnership, limited
partnership, limited liability company, joint stock company and limited partnership by shares and a
sole proprietor. A trading company is an entity established by two or more founders, while a soleproprietorship is a form that entitles natural persons to enter into commerce.
In order to start operations, both the trading company and the sole proprietor must be
registered in the Trade Registry established in one of the three lower courts according to their
territorial jurisdiction.
The application submitted for registration of a trading company comprise of information on
the name of the company, the head office address, the scope of activities, the export-import activities,
the extent of liabilities and the director of the company. Each detail is entered on a separate form.
A company can perform, domestically and internationally only the activities registered in the
court. If a company is initially registered for performing activities within the country borders, the
export and import activities can be registered additionally. This procedure is not complicated.
Under the Macedonian legal system there are two ways for foreigners to perform business
activities.
1. Companies and sole proprietors registered with the authorities of a foreign country
may conduct business by registering a branch office of the company or the sole
proprietor in the Republic of Macedonia.
2. Foreign companies, sole proprietors and natural persons may perform commercial
activities through registering a company or a sole proprietorship with the Macedonian
authorities. The registered entity may be established with entirely foreign capital or
can have a mixed ownership structure. In any case, such an entity shall be considered
a Macedonian entity (a company or a sole proprietor).
Domestic sole proprietors are not allowed to register and perform export and import activities.
It can be explained by the nature of the sole proprietorship where the Law on Trade Companiesprovides for limited scope of business activities that are related and create a profession. However, the
Law on Foreign Trade stipulates that domestic natural persons who have not registered a company, a
shop or an agricultural business may, within the boundaries of the registered activity, engage in
foreign trade for their own purposes (export of  their own products and services, import for the
purposes of their own production and services, and for the purposes of investment activitiescooperation) without registering an export and import activity in the trade registry.WT/ACC/807/5
Page 40
As mentioned under 1, foreign sole proprietors may conduct business in the Republic of
Macedonia through a branch office registered in a Macedonian court.
The court procedure for registration is the same for domestic and foreign companies and
consists of the following two stages: a) submission of an application for the foundation of a company
or an application for additional changes in the status of an already registered company, and b) thecourt issues a decision for registration of the company. The application for registration may be
rejected only when legal requirements set in the Law on Trade Companies are not satisfied.
In addition, companies established with more than fifty per cent of foreign capital have to
initiate a procedure for registration of the foreign investment in the Registry of Foreign Investments
established within the Ministry of Trade prior to the court procedure.
Currently, due to the lack of modern equipment, courts are burdened with cases and the
registration procedure takes four weeks. Once courts are computerized (through EU PHARE andWorld Bank assistance) the registration procedure is expected to take approximately two weeks. The
fee paid to the court and other administrative bodies for a registration of a company is approximately
US$150.
When a company has the import and export activities registered in a court, it registers in the
Customs Registry within the Customs Departme nt to obtain a Unique Customs Number. This
procedure takes a few days.
Question 56
Detailed procedures, including the requirement s whether the authorities accept or reject an
application for registration, should be informed.
Answer:
Please refer to Question 55.
Question 57
Please specify the conditions for obtaining th e registration necessary for engaging in foreign
trade, including the costs and length of the procedure.
Answer:
Please refer to Question 55.
Question 58
Can natural persons engage in importation activities? If not, why?
Answer:
Please refer to Question 55.
Question 59
Please list the criteria necessary for a domestic or foreign individual or entity to register for
foreign trade.WT/ACC/807/5
Page 41
Answer:
Please refer to Question 55.
Question 60
Does Macedonia limit the right of individuals or firms to import and export goods? If so, please
list these limitations.
Answer:
Please refer to Question 55.
Question 61
Does Macedonia require commercial registration of individuals or firms to engage in domestic
commerce? If so, does this include reference to “scope of business”?
Answer:
Please refer to Question 55.
Question 62
Can a firms right to import or export be limited by its scope of business? If so, how can a firm
amend its scope of business to be able to import and export?
Answer:
Please refer to Question 55.
Question 63
Does the Law on Trading Companies require that a foreign or domestic firm  already registered
to conduct domestic business re-register to engage  in foreign trade ? Are the criteria to register
to engage in foreign trade different from those for domestic commercial registration ? If so,
how?
Answer:
Please refer to Question 55.
Question 64
Macedonia states in 807/3 that foreign trad ing companies and traders may not engage in
business in the Republic of Macedonia until they establish a branch.
Please explain the reason for this requirement and the practical implications for a foreign firm
seeking to import and export as part of its investment and business in Macedonia.
Answer:
Please refer to Question 55.WT/ACC/807/5
Page 42
(b)      Characteristics of national tariff
Question 65
We hope that the new Custom Tariffs Act which will replace the currently applied Custom
Tariffs Act inherited from the former SFRJ shell bind lower tariff duty rate then those
stipulated in the current Custom  Tariffs Act. We also hope that Macedonia shall soon provide
its initial offer on goods.
Answer:
The Republic of Macedonia started the preparation of its initial offer on schedule on trade in
goods and has an intention to submit it after the first Working Party meeting.
Question 66
Thus far the Republic of Macedonia has been applying the Customs Tariffs Act inherited from
the former SFRY which does not confirm with the structure of the economy, development and
fiscal policy. What is the current situation regar ding the adoption of the new Customs Tariffs
Act?
Answer:
The Customs Tariff is governed by the new Law on Customs Tariff (Official Gazette 38/96,
45/97, 54/97, 61/97, 26/98) that became effective on 15 August 1996. (This Law will be submitted tothe WTO Secretariat, Accession Division, Office N o. 1126 in electronic format for examination by
the Working Party members.)
Question 67
In WT/ACC/807/3, Macedonia states that one of its policy objectives in international trade is the
“conclusion of free trade agreements,...”
Does that mean that the revenue effect of tariff reduction is not a primary consideration?
Considering Macedonia’s tariff schedule:
Answer:
With respect to free trade agreements, the Republic of Macedonia’s primary consideration is
to extend the regional cooperation and to provide for a bigger market in order to attract foreigninvestments.
Question 68
Please provide a copy of  Macedonia’s current tariff rates, preferably in electronic format.
Answer:
The tariff is an integral part of the Law on Customs Tariff. Please refer to Question 66.WT/ACC/807/5
Page 43
Question 69
Please confirm that Macedonia has established its customs schedule to the HS96 nomenclature .
Macedonia’s WTO goods  market access Schedule tariff  commitments should be  negotiated
and established  in HS96 format.
Answer:
The Republic of Macedonia is a Contracting Pa rty to the Harmonized System Convention and
the Macedonian tariff is established on the HS96 nomenclature. The Republic of Macedonia’s offer
on market access will be established and negotiated using the HS96 format.
Question 70
We were disappointed to read in WT/ACC/807/3, that for certain agricultural products and
foodstuff, the customs tariff goes up to 60 p er cent and that the Customs Tariff Act foresees
specific rates in addition to ad valorem  tariffs. A 60 per cent tariff on agricultural and food
products is very high.
We hope that Macedonia is prepared to make substantive improvements in market access for
agricultural and food products.
Answer:
The Republic of Macedonia started the preparation of its initial offer on schedule on trade in
goods, including agricultural and food products, and has an intention to submit it after the first
Working Party meeting.
Question 71
From the description in WT/ACC/807/3, it is uncle ar whether the Customs Tariff  Act contains
provisions for future application of specific tariffs in addition to or in place of current ad
valorem  tariffs, e.g., as necessary, or if the Customs Tariff Act provides for the introduction of a
combined tariff (i.e., an ad valorem  rate plus a specific duty in a single tariff rate )
We would appreciate clarification by Macedonia on this point
Answer:
Under the Law on Customs Tariffs of the Republic of Macedonia, two types of tariffs are
applied: ad valorem tariffs and specific tariffs.
Under the Law for Paying the Specific Duty on the Importation of Agricultural and Food
Products, the price premiums (P-prelevman) were introduced for agricultural and food products
essentially as a seasonal protection. Prelevman represents a difference between the imported price
plus the amount of tariffs and other import charges and the average price in the domestic market.
(c) Tariff quotas, tariff exemptions
Question 72How are the quotas distributed, e.g., first come, first served; auctioning; historic trade flows,
etc.?WT/ACC/807/5
Page 44
Answer:
The allocation of tariff quotas under Free Trade Agreements with the Republic of Slovenia,
the Federal Republic of Yugoslavia and the Republic of Croatia is based on the fulfillment of
conditions provided in a Decision for each country. The Republic of Macedonia has recently started
renegotiation of the FTAs with Yugoslavia, Croatia and Slovenia in which the principle of the “firstcome, first served” will be included.
The tariff quotas under Free Trade Agreements with Bulgaria and Turkey (to be implemented
upon ratification by Turkey) are allocated on the “first come, first served” principle.
Please refer to Annex 3 and questions 73 and 273.
Question 73
Are these the only tariff-rate quotas currently applied on imports?
Answer:
Amendments to the Customs Law (Official Gazette 25/00) implemented on 1 April 2000,
Article 24a, introduced tariff quotas.
Article 24a says the following:
“(1) In compliance with the macroeconomic policy for the development in the current
year, the Government of the Republic of Macedonia may determine tariff quotas forimportation of certain goods that are not produced in the Republic of Macedonia, or
the production of which does not cover the needs.  These goods may be imported
duty free or subject to lower tariff rates than the rates published in the Customs
Tariff.
(2) According to the act pertaining to paragraph 1 of this Article, the Minister of
Economy shall approve the importation of goods to which tariff quotas may apply.
(3) Goods for which duty free tariff quotas apply shall not be considered as exempt from
customs duty.”
(d) Other duties and charges
Question 74Can the Republic of Macedonia advise whether it imposes any other duties and charges of the
kind covered by Article II.1(b) of GATT 1994? If so, does the Republic of Macedonia intend to
eliminate such duties and charges in the context of its accession?
Answer:
There is a charge of 0.1 per cent applicable to all imports (see column 7 in the draft offer on
tariff concessions in goods) and exports.  This charge is used for export promotion.WT/ACC/807/5
Page 45
Question 75
The fee of 1 per cent percent of custom evidential appears to be inconsistent with Article VIII of
GATT 1994 as it is not limited to the cost of providing the service.
What plans does the Republic of Macedonia have to modify this policy?
Answer:
Please refer to Question 76.
Question 76
According to Article VIII of GATT any ch arge imposed on the import of goods must
correspond to the cost of a service rendered. Please specify the service rendered on the occasion
of the charge of the 1 per cent fee for customs evidential. Please note that fees which are
consistent with Article VIII of GATT cannot be in ad valorem format.
Answer:
Imported goods, except goods exempt from customs duty under the current regulations, are
charged 1  per cent of the customs base for services rendered.
Question 77
In WT/ACC/807/3 Macedonia reports that it applies a tax of one per cent on the importation of
goods as a “ fee for customs evidential “. An ad valorem  fee for customs purposes is inconsistent
with Article VIII of the GATT.
Please indicate how and what timeframe Macedon ia intends to alter of eliminate this fee to
bring it into conformity with WTO provisions.
Answer:
Please refer to Question 76.
Question 78
Can the Republic of Macedonia confirm that the fees for custom clearance represent the actual
costs of providing such services? Can the Repub lic of Macedonia provide the comprehensive list
of such fees?
Answer:
Please refer to Question 76.
Question 79
Please list all charges, or fees for customs or other purposes applied to imports, other than
customs tariffs and taxes also applied to domestic articles.
All charges are equally applied to domestic goods.WT/ACC/807/5
Page 46
(e) Quantitative import restrictions, including prohibitions, quotas and licensing systems
Question 80
It is our view that distribution of quotas through an auction system cannot be consistent with a
member’s commitments under the WTO as the auct ion premiums would result in charges been
imposed in excess of the bound rates  of duty to be agreed in tariff negotiations.
Does the Republic of Macedonia have plans to change the auction system currently used for
quota distribution?
Answer:
The “Q” regime mentioned in WT/ACC/807/2 is the same thing as the “K”- quantity
contingent regime (the mistake was made in the process of translation when the letter K was replaced
with Q) and it no longer applies. Allocation through auction was characteristic for this regime. For
allocation of tariff quotas under bilateral agreements please refer to Question 72.
Question 81
WT/ACC/807/3 states in section IV 1(e) that quantitative import restrictions were canceled as
from 31 December 1996.
Please confirm that the "quantity contingent" "KK" licensing regime applied to the imports
listed in Annex I of WT/ACC/807/2 has been abolished. If not, please update the informationfrom 1996. If so, has the legal authority to apply such a regime been abolished, or has its use
simply been suspended?
Answer:
Information given in 807/3 is correct. The “quantitative contingent - KK regime” for import
licensing listed in Annex 1 of WT/ACC/807/2 was abolished with the Decision for Amending theDecision on Classification of Goods for Imports and Exports (Official Gazette 64/96).
Question 82
Can Macedonia confirm that no quotas exist today and that it has no plans to re-impose quotas
on imports?
Answer:
As indicated in question 81, quantitative restrictions no longer apply. However, tariff quotas
are applied in the Republic of Macedonia.
Please refer to Questions 72 and 73.
Question 83
Could the Republic of Macedonia provide us more information on the question of safeguarding
domestic production explained under e (Quantitative import restrictions, including
prohibitions, quotas and licensing systems)? Which specific items are affected by thosemeasures?WT/ACC/807/5
Page 47
Answer:
Please refer to Annex 3 and question 73.
(f) Import licensing procedures
Question 84
WT/ACC/807/3 states that under the Law on Fo reign Trade Operations, certain goods may be
imported on the basis of "L" licence, in accord ance with  international agreements, regulation
of importation of arms and military equipment, import of industrial and artistic works, and of
certain precious metals. A need for an import li cence is also foreseen for military equipment,
historic and artistic works, certain precious metals, narcotic drugs and alike. Finally, it states
that for importation of certain agricultural products and foodstuff and other products, it is
necessary to obtain approval or permission and certificate of the competent bodies and
institutions. This information is not sufficient to assess WTO conformity of Macedonia's systemof regulation of imports.
Please list all products by HS number that are subject to such requirements.
Answer:
Lists of products subject to licensing are attached to Annex 3.
Question 85
Can Macedonia indicate how it intends to justify under WTO provisions the use of
discretionary import permits under WTO provisions for certain industrial, agricultural,
foodstuff and other products?
Answer:
Please refer to Question 87.
Question 86
Does Macedonia have any other legal authority to apply quantitative restrictions, import
permits, or prohibitions on imports other th an that contained in the Foreign Trade Law?
Answer:
There are no other legal authorities that apply quantitative restrictions, import permits or
prohibitions other than as provided in the Law on Foreign Trade. However, as indicated in question
81, the Republic of Macedonia no longer applies quantitative restrictions.
Question 87
Can the Republic of Macedonia provide details of the specific goods subject to import licensing
and the reasons for these measures?WT/ACC/807/5
Page 48
Answer:
Article 4 of the Decision on Classification of Goods for Imports and Exports (Official Gazette
39/96, 64/96, 66/96, 67/96, 45/97, 54/97, 66/97, 20/98, 26/98, 17/ 99, 20/99, 21/99, 23/99, 24/99,
28/99, 33/99, 42/99, 49/99, 55/99) provides for the conditions for obtaining licences for imports.
Ministries responsible for issuing of licences for products in their field are: Ministry of Trade,
Ministry of Agriculture, Ministry of Health, Ministry  of Environment, Ministry of Internal Affairs and
Ministry of Defense.
Licences are issued for the following reasons:
- due to unpredicted circumstances and over a short period of time, import or export of
certain goods increase significantly and may lead to distortions in the domestic
market or cause significant damage to the domestic production and trade;
- protection of infant industries;- difficulties in the balance of payments;
- protection of the environment;
- protection of human and animal health and protection of plants;
- consistency with TRIPS;
- control over circulation of poisons and narcotic drugs in conformity with international
conventions;
- control over circulation of weapons and explosives.
The import licensing system also provides for the introduction of temporary licences. They
are applied for a limited period of time. Such measures were introduced in April 1999 and abolished
in September 1999 due to economic conditions created by the crisis in the region, as permitted underArticle XXI b (iii) of GATT 1994.
Lists of products subject to licensing are attached to Annex 3.
Question 88
The Republic of Macedonia indicates that it is necessary to obtain approval, permits or
certificates to import certain agricultural  products, foodstuffs and other products.
Can the Republic of Macedonia provide details of  this arrangements, the products covered, the
reasons for these requirements, and the conditions to be met?
Answer:
Please refer to Question 87.
Question 89
Criteria and standards, whether the authorities accept or reject the application of import
licensing should be clearly informed.WT/ACC/807/5
Page 49
Answer:
Please refer to Annex 3.
Question 90
An exhaustive list of the products and services, based on the HS numbers and the CPC codes
which are subject to the import licensing requirements and activities licensing requirements,should be provided.
Answer:
Please refer to Question 87, Annex 3 and Annex 7.
Question 91
Justification for each import licensing requirement should be explained in detail: e.g. security,
public moral and the conservation of the exhausti ble natural resources, as prescribed in Articles
XX and XXI of the GATT 1994.
Answer:
Please refer to Question 87 and Annex 3.
Question 92
Macedonia should confirm the minimizing of the incidence and complexity of import and export
formalities and of decreasing and simplifying import and export documentation requirements.(Article VII 1. (c) of the GATT 1994).
Answer:
The Republic of Macedonia intends to reduce and simplify the documentation required for
granting import/export licences in accordance with the provisions of the WTO.
Question 93
Please provide, in a table format, the list of  goods submitted to quantitative restrictions (in
addition to seasonal goods) and those goods submit ted to import-export licensing, specifying the
WTO justification for such decision.
Answer:
Export licences are applied to prevent shortage of certain basic products on the market under
Article XX of the GATT.
Lists of goods subject to import and export licensing are attached to Annex 3.
For import and export licensing procedure please refer to Annex 3.
Refer also to Question 73.WT/ACC/807/5
Page 50
Question 94
Please describe in detail the import-export licensing procedure (automatic/non-automatic,
Ministry responsible, requirements to obtain the licence, cost and length of the procedure,
duration of the licence, procedure for its renewal).
Answer:
Please refer to Annex 3.
Question 95
WT/ASS/807/2 and 807/3 report that the Law on Foreign Trade Operations requires licences for
the following goods: those covered in internat ional agreements; arms and military equipment,
industrial and artistic works; certain precious metals; and narcotic drugs. It also states that
imports of certain agricultural products, foodstuff and other products, require approval,
permission or certification from th e competent bodies and institutions.
Please provide a list, by HS number, of all import goods subject to automatic or non-automatic
licensing.
Answer:
Please refer to Question 87 and Annex 3.
Question 96
Please include the rationale for requiring the approval and details about the process of
obtaining approval.
Answer:
Please refer to Annex 3.
Question 97
What criteria are applied to decide whether or  not an applicant gets the licence to import?
Answer:
Please refer to Annex 3.
Question 98
What are the procedures for obtaining a licence for imports subject to quantitative restrictions,
and how are the licences distributed?
Answer:
As indicated in question 81, no quantitative restrictions apply to imports.WT/ACC/807/5
Page 51
Question 99
What are the procedures for obtaining a licence for imports not subject to quantitative
restrictions?
Answer:
Please refer to Annex 3.
Question 100
In accordance with Article III: 5(e) of the Import Licensing Agreement, does Macedonia have
legislation or procedures in place enabling applicants to request the reasons for which
applications for import licences are denied and to request a review of denials?
Answer:
The import licensing procedure is conducted in conformity with general provisions of the
administrative procedure set in the Law on Administrative Procedure (Official Gazette of SFRY47/86). The ministries responsible for issuing licences take the first instance decision. In case of
refusal, an appeal is filed with the respective Second Degree Government Committee. Finally, the
second degree decision may be reviewed by the S upreme Court, as an independent tribunal, upon
complaint filed by the unsatisfied party. The ruling of the Supreme Court is final.
Refer also to Question 54.
Question 101
Macedonia has not yet submitted its Import Licensing Questionnaire as provided for in
WT/ACC/1, Annex 3.
Please complete this questionnaire for all import licences, permits, or quotas currently
authorized by Macedonian law and indicate if these measures are currently applied. Pleaseprovide this information prior to the first meeting of the Working Party.
Answer:
Annex 3 on import licensing is submitted.
Question 102
In WT/ACC/807/2, Macedonia described the "Q" import licensing regime, where a system of
administering import licences through quarterly auctions of quotas was established. It claimed
that this process had been approved by unnamed "international financial institutions".
Which "international financial institutions" approved this scheme? Is it still in effect? If not,
has the legal authority to conduct such auctions been abolished or has it merely been
suspended?WT/ACC/807/5
Page 52
Answer:
Formerly, the “K” import licensing regime was under the competence of the Ministry of
Foreign Affairs. However, this is no longer relevant because the “K” regime was in the meantime
abolished.
Question 103
Is Macedonia using or contemplating the use of th is system now after its accession to the WTO?
If so, for what purpose other  than the administration of quotas are licences auctioned? How
will Macedonia reconcile the auction of import licen ces with its responsibilities under Articles II
and VIII, i.e., its tariff bindings and the obligations to apply customs charges to imports in
excess of its bindings only for services rendered?
Answer:
Please refer to Questions 71 and 76.
(g) Other border measures
Question 104
Please provide more information to the Workin g Party on long-term co-operation contracts by
enterprises. What do they entail, how are they ce rtified, and what benefits do they gain for the
contracting enterprises?
Answer:
Long-term cooperation contracts provide for cooperation between domestic and foreign
companies in the field of production. These contracts are regulated by Articles 16 and 17 of the Law
on Foreign Trade:
Article 16
“Enterprises and other legal entities cannot, within the scope of their production activities,
conclude a contract for long-term production cooperation with  a foreign legal entity or
physical person, without an approval by the Ministry of Trade.
The approval as stated in Paragraph 1 of this Article may be issued if the contract is in written
form and has been effective for at least three years, if the value of exports subject to thecontract is at least equal to the value of imports, and if the exchange includes raw materials,
intermediate products, spare parts and ready-made products of the same type, for the purpose
of specializing the production.
Payment and collection resulting from activities of contracts under Paragraph 1 of this Article
will be carried out upon compliance with the law regulating currency transactions.
On the basis of contracts and upon an approval stated in Paragraph 1 of this Article, goods are
exported and/or imported freely.”WT/ACC/807/5
Page 53
Article 17
“Contracts stated in Article 16 of this Law and changes made to it are submitted to the
Ministry of Trade, to be approved within thirty days of the date of its signing, i.e. the changes
and additions, in an original and verified translation, along with a summary specification of
goods to be exported and imported in each year of the duration of the contract.
The Ministry of Trade is obliged to decide on the application for approval under Article 16 of
this Law within thirty days from its submission. If no decision is made within that time, the
contract will be regarded as approved.”
(h)       Customs valuation
Question 105
We note from WT/ACC/807/3 that the Republic of Macedonia has passed new legislation, to
come to effect from 01/01/2000, which accords with the Customs Law of the EU.
Can the Republic of Macedonia provide the copy of the new Customs Law?
Answer:
The Law on Customs (Official Gazette 21/98, 26/98, 63/98, 25/00) will be available as part of
Annex 2 for examination by the Working Party members. Last amendments adopted in March 2000
and published in Official Gazette 25/00 will be submitted when translated English.
Question 106
Is our understanding correct that Macedonia will  implement the Custom Valuation Agreement
without recourse to the transition al period since it has already accepted Article VII of the
GATT? Has Macedonia currently introduced the minimum reference prices?
Answer:
Article VII of GATT 1994 on customs valuation is  implemented by the provisions of the Law
on Customs. The Republic of Macedonia intends to adhere to the Customs Valuation Agreement.
The Republic of Macedonia does not apply minimum reference prices.
Question 107
Can the Republic of Macedonia confirm it will  fully apply Article VII of GATT 1994 and WTO
Agreement on implementation of Article VII from the date of its accession to the WTO?
Answer:
Please refer to Question 106.
Question 108
Please submit to the WTO Secretariat a copy of the new Custom Law.WT/ACC/807/5
Page 54
Answer:
Please refer to Question 105.
Question 109
In WT/ACC/807/3 Macedonia stated that a new Customs Law adopted by the Assembly of the
Republic of Macedonia and will enter into force from 1 January 2000.
Please confirm that the new Law will prohibit the use of minimum import values or prices for
customs purposes or for the application of taxes or other charges or fees on imports.
Answer:
The composition of the customs value and the methods for its determination are regulated by
Articles 28 - 39 of the new Law on Customs, the implementation of which started on 1 April 2000.
Article 31 of the Law prohibits an application of minimum values for
determination/estimation of duties on imports.
Question 110
Please provide a copy of this law. Please prov ide any regulations, e.g. the ones that implement
the Interpretive Notes of the Agreement, and ot her aspects of the WTO's customs valuation
regime not dealt with  directly in the new law.
Answer:
Please refer to Questions 105, 109 and Annex 4.
The Regulation on Customs Valuation was adopted (Official Gazette 17/00). It will be
submitted to the WTO Secretariat when translated into English.
Question 111
Please complete the questionnaire on customs valuation in Annex 4 of WT/ACC/1 and submit it
to the Working Party prior to its first meeting.
Answer:
Annex 4 on customs valuation will be submitted.
(i) Other customs formalities
Question 112Please explain the requirements for importing used cars into the Republic of Macedonia.
Answer:
According to the last amendments to the Law on Foreign Trade published in the Official
Gazette 82/99, second-hand cars not older than six years from the date of production and equipped
with a catalyzer,  may be imported in the Republic of Macedonia.WT/ACC/807/5
Page 55
 Question 113
Does Macedonia require certification of import documents by consulates in the country of
origin? If so, please describe the procedure and any charges applied.
Answer:
The Republic of Macedonia does not require certification of import documents by consulates
in the country of origin.
(j) Pre-shipment inspection
Question 114
WT/ACC/807/2 outlines how the Republic of Macedonia regulates PSI but WT/ACC/807/3
states that it has so far not applied PSI.
Can the Republic of Macedonia provide clarification?
Answer:
The Republic of Macedonia does not use pre-shipment inspection (PSI) services.  The
Republic of Macedonia has no plans to use a private PSI company to provide customs or other
services covered by the WTO PSI Agreement.
Question 115
Although not currently applied, does the Republic of Macedonia have in place specific laws and
regulations in PSI area? If so, can the Republic of Macedonia provide a copy?
Answer:
The Republic of Macedonia has no legislation which is relevant to PSI.
Question 116
Does the Republic of Macedonia  intend to introduce pre-shipment inspection? If so, does the
Republic of Macedonia undertake to assure the consistency of the system with the relevant
WTO rules?
Answer:
Please refer to Question 114.
Question 117
Macedonia states in WT/ACC/807/3 that through April 1999 it does not use pre-shipment
inspection (PSI) services.
Is this still the case? Does Macedonia have any plans to contract with a PSI firm to provide
customs or other services covered by WTO provisions?WT/ACC/807/5
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Answer:
Please refer to Question 114.
(l)       Rules of Origin
Question 118
Can the Republic of Macedonia provide to the Working Party a copy of its laws and procedures
for identifying country of origin of goods?
Answer:
The identification of the country of origin is governed by the Law on Customs, Articles 25,
26, 27 and 27a (Official Gazette 21/98, 26/98, 63/98, 25/00), the Decision on the Manner of
Determining Origin (Official Gazette 26/00), and the Protocols on the Rules of Origin pertaining to
the free trade agreements that the Republic of Macedonia has signed.
The Customs Law and the Free Trade Agreements will be available for examination by the
Working Party members as part of Annex 2.  The Decision on the Manner of Determining Origin will
be submitted when translated into English.
Question 119
Please clarify whether proof of origin is required for products originating from all countries or
only from these countries exporting to the Republic of Macedonia under a preferential scheme?
Answer:
Proof of origin is only required for goods imported in the Republic of Macedonia under
preferential terms, pursuant to the free trade agreements.
Question 120
Where proof of origin is required, what constitutes that proof?
Answer:
The origin of goods is proved by a Certificate of Movement EUR 1 issued by the customs
authorities in the exporting country upon a written request of the exporter or an invoice declaration.
The proof of origin contains the following information: the quantity and the type of goods, the
description of goods, the exporter and the name of the country issuing the proof of origin of thegoods.
Question 121
Under what circumstances might “group of countr ies be considered as one country for origin
purposes”? For example, does the EC count as one country for origin purposes?
Answer:
A group of countries may be considered as one country for origin purposes if the legislation
of individual countries on rules of origin is harmonized and consolidated, meaning that such countriesWT/ACC/807/5
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have ratified pertinent conventions, declarations and recommendations of the international community
and apply the Harmonized System and the Certificate EUR 1.
Question 122
Does Macedonia still use the method of assessing the origin of goods described in
WT/ACC/807/2?
Answer:
The method of assessing the origin of goods described in WTO/ACC/807/2 still applies.
However, for countries with which the Republic of Macedonia has signed free trade agreements, the
provisions in the Protocols pertaining to rules of origin apply.
Question 123
We seek confirmation from Macedonia that prior to WTO accession, it will adopt legal
provisions for rules of origin that conform fu lly with the requirements of the WTO Agreement
on Rules of Origin.
Answer:
The Decision on the Manner of Determining Origin and the Regulation on the Criteria and the
Time Limits for Proving Origin of Goods were a dopted by the Government  (Official Gazette 26/00)
and started to implement since 1 April 2000. They will be submitted to the WTO Secretariat whentranslated into English.
Question 124
In this regard, we seek legal regulations that meet the requirements of Article 2(h) and Annex
II, paragraph 3(d) of Agreement, which require provision upon request of an assessment of the
origin of the import and outline the terms under which it will be provided.
Answer:
Please refer to Question 123.
(m) Anti-dumping regime
Question 125
We are interested to insure that the Republic of  Macedonia’s anti-dumping regime is consistent
with WTO requirements. WT/ACC/807/2 makes reference to the Law on Foreign Trade
Operations (Article 54).
Are there any further details or regulations fl owing from this Article, which relate to the
Republic of Macedonia’s anti-dumping regime and procedures?
Answer:
Anti-dumping measures are set forth in two laws: the Law on Trade (Official Gazette 23/95)
and the Law on Foreign Trade (Official Gazette 31/93). Please refer to Annex 2.WT/ACC/807/5
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The only provision in the Law on Trade concer ning anti-dumping measures is contained in
Article 34, which stipulates that: “The Government shall undertake necessary measures for protection
from dumped prices and shall estimate their duration.”
These necessary measures are set forth in greater detail in Article 54, of the Law on Foreign
Trade.
Article 54, paragraph 1 stipulates that “The Government of the Republic of Macedonia may subscribe
anti-dumping charges, if in properly performed procedures finds that there is a substantial injury or
danger of injury for domestic producers.”
Paragraph 2 defines the existence of dumping: “It is considered that dumping exists when
certain goods are imported at prices that are lower than their actual value, and cause or threaten to
cause serious injury to the existing production, or that such an import would hamper the development
of particular domestic production”.
Paragraph 3 stipulates the value and the period of time of the anti-dumping duty which
“cannot be higher than the dumping margin and it remains in effect for a time and at a value necessary
to neutralize the dumping.”
Paragraph 4 indicates that a proposal for introducing anti-dumping duties may be submitted
by affected companies through the Chamber of Commerce of Macedonia. The proposal must includeevidence of the existence of dumping, harmful consequences and demonstrate the link between the
dumped import, and the real or potential injury.
Paragraph 5 lays down a procedure in accordance with the provisions of the Law compatible
with the antidumping provisions under the GATT. In the case that an antidumping duty is applied, the
Customs Office of the Republic of Macedonia is responsible for the collection.
Question 126
What is the Republic of Macedonia’s definition of “real value”?
Answer:
The term used in Article 54 of the Law on Foreign Trade is “normalna vrednost” which
should be translated into English as “normal value”. However, Article 54 does not define the term“normal value”.
Question 127
WT/ACC/807/2 also refers to proposals for the introduction of anti-dumping duties made by
enterprises concerned”.
Who may lodge an application for anti-dumping  duties? What is the Republic of Macedonia’s
definition of domestic industry?
Answer:
For an application for anti dumping duties, please refer to Question 125.
Any company registered with the Macedonian authorities and involved in the industrial
activity falls under the definition of a domestic industry.WT/ACC/807/5
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Question 128
The current situation in which Macedonia has introduced the relevant Laws and regulations
relating to the antidumping ch arges should be informed.
Answer:
Please refer to Question 125.
Question 129
Please update the working party on antidumping duty and safeguard legislation.
Answer:
Please refer to Questions 125 and 135.
Question 130
Macedonia's regulations to implement safeguard, antidumping, and CVD actions on imports
are contained in the Law on Foreign Trade. We ar e reviewing the text of this law, and will have
detailed comments at a later time.
What are Macedonia's plans for usin g these measures in the future?
Answer:
Please refer to Question 131.
Question 131
Is Macedonia developing amended legislation to fully comply with the provisions of the WTO
Agreements on Safeguards, Antidumping, and Subsidies and Countervailing Measures as they
relate to trade remedies?
Answer:
The Government of the Republic of Macedonia examines the feasibility and the necessity of
the introduction of a legislation on antidumping, countervailing and safeguard measures.
(n) Countervailing duty regime
Question 132
We are interested to ensure that the Republic of Macedonia’s countervailing duty regime is
consistent with WTO requirements. WT/ACC/807/2 makes reference to the Law on ForeignTrade (Articles 52 and 53).  What are the provisio ns and procedures provided by these articles?
Answer:
According to Article 54, paragraph 6 of the Law on Foreign Trade, in order to neutralize the
consequences of subsidies and premiums, directly or indirectly applied by the country of origin or the
country - exporter of products imported into the Republic of Macedonia, the Government of theWT/ACC/807/5
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Republic of Macedonia can prescribe countervailing custom duty in an amount not higher than the
amount of the subsidy or premium.
There are no regulations regarding the procedure for application of the countervailing custom
duty mentioned in the Law.
Question 133
Are there further regulations relating to countervailing duty procedures?
Answer:
There are no other existing regulations regarding the countervailing duty procedure.
Question 134
Does the Republic of Macedonia intend to introduce a legislation regulating the countervailing
duty regime ?
Answer:
Please refer to Question 131.
(o) Safeguard regime
Question 135
We are interested to determine whether the Republic of Macedonia’s safeguard measures are
consistent with GATT Article XIX and the WTO Agreement on Safeguards.
Can the Republic of Macedonia provide a copy of the provisions on safeguards contained in the
Law on Foreign Trade Operations?
Answer:
Safeguard measures are dealt with in Articles 52 and 53 of the Law on Foreign Trade
(Official Gazette of the Republic of Macedonia No. 31/93, 41/93, 78/93, Constitutional CourtDecision no.44/96 - 40/96, 59/96, 15/ 97, 13/98, 13/99, 50/99). This Law will be available for
examination by the Working Party as part of Annex 2.
The provisions from Article 52 and 53 of the Law on Foreign Trade read:
Article 52
“If the foreign trade and the balance of payments in the Republic of Macedonia are disturbed,
the Government will introduce measures to eliminate the disturbance.”
Article 53
“If, due to unpredictable circumstances and in a short period of time, imports and/or exports
of certain goods are considerably increased or performed in a manner that distorts the market,
that is, negatively influences the supply at the domestic market, injure or threaten to injure the
production or sale of those goods in the Republic of Macedonia, the Government mayWT/ACC/807/5
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introduce temporary measures to eliminate the distortions and the injury. The measures shall
stay in effect until distortions are eliminated and injury is restored.
A proposal for an introduction and termination of measures of Paragraph 1 of this Article may
also be submitted by the Ministry of Trade, the Ministry of Agriculture, Forestry and Water
Industry, the Chamber of Commerce and all affected enterprises, along with reports on thecaused injury or the injury that would be caused if the measures are not undertaken, as well as
on the relation between imports and exports under defined circumstances and the injury
resulting from such a relation.
prior to introduction of the measures of Paragraph 1 of this Article, all member countries of
GATT will be notified and all parties interested in the goods to imports or exports of which
measures pertain, will be given an opportunity for consultations. In exceptional cases, when a
delay of measures would cause a serious injury, the Government of the Republic ofMacedonia will introduce measures even before consultations take place. In this case, the
consultations will be scheduled in the nearest possible future.
For the purpose of securing regular supply of foodstuffs and other strategic products, as well
as for the protection of Macedonia’s own non-renewable natural resources, the Government
of the Republic of Macedonia may introduce measures for temporary limitation or a ban onexports of such products.”
Question 136
Does the Republic of Macedonia intend to implement regulations to prescribe procedures and
conditions for the introduction of safeguard measures?
Answer:
Please refer to Question 131.
Question 137
Does  the Republic of Macedonia intend to introduce the legislation regulating the use of
safeguard measures?
Answer:
Please refer to Question 131.
2. Export Regulation
(a) Registration requirements for engaging in exporting
Question 138
Are there any restrictions contained in the Law on Foreign Trade Operations or elsewhere that
limit the right of individuals or enterprises to engage in the importation or exportation of goods
or services.WT/ACC/807/5
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Answer:
Under the Law on Foreign Trade conditions for individuals or enterprises for engaging in
exportation of goods and services are the same like for importation.
Please refer to Question 55.
(b) Customs tariff nomenclature, types of duties, duty rates, etc.
Question 139
Does Macedonia apply export duties or taxes?
Answer:
The Republic of Macedonia does not apply export duties. However, there is a charge of 0.1
per cent applied to all exports which is used for export promotion.
(c) Quantitative export restrictions, including prohibitions, quotas and licensing systems
Question 140With references to WT/ACC/807/3, can the Republic of Macedonia elaborate what is meant by
the requirement to obtain approvals for certain ex ports on the basis of “ the need to protect the
environment and to facilitate development of strategic industries”? In particular, can the
Republic of Macedonia advice what criteria are applied to constitute grounds for refusal of
applicant’s request for export approval?
Answer:
The list in Annex 3 on export licensing indicates products for which an export permit is
required. The restriction for exporting these products is determined and applied according to the
necessity in order to avoid temporary shortage of food, inputs needed for domestic processing
industry or the protection of the environment as permitted by Article XX of GATT 1994.
Please refer to Annex 3.
Question 141
Does Macedonia apply any quantitative export restrictions? If so, please list the products so
regulated by HS96 number and indicate the reasons for the restrictions.
Answer:
The Republic of Macedonia does not apply quantitative export restrictions, but some products
are subject to licensing for strategic reasons.
A list of products subject to approval for exports is attached to Annex 3.
Please refer to Question 145.WT/ACC/807/5
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Question 142
Annex I, appendix 3(b), WT/ACC/807/3 lists export quotas for 1999 administered by Macedonia
for trade with the Federal Republic of Yugoslavia.
What is the nature of these quotas, i.e., are they duty-free tariff rate quotas applied by the
Federal Republic of Yugoslavia, or are they maximum exportable quantities, i. e., export quotas.
Answer:
Export quotas administered by the Republic of Macedonia for trade with the Federal Republic
of Yugoslavia are duty free tariff quotas provided by the Free Trade Agreement between the two
countries.
Question 143
Does Macedonia distribute the quota among its exporters? If so, how is it distributed, e.g. first
served, accounting,  historic trade flows, etc.?
Answer:
The export tariff quotas are distributed in the same manner as the import ones. Please refer to
Question 72.
(d) Export licensing procedures
Question 144Please provide a list of “strategic products” which may be limited for exportation by the
government. What legislation is in place for enacting such export limitation?
Answer:
List of products subject to export licensing will be attached to Annex 3. Licences are issued
under Article 12 of the Law on Foreign Trade and the Decision on Classification of Goods for Importsand Exports.
Question 145
WT/ACC/807/3 states IV 2(c) that quantitative export restrictions were cancelled as from 31
December 1996.
Please confirm that the "quantity contingent" "KK" licensing regime applied to exports listed
in Annex I of WT/ACC/807/2 has been abolished. If not, please update the information from
1996. If so, has the legal authority to apply such a regime been abolished, or has its use simply
been suspended?
Answer:
The “quantitative contingent - KK regime” fo r exports listed in Annex 1 of WT/ACC/807/2
was abolished with the Decision for Amending th e Decision for Classification of Goods for Imports
and Exports (Official Gazette 64/96).WT/ACC/807/5
Page 64
Question 146
WT/ACC/807/3 states that under the Law on Fo reign Trade Operations, certain goods may be
exported on the basis of "L" in accordance with international agreements, regulation of
importation of arms and military equipment, export of industrial and artistic works and of
certain precious metals. It also states that a licence is necessary for exportation of certainproducts such as commercial explosives, ammuniti on, arms, narcotic drugs, artistic works, and
other products in conformity with internationa l conventions. Finally, it states that for the
exportation of certain agricultural products and foodstuff, seed materials and other product, it
is necessary to obtain approval permission of the competent bodies. This results from the need
to make up temporary shortage of food, the need  to protect the environment and to facilitate
development of strategic industries.
What criteria are applied to decide whether or  not an applicant gets the licence to export?
Answer:
Please refer to Annex 3.
Question 147
Can Macedonia indicate how it intends to justify use of export quotas under WTO provisions
"to facilitate development of strategic industries"?
Answer:
Quantitative export restrictions were abolished as from December 31, 1996. However, for
exports of certain agricultural products and foodstuf f, seed materials and other products, an approval
or permission by a competent body is required.
Please refer to Question 140.
Question 148
Does Macedonia have any other legal authority to  apply quantitative restrictions or prohibitions
on exports?
Answer:
Please refer to Question 140.
(e) Other measures
Question 149
In addition to the restrictions observed in ex ports to EU, does Macedonia apply or enforce other
quantitative export restrictions? If so, what products are involved and for what reason are the
restrictions applied?
Answer:
In addition to the restrictions applied in exports to EU, the Republic of Macedonia applied
quantitative export restrictions under the Bilateral Agreement with the USA on Textile Products untilWT/ACC/807/5
Page 65
the end of 1999 when the Agreement expired. The Republic of Macedonia has recently started
negotiations on the conditions for a new Agreement on Textile Products with the USA.
Other quantitative export restrictions can be applied under Articles XX and XXI of the GATT
1994. Please refer to Questions 140 and 141.
(i) Import duty drawback schemes
Question 150
Does the Republic of Macedonia have in place a verification system or procedure to ensure that
the quantity of inputs for which drawback is claimed does not exceed the quantity of similar
products exported and that there is no drawback  of import charges in excess of those originally
levied on the imported inputs in question?
Answer:
Import duty drawback is strictly applied.  The drawback system is centralized and is
administered by regional Customs houses which have a special unit which deals exclusively with
drawbacks.  This unit takes special care that the value of the import duty on inputs does not exceed
the value rebated upon export of the finished product.  Drawback is directly connected with the import
declaration.  The exporter must present all export and import declarations and documentation
concerning the value of inputs.  After this, an inspection at the producer’s premises by a drawbackunit verifies the production and value of the imported inputs in the finished products and issues an
administrative decision. Drawback can be claimed only once for one import declaration.
Question 151
Please confirm that the value of the import duty on inputs rebated upon export of the finished
product is only that applied to goods physically incorporated in the export.
Answer:
Please refer to Question 150.
3. Internal Policies, Affecting Foreign Trade in Goods
(b) Technical regulations and standards
Question 152Would the Republic of Macedonia advise its time table and detailed work plan to implement the
obligations of the WTO - TBT Agreement?
Answer:
The Republic of Macedonia plans to join the TBT Agreement from the date of accession. For
the implementation of the Agreement, however, technical assistance will be required, namely  training
of experts and equipment.WT/ACC/807/5
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Question 153
Does the Republic of Macedonia envisage any problems in meeting these requirements and if so
in what respects?
Answer:
Please refer to Question 152.
Question 154
The current situation in which Macedonia ha s established the Enquiry Point required under
Article X of the TBT Agreement should be informed.
Answer:
The Republic of Macedonia has no enquiry point as required by Article 10 of the TBT
Agreement. The information related to TBT is provided to  the interested parties by the Bureau for
Standardization and Metrology.
An enquiry point as required in Article 10 of the TBT Agreement will be established prior to
the accession.
Question 155
The Republic of Macedonia will have to accede to the TBT Agreement from the first day of
accession to the WTO. What practical steps is the Republic of Macedonia taking or planing to
take to prepare for the acce ssion to the TBT Agreement.
Answer:
Please refer to Question 152.
Question 156
Please provide an overview of regulations rel ating to different products / products areas.
Answer:
Please refer to Question 168.
Question 157
Are the standards used by  the Republic of Ma cedonia voluntary or mandatory? If they are
mandatory, please state the rational behind this.
Answer:
The Republic of Macedonia applies 12,000 standards inherited from the former SFRJ - 9,000
mandatory and 3,000 voluntary.  Most of these conform or are equivalent to the international ISO and
IEC standards. It is the intention of the Republic of Macedonia to make all the standards voluntary
under the new Law on Standardization which is expected to be adopted by the end of 2000.WT/ACC/807/5
Page 67
Question 158
Does  the Republic of Macedonia intend to move away gradually  from the use of national
standards to the use of international standards? If so, what is the time table and the priorities
for this change over?
Answer:
According to the Law on Standardization, the basis for application of Macedonian standards
are the International Standards. The Republic of Macedonia has no time table for modifications on
national standards to the international standard s. The adjustments are made whenever needed.
Question 159
Please provide more in-depth information on the procedures and requirements connected with
the mandatory and the voluntary system of certi fication. For example: does the certification
system contain the possibility of using a manufacturers’ declaration? Does   the Republic ofMacedonia use pre-market certification in any product areas?
Answer:
According to Article 17 of the Law on Standardization, a company or another legal entity is
obliged, in the process of their work, to determine if the product corresponds to the conditions and
requirements set out in the technical regulati ons. This compliance is required by the Law on
Standardization and requires the notification procedure.
 The submission of evidence that the imported products correspond to the terms and
requirements set out in the mandatory standards provided by the laws, is an obligation of the importer
or the representative of the foreign company in the sale from the consignment warehouse.
The supervision of the conformity of standards with the provisions of the Law and bylaws
based on this Law is carried out by inspection offices. These include market, technical, construction,
labour and agriculture inspections.
According to the Law on Measure Units and Measures (“Official Gazette of the Republic of
Macedonia” No. 23/95) in case there is a mandatory examination of the type of measuring instruments
to be used in the Republic of Macedonia, they should correspond to the metrology requirements andbe in compliance with applicable legal provisions.
To certify compliance, the report for examination of the products, the statement for
homologation and any other document concerning the adequacy and the quality of the products issued
in third countries, are recognized in the Republic of Macedonia. According to Article 58 of the Law
on Standardization, this recognition takes place in  the following situations  and under the following
terms:
1. If there is an international agreement, signed by the Republic of Macedonia, and
according to which there is an obligation fo r the mutual recognition by contracting
parties under the terms of that agreement;
2. If the documents are issued in the area of international systems for certification,
recognition of the results of the examination or other international systems for
securing quality in compliance with the rules of the international systems and if theBureau for Standardization and Metrolo gy (BSM) is a member of those systems;WT/ACC/807/5
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3. If the documents referred to in Paragraph  1 of this Article are issued by an
organization that performs this activity abroad.
The recognition of documents referred to in Article 58 Paragraph 1 of the Law on
Standardization and Article 57 of the Law on Measure Units and Measures is carried out by the BSM.
The BSM checks the data in the documentation or examines one or more characteristics of the
product.
Question 160
Does  the Republic of Macedonia accept as equivalent certificates from third country
certification bodies?
Answer:
The Republic of Macedonia can accept equivalent certificates from third country certification
bodies if the country is a member of a relevant international organization.
Question 161
Has  the Republic of Macedonia developed a quality assurance system?
Answer:
According to the existing Law on Standardization, the Bureau for Standardization and
Metrology is the only authorized institution for matters connected with accreditation.
Upon the adoption of the Law on Accreditation an accreditation body will be established
under the set of standards EN45000. This body will become a member of a relevant international
institution upon fulfilment of all necessary requirements.
The accreditation system, including the quality assurance system is being developed. This
system will consist of a network of metrology and testing laboratories, certification bodies forproducts and quality systems.
It is the intention of the Government of the Republic of Macedonia to intensify the activities
for building a suitable network that will function in compliance with international rules.
Question 162
Please provide further information on the quality  assurance system, or on any plans to develop
such a system.
Answer:
Please refer to Question 161.
Question 163
Please provide further information on the Re public of Macedonia’s accreditation system.WT/ACC/807/5
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Answer:
Please refer to Question 161.
Question 164
Could the Republic of Macedonia provide us more information on the harmonization process
towards international standards? Is Macedonia  member of an European or international
accreditation office? Is there an official inquiry point as stipulated by article 10 of the TBT
Agreement?
Answer:
Please refer to Questions 154,158, 161 and Annex 5.
Question 165
Please provide more detailed information on th e operation of Macedonia's technical regulation
and standards system for agricultural products; in particular, the requirements for importedand domestic products.
Answer:
A list of regulations on quality of agricultural and food products is attached (Attachment 3).
Question 166
Please complete the questionnaire in Annex 5 of WT/ACC/1 on Technical Barriers to Trade and
submit it to the Working Party for review prior to the first Working Party meeting.
Answer:
Annex 5 on technical barriers to trade will be submitted.
Question 167
Please complete the implementation checklist fo r the TBT Agreement, and submit it to the WP
to review prior to the first WP meeting.
Answer:
The Memorandum on Compliance with the WTO TBT Agreement  is submitted to the WTO
Secretariat.
Question 168
Please provide the WP with all relevant legislation and regulations dealing with the application
of standards to imports, certification requirements, the transparency requirements of the WTO,
and provisions for appeal prior to the first WP meeting.WT/ACC/807/5
Page 70
Answer:
The standardization system is regulated by the Law of Standardization (Official Gazette No.
23/95), Law on Measure Units and Measures (Official Gazette No. 23/95) and Law on Control of
Goods Made Out Of Precious Metals (Official Gazette No. 23/95).
In accordance with Article 93 of the existing Law of Standardization, all regulations, bylaws
and standards which were prepared and implemented under the previous Law of Standardization
(Official Gazette No. 37/88, 23/91 and 55/91), will remain in effect until new regulations, bylaws and
standards are adopted. The process of preparations of new regulations is underway.
The following regulations and bylaws were inherited from the former SFRY:
− Regulations of technical rules (94 total)
− Regulations for quality (46 total)
− Regulations for specification in production (4 total)
− Regulations for declaration, marking, pointing and prepackaging of products (6
total)
− Regulations for documents submitted with products released on the market, such as
manuals, instructions, guarantees, addresses of services. (14 total)
− Regulations for closer contents of the technical directory - manual (2 total)
− Regulations for obligatory attest. (52 total)
− Regulations which are a comprehensive part of the Agreement for accepting of
equivalent conditions for homologation a nd mutual recognizing of homologation of
the equipment and motor vehicle parts (49 total)
− Rules on different categories of measuring instruments (500 total).
The authorized body which covers all activities in relation with the development of industrial
and other standards in the Republic of Macedonia is the Bureau for Standardization and Metrology(BSM). Since January 1, 1995 the BSM is a member of the International Standardization Organization
(ISO). BSM is also a member of the Internati onal Organization of Legal Metrology (OIML) since
1994.
The Ministry of Economy is in the process of preparing four new laws, namely: the Law on
Standardization, the Law on Metrology, the Law on Accreditation and the Law on ConformityAssessment for the Products. The preparation is in its initial stage.
(c) Sanitary and phytosanitary measures
Question 169
Would the Republic of Macedonia advise what plans it has to introduce the changes that would
be required to meet its obligations under the WTO SPS Agreement, and the time table for
these?
Answer:
The WTO SPS Agreement falls under the competence of the Ministry of Health (human
health and sanitary measures) and the Ministry of Agriculture (veterinary and phytosanitary
measures).
Although the Republic of Macedonia already applies SPS measures which correspond to
some extent to the measures included in the SPS Agreement it has to undertake several activities to beWT/ACC/807/5
Page 71
fully compatible with the Agreement. They in clude: the examination and harmonization of the
national legislation with Codex Alimentarius standards, guidelines and recommendations related to
food additives, veterinary drugs and pesticide residues, contaminants, methods of  analysis and
sampling, and codes and  guidelines of hygienic practice.
The above mentioned will enable the Republic of Macedonia:-    to accept the principle of equivalence;
- to perform control, inspection and approval procedures consistent with the WTO
rules;
- to take into account  risk assessment  techniques developed by relevant  international
organizations.
The Veterinary Division at the Ministry of Agriculture is examining the Macedonian existing
legislation and its compatibility with the WTO SPS Agreement. Macedonia intends to amend theexisting legislation to comply to the WTO SPS Agreement in the area of veterinary measures.
The adoption of a new legislation on plant protection that will include the IPPC
recommendations (including Annex 2  to the Revise d text approved by FAO at its 29th Conference
held in November 1997) is in process. The Republic of Macedonia is considering signing of the
convention and meeting the obligations pursuant to the WTO SPS Agreement in the area ofphytosanitary measures.
Question 170
Does the Republic of Macedonia envisage any problems in meeting these requirements and if so,
in what respect?
Answer:
The Republic of Macedonia does not envisage problems in meeting these requirements, but is
aware that this is a complex and  long-lasting process and that  technical assistance will be required.
Question 171
Exhaustive lists indicating that Macedonia will, in the near future, become a contracting party
to the international conventions on the sanitary protection of  animals should be informed.
Answer:
The Republic of Macedonia is a member of the European Convention on Protection of
Animals Bred on Farms and European Convention on Protection of Animals to be Slaughtered. The
Republic of Macedonia became a party to these Conventions since 30 March 1994 by means of
succession of the former Yugoslavia. They  were implemented since 1 October 1994.
At present, a Regulation on Animal Welfare is under preparation. It will contribute in the
process of harmonization of the Macedonian legislation with the EU legislation and the WTO rules. Inaddition, this Regulation will satisfy one of the main conditions for conformity with the international
conventions on sanitary protection of animals.
In the near future the Republic of Macedonia intends to become a member to the Convention
of Pets, the Convention on Protection of Animals During Transportation and the Convention on the
Protection of Animals Used for Experiments.WT/ACC/807/5
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Question 172
The current situation in which Macedonia ha s established the Enquiry Point required by
Annex B of the SPS Agreement should be informed.
Answer:
At present, the Republic of Macedonia has no special Enquiry Points as foreseen in Annex B
of the SPS Agreement. The Ministry of Health provides information related to sanitary measures for
food and beverages. The Ministry of Agriculture provides information in the area of protection of
plants and plant products and in the area of veterinary protection.
An enquiry point as required in Annex B of the SPS Agreement will be established prior to
the accession.
Question 173
Please confirm your intention to join the SPS Agreement and a timetable for its implementation.
Does the Republic of Macedonia anticipate any difficulties in applying the SPS Agreement?
Answer:
The Republic of Macedonia has an intention to join the SPS Agreement. For the acceleration
of this process, however, technical assistance will be required with regard to development of human
capacities in the process of incorporation of the Codex Alimentarius standards into the nationallegislation, as well as (human, equipment, facilities) for the implementation of the changed legislation
in practice.
Question 174
To what extent have sanitary and phytosanitary measures been harmonized with international
standards (OIE, Codex, IPPC)?
Answer:
The Republic of Macedonia is a member of the Codex Alimentarius Commission. At present,
an expert group within the Ministry of Health is studying the Codex standards in order to adjust the
national legislation.
The Republic of Macedonia has been a member of the International Office of Epizootics
(OIE) since 1993. The Republic of Macedonia also signed bilateral agreements for cooperation in the
field of veterinary practice with a certain number of countries, based upon standards issued by OIE
and EU. The Veterinary Department of the Minist ry of Agriculture is a member of the Regional
Committee (for Balkan countries) for eradication of epidemic diseases indicated in the OIE list A with
a special emphasis on Foot and Mouth Disease. The Committee should establish a disease eradication
plan in compliance with the recommendations of the OIE and standards prescribed by the EU.
The Republic of Macedonia adopted the Law on Protection of Plants in June 1998 (Official
Gazette 25/98). The Law represents the legal framework for further preparation of regulations on
phytosanitary measures compatible with the IPPC requirements and is a main condition for
Macedonia’s request for membership. During this process, the Republic of Macedonia will need
technical assistance.WT/ACC/807/5
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Question 175
How are SPS measures applied to imported products? Do these measures differ for
domestically-produced products?
Answer:
The same sanitary and phytosanitary measures are applied to both imported and domestically
produced products.
1. The procedure for sanitary measures include the following:
Inspection at the border: import inspection is performed by a border sanitary inspection upon
request of the importer.  During this inspection, inspectors:
− check documentation of products which include a market authorization  from the
country of origin, and packaging and labeling related to food safety;
− perform organoleptic examination on the site;
− take samples for testing and control that are performed by authorized laboratories.
Laboratory control examines presence of additives, contaminants, toxins or disease-causing organisms in foods and beverages. Methods of analysis and sampling are
prescribed by national regulations;
− National regulations also apply to hygienic practices;
− Risk assessment methods are not prescribed by law.
2. Veterinary measures:
Imports of live animals, animal products, raw materials and offal from slaughtered animals,
are regulated by the Law on Veterinary Practice  (Official Gazette 28/98), and regulations
prepared in the period of former SFRJ. The preparation of new regulations based on theMacedonian Law for Veterinary Practice will be completed in the course of year 2000.
In compliance with the Law for Veterinary Pr actice, for imports of live animals, animal
products, raw materials and offal from slaughtered animals, the Minister is ensuring that there
are no veterinary-sanitary preconditions which are an obstacle for importation. The same
regulations and standards are valid for domestic products.
A veterinary approval for importation is base d on the Animal Health Code (OIE) and the
Codex Alimentarius.
The Codex Alimentarius, which relates to food safety (residues of veterinary drugs,
pesticides, contamination, analyzing methods, food hygiene) is implemented by the veterinary
inspection, market and sanitary inspection.
Certificates for exports of live animals, products, raw materials and offal from slaughtered
animals are based on the certificates of compliance from the EU countries. Only goods
accompanied with certificates consistent with those announced in the Official Gazette of the
EU are accepted. Certificates for products imported from non EU countries are subject to
bilateral agreements and conventions that provide in detail the information to be contained inWT/ACC/807/5
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such certificates. However, in the latter case, EU certificates are taken as a basis
notwithstanding the existence of bilateral agreements.
3. Phytosanitary measures
Imports of agricultural and forest plants and products thereof to the country are performed
only through border posts which are determined by the Government of the Republic ofMacedonia (Decision for determining border posts where import, export and transit of plants,
plant products and chemicals for plant protecti on will be performed - Official Gazette 49/98
and Decision for extension of the decision for determining border posts where import, export
and transit of plants, plant products and chemicals for plant protection will be performed -
Official Gazette 1/99 and 52/99).
Inspection control of imports is carried out by authorized experts by visual methods control
and  control of a phytosanitary certificate with additional documents (depending on the typeand origin of the product). If an expert considers it necessary, samples are taken to determine
if there is a presence of quarantine pests, e.g. to determine a hidden new epidemic.
For the purpose of determining the presence of pests which could be killed directly in the
shipment, the authorized inspector orders protective measures, desinsection or desinfection, at
the expense of the exporter/importer.
In the case of imports that contain  quarantine pest listed in list A - Quarantine pests and
diseases which are not present on the territory of Republic of Macedonia - (Official Gazette
9/96),  plants or products will be returned or destroyed in agreement with the importer in the
Republic of Macedonia. The procedure is regulated by the Law for Plant Protection (“Official
Gazette of RM” no 25/98). It contains a framework for regulative preparation and adoption ofmethods for inspection, certification, declaration, exchange of information about the situation
with plant pests and methods for destroying deliveries contaminated with  quarantine disease.
The Law is based on the implementation of the International Convention for Plant Protection
and International Phytosanitary Standards.
Plants and plant products are under phytosanitary control during the vegetation period,
production, harvesting and in the market according to the phytosanitary measures published
as a guideline for supervision and according to the conditions which are provided for in the
country.
 For seedlings in facilities for planting, it is obligatory to have two phytosanitary examinations
during the vegetation period: 1) by institutions authorized by the Minister for Agriculture,
Forestry and Water Economy, and 2) by laboratory testing to confirm that seeds or planting
materials do not contain pests.
Plants and plant products which are exported are subject to health control. A phytosanitary
certificate based on monitoring from a separate inspection at the loading point, by authorized
experts from the Government is issued prior to shipment of goods for export.
A model form from Annex I of the International Convention for Plant Protection is used to
prepare the phytosanitary certificate for exportation and re-exportation.
The phytosanitary measures controlling pests in agricultural and forest plants and on plant
products, are prepared according to the international standards for phytosanitary measures.WT/ACC/807/5
Page 75
This includes:
− Pests monitoring;
− Pests eradication
− Determining the presence of pests in certain regions;
− The destruction of plants and products;
− Establishing a production facility free of pests presence;
− A system for export certification;
− An inspection method; and
− An International Convention for Plant Protection together with Annexes and its
changes and additions.
In the process of preparing and adopting the annexes, regulations, directives and guidelines,
the Republic of Macedonia is incorporating the international phytosanitary standards in the legal
regulations.
Phytosanitary measures for imported plants and plant products are applied according to the
conditions contained in the International Convention for Protection of Plants and bilateral agreements
or the conditions determined by the Republic of Macedonia in certain cases when there is an
indication for presence of quarantine pests.
A phytosanitary certificate confirming that the plants or products have no quarantine pest and
that they originate from a region free of quarantine pests is obligatory.
Question 176
Please complete the questionnaire in Annex 5 of WT/ACC/l for measures covered by the WTO
Agreement on Sanitary and Phytosanitary Measures and submit it to the WP for review prior to
the first WP meeting.
Answer:
Annex 5 to WT/ACC/1 on measures covered by the WTO Agreement on SPS will be
submitted to the Working Party.
Question 177
Please complete the implementation checklist for the SPS Agreement, and submit it to the WP
for review for review prior to the first WP meeting.
Answer:
The Memorandum of Compliance with the SPS Agreement is submitted to the Working
Party.
Question 178
Please provide the WP with all relevant legislation and regulations dealing with the application
of sanitary and phytosanitary and certificati on requirements to imports, the transparency
requirements of the WTO, and provisions for appeal prior to the first WP meeting.WT/ACC/807/5
Page 76
Answer:
The Law on the Health Safety of Foodstuffs and Products for Common Use (Official Gazette
of SFRJ 53/91, Official Gazette of RM  15/95) – see also Attachment 4.
The Law on Health Control of Foodstuffs and Products for Common Use (Official Gazette
29/73, 37/86, 15/95) and pertinent regulations. (The list of regulations on food safety is attached to theMemorandum of Compliance with the WTO SPS Agreement).
The Law on Veterinary Health (Official Gazette 28/98).
The Law on Plant Protection (Official Gazette 25/98).
The laws listed above will be available for examination by the Working Party members as
part of Annex 2.
For appeal please refer to Question 54.
(d) Trade-related investment measures
Question 179
Has Macedonia established an organ or branch, which provides the relevant information on
trade and investment, and addition to that in the  TBT and SPS Agreement?
Answer:
The Investment Promotion Division is operati ng under the Ministry of Development.  It
coordinates all activities related to foreign direct investments, including investment promotion,
development of industrial policy and establis hment of a one-stop-shop system (A place where
potential investors can obtain all relevant information for the investment process, e.g. registration
requirements, incentives, etc.).
The Investment Promotion Division can provide to potential investors any information and
services in the area of practical and legal potentials for investment in the Republic of Macedonia.
Responsibilities and duties of the Investment Promotion Division are the following:
− To study the investments in different sectors of the economy and to prepare
comparative analysis on investments in the country and abroad;
− To develop an efficient long-term strategy and policy for investing in the country;
− To identify potentials for investments and promotion of investment projects in
cooperation with ministries, companies and foreign investors;
− To identify potential foreign investors, and establish permanent contacts with them;
− To provide services to potential foreig n investors regarding information on the
current legislation and infrastructure in the country;
− To propose changes in the current legislation;
− To enlarge the computer database by indicating business profiles of companies from
different sectors of the economy, including information on their production, market,management teams, as well as the cooperation with the current domestic and foreign
information nets;
− To organize seminars, conferences and other events to expand business relations,
attract foreign investments, and promote business partnership through organization ofWT/ACC/807/5
Page 77
round tables for foreign entrepreneurs, distribute promotion materials, direct
marketing, TV marketing and printed media.
In 1999, the Ministry of Development prepared a Program for Stimulating Investments with a
Special Emphasis on Attracting Foreign Investments. The Program identifies various restrictions and
obstacles in the economy, the legal system and the political environment which hamper investments ingeneral, and the inflow of foreign direct investme nt in particular. It also gives recommendations and
directions how to remedy the situation and adjust the legal framework to international standards.
The Program will be available for examination by Working Party as part of Annex 2.
Question 180
Please confirm that Macedonia applies no export performance requirements or other measures
inconsistent with the TRIMS Agreement.
Answer:
The Republic of Macedonia does not maintain any measures contrary to the provisions of the
TRIMS Agreement.
Question 181
If such measures exist, please describe them.
Answer:
Please refer to Question 180.
(i) Definition of foreign investors and foreign investment
Question 182
Does  the Republic of Macedonia intend to notify any measures under the TRIMS Agreement?
Answer:
Please refer to Question 180.
Question 183
Please confirm that the Republic of Macedonia maintains no measures inconsistent with the
TRIMS Agreement, other than those li sted in the previous response.
Answer:
Please refer to Question 180.
(ii) Rights of foreign investors
Question 184
Are there certain areas or sectors in which foreign investment, either by a new establishment or
by a participation in existing undertakings, is forbidden or limited?WT/ACC/807/5
Page 78
Answer:
In general, there are no limitations on foreign investment in the Republic of Macedonia,
except in the areas of the military industry, circ ulation and trade of arms, circulation and trade of
narcotics, protection of historical monuments and cultural wealth. The limitations on the participation
of foreign capital in the ongoing business ventures and new companies are regulated by the lex
specialis  for each individual field.
According to Article 10 of the Law on Broadcasting, a foreign natural person or legal entity
may participate in the capital of a broadcasting company up to 25 per cent. The share of more than
one foreign shareholder may not be higher than 49 per cent.
The information on foreign participation in insurance companies is provided in question 268.
The information on foreign participation in banks is provided in question 265.
Question 185
Please confirm that domestic legislation gran ts National Treatment, and is therefore non
discriminatory, vis a vis domestic investors and their investment and to foreign investors and
their investments.
Answer:
The legal grounds for the national treatment of foreign investors are provided in the Law on
Trade Companies (published in Official Gazette no.28/96, 7/97, 21/98, 37/98, 63/98). This Law
differentiates two possibilities for the in volvement of foreign investors in Macedonia:
1. When foreign legal entities or natural persons establish a company under the Macedonian
laws or acquire stocks and shares in an already existing Macedonian company.
According to Article 26 of the Law on Trade Companies:(a) Any foreign natural person or a legal entity may be an interest holder or a
stockholder.
(b) A foreign natural person or a legal entity may incorporate a company or acquire stock
in the same manner and under the same conditions as citizens of the Republic of
Macedonia and legal entities entered in the Trade registry in the Republic ofMacedonia, unless otherwise stated by law.
(c) A share of a foreign investor in a newly incorporated or an existing company shall be
unlimited, unless otherwise stated by another law.
(d) A company having foreign shareholders shall have rights and liabilities equal to that
of a company without foreign shareholders, except when stated by law.
 2. When foreign companies or sole proprietors operate in the Republic of Macedonia through a
branch office.
According to Article 684 of the Law on Trade Companies:
In their operations on the territory of the Republic of Macedonia, foreign trade companies and
foreign sole proprietors shall comply with the law and shall have a status equal with domestic
persons and legal entities, unless otherwise determined by a government agreement or by a
law.WT/ACC/807/5
Page 79
Please refer also to Question 184.
Question 186
Is there any domestic legal protection for foreign investors in case of expropriation?
Answer:
The Constitution of the Republic of Macedonia adopted in 1991 prohibits expropriation of
property, except in time of war, certain unpredictable  situations or for the purpose of public interest -
which in this case should be executed in a manner as provided by law. The Law on Expropriation
(Official Gazette 33/95, 20/98 and 40/99) provides for reasons and procedures for expropriation in
Macedonia, as well as the manner in which compensation is assessed and settled. Foreign investors
are entitled to equal legal protection and compensation.
The Republic of Macedonia has bilateral agreements on protection on investments which
have provisions on expropriation of investments in  both countries. A list of these agreements is
attached (Attachment 5).
(iv) Foreign investment incentives
Question 187
Please detail government initiatives in foreign investment incentives.
Answer:
Government initiatives for foreign investments include the following:
− Capital equipment of foreign investors is exempt from customs duties;
− Profits generated by foreign capital are not taxed during the first three years;
− No taxes are applied on profits that are reinvested in fixed operational assets;
− No taxes are applied on profits that are invested in protection of the environment and
nature.
Please refer also to Question 179.
(e)       State-trading practices
Question 188Can the Republic of Macedonia provide more detailed information on intervention in the
market by the Directorate for Stocks Reserv es, including legislation and regulations under
which it operates and details of its activities?
Answer:
The strategic reserves of the Republic of Macedonia are governed by the Law on Stock
Reserves adopted in 1987 (Official Gazette 47/87) and amended in 1993 (Official Gazette 13/93).
According to the working program of the Government of the Republic of Macedonia, a preparation of
a draft Law on Stock Reserves is underway and it is expected to be completed by the end of March
2000.WT/ACC/807/5
Page 80
Strategic reserves are created to provide a supply of primary food and non-food products vital
to the life and health of the population. The products also include certain raw materials essential to the
domestic production or products of a special interest for the defense of the country. The stocks are
used in times of significant disorder and instability of the market, natural and other disasters and in a
war situation.
The interventions with strategic reserves in the market are carried out with the following
measures: buying and selling goods from the stock reserves, lending goods, importing goods and
purchase of certain agricultural products with the prescribed protective prices when the domestic
market prices fall on or below the level of protective prices. In the Macroeconomic Policy for year
2000 protective prices are anticipated for the wheat (HS 1001 90 00 50) and the small leafed oriental
tobacco (HS 2401).
Please refer to Annex 6.
Question 189
Can the Republic of Macedonia advise how such st abilization activities impact imports and the
ability of enterprises to import based solely on commercial considerations?
Please refer to Question 188.
Question 190
Does the Directorate in effect establish and impose import quotas depending on market supply
conditions?
Answer:
The Directorate for Stock Reserves is not competent to determine import quotas. The import
quotas are determined by the Government of the Republic of Macedonia upon proposal from theMinistry of Finance and the Ministry of Trade.
Question 191
Does the Directorate for Stock Reserves sell or cause to be sold the surplus it accumulates in
overseas markets? If a surplus is sold domestical ly or internationally by a private enterprise,
how is the price and volume determine? How does such activities not constitute a special rightand privilege under Article XVII of GATT 1994?
Answer:
If the Directorate for Stock Reserves has a surplus of products that should be sold or the
existing stock reserves should be replaced with new products, the Government of the Republic of
Macedonia makes a decision upon proposal of the Directorate and sets the initial minimum price. The
minimum price is determined to cover only expenses of the Directorate and not to accumulate profit.
Products are offered on the market through a public  tender. Products from stock reserves are not
exported, but sold at the domestic market (the foreign tender on tobacco was an exception because of
large quantities of tobacco that were bought out from producers).
Please refer to Question 214.WT/ACC/807/5
Page 81
Question 192
Does the Republic of Macedonia have plans to change these arrangements?
Answer:
At present, the Republic of Macedonia maintains these arrangements. The Directorate is
notified as a state trading enterprise in Annex 6 in accordance with the WTO notificationrequirements.
Please refer to Question 191.
Question 193
Macedonia indicates in WT/ACC/807/2, section IV:3(e) that the Directorate for Stocks and
Reserves in the Ministry of Economy operates und er the Law on Safety Stocks (Official Gazette
No.41/87, 19/93) to stabilize supplies of the following food and industrial products: wheat, sugar,
cooking oil, salt, medicines and petroleum derivatives.
Article 20 authorizes the Directorate to purchase su rplus products “subject to protective prices”
and to buy or sell goods from the safety stock cre ated in order to prevent market instability or
significant increases above the level of fixed prices for the current year. WT/ACC/807/2 states
that, “Protective prices for wheat, sun/flower, sugar beat, lamb and veal, as well as for small-
leafed oriental tobacco are being prescribed but for at most 15.000 tons of agreed quantities”.
Please submit a copy of the Law on Safety Stocks to the Secretariat for The Working Party`s
review.
Answer:
The Law on Stock Reserves will be available for examination by the Working Party members
as part of Annex 2.
Question 194
Please define “protective-prices” - are these su pport prices for local agricultural products? Is
there, as is indicated in 807/2, a limit to the amount  of local output that will be purchased by the
Government at “protective prices?”
Answer:
The quantities of products that have to be bought out by the Directorate for Stock Reserves
under protective prices are determined by the Go vernment with the decision for buyout of the
products.
For protective prices please refer to Question 214.
Question 195
Are the “fixed prices” being defended consumer prices or prices to the domestic supplier?WT/ACC/807/5
Page 82
Answer:
The term “fixed prices” understands prices of products which under the Decision on the
Highest Prices of Certain Products and Servi ces are or may be subject to price control.
Please refer to Question 9.
Question 196
Please elaborate here or in the section on Agricultural supports on the process by which goods
are made subject to “protective prices”, including details on how prices are set and on the
governing entities, laws, and regulations.
Answer:
Please refer to Question 214.
Question 197
Please list by HS96 number and description all the foods subject to “protective prices” and
government purchasing. Are any of the foods subj ect to “protective prices” also subject to
import licensing or other import restrictions?
Please refer to Question 214.
Question 198
Are domestic or foreign-owned firms free to impo rt goods subject to “protective prices” without
appointment by the Directorate for Stocks and Reserves and without reference to the prices
offered by the Directorate for domestic output?
Answer:
As indicated in question 188, the Macroeconomic Policy for 2000 anticipates protective
prices for wheat and small leafed oriental tobacco. The importation of wheat is subject to licenceissued by the Ministry of Trade, while the importation of tobacco is under liberal regime.
Question 199
Macedonia further states that, as regulated by  the Law on Safety Stocks, when there is a
shortage of goods of vital importance to the lif e and health the Government imports such goods
not through the Directorate for Stocks and Reserves directly, but through enterprises “registered for foreign trade ”selected by the Directorate conducted on the basis of a public
competition or announcement by collection of offe rs, thus enabling all enterprises to apply for
the competition. Macedonia states  that the enterprise that has offered most favorable conditions
is selected.
Please submit prior to the first WP meeting information on the Directorate for Stocks and
Reserves and any other agencies, enterprises or firms trading on behalf of the State in the
format on the questionnaire in Annex 6 of WT/ACC/l, without prejudice as to whether or notthey are, in Macedonia` s judgement, state trad ing entities within the meaning of Article XVII
of the GATT.WT/ACC/807/5
Page 83
Answer:
Annex 6 on state trading will be submitted to the WTO Secretariat.
Question 200
Are foreign owned firms eligible to compete for such import contracts on an equal basis with
domestically owned firms?
Answer:
According to Article 3 of the Law on Public Procurement foreign companies are eligible to
compete in public tenders under the same conditions as domestic companies.
(g) Free economic zones
Question 201
Please provide the WP with details of the exis ting or planned free zones and /or free economic
zones.
Answer:
At present, the Republic of Macedonia has not yet established a free economic zone. The first
one will be established in cooperation with investors from Taiwan in the Bunardzik area close to
Skopje. The Ministry of Development is in the process of completing the documentation and it plans
to start building the infrastructure in April 2000.
Question 202
Please confirm whether or not free zones and/or free economic zones will be fully subject to the
coverage of the Republic of Macedonia’s future commitments as a WTO member.
Answer:
When establishing free zones or free economic zones, the Republic of Macedonia will ensure
their compatibility with its obligations under the WTO.
Question 203
Please indicate whether or not goods produced or imported into these zones under the special
tax and tariff regimes envisaged for these zones a re subject to normal customs formalities, taxes
and tariffs when entering the rest of the Republic of Macedonia.
Answer:
Goods produced or imported into free economic zones shall be subject to normal customs
formalities, taxes and tariffs upon entering the rest of the Republic of Macedonia.
Question 204
Has Macedonia established either a free zone or a free economic one? If not, are there plans to
do so?WT/ACC/807/5
Page 84
Answer:
Please refer to Question 201.
Question 205
Please provide the text of any law or regulati on that authorizes the establishment of these
institutions and the requirements for participation and operation.
Answer:
The Law on Free Economic Zones was enacted by the Parliament of the Republic of
Macedonia and published in the Official Gazette of RM no. 56/99. The Law was drafted by a group of
experts from the ministries, the Chamber of Commerce, and domestic and foreign consultants. It
provides for equal treatment of the legal entities as founders, both domestic and foreign, as well as of
natural persons as consumers in free zones.
Article 3 of the Law on Free Economic Zones says that:The establishment of a free zone shall be subject to the fulfilment of the following condition:
1) that spatial, energy, technical and other requirements prescribed for conducting
activities in a free zone are satisfied;
2) that the percentage of goods and services exported from the free zone is not smaller
than the percentage determined by this Law (Article 25), except in cases of force
majeur;
3) that the employment is increased in the country as a result of activities in the free
zone;
4) that the production and technology process, goods manufactured and stored, and
services performed do not endanger the environment and the nature;
5) that the required start-up capital is provided by the founder of the free zone.
The founder of the free zone shall adopt a Foundation Act. The founder and users of the free
zone shall employ Macedonian citizens and procure goods and services from Macedonian suppliers
and sub-suppliers, whenever commercially justified.
Article 29 of the Free Economic Zones provides that:In the free zone goods intended for export are manufactured, and services, such as foreign
trade exchange, banking and other financial activities, property, individual insurance and reinsurance
activities and other commercial activities are performed. Textile industry activities are exempted.
User of a free zone conducting manufacturing or refinement of goods may, based on a
contract, entrust such activities to legal entities or natural persons (sub-contractors) with head offices
inside or outside the free zone. The user of the free zone are liable to pay the sales tax on goods and
services.
The activities from paragraph 1 of this Article may be conducted provided that:
1) business ventures are based on new investments and modern technologies;
2) origin and quality of raw materials, semi-finished products and finished products are
ascertainable and controllable;
3) operations do not endanger public security and health of people in the free zones;WT/ACC/807/5
Page 85
4) users of a free zone insure capital assets and employees against any risk arising from
their operation.
For more detailed examination by Working Party members, the English translation of the Law
on Free Economic Zones will be available as part of Annex 2.
(j) Government-mandated counter-trade and barter
Question 206
WT/ACC/807/3 indicates the Ministry of Economy issues approvals for barter trade.
Can the Republic of Macedonia provide details of  extent to which barter trade is engaged, the
products and entities concerned, the volumes of this trade, and the conditions under which such
trade take place?
Answer:
Legal provisions for barter trade are provided in Article 18 of the Law on Foreign Trade.
More specific conditions and terms are contained in the Decision on the Conditions, Manner and
Time Limits for Barters. Since November 1998 it is the newly established Ministry of Trade and not
the Ministry of Economy that issues approvals for barter. The approvals are issued solely for
administrative and statistical purpose.
Statistical data of the Customs Administration of the Republic of Macedonia indicate that in
1999 the value of barter imports was $54,666,172 and the value barter exports was $53,100,194 which
represents 3.14 per cent and 4.40 per cent of the total imports and exports, respectively.
In 1999, barter deals were made with 322 companies from 31 countries. The major barter
partner of the Republic of Macedonia was FR Yugoslavia with a share of 53.51 per cent in the total
barter imports and 53.16 per cent in the total barter exports, followed by Croatia with 10.15 per centand 8.38 per cent, and Slovenia with 7.17 per cent and 6.11 per cent, respectively. Other countries
having a significant share in barter deals were Greece, Italy, Albania, the Russian Federation and
Egypt.
Concerning the composition of products, the biggest share of bartered imports were raw
materials, while barter exports included mostly tobacco, spare parts and equipment for motor vehicles,cigarettes, transformers, mineral and chemical fertilizers, washing and cleaning detergents, and
artificial and synthetic fibers.
The Law on Foreign Trade and the Decision on th e Conditions, Manner and Time Limits for
Barters will be available for consideration by the Working Party Members as part of Annex 2.
Question 207
Please detail the policies and methods of government mandated trade and barter. How is such a
policy implemented and accounted for in national accounts?
Answer:
The Republic of Macedonia does not have mandated counter-trade and barter agreements
with other countries. However, export and im port companies may engage in barter trade.WT/ACC/807/5
Page 86
Please refer to Question 206.
Question 208
Have the changes in the Law on Foreign Tr ade Operations affected the description of
Government involvement in counter-trade and barter trade deals provided in WT/ACC/807/2?
Answer:
The Government involvement in counter-trade and barter deals has not been changed since
the period of preparation and submission of WT/ACC/807/2.
Question 209
Please confirm that while the Government Macedonia may support counter-trade and barter
trade agreements between firms, that such a rrangements are not mandated or required under
law.
Answer:
Please refer to Question 206.
Question 210
Please indicate if imports and exports under these arrangements are subject to the same tariffs,
fees, taxes, licensing and certification requirements, and other measures applied to normal
trade.
Answer:
Imports and exports under barter-trade arrangements are subject to the same tariffs, fees,
taxes, licensing and certification requirements, and other measures applied to normal trade.
 (l) Government procurement practices
Question 211Does the Republic of Macedonia intend to join the Agreement on Government Procurement as
part of its accession to the WTO?
Answer:
At present, the Republic of Macedonia does not intend to join the Agreement on Government
Procurement as part of its accession to the WTO. However, the Government of the Republic ofMacedonia will examine eventual observer status /accession to the Agreement at a later stage.
Question 212
Macedonia states in WT/ACC/807/3 that its “Law on Public Procurements” was adopted on 4
June 1998.
Please provide a copy of this Law for WP review.WT/ACC/807/5
Page 87
Answer:
The Law on Public Procurement will be available for examination by the Working Party
members as part of Annex 2.
4. Policies Affecting Foreign Trade in Agricultural Products
Question 213When will the Republic of Macedonia be in  a position to submit th e information required in
WT/ACC/4 ?
Answer:
The WT/ACC/4 will be submitted to the WTO Secretariat prior to the first Working Party
meeting.
(a) Imports
Question 214Can the Republic of Macedonia advise the current level and volumes of agricultural products
affected by price controls and protective prices?
Answer:
The legal basis for determining protective prices is provided in Article 24 of the Law on
Trade. In general, prices of agricultural products are formed freely on the market. However, theGovernment provides for protective prices for certain agricultural products in order to guarantee to the
producers that it would buy out their production if the prices went below the level of the protective
price.
The products subject to protective prices are determined every year in the Macroeconomic
Policy. In 1999 wheat and small-leafed oriental tobacco were subject to protective prices. TheMacroeconomic Policy for 2000 anticipates protective prices for the same products.
For products with controlled prices, please refer to Question 9.
Question 215
Are producers compensated for the loss of in come caused by price control and protective
prices?
Answer:
The policy of maintaining protective prices has as an objective to compensate producers for
the loss of income in case of low world market prices.
Question 216
Can the Republic of Macedonia provide more information on the operation of their protective
prices for wheat, sunflower, sugar beet, lamb, veal and small leafed orient tobacco, including
how the protective prices are determined?WT/ACC/807/5
Page 88
Sunflower, sugar beet, lamb and veal are not subject to price control or protective prices. In
1999, as well as in the year 2000, protective prices are only applied on wheat and small-leafed oriental
tobacco. Please refer also to Question 214.
Question 217
Can the Republic of Macedonia provide information on the additional specific tariffs applied in
the agricultural sector, and explain why such sp ecific tariffs are required in addition to ad
valorem tariffs in place?
Answer:
Please refer to Question 71.
Question 218
The Republic of Macedonia indicates in WT/ ACC/807/3 ( Section IV.4.A) that quantitative
export and import restrictions have been abolished and all agricultural and food products areon a “LB” regime (i.e. imports are free of any restriction).
What are the sensitive goods that are exempted from these regime?
Please refer to Question 219.
Question 219
Can the Republic of Macedonia provide a comprehensive list of products that have restriction
on their importation or exportation?
Answer:
Lists of products subject to import and export licensing will be attached to Annex 3.
Question 220
For agricultural items, we expect that  the Republic of Macedonia will apply an ordinary
customs duty regime only (Article 4.2 of the Ag reement on Agriculture) and bind all tariff from
date of accession.
Please provide a product list of those items still subject to price control. Please ensure that this
list is updated from the 1995 included on your submission.
Answer:
The Republic of Macedonia has started the preparation of its offer of concessions on goods
and intends to submit it to the Working Party members after the first Working Party meeting.
Please refer to Question 9.
Question 221
Macedonia states in WT/ACC/807/2 that, for the purpose of safeguarding domestic production,
50 per cent of items subject to quotas in this document were agricultural and of a seasonal
character.WT/ACC/807/5
Page 89
Please explain what is meant by seasonal char acter. If quotas have been removed on these
agricultural and seasonal products, have other import regulatory measures replaced the
quotas?
Answer:
Please refer to Question 71.
Question 222
We were pleased to read in WT/ACC/807/3 that the Customs Tariff Act and the “Decision on
Distribution of Goods into Forms of Exportation and Importation” abolished quantitative
restrictions on agricultural and food products, sin ce these are inconsistent with Article XI of the
GATT and the WTO Agreement on Agriculture. We look forward to reviewing this legislation.
Is the Customs Tariff Law of 15 August 1996 reference in WT/ACC/807/3/Add l the same law
referred to in this section of WT/ACC/807/3?
Answer:
Yes, it is. Please refer to Annex 2 which will update the previously submitted legislation.
Question 223
Is the “Decision on Distribution of Goods into Forms of Exportation and Importation“ the same
legislation as “Decision-act for Dividing of the Goods in Forms of Import and Export (and list ofgoods) in the Field of Foreign Trade” listed in 807/3, section III:5? We  look forward to an early
submission of this legislation for WP review.
Answer:
Yes, it is. This document will be listed in Annex 2 that updates the previously submitted
legislation as Decision on Classifica tion of Goods for Imports and Exports.
Question 224
Please explain what is meant by the statement that “ all agricultural and food products are on
LB regime, except for certain deficit and sensitive products for which the applicable regime is
based on approvals”
Answer:
Lists of products subject to import and export licensing will be attached to Annex 3.
Question 225
What approval is required for the importation of “ deficit and sensitive products”? What
products fall into these categories?
Answer:
Please refer to Annex 3.WT/ACC/807/5
Page 90
(b) Exports
Question 226
Noting the information in WT/ACC/807/2 does the Republic of Macedonia currently have any
export subsidy measures in place in the agricultural sector? If so, can recent details be
provided?
Answer:
Export subsidies no longer apply.
Question 227
Does Macedonia continue to apply export  subsidies? Are the programs reported in
WT/ACC/807/2 still in place?
Answer:
Please refer to Question 226.
(e) Internal policies
Question 228
What steps is the Republic of Macedonia currently taking aimed at moving its domestic support
measures towards less trade distorting policies as outlined in Annex II of the WTO Agreement
on agriculture?
Answer:
WT/ACC/4 will be submitted to the WTO Secretariat prior to the first Working Party
meeting.
Question 229
Please provide more information to the Working Party on agricultural support policies in the
format of WT/ACC/4 document.
Answer:
WT/ACC/4 will be submitted to the WTO Secretariat prior to the first Working Party
meeting.
Question 230
The information and data provided in this section of WT/ACC/807/2 and 3 will be very useful
when Macedonia prepares the information on domestic support, following the format provided
in the Secretariat technical memo WT/ACC/4. It is important that Macedonia follow the format
in WT/ACC/4 closely, and provide as much information and detail in the tables, so as to
facilitate the Working Party`s review of these documents.
Please provide the information required in WT/ACC/4 and submit it for WP review prior to the
first WP meeting.WT/ACC/807/5
Page 91
Answer:
WT/ACC/4 will be submitted to the WTO Secretariat prior to the first Working Party
meeting.
5. Policies Affecting Foreign Trade in Other Sectors
Question 231Macedonia states that its textile industry, includ ing fibers, fabrics and finished products, is a
major employer and contributor to industrial social product (over 15 per cent).
How does Macedonia regulate import of textile products.
Answer:
The import of textile products in the Republic of Macedonia is not subject to restrictions. The
Republic of Macedonia has no quantitative restrictions on imports of textile products.
Customs duties provided in the Law on Customs Tariff (Official Gazette of RM no. 38/96)
and  applicable since August 15, 1996 differ depending on the type of imported textile products. The
simple tariff average of textile and textile products is 21.02 per cent ad valorem.
In 1998, the approximate value of imports of textile products, including semi-finished and
finished products was US$ 64 million or 3.3 per cent of the total imports in the Republic of
Macedonia.
Question 232
Macedonia states that it has a significant leath er and leather-processing industry and that pig,
calf, cow, bull, lamb and sheep skins are all pr ocessed for the local manufacture of furniture,
clothing and footwear.
Does Macedonia restrict or tax the export of raw hides and skins? Does Macedonia experience
difficulties in importing hides and skins from oth er countries in the region? If so, what are these
difficulties?
Answer:
The Republic of Macedonia does not restrict nor tax exports or imports of raw hides and
skins. These products are under LB (liberal) trade regime.
V. TRADE-RELATED INTELLECTUAL PROPERTY REGIME
1. General
Question 233
Please provide copies of the following laws rele vant to the trade related aspects of protection of
intellectual property rights in Macedonia:
- Law on Copyright  and Related Rights;
- Law on the Protection of Topography of Integrated  Circuits;- Law on Trading Companies and Law on Trading;WT/ACC/807/5
Page 92
- Law on Foreign Trade  Operations;
- Criminal Code of the Republic of Macedonia;
- Act of Industrial Property;
- Regulations for Procedure of Recognition of the Trademark;
- Act of Industrial Property;- Regulation for Procedure for Recognition of the Patent.
Please review the attached checklist on TR IPS compliance and supply any other relevant
legislation for WP review.
Answer:
The Regulation on Appellation of Origin will be available for examination by the Working
Party members as part of Annex 2.
2. Substantive Standards of Protection
(a) Copyright and related rights
Question 234
Please provide timetable for expected adop tion of ZAPSP (Copyright & Related Rights
legislation).
Answer:
Please refer to Question 235.
Question 235
Is the Law on Copyright (LCRR) of 12 September 1996 the replacement for ZAPSP? If not,
please explain the differences between these two pieces of legislation.
Answer:
The Law on Copyrights and Related Rights (the original title of the Law is "Zakon za avtorski
prava i srodni prava" - ZAPSP) was enacted on 12 September 1996 (Official Gazette 47/96, 3/98).
Since that date this Law is the only law that regulates the area of copyright.
The Law on Copyright and Related Rights will be available for examination by the Working
Party members as part of Annex 2.
(b) Trademarks, including service marks
Question 236
Please explain your reasons for the 10 year limit on trademark.
Answer:
The protection of trademarks is not limited to a period of 10 years, neither is the validity of
the trademark. The period of 10 years is the administrative period established for renewal of a
trademark. This requires a fee for its further maintenance. The renewal of the registered trademark canbe done unlimited times. This means that the validity of the trademark is unlimited.WT/ACC/807/5
Page 93
Question 237
Referring to page 64, second paragraph of document WT/ACC/807/2, pls. Indicate whether the
“entry in to the registry book “ of the transfer of a trademark has declaratory or constituent
effect.
Answer:
Registration of the transfer of a trademark right in the Registry Book of Recognized Rights
has a declaratory effect. The Agreement for transfer of the right is registered in the Registry Book in
order to produce effect towards third parties, i.e. erga omnes .
Question 238
On page 64, third paragraph it is stated “ should  the holder of the mark fail to use from non-
justified reasons, the trade mark  for marking the goods or serv ices to which it reverse more
than 5 years from the date of the entry in to the registry book, i.e. from the date when the markhave been used from the last time, a decision may be past upon request of the person concerned
for termination of the mark “. Pls. explain if the da te of entry in to the registry book or the date
of the last use of the trademark is the relevant date for establishing the time period of five years.
Pls. Clarify who are the “persons co ncerned for termination of the mark”.
Answer:
The date of record into the Registry Book of Recognized Rights, i.e. the date of the last use is
relevant, because that date initiates the running of a 5 year period relevant for submitting a request for
termination of the trademark on the grounds of non-use. Persons who may initiate the procedure are
persons who have certain legal or commercial interests. For example, such a person might be a
producer that has a product with a similar trademark and seeks entry into the market. In such asituation, the Bureau for Protection of Industrial Property or the Public Prosecutor may find that,
without a good reason, the trademark has not been used for more than 5 years and thus grant entry to
the market.
Question 239
On page 64, fourth paragraph it is mentioned “T he decision for recognition of the right may be
declared as invalid during the entire period of protection ex officio, upon proposal of the person
concerned or by the public prosecutor”.
Answer:
The decision for recognized trademark shall be declared void if it has been issued without the
conditions for recognition of the right in place, fo r example, if there is a previously recognized
identical or similar trademark for the same or simila r goods or services; if the registered trademark is
unsuitable for distinguishing of goods or services in the trade; if publishing and using of thetrademark is against the law or morality; if the mark defines only the type of the product; if the
trademark corresponds to an official mark; state or other public arm, flag or emblem, name or
abbreviation of a country or an international organization.
Question 240
On page 64, 5th paragraph it is mentioned that “the licence agreement has to be registered in
the Registry Book”. Please, indicate whether this  entity has declaratory or constituent effect.WT/ACC/807/5
Page 94
Registration of a trademark licence agreement in the Registry Book of Recognized Rights has a
declaratory effect. The licence agreement is entered in the Registry Book in order to produce legal
effect towards third parties, i.e. erga omnes .
(e) Patents
Question 241With reference to the statement on page 67 “The holder of the patent or the owner of the
exclusive patent rights shall be obliged, within 9(nine) years the latest of the duration of the
patent to submit to the Office written evidence that the registered patent fulfilled all the
requirements set forth in the provisions of Articles 13,14,15 of the Act of Industrial Property”
please name the requirements set forth in Articles 13-15 of the Industrial Property Act.
Answer:
Requirements prescribed in Articles 13, 14 and 15 of the Industrial Property Law (published in
Official Gazette no. 42/93) refer to the conditions for patentibility and exemptions of the protection
with the patent and they read:
Article 13
An invention representing a new technical solution for a certain problem, new plant sort and
hybrid resulting from creative work, which is technically viable and which could be applied inindustrial or other commercial activity shall be protected by a patent.
Scientific discoveries, scientific theories, mathematical methods, esthetic creations, plans,
principles and methods for performing intellectual work, computer programs and forms for
offering information, shall not be considered as inventions as set forth in Paragraph 1 of this
Article.
Article 14
The invention shall be considered new if befo re filing the application for a patent, it has not
been present in the technical domain.
It shall be considered that the invention is present in the technical domain when:
1) made available to the public by announcing, exhibiting, presentation or by use in a
manner which enables the professionals to use the invention;
2) essentially is not different from the inventions filed previously or available to the
public before filing the application, except inventions for which the application was
withdrawn before the announcement of the decision by which the patent is
recognized.
In the assessment whether the filed invention is new, the fact that the invention became
available to the public, within a period of at least six months before the date of filing theapplication for a patent, without the consent of the inventor, shall not be affected.WT/ACC/807/5
Page 95
Article 15
It shall be considered that the invention is a result of a creative work when the solution of the
technical problem is apparently absent from the known situation in techniques for the expert.
It shall be considered that the invention could be applied in industry when the object of the
invention is technically viable and can be manufactured or used in the economy or other field.
Question 242
With reference to page 67 penultimate paragraph, please specify the requirements for the
granting of a compulsory licence.
Answer:
In the Industrial Property Law compulsory licences are regulated by the following provisions:
Article 113
Should the holder of the patent, himself or through someone else, fail to use or insufficiently
uses the invention protected by patent in the Republic of Macedonia, the right of use may be
granted to another person, with the obligation to pay compensation to the holder of the patent
(compulsory licence).
It shall be considered that the invention is not used, i.e. that it is insufficiently used in the
Republic of Macedonia if:
1) the holder of the patent refuses to renounce the right to other persons of using the
protected invention or imposes unjustified conditions;
2) in the Republic of Macedonia the demand for objects produced in accordance with
the protected invention is satisfied to a greater extent with import or the import of
these objects disables or prevent their industrial production in the Republic ofMacedonia.
A compulsory licence may be granted to a legal or natural person who can present proof that
it has technological possibilities and production capacities required for use of the invention
protected by the patent.
A compulsory licence shall not be granted if the holder of the patent proves that there are
legal reasons that justify the disuse or insufficient use of the invention protected by a patent.
Article 115
The compulsory licence cannot be exclusive.
Article 117
The request for granting a compulsory licence may not be lodged prior to the expiration of the
term of four years as of the day of the submission of the application for a patent, i.e. prior to
the expiration of three years as of the day of the recognition of the patent, should this termexpire later.WT/ACC/807/5
Page 96
(h) Requirements on undisclosed information, including trade secrets and test data
Question 243
Referring to page 68, section (b) please expl ain how the provision of Art.39.3 of the TRIPS
Agreement is complied with.
Answer:
The protection of undisclosed information (undiscovered tests and other data) of
pharmaceutical or agricultural chemical products submitted to governmental agencies, from unfair
commercial use is provided by the provisions of the Law on Trade (published in Official Gazette no.
23/95, 30/96, 43/95, 23/99, 43/99) regulating unfair co mpetition ( Articles 31, 34 and 37), the Law on
Unfair Competition (Official Gazette 80/99) and Articles 23-24 of the Law Against Limiting the
Competition (Official Gazette 80/99). These Laws are in accordance with the Article 10bis of the
Paris Convention. In addition, protection of undisclosed information and records at pharmaceuticalproducts is provided by the Law on Medications, Remedial Medicines and Medical Devices (Official
Gazette 21/98).
VI. TRADE-RELATED SERVICES REGIME
1. General
Question 244Can the Republic of Macedonia elaborate on the conditions regarding the employment of
professional staff to conduct foreign trade?
Answer:
Employment conditions in Macedonia do not differ in principle, between activities involving
foreign trade and any other commercial activities.  As far as foreigners concerned, these conditionsare regulated in the Law on Employment of Foreigners (Official Gazette no.11/78 and 64/89).
A foreign citizen may be employed if he/she fulfills the relevant legal conditions, the
conditions established in collective bargaining agreements, and the special conditions determined by
this Law.
A foreign citizen may be employed if he/she has an approval for permanent residence or
temporary stay and if he/she obtains an approval for employment.
As an exception, no approval is required if a foreigner performs the following activities and
has been granted permanent or temporary residence:
- business and technical cooperation;
- long-term production cooperation;
- transfer of technology; and
- investing foreign capital.
A foreigner with a permanent resident status shall submit his/her own request for approval of
employment, while an employer shall submit a request for a temporary resident. An approval will be
issued for the envisaged period of stay.WT/ACC/807/5
Page 97
The employment must be governed by an employment contract.
A foreigner shall sign a statement, that in case  of dispute he/she shall accept the authority of
the competent court of the Republic of Macedonia.
The employer is obligated to submit data regarding the number, main elements and duration
of the employment contracts to the Employm ent Bureau of the Republic of Macedonia.
Question 245
We seek information on the Republic of Macedonia’s business licensing regime. We seek
assurances that, according to the MFN princi ple, the regime does not discriminate among
foreign service providers? We also seek informat ion as to whether there is national treatment in
the area of licence fees?
Answer:
For business licensing please refer to Annex 7.
With respect to licence fees, the principle of national treatment is applied.
Question 246
Can the Republic of Macedonia provide information on these issues?
Answer:
Please refer to Question 245.
Question 247
Can the Republic of Macedonia provide clarification of the conditions relating to commercial
establishment, for example :
Are any sectors open to foreigners only if they form a joint venture with the Republic of
Macedonia companies?
Answer:
Please refer to Question 184.
Additional explanations will be provided in Annex 7.
Question 248
Are there any foreign equity limits in esta blishing a commercial presence for any sector?
Answer:
Please refer to Question 184.
Additional explanations will be provided in Annex 7.WT/ACC/807/5
Page 98
Question 249
What commitments does the Republic of Macedonia intend to provide in this area?
Answer:
The Republic of Macedonia has started to work on its Schedule of Specific Commitments.
Question 250
Are there any service sectors subject to restrict ion on modes of supply (Cross - border supply,
commercial presence, etc.)?
Answer:
Detailed information will be provided in WT/ACC/5.
Question 251
What are the rules concerning temporary residen ce in the Republic of Macedonia by foreigners
engaged in trade in services?
Answer:
Foreigners, who intend to come to Macedonia to perform professional activities or for other
reasons justifying a longer stay in the Republic of Macedonia, may apply for a temporary residence.
In addition to the request for a temporary reside nce clearance, a foreigner shall also submit proof
justifying the reason for submitting the request, as well as that the funds for his/her subsistence havebeen provided.  A temporary residence clearance is valid for up to one year and may be extended.  A
temporary residence clearance is issued by the Ministry of Internal Affairs and it is governed by the
Law on Movement and Residence of Foreigners. (Official Gazette of the Republic of Macedonia no.
36/92; 66/92; 26/93).
Question 252
What rules and regulations apply to the provision of health, education, distribution,
environmental and business services?
Answer:
Rules and regulations referring to the above-mentioned sectors will be provided in Annex 7.
Question 253
We will be seeking scheduled market access and national treatment commitments regarding
construction services.
Answer:
Macedonia is currently assessing its ability to undertake commitments in this as well as other
services sectors.  The results will be reflected in its draft Schedule of Specific Commitments.WT/ACC/807/5
Page 99
Question 254
Can the Republic of Macedonia clarify whether foreign service providers are permitted to gain
registration for these activities and what policies, if any apply to the recognition of foreign
qualifications in the construction industry?
Answer:
Foreign construction companies are allowed to register in the Republic of Macedonia. The
recognition of foreign professional qualifications and degrees is subject to bilateral agreements with
the countries concerned.
Question 255
We will be keen to see commitments in profes sional services including legal services and
accountancy.
Answer:
See reply to Question 253.
Question 256
What limitations are there on the provisions of  accountancy, legal and engineering services?
Answer:
A detailed assessment of access restrictions which may fall under Articles XVI and XVII of
GATS is currently being carried out.  Macedonia also maintain licensing and qualifications
requirements in these sectors to ensure adequate levels of professional performance.  Relevant laws
and regulations are listed in Annex II.
Question 257
Does the Republic of Macedonia have plans to liberalize the limitations on the provision of these
services?
Answer:
In preparing its draft services schedule, Macedonia is examining the possibilities of
liberalizing these services.
Question 258
What is the Republic of Macedonia’s approach to  the recognition of qualifications of foreign
professionals?
Answer:
Professional qualifications acquired in regular state schools and private schools abroad,
recognized by a state in which schools operate, are acknowledged in compliance with the Law on
Primary Education, Law on Secondary Education (O fficial Gazette 44/95) and Law on Secondary
Specialized Education. Under these Laws, foreign citizens are entitled to request recognition ofWT/ACC/807/5
Page 100
certificates and diplomas obtained abroad, as if they were Macedonian certificates. This recognition is
provided by the Ministry of Education and institutions of high education and scientific research.
When verifying and recognizing foreign certificates and diplomas, the following elements are
taken into consideration:
- the educational system of the country where a diploma or a certificate was obtained,
- the duration of the education,
- the curriculum,
- the rights conferred to the holder of the certificate or diploma in the country in which
the certificate or diploma was obtained, as well as
- other relevant circumstances.
If, in the course of the verification procedure, it is concluded that the foreign curriculum
significantly differs from the corresponding Macedonian curriculum, the recognition of the certificateor diploma depends on passing additional examinations to insure that the difference is eliminated.
Question 259
Are foreign lawyers, who have qualified in fore ign countries other than Macedonia, permitted
to provide legal services? If so, the requirements, criteria (i.e. what kinds of services foreign
lawyers are permitted to provide) and limitati ons on their activities should be informed.
Answer:
Article 11 of the Law on the Bar 1992 (Official Gazette of the Republic of Macedonia, No.
80/92) provides for the following: “Lawyers from ot her countries may provide legal assistance and
practice law in the territory of the Republic of Macedonia under terms of reciprocity to be determined
by the Bar Association of the Republic of Macedonia”.
Article 13 of the By-law of the Bar Association of the Republic of Macedonia provides that
the Bar Association shall determine the reciprocity of legal assistance provided by legal
representatives from other countries on the territory of the Republic of Macedonia, taking into
consideration that legal assistance from other associations is freely provided under conditions of
equality and mutual respect.
Drafting of a new Law on the Bar is underway. The draft law will be submitted to the
Working Party as soon as it has been prepared.
Question 260
Does Macedonia maintain any preferential agree ments that cover services? If so, please list
them and indicate the nature of the preferences.
Answer:
There are no preferential agreements that cover services as such.
Question 261
Please provide information on services in the format provided in WT/ACC/5 prior to the first
WP meeting.WT/ACC/807/5
Page 101
Answer:
Information as requested by WT/ACC/5 will be submitted to the WTO Secretariat prior to the
first Working Party meeting.
- Banking
Question 262Can the Republic of Macedonia clarify the difference between the banking activities which a
foreign subsidiary and a foreign branch are permitted to perform?
Answer:
In compliance with Article 5 of the Banks and Savings Houses Act (Official Gazette of the
Republic of Macedonia, No. 31/93; 78/93; 17/96; 29/96; 71/96; Decision of the Constitutional Court
of the Republic of Macedonia U.no. 184/96-30/97; Decision of the Constitutional Court of the
Republic of Macedonia U.no. 1/98-17/98; 37/98), a foreign bank may establish a branch with thestatus of a legal entity, and a representative office without the status of a legal entity.
The branch office does not have the authority to independently conduct payment transactions
abroad. The branch office performs payment transactions abroad through a bank in the Republic of
Macedonia that is authorized to directly conduct activities abroad, exclusive of payments made and
received in foreign currency from the parent bank on the grounds of capital relations.
A representative office of a foreign bank is not a legal entity and cannot perform banking
activities. Such representative offices perform activities pertaining to representation, provision of
information and affirmation of the parent bank.
Question 263
How are banks authorized to “deal abroad”?
Answer:
Please refer to Question 266.
Question 264
Please explain under what types of legal entities banks can establish in Macedonia? What is the
meaning of “ banks are established as companies limited by shares”?
Answer:
Any foreigner may establish a commercially incorporated, independently capitalized bank in
Macedonia.  In addition, foreign banks may decide to set up branches or representative offices.
Please, also refer to Questions 262 and 265.
Question 265
Please explain the meaning of “There are no res trictions imposed on the foreign investment in
the total amount of the bank’s nominal capital.”WT/ACC/807/5
Page 102
Answer:
Pursuant to Article 4 of the Banks and Savings Houses Act (Official Gazette of the Republic
of Macedonia, No. 31/93; 78/93; 17/96; 29/96; 71/96; Decision of the Constitutional Court of the
Republic of Macedonia U.no. 184/96-30/97; Decision of the Constitutional Court of the Republic of
Macedonia U.no. 1/98-17/98; 37/98) banks are founded as shareholding companies under the termsset up by this Act. In this sense, there are certai n limits with respect to the shareholding structure of
the banks, which are:
− the amount of preferential shares of a bank that legal or natural person, foreign or
domestic can have, may not exceed 20 per cent of the bank’s equity capital;
− the share of a single shareholder, legal or natural person, foreign or domestic, may not
exceed 20 per cent of the bank’s equity capital in cash with a right to participate in
the management of the bank;
− when a founder is a foreign bank, its share in the equity capital may exceed 20 per
cent, but must not be more than 65 per cent of the equity capital.
The above mentioned, indicates that, in principle, in the Republic of Macedonia it is thus
possible to establish banks with 100 per cent foreign capital, taking into account the aforementioned
limits.
Question 266
Branches are usually no juridical persons (see also GATS Art. XXVIII.(d))  Pls. Explain how
this relates to your statement that “branch ha s the status of a legal entity”. Are branches
restricted in any other activity than with  regard to external payment operations?
Answer:
A branch of a foreign bank gains the status of a legal entity by its registration in the court.
The type of banking operations performed by a branch depends on the type of licence granted by the
National Bank of the Republic of Macedonia (NBRM), which in turn depends on the amount of theequity capital of the branch. The amount of the equity capital must be provided in cash, necessary for
founding and operating a bank.  The equity capital of a branch of a foreign bank must not be below
the MDen equivalent of DM 7.000.000, calculated according to the exchange rate of the NBRM, at
the day the application is submitted to the court registry. For granting a licence to conduct payment
operations, as well as credit and guarantee operations abroad, the liquid equity capital of the bank, i.e.a branch of a foreign bank, must not be below the MDen equivalent of MDen 21.000.000, calculated
according to the exchange rate of the NBRM on the day the application for licence is submitted.
Operations of branches are regulated by the Banks and Savings Houses Act. All provisions
that regulate operations of banks also apply to operations of branches, unless it is otherwise stipulated
by the Act.
- Insurance
Question 267
Is our understanding correct that only nationals (natural or juridical persons of Macedonia) are
allowed to establish insurance companies in Macedonia? Pls. Explain the type of establishment
that is required (“companies limited by shares”).WT/ACC/807/5
Page 103
Answer:
According to the Law on Insurance (Official Gazette of the Republic of Macedonia No.49/97,
79/99), domestic and foreign natural and legal persons are allowed to establish insurance companies.
The insurance companies are established as joint stock companies in which stockholders can enjoy
their rights depending on their share in the company.
See also answer to Question 268.
Question 268
Please explain in more detail the mixed insu rance companies that foreigners are allowed to
participate in. Is there a limitation in foreign capital?
Answer:
The term “mixed companies” was used in the Law on Insurance from 1993. Under the new
Law from 1997 all insurance companies established in the Republic of Macedonia, regardless of theownership of the capital are considered domestic.
The individual share of each stockholder (legal entity or natural person) can go up to 25 per
cent of the stocks with a right of management. In  case of a foreign insurance company the share may
go up to 65 per cent and, as an exception and with a special approval from the Minister of Finance, up
to 80 per cent of the stocks with right of management.
The total participation of the foreign capital in an insurance company can be maximum 65 per
cent, or 80 per cent with a special approval of the Minister of Finance.
Question 269
Is the supply of reinsurance service res erved to National Insurance companies?
Answer:
Only reinsurance companies established and registered in the Republic of Macedonia, irrespectively
to the nationality of their founders, and licenced  for reinsurance activities can provide reinsurance
services in the Republic of Macedonia.
- Telecommunications
Question 270Could the Republic of Macedonia clarify what liberalization will be forthcoming in the draft
Law on Telecommunications described in WT/ACC/807/2, page 78? Will the Law provide
national treatment to foreign service providers and observe the MFN principle?
Answer:
The Law on Telecommunications, enacted in 1996 and amended in April 1998 (“Official
Gazette of the Republic of Macedonia” No. 33/96, 17/98, 22/98) allows competition in providing
telecommunication services. Article 23 of the Law stat es that a concession is needed for building,
possessing and operating a public telecommunication network and providing public
telecommunication services. Both, domestic and foreign legal entities and natural persons may obtainWT/ACC/807/5
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a concession. The relevant terms and conditions for obtaining a concession set by the
Telecommunications Directorate and approved by th e Minister of Transport and Communications are
published in the Official Gazette of the Republic of Macedonia. The Telecommunications Directorate
determines if a potential contractor meets these terms and conditions. Then, concessions are granted
by the Minister of Transport and Communications  based on a proposal from the Telecommunications
Directorate within the Ministry.
Domestic and foreign investors in the area of telecommunications have equal rights and
obligations, and their access to the market is ad ministered in an objective, transparent and non-
discriminatory manner.
However, according to the Law, the existing Public Telecommunication Operator (PTO) -
“Makedonski Telekomunikacii” has an exclusive right to provide fixed voice telephony services;
telegraphy services, telex services; public pay phone services and leased line services, as well as tobuild, posses or work with fixed public telecommunication networks until 31 December, 2005.
The Law on Telecommunications sets forth the terms and conditions for operating,
constructing, maintaining and utilizing telecommunication network and defines the relationship
between providers and users of telecommunication services; competition; universal service
obligations; issuance of concessions; management, utilization and control of the radio frequencyspectrum; production, import, sale, use and maintenance of radio stations and terminal equipment; and
other issues related to the telecommunications sector.
Foreign legal entities and natural persons are allowed, according to the Law on
Telecommunications, to purchase stocks, of the existing PTO. Foreign natural persons are allowed to
become officials or employees and participate in the management of the PTO.  The PTO is not subjectto any restriction on the grounds of foreign participation in its capital or management, nor of capital
participation of legal entities.
Question 271
Could the Republic of Macedonia clarify the conditions which are placed on the participation
and investment in the telecommunication sector by foreign persons by the Law on concessionsand the Law on foreign investment?
Answer:
Please refer to Question 270.
Question 272
Please explain the draft Law on Telecommunications currently under consideration by the
Parliament in more detail. What is the scope and schedule foreseen for liberalization of
telecommunication sector? Will foreign suppliers be allowed to participate in the market and
under what conditions?
Answer:
Please refer to Question 270.WT/ACC/807/5
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VII. INSTITUTIONAL BASE FOR TRADE AND ECONOMIC RELATIONS WITH
THIRD COUNTRIES
1. Bilateral or Plurilateral Agreements Relating to Foreign Trade in Goods and Trade in
Services
Question 273Please provide the Working Party with an update on trade agreements with third countries
started, initiated, or signed since the submission of the Foreign Trade Memorandum.
Answer:
Lists of trade agreements with third countries are indicated below.
List of Free Trade Agreements
Country Signed Published Enter into force
The Republic of Slovenia 1 July 1996 Official Gazette
No.48/961 December 1999
(the Agreement wasimplemented on
temporary basis since the
day of signing)
The Federal Republic ofYugoslavia4 September 1996 Official Gazette No.
59/9631 January 1997
The Republic of Croatia 9 May 1997 Official Gazette
No.28/9730 October 1997
The Republic of Turkey 7 September 1999 Official Gazette
No.83/99The implementation will
start upon expiration ofone month after theratification by the
Contracting Parties.
The Republic of Bulgaria 13 October 1999 Official Gazette
No.83/9929 December 1999
European Union - Cooperation
Agreement29 April 1997 Official Gazette  No.
37/971 January 1998
The Republic of Macedonia has started negotiations on free trade agreements with the EFTA
countries and Ukraine and plans to start negotiations with Romania in May 2000.
 The Republic of Macedonia has started renegotiations on the Free Trade Agreements with the
Federal Republic of Yugoslavia, the Republic of Croatia and the Republic of Slovenia. Changes and
additions will be namely on the rules of origin, the procedure for allocation of tariff quotas for
agricultural and food products, using the “first come-first served” principle, quantity of trade undertariff quotas and the level of customs rates for agricultural and food products. As these changes will
have a certain impact in the domestic agricultural and food sector, it will be necessary to make
adjustments in the development of new capacities.WT/ACC/807/5
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List of Trade and Economic Cooperation Agreements
Agreement Signed Published Enter into force
Agreement on Trade and Economic
Cooperation with the RussianFederation28 May 1993 Official Gaze tte 49/93 28 October 1994
Agreement on Trade and Economic
Cooperation with the People’sRepublic of China31 May 1995 Official Gazette 60/95 14 April 1996
Agreement on Trade and Economic
Cooperation with Switzerland8 January 1996 Official G azette 17/96 1 September 1996
Agreement on Trade and Economic
Relations and Cooperation with
Hungary7 May 1996 Official Gaze tte 55/96 17 February 1997
Agreement on Trade and Economic
Cooperation with Romania27 September 1996 Official Gazette 8/97 19 March 1997
Agreement on Trade and Economic
Cooperation with Ukraine3 June 1997 Official Gaze tte 50/97 6 February 1998
Agreement on Economic,
Agricultural, Industrial, Technicaland Technological Cooperation withAustria3 June  1997 Official Gazette 55/97 1 July 1998
Agreement on Trade with the Czech
Republic19 September 1997 Official Gazette 61/97 10 December 1997
Agreement on Trade and Economic
Cooperation with Albania4 December  1997 Official Gazette 15/98 3 April 1998
Agreement on Economic
Cooperation and Trade with Poland28 November 1996 Official Gazette 15/98 3 April 1998
Agreement on Trade Cooperation
with Malaysia11 November 1997 Official Gazette 7/99 15 February 1999
Agreement on Economic
Development Cooperation withTaiwan9 June 1999 Official G azette 44/99 9 June 1999
Trade Agreement with Egypt 22 November 1999 Official Gazette 7/2000 Ratified by the
Republic ofMacedonia on
27 January  2000.
Will enter intoforce uponratification byEgypt.
Question 274
Please describe briefly the content of each of  the Agreements mentioned in the answer to the
above question.
Answer:
Description on the content of each free trade agreement will be provided in Annex 8.WT/ACC/807/5
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Question 275
We note that custom preferences are applied in  trade with Slovenia, FR Yugoslavija, Croatia
and Bosnia and Herzegovina, in some cases with very limited application in the agricultural
sector.
Do these arrangements result in free trade betwee n the parties ( i.e. elimination of barriers on
substantially all trade?)
Answer:
The Republic of Macedonia has Free Trade Agreements with the Republic of Slovenia, the
Republic of Croatia and the Federal Republic of Yugoslavia, that are in force. In these Agreements
products classified under Chapters 1-24 of the HS System are subject to mutual concessions given in
accordance with tariff quotas. As mentioned in question 274, the Republic of Macedonia has started
renegotiating these three Agreements.
The Republic of Macedonia does not have a free trade agreement signed with Bosnia and
Herzegovina.
Question 276
If not, what plans does the Republic of Mace donia have to bring these arrangements into
conformity with GATT Article XXIV?
Answer:
The Republic of Macedonia will take into consideration the provisions of the WTO including
Article XXIV of the GATT 1994 and Article V of the GATS in its free trade agreements.
Question 277
Macedonia has a number of preferential trade a rrangements and is currently negotiating one
with the European Union.
Please list and describe the provision of any agreements that provide for tariff or other trade
references on goods as provided in Annex 8 of WT/ACC/1, prior to the first WP meeting.
Answer:
Please refer to Questions 273 and 274 and Annex 8.
 Question 278
Please describe the provisions of Macedonia’s FTAs with Croatia and Slovenia.
Answer:
Please refer to Questions 273 and 274 and Annex 8.
Question 279
We note that the Republic of Macedonia has a number of country specific tariff quotas with
Slovenia, Croatia and FR Yugoslavia. We do not consider that these arrangements can beWT/ACC/807/5
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justified under Article XXIV of the GATT, as agriculture is virtually excluded from the free
trade provisions of these agreements.
Does the Republic of Macedonia have any plans to expand the coverage of agriculture under
these agreements so that free trade is achi eved between the parties in this sector?
Answer:
Under the Free Trade Agreements concluded between the Republic of Macedonia and the
Republic of Slovenia, the Republic of Croatia and the Federal Republic of Yugoslavia the imports and
exports of agricultural and industrial products are subject to tariff quotas which are determined every
six months. They shall be gradually abolished as provided in Annexes to the above mentioned
Agreements.
For more information, please refer to the original texts of the Free Trade Agreements which
are available for consideration by Working Party members in the WTO Secretariat, AccessionDivision, Office No.1124.
Question 280
What is the nature of the quotas listed in Annex II, appendix 3(a) on imports from the Federal
Republic of Yugoslavia, i.e., are these tariff rate quotas like those applied to imports listed in
Annex II from Slovenia and Croatia, or are they maximum permissible import quotas onimports?
Answer:
The quotas listed in Annex II, appendix 3(a) on imports are tariff quotas like those applied to
imports listed in Annex II from Slovenia and Croatia.
Question 281
Annex II, appendices 1 and 2 of 807/3 lists quotas for 1999 administered by Macedonia for
imports from  Croatia  and Slovenia
Please confirm that these “quotas “ are actually tariff-rate quotas for certain products
(agricultural and foodstuff ) under Macedonia’s bilateral free trade  agreements with Slovenia
and Croatia.
Answer:
The quotas listed in Annex II, appendices 1 and 2 of 807/3 are tariff quotas.
Question 282
Please confirm that when zero duty imports from these countries reach the level specified in
Annex II that all further imports, even from these countries, must be made under MFN rates of
duty .
Answer:
Once the allocated tariff quotas have been utilized in full, other imports of products are
subject to MFN rates of duty.WT/ACC/807/5
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Question 283
Please indicate if the quotas listed in Annex II, appendices 3 (a) and 3 (b) with the Federal
Republic of Yugoslavia are of the same nature. If not, please clarify the difference.
Answer:
The quotas listed in Annex 2 appendix 3 (a) and 3(b) for trade with the FR Yugoslavia and
the quotas listed in Annex 2 for the Republic of Slovenia and the Republic of Croatia are both tariff
quotas.
Question 284
Please cite the legal authority used to  administer the quotas listed in Annex II.
The Bilateral Trade Cooperation Division in the Ministry of Trade has the authority to
administer quotas listed in Annex II. It establishes levels of tariff quotas under the Free Trade
Agreements, while the Trade Policy and Regime Division issues licences for tariff quotas and followstheir utilization.
Question 285
Is Macedonia considering ways to minimize the possible trade diverting effects of preferential
trade arrangements, especially if external MFN tariff rates are high?
Answer:
The Republic of Macedonia will consider ways to minimize possible diverting effects of
preferential trade arrangements.
Question 286
Concerning the tariff rate quotas listed in Anne x II that specify the limits of duty free trade in
certain products with Slovenia and Croatia:
Please indicate how this arrangement meets the provisions of Article XXIV of the GATT which
specifies that tariffs and other such measures should be eliminated from "substantially all
trade".
Answer:
Please refer to Question 276.
Question 287
Does Macedonia maintain any non - MFN tr ade relations with the Federal Republic of
Yugoslavia? If so, please describe them. Please clarify if the quotas listed in Annex II,
appendices 3(a) and 3(b) are quantitative restrictions or duty - free tariff rate quotas like those
applied to certain imports from Slovenia and Croatia.
Answer:
Please refer to Questions 280 and 283.WT/ACC/807/5
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Question 288
Please indicate if Macedonia will join the Agre ement  on Trade in Civil Aircraft upon accession
to the WTO?
Answer:
At present, the Government of the Republic of Macedonia does not intend to join the
Agreement on Trade in Civil Aircraft upon accession to the WTO. However, the Government of the
Republic of Macedonia will examine to seek observer status/accession to the Agreement at a later
stage.WT/ACC/807/5
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ATTACHMENT 1
The Macroeconomic Policy of the Republic of Macedonia for 2000
I. Conditions and Anticipations
The crises in the region, which culminated in the first half of 1999, to a greater or to a smaller
extent, will have an impact on the status and conditions in which the development will continue in the
year of 2000.  Nevertheless, globally viewed, the realization of the Macroeconomic Policy for 2000
expects to be developed in a more favorable domestic and foreign environment than it was in 1999.
However, the regional crisis with its negative impacts over the economy and development in
general is behind us.  For a greater number of activities, branches and commercial entities, the
conditions in 2000 will be much favorable than the same in 1999.  The negative consequences from
the crisis in the region will be present and felt in separate segments of the economy for a longer period
of time, which means in the year of 2000, as well.  Thus, together with the influence from the
transferred problems and limiting factors on various grounds, they make the conditions quite complexand difficult.
The plan is to enter in the year of 2000 with defined global directions, determinations and
measures.  Namely, at the beginning of the year, the following documents and programs are expected
to be adopted: the Development Program of the Republic of Macedonia for the period 1999-2003, theStrategy of the Republic of Macedonia for its Involvement in the European Integration Processes
(economic and social section), while the Export Strategy has already been adopted.
The Government of the Republic of Macedonia in the year of 2000 will give a special place to
the completion of the systemic frame, which is in the function of the market economy.  With respectto this, certain current solutions will be changed and also several new systemic and other laws will be
adopted or changed in the year of 2000, such as: the Law Against Corruption, Law Against Money
Washing, Law on Foreign Exchange Operations, La w on Small-Scale Industry, Law on Stimulating
the Technological Development, Law on Issuance of State Securities, Law on Issuance and Trade
with Securities, Law on Profit of Corporations, Law on Tax Administration, Law on Labor Relations,
Law Against Monopolies.  The following laws will be changed or amended: the Law on the National
Bank of the Republic of Macedonia, Law on Banks and Saving Houses, Law on Executive Procedure,
Law on Customs, Law on Customs Tariff, laws from the field of taxes, Law on Social Protection, Law
on Health Protection, Law on Health and Disability Insurance Fund, Law on Bankruptcy, Law on
Denationalization, Law on Agricultural Land, Law on Construction Land, Law on National
Registries, Law on Entrepreneurship, etc.
For the purpose of bestowing familiar working conditions to commercial entities from the
beginning of the year, the biggest number of regulations and laws that are compatible with and in the
function of realization of the goals and duties of the macroeconomic policy shall be adopted
simultaneously with its adoption or immediately after that.
Several systemic laws and regulations shall be adopted as well, for the purpose of increasing
the legal security of investments, protection of creditors and simplification of the procedure for small
and medium enterprises. The expected entry of several strategic investors in domestic companies shall
produce the desired and expected effects.
The surrounding of our country would be improved.  For the purpose of creating more relaxed
relations, special efforts shall be made in improving the economic relations with other countries, and
especially in maintaining good relations with the neighbouring countries.WT/ACC/807/5
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From the aspect of the relations with abroad, we expect the newly concluded economic
agreements to provide access on markets, especially the Free Trade Agreements (Turkey and
Bulgaria) and the ones that are to be concluded with other countries in the future.
The reconstruction of the region and in frames of this, the new opportunities that occur
through participation in various projects (Stability Pact) shall allow for increased business activities
for a number of commercial entities from the country.  The estimated movements in the world
economy and in those frames, the movements in the countries of the EU, as the greatest partner of
ours, are adding to the anticipations of a more relaxed foreign environment in 2000.
Also, the effects from the agreements for free economic zones, which implementation will
accelerate the development and increase the export and employment are expected to appear in 2000.
It is also planned to intensify the activities for better cooperation with countries of the EU,
with the USA and other developed countries, with a special focus on increasing of export quotas for
certain important products for the country and decrease of the protection measures (textile, iron, steel,
wine, lamb meat).
Nevertheless, the development in 2000 will be faced again with the long-term problems
present here, although not so intense as in 1999.
Besides this, the realization of the macroeconomic policy in 2000 will be
determined/conditioned by a number of limiting factors.  The low level of export of goods and
services will be a serious limiting factor, contrary to the increased production, both from the aspect of
sale and the high deficit.
Also there will be negative effects from the increase of prices of oil on the international
market, especially on the competitive capability of the export.
Some negative impact on the commercial activities is expected from the long-term present
insolvency in general and insolvency of certain commercial entities.
II. The Macroeconomic Policy in 2000
Basic Duties
Starting from the already achieved results and the current condition in the field of
macroeconomic equity and stability, and implementation of the structural reforms, and also taking
into consideration the problems which the development is faced with, the anticipated external andinternal conditions, as well as the other evaluated opportunities and anticipations, the basic duties of
the macroeconomic policy and the policy of the structural reform for 2000 are the following:
1. Creation of conditions and opportunities for normalization of the production, strengthening
the growth of the GDP in total and per separate activities and branches, and based on that,increase of the number of employees and decrease of the people who need a job, growth of
export of goods and services and improvement of the living standard of the population.  For
the realization of this goal, active participation of commercial entities from the country is
expected, in reconstruction of the region, successful realization of the Program for restarting
the industrial capacities, creation of grounds for new investment projects, especially in thesmall and medium enterprises, through greater engagement and mobility of domestic
accumulation, inflow of foreign capital on various basis; restructuring, revitalization,
modernization and financial consolidation of the existing capacities, as well as
institutionalization of economic relations with abroad.  Related to this, there will also beWT/ACC/807/5
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continual and more aggressive promotion and advertising activities for improvement of the
export and investments.
2. Creation of conditions for maintenance of the macroeconomic equity and stability, which are
based on the increase of the domestic offer, which will be put on a higher level and on morepermanent grounds.  For achievement of this goal, simultaneously with the creation of
conditions for maintenance of the trend of growth of production and services rendered, we
shall continue to control to a certain degree the aggregated consumption.  This shall be
realized through reconciliation of salaries with the movements of living expenses and real
opportunities, except the salaries of entities with mainly private capital, keeping the fiscal
consolidation on a higher level, maintaining the stability of the domestic currency.
3. The progress of reforms shall be given a priority, as a basic condition, so that the previous
two tasks may be established on more permanent grounds, where a special accent shall be
placed on: revising the existing normative solutions; post-privatizing restructuring of
enterprises and their financial consolidation, finalizing the privatization of agricultural
cooperatives and other entities, which privatization is still in process or has not begun, yet,control of certain entities, which privatization has been completed; acceleration of sale of the
state capital; definition of strategic investors in privatized enterprises; privatization, sale or
termination of big loss-makers.  In the banking sector, the privatization will be more and more
based on the fast entry of strategic investors, instead of privatized clients, strengthening of the
process of joining/merging for the purpose of faster consolidation, as well as opening aprocess of increased competition in this sector decrease of high commissions when the
interest rates are concerned.
Income Policy
a) Salaries
The salary policy in 2000 shall be in the functi on of maintaining the macroeconomic stability,
and for this reason, one part of employees will still receive limited salaries.
Due to this, the Law on Salaries shall remain valid and the salaries of employees in the
commercial and non-commercial sector shall be paid in compliance with the legal provision andBargaining Agreements.  The monetary stock for salaries of employees in the state administration
shall be set at the level from 1998.  The effects of the reform in the public administration shall create
conditions for differentiation and increased motivation of employees in compliance with their
contributions to the work in general.
b) Prices
The global policy on free price formation shall continue in 2000, but still there will be a
certain type of control over the prices of a small number of products and services, which are important
for the living standard of the population and have a kind of monopolistic position on the market.  Theannual inflation (December/December) is being projected on 3,65 (average increase per month of
0,3%) while the level viewed from January/December 2000 compared to January/December 1999 is
projected on 4%.
With the application of the regime of direct control in 2000, the prices of the following
products and services shall be established: flour - type "500" and bread produced of this type of flour
and net. weight 600g; railway transport; PTT services - except the services of the public mobile
telephony that are not realized through stationary networks; production and distribution of raw water,
production and distribution of drinking water, cleaning and eduction of waste waters - except forWT/ACC/807/5
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collectors, waste, mortuary services, including the expenses for the tomb and its lease, the bonus from
obligatory insurance of vehicles.
The price for electric power, oil products, distribution of natural gas, distribution of heating
and exploitation of geological and thermal water shall be formed in compliance with the Methodologyfor Price Formation for Certain Types of Energies.  A committee established by the Government of
the Republic of Macedonia especially for this purpose shall decide upon these issues.
The price of electric power includes in itself the development component in accordance with
the credit contract, through which assets shall be provided for paying off the credits for construction
of energetic facilities.
The price of the following products shall be under the announcement regime: pasteurized
milk, production of medicines and pharmaceutical chemical products (finalized medicines for the
human medicine), rent for flats, transport of passengers in towns and their suburbs, distribution of
books for primary and secondary education, the special fee paid when registering motor vehicles,
commissions form the payment operations.
In case of a greater disturbance on the market by a certain product or a service, which is of
vital importance for the life of population and falls under the regime for free price formation, may be
temporarily placed under a regime for a certain type of control.
A new tariff system for sale of electric power shall be adopted, which will help in
arrangement of prices for this type of energy, per categories of consumers.
If different goods and services, which prices are under the regime of direct control and
formed on a level of municipality, start to decrease in comparison with the average prices of the samegoods, i.e. services, gradual elimination of the disparity will be carried out.
Prescription of protective prices for certain agricultural products shall continue for the
following products: cereal and small leaf oriental tobacco.
In the formation of protective prices, the conditions in which the goods are produced in the
country shall be taken into consideration, and especially the prices of the same goods on theinternational market.
In the year of 2000, stock balance shall be prepared for the basic agricultural and food
products, on the basis of which the deficiency and surplus of them will be determined, for the purpose
of proposing and undertaking measures for reconciliation of the relations between the offer anddemand for these products.
Fiscal Policy
The policy of slower growth of incomes for pub lic expenditures, compared to the growth of
the GDP shall continue in 2000, as well.  During this process, the participation of incomes for public
expenditures shall decrease for 0.7 percentage points and will be 35,0% of the GDP.  At the same
time, equity shall be achieved for all the users of the Budget funds for covering the public
expenditures in the country.  The deficit of approximately 4 billion MKD, which is expected in the
Budget of the Republic of Macedonia based on the matured obligations for use of foreign credits shallbe covered by using funds from international financial institutions.
Certain changes shall be made in the tax system for the purpose of realization of the
anticipated fiscal policy in 2000.  The value added tax shall be introduced and it will replace the salesWT/ACC/807/5
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tax, from 1 April 2000, and at the same time it will require changes on the Law on Excises for its
reconciliation with the value added tax.
The Methodology for determining the retail price of oil products will be changed, which will
result in provision of relatively stable inflow of income from excises in the coming year.
The fiscal policy in 2000 shall be directed toward further increase of the efficiency of the tax
administration in collecting the taxes for the purpose of decrease of income evasion.
For continual and sustainable fiscal deficit in 2000, a decrease of expenditures for public
purposes shall be made.  Besides this, the Budget will support the restructuring and developing
activities.
The Budget of the country shall provide funds for salaries and reimbursement, which
approximately, will be equal with the level of salaries from 1998.  For the purpose of rationalization
of Budget expenditures and initiation of the process of reforms in the public administration, a
Program for Reforms in the Public Administration for 2000 will be prepared.  The Budget hasprovided funds for realization of this project of 2% from the total Budget expenditures.
Also from the total expenditures of the Budget, 3.2% shall be allocated for reformation of the
enterprise sector.
The developing function of the Budget shall be realized through capital expenditures, which
will be directed toward financing of projects (railway, roads), support of agricultural production,
construction of waterworks, initiation of the development of commercially least developed regions
and support of small and medium enterprises (through programs for pre-qualification).
For support of the monetary policy from the Budget of the Republic of Macedonia, deposits
shall be transferred to the National Bank of the Republic of Macedonia in the amount of 1300 million
MKD on an annual level.
For support of the social policy in the following year, assets shall be provided for covering the
increased expenditures for protection of socially vulnerable population, transfers into the Pension and
Disability Insurance Fund and transfers for unemployed persons due to the structural reforms.
The relief of public expenditures shall be also realized also through decrease of the budgets of
social funds. For this purpose, the activities in Health Insurance Fund related to the reform activities
shall continue in the 2000, as well as the rationalization of the expenses.  In the Pension and Disability
Insurance Fund, the increased expenditures, due to the reforms in the economy and publicadministration, shall be provided through transfers from the Budget of the Republic of Macedonia, as
well as from the assets of the privatization processes.  Also, assets from the Budget of the Republic of
Macedonia shall be provided for the increased expenditures in the Employment Bureau.
For increasing the efficiency and rationality in spending of assets allocated for unemployed
persons and socially vulnerable families: the income on the basis of fictive expenditures shall be
eliminated; stronger control shall be introduced and introduction of more severe punishments for false
documentation, both for the bodies that issues it and for the citizens who present it.
Monetary Policy
The monetary policy in 2000 shall be more relaxed than in 1999 regarding the achievement of
its general goals.  Through optimal planning of the offer of money and credits the intention will be toWT/ACC/807/5
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support the realization of the anticipated economic growth, but without disturbing the stability of
prices in the last couple of years.
A real increase of monetary demand is expected in 2000 and a higher degree of monetization
of the Macedonia economy.
The real increase of monetary demand in 2000 according to the anticipations would be 3.5%,
while the nominal increase of the offer of money (monetary aggregate M1) would be 13.6%.
The orientation towards market instruments of monetary regulation shall continue, as well.
For this purpose, credit limits shall be dynamically terminated, which will improve the market of
treasury bills and other securities.
The total credits of banks approved to entities from the non-commercial sector may be
increased for 6.162 million MKD in 2000, or approximately 18%, which will be in the function of a
more dynamic economic growth.
The terms for maintaining and maturing of treasury bills shall be standardized, which will
allow formation of prices of the treasury bills on a competitive ground.
The interest rates in the 2000 shall also be basic operational instruments of the monetary
policy.  The moderate market decrease of interest rates on the money market shall be supported by
indirect measures of economic policy, especially with greater affirmation of the money market.  Thistrend will probably continue as a result of the policy of stable foreign exchange rate of the denar, the
relatively low inflation rate, the effects from the sale of the Stopanska Banka, the increased offer of
foreign currency on the foreign exchange market.
A surplus of offer compared to a demand for foreign currency is expected in the 2000, mainly
due to the capital inflow (donations and foreign inve stments).  The net surplus of foreign currency is
projected on 55,4 million MKD.  The purchase shall be supported by a transfer of deposits from the
state to the central bank in the amount of 1,4 billion MKD.  With this, the anticipated increase of
primary money shall be in the function of supporting the credit activity of banks.
Foreign Sector
The activities in the domain of the foreign se ctor in the 2000 shall be directed towards
creation of conditions for more dynamic export and more reconciled relations in the stock exchange
with abroad, increase of the foreign currency inflow as a result of export of goods, services and other,
regular settlement of the current obligations towards abroad, selective credit indebtedness in the
frames of the balance of payment capacities, entry of foreign direct investments, sustaining thestability of the denar exchange rate and increase of the foreign currency reserves.
The increase of export of goods and the other foreign currency inflow shall be achieved
through the policy of the denar exchange rate, the policy for initiation of the export, the policy of
protection of the domestic production, the policy of  improvement of the commercial and other types
of cooperation with certain countries and economic integrations.
The improvement of the export shall also be achieved through indirect economic measures,
especially through the policy of payback of customs duty of imported raw materials for the production
process, which then will be exported.  As an exception there will be direct initiation of export ofcertain agricultural and food products, which are us ually faced with justified protectionism measures
and problems during the export.WT/ACC/807/5
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For obtaining a greater inflow of foreign currency, the criteria for approval of export of goods
through compensations and other specific matters abroad will be raised on a higher level.
Also, the activities for concluding free trade agreements with the countries members of
EFTA, Romania, Albania, Bosnia and Herzegovina, Ukraine, etc, shall be intensified.
The signed free trade agreements with the Republic of Turkey and the Republic of Bulgaria
shall be properly implemented.
The following free trade agreements shall be changed and amended: Free Trade Agreement
with the Republic of Slovenia, the Republic of Croatia and the Federal Republic of Yugoslavia, for
the purpose of their reconciliation with the principles of the World Trade Organization and their betterfunctioning.
There is an intention for Macedonia to sign agreements for economic and trade exchange with
countries, important partners to the RM, with which this has not been realized, yet.
Also the activities for accession of the RM to the WTO shall be accelerated, which will
contribute to increase the export and participation in international processes.
The promotion activities of the export potentials of the Macedonian economy shall be
strengthened in order to increase the export.  Among the other things, we shall improve the
cooperation with the International Trade Center, the priority shall become available on program basis
and also all possible forms of presentation will be used (internet, etc).
There will be initiation of new round of negotiations for concluding a new agreement for
export of textile in the USA.  The unrealized export quotas of textile in the USA, due to the regional
crisis in 1999, will probably be transferred in the year of 2000.
It will become possible the export of textile to the USA to exceed the agreed quotas if the
fabrics are purchased in that country.
Conditions shall be created for accelerated building of free economic zones in the Republic of
Macedonia.
The initiatives for foreign direct investments shall be supported (which will be realized in the
frames of the Stability Pact).  For this purpose, a list will be prepared containing the projects
according to their priority for the country.  This list will be a basis for preparation of other priority
lists for projects important for the Republic of Macedonia, Republic of Bulgaria and the Republic of
Albania.
Enterprises from the country will be encouraged and better organized for their participation in
international tenders for reconstruction of the region, especially FR Yugoslavia and Kosovo.
The process of reconciliation of national standards and technical regulations on goods with
the harmonized standards of the EU shall continue and the whole process will be more intensified.
Foe these reasons, new laws shall be adopted, in order to regulate issues from the field of
standardization, metrology, accreditation and technical requirements for goods, which will createconditions for application of standards and techniques in our production, already applied and used in
the EU and other developed countries. At the same time, new conditions will be created for
establishment, technical and personnel equipping of national bodies for standardization and
accreditation as independent public institutions and the body authorized for metrology.WT/ACC/807/5
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The import shall be obtained in the frames of de termined proportions in the projections of the
balance of payment for 2000.  With the measures of protective and foreign currency oriented policy, a
priority will be given to the import of raw materials and equipment that are not produced in the
country, but which are needed for production planned for export, as well as for the restarted capacities
according to the Program.
The import of goods shall be realized on the basis of appropriate application of criteria for its
quality (obligatory possession of documents for standards and a-tests) and already provided assets and
instruments for payment of it.
During the procedure for approval of compensation works abroad, a priority will be given to
the import of goods, which are in deficit on the domestic market, raw materials of strategic
importance, i.e. food products, as well as import of equipment which will contribute to the increase of
export of products.
The additional acts for implementation of the new Law on Customs shall be prepared and
adopted, which will create conditions for its implementation in the year of 2000.
The Customs Tariff shall be reviewed for the purpose of its reconciliation with the HS of the
EU, but which will be at the same time in compliance with the capacities of our economy.
The National Bank of the RM will try, with a policy of intervention to maintain the stability
of the exchange rate of the MKD.
With the policy of credit-financial relations, selective credit indebtedness shall be provided, in
the frames of the balance of payment capacities a nd abilities, increased inflow of foreign direct
investments and other non-credit forms and regular settlement of the obligations towards the foreign
creditors. For this purpose, a Strategy for Indebtedness of the RM on Medium Terms shall beprepared which will review the current conditions, the regular settlement of the debt and possibilities
for use of new credits.
New grounds will be created for achieving an arrangement with the World Bank and the IMF,
which will support the structural reforms.
The promoting and advertising activities shall be intensified in order to attract foreign
investors, and all that for increasing the inflow of capital based on foreign direct investments,
portfolio investments and joined investments in the economy and on the basis of concession in the
public sector.
The foreign currency reserves, which are managed by the National Bank of the RM, shall be
used for interventions on the foreign exchange ma rket in compliance with the monetary policy for
maintaining the stability of the exchange rate of  the MKD, as well as for maintaining the general
solvency of payments of the country abroad.
Real Sector
In 2000, a special place will be given to the measures of the macroeconomic policy which
will create conditions and grounds for providing healthy and strong real sector, through maintainingand strengthening the intensity of growth of the production and services and of the GDP.  For
achieving this goal, more favorable ground for investment ventures shall be opened, mainly in the
small businesses and small and medium private enterprises, restructuring, revitalization, technical-
technological modernization and financial reliability of the existing capacities in the frames of the
Program for re-starting of industrial capacities, during which intensive restructuring of MacedonianWT/ACC/807/5
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exporters needs to be obtained in particular. Strengthening of the process of institutionalization of
economic relations related to the greater engagement and mobility of the domestic accumulation. Also
more aggressive promoting activities shall be obtained for increasing the inflow of foreign capital on
various grounds.
For the purpose of intensifying the development of small and medium enterprises and the
entrepreneurship in general, which is a prime mover of the economic development of the Republic of
Macedonia new conditions shall be created for their presentation.
The legislative shall be more regularly revised in order to provide more efficient work of
trade companies and in those frames of the small and medium enterprises.
The current laws shall be reviewed and new laws adopted in the field of handicrafts and
cooperatives, which will simplify the procedure for starting this kind of an activity, by individuals
(family business).
The National Agency for Development of Sm all and Medium Enterprises - NEPA will
become stronger both financially and from the point of professionalism of the staff.  In the shortest
term, but the latest during the first couple of months of 2000, all regional centers for support of the
development of small and medium enterprises in the country shall be established and will start
operating.
Activities shall be undertaken for establishment of a business network, which will unify
groups of small and medium enterprises with complementary production programs, for better
competitiveness, easier establishment of sub-contractor relations with large enterprises and survival
on the market.
New business incubators shall be established for animating the local administration, local
large enterprises, local sectors of the Chamber of Commerce of the RM and other entities, for better
use of the equipment which is not used, vocational trainings of unemployed persons and assisting in
the process of establishment of new micro and small businesses.
In the 2000 the realization of the already agreed credit lines shall continue: the credit from the
Government of Italy in the amount of 24,6 milli on DM, the credit from the FR Germany through KfW
in the amount of 13 million DM and the credit from the Republic of China in the amount of 12 million
USD. At the same time, the realization of micro-credit line for support of small businesses through the
PHARE Program shall continue, as well.
Efforts shall be made in providing new and better credit lines from international financial
institutions, which will be allocated for support of small and medium enterprises in compliance with
the balance of payment capacities of the country.  These assets shall be made available through
commercial banks in order to achieve economic efficiency and profitability of future projects and toprovide transparency when allocating them.
The small and medium enterprises shall be promoted and contacts shall be made with
entrepreneurs from the country with partners from abroad.
The technical assistance from abroad for training of entrepreneurs shall be controlled from
one place only, and then used in compliance with the needs of the entrepreneurs.  Thus, theparticipation of domestic consulting companies will be  increased for the purpose of involving them in
the development of small and medium enterprises.WT/ACC/807/5
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The one stop shop system shall be created for registration of enterprises, which will allow
both the domestic and foreign businessmen to finish all the formalities related with this procedure of
registration.  This will be made through one unified form, which will be used in all public institutions
involved in the process of registration. The time period for completing all the necessary formalities
will be reduced to two weeks.
In 2000, regarding the agriculture a policy for more significant structural reforms shall be
created, i.e. grater processing of primary raw materials according to the needs of the domestic
industry, foreign partners and for increase of export.
The appropriate policy of protection of the domestic production shall continue for the
agricultural and food products as well.
For initiation of the development of agriculture, measures shall be undertaken in the farming,
stockbreeding, vine production and orcharding, for which an annual Program for Initiation of theDevelopment of Agriculture shall be prepared.  The Program shall be supported by funds from the
Budget of the state in the amount of 244 million MKD.
The funds from the Budget will be used again for support of the health protection of animals
from contagious and parasites diseases in the amount of 167 million MKD, as well as for protection of
plants from pests. For termination of harmful quarry approximately 1.5 million MKD shall beallocated from the Budget.
The activities for stigmatizing of stock will contin ue in 2000.  This is an obligatory condition
for export of lamb meat in the countries of the EU.  For this activity, the Budget of the Republic
anticipated 32 million MKD.
The Funds from the Budget in the amount of 30,0 million MKD shall be used for financing
the activities of planting trees in moorlands and protection of forests through the Program for
Planting.
With the Program for Investments in the Agriculture with funds from the Budget, in the
amount of 94 million MKD three projects shall be financed:
- Rehabilitation of hydro-systems in the RM
- Rural development of southeast regions in the RM
- Support of individual farmers
Investments
Realization of more intense investment activity and creation of conditions for restructuring in
the following year shall be obtained through creation of conditions for greater use of domesticaccumulation and mobilization of domestic saving, as well as with use of foreign capital, mainly
through concessions, direct investments, joined investments portfolio investments and other non-
credit forms of financing.
Principles and other conditions shall be created for more intensive investments activities in
the private sector of the commercial economy, especially in the industry, agriculture and small
businesses.  At the same time, the realization of already initiated projects in the public sector shall
continue, while the construction of new ones will depend on the financial construction.
Private enterprises shall become basic carriers of the investment activity where the investment
achieves the best results. A priority in 2000 shall be given to the export oriented production, whichrelies a lot on the scientific achievements and technical - technological progress.  The technical -WT/ACC/807/5
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technological development will help in modernizing the technological processes and will contribute in
the restructuring of production toward hi gher phases of production - processing.
Temporary protection of the new products shall be carried out, as well as initiation of the
development of new products and services.
The growth of investments supported by the Budget shall be strongly supported in 2000, for
which reason the participation of the part for capital investments in the total expenditures of the
Budget shall significantly increase.
In the public sector, a process of rationalization of the Program for Investments in the Public
Sector of the Republic of Macedonia shall be carried out on the basis of priority.  Investments in the
public sector shall be realized with assets of the investors, funds from the Budget, through
concessions, foreign direct investments, joined investments, donations, as well as with appropriate
foreign credits provided during the year, but taking into consideration the degree of indebtedness ofthe country.
The concessions shall be continually used in the field of the public sector that are important
for the Government and interesting for investors in the country and abroad.  Related to this,
realization of several projects for finalizing the required technical, analytical and tender
documentation shall supported as well.
The investment activities in 2000 shall be directed towards finalizing the construction of the
motorway Skopje-Tetovo and Stobi-Demir Kapija, the hydroelectric power plant HE "Kozjak";
revitalization of other hydroelectric power plants; finalizing the establishment of operational centers
and supply of equipment for the distribution netw ork; construction of the motorway Demir Kapija-
Gevgelija and the motorway around Skopje, as well as beginning of new projects according to theprovided assets for their realization.
The intensive activities for realization of ten investment projects for the public infrastructure
that are financed through grants of $10.5 million from the Government of the Republic of China shall
continue in the year of 2000.
Activities related to the realization of the project for construction of the thermoelectric gas
power plant with a combined cycle for co-gener ative production of electric and heating energy in
Skopje shall also continue.
The grant of 39 million DM from the Republic of Germany, in 2000 will initiate activities
related to the direct implementation of the projec t for water supply "Stude ncica" and the project
"Ecological Protection of the Lake Ohrid", and also the activities regarding the project
"Accompanying measures for opening of new working places through activities of improving the
communal infrastructure in the Republic of Macedonia", which will be accomplished with thefinancial assistance of the Republic of Germany in the amount of 16.0 DM.
All the works related to the approval of the favorable "JEN" credit from the Government of
Japan for finalizing the first phase of the hydroelectric power plant "Zletovica" shall be enlarged.
The budget has provided funds for the irrigation sector which is actually a grant from the
Government of Netherlands and a credit from the World Bank and these assets shall be used forcontinuing the project for rehabilitation and restructuring of HMS "Bregalnica", HMS "Tikves", HMS
"Radiovce-Bistrica", HMS "Gostivarsko Pole" a nd HMS Banjicko Pole" in compliance with the
anticipated dynamic.WT/ACC/807/5
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For the purpose of improving the opportunities for attraction of foreign direct investments in
the Republic of Macedonia, the activities in the 2000 will mainly be directed towards finalization of
the directions and measures contained in the "Progr am for Investment Incentives with a Special Point
on Attraction of Foreign Direct Inve stments".  Namely, in the efforts of reorganizing the procedures
and institutions for establishment and registration of trade companies, the Committee for simplifying
the formalities shall finalize its activities for implementation of the "one stop shop" system.
For the purpose of simplifying and changing the legal regulations for involving trade
companies in the trade, as well as for creation of regulations compatible with the ones of the EU, and
all that, for providing a positive climate for foreign investments, several new laws shall be adopted
during the following year.  Increased inflow of fo reign investments in the 2000 is expected also from
the free economic zones.
Because of the implementation of the Law on Free Economic Zones, an Office for Free
Economic Zones shall be established during 2000, as well as other conditions and capacities, for the
same purpose.
For initiation and promotion of inventions, facilities such as innovation centers and technical
parks shall be formed, which activity will include activities for initiation and promotion and assistance
to the inventors on a higher professional level.  The process of transferring the new scientificdiscoveries and technologies to the newly established small and medium enterprises shall be
supported, as well.
For the purpose of encouraging the innovation activities and application of patents and
industrial design in practice, and also for increas ing the level of technological development in the
country, measures shall be undertaken in accelerating and intensifying the process of investing inimplementation of new technologies through application of new inventions/patents and industrial
designs that are filed/registered on the territory of the Republic of Macedonia and their appropriate
industrial protection.  For achievement of this goal a Center for Promotion of Invention Activity shall
be established through which: the invention labour and inventiveness shall be promoted, assistance
shall be provided during the protection of the rights of industrial property, market research,preparation of business plans and assistance in establishing business contacts.  Also, a Center for
Technological Monitoring will be formed, for the purpose of following the development of the latest
technological movements and providing services to interested domestic and foreign entities.
For strengthening the institutional setting of foreign direct investments in Macedonia, the
Department for Investment Promotions in the Ministry of Development that function as one
institution, shall grow into a Center for Investment Promotion in 2000.  The basic function of the
Center shall be fulfilling the requirements of the market economy and satisfying the needs of foreignand domestic investors.  At the same time, the newl y established Center, which will be independent in
its work and cover a wide range of activities and will be strongly supported by the Government of the
Republic of Macedonia shall be realized through the Ministry of Development.  The activities of the
center for investment promotion shall be directed towards increase of the inflow of foreign direct
investments through building the country's image, generating the investments and improving theservices for the investors, analysis and research of investments.
In the frames of the Ministry of Development a Department for Industrial Policy shall be
established, which goal will be revitalization of industrial capacities, introduction of new
technologies, directing the industrial development towards highly productive and more profitable
activities, strengthening of the coordination and cooperation with foreign institutions for researchesand development, and financial centers and foundations in executing the investment projects.WT/ACC/807/5
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The promoting activities for representing the country as a good business destination for the
foreign investors shall also continue.  Among the more important activities we can emphasize the
following: "Forum of Investors", preparation and promotion of the "Investment Guide for the
Republic of Macedonia" and "Catalogue for the Profile and Opportunities Offered by the Free
Economic Zone"; promotion and presentation of the country and investment projects at internationalfairs, forums, conferences etc.
III. Structural Reforms
1. In 2000, a special accent shall be placed on the reformation process, especially those referring
to the restructuring and post-privatization period of enterprises.  The system shall be revised in the
areas that showed certain weaknesses and problems and delay the process in general.  The structural
reforms shall be realized with appropriate application of the market and commercial criteria andgradually abandoning the "soft budget financing".
The control over the privatization process of enterprises for the purpose of fixing the
irregularities and illegal acts that may show up during the procedure shall be carried out in the
following year, as well.
The privatized capital of privatized enterprises,  which made losses, shall be decreased for the
amount of the loss, while the state capital shall be increased.
The control over the concluded contracts of enterprises with the Privatization Agency shall
continue and those that irregularly or has never been paying off their obligations shall be forced to
terminate the contracts, and the unpaid stocks to gi ve to the Agency, which will offer them for sale to
potential strategic investors, or on the Stock Exchange Market.
2. The corporation management will be encouraged and improved by establishing modern state
regulation in the domain of trading with long term securities, formation of investment funds,
transformation of the Pension and Disability Insu rance Fund into a real financial inter-mediator,
promotion of the opportunities for investing in the Republic of Macedonia, introduction of manager'soptions and education of managers, as well as education of the population for acquiring knowledge
about stocks and shares.
The legal regulations related to trading with securities shall be brought into a final stage: the
Law on Trade Companies and Law on Securities will be changed and amended in the parts that refer
to the information of stock holders, eventual tax exemptions or relieves related to the capital profit
and transaction on the Stock Exchange Market.
The Law on Investment Funds shall be adopted, and it will lead to creation of grounds for
establishment of Macedonian investment funds with headquarters abroad, which will be managed by a
selected and differentiated portfolio of Macedonian stocks.
In order to revive the market of securities and at the same time to capitalize the pension and
disability insurance fund and its functioning as a real financial inter-mediator, activities shall beundertaken to increase the sale of package of stocks available to the Fund (15% of the value of the
social capital).  For this purpose, among the other issues, a group of 8 to 10 young experts shall be
trained in the European countries and USA especially  for matters related to the management with the
portfolio of the pension funds and other important institutional investors and after the training, they
will be assigned to run the portfolio of the Fund.  In the first couple of years of the work of the Fundforeign advisors shall be included, as well.WT/ACC/807/5
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For the purpose of training the owners of stocks (over 250.000 stock holders) with knowledge
from the filed of stock holding, its essence, the rights and obligations of owners of long term
securities, available ways for establishment of a portfolio of securities, decrease of risks, etc., a
Program for education of the population in the domain of stockholding shall be prepared and realized.
This Program will include: compiling, publication and distribution of popular brochures from thisfiled, realization of popular TV and radio shows fro m the field of stockholding, preparation of simple
and interesting texts for the stockholding and their publication in the daily newspaper regularly.
Similar technical and financial assistance from abroad will make possible the organization of
various types of training programs for managers.
3.  Large enterprises, which work with losses, shall be privatized through finding strategic investors.
If such investors are not going to be found until March 2000, the same shall be liquidated.  For the
remaining enterprises of the list of big loss makers , a deep analysis shall be prepared for the basic
performances of the work, especially the largest on the list of the 12 big loss makers, which will
definitely show for which enterprises it will be an illusion to start their consolidation.  For the same
bankruptcy procedures shall be filed immediately.
If the analysis for certain enterprises have shown bad results, but in the meantime a domestic
or a foreign potential investor has shown interest fo r the whole of for a part of the enterprise, all the
opportunities shall be provided to them to realize that venture.
Banking Sector
In the forthcoming period the process of restructuring of the banking sector shall continue, for
the purpose of its financial stabilization, returning of the trust of citizens and in general improving the
credibility of domestic banks, privatization of the banks that have not been completely privatized, as
well as integration of the financial system of the country to the international market.
The increase of efficiency of the banking sha ll require changes in the direction of increased
competition, proceeding with the privatization a nd greater concentration of ownership in banks,
strengthening of the supervision, stronger legal frames and better information on the banks and theirclients.
The process of strengthening the supervision of the National Bank of the Republic of
Macedonia over the commercial banks and saving houses, by applying appropriate international
standards for supervision and undertaking correct measures towards insolvent banks shall continue.
Based on these grounds, it is expected that the financial discipline will become stronger, as well as the
competition and that the banking system shall provide more efficient allocation of assets.
The entrance of foreign banks or branch banks in the domestic banking system shall be
supported as a strong element of competition, which compared to the real sector, so far has been
protected from the foreign competition.  During this process, the entrance of foreign banks shall be
actively promoted, as well as improvement of the procedure for the methods of the credit valuation of
the domestic banks, also the banks shall be merged and the baking infrastructure shall be modernized.
For improving the competition in the banking sector, the development of strong banks shall besupported, by raising the minimum capital of the banks, among the other measures.
For the purpose of building the trust towards the banking sector, the insurance of the deposits
of savings shall continue to be applied.  Also, the conditioned capital in the saving houses shall be
increased and new levels of insurance of savings deposits shall be established.WT/ACC/807/5
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In order to decrease the interest rates, appropriate mechanisms shall be realized for increasing
the offer of financial capital through the banking sector.  The reduc tion of high interest rates should
be the needed precondition for economic growth that may be achieved by increasing the domestic
saving.
The business banks shall proceed with solving the problem of present interest obligations of
enterprises from the previous years with which, they provide their own restructuring and clearing of
balance positions.
The entry of a foreign bank in the Stopanskka Banka AD Skopje, which covers almost 43% of
the market, shall probably bring a new climate in the banking system by enriching the financial
instruments and entry of new knowledge and expertise.  This will initiate other domestic banks to
merge or to accept other foreign strategic investors, which will increase the healthy competition in the
banking sphere.  At the same time, the clearing of the balance of Stopanska Banka from theunfavourable sales will provide more efficient operation of this bank with a positive effect in the
direction of decreasing the interest rates.  The other banks are expected to act in the same way
regarding the decrease of interest rates since they would also like to survive in the competition on the
credit market.  Of course, the decrease of active interest rates is basic condition for increasing the
investments, which are generators of the economic growth.
Labour Market and Social Protection.
1. The policy of employment of the labour market shall be directed towards finding new realistic
solution in the sphere of employment.
For creation opportunities and conditions for greater employment an active policy shall be
created and implemented by undertaking short term and long term measures, especially through:
- Intensive investment, financial and other support of the development of the private sector,
with institutionalized, financial and educative support of the development of small and
medium enterprise, small businesses, self-employment, intensifying the foreign directinvestment and joined ventures.
- further realization of the projects for small and medium enterprises through the National
Agency for Development of Small and Medium  Enterprises (NEPA), spreading the network
of regional centers with the financial assistance of the PHARE Program, simplification of the
procedure for preparation of programs by the Agency (NEPA) and acceleration of the
procedure for the projects and programs by the banks, provision of micro credits and
capacities for initiating and supporting the small businesses by the banks, with a better graceperiod and lower interest rates for the purpose of encouraging the investments and opening of
new working places for a longer term;
- restarting the existing and unused capacities;
- assistance in employment by realization of programs for training, prevocational training
through various projects, financially assisted by the World Bank, the IMF and otherinternational and foreign organizations and institutions, realization of concrete programs for
training provided by educational institutions together with the employers and the Employment
Bureau through grants for greater participation in the training expenses;
- creation of conditions and suppositions for foreign direct investments, use of  foreign credits
for development of projects for development of small and medium enterprises and providingconcessions.WT/ACC/807/5
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- opening of economic, trade and customs zones
- stimulating measures from the tax policy for realization of programs for employment of
younger long term unemployed persons, so cially vulnerable individuals and women;
- providing grants for municipalities for realization of projects for increasing the employment
- through financial and other support to projects for individual farmers and for running family
business in the agriculture, the returning flow from  the town into the village shall be initiated,
which will decrease the unemployment in the towns
-  establishment of incubators for employment of persons who are waiting for a job for a longer
period of time, socially vulnerable persons and women, with financial support of such
projects under favorable terms and conditions.
- improvement of the work and increase of assistance of employment bureaus to the employers
and unemployed persons in informing, mediation and consulting because of greaterflexibility, efficient allocation and use of labour force and inter-sector and inter-department
mobility of the labour force;
- implementation and spreading of the project for assistance for local development of fired
employees "PRISMA", which is conducted with the support of the USAID and projects for
the social sector of the World Bank and other projects;
- permanent and strengthened inspection monitoring, for the purpose of improving the
discipline on the labour market and decrease of illegal employment, technical equipment and
professionalism of the personnel of the inspectorate for labour and operation in shifts.
- more severe policy for penalties and faster solution of court procedure related to labour and
prohibition for performing activities for not respecting the Law, solving of disputes throughmediation (out of court)
- organization of public works and hiring of unemployed persons who use reimbursement for
being not employed or social help and better coordination and cooperation of the labour
inspection, the Employment Bureau and centers for social works in undertaking mutual
actions and measures for better application of laws
- connection into a wider information network or  INTERNET for presenting and obtaining data
of the Employment Bureau, the Health Insurance Fund, the Pension and Disability Insurance
Fund and the Social Insurance FUND.  All the obtained data to be compared with all these
institutions for specific satisfaction of the needs of the unemployed persons and employers
and for supervision and control of the market.
- the manner of exchange of information regarding the vacancies and trends of the local and
national market of labour force shall be institutionalized by organizing seminars forunemployed persons and for the employers, as well.  The Employment Bureau in cooperation
with the local; government shall organize wo rking clubs, fairs for employment, so that the
persons who are looking for a job may meet with the potential employers
- the establishment and functioning of private agencies for mediation in employment shall be
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- the realization of already started educational - vocational programs for professional education,
revocation and initiation of new programs for persons who lost their jobs in the process of
restructuring of the economy shall continue in  order to accelerate their leaving from the
labour market and more successful employment
- a National Strategy shall be adopted - "National Agreement" for employment signed by the
Government, the Labor Union, the Chamber of Commerce and others for stimulating and
improving the forms for employment, registration of unemployed persons, employment of
young people with university education who have been looking for a job for a longer period
of time.
- establishing pilot projects for unemployed persons "Voucher Unions" in the municipalities,
where the mutual payment of certain public services may be performed with a voucher-
internal money for their purchase or transfer of it into real money
- changes shall be made on the provision referring to the employment: in the Law on Labor
Relation, Law on Employment and Insurance in Case of Unemployment, and others.
Through selective migration policy the uncontrolled outflow of labour force abroad shall be
reduced (without the mediation of the Employment Bureau).
2. The Social Protection in the following year shall be carried out in compliance with the Law
on Social Protection and the Decision for the Basic Criteria, and the Manner and Conditions for
obtaining Social Assistance, in the frames of the anticipated assets allocated in the Budget for 2000.
Pursuant to the Law and Decision, the citizens who are exposed to social risks and are not in condition
to provide their own social security, will realize their rights through the measures of social protectionboth in institutions and out of institutions on the basis of social assistance to the socially vulnerable
population.  In compliance with the Decision, the pr otection of those members of the society, who
found themselves in a difficult situation due to the transitional processes and structural reforms shall
continue.  Such system of providing social assistance shall be improved in the future in the direction
of more fair distribution and allocation of the social assistance to the most vulnerable and the poorestcategories of the population.  In that sense, the project of the World Bank for Emergency Social
Assistance shall review the possibilities of making changes on the Decision for Emergency Social
Assistance for the purpose of checking the criteria and the appropriate amending in obtaining of this
right.
The social security of employees whose employment contract has expired due to economic,
technological, structural or other similar changes shall be provided in compliance with the changes of
the Law on Labor Relations and the Law on Employment and Insurance in Case of Unemployment, in
the frames of the anticipated assets for this purpose , in the Budget for 2000, as well as in the frames of
the approved credit from the World Bank provided for continuation of the Project for Emergency
Social Assistance (in the amount of $11.6 million).  During this and in compliance with the Law on
the Manner and Conditions for Use of Assets per Contract for Use of the Credit from the World Banka single reimbursement shall be paid in a form of severance payment to the employees in enterprises
with a predominant state capital, whose employment contracts have been terminated due to economic,
technological and structural and other changes, while from the funds of the Budget payment shall be
made for the delayed net salaries and contributions, as well payment for unemployment to the
employees through the Employment Bureau.  At the same time, in the frames of the funds of theBudget material support shall be provided for the extra employees from the public administration who
will be fired due to the technological redundancy or retired with severance payment and assets for
administrative retirement.  For this purpose a separate Law on Administrative Retirement shall be
adopted.WT/ACC/807/5
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Reforms in the Health and Pension Sector
1. At the beginning of the following year the changes and amendments of the current legislation
for regulating the state pensions system shall be adopted, as well as the proposed model for reform of
the pension and disability insurance.  In compliance with these changes the age limit for retirementshall be gradually increased (65 years for men and 63 for women), the substitute rate shall be
gradually decreased (85% to 80%), calculation of the pension base from the whole working
experience etc.  At the same time conditions shall be created for establishment of the proposed model
for reform of the pension and disability system with  a parallel existence of three types of posts: the
first  - state post - currently financed - compulsory; the second post - capitally financed - compulsory
and the third post - capitally financed - voluntarily.  For this purpose, at the end of the year, in the
frames of the anticipated reform of the pensions and disability insurance, a Law on Capitally FinancedPension System has been prepared, and it completely regulates the institutionalization and functioning
of the capitally financed pension system.
2. In the following year the reforms of the health insurance system shall continue, as well, in
compliance with the Project for Transition in the Health Sector, financed by the World Bank.  Theanticipated reforms shall be implemented in compliance with the new Law on Health Insurance which
is a precondition for implementing the measures from the first component of the Project, i.e. increase
of the macroeconomic efficiency of the system.  The new Law anticipates health protection of the
whole population, definition of the fiscally sustaina ble health services, new policy on participation of
the health services in the direction of determining small fixed amounts but, with not so bigexemptions, establishment of the Health Insuranc e Fund as a separate organization with its own
Managing Board in charge for implementation of the determined policy, correction of the system for
financing of health services and giving concessions in  the health sector.  At the end of the year a Law
on Health Protection shall be adopted, which will define the status of health organizations and the
relation between the doctor and patient.
Projection of the macroeconomic aggregates
In 2000, on the basis of the created conditions and those that are to be created by the
Macroeconomic policy and the assumed opportunities and abilities, it is estimated that the process of
revival of economic activities and maintenance of the macroeconomic equity and stability shall
continue.  On these grounds, it has been calculated that the basic, macroeconomic aggregates whichare indicative projections for 2000, compared to 199 9 would be achieved with the following dynamic:
GDP would be increased for 6.0%, (industry - 9,0%, agriculture - 5,0%, export of goods would
increase nominally for 10,3%, import of goods - 13,1%, retail prices would increase annually for
4,0%, average salaries of the all the employees would remain on the level from 1999, while the total
number of employees would increase for 2,0%).
The Macroeconomic Policy of the Republic of Macedonia shall be published in the Official
Gazette of the Republic of Macedonia.
No. 23-5860/1
21 December 1999
Skopje The President of the Government of
the Republic of Macedonia
Ljubco GeorgievskiWT/ACC/807/5
Page 129
REPUBLIC  OF  MACEDONIA
MINISTRY  OF  DEVELOPMENT
Documentation for the Macroeconomic Policy of
the Republic of Macedonia
Skopje, December 1999
Introduction
This documentation presents the analytic-quantitative base for the macroeconomic policy of
the Republic of Macedonia for the year of 2000.
It contains data for the total of macroeconomic determiners and balances for the Republic of
Macedonia, data on certain business activities and economic areas in the period from 1997 to 1999, as
well as projections for the 2000-year.
In the documentation are used available data from the official informative system, while on
the used determiners there were no official data, but were used estimations made by the Ministry ofDevelopment.
The data is given in a form of current prices, and in certain cases, in constant prices, which
results in elimination of the inflationary affect.
For the purposes of processing this documentation, data were used from the Bureau of
Statistics of the Republic of Macedonia, National Bank of the Republic of Macedonia, Bureau for
Payment Transfers, as well as documentation from other institutions in the Republic of Macedonia.WT/ACC/807/5
Page 130
BASIC MACROECONOMIC INDICATORS
-real rate of change
1997 1998 1999
estimation2000
projections
Gross Domestic Product (prices from 1998)
Total By Items: 1.4 2.9 2.7 6.0
       Mining and Industry 2.9 4.5 0.0 9.0
       Agriculture and Fishery -2.9 3.9 0.0 5.0
Foreign Trade4
      Total export of goods 7.8 6.9 -9.3 10.3
      Total import of goods 9.3 7.6 -8.1 13.1
Employee Salaries
      Average annual pay 0.2 3.8 3.4 0.0
      Average pay (December/December) -0.8 7.8 -0.2 2.1
Investment in Fixed Assets
  Total 0.6 4.8 5.5 12.5
     Mining and Industry 31.9 5.3 3.2 7.9
     Agriculture and Fishery 2.4 -0.5 5.7 6.3
     Transport and Communications -24.8 11.5 7.1 27.0
     Housing, Utilities and Public services -4.3 0.3 3.6 13.3
     Other Business activities -9.7 6.0 8.3 7.9
Population and Labour Force  (Annual average)
    Permanent residents 0.7 0.7 0.7 0.7
    Total employed -6.0 -2.9 1.2 2.0
    Unemployed 6.5 4.9 28.2 51.4
Public Finance  (% of input the gross domestic product)
     Total Public Incomes 634.8 34.5 35.7 35.0
     Republic Budget 20.8 20.9 22.3 21.9
     Local budgets 0.5 0.5 0.4 0.3
     Non-budget funds 0.6 0.6 0.6 0.5
     Social funds 12.9 12.6 12.4 12.3
Prices and Deflator
    Retail prices (December/December) 4.5 -1.0 0.9 3.6
    Wholesale prices (current/previous year) 4.4 0.8 -0.9 4.0
    Cost of living  (current/previous year) 2.6 -0.1 -0.9 4.0
    Implicit deflator 3.3 0.3 -0.9 4.0
                                                     
4 Nominal rate. For calculation of real rate, export and import prices are not available.
5 The increase of the unemployment is explained with the transfer process from manual to new, computerized
processing of the data, where persons, that previously were deleted from the records, applied to be registered again
6 Not included the transferred revenues from the Budget for social and non-budget funds, as well as the transferred
revenues of the social funds and without the donations in the health fund.WT/ACC/807/5
Page 131
GROSS DOMESTIC PRODUCT
(Total & per citizen)
1997 1998 1999
estimation2000
projections
Amount in million denars–according to cu rrent prices 184,982 190,827 194,262 214,077
-  nominal rates of change 4.8 3.2 1.8 10.2
1997 1998 1999
estimation2000
projections
Gross Domestic Product per citizen(in denars & according to the current prices)92,741 94,986 95,932 104,991WT/ACC/807/5
Page 132
GROSS DOMESTIC PRODUCT BY ACTIVITY
-real rate of change according to the prices from 1998
199771998 1999
estimation2000
projections
Gross Domestic Product 1.4 2.9 2.7 6.0
Mining and Industry 2.9 4.5 0.0 9.0
Agriculture and Fishery -2.9 3.9 0.0 9.0
Forestry -2.3 -12.7 -9.1 3.0
Water Management 4.7 -14.2 0.0 3.0
Construction 0.2 2.9 4.0 8.8
Transport and Communications 3.3 6.9 8.0 11.6
Trade -1.8 0.9 10.0 7.0
Tourism and Catering -3.6 20.3 9.5 10.0
Crafts and Trades & Personal services 6.7 -7.6 0.0 6.2
Utilities and Public services, andLandscaping and Maintenance6.0 1.0 0.0 4.2
Other Non –business activities 1.4 1.6 1.4 1.4
Adjustment items (imputed banking services,
turnover tax, import custom duties and subsidies)2.2 3.7 3.0 6.1
Distribution in %
1997 1998 1999
estimation2000
projections
Gross Domestic Product 100.0 100.0 100.0 100.0
Mining and Industry 21.5 21.8 21.3 21.9
Agriculture and Fishery 9.9 10.0 9.8 9.7
Forestry 0.5 0.5 0.4 0.4
Water Management 0.4 0.3 0.3 0.3
Construction 5.7 5.7 5.8 5.9
Transport and Communications 6.2 6.4 6.7 7.1
Trade 10.9 10.7 11.5 11.6
Tourism and Catering 1.7 2.0 2.1 2.2
Crafts and Trades & Personal services 2.3 2.1 2.0 2.0
Utilities and Public services, and
Landscaping and Maintenance2.3 2.2 2.2 2.1
Other Non –business activities 27.2 26.9 26.6 25.3
Adjustment items (imputed banking services,
turnover tax, import custom duties and subsidies)11.4 11.4 11.3 11.5
                                                     
7 According to the Bureau of Statistics of the Republic of Macedonia.WT/ACC/807/5
Page 133
FOREIGN   TRADING
- in million denars - nominal rate of change
1997 1998 1999
primary
estim.
data2000
projec-
tions1997 1998 1999
primary
estim.
data2000
projec-
tions
Total Export of Goods &
Services1365.1 1453.4 1436.1 1522.6 4.9 6.5 -1.2 6.0
Export of goods 1236.8 1322.1 1198.9 1322.6 7.8 6.9 -9.3 10.3
Production materials 650.0   645.9 558.6 600.0 14.5 -0.6 -13.5 7.4
Equipment & Spare parts
products42.1 53.0 42.3 52.6 9.4 25.9 -20.2 24.3
Consumer goods 543.3 621.7 598.0 670.0 0.6 14.4 -3.8 12.0
Undivided 1.4 1.5 - - 100.0 7.1 - -
Revenues from Services 128.3 131.3 237.2 200.0 -16.9 2.3 80.7 -15.7
Tourism 14.0 14.7 53.0 31.0 -32.0 5.0 260.5 -41.5
Transport 54.2 61.2 80.5 79.4 11.8 12.9 31.5 -1.4
Other Services 60.1 55.4 103.7 89.6 -29.5 -7.8 87.2 -13.6
Total Import of goods and
services2051.4 2216.6 2063.7 2311.8 5.9 8.1 -6.9 12.0
Import of  Goods 1778.5 1913.5 1759.3 1990.3 9.3 7.6 -8.1 13.1
Production materials 1087.7 1242.5 1131.0 1280.0 20.2 14.2 -9.0 13.2
Equipment & Spare parts
products188.5 247.3 239.0 271.3 -13.6 31.2 -3.4 13.5
Consumer goods 491.6 412.2 389.3 439.0 -0.2 -16.2 -5.6 12.8
Undivided 10.7 11.5 - - -7.0 7.5 - -
Expenditures for Services 272.9 303.1 304.4 321.5 -11.8 11.1 0.4 5.6
Tourism 26.8 29.8 32.4 39.5 2.3 11.2 8.7 21.9
Transport 131.7 144.2 146.1 150.1 -11.6 9.5 1.3 2.7
Other Services 114.4 129.1 125.9 131.9 -14.8 12.8 -2.5 4.8WT/ACC/807/5
Page 134
POPULATION AND LABOUR FORCE
- in thousand persons
1997 1998 1999
estimation2000
projections
Permanent Residents81,994.6 2,009.0 2,023.3 2,037.3
Economically Active Population 800.5 823.8 833.09844.0
Employed  (registered) 319.5 310.2 313.9 320.2
           - business sector 235.2 224.0 226.1 235.7
           - non – business sector 84.3 86.2 87.8 84.5
Unemployed  (registered)10253.0 265.3 340.011344.8
- rates of change
Midyear Population 0.7 0.7 0.7 0.7
Economically Active Population 1.4 2.9 1.1 1.3
Employed  (registered) -6.0 -2.9 1.2 2.0
           - business sector -8.0 -3.8 0.9 4.2
           - non – business sector 0.1 2.3 1.9 -3.8
Unemployed  (registered) 6.5 4.9 28.2 1.4
Rate of Unemployment1231.6 32.2 40.8 40.9
                                                     
8 A projection of the population in Republic of  Macedonia until 2020, according to the Bureau of
Statistics.
9 Estimated by the Ministry of Development.
10 Records of the Bureau for Employment.
11 The increase of unemployment is explained with the transferring process from manual to new,
computerized processing of the data, where persons that previously were deleted from the records applied to be
registered again.
12 Unemployed in balance to the Economically Active Population.WT/ACC/807/5
Page 135
AVERAGE PAY PER EMPLOYEE
1997 1998 1999
estimation2000
projections
Average Pay per Employee (in denars) Total 9,063 9,394 9,624 10,000
- business sector 8,888 9,288 9,550 10,043
- non- business sector 9,469 9,623 9,740 9,900
Nominal Average Annual Rate Total 2.8 3.7 2.5 3.9
- business sector 3.7 4.5 2.8 5.2
- non- business sector 0.3 1.6 1.2 1.6
Real Average Annual Rate Total 0.2 3.8 3.4 0.0
- business sector 1.1 4.6 3.7 1.1
 - non- business sector -2.3 1.7 2.1 -2.3WT/ACC/807/5
Page 136
REALIZED INVESTMENTS IN FIXED ASSETS
- in million denars - distribution in %
1997 1998
estima-
tion1999
estima-
tion2000
projec-
tions1997 1998
estima-
tion1999
estima-
tion2000
projec-
tion
Total 27,802 29,360 30,650 35,860 100.0 100.0 100.0 100.0
Mining and Industry 6,821 7,240 7,400 8,300 24.5 24.7 24.1 23.1
Agriculture and Fishery 1,526 1,530 1,600 1,770 5.5 5.2 5.2 4.9
Forestry 119 120 120 130 0.4 0.4 0.4 0.4
Water Management 135 200 270 330 0.5 0.7 0.9 0.9
Construction 516 550 630 720 1.9 1.9 2.1 2.0
Transport and Communications 4,450 5,000 5,300 7,000 16.0 17.0 17.3 19.5
Trade 2,201 2,240 2,350 2,600 7.9 7.6 7.7 7.3
Tourism and Catering 557 600 620 720 2.0 2.0 2.0 2.0
Crafts and Trades 556 560 600 660 2.0 1.9 2.0 1.8
Housing, Utilities and Public
services7,717 7,800 8,000 9,500 27.8 26.6 26.1 26.5
Financial, Technical and Business
activities1,407 1,500 1,630 1,800 5.1 5.1 5.3 5.0
Education and Culture 441 520 560 630 1.6 1.8 1.8 1.8
Health Care and Social Security 902 1,000 1,070 1,140 3.2 3.4 3.5 3.2
Bodies of  State Administration,
Local  Administration, PoliticalParties, Social Organizations andAssociations454 500 500 560 1.6 1.7 1.6 1.6
Investment Input in Gross Domestic Product (in %) 15.0 15.4 15.7 16.7
Mining and Industry 3.7 3.8 3.8 3.9
Agriculture and Fishery 0.8 0.8 0.8 0.8
Transport and Communications 2.4 2.6 2.7 3.3
Housing, Utilities and Public services 4.2 4.1 4.1 4.4
Other Business Activities 3.9 4.1 4.3 4.3
- production 2.2 2.2 2.4 2.4
- non-production areas 1.7 1.9 1.9 1.9WT/ACC/807/5
Page 137
RETAIL  PRICES
- rate of increase
- previous year = 100
1997 1998 1999132000
projections
January 3.9 0.7 -0.8 1.0
February -0.4 0.4 -0.1 0.4
March -0.4 -0.4 0.1 0.3
April -2.1 -1.5 -2.2 0.2
May -0.4 0.4 0.4 0.1
June 0.0 -1.7 -0.7 0.0
July 0.3 -0.7 -0.6 -1.0
August 0.7 -0.4 1.3 -2.0
September 0.1 -0.1 0.3 1.1
October 2.4 2.3 2.6 2.0
November 0.9 0.1 0.6 1.0
December -0.4 -0.1 0.1 0.5
1st Quartile 3.1 0.7 -0.8 2.2
2nd Quartile -2.5 -2.8 -2.5 0.3
3rd Quartile 1.1 -1.2 1.0 -2.0
4th Quartile 2.9 2.3 3.3 3.5
New annual increase 4.5 -1.0 0.9 3.9
Average new increase per month 0.4 -0.1 0.1 0.3
Average annual increase 4.4 0.8 -0.9 4.0
Transfer of prices in the next year 2.4 0.7 2.4 2.0
                                                     
13 Realized changes in the period January-NovemberWT/ACC/807/5
Page 138
STATE BUDGET14
- in million denars - input in GDP in %
1997 1998 1999 2000 1997 1998 1999 2000
re- balance projections re- balance projections
Total Revenues 38,464 39,820 43,320 46,961 20.8 20.9 22.3 21.9
- Tax Revenues 35,442 36,863 40,576 43,396 19.2 19.3 20.9 20.3
Profit Tax 1,295 1,752 2,617 2,613 0.7 0.9 1.3 1.2
Personal income tax 8,755 9,177 9,825 10,033 4.7 4.8 5.1 4.7
Turnover tax & VAT 8,816 8,804 9,541 9,700 4.8 4.6 4.9 4.5
Excises 11,052 10,236 10,189 12,309 6.0 5.4 5.2 5.7
Custom tax & Import duties 5,524 6,810 8,272 8,600 3.0 3.6 4.3 4.0
Other tax – unclassified 0 84 132 141 0.0 0.0 0.1 0.1
Non-tax Revenues 3,022 2,957 2,744 3,565 1.6 1.5 1.4 1.7
Administrative & Judicial
taxes1,068 1,092 1,314 1,508 0.6 0.6 0.7 0.7
Other non-tax revenues 1,954 1,865 1,430 2,057 1.1 1.0 0.7 1.0
- in million denars - input in GDP in %
1997 1998 1999 2000 1997 1998 1999 2000
re- balance projections re- balance projections
Total Expenditures 38,458 39,531 45,759 46,961 20.8 20.7 23.6 21.9
Current Expenditures 35,300 35,65 6 40,203 40,546 19.1 18.7 21.1 18.9
- salaries remuneration 15,148 15,939 16,056 15,874 8.2 8.4 8.4 7.4
- goods & services 4,902 4,942 5,673 6,386 2.6 2.6 3.0 3.0
- current fund transfers 15,250 14,775 18,474 18,286 8.2 7.7 9.7 8.5
-transfers to Government
institutions1,428 1,468 1,513 1,854 0.8 0.8 0.8 0.9
-transfers to self-governing
units12 15 0 0 0.0 0.0 0.0 0.0
- Government Taxes,
Donations, transfers to natural
persons and non-business
organizations10,749 10,441 13,661 11,321 5.8 5.5 7.2 5.3
- transfers to families  in
social need2,767 2,550 2,990 3,187 1.5 1.3 1.6 1.5
- children care supplements 425 470 795 550 0.2 0.2 0.4 0.3
- transfers to the Fund PII 4,066 3,620 3,302 3,890 2.2 1.9 1.7 1.8
- transfers of unemployed
due to structural changes2,981 3,263 3,100 3,050 1.6 1.7 1.6 1.4
- other 510 538 3,474 644 0.3 0.3 1.8 0.3
- transfers on subsidies 3,061 251 3,300 5,111 1.7 1.5 1.7 2.4
- turnover asset of structural
changes0 0 0 1,617 0.0 0.0 0.0 0.8
- goods reserve 431 148 148 112 0.2 0.1 0.1 0.1
- export stimulation 150 0 0 0 0.1 0.0 0.0 0.0
- foreign exchange savings 873 799 747 1,350 0.5 0.4 0.4 0.6
- currency assets as
obligations towardsforeign companies99 0 0 0 0.1 0.0 0.0 0.0
- bank recovery 1,070 971 809 737 0.6 0.5 0.4 0.3
                                                     
14 Not included – the revenues from foreign credits, foreign donations, surpluses from revenues over
expenditures for certain years, i.e. payments of loan and interest towards foreign countries.WT/ACC/807/5
Page 139
- in million denars - input in GDP in %
1997 1998 1999 2000 1997 1998 1999 2000
re- balance projections re- balance projections
- obligations towards
companies on
technological surplus &pre-qualification02 42 12 5 0 . 0 0 . 0 0 . 0 0 . 0
- reform of public
administration0 0 0 1,020 0.0 0.0 0.0 0.5
- program for new
employment0 596 1,331 110 0.0 0.3 0.7 0.1
- other 438 313 244 140 0.2 0.2 0.1 0.1
Capital Costs 1,995 2,136 2,610 3,636 1.1 1.1 1.4 1.7
- building construction in
undeveloped areas of self-governing units500 474 470 578 0.3 0.2 0.2 0.3
- program for road
construction545 668 927 1,200 0.3 0.4 0.5 0.6
- program for investments
in agriculture01 94 89 8 0 . 0 0 . 0 0 . 0 0 . 0
- program for revitalization
of rural areas15 20 20 20 0.0 0.0 0.0 0.0
- geological research 23 21 23 23 0.0 0.0 0.0 0.0
- watering system  in
municipalities120 97 100 200 0.1 0.1 0.1 0.1
- other 792 837 1,022 1,517 0.4 0.4 0.5 0.7
Giving loans, security
investments and payment ofprincipal1,163 1,739 2,946 2,779 0.6 0.9 1.5 1.3
- deposit of the Budget of
NBRM600 1,200 2,200 1,300 0.3 0.6 1.2 0.6
- participation in railway
construction420 412 540 1,437 0.2 0.2 0.3 0.7
- other 143 127 206 42 0.1 0.1 0.1 0.0
Primary deficit-surplus 6 289 -2,439 0 0.0 0.2 -1.3 0.0WT/ACC/807/5
Page 140
PENSION FUND
- in million denars - input in GDP in %
1997 1998 1999 2000151997 1998 1999 2000
re- balance projections re- balance projections
Total  Revenues 20,647 20,521 20,632 22,176 11.17 10.75 10.62 10.6
1. Source Revenues 16,608 16,438 16,534 18,216 8.98 8.64 8.51 8.51
- contributions from salaries 14,132 13,363 14,011 15,050 7.64 7.00 7.21 7.03
- contributions from income 279 237 298 312 0.15 0.12 0.15 0.15
- contributions from private
sector426 407 425 460 0.23 0.21 022 0.21
- contributions from
agriculture143 74 55 60 0.08 0.04 0.03 0.03
- contributions from Bureau
of  Employment816 968 880 1,413 0.44 0.51 0.45 0.67
- excises 731 694 594 751 0.40 0.36 0.31 0.35
- other 81 740 271 140 0.04 0.39 0.14 0.07
2. Budget Revenues 4,066163,618 3,250 3,890 2.20 1.90 1.67 1.82
3. Other Budget Transfers 0 420 848 70 0.00 0.22 0.44 0.03
Total Expenditures 20,053 20,533 20,689 22,176 10.84 10.76 10.65 10.6
- Pensions 17,244 17,733 17,739 19,000 9.32 9.29 9.13 8.88
- Contributions for invalids 179 174 188 194 0.10 0.09 0.10 0.09
- Health insurance for retired
persons2,292 2,319 2,461 2,675 1.24 1.22 1.27 1.25
- Extension services 128 132 132 132 0.07 0.07 0.07 0.06
- Other expenditures 210 175 169 175 0.11 0.09 0.09 0.08
Deficit – Surplus during the
                year621 -12 -57 0 0.34 -0.01 -0.03 0.00
                                                     
15 Not included – the funds for pension adjustment for the users from MIA (Ministry of Internal
Affairs) in an amount of 208 million denars.
16 Included revenues from late pensions in an amount of 550 million denarsWT/ACC/807/5
Page 141
HEALTH FUND
- in million denars - input in GDP in %
1997 1998 1999
estimation200017
projections1997 1998 1999
estimation2000
projections
Total  Revenues 10,617 11,087 11,966 12,661 5.74 5.81 6.16 5.91
1. Source Revenues 10,423 10,933 11,256 12,412 5.63 5.73 5.79 5.80
- contributions 6,727 6,736 6,811 7,425 3.64 3.53 3.51 3.47
- contributions from
pension fund2,416 2,309 2,374 2,675 1.31 1.21 1.22 1.25
- contributions from
employment fund887 1,037 1,341 1,392 0.48 0.54 0.69 0.65
- other 393 851 730 920 0.21 0.45 0.38 0.43
2. Budget Revenues 194 109 244 244 0.10 0.06 0.13 0.11
3. Other Budget Transfers 0 45 466 5 0.00 0.02 0.24 0.00
Total Expenditures 11,139 13,689 11,966 12,661 6.02 7.17 6.16 5.91
- Immediate & Hospital
health protection7,21 10,082 8,611 9,143 3.90 5.28 4.43 4.27
- Expenses per programs 194 215 244 244 0.10 0.11 0.13 0.11
- Medicaments 946 1214 1169 1242 0.51 0.64 0.60 0.58
- Dental Services 516 638 509 534 0.28 0.33 0.26 0.25
- Orthopedic expenditures 87 208 157 165 0.05 0.11 0.08 0.08
- Hospital expenses abroad
(compensation)196 288 222 234 0.11 0.15 0.11 0.11
Other treatments 678 722 693 727 0.37 0.38 0.36 0.34
- Extension/Expert services 166 310 192 202 0.09 0.16 0.10 0.09
- Capital Investments 67 12 49 50 0.04 0.01 0.03 0.02
- Other Expenditures 1,068 0 120 120 0.58 0.00 0.06 0.06
Deficit – Surplus during the
                year-522 -2602 0 0 -0.28 -1.36 0.00 0.00
                                                     
17 Not included – the funds for pension adjustment for the users from MIA (Ministry of Internal
Affairs) in an amount of 208 million denars.WT/ACC/807/5
Page 142
BUREAU FOR EMPLOYMENT
- in million denars - input in GDP in %
1997 1998 1999
estimation200018
projections1997 1998 1999
estimation2000
projections
Total  Revenues 3,983 4,261 4,127 5,361 2.15 2.23 2.12 2.50
1. Source Revenues 1,002 977 977 1,075 0.54 0.51 0.50 0.50
- contributions from salaries 993 968 972 1,069 0.54 0.51 0.50 0.50
- other 9 9 5 6 0.00 0.00 0.00 0.00
2. Budget Revenues 2,981 3, 261 3,100 3,050 1.61 1.71 1.60 1.42
3. Other Budget Transfers 0 23 50 1,236 0.00 0.01 0.03 0.58
Total Expenditures 4,244 4,369 4,127 5,361 2,29 2,29 2,12 2,50
- Contributions for
unemployed2.284 2.074 1.730 2.340 1.23 1.09 0.89 1.09
- Contributions from health
fund887 1.135 1.345 1.392 0.48 0.59 0.69 0.65
- Contribution from pension
fund908 980 872 1.443 0.49 0.51 0.45 0.67
- Extension/Expert Services 165 180 180 186 0.09 0.09 0.09 0.09
Deficit - Surplus during the
               year-261 -108 0 0 -0.14 -0.06 0.00 0.00
                                                     
18 Not included – the funds for pension adjustment for the users from MIA (Ministry of Internal
Affairs) in an amount of 208 million denars.WT/ACC/807/5
Page 143MEASURES FOR REALIZATION OF THE MACROECONOMIC POLICY
Types of Measures
Direction Legislative Institutional Other (financing,
programmes,
education)Bearers Dynamic
1. Continuation of the
process of reconciliationof salariesLaw on Salaries Ministry of Labor and Social
PolicyDecember 1999
Decision for determination
of the highest prices ofcertain type of goods andservicesMinistry of Trade March 2000
September 2000
2. Price control over
certain types of goodsand services
Decisions on separate
goods and servicesMinistry of Trade According to the term of
maturing
3. Reconciliation of prices
of oil derivates
according to themovements of prices onthe world marketDecision for issuance of an
approval for the exit
refinery price of certain oilderivatesCommittee for establishment
of the highest prices of
certain oil derivatesAccording to the needs
4. Building up,
improvement andadoption of sub-statutory
acts for regulating the
purchase and salerelations of certain typesof energyTariff system for sale
of electric powerTariff system for sale
of heating energy
Tariff system for saleof geological andthermal energyTariff system for saleof natural gasMinistry of Economy
Ministry of Economy
Ministry of Economy
Municipalities in
cooperation with authorized
ministriesOctober 2000
April 2000
November 2000
April 2000
5. Transformation of the
organizational structureof the system for supply,transport anddistribution of naturalgasTransformation of the
JP (Public Enterprise)GAMA into AD(Share-holdingcompany) GAMAMinistry of Economy in
cooperation with authorizedministriesSecond quarter of 2000
6. Protection of producers
of certain types of
agricultural productsDecision on protective
price of a certain
agricultural product of thecrop from 2000Ministry of Trade January 2000WT/ACC/807/5
Page 144Types of Measures
Direction Legislative Institutional Other (financing,
programmes,
education)Bearers Dynamic
7. Analysis of the
production, inventories
and consumption ofcertain basic agriculturaland food productsMaterial balances for
the more important
agricultural and foodproducts in theRepublic of Macedoniafor the 2000Ministry of Development January 2000
8. Analysis of the deficit,
i.e. the surplus of basic
food products, for the
purpose of reconciliationof the offer and demandon the marketInventory balances for
the basic agricultural
and food productsMinistry of Trade January 2000
9. Limiting of the public
consumptionLaw on Limiting the
Resource Income forFinancing the Public
NeedsMinistry of Finance December 1999
10. Determination of the
income and expenditureof the BudgetThe Budget of the
Republic of Macedonia for2000Ministry of Finance December 1999
11. Law on Executing the
Budget of the Republic ofMacedonia for 2000Ministry of Finance December 1999
12. Postponement of the
implementation of theLaw on Value Added
TaxChanges and Amendments
of the Law on Value addedTaxMinistry of Finance December 1999
13. Reconciliation with the
Value Added TaxLaw on Excises Ministry of Finance First quarter of the year
14. Reconciliation of the
manner of payment andthe allocation of theassets from the tax fortemporary stayChanges and Amendments
of the Law on Taxes onTemporary StayMinistry of Economy April 2000
15. Creation of conditions
for stable incomes on the
basis of excises from oil
derivativesChanging the
Methodology for
determination of retail
sale prices of oilderivativesMinistry of Finance First quarter of the yearWT/ACC/807/5
Page 145Types of Measures
Direction Legislative Institutional Other (financing,
programmes,
education)Bearers Dynamic
16. Rationalization of the
administrationProgram for reforms in
the public
administrationMinistry of Justice First quarter
2000
17. Definition of the goals
and duties of theMonetary PolicyProjection of the
Monetary Policy in2000The National Bank of the
Republic of MacedoniaDecember 1999
18. Modernization and
strengthening of thesupervision control of
the National Bank of the
Republic of MacedoniaChanges and Amendments
of the Law on the NationalBank of the RMThe National Bank of the
Republic of MacedoniaThe beginning of 2000
19. Dynamic termination of
credit limits for thepurpose of improvingthe market of treasurybills and other securitiesDecision on Termination
of Credit LimitsThe National Bank of the
Republic of MacedoniaSecond quarter of 2000
20. Increase of the efficiency
and competitiveness of
banks and saving housesChanges and Amendments
of the Law on Banks and
Saving HousesMinistry of Finance Beginning of 2000
21. Reforms in the insurance
of saving deposits andincrease of the activitiesof the FundProgram for operation
of the Fund forinsurance of savingdepositsFund for Insurance of the
Saving DepositsThe Ministry of Finance andthe National Bank of theRepublic of MacedoniaBeginning of 2000
22. Arrangement of the
foreign exchange policy
and projection of the
balance of payment for2000Decision on the Foreign
Exchange Policy and
Projection of the balance
of payment for 2000Ministry of Development in
cooperation with the
Ministry of Finance
Ministry of TradeMinistry of Foreign AffairsAnd the National Bank ofthe Republic of MacedoniaDecember 1999
23. Arranging the Customs
OperationsNew Law on Customs Ministry of Finance in
cooperation with theCustoms Administration and
other ministriesApril 2000WT/ACC/807/5
Page 146Types of Measures
Direction Legislative Institutional Other (financing,
programmes,
education)Bearers Dynamic
24. Revision of the Customs
Tariff and its
reconciliation with theHS System of the EUNew Law on Customs
Tariff reconciled with the
HS System of the EUMinistry of Trade
Ministry of Economy
Ministry of Finance,Customs Administration andother ministriesFebruary 2000
25. Determination of closer
conditions, the mannerand terms under which
agreements may be
concluded forcompensation workswith abroadDecision on Compensation
Works with AbroadMinistry of Trade April 2000
26.  Overcoming the current
weaknesses in therealization of the free
trade agreementsChanges and
Amendments on theFree Trade Agreements
with Slovenia, Croatia
and FR YugoslaviaMinistry of Trade in
cooperation with otherrelevant ministries and the
Customs AdministrationFirst half of 2000
27. Improvement of the
tourismProgram for tourist and
informative andadvertising activitiesMinistry of Economy January 2000
28. Project for quality of
productsScientific institution During 2000
29. Protection of the
domestic productionDecision on introduction
of anti-dumping feesMinistry of Finance First half of 2000
30. Initiating greater
domestic productionDecision on determining
customs contingents
during import of raw
materials for directproduction in 2000Ministry of Finance and
Ministry of EconomyJanuary 2000
31. Arranging the systematic
regulationDecision for obtaining
conditions for import andcustoms clearance ofgoods in 2000Ministry of Finance February 2000
32. Determination of the
policy for indebtednessPreparation of strategy
for indebtednessScientific Institution During 2000
33. Financial support of the
agricultural productionProgram for initiation
of the development of
the agricultureMinistry of Agriculture,
Forestry and Water
EconomyMarch 2000WT/ACC/807/5
Page 147Types of Measures
Direction Legislative Institutional Other (financing,
programmes,
education)Bearers Dynamic
34. Provision of appropriate
health protection to
animals from contagiousdiseasesProgram for health
protectionMinistry of Agriculture,
Forestry and Water
EconomyMarch 2000
35. Program for health
protection of animalsMinistry of Agriculture,
Forestry and WaterEconomyMarch 2000
36. Prevention and providing
appropriate health
protection to plants from
diseases harmful insectsand pestsProgram for health
protection of plantsMinistry of Agriculture,
Forestry and Water
EconomyMarch 2000
37. Review of the conditions
and proposing measuresfor supervision andcontrol of the health of
domestic animalsNational Strategy of
the Republic ofMacedonia forsupervision, control
and monitoring the
health of domesticanimalsMinistry of Agriculture,
Forestry and WaterEconomyJanuary – February 2000
38. Reconciliation of the
standardization of theEU for the purpose ofexportingProgram for
stigmatizing of thecattle in the Republicof MacedoniaMinistry of Agriculture,
Forestry and WaterEconomyMay 2000
39. Initiation of the primary
production for the
purpose of decreasing
the dependence fromimportChanges and Amendments
of the Law on Foreign
Trade OperationsMinistry of Economy and
Ministry of Trade in
cooperation with other
relevant ministriesJanuary 2000
40. Termination of harmful
quarryProgram for
termination of harmfulquarryMinistry of Agriculture,
Forestry and WaterEconomyFirst quarter of 2000
41. Planting of moorlands
and protection of woodsfrom destructionProgram for planting Ministry of Agriculture,
Forestry and WaterEconomyJanuary 2000WT/ACC/807/5
Page 148Types of Measures
Direction Legislative Institutional Other (financing,
programmes,
education)Bearers Dynamic
42. Rehabilitation of the HS
in the Republic of
MacedoniaRural development ofsouth and east regions ofthe countryProgram for
Investment in
AgricultureMinistry of Agriculture,
Forestry and Water
EconomyFirst quarter of 2000
43. Planing the development
of the public
infrastructureProgram for
investments in the
public sector of the
Republic of Macedonia2000 - 2002Ministry of Development January 2000
44. Implementation of the
Law on Free EconomicZonesEstablishment of a
Directorate for FreeEconomic ZonesMinistry of Development First quarter of 2000
45. Assistance to the
inventors on a higher
professional level and
support of the process oftransferring the newscientific knowledge andtechnologies in thenewly established small
and medium enterprisesEstablishment of
Innovation Centers and
Technological ParksMinistry of Development
Industrial Property
Protection OfficeDuring 2000
46. Greater protection of the
rights on industrial
property and greaterapplication of patentsand industrial design inpracticeChanges and Amendments
of the Law on Protection
of Industrial PropertyRightsEstablishment of a
Center for Technological
monitoring, center forpromotions of theinnovation activitiesMinistry of Development
Industrial Property
Protection OfficeDuring 2000
47. More aggressive
promotion of the country
and building the
country's image as agood region forinvestmentsDevelopment of the
Department for
promotion of
investments in the framesof the Ministry ofDevelopment into aCenter for promotion of
investmentsMinistry of Development First half of 2000WT/ACC/807/5
Page 149Types of Measures
Direction Legislative Institutional Other (financing,
programmes,
education)Bearers Dynamic
48. Revitalization of
industrial capacities,
introduction of newtechnologies,cooperation with foreigninstitutions, centers and
foundations in executing
the investment projectsEstablishment of a
Department for industrial
policy in the frames ofthe Ministry ofDevelopmentMinistry of Development First half of 2000
49. Encircling the legislation
related to the trade withsecuritiesChanges and Amendments
of the Law on TradeCompanies and the Law onSecuritiesMinistry of Finance February – March 2000
50. New legislation which
will anticipateestablishment of
Macedonian Investment
Funds with headquartersabroad andestablishment ofdomestic investmentfunds (investment funds
of closed and open type
and combined)Law o Investment Funds Establishment of
Investment Fund withheadquarters abroadMinistry of Finance The Law by February –
March
By the end of 2000
51. Capitalization of the
Fund and its functioningas a financial inter-mediatorProgram for training of
professionals who willmanage with the FundMinistry of Finance February – March 2000
52. Preparation of a Program
for education of the
population in the domain
of share-holdingEducation Program Privatization Agency In continuation
53. Various types of training
programmes formanagers shall besuggested, encouraged,stimulated and
financially supported
from abroadProgram for training of
managersPrivatization Agency In continuation during the
whole yearWT/ACC/807/5
Page 150Types of Measures
Direction Legislative Institutional Other (financing,
programmes,
education)Bearers Dynamic
54. Removal of all negative
legal regulations in the
legislation referring tothe labourChanges and Amendments
of the Law on
Employment and Securityin Case of Unemployment,etc.Ministry of Labor and Social
PolicyThe first three months
55. Stimulation and
improvement of theforms of employment of
registered
unemploymentNational Strategy
"National Agreement"The Government, Union and
Chamber of Commerce ofthe MacedoniaIn 2000
56. Providing social security
to beneficiaries of socialprotectionLaw on Social Protection Ministry of Labor and Social
PolicyBeginning of 2000
57. Decision on the basic
criteria, the manner andconditions for obtaining
social assistanceMinistry of Labor and Social
PolicyBeginning of 2000
58. Continuation with the
reforms in the Pension
SectorLaw on Capitally Financed
Pension System
Law on AdministrativeRetirementMinistry of Labor and Social
Policy
Ministry of JusticeMinistry of HealthEnd of 2000
First quarter of 2000
59. Continuation with the
reforms in the HealthSectorLaw on Health Protection
Law on Health InsuranceContinuation with the
Project for Transitionin the Health Sector –World BankMinistry of Health Beginning of 2000
End of 2000
60. Material assistance to
unemployed persons –
Technological surplus incompanies owned by thestateChanges and Amendments
of the Law on
Employment and insurancein case of unemploymentProject for emergency
social assistance
financed by the WorldBankBeginning of 2000
Continuation
61. Adoption of new laws
and improvement of thecurrent legislationLaw Against Corruption Ministry of Finance First half of 2000
Law Against Money
WashingMinistry of Finance First half of 2000
Law on Foreign Exchange
OperationsMinistry of Finance First half of 2000
Law on Stock Reserves Ministry of Economy First half of 2000WT/ACC/807/5
Page 151Types of Measures
Direction Legislative Institutional Other (financing,
programmes,
education)Bearers Dynamic
Law on Micro Economy Ministry of Economy First half of 2000
Law on Initiation of the
Technological
DevelopmentMinistry of Economy First half of 2000
Law on Mortgages Ministry of Finance First half of 2000
Law on Profit of
CorporationsMinistry of Finance First half of 2000
Law on Tax
AdministrationMinistry of Finance First half of 2000
Law Against Monopolies Ministry of Justice First half of 2000
Changes and Amendments
of the Law on ExecutiveProcedureMinistry of Finance First half of 2000
Laws from the field of
taxesMinistry of Finance First half of 2000
Law on Bankruptcy Ministry of Finance First half of 2000
Law on Denationalization Ministry of Finance First half of 2000
Law on Agricultural Land Ministry of Construction and
Urban PlanningFirst half of 2000
Law on Construction Land Ministry of Finance First half of 2000
Law on National Registries Ministry of Finance First half of 2000
Law on Undertaking, Ministry of Finance First half of 2000WT/ACC/807/5
Page 152
ATTACHMENT 2
PRIVATIZATION:  STATUS REPORT AS OF 31 DECEMBER 199919
Sector structure at the beginning of privatization
Sector Number of companies Number of employees Equity in DM
Manufacturing 403 149,174 2,153,582,302
Construction 117 33,499 231,190,832
Trade 385 20,773 494,080,941
Transport & Traffic 63 12,080 132,028,952
Finance & Services 120 4,417 51,334,955
Crafts 58 3,017 18,339,333
Catering & Tourism 70 5,890 218,710,606
TOTAL 1,216 228,850 3,299,267,922
(Statistics provided by the Payment Operations Service – POS, 31 December 1994)
Privatization processes in progress by 31 December 1999
Sector Number of companies Number of employees Equity in DM
Manufacturing 57 12,201 168,098,149
Agriculture 55 9,150 141,940,070
Construction 9 326 1,230,830
Trade 29 2,088 53,396,946
Transport & Traffic 5 724 9,920,492
Finance & Services 13 296 4,015,088
Craft 1 75 360,000
Catering & Tourism 12 1,523 60,056,299
TOTAL 181 26,383 439,017,874
Privatization transactions finished by 31 December 1999
Sector Number of companies Number of employees Equity in DM
Manufacturing 451 131,442 2,698,418,738
Agriculture 346 15,425 266,467,576
Construction 112 31,800 238,855,458
Trade 328 17,106 469,880,413
Transport & Traffic 50 7,653 72,539,536
Finance & Services 101 6,742 227,789,165
Craft 52 2,300 30,648,494
Catering & Tourism 48 3,483 133,799,676
TOTAL 1,488 215,951 4,138,399,055
                                                     
19 The tables in the status report are also represented in graphic format and are available from the
Secretariat in electronic format upon request from accessions@wto.org.WT/ACC/807/5
Page 153
Progress of privatization – number of companies by sectors
Sector Privatized In process To be privatized
Manufacturing 451 57 -
Agriculture 346 55 -
Construction 112 9 -
Trade 328 29 28
Transport & Traffic 50 5 8
Finance & Services 101 13 6
Craft 52 1 5
Catering & Tourism 48 12 10
TOTAL 1,488 181 57
Progress of privatization – number of employees by sectors
Sector Privatized In process To be privatized
Manufacturing 131,442 12,201 5,531
Agriculture 15,425 9,150 -
Construction 31,800 326 1,373
Trade 17,106 2,088 1,579
Transport & Traffic 7,653 724 3,703
Finance & Services 6,742 296 -
Craft 2,300 75 642
Catering & Tourism 3,483 1,523 884
TOTAL 215,951 26,383 13,712
Progress of privatization - equity
(equity in DM)
Sector Privatized In process To be privatized
Manufacturing 2,698,418,738 168,098,149 -
Agriculture 266,467,576 141,940,070 -
Construction 238,855,458 1,230,830 -
Trade 469,880,413 53,396,946 -
Transport & Traffic 72,539,536 9,920,492 49,568,924
Finance & Services 227,789,165 4,015,088 -
Craft 30,648,494 360,000 -
Catering & Tourism 133,799,676 60,056,299 24,854,631
TOTAL 4,138,399,055 439,017,874 74,423,555WT/ACC/807/5
Page 154
Number of privatized companies by sectors
Sector Privatized
Manufacturing 451
Agriculture 346
Construction 112
Trade 328
Transport & Traffic 50
Finance & Services 101
Craft 52
Catering & Tourism 48
TOTAL 1,488
Number of privatized companies by model of privatization
Model Companies Employees Equity in DM
Old law 66 11,522 114,471,007
EBO 384 17,738 155,455,264
Sale of Ideal Part 67 15,812 364,062,157
MBO 247 72,720 1,391,121,939
Leasing 4 217 1,872,951
Additional capital 20 6,924 137,377,989
Residual 28 14,717 306,664,921
D/E conversion 75 18,656 552,297,526
Foreign equity 156 1,933 52,629,791
Private equity 128 5,143 57,762,915
Liquidations 164 984 -
Buy-out 149 49,585 1,004,682,596
TOTAL 1,488 215,951 4,138,399,055
Employees in privatized companies by model
Model Employees
Old law 11,522
EBO 17,738
Sale of Ideal Part 15,812
MBO 72,720
Leasing 217
Additional capital 6,924
Residual 14,717
D/E conversion 18,656
Foreign equity 1,933
Private equity 5,143
Liquidations 984
Buy-out 49,585
TOTAL 215,951WT/ACC/807/5
Page 155
Equity in privatized companies – by model
Model Equity in DM
Old law 114,471,007
EBO 155,455,264
Sale of Ideal Part 364,062,157
MBO 1,391,121,939
Leasing 1,872,951
Additional capital 137,377,989
Residual 306,664,921
D/E conversion 552,297,526
Foreign equity 52,629,791
Private equity 57,762,915
Liquidations -
Buy-out 1,004,682,596
TOTAL 4,138,399,055
Number of privatized companies – by size
Size Number of companies Equity in DM
Large 229 2,992,392,056
Medium 282 802,500,024
Small 977 343,506,976
TOTAL 1,488 4,138,399,055WT/ACC/807/5
Page 156
ATTACHMENT 3
Regulations on the Quality of Agricultural and Food Products
I. REGULATIONS ON BEVERAGES
1. Regulation on the Quality of Wine (Official Gazette of SFRJ no. 17/81, 14/89);
2. Regulation on Alcohol Drinks (Official Gazette of SFRJ no. 16/88, 63/88);
3. Regulation on Alcohol Drinks and Soft Beverages, Ice and Vinegar (Official Gazette
of SFRJ no. 31/63, 25/65, 45/71, 48/71, 59 /72, 41/73, 25/75, 18/77, 13/78, 53/78,
2/82, 34/82, 52/83, 58/83, 16/88, 24/89, 91/91);
4. Regulation on the Quality of Refreshing Soft Drinks (Official Gazette of SFRJ no.
52/83, 56/83);
5. Regulation on the Quality of Beer (Official Gazette of SFRJ no. 91/91);
6. Regulation on the Quality of Natural Mineral Water (Official Gazette of SFRJ no.
58/78);
7. Regulation on Sampling Methods and Chemical and Physical Analyses of Alcohol
Drinks (Official Gazette of SFRJ no. 70/87);
II. REGULATIONS ON COFFEE
8. Regulation on the Quality of Coffee and Coffee Surrogates, Tea, Spices, Yeast,
Baking Powder, Pudding Powder, Diet Products and Food Additives (Official Gazetteof SFRJ no. 22/63, 2/64, 25/65, 50/66, 10/67, 54 /67, 15/68, 53/69, 27 /71, 8/75, 58/77,
60/77, 13/78, 20/80, 41/80, 45/81, 52/86, 33/89);
9. Regulation on the Quality of Coffee, Coffee Products and Coffee Surrogates (Official
Gazette of SFRJ no. 55/89, 57/89, 36/91);
III. REGULATIONS ON WHEAT AND BAKERY PRODUCTS
10. Regulation on the Quality of Wheat, Mill and Bakery Products, Pasta and Fast Frozen
Dough (Official Gazette of SFRJ no. 53/83, 57/88);
11. Regulation on the Quality of Yeast (Official Gazette of SFRJ no. 32/87);12. Regulation on the Quality of Biscuits and Alike Products (Official Gazette of SFRJ
no. 68/78, 63/79);
13. Regulation on Sampling Methods and Chemical and Physical Analyses of the Quality
of Wheat, Mill and Bakery Products (Official Gazette of SFRJ no. 74/88);
14. Directive on the Manner of Milling Wheat (Official Gazette of SFRJ no. 62/82, 10/83,
50/87);
IV. REGULATIONS ON EDIBLE OIL
15. Regulation on the Quality of Vegetable Edible Oils, Margarine, Mayonnaise, Sugar
and Other Saccharids and Honey (Official Gazette of SFRJ no. 19/63, 2/64, 1/67,
27/71,59/77, 13/78, 54/76, 59/77);
16.  Regulation on the Quality of Edible Oils and Vegetable Fats, Margarine, Mayonnaise
and Alike Products (Official Gazette of SFRJ no.27/85, 51/91);
17. Regulation on the Quality of Edible Olive Oil and Mixed Olive Oil (Official Gazette
of SFRJ no. 51/91)WT/ACC/807/5
Page 157
V. REGULATIONS ON MILK
18. Regulation on the Quality of Milk, Dairy Products, Ferments and Pure Culture Media
(Official Gazette of SFRJ no. 51/82, 39/89);
19. Regulation on Sampling Methods and Chemical and Physical Analyses of Milk and
Dairy Products (Official Gazette of SFRJ no. 32/83);
VI. REGULATIONS ON EGGS
20. Regulation on the Quality of Eggs and Egg Products (Official Gazette of SFRJ no.
55/89);
21. Regulation on the Quality Inspection Methods for Eggs and Egg Products (Official
Gazette of SFRJ no.72/87).
VII. REGULATIONS ON HONEY
22. Regulation on the Quality of Honey and other Bee Products and the Quality Control
Methods for Honey and other Bee Products (Official Gazette of SFRJ no. 4/85)
VIII. REGULATIONS ON FOOD ADDITIVES
23. Regulation on the Quality of Food Additives (Official Gazette of SFRJ no. 39/89,
22/90);
IX. REGULATIONS ON COCOA
24. Regulation on the Quality of Cocoa Products, Products Similar to Chocolate, Cream
Products and Bonbons (Official Gazette of SFRJ no. 23/88, 63/88, 36/89, 21/90);
25. Regulation on Sampling Methods and Chemical and Physical Analyses of Cocoa
Beans, Cocoa Products, Products Similar to Chocolate, Bonbons, Cream Products,
Biscuits and Products Similar to Biscuits (Official Gazette of SFRJ no. 41/87);
X. REGULATIONS ON PROTEINS
26. Regulation on the Quality of Protein Products and Mixture of Protein Products for the
Food Industry (Official Gazette of SFRJ no. 41/85);
27. Regulation on Sampling Methods and Chemical and Physical Analyses of Protein
Products for the Food Industry (Official Gazette of SFRJ no. 41/85);
XI. REGUALTIONS ON MEAT
28. Regulation on the Quality of Slaughtered Pigs and Classification of Pork Meat
(Official Gazette of SFRJ no. 2/85, 12/85, 24/86);
29. Regulation on the Quality of Poultry Meat (Official Gazette of SFRJ no. 1/81, 51/88);
30. Regulation on the Quality of Slaughtered Live-stock and Game Meat (Official
Gazette of SFRJ no. 34/74, 26/75, 13/87)
31. Regulation on the Quality of Meat Products (Official Gazette of SFRJ no. 29/74,
13/78, 41/80);
32. Regulation on the Quality of Poultry Meat Products (Official Gazette of SFRJ no.
55/91);WT/ACC/807/5
Page 158
XII. REGULATIONS ON FISH
33. Regulation on the Quality of Fish, Shellfish, Sea Urchin, Frogs, Turtles, Snails and
Products Thereof (Official Gazette of SFRJ no. 65/79, 48/84);
XIII. REGULATIONS ON SPICES
34. Regulation on the Quality of Spices, Spice Extracts and Spice Mixtures (Official
Gazette of SFRJ no. 4/85, 84/87);
XIV. REGULATIONS ON FRUIT
35. Regulation on the Quality of Fruits, Vegetables and Mushrooms (Official Gazette of
SFRJ no. 29/79, 53/87)
36. Regulation on the Quality of Fruits, Vegetable and Mushroom Products, and Pectine
Preparations (Official Gazette of SFRJ no. 1/79, 20/82, 39/89, 74/90, 46/91);
37. Regulation on the Sampling Methods and Chemical and Physical Analyses of Fruit
and Vegetable Products for the Purpose of Quality Control (Official Gazette of SFRJno. 29/83)
38. Regulation on the Quality of Edible Mushrooms and Products of Edible Mushrooms
(Official Gazette of SFRJ no. 46/91, 64/91);
XV. REGULATIONS ON VINEGAR
39. Regulation on the Quality of Acetic Acid and Diluted Acetic Acid (Official Gazette of
SFRJ no. 24/89);
40. Regulation on Sampling Methods and Chemical and Physical Analyses of Acetic
Acid and Diluted Acetic Acid for the Purpose of Quality Control (Official Gazette ofSFRJ no. 26/89);
XVI. REGULATIONS ON SOUPS
41. Regulation on the Quality of Soups, Soup Concentrate, Sauces and Food Additives
(Official Gazette of SFRJ no. 5/82, 58/85)
XVII. REGULATIONS ON FORAGE
42. Regulation on Forage (Official Gazette of SFRJ no. 15/89, 54/90);
43. Regulation on Sampling Methods and Chemical, Physical and Microbiological
Analyses of Forage (Official Gazette of SFRJ no. 15/87);WT/ACC/807/5
Page 159
ATTACHMENT 4
List of Regulations under the Ministry of Health Pertaining to Health Safety of Food
1. Law on Health Safety of Foodstuffs and General Use Articles (official Gazette of SFRY
No. 53/91 and Official Gazette of RM No. 15/95)
1.1 Regulation on Conditions for Health Safety of the General Use Articles that May Be
Released for Trade (Official Gazette of SFRY No. 26/83, 56/86)
1.2 Regulation on the Sanitary Safety of Drinking Water (Official Gazette of SFRY
No. 33/87)
1.3 Regulation on Sampling Methods and the Methods for Laboratory Analysis of
Drinking Water (Official Gazette of SFRY No. 33/87)
1.4 Regulation on the Conditions Regarding the Microbiological Safety of Foodstuffs
Released for Trade (Official Gazette of SFRY No. 45/83)
1.5 Regulation on the Conditions Regarding the Health Safety of Diet Products That May
Be Released for Trade (Official Gazette of SFRY No. 4/85)
1.6 Regulation on Quantity of Pesticides and Other Poisonous Substances, Hormones,
Antibiotics and Micotoxins that May be Present in the Foodstuffs (Official Gazette of
SFRY No. 59/83, 79/87)
1.7 Instruction on the Sampling Methods for Conducting Analyses and Super-analyses of
Foodstuffs and General Use articles (Official Gazette of SFRY No. 60/78)
1.8 Decision on Determining Health and Other Organizations that Meet the Requirements
for Conducting Super-analyses of Foodstuffs and General Use Articles (Official
Gazette of SFRY No. 39/93)
1.9 Regulation on the Methods for Determining pH Value and Quantity of Toxic Metals
and Non-metals in the Products for Personal Hygiene, Care and Beauty of Face and
Body, and on Determining the Microbiological Safety Thereof (Official Gazette
SFRY No. 46/83)
2. Law on Health Control of Foodstuffs and General Use Articles (Official Gazette of
SFRY No. 29/73, 37/86 and Official Gazette of RM No. 15/95)
2.1 Regulation on the General Minimum Technical Requirements Regarding the
Facilities, Machines and Equipment for Production, Storage, Keeping and Trade fo
Goods and Services (Official Gazette of SRM No. 17/79)
2.2 Regulation on the Conditions and the Manner for Examining Products and General
Use Articles in the Course of Their Production and the Manner of Keeping Records
for the Conducted Examinations (O fficial Gazette of SRM No. 20/76)
2.3 Regulation on Courses, the Way in Which They Shall Be Delivered and the Manner
in Which the Acquired Knowledge Shall Be Checked (Official Gazette of SRM
No. 20/76)WT/ACC/807/5
Page 160
ATTACHMENT 5
Bilateral Agreements on Protection of Investments
1. Agreement between the Government of the Republic of Macedonia and the Government of
the Republic of Croatia for Encouraging and Mutual Protection of Investments, 6 July 1994.
2. Agreement between the Republic of Macedonia and the Republic of Slovenia for Mutual
Protection and Encouraging of Investments, 5 July 1996.
3. Agreement between the Government of the Republic of Macedonia and the Federal
Government of the Federal Republic of Yugoslavia for Mutual Encouraging and Protection of
Investments, 4 September 1996.
4. Agreement between the Republic of Macedonia and the Republic of Turkey for Encouraging
and Mutual Protection of Investments, 14 July 1995.
5. Agreement between the Government of the Republic of Macedonia  and the Federal Republic
of Germany for Mutual Encouraging and Protection of Mutual Investments,
10 September 1996.
6. Agreement between the Government of the Republic of Macedonia and the Federal Council
of Switzerland for Mutual Encouraging and Protection of Investments, 26 September 1996.
7. Agreement between the Government of the Republic of Macedonia and the Government of
the Republic of Poland for Encouraging and Mutual Protection of Investments,
28 November 1996.
8. Agreement between the Government of the Republic of Macedonia and the Government of
Italy for Encouraging and Mutual Protection of Investments, 26 February 1997.
9. Agreement between the Government of the Republic of Macedonia and the People’s Republic
of China for Encouraging and Mutual Protection of Investments, 9 June 1997.
10. Agreement between the Government of the Republic of Macedonia and the Russian
Federation  for Encouraging and Mutual Protection of Investments, 21 October 1997.
11. Agreement between the Government of the Republic of Macedonia and the Democratic
People’s Republic of Korea for  Encouraging and Mutual Protection of Investments,
15 December 1997.
12. Agreement between the Government of the Republic of Macedonia and the Government of
the Republic of Albania for Encouraging and Mutual Protection of Investments,4 December 1997.
13. Agreement between the Government of the Republic of Macedonia and the Republic of
France for Encouraging and Mutual Protection of Investments, 29 January 1998.
14. Agreement between the Government of the Republic of Macedonia and the Government of
Ukraine for Encouraging and Mutual Protection of Investments, 2 March 1998.
15. Agreement between the Government of the Republic of Macedonia and the Government of
Sweden for Encouraging and Mutual Protection of Investments, 7 May 1998.WT/ACC/807/5
Page 161
16. Agreement between the Government of the Republic of Macedonia and the Government of
Malaysia for Encouraging and Mutual Protection of Investments, 11 November 1997.
17. Agreement between the Government of the Republic of Macedonia  and Government of
Netherlands for Encouraging and Mutual Protection of Investments, 7 July 1998.
18. Agreement between the Government of the Republic of Macedonia and the Government of
Belgium for Encouraging and Mutual Protection of Investments, 16 February 1999.
19. Agreement between the Government of the Republic of Macedonia  and the Government of
the Republic of Bulgaria Encouraging and Mutual Protection of Investments,
22 February 1999.
20. Agreement between the Government of the Republic of Macedonia and the Government of
the Republic of China (Taiwan) for Encouraging and Mutual Protection of Investments,
9 June 1999.
21. Agreement between the Government of the Republic of Macedonia and the Government of
Egypt for Encouraging and Mutual Protection of Investments, 22 November 1999.
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