July 2001

 Inside this Issue...

 Eye on Southeast Europe 2

 Commercial Opportunities 4

 Around the Region 6

 Calendar of Events 7

 Special Feature: Romania 8

Opportunities for U.S. Environmental Firms

in Bulgaria

by Stanislava Dimitrova, Commercial Specialist,

U.S. Commercial Service, Sofia, Bulgaria

Bulgaria is a promising and yet relatively untapped market

for U.S. environmental technology. Demand for

environmental technology is driven by both internal and

external factors. After years of environmental neglect,

environmental awareness is growing rapidly in this

Southeast European country of 8 million. Bulgarians are

becoming increasingly concerned about pollution and its

impact on public health and the natural environment. In

addition, in anticipation of the country’s eventual

accession to the European Union, Bulgaria must undertake

massive environmental cleanup efforts and implement

stringent EU environmental standards. Bulgaria will need

to import almost all of the technology for this, and U.S.

companies that possess world-class, competitive

technology, equipment, services, and systems will be best

poised to benefit from these opportunities.

Market Analysis

In 2000, the Bulgarian environmental technology market

totaled $89.5 million of which 80 percent was imported.

Imports from the United States accounted for less than 10

percent of the total market and were worth $9 million.

Estimates put the 2001 environmental technology market at

$77 million and $117 million in 2002.

Some U.S. companies have already found success in the

Bulgarian market. The price, quality, technological

leadership and reputations of U.S. companies are often

viewed in Bulgaria as effective counterweights to pressure

from European Union (EU) companies to “buy European.”

The best prospects for U.S. environmental firms are: (1)

energy saving equipment used in municipal or

manufacturing processes; (2) recycling and waste

utilization technology; (3) wastewater and drinking water

treatment equipment including technology leaks in

drinking water systems; (4) solid and hazardous waste

collection, disposal, and treatment; (5) renewable energy

technology; (6) clean production techniques.

Drinking Water and Waste Water Management

Water usage is about 120 liters per person per day. Per

capita consumption may show a downward trend because

of the rising price of water and improved accuracy of

measurement.

Bulgaria’s municipal drinking water systems are worn and

are in need of a major overhaul. About 70 percent of the

pipes are made from asbestos and concrete and are over 20

years old. Management and regulatory oversight of the

system is inadequate, and measuring equipment is

outdated. These factors combined explain why 50 percent

of all water pumped through the system is lost before it

reaches the consumer.

There are 277 Bulgarian cities, towns and villages with

sewerage systems, which generate 1,152,198,000 cubic

meters of wastewater annually. Over 17 percent of

Bulgaria’s 7,718 km of sewer systems need to be replaced

and many of the country’s sewer systems were constructed

in the 1960s and do not have the capacity to handle current

volumes of wastewater. Moreover, while 70.2 percent of

cities and towns have sewerage systems only 2.1 percent of

villages have a sewer system. In almost all the villages,

wastewater is discharged using short drains to cesspits and

septic tanks.

The Bulgarian government has identified the following

objectives for improving the drinking water and waste water

systems: (1) improve the efficiency of both systems and

achieve better water quality; (2) improve the management of

water supply and sewer network; (3) upgrade the

technology in both systems; (4) replace worn-out sections

of the sewer system and complete the construction of the

sewer network in the larger towns and cities; (5) enhance

(Continued on page 3)

Central and Eastern Europe

Commercial Update

A publication of the U.S. Department of Commerce, International Trade Administration, Central and Eastern

Europe Business Infromation Center in cooperation with the U.S. Agency for Interntional Development
2 Central and Eastern Europe Commercial Update

Eye on Southeast Europe

Central and Eastern European

Commercial Update

The Central and Eastern European Commercial

Update is produced by the Central and Eastern Europe

Business Information Center (CEEBIC). For more

information or to subscribe contact CEEBIC at: phone

(202) 482-2645, fax (202) 482-3898, or e-mail

ceebic@ita.doc.gov.

Director: Jay Burgess

Associate Director: Jennifer Gothard

Editor: Michael Rogers

International Trade

Specialists: Andrea Lupo, Michael

Rogers, Silvia Savich

Webmaster: Gedlom Tesfazion

Contributors: Jonathan Kimball, Laurie

Molnar, Melissa Wilson

U.S. Government Perspectives on Croatia

Remarks Delivered by U.S. Department of Commerce

Deputy Assistant Secretary for Europe, Charles Ludolph

at the “Investment Opportunities in Croatia” Conference,

Hotel Inter-Continental, Zagreb, Croatia, May 22, 2001

It is the Department of Commerce’s great pleasure to

participate in the organization of this conference and to

further our cooperation with the Croatian government to

attract more U.S. companies to Croatia. We believe that the

conditions are right for U.S. companies to take a serious

look at the Croatian market.

In my short remarks today, I will highlight several of

Croatia’s recent foreign policy achievements that have

important implications for your business in Croatia. I will

also describe some of the Commerce Department’s programs to help you pursue your projects in Croatia.

First, though, I would like to say a little about what U.S.

companies are already doing in the Croatian market.

U.S. Companies in Croatia

U.S. companies already play an important role in the

Croatian economy. Many U.S. companies have entered this

market during the past several years. I would like to name

just a few. Western Wireless is offering telecommunication

services. ISKON is a fast-growing internet services

provider. Parsons is rehabilitating a power plant in central

Croatia. Hilton is renovating a hotel in the beautiful resort

town of Dubrovnik. Coca Cola has had a longstanding

investment in a bottling facility here. A strong, core group

of U.S. companies have established a presence and formed

an American Chamber of Commerce in Croatia.

Yet, there is much more that US companies could do in

Croatia. U.S. exporters have not penetrated this market to

the extent that their Italian or Austrian counterparts have.

U.S. companies could bring services and management

expertise to the vibrant Croatian tourism sector. More U.S.

companies could become involved in the privatization

process in Croatia. We hope that during this conference

you learn more about some of the specific opportunities

worth pursuing in Croatia right now.

Croatian Achievements: WTO Membership and EU

Accesssion

The Croatian Government has two important diplomatic

achievements to its credit that are very significant for U.S.

companies looking to expand their business in Croatia:

becoming a member of the WTO and launching the

process of signing a Stabilization and Association

Agreement with the European Union.

Croatia became a full member of the WTO last year. The

requirements for WTO membership are stringent and touch

upon areas as wide-ranging as tariff rates, the ability of

foreign companies to provide services, and the protection

of intellectual property rights. This is not to say that

Croatia or any WTO member is perfect in all of these areas.

But as a WTO member, Croatia is now obligated to adhere

to an internationally-accepted set of rules in all of these

areas, helping to create a solid framework for you to do

business here.

Last year, Croatia also began the process of negotiating a

Stabilization and Association Agreement with the

European Union. Signing this agreement puts Croatia on

the road to EU accession and eventual economic

integration into an expanding Europe. I would like to

stress that many of the trade and investment implications

of EU membership will be felt by the private sector before

Croatia becomes a full member of the EU because the

Croatian Government has already begun harmonizing its

laws and regulations with those of the EU.

(Continued on page 6)
Central and Eastern Europe Commercial Update 3

the sewer system in areas near vulnerable ecosystems; (6)

construct 104 waste water treatment plants for cities and

towns with populations over 10,000; (7) install leak

detection equipment in the drinking water system.

Energy Efficiency

Bulgaria uses two to five times as much energy per dollar

of GDP as the European Union. There is, therefore,

substantial room for improvement in both commercial and

consumer energy use. Energy-efficient principles must also

be incorporated into the construction, transportation, and

agriculture sectors.

Various studies have demonstrated that Bulgaria has a

number of options for renewable energy. However, there is

as of yet no consensus on which technologies should be

used. Nevertheless upon EU accession, Bulgaria will be

required to generate eight percent of its total energy from

renewable sources. Current EU member states are working

towards the goal of generating 50 percent of their power

from renewable sources by 2050. The Bulgarian Energy

Efficiency Agency is currently working on a national

strategy for energy efficiency. The report is scheduled for

release by the end the year.

Waste Management

Bulgaria utilizes only landfills for municipal waste disposal.

The landfills account for 99 percent of all collected waste.

According to a 1996 survey, there are 682 landfills in

Bulgaria. With few exceptions, these landfills do not

comply with current national standards. About 300,000

cubic meters of construction waste are collected in

specialized landfills for construction waste. Only a small

amount of construction waste is dumped in municipal

landfills.

The average annual amount of hazardous waste generated

in Bulgaria within recent years is about 1.3 million tons, 40

percent of which is composed of the 11 most common

types of waste — pesticides, waste oils, sludge from

industrial waste water, and hospital waste.

The main method for hazardous waste treatment is

disposal. Seventy-seven percent of the total amount of

hazardous waste is dumped in landfills on the site of an

industrial enterprise. These landfills have, for the most

part, exhausted their capacity and do not comply with

current legislation. There are several incinerating

installations but they can just meet the needs of the

companies that have installed them for their own waste.

Installations for hospital waste incineration have been built

in some of the big cities. However, in most cases, they do

not comply with modern requirements for installations of

this type and they do not treat waste from other hospital

and clinics in their respective region.

The government priorities in this area are: (1) the reduction

of waste generation; (2) the development of recycling

programs; (3) improved collection and transport of waste;

(4) implementation of environmentally sound waste

disposal techniques; (5) reducing risk of contamination

from previously disposed waste; (5) environmental

remediation in regions surrounding closed uranium

facilities.

Air Pollution Control

In the short to medium term, the Bulgarian government

plans to undertake a number of projects to reduce harmful

emissions at combustion power plants and industrial

plants. The plans include construction of a number of

desulfurization installations and bringing on-line the

desulfurization facilities at the Maritza East 2 thermal power

plant. Plans are also underway to switch to coal with a

lower sulfur content, to increase the use of natural gas, and

to increase the production of unleaded gasoline. To

undertake these plans power plants and oil refineries must

be retooled.

Key Contacts

To learn more about commercial opportunities in Bulgaria,

contact the Central and Eastern Europe Business

Information Center (CEEBIC) at Tel.: (202) 482-2645, Fax

(202) 482-3898, or E-mail: ceebic@ita.doc.gov.

For more information on environmental technology market

in Bulgaria, contact U.S. Commercial Service Sofia, Bulgaria

at Tel.: + 359 (2) 963-4062, Fax: +359 (2) 980-6850, or e-mail:

sofia.office.box@mail.doc.gov.

 Bulgaria (Continued from page 1)
4 Central and Eastern Europe Commercial Update

Central and Eastern Europe Commercial Opportunities

Bulgaria

Convoy, a leading manufacturer and distributor of

cosmetics and household products in Bulgaria, was

established 1989. It imports a wide range of goods from

Greece, Italy, Germany and China including cosmetics, hair

products, sponges and mops, cleaners and detergents, and

plastic goods. Sales projections for 2001 are approximately

$5 million. This includes export sales to Russia. Convoy

has a modern factory of 50,000 sq.m. and 200 employees.

Convoy is expanding its business and therefore is

searching for U.S. suppliers of the above-mentioned

products.

Contact: Maria Donkova

Convoy

Novi Iskar - Katina

Sofia, Bulgaria

Tel.: +359 (2) 936-0530, 936-0702

Fax: +359 (2) 936-0937

E-mail: convoy@ibn.bg

www.convoy-world.com

Submitted by CEEBIC trade specialist Georgi Peev

Kosovo (“FRY”)

Albatros, a major food processing and packaging company

with 10 years experience and over $8 million in annual sales

including exports to FYR Macedonia, Albania, FR Yugoslavia,

and Croatia is seeking to purchase machinery used in the

production and packaging of pastry, bread, and pasta. The

total value of the purchase will be between $10-12 million and

is needed by December 2001.

Contact: Albatros

Vellezrit Frasheri str. No. 11/6,

Pristina, Kosovo

Tel.: +377 (0) 44 179 892, +377 (0) 44 115 616

Fax: +38 381 81 667

E-mail: Bucii@hotmail.com

Submitted by CEEBIC trade specialist Luan Dalipi

FYR Macedonia

Isen Komerc is the largest manufacturer of pasta in FYR

Macedonia. It supplies pasta to the domestic market, as

well as to Albania and Kosovo. Isen Komerc is seeking to

expand its export of pasta to other countries of Central and

Eastern Europe. In order to increase its production Isen

Komerc is seeking 1000 tons of durum semolina flour. Flour

can be packaged in either 25kg or 50kg bags, net weight.

The flour should meet the following specifications:

moisture content: maximum 15 percent

protein content: maximum 12 percent

ash content: maximum .80 percent

wet glue: maximum 23 percent

content of yellow pigment: 4.5 mg/kg dry material

number of dark spots: maximum 100/dm2

granularity over:

450um 12 percent

365 um 33 percent

265 um 23.5 percent

200 um 12.7 percent

under 200 um 18.8 percent

Contact: Jennifer Gothard

Central and Eastern Europe Business Information Center

U.S. Department of Commerce

1401 Constitution Ave NW

Washington, DC 20230

Tel.: 202-482-2645

Fax: 202-482-3898

E-mail: ceebic@ita.doc.gov

Submitted by CEEBIC trade specialist Arben Gega

Romania

Agromec Buzias seeks strategic partner to invest in natural

mineral water project. Agromec is licensed to drill and

exploit natural mineral water sources in Buzias, Western

Romania. Preliminary lab results indicate high therapeutical

quality of the mineral water in the region. Agromec is

looking for equity partner to contribute know-how and upto-date equipment for the implementation of this project.

For additional information, please contact

ceebic@ita.doc.gov.

Alfiscom Intermed of Cluj-Napoca is an importer and

distributor of medicine, medical equipment, and single use

materials. Its client base includes over 300 hospitals and

more than half of the 2,800 licensed pharmacies in Romania.

Alfiscom has recently started medicine production and is

seeking U.S. partners to expand production capacity. The

company is looking for partners to facilitate technology

transfer, provide active substance, and / or supply

production equipment. Among several upcoming projects,

Alfiscom is also interested to establish a drugstore chain in

Romania. For additional information, please contact

ceebic@ita.doc.gov.

For more opportunities in Romania, go to page 10.
Central and Eastern Europe Commercial Update 5

 Romania’s Medical Equipment Market

by Doina Brancusi, Commercial Specialist, U.S.

Commercial Service, Bucharest, Romania

The Romanian medical market equipment has been growing

steadily in parallel with the country’ s efforts to improve

the quality of the national health care system, which has

been affected by the lack capital and the relative low

quality of medical equipment. The strategy for medical

equipment rehabilitation adopted by the Ministry of Health

over the past few years has focused on upgrading and

fixing the existing equipment, replacing obsolete

equipment, and on purchasing new and modern equipment.

Domestic production of medical equipment is limited and

products are of substandard quality. Germany, Austria, and

Italy dominate the Romanian medical equipment market.

U.S. producers are also present and their share of the

market is growing. There is strong interest among Romanian producers in attracting foreign capital and U.S. firms

should consider the expansion of their position on the

Romanian market through distributors, direct investment or

joint ventures.

Market Profile

Health care in Romania is undergoing major changes.

Currently, more than 90 percent of the hospitals are stateowned. Since 1989, there has been a steady growth of

private clinics for outpatient surgeries and for laboratory

testing. These clinics are funded through cash payments

because the national health insurance system does not

cover private clinics, though the use of private health

insurance is growing.

The medical equipment market consists of six main

categories: diagnostic equipment, intensive care equipment, surgical equipment, technical aids, rehabilitation, and

hygiene.

In Romania, more than 70 percent of the hospitals are in

need of repair or upgrading, and there continues to be an

urgent need for the following equipment and/or services:

cardiovascular, respiratory, cancer, digestive,

gerontological, obstetric, and pediatric services. Although

there is a growing trend towards privatization, health care

reform is in the early stages, and computerization as well as

standardization of health care services and therapies is

necessary.

These trends represent trade opportunities for U.S. medical

equipment producers or health care managers, as well as

for those wishing to establish or acquire private hospitals,

health centers, clinics or medical manufacturing capacities

in Romania.

Competitive Analysis

Local production has lost competitiveness since 1989, and

export sales have declined. Domestic production covers

only 10 percent of the market. The main products are:

dental units, microscopes, surgical instruments, intensive

care equipment, equipment, EKG. machines, prostheses,

and cardiovascular valves.

There are no special limits on medical equipment imports

imposed by the government. In order to import medical

equipment, a company will have to obtain an import license

from the Department of Foreign Trade and a five-year

authorization from the Ministry of Health. To import

radiation equipment, approval will be obtained from

CNCAN, the Nuclear Safety Authority, and from the

Ministry of Health and Family.

The main medical equipment exporters to Romania are

Western European companies that have used aggressive

promotion and qualified local consultants to penetrate the

market. Hospitals, clinics and district health departments

buy directly less expensive medical devices. For other

medical devices, such as advanced diagnostic equipment,

cardiology equipment, laboratory equipment, procurement

is made by the Ministry of Health through its Tender and

Acquisition Department

U.S. companies and products are also well represented in

the Romanian market. Several major U.S. companies have

representatives and distributors in Romania including

General Electric, Hewlett Packard, Stryker, ATL, Diasinics,

Control X, Gendex, Becton Dickinson, Johnson & Johnson,

Bennett, Varian Medical Systems, Acuson Corp., and 3M.

U.S. companies have penetrated approximately 25 percent

of the Romanian market for medical equipment. This share

is expected to grow as these and other U.S. companies

continue to market their products in Romania. U.S.

products are well received by the population and health

care professionals.

Price is the main criterion for hospitals when they purchase

medical equipment from suppliers. However, for highquality products price may become a secondary criterion.

Effective marketing and promotion can dramatically

influence the market. An essential selling factor is the

product’s reputation. Some companies may wish to

(Continued on page 11)

Want to learn more about Romania?

Go to Commercial Update's Special Feature:

Romania on pages 8 – 11.
6 Central and Eastern Europe Commercial Update

Companies do not have to wait until Croatia is a EU

member to reap the benefits. In fact, under trade

agreements that Croatia has right now with the EU, most

Croatian industrial products already enter the EU duty free.

In light of this, U.S. companies must take a strategic and

long-term look at Croatia. You should consider Croatia a

platform to reach all of Europe. Croatia itself is a market of

just 4.8 million people. Yet, manufacturing in Croatia

provides investors duty-free access to the lucrative

European Union. Croatia is also a key entry point for the

entire region of Southeast Europe where Croatia has many

bilateral free trade agreements. Further, Croatia has signed

a bilateral free trade agreement with Hungary, and

eventually will join the Central Europe Free Trade

Agreement, a free trade area including Poland, the Czech

Republic, Slovakia, Romania, and Bulgaria, among other

countries.

Croatia is positioning itself at the center of massive free

trade network and the implications are very significant: An

investment in Croatia not only provides access to the 4.8

million person Croatian market; setting up operations here

will provide your company with access wider market across

Europe totaling 480 million people, 100 times that of Croatia

itself.

Commerce Programs

The Department of Commerce would like to assist

companies to explore the many opportunities we see in

Croatia. We have a very strong presence at the U.S.

Embassy here in Zagreb through our Foreign Commercial

Service, which is overseen by our senior commercial officer

Beryl Blecher. Ms. Blecher and her staff are poised to

provide you many invaluable services from customized

market research reports to the gold key matching service,

which will arrange appointments for you with pre-screened

contacts in Croatia.

Commerce also has a special program based in Washington

called the Central and Eastern Europe Business Information

Center (CEEBIC) to help new-to-market companies find

partners and information about doing business in the

Central Europe region. Ms. Silvia Savich from CEEBIC is

here at the conference and is willing to speak with you

about CEEBIC’s services.

Finally, as Deputy Assistant Secretary for Market Access

and Compliance, I oversee a staff that can help your

Croatia (Continued from page 2)

(Continued on page 7)

Around the Region....

FYR Macedonia: Interim Tax in Effect

as of July 1

All businesses in FYR Macedonia must pay an interim tax,

totaling 0.5 percent, on each financial transaction. The tax

will remain in place until December 31, 2001. The government is imposing the tax to reduce the budget deficit.

(Source: Makfaks News Agency)

Albania: Steady Growth in Agricultural Sector

Encouraged by export figures for the first quarter of the

year, Albanian Agriculture Minister Lufter Xhuveli,

recently stated that he expected steady growth in Albanian

agriculture and livestock production in 2001. Agricultural

production has grown steadily over the past decade,

despite small, labor intensive farms. Xhuveli stated that

first quarter agricultural production increased by 12

percent, primarily in the sectors of fish, vegetables, juices,

eggs, leather and medical plants. Xhuveli stated that the

trade balance in the agricultural sector would improve by

$50 million from $35 million in 2000. The positive trend for

agricultural exports was also reflected in lower agricultural

imports. Albania exports agricultural products to Austria,

Germany, Croatia, and Switzerland. Xhuveli predicted that

Albania would export approximately 10 percent of its

summer production of tomatoes, potatoes, watermelons,

beans and carrots. Xhuveli stated that Albania could

export up to 15,000 tons of watermelon, 1,000 tons of

potatoes, 3,000 tons of tomatoes. (Source: Albanian Daily

News)

Albania: EU Recommends Opening of Negotiations for

Stabilization and Association Agreement

The European Commission, the European Union’s (EU)

executive body, adopted a report which recommends

beginning negotiations with Albania for a Stabilization and

Association Agreement (SAA). The Commission stated

that beginning SAA negotiations was a method to

encourage and maintain the recent Albanian political and

economic reforms. EU officials stated that SAA negotiations would not begin prior to 2002, and still depend upon

Albania meeting certain conditions. The European Union

recently signed an SAA with FYR Macedonia and is

preparing to sign an SAA with Croatia. (Source: Reuters)
Central and Eastern Europe Commercial Update 7

Calendar of Events

This notice is provided solely as an informational resource and does

not constitute U.S. Department of Commerce endorsement of these

events. All information published in the Commercial Update

regarding trade events is subject to change without notice by the

organizers of those events.

For a more complete list of events, go to CEEBICnet,

www.mac.doc.gov/eebic/ceebic.html

company tackle legal, regulatory, or other barriers that

you are encountering in this market. As part of my visit

here, I had the pleasure of meeting with Minister Fizulic

and other senior Croatian officials to discuss ways that

the Croatian business climate could be further improved.

From those discussions, it is clear to me that this

government has inherited a difficult economic legacy, but

from its first days in office, has focused on urgent

economic reforms and is making improving the business

climate for investment a priority.

Conclusion

To conclude, the U.S. government perspective on Croatia

is that there are many opportunities in this market that

have gone unrealized. There is a great deal of goodwill in

the United States and in the U.S. government to help

Croatia succeed in its reform efforts and to further

improve the business climate here. We are pleased to be

co-hosts of this conference, the first of its kind for U.S.

companies in Croatia, and we look forward to working

with the Croatian government and with all of you to help

realize Croatia’s strong potential.

Croatia (Continued from page 6)

On July 1 new telephone area codes went into effect in the

Slovak Republic. The new area codes for the major

administrative regions are: Banska Bystica (48), Bardejov

(54), Bratislava (2), Dunajska Streda (31), Hmenne (57),

Kosice (55), Levice (36), Liptovsky Mikulas (44) Lucenec

(47), Martin (43), Michalovce (56), Nitra (37), Nove Zamky

(35), Propard (52), Povazska Bystrica (42), Presov (51),

Prievidza (46), Rozava (58), Senica (34), Spisska Nova Ves

(53), Topovcany (38), Trencin (32), Trnava (33), Zvolen

(45), Zilina (41). For a complete list of area codes, go to

www.telecom.sk.

Slovakia Has New Telphone Area Codes

An Export Tip

Q: How do I determine the duties and taxes on an

export?

A: First, you must obtain the harmonized system

number or schedule b number for the product you are

exporting. This number can be obtained from the

U.S. Census Bureau by calling (301) 457-1084 or by

visiting the bureau's website at www.census.gov/

foreign-trade. Once you have the harmonized system

number, contact CEEBIC at tel. (202) 482-2645, fax

(202) 482-3898, or e-mail ceebic@ita.doc.gov. Please

provide the harmonized system number and destination country.

For countries outside Central and Eastern Europe,

call the Trade Information Center at 1-800-USATrade.

Please note that CEEBIC and the Department of

Commerce can only provide duty and tax information

for goods produced in the United States.

August

8/29 – 9/2 Polish American

Contractors and Builders Association

(PACBA) Expo 2001, Wroclaw, Poland

Contact: PACBA, tel. (773) 533-2200, or

e-mail info@pacba.org.
8 Central and Eastern Europe Commercial Update

Clearing Goods Through

Romanian Customs

by Bogdan Bartolomeu, managing director, SDV-SCAC

Romania

Romanian customs functions along the general rules and

guidelines issued by the World Customs Organization.

There are, however, a number of unique elements.

Customs Structure

The General Directorate of Customs (GDC) is part of the

Romanian Finance Ministry. GDC’s regional offices control

the actual operational customs offices established at the

boarder and the interior. The border offices deal mainly

with the transit traffic, and, consequently, a limited number

of import customs entries are filed at these offices. The

border offices will register mainly the shipments entering

Romania and redirect them to the interior customs offices

for clearance.

It is important to remember that when goods are entering

Romania the border offices will strictly enforce any local

rules and regulations regarding special shipments

ROMANIA: Information and

Communications Technology Market

Overview

by Roda Tinis, U.S. Commercial Service Bucharest,

Romania

In Romania, the state-owned national telephone

monopoly, Romtelecom, provides all basic

telephone services. However, according to the

country’s telecommunications law, these services

will be completely liberalized by January 1, 2003.

(Romtelecom was partially privatized in 1998, when

the Greek telecommunications company OTE

purchased 35 percent of the company).

According to mid-2000 statistics, Romania has 4.3

million phone lines, of which 60 percent are digital.

The average telephone density is about 20 percent.

This year Romtelecom’s plans include the further

digitalization of the network, the launching of the

SS7 signaling system, and the expansion of ISDN,

which will support a faster growth of data

transmission systems and the integration of voice,

data, and image transmission.

Mobile communications have developed

dramatically in Romania over the last three years.

Currently, there are four cell phone providers, with a

total of about 2.5 million subscribers: Telemobil

(LEMS 450 MHz), Mobifon (GSM 900 MHz),

Mobilrom (GSM 900 MHz), and Cosmorom (DCS

1800 MHz).

At three percent of the total population, Internet

penetration in Romania is low. However, access to

the Internet is growing at about five to six percent

per month.

There are a number of factors that are expected to

contribute to the continued growth in Internet and

related services including a competitive Internet

service provider (ISP) market with over 200

companies. Other factors include high levels of

computer literacy; a large number of English

speakers; over 3 million cable television

subscribers; and relatively high mobile telephone

penetration about — nine percent of the population.

Impediments to Internet and e-commerce

development include the low number of personal

computers, limited use of credit cards, and high

access fees.

The Romanian IT sector is growing at the incredible

rate of 30 percent per year. Romania has a large

number of computer engineers, technicians, and

software developers. A number of Romanian

electronic manufactures have proprietary

technologies. Romanian software companies cover

about 25 percent of the total market and are

particularly strong in the niche markets of

customized telecommunications software and

industrial surveillance and security software.

About half of the country’s 200 plus software

manufacturers are exporting to European Union

(EU) and the North American markets. The U.S.

hardware manufactures such as Compaq, IBM, and

Hewlett-Packard are dominant in the hardware

market and U.S. software giants Microsoft and

Oracle are the leaders in the software market.

Special Feature: Romania
Central and Eastern Europe Commercial Update 9

and goods are released only after full payment is made by

certified bank transfer. Even a small error in the

documentation can block shipments, creating delays and

additional expenses in storage and demurrage charges.

Below are some of the common problems that shippers

encounter.

Original documents: Romanian Customs only accepts

original documents; fax or photocopies are not accepted.

Consequently, the smallest error on the shipping or

commercial documents will block the merchandise in

Customs until a new set of documents is received from the

point of origin.

Incoterms: there is a strict requirement that the correct

Incoterms, according to Incoterms 1990, be shown on all

commercial documents. This is particularly difficult for U.S.

shippers, since Incoterms are not widely used in the U.S.

Please be aware that such terms as “free house delivery”,

“COD”, “free domicile,” etc. are not Incoterms and will not

be accepted by the Romanian Customs.

Currency: please make sure that the currency is shown on

the invoice. Do not assume that if the invoice was issued in

the United States the Romanian Customs officers will

consider automatically that the value is denominated in

U.S. dollars. They will reject the invoice and block the

shipment.

Transport documents: all transport documents must be

issued according to the international rules and regulations.

They should also match the Incoterms on the commercial

invoices. Please be aware that the transportation cost will

be included in the “value for customs” calculation

and will impact the amount of duties and taxes.

You should consider other issues before sending

shipments to Romania. For instance, there are special

regulations and preferences for certain investments,

advertising and promotion materials, samples, and,

therefore, you should check carefully with your forwarder

before shipping the goods. For further information

(CEEBIC) at tel. (202) 482-2645, fax (202) 482-3898, or e-mail

ceebic@ita.doc.gov.

1

 SCAC Romania is part of the European transportation

group SDV Inc.

(restricted materials, chemicals, medicine, food, live

animals, etc.). Customs officials will stop any shipment

containing goods or materials that are not correctly

packaged or do not have the correct documentation. Goods

will remain with Customs until such documentation is

obtained.

International shipments have to be bonded between the

border and the destination customs office. For trucks, the

most common bonding document is a TIR carnet which can

be issued by any international forwarder or trucking

company in Europe. For containers, it is recommended

that a master bill of lading be issued to the final

destination. If only the port of Constanta is mentioned in

the Bill of Lading, an additional customs bond is required

to transit the container from the port of Constanta to the

inland destination.

Tariffs

Romania uses the harmonized tariff code system and

recognizes the universal rules of interpretation and

classification. The level of the customs duties varies

depending on the country of origin. There are a number of

tariff preferences for goods made in the European Union

(EU), AELS (Switzerland, Iceland, Liechtenstein, Norway)

and CEFTA (Bulgaria, Czech Republic, Slovakia, Slovenia,

Poland, Hungary). Duties for these countries are reduced

every year according to the schedule established for

Romania’s accession to the European Union. The

integration program calls for no duties and taxes by 2004.

Currently, 50 percent of the products from the European

Union are duty free and the other 50 percent have duty

rates of up to 15 percent. Goods made in the U.S. and other

countries (not mentioned above) may have higher duty

rates of between 20-35 percent and a processing fee of .5

percent of the value of the goods. Alcohol and tobacco

products are tightly controlled and have additional luxury

taxes.

Practical Considerations

Clearing customs in Romania can be a difficult process,

although the requirements of the Romanian Customs are

not very unusual and are in line with the general rules and

regulations in other countries. Consequently, most

exporters prefer to use a forwarder who has a customs

operation in Romania and who can check the documents

before shipping for compliance with the Romanian

Customs requirements. All customs entries in Romania are

“live.” There is no deferred payment of duties and taxes,
10 Central and Eastern Europe Commercial Update

Useful Contacts in Bucharest, Romania:

Ministry of Foreign Affairs and of Foreign Trade

14 Aleea Modrogan

Bucharest

Tel: +40 (1) 315-0906; Fax: +40 (1) 315-0581

Ministry of Finance.

17 Apolodor Street

Bucharest

+40 (1) 231-3937; Fax: +40 (1) 312-1630

Ministry of Industry and Energy

152 Calea Victoriei

Bucharest

+40 (1)-312-6461; Fax: +40 (1) 314-0182

Ministry of Small and Medium Size Enterprises

11 Poterasi Street, Sector 4

Bucharest

 Tel: +40 (1) 335-2620; +40 (1) 335-2632; Fax: +40 (1) 336-

1843

Ministry of Agriculture, Forests and Food Industry

24 Carol I Blvd.

Bucharest

+40 (1) 315-4412; Fax: +40 (1) 312-4410

Ministry of Water and Environmental Protection

12 Libertatii Blvd.

Bucharest

Tel: +40 (1) 211-1584; Fax: +40 (1) 312-427

Ministry of Public Works, Transportation and Housing

17 Apolodor Street

Bucharest

Tel: +40 (1) 335-0180; Fax: +40 (1) 336-8509

Ministry of Tourism

17 Apolodor Street

Bucharest

Tel: +40 (1) 335-6719; Fax: +40 (1) 411-2346

Ministry of Information Technology and

Communications

14 Libertatii Blvd.

Bucharest

Tel: +40 (1) 400-1721; Fax: +40 (1) 411-0932

National Authority for Privatization

18-20 Lipscani Str.

Bucharest

Tel: +40 (1) 303-6301; Fax: +40 (1) 310-1687

Romanian Customs

13 Matei Millo Str.

Bucharest

Tel: +40 (1) 315-5858; Fax: +40 (1) 312-1395

Chamber of Commerce and Industry of Romania

2 Octavian Goga Str.

Bucharest

Tel: +40 (1) 322-9501; Fax: +40 (1) 327-3468

Commercial Opportunities in Romania’s Cluj

and Timis Counties

Agroexport Bunafiru, an import-export company

established in 1994, has excellent business relations with

partners in Germany, Austria, Switzerland, France, Greece,

Hungary, Moldova, Croatia, Bosnia, and Russia. Dealing

mainly with bulk shipments of fresh, frozen, and dried

fruits, Agroexport is looking for a U.S. partner interested to

invest in projects such as: a refrigerating and freezing

facility for preserving wild fruits, orchard fruits, and

vegetables; large facility for packing seeds and dried fruits

for retail; extraction, bottling and distribution of natural

mineral water. Agroexport is located in Buzias, the Timis

County. For further details, please contact

ceebic@ita.doc.gov.

Soclu Impex and Soclu Trading produce and trade building

and installation materials, such as: thermo-hydro

insulation, waterproofing membranes, bituminous board,

dedusting installations, trusses, beams, metallic and

wooden doors, floor tiles, bathroom furniture, etc. Located

in Cluj-Napoca, Soclu is looking for U.S. partner to expand

and diversify operations. For further details, please

contact ceebic@ita.doc.gov.

QCT Connect is an IT company with offices in Timisoara

and Bucharest. QCT targets local and central government,

public services and utilities, telecommunications,

transportation, tourism. QCT Connect specializes in

business engineering, analysis and modeling, business

infrastructure, software development, application

integration and system administration; implementation and

project management. QCT is seeking U.S. partner with

expertise in solutions framework, consulting (core services,

project management methodologies, best practices), and

enterprise engines. For further details, please contact

ceebic@ita.doc.gov.

Lasting Software focuses on object oriented analysis,

design and development methodologies. The company

spun off from Lasting System which was established in
Central and Eastern Europe Commercial Update 11

consider joint ventures and cooperation with local partners

to penetrate the market.

End-User Analysis

The end-users of medical equipment are hospitals or

outpatient clinics. The hospitals are free to make medical

equipment purchase decisions within their budgets by

issuing tenders with an upper limit of approximately

$37,000. Sales to clinics are generally made either directly

or through distributors.

Market Access

The import climate for U.S. medical equipment in Romania

is positive. There are no import barriers for U.S. equipment.

In 2000, the Ministry of Health awarded tenders to select

companies to acquire new medical equipment to replace the

existing equipment and modernize the hospital system. The

tenders amounted to $280 million, $70 million of which has

been allocated to medical equipment. Considering this

large expense, it is highly unlikely that additional tenders

will be offered in 2001.

Distribution/Business Practices

Sales are made mainly by state tender or direct purchase.

The distribution company should have good contacts in

Romania, to gain access to appropriate authorities with

decision-making power in purchasing. Suppliers may

contact hospitals directly.

Financing

The most frequent financing method used is payment by

bank wire transfer, with terms of 45 - 60 days after the

supplier invoices the purchaser.

Key Contacts

U.S. Embassy Bucharest

U.S. Commercial Service

Str. Tudor Arghezi 7-9

Bucharest, Romania

Contact: Doina Brancusi, Commercial Specialist

Tel: +40 (1) 210-4042

Ministry of Health

Medical Equipment Division

Str. Ministerului 1-3

Bucharest, Romania

Contact: Dana Voichita Muresanu, Director

Tel. +40 (1) 615-0200

Fax +40 (1) 323-8124

1995 in Timisoara gaining extensive experience in building

memories for computers and printers. Lasting Software

enjoys special relationship with the Computer and Software

Engineering Department at “Politehnica” University of

Timisoara. Current activities include: communication and

Internet software, management information systems, ecommerce applications, applications for Web pages with

DB connectivity, customized software development. For

more information about products and services, please visit:

http://software.lasting.ro or contact ceebic@ita.doc.gov.

Archim is the most recent and most modern urea and

ammoniac plant in Romania. Situated in western Romania,

close to the borders with Hungary and Serbia, the facility

uses its own utilities for water, natural gas, sewerage, etc.

A water cleaning installation, technological air,

technological oxygen and nitrogen plant are also part of

Archim that owns a power generation station. Archim is

seeking strategic investor to re-start urea production and

production of urea-formaldehyde resin. For further details,

please contact ceebic@ita.doc.gov.

ELBA is a private company specializing in lighting devices

and systems. Located in Timisoara, in western Romania,

the company uses proprietary technology, ELBALux

software, developed according to the standards of the

International Lighting Committee (CIE). With an ISO 9001

certification since 1997, ELBA has built its current activity

on the experience and expertise of the DURA firm,

established in 1921. ELBA offers outdoor, decorative,

architectural illuminating devices, fixtures for industrial and

special environment lighting, traffic and automotive lights.

The company has a wide distribution network through 40

dealers in Romania and exports to Western and Eastern

Europe, as well as to the Middle East. ELBA is seeking

U.S. partner to expand current operations. For additional

information, please contact ceebic@ita.doc.gov.

E.T.O. is an IT company specializing in software

development, with programming expertise in TCP Sockets/

C++; CGI/C++; Javascript; MySQL/Windows stations;

Unix server; Web monitoring. E.T.O. developed an Internet

system for browsing, searching, and retrieving documents

issued by national and international bodies regarding local

and regional democratic process. The company is seeking

U.S. partners to develop software applications for

implementation of fiscal regulations. For additional

information, please contact ceebic@ita.doc.gov

Medical (Continued from page 5)
PRESORTED

FIRST-CLASS MAIL

POSTAGE & FEES PAID

ITA/DOC

PERMIT No. G-54

Sender CEEBIC

U.S.A. Trade Center

U.S. DEPARTMENT OF COMMERCE

Stop R-CEEBIC

Washington, D.C. 20230

OFFICIAL BUSINESS

Penalty for Private Use, $300

CEEBIC and the Commercial Service are Available to Assist U.S. Companies

Estonia

Reene Sepp, CEEBIC Trade Specialist

U.S. Embassy Tallinn

Kentmanni 20, Tallinn

Tel: +372 (6) 312-021

Fax: +372(6) 312-025

FYR Macedonia

Arben Gega, CEEBIC Trade Specialist

U.S. Embassy Skopje

Bu. Ilinden bb 9100, Skopje

Tel: +389 (91) 116-180

Fax: +389 (91) 117-103

Hungary

Scott Bozek, Senior Commerical Officer

U.S. Embassy Budapest

Szabadsag ter 12, 1054 Budapest

Tel: +36 (1) 475-4282

Fax +36 (1) 475-4676

Kosovo ("FRY")

Luan Dalipi, CEEBIC Trade Specialist

U.S. Office Pristina

9520 Pristina Place, Pristina

Tel: +381 (38) 549-516

Fax: +381 (38) 549-890

Latvia

Aldis Celms, CEEBIC Trade Specialist

U.S. Embassy Riga

Raina Blvd. 7, Riga

Tel: +371 703-6200

Fax: +371 782-0047

Albania

Omer Dashi, CEEBIC Trade Specialist

U.S. Embassy Tirana

Riugahabinot 103, Tirana

Tel: +355 (42) 47-285 or 286

Fax: +355 (42) 32-222

Bosnia and Herzegovina

Edin Fetahovic, CEEBIC Trade Specialist

U.S. Embassy Sarajevo

43 Ul. Dure Dakovica

Sarajevo, Bosnia and Herzegovina

Tel: +387 (71) 665-851

Fax: +387 (71) 665-836

Bulgaria

Georgi Peev, CEEBIC Trade Specialist

U.S. Embassy Sofia

NDK Administrative Building 5th Floor

1 Bulgaria Square

1414 Sofia, Bulgaria

Tel: +359 (2) 963-4062

Fax: +359 (2) 980-6850

Croatia

Miroslav Nikolacs, CEEBIC Trade Specailist

U.S. Embassy Zagreb

Andrije Hebranga 2, Zagreb

Tel: +385 (1) 461-0777

Fax: +385 (1) 455-3126

Czech Republic

Richard Steffens, Senior Commercial Officer

U.S. Embassy Prague

Trziste 15

118 01 Prague 1

Tel: +420 (2) 5753-1162

Fax: +420 (2) 5753-1165

Lithuania

Jonas Vasilevicius,CEEBIC Trade Specialist

America Center

Pranciskonu str. 3/6, 2001 Vilnius

Tel: +370 (2) 223-31 ext. 149

Fas: +370 (2) 222-779

Poland

David Fulton, Senior Commercial Officer

U.S. Embassy Warsaw

Al. Jerozolimskie 56/C, 00-803 Warsaw

Tel: +48 (22) 625-4374

Fax: +48 (22) 621-6327

Romania

U.S. Embassy Bucharest

Strada Tudor Arghezi 7-9, Bucharest

Tel: +40 (1) 210-4042

Fax +40 (1) 210-0690

Slovakia

Dusana Bartkova, CEEBIC Trade Specialist

U.S. Embassy Bratislava

Grosslingova 35, 811 09 Bratislava

Tel: +421(2) 5296-1079

Fax: +421(2) 5296-1085

Slovenia

Marko Mlakar, CEEBIC Trade Specialist

U.S. Embassy Ljubjana

Presernova 31, 1000 Ljubljana, Slovenia

Tel: +386 (61) 200-5500

Fax: +386 (61) 200-5555