April/May 2001

 Inside this Issue...

 Eye on Southeast Europe 2

 Commercial Opportunities 4

 Calendar of Events 5

 Special Feature: Romania 8

CEEBIC Launches EU Accession Section of CEEBICnet

The Central and Eastern Europe Business Information

Center (CEEBIC) recently launched a new section of its

Web site, CEEBICnet. This new section focuses on the

European Union (EU) accession process currently

underway in Central and Eastern Europe and its impact on

U.S. commercial activity in the region.

There are currently 10 countries in Central and Eastern

Europe (CEE) negotiating to enter to the European Union

(EU): Estonia, Latvia, Lithuania, Poland, the Czech

Republic, Slovakia, Hungary, Slovenia, Romania, and

Bulgaria. The highly intensive and complex EU accession

process has shaped various aspects of the accession

countries’ transition to a market economy and the

development of their commercial rules and regulations.

As part of the accession process, these countries are

required to adopt the acquis communautaire, the common

body of law in the European Union. CEE countries also

have entered into bilateral agreements with the EU in areas

such as industrial and agricultural tariffs and standards and

certification procedures. These bilateral agreements can

affect the competitiveness of U.S. exports to CEE countries.

EU accession also affects areas as wide-ranging as

government procurement, duty drawback policies, and

intellectual property rights.

U.S. companies can now turn to CEEBICnet for the latest

information on the complex accession process.

Subsections of the EU accession Web page include: (1)

milestones in the EU access process; (2) accession criteria;

(3) candidates progress in EU negotiations; (4) the

European Monetary Union; (5) EU sources of funding; (6)

opportunities for U.S. companies as result of EU accession;

and (7) challenges for U.S. companies as a result of EU

accession. This new section of CEEBICnet can be

accessed at www.mac.doc.gov/eebic/euaccession.htm.

U.S. Ambassador and Slovak Deputy P.M. Tour U.S.

The U.S. ambassador to the Slovak Republic, Carl

Spielvogel and Slovak Deputy Prime Minister for Economy,

Ivan Miklos recently visited four cities in the United States

to promote U.S. exports and investment in Slovakia.

Representatives of the U.S. Department of Commerce and

officials of the Slovak government accompanied the

ambassador and the deputy prime minister on the tour.

The tour kicked off in New York on February 26 with Inwest

Forum, an investment conference focused on investment

opportunities in Czech Republic, Hungary, Poland, and

Slovakia. The conference brought together senior

representatives from the four Central European

governments and featured an address by former Secretary

of the Treasury Robert Rubin and remarks from

Ambassador Spielvogel and U.S. Ambassador to Hungary,

Peter Tufo. Over 300 U.S. companies attended the daylong seminar. To learn more about investment

opportunities and incentive programs in Central Europe, go

to the web sites of the foreign investment promotion

agencies for Czech Republic (www.czechinvest.org),

Hungary (www.itd.hu), Poland (www.paiz.pl), and Slovakia

(www.sario.sk). CEEBIC trade specialist are also available

to assist companies seeking to make investments in Central

Europe. To speak to a CEEBIC trade specialist, call (202)

482-2645 or e-mail ceebic@ita.doc.gov.

On Tuesday, February 27, the Business Council for

International Understanding (BCIU) organized a breakfast

(Continued on page 5)

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

Want to learn more about commercial opportunities

 in Romania?

Check out this month's special Romania Supplement.

Go to pages 7 – 11.

Mr. Cristian Colteanu, Secretary of State with the Foreign Trade

Department of the Romanian Foreign Affairs Ministry, speaks

exclusively with Commercial Update about the opportunities and

challenges of the Romanian market.

The Department for Foreign Trade and Economic Promotion

has been established under the Ministry of Foreign Affairs.

What are your department’s top priorities for 2001 and what

performance benchmarks have you established?

Foreign trade activities and international economic cooperation,

strong exports, and increased foreign direct investments are top

priorities already outlined both in Romania’s medium-term

national strategy for economic development and in the

government’s program for 2001–2004.

In order to meet these priorities, Romania will be an active player

in the global and regional processes relevant for the international

trade system; continue to improve the legal framework for

economic relations; boost its exports; consolidate trade measures

to protect local producers’ interests; improve the business

environment and the investment climate; and promote Romanian

enterprises’ interests abroad. At the same time, we will identify

new foreign markets and regain former traditional markets for

Romanian goods. We will also make concerted aggressive efforts

to attract foreign direct investment, technology, and know-how.

We forecast $11.2 billion in exports this year – a 6 percent

increase compared to 2000. Romania will focus on export goods

such as: furniture, apparel, footwear, ships, fertilizers, electric

and drilling equipment, machine tools, etc. In order to reduce the

negative trade balance, we forecast a slower import rate. Most of

our imports will be investment related – necessary to upgrade the

production capacity. These types of imports, together with

production related imports, will account for 85 percent of the

total imports’ volume. In this context, we consider our trade

relations with the United States. are extremely important.

Romania’s government has set ambitious targets regarding

foreign direct investment (FDI). What steps will you take to

reach these targets?

Attracting foreign direct investment is key to re-launching the

Romanian economy and meeting the conditions for Romania’s

integration into Euro-Atlantic structures and for EU accession.

The national strategy for economic development forecasts a total

volume of $1.8 billion in FDI through 2004. The government

understands that foreign investors are looking for a favorable

investment environment based on stable, transparent, and

predictable legislation.

We are currently coordinating our efforts with the Economic

Ministry in Romania to determine which strategic sectors would

attract FDI and to make proposals that will eliminate any

obstacles foreign investors may face regarding legislation,

accounting, banking and financial services, and so on. During the

first quarter of this year, we want to make an inventory of the

running investment projects, and those projects that have been

blocked or delayed. Foreign investors will be able to access

information databases made available on the Internet

For the next stage, we will establish an annual portfolio of

priority investments that will attract major foreign investors. We

will also set up a mechanism that will pool investments from the

public and private sectors. It is important to establish a national

network to facilitate cooperation between the private and public

sectors and among regions. A special one-stop-office under the

direct oversight of the prime minister will facilitate the foreign

investors’ access to top-level decision makers. We are also

considering measures to stimulate foreign investors’ interest for

depressed zones, free trade zones, regional development, and

technological parks; such measures will also include fiscal

incentives.

What measures will the government take in order to

improve the investment climate?

 We will focus on solving problems connected with inventories

and accounts receivables as registered collaterals for bank loans;

accounting regulations for companies with limited liability – in

order to become relevant for investors; the international accounting standards; inventory evaluation; fiscal issues – to name only a

few.

We think that a speedy solution to these problems will have a

positive effect on the business environment and contribute to an

increase in foreign investments in Romania.

Which economic sectors could become extremely attractive

for the foreign investors?

Tourism, SMEs, environmental protection, public works,

housing, information technology, oil, the light industry, the food

industry and agriculture, among others, show great potential.

(Continued on page 11)
Central and Eastern Europe Commercial Update 3

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: tel: (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, Cristina Marine,

Michael Rogers, Silvia Savich

Program Assistant: Christine Muchanic

Webmaster: Gedlom Tesfazion

Contributors: Erik Howell, Jonathan Kimball,

Laurie Molnar, Kristin Najdi,

Melissa Wilson

Evolving Product Standards in Central Europe

by Laurie Molnar, Central and Eastern Europe Division, Market Access and Compliance

The 10 Central and Eastern European (CEE) countries

negotiating to enter the European Union (EU) have

undertaken a massive effort to harmonize their standards,

technical regulations, and certification procedures with

those of the EU. In the long run, this will result in regionwide homogeneity in technical regulations. Once harmonization is complete, U.S. exporters will no longer have to

navigate through often less-than-transparent certification

procedures to demonstrate conformity with the different

national standards of each CEE country. Harmonization

may benefit U.S. companies that already export to the

European Union, are experienced in complying with EU

standards, and do not find those standards onerous.

However, in the interim before harmonization is complete

and CEE countries become full members of the EU, U.S.

exporters will find the standards area very much in flux.

There are increasingly few purely “national” standards as

CEE countries adopt European and international standards

in their technical regulations. Among the CEE countries

most advanced in these efforts is the Czech Republic,

which has harmonized more than 90 percent of its standards and technical regulations with those of the EU

(particularly, those relating to the health and safety of

persons, property, and the environment). In some cases,

CEE countries are designating new notified bodies authorized to undertake CE mark product testing and certification.

EU Signs Bilateral Standards Agreements with Czech

Republic and Hungary

A major development in the standards area took place on

Feb. 26, 2001: the EU signed unilateral recognition agreements with Hungary and the Czech Republic, called the

Protocol to the Europe Agreement on Conformity Assessment and Acceptance of Industrial Products, or PECA

agreements. These agreements are intended to facilitate

trade between the EU and these countries. As part of the

PECA agreements, the signatories agree to mutually

recognize one another’s conformity assessment procedures. The PECA agreements will go into effect once they

are ratified by the Czech and Hungarian governments and

published in their official gazettes (expected June 2001).

The EU is also discussing bilateral PECA agreements with

Poland, Slovakia, Slovenia, Estonia, and Latvia, and soon

may launch discussions on PECA agreements with

Bulgaria and Romania.

The basic purpose of the PECA agreements is to enable

certain products to enter the CEE markets and, vice versa,

for Czech and Hungarian products to enter the EU without

additional testing to demonstrate their conformity with

standards. PECA-covered products are exempt from

further testing if they meet two criteria:

1. They have a CE mark.

2. They fulfill EU country-of-origin requirements or

originate in the European Union.

This second criterion will likely create a comparative

advantage for EU exporters over U.S. exporters. It appears

that while an EU-origin product with a CE mark on it will be

able to enter CEE markets without additional testing, the

same U.S. product with the same CE mark will have to

undergo testing in the CEE countries to demonstrate its

conformity with EU standards.

Fortunately, some exceptions do exist, which will mitigate

the negative effects of the PECA agreements. U.S.

exporters of products such as those covered by the EU’s

machinery, electrical safety, and electromagnetic compatibility directives will be able to put their products onto the

Hungarian and Czech markets if the manufacturer selfcertifies that the product is in conformity with the applicable EU directives. U.S. products covered by these EU

directives will be treated the same as products from the EU.

Additional testing will not be required for these U.S.

products if the manufacturer affixes the CE mark on the

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

Central and Eastern Europe Commercial Opportunities

Bulgaria

Swejest is a Bulgarian firm with 30 years experience in providing

dry cleaning and laundry services. It employs 60 people. Last

year its total sales reached $500,000. It is currently planning to

expand its facilities and is seeking U.S. suppliers of dry cleaning

equipment.

Contact: Mr. Dimitar Danev

Executive Director

Swejest

10 Ivan Jochev St.

1510 Sofia

Bulgaria

Tel: (359-2) 470-7205

Fax: (359-2) 470-7013

E-mail: danev@interbge.com

Submitted by Georgi Peev, CEEBIC trade specialist, Bulgaria

Croatia

The Varzadin County Chamber of Commerce in Croatia is acting

as an agent to find a joint-venture partner for several local

companies seeking to manufacture medium density fireboards

(MDF) in a free trade zone near Varzadin. The land for the

facility has already been allocated. The amount of the investment

being sought is $20 million. According to current estimates, the

facility would employ 100 workers and would almost immediately realize a total annual sales equal to that of the total

investment. The local partner companies would also act as

customers and are willing to sign agreements with the jointventure partner.

Contact: Mr. Cedomil Cesarec

Varazdin County Chamber of Commerce

Tel: (385-42) 320-469

E-mail: ccesared@hgk.hr

Submitted by Miroslav Nikolac, CEEBIC trade specialist, Croatia

FYR Macedonia

Mikron, a Macedonian manufacturer of home appliances and

electrical equipment is seeking a U.S. joint-venture partner and

U.S. technology to help it expand its operation. Mikron has been

in business for over 40 years and currently employs 355 people.

Last year, total turnover was $2.3 million. Over 86 percent of

total production is exported to Germany, Italy, Romania,

Turkey, Russia, Yugoslavia, Egypt, Poland, and Bulgaria.

Contact: Mr. Zlatko Boceski

General Manager

Mikron

Krusevsko Dzade bb

Prilep, Macedonia 97500

Tel: (389-98) 22-240

Fax: (389-98) 24-620

E-mail: mikron@mt.net.mk

Submitted by Arben Gega, CEEBIC trade specialist, FYR

Macedonia

Slovakia

Tesla Stropkov is a private company with 1,100 employees. It

was established in 1960. The company produces telecommunications equipment and telephones for homes, hospitals, and

busiesses. It also manufactures a variety of plastic products,

locking mechanisims, and other medical products. Last year

annual sales were $8.2 million. The company exports to the

Czech Republic, Germany, Hungary, Poland, Bulgaria, and

Russia. Tesla Stropkov is ISO 9001certified and is in the process

of obtaining its VDA 6.1 and QS 9000 certifications. It is seeking

a U.S. joint-venture partner to help it expand its operations.

Contact: Mr. Michal Kopcik

Marketing Manager

Tesla Stropkov

Hviezdoslavona 37/46

091 12 Stropkov

Slovakia

Tel: (421-938) 718-1001

Submitted by Pavol Matusek, CEEBIC trade specialist, Slovakia

Slovenia

Magus-R is a small wholesale importer of textiles and sporting

goods. It was established in 1996 and currently employs five

people. It is seeking to import cotton T-shirts from the United

States. The quantity needed is between 30,000 to 100,000 units.

Contact: Mr. Tamaz Mehle

General Manager

Litijska 47

Ljubljana, Slovenia 1000

Tel: (386-41) 626-293

Fax: (386-15) 423-823

Submitted by Marko Mlakar, CEEBIC trade specialist, Slovenia
Central and Eastern Europe Commercial Update 5

May

5/22 CEEBIC Business Briefing: Czech Republic

Your High Speed Conection to Central and Eastern

Europe, Washington, DC

Contact: Andrea Lupo, CEEBIC trade specialist, tel.

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

ceebic@ita.doc.gov

5/22 – 5/23 Investment Opportunities in Croatia,

Zagreb, Croatia

Contact: Silvia Savich, CEEBIC trade specialist

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

ceebic@ita.doc.gov

July

7/18 – 7/19 American Catalog Show in Albania,

Tirana, Albania

Contact: Jennifer Gothard, CEEBIC trade specialist,

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

ceebic@ita.doc.gov. (Materials must be mailed by

June 8, 2001).

Investment Opportunities in Croatia

Sponsored by the Overseas Private Investment

Corporation (OPIC) and the U.S. Department of

Commerce in cooperation with the Ministry of

Economy of the Republic of Croatia

May 23 – 24, 2001

Hotel Inter-Continental

Zagreb, Croatia

This two-day conference will allow U.S. companies

to hear first-hand from Croatian and U.S. government

officials, international financial institutions, and

Croatian companies about investment opportunities in

Croatia. U.S. companies will also have the

opportunitiy to meet one-on-one with potential

Croatian partners.

For more information, contact Silvia Savich at

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

ceebic@ita.doc.gov.

Calendar of Events

briefing hosted by the U.S. pharmaceutical company, Pfizer,

and attended by representatives of Philip Morris and

Citibank. The deputy prime minister discussed the Slovak

government's commitment to responsible fiscal policy and

attracting foreign investment. As part of that commitment,

the government has developed a new set of investment

incentives that include a 10-year tax holiday. It has also

established SARIO, a new government agency designed

to act as one-stop shop for foreign investors in Slovakia.

To learn more about the Slovak government's fiscal policy,

go to www.government.sk/miklos. To learn more about

SARIO, go to www.sario.sk.

After the breakfast, the delegation traveled to Pittsburgh,

Pennsylvania., where they visited U.S. Steel, the company

which recently made the single largest foreign investment

in Slovak history when it acquired VSZ Steel in Kosice,

Slovakia. The next morning, the state of Pennsylvania

hosted a briefing for Pennsylvania energy companies. To

learn more about the Slovak energy sector, go to the U.S.

Department of Energy country profile for Slovakia at

www.fe.doe.gov/international/slvkover.html.

The third stop on the four-city tour was Cleveland, Ohio.

Ambassador Spielvogel and Deputy Prime Minister Miklos

spoke at a business luncheon organized by the Cleveland

Plain Dealer. The final stop on the tour of the United

States was St. Louis, Missouri. The delegation's visit to St.

Louis was organized by Missour's, Department of

Economic Development and was a follow-up to a trade

mission that the state of Missouri conducted in Slovakia in

2000. The day included meetings with Emerson Electric and

Boeing.

U.S. companies seeking to do business in Slovakia should

contact Michael Rogers, CEEBIC trade specialist for

Slovakia at (202) 482-2645 or Joe Kaeshaffer, senior

commercial officer, U.S. Embassy Bratislava at (421-7) 5296-

1079.

Ambassador Tour

(Continued from page 1)

American Catalog Show in Albania

July 18–19 2001

The catalog show is a cost-effective way for U.S.

companies to advertise their products to Albanian

companies. U.S. companies submit materials to the

U.S. embassy in Tirana, which will promote their

products at the show. The show will focus on furniture, construction materials and technology, and

processing equipment. To learn more about the show,

contact CEEBIC at tel. (202) 482-2645.
6 Central and Eastern Europe Commercial Update

The EU’s New Approach Directives

The European Union’s (EU) “new approach”

directives deal with large families of products such

as machinery, gas appliances, pressure equipment,

toys, and construction products, or horizontal risks

such as those addressed in the EU’s Electromagnetic Compatibility Directive. The directives consist

of broad, essential health and safety requirements

that products must meet. For more information on

EU “New Approach” directives, their requirements,

what products they cover, and the technical details

regarding meeting health and safety requirements,

see: www.newapproach.org/directiveList.asp

The CE Mark: Your Product's

Passport to the European Union

The Conformité Europeene, or CE mark, is a

“passport” that allows manufacturers to circulate

industrial products freely within the internal market

of the EU. The CE mark signifies that the products

have met the health, safety, and environmental

requirements required by the EU’s “New Approach”

directives. (For more information, see “CE Mark

Questions and Answers” on CEEBICnet at

www.mac.doc.gov/eebic/euAccession.htm under

"Challenges for US Companies/Standards") To

speak with a Commerce Department representative

about obtaining a CE mark, contact: Mr. Robert

Straetz, Office of the European Union and Regional

Affairs, tel: (202) 482-4496;fax: (202) 482-2897.

product, signs a declaration of conformity, and prepares an

accompanying technical file.

The PECA agreements will have other important implications for U.S. exporters: For PECA-covered products, U.S.

exporters to Hungary and the Czech Republic will be

required to demonstrate conformity with the EU's “New

Approach” directives. (In some cases, these directives

were already in place before the PECAs); U.S. companies

will need to obtain CE marks by conformity assessment

bodies in these countries for many PECA-covered products to demonstrate their conformity with EU directives.

(See the charts on page 7 to see what products the PECA

agreements cover at present. More products will likely be

added in the future as harmonization efforts are completed.)

Contact information for Czech conformity assessment

bodies can be found at www.unmz.cz. The Czech and

Hungarian governments soon will announce which

conformity assessment bodies will be designated for

PECA-covered products. CEEBICnet will post this

Product Standards (Continued from page 3)

information once it becomes available.

 U.S. exporters should be aware that significant changes

are underway in the standards and certification procedures

throughout Central and Eastern Europe. Exporters can

consult CEEBICnet for updates on information and work

with the Department of Commerce’s Market Access and

Compliance Division (MAC) and the Foreign Commercial

Service in CEE countries to navigate through the changing

rules.

Contacts:

United States: Ms. Laurie Molnar, desk officer or Ms.

Melissa Wilson, desk officer, Market Access and Compliance (MAC) Central and Eastern Europe Division; tel.:

(202) 482-4915; fax: (202) 482-4505.

Czech Republic: Ms. Judy Ebner, commercial attache or

Jana Ruckerova, commercial specialist, U.S. and Foreign

Commercial Service, U.S. Embassy Prague; tel.: (420-2)

5753-1162; fax: 420-2)5753-1165.

Hungary: Mr. Scott Bozek, senior commercial officer, Ms.

Pamela Ward, commercial attache, or Kinga Svastics,

commercial specialist,U.S. and Foreign Commercial Service,

U.S. Embassy Budapest; tel: (36-1) 475-4236; option 5; fax:

(36-1) 475-4676.
Central and Eastern Europe Commercial Update 7

Standards and Certification Requirements for U.S. Products Entering Hungary

Product Category* Requirements Method**

PECA (hot water boilers, gas appliances, Conformity with relavent EU Testing and issuance of

good manufacturing practices for objectives. CE mark by Hungarianpharmaceuticals, good labratory notified body for that

practices for pharmaceuticals, product.

and medical devices)*

PECA (machinery, electrical Conformity with relavent EU Manufacturers selfsafety, electromagnetic compatibility) directives certification: affix

CE mark; prepare

declaration of conformity and technical file.

Other (products not covered by Conformity with Hungarian Product testing

PECA) national standards. and certification.

Standards and Certification Requirements for U.S. Products Entering

the Czech Republic

Product Category* Requirements Method**

PECA (hot water boilers, gas appliances, Conformity with relavent EU Testing and issuance of

good manufacturing practices for objectives. CE mark by Czechpharmaceuticals, good labratory notified body for that

practices for pharmaceuticals, product.

and medical devices. personal

protective, equipment, pressure

equipment, and protective systems

for use in potentially explosive

atmospheres.

PECA (machinery, electrical Conformity with relavent EU Manufacturers selfsafety, electromagnetic compatibility) directives certification: affix

CE mark; prepare

declaration of conformity and technical file.

Other (products not covered by Conformity with Czech Product testing

PECA) national standards. and certification.

*Procuct categories refer to EU "new approach" directives.

**In Hungary and the Czech Republic, medical equipment must also beregistered with the relevant authorities. See Commercial Service report on certification of medical

equipment in Hungary at www.mac.doc.gov/eebic/countryr/hungary/market1.htm; for the Czech Republic at www.mac.doc.gov/eebic/countryr/czechr/market.htm.
8 Central and Eastern Europe Commercial Update

Special Feature: Romania

Romania's overall performance has improved in 2000, with economic indicators showing positive growth after three consecutive

years of decline. According to data in a January 2001 report,

Romania’s GDP increased by 2.2 percent last year, to $36 billion.

Industrial output grew by over 8 percent in 2000 as a result of

increased exports, industrial restructuring, and more privatizations.

However, the annual average inflation rate was 45.7 percent, way

above the targeted rate of 27 percent. The year-end inflation target

was overshot as a result of a number of tax and utility tariff increases, the impact of the worst drought in 50 years, higher oil

prices, and the nominal depreciation of the leu, the domestic currency. Unemployment fell from 12.2 percent to 10.3 percent at the

end of 2000.

Exports for the first 11 months of 2000 stood at $9.52 billion, a

year-on-year increase of 23.4 percent increase, while imports reached

$11.51 billion, mainly responding to the need for more industrial

inputs. The resulting trade deficit of $1.98 billion through November was higher than the deficit of 1999 for the same period. Among

Romania’s most important exports were textiles, metallurgical products, electrical machinery and equipment, and footwear. Imports of

machinery and electrical equipment rose 16.6 percent in the first

eight months of 2000; increased imports of capital equipment were

the result of accelerated enterprise investment; imports of textiles

were up 11.7 percent, as raw materials and intermediate goods were

needed for the textiles and clothing sector.

Romania has been trading with the European Union (EU) countries,

the member countries of the Central Europe Free Trade Agreement

(CEFTA), the Organization of Petroleum Exporting Countries

(OPEC), as well as the United States. While the EU is Romania’s

most important trading partner (63.6 percent of total exports and

57.2 percent of total imports), trade with Central and Eastern European countries, including the Former Republic of Yugoslavia, Russia, Ukraine, and Moldova, increased in 2000.

As of January 2001, Romania cut import duties by 80 percent for

industrial goods from the European Union, European Free Trade

Agreement (EFTA) and CEFTA countries, Turkey, and Moldova.

Experts agree that the positive macroeconomic trends of 2000 will

continue this year, with an official GDP growth forecast at 4.5

percent. It is expected that domestic demand will be stronger and

the export-driven industrial output will continue to grow. However, since imports are likely to exceed exports, trade and current

account deficits will grow in 2001. It is anticipated that

policymakers will let the leu depreciate in nominal terms, thus

leading to moderately higher inflation than the targeted rate, with

consumer price inflation on a decreasing trend.

The International Monetary Fund (IMF) and the World Bank (WB)

are promising renewed external financing if Romania stays on the

course of sustained reforms. They cite a need for Romania to

implement IMF-mandated credible, consistent, and public reforms

IMF funding has a direct impact on foreign lenders and credit rating

agencies, as well as on both World Bank and EU funds.

The World Bank’s Country Assistance Strategy (CAS) for Romania, currently available in draft on the Internet (www.wb.org) makes

an excellent overview of the country’s decade of transition and

highlights some of the lessons learned.

The World Bank seems to agree with observers who note “there is

reason to believe the economic situation may improve.” However,

the draft CAS for Romania clearly states that economic improvement, “in line with the government’s own medium- and long-term

strategy,” is linked to simultaneous progress in three major areas:

restructuring and liquidation of the inherited, loss-making industries; accelerating private- sector growth; and implementing institutional and governance reform. The bank sees Romania’s development agenda structured on five pillars: (1) promotion of economic

growth; (2) institution building to strengthen the rule of law; (3)

greater access to opportunity; (4) strengthening of the social safety

net; (5) natural resource and environmental protection and sustainable development.

(This article is based on public information included in PlanEcon

Quarterly Report of January 19, 2001, the World Bank’s Draft Country Strategy for Romania, and multiple-source press releases.)

Romania – Growth Trends Likely to Continue in 2001

by Cristina Marine,international trade specialist, CEEBIC

This Special Feature:Romania is a new section that will appear periodically in Commercial Update. It

 designed to keep U.S. businesses aware of developments in the Romanian market. In addition to investment, export and business opportunities, it will feature articles on industry sectors with competitive advantage for Romania, legislative updates, and information on trade

regulations and customs. The Special Feature will also monitor the progress made toward the improvement of the business and investment

environment. If you have specific questions, suggestions, or comments, please contact the Special Feature coordinator and international

trade specialist for Romania, Cristina I. Marine, at tel. (202)-482-3462, fax (202) 482-3898.
Central and Eastern Europe Commercial Update 9

Basic Transportation and Customs Facts for Romania

by Bogdan Bartolomeu, managing director, SDV-SCAC Romania1

Shipping from the United States to Romania is relatively easy, as

most major international airlines and shipping lines are operating

on this route. However, there are a number of issues that have to

be carefully addressed before shipping the goods. Documentary

requirements for goods being imported into Romania are

complex. Shipments arriving without proper and/or correct

documentation are not released by customs, and U.S. exporters

will invariably incur additional expenses. It may be advisable to

use the services of an international freight forwarder with a full

service operation in Romania to avoid unnecessary costs and

delays. A list of freight forwarders specializing in Central and

and Eastern Europe is available on CEEBICnet.

Airfreight – Bucharest Otopeni Airport

The Otopeni International Airport is situated 10 miles north of

the capital city of Bucharest. The airport has two main runways

and can accommodate all types of aircraft. At present, it is

served by all major European carriers and all of these airlines

offer flights from the United States to their European hubs,

where one can make a connection to Romania. Although most

airlines will operate wide-body palletized aircraft upon leaving

the United States, the segment from the European hub to

Bucharest will be operated with short-haul narrow body aircraft,

which will drastically restrict the weight and dimensions of the

freight. The U.S. companies' forwarder will have to pay special

attention when booking the freight in order to make sure that it

can be accommodated on all the flight segments to Bucharest.

Most air carriers will also show cargo flights, with flight numbers

between the European gateways and Bucharest. However, U.S.

companies must bear in mind that these are Road Feeder Service

(RFS) numbers, which in fact indicate trucking. This type

negatively affects transit time increasing it from two to three

days to eight to ten days.

At present, no U.S. carrier offers direct flights to Bucharest. 

Some U.S. airlines will accept and transport the freight through

code sharing and/or partnerships with European airlines. When

using this type of operation, companies should be aware that the

computer systems of some European partners will not be able to

handle airway-bill numbers for U.S. carriers; it is an inconvenience that might lead to loss of freight and create difficulties in

tracing shipments.

Ocean freight – Port of Constantza

The Port of Constantza is one of the major ports on the Black

Sea, and can accommodate vessels up to 100,000 tons. There are

a number of special installations available in the port, such as an

oil terminal, grain elevator, roll-on roll-off (ro-ro) facilities, bulk

terminals for minerals and coal, and a container terminal.

Major shipping lines, such as Maersk-SeaL, CMA-CGM,

Evergreen, Happag Lloyd, and MSC, provide weekly container

services to Constantza. From the United States, most lines will

transship in one or two European ports before arriving at

Constantza. Transit time from East Coast ports is between 24

and 30 days on the average. Regularity and quality of service can

vary widely, and businesses are advised to consult with a freight

forwarder familiar with this route.

Upon arrival at the Constantza container terminal, the importer

has the option to clear customs with one of the local port

customs brokers, and then either pick up the freight or arrange

with a line to send the container on their own chassis to the final

point of destination. This is not a recommended procedure,

since customs clearance in Constanza is a rather difficult

procedure requiring the presence of the importer’s representative

in the port. (Look for the second part of this series on customs

regulations in Romania in an upcoming issue of Commercial

Update.)

A better solution is to have the container transited from

Constantza to an inland customs office close the final destination. This can be achieved by instructing your forwarder to

identify the appropriate inland customs offices for your customer

and request that the shipping line list as final destination that

particular customs point. It is important to note that transit

policies from the port of Constantza vary among shipping lines

and Romanian Customs sometimes changes procedures with very

short notice.

Intermodal – various sea and inland freight terminals

Special cargo can also use intermodal transportation such as (a) air

freight to a European airport and then trucking to final destination

Romania or (b) ocean freight to major ports in Europe and then

trucking to Romania. This type of operation is suitable and

efficient mainly for project cargo. Each operation should be

analyzed carefully, taking into consideration complex issues such

as licenses, permits, and customs regulations in each of the

countries transited.

1

 SCAC Romania is part of the European transportation group

SDV.
10 Central and Eastern Europe Commercial Update

At a press conference in Denver, Colo., in early February,

Mr. Dan Nica, the new Romanian minister of communications and information technology presented an upbeat

program of his agency. The minister noted a new government action program focusing on the development of the

communications and information technology sector. The

program includes:

• relaunching and continuing the privatization of communications entities;

• introducing and implementing legal and institutional

reform;

• encouraging the development of market competition

(granting licenses for voice telephony, supporting small

and medium sized enterprises, ensuring a better use of

radio frequency spectrum);

• introducing communications development programs,

including fixed lines for all communities with more than

1,000 people, the modernization of communications, and

enhanced broadband capabilities;

• launching the strategy for the modernization of public

administration by re-engineering the data flow between

public institutions, building up the public administration

infrastructure,developing applications to be used in

education,and establishing a single access point to public

information and multimedia centers.

Minister Nica also offered details on his agecy's six

priorities:

• Education: equipment for schools, training for teachers,

development of adequate teaching methods,and utilization

of these sites for adult education and retraining.

• Culture: support for the creation of cultural websites.

• Communications infrastructure: building a modern

infrastructure, systematic use of Internet standards,

training for civil servants, improvement of the government

services for the general public.

• E-commerce: implementing fiscal, financial, and administrative measures to assist companies in the utilization of

information technology and e-commerce;

• Research and Innovation: encouraging high-tech start-up

companies.

• Regulation: Updating Romanian law; preparing Romania

for accession to the European Union, and creating a more

favorable business environment that promotes the use of

information technology and attracts foreign direct investment.

As short-term actions, the Communications and Information Technology Ministry will launch projects that will be

financed through public and private sources. Examples

include:

• EDUC School and EDUC High School projects, which will

promote primary and secondary school access to the

Internet.

• The Virtual Library project, which will provide a

coherent electronic information environment by the

establishment of interconnectivity between Romanian

public institutions (libraries, museums, information centers)

and the public.

• Points of Electronic Information project, which will build

an integrated information system for public information.

• Multimedia Points project, which will facilitate access to

global information through the use of technology.

• The Unified Emergency Call System – 112 project,

which will help Romania to better respond to emergency

situations, such as earthquakes, floods, fires, etc.

• The development of rural telecommunications project,

which will provide communication services for rural and

mountain regions

• The modernization and the development of radio communications and TV networks project, which will facilitate

national coverage of the second channel of state TV and

modernize the broadcasting systems.

• A project for the implementation of a radio network for

data transmission using the point to multi-point technology to be implemented between 2002 and 2012.

• The implementation of the governmental infrastructure,

which will be developed in several stages. This infrastructure will be the backbone for e-government, to be implemented initially through pilot projects. The project starts in

March 2001 and will be completed by the end of 2004.

• Cyber Center, which will bring together the IT industry,

businesses, and Romanian universities.

Finally, in the regulatory sphere, the ministry explained that

by 2002, the Authority for the Regulation of Communications (ART) and the Inspectorate for Control and Monitoring of Communications and Information Technology Field

will be established.

(Based on the press conference of Mr. Dan Nica,

Romania’s minister of communications and information

technology, held Feb. 1, 2001, in Denver, Colo.)

Romania's Communications and Information

Technology Ministry Sets New Priorities
Central and Eastern Europe Commercial Update 11

Commercial Opportunities in Romania

Actanol SA – Equity co-investment

opportunity in alternative fuel production

plant. The facility will be located in the

south of Romania and will produce biodiesel

fuel, rape mulch, glycerin, and bioethanol.

This is a joint venture operation of

Romanian, German, and U.S. partners with

extensive experience in the field of

alternative fuels. The local component,

long-term export contracts, transportation

and distribution channels, and sustained

multiple source supply of rapeseed are

important elements for the success of this

project. For detailed information, call or

e-mail CEEBIC.

Alfa Global Solutions SA (AGS)

develops and implements business management software for small and medium-sized

companies. AGS staff has expertise to work

with various platforms, development

environments, and languages. AGS boasts

notable successes in administrative and

managerial business tools (financial

administration, stock, assets, and HR

management), e-commerce, security

software, graphics and image processing, and

Web games. AGS is looking for U.S.

partners to expand its activity portfolio and

to further diversify its business. For further

details, call or e-mail CEEBIC.

ALLPRO SA – $3.5 million investment

opportunity in tomato paste/juice facility

and fruit nectar facility located in southwest

Romania, in the Dolj County. Excellent soil

and climate conditions contribute to large

vegetable and fruit crops, that ensure

sustained supply of tomatoes, peaches, and

apricots with superior organic qualities.

Experienced management has a detailed

business plan and feasibility study that allow

for tight implementation schedule. For

detailed information, call or e-mail

CEEBIC.

Danube Delta Tours – Investment

opportunity in ecological tourism business

in the Danube Delta. The unique ecosystems of the Danube Delta consist of marine

levees, lakes, channels, streamlets, and

wetlands. This 4,152-km3 surface of water

and land is home to spectacular and unique

species of fauna and flora. This small

company has recorded sustained growth for

the past five years, and its professional

management secures year-round ecological

tourism programs. For further details, call

or e-mail CEEBIC.

EuroMallServices SA – Investment/

partnership opportunity in/ with this

company specializing in Web security,

networking solutions, Internet data secure

transmission, multimedia production, and

software production. In January 2001,

EuroMallServices launched “Incoterms

1990,” an excellent tool to navigate

Romanian customs regulations and business

legislation. For further details, call or

e-mail CEEBIC.

InSight Software provides quality services

of software consulting, development, and

integration. The company specializes in

overall project management and provides

special data capture services. Insight

software services cover, among others,

development and implementation of data

base applications, GIS, scientific and

industrial modeling or simulation algorithms, data security programs, and Internet

programming. InSight Software looks for

business partners in the United States. For

more details, call or e-mail CEEBIC.

POLIFARBE SA – Long-term partnership

opportunity with this company, located in

western Romania, producing varnishes,

paints, primers, and thinners. State-of-theart French equipment ensures sustained high

productivity and competitiveness of the

company’s diversified products. Experienced management team and proprietary

technologies are key to the company’s

success in a highly competitive European

market. For detailed information, call or email CEEBIC.

RomFiber SA seeks credit facility or equity

partner in the range of $400,000 to build a

fiber optic cable assembly and research

facility in Bucharest, Romania. Products to

be assembled include single-mode and multimode fiber optic cables and patch cords such

as: loose tube and buffered 62.5/125, loose

tube and buffered 50/125; 20/125. The

typical customers for RomFiber product are

companies in the high bandwidth provider/

user field. Industry data show that the fiber

optic market is growing at a rapid rate: the

$15 million market in 2000 represented a

500 percent increase over a two-year

period. For further details, please call or email CEEBIC.

What is your assessment of U.S. – Romanian trade relations

and what is your short and long-term vision of these

relations?

Romania has a long history as an important trade partner for the

United States in Central and Eastern Europe. Our exports have

grown from $70 – $80 million in the early nineties to $320 million

in 1997 – 1999. The volume of U.S. imports into Romania has

also increased during the same period. According to Romanian

customs data, bilateral trade reached $771 million at the end of

2000, and U.S. imports stood at $391.1 million last year. We

anticipate that the bilateral trade volume could reach $1 billion in

the near future. The United States was the fourth major investor

Eye on Southeast Europe (Continued from page 2)

in Romania in 2000, with a total investment volume of $663

million.

The Romanian government is keen to consolidate its cooperation

with the new U.S. administration in the framework of the

Strategic Partnership. Romania also participates in the South

Eastern Europe Cooperation Initiative (SECI) and in the Stability

Pact for the Balkans – both excellent opportunities for further

cooperation.
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Due to technical problems beyond

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you Commercial Update in February

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