Slovak Republic WT/TPR/S/91
Page 31
III. TRADE POLICIES AND PRACTICES BY MEASURE
(1) INTRODUCTION
1. Slovakia’s transformation to a market economy has been accompanied by significant trade
and investment liberalization.  Trade policy is playing a key role in Slovakia’s economic performance.
While it has generally resisted protectionist pressures, some exceptions apply, especially in
agriculture and certain manufacturing activities.  The current Government has accelerated the reformagenda in an effort to prepare Slovakia for EU accession by 2004.
2. Average MFN tariffs have declined during the review period, to 6.1% in 2001.  All duties are
ad valorem  and bound, almost entirely at applied levels.  Tariff reform has nevertheless been setback
by frequent recourse to widely applied import surcharges for balance-of-payments reasons.  The latest
surcharge, initially of 7%, was terminated on schedule from 1 January 2001.  Slovakia’s preferentialtariffs granted to the EU and other regional neig hbours, are much lower than its MFN levels, thereby
raising the prospect of trade diversion.  Most of Slovakia’s trade is conducted under preferential
agreements.
3. Slovakia applies some relatively high MFN tariffs, especially on certain agricultural products.
Seasonal duties also apply to certain flowers, fruit, and vegetables.  Agricultural liberalization hasbeen slowed by consistently not filling tariff quotas;  farmers benefit from a complex maze of direct
payments and other assistance arrangements, such as concessional loans and input subsidies.
Producers of a number of key commodities, such as malt and dairy products, are assisted by export
subsidies, and market price support is provided to many key commodities.  To date, special safeguard
provisions reserved for agricultural products were used only once, on ice cream.  General safeguard
action has been used only twice, albeit on agricultural commodities; previously on imported pigmeat
and currently on sugar.
4. Outside agriculture, there are few formal trade restrictions.  Slovakia has introduced anti-
dumping legislation since the last review, but has not taken such action to date.  Although subject to
greater monitoring and legislative controls, state aid continues to provide substantial assistance
throughout the economy.  Such assistance is likely to continue at high levels for some time, aimed at
facilitating industry restructuring.
5. Progress has been made in harmonizing Slovak standards and technical regulations with EU
and international norms.  Standards became voluntary from 1 January 2001, unless incorporated in
technical regulations.  Its comprehensive intellectual property protection regime continues to be
revised as part of EU accession requirements.  The main weakness appears to be enforcement.
Privatization has been accelerated in recent years, and the Government intends to divest a number ofnatural monopolies.  The Government is also taking steps to privatize and deregulate important
service sectors, such as telecommunications and financial services.
6. Competition policies have been strengthened and the role of the Antimonopoly Office
increased, with a view to controlling anti-competitive and monopolistic behaviour.  In addition, the
Government intends to set up several independent regulatory bodies for key services so as to aid
deregulation and privatization, such as the recently formed Telecommunications Office.WT/TPR/S/91 Trade Policy Review
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(2) MEASURES DIRECTLY AFFECTING IMPORTS
(i) Customs procedures
7. Customs legislation, administered by the Cu stoms Directorate, has been substantially
amended since the last Review.  Most of these changes reflect on-going efforts to harmonize
legislation with EU requirements.  Slovakia does not require preshipment inspection.1
(a) Valuation, clearance, and inspection
8. Slovakia introduced a new Customs Law on 1 July 2001. The law was introduced mainly to
align Slovak's customs procedures with those of the EU; according to Slovak authorities, it is now
fully consistent with these requirements.2  The main changes made related to the favourable tariff
treatment for goods having a special end-use, and standards applied to customs proceedings, offences,
bond, seizure, and organization.
9. Slovakia levies tariffs on the transaction value of imports.  The import’s value for duty
purposes is the c.i.f. (cost, insurance and freight from the exporting country) price paid or to be paid
for the product.  This is usually the invoice price, subject to certain adjustments, such as adding some
expenses, including packaging and container costs, and deducting others, like transport costs incurred
after arrival.  The new legislation provided clear rules for establishing customs value, and madeamendments to alternative valuation methods.  Transaction value can be rejected by customs if, inter
alia, the buyer and seller are related.  In such cases, the value is to be established by applying the
following alternative valuation methods: (i) tran saction value of identical or similar goods;
(ii) deductive method (i.e. the resale price less such costs as customs duties, taxes, and commissions);
and (iii) computed value, derived from costs of production, profit, and other expenses.  The importer
can request, in writing, an explanation from customs on how it determined the import value.
10. The WTO Committee on Customs Valuation has not examined Slovakia’s customs
legislation.  The latest customs legislation notified by the Government was that previously notified by
Czechoslovakia under the Tokyo Round Code.  However, Slovakia has indicated that this legislation
remained valid under the WTO.
3  Slovakia notified implementation of the Committee’s decision not
to include in customs value interest rate charges paid by buyers under financial arrangements to
purchase imports.4  It also notified that the Committee’s decision on valuation of carrier media
bearing software for data processing equipment w ould be implemented, by including in customs value
only the cost of the carrier medium itself, and not of the data or instructions, where these costs were
separable.  In addition,  Slovakia has incorporated the decision regarding cases where customs
administrations have reasons to doubt the truth or accuracy of the declared value.
11. Goods transiting through Slovakia may be released without payment of duty provided the
importer accepts liability for the customs debt and guarantees that the goods will leave the country as
intended.  Storage in public or private (in bond) customs warehouses is available, without time limit.
Special arrangements allow suspension of customs duties to enable certain inward processing of
imported products.5  If goods approved for inward processing are subsequently released on the
                                                          
1 WTO document G/PSI/N/1/Add.8, 28 September 1999.
2 The Slovak Republic is not requesting any derogation or transitional periods for the implementation
of customs legislation for EU accession.
3 WTO document G/VAL/N/1/SVK/1, 28 November 1995.
4 WTO document G/VAL/M/17, 14 February 2001.
5 Processing operations allowed include: (i) the processing of goods including their installation,
assembly, completion or combination with other goods or adaptation to other goods; (ii) the remaking of goods;Slovak Republic WT/TPR/S/91
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domestic market, customs duty is assessed on the imported products, and interest levied on the
delayed payment at currently 200% of the central bank discount interest rate.  Provisions also permit
imports to be processed, under customs control, into goods of a different tariff classification with a
lower tariff rate, provided there are no non-tariff restrictions.  Such processing under customs control
is permitted provided it does not circumvent any trade policy measures, and that the processed goods
cannot be transformed into their original state.   In addition, temporary imports, such as for re-export,
can be authorized upon request without payment of duties for a maximum duration of 24 months, but
this period can be extended.  Where imports are foreign owned, partial duty exemptions apply, with
3% of the relevant duty paid for each month, up until 34 months when the exemption phases out
completely.
12. Securing the customs debt, either by depositing cash or a bank cheque with customs or
arranging a third-party guarantee, usually a bank, is obligatory in some cases, where, for example,
customs authorities have reasonable grounds to believe that payment is at risk.  Customs debt is
payable within ten days, after which interest is charged.  Postponement of payment and payment by
instalments may be possible, subject to the debt, including interest, being secured.
13. Customs decisions may be appealed internally, or through other judicial instances.  Initial
appeals are made to the customs officers, based on the Customs Code and Administrative Law;  these
must be made within 30 days.  Any appeal must be submitted to the customs authority that issued the
decision.  If the relevant customs authority does not take a decision on the appeal (in autoremedy
procedure), the Customs Directorate or the Ministry  of Finance may review the decision.  Complaints
against customs decisions may also be made, within two months, to the courts.  The number of
appeals handled by customs was 1,222 in 2000, 1,080 in 1999 and 1,409 in 1998.  The number of
cases subject to judicial review has increased steadily in recent years, from 31 in 1998 to 42 in 1999and 75 in 2000.
14. Provision exists for customs to authorize simplified procedures for importers upon request.
There are several kinds of simplified procedures, covering transit and other arrangements;  any
importer meeting the legal conditions has access to the simplified procedures.  Slovakia is also a
member of the ATA Carnet System, whereby certain shipments covered by a carnet can be clearedthrough simplified importation procedures.  These in clude commercial samples, advertising materials,
and certain personal and professional items, such as computers, repair tools, scientific and medical
equipment, fine arts, jewellery, clothes, motor vehicles, live animals, and lighting and photographic
equipment.
15. Slovakia became a member of the World Customs Council in 1993.  It is also a signatory to
the International Convention to Facilitate the Importation of Commercial Samples and Advertising
Material.  From 1 January 1997, all imported advertising material must be in the Slovak language.
In 1999, Slovakia acceded to the convention on Customs Treatment of Pool Containers Used in
International Transport, and signed the Protocol of Amendment of the International  Convention on
Harmonization and Simplification of Customs Procedures in June 2000.  It has also been a member
since 2000 of the Nairobi Convention on Mutual Administrative Assistance for the Prevention,
Investigation and Repression of Customs Offences and acceded to the Convention Relating to
Temporary Admission in 2000.
16. Slovakia’s integrated customs tariff, issued initially in 2000, is consistent with the EC
Integrated Tariff (TARIC).  All customs declarations are registered electronically.  The customs
                                                                                                                                                                                    
(iii) the repair or adaptation of goods including renovatio n or restoring of the original state; (iv) the use of
equivalent goods which are not included in processed products but enable or facilitate their production and in
the process are partially or completely used.WT/TPR/S/91 Trade Policy Review
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service uses the declaration module DM1 and the ASYCUDA system.6  At present, this system
processes about 8.5% of customs declarations representing some 10% of the value of total imports.  It
is expected that up to 75% of customs declarations will be processed using ASYCUDA by end-2002.
17. Clearance times under normal procedures depend upon the type and volume of products
imported and vary substantially between ports.  Acco rding to the Slovak authorities, in very simple
cases the time taken from submission of the customs declaration to verifying the documents andreleasing the goods is approximately 15 minutes.  On average, the time taken to clear imports has
been reduced by half since Slovakia's previous Trade Policy Review.  These improvements are due
mainly to more stable foreign trade activities and enhanced selectivity in customs use of physical
controls.
18. A comprehensive risk analysis system of importers and products for customs control is being
developed.  ASYCUDA’s selectivity module, created as a technical tool for risk analysis, is being
tested.  Databases are also being prepared (for example, of non-paying importers and of high risk
goods) for use within the module.  These results will be used to introduce a four-colour scheme for
prescribing different levels of customs control.  This scheme is expected to become operational by
end-2002.
(b) Registration and documentation
19. Slovakia has no restrictions on the rights of individuals and entities, including foreign
companies, to import goods and services, subject to the terms and conditions specified in its customs
and trade-related legislation.  All entities registered in the business register (a public registration list
that entities must complete before commencing business) may engage in foreign trade.
20. To clear imports, a customs declaration document, the Single Administrative Document
(SAD), identical to that of the EU, must be lodged and the necessary documentation attached.
7  This
includes the invoice, declaration of customs value where goods exceed Sk 100,000, transportation
papers, appropriate certificate or proof of origin8, and any special requirements, such as licences, as
well as veterinary and phytosanitary certificates.9  From July 1997, the SAD became the only
acceptable customs declaration document.  Specif ic information, including the importers’ and
exporters’ details, data about securing of customs debt and bank data for customs payments, must alsobe supplied.  Advanced submission of documents is possible, but subject to the goods being presented
for clearance within a time period specified by cu stoms, after which the customs declaration becomes
invalid.
                                                          
6 The Automatic System for Customs Data is a computerized customs management system developed
by UNCTAD; it covers most foreign trade procedures, including the generation of trade statistics.
7 Decree of the Ministry of Finance No. 167/1997 on Laws on the Form, Content and Requirements of
the Customs Declaration and on the Maintenance of Records for the Purpose of Customs Statistics, as amendedby Decree of the Ministry of Finance No. 373/1997 and No. 3/1999.  From 1 July 2001, this was replaced by theDecree of the Ministry of Finance No. 251/2001 on Customs Law Provisions.
8 Importers must have the original certificate to clear the goods through customs. For imports
benefiting from preferential tariffs under bilateral trade agreements, the origin has to be proved.  This can be
either a movement certificate EUR.1 or the exporter's decl aration of origin on the invoice, on the transport
document or on other business documents.
9 Customs documents may be submitted electronically.  Oral declarations are allowed for commercial
goods if their total value is not above Sk 50,000.Slovak Republic WT/TPR/S/91
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(c) Rules of origin
21. Slovakia applies the same preferential and non-preferential rules of origin for imports as the
EU.  Non-preferential rules assign the origin to the country where the product was wholly obtained or
where it underwent its "last substantial, economically justified processing."  As of 1 July 2001, the
new Customs Law established that certain goods ha ve to meet specific processing requirements.
22. Slovakia’s preferential rules of origin apply to trade with its customs union partner (the Czech
Republic), the EU, CEFTA countries, EFTA states, Estonia, Latvia, Lithuania, Turkey and Israel.
Products are considered as originating in these countries if they were wholly obtained or sufficiently
processed there.  Sufficient processing is determined by a change in tariff classification; or by the
value added criterion (for most cases Slovak requirements specify a minimum of 60% local content);
or by meeting the specific processing stage required.
23. Since 1 January 1997, Slovakia has applied the concept of pan-European cumulation of origin
to all its free-trade agreements, except that with Israel.  This effectively merged numerous separate
free-trade zones into a Europe-wide network compri sing the EU, EFTA, CEEC and Baltic countries,
and Turkey.  This simplified customs procedures.  Products do not obtain "European origin" (there is
no full cumulation), but the origin of a particular country.  The product’s origin has to be proved by acertificate of origin every time it is imported into another country zone.  Whether it retains its
previous origin depends on the degree of processing in the new zone.  The rules of origin with Israel
are similar but cumulation is only possible with the Slovak and Czech Republics.
24. Rules of origin apply to developing country imports eligible for preferential tariffs under
Slovakia’s Generalized System of Preferences (GSP).  Prior to the adoption of the new Customs Law,
products originating in developing countries were considered to be those products which were wholly
obtained or processed in the developing country using original materials or materials from otherdeveloping countries, the Slovak Republic or third countries.  In the case of materials from third
countries (including materials of unknown origin), their value could not exceed  50% of the product’s
export price.  For the goods to receive preferential tariff treatment, the exporter’s  residence needed to
be in a developing or least developed country.  Since 1 July 2001, the new customs legislation has
introduced GSP rules of origin that are the same as those applied by the EU.  These have establishednew rules for fulfilling the conditions on sufficient processing, proving changes in origin, and creating
the possibility of regional cumulation.
(ii) Tariffs
25. Slovakia shares a common external tariff with the Czech Republic as part of their customs
union.  It uses the EU’s Combined Nomenclature (C N) classification, which is consistent with the
Harmonized System (HS).
10  From 2000, Slovakia will publish annually an integrated customs tariff,
which includes general (MFN) applied customs duties, bound rates, preferential tariff rates provided
under bilateral agreements and GSP, import surcharge rates, and tariff quotas.  The customs schedule
is issued annually on 1 January as a government regulation.
26. The tariff schedule contains two general duty rates.  The autonomous rate is in principle
applied to non-WTO members, and the conventional rate is the WTO bound rate.  Thus, the MFN
applied rate is the conventional rate, unless it is above the autonomous rate, in which case the latter
becomes the MFN rate.  The applied MFN rate is therefore the lower of the conventional (bound) and
autonomous rates.  Many non-WTO members area also eligible for this rate under bilateral
agreements requiring reciprocal MFN treatment.
                                                          
10 There is a one-to-one correspondence between the CN and HS up to the 6-digit tariff level.WT/TPR/S/91 Trade Policy Review
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27. Slovakia does not grant MFN treatment to nine non-WTO members.  No bilateral agreements
exist with these territories.11  These territories therefore face the autonomous tariff rate that is often
higher than the MFN tariff (or conventional) rate.  Oman was extended MFN treatment on becoming a
WTO Member in November 2000.
(a) Average levels
28. During the period under review, Slovakia lowered its simple average MFN tariff by 2
percentage points to 6.1% in 2001 (Tables III.1 and AIII.1).  Disparities in rates, as measured by the
standard deviation, also narrowed from 13.5 percentage points to 9.9 percentage points.  MFN rates
became increasingly skewed towards duties of between zero and 5%; these rates covered 45% of tariff
lines in 2001, up from 35% in 1995 (Chart III.1).  Th e share of duty-free items also increased, from
around 15% in 1995 to 19% in 2001, and the proportion of lines with rates exceeding 50% fell from2% to 1%.  Although the highest rates also declined, some very high rates of up to 125% remain.  The
share of goods subject to tariff spikes (duties exceeding the overall simple average rate by at least
three times) remained constant, at close to 5% of tariff lines.
Table III.1
Key features of the Slovak MFN tariff structure, 1995-2001
(Per cent)
1995 1998 2000 2001 2000
MFN U.R. EUa
Number of rates 254 241 193 207 198 521
Simple average tariff 8.0 6.9 6.1 6.1 6.1 6.7
Standard deviation (simple average) 13.5 11.2 9.9 9.9 10.0 12.7
Duty-free lines 14.8 15.9 18.7 18.7 19.5 21.3
Maximum tariff 232.7 168.1 125.0 125.0 125.0 462.9
Domestic tariff "spikes" (three times the overall tariff average) 4.8 4.5 4.8 4.8 4.9 4.8
Share of ad valorem  rates 100 100 100 100 100 90.3
Share of bound rates 100 100 100 100 100 100
By sector:
By HS :    Agriculture (HS 01-24) 15.6 13.3 11.6 11.8 11.8 16.7
                Industry (HS 25-97) 5.7 5.0 4.5 4.4 4.4 4.1
                WTO Agricultureb17.4 15.1 13.1 13.2 13.3 16.7
                WTO non-agriculturec5.5 4.8 4.4 4.3 4.2 4.5
By ISIC :  Agriculture (ISIC 1) 6.7 6.1 5.3 5.4 5.5 8.9
                Mining and quarrying (ISIC 2) 0.3 0.2 0.2 0.2 0.2 0.2
                Industry (ISIC 3) 8.2 7.0 6.3 6.2 6.2 6.7
                Industry excluding processing (ISIC 3-31) 5.9 5.1 4.6 4.5 4.5 4.2
a The data are based on the MFN ad valorem rates for 2000 and the ad valorem  equivalents (AVEs) for 1999,
adjusted for the rates applied in 2000; the adjustment has been made by proportionally scaling down the AVEs.
b HS chapters 01-24 less fish and fishery products (HS 0301-0307, 0509, 051191, 1504, 1603-1605 and 230120)
plus some selected products (HS 290543, 290544, 290545, 3301, 3501-3505, 380910, 382311-382319, 382360,
382370, 382460, 4101-4103, 4301, 5001-5003, 5105-5103, 5201-5203, 5301 and 5302).
c Excluding petroleum.
Note: Tariff averages exclude the in-quota rates and are based on the out-of-quota rates.
Source : WTO Secretariat.
                                                          
11 These are Antarctic territories, Bouvet Island, Heard Islands, Vanuatu, Western Sahara, Bhutan,
Comores, Nauru, and Western Samoa. Nevertheless, the last five countries qualify for GSP treatment.Slovak Republic WT/TPR/S/91
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01020304050
0 0 - 5 5 - 10 10 - 15 15 - 20 20 - 25 25 - 30 30 - 35 35 - 40 40 - 45 45 - 50 >50Note:
Source :0 - 5 should be interpreted as tariffs larger than zero and less or equal to 5%.
WTO Secretariat calculations, based on data provided b y the Slovak authorities.Chart III.1
Frequency distribution of MFN tariffs, 1995 and 2001
Percentage share of tariff lines
Tariff range ( per cent)2001
1995
29. Efficiency losses from Slovakia's tariff structure depend on both the average level of tariff
protection and the dispersion in rates across products.  The higher the dispersion, particularly within
groups of similar and thus highly substitutable products, the greater the likelihood of consumers' and
producers' decisions being distorted by the tariff st ructure.  On average, products with the highest
tariffs in 2001 were prepared foods, live animal an d animal products, and stone articles (Chart III.2).
30. EU accession is likely to result, overall, in a higher, and more disparate tariff structure for
Slovakia.  This will mainly be driven by higher agricultural tariffs in the EU, which in 2000 exceeded
Slovak 2001 levels on average by almost 50%.  The overall average EU MFN tariff in 2000, for
example, was 6.7% and the standard deviation was 12.7 percentage points (Table III.1).
31. Reductions in preferential tariffs have substantially exceeded those in applied MFN tariffs.
Consequently, Slovakia’s preferential tariffs are increasingly falling below MFN duties.  In 2000, its
preferential tariffs, excluding developing country preferences, averaged 2%, or about one third of the
MFN average rate (section (d) below).  Slovak MFN tariffs are also escalatory.  The tariff structurecontinues to provide lower rates on raw materials than on intermediate or processed products, thereby
affording higher levels of effective protection to manufactured goods.  In 2001, the average tariff on
processed products, of just over 7%, was more than double that of 3% on raw materials (Table III.2).
Capital goods, on average, in 2001 received more than double the MFN tariff protection level of
consumer goods, although many such imports are eligible for preferential duties.  Tariff escalation ismost pronounced between unprocessed and semi-processed products.  In some categories, the average
duty on semi-processed goods exceeds that for fully processed products, such as for "other
manufacturing" and "non-metallic mineral products" (Chart III.3).  The highest tariff escalation occurs
for "food, beverages and tobacco", and for "textiles and clothing".WT/TPR/S/91 Trade Policy Review
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0510152025Chart III.2
Applied MFN tariffs 1995 and 2001 and bound rates 2001, by HS section
1995 MFN rates
2001 MFN rates
Bound rates 2001Average 1995
(8.0% ) Average 2001
(6.1% )Per cent
Source : WTO Secretariat calculations, based on data provided b y the Slovak authorities.
Table III.2
MFN tariffs (simple average) by stage of processing, 1995, 1998, and 2001(Per cent)
1995 1998 2001
All products 8.0 (13.5) 6.9 (11.2) 6.1 (9.9)
By stage of processing:
        Raw materials 4.2 (13.6) 3.5 (12.6) 3.0 (11.4)
        Intermediate goods 6.0 (7.4) 5.3 (6.2) 4.7 (5.4)
        Processed goods 10.0 (15.4) 8.4 (12.6) 7.4 (11.1)
By function:
       Consumer goods 5.5 (3.0) 4.7 (2.8) 3.9 (2.7)
       Intermediate goods 6.0 (8.9) 5.1 (7.5) 4.6 (6.8)
       Capital goods 12.6 (20.0) 10.9 (16.7) 9.6 (14.5)
Note: Tariff averages exclude the in-quota rates; they are based on the out-of-quota rates.  The standard deviation is in bracke ts.
Source : WTO Secretariat.
32. Higher tariffs on agricultural products than on industrial products reflect mainly the
tariffication of variable levies by Slovakia during the Uruguay Round.  Slovakia adopted relativelyhigh MFN tariffs on products such as meat, dairy, potatoes, oilseeds, sugar, wine, alcoholic beverages,
and starches; tariff rates continue to be well above pre-tariffication levels on many of these products.
In 2001, MFN agricultural tariffs averaged 13.3%, more than three times that for manufactured
products, based on WTO classifications (Table III.1).Slovak Republic WT/TPR/S/91
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024681012141618Chart III.3
Tariff escalation by 2-digit ISIC industry, 2001
Per cent
Source: WTO Secretariat calculations, based on data provided b y the Slovak authorities.
Unprocessed
Semi-processed
Fully processed
33. A transparent feature of the Slovak tariff is that all duties are ad valorem .  Nevertheless,
considerable scope exists to rationalize and simplify the tariff structure by rounding off duties and
reducing the large number of different rates.
34. The complex nature of Slovakia’s tariff structure is increased by the existence of many
preferential rates (section (d)).  Ad valorem  seasonal duties also apply to 19 tariff items covering
certain fresh flowers, fruit, and vegetables, and provide greater tariff protection during the home
marketing season when imports compete directly with domestic production.12  Lower out-of-season
rates are contained in Annex 6 of the tariff schedule.  While the same product coverage exists as in
1995, the difference between the two tariff rates ha s generally decreased in line with MFN duties.
Nevertheless, substantially lower out-of-season rates apply to several products.  In-season and out-of-season rates vary as much as 100 percentage points on new potatoes and 13 percentage points on
certain cut flowers (Table III.3).  Some products, such as potatoes, pears, and apples, have two out-of-
season rates depending upon when they are imported.  Because the highest tariffs apply when
domestic production is marketed, consumers pay more for these products during the in-season.
                                                          
12 The products are roses, carnations, gladioli, chrysa nthemums, other flowers, new potatoes, tomatoes,
broccoli, cabbages/lettuces, rooted or German celery, cu cumbers, table grapes, cider apples, perry pears, sour
cherries, plums and strawberries.WT/TPR/S/91 Trade Policy Review
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Table III.3
Seasonal tariffs, 2001
(Per cent)
Tariff rateProduct Out-of-season periodIn-season Out-of-season Difference
Flowers
 - roses From 1.1 to 31.5 & 1.11 to 31.12 17 4 13
 - carnations From 1.1 to 31.5 & 1.11 to 31.12 17 4 13
 - gladioli From 1.1 to 31.5 & 1.11 to 31.12 17 4 13
 - chrysanthemums From 1.1 to 31.5 & 1.11 to 31.12 17 4 13
 - other From 1.1 to 31.5 & 1.11 to 31.12 17 4 13
Vegetables
 - new potatoes From 1.1 to 15.5
From 15.5 to 30.6100
100Free
8.5100
91.5
 - tomatoes From 1.1 to 14.5 & 1.11 to 31.12 12.7 Free 12.7
 - cauliflower & broccoli From 1.1 to 14.4 & 1.12 to 31.12 12 Free 12
 - cabbage lettuce From 1.1 to 31.3 & 1.12 to 31.12 11.8 Free 11.8
 - celeriac From 1.5 to 30.9 12 Free 12
 - cucumbers From 1.1 to 15.5 & 1.11 to 31.12 14 Free 14
Fruit
 - table grapes From 1.1 to 14.7 & 1.11 to 31.12 12 2 10
 - apples
- golden delicious From 1.1 to 31.3
From 1.4 to 31.715
1512
33
12
- granny smith From 1.1 to 31.3
From 1.4 to 31.715
1512
33
12
- other From 1.4 to 31.3
From 1.4 to 31.715
1512
33
12
 - other pears From 1.1 to 31.3
From 1.4 to 15.77
74.2
2.52.8
4.5
 - cherries From 1.1 to 30.4 & 16.7 to 31.12 8.5 2.5 6
 - plums From 1.1 to 30.6 & 1.10 to 31.12 7 Free 7
 - strawberries From 1.1 to 30.4 & 1.8 to 31.12 8.5 Free 8.5
Source : Slovak customs schedule, Annex 6.
(b) Temporary tariff reductions
35. The customs union enables Slovakia (and the Czech Republic) to temporarily set tariffs below
the common external rate.  These are determined annually and are valid for one year.  They arepublished in Annex 5 of the tariff schedule.  In 2001, lower duties applied to 151 tariff items, covering
mainly certain chemicals, synthetic yarns and fibres, and electric motors and generators.  The most
common temporary rate was "free".  These temporary rates apply to imports from all countries,
except from the Czech Republic.  However, the trade advantages of having such lower tariff rates may
be reduced by the uncertainty created by them being temporary and subject to annual review.
(c) Tariff bindings
36. Slovak tariffs are entirely bound at the applied MFN rate.  The only cases where applied MFN
tariffs are below bound levels are for those products temporarily designated with lower rates.
Comprehensive tariff bindings at existing rates provide a more predictable business environment for
Slovakia’s trading partners.
(d) Tariff preferences
37. Slovakia provides substantial, and deepening, tariff preferences to various trading partners
under regional free-trade agreements.  These include mainly tariff preferences for imports from theSlovak Republic WT/TPR/S/91
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Czech Republic, the EU, EFTA, and CEFTA members, as  well as from the Baltic States, Israel, and
Turkey (Chapter II).  GSP preferences are also exte nded to developing countries. Over two thirds of
Slovakia's imports come from preferential trading partners, with the EU accounting for about half of
total imports.  Consequently, a relatively low and declining share of Slovakia’s imports attract MFN
duties.
38. Tariff preferences under regional trade agreements vary considerably between trading
partners and across products (Table III.4).  Poland receives the lowest preferential average tariff of
1.9%, apart from zero for the Czech Republic, and Turkey the highest at 2.6%.  These differences
reflect mainly variations in preferential rates on agricultural products, which average 9% across
regional trading partners compared with duty free for industrial goods. EU imports, by far the largest
share, are dutiable on average at 2.4%; zero on industrial products and 10.8% on agricultural products.
Table III.4
Slovak tariff preferences by agreement and import volumes, 2001(Per cent)
Trading partnerShare of
total
imports
(1999)Simple
average
tariff rateAgricultural
products
(HS01-24)Industrial
products
(HS25-97)Raw
materialIntermediate
goodsProcessed
goods
Total imports 100.0
MFN trading partners .. 6.1 11.8 (9.1) 4.4 3.0 4.7 7.4
LDC 0.03 0.0 0.0 0.0 0.0 0.0 0.0
GSP .. 5.2 11.6 (8.9) 3.3 2.9 3.8 6.3
European Union 51.7 2.4 10.8 (6.7) 0.0 2.6 0.8 3.2
European Free Trade Association(EFTA)1.5 2.5 11.1 (8.5) 0.0 2.8 0.8 3.3
Central European Free Trade
Agreement (CEFTA)
   - Bulgaria 0.1 2.1 9.4 (7.6) 0.0 1.7 0.8 2.9
   - Hungary 2.3 2.1 9.2 (7.1) 0.0 1.6 0.7 2.8
   - Poland 2.8 1.9 8.4 (7.0) 0.0 1.2 0.7 2.6
   - Romania 0.1 2.1 9.5 (8.1) 0.0 1.7 0.8 2.9
   - Czech Republic 16.7 0.0 0.0 0.0 0.0 0.0 0.0
   - Slovenia 0.6 2.1 9.3 (7.4) 0.0 1.6 0.8 2.8
Estonia 0.0 2.5 11.0 (8.4) 0.0 2.5 0.8 3.3
Israel 0.1 2.5 11.7 (8.6) 0.0 2.8 0.8 3.5
Latvia 0.1 2.3 10.2 (8.3) 0.0 1.8 0.8 3.2
Lithuania 0.0 2.3 10.2 (8.3) 0.0 2.0 0.7 3.1
Turkey 0.2 2.6 11.8 (8.7) 0.0 2.8 0.8 3.5
.. Not available.
Note: Tariff averages in parenthesis are based on the in-quota rates.  All other tariff averages exclude the in-quota rates and are based
on the out-of-quota rates.
Source: WTO Secretariat, based on information provided by the Slovak authorities.
39. Slovakia allows preferential access to goods imported directly and originating from
developing and least developed countries under its GSP scheme.  Goods imported from the 48 listed
eligible least developed countries (Annex No. 4 of the tariff schedule) are duty free.  Many imports
from a further 98 listed eligible developing countr ies (Annex No. 3 of the tariff schedule) receive
either a full or partial (half) tariff preference.  Since Slovakia's 1995 Trade Policy Review, the number
of eligible least developed countries has increased by one, while the number of developing countries
has been reduced by four.  Eligible imports for GSP treatment are limited to an annual level of
US$2 million per country (Chapter II).WT/TPR/S/91 Trade Policy Review
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40. Slovakia’s GSP tariffs for developing countries averaged 5.2% in 2001, compared with an
average MFN rate of 6.1%.  GSP rates are substantially higher than average tariffs applied to its
regional trading partners.  The GSP margin of preference provided by Slovakia is negligible on
agricultural products, averaging 0.2 percentage points, while on industrial goods it is 1.1 percentage
points.
41. All products originating directly from least developed countries enter duty free. For
developing countries, the coverage of eligible goods is restricted to only about half of all tariff lines,
since sensitive products are excluded.  Goods classified as "non-sensitive" are importable duty free
while "less sensitive" goods receive a 50% tariff preference.13  The incidence of eligible items for
GSP treatment is much lower for agricultural products.  No preferences apply in 11 of the 24 HS
agricultural chapters, and with the exception of Chapters 8 (fruit and nuts), 9 (coffee, tea and spices)and 15 (animal and vegetable fats and oils), the incidence of preferential rates is well below 10%.  For
industrial goods, no preferences apply in Chapters 31 (fertilizers), 47 (wood pulp), 57 (carpets, etc),
66 (umbrellas, etc), 72 and 73 (iron and steel and articles thereof).
42. Slovakia intends to fully harmonize its GSP scheme with the EU scheme by end-2002.  This
may imply a change in the preferential access provided to least developed countries.
(e) Tariff exemptions and concessions
43. Machinery imported as a non-cash contribution of a foreign entity for manufacturing
production by a company with headquarters in Slovakia is exempt from customs duty and VAT
provided that the total value exceeds Sk 5 million.  Until 1 July 2001, the minimum non-financial
contribution was Sk 10 million, and the foreign entity’s equity share in the Slovak firm had to be at
least 35%.
44. Imports of new high technology equipmen t as defined by the OECD (contained in
HS chapters 84 and 85) by manufacturing and service enterprises, except for banking, insurance, and
distribution, established after September 1999, are also exempt from duty if imported after
1 July 2000.
14  The total value of imports must exceed Sk 5 million.  Imports of all individual parts
must be completed within three years, and used afterwards by the firm for a minimum of 3 years.
45. Slovakia has a system of tariff suspensions for inward processing and a drawback system.
Under the drawback system, duties paid on imported inputs are reimbursed if used to process goods
that are exported. Drawback is permitted where it is possible to identify the imported inputs in the
processed products exported.  According to the authorities, drawback is not used as widely as the
inward processing tariff suspension system.
46. Establishment of customs-free zones is provided for in the 2001 Customs Law, which
specifies the conditions that such zones must satisfy. Permission for customs-free zones is issued by
the Ministry of Finance.
                                                          
13 Non-sensitive products are identified in the GSP column of the tariff schedule with an entry of
"-100" (100% tariff reduction), and "less sensitive" products by an entry of "-50" (50% tariff reduction).
14 Regulation of Ministry of Finance No. 115/1999, 25 August 1999, and Decree of the Ministry of
Finance No. 191/2000 on Exemption of Machines, Machinery Equipment, Instruments and Tools from ImportDuty.Slovak Republic WT/TPR/S/91
Page 43
(iii) Import surcharge and balance-of-payments measures
47. Slovakia has used temporary import surcharges several times to protect its balance of
payments in accordance with WTO provisions (GATT Article XVIII:B).  The latest surcharge,
introduced at a rate of 7% from 1 June 1999 and reduced to 5% and then to 3% from 1 July 2000, was
terminated on schedule from 1 January 2001 (Decree of the Ministry of Finance No. 451/2000).15  It
had applied to about 80% of tariff lines, irrespective of source.  Certain agricultural and manufacturedproducts were excluded, such as most electrical machinery classified under Chapter 84 of the tariff
schedule.
16  Phasing out and eventually removing the surcharge improved Slovakia’s tariff structure
by reducing overall levels.  While a convenient short-term measure, reliance on import surcharges to
protect the balance of payments penalizes exporters and does not address the fundamental economic
causes of external deficits.
48. In 2000, the import surcharge collected Sk 9.4 billion, compared to Sk 3.7 billion in normal
duty collections.  Trade taxes represented about 12% of government tax revenue in 2000, but this
share will fall substantially in 2001 following the removal of the import surcharge.
49. From May 1997, Slovakia applied a non-interest bearing import deposit scheme equivalent to
20% of the invoiced import price, also for balance of payments reasons, as part of a wide-rangingpackage of monetary, fiscal and income policy measures taken to address the economic situation.
This scheme lasted for only a few months and was subsequently replaced in July 1997 by an import
surcharge.
(iv) Indirect taxes, customs fees, and other charges
50. Slovakia does not impose any fees or charges on imports, other than indirect taxes, which are
also levied on domestic production.
51. Imported and domestically produced goods and services are subject to VAT; excise duties
also apply to certain products, whether imported or not.  The current VAT system, introduced in
January 1993, is based on the main principles of the EU legislation, and has been amended recently to
further meet these requirements.  The VAT has two rates.  A basic or standard rate of 23% is levied
on most goods and a few services.  A lower rate of 10% (increased from 6% on 1 July 1999) applies
to certain goods, mainly food and other non-durable  consumer goods, including non-alcoholic drinks,
coal, and most services.  Exports of goods and services are zero-rated, thereby not subject to VAT,
and exporters are entitled to tax credits for VAT paid on their inputs.  Small firms (annual turnover in
three consecutive months below Sk 750,000)  do not have to be registered for VAT and are therefore
outside the scope of the tax.  Certain banking and financial services are exempt from VAT  but cannot
claim a tax credit for VAT paid on inputs.
52. Excise taxes, in the form of specific duties, apply to alcoholic beverages (spirits, beer, and
wine), cigarettes, fuels, and lubricants.  Rates of excise duties, except on wine,  have been modified as
from 1 January 2000.  Excise rates are levied on imported products under Slovak legislation, and are
additional to (not a component of) the customs duties.  Excise taxes on imported products are part of
customs debt, and the customs duty and excise tax are both included in the VAT tax base.  There issome relief from excise taxes for certain taxpayers, such as agricultural and certain service providers
who receive a refund of excise taxes paid on fuel inputs.  These tax rebates will apply until end-2001.
                                                          
15 WTO document WT/BOP/N/55, 17 January 2001.  The previous import surcharge introduced in
July 1997 was terminated from 1 October 1998.  Its introduction shortly followed the termination from1 January 1997 of the 10% import surcharge that was introduced in March 1994.
16 WTO documents WT/BOP/N/52, 31 July 2000 and WT/BOP/R/49, 25 May 2000.WT/TPR/S/91 Trade Policy Review
Page 44
53. Indirect taxes do not discriminate against imports.  VAT and excise duties are levied equally
on imports (at the point of entry) and domestically produced goods, using an equivalent tax base.  The
VAT is levied on the c.i.f. value of imports plus duty and excise tax, if applicable.
54. Slovakia intends to fully implement the taxation requirements of the acquis communautaire
by 1 January 2004.  A transitional period until end-2008 has been requested in a few areas, such as
raising VAT rates on energy products and lowering the registration turnover threshold to EU levels.Excise rates are to be harmonized progressively with EU levels prior to accession.
(v) Tariff quotas
55. Slovakia maintains tariff quotas under three categories: (i) MFN tariff quotas, implemented
under the WTO, on agricultural products, aimed at ensuring minimum and current market access;
(ii) other temporary MFN tariff quotas; and (iii) mainly preferential tariff quotas agreed underregional free-trade agreements.
56. All tariff quotas, except for a few temporary MFN quotas applied mainly to certain glass,
chemicals, and textile fibers, apply to foodstuffs, including alcoholic beverages and tobacco
(Table AIII.2).  MFN and preferential tariff quotas frequently apply to the same products.  In these
cases, Slovakia also includes preferential imports in administering the multilateral quotas notified tothe WTO on agricultural products.  These annual tariff quota levels and in-quota rates are published in
Annex No. 2 of the tariff schedule.  All in-quota duties are ad valorem .  The preferential margin of in-
quota tariffs is falling over time as MFN (above-quota) rates decline.  However, as indicated below,
because many tariff quotas remain consistently unfilled, tariff protection is set by the in-quota duty, so
that reducing above-quota rates alone has little impact on reducing agricultural assistance for many
sensitive products.  Differences exist in the product coverage of tariff quotas and in the quota levels
applied by the Slovak and Czech Republics.
57. MFN tariff quotas apply on 24 agricultural product categories, covering mainly live animals
and meat, dairy products, potatoes, grapes, starches, oil seeds, margarine, certain sugars, pasta,
sweetened waters, wine and spirits (Table AIII.2) .  Above-quota rates were set at bound levels.  In-
quota rates on these products averaged almost 30% in 2001, and ranged from 5% on live sheep meat
to 70% on strong un-denatured alcohol.  Differences between in- and above-quota rates ranged fromas low as 1% on certain sunflower or safflower oil to as high as 105% on certain sheep meat.
58. All tariff quotas  are applied globally, and are administered by the Customs Directorate.
Import entitlements are allocated automatically among importers on a first-come, first-served basis
according to importers’ applications.  The Slovak Republic does not reallocate unused quota to other
importers.  MFN and other temporary MFN tariff quotas (including annual levels and in-quota rates)are published in Annex No. 2 of the tariff schedule.  Remaining preferential tariff quotas are
published in the Integrated Customs Tariff and are accessible on the Internet.   Information on quota
utilization (updated daily) is available at all customs offices and published weekly in the economic
gazette.
17
59. Tariff quotas have been consistently under-utilized (Table III.5).  In 2000, the average quota
utilization rate was 34%, compared with 46% in 1999 and 45% in 1998; the average utilization rate
for this three-year period was 42%.  In 2000, there were no imports of live sheep and meat, meat offal,
milk and cream, rapeseeds and oil, or strong et hyl alcohol.  Over three quarters of the product
categories had utilization rates below 40% in 2000.  In the same year, quotas were fully utilized only
for potatoes, other sugar, ice cream, and grape wine.  Low utilization rates suggest that the in-quota
                                                          
17 WTO document G/AG/N/SVK/29, 5 April 2001.Slovak Republic WT/TPR/S/91
Page 45
tariff duties on these products are set too high given market conditions to make all in-quota imports
feasible.  Utilization rates of these MFN quotas are even lower if preferential quota imports that also
count towards such quota are excluded.  Preferential quotas overlapped in eight product categories in
1999, and excluding these imports reduced the average utilization rate on an MFN basis from 46% to
38%.18
Table III.5
Usage of agricultural tariff quotas, 1998-2000(Per cent)
Product category 1998 1999 2000Three-year
average
Live bovine animals and meat 67 52 30 50
Live swine animals and meat 68 100 19 62
Live sheep and meat 94 59 0 51
Poultry meat 18 33 39 30
Meat offal, salted, in brine, dried 1 0 0 0
Milk and cream 3 1 0 1
Yoghurt 91 100 17 69
Butter 4 15 11 10
Potatoes 69 14 100 61
Grapes, fresh 0 53 44 26
Starches, inulin 4 2 10 5
Rape seeds 0 0 0 0
Sunflower seeds 15 13 3 10
Sunflower-seed oil 46 26 2 25
Rape oil 0 0 0 0
Margarine 15 15 7 12
Other sugars 75 80 100 85
Pasta 61 85 59 68
Ice cream 100 100 100 100
Waters, sweetened 28 56 8 31
Wine of grapes 100 100 100 100
Undenatured ethyl alcohol (over 80% alcohol by volume) 20 0 0 7
Undenatured ethyl alcohol (below 80% alcohol by volume) 57 48 1 35
Dextrines and starches 100 100 3 68
Average 45 46 34 42
Source : WTO documents G/AG/N/SVK/27, 26 March 2001; G/ AG/N/SVK/21, 18 April 2000; and G/AG/N/SVK/15,
12 July 1999.
60. According to Slovakia, the continued sharp fall in fill rates of tariff quotas on milk and cream
was due to the high level of imports from the Czech Republic.19  These enter duty free under the
customs union while in-quota rates of 30% apply to MFN imports.  For live animals, the low quota fill
                                                          
18 The overlapping product categories were: live pigs and meat (500 tonnes for Hungary); poultry meat
(300 tonnes for the United States); meat offal (100 tonnes each for Hungary and Poland); milk and cream
(200 tonnes for the EU); butter (160 tonnes for EU); potatoes (2,000 tonnes for Hungary, 1,000 tonnes for the
EU); wine (200 tonnes for Hungary); and undenatured ethyl (below 80%) alcohol (1,000 tonnes for Hungary,200 tonnes for Poland). In 1999, preferential imports included in the MFN quota levels represented 18% of totalin-quota imports.
19 WTO document G/AG/R/23, 27 July 2000.WT/TPR/S/91 Trade Policy Review
Page 46
was due, according to the authorities, to sufficient  domestic supplies and the resulting low demand for
imports.20  MFN in-quota tariffs are 30% on live cattle, beef, and pig meat; 25% on live pigs; 20% on
sheep meat; and 5% on live sheep.  The authoritie s attributed the low fill rates on rapeseed and
rape oil to self-sufficiency and the competitiveness of domestic production.21  MFN in-quota tariffs on
these products are 20%.
61. Preferential tariff quotas on imports from regional trading partners cover a much wider range
of agricultural and beverage products, including beer , as well as tobacco products (Table AIII.2).  The
number of countries and products receiving such preferential tariff quotas has increased since the last
review of Slovakia in 1995.  The in-quota rates are usually expressed as a percentage of the MFN
tariff and thus are reduced as the MFN rate declines.  Increases in these quotas are not typically called
for in the agreements, but in many cases the parties are negotiating further liberalization.  Unusedquota from any preferential country is not reallocated to other countries.
62. According to the Slovak authorities, temporary MFN tariff quotas are set annually and used
mainly to increase imports of inputs necessary for Slovakia’s production and development.  MFN
tariff quotas are also used periodically to lower tariffs temporarily below MFN levels when a product
is in short supply.  Their imposition requires the agreement of the Czech Republic.  In 2000, 18product categories were covered, including mainly agricultural products, certain glass, and textiles.
The in-quota rate on all these products was zero.
(vi) Trade prohibitions and sanctions
63. Slovakia does not apply any import prohibitions.  It currently enforces several trade sanctions
in compliance with UN resolutions.  These currently cover trade with Iraq, Angola, Sierra Leone,
Liberia, and Afghanistan.
(vii) Import licensing and quantitative restrictions
64. Slovakia liberalized its import licensing system during the review period.  In particular, a
number of products have been removed from the list of non-automatic licensing, such as uranium,
lignite, fuel items of nuclear reactors, and waste paper.  Automatic import licences still apply to a
range of sensitive goods for statistical and monitoring purposes, including agricultural and food
products, tobacco products, chemicals, used textile products, poisons, and pharmaceuticals(Table AIII.3).  Importers are granted licences with in 14 days of application, usually in full.  Goods
subject to import licences are published annually by the Ministry of Economy.   In addition, Slovakia
maintains automatic licences on a range of products for security reasons, such as explosives and
firearms.
65. Non-automatic licensing involving volume limits (quantitative restrictions) applies to a small
number of sensitive products.  Quotas were recently introduced on imports of shoes from China.  The
annual quota of  2.5 million pairs is due to expire at end-2004.    In May 2001, Slovakia introduced
quantitative restrictions on imported sugar based on safeguard measures.  Imports of sugar from the
Czech Republic are limited to 3,500 tonnes annually, and will apply until end-2002.  Imports of sugar
from other countries are limited to 3,900 tonnes and will apply until 2004.  Beer and non-alcoholicbeverages, including sweetened mineral waters, imported from the Czech Republic are also subject to
an annual quota of 540,000 hl and 532,000 hl, resp ectively.  These quotas, which according to
authorities are substantially under-filled, are due to terminate at end-2001.  Such quotas with the
Czech Republic have been applied under safeguard provisions contained in the customs union
                                                          
20 WTO document G/AG/R/23, 27 July 2000.
21 WTO document G/AG/R/23, 27 July 2000.Slovak Republic WT/TPR/S/91
Page 47
arrangements.  Import entitlements are allocated on a first-come, first-served basis or among
importers according to their historical import levels.  During the review period, Slovakia removed
non-automatic licences on imports of coal and fuels.
(viii) Anti-dumping and countervailing actions
66. During the review period, Slovakia enacted legislation on anti-dumping, effective from
1 July 1997 (Act No. 59 of 6 February 1997).22  The legislation applies "unless otherwise stipulated
by an international agreement binding on the Slovak Republic".  Slovakia has not taken any anti-
dumping actions to date.23  The Slovak legislation was reviewed in the WTO Committee on Anti-
Dumping Practices in April 1998.24
67. The Ministry of Finance is responsible for administering anti-dumping measures.  It conducts
the investigation to ascertain if dumping has occurred and whether the imports are causing orthreatening to cause "material" injury to domestic producers.  In determining these and other related
matters, the Ministry shall request, early in the process, the written opinion of the Ministries of
Economy and Foreign Affairs.  It is also required to request an opinion from the Antimonopoly Office
from the point of view of protecting economic competition.  This requirement explicitly recognizes
the anti-competitive nature of anti-dumping actions, and therefore, in principle at least, provides afurther constraint on its use.  However, althoug h the Office indicated that such opinions would be
provided in accordance with its legislation, precisely how this would operate in practice, and the exact
role of the Office in anti-dumping cases appears to be unclear.  This uncertainty is accentuated by the
lack of any specific details in the anti-dumping legislation, and since no anti-dumping cases have
occurred to date, no such opinions have been requested.  It would seem that the Office’s role is
limited to providing an opinion, which has no legal enforceability.  Thus, the Ministry of Finance
could still find in favour of an anti-dumpi ng action even though the Antimonopoly Office had
expressed anti-competitive concerns from such action.  It appears that the importer would not be able
to challenge the decision based on these opinions.
68. Slovakia has also adopted legislation on countervailing measures (Act No. 226/1997 On
Subsidies and Countervailing Measures).  This is administered by the Ministry of Economy.  To date,
no countervailing actions have been initiated.  The legislation requires the Ministry of Economy torequest an opinion from the Antimonopoly Office on whether such action should be taken against
subsidized exports.  No such requests have been made to date.  However, as for anti-dumping, the
Office’s precise role in the application of these arrangements appears ambiguous.
(ix) Safeguard actions
69. Slovakia introduced legislation on safeguards, effective 1 September 1997 (Act on Import
Safeguard Measures No. 214, 2 July 1997).
25  The Ministry of Economy administers the legislation.
Slovakia's safeguard legislation was reviewed in the WTO Committee on Safeguards in April 1998.26
70. In conducting investigations, the Ministry is required to request the opinion of the
Antimonopoly Office on whether to take protective measures.  As for anti-dumping and
countervailing cases, the Office’s precise role appears ambiguous.  Slovakia has taken two safeguard
                                                          
22 WTO document G/ADP/N/1/SVK/2, 31 July 1997.
23 WTO document G/ADP/N/59/Add.1/Rev.1, 20 October 2000.  According to the authorities, the latest
safeguard measure taken on sugar was initially raised as an anti-dumping complaint by the domestic industry.
24 WTO document G/ADP/M/12, 9 September 1998.
25 WTO document G/SG/N/1/SVK/2, 6 October 1997.
26 WTO document G/SG/M/11, 29 July 1998.WT/TPR/S/91 Trade Policy Review
Page 48
actions, both involving agricultural products.  However, unlike for its investigations on non-
agricultural products, the Antimonopoly Office did not record its opinions on these cases in its Annual
Report.27  In total, the Office issued 17 standpoints of which ten opinions concerned agricultural
products.
71. In May 1999, an investigation was initiated on the importation of fresh, frozen and chilled pig
meat (tariff heading 0203).28  The Government introduced provisional safeguard measures on
21 May 1999, in the form of an additional tariff of 43.7%, on all imports of pig meat, except meat
originating from the Czech Republic and developing countries.29  The duration of the measure was
limited to 200 days.  In October 2000, another investigation was initiated on sugar (cane or beet sugar
under tariff heading 1701).30  Measures were introduced on 1 May 2001 in the form of an annual
quota on such imports originating from all countries, except the Czech Republic and developingcountries.  This quota will apply for four years.  Poland has the largest quota, set at 3,500 tonnes
annually in 2001 and 2002, rising to 4,000 tonnes in 2003 and 4,600 tonnes in 2004.  The total quota
for all other exporters is 400 tonnes in 2001 and 2002, increasing to 500 tonnes in 2003 and
600 tonnes in 2004.
31
72. On industrial products, the Antimonopoly Office has provided seven opinions to date, based
on its own investigations.  In 2000, it provided an opinion to the Ministry of Economy that a
safeguard action against Chinese imports of leather products was unsubstantiated.32  This case was
terminated in June 2000 without any safeguard action taken.  In 1999, four opinions were given.  In
two of these, involving imports of bricks and of crushed stoneware from all sources, the Office
disapproved the adoption of protective measures ag ainst imports on the grounds that this would be
inconsistent with its competition objectives and would harm consumers.  These cases were
subsequently terminated.  In the third case, invo lving imports of wooden internal doors from the
Czech Republic, the office did not recommend additional duties on imports, and indicated that if
applied, they should be for a short period only.  In the fourth case, involving imports of flat rolled iron
products from the Russian Federation and the Ukraine, the Office supported the imposition of
additional duties to protect local producers from increased imports of low-quality goods.  In this case,
it was concluded that application of safeguard measures should prevent a worsening of thecompetitive environment.  No safeguard action was taken in any of these cases.  
73. Slovakia has also retained the right to use transitional safeguard measures under the WTO
Agreement on Textiles and Clothing.  It has not applied such safeguard actions to date.  It submitted
its third stage list of textiles and clothing products, covering 18.5% of the quantity of imports in 1993
(the first year of existence of Slovakia),  that are to be integrated into GATT 1994.
33  Expressed at the
six-digit HS level, this list covers yarns, fabrics, made-up textiles and clothing.
74. In addition, Slovakia reserved the right to take transitional safeguard actions on agricultural
products tariffied in line with the WTO Agreement on Agriculture.  So far, it has taken such action
                                                          
27 According to the authorities, the Office’s Annual Report records only selectively the opinions it
provides because of the substantial number involved.
28 WTO document G/SG/N/6/SVK/1, 19 May 1999.
29 WTO document G/SG/N/7/SVK/1, 8 June 1999.
30 WTO document G/SG/N/6/SVK/2, 6 November 2000.
31 WTO document G/SG/N/8/SVK/1, 2 May 2001.
32 Antimonopoly Office (2000), p. 33.
33 WTO document G/TMD/N/378/Corr.1, 15 February 2001.  Previous lists were notified in WTO
documents G/TMB/N/247/Corr.2, 18 November 1997 (second stage covering 17.8% of the quantity of 1993imports) and G/TMB/N/88/Add.1 (first stage covering 16.1% of 1993 imports).Slovak Republic WT/TPR/S/91
Page 49
once, in August 1997, when special safeguard measures were implemented on ice cream imports.34
The measure consisted of an additional import duty of 41%, unless imports originated from the
Czech Republic.  The measure was terminated in January 1998.
(x) Standards and other technical requirements
(a) Standards, testing, and certification
75. Slovakia is harmonizing its standards and technical regulations with those of the EU as part of
its EU accession process.  To meet these requirements, several new laws and regulations have been
introduced during the period under review.  Legislation, effective 1 January 2000, on Technical
Requirements for Products and on Conformity A ssessment (Act No. 264/1999), contained many
principles of EU legislation, and introduced many  elements of the EU’s New and Global Approach
into Slovak legislation.  These changes have generally simplified Slovakia’s testing and certificationrequirements.  The new legislation reaffirmed the Office of Standards, Metrology and Testing as the
central state body in the area of technical standardization and conformity assessment.  The Office
accepted the Code of Good Practice for the Preparation, Adoption and Application of Standards from
September 1995.
35  The Slovak Institute for Standardization (SUTN) took over this acceptance in
May 2001.
76. The Office is responsible for formulating government policy on standardization and for
supervising the transposition of EN, ISO and IEC standards, which support the EU legislation.  The
Office designated, as from 17 January 2000, the SUTN as the National Standardization Organization
(NSO)  responsible for the development, a pproval and issuance of Slovak standards
(Act No. 264/1999 Coll.).  It writes, publishes, and maintains both a register and database of Slovak
and European standards.36  The Institute establishes Technical Standardization Committees to set and
review standards.37  The SUTN is also responsible for de veloping cooperative links and executing
Slovakia’s membership of international and European standardization organizations.  SUTN is a
member of the International Organization for Standardization (ISO) and the International
Electrotechnical Commission (IEC), as well as an affiliate member, without voting rights, of the
European Committee for Standardization (CEN), and the European Committee for Electrotechnical
Standardization (CENELEC).  Based on a contract with the Office, SUTN fulfils the activities of
Slovakia’s enquiry point with the WTO under the TBT Agreement and, with the agreement of the
Ministry of Agriculture, the activities of contact point for the SPS Agreement.  In July 2000, SUTN
concluded an agreement with the Czech Standards Institute on mutual cooperation in EN transposition
whereby it acquired over 4,000 Czech EN transposed standards.
77. Slovakia inherited many national standards from the former Czechoslovakia, and began
introducing its own standards (STNs), mainly as te mporary measures, pending EU alignment.  This
process has accelerated recently.  The Government’s main policy objectives on standards and
technical requirements are to protect public  interest  and to achieve full compatibility with the EU.  A
Legislative Council Working Group was established in January 2000 (Government Resolution
No. 17/2000) to review technical regulations, including their compliance with EU requirements.  Thenumber of national standards continues to increase, due to the adoption of EU standards.  At end-
March 1999, Slovakia had 19,500 standards, of which 75%, or 14,625, represented national standards;
                                                          
34 WTO documents G/AG/N/SVK/22, 18 April 2000, and G/AG/N/SVK/16, 12 July 1999.
35 WTO document G/TBT/CS/2/Rev. 7, 8 February 2001.
36 Databases also contain international and other foreign standards.
37 There are currently 83 Committees, covering mechan ical engineering (24), civil engineering (17),
electrical engineering (19), chemistry and agricult ure (13), environment (4) and miscellaneous (6).WT/TPR/S/91 Trade Policy Review
Page 50
14% (2,769), European standards; and 11% (2,145), adopted from international standards.38  At end-
May 2001, the number of standards had increased to 23,199; national standards represented  62%
(14,477), European standards about 27% (6,423), and the remaining  10% (2,236) were international
standards, mainly ISO and IEC standards.  The Slovak Institute for Standardization (SUTN)  plans to
have transposed  about 80% of European standards to the Slovak set of standards, including
cancellation of conflicting Slovak standards, by end-2001.  It intends to apply EU standards orrelevant international standards, where they exist, and would adopt European standards over
international ones if then differed.
78. In line with its objective of harmonizing standards, certification and testing procedures with
the EU, Slovakia’s standards became voluntary from 1 January 2001.  This represented a major
change from using mandatory standards.  The new legislation makes conformity with Slovakstandards voluntary, unless required under other technical regulations.  Slovak standards remain
mandatory only if they are directly included in a technical regulation.  Mandatory certification is also
specified under this legislation for so-called "determined products".
39  Determined products, once
certified, can carry the Slovak conformity mark.  Foreign, including EC, marks are recognized under
the conditions stipulated in §33 of Act 264/1999 Coll.
79. Mandatory technical regulations, voluntary harmonized standards, and standards suitable for
conformity assessment, used by accredited Slovak testing agencies, manufacturers, and importers,
apply to a large number of products that are considered a threat to safety, health, and the environment,
such as foodstuffs, kitchen appliances, electrical equipment, engineering products, agricultural
machinery, plastics, paints, polishes, cosmetics.  Obligatory technical standards were introduced
but subsequently removed on many products, such as outdoor shoes40, ceramic tiles41, textiles and
clothing42, and mineral waters.  From 1 February 2001, foodstuffs have not been certified but the
manufacturer or importer must issue a declaration of  conformity on the basis of tests performed by an
authorized or accredited body.43  New foodstuffs are also subject to approval by the Chief Hygienist.
Engineering products and agricultural machinery are assessed according to Governmental
Ordinance No. 391/1999 Coll. and Governmental Ordinance No. 475/2000 Coll. on technical
requirements for machinery.  As from 1 February 2001, cosmetics were excluded from GovernmentalOrdinance No. 400/1999 Coll. so their sale is not restricted by certification. Paints and polishes are
subject to conformity assessment, which is within the competence of the Ministry of Construction and
Regional Development (Act 90/1998 Coll. on construction products).  Plastics are subject to
conformity assessment only as products that come into contact with foodstuffs.
80. Certification and conformity assessment is performed by authorized testing agencies.  These
must be accredited by the Slovak National Accreditation Service, the independent national
accreditation body since January 2000 (Act No. 264/1999 Coll. On Technical Requirements for
Products and on Conformity Assessment).  The Service, established in 1993, has been a member of
the European Accreditation Agency since 1998.   ISO rules on accreditation are applied.  As at end-
                                                          
38 Slovak Institute for Standardization (2000), p.6.
39 These are products whose specification is given in the relevant Slovak ordinances and are subject to
third party assessment and issued with an EC type certificate.  Such products are equally assessed in the SlovakRepublic (see for example, Machinery Directive 98/37/EC, Annex 4).
40 Introduced in September 1997 and terminated in 2001.
41 Introduced in 1996 but terminated in July 1998 when the new Construction Product Law was passed.
42 Introduced in July 1997 and terminated in November 1997.
43 Decree No. 27/2001 Coll. of the Ministry of Agriculture (Amendment to Decree No.36/1997 Coll. of
the Ministry of Agriculture) on the notification of the production of foodstuffs, tobacco products, and cosmetics,and on the conditions for putting them into circulation.Slovak Republic WT/TPR/S/91
Page 51
May 2000, 38 testing entities had been accredited.  All national authorized testing centers are
accredited.
81. Slovakia recognizes foreign documents or foreign marks as proof of conformity assessment
for certification, under reciprocal mutual recognition agreements.  Slovakia concluded an agreement
with the Czech Republic on mutual cooperation in  standardization, metrology and testing.  Both
countries generally accept each other’s technical standards, quality certificates, and safety and testingprocedures on a reciprocal basis.  Slovakia also has similar bilateral agreements with other countries,
including Poland, Russia, Bulgaria, Belarus, Slovenia, the Ukraine, and Romania.  CEFTA members
took additional steps during the review period to mutually recognize each other’s certification and
testing procedures.   Slovakia has also been negotiating a protocol on conformity assessment with the
EU (PECA) covering both acceptance of test results and recognition of certificates, which is due tobecome operational in 2002.  It is also expected to become a member of the multilateral agreement for
mutual recognition of certificates and reports issued by accredited bodies (MRA).
82. According to the authorities, standards, ce rtification, and conformity assessment apply
uniformly to imports, and no longer represent a significant impediment to trade.
44  One substantial
improvement was the introduction of "self-declaration" certification by the manufacturer or importerprior to sale on the market for many products.  As relevant EC directives gradually become
incorporated into the Slovak legal system, its procedures for conformity assessment will be
increasingly governed by the same principles as those in EC Member States; i.e. in the majority of
cases, the manufacturer or importer issues the declaration of conformity and places the product for
sale on the Slovak market.  Nevertheless, certification procedures may still involve substantial delays
and cost.  Certification is sometimes  applied on the basis of an importer rather than a product, and is
for a limited duration, requiring re-certification.  However, for products assessed according toGovernmental Ordinances from January 2001, certification is issued for the same period as in EU
Member States, and according to the conformity  assessment module chosen by the manufacturer.
83. Effective September 1997, quality certificates have applied to certain products, including
imports.  It is estimated that these apply to about 9% of imports.
45  ISO 9000 series of standards are
being used increasingly as evidence of product quality.
(b) Sanitary and phytosanitary arrangements
84. Under the Food Code of Slovakia (Act No. 152/1995 On Foodstuffs) and the Act on
Protection of Human Health (No. 272/1994), many agricultural products and their processing points
are subject to hygiene and health testing procedures to ensure that foodstuffs are fit for human
consumption.  This legislation sets maximum residue limits for contaminants, including maximumaflatoxin levels.  According to the authorities, these requirements apply uniformly to imported and
domestic foodstuffs.  These are set and implemented jointly by the Ministries of Agriculture and
Health in line with the regulations contained in the Codex Alimentarius of the Slovak Republic.  The
Preventive and Clinical Medicine Institute assesses the toxicological properties of plant products to
protect human health.
                                                          
44 A 1999 FIAS Investment Report noted that foreign investors had identified obtaining certification of
imported products as one of the most significant trade and investment impediments.  Foreign investors
reportedly claimed that the certification process was non- transparent and corrupt, and deliberately discriminated
against foreign investors and imports.  It had also previously been claimed that Slovakia’s continued
introduction of obligatory certification and pre-market testing procedures had created non-tariff barriers to
various agricultural products.  See EC (1998), p.14.  
45 Central and Eastern European Business Information Center online information.  Available at:
www.mac.doc.gov/eebic/countryr/slovakr/expfact.htm.WT/TPR/S/91 Trade Policy Review
Page 52
85. SPS standards in Slovakia are primarily the responsibility of the Ministry of Agriculture.  The
main legislation governing sanitary and phytosanitary measures are the Act on Veterinary Care
(No. 337/1998) implemented by the State Veterinary Administration, and the Act on Plant Health
Care (No. 285/1995).  One of the regulations of the 1995 Act concerns phytosanitary conditions to be
met for the import, export, and transit of plants and plant products, and other objects that may transmit
harmful organisms.
86. Slovakia imposes import restrictions  as part of its quarantine regulations.  Goods prohibited
from import or transit through Slovakia due to veterinary diseases, are: all categories of bovine
animals and their products as well as embryos, meat and bone powder, because of bovine spongiform
encephalopathy (BSE); and ruminants and swine,  semen and embryos, meat and meat products,
treatment of which does not guarantee clearance of the foot and mouth disease (FMD) virus, due toFMD.  In addition, some foodstuffs cannot be imported from specified countries, for example, pigs,
pork meat, and feed concentrates and unheated products from the Czech Republic, since June 1997
following the outbreak of  Hog cholera.   Other countries affected by the ban due to hog cholera are
Germany, Spain, Greece, Austria, Italy, Portugal, Netherlands and Belgium.  Slovakia has also
banned, since 15 January 2001, the importation of cattle and certain beef products, originating fromregions or countries likely to be affected by BSE, including Belgium, Denmark, France, Germany,
Great Britain, Ireland, Italy, Liechtenstein, Luxembourg, Netherlands, Portugal, Spain, and
Switzerland.
46  It also introduced a ban, from 9 April 2001, on imports of live domestic and wild
bi-ungulates, their products and by-p roducts from France, Great Britain, Ireland, the Netherlands, and
other countries with FMD.47  Slovakia also bans imports of GMO food and of meat treated with
growth-promoting hormones.
87. Some  plant commodities prohibited from import or transit through Slovakia are subject to
Annex No. 11 to the Decree of the Ministry of Agriculture No. 2785/1998, which contains a list of
such plants.  In 1998, Slovakia notified to the WTO a phytosanitary measure on imports of potatoes
for human consumption concerning the treatment of potatoes with the "neo-stop" agent against
germination.  Following consultations with the EC, Sl ovakia agreed to allow potatoes to be treated
with other agents containing the chemical chloropr opham.  This action was also notified to the WTO.
Slovakia also maintains a rigorous surveillance system on imports of potatoes and fruit, including
apples, pears, and quinces.48  According to the Government, these measures are based on a pest risk
assessment conducted in accordance with EPPO recommendations, and exist to preserve the country’s
disease-free status.49
88. Slovakia regularly submits notifications on its quarantine measures to the WTO, for
comment, prior to their entry into force.  The Sl ovak Institute for Standardization is the national
enquiry point, and the Ministry of Agriculture is the national notification authority to the WTO.
(c) Marking, labelling, and packaging
89. Slovakia maintains regulations regarding labelling of food products and a range of other
products.  Food labelling requirements are not yet fully harmonized with EU regulations.  Differences
include the requirement to show both date of pr oduction (over the EU standard) and expiry date for
consumption.  This difference will be removed when the Act on Foodstuffs and the respective chapter
                                                          
46 WTO document G/SPS/N/SVK/16, 7 March 2001.
47 WTO document G/SPS/N/SVK/17, 19 April 2001.
48 The latest notification of these measures was WTO document G/SPS/N/SVK/15, 22 July 1999.
49 WTO document G/SPS/R/17, 24 February 2000.  Poland has questioned the scientific basis of these
measures, especially on fruits, and criticized their incons istent application by Slovak authorities, as well as the
frequent changes made to the requirements (WTO document G/SPS/GEN/159, 5 January 2000).Slovak Republic WT/TPR/S/91
Page 53
of the Codex Alimentarius of Slovakia are amended, expected to be from 1 January  2002. Contents,
ingredients, country of origin, name of producer, and instructions for use, where applicable, must also
be given, in the Slovak language since January 1996.  Name brands are not affected and may include
foreign words.  Packaging requirements are covere d also by a particular chapter of the Codex
Alimentarius of Slovakia.
(xi) Government procurement
90. New legislation on government procurement became effective on 1 January 2000
(Act No 263/1999 on Public Procurement), incorporating most EU directives.  The legislation also
established a new independent central body, the Office for Public Procurement, to administer public
procurement and to supervise procurement activ ities, including monitoring compliance with the
principles of non-discrimination and equal treatment of tenderers.  The Government Regulation on thepublishing of preliminary notices,  notices of invitation to  public procurement, tender documents, and
the results of public procurement also became effective.  The Journal of Public Procurement
commenced publication in 2001.
91. These changes improved the transparency of the public procurement process.  The legislation
covers procurement by all ministries and many public entities, including some major state-ownedenterprises, such as in areas of  postal services, transport, water management, electricity and gas.
50
However, these arrangements do not apply to Ministry of Defence procurement of a wide range ofspecified goods, which are exempt from the list given in  Annex 1 of the  Act on Public Procurement.
The legislation covers procurement contracts for services or  supplies/goods exceeding Sk 500,000
(net of VAT) during the calendar year or during the contract term, where the contract is concluded for
a period exceeding one calendar year, and Sk 1 million (net of VAT) for works during the contract
term.  Different rules and reporting requirements apply to procuring  entities depending uponadditional statutory thresholds.  For example, entities are required to provide procurement details to
the Office only for works contracts above  EUR 5 million (net of VAT).  Fines, ranging up to
Sk 1 million, may be imposed on entities found by the Office to have breached the procurement
provisions.  The Office will maintain from 2002 a public list of registered tenderers, which will
include overseas suppliers.
92. Entities may let procurement contracts covered by the legislation  either by open or restricted
tender.  Under certain conditions, specified in the legislation, tenders may also be awarded using
"negotiated procedures with or without prior notification," whereby the entity can reduce the number
of invited tenderers to a minimum of three or one, respectively.  For example, contracts may be
awarded by invitation "with prior negotiation" followi ng an unsuccessful open or restricted tender and
if contract conditions have not changed substantially.  In 2000,  some 46% of procurement contracts
were let by open tender; 6% by restricted tender; 1% by negotiated procedures with prior notification;
and 47% by negotiated procedures without prior notification.  According to the Office, the total
Slovak public procurement market covered by public procurement methods was around Sk 57 billion
in 2000.
93. Domestic price preferences do not apply to procurement contracts.  Procurement contracts
may support regional development in areas with unemployment above the national average for the
preceding two years.  In these cases, procuring  entities may stipulate that the tenderers commit to
using a minimum level of local labour or materials.  For larger contracts above the threshold of
EUR 5 million (net of VAT), the approval of the Office is required.  To date, the Office has received
no such requests.
                                                          
50 Includes legal entities with majority state ownership.WT/TPR/S/91 Trade Policy Review
Page 54
94. Any firm, including foreign entities, may file an objection to the Office against the selection
decisions of any procuring entity.  Such objections may cover the conditions stated in the competition
documentation; the exclusion of a tenderer or candidate; the ranking of the tenders or evaluation of
performances; and the conditions stated in the notice or in the invitation.  There were 559 objections
in 2000 against practices of procuring entities, of which around 30% were successful.  Decisions by
the Office regarding objections may be appealed to the Supreme Court.
95. Slovakia obtained observer status in the WTO Committee on Government Procurement in
October 2000, and intends to become a member by end-2002.
(xii) Performance and local-content requirements
96. Slovakia has no legislation on local-content or performance requirements for foreign
investors.
(xiii) State trading enterprises
97. According to its most recent notification to the WTO, the Slovak Republic does not maintain
any state trading enterprises within the meaning of the WTO definition.51  Until 1999, the only
enterprise notified by Slovakia to the WTO as a "possible" state trading entity was the State Fund for
Market Regulation (SFMR).52  The SFMR regulates the markets for selected agricultural commodities
(such as grain, cattle, beef, pork meat, butter, and sugar).  In order to support farm prices and promote
price stability, the Fund sets guaranteed prices at which it intervenes when necessary to purchase
surplus production.  However, the SFMR has no monopolistic or exclusive position in the market and
other traders are free to import or export the same products on competitive terms under normal market
conditions.  The SFMR is the sole entity responsible for paying export subsidies.  It does not engage
directly in foreign trade, but rather conducts export/import operations through commercial traders.
98. As part of its early market transformation, Slovakia abolished the state monopoly on foreign
trade, and the legal provisions on which state-owned companies had exclusive authorization to
produce tobacco, salt, and alcohol.  Slovak legislation does not allow permanent import or export
rights to be granted.  Any such licences must be limited in time.
(xiv) Measures implemented in exporting countries
99. The Government has no arrangements with foreign governments or enterprises designed to
influence the quantity or value of goods and services exported to Slovakia.  However, a number of
informal auto-limitation agreements apply between re spective producers’ associations to control trade
in sensitive agricultural products between the Slovak and Czech Republics.53  These arrangements are
applied in consultation with the Customs Union Council.  Decisions on auto-limitation agreements
between the Slovak and Czech Republics are based on imports during the three preceding years.Volume limits are applied on commodities by mutual agreement between respective producer
associations.
(xv) Other measures
100. Slovakia maintains no surveillance measures on imports.  Since 1996,  the Customs Union
Council monitors, by mutual agreement, imports of a number of sensitive, mainly agricultural,
                                                          
51  WTO document G/STR/N/6/SVK, 31 May 2001.
52 WTO documents G/STR/N/4 7 and 5/SVK, 23 September 1999.
53 Ministry of Agriculture (2000a), p.37.Slovak Republic WT/TPR/S/91
Page 55
products from the Czech Republic.  The list of products covered was extended recently from 8 to 48
items, to include pepper, vegetable oils, wheat, alcoholic beverages, and cigarettes.  Some of the
products, such as sugar, water and beer, are currently subject to quotas when imported from the Czech
Republic.
(3) M EASURES DIRECTLY AFFECTING EXPORTS
(i) Duties, taxes, and minimum export prices
101. During the period under review, Slovakia has not levied any export taxes, charges or other
fees.  Exports of goods and services are  free from VAT.  Slovakia has not maintained any official
minimum or reference export prices since its last Review.
(ii) Export prohibitions, quotas, and licensing
102. Slovakia does not apply export prohibitions, except for those covered by UN resolutions.
103. In early 1998 export licences were introduced on certain kinds of coniferous wood.  In June
1998 these were converted to export quotas, which were replaced from 1 January 1999 with automatic
licences issued by the Ministry of Economy (Act  on Licences No.487/2000).  Non-automatic export
licences on a number of other products were also converted to automatic licences in 1999 (Licensing
Decree on Reclassification of Selected Commodities from the Regime of Non-Automatic ExportLicences to the Regime of Automatic Export Licences).  Automatic export licences currently apply
for statistical and monitoring purposes to a range of products, including raw leather, wooden products,
precious metals (like gold, silver, and platinum), iron and steel products, and pharmaceuticals
(Table AIII.3).
104. Slovakia also maintains export quotas on certain commodities to stabilize the domestic
market, these include live animals, cereals (e.g. wheat, rye, and barley), flour, rapeseed oil, bran, and
iron and steel.  Quotas on artworks and agricultural exports cover all destinations.  Other exportquotas exclude sales to the EU, EFTA States, and the Czech Republic, and quotas on flat steel
products apply only to Hungary.  Since 1997, export licences issued by the Ministry of Economy for
agricultural products also require approval from the Ministry of Agriculture.
(iii) Export subsidies
105. Slovakia maintains export subsidies on certain agricultural products; in recent years they have
covered a narrower range of commodities, namely dairy products (milk powder, butter, and cheeses),
malt, fruit, and vegetables.  In 2000, export subsidies totalled Sk 534.6 million, compared with
Sk 490.9 million in 1999 and Sk 432.5 million in 1998, when export subsidies were also paid on
sugar, beef, cereals, and flour — an overall rise of 24%, albeit on fewer commodities (Table III.6).
The corresponding quantities of subsidized exports in those years were 120,000 tonnes in 2000,129,300 tonnes in 1999 and 87,400 tonnes in 1998. In 2000, Slovakia’s export subsidies represented
65% and 89%, respectively, of its total WTO commitment levels on subsidized products of
Sk 817. 9 million and 135,100 tonnes.
54  On fruit and vegetables, committed levels on export
subsidies in 2000 exceeded actual payments by almost 25 times.  Export subsidies have increased
substantially on malt, by over 300% since 1998, and although quantities were at their bound levels in1999 and 2000, payments in 2000 remained substantially below committed amounts, at 78% usage.
                                                          
54 The respective usage figures for subsidies paid in 1999 were 55% and 92% compared with 31% and
30% in 1998.WT/TPR/S/91 Trade Policy Review
Page 56
Slovakia has also used cumulative export subsidy volumes on other dairy products, especially
cheese.55
106. In total, Slovakia reserved the right to apply export subsidies on 17 agricultural product
categories, also including poultry and eggs, pork, sheep meat, vegetable oil fats, yeast, beer, wine,
spirit beverages, and starch.  Although exports of many of these products have never been or are no
longer subsidized, Slovakia can apply such subsidies within its WTO commitments.  In all,these value and volume commitments bound direct export subsidies in 2000 to a total of
Sk 1,656.2 million and to 3,125,600 tonnes and 125.7 million litres.  Allowing for all commodities on
which commitments were made further lowers Slovakia’s overall usage rates to well below half both
in value and volume terms  during the three-year period ending 2000 (Table III.6).  Its potential to
increase export subsidies by broadening the product coverage of payments to include other productscovered by commitments is substantial.
56
107. Export subsidies are administered by the State Fund for Market Regulation through
commercial contracts made with exporters.  Payments are set on a per unit basis to cover the
difference between production costs and export prices, reduced as a rule by 10%.  It has been claimed
that procedures for determining the payment of export subsidies have in the past been unclear for
some commodities, and that ad hoc decisions were often taken that reflected stronger lobby pressure
rather than market balancing intentions.57   However, according to the authorities,  the procedures for
determining the payment of export subsidies are cl ear, and the process fully transparent.  Ad hoc
decisions in the case of some commodities were aimed at ensuring market balance. Lobby pressure is
also seen to be irrelevant, since decisions to provide export subsidies are taken by the Fund Council
headed by the Minister of Agriculture.
Table III.6
Usage of export subsidies, 1998 to 2000
(Sk million, tonnes, and per cent)
1998 1999 2000CommodityCommitted Actual Usage Committed Actual Usage Committed Actual Usage
By value (Sk million) (per cent) (Sk million) (per cent) (Sk million) (per cent)
Beef 216.6 80.3 37 199.5 0 0 182.4 0 0
Pork 38 0 0 35.0 0 0 32.0 0 0
Poultry, eggs &
products136 0 0 125.3 0 0 114.6 0 0
Sheep meat 23.6 0 0 21.7 0 0 19.8 0 0
Milk powder 320 130 41 294.7 144.5 49 269.4 178.6 66
Other dairy products 287.3 163.2 57 264.6 172.1 65 241.9 166.5 69
Fruit & vegetables 81.3 0 0 74.9 4.4 6 68.5 2.8 4
Hop seeds 64.6 0 0 59.5 0 0 54.4 0 0
Vegetable oil fats 20.5 0 0 18.9 0 0 17.3 0 0
Sugars &
confectionery60.8 14.8 24 56.0 0 0 51.2 0 0
Yeast 6.1 0 0 5.6 0 0 5.1 0 0
Beer 31.1 0 0 28.7 0 0 26.2 0 0
Wine 45.6 0 0 42.0 0 0 38.4 0 0
Spirit beverages 74.5 0 0 68.6 0 0 62.7 0 0
Starch 59.3 0 0 54.6 0 0 49.9 0 0
Table III.6 (cont'd)
                                                          
55 WTO document G/AG/R/23, 27 July 2000.
56 The five-year transitional period under the WTO Agricultural Agreement to allow members to
transfer unused subsidy commitments between products expired in 2000.
57 EC (1998), p.51.Slovak Republic WT/TPR/S/91
Page 57
1998 1999 2000CommodityCommitted Actual Usage Committed Actual Usage Committed Actual Usage
Malt 282.7 43.2 15 260.4 169.9 65 238.1 186.7 78
Cereal &flour
products218.9 1 0.4 201.6 0 0 184.3 0 0
Total 1,966.9 432.5 22 1,791.6 490.9 27 1,656.2 534.6 32
By quantity (Tonnes) (per cent) (Tonnes) (per cent) (Tonnes) (per cent)
Beef 31,000 5,000 16 29,700 0 0 28,400 0 0
Pork 5,200 0 0 5,000 0 0 4,700 0 0
Poultry, eggs &
products12,000 0 0 11,600 0 0 11,000 0 0
Sheep meat 1,700 0 0 1,700 0 0 1,600 0 0
Milk powder 16,300 9,900 61 15,700 9,300 59 15,000 6,800 45
Other dairy products 7,700 8,500 110 7,400 8,300 112 7,100 6,600 93
Fruit & vegetables 7,700 0 0 7,400 1,100 15 7,100 700 10
Hop seeds 6,000 0 0 5,800 0 0 5,500 0 0
Vegetable oil fats 4,300 0 0 4,100 0 0 3,900 0 0
Sugars &
confectionery4,300 4,300 100 4,100 0 0 3,900 0 0
Yeast 500 0 0 500 0 0 500 0 0
Beer (million litres) 72.2 0 0 69.3 0 0 66.4 0 0
Wine (million litres) 9.5 0 0 9.1 0 0 8.7 0 0
Spirit beverage
(million litres)55.1 0 0 52.8 0 0 50.6 0 0
Starch 12,900 0 0 12,300 0 0 11,800 0 0
Malt 115,300 55,000 48 110,600 110,60
0100 105,900 105,900 100
Cereal &flour
products118,700 4,700 4 113,800 0 0 109,000 0 0
Total (tonnes)
(million litres) 343,600
     136.887,400
         025
  0 329,700
     131.2129,300
          039
  0315,400
125.7120,000
038
0
Source : WTO Secretariat from WTO documents G/AG/SVK/26, 26 March 2001; G/AG/N/SVK/23, 18 April 2000;
G/AG/N/SVK/17, 12 July 1999; and Schedule XCIII of the Slovak Republic.
(iv) Export finance, insurance, and guarantees
108. Under its 1999 legislation on State Aid (Article 4 (4)), Slovakia provides state assistance to
exports in accordance with  applicable OECD ru les (essentially the Arrangement on Guidelines for
Officially Supported Export Credits) and the Berne Union rules.
109. Eximbank was established in 1997 to finance export and import credits (Act No. 80/1997 on
the Export-Import Bank and subsequent amendments).  Its activities include refinancing of export andimport credits; insurance and re-insurance of export credits; and providing  guarantees for exports and
imports.  The Government’s priority is to develop the state-owned Eximbank into a modern financial
institution that support exports by offering suitable forms of financing and insurance to minimize
exporters’ risk.  Eximbank’s primary objective is to support the maximum possible volume of exports
of sophisticated products principally to EU and OECD countries, by mitigating the risks associated
with insurance, credit, guarantee, and financial transactions.  Its registered capital at end-2000 was
Sk 2.67 billion while its equity stood at Sk 3.49 billion.  Funds come from its equity and internallygenerated resources, as well as  from ad hoc state budget allocations assigned specifically for
refinancing and insuring export credits; Sk 500 million was allocated in 2000 while  no state funding
was made available in 1999.WT/TPR/S/91 Trade Policy Review
Page 58
110. Eximbank’s main operations cover refinancing of short- and long-term export credits with a
view to supporting exports predominantly of Slovak origin.  Refinancing facilities are extended to
commercial banks for them to  on-lend at favourable interest rates to their client exporters.  The
annual interest rate charged by Eximbank on such refinancing facilities was 6.5% as at end-June 2001,
and the additional margin allowed for commercial banks is fixed at 3%.  Exports totalling
Sk 8.5 million and Sk 13.9 billion received such support in 1999 and 2000, respectivelly, representing89% and 93% of all exports supported by Exim bank.  Other export as sistance includes bill of
exchange credits and the provision of guarantees and  contract bonds.  In 1999 and 2000, guarantee
products supported exports of Sk 503 million and Sk 609 million, respectively, while bill of exchange
products enabled corresponding exports of Sk 563 million and Sk 306 million.  Light engineering,
metallurgical, and electrical engineering industries are the main recipients of support.
111.  Eximbank also provides export credit insurance against commercial and political risks.  In
1999, exports totalling Sk 5.9 billion were supported by short-term insurance against commercial and
combined risks.  Such insurance mainly covered pulp, paper, ferrous metal products, transport
vehicles, stoneware and glass products, and machinery and equipment.  In addition, exports totalling
Sk 583.9 million in 1999  were covered by short-term insurance against political risks, supportingmainly sales to Iran, India, and Uzbekistan, while medium- and long-term insurance supported
exports of Sk 72 million to Cuba.
112. The Ministry of Agriculture has negotiated with commercial banks to provide farmers and
food processors with "green loans" on softer terms, to support the financing of storage, processing,
and marketing of agricultural commodities, aimed at improving Slovakia’s trade balance.  In 1997,
such loans were granted by a commercial bank.  The loans, bearing an effective interest rate to the
borrower equal to the central bank discount rate plus an allowed additional margin of 3% per annum,were collected in full and the underlying commitment extinguished by 1999.  The funds, administered
by the commercial bank, were principally meant to support exports of fruit, vegetables, potatoes,
canned goods, and wine.
(v) Export promotion and marketing assistance
113. The Ministry of Economy has recently established a semi-governmental organization, the
Slovak Export Information Centre (SEIC), to support exports.  The Centre provides information on
products and international markets, including price trends, foreign customs procedures, and
transportation schedules, as well as on political and business conditions in specific countries.  The
SEIC represents Slovakia at the European Trade Promotion Organisation.
114. The Government funds export promotion th rough the Foreign Trade Promotion Fund,
established in 1997 (Act No. 379/1996).  Grants are paid to cover part of firms costs of attending
international fairs, exhibitions, and advertising abroad, including market research.  State aid provided
in 1997 amounted to Sk 38 million.
58  The Fund’s operations are self-funded through contributions
from domestic exporters and importers.  As from 1 January 2000, these contributions were made
voluntary.
115. The Slovak Agency for Investment and Trade Development (SARIO) was established in 1999
to integrate the activities of the Foreign Trade Promotion Fund and the Agency for Foreign
Investment into a "one-stop shop".  It administ ers several support progammes aimed at encouraging
exports of small and medium-size enterprises (SMEs).  These help SMEs to develop e-commerce, to
participate  at international exhibitions, in marketing research and collection of information, and the
                                                          
58 WTO document G/SCM/N/38/SVK, 28 June 2000.Slovak Republic WT/TPR/S/91
Page 59
development of industrial zones.  Total funding for these programmes was Sk 50 million in 2000, and
it is expected to decrease to Sk 30 million in 2001.
116. The Slovak Guarantee and Development Bank is responsible for administering the Export
Support Program, since its introduction in May 2000.  State funding of Sk 20 million was provided in
2000; this is expected to fall to Sk 12 million in 2001.
(vi) Customs-free zones
117. Customs-free zones are permitted under Slovakia’s customs legislation, which, according to
authorities, is fully harmonized with EU requir ements following adoption of the 2001 Customs Law.
This law specifies conditions on the establishment of customs-free zones.  There are six customs-free
zones in the Slovak Republic at: Kosice, Banska Bystrica (two), Bratislava, Trencin and Nova
Dubnica.  Goods moving in and out of the zones are subject to customs control.  Goods importedwithin the zones are exempt from duties, taxes, and customs control.
(vii) Other measures
118. According to the authorities, no export cartels exist in Slovakia.
119. No voluntary export restraints or export surveillance arrangements are applied to exports.  A
double-checking system was introduced in 1995 for exports of certain steel products covered by theECSC and EC Treaties.
(4) O
THER MEASURES AFFECTING PRODUCTION AND TRADE
(i) State aid
120. Slovakia’s complex state-aid system remains substantial.  It takes many forms, such as grants,
tax concessions, concessional loans, and state guarantees, which lower the cost of loans raised by
private firms and incur a potential liability for the Government should the borrower default.59  Some
estimates have suggested that the value of state assistance in Slovakia since 1997 has risen fromaround Sk 15 billion annually to Sk 26 billion in 20 00, equivalent to 3-4% of GDP and about 7-8% of
central government expenditure.
60  It is estimated that almost one-quarter of these subsidies go to
agricultural enterprises.
121. The Government introduced major steps designed to improve the transparency of state aid and
to better control its provision, mainly prompted by requirements on state aid in the Europe Agreementand, more recently directly, as part of EU accession.  The Slovak authorities believe that proposed
amendments to apply from 1 January 2002 will fully align the legislation with the acquis.
(a) Manufacturing
122. An important development during the period under review was the enactment of the State Aid
Act in 1999, effective 1 January 2000, and the establishment of the Office of State Aid.  State aid isdefined in the legislation to cover any national budgetary assistance in any form, direct and indirect,
such as subsidies, realization and provision of state guarantees, loans, and the provision of services at
                                                          
59 This has occurred on several occasions in Slovakia.  For example, realized state guarantees were
estimated to cost the Government Sk 1.9 billion in 1996,  and Sk 2.0 billion in 1997; in 1998, the cost rose to
Sk 2.1 billion, it doubled, to Sk 4.2 billio n in 1999, and reached Sk 5.7 billion in 2000.
60 IMF (2001a).WT/TPR/S/91 Trade Policy Review
Page 60
below cost.  Other forms of state aid are also spec ified in the State Aid Act: provision and realization
of bank guarantees, returnable financial assistance, full or partial refund of interest from loans, partial
refund of loans, sale of real estate in state or municipal ownership at below-market prices, and
different kinds of abatements.  The Office must approve all state aid above the threshold "de minimis"
levels; however, these levels do not apply to state aid provided to ore and coal mining, exports,
transportation, steel and shipbuilding.  So-called "unjustified state assistance"  (assistance provided
prior to receiving approval from the Office or despite its disapproval) must be returned, and the
providing agency can be fined (0.2% of the assistance involved).  Decisions by the Office on
eligibility of state aid are subject to judicial review under the Rules of Civil Procedure.   The state aid
legislation does not cover assistance to agriculture, forestry, fisheries, and water management.  A
proposed amendment to the State Aid Act is expected to remove the exclusion of forestry and watermanagement.
123. The new legislation prohibits state aid exceeding the equivalent of €100,000 in three
consecutive years per enterprise when it "restricts or threatens to restrict competition" or "adversely
affects commerce with the EU".  However, the legislation specifies a number of large sectoral
exemptions from the prohibition.  These substantially weaken the scope of the controls by allowingstate aid in the industrial sectors that mainly benefited from such assistance in the past.  State aid,
subject to specified limits, can be provided to th e steel, shipbuilding (including repair), automotive,
and man-made fibre industries for certain specified purposes, and to ore and coal mining industries
when provided in accordance with the Agreement of the European Coal and Steel Community
(Article 4).  State aid can be also provided to specific sectors to coordinate transportation services or
to compensate for losses resulting from public-interest performance contracts.
124. State aid legislation focuses on allowing direct assistance to facilitate industrial restructuring.
This reflects Slovakia’s industrial policy, which is aimed at applying sectoral programmes to help
industries restructure within state aid limits and competition rules.
61  The legislation also permits state
assistance to manufacturing industries for specified purposes, subject to certain limits.  Allowable
purposes cover economic development of districts, research and development, and environmental
improvements.  "Entrepreneurs in difficulty" may receive, once only, state assistance in the form of aloan, credit or loan guarantee for redemption (for a maximum of six months), to implement a viable
restructuring plan, or where the "continuity of production is in the interests of all society." State
assistance for restructuring may be provided to entrepreneurs in difficulties provided several
conditions are met.  The restructuring plan, which is the most important, must be capable of restoring
long-term competitive viability and profitability within a reasonable period of time withoutincreasing production capacity.  The entrepreneur is also required to contribute to the restructuring
plan using his own (or commercially obtained) fi nancial resources.  Continuity of production is
particularly seen to be in the society’s interest where entrepreneurs are located in areas of very high
unemployment or very low living standards.  Stat e assistance is also allowed to small or medium-
sized enterprises (SMEs) to cover certain costs.  Th ese include up to 50% of the cost of participating
in international exhibitions as well as of up to 15% of the justified costs (7.5% for medium-sized
enterprises) of acquiring tangible assets (land, buildings, machines, tools and equipment) to expand or
diversify production.  Assistance  can also be granted to acquire tangible assets required to commence
a new business, and to obtain intangible assets for utilizing new technologies (for both up to 15% of
justified costs for small enterprises and 7.5% of justified costs for medium-sized enterprises).  Aid to
SMEs located in districts with a per-capita ratio of GDP below 75% of the country’s average over the
                                                          
61 For example, the legislation allows state assistan ce to the steel industry to cover up to 50% of the
severance payments associated with the complete or partial termination of a steel producer.  Similar assistancemay be provided to the production of man-made fibres where it would facilitate a reduction in output, or at leastnot substantially increase it.  In shipbuilding and automotive industries, state assistance of up to 10% of the costmay be provided to introduce new production technologies.Slovak Republic WT/TPR/S/91
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previous three years, can be increased to 65% of justified costs.  State assistance for SMEs may also
be provided for research and development, environmental purposes, and for advisory and consulting
services.
125. The allowed limits on state assistance to eligible sectors and/or purposes appear somewhat
arbitrary and high on occasions.  Total state aid in 1999 was estimated at Sk 15.2 billion, compared
with Sk 6.8 billion in 1998 and Sk 6.2 billion for the first six months of 2000 (Table III.7).62  The
major beneficiaries of state aid in 1999 were transport and communications (Sk 7 billion), financial
services (Sk 2.6 billion), mining and metallurgy (Sk 307 million), steel (Sk 125.7 million), and
media/culture (Sk 61.6 million).  In addition, horiz ontal aid was estimated in 1999 at Sk 4.6 billion.
Table III.7
State aid, 1999
(Sk million)
S e c t o r / b r a n c h A 1A 2B 1C 1C 2D 1 T o t a l
Horizontal aid
 Research and development 307.1 0 0 0 0 0 307.1
 Development of SMEs 64.6 0 0 40.4 0 0 105.0
 Credits with state guarantees 0 0 0 0 0 4,213.0 4,213.0
  Total 371.7 0 0 40.4 0 4,213.0 4,625.1
Selected branches
 Transport and communications 7,049.0 0 0 0 0 0 7,049.0
 Financial services 0 0 0 0 0 2,636.2 2,636.2
 Regional support 421.8 0 0 10.0 0 0 431.8
 Mining and metallurgy 307.5 0 0 0 00 0 307.5
 Steel 0 0.1 0 0 125.6 0 125.7
 Media and culture 61.6 0 0 0 0 0 61.6
 Shipbuilding 0 0.2 0 0 2.2 0 2.4
Automobile 1.8 0.1 0 0 0 0 1.9
 Synthetic fibres 0 0 0 0 0 0 0
 T o u r i s m 0 000 0 00
  Total 7,841.7 0.4 0 10.0 127.8 2,636.2 10,616.1
Total aid 8,213.4 0.4 0 50.4 127.8 6,849.2 15,241.2
Notes: State aid is measured using the following classification:
A1 = grants or interest reimbursements;
A2 = tax relief and tax, customs and import charge concessions;
B1 = equity participation of the Government in any private company, eg. debt conversion into share capital;C1 = soft credits or loans from public or private sources;
C2 = deferral of tax payment and allowed tax installments; and
D1 = losses arising from guarantee schemes after deduction of paid fees.
Source : State Aid Office of Slovak Republic (2001), Report About Granted State Aid for the Period 1999 , March.
126. While these figures include many forms of state assistance, they exclude aid from government
state guarantees on irrecoverable loans.  According to the Slovak authorities, provision of state
guarantees is excluded from state assistance because it is considered to be an indirect form of state aidthat, when made, does not represent a real transfer of state resources, but rather constitutes a potential
                                                          
62 Under the legislation, the Office is required to produce an annual state aid report identifying the
types and levels of state assistance.  The report is prov ided to Government and subsequently released to the
public.  The first report was for 1998, and the latest available report is for 1999.  The 2000 report is due to bereleased during 2001.  The Office has also commenced publishing information on the provision of state aid in itsCommercial Journal .WT/TPR/S/91 Trade Policy Review
Page 62
state liability.  However, realizations of state guarantees are included.  State guarantees are authorized
under the Law on Budgetary Rules and under Government Decree No. 91/1996 on State Guarantees.
Total state guarantees in 1999 amounted to some Sk 156 billion, of which Sk 122 billion (equivalent
to 16% of GDP) remained active.63  With as much as half of these outstanding loans non-performing,
the OECD estimated the potential budgetary implications as high as Sk 13 million annually.
Realization of state guarantees from the budget is decreasing.
Restructuring and adjustment assistance
127. The Agency for Industrial Development and Revitalisation (AIDR), a semi-state body created
in 1996,  aims to assist firms to restructure their debt and corporate operations.  It is responsible for
implementing the Slovak Programme for Companies with Excessive Indebtedness (SPEED), which
relies mainly on EU Phare grants.  Some 30 companies are expected to be approved for assistanceunder the programme.  The Government believes that the programme needs to be extended to roughly
double the number of firms receiving assistance.
128. The Act on Revitalisation (No. 211/1997), which was implemented in 1997 to help firms to
restructure, was repealed in 1998.  The scheme provided selected enterprise debt and tax reductions
during restructuring, including exemption from bankruptcy, conditional on meeting certain criteria,such as employment, social and regional development, and exports.  It increased the state role in
industrial restructuring.  However, the scheme had only limited success, and may have aggravated the
restructuring process by creating "an expectation of easy terms of forgiveness of past debts", thereby
undermining financial discipline by encouraging fi rms to accumulate payment arrears, and reducing
the pressures on them to adjust.
64
129. The Slovak Postprivatisation Fund (SPPF), formed in 1996 with support from the EBRD and
the EU, provides technical assistance and equity capital to help restructure and revitalize viable firmswith temporary financial difficulties.
Support for SMEs
130. A number of programmes exist to support small and medium-sized enterprises (SMEs).  The
National Agency for Development of Small and Medium Enterprises coordinates and administers
many of these, aimed at providing financial support through access to concessional loans.  Forexample, the Support Loan Programme, established in 1994 between the Government and several
commercial banks, provides loans of up to Sk 5 million to SMEs in the fields of production, crafts,
services, and tourism.  At end-1999, loans outstanding amounted to Sk 2.7 billion.  Loans are
distributed by the participating commercial banks at concessional interest rates set at the central bank
discount rate plus 2.5%, equivalent currently to 11.3% annually.  According to the State Aid Office,the value of assistance provided by this scheme amounted to Sk 34.5 million in 1999.
131. The Agency also operates a micro-loan programme to provide regional SMEs credit of up to
Sk 500,000.  During 1999, loans totalling Sk 29.3 million were distributed.  It also makes equity and
loan investments in SMEs, through its Seed Capital Company, of up to Sk 5 million.  At end-1999,
investments amounted to Sk 60.2 million, of which the equity component was Sk 37.2 million.  ASmall Loan Scheme is also run to provide credit and other assistance to SMEs with less than
25 employees.
                                                          
63 OECD (2000a), p. 33.  Government authorities indi cated that state guaranteed debt had fallen to Sk
148 billion at  end-2000.
64 OECD (2000a), p. 27.Slovak Republic WT/TPR/S/91
Page 63
132. The Slovak Guarantee and Development Bank provides grants, concessional loans, and
guarantees to assist SMEs through various guarantee, contributory, and credit programmes.  Funds are
provided by the Ministry of Finance, and other ministries, such as Agriculture, Economy, Transport,
Post and Telecommunications, and Environment.  In 1999, the Bank received state funds amounting
to Sk 341.3 million.  The State Aid Office estimated the total state aid provided by the Bank in 1999
from grants, concessional loans, and guarantees to be Sk 104.7 million.  Tourism and agriculture arethe major beneficiaries of the programmes.
Regional support
133. The responsibility for regional development was transferred to the Ministry of Construction
and Regional Development from December 1999 (Law No. 293/1999).  The Government’s policy is
to support regional development in areas with unemployment rates exceeding 20%.  Criteria wereestablished to assess, approve, and finance such projects.  Grants up to Sk 3 million are provided for
small regional firms to undertake production, services, and tourism. In 1999, grants totalled
Sk 42 million; most averaged Sk 0.6 million.  According to the State Aid Office, total regional
support amounted to Sk 48.5 million in 1999.
Research and development134. Slovakia provides support for industrial research and development through the Innovation
Fund.  The Government’s objective is to increase the share of loans provided as opposed to grants,
and to introduce greater competition into the distribution of industrial research funds.  With this in
mind, the Law on establishing an independent Agency for Support of Research and Development in
Industry became operative from 1 July 2001, aimed at providing budgetary resources for industrial
research.  According to the State Aid Office, Sk 307.1 million of assistance was provided to research
and development in 1999.
(b) Agriculture
135. Agriculture is a major beneficiary of state aid, which is provided by the Ministry of
Agriculture.  Such assistance is outside the state aid legislation and not monitored by the State Aid
Office.  The Ministry of Agriculture nevertheless monitors and publishes estimates of agricultural
assistance. In 2000, total assistance was estimated at Sk 8.3 billion, down from 8.6 billion in 1999(Table III.8).  The main components of this assistance in  2000 were: support to less favoured areas
(40%); provision of seeds and seedlings (19%); technology investment and capital construction
(15%); and subsidies for milk production (13%).
136. Another indication of state support to agriculture is Slovakia’s current total Aggregate
Measure of Support (AMS) notified to the WTO.  This was Sk 7.9 billion for 2000, almost half oftotal assistance estimated for industry by the State Aid Office.
65
137. Slovakia's AMS payments are overwhelmingly  non-product specific and run under general
schemes. The only exception in 2000 was a Sk 6 million "feeding mixture and substitute production
subsidy" programme for milk powder production.66  In addition, payments excluded from multilateral
                                                          
65 WTO document G/AG/N/SVK/30, 25 June 2001.  The corresponding AMS figure for 1999 was
Sk 7.0 billion.
66 The main payments notified and the amounts were: to offset for worsening natural conditions
(Sk 3.5 billion); cow breeding for milk production (Sk 1 billion); plant production (Sk 1.6 billion); capitalconstruction (Sk 1.2 billion); and irrigation (Sk 0.2 billion).  In 1999, the only specific programme was aSk 21 million "quality production subsid y" for promoting tobacco production.WT/TPR/S/91 Trade Policy Review
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reductions – so-called Green Box support – in 2000 amounted to Sk 3.4 billion, mainly due to natural
disaster relief, such as floods, of Sk 3.1 billion.67  In 2001, Slovakia notified a "blue box" payment for
2000 of Sk 69 million as a set-aside programme.
Table III.8
Domestic support to agriculture, 1996-2000
(Sk million)
Support measure 1996 1997 1998 1999 2000
Worse natural (mountain) conditions 3,305.0 3,255.0 3,056.0 3,562.0 3,260.0
Sheep and cattle breeding stabilization 129.2 139.0 145.0 140.0 191.0
Tobacco production 0 20.0 20.0 20.0 82.0
Set-aside programme (e.g. grassing) 36.3 42.0 25.0 30.0 69.0
Rural tourism 21.9 36.0 42.0 40.0 36.0
Ecological programme 20.1 48.0 59.0 20.0 192.0
Interest reimbursement 153.6 47.0 20.0 533.0 17.0
Seeds and seedlings 1,170.0 1,486.0 1,409.0 1,500.0 1,567.0
Plant genetic fund 70.5 76.0 77.0 70.0 70.0
Animal genetic fund 151.7 172.0 227.0 90.0 150.0
Promotion of historical actions 75.9 93.0 104.0 70.0 70.0
Promotion of cow milk production 742.1 899.0 911.0 1,0800 1,071.0
Breeding revitalization 77.3 78.0 109.0 350.0 50.0
Technology investment and capital
construction1,110.1 1,701.0 1,692.0 925.0 1,223.0
Irrigation 97.9 109.0 115.0 120.0 190.0
Export promotion 6.4 6.0 23.0 25.0 15.0
Total 7,168.0 8,207.0 8,034.0 8,575.0 8,253.0
Source : Slovak authorities.
138. Agricultural subsidies are designed to support farming in less favoured areas as well as
entrepreneurial activities in agriculture.  Payments to farmers in less favoured areas account for abouthalf of the subsidies and about one third of total expenditure for agriculture.
68  Payments amounted to
Sk 3.3 billion in 1998, and Sk 3.5 billion in 2000. The basis of these area payments changed from
1 May 1999 (amendments to Act No. 240/1998 On Agriculture to Comply with the System of
Subsidies Provided by the EU’s Common Agriculture Policy).  Per hectare payments to less favoured
areas are differentiated according to the type of land and soil price category.  They range fromSk 475 to Sk 1,850 for arable land; Sk 950 to Sk 3,700 for permanent grassland; and Sk 517 to
Sk 3,614 for other land.  While this income support is not product specific, subsidies have benefited
mainly cattle, dairy, and sheep grazing.  Direct subsidies are also paid for certain commodities under
this legislation, including per hectare payment of Sk 900 for cereals, including maize; Sk 850 for oil
crops; and Sk 800 for protein crops (principally peas).  Subsidies of up to Sk 6,000 per hectare arealso paid for sowing grass that will be preserved for at least five years.
139. Subsidies were also granted from May 1999 (Decree No.928/2/1999-100) to partially
subsidize farmers’ premiums for voluntary crop and animal insurance against natural disasters and to
support the implementation of development programmes in plant and animal production.  New
                                                          
67 WTO document G/AG/N/SVK/30, 25 June 2001.  In 1999, total "green box" payments were
Sk 0.7 billion. Effective 1 July 1998, disaster relief is granted by way of either reimbursement of up to 20% ofdisastrous damages or up to 10% reimbursement of interest from loans taken to cover direct damages (WTOdocument G/AG/N/SVK/2, 8 February 2000).
68 EC (1998), p.43.Slovak Republic WT/TPR/S/91
Page 65
subsidies also include payments to promote producer and marketing organizations69; dried milk used
to produce milk fodder mixes and substitutes; breeding riding horses70; and bee breeding.71  T h e
Government also pays milk quality premiums to farmers, amounting to about Sk 1 billion annually.
140. Concessional loans, guarantees, and investment support are provided to farmers by the State
Support Fund for Agriculture and Food Industry.  Its role is to support investment in agriculture and
the food industry and to stimulate the development of the land market.72  Support is provided to
purchase  land used in agriculture (up to 90% of th e price) and investments aimed at increasing export
capacity.  New farmers are also eligible for support of up to Sk 1 million, and outstanding repayments
financed at up to Sk 5 million on commercial bank investment loans.  Loans are mainly provided to
dairy and pig farmers, as well as to refurbish food processing facilities, especially for meat and dairy.
In 1999, outgoings from the Fund amounted to Sk 976 million, up from Sk 748 million in 1998.  Anestimated minimum of Sk 3 billion was distributed by the Fund from 1994 to 1997 through loans and
guarantees to farmers.
73  The State Fund for the Protection and Enhancement of Agricultural Land
also provides support in the form of loans to en hance soil fertility and maintain hydro-amelioration
equipment.  These outgoings were Sk 814 million in 1999, down from Sk 843 million in 1998.
141. Farmers receive concessional finance through "green bill credits" provided by the National
Bank, worth Sk 1.5 billion in 1998.  By  re-discounting these agricultural bills of exchange, the Bank
extends loans at a concessional rate of 1.5 times its normal discount rate.  In 1997, the volume of bills
for farmers and processors was increased by 50% and covered mainly wheat, sugarbeet, potatoes,
hops, oil crops, grapes, maize, legumes, and pigs for slaughter.  The list of preferred commodities was
extended in 1999 to cover processed milk as well as beef and poultry for slaughter. In 1999, the Bank
allocated Sk 2 billion.  In 2001 the National Bank of Slovakia ceased re-discounting these agricultural
bills.  The Slovak Guarantee and Development Bank provides bank guarantees for short-term loans toprimary producers and processors to cover seasonal expenses of inputs (seeds, plants, fertilizers, and
chemicals), and insurance premiums.  The guarantee covers 70% to 90% of loans below
Sk 100 million and 60% for higher amounts.
142. The Ministry of Agriculture has, at times, supported agriculture through agreements with
commercial banks to provide soft loans.  These agreements required commercial banks to developappropriate products for providing subsidized credit to farmers.  In 1998, loans totalling Sk 9.9 billion
were provided under these arrangements.  According to authorities, these schemes no longer operate.
143. Farmers are also assisted by input subsidies.  Initially, these were limited to certified seeds,
planting materials, pesticides, and breeding animals.  However, in 1997 fertilizers and additional
plants, such as potatoes and vegetables, became eligible.  These input subsidies amounted toSk 1.75 billion in 1997, and Sk 1.6 billion in 2000 on seeds and seedlings alone (Table III.8).  Sugar
farmers have been a major beneficiary of input subsidies.  Input subsidies are based on certain
eligibility criteria, which vary between activities.  For example, cereal farmers receive a 30% rebate
                                                          
69 Effective 1 January 1998, the subsidy covers up to 50% of these costs for newly established
production or sales associations.  Annual cost is estimated at Sk 22 million (WTO document, G/AG/N/SVK/20,
8 February 2000).
70 Effective 1 January 1998, the subsidy is paid especially for testing of sport endurance of racing
horses, at an estimated annual cost of Sk 105 million (WTO document G/AG/N/SVK/20, 8 February 2000).
71 Effective 28 January 2000, the subsidy is paid to bee keepers to preserve at least five bee colonies
and for purchase of bee breeding equipment up to Sk 120 per colony per year.  Estimated annual cost is
Sk 17 million (WTO document G/AG/N/SVK/20, 8 February 2000).
72 The Fund is financed mainly from the central budget as well as from the proceeds of sale or
liquidation of state-owned agri-food enterprises and contributions from the National Property Fund.  In 1997, itsbudget was Sk 1.7 billion.
73 EC (1998), p.43.WT/TPR/S/91 Trade Policy Review
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on seed and fertilizer costs and of 40% on pesticides.  The extent to which input subsidies benefit
farmers, in practice, or processors is unclear.74  Farmers also receive subsidized services, including
partial reimbursement of irrigation charges and provision of advisory and extension services by the
Ministry of Agriculture.
144. Several bodies are concerned with agricultural research and development.  The Research
Institute of the Ministry of Agriculture specialises in agri-food applied economic research, includingon appropriate economic policies for the sector’s development.
75  It advises the Ministry of
Agriculture on EU integration and transformation of Slovakia’s agricultural economy.  It also
provides information to farmers and processo rs on commodity markets, including collection,
processing, and price analysis.  The Research Institute of Plant Production also conducts research into
growing technologies and breeding methods for cereals, forage crops, legumes, oil crops, and hops, aswell as developing and providing seeds.
(ii) State-owned enterprises and privatization
145. Privatization of state-owned enterprises (SOEs) has been a key feature of Slovakia’s
transition to a market economy.  The Government recognizes that private ownership of resources will
enhance the economy's efficiency and competitiveness, and help improve the country's publicfinances.  Privatisation policy, including selection of entities to be divested and the type of
privatization, continues to be determined by th e Government, and formulated by the Ministry of
Administration and Privatisation of National Property.
76  The independent statutory body, the National
Property Fund (NPF), continues to be responsible for implementing the privatization programmes,
including transition of SOEs to joint-stock companies, sale of shares, and collection of privatization
receipts (Act No.92/1991 on the Conditions of Transfer of State property to Other Persons).77
146. The so-called "second wave" of the large-scale mass privatization programme, which
included 610 state-owned enterprises with assets valued at Sk 137 billion, commenced in 1994.  It
continued well beyond its initial end date of 1996, but is now virtually complete.78  The Government
abolished the voucher scheme of privatization and introduced the bond method, whereby public
holders of vouchers were compensated through the issue of National Property Fund Bonds, due to
mature at the end of 2000 (Act No.190/1995).  Th ese amounted to Sk 35 billion (about 4% of GDP),
                                                          
74 One view expressed is that they benefit mainly the food processing sector, and not farming (EC,
1998, p.54).
75 In addition, the Slovak Academy of Agricultural Sciences engages in research and development in
many areas of agriculture, including soils, crop and animal production, veterinary medicine, forestry and watermanagement.   It is responsible to the Ministry of Agriculture.  The Forest Research Institute conducts forest
research and is responsible to the Ministry of Agriculture.
76 Under the original legislation, the privatization of 11 designated natural monopolies required
approval by the National Council (Parliament).
77 Surplus funds do not become part of general budg etary revenue, but must be used in accordance with
legislation specified in various government regulations and decrees.  Such uses include fulfilling financialobligations of enterprises to be privatized; strengthening the financial bases of banks and savings institutions;supporting development programmes; meeting state guarantees on bank loans; funding the healthcare system;
and repayment of state debt.
78 The State still retains a significant shareholding in  a number of these privatized enterprises through
the NPF, the largest shareholder in Slovakia.  It owns some 43% of shares issued during the second wave ofprivatization in joint-stock companies.  The NPF also maintains a significant shareholding in a number of keycompanies recently privatized, such as in Slovak Telecom (15%).Slovak Republic WT/TPR/S/91
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and must be paid within one year.79 A disadvantage of voucher privatization was that it led to
fragmented shareholdings, and largely prevented foreign participation.
147. Direct privatization based on public tender or auctions was also used extensively, and
accounted for about 60% of privatized entities (or 38% by value).  However, it appears that during the
period 1994 to 1998, direct privatizations began to take place according to non-transparent rules and
political interference.  Legislative amendments (No. 369 to Act No.92/1991) facilitated this bytransferring to the NPF powers to rescind government decisions on the direct sale of state property.
80
Consequently, a number of privatizations during this period were effected with prices well below theirapparent commercial value
81, often on the basis of generous instalment programmes that were not
met. This undermined the efficiency of the privatization process, and seriously restricted industrial
restructuring.  Foreign participation in the privatization programme was also disadvantaged.
148. The current Government took immediate steps to revitalize the privatization programme, and
to inject greater transparency and foreign participation.82  The NPF examined past divestments
between 1995 to 1998 and concluded that 41 contracts out of the 906 audited, substantially violated
regulations.  It sought cancellation of past divestments in some cases.  Most importantly, it also
amended the Privatisation Act (Act No. 253/1999), which cancelled the 1995 Privatisation ofStrategically Important State Owned Enterprises Act ((No.192/1995)
83, and strengthened the
transparency and procedures for privatization, incl uding providing greater power to the Ministry of
Privatisation.  This no longer exempted certain specified natural (or strategic) monopolies from
privatization.  Instead, minimum private ownership limits of 51% were set in one transportation and
five energy state enterprises, and of 34% in the fixed-line telecommunications operator, Slovak
Telecom, the main retail bank (Slovak Savings Bank) and the dominant insurer (Slovak Insurance
Company) (Table III.9).84  Only four designated natural monopolies – the postal service, railways,
forestry, and water supply – must remain fully state owned.  This amended legislation also removed
the differential application of the so-called "strategic interest of the state" in privatization that left
room for preferring domestic over foreign investors.85
149. Opening up these large SOEs to private, in cluding foreign, ownership has unblocked for
privatization a significant part of the Slovak economy, estimated at some 14% of GDP.  Around 84%of GDP was generated by the private sector in 1999, compared with 37% in 1993 and 77% in 1997.
The Government updated the List of State-owned Companies Proposed for and Excluded from
Transformation and Privatisation, in April 1999 (Resolution No. 313) and again in November 1999
                                                          
79 Bonds were redeemable earlier for specific purposes.  About one third were redeemed early.
80 This was subsequently ruled by the courts to be non-constitutional.
81 NPF figures indicate that the ratio of purchase price to book value of property privatized fell from
34% in 1995 to 2% in 1998.  (National Property Fund of Slovakia online information.  Available at:http:www.natfund.gov.sk/english/privatizacia_velka.htm).
82 A public register of privatized property was established in 1999, and the processes made transparent
by passing the Principles for the Submission of Proposals for the Issuance of Decisions on the Privatisation of
the Property of State Enterprises and Organisations Through Direct Sale (Resolution No.1012 of
November 1999).
83 The 1995 legislation prohibited privatization for 29 companies and preserved majority state
ownership in a further 45 companies.  These enterprises were mainly in the infrastructure, telecommunications,armaments, and agriculture sectors.
84 Privatization of natural monopolies reserved for majority state ownership must be approved by the
National Council.  Although the 1999 legislation did not specify the level of minimum state equity for the three
other entities, this has since been set at 34% in the approved strategies established for privatizing these entities.These divestments no longer have to be approved by the National Council, unless the ownership limits are to beexceeded.
85 OECD document DAFFE/INV/IME(99)9, 20 December 1999, p.5.WT/TPR/S/91 Trade Policy Review
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(Resolution No. 1013).  In June 2000, it considered a paper on Strategy for Further Process of
Privatisation aimed at accelerating privatization.  It has embarked on a number of additional
privatizations, including the recent divestment of a majority stake in Slovak Telecoms.  Government
plans also include the conversion to joint-stock companies in preparation for divestment by late 2001
of three major electricity companies, and a fourth during 2002; the gas industry by October 2001;
petroleum distribution (Transpetrol) by October 2001; water distribution and sewerage firms; and theSlovak Bus Transport companies by end-2001.  Privatization of the banking sector is also well
advanced, with three major banks targeted (Chapter IV).  Privatization receipts of the National
Property Fund amounted to Sk 28.6 billion in 2000, and totalled Sk 55.3 billion over the period 1995
to 2000.
Table III.9
Privatization of natural monopolies, September 1999(Per cent)
Company and activity Ministry with ownership Permanent state ownership
SPP s.p. Gas distribution Economy 51%
ZsEZ s.p. Electricity distribution (west) Economy 51%
SsEZ s.p. Electricity distribution
(central)Economy 51%
VsEZ s.p. Electricity distribution (east) Economy 51%
Slovenska Posta s.p. Postal services Transport, Post and Telecom Part of the property
Slovensky Vodohosopdarsky
podnik s.p.Water management Agriculture Part of the property
Zeleznice SR s.p. Railway Transport, Post and Telecom Part of the property
Transpetrol a.s. Transportation Economy 51%
Slovenske Elektrame a.s. Electricity generation NPFa 51%
Slovenske Telekomunikacie a.s. Telecommunications Transport, Post and Telecom 34%
Lesy SR s.p. Forestry Agriculture Part of the property
Notes: Shareholder rights exercised by the Ministry of Economy.
Source : OECD (2000a), Interim Economic Assessment Slovak Republic, May 2000, p. 45.
150. Despite the relatively quick privatization of the Slovak economy, it is generally conceded that
it has not generated the industrial restructuring envisaged to substantially raise economic efficiency.Many factors help explain this outcome.  An important bottleneck impeding restructuring was that
privatization largely preceded development of the necessary institutions for a market economy to
function efficiently, including legal and accounting rules, to enable inefficient firms to either
restructure or close.  Bankruptcy laws, for example, were inadequate and cumbersome, and failed to
protect creditors’ rights.
 86  Slovakia has only made progress in implementing effective bankruptcy
legislation since 1997.  A new bankruptcy law, which entered into force on 1 August 2000, improved
the legal framework for industry development (Chapter  II).  However, a large backlog of outstanding
cases exists.  Only 659 bankruptcies were declared in 1999, compared with about 6,000 unprocessed
cases.
151. Poor corporate governance, and diffuse shareholder control created by the voucher/bond
privatization methods, also undermined restructuring.  Regulation of the financial securities industry
was also inadequate.  Many large state-owned en terprises indebted to state-owned banks delayed
                                                          
86 Despite some 40% of enterprises being technically insolvent during 1993 to 1997, the number of
companies declared bankrupt was small.  Laws required conciliatory procedures and exemptions that made theprocess non-transparent, often favouring government-conn ected enterprises, and delayed the process.  See EC
(1998), p.18.Slovak Republic WT/TPR/S/91
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restructuring through access to continued credit from the banks.  An inefficient capital market reduced
access to capital needed by efficient firms to expand.  The direct privatization during 1995 to 1998 of
several key enterprises on non-commercial terms due to political interference also undermined
investor confidence.  Until recently, most privatization cases favoured domestic investors, thereby
denying enterprises access to better overseas technology and improved production and management
techniques.
152. In March 2000, the Government approved a regulatory framework and timetable for
regulating so-called natural monopolies (Concept for the Regulation of Natural Monopolies).87  This
should facilitate deregulation of these markets to encourage greater competition.  A proposed Act on
Regulation of Power-Branches was prepared in 2000, and is expected to take effect from 2002 when
the Office for Regulation of Power Branches will be established.
(iii) Competition policy
153. Slovakia is strengthening its competition policies to help counteract monopolistic and other
anti-competitive practices.  The Antimonopoly Office, formed in 1991, is responsible for
administering the relevant legislation (Act No.1 36/2001 On Protection of  Competition, and earlier
legislation).88  Since the last Trade Policy Review of Slovakia, the legislation has been amended
several times to bring it into line with EU requirements.  For example, exemptions from the
prohibition of agreements restricting competition in production of certain agricultural products (milk,
animals raised for meat, oil plants, cereals, sugar beet, vegetables, fruit, and potatoes) were removed
(amended by Act No. 121/2000).  Two important no tices were also introduced by the Antimonopoly
Office: Notice 167, which sets out details for calculating turnover; and Notice 168, which provides the
conditions for notification of industry concentration.
154. The new legislation strengthened the independence of the Antimonopoly Office including
through appointment of the Chairman for a fixed period by the President of the Slovak Republic,
following a proposal from Government. A number of provisions were also revised to remove
ambiguities of interpretation of certain provisions, and to better ensure compliance by administrative
bodies and municipalities.  Certain procedural provisions were introduced into the legislation where
the general rules on administrative proceedings (Act No. 71/1967 On Administrative Proceedings)were insufficient for competition cases.
155. Slovakia’s competition legislation covers goods and services.  It prohibits agreements
between suppliers  whose object or effect is or might be to restrict competition, unless provided for in
the Act.
89  Prohibited agreements include those on price fixing, commitments to limit or control
production, sales, technical development or invest ment, and on dividing the market or sources of
                                                          
87 Based on overseas evidence, it is not clear that those activities designated in the legislation are
indeed natural monopolies.  Many previously thought natural monopolies, such as basic telecom services andelectricity, have been shown to be capable of competitive supply once they have been deregulated and
competition is encouraged.
88 Article 55(2) of the Constitution, also provides for protection and promotion of economic
competition.
89 Agreements restricting competition are permitted if they contribute to improving the production or
distribution of goods or to promoting technical or economic progress; allow users a fair share of the resultingbenefit; do not impose on the parties such restrictions which are indispensable to the attainment of these
objectives; and do not afford the parties the possibility of eliminating competition in respect of a substantial part
of the goods in question.  In 2000, a threshold test was also introduced whereby agreements restrictingcompetition (other than those fixing prices or dividing the market or sources of supply) are not prohibited if thecombined or cumulative effect does not exceed 5% of the total market share of the good.  In May 2001, thisthreshold was raised to 10%.WT/TPR/S/91 Trade Policy Review
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supply (Article 4).  Such agreements are void.  Consumers may take civil action in the courts
requiring that the violating party to such an ag reement refrain from such illegal behaviour or to
remedy the breach.  Review of possible anti-competitive practices accounts for most (around 80%) of
the Office’s cases.  In 2000, 29 cases were reviewed, compared with 131 in 1999, 217 in 1998, and a
total of 65 cases during the three years 1995 to 1997.
156. Abuse of dominant position by a supplier that is not subject to "substantial competition" or
due to his "economic strength can behave independently" is prohibited (Article 8).  The revised
legislation no longer presumes that a supplier is not subject to "substantial competition" if his market
share is 40% or above.  Such abusive behaviour covers enforcement of disproportionate contractual
conditions; restricting production or sale of goods to the detriment of consumers; and applying
different trade conditions to entrepreneurs rega rding comparable performance.  The legislation
contains provisions on abuse of dominant position by a holder of an "essential facility"
(Article 8(3)-(5), and against predatory pricing behaviour (Article 8(2)e).  In 2000, the Office handled
35 cases on abuse of dominant position.  A dominance test is also applied to mergers or acquisitions.
These are prohibited if they "create or strengthen a dominant position, which may result in major
barriers to effective competition in the relevant market" (Article 12(3)).  Threshold limits apply to
mergers that are subject to control and must be notified to the Office.90  In 2000, the Office reviewed
134 merger cases.
157. The Office may impose fines on entrepreneurs for illegal activity; these may be up to 10% of  
turnover for the previous closed accounting period, and up to Sk 10 million where turnover was zero
or is impossible to calculate.   In 2000, the Office imposed fines totalling Sk 11.3 million and
collected penalties of Sk 3.8 million.  Repeated fines may be levied for continuing offences.  Any
decision by the Office can be  reviewed by the Supreme Court.
158. The Act applies to all activities and actions of undertakings that restrict or may restrict
competition, with the exception of restrictions on competition performed by undertakings that provide
services of public interest pursuant to special regulations.
(iv) Price controls and price support marketing arrangements
159. Price controls apply mainly to utility charges, especially energy.  The Ministry of Finance sets
these prices.  The Government has taken recent steps to increase regulated prices to better recoup
supply costs.  For example, household electricity and heating prices have each risen by well over
100% in the past year; and rents have increased by 70%.  Administered prices were last adjusted
upwards on average by 17% in February 2001.  Electricity prices for households are cross subsidized,
paid for by industrial users.  Milk prices at the farm gate were deregulated from 1 January 2001.Goods and services subject to price regulation account for about 5% of GDP.  The Government
intends to raise administered prices annually to eliminate cross subsidies and to achieve full cost
recovery.
160. Substantial price support and marketing arrangements apply in the agriculture sector.  The
State Fund Market Regulation (SFMR) supports guaranteed prices for a number of commodities byintervening in the market to buy and stockpile, as required.  The products covered, together with the
guaranteed prices, intervention quantities, and the level of export subsidies, are set annually by the
SFMR Council. Commodity councils, which include farmer and Ministry of Agriculture
                                                          
90 Where the combined annual turnover of partic ipants is at least Sk 500 million, and the annual
turnover of at least two of them is above Sk 150 million each, or if they hold 25% or more of the market.Slovak Republic WT/TPR/S/91
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representatives, advise the SFMR.91  The main commodities covered are cereals (wheat, industrial
maize, and barley); live cattle and beef meat; live swine and pork meat; milk and dairy products;
potatoes; live poultry; fresh eggs; and beet sugar.  Most intervention has been on dairy products and
beef since 1995.  Intervention purchases occur whenever the market price falls below the guaranteed
price.  The Council also sets production quotas an d higher minimum prices paid by food processors
for such output.  Any surplus above production is purchased at the guaranteed price by the SFMR.The guaranteed price is set at 90% of production costs.  In 2000, the guaranteed and minimum prices
on wheat were Sk 3,000 per tonne and Sk 4,000 per tonne respectively, and on potatoes Sk 2,000 per
tonne and Sk 4,500 per tonne.  State budget cont ributions to the operations of the Fund were
Sk 0.9 billion in 1999, Sk 0.8 billion in 1998, and Sk 1.1 billion in 1997.
161. In 1999, state intervention purchases amounted to Sk 0.6 billion, down from Sk 1.4 billion in
1998.
92  For some commodities, such as wheat, maize, sugar, and beef, SFMR purchases are as high
as 10% of marketed quantities.  The Fund’s intervention decisions are claimed to be ad hoc, even
though market orders or rules exist on a number of commodities, such as cereals, milk, pigmeat, beef,
and sugar.93  During 1999, new market orders, effective from 2000, were prepared for cereals,
potatoes, sugar, beef, and pork meat.  The main change was the introduction of production quotas forpurchase by processors at administered minimum prices.
162. The State Reserve Fund (SRF) can also influence prices by maintaining strategic stocks of
commodities such as wheat, barley, and sugar.  The SRF activities are handled separately by the
Government and, according to authorities, are not influenced by agricultural policies.   However, the
two Funds appear to be closely related, and one  SRF member sits on the commodity councils that
advise the SFMR.  This creates some uncertainty regarding whether the SRF also performs a price
support function.
94
(v) Protection of intellectual property rights
163. Slovakia is a party to all the major multilateral agreements on intellectual property rights.
Since its previous Review, it has ratified the WIPO treaties on Internet protection and has joined the
Patent Law Treaty.  It maintains a comprehensive system for protecting intellectual property rights
(Table III.10).  Legislation has been amended to comply with EU requirements as part of the acquis .
The WTO Council for Trade-Related Aspects of Intellectual Property Rights (TRIPS) reviewed
Slovakia’s copyright legislation in 1999.95  Slovakia did not seek the special transitional arrangements
available until 2000 under the WTO TRIPS Agreement for centrally planned economies undergoing
transition to a market economy.  According to the authorities the main changes have been made
primarily to harmonize arrangements with the EU for accession.  Consequently, a number of ECdirectives and regulations have been implemented during the review period, covering most aspects of
intellectual property legislation, including copyright, industrial property, trade marks, and
topographies of semiconductor products.  Slovakia has not requested any transitional periods from the
EU on intellectual property.
                                                          
91 For example, the composition of the commodity council for cereals is: six members from the
Chamber for Agriculture and Food Industry, of which two are from the agricultural union, and one member eachfrom the purchasing organization, society of millers, and the union of beer and malt producers; three membersfrom the Ministry of Agriculture; one member from the SFMR Fund; and one member from the State Reserve
Fund.  The Ministry of Agriculture appoints the Chairman, Vice-chairman and members of the council.
92 Ministry of Agriculture (2000), p.51.
93 EC (1998), p.51.
94 EC (1998), p.51.
95 WTO documents IP/C/M/18, 11 June 1998 and IP/Q/SVK/1/Add.1, 5 January 1999.WT/TPR/S/91 Trade Policy Review
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Table III.10
Summary of intellectual property protection in the Slovak Republic, 2001
Form Main legislation CoverageSelected
exclusionsDuration Competency
Copyrights
and related
rightsCopyright Act No.
383/1997 and
amendmentsLiterary, scientific, and artistic
works (including computer
programs and makers of
databases)
Related rights cover
performers, phonograms,audiovisual fixations,
broadcasters and publishersLife of author plus 70
years (50 years from the
creation for performers,
phonograms,audiovisual fixations,
broadcasters and
publishers; and 15 yearsfrom the making for
databases)Ministry of
Culture
Patents Part one of Act No.
527/1990 onInventions,
Industrial Designs
and RationalizationProposals (new
legislation pending)Any invention product that
meets the requirements forpatentability specified by the
Patent Law.  Compulsory
licences may be decided by the
Industrial Property OfficePublic
interest; plantor animal
varieties;
biological
processes20 years from filing date Industrial
Property
Office
Topographiesof integrated
circuitsAct No. 146/2000
on Topographies of
Semi-conductor
ProductsResults of creators' intellectual
effort that are not
commonplace in the semi-conductor industry.
Compulsory licences may be
decided by the Industrial
Property Office10 years from filing date
(or, if earlier, from first
use)Industrial
Property
Office
Trade marks Act No. 88/1997 on
TrademarksTrade marks, service marks,
and collective marks.  Use
requirement of five years10 years from filing
date, with possibility to
be renewed indefinitely
for 10-year periodsIndustrial
Property
Office
Industrial
designsPart 2 of Act No.
527/1990 onInventions,
Industrial Designs
and Rationalization
ProposalsProtects a design that is new
and susceptible of industrial
applicationPublic
interest;humanitarian
principles;morality5 years, with possibility
of two five-year
extensionsIndustrial
Property
Office
Geographicalindications
(includingappellations
of origin)Act No. 159/1973
on Protection of
Appellations of
OriginProtection for appellations of
origin of agriculture, industrial
and handicraft productsUnlimited Industrial
Property
Office
New plant
varietiesAct No. 132/1989
on New Plant and
Animal Variety
ProtectionNew, distinct, homogenous and
stable varieties.  Compulsory
licences may be decided by the
Ministry of AgricultureGenerally 20 years from
the date of the filing; 25
years for varieties ofhop, grapevine, fruit,
ornamental and forest
wood species androotstocks thereof; and
throughout the duration
of the breed for breedsMinistry of
Agriculture
Utility
modelsAct No. 478/1992
on Utility ModelsAny technical solution that is
new, exceeds the framework ofmere professional skill, and is
industrially applicablePlant varieties,
animal breeds,biological
reproduction
materials;production
processes or
work activities4 years from filing date,
with two three-year
extensions possibleIndustrial
Property
Office
Source: WTO Secretariat, based on information provided by the Slovak authorities, and WTO (1995), Trade Policy Review
– Slovak Republic , Geneva.Slovak Republic WT/TPR/S/91
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Copyright
164. Following amendments to its Copyright Act (No. 383/1997), effective 1 August 2000 (Act
No. 234/2000), Slovakia’s copyright protection, acco rding to authorities, complies fully with EU
requirements.  The main change concerned adding legal protection for the development of digital
information technologies and databases, as per changes in the WIPO "Internet" treaties, on Copyright
and on Performances and Phonograms.  Slovakia ratified both these treaties on 14 January 2000.  Thenew copyright legislation does not provide express protection for pre-existing works and sound
recordings.
96  The Ministry of Culture continues to be responsible for copyright protection.
165. Slovakia’s copyright legislation provides for the principle of national exhaustion of the
holder’s exclusive right of reproduction, distribution, broadcast and communication to the public.
This means that the first lawful sale of this work in Slovakia exhausts the holder’s right.  According to
the authorities, no restrictions apply to parallel imports of genuine goods from other licensed
international distributors.  Sole distributorships of copyright products in Slovakia are not limited to
sole distributorships issued by the copyright holder.
166. Intellectual property is also covered by the competition legislation administered by the
Antimonopoly Office.  Agreements to transfer rights or to grant licences over inventions, industrial
designs, trade marks, protected varieties of plants or animal breeds, utility models, and protected
topographies of semiconductor products, that impose unnecessary restrictions on competition for the
purpose of protection, are prohibited (Article 5 of the competition legislation).
Industrial property
167. The Industrial Property Office administers industrial property rights.  Current legislation
covers patents, industrial designs, and utility models.  New legislation is to be adopted  at end-2001
which, according to authorities, will be fully compatible with EU requirements.  It will alsoincorporate revisions to the European Patent Convention.  Slovakia signed the Final Act for adopting
the Patent Law Treaty in June 2000, and has been invited to join the European Patent Office as from
1 July 2002.  At end-2000, there were 3,572 valid patents in Slovakia.
168. The number of foreign applicants for patents in Slovakia has increased during recent years,
from 1,498 in 1996 to 1,799 in 2000.  Most patent applications are from foreign inventors, coveringalmost 90% in 2000.  Applications come mainly from the United States, Germany, and the
United Kingdom.  In 2000, patents were awarded on about half of applications.  The average period
for processing a patent application was five years.  Applications are published after 18 months and a
full examination of the patent may be requested within 36 months from the date of filing.
169. New legislation (Act No.146/2000) was a dopted on Topographies of Semiconductor
Products, effective 1 June 2000.  This is fully consistent with EU requirements according to the
authorities.  No applications for topography of semiconductor products were filed in 2000.  At end-
2000, five topographies were protected, all processed under the previous legislation.
170. Compulsory licences can be issued for patents, utility models, and topographies of
semiconductor products.  In the area of patents and utility models, compulsory licences can be grantedif the owner of the patent does not use it sufficiently or where an important public interest is
endangered.  The compulsory licence for non-use may not be granted within the period specified by
the Paris Convention – four years from the date of filing or three years from the date when it was
granted, whichever is the later.  The duration of the compulsory licence is not specified in the
                                                          
96 International Intellectual Property Alliance (2001), p. 474.WT/TPR/S/91 Trade Policy Review
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legislation, but is determined by the Office.  Courts may issue a compulsory licence for topographies
of a semiconductor product after three years from its date of registration, or before in the case of a
serious public nuisance, provided it has not been exploited by the owner without reasonable grounds
or insufficiently, and that the products containing the protected topography are not present in Slovakia
in sufficient quantities.  The compulsory licence ma y be issued exclusively, such as to remedy anti-
competitive practice by the owner, as determin ed by the Antimonopoly Office, or non-exclusively
limited for the duration and purposes, subject to being predominantly supplied on the domestic
market.
Trade marks and geographical indications
171. Amendments to trade mark legislation (A ct No.55/1997) will become effective from
1 January 2002.  In 2000, there were 4,408 national trade mark applications, about half from domesticsources.  At end-2000, there were 27,247 registered trade marks in Slovakia, and 86,682 international
trade marks were valid in Slovakia.  It has been claimed that there are lengthy delays in registering
trade marks in Slovakia.  According to the authorities, the registration period was shortened in 2000 to
about 1 to 1.5 years.
172. Slovakia will strengthen its protection of geographical indications for alcoholic beverages
with amendments to its legislation on Protection of Product’s Origin (Act No. 159/1973), to become
effective during the first half of 2003. This will focus on all kinds of geographical indications,
including alcoholic beverages.
Enforcement
173. Slovakia’s enforcement provisions are found in the specific intellectual property legislation as
well as in the Commercial Code (Law No. 51 3/1991) and the Civil Court Proceedings Code
(Act No. 99/1963).  Trade mark legislation enables the mark owner to enforce his rights in the courts
to prevent illegal use, and to seek compensation fo r damages.  Holders of a registered appellation of
origin may also exercise their rights to prohibit infringement.  Similarly, holders of industrial property
rights may protect their rights through the courts and be indemnified for losses incurred.  The
Commercial Code protects against "unfair competit ion" by prohibiting the "deceitful description of
goods and services" and "practices contributing towards mistaken identity."  Persons whose rightshave been infringed by such practices may seek to have them stopped and seek appropriate
compensation from the offender.  The Civil Code allows courts to issue preliminary or final
injunctions requiring defendants of court actions, including cases of intellectual property, to desistfrom certain actions; and to order compensation for damages.
174. Criminal proceedings against intellectual property rights infringements are contained in the
Penal Code (Act No. 140/1961).  Illegal use of trade marks, including appellation of origins, is
punishable by imprisonment of up to one year or by a fine or by forfeiture of the offending goods
(Section 150).  Violations of industrial property rights, including patents, industrial designs, utility
models or topographies of semiconductors are punishable by imprisonment of up to three years or bya fine (Section 151).  Copyright offences are subjec t to a fine or imprisonment for a maximum of two
years, or from six months to five years if "considerable profit" (100 times the minimum salary)
resulted, and seizure of the infringing material (Section 152).
175. The Customs legislation obliges authorities to consider prohibitions and restrictions regarding
intellectual property (Section 60).  The trade mark legislation also specifically prohibits the import or
export of goods carrying an illegal mark (Section 25).  Right holders can request suspension of
imports and their non-release if justified suspicion exists that these goods infringe their rights,
including over copyright as well as trade marks.  Moreover, while there is no obligation on customsSlovak Republic WT/TPR/S/91
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authorities to check for illegal products, they may withhold the release of such goods on reasonable
suspicion.
176. Customs legislation, which became effective on 1 July 2001, is aimed at strengthening the
enforcement mechanisms against importation of counterfeit and pirated products.  It gives customs
officers additional powers to seize imports of alleged illegal products.  The Government also intendsto make amendments to the Civil Code in order to improve enforcement procedures.  In addition,
recent amendments to the copyright legislation strengthened enforcement procedures by providing for
the possibility of seizure and destruction of infringing copies.  However, it is claimed that the changes
failed to remedy a presumption against permittin g monetary compensation for infringements, which
have made obtaining adequate damages in copyright cases difficult in Slovakia, and that they do notcontain civil ex parte provisions on the application of provisional measures to prevent infringements.
97
In 2001, Slovakia was added to the US “watch list” of countries the United States sees as failing toprovide adequate intellectual protection to American interests under the “Special 301” provisions ofthe US Trade Act.
98
                                                          
97 International Intellectual Property Alliance (2001), p. 475.
98 According to U.S. sources, substantial piracy of entertainment and business software applications
exist in Slovakia, estimated at 85% and 45%, respectively, in 2000.  The incidence of motion picture piracy andof sound recordings was estimated to be much lower, at 20% and 10%, respectively.  The main concerns wereinadequate enforcement of copyright protection, especially in controlling the importation of illegal materialfrom neighbouring countries, such as the Ukraine.  (International Intellectual Property Alliance (2001), p. 473.