RESTRICTED
WORLD TRADE WT/ACC/HRV/5
29March 1996
ORGANIZATION(96-1156)
Original: English
ACCESSION OFCROATIA
Communication from Croatia
TheMinistry ofEconomic Affairs oftheRepublic ofCroatia hassubmitted thefollowing
Supplementary Note totheMemorandum ontheForeign Trade Regime ofCroatia.
_______________WT/ACC/HRV/5
Page2
Supplementary Note totheMemorandum ontheForeign Trade Regime
oftheRepublic ofCroatia
(Update)
In1994and1995thetransformation process ofCroatian economy intoamarket economy based
onprivate ownership wascontinued.
Service industry andparticularly financial andbusiness services typical ofamarket economy
were intensified. In1995, theshare ofservices inthetotaladded value reached 63.6percent.
Theriseofsmall businesses hascontributed tocontinued changes ofthemarket structure.
Bythemiddle of1995, thenumber ofbusinesses increased byapproximately 70percentinrelation
tothesituation attheendof1993. Theshare ofprivate businesses intotalenterprises grewto95.2per
cent.
Bythemiddle of1995, theprivate sector realized 54percentofthetotaladded value and
employed 55percentofthetotalnumber ofemployees.
Thebuild upofthelegalandinstitutional framework appropriate toamarket economy has
continued aswell. Theenactment ofnewlabour, investment fundandsecurities legislation haslaid
thelegalfoundation ofthelabour andcapital markets.
Trends intheeconomy
Duetoasuccessfully implemented stabilization programme from October 1993, throughout
1994and1995theinflation hasbeenbrought down to3percent. Taxsystem reform andastringent
public spending policy havebalanced outourpublic finances. The1994 budget hadasurplus equal
to0.6percentoftheGDP anda0.8percentdeficit in1995. Byintroducing value-added taxon
1January 1997 Croatia willhaveadjusted itstaxsystem totheEuropean taxsystem.
Thestabilization ofthemacroeconomic framework havecreated preconditions forbreaking
thefallofoverall business activity. In1994 and1995 gross domestic product grew by0.8percent
and2.7percentrespectively. Nevertheless, theincrease ofbusiness activities hashadnoimpact on
thetotalemployment ratebecause ofahighlevelofunderemployment inmostbranches oftheeconomy.
Asaresult, ahighunemployment ratehasbeenmaintained.
Asignificant increase ingoods exports andapartial recovery oftourism in1994 offset an
increase ofimports onthecurrent account balance. However, in1995 asignificantly higher levelof
consumer demand andinvestments incomparison to1994 resulted inacurrent account deficit of
10percentoftheGDP. Thisdeficit wasmostly financed byaninflux ofshort-term capital intothe
private non-banking sector.
In1994and1995 Croatia 'sinternational liquidity improved significantly. Foreign exchange
reserves grew 2.5times since theendof1993, reaching US$3.3 billion bytheendof1995, equalling
Croatia 'stotalallocated foreign debt. Anagreement hasbeenworked outonrescheduling apartof
foreign debtwiththeParis Club ofCreditors, while talkswiththeLondon Club areunder way.
Firmcommitment tocontinue market reforms andthesuccessful macroeconomic stabilization
havecreated prerequisites forestablishing closer relations withinternational financial institutions as
wellasforfurther integration ofCroatia intotheinternational economic andfinancial community.
After thesuccessful termination ofthestand-by arrangement withtheIMFin1995, negotiations
foranextended fundfacility aretaking place tosupport theGovernment 'sactivities inthefieldofFOREIGN INVESTMENTS INCROATIA
FOREIGN INVESTMENTS INCROATIA 1991-1995 (INPRIVATIZATION PROCESS)
Country Purchaser Company HQ Sector Amount
invested (DM)Book value
purchased (DM)Equity
stake (%)
Hofmann &Pankl Beteiligungese Straad.d. Hum naSutli Glass 57,054,200 57,054,200 82.18
Messer Griesheim Montkemija d.d.-tehnic ki
plinoviZapre šic´ Exploring 24,900,800
Business Consulting Ltd. PIKVrbovec-Mesna
industrija d.d.Vrbovec Meat product. 8,298,900 8,298,900 9.39
Austria Business Consulting Ltd. Prerada d.d. Split Brewing 7,034,000 7,034,000 16.01
Franz Haas Waffelmaschinen I.G. Unit-V d.d. Vara diniske Toplice Metals 1,850,000 1,850,000 29.69
Kaminwerke Schiedel Proizvodnja dimnjaka d.d. Novi Golubovec Stone processing 1,650,000 1,650,000
Kucifer Sloga d.d. Zagreb Wholesale 20,600 20,600 1.10
Total 7 7 100,808,500 75,907,700
Societte Suisse DeCiment Portland S.A. Tvornica cementa
Koromac nod.d.Koromac no Cement 55,000,000 55,000,000 50.71
Trioinvest Dalmacijacement d.d. KaštelSucurac Cement 25,200,000 42,000,000 15.00
Elektro-Geraete A.G. Elektrokontakt d.d. Zagreb Electric eq. 15,075,876 15,075,800 36.39
Switzerland SGSSociete Generale DeSurvil ISCO d.d. Rijeka Consulting 714,000 714,000 97.28
Tibora S.A. Vigo d.d. Vara din Leather 619,000 619,000 22.65
Tibora S.A. Mogal d.d. Vara din Health care 443,500 443,500 48.10
Balex A.G. Croatia autod.d. Zagreb Trade 6,630 7,500 43.10
Total 6 7 97,052,376 113,852,300Country Purchaser Company HQ Sector Amount
invested (DM)Book value
purchased (DM)Equity
stake (%)
Sweden Telefonaktiebolaget LMEricsson Tesla d.d. Zagreb Electronics 70,000,000
Total 1 1 70,000,000
Belgium Interbrew S.A. Zagrebac kapivovard d.d. Zagreb Brewing 40,415,800 30,707,900 74.82
Total 1 1 40,415,800 30,707,900
Heidelberger Zement Istracement International
d.d.Pula Cement 15,000,000 15,000,000 25.00
Siemens AG ATM d.d. Zagreb Measurement eq. 9,290,300 9,290,300 43.95
Ireks GmbH Ireks Aroma (Chromos-
Aroma) d.d.Zagreb Chemicals 6,300,000 6,292,700 64.78
Germany Forina Agkar undHolehandlisge Teina d.d. Osijek Food 4,869,000 4,869,000 30.75
ICCInterConsult Consortium Adriainspekt d.d. Rijeka Consulting 811,600 811,600 50.57
MK-Baugesellschaft Z.M.T. d.d. Zagreb Foreign trade 764,290 664,600 50.00
Karlsberg Braverei KG.Weber Zagrebac kapivovara d.d. Zagreb Brewing 700,000 700,000 1.71
Buakbu Bojoplast d.d. Pula Constructing 286,500 286,500 33.21
Total 8 8 38,021,690 37,914,700
TheCoca ColaExport Corporation Coca ColaBottlers d.d. Zagreb Brewing 17,643,787 17,643,787 66.67
TheAmerican Croatian Investment Group Hotel Dubrovnik d.d. Zagreb Hotel business 7,500,000 7,415,500 27.76
Croatian-American Enterprises Inc. Zadranka d.d. Zadar Retail 6,500,000 6,187,400 30.42
U.S.A. Globtrade USA INC PIKVrbovec-Mesna
industrija d.d.Vrbovec Meat prod. 3,707,000 3,707,000 4.19
Jelena Shipping Company Limited Biserka d.d. Zagreb Chemical 1,771,700 1,771,700 47.84
American Energy Product Co. Termika, Novi Marof d.d. Novi Marog Non-metals 277,200 277,200 2.20
Total 6 6 37,399,687 37,002,587Country Purchaser Company HQ Sector Amount
invested (DM)Book value
purchased (DM)Equity
stake (%)
Grassetto Nederland B.V. AMSTE Adriatic Yacht Club d.d. Opatija Maritime 28,447,000 28,447,000 26.79
Holland J.Gosschalk &Zoon B.V. PIKVrbovec-Mesna
industrija d.d.Vrbovec Meat process. 1,657,600 1,657,600 1.88
Total 2 2 30,104,600 30,104,600
Tuborg Karlsberg A.G. Podravka d.d. Koprivnica Brewing 5,600,000 5,600,000
Siemens A.G. Rade Koncar-
Elektroindustrija d.d.Zagreb Electric eq. 4,056,000 4,056,000 1.00
Denmark Hempel 'sMarine Paints Hempel d.d. Umag Chemicals 3,414,300 3,414,300 39.00
Danski fondzainvesticije Podravka d.d. Koprivnica Brewing 2,800,000 2,800,000
Henry Degenkolbf Gmbh &CIE Unijatrade d.o.o. Zagreb Foreign trade 23,848 28,056 33.33
Total 5 4 15,898,148 15,898,356
Liechtenstein Southern Breweries Estalishment Karlovac kapivovara d.d. Karlovac Brewing 15,300,000 15,112,600 30.48
Total 1 1 15,300,000 15,112,600
Societa Italiana Acetilene &D Montkemija Rijeka d.d. Bakar Chemicals 4,056,000 4,056,000 1.00
Italy Globtrade Italiana S.P.A. PIKVrbovec-Mesna
industrija d.d.Vrbovec Meat process. 2,505,500 2,505,500 2.50
Sicad Sipro d.d. Umag Chemicals 500,000 500,000 26.18
Total 3 7,061,500 7,061,500
Lek Medica d.d. Zagreb Trade 1,133,000 1,133,000 7.50
Krka Medika d.d. Zagreb Trade 1,063,000 1,063,000 7.04
Jugotekstil Tekstilna industrija Zadar
d.d.Zadar Textile 428,600 428,600 1.14
Merkator-Nanos Merkator-Nanos-Opskrba
d.d.Cabar Trade 400,900 400,900 31.46
Slovenia Marles Holding d.d. Marles Gmp Monter
d.o.o.Vinkovci Construction 228,245 228,245 100.00
Metalna Ingra d.d. Zagreb Construction 131,600 131,600 3.29
Gradis Ingra d.d. Zagreb Construction 94,000 94,000 2.35
Litostroj Ingra d.d. Zagreb Construction 72,300 72,300 1.81
Tekol Ingra d.d. Zagreb Construction 2,200 2,200 0.06Country Purchaser Company HQ Sector Amount
invested (DM)Book value
purchased (DM)Equity
stake (%)
Biro71 Ingra d.d. Zagreb Construction 400 400 0.01
GIPVegrad Ingra d.d. Zagreb Construction 400 400 0.01
Total 11 5 3,554,645 3,554,645
Marine France S.ARL Šibenka d.d. Šibenik Trade 1,650,000 1,650,000 6.81
France Sepia International Marimirna d.d. Rovinj Fishery 1,095,000 1,095,000 23.60
Total 2 2 2,745,000 2,745,000
Luxembourg EastWell Chromos bojeilakovi d.d. Zagreb Chemicals 1,673,100 1,673,100 5.81
Total 1 1 1,673,100 1,673,100
UK Kamacrown International Limited Commeco d.d. Zagreb Foreign trade 200,592 179,100
Total 1 1 200,592 179,100
Beton Ingra d.d. Zagreb Construction 82,900 82,900 2.07
Mavrovo Ingra d.d. Zagreb Construction 36,800 36,800 0.92
Macedonia Rade Koncar-Aparatna tehnika Ingra d.d. Zagreb Construction 6,900 6,900 0.17
Holding Frinko Bitola Ingra d.d. Zagreb Construction 4,200 4,200 0.11
Pelagonija Ingra d.d. Zagreb Construction 200 200 0.01
Total 5 1 131,000 131,000
Grand total 57 50 460,362,638 371,845,088