RESTRICTED
WORLD TRADE WT/ACC/HRV/9
10April 1996
ORGANIZATION(96-1259)
Original: English
ACCESSION OFCROATIA
Trade inServices
TheMinistry ofEconomic Affairs oftheRepublic ofCroatia hassubmitted thefollowing note
onthetrade services régime.
_______________WT/ACC/HRV/9
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1. GENERAL
The Republic ofCroatia isamarket-oriented country intransition with anaimofinclusion into
international trade. Hence ithasputallitsefforts intoadjusting Croatian legislation according tothe
principles ofliberalisation advocated bytheWTO.
Atpresent Croatia does nothave consistent legislation togovern provision ofcertain services. Hence
bilateral negotiations concerning such services must bedelayed until newlaws arepassed. Preparation
ofthemajority ofdraft laws concerning theservice sector isinprogress. Special emphasis isputon
theintroduction ofamore liberal approach tointernational trade ofservices compared withtheprevious
legal system.
Wewould liketoemphasise thatweareopen tobilateral negotiations concerning theobligations related
toprovision ofthose services which thecontract parties oftheWTO areinterested in.
Croatia alsofully accepts theGATS rules andprinciples (General Agreement onTrade ofServices)
with theaimofencouraging international trade ofservices within theconditions oftransparency and
gradual liberalisation. Furthermore, Croatia iscommitted totherules which prevent discriminatory
measures andrestrictions related tomarket access andnational treatment inallaspects ofproviding
services.
FINANCIAL SERVICES
Forvarious reasons, particularly because ofthesmall sizeoftheeconomic area oftheRepublic of
Croatia, being acountry intransition, theprocess ofrehabilitating thebanking andinsurance systems
andadapting tothenewconditions following thecollapse ofYugoslavia andofcommercial tieswith
theformer socialist countries ofEastern Europe, financial services areanextremely sensitive areafor
Croatia inwhich liberalisation needs tobecarried through carefully andgradually. Croatia 'smost
important banks areundergoing aprocess oftransformation.
Stock exchange activities arenow toCroatia aswell assecurities trading ingeneral, which isstill
somewhat limited.
Croatia isprepared toparticipate infurther negotiations ontheliberalisation offinancial services and
somake upitsabsence from theUruguay Round ofnegotiations.
b)Banking andother Financial Services
The establishment ofbanks, subsidiaries andrepresentative offices intheRepublic ofCroatia by
foreigners isconditional upon theprinciple ofreciprocity. Foreign physical andlegal entities canbe
thefounders ofabank intheRepublic ofCroatia while aforeign bank canestablish asubsidiary in
theRepublic ofCroatia andperform allbanking activities inlinewiththeBanks andSavings Institutions
Act("Official Gazette", no.94/93) onthecondition thatapproval hasbeen received from theNarodna
Banka Hrvatske (The National Bank ofCroatia) under equal terms asdomestic banks. Inorder to
establish arepresentative office, foreign banks must beentered intheRegister ofForeign Bank Branches
intheRepublic ofCroatia which ismaintained attheNarodna Banka Hrvatske andsuch abranch cannot
perform banking activities under Article 3oftheBanks andSavings Institutions Act. Subsidiaries
andrepresentative offices donothave thecharacteristics ofalegal entity.
TheLawontheForeign Exchange System, Foreign Exchange Operations andGold Transaction (Official
Gazette, no.91A/93) regulates international payment transactions, thedisposal bynatural persons of
foreign exchange andother monetary instruments andthetaking outorbringing inofdomestic currency,WT/ACC/HRV/9
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domestic andforeign securities andother means ofpayment. Inapositive approach (itprescribes what
ispermitted), thelawstipulates:
- foreign juridical andnatural persons who earn anincome through permanent activity inthe
Republic ofCroatia, aretreated asdomestic persons,
- exchange office operations maybeperformed byauthorised banks andother domestic persons
registered toperform such operations andwhohave signed with anauthorised bank acontract
ontheperforming ofexchange office operations,
- theNational Bank ofCroatia stipulated theoperations which may beperformed bydomestic
andforeign juridical andnatural persons inconnection withinternational payment transactions,
domestic natural persons whoacquired foreign exchange inaccordance withtheLawonForeign
Exchange System, Foreign Exchange Operations andGold Transaction may freely dispose
ofsuch funds andinaccordance with thesame lawmay transfer them andmake payments
abroad,
- thecarrying intooroutofthecountry ofdomestic currency andsecurities denominated inthe
domestic currency ispermitted indenominations, amounts andunder theconditions stipulated
bytheNational Bank ofCroatia,
- foreigncurrencymaybecarriedoutunderconditionsprescribedbytheNationalBankofCroatia,
- savings booklets ofdomestic banks nominated inthedomestic currency butnotregistered in
apersonal name, mayonly betaken orsentoutoftheRepublic ofCroatia with thepermission
oftheNational Bank ofCroatia,
- domestic securities denominated inforeign ordomestic currency, other thancheques andbills
ofexchange, when they areperforming apayment function may only betaken orsentoutof
theRepublic ofCroatia with thepermission oftheNational Bank ofCroatia, foreign securities
may only betaken orsentoutoftheRepublic ofCroatia with thepermission oftheNational
Bank ofCroatia.
Law onissuance andsaleofsecurities shall regulate theissuance ofsecurities andtrade in
those securities through apublic offering forsubscription toand/or thepurchase ofsecurities, thescope,
rights andobligations ofentities onthecapital market, andtheorganization, scope andpowers ofthe
Securities Commission oftheRepublic ofCroatia andthecentral depository agency.
This Law shall establish theSecurities Commission oftheRepublic ofCroatia (hereinafter
"the Commission") asapermanent independent legal entity established toregulate andoversee the
issuance ofsecurities andthesecurities trade, andshall setforth itsobligations andpublic authority.
Inperformance ofthefunctions established bylaw, theCommission shall beindependent and
self-sufficient andshall beaccountable totheAssembly oftheRepublic ofCroatia.
Law onInvestment Funds shall prescribe theconditions forestablishment ofinvestment funds
andcompanies formanagement ofinvestment funds andshall regulate themanner oftheir operation.
Afund may beestablished intheform ofanopen-end fund orintheform ofaclosed-end
fund.
Theinvestment fund shall beestablished onthebasis ofapproval oftheSecurities Commission
(hereinafter"theCommission")exclusivelyforpublicsolicitationofmoneyandpropertyintereststhrough
thepublic saleandissuance ofcertificates ofparticipation intheorshares ofstock, whose assets, with
duerespect fortheprinciples ofsafety, profitability, liquidity andsharing ofrisk, areinvested in
negotiable securities and/or realestate andindeposits infinancial institutions.WT/ACC/HRV/9
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The fund'sbylaws shall regulate thecompany 'slegal relations with theowners ofshare
certificates intheopen-end fund andshareholders oftheclosed-end fund.
TELECOMMUNICATION SERVICES
Publictelecommunicationsinthemobileandfixednetworkforwhichtelecommunicationservices
areoffered atthelocal, inland andinternational telecommunications levels areconstructed andused
byHPT (Hrvatska Posta iTelekomunikacije -Croatian Post andTelecommunications). Public
telecommunicationsinthemobilenetwork(mobiletelephone,mobilesatelliteandothermobilenetworks)
canbeconstructed andused bylegal entities with aconcession from theTelecommunications Council.
Cable television systems atthestate level andatthecounty level canbeconstructed andused bylegal
persons with aconcession from theTelecommunications Council. Aconcession from the
Telecommunications Council isrequired fortheproduction ofprogrammes forcable television. For
public telecommunications inthemobile network, cable television andtheproduction ofprogrammes
forcable television there arenolimits totheamount offoreign investment.
TRANSPORT
Transport isoneofthemost important economic sectors intheRepublic ofCroatia duetothe
geographical position ofCroatia anditseffect onthedevelopment ofother economic activities. As
aresult transport links aregiven great importance inaneffort tocoordinate Croatia 'stransport system
with theEuropean transport system. Within thisframework liberalisation isbeing implemented to
themaximum extent possible under thecurrent circumstances.
a) Rail Transport
Intheareaofrailtransport thenewCroatian Railways Actdraws aboundary between transport
activities andinfrastructure andallows privatisation except inareas ofspecial interest tothestate
(infrastructure). According tothelaw, thestate can,asthemajority owner ofCroatian Railways, issue
concessions forparticular activities inrailtransport. TheCroatian Railways Actpermits foreign
investment inthisarea.
b) AirTransport
Airtransport, duetoitsspecific qualities anddistinct advantages, isofextreme importance
intheoverall transport system ofCroatia, makes agreat contribution totheexploitation ofCroatia 's
economicandtourismpotentialandallowsitsactiveparticipationinEuropeandtheworld.Thetransport
andgeographical position ofCroatia, itsterritorial extent, national distribution andorientation totourism
areimportant factors andpreconditions forthedevelopment anduseofairtransport. Initsairtransport
policy Croatia gives priority totheliberalisation andderegulation ofinternal relations inairtransport
inlinewith transport needs andtheinterests ofusers oftheservice andwilldirect itsefforts inthis
direction infuture negotiations onairtransport. Theexisting AirTransport Actstates thatpublic air
transport(regularorspecialflightsindomesticorinternationalairtransport)mustbeoperatedbycarriers
which fulfil thedefined conditions depending onthetype oftransport. Aforeign carrier canoffer
public transport aspartoftheinternational links with theRepublic ofCroatia under aninternational
contract oraspecial permit. Thelaws oftheRepublic ofCroatia donotprohibit foreign investment
inthisarea.
c) Maritime Transport
Croatia 'sshipping industry isofparticular importance toeconomic policy andCroatia 's
orientation tomaritime affairs. Thestructure ofCroatia 'sshipping fleet haschanged significantly inWT/ACC/HRV/9
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thelastfewyears under theinfluence ofmodern technology inseatransport. Asaresult ofthenew
economic system intheRepublic ofCroatia andtheprivatisation ofcompanies, ananalysis ofthecurrent
situation inCroatia 'sshipping industry isunder way andcould allow thesuccessful privatisation of
companies under new privatisation lawwhich iscurrently intheprocess ofbeing passed. Modern
transport routes, harbour terminals andCroatian shipowners inCroatian ports portray thespectrum
ofCroatia 'sorientation tomaritime affairs. Asaresult, theRepublic ofCroatia isinterested inattracting
andincreasing freight from neighbouring continental countries which naturally gravitate totheAdriatic
ports andtherefore itisalsointerested incooperation with European Union countries.
Theenactment oftheSeaports Law (Official Gazette, no.108/95) hascreated thepossibility
fortheprivatization ofservices inports. Inaccordance withtheprovisions ofthisLaw, alllegal persons
registered intheRepublic ofCroatia forspecific port services may participate inthetender for
concessions forrendering port services. The aforementioned legal provisions will establish the
competitiveness ofports. Foreign investors willalsofindtheir interest ininvestment inCroatian ports.
2. POLICES AFFECTING TRADE INSERVICES
I. HORIZONTAL COMMITMENTS
LEG ALCHARACTER ISTICSOFFIRMS,SUBSIDIARIESANDREPRESENTATIVEOFFICES
INTHE REPUBLIC OFCROATIA
Foreign trading companies andindividual foreign traders cannot offer services ontheterritory
oftheRepublic ofCroatia until asubsidiary isestablished there (Companies Act, "Official Gazette"
no.111/93). According toArticle 7ofthisAct, asubsidiary isnotalegal entity.
Inaccordance with theLaw onInstitutions (Official Gazette, no.76/93), institutions may be
established forthecontinuous execution ofactivities inthefields ofeducation, science, culture,
information, sports, physical culture, technical culture, child welfare, healthcare, social welfare, welfare
ofdisabled persons andsimilar activities, ifthese arenotperformed forthepurpose ofearning profits.
Institutions may beestablished bydomestic andforeign natural andlegal persons, unless otherwise
stipulated bylaw, fortheexecution ofspecific activities orforspecific institutions. Public institutions
may beestablished foractivities which, according tolaw, must beperformed aspublic services.
INVESTMENT INTHE REPUBLIC OFCROATIA
Thelegal framework forforeign investment intheRepublic ofCroatia isconstituted sothat
nodifference ismade between domestic andforeign investment. Alltheoptions available todomestic
investors apply tocapital investments made byforeign entities ("Official Gazette", no.111/93).
According totheCompanies Act, every legal entity with registered headquarters outside the
Republic ofCroatia andevery physical person who isaforeign citizen, refugee orstateless person
which acquires partownership orshares inacompany orinvests initonacontractual basis isconsidered
aforeign investor. Citizens oftheRepublic ofCroatia with permanent residence outside theRepublic
ofCroatia arealsoconsidered foreign investors.
Subject tothecondition ofreciprocity, aforeign investor establishing orparticipating inthe
establishment ofatrading company intheRepublic ofCroatia thereby gains rights andassumes
obligations under thesame conditions asadomestic person.WT/ACC/HRV/9
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ThefundamentalguaranteesforeconomicactivitiesarelaidoutintheConstitutionoftheRepublic
ofCroatia. Itguarantees ownership rights andoutlines thewayinwhich foreigners canrealise such
rights under conditions defined bylaw.
Inreference toforeign investment, theConstitution oftheRepublic ofCroatia includes three
very important guarantees:
a) rights gained through capital investment cannot bediminished bylaworanyother legal act;
b) foreign investors areguaranteed thefreedom torepatriate profits; and
c) they areguaranteed thefreedom torepatriate invested capital.
These guarantees have been realised inlaw. Thus, forexample, Article 41oftheElements
oftheLaw onForeign Exchange System, Foreign Exchange Operations andGold Transaction enables
theforeign investor tofreely repatriate profits gained through capital investment inCroatia, capital
belonging tohimafter theinvestment ceases andrevenue from thesaleofshares andpartownership.
This lawgives domestic andforeign persons thepossibility ofhaving foreign exchange accounts in
convertible currency atauthorised banks inCroatia with freeaccess totheforeign currency inthese
accounts.
Croatia isworking towards offering foreigners security forinvestments ontheir territory via
international conventions. Croatia hasjoined theConvention fortheEstablishment oftheAgency for
Multilateral Investment Guarantees.
ACQUIRING PROPERTY OWNERSHIP
Theprerequisite condition foracquiring property ownership rights forforeigners intheRepublic
ofCroatia isthecondition ofreciprocity with thecountry ofcitizenship, orregistration ofalegal person
inthatcountry. Thelawmakes adistinction between twosituations, depending onwhether theforeign
natural orlegal person performs activities intheRepublic ofCroatia ornot.
AccordingtotheBasicOwnershiprightsandRelationsAct(OfficialGazette,no.53/91-ZOVO),
anyforeign natural orlegal person thatperforms activities (e.g. hasaregistered subsidiary) inthe
Republic ofCroatia, canonthecondition ofreciprocity) gainproperty ownership rights intheRepublic
ofCroatia which donotdepend onthenumber, position ornature of(buildings orland), oronthe
nature oftheactivities theperson performs. Anyforeign natural orlegal person which does notperform
activities intheRepublic ofCroatia, cangain property ownership rights intheRepublic ofCroatia
onthecondition orreciprocity andwith theconsent oftheforeign minister who gives hisconsent on
theadvice ofthejustice minister.
TRADING CONDITIONS FOR PHYSICAL PERSONS, MANAGERS AND EXPERTS FROM
FOREIGN COMPANIES, RESIDENCY CONDITIONS INTHE REPUBLIC OFCROATIA
a) Business Visa
Foreigners entering, departing ortravelling through theRepublic ofCroatia areissued with
visas. Visas areissued foroneoranunlimited number ofjourneys andarevalid foruptooneyear
oruntil tothedate ofexpiry oftheforeign travel document ifitexpires inlessthan ayear. Visas
areissued overseas byEmbassies andConsulates oftheRepublic ofCroatia. Foreigners canalsobe
issued with business visas. Business visas canbeissued toforeigners fortherunning ofbusiness
operations aimed atmaking aprofit from manufacturing, trade ofgoods orbyoffering services. A
business visaisissued, atthemost, uptotheexpiry dateofthetravel document. Abusiness visacanWT/ACC/HRV/9
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beextended. Abusiness visaisvalid, theforeigner canreside andfreely enter anddepart theRepublic
ofCroatia anunlimited number oftimes.
Abusiness visaisissued overseas byanEmbassy orConsulate oftheRepublic ofCroatia or
anauthorised body attherequest oftheforeigner orlegal entity through which theforeigner isorwill
beoperating thebusiness intheRepublic ofCroatia. Thebusiness activity isconfirmed byatranscript
from thecommercial register authorised bythecourt initsname orifsuch information isnotentered
intotheregister then other evidence proving thesame information. Business visas canbeissued to
foreigners whoaremembers oftrading companies, persons authorised torepresent trading companies,
authorised agents, members oftheboard, thepresidents andmembers ofthesupervisory boards of
trading companies, andmembers oforganisations ofother legal entities. These provisions areregulated
bytheMovement andResidence ofForeigners Act("Official Gazette", no.53/91, 22/92 and26/93).
b) Work Permit
Aforeigner canenter intoanemployment contract orwork intheRepublic ofCroatia onthe
basis ofawork permit ifhesatisfies general andspecial conditions asdefined bylaw(Employment
ofForeigners Act,"Official Gazette", no.19/92, 33/92, 89/92, 26/93, 29/94 and52/94). Work permits
fortheemployment offoreigners intheRepublic ofCroatia areissued bytheInstitute forEmployment,
Head Office Zagreb. Organisations oremployers arenotallowed toenter intoemployment contracts
orcontracts forservices with foreigners who donothave work permits. Work permits areissued to
foreigners onthecondition thatunemployed persons record attheInstitute forEmployment donot
include persons who fulfil theconditions specified bytheemployer forentering intoanemployment
contract, inlinewith thepolicies oftheemployment market intheRepublic ofCroatia. Work permits
areissued inprinciple foralimited period fortheduration oftheemployment contract, uptooneyear.
Foreigners forwhom permanent residency intheRepublic ofCroatia hasbeen approved canbeissued
withworkpermitsofunlimitedduration.AforeignerwithapprovedpermanentresidencyintheRepublic
ofCroatia orwhopossesses abusiness visamust submit arequest fortheissue ofpersonal work permit
attheInstitute forEmployment. Therequest fortheissue ofawork permit fortheemployment of
aforeigner with approved extended residency intheRepublic ofCroatia must besubmitted bythe
employer with anexplanation ofthereason foremploying theforeigner.
Other laws andregulations affecting trade inservices are:Law onTrade, Law onForeign
System, Foreign Exchange Operations andGold Transaction, Law onInsurance, Banks andSavings
Institutions Act,Securities Law, Law onConcessions, Auditing Act,Accounting Act,Tourist Industry
Law, Investment Funds Act, Law onCredit Relations with Foreign Countries, Law onPrimary
Education, Law onSecondary Education, Law onHigher Education, Law onScientific andresearch
activities, Law onInformatics, Legal Profession Act, Law onEmployment, Law onSocial Protection,
LawonHealthcare Protection, LawonHealth Insurance, LawonConstruction, LawonUrban Planning,
Law onMunicipal Services, Refuse Act, Protection Water Act, Law onAgricultural Land, Law on
Telecommunications, Postal Services Act, Seaport Law, Maritime Law Code, Croatian Railways Act,
AirTransport Act, Law onTransport inDomestic Road Traffic, Law onTransport inInternational
Road Traffic, andothers.
a) Governmentdepartments,agencies,professionalassociationsorotherbodieswithauthority
orarole relevant totheconduct ofservices activities;
There are:Ministry ofFinance, Ministry oftheEconomy, Ministry ofCulture, Ministry of
Agriculture andForestry, Ministry ofMaritime Affairs, Transport andCommunications, Ministry of
Justice, Ministry forUrban Planning, Construction andHousing, Ministry ofEducation andSports,
Ministry ofLabour andSocial Welfare, Ministry ofTourism, Ministry ofHealth, Ministry ofScienceWT/ACC/HRV/9
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andTechnology, State Directorate forEnvironment, Insurance Companies Supervision Directorate
inMinistry ofFinance, Employment Office, BarCouncil, andothers.
b) Judicial, arbitral oradministrative tribunals orprocedures providing forthereview of,
orremedies inrelation to,administrative decisions affecting trade insectors;
Foreign companies andforeign sole(individual) traders toperform abusiness activity inthe
Republic ofCroatia, including supply services, must establish asubsidiary orajoint-stock company,
provided thatsuch activity hasalong term character (Company Law). Ifabusiness isnotconsider
tobealong-term activity, according toitsvalue andduration, noreporting procedures arerequired.
f) Provisions relating tointernational transfers andpayments forcurrent transactions of
services;
Inregard tothese provisions, webelieve thatitisapparent from theForeign Currency Law
andthefactthatcertain articles oftheIMF Statute were adopted, thatcurrent international transactions
have been liberalized tothemaximum extent. TheNational Bank ofCroatia stipulated theoperations
which may beperformed bydomestic andforeign juridical andnatural persons inconnection with
international payment transactions.
g) Provisions relating tocapital transactions affecting thesupply ofservices;
Capital transactions andtransfers bynon-residents intoCroatia arenotsubject toanyrestrictions
andarefreely made. Non-residents canfreely takecapital outofCroatia which, asarule, isnotsubject
toanyrestrictions.
Butportfolio investments inshort-term securities bynon-residents arenotallowed inCroatia.
Inorder thattheshort-term foreign capital inflow toCroatia belimited, capital restriction isefficiently
applied inthesense thatpossibilities arelimited fornon-residents tobuyshort-term securities ofthe
National Bank ofCroatia, i.e."NBC Billks" through domestic Croatian commercial banks.
i) Provisions concerning anyform ofaid,grant, domestic subsidy, taxincentive orpromotion
scheme affecting trade inservices;
TheCroatian Law onTrade does notforesee anyoftheexport incentives, aswell asthe
reimbursement ofthecustoms, duties andother import taxes, with theaimofencouraging theexport
ofgoods andservices. However, theonly exception istourism services. In1996, theGovernment
willallocate about 60million Kn(about US$ 11,1 million) from itsBudget forthepromotion oftourism
inCroatia ontheinternational market (fairs, catalogues, studies, etc.). Atthesame time, taking into
accountthelostmarketpositionofCroatiantourism,thetransportandotherbythewarcauseddifficulties
inDalmatia (themost important tourist destination before thewar), theGovernment subsidize part
oftheairtransport expenses between Zagreb andDubrovnik, andin1996, willallocate 5million Kn
(US$ 0,9million) from theBudget forthispurpose.
3. MARKET ACCESS AND NATIONAL TREATMENT
I. HORIZONTAL COMMITMENTS
FOREIGN INVESTMENTWT/ACC/HRV/9
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Concerning foreign investment inradio andtelevision, atthestate level andlocal level the
concessionaire caninvest foreign capital uptoatotal of25%. Forpublic telecommunications inthe
mobile network, cable television andtheproduction ofcable television programmes there isnolimit
ontotal foreign investment.
ForeigninvestmentsareprohibitedincompaniesorotherorganisationalstructuresintheRepublic
ofCroatia which areactive inthemanufacturing ortrade ofweapons andmilitary equipment.
ACQUIRING PROPERTY OWNERSHIP
According totheAgricultural Land Act(Official Gazette, no.79/93) foreign natural andlegal
persons cannot gain property rights onagricultural land, unless itisotherwise regulated byan
international treaty. Foreign natural orlegal persons cannot property ownership rights onparts of
nature reserves (Official Gazette, no.30/94). Neither foreign norlocal persons cannot property
ownership rights oranyother rights ofmarine resources (Maritime Law, Official Gazette, no.17/94
and74/94). Foreign persons cannot own abusiness onterritories which areimportant forthedefense
ofthecountry andaredefined as"military zones" (Defence Act). Apart from these limitations, there
areresources ofstrategic interest oftheRepublic ofCroatia, forwhich noperson (foreign ordomestic)
canownership rights. These properties include natural resources (mines, oiletc.), andother properties
defined bylawasbeing ofstrategic interest totheRepublic ofCroatia.
II. SECTORAL SERVICES COMMITMENTS
PROFESSIONAL SERVICES
Legal Services
Legal services andlegal assistance maybesupplied only bylawyers andlawyers 'associations
registered intheBarCouncil oftheRepublic ofCroatia. According totheLegal Profession Act, only
Croatian citizens who have graduated from theFaculty ofLaw intheRepublic ofCroatia andhave
passed abarexamination intheRepublic ofCroatia, andhave high proficiency inCroatian language
may seek registration intheBarCouncil. Inprocedures carried outbyselected (arbitration) courts
forlegal matters which include international segments, parties inadispute may alsoberepresented
bylawyers registered inother countries barassociations.
AUDITING SERVICES
Auditing services may beperformed exclusively bylegal persons registered forsuch activity.
Auditing services may only beperformed byauthorized auditors who arepermanently employed by
auditing firms. Foreign auditing firms andauditors may only perform joint auditing services with
domestic auditing firms.
COMMUNICATION SERVICES
Telecommunication services areperformed bythepublic company Hrvatska poštai
telekomunikacije(HPT -CroatianPostalandTelecommunicationsServices)onthebasisofauthorizations
granted toitbylaw, andbyother legal andnatural persons who areconcessionaires andwho have
received aconcession from theTelecommunication Council. According totheLaw on
Telecommunications, foreign firms may perform telecommunication services, butonly through the
HPT.WT/ACC/HRV/9
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LAND-BASED COURIER SERVICES
Inaccordance with theLaw onPostal Service, services involving thereception, transportation
anddelivery ofpostal matter andtelegrams indomestic andinternational traffic, aswell asspecial
andother postal services related tothispostal matter, areperformed exclusively bytheHPT.
RESEARCH AND DEVELOPMENT SERVICES
Theopinion oftheNational Council ofSciences must beobtained fortheestablishment ofa
private institute. Theminister ofscience andtechnology maydictate special conditions fortheexecution
ofspecific scientific andresearch activities.
PLACEMENT AND SUPPLY SERVICES OFPERSONNEL
Placement andsupply services ofpersonnel mayonly beperformed bytheEmployment Office
asastate institution, inaccordance with theLaw onEmployment. Natural persons, whoareCroatian
citizens, mayexceptionally perform placement andsupply services ofpersons participating inconcert,
artistic, stage, film, theatrical andmusical performances andsporting events, iftheypreviously receive
consent from theMinistry ofLabour andSocial Welfare.
EDUCATION SERVICES
The opinion oftheNational Committee forHigher Education must beobtained forthe
establishment ofprivate universities, academies orschools ofhigher learning. Lectures may beheld
intheCroatian orsome other world language. Theconsent fortheestablishment ofaprimary or
secondary schools isissued bytheMinistry ofEducation andSports.
HEALTH SERVICES
TheLaw onHealthcare Protection stipulates thathealthcare activity may berendered only in
healthcare institutions andintheprivate practice ofhealthcare professionals. Institutions forhome
healthcare, polyclinics, general hospitals, special hospitals, pharmacies andsanatoriums maybeowned
bydomestic andforeign legal andnatural persons onthebasis oflegal provisions. Once ithasbeen
established thatthehealthcare institution orprivate practice hasfulfilled allconditions interms of
facilities,equipmentandpersonneldictatedbytheMinistryofHealth,permissionforthecommencement
ofoperation isgranted. Theextent ofmandatory health insurance does notcover healthcare services
which areutilized abroad. Beneficiaries ofthehealthcare services rendered byforeign private persons
inCroatia arenotincluded inthemandatory health insurance program. Beneficiaries ofhealthcare
services abroad must previously obtain theconsent oftheCroatian Health Insurance Fund. Opening
aprivate practice requires, among other things, thecitizenship oftheRepublic ofCroatia.
SOCIAL SERVICES
Accordingtothecurrentlyvalidregulationsonsocialwelfare(LawonSocialProtection-Official
Gazettes, no.10/91, 19/91), aforeign person may notestablish asocial welfare institution, normay
heoffer such services. There arenumerous examples from previous practice showing thatforeign
donors invested ininstitutions inthesocial welfare system which areowned bytheRepublic ofCroatia.
Thedraft billonsocial welfare, whose passage isinprogress, enables foreign legal andnatural persons
toestablish social welfare centres under thesame conditions which apply fordomestic legal andnatural
persons.WT/ACC/HRV/9
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FINANCIAL SERVICES
Insurance andInsurance -Related Services
a) Direct Insurance
Theservices oflifeandnon-life insurance areprovided byinsurance companies which have
headquarters intheRepublic ofCroatia. Local persons areallowed totakeoutinsurance inaforeign
company only forcertain kinds ofinsurance such as:personal andproperty riskinsurance which is
notavailable intheRepublic ofCroatia, liability insurance inmarine transport, property insurance
forproperty abroad andimport andexport insurance ofgoods ifthey arenottransported atariskof
alocal legal ornatural person, andinother cases according toregulations. Foreign persons areallowed
toestablish insurance company foroneormore kinds oflifeornon-life insurance alone orin
joint-venture with local natural orlegal persons. Thecompany should beorganised asajoint stock
company. There arenorestrictions ontheshare instock capital forindividual stock-holders. Aforeign
insurance company isallowed tohave agents andrepresentatives, butisnotallowed toestablish branch
offices intheRepublic ofCroatia. Approval fortheestablishment ofacompany isissued bythe
Insurance Companies Supervision Directorate which isanorgan oftheGovernment oftheRepublic
ofCroatia. Thefreecapital ofthecompany canbeinvested orkept inbank accounts inCroatia. If
thecompany wishes tokeep itsfreecapital inbank accounts abroad, itmust seek theconsent ofthe
Supervision Directorate.
b) Reinsurance andretrocession
Insurance companies must cover therisksurplus atareinsurance company inCroatia. Ifthe
risksurplus istoobigtobereinsured inCroatia, itcanbereinsured abroad.
c) Insurance intermediation andservices auxiliary toinsurance
Insurance brokerage andother insurance services canbesupplied bylegal andnatural persons
based onanagreement with aninsurance company oraninsured person, provided they areregistered
forsuch services atthecompetent court inaccordance with theregulations oninsurance companies.
Consent oftheInsurance Companies Supervision Directorate isnotnecessary forthese services. As
anexception, actuarial services canbesupplied bypersons licensed bytheMinistry ofFinance.
Ifitisamatter ofmediation intheconclusion ofcontracts ontheinsurance ofpersons and
assets, such services mayonlybeperformed byaninsurance company which hasitsseatintheRepublic
ofCroatia. Domestic andforeign persons receive thesame treatment inallother insurance mediation
services.
Banking andother Financial Services
Terms applicable tocarring intoandtaking outofdomestic currency byresidents andforeign
nationals arelaiddown bytheNational Bank ofCroatia. Only banks, savings institutions, pension
fundsandinvestmentfundsareallowedtoconducttransactionsconcerningmoneybroking.Management
companies arecommercial companies established solely forthepurpose ofmanaging investment funds
(asset management).
AUDIOVISUAL SERVICES
Radio andtelevision atthestate level andthelocal level (municipal, county andgroups of
counties) canbeconstructed andused bylegal entities with aconcession from theTelecommunicationsWT/ACC/HRV/9
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Council. Theconcessionaire forradio andtelevision must submit information onthecapital athis
disposal totheTelecommunications Council andmay participate with acapital input upto25%.
CONSTRUCTION WORK AND RELATED SERVICES
From theprovisions oftheLawonConstruction, itfollows thattheplanning andimplementation
ofprofessional supervision over construction canonlyconducted bypersons registered forthisactivity,
inaccordance with special regulations. Construction ortherealization ofindividual works ata
construction sitemayberendered bylegal ornatural persons registered forsuch activity. Participants
inconstruction,suchastheprojectarchitect,contractor,supervisingengineerandauthorizedconstruction
supervisor must pass aprofessional exam onthebasis ofwhich they acquire authorization forthe
aforementioned activities within theframework ofalegal person. Among theother participants in
theconstructionprocedure,theremustalsobeaninvestor,whosubmitstherequestforabuildingpermit.
Tothisrequest, theinvestor must alsoattach evidence ofownership ofthesiteorstructure, i.e.proof
ofthesettlement ofproperty-rights relations forrealestate (Basic Ownership rights andRelations Act).
However, foreign persons may alsobecome involved inconstruction ontheterritory oftheRepublic
ofCroatia onthebasis ofaconcession contract (Law onConcessions). Itmust bestressed thatifthe
principal project (aproject necessary fortheissuance ofaconstruction permit) iscarried outabroad,
itmust contain atranslation intheCroatian language. Such aproject must alsobeverified toensure
thatithasbeen prepared inaccordance with theLaw onConstruction andCroatian standards.
MARITIME TRANSPORT SERVICES
InaccordancewiththeMaritimeLawCode,cabotage,i.e.transportationofgoodsandpassengers
from oneCroatian porttoanother, canonly berendered byships under theCroatian flag. Aforeign
shipmay only exceptionally perform cabotage, insomuch asthisisrequired bytheeconomic interest
oftheRepublicofCroatia,withthepreviousapprovaloftheMinistryofMaritimeAffairs,Transportation
andCommunications.AspecialapprovalfromthecompetentMinistryisnecessaryforpilotingactivities
performed byaforeign legal person intheinternational coastal waters andterritorial waters ofthe
Republic ofCroatia. Such anapproval willonly beissued ifdomestic legal persons cannot ordonot
want tocarry outtheaforementioned piloting.
ROAD TRANSPORT SERVICES
Foreign shippers maycarry outtheinternal transportation (cabotage) ofgoods intheRepublic
ofCroatia exclusively onthebasis ofpermts issued bytheMinistry ofMaritime Affairs, Transportation
andCommunication. Apermit isissued ifithasbeen determined thatthere isashortage oftherelevant
transportation capacities intheRepublic ofCroatia.
4. MOST-FAVOURED-NATION TREATMENT
Croatia would liketoapply forexemptions ofArticle II(Most-Favoured Nation) inAudiovisual
ServicesSectorandRoadTransportServicesSector(indicatedintheScheduleofSpecificCommitments).