RESTRICTED
WORLD TRADE G/STR/N/1/CZE
12September 1995
ORGANIZATION(95-2600)
Original: English
STATE TRADING
Notification Pursuant toArticle XVII:4(a) oftheGATT 1994 and
Paragraph 1oftheUnderstanding ontheInterpretation ofArticle XVII
CZECH REPUBLIC
Thefollowing communication, dated 23August 1995, hasbeen received from thePermanent
Mission oftheCzech Republic.
_______________
Ihave thehonour totransmit herewith, inaccordance withArticle XVII:4(a) oftheGATT 1994
andparagraph 1oftheUnderstanding ontheInterpretation ofArticle XVII oftheGATT 1994, the
notification oftheState Fund forMarket Regulation oftheCzech Republic.G/STR/N/1/CZE
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STATE TRADING
Notifications Pursuant toArticle XVII:4(a)
CZECH REPUBLIC
I. Enumeration ofstate trading enterprises
TheGovernment oftheCzech Republic wishes tonotify theoperation oftheState Fund for
Market Regulation (SFMR) -apublic agency thatmayqualify under Article XVII oftheGATT 1994.
Thefollowing products aresubject totheoperation oftheSFMR: grain (cereals), malt, live
cattle andbeef meat, pork meat, butter, skimmed milk powder, cheeses, sugar, potatoes andpotato
starch.
II. Reason andpurpose forintroducing andmaintaining theSFMR
The SFMR was established byActonState Fund forMarket Regulation inAgriculture
No.472/1992, Coll. ofLaws, asanindependent economic body.
Themain purpose oftheSFMR istomaintain market stabilization bylimiting excessive price
movements andbyguaranteeing minimum prices forselected agricultural products.
III. Description offunctioning oftheSFMR
Theselection ofproducts tobesubject oftheSFMR operation andthedecision onmarket
intervention arebased onshort-term forecasts ofproduct andconsumption andareimplemented in
anticipation ofthemarket disturbance. Themarket isregulated bytheSFMR through intervention
sales andpurchases andthrough subsidized exports.
(a) Regulation ofmarket through intervention sales andpurchases
Intervention purchases andstorage ofpurchased goods areprocured bythedomestic economic
operators (entities, agents) selected intenders. These operators enter intocontractual obligations
onnormal commercial terms andincaseofoversupply andsubsequent fallinpurchasing prices
they purchase thegoods inquestion from thedomestic producers foratminimum guaranteed
price andstore them. When supply meets demand orincaseofhigh level ofdemand thestocks
arereleased toadomestic market oninstructions bytheSFMR with theview ofstabilizing
theconsumer prices.
(b) Regulation ofmarket through subsidized exports
Onthebasis oftender theeconomic operators areselected toeffect purchase onguaranteed
prices from thedomestic producers andexport transactions ofsubsidized goods.
TheSFMR does conduct directly anyforeign trade operations ofitsown. Allsuch operations
arecommissioned tothedomestic economic operators which inindividual cases enter into
standard contractual relations with theSFMR. Foreign trade transactions undertaken onbehalf
oftheSFMR conform tonormal commercial terms, conditions andpractices, including price,
profit margins, quality, availability, marketability andother trade regulations.G/STR/N/1/CZE
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TheSFMR hasnomonopolistic orexclusive position onthemarket since other traders remain
freetoexport toimport oncompetitive terms andunder normal market conditions. Therights
ofthese operators arenotaffected adversely bytheSFMR activities.
Theactivities oftheSFMR arefinanced from theannual budget allocations approved bythe
Government oftheCzech Republic. Thescope offinancing oftheSFMR islimited.
Thestate budget disbursements designed fortheactivity oftheSFMR totalled asfollows:
1992 Kc3.113 billion
1993 Kc2.134 billion
1994 Kc1,918 billionG/STR/N/1/CZE
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IV. Statistical information
Theactivity oftheSFMR intheperiod of1992-1994 wasconducted inthefollowing areas:
(See table below)
Operations oftheSFMR intheperiod 1992-1994 were conducted inthefollowing commodities:
Table 1:Operations oftheSFMR in1992-1994: (inthousand tons)
Commodities Years Production Total
exportSFMR
exportTotal
importSFMR
import
Grain 1992 6,564.90 480.00 420.14 50.00 0.00
(cereals) 1993 6,468.00 158.89 0.00 160.66 109.28
1994 6,777.20 60.67 0.00 134.51 0.00
Malt 1994 420.00 179.42 73.69 1.06 0.00
Beef meat 1992 420.00 30.60 29.31 1.59 0.00
1993 380.00 32.94 13.75 1.95 0.00
1994 313.34 14.86 4.68 19.87 0.00
Pork meat 1992 740.00 2.60 0.00 1.80 0.00
1993 685.00 10.60 8.40 0.24 0.00
1994 514.96 6.72 5.44 17.02 0.00
Butter 1992 86.31 29.36 28.32 0.02 0.00
1993 66.65 31.67 30.46 0.05 0.00
1994 69.51 19.88 17.98 0.03 0.00
Skimmed 1992 113.43 48.00 12.05 0.47 0.00
milk powder 1993 92.04 66.40 14.48 0.58 0.00
1994 59.54 58.46 6.40 0.49 0.00
Cheeses 1992 76.81 10.85 7.44 2.02 0.00
1993 52.53 10.36 1.49 5.00 0.00
1994 73.18 16.26 9.91 8.74 0.00
Sugar 1992 544.53 39.62 39.42 0.00 0.00
1993 580.00 86.60 20.00 1.5 0.00
1994 380.00 95.45 0.00 8.22 0.00
Potatoes 1992 1,969.23 10.00 0.00 23.08 0.00
1993 2,395.81 28.74 2.10 37.00 0.00
1994 1,231.03 39.11 23.01 16.27 0.00G/STR/N/1/CZE
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Commodities Years Production Total
exportSFMR
exportTotal
importSFMR
import
Potato starch 1992 25.00 0.16 0.00 0.00 0.00
1993 25.00 0.78 0.00 0.07 0.00
1994 26.80 13.58 13.23 0.80 0.00