Spectator on facebook

Spectator on facebook

Import certificates and restrictions scare off investors

Foreign businessmen, diplomats and economists say that the certification process required to import goods into Slovakia is so complex and time-consuming that it is actually discouraging foreign companies from entering the Slovak market. What is more, they say that the certificates are only part of an overall anti-import policy that is sending the wrong signals abroad.
"These import restrictions are a form of economic nationalism and they are not productive," said Mark Bocchetti, the Economic Commercial Officer at the US embassy in Bratislava. "In a global economy, an anti-foreigner attitude is not a good attitude to have."
Under current Slovak law, almost every import requires a certificate to be issued by a Slovak inspection office guaranteeing its safety and quality.


A long haul. Three kilometer line-ups arecommon at the Slovak border as truckers wait for customs officers to inspect goods.
TASR

Foreign businessmen, diplomats and economists say that the certification process required to import goods into Slovakia is so complex and time-consuming that it is actually discouraging foreign companies from entering the Slovak market. What is more, they say that the certificates are only part of an overall anti-import policy that is sending the wrong signals abroad.

"These import restrictions are a form of economic nationalism and they are not productive," said Mark Bocchetti, the Economic Commercial Officer at the US embassy in Bratislava. "In a global economy, an anti-foreigner attitude is not a good attitude to have."

Under current Slovak law, almost every import requires a certificate to be issued by a Slovak inspection office guaranteeing its safety and quality. Such certificates are "a non-tariff barrier and an open invitation to corruption," said US Ambassador Ralph Johnson in a speech to the American Chamber of Commerce on October 19.

Slovakia is not alone in its byzantine customs procedures. According to the"Customs Report for Central and Eastern Europe," published by the DHL shipping company in October 1997, 89% of all companies importing into the region experience problems with customs clearance, while over half have experienced delays in shipments which resulted in lost revenue.

But importers say that Slovak bureaucrats are resisting pressures to change and defending an anti-business policy which isolates the nation from its neighbours.

Low value

Robert Paterson, general manager of DHL, said that the greatest frustration in importing goods to Slovakia was a 'vaule limit', which dictates that any import worth more than $1 be fully certified by customs officials and bureaucrats. "To my knowledge, Slovakia has the lowest value limit in the world," he said.

According to Paterson, the US has a "two-tier system" for imports, with the basic value limit for goods not requiring certificates set at $50 and the second tier at $1,200. Under this system, he explained, only shipments valued over the second tier amount require full certification. Imports over the first level require a "minimum amount" of certification, while imports under $50 need no paper work at all.

The European Union value limit for certification is 22 ECU (about $28).

Bocchetti explained that the low Slovak value limit was a product of the country's massive trade deficit. "In 1995, Slovakia had a trade gap surplus of 1.8 billionSk ($50 million)," he said. "In 1996, they had a deficit of 63.8 billion Sk ($1.8 billion). This concerned the government, so they changed the certification process. It was a bureaucratic approach to slow imports and limit the amount of imports entering the country."

With the change in government, the customs office has proven more receptive to suggestions. Juraj Mihalik, director of the Slovak Customs Office, told The Slovak Spectator on December 10 that "our plan is that the value limit will be raised to 800Sk [$22] by the end of the first quarter of 1999. We want to come into line with European standards, but this first has to be approved by the Ministry of Finance."

Long process

But importers say that raising the value limit will only correct one facet of the certification problem. "It's still a very time-consuming process," explained Paterson. In order to get a single product into Slovakia, he said, "an SAD (JCD) customs document must be completed, duties must be paid, the EXIM Banka charge of 0.05% of the product's value must be paid, the power of attorney giving the courier company the right to clear the shipment must be issued, and further certificates are needed for any shipment valued over $1."

Dušan Konický, Director of Technical Inspection, claims that such measures are necessary. "The officials have to check the documents," he said, "We have the same problems importing into EU countries."

Konický said that the best solution would be for EU and non-EU countries to reach an "agreement on mutual recognition of certification," but said that until that time, "we cannot accept their certificates because they will not accept our certificates."

Bocchetti replied that Konický's argument was an example of outdated thinking. "It's in the interest of Slovakia to accept EU standards of certification," he said. "Slovakia wants to be a member of the EU, but the current system is a tit-for-tat approach which does not work for a small country trying to join the international economic market."

Bocchetti added that "it is hard to believe that Slovak inspection can improve on the safety of EU-certified goods. An import from the EU or America must meet global standards, so what is the use of Slovak inspections?"

Peter Mihók, president of the Slovak Chamber of Commerce and Industry, agreed. "Slovakia should accept internationally recognized products, otherwise it goes against international cooperation. If a product is good enough for New York, Paris or London, it is strange to me that it will not be accepted in Bratislava."

The greatest danger of outmoded non-tariff barriers like import certificates, said Mihók,was the perception of Slovakia that they fostered in the minds of western investors and politicians. "Restrictions result in the country being considered as a non-standard country. Investors do not know what new restrictions may be introduced in two months, six months, or even a year. Such restrictions are not a good business card for a country."

Top stories

Discussion about road project becomes emotional

Analysts want more alternatives for the road from Zvolen to Košice to be assessed

The protest at Soroška

Slovakia commemorates the 1968 invasion. Here’s what it looked like Photo

Anniversary of the Warsaw Pact troop invasion that ended the Prague Spring.

Garth: We need a deal that will benefit both

“When I talk to the Brits living in Slovakia, they are quite relaxed about things,” UK Ambassador to Slovakia Andrew Garth says about the Brexit-related concerns.

UK Ambassador to Slovakia Andrew Garth

“Natural police” to protect nature and animals

Those who commit crimes against the environment should watch out.

Illustrative stock photo