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SHIPPING & TRANSPORTATION

Slovakia's import regulations still a muddle

Firms importing goods to Slovakia claim that too many bureaucratic cooks have finally spoiled the regulatory broth. The result, they say, is mass confusion and long delays at the country's borders, as customs officials struggle to interpret and apply new government directives while at the same time following their own recipe for which goods may and may not be admitted to Slovakia.
But there are signs that importers have begun to adjust to a situation described by one entrepreneur only six weeks ago as "a nightmare." Not only have businesses learned to cooperate with bureaucrats in obtaining the necessary documents, but they have also come together under the aegis of such bodies as the American Chamber of Commerce to discuss common problems and lobby the government for changes to the new laws.

Firms importing goods to Slovakia claim that too many bureaucratic cooks have finally spoiled the regulatory broth. The result, they say, is mass confusion and long delays at the country's borders, as customs officials struggle to interpret and apply new government directives while at the same time following their own recipe for which goods may and may not be admitted to Slovakia.

But there are signs that importers have begun to adjust to a situation described by one entrepreneur only six weeks ago as "a nightmare." Not only have businesses learned to cooperate with bureaucrats in obtaining the necessary documents, but they have also come together under the aegis of such bodies as the American Chamber of Commerce to discuss common problems and lobby the government for changes to the new laws.

Still, importers say that existing customs regulations were already tough enough to interpret and obey, and that the new certificate requirements are simply an added burden.

"It still takes longer to get a shipment of goods from Vienna to Bratislava than from New York to Vienna," said Robert Paterson, general manager of DHL Worldwide Express Slovakia. "Our customers are really suffering. They are fed up, and say they've had enough."

The final straw for importers, Paterson said, was an edict issued in July, 1997 by the Slovak Office of Standards, Metrology and Testing (UNMS) specifying an enormous range of goods that would henceforth need an UNMS-issued certificate to be admitted to the country. The edict gave importers just two months to submit their products for testing and approval, and set an ambitious September 20 deadline for compliance.

"The initial reaction of many foreign firms was that they were just going to leave Slovakia," said Paterson, "but I think that's no longer the case. The real problem was that there was a general lack of information as to exactly how these certificates were going to work. The July notice was a very off-the-cuff statement, and no-one took it too seriously."

The Swedish furniture company Ikea Bratislava was among those firms hurt by the abrupt certificate requirements. "September and October were very difficult months for us," said Vlado Bereš, Ikea's administration manager. "We ran out of stock in some departments, but by luck we had certificates for a big part of our range before the July law was announced, so it did not destroy our business. We survived somehow."


But other companies, such as McDonald's Slovakia and Siemens, were much more gravely affected by the law. Siemens in particular, with its 150,000 import products, had taken five years to finally certify all of its range; the fruits of this labor were wiped out at a stroke by the new law, requiring that the company begin all certification procedures anew.

UNMS President Ľubomír Šutek defended the July edict as "part of an ongoing process of standardization," one that sought both to bring Slovak import regulations in line with European Union norms, and to protect Slovak consumers from poor quality imported goods. "Before 1989 we had 10 importers," he said. "Now, we have 264,000 companies which import and sell in Slovakia. It's an abnormal market, so we have to move toward fewer importers."

Dušan Konicky, director of Slovakia's Technical Inspection Office, explained that "many smaller importers had been importing goods without official documentation, and then disposing of their goods in street markets." The only recourse the government had had in the past, he said, was to send inspectors from the Commercial Inspection Office around to shops to check for the proper documents. "It was a very ineffective system because we just didn't have the personnel," he said. "We took the decision to require certificates of all imports at the point of entry, and we now have the means to catch poor quality products before they enter the country."

Paterson, like many of his business counterparts, was inclined to be philosophical about Slovakia's increasingly tangled import regulations. "This happens in every country in the world that is in transition," he said. "Slovak customs officers are themselves in transition from policemen to trade enablers. But at the moment they are very much policemen."

The business community in Slovakia has in fact been quick to step forward in aid of the 'transition process'. Paterson said that DHL had offered customs officials both his own employees and software to help synchronize Customs Department product codes with those employed by the UNMS. "This lack of coordination causes huge discrepancies in paperwork," he said. "Border officials have to flip through a book every time they get a shipment, and they just don't have the personnel."

Patrick Uram, executive director of the American Chamber of Commerce in Bratislava, said that AmCham had formed a task force in October, "composed of members of our legal and government relations committees, and firms like DHL and McDonald's." The object of the group, Uram said, was "to open a dialogue with the government about how these regulations affect businesses. It's more of a learning curve situation, to help the government over time to allow the economy to function more efficiently."

But in Konicky's estimate, the business community in Slovakia has a long road ahead of it, at least in terms of influencing bureaucratic regulation. "You have to understand, these [import restriction] strategies are not made according to the interests of private business, but according to some economic models derived from academic theory. What they achieve in practice is often in conflict with the original intent."

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