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Importers caught in tangled certification process

While high-profile measures such as the corporate revitalization act and the import surcharge have dominated headlines this summer, low-profile government projects have slowly but surely created a sizeable body of businessmen who now say that the red tape has finally reached critical mass.
The bureaucratic monster is more and more often demanding a turn at the reins of the economy, they say, pointing as evidence to initiatives such as import licenses, quotas and testing procedures, which they add provide state officials with innumerable means to restrain trade.
Many importers feel unelected government officials have begun to assume an inordinate amount of power through bureaucratic regulation of the market, and would prefer to see a return to financial forms of control.

While high-profile measures such as the corporate revitalization act and the import surcharge have dominated headlines this summer, low-profile government projects have slowly but surely created a sizeable body of businessmen who now say that the red tape has finally reached critical mass.

The bureaucratic monster is more and more often demanding a turn at the reins of the economy, they say, pointing as evidence to initiatives such as import licenses, quotas and testing procedures, which they add provide state officials with innumerable means to restrain trade.

Many importers feel unelected government officials have begun to assume an inordinate amount of power through bureaucratic regulation of the market, and would prefer to see a return to financial forms of control.

The complaint

Vladimír Bereš, IKEA Bratislava's administration manager, said that rapid changes in import certification procedures for more than 5,000 goods his store imports have left him puzzled. "After [coming to Slovakia] in 1992, we invested a lot of money in fulfilling the certification process, which we finished at the beginning of 1996," he said. "So we were very surprised when we found in mid-July of 1997 that these certificates were no longer sufficient to get import licenses."

The certificates in question are ones that are required by the Slovak Office of Standards, Metrology and Testing (UNMS).

In order to import a product, companies must specify the origin and composition of the goods, and submit it to rigorous and regular testing. As UNMS standards grow more rigorous, the process of certification becomes more complex.

"What's really difficult for us are all these changes in certificates, licenses and testing," Bereš continued. "We would prefer a system of import charges, because then we could calculate a business plan. But this way, we have bureaucratic regulation of the market rather than financial."

The defense

UNMS's president, Ľubomír Šutek, defended certification changes as part of "an ongoing process of standardization." For Šutek, the change to a capitalist economy has presented momentous difficulties.

"Before 1989 we had ten importers," he said. "Now, we have 264,000 companies which import and sell in Slovakia. It's not a healthy market, and we have to move towards fewer importers."

Šutek made clear that he does not enjoy regulations for their own sake.

"We also don't want to have to go through the process," he said. "For us, certification means only problems."

But the task falls to the state, he said, because "businessmen are not responsible unless they are required to be by the law - they usually take the path of least resistance."

For instance, Šutek said, manufacturers will not ensure that their wares are safe and reliable unless they are made legally responsible for them. Under communism, the state guaranteed these qualities, but now the government is trying to shift the responsibility to the producer.

Šutek predicted that by next year a new law on certification should be approved, compatible with the European system and much simpler than the present methods.

In other words, Šutek said, importers should be patient and enjoy the fact that "we don't have as broad a regulatory sphere as the EU."

But economic watchdogs are skeptical that red tape is on the decline in Slovakia.

"If the government is not able to create the right economic environment, it tends to keep all lines of decision in its hands," said Juraj Renčko, an economic analyst with the Slovak Academy of Science's Forecasting Department. "It is in the nature of such a government to have a powerful bureaucracy to control information and decisions."

With almost 40 certificates for food products still awaiting adjudication at UNMS, Bereš was not about to be publicly critical of the agency.

"We understand we have to follow local regulations, and that is not only in Slovakia," he said.

With so many bureaucrats protecting their turf, Šutek said Slovak red tape is here to stay.

"Some [people] at the ministries are so egotistical that they want to keep as many responsibilities as possible for themselves," Šutek said.

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