FOREIGN FREE TRADE ZONES

UNCLAS BRATISLAVA 000390

SIPDIS


USDOC FOR EWHITEMAN AND 5102/FOREIGN TRADE ZONES (ITA/IA)

E.O. 12958: N/A
TAGS: ETRD ECON LO
SUBJECT: FOREIGN FREE TRADE ZONES

REF: STATE 44705


1. The following is post's response to questions raised in
reftel.


2. The Customs Act No. 238/2001 of the Collection of Laws as
later amended defines free customs zones and free customs
warehouses (in Article 379) as parts of the customs territory
or premises situated in that territory, separated from the
rest of it in which: 1) foreign goods are considered for the
purpose of import duties and commercial policy measures as
not being on the customs territory, provided they are not
released for the free circulation regime or placed in another
customs regime under conditions other than those provided for
in customs regulations; 2) Slovak goods meet conditions
according to special regulation (Law 229/1995 of Collection
of Laws as later amended on Excise Tax on Alcohol) adopting
measures usually connected with the export of goods, as a
result of their placement into the free customs area and free
customs warehouse. Currently there are four areas in Slovakia
with the valid status of a free customs zone: Zilina in
Northern Slovakia, Banska Bystrica in Central Slovakia,
Trencin in Western Slovakia, and Kosice in Eastern Slovakia.
There are no geographic limitations where free customs zones
or warehouses can be located. In general, existing zones do
not play a significant role in Slovakia's economy and are not
an important factor in attracting foreign investment.


3. The Ministry of Finance (MOF),based on a prior decision
by the GOS, permits the establishment of free customs zones,
with an appropriate application, although only Slovak
citizens are eligible to apply. (NOTE: a Slovak citizen is a
person or a legal person with a permanent address in the
Slovak Republic). The MOF, determines which parts of a
customs territory will form a free customs zone, who the
operator will be, conditions of the free customs zone, the
places of entry and exit, and time period for which the free
customs zone is established. Free customs zones or free
customs warehouses are subject to supervision by the customs
authorities.


4. Both Slovak and foreign goods may be placed in free
customs zones or free customs warehouses without a time
limit. Goods entering a free customs zone or free customs
warehouse do not need to be presented to the customs office,
or require a customs declaration be lodged. The Customs
office can require goods that are subject to export duties or
other export provisions to be identified to local customs
offices by a person who has placed the goods in the free
customs zone or free customs warehouse. However, operations
performed for inward processing within a conditional system
or under customs surveillance in free customs zones or free
customs warehouses cannot be performed without a permit from
a customs office. The customs office shall determine the
locations inside free customs zones or free customs
warehouses where processing operations shall be performed.


5. Any industrial, commercial, or service activity conducted
in a free customs zone or free customs warehouse must be
authorized by customs authorities. Such activities must be
reported in advance to a customs office. Customs offices may
impose restrictions on activities in free customs zones or
free customs warehouses depending on the nature of the goods,
how well customs regulations are honoured, and on the
provision of guarantees of compliance with customs
regulations. Foreign goods placed in free customs zones or
free customs warehouses may be released for free circulation,
inward processing, readjustment under customs surveillance,
and temporary use. Certain activities allow goods released to
a free circulation regime or a temporary import regime (that
does not entail an application of import duties or measures
under the state`s agricultural policy or commercial policy)
to be used or consumed. In this case, customs declarations
for release to a free circulation regime or temporary import
regime is not required. Such a declaration shall, however, be
required if such goods are to be charged against a quota or a
ceiling.


6. Instead of free customs zones or free customs warehouses,
a regime of inward processing is commonly employed in
Slovakia. As defined by law, an inward processing regime,
allows goods to pass through one or more processing
operations within a customs territory in one of two ways.
First, foreign goods intended for re-export from the customs
territory in the form of compensatory products without being
subject to import duties or commercial policy measures (this
is known as a suspension system). Second, goods released to a
free circulation regime with repayment or remission of the
import duties chargeable on such goods, if they are exported
from the customs territory in the form of compensatory
products (this is known as a drawback system). The individual
responsible for processing operations must acquire

authorization from the customs office, and such authorization
can only be granted to a Slovak citizen. Processed goods and
products that will be re-exported are not subject to import
duties. However, if merchandise that entered the country to
be processed and then re-exported, is instead released into
the free circulation regime, a customs debt and any
compensatory interest will be due. The amount of the customs
debt shall be determined on the basis of the conditions
specified for the imported goods at the time of the
acceptance of the declaration for release of these goods
under the inward processing regime. The compensation interest
charge reimburses the state for the difference in revenue it
received due to the customs debt being settled later.
WEISER


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