US embassy cable - 04BRATISLAVA390

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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