RESTRICTED
WORLD TRADE WT/ACC/HRV/12
29July1996
ORGANIZATION(96-2988)
Original: English
ACCESSION OFCROATIA
Communication from Croatia
ThefollowinginformationonSubsidyProgramshasbeenreceivedfromtheMinistryofEconomic
Affairs oftheRepublic ofCroatia.
_______________
AGREEMENT ONSUBSIDIES AND
COUNTERVAILING MEASURES
ARTICLE 25
INDUSTRY
TheRepublic ofCroatia does nothave asubsidy program "perse",rather anindustry
rehabilitation andreorganization program. TheGovernment oftheRepublic ofCroatia finances the
payroll ofthefollowing seven industrial companies completing theprogram: Sisak Steel, TPK-EPO
Zagreb (steel), Valjaonica Kumrovec (steel refining), Dalmatinca (textile), Diokom (textile), Pazinka
(textile), andVelebit (textile). Theaccumulated amount offinancing thusfaris26.5million kunas
orapproximately US$3.16 million. Within thenextninemonths alloftheabove mentioned companies
willhavecompleted therehabilitation andreorganization program. TheLawonCroatian Railways,
submitted totheWTO Secretariat inJulyof1995, provides forsubsidization oftherailways during
thewarandthepostwarrehabilitation period. In1995, thesubsidies amounted toapproximately
US$200 million, asfor1996, thesubsidies willalsoamount toapproximately US$200 million. The
LawonOcean Public Transportation Lines stipulates thattheGovernment willprovide forthedifference
between revenue andexpenses (ifitisnegative) forpopular tourist linesandconnections. For1995,
thesubsidy amounted toUS$31 million andforecasted atapproximately US$35 million for1996.
AGRICULTURE
Concerning agriculture andfoodindustry theRepublic ofCroatia doesnotcarry outany
subsidizing outside thesupport program foragriculture which isanintegral partofthestatebudget.
Astothelevelofincentives andsubsidies inagriculture, anoverview isgiven in"Overview offinancial
incentivesandinputsubsidiesinCroatianagricultureforyear1995"(factualexpenditures)and"Overview
offinancial incentives andinput subsidies inCroatian agriculture foryear1996" (projected data).
Financial incentives andsubsidies inagriculture areregulated bytheLawonfinancial incentives
andsubsidiesinagricultureandfisheries(CroatianOfficialGazetteno.29/94and9/95)andtheRegulation
onchanges andsupplements ofLawonfinancial incentives andsubsidies inagriculture andfisheries
(Croatian Official Gazette no.15/96). Within theplant production subsidies areprovided for:sugar
beet,sunflower, soybeans, oil-rape, tobacco, olives andvineyards ontheislands. Within thelivestock
productionthemostimportantsubsidizeditemismilk.Inadditiontothat,highqualitybreedsoflivestock
forreproduction(cattle, pigs,sheep andgoats, horses andselected queen -bees), production ofsemen
./.WT/ACC/HRV/12
Page2
forartificial insemination ofcattle anddifferent breeding activities ofofficial services aresubsidized.
Attheendthere areproduction subsidies forbreeding ofCroatian original breed ofcattle andhorses
(Istrian cattle, Slavonian podolac, Croatian posavac andLipycaner) andfortheproduction ofmeat
andboneflour. Input subsidies areapplied withabasic purpose ofreducing theproduction costs in
agriculture andencouraging theuseofhighquality inputs. According totheregulations mentioned
above, input subsidies aresupposed tobeutilized bytheproducers ofmineral fertilizers andcertified
agricultural seeds. According tothesame regulations, producers ofmineral fertilizers andcertified
agricultural seeds arerequired toprove thatthementioned inputs havebeensoldonthedomestic market
atreduced (determined) price. Inthestatebudget fortheyear1996, financial incentives andinput
subsidies envisaged are510,000.000 kuna. Detailed report onallthesubsidies which areplaned to
bepaidoutin1996 isgiven intheattachment "Overview offinancial incentives andinput subsidies
inCroatian agriculture foryear1996" (WT/ACC/HRV/12). From thisdocument itisclear that
production subsidies forplant production isforeseen tototal145.8 million kuna orapproximately
29percentoftotalfinancial subsidies. Subsidies incattle breading make approximately 43percent
intotalandtherestareinputsubsidies. Inthisgroup themainpartwith14.7percentgoestofertilizers.
WeaddthattheRepublic ofCroatia hasatthesame timewiththeattached answers toquestions from
respective countries (WT/ACC/HRV/11) attached alsofactual information onitsdomestic support
(Answer toWT/ACC/4 inWT/ACC/HRV/12) inamanner consistent withthenotification requirements
oftheAgreement onAgriculture.
TOURISM
Tourism asacommercial enterprise (hotel management, hospitality, tourist andtravel agencies)
hasnotbeensubsidized. However, thewarhasdecreased tourism to1/4ofthepre-war levelleading
tothelossofmarket share (internationally), thelossoftourists andcommercial transactions. Thus,
for1996 theGovernment oftheRepublic ofCroatia hasallocated 65million kunas (from thestate
budget) for:
- theCroatian Tourism Association toimplement thePromotion ofCroatian Tourism Program
for1996 withtheobjective ofregaining thelostmarket position andthedevelopment ofthe
Croatian image asanattractive tourist destination;
- theCroatian Tourism Association toassist foreign touroperators inrealizing therenewal of
organized tourism inCroatia;
- theMinistry ofTourism toimplement theProgram ofsubsidizing aportion ofthetransport
expenses inorganized foreign anddomestic air,roadandseatourist travel infivecounties
ontheAdriatic Coast. Theconditions forreceiving thissubsidy arebringing agroup oftourists
toCroatia between 1Mayand31October 1996, stayofatleast7daysandutilize atleast
half-board andlodgings insome ofthesubsidized counties. Thesubsidy isavailable toall
organizers ofgroup tourist tripsthatfulfiltheabove mentioned preconditions andsubmit the
required documentation totheMinistry ofTourism;
- thesubsidy forairtraffic amounts to180kunas perpassenger (forDubrovnik airport itis220
kunas perforeign passenger and50%reduction inpricefordomestic passengers). Withregard
tobustransportation, thesubsidy depends onthesizeofthebusandamounts to:1.1kunas/km
forabuswith40seats, 1.5kunas/km forabuswith40-60 seats, and2.2kunas/km forabus
withmore that60seats. Formaritime traffic, thesubsidy amounts to20%oftheprice ofthe
ticket forpassengers andvehicles onregular lines, i.e.1.5kunas/litre ofconsumed fuelfor
specially leased vessels forthetransfer oftourists arriving anddeparting.
Thepurpose ofthese subsidies istoincrease thecompetitiveness anddecrease theriskfor
organizers oftourist tripstoCroatia.