WORLD TRADE
ORGANIZATIONWT/REG89/R/B/1
G/L/355
14 March 2000
(00-0985)
Original:  English
CZECH REPUBLIC-SLOVAK REPUBLIC CUSTOMS UNION
Biennial Report on the Operation of the Agreement
Communication from the Parties
The report below presents the information received from the Permanent Missions of the
Czech Republic and the Slovak Republic, dated 2 June 1999.  It is organized in accordance to the
Standard Format for Information on Regi onal Trade Agreements (WT/REG/W/6).
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I. BACKGROUND INFORMATION ON THE AGREEMENT
1. Membership and Dates of Signature, Ratification and Entry into Force
The Agreement establishing the Customs Union between the Czech Republic and the
Slovak Republic was signed on 29 October 1992 and has been implemented since 1 January 1993.
The Agreement, concluded in accordance with the provisions of Article XXIV of the General
Agreement, constituted a part of a far broader spectrum of agreements and arrangements ensuring an
orderly dissolution of the former Czech and Slovak Federal Republic.
The main objectives of the Agreement are to ensure the free movement of goods, the
integration of economies and economic policies of the Parties, provision of favourable conditions for
development of trade with third countries and pu rsuance of conforming commercial and customs
policies towards third countries.
The Agreement applies to all products falling with in HS Chapters 1 to 97.  It also contains
provisions on state aid, state monopolies, competition, intellectual property and public procurement.
Some aspects of cooperation in agriculture were further elaborated in the Agreement on Mutual
Relations and Principles of Cooperation in Agriculture, Food Processing, Forestry and Water
Management.
The Agreement was notified to the GATT and examined in 1994.1  A t  t h a t  t i m e ,  t h e
respective Working Party concluded that the Agreement was consistent with the provisions of Article
XXIV of the GATT.2
The experience over six years of the existence of the Customs Union has confirmed its
importance, usefulness and positive impact on mutual trade between the Parties and trade relations
with third countries.  The Agreement encourages the development of both Parties and contributes to
                                                     
1 Documents L/7212 and L/7212/Add.1, dated 30 April 1993 and 12 May 1993.
2 Report adopted on 4 October 1994 (L/7501).WT/REG89/R/B/1
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development of their national economies and foreign trade as well as the integration efforts in the
European context.
A list of the Agreements concluded since 1994 in the framework of the Customs Union is
found in Annex 1.
Trade data
Trade data is found in Annex 2.
II. TRADE PROVISIONS
1. Import Restrictions &
2. Export Restrictions
Since the day of entry into force of the Agreement the Parties applied no customs duties,
quantitative restrictions, or other measures having equivalent effect in their mutual trade.  The
Agreement did not envisage any transitional period wh ich is normally necessary for the elimination of
trade barriers as no duties and other restrictive regulations of commerce existed between the Parties
within the former federation.  Instead, the Agreement prohibits their future introduction with theexception of certain particular circumstances (public morals, public security, protection of life and
health, protection of national treasures of artistic, historic or archeological value, preservation of
exhaustible natural resources and injury arising from increased imports originating in one of the
Parties).
1.3. Common external tariff
The Parties have been pursuing conforming commercial and customs policies towards third
countries since the creation of the Customs Union in January 1993.  They have been applying a
Common Customs Tariff incorporated in two identical national Customs Tariffs.
The basic customs duties applicable on 31 December 1992, which served as a basis for the
establishment of the Common Customs Tariff, have been modified to reflect jointly negotiated
Uruguay Round tariff reduction commitments and commitments resulting from subsequent
plurilateral negotiations (information technology products).  These commitments are contained in
two national WTO Schedules which are identical, with the exception of the volumes of agriculture
imports eligible for in-quota rates.  In their rela tions with preferential partners, both Parties apply
identical schedules for gradual elimination of customs duties.
3. Rules of Origin
The 1993 applied bilateral rules of origin were modified with a view to introducing new pan-
European rules of origin, providing for diagonal cumulation among European countries since January
1997.  These rules were further amended in January 1999.
4. Standards
A new agreement between the Office for Standard ization, Metrology and State Testing of the
Czech Republic and the Office for Standardization, Metrology and Testing of the Slovak Republic
entered into force in September 1997.  This agreement provides for cooperation in the area ofWT/REG89/R/B/1
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certification and state trading.  It does not apply to agro-food products, tobacco and cosmetic
products.  These areas are governed in the Act on foods and tobacco products No. 110/97 Coll. of the
Czech Republic and in the "Codex Alimentarius" of the Slovak Republic.
In the area of sanitary and phytosanitary measures, cooperation is based on the Agreement
between the Government of the Czech Republic and the Government of the Slovak Republic on
veterinary medicine cooperation and the Agreement between the Government of the Czech Republic
and the Government of the Slovak Republic on cooperation in quarantine and plant protection.  These
Agreements were concluded in 1996 and their objectives are to intensify bilateral professional
cooperation in the sector of animal and plant protection and to avoid different kinds of diseases to be
spread around the territories of the Parties.
9. Other
The Parties apply a customs legislation encompassing conforming regulations for the
assessment, payment, refund and exemption from customs duties, customs regimes, including transit.The same customs formalities apply in practice in both Parties.  Cooperation in customs matters was
upgraded by an agreement providing for mutual customs assistance which entered into force in
October 1995.
III. GENERAL PROVISIONS
5. Institutional Framework
The main bodies of the Customs Union  are the Council of the Customs Union, Permanent
Secretariat and Arbitration Commission.
The Council of the Customs Union is composed of four Members of the Government of the
Czech Republic and four Members of the Government of the Slovak Republic (Ministers of Industry
and Trade (Economy), Foreign Affairs, Finance, Agriculture).  It is directed by its President, whose
office rotates every six months between a representative of the Czech Republic (Minister of Industry
and Trade) and a representative of the Slovak Republic (Minister of Economy).  The Council takes
decisions by agreement and it meets two or three times a year.
The Permanent Secretariat is the executive body of the Council exercising powers arising out
of the Agreement, drafting recommendations for the Council and performing other tasks charged by
the Council.  The Seat of the Permanent Secretariat is Bratislava.
An Arbitration Commission is to be established on an ad hoc  basis for each individual case, to
settle disputes resulting from the Agreement.  The Arbitration Commission shall open proceedings
upon request from the Council or from one of the Parties.  It shall be composed of one arbitrator to be
nominated by the Government of the Czech Republic, one arbitrator to be nominated by the
Government of the Slovak Republic and a Chairm an agreed by the two designated arbitrators.
Decisions of the Arbitration Commissions shall be binding and both Parties pledge to implement them
in a timeframe set up by the decisions.
The Parties agreed on the Rules of the Arbitration Commission which entered into force in
August 1997.  So far no arbitration proceeding has been initiated by either Party.WT/REG89/R/B/1
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IV. OTHER
The year 1995 saw marked changes in the method of applying clearing relations between the
Parties.  The clearing system in place from early 1993 has been replaced in September 1995 with a
free convertible currency payment.  Since October 1995, the Czech Republic and the Slovak Republicdeclared an external convertibility of their currencies at the balance of payments current account.WT/REG89/R/B/1
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ANNEX 1
Agreements Concluded since 1994 in the Framework of the Customs Unions
Between the Czech Republic and the Slovak Republic
Description Remarks Entry into force
Rules governing the Arbitration
Commission of the Customs UnionThe Rules apply for settlement of
disputes arising from the AgreementSigned on 25.11.1995
In force since 8.8.1997
Protocol on the interpretation ofArticle 19 of the Agreement
establishing the Customs UnionThe Protocol covers criteria for
granting any aid through state
resources (not for agricultural
products)Signed on 23.1.1995
In force since 23.1.1995
Agreement between the Partiesamending the provision of Article 1of the Agreement on Rules of Originand methods of administrative
co-operationRules on Pan-European cumulation
were introducedSigned on 21.12.1996
In force since 1.1.1997
Agreement between the Partiesamending certain provisionsregarding the definition of the term"original products" and methods ofadministrative co-operationRules on Pan-European cumulation
were introducedSigned on 7.12.1998
In force since 1.1.1999
Guidance of the Parties in the area ofmaking notifications underinternational agreements.Furnishing information under the
Agreement establishing CustomsUnionIn force since 24. 1. 1996
Guidance of the Parties exchanging
mutual information regarding theApplication of the AgreementFurnishing information on measures
under preparationIn force since 24. 1. 1996
Agreement between the Office for
Standardization, Metrology and State
Testing of the Czech Republic and theOffice for Standardization, Metrologyand Testing of the Slovak RepublicCertification is governed by this
Agreement; it does not apply to
agro-food products, tobacco andcosmetic productsSigned on 20.8.1997
Entry into force 1.9.1997WT/REG89/R/B/1
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ANNEX 2
Trade Data
Customs Union Trade
(Million US$)
Year Imports of the Czech Republic
from the Slovak RepublicImports of the Slovak Republic
from the Czech Republic
1994 2,130.9 1,957.9
1995 2,983.6 2,433.7
1996 2,650.4 2,707.9
1997 2,272.3 2,374.4
1998 2,007.5 2,391.2
Total Imports from Third Countries
(Million US$)
Year Czech Republic Slovak Republic
1994 12,839.6 4,653.1
1995 18,144.3 6,336.8
1996 25,065.3 8,415.6
1997 24,894.9 7,888.8
1998 26,744.9 10,568.2
Share of Bilateral Trade with the Slovak Republic
in Total Foreign Trade of the Czech Republic
(Percentage)
1994 1995 1996 1997 1998
Percentage ofTurnover 15.3 12.8 11.6 10.0 8.9
Share of Bilateral Trade with the Czech Republic
in Total Foreign Trade of the Slovak Republic
(Percentage)
1994 1995 1996 1997 1998
Percentage ofTurnover 33.5 31.5 27.3 25.4 19.3WT/REG89/R/B/1
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Imports of the Czech Republic from the Slovak Republic
by HS Chapter
(Million US$)
HS Chapter 1994 1995 1996 1997 1998
01 6,809 5,074 2,683 1,973 2,345
02 5,647 4,045 2,449 1,763 1,150
03 961 1,076 883 672 802
04 7,858 11,593 13,568 10,166 8,607
05 333 487 187 422 1,205
06 1,676 2,669 2,018 1,515 1,436
07 29,175 26,394 26,124 20,306 18,119
08 6,708 5,202 4,853 3,078 2,248
09 2,973 2,139 491 503 771
10 21,691 22,351 5,228 8,406 19,767
11 3,783 7,015 10,701 5,998 6,532
12 8,710 6,963 8,715 4,153 6,074
13 33 53 37 21 208
14 19 9 5 17 6
15 4,131 7,438 8,600 6,887 10,949
16 1,307 1,347 1,283 1,042 1,150
17 5,575 10,670 5,649 6,528 16,941
18 13,290 14,230 15,569 12,280 12,726
19 13,853 15,680 16,345 14,654 12,326
20 6,308 6,841 7,684 4,567 4,205
21 3,916 14,802 13,359 12,893 8,593
22 13,871 11,116 10,874 11,826 11,107
23 1,833 1,890 2,914 2,298 3,545
24 25,272 32,267 22,435 28,696 27,853
25 24,874 32,204 35,494 38,498 37,609
26 3,324 5,188 4,862 3,192 2,553
27 115,395 168,695 185,979 193,716 168,858
28 27,484 36,081 25,507 22,786 19,837
29 52,105 81,751 59,945 54,151 48,987
30 63,888 93,873 92,473 73,578 69,324
31 25,137 28,444 36,968 29,923 21,090
32 13,207 14,383 11,228 8,990 5,437
33 8,151 8,837 9,272 7,778 7,876
34 20,445 22,351 21,155 22,095 18,461
35 1,175 1,012 1,110 1,076 1,847
36 1,403 3,553 3,564 2,274 1,366
37 472 517 1,370 272 318
38 20,175 28,709 24,309 22,098 17,625
39 127,761 179,392 158,646 127,898 111,512
40 68,560 96,642 89,310 72,022 68,777
41 13,504 13,616 6,938 5,873 4,263
42 4,470 4,514 3,292 2,016 1,558
43 3,252 3,968 2,775 1,153 749WT/REG89/R/B/1
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HS Chapter 1994 1995 1996 1997 1998
44 35,680 46,652 40,591 33,715 33,239
45 12 11 4 2 3
46 63 52 110 56 35
47 16,734 23,871 19,248 14,562 18,187
48 75,792 106,637 103,770 97,630 106,400
49 18,766 28,108 30,514 24,075 20,622
50 7 1 2 13
51 3,242 9,211 4,497 4,423 2,665
52 7,663 16,576 8,159 5,733 5,415
53 1,142 1,400 486 407 482
54 82,242 93,942 84,274 65,676 62,752
55 5,553 13,069 10,642 7,007 4,339
56 1,263 1,818 1,092 868 1,058
57 4,611 2,524 739 317 278
58 112 406 72 112 123
59 772 1,062 767 431 242
60 1,505 3,257 1,442 428 426
61 8,446 10,477 7,373 4,486 3,924
62 18,577 22,337 22,709 16,219 19,091
63 5,982 8,658 8,752 4,751 4,206
64 19,611 36,019 29,150 16,764 14,255
65 284 298 308 200 251
66 989 375 673 172 165
67 213 258 217 164 130
68 14,491 27,631 28,494 24560 2, 623
69 28,314 32,326 23,928 19,511 18,034
70 18,230 27,673 26,610 20,342 18,896
71 4,172 14,862 5,724 4,904 4,892
72 316,314 497,056 403,329 354,280 352,183
73 75,353 101,068 98,757 90,126 82,593
74 33,333 46,463 38,606 30,856 20,755
75 166 123 308 40 45
76 38,330 50,679 45,411 40,615 38,919
78 824 1,178 801 498 294
79 1,415 1,617 1,161 1,146 1,983
80 37 223 23 23 55
81 203 466 83 21 28
82 2,746 4,551 4,141 2,588 2,125
83 5,740 6,157 5,634 3,991 4,497
84 190,808 276,290 251,159 179,974 144,787
85 110,745 142,804 136,285 125,389 114,789
86 3,649 23,562 12,241 21,630 10,919
87 106,186 168,087 153,220 147,034 109,501
88 1,513 2,368 4,146 1,188 1,975
89 13 101 19 200 55
90 29,117 29,262 22,694 16 437 13,366
91 170 269 366 235 343WT/REG89/R/B/1
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HS Chapter 1994 1995 1996 1997 1998
92 60 67 48 29 19
94 53,853 53,836 49,709 33,558 24,560
95 2,023 2,465 2,748 2,345 2083
96 1,336 2,254 1,747 901 603
97 220 259 193 100 102
Imports of the Slovak Republic from the Czech Republic
by HS Chapter
(Million US$)
HS Chapter 1994 1995 1996 1997 1998
1 1,045 7,688 8,169 6,982 17,945
2 189 6,110 5,477 9,342 19,258
3 783 2,581 3,692 3,150 2,531
4 1,828 18,369 19,008 15,964 14,684
5 11 373 209 174 435
6 33 1,181 1,277 1,300 1,538
7 150 3,311 3,813 1,936 2,386
8 272 4,187 3,074 1,463 629
9 208 5,560 6,200 6,910 7,759
10 200 627 930 1,285 1,921
11 86 2,534 2,664 2,524 2,182
12 2,347 17,477 10,854 4,556 6,210
13 14 526 850 519 191
14 0 19 19 14 2
15 1,557 22,583 24,161 22,006 21,998
16 260 10,148 11,387 10,430 14,505
17 2,167 24, 430 18,163 8,569 7,727
18 1,717 22,156 22,912 21,259 19,462
19 1,591 22,425 27,376 26,465 28,119
20 362 7,606 8,227 13,225 14,334
21 674 14,675 20,151 19,450 20,868
22 2,935 38,193 48,170 40,161 34,191
23 660 9,564 11,079 6,445 7,704
24 2,002 36,172 43,830 52,053 49,435
25 830 13,460 15,301 15,753 17,116
26 2 44 130 132 256
27 17,558 230,538 213,599 186,103 154,819
28 3,442 37,290 36,290 25,461 28,835
29 5,696 79,535 76,327 81,076 83,981
30 2,926 63,799 76,387 68,647 49,256
31 40 982 860 1,085 1,099
32 1,371 20,422 20,208 16,319 16,822
33 1,051 16,356 19,567 17,814 12,595
34 1,594 20,296 22,396 18,998 20,147
35 173 2,267 2,168 1,831 1,523
36 216 2,097 2,154 1,849 1,843
37 244 2,212 2,003 1,227 1,015
38 1,499 16,162 17,028 14,558 13,927WT/REG89/R/B/1
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HS Chapter 1994 1995 1996 1997 1998
39 6,856 100,432 109,656 98,958 91,390
40 3,049 47,092 47,236 40,280 33,527
41 595 6,905 11,312 6,065 5,896
42 299 4,130 5,102 4,950 3,956
43 144 1,825 2,391 2,902 2,410
44 1,644 19,637 22,104 21,601 23,257
46 17 106 91 101 123
47 703 6,687 15,486 16667 17,414
48 6,022 83,094 78,902 59,744 62,114
49 1,729 18,946 25,028 34,058 39,608
50 0 25 5 15 3
51 522 7,888 5,984 8,163 7,940
52 1,817 23,760 22,459 21,166 21,923
53 84 1,178 1,387 1,687 2,248
54 220 3,944 4,157 3356 3,047
55 1,131 17,560 17,035 16,371 14,330
56 611 6,999 7,137 7,327 7,680
57 262 4,134 5,838 3,315 1,944
58 460 5,300 5,787 4,866 4,575
59 3,584 40,135 33,930 23,479 40,084
60 502 6,001 7,093 5 501 5,651
61 859 10,266 11,104 12,712 11,755
62 1,121 14,003 16,469 17,778 17,181
63 511 6,571 7,620 8,735 8,392
64 1,002 12,259 16,711 14,323 10,447
65 104 759 979 999 951
66 20 265 299 487 419
67 10 160 103 135 131
68 1,094 14,924 17,873 15,175 15,240
69 1,965 19,202 22,746 24,587 28,047
70 2,143 29,961 32,390 27,558 23,646
71 905 6,948 10,014 10,810 9,893
72 11,415 195,648 201,165 161,195 167,770
73 12,094 174,402 190,918 173,246 169,823
74 2,337 18,092 18,646 18,950 14,936
75 16 513 493 799 428
76 1,650 26,537 25,156 21,454 22,548
78 201 2,277 1,799 941 801
79 40 1,167 412 275 514
80 25 516 351 302 190
81 25 508 337 381 382
82 1,218 15,854 20,198 17,194 15,491
83 2,000 22,074 23,643 19,463 18,449
84 19,794 247,714 292,931 253,458 203,648
85 12,857 138,301 146,286 140,752 126,735
86 2,640 34,704 42,446 55,936 38,592
87 14,069 181,472 288,715 323,623 319,924
88 9 1,173 1,448 2,383 3,360
89 2 136 418 687 1,021
90 2,736 30,806 33,469 26,582 21,696
91 84 1,233 1,004 1,075 834WT/REG89/R/B/1
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HS Chapter 1994 1995 1996 1997 1998
92 18 342 440 521 417
93 124 1,783 2,695 2,902 2,338
94 1,631 20,397 26,121 26,878 31,754
95 726 4,494 5,821 5,868 5,717
96 721 10,182 10,793 9,031 8,953
97 0 103 104 82 161
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