Customs

In view of the further liberalization of foreign trade, the new Law on customs tariff was adopted and came into force on June 1st 2001. During the preparation of the law, the following criteria were followed:

The basic instrument for regulation of foreign trade is the custom tariff

All imported goods will be subject to a minimum customs rate of 1%

Special tariff rates will be applied to certain types of products in order to stimulate their development

A discriminatory customs treatment of sectors within the domestic economy should be minimized

The functioning of the labor market should be improved

The new Law on Customs Tariff did not change the legal aspects of the previous law, but only modified the level of customs that are specified by the Customs tariff nomenclature, which is an integral part of the Law on Customs Tariff.

Instead of 36 tariff rates, the new law contains only 6. The new rates are 1, 5, 10, 15, 20 and 30%.

Companies and other legal persons engaged in foreign trade have to be registered in the Commercial Court (not anymore at the federal level) and in the Federal Customs Service.

The Tariff Structure

Raw and semi-finished materials, spare parts and equipment not produced in the country: 1% rate.

Raw and semi-finished materials, spare parts and equipment not produced in sufficient quantity in the country: 5% rate.

Equipment that is produced in sufficient quantities in the country: 10% rate.

Finished farm and industrial products that are produced in the country sufficiently: 20%.

Consumer goods that can also be production materials, but are not produced domestically: 10% rate.

Foreign consumer goods whose scarcity affects the domestic living standard: 15% rate.

Consumer goods produced domestically: 20% rate.

Luxury goods: 30% rate.

Products that was subject to the highest level of protection through quantitative regulations and licenses in the previous law up to 30% rate.

Treatment of agricultural products

High tariff rates are mainly applied on agricultural products. The highest average tariff rates are the following:

Drinks: 29.02%

Products from fruits and vegetables: 28.44%

Meat by-products: 24.48%

Various nutritional products: 24.66%

Milk and dairy products: 22.46%

The average unweighted customs rate decreased from 22.61% in the previous law to 16.76% in the current law.

Treatment of industrial products

Compared to farm products, the customs tariffs for industrial products are lower:

Chemical industry products are subject to an average rate ranging from 2.11% rate for organic products to 3.54% for inorganic ones. The customs charge for fertilizers has been reduced by 3 percentage points and now amounts to 5,82%.

The average rate for detergents is 9.38%.

The average rate for plastic materials and plastic products is 7. 22%, while the average duty rate for rubber products is 9.24%.

The average rate for wood and timber products is 4.91%.

Textile and clothing duty rate for fibers is 5% and for woven fabrics 10%.

Electrical machines, equipment, radio, TV devices and home appliances: average duty rate of 13.90%.

The rate for passenger cars is 20%.

The rate for used motorcars is 20% (10% for ambulance cars).

The rate for motorcars with 10 or more seats has not been changed and still amounts to 15%.

The rate for buses is 20%.

New trucks and other vehicles for transport of goods are subject to a rate of 15%.

Average Custom Rate

Under the new Law on customs tariff, the average weighted custom tariff has been reduced by 5.06 percentage points, from 14.43 to 9.37%. Tariffs range from 1 to 30%, while 50.16% of products are subject to rates ranging from 1 to 5%, and 73.17% of products are subject to rates between 1 and 10%.

In total 7099 products are now subject to less restrictive tariffs, 1116 are in the same tariff category as before, and 330 products are subject to higher duty rates.

Changes to the law on customs have the following implications:

Extra tariffs for importing goods above quantities specified by import quotas have been cancelled.

A uniform customs rate has been lowered to 10%, as well as the clearance rate (from 1 to 0.5%).

In the case of severe price disturbances in the local market, the Federal Government can alter certain duty rates for a limited period of time. This provision has been introduced in order to prevent artificially created shortages of goods.

For more information: http://www.fcs.yu