VI. TRADE REGULATIONS AND STANDARDS

A. Duties and Import Taxes

The Czech Republic is a member of the World Trade Organization
and has adopted a tariff code with an average tariff rate of
approximately 5%. Specific duty rates are published in the Czech
tariff schedule based on the Harmonized System of classification.
As part of the free trade organization CEFTA (Central European
Free Trade Agreement), which also includes Slovakia, Poland,
Bulgaria, Hungary, Romania, and Slovenia, the Czech Republic
offers more favorable customs duty rates on products originating
in these member countries.  In addition, the Czech Republic has
begun its EU accession process and is lowering and or eliminating
tariffs on an increasing number of products coming from the EU.
Both scenarios mean that some U.S. products can face higher rates
as compared to European competitors.

The value added tax (VAT) applies to all goods, both domestic and
foreign, sold within the Czech Republic.  The VAT rate is
generally 22%, although a lower VAT of 5% is charged for selected
goods, such as food and pharmaceuticals.

Excise taxes are imposed on the following goods produced or
imported into the Czech Republic: fuels and lubricants, tobacco
products, beer, wine and liqueur.  The rate is determined by the
type and quantity of the product and must be paid within ten days
after being notified by the Customs Office of the tax amount due.

B. Customs Valuation

The Czech Republic adheres to WTO rules on customs valuation and
therefore applies the same rules of customs valuation used by
U.S. Customs for imports into the United States. Customs
valuation is based on information provided by the exporter on the
commercial invoice.  Duties and taxes are levied on an ad valorem
basis, that is, on the basis of the declared value of the goods
sold.

C. Import Licenses

The Czech Ministry of Industry and Trade issues import licenses
to those seeking to import selected goods into the Czech
Republic. While most products and services are exempt from the
licensing process, oil, natural gas, pyrotechnical products,
sporting guns and ammunition require a license.

D. Export Controls

The Czech Republic adheres to international export controls and
works in close cooperation with the U.S. and other Western
countries in implementing export controls on certain sensitive
technologies.  U.S. export controls on items exported from the
United States to the Czech Republic are generally similar to
those in effect on items exported to other European destinations.
Contact the U.S. Department of Commerce, Bureau of Export
Administration, Washington, D.C. (tel: (202) 482-2547, fax:
(202)482-3617) for details on U.S. export controls.

E. Import/Export Documentation

U.S. companies are required to include a commercial invoice, a
bill of lading and a shipper's export declaration (needed for
items requiring an export license or valued above $2,500) when
exporting to the Czech Republic. In addition, the importer must
issue a declaration of conformity for each product introduced to
the market. Czech law specifies products which need to be
certified by an accredited person before the declaration can be
issued. Depending on the nature of the goods, a veterinary health
certificate and/or a certificate of origin (for concessionary
customs rates, if applicable) can also be required.

F. Temporary Entry

The following are the most relevant temporary entry rules for
U.S. exporters:

-- Temporary exemptions from duty are allowed for certain items,
such as merchandise samples and items for display at trade shows
or exhibitions.  The Czech Republic also accepts ATA carnets as a
way of facilitating temporary admission through customs.  For
more information about obtaining a carnet for clearance of goods,
samples or equipment intended for temporary entry only, contact
your local U.S. Department of Commerce Export Assistance Center.

-- Companies exporting goods to the Czech Republic for the
purpose of temporary use may do so as long as the period does not
exceed 24 months (in some cases it is possible to extend this).
The exact time period must be agreed upon with Czech Customs.
When the goods are reexported, three percent of the duty value
per month (maximum will not exceed full duty amount) that the
goods resided in the Czech Republic must be paid if the goods
were used.  Exports to the Czech Republic of raw materials and
certain semifinished products that are processed before their
reexport enter duty-free.  This is contingent upon the approval
by Czech Customs on the conditions of processing and the handling
of any waste caused through transformation of the goods.

G.  Labeling and Marking Requirements

Labeling and marking requirements for products depend on the type
of product and the intended use.  In general, however, labels
must be in the Czech language and can be affixed to the product
or on a leaflet attached to the product.  Information must
include the name of the product, name of producer, country of
origin, and in some cases, instructions for use.  Labels for some
products, such as foods, beverages, food supplements and textiles
must also provide content/composition. In addition, international
norms for warning labels on consumer products are expected. Czech
labeling requirements are almost completely harmonized with EU
regulations; the process should be finished in 1999. Czech
importers/distributors are responsible for the correct labeling
of products that are put on the Czech market, and can typically
advise the U.S. exporter of specific requirements regarding
labeling and marking.

H. Prohibited Imports

The list of prohibited imports includes certain veterinary and
plant materials, Freon, non-registered pharmaceuticals and
chemical, biological, and nuclear weapons.

I. Standards

The Czech Republic has begun accession negotiations with the
European Union and as such is in the process of harmonizing its
standards based on European and international norms. In this
regard, the ISO 9000 series of standards are being used
increasingly in the Czech Republic as evidence of high product
quality.  Domestically, the "Czech Made" mark is the award given
to products which are judged to be of outstanding quality,
environmentally friendly and favorable to energy consumption.
This award is given to Czech products that are produced by either
a company or entrepreneur registered in the Czech Republic with
at least 60% Czech content in the cost of the final product.

J. Free Trade Zones/Warehouses

There are 11 free trade zones established in several cities
throughout the Czech Republic. Materials, components and
semifinished products are exempted from customs duties or VAT if
they are exported into a free trade zone.  If the goods are then
used in the manufacturing or processing of a final product which
is then reexported, it is also exempted from duties or VAT.
Duties and VAT are applied on the declared value of the goods if
they are cleared for free circulation within the Czech Republic.

K. Special Import Provisions

In view of its status as a member of the WTO, the Czech Republic
applies no special import provisions.

L. Membership in Free Trade Arrangements

The Czech Republic is an associate member of the European Union
and has recently begun accession negotiations for full
membership, which is not expected before 2003.  The Czech
Republic is also a member of the Central European Free Trade
Agreement (CEFTA)and has a special customs agreement with
Slovakia.

INTERNATIONAL COPYRIGHT, U.S. & FOREIGN COMMERCIAL SERVICE AND
U.S. DEPARTMENT OF STATE, 1998.  ALL RIGHTS RESERVED OUTSIDE OF
THE UNITED STATES