SECTION VI. TRADE REGULATIONS AND STANDARDS A. Tariffs and Import Taxes The Austrian customs tariff uses the Harmonized System for the numerical classification of goods. All countries are afforded GATT most-favored-nation status. Most tariff items have ad valorem duty rates which are applied to the customs value (c.i.f. Austrian border) of the imported goods. In general, imported raw materials are accorded duty-free treatment or assessed rates up to 10 percent; semi-finished products, up to 20 percent; and finished goods, free to 15 percent. Austria levies no surcharges as such, but a 20 percent value-added tax (VAT) is charged on most industrial imports. The VAT is 10 percent on imports of most food products. A tax of 0.3 percent of the customs value is levied on all imports and exports. Proceeds are used to finance Austrian foreign trade promotion activities. Most agricultural and related products are subject to specified duties, although some are duty free. Moreover, levies or equalization fees are charged on the importation of certain commodities under the Sugar, Starch and Market Regulation Laws. Export equalization fees are also levied under the same laws. Importers of many industrial products may request reduced rates of duty or duty-free treatment when the imported product is not produced in comparable quality in Austria. Information regarding Austrian duties applied to specific products is available from Philip Combs, Austria Desk, Office of Western Europe/IEP, Room 3043, U.S. Department of Commerce, Washington, D.C. 20230, tel: (202) 482-2920, or from Department of Commerce district offices. Inquiries should contain a complete product description, including the Harmonized System commodity number, if known. Inquiries pertaining to agricultural products should be directed to Merritt Chesley, Inter-America & Western Europe Division, Room 5520, Department of Agriculture, Washington, DC 20250-1000. B. Customs Valuation Austrian law follows the Multilateral Trade Negotiations (Tokyo Round) Agreement on Customs Valuation. This agreement provides detailed rules for the determination of value, which are designed to provide a uniform and neutral system of valuation and preclude the use of arbitrary or fictitious values. These rules stipulate the primary method of customs valuation and the transaction value, as well as a series of alternative values that may be applied in a prescribed sequence. Under the transaction method of customs valuation, the dutiable value is based on the price actually paid or payable for the goods with a limited number of adjustments for selling commissions, packing costs and certain costs for material and services used in producing the goods borne by the buyer but not reflected in the price payable for the goods. It is anticipated that the value will be used in all but a limited number of cases. For example, it would not be used where there is a sale between related parties, as in transfer pricing. C. Import Licenses Import licenses are required for tobacco products, salt, munitions and poisonous substances. Permission to import "controlled goods" can be obtained from the Economic Ministry or the Ministry of Agriculture. Certain goods imported from countries other than the country of origin require import licenses, but these should be granted automatically. D. Export Controls Export restrictions are placed on sensitive goods such as weapons and materials useful in waging war. E. Import/ Export Documentation Documents required for shipments to Austria include the usual commercial invoice and the bill of lading or air waybill, neither of which requires consular verification. Commercial invoices must be forwarded in duplicate attached to the customs declaration. The invoices should include the following information: name and address of the shipper and the consignee, a full description of the shipment, including any special markings, number of packages, the value, country of origin and country of production and any other information that will facilitate customs handling. For textile imports, specific information as to type, width and weight of the fabric must be included on the commercial invoice. Certificates of origin are required mainly for imports of textiles and clothing. Evidence of origin on the basis of shipping documents, invoices, business correspondence or other suitable documents is also required if the lower GATT duty rate is to apply to the imported product. Certificates should show marks, numbers, weight and value of the merchandise and must be issued or certified by authorized U.S. chambers of commerce. The Austrian importer must be in possession of the original certificates at the time the shipment clears Austrian customs. Information on documents required for the importation of agricultural products including food items, plants and animals is available from the U.S. Department of Agriculture. Owing to the complexity of these regulations, U.S. exporters should also obtain information directly from the importer prior to shipment. F. Temporary Entry Apart from providing for relief from or refund of import duties and turnover tax on the original import, the Austrian government has no restrictions or regulations with respect to re-exports. The amount of relief or refund depends on how much the character of the good was altered while in Austria. G. Labeling/ Marking Requirements Labeling must be in the German language. Austria has no general requirements that imports be marked as to the country of origin. However, certain commodities imported into Austria are subject to special regulations regarding the manner in which they must be marked or labeled at the time of sale to indicate composition, content or country. Some markings are not permitted, mainly those that may lead to misinterpretation of the nature or origin of the product. These special regulations, highly detailed and diverse, are embodied in numerous laws and directives. In addition, some customs and practices have become established in various trades. This information should be obtained from the Austrian importer prior to the shipment of the goods. Since 1978, Austrian customs officials have been authorized to inspect and detain imports of textiles, shoes, detergents and other packed household chemicals which do not meet labeling requirements. As far as textiles are concerned, care and washing instructions must be included. The shipper or the importer has three weeks to correct any deficiency or apply for customs clearance for reexport or storage in a bonded warehouse where such difficulties can be remedied. Failure to take action within a three-week period is subject to heavy penalties and possible confiscation. H. Prohibited Imports Except for a few items, such as weapons and pharmaceuticals, Austria has removed restrictions on imports of all industrial items. Imports of some commodities and from certain countries are subject to control, such as voluntary restraint agreements, monitoring procedures, certificate of origin requirements and import declarations. I. Standards The Austrian Standards Institute (ON) is a non-profit private organization incorporated by the Austrian Parliament in the Standards Act of 1971 as the only Austrian body to issue and endorse Austrian Standards. ON prepares standards in a variety of fields: Ores and metals, mechanical engineering, building and construction, health and medical equipment, non-metallic materials, chemical and allied industries, special technologies, personal safety, food, environment and waste management. Approximately 90 percent of the standards ON prepares are voluntary. At mid-year 1994 the collection comprised 5,574 Standards, including national implementations of 1,006 European Standards, 199 European Telecommunications Standards and 258 International Standards. ON produces a catalogue of its Standards, ON-KATALOG, as well as a monthly standardization magazine, entitled "CONNEX," giving information on the latest changes in national, European and international standards. "ON InfoPoint" is a commercial information service which offers to clients specific investigations in the field of standards and technical regulations in Austria and abroad. Austria is a signatory to the GATT Standards Code. ON is the enquiry point for information on non-governmental standards; the Federal Ministry of Economics is the enquiry point for governmental regulations. The addresses are: Oesterreichisches Normungsinstitut Heinestrasse 38, Postfach 130 A-1021 Vienna, Austria Tel: (43 1) 213 00-805 or -810 Fax: (43 1) 213 00-818 Bundesministerium fuer wirtschaftliche Angelegenheiten GATT Enquiry Point Abteilung 1/5 Stubenring 1 A-1011 Vienna, Austria Tel: (43 1) 7500-0 Fax: (43 1) 73 79 95 J. Free Trade Zones/Warehouses Free trade zones are considered to lie outside the Austrian customs territory and are maintained in Graz, Linz, Solbad Hall near Innsbruck and Vienna-Freudenau. The zones of the Danube River cities of Linz and Vienna-Freudenau have the added benefit of extensive port facilities. Foreign products may be brought into zones for transshipment, storage, processing, manufacturing or packaging without the payment of a customs duty or tax. Customs charges are made on goods only when they are shipped from the zone into Austrian customs territory. The importer has the option of having the duty based on the condition of the goods at the time of their entry into the zone or from abroad, or on their condition at the time of their shipment from the zone to the customs territory. Where goods produced in the zone from both foreign and domestic materials are shipped into the customs territory, duty is charged only on the foreign materials. However, foreign goods for consumption or capital goods brought in for use in the zone are subject to customs duty or tax upon entry. Warehousing: Customs privileged warehousing facilities for imported foreign goods are of two basic types: (1) nonbonded warehousing against customs bond account and (2) storage in bonded customs warehouses. Imported goods which are to be sold in the customs territory or reexported may be stored in non-bonded warehouses without customs seal and without payment of duties and taxes for an unlimited time. A transaction license is required that is granted only to registered firms and traders. Security is required, and pertinent customs provisions must be observed. Account is kept of the disposition of the goods throughout their registration in customs-bond accounts. Minor operations such as packing, unpacking and repacking, refilling and maintenance may be performed by the holder of the transaction license without notifying customs officials, provided that such operations do not result in a change of the tariff classification or dutiable value. In certain circumstances, nonbonded storage against a customs-bond account may be permitted if the goods are processed during their storage; in such cases, the pertinent provisions of inward processing traffic apply. Bonded customs warehouses store dutiable imported goods that are subsequently to be cleared for free trade within the customs territory, submitted to another customs procedure or reexported. Goods cannot be entered or removed without breaking a customs seal. An authorized agent is required to supervise the goods while in storage and is entitled to subject them to operations (e.g. packing, blending separating, cleaning and marking) that are compatible with the purpose of customs warehousing, as long as the tariff classification and the dutiable value of the goods remain unchanged. Bonded customs warehouses are either public or private. Public customs warehouses may be used by anyone who observes warehouse regulations. They are often located near a customs office and are usually operated by the Federal Government or by certain regional organizations. Some serve for the storage of most types of goods, while others restrict themselves to certain goods. Private customs warehouses generally may be used only by the warehouse owner. This warehouse may amount to no more than a room in the merchant's own warehouse or business premises. K. Special Import Provisions Restrictions are placed on the importation of textiles corresponding to the Uruguay Round negotiations of the GATT. The import of agricultural products is limited by Austria's Ministry of Agriculture and Forestry. L. Membership in Free Trade Arrangements Austria is a member of the European Free Trade Association, which joined with the European Union to create the European Economic Area. Austria is scheduled to become a member of the EU on January 1, 1995. Austria is also a member of the General Agreement on Tariffs and Trade (GATT).