VI. TRADE REGULATIONS AND STANDARDS Tariffs (duties): The Finnish customs tariff nomenclature is based on the Harmonized Commodity Description and Coding System. At importation, tariffs (duties) and other import taxes are levied on the customs value of the goods. As a rule, imports of goods are dutiable and taxable. Due to production policies, social or other reasons, or to meet international agreements, imports of certain goods are duty free. Currently according to the tariff nomenclature about 35 percent of Finnish imports enter duty free; the average industrial tariff is about 9 percent. Goods exempted from duty are also exempt from other import taxes. The exemption may also be temporary, meaning that the goods must be re-exported from Finland within the time limit fixed for temporary exemption of duty. The e-rate (exemption of duty) is applicable if such goods are not manufactured in Finland on an industrial scale. The National Board of Customs decides which imported goods qualify for the e- rate, and publishes a list of such goods in the THT bulletin. If an importer wishes the e-rate to be applied to goods other than those listed by the Board of Customs, the company must send an application to the National Board of Customs. Finland does not have a free trade agreement with the United States and import duties have to be paid for many goods imported from the United States to Finland. However, in addition to free trade agreements with EFTA and EU countries, Finland has free trade agreements with Turkey, Israel, the Czech Republic, Slovakia, Bulgaria, Hungary, Poland, Estonia, Latvia and Lithuania. Imports of industrial goods from these countries is duty free. The Generalized System of Preferences (GSP) to benefit developing countries has been applied by Finland since 1972. The developing countries are grouped into the least developed countries and other developing countries. Nearly all products originating in the least developed countries qualify for duty exemption within the system, except certain agricultural products to which duty is applied and certain textile products which are subject to half of the general duty. A great deal of products originating in other developing countries are left outside the system, being subject to the general duty. Import taxes: Goods imported to Finland are subject to different taxes and charges such as: - Variable import levies. Import charges are levied to adjust the prices of certain imports to the domestic price level. Subject to these levies are certain animals for slaughter, meat, dairy products, hen's eggs, dried peas, certain grains and milling products, malt starch and wheat gluten as well as sugar, molasses, bran, dog and cat food. - Car and motorcycle tax. Passenger cars, vans and any other cars weighing less than 1,800 kilos, as well as motorcycles are taxed upon importation. The amount of the car tax is equal to the taxable value of the car augmented by 22 percent. At present, the passenger car tax is 105 percent and the van tax 35 percent. A new annual vehicle tax will be implemented on June 1, 1994. Motor vehicles weighing less than 3,500 kilos are subject to the annual vehicle tax. The tax for new cars (bought after January 1, 1994) is FIM 500 ($93) and for older cars FIM 300 ($56). Motor vehicles 25 years or older and diplomatic cars are exempt from this duty. - Excise duties (on tobacco, candy, beer and other alcoholic beverages, soft drinks, foodstuffs, fuels, edible fats, sugar, fertilizers, fat and protein fodder and electricity) - Value-added-tax (VAT) - effective June 1, 1994. The VAT (22 percent) is levied on customs value, augmented by the eventual duty, any import charges, the excise duties, emergency stocks fees and car and motorcycle taxes. Customs Valuation At importation, duties and other import taxes are levied on the customs value of the goods. The customs value is primarily determined as the transaction value of the goods imported, based on the total price actually paid or payable for the goods. The transaction value includes commissions, cost for packages and packing, royalties and license fees relating to goods imported, the value of goods and services supplied by the buyer to the seller free of charge to be used in manufacturing the goods imported, as well as expenses caused by the transport and delivery of the goods to the place of importation in Finland. In practice, the individual item most frequently to be added to the sales price consists of delivery expenses, such as freight and insurance costs. In other words, the C.I.F. value is commonly used as the customs value. For the assessment of customs value, the place of importation must be indicated. In transportation by ship and aircraft, the place of importation is the unloading location and, in surface transportation, the Customs Office at the frontier. If the imports are not based on a sale (gift, rented or leased goods, barter or compensation deals), the customs value will be determined by using secondary methods. Secondary methods will also be used if the sales price cannot be accepted as a basis for the transaction value, for instance in the case where the parent- subsidiary relationship has influenced the price. Secondary methods of valuation include the transaction value of identical or similar goods imported. The customs value is determined accordingly to the GATT Valuation Agreement and the Customs Value Act. Import Licenses Finland has implemented the GATT agreement on import licensing procedures. Thus, there are only a few significant licensing requirements for industrial imports. Goods can generally be imported without a license from countries to whom Finland has granted most-favored-nation (MFN) status, including the United States. Import licenses from the Ministry of Trade and Industry are needed for imports from Taiwan and North Korea. The Ministry of Trade and Industry may reject the application thereby prohibiting the importation of the goods. Imports of certain products are restricted in Finland and subject to import permits by the Finnish authorities. These are imports of live animals and most animal products as well as meat and meat products. An import permit from the Veterinary Department of the Ministry of Agriculture and Forestry is required. Additionally, imports of endangered animal species require an import permit by the Ministry of the Environment. Imports of drugs, radioactive materials, weapons and ammunition also require an import license. Export Controls Present situation: Finnish export controls on dual-use products are mainly based on three acts: the Act on Safeguarding the Foreign Trade and Economic Growth of Finland, the Nuclear Energy Act and the Act on Export and Transit of Defense Material. The present licensing authority for COCOM-related dual-use goods is the Ministry of Trade and Industry and for MTCR (Missile Technology Control Regime) and AG (Australian Group - chemical and biological products control system) related goods, the Ministry of Defense. An export license is required for export of certain high technology goods and scrap metal, including ships. For exports to the Democratic People's Republic of Korea an export control declaration is needed. Further information can be obtained from the Ministry of Trade and Industry. Future situation: In order to improve the effectiveness of export controls, Finland is reorganizing and centralizing the export control system of dual-use goods. Finland aims to renew its export control legislation in accordance with developments in the European Union export control policy. The former Export and Import Permits Office has been abolished and its functions transferred to the Ministry of Trade and Industry. Furthermore, the administration of AG- and MTCR-dual-use items will be transferred to the Ministry of Trade and Industry from the Ministry of Defense, making the Ministry of Trade and Industry the central licensing authority for all dual-use products. Before the reorganization occurs, the mandate to control transit shipments is to be amended to the Act on Safeguarding Foreign Trade and Economic Growth. An overall reform of the strategic export control legislation will be considered and implemented in connection with potential membership in the European Union. A new Export Control Act Group will be set up under the Ministry of Trade and Industry in the near future. The Advisory Board on Export Controls The Advisory Board on Export Controls is a new coordinating body for authorities and industries concerned with export controls. It gives opinions on important export control policy matters and individual license applications if special consideration is needed. It also serves as a forum for exchange of information on and discussion of all export control matters. The Advisory Board is working under the Ministry of Trade and Industry but chaired by the Ministry of Foreign Affairs, the Board of Customs, Security Police, the Ministry of the Interior, the Ministry of Defence and the Federation of Finnish Metal, Engineering and Electrotechnical Industries. The role of the Ministry of Trade and Industry The central licensing authority for dual-use products is the Ministry of Trade and Industry (MTI). The licensing authority for nuclear related dual-use equipment, material and technology is the Energy Department of the Ministry of Trade and Industry. The MTI is in charge of licensing policy and information sharing for industries and authorities. The MTI prepares and manages a computerized system with databases of risk information concerning export controls. The MTI also issues export licenses and International Import Certificates. The role of the Ministry of Foreign Affairs The Ministry or Foreign Affairs (MFA) is in charge of general export control policy including international cooperation. The MFA's Political Department is responsible for non-proliferation policy and the Department of External Economic Affairs for trade policy issues. The roles of other authorities The Ministry of Defense is responsible for export controls on single-use defense material. The Ministry of the Interior (Police Department) is for the time being responsible for export and imports of civil ammunition. The potential transfer of responsibilities will be decided in the fall of 1994. The Board of Customs is mandated by law to perform the enforcement (supervision) of export and transit controls. Import/Export Documentation Imports must be cleared in writing, using forms endorsed by the National Board of Customs in Finland. The use of corporate forms is possible, if they comply with local regulations. The customs declaration form must be filled out by the holder of the goods or by an authorized agent. A valuation declaration for imports must be attached to the customs declaration for imports exceeding the value of FIM 10,000 (about $1,820). Also, a copy of the commercial invoice must be attached to the customs declaration, including the following information: - Exporter's/buyer's name and address - Date of the invoice - Identifying marks, the numbers, quantities, types and the gross weight of the packages, including unit of measure - Description and the quantity of the goods - Value of each item, with eventual reductions and the ground for them - Terms of delivery and payment Other possible documents needed in clearance include: - Documentary evidence of origin in EFTA, EC, or KEVSOS trade (see below) - GSP (General System of Preference) certificate of origin - Decision on the 'e' rate of duty (indicating that certain goods are not manufactured in Finland on an industrial scale) - Decision on customs relief (e.g. decision on export relief or on ship and aircraft building relief) - Import license or import permit - Control license - Export license of export certificates provided by bilateral textile agreements. Also, sanitary certificates are required for goods that may carry contagious animal or vegetable diseases into Finland. (Examples include: live plants, raw animal products, and processed animal products). All products imported for sale without further processing should clearly show their country of origin. Further information on import documentation can be obtained from the National Board of Customs (see the list of contacts). Temporary Entry Temporary exemption from duty can be granted, for instance, to the following: - Goods intended for public displays at exhibitions and fairs - Commercial samples - Professional tools and equipment If the goods are put to any unauthorized use or are not exported within the prescribed time (maximum of one year) they must go through normal customs clearance and become liable for relevant duties and taxes. In Finland, the ATA-Carnets, the international customs documentation for temporary duty-free admission, is issued by the Chamber of Commerce. The ATA-Carnets are frequently used for temporary imports e.g. samples, exhibition goods, and professional equipment, and they are valid for one year. Labeling, Marking Requirements Labeling and marking requirements in Finland are based on the Act on Product Safety. The following information should be included in retail packaging, or otherwise marked on the product (a sticker, label, etc.): - Name of the product (indicating clearly the contents of the package), - Name of the manufacturer or the name of the company that had the product manufactured, - Amount of contents (weight or volume of the contents shall be specified). If warranted by safety considerations or the economic security of the consumer, the following information should also be included on the retail packaging or otherwise clearly identified on the product: contents of the product, care instructions, operating instructions, and a warning of a possible danger related to the use or disposal of the product. All labeling/marking information has to be written in both Finnish and Swedish. AGRICULTURE/FISHERY - In addition to price competitiveness, U.S. exporters interested in the Finnish markets should be aware of the following advantages/constraints to trade. This information should not be considered exhaustive, but it does cover major areas which FAS/Stockholm is aware of. Finland's imports are subject to variable levies, quantitative restrictions and, in many instances, licensing requirements. However, in moving toward conformity with the EU, the import licensing system is now being replaced by a system of variable levies. When the April 15, 1994 Uruguay Round agreement is ratified by GATT member governments in 1994 or 1995, the variable levy system will be replaced by a tariff based system and guarantees of certain levels of minimum access for imports. This should result in gradually improved access to the Finnish market. Finland has exacting labelling requirements for foods. Its health, sanitary and labelling rules are very strict and its Customs laboratory has sophisticated capability to monitor product quality. A retail-size food package must show the name of the manufacturer, packer or importer, commercial name of the product, net metric weight or volume, ingredients in descending order of weight, last recommended date of sale, and storage instructions if perishable or intended for infants. Mandatory information described above must be labelled in Finnish and Swedish. Finnish importers are helpful in arranging for proper labeling information. With the exceptions noted above, additives, inspection and food labeling requirements will be changed where necessary to conform to EU regulations when Finland assumes its EU treaty obligations as early as January 1, 1995. Prohibited imports It is prohibited to import the following products into Finland: - Halogenated derivatives of acyclic hydrocarbons containing two or more different halogens - PCB and PCT chemicals used in transformers and condensers causing problem wastes - Alcohol beverages which contain 60 percent or more alcohol - Home wine manufacturer kits - Whale meat Standards It is highly recommended that U.S. products imported into Finland meet international or European standards. Standards are commonly used especially in metal, electrical, construction, and telecommunication industries, but also in security and safety related fields. In Finland, examples of products where reference to standards is commonly used are electrical apparatus, pressure vessels and oil containers, aerosols, and crash helmets. The central body for standardization in Finland is the Finnish Standards Association (SFS). It is a member of the ISO (International Organization for Standardization) and CEN (Comite Europeen de Normalisation). There are over 4,000 SFS standards in Finland, and SFS marks are used to indicate that products or services meet the requirement laid down in SFS standards. SFS also certifies quality systems at companies, on the basis of standards ISO 9000 (identified with EN 29000 and published in Finland as SFS-ISO 9000). A certification can be granted to the company if the quality system meets the requirements of SFS-ISO 9001, SFS-ISO 9002 or SFS-ISO 9003 standard. The body responsible for electrotechnical standards is the Finnish Electrotechnical Standard Association (SESKO), which is affiliated to SFS, and represents Finland in the IEC (International Electrotechnical Commission) and in CENELEC (Comite Europeen de Normalisation Electrotechnique). The Finnish Telecommunication Administration Center is in charge of ITU standards (International Telecommunication Union) in Finland. Free trade zones/warehouses Finland's only free port is Hanko, which is located at the southern-most tip of the country. The Hanko harbor is one of the only consistently ice-free ports in Finland, and has a railway- ferry link to Germany. A number of other ports in Finland offer free storage areas where warehousing, assembly and manufacturing are allowed (with permission from Finland's Board of Customs). The free storage areas are usually run by municipal corporations. There are also 15 bonded warehouses located at all principal ports of entry. Contact information on Finland's bonded warehouses can be obtained from: Board of Customs Ratakatu 1 B FIN-00120 Helsinki Tel: 358-0-6141 Fax: 358-0-614 2256 Contact: Mr. Kai Alvesalo Chief Inspector Special Import Provisions There are no special provisions for U.S. imports into Finland. In general, the licensing of imports depends on the country of origin and the country of purchase. The importation of certain goods is always subject to licensing, regardless of the country of origin and purchaser of the goods. Also, importation of certain articles is restricted for the purpose of protecting the health, welfare or economy of Finland. Subject to restrictions are, among others, the following: - foodstuffs and ordinary consumer goods - fodder and fertilizers - alcoholic beverages, and other products containing alcohol - medicines - narcotics and dangerous drugs - chemicals - nuclear and radioactive substances - explosives - blade knives, firearms, and ammunition - obscene publications - pressure vessels In addition, import restrictions have been established to prevent the spreading of animal and plant diseases. Membership in Free Trade Agreements Finland is a member of the European Free Trade Association (EFTA), which has a free trade agreement with the European Union (EU). The European Economic Area (EEA) agreement between EFTA and the EU became effective at the beginning of 1994. Therefore, almost all industrial products and certain processed agricultural products manufactured in the EEA qualify for duty exemption on their importation into Finland. In February 1992, Finland began negotiations to join the European Union and hopes to become a member at the beginning of 1995. In addition to free trade agreements with EFTA and the EU, Finland has free trade agreements with several other countries. EFTA has signed free trade agreements with Turkey, Israel, the Czech Republic and Slovakia (the former Czechoslovakia), and imports of industrial goods from these countries is duty free. Finland has concluded free trade agreements on reciprocal removal of obstacles to trade, the so called KEVSOS agreements, with Bulgaria, the Czech Republic, Slovakia, Hungary, and Poland. Industrial products and certain processed agricultural products qualify for duty exemption. Free trade agreements on industrial products exist with Estonia, Latvia, and Lithuania.