Commission Report 2002 (Slovakia)

• Progress since the last Regular Report
• Overall assessment
• Conclusion

Chapter 5: Company law

Progress since the last Regular Report

Since last year's Regular Report, Slovakia has made some limited progress in the areas of company law and the protection of intellectual and industrial property rights.

Regarding company law as such, in April 2002 a project was launched aimed at centralising and improving the operation of the Commercial Register. As regards accounting, a new Accountancy Law aimed at achieving full compliance with the 4th and 7th EU Directives was adopted by Parliament in July 2002 and is due to enter into force in January 2003. As regards the acquis on the authorisation of persons responsible for carrying out the statutory audits of accounting documents, a new Slovak Auditors Act adopted by the Parliament in July 2002 is scheduled to enter into force in January 2003.

In the field of industrial and intellectual property rights, an amendment to the Trademarks Law aimed at aligning it with the acquis on trademarks, entered into force in January 2002. The EC Directive on the legal protection of designs has been transposed by the adoption of the Act on Design in July 2002.

As concerns patents, the new Patent Law reported on last year entered into force in November 2001. Slovakia acceded to the European Patent Convention with effect from July 2002.

Overall assessment

Legislation in the field of company law is broadly in line with the acquis, as a consequence of the comprehensive amendments to the Commercial Code adopted in October 2001, which set out the steps for gradual alignment with all company law directives in the period up to January 2003.

Improvements have been made in recent years as regards the Commercial Register, including most recently the on-line availability of certain aspects and the extension of the list of obligatory data recorded in the Register. However, its operation in practice remains subject to severe criticism from the business community, in particular as regards registration procedures. The absence of set deadlines for example leads to uncertainty for business and fosters corrupt practices in the process, as dealing with applications can become arbitrary. Furthermore, a recent amendment to the Code of Civil Procedure allows provisional entries in the Register regardless of the legal validity of the decision allowing the entry. This would seem to provide a potential loophole affecting legal certainty in that area and might be contrary the acquis. Improvements to the operation of the Commercial Register are necessary, especially with regard to the speeding up the average time needed to company registration. Furthermore, it should be ensured that court fees for copies from the register are cost-covering only.

As regards accounting rules, these are already largely in line. Full alignment with the acquis in this area in particular as regards the 4th and 7th EC Directives as well as international accounting standards should be achieved when the recently adopted Accounting Law enters into force in January 2003.

In the field of industrial and intellectual property rights (IPRs), Slovakia's trademark and patent law is largely in line with the acquis. However, further alignment is needed in view of the Directive on Copyright in the Information Society and the Resale Rights Directive. The Slovak Ministry of Culture is currently preparing a new amendment to the Copyright Act with a view to implementing the above provisions. Slovakia has acceded to all relevant conventions in the field of copyright and related rights, including the two 1996 WIPO Treaties.

The main difficulties in the area of copyright are still law enforcement, piracy and the low level of legal knowledge and awareness among enforcement authorities. Cable retransmission piracy is the main piracy problem in Slovakia (about 60% in 2000). Many of the cable companies regularly retransmit foreign programming without authorisation. However, according to information provided by private industry, the levels of pirated music products were relatively low in 2001 (10%), whereas pirated software products was estimated at 46%. Particular attention should be paid to the effectiveness of the administrative and judicial bodies involved in enforcement, such as the customs services, the police and the judiciary, in particular by improving co-ordination and co-operation among them and the provision of adequate resources and targeted training.

The entry into force of the Act on Import and Export and Re-export of Goods that violate certain Intellectual and Industrial Property Rights has improved customs officers' scope for action. However, seizure of goods at the border requires a court decision, which is likely to slow down the procedure and burden the already overloaded courts. The reported number of requests for action filed by property holders (4 requests since August 2001) seems relatively low.

Slovakia will be in a position on accession to incorporate the Regulation replacing the Brussels Convention on jurisdiction and enforcement of judgements in civil and commercial matters and the Rome Convention on the law applicable to contractual obligations.

Conclusion

In its Opinion of 1997, the Commission concluded that with regard to company law and intellectual and industrial property rights, new legislation and legislative amendments were necessary to complete the alignment process. On intellectual and industrial property in particular, a major effort was needed to strengthen the implementation and enforcement structures.

Since the Opinion, Slovakia has made steady progress in aligning legislation with the acquis in the area of company and accounting law and on IPRs. Furthermore, gradual progress has been made with strengthening administrative capacity. Legislation in the field of company law is now broadly in line with the acquis. Administrative capacities are relatively advanced.

Negotiations on this chapter have been provisionally closed. Slovakia has not requested any transitional arrangements and has agreed to the EU proposal relating to industrial property rights for pharmaceuticals products and Community Trademarks. Slovakia is generally meeting the commitments it made in the accession negotiations in this field.

In order to complete preparations for membership, Slovakia's efforts now need to focus on ensuring full alignment with the acquis along the lines set out above. In particular, the new corporate legislation should be properly implemented and enforced and company registration procedures improved. While steps are ongoing to improve the transparency of and access to the Commercial Register, the actual procedures for company registration are in need of improvement. Slovakia should intensify measures to combat piracy and counterfeiting, strengthening border controls and, more broadly, further improving co-ordination between enforcement bodies (customs, police, judiciary).

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