Commission Report (2002): Czech Republic

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

Chapter 1: Free movement of goods

Progress since the last Regular Report

The positive assessment of previous Regular Reports, noting continued good progress, can be repeated this year.

Framework legislation in the area of horizontal and procedural measures is in place. A May 2002 amendment to the Act on Technical Requirements for products, elements of which enter into force on accession, refines the obligations of producers and importers and provides for the abolition of the dual system of declaration of conformity according to the origin of products.

A Government Resolution of March 2002 provides the basis for the necessary infrastructure in the area of notification. A Government order laying down the procedure for provision of information in the field of technical regulations in line with the acquis was adopted in July 2002.

Sector specific legislation has been largely transposed. In the past year, new or amended Government Orders have transposed the New and Global Approach acquis on technical requirements for products in terms of noise emissions (November 2001), on cable-way installations, on explosives for civil use (January 2002), on technical requirements for CE marking of construction products (April 2002), on technical requirements for non-automatic weighing instruments, and on recreational craft. Under those areas covered by the Old Approach Directives, implementing Decrees have been adopted in the areas of metrology and motor vehicles. The existing Act on Metrology was also amended. In the field of pharmaceuticals for human use, the acquis on advertising has been transposed.

The Czech Trade Inspectorate recruited 24 new officials during 2001 -- 2002. During 2002 it will receive additional funding for the reinforcement of inspection work. The Czech Republic prepared an analysis of the market surveillance system for various sectors at the end of 2001 with a view to carrying out improvements.

A new Act on State Agricultural and Food Inspection was adopted in April 2002, further transposing the acquis on market surveillance of foodstuffs (see also Chapter 7 -- Agriculture). It takes effect from January 2003 and aims to improve domestic co-ordination and harmonisation with international agreements. In December 2001 a ``Strategy for Ensuring Food Safety in the Czech Republic` was adopted as the basis for implementing a ``from farm to fork` approach. The newly established Separate Food Safety Unit of the Ministry of Agriculture and the Food Safety Co-Ordination Group will be responsible for implementation, with a report on overall food control system and implementation due by the end of 2002. A March 2002 amendment to the Act on Advertising Regulation transposed the acquis on the labelling, presentation and advertising of foodstuffs.

There has been continued steady progress with training for Czech participation in the RAPEX information system on dangerous products.

A new Act on Weapons and Ammunition was adopted in March 2002 covering the acquisition and possession of weapons, the placing of weapons and ammunition on the market and the supervision of explosives for civil use. The adoption of implementing legislation began with a June 2002 government order. A May 2002 Act on the Export of Cultural Goods Outside the External Borders of the EU aims to ensure uniform external border controls after accession.

As regards alignment with the non-harmonised area, the Czech Republic is refining a list of measures which potentially could be in conflict with Articles 28 -- 30 of the EC Treaty. Any such measures will have to be justified in line with the Communities` established practice. A June 2002 Resolution makes provision for administrative structures overseeing the free movement of goods between Member States under these Articles. The Resolution also provides for the introduction of mutual recognition clauses in new and amended technical legislation.

In the area of public procurement, a May 2002 amendment strictly limits the use of emergency ``fast track` procedures and should significantly contribute to the transparency and predictability of decisions in this field.

Overall assessment

Horizontal legislation functions satisfactorily, central laws in this respect being the Amended Act on Technical Requirements for Products, the Act on Public Health Protection and the Act on General Product Safety. The latter requires further amendment to align with new acquis. Following the amendment to the Act on Technical Requirements for Products, the Government Orders implementing the Act should be amended as appropriate. Almost all transposition of the New and Global Approach Directives has been concluded.

A number of institutions are responsible for implementation of horizontal and sector-specific legislation. Standardisation and the conformity assessment system are administered satisfactorily by the Czech Office for Standards, Metrology and Testing (COSMT) and the Czech Standard Institute (CSNI). The COSMT also covers legislation in the field of industrial goods, and the exchange of information and notification about technical requirements. For the latter, new structures and procedures need to be established. The COSMT performs its duties independently of the MIT (to which it is formally subordinated) and co-operates with the Office for Public Information Systems. The competence of the staff and the level of equipment is good.

The Czech Republic now implements 99% of all harmonised European standards.. The Czech Standards Institute (CSNI) is independent and a member of the European standardisation Committees CEN and CENELEC and of the European Telecommunications Standards Institute (ETSI). It is also a member of the International Organisation for Standardisation (ISO) and the International Electrotechnical Commission (IEC). The Czech Accreditation Institute (CAI) is an independent company, although the Ministry of Industry and Trade has a role in appointing board members. It ensures accreditation of laboratories and certification bodies. The CAI is a full member of the European co-operation for Accreditation (EA) and the international accreditation organisations ILAC and IAF. It is a signatory to MLA IAF (for the accreditation of certification bodies certifying Quality Systems) and to the ILAC mutual recognition agreement on results in the field of testing and calibration.

The Czech Trade Inspectorate (CTI) is the main supervisory body for the protection of consumer economic interests and performs market surveillance of industrial products. Its performance is generally satisfactory. The CTI has a central unit and 14 regional inspectorates, employing more than 500 staff, about 440 of whom are inspectors. The increased demand for surveillance stemming from recently amended legislation will require further increases in capacity and effectiveness.

Market surveillance for certain specific sectors (e.g. foodstuffs, medicinal products, cosmetics) is performed by a range of other bodies. The quality is generally good although improvements could still be made. Areas for priority action are cosmetics and pharmaceuticals. The National Health Institute contains the notification body for chemicals, which uses the institute`s equipment. The body currently employs 5 people. At present only one laboratory satisfies the Good Laboratory Practice requirements for the testing of chemical substances notified in the Czech Republic.

The Czech Republic should complete alignment in the pharmaceuticals sector and ensure alignment with the acquis in the field of chemicals. Transposition of the acquis on rough wood has been delayed. In the area of motor vehicles, further progress is required to transpose EC technical regulations.

Despite the generally advanced level of transposition and implementation in the area of foodstuffs, some further adjustment of Czech legislation (for example the Food Act and related legislation) is necessary and the pre-market approval system retained for a small number of special foods needs to be abolished. The institutions for implementation are in place, primarily divided between the Ministries of Health and Agriculture. The State Veterinary Administration is the main supervisory body for animal-origin foodstuffs and its structures for control and inspection generally function well, domestically and at the border. The Czech Agricultural and Food Inspection (CAFI) supervises the safety and quality of food and its laboratories are accredited according to international standards. Public Health laboratories are gradually being accredited according to EC standards. Preparations in the field of novel food (including genetically modified food) and on rapid alert seem to be on schedule. A contact point needs to be designated for the Rapid Alert System and responsibilities should be clearly defined with clear criteria distinguishing emergency cases from less-hazardous products for cases of withdrawal of products from the market. The list of approved novel and genetically modified food should be brought in line with the acquis. Co-ordination between all institutions in charge of control needs to be ensured.

In the area of firearms, the adoption of implementing legislation to the new Act on Weapons and Ammunition should continue. There is also a need to fully align legislation concerning the return of unlawfully removed cultural goods.

Concerning the free movement of goods in the non-harmonised areas, any measures determined to be unacceptable within the scope of Articles 28 -- 30 of the EC Treaty will have to be removed and all potentially conflicting measures that are to be kept will need careful justification. The necessary legislative and administrative steps need to be taken to ensure effective transposition and implementation of mutual recognition clauses. Additional legislative and administrative progress will be needed to ensure the interchange of data between administrations.

Further progress is required in the area of public procurement. According to a Czech government report, since 1998 public tenders have been organised for only 1,483 orders out of 6,853. Furthermore, current Czech legislation is not based on the same principles as the acquis, drawing instead on a United Nations model. Whilst the May 2002 amendment to the Public Procurement Act should bring more transparency, legislative shortcomings remain, including the scope of the law, time limits, the public remedies system, procurement under thresholds and the non-elimination of a national preference clause. A new, fully compliant Act is still required as a top priority. Appropriate administrative adjustment and strengthening will then also be needed. The creation of a registry of state contracts has been announced. It is aimed at increasing transparency of public procurement. The registry is to be under the Regional Development Minister.

The Ministry for Regional Development has overall responsibility for public procurement, in particular as regards public investment. The lack of qualified staff working on this area in the Ministry should be addressed. The Office for Protection of Economic Competition ensures compliance with public procurement legislation. It currently has 26 staff carrying out surveillance of public procurement and the level of administrative capacity is good.

Conclusion

In its 1997 Opinion, the Commission concluded that the Czech Republic had progressed very well in the taking on of the acquis related to the free movement of goods. However, there needed to be certainty that products conforming to EC standards were allowed onto the Czech market. Developments concerning the safety of industrial products needed to be monitored, both concerning legislation and implementing structures. Provided current efforts were maintained, free circulation of goods should be made possible in the medium term. Also, further work was needed to align with public procurement legislation. Furthermore the Czech Republic should make certain that any national measures were proportional and did not hinder trade.

Since the Opinion, the Czech Republic has continued to perform well in the vast majority of matters related to the free movement of goods. The Czech Republic has overall achieved a high degree of transposition with the acquis on free movement of goods. Administrative capacity is generally good.

Negotiations on this chapter have been provisionally closed. The Czech Republic has not requested any transitional arrangements in this area. The Czech Republic is meeting the majority of the commitments it has made in the accession negotiations in this field. However, delays have occurred on alignment with the acquis on public procurement. This needs to be urgently addressed.

In order to complete preparations for membership the Czech Republic`s efforts now need to focus on legislative progress on public procurement, completing the structures for implementation and ensuring that any national measures are proportional and do not hinder market access.

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