Thursday, 31 Oct 2013
Overseas Business Risk - Slovakia
Political and Economic
Following the dissolution of Czechoslovakia, Slovakia became an independent state on 1 January 1993.
Slovakia has a parliamentary system of governance. The government acts as the central body of executive power and the parliament acts as the sole body of legislative powers. The Government (Cabinet) is drawn from the unicameral 150-member National Council (Parliament) elected by universal adult suffrage for a four-year term. The Prime Minister is designated by the Constitution as the head of the Government. He is usually the leader of the winning party. His executive power is shared with the President who is the Head of State. The President is elected in direct elections for a five-year term, restricted to two consecutive terms of office. The President appoints the Prime Minister and, on the latter's recommendation, the other members of the Government.
The centre-left government of Robert Fico was appointed on 4 April 2012 after the early elections were held in March 2012. The previous government (led by PM Radicova) collapsed in October 2011, when it lost a vote of confidence over the issue of approval of the eurozone saving mechanism European Financial Stability Facility.
Robert Fico is the country’s Prime Minister for the second time. In 2006 – 2010 he joined forces with the ultranationalist Slota and corrupted authoritarian Meciar. In the March 2012 elections Fico’s SMER party won 44% of the vote securing 83 seats in the 150-seat Parliament. Slovakia thus has a one party government for the first time since the fall of the communist regime in 1989.
The Government’s manifesto was approved by the Parliament in May 2012. The key task of the new government is to cut the budget deficit by 1.5bn EUR to bring it below 3% by 2013. Fico has vowed to find revenues mainly by reverting Slovakia’s flat tax system of 19% and taxing the rich, i.e. high income groups, big companies, monopolies and banks. He is not expected to announce any intentions of significant savings in the state administration costs nor major structural reforms.
Current President Ivan Gasparovic defeated opposition candidate (and former Slovakia’s Prime Minister) Iveta Radicova in 2009 presidential elections. He is the first President who defended his mandate and was re-elected for the second term (until 2014). But in reality the President has little political influence. Presidential elections are next due in 2014.
More information on political risk, including political demonstrations is available in FCO Travel Advice.
Slovakia has ratified 75 ILO conventions and there has been no criticism from the ILO on the State’s involvement in labour issues nor cited violations of worker’s rights. Bonded labour, indentured labour or slavery is not practised and child labour is prohibited. Trade unions are legal and workers can strike, without being subject to intimidation or reprisals.
Human rights issues are raised mostly in relation to the Roma communities. There were cases when individuals and/or NGOs claimed that members of Roma communities were discriminated in seeking employment. There is no information about any court decision on this type of discrimination though.
Women are not discriminated against in the labour market. Farmers can own land, and have access to banks. There is no discrimination against migrant workers or minority groups.
Bribery and Corruption
Man reading a newspaper
Bribery is illegal. It is an offence for British nationals or someone who is ordinarily resident in the UK, a body incorporated in the UK or a Scottish partnership, to bribe anywhere in the world.
In addition, a commercial organisation carrying on a business in the UK can be liable for the conduct of a person who is neither a UK national or resident in the UK or a body incorporated or formed in the UK. In this case it does not matter whether the acts or omissions which form part of the offence take place in the UK or elsewhere.
In 2012 Slovakia was ranked 62 out of 176 countries surveyed in Transparency International’s corruption perception index (66th in 2011).
Corruption in Slovakia exists especially in public procurement, healthcare, education and law enforcement. A number of British investors in Slovakia have raised the issue of corruption with the Embassy. These cases concerned the judiciary and public procurement (e.g. single source tenders) in the energy, tourism and healthcare/pharmaceutical sectors. Corruption in general, as well as in the judiciary, therefore risks damaging Slovakia’s profile as an attractive location for FDI.
The drawing of EU funds in Slovakia has also been often dogged by perceptions of non-transparency and allegations of corruption. Besides the bureaucratic burdens the lack of transparency and little public control are the main reasons behind slow and insufficient drawing of EU funds allocated for Slovakia for years 2007-2013.
One of the main priorities of the Slovak government is the fight against corruption. The main points are:
the fight against corruption
reform of the public procurement (e-procurement)
enhanced public access to information
publication of all contracts, invoices and financial transactions online as a condition of their validity
reform of the judiciary
improve of law enforcement and restore confidence in judiciary and government
The changes are slow but they started to come. The ministries have been using e-tenders in the public procurement. All public contracts are made public on websites. The measures of the new Government include publication of the online register of all the state contracts (those of the previous government as well as the newly signed contracts).
There is an underlying threat from terrorism. Attacks, although unlikely, could be indiscriminate, including in places frequented by expatriates and foreign travellers.
Protective Security Advice
The Centre for the Protection of National Infrastructure also provides protective security advice to businesses.
Man at laptop
There is a requirement to provide proof of your identity if requested by the police. The only legally acceptable documents by the Slovak Police are a passport or a national ID card. All persons physically present in the Slovak Republic, are required by law to carry a passport or a national ID card at all times. It is not sufficient to carry a photocopy of the passport, although it is recommended that you keep a photocopy of your passport in a safe place.
In Bratislava especially there remains a risk of petty theft. Pickpockets operate around the main tourist areas, and foreigners are easily identified and targeted. You should take sensible precautions against bag snatching and mugging. Do not leave valuables unattended. When jackets are placed on the backs of restaurant chairs, wallets should be kept securely elsewhere. When putting bags down, place one foot through the arm straps to prevent theft.
There have been a few occurrences in Bratislava of visitors being given "spiked" drinks and waking several hours later to find all their valuables gone. Be wary of drinks offered by persons unknown to you. Some large city centre pubs employ heavy-handed bouncers, some of whom carry firearms, who control boisterous behaviour very aggressively. Be careful not to offend by showing disrespect to e.g. other national flags.
There have been instances of drivers of foreign-licensed cars being targeted by criminals. If you have to fix a puncture, or any damage to your tyres, you should ensure that your vehicle is locked before you sort out the problem. Since the start of 2008 there has been an increase in robberies from parked cars. Items stolen have not been on general view. We recommend that all valuables are removed from the car when parking, rather than just being placed out of sight.
Taxi drivers sometimes attempt to overcharge tourists, e.g. by adding unauthorised supplements or by not setting the meter at the start of a journey. Insist that you will pay only the fare shown on the meter.
More serious crime does happen in Slovakia but is not usually targeted at tourists or visitors and tends to be a result of disputes between warring criminal fractions.
IP rights are territorial, that is they only give protection in the countries where they are granted or registered. If you are thinking about trading internationally, they you should consider registering your IP rights in your export markets.
For information on registering your Trademark or obtaining a patent in Slovakia, you should contact the Industrial Property Office of the Slovak Republic. The Industrial Property Office of the Slovak Republic is a central state administration body operating in the field of industrial property protection.
More information on intellectual property rights in Slovakia is available at the website of the World Intellectual Property Organisation (WIPO).
There are elements of organised crime in Slovakia as in many European countries. These often involve people trafficking (forced labour) and to a lesser extent drug and cigarette smuggling.
More information is available on overseas business risk in a range of markets.