GREECE 5. Significant Barriers to U.S. Exports Audits of banks, insurance companies, government organizations, companies on the Athens Stock Exchange, and companies which for two successive years fulfill two of three criteria (assets of at least 130 million drachmas, turnover of at least 260 million drachmas, at least 50 employees) may only be performed by the government-controlled Body of Greek Sworn Accountants (SOL). International accounting firms may not join SOL. Multinational companies must keep two sets of books, one to SOL standards, the other which meets international accounting standards. This rule may soon change. Rules governing establishment of insurance companies and the sale of insurance in Greece are also being harmonized with the EC insurance directives. In early 1990, the Greek Parliament voted to abolish Paragraph 4 of Article 13 of Law 1256/82. This article required all state property to be insured exclusively by state-owned, Greek insurance companies, all of which are subsidiaries of state banks. Article 13 also obliged state banks to "recommend" to their customers that they should insure only with the state-owned insurance companies. These legal provisions created an unfair situation for private insurers, Greek and foreign, and caused the European Commission to take Greece to the Euro-Tribunal on a charge of monopolistic, unfair competition. The EC won and Article 13 has been abolished. It may take time for banks to fully implement this change in practice. The Greek Government, through the Ministry of Culture, financially aids local film producers. A box office admission tax of 12 percent (on top of 8 percent VAT) provides funds for subsidies to produce and promote Greek films. Greek distributors of U.S. films as well as theater owners claim that the tax is discriminatory and assert that box office receipts have been affected adversely. The Government sets a maximum price (currently $20,000) for the purchase of a film. Film rentals are set on the basis of a percentage of admission receipts. Domestic labor laws require that all placements must be done through the official employment agency (OAED) rather than through private organizations. This creates a barrier to temporary employment franchises. However, hiring of employees may be done without the intervention of OAED provided OAED is notified within eight days of such hiring or 30 days, in the case of newly established firms. Residents traveling abroad for family reasons or tourism may buy the equivalent of ECU 1400 (about $1,670) per trip for travel to EC countries and Cyprus, or the equivalent of $700 per trip for travel to all other countries. Foreign exchange for business travel is limited to $2,000 per trip. Greek travelers to EC countries may spend another 600 ECUs ($716) per trip on credit cards. This amount is capped at 300 ECUS (about $360) per year for travel to all other countries. Government ownership of the national airline guarantees it indirect subsidies through periodic increases in capital by the Greek Government and through Government-backed loans. However, the Government wants the airline to run on commercial GREECE lines, and has tentative plans to sell up to 49 percent to private buyers. At present, foreign carriers may not sell ground services to other airlines. This may change in 1992 and must change by the end of 1993 for EC airlines. bilateral Air Transport Agreement, signed in July 1991, significantly expands U.S. carrier rights in Greece. A new The As part of its liberalization of the economy, the Government has empowered many public sector companies and banks to be sold to private buyers, including foreigners. government will sell only 49 percent of three parastatals: Olympic Airlines, the Greek Telecommunications company (OTE), and the Public Power Company (PPC). Thus, foreign investment is now, in theory, allowed in sectors from which it had been excluded, e.g., railways, telecommunications, and energy. The mineral sector is open to foreign capital from EC members, but restrictions apply to non-EC investors. EC and non-EC investors are restricted when investing in the exploitation of "strategically important" minerals, i.e., uranium, gold, petroleum, and other energy sources. The Government is considering allowing greater foreign participation in oil exploration. In the case of shipping companies and banks, foreigners may not hold majority ownership. Growing attention to environmental protection, energy conservation, industrial, mineral and energy research, and technological advancement is reflected in the extension of preferential grant rates (15 percentage points higher than normal rates) to investments in these sectors. Generally, investment performance requirements are not implemented by specific laws or regulations, but are negotiated informally on an individual basis with investors when drafting the respective instrument of approval for each project. American investors report that local content and export requirements are elements which are seriously considered by the Greek authorities in evaluating investment proposals, but are not legally mandatory prerequisites for the approval of an investment. The basic law governing foreign investment in Greece is Legislative Decree 2687 of 1953, which governs the importation of capital for productive investment. Investors who import capital into Greece under this law gain a measure of constitutional protection for their property rights, and preferential tax treatment. Subsequent Bank of Greece decisions have removed all repatriation restrictions for EC and non-EC investors. Still, the rights granted to third country investors are inferior to those granted EC investors in that only direct investment capital, and not portfolio or real estate investment, is given coverage for non EC investors. Although these decisions have made the capital transfer provisions of Decree 2687 obsolete, new investors from EC and non EC countries may still wish to seek the protection of Decree 2687 because the approval to invest under the law, once granted, becomes an irrevocable legal instrument. Greek laws and regulations concerning government procurement nominally guarantee nondiscriminatory treatment for foreign suppliers in most instances. However, a series of practices have the effect of limiting awards to U.S. suppliers. These include access to tender information by some GREECE firms before it is available to all potential bidders, lack of transparent reasons for selective tendering, and occasional discriminatory sole sourcing. Also, standards and requirements for a bid may be written to favor a particular supplier or written so loosely that any bid can be accepted or rejected depending upon the evaluation committee's interpretation. Bidders have also been allowed to change a bid after the final deadline. Reasons for not being selected are often not communicated or made clear to unsuccessful bidders. The EC is a signatory to the GATT Government Procurement Code on behalf of all member states, but Greece has not yet joined the Code. As a non-member, Greece has not been under Code obligations, and Greek companies have not been allowed to participate in government tenders in the United States. The Greek Government is now drafting a Presidential Decree to bring Greece in conformance with EC Directive 80/767 calling for adherence to the GATT Government Procurement Code. The decree is expected to be issued before the end of 1991. Greece has submitted a new entities list to Brussels. Adherence to the GATT code will be an important step forward in assuring U.S. companies a transparent and proper procurement process in Greece. On February 10, 1990, the Greek Commerce Ministry published a presidential decree establishing harmonization with EC procurement policy. As Greece moves toward accession to the GATT Government Procurement Code, greater Greek compliance with EC procurement policy may be anticipated. During bilateral discussions on government procurement, in May 1991, it was agreed that U.S. Embassy officials and the Greek Ministry of Commerce Secretary General for government procurement would consult on general procurement problems, as well as specific cases involving U.S. companies. Since the bilateral, the Embassy has received no major complaints from U.S. companies involving specific procurement problems. Under Greek offset policy, offsets are not mandatory except in defense related contracts. While not mandatory, the Government encourages and expects offsets to accompany bids on tenders worth 250 million drachmas ($1.6 million) and over. The real impact of Greece's buy national policy is felt in the Government's offset policy where local content, joint ventures, and other technology transfers are stressed. 6. Export Subsidies Policies Two forms of export subsidies applied prior to the introduction of the VAT in 1987: rebates of indirect taxes and export loan interest. These began to disappear after the VAT was introduced and were replaced by VAT rebates. Rebates of indirect taxes were abolished for exports to EC countries. They are still partially in force for exports to non-EC countries, but will be phased out by January 1992. Rebates on export loan interest have been abolished. 7. GREECE Protection of U.S. Intellectual Property This is a key trade problem for American exporters and service suppliers. Bilateral discussions between the United States and Greece on the lack of adequate intellectual property protection in Greece were held in May and December 1991. Enforcement of existing protections against piracy are lax, pirated video and audio cassettes are more prevalent than legal cassettes, and pirate broadcasters transmit American programming without paying royalties. To remedy the situation, the government will submit a new copyright bill to Parliament in January 1992. During the bill's drafting, the government took extensive comments from all interested parties, including the United States, in an effort to ensure that its provisions, including enforcement, would be comprehensive and effective. Passage of the bill is expected in February 1992. In contrast, the specific situation of the many unlicensed (pirate) TV stations remains legislatively unresolved. However, the new copyright law may well enable U.S. companies to win adequate legal settlements from "pirate" stations. Current Greek laws extend equal protection on patents and trademarks to foreign and Greek nationals. Greece is a member of the Paris Convention for the Protection of International Property, the European Patent Organization, the World Intellectual Property Organization, and the Berne Copyright Convention. As a member of the EC, the Government's intention is to fully harmonize its laws with EC standards. Patents: Law 1733 of 1987 harmonizes Greek laws on patents with the articles of the European Patent Convention and provides for the protection of patents for 20 years. Copyrights: National and conventional treatment of copyrights is accorded U.S. nationals and companies under an agreement signed between Greece and the United States on March 1, 1932. Protection is also provided by domestic legislation and the 1948 Brussels text of the Berne Convention on copyrights of September 9, 1886. Illegal copying of software was made a criminal offense in 1988. Trademarks: Greek trademark legislation is fully harmonized with that of the EC. Foreign trademarks, whether registered in the country of origin or protected as common law trademarks, can be registered in Greece without submission of a home registration certificate or other evidence of ownership. Thus, foreign trademarks can be registered in Greece as Greek trademarks independently of any prior registration abroad. Under current legislation, trademarks are protected for 10 years and may be renewed for an unlimited number of 10 year periods. Impact on Trade: The United States believes that intellectual property rights are inadequately protected in Greece and has put Greece on a special Section 301 watch list. U.S. companies estimate that software piracy in Greece costs them millions of dollars a year. In one case of copyright infringement, a U.S. publishing company estimates its loss at over five million dollars. The Motion Picture Export Association of America estimates that its members lose GREECE about $62 million a year due to video cassette and film piracy in Greece. All Greek workers except the military and police may form or join unions of their choosing. The right of association is set out in the Constitution and in specific legislation passed in 1978 and amended in 1982. Unions are highly politicized, with competing unions linked to political parties, but they are not controlled by the parties or the government in their day to day operations. There are no constraints on serving as a union official, and Greek unions are not restricted with regard to making international contacts or joining international trade union organizations. All but a few most powerful unions receive most of their funding from the Ministry of Labor's Worker's Hearth, however, the Hearth is scheduled to be eliminated in 1992. Although the courts can declare strikes illegal, the effective right to strike was legally restricted in 1991 only by the Government's power to declare the civil mobilization of workers. This provision, which was not used in 1991, is considered by the ILO to violate the standards of ILO Convention 87 on Freedom of Associations and was the subject of criticism by the ILO. b. Right to Organize and Bargain Collectively The right to organize and bargain collectively was embodied in legislation passed in 1955 and amended in 1990. Antiunion discrimination is prohibited, and complaints of discrimination against union members or organizers may be referred to the labor inspectorate or to the courts. There are no restrictions on collective bargaining for private workers. Civil servants, however, negotiate their demands with the Office of the Minister to the Prime Minister and have no formal system of collective bargaining. C. Prohibition of Forced or Compulsory Labor Forced or compulsory labor is prohibited by the Constitution and is not practiced. d. Minimum Age of Employment for Children The minimum age for work in industry is 15. e. Acceptable Conditions of Work The minimum wage is determined through collective bargaining between the labor confederation (GSEE) and the employers' association. It is then ratified by the Ministry of Labor which gives it legal force. The maximum legal workweek is 40 hours with one month paid vacation and pay for overtime. Minimum standards of occupational health and safety are provided for by legislation. Although the Greek General Confederation of Labor (GSEE) has characterized health and safety legislation as satisfactory, it has also charged that enforcement of the legislation is inadequate, citing |