Category: Serbia

Zivkovic Samardzic has successfully defended the Crime and Corruption Reporting Network (KRIK) on appeal in a case filed by Serbia’s Minister of Internal Affairs – and former Director of the country’s Security Information Agency – Bratislav Gasic.

According to the firm, the case is “considered by the European Federation of Journalists (EFJ) and many others as one of a dozen of SLAPPs (strategic lawsuit against public participation) targeting KRIK.” The Crime and Corruption Reporting Network is a non-profit organization established to improve investigative journalism in Serbia.

 The case “dealt with KRIK’s coverage of a trial against a local crime gang called ‘Jotka’s group’ published in April 2021,” Zivkovic Samardzic reported. “Gasic claimed that the article damaged his honor and reputation since his name was mentioned in it, in a quote from the wiretapped conversation presented at the trial as evidence, where an indicted member of the crime gang was heard to mention that ‘Jotka’s group’ boss did not have to worry about his safety, because ‘Gasic is at his cauldron,’ an expression that, in criminal circles, as it was explained by the KRIK’s journalist, means that one person receives money from another.”

According to Zivkovic Samardzic, “the Court of Appeal in Belgrade decided to remand the case to the Higher Court in Belgrade for a retrial and clarified, additionally, that when conveying facts from public court hearings, the standard of due journalistic diligence would be met if the published content is in accordance with what was presented at the hearing, and if the media published what the attendees in the courtroom could see or hear.”

Back in 2020, Zivkovic Samardzic had also successfully defended the Crime and Corruption Reporting Network against defamation claims by businessman Vladimir Sekrevski (as reported by CEE Legal Matters on July 2, 2020).

The Zivkovic Samardzic team was led by Partner Kruna Savovic.

In accordance with the 2021 amendments to the Law on Companies, delivery of electronic documents to Serbian companies shall be performed to the registered mail on the e-government portal (eUprava).

All companies should register on eUprava’s website no later than today, 26 May 2023 – the registration procedure is rather straightforward and can be performed electronically by following the instructions contained on the website.

In case you require additional information on the registration procedure as well as the implications of failure to register within the deadline, please do not hesitate to reach out to us.

By Igor Radovanovic, Senior Associate, Teodora Vasin and Pavle Vucetic, Junior Associates, Karanovic & Partners

The Government of the Republic of Serbia, at its session held on 4 May 2023, adopted the Draft Amendments to the Planning and Construction Act, so that, in due course, the adoption of the Draft and the adoption of the amendments to the Planning and Construction Act can be expected.

The main objectives of the amendments to the Planning and Construction Act are, according to the explanations of the Government of the Republic of Serbia, to simplify the procedure for the issuance of building permits, to introduce new elements of the “green agenda”, to increase the responsibility of the public in the procedures for the issuance of building documentation, and to abolish the conversion of the cost of construction for a certain category of public, the establishment of a lex specialis for linear infrastructure facilities, the incorporation of the Agency for Spatial Planning and Urban Planning of the Republic of Serbia, the extension of the entities competent for the issuance of the information on location, the introduction of a chief state urban planner, the increased protection of natural and cultural areas and the increase activity of local authorities in the field of planning and spatial planning.

The proposed changes and amendments to the Planning and Construction Act set a trend of over-regulation of the provisions in the field of construction, further complicating the procedures to be carried out in the most straightforward transactions, ignoring the rights of the beneficiaries and placing certain entities in an unfavourable position.

On the other hand, the very concept and result the implementation of amendments and additions should achieve is economically and socially justified, but the answer to whether the means have achieved the goal will not be known in the near future. The most significant changes to the Law on Planning and Construction are proposed in the part related to conversion, i.e., the transformation of the right to use construction land into ownership rights without compensation.

The aim of these amendments is to eliminate the obligation to pay compensation for conversion for certain individuals who, according to the existing legal framework, are required to pay it, and to allow them to convert the right to use into ownership rights without compensation. The proposal for amendments and additions excludes entities that were or are business entities privatized under laws regulating privatization, bankruptcy, and enforcement procedures, as well as their legal successors in terms of status, i.e., individuals who have acquired the right to use by purchasing facilities from privatized entities, from the obligation to pay compensation for conversion.

The amendments to the Law on Planning and Construction stipulate that the right to use for these individuals ceases and is converted into ownership rights without compensation, but regardless of this, a separate procedure must be conducted for the conversion of the right to use into ownership rights to be realized.

The holder of the right to use, intending to convert this right into ownership rights, shall have to submit a request to the Republic of Serbia Agency for Spatial Planning and Urbanism for issuance of information on location with a confirmation determining both the purpose of the respective cadastral plot(s) and the possibility of registering ownership rights without compensation in favor of the applicant. If the construction of public-purpose facilities is planned on the cadastral plot(s), in entirety or in part, the conversion will not possible, or it would be possible with prior preparation and approval of a parcellation project for the purpose of dividing the plot(s).

Such procedural solution is inadequate for several reasons.

Firstly, the process lacks control over the applicant’s identity and the fulfillment of subjective conditions for conversion without compensation. In short, the agency issuing information on location with confirmation on subjective legitimation is neither authorized nor equipped to assess whether the applicant is truly eligible for conversion without compensation or if they may be an entity that is obligated to pay the consideration (such as a social enterprise or cooperative).

Secondly, according to the law itself, the Agency for Spatial Planning and Urbanism is not the entity authorized to issue location information. This authority may only exceptionally be granted with such competence, upon fulfillment of the conditions that will be prescribed by a bylaw.

Thirdly, the fate of the right to use in cases where the plot partially designated for a public purpose is not clearly defined, particularly if the remaining portion of the parcel, after allocating land for public use, does not meet the legally prescribed conditions for a construction plot in terms of minimum area, access to public roads, and similar requirements.

The amendments to the law, therefore, only take into account the public interest and do not provide a means to address marginal cases or conduct more rigorous checks on the fulfillment of conditions for conversion without compensation.

In addition to unclear and inconsistent procedural solutions, the question of conversion without compensation for individuals who have been obligated to pay the consideration since 2009 has raised other issues, particularly the issue of a disadvantageous position for individuals who have already paid compensation for conversion and the relationship between conversion and restitution rights.

Conversion with compensation has been the only way for certain individuals to acquire the right to construct on construction land where they were registered as right holders. Despite laws allowing for certain “transitional periods” during which right holders could obtain construction permits based on their right to use, right holders have been compelled for a significant period to convert their right to use into ownership rights and pay compensation to be able to exercise the construction rights they held prior to 2009.

By introducing conversion without compensation for individuals with the same status, those who have already paid compensation are placed in a disadvantageous position, raising questions about the compatibility of the amendments to the Law on Planning and Construction with regulations on state aid.

The explanation for the law failed to justify the amendments from the perspective of the Law on State Aid, which should be assessed by the Commission for State Aid Control prior to adopting the amendments. The issue of conflict between the right to conversion and the right to restitution was fully resolved by the provisions of the Law on Restitution of Confiscated Property and Compensation, and the legal framework unambiguously gave priority to the right to conversion over the right to restitution for privatized individuals.

However, through the provisions of the subsequently enacted Law on the Conversion of the Right to Use Construction Land with Compensation, the realization of the right to conversion was conditioned on the absence of a restitution claim that could result in in-kind restitution. In this way, the question of conflict between the right to conversion and the right to restitution remained unresolved, likely taking into account the nature of restitution as a process aimed at rectifying decades-long injustices.

In practice, the condition of the absence of restitution claims as a requirement for conversion did not cause significant problems and did not greatly hinder conversions. However, the legal solution of the absence of restitution claims as a condition for conversion provided some hope to restitution claimants that they could realize their rights to in-kind restitution and that there was some control over conversions from the perspective of restitution.

With the amendments to the Law on Planning and Construction, not only will there be a lack of systematic control over the process from the perspective of restitution, but the fund of financial resources intended for compensation in the restitution process will also be reduced. Namely, according to existing laws, a portion of the conversion fees was intended to fulfill the obligations of the Republic of Serbia in terms of compensation-based restitution.

In any case, despite the fact that the amendments to the Law on Planning and Construction have focused on details and minutiae, a comprehensive solution to this issue is still lacking. The proposed amendment expanding the circle of individuals entitled to conversion certainly aims to support the growth of the construction industry in the Republic of Serbia, but the conversion process, the lack of alignment with other regulations, and the unclear procedure may delay the intended effect.

The proposed amendments continue the trend of overregulation, aiming to provide detailed clarification of certain institutions and the assessment of facts in individual proceedings. As a result, the Law on Planning and Construction is becoming increasingly comprehensive and detailed with the aim of increasing certainty and legal security.

However, on the other hand, it is becoming more complicated to apply in cases where life situations cannot be fully categorized under the law, often leading to negative individual decisions. Despite the fast and easy access to information through modern technologies, laws should primarily strive for fairness and enable effective application even in situations that cannot be fully categorized under specific legal norms.

Therefore, it is necessary to aim for simplification of laws and addressing details and specifics through sublegal acts and individual decisions in the future, particularly in the field of construction regulations.

By Ivan Petrovic, Partner, JPM Jankovic Popovic Mitic

In this second installment of our series focusing on the risks posed by artificial intelligence (AI) and the legislative initiatives in the US to address them, we will be examining the proposed AI Bill of Rights.

The transformative impact of AI on our world is evident, from self-driving cars to facial recognition software. As AI technology gains potency, we must consider its potential implications for human rights.

In response, the White House Office of Science and Technology Policy (OSTP) has released a Blueprint for an AI Bill of Rights (The Blueprint). The Blueprint outlines five essential principles for the creation and application of AI systems:

1. Safety: AI systems should prioritize safety and efficacy. Their usage should not jeopardize individuals or property. This includes implementing measures to counter potential risks like bias, discrimination, and privacy breaches.
2. Fairness: AI systems should abstain from discriminating against individuals or groups. Their design should foster fairness and equity, and they should undergo routine audits to ensure they are not utilized discriminatorily.
3. Transparency: AI systems should uphold transparency and accountability. Individuals should receive notifications when interacting with an AI system, including information on the system’s purpose, data collection and usage methods, and ways individuals can manage their data.
4. Privacy: AI systems must respect individuals’ privacy. They should not gather or use personal or other data without users’ approval. Additionally, individuals should be allowed to access, rectify, and delete their personal data, and to opt out of data collection and usage for specific purposes.
5. Human alternatives: AI systems should not supersede human judgment and decision-making. AI should supplement human decision-making processes and should not be deployed to make impactful decisions on individuals or groups without human supervision.

Beyond the five core principles highlighted in the Blueprint, numerous other concerns should be addressed when creating an AI Bill of Rights. These issues include:

• Accountability: Who will answer for the actions of AI systems? Mechanisms should be in place to hold those involved in the creation and application of AI systems liable for any harm caused. This necessitates clear regulations and robust enforcement mechanisms.
• Bias: How can we guarantee that AI systems do not discriminate against certain individuals or groups?
• Employment: How will AI influence the employment landscape?
• Security: How can we safeguard AI systems from hacking or malicious use?

The enactment of these principles will ensure AI systems are used in a manner that respects human rights. It’s critical to keep the conversation going, developing policies and regulations that shield people from potential AI harm.

The formulation of an AI Bill of Rights is a crucial stride towards ensuring that AI benefits all of humanity. The Blueprint for an AI Bill of Rights is a vital tool for policymakers, businesses, and individuals keen on promoting fair, ethical, and beneficial AI use. The principles outlined in the Blueprint form the basis for the creation and implementation of AI systems that uphold human rights and values.

By Luka Duric, Associate, Gecic Law

AP Legal has advised the Serbian Export Credit and Insurance Agency on the sale of an NPL portfolio to EOS Matrix.

The Serbian Export Credit and Insurance Agency (AOFI), established in 2005, has a primary aim to provide support to Serbian export-oriented companies.

According to AP Legal, “EOS Matrix is a major player in the Serbian and regional NPL markets.”

The AP Legal team included Partner Aleksandar Preradovic and Senior Associate Dusan Preradovic.

AP Legal has advised UniCredit Bank Srbija on its loan to Marera Properties member MPP Palata Beograd. Isailovic & Partners reportedly advised Marera Properties.

According to AP Legal, “the proceeds of the loan will be used for refinancing of the existing financial indebtedness of the borrower, which is the owner of Palata Beograd, a landmark 24-story building in the very center of Belgrade. Marera Properties acquired the property from the City of Belgrade in 2021, following which the building was refurbished and converted into premium office space.”

AP Legal’s team included Partner Aleksandar Preradovic and Senior Associates Jovan Cirkovic and Dusan Preradovic.

The new Law on Safety and Health at Work was published on April 29, 2023, in the Official Gazette of RS no. 35/23 and went into force on May 7, 2023. With the entry into force of the new law, it completely ceases to be valid the previous Law on Safety and Health at Work (“Official Gazette of RS”, nos. 101/2005, 91/2015 and 113/2017).

The new Law on Safety and Health at Work introduces a number of novelties into the system of protection of workers’ rights and fully complies with European standards. The new law was adopted after 18 years, symbolically, on the World Day for Safety and Health at Work.

Aim

The aim of the new law is to establish comprehensive regulations and standards to ensure the safety, health, and well-being of workers in all sectors of the economy through strictening the penal policy, i.e. increasing fines, introducing new measures and obligations for employers and introducing additional measures for the protection of the health of employees.

Novelties introduced by the new law

Introduction of new terms

The new law introduces new terms such as: register of injuries at work; license register; serious, unavoidable and immediate danger; work from home; remote work; work environment; work at height, work at depth; worksite; etc.

New mandatory obligations of employer

The new law prescribes the employer’s obligation to provide the employee with personal protective equipment in good condition and conduct training for its proper use.

The new law prescribes the employer’s obligation to direct the employee, at the employee’s request, to undergo medical examination that corresponds to the risks at the workplace at regular intervals, at the latest within five years of the previous examination. The costs of medical examinations are borne by the employer.

The new law also prescribes the employer’s obligation to issue a work permit due to greater protection of employees when performing certain high-risk jobs (when performing work at height, in depth, in confined spaces, in spaces with potentially explosive atmospheres).

Engagement of occupational safety and health advisers and associates

The novelty prescribed by the new law is that in certain high-risk activities, an employer who employes from 251 to 500 employees, is obliged to conclude a full-time employment agreement with at least two occupational safety and health advisors, and the employer who employs more than 500 employees is required to conclude a full-time employment agreement with at least three occupational safety and health advisors. In all other activities, an employer who employs more than 500 employees is obliged to conclude a full-time employment agreement with at least two occupational health and safety associates.

Register of injuries at work

The new law establishes a register of injuries at work, which is maintained in electronic form by an administrative body within the Ministry of Labor, Employment, Veterans Affairs and Social Affairs. The register of injuries at work contains accurate and up-to-date data on injuries at work and enables faster and more efficient determination of the facts necessary to exercise employees’ rights from health insurance.

Penal provisions

The law has strictened the penal policy by doubling the maximum fines and prescribing 73 different misdemeanors for breaching the law.

Summary

The introduction of the new law reflects Serbia’s commitment to align its workplace safety standards with international norms and best practices. By prioritizing the well-being of workers and promoting a culture of safety, the legislation aims to enhance productivity, reduce absenteeism, and ultimately create a healthier and more secure work environment.

However, the successful implementation of the law will require adequate resources, training, and awareness campaigns to ensure widespread compliance and understanding. Ongoing evaluation and refinement of the legislation’s effectiveness will be crucial to address emerging safety challenges and continuously improve workplace conditions in Serbia.

By Nikola Gvoic, Partner and Alen Handan, Associate, Bojanovic & Partners

American actor Jim Belushi met with the Albanian Prime Minister Edi Rama to discuss the Albanian government’s initiative to legalize cannabis and the possibilities of exporting this product for medical purposes.

In the season finale of the documentary series “Growing Belushi” (which aired on 10 May 2023), Prime Minister Rama outlines how his government is preparing legislation to legalize medical cannabis in Albania. Furthermore, he urged Belushi to be a pioneer in the cannabis business in Albania, by encouraging him to set a positive example of how the development of this business can be beneficial to the Albanian economy and people.

Albania has favorable climate for cannabis cultivation, and it has been estimated that outdoor cannabis can be grown between six to seven months out of the year with no environmental issues.

In mid-2022, the Albanian government announced the plan to legalize the cultivation of medical cannabis and industrial hemp for companies which have such experience in European countries. The draft law proposed that applicants who wish to cultivate and process medical cannabis must hold another similar license in an OECD country and a Good Manufacturing Practice from the European Medicines Agency or Food and Drug Administration. The draft law also foresees the establishment of a national agency for the control and monitoring of the cultivation and processing of the cannabis plant for medical and industrial purposes, as well as the production of its by – products (“Agency”). Following the proposal of the Minister of Health and Social Protection, the Council of Ministers would grant cannabis manufacturing licenses for 15 years, with an option for renewal. According to the draft law, the activities to be carried out cannot be assigned to third parties, unless otherwise provided in the prescription of the license.

Further to the above, the draft law provides for the establishment of an Industrial Hemp Processor Register, which will be administered by the Line Ministry of Agriculture and grant access to the Agency and to the Line Ministry for Public Order and Security. Any farmer, entrepreneur and/or legal entity intending to cultivate industrial hemp must be registered with the Industrial Hemp Processor Register and equipped with a cultivation permit issued by the Ministry responsible for agriculture. The permit is issued for a 5-year period, with an option for renewal.

The draft law was published for public consultation in 2022 but until now no further steps have been taken for its adoption.

By Veton Qoku, Partner and Ermal Mema, Associate, Karanovic & Partners

On 16 March 2023, the Court of Justice of the European Union (“ECJ”) published its judgment on Towercast’s appeal against the French Competition Authority’s decision in Towercast’s case (Case No. C-449/21), confirming that abuse of dominance rules may equally apply ex post to transactions in which national and EU merger control thresholds were not met.

This case was brought to the public’s attention as an exception to the previously established rule and practice that only transactions which fulfil EU and national thresholds should be ex ante investigated by the competition authorities within a merger control proceeding. By this judgement, the ECJ established a mechanism to review below-threshold transactions ex post, which may be controversial in practice and arguably undermine the principle of legal certainty. The practice appears to have the greatest impact on the so-called “killer acquisitions”.

The concept of killer acquisitions

By definition, killer acquisitions occur when incumbent, established firms acquire small, innovative firms, which usually leads to the shutting down of the target company and its business. Accordingly, their main aim is to destroy an actual or potential competitor. In these transactions, the interest of both sides is fulfilled, as the acquirer protects the market for its existing products, whereas the shareholders of the target company receive the payment. However, the consumers lose out on the variety and quality of the products. That is why killer acquisitions potentially come under the radar of the competition authorities. The concept of reviewing killer acquisitions is mainly formed to cover transactions in the tech and pharma industries, where the target is still in the early stages of its development and has low turnover, and therefore, its acquisition may not be subject to merger control. The European Commission (“EC”) has thus interpreted Article 22 of the EU Merger Regulation (dealing with referrals of cases of the national member states to the EC) in a novel manner, considering that a national competition authority can rely on this regulation, even if a transaction does not fall within the scope of its national competences. 

Towercast case

Towercast SASU (“Towercast”) appealed to the French Competition Authority (“FCA”) that the completed acquisition of Itas by Télédiffusion de France (“TDF”) constituted an abuse of dominance. As background, after the acquisition of Itas, TDF’s only remaining competitor in the French market for digital terrestrial television broadcasting services was Towercast. The acquisition was completed in October 2016 and was not reviewed by any authority as it fell below both the EU and French merger control thresholds nor was it referred to the EC under Article 22 of the EU Merger Regulation. The FCA initially rejected Towercast’s appeal, stating that the introduction of an EU Merger Regulation rendered the application of the abuse of dominance rules in Article 102 of the TFEU inapplicable to mergers. The Paris Court of Appeal referred to the ECJ and asked whether a national competition authority could find that a merger constitutes an abuse of dominance, in circumstances where that merger fell below national and EU merger thresholds and where it was not referred to the EC under Article 22 of the EU Merger Regulation.

The ECJ took a stance that a concentration that was not subject to ex ante merger control because the relevant thresholds under the EU Merger Regulation and national merger control rules were not met, can be subject to ex post control both (i) on the basis of Article 22 of EU Merger Regulation, which allows national competition authorities to refer the transaction to the EC for examination, and (ii) if there is no Article 22 referral, on the basis of the prohibition of abuse of a dominant position under Article 102 of the TFEU. This is due to the supremacy of European law and the objective of European competition law to protect the internal market from distortions, i.e. Article 102 of the TFEU is the primary law, and it cannot be overridden by the EU Merger Regulation, which is secondary law. Also, the ECJ concluded that for a finding of an abuse of dominance to be established on this ground, an acquisition must substantially impede competition such that it results in the market consisting of only companies whose behaviour depends on the dominant company and mere strengthening of dominance is insufficient.

Illumina/Grail case

The Towercast case is not the first case where a transaction that does not meet the relevant merger filing thresholds was examined. The most notable case was Illumina/Grail case (M. 10188), where the EC blocked the transaction even though it did not meet merger filing thresholds under the EU Merger Regulation or under any national regulation in any member state. More precisely, this was the first time the EC has reviewed the below-threshold transaction and prohibited its implementation. Grail is a nascent company, a start-up developing blood tests for the early detection of cancer, whereas Illumina is a well-known company supplying sequencing- and array-based solutions for genetic and genomic analysis. The EC based its jurisdiction to open an in-depth investigation relying on Article 22 of the EU Merger Regulation.

Despite the ongoing in-depth investigation, Illumina closed the deal and acquired Grail. On 19 July 2022, the EC announced that it had issued a statement of objection outlining its preliminary findings that Illumina and Grail had breached the standstill provisions under the EU merger control rules and issued an interim injunction requiring Illumina to keep Grail completely separate pending the order to unwind the transaction. The parties appealed the interim measures before the General Court of the European Union and the judgment is still pending. Along with issuing its prohibition decision, the EC stated that it intends to issue a separate decision ordering the unwinding of the transaction and the restoration of Grail’s independence.

In that case, the EC concluded that “the concentration enabled and incentivized Illumina to foreclose GRAIL’s rivals, who are dependent on Illumina’s technology, from access to an essential input they need to develop and market their own tests” and that commitments offered by Illumina were not sufficient to prevent the harm to innovation. Having that in mind, it was held that the proposed acquisition may reduce competition and innovation in the emerging market for the development and commercialization of cancer detection tests based on sequencing technologies.

Regional perspective – the Western Balkans

Even though the ECJ’s stance in relation to investigations of the below-threshold transactions ex-post is clear now, it remains to be seen whether the competition authorities from the Western Balkans will adopt the same or similar approach. All the countries in the Western Balkans rely heavily on the EU rules and practices of the EC as well as on the jurisprudence of the EU courts.

What is more, the competition laws and the relevant by-laws in the Western Balkans represent by and large, blueprints of the corresponding EU legislation. Accordingly, every country in the Western Balkans has transposed Article 102 of the TFEU into its current competition law and one could argue the legal basis for investigating the below-threshold transactions, ex-post, as a potential abuse of dominant position seems to be in place. What is more, some countries in the region have explicit provisions enabling them to review transactions ex-post provided certain market share thresholds have been reached as a result of the transaction. Specifically, Article 62 of the Serbian Competition Law provides for the basis of an ex-post merger control review of implemented concentrations, if the Serbian competition authority determines that the joint market share of the parties to the concentration on the market of the Republic of Serbia amounts to at least 40% as a result of the transaction.

A similar provision is envisaged in Montenegrin Competition Law enabling the Montenegrin competition authority to order the parties to file a merger notification for a transaction that does not fulfil the merger filing thresholds, should the joint market share of the undertakings concerned on the relevant market in Montenegro exceed 60%. Although we are not aware of any cases where these provisions have been used in practice, following the latest ruling of the ECJ, they might just become used by the authorities. Some other countries in the Western Balkans have included market shares in their merger filing thresholds. For example, if the combined market share of the undertakings concerned exceeds 40% or 60% that could trigger an ex-ante merger filing obligation in Bosnia and Herzegovina and North Macedonia, respectively.

Therefore, ex-post investigations of transactions, whether through the application of the available merger control rules or through the application of the abuse of dominance rules, might come into the spotlight of the competition watchdogs more than ever, following the Towercast ruling.

Nevertheless, the competition authorities in the Western Balkans still seem to be very formalistic in applying competition rules and seem to be reluctant to develop their practice in directions that have not already become well-established EU practice. Also, they are dealing with quite a large number of merger filings due to low merger filing thresholds (which in most countries can be met by one party alone) and non-application of the “local effects” doctrine (resulting in foreign-to-foreign transactions being regularly reviewed by the competition authorities in the Western Balkans). Therefore, they are dealing with ex-ante control quite a bit.

Conclusion

Until recently, acquisitions that formally do not fulfil the merger filing thresholds were, as a rule, falling outside of the competition authorities’ powers to investigate them. However, this is now subject to a change at the EU level. The ECJ’s ruling has already influenced some of the European countries who decided to follow such practice and have commenced investigations, e.g. Italy and Belgium. Italy even went a step further – it published the Notice providing guidance for the exercise of its power to require the notification of concentrations that are below the Italian turnover thresholds.

We note that the issue for the competition authorities in the Western Balkans might be to recognize and assess the impact of such transactions. The ultimate goal should arguably be to examine not only those transactions that risk breaching formal provisions of law but also those that may negatively influence the market (most notably innovation) even though they formally do not fulfil the turnover thresholds.

Taking into account that the ECJ based its argumentation in the Towercast case, mainly, on Article 102 of the TFEU, the provision which exists in all competition laws in the countries of the Western Balkans, it can be assumed that the competition authorities in the Western Balkans have a legal basis to follow the same practice, i.e. to monitor and investigate the below-threshold transactions through abuse of dominance loupe. In applying this practice, the need for legal certainty is particularly prominent, not only from a substantive but also from a procedural perspective (e.g. the term after which a transaction should not be investigated should be clearly prescribed in order to ensure legal certainty of the transactions and legal system in general).

Therefore, the competition authorities will have to balance and carefully assess all the effects of an ex-post review while at the same time, they will have to ensure that all due process rights of the parties involved are observed. The companies, on the other hand, together with their legal advisors will have to look at their transactions more creatively now given that even the transactions falling below the prescribed merger filing thresholds may come under the investigation of a competition authority if concerns from an abuse of dominance perspective have been identified.

By Bojana Miljanovic Hussey, Partner, and Jovana Dordevic, Junior Associate, Karanovic & Partners

AP Legal has advised Raiffeisen Banka Beograd on its merger with RBA Banka Novi Sad and on the merger of CA Leasing Srbija into Raiffeisen Leasing.

According to AP Legal, “following the completion of the integration, Raiffeisen Banka has become the third-largest player in the Serbian banking market.”

In 2021, AP Legal also advised on Raiffeisen Bank’s acquisition of Credit Agricole Bank Serbia (as reported by CEE Legal Matters on August  23, 2021).

AP Legal’s team was led by Managing Partner Aleksandar Preradovic and included Consultant Maja Stojiljkovic.