Category: Serbia

NKO Partners has successfully represented Modekolo before Serbia’s Administrative Court in a competition-related dispute.

Modekolo is a Serbian service provider in the field of environmental protection.

According to NKO Partners, “the court annulled the fine previously levied against Modekolo by the Serbian Competition Commission – for alleged bid rigging – and referred the case back to the Commission for reconsideration. The court found that the Serbian competition watchdog did not substantially prove infringement of competition on the side of Modekolo and its competitors in Serbia.”

The NKO Partners team was led by Partner Djuro Otasevic and Senior Associate Benjamin Graca.

On the occasion of International Data Privacy Day (January 28), as in previous years, the Commissioner for Information of Public Importance and Personal Data Protection (“the Commissioner”) issued a publication “Personal Data Protection: Stances, Opinions and Practice of the Commissioner”. 

In the upcoming text, we will present several stances, i.e., opinions of the Commissioner published in this book with regards to the application of the Law on Personal Data Protection (“the Law”).

1.Processing the employees’ biometric data with face recognition device for the purpose of controlling and registering their working hours

While supervising the activities of personal data controller, the Commissioner established that the controller acted against the provisions of the Law and it was therefore prohibited to process the face images of employees for the purpose of their identification through the face recognition device aimed at controlling and registering their working hours. Namely, the processing of such biometric data of employees was done:

• against the provisions of Article 17 of the Law (which regulate the processing of special types of personal data);
• without legal basis;
• against the principle of data minimization; and
• without previous impact assessment of the envisaged processing activities on personal data protection and without obtaining the Commissioner’s opinion.

The controller was therefore ordered to ensure that the commission deletes all employees’ personal data collected for further processing through this face recognition device, i.e., for controlling and registering employees’ working hours, and to notify all employees whose data were collected about such deletion.

2.Personal data processing during online purchase of products

During the supervision over the activities of personal data controller, the Commissioner prohibited the controller to process certain personal data of natural persons during online

purchase of products on certain websites, notably the personal document number (ID card/passport), considering that the requirements from Article 12, paragraph 1, item 3 of the Law were not met during collection of the respective information (that processing is necessary for the purpose of adhering to the legal obligations of the controller). Namely, the purpose

of processing in this particular case was to refund money to the customer for purchased goods/services and/or quitting purchase in case of a previously paid advance, while this legal obligation of the controller arises only at the moment of refunding money to the buyer.

Therefore, the controller in this case acted against the principles of lawfulness, fairness and transparency, as well as data minimization.

3.Consent to data processing through video surveillance

In form of reply to the question (which may be addressed to the Commissioner by citizens, legal entities, associations and state authorities with regard to ambiguities in application of the Law) regarding the processing of personal data by use of video surveillance, the Commissioner assumed the position that such processing is not individually regulated by the Law, however it is necessary to observe the principles of processing and enforcement of legally established obligations.

In this sense, consent of the data subject is one of possible legal grounds for processing, which implies voluntary, established, informed and undeniable expression of will of such person, whereby the person consents to the processing of his/her personal data by statement or clear affirmative action. The person shall be authorised to withdraw consent at any moment, which right he/she shall be informed of before giving consent. While estimating whether the consent for personal data processing was given freely, one must particularly pay attention to whether the execution of contracts, including service rendering, is conditioned by giving consent that is not necessary for its execution.

Consent can therefore be a proper legal basis for processing only if the statement of will of the data subject meets all requirements prescribed by the Law.

4.Transfer of data to the US

According to the clarification given in form of answer of the Commissioner to the question posed, standard contractual clauses established by the Commissioner in accordance with the Law represent one of the possible ways of ensuring appropriate measures for data protection during their transfer to another state, to a part of its territory or one or more industrial sectors in that state and/or international organisation, but only when it refers to relationship between controller and processor.

In other words, they are not applicable to transfer by controller to another controller, considering that the domestic law, unlike the GDPR, does not recognise this type of standard contractual clauses.

5.Processing data from criminal records

Finally, the Commissioner took the position – again as the answer to the question – that legal basis for personal data processing that is necessary for the purpose of adhering to the controller’s legal obligations (in terms of Article 12, paragraph 1, item 3 of the Law) needs to be specified in law, wherefore processing of personal data referring to criminal judgments and offences and safety measures (including insight into such data) would be lawful provided that it is necessary for execution of special legally envisaged obligations of the controller.

Namely, Article 19, paragraph 1 of the Law prescribes that processing of personal data that refer to criminal judgments and offences and safety measures shall be done on basis of Article 12, paragraph 1 of the Law (i) only under the supervision of competent authority or (ii) if the processing is permitted by law, with application of appropriate special measures for protection of rights and freedoms of the data subjects. According to Article 12, paragraph 1, item 3 of the Law, processing shall be lawful if it is necessary for the purpose of observing the controller’s legal obligations.

By Ivana Ruzicic, Partner, and Lara Maksimovic, Senior Associate, PR Legal

Since the beginning of the war in Ukraine, 219,153 Russian citizens have immigrated to Serbia. In contrast, over the past year, more than four thousand Russian entrepreneurs and companies have been established in Serbia.

In response to the newly emerging market circumstances, the Government of Serbia adopted the Decree on the criteria for awarding incentives to employers who employ foreign nationals in mid-June of last year. Under the conditions defined by the Regulation, for each employed foreigner, employers can obtain subsidies of 70% of the paid salary tax and 100% of the paid contributions for the Republic Fund for Pension and Disability Insurance.

One of the primary criteria for awarding incentives is that the employer and the foreign citizen conclude an employment contract for an indefinite period, with a monthly salary of at least 300,000 dinars. However, this type of engagement is not following the Labor Law, which stipulates that an employer with a foreign citizen can only establish an employment relationship for a certain period for the validity of the work permit issued to the foreigner.

Since the provisions of the Labor Law have a more vital legal force than the Regulation, the question of the practical scope of the Regulation itself is justified. The creator of the Regulation did not think to read the provisions of the Labor Law beforehand or at least consult with the relevant Ministry before the Regulation was adopted.

In light of such circumstances, the Ministry of Labor issued an official opinion on this topic at the request of an employer who hired Russian citizens in February of this year. In its opinion, the Ministry notes that a foreigner can establish a working relationship for a fixed period but that a public discussion is underway on the amendments to the Law on the Employment of Foreigners, which will stipulate that the employer can conclude an employment contract with a foreigner for an indefinite period.

Only after the entry into force of the changes mentioned above will employers be able to legally employ foreigners indefinitely and apply for the award of incentives provided for in the Regulation. In the meantime, may the creator of the Regulation think of passing a new regulation?

By Kristina Pavlovic, Senior Associate, SOG Law Firm

NKO Partners has advised the Dr. Max Group on its acquisition of the Belgrade-based Beolek pharmacy chain.

The Dr. Max Group is a Prague-headquartered pharmacy chain operating in Central and Eastern Europe. The company has over 2,200 pharmacies in six countries, including the Czech Republic, Slovakia, Poland, Romania, Serbia, and Italy.

Earlier this year, NKO Partners also advised the Dr. Max Group on its acquisition of the Cvejic pharmacy chain in Serbia (as reported by CEE Legal Matters on January 31, 2023). 

The NKO Partners team was led by Partner Djordje Nikolic and Senior Associate Branko Jankovic.

Zivkovic Samardzic, working with Milbank, has advised the shareholders of Eurobank Direktna Beograd on its sale to AIK Banka Beograd. Schoenherr and Holman Fenwick Willan advised AIK Banka.

The transaction remains contingent on regulatory approval. Closing is expected in 2023. 

According to Zivkovic Samardzic, “Eurobank Direktna is headquartered in Belgrade and operates through four primary segments: retail banking, corporate banking, small business banking, and digital banking, and holds a market share of 6% in terms of total assets. It currently employs approximately 1,600 employees, operates 98 branches, and has a balance sheet size of EUR 2.4 billion. Eurobank Direktna [was] majority owned by Eurobank Holdings (70%) and former Direktna Banka shareholders (30%).”

According to Schoenherr, “the combination of AIK Banka and Eurobank Direktna will create the second-largest banking operation in the country,” with Zivkovic Samardzic reporting that “the combined bank would have attained an over 13% market share in total assets, with over EUR 4 billion in deposits and a strong capital base of more than EUR 800 million (as of September 2022).”

Zivkovic Samardzic, Milbank, and, reportedly, Schoenherr had also advised on the merger of Eurobank with Direktna Banka two years prior (as reported by CEE Legal Matters on July 13, 2021).

The Zivkovic Samardzic team included Partners Branislav Zivkovic, Igor Zivkovski, Sava Pavlovic, and Uros Djordjevic.

The Schoenherr Serbian office of Moravcevic Vojnovic and Partners team included Partners Matija Vojnovic, Vojimir Kurtic, and Dusan Obradovic.

Editor’s Note: After this article was published, Kinstellar announced it had advised AIK Banka on the competition law aspects of the EUR 280 million acquisition. The firm’s team was led by Special Counsel Olga Sipka and Senior Associate Aleksandra Stecuk.

Fashion house Christian Dior Couture (“Dior“) filed in 2021 to the EU Intellectual Property Office (“EUIPO“) an application for registration of 3D shape of bag of this designer house – so-called Saddle bag as trademark within class 9 (mainly referring to eyeglass and phone cases) and class 18 (various handbags). EUIPO partly refused the application stating that the form of the bag lacked distinctiveness and that this bag is practically one of many in the world market.

Saddle bag phenomenon

Saddle bag was designed in 1999 by John Galliano for Dior’s 2000 spring collection and it has recently been reintroduced into the world market in various shapes and colours. Over the years, this bag was a choice of many world celebrities and the recognisable shape of this bag found its place on the covers of many magazines, however the EUIPO found that references of this type were not a sufficient parameter for registration of 3D shape of a bag as trademark.

First instance procedure

In the first instance, EUIPO partly refused the application of this designer house stating that the shape of Dior’s Saddle bag is typical for the type of goods that its registration is applied for and that the result of such typicity is lack of distinctiveness, which represents one of the conditions for trademark registration. The stated authority further argued its position stating that consumers would not rely on the shape of such product as an indicator during purchase, as they would rather rely on the shape of product in combination with other factors such as words or logos – in this case Dior’s name.

Given the lack of distinctiveness of the product, the shape of the Saddle bag is, according to EUIPO, a mere variant of other forms of handbags available at the market and, although this shape of bag has functional purpose in terms of objects storage, it cannot represent a distinctive mark.

Action upon Dior’s appeal

Dissatisfied with the refusal, Dior appealed to EUIPO’s Board of Appeal referring to successful registration of 3D shape of lipstick case by cosmetic brand Guerlain in 2021, and presented, among other, the following argumentation:

the examiner inaccurately understood the nature and category of target consumers – Dior claimed that consumers in the world of luxurious fashion are more discerning than other consumers and that they will “show high or above average level of attention”;
the handbag shape differs from other luxurious designer products in class 9 and 18 that are sold by other luxurious fashion companies, referring to below listed bags designed by Chanel, Louis Vuitton and Hermes;
the shape of the bag resembling a horse saddle had not been used in the market of luxurious handbags before designer John Galliano.
Nevertheless, even the above statements of Dior that found their place in the appeal did not convince the Appeal Board of EUIPO to revert their decision and fully accept the application for trademark registration. They stated that mere departure from the norm is not sufficient for a mark to be considered distinctive; only the marks that “significantly” depart from the norms for certain type of products in the field of fashion accessories can be registered according to the provisions of the EU Trade Mark Regulation – EUTMR.

Trend of product shape protection as trademark

The fact that “Dior case” attracted attention of consumers and designers in the fashion world, both owing to distinctiveness and popularity of Saddle bag among consumers and due to other possible procedures that may be instituted by Dior’s competitors for protection of 3D shape of handbag as a trademark.

Companies that manufacture consumer goods in the fashion world have been attempting for long to register unusual trademarks relating to their products, however EUIPO usually rejected this type of trademark applications, e.g. protection of Moon Boot shape (Tecnica Group), Damier Azur pattern (fashion company LVMH), sole pattern of Birkenstock products and the position of mark on Buffalo Boots.

Conclusion

When we noted that Dior’s application was partly rejected in this procedure, we meant to say that the protection of 3D shape of Saddle bag as trademark was successful in class 9 that refers to glasses and phone cases, while it was lacking even after the second appeal to the Board of Appeal of EUIPO for protection in class 18 that refers to different types of handbags.

Notwithstanding the public opinion on this matter, it is questionable whether Dior would have been more successful in registration of 3D shape as trademark had it added, prior to application, some elements in 3D shape that are Dior-specific and that are already on the Saddle bags that are being sold, such as strips, initials or logos, particularly considering the approval of application filed by fashion company Pierre Balmain S.A for registration of 3D shape of bag as trademark, but which shape, unlike the 3D shape of the Saddle bag, has a specific letter B imprinted on the front of the bag.

By Sara Necic, Senior Associate, PR Legal

NSTLaw Stankovic and Partners has been appointed as the official representative for NYSE-listed technology company PAR in Serbia in accordance with the country’s law on personal data protection.

The PAR Group is a US-based group that includes technology companies PAR Technology Corporation, ParTech, Punchh, AccSys, and PAR Payment Services.

According to NSTLaw, Serbia’s Law on Protection of Personal Data stipulates that “foreign companies providing goods and services in Serbia now need to designate a personal data protection representative in the country. Failure to do so could result in significant penalties for the company concerned, as well as for the responsible person within that company. This appointed representative may then handle all queries from the Commissioner for Information of Public Importance and Personal Data Protection and others on matters arising in relation to the company’s processing of personal data in order to ensure full regulatory compliance.”

NKO Partners has advised CTP on its acquisition of Vojvodina-based land developer BIMS Properties.

CTP is an Amsterdam-headquartered industrial and logistics parks developer and manager.

NKO Partners previously advised CTP on its acquisition of almost 33 hectares of land in Simanovci from EBP Development (as reported by CEE Legal Matters on September 20, 2022).

The NKO Partners team included Partner Djordje Nikolic and Senior Associates Andjela Mirkovic and Luka Aleksic.

The energy crisis and rising costs are not the primary driver but have certainly accelerated discussions on energy sustainability. Responsible companies and real estate developers are already implementing construction strategies that enable energy sustainability and qualify for certificates such are LEED and BREEM. As the market is turning greener, real estate developers are motivated to do so: it increases the demand, secures financing, and provides an overall better company image.

But what about old buildings?

Either built before there was awareness of the need for energy savings or just losing the battle with time, old buildings maintain energy spillage, which decreases the positive outcome of green energy initiatives and projects. When we include the data that up to 70% of buildings are estimated to be energy inefficient, the problem is far from insignificant.

Relying on the awareness and, more importantly, the financial capacity of single homeowners to renovate and improve the building efficiency would likely result in a negative outcome on a short deadline. This problem requires top-down measures, and Serbia has made the first steps, as it concludes two substantial loans with this purpose.

The first is a loan agreement to finance a new energy efficiency project concluded with the International Bank for Reconstruction and Development (“IBRD”) as a part of the World Bank. The IBRD has agreed to lend Serbia $44,900,000 to help with this project. The project contains two segments: (i) financing energy efficiency, sustainable heating, and rooftop solar investments and (ii) technical assistance and implementation support. The project will finance and support eligible owners of family households and flats to implement measures such as replacing windows and doors, roof and ceiling insulation, wall insulation, boiler replacement, heat network renewal, and purchasing heat pumps. The project will also provide technical assistance by informing policy, legal and regulatory development; providing training and technical assistance to local self-government units; conducting outreach activities to promote energy efficiency; and conducting technical studies.

On the institutional end, Serbia will have to establish a Project implementation unit (“PIU”) which will overlook the project’s overall coordination, implementation, monitoring, and evaluation. Also, Serbia will establish the Central Fiduciary Unit (“CFU”), which will provide financial management and procurement support to the PIU. Finally, Serbia will establish a Steering Committee, which will be responsible for the coordination and strategic guidance functions.

The other source of financing came from the European Bank for Reconstruction and Development (“EBRD”) and the EU, which granted a 14 million euro financial package to renovate public buildings. The package comprises a 12-million-euro loan from the EBRD, and a 2-million-euro grant from the EU.

This program will impact 80 public buildings in 20 municipalities in Vojvodina, the Serbian northern autonomous province. The buildings, including administrative buildings, cultural spaces, sports, education, and healthcare facilities, will have thermal insulation, new windows, upgraded heating, ventilation, cooling systems, and energy-efficient lighting.

Since buildings account for around 34% of energy consumption in Serbia, renovations can help lower consumption and CO2 emissions. These improvements are estimated to account for a primary energy reduction of 53% and annual CO2 emission reductions of 56%.

With the implementation of energy efficiency upgrades and the financing of sustainable energy solutions, Serbia is following good practices and shows determinacy and focus on sustainable energy solutions.

By Miloš Petaković, Senior Counsel, Gecic Law

Former Senior Associate Bojana Javoric Micovic has been promoted to Partner at Jankovic Popovic Mitic.

Javoric Micovic specializes in corporate and M&A and has been with the firm since 2016, having first joined as an Associate. She was promoted to Senior Associate in 2017. Before joining the firm, Javoric Micovic was a Legal Trainee at the Cvetkovic Skoko & Jovicic Law Office, from 2014 to 2016, and at Djordjevic & Associates in 2014.

“We are delighted to have Bojana as JPM’s new Partner,” JPM Senior Partner Nenad Popovic commented. “She is a fantastic lawyer with an excellent academic record, and she brings a unique blended skill set to JPM’s Corporate Department. Bojana is popular with both clients and colleagues, and she will be a great asset to the firm, both now and in years to come.”