Category: Serbia

Ministry of Mining and Energy published on 21st January, long awaited draft of the Amendments to the Renewable Energy Sources Act (RESA) with purpose to push forward further investments in RES sector by creating better legal framework for development of new projects.

Initial adoption of the RESA was welcomed by the investors with high enthusiasm, skyrocketing the number of requests for securing connection to the transmission grid to 17,000 MW of new capacities (in comparison total installed capacity of Republic of Serbia at the moment is 8,000 MW) which led in the end to the suspension of all new procedures by EMS.

The main argument for this was that number of requests has led to the endangerment of the stability of transmission system of Republic of Serbia, as well position of guarantee producer EPS due to several very controversial solutions of the RESA including obligation of the EPS to bear the balance responsibility in full for all renewable energy producers, and right to priority access to transmission/distribution system for each renewable energy producers.

This initiated the discussion between key stakeholders Ministry of Mining and Energy, EMS and EPS which led to the draft of the proposed amendments.

The public debate will be opened until 9th February, and all interested parties can provide their suggestions to the Ministry of Mining and Energy on the e-mail oie@mre.gov.rs. Most important changes to the RESA include:

1.EPS (guaranteed supplier) will bear balance responsibility only for the RES power plants with incentives

The biggest change introduced by the Amendments to RESA is that EPS will bear balancing responsibility only for the power plants which receives incentives in form of market premium and feed in tariffs. Other producers will have to regulated their balance responsibility in accordance with the Energy Act and operating rules of electricity market.

Market Premium users will pay for balancing services to EPS a percentage of the offered price per produced MWh.

2. Organization of Auctions

Ministry of Energy will be now in charge with determining the maximum price for the auctions and feed in tariffs per MWh instead of Energy Agency of the Republic of Serbia. The idea is to centralize the auctions process in one authority instead of two for the sake of efficiency.

3. Priority Access to Transmission/Distribution/Closed Distribution System compiling a ranking list and filling the quota

Priority access to the transmission, distribution and closed distribution system is now limited only for small power plants up to 400 kW for the beginning, and from 1st January 2026 up to 200 kW. This was implemented to harmonize RESA with EU standards for priority access.

4. Request for additional capacities

Most controversial provision of the proposed amendments act is right of the EMS to request from the developers to secure additional capacities on the territory of Republic of Serbia capable to provide system services of regulation of frequencies and power exchange, as precondition for connection of power plant to the transmission system. EMS can request additional capacities in the event if it estimates that connection of the new RES power plant could endanger functioning of electro-energy system of Republic of Serbia, and includes conventional sources, and batteries.

5. Limitation of prosumers to 10MW of capacity

Considering the number of transmission connection requests, the Ministry of Energy and Mining has decided to propose limiting prosumers to the distribution grid exclusively, hence stipulating that maximum installed power of prosumer is 10MW.

This text is for informational purposes only and should not be considered legal advice.

By Nemanja Providzalo, Senior Associate, SOG Law Firm

In December, the European Commission (“Commission”) issued a Statement of Objections (“SO”) to Facebook’s parent company Meta Platforms Inc. The Commission said that based on its preliminary view, Facebook had violated EU antitrust rules by distorting competition for online display advertising on social media linked to Facebook Marketplace.

Marketplace, which Meta launched back in 2016, is a virtual place for Facebook users to discover, buy and sell just about anything, from vehicles, clothes, books, smartphones, and even property, within their local social community.

The Commission’s preliminary theory of harm presented in the SO concludes that Meta abused its dominating positions in the two ways described below.

First, Meta ties its online classified ads service Facebook Marketplace with its dominant personal social network Facebook. Facebook users can’t opt in or out of the program and have automatic access to Facebook Marketplace. The Commission is concerned that competitors of Facebook Marketplace may be facing foreclosure as the tie gives Facebook Marketplace unfair leverage over its peers that they cannot match.

The second is regarding Facebook’s advertising business. When competing online classified ad providers advertise on Meta’s platforms (Facebook or Instagram), Meta unilaterally imposes unfair trading terms.

Also, Commission is concerned about the terms and conditions, which authorize Meta to use ads-related data from competitors to benefit Facebook Marketplace. According to the Commission, the only beneficiary of that arrangement is Facebook Marketplace.

In its official statement, the Commission called this practice “unjustified, disproportionate and not necessary for the provision of online display advertising services on Meta’s platforms.”

The Commission and the UK Competition and Markets Authority (“CMA“) announced in June 2021 separate but cooperative initiatives to assess whether Meta was abusing its dominant market position by utilizing data from its social network to obtain unfair advantage over competitors in the online classified ads space. The Commission is now following the CMA’s initiative in pursuing its case against Meta, as CMA did in August this year.

Issuing a company with the SO is a formal stage in the EU competition probes and does not prejudicate the conclusions of a probe. Before the Commission decides on the charges, the Silicon Valley social media giant may submit a written defense and request a closed-door hearing. However, if the Commission still determines that there is enough evidence of a breach after a company has presented its response, it may be forced to amend its business practices or pay a fine of up to 10% of its annual global turnover. For Meta’s $118 billion in revenues in 2021, this may result in a fine of up to $11.8 billion.

The news that Meta is under the scrutiny of competition authorities worldwide is no longer a surprise, but this is the first time that the EU accused Meta of abusing its dominating position. Five years ago, Meta was fined €110 million by the EU for failing to provide accurate info during the EU’s merger review of the WhatsApp acquisition.

This SO comes just two months after Meta was ordered to sell animated images platform Giphy GIFs by CMA. Despite Meta’s attempt to overturn the decision, the CMA stood by its decision in October 2022, concluding that Meta might strengthen its already considerable market position by preventing or restricting access to Giphy GIFs on other social media platforms, which would drive users to Meta-owned websites. This means Meta will have to unwind the acquisition worth around $400 million.

By Milica Novakovic, Nikola Ivkovic and Vasilije Boskovic, Associates, Gecic Law

Vulic Law has advised the Soracom Corporation LTD on the Serbian IoT market.

Based in the UK, Soracom is a global provider of smart Internet-of-things connectivity offering cloud-native wireless service.

No additional information was provided.

CEELMDirect Profile Pick: A series of interviews with partners and firms with Premium profiles on the CEELMDirect legal directory. Today’s interview: Igor Zivkovski, Partner at the Zivkovic Samardzic Law Office in Belgrade.

CEELMDirect: Hi Igor, and thanks for taking the time to speak with us.  Let’s start at the beginning: What led you into the law in the first place?

Zivkovski: University usually begins at a time of ignorance about life and great interest in sports. I liked to win in sports and, at that time, I saw law as a competition in which I would be able to satisfy that need. Time has shown me that law is only in rare situations a competition, and that this element is not that important, but I am glad that my choice at that time fit well with my subsequent knowledge about life, which came much later. I have never regretted that choice and I am proud of it.

CEELMDirect: What was your favorite course and professor in law school and why?

Zivkovski: It is fascinating how personality and interests change over time. Although now my primary focus is Corporate Law, at that time I was most interested in legal and political topics, as they combined my three main interests – law, politics, and history – so my favorite course was Constitutional Law. I would not be able to single out one professor from the University of Belgrade Faculty of Law as my favorite, since there were many of them who incorporated their values and knowledge into my personality – for which I am immensely grateful – but it is an honor and a privilege for me that through my work I have had the opportunity to associate with Professor Milos Zivkovic, whose style is special in its combination of exceptional academic knowledge and a practical approach.

CEELMDirect: How would you describe your job? What is it, at a fundamental level, you do for your clients? 

Zivkovski: What I try to do – and I hope I succeed – is to bring my clients a sense of peace and tranquility and the knowledge that there is someone who really cares about their problems and needs. I do not believe in work-life balance in the legal profession. On the contrary, I believe that a reliable lawyer must be available to their clients at all times and that legal practice is a way of life, not a job. It is precisely because of such closeness that many of my clients have become my friends over time, which I am very proud of. 

CEELMDirect: Do you personally participate in any ongoing or annual volunteering or charitable activities? Which ones, and why? 

Zivkovski: As a lawyer, I believe most in the power of the word. Words are what can completely change the course of events, any misfortune, someone’s life, in the end. My volunteering activity is aimed in that direction: Before every Christmas, I write an anonymous letter to someone who I believe that with a little motivation can move towards success and joy, even though they are currently in difficult circumstances, and I describe what kind of life they can live if they work on it. I also send a letter with a gift to an institution where children without parental care are placed. I encourage everyone to do the same – it is real magic, that can make the world full of kind and successful people.

CEELMDirect: What’s your favorite book or movie about the practice of law, and why?

Zivkovski: I am not sure whether it can be considered a book about legal practice, but a novel that is very important to me is Franz Kafka’s The Trial. As part of compulsory reading in Gymnasium, in my most sensitive years, I remember being amazed by the fate of a small man against big and invisible laws, and my power, as I experienced it then, was precisely in mastering legal norms and integrating into that system. The most interesting thing is that even after so many years of practicing law, I do not think that I have mastered legal practice enough and there are still a lot of new things to learn, which keeps me curious and motivated.

 CEELMDirect: Thanks, Igor. And continued success in the months and years to come!

In the past few months, the vibrant IT sector has been rapidly developing in Serbia, with the emergence and growth of highly digitalized companies at the forefront, according to Cvjeticanin & Partners Managing Partner Nenad Cvjeticanin.

“The IT sector has seen a significant increase in development in recent months,” Cvjeticanin begins. “This growth is largely related to the conflict between Ukraine and Russia, as many IT specialists from those countries have come here to avoid the war and sanctions and start their own businesses. We frequently see teams of 15 to 30 people coming in large numbers, often with families.” According to him, last year, an estimated 100,000 new people arrived in the country.

“This is a new area of focus for the legal sector, as we are now dealing not only with IT law, but immigration law-related issues to support these people,” Cvjeticanin notes. “While we are not taking sides in the conflict, our main focus is providing support for those affected by it, and helping them with immigration and other related issues.”

Additionally, Cvjeticanin notes that personal data protection has been a notable factor under these new circumstances. “This is a significant concern for many software applications that are focused on personal data processing,” he points out. “In fact, up to 60% of these new highly digitalized companies’ work is related to developing apps which process personal data, as large companies need this kind of data.” For example, he notes, “marketing companies frequently rely on targeted ads, which requires consent from consumers and other measures to comply with the GDPR requirements.”

Cvjeticanin also highlights that more and more people are now relying on cryptocurrencies. “After the war, there has been a huge question regarding how to move money, as many people from Russia cannot rely on traditional methods such as money transfer via banks, due to the restrictions.” As a result, he says, “they have turned to using cryptocurrency as a way to move money. For example, they buy crypto in Russia and when they come to Serbia they sell it in a decentralized manner to avoid obstacles.”

According to Cvjeticanin, the government has recognized this migration trend and its potential benefits. “Serbia currently has a very favorable tax policy. Additionally, there are various incentives that are offered, which makes Serbia an interesting destination for IT investors from all over the world. This is particularly the case for digital nomads, who are coming to Serbia because of the favorable tax policy and incentives in the IT sector,” he notes.

NKO Partners has advised the Dr. Max Group on its acquisition of the Cvejic pharmacy chain in Serbia. Bajic & Popovic reportedly advised the seller.

The Cvejic pharmacy chain comprises 66 pharmacies in Serbia, including Vojvodina, Belgrade, and Nis. According to NKO Partners, after this acquisition, Dr. Max now owns close to 300 pharmacies in Serbia.

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 AU Medis Lek (as reported by CEE Legal Matters on January 6, 2023). 

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

Gecic Law Head of Operations and Co-Head of the ESG practice Hristina Kosec has been promoted to Partner.

Specializing in ESG, private equity, and TMT, Kosec has been with the firm since 2019, having first joined as an Operations Manager. She was promoted to Head of Operations in 2020 and appointed a Co-Head of the firm’s ESG practice in 2021 (as reported by CEE Legal Matters on October 11, 2021). From 2018 to 2019, Kosec was the Head of the Partnering Team at Vip Mobile and A1.Slovenija. Earlier still, she spent over eight years at Vip Mobile from 2008 to 2016, having first joined as Head of Billing and Collection, and being promoted to Director of Billing and Collection in 2012, and Product Marketing Director in 2015.

“I am excited beyond words, and I am sure I speak for the entire team by saying that Hristina’s appointment is more than well deserved,” Gecic Law Founding Partner Bogdan Gecic commented. “Her incredible passion, positive energy, and genuine commitment have been a continuous source of inspiration for us all. Her contribution to practically everything we do and are today has been extraordinary, and we all owe her a huge debt of thanks. Hristina joining the partnership tips the balance favoring female leadership in the firm. I hope that as we continue to expand, we will welcome many more, remaining true to our ideal of a true corporate meritocracy.”

“It is an incredible honor for me to make Partner in the fastest-growing law firm in the region,” Kosec added. “I am also humbled as an individual who cannot achieve much without the support of a team. Moving forward, we will continue to focus on the latest global legal developments and how they impact the businesses of our local, regional, and international clients.”

Cvjeticanin & Partners has successfully represented Tehnomedia in disputed trademark registration proceedings before Serbia’s Intellectual Property Office.

Tehnomedia is a Serbian technology retail company.

“The Serbian IP office has registered two Tehnomedia trademarks, one solely in the word and the other combined word and logo,” Cvjeticanin & Partners informed. “The registration was opposed by [another] Serbian technology retail company – Tehnomanija – holding a similar older trademark Tehnomedia, claiming that Tehnomedia’s trademark is ‘confusingly similar’ to the relevant market.”

According to the firm, “the Serbian IP Office rejected the claims of company Tehnomanija and registered these two Tehnomedia trademarks on the grounds of prior fair use and finding that the different colors in the use of these confronted trademarks are important in the context of similarity.”

The Cvjeticanin & Partners team included Managing Partner Nenad Cvjeticanin and Partner Marija Cvjeticanin.

Harrisons has advised the EBRD on its EUR 12 million unsecured loan to the Autonomous Province of Vojvodina, in Serbia, for the financing of the implementation of energy efficiency measures in around 80 public buildings in 20 municipalities.

“The buildings are predominantly from the educational, administrative, and healthcare sectors,” Harrisons informed. “The project will be co-financed by an investment grant of EUR 2 million provided by the EU under the Regional Energy Efficiency Program for the Western Balkans.”

According to the firm, “the funding of this project will primarily help promote a green transition quality as it facilitates energy efficiency renovation of public buildings, contributing to mitigating climate change. The project is expected to result in around 53% of savings in total energy consumption, 56% of savings in carbon dioxide emissions, and significant health and environmental benefits.”

The Harrisons team was led by Principal Mark Harrison and Consultant Ines Matijevic-Papulin and included Associates Mina Zeljkovic and Aleksandar Jovicevic.

Petrovic Legal has advised Hefestos Capital on its acquisition of TMK Europe from undisclosed sellers.

TMK Europe is the majority shareholder of European pipe manufacturer TMK Artrom. Artrom is a seamless steel pipes manufacturer in southern Romania.

Hefestos Capital is an investment banking company in Southeast Europe.

The Petrovic Legal team was led by Partner Stefan Petrovic.

Editor’s Note: After this article was published, Petrovic Legal announced that the seller was PAO TMK, a Russian company. 

“Despite the sanctions against Russia and Russian entities, we managed to find a way to conclude the sale and purchase agreement with the Russian entity in the European Union (Germany) in a legal manner and in accordance with the directives of the European Union and fulfill the obligations from the SPA fully,” Petrovic Legal reported.