Category: Serbia

Government of the Republic of Serbia adopted the Regulation on Criteria for Granting Incentives to the Employers who Employ Newly Inhabited Persons in the Republic of Serbia (hereinafter referred to as the “Regulation”),  published in the Official Gazette of the RS no. 67/22 and entered into force on 18 June 2022. 

Pursuant to the provision of the Regulation, employer who employs certain category of employees is entitled to refund of 70% of paid tax as well as to refund of 100% of paid mandatory pension and invalidity security. 

To be eligible for this incentive, employer must execute full time employment agreement for indefinite period with a person who, in the last 24 months before execution of the employment agreement, has not resided in the Republic of Serbia more than 180 days. Furthermore, the incentive may be applied only if the employee has salary of RSD 300.000,00 (cca. 2.550,00 EUR) or more. It is worth mentioning that incentives may be granted for both domestic and foreign employees. 

The employer is considered to be a domestic or foreign natural person i.e., a legal entity or an entrepreneur registered to perform activities in the Republic of Serbia, as well as a branch and representative office of a foreign employer registered to perform activities in the Republic of Serbia. 

At the moment of application for this incentive, employer must have the same (or more) number of employees with employment agreement for indefinite period as on the date of entering into force of the Regulation. Additionally, employer may apply for incentives only for the surplus of incentive eligible employees (positive difference between the number of employees on the date of application for incentive and number of employees on the date of entering into force of the Regulation). In case employer is established after 18 June 2022, it is deemed that he had no employees at the time of entering into force of the Regulation. 

The employer applies for incentives with the Ministry of Economy once a year in the period between 15 September and 30 September. Incentive period starts from 01 July 2022 and ends on 31 December 2028. This means that one employer may submit total of 8 applications for incentives. Each employer is entitled for a maximum 60 months of incentive period. When applying for incentive, application may encompass up to 12 months preceding the date of application. 

Prohibition to pay dividends from the refunded tax and mandatory pension and invalidity security is introduced. In other words, employer may pay dividends only from the part of the profit that exceeds the refunded amount. Otherwise, employer loses granted incentives and must return all received benefits. 

By Marko Mrdja, Senior Associate, JPM Jankovic Popovic Mitic

Harrisons has advised the EBRD on a senior unsecured loan amounting to EUR 8 million for on-lending to eligible women-led small and medium-sized enterprises.

According to Harrisons, the loan is in line with the criteria under the Western Balkans Women in Business Program Phase II.

“This is the fifth successive loan to Banca Intesa Belgrade under the Western Balkans Women in Business Program, following the full and successful utilization of the previous facilities,” the firm added. “The proceeds of the loan will contribute to women’s economic inclusion by supporting women-led small and medium-sized enterprises’ access to finance and business advisory services.”

Banca Intesa Belgrade has been present in Serbia for more than 15 years and has a network of 147 branches throughout the country.

Harrisons’ team was led by Principal Mark Harrison and Consultant Ines Matijevic-Papulin and included Associate Mina Markovic.

Harrisons has advised the EBRD on a EUR 15 million loan to UniCredit Leasing Serbia for on-lending to small and medium-sized enterprises in the country.

“This credit line will enable extending of leasing financing to private companies in Serbia, encouraging them to invest in high-performance standards, technologies, and services, enabling them to become more competitive and energy-efficient,” Harrisons announced.

According to the firm, “the credit line is part of the EBRD’s new Reboot program, which supports the recovery of small businesses from the slowdown caused by the pandemic. It will also help spread the green economy in Serbia by promoting investment in improving energy efficiency. About 70% of the program’s funds will be allocated for investments in energy-saving and green technologies, while the rest will support investments in automation, increased productivity, product quality, and safety.”

Operating in Serbia since 2004, UniCredit Leasing provides services for residents and local enterprises, as well as large and international companies.

The Harrisons team was led by Principal Mark Harrison and Consultant Ines Matijevic-Papulin and included Associate Mina Markovic.

On 7 April 2022, the Constitutional Court of the Republic of Serbia published on its website a statement that, at the 5th session of this court, held on the aforesaid date, among other matters, it has determined that the provision of Article 281, paragraph 3. of the Law on Misdemeanours (Off. Gazette of RS no. 65/2013, 13/2016, 98/2016 – the CC decision, 91/2019 and 91/2019 – other law) (“the Law”) is not in accordance with the Constitution and ratified international treaty.

Unconstitutional provision

The provisions of Article 281, paragraphs 1. and 2. of the Law, which govern submission of a request for reopening of the procedure, as an extraordinary legal remedy in misdemeanour proceeding, stipulate that the subject request may be filed by convicted person, as well as – in its favour – by persons stated in the provision of Article 259, paragraph 3. of the Law (its spouse, blood relative, brother, sister, legal representative, adoptive parent, adoptee, foster parent, or a person with whom it lives in an extramarital union or another permanent community). The request concerned may be submitted within 60 days from the day when the party learned of the existence of facts and circumstances which, pursuant to the provisions of Article 280, paragraph 1. items 1-6) of the Law, represent grounds for reopening of the procedure.

Pursuant to the provision that has been declared unconstitutional by the respective decision of the Constitutional Court, which is included in the said Article 281, paragraph 3. of the subject regulation, the request for reopening of the procedure cannot be submitted after the expiration of two years from the day when the decision with respect to which the subject request is filed became final.

Publication of the decision

According to the statement, the Constitutional Court postponed the publication of the said decision in the Official Gazette of the Republic of Serbia for six months from the day of its adoption.

Unconstitutionality of general acts

As a reminder, in accordance with provisions of articles 50-65 of the Law on the Constitutional Court (Off. Gazette of the RS No. 109/2007, 99/2011, 18/2013 – decision US, 103/2015 and 40/2015 – other law), one of the competencies of the Constitutional Court is a conducting of the procedure for review of constitutionality and legality of general acts (so-called normative control), i.e., deciding on the aforesaid.

This is a subsequent control of the constitutionality of a law, i.e., constitutionality and legality of other regulations and general legal acts, whereby, in accordance with the provisions of Article 66 of the said law, the Constitutional Court may assess the constitutionality of a law even before its promulgation.

When the Constitutional Court finds that a law, statute of an autonomous province or local self-government unit, other general act or collective agreement is not in accordance with the Constitution, generally accepted rules of international law and ratified international treaty, such law, statute, other general act, or collective agreement ceases to be valid on the day the decision of the Constitutional Court is published in the Official Gazette of the Republic of Serbia.

This article is to be considered as exclusively informative, with no intention to provide legal advice. If you should need additional information, please contact us directly.

By Lara Maksimovic, Senior Associate, and Danica Nikitovic, Junior Associate, PR Legal

Data Protection Officer (“DPO”) is a person overseeing a company’s data protection strategy and implementation in order to ensure compliance with General Data Protection Regulation (“GDPR”) requirements. Any company that processes or stores personal data is recommended to appoint a DPO.

The Serbian Act on Personal Data Protection (“DPA”) has not defined in detail what the specific qualifications should be, in terms of required professional knowledge, experience, etc. It hasn’t defined the manner in which these criteria should be determined either. However, it is indubitably that the DPO has to be a person with adequate knowledge, expertise and experience with issues prescribed by the DPA and GDPR.

The obligations of the DPO, as defined by the DPA, are the following:

• to inform and advise the controller or the processor and employees who carry out the processing of their obligations;
• to monitor the application of the DPA and other laws and internal regulations related to the protection of personal data. This includes dealing with issues of responsibility-sharing, raising awareness, and training all employees involved in processing operations, as well as controls;
• to provide advice where requested regarding the data protection impact assessment and monitor its performance;
• to represent a contact point for cooperation with the Commissioner, and consult with him on issues related to processing, including informing and obtaining the opinion of the Commissioner. 

Right or Duty to Designate the DPO?

According to the DPA, designating a DPO is the obligation of all public authorities that act as controllers and processors, except for courts acting in their judicial capacity. Furthermore, the controller and the processor must designate the DPO in any case where:

• the core activities of the controller or the processor consist of processing operations which, by their nature, their scope, and/or their purposes, require regular and systematic monitoring of data subjects on a large scale; and
• the core activities of the controller or the processor consist of large-scale processing of special categories of data or personal data related to criminal convictions and offences.

In other cases, the controller and the processor certainly have the right, i.e., the possibility to determine the DPO.

Also, the DPO may be important for both the controller and the processor, as well as the persons to whom the data relates to – based on the fact that there will be a person with adequate knowledge, expertise, and experience who will manage personal data processing. Thus, in order to ensure the protection of personal data, it is recommended that each controller and processor take advantage of the opportunity and determine the DPO.

The Choice Between a Resident or Non-resident and an Individual or a Legal Entity?

The DPA strictly stipulates that only an individual can be designated as the DPO. However, the DPA does not impose restrictions on the citizenship of that person – the DPO can be resident or non-resident without any limitations.

The Choice Between an In-House DPO or an Externally Engaged Person?

The DPA allows the controller and the processor to designate a staff member as a DPO or to hire an external person to perform these tasks on the basis of a service contract. In any case, it is necessary to ensure the independence and autonomy of the DPO in the performance of their duties.

It should definitely be taken into consideration that, although a trusted staff member of the controller or the processor may seem like a better option due to their acquaintance with the business processes, an externally engaged person can offer more expertise, but also perform their duties with more independence and impartiality.

In addition to that, an externally engaged person will often form a team of experts as opposed to an in-house DPO, who will be one of the employees (most often the only one) with knowledge in the area of personal data protection. 

Conclusion

To conclude, having a DPO in the company structure is desirable for the proper handling of personal data arising from the company’s working processes. Therefore, even when there is no obligation for it, it is advisable to appoint a DPO. This will make sure that the flow of personal data, as well as the data subjects, will be professionally, impartially, and independently protected.

This text is for informational purposes only and should not be considered legal advice. Should you require any additional information, feel free to contact us.

By Katarina Zivkovic, Senior Associate, and Katarina Kracun, Junior Associate Samardzic, Oreski & Grbovic

Harrisons has advised the EBRD on a EUR 30 million loan facility to ProCredit Bank in Serbia.

According to Harrisons, “the loan will improve the availability of funding for small and medium enterprises and support their post-pandemic recovery, along with investments in new equipment, facilities, and operations. Around 20% of the credit line will go to investments that can improve energy efficiency or investments in renewable energy.”

“Small and medium enterprises account for the bulk of all enterprises registered in Serbia and are the engine of the country’s economic growth,” the firm informed. “Providing them with access to finance is more important than ever, in particular, to mitigate the economic impact of the coronavirus pandemic.”

ProCredit Bank is a commercial bank operating in Serbia since 2001.

The Harrisons team was led by Consultant Ines Matijevic-Papulin and included Associate Mina Markovic.

Harrisons has advised the EBRD on its RSD 1.2 billion loan to Serbian commercial bank 3Bank for on-lending to eligible sub-borrowers.

According to Harrisons, “the proceeds of the loan will be used to contribute expansion of lending to private businesses through working capital lines and investment loans to farmers, entrepreneurs, and micro, small, and medium-sized enterprises including those operating in economically less developed regions of the country. Furthermore, the transaction supports 3Bank’s growth strategy and provides a source of medium-term local currency funding.”

“This is the first loan granted by the EBRD to 3Bank, which is a potential strong partner to reach micro, small, and medium-sized enterprises in Serbia, especially in rural areas,” the firm informed.

3Bank specializes in microfinance, providing micro, rural, agro, as well as small, and medium-sized enterprises loans and other financial services to clients in Serbia.

The Harrisons team was led by Principal Mark Harrison and Consultant Ines Matijevic-Papulin and included Associate Mina Markovic.

What kind of coffee do you drink?

The answer to this question is neither “black” nor “with sugar”. The question refers to whether we are aware if the coffee we drink contains a coffee substitute or other additives that are not properly declared, if at all. This issue was recognised in practice long ago, and now it is finally put into regulatory framework.

On 31 May 2022, the Rulebook on Quality of Raw Coffee, Coffee Products, Coffee Substitutes and Related Products (Official Gazette of RS no. 159/2020) (“the Rulebook”) started to apply. It was adopted in December 2020 and entered into force on 7 January 2021. The application of the Rulebook was delayed so that the manufacturers would have enough time to adjust their businesses with the new requirements.

On the day the Rulebook started to apply, the Rulebook on the Quality of Raw Coffee, Coffee Products, Coffee Surrogates and Related Products (Official Gazette of RS no. 54/12 and 80/15) ceased to apply.

Scope of the Rulebook

The Rulebook specifies the requirements with regard to the quality of raw coffee, coffee products, coffee substitutes and related products. In other words, the Rulebook prescribes the conditions with respect to the content of the said products, as well as names under which they are placed in the market and content of declarations of such products.

Integral parts of the Rulebook are the List of Standards Establishing the Methods for Sampling and Examining Product Quality (Appendix 1) and Technological Procedures Applied in Product Manufacturing and Processing (Appendix 2).

According to the Rulebook, prior to the start of manufacturing, an entity operating in food business shall adopt a manufacturer’s specification, under the law regulating food safety, which shall notably contain the elements prescribed by the Rulebook. In relation thereto, the Rulebook stipulates that products declared, i.e., labelled before the day the Rulebook started to apply, and which do not comply with the requirements from the Rulebook, may be marketed until their expiry date.

Raw coffee

As regards raw coffee, according to the Rulebook it represents a product of dried seed (coffee bean) of plant from Coffea species, obtained by appropriate technological process from coffee fruit, by removal of mesocarp, endocarp and partially or entirely of parchment (silver skin). It is further categorised according to botanical types and marketed under the following titles: 1) raw coffee; 2) raw coffee blend; 3) raw decaffeinated coffee; 4) raw decaffeinated coffee blend; 5) raw coffee with a share of defect; or 6) raw coffee blend with shares of defect.

 Coffee products

According to the Rulebook, coffee products shall mean: 1) roasted coffee; 2) coffee extracts; and 3) beverage from cold-extracted coffee. The Rulebook further defines each of the stated products and prescribes the names under which they shall be marketed and requirements regarding their content and declaration.

Coffee substitutes

Under the Rulebook, coffee substitute is a product obtained by roasting fruits and edible parts of plant rich in starch, sugars and inulin. Within the stated group of Products, the Rulebook further distinguishes: 1) roasted coffee substitute; 2) coffee substitute extracts; and 3) chicory extract.

Related products

As regards related products, the Rulebook defines them as coffee products (such as roasted coffee, coffee extracts and beverage from cold-extracted coffee) that may be added sugar, powdered milk and other milk products, vegetable fats, aromas, additives, spices, spice extracts and other additives, as well as products obtained by mixing roasted coffee and coffee extracts that may be added the abovesaid additives.

Related products may also be added edible parts of plants, except for certain roasted edible parts of plants (indicated in Article 21 of the Rulebook) and their extracts.

Related products are marketed under the name containing names of coffee products, i.e., blends of coffee products, with indication of additives.

Reasons for adopting the Rulebook

The main reason for adoption of the Rulebook is certainly alignment with the European Union regulations (Council Directive 77/436/EEC), but also the prevention of unfair business practices towards consumers, which would mislead consumers regarding the nature and content of products they consume.

This article is to be considered as exclusively informative, with no intention to provide legal advice. If you should need additional information, please contact us directly.

By Lara Maksimovic, Senior Associate, and Andrea Arsic, Associate, PR Legal

Cvjeticanin & Partners Managing Partner Nenad Cvjeticanin has been appointed as Data Protection Officer at Emmezeta and at the Cubes IT school in Serbia.

Specializing in company law, intellectual property, media, and internet law, Cvjeticanin has been with the Cvjeticanin & Partners law office since 2009. He received his LLM degree from the University of Belgrade in 2004.

Emmezeta is a retail chain operating in the Serbian home furnishings market. The Cubes IT school is an IT academy with a presence in Serbia since 2016.

On June 5, 2022, BDK Advokati announced that DoorDash’s acquisition of Wolt (reported by CEE Legal Matters on November 18, 2021) had closed.

“DoorDash is at the beginning of a colossal journey, and I’m more excited than ever about what we’re building and the potential to help hundreds of millions of people across the globe in our mission to empower local economies,” DoorDash Co-Founder and CEO Tony Xu commented. “Together with Wolt, we believe we have the best team and platform to serve merchants, consumers, and couriers in our existing and future markets. Our journey in building our international business is just beginning and we’re confident in the incredible future we will build together.”

As previously reported, BDK Advokati, working with lead counsel Allen & Overy in London, advised DoorDash on the acquisition of Wolt Enterprises. Wilson Sonsini Goodrich & Rosati and Avance Attorneys also advised the buyer. Skadden Arps Slate Meagher & Flom and Roschier advised Wolt on the deal.

The BDK Advokati team included Senior Partners Tijana Kojovic and Vladimir Dasic, Counsel Dragoljub Sretenovic, Attorneys Jelena Zelenbaba and Marija Gligorevic, and Junior Associates Anja Gligorevic and Jovana Dukovic.

Allen & Overy’s Czech team included Partner Prokop Verner, Associate Martin Bytcanek, and Junior Lawyers Viktor Vrablik and Jan Engelmann.