Category: Serbia

Harrisons has advised the EBRD on a RSD 2.3 billion loan to OTP Bank Serbia Novi Sad.

According to Harrisons, the loan will be used for “on-lending to small and medium-sized businesses in Serbia, for working capital lines and investment loans, in particular to those operating in economically less-developed areas of the country.”

“The proceeds of the loan will further support Serbia’s economy in the post-pandemic recovery and increase small and medium-sized businesses’ access to local-currency loans in Serbia,” the firm informed.

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

On November 16, 2021, the Law on Amendments to the Law on Procedure of Registration in the Business Registers Agency (Official Gazette of RS no. 105/2021) (the “Law”) has entered into force, while the application of certain provisions has been postponed for the prescribed period.

The main intention of the Law is to reduce time and costs of incorporation of business entities, to promote conditions for commencement of business, and to remove legal vacuums observed in previous enforcement of the regulation concerned, all in accordance with measures from the Action Plan of the Program for Improvement of Position of the Republic of Serbia on the World Bank’s Business List – Doing Business for the period 2020-2023.

Submission of the Application for Registration of Discharge of a Company’s Representative

According to the Law, considering that the decision of the company’s competent body on discharging of company’s representative is of constitutive nature, i.e., the change is effective as from the day of its adoption, discharged representative is not authorised to file for the registration of deletion of his/her representative capacity to the Business Registers Agency (“BRA”), given that the aforesaid capacity ceased on the day of adoption of the mentioned decision.

In relation thereto, the Law also prescribes that, if a new company’s representative has not been appointed simultaneously with dissolution of its only registered representative, request for registering of the said dissolution can be filed by the company’s shareholder, which facilitates timely registration of the changes concerned.

Obtaining of Data and Documents “Ex Officio”

For the purpose of efficient registration and alignment with the provisions of the Law on General Administrative Procedure, the Law stipulates that data and documents filed with the application, that are subject to the official records, shall be obtained by the registrar “ex officio”, i.e., by direct insight into such official records, through so-called authority’s service bus or otherwise in accordance with the law governing the e-government, unless the applicant undertakes to individually provide such data and documents.

Deadline for Deciding on the Application, i.e., Adoption of Decision

Under the Law, the registrar decides on the application within five working days after its receipt.

In relation to the previously mentioned obligation of the registrar to provide relevant data and documents “ex officio”, the Law specifies that the deadline of five working days starts on the day following the day of obtaining of data and/or documents, unless their obtaining was done by direct insight into official records of another authority, through service bus or in other acceptable manner under the law on e-government, in which case the deadline is counted from the day of obtaining of such data and documents.

Electronic Form of the Application for Company Incorporation

The Law sets out that the application for company incorporation will be filed to the BRA only in electronic form, wherefore it is necessary to own a qualified electronic signature issued by a certification authority in Serbia.

The application of this provision has been postponed, and it will be applied upon the expiry of 18 months after entry into force of the Law.

Certification of a Digitalised Act

In accordance with provisions of the Law on Electronic Document, Electronic Identification and Trust Services in Electronic Transactions, if an act, i.e., document, previously originally made in paper form, is enclosed with the application, the copy of such act, i.e., document digitalised and certified in accordance with the aforesaid law shall be delivered.

Digitalisation of act, i.e., document, and verification of its identity with the original, for the purpose of conducting of the procedure before the BRA in accordance with the Law, apart from the persons established by the law governing electronic document, electronic identification and trust services in electronic transactions, may be done by a lawyer registered in the Serbian Bar Association, provided that their electronic signature and/or qualified electronic stamp is also placed on the application submitted along with such act, i.e., document. The lawyer is obliged to keep the original act, i.e., document that is digitalised and submitted to the APR, as well as the digitalised act, i.e., document itself.

The above stated provisions will be applied upon the expiry of one year after the entry into force of the Law.

Correction of Errors in the Register

According to the Law, if an error was made during registration, which refers to typing or calculating errors, or other obvious inaccuracies, the registrar shall, immediately upon learning about the error, or within five working days after the submission of request for correction, effect the correction, and notify in writing the subject of registration, i.e., applicant of request for correction.

However, in case the registrar found out about the error upon receipt of the application, it shall immediately act in the previously described manner and correct the observed error, while the application will be rejected for non-fulfilment of requirements under Article 14 item 7) of the Law, i.e., as data from the application are not in conformity with data recorded in the register acting upon the application, and the applicant will be invited to eliminate the irregularity within deadline from Article 17 paragraph 3 of the Law (30 days), by adjusting the data from the application and accompanying documentation with the new register entry, without any charges thereof.

On condition that the registrar finds, while deciding on request for error correction, that no error was made, it will pass a decision rejecting the request as unfounded.

Submission of Written Dispatch of Decision

The Law prescribes that the submission of written copy of registrar’s decision will be done upon the applicant’s request, for information purposes, in one of the following ways:

• by e-mail, to the registered mailing address of legal entity or entrepreneur;
• by e-mail, to the address of seat of legal entity or entrepreneur, if no mailing address was registered;
• by sending to the registered e-mail address in accordance with the law regulating electronic document, electronic identification, and trust services in electronic transactions;
• by taking over in the seat of the BRA or its organisational units;
• by e-mail, to the address of residence or stay of natural person that is a party in the procedure.

Exceptionally, if the application was submitted electronically, a copy of registrar’s decision in electronic form will be sent to the registered e-mail address, or to the e-mail address entered in the application.

In addition, the users of e-government services registered in accordance with the law on electronic government will be served exclusively through the Individual Electronic Inbox, whereby the application of this provision has been postponed, and it will start to apply upon the expiry of 18 months after the entry into force of the Law.

Other Amendments

Finally, the Law envisages that the obligation to pay the fee for registration procedure, records, publications, reservations of names, procedures upon other requests, and other services provided by the BRA, will be generated on the day of filing the application, i.e., day of filing the request for provision of other service.

The Law also prescribes that the registrar will pass a decision rejecting the request for issuance of excerpts or certificates from records that it deems to be unfounded, thus eliminating the observed legal vacuum, and avoiding possible complaint for the so-called silence of the administration.

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

Former Air Serbia General Counsel Branko Gabric has joined BDK Advokati as Counsel and Head of the Compliance; Investigation Practice.

According to BDK Advokati, Gabric “advises on a broad range of corporate matters with a focus on corporate governance, compliance, corporate reorganization, restructuring, competition, and other regulatory matters. He works with clients on the development and implementation of tailor-made compliance programs, as well as seminars and training sessions for the employees. He helps clients identify and remedy weak spots in the corporate structures or existing compliance systems, with a view to minimization of risks.”

Gabric has a Master’s degree in Law from the University of Belgrade’s Faculty of Law. Prior to joining BDK Advokati, he spent eight years with NBG Leasing and four years with Air Serbia.

Originally reported by CEE In-House Matters.

On 28 October 2021, Energy Agency of the Republic of Serbia (“AERS”) adopted Rules on prevention of abuse in electric energy and natural gas market (“Rules”), that were published in the Official gazette of the Republic of Serbia 103/2021. The Rules are drafted in line with the Decision of Ministerial Council of the Energy Community no. D/2018/10/Mc-EnC, implementing Regulation (EU) No 122712011 of the European Parliament and of the Council on wholesale energy market integrity and transparency.

Rules set out several obligations and restrictions that must be complied with, when participating in and making transactions on wholesale electric energy and natural gas market, namely:

• Registration of participants with AERS;
• Prohibition to trade with insider information;
• Obligation to publish insider information;
• Prohibition of manipulation on the market; and
• Monitoring the market.

Registration of participants on wholesale electric energy and natural gas market with AERS

Rules stipulate obligation of participants on the market to register themselves with AERS. This obligation only applies to participants intending to make transactions on wholesale electric energy and natural gas market, being the market on which it is traded with products on wholesale market.

Products on wholesale markets are defined by the Rules as i) agreements on electric energy/natural gas supply, regardless of whether the delivery point is in the Republic of Serbia or in the other Contracting Party (being party to the Treaty establishing Energy Community), ii) agreements on access to the transmission system for electric energy/natural gas, and iii) agreements on electric energy/natural gas supply to the final consumer whose annual consumption of energy is equal to 300 GWh or more; as well as financial derivates relating to the mentioned agreements.

Obligation to register with AERS have, inter alia, producer of electric energy in the power plants with installed power of 10 MW or more, producer of natural gas, supplier of electric energy/natural gas, wholesale supplier of electric energy/natural gas, transmission system operator for electric energy/natural gas, market operator for electric energy/natural gas, distribution operator for electric energy/natural gas, final consumer whose annual consumption of energy is equal to 300 GWh or more.

Registration with AERS is, without prejudice, the obligation of market participants to register themselves with market operator for electric energy/natural gas, in line with market rules of such operator.

Last but not least, AERS shall share registered data with Energy Community Regulatory Board in order to establish and manage Central Register of Participants on Wholesale Electric Energy/Natural Gas Market of all Contracting Parties.

Prohibition to trade with insider information

Rules strictly prohibit trade with insider information. By the insider information are encompassed unpublished information that relate directly or indirectly to products on wholesale market whose publishing will most likely have significant impact on prices of such products, including, inter alia, information on capacity and usage of facilities for production, storage, consumption, transmission of electric energy/natural gas.

By this prohibition is considered prohibition for any person (natural or legal) having insider information to i) use it when buying or selling products on wholesale market, ii) reveal such information to any other person, and iii) suggest, on the basis of insider information, to any other person to buy or sell products on wholesale market.

This prohibition applies also to the members of general assembly of the companies, members of management board of the companies, shareholders of the companies, persons who manage such information within their working competences etc.

Each market participant is obliged to report to AERS, without delay, any behavior which is likely to represent trade with insider information.

Breach of prohibition to trade with insider information represents commercial offence abuse on market, which is punishable by the Energy Law (“Official gazette of the RS” no. 145/2014, 95/2018 – other law and 40/2021) with prescribed pecuniary fine in the range from 1.500.000,00 RSD (cca. 12.710.00 EUR) to 3.000.000,00 RSD (cca. 25.420.00 EUR).

Obligation to publish insider information

Rules stipulate obligation of market participant to publish timely and in whole, on its website, insider information relating to itself, facility in its ownership or under its control or, facility for which operation is responsible. Publication of such information includes especially information on capacity and usage of facilities for production, storage, consumption, transmission of electric energy/natural gas, as well as data on scheduled or non-scheduled unavailability of such facilities.

Exceptionally, market participant may decide to postpone publication of insider information in order to protect its legitimate interest, provided that it does not use such information when trading with products on wholesale market. In this case, market participant is obliged to, without delay, deliver such information to AERS with explanation of postponement of publication.

Prohibition of manipulation on the market

Rules set out strict prohibition of manipulation on the market, as well as an attempt of manipulation on the market. Under manipulation on the market, it is considered making any trade with products on wholesale market while:

1. giving false or deceiving signals in respect to the offer, demand or price of products on wholesale market;
2. creating artificial level of prices of one or more products; or
3. using or trying to use imaginary means or any other kind of fraud which gives false or deceiving signals in respect to the offer, demand or price of products on wholesale market.

Sharing information via media, internet or by any other means, which gives false or deceiving signals in respect to the offer, demand or price of products on wholesale market, represents manipulation on the market, in case thew person sharing such information is aware that they are false or deceiving.

Attempt to manipulate the market exists if any person makes trade with products on wholesale market with intent to achieve any prohibited goals listed above under a), b) or c), as well as if sharing information via media or internet with the same intent.

Each market participant is obliged to report to AERS, without delay, any behavior which is likely to represent manipulation on the market.

Monitoring the market

Rules set out obligation of AERS to monitor functioning of wholesale market in order to timely notice any prohibited behavior. For this purpose, AERS shall cooperate with regulatory bodies of Contracting Parties, as well as Energy Community Regulatory Board.

Additionally, in case any suspicion of existence of market abuse in the Republic of Serbia arises, AERS is obliged to undertake measures and initiate appropriate procedures before competent bodies in the Republic of Serbia. Furthermore, if AERS suspects on market abuse on the wholesale market of other Contracting Party, it is obliged to inform regulatory body of such Contracting Party, as well as Energy Community Regulatory Board.

Last but not least, Rules envisage that AERS shall comply with data protection rules in respect to all information acquired by the market participants, regulatory bodies of Contracting Parties and Energy Community Regulatory Board.

By Nikola Djordjevic, Partner, and Marko Mrdja, Senior Associate, JPM Jankovic Popovic Mitic

Bojovic Draskovic Popovic & Partners has advised Titan European Holdings on the sale of 100% of its shares in Titan Machinery d.o.o. Novi Sad to Agromarket d.o.o. Kragujevac. 

Titan Machinery is, ultimately, a subsidiary of Titan Machinery Incorporated, which is one of the largest American dealers of agricultural and construction equipment. Titan Machinery Inc is based in Fargo, North Dakota, and has locations throughout the Midwestern United States. 

BD2P’s team was led by partner Uros Popovic together with Senior Associate Stefan Golubovic. 

Serbia has a long-standing tradition in the protection of intellectual property rights. The Kingdom of Serbia was even one of the first 11 signatories of the Paris Convention in 1883.

Nowadays, the laws on trademarks, patents, and other industrial property rights are harmonised with the ones in the EU.

However, in the process of enforcement of intellectual property rights, issues in practice may arise in the following aspects:

1. Enforcement against IP rights

The protection and enforcement of inventions and trademarks are guaranteed. The legislation in force even allows pledges on these rights. Except in the bankruptcy proceedings, the system never provided legal tools to enforce such pledges or to conduct other types of debt collection against these rights.

Our team members have been raising these issues before the Intellectual Property Office and the Chamber of Public Enforcement Officers for several years. The latest amendments to the Law on Enforcement and Security were published on 26 July 2019 in the Official Gazette RS no 54/19, and they introduced a significant change. This law entered into force on 3 August 2019. However, its application, in general, was postponed until 1 January 2020.

The relevant change in IP rights comes with Article 338a that allows the enforcement against patents, trademarks, and “other rights”. In terms of the procedure itself, the norms covering moveable assets are going to be applied.

This change will undoubtedly improve debt collection. Some issues remain open:

• Since 2013, the courts in Belgrade have been the only ones competent for litigation matters in the IP field. However, there are no special rules about the territorial jurisdiction of the courts for deciding on enforcement against IP rights. For general enforcement, any court country-wide can be competent, depending mostly on the domicile of the debtor. It remains unclear whether enforcement against IP rights would be treated as general enforcement or as a matter in the IP field. Unfortunately, there is no available court practice that would shed some light on this issue;
• The Law on Enforcement and Security lacks elaborate provisions which would regulate the very process of enforcement against IP rights. The process of enforcement against IP rights is regulated with the application of the rules related to the process of enforcement of movable assets. As enforcement of IP rights would, in practice, be very complex, the Law on Enforcement and Security should have regulated this matter in more detail. For instance, valuation of IP rights, the process of the sale, registration of sale before the competent authority can differ when compared to enforcement of movable assets; and
• Although flexible norms are welcome into the Serbian legislation, without in-depth knowledge of the IP rights, the courts and public enforcement officers may struggle with the interpretation of what “other rights” are.

Additional issues may arise concerning the copyright and neighbouring rights and which segments of these rights can succumb to the enforcement.

To find out how some of these issues were resolved in practice and according to an unofficial survey, it seems that although there are many registered pledges on intellectual property rights (especially on trademarks), enforcement proceedings against these rights have yet to be initiated.

2. Enforcement of IP Rights

If IP rights were infringed and holders wish to end the infringing act upon the court’s order, there is a specific issue that could arise. Article 4 of the Law on Enforcement and Security stipulates that the court will be exclusively competent for enforcement of performance, non-performance or sufferance that can be only undertaken by the enforcement debtor or for the enforcement of the debtor’s duty to withold from performing specific actions. When it comes to enforcement of IP rights, it could be difficult to interpret which specific measures would be the ones that only the enforcement debtor can perform or for which only the debtor can withhold performance (e.g. removal or repainting of the billboard, destruction of a machine). This can lead to a battle of competence where it would be left to the court or  an enforcement officer to provide specific interpretation, which would require a profound knowledge of IP rights. In addition, it takes time to make a court practice consistent.

The information in this document does not constitute legal advice on any particular matter and is provided for general informational purposes only.

By Nikola Kliska, Senior Associate, and Filip Susulic, Associate, Karanovic & Partners

On October 25, 2021, CEE Legal Matters reported that Karanovic & Partners had advised the Innovation Fund of the Republic of Serbia (IF) on launching the Katapult start-up accelerator in Serbia. CEE In-House Matters spoke with Mladjan Stojanovic, Program Manager at the Innovation Fund, to learn more about the matter.

CEEIHM: To start, tell us a bit about the IF.

Stojanovic: The IF is the national institution that supports innovation and manages funding for innovation development. The aim of the IF is to contribute to the overall development of innovations through promoting innovative entrepreneurship, implementing financing programs to R&D-intensive projects, and strengthening the linkage between academia and industry. The IF provides financial support for the implementation of the development projects, i.e. for the creation of innovative products, services, and technologies for which there is a market need.

The IF is continuously working on creating new mechanisms for stimulating and developing innovation, almost every year new mechanisms are available to the private sector SMEs and academia.

The funding support provided by the IF is sector-agnostic. Financing decisions are made on a competitive basis by the IF’s independent investment committees (which includes evaluation/technical review by professional peer reviewers). 

Support available through IF’s financing programs in the past 10 years helped the creation of a local startup community, which is currently the most vital segment of the Serbian economy. Investments in IT startups are getting accelerated in the past few years and we are witnessing the first substantive exits. 

CEEIHM: As CEELM recently reported, Karanovic & Partners advised the fund on launching Katapult. What is this project?

Stojanovic: The Katapult accelerator is a new program of the IF that targets startups with potential for rapid growth and who are in need of investments to secure that growth. The typical concept (also employed here) is to select the most promising startups, get them together with experienced mentors who can effectively diagnose problems the startup is facing and help resolve them, thereby creating conditions for growth. With that and with financing the IF provides, we expect to have investment-ready startups that can be presented to investors. Therefore, mentors provide advice and helping define the right growth strategy, and the IF and investors will provide funding to implement the strategy and scale up the business. When we talk about funding, startups can get up to EUR 300.000 in the form of At-entry grants (at the entry to the accelerator) and Co-investment grants for startups who manage to raise an investment (in that case the IF provides a matching amount). Investments that are being considered are typically equity or quasi-equity type of investments from business angels or venture capital funds. Funding is conditional and available only for the most successful ones. The goal of this kind of mechanism is primarily improved access to finance for startups, as they normally don’t qualify for traditional financing instruments such as bank loans. This mechanism should also be interesting for early-stage investors since it enables them to channel the same amount of available funding to more startups, which lowers the risk by enabling investments in a larger portfolio of companies. 

CEEIHM: It was launched with the support of the World Bank – what was that support specifically?

Stojanovic: Since its establishment, the IF has worked closely with the World Bank and the EU. In fact, the initial funding for grants 10 years ago was provided by the EU and the World Bank provided essential technical support in setting up the IF operations, its organizational structure, and launching the first calls for funding. Currently, the Katapult accelerator is using part of the World Bank loan to the Republic of Serbia (EUR 7 million) through a project – Supporting Acceleration of innovation and Growth Enterprise (SAIGE). Funding is being used for setting up the operations within the IF and grants to startups. In addition to that, the EU is providing funding (approximately EUR 5 million) for training and capacity building related to the Katapult operations. The teams from the IF and the World Bank worked closely on designing Katapult and at the moment the IF is implementing the program. The first call for startups has been published on October 15, 2021, and applications are received until December 6, 2021. The first batch of startups is expected to be selected by the end of February.

CEEIHM: What was the most complicated aspect of the launch?

Stojanovic: Being a multi-stakeholders project, challenges have been mostly related to compliance. Both the World Bank and the EU are large organizations with a very detailed set of rules. The IF has its own set of rules too and complying (e.g. in areas such as conflict of interest influenced the design so that simply copy-pasting the operating models from other accelerators was not possible). Once we identified the issues adjustments to the internal acts of the IF had to be made and Karanovic&Partners were great asset to rely on. Specific set of regulations on granting state-aid, for which the EU has special interest, made us change internal acts and the design ought to take into account specific provision of this regulation. Complying with this segment of regulations required specific expertise on our side and understanding from the institutions that monitor implementation of these rules, since it was the first time someone is dealing with this subject-matter in Serbia.

CEEIHM: Why did you opt for Karanovic & Partners as your advisors?

Stojanovic: Since we started working on the design in 2020 it was clear that the IF will need a specific legal support in all phases of the project. Challenges we will be facing were numerous: managing early stage investments, compliance, intellectual property management, issues related to the internationalization of the business, etc. Therefore we knew we were looking for a partner who could cover all these topics and a partner with specific interest in working and supporting startups in particular. Karanovic & Partners appeared as the most logical solution to our problem. Although our relationship is relatively short (working together for about six months) the skills they brought to the table proved to be essential for smooth functioning of the Katapult. 

Originally reported by CEE In-House Matters.

On November 16, 2021, amendments to the Law on Free Access to the Information of Public Importance (the “Law”) entered into force, as they had been published in the Official Gazette of the RS no. 105/2021 of November 8, 2021, whereby they were passed for the purpose of alignment with relevant regulations adopted in the meantime, such as the Law on Data Secrecy and the Law on Personal Data Protection, and international standards in the respective field, as well as introduction of mechanisms to ensure that the authorities act in accordance with their legal duties, and that information seekers enact their rights under the Law exclusively for the purposes stipulated therein.

The new provisions shall start to apply upon the expiry of three months after the entry into force of the Law, i.e. on February 16, 2022.

Key Novelties

There are four key novelties among the solutions provided by the Law:

• extension of the circle of entities subject to the Law, i.e. notion of public authority;
• advancement of the system for creation and publication of authority’s information booklet, in accordance with the principle of proactive transparency;
• advancement of statutory and operational independence, as well as authorizations of the Commissioner for Information of Public Importance and Personal Data Protection (the “Commissioner”); and
• introduction of mechanism for prevention of abuse of rights of seekers of the information of public importance.

Extension of the Notion of Public Authority

The Law has extended the circle of entities that are liable to act in accordance with the Law, by prescribing that the notion of public authority in terms of the Law also includes legal entity or natural person with public authorisations (e.g. notary public), as well as bodies of town municipalities, legal entities established by companies that are in majority state ownership (so-called subsidiaries), whereas majority state ownership implies the ownership of any body stipulated in Article 3 of the Law, whether individually or collectively.

In addition, the law specifies the scope of information that should be provided by legal entities that perform activities of general interest, have public authorisations, or are funded by a public authority, i.e. it is stipulated that such entities shall have the capacity of public authority and obligations regarding such information that pertain to the performance of public activity or funding from public source, but not all information that they possess.

The Principle of Proactive Transparency

As it was previously mentioned, the purpose of the Law is to improve legislative framework that regulates the access to the information of public importance so as to increase the transparency of work of public authorities. Therefore, the Law pays special attention to regulation of the manner of creating and publishing authority’s information booklets.

Namely, the Law prescribes the content of information booklet, as well as that it needs to be made in both electronic and machine-eligible form, and published through single information system of information booklets, which is kept and maintained by the Commissioner. In addition, a public authority shall be obliged to ensure accuracy and integrity of data published in the information booklet, as well as to update it by introducing relevant changes within 30 days upon their occurrence.

Advancement of Statutory and Operational Independence, as well as the Commissioner’s Authorisations

As regards the status and authorisations of the Commissioner, certain amendments have been proposed with respect to election and mandate of the Commissioner, i.e. the respective authority is elected through a public call, whereby all interested parties are invited to apply for the position of Commissioner, whose mandate lasts for eight years without possibility for re-election.

Also, considering recent issues in practice with regards to enforcement of Commissioner’s decisions, as well as the need for terminological adjustment to the Law on General Administrative Procedure (which regulates the administrative enforcement of non-pecuniary obligations), the Law prescribes the right of the Commissioner to force the authority to execute obligations from the Commissioner’s decision by direct enforcement i.e. pronouncing of a fine. The fine is pronounced by decision, to head of the authority, and it ranges from RSD 20,000 to 100,000, with a possibility to be repeatedly pronounced. The stated fine is enforced by the court, to the benefit of the budget of Serbia.

The Law also stipulates so-called decentralisation of the Commissioner, by envisaging that the Commissioner may also establish offices outside its seat.

Prevention of Abuse of Rights of Seekers of the Information of Public Importance

With regards to the Commissioner’s authorisations and considering the previously observed problems in practice, i.e. significant number of information seekers who frequently institute misdemeanour procedures for offences stipulated by the Law, without previously appealing to the Commissioner, the Law prescribes that the Commissioner shall be authorised to file a request for institution of misdemeanour procedure for offences stipulated by the Law, provided that it estimates the existence of offence while acting upon complaint, whereby the information seeker may not file a request for institution of misdemeanour procedure against an authority prior to finalisation of complaint procedure before the Commissioner (and/or finalisation of administrative procedure, if complaint to the Commissioner is inadmissible).

In other words, information seeker shall be obliged to address the Commissioner first, claiming that the Commissioner files a request for institution of misdemeanour procedure (or to address administrative inspection, in case of administrative dispute). If the Commissioner (or administrative inspection) fails to reply to the request of the information seeker within eight days or responds that there is no basis for such request, the information seeker may individually file a request for institution of misdemeanour procedure. Additionally, the information seeker is entitled to continue the procedure if the Commissioner (or administrative inspection) waives the request.

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

In 2020 and 2021 there were no developments towards the adoption of the new law and bylaws regarding competition/antirust (a process that started in 2017), probably due to the coronavirus pandemic. Certain changes in respect to the enforcement of competition rules were introduced during 2020, due to COVID-19, such as a new manner of communicating with the Serbian Competition Commission, a prolongation of the deadlines during the state of emergency in Serbia, etc. However, all subject changes have been put out of force and are being restored to the state prior to COVID-19.

Pursuant to publicly available data on the commission’s official website (since the commission’s annual report has not been published), during 2020 the commission was very active in competition rules enforcement since it initiated nine new investigations, with a special emphasis on resale price maintenance, as it initiated six new resale price maintenance investigations. The trend of initiating investigations after conducted sector inquiries and analysis of specific conditions on the relevant markets has continued in 2020. The commission also initiated one investigation for gun-jumping, i.e. the implementation of a concentration without the clearance of the commission. It also rendered decisions and imposed fines in four restrictive agreements proceedings, as well as one fine for abuse of dominant position.

In 2020, the commission rendered 106 merger clearance decisions, whereas 103 were cleared by the commission in summary proceedings, one merger was cleared after investigation proceedings, whilst for three mergers the commission initiated investigation proceedings.

From the beginning of 2021 until now, the commission has issued 63 merger clearance decisions, while it did not initiate procedures or render decisions regarding the existence of restrictive agreements or abuse of dominant position. The commission has continued the trend of conducting sector inquiries and released the following two reports: (1) Report on the Sector Inquiry into Competitive Conditions on the Tour Operators Market for 2017-2019 and (2) Report on Sugar Beet Production and Buy Out, Sugar Production and Wholesale Trade for 2017-2019.

The commission has also suspended proceedings against a seller whose standard form agreements were potentially considered restrictive agreements, due to resale price maintenance, pursuant to a submitted proposal for undertaking voluntary commitments to remove potential infringements of competition law, which were accepted by the commission. In the same investigation, the commission terminated the proceedings against small retailers with the rationale that they did not have the bargaining power to amend the contractual provisions due to their size, market, and financial strength, taking a step forward towards alignment of its practice with EU case law.

We could notice that during 2021 the commission focused on gun-jumping investigations and independent monitoring of media and public registries. It initiated two procedures for gun-jumping and imposed one fine, in relation to the proceedings initiated in 2019. As for the latter, the commission imposed a fine in the amount of approximately EUR 75,000, which is only the second decision imposing a fine for gun-jumping (the first was imposed in 2017 in the amount of approximately EUR 56,000). It remains to be seen what the fining practice for gun-jumping will be in the future (since the two imposed fines were low compared to the potential fine of 10% of Serbian turnover in the preceding year) and whether the commission shall enact any decisions imposing measures of ‘deconcentration’ by ordering undertakings to divide a company, dispose of stakes or shares, terminate a contract, or perform other actions in order to re-establish the conditions prior to the concentration.

We could also notice that, during the last year and a half, the number of notified concentrations dropped significantly due to a general decline in economic activity caused by the COVID-19 pandemic. It remains to be seen what long-term impact the pandemic will have on competition in Serbia, especially in respect of its enforcement by the commission.

By Nikola Poznanovic, Partner, and Bojana Javoric, Senior Associate, JPM Jankovic Popovic Mitic

This Article was originally published in Issue 8.9 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

Karanovic & Partners Head of Real Estate Ana Lukovic has been appointed as a Partner with the firm.

According to Karanovic & Partners, Lukovic “started her career 12 years ago as an intern. After practicing as a corporate lawyer, she moved on to the real estate team. There, with her perseverance, reliability, personal development, and work in the team she practically built from scratch, Ana has come to the position of a strong expert in this field, on whom clients can rely and with whom they want to work.”

Lukovic is a graduate of the University of Belgrade’s Faculty of Law.