Category: Serbia

Damjan Despotovic, Marina Nikolic, Milorad Glavan, and Srecko Vujakovic have established DNGV Attorneys in Belgrade.

Prior to setting up DNVG Attorneys, Despotovic had been a Lawyer with NKO Partners for 11 years. He focuses on labor law, competition law, commercial and corporate law, public procurement, and real estate.

Nikolic too joins from NKO Partners, where she was a Senior Associate since 2015. Before that, she was an Associate with Schoenherr between 2012 and 2014. She focuses on corporate, M&A, and commercial law.

Glavan, who also joins from NKO Partners, had been with his previous firm for over seven years, having started in 2014 as a Legal Trainee and becoming a Senior Associate in 2016. He focuses on Data Protection, Dispute Resolution, Pharmaceutical, and Labour law.

Vujakovic joins from Schoenherr affiliated firm Moravcevic Vojnovic i Partneri. He first joined his old team in 2006 as an Associate. In 2009 he become an Attorney at Law. He made Junior Partner in 2011, and Partner in 2014. He focuses on corporate and M&A work but also advises on capital markets, insurance, digital assets, data protection, and employment law.

“We are proud and excited to announce the launch of DNVG Attorneys,” commented Despotovic. “Our team is composed of experienced lawyers with strong backgrounds in various fields of commercial law, brought together by the common vision and commitment to providing the best quality service and making a difference for our clients. We look forward to cooperation with businesses seeking reliable and professional legal advice and support.”

Gecic Law has launched an Environmental, Social & Governance Practice.

According to the firm, the newly established ESG Practice “will focus on the needs of businesses in this increasingly prominent area.” It will be co-headed by Partner and Head of Corporate/M&A Ognjen Colic and Head of Operations Hristina Kosec. 

“ESG is the future,” says Colic. “With an all-encompassing approach, we aim to help clients inform their decisions in line with the latest trends in sustainability and corporate responsibility.” 

“We understand that the objectives comprising the United Nations’ Sustainable Development Goals, the Paris Agreement, and the European Green Deal must be much more than a promise; therefore we are launching our ESG practice ahead of COP26,” adds Kosec. “By establishing this practice, we want to put words into action and respond to any client need in the diverse and complex aspects that make up ESG.”

The Ministry of Health passed a new bylaw within the health care system. The Rulebook on Forms in Health Care System was published in the Official Gazette of RS no. 31/2021 on March 31, 2021, and entered into force on April 8, 2021 (the “Rulebook”).

With the entry into force of the Rulebook, the Article 109, point 10 of the Rulebook on Manner and Procedure of Exercising the Right to Compulsory Health Insurance (Official Gazette of RS no. 10/2010, 18/2010 – amended, 46/2010, 52/2010 – amended, 80/2010, 60/2011 – decision of the CC, 1/2013, 108/2017, 82/2019 – other rulebook) ceased to apply, which was also prescribed by the Form OZ-6 – Report on the Temporary Inability to Work. The said form, among other things, also included data on diagnosis of the insured person, in accordance with the International Classification of Diseases (ICD).

Pursuant to the provisions of Article 103 of the Labor Act, the employee is liable to submit a doctor’s certificate to the employer, no later than three days from the occurence of temporary inability to work in terms of the health insurance regulations. In accordance with the previously applicable regulations, this certificate also contained the code of the employee’s disease, without the essential need for such special type of personal data, i.e. on health condition of the employee, to be disclosed to the employer in this way.

Moreover, the Labor Act prescribes in the same article that the subject certificate must only contain time of the expected inability to work, but not the specific disease due to which the subject inability occurred.

Consequence of adopting the Rulebook is that doctor is no longer obliged to reveal details of disease within its report on the temporary inability to work, as it will no longer specify the code of disease, i.e. the insured person’s diagnosis. Namely, Article 9 of the Rulebook stipulates data that comprise the content of form of the report on temporary inability to work, among which is not the diagnosis of the insured person, but only some of the 13 explicitly stated causes of such inability (illness; mandatory isolation measure; illness or complications related to the maintenance of pregnancy; donor of organs, cells, tissues, etc).

In accordance with the above, removing the Form OZ-6 is of a particular importance for the personal data protection. Namely, the Act on Personal Data Protection stipulates in Article 17 that, except for particullary provided cases, the processing of data on health status of a natural person is prohibited, which includes the data on physical and mental health of natural person, as well as on the provision of health services, which reveal information on its health condition.

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 Schoenherr Partner Petar Kojdic has joined Kinstellar as a Partner and Head of the firm’s Banking & Finance practice in Belgrade.

Before joining Kinstellar, Kojdic spent almost 13 years with Schoenherr. He joined the firm in 2009 as an Associate, was promoted to Attorney at Law in 2012, and then to Partner, in 2015. He earned an LL.M. degree from the Central European University in Budapest and an LL.B. from the University of Belgrade.

According to Kinstellar, Kojdic “advises lenders and borrowers of all types on a wide range of cross-border and local finance transactions, including acquisition and leveraged finance, project finance, debt restructurings and re-financings, as well as loan and portfolio sales transactions. In addition, Petar focuses on legal and regulatory advice related to structured finance, netting, derivatives, financial collateral, securitisation, as well as repo and capital markets transactions. His work involves negotiating finance and hedging documents with various counterparties (banks and other financial institutions, funds, corporates, and sovereign entities) and issuing netting, collateral, and other legal opinions.”

“I am delighted to welcome Petar to the Kinstellar Team!,” Managing Partner Patrik Bolf commented. “With his outstanding reputation, broad client relationships, and impressive track record he will be a valuable asset to the firm and will make a significant contribution as we continue to bolster our client service strengths in Serbia.”

The Commission for Protection of Competition initiated ex officio antitrust proceedings against Atlantic Group, Atlantic Brands and Strauss Adriatic and conducted dawn raids, in order to investigate potential existence of restrictive agreements.

In May and June 2021, the Commission conducted an analysis of competition conditions in retail sales with selected food items in the Republic of Serbia – carbonated soft drinks, ground coffee, edible sunflower oil, milk, and dairy products. The analysis also included the retail price movements of certain ground coffee brands during the period between 2015 and 2020.

The results of the analysis have shown that the wholesale market for grounded coffee is a concentrated and stable market with a small number of market participants and the two largest participants and competitors – Atlantic Group which owns brands Grand coffee, Bonito and Barcaffe, and Strauss Adriatic which owns Doncafe and C kafa – whose joint market share was not below 80% during the period from 2013 to 2020, creating the conditions for much easier reaching the agreements between the competitors. The analysis of price movements also showed a simultaneous increase in prices of the selected products of Strauss Adriatic and Atlantic Group (“Doncafe Moment 200 gr” and “Grand gold kafa 200 gr“) at the beginning of 2017, whereby after this increase the prices were not significantly reduced until the end of the observing period. The results of the correlation analysis of retail prices of two selected products indicated that there is very high collusion of price trends of these two products. On the other side, raw coffee prices were continuously falling between 2017 and 2019. Having in mind that the raw coffee price participates with over 90% in formation of the final product price, the correlation between the movements of these prices during the observing period was expected. However, the analysis showed that these prices were changing in different directions. Furthermore, the analysis showed that there was no correlation between the movement of the raw coffee prices on the world market and retail ground coffee prices on the Serbian market either – while the prices on the world market were falling, retail prices on the Serbian market were increasing. The Commission reasonably concluded that the movement of retail prices of ground coffee brands of Atlantic Group and Strauss Adriatic does not indicate that they were formed as the consequence of the existing market conditions but as the consequence of the price policy coordination. The Commission also noticed that after the statements of directors of Strauss Adriatic and Atlantic Group indicating that the prices have not changed since 2017 and that they will not be changed, no price changes actually occurred.

Having all this in mind, the Commission assumed that Atlantic Group and Strauss Adriatic concerted their business strategies regarding the prices of ground coffee on the Serbian market, thus replacing the mutual competition with cooperation, leading to significant restriction, distortion, or prevention of competition.

A few years ago, the Commission investigated certain tobacco companies for the reason of their concerted practices. However, this investigation was suspended due to the lack of proof, so we should see how these proceedings will end.

By Nikola Poznanovic, Partner, and Katarina Randjelovic, Senior Associate, JPM Jankovic Popovic Mitic

Doklestic Repic & Gajin has advised the Czech Pronatal Group on establishing a gynecology hospital in Belgrade.

According to the firm, the aim is for the hospital to obtain a license for in-vitro fertilization services in the near future. 

Pronatal also operates hospitals in Banja Luka and Zagreb in the region, with more than 300 hundred medical professionals.

The Doklestic Repic & Gajin team was led by Partner Milos Pandzic and included Managing Associate Aleksandra Stojanovic and Senior Associate Ljubinka Pljevaljcic.

On 6 September 2021, the Competition Commission (the “Commission”) has initiated a formal procedure against company MAT – Real Estate for potential gun-jumping. The transaction concerned involves the acquisition of company Radijator d.o.o., a distributor of plumbing and heating equipment.

The Commission initiated the investigation following the publication in the Serbian Business Registers’ Agency on the sale of the target company in bankruptcy proceedings, whereas MAT – Real Estate was registered as the new owner of the target company. Since the acquirer belongs to Matijević group of companies and based on the publicly available information on the turnover generated by Matijević group worldwide and in Serbia, the Commission concluded that the merger filing thresholds were met, making the merger filing mandatory for the acquirer.

In case the Commission finds that gun-jumping occurred, Matijević group of companies could be fined in the amount of up to 10% of the turnover realized in the Republic of Serbia in the year preceding the initiation of proceedings. Following the assessment of the transaction, the Commission may also prohibit the concentration, i.e., order demerger.

This investigation is a continuation of the Commission’s efforts in the merger control field, which has become increasingly active in investigating and pursuing potential unnotified concentrations.

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

By Stefan Savic, Associate, and Bojana Miljanovic, Senior Associate, Independent Attorneys at Law in cooperation with Karanovic & Partners

Not so long ago (12 years!) Serbia adopted the amendments to the Agricultural Land Act which was supposed to allow the use of agricultural land for non-agricultural purposes, mainly to support the growing renewable energy sector. Of course, this was conditioned with adopting an adequate Regulation by the Serbian Government, which everyone waited for since 2009. Finally, patience paid off and in July 2021, the Serbian Government adopted the Regulation on the conditions, manner and procedure for giving state-owned agricultural land for use for non-agricultural purposes (hereinafter: “Regulation”).

Companies operating in the energy sector will probably benefit the most from the Regulation, having in mind years of struggling to resolve all necessary land titles for the construction of the wind and solar power plants and accompanying infrastructure (OHL, WTGs, solar panels etc.). In general, the Regulation allows the use of the agricultural land for (i) producing energy by using the energy of the wind and sun; (ii) performance of the geological works and exploitation of minerals, and (iii) commencing business activities which are related to the construction of facilities of importance for the Republic of Serbia.

The Regulation applies to a specific type of agricultural land which is registered in the real estate cadaster of the Republic Geodetic Authority owned by the Republic of Serbia including:

• uncultivated agricultural land (which includes pastures, reeds and wetlands), and
• arable country-owned agricultural land (which includes meadows, gardens, orchards and vineyards) of sixth, seventh and eighth cadastral class.

Use of agricultural land under the Regulation is limited in time to a maximum duration of 30 (thirty) years. This period is calculated from the day of concluding the contract on the use of the land. The procedure for obtaining the right to use agricultural land under the Regulation is carried out before the local municipality where the land is located and included (i) the public bidding procedure, (ii) the final decision on the use of state agricultural land for use, as well as (iii) the development of a project for return the subject land to its original condition after its use.

Remuneration for the use of the agricultural land is paid once a year upfront, and predefined to the following amounts:

• five-times the amount of the average lease price per hectare of state agricultural land in the territory of the Republic of Serbia if the land is used for producing energy from renewable sources and/or construction of the facilities of importance for the Republic of Serbia; and
• thirty-times the amount of the average lease price per hectare of state agricultural land in the territory of the Republic of Serbia if the land is used for performing geological exploration works and/or exploitation of minerals.

All agreements for use of the agricultural land concluded with the local municipality are registered before cadaster in form of prenotion of the use of the state-owned agricultural land.

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 Nemanja Providzalo, Senior Associate, and Aleksandra Bijeljac, Trainee, Samardzic, Oreski & Grbovic

Application of the Law on Fiscalization (Official Gazette of RS no. 153/2020) (“the Law”), that we have discussed before, which has repealed Serbian Law on Fiscal Cash Registers (Official Gazette of RS no. 135/04 and 93/12) by entering into force on December 29, 2020, will start on January 1, 2022 (except for several provisions that have already started to apply, on the day of entry into force). The regulation concerned, along with the set of by-laws enacted for its implementation, introduces a completely new model of fiscalization, which – among other things – implies a wider circle of taxpayers who will be obliged to apply it, new rules regarding the characteristics of fiscal cash registers and fiscal receipts, as well as certain subsidies for the entities covered by fiscalization.

Which Entities are Covered by, and Which are Exempt from the Fiscalization Liability?

According to the Law, the subject of fiscalization is a turnover of goods and services in retail, and advance payment received for the retail, while the obligor of fiscalization is every taxpayer of the personal income tax (in terms of the law regulating personal income tax) and every taxpayer of the corporate profit tax (in terms of the law regulating corporate profit tax) performing retail. Therefore, the fiscalization obligor shall be liable to register each retail transaction through an electronic fiscal device, regardless of the manner of payment, including the advanced payments received for the future retail.

However, the Regulation on Establishment of Activities that are not subject to the Mandatory Registration of Retail through the Electronic Fiscal Device (Official Gazette of RS no. 32/2021) – in accordance with its title – stipulates the activities that are not subject to mandatory registration of retail and advanced payments received thereof through the electronic fiscal device. Those are:

• sale of own agricultural products on market stalls, and similar places and facilities by a natural person who is subject to the personal income tax (but not an entrepreneur);
• activity performed by fiscalization subjects who collect fees from natural persons for goods sold and services rendered by enacting invoices concerning consumption calculated by measuring instruments (heating, gas, telephone, electricity, water, etc.);
• activities in the following fields, branches and groups, according to the Regulation on Classification of Activities (Official Gazette of RS 54/2010): 49.31 Urban and suburban road transportation of passengers; 49.32 Taxi transportation; 52.21 Service activities in road transport; 53.10 Postal activities of public service; 61 Telecommunications; 64 Financial services, except insurance and pension funds; 65 Insurance, reinsurance and pension funds, except for compulsory social insurance; 66 Auxiliary activities in provision of financial services and insurance; 69.10 Legal activities, except for public notaries and enforcement officers; 75.00 Veterinary activities – primary health protection of animals in the field, activities from the Programme of Measures for Animal Health Protection, activities of disinfection and deratization in the facilities where animals are kept and bred and the activities aimed at prevention of outburst, spreading and suppression of contagious diseases among animals; 84.30 Compulsory social insurance; 85 Education, except for the activities from branch 85.5, i.e. Other education; 86 Health activities – health services provided from the compulsory health insurance funds; 87 Social protection with accommodation; 88 Social protection without accommodation; and 94.91 Activities of religious organisations;
• activities from the Law on Utility Services (Official Gazette of RS 88/11, 104/16 and 95/18), except for the management of cemeteries and burials; funeral activities and rendering services in open markets: rental of premises, stands, and spaces therein;
• activities from the Rulebook on Establishment of Activities that are Considered as Old and artisan crafts, i.e. Handicrafts, the Manner of their Certification and Keeping Special Records of Issued Certificates (Official Gazette of RS 56/12), except for the stonecutting; and
• certain activities in the following groups within the aforementioned Regulation on Classification of Activities: 47.99 Other retail outside shops, stands, and open markets, i.e. sale through traveling salespersons, i.e. street vendors of ice-cream, lottery, popcorn and press (colporteurs); and 96.09 Other unlisted personal service activities, i.e. activities of shoe-cleaners, carriers, and persons who charge car parking.

Electronic Fiscal Device, Procedure and Deadlines for Fiscalization

The new model of fiscalization implies the use of an electronic fiscal device, which does not need to be a fiscal cash register anymore, but can also include a computer, tablet, or mobile phone (providing that device meets prescribed criteria concerning its components and security), which will be used to issue a fiscal receipt with QR code. This code will enable the buyer of goods i.e. user of services to check whether the receipt was issued in accordance with regulations. Defiscalization of old fiscal devices will be done automatically i.e. by connecting new devices to the Tax Administration server.

Transfer to the new model, in addition to the purchase/possession of the appropriate electronic fiscal device, implies three main steps:

1. registration of business units, i.e. sale points;
2. registration to the taxpayers’ service, in order to obtain so-called security element; and
3. connecting to the Tax Administration.

Starting from November 1, 2021, taxpayers will be able to make their transition to the new model, whereby the subject procedure is to be finished no later than April 30, 2022.

Subsidies Regarding the Costs of Transfer to the New Model

It was recently announced that, in the period from October 15, 2021, until January 31, 2022, taxpayers will be able to apply for subsidies of the Serbian Government, in order to reimburse the costs of their transition to the new model. The subsidies will be provided in the amount of EUR 100.00 per each point of sale and fiscal device (in RSD counter value), whereby the taxpayers who are not subject to VAT will receive 20% higher subsidy for fiscal devices (due to the fact they cannot use the incoming VAT).

Aim of the New Model

The new model of fiscalization implies the application of modern hardware and software solutions, aimed at improving the control over the trade of goods and services (i.e. monitoring of trade in real-time), as well as the collection of public revenues.  As such, it represents one of the instruments that competent authorities of the Republic of Serbia will significantly rely on in the future in their fight against the informal economy.

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, PR Legal

Harrisons has advised the EBRD on a EUR 10 million senior secured loan for the Umka Cardboard Mill, a recycled cardboard manufacturer in the Western Balkans region.

According to Harrisons, “Umka will use the proceeds to finance a part of the investment for expansion of its manufacturing capacity through an upgrade of the existing cardboard machine.”

Harrisons’ team included Lawyers Ines Matijevic-Papulin and Mina Markovic.