Category: Serbia

The Law amending the Law on Mining and Geological Exploration (Official Gazette of RS no. 40/2021) entered into force on 30 April 2021 and most important changes refer to specification of certain solutions and more detailed normative regulation of individual issues, harmonisation with legal regulations in the field of environmental protection, introduction of e-business etc.

Amendments to the Law imply partial harmonisation with the regulations of the European Union and they have been enacted in accordance with the National Programme for the Adoption of the Acquis (2018 – 2021).

Definitions of certain terms have been changed, such as mineral raw materials, geological research area, exploration license holder, exploitation field, and new terms have been introduced such as collateral, investment agreement and preparatory works.

It is now established that geological exploration and exploitation of mineral raw materials are in public interest and if exploitation is done in a protected area or an ecological network area, public interest and significance are determined under the law regulating protection of nature.

It is also prescribed that geological exploration works without the consent of owner and/or user may not be done at a distance below one hundred meters:

• from residential buildings, except for engineering-geological, geotechnical and hydrological explorations;
• from facilities in public use, such as hospitals, care homes (nursing homes, facilities for people with disabilities etc.), religious objects, cemeteries, cultural institutions, schools, faculties, students’ homes etc, except for engineering-geological, geotechnical and hydrological explorations.

Chamber of Mining and Geology Engineers of Serbia

A novelty is also the establishment of Chamber of Mining and Geology Engineers of Serbia for improvement of conditions for performance of professional activities in the field of mining and geology, designing, geology explorations, building of mining facilities and other fields relevant for mining and geology of the Republic of Serbia, protection of guild and individual interests, improvement of service rendering and for realisation of all other goals that improve expertise and professionalism of work. Chamber bodies, Chamber financing and qualification of competent person for geology are specially regulated.

An individual article of the Law amending the Law on Mining and Geological Exploration stipulates that the Minister will, within 60 days upon entry into force of the law, establish Interim administration of the Chamber of Mining and Geology Engineers of Serbia.

Pan-European Reserves and Resources Reporting Code (PERC)

It is now envisaged that classification of resources and reserves of mineral raw materials will be done in accordance with the current version of the Pan-European Reserves and Resources Reporting Code.

E-mining and geology

By amendments to the Law, provisions on electronic business have been introduced and the possibility to submit acts in form of electronic document, through single electronic mailbox. In this manner, the parties will be able to run electronic communication with the ministry in charge of geological explorations and/or mining (“the Ministry“) i.e. documents and information will be submitted electronically and in accordance with the law regulating electronic document. However, the application of provisions referring to electronic procedure has been postponed until the creation of software that supports this system.

Transfer of issued certificates

Certificates issued within the Ministry’s scope of competence that may be transferred from one company to another are specified in detail, and the procedure regarding submitted requests and terms of transfer have been additionally defined, as well as the procedure and necessary requirements for transferring the certificate on reserves.

Approval for applied geological explorations

Provisions regulating the approval for applied geological explorations have been amended so that the insight into cadastre of research areas and exploitation fields is no longer done. Also, an obligation has been introduced for the applicant to submit a letter of intent of the bank or company from the group where the applicant operates or statement from the company that the bill of exchange will be submitted in a prescribed deadline. The legislator has thus intended to reduce the number of companies applying for approval from the competence of the Ministry and which companies do not have sufficient funds or interest to perform geological explorations.

Inspection supervision

Provisions of the Law referring to mining and geology inspections have been harmonised with the Law on Inspection Supervision, provisions regulating the qualifications of persons performing the jobs of geology and mining inspectors have been modified, as well as their rights, duties and powers in performance of inspection supervision.

Other amendments

In addition, the amendments to the Law more precisely specify the conditions for rejection of request for approval for applied geological explorations, as well as exploration deadlines, they regulate in detail the procedure for approval of retention of right to exploitation field, and the difference between exploitation field and exploitation area and protective area has been defined more clearly. Additional reasons have been stipulated for competent authority to cancel the decision on approval for exploration before the expiry of specified exploration deadline, so the law now prescribes 14 instead of nine reasons.

It is now envisaged that the Ministry may dispose of the results of geological explorations, as well as documents that contain geological results in case where the exploration licence holder no longer exists and the ownership of results cannot be determined.

For certificates on reserves and resources issued before entry into force of the law, the deadline of six years to apply for approval for exploitation and/or exploitation field starts on the day of entry into force of this law, except for certificates issued before 1 January 2000.

On the day of entry into force of this law, the Republic of Serbia will become the holder of licence for geological explorations and certificates on reserves and resources issued before 1 January 2000, if based on such certificates licence holders or their successors did not provide approval for construction of mining facilities and/or performance of mining works and approval for use of mining facilities.

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 Jovana Milic, Senior Associate, PR Legal

Intellectual property is usually perceived through three main rights: copyright, patent and trademarks. Sensitive market-relevant information is usually perceived just as a benefit, but rarely as a right. Protection of trade secrets certainly deserves more attention. To make it easier to all market players to easily comprehend this right and for authorities to apply it, Serbia adopted a new Law on Protection of Trade Secrets, which came into force on 5 June 2020 (the “New Law”). The main reason for the new regulation, as proclaimed by the lawmakers, is the alignment with the EU acquis (especially, the Directive (EU) 2016/943 of the European Parliament and of the Council of 8 June 2016).

The previous legislation provided full protection. However, the New Law brings a few significant changes.

A face-lifted definition  

The New Law specifies which information enjoys protection as trade secret and under what conditions. According to the updated definition, information must meet the following conditions:

• The information is secret because it is not generally known or easily accessible to persons who usually come into contact with this type of information during their activities;

• It has commercial value; and

• The person owning it has taken reasonable measures to preserve its confidentiality.

Unlike the previous law, the New Law provides examples of measures for preserving the confidentiality of trade secrets. These are, among others:

• internal acts on the handling of trade secrets and the rights and obligations of persons who handle them, physical or electronic protection of access to business secrets,

• marking documents as “confidential” or with a similar mark, and

• conclusion of non-disclosure agreements (NDA).

When is it allowed to obtain someone else’s trade secret?

The New Law introduces three new specific grounds and prescribes that obtaining someone else’s trade secret will be lawful if the information is obtained:

• by independent discovery or creation;

• by “reverse engineering”, unless prohibited under separate grounds; and

• by exercising employees’ rights to information and consultation following special employment regulations.

When is it forbidden to obtain, use and disclose someone else’s trade secret?

The New Law regulates the acts of trade secret infringement in more detail. Accordingly, a trade secret is illegally appropriated if it has been obtained by unauthorized access, misappropriation or duplication of documents, objects, materials, substances or electronic files which contain a business secret or from which confidential information can be derived, or by other actions contrary to the good business practices.

The use or disclosure of a trade secret is forbidden if done by a person who obtained the trade secret illegally, who has breached the confidentiality agreement or another obligation restricting the use of the trade secret.

As a novelty, the New Law specifies that the production and sale of infringing goods is also considered as the illegal use of trade secrets if the person who performed those activities knew or could have known the trade secret was used illegally.

What is the scope of judicial protection of a trade secret?

Court protection is guaranteed for trade secret violation. Like for patents and trademarks, civil proceedings can be initiated even in cases where there is a likelihood of infringement.

How is damage compensation regulated?

The New Law stipulates that compensation for damage can be claimed according to general rules and explicitly stipulates that compensation for non-pecuniary damage can be claimed as well.

It is no longer possible to claim a remuneration up to three times the amount the owner of the business secret would have typically received for legal use of the confidential information instead of damages when the violation occurred intentionally.

What is the deadline for filing a lawsuit against violation of a business secret?

The New Law extends the deadlines within which judicial protection of business secrets can be requested – a lawsuit may be filed within one year from the day the proprietor learned of the infringement and the person that committed it, but no later than within five years from the day of the breach or the day of the last violation if the violation is committed continuously.

Do foreign persons have the right to protection of business secrets in Serbia?

While foreign legal and natural persons were fully equal to domestic persons the New Law limits protection by stipulating those foreign entities have the same rights as domestic ones if that arises from international agreements applicable in Serbia (e.g. the EU residents are protected under the Stabilisation and Association Agreement Serbia entered into with the EU) or from the principle of reciprocity. The reciprocity must be proven by a person who claims it exists.

What are the sanctions for trade secret violation?

Besides civil protection, the infringers can also be fined in criminal-like procedures. Fines for legal entities can go up to EUR 25,500. The New Law introduces the liability of natural persons and entrepreneurs as well. They can be fined up to EUR 4,250.

The goods produced or put into circulation by trade secret breach can be destroyed, and items that were used to commit the acts of trade secret infringement are to be confiscated.

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, independent Attorney at Law in cooperation with Karanovic & Partners

Andjelka Radovanovic has joined NSTLaw as Senior Associate and will head the firm’s Commercial Practice.

According to NSTLaw, Radovanovic “joins the firm with her client base and will be responsible for further growing the joint business. Despite the covid situation over the past year, NSTLaw has achieved excellent results and Andjelka will strengthen the Corporate team in particular.”

Radovanovic has previously spent almost three years with Joksovic, Stojanovic & Partners, two years with Andric, and has been practicing law solo for over five years. She obtained her Bachelor’s degree in law from the University of Belgrade’s Faculty of Law.

Karanovic & Partners has advised Take-Two Interactive on its acquisition of Serbian mobile game developer Nordeus.

Nordeus is based in Belgrade and is best known for Top Eleven, a mobile soccer management game with over 240 million registered users. Take-Two Interactive is a developer, publisher, and marketer of interactive entertainment, developing and publishing products through, among others, Rockstar Games, 2K, Private Division, Social Point, and Playdots.

According to Take-Two, the total consideration for the deal is up to USD 378 million in cash, stock, and a potential earn-out. It further informed that “the upfront price of USD 225 million is comprised of cash and USD 90 million in newly issued shares of Take-Two common stock.”

“Our investment in Nordeus strengthens further Take-Two’s mobile game business, is highly complementary to Social Point and Playdots, and broadens our sports portfolio with our first-ever soccer offerings,” commented Executive Vice President and Head of Strategy and Independent Publishing for Take-Two Michael Worosz.

Karanovic & Partners’ team included Senior Partner Rastko Petakovic, Partners Milos Jakovljevic and Goran Radosevic, Senior Associate Marko Culafic, and Associate Miljana Tomic.

Karanovic & Partners did not respond to an inquiry about the deal.

Milosevic Law Firm has advised Vocarescar d.o.o. Beograd on the acquisition of Vocar Merosina, a fruit cold storage company based in southern Serbia.

According to Milosevic, the transaction “will provide a significant boost for the growth and development of agricultural activities in this region of Serbia.”

Milosevic’s team included Partner Vladimir Milosevic, Senior Counsel Milinko Mijatovic, and Senior Associate Sasa Radosavljev.

Dragana Bajic has joined the Belgrade office of CMS as Partner and new Head of Employment and Data Protection.

Bajic joins from Kinstellar, where she was Counsel and Head of Regional Employment Practice, a role she held since May 2020. She first joined Kinstellar in 2013, as Senior Associate, after spending eight years with Wolf Theiss. Her past experiences also include a two-year traineeship with Schoenherr in Belgrade.

According to CMS, Bajic will “help grow our practice’s footprint in the local and regional markets based on her extensive previous experience.”

In April 2021, the National Assembly of the Republic of Serbia passed a set of new laws in the field of mining and energy, including the new Law on Energy Efficiency and Rational Use of Energy (hereinafter “the Law”), which entered into force on April 30, 2021.

With this Law, the Republic of Serbia harmonizes its regulations in the field of energy with the new EU directives in this sector. The Law is the starting point for further directing the public authorities, the economic sector, but also the population, to raise awareness of the importance of efficient and rational use of energy, by which the Republic of Serbia seeks to approach the results of EU countries when it comes to energy efficiency and reduction of harmful effects from this sector on climate change and the environment.

The Law aims to create conditions for efficient use of energy and improvement of energy efficiency, which will contribute to energy savings and security of supply, reduce the impact of the energy sector on the environment and climate change, sustainable use of natural and other resources, increase economic competitiveness, improve conditions for economic development and reducing energy poverty.

The Republic of Serbia has recognized the problem in the manner of energy use, which is spread on all levels, from public authorities to individual households. The consequences of the current state are primarily related to large, irreversible energy losses, which occur due to poor (obsolete) construction and technical solutions on existing facilities, but also due to the use of inefficient sources. In addition to energy waste, the consequences are a greater burden on the energy sector in production, high monetary costs and losses, but also a greater harmful impact on the environment, which has a significant negative impact on adverse climate change. 

The Law aims to improve the state in the energy sector, regulating the conditions and manner of efficient use of energy and energy sources, energy efficiency policy, introduces an energy management system, prescribes energy efficiency policy measures, regulates financing, incentives, and other measures in this area, i.e. other questions related to efficient use of energy.

The Law establishes a system of energy management, which represents a system of organized energy management, and includes the broadest set of measures and activities and a system of organized monitoring and analysis of energy activities and energy consumption.

The obligors of the energy management system will be determined on the basis of the criteria prescribed by the Government. At this moment, it is known that the obligors of the system will be companies and public companies from the production, trade and services sectors, in case they exceed the annual energy consumption higher than the quantity that will be prescribed. In addition, the obligors will be local self-government units and city municipalities with more than 20,000 inhabitants, as well as public authorities.

To the payers of the system, the Law imposes a number of obligations related to the monitoring analysis of energy consumption, bringing various planning, internal acts, and the obligation of appointing energy managers, as specially licenced experts. For non-compliance with future obligations, offences with fines are prescribed.

For the purpose of elaboration and implementation of the Law, a number of bylaws, rulebooks and regulations are expected to be adopted, while special attention will be paid to strategies, programs and plans, which will precisely determine the energy efficiency policy. The deadline for the adoption of bylaws is 18 months from the date the Law entered into force. 

This Law envisages the founding of the Administration for Financing and Encouragement of Energy Efficiency within the Ministry, instead of the, so far, Budget’s Fund for Improving Energy Efficiency. According to the Law, the Administration will start its operations no later than 12 months from the date the Law entered into force, while the Government’s plan is to be formed by June 2021.

The Administration has been entrusted with a number of tasks related to the financing of efficient use of energy and the implementation of energy efficiency measures. Public attention is particularly focused on various forms of financing and incentives (subsidies) for energy efficiency improvement.

Based on public invitations, legal entities and individuals from the Republic of Serbia will be able to use subsidies, among others, for installation of efficient biomass and gas boilers, isolation systems and carpentry. The participation of citizens in these activities shall be 50 percent, while the rest of the amount shall be financed by the Government and local self-government units. The bylaw necessary for the implementation of subsidies will be adopted within 6 months from the date when the Administration begins to work.

The Law pays special attention to the regulation of energy labelling and sets requirements for eco-design, which refers to the way of labelling devices that can be found on the market, and which affect energy consumption, therefore, it here also opens the possibility for other incentives and ease to the economy.

By Nemanja Aleksic, Founding Partner, Aleksic & Associates

The fee for 2021 is determined by the decision of competent authority on basis of applications of payers that are obliged to submit them no later than 31 July 2021.

The application is filed on the prescribed forms where applicants enter their information, degree of negative impact on the environment – according to classification contained in special regulation, and mark the size of legal entity – according to the regulations on accounting.

Application in Form 1 can be filed electronically, through LPA portal, or in paper form. Submission of Form 2 is not possible in electronic form, hence the application is done exclusively in paper.

For determining of fee for 2021, the information on business profit for 2020 needs to be entered.

If a payer performs the activity in the territory of several local self-government units, the application is filed to responsible authority on the territory of each of the local self-government units where the activities are performed.

Please be reminded that payers are obliged, before the fee for 2021 is determined, to pay an advance fee in equal monthly installments, within 15 days upon the expiry of the month and in the amount of monthly fee in the preceding year.

Who are the payers?

The payers of this fee are:

1. Legal entities and entrepreneurs performing certain activities with impact on the environment i.e. natural person making an impact on the environment;
2. Owners of freight vehicles and/or persons carrying out transport of oil and oil derivatives, i.e. raw materials, products, and semi-products of chemical and other hazardous substances from industry or for the industry in the territory of local self-government unit with the status of the endangered environment on the territory of relevance for the Republic of Serbia.

According to the prevailing actions of responsible authorities and according to certain expert comments, the payers also include: associations and other non-profit organizations; companies in bankruptcy or liquidation procedure; flat rate taxpayers; branches of foreign companies; entrepreneurs who temporarily unregistered their activity; legal entity i.e. entrepreneur who ceased to perform the activity during the period that the fee amount is determined, for the period of activity performance.

On the other hand, the following persons are not deemed as fee payers: registered farm; a natural person who is VAT payer; inactive legal entities; entrepreneurs who registered temporary cessation of performance of activity; users of budget funds; residential buildings; organizations of mandatory social insurance; churches and religious communities; representative offices of foreign legal entities.

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 Natalija Djukic, Associate, PR Legal

On 20 April 2021, the National Assembly of the Republic of Serbia enacted the Law on Gender Equality and amendments to the Law on Prohibition of Discrimination. Both laws are published in the Official Gazette of RS no. 52 of 24 May 2021 and will enter into force on 1 June 2021. The Law on Gender Equality will repeal the Law on Equality of Genders (Official Gazette of RS no. 104/09).

The stated laws were enacted for harmonisation of legislation of the Republic of Serbia with relevant regulations of the European Union, ratified international agreements, generally accepted standards and provisions of relevant Directives of the European Union, and they contain provisions which refer, among others, to working environment and which will be analysed in the upcoming text.

Prohibition of discrimination

The amendments to the Law on Prohibition of Discrimination introduced the definition of employer and it has been determined as a domestic or foreign legal entity or natural person in the public or private sector, which employs or engages for work one or more persons, i.e. an entity which, in state authority, autonomous province body or local self-government unit, performs the duties of the employer on behalf of the Republic of Serbia, autonomous province or local self-government unit.

There is a prescribed obligation for employers to undertake relevant measures if necessary in a particular case to ensure access, reasonably adjusted work place, participation, professional training, and advancement in work of employees who are in unequal position compared to other employees, and especially in regard to persons with disabilities, members of national minorities, women, men, persons with different sexual orientation, gender identity, elderly and other, unless such measures would represent a disproportionate burden for the employer. It has also been specified that the burden is not considered as disproportionate if it has been mitigated by appropriate measures of public policies in the domain of work and employment.

The provisions on discrimination based on age have also been amended and it is now defined that different acting on basis of age shall not be considered discrimination if it is objectively and reasonably justified by a legitimate cause, and especially by legitimately established employment policy, labour market goals, additional education and training, i.e. professional training and if the manners of achieving of such goal are suitable and necessary, as specified in detail by this law.

Gender equality

The Law on Gender Equality prescribes the types of measures for achieving and improvement of gender equality, which can be classified as general and specific. In relation thereto, certain obligations of employers have been defined.

Plan and programme

This law defines that employers with more than 50 employees and engaged persons shall be obliged to define and implement special measures depending on the goals that need to be realised by their definition and implementation.

According to the provisions of this law, special measures are defined and implemented within annual plans or working programmes i.e. in accordance with this and other laws, they are prepared and enacted by employers and, in addition to the elements prescribed by the law, they contain the part referring to the achievement and improvement of gender equality.

The part of plan or programme referring to the realisation of gender equality shall particularly contain: brief assessment of the situation regarding the status of women and men in a public authority body i.e. with the employer, including age, the list of special measures, reasons for introducing special measures and goals achieved thereby, start of application, manner of implementation, control and termination of implementation of special measures.

Reporting on plan and programme adoption

Employers whose plans and programmes are not publicly available shall be obliged to notify the adoption of plan or programme to the Ministry in charge for the field of human rights (“the Ministry”) and to enclose with such report the excerpt from the plan/programme in the part referring to realisation and improvement of gender equality, no later than 15 days after the adoption.

Reporting on plan and programme realisation

The information on plan or programme realisation, in the part referring to realisation of gender equality, represent an integral part of annual report on realisation of annual plan or programme which is, under the law, enacted by employer’s bodies.

The employers whose annual reports on realisation of plan or programme are not publicly available, shall be obliged to notify to the Ministry the adoption of report on realisation of annual plan or programme and along with the report to enclose the excerpt from annual report on realisation of plan or programme – the part referring to realisation of gender equality, no later than 30 days after the day of its adoption, for the purpose of informing and monitoring the realisation of planned activities in this field.

The plan for managing risks from violation of gender equality principles

The obligation to adopt this act is envisaged for public authorities, and it has been prescribed that it may also be enacted by other legal entities and organisations.

The fields where measures are prescribed and implemented

It has been prescribed that in the field of labour, employment and self-employment, the measures shall be implemented with regard to:

• increase of employment and possibility of employment and self-employment;
• equal opportunities in the field of employment and work and evaluation of the overall value of unpaid household work;
• structure of employers’ managing and monitoring bodies;
• prohibition of employment termination in certain cases – based on sex/gender, maternity leave or leave for child care and absence from work for special child care, as well as for initiated procedure for protection against discrimination, harassment, sexual harassment and sexual extortion;
• prohibition of harassment, sexual harassment and sexual extortion;
• prohibition of gender inequality during leave from work for pregnancy, maternity leave, leave for child care and special child care;
• prohibition of unequal salary for the same work or work of equal value;
• social dialogue and gender equality.

It is obvious that many of these measures are already regulated by other acts such as the Labour Law or Law on Prohibition of Harassment at Work.

A particularly interesting provision is the one prescribing that an employer shall be obliged, upon employee’s return from pregnancy leave, maternity leave, leave for child care, special child care, adoption, foster care, guardianship, to return them to equal or other equivalent jobs, in which manner is done harmonisation with the provisions of Revised ILO Convention no. 183 on Maternity Protection.

Transfer of such employees or delegation to work with another employer is also prohibited if this is less favourable for the employee, unless this was done in accordance with the findings of competent health authority or another competent authority or for organisational changes with the employer, all in accordance with the law.

What remains open is – how long does this protection last i.e. how long is the employer prohibited from transferring to other jobs an employee who was absent for the above stated reasons.

Leave from work for pregnancy, maternity leave, leave for child care and special child care, paternity and maternity (parenthood), adoption, fostering, guardianship, may not be a reason for reducing the right to:

• professional training and additional education;
• advancement and acquiring higher title on basis of met requirements, under the law;
• use of all improvements of work conditions provided during the leave.

The period of employee’s absence from work for pregnancy, maternity leave, leave for child care and special child care will not be included in assessment of success at work in the overall period where success at work is estimated.

Registration of information on gender equality realisation

For monitoring and realising gender equality and reporting thereon, employers are obliged to record the information grouped by gender, which are expressed in numbers or percentage and may not contain personal information.

The law enlists the information that are recorded in a special form prescribed by the Ministry, which also contains every change of such information that is entered within eight working days after the change had occurred. Employers are also obliged to allow insight into the recorded information to competent inspection that is in charge of inspection supervision in this field under the law, as well as to the Ministry upon request, in a manner and in accordance with personal data protection.

Reporting on realisation of gender equality

The law prescribes obligation for employers to prepare annual reports on realisation of gender equality which contain, among the above mentioned filled-in form, the assessment of state regarding the realised gender equality with the employer, including the reasons why the prescribed balance of women and men in employer’s body compositions has not been achieved, if applicable.

Employers are obliged to submit the report to the Ministry no later than 15 January of the current year for the preceding year.

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 Jovana Milic, Senior Associate, PR Legal

Dragan Lupsic, formerly a Partner in public affairs & strategic communications company Flagship, has joined PwC Serbia as Director of Legal Services.

“I am really excited and inspired to be joining such a great network of partnership firms,” Lupsic said. “I decided to leverage all my knowledge and experience in different companies and industries to support PwC’s practice and further both business development and public affairs, while learning from some of the most diverse and insightful people around within the wide PwC network.”

Prior to joining PwC, Lupsic spent one year at Flagship. Earlier still, he worked at Coca-Cola HBC, which he joined as a Legal Director for Serbia, Montenegro, and North Macedonia in 2010, and where he was appointed to Commercial Director (Premium Spirits & HoReCa & New Channels Development) in 2018. Before Coca-Cola, he worked for JTI, first as a Legal Associate and then as a Legal Manager Adriatica.

He graduated in International Law from the University of Belgrade in 2004 and in EU Competition Law from King’s College London in 2015.