Serbia Introduces an E-Cadastre Serbia Introduces an E-Cadastre | News | Karanović & Nikolić https://www.karanovic-nikolic.com/knnews/Pages/2018/July/serbia-introduces-e-cadastre.aspxSerbia Introduces an E-Cadastre Serbia Introduces an E-Cadastre | News | Karanović & Nikolić string;#02/07/2018<p style="text-align:justify;">​The Law on the Registration Procedure with the Cadastre of Real Estate and Utilities (the "<strong>Law</strong>") entered into force on 8 June 2018. The Law aims to introduce significant innovations, primarily concerning the method of filing applications and documents with the cadastre and the relation between the cadastre and other authorities, as well as deadlines for rendering decisions. This, so far, time consuming and complicated procedure is expected to be accelerated and simplified by introducing the obligation for various authorities to submit their documents to the cadastre electronically, <em>ex officio</em>, within short deadlines.</p><p style="text-align:justify;">The main reasons for the adoption of the Law are increasing the efficiency of the Real Estate Cadastre and simplifying the registration procedure by prescribing the possibility of submitting a request for registration via e-Service.</p><h2>Who can initiate the registration procedure?</h2><p style="text-align:justify;">The registration procedure can be initiated by public notaries, courts, bailiffs and other authorities by filing a request for registration at the Real Estate Cadastre Office ("<strong>Cadastre</strong>"). The deadlines to file and submit documents are short. The procedure can also be initiated upon the client's request, which can be submitted via e-service.</p><h2>Where is the procedure initiated?</h2><p style="text-align:justify;">The procedure is initiated online, via an e-service which is a unique central system through which submissions, evidence and acts during the process of registration before the Cadastre are submitted in form of an electronic documents.</p><p style="text-align:justify;">The submission of a request for registration in paper form remains an option until 31 December 2020. The Cadastre is obliged to digitalize such documentation as well as to confirm that digitalised copies are identical to the originals by using an electronic qualified signature, in which way the copy has the same legal effect as the original.</p><p style="text-align:justify;">As an exception, there will be option to submit hard copies of appeals and other legal remedies, along with related evidence, even after 31 December 2020.</p><h2>What is the new procedure?</h2><p style="text-align:justify;">After delivering the documents to the Cadastre, the registration procedure is initiated. The Cadastre delivers the documents to the Tax authority and the local self-government unit.</p><p style="text-align:justify;">In the next step, the Cadastre verifies if the formal conditions for registration are met and renders a resolution by which a change is registered.</p><p style="text-align:justify;">This way, the Law introduces a higher degree of responsibility for public notaries and other bodies who issue, confirm, certify or verify documents which represent a title for registration - as the Cadastre is not obliged to verify whether statutory regulations are violated with such documents.</p><p style="text-align:justify;">In case where statutory regulations are violated by document, the Cadastre will perform the registration based on that document but it will immediately inform the competent authority and public prosecutor, if needed, in order to initiate the appropriate procedure for annulment.</p><h2>Where can the Excerpt from the Land Registry be issued?</h2><p style="text-align:justify;">Apart from the Cadastre, public notaries and entities registered in the Register of Geodetic Organizations will be authorised to issue excerpts from the Land Registry.</p><h2>What is the final deadline for the application of the Law?</h2><p style="text-align:justify;">Public notaries are obliged to start the implementation of the Law from 1 July 2018, the courts from 1 January 2020, and other authorities from 1 November 2018.</p><h2>Other significant changes</h2><h3>Real Estate unique identification number</h3><p style="text-align:justify;">A unique identification number for every real estate on the territory of Republic of Serbia is established and registered before the Cadastre in order to increase the reliability of information.</p><h3>Pre-notation of facilities and separate parts of facilities under construction</h3><p style="text-align:justify;">The pre-notation of facilities and separate parts of facilities under construction is not registered in the excerpt from the Land Registry, but in a special pre-notation sheet or separate parts of the facilities under construction registry sheet, without a time limitation for pre-notation.</p><h3>New notations</h3><p style="text-align:justify;">Some of the new notations introduced by the Law include:</p><ul style="text-align:justify;"><li>the existence of a concession agreement;</li><li>the change of the ownership determined by in the land consolidation procedure;</li><li>the procedure of annulment or the revoking of a document based on the which registration was performed;</li><li>registration is granted based on an agreement certified before the court more than 20 years ago; and,</li><li>pledges on movable property which can influence the future acquisition of rights to real estate.</li></ul><h2>Utilities registration</h2><p style="text-align:justify;">The registration of utilities is initiated upon the investor's request or that of another authorised person and <em>ex officio</em> if a study of geodetic works is done by a competent authority, in accordance with construction law.</p><p style="text-align:justify;">Same provisions of this Law related to the notation, pre-notation, competency for registration, registration procedure and court protection are applicable to the utilities register.</p>
Laying the Foundations: ZF Group Building a Factory in Serbia Laying the Foundations: ZF Group Building a Factory in Serbia | News | Karanović & Nikolić https://www.karanovic-nikolic.com/knnews/Pages/2018/June/zf-group-building-factory-pancevo-serbia.aspxLaying the Foundations: ZF Group Building a Factory in Serbia Laying the Foundations: ZF Group Building a Factory in Serbia | News | Karanović & Nikolić string;#21/06/2018<p style="text-align:justify;">The Karanović & Nikolić team, led by Senior Partner <a href="/_layouts/15/FIXUPREDIRECT.ASPX?WebId=de941175-f8d4-4a41-8207-c9aec3e1e3b2&TermSetId=9c3dd502-4f62-4d66-9ef2-684258a8f9ed&TermId=b9c33da1-0e77-43ca-a753-26fb5f08a9c3">Marjan Poljak</a> and Senior Associates ⃰ <a href="/_layouts/15/FIXUPREDIRECT.ASPX?WebId=de941175-f8d4-4a41-8207-c9aec3e1e3b2&TermSetId=9c3dd502-4f62-4d66-9ef2-684258a8f9ed&TermId=f0bdfaa3-363b-4bb9-90d7-7ef343216adb">Ana Stanković</a> and <a href="/_layouts/15/FIXUPREDIRECT.ASPX?WebId=de941175-f8d4-4a41-8207-c9aec3e1e3b2&TermSetId=9c3dd502-4f62-4d66-9ef2-684258a8f9ed&TermId=378a4e82-d957-41e3-9d70-c0872ad948d8">Ana Luković</a>, advised <a href="https://www.zf.com/corporate/en_de/homepage/homepage.html">ZF Friedrichshafen</a> AG on the project of opening an electric vehicle parts factory in Pančevo, Serbia. The German company, a global leader specialising in the design, research and development, and manufacturing activities in the automotive industry, laid the foundations and began construction on 21 June 2018.</p><p style="text-align:justify;">Karanović & Nikolić advised ZF in this greenfield investment on all local law aspects of this project. The team provided full support in a number of different areas, including corporate, real estate, employment etc.</p><p style="text-align:justify;">The new 25.000 square metres factory, which is being built on a land parcel of 10.8 hectares, will produce parts for electric and hybrid-electric vehicles and will service premium automotive manufacturers. The project will be realized in two stages and will open more than 1,000 new jobs. The planned investment amounts to more than EUR 100 million.</p><p style="text-align:justify;">ZF operates in 40 countries around the world and has a global workforce of over 146,000 employees. In 2017, it recorded sales of EUR 36.4 billion. The company invests more than six percent of its sales in research and development annually, in particular for the development of efficient and electric drivelines.</p><p style="text-align:justify;">ZF group is committed to its Vision Zero – zero accidents and zero emissions being the end goal of all the company's activities.</p><p> </p><p> </p><p>*<span class="ms-rteStyle-Quote">Independent attorneys at law in cooperation with Karanović & Nikolić.</span></p>
The Law on Financial Collaterals – Two Steps Forward, One Step Back The Law on Financial Collaterals – Two Steps Forward, One Step Back | News | Karanović & Nikolić https://www.karanovic-nikolic.com/knnews/Pages/2018/June/serbia-law-financial-collaterals.aspxThe Law on Financial Collaterals – Two Steps Forward, One Step Back The Law on Financial Collaterals – Two Steps Forward, One Step Back | News | Karanović & Nikolić string;#20/06/2018<p>​On 8 June 2018, the <a href="http://www.parlament.gov.rs/national-assembly.467.html">Serbian Parliament</a> adopted the Law on Financial Collateral ("<strong>FC Law</strong>") which will become applicable on 1 January 2019. Financial agreements that are not fulfilled by 1 January 2019 will be implemented pursuant to the rules that were in force before that date.</p><p style="text-align:justify;">Simultaneously, the Insolvency Law ("<strong>Insolvency Law</strong>") was amended to support proper functioning of the FC Law and will also become applicable on 1 January 2019. Insolvency procedures that are ongoing as of 1 January 2019 will be finalized pursuant to the rules that were in force prior to that date.</p><p style="text-align:justify;">The main reason for enacting the FC Law was the establishment of a unified and effective regulatory framework for the use of special collaterals by participants in the financial market in line with the EU Directive on Financial Collateral Arrangements 2002/47/EC ("<strong>Directive</strong>").<strong> </strong>Although the long awaited FC Law should contribute to the further development of the secured loans, financial derivatives and repo markets, the approach taken by the legislature in amending the Insolvency Law has also brought certain negative aspects. </p><p style="text-align:justify;">The <strong>FC Law</strong> introduces the following main novelties:</p><ul style="text-align:justify;"><li><strong>Eligible parties</strong> - the group of eligible parties generally follows the scope set by the Directive, including the Republic of Serbia, the National Bank of Serbia, the EU and its member states, third countries, banks, investment funds, broker-dealers, insurance firms and other financial institutions, the European Central Bank, the International Monetary Fund, European Investment Bank and certain other international development banks and legal entities representing the above parties. General corporations are not included. This exclusion of corporations, although compliant with the option which the Directive allows for EU member states, comes as an unpleasant surprise given that the draft provided for the public discussion included both corporates and individuals when dealing with the other eligible participants. The legislators' stance is that at this stage the less experienced and weaker parties, such as corporate entities and individuals, should not be included due to the still underdeveloped financial market in Serbia. The fact that financial collaterals may not be used in transactions with ordinary corporates is particularly limiting for OTC financial derivatives transactions. This seems to be a missed opportunity, especially if the aim is to promote the development of the OTC financial derivatives market for the purpose of hedging risks.  </li><li><strong>Financial collateral arrangement modalities –</strong>two types of financial collateral arrangements are introduced:<strong> </strong>(i) <em>title transfer arrangement</em> whereby the collateral taker receives full ownership over the collateral, and (ii) <em>security arrangement</em> whereby the ownership over the collateral remains with the collateral provider. Upon the fulfilment of the financial obligation, the collateral taker shall return the received or equivalent collateral to the collateral provider.</li><li><strong>Collateral categories – </strong>the financial collateral arrangement may include <em>cash</em>, <em>financial instruments</em> and <em>credit claims</em>.</li><li><strong>Forex restrictions – </strong>the FC Law is expressly subject to the rules of the Law on Foreign Exchange Operations ("<strong>Forex Law</strong>"). This means that the existing restrictions under the Forex Law will affect application of financial collaterals in cross-border transactions and need to be considered in each case.</li><li><strong>Enforcement of the collateral – </strong>the parties are free to define enforcement events upon the occurrence of which the collateral taker shall be able to realise the collateral in an effective and prompt collection. Specifically, the collateral taker may settle its claim in an out-of-court proceeding and/or set off the claims and obligations between itself and the collateral provider without any prior notice, deadline elapse, participation of the court/other authority or a public auction.</li><li><strong>Close-out netting –</strong> the parties may agree that upon the occurrence of an enforcement event, automatically or at a party's request: (i) the obligations of the parties are accelerated or terminated and replaced by new monetary obligations, and/or (ii) the mutual claims and obligations are netted so that the net amount is paid by the party from whom the larger amount is due to the other party. The close-out netting regime is generally improved compared to what was regulated so far in the Insolvency Law, but only for eligible participants, as explained below.</li><li><strong>Disapplication of insolvency rules – </strong>the rights and obligations under the financial collateral arrangements will be freely performed regardless of the initiation of the insolvency, bankruptcy or reorganisation of the parties. In case the financial collateral arrangement was created or the collateral was provided, acquired, or altered on the day of the initiation of the insolvency or bankruptcy of a party or application of reorganization measure, such legal actions shall be valid and enforceable if the collateral taker proves that it was unaware and should have not been aware of the commencement of said proceedings. </li><li><strong>Application of the FC Law to other financial agreements – </strong>the above rules on close-out netting and disapplication of insolvency claw-back rules are also prescribed for other special financial agreements concluded by the participants in the financial market such as financial derivative agreements, the sale and purchase of securities and other financial instruments, forex swap transactions and other financial contracts which may be prescribed by the National Bank of Serbia. As mentioned, regrettably these rules do not govern the transactions entered into with ordinary corporate entities.</li><li><strong>Adjustment of the insolvency for banks and insurance companies - t</strong>he FC Law further improved insolvency rules by deleting the controversial Article 12 of the Law on Insolvency and Liquidation of Banks and Insurance Companies.</li></ul><p style="text-align:justify;"><strong>Amendments to the Insolvency Law.</strong> To improve the insolvency framework for financial collaterals and other special financial agreements as defined in the FC Law (such as ISDA Master Agreements), the Serbian legislature has undertaken certain amendments to the Insolvency Law. The changes are focused on safeguarding financial collaterals and other special financial agreements defined under the FC Law from the insolvency rules. This includes a number of clarifications and a complete deletion of the earlier special close-out netting provisions and their moving (with certain improvements) to the FC Law. A creditor that settles its claims upon the opening of insolvency proceedings based on a financial collateral agreement or based on a close-out netting under a special financial agreement is bound to notify the court within 8 days from the settlement day.</p><p style="text-align:justify;">Whilst this new approach should bring greater certainty for close-out in the financial transactions among<em> eligible</em> <em>participants</em>, it deteriorates the position for close-out netting in financial agreements that involve a regular corporate entity, such as an ISDA Master Agreement between a bank and a company. The close-out netting in such cases is now left to the general insolvency rules and potentially exposed to cherry-picking by the insolvency administrator. Specifically, with the deletion of special rules from Article 82 of the Insolvency Law, close out netting in financial agreements which include a non-eligible participant (such as a general corporate) rely now on the general rules on set-off. To preserve a set-off right in insolvency, the creditor has to (i) acquire the set-off right before submission of the insolvency petition and (ii) register its claim in the full amount together with the set-off statement during the period for registration of claims. Also, protection against claw back claims is no longer available unless the financial agreement is among eligible participants. </p><p style="text-align:justify;">To sum up, the FC Law and the amendments to the Insolvency Law deliver valuable and progressive developments for the realization of collaterals for the financial obligations of eligible financial market participants. On the other hand, they hinder the enforceability of ISDA Master Agreements or similar close-out netting agreements against Serbian corporate entities in case of insolvency. Therefore, it remains to be seen how these changes will affect financial derivatives, repo transactions and other similar financial arrangements and if the drawbacks will be identified and rectified by the legislators. </p><p style="text-align:justify;"> </p><p style="text-align:justify;"> </p><p style="text-align:justify;"><em class="ms-rteStyle-Quote">The information in this document does not constitute legal advice on any particular matter and is provided for general informational purposes only.</em></p>
Serbia Adopts the Law on Ultimate Beneficial Owners Central Registry Serbia Adopts the Law on Ultimate Beneficial Owners Central Registry | News | Karanović & Nikolić https://www.karanovic-nikolic.com/knnews/Pages/2018/June/serbia_law_ultimate_beneficial_owners_central_registry.aspxSerbia Adopts the Law on Ultimate Beneficial Owners Central Registry Serbia Adopts the Law on Ultimate Beneficial Owners Central Registry | News | Karanović & Nikolić string;#19/06/2018<p style="text-align:justify;">On 25 May, the <a href="http://www.parlament.gov.rs/national-assembly.467.html">Serbian Parliament</a> adopted the Law on Ultimate Beneficial Owners Central Registry ("Law") and it entered into force on 8 June 2018.</p><p style="text-align:justify;">This Law was adopted in order to harmonise domestic legislation with international standards and to improve the existing system of detecting and preventing money laundering and the financing of terrorism. The Law introduces a single, public, electronic database maintained by the <a href="http://www.apr.gov.rs/eng/Home.aspx">Serbian Business Registers Agency</a> ("SBRA"), containing information on natural persons which are the ultimate beneficial owners of the companies ("Register").</p><p style="text-align:justify;">Companies incorporated before 31 December 2018 are obliged to prepare and keep documentation regarding their ultimate beneficial owners at their offices, while new companies are obliged to register this information with the Register within 15 days as of their incorporation. However, all companies will have to be registered in such manner by 31 January 2019.</p><h2 style="text-align:justify;">Who does this Law influence?</h2><p style="text-align:justify;">This Law is applicable to the following entities registered in Serbia ("Company"): </p><ul style="text-align:justify;"><li>companies, excluding public joint-stock companies;</li><li>cooperatives;</li><li>branch offices of foreign companies;</li><li>business and other associations excluding political parties, trade unions, sports organizations and associations, churches and religious communities;</li><li>foundations and endowments;</li><li>institutions; and</li><li>representative offices of foreign companies, associations, foundations and endowments.</li></ul><h2 style="text-align:justify;">Who is the ultimate beneficial owner?</h2><p style="text-align:justify;">The ultimate beneficial owner of the company ("UBO") is a natural person which:</p><ul style="text-align:justify;"><li>has direct or indirect ownership of at least 25% of the shares, stocks, voting or other rights, under which the natural person participates in the company's management or in the company's capital with 25% or more share;</li><li>has direct or indirect prevailing influence on business management and decision making;</li><li>indirectly provided or provides funds to the company, on the basis of which the natural person has significant influence on the company's management bodies, in relation to decisions regarding financing and business operations;</li><li>is a founder, trustee, protector, user (if determined) or a person that has a dominant position in the management of the trust or another foreign law entity; and,</li><li>is a registered representative of cooperatives, associations, foundations, endowments and institutions, if the authorised representative has not registered another natural person as the ultimate beneficial owner. </li></ul><p style="text-align:justify;">If none of these criteria is applicable, the UBO is the company's registered representative i.e. the person that is registered as member of the company's body (excluding the item (v)).</p><h2 style="text-align:justify;">What information will the Register contain?</h2><p style="text-align:justify;">The Register will contain the following information ("Information") in relation to the UBO:</p><ul style="text-align:justify;"><li>in the case of Serbian citizens, the person's name, identification number and country of residence;</li><li>in the case of foreigners, the person's name, passport number and issuing country and / or their personal number and / or identity card number and issuing country, time and place of birth, the country of residence and citizenship; and,</li><li>the title for acquiring UBO status.</li></ul><h2 style="text-align:justify;">What needs to be done?</h2><p style="text-align:justify;">The Company is obliged to: </p><ul style="text-align:justify;"><li>determine the UBO and have in possession the data and documents according to which the UBO is determined ("Documents"), until 8 July 2018;</li><li>keep the Documents for a period of ten years following the day of registration; and,</li><li>provide the Documents upon request to the competent state authority and National Bank of Serbia.</li></ul><p style="text-align:justify;">The Company's authorised person is obliged to:</p><ul style="text-align:justify;"><li>to register the Information until 31 January 2019 with the SBRA, using a qualified electronic signature (for companies incorporated by 31 December 2018);</li><li>register the changes to the Information with SBRA, within 15 days from the day of change; and,</li><li>register the Information with the SBRA, within 15 days from the day of the company's incorporation (for companies incorporated after 31 December 2018).</li></ul><p style="text-align:justify;">It should be noted that the SBRA is obliged to establish the Register until 31 December 2018.</p><p style="text-align:justify;">Also, relevant by-laws need to be adopted within three months from the day the Law enters into force - which should provide more detailed information on the implementation of the Law.</p><h2 style="text-align:justify;">What are the sanctions?</h2><p style="text-align:justify;">The Law prescribes monetary fines in the range from RSD 500,000 (approx. EUR 4,240) to RSD 2,000,000 (approx. EUR 16,950) for the company and monetary fines in the range from RSD 50,000 (approx. EUR 420) to RSD 150,000 (approx. EUR 1,270) for the company's responsible person if the Company does not:</p><ul style="text-align:justify;"><li>register Information within prescribed deadline; or,</li><li>keep the Documents for the prescribed period.</li></ul><p style="text-align:justify;">In addition, the Law prescribes felony charges for a person which, in order to hide the UBO, does not register the Information, registers false Information, changes or removes the correct Information. For this felony there is a prescribed prison sentence in the range from 3 months to 5 years.</p><p style="text-align:justify;"> </p><p style="text-align:justify;"><span></span> </p><p style="text-align:justify;"><em class="ms-rteStyle-Quote">The information in this document does not constitute legal advice on any particular matter and is provided for general informational purposes only.</em></p>
PPF Group Acquiring Telenor Banka PPF Group Acquiring Telenor Banka | News | Karanović & Nikolić https://www.karanovic-nikolic.com/knnews/Pages/2018/June/ppf-acquiring-telenor-banka-serbia.aspxPPF Group Acquiring Telenor Banka PPF Group Acquiring Telenor Banka | News | Karanović & Nikolić string;#18/06/2018<p style="text-align:justify;">PPF Group, a Czech investment firm, signed a contract with Telenor Group, the Norwegian telecoms giant, on the acquisition of 100% of the shares in Telenor Banka, the first online bank in Serbia. </p><p style="text-align:justify;">The Karanović & Nikolić legal team – led by partner <a href="/people/milos-jakovljevic">Miloš Jakovljević</a><span lang="EN-GB"> ⃰ and associates </span><a href="/people/sava-draca">Sava Drača</a><span lang="EN-GB"> ⃰ and </span><a href="/people/marija-vicic">Marija Vićić</a> ⃰, having previously advised PPF Group on the <a href="/knnews/Pages/2018/March/PPF-Acquires-Telenor-CEE-Operations.aspx"><span lang="EN-GB" style="text-decoration:underline;">EUR 2.8 billion acquisition of Telenor's assets in Central and Eastern Europe</span></a>, is advising the Czech company once again in this transaction. The acquisition of Telenor Banka is currently subject to regulatory approval. </p><p style="text-align:justify;"><a href="https://www.ppf.eu/en/homepage"><span lang="EN-GB" style="text-decoration:underline;">PPF Group</span></a> is the largest private investment group in CEE. The company operates in 22 countries across three continents and invests into multiple markets such as banking and financial services, insurance, telecommunications, biotechnology, real estate, mining and agriculture. The PPF Group owns assets exceeding EUR 38 billion. </p><p style="text-align:justify;"><a href="http://www.telenorbanka.rs/"><span lang="EN-GB" style="text-decoration:underline;">Telenor Banka</span></a> was the first bank in Serbia to introduce mobile and online banking and a member of <a href="https://www.telenor.com/"><span lang="EN-GB" style="text-decoration:underline;">Telenor Group</span></a> in 2013, after the group acquired it from KBC Bank Serbia. Its portfolio includes more than 390,000 clients and at the end of 2017 the bank had assets under management worth EUR 126 million.</p><p style="text-align:justify;"> </p><p style="text-align:justify;"> </p><p>*Independent attorney at law in cooperation with Karanović & Nikolić.</p>
Serbia Amends Company Law Serbia Amends Company Law | News | Karanović & Nikolić https://www.karanovic-nikolic.com/knnews/Pages/2018/June/serbia-amends-company-law.aspxSerbia Amends Company Law Serbia Amends Company Law | News | Karanović & Nikolić string;#12/06/2018<p style="text-align:justify;"><a href="http://www.parlament.gov.rs/national-assembly.467.html"><span lang="EN-GB" style="text-decoration:underline;">The Serbian Parliament</span></a> adopted amendments to the Serbian Company Law (<strong>Law</strong>) on 8 June 2018, and they were published in the official journal on the same date.  </p><p style="text-align:justify;">This is the first overhaul of the Serbian Company Law since it was enacted back in 2011. Most of the amendments relate to the introduction of the concepts required for Serbia's accession to the EU (such as cross-border merger and European company forms). However, a lot of the changes have been made in an attempt to resolve the issues which occurred in the practical implementation of the previous Law. </p><p style="text-align:justify;">The Law's entry into force is planned in three phases, and is somewhat complicated:</p><ul style="text-align:justify;"><li>immediate application, as of 9 June 2018, is envisaged for provisions relating to the buy-out of shares and determining the market value of the shares (see section "Valuation of shares in joint stock companies" below);</li><li>amendments relating to the harmonisation with EU legislation will apply from 1 January 2022; and,</li><li>all other provisions will apply as of 1 October 2018. </li></ul><p style="text-align:justify;">Below is an overview of the most important changes. </p><h2>Business names</h2><p style="text-align:justify;">Under the amendments to the Law: </p><ol style="text-align:justify;"><li>an abbreviated business name of a company can now contain an acronym; and,</li><li>a business name cannot contain the designation "SRB" without the approval of the <a href="http://www.priv.rs/Naslovna"><span lang="EN-GB" style="text-decoration:underline;">Ministry of Economy</span></a>. The approval of the said Ministry was, until now, required for designations with the full name of "Serbia". However, this approval requirement has now been extended to the abbreviation "SRB" as well, since it was broadly used in business practice as a means of circumventing the approval requirement. As for companies containing the designation "SRB" in their names, the relevant ministry is authorised to (and it will most likely do so), once this provision takes effect, request that each of these companies delete this designation from their registered name unless they obtain approval in the meantime. </li></ol><h2>E-address</h2><p style="text-align:justify;">Until 1 October 2019, all companies will have to register their e-mail addresses with the companies register. </p><h2>Distribution of dividends</h2><p style="text-align:justify;">The amended Law introduces a deadline for the payment of dividends after being declared. The deadline is 6 months following the decision on declaring dividends. </p><h2>Assets of significant value </h2><p style="text-align:justify;">The amendments to the Law attempt to introduce some clarifications to the provisions concerning the disposal of assets of significant value i.e. assets exceeding 30% of the company's asset value (which require shareholders' meeting approval and in turn trigger the rights of dissenting minority shareholders to sell their shares to the company). This concept has been the source of tensions between the management and the minority shareholders ever since it was introduced into the Serbian legal system back in 2004. The interest of the management and the majority shareholders has been to limit the application of this provision (in turn, limiting the right of minority shareholders to force a sale of their shares), while the minority shareholders' interests have been the opposite. </p><p style="text-align:justify;">The amendments relate to situations which are most frequent in practice – taking out a loan and granting securities for such a loan. Now, for the purposes of calculating the 30% threshold, the higher amount between (i) the loan value and (ii) the value of each of the securities given for such a loan is to be taken into consideration, and not the sum of each of these individual values. </p><p style="text-align:justify;">While the attempt to bring clarification to this complicated and burdensome concept is certainly welcome, it still remains to be seen whether this will bring any significant benefit in practice. </p><h2>Transactions involving personal interest </h2><p style="text-align:justify;">The amendments introduce changes to the internal approval procedure for transactions involving the personal interest of the shareholders or directors:</p><ul style="text-align:justify;"><li>If the value of the transaction is less than 10% of the company's book asset value, no approval by the disinterested shareholders or directors is needed. </li><li>If the value of the transaction involving personal interest is greater than 10% of the company's book assets value, the approval procedure is made more stringent:  </li></ul><ol dir="ltr" style="text-align:justify;"><ol><ol><li>as part of the approval procedure, a company must obtain an assessment by an authorised court expert, auditor etc. of the market value of the assets subject to the transaction; and, </li><li>once the approval has been obtained, the company must publish on its website, or on the website of the <a href="/knnews/Pages/2017/11/Serbian-Business-Registration-Agency-Implements-Provisions-on-Company-Law-on-Compulsory-Liquidation.aspx"><span lang="EN-GB" style="text-decoration:underline;">Business Registers Agency</span></a>, detailed information on the transaction and the personal interest involved.</li></ol></ol></ol><h2>Branches of Serbian Companies</h2><p style="text-align:justify;">The amendments introduce the requirement (so far, it was an option) for Serbian companies to register all their branch offices in Serbia with the companies' register. Serbian companies that have non-registered branches in Serbia will have a one-year period to register them. </p><h2>Minority shareholders in limited liability companies</h2><ul style="text-align:justify;"><li style="text-align:justify;">The shareholding interest threshold authorising a shareholder to request a convening of the shareholders' meeting has been decreased from 20% to 10%. The company's bylaws can set a lower, but not a higher threshold. </li><li style="text-align:justify;">The shareholding interest threshold authorising a shareholder to put an item on the agenda of the shareholders' meeting has been decreased from 10% to 5%. The company's bylaws can set a lower, but not a higher threshold.</li><li style="text-align:justify;"> The amendments clarify the existing provision enabling voting rights not to be pro-rata to the respective shareholding interests – the amendments confirm that voting rights do not have to be pro-rata to the shareholding interest, but no share can have zero voting rights.</li></ul><h2>Decrease of share capital in limited liability companies</h2><p style="text-align:justify;">According to the amendments, a "regular" version of share capital decrease, which involves payments to shareholders (such as in the case of overcapitalisation) is not possible. Now, share capital decrease is possible only as a matter of, more or less, "accounting" changes – the covering of losses, the creation of reserves etc. </p><p style="text-align:justify;">The amendments to the Law have only formalised the existing practice of the authorities, which prohibited this type of share capital decrease even before these amendments. The expectations of the business community, that such an extremely conservative and ungrounded practice will be terminated by these amendments, did not materialise; to the contrary, we now have a strict legal prohibition against the decrease of share capital in the case of the overcapitalisation of a Serbian limited liability company. </p><h2>Valuation of shares in joint stock companies</h2><p style="text-align:justify;">The conditions for determining the market value of shares in a joint stock company have been changed. The amended Law now prescribes that the market value of shares is the average weighted price of shares on the regulated market in the period of 6 months prior to the issuance of the decision on determining the market value, provided that:</p><ul style="text-align:justify;"><li>in that period, at least 0,5% of the shares were subject to trading on the regulated market; and, </li><li>the trading took place on at least 1/3 of the trading days in each month during that period.</li></ul><p style="text-align:justify;">If the above conditions are met, when determining the value of the shares for the purposes of a buy-out of shares held by dissenting minority shareholders, only the market value should be taken into consideration, and there is no requirement to determine the book or the evaluated value of the shares. </p><p style="text-align:justify;">If there is no market value for the specific shares, the higher amount between the book value and the value evaluated by authorised evaluators is to be paid as the price to the dissenting minority shareholders.</p><p style="text-align:justify;">These amendments apply immediately after the publication of the amendments, i.e. as of 9 June 2018.</p><h2>Harmonisation with EU regulations</h2><p style="text-align:justify;">There are some amendments, in relation to EU integrations, which will enter into force on 1 January 2022. The amended Law:</p><ol style="text-align:justify;"><li>introduces new company forms: Societas Europea, the European joint stock company, and the European economic interest grouping; and,</li><li>enables cross-border mergers of Serbian and EU companies.</li></ol><p> </p><p> </p><p><span class="ms-rteStyle-Quote"><em>The information in this document does not constitute legal advice on any particular matter and is provided for general informational purposes only.</em></span></p><p>​</p>
Karanović & Nikolić Wins the 2017 Deal of the Year Award Karanović & Nikolić Wins the 2017 Deal of the Year Award | News | Karanović & Nikolić https://www.karanovic-nikolic.com/knnews/Pages/2018/June/karanovic-nikolic-wins-ceelm-deal-of-the-year-award.aspxKaranović & Nikolić Wins the 2017 Deal of the Year Award Karanović & Nikolić Wins the 2017 Deal of the Year Award | News | Karanović & Nikolić string;#07/06/2018<p style="text-align:justify;">We are pleased to announce that Karanović & Nikolić has won the 2017 Deal of the Year Award for Serbia for the EBRD and IFC financing of Vetrolektrane Balkana - Čibuk 1 Windfarm. Organized by the renowned <a href="http://ceelegalmatters.com/"><span style="text-decoration:underline;">CEE Legal Matters</span></a> magazine, this is the first year that these awards were held and they are a way of recognizing the biggest and most important deals by leading law firms in Central and Eastern European jurisdictions.</p><p style="text-align:justify;">The prestigious accolade was awarded on 6 June at the CEE Legal Matters Annual Dinner and Awards Banquet in Prague. Before an audience of over 100 senior legal professionals from across the region, <a href="/people/rastko-petakovic">Rastko Petaković, Managing Partner at Karanović & Nikolić</a>, accepted the award on behalf of the firm.</p><p style="text-align:justify;">"It is a huge privilege to receive this prestigious award, which came as a recognition of the enormous effort put in by everyone involved in this landmark deal which marked 2017 and had a huge impact on the energy sector in the region", said Mr. Petaković. "I am particularly proud of our young generation of Karanović & Nikolić partners who led the team and once again proved our firm's dedication to excellence. We would also like to congratulate our clients, the <a href="https://www.ebrd.com/home"><span style="text-decoration:underline;">EBRD</span></a> and <a href="https://www.ifc.org/wps/wcm/connect/corp_ext_content/ifc_external_corporate_site/home"><span style="text-decoration:underline;">IFC</span></a>, and thank them for an opportunity to work on deal of this significance and magnitude."</p><p style="text-align:justify;">The deal for which Karanović & Nikolić won the award is the EUR 215 million financing of Čibuk 1, developed by Vetroelektrane Balkana<strong>.</strong> <strong>With an installed capacity of 158 MW, Čibuk 1 will be the largest windfarm in the Western Balkans. Apart from creating hundreds of new jobs and improving local infrastructure, this project should give a critical contribution to Serbia meeting its commitment to have 27% of its gross energy consumption coming from renewable energy sources by 2020.</strong> </p><p style="text-align:justify;">The Karanović & Nikolić core legal team – led by partners <a href="/_layouts/15/FIXUPREDIRECT.ASPX?WebId=de941175-f8d4-4a41-8207-c9aec3e1e3b2&TermSetId=9c3dd502-4f62-4d66-9ef2-684258a8f9ed&TermId=368acf54-4c94-4ba6-af68-1ac41e1a4cb8"><span style="text-decoration:underline;">Maja Jovančević Šetka</span></a> and <a href="/_layouts/15/FIXUPREDIRECT.ASPX?WebId=de941175-f8d4-4a41-8207-c9aec3e1e3b2&TermSetId=9c3dd502-4f62-4d66-9ef2-684258a8f9ed&TermId=f6c4e26a-dc45-4c1e-9b1d-54ff0409e168"><span style="text-decoration:underline;">Petar Mitrović</span></a>, with partner <a href="/_layouts/15/FIXUPREDIRECT.ASPX?WebId=de941175-f8d4-4a41-8207-c9aec3e1e3b2&TermSetId=9c3dd502-4f62-4d66-9ef2-684258a8f9ed&TermId=3c428a91-491d-43e9-bb88-a2f5c67037e8"><span style="text-decoration:underline;">Katarina Gudurić</span></a> and associate <a href="/_layouts/15/FIXUPREDIRECT.ASPX?WebId=de941175-f8d4-4a41-8207-c9aec3e1e3b2&TermSetId=9c3dd502-4f62-4d66-9ef2-684258a8f9ed&TermId=1bf91da2-b84a-49ab-8a4f-dfd408b26f14"><span style="text-decoration:underline;">Marija Vićić</span></a>, acting as the local counsel for EBRD and IFC, advised on all local law aspects of the financing, including the preparation of due diligence and support in the negotiations of the facility agreement and other financing and project documents. <a href="http://www.nortonrosefulbright.com/"><span style="text-decoration:underline;">Norton Rose Fulbright</span></a> from London acted as the international counsel to the lenders in this deal.</p><p style="text-align:justify;">Out of a total of <a href="http://ceelegalmatters.com/deal-of-the-year-nominees/8052-nominees-for-serbia"><span style="text-decoration:underline;">three deals which are in the finals</span></a> for the jurisdiction of Serbia, Karanović & Nikolić has been shortlisted with two – the Financing of Vektroelektrane Balkana and the <a href="/knnews/Pages/2017/08/Karanovic-Nikolic-Advises-on-OTP-Acquisition-of-Vojvođanska-Banka.aspx"><span style="text-decoration:underline;">National Bank of Greece's sale of Vojvođanska Banka to OTP</span></a>.</p><p>​</p>
Serbia: Athletics equipment distributors under investigation for failure to notify exclusivity Serbia: Athletics equipment distributors under investigation for failure to notify exclusivity | News | Karanović & Nikolić https://www.karanovic-nikolic.com/knnews/Pages/2018/June/athletics-equipment-distributors-competition-commisssion-investigation-serbia-exclusivity-agreement.aspxSerbia: Athletics equipment distributors under investigation for failure to notify exclusivity Serbia: Athletics equipment distributors under investigation for failure to notify exclusivity | News | Karanović & Nikolić string;#01/06/2018<p style="text-align:justify;">Following a tip, the <a href="http://www.kzk.org.rs/en/"><span lang="EN-GB" style="text-decoration:underline;">Serbian Competition Commission</span></a> (the "<strong>Commission</strong>") recently started investigating the business relationship between GR Sport and Polanik, a Polish company, concerning an alleged infringement of competition – the conclusion of a restrictive agreement which was not notified for prior exemption under the applicable legal framework.</p><p style="text-align:justify;">During the preliminary inquiry, the Commission gathered data from both of the mentioned undertakings and established the following – <a href="http://www.grsport.rs/"><span lang="EN-GB" style="text-decoration:underline;">GR Sport</span></a> was an exclusive distributor of <a href="https://polanik.eu/"><span lang="EN-GB" style="text-decoration:underline;">Polanik</span></a> for the territory of Serbia continuously in the period between 2005 and 2016, originating with a 2005 contract, and renewed, from time to time, with certificates issued by Polanik. </p><p style="text-align:justify;">Unlike the EU's self-assessment rule, in Serbia, restrictive agreements which do not fall under block exemption have to undergo a specific administrative procedure before the Commission prior to implementation. This is the case in other jurisdictions in the region as well (e.g. Montenegro or Bosnia and Herzegovina). There may also be other specific rules applicable – as an example, the market share threshold for vertical agreements is set at 25%. As GR Sport and Polanik did not file for individual exemption during their exclusive relationship, this potentially puts them in breach of law and they might suffer a fine of up to 10% of the total annual turnover generated in Serbia.</p><p style="text-align:justify;">This the first time that the Commission tackled a failure to notify agreements for individual exemption, which demonstrates its willingness to fully apply the toolbox available under the existing legal framework. One of the hot topics in drafting the new competition law concerns the possibility of abolishing individual exemption and moving to a self-assessment system, further harmonizing the Serbian framework with the EU. It remains to be seen whether these changes will make it into the legislation, but in the meanwhile, companies should apply extra care when considering restrictive agreements affecting the local market.  </p><p>​</p>
Montenegro to Publish a Tender for a 200 MW Solar Power Plant Montenegro to Publish a Tender for a 200 MW Solar Power Plant | News | Karanović & Nikolić https://www.karanovic-nikolic.com/knnews/Pages/2018/May/Montenegro-Tender-Solar-Power-Plant-Ulcinj.aspxMontenegro to Publish a Tender for a 200 MW Solar Power Plant Montenegro to Publish a Tender for a 200 MW Solar Power Plant | News | Karanović & Nikolić string;#18/05/2018<p style="text-align:justify;">​The <a href="http://www.gov.me/en/homepage/">Montenegrin Government</a> plans to publish a tender for the lease of state land for the purpose of constructing a solar power plant in the municipality of Ulcinj. According to the announcement, the tender envisages a total of 6,621,121 square meters of land for the planning, construction, exploitation, and maintenance of a solar power plant at Briska gora, in the very south of Montenegro.</p><p style="text-align:justify;">The plant is intended to have a total installed capacity of more than 200 MW, and will be completed in two phases. Phase one needs to be completed within 18 months after the signing of the contract, and phase two within 24 months after the first stage. </p><p style="text-align:justify;">Offers to lease the land and build the power plant can be submitted by investors with proven experience in building solar plants with an installed capacity of at least 100 MW, and that have reported gross incomes of more than EUR 100 million in the past three fiscal years. </p><p style="text-align:justify;">According to the Ministry's press release, the selected project is expected to sell electricity to the local grid through a long-term PPA on market terms. </p><p style="text-align:justify;">Local press reports indicate that the project may require a total investment of EUR 300 million, and two potential investors have already submitted letters of intent to the Montenegrin authorities.</p><p style="text-align:justify;">This will be the first tender for a large scale renewables project in <a href="/knnews/Pages/2014/10/21/Pioneering-Financing-Agreement-Adopted-in-Montenegro.aspx"><span lang="EN-GB" style="text-decoration:underline;">Montenegro since 2010 and the awarding of "concessions" for wind parks Krnovo and </span><span lang="EN-GB" style="text-decoration:underline;">Mo</span><span lang="SR-LATN-RS" style="text-decoration:underline;">žura</span></a>.</p>
Raiding the Cradle: Serbian Competition Commission Investigates Distributors of Childcare Products Raiding the Cradle: Serbian Competition Commission Investigates Distributors of Childcare Products | News | Karanović & Nikolić https://www.karanovic-nikolic.com/knnews/Pages/2018/April/Serbian-Competition-Commission-Investigates-Childcare-Products.aspxRaiding the Cradle: Serbian Competition Commission Investigates Distributors of Childcare Products Raiding the Cradle: Serbian Competition Commission Investigates Distributors of Childcare Products | News | Karanović & Nikolić string;#30/04/2018<p style="text-align:justify;">On 24 April 2018, the <a href="http://www.kzk.org.rs/en/"><span lang="EN-GB" style="text-decoration:underline;">Serbian Competition Commission</span></a> (the "<strong>Commission</strong>") conducted dawn raids against local distributors of baby and infant products, <a href="http://www.yuglob.rs/"><span lang="EN-GB" style="text-decoration:underline;">Yuglob</span></a> and <a href="https://www.keprom.rs/home/"><span lang="EN-GB" style="text-decoration:underline;">Keprom</span></a>. The dawn raid was conducted on three locations in Belgrade, during which the Commission collected the documentation it considered necessary for further investigation.</p><p style="text-align:justify;">Dawn raids are commonly used as a specialised investigation tool by the Commission, whereby the Commission "storms" the business premises of the companies for the purpose of inspecting their compliance with the Competition Law. In Serbia, they have become a widely utilised mechanism for the detection of potential competition infringements, especially when combined with targeted sector inquiries. </p><p style="text-align:justify;">This time, the Commission stated that it had acted upon a reasonable assumption that the agreements concluded by the distributors could contain restrictive provisions on resale price maintenance, which could potentially represent a prohibited restrictive agreement. The market for childcare products is an especially sensitive one for Serbian consumers, as there have been public outcries about the perceived high margins in this sector in the past.</p><p>​</p>
New Serbian Law on Foreigners Adopted New Serbian Law on Foreigners Adopted | News | Karanović & Nikolić https://www.karanovic-nikolic.com/knnews/Pages/2018/April/New-Serbian-Law-on-Foreigners-Adopted.aspxNew Serbian Law on Foreigners Adopted New Serbian Law on Foreigners Adopted | News | Karanović & Nikolić string;#25/04/2018<p style="text-align:justify;">In March 2018, the new Serbian Law on Foreigners was adopted, replacing the 2008 version of this law - in force until recently without any amendments. The new law will enter into force on 3 October 2018. </p><p style="text-align:justify;">While retaining the general concept of the previous law, the new legislation introduces certain novelties in terms of the residence permit process, as follows:</p><p style="text-align:justify;">-           The new law envisages the competence of the <a href="http://www.bia.gov.rs/index-eng.html">Security Information Agency </a>(<em>Bezbednosno informativna agencija</em>) in procedures related to the entrance and residence of foreigners in Serbia. <a href="http://arhiva.mup.gov.rs/cms_eng/home.nsf/index-eng.html">The Ministry of Interior</a> will now have to request an opinion from BIA on whether a foreigner's entrance or residence in Serbia represents a risk to national security;</p><p style="text-align:justify;">-           Unlike the previous law, the new legislation stipulates the right to appeal a decision by which a foreigner is prevented from entering in Serbia or by which a residence was not approved/prolonged to him/her. The deadline for the submission of the appeal is within 15 days since the respective decision is obtained;</p><p style="text-align:justify;">-           Certain new grounds for the approval of a temporary residence permit are prescribed by the new law, as well as grounds that were applicable in the practice but not recognized in the law. The new list of legal grounds for the approval of a residence permit now also includes: performing a religious service, medical treatments and care, owning real estate in Serbia, learning Serbian language for educational purposes etc.; and,</p><p style="text-align:justify;">-           Additionally, a foreigner who has already stayed in Serbia for four years, without interruption, on the basis of "joining a family" may be granted a residence permit independently of his/her relation to a relevant family member.</p><p style="text-align:justify;">Finally, the new law prescribes higher fines for foreigners who do not follow the provisions on a legitimate stay in Serbia, so the new maximum fine amount for foreigners, for any violation of the provisions of the law, is set to RSD 150,000 (approx. EUR 1,250).</p><p style="text-align:justify;"> </p><p style="text-align:justify;"> </p><p><span class="ms-rteStyle-Quote">​<em>The information in this document does not constitute legal advice on any particular matter and is provided for general informational purposes only.</em></span></p>
Karanović & Nikolić Recognized as Top Tier Law Firm by Legal 500 Karanović & Nikolić Recognized as Top Tier Law Firm by Legal 500 | News | Karanović & Nikolić https://www.karanovic-nikolic.com/knnews/Pages/2018/April/Karanovic-Nikolic-Top-Tier-Law-Firm-Serbia-2018-Legal-500-rankings.aspxKaranović & Nikolić Recognized as Top Tier Law Firm by Legal 500 Karanović & Nikolić Recognized as Top Tier Law Firm by Legal 500 | News | Karanović & Nikolić string;#17/04/2018<p style="text-align:justify;">We are proud to announce that Karanović & Nikolić and its cooperating lawyers have once again been recognized as a top tier legal practice on the 2018 Legal 500 list of leading law firms. This prestigious UK-based directory provides comprehensive worldwide coverage on recommended law firms. </p><p style="text-align:justify;">"Karanović & Nikolić's newest rankings on the Legal 500 list presents the latest in a long line of recognitions we have obtained from world-leading independent legal directories. We are honoured by their continuous recognition of our hard work and diligence. We look forward to once again meeting and exceeding the expectations of our peers and clients, while delivering service of the highest quality", said Rastko Petaković, the Managing Partner of Karanović & Nikolić. </p><p style="text-align:justify;">This year, the Legal 500 has ranked Karanović & Nikolić and its cooperating lawyers as belonging to their Band 1 level in the following categories: Banking & Finance; Commercial, Corporate and M&A, Competition, Dispute Resolution, Employment, Projects and Energy, and Real Estate and Construction. Attorneys at law <a href="/people/darko-jovanovic"><span lang="EN-GB" style="text-decoration:underline;">Darko Jovanović</span></a>, <a href="/people/dragan-karanovic"><span lang="EN-GB" style="text-decoration:underline;">Dragan Karanović</span></a>, <a href="/people/rastko-petakovic"><span lang="EN-GB" style="text-decoration:underline;">Rastko Petaković</span></a>, <a href="/people/milan-lazic"><span lang="EN-GB" style="text-decoration:underline;">Milan Lazić</span></a>, <a href="/people/dragomir-kojic"><span lang="EN-GB" style="text-decoration:underline;">Dragomir Kojić</span></a>, <a href="/people/nihad-sijercic"><span lang="EN-GB" style="text-decoration:underline;">Nihad Sijerčić</span></a> and <a href="/people/milos-vuckovic"><span lang="EN-GB" style="text-decoration:underline;">Miloš Vučković</span></a> are recognized as leading practitioners, while <a href="/people/katarina-guduric"><span lang="EN-GB" style="text-decoration:underline;">Katarina Gudurić</span></a>, <a href="/people/ivan-nonkovic"><span lang="EN-GB" style="text-decoration:underline;">Ivan Nonković</span></a>, <a href="/people/bojana-miljanovic"><span lang="EN-GB" style="text-decoration:underline;">Bojana Miljanović</span></a>, <a href="/people/amina-djugum"><span lang="EN-GB" style="text-decoration:underline;">Amina Đugum</span></a>, <a href="/people/milica-savic"><span lang="EN-GB" style="text-decoration:underline;">Milica Savić</span></a> and <a href="/people/milena-jaksic-papac"><span lang="EN-GB" style="text-decoration:underline;">Milena Jakšić Papac</span></a> are praised as next generation lawyers.</p><p style="text-align:justify;">For 29 years, the <a href="https://www.legal500.com/"><span lang="EN-GB" style="text-decoration:underline;">Legal 500</span></a> has been analysing the capabilities of law firms across the world, with a comprehensive research programme revised and updated every year to bring the most up-to-date vision of the global legal market. Their rankings are based on feedback from 250,000 in-house peers and access to law firms' deals and confidential matters, independently assessed their researchers.</p><p>​</p>
Montenegrin Competition Agency takes over state aid control Montenegrin Competition Agency takes over state aid control | News | Karanović & Nikolić https://www.karanovic-nikolic.com/knnews/Pages/2018/March/Montenegrin-Competition-Agency-takes-over-state-aid-control.aspxMontenegrin Competition Agency takes over state aid control Montenegrin Competition Agency takes over state aid control | News | Karanović & Nikolić string;#28/03/2018<p style="text-align:justify;">​As of recently, state aid control is a part of the <a href="http://www.azzk.me/novi/joomlanovi/en/"><span lang="EN-GB" style="text-decoration:underline;">Montenegrin Competition Agency</span></a>'s (the "<strong>Agency</strong>") scope of authority. The <a href="http://www.skupstina.me/index.php/en/"><span lang="EN-GB" style="text-decoration:underline;">Montenegrin Parliament</span></a> enacted a new State Aid Control Law (the "<strong>State Aid Law</strong>"), largely aligned with the EU legal framework - especially with Articles 107 and 108 of the TFEU. In the institutional sense, the new law grants the Agency the competence for reviewing state aid, since the former State Aid Commission was not considered a sufficiently operationally-independent authority - which represented an issue in Montenegro's EU accession negotiations (Chapter 8).</p><p style="text-align:justify;">As a result of the implementation of the new State Aid Law, beginning from the 8<sup>th</sup> of March 2018, aid grantors are given one year to review whether they granted aid compatible with the State Aid Law (and the EU legal framework, per the Stabilisation and Association Agreement between EU and Montenegro). Should the Agency consider existing aid incompatible with the rules following the one-year deadline, it will give the aid grantor recommendations on how to achieve compliance. The aid grantor is then entitled either to propose a plan for implementing those recommendations, or to provide an opinion as to why it considers the specific aid to be compatible. In the latter case, if the Agency rejects the arguments of the aid grantor, the authority may initiate an in-depth investigation.</p><p style="text-align:justify;">In conjunction with the new State Aid Law, the corresponding amendments to the Competition Law were enacted, making the Agency competent for all issues in relation to the protection of competition and state aid on the Montenegrin market. The body in charge (within the Agency) for state aid matters will be the Council – consisting of three members, the President of the Council and two other members appointed by the Government. </p><p style="text-align:justify;">The effects of the shift to one regulator being in charge of both antitrust and state aid control remain to be seen in the near future, after the Council renders its' first decisions. There is prior precedent in accession countries from the region entrusting these matters to a single authority (e.g. Croatia, Macedonia), while Serbia and Montenegro, up to now, have had separate authorities handling state aid control and competition. Ultimately, the authority will not be judged by its institutional make-up, but the results of its practice. </p>
Landmark Deal: PPF Acquires Telenor’s CEE Operations for 2.8 Billion Euros Landmark Deal: PPF Acquires Telenor’s CEE Operations for 2.8 Billion Euros | News | Karanović & Nikolić https://www.karanovic-nikolic.com/knnews/Pages/2018/March/PPF-Acquires-Telenor-CEE-Operations.aspxLandmark Deal: PPF Acquires Telenor’s CEE Operations for 2.8 Billion Euros Landmark Deal: PPF Acquires Telenor’s CEE Operations for 2.8 Billion Euros | News | Karanović & Nikolić string;#23/03/2018<p style="text-align:justify;">Karanović & Nikolić, together with <a href="https://www.whitecase.com/">White & Case</a> as lead international counsel, advised PPF Group, the Czech investment firm, on the EUR 2.8 billion acquisition of <a href="https://www.telenor.com/">Telenor's</a> assets in Central and Eastern Europe. The transaction includes the Norwegian telecoms firm's mobile operations in Bulgaria, Hungary, Montenegro and Serbia, as well as the technology service provider Telenor Common Operation. The transaction requires necessary regulatory approval and is expected to be completed within Q3 2018. </p><p style="text-align:justify;">Karanović & Nikolić advised PPF Group in the transaction concerning operations in Serbia and Montenegro. Our Corporate team was led by senior partner <a href="/_layouts/15/FIXUPREDIRECT.ASPX?WebId=de941175-f8d4-4a41-8207-c9aec3e1e3b2&TermSetId=9c3dd502-4f62-4d66-9ef2-684258a8f9ed&TermId=1f9a7104-07ae-497f-aefb-69507217ea71">Rastko Petaković</a> and partner <a href="/_layouts/15/FIXUPREDIRECT.ASPX?WebId=de941175-f8d4-4a41-8207-c9aec3e1e3b2&TermSetId=9c3dd502-4f62-4d66-9ef2-684258a8f9ed&TermId=77527c2f-9a51-4979-8475-7b278ecee149">Miloš Jakovljević</a>, with associates <a href="/_layouts/15/FIXUPREDIRECT.ASPX?WebId=de941175-f8d4-4a41-8207-c9aec3e1e3b2&TermSetId=9c3dd502-4f62-4d66-9ef2-684258a8f9ed&TermId=08bc904d-3465-4408-84fd-3c5fd477abaf">Sava Drača</a> and <a href="/_layouts/15/FIXUPREDIRECT.ASPX?WebId=de941175-f8d4-4a41-8207-c9aec3e1e3b2&TermSetId=9c3dd502-4f62-4d66-9ef2-684258a8f9ed&TermId=66cf9e08-167e-4b43-8541-89c1a0626a2f">Sonja Guzina</a>, while the Finance team was led by senior partner <a href="/_layouts/15/FIXUPREDIRECT.ASPX?WebId=de941175-f8d4-4a41-8207-c9aec3e1e3b2&TermSetId=9c3dd502-4f62-4d66-9ef2-684258a8f9ed&TermId=2bde9f18-b87d-4a22-82b7-d580b4199f91">Darko Jovanović</a>. </p><p style="text-align:justify;">"This is a landmark transaction that will certainly have great impact on the CEE telecommunications sector. We are very pleased that, together with our colleagues from White & Case, we advised on a deal that will reshape the regional telecoms milieu", said Rastko Petaković, Managing Partner at Karanović & Nikolić.</p><p style="text-align:justify;"><a href="https://www.ppf.eu/en/homepage">PPF Group</a> is the largest private investment group in CEE with approximately EUR 35 billion of assets under its control. PPF Group invests in various sectors, including banking, consumer finance, real estate, mining and telecommunications. Previous transaction experience includes the acquisition of O2 Czech Republic from Telefonica in 2013 and Nova Broadcasting Group in Bulgaria in 2018. </p>
Karanović & Nikolić Ranks as Leading Law Firm in Chambers Europe 2018 Karanović & Nikolić Ranks as Leading Law Firm in Chambers Europe 2018 | News | Karanović & Nikolić https://www.karanovic-nikolic.com/knnews/Pages/2018/March/Karanovic-Nikolic-Leading-Law-Firm-Serbia-Chambers-Europe-2018.aspxKaranović & Nikolić Ranks as Leading Law Firm in Chambers Europe 2018 Karanović & Nikolić Ranks as Leading Law Firm in Chambers Europe 2018 | News | Karanović & Nikolić string;#14/03/2018<p style="text-align:justify;">​We are proud to announce that Karanović & Nikolić has once again emerged on top of the rankings on the most recent list of leading European law firms – the prestigious <a href="https://www.chambersandpartners.com/guide/europe/7">Chambers Europe 2018</a>. This year's edition of the Chambers Europe has highlighted seven different practice areas within the Karanović & Nikolić legal practice and cooperating offices as belonging to top tier level – Corporate/Commercial, Banking & Finance, Competition/Antitrust, Dispute Resolution, Employment, Energy and Real Estate.</p><p style="text-align:justify;">Commentating Karanović & Nikolić, its' business culture and professional approach for this year's Guide, clients have praised the practice for its "pool of knowledge and regional reach combined with really experienced individuals who are creative and pragmatic in relation to complex matters that have recently been introduced or are untested in the market."</p><p style="text-align:justify;">"From a law firm perspective, the Chambers Guides stand out as reference points for unbiased, up to date insight into how our clients see us, and not less importantly, how our peers see us. We are thankful for all the kind words all the referees shared about our partners and associates and we plan to be vigilant and sharper still, in meeting and exceeding their expectations", said <a href="/people/rastko-petakovic"><span lang="EN-GB" style="text-decoration:underline;">Rastko Petaković</span></a>, the Managing Partner of Karanović & Nikolić.</p><p style="text-align:justify;">The Chambers Guides have been ranking the best law firms and lawyers since 1990, and now cover 185 jurisdictions throughout the world. The rankings are based on their research team interviewing clients all year round. The Chambers Guides represent an excellent resource for finding outside counsel in countries where you may not already have a law firm relationship and irreplaceable tools for every in-house lawyer due to their comprehensive and accurate description of the legal professional worldwide.</p>
Karanović & Nikolić Shortlisted to Win the CEE Legal Matters 2018 Deal of the Year Award Karanović & Nikolić Shortlisted to Win the CEE Legal Matters 2018 Deal of the Year Award | News | Karanović & Nikolić https://www.karanovic-nikolic.com/knnews/Pages/2018/February/KN-Shortlisted-to-Win-the-CEE-Legal-Matters-2018-Deal-of-the-Year-Award.aspxKaranović & Nikolić Shortlisted to Win the CEE Legal Matters 2018 Deal of the Year Award Karanović & Nikolić Shortlisted to Win the CEE Legal Matters 2018 Deal of the Year Award | News | Karanović & Nikolić string;#27/02/2018<p style="text-align:justify;">​Karanović & Nikolić is in the finals for the first ever Deal of the Year Award, organized by the renowned CEE Legal Matters magazine. Beginning in 2018, these accolades are a way of recognizing the biggest and most important deals by law firms in Central and Eastern European jurisdictions. Out of a total of <a href="http://ceelegalmatters.com/deal-of-the-year-nominees/8052-nominees-for-serbia">three deals which are in the finals</a> for the jurisdiction of Serbia, Karanović & Nikolić has been shortlisted with two: the <a href="/knnews/Pages/2017/10/Karanović-Nikolić-Advises-on-the-Financing-of-the-Largest-Windfarm-in-the-Western-Balkans.aspx">EBRD Financing of Vektroelektrane</a> – Čibuk Windfarm, and the <a href="/knnews/Pages/2017/08/Karanovic-Nikolic-Advises-on-OTP-Acquisition-of-Vojvođanska-Banka.aspx">National Bank of Greece's sale of Vojvođanska Banka to OTP</a>.</p><p style="text-align:justify;">In order to avoid any chance or possibility of favouritism or bias, The Deal of the Year Awards are strictly peer-judged. So, the winners are selected not by the organizers, but instead by a two-tiered panel of leading lawyers from across the region who do not themselves stand to benefit from the final results. </p><p style="text-align:justify;">The first tier of judges consists of senior partners at leading law firms in each CEE jurisdiction who have agreed to carefully review the submissions and rank them for complexity, size, and market significance.</p><p style="text-align:justify;">After that, the shortlisted deals are forwarded to the Final Selection Committee, which consists of CEE Legal Matters Knowledge Partners and attendees to the annual End of Year Expert Summit, who independently rank the final nominees, identifying the ultimate winner in each market. Critically, members of the Final Selection Committee are not allowed to vote on deals their own firms worked on.</p><p style="text-align:justify;">The winners will be announced on the 6th of June, 2018, at the CEE Legal Matters Annual Dinner and Awards Banquet.</p>
Alltech Sells its Factory in Serbia to Lesaffre Alltech Sells its Factory in Serbia to Lesaffre | News | Karanović & Nikolić https://www.karanovic-nikolic.com/knnews/Pages/2018/February/Alltech-Sells-its-Factory-in-Serbia-to-Lesaffre.aspxAlltech Sells its Factory in Serbia to Lesaffre Alltech Sells its Factory in Serbia to Lesaffre | News | Karanović & Nikolić string;#21/02/2018<p style="text-align:justify;">Alltech - a leading global animal and crop nutrition company, sold its <strong>baking yeast factory in Senta, in northern Serbia, to</strong> Lesaffre - a<strong> leading global baking yeast and fermented products company. T</strong>he acquired factory will continue to produce baker's yeast for the Serbian market and yeast extracts for the food and animal feed industries. The transaction is in line with <a href="https://www.alltech.com/"><span lang="EN-GB" style="text-decoration:underline;">Alltech</span></a>'s continued focus on its core business in animal and crop nutrition.</p><p style="text-align:justify;">Karanović & Nikolić provided sell-side advisory services in this acquisition, and the team included partner <a href="/_layouts/15/FIXUPREDIRECT.ASPX?WebId=de941175-f8d4-4a41-8207-c9aec3e1e3b2&TermSetId=9c3dd502-4f62-4d66-9ef2-684258a8f9ed&TermId=ec9b723f-4e8a-4ebd-9714-959ae2192629"><span style="text-decoration:underline;">Ivan Nonković</span></a>, <a href="/_layouts/15/FIXUPREDIRECT.ASPX?WebId=de941175-f8d4-4a41-8207-c9aec3e1e3b2&TermSetId=9c3dd502-4f62-4d66-9ef2-684258a8f9ed&TermId=4826cdb4-5e4c-4a92-9aad-c053b6bfd567"><span style="text-decoration:underline;">Milijana Tomić</span></a> and <a href="/_layouts/15/FIXUPREDIRECT.ASPX?WebId=de941175-f8d4-4a41-8207-c9aec3e1e3b2&TermSetId=9c3dd502-4f62-4d66-9ef2-684258a8f9ed&TermId=eb6bf5a7-c5ee-4355-b781-9312718f6485"><span style="text-decoration:underline;">Marko Ćulafić</span></a>. The services performed included structuring of the transaction, as well as drafting and negotiating the transaction documents.</p><p style="text-align:justify;">"Alltech is pleased to sell this facility to a family group recognised internationally for its professionalism and the quality of its products and services.  It is the perfect company to acquire and drive the business for future growth. Alltech meanwhile will continue to focus on its core activities following unprecedented growth in recent years", stated Alric Blake, CEO of Alltech.</p><p style="text-align:justify;">Alltech, with its headquarters outside of Lexington, Kentucky, USA, has a strong presence in all regions of the world. With expertise in yeast fermentation, solid state fermentation and the science of nutrigenomics, the company is a leading producer and processor of yeast additives, organic trace minerals, feed ingredients, premix and feed.</p><p style="text-align:justify;"><a href="http://www.lesaffre.com/"><span lang="EN-GB" style="text-decoration:underline;">Lesaffre</span></a>, a multi-national and a multicultural company based in northern France with a EUR 2 billion turnover, employs more than 10.000 people in more than 75 subsidiaries based in 50 countries. </p>
Even More Sector Inquiries: Sportswear and Oil Retail under Scrutiny by the Serbian Commission Even More Sector Inquiries: Sportswear and Oil Retail under Scrutiny by the Serbian Commission | News | Karanović & Nikolić https://www.karanovic-nikolic.com/knnews/Pages/2018/February/Even-More-Sector-Inquiries-Sportswear-and-Oil-Retail-under-Scrutiny-by-Serbian-Commission.aspxEven More Sector Inquiries: Sportswear and Oil Retail under Scrutiny by the Serbian Commission Even More Sector Inquiries: Sportswear and Oil Retail under Scrutiny by the Serbian Commission | News | Karanović & Nikolić string;#13/02/2018<p style="text-align:justify;">The Serbian Competition Commission (the "<strong>Commission</strong>") continues its diligent examination of the Serbian competitive landscape in specific industries, this time with inquiries in two more industries – sportswear (including footwear and sporting equipment) and oil (petroleum products). Once again, the aim behind the market test was to identify potential issues on the relevant markets and provide broader insight into the functioning of the relevant markets.</p><p style="text-align:justify;">Both of these industries have previously been of some interest to the Commission. <a href="/knnews/Pages/2017/12/Serbian-Commission-Cracks-Down-on-Sportswear-Retailers.aspx"><span lang="EN-GB" style="text-decoration:underline;">The Commission recently conducted dawn raids and fined several sportswear retailers for resale price maintenance</span></a>. The Commission has identified significant concentration on this market, giving rise to potential concerns about restrictive agreements in the industry, especially vis-à-vis the relationship between suppliers and resellers.</p><p style="text-align:justify;">Sector inquiries into the conditions in oil wholesale and retail have traditionally been high on the Commission's agenda, with a number of market investigations conducted into the past. The <a href="http://www.kzk.org.rs/en"><span lang="EN-GB" style="text-decoration:underline;">Commission</span></a> noted a trend of market growth in comparison to 2016, especially in relation to production of crude oil and import of diesel fuel. The Commission (sadly) noted limited progress being made in terms of the recommendations relevant to market development it issued in previous reports. The Commission stated that it would watch over the oil industry with great care and already announced a new inquiry in this sector starting in March and covering 2017. </p><p style="text-align:justify;">Sector inquiries have obviously been on the rise in the previous period, simultaneously contributing to the Commission's understanding of the workings of the markets identified as key to the Serbian economy and the antitrust awareness of market players. The next steps for both sector investigations and antitrust enforcement efforts spearheaded by the Commission remain to be seen and are eagerly awaited in the local competition community. </p><p>​</p>
Raspberries and IT: New Sector Inquiries by the Serbian Competition Commission Raspberries and IT: New Sector Inquiries by the Serbian Competition Commission | News | Karanović & Nikolić https://www.karanovic-nikolic.com/knnews/Pages/2018/January/Raspberries-and-IT-New-Sector-Inquiries-by-the-Serbian-Competition-Commission.aspxRaspberries and IT: New Sector Inquiries by the Serbian Competition Commission Raspberries and IT: New Sector Inquiries by the Serbian Competition Commission | News | Karanović & Nikolić string;#29/01/2018<p style="text-align:justify;">​The Serbian Competition Commission (the "<strong>Commission</strong>") recently finished sector inquiries concerning quite distinct industries – raspberries and the public procurement for software and hardware. The aim behind the inquiries was to perform extensive market research and analysis in order to acquire a clearer picture of the possible antitrust issues and risks in two sectors widely perceived as strategic for the development of the Serbian economy.</p><p style="text-align:justify;">The Commission analysed two relevant markets within the broader ICT market - more specifically:</p><ul style="text-align:justify;"><li>the wholesale of software; and,</li><li>the wholesale of hardware (computers and computer equipment). </li></ul><p style="text-align:justify;">These markets are especially interesting in relation to the public procurement procedures, where the value of public procurements rose by 27% from 2014 to 2016, mostly in open bidding procedures. The <a href="http://www.kzk.org.rs/en"><span lang="EN-GB" style="text-decoration:underline;">Commission</span></a> identified four major contracting authorities, the largest of them being "Elektroprivreda Srbije" and six suppliers/bidders identified as largest by accounting for almost 50% of the value of the relevant public procurements. </p><p style="text-align:justify;">Having in mind the characteristics of these markets, <em class="ms-rteStyle-Quote">inter alia</em>, a small number of market players, few alternatives to the services provided, repetitive public procurement procedures, the Commission noted that bid rigging could be a potential cause for concern, and stated that it would dedicate special attention to working together with the relevant actors in rooting out any such practices in the future, in order to ensure a level playing field and efficient use of public resources. </p><p style="text-align:justify;">The second sector inquiry dealt with the markets for raspberry repurchase and export in the period between 2015 and 2017. The competitive conditions on these markets are likely especially interesting for the local authorities, since Serbia is one of the largest producers of raspberries in the world, accountable for approx. 10% of the raspberries grown globally. </p><p style="text-align:justify;">During the inquiry, the Commission determined that there are certain structural issues that might affect the relevant markets and the Serbian raspberry industry as a whole. The problems with a single repurchase price and long-term supply agreements gave rise to uncertainties concerning the value of raspberries produced and sold on the market. The Commission stressed the importance of including all the competent authorities and undertakings in order to solve these problems and maintain raspberries as a prominent and recognisable Serbian brand. </p><p style="text-align:justify;">The Commission ultimately concluded that it did not identify any <em class="ms-rteStyle-Quote">prima facie</em><span class="ms-rteStyle-Quote"> </span>evidence of competition infringements affecting either of these markets. However, this does not mean that the Commission, now armed with more detailed information on the competitive environment, would not scrutinize the behaviour of specific market players at some point in the future. </p>
Permit-free Regime for Construction in Montenegro Permit-free Regime for Construction in Montenegro | News | Karanović & Nikolić https://www.karanovic-nikolic.com/knnews/Pages/2018/January/Permit-free-Regime-for-Construction-in-Montenegro.aspxPermit-free Regime for Construction in Montenegro Permit-free Regime for Construction in Montenegro | News | Karanović & Nikolić string;#18/01/2018<p style="text-align:justify;">The new Construction Law entered into force in Montenegro and it is meant to unify construction, zoning regulations and deal with illegal objects. However, some provisions of the old Construction Law still remain in force, until the adoption of the General Regulation Plan.</p><p style="text-align:justify;">The new Construction Law completely changed the legal regime of construction in Montenegro. It aims to simplify and compile spatial planning, boost the construction industry and deal with historical issues concerning the massive construction of illegal objects. It also aims to further centralise the decision-making processes in this industry. </p><h3>Authority centralisation</h3><p style="text-align:justify;">Perhaps the most important novelty under the new Construction Law is that that there will be only two spatial planning documents for the territory of Montenegro (instead of hundreds of so far enacted documents). Both plans will be enacted by the Parliament upon the <a href="http://www.gov.me/en/homepage"><span lang="EN-GB" style="text-decoration:underline;">Government's</span></a> preparation and proposal. Those are:</p><ul style="text-align:justify;"><li>the Spatial Plan of Montenegro, which is a general planning document, that is to be valid 20 years after the adoption; and,</li><li>the General Regulation Plan, which is a more detailed zoning plan, that is to be valid 10 years after the adoption.</li></ul><p style="text-align:justify;">The Spatial Plan of Montenegro is a higher ranked planning document. It will regulate the strategic guidelines for spatial planning, the basis for the development and spatial organisation and the policy of spatial usage, the concept for maritime spatial planning, the general guidelines for the adoption of the General Regulation Plan, as well as principles for the preservation of cultural heritage and environmental protection. </p><p style="text-align:justify;">Strategic principles and guidelines set out in the Spatial Plan will be further developed under the General Regulation Plan – which will provide the conditions and the manner for spatial development and construction. This plan will completely encompass the territory of Montenegro, and it will regulate construction capacities. Specifically, it will provide for spatial designation, the conditions for its development, building capacities and boundaries, parcelling rules etc. The General Regulation Plan is planned for adoption within the next 36 months. Until then, all currently applicable spatial plans and zoning documents remain in force.</p><h3>A new construction and usage regime</h3><p style="text-align:justify;">Another major novelty is that the permitting system is replaced with a permit-free regime. This means that one is no longer required to obtain a construction or usage permit. In order to construct, an investor is required to prepare a report for construction, an audited main design and other necessary documents. Upon the finalisation of the construction, instead obtaining the usage permit, the new object should only be registered at the competent Land Registry.</p><p style="text-align:justify;">The permitting regime still applies to the most complex construction projects, such as, for example, heavy industry and energy facilities. </p><h3>Chief state/city architects</h3><p style="text-align:justify;">The New Law introduces two new instances which will play the main role in the construction process. These are chief state architect and city architects. The chief state architect will be in charge of all projects of national interest and will guide the legalisation of objects. His role is also to ensure the protection of authenticity of the space and the promotion of best practice in areas of urbanism and architecture. The city architects will be in charge of approving concept designs of buildings, squares and other public areas in settlements, verifying the compliance of concept designs with the urban projects, and approving temporary constructions. The chief state architect is elected by the Government, while the chief city architects are elected by local municipalities.</p><h3>(Un)Developed construction land fees</h3><p style="text-align:justify;">A new burden for the owners of construction land is that they will be obliged to pay a monthly land development fee, for the undeveloped construction land in their ownership. After the development, the owner is obliged to pay monthly city land rent. The amounts of these fees will be determined by local municipalities - which is expected to occur within 60 days upon the adoption of the General Regulation Plan.</p><p> </p><p> </p><p><em class="ms-rteStyle-Quote">The information in this document does not constitute legal advice on any particular matter and is provided for general informational purposes only.</em></p><p>​</p>