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Slovenia Adopts Class Action Law Slovenia Adopts Class Action Law | Views | Karanović & Nikolić https://www.karanovic-nikolic.com/knviews/Pages/2017/10/Slovenia-Adopts-Class-Action-Law.aspxSlovenia Adopts Class Action Law Slovenia Adopts Class Action Law | Views | Karanović & Nikolić string;#13/10/2017<p style="text-align:justify;">The <a href="http://www.dz-rs.si/wps/portal/Home/"><span lang="EN-GB" style="text-decoration:underline;">Slovenian National Assembly</span></a> adopted the Class Action Law, which will implement an important institute to the Slovenian legal system, i.e. mechanism of class action. This mechanism is already applied in the UK, Belgium, Netherlands and Sweden, but is yet to be implemented in numerous EU member states. The new mechanism of class action will provide for the injured parties, both natural and legal persons, to file a compensation claim in case of mass harm situations. Besides a collective action for compensation, the law also provides for the possibility to file a collective action for the cessation of illegal behaviour against the infringers, as well as the procedure of collective settlement in case of mass harm events. The law will come into force on the 21<sup>st</sup> of October, 2017, while it will apply with effect from the 21<sup>st</sup> of April, 2018.</p><p style="text-align:justify;">The law regulates procedures for collective redress in cases when the infringer breached consumers' or workers' rights, as well as rights arising from the prohibition on the restriction of competition, or rights from the financial instruments market, and in cases of damage caused by environmental accidents. The law aims to offer solutions for numerous cases of harm mass situations, in which individuals, injured by the same infringer's act, did not seek judicial protection mainly due to the high cost and low amount of individual claims for compensation. Apart from providing for easier access to the court protection, the law also aims to stop and prohibit infringers from carrying out illegal behaviour by providing the possibility to file a collective action for the cessation of illegal behaviour against the infringers.</p><p style="text-align:justify;">Court procedure under the new law can be commenced by the senior state attorney or by the private-law legal person, the activity of which is non-profit and is related to the breached right, wherein the court will assess in each case individually whether the above mentioned person is representative to start the procedure or not. An exception regarding the commencement of the court procedure applies to the consumer disputes, in which an the action for cessation of illegal behaviour of the breaching companies can be submitted only by the <a href="http://www.beuc.eu/beuc-network/members/zveza-potrosnikov-slovenije-zps"><span lang="EN-GB" style="text-decoration:underline;">Slovenian Consumers' Association</span></a>, chamber, or association of companies of which the breaching company is a member. In case the company with its seat located in Slovenia breaches the rights of consumers, coming from any other European Union member state, an action against the Slovenian company can be also submitted by the organisation, established for the protection of consumers' rights under that EU member state.</p><p style="text-align:justify;">Even though the injured party will not be party to the court procedures, governed by the new law, the injured party will nevertheless have the possibility to submit comments during the procedure. After the court procedure is finished, the infringer will pay the notional amount, whether directly to the injured parties, or to the notary public, who will act as a fiduciary of the compensation in certain cases. The law also introduces a public registry of class actions, where everyone will be able to access certain documents within the individual procedures free of charge.</p><p style="text-align:justify;">The aim of the new law is therefore to provide for the easier enforcement of the right to compensation to injured individuals and legal persons, while the breaching companies can also be prohibited from carrying out illegal behaviour in the future. On the other hand, the law also provides for the safeguards against abusing such court procedures by regulating the procedure, based on which the court will first - after preliminary assessing the admissibility and completeness of the action - assess whether the requirements for approval of the action exist, while only after that it will proceed with deciding on the claim. It is also important to note that it will be possible to commence a procedure under the new law in relation to the mass harm situations which occur before the new law comes into force, if the claim for compensation is not statute-barred.</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>
A New Concessions Act Passed in Croatia A New Concessions Act Passed in Croatia | Views | Karanović & Nikolić https://www.karanovic-nikolic.com/knviews/Pages/2017/10/A-New-Concessions-Act-Passed-in-Croatia.aspxA New Concessions Act Passed in Croatia A New Concessions Act Passed in Croatia | Views | Karanović & Nikolić string;#06/10/2017<p style="text-align:justify;">The New Croatian Concessions Act entered into force on the 14<sup>th</sup> of July, 2017. Those already involved in the pending concession granting procedures do not have to worry about legal instability because the application of the Old Concessions Act will continue for procedures that were initiated earlier. </p><h2 style="text-align:justify;">Much Ado about Nothing </h2><p style="text-align:justify;">The entire Croatian public rose to their feet when the motion of the New Concessions Act was published, motivated primarily by the <a href="https://www.total-croatia-news.com/business/18346-prime-minister-orders-review-of-zlatni-rat-concession-decision"><span lang="EN-GB" style="text-decoration:underline;">"Zlatni Rat" affair</span></a>, which took place in April, 2017. The Split-Dalmatia County granted a concession for one of the most attractive beaches on the Adriatic to a dubious company, in the procedure which was later annulled by the Ministry of Administration. This event drew the public's attention to the passing of the New Concessions Act, causing protestations from several NGOs. </p><p style="text-align:justify;">In fact, the novelties are mostly oriented on improving the technical aspects of the procedure, improving efficiency and accelerating the procedure, while several material aspects remain unchanged, especially those related to the maritime domain.</p><h2 style="text-align:justify;">Reasons for Exclusion </h2><p style="text-align:justify;">The New Concessions Act provides a number of facts, as reasons for the exclusion of a potential concessionaire, i.e.: </p><ol style="text-align:justify;"><li>breaches of labour, environmental and social regulations; </li><li>an on-going bankruptcy procedure; </li><li>the potential concessionaire committed a severe professional breach, bringing into question his integrity;</li><li>conviction for a criminal deed, which was committed conducting business activities; </li><li>cartel-like behaviour; and,</li><li>a previous concession agreement concluded with the respective entity terminated, or the potential concessionaire had to pay damages due to its defaults. </li></ol><p style="text-align:justify;">It is important to note that these reasons must be published in the tender documents, if the concession provider wishes to apply them in the respective procedure. However, the reasons under a) and c) seem very broad and quite vague. In fact, it is left for the concession provider to adjudicate which professional omissions or environmental breaches are severe enough to qualify for exclusion. It remains to be seen if the respective provision will result in any abuses, as such ambiguities usually do. </p><h2 style="text-align:justify;">Pledge over Concessions</h2><p style="text-align:justify;">A lot of noise was raised in the general public concerning the possibility of the concessionaire to pledge its concession right in favour of the financial institution. However, the solution to this issue remained unchanged in comparison with the Old Concessions Act. So, the concession right may be subject to a pledge in favour of the financial institution (exclusively), if the consent of the concession provider is obtained. </p><p style="text-align:justify;">Further, the financial institution may exercise its right as pledgee, by transferring the concession right to another entity. In such case, consent by the concession provider should be obtained, and the new entity entering the legal relation is to fulfil all the legal prerequisites for being a concessionaire. </p><p style="text-align:justify;">Despite not being a novelty, we expect this mechanism will be used more often in the upcoming period by the banks in the maritime domains, beaches and marines. The concessions have proven to be low-risk investments thus far, so the expected increase of investments in the Adriatic will most certainly be followed by an increase of the banking sector. </p><p style="text-align:justify;">The New Concessions Law does not provide major novelties with respect to the transfer of the concession itself, which still remains subject to concession provider`s consent. The only addendum to the content is reflected in the legal possibility to transfer the concession through the restructuring procedure. </p><h2 style="text-align:justify;">Sub-concessions </h2><p style="text-align:justify;">The obligation to obtain the concession provider`s consent to a sub-concession agreement also remains. Further, in order to amend the existing sub-concession agreement or change the sub-concessionaire, it is also necessary to obtain the concession provider`s consent. The reasons for the exclusion of a potential sub-concessionaire would still apply. </p><h2 style="text-align:justify;">Misdemeanours</h2><p style="text-align:justify;">As expected, the New Concessions Act provides more severe fines for misdemeanours committed with respect to the concessions. It especially focuses on exploitation without the adequate permit or concession agreement. In that respect, the upper limit amounts to HRK 1,000,000 (approximately EUR 133,000), while the director may be fined by up to HRK 20,000 (approximately EUR 6,600). There is also a number of other determined misdemeanours, with the highest prescribed monetary fine of HRK 500,000 (approximately EUR 66,000).</p><h3 style="text-align:justify;">Expectations </h3><p style="text-align:justify;">It is safe to say that the New Concessions Act did not bring any vital changes to the procedure, but only administrative relief - which always represents good news. However, when we talk about concessions related to beaches and marinas, we face another problem – the maritime domain. It is important to note that all maritime domains which could potentially be subject to concessions are not registered with the competent land registries, and their limits are not yet determined in all of the Croatian counties. Without a step forward in the right direction on that front, Croatia will not see as much development as may be expected. However, as investments increase, we expect that the local municipalities and counties will take the lead in this process. </p><p style="text-align:justify;">For further information on this subject, please write to <a href="mailto:info@karanovic-nikolic.com">info@karanovic-nikolic.com</a>.</p><p style="text-align:justify;"> </p><p style="text-align:justify;"> </p><p style="text-align:justify;"><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>
The Untapped Potential of South Eastern Europe The Untapped Potential of South Eastern Europe | Views | Karanović & Nikolić https://www.karanovic-nikolic.com/knviews/Pages/2017/09/The-Untapped-Potential-of-South-Eastern-Europe.aspxThe Untapped Potential of South Eastern Europe The Untapped Potential of South Eastern Europe | Views | Karanović & Nikolić string;#14/09/2017<p style="text-align:justify;">We have seen emerging markets in Central and Eastern Europe opening up and developing quite quickly. Some of them have done so through their ascension to the European Union, and others by organising their legislation in accordance with European standards, opening up borders, having foreign investors come in, as well as putting in place free trade agreements and investment incentives.</p><p style="text-align:justify;">Of course, transitional economies traditionally have a lot to offer to foreign investors. Some of the benefits include less competition and less mature and saturated markets. Usually, these are consumer markets in need of products and services that are not there yet. Or that are just too sparsely available and at unsuitable levels of sophistication. </p><p style="text-align:justify;">The countries of South Eastern Europe, with their singular economic infrastructure, and with a number of state-owned companies ready to be privatised, remain highly attractive for foreign investments tired of more mature European markets. </p><p style="text-align:justify;">Foreign investors in the countries of this region have the possibility of owning a 100% interest in a company, options of employing foreign citizens and open bank accounts in domestic and foreign currencies. This, along with and estimated regional GDP growth of 3% per annum until 2020, and positive forecasts and rankings in the <a href="http://www.doingbusiness.org/rankings">Doing Business reports</a>, encourage further investments in Western Balkan countries.</p><p style="text-align:justify;">For local companies, this means turning towards new markets that are outside of their countries. It is an incentive for local manufacturers, service providers or financial institutions to go beyond their home markets. On the other hand, foreign investors and investments create new jobs, raise the standard of living and the purchasing power of the population, as well as increase the competitiveness of local players. </p><p style="text-align:justify;">However, there is a certain transitional period, during which the rules are not yet firmly established. For example, when the local legislation is not harmonised with EU laws. There is also a vacuum in terms of institutions – especially courts – that are not able to apply the same standards or the same expertise or professionalism than in other countries such as for instance those in the EU are in a position to offer.</p><h2 style="text-align:justify;">A Learning Curve in doing Business</h2><p style="text-align:justify;">When it comes to transitional economies, the local way of doing business is usually different to the established way in more mature markets. However, it is a learning process on both ends. Locally, you have to get used to different standards and methods, as well as different compliance rules. This was a problem in Ukraine, for instance: how to deal with the Western, standardised compliance rules that were previously unknown off in that country. </p><p style="text-align:justify;">There is also a learning curve for investors. Obviously, they have to do a lot of research about a country before investing or entering a new market. Getting accepted by local communities is something for which one cannot prepare easily – surprises might happen. But, in the end, it is beneficial for both ends.</p><p style="text-align:justify;">The Southeast European markets hold a lot of appeal, from a global perspective. They are quite diverse, but all are opportune. The Slovenian market is more adapted to Western standards, since Slovenia has been a member of the European Union for a number of years now. The country has very close ties to other Western economies. Traditionally, there is a lot of interaction with a number of its surrounding countries – Austria, Italy and Hungary to a certain extent. </p><p style="text-align:justify;">On the other hand, Serbia is still seen as standing aside in relation to the European market. Smaller markets such as Bosnia Herzegovina, Macedonia or Montenegro are very much untapped markets with fast development potential. </p><p style="text-align:justify;">The Balkans draw investors from around the world, especially from the EU, Turkey, Russia and China. On their part, the countries of that region further foster a friendly environment for foreign investors through tax reforms and various incentives.</p><h2 style="text-align:justify;">A Foothold into Europe</h2><p style="text-align:justify;">One of the more appealing characteristics of South Eastern Europe, especially when compared to Central and Eastern Europe, is that it is still very much untapped. Looking at the events in the past 20 years, we can definitely see the same pattern being duplicated in South Eastern Europe. Particularly in markets such as Serbia, Macedonia, Montenegro and Bosnia and Herzegovina. These are markets that offer huge opportunities and that still have a number of regulations a bit weaker, or more flexible than in the EU. </p><p style="text-align:justify;">For instance, Macedonia is 10<sup>th</sup> on the World Bank's Doing Business List. The GDP is expected to exceed 3.3% in 2018, due to higher domestic demand, and public and foreign investments. And, Macedonia's "One-Stop-Shop" system enables investors to register their businesses four hours after the application submission – ranking it number four globally in the Starting Business category.</p><p style="text-align:justify;">With a 15% income tax, <a href="http://ras.gov.rs/invest-in-serbia/why-serbia">Serbia</a> has one of the most favourable corporate income taxes in the wider region. The country signed free trade agreements to markets counting 1.1 billion people – the EU, Customs Union (Russia, Kazakhstan, and Belorussia), Turkey, CEFTA, and others. I see Serbia as a good gateway for Chinese and other overseas investments into the rest of Europe. For example, the 10 billion euro-worth "Belt and Road" infrastructure project in one of such initiatives that will greatly improve communications and increase Chinese presence in Europe and Asia.</p><p style="text-align:justify;">Clearly, the existing historic relations and numerous trade agreements set the stage for positive opportunities. In a certain sense, through these markets, despite some of them not being a part of the EU yet, one can definitely get a firm foothold into the rest of Europe.</p><p style="text-align:justify;"> </p><p style="text-align:justify;"> </p><p style="text-align:justify;"><em class="ms-rteStyle-Quote">The opinions expressed in this article are the author's own and do not reflect the view of any other partner of or any other person associated with Karanović & Nikolić. This document is not, and should not be regarded as investment or legal advice or as a recommendation regarding any particular course of action.</em></p>
The Buzz in Serbia: CEE Legal Matters Interview with Darko Jovanović The Buzz in Serbia: CEE Legal Matters Interview with Darko Jovanović | Views | Karanović & Nikolić https://www.karanovic-nikolic.com/knviews/Pages/2017/08/The-Buzz-in-Serbia-CEE-Legal-Matters-Interview-with-Darko-Jovanović.aspxThe Buzz in Serbia: CEE Legal Matters Interview with Darko Jovanović The Buzz in Serbia: CEE Legal Matters Interview with Darko Jovanović | Views | Karanović & Nikolić string;#24/08/2017<p style="text-align:justify;">The interview with Darko Jovanović was published in August 2017, by CEE Legal Matters. To see the original article, please follow this <a href="http://ceelegalmatters.com/index.php/serbia/6948-the-buzz-in-serbia-interview-with-darko-jovanovic-of-karanovic-nikolic">link</a>.</p><p style="text-align:justify;">Karanović & Nikolić Partner Darko Jovanović is upbeat. "Serbia is once again a hotspot in the region," he says, "this time not for unpleasant reasons, but for its economic recovery."</p><p style="text-align:justify;">According to Jovanović, "the previous and current government made significant moves forward in terms of financial consolidation — tightening and cuts to loose ends of the public deficit — to increase the attractiveness of the country to FDI." Jovanović refers, among other things, to an investment incentives scheme adopted by the Republic of Serbia, and says that, "as a result of the concerted efforts of the government, the IMF is projecting that the country's deficit will shrink to 1.1 % of GDP." </p><p style="text-align:justify;">Jovanović also refers positively to a recent Western Balkan Summit in Trieste, where "it was decided to create a Regional Economic Area, consolidating markets of some 20 million people — Serbia, Macedonia, Montenegro, Albania, Bosnia, and Kosovo. A transport community treaty was also signed, which should make transport more efficient and facilitate the transfer of goods. Also good is that there is a higher commitment by European banks that attended the meeting, and they committed to investing 3.5 billion euros in that Regional Economic Area, out of which 50% will be committed to Serbia exclusively."</p><p style="text-align:justify;">Jovanović reports "high activity on the infrastructure side, predominantly on the basis of highway construction projects with Chinese construction firms." He says, "there will be a new railway built between Belgrade and Budapest, in large as the result of the good cooperation between two countries, plus Hungary's overall commitment to Serbian investments, which also includes the recent acquisition by Hungary's OTP bank of the Serbian NGB subsidiary." According to Jovanović, "this railway will fit within that context."</p><p style="text-align:justify;">Similarly, he says, "we were delighted to come to the end of the first/epic PPP project in Serbia — a waste treatment project in Vinča, Belgrade — which is now in the final phase of awarding the project on the basis of Serbia's PPP/Procurement legislation." In addition, he reports, "a new and even bigger concession has been announced for the Belgrade airport expansion." The project has created "huge interest" in foreign investors, Jovanović says, including Vinci, from France, Inchon Airport from Seoul, GMR (which operates New Delhi airport), and HNA, from China, which Karanović & Nikolić is advising on the process. "The decision should be made in the next two months, he says, and the process is expected to result not only in a good concession fee to the government but also in improvements and expansions to the current airport.</p><p style="text-align:justify;">"And we're expecting to see several large privatisations as well," he says, "including several agriculture companies and the Bor mining and smelting complex." According to Jovanović, "if the government manages to sell it — probably to either Chinese or Russian investors — we would see further financial consolidation, as currently it's losing money, so it would need to be improved first before it becomes profitable."</p><p style="text-align:justify;"> "Real Estate is booming," Jovanović says, "primarily because of Israeli investments, but also because of South African REITs that have come and bought two largest shopping malls in Belgrade." He says new residential complexes and new office parks are popping up regularly, and he describes a notable development on the Belgrade waterfront. "At the end of the day," he says, "there are a number of very good things happening in Serbian real estate, influenced to some extent by the relaxation of certain procedures for issuing construction permits."</p><p style="text-align:justify;">The banking sector in Serbia is consolidating, Jovanović reports, with several banks exiting the market and others expected to follow in the next few months. "But the sector is not shrinking," he says, "because their assets are being taken over by existing banks (such as OTP and Societe Generale) or by new banking players (such as Direktna Bank and RiverStyxxInvestments). He says the first wave of NPL transactions is more or less over in Serbia, "but we're now starting to see more secondary sales of those portfolios."</p><p style="text-align:justify;">Finally, Jovanović reports that there are ongoing discussions about amending the Serbian Constitution, "If these amendments happen, other legislative shaping may be expected as well." </p><p style="text-align:justify;">Notwithstanding possible amendments to the Constitution, Jovanović says changes to the country's Company Law are being considered, as are changes to the PPP/Concession Law, which will l be changed to fix some of the practical problems that arose in recent projects. "We also expect to see changes in the Law on Capital Markets, which are still relatively weak in Serbia," he says, as well as "changes to the foreign exchange regulations, as well as to the Public Procurement law, which also needs to be reshaped." According to Jovanović, "at the end of the day all these changes should have the same goal: To improve the market to attract domestic and foreign investors."</p><p style="text-align:justify;">Ultimately, Jovanović says that he's optimistic about the state of things in Serbia, though he cautions that political and other developments across CEE may affect the country's progress. "As always, lots of things in the region are moving into right direction," he says, "and currently forecasts look very good."​</p><p style="text-align:justify;"> </p><p style="text-align:justify;"><br></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><p style="text-align:justify;">​</p>
The Third Energy Package – What the Macedonian Electricity Market Needs? The Third Energy Package – What the Macedonian Electricity Market Needs? | Views | Karanović & Nikolić https://www.karanovic-nikolic.com/knviews/Pages/2017/07/The-Third-Energy-Package–What-the-Macedonian-Electricity-Market-Needs.aspxThe Third Energy Package – What the Macedonian Electricity Market Needs? The Third Energy Package – What the Macedonian Electricity Market Needs? | Views | Karanović & Nikolić string;#18/07/2017<p><span style="font-family:"times new roman", georgia, serif;font-size:1rem;">Two and a half years after the expiry of the deadline for the implementation of the Third Energy Package, the Macedonian authorities seem eager to finalise this process in the near future. The new draft legislation has been i</span><span style="font-family:"times new roman", georgia, serif;font-size:1rem;">n the pipeline for quite some time, but until now its adoption was postponed due to different reasons. From recent meetings between the delegation of the Energy Community and the representatives of the new <a href="http://www.vlada.mk/?language=en-gb">Government of the Republic of Macedonia</a>, it appears that the officials set up an agenda for overcoming the</span><em style="font-family:"times new roman", georgia, serif;font-size:1rem;"> status quo</em><span style="font-family:"times new roman", georgia, serif;font-size:1rem;">.</span><br></p><p>During the process for transposing the Third Energy Package into national legislation, the main focus will have to be put on the requirements for unbundling, market opening, regional market integration and strengthening the position of the Energy Regulatory Commission ("<strong>ERC</strong>"). The most challenging issue which needs to be tackled is certainly the postponement of the electricity market liberalisation.</p><h2>Unbundling </h2><p>The Macedonian electricity market consists of the following three key players:</p><ul><li>the state-owned <strong><em></em></strong><a href="http://www.mepso.com.mk/en-us/">Electricity Transmission System Operator of Macedonia (MEPSO)</a> (<em>Macedonian</em>: <em>Македонски електропреносен систем оператор)</em>, acting as a transmission system operator and as a market operator;</li><li>the<em> </em>state-owned <strong><em></em></strong><a href="http://www.elem.com.mk/?lang=en">Macedonian Power Plants (ELEM)</a><em> </em>(<em>Macedonian</em>: <em>Електрани на Македонија</em><em>)</em>, the biggest domestic electricity producer and an operator with a limited distribution network; and, </li><li><strong><a href="https://evn.mk/">EVN Makedonija​​​​​​</a></strong>, a private company which owns and operates most of the distribution network (i.e. 99.38%).</li></ul><p>In line with the provisions from the Second Energy Package, MEPSO has been legally unbundled for quite some time, whereas ELEM and EVN Makedonija are not compliant with the applicable unbundling requirements. In particular, both companies hold supply licences and do not keep separate financial accounts for each of their regulated activities. According to the latest Annual Implementation Report prepared by the Energy Community Secretariat, EVN Makedonija undertook several steps to rectify this situation, however a functional unbundling was not reached. </p><p>The revised electricity legislation intended to transpose the Third Energy Package will have to introduce rules for ownership unbundling and the certification of the transmission system operator. According to recent news, the draft certification rules have been finalised, but their adoption will come after the amendments to the primary energy legislation. The authorities will also need to ensure the implementation of the legal and functional unbundling of the distribution system operators, EVN and ELEM.</p><h2>Market opening and Eligibility </h2><p>In 2014, a few months before the scheduled full liberalisation of the electricity market, the Government decided to postpone it until the 1<sup>st</sup> of July, 2020. The liberalisation process should now happen in several stages i.e. each year a certain group of consumers will become eligible to choose its electricity supplier. For instance, non-households (having less than 50 employees and annual turnover below EUR 10 million) with electricity consumption over 100 MWh will enter the open market on the 1<sup>st</sup> of July, 2018, while those with electricity consumption over 25 MWh on the 1<sup>st</sup> of July, 2019. The households and the rest of the non-households will be eligible from the 1<sup>st</sup> of July, 2020.</p><p>The liberalisation was postponed in order to prevent shock prices, especially in the case of households. Now, on the one hand, according to an announcement, this breach of the Treaty establishing the Energy Community will be rectified. But on the other hand, the Government plans to introduce a daily tariff for cheap electricity, which needs to be carefully structured in order to avoid any further non-compliance with the Energy Community acquis. The Third Energy Package allows for such temporary measures, but they must focus on the socially vulnerable population and not be burdensome for the other electricity consumers. </p><p>Another obstacle to the establishment of a well-functioning electricity market are the public service obligations imposed on EVN and ELEM. On one side, EVN carries out a supply of last resort, while ELEM generates electricity to meet the demands of the suppliers of last resort, and sells the electricity at regulated prices. As noted by the Energy Community, these public service obligations represent a breach of the Third Energy Package - since they are excessive and without time limitation.</p><h2>Regulatory Independence and Powers</h2><p>All requirements from the Third Energy Package, with respect to the national regulatory authorities, aim to ensure an independent and autonomous decision-making process. To reach this goal, the regulatory authority should be independent from any public or private party, it should have a separate annual budget and sufficient human and financial resources for exercising its powers. </p><p>The national legislation satisfies the Third Energy Package independence requirements, with respect to the ERC, except for the lack of a rotation scheme for ERC board members. Hence, the announced amendments need to focus on this issue and on transposing all of the regulatory powers from the Third Energy Package.</p><p><br></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><p>​</p>
The New Montenegrin Law on Prohibited Advertising The New Montenegrin Law on Prohibited Advertising | Views | Karanović & Nikolić https://www.karanovic-nikolic.com/knviews/Pages/2017/06/14/The-New-Montenegrin-Law-on-Prohibited-Advertising.aspxThe New Montenegrin Law on Prohibited Advertising The New Montenegrin Law on Prohibited Advertising | Views | Karanović & Nikolić string;#14/06/2017<p>On the 27<sup class="ms-rteFontSize-1">th</sup> of April, 2017, Montenegro introduced the new Law on Prohibited Advertising ("<strong>Law</strong>"), <span class="ms-rteFontSize-2">which </span>came into force on the 17<sup class="ms-rteFontSize-1">th</sup> of May, 2017. This Law represents a new piece of Montenegrin legislation deriving from the process of harmonising the local law with the EU Directive 2006/114/EZ about misleading and comparative advertising. </p><p>Its aim is to protect traders and consumers from prohibited advertising. Since the consumers have already been protected from prohibited advertising through the Law on Consumer Protection, the primary focus of the new Law is to provide traders with adequate protection in relation to their competitors (<em>business to business</em>).</p><h3>What is Prohibited Advertising?</h3><p>Advertising is defined as the production of a representation which recommends the advertiser, its professional or business activity, in order to promote the supply of goods, services and immovable property. The Law explicitly prohibits:</p><ol><li><strong>Misleading advertising</strong> - any advertising, including the manner of presentation of the advertiser, which deceives, or is likely to deceive, the persons to whom it is addressed and might affect their inadequate economic behaviour or injures or is likely to injure the interests of competitors; and,</li><li><strong>Comparative advertising</strong> - any advertising which directly or indirectly refers to a competitor or goods and services offered by a competitor. </li></ol><p>However, comparative advertising shall be permitted when the following conditions are met:</p><ul><li>it is not misleading within the meaning of the Law and the Law on Consumer Protection;</li><li>it compares goods or services meeting the same needs, or intended for the same purpose;</li><li>it objectively compares one or more material, relevant, verifiable and representative features of those goods and services, including the price;</li><li>it does not discredit or denigrate the trademarks, trade names, other distinguishing marks, goods, services, activities or relations between competitors;</li><li>in the case of products with a designation of origin, it relates in each case to products with the same designation;</li><li>it does not take an unfair advantage of the reputation of a trademark, trade name or other distinguishing marks of a competitor, or of the designation of origin of competing products;</li><li>it does not present goods or services as imitations of goods or services bearing a protected trademark or trade name; and,</li><li>it does not create confusion among traders, between the advertiser and a competitor, or between the advertiser's trademarks, trade names, other distinguishing marks, goods or services and those of a competitor.</li></ul><p>The trader who performs advertising shall be responsible for misleading and comparative advertising ("<em>prohibited advertising</em>").</p><h3> Protection from Prohibited Advertising</h3><p>The lawsuit for the cessation of prohibited advertising can be filed by: </p><ol><li>chambers and interest trade associations; and, </li><li>an organisation for consumer protection (authorised to file a lawsuit for the protection of collective consumer interests). </li></ol><p>When Montenegro enters the European Union, authorised persons from the EU will be able to initiate the procedure for the protection from prohibited advertising which affects or is likely to affect the traders from EU member states. In order to do this they need to: </p><ul><li>be authorised to initiate the procedure for the collective protection of traders from prohibited advertising in their EU member state; and, </li><li>they have to submit relevant evidence accordingly. </li></ul><p>The lawsuit is filed against a particular trader, or a group of traders from the same economic sector, that uses or encourages the same or similar prohibited advertising, or a holder of the codex stipulating rules that encourage such advertising.</p><p>If the lawsuit is well-grounded, the court will order the cessation of prohibited advertising and the prohibition against its repetition in the future. The court will also potentially order the defendant to publish the entirety or a part of the decision at its own expense and correct such advertising.</p><p>The court decision upholding the lawsuit creates an obligation for the defendant to refrain from the same or similar prohibited advertising even towards other traders who did not participate in the court procedure.</p><p>However, since this Law is the result of obligations that Montenegro has in the course of its negotiations for entering the EU, and because it is a new and specific regulation directed exclusively towards prohibited advertising, it remains to be seen what effect it will produce in practice.</p><p>Should you have any questions or concerns, do not hesitate to contact us:</p><p><a href="mailto:Marjan.Poljak@karanovic-nikolic.com">Marjan.Poljak@karanovic-nikolic.com</a></p><p><a href="mailto:Milena.Roncevic@karanovic-nikolic.com">Milena.Roncevic@karanovic-nikolic.com</a></p><p><a href="mailto:Milica.Filipovic@karanovic-nikolic.com">Milica.Filipovic@karanovic-nikolic.com</a></p><p><a href="mailto:Sonja.Guzina@karanovic-nikolic.com">Sonja.Guzina@karanovic-nikolic.com</a></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>
The Macedonian Gasification Saga The Macedonian Gasification Saga | Views | Karanović & Nikolić https://www.karanovic-nikolic.com/knviews/Pages/2017/06/07/The-Macedonian-Gasification-Saga.aspxThe Macedonian Gasification Saga The Macedonian Gasification Saga | Views | Karanović & Nikolić string;#07/06/2017<p>The Macedonian energy market is currently mainly focused on the country's gasification project, despite the lack of movements or developments in the energy sector and legislation this past year.</p><p>In fact, some time passed since there was any tangible evidence regarding the gasification of Macedonia, which missed the deadline for the transposition of the Third Energy Package by more than two years. </p><p>Nevertheless, it is important to provide a short breakdown of current, ongoing activities regarding the Macedonian gasification process, which is considered the country's main energy focus at the moment.</p><h2>The Štip – Negotino Section</h2><p>The construction of a new gas network from Štip to Negotino started in August 2016, and it's being carried out by a Macedonian consortium of 5 companies. The new investment of EUR 16 million in the network will allow it to be 36km long. It will connect to the Klečovce – Štip network, which is 61km long and was completed in June 2016. This construction is expected to finish by the end of 2017.</p><p>Besides this section, the following ones are being built:</p><ul><li>Negotino – Prilep – Bitola; and</li><li>Skopje – Tetovo – Gostivar,</li></ul><p>This construction work started at the beginning of this year and is expected to be finalised sometime during 2019. The completion of these two segments will conclude the first phase of the gasification of Macedonia.</p><h2>Gasification of Cities Prolonged While Tendering Continues</h2><p>Three years ago, after the publication of a notice for construction of a 250km long distribution network in Skopje, in the inhabited areas of the western and eastern region, the <a href="http://www.vlada.mk/">Macedonian Government</a> annulled the resolutions by which it was seeking companies for the financing, construction and management of the network.</p><p>The Government then stated that they are looking into new resolutions in relation to the procedures for the construction of the distribution of the natural gas network for all three regions. Estimates for the project (the gasification of all 80 municipalities in Macedonia) amount to an 800km long network, approximated at EUR 250 million.</p><p>Now in 2017, while the construction of the Negotino – Prilep – Bitola and Skopje – Tetovo – Gostivar sections is developing, the Government published new tenders for a secondary and a tertiary gas network for the gasification of Skopje, as well as the Eastern and Western regions of the country. This is a call for a public-private partnership – and while similar (unsuccessful) calls have been published in the past, the new and improved conditions might provide a successful resolution to the lingering issue that is gasification. Specifically, the duration of the concession is extended to 30 years (previously being 20 years), while government subsidies regarding connection to the system are lower by 20%. Other technical improvements were also announced. The project has an estimated value of 150 million euros.</p><p>According to government sources, expectations are that the primary gasification system will be complete by 2020, while 70% of the entire country's gasification will be done by 2022.</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>
The Ministry of Finance Issued New VAT Rulebooks and Prescribed Arm’s Length Interest Rates for 2017 The Ministry of Finance Issued New VAT Rulebooks and Prescribed Arm’s Length Interest Rates for 2017 | Views | Karanović & Nikolić https://www.karanovic-nikolic.com/knviews/Pages/2017/04/26/The-Ministry-of-Finance-Issued-New-VAT-Rulebooks-and-Prescribed-Arm’s-Length-Interest-Rates-for-2017.aspxThe Ministry of Finance Issued New VAT Rulebooks and Prescribed Arm’s Length Interest Rates for 2017 The Ministry of Finance Issued New VAT Rulebooks and Prescribed Arm’s Length Interest Rates for 2017 | Views | Karanović & Nikolić string;#26/04/2017<p>​The Ministry of Finance was rather busy releasing VAT rulebooks with the purpose of further clarifying new rules in place for the supply of services introduced by recent <a href="/knviews/Pages/2017/01/18/Serbian-Parliament-adopts-changes-to-Tax-Laws.aspx"><span style="text-decoration:underline;">amendments to the VAT Law</span></a>.</p><p style="text-align:justify;">The <em>Arm's length</em> interest rates for loans in euros and dinars have decreased, while rates for loans in Suisse francs and US dollars have slightly increased.</p><h2>VAT Treatment of Supplies Related to Real Estate</h2><p style="text-align:justify;">The new rulebook on the services provided in connection with real estate gives a list of services which are deemed to be related to real estate, and therefore subject to the Serbian VAT - if the relevant real estate is located in Serbia. Listed services are subject to VAT irrespective of whether they are provided to a resident or to a non-resident. </p><p style="text-align:justify;">Some of the listed services are commonly considered to be related to real estate matters (land surveying, construction, supervision of construction, lease etc.). However, the list also contains services which were regarded as consulting services before VAT Law amendments (e.g. assessment of the characteristics of immovable property for the purpose of assessing energy efficiency), or services related to works on movable property (e.g. installation or maintenance of the equipment that was installed in the facility as its inseparable part).</p><p style="text-align:justify;">Legal services, such as the drafting of construction agreements, the sale or lease of real estate located in Serbia, are also deemed to be services provided in connection with real estate - and thus subject to Serbian VAT, if the real estate is located in Serbia. On the other hand, legal advisory and tax advisory services in relation to real estate are not deemed to be related to real estate from the VAT perspective, and these services will be subject to VAT only if they are provided to a Serbian service recipient. </p><h2>VAT Exemptions for Transportation Services</h2><p style="text-align:justify;">The new rules in place for supply also affect transportation services. The amendments to the rulebook on VAT exemptions were issued in order to clarify the VAT exemption procedure for transportation services relating to import, export, and the transit of goods, and they are aligned with the new rules in place for supply. </p><p style="text-align:justify;">The place of supply for transportation services is generally the registered seat of the service recipient. The VAT exemption is prescribed for service fees related to the transport of imported goods from foreign countries to the first delivery place in Serbia, instead of service fees for the transport from the border to the first delivery place. In connection to the export of goods, the fee for transport from a Serbian loading point to a foreign country is exempted, instead of the fee for transport to the Serbian border.</p><p style="text-align:justify;">The new rules will simplify the administration of the VAT for transport services.</p><h2>Arm's length Interest Rates for 2017</h2><p style="text-align:justify;">The new <em>arm's length</em> interest rates for loans provided to Serbian companies, or by Serbian companies, are as follows:</p><ol><li>6.46% for short term loans in RSD,</li><li>6.39% for long term loans in RSD,</li><li>3.98% for short term loans in EUR,</li><li>4.25% for long term loans in EUR,</li><li>7.08% for long term loans in CHF,</li><li>4.61% for short term loans in USD,</li><li>5.72% for long term loans in USD. </li></ol><p style="text-align:justify;">The interest rates are applicable for the purpose of determining the deductibility of interest expenses, as well as for the attribution of interest income for tax purposes in the year 2017.</p><p><em class="ms-rteStyle-Quote">Information provided in this document does not represent any legal advice, or advice of any kind with respect to certain matter, but is intended for general informative purpose only.</em></p>
New European Data Protection Regulation New European Data Protection Regulation | Views | Karanović & Nikolić https://www.karanovic-nikolic.com/knviews/Pages/2017/04/04/New-European-Data-Protection-Regulation.aspxNew European Data Protection Regulation New European Data Protection Regulation | Views | Karanović & Nikolić string;#04/04/2017<p>​With the last Directive on Data Protection (Directive 95/46/EC; the "Directive") adopted in 1995 and in light of the rapid and vast technological developments since then, the EU has been aware for quite some time now that a new data protection legal framework is needed. With the ongoing debates on this topic in the EU bodies that started back in January 2012, the new General Data Protection Regulation (Regulation (EU) 2016/679; the "Regulation") was finally adopted in April 2016, and will come into effect on the 25<sup>th</sup> of May, 2018.</p><p>The Regulation will repeal the Directive, which provided guidelines for the regulation of data protection across the EU and urged Member States to adopt national legislative acts. In the end it showed that the determination of general principles and objectives, which was pursued with the Directive, was not sufficient as it did not prevent Member States to implement the Directive in different ways, eventually leading to disunity of data protection rules across the EU and generating legal uncertainty. A diversity of regulatory frameworks in EU Member States presented a considerable disadvantage to all companies wishing to enter into the markets of various Member States, which led to distortion of competition and had a negative impact on competitiveness of the EU economy as a whole.</p><p>The scope of the Regulation is much broader than referring only to the protection of natural persons with regard to the processing of personal data. Its main objective is to ensure the free movement of personal data, not only within the EU, but also to third countries and international organisations, and to allow both private companies and public authorities to make use of such personal data, all while ensuring a high level of protection.</p><p>Presented below are the main novelties introduced by the Regulation that are expected to bring these aspirations to life:</p><h3>1.        Expanded territorial scope</h3><p>The Regulation redefines the territorial scope of the data protection framework, as the main focus is now switched from the controllers and the location of their establishments or equipment used for data processing to subjects who are in the EU.</p><p>Pursuant to the Directive, the national law applies in cases where processing is carried out in the context of the activities of an establishment of the controller on the territory of the Member State. Consequently, the controllers with establishments on the territory of several Member States had to ensure compliance of each establishment with the national law of the respective Member State. National law also applied to the controllers using data processing equipment, which was located within EU.</p><p>On the contrary, the Regulation is not only applicable for the processing of data carried out in the context of the activities of the controller or processor having its seat within EU, but also for the processing of data of all subjects who are in the EU, even if the seat of the controller or processor is outside the EU. This is under the condition that processing relates either to (i) the offering of goods or services to such subjects in the EU, or (ii) the monitoring of their behaviour (as far as their behaviour takes place within the EU).</p><h3>2.         Reinforced consent requirements</h3><p>The Regulation states, in more detail than the Directive, that an informed, voluntary, explicit and unambiguous consent of the data subject for processing of data has to be given, either in the form of a statement or other "<em>clear affirmative act</em>". Consequently, silence or any other inactivity cannot be interpreted as consent, which has to be given by a written or oral statement or other conduct clearly indicating subject's consent (such as ticking a box when visiting a website or choosing technical settings). Ultimately, the controller has to be able to prove that consent has been given. In order to be able to give an informed statement, the subject has to know, at the very least, the identity of the controller and the purpose of data processing.</p><p>The Regulation is also stricter when it comes to the question of voluntariness of consent. Consent will be deemed involuntary if the subject had no choice or if he or she could not refuse or revoke the consent without any detriment. In cases where the performance of the contract is conditional upon given consent, even though the consent is not necessary for the performance, such consent will also be deemed involuntary. What is more, the consent will not be valid when there is an obvious inequality between the data subject and the controller.</p><p>With regard to subjects' consent in particular, Member States will be free to adopt specific regulations on the processing of employees' personal data in the employment context.</p><h3>3.         New data subjects' rights</h3><p>The Regulation expands the right to erasure, which is now also known as "<em>the right to be forgotten</em>", and introduces a new right to data portability. The right to be forgotten bounds the controller to erase data without undue delay upon the subject's request, if personal data is no longer necessary for the purpose of processing, if there is no legal basis for processing (including cases where data subject withdraws his or her consent for processing), if the processing was illegal or if the erasure is required by EU or national law. The right to data portability gives the data subject a right to a direct transmission of data from one controller to another.</p><h3>4.         Data protection officers and other controllers' and processors' obligations</h3><p>For the first time the Regulation imposes direct obligations to data processors. From now on, provided that (i) the processing is carried out by a public authority, (ii) the processing requires regular and systematic monitoring of data subjects, or (iii) the processing refers to large scale of special categories of personal data, every data processor and data controller will have to appoint a data protection officer ("DPO"). Each company within the group of associated companies will have to appoint its own DPO, unless one DPO will be accessible from every company within the group. </p><p>A DPO should be a person with expert knowledge of data protection. A DPO should also be independent, meaning that no instructions may be given to the DPO and that the DPO reports directly to the management body of the controller/processor. The main tasks of the DPOs will include advising and informing the controller/processor, regulatory compliance verification, acting as a contact point for the supervisory authority, etc. Data subjects will be entitled to approach the DPO directly.</p><p>Furthermore, a new obligation has been imposed on organisations acting as controllers or processors, who will have to maintain a record of personal data processing activities. These will include information such as the purpose of processing, the controller's or processor's contact details, the categories of data subjects, personal data and recipients, to whom this data will be disclosed, etc.</p><p>In case of a personal data breach the processor is obliged to notify the controller and the controller is obliged to notify the competent supervisory authority. Data subjects also have to be notified about the breach if it is likely that the breach will result in high risk for their rights and freedoms. </p><h3>5.         Privacy by design and by default</h3><p>Another general obligation was adopted with a view to ensure compliance with the requirements of the Regulation. The controller will have to adopt adequate internal policies and implement measures which will meet the principles of data protection by design and by default. Privacy by design demands from the controller to adopt appropriate measures which will integrate the necessary safeguards for processing in order to meet the requirements of this Regulation and protect the rights of data subjects (such as pseudonymisation, data minimisation, etc.). These measures will have to be adopted not only at the time of processing but also at the time of planning the data processing. Privacy by default, on the other hand, means that the controller has to adopt measures so that only the processing of such data which is necessary for the purpose of processing will be possible.</p><h3>6.         Transfer of personal data outside EU</h3><p>No special permission is required for data transfer to non-EU countries or to international organisations, if the European Commission assesses that the respective country or international organisation provides an adequate level of data protection. When assessing the adequacy, the European Commission takes into consideration first and foremost the standard of human rights protection, the adequacy of the local legislation, and the existence of supervisory bodies and international commitments. Nevertheless, transfer to non-EU countries and international organisations for which the above assessment has not been made is possible, if appropriate safeguards are provided by the controller or the processor and effective legal remedies are available for the data subjects.</p><h3>7.        One-stop-shop</h3><p>The Directive already provided that every Member State has to establish a supervisory authority to monitor data protection regulations. Every supervisory authority is competent for data protection matters on the territory of its own Member State. With a view to the unification of regulation as well as in practice, the Regulation now stipulates that in cases where the controller or processor has establishments in several Member States, the supervisory authority of the main establishment is competent as the lead supervisory authority for the cross-border processing carried out by said controller or processor.</p><h3>8.         New European data protection board</h3><p>The European Data Protection Board (the "Board") will be a new EU body, composed of the head of a supervisory body of each Member State and the European Data Protection Supervisor. Its main task will be to ensure consistent application of the Regulation, which will also be pursued by issuing and publishing opinions, guidelines, recommendations and best practices. Once a year the Board will have to issue an annual report regarding data protection in and outside EU.</p><p>In addition to the consulting function of the Board, it will also have the power of a decision-maker with regard to the activities carried out under the consistency mechanism. When the supervisory authority will wish to adopt certain measures, the Board will have to issue an opinion which will have to be complied by the supervisory authority to the greatest extent possible. In certain disputes, it will be competent to adopt the binding decision.</p><h3>9.         Sanctions and penalties</h3><p>Pursuant to the Directive up until now the Member States determined the nature and level of penalties by themselves. The new Regulation provides administrative fines for certain infringements as well as the level of such fines. The highest level of an administrative fine pursuant to the Regulation is EUR 20 million or, for an undertaking, 4% of their total worldwide annual turnover of the preceding financial year, whichever is higher. Notwithstanding, additional penalties for other infringements may be prescribed by the Member States.</p><h3>A glance to the future</h3><p>Now it is the controllers' and processors' turn. By spring 2018 they have to ensure compliance of data processing under the new Regulation. Unified rules within the EU market and, consequently, unified practices regarding data processing, will make it easier for the companies as they will know what to expect when entering the markets of other Member States. Eliminating yet another administrative impediment will certainly facilitate free movement within the EU. On the other hand, data subjects will also benefit as they will now know what level of security can be anticipated in each and every one of the Member States.</p><p><span class="ms-rteStyle-Quote">The information in this document is not intended to provide and does not constitute legal or any other advice on any particular matter and is provided for general information purposes only.</span></p><p><em><em></em></em> </p><p><em><em>Slovenian version:</em></em></p>
Serbian Parliament adopts changes to Tax Laws Serbian Parliament adopts changes to Tax Laws | Views | Karanović & Nikolić https://www.karanovic-nikolic.com/knviews/Pages/2017/01/18/Serbian-Parliament-adopts-changes-to-Tax-Laws.aspxSerbian Parliament adopts changes to Tax Laws Serbian Parliament adopts changes to Tax Laws | Views | Karanović & Nikolić string;#18/01/2017<p>At the end of 2016 the Serbian Parliament adopted changes to Serbian tax laws, introducing a number of important changes in the area of VAT, excise duties and general tax procedures. Amendments to the laws governing these areas were adopted at the very end of 2016 – on the 28<sup>th</sup> of December 2016.</p><p>In addition to the changes made regarding tax laws, some important changes have been made in the area of criminal prosecution of tax avoidance through amendments to the Serbian Criminal Code. </p><p>A number of new double tax treaties will start to apply in 2017. The Serbian Ministry of Finance issued an important opinion concerning taxation of on-line advertising services.  </p><h2>Amendments to VAT law</h2><p>The most important changes introduced by the latest amendments to the VAT law concern the obligation of foreign suppliers to register for VAT in Serbia, and the place of supply rules which have been remodelled completely. </p><p>The VAT Law now prescribes that foreign suppliers are required to register for VAT in Serbia and appoint their VAT representative only if they make taxable supplies in Serbia to non-taxable persons. In another words, the obligation to register for VAT now exists only if a taxable supply is made to a person who cannot reemit VAT. In this case the obligation applies irrespectively of the amount of annual turnover of the foreign supplier – thresholds for mandatory registration which apply to resident taxpayers (RSD 8 million) do not apply to foreign suppliers. </p><p>Failure to register for VAT by a foreign supplier is sanctioned as a misdemeanour punishable by a fine of up to RSD 2 million (app. EUR 18k). </p><p>Another important change introduced by the latest VAT amendments is the complete remodelling of the rules governing the place of supply of services. The purpose of these changes was to align Serbian place of supply rules with EU rules in this area. </p><p>The general place of supply rule now depends on whether a service is supplied to a taxable or to a non-taxable person: if the service is supplied to a taxable person, the place of supply is the place where the recipient of the service is established. If the service is supplied to a non-taxable person, the place of supply is the place where the supplier of the service is established. </p><p>This is the general rule. There are a number of exceptions prescribed for specific types of services. Services such as consulting, services supplied electronically, telecommunication services and other services listed in the law are deemed to be supplied where the recipient of the service is established, regardless of whether the recipient of the service is a non-taxable person. Services related to immovable property are deemed supplied where the property is located. Services concerning cultural, entertainment and sport events are deemed to be supplied in the place where the service was actually provided. </p><p>The amendments introduce a specific definition of the taxable person which applies only for the purpose of application of the place of supply rules. There are two different definitions for situations where a service is supplied by a Serbian supplier: if the service is supplied to a foreign customer, such foreign customer will be deemed to be a taxable person if the customer is registered for a consumption tax in the country of the customer's registered seat. If a service is supplied by a foreign supplier to a Serbian customer, than the Serbian customer will be deemed a taxable person for the purpose of place of supply rules if they conduct a business activity on a permanent basis irrespective of the purpose of such business activity. </p><p>Overall, it seems that the new place of supply rules, coupled with the introduction of mandatory registration of foreign suppliers for VAT will make the assessment of VAT on cross-border supplies much more complicated then under the old rules. </p><p>Other changes introduced by the latest amendments include abolishment of the refund of VAT for babies (food and equipment), which will be replaced by direct subsidies to families with children. </p><p>Rules governing the time of supply of electricity, natural gas and heat have been slightly refined and clarified.</p><p>The supply of wooden briquettes and pallets is now included in the list of supplies subject to the reduced 10% rate.</p><p>Finally, the application of the obligation of registered VAT payers to submit the report on the calculation of VAT is postponed until 2018. </p><p>New VAT rules started on the 1<sup>st</sup> of January 2017, except for rules governing place of supply of services which will start to apply on the 1<sup>st</sup> of April 2017.</p><h2>Tax procedure</h2><p>The most important change introduced by the latest amendments to the Law on Tax Procedure and Tax Administration is the shifting of the jurisdiction for the appeal process from the Tax Administration to the Ministry of Finance. </p><p>Until now, the power to decide on appeals against resolutions of the Tax Administration was delegated to the Tax Administration. From now on, the Ministry of Finance will decide on the appeals. This is an encouraging change, and we hope that it will bring more independence and justice in the second-instance process. This should also contribute to the greater harmonization of the jurisprudence in tax cases, as the Ministry of Finance is also responsible for the binding opinions on the interpretation of tax laws. </p><p>The amendments introduce the possibility for the Tax Administration to issue its resolutions without hearing, if the resolution may be issued on the basis of the information available in public records. </p><p>The amendments now prescribe that the Tax Administration to refuse to register any given company for tax, if tax registration was denied to its sister company. It is also prescribed, that companies whose tax identification number has been suspended (because of unsettled tax liabilities) will not be allowed to register and execute any corporate changes with the Serbian Business Registry Agency.</p><p>The Ministry of Finance will take over its new responsibilities in the second instance starting from the 1<sup>st</sup> of July 2017. This is the period in which the Ministry should take over competent personnel and prepare itself for this new assignment. All other changes introduced by the amendments started to apply  on the 1<sup>st</sup> of January 2017.</p><h2>Amendments to the excise Tax law</h2><p style="text-align:left;">Changes introduced in excise taxes concern primarily cigarettes and coffee.</p><p>Excise taxes on cigarettes have been increased with an explanation that they should be harmonized with the excise rates in the EU. Currently, the excise tax on cigarettes in Serbia is EUR 54 per 1000 cigarettes, while minimal excise duties in the EU is EUR 90 per 1000 cigarettes.</p><p>Minimal amount of excises will be published twice a year, on the 15<sup>th</sup> of February and the 31<sup>st</sup> of July each year. </p><p>The obligation to pay excise tax on coffee will now include entities involved in the processing, roasting, packaging and other activities carried out for the purpose of coffee production, and not only the importation of coffee, as was the case before. At the same time, the amendments introduced a "mini VAT" system for calculating the excise tax due: each participant in the production chain will have the right to reduce the excise due, proportionate to the amount of excise duties paid to the previous participant in the chain. </p><h2>Facebook's and Google's advertising services are subject to withholding tax in Serbia</h2><p>At the end of December 2016, the Serbian Ministry of Finance issued an opinion which stated that services of internet advertising supplied by Facebook and Google to Serbian corporate customers are subject to withholding tax on service income, at the standard tax rate of 20%.  </p><p>The taxes due may be eliminated on the basis of a double tax treaty, but only if Facebook and Google provide their Serbian customers a certificate of residence by their country of residence (Ireland). Each individual customer must have an original copy of the certificate in their hands to be relieved from the obligation to pay tax. This may be difficult to achieve considering the fact Facebook and Google may have many customers in Serbia. </p><h2>New Double Tax treaties</h2><p>Double tax treaties signed over the course of 2015 and 2016, including the treaty with Luxembourg, Armenia and Korea, started to apply on the 1<sup>st</sup> of January 2017. </p><p>Under the treaty with Armenia, interest, dividends, royalties and lease of industrial equipment is subject to be reduced to an 8% withholding tax rate.</p><p>Under the treaty with Korea, the withholding tax rate on dividends is 5% if the recipient of the dividend holds at least a 25% share in the company paying the dividend, and 10% in all other cases. Interest is subject to 10% and royalties to 5% withholding tax rates. Same withholding tax rates apply under the treaty with Luxembourg</p><p>Under all treaties, capital gains generated from alienation of immovable property and shares in companies whose assets are composed mostly of immoveable assets may be taxed in the country where the immoveable asset is located. Capital gains generated from the sale of other assets may be taxed only in the country of residence of the seller. </p><p>The second round of negotiations between Serbia and Israel on the new double tax treaty was held in Belgrade between the 7<sup>th </sup>and 10<sup>th</sup> of November 2016. All main provisions of the treaty have been agreed upon and it is expected that the treaty will be signed soon. The interesting feature of this treaty is that this will be the first treaty which will be fully harmonized with BEPS's (<em>Base Erosion and Profit Shifting</em>) action plan.</p><h2>Changes in the legal definition of Criminal offence of Tax avoidance</h2><p>On the 23<sup>rd</sup> of November 2016, the Serbian Parliament adopted amendments to the Criminal Code. Changes made include, amongst others, criminal offence of tax avoidance. </p><p>Prosecution of tax avoidance was a matter of much controversy in the recent practice, and some of the changes made by the latest amendments are aimed to address these controversies. Though generally welcome, the scope of changes made are unlikely to bring significant improvements in the prosecution of tax avoidance. </p><p>The first, long awaited change is the increase of the threshold for criminal prosecution of tax avoidance. For more than a decade this threshold was set at only RSD 150,000 (less than EUR 1,500). Such a low threshold allowed criminal investigations of minor cases of failure to pay tax, which were often the result of a mere mistake, rather than an actual intent to avoid tax. At the same time, the low threshold exhausted the resources of both the Tax Police and the Office of the Public Prosecutor who have a legal obligation to investigate all cases which may fall under the legal definition of tax avoidance however small, instead of concentrating on high-profile cases of tax avoidance. </p><p>After much debate and lobbying, the threshold for criminal prosecution of tax evasion was increased by the latest amendments, but only symbolically: from RSD 150,000 to RSD 500,000 (app. EUR 4,000). Such a low threshold may be a part of the Government's strategy to combat grey economies with more rigorous sanctions in 2017. Nevertheless, this is not very likely to contribute to neither the efficiency nor to the fairness in the prosecution of tax evasion. </p><p>The thresholds for the two qualified forms of tax avoidance are not changed and remain at the same level (at RSD 1,500.000 and RSD 7,500.000), </p><p>Another important change is that tax avoidance now also includes avoidance to pay tax on illegally earned income. Before the latest amendments, tax avoidance could have been committed (and prosecuted) only with respect to legally earned income. Cases in which a person avoided to pay tax on illegal income were outside the scope of the legal definition of tax avoidance. The result was that the most blatant cases of tax avoidance could not have been prosecuted (such as for avoidance to pay tax and social contributions on salaries paid to illegal workers and similar). The removal of reference to "legal income" from the legal definition of tax avoidance is a welcomed change which should result in a better and fairer prosecution of tax avoidance. </p><p>Finally, the legal definition of tax avoidance now includes a clear rule whereby this criminal offence may be committed both in cases in which the offender avoids his/her own taxes, as well as in cases in which the offender's intent was aimed at the avoidance of someone else's taxes. </p><p>The sanctions for tax avoidance for the most part remain the same: a fine and imprisonment of six months to five years. Sanctions for the most severe cases of tax avoidance have been slightly increased to a minimum of three years of imprisonment (instead of the previous two). The maximal sentence remains the same – ten years of imprisonment. </p><p>The amendments to the Criminal Code enter into force on the 1<sup>st</sup> of June 2017 whereas the provisions on tax avoidance shall enter into force on the 1<sup>st</sup> of March 2018. </p>
Amendments to the Montenegrin Tax Laws Amendments to the Montenegrin Tax Laws | Views | Karanović & Nikolić https://www.karanovic-nikolic.com/knviews/Pages/2016/10/13/Amendments-to-the-Montenegrin-Tax-Laws.aspxAmendments to the Montenegrin Tax Laws Amendments to the Montenegrin Tax Laws | Views | Karanović & Nikolić string;#13/10/2016<p>Montenegrin Parliament adopted the amendments to the Corporate Income Tax Law ("<strong>CIT Law</strong>") and Value Added Tax Law ("<strong>VAT Law</strong>"). Below is a brief description of the main amendments.</p><h2>Corporate Income Tax Law</h2><p>The most important change to the CIT Law is the introduction of the obligation for a non-resident tax payer to file the tax return for capital gains it generates in Montenegro. The non-resident will have to file the tax return within 30 days after the income was generated. The tax authorities will assess the tax in their resolution. Until now, capital gains tax was paid on a withholding basis. </p><p>The non-residents will also be obliged to file the tax return for their income from leasing movable and immovable property, if income is derived from a person who is not obliged to withhold and pay withholding tax (e.g. from an individual).</p><p>The list of income types that are subject to withholding tax is expanded. The withholding tax shall be paid on income generated by resident and non-resident individuals from the sales of used products, goods, and agricultural products purchased from the taxpayer who is registered as a VAT payer. Withholding tax shall be paid on the income generated by the non-resident legal entity with respect to entertainment performances, fun, artistic, sporting or similar activities in Montenegro.</p><p>The latest amendments to the CIT Law prescribe that salaries, severance payments at retirement, redundancy payments and payments of the other benefits at termination of employment, are recognised as a tax deductible expense of Montenegrin taxpayers, in the tax period in which the payment was executed. The expenses will not be recognised when they are accrued.</p><p>The impairment expenses will not be recognised for tax purposes. As an exception, the impairment of the value of shares in capital of the company that is in the process of privatisation may be recognised for tax purposes if shares are acquired by a conversion of receivables into the share capital.</p><p>Conditions that the domestic taxpayer has to fulfill in order to deduct expenses of a write-off of receivables for tax purposes are changed. The taxpayer has to demonstrate (i) that receivables were included into the taxable income, (ii) that they are written-off in taxpayer's books, (iii) that the taxpayer filed the suit, or initiated forced collection, or if it claimed unpaid receivables in the liquidation or bankruptcy procedure, and (iv) that the receivable is older than 365 days. Therefore, it is not required that the taxpayer waits for the ending of the litigation process in order to deduct the expense, but it is enough that it initiated the proceedings.</p><p>The list of expenses that are deductible up to the amount of 3.5% of the total income of the taxpayer is now expanded. Besides expenses incurred for healthcare, education, scientific, religious, cultural, sports, environmental and humanitarian purposes, the list now includes expenses made for purposes of protecting persons with disabilities, social care for children and youth, assistance to the elderly, protection and promotion of human and minority rights, the rule of law, civil society and volunteerism, NATO and European integration, art, technical culture, promotion of agriculture and rural development, sustainable development, consumer protection, gender equality, the fight against corruption and organised crime and the fight against addictions. These expenses will be deductible only if they are executed to legal entities and if they are used exclusively for the above mentioned purpose. Expenses shall be deductible for tax purposes if they are made in cash, goods or in rights and services.</p><p>Amendments prescribe that the taxpayer will be fined in the range from EUR 550 euro to EUR 16,500  if he/she calculates the tax contrary to the CIT law. </p><p>The amendments to the CIT Law will be applied starting from 1 January 2017.</p><h2>Value Added Tax Law</h2><p>A whole new spectrum of imported goods which are exempted from VAT such as non-commercial goods which the passengers carry from abroad in prescribed type, value and quantity, items which domestic or foreign citizens permanently residing in Montenegro inherited abroad, goods directly used for museum, archival, restoration, literary, artistic, musical-scene and film activities, based on the opinion of the competent ministry etc.</p><p>As of 1 January 2018 the VAT shall be paid by reduced rate of 7% for services of preparation and serving of food and drinks in hotels with at least four stars in the Northern region, and in hotels with a minimum of five stars in the Central and Coastal region. It seems that consumers could expect lower prices for these kinds of services. </p>
New Minimum Salary and New Branch Collective Agreements New Minimum Salary and New Branch Collective Agreements | Views | Karanović & Nikolić https://www.karanovic-nikolic.com/knviews/Pages/2016/09/29/New-Minimum-Salary-and-New-Branch-Collective-Agreements.aspxNew Minimum Salary and New Branch Collective Agreements New Minimum Salary and New Branch Collective Agreements | Views | Karanović & Nikolić string;#29/09/2016<p><span class="ms-rteStyle-Quote" style="font-family:"times new roman",serif;font-size:11pt;">*Information provided in this article does not represent any legal or whatsoever advice with respect to certain matter, but is intended for general informative purpose only. </span></p><h2> </h2><h2>New Minimum Salary</h2><p>New minimum salary amount has been adopted at the state level and set to RSD 130.00 net per working hour (approx. EUR 1.04 net). The new minimum amount will be in force as of 1 January 2017 until 31  December 2017.<br>All employers need to abide by this new amount and cannot provide employees basic salary that is below this legal minimum.<br>This new amount overrides  previously valid minimum salary that was in force for two last years, in the amount of net RSD 121.00 net per working hour (approx. EUR 0.9 net).</p><h2>New Branch Collective Bargaining Agreements Adopted</h2><p>Recently, several new branch collective bargaining agreements for different industry groups (“CBAs”) have been adopted:</p><ol><li>CBA for Agriculture, Food, Tobacco and Water Management,</li><li>CBA for Construction and Construction Materials Industry, and</li><li>CBA for Chemistry and Non-Metal Industry. </li></ol><p>CBA for Agriculture, Food, Tobacco and Water Management is, for the time being, applicable only to the signatory parties i.e. only to those employers that are members of the Union of Employers of Serbia.<br>As for the other two CBAs, their transitory provisions note that these agreements will apply only after Government enacts a decision on extended applicability of such CBAs to all employers within the respective industry.<br>It still remains to be seen whether the Government will actually render such decision on any of the above CBAs or not.</p><p>If you need additional information regarding the services of our employment department, feel free to contact us at following e-mails:</p><p>Milena Jakšić Papac, Department Lead <br><a href="mailto:milena.papac@karanovic-nikolic.com">milena.papac@karanovic-nikolic.com</a>  <br>Jelena Danilović, Senior Associate<br><a href="mailto:Jelena.danilovic@karanovic-nikolic.com">Jelena.danilovic@karanovic-nikolic.com</a><br></p>
Drawing the Line – Parallel Import Drawing the Line – Parallel Import | Views | Karanović & Nikolić https://www.karanovic-nikolic.com/knviews/Pages/2016/09/14/Drawing-the-Line-–-Parallel-Import.aspxDrawing the Line – Parallel Import Drawing the Line – Parallel Import | Views | Karanović & Nikolić string;#14/09/2016<p><em class="ms-rteStyle-Quote">This article was initially featured in CEE Legal Matters, June 2016 edition.</em></p><p>​The contemporary business world has become fundamentally tied in with the progress of globalisation, and for anyone involved in it, that is no secret. Anybody would be hard pressed to find an industry that can exist and sustain itself in a purely national context, without – at least in some regard – relying on either a piece of legislation or a practice trend that is related to whatever kind of international functioning. A fine illustrative example of such an issue nowadays can be found in the international trade of fast moving consumer goods (and to a lesser extent pharmaceutical products), as well as the ways in which such products find their path to consumers' hands. More precisely, in the ways that products are moved on a cross-border basis, and how such movement corresponds with the respective national intellectual property (IP) protections in place, bringing us to a division between an international exhaustion of IP rights and the national exhaustion of these same rights. It is the presence of the parallel import issue that has sparked a rather controversial debate over which of the two is preferable. </p><p style="text-align:left;">Parallel import - in some circles considered as the premier example of a 'grey' practice – encompasses products that are "genuine" goods (contrary to counterfeit goods), since they have been manufactured by, or for, or under license, from the brand owner. However, they may have been formulated or packaged for a particular jurisdiction, and then are imported into a different jurisdiction from that intended by the brand owner. Deemed as 'grey' for their ambiguity in terms of being either beneficial or detrimental depending on one's legal point of view – be it competition or intellectual property – it goes to show the inherent difficulty in establishing a related universal set of rules. </p><p style="text-align:left;">If we were to look at it from a particular perspective – the one currently employed in Serbia – it should be noted that the relevant regulatory framework was conceived in 2013 when the creed of national exhaustion of rights was initiated. What this doctrine was then meant to entail was that a trademark could entitle its holder to prohibit its use on the goods which were not placed on the Serbian market by the holder of the trademark or any other person directly authorised by the holder. Exclusive distributors were the ones front running this initiative as it was their own efforts that were mainly impeded by the presence of parallel imported products in a variety of contexts, including the "free ride" that parallel importers were getting from the exclusive distributors' advertising activity, which was designed for the sake of boosting their own sales figures. All of this influenced the commercial court in Belgrade to make a decision that would serve as a defining point of legislation in this regard, finally reaching it in April 2015. From this point on, exclusive distributors have had the right to sue those engaged in parallel import activities on the basis of national exhaustion of intellectual property.</p><p style="text-align:left;">On the other hand, the local distributors – feeling wrongly affected by the decision in question – decided to ask the Serbian Commission for the Protection of Competition for an official opinion, claiming that this ruling has in turn put exclusive distributors in an unfairly gained dominant position. The Commission, in presenting its point of view, made it clear that their explanation will be based on what would be the most beneficial situation for the end consumer. Having that in mind, the Commission opined that competition in this case should be split into two kinds a) static competition – the one related to the pricing of products in which parallel imports bring immediate benefits to consumers by making them cheaper; and b) dynamic competition – the one related to how parallel imports hurt the innovation tendencies (i.e. the diversification of their portfolio) on behalf of the trademark holder, in turn causing a long term detrimental effect on the end consumer. Whilst juxtaposing the two effects, the Commission's final opinion – perhaps unsurprisingly so – was that emphasis should be put on balancing them out. Moreover, the Commission emphasised the importance of having every participant in the market – and especially the one with a potentially dominant position – act within the responsibility of not hurting the market's competitiveness. </p><p>Finally, the entire situation does not bring us much closer to reaching a universal stance on the matter, apart from perhaps educating us somewhat further. With Serbia's ascension to the EU looming, and considering all of the regulatory updates made en route to it, it will be very interesting to see how this issue will play out in the coming period, as the above mentioned act of balancing out the two factors threatens to turn more difficult to commit.</p>
Taxing the Business Atmosphere – Tax Administration’s Aggressive Inspections Taxing the Business Atmosphere – Tax Administration’s Aggressive Inspections | Views | Karanović & Nikolić https://www.karanovic-nikolic.com/knviews/Pages/2016/09/09/Taxing-the-Business-Atmosphere-–-Tax-Administration’s-Aggressive-Inspections.aspxTaxing the Business Atmosphere – Tax Administration’s Aggressive Inspections Taxing the Business Atmosphere – Tax Administration’s Aggressive Inspections | Views | Karanović & Nikolić string;#09/09/2016<p style="text-align:left;">An interesting trend can be noticed recently as the Serbian Tax Administration and Tax Police have raised their level of activity in conducting routine tax inspections in companies across the country. This is not to say that such activities can be labelled as unconventional on its own – seeing as how they present one of the fundamental aspects of the Administration's scope of work – but the ways in which they have been undertaken and their consequences do perhaps give some cause for concern.</p><p style="text-align:left;">More clearly put, routine tax controls increasingly end in criminal investigations against the members of management in controlled companies. Over the last couple of months we have seen a number of directors being questioned by the Tax Police over alleged tax fraud. The inspectors of Tax Administration appear to have developed a practice to forward routine tax cases in which company's opinion over whether tax should be paid or not differs from that of the inspector. In these cases, the Tax Police should investigate whether the case has elements of criminal offence. However, the Police, without conducting any real analysis, simply charges the highest officials of the company (who often have no direct control over the administration of company's taxes) and forwards the case to the Public Prosecutor. The result is that CFO's and CEO's of some of the best companies in Serbia now have the status of a suspect for tax fraud. Our tax team at Karanović & Nikolić, acted as defenders in a number of these cases and witnessed first-hand the absurdity of these investigations. </p><p style="text-align:left;">The consequence of this strange new practice of the Serbian Tax Police have been the raised stress levels among company executives, causing their concern over bringing normal day-to-day decisions in fear that any such decision may expose them to criminal prosecution. Furthermore, these activities began to impede the overall process of doing business, as the newfound confusion has caused companies to start paying the kinds of taxes they otherwise would not have been legally obliged to do, as means of prevention from being prosecuted.</p><p>Finally, the atmosphere that has derived from these happenings has made it harder for us to properly advise our clients – some of which are among the biggest companies in Serbia – as both of their executives' personal concerns and professional integrity have been stirred by these inspections, all without any specific legal grounding to speak off. We hope that this trend will come to an end in the near future, especially having in mind Serbia's position of a genuine investment hot-spot in recent years and the many multinational companies that have found their footing here. Efforts should be made to not jeopardise this process through aggressive and ungrounded criminal investigations.</p>
Sale of Serbian agricultural land to foreigners: What does the agreement with the EU really say? Sale of Serbian agricultural land to foreigners: What does the agreement with the EU really say? | Views | Karanović & Nikolić https://www.karanovic-nikolic.com/knviews/Pages/2016/09/06/Sale-of-Serbian-agricultural-land-to-foreigners-What-does-the-agreement-with-the-EU-really-say.aspxSale of Serbian agricultural land to foreigners: What does the agreement with the EU really say? Sale of Serbian agricultural land to foreigners: What does the agreement with the EU really say? | Views | Karanović & Nikolić string;#06/09/2016<p><span class="ms-rteStyle-Quote">Author: Dragan Gajin, Senior Associate</span></p><p>Ever since <a href="http://ec.europa.eu/enlargement/pdf/serbia/key_document/saa_en.pdf"><span class="ms-rteThemeForeColor-2-0" lang="EN-US" style="text-decoration:underline;"><font style="text-decoration:underline;">Serbia's Stabilisation and Association Agreement with the EU</font></span></a><span class="ms-rteThemeForeColor-2-0"> </span>('SAA') entered into force in September 2013, Serbian media have paid significant attention to the country's obligations concerning the acquisition of agricultural land by foreigners. The fear of one part of the public appears to be that, due to the application of the SAA, large portions of Serbian agricultural land will be sold out to foreigners. </p><p>Here, we will take a look at what obligations precisely Serbia accepted under the SAA and what would happen if Serbia failed to act in accordance with these obligations. </p><h2>Law on Agricultural Land: No Sale of Agricultural Land to Foreigners (sort of)</h2><p>The existing Serbian legislation is explicit: a foreign natural or legal person cannot own agricultural land in Serbia. This is expressly stated in the Law on Agricultural Land (adopted in 2006, last amended in 2015).</p><p>Despite such uncompromising wording, there is an important practical exception to this rule: foreign individuals or companies can own agricultural land indirectly, through locally registered companies. This means that foreign nationals (natural and legal persons alike) can have access to Serbian agricultural land even now, based on local incorporation.</p><h2>What Did Serbia Accept in the SAA?</h2><p>The regime of sale of Serbian agricultural land to EU nationals is governed by Article 63 of the SAA, which pertains not only to agricultural land, but to the acquisition of real estate in general:</p><p><em class="ms-rteStyle-Quote">"3. As from the entry into force of this Agreement, Serbia shall authorise, by making full and expedient use of its existing procedures, the acquisition of real estate in Serbia by nationals of Member States of the European Union. Within four years from the entry into force of this Agreement, Serbia shall progressively adjust its legislation concerning the acquisition of real estate in its territory by nationals of the Member States of the European Union to ensure the same treatment as compared to its own nationals."</em></p><p>Based on this provision, Serbia has two obligations, arising in different moments:</p><table class="ms-rteTable-2" cellspacing="0" style="width:553px;height:145px;"><tbody><tr class="ms-rteTableEvenRow-2"><td class="ms-rteTableEvenCol-2" style="width:50%;height:56px;"><h3>​Obligation</h3></td><td class="ms-rteTableOddCol-2" style="width:50%;height:56px;"><h3>​Moment in time</h3></td></tr><tr class="ms-rteTableOddRow-2"><td class="ms-rteTableEvenCol-2"><p dir="ltr">​Serbia to authorise, by making full and expedient use of its existing procedures, the acquisition of real estate in Serbia by EU nationals</p></td><td class="ms-rteTableOddCol-2"><blockquote dir="ltr" style="margin-right:0px;"><p>​From the entry into force of the SAA (i.e. from 1 September 2013)</p></blockquote></td></tr><tr class="ms-rteTableEvenRow-2"><td class="ms-rteTableEvenCol-2"><p>Serbia to progressively adjust its legislation concerning the acquisition of real estate on its territory by EU nationals to ensure the same treatment as compared to its own nationals</p></td><td class="ms-rteTableOddCol-2"><blockquote dir="ltr" style="margin-right:0px;"><p>​Within four years from the entry into force of the SAA (i.e. until 1 September 2017)</p></blockquote></td></tr></tbody></table><p> </p><p>The first obligation is more general in nature, in that it only obligates Serbia to authorise the acquisition of real estate by EU nationals, without specifying the scope of such authorisation.</p><p>The second obligation is more concrete: Serbia agreed that, by 1 September 2017, it will adjust its legislation so as to enable EU nationals to acquire real estate in Serbia under the same conditions as Serbian nationals. This includes adjusting the legislation governing the sale of agricultural land, which, as noted, currently expressly provides that foreign nationals cannot own such land at all.</p><h2>How Did the Neighbours Do it?</h2><p>Apart from Serbia, other West Balkan countries have also signed stabilisation and association agreements with the EU, some of them already completing the EU accession process (Croatia). For this reason, it is interesting to have a glance at how some of Serbia's neighbors negotiated their respective stabilisation and association agreements related to the regime of acquisition of agricultural land:</p><table class="ms-rteTable-2" cellspacing="0" style="width:94.38%;height:910px;"><tbody><tr class="ms-rteTableEvenRow-2"><td class="ms-rteTableEvenCol-2" style="width:33.33%;"><h3>​Country</h3></td><td class="ms-rteTableOddCol-2" style="width:33.33%;"><h3>​Obligations applicable to agricultural land</h3></td><td class="ms-rteTableEvenCol-2" style="width:33.33%;"><h3>​Deadline</h3></td></tr><tr class="ms-rteTableOddRow-2"><td class="ms-rteTableEvenCol-2" rowspan="2">​ ​ <br><p><a href="http://europa.ba/wp-content/uploads/2008/06/SAA-EU-BiH-eur-lex.europa1.pdf"><span class="ms-rteThemeForeColor-2-0" style="text-decoration:underline;"><font style="text-decoration:underline;">Bosnia and Herzegovina</font></span></a></p></td><td class="ms-rteTableOddCol-2"><p>To authorise, by making full and expedient use of its existing procedures, the acquisition of real estate in the country by EU nationals </p></td><td class="ms-rteTableEvenCol-2"><p>From the entry into force of the country’s SAA</p></td></tr><tr class="ms-rteTableEvenRow-2"><td class="ms-rteTableEvenCol-2"><p>To progressively adjust its legislation concerning the acquisition of real estate on its territory by EU nationals to ensure the same treatment as compared to its own nationals</p></td><td class="ms-rteTableOddCol-2"><p>​Within six years from the entry into force of the country’s SAA</p></td></tr><tr class="ms-rteTableOddRow-2"><td class="ms-rteTableEvenCol-2"><p><span class="ms-rteThemeForeColor-2-0">​</span><a href="http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:22005A0128%2801%29&from=EN"><span class="ms-rteThemeForeColor-2-0" style="text-decoration:underline;">Croatia</span></a></p></td><td class="ms-rteTableOddCol-2"><p>By way of a special annex, the application of the country’s SAA to the regime of the acquisition of agricultural land by EU nationals was expressly excluded</p></td><td class="ms-rteTableEvenCol-2"><p style="text-align:center;">​N/A</p></td></tr><tr class="ms-rteTableEvenRow-2"><td class="ms-rteTableEvenCol-2"><p>​<br><a href="http://ec.europa.eu/enlargement/pdf/the_former_yugoslav_republic_of_macedonia/saa03_01_en.pdf"><span class="ms-rteThemeForeColor-2-0" style="text-decoration:underline;"><font style="text-decoration:underline;">Macedonia</font></span></a></p></td><td class="ms-rteTableOddCol-2"><p>​Not expressly regulated in the country’s SAA</p></td><td class="ms-rteTableEvenCol-2"><p style="text-align:center;">​N/A</p></td></tr><tr class="ms-rteTableOddRow-2"><td class="ms-rteTableEvenCol-2"><p><span class="ms-rteThemeForeColor-2-0">​</span><br class="ms-rteThemeForeColor-2-0"><span class="ms-rteThemeForeColor-2-0"></span><a href="http://register.consilium.europa.eu/doc/srv?l=EN&f=ST%2011566%202007%20INIT"><span class="ms-rteThemeForeColor-2-0" style="text-decoration:underline;"><font style="text-decoration:underline;">Montenegro</font></span></a></p></td><td class="ms-rteTableOddCol-2"><p>​To grant national treatment to EU nationals acquiring real estate on its territory</p></td><td class="ms-rteTableEvenCol-2"><p>​From the entry into force of the country’s SAA</p></td></tr></tbody></table><p> </p><p>The obligations accepted by Serbia are somewhere in between Montenegro's outright giving of the national treatment to EU nationals and Croatia's exclusion of the application of the SAA to the acquisition of agricultural land. Actually, what Serbia negotiated is most similar to the obligations accepted by Bosnia and Herzegovina, the difference being that the deadline available to Bosnia and Herzegovina to adjust its legislation is two years longer than the one at Serbia's disposal.</p><h2>What if Serbia Failed to Adjust its Legislation within the Deadline from the SAA?</h2><p>If until 1 September 2017 Serbia would not afford EU nationals a national treatment concerning the acquisition of agricultural land, it would be in breach of the SAA. This, however, would not mean that following this date EU nationals would be automatically authorized to purchase Serbian land – Serbia's obligation in the SAA concerns an adjustment of its legislation and is not a substantive rule.</p><p>So, what would the consequences of Serbia's breach of the SAA be?</p><p>First of all, Serbia's failure to abide by the SAA would certainly not help its bid to join the EU and the ongoing EU accession process.</p><p>Furthermore, the SAA itself provides for a mechanism of dispute resolution in case a party to the agreement considers that the other party breached its obligations. There are two such mechanisms: the consultation process within the Stabilization and Association Council ('SAC' – a body established under the SAA and consisting of representatives of EU and Serbia) and the dispute settlement (arbitration) procedure regulated by a special protocol to the SAA.</p><p>Serbia's failure to adjust its legislation by the prescribed deadline would be dealt with in the consultation process before the SAC. In order to initiate this procedure, the EU would need to notify Serbia and the SAC that the matter in dispute will be resolved. In this formal request, the EU could also indicate the measures which it may adopt due to the perceived breach.</p><p>On the other hand, Serbia's failure to abide by the more general obligation concerning the regime of acquisition of real estate (to authorise through its existing procedures the acquisition of real estate by EU nationals) would be governed by the arbitration procedure established by the relevant protocol of the SAA. This is a more formal procedure than the consultation process within the SAC. At the end of such arbitration procedure, the arbitration panel issues a ruling on the dispute.</p><p>Finally, each party to the SAA may suspend the agreement if the other party does not comply with an essential element of the agreement. It is not clear whether the part of the SAA governing the regime of acquisition of real estate would qualify as such an essential element.</p><p style="text-align:center;">***</p><p>Even though Serbia's failure to allow EU nationals to acquire Serbian agricultural land on the same terms as Serbian nationals would not have an immediate impact in the Serbian legal system, such non-compliance may be the subject of various procedures under the SAA. Serbia now has almost a year to avoid this and adjust its legislation. In this process, it may look at examples from the EU on how the acquisition of agricultural land can be conditioned, but still be in line with the EU rules – which is an interesting topic in its own right.</p>
Withholding Tax in the EU – New Developments Withholding Tax in the EU – New Developments | Views | Karanović & Nikolić https://www.karanovic-nikolic.com/knviews/Pages/2016/08/25/Withholding-Tax-in-the-EU-–-New-Developments.aspxWithholding Tax in the EU – New Developments Withholding Tax in the EU – New Developments | Views | Karanović & Nikolić string;#25/08/2016<p>An interesting piece of news in the sphere of tax law has recently been provided by the Court of Justice of the European Union (CJEU) decision that found Portuguese withholding tax rules to be breaching EU law.  </p><p>The case concerns a loan given to Auto Estradas do Litoral SA ("Brisal"), a Portuguese company by the Irish bank – KBC Finance Limited. The question before the CJEU was whether, under the EU law, withholding tax can be imposed on the gross amount of interest or must the taxpayer be allowed to decrease taxable income by costs associated with such income.  </p><p>The CJEU found that applying Portuguese withholding tax on the gross amount of interest was discriminating and restricting the freedom in providing services, because resident financial institutions in Portugal were granted the right to deduct business expenses from their taxable income. Furthermore, the CJEU emphasised that Portuguese tax authorities should allow deduction of lender's business expenses which directly relate to interest income, including travel and accommodation, legal, and other costs.</p><p>Putting this development into context of the overall EU business framework, this ruling may have implications for the Union's Member States that impose withholding taxes on interest and other types of income. At the same time, such an aftermath could open the door for EU businesses to question the validity of withholding tax payments historically, which may cause <span lang="EN-GB" style="text-decoration:underline;">a</span> disruption in the economic equality of EU member states.</p>
Too Big to Hide – European Commission Sanctions Truck Cartel Too Big to Hide – European Commission Sanctions Truck Cartel | Views | Karanović & Nikolić https://www.karanovic-nikolic.com/knviews/Pages/2016/07/26/Too-Big-to-Hide-–-European-Commission-Sanctions-Truck-Cartel.aspxToo Big to Hide – European Commission Sanctions Truck Cartel Too Big to Hide – European Commission Sanctions Truck Cartel | Views | Karanović & Nikolić string;#26/07/2016<p>​Global competition law circles have recently been shaken by the European Commission's record-setting fine of EUR 2.93 billion for collusion on the automotive market, imposed against Volvo, Daimler, Iveco and DAF trucks. The sanctions in question varied amongst the accused parties, with Daimler facing the largest penalty in the amount of more than EUR 1 billion on its own. Iveco's fine was set at EUR 494 million, DAF's at EUR 752 million, and Volvo's fine has been set at EUR 670 million. </p><p>The entire case was concluded under the EU settlement programme, which allows for a 10 percent reduction to be granted to parties that acknowledged the conduct which they were accused of, without contesting the findings of the European Commission's investigation. A single manufacturer – Scania – opted not to settle, and a full investigation continues into this company's affairs, while MAN – another company that participated in the collusion – received full immunity for revealing the existence of the cartel, in accordance with the European Commission's leniency programme. A majority of cartel cases in EU practice have been investigated and concluded based on information obtained from whistle-blowers. Leniency is a common incentive for cooperation with antitrust authorities - following their EU counterparts, a majority of jurisdictions in Western Balkans sport similar leniency regimes and have been eager to use them in similar fashion. Predictability, as well as consistent enforcement and fining policy have proven to be key in developing effective leniency regimes and shutting down cartels.  </p><p>In order to provide some background info on the case, it should be noted that the Commission's investigation was originally initiated with dawn raids in 2011, following which the manufacturers received formal cartel charges in 2014. The truck cartel investigation had represented one of the first major acts by Margarethe Vestager as the Competition Commissioner. The investigation determined that the truck producers were colluding for 14 years (1997-2011), sometimes arranging their collaboration on meetings of senior managers at trade fairs or through phone conversations, and later on via truck producers' German subsidiaries, where information was exchanged via e-mails. The European Commission concluded that the companies devised their market behaviour through the following three activities:</p><ol><li>  Coordinating prices at "gross list" levels for medium and heavy trucks in the EEA </li></ol><p>Here the "gross list" price level pertains to the trucks' factory price, as set by each manufacturer. Generally speaking, these gross list prices are the basis for pricing in the trucks industry, and they precede the final price which is decided thanks to further adjustments to these gross list prices on national and local levels. </p><p style="text-align:left;">2.      <strong>The timing for the introduction of new emissions technologies</strong></p><p style="text-align:left;">For the purpose of having medium and heavy trucks comply with the increasingly strict European emissions standards (from Euro III through to the currently applicable Euro VI). </p><p style="text-align:left;"><strong>3.</strong>      <strong>The passing on to customers of the costs for the emissions technologies. </strong></p><p style="text-align:left;">The companies' have agreed that neither would absorb the cost of introducing emission-curbing technologies, but would pass-on the costs to customers. This enabled them to raise their prices without fear that of competitive undercutting. </p><p>In the aftermath of other previously publicised happenings concerning vehicle emission measurement, these latest fines clearly show that environmental standards have been challenging for the automotive industry from a compliance standpoint. However, prohibitions on cartelisation and coordinated market behaviour have long been a staple of European Commission's commercial law. Similar rules are applicable in the Western Balkans, as well.</p><p>While explaining the case, Vestager stressed the fact that MAN, Volvo, Daimler, Iveco and DAF account for 9 out of every 10 (medium and heavy) trucks produced in Europe, and that instead of competing with each other they were part of a cartel, in turn hurting the overall European economy. </p><p>It is clear that the global trends of increasing fines for competition law infringements are not slowing down, with fines in the billions- once considered audacious- becoming less and less of a rarity. In the Western Balkans, practice has differed from jurisdiction to jurisdiction, depending on the experiences, cases and track record of each authority, with some enforcers consistently issuing multi-million euro fines, and others preferring symbolic penalties, settlements without monetary fines or stressing competition advocacy activities. However, since the legal framework has been modelled after the relevant EU rules and practice, the national enforcers, both in member states and in accession countries, are taking their cues from the European Commission. Therefore, both increased reliance on the leniency mechanism and a stricter fining policy for would-be cartelists can be expected to become a consistent sight everywhere in the region.</p><p> </p>
Serbia Gets A Grip On Non Performing Loans Serbia Gets A Grip On Non Performing Loans | Views | Karanović & Nikolić https://www.karanovic-nikolic.com/knviews/Pages/2016/07/19/Serbia-Gets-A-Grip-On-Non-Performing-Loans.aspxSerbia Gets A Grip On Non Performing Loans Serbia Gets A Grip On Non Performing Loans | Views | Karanović & Nikolić string;#18/07/2016<p style="font:12.25px/20px "times new roman", georgia, serif;margin:0px;padding:0px 0px 20px;border:0px currentcolor;color:#444444;text-transform:none;text-indent:0px;letter-spacing:normal;word-spacing:0px;vertical-align:baseline;white-space:normal;widows:1;font-size-adjust:none;font-stretch:inherit;background-color:#ffffff;">On 11 July 2016, The National Bank of Serbia adopted amendments to three by-laws of the Law on Banks (Risk Management Decision, Decision on the Classification of Bank Balance Sheet Assets and Off-balance Sheet Items and the Decision on Reporting Requirements for Banks), and in doing so, took a significant step towards effectuating the implementation of the strategies on resolving non-performing loans and the action plan rendered by the Government of the Republic of Serbia and the National Bank of Serbia in cooperation with the IMF, World Bank and EBRD – adopted at the end of last year. Furthermore, the amendments are also intended to improve the regulatory framework for the treatment of restructured receivables, in order to provide sustainable incentives in practice and to prevent unsustainable refinancing, as well as in the area of banks' obligations on reporting the structure of restructured receivables and reporting on banks' non-performing loans. These amendments entered into force on 15 July 2016, whereas amendments to the Risk Management Decision shall be applicable as of 15 July 2016, and the application of the amendments to the Decision on the Classification of Bank Balance Sheet Assets and Off-balance Sheet Items and the Decision on Reporting Requirements for Banks is postponed until 1 October 2016.</p><p style="font:12.25px/20px "times new roman", georgia, serif;margin:0px;padding:0px 0px 20px;border:0px currentcolor;text-align:justify;color:#444444;text-transform:none;text-indent:0px;letter-spacing:normal;word-spacing:0px;vertical-align:baseline;white-space:normal;widows:1;font-size-adjust:none;font-stretch:inherit;background-color:#ffffff;">The key amendments of the Risk Management Decision can be separated into three main parts: (i) amendments allowing for the assignment of the bank's undue receivables towards legal entities, entrepreneurs and agriculturalists to other legal entities in order to decrease banks' distressed assets; (ii) amendments related to banks' distressed assets management; and (iii) amendments related to the valuation of the quality of security instruments.</p><p style="font:12.25px/20px "times new roman", georgia, serif;margin:0px;padding:0px 0px 20px;border:0px currentcolor;text-align:justify;color:#444444;text-transform:none;text-indent:0px;letter-spacing:normal;word-spacing:0px;vertical-align:baseline;white-space:normal;widows:1;font-size-adjust:none;font-stretch:inherit;background-color:#ffffff;">The first part, related to the assignment of the bank's undue receivables to other legal entities in essence allows for, among other things, the assignment of receivables towards entities undergoing pre-package reorganisation plan implementation.</p><p style="font:12.25px/20px "times new roman", georgia, serif;margin:0px;padding:0px 0px 20px;border:0px currentcolor;text-align:justify;color:#444444;text-transform:none;text-indent:0px;letter-spacing:normal;word-spacing:0px;vertical-align:baseline;white-space:normal;widows:1;font-size-adjust:none;font-stretch:inherit;background-color:#ffffff;">The second part, related to bank's distressed assets management includes the regulation of the regulatory procedures and strategies in the banks for monitoring distressed assets, as well as organisational-structural measures which a bank should undertake in order to provide adequate distressed assets management.</p><p style="font:12.25px/20px "times new roman", georgia, serif;margin:0px;padding:0px 0px 20px;border:0px currentcolor;text-align:justify;color:#444444;text-transform:none;text-indent:0px;letter-spacing:normal;word-spacing:0px;vertical-align:baseline;white-space:normal;widows:1;font-size-adjust:none;font-stretch:inherit;background-color:#ffffff;">The third part, related to the valuation of the quality of security instruments, provides precise regulation of the security instruments whose value will be subject to the valuation and addresses the duties and obligations of a licensed valuator through manuals for the valuation and the producing of a valuation report, as well as factors and analyses which may impact the security instruments value.</p><p style="font:12.25px/20px "times new roman", georgia, serif;margin:0px;padding:0px 0px 20px;border:0px currentcolor;color:#444444;text-transform:none;text-indent:0px;letter-spacing:normal;word-spacing:0px;vertical-align:baseline;white-space:normal;widows:1;font-size-adjust:none;font-stretch:inherit;background-color:#ffffff;">The latest amendments to the above outlined by-laws represent a signal that the market of non-performing loans may be developing, although the results still remain to be seen and tested in practice.</p>
New Renewables Incentive Scheme (At Last) New Renewables Incentive Scheme (At Last) | Views | Karanović & Nikolić https://www.karanovic-nikolic.com/knviews/Pages/2016/07/13/New-Renewables-Incentive-Scheme-(At-Last).aspxNew Renewables Incentive Scheme (At Last) New Renewables Incentive Scheme (At Last) | Views | Karanović & Nikolić string;#13/07/2016<p>With more than 6-months of delay, the Government of the Republic of Serbia finally adopted the following package of decrees setting out the new incentive scheme for green energy:</p><ul><li>Decree on the Power Purchase Agreement, ("<strong>PPA Decree</strong>");</li><li>Decree on incentive measures for the production of electric energy from renewable energy sources and from high-efficiency cogeneration of electric energy and thermal energy ("<strong>FIT Decree</strong>"); and </li><li>Decree on the requirements and procedure of acquiring the status of a privileged power producer, preliminary privileged power producer and producer from renewable energy sources ("<strong>Status Decree</strong>").</li></ul><p>By adopting these decrees, the Government tried to remove the PPA related obstacles for further implementation of green projects under the previous scheme. The specific focus was on improving bankability issues of the scheme. The adoption itself was preceded by a long public debate, with all important stakeholders in the sector taking part in attempts to improve the scheme. </p><p>The decrees were adopted on 13 June 2016. They are all published in the Official Gazette of the Republic of Serbia no.56/2016 from 15 June 2016 and came ito effect on 16 June 2016.</p><h3>1.      PPA Decree </h3><p>The PPA Decree established the PPA model which will be concluded between the green producers and the guaranteed off-taker.</p><p>The PPA is concluded for an incentive period of 12 years and is valid from the day of the first reading of the metering equipment- after the day of acquiring the status of the privileged generator – and until the expiry of the incentive period for the Power Plant. The term of the PPA may be prolonged in the event of unplanned occurrence and action of force majeure during the incentive period, which the parties of the PPA may acknowledge by annex, before determining the new date of expiry of the incentive period.</p><h3><span lang="EN-GB">Improvements</span></h3><p>The Decree also brought out a significant change and removed the concept of "Preliminary PPA" from the Serbian legal system, prescribing instead a more common concept known as "Single PPA". The concept of "Single PPA" stipulates that the holder of the preliminary privileged power producer status ("<strong>4P Status</strong>") may enter into PPA, and after fulfilling a number of statutory conditions, it may continue unto the agreement as a holder of the privileged power producer status ("<strong>3P Status</strong>").</p><p>It should be noted that the PPA also prescribes several advanced mechanisms (the real reach is yet to be tested in practice) in the Serbian energy sector regarding force majeure clauses, one of which being the 'political force majeure' and other being  "change-in-regulations". </p><p>Political force majeure prescribes that if any competent authority fails to issue, upkeep, amend or prolong any public authorisation without the fault of the generator or the off-taker, the agreement shall remain in force, but its legal effects shall be suspended for the period of duration of the force majeure event.</p><p>The second mechanism is the change-in-regulations clause that stipulates how the generator may submit a proposal to amend the incentive measures if new regulation is coming into effect after the conclusion, or on the date of the conclusion of the PPA, and has a consequence that represents an increase in costs of the operations for the generator-in order to put the generator in the same financial position it was in under the PPA.</p><p>In the occurrence of any disputes, the Agreement foresees two options; a domestic Serbian Court, or an arbitrage in Wien (VIAC) or Paris (ICC), in accordance with the rules of respective arbitrage courts.</p><p>The PPA also prescribes that the generator is now entitled to terminate the PPA if the off-taker is in delay of settling any due payments, with previous notice for payment. </p><p>The PPA Decree further stipulates a Step-In Agreement as a supplement to the PPA, between the lenders or lenders' agent, the generator and the off-taker, but this is only possible for those projects exceeding 30MW in power. With the Step-In Agreement, the Lenders may name a completely different entity as a generator, if the previous generator defaults on one of his obligations or loses the status of privileged generator. For any disputes arising from this agreement, an option between a domestic Serbian Court and an arbitrage in Wien (VIAC) or in Paris (ICC) is also stipulated.</p><h3><span lang="EN-GB">Shortfalls</span></h3><p>The only major downside of the PPA is that the off-taker may provide only promissory notes as collateral for the fulfilment of the obligations under the PPA. Promissory notes are only effective if the debtor has the relevant level of funds secured by the promissory notes in its accounts. However, given the possibility to alter the PPA with previous approval by the Ministry in charge of energy, the generator may request a more certain way to secure the obligations of the off-taker, i.e. through a bank guarantee.</p><p>This fact, coupled with the possibility to change the off-taker every five years without the producers or the lenders having any say in it, is expected to be the most significant challenge for the further realisation of these projects.</p><h3>2.      FIT Decree</h3><p>The FIT Decree stipulates in detail the incentives for the production of electric energy from renewable energy sources and high-efficiency cogeneration of electric energy and thermal energy.</p><p>On one side, the FIT Decree introduces some of the previously mentioned clauses, specifically, force majeure, change-in-regulations and political force majeure, but on the other side, the FIT Decree also thoroughly regulates the amount of feed-in-tariffs ("<strong>FIT</strong>") through introducing a calculation method and the capping of the purchase price. Furthermore, and perhaps even more importantly, the FIT Decree has introduced a maximum annual effective operation time for all types of generation facilities.</p><p>If during the incentive period a generator produces an excess of maximum produced electricity previously calculated via FIT Decrees' calculating method, the amount that has surpassed the  maximum of produced electricity will be purchased at the price equalling 35% of the FIT. Up to the beginning of the incentive period (i.e. the commissioning period) the same, 'special' FIT is stipulated, with the difference that the preliminary privileged producer is entitled to the incentive price in the amount of 50% of the respective FIT. Considering the fact that in this sector of industry there are a lot of large scale multi-phase projects, regulating the commissioning of the project in this way certainly gives flexible security to all possible generators.</p><p>The FIT Decree also considers the currency of the incentive purchase price, manner of payment for incentive purchase and the adjustment of the incentive purchase price for the inflation, as well as the conditions and mode for the exercise of entitlement to incentive measures.</p><h3>3.      Status Decree</h3><p>The Status Decree prescribes in more detail the requirements and the procedure for the acquisition, duration and termination of the status of a privileged power producer, preliminary privileged power producer, and a power producer from renewable energy sources.</p><p>Furthermore, the Status Decree now regulates a more comprehensive and somewhat improved set of requirements for acquiring the status of a privileged producer, including the alignment with the laws on construction.</p><p>The new advanced financial security instruments for acquiring the status of a preliminary privileged power producer are also introduced, stipulating in more detail the manner of establishing securities (i.e. via monetary deposit, or a "first call" bank guarantee) including paragraphs regarding the prolongation of the guarantee and the conditions for the activation and return of the financial security instrument.</p><p>It's worth mentioning that the Status Decree is also prescribing the traditional force majeure cases as well as 'political force majeure'. The possibility to prolong the 3P Status is also introduced in a way that if any unforeseeable or unavoidable event that is beyond the power of 3P occurs, the term of 3P Status is prolonged for the period that is necessary to remedy the effects of these unforeseeable circumstances.</p><p>Moreover, the Status Decree also stipulates- similarly to previously applicable rules- the statutory caps, i.e. the overall maximum capacity specifically applicable to wind power facilities and solar plants. In addition, the administrative procedures regulating the acquisition and alterations of the 3P Status and 4P Status, the status of a renewable energy producer, as well as a request for the prolongation of the 4P Status are thoroughly stipulated. </p><p>It is worth mentioning that much needed comprehensive transitional provisions addressing the 4P and 3P Statuses have been obtained under the previously applicable regulations and are also included -a fact certainly of most importance for the existing generators.</p><p style="text-align:center;">***</p><p>The PPA Package certainly represents a step forward for green energy in Serbia, but it is yet to be seen whether this is enough for the green energy market in Serbia to bloom.</p><p>Karanović & Nikolić plans to organise a panel on the effects of the new scheme in autumn, at which time we believe the market will be in a better position to assess the reach of the new scheme.</p>
Aligning our Interests – Regional Mobility in the Context of Tourism Aligning our Interests – Regional Mobility in the Context of Tourism | Views | Karanović & Nikolić https://www.karanovic-nikolic.com/knviews/Pages/2016/06/21/Aligning-our-Interests-–-Regional-Mobility-in-the-Context-of-Tourism.aspxAligning our Interests – Regional Mobility in the Context of Tourism Aligning our Interests – Regional Mobility in the Context of Tourism | Views | Karanović & Nikolić string;#21/06/2016<p style="text-align:left;">At the recently held <a href="http://summit100.org/"><span lang="EN-GB" style="text-decoration:underline;">Summit 100</span></a> Business Forum in Sarajevo, many topics of contemporary relevance for the region of Southeast Europe were expectedly touched upon. Be it the supply of sustainable energy, the position of women in business, or the issues related to infrastructure & transport conditions, it was an opportunity for a number of prominent experts and government officials to weigh in with their opinions on how to improve the overall business situation in our region. However, one of the greatest impressions from the conference have been the discussions on the mobility of goods and people within our region, as well as the respective implications. Having in mind the beginning of summer being just a few days away, perhaps the most illustrative example in this regard can be the tourism industry and the ways in which it has been – or potentially can be – affected by such regulatory frameworks of SEE countries. </p><p style="text-align:left;">If we were to take a macro perspective on the issue, there are many specific aspects of the tourism industry that should be outlined. A front-running one, in this sense, being the fact that it is currently the world's fastest growing industry, thus showing its undisputed potential on a global scale. Moreover, taking into account tourism's inherent multi-disciplinary qualities – the fact that it currently offers every 11<sup>th</sup> job opening in the world – as well as the way in which it contributes to other spheres of a country or region's economy through transportation, hospitality, and even national branding, the said potential only proves itself to be further grounded in the tangible factors of contemporary life. </p><p>However, if we were to look into the state of affairs in our region in this regard, one must pause and question the seemingly shallow depth of involvement with this matter. Even though Slovenia and Croatia have managed to capitalise on their natural resources and had their tourism industry thrive in a national context, such activities haven't been conducted on a regional level. The question here is why, considering the wide-reaching potentials that organised and regulated cooperation could bring to everyone involved. Looking at numbers, Croatia and Montenegro lead the way in terms of offering seasonal employment to people in the region, but rather through convenience than through intentional regulation. The issue of regulation in this regard can further be illustrated by the fact that in Macedonia – another country with significant tourism potentials – the employment regulations make no distinction between candidates from neighbouring and remote countries. Furthermore, another factor that should be taken into consideration when advocating for a regional based offer of tourism services is the aspect of seasonality. Despite each of the countries being undoubtedly rich with natural resources, none of them – barring Slovenia to a certain extent – have such a complete offer that can span across a calendar year through a fusion of beaches and seaside, as well as spas, mountain resorts and skiing. A region-wide effort to complement each other is something worth exploring further, en route to reaching a unique region wide non-seasonal tourism offer , giving each country a chance to participate with their own offer for the sake of greater benefit, while at the same time allowing for seemingly needed labour migrations.</p>