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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>Mirko Kovač, Senior Associate<br><a href="mailto:mirko.kovac@karanovic-nikolic.com">mirko.kovac@karanovic-nikolic.com</a></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>
From Old Ties to New Relationships – Turkey and the SEE Region From Old Ties to New Relationships – Turkey and the SEE Region | Views | Karanović & Nikolić https://www.karanovic-nikolic.com/knviews/Pages/2016/06/07/From-Old-Ties-to-New-Relationships-–-Turkey-and-the-SEE-Region.aspxFrom Old Ties to New Relationships – Turkey and the SEE Region From Old Ties to New Relationships – Turkey and the SEE Region | Views | Karanović & Nikolić string;#07/06/2016<p>​Various media outlets have recently been reporting on the economic relationship between Turkey and the Balkan countries, as well as the growing interest of Turkish companies to do business in this region through acquiring or cooperating with local companies – many of which are state-owned and in the process of being put up for sale by their respective governments. If we look closer into specific examples, the numbers are supportive of this positive trend, i.e. in Serbia, three years ago only 25 Turkish companies were present in the country's market, with that number rising up to 90 in 2016. </p><p>Furthermore, at a recent meeting in the Serbian Chamber of Commerce, the activity between Serbia and Turkey in the banking sector, or more precisely, the acquisition of Čačanska Bank by the Turkish Halk Bank – a transaction that <a href="/knnews/Pages/2015/03/27/Karanović--Nikolić-Advises-on-Sale-of-Čačanska-Banka-to-Turkish-HalkBank.aspx"><span lang="EN-GB" style="text-decoration:underline;">Karanović & Nikolić</span><span lang="EN-GB" style="text-decoration:underline;">  </span><span lang="EN-GB" style="text-decoration:underline;">advised</span><span lang="EN-GB" style="text-decoration:underline;"> </span><span lang="EN-GB" style="text-decoration:underline;">on</span></a>, was emphasised as a particularly positive signal for potential future investors. </p><p>The above meeting was attended by the Association of Young Businessmen from Ankara (ANGIAD), a group that encompasses around 1000 companies from Turkey, some of which have shown interest for investing in Serbia and cooperating with local companies across a diverse range of industries including building materials, wood processing, tourism, healthcare, coffee processing, and others. ANGIAD representatives were then introduced to the improving business climate in Serbia, through a presentation that included the local investment conditions and the ongoing reform process in the Serbian economy. Some features of doing business in Serbia that are considered of special relevance to Turkish investors have been highlighted, especially those related to the possibility of navigating across third markets due to Serbia's free trade agreements with a wide range of countries including – but not limited to – Russia, Belarus, Kazakhstan, EU, and CEFTA & EFTA member countries. Veljko Jovanović, Advisor to the President of the Serbian Chamber of Commerce, remarked that Turkey is one of his country's already most important trade partners and announced the Chamber's openness to all Turkish companies interested to do business with Serbia. </p><p>Another – more significant example of activity on this front – was seen last month at the third Croatian-Turkish Business Forum, held in Zagreb, which featured a number of prominent attendees, including the Presidents of the two countries. A positive attitude towards future commercial relations between Croatia and Turkey was showcased throughout the event, with many encouraging statements coming from President Erdogan himself, who proclaimed hope for the bilateral trade figures to rise up to 1 EUR billion over the next five years, so as to equate the state of the economic relationship between the two countries with the already highly positive state of political affairs. It should be noted that, when compared to those benefits previously mentioned in the case of Serbia and Turkey, the potential for such cooperation between the Croatian and Turkish economies has a somewhat different set of perks, mainly since Croatia, as an EU member, can make it significantly easier for Turkish products to reach the European Single Market. Turkey however, is in the position to offer equally valuable benefits to all its business partners, with a fast growing economy and a strong backbone of investors, as well as through functioning as a trade bridge to the Black Sea and the countries of the Middle East. Finally, a good example of potential large-scale cooperation can be found in the recent rumours surrounding the potential <a href="/knnews/Pages/2016/05/27/Turkish-Airlines-Considers-Acquisition-of-Croatia’s-National-Carrier.aspx"><span lang="EN-GB" style="text-decoration:underline;">Turkish Airlines' acquisition of Croatia Airlines</span></a>. </p><p>Most of the above  developments give us an encouraging perspective on how countries from our region can shape their commercial relations with Turkey, and in doing so, build on the cultural heritage that's hundreds of years old, en route to a future in which new history – at least in a business sense – waits to be written. We will watch this space with interest.</p>
A Relationship like No Other – IP & Pharmaceuticals A Relationship like No Other – IP & Pharmaceuticals | Views | Karanović & Nikolić https://www.karanovic-nikolic.com/knviews/Pages/2016/05/16/A-Relationship-like-No-Other-–-IP--Pharmaceuticals.aspxA Relationship like No Other – IP & Pharmaceuticals A Relationship like No Other – IP & Pharmaceuticals | Views | Karanović & Nikolić string;#16/05/2016<p style="text-align:left;">As the overall level of convergence between industries in the business world keeps increasing, it is only logical for the related legal aspects to follow suit every step of the way. Nonetheless, even though this is becoming something of a regular occurrence nowadays, there are particular legal practice areas that have been tied to their industry counterparts for quite a long time now, and perhaps none so much as the relationship between the pharmaceutical industry and intellectual property (IP) rights. </p><p style="text-align:left;">Often called the "pharmaceutical company's most valuable resource", IP protection is of vital importance to the functioning of such companies for a variety of reasons, many of which – contrary to popular belief – are not deriving from selfish profit-making intentions. In order to understand these reasons, one should take into consideration the highly challenging business model under which pharmaceutical companies operate. More precisely, if we were to look at the process of medicine development, official data shows that out of 5 000 – 10 000 experimental compounds (which are often researched and developed for close to 10 years while costing in the range of EUR 1-2 billion), only 1 ends up as approved by the governing body. Moreover, having in mind that only 2 out of every 10 medicines produced can recoup the costs of development, it becomes clear how important it is for pharmaceutical companies to capitalise on the few successes they find. This is where it comes down to IP protections to make this possible, since through the process of registering patents they provide resources for research and development, encouraging further innovation as a consequence. Therefore, it may be fair to assume that creating, obtaining, protecting, and managing IP should become a corporate activity similar to the way resources and funds have been raised, so that – among other things – conditions are created for the continued evolution of knowledge.</p><p style="text-align:left;">However, seeing as how pharmaceuticals present a constituting element of globalisation – they are equally essential everywhere to everyone – it comes as no surprise that a number of accompanying issues arise concerning IP protection in a broader context. A premier example in this regard being the discrepancy between the major economies of the world and the developing, emerging countries and markets. Whereas in the first and second world countries it is possible for companies to enforce their IP rights through regulations and agreements with relevant entities, emerging markets (especially those large scale ones such as China and India) – have networks of countless local manufacturers who produce cheap counterfeit versions of patented drugs – some of which even find their way back into the western countries. This has put multinational pharmaceutical companies in a rather difficult position, as they now need to account for the balance between aiming for innovation and progress by invoking their IP rights on one hand, and formulating a way to provide affordable drugs for the developing world on the other. </p><p>Finally, an illustrative, recent example in this regard, can be found in <a href="http://www.gsk.com/"><span lang="EN-GB" style="text-decoration:underline;">GlaxoSmithKline</span></a>'s (GSK) decision to not invoke their IP rights on medicines in low-income countries and thus widen access to its products by allowing generic manufacturers to produce low-cost copies of GSK drugs with no risk of legal challenge. Such an approach on behalf of GSK should, however, be put in perspective by calling upon the <a href="https://www.wto.org/english/news_e/news15_e/trip_06nov15_e.htm"><span lang="EN-GB" style="text-decoration:underline;">recent Decision</span></a> brought forth by the <a href="https://www.wto.org/"><span lang="EN-GB" style="text-decoration:underline;">World Trade Organisation</span></a> (WTO) that has extended the drug patent exemption for all of the least-developed-countries (LDC) of the WTO until 2033. Considering the fact that many countries from the LDC group are the same countries in which GSK has decided to rescind their IP rights, it becomes clear that their decision is somewhat less revolutionary than it might seem at first, albeit still valid in terms of what the accompanying publicity might accomplish for the treatment of the entire issue going forward.</p>
Feeling Energised – Supporting Sustainable Energy in the Region Feeling Energised – Supporting Sustainable Energy in the Region | Views | Karanović & Nikolić https://www.karanovic-nikolic.com/knviews/Pages/2016/04/25/Feeling-Energised-–-Supporting-Sustainable-Energy-in-the-Region.aspxFeeling Energised – Supporting Sustainable Energy in the Region Feeling Energised – Supporting Sustainable Energy in the Region | Views | Karanović & Nikolić string;#25/04/2016<p>​It is slowly starting to feel like distant history when civilisation's efforts to satisfy the most fundamental need for energy were focused mainly on utilising non-renewable sources. Fossil fuels, natural gas, oil, and coal have been the backbone of the industrial age's rapid development, effectively helping bring on the contemporary era of existence we are witnesses of. However, due to the many risks involved with exploiting such resources (the least of which being their limited quantities), society has been making a significant push over the past few decades to raise the global level of ecological awareness and refocus our attention onto those energy sources which have been present on our planet since the dawn of time, tasking international and national authorities to come up with the best possible solutions on how to fully rely on such sources. Our region has not been much different in this regard (except for perhaps being a bit more sluggish at first than our Western European counterparts), and has recently introduced a variety of reforms and regulations that are intended to drive this initiative into a fully-formed realisation in the near future.</p><p style="text-align:left;">To start off, one of the cornerstones of all large-scale projects related to renewable energy – especially in those countries of our region with poorer initial infrastructure of such kind – is the much needed government support. The need for this support is perhaps best reflected in how it can encourage investors to join-in on/start their own projects in the field, but also in how essentially helpful it is for the countries' processes aimed at achieving the binding targets for renewable energy outputs set by supervising governing bodies. In the case of our region, these binding targets have been set by the Energy Community (EC), and they currently present the percent of share that renewable energy production takes in the gross final energy production by year 2020. In terms of encompassing countries, these targets have been set the following way: Bosnia, 40%; Montenegro, 33%; Serbia, 27%; Slovenia, 25%; and Croatia, 20%. </p><p style="text-align:left;">The government support is then usually presented in the form of support schemes that work by awarding long-term power purchase contracts to the producers of renewable energy using regulated <em>feed-in tariffs</em> (set electricity prices offered in the form of long-term contracts to renewable energy producers) or <em>feed-in premiums</em> (renewable energy producers receiving premiums from the government on top of the market price obtained in the process of selling). Nonetheless, support can also be offered in the form of preferential terms for the leasing of a particular piece of land, through giving out bonuses that are designated for improving or overhauling the production facilities, as well as through certain country specific methods such as VAT exemptions on construction works (i.e. in Montenegro). </p><p style="text-align:left;">Further examples in this regard include Slovenia where, among other things, the Republic of Slovenia's environmental fund (Eko Fund) is awarding low-interest loans to renewable energy projects through tendering, and where feed-in tariffs are made available to renewable energy plants with capacities that are not exceeding 1 MW. Bosnia & Herzegovina presents something of a special case since its incentives are not within the competency of the Central Government, but within the competencies of its constituting entities – Republic of Srpska (RS) and the Federation of Bosnia & Herzegovina (FBiH) – with examples that include prioritised grid connections for renewable energy operators, and tariffs that are granted for a period of 15 years (RS) and 12 years (FBiH). In Macedonia, those producers that enjoy a privileged status in renewable energy production are exempt from balancing obligations, while in Serbia, the Power Purchasing Agreement (PPA) is in the pipeline with notable involvement of the IFI's and other similar stakeholders. As far as Croatia is concerned, the latest development has been the replacement of the feed-in tariff model with a feed-in premium model, effective from January 2016.  </p><p style="text-align:left;">A number of similar topics have been dealt with during the recently held <a href="https://www.energy-community.org/portal/page/portal/ENC_HOME/CALENDAR/Law_Forum/15_Apr">Energy Community Conference in Vienna</a>, which was attended by Karanović & Nikolić's Senior Partner, <a href="/_layouts/15/FIXUPREDIRECT.ASPX?WebId=de941175-f8d4-4a41-8207-c9aec3e1e3b2&TermSetId=9c3dd502-4f62-4d66-9ef2-684258a8f9ed&TermId=6d2342c7-c9ab-4ee4-94c3-28d1baa6437a">Miloš Vučković</a> – who also had the privilege of speaking on a panel on the aforementioned subject of regional state aids, and Senior Associate, <a href="/_layouts/15/FIXUPREDIRECT.ASPX?WebId=de941175-f8d4-4a41-8207-c9aec3e1e3b2&TermSetId=9c3dd502-4f62-4d66-9ef2-684258a8f9ed&TermId=f6c4e26a-dc45-4c1e-9b1d-54ff0409e168">Petar Mitrović</a>. Among these topics, another question – albeit of a more general nature – was raised with regard to the size of incentives given and how they pertain to the kind of technology used for the production of renewable energy across Europe. Speaking more precisely, there were discussions on whether governing institutions should be subsidising all technologies used in equal measure, or according to technology-specific criteria. The side advocating equal representation of incentives has been pointing this out as a necessary measure of ensuring fair competition by allowing for no privileged positions. On the other hand, the side supporting the notion that incentives should be weighed against the costs of technologies employed, has been claiming that such measures will help prevent those producers with cheaper technologies from overcompensating with their production of renewable energy. </p><p>As of this point, a consensus on this, as well as on a number of many other matters including the regulation of the North European Gas Pipeline, or on the debate on whether bio mass solutions present a mostly untapped resource compared to – currently much more utilised – wind farms (something that is perhaps most relevant to forest-heavy regions such as our own), has not yet been reached. Despite this, it is evident that a tide of activity in terms of strengthening and further widening the presence of renewable energy solutions across the European landscape is continuing – if not gaining further ground – while we hope to soon be on the receiving end of answers to all of the previously mentioned questions.</p>
Slovenia Amends its Insolvency Act Slovenia Amends its Insolvency Act | Views | Karanović & Nikolić https://www.karanovic-nikolic.com/knviews/Pages/2016/04/25/Slovenia-Amends-its-Insolvency-Act.aspxSlovenia Amends its Insolvency Act Slovenia Amends its Insolvency Act | Views | Karanović & Nikolić string;#25/04/2016<p>​Slovenia has amended the Financial Operations, Insolvency Proceedings and Compulsory Dissolution Act (ZFPPIPP or the Insolvency Act) again, following amendments in 2013, amending preventive restructuring, simplified compulsory settlement and personal bankruptcy proceedings. Amendments to the Insolvency Act, which were adopted by the National Assembly on 31 March 2016, will come into force on 26 April 2016.</p><p>The main modifications introduced by the amendments are as follows:</p><ul><li>small companies may now rely on proceedings on preventive restructuring, in addition to medium-sized and large companies as was previously permitted;</li><li>a decision approving financial restructuring must now be published during preventive proceedings, eliminating delays in delivering a decision to individual creditors and shortening the period between conclusion of the agreement and its entry into force;</li><li>simplified compulsory settlement can only be conducted in case of micro companies and entrepreneurs;</li><li>extensive amendments to personal bankruptcy proceedings, all which aim to prevent bankruptcy debtors from defrauding creditors and misusing bankruptcy proceedings. Most importantly, the amendments introduce an extension of the period for challenging legal acts concluded by the bankruptcy debtor in favour of a closely related person from three to five years. Rights of creditors to challenge several other legal acts have been introduced, as have new rules limiting the dismissal of a bankrupt person's liabilities.</li></ul><p>In less than eight years from its introduction, the Insolvency Act has undergone its seventh extensive amendment in order to achieve greater efficiency in manners of dealing with over-indebtedness of natural and legal persons, while introducing measures to prevent the misuse of personal bankruptcy proceedings and the dismissal of a bankrupt individual's liabilities, both of which are common in Slovenia.</p>
Moving with the Times – The Impact of Technology on the Business of Law Moving with the Times – The Impact of Technology on the Business of Law | Views | Karanović & Nikolić https://www.karanovic-nikolic.com/knviews/Pages/2016/04/11/Moving-with-the-Times-–-The-Impact-of-Technology-on-the-Business-of-Law.aspxMoving with the Times – The Impact of Technology on the Business of Law Moving with the Times – The Impact of Technology on the Business of Law | Views | Karanović & Nikolić string;#11/04/2016<p>​The world is moving at a break neck pace, and a crucial element at the root of these changes are technological developments. As the global business landscape has been irrevocably altered by these developments, it was only a matter of time before each comprising industry would have had to adapt and – to a certain degree – reinvent itself as a consequence. Even though, admittedly, a little notorious for their traditionalist approach and the old-fashioned nature of their work, legal professionals had no choice but to join in on utilising technology, along the way discovering a plenitude of otherwise impossible benefits that are now available to them. </p><p>It was no secret during last year (as evidenced by a number of <a href="http://www.lawtechnologytoday.org/2015/02/modernize-law-firms-2015/"><span lang="EN-GB" style="text-decoration:underline;">surveys and interviews with industry professionals</span></a>) that the biggest focus for most of the law firms across the world rested on either improving and expanding on their existing websites, or completely revamping them in order to meet the evolving needs of both clients and business partners. Karanović & Nikolić was one of the practices that recognised these needs by launching a new fully responsive website, designed to meet the latest global trends in terms of being optimised for smartphones and tablets (taking into consideration that they account for 60% of total online traffic nowadays), while at the same time offer enough space and options for the kind of content placed. Speaking of content placement on websites, it has to present one of the most significant advantages gained through employing technology as it gives law firms a chance to use their expertise to discuss topics from particular practice areas, as well as provide the most relevant news updates that are currently in the spotlight and that prospective clients might be interested in hearing about. In addition, law firms are able to promote their employees since they are the authors of these texts, and in doing so help establish their own expert authority, thus giving the website a genuinely important marketing role within the framework of a legal practice. </p><p>Concurrently, it is hard to emphasise the importance of having a modern and responsive website, without proclaiming the significance of having proper representation on social networks as well. Apart from offering additional valuable options for disseminating the aforementioned content, social networks also give law firms an opportunity for a more personal and interactive presence through communicating their in-house events and activities. Likewise, by having a chance to present themselves in a more personal manner and thus offer something of a "sneak-peek" into the inner workings of the firm, there is also significant HR potential to be found. Younger generations, many of whom are students and an incoming wave of legal professionals, are likely to turn to such a less formal source when asking questions and obtaining information. Besides, if we were to speak in more general terms, the "digital shadow" or the digital presence of a law firm is already significantly bigger than a physical presence. Nowadays we can even go insofar as to say that ignoring the existence of a digital presence is equally or more dangerous than ignoring reality itself. The recent hacking case of a single law firm – Mossack Fonseca in Panama – shows how big and significant of an impact a law firm's digital presence may have on global political and business security.  </p><p>On the other hand, this was made possible by the internal benefits that law firms can also reap from technology, namely, the possibility to digitise documents and utilise online libraries or different kinds of cloud services when accessing information, instead of relying on the old ways of endlessly stacking books on top of statutes on top of case files and taking up immense space along the way. Moreover, digital databases are also significantly easier to search through and arrange, and as such, have become a necessity for any contemporary law firm. Needless to say, high levels of cutting edge security have to be in place first for any such technological feature.</p><p>Finally, it is somewhat inherent to the topic of technology that a certain level of potential controversy accompanies it, from exposure to hacking attacks and overall data protection issues, to some of the more <a href="http://www.lawsociety.org.uk/news/speeches/lawyers-replaced-by-robots-artificial-intelligence-replace-judgment/"><span lang="EN-GB" style="text-decoration:underline;">recent speculations</span></a> revolving around the development of Artificial Intelligence systems capable of making connections and interpretations from information in order to make independent decisions and predictions, thus becoming so-called lawyer substitutes. However, it is important to make a distinction between what the future (and technology) might bring, and what the present day offers us. In this sense, the abundance of benefits attained from utilising technology in the legal industry is quite evident, and it only goes to show the complacency of those law firms that to do not recognise and capitalise on them.</p>
Paving the Way to EU Membership: Combatting Corruption Paving the Way to EU Membership: Combatting Corruption | Views | Karanović & Nikolić https://www.karanovic-nikolic.com/knviews/Pages/2016/04/Paving-the-Way-to-EU-Membership-Combatting-Corruption.aspxPaving the Way to EU Membership: Combatting Corruption Paving the Way to EU Membership: Combatting Corruption | Views | Karanović & Nikolić string;#05/04/2016<p><em>This blog post, written by </em><a href="/_layouts/15/FIXUPREDIRECT.ASPX?WebId=de941175-f8d4-4a41-8207-c9aec3e1e3b2&TermSetId=9c3dd502-4f62-4d66-9ef2-684258a8f9ed&TermId=2c0a4f3d-0cad-492f-b67a-6277d9471f9e"><span lang="EN-GB" style="text-decoration:underline;"><em>Milica Filipović</em></span></a><em>, was published by </em><a href="http://www.traceinternational.org/blog/745"><span lang="EN-GB" style="text-decoration:underline;"><em>Compliance Champion Spotlight</em></span></a><em>, a forum for individuals and organisations committed to fostering and raising standard in anti-bribery compliance. </em></p><p>Serbia, as a European state on the path to European Union ("EU") accession, must fulfill a series of conditions and obligations before being granted EU membership. The fight against corruption is one of the most significant challenges faced by Serbia and other countries of the Western Balkans in this regard.</p><p>Corruption is a complex social, economic and philosophical phenomenon that slows economic development, contributes to governmental instability and undermines democratic institutions. Combatting corruption is extremely important for Serbia, not only because of the country's commitments towards the EU, but in order to uphold the rule of law and create an economically vibrant society that is attractive to domestic and foreign investments.</p><p>Serbia ranks 71st out of 167 states in Transparency International's <a href="https://www.transparency.org/research/cpi/cpi_1998/0/"><span lang="EN-GB" style="text-decoration:underline;">Corruption Perception Index</span></a> in 2015 and 67th out of 197 states in TRACE International's <a href="http://www.traceinternational.org/trace-matrix/"><span lang="EN-GB" style="text-decoration:underline;">TRACE Matrix</span></a>. These rankings place Serbia among countries with widespread corruption, manifested in the following forms: non-transparent privatizations, rigged public tenders, fraud, bribery and other forms of abuse of power. The aforementioned results lead to the conclusion that previous anti-corruption activities and measures have not been effective in changing the culture of corruption that exists in the country.</p><p>However, it is important to emphasize that Serbia has achieved significant progress in the past 12 years, especially in the legislative area.  But despite all the progress, there is still much work to be done. Serbia continues to lack laws that govern lobbying or influencing government officials during decision making processes. Additionally, existing laws, such as the <a href="http://www.osce.org/serbia/35100"><span lang="EN-GB" style="text-decoration:underline;">Law on Anticorruption Agency</span></a>, <a href="http://www.osce.org/serbia/80544"><span lang="EN-GB" style="text-decoration:underline;">Law on Financing of Political Activities</span></a>, and <a href="http://www.legislationline.org/documents/section/criminal-codes/country/5"><span lang="EN-GB" style="text-decoration:underline;">Criminal Code</span></a>, are in sore need of improvement.  To move further along the path to EU accession, Serbia must address these issues.</p>
Macedonia Enacts New Amendments Macedonia Enacts New Amendments | Views | Karanović & Nikolić https://www.karanovic-nikolic.com/knviews/Pages/2016/04/Macedonia-Enacts-New-Amendments.aspxMacedonia Enacts New Amendments Macedonia Enacts New Amendments | Views | Karanović & Nikolić string;#01/04/2016<h2>Amendments to the Law on Technological Industrial Development Zones</h2><p>Another set of amendments to the Law on Technological Industrial Development Zones ("<strong>Law</strong>") was recently enacted by the Assembly of the Republic of Macedonia. The amendments address the specific activities which are allowed or prohibited under the Law in the area of information and communication technology. All activities that are allowed to be conducted within these zones are now exhaustively listed in the recently-amended Law. </p><p>Carrying out activities in the area of information and communication technology is conditioned with two pre-conditions i.e. (i) such activity cannot be transferred from other locations in Macedonia and (ii) the TIDZ user must hire at least 30 employees. The amendments also provide the possibility for designing separate land lots within the zones specifically for performing activities in the area of information and communication technology.</p><p>Further regulation of the entry-exit of goods within a zone is also subject to the latest amendments. Currently, the entry-exit of transport vehicles and goods is regulated with the customs laws and is subject to supervision by the Customs Administration. According to the amendments, in addition to this, TIDZ users will be obliged to record every entry-exit of transport vehicles and goods in accordance with the Law. The new responsibilities for the TIDZ users will be applicable after the adoption of a new Rulebook by the Ministry of Finance.</p><h2>Amendments to the Law on the Securing of Claims</h2><p>The latest amendments to the Law on the Securing of Claims ("<strong>Law</strong>") which will be applicable starting from 1 September 2016, provide improved legal framework for the process of securing claims and the registration of such securitisation in the public records. More specifically, the lawmakers used the opportunity to further specify the text of the Law with respect to the distinction between securitisation by transfer of movable or immovable assets. New provisions are added for regulating the procedure for establishing securitisation by transfer of ownership over movable assets. The same procedure will apply for securing claims by sale of moveable assets with retention of the ownership right. </p><p>Regarding the institutional framework, creditors will be able to exercise their rights from securitisation by transfer of ownership only through the enforcement agents. The public notaries will only be in charge of their regular responsibilities (i.e. notarisation of the agreements/preparation of notarial deeds). Another novelty will be the two new registries which will be established by the Central Registry of the Republic of Macedonia i.e. (i) Registry for securitisation by transfer of ownership over objects and transfer of rights; and (ii) Registry for the sale of movable assets with the retention of ownership rights. </p><p>The establishment of the new Registries and the parties' obligation to register the secured claims at those Registries will provide better legal protection and certainty for both creditors and debtors. The Law stipulates a deadline of five days for registration, starting from the:</p><ul><li>notarisation of the securitisation agreement or the preparation of the notarial deed;</li><li>amendments to the securitisation agreement; or</li><li>termination of the securitisation agreement.</li></ul><h2>Amendments to the Law on Minerals</h2><p>Pursuant to the recent amendments to the Law on Minerals ("<strong>Law</strong>"), the mineral exploitation concession is automatically terminated from the moment when a bankruptcy or liquidation proceeding has been initiated over the concessioner. Until now, the Law did not stipulate the exact moment of termination of the exploitation concession in case of bankruptcy or liquidation, which technically entitled the concessionaire to use the exploitation concession during the course of the bankruptcy/liquidation proceeding.</p><p>At the request of the Public Revenue Office ("<strong>PRO</strong>"), the lawmakers removed the obligation of the concessionaires to submit data regarding the loaded minerals to a PRO's information system. Even though this responsibility for the concessionaires was introduced in 2014, it seems that the Ministry of Economy established that there are no suitable conditions to introduce such a system.</p><p>The provisions also foresee the legalisation of undertaken boreholes for thermo-mineral water on the land which is the property of, or under lease to the applicant, for the concession of exploitation of thermo-mineral water. The rest of the amendments are used to further regulate certain aspects of the procedures (e.g. requirements, competences, etc.) for the awarding of exploitation or exploration concessions.</p>
Slovenia Reforms Public Procurement System Slovenia Reforms Public Procurement System | Views | Karanović & Nikolić https://www.karanovic-nikolic.com/knviews/Pages/2016/03/31/Slovenia-Reforms-Public-Procurement-System.aspxSlovenia Reforms Public Procurement System Slovenia Reforms Public Procurement System | Views | Karanović & Nikolić string;#31/03/2016<p>The new Slovenian Public Procurement Act, the ZJN-3 ("Procurement Act"), enters into force on 1 April 2016. After a long period of dual regulation of the general and utility areas of public procurement, the new Procurement Act unifies both areas in a single act, thus invalidating the existing Public Procurement Act - ZJN-2, and the Act Regulating Public Procurement in Water, Energy, Transport and Postal Services - ZJNVETPS. All public procurement procedures which commenced before 1 April 2016 will be concluded in accordance with the previously valid acts.  </p><h2><span lang="EN-GB">Enhancing Transparency and Simplifying Procedures</span></h2><p>The main reason behind the adoption of the new Procurement Act is the implementation of Directive 2014/24/EU and Directive 2014/25/EU which are reforming the public procurement system at a European level. With the new directives and their implementation in national legal systems, legislators are pursuing greater transparency, limitation of corruption, promotion of innovative solutions and participation of small and medium enterprises, as well as promotion of green public procurements. The ambit of the European legislator was mainly to achieve greater flexibility of the procedures and to simplify complex procedures, as well as to open national markets to foreign enterprises. One of the best possibilities for achieving this is the gradual introduction of electronic public procurement.</p><p>The Slovenian legislator has commenced the reform systematically and has executed a thorough analysis of the public procurement market in Slovenia. The most important implications, which also facilitate comparison between different EU member states, are that a) the average duration of the most commonly used procurement procedure - i.e. open procedure - is 202,8 days, b) the most common reason for the unsuccessful completion of a procedure, which happens in 78,76% of  cases, is the incomplete tender submission, and c) that the contractual value of all awarded contracts, without VAT, was almost EUR three billion. In comparison to previous years an uptrend of volume in procurement value has been noticed. </p><h2><span lang="EN-GB">New Legislative Solutions</span></h2><p>The most important new legislative solutions offer a simplified procedure for the contracting authorities due to several new procedures that are now available, improving the thresholds for small value procurements and shortening the deadlines for the submission of tenders. Simplifications were also sought for tenderers. From now on, tenderers will be able to use a single European form for establishing grounds for exclusion, i.e. ESPD. The maximum yearly turnover which may be requested by the contracting authority is also limited, which will probably enhance competition in the relevant markets.</p><p>On the other hand, the Procurement Act provides for several new grounds for exclusion with special emphasis on social procurements via social clauses, and gives absolute priority to certain tenderers in reserved contracting cases. To facilitate transparency, the publication of some recording contracts - those contracts that are below the threshold for public procurement - is now mandatory. Contract award decisions will also be published. </p><p>The new Procurement Act further invokes the most economically advantageous tender criterion, which is based on lifetime costs and price. However, this does not mean (except in some cases) that the criteria cannot solely take into account the lowest price, but it does put a priority emphasis on the relationship between price and quality. Another important change is in relation to mandatory direct payments to subcontractors, as well as additionally flexible regulation of utilities, which relate water, energy, transport and the postal sector. </p><h2><span lang="EN-GB">Fundamental Concepts and Principles</span></h2><p>The new Procurement Act departs from the existing definition of an 'incomplete tender', and rather defines an 'admissible tender'. An admissible tender eliminates grounds for exclusion, fulfils all relevant conditions, and is technically appropriate and timely. It is also absent of proven cartel agreements and corruption and offers prices that are not abnormally low or exceeding the guaranteed funds. It is evident that emphasis has been put on the prohibition of anticompetitive practices, which will be determined in a specific procedure before the Slovenian Competition Protection Agency, if the contracting authority has any suspicions. </p><p>The new Procurement Act also abandons the concept of a formally incomplete tender, which in practice enabled wide supplementing of a submitted tender. The only remaining concept will be the allowed supplementing and changing of the tenders, which is under contracting authority's control, since the contracting authority itself may request a supplement, correction, change or clarification of the tender. The definition of issues which may be supplemented and/or changed is narrower than it was in the previous act. </p><p>Even though the fundamental principles remain practically the same, the new Procurement Act did widen the social clause which provides that the tenderers have to fulfil all applicable obligations in respect to environmental, social and employment law. In practical implementation this means that the wider clause will be an essential element of each contract, meaning that rescission of contract will be possible only upon a breach of the clause. Non-compliance with the social clause also presents grounds for exclusion. Furthermore, tenderers will have to provide evidence of regular payment of tax obligations and social contributions with the relevant national tax forms. </p><h2><span lang="EN-GB">Thresholds for Public Procurements</span></h2><p>The new Procurement Act shall be applied to those procurements where the estimated value, without VAT, is equal or higher than the following values:</p><ul><li>20.000 EUR for public supply and service contracts (50.000 EUR for utility);</li><li>40.000 EUR for construction contracts (100.000 EUR for utility);</li><li>750.000 EUR for social and other specific services contracts (1.000.000 EUR for utility).</li></ul><p>Public contracts that exceed the above-mentioned thresholds, will necessitate the publication of a contract notice on the national public procurement portal. If the contract value exceeds European thresholds, which are relatively higher than national ones, publication in the Supplement of the Official Journal of the EU is also mandatory. </p><p>For public contracts where the estimated value is lower than the respective threshold (i.e. recording contracts), the only obligation of the contracting authority is to observe the principles of economy, efficiency, effectiveness and transparency. In cases where the recording contract value exceeds EUR 10,000 without VAT, the contracting authority is also obliged to publish a list of all such contracts concluded in the previous year. </p><p>The new Procurement Act also defines several exceptions where the Procurement Act will not be used. In general, the exceptions relate to urgent contracts, specific legal and financial services, in-house contracts and public-public relationships, in accordance with ECJ case law. </p><h2><span lang="EN-GB">New Old Procedures</span></h2><p>The most commonly used procedure in practice, i.e. the open procedure, has not been significantly changed. The most relevant change mainly applies to shorter minimum deadlines for the submission of tenders, which is now 35 days, except in exceptional circumstances where the deadline may be shortened to 15 days. </p><p>Even though the restricted procedure is - in terms of terminology - a new procedure, it is basically the same as the previously existing procedure with a prior establishment of competence. The Procurement Act provides for several other procedures such as competitive dialogue, competitive procedure with negotiations, negotiated procedure with prior publication of a contract notice, negotiated procedure without prior publication of a contract notice and a new procedure for small value contracts.</p><h2><span lang="EN-GB">Changes in the Execution of the Procedure</span></h2><p>The new Procurement Act eases the preparatory stage of the public procurement procedure by enabling prior cooperation with candidates or tenderers. In such cases the contracting authority has to take certain steps in order to prevent anticompetitive practices. </p><p>In the decision stage of the procedure, an important new change is that when a decision is published on the national web portal for public procurement, it is deemed served to all tenderers. In practice this means that service for all tenderers will be unified, which will impact the deadlines for the filing a review claim. In addition, the Procurement Act does not provide for requests for additional explanations anymore, meaning that deadline extension for filing a review claim on this basis will no longer be possible. </p><p>The tender review process, where other tenderers review competing tenders after the decision had been made, has been vitally changed by the introduction of greater restrictions to the potential detriment of tenderers. The review of other tenders is still possible, however, two different situations have to be distinguished. When the contracting authority performed a full check of all tenders regarding their admissibility, then the review of other tenders may be granted only to those who submitted an admissible tender. However, if the contracting authority decides to perform a full check of only the most economically advantageous tenders, then it is obliged to enable review to all tenderers who request it. The request for review has to be submitted within three working days (in procedures for small value contracts – within two working days) and the contracting authority has to facilitate the review within three working days (or two working days for small value contracts) following the receipt of the request. </p><h2><span lang="EN-GB">New Regime for Subcontractors</span></h2><p>If the tenderer intends to perform the task with subcontractors, each subcontractor and the parts they will undertake must be included in the tender. The tenderer will also have to include their contact information and legal representatives, completed ESPD forms of subcontractors, as well as the subcontractors' request for direct payments. An important improvement is that the tenderer is required to undergo the same procedure if the subcontractor is changed during contract execution. </p><p>In accordance with the new regime, there is no automatic mandatory direct payment to subcontractors. Such obligation will only exist if the subcontractor requests direct payment. If direct payment is not mandatory in a specific case, then the contracting authority will have to request that the tenderer submits a subcontractor's statement of payment receipt. Such statement must be provided within 60 days from payment of the final invoice, otherwise the tenderer will be liable for a misdemeanour. </p><p>If the contracting authority establishes, during the tender check process, that grounds for exclusion exist with a subcontractor, then the contracting authority must request from the tenderer that it submits an official change in subcontractors. </p><h2><span lang="EN-GB">Additional Exclusion and Selection Criteria</span></h2><p>The majority of exclusion and selection criteria has remained the same, however, the new Procurement Act applies different terminology to the processes and also distinguishes between mandatory and optional exclusion and selection criteria, meaning that the contracting authority may opt to consider optional criteria regardless of their inclusion in the tender documentation. Many grounds for exclusion are not necessary with regards to utility area. </p><p>Grounds for exclusion are as follows: </p><ul><li>criminal record,</li><li>nonfulfillment of tax conditions,</li><li>negative references record,</li><li>being twice fined for a misdemeanour related to the payment of work,</li><li>failing to comply with obligations relating to social clause,</li><li>insolvency proceedings,</li><li>serious professional misconduct,</li><li>an agreement restricting competition,</li><li>conflict of interest,</li><li>involvement in prior stages of the procedure (in some cases),</li><li>shortcomings in the execution of other public contracts,</li><li>providing serious misleading information, or </li><li>attempting to unduly influence the contracting authority. </li></ul><p>Even if certain conditions are relatively strict, the Procurement Act provides for a corrective mechanism where the tenderer has an option to provide evidence that it has taken sufficient measures to ensure its reliability. </p><h2><span lang="EN-GB">Outlook</span></h2><p>It will be shown in practice whether the legislature has achieved the desired simplifications of the procedure, however, it is questionable whether this extensive reform will benefit tenderers. Changes regarding some crucial concepts and some legal vacuums which will have to be solved by the National Review Commission imply that it will not. However, it should be noted that a reform regarding legal protection in public procurement procedures is expected in late autumn 2016. In addition to this reform, both tenderers and contracting authorities will have to pay considerable attention to the fact that the legislator expects to fully introduce the system of electronic procurement by April 2017. </p>
Beyond the Horizon – Telecom Industry in the Eyes of Private Equity Beyond the Horizon – Telecom Industry in the Eyes of Private Equity | Views | Karanović & Nikolić https://www.karanovic-nikolic.com/knviews/Pages/2016/03/28/Beyond-the-Horizon-–-Telecom-Industry-in-the-Eyes-of-Private-Equity.aspxBeyond the Horizon – Telecom Industry in the Eyes of Private Equity Beyond the Horizon – Telecom Industry in the Eyes of Private Equity | Views | Karanović & Nikolić string;#28/03/2016<p style="text-align:left;">Over the previous couple of years, the region of South-Eastern Europe, or more specifically, the Western Balkans, has enjoyed a globally acknowledged position of an investment hot-spot. This comes as no surprise if we take into account how the socialist past of encompassing countries has provided their contemporary incarnations with a number of state-owned companies in core industries, all of which now present viable targets for Private Equity funds and M&A activities in general. Perhaps a front-running case in this regard (although far from being the only one) has been the case of Telekom Srbija, the telecommunications giant that went through a second unsuccessful attempt at becoming privatised four months ago. The case of Telekom Srbija, due to its size and wide extent of implications for the rest of the region, also presents a fitting base for the discussion on the overall state of the telecommunications industry in this part of Europe, and the ways in which it corresponds with unquestioned investors' interest. For similar reasons and against a similar background, the unsuccessful privatisation attempt for Telekom Slovenia echoes on the same pattern.</p><p style="text-align:left;">Considering the region's political past, a good starting point for an analysis can be the state of the regulatory framework. Many of the related issues in Serbia have been resolved, with the current regulations being significantly improved upon compared to those from 10 or 20 years ago, but with unequivocal room for further improvement in terms of how fast they have been introduced. Furthermore, it should be pointed out that the additional liberalisation of the rules would significantly increase the M&A allure of the market, all the while positively impacting the incumbent competition.      </p><p style="text-align:left;">Likewise, the development level of the IT Infrastructure in Serbia and its ensuing effect on the companies' allure to investors is another area worthy of being outlined in this sense. More precisely, if we were to look at Telekom's historical inability to spearhead market trends (Telekom being the 10<sup>th</sup> operator to introduce Internet, 2<sup>nd</sup> to introduce mobile, etc.), in it we can perhaps see a potential turn-around point going forward. Having in mind Telekom Srbija's robust (in a national context) infrastructure, there is aptitude to be found behind certain IT updates such as banking services, retail services, music services, etc., all of which Telekom could try to tap into in order to, on the one hand, reach its goal of maintaining and improving on its market presence, while on the other, attract Private Equity and M&A interested parties in a newfound manner. A manner that would be based on better returns on investments (compared to the current ones), considering the tendency of Private Equity parties to give priority to ROI figures rather than to the company's strategic models. From here, the importance of <em>being increasingly creative </em>when it comes to the IT content offered can only be further emphasised – not just in the case of Telekom Srbija – but in general terms for an inherently creative industry like the one Telco is. A specific point of focus in this regard also being the companies' ability to capitalise on the biggest changes in Telco trends i.e. going from voice to data as main revenue streams.</p><p style="text-align:left;">A sure-fire example of such a creative approach that paid off can be found in the related <a href="/knnews/Pages/2014/05/15/Karanovic--Nikolic-Advises-Mid-Europa-Partners-on-the-Sale-of-its-Stake-in-SBB-to-KKR.aspx"><span style="text-decoration:underline;">KKR acquisition of SBB in 2014</span></a> – a deal in which Karanović & Nikolić advised the sellers, <a href="http://www.mideuropa.com/"><span style="text-decoration:underline;">Mid Europa Partners</span></a>. It was the interest created by SBB through their offering of innovative broadcasting techniques and desired content (most notably its sports and entertainment content and the now emerging news content, etc.) that attracted the attention of a major fund such as KKR, resulting in a successful deal. Moreover, it should be stressed that the success of this large-scale acquisition resonated in the context of investors' interest during the last Telekom Srbija tender where there were six interested parties, as opposed to the prior one in 2011 that attracted two interested parties. </p><p style="text-align:left;">Unfortunately, even though a number of experts – including those highly versed in M&A and Private Equity related practices at the recently held <a href="http://www.eelevents.co.uk/see-telecom-2015/"><span style="text-decoration:underline;">EEL's "12</span><span style="text-decoration:underline;"><sup>th</sup></span><span style="text-decoration:underline;"> South-East Europe Telecoms Conference</span></a> – acknowledged that the successful privatisation of Telekom Srbija would have been another 'landmark' deal for the regional market, with the ability to launch an entire wave of M&A activity (especially considering the presence of other covetable Telco options in Bosnia), it did not come to fruition, leaving behind a lot of room for such activity, but not that clear of a plan when it comes to exploiting it. This can perhaps also be derived from a speech that Aleksandar Vučić, the Serbian Prime Minister, gave at the recently held <a href="http://www.ses.org.rs/eng/"><span style="text-decoration:underline;">Kopaonik Business Forum</span></a>, where he stated doubts on whether <a href="https://www.mts.rs/"><span style="text-decoration:underline;">Telekom Srbija</span></a> should have, in fact, been sold to the highest bidder four months ago. </p><p>If we were to draw certain conclusions on the topic, some of the more evident points of focus going forward in raising further interest of Private Equity parties for the Telco industry in the region seem to be the following: 1) Privatising Telekom Srbija for the purpose of further market liberalisation and consequential regulatory framework improvements; 2) Putting stronger emphasis on the development of IT infrastructure and user-relevant content services; 3) Make use of the existing room for growth in Serbia and Bosnia through M&A and consolidating endeavours; 4) Making active efforts to increase companies' ROI's. </p>