Legislation Update: Serbia

New Amendments to the Law on Prevention of Corruption

The Law on Prevention of Corruption (the “Law”), the key piece of Serbian anti-corruption legislation that started to apply in September 2020, recently received a short set of amendments.

Most of the amendments are primarily aimed at correcting the flaws noticed so far in the wording of certain important provisions, and will therefore not largely affect the overall anti-corruption system, but some of them could prove to reach deeper and wider in activities and persons subject to the Law.

It is now explicitly regulated that “corruption” is directed at achieving illegitimate goals only, which was somehow omitted in the initial text. In addition, public officials are now generally prevented from parallelly performing other work which requires full-time employment or continuous engagement, as opposed to the previous wording which prevented any other work if the public office itself required full-time employment or continuous engagement.

A key amendment was introduced to the existing system of informing the Serbian Anti-corruption Agency about relevant undertakings involving public officials. Namely, the previous text of the Law obliged legal entities in which a public official (or his family member) owned more than 20% of shares to inform the agency about participation in a public procurement, privatization or other procedure in which a contract was to be concluded with a public authority or any legal entity with more than 20% of shares in public ownership. The above 20% threshold has now been removed, meaning that any legal entity with a public official in its ownership structure must inform the agency of a procedure leading to the conclusion of a contract with any legal entity with even the slightest public ownership.

For the purpose of ensuring a more transparent notification system, the amendments also introduced a new Records on Legal Entities, which is supposed to serve as a comprehensive public registry of all such legal entities having a public official as their shareholder.

Public officials will now also have to include additional information into their Property and Income Report, such as on cash, digital property and valuables they own, as well as other movable property with value exceeding EUR 5,000, which should provide additional hints on how the term of their office may have interplayed with their balance sheet.

Finally, in order to tackle the well-established court practice of imposing only trivial fines (if any) for breaches, the minimal penalties for non-compliance with the Law have been doubled and now amount to RSD 1 million (approx. EUR 8,500) for legal entities and RSD 100,000 (approx. EUR 850) for public officials.

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