Unfair trading practices in Serbia: a new legal framework inspired by EU law

• The Draft Law sets a minimum turnover threshold of EUR 2m for determining a buyer's significant bargaining power, with the threshold increasing in line with the supplier's financial strength. The Directive also establishes turnover-based categories of operators according to which protection is awarded.
• Unlike the Directive, the Draft Law extends beyond agricultural and food products to also cover household chemicals, paper and kitchen goods, personal hygiene and cosmetics, diapers, as well as food and plant protection products and soil cultivators (with the list still to be finalised by a bylaw).
• The Draft Law introduces a "blacklist" of absolutely prohibited practices, including late payment and order cancellations for perishable products, unilateral contract amendments, transfer of risk to the supplier for damage or loss occurring on the buyer's premises, and refusal of written confirmation of agreed terms required by supplier.
• There is also a "grey list" of conditionally prohibited practices, such as charges for the return of goods, storage, advertising or promotions carried out by the buyer. These practices are permitted only if they are clearly, unambiguously and agreed in advance in writing. These lists are not identical to, but are clearly based on, the prohibited unfair trading practices set out in the Directive.
• According to the Directive, Member States should designate enforcement authorities to ensure effective enforcement. Under the Draft Law, the Commission for Protection of Competition is the designated authority in charge of enforcing the law and is granted broad powers in line with the Directive.
• Fines may reach up to 0.1 % of the total annual revenue generated in Serbia, with procedural fines of approx. EUR 500 for each day of non-compliance with the Commission's order.
• In addition, whistleblowers who submit evidence of unfair practices are entitled to an award of 10 % of the amount of the imposed measure for protection against unfair trading practices.

Public debate has just closed. The business community is awaiting the new Draft Law, as a large number of comments have been received. It is expected that the Draft Law will be submitted to the European Commission for its opinion. 

We will continue to monitor further amendments and write about them in the upcoming period. 

authors: Srdjana Petronijevic, Zoran Soljaga and Marija Vranic.