Serbia: State Aid Update
The new Serbian Act on State Aid Control became effective, with implementation starting January 1, 2020.
This legislation substantially restructures the existing framework with two primary objectives: (i) bringing the legal structure into alignment with European Union standards, and (ii) conforming state aid procedures to Serbia’s recently implemented General Administrative Procedure Act. The intent is to clarify ambiguities in how the state aid system operates practically, potentially facilitating Serbia’s EU accession efforts and enabling progress on Negotiation Chapter 8 regarding competition policy.
Implications
Serbian businesses have historically given minimal consideration to state aid regulations. The new act addresses this gap by establishing an independent state aid commission separate from governmental control, enabling creation of a more effective enforcement system.
Organizations engaging with state bodies must now thoroughly examine contractual arrangements for: (i) potential state aid elements; and (ii) if identified, their alignment with updated state aid standards. Non-compliance carries substantial consequences—the state aid commission may compel the grantor to recover incompatible aid from recipients within a 10-year window following the grant date.
Key Novelties
The new legislation largely reflects relevant European Union standards and introduces several significant changes:
- A detailed definition of state aid, including exemptions and de minimis provisions
- Codification of “Altmark criteria” addressing compensation for general economic interest services and introduction of the “private investor” assessment
- Restructured state aid commission positioned for operational independence
- Comprehensive proceedings regulations before the commission
- Enhanced transparency measures