THE LAW ON DONATIONS AND HUMANITARIAN AID ("Official Gazette of the Federal Republic of Yugoslavia", Nos. 53/2001, 61/2001 - Correction and 36/2002 and "Official Herald of the Republic of Serbia", No.101/2005 - other law)

Article 1

Government agencies, local self-government units, public enterprises, public institutions, other non-profit organisations and associations, as well as domestic and foreign humanitarian organisations (hereinafter: recipient of donation and aid) may receive donations and humanitarian aid.

A political party may not be a recipient of donation and aid.

Article 2

In terms of this Law, donations and humanitarian aid may, except tobacco and tobacco products, alcoholic beverages and passenger vehicles, include services, money, securities, property and other rights.

Article 3

Importing of goods and services on theground of donation and humanitarian aid, as well as importing of goods and services purchased with funds obtained as donation and humanitarian aid, and from funds realised through sale of securities and through use of ceded rights, shall be free.

Article 4

Goods, for the purpose of this Law, may be imported if meeting the requirements prescribed for putting into circulation, and/or for use on the local market, whilst services in accordance with domestic regulations and international treaties.

Goods under mandatory health, veterinary, ecological or phytosanitary inspection or quality control, may be imported only after meeting the prescribed requirements.

Goods may not be imported if circulation and use thereof are prohibited in the country of export or country of origin.

Goods for the purpose of this Law may not be imported if import of such goods was prohibited by a decision of the Federal Government in order to prevent threat to human life and health and environmental strain.

Article 5

The recipient of donation and aid shall be exempt from customs duty, other importation fees and duties that are payable when importing goods which are, for the purpose of this Law, a subject of donation and humanitarian aid.

False representation of facts with the aim of acquiring the privileges specified in para. 1 of this Article shall not be allowed.

Article 6

In order to make use of the privileges specified in Article 5 of this Law, the recipient of donation and humanitarian aid shall submit to the customs office a request for exemption together with:

1) a statement by the donor, and/or, the giver of humanitarian aid indicating that the goods are being sent free of charge, and/or some other proof of payment of goods from funds collected on basis of donation and aid, or from funds realised through sale of securities and on basis of use of ceded rights;

2) a statement that the goods shall be used for humanitarian, scientific, educational, cultural, sports, religious and arts purposes, promoting of living conditions of the citizens and health care, environmental protection etc;

3) registration certificate, or other proof of engagement in an activity specified in para 2 of this Article.

Government agencies and agencies of local self-government units shall not be required to submit the registration certificate or proof specified in para. 1 of this Article.

The customs office shall render a decision in respect of the submitted request.

Article 7

A recipient of donation and aid may not without prior payment of customs duty, within a period of three years from the date of import sell or use goods exempted from payment of customs duty, other import fees and duties payable at import of goods that are, for the purpose of this Law, a subject of donation and humanitarian aid, for any other purpose other than the purpose for which the donation or aid has been given.

If it determines that the goods specified in para. 1 of this Article have been sold, handed over for use or used for any purpose other than the purpose for which they were exempted from customs duty, other import duties and fees, the customs office shall immediately, and at latest within two years from the date limitations for those goods have expired, issue a decision for payment of customs duty, other import duties and fees.

The Federal Customs Authority shall keep files of goods that are a subject of donation and humanitarian aid for the purpose of this Law.

Article 8

Donations and humanitarian aid, for the purpose of this Law, in the form of foreign currency shall be kept on the recipient's foreign currency account with an authorised bank and shall be used by the recipient for payment of imports pursuant to the agreement on donation, and/or, the agreement on granting humanitarian aid.

An enterprise, other legal entity or entrepreneur that have sold the goods, and/or, have performed services, shall through an authorised bank sell to the National Bank of Yugoslavia the foreign currency realised through the sale of goods and performance of services in-country for foreign humanitarian organisations and donors from abroad.

The obligation specified in para. 2 of this Article shall also refer to an enterprise or other legal entity that for and on behalf of, or only on behalf of a foreign humanitarian organisation or donor from abroad, acts as intermediary in purchasing and sale of goods, and/or rendering services.

An authorised bank shall deposit the foreign currency funds pursuant to paras 2 and 3 of this Article on a separate foreign exchange account.

An authorised bank shall sell on the following day the foreign currency deposited on the account specified in para 4 of this Article to the National Bank of Yugoslavia.

The National Bank of Yugoslavia shall, not later than two business days following receipt of notice on payment of foreign currency in favour of the National Bank of Yugoslavia's foreign currency account, and/or receipt of foreign exchange, remit the dinar equivalent to the authorised bank.

The dinar equivalent received from the National bank of Yugoslavia shall be remitted on the following day from collection of payment by the authorised bank in favour of the enterprise, other legal entity or entrepreneur.

Article 9

Importation of goods that are a subject of donation and humanitarian aid shall be exempt from excise and sales tax in accordance with provisions of the federal Law governing the basic principles of the taxation system.

PENALTY PROVISIONS

1. Economic Infractions

Article 10

A domestic or foreign legal entity shall be fined from 90,000 to 450,000 dinars for an economic infraction:

1) if it concludes an agreement on importing of goods that are a subject of donation, and/or, humanitarian aid, which do not meet the conditions for putting into circulation or use on the local market, and/or, concludes an agreement on importing of services that are a subject of donation or humanitarian aid, and which are not in conformity with domestic regulations and international conventions, as well as a contract on importing of goods whose circulation and use are prohibited in the country of export or country of origin, and/or goods whose importation is prohibited pursuant to the Federal Government regulation (Article 4);

2) if it does not keep the foreign currency received on the basis of donation and humanitarian aid on its foreign currency account with an authorised bank or does not use such foreign currency in accordance with the agreement on donation, and/or an agreement on providing humanitarian aid (Article 8 para. 1);

3) if it does not sell the foreign currency realised through sale of goods and providing of services in-country to foreign humanitarian organisations and donors from abroad through an authorised bank to the National Bank of Yugoslavia (Article 8, paras. 2 and 3);

4) if the sold foreign currency realised by enterprises, other legal entities and entrepreneurs through sale of goods and providing of in-country services to foreign humanitarian organisations, is not sold to the National Bank of Yugoslavia the following day after being deposited on the special foreign currency account, or if the received dinar equivalent for the sold foreign currency is not remitted to these entities the following day after collection of payment (Article 8, paras. 4 and 6).

The officer in charge in a domestic or foreign legal entity shall, for the acts specified in para. 1 of this Article, be fined from 6,000 to 30,000 dinars for an economic violation.

The officer in charge in a government agency or agency of local self-government unit shall, for the acts specified in para. 1 of this Article, be fined from 6,000 to 30,000 dinars for an economic violation.

2. Violations

Article 11*

A domestic or foreign legal entity shall be fined with one- to tenfold amount of denied customs duty, and/or one to sixfold amount of the value of goods for a violation, if:

1) by false representation of facts obtains or attempts to obtain exemption from payment customs duty, other importation fees and duties payable for import of goods that are a subject of donation or humanitarian aid (Article 5 para. 2);

2) before expiry of the prescribed time-limit, without prior payment of customs duties, sells goods exempted from customs duty, other importation fees and duties payable at import of goods that are a subject of donation and humanitarian aid, and/or uses such goods for purposes other than those for which the donation, and/or aid has been given (Article 7 para. 1).

The officer in charge in a domestic or foreign legal entity shall be fined from 3,000 to 30,000 dinars for an offence for the acts specified in para. 1 of this Article.

The responsible officer in a government agency or agency of a local self-government unit shall be fined for a violation from 3,000 to 30,000 dinars for the acts specified in para. 1 of this Article.

Article 12*

A domestic or foreign legal entity shall be fined 50,000 to 500,000 dinars for a violation if within two years of release of goods from customs supervision it fails to give the necessary explanations to the customs authority, or fails to provide access to working premises and areas during working hours, or fails to facilitate inspection of goods, business books, documents and other recorded data in respect of donations and humanitarian aid that are a subject of regulation by this Law.

The officer in charge in a domestic or foreign legal entity shall be fined from 3,000 to 30,000 dinars for a violation for the acts specified in para. 1 of this Article.

The officer in charge in a government agency or agency of local self-government unit shall be fined for a violation from 3,000 to 30,000 dinars for the acts specified in para. 1 of this Article.

Article 13

This Law shall come into effect on the eighth day after its publishing in the "Official Gazette of the FRY".