LAWON CONCESSIONS("Official Herald of the RS", No. 55/2003) |
I BASIC PROVISIONS
Subject-Matter of Law
Article 1
The present Law regulates requirements, manner and procedure of granting a concession for the utilization of natural resources, of the good in common use designated by law as the property of the Republic of Serbia, and for the performing of activities of general interest; the subject of concession; time-limit of concession; concession contract; concession fee; materialization of concession rights and duties; founding and operation of concession enterprise, and other matters relevant for the realization of the concession.
Principles
Article 2
The regulation of requirements, manner and procedure of granting a concession shall be based on the principles of equal and fair treatment, free market competition and autonomy of choice of contracting parties.
The principle of equal and fair treatment shall include the prohibition against discrimination on any ground whatsoever between participants in the concession granting procedure and in the choice of concessionaires, as well as a duty to supply the participants in the procedure of choosing the concessionaires with complete and correct information as to procedure, standards and criteria for making the choice of concessionaires. No participant in the procedure of choosing concessionaires shall have priority over the others in terms of time, information and approach to the agencies in charge of the concession granting procedure. Decisions shall be rendered, on the ground of impartial criteria made public in advance, and dispatched, with an assignment of reasons, to every participant in the choosing procedure.
The principle of free market competition shall include a prohibition against limiting the competition between participants, and a duty of accepting all the participants whose bids meet the requirements prescribed by law and the concession act.
The principle of autonomy of choice shall include the freedom of contracting parties to freely regulate, in conformity with the law and other regulations and good trade usage, their mutual rights and duties.
Concept of Concession
Article 3
Concession, in terms of the present Law, shall be understood to mean the utilization of natural resources, of good in common use, or the performing of activities of general interest, ceded by a State agency in charge (hereinafter: concession grantor) to a domestic or foreign person (hereinafter: concessionaire) for a definite period of time, under the conditions prescribed by the present Law, and against payment of concession fee.
Foreign person, in terms of the present Law, shall be understood to mean: a foreign legal entity having a business seat abroad; a foreign natural person; a citizen of the State Union Serbia and Montenegro having residence and/or dwelling-place abroad exceeding the period of one year.
Concession, in terms of the present Law, shall be understood to mean also the B.O.T. system concession (build - operate - transfer), including all the forms of that system, which is based on building or reconstruction and financing of a complete facility, equipment or installation, their utilization and handing over into possession of the Republic of Serbia (hereinafter: the Republic) within the time-limit stipulated by contract.
Concession Granting Requirements
Article 4
Concession may be granted to persons meeting the requirements which are provided for by the present Law, the concession act, and the public tender.
Concession Subject
Article 5
The subject of concession may be:
1) exploration and exploitation of all kinds of mineral raw materials;
2) building, restoration, maintenance, and utilization of water resources management facilities, including dams and storage lakes, water supply and water distribution systems, irrigation and drainage systems, and sanitary condition systems;
3) building, maintenance and utilization of roads or reconstruction, development, maintenance and utilization of roads;
4) building, maintenance and utilization of public railroad infrastructure and organising and regulation of railroad traffic or reconstruction, modernization, maintenance or utilization of public railroad infrastructure, and organising and regulation of railroad traffic;
5) building, maintenance and utilization of facilities of air traffic, equipment and airports, or their reconstruction, modernization, maintenance and utilization;
6) building, maintenance and utilization of river navigation facilities and harbours, or their reconstruction, modernization, maintenance and utilization;
7) building, maintenance and utilization of telecommunication facilities, or their reconstruction, modernization, maintenance and utilization;
8) building, maintenance and utilization of oil pipelines, gas pipelines, storage facilities, transport and distribution of gas, or their reconstruction, mondernization, maintenance and utilization;
9) building, maintenance and utilization of municipal facilities for the purpose of performing utility activities;
10) building, maintenance and utilization of power-supply and other facilities for the purpose of production, preservation, transfer and distribution of electric and heating energy, or their reconstruction, modernization, maintenance and utilization;
11) regulation, restoration and utilization of river and lake shores;
12) building, maintenance and utilization of health-care institutions or their reconstruction, modernization, maintenance and utilization, and providing health-care services;
13) building of sport and recreational facilities, sports grounds and spaces for sports and recreation, including centers for sports and cultural activities;
14) utilization of thermal springs for health and production purposes;
15) building of facilities, reconstruction, modernization and utilization of the existing facilities in spas, areas with natural curative properties and other natural values, for the purpose of their utilization;
16) building, maintenance and utilization of tourist trade infrastructure facilities, or their reconstruction, modernization, maintenance and utilization.
The subject of concession may include also the performance of other activities that are designated by law as activities of general interest.
A concession may not be granted to a foreign person for those areas and those fields where, according to the law regulating foreign investments, a foreign person may not be a founder of an enterprise.
Concession Term
Article 6
A concession may be granted for a term not exceeding 30 years.
The concession term shall be determines by considering the subject of concession and the expected gain from performing concession activity. In determining the term referred to in paragraph 1 of the present Article, and particularly in case of ceding exclusive rights, one shall especially consider the degree of the business risk assumed, the need for building facilities in the initial period, as well as the needs for developing a competitive market in the area of activities that are the subject of concession.
The concession contract may provide for a possibility of extending the concession term, should after entering into contract essential changes of requirements do take place under which the concession has been granted, that substantially make more difficult the fulfilment of contract by one of the parties, or due to which the purpose of contract may not be realised, and should such a change be impossible to be foreseen at the moment of entering into contract. Such extension may not exceed the term referred to in paragraph 1 of the present Law.
II PROCEDURE AND MANNER OF CONCESSION GRANTING
Proposal for Granting a Concession
Article 7
A proposal for granting a concession to be submitted to the Government of the Republic of Serbia (hereinafter: the Government) shall be made by a ministry in charge of a corresponding area (hereinafter: ministry in charge).
The proposal for granting a concession may be put forward to the Government also by a competent agency of the autonomous province, if the subject of concession is located in the territory of the autonomous province, as well as by the assembly of the local self-government unit in whose territory the subject of concession is located.
An interested person may initiate the granting of concession with the authorised propounder specified in paragraphs 1 and 2 of the present Article.
The proposal for granting a concession shall particularly include: the indication of the subject of concession, an assessment of warrantableness and amount of investment, approximate term of concession, basic requirements of realization of the concession, the proposal for the amount of fee, the purpose of utilization of the concession subject, and where the proposal initiation is put forward by an interested person, also the data concerning such person (firm's name, name of the individual, registration evidence).
The Government shall notify the propounder of its standpoint, relating to proposal for granting a concession, within four months from the day of receipt of the proposal, at the latest.
If the subject of concession is building, maintenance and utilization of facilities referred to in Article 5, paragraph 1, sub-paragraphs 3, 4, 5, 6, 7, 8 and 10 of the present Law, that are strategically important for the Republic or have an international significance, the proposal for granting a concession shall be forwarded by the Government to the National Assembly of the Republic of Serbia.
The National Assembly of the Republic of Serbia shall notify the Government of its standpoint relating to the proposal specified in paragraph 6 of the present Article within three months from the day of receipt of the proposal, and the Government shall accordingly notify the propounder.
Proposal for Rendering a Concession Act
Article 8
On the ground of Government's standpoint and/or standpoint of the National Assembly in the case referred to in Article 7 of the present Law concerning the purpose of granting a concession, and on the ground of economic, financial, social and other indicators, the ministry in charge shall prepare a proposal for rendering a concession act, that shall be forwarded to the Government within six months from the day of the receipt of Government's standpoint and/or notification relating to the standpoint of the National Assembly.
A proposal for rendering a concession act for exploration and exploitation of all kinds of mineral raw materials in the territory of the autonomous province shall be prepared by a competent agency of the autonomous province, in the manner and under the conditions specified in paragraph 1 of the present Article, for the purpose of forwarding it to the Government.
A proposal for rendering a concession act for building, maintenance and utilization of facilities intended for the performance of utility activities shall be prepared by a competent local self-government agency, in the manner and under the conditions specified in paragraph 1 of the present Article, which proposal shall be forwarded to the Government together with the opinion of the ministry in charge.
The proposal for rendering a concession act shall include:
1) the subject of concession;
2) reasons for granting the concession;
3) information relating to environmental effects of the concession activity, to effects on infrastructure and other commercial areas, on efficient functioning of technical-technological systems;
4) minimal technical, financial and empirical requirements in terms of qualifications to be met by the candidate in order to be admitted to participate in the procedures of choosing the concessionaire and negotiating;
5) term of concession, including the assignment of reasons for the proposed term;
6) data relating to necessary monetary and other requirements and to dynamics of their investing; the way of payment, supplying guarantees or other security instruments to cover the carrying out of concession duties; rights and duties of the concessionaire towards the beneficiaries of services that are the subject of concession, including matters involving the lodging of objections on the part of these beneficiaries; matters of conditions and manner of performing supervision; prices and general requirements as to the utilization of public good and the performing of activities;
7) evaluation of necessary number of work posts and of qualified working force relating to carrying out the concession, should this be proposed as an element of the concession act.
Rendering a Concession Act
Article 9
A concession act shall be rendered by the Government.
The concession act shall be published in the "Official Herald of the Republic of Serbia".
Contents of Concession Act
Article 10
Concession act shall include:
1) the subject of concession and the indication of area of carrying out the concession activity;
2) concession term;
3) basic elements of the public tender, information and instructions regarding the tender dossier;
4) requirements to be met by concessionaire;
5) criteria serving as a ground for choice of the most favourable bid;
6) conditions and manner of carrying out the concession activity (requirements and manner of providing services to beneficiaries, and the like);
7) requirements in the sphere of environmental protection, security and work safety for employees engaged by the concessionaire;
8) kind and amount of the guarantee or other security instruments for carrying out the concession;
9) way of specifying the concession fee;
10) other elements relevant for the regulation of mutual rights and duties of the concessionaire and the concession grantor.
Where the subject of concession is reconstruction, adaptation or restoration of existing facilities, the concession act shall include also an assessment of the amount of investment, which shall be determined by considering the value of the facilities whose reconstruction, adaptation or restoration is the subject of concession.
Manner of Granting Concession
Article 11
A concession shall be granted on the ground of a previously conducted public tender procedure.
By exception, the public tender procedure may be excluded should national defence and security be jeopardised by its conducting, which matter shall be decided upon by the Government.
The act referred to in paragraph 2 of the present Article shall be published in the "Official Herald of the Republic of Serbia".
Public Tender Advertisement
Article 12
A public tender advertisement shall be published by agency in charge of preparation of the proposal for rendering the concession act, specified in the present Law, in the "Official Herald of the Republic of Serbia" and in at least one daily newspaper, while if the subject of concession is building, maintenance and utilization of facilities referred to in Article 5, paragraph 1, sub-paragraphs 3, 4, 5, 6, 7, 8 and 10 of the present Law that are strategically important for the Republic, or are internationally significant, also in an international newspaper.
Should the subject of concession be located in the territory of the autonomous province, the public tender advertisement may be published by the agency in charge of the autonomous province in the official gazette of the autonomous province. In such a case, the time-limits shall be calculated from the day of publishing in the "Official Herald of the Republic of Serbia".
The public tender advertisement shall particularly include:
1) subject of public tender;
2) all the elements of concession act;
3) dates and time-limits for taking part in the public tender, provided such time-limit may not be shorter than 45 days from the day of publication of the public tender advertisement;
4) criteria for participation in the public tender;
5) public tender rules of procedure;
6) manner of submitting the bids (by using a code-letter or under full name of the tender participant);
7) indication of date, time and location of opening of public tender bids that are received;
8) deadline for withdrawal of a public tender bid;
9) indication as to the amount and form of trust money;
10) conditions and manner of refunding the trust money;
11) name of a person in charge for disclosing complete information relevant for the public tender procedure.
Expenses of publishing the public tender advertisement shall be to the debit of the agency placing the advertisement.
Public Tender Bids
Article 13
Public tender bids shall be submitted on the ground of public tender advertisement, directly to the ministry in charge or by registered letter.
If a bid is forwarded by registered letter from the territory of the Republic, the day of receipt of the bid shall be considered the day of handing over the registered letter to the post office.
If the bid is forwarded by registered letter outside the territory of the Republic, the day of receipt of the bid shall be considered the day of receipt in the ministry in charge.
Tender Commission
Article 14
Public tender shall be carried out by a tender commission that is established by a minister in charge for the corresponding area (hereinafter: Commission).
Eminent experts in the fields relevant for the subject of concession shall be nominated in the Commission (financial, juridical, technical and other fields).
On the ground of a particular tender or by invitation, the ministry in charge may engage advisors for performing transactions and extending assistance in the preparation and conducting of public tender and in choosing the best bidder.
One member of the Commission shall be nominated by the National Assembly of the Republic of Serbia.
Should the proposal for granting a concession be submitted by a competent agency of the autonomous province, such agency shall nominate also one member of the Commission.
If the subject of concession is building, maintenance and utilization of utility facilities for the purpose of performing municipal services, the assembly of the local self-government unit, being the location of the concession activity, shall nominate one member of the Commission.
The National Assembly of the Republic of Serbia, the competent agency of the autonomous province and/or the assembly of the local self-government unit shall nominate members of the Commission within 7 days, at the latest, before the day of opening the bids.
Should the National Assembly of the Republic of Serbia, the competent agency of the autonomous province and/or the assembly of the local self-government unit fail to nominate a member of the Commission within 7 days, at the latest, before the day of opening the bids, the Commission shall operate and decide as composed according to paragraph 1 of the present Article.
The Commission shall render decisions by a majority vote out of the total number of members.
Individuals having any kind of business relations whatsoever with any of the public tender participants shall not be nominated to the Commission, which shall also apply to individuals whose spouse, straight line relative without limits, and lateral relative, up to the third degree of kinship, participate in the public tender.
Commission Work
Article 15
The Commission shall take minutes of the public tender procedure that shall include all the remarks of representatives of the bidders relating to the work of the Commission and the course of procedure.
The minutes shall be signed by members of the Commission and the authorised representative of the bidders being present at the opening of bids. Should the authorised representative refuse to sign the minutes, such fact shall be entered in the minutes.
Not-on-time and incomplete bids shall not be considered, and the Commission shall particularly notify of this fact the participant in the tender within five days from the opening of bids.
On the ground of elements of the concession act and the public tender, the Commission shall make a bidders rank-list.
Proposal for Determining a Concessionaire
Article 16
The Commission shall be bound, within 60 days from the day of opening the bids, to forward to the Government a report on the public tender that has been carried out, together with a proposal supplied with an assignment of reasons relating to the choice of the bidder who has offered the best bid.
The report referred to in paragraph 1 of the present Article shall be forwarded to the competent agency of the autonomous province if the subject of concession is located in the territory of the autonomous province.
To the report referred to in paragraph 1 of the present Article the Commission shall enclose the minutes referred to in Article 15 of the present Law, as well as other documents concerning the conducted public tender.
Decision on Determining a Concessionaire
Article 17
Decision on determining a concessionaire shall be made by the Government within 30 days from the day of receipt of the report by the Commission relating to the conducted public tender.
By exception, where the subject of concession is located in the territory of the autonomous province, the Government shall make the decision within 30 day from the day of forwarding the opinion of the executive agency of the autonomous province.
The executive agency of the autonomous province shall be bound to forward the opinion to the Government within a 30 day time-limit, at the latest, from the day of receipt of the report referred to in Article 16, paragraph 2 of the present Law.
Should the executive agency of the autonomous province fail to forward the opinion referred to in paragraph 3 of the present Article, the Government shall make the decision without the opinion of the executive agency of the autonomous province.
The decision on determining a concessionaire shall be published in the "Official Herald of the Republic of Serbia".
Rights of Participants in the Public Tender Procedure
Article 18
A participant in the public tender procedure, his representative or mandatary shall be entitled to be present at the opening of bids. The call to him to be present at the opening of the bids has to be forwarded within 7 days, at the latest, prior to the day of opening the bids.
A participant in public tender shall be entitled to withdraw the bid, by a request in writing, until the expiration of the deadline specified in the public tender advertisement, at the latest. The bid shall be considered withdrawn after the receipt of the request in writing on the withdrawal of the bid.
In the event specified in paragraph 2 of the present Article, the participant in the public tender shall be entitled to the refund of the trust money, within five days from the day of receipt of the request in writing by which the bid is withdrawn.
After the concession granting procedure has been carried out and the decision on determining a concessionaire has been made, the ministry in charge shall forward, in writing, to all the participants in the public tender the information with an assignment of reason, relating to the results of the public tender.
A participant in the public tender shall be entitled to raise an objection challenging the legality of the procedure.
The objection shall be submitted to the Government within a 15 day time-limit from the day of receipt of information relating to the public tender results.
Competent for the objection submitted shall be the Government, and it shall decide within a 15 day time-limit from the day of receipt of the objection.
Refund of Trust Money
Article 19
Participants in the public tender shall be entitled to the refund of trust money, in the manner specified in the public tender advertisement.
Costs of refund of the trust money shall be born by the participant in the public tender.
There shall be no interest payable for the trust money that is refunded within the time-limit specified in the public tender advertisement.
The trust money that is refunded after the expiration of the time-limit referred to in paragraph 3 of the present Article, shall include the interest on arrears covering the days exceeding the time-limit, in conformity with the Law regulating the matter of interest on arrears.
A participant in the public tender determined as a concessionaire, who desists from entering into concession contract, shall not be entitled to refund of the trust money paid.
Validity of Public Tender Procedure
Article 20
Where only one participant appears in the public tender, whose bid is found by the ministry in charge as meeting the public tender requirements and criteria, the Commission may decide, at the proposal of the ministry in charge, to repeat the public tender or, on the ground of negotiations conducted with the participant, may propose to the Government to grant the concession to the participant in the public tender.
If a participant determined as concessionaire on the ground of public tender desists from entering into contract of concession, or fails to enter into contract of concession within the prescribed time-limit, the Commission shall propose as concessionaire the first subsequent participant in the rank-list referred to in Article 15, paragraph 4 of the present Law, except where the Government decides in such a situation to repeat the public tender applying the same requirements and the same procedure.
III CONCESSION CONTRACT
Ground for Conclusion, Negotiating Commission and Form of Contract
Article 21
A concession contract shall be concluded in conformity with the requirements specified in the concession act and the present Law, within 60 days from the day of coming into force of the decision on determining a concessionaire.
The Government shall nominate a negotiating commission charged to specify with the concessionaire, determined on the ground of public tender, the contents of contract, in conformity with requirements set forth by the concession act and the present Law, which commission shall determine, on behalf of the concession grantor and concessionaire, the draft of a concession contract. The negotiating commission shall have a minimum of three members and shall be responsible for its work to the Government.
The concession contract shall be concluded in writing.
Contents of Contract
Article 22
A concession contract shall include the provisions relating to:
1) contracting parties, subject of concession, including the description of facilities, equipment, installations;
2) term of concession and requirements for extending such term, duration of preparation activities;
3) manner and time-limits of providing means for financing concession activity (financial plan) and dynamics of their investment, amount and way of providing security for carrying out the concession duty;
4) requirements for performing the concession activity;
5) product and service standards, technology transfer;
6) criteria for fixing prices -- tariffs of products and services for the end users;
7) concession fee (amount, time-limits, requirements and way of payment);
8) rights and duties in terms of taking measures of providing for general security, health protection and environmental protection, as well as for the liability for compensating the damage caused by jeopardising the general security and the environmental protection:
9) the right to concession transfer;
10) time and manner of handing over immovables, facilities, equipment or installations, and the condition they have to meet in this process;
11) requirements as to amendments or rescission of contract and to relevant consequences, changed circumstances (hardship) and Force Majeure;
12) way of settling disputes and implementation of applicable law;
13) other provisions to be agreed upon by contracting parties.
The contract shall also specify the manner of mutual notification about the execution of contract, the manner of effecting control of such execution and the putting into effect of rights and duties of the contracting parties.
Conclusion of Contract
Article 23
A concession contract shall be concluded by the Government, on behalf and for the account of the Republic, and the concessionaire. Where the concession is granted to several persons, the concession contract shall be concluded by every single concessionaire, or a person authorised by the concessionaires on the ground of special authorization.
If the subject of concession is the building of utility facilities for the purpose of performing municipal activities, the contract shall be concluded by the concessionaire and the competent agency of the local self-government unit, on behalf and for the account of the local self-government unit, and after obtaining the consent in writing by the Government.
Keeping the Files of Contract
Article 24
A concession contract shall be filed in the uniform concession registry to be kept by the ministry in charge of financial affairs.
Contract of Financing
Article 25
On the ground and in conformity with the concession contract, a concession grantor and a concessionaire may conclude with banks and other financial institutions a separate contract to regulate in detail the matter of financing the concession, that is provided for in the concession contract.
The contract referred to in paragraph 1 of the present Article may include a clause that, in case of instituting bankruptcy or winding-up proceedings against the concession enterprise, and at the proposal of a bank or other financial institution, the concession grantor may make a decision on replacing the concessionaire with another concessionaire who meets the requirements as provided for by the concession act.
IV CONCESSION FEE
Duty of Payment
Article 26
A fee shall be paid for the concession which has been granted (hereinafter: concession fee) in conformity with the concession act and the concession contract.
Criteria for Fixing Concession Fee
Article 27
The concession fee shall be fixed depending on the kind, quality, category, quantity, purpose and market price of the natural resources or the good in common use, and/or depending on the kind of activity, business conditions in the market, term of concession, risk assessed, and expected gain (profit).
Allocation of Concession Fee Funds
Article 28
Funds effected from concession fee shall make the revenue of the Republic and shall be paid to the budget payment account of the Republic of Serbia.
Funds referred to in paragraph 1 of the present Article at the amount of 30% shall be set apart for financing the development and infrastructure of the autonomous province in the territory of which one performs the concession activity.
Funds referred to in paragraph 1 of the present Article at the amount of 5% shall be set apart for financing the development and infrastructure of local self-government units in the area of which one performs the concession activity.
Funds effected from concession fee for performing the utility activity shall be the revenue of a local self-government unit.
V EFFECTING OF CONCESSION RIGHTS AND DUTIES
Requirements and Manner of Performing Concession Activity
Article 29
A concessionaire shall build, maintain and utilise facilities and perform concession activity, and/or utilise good of general interest in conformity with regulations covering the urban and country planning and the use of good of general interest, the requirements and manner of performing the activities being the subject of concession, as well as in conformity with regulations in the sphere of environmental protection.
The concessionaire shall acquire the rights of use and management of the subject of concession, in the manner and under the conditions as provided for by the concession act and the concession contract.
Transfer of Concession
Article 30
A concessionaire may transfer to another person the concession granted to him, with the consent of the concession grantor, in the manner and under the conditions as set forth by the concession contract.
Transfer of concession shall be effected through a separate contract that has to have a consent of the concession grantor.
A contract of transfer of concession concluded without consent of the concession grantor shall be null and void.
Increase in Value of Concession Subject
Article 31
An increase in value of facilities, equipment and installations owned by the State, that are functional in utilizing the concession subject or that contribute to its designated use, that has taken place in course of performing the concession activity, shall be the property of the Republic, unless otherwise stipulated by the concession contract.
After the termination of concession activity, the concessionaire shall be entitled to compensation for the improvements made, in terms of paragraph 1 of the present Article, only if this is set forth by the concession contract.
Mode of Handling the Objects Found
Article 32
Objects found in the soil that are of historical, cultural or natural values shall be handed over by the concessionaire, without compensation, to the concession grantor.
Should performing of continued works jeopardise the entirety and/or value of the object found, the concessionaire shall be obliged to suspend the works, and to notify accordingly the state agency in charge of affairs of protection of historical, cultural and natural values.
The concession contract shall include the regulation of mutual rights and duties of concessionaire and concession grantor in the case referred to in paragraph 2 of the present Article.
Protection of Concessionaire's Rights
Article 33
Concessionaire's rights spelled out by the law, the concession contract and the contract on financing the project shall be guaranteed, which in case of foreign persons shall include the rights provided for by international treaties on the promotion and the protection of foreign investments, that are entered into by the Federal Republic of Yugoslavia or the Republic of Serbia.
A concessionaire engaged in exploration of mineral raw materials shall have priority rights to be granted concession for the exploitation of these raw materials, under conditions spelled out by the law and the concession contract.
Remaining Rights and Duties
Article 34
Should it be necessary in granting a concession to expropriate and/or arrange a building site, the expenses of expropriation and/or arrangement of the building site shall be to the debit of the concessionaire, provided the concession contract shall set forth the manner and time-limits of the payment of expenses.
In the event referred to in paragraph 1 of the present Article, the determination of general interest and the expropriation shall be conducted under an urgent procedure.
If the state agency in charge, by applying regulations relating to expropriation, renders an act by which the right of use of facilities constructed that are the subject of concession, is taken away or restricted, the concessionaire shall be entitled to compensation that shall not be lower than that valid in the market.
The compensation shall be paid without delay.
VI CONCESSION ENTERPRISE
Founding, Organising and Business Operation
Article 35
A concessionaire shall found an enterprise, with the head office in the Republic, for the performance of concession activity, within 60 days from the day of entering into concession contract, except if he already has a registered enterprise for performing the same activity.
The concession enterprise shall be founded, engaged in business operation and organised as a limited liability company or a joint-stock company, in conformity with the law regulating the legal status of enterprises, and with other regulations providing for requirements and manner of business operation of enterprises.
All rights and duties of the concessionaire, set forth in the concession contract, shall be transferred to the concession enterprise.
Change of Head Office and Status Changes
Article 36
A change of the head office and status changes of the concession enterprise shall be effected after obtaining concession grantor's consent in writing.
Termination of Concession Enterprise
Article 37
A concession enterprise shall be terminated after the expiration of its term, unless otherwise provided for by the concession contract, as well as in other cases set forth by the law or the concession contract.
In the event of termination of the concession enterprise, the facilities, equipment and installations, and other means included in the concession subject, shall be handed over to the concession grantor.
VII BENEFITS
Tax Relief and Exemptions
Article 38
Tax and customs duty relief and exemptions extended to the concessionaire or the concession enterprise shall be effected in accordance to regulations covering the matters of taxes and customs duties.
Changes in the regulations referred to in paragraph 1 of the present Article shall not apply to the concession enterprise if less favourable for it, as far as relief and/or exemptions valid on the day of concluding the concession contract are concerned.
VIII SETTLING OF DISPUTES
Jurisdiction of Court and Arbitration
Article 39
Disputes taking place in course of the putting into effect of concession rights and duties, whose subject is an immovable, shall be settled by the competent court in the Republic.
For settling disputes taking place in the putting into effect of other mutual rights and duties, it shall be possible to agree on jurisdiction of a domestic arbitration tribunal, and if the concessionaire is an alien, also on the jurisdiction of an international arbitration tribunal.
IX SEVERANCE AND TERMINATION OF CONCESSION RELATIONSHIP
Severance of Concession Relationship
Article 40
A concession relationship shall be severed:
1) should performance of the concession activity jeopardise the environment and health, or the areas and facilities protected by law, which at the time of granting the concession was not possible to foresee;
2) in the event of proclaiming a state of war;
3) in the event of infeasibleness of performing the activity due to considerable damage to the subject of concession that is not the fault, or a consequence of gross negligence on the part of concessionaire or the concession enterprise;
4) in other cases as set forth by the concession contract.
The concession relationship shall continue to exist after the termination of circumstances referred to in paragraph 1, sub-paragraphs 1, 2, and 3 of the present Article, as well as when corresponding conditions materialise that are provided for by the concession contract, in conformity with paragraph 1, sub-paragraph 4 of the present Article.
The concession contract shall regulate mutual rights and duties in the event of severance of the concession relationship.
Termination of Concession Relationship
Article 41
The concession relationship shall be terminated:
1) by termination of the concession contract;
2) by buying-up of the concession;
3) by taking away of the concession;
4) by bankruptcy or winding-up of the concession enterprise;
5) if it is found, by a finally binding judgement, that a criminal offence was committed in the concession granting procedure or in course of the negotiations, which has led or could have led to granting the concession to a specific concessionaire;
6) on the ground of other reasons as stipulated by the concession contract.
Concession contract shall be terminated with the expiration of its term of validity, and by rescission in conformity with provisions of the contract or on the ground of reasons set forth by the law.
Concession relationship may be terminated by buying-up of the concession, under conditions stipulated by concession contract and, exceptionally, should this be dictated by general interest, the buying-up of concession may be effected under the conditions and in the way provided for by regulations covering expropriation, in which case the Government shall pay to the concessionaire, without delay, a full compensation according to market value.
The concession relationship may be terminated by taking away the concession by an act to be rendered by the concession grantor, in the event of a concessionaire failing to perform the concession duty for more than a year, failing to carry out commitments assumed by contract, due to reasons of public security, as well as if performance of concession activity endangers the environment and health of people, while measures provided for by special regulations are not sufficient to prevent these, in the manner and under the conditions set forth by the contract.
Handing over of Facilities
Article 42
After the termination of concession relationship, the facilities that are constructed for the purpose of performing the concession activity, as well as equipment, installations and other means, that are functional in the performance of concession activity, shall become the property of the Republic.
After the termination of concession relationship, the concessionaire shall hand over facilities, equipment and installations referred to in paragraph 1 of the present Article, as well as all other facilities that are the subject of concession, and that are the property of the Republic, in the condition which makes possible their unhindered utilization and functioning.
X CONCLUDING AND TRANSITIONAL PROVISIONS
Article 43
Relations specified by contracts of concession entered into until coming into force of the present Law shall be subject to provisions of these contracts and the laws on the ground of which they have been concluded, unless contracting parties come to agreement to regulate specific matters in conformity with the present Law.
Article 44
On the day of coming into force of the present Law, the Law on Concessions ("Official Herald of the Republic of Serbia", Nos. 20/1997, 22/1997, and 25/1997) shall cease to be effective.
Article 45
The present Law shall come into force on the eighth day from the day of publication in the "Official Herald of the Republic of Serbia".